The PNC Financial Services Group, Inc. (PNC) Q3 2022 Earnings Call Transcript

The PNC Financial Services Group, Inc. (NYSE:PNC) Q3 2022 Results Conference Call October 14, 2022 11:00 AM ET

Company Participants

Bryan Gill - SVP, Director-IR

Bill Demchak - Chairman, President & CEO

Rob Reilly - EVP, CFO

Conference Call Participants

John Pancari - Evercore

Scott Siefers - Piper Sandler

Gerard Cassidy - RBC

Ken Usdin - Jefferies

Mike Mayo - Wells Fargo Securities

Bill Carcache - Wolfe Research

Michael Rose - Raymond James

Nathan Stein - Deutsche Bank

Bryan Gill

Well, 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 October 14, 2022, and PNC undertakes no obligation to update them.

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

Bill Demchak

Thanks, Bryan, and good morning, everybody. As you've seen, we delivered another strong quarter, generating $1.6 billion of net income or $3.78 per share. The combination of continued growth in our commercial and consumer loan books and higher rates drove net interest income 14% higher and our net interest margin increased 32 basis points. By the way, that's the largest sequential increase in NIM in more than a decade.

Non-interest income was also up modestly, reflecting strong private equity performance and a record quarter in loan syndications, partially offset by weaker M&A activity. We remained disciplined on the expense front, resulting in seven percentage points of positive operating leverage. Our credit quality was largely unchanged in the quarter. While we have not seen any meaningful deterioration in credit quality taking place, our provision of $241 million reflects our slightly weaker economic expectations.

Our capital levels remain solid, and we returned $1.7 billion of capital to shareholders during the quarter through share repurchases and dividends. We continue to make good progress on our strategic priorities. Our new and acquired markets performed particularly well across all lines of business, and we see significant untapped opportunities across these markets. We also continue to invest in our payments capabilities to provide differentiated value.