The PNC Financial Services Group, Inc. (NYSE:PNC) Q3 2020 Earnings Conference Call - Final Transcript

Oct 14, 2020 • 09:30 am ET


The PNC Financial Services Group, Inc. (NYSE:PNC) Q3 2020 Earnings Conference Call - Final Transcript


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Good morning, my name is Frank and I will be your conference operator today. At this time, I would like everyone -- welcome everyone to The PNC Financial Services Group Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].

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

Bryan Gill

Well, thank you and good morning everyone. Welcome to today's conference call for The PNC Financial Services Group. Participating on this call are PNC's Chairman, President and CEO, Bill Demchak; and Rob Reilly, Executive Vice President and CFO.

Today's presentation contains forward-looking information, cautionary statements about this information, as well as reconciliations of non-GAAP measures, are included in today's earnings release materials, as well as our SEC filings and other investor materials. These materials are all available on our corporate website,, under Investor Relations. These statements speak only as of October 14, 2020 and PNC undertakes no obligation to update them.

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

William S. Demchak

Thanks Bryan, and good morning everybody. Hope everybody is safe and well. You've seen that, amidst continued uncertainty on many fronts, PNC delivered solid third quarter results. We grew revenue led by non-interest income, which included a bounceback in consumer fees on higher volumes. We managed expenses, which allowed us to generate positive operating leverage of over 4% in both the quarter and year-to-date period, and our provision for credit losses was substantially less than last quarter.

On the flip side, net interest income fell from the second quarter given the low interest rate environment, and weak loan demand. Despite growth in customers and commitments, our loans outstanding declined due to lower utilization rates, including the pay-off of commercial lines of credit that were drawn early in the pandemic. And while we continue to experience strong deposit growth, the current environment has made it more challenging to put those deposits to work.

While the provision and charge-offs were down quarter-on-quarter, non-performers continue to rise, especially in the high impact COVID areas that Rob is going to discuss in a little bit more detail. Notwithstanding these challenges, we feel that PNC is well positioned, with very strong capital, liquidity and loan loss reserves. Needless to say, there are several significant upcoming events, including the next round of stress tests, the election and PPP forgiveness, that may impact the industry and our borrowers, which underscores the importance of our strong position. We're confident that the actions we've taken, position us to both support our clients and communities and take advantage of potential investment opportunities, if they arise, to enhance shareholder value.

I want to thank our employees, who despite the various challenges of the pandemic, continue to execute on our strategic priorities, including ongoing investments in our national expansion and digital offerings, all, while helping our customers navigate financial hardship and other challenges. During