Core Insights - The PNC Financial Services Group reported a revenue of $6.1 billion for the quarter ended December 2025, reflecting a year-over-year increase of 9.6% and surpassing the Zacks Consensus Estimate of $5.96 billion by 2.4% [1] - Earnings per share (EPS) for the quarter was $4.88, an increase from $3.77 in the same quarter last year, although it did not meet the consensus EPS estimate of $4.23 [1] Financial Performance Metrics - Net interest margin was reported at 2.8%, slightly below the average estimate of 2.9% from seven analysts [4] - Net charge-offs to average loans stood at 0.2%, better than the 0.3% average estimate [4] - Total interest-earning assets averaged $520.78 billion, compared to the estimated $523.16 billion [4] - Book value per common share was $140.44, exceeding the average estimate of $137.02 [4] - Total nonperforming assets were reported at $2.36 billion, matching the average estimate [4] - Efficiency ratio was 59%, in line with the average estimate of 59.2% [4] - Total nonperforming loans were $2.22 billion, better than the estimated $2.29 billion [4] - Leverage ratio was 9.4%, slightly above the average estimate of 9.3% [4] - Tier 1 risk-based ratio was 11.9%, below the average estimate of 12.1% [4] - Total capital risk-based ratio was 13.5%, lower than the estimated 14.1% [4] - Net interest income (Fully Taxable-Equivalent - FTE) was $3.76 billion, slightly above the average estimate of $3.74 billion [4] - Total noninterest income reached $2.34 billion, exceeding the average estimate of $2.21 billion [4] Stock Performance - Shares of The PNC Financial Services Group have returned +2.6% over the past month, outperforming the Zacks S&P 500 composite's +2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

The PNC Financial Services Group (NYSE:PNC) Q4 2025 Earnings call January 16, 2026 09:00 AM ET Company ParticipantsBetsy Graseck - Global Head of Banks and Diversified Finance ResearchGerard Cassidy - Managing DirectorMatt O'Connor - Managing DirectorMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchRob Reilly - EVP and CFOSteven Chubak - Managing DirectorChris McGratty - Managing DirectorEbrahim Poonawala - Managing Director and Head of North American Banks Research (US and Canadian Ban ...

The PNC Financial Services Group (NYSE:PNC) Q4 2025 Earnings call January 16, 2026 09:00 AM ET Company ParticipantsBetsy Graseck - Global Head of Banks and Diversified Finance ResearchGerard Cassidy - Managing DirectorMatt O'Connor - Managing DirectorMike Mayo - Managing Director and Head of U.S. Large-Cap Bank ResearchRob Reilly - EVP and CFOSteven Chubak - Managing DirectorChris McGratty - Managing DirectorEbrahim Poonawala - Managing Director and Head of North American Banks Research (US and Canadian Ban ...

Financial Data and Key Metrics Changes - PNC reported a net income of $7 billion for 2025, translating to $16.59 per share, with a 21% growth in EPS and a 5% operating leverage [3][9] - Total revenue increased by $1.5 billion, or 7%, driven by record net interest income and non-interest income [8][9] - The tangible book value rose to $112.51 per common share, marking a 4% increase linked quarter and an 18% increase year-over-year [5] Business Line Data and Key Metrics Changes - Loan balances averaged $328 billion, up $2 billion, or 1%, linked quarter, primarily driven by higher commercial balances [5][6] - Commercial loans grew by $10 billion, or 5%, while consumer loans declined by $1 billion, or 1% [7][8] - Non-interest income for the full year reached $8.7 billion, an increase of $633 million, or 8%, compared to 2024 [11] Market Data and Key Metrics Changes - Deposit balances averaged $440 billion, an increase of $8 billion, or 2%, with non-interest-bearing balances representing 22% of total average deposits [5][8] - The effective tax rate for the fourth quarter was 12.7%, reflecting favorable resolutions of tax matters [9] Company Strategy and Development Direction - PNC aims to enhance growth through the integration of First Bank, expecting it to contribute approximately $1 per share to 2027 results [4][15] - The company is pursuing a significant investment agenda, including technology initiatives and branch expansions, while maintaining capital flexibility [4][27] - PNC anticipates achieving substantial operational efficiencies from the First Bank acquisition, with a projected internal rate of return of approximately 25% [15] Management's Comments on Operating Environment and Future Outlook - Management expects continued economic growth in 2026, with a projected real GDP growth of approximately 2% and unemployment near 4.5% [16] - The company forecasts full-year average loan growth of approximately 8% and total revenue growth of about 11% for 2026 [16][17] - Management expressed optimism regarding the capital markets outlook, noting increased activity in middle market investments and M&A [41] Other Important Information - PNC returned $1.1 billion of capital to shareholders during the quarter, with common dividends of $676 million and share repurchases of approximately $400 million [5][6] - The company successfully completed the First Bank acquisition, which is expected to enhance its presence in high-growth communities [13][15] Q&A Session Summary Question: Clarification on share repurchase guidance - Management confirmed that the expected quarterly share repurchase pace of $600 million to $700 million is anticipated to continue through 2026 [20] Question: CET1 ratio and ROTCE targets - The CET1 ratio is expected to decrease to around 10.2%-10.3% post-acquisition, with a medium-term ROTCE target projected to be around 18% [21][23] Question: NII momentum for the year - Management indicated that standalone NII growth is expected to be between 7.5%-8%, comfortably above previous guidance [24] Question: Deposit costs outlook - Management expects deposit costs to decrease further, particularly with anticipated Fed rate cuts [25] Question: Investment trajectory in technology and branches - Management highlighted record investment in technology, with a focus on AI and automation to drive efficiencies [27][28] Question: Loan growth assumptions - The company projects approximately 4% loan growth on a standalone basis, with optimism for C&I and stabilization in CRE [51] Question: Capital markets outlook - Management expects capital markets fees to grow in the high single digits, driven by increased M&A activity [40][42]

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Market Overview - U.S. stock futures are showing a positive trajectory, with major indexes expected to gain at the open due to strong corporate earnings and optimism in the AI sector [1][2] - The S&P 500 futures are up approximately 0.2% to 0.4%, Nasdaq 100 futures are leading with gains of around 0.5% to 0.6%, and Dow Jones futures are slightly higher, indicating a positive sentiment in the market [2] Oil and Treasury Yields - Oil prices have rebounded, with U.S. crude (WTI) trading around $59.95 per barrel and Brent crude at approximately $64.69 per barrel, both up around 1.5% following easing tensions in Iran [3] - U.S. Treasury yields are mixed, with the benchmark 10-year Treasury yield steady near 4.17% [3] Recent Trading Performance - Major U.S. indexes closed positively on Thursday, with the S&P 500 climbing approximately 0.3% to 6,944.47 points, Nasdaq Composite advancing around 0.2% to 23,530.02 points, and Dow Jones gaining about 0.6% to 49,442.44 points [4] - Despite recent gains, the major indexes are on track for weekly losses, with the S&P 500 down roughly 0.3%, Nasdaq off about 0.6%, and Dow Jones seeing a modest decline of approximately 0.1% [5] Upcoming Earnings Reports - The fourth-quarter earnings season is concluding, with several regional U.S. banks, including PNC Financial Services Group, M&T Bank, and State Street, set to report their quarterly results [6] Economic Data Releases - China is expected to report its 2025 economic growth data on Monday, forecasting an annual pace of around 4.5% [7] - U.S. inflation figures for December, including CPI and Core CPI, are scheduled for release next Tuesday, along with Industrial Production and Capacity Utilization data [7] AI Sector Developments - The AI sector is a significant market driver, with chip stocks like Nvidia and AMD seeing gains due to strong demand [8] - Taiwan Semiconductor Manufacturing's shares jumped over 4% following robust fourth-quarter results, further boosting optimism around AI [8] Banking Sector Performance - PNC Financial Services Group surged 3.2% to 3.5% in premarket trading after exceeding fourth-quarter targets, driven by higher interest income and fees [9] - M&T Bank also rose 1% after surpassing analyst forecasts, while Goldman Sachs and Morgan Stanley reported strong quarterly results, with shares surging over 4% and nearly 6%, respectively [10] Corporate News - Mitsubishi Corporation announced its acquisition of Aethon for approximately $5.2 billion [12] - Chevron Corporation reached a Final Investment Decision to expand production capacity at the Leviathan natural gas reservoir offshore Israel [12] - A U.S.-Taiwan trade deal involves $250 billion in new investments by Taiwanese semiconductor and tech companies in the U.S., aimed at strengthening the semiconductor supply chain [13]

Financial Performance - Full Year 2025 - Net income reached $7.0 billion, resulting in diluted earnings per share of $16.59[7] - Total revenue increased by 7% year-over-year, driven by record net interest income (NII) and noninterest income[8] - Pretax, pre-provision earnings (PPNR) increased by 15% year-over-year (non-GAAP)[8] - The company achieved 5% positive operating leverage due to well-controlled expenses[8] Balance Sheet and Credit Quality - Total loans averaged $327.9 billion, a 3% increase year-over-year[9] - Total deposits averaged $439.5 billion, a 3% increase year-over-year[9] - The net loan charge-off ratio was 0.20%[8] FirstBank Acquisition - The acquisition of FirstBank closed on January 5, 2026, with a total consideration of $4.2 billion[8, 27] - FirstBank brings $16 billion in total loans and $23 billion in total deposits[28] Outlook for 2026 - Average loans are expected to increase by approximately 8%[31] - Net interest income is projected to increase by around 14%[31] - Total revenue is forecasted to increase by about 11%[31]

Core Viewpoint - PNC reported an increase in fourth-quarter profit driven by loan growth and heightened demand for its financial services [1] Group 1: Financial Performance - The company experienced higher profits in the fourth quarter compared to previous periods, indicating strong financial health [1] - Loan growth was a significant contributor to the profit increase, reflecting a robust lending environment [1] - Increased demand for financial services further supported the company's profitability during this period [1]

Financial Performance - PNC reported a net income of $2,033 million for Q4 2025, an increase from $1,822 million in Q3 2025, representing a 12% quarter-over-quarter growth[7] - Total revenue for Q4 2025 was $6,071 million, up from $5,915 million in Q3 2025, marking a 2.6% increase[7] - Basic earnings per common share increased to $4.88 in Q4 2025, compared to $4.36 in Q3 2025, representing a 11.9% increase[7] - The company reported a net income excluding noncontrolling interests of $2,020 million in Q4 2025, an increase from $1,808 million in Q3 2025, reflecting an 11.7% growth[31] - Total revenue for the year ended December 31, 2025, was $14,863 million, compared to $14,547 million in 2024, reflecting a year-over-year increase of 2.2%[33] Revenue Breakdown - Net interest income for Q4 2025 was $3,731 million, compared to $3,648 million in Q3 2025, reflecting a 2.3% increase[7] - Noninterest income reached $2,340 million in Q4 2025, an increase from $2,267 million in Q3 2025, which is a 3.2% rise[7] - Noninterest income for Q4 2025 was $770 million, up from $706 million in Q4 2024, marking a growth of 9.1% year-over-year[33] - Total revenue for Corporate & Institutional Banking was $3,066 million in Q4 2025, compared to $2,909 million in Q3 2025, representing a 5.4% increase[31] Asset and Liability Management - PNC's total assets reached $550 billion as of December 31, 2025, reflecting growth in its balance sheet size[4] - Total assets increased to $573.572 billion as of December 31, 2025, up from $568.767 billion in the previous quarter, representing a growth of 1.4%[9] - Total liabilities increased to $512.936 billion from $509.729 billion, reflecting a growth of 0.4%[9] - Total assets as of December 31, 2025, amounted to $575.846 billion, an increase from $571.533 billion on September 30, 2025[11] Loan and Deposit Growth - Net loans reached $327.071 billion, an increase from $322.138 billion in the prior quarter, reflecting a growth of 1.5%[9] - Total deposits rose to $440.866 billion, compared to $432.749 billion in the previous quarter, marking an increase of 1.0%[9] - Total deposits reached $244,066 million in Q4 2025, compared to $239,514 million in Q4 2024, showing an increase of 1.9% year-over-year[33] Credit Quality and Loss Provisions - The provision for credit losses was $139 million in Q4 2025, down from $167 million in Q3 2025, indicating improved credit quality[7] - The allowance for loan and lease losses decreased slightly to $4.410 billion from $4.478 billion, indicating improved asset quality[9] - The total provision for credit losses for the year ended December 31, 2025, was $779 million, slightly down from $789 million in 2024[18] - Total gross charge-offs for the year ended December 31, 2025, amounted to $1,176 million, while total recoveries were $432 million, resulting in net charge-offs of $744 million[16] Nonperforming Assets - Total nonperforming assets increased to $2,361 million as of December 31, 2025, up from $2,299 million in the previous quarter[20] - Nonperforming loans to total loans ratio rose to 0.67% from 0.65% in the prior quarter[20] - Total nonperforming loans reached $2,218 million, up from $2,137 million in the previous quarter[20] - Total accruing loans past due 90 days or more increased to $380 million in December 2025 from $347 million in September 2025, representing a 9.5% increase[26] Efficiency and Cost Management - The efficiency ratio improved to 59% in Q4 2025, consistent with Q3 2025, indicating stable operational efficiency[7] - The efficiency ratio improved to 53% in Q4 2025 from 57% in Q4 2024, indicating better cost management[34] - Total noninterest expense for Q4 2025 was $1,107 million, an increase from $976 million in Q3 2025, representing a 13.4% rise[39] Employee and Operational Metrics - Total full-time employees increased to 53,859 in December 2025 from 53,523 in September 2025, reflecting a growth of 0.6%[29] - Loan origination volume for Q4 2025 was $1.6 billion, compared to $1.0 billion in Q1 2025, showing a significant increase of 60%[34] Investment and Equity - Total shareholders' equity increased to $60.585 billion, up from $58.990 billion in the previous quarter, a growth of 2.7%[9] - Client assets under administration totaled $472 billion as of December 31, 2025, an increase from $440 billion at the end of 2024, reflecting a growth of 7.3%[44]

Core Insights - PNC Financial's profit increased by 25% in the fourth quarter, driven by higher interest payments and a rebound in dealmaking activity [1] Financial Performance - The bank's earnings were significantly boosted by increased interest income, reflecting a favorable interest rate environment [1] - The resurgence in dealmaking contributed to the profit growth, indicating a recovery in investment banking activities [1]