PNC FINANCIAL SERVICES GROUP, INC. THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT FOURTH QUARTER 2022 (Unaudited)
THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2022
(UNAUDITED)
Consolidated Results:
Income Statement Balance Sheet Average Balance Sheet Details of Net Interest Margin Loans
Allowance for Credit Losses Nonperforming Assets Accruing Loans Past Due
Business Segment Results:
Descriptions
Period End Employees
Net Income and Revenue
Retail Banking
Corporate & Institutional Banking
Asset Management Group
Glossary of Terms
The information contained in this Financial Supplement is preliminary, unaudited and based on data available on January 18, 2023. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.
BUSINESS
PNC is one of the largest diversified financial services companies in the United States (U.S.) and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally. PNC's retail branch network is located coast-to-coast. PNC also has strategic international offices in four countries outside the U.S.
PRESENTATION OF NONINTEREST INCOME
Effective for the first quarter of 2022, PNC updated the presentation of its noninterest income categorization to be based on product and service type, and accordingly, has changed the basis of presentation of its noninterest income revenue streams to: (i) Asset management and brokerage, (ii) Capital markets related, (iii) Card and cash management, (iv) Lending and deposit services, (v) Residential and commercial mortgage and (vi) Other noninterest income. For a description of each updated noninterest income revenue stream, see our third quarter 2022 Form 10-Q. Additionally, in the fourth quarter of 2022, PNC updated the name of the noninterest income line item "capital markets related" to "capital markets and advisory." This update did not impact the components of the category. All periods presented herein reflect these changes.
ACQUISITION OF BBVA USA BANCSHARES, INC.
On June 1, 2021, PNC acquired BBVA USA Bancshares Inc. (BBVA), a U.S. financial holding company conducting its business operations primarily through its U.S. banking subsidiary, BBVA USA. PNC paid $11.5 billion in cash as consideration for the acquisition.
On October 8, 2021, BBVA USA merged into PNC Bank. On October 12, 2021, PNC converted approximately 2.6 million
customers, 9,000 employees and over 600 branches across seven states. Our results of operations and balance sheets for all periods presented in this Financial Supplement reflect the benefit of BBVA's acquired businesses for the period since the acquisition closed on June 1, 2021.
THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Fourth Quarter 2022 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table | Description | Page |
1 | ||
2 | ||
3 | Average Consolidated Balance Sheet | 3 |
4 | Details of Net Interest Margin | 4 |
5 | Details of Loans | 5 |
6 | Change in Allowance for Loan and Lease Losses | 6 |
7 | Components of the Provision for (Recapture of) Credit Losses | 7 |
8 | Allowance for Credit Losses by Loan Class | 7 |
9 | Nonperforming Assets by Type | 8 |
10 | Change in Nonperforming Assets | 8 |
11 | Accruing Loans Past Due 30 to 59 Days | 9 |
12 | Accruing Loans Past Due 60 to 89 Days | 10 |
13 | Accruing Loans Past Due 90 Days or More | 11 |
14 | Period End Employees | 12 |
15 | Summary of Business Segment Net Income and Revenue | 13 |
16 | Retail Banking | 14-15 |
17 | Corporate & Institutional Banking | 16 |
18 | Asset Management Group | 17 |
THE PNC FINANCIAL SERVICES GROUP, INC.
Table 1: Consolidated Income Statement (Unaudited)
Three months ended | ||||||||||||||
In millions, except per share data | December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Interest Income | ||||||||||||||
Loans | $ | 3,860 | $ | 3,138 | $ | 2,504 | $ | 2,293 | $ | 2,414 | ||||
Investment securities | 836 | 715 | 631 | 544 | 484 | |||||||||
Other | 413 | 279 | 146 | 77 | 77 | |||||||||
Total interest income | 5,109 | 4,132 | 3,281 | 2,914 | 2,975 | |||||||||
Interest Expense | ||||||||||||||
Deposits | 812 | 340 | 88 | 27 | 27 | |||||||||
Borrowed funds | 613 | 317 | 142 | 83 | 86 | |||||||||
Total interest expense | 1,425 | 657 | 230 | 110 | 113 | |||||||||
Net interest income | 3,684 | 3,475 | 3,051 | 2,804 | 2,862 | |||||||||
Noninterest Income | ||||||||||||||
Asset management and brokerage | 345 | 357 | 365 | 377 | 385 | |||||||||
Capital markets and advisory | 336 | 299 | 409 | 252 | 460 | |||||||||
Card and cash management | 671 | 671 | 671 | 620 | 646 | |||||||||
Lending and deposit services | 296 | 287 | 282 | 269 | 273 | |||||||||
Residential and commercial mortgage | 184 | 143 | 161 | 159 | 209 | |||||||||
Other (a) | 247 | 317 | 177 | 211 | 292 | |||||||||
Total noninterest income | 2,079 | 2,074 | 2,065 | 1,888 | 2,265 | |||||||||
Total revenue | 5,763 | 5,549 | 5,116 | 4,692 | 5,127 | |||||||||
Provision For (Recapture of) Credit Losses | 408 | 241 | 36 | (208) | (327) | |||||||||
Noninterest Expense | ||||||||||||||
Personnel | 1,943 | 1,805 | 1,779 | 1,717 | 2,038 | |||||||||
Occupancy | 247 | 241 | 246 | 258 | 260 | |||||||||
Equipment | 369 | 344 | 351 | 331 | 437 | |||||||||
Marketing | 106 | 93 | 95 | 61 | 97 | |||||||||
Other | 809 | 797 | 773 | 805 | 959 | |||||||||
Total noninterest expense | 3,474 | 3,280 | 3,244 | 3,172 | 3,791 | |||||||||
Income before income taxes and noncontrolling | 1,881 | 2,028 | 1,836 | 1,728 | 1,663 | |||||||||
interests | ||||||||||||||
Income taxes | 333 | 388 | 340 | 299 | 357 | |||||||||
Net income | 1,548 | 1,640 | 1,496 | 1,429 | 1,306 | |||||||||
Less: Net income attributable to noncontrolling | ||||||||||||||
interests | 20 | 16 | 15 | 21 | 13 | |||||||||
Preferred stock dividends (b) | 120 | 65 | 71 | 45 | 71 | |||||||||
Preferred stock discount accretion and | 1 | 1 | 1 | 2 | 2 | |||||||||
redemptions | ||||||||||||||
Net income attributable to common shareholders | $ | 1,407 | $ | 1,558 | $ | 1,409 | $ | 1,361 | $ | 1,220 | ||||
Earnings Per Common Share | ||||||||||||||
Basic | $ | 3.47 | $ | 3.78 | $ | 3.39 | $ | 3.23 | $ | 2.87 | ||||
Diluted | $ | 3.47 | $ | 3.78 | $ | 3.39 | $ | 3.23 | $ | 2.86 | ||||
Average Common Shares Outstanding | ||||||||||||||
Basic | 404 | 410 | 414 | 420 | 424 | |||||||||
Diluted | 404 | 410 | 414 | 420 | 424 | |||||||||
Efficiency | 60 % | 59 % | 63 % | 68 % | 74 % | |||||||||
Noninterest income to total revenue | 36 % | 37 % | 40 % | 40 % | 44 % | |||||||||
Effective tax rate from continuing operations (c) | 17.7 % | 19.1 % | 18.5 % | 17.3 % | 21.5 % |
Page 1 | ||
Year ended | ||
December 31 | December 31 | |
2022 | 2021 |
- 11,795 $ 9,007
2,726 1,834
915 293
15,436 11,134
1,267 126
1,155 361
2,422 487
13,014 10,647
1,444 1,438
1,296 1,577
2,633 2,398
1,134 1,102
- 850
- 1,199
8,106 8,564
21,120 19,211
477 (779)
7,244 7,141
-
940
1,395 1,411
- 319
3,184 3,191
13,170 13,002
7,473 | 6,988 | |||
1,360 | 1,263 | |||
6,113 | 5,725 | |||
72 | 51 | |||
301 | 233 | |||
5 | 5 | |||
$ | 5,735 | $ | 5,436 | |
$ | 13.86 | $ | 12.71 | |
$ | 13.85 | $ | 12.70 | |
412 | 426 | |||
412 | 426 | |||
62 % | 68 % | |||
38 % | 45 % | |||
18.2 % | 18.1 % |
- Includes net gains (losses) on sales of securities of $(3) million, less than $1 million, less than $(1) million, $(4) million and $14 million for the quarters ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively, and $(7) million and $64 million for the twelve months ended December 31, 2022 and December 31, 2021, respectively.
- Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually.
- The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.
THE PNC FINANCIAL SERVICES GROUP, INC. | Page 2 | |||||||||||||
Table 2: Consolidated Balance Sheet (Unaudited) | ||||||||||||||
In millions, except par value | December 31 | September 30 | June 30 | March 31 | December 31 | |||||||||
2022 | 2022 | 2022 | 2022 | 2021 | ||||||||||
Assets | ||||||||||||||
Cash and due from banks | $ | 7,043 | $ | 6,548 | $ | 8,582 | $ | 7,572 | $ | 8,004 | ||||
Interest-earning deposits with banks (a) | 27,320 | 40,278 | 28,404 | 48,776 | 74,250 | |||||||||
Loans held for sale (b) | 1,010 | 1,126 | 1,191 | 1,506 | 2,231 | |||||||||
Investment securities - available for sale | 44,159 | 45,798 | 52,984 | 112,313 | 131,536 | |||||||||
Investment securities - held to maturity | 95,175 | 90,653 | 79,748 | 20,098 | 1,426 | |||||||||
Loans (b) | 326,025 | 315,400 | 310,800 | 294,457 | 288,372 | |||||||||
Allowance for loan and lease losses | (4,741) | (4,581) | (4,462) | (4,558) | (4,868) | |||||||||
Net loans | 321,284 | 310,819 | 306,338 | 289,899 | 283,504 | |||||||||
Equity investments | 8,437 | 8,130 | 8,441 | 7,798 | 8,180 | |||||||||
Mortgage servicing rights | 3,423 | 3,206 | 2,608 | 2,208 | 1,818 | |||||||||
Goodwill | 10,987 | 10,987 | 10,916 | 10,916 | 10,916 | |||||||||
Other (b) | 38,425 | 41,932 | 41,574 | 40,160 | 35,326 | |||||||||
Total assets | $ | 557,263 | $ | 559,477 | $ | 540,786 | $ | 541,246 | $ | 557,191 | ||||
Liabilities | ||||||||||||||
Deposits | ||||||||||||||
Noninterest-bearing | $ | 124,486 | $ | 138,423 | $ | 146,438 | $ | 150,798 | $ | 155,175 | ||||
Interest-bearing | 311,796 | 299,771 | 294,373 | 299,399 | 302,103 | |||||||||
Total deposits | 436,282 | 438,194 | 440,811 | 450,197 | 457,278 | |||||||||
Borrowed funds | ||||||||||||||
Federal Home Loan Bank borrowings | 32,075 | 30,075 | 10,000 | |||||||||||
Senior debt | 16,657 | 13,357 | 14,358 | 16,206 | 20,661 | |||||||||
Subordinated debt | 6,307 | 7,286 | 7,487 | 6,766 | 6,996 | |||||||||
Other (b) | 3,674 | 3,915 | 4,139 | 3,599 | 3,127 | |||||||||
Total borrowed funds | 58,713 | 54,633 | 35,984 | 26,571 | 30,784 | |||||||||
Allowance for unfunded lending related commitments | 694 | 682 | 681 | 639 | 662 | |||||||||
Accrued expenses and other liabilities | 15,762 | 19,245 | 15,622 | 14,623 | 12,741 | |||||||||
Total liabilities | 511,451 | 512,754 | 493,098 | 492,030 | 501,465 | |||||||||
Equity | ||||||||||||||
Preferred stock (c) | ||||||||||||||
Common stock - $5 par value | ||||||||||||||
Authorized 800 shares, issued 543 shares | 2,714 | 2,714 | 2,714 | 2,713 | 2,713 | |||||||||
Capital surplus | 18,376 | 19,810 | 18,531 | 17,487 | 17,457 | |||||||||
Retained earnings | 53,572 | 52,777 | 51,841 | 51,058 | 50,228 | |||||||||
Accumulated other comprehensive income (loss) | (10,172) | (10,486) | (8,358) | (5,731) | 409 | |||||||||
Common stock held in treasury at cost: 142, 139, 132, 128, and 123 | (18,716) | (18,127) | (17,076) | (16,346) | (15,112) | |||||||||
shares | ||||||||||||||
Total shareholders' equity | 45,774 | 46,688 | 47,652 | 49,181 | 55,695 | |||||||||
Noncontrolling interests | 38 | 35 | 36 | 35 | 31 | |||||||||
Total equity | 45,812 | 46,723 | 47,688 | 49,216 | 55,726 | |||||||||
Total liabilities and equity | $ | 557,263 | $ | 559,477 | $ | 540,786 | $ | 541,246 | $ | 557,191 | ||||
- Amounts include balances held with the Federal Reserve Bank of $26.9 billion, $39.8 billion, $28.0 billion, $48.4 billion and $73.8 billion as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively.
- Amounts include assets and liabilities for which PNC has elected the fair value option. Our 2022 Form 10-Qs included, and our 2022 Form 10-K will include, additional information regarding these items.
- Par value less than $0.5 million at each date.
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Disclaimer
The PNC Financial Services Group Inc. published this content on 17 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2023 14:27:03 UTC.
