PNC(US:PNC)2025-01-16 16:00Financial Data and Key Metrics Changes - For the full year 2024, the company earned $6 billion or $13.74 per share, achieving record revenue and a 6% growth in fee income [5][6] - The tangible book value per share increased by 12% compared to the previous year, reaching $95.33 [12] - The net interest income for Q4 was $3.5 billion, an increase of $113 million or 3% from the previous quarter, with a net interest margin of 2.75%, up 11 basis points [18][20] Business Line Data and Key Metrics Changes - Consumer DDA growth in 2024 was the highest in 8 years, and brokerage revenue reached record levels [7] - Non-interest income for Q4 was $2 billion, a 1% increase, while non-interest expense rose by 5% to $3.5 billion [18][22] - The asset management and brokerage income declined by 2%, reflecting lower annuity sales, while lending and deposit services revenue grew by 3% [20] Market Data and Key Metrics Changes - Sales in expansion markets grew by 26%, with over 60% of those sales being non-credit [7] - Average deposits increased by $3 billion or 1%, with non-interest bearing deposits stable at $96 billion [16] - The company expects deposit growth of 1% to 2% in 2025, with some seasonality expected in commercial deposits [31] Company Strategy and Development Direction - The company is investing in new products and expanding its footprint, including doubling new branch builds in fast-growing regions [9] - A new online banking platform is set to be rolled out to enhance customer experience and operational efficiency [8][100] - The company aims to generate substantial positive operating leverage in 2025, with expectations for net interest income and non-interest income to grow [28] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued economic growth in 2025, with a projected real GDP growth of approximately 2% [26] - The company expects to see further tailwinds from fixed asset repricing over the next couple of years [5] - There are uncertainties regarding the economic outlook, but the company believes its balance sheet is well positioned [9][10] Other Important Information - The company returned $3 billion of capital to shareholders through dividends and share buybacks [6] - Non-performing loans decreased by 10% linked quarter, while total delinquencies increased by 8% [23] - The company is adequately reserved for credit risk, with an allowance for credit losses totaling $5.2 billion [24] Q&A Session Summary Question: Industry deposit growth and trends in 2025 - The company expects slight deposit growth of 1% to 2% in 2025, with positive organic efforts in expansion markets [31][32] Question: NII guidance and drivers - The guidance for NII is conservative, with expectations for a decline in Q1 due to fewer days and lower seasonal commercial deposits [33][35] Question: Loan growth and demand outlook - Management noted that utilization is lower across all segments, with uncertainty impacting capital investment decisions [42][65] Question: Fee income growth outlook - The company expects fee income to grow approximately 5% in 2025, driven by various segments including asset management and capital markets [56][57] Question: Capital buyback plans - The company plans to sustain buybacks at levels between $100 million and $200 million, depending on loan growth [58][59] Question: Regulatory environment and M&A opportunities - The company sees potential for easier deal approvals but notes that many banks are currently not looking to sell [122]