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| 8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC. | d889497d8k.htm |
 The PNC
Financial Services Group, Inc. RBC Capital Markets Financial Institutions Conference
March 10, 2015
Exhibit 99.1 |
 2
Cautionary Statement Regarding Forward-Looking
Information and Adjusted Information
This presentation includes “snapshot” information about PNC used by way of
illustration. It is not intended as a full business or financial review and should be
viewed in the context of all of the information made available by PNC in its SEC filings. The presentation also contains
forward-looking statements regarding our outlook for earnings, revenues, expenses, capital
and liquidity levels and ratios, asset levels, asset quality, financial position, and
other matters regarding or affecting PNC and its future business and operations. Forward-looking
statements are necessarily subject to numerous assumptions, risks and uncertainties, which
change over time. The forward-looking statements in this presentation are qualified
by the factors affecting forward-looking statements identified in the more detailed Cautionary
Statement included in the Appendix, which is included in the version of the presentation
materials posted on our corporate website at www.pnc.com/investorevents, and in our SEC
filings. We provide greater detail regarding these as well as other factors in our 2014 Form
10-K, including in the Risk Factors and Risk Management sections and in the Legal
Proceedings and Commitments and Guarantees Notes of the Notes To Consolidated Financial
Statements in that report, and in our subsequent SEC filings. Our forward-looking statements may also
be subject to other risks and uncertainties, including those we may discuss in this
presentation or in our SEC filings, accessible on the SEC’s website at www.sec.gov
and on PNC’s corporate website at www.pnc.com/secfilings. We have included web addresses in this presentation
as inactive textual references only. Information on those websites is not part of this
presentation. Future events or circumstances may change our outlook and may also affect
the nature of the assumptions, risks and uncertainties to which our forward-looking statements are
subject. Forward-looking statements in this presentation speak only as of the date of this
presentation. We do not assume any duty and do not undertake to update those
statements. Actual results or future events could differ, possibly materially, from those anticipated in
forward-looking statements, as well as from historical performance.
In this presentation, we may sometimes refer to non-GAAP financial metrics or to adjusted
results to help illustrate the impact of certain types of items. This information
supplements our results as reported in accordance with GAAP and should not be viewed in isolation from, or
as a substitute for, our GAAP results. We believe that this additional information and the
reconciliations we provide may be useful to investors, analysts, regulators and others
to help evaluate the impact of these respective items on our operations. Where applicable, we
provide GAAP reconciliations for such additional information, including in the slides, the
Appendix and/or other slides and materials on our corporate website at
www.pnc.com/investorevents and in our SEC filings. In certain discussions, we may also provide information on yields
and margins for all interest-earning assets calculated using net interest income on a
taxable-equivalent basis by increasing the interest income earned on tax-exempt
assets to make it fully equivalent to interest income earned on taxable investments. We believe this
adjustment may be useful when comparing yields and margins for all earning assets. We may also
use annualized, pro forma, estimated or third party numbers for illustrative or
comparative purposes only. These may not reflect actual results.
This presentation may also include discussion of other non-GAAP financial measures, which,
to the extent not so qualified therein or in the Appendix, is qualified by GAAP
reconciliation information available on our corporate website at www.pnc.com under “About Us–Investor
Relations,” which may include materials from other investor presentations or in our
annual, quarterly or current reports.
|
 Top 10 U.S.
Bank-Held Wealth Manager (1)
Asset Management Group 2014 Revenue Mix
Wealth
Management
71%
Hawthorn 7%
Institutional
22%
AUA
(2,3)
$263
6%
AUM
(2,3)
$135
6%
Total Avg. Loans
$7.3
6%
Total Avg. Deposits
$9.7
8%
Total Revenue
$1.1
6%
Noninterest
Income
$0.8
9%
Noninterest Income
to Total Revenue
74%
+200bps
ROAA
(4)
2.34%
+14bps
(1) Source: Barron’s wealth managers rankings, September 2014 based on client assets
under administration as of June 30, 2014. PNC top 10 ranking reflects the relative
comparison to U.S. bank-held wealth managers listed by Barron’s. (2) As of
December 31, 2014. (3) AUA defined as client assets under administration; and AUM defined as
discretionary assets under management. (4) ROAA refers to return on average
assets. Discretionary
Assets
Under
Management
(2)
$1.1
billion
Wealth
Management
42%
Hawthorn
22%
Institutional
Asset
Management
36%
$135
billion
Business Highlights
Distribution
Employees
3,500+
AMG Office Locations
100+
12/31/14
($ in billions)
FY14
FY14 vs. FY13
3 |
 Higher
Profitability equivalent
employees
of
AMG
at
December
31
st
.
(3)
Pretax
margin
defined
as
pretax
earnings
(total
revenue
less
provision
for
credit losses
and noninterest expense) divided by total revenue.
Consistent Total Revenue Growth
Total
Growing
Referral
Sales
(1)
Attractive Business with Strong Growth Momentum
Increasing
Productivity
Referral Sales
(1)
to Total
Sales
Revenue/FTE
(2)
Pretax Margin
(3)
$973
$1,040
$1,107
7%
CAGR
Asset Management Group (AMG)
35%
40%
43%
2012
2013
2014
$296
$297
$307
2012
2013
2014
$297
$288
$289
$676
$752
$818
2012
2013
2014
Net Interest Income
Noninterest Income
24%
25%
26%
2012
2013
2014
4
AMG does not include Retail Banking Brokerage business or BlackRock. (1) Referral sales are
new sales from clients referred to AMG from PNC, largely from Retail Banking, Corporate
& Institutional Banking and Residential Mortgage Banking. (2) FTE refers to full-time
|
 5
Cautionary Statement Regarding Forward-Looking
Information
This
presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial
review. It should not be viewed in isolation but rather in the context of all of the
information made available by PNC in its SEC filings.
We also make statements in this presentation, and we may from time to time make other
statements, regarding our outlook for earnings, revenues, expenses, capital and
liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or
affecting PNC and its future business and operations that are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act. Forward-looking
statements are typically identified by words such as “believe,” “plan,” “expect,” “anticipate,” “see,”
“look,” “intend,” “outlook,” “project,”
“forecast,” “estimate,” “goal,” “will,” “should” and other similar words and expressions.
Forward-looking statements are subject to numerous assumptions, risks and uncertainties,
which change over time. Forward-looking statements speak only as of the date made.
We do not assume any duty and do not undertake to update forward-looking statements. Actual
results or future events could differ, possibly materially, from those anticipated in
forward-looking statements, as well as from historical performance.
Our forward-looking statements are subject to the following principal risks and
uncertainties. Our
businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:
Appendix
Our forward-looking financial statements are subject to the risk that economic and
financial market conditions will be substantially different than we are currently
expecting. These statements are based on our current view that the U.S. economic expansion will speed up to an above
trend growth rate near 3.5 percent in 2015, boosted by lower oil/energy prices, and that
short-term interest rates and bond yields will rise only slowly in the latter half
of 2015. These forward-looking statements also do not, unless otherwise indicated, take into account the impact
of potential legal and regulatory contingencies.
–
Changes in interest rates and valuations in debt, equity and other financial markets. –
Disruptions in the liquidity and other functioning of U.S. and global financial markets. –
The impact on financial markets and the economy of any changes in the credit ratings of U.S.
Treasury obligations and other U.S. government-backed debt, as well as issues
surrounding the levels of U.S. and European government debt and concerns regarding the
creditworthiness of certain sovereign governments, supranationals and financial institutions in
Europe.
–
Actions by the Federal Reserve, U.S. Treasury and other government agencies, including those
that impact money supply and market interest rates. –
Changes in customers’, suppliers’ and other counterparties’ performance and
creditworthiness.
–
Slowing or reversal of the current U.S. economic expansion. –
Continued residual effects of recessionary conditions and uneven spread of positive impacts
of recovery on the economy and our counterparties, including adverse impacts on levels
of unemployment, loan utilization rates, delinquencies, defaults and counterparty
ability to meet credit and other obligations.
–
Changes in customer preferences and behavior, whether due to changing business and economic
conditions, legislative and regulatory initiatives, or other factors. |
 6
Cautionary Statement Regarding Forward-Looking
Information (continued)
PNC’s ability to take certain capital actions, including paying dividends and any plans
to increase common stock dividends, repurchase common stock under current or future
programs, or issue or redeem preferred stock or other regulatory capital instruments, is subject to the
review of such proposed actions by the Federal Reserve as part of PNC’s comprehensive
capital plan for the applicable period in connection with the regulators’
Comprehensive Capital Analysis and Review (CCAR) process and to the acceptance of such capital plan and non-
objection to such capital actions by the Federal Reserve.
PNC’s regulatory capital ratios in the future will depend on, among other things, the
company’s financial performance, the scope and terms of final capital regulations
then in effect (particularly those implementing the Basel Capital Accords), and management actions affecting the
composition of PNC’s balance sheet. In addition, PNC’s ability to determine,
evaluate and forecast regulatory capital ratios, and to take actions (such as capital
distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development,
validation and regulatory approval of related models.
Legal and regulatory developments could have an impact on our ability to operate our
businesses, financial condition, results of operations, competitive position,
reputation, or pursuit of attractive acquisition opportunities. Reputational impacts could affect matters such as business
generation and retention, liquidity, funding, and ability to attract and retain management.
These developments could include:
Changes resulting from legislative and regulatory reforms, including major reform of the
regulatory oversight structure of the financial services industry and changes to laws
and regulations involving tax, pension, bankruptcy, consumer protection, and other industry aspects,
and changes in accounting policies and principles. We will be impacted by extensive reforms
provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the
“Dodd-Frank Act”) and otherwise growing out of the most recent financial crisis, the precise
nature, extent and timing of which, and their impact on us, remains uncertain.
Changes to regulations governing bank capital and liquidity standards,
including due to the Dodd-Frank Act and to Basel-related initiatives.
Unfavorable resolution of legal proceedings or other claims and regulatory and other
governmental investigations or other inquiries. In addition to matters relating to
PNC’s current and historical business and activities, such matters may include proceedings, claims,
investigations, or inquiries relating to pre-acquisition business and activities of
acquired companies, such as National City. These matters may result in monetary
judgments or settlements or other remedies, including fines, penalties, restitution or alterations in our business
practices, and in additional expenses and collateral costs, and may cause reputational harm
to PNC.
Results of the regulatory examination and supervision process, including our failure to
satisfy requirements of agreements with governmental agencies.
Impact on business and operating results of any costs associated with obtaining rights in
intellectual property claimed by others and of adequacy of our intellectual property
protection in general.
Appendix |
 7
Cautionary Statement Regarding Forward-Looking
Information (continued)
Appendix
Business and operating results are affected by our ability to identify and effectively manage
risks inherent in our businesses, including, where appropriate, through effective use
of third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital and liquidity
standards. In particular, our results currently depend on our ability to manage elevated
levels of impaired assets. Business
and operating results also include impacts relating to our equity interest in BlackRock, Inc. and rely to a significant extent on information
provided to us by BlackRock. Risks and uncertainties that could affect BlackRock are discussed
in more detail by BlackRock in its SEC filings.
We grow our business in part by acquiring from time to time other financial services
companies, financial services assets and related deposits and other liabilities.
Acquisition risks and uncertainties include those presented by the nature of the business acquired, including in some cases those associated with
our entry into new businesses or new geographic or other markets and risks resulting from our
inexperience in those new areas, as well as risks and uncertainties related to the
acquisition transactions themselves, regulatory issues, and the integration of the acquired businesses into PNC after closing.
Competition can have an impact on customer acquisition, growth and retention and on credit
spreads and product pricing, which can affect market share, deposits and revenues.
Industry restructuring in the current environment could also impact our business and financial performance through changes in
counterparty creditworthiness and performance and in the competitive and regulatory landscape.
Our ability to anticipate and respond to technological changes can also impact our
ability to respond to customer needs and meet competitive demands.
Business and operating results can also be affected by widespread natural and other disasters,
pandemics, dislocations, terrorist activities, cyberattacks or international
hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically.
We provide greater detail regarding these as well as other factors in our 2014 Form 10-K,
including in the Risk Factors and Risk Management sections and the Legal Proceedings
and Commitments and Guarantees Notes of the Notes To Consolidated Financial Statements in that report, and in our subsequent SEC
filings. Our forward-looking statements may also be subject to other risks and
uncertainties, including those we may discuss elsewhere in this presentation or in our
SEC filings, accessible on the SEC’s website at www.sec.gov and on our corporate website at www.pnc.com/secfilings. We have included these web
addresses as inactive textual references only. Information on these websites is not part of
this document. Any annualized, pro
forma, estimated, third party or consensus numbers in this presentation are used for illustrative or comparative purposes only and may
not reflect actual results. Any consensus earnings estimates are calculated based on the
earnings projections made by analysts who cover that company. The analysts’
opinions, estimates or forecasts (and therefore the consensus earnings estimates) are theirs alone, are not those of PNC or its management, and
may not reflect PNC’s or other company’s actual or anticipated results. |