PNC(US:PNC)2025-10-15 10:39Business Overview PNC is a leading diversified financial services company in the U.S., expanding its national presence through core services and a significant acquisition Company Profile PNC is a leading diversified financial services company in the U.S., offering retail banking, corporate and institutional banking, and asset management services nationally and through strategic international offices - PNC is one of the largest diversified financial services companies in the United States, headquartered in Pittsburgh, Pennsylvania4 - PNC's businesses include retail banking, corporate and institutional banking, and asset management, providing products and services nationally with a coast-to-coast retail branch network and strategic international offices in four countries4 Pending Acquisition of FirstBank Holding Company PNC announced a definitive agreement to acquire FirstBank Holding Company for an implied consideration of $4.1 billion, significantly expanding its branch network in Colorado and Arizona - On September 8, 2025, PNC announced a definitive agreement to acquire FirstBank Holding Company, including its banking subsidiary FirstBank, for an implied consideration of $4.1 billion5 - FirstBank operates 95 branches, with a leading position in Colorado and a substantial presence in Arizona, and had $26.8 billion in assets as of June 30, 20255 - The acquisition is expected to more than triple PNC's branch network in Colorado to 120 and increase its presence in Arizona to over 70 branches, with closing anticipated in early 20265 Consolidated Financial Results PNC reported strong Q3 2025 financial results with increased revenue and net income, balance sheet growth, and improved net interest margin YoY Consolidated Income Statement PNC reported a strong third quarter 2025, with total revenue increasing by 4.49% QoQ and 8.89% YoY, driven by growth in both net interest income and noninterest income. Net income saw a significant increase of 10.90% QoQ and 21.06% YoY, while the provision for credit losses decreased Consolidated Income Statement Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Net Interest Income | $3,648 | $3,555 | $3,410 | 2.62% | 6.98% | | Noninterest Income | $2,267 | $2,106 | $2,022 | 7.64% | 12.12% | | Total Revenue | $5,915 | $5,661 | $5,432 | 4.49% | 8.89% | | Provision For Credit Losses | $167 | $254 | $243 | -34.25% | -31.28% | | Net Income | $1,822 | $1,643 | $1,505 | 10.90% | 21.06% | | Diluted EPS | $4.35 | $3.85 | $3.49 | 13.00% | 24.64% | | Efficiency Ratio | 59% | 60% | 61% | -1 pp | -2 pp | - Net income attributable to common shareholders increased to $1,735 million in Q3 2025, up from $1,542 million in Q2 2025 and $1,406 million in Q3 20247 - The effective tax rate for Q3 2025 was 20.3%, compared to 18.8% in Q2 2025 and 19.2% in Q3 20247 Consolidated Balance Sheet PNC's total assets grew by 1.73% QoQ and 0.69% YoY to $568.77 billion as of September 30, 2025. This growth was supported by increases in total loans and deposits, while total equity also saw a healthy increase Consolidated Balance Sheet Highlights (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Assets | $568,767 | $559,107 | $564,881 | 1.73% | 0.69% | | Total Loans | $326,616 | $326,340 | $321,381 | 0.08% | 1.63% | | Total Deposits | $432,749 | $426,696 | $423,966 | 1.42% | 2.07% | | Total Liabilities | $509,729 | $501,452 | $509,152 | 1.65% | 0.11% | | Total Equity | $59,038 | $57,655 | $55,729 | 2.40% | 5.94% | - Interest-earning deposits with banks increased to $33.32 billion as of September 30, 2025, from $24.46 billion as of June 30, 20259 - Noninterest-bearing deposits decreased slightly to $91.21 billion as of September 30, 2025, from $93.25 billion as of June 30, 20259 Average Consolidated Balance Sheet The average consolidated balance sheet for Q3 2025 showed an increase in total assets and interest-earning assets QoQ, while average total loans and interest-bearing deposits also increased, reflecting overall balance sheet expansion Average Consolidated Balance Sheet Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Assets | $571,533 | $561,686 | $569,513 | 1.75% | 0.35% | | Total Interest-Earning Assets | $518,129 | $507,607 | $516,144 | 2.07% | 0.38% | | Total Loans | $325,932 | $322,754 | $319,602 | 0.98% | 1.98% | | Total Interest-Bearing Deposits | $339,072 | $329,833 | $326,311 | 2.79% | 3.91% | | Total Equity | $57,768 | $56,476 | $53,913 | 2.29% | 7.15% | - Average interest-earning deposits with banks increased to $35.00 billion in Q3 2025 from $31.57 billion in Q2 202511 - Average noninterest-bearing deposits decreased slightly to $92.76 billion in Q3 2025 from $93.14 billion in Q2 202511 Details of Net Interest Margin PNC's net interest margin slightly decreased QoQ to 2.79% in Q3 2025, but improved significantly YoY. This was primarily due to a larger decrease in the rate on interest-bearing liabilities compared to the yield on interest-earning assets on a YoY basis, despite a slight compression in interest rate spread QoQ Net Interest Margin Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (pp) | YoY Change (pp) | | :------------------- | :----------- | :----------- | :----------- | :-------------- | :-------------- | | Total Yield on Interest-Earning Assets | 4.99% | 4.93% | 5.25% | 0.06 | -0.26 | | Total Rate on Interest-Bearing Liabilities | 2.81% | 2.74% | 3.34% | 0.07 | -0.53 | | Interest Rate Spread | 2.18% | 2.19% | 1.91% | -0.01 | 0.27 | | Net Interest Margin | 2.79% | 2.80% | 2.64% | -0.01 | 0.15 | - The yield on total investment securities increased to 3.36% in Q3 2025 from 3.26% in Q2 2025, but decreased from 3.08% in Q3 202414 - The rate on total interest-bearing deposits increased to 2.32% in Q3 2025 from 2.24% in Q2 2025, but decreased from 2.72% in Q3 202414 Credit Quality PNC's credit quality showed stable loan portfolio, reduced allowance for credit losses, mixed nonperforming assets, and decreased accruing loans past due Details of Loans PNC's total loan portfolio remained stable QoQ at $326.62 billion as of September 30, 2025, showing a slight increase YoY. Commercial loans constitute the majority, with consumer loans also maintaining a significant portion Loan Portfolio Breakdown (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Loan Category (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :-------------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Commercial | $227,375 | $227,008 | $220,721 | 0.16% | 3.01% | | Commercial and industrial | $190,196 | $188,830 | $178,891 | 0.72% | 6.33% | | Commercial real estate | $30,281 | $31,250 | $35,104 | -3.10% | -13.74% | | Total Consumer | $99,241 | $99,332 | $100,660 | -0.09% | -1.41% | | Residential real estate | $44,637 | $45,257 | $46,972 | -1.37% | -4.97% | | Home equity | $25,942 | $25,928 | $25,970 | 0.05% | -0.11% | | Automobile | $16,272 | $15,892 | $15,135 | 2.39% | 7.51% | | Credit card | $6,636 | $6,570 | $6,827 | 1.00% | -2.79% | | Total Loans | $326,616 | $326,340 | $321,381 | 0.08% | 1.63% | - Within commercial and industrial loans, financial services ($33.35 billion) and manufacturing ($30.26 billion) were the largest categories as of September 30, 202516 Allowance for Credit Losses The allowance for loan and lease losses decreased slightly QoQ and YoY, reflecting a decrease in total net charge-offs and a significant reduction in the provision for credit losses. The overall allowance for credit losses to total loans ratio also saw a minor decline Allowance for Credit Losses Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Allowance for loan and lease losses (Ending Balance) | $4,478 | $4,523 | $4,589 | -1.00% | -2.42% | | Total Net Charge-offs | $(179) | $(198) | $(286) | -9.60% | -37.41% | | Provision for credit losses | $167 | $254 | $243 | -34.25% | -31.28% | | Allowance for credit losses to total loans | 1.61% | 1.62% | 1.65% | -0.01 pp | -0.04 pp | - Commercial net charge-offs decreased to $(72) million in Q3 2025 from $(102) million in Q2 2025 and $(172) million in Q3 202417 - Consumer net charge-offs decreased to $(107) million in Q3 2025 from $(96) million in Q2 2025, but increased from $(114) million in Q3 202417 Nonperforming Assets Total nonperforming assets increased QoQ but decreased YoY, reaching $2.30 billion as of September 30, 2025. The ratio of nonperforming loans to total loans remained stable QoQ, while the coverage by allowance for loan and lease losses improved significantly YoY Nonperforming Assets Highlights (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Nonperforming Assets | $2,299 | $2,141 | $2,609 | 7.38% | -11.90% | | Total Nonperforming Loans | $2,137 | $2,108 | $2,578 | 1.38% | -17.11% | | Nonperforming loans to total loans | 0.65% | 0.65% | 0.80% | 0 pp | -0.15 pp | | Allowance for loan and lease losses to nonperforming loans | 210% | 215% | 178% | -5 pp | 32 pp | | New nonperforming assets (QoQ) | $653 | $367 | $661 | 77.93% | -1.21% | - Commercial nonperforming loans decreased to $1,282 million in Q3 2025 from $1,251 million in Q2 2025, but decreased from $1,729 million in Q3 202420 - Consumer nonperforming loans remained stable at $855 million in Q3 2025 compared to $857 million in Q2 2025, and increased from $849 million in Q3 202420 Accruing Loans Past Due Total accruing loans past due decreased QoQ and YoY to $1.23 billion as of September 30, 2025, representing 0.38% of total loans. This decline was observed across both commercial and consumer categories Total Accruing Loans Past Due (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Metric (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Total Accruing Loans Past Due | $1,233 | $1,303 | $1,275 | -5.37% | -3.29% | | Commercial | $309 | $362 | $286 | -14.64% | 8.04% | | Consumer | $924 | $941 | $989 | -1.81% | -6.57% | | Total accruing loans past due to total loans | 0.38% | 0.40% | 0.40% | -0.02 pp | -0.02 pp | Accruing Loans Past Due 30 to 59 Days Accruing loans past due 30 to 59 days remained stable QoQ at $635 million, but increased YoY. Commercial loans in this category decreased QoQ, while consumer loans remained relatively stable Accruing Loans Past Due 30 to 59 Days (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Category (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :--------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Commercial | $170 | $176 | $137 | -3.41% | 24.09% | | Consumer | $465 | $459 | $477 | 1.31% | -2.49% | | Total | $635 | $635 | $614 | 0.00% | 3.42% | | Total to total loans | 0.19% | 0.19% | 0.19% | 0 pp | 0 pp | - Commercial and industrial loans past due 30-59 days decreased to $147 million in Q3 2025 from $118 million in Q2 202523 Accruing Loans Past Due 60 to 89 Days Accruing loans past due 60 to 89 days decreased QoQ to $251 million as of September 30, 2025, remaining stable YoY. Both commercial and consumer categories contributed to the QoQ decline Accruing Loans Past Due 60 to 89 Days (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Category (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :--------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Commercial | $67 | $107 | $52 | -37.38% | 28.85% | | Consumer | $184 | $190 | $200 | -3.16% | -8.00% | | Total | $251 | $297 | $252 | -15.50% | -0.40% | | Total to total loans | 0.08% | 0.09% | 0.08% | -0.01 pp | 0 pp | - Commercial and industrial loans past due 60-89 days decreased to $60 million in Q3 2025 from $91 million in Q2 202524 Accruing Loans Past Due 90 Days or More Accruing loans past due 90 days or more decreased QoQ and YoY to $347 million as of September 30, 2025. Both commercial and consumer segments showed a decline in this category Accruing Loans Past Due 90 Days or More (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Category (in millions) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :--------------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Commercial | $72 | $79 | $97 | -8.86% | -25.80% | | Consumer | $275 | $292 | $312 | -5.82% | -11.86% | | Total | $347 | $371 | $409 | -6.50% | -15.26% | | Total to total loans | 0.11% | 0.11% | 0.13% | 0 pp | -0.02 pp | - Commercial and industrial loans past due 90 days or more decreased to $71 million in Q3 2025 from $79 million in Q2 202525 Business Segment Results PNC's business segments, including Retail Banking, Corporate & Institutional Banking, and Asset Management Group, showed varied performance with overall revenue growth and improved efficiency Business Segment Descriptions PNC operates through three primary business segments: Retail Banking, Corporate & Institutional Banking, and Asset Management Group, each providing a distinct range of financial products and services to diverse client bases - Retail Banking offers deposit, lending, brokerage, insurance, investment management, and cash management products to consumer and small business customers through various channels26 - Corporate & Institutional Banking provides lending, treasury management, capital markets, and advisory products to mid-sized and large corporations, government, and not-for-profit entities27 - Asset Management Group serves high net worth and ultra high net worth clients through PNC Private Bank, and institutional clients via Institutional Asset Management, offering investment, credit, and trust services2831 Period End Employees PNC's total employee count slightly decreased QoQ and YoY to 54,938 as of September 30, 2025, primarily driven by a reduction in part-time employees, while full-time employees saw a minor increase QoQ Period End Employees (as of Sep 30, 2025 vs. Jun 30, 2025 vs. Sep 30, 2024) | Employee Type | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :----------------- | :----------- | :----------- | :----------- | :------------- | :------------- | | Full-time employees | 53,523 | 53,175 | 53,749 | 0.65% | -0.42% | | Part-time employees | 1,415 | 1,872 | 1,500 | -24.41% | -5.67% | | Total employees | 54,938 | 55,047 | 55,249 | -0.20% | -0.56% | - Retail Banking full-time employees decreased to 26,126 in Q3 2025 from 26,291 in Q2 2025 and 27,740 in Q3 202429 Summary of Business Segment Net Income and Revenue All three business segments (Retail Banking, Corporate & Institutional Banking, and Asset Management Group) contributed positively to PNC's total revenue and net income in Q3 2025. Corporate & Institutional Banking showed the strongest QoQ growth in both net income and revenue, while Retail Banking and Asset Management Group also demonstrated YoY revenue growth Business Segment Net Income and Revenue (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Segment (in millions) | Sep 30, 2025 Net Income | Jun 30, 2025 Net Income | Sep 30, 2024 Net Income | QoQ Change (%) | YoY Change (%) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | :------------- | :------------- | | Retail Banking | $1,324 | $1,359 | $1,172 | -2.58% | 12.97% | | Corporate & Institutional Banking | $1,459 | $1,229 | $1,197 | 18.71% | 21.89% | | Asset Management Group | $117 | $129 | $96 | -9.30% | 21.88% | | | | | | | | | Segment (in millions) | Sep 30, 2025 Revenue | Jun 30, 2025 Revenue | Sep 30, 2024 Revenue | QoQ Change (%) | YoY Change (%) | | :-------------------- | :---------------------- | :---------------------- | :---------------------- | :------------- | :------------- | | Retail Banking | $3,806 | $3,756 | $3,494 | 1.33% | 8.93% | | Corporate & Institutional Banking | $2,909 | $2,720 | $2,645 | 6.95% | 10.00% | | Asset Management Group | $430 | $423 | $393 | 1.65% | 9.41% | - Net income excluding noncontrolling interests for Q3 2025 was $1,808 million, up from $1,627 million in Q2 2025 and $1,490 million in Q3 202432 Retail Banking Retail Banking's net income slightly decreased QoQ but significantly increased YoY, reaching $1.32 billion in Q3 2025. Total revenue grew QoQ and YoY, while the efficiency ratio improved YoY. Brokerage account client assets also showed consistent growth Retail Banking Performance Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions, except as noted) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :------------- | :------------- | | Net Income | $1,324 | $1,359 | $1,172 | -2.58% | 12.97% | | Total Revenue | $3,806 | $3,756 | $3,494 | 1.33% | 8.93% | | Return on average assets | 4.60% | 4.78% | 3.99% | -0.18 pp | 0.61 pp | | Efficiency | 51% | 50% | 53% | 1 pp | -2 pp | | Branches | 2,219 | 2,218 | 2,242 | 0.05% | -1.03% | | Brokerage account client assets (in billions) | $89 | $87 | $84 | 2.30% | 5.95% | - Retail Banking's net interest income increased to $3,016 million in Q3 2025 from $2,974 million in Q2 2025 and $2,793 million in Q3 202434 - Residential mortgage loan origination volume was $1.5 billion in Q3 2025, a decrease from $1.7 billion in Q2 2025 and $1.8 billion in Q3 202435 Corporate & Institutional Banking Corporate & Institutional Banking demonstrated strong performance in Q3 2025, with net income increasing by 18.71% QoQ and 21.89% YoY to $1.46 billion. Total revenue also grew significantly, and the efficiency ratio improved. Treasury Management revenue continued its upward trend Corporate & Institutional Banking Performance Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions, except as noted) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :------------- | :------------- | | Net Income | $1,459 | $1,229 | $1,197 | 18.71% | 21.89% | | Total Revenue | $2,909 | $2,720 | $2,645 | 6.95% | 10.00% | | Return on average assets | 2.43% | 2.10% | 2.09% | 0.33 pp | 0.34 pp | | Efficiency | 34% | 35% | 36% | -1 pp | -2 pp | | Treasury Management revenue | $1,120 | $1,077 | $974 | 3.99% | 14.99% | | Commercial mortgage servicing portfolio balance (in billions) | $293 | $295 | $289 | -0.68% | 1.38% | - Net interest income for Corporate & Institutional Banking increased to $1,777 million in Q3 2025 from $1,698 million in Q2 2025 and $1,615 million in Q3 202441 - Noninterest income for Corporate & Institutional Banking increased to $1,132 million in Q3 2025 from $1,022 million in Q2 2025 and $1,030 million in Q3 202441 Asset Management Group The Asset Management Group's net income decreased QoQ but saw a significant YoY increase, reaching $117 million in Q3 2025. Total revenue grew QoQ and YoY, and the efficiency ratio improved YoY. Client assets under management and administration both experienced QoQ and YoY growth Asset Management Group Performance Highlights (Q3 2025 vs. Q2 2025 vs. Q3 2024) | Metric (in millions, except as noted) | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | QoQ Change (%) | YoY Change (%) | | :------------------------------------ | :----------- | :----------- | :----------- | :------------- | :------------- | | Net Income | $117 | $129 | $96 | -9.30% | 21.88% | | Total Revenue | $430 | $423 | $393 | 1.65% | 9.41% | | Return on average assets | 3.18% | 3.54% | 2.59% | -0.36 pp | 0.59 pp | | Efficiency | 63% | 63% | 69% | 0 pp | -6 pp | | Total discretionary client assets under management (in billions) | $228 | $217 | $214 | 5.07% | 6.54% | | Total client assets under administration (in billions) | $440 | $421 | $430 | 4.51% | 2.33% | - Net interest income for the Asset Management Group was $176 million in Q3 2025, compared to $179 million in Q2 2025 and $151 million in Q3 202446 - Noninterest income for the Asset Management Group was $254 million in Q3 2025, compared to $244 million in Q2 2025 and $242 million in Q3 202446 Glossary of Terms This section provides definitions for key financial and banking terms used throughout the Financial Supplement, covering concepts such as Allowance for Credit Losses, Basel III capital ratios, Charge-offs, Efficiency, Fair Value, Nonperforming Assets, and various other industry-specific terminology