PNC Reports Second Quarter 2025 Net Income of $1.6 Billion, $3.85 Diluted EPS

From Bill Demchak, PNC Chairman and Chief Executive Officer:
"Our national growth strategy continues to deliver results. New customer acquisition is accelerating, while we continue to deepen relationships with our existing customers across businesses. The strength of our franchise resulted in strong loan and revenue growth even through an uncertain macro environment, while expenses remained well controlled. Overall, we had a great quarter."

Income Statement Highlights

Second quarter 2025 compared with first quarter 2025

• Total revenue of $5.7 billion increased $209 million, or 4%, driven by growth in both noninterest income and net interest income.
  • Net interest income of $3.6 billion increased $79 million, or 2%, driven by loan growth, the continued benefit of fixed rate asset repricing and one additional day in the quarter.
    • Net interest margin of 2.80% increased 2 basis points.
  • Fee income of $1.9 billion increased $55 million, or 3%, primarily due to higher card and cash management revenue and an increase in capital markets and advisory fees.
  • Other noninterest income of $212 million increased $75 million reflecting Visa related activity and other positive valuation adjustments, partially offset by lower private equity revenue.
• Noninterest expense of $3.4 billion was stable.
• Provision for credit losses was $254 million in the second quarter and reflected changes in macroeconomic scenarios, tariff related considerations and portfolio activity, including loan growth.
• The effective tax rate was 18.8% for both the second quarter and first quarter.

Balance Sheet Highlights

Second quarter 2025 compared with first quarter 2025 or June 30, 2025 compared with March 31, 2025

• Average loans of $322.8 billion increased $6.1 billion, or 2%, driven by growth in the commercial and industrial portfolio of $7.4 billion, or 4%, reflecting strong new production and increased utilization of loan commitments, partially offset by a decline in commercial real estate loans of $1.2 billion, or 4%. Consumer loan balances were stable.
• Credit quality performance:
  • Delinquencies of $1.3 billion decreased $128 million, or 9%, as a result of lower consumer and commercial loan delinquencies.
  • Total nonperforming loans of $2.1 billion decreased $184 million, or 8%, driven by lower commercial nonperforming loans, including lower commercial real estate nonperforming loans.
  • Net loan charge-offs of $198 million decreased $7 million due to lower consumer net loan charge-offs, partially offset by higher commercial net loan charge-offs, primarily related to the commercial real estate portfolio.
  • The allowance for credit losses increased $0.1 billion to $5.3 billion. The allowance for credit losses to total loans was 1.62% at June 30, 2025 and 1.64% at March 31, 2025.
• Average investment securities of $141.9 billion were stable.
  • Investment securities at June 30, 2025 of $142.3 billion increased $4.6 billion, or 3%, reflecting net purchase activity, primarily of agency residential mortgage-backed securities.
• Average deposits of $423.0 billion increased $2.3 billion due to higher brokered and consumer deposits, partially offset by seasonally lower commercial deposits. Noninterest-bearing deposits were $93.1 billion, increasing $0.8 billion.
• Average borrowed funds of $65.3 billion were stable.
• PNC maintained a strong capital and liquidity position:
  • Based on the results of the Federal Reserve's 2025 annual stress test, PNC's SCB for the four-quarter period beginning October 1, 2025 will remain at the regulatory minimum of 2.5%.
  • On July 3, 2025, the PNC board of directors raised the quarterly cash dividend on common stock to $1.70 per share, an increase of 10 cents per share. The dividend is payable on August 5, 2025 to shareholders of record at the close of business July 15, 2025.
  • PNC returned $1.0 billion of capital to shareholders, reflecting more than $0.6 billion of dividends on common shares and more than $0.3 billion of common share repurchases.
  • The Basel III common equity Tier 1 capital ratio was an estimated 10.5% at June 30, 2025 and was 10.6% at March 31, 2025.
  • PNC's average LCR for the three months ended June 30, 2025 was 107%, exceeding the regulatory minimum requirement throughout the quarter.

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.

Total revenue for the second quarter of 2025 increased $209 million compared to the first quarter of 2025 driven by growth in both noninterest income and net interest income. In comparison to the second quarter of 2024, total revenue increased $250 million reflecting the benefit of fixed rate asset repricing and broad-based fee income growth, partially offset by $141 million of significant items recognized in the second quarter of 2024.

Net interest income of $3.6 billion increased $79 million from the first quarter of 2025, driven by loan growth, the continued benefit of fixed rate asset repricing and one additional day in the quarter. Compared to the second quarter of 2024, net interest income increased $253 million primarily due to lower funding costs and the benefit of fixed rate asset repricing. Net interest margin was 2.80% in the second quarter of 2025, increasing 2 basis points from the first quarter of 2025, and 20 basis points from the second quarter of 2024.

Noninterest income for the second quarter of 2025 increased $130 million, or 7%, compared with the first quarter of 2025. Capital markets and advisory revenue increased $15 million reflecting an increase in capital markets activity late in the quarter. Card and cash management increased $45 million as a result of seasonally higher consumer transaction volumes and growth in treasury management product revenue. Residential and commercial mortgage revenue decreased $6 million primarily due to lower residential mortgage servicing revenue. Other noninterest income increased $75 million reflecting Visa related activity and other positive valuation adjustments, partially offset by lower private equity revenue. Visa derivative adjustments were positive $2 million in the second quarter of 2025 and negative $40 million in the first quarter of 2025.

Noninterest income for the second quarter of 2025 was stable from the second quarter of 2024, as broad-based fee income growth was offset by lower other noninterest income, reflecting $141 million of significant items recognized in the second quarter of 2024. 

Noninterest expense for the second quarter of 2025 was stable compared to the first quarter of 2025, reflecting a continued focus on expense management, partially offset by seasonally higher marketing spend and continued technology investments.

Noninterest expense for the second quarter of 2025 increased $26 million compared with the second quarter of 2024 as a result of increased business activity, technology investments and annual employee merit and benefits increases, partially offset by $120 million of significant items recognized in the second quarter of 2024.

The effective tax rate was 18.8% for all periods presented.

Average loans increased $6.1 billion compared to the first quarter of 2025. Average commercial loans increased $6.3 billion, driven by growth in the commercial and industrial portfolio of $7.4 billion, or 4%, reflecting strong new production and increased utilization of loan commitments, partially offset by a decline in commercial real estate loans of $1.2 billion, or 4%. Average consumer loans were stable as growth in the auto loan portfolio was offset by lower residential mortgage loans.

In comparison to the second quarter of 2024, average loans increased $2.8 billion. Average commercial loans increased $4.2 billion primarily due to strong growth in commercial and industrial loans, partially offset by lower commercial real estate loans. Average consumer loans decreased $1.4 billion primarily due to lower residential mortgage loans, partially offset by growth in the auto loan portfolio.

Loans at June 30, 2025 increased $7.5 billion and $4.9 billion from March 31, 2025 and June 30, 2024, respectively. In both comparisons the increase was the result of commercial loan growth.

Average investment securities of $141.9 billion in the second quarter of 2025 were stable compared to the first quarter of 2025 and second quarter of 2024. Both comparisons include net purchase activity of available-for-sale securities.

Total investment securities of $142.3 billion at June 30, 2025 increased $4.6 billion from March 31, 2025 and $3.7 billion from June 30, 2024, reflecting net purchase activity, primarily of agency residential mortgage-backed securities. The duration of the investment securities portfolio was estimated at 3.4 years as of June 30, 2025 and March 31, 2025 and 3.6 years as of June 30, 2024. Net unrealized losses on available-for-sale securities were $2.6 billion at June 30, 2025, $2.7 billion at March 31, 2025 and $3.7 billion at June 30, 2024. 

Average Federal Reserve Bank balances for the second quarter of 2025 were $30.8 billion, decreasing $3.4 billion from the first quarter of 2025 and $9.9 billion from the second quarter of 2024. In comparison to the first quarter of 2025, the decrease was primarily driven by loan growth. Compared to the second quarter of 2024, the decline included lower borrowed funds outstanding.

Second quarter 2025 average deposits of $423.0 billion increased $2.3 billion compared to the first quarter of 2025 due to higher brokered time and consumer deposits, partially offset by seasonally lower commercial deposits. Compared to the second quarter of 2024, average deposits increased $5.7 billion reflecting growth in both commercial and consumer deposits, partially offset by lower brokered time deposits.

Noninterest-bearing deposits were $93.1 billion in the second quarter of 2025, increasing $0.8 billion from the first quarter of 2025 and decreasing $3.1 billion from the second quarter of 2024. Noninterest-bearing deposits as a percentage of total average deposits were 22% for both the second quarter and first quarter of 2025 and 23% in the second quarter of 2024.

Average borrowed funds of $65.3 billion in the second quarter of 2025 increased $0.8 billion compared to the first quarter of 2025 and decreased $12.2 billion compared to the second quarter of 2024. In comparison to the second quarter of 2024, the decrease was primarily driven by lower Federal Home Loan Bank advances, partially offset by higher parent company senior debt outstanding.

PNC maintained a strong capital position. Common shareholders' equity at June 30, 2025 increased $1.2 billion from March 31, 2025 due to net income and an improvement in accumulated other comprehensive income, partially offset by dividends paid and share repurchases.

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 $4.7 billion at June 30, 2025 improved from negative $5.2 billion at March 31, 2025 and negative $7.4 billion at June 30, 2024. In both comparisons, the change reflected the favorable impact of interest rate movements on securities and swaps and the continued accretion of unrealized losses.

In the second quarter of 2025, PNC returned $1.0 billion of capital to shareholders, including more than $0.6 billion of dividends on common shares and more than $0.3 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 39% were still available for repurchase at June 30, 2025.

Share repurchase activity in the third quarter of 2025 is expected to be generally consistent with our second quarter of 2025 share repurchase levels and approximate $300 million to $400 million. PNC may adjust share repurchase activity depending on market and economic conditions, as well as other factors.

Based on the results of the Federal Reserve's 2025 annual stress test, PNC's SCB for the four-quarter period beginning October 1, 2025 will remain at the regulatory minimum of 2.5%.

On July 3, 2025, the PNC board of directors raised the quarterly cash dividend on common stock to $1.70 per share, an increase of 10 cents per share. The dividend is payable on August 5, 2025 to shareholders of record at the close of business July 15, 2025.

At June 30, 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.

Provision for credit losses was $254 million in the second quarter of 2025 and reflected changes in macroeconomic scenarios, tariff related considerations and portfolio activity, including loan growth. The first quarter of 2025 provision for credit losses was $219 million.

Net loan charge-offs were $198 million in the second quarter of 2025, decreasing $7 million compared to the first quarter of 2025 due to lower consumer net loan charge-offs, partially offset by higher commercial net loan charge-offs, primarily related to the commercial real estate portfolio. Compared to the second quarter of 2024, net loan charge-offs decreased $64 million primarily due to lower commercial real estate net loan charge-offs.

The allowance for credit losses was $5.3 billion at June 30, 2025, $5.2 billion at March 31, 2025 and $5.4 billion at June 30, 2024. The allowance for credit losses as a percentage of total loans was 1.62% at June 30, 2025, 1.64% at March 31, 2025 and 1.67% at June 30, 2024.

Delinquencies at June 30, 2025 were $1.3 billion, decreasing $128 million from March 31, 2025, as a result of lower consumer and commercial loan delinquencies. Compared to June 30, 2024, delinquencies increased $31 million reflecting higher commercial loan delinquencies, partially offset by lower consumer loan delinquencies.

Nonperforming loans at June 30, 2025 were $2.1 billion, decreasing $184 million from March 31, 2025 and $395 million from June 30, 2024. In both comparisons, the decrease was driven by lower commercial nonperforming loans, including lower commercial real estate nonperforming loans.

Retail Banking Highlights

Second quarter 2025 compared with first quarter 2025

• Earnings increased 21%, driven by higher revenue, a lower provision for credit losses and lower noninterest expense.
  • Noninterest income increased 11%, primarily reflecting Visa related activity and seasonally higher card and cash management revenue.
  • Noninterest expense decreased 1%.
  • Provision for credit losses of $83 million in the second quarter of 2025 included the impact of changes in macroeconomic factors and portfolio activity.
• Average loans were stable.
• Average deposits increased 1%, primarily due to higher noninterest-bearing and consumer time deposits.

Second quarter 2025 compared with second quarter 2024

• Earnings decreased 21%, driven by lower noninterest income, a higher provision for credit losses and higher noninterest expense, partially offset by increased net interest income.
  • Noninterest income decreased 44%, primarily reflecting a gain of $754 million from the Visa exchange program that occurred in the second quarter of 2024.
  • Noninterest expense increased 3%, due to technology investments, increased personnel costs and higher marketing spend.
• Average loans decreased 1%, primarily due to lower residential mortgage loans.
• Average deposits increased 1%, due to higher consumer time deposits.

Corporate & Institutional Banking Highlights

Second quarter 2025 compared with first quarter 2025

• Earnings decreased 1%, driven by a higher provision for credit losses, partially offset by higher net interest income and noninterest income.
  • Noninterest income increased 4%, reflecting higher other income and higher treasury management product revenue.
  • Noninterest expense decreased 1%, and included a decline in personnel costs, reflecting seasonally lower incentive compensation.
  • Provision for credit losses of $184 million in the second quarter of 2025 reflected changes in macroeconomic scenarios, tariff related considerations and portfolio activity, including loan growth.
• Average loans increased 3%, driven by strong new production and increased utilization of loan commitments in PNC's corporate banking and business credit businesses.
• Average deposits decreased 1%, reflecting seasonal declines in corporate deposits.

Second quarter 2025 compared with second quarter 2024

• Earnings increased 17%, reflecting higher net interest income and noninterest income as well as a lower provision for credit losses, partially offset by higher noninterest expense.
  • Noninterest income increased 8%, reflecting broad-based growth.
  • Noninterest expense increased 4%, due to continued investments to support business growth and higher variable compensation associated with increased business activity.
• Average loans increased 2%, driven by growth in PNC's corporate banking and business credit businesses, partially offset by a decline in the PNC real estate business.
• Average deposits increased 5%, due to growth in interest-bearing deposits.

Asset Management Group Highlights

Second quarter 2025 compared with first quarter 2025

• Earnings increased 23%, due to a provision recapture, lower noninterest expense and higher net interest income.
  • Noninterest income was stable.
  • Noninterest expense decreased 4%, primarily driven by lower personnel expense, reflecting seasonally lower incentive compensation.
• Discretionary client assets under management increased 3% and included the impact from higher spot equity markets and positive net flows.
• Average loans increased 1%.
• Average deposits decreased 3%, driven by the timing of annual client income tax payments.

Second quarter 2025 compared with second quarter 2024

• Earnings increased 36%, due to higher revenue and a provision recapture, partially offset by higher noninterest expense.
  • Noninterest income increased 4%, reflecting higher average equity markets.
  • Noninterest expense increased 3%, due to continued investments to support business growth.
• Discretionary client assets under management increased 11% and included the impact from higher spot equity markets and positive net flows.
• Average loans decreased 1%, primarily reflecting declines in residential mortgage and commercial loans.
• Average deposits decreased 2%, driven by lower interest-bearing deposits.

Other

The "Other" category, for the purposes of this release, includes residual activities that do not meet the criteria for disclosure as a separate reportable business, such as asset and liability management activities, including net securities gains or losses, ACL for investment securities, certain trading activities, certain runoff consumer loan portfolios, private equity investments, intercompany eliminations, corporate overhead net of allocations, tax adjustments that are not allocated to business segments, exited businesses and the residual impact from funds transfer pricing operations.

CONFERENCE CALL AND SUPPLEMENTAL FINANCIAL INFORMATION

PNC Chairman and Chief Executive Officer William S. Demchak and Executive Vice President and Chief Financial Officer Robert Q. Reilly will hold a conference call for investors today at 10:00 a.m. Eastern Time regarding the topics addressed in this news release and the related earnings materials. Dial-in numbers for the conference call are (866) 604-1697 and (215) 268-9875 (international) and Internet access to the live audio listen-only webcast of the call is available at www.pnc.com/investorevents. PNC's second quarter 2025 earnings materials to accompany the conference call remarks will be available at www.pnc.com/investorevents prior to the beginning of the call. A telephone replay of the call will be available for 30 days at (877) 660-6853 and (201) 612-7415 (international), Access ID 13753957 and a replay of the audio webcast will be available on PNC's website for 30 days.

The PNC Financial Services Group, Inc. is one of the largest diversified financial services institutions in the United States, organized around its customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. For information about PNC, visit www.pnc.com. 

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