Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q4 2023 Earnings Presentation
29 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jan 16, 2024
Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call January 16, 2024 The PNC Financial Services Group
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: Delivered Solid Full Year 2023 Results
Delivered Solid Full Year 2023 Results Net Income Continued to execute on our strategic priorities $5.6 billion Diluted Earnings Per Share Capitalized on opportunities across our coast-to-coast franchise $12.79 Grew customers and deepened relationships Adjusted Diluted Earnings Per Share (non-
Slide 4: Balance Sheet: Grew LQ Loans, Deposits and TBV; AOCI Improved
Balance Sheet: Grew LQ Loans, Deposits and TBV; AOCI Improved 4Q23 vs. 3Q23 4Q23 vs. 4Q22 Average balances, $ billions 4Q23 $ Change % Change $ Change % Change Total loans $324.6 $5.1 2% $2.7 1% Investment securities $137.4 ($2.3) (2%) ($5.5) (4%) Federal Reserve Bank (FRB) balances $42.2 $4.3 11% $
Slide 5: Balance Sheet: Increased Loan Balances and Yields
Balance Sheet: Increased Loan Balances and Yields Average Loan Balances +1% Year Over Year (YOY); +2% Linked Quarter (LQ) $321.9 $325.5 $324.5 $319.5 $324.6 $221.6 $224.6 $223.2 $217.7 $222.6 Commercial Loans: 5.75% 5.94% +0.5% YoY Average balances, $ billions 5.57% 5.29% +2.3% LQ 4.75% $100.3 $
Slide 6: Balance Sheet: Strong and Stable Deposit Base
Balance Sheet: Strong and Stable Deposit Base PNC’s Deposit Mix Shift Driven by Commercial Deposits Forecasted Cumulative Deposit Beta Consumer Consolidated $219 $218 $217 $435 Historical Forecast $423 $424 90% 90% 90% 45% ▪ First Fed rate 69% 74% 75% 44% 44% cut expected in mid-2024 ▪ Rate paid Ave
Slide 7: Balance Sheet: High-Quality, Short-Duration Securities and Swaps
Balance Sheet: High-Quality, Short-Duration Securities and Swaps Average Securities Cumulative Projected Runoff Projected AOCI Accretion Duration of 4.1 Years 32% Through 2025 47% Through 2025 $142.9 $139.7 $137.4 $- Average balance, $ in billions $7.5 2.36% 2.57% 2.59% -2% -5% $(10) -9% 33% Burn Do
Slide 8: Income Statement: Record Full Year Revenue
Income Statement: Record Full Year Revenue Three Months Ended Full Year % Change vs. % Change vs. $ in millions 12/31/23 9/30/23 12/31/22 2023 2022 Net interest income $3,403 - (8%) $13,916 7% Noninterest income 1,958 8% (6%) 7,574 (7%) Adjusted Total revenue 5,361 2% (7%) 21,490 2% Operating Nonint
Slide 9: Income Statement: Grew Revenue 2%
Income Statement: Grew Revenue 2% Total Revenue Details of Revenue Three Months Ended Full Year $5,763 % Chg. vs. % Chg. vs. $5,233 $5,361 12/31/23 9/30/23 12/31/22 2023 2022 $2,079 $ millions $1,815 $1,958 Net interest income $3,403 - (8%) $13,916 7% Asset management & brokerage 360 3% 4% 1,412 (2%
Slide 10: Income Statement: Well-Controlled Core Noninterest Expense
Income Statement: Well-Controlled Core Noninterest Expense Noninterest Expense Details of Noninterest Expense Focused on Controlling Expenses $4,074 Three Months Ended Full Year 12/31/23 12/31/23 2023 2023 Reported Non-core Core NIE Core NIE Reported Non-core Core NIE Core NIE $ millions NIE - NIE =
Slide 11: Credit: Strong Credit Quality Performance
Credit: Strong Credit Quality Performance Credit Quality Metrics 4Q22 1Q23 2Q23 3Q23 4Q23 NPLs / Total Loans (Period End) 0.61% 0.62% 0.59% 0.67% 0.68% Delinquencies / Total Loans (Period End) 0.46% 0.41% 0.38% 0.40% 0.43% Nonperforming Loans (NPLs) NCOs / Average Loans 0.28% 0.24% 0.24% 0.15% 0.24%
Slide 12: Outlook: Full Year 2024 Compared to Full Year 2023
Outlook: Full Year 2024 Compared to Full Year 2023 ($ millions; except loans, $ billions) 2023 2024 Guidance Spot loans $321.5 Up 3% - 4% Average loans $323.5 Up ~ 1% Net interest income $13,916 Down 4% - 5% Noninterest income $7,574 Up 4% - 6% Total revenue $21,490 Stable to down 2% Core Noninteres
Slide 13: Outlook: First Quarter 2024 Compared to Fourth Quarter 2023
Outlook: First Quarter 2024 Compared to Fourth Quarter 2023 ($ millions; except loans, $ billions) 4Q23 1Q24 Guidance Average loans $324.6 Stable Net interest income $3,403 Down 2% - 3% Fee income $1,820 Down 6% - 8% Other noninterest income $138 $150 - $200 Total Revenue $5,361 Down 3% – 4% Core no
Slide 14: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information We make statements in this presentation, and we may from time to time make other statements, regarding our outlook for financial performance, such as earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios,
Slide 15: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 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 and
Slide 16: Appendix: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking Information 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, d
Slide 17: Appendix: Granular Deposit Base
Appendix: Granular Deposit Base Consumer Deposits Composition of Deposit Portfolio Commercial Deposits $221 billion at 12/31/23 56% of Total Deposits are Insured $200 billion at 12/31/23 As of 12/31/23 Large Customer Base ~20 million Operating & Relationship Accounts: Consumer Accounts Relationship
Slide 18: Appendix: Office Represents 2.5% of Total Loans
Appendix: Office Represents 2.5% of Total Loans Total Loans as of 12/31/23 PNC’s Commercial Real Estate (CRE) Portfolio $ billions 12/31/23 % of Total Loans Multifamily $15.6 4.8% Office 8.0 2.5% Industrial / Warehouse 4.1 1.3% Total Non-Office CRE Retail 2.5 0.8% $321.5 8.5% Billion Seniors Housing
Slide 19: Appendix: Office CRE Portfolio
Appendix: Office CRE Portfolio Office Portfolio Geographic Diversification Key Office Portfolio Metrics Tenant Classification By Metropolitan Statistical Area Conservative Underwriting Methodology Single- $ billions 12/31/23 Tenant Medical $ in millions 12/31/23 9/30/23 16% Washington, DC $1.2 16% $
Slide 20: Appendix: Strong Capital Position
Appendix: Strong Capital Position In Excess of Regulatory Minimum, Including Impact of Proposals 9.9% (1.5%) (0.2%) 8.2% Impact of Estimated Net Including AOCI Impact of 7.0% (Basel III Endgame) All Other 7.0% (minimum requirement) Components (minimum requirement) (Basel III Endgame) 12/31/23 12/31/
Slide 21: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Consolidated CET1 Ratio, including AOCI & Other Fully Phased-In Expanded Risk-Based Approach (ERBA) Impacts, Basel III Endgame Impacts (non-GAAP) Common Equity Dec. 31, 2023 (estimated), $ in billions Tier 1 Capital Dec. 31, 2023 (estimated), $ in billions R
Slide 22: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Core Noninterest Expense (non-GAAP) and Adjusted Operating Leverage (non-GAAP) For the year ended $ millions Dec. 31, 2023 Dec. 31, 2022 Growth Total revenue $21,490 $21,120 1.75% Total noninterest expense $14,012 $13,170 6.39% Workforce reduction charge (15
Slide 23: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Adjusted Diluted Earnings per Share (non-GAAP) For the three months ended For the year ended Dec. 31, Per Common Dec. 31, Per Common $ millions 2023 Share 2023 Share Net income attributable to common shareholders $744 $5,153 Dividend and undistributed earnin
Slide 24: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Pretax, Pre-Provision Earnings, as adjusted (non-GAAP) For the three months ended For the year ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, $ millions 2023 2023 2022 2023 2022 Total Revenue $5,361 $5,233 $5,763 $21,490 $21,120 Total noninterest expens
Slide 25: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Taxable-Equivalent Net Interest Income (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Net interest income $3,403 $3,418 $3,684 $13,916 $13,014 Taxable-equivalent adju
Slide 26: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Tangible Book Value per Common Share (non-GAAP) For the three months ended $ millions, except per share data Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Book value per common share $112.72 $105.98 $99.93 Tangible book value per common share Common shareholder
Slide 27: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Tangible Common Equity Ratio (non-GAAP) For the three months ended $ millions Dec. 31, 2023 Sept. 30, 2023 Tangible common shareholders’ equity Common shareholders’ equity $44,864 $42,215 Goodwill and other intangible assets (11,244) (11,337) Deferred tax li
Slide 28: Appendix: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Return On Average Tangible Common Equity (non-GAAP) For the three months ended For the year ended $ millions Dec. 31, 2023 Sept. 30, 2023 Dec. 31, 2022 Dec. 31, 2023 Dec. 31, 2022 Return on average common shareholders’ equity 6.93% 13.65% 14.19% 12.35% 13.52
Slide 29: Appendix: Expectations for Preferred Dividends
Appendix: Expectations for Preferred Dividends Preferred Dividends For the three months ended $ millions Mar. 31, 2024 June 30, 2024 Sept. 30, 2024 Dec. 31, 2024 Preferred Dividends $82 $95 $81 $93 The above represents our current estimate for preferred dividends over the course of the next 4 quarte
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