PNC Financial Services Group, Inc. (the) · NYSE:PNC
PNC Financial Services Group, Inc. (the) — Q4 2016 Earnings Presentation
24 slides from PNC Financial Services Group, Inc. (the)'s earnings presentation, Jan 13, 2017
Slide 1: Fourth Quarter 2016 Earnings Conference Call
Exhibit 99.2 Fourth Quarter 2016 Earnings Conference Call January 13, 2017
Slide 2: Cautionary Statement Regarding Forward-Looking and Non-GAAP Financial Information
Cautionary Statement Regarding Forward-Looking and Non- @®PNC GAAP Financial Information Our earnings conference call presentation is not intended as a full business or financial review and a be viewed in the context of all of the information made available by PNC in its SEC filings and on its corpo
Slide 3: 2016 Highlights
2016 Highlights * Delivered high quality and consistent results — Diverse revenue sources + Higher net interest income + Higher fee income — Grew loans and deposits — Stable expenses * CIP savings funded investments in our business — Strong credit quality + Energy loans drove higher provision — Stro
Slide 4: Balance Sheet: Grew Loans, Deposits and Securities
Balance Sheet: Grew Loans, Deposits and Securities @PNc Change vs. Average balances tree months ended) Sbilion 4a16 301s 4as. commercial lansing 188 $7 = * Growth ven by corporate Banking and real estate + Growth in auto, residential mortgage, and creditcard Consumer tending = 03 (1.2) partially off
Slide 5: Income Statement: High Quality and Consistent Results
Income Statement: High Quality and Consistent Results @®PNC Change FY16 vs. FYIS Change 4016 vs. 3Q16 $ millions Full Year Highlights Net interest income $8,391 $113 | $2,130 $35. * Higher loans / securities balances and higher loan yields Fee income 5,647 37) 1,669 (26) pairaronrhabin en semces Oth
Slide 6: Income Statement: Net Interest Income Growth
Income Statement: Net Interest Income Growth @®PNcC Net Interest Income 2016 Highlights Growth in 2016 Net interest income (NII) increased, driven by core Nil Core net interest income % 2.14% — 2.13% $8,525 gg.078 ($8,391 — Core NII grew $254 million over 2015, primarily due to higher loan and secur
Slide 7: Income Statement: Noninterest Income Trends
Income Statement: Noninterest Income Trends PNC Noninterest Income Diversified Sources of Fee Income FY 2016 $ millions $6,865 $6,850 $6,947 gg a4 $5,872 billion Service Charges 2012 2013 2014 2015 2016 Other Noninterest Income Fee Income YOY ~ Refers to a comparison of full year 2016 with full year
Slide 8: Income Statement: Stable Expenses
Income Statement: Stable Expenses Well-Managed Expenses During a Time of Reinvestment and Growth $10,486 $9,488 $9,463 $9,476 $ millions 2012 2013 2014 2015 2016 MNoninterest Expense @PNc 2016 Highlights Maintained strong expense discipline while = Investing in technology and business infrastructure
Slide 9: Credit Quality: Stable Credit Quality
Credit Quality: Stable Credit Quality @®PNC Nonperforming Loans $2281 $2,266 go ig g2, 104 $2,126 4Q15 1016 2016 3Q16 4Q16 Net Charge-Offs Provision $152 $19 $156 $127 $134 . $106 * = et oe 6h ON 4ais 1016 = 2016 = 315 46 NCO / Average Loans for 4016: 0.20%
Slide 10: Outlook: Full Year 2017 Compared to Full Year 2016
Outlook: Full Year 2017 Compared to Full Year 2016 ®PNC Balance F a Sheet Loans Up mid-single digits Income Revenue Up mid-single digits Statement Noninterest expense Up low-single digits Path to positive operating leverage absent interest rate hikes | fefer to Cautionary Statement in the Appendix,
Slide 11: Outlook: First Quarter 2017 Compared to Fourth Quarter 2016
Outlook: First Quarter 2017 Compared to Fourth Quarter 2016 Balance Sheet Income Statement ~ Refer to Cautionary regulatory contingen Loans Net interest income Fee income Noninterest expense Loan loss provision in the Appendix, including economic and other assumptions. Does not take into account imp
Slide 12: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNc ide tiehtil illustration financial review. It {hould not be viewed in olaion but rather in the content of la the information made avatable by PNC in its SEC flings tatements, regarding our outlook for earnings, revenues, expences, capita
Slide 13: 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 market will grow tivity, and expanded in c in 2017, These forward. Iso de c
Slide 14: Cautionary Statement Regarding Forward-Looking Information
Appendix: Cautionary Statement Regarding Forward-Looking @®PNc Information = Results. 9 governmental agencies. B -nt in our businesses, including, where appropriate ‘wou de beeees 2 of third-party insurance, derivatives, and capital orgie eetnagieg and to meet evolving regulatory ticular, our + Busi
Slide 15: Basel III Regulatory Capital Ratios
Appendix: Basel III Regulatory Capital Ratios ®PN As a result of the staggered effective dates of the final U.S. Basel III regulatory capital rules (Basel Ill rules), as well as the fact that PNC remains in the parallel run qualification phase for the advanced approaches, PNC's regulatory risk-based
Slide 16: Non-GAAP Basel III Regulatory Capital Ratios
Appendix: Non-GAAP Basel III Regulatory Capital Ratios Tier 1 Capital Ratios @PNc 2015 Transitional Pro forma Fully Phased-In Basel II (Non Basel Ill GAAP) (estimated) (estimated) Dee.31, Sept.30, Dee.31, Sept.20, Dee. 31, [Sin mitons 2016 2016 Leste ho 2016 2016 2015, Ic stock, related r $41,987 $4
Slide 17: Non-GAAP to GAAP Reconciliation: Fee Income
Appendix: Non-GAAP to GAAP Reconciliation @®PNC Fee Income For the year ended For the three months ended $ in millions FY16 FY15 _%Change 4016 3016 _%Change| Asset management $1,521 $1,567 (3%) $399 $404 (1%) Consumer services 1,388 1,335 4% 349 348 . Corporate services 1,504 1491 1% 387 389 (1%) Re
Slide 18: Non-GAAP to GAAP Reconciliation: Tangible Book Value per Common Share
Appendix: Non-GAAP to GAAP Reconciliation Tangible Book Value per Common Share Ratio @PNc % Change 12/31/16 12/31/16 $ in miltions, except per share data Dec. 31, Sept.30, Dec. 31, vs. vs. 201 2016 2015 9/30/16 12/31/15 Book value per common share $86.10 $8657 $8184 1% 5% Tangible book value per com
Slide 19: Non-GAAP to GAAP Reconciliation: Pretax Pre-Provision Earnings
Appendix: Non-GAAP to GAAP Reconciliation Pretax Pre-Provision Earnings @PNc For the year ended For the three months ended I$ in millions FY16 Fyis %Change arg 3016 % Change] Net interest income $8,391 $8,278 1% $2,130 $2,095 2% Noninterest income 6771 6.967 (3%) 1,744 1,734 1% {Total revenue $15,16
Slide 20: Non-GAAP to GAAP Reconciliation: Return on Tangible Common Equity
Appendix: Non-GAAP to GAAP Reconciliation @®PNC Return on Tangible Common Equity For the year ended For the three months ended sin mitions Dec. 31, Dec. 31, Dec. 31, Sept. 30, 2016 2015 2016 2016 Return on average common shareholders’ equity 8.85% 9.50% 9.31% 8.74% [Average common shareholders’ equi
Slide 21: Non-GAAP to GAAP Reconciliation: Core Net Interest Income
Appendix: Non-GAAP to GAAP Reconciliation Core Net Interest Income @PNc $ in mittions Core net interest income (Non-GAAP) Purchase accounting accretion Total net interest income For the year ended For the three months ended FY16 FY15 % 278 49 $8391 $ 8.278 Change __ 4016 3016 % Change| 3% «= $ 2.066
Slide 22: Average Total Consumer Lending, Excluding Runoff Portfolios
Appendix: Average Total Consumer Lending, Excluding Runoff ®@PNC Portfolios Average Total Consumer Lending, Excluding Runoff Portfolios For the three months ended Change JAverage balances Dec. 31, Sep. 30, 12/31/16 $ in mittions 2016 2016 vs. 9/30/16 Total Consumer Lending $72,357 $72,033 $324 Less:
Slide 23: Other Noninterest Income: Net Visa Activity Components
Appendix: Other Noninterest Income: Net Visa Activity Components@ PNC Net Visa Activity For the three months ended 2016 $ in miltions Dec. 31 Sep.30 Jun.30 Mar. 31 Gains on Visa Sales $ - $ - $ 8 $ 46 $ 47 $ B $ 199 $ Derivative Fair Value Adjustments (20) (11) (51) (12) (5) (0) (0) 2 Net Visa Activ
Slide 24: Energy Related Loan Portfolio
Appendix: Energy Related Loan Portfolio Oil & Gas Loans $ billions Total Loans $ billions $211 billion, Coal Loans $0.4 billion, Outstanding Balances f 12/31/ Outstanding Balances as of 12/31/16 @PNC Oil & Gas Loans 4a16 3016 Reserves 6% 5% % of outstanding e " loans criticized bed 59% Utilization 3
PNC Financial Services Group — Q4 2016 Earnings Presentation on 6ix