Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q3 2018 Earnings Presentation
20 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Oct 12, 2018
Slide 1: Third Quarter 2018 Earnings Conference Call
Exhibit 99.2 Third Quarter 2018 Earnings Conference Call October 12, 2018 @PNC
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and @PNC 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 its co
Slide 3: Third Quarter 2018 Highlights
Third Quarter 2018 Highlights = Delivered strong quarterly results — Higher net interest income — Net interest margin expansion — Higher fee income — Grew average loans and deposits — Strong credit quality = Continue to invest in our strategic priorities to create long-term shareholder value: expand
Slide 4: Balance Sheet: Well-Positioned
Balance Sheet: Well-Positioned ®PNC Change vs. Average balances, $ billions 3018 2018 3017 Highlights Loans $223.3 $0.7 $4.1 * Growth in commercial and consumer lending Investment securities $80.8 $3.3 $6.4 = Investing into rising rate environment Federal Reserve Bank balances $188 = $(1.9) $4.6) *
Slide 5: Balance Sheet: Loans and Deposits
Balance Sheet: Loans and Deposits PNC Loans Deposits $259.5 $261.0 $262.5 pols si coat $180.5 $184.3 $186.3 $146.9 $149.7 $149.9 $72.3 $72.9 $73.4 3017 2018 3018 Noninterest-bearing earing Deposit Rate aan e Current Beta Cumulative Beta | 7 3 sey eae vate Jun, 2018 Dec. 2015 Stated to 3018 to 3018 |
Slide 6: Income Statement: Solid Results
Income Statement: Solid Results $ millions Net interest income Fee income Other noninterest income Total revenue Noninterest expense Pretax, pre-provision earnings Provision Pretax income Income taxes Net income Diluted EPS 318 $2,466 1,590 301 4,357 2,608 1,749 88 1,661 261 $1,400 3018 $2.82 Change
Slide 7: Income Statement: Strong Revenue Trends
Income Statement: Strong Revenue Trends @PNC 6% YOY Total Revenue Growth $ millions Noninterest Income 5% YOY Net Interest Income Growth 8% YOY Fee Income Growth Change Change $4,357 = - $4,125 — - yD ~~ YTO : $ millions 3018 2018 3017 3018 3017 Asset management $486 «$30 $65 | $1,397 $175 Consumer
Slide 8: Income Statement: Noninterest Expense
Income Statement: Noninterest Expense Consistent Efficiency Ratio While Growing and Investing in our Business $ millions we al @ &£ o 5 e | Oe e i. | 8 3Q17 2018 3Q18 MNoninterest Expense OEfficiency Ratio @PNc Noninterest Expense Detail Change vs. $ millions 3ai8 2018 3017 Personnel $1,413 $57 $127
Slide 9: Credit Quality: Remains Strong
Credit Quality: Remains Strong Nonperforming Loans $1,873 1,865 E ii - 7 3Q17 4Q17 1018 2018 3Q18 $ millions @PNc Delinquencies - : | 3Q17 4Q17 1018 2018 3Q18 ~ Accruing loans past due 30-days or more $ millions Provision $ millions 3Q17 4Q17 1018 2018 3018 Net Charge-Offs $ millions 3Q17 4Q17 1018
Slide 10: Outlook: Fourth Quarter 2018 Compared to Third Quarter 2018
Outlook: Fourth Quarter 2018 Compared to Third Quarter 2018 @PNC Balance Loans Up modestly Sheet Net interest income Up low-single digits Fee income Up low-single digits Income Other noninterest income $225 - $275 million Statement Noninterest expense Up low-single digits Loan loss provision $100 -
Slide 11: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @PNc Information 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 i
Slide 12: 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 substantially different than those we are currently expecting and do not take into account potential lega
Slide 13: 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, where appropriate, through effective use of systems and controls, third-party insuran
Slide 14: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios @PNc Because PNC remains in the parallel run qualification phase for the advanced approaches, PNC's regulatory risk-based capital ratios in 2018 and 2017 are calculated using the standardized approach for determining risk-weighted assets. Under the stand
Slide 15: Basel III Common Equity Tier 1 Capital Ratios
Basel III Common Equity Tier 1 Capital Ratios Appendix: Basel Ill Regulatory Capital Ratios @Pnc [s mnitions lcomman stock, related surplus, and retained earrings, net af treasury stock Less regulatory capital adjustments: Goodwill and disallowed intangibles, net of deferred tax liabilities Basel to
Slide 16: Non-GAAP to GAAP Reconciliation: Fee Income
Appendix: Non-GAAP to GAAP Reconciliation @PNc Fee Income (Non-GAAP) For the three months ended For the nine months ended % Change % Change| Sep.30, Jun.30, Sep.30, “3018vs. 3Q18vs. Sep.30, $ miltions 201820182017 2aig_ 3017-2018 Asset management $486 $456 $421 ™% 15% $1,397 Consumer services 377 38
Slide 17: Non-GAAP to GAAP Reconciliation: Return on Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation Return on Tangible Common Equity For the three months ended $ mitts ery Return on average common shareholders’ equity 12.32% JAverage common shareholders’ equity $42,668 Average Goodwill and Other intangible assets, (9.498) Average deferred tax liabilities o
Slide 18: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation @PNc Tangible Book Value per Common Share (Non-GAAP) % Change W308 9/30/18 $ millions, except per share data Sep.30, Jun.30, Sep. 30, vs. vs. 2018 2018 2017/30/18 9/30/17 Book value per common share $93.22 $92.26 $89.05 1% 5% HTangible book value per common
Slide 19: Non-GAAP to GAAP Reconciliation: Pretax Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation @PNc Pretax Pre-Provision Earnings (Non-GAAP) For the three months ended % Change Scenes Sep.30, Jun.30, Sep.30, 3016vs. 3078s. 2018 2018S 2017 = 20183017 Net interest income $2,466 $2413 $2,345 2% 5% Noninterest income 1891 1911 1,780 (1%) 6% Total revenue
Slide 20: Other Noninterest Income: Net Visa Activity
Appendix: Other Noninterest Income @PNc Net Visa Activity For the three months ended Sep.30, Jun.30, Mar.31, Dec. 31, Sep. 30, 1$ millions 2018 2018 2018 2017 2017 Gains on Visa Sales $ - $ - §$ «4 - $ Derivative Fair Value Adjustments ® (32) 27 (2) (248) (12) Net Visa Activity $2) $ 27 $ 2 $ (248)
PNC Financial Services Group — Q3 2018 Earnings Presentation on 6ix