On October 13, 2023, PNC Financial Services Group Inc (PNC, Financial) released its Q3 2023 earnings report. The company reported a net income of $1.6 billion, marking an increase of $70 million or 5% from the previous quarter. Despite a 1% decline in revenue, the company managed to control expenses, which decreased by 4%. The company's CET1 capital ratio increased by 30 basis points to 9.8%.
Income Statement Highlights
The company's total revenue of $5.2 billion decreased by $60 million or 1% as higher noninterest income was more than offset by lower net interest income. Net interest income of $3.4 billion decreased by $92 million or 3%, as higher yields on interest-earning assets were more than offset by increased funding costs. Noninterest income of $1.8 billion increased by $32 million or 2%, primarily due to higher residential and commercial mortgage revenue.
Balance Sheet Highlights
Average loans of $319.5 billion decreased by $5.0 billion or 2%, driven by lower corporate banking balances. Average deposits of $422.5 billion decreased by $3.2 billion or 1%, as growth in commercial deposits was more than offset by lower consumer deposits. The company maintained a strong capital and liquidity position, with the Basel III common equity Tier 1 capital ratio estimated at 9.8% at the end of Q3 2023.
CEO Commentary
PNC delivered strong results in the third quarter. We generated positive operating leverage, controlled expenses well, maintained strong credit quality and further increased our capital levels. The strength of our balance sheet positions us well for the current economic environment, inclusive of proposed regulatory changes." - Bill Demchak, PNC Chairman, President and Chief Executive Officer
Looking Ahead
While the company did not provide specific forward-looking statements, the strong Q3 results and the CEO's commentary suggest that PNC is well-positioned to navigate the current economic environment. The company's focus on controlling expenses and maintaining strong credit quality, along with its increased capital levels, are likely to support its performance in the coming quarters.
