PNC Financial Shares Gain on Q4 Earnings Beat & Record Revenues

Core Viewpoint - PNC Financial Services Group, Inc. reported better-than-expected fourth-quarter results for 2025, with shares rising nearly 3.2% in pre-market trading following the announcement of earnings per share (EPS) of $4.88, exceeding the Zacks Consensus Estimate of $4.23 and up from $3.77 in the prior-year quarter [1][9]. Financial Performance - The company achieved record revenue growth, with total quarterly revenues reaching $6.1 billion, a 9.1% increase year over year, surpassing the Zacks Consensus Estimate of $5.96 billion [4]. - For the full year 2025, total revenues were $23.09 billion, up 7.2% year over year, also exceeding the Zacks Consensus Estimate of $23.07 billion [4]. - Net income for the fourth quarter was $2.03 billion, a 24.9% increase from the prior-year quarter, while full-year net income was $6.99 billion, up from $5.95 billion in 2024 [2][3]. Income Sources - Net interest income (NII) for the fourth quarter was $3.73 billion, reflecting a 5.9% increase from the year-ago quarter, with the net interest margin (NIM) rising 9 basis points to 2.84% [4]. - Non-interest income increased by 14.5% year over year to $2.34 billion, driven by growth in all components of fee income [5]. Expenses and Efficiency - Non-interest expenses totaled $3.6 billion, a 2.7% increase from the previous year [5]. - The efficiency ratio improved to 59% from 63% in the year-ago quarter, indicating increased profitability [5]. Loan and Deposit Growth - As of December 31, 2025, total loans were $331.5 billion, up 1.5% sequentially, while total deposits increased by 1.9% to $440 billion [6]. Credit Quality - Non-performing loans decreased by 4.6% year over year to $2.22 billion, and net loan charge-offs fell by 35.2% year over year to $162 million [7]. - The provision for credit losses was $139 million in the fourth quarter, down 10.9% from the previous year [7]. Capital Position and Returns - The Basel III common equity tier 1 capital ratio improved to 10.6% from 10.5% year over year [10]. - Return on average assets and average common shareholders' equity were 1.40% and 14.33%, respectively, compared to 1.14% and 12.38% in the prior-year quarter [10]. - In Q4 2025, PNC returned $1.1 billion to shareholders, including $0.7 billion in dividends and $0.4 billion in share repurchases [11]. Strategic Developments - In January 2025, PNC completed the acquisition of FirstBank Holding Company, adding 95 branches and $26.8 billion in assets, significantly expanding its footprint in Colorado and Arizona [13].