NYSE$PNC

PNC Financial Services Group Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Reported a solid financial performance with strong credit quality metrics.

PNC Financial Services Group reported a net income of $1.5 billion for Q2 2023, with diluted EPS of $3.36. The company's capital position remained strong, and the board increased the quarterly common stock dividend by 5 cents to $1.55 per share.

  • Net income was $1.5 billion, and diluted EPS was $3.36.
  • Tangible book value increased to $77.80.
  • CET1 capital ratio increased 30 basis points to 9.5%.
  • The quarterly dividend was raised 5 cents to $1.55 per share.

Headline financials

Total Revenue

$5.29B

Previous: $5.12B+3.5%
EPS (adj)

$3.36

Previous: $3.42-1.8%
Net Interest Margin

2.8%

No prior period
ROA

1.1%

No prior period
Free Cash Flow

$1.5B

Previous: $1.5B+0.3%
Net Income

$1.5B

Previous: $1.5B+0.3%
Operating Income

$2.19B

Previous: $4.01B-45.3%
Gross Profit

$5.1B

Previous: $5.11B-0.0%
Cash & Equivalents

$44.5B

Previous: $8.58B+417.9%
Total Assets

$558B

Previous: $541B+3.2%

Revenue & EPS history

PNC · Revenue · Quarterly

$5.29B

Q2 2023+3.5%vs Q2 2022
Beat estimate in 10 of 15 quarters(67%)
ActualEstimate

Revenue by segment

PNC · $1.83B total across 3 segments · Q2 2023

  • Retail Banking
    $954M-60.4%
  • Corporate & Institutional
    $817M-63.2%
  • Asset Mgmt Group
    $63M-83.7%

Forward guidance

The economy is expected to continue expanding in the first half of 2023, but economic growth is slowing in response to the ongoing Federal Reserve monetary policy tightening to slow inflation. PNC's baseline outlook is for a mild recession starting in late 2023 or early 2024.

Tailwinds

  • The economy continues to expand in the first half of 2023.
  • Inflation will slow with weaker demand, moving back to the Federal Reserve's 2% objective by next year.
  • PNC expects federal funds rate cuts in response to the recession.
  • PNC's SCB for the four-quarter period beginning October 1, 2023 will improve to the regulatory minimum of 2.5%.
  • PNC maintained a strong capital position.

Headwinds

  • Economic growth is slowing in response to the ongoing Federal Reserve monetary policy tightening to slow inflation.
  • The housing market is already in contraction, with steep drops in existing home sales and single-family housing starts, and a modest decline in house prices.
  • PNC's baseline outlook is for a mild recession starting in late 2023 or early 2024, with a small contraction in real GDP of less than 1%, lasting into mid-2024.
  • The unemployment rate will increase in the second half of this year, ending 2023 at above 4%, and then peak slightly above 5% in early 2025.
  • Share repurchase activity is expected to be reduced in the third quarter of 2023 compared to recent prior quarters.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

-0.6%

Avg return

Earnings day

+0.2%

Avg return

5 days after

+2.3%

Avg return

30 days after

51%

37 / 73 earnings

Positive

+6.3%

Q2 2024

Best reaction

-9.0%

Q1 2020

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q4 2025+4.2%+2.6%-3.7%
Q1 2026+2.5%+2.6%-3.7%
Q3 2025-4.0%-4.0%-3.0%
Q2 2025+0.6%-0.2%+4.4%
Q1 2025+0.0%-1.9%+15.5%
Q4 2024-0.9%-0.9%-3.3%
Q3 2024+0.7%+0.5%+10.3%
Q2 2024+6.3%+3.8%+1.7%
Q1 2024-1.5%+1.8%+7.6%
Q4 2023-0.1%+2.2%+9.8%
Q3 2023-2.6%-4.6%-0.7%
Q2 2023+4.1%+5.6%-2.9%
Q1 2023+3.0%+5.7%-8.1%
Q4 2022-8.5%-1.6%-2.0%
Q3 2022+1.9%-0.8%+8.4%
Q2 2022+2.5%+6.1%+15.7%
Q1 2022-1.5%-0.2%-11.8%
Q4 2021-6.2%-9.6%-9.4%
Q3 2021-0.8%+5.1%+0.5%
Q2 2021+0.1%-6.1%+0.6%
Q1 2021+1.7%+0.2%+14.1%
Q4 2020-3.4%-3.2%+0.5%
Q3 2020-2.6%-2.2%+9.1%
Q2 2020+3.7%+1.7%+10.4%
Q1 2020-9.0%+3.1%-2.2%
Q4 2019-4.5%-4.1%-3.6%
Q3 2019+0.6%+2.6%+6.3%
Q2 2019+0.1%+0.6%-8.5%
Q1 2019+1.8%+4.0%+2.9%
Q4 2018+0.6%+3.4%+2.5%
Q3 2018-4.6%-3.3%+2.0%
Q2 2018+2.1%+3.2%+4.0%
Q1 2018-5.7%-7.1%-1.0%
Q4 2017+0.5%+1.8%+0.1%
Q3 2017-0.2%-0.4%-2.1%
Q2 2017+0.0%-0.7%+0.6%
Q1 2017+2.1%+0.4%+4.1%
Q4 2016-3.4%-1.4%+4.4%
Q3 2016+0.3%+4.2%+20.5%
Q2 2016-0.9%-0.3%+2.6%
Q1 2016-1.2%
Q4 2015-1.8%
Q3 2015-1.6%
Q2 2015+1.8%
Q1 2015-2.0%
Q4 2014+2.7%
Q3 2014-3.3%
Q2 2014-5.6%
Q1 2014+2.0%
Q4 2013+4.3%
Q3 2013+3.0%
Q2 2013+1.9%
Q1 2013+0.7%
Q4 2012+3.4%
Q4 2011-0.6%
Q3 2012-5.0%
Q2 2012-0.4%
Q1 2012+0.7%
Q3 2011-3.6%
Q2 2011-3.6%
Q1 2011+1.3%
Q4 2007-2.8%
Q4 2010-2.8%
Q3 2010-0.6%
Q2 2010-0.2%
Q1 2009+5.3%
Q1 2010+2.6%
Q4 2009+0.8%
Q3 2008+3.0%
Q3 2009+3.0%
Q2 2008-7.8%
Q4 2008-7.8%
Q2 2009-7.8%

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