Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q3 2024 Earnings Presentation
29 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Oct 15, 2024
Slide 1: Third Quarter 2024 Earnings Conference Call
Third Quarter 2024 Earnings Conference Call October 15, 2024
Slide 2: Cautionary Statement
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 Third Quarter 2024 Results
Delivered Solid Third Quarter 2024 Results • Grew net interest income and net interest margin $1.5 billion Net Income • Strong fee growth led by capital markets and advisory activity $3.49 Diluted Earnings per Share (EPS) • Expenses well controlled; Generated positive operating leverage +1.3% Positi
Slide 4: Increased Deposits and Grew Tangible Book Value
Increased Deposits and Grew Tangible Book Value 3Q24 vs. 2Q24 3Q24 vs. 3Q23 Average balances, $ billions 3Q24 $ Change % Change $ Change % Change Total loans $319.6 $(0.3) – $0.1 – Investment securities $142.3 $1.0 1% $2.6 2% Federal Reserve Bank (FRB) balances $44.9 $4.2 10% $7.0 18% Deposits $422.
Slide 5: Loans Stable, Impacted by Low Utilization
Loans Stable, Impacted by Low Utilization Average Consolidated Loan Balances C&IB Utilization Remains Low ~55% $320 $320 $320 $218 $219 $219 51.9% 50.9% 50.7% 6.13% Commercial Loans: 6.05% Average balances, $ billions 5.75% 0.6% YoY Average utilization Stable LQ $102 $101 $101 Consumer Loans: (1.2)%
Slide 6: High-Quality, Short Duration Security and Swap Portfolios
High-Quality, Short Duration Security and Swap Portfolios Investment Securities Balances Active Swap Balances Estimated duration of 3.3 years Receive fixed rate of 3.08% as of 9/30/24 $34 $33 $142 $29 $140 $141 $ billions Swap portfolio as of 9/30/24, Average balances, $ billions 3.08% 9/30/23 6/30/
Slide 7: Short Duration Driving Meaningful AOCI Accretion
Short Duration Driving Meaningful AOCI Accretion Cumulative Projected Runoff Securities and Swap AOCI Accretion 34% of securities and swap portfolio maturing through 2026 40% of securities and swap AOCI to accrete back through 2026 $- Historical Projected $(10) (5)% $(20) (8)% (11)% $(30) $(2.9) (14
Slide 8: Strong and Stable Deposit Base
Strong and Stable Deposit Base Consolidated Average Deposit Balances Deposit Base Highlights Total Deposits increased 1.2% LQ: $423 $424 $420 $417 $422 – Primarily driven by growth in interest- $315 $319 $321 $326 bearing commercial deposits $321 Average balances, $ billions Rate paid on IB deposits
Slide 9: Income Statement
Income Statement Quarter to Date Year to Date $ millions 3Q24 LQ YoY YTD 2024 YoY Net interest income $3,410 3% – $9,976 (5)% Fee income (non-GAAP) 1,953 10% 13% 5,476 7% Other noninterest income 69 (79)% (27)% 536 11% Noninterest income $2,022 (4)% 11% $6,012 7% Total revenue $5,432 – 4% $15,988 (1
Slide 10: LQ Revenue Growth Driven By Higher Fee Income and NII
LQ Revenue Growth Driven By Higher Fee Income and NII Total Revenue Details of Revenue Includes $141 million Includes $(128) million of significant items Visa derivative Quarter to Date Year to Date $5,411 $5,432 $ millions 3Q24 LQ YoY 2024 YoY $5,233 $2,109 $2,022 Net interest income $3,410 3% – $9
Slide 11: Well Controlled Noninterest Expense
Well Controlled Noninterest Expense Noninterest Expense Details of Noninterest Expense Quarter to Date Year to Date $3,357 $3,327 $ millions 3Q24 LQ YoY 2024 YoY $3,245 Personnel $1,869 5% 5% $5,445 – Occupancy 234 (1)% (4)% 714 (3)% $ millions Equipment 357 – 3% 1,054 1% 62% 62% 61% Marketing 93 –
Slide 12: Credit Quality
Credit Quality Nonperforming Loans (NPLs) Credit Quality Metrics 3Q23 4Q23 1Q24 2Q24 3Q24 NPLs, ex. CRE CRE NPLs NPLs / Total Loans (Period end) 0.67% 0.68% 0.74% 0.78% 0.80% $2,578 Delinquencies / Total Loans (Period end) 0.40% 0.43% 0.40% 0.40% 0.40% $2,503 $2,380 NCOs / Average Loans 0.15% 0.24%
Slide 13: Credit Quality – Office Commercial Real Estate (CRE)
Credit Quality – Office Commercial Real Estate (CRE) Office CRE Loan Balances Multi-Tenant Office CRE Portfolio Multi-Tenant loans represent 54% of total office portfolio Non-Criticized Criticized, Accrual Criticized, NPL Reserves / Loans $8.6 $8.0 $7.8 $7.5 $7.2 All Criticized Ratio: 50.2% Other $7
Slide 14: Fourth Quarter 2024 Compared to Third Quarter 2024
Fourth Quarter 2024 Compared to Third Quarter 2024 $ millions; except loans, $ billions 3Q24 4Q24 Guidance Average loans $319.6 Stable Net interest income $3,410 Up ~1% Fee income (non-GAAP) $1,953 Down 5% – 7% Other noninterest income $69 $150 – $200 Total revenue $5,432 Stable Noninterest expense
Slide 15: Appendix: Cautionary Statement
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 16: Appendix: Cautionary Statement
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. These statements are based on our views that: −
Slide 17: Appendix: Cautionary Statement
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 18: CRE Portfolio Represents 11% of Total Loans
Appendix: CRE Portfolio Represents 11% of Total Loans Total Loans PNC’s Commercial Real Estate (CRE) Portfolio as of 9/30/24 $ billions 9/30/24 % of Total Loans Multifamily $16.7 5.2% Office 7.2 2.2% Industrial / Warehouse 4.0 1.2% Commercial Retail 2.2 0.7% Total Real Estate Seniors Housing 1.8 0.6
Slide 19: Multifamily CRE Portfolio
Appendix: Multifamily CRE Portfolio CRE Multifamily Loans Geographic Diversification Key Multifamily Portfolio Metrics: as of 9/30/24 by Metropolitan Statistical Area Conservative Underwriting Methodology $ billions 9/30/24 $ millions 9/30/24 6/30/24 Miami, FL $1.2 Midrise Total Loans ($ billions) $
Slide 20: Office CRE Portfolio
Appendix: Office CRE Portfolio Tenant Classification Geographic Diversification Key Office Portfolio Metrics: Single- by Metropolitan Statistical Area Conservative Underwriting Methodology Tenant Medical 9/30/24 9/30/24 6/30/24 $ billions $ millions 17% 16% Government Washington, DC $1.0 $7.2 Total
Slide 21: 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 Risk Equity Weighted September 30, 2024 (estimated); $ billions Tier 1 Capital September 30, 2024 (estima
Slide 22: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Core Noninterest Expense (non-GAAP) For the three months ended LQ Change For the nine months ended YoY Change $ millions Sep. 30, 2024 Jun. 30, 2024 $ % Sep. 30, 2024 Sep. 30, 2023 $ % Total noninterest expense $3,327 $3,357 $(30) (1)% $10,018 $9,938 $80 1%
Slide 23: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Pretax, Pre-Provision Earnings (non-GAAP) For the three months ended For the nine months ended $ millions Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023 Total revenue $5,432 $5,411 $5,233 $15,988 $16,129 Total noninterest expense 3,327
Slide 24: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Fee Income (non-GAAP) For the three months ended For the nine months ended $ millions Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023 Noninterest income Asset management and brokerage $383 $364 $348 $1,111 $1,052 Capital markets and adv
Slide 25: 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 nine months ended $ millions Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Sep. 30, 2024 Sep. 30, 2023 Net interest income $3,410 $3,302 $3,418 $9,976 $10,513 Taxable-equivalent
Slide 26: 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 Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Book value per common share $124.56 $116.70 $105.98 Tangible book value per common share Common shareholder
Slide 27: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Tangible Common Equity Ratio (non-GAAP) For the three months ended $ millions Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Tangible common shareholders’ equity Common shareholders’ equity $49,442 $46,397 $42,215 Goodwill and other intangible assets (11,188) (11
Slide 28: Non-GAAP to GAAP Reconciliation
Appendix: Non-GAAP to GAAP Reconciliation Return On Average Tangible Common Equity (non-GAAP) For the three months ended $ millions Sep. 30, 2024 Jun. 30, 2024 Sep. 30, 2023 Return on average common shareholders’ equity 11.72% 12.16% 13.65% Average common shareholders’ equity $47,628 $44,916 $42,069
Slide 29: Appendix: Preferred Dividends
Appendix: Preferred Dividends Preferred Dividends For the three months ended For the year ended $ millions Mar. 31, 2024 Jun. 30, 2024 Sep. 30, 2024 Dec. 31, 2024 Dec. 31, 2024 Preferred dividends $82 $95 $82 $94 $352 The above represents our current estimate for preferred dividends in 2024 for curr
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