Group 1 - PNC Financial Services Group, Inc. will have its Executive Vice President and Chief Financial Officer Robert Q. Reilly discuss business performance and strategy at the UBS Financial Services Conference on February 11, 2025 [1] - The event will be accessible via a live webcast, with related materials and a replay available for 30 days [2] - PNC is one of the largest diversified financial services institutions in the United States, offering a range of services including retail and business banking, corporate banking, real estate finance, asset-based lending, wealth management, and asset management [3]

Group 1 - PNC Financial is a conservatively-run bank that may not be the top choice for investors when market sentiment shifts to "risk on" [1] - Despite this, PNC Financial continues to perform well and grow as a top-10 bank [1]

Executive Transition - Michael P Lyons, President of PNC Financial Services Group, is departing to assume the President & CEO-Elect role at Fiserv [1] - Lyons joined PNC in 2011 as head of Corporate & Institutional Banking and was named president in 2024 [1] Leadership Impact - Lyons has been with PNC for 13 years and played a key role in the company's growth and success [2] - PNC Chairman and CEO William S Demchak expressed confidence in the leadership team's ability to continue the company's journey to becoming one of the largest and most successful banks in the US [2] Company Overview - PNC Financial Services Group is one of the largest diversified financial services institutions in the US [2] - The company offers a full range of retail and business banking services, including lending products, specialized services for corporations and government entities, wealth management, and asset management [2]

Core Insights - The article compares two stocks in the Financial - Investment Bank sector: PNC Financial Services Group, Inc (PNC) and Tradeweb Markets (TW), to determine which offers better value opportunities for investors [1] Valuation Metrics - PNC has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to TW, which has a Zacks Rank of 3 (Hold) [3] - PNC's forward P/E ratio is 13.01, significantly lower than TW's forward P/E of 38.47, suggesting PNC may be undervalued [5] - PNC's PEG ratio is 1.61, while TW's PEG ratio is 1.93, indicating PNC's expected earnings growth is more favorable relative to its price [5] - PNC's P/B ratio stands at 1.45, compared to TW's P/B of 4.81, further supporting PNC's valuation as more attractive [6] - These metrics contribute to PNC's Value grade of B, while TW has a Value grade of F, highlighting PNC's superior valuation [6] Earnings Outlook - PNC is noted for its improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, suggesting it is the superior value option at this time [7]

Core Insights - PNC Financial reported better than expected fourth-quarter earnings, highlighting an EPS beat, stronger net interest income, and high bank profitability [1] - The growth in PNC Financial's book value is attributed to the expansion of its core lending business and the absence of certain negative factors [1] Financial Performance - The fourth-quarter earnings included a notable increase in net interest income, contributing to the overall profitability of the bank [1] - PNC Financial's earnings per share (EPS) exceeded market expectations, indicating strong financial performance [1] Business Growth - The core lending business of PNC Financial has shown significant growth, which has positively impacted the company's book value [1] - The absence of negative factors has also played a role in the growth of PNC Financial's book value [1]

Group 1 - The core viewpoint of the article highlights PNC Financial Services Group's strong fourth-quarter performance, with a revenue increase of 4% year-over-year to $5.57 billion, surpassing the consensus estimate of $5.50 billion, driven by higher net interest income and noninterest income [1] - The analyst notes potential upside in net interest income due to anticipated loan growth and a steepening yield curve, which could enhance fixed asset repricing and support NII growth through 2026 [2] - The company is building capital effectively, with a CET1 ratio of 10.5%, significantly above the regulatory minimum of 7.0%, leading to expectations of increased share buybacks starting at $200 million in Q4 2024 [3] Group 2 - The analyst has slightly reduced the 2026 earnings per share estimates by 1%, setting new EPS targets of $15.05 for 2025 and $17.09 for 2026, while introducing a 2027 EPS estimate of $18.76 [4] - PNC shares experienced a minor decline of 0.33%, trading at $197.87 [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: The PNC Financial Services Group, Inc (PNC) - PNC currently holds a Momentum Style Score of A, indicating strong momentum characteristics [3] - The company has a Zacks Rank of 2 (Buy), suggesting a favorable outlook based on historical performance metrics [4] Performance Metrics - Over the past week, PNC shares increased by 5.04%, while the Zacks Financial - Investment Bank industry rose by 7.51% [6] - In a longer timeframe, PNC's shares have gained 4.59% over the past quarter and 32.87% over the last year, outperforming the S&P 500's gains of 2.54% and 25.42%, respectively [7] Trading Volume - PNC's average 20-day trading volume is 1,666,541 shares, which serves as a baseline for assessing price movements [8] Earnings Outlook - In the last two months, 8 earnings estimates for PNC have been revised upwards, while only 1 has been revised downwards, leading to an increase in the consensus estimate from $14.73 to $15.20 [10] - For the next fiscal year, 5 estimates have moved up, with 2 downward revisions noted [10] Conclusion - Given the strong performance metrics and positive earnings outlook, PNC is positioned as a promising investment opportunity with a Momentum Score of A [12]

Company Overview - The PNC Financial Services Group, Inc is headquartered in Pittsburgh and operates in the Finance sector [3] - The stock has experienced a price change of 1.91% since the beginning of the year [3] Dividend Information - PNC currently pays a dividend of $1.6 per share, resulting in a dividend yield of 3.26% [3] - The Financial - Investment Bank industry's average yield is 0.88%, while the S&P 500's yield is 1.51% [3] - The company's annualized dividend of $6.40 has increased by 1.6% from the previous year [4] - Over the past five years, PNC has raised its dividend four times, averaging an annual increase of 9.10% [4] - The current payout ratio is 48%, indicating that PNC paid out 48% of its trailing 12-month EPS as dividends [4] Earnings Expectations - PNC is anticipating earnings growth for the fiscal year, with the Zacks Consensus Estimate for 2025 at $14.96 per share, reflecting a 7.55% increase from the previous year [5] Investment Considerations - PNC is considered a compelling investment opportunity due to its strong dividend performance and current Zacks Rank of 3 (Hold) [7]

Core Insights - PNC Financial Service Group is set to launch a new online banking platform to enhance its digital services alongside expanding its physical branch network [1][2] - The new platform will be cloud-native and micro service-based, aimed at improving customer navigation and self-service capabilities [2][3] - PNC plans to open 200 new branches and renovate 1,400 existing branches over the next five years, an increase from previous plans of 100 new branches and 1,200 renovations [3][4] Expansion Plans - Currently, PNC operates over 2,200 branches and 60,000 ATMs, with ongoing efforts to expand in high-growth regions [4] - The bank is entering new markets, including Salt Lake City, and expanding in South Florida, Texas, Arizona, and Colorado [4] - The investment in new branches and technology is positioned as a strategy for organic growth rather than a response to past shortcomings [5]

Financial Data and Key Metrics Changes - For the full year 2024, the company earned $6 billion, or $13.74 per share, achieving record revenue [5][6] - Net interest income grew by $113 million or 3% in Q4, with a net interest margin of 2.75%, an increase of 11 basis points [25][26] - The tangible book value per share increased by 12% compared to the previous year, reaching $95.33 [16][7] - The company returned approximately $900 million of capital to shareholders during the quarter through dividends and share repurchases [16][7] Business Line Data and Key Metrics Changes - Fee income grew by 6% for the year, with record revenue in the Corporate and Institutional Banking (CNIB) segment [6][8] - Retail banking saw consumer DDA growth at its highest in eight years, with record brokerage revenue at PNC Investments [9] - Non-interest income for Q4 was $2 billion, a 1% increase, while total revenue for the year was $21.6 billion [28][25] Market Data and Key Metrics Changes - Average loan balances remained stable at $319 billion, with a yield on total loans decreasing by 26 basis points to 5.87% [18][14] - Average deposits increased by $3 billion, or 1%, reflecting growth in interest-bearing commercial balances [24] - The cumulative deposit beta through December was 47%, with expectations for it to remain in the high 40% range during the anticipated rate-cutting cycle [24] Company Strategy and Development Direction - The company plans to double new branch builds to gain scale in fast-growing regions and is entering the Salt Lake City market [10][9] - Investments in new products and an expanded footprint are aimed at accelerating momentum, including a new online banking platform [9][10] - The company is focused on maintaining expense discipline while delivering positive operating leverage [11][7] Management's Comments on Operating Environment and Future Outlook - Management expects continued economic growth in 2025, with approximately 2% real GDP growth and unemployment slightly above 4% [40] - The company anticipates two rate cuts in 2025, which will impact net interest income [41][40] - There are uncertainties regarding the economic outlook, but the company believes its balance sheet is well-positioned [11][12] Other Important Information - Non-performing loans decreased by 10% linked quarter, while total delinquencies increased by 8% [35] - The company is adequately reserved for credit risk, with an allowance for credit losses totaling $5.2 billion [37][36] - The company has a high liquidity position, with a cash balance at the Federal Reserve of $38 billion [14][16] Q&A Session Summary Question: Industry deposit growth and trends in 2025 - Management expects industry deposits to grow slightly by 1% to 2% in 2025, with organic efforts in expansion markets performing well [47][48] Question: NII guidance and drivers - The guidance for NII is conservative, with expectations for a decline in the first quarter due to fewer days and lower seasonal commercial deposits [50][52] Question: Demand for lines of credit - Management noted that demand for capital is low across all segments, with utilization rates decreasing despite strong originations [85][104] Question: Fee income growth outlook - Fee income is expected to grow by approximately 5% in 2025, driven by various segments including asset management and capital markets [78][77] Question: Capital buyback plans - The company plans to sustain buybacks at levels between $100 million and $200 million, depending on loan growth [80][79] Question: Regulatory environment and M&A opportunities - Management believes it is easier to get deals approved but notes that many banks are currently not looking to sell, making acquisitions challenging [163][164]