Skip to content
AnalystLens

PNC FINANCIAL SERVICES GROUP, INC. 8-K Report, Financial Results (Jan 16, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed January 16, 2024
Period End
January 16, 2024
Security
PNC
In the record · 2016–202610-K1110-Q328-K210

PNC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 210 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Apr ’17Apr ’17
  2. Deal closed8-K · May ’20May ’20
  3. Leadership change8-K · Jun ’22Jun ’22
  4. Leadership change8-K · Apr ’26Apr ’26

01—Abstract

Summary

Summary of the 8-K filed January 16, 2024. Cited figures are marked; the original filing is the authoritative source.

PNC Financial Services Group reported fourth-quarter 2023 net income of $883 milliona, or $1.85 per diluted share, and full-year 2023 net income of $5.6 billion, or $12.79 per diluted share.

Both figures include roughly $525 millionb of after-tax charges for the FDIC special assessment tied to the SVB and Signature Bank failures and $150 million of workforce reduction charges. Excluding these items, adjusted fourth-quarter diluted EPS was $3.16 and full-year adjusted EPS was $14.10. Revenue rose 2% sequentially to $5.36 billion on higher noninterest income, while core noninterest expense increased 5% to $3.4 billion.

Balance sheet and credit trends were mixed but stable overall. Average loans grew 2% to $324.6 billionc, helped by the acquisition of capital commitment facilities from Signature Bridge Bank. Average deposits edged up modestly, and period-end deposits declined 1%.

Net charge-offs rose to $200 milliond (0.24% annualized), and nonperforming loans increased 3% to $2.2 billion, though the allowance for credit losses held at 1.70% of total loans. Tangible book value per share rose to $85.08, and the CET1 ratio improved to an estimated 9.9%. Capital return remained measured.

PNC declared a $1.55 quarterly dividend and repurchased only about $0.1 billion of shares in the quarter. Management said buybacks will likely stay modest in the first quarter of 2024 given proposed Basel III capital rules. The company's baseline outlook calls for a mild recession beginning in mid-2024, with a small GDP contraction and rising unemployment.

02—Key points

Key Highlights

  1. Q4 2023 GAAP diluted EPS of $1.85 was depressed by $1.31 per share of after-tax FDIC special assessment and workforce reduction charges; adjusted EPS was $3.16
  2. Full-year 2023 GAAP diluted EPS of $12.79 and adjusted EPS of $14.10 versus $13.85 in 2022
  3. Q4 revenue rose 2% sequentially to $5.36 billion, driven by an 8% increase in noninterest income from capital markets and advisory fees
  4. Core noninterest expense rose 5% sequentially to $3.4 billion, and the reported efficiency ratio was 76% (64% as adjusted)
  5. Net charge-offs increased to $200 million (0.24% annualized) and nonperforming loans rose 3% to $2.2 billion, while the ACL to total loans was stable at 1.70%
  6. CET1 ratio improved to an estimated 9.9%, and tangible book value per share increased to $85.08
  7. Quarterly dividend of $1.55 declared; share repurchases expected to remain modest in Q1 2024 pending proposed Basel III rule changes

03—Questions

Frequently Asked Questions

  1. How much of the Q4 2023 earnings decline was due to one-time items?

    The FDIC special assessment ($515 million pre-tax) and workforce reduction charges ($150 million) together reduced after-tax earnings by about $525 million, or $1.31 per diluted share. Without them, Q4 EPS would have been $3.16, compared with $1.85 as reported and $3.60 in Q3 2023.

  2. Is PNC's credit quality deteriorating?

    Credit metrics softened modestly but remain manageable. Net charge-offs rose to $200 million from $121 million in Q3, and nonperforming loans increased to $2.2 billion. The allowance for credit losses stayed at 1.70% of total loans, and the provision for credit losses rose to $232 million from $129 million.

  3. Will PNC continue returning capital to shareholders at the same pace?

    Dividends are expected to continue, with a $1.55 quarterly dividend declared for February 2024. Share repurchases, however, are expected to stay modest in Q1 2024 because of proposed Federal banking agency rules that would change Basel III capital requirements. PNC still has about 45% of its authorized repurchase program available.

  4. What is the outlook for net interest income and margins?

    Net interest margin fell to 2.66% in Q4 from 2.71% in Q3 and 2.92% a year earlier, as funding costs rose faster than asset yields. PNC's baseline forecast assumes the federal funds rate stays at 5.25%–5.50% through mid-2024, with cuts starting in mid-2024 as a mild recession develops.

04—Continue

← View all 8-K filings