10-KPeriod: FY2023

PNC FINANCIAL SERVICES GROUP, INC. Annual Report, Year Ended Dec 31, 2023

Filed February 21, 2024For Securities:PNC

Summary

PNC Financial Services Group, Inc. (PNC) reported its 2023 results, demonstrating resilience amidst a dynamic economic landscape. The company's total assets reached $561.6 billion, with total deposits at $421.4 billion and total shareholders' equity at $51.1 billion as of December 31, 2023. Net income for the year was $5.6 billion, or $12.79 per diluted common share, reflecting a decrease compared to 2022 primarily due to higher noninterest expenses, including the FDIC special assessment and workforce reduction charges, as well as lower noninterest income and a higher provision for credit losses. However, net interest income saw an increase, driven by higher interest-earning asset yields and balances. The company maintained strong capital and liquidity positions, with a Common Equity Tier 1 ratio of 9.9% at year-end. PNC's strategic priorities continue to focus on expanding its leading banking franchise, deepening customer relationships, and leveraging technology, while also managing capital and returning excess capital to shareholders through dividends and share repurchases.

Financial Highlights

35 data points
Beta

Revenue

$21.49B

Net Income

$5.65B

26.3% Net Margin

EPS (Diluted)

$12.79

Total Assets

$561.58B

Cash & Equivalents

$50.73B

Free Cash Flow

$10.11B

Financial Statements
Beta
Revenue$21.49B
Operating Income$5.58B
Interest Expense$10.39B
Net Income$5.65B
EPS (Basic)$12.80
EPS (Diluted)$12.79
Shares Outstanding (Basic)401.00M
Shares Outstanding (Diluted)401.00M

Key Highlights

  • 1PNC reported net income of $5.6 billion ($12.79 per diluted common share) for 2023, a decrease from $6.1 billion ($13.85 per diluted common share) in 2022.
  • 2Total revenue increased by 2% to $21.5 billion, driven by a 7% increase in net interest income to $13.9 billion, while noninterest income decreased by 7% to $7.6 billion.
  • 3Noninterest expense increased by 6% to $14.0 billion, impacted by $515 million for the FDIC special assessment and $150 million in workforce reduction charges.
  • 4Provision for credit losses increased to $742 million in 2023 from $477 million in 2022, primarily due to portfolio activity and changes in credit quality within the commercial real estate portfolio.
  • 5Total assets stood at $561.6 billion, while total deposits decreased by 3% to $421.4 billion.
  • 6The Common Equity Tier 1 capital ratio increased to 9.9% at December 31, 2023, up from 9.1% at December 31, 2022.
  • 7PNC returned $3.1 billion to shareholders in 2023 through dividends ($2.5 billion) and share repurchases ($0.6 billion).

Frequently Asked Questions

PNC reported a net income of $5.6 billion, or $12.79 per diluted common share, for 2023. This represents a decrease of 8% compared to $6.1 billion, or $13.85 per diluted common share, reported in 2022. The decrease was primarily attributed to higher noninterest expenses, including the FDIC special assessment and workforce reduction charges, alongside lower noninterest income and an increased provision for credit losses, partially offset by higher net interest income.

Net interest income increased by 7% to $13.9 billion in 2023, driven by higher interest-earning asset yields and balances, partially offset by increased funding costs. Noninterest income decreased by 7% to $7.6 billion, primarily due to lower capital markets and advisory income and a decline in private equity revenue. A significant factor in the noninterest income decline was a $279 million negative adjustment for the Visa Class B derivative fair value.

Noninterest expense increased by 6% to $14.0 billion in 2023. Key drivers included $515 million related to the FDIC special assessment for bank failures and $150 million in workforce reduction charges. Personnel costs also contributed to the increase.

PNC maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio increasing to 9.9% at December 31, 2023, up from 9.1% at December 31, 2022. The company was also considered 'well capitalized' by U.S. regulatory standards.