PNC Financial Services Group, Inc. (The)

Good morning, and welcome to today's conference call for the PNC Financial Services Group. Participating on this call are PNC's Chairman, President and CEO, Bill Domchek, and Rob Riley, 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, pnc.com, under Investor Relations. These statements speak only as of July 15, 2022, and P&C undertakes no obligation to update them. Now, I'd like to turn the call over to Bill.

Thanks, Brian, and good morning, everybody. As you've seen, we had a strong second quarter highlighted by 9% revenue growth and solid positive operating leverage resulting in PPNR growth of 23%. We maintained strong credit quality and fees rebounded from the first quarter, driven primarily by capital markets activity, including Harris-Williams, and continued growth in card and cash management. Strong loan growth and rising rates helped us to increase both net interest income and net interest margin meaningfully. Loan growth was driven by CNI, where new production increased significantly and utilization returned to near pre-pandemic levels. Consumer loans also grew, driven by mortgage and home equity. Higher rates continued to adversely impact the unrealized value of our securities book. In response, we continued to reposition the portfolio during the quarter, resulting in 60% of our securities portfolio now being held and held to maturity. We returned $1.4 billion of capital to shareholders during the quarter through share repurchases and dividends. Looking forward, there is uncertainty in the environment we're operating in, including the impact of higher rates, supply chain disruptions and inflation. But regardless of the path ahead macroeconomically, we believe having a strong balance sheet, a solid mix of fee-based businesses, continued focus on expense management and differentiated strategies for organic growth will continue to provide the foundation for our success. And our focus is on executing the things we can control and not getting distracted by what is beyond our control. Along those lines, we delivered well on our strategic priorities in the quarter, including the build-out of our new BBVA and expansion markets, modernizing our retail banking technology platform, bolstering our asset management offering, and building differentiated and responsible capabilities for our retail and commercial customers in the payment space. As I've talked about recently at conferences, our performance in the BBVA markets has exceeded our own expectations. On slide three, you can see that the strong growth we've generated in these markets across customer segments. In corporate banking, we've seen sales increase 40% link quarter and maintained a 50% non-credit mix of sales since conversion. We've seen similar growth within commercial banking where sales in the BBVA USA markets are up 32% link quarter and non-credit sales to total sales have been approximately 55% since conversion. In retail banking, we've experienced a notable increase in sales for both small businesses and consumers of 16% and 22%, respectively. And we continue to invest in AMG, and a big part of that is building a strong customer-focused team that can deliver our brand across our footprint. We have built good momentum in our recruiting efforts over the past few quarters, hiring advisors across all areas of the business to help deliver for our clients. I'll close by thanking our employees for their hard work and dedication to our customers and communities. Moving forward, we believe that we're well-positioned to continue to grow shareholder value.

And with that, I'll turn it over to Rob for a closer look at our results, and then we'll take your questions. Well, thanks, Bill, and good morning, everyone.