01—Abstract
Summary
Summary of the 10-K filed March 1, 2019. Cited figures are marked; the original filing is the authoritative source.
PNC Financial Services Group, Inc. (PNC) reported solid performance for the year ended December 31, 2018.
The company experienced a modest increase in net income to $5.3 billiona, or $10.71 per diluted common share, compared to $5.4 billion, or $10.36 per diluted common share, in 2017. This was primarily driven by a 5% increase in total revenue to $17.1 billion, with net interest income rising 7% due to higher yields and balances, and a 1% decrease in noninterest expense to $10.3 billion. The company maintained a strong capital position, with its Basel III common equity Tier 1 capital ratio at 9.6% at year-end.
PNC returned $4.4 billionb in capital to shareholders through share repurchases and dividends, reflecting its commitment to shareholder value while supporting business growth and investment. Key balance sheet highlights include a slight increase in total assets to $382.3 billion and total deposits to $267.8 billion. Credit quality remained strong, with nonperforming assets decreasing by 11% and net charge-offs declining by 8%.
The company's strategic priorities include expanding its banking franchise digitally and geographically, deepening customer relationships, and leveraging technology for innovation. PNC's outlook for 2019 anticipates loan growth between 3%c and 4%, revenue growth in the low single digits, and controlled noninterest expense growth.
02—Key points
Key Highlights
- PNC Financial Services Group, Inc. reported net income of $5.3 billion ($10.71 per diluted share) for the year ended December 31, 2018, a slight decrease from $5.4 billion ($10.36 per diluted share) in 2017.
- Total revenue increased 5% to $17.1 billion, with net interest income up 7% to $9.7 billion, driven by higher loan and securities yields and balances.
- Noninterest expense decreased 1% to $10.3 billion, primarily due to specific charges in the prior year being lapped.
- The company maintained a strong capital position, with its Basel III Common Equity Tier 1 capital ratio at 9.6% at December 31, 2018.
- PNC returned $4.4 billion of capital to shareholders in 2018 through $2.8 billion in share repurchases and $1.6 billion in common share dividends.
- Total assets grew slightly to $382.3 billion, and total deposits increased to $267.8 billion.
- Credit quality remained robust, with nonperforming assets decreasing 11% and net charge-offs decreasing 8% compared to the prior year.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed March 1, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $16.19B$16.33B | −0.9% |
| Operating Income | $4.51B— | — |
| Interest Expense | $2.86B$1.71B | +67.7% |
| Net Income | $5.35B$5.39B | −0.8% |
| EPS (Basic) | $10.79$10.49 | +2.9% |
| EPS (Diluted) | $10.71$10.36 | +3.4% |
| Shares Outstanding (Basic) | 467.00M481.00M | −2.9% |
| Shares Outstanding (Diluted) | 470.00M486.00M | −3.3% |
05—Questions
Frequently Asked Questions
What was PNC's financial performance in 2018?
In 2018, PNC reported net income of $5.3 billion, or $10.71 per diluted common share. Total revenue increased 5% to $17.1 billion, while noninterest expense decreased 1% to $10.3 billion. The company maintained strong credit quality, with nonperforming assets down 11% and net charge-offs down 8%.
How did PNC manage its capital and shareholder returns in 2018?
PNC maintained a strong capital position, with its Basel III Common Equity Tier 1 capital ratio at 9.6% at December 31, 2018. The company returned $4.4 billion of capital to shareholders through share repurchases ($2.8 billion) and common share dividends ($1.6 billion).
What are PNC's key business segments and their performance?
PNC operates through four reportable segments: Retail Banking, Corporate & Institutional Banking, Asset Management Group, and its investment in BlackRock. Retail Banking earned $1.1 billion, Corporate & Institutional Banking earned $2.5 billion, and Asset Management Group earned $202 million in 2018. The BlackRock segment contributed $781 million to earnings.
06—Continue