PNC FINANCIAL SERVICES GROUP, INC. Quarterly Report for Q3 Ended Sep 30, 2016

Summary

PNC Financial Services Group, Inc. reported a net income of $1.0 billion, or $1.84 per diluted common share, for the third quarter of 2016, a slight decrease from $1.1 billion, or $1.90 per diluted common share, in the same period of the prior year. Total revenue increased by 1% to $3.8 billion, driven by a 2% rise in net interest income to $2.1 billion, partially offset by a slight decrease in noninterest income. The company's balance sheet remained strong, with total assets growing to $369.3 billion, supported by a 4% increase in total deposits to $259.9 billion. Credit quality metrics remained stable, with nonperforming assets decreasing by 2% to $2.4 billion. However, net charge-offs for the quarter increased to $154 million compared to $96 million in the prior year's third quarter, reflecting higher commercial loan net charge-offs. PNC continued its capital return strategy, repurchasing $0.5 billion of common stock and paying $0.3 billion in dividends during the quarter.

Key Highlights

• 1Net income for Q3 2016 was $1.0 billion ($1.84/share), down 6% from Q3 2015 ($1.1 billion, $1.90/share).
• 2Total revenue increased by 1% to $3.8 billion, driven by a 2% increase in net interest income to $2.1 billion.
• 3Noninterest income was relatively flat at $1.7 billion, with growth in asset management and consumer services offset by declines elsewhere.
• 4Noninterest expense increased 2% to $2.4 billion, impacted by a new FDIC deposit insurance surcharge.
• 5Total assets grew 3% to $369.3 billion, with higher investment securities and loans.
• 6Total deposits increased 4% to $259.9 billion, primarily due to growth in savings deposits.
• 7The Tangible Common Equity Tier 1 capital ratio was stable at 10.6% on a Transitional Basel III basis.
• 8Net charge-offs increased to $154 million in Q3 2016 from $96 million in Q3 2015.

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