The PNC Financial Services Group, Inc. (NYSE:PNC) Q4 2016 Earnings Conference Call - Final Transcript

Jan 13, 2017 • 11:00 am ET


The PNC Financial Services Group, Inc. (NYSE:PNC) Q4 2016 Earnings Conference Call - Final Transcript


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Good morning. My name is Nelson, and I will be your conference operator today. At this time, I would like to welcome everyone to The PNC Financial Services Group Earnings Conference Call. [Operator Instructions]. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].

I will now turn the call over to Director of Investor Relations, Mr. Bryan Gill. Please go ahead, sir.

Bryan Gill

Thank you, Nelson, and good morning. Welcome to today's conference call for The PNC Financial Services Group. Participating on the call are PNC's Chairman, President and Chief Executive Officer, Bill Demchak; and Rob Reilly, Executive Vice President and Chief Financial Officer.

Today's presentation contains forward-looking information. Our forward-looking statements regarding PNC performance assume a continuation of the current economic trends and do not take into account the impact of potential, legal and regulatory contingencies. Actual results and future events could differ, possibly materially, from those anticipated in our statements and from historical performance due to a variety of risks and other factors.

Information about such factors, as well as GAAP reconciliations and other information on non-GAAP financial measures we discuss, is included in today's conference call, earnings release and related presentation materials and in our 10-K, 10-Qs and various other SEC filings and investor materials. Well, these are all available on our corporate website,, under Investor Relations. These statements speak only as of January 13, 2017, and PNC undertakes no obligation to update them.

Now, I'd like to turn the call over to Bill Demchak.

William S. Demchak

Thanks, Bryan. Good morning, everybody. As you have seen today we reported full year 2016 results with net income of $4 billion or $7.30 per diluted common share. You should have also seen our tangible book value at year end was $67.41 per common share. All-in, '16 was a pretty solid year for PNC, we grew net interest and fee income. we kept expenses essentially flat and we returned more than $3 billion in capital to shareholders, and importantly, we grew our customer franchise.

Now, all that said, our net income finished slightly below 2015, in part due to our disciplined risk management efforts throughout the year to best position PNC in the current credit and interest rate environment. As we have learned over and over again through time, our business offers very attractive returns and growth opportunities by effectively managing through the cycles that are inherent to the banking industry. In our view for the most part in '16 neither the credit, and certainly, not the rate markets offered us an attractive risk or reward opportunity. So we maintained higher than usual cash balances and our loan growth trailed peers.

Now, as I discussed in-depth at a number of investor conferences in the last few months, we continue to invest and make important progress against our strategic priorities. We are particularly pleased with the progress that we have made on modernizing our core technology infrastructure and building a leading banking franchise in the Southeast.

As we look ahead, our