Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q2 2021 Earnings Presentation
27 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jul 14, 2021
Slide 1: Second Quarter 2021 Earnings Conference Call
The PNC Financial Services Group Second Quarter 2021 Earnings Conference Call July 14, 2021 Exhibit 99.2
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information Our earnings conference call presentation is not intended as a full business or financial review and should be viewed in the context of all of the information made available by PNC in its SEC filings and on our corpora
Slide 3: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights 2 − Basel III common equity Tier 1 (CET1) capital ratio – June 30, 2021 ratio is estimated. Details of the calculation are presented in the capital table in the financial highlights. − Adjusted metrics are calculated without the impact of the initial $1,006 million pro
Slide 4: Created Top U.S. Bank with Coast-to-Coast Franchise
Created Top 5 U.S. Bank with Coast-to-Coast Franchise 3− Branches include both PNC Bank branches and BBVA USA branches. Assets, loans, deposits, and U.S. branches represent 6/30/21 period end balances and branches. Expansion in Fast Growing Sunbelt Markets Combined presence in 29 of the top 30 U.S.
Slide 5: Balance Sheet: Well-Positioned to Serve Customers
Balance Sheet: Well-Positioned to Serve Customers 4 Loan Balances: Securities Balances: Deposit Balances: FRB Balances: 6/30/21 vs. 3/31/21 6/30/21 vs. 6/30/20 Spot balances; $ billions 6/30/21 $ Chg. % Chg. $ Chg. % Chg. Total loans $294.7 $57.7 24% $36.5 14% Investment securities $126.5 $28.2 29%
Slide 6: Balance Sheet: Loan and Deposit Growth Due to BBVA USA
Balance Sheet: Loan and Deposit Growth Due to BBVA USA 5 Sp ot b al an ce s, $ b ill io ns Spot Loans Post-BBVA Loan Mix Consistent with Legacy PNC Spot Deposits Loan to Deposit Ratio of 65% Sp ot b al an ce s, $ b ill io ns $370.7 $82.2 $346.0 $355.1 $365.3 $375.1 $452.9 0.23% 0.12% 0.08% 0.06% 0.0
Slide 7: Balance Sheet: Deploying Excess Liquidity
Balance Sheet: Deploying Excess Liquidity 6 Securities Yield Avg. IOR 2.41% 2.18% 2.08% 1.97% 1.75% 0.10% 0.10% 0.10% 0.10% 0.11% Sp ot b al an ce s, $ b ill io ns − Avg. IOR – Average of the daily rate for Interest on Reserves (IOR) on balances held at the Federal Reserve for the quarter indicated
Slide 8: Income Statement: Solid Second Quarter Results
Income Statement: Solid Second Quarter Results 7 − Pretax, pre-provision earnings (Non-GAAP) – See the reconciliation in the appendix. − Net interest margin is calculated using taxable-equivalent net interest income, a Non-GAAP measure, a reconciliation of which is provided in the appendix. − BBVA U
Slide 9: Net Interest Income and Noninterest Income
8 1Q21 2Q21 $ millions PNC PNC Legacy + BBVA USA + Integration Costs = Reported Net interest income $2,348 $2,345 $236 --- $2,581 Asset management $226 $235 $4 --- $239 Consumer services $384 $442 $15 --- $457 Corporate services $555 $661 $27 --- $688 Residential mortgage $105 $100 $3 --- $103 Servi
Slide 10: Income Statement: Expenses Reflect BBVA USA Acquisition
Income Statement: Expenses Reflect BBVA USA Acquisition 9 Noninterest Expense Expenses Elevated Due to BBVA USA and Significant Items Details of Noninterest Expense Well-Positioned to Improve Efficiency Ratio $ m ill io ns $ millions 2Q21 Reported expense (GAAP) $3,050 Significant items Integration
Slide 11: Credit: Solid Credit Quality Performance
Credit: Solid Credit Quality Performance 10 − BBVA USA 2Q21 charge-offs of $248 million primarily relate to required purchase accounting treatment. − NCO / Average Loans represents annualized net charge-offs (NCO) to average loans for the three months ended. − Delinquencies represents accruing loans
Slide 12: Credit: Well-Reserved for the Current Environment
Credit: Well-Reserved for the Current Environment 11 Allowance for Credit Losses (ACL) ACL 3/31/21 ACL 6/30/21 $ m ill io ns $1,006 $1,161 $5,221 $6,375 2.20% 2.16% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 0 1000 2000 3000 4000 5000 6000 7000 8000 3/31/21 BBVA USA Portfolio Econ 6/30/21 Portfolio Changes
Slide 13: Update on BBVA USA Acquisition Metrics
Update on BBVA USA Acquisition Metrics 12 Metric June 30, 2021 At Announcement Transaction total value $11.480 billion, all cash $11.567 billion, all cash Tangible book value $93.83 $87.59 Deposit premium 2.5% 3.7% BBVA USA ACL ratio 3.1% 3.9% CET1 10.0% 9.3% Earnings per share accretion ~21% in 202
Slide 14: Outlook: Third Quarter 2021 Compared to Second Quarter 2021
Outlook: Third Quarter 2021 Compared to Second Quarter 2021 13 − Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential legal and regulatory contingencies. − Period-end loans, net interest income, fee income, and nonint
Slide 15: Outlook: Full Year 2021 Guidance
Outlook: Full Year 2021 Guidance 14 − Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential legal and regulatory contingencies. − Revenue and noninterest expense excluding integration expense outlooks represent estimat
Slide 16: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 15 This presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial review. It should not be viewed in isolation but rather in the context of all of the inf
Slide 17: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 16 Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account potential legal
Slide 18: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 17 Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance
Slide 19: BBVA USA Proforma Second Quarter Contributions
Appendix: BBVA USA Proforma Second Quarter Contributions 18 $ millions PNC 1Q21 PNC Legacy 2Q21 + BBVA USA 2Q21 + Initial Provision & Integration Costs = PNC Reported 2Q21 Net interest income $2,348 $2,345 $236 --- $2,581 Asset management $226 $235 $4 --- $239 Consumer services $384 $442 $15 --- $45
Slide 20: COVID-19 High Impact Industries
Appendix: COVID-19 High Impact Industries 19 − PPP Lending within the Commercial Real Estate and Related Loans category is not material. − PNC balances as of 6/30/21 and BBVA USA balances as of 5/31/21; balances exclude securitizations. − Commercial & Industrial loans exclude PNC Real Estate busines
Slide 21: Oil & Gas Loans
Appendix: Oil & Gas Loans 20− PNC balances as of 6/30/21 and BBVA USA balances as of 5/31/21; balances exclude securitizations, loans held for sale, and commercial real estate loans. − BBVA USA contributed $2.1 billion in balances to the $4.7 billion of outstanding Oil & Gas loan balances shown abov
Slide 22: Non-GAAP to GAAP Reconciliation: Return on Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation 21 Return On Tangible Common Equity (Non-GAAP) For the three months ended $ millions June 30, 2021 Mar. 31, 2021 June 30, 2020 Return on average common shareholders’ equity 8.32% 14.31% 30.11% Average common shareholders’ equity $50,246 $49,842 $47,854 Avera
Slide 23: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation 22 Tangible Book Value per Common Share (Non-GAAP) For the three months ended $ millions, except per share data June 30, 2021 Mar. 31, 2021 June 30, 2020 Book value per common share $120.25 $118.47 $115.26 Tangible book value per common share Common sharehol
Slide 24: Non-GAAP to GAAP Reconciliation: Pretax, Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation 23 Pretax, Pre-Provision Earnings (Non-GAAP) For the three months ended $ millions June 30, 2021 Mar. 31, 2021 June 30, 2020 Net interest income $2,581 $2,348 $2,527 Noninterest income 2,086 1,872 1,549 Total Revenue $4,667 $4,220 $4,076 Noninterest expense
Slide 25: Non-GAAP to GAAP Reconciliation: Taxable-Equivalent Net Interest Income
Appendix: Non-GAAP to GAAP Reconciliation 24 Taxable-Equivalent Net Interest Income (Non-GAAP) For the three months ended $ millions June 30, 2021 Mar. 31, 2021 Dec. 31, 2020 Sept. 30, 2020 June 30, 2020 Net interest income (GAAP) $2,581 $2,348 $2,424 $2,484 $2,527 Taxable-equivalent adjustments 15
Slide 26: Non-GAAP to GAAP Reconciliation: Noninterest Expense Excluding Integration Expense
Appendix: Non-GAAP to GAAP Reconciliation 25 Noninterest expense excluding integration expense (Non-GAAP) For the three months ended For the year ended $ millions June 30, 2021 Mar. 31, 2021 June 30, 2020 Dec. 31, 2020 Noninterest expense (GAAP) $3,050 $2,574 $2,515 $10,297 Integration expense (101)
Slide 27: Non-GAAP to GAAP Reconciliation: Adjusted Metrics
Appendix: Non-GAAP to GAAP Reconciliation 26 Adjusted Metrics (Non-GAAP) For the three months ended June 30, 2021 $ millions, except for ratios and EPS Reported (j) Initial Provision & Integration Costs (k) Adjusted (j-k) (Non-GAAP) Total revenue (a) $4,667 ($10) $4,677 Noninterest expense (b) 3,050
PNC Financial Services Group — Q2 2021 Earnings Presentation on 6ix