PNC Financial Services Group, Inc. (PNC) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 18, 2023 11:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Bryan Gill

Good morning, and welcome to today's conference call for the PNC Financial Services Group. Participating on this call are PNC's Chairman, President and CEO, Bill Demchak; and Rob Reilly, Executive Vice President and CFO.

Today's presentation contains forward-looking information. Cautionary statements about this information as well as reconciliations of non-GAAP measures are included in today's earnings release materials as well as our SEC filings and other investor materials. These are all available on our corporate website, pnc.com, under Investor Relations. These statements speak only as of July 18, 2023, and PNC undertakes no obligation to update them.

Now, I'd like to turn the call over to Bill.

Bill Demchak

Thank you, Bryan, and good morning, everyone. As you can see on the slide, we delivered solid results in the second quarter generating exactly $1.5 billion in net income or $3.36 in diluted earnings per share. While the macro environment and the competitive dynamics playing out within the banking sector pressured our revenue during the quarter, our results reflect the overall strength of our franchise and balance sheet. And importantly, through it all, we remain focused on executing on our strategic priorities. Our momentum across our markets remains strong, especially in the Southwest. We are growing households and commercial customers throughout our footprint.

Rob will take you through the details of our second quarter results in a moment, but I'd like to call out a few highlights. First, we grew our capital during the quarter and feel very good about our positioning of our balance sheet in the current environment. In the next few weeks, we expect the Fed will announce changes to the Basel III capital framework. We believe our strong capital and liquidity levels, as well as our earnings power provide the strength and flexibility to address upcoming regulatory changes. At the same time, we continue to support our customers, grow our business, and deliver returns for our shareholders. And in line with our focus on shareholder returns, we recently increased our quarterly common stock dividend by $0.05. Our financial strength and stability are evidenced in the Fed's latest stress tests resulting in an improvement in our stress capital buffer to the regulatory minimum level of 2.5% in October.

Second, expense control is in focus. Rob will touch on this in a moment. We have increased our continuous improvement program target for 2023, and are taking a hard look at opportunities for even further expense improvements across the franchise.