PNC Financial Services : Earnings Release Q1 2025

Published: 2025-04-15 06:43:07 ET PNC

PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS

Expanded NIM; increased capital and TBV; maintained solid credit quality metrics

PITTSBURGH, Apr. 15, 2025 - The PNC Financial Services Group, Inc. (NYSE: PNC) today reported:

For the quarter

In millions, except per share data and as noted

1Q25

4Q24

1Q24

First Quarter Highlights

Financial Results

Comparisons reflect 1Q25 vs. 4Q24

Net interest income

3,476

3,523

3,264

Income Statement

Fee income (non-GAAP)

1,839

1,869

1,746

▪ Net interest income decreased 1%

Other noninterest income

137

175

135

driven by two fewer days in the

Noninterest income

1,976

2,044

1,881

quarter, partially offset by the benefit

Revenue

5,452

5,567

5,145

of lower funding costs and fixed rate

Noninterest expense

3,387

3,506

3,334

asset repricing

- NIM expanded 3 bps to 2.78%

Pretax, pre-provision earnings (non-GAAP)

2,065

2,061

1,811

Provision for credit losses

219

156

155

▪

Fee income decreased 2% due to a

Net income

1,499

1,627

1,344

slowdown in capital markets activity

and seasonality

Per Common Share

▪ Other noninterest income of $137

Diluted earnings per share (EPS)

3.51

3.77

3.10

million included negative $40 million

Average diluted common shares outstanding

398

399

400

of Visa derivative adjustments

▪

Noninterest expense decreased 3%

Book value

127.98

122.94

113.30

as a result of 4Q24 asset

Tangible book value (TBV) (non-GAAP)

100.40

95.33

85.70

impairments and seasonality

Balance Sheet & Credit Quality

Balance Sheet

Average loans In billions

316.6

319.1

320.6

▪

Average loans decreased $2.4

Average securities

In billions

142.2

143.9

135.4

billion, or 1%

Average deposits

In billions

420.6

425.3

420.2

- Spot loans increased $2.4 billion,

Accumulated other comprehensive income (loss) (AOCI)

(5.2)

(6.6)

(8.0)

reflecting $4.7 billion, or 3%,

In billions

growth in commercial and

Net loan charge-offs

205

250

243

industrial loans

Allowance for credit losses to total loans

1.64 %

1.68 %

▪

Average deposits decreased $4.6

billion, or 1%

Selected Ratios

▪ Net loan charge-offs were $205

Return on average common shareholders' equity

11.60 %

12.38 %

11.39 %

million, or 0.26% annualized to

Return on average assets

1.09

1.14

0.97

average loans

Net interest margin (NIM) (non-GAAP)

2.78

2.75

2.57

▪

AOCI improved $1.3 billion to

Noninterest income to total revenue

negative $5.2 billion reflecting the

movement of interest rates

Efficiency

▪

TBV per share increased 5% to

Effective tax rate

18.8

14.6

18.8

$100.40

Common equity Tier 1 (CET1) capital ratio

10.6

10.5

10.1

▪ Maintained strong capital position

See non-GAAP financial measures in the Consolidated Financial Highlights accompanying this release. Totals

- CET1 capital ratio of 10.6%

may not sum due to rounding.

- Repurchased approximately $200

million of common shares

From Bill Demchak, PNC Chairman and Chief Executive Officer:

"PNC had a strong start to the year. We grew customers and commercial loans, expanded our net interest margin, increased capital levels and maintained solid credit quality metrics. While market uncertainty impacted our capital markets activity, expenses remained well-controlled, resulting in another quarter of strong results. Regardless of market developments, our balance sheet is well-positioned and we continue to expect record net interest income and solid positive operating leverage in 2025."

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 2

Income Statement Highlights

First quarter 2025 compared with fourth quarter 2024

Balance Sheet Highlights

First quarter 2025 compared with fourth quarter 2024 or March 31, 2025 compared with December 31, 2024

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 3

Earnings Summary

In millions, except per share data

1Q25

4Q24

1Q24

Net income

1,499

1,627

1,344

Net income attributable to diluted common shareholders

1,399

1,505

1,240

Diluted earnings per common share

3.51

3.77

3.10

Average diluted common shares outstanding

398

399

400

Cash dividends declared per common share

1.60

1.55

The Consolidated Financial Highlights accompanying this news release include additional information regarding reconciliations of non-GAAP financial measures to reported (GAAP) amounts. This information supplements results as reported in accordance with GAAP and should not be viewed in isolation from, or as a substitute for, GAAP results. Information in this news release, including the financial tables, is unaudited.

CONSOLIDATED REVENUE REVIEW

Revenue

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Net interest income

3,476

3,523

3,264

(1)%

6 %

Noninterest income

1,976

2,044

1,881

(3)%

5 %

Total revenue

5,452

5,567

5,145

(2)%

6 %

Total revenue for the first quarter of 2025 decreased $115 million compared to the fourth quarter of 2024 reflecting two fewer days in the quarter, seasonality and a slowdown in capital markets activity. In comparison to the first quarter of 2024, total revenue increased $307 million reflecting broad-based revenue growth.

Net interest income of $3.5 billion decreased $47 million from the fourth quarter of 2024 and increased $212 million from the first quarter of 2024. Both comparisons reflected the benefit of lower funding costs and the continued repricing of fixed rate assets. In comparison to the fourth quarter of 2024, this benefit was more than offset by two fewer days in the quarter. Net interest margin was 2.78% in the first quarter of 2025, increasing 3 basis points from the fourth quarter of 2024, and 21 basis points from the first quarter of 2024.

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 4

Noninterest Income

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Asset management and brokerage

391

374

364

5 %

7 %

Capital markets and advisory

306

348

259

(12)%

18 %

Card and cash management

692

695

671

3 %

Lending and deposit services

316

330

305

(4)%

4 %

Residential and commercial mortgage

134

122

147

10 %

(9)%

Fee income (non-GAAP)

1,839

1,869

1,746

(2)%

5 %

Other

137

175

135

(22)%

1 %

Total noninterest income

1,976

2,044

1,881

(3)%

5 %

Noninterest income for the first quarter of 2025 decreased $68 million compared with the fourth quarter of 2024. Asset management and brokerage increased $17 million driven by higher brokerage client activity and positive net flows. Capital markets and advisory revenue declined $42 million primarily due to lower merger and acquisition advisory activity and a decline in trading revenue. Card and cash management decreased $3 million as higher treasury management revenue was more than offset by seasonally lower consumer spending. Lending and deposit services decreased $14 million and included seasonally lower customer activity. Residential and commercial mortgage revenue increased $12 million driven by higher results from residential mortgage rights valuation, net of economic hedge. Other noninterest income declined $38 million and included negative $40 million of Visa derivative adjustments primarily related to litigation escrow funding. Visa derivative adjustments were negative $23 million in the fourth quarter of 2024.

Noninterest income for the first quarter of 2025 increased $95 million from the first quarter of 2024, driven by business growth across all fee categories with the exception of residential mortgage revenue.

CONSOLIDATED EXPENSE REVIEW

Noninterest Expense

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Personnel

1,890

1,857

1,794

2 %

5 %

Occupancy

245

240

244

2 %

Equipment

384

473

341

(19)%

13 %

Marketing

112

(24)%

33 %

Other

783

824

891

(5)%

(12)%

Total noninterest expense

3,387

3,506

3,334

(3)%

2 %

Noninterest expense for the first quarter of 2025 declined $119 million compared to the fourth quarter of 2024 reflecting asset impairments recognized in the fourth quarter of $97 million as well as seasonally lower other noninterest expense and marketing.

Noninterest expense for the first quarter of 2025 increased $53 million compared with the first quarter of 2024 as a result of increased business activity, technology investments and higher marketing spend.

The effective tax rate was 18.8% for the first quarter of 2025, 14.6% for the fourth quarter of 2024 and 18.8% for the first quarter of 2024. The fourth quarter of 2024 included a benefit from the resolution of certain tax matters.

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 5

CONSOLIDATED BALANCE SHEET REVIEW

Loans

Change

03/31/25 vs

In billions

March 31, 2025

December 31, 2024

March 31, 2024

12/31/24

03/31/24

Average

Commercial

217.1

218.6

219.2

(1)%

Consumer

99.5

100.4

101.4

(1)%

(2)%

Average Loans

316.6

319.1

320.6

(1)%

Quarter end

Commercial

219.6

216.2

218.8

2 %

Consumer

99.3

100.3

100.9

(1)%

(2)%

Total loans

318.9

316.5

319.8

1 %

Totals may not sum due to rounding

Average loans decreased $2.4 billion compared to the fourth quarter of 2024. Average commercial loans decreased $1.6 billion driven by lower commercial real estate loans. Average consumer loans decreased $0.9 billion reflecting lower residential mortgage and credit card loan balances.

Loans at March 31, 2025 increased $2.4 billion from December 31, 2024, driven by growth in the commercial and industrial portfolio of 3%, reflecting increased utilization and new production. The growth in commercial and industrial loans was partially offset by a decline in commercial real estate and consumer loan balances.

In comparison to the first quarter of 2024, average loans decreased $4.0 billion. Average commercial loans decreased $2.2 billion primarily due to lower commercial real estate loans. Average consumer loans decreased $1.8 billion primarily due to lower residential mortgage, credit card and education loans.

Average Investment Securities

Change

1Q25 vs

In billions

1Q25

4Q24

1Q24

4Q24

1Q24

Available for sale

65.7

63.6

46.0

3 %

43 %

Held to maturity

76.5

80.3

89.4

(5)%

(14)%

Total

142.2

143.9

135.4

(1)%

5 %

Totals may not sum due to rounding

Average investment securities of $142.2 billion in the first quarter of 2025 decreased $1.7 billion compared to the fourth quarter of 2024 and increased $6.7 billion from the first quarter of 2024. Both comparisons reflected net purchase activity of available-for-sale securities as well as net paydowns and maturities of held-to-maturity securities. In the first quarter of 2025, 20% of the investment securities portfolio was floating rate compared to 19% in the fourth quarter of 2024 and 6% in the first quarter of 2024. The duration of the investment securities portfolio was estimated at 3.4 years as of March 31, 2025, 3.5 years as of December 31, 2024 and 4.1 years as of March 31, 2024.

Net unrealized losses on available-for-sale securities were $2.7 billion at March 31, 2025, $3.5 billion at December 31, 2024 and $4.0 billion at March 31, 2024. The decrease in net unrealized losses from December 31, 2024 reflected the impact of interest rate movements.

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 6

Average Federal Reserve Bank balances for the first quarter of 2025 were $34.2 billion, decreasing $3.3 billion from the fourth quarter of 2024 and $13.6 billion from the first quarter of 2024 primarily due to lower brokered time deposits and borrowed funds outstanding.

Average Deposits

Change

1Q25 vs

In billions

1Q25

4Q24

1Q24

4Q24

1Q24

Commercial

206.5

211.6

202.5

(2)%

2 %

Consumer

209.5

205.9

208.0

2 %

1 %

Brokered time deposits

4.7

7.7

9.6

(39)%

(51)%

Total

420.6

425.3

420.2

(1)%

IB % of total avg. deposits

78%

77%

76%

NIB % of total avg. deposits

22%

23%

24%

IB - Interest-bearing

NIB - Noninterest-bearing

Totals may not sum due to rounding

First quarter of 2025 average deposits of $420.6 billion decreased $4.6 billion compared to the fourth quarter of 2024 due to seasonally lower commercial deposits and a decline in brokered time deposits. Compared to the first quarter of 2024, average deposits were stable.

Noninterest-bearing deposits as a percentage of total average deposits were 22% for the first quarter of 2025, 23% in the fourth quarter of 2024 and 24% in the first quarter of 2024.

Average Borrowed Funds

Change

1Q25 vs

In billions

1Q25

4Q24

1Q24

4Q24

1Q24

Total

64.5

67.2

75.6

(4) %

(15) %

Avg. borrowed funds to avg. liabilities

13 %

15 %

Average borrowed funds of $64.5 billion in the first quarter of 2025 decreased $2.7 billion compared to the fourth quarter of 2024 and $11.1 billion compared to the first quarter of 2024. In both comparisons, the decrease was driven by lower Federal Home Loan Bank advances, partially offset by higher parent company senior debt issuances.

Capital

Common shareholders' equity In billions

Accumulated other comprehensive income (loss) In billions

March 31,

December 31,

March 31,

2025

2024

50.7

48.7

45.1

(5.2)

(6.6)

(8.0)

Basel III common equity Tier 1 capital ratio *

10.6 %

10.5 %

10.1 %

*March 31, 2025 ratio is estimated and is calculated to reflect the full impact of CECL. December 31, 2024 and March 31, 2024 ratios reflect PNC's election to adopt the optional five-year CECL transition provision.

PNC maintained a strong capital position. Common shareholders' equity at March 31, 2025 increased $2.0 billion from December 31, 2024 due to net income and an improvement in accumulated other comprehensive income, partially offset by dividends paid and share repurchases.

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 7

As a Category III institution, PNC has elected to exclude accumulated other comprehensive income related to both available-for-sale securities and pension and other post-retirement plans from CET1 capital. Accumulated other comprehensive income of negative $5.2 billion at March 31, 2025 improved from negative $6.6 billion at December 31, 2024 and negative $8.0 billion at March 31, 2024. In both comparisons, the change reflected the favorable impact of interest rate movements and the passage of time on unrealized losses related to securities and swaps.

In the first quarter of 2025, PNC returned $0.8 billion of capital to shareholders, including $0.6 billion of dividends on common shares and $0.2 billion of common share repurchases. Consistent with the Stress Capital Buffer (SCB) framework, which allows for capital return in amounts in excess of the SCB minimum levels, our board of directors has authorized a repurchase framework under the previously approved repurchase program of up to

100 million common shares, of which approximately 41% were still available for repurchase at March 31, 2025. Second quarter 2025 share repurchase activity is expected to approximate recent quarterly average share

repurchase levels. PNC may adjust share repurchase activity depending on market and economic conditions, as well as other factors.

PNC's SCB for the four-quarter period beginning October 1, 2024 is the regulatory minimum of 2.5%.

On April 3, 2025, the PNC board of directors declared a quarterly cash dividend on common stock of $1.60 per share to be paid on May 5, 2025 to shareholders of record at the close of business April 16, 2025.

At March 31, 2025, PNC was considered "well capitalized" based on applicable U.S. regulatory capital ratio requirements. For additional information regarding PNC's Basel III capital ratios, see Capital Ratios in the Consolidated Financial Highlights.

CREDIT QUALITY REVIEW

Credit Quality

Change

March 31,

December 31,

March 31,

03/31/25 vs

In millions

2025

2024

12/31/24

03/31/24

Provision for credit losses (a)

219

156

155

Net loan charge-offs (a)

205

250

243

(18)%

(16)%

Allowance for credit losses (b)

5,218

5,205

5,365

(3)%

Total delinquencies (c)

1,431

1,382

1,275

4 %

12 %

Nonperforming loans

2,292

2,326

2,380

(1)%

(4)%

Net charge-offs to average loans

(annualized)

0.26 %

0.31 %

0.30 %

Allowance for credit losses to total loans

1.64 %

1.68 %

Nonperforming loans to total loans

0.72 %

0.73 %

0.74 %

Provision for credit losses was $219 million in the first quarter of 2025, reflecting changes in macroeconomic factors and portfolio activity. The fourth quarter of 2024 provision for credit losses was $156 million.

Net loan charge-offs were $205 million in the first quarter of 2025, decreasing $45 million compared to the fourth quarter of 2024 and $38 million compared to first quarter of 2024. In both comparisons, the decrease was primarily due to lower commercial real estate net loan charge-offs.

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 8

The allowance for credit losses was $5.2 billion at both March 31, 2025 and December 31, 2024 and $5.4 billion at March 31, 2024. As of March 31, 2025, the allowance for credit losses as a percentage of total loans was 1.64%, stable from December 31, 2024 and down from 1.68% at March 31, 2024.

Delinquencies at March 31, 2025 were $1.4 billion, increasing $49 million from December 31, 2024, and included higher consumer loan delinquencies, primarily related to forbearance activity associated with the California wildfires. Compared to March 31, 2024, delinquencies increased $156 million reflecting higher commercial and consumer loan delinquencies.

Nonperforming loans at March 31, 2025 were $2.3 billion, stable from December 31, 2024. Compared to March 31, 2024, nonperforming loans decreased $88 million primarily due to lower commercial real estate nonperforming loans.

BUSINESS SEGMENT RESULTS

Business Segment Income (Loss)

In millions

1Q25

4Q24

1Q24

Retail Banking

1,112

1,074

1,085

Corporate & Institutional Banking

1,244

1,365

1,121

Asset Management Group

113

103

Other

(988)

(932)

(973)

Net income excluding noncontrolling interests

1,481

1,610

1,330

Retail Banking

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Net interest income

2,826

2,824

2,617

209

Noninterest income

706

708

764

(2)

(58)

Noninterest expense

1,903

2,011

1,837

(108)

Provision for credit losses

168

106

118

Earnings

1,112

1,074

1,085

In billions

Average loans

95.6

96.4

97.2

(0.8)

(1.6)

Average deposits

245.1

246.8

249.0

(1.7)

(3.9)

Net loan charge-offs In millions

144

152

139

(8)

Retail Banking Highlights

First quarter 2025 compared with fourth quarter 2024

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 9

First quarter 2025 compared with first quarter 2024

Corporate & Institutional Banking

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Net interest income

1,652

1,688

1,549

(36)

103

Noninterest income

978

1,067

888

(89)

Noninterest expense

956

981

922

(25)

Provision for credit losses

Earnings

1,244

1,365

1,121

(121)

123

In billions

Average loans

202.2

203.7

204.2

(1.5)

(2.0)

Average deposits

148.0

151.3

142.7

(3.3)

5.3

Net loan charge-offs In millions

100

108

(36)

(44)

Corporate & Institutional Banking Highlights

First quarter 2025 compared with fourth quarter 2024

First quarter 2025 compared with first quarter 2024

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PNC Reports First Quarter 2025 Net Income of $1.5 Billion, $3.51 Diluted EPS - Page 10

Asset Management Group

Change

1Q25 vs

In millions

1Q25

4Q24

1Q24

4Q24

1Q24

Net interest income

184

171

157

Noninterest income

243

242

230

Noninterest expense

279

277

265

Provision for (recapture of) credit losses

(5)

(1)

Earnings

113

103

In billions

Discretionary client assets under management

210

211

195

(1)

Nondiscretionary client assets under administration

201

210

199

(9)

Client assets under administration at quarter end

411

421

394

(10)

In billions

Average loans

16.3

16.4

16.3

(0.1)

Average deposits

28.1

27.7

28.7

0.4

(0.6)

Net loan charge-offs In millions

(2)

Asset Management Group Highlights

First quarter 2025 compared with fourth quarter 2024

First quarter 2025 compared with first quarter 2024

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Disclaimer

The PNC Financial Services Group Inc. published this content on April 15, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on April 15, 2025 at 10:42 UTC.