Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q2 2018 Earnings Presentation
22 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jul 13, 2018
Slide 1: Second Quarter 2018 Earnings Conference Call
Exhibit 99.2 Second Quarter 2018 Earnings Conference Call July 13, 2018 The PNC Financial Services Group
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and @PNc Non-GAAP Financial Information Our carnings 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 its co
Slide 3: Second Quarter 2018 Highlights
Second Quarter 2018 Highlights = Delivered strong results — Net income up 9% — Revenue up 5% — Net interest income up 2% — Net interest margin up 5 bps — Noninterest income up 9% — Noninterest expense up 2% — Average loans up 1% — Average investment securities up 4% ~ Growth rates crnpared to 1018 @
Slide 4: Balance Sheet: Well-Positioned
Balance Sheet: Well-Positioned @®PnNc Change vs Average balances, $ billions 2018 1018 2017 Highlights Total loans $222.7 $1.6 $6.3 * Growth in commercial and consumer lending Investment securities $77.5 $2.8 $2.1 = Investing into rising rate environment Federal Reserve Bank balances $20.7 $14.7) $1
Slide 5: Balance Sheet: Earning Assets
Balance Sheet: Earning Assets PNC Loans Investment Securities Cash at the Federal Reserve 222.7 $216.4 $221.1 $: ins $144.2 $148.2 $149.7 $75.4 $74.7 $22.1 © $20.7 $25.4 a $72.2 $72.9 $73.0 EF 2 g 4 2 2017 1018 2018 2ai7 i018 2ai8 2017 1918 2ai8 Consumer m Commercial @Tolal Loan Yield | ml Investmen
Slide 6: Balance Sheet: Deposits
Balance Sheet: Deposits @PNC Stable Deposit Base Deposit Betas 85% Average Loan to Deposit Ratio Cumulative Betas Migrating Toward Stated Betas $256.4 $260.7 $261.0 Current Beta Average balances, $ billions Cumulative Beta 2Q17 1018 2Q18 lm Noninterest-bearing minteresl-bearing @ Deposit Rate — Comm
Slide 7: Income Statement: High Quality Results
Income Statement: High Quality Results @PNc Change vs $ millions 2018 1018 2017 Net interest income $2,413 $52 $155" Cae in earning assels, parlially offset Noninterest income 1,911 161 109 = Executing on strategic priorities to grow fee-based revenue Total revenue 4,324 264 = 5% linked quarter grow
Slide 8: Income Statement: Strong Revenue Trends
Income Statement: Strong Revenue Trends Total Revenue 7% Year-Over-Year Total Revenue Growth $4,324 $4,111 2Q17 1018 2Q18 @Noninterest income @Net interest income ONIM NIM — Net interest nargin, @PNC Noninterest Income Diverse Sources of Fee-Based Revenue Change vs $rnillions 20181182017 Asset manag
Slide 9: Income Statement: Continued Focus on Expense Management
Income Statement: Continued Focus on Expense Management Controlling Expenses While Growing and Investing in our Business $2,479 $2,527 $2,584 $ millions 2017 1018 2018 MNoninterest Expense Efficiency Ratio @PNc Highlights Linked quarter noninterest expense increased $57 million, or 2%, reflecting se
Slide 10: Credit Quality Remains Strong
Credit Quality. Remains Strong Nonperforming Loans $1,957 $1,973 9 $1,865 Ti 2017 3017 4Q17 1018 2018 @PNc Delinquencies $1,520 $1,326] fl $1,38998 $1,361 2 2Q17 3017 4Q17 1018 2Q18 Accruing loans past due 30 days or more Provision $ millions 2017 3017 4Q17 1018 2018 Net Charge-Offs 2Q17 3017 4Q17 1
Slide 11: Outlook: Third Quarter 2018 Compared to Second Quarter 2018
Outlook: Third Quarter 2018 Compared to Second Quarter 2018 Balance Loans Sheet Net interest income Fee income Income Other noninterest income Statement Noninterest expense Loan loss provision Refer to Cautionary Staternentin the Appendix. including sump regulatory contingencies, Up modestly Up low-
Slide 12: Outlook: Full Year 2018 Compared to Adjusted Full Year 2017
Outlook: Full Year 2018 Compared to Adjusted Full Year 2017 Balance Sheet Income Statement Loans Revenue Noninterest expense Effective tax rate Up mid-single digits Up higher end of mid-single digits Up lower end of mid-single digits Approximately 17% Guidance is based off of adjusted 2017 results (
Slide 13: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNC Information This presentation includes “snapshot” information about PNC used by way ol 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
Slide 14: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @PNc Information Our forward looking financial statements are subject to the risk that economic and financial market conditions will be subs we are currently expecting and da not take inta accaunt potential legal and regulatory contingencies.
Slide 15: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNC Information Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, whore appropriate, through effective use of systems and controls, third-party insuranc
Slide 16: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios @®PN Because PNC remains in the parallel run qualification phase for the advanced approaches, PNC's regulalory risk-based capital ratios in 2018 and 2017 are calculated using the standardized approach for determining risk-weighted assets. Under the stand
Slide 17: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios Basel Ill Common Equity Tier 1 Capital Ratios @PNCc Lees reguistory cap tel agjust ments: Gocdw LL and ciselicwed incargioles, net of tax licbiities Fay rasa Baan a 2017 Transitisl Basel il (Nen-Gaapy Basel ll Fics Ban Oar. 3, un, sun 3, y mia m7 29 Comm
Slide 18: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PNCc Fee Income (Non-GAAP) $ in millions Asset management $456 $455 $398 - 15% Consumer services 381 357 360 7% 6% Corporate services 487 429 466 14% 5% Residential mortgage 84 7 104 (13%) (19%) Service charges on deposits 167 170 1% (1%) Total fee income $
Slide 19: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation @PNC Tangible Book Value per Common Share (Non-GAAP) “% Change 6/30/18 6/30/18 $ in millions, except per share data Jun.30, Mar.31, Jun. 30, vs. vs. 2018 2018 2017 3/31/18 _ 6/30/17 Book value per common share $92.26 © $91.39 $87.78 1% 5% Tangible book value
Slide 20: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Pretax Pre-Provision Earnings (Non-GAAP) in millions ait Net interest income $2,413 Noninterest income 1911 Total revenue $4,324 Noninterest expense 2,584 Pretax pre-provision earnings $1,740 Net income $1,356 1018 $1,584 $1,239 For the three months ended 20
Slide 21: Other Noninterest Income
Appendix: Other Noninterest Income @PNC Net Visa Activity For the three months ended Jun.30, Mar.31, Dec.31, Sep.30, Jun. 30, $ in miltions 2018 2018 2017 2017 2017 Gains on Visa Sales $ = a) - $ - $ > Derivalive Fair Value Adjustments 27 (2) (248) (12) (4) Net Visa Activity $ 27 $ (2) $ (248) $ (12
Slide 22: 2017 Impact of Tax Legislation and Significant Items
Appendix: 2017 Impact of Tax Legislation and Significant Items @PNC 2017 Adjustments for Tax Legislation and Significant Items TaxLegistat Significant items Flow Visa Employee 2017 Through -RMSR-—FalrValue —«PNC_—RealEstate Pension Total 2017 Reported impectof Fair Value Derivative Foundation Dispos
PNC Financial Services Group — Q2 2018 Earnings Presentation on 6ix