PITTSBURGH,
April 12, 2019 /PRNewswire/ -- The
PNC Financial Services Group, Inc. (NYSE: PNC) today
reported:
|
For the
quarter
|
|
1Q19
|
|
4Q18
|
|
1Q18
|
|
Net
income $ millions
|
$1,271
|
|
$1,351
|
|
$1,239
|
|
Diluted earnings per
common share
|
$2.61
|
|
$2.75
|
|
$2.43
|
|
|
|
|
|
|
"PNC delivered a very good first quarter. Year over
year, we grew net income, and compared with fourth quarter 2018,
net interest income was stable despite two fewer days, our net
interest margin expanded and we kept expenses flat. While the
provision increased reflecting our solid loan growth, overall
credit quality remained strong. Additionally, we grew capital,
providing us with flexibility into the future. As 2019 unfolds, we
remain confident about the strength of the economy and the
opportunities to drive growth, efficiency and value over the long
term as we continue to focus on doing what is best for our
shareholders, customers, employees and communities.
As a Main Street bank, we believe our prosperity is proportional to
that of the constituencies we serve, and are pleased to note that
during the quarter, PNC learned that we received an "Outstanding"
Community Reinvestment Act rating from the OCC — the highest
possible rating and one that we are proud to have earned for every
exam period since the inception of CRA in 1977. And we recently
announced that we are extending our commitment to Grow Up
Great, our signature program focused on early childhood education,
now a $500 million initiative benefiting 40
markets."
Bill Demchak, PNC
Chairman, President and Chief Executive Officer
|
Income Statement Highlights
First quarter 2019 compared with fourth quarter
2018
- Net income was $1.3
billion, a decrease of $80
million, or 6 percent.
- Total revenue of $4.3
billion declined $54 million,
or 1 percent.
- Net interest income of $2.5
billion was slightly lower by $6
million as higher loan and securities yields and loan
balances were offset by higher funding costs and balances and the
impact of two fewer days in the first quarter.
-
- Net interest margin increased 2 basis points to 2.98
percent.
- Noninterest income of $1.8
billion decreased $48 million,
or 3 percent.
-
- Fee income declined $31
million, or 2 percent, to $1.5
billion due to seasonally lower revenue.
- Other noninterest income of $308
million decreased $17 million,
or 5 percent, and included negative Visa Class B derivative fair
value adjustments of $31 million in
the first quarter compared with positive adjustments of
$42 million in the fourth
quarter.
- Noninterest expense was essentially unchanged at
$2.6 billion.
- Provision for credit losses increased $41 million to $189
million reflecting loan growth,
including new loans and increased utilization, and reserve
increases attributable to certain commercial credits. The
commercial loan provision increased $31
million and the consumer loan provision increased
$10 million.
- The effective tax rate was 16.3 percent for both first
quarter 2019 and fourth quarter 2018.
Balance Sheet Highlights
- Average loans increased $2.6
billion, or 1 percent, to $228.5
billion in the first quarter compared with the fourth
quarter.
-
- Average commercial lending balances grew $2.5 billion due to loan growth in PNC's
corporate banking business of $3.5
billion, as well as growth in business credit, partially
offset by a decrease in average loans in the real estate business
driven by seasonally lower multifamily agency warehouse lending
balances of $1.5 billion.
- Average consumer lending balances increased $.1 billion due to growth in residential
mortgage, auto, credit card and unsecured installment loans
partially offset by lower home equity and education
loans.
- Overall credit quality remained strong.
-
- Nonperforming assets of $1.8
billion at March 31, 2019
decreased $23 million, or 1 percent,
compared with December 31,
2018.
- Net charge-offs increased to $136
million for the first quarter compared with $107 million for the fourth quarter driven by
consumer loans.
- Average deposits increased $.7
billion to $267.2 billion in
the first quarter compared with the fourth quarter reflecting
growth in consumer deposits substantially offset by seasonal
declines in commercial deposits.
- Average investment securities increased $.2 billion to $82.3
billion in the first quarter compared with the fourth
quarter.
- Average balances held with the Federal Reserve of
$14.7 billion decreased $1.7 billion compared with the fourth
quarter.
- PNC returned $1.2 billion
of capital to shareholders in the first quarter through repurchases
of 5.9 million common shares for $725
million and dividends on common shares of $438 million.
- PNC maintained a strong capital position.
-
- The Basel III common equity Tier 1 capital ratio was an
estimated 9.8 percent at March 31,
2019 and 9.6 percent at December 31,
2018.
Earnings Summary
|
|
|
|
|
|
|
In millions, except per share
data
|
|
1Q19
|
|
4Q18
|
|
1Q18
|
Net income
|
|
$
|
1,271
|
|
|
$
|
1,351
|
|
|
$
|
1,239
|
|
Net income
attributable to diluted common shares
|
|
$
|
1,189
|
|
|
$
|
1,274
|
|
|
$
|
1,158
|
|
Diluted earnings per
common share
|
|
$
|
2.61
|
|
|
$
|
2.75
|
|
|
$
|
2.43
|
|
Average diluted
common shares outstanding
|
|
456
|
|
|
463
|
|
|
476
|
|
Return on average
assets
|
|
1.34
|
%
|
|
1.40
|
%
|
|
1.34
|
%
|
Return on average
common equity
|
|
11.13
|
%
|
|
11.83
|
%
|
|
11.04
|
%
|
Book value per common
share
|
Quarter end
|
$
|
98.47
|
|
|
$
|
95.72
|
|
|
$
|
91.39
|
|
Tangible book value
per common share (non-GAAP)
|
Quarter end
|
$
|
78.07
|
|
|
$
|
75.42
|
|
|
$
|
71.58
|
|
Cash dividends
declared per common share
|
|
$
|
.95
|
|
|
$
|
.95
|
|
|
$
|
.75
|
|
The Consolidated Financial Highlights accompanying this
news release include additional information regarding
reconciliations of non-GAAP financial measures to reported amounts.
Fee income, a non-GAAP financial measure, refers to noninterest
income in the following categories: asset management, consumer
services, corporate services, residential mortgage and service
charges on deposits. Information in this news release, including
the financial tables, is unaudited.
CONSOLIDATED REVENUE REVIEW
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
4Q18
|
1Q18
|
Net interest
income
|
$
|
2,475
|
|
|
$
|
2,481
|
|
|
$
|
2,361
|
|
—
|
|
5
|
%
|
Noninterest
income
|
1,811
|
|
|
1,859
|
|
|
1,750
|
|
(3)
|
%
|
3
|
%
|
Total
revenue
|
$
|
4,286
|
|
|
$
|
4,340
|
|
|
$
|
4,111
|
|
(1)
|
%
|
4
|
%
|
Total revenue for the first quarter of 2019 decreased
$54 million compared with the fourth
quarter and increased $175 million
compared with the first quarter of 2018. Net interest income and
noninterest income declined in the fourth quarter comparison and
increased compared with first quarter 2018.
Net interest income for the first quarter of 2019
decreased $6 million compared with
the fourth quarter and increased $114
million compared with the first quarter of 2018. In both
comparisons, higher loan and securities yields and balances were
partially offset by higher deposit and borrowing costs and
balances. For the first quarter of 2019, this increase was more
than offset by the impact of two fewer days compared with the
fourth quarter. The net interest margin increased to 2.98 percent
for the first quarter of 2019 compared with 2.96 percent for the
fourth quarter of 2018 and 2.91 percent for the first quarter of
2018.
Noninterest Income
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
4Q18
|
1Q18
|
Asset
management
|
$
|
437
|
|
|
$
|
428
|
|
|
$
|
455
|
|
2
|
%
|
(4)
|
%
|
Consumer
services
|
371
|
|
|
387
|
|
|
357
|
|
(4)
|
%
|
4
|
%
|
Corporate
services
|
462
|
|
|
468
|
|
|
429
|
|
(1)
|
%
|
8
|
%
|
Residential
mortgage
|
65
|
|
|
59
|
|
|
97
|
|
10
|
%
|
(33)
|
%
|
Service charges on
deposits
|
168
|
|
|
192
|
|
|
167
|
|
(13)
|
%
|
1
|
%
|
Other
|
308
|
|
|
325
|
|
|
245
|
|
(5)
|
%
|
26
|
%
|
|
$
|
1,811
|
|
|
$
|
1,859
|
|
|
$
|
1,750
|
|
(3)
|
%
|
3
|
%
|
Noninterest income for the first quarter of 2019 declined
$48 million compared with the fourth
quarter from seasonally lower fee income and lower other
noninterest income. Asset management revenue, including earnings
from PNC's equity investment in BlackRock, increased $9 million reflecting higher average equity
markets. Consumer services, corporate services and service charges
on deposits decreased due to seasonally lower transaction volumes
and activity. Residential mortgage revenue increased $6 million as a result of a reduction in the
negative adjustment for residential mortgage servicing rights
valuation, net of economic hedge, and higher servicing fee income
partially offset by lower loan sales revenue. Other noninterest
income decreased $17 million
reflecting negative derivative fair value adjustments related to
Visa Class B common shares of $31
million compared with positive adjustments of $42 million in the fourth quarter partially
offset by asset gains and higher revenue from private equity
investments.
Noninterest income for the first quarter of 2019 increased
$61 million compared with the first
quarter of 2018. Asset management revenue, including earnings from
PNC's equity investment in BlackRock, declined $18 million. Consumer service fees increased
$14 million driven by higher debit
card, brokerage and credit card activity. Corporate service fees
grew $33 million reflecting higher
merger and acquisition advisory fees and treasury management
product revenue. Residential mortgage revenue decreased
$32 million as a result of a negative
adjustment for residential mortgage servicing rights valuation, net
of economic hedge, compared with a benefit in first quarter 2018
and lower loan sales revenue. Other noninterest income increased
$63 million and included higher gains
on asset sales and higher revenue from private equity investments
partially offset by the negative Visa Class B derivative fair value
adjustments.
CONSOLIDATED EXPENSE REVIEW
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In millions
|
1Q19
|
|
4Q18
|
|
1Q18
|
4Q18
|
1Q18
|
Personnel
|
$
|
1,414
|
|
|
$
|
1,348
|
|
|
$
|
1,354
|
|
5
|
%
|
4
|
%
|
Occupancy
|
215
|
|
|
202
|
|
|
218
|
|
6
|
%
|
(1)
|
%
|
Equipment
|
273
|
|
|
285
|
|
|
273
|
|
(4)
|
%
|
—
|
|
Marketing
|
65
|
|
|
84
|
|
|
55
|
|
(23)
|
%
|
18
|
%
|
Other
|
611
|
|
|
658
|
|
|
627
|
|
(7)
|
%
|
(3)
|
%
|
|
$
|
2,578
|
|
|
$
|
2,577
|
|
|
$
|
2,527
|
|
—
|
|
2
|
%
|
Noninterest expense in total for the first quarter of 2019
was essentially unchanged from the fourth quarter. Seasonally
higher personnel expense related to incentive compensation and
occupancy expense were offset by seasonally lower marketing
expense, lower equipment costs and lower professional services and
other expense as PNC continued to focus on expense
management.
Noninterest expense for the first quarter of 2019
increased $51 million compared with
the first quarter of 2018. Investments in support of business
growth were reflected in higher personnel expense and higher
marketing expense, which included costs for PNC's national retail
digital strategy. These increases were offset in part by a decrease
in FDIC deposit insurance as a result of the elimination of the
surcharge assessment.
The effective tax rate was 16.3 percent for both the first
quarter of 2019 and fourth quarter of 2018 and 17.0 percent for the
first quarter of 2018.
CONSOLIDATED BALANCE SHEET REVIEW
Average total assets were $385.9
billion in the first quarter of 2019, an increase of 1
percent compared with $383.1 billion
in the fourth quarter of 2018 driven by loan growth. Average total
assets increased 3 percent compared with $376.3 billion in the first quarter of 2018 as
higher average investment securities, loans, and short-term
investments were partially offset by lower interest-earning
deposits with banks. Total assets were $392.8 billion at March
31, 2019, $382.3 billion at
December 31, 2018 and $379.2 billion at March
31, 2018.
Loans
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In billions
|
1Q19
|
|
4Q18
|
|
1Q18
|
4Q18
|
1Q18
|
Average
|
|
|
|
|
|
|
|
Commercial
lending
|
$
|
154.7
|
|
|
$
|
152.2
|
|
|
$
|
148.2
|
|
2
|
%
|
4
|
%
|
Consumer
lending
|
73.8
|
|
|
73.7
|
|
|
72.9
|
|
—
|
|
1
|
%
|
Average
loans
|
$
|
228.5
|
|
|
$
|
225.9
|
|
|
$
|
221.1
|
|
1
|
%
|
3
|
%
|
|
|
|
|
|
|
|
|
Quarter end
|
|
|
|
|
|
|
|
Commercial
lending
|
$
|
158.4
|
|
|
$
|
152.3
|
|
|
$
|
148.9
|
|
4
|
%
|
6
|
%
|
Consumer
lending
|
73.9
|
|
|
74.0
|
|
|
72.7
|
|
—
|
|
2
|
%
|
Total
loans
|
$
|
232.3
|
|
|
$
|
226.3
|
|
|
$
|
221.6
|
|
3
|
%
|
5
|
%
|
Average loans for the first quarter of 2019 grew
$2.6 billion compared with the fourth
quarter. Average commercial lending balances increased $2.5 billion due to loan growth in PNC's
corporate banking business of $3.5
billion, as well as growth in business credit, partially
offset by a decrease in average loans in the real estate business
driven by seasonally lower multifamily agency warehouse lending
balances of $1.5 billion. Average
consumer lending balances increased $.1
billion due to growth in residential mortgage, auto, credit
card and unsecured installment loans partially offset by lower home
equity and education loans. Total loans at March 31, 2019 grew $6.0
billion compared with December 31,
2018 with an increase in commercial lending balances of
$6.1 billion and a decrease in
consumer lending balances of $.1
billion.
First quarter 2019 average and period end loans increased
$7.4 billion and $10.7 billion, respectively, compared with first
quarter 2018 driven by growth in both commercial and consumer
lending balances.
Investment Securities
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In billions
|
1Q19
|
|
4Q18
|
|
1Q18
|
4Q18
|
1Q18
|
Average
|
$
|
82.3
|
|
|
$
|
82.1
|
|
|
$
|
74.6
|
|
—
|
|
10
|
%
|
Quarter
end
|
$
|
83.9
|
|
|
$
|
82.7
|
|
|
$
|
74.6
|
|
1
|
%
|
12
|
%
|
Average investment securities for the first quarter of
2019 increased $.2 billion and period
end balances increased $1.2 billion
compared with the fourth quarter due to net purchase activity.
First quarter 2019 average and period end investment securities
increased $7.7 billion and
$9.3 billion, respectively, compared
with the first quarter of 2018. Net unrealized gains on available
for sale securities were $.5 billion
at March 31, 2019 compared with net
unrealized losses of $.1 billion at
December 31, 2018 and $.2 billion at March 31,
2018.
Average balances held with the Federal Reserve Bank
decreased to $14.7 billion in the
first quarter of 2019 from $16.4
billion in the fourth quarter and $25.4 billion in the first quarter of 2018 as
investment of liquidity continued. Balances held with the Federal
Reserve were $15.0 billion at
March 31, 2019, $10.5 billion at December
31, 2018, and $28.6 billion at
March 31, 2018. The lower balance at
year end 2018 reflected short-term investments in resale agreements
included in other assets on the balance sheet.
Deposits
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In billions
|
1Q19
|
|
4Q18
|
|
1Q18
|
4Q18
|
1Q18
|
Average
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
71.4
|
|
|
$
|
75.3
|
|
|
$
|
77.2
|
|
(5)
|
%
|
(8)
|
%
|
Interest-bearing
|
195.8
|
|
|
191.2
|
|
|
183.4
|
|
2
|
%
|
7
|
%
|
Average
deposits
|
$
|
267.2
|
|
|
$
|
266.5
|
|
|
$
|
260.6
|
|
—
|
|
3
|
%
|
|
|
|
|
|
|
|
|
Quarter end
|
|
|
|
|
|
|
|
Noninterest-bearing
|
$
|
71.6
|
|
|
$
|
74.0
|
|
|
$
|
78.3
|
|
(3)
|
%
|
(9)
|
%
|
Interest-bearing
|
199.6
|
|
|
193.8
|
|
|
186.4
|
|
3
|
%
|
7
|
%
|
Total
deposits
|
$
|
271.2
|
|
|
$
|
267.8
|
|
|
$
|
264.7
|
|
1
|
%
|
2
|
%
|
Average deposits for the first quarter of 2019 increased
$.7 billion compared with the fourth
quarter and deposits at March 31,
2019 increased $3.4 billion
over December 31, 2018 due to growth
in consumer deposits partially offset by seasonal declines in
commercial deposits. First quarter 2019 average and period end
deposits increased $6.6 billion and
$6.5 billion, respectively, compared
with first quarter 2018. Higher interest-bearing deposits reflected
consumer deposit growth, including from the national retail digital
strategy, as well as a shift of commercial deposits from
noninterest-bearing as deposit rates have risen.
Borrowed Funds
|
|
|
|
|
|
Change
|
Change
|
|
|
|
|
|
|
1Q19 vs
|
1Q19 vs
|
In billions
|
1Q19
|
|
4Q18
|
|
1Q18
|
4Q18
|
1Q18
|
Average
|
$
|
59.8
|
|
|
$
|
58.8
|
|
|
$
|
59.7
|
|
2
|
%
|
—
|
|
Quarter
end
|
$
|
59.9
|
|
|
$
|
57.5
|
|
|
$
|
58.1
|
|
4
|
%
|
3
|
%
|
Average borrowed funds for the first quarter of 2019
increased $1.0 billion compared with
the fourth quarter and borrowed funds at March 31, 2019 increased $2.4 billion compared with December 31, 2018 reflecting higher federal funds
purchased for liquidity management. First quarter 2019 average and
period end borrowed funds increased $.1
billion and $1.8 billion,
respectively, compared with first quarter 2018 as higher federal
funds purchased, Federal Home Loan Bank borrowings and subordinated
debt were largely offset by lower bank notes and senior
debt.
Capital
|
|
|
|
|
|
|
|
3/31/2019
*
|
|
|
12/31/2018
|
|
3/31/2018
|
Common shareholders'
equity In
billions
|
$
|
44.5
|
|
|
|
$
|
43.7
|
|
|
$
|
43.0
|
|
Basel III common
equity Tier 1 capital ratio
|
9.8
|
%
|
|
|
9.6
|
%
|
|
9.6
|
%
|
* Ratio estimated
|
|
|
|
|
|
|
PNC maintained a strong capital position. Common
shareholders' equity at March 31,
2019 increased $.8 billion
compared with December 31, 2018 due
to first quarter net income partially offset by share repurchases
and dividends, and to an improvement in accumulated other
comprehensive loss related to net unrealized securities
gains.
PNC returned $1.2 billion of
capital to shareholders in the first quarter of 2019 through
repurchases of 5.9 million common shares for $725 million and dividends on common shares of
$438 million. PNC has purchased a
total of 15.3 million shares for $2.0
billion under current share repurchase programs of up to
$2.9 billion for the four-quarter
period ending in the second quarter of 2019. These programs include
repurchases of up to $.3 billion
related to stock issuances under employee benefit plans.
On April 4, 2019, the PNC
board of directors declared a quarterly cash dividend on common
stock of 95 cents per share effective
with the May 5, 2019 dividend payment
date.
The Basel III common equity Tier 1 capital ratio was
calculated based on the standardized approach for the
risk-weighting of assets. See Capital Ratios in the Consolidated
Financial Highlights.
CREDIT QUALITY REVIEW
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Quality
|
|
|
|
|
|
Change
|
Change
|
|
At or for the quarter
ended
|
3/31/19 vs
|
3/31/19 vs
|
In millions
|
3/31/2019
|
|
|
12/31/2018
|
|
|
3/31/2018
|
|
12/31/18
|
3/31/18
|
Nonperforming
loans
|
$
|
1,653
|
|
|
$
|
1,694
|
|
|
$
|
1,842
|
|
(2)
|
%
|
(10)
|
%
|
Nonperforming
assets
|
$
|
1,785
|
|
|
$
|
1,808
|
|
|
$
|
2,004
|
|
(1)
|
%
|
(11)
|
%
|
Accruing loans past
due 90 days
or more
|
$
|
590
|
|
|
$
|
629
|
|
|
$
|
628
|
|
(6)
|
%
|
(6)
|
%
|
Net
charge-offs
|
$
|
136
|
|
|
$
|
107
|
|
|
$
|
113
|
|
27
|
%
|
20
|
%
|
Provision for credit
losses
|
$
|
189
|
|
|
$
|
148
|
|
|
$
|
92
|
|
28
|
%
|
105
|
%
|
Allowance for loan
and lease losses
|
$
|
2,692
|
|
|
$
|
2,629
|
|
|
$
|
2,604
|
|
2
|
%
|
3
|
%
|
Overall credit quality for the first quarter of 2019
remained strong. Provision for credit losses for the first quarter
increased $41 million compared with
the fourth quarter reflecting loan
growth, including new loans and increased utilization, and reserve
increases attributable to certain commercial credits. The
commercial loan provision increased $31
million and the consumer loan provision increased
$10 million.
Nonperforming assets at March 31,
2019 declined $23 million
compared with December 31, 2018
primarily due to lower nonperforming home equity and commercial
real estate loans partially offset by higher nonperforming
commercial loans. Nonperforming assets decreased $219 million compared with March 31, 2018 as a result of lower nonperforming
commercial, commercial real estate and consumer loans.
Nonperforming assets to total assets were .45 percent at
March 31, 2019, .47 percent at
December 31, 2018 and .53 percent at
March 31, 2018.
Overall delinquencies at March 31,
2019 declined $49 million, or
3 percent, compared with December 31,
2018. Accruing loans 30 to 59 days past due increased
$49 million primarily due to higher
commercial real estate and equipment lease financing delinquencies.
Accruing loans past due 60 to 89 days decreased $59 million and accruing loans past due 90 days
or more decreased $39
million.
Net charge-offs for the first quarter of 2019 increased
$29 million compared with the fourth
quarter driven by higher consumer loan net charge-offs of
$24 million due to lower home equity
loan recoveries and higher credit card net charge-offs. Compared
with first quarter 2018, net charge-offs increased $23 million attributable to higher auto and
credit card net charge-offs. Net charge-offs for the first quarter
of 2019 were .24 percent of average loans on an annualized basis
compared with .19 percent for the fourth quarter of 2018 and .21
percent for the first quarter of 2018.
The allowance for loan and lease losses to total loans was
1.16 percent at both March 31, 2019
and December 31, 2018 and 1.18
percent at March 31, 2018. The
allowance to nonperforming loans increased to 163 percent at
March 31, 2019 compared with 155
percent at December 31, 2018 and 141
percent at March 31, 2018.
BUSINESS SEGMENT RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
Business Segment Income
|
|
|
|
|
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
Retail
Banking
|
$
|
264
|
|
|
$
|
313
|
|
|
$
|
249
|
|
Corporate &
Institutional Banking
|
552
|
|
|
651
|
|
|
563
|
|
Asset Management
Group
|
45
|
|
|
42
|
|
|
62
|
|
Other, including
BlackRock
|
410
|
|
|
345
|
|
|
365
|
|
Net income
|
$
|
1,271
|
|
|
$
|
1,351
|
|
|
$
|
1,239
|
|
See accompanying notes in Consolidated Financial
Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Banking
|
|
|
|
|
|
|
Change
|
|
|
Change
|
|
|
|
|
|
|
|
|
1Q19 vs
|
|
|
1Q19 vs
|
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
|
4Q18
|
|
|
1Q18
|
|
Net interest
income
|
$
|
1,349
|
|
|
$
|
1,319
|
|
|
$
|
1,218
|
|
|
$
|
30
|
|
|
$
|
131
|
|
Noninterest
income
|
$
|
595
|
|
|
$
|
696
|
|
|
$
|
635
|
|
|
$
|
(101)
|
|
|
$
|
(40)
|
|
Provision for credit
losses
|
$
|
128
|
|
|
$
|
119
|
|
|
$
|
69
|
|
|
$
|
9
|
|
|
$
|
59
|
|
Noninterest
expense
|
$
|
1,468
|
|
|
$
|
1,487
|
|
|
$
|
1,456
|
|
|
$
|
(19)
|
|
|
$
|
12
|
|
Earnings
|
$
|
264
|
|
|
$
|
313
|
|
|
$
|
249
|
|
|
$
|
(49)
|
|
|
$
|
15
|
|
|
|
|
|
|
|
|
|
|
|
In billions
|
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
75.2
|
|
|
$
|
74.8
|
|
|
$
|
73.5
|
|
|
$
|
.4
|
|
|
$
|
1.7
|
|
Average
deposits
|
$
|
165.1
|
|
|
$
|
161.8
|
|
|
$
|
160.0
|
|
|
$
|
3.3
|
|
|
$
|
5.1
|
|
Retail Banking earnings for the first quarter of 2019
decreased compared with the fourth quarter of 2018 and increased
compared with the first quarter of 2018. Noninterest income
declined compared with the fourth quarter due to seasonally lower
service charges on deposits and consumer service fees, including
merchant services and debit card fees, and negative derivative fair
value adjustments related to Visa Class B common shares compared
with positive adjustments in the fourth quarter. Noninterest income
decreased compared with the first quarter of 2018 due to lower
residential mortgage revenue attributable to a negative adjustment
for residential mortgage servicing rights valuation, net of
economic hedge, compared with a benefit in first quarter 2018, and
lower loan sales revenue, as well as the negative Visa derivative
fair value adjustments. These decreases were partially offset by
growth in consumer services, including higher debit and credit card
and brokerage fees. Provision for credit losses increased compared
with the fourth quarter as a result of the credit card portfolio
and increased compared with first quarter 2018 as loan balances in
the credit card and auto portfolios increased. Noninterest expense
declined compared with the fourth quarter primarily due to lower
marketing and equipment expense and increased compared with first
quarter 2018 due to higher marketing costs, including expense
related to the national retail digital strategy.
- Average loans increased 1 percent and 2 percent compared
with the fourth and first quarters of 2018, respectively, due to
growth in residential mortgage, auto, credit card and unsecured
installment loans partially offset by lower home equity and
education loans.
- Average deposits grew 2 percent compared with the fourth
quarter and 3 percent compared with first quarter 2018 as overall
deposit and customer growth drove higher savings, demand and
certificates of deposit partially offset by lower money market
deposits reflecting a shift to relationship-based savings
products.
- Net charge-offs were $132
million for the first quarter of 2019 compared with
$112 million in the fourth quarter
and $100 million in the first quarter
of 2018.
- Residential mortgage loan origination volume was
$1.7 billion for the first quarter of
2019 compared with $1.6 billion for
the fourth quarter and $1.7 billion
for the first quarter of 2018. Approximately 56 percent of first
quarter 2019 volume was for home purchase transactions compared
with 67 percent and 56 percent for the fourth and first quarters of
2018, respectively.
- The third party residential mortgage servicing portfolio
was $123 billion at March 31, 2019 compared with $125 billion at both December 31, 2018 and March 31, 2018. Residential mortgage loan
servicing acquisitions were $1
billion for first quarter 2019, $2
billion for fourth quarter 2018 and $1 billion for first quarter 2018.
- Approximately 68 percent of consumer customers used
non-teller channels for the majority of their transactions during
the first quarter of 2019 compared with 67 percent in the fourth
quarter and 64 percent in the first quarter of 2018.
- Deposit transactions via ATM and mobile channels were 57
percent of total deposit transactions in the first quarter of 2019
compared with 55 percent in the fourth quarter and 54 percent in
the first quarter of 2018.
Corporate & Institutional
Banking
|
|
|
|
|
|
Change
|
|
|
Change
|
|
|
|
|
|
|
|
|
1Q19 vs
|
|
|
1Q19 vs
|
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
|
4Q18
|
|
|
1Q18
|
|
Net interest
income
|
$
|
898
|
|
|
$
|
930
|
|
|
$
|
882
|
|
|
$
|
(32)
|
|
|
$
|
16
|
|
Noninterest
income
|
$
|
576
|
|
|
$
|
632
|
|
|
$
|
547
|
|
|
$
|
(56)
|
|
|
$
|
29
|
|
Provision for credit
losses
|
$
|
71
|
|
|
$
|
42
|
|
|
$
|
41
|
|
|
$
|
29
|
|
|
$
|
30
|
|
Noninterest
expense
|
$
|
686
|
|
|
$
|
687
|
|
|
$
|
653
|
|
|
$
|
(1)
|
|
|
$
|
33
|
|
Earnings
|
$
|
552
|
|
|
$
|
651
|
|
|
$
|
563
|
|
|
$
|
(99)
|
|
|
$
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
In billions
|
|
|
|
|
|
|
|
|
|
Average
loans
|
$
|
141.9
|
|
|
$
|
139.5
|
|
|
$
|
135.5
|
|
|
$
|
2.4
|
|
|
$
|
6.4
|
|
Average
deposits
|
$
|
88.6
|
|
|
$
|
91.8
|
|
|
$
|
87.9
|
|
|
$
|
(3.2)
|
|
|
$
|
.7
|
|
Corporate & Institutional Banking earnings for the
first quarter of 2019 decreased in both comparisons. Noninterest
income declined compared with the fourth quarter primarily due to
lower gains on asset sales and seasonally lower loan syndication
fees and revenue from commercial mortgage banking activities
partially offset by higher merger and acquisition advisory fees.
Noninterest income increased compared with the first quarter of
2018 primarily due to higher merger and acquisition advisory fees
and treasury management product revenue. Provision for credit
losses in the first quarter of 2019 increased compared with the
fourth quarter reflecting portfolio growth, including new loans and
increased utilization, and reserve increases attributable to
certain commercial credits. Noninterest expense increased compared
with the first quarter of 2018 largely as a result of investments
in strategic initiatives and variable costs associated with
increased business activity.
- Average loans increased 2 percent compared with the
fourth quarter primarily due to growth in PNC's corporate banking
business as well as growth in business credit partially offset by
seasonally lower multifamily agency warehouse lending in the real
estate business. Average loans grew 5 percent over the first
quarter of 2018 reflecting growth in both PNC's corporate banking
and business credit businesses.
- Average deposits decreased 4 percent from the fourth
quarter reflecting seasonal declines and increased 1 percent
compared with the first quarter of 2018 due to growth in
interest-bearing deposits substantially offset by a decline in
noninterest-bearing demand deposits as deposit rates have
risen.
- Net charge-offs were $5
million in the first quarter of 2019 compared with
$2 million in the fourth quarter of
2018 and $9 million in the first
quarter of 2018.
Asset Management Group
|
|
|
|
|
|
|
Change
|
|
|
Change
|
|
|
|
|
|
|
|
|
1Q19 vs
|
|
|
1Q19 vs
|
|
In millions
|
1Q19
|
|
|
4Q18
|
|
|
1Q18
|
|
|
4Q18
|
|
|
1Q18
|
|
Net interest
income
|
$
|
70
|
|
|
$
|
70
|
|
|
$
|
74
|
|
|
—
|
|
|
$
|
(4)
|
|
Noninterest
income
|
$
|
217
|
|
|
$
|
216
|
|
|
$
|
226
|
|
|
$
|
1
|
|
|
$
|
(9)
|
|
Provision for credit
losses (benefit)
|
(1)
|
|
|
—
|
|
|
$
|
(7)
|
|
|
$
|
(1)
|
|
|
$
|
6
|
|
Noninterest
expense
|
$
|
230
|
|
|
$
|
232
|
|
|
$
|
225
|
|
|
$
|
(2)
|
|
|
$
|
5
|
|
Earnings
|
$
|
45
|
|
|
$
|
42
|
|
|
$
|
62
|
|
|
$
|
3
|
|
|
$
|
(17)
|
|
|
|
|
|
|
|
|
|
|
|
In billions
|
|
|
|
|
|
|
|
|
|
Client assets under
administration at
quarter end
|
$
|
288
|
|
|
$
|
272
|
|
|
$
|
277
|
|
|
$
|
16
|
|
|
$
|
11
|
|
Average
loans
|
$
|
6.8
|
|
|
$
|
6.9
|
|
|
$
|
7.0
|
|
|
$
|
(.1)
|
|
|
$
|
(.2)
|
|
Average
deposits
|
$
|
12.9
|
|
|
$
|
12.5
|
|
|
$
|
12.5
|
|
|
$
|
.4
|
|
|
$
|
.4
|
|
Asset Management Group earnings for the first quarter of
2019 increased compared with the fourth quarter of 2018 and
decreased compared with the first quarter of 2018. Noninterest
income increased over the fourth quarter reflecting higher average
equity markets and decreased compared with first quarter 2018 due
to changes in the mix of assets under management.
- Client assets under administration at March 31, 2019 include discretionary assets under
management of $158 billion and
nondiscretionary assets under administration of $130 billion.
-
- Discretionary client assets under management increased
$10 billion compared with both
December 31, 2018 and March 31, 2018 primarily attributable to equity
market increases.
Other, including BlackRock
The
"Other, including BlackRock" category, for the purposes of this
release, includes earnings and gains or losses related to PNC's
equity investment in BlackRock, and residual activities that do not
meet the criteria for disclosure as a separate reportable business,
such as asset and liability management activities including net
securities gains or losses, other-than-temporary impairment of
investment securities, certain trading activities, certain
non-strategic runoff consumer loan portfolios, private equity
investments, intercompany eliminations, certain corporate overhead,
tax adjustments that are not allocated to business segments, exited
businesses, and differences between business segment performance
reporting and financial statement reporting under generally
accepted accounting principles.
CONFERENCE CALL AND SUPPLEMENTAL FINANCIAL
INFORMATION
PNC Chairman, President and Chief
Executive Officer William S. Demchak
and Chief Financial Officer Robert Q.
Reilly will hold a conference call for investors today at
9:30 a.m. Eastern Time regarding the
topics addressed in this news release and the related financial
supplement. Dial-in numbers for the conference call are (877)
272-3498 and (303) 223-4362 (international) and Internet access to
the live audio listen-only webcast of the call is available at
www.pnc.com/investorevents. PNC's first quarter 2019 earnings
release, related financial supplement, and presentation slides to
accompany the conference call remarks will be available at
www.pnc.com/investorevents prior to the beginning of the call.
A telephone replay of the call will be available for one week at
(800) 633-8284 and (402) 977-9140 (international), conference ID
21916444 and a replay of the audio webcast will be available on
PNC's website for 30 days.
The PNC Financial Services Group, Inc. is one of the
largest diversified financial services institutions in the United States, organized around its
customers and communities for strong relationships and local
delivery of retail and business banking including a full range of
lending products; specialized services for corporations and
government entities, including corporate banking, real estate
finance and asset-based lending; wealth management and asset
management. For information about PNC, visit
www.pnc.com.
[TABULAR MATERIAL FOLLOWS]
The PNC Financial
Services Group, Inc.
|
|
Consolidated Financial Highlights
(Unaudited)
|
|
|
|
FINANCIAL
RESULTS
|
|
Three months
ended
|
Dollars in millions, except per share
data
|
|
March 31
|
|
December
31
|
|
March 31
|
|
|
2019
|
|
2018
|
|
2018
|
Revenue
|
|
|
|
|
|
|
Net interest
income
|
|
$
|
2,475
|
|
|
$
|
2,481
|
|
|
$
|
2,361
|
|
Noninterest
income
|
|
1,811
|
|
|
1,859
|
|
|
1,750
|
|
Total
revenue
|
|
4,286
|
|
|
4,340
|
|
|
4,111
|
|
Provision for credit
losses
|
|
189
|
|
|
148
|
|
|
92
|
|
Noninterest
expense
|
|
2,578
|
|
|
2,577
|
|
|
2,527
|
|
Income before income
taxes and noncontrolling interests
|
|
$
|
1,519
|
|
|
$
|
1,615
|
|
|
$
|
1,492
|
|
Net income
|
|
$
|
1,271
|
|
|
$
|
1,351
|
|
|
$
|
1,239
|
|
Less:
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
|
10
|
|
|
14
|
|
|
10
|
|
Preferred stock
dividends (a)
|
|
63
|
|
|
55
|
|
|
63
|
|
Preferred stock
discount accretion and redemptions
|
|
1
|
|
|
1
|
|
|
1
|
|
Net income
attributable to common shareholders
|
|
$
|
1,197
|
|
|
$
|
1,281
|
|
|
$
|
1,165
|
|
Less:
|
|
|
|
|
|
|
Dividends and
undistributed earnings allocated to nonvested restricted
shares
|
|
5
|
|
|
5
|
|
|
5
|
|
Impact of BlackRock
earnings per share dilution
|
|
3
|
|
|
2
|
|
|
2
|
|
Net income
attributable to diluted common shares
|
|
$
|
1,189
|
|
|
$
|
1,274
|
|
|
$
|
1,158
|
|
Diluted earnings per
common share
|
|
$
|
2.61
|
|
|
$
|
2.75
|
|
|
$
|
2.43
|
|
Cash dividends
declared per common share
|
|
$
|
.95
|
|
|
$
|
.95
|
|
|
$
|
.75
|
|
Effective tax rate
(b)
|
|
16.3
|
%
|
|
16.3
|
%
|
|
17.0
|
%
|
|
|
(a)
|
Dividends are payable
quarterly other than the Series O, Series R and Series S preferred
stock, which are payable semiannually, with the Series O payable in
different quarters than the Series R and Series S preferred
stock.
|
(b)
|
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.
|
Consolidated
Financial Highlights (Unaudited)
|
|
|
Three months
ended
|
|
|
March 31
|
|
December
31
|
|
March 31
|
|
|
2019
|
|
2018
|
|
2018
|
PERFORMANCE RATIOS
|
|
|
|
|
|
|
Net interest margin
(a)
|
|
2.98
|
%
|
|
2.96
|
%
|
|
2.91
|
%
|
Noninterest income to
total revenue
|
|
42
|
%
|
|
43
|
%
|
|
43
|
%
|
Efficiency
(b)
|
|
60
|
%
|
|
59
|
%
|
|
61
|
%
|
Return on:
|
|
|
|
|
|
|
Average common
shareholders' equity
|
|
11.13
|
%
|
|
11.83
|
%
|
|
11.04
|
%
|
Average
assets
|
|
1.34
|
%
|
|
1.40
|
%
|
|
1.34
|
%
|
BUSINESS SEGMENT NET INCOME (LOSS)
(c)
|
|
|
|
|
|
|
In millions
|
|
|
|
|
|
|
Retail
Banking
|
|
$
|
264
|
|
|
$
|
313
|
|
|
$
|
249
|
|
Corporate &
Institutional Banking
|
|
552
|
|
|
651
|
|
|
563
|
|
Asset Management
Group
|
|
45
|
|
|
42
|
|
|
62
|
|
Other, including
BlackRock (d)
|
|
410
|
|
|
345
|
|
|
365
|
|
Total net
income
|
|
$
|
1,271
|
|
|
$
|
1,351
|
|
|
$
|
1,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Net interest margin
is the total yield on interest-earning assets minus the total rate
on interest-bearing liabilities and includes the benefit from use
of noninterest-bearing sources. To provide more meaningful
comparisons of net interest margins, we use interest income on a
taxable-equivalent basis in calculating net interest yields used in
the calculation of net interest margin by increasing the interest
income earned on tax-exempt assets to make it fully equivalent to
interest income earned on taxable investments. This adjustment is
not permitted under generally accepted accounting principles (GAAP)
in the Consolidated Income Statement. The taxable-equivalent
adjustments to net interest income for the three months ended
March 31, 2019, December 31, 2018 and March 31, 2018
were $27 million, $28 million and $29 million,
respectively.
|
(b)
|
Calculated as
noninterest expense divided by total revenue.
|
(c)
|
Our business
information is presented based on our internal management reporting
practices. Net interest income in business segment results reflect
PNC's internal funds transfer pricing methodology. Assets receive a
funding charge and liabilities and capital receive a funding credit
based on a transfer pricing methodology that incorporates product
repricing characteristics, tenor and other
factors.
|
(d)
|
Includes earnings and
gains or losses related to PNC's equity interest in BlackRock and
residual activities that do not meet the criteria for disclosure as
a separate reportable business. We provide additional information
on these activities in our Form 10-K and Form 10-Q filings with the
SEC.
|
The PNC Financial
Services Group, Inc.
|
Consolidated
Financial Highlights (Unaudited)
|
|
March 31
|
|
December
31
|
|
March 31
|
|
2019
|
|
2018
|
|
2018
|
BALANCE SHEET DATA
|
|
|
|
|
|
Dollars in millions, except per share
data
|
|
|
|
|
|
Assets
|
$
|
392,837
|
|
|
$
|
382,315
|
|
|
$
|
379,161
|
|
Loans (a)
|
$
|
232,293
|
|
|
$
|
226,245
|
|
|
$
|
221,614
|
|
Allowance for loan
and lease losses
|
$
|
2,692
|
|
|
$
|
2,629
|
|
|
$
|
2,604
|
|
Interest-earning
deposits with banks
|
$
|
15,261
|
|
|
$
|
10,893
|
|
|
$
|
28,821
|
|
Investment
securities
|
$
|
83,869
|
|
|
$
|
82,701
|
|
|
$
|
74,562
|
|
Loans held for sale
(a)
|
$
|
686
|
|
|
$
|
994
|
|
|
$
|
965
|
|
Equity investments
(b)
|
$
|
12,567
|
|
|
$
|
12,894
|
|
|
$
|
12,008
|
|
Mortgage servicing
rights
|
$
|
1,812
|
|
|
$
|
1,983
|
|
|
$
|
1,979
|
|
Goodwill
|
$
|
9,218
|
|
|
$
|
9,218
|
|
|
$
|
9,218
|
|
Other assets
(a)
|
$
|
34,761
|
|
|
$
|
34,408
|
|
|
$
|
27,949
|
|
Noninterest-bearing
deposits
|
$
|
71,606
|
|
|
$
|
73,960
|
|
|
$
|
78,303
|
|
Interest-bearing
deposits
|
$
|
199,615
|
|
|
$
|
193,879
|
|
|
$
|
186,401
|
|
Total
deposits
|
$
|
271,221
|
|
|
$
|
267,839
|
|
|
$
|
264,704
|
|
Borrowed funds
(a)
|
$
|
59,860
|
|
|
$
|
57,419
|
|
|
$
|
58,039
|
|
Total shareholders'
equity
|
$
|
48,536
|
|
|
$
|
47,728
|
|
|
$
|
46,969
|
|
Common shareholders'
equity
|
$
|
44,546
|
|
|
$
|
43,742
|
|
|
$
|
42,983
|
|
Accumulated other
comprehensive income (loss)
|
$
|
(5)
|
|
|
$
|
(725)
|
|
|
$
|
(699)
|
|
Book value per common
share
|
$
|
98.47
|
|
|
$
|
95.72
|
|
|
$
|
91.39
|
|
Tangible book value
per common share (Non-GAAP) (c)
|
$
|
78.07
|
|
|
$
|
75.42
|
|
|
$
|
71.58
|
|
Period end common
shares outstanding (millions)
|
452
|
|
|
457
|
|
|
470
|
|
Loans to
deposits
|
86
|
%
|
|
84
|
%
|
|
84
|
%
|
Common shareholders'
equity to total assets
|
11.3
|
%
|
|
11.4
|
%
|
|
11.3
|
%
|
CLIENT ASSETS (billions)
|
|
|
|
|
|
Discretionary client
assets under management
|
$
|
158
|
|
|
$
|
148
|
|
|
$
|
148
|
|
Nondiscretionary
client assets under administration
|
130
|
|
|
124
|
|
|
129
|
|
Total client assets
under administration
|
288
|
|
|
272
|
|
|
277
|
|
Brokerage account
client assets
|
51
|
|
|
47
|
|
|
49
|
|
Total client
assets
|
$
|
339
|
|
|
$
|
319
|
|
|
$
|
326
|
|
CAPITAL RATIOS
|
|
|
|
|
|
Basel III (d)
|
|
|
|
|
|
Common equity
Tier 1
|
9.8
|
%
|
|
9.6
|
%
|
|
9.6
|
%
|
Tier 1
risk-based
|
10.9
|
%
|
|
10.8
|
%
|
|
10.8
|
%
|
Total capital
risk-based (e)
|
13.0
|
%
|
|
13.0
|
%
|
|
12.8
|
%
|
Leverage
|
9.6
|
%
|
|
9.4
|
%
|
|
9.4
|
%
|
Supplementary leverage
|
8.1
|
%
|
|
7.8
|
%
|
|
7.9
|
%
|
ASSET QUALITY
|
|
|
|
|
|
Nonperforming loans
to total loans
|
.71
|
%
|
|
.75
|
%
|
|
.83
|
%
|
Nonperforming assets
to total loans, OREO and foreclosed assets
|
.77
|
%
|
|
.80
|
%
|
|
.90
|
%
|
Nonperforming assets
to total assets
|
.45
|
%
|
|
.47
|
%
|
|
.53
|
%
|
Net charge-offs to
average loans (for the three months ended) (annualized)
|
.24
|
%
|
|
.19
|
%
|
|
.21
|
%
|
Allowance for loan
and lease losses to total loans
|
1.16
|
%
|
|
1.16
|
%
|
|
1.18
|
%
|
Allowance for loan
and lease losses to nonperforming loans
|
163
|
%
|
|
155
|
%
|
|
141
|
%
|
Accruing loans past
due 90 days or more (in millions)
|
$
|
590
|
|
|
$
|
629
|
|
|
$
|
628
|
|
|
|
|
|
(a)
|
Amounts include
assets and liabilities for which we have elected the fair value
option. Our 2018 Form 10-K included, and our first quarter 2019
Form 10-Q will include, additional information regarding these
Consolidated Balance Sheet line items.
|
(b)
|
Amounts include our
equity interest in BlackRock.
|
(c)
|
See the Tangible Book
Value per Common Share table on page 17 for additional
information.
|
(d)
|
All ratios are
calculated using the regulatory capital methodology applicable to
PNC during each period presented and calculated based on the
standardized approach. See Capital Ratios on page 16 for additional
information. The ratios as of March 31, 2019 are
estimated.
|
(e)
|
The 2019 and 2018
Basel III Total risk-based capital ratios include nonqualifying
trust preferred capital securities of $60 million and $80 million,
respectively, that are subject to a phase-out period that runs
through 2021.
|
The PNC Financial Services Group,
Inc.
|
Consolidated
Financial Highlights (Unaudited)
|
|
CAPITAL
RATIOS
Because PNC remains
in the parallel run qualification phase for the advanced
approaches, PNC's regulatory risk-based capital ratios in 2019 and
2018 are calculated using the standardized approach for determining
risk-weighted assets. Under the standardized approach for
determining credit risk-weighted assets, exposures are generally
assigned a pre-defined risk weight. Exposures to high volatility
commercial real estate, past due exposures and equity exposures are
generally subject to higher risk weights than other types of
exposures.
We provide
information below regarding PNC's Basel III Common equity Tier 1
capital ratios. Under the Basel III rules applicable to PNC,
significant common stock investments in unconsolidated financial
institutions (for PNC, primarily BlackRock), mortgage servicing
rights and deferred tax assets must be deducted from capital (net
of associated deferred tax liabilities) to the extent they
individually exceed 10%, or in the aggregate exceed 15%, of the
institution's adjusted common equity Tier 1 capital. Also, Basel
III regulatory capital includes accumulated other comprehensive
income (loss) related to securities currently and those transferred
from, available for sale, as well as pension and other
postretirement plans.
|
|
|
|
|
|
|
|
Basel lll Common Equity Tier 1 Capital Ratios
(a)
|
|
|
|
|
|
|
|
March 31
|
|
December
31
|
|
March 31
|
|
Dollars in millions
|
2019
(estimated)
|
|
2018
|
|
2018
|
|
Common stock, related
surplus and retained earnings, net of treasury stock
|
$
|
44,552
|
|
|
$
|
44,467
|
|
|
$
|
43,681
|
|
|
Less regulatory
capital adjustments:
|
|
|
|
|
|
Goodwill and
disallowed intangibles, net of deferred tax liabilities
|
(9,260)
|
|
|
(9,277)
|
|
|
(9,343)
|
|
|
Basel III total
threshold deductions
|
(3,077)
|
|
|
(3,464)
|
|
|
(3,272)
|
|
|
Accumulated other
comprehensive income (loss)
|
1
|
|
|
(610)
|
|
|
(645)
|
|
|
All other
adjustments
|
(165)
|
|
|
(211)
|
|
|
(121)
|
|
|
Basel III Common
equity Tier 1 capital
|
$
|
32,051
|
|
|
$
|
30,905
|
|
|
$
|
30,300
|
|
|
|
|
|
|
|
|
|
Basel III
standardized approach risk-weighted assets (b)
|
$
|
328,359
|
|
|
$
|
320,595
|
|
|
$
|
314,922
|
|
|
Basel III advanced
approaches risk-weighted assets (c)
|
$
|
299,563
|
|
|
$
|
282,902
|
|
|
$
|
280,385
|
|
|
Basel III Common
equity Tier 1 capital ratio
|
9.8
|
%
|
|
9.6
|
%
|
|
9.6
|
%
|
|
Risk weight and
associated rules utilized
|
Standardized
|
|
|
|
(a)
|
All ratios are
calculated using the regulatory capital methodology applicable to
PNC during each period presented.
|
(b)
|
Basel III
standardized approach risk-weighted assets are based on the Basel
III standardized approach rules and include credit and market
risk-weighted assets.
|
(c)
|
Basel III advanced
approaches risk-weighted assets are based on the Basel III advanced
approaches rules, and include credit, market and operational
risk-weighted assets. During the parallel run qualification phase,
PNC has refined the data, models and internal processes used as
part of the advanced approaches for determining risk-weighted
assets. We anticipate additional refinements through the parallel
run qualification phase.
|
Our Basel III capital ratios may be impacted by changes to
the regulatory capital rules, additional regulatory guidance or
analysis, and, in the case of those ratios calculated using the
advanced approaches, may be subject to variability based on the
ongoing evolution, validation and regulatory approval of PNC's
models that are integral to the calculation of advanced approaches
risk-weighted assets as PNC moves through the parallel run approval
process.
The PNC Financial Services Group,
Inc.
|
Consolidated
Financial Highlights (Unaudited)
|
|
Tangible book value
per common share is a non-GAAP measure and is calculated based on
tangible common shareholders' equity divided by period-end common
shares outstanding. We believe this non-GAAP measure serves as a
useful tool to help evaluate the strength and discipline of a
company's capital management strategies and as an additional,
conservative measure of total company value.
|
|
|
|
|
|
|
|
|
Tangible Book Value per Common Share
(Non-GAAP)
|
|
|
|
|
|
|
March 31
|
|
December
31
|
|
March 31
|
|
|
Dollars in millions, except per share
data
|
2019
|
|
2018
|
|
2018
|
|
|
Book value per common
share
|
$
|
98.47
|
|
|
$
|
95.72
|
|
|
$
|
91.39
|
|
|
|
Tangible book value
per common share
|
|
|
|
|
|
|
|
Common shareholders'
equity
|
$
|
44,546
|
|
|
$
|
43,742
|
|
|
$
|
42,983
|
|
|
|
Goodwill and other
intangible assets
|
(9,450)
|
|
|
(9,467)
|
|
|
(9,533)
|
|
|
|
Deferred tax
liabilities on Goodwill and other intangible assets
|
190
|
|
|
190
|
|
|
192
|
|
|
|
Tangible common
shareholders' equity
|
$
|
35,286
|
|
|
$
|
34,465
|
|
|
$
|
33,642
|
|
|
|
Period-end common
shares outstanding (millions)
|
452
|
|
|
457
|
|
|
470
|
|
|
|
Tangible book value
per common share (Non-GAAP)
|
$
|
78.07
|
|
|
$
|
75.42
|
|
|
$
|
71.58
|
|
|
|
Cautionary Statement Regarding Forward-Looking
Information
We make statements in this news release and related
conference call, and we may from time to time make other
statements, regarding our outlook for earnings, revenues, expenses,
tax rates, capital and liquidity levels and ratios, asset levels,
asset quality, financial position, and other matters regarding or
affecting PNC and its future business and operations that are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act. Forward-looking statements
are typically identified by words such as "believe," "plan,"
"expect," "anticipate," "see," "look," "intend," "outlook,"
"project," "forecast," "estimate," "goal," "will," "should" and
other similar words and expressions.
Forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date made. We
do not assume any duty to update forward-looking statements.
Actual results or future events could differ, possibly materially,
from those anticipated in forward-looking statements, as well as
from historical performance.
Our forward-looking statements are subject to the
following principal risks and uncertainties.
- Our businesses, financial results and balance sheet
values are affected by business and economic conditions, including
the following:
-
- Changes in interest rates and valuations in debt, equity
and other financial markets.
- Disruptions in the U.S. and global financial
markets.
- Actions by the Federal Reserve Board, U.S. Treasury and
other government agencies, including those that impact money supply
and market interest rates.
- Changes in customer behavior due to recently enacted tax
legislation, changing business and economic conditions or
legislative or regulatory initiatives.
- Changes in customers', suppliers' and other
counterparties' performance and creditworthiness.
- Impacts of tariffs and other trade policies of the U.S.
and its global trading partners.
- Slowing or reversal of the current U.S. economic
expansion.
- Commodity price volatility.
- 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 regulatory
contingencies. These statements are based on our views
that:
-
- U.S. economic growth has accelerated over the past two
years to above its long-run trend.
- However, growth is expected to slow over the course of
2019 and into 2020. Growth is expected to rebound in the second
quarter following a soft first quarter 2019.
- We expect further gradual improvement in the labor market
this year, including job gains and rising wages, will be another
positive for consumer spending.
- Trade restrictions and geopolitical concerns are downside
risks to the forecast.
- Inflation has slowed in early 2019, to below the FOMC's 2
percent objective, but is expected to rise in the second half of
the year.
- Our baseline forecast is for no change to the federal
funds rate in 2019 and 2020, with the rate staying in its current
range of 2.25 to 2.50 percent.
- PNC's ability to take certain capital actions, including
returning capital to shareholders, is subject to review by the
Federal Reserve Board as part of PNC's comprehensive capital plan
for the applicable period in connection with the Federal Reserve
Board's Comprehensive Capital Analysis and Review (CCAR) process
and to the acceptance of such capital plan and non-objection to
such capital actions by the Federal Reserve Board.
- PNC's regulatory capital ratios in the future will depend
on, among other things, the company's financial performance, the
scope and terms of final capital regulations then in effect and
management actions affecting the composition of PNC's balance
sheet. In addition, PNC's ability to determine, evaluate and
forecast regulatory capital ratios, and to take actions (such as
capital distributions) based on actual or forecasted capital
ratios, will be dependent at least in part on the development,
validation and regulatory approval of related models.
Cautionary Statement Regarding Forward-Looking
Information (Continued)
- Legal and regulatory developments could have an impact on
our ability to operate our businesses, financial condition, results
of operations, competitive position, reputation, or pursuit of
attractive acquisition opportunities. Reputational impacts
could affect matters such as business generation and retention,
liquidity, funding, and ability to attract and retain
management. These developments could include:
-
- Changes resulting from legislative and regulatory
reforms, including changes affecting oversight of the financial
services industry, consumer protection, pension, bankruptcy and
other industry aspects, and changes in accounting policies and
principles.
- Changes to regulations governing bank capital and
liquidity standards.
- Unfavorable resolution of legal proceedings or other
claims and regulatory and other governmental investigations or
other inquiries. These matters may result in monetary judgments or
settlements or other remedies, including fines, penalties,
restitution or alterations in our business practices, and in
additional expenses and collateral costs, and may cause
reputational harm to PNC.
- Results of the regulatory examination and supervision
process, including our failure to satisfy requirements of
agreements with governmental agencies
- Impact on business and operating results of any costs
associated with obtaining rights in intellectual property claimed
by others and of adequacy of our intellectual property protection
in general.
- 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, derivatives, and
capital management techniques, and to meet evolving regulatory
capital and liquidity standards.
- Business and operating results also include impacts
relating to our equity interest in BlackRock, Inc. and rely to a
significant extent on information provided to us by
BlackRock. Risks and uncertainties that could affect
BlackRock are discussed in more detail by BlackRock in its SEC
filings.
- We grow our business in part through acquisitions and new
strategic initiatives. Risks and uncertainties include those
presented by the nature of the business acquired and strategic
initiative, including in some cases those associated with our entry
into new businesses or new geographic or other markets and risks
resulting from our inexperience in those new areas, as well as
risks and uncertainties related to the acquisition transactions
themselves, regulatory issues, and the integration of the acquired
businesses into PNC after closing.
- Competition can have an impact on customer acquisition,
growth and retention and on credit spreads and product pricing,
which can affect market share, deposits and revenues. Our
ability to anticipate and respond to technological changes can also
impact our ability to respond to customer needs and meet
competitive demands.
- Business and operating results can also be affected by
widespread natural and other disasters, pandemics, dislocations,
terrorist activities, system failures, security breaches,
cyberattacks or international hostilities through impacts on the
economy and financial markets generally or on us or our
counterparties specifically.
We provide greater detail regarding these as well as other
factors in our 2018 Form 10-K, including in the Risk Factors and
Risk Management sections and the Legal Proceedings and Commitments
Notes of the Notes To Consolidated Financial Statements in that
report, and in our subsequent SEC filings. Our
forward-looking statements may also be subject to other risks and
uncertainties, including those we may discuss elsewhere in this
news release or in our SEC filings, accessible on the SEC's website
at www.sec.gov and on our corporate website at
www.pnc.com/secfilings. We have included these web addresses
as inactive textual references only. Information on these
websites is not part of this document.
MEDIA:
Marcey Zwiebel
(412) 762-4550
media.relations@pnc.com
INVESTORS:
Bryan Gill
(412) 768-4143
investor.relations@pnc.com
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SOURCE PNC Financial Services Group, Inc.