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

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

Income Statement Highlights

First quarter 2025 compared with fourth quarter 2024

• Total revenue of $5.5 billion decreased $115 million reflecting two fewer days in the quarter, seasonality and a slowdown in capital markets activity.
  • Net interest income of $3.5 billion decreased $47 million, or 1%, driven by two fewer days in the quarter, partially offset by the benefit of lower funding costs and fixed rate asset repricing.
    • Net interest margin of 2.78% increased 3 basis points.
  • Fee income of $1.8 billion decreased $30 million, or 2%, due to a slowdown in capital markets activity and seasonality.
  • Other noninterest income of $137 million decreased $38 million and included negative $40 million of Visa derivative adjustments primarily related to litigation escrow funding.
• Noninterest expense of $3.4 billion decreased $119 million, or 3%, reflecting asset impairments recognized in the fourth quarter of $97 million as well as seasonally lower other noninterest expense and marketing.
• Provision for credit losses was $219 million in the first quarter reflecting changes in macroeconomic factors and portfolio activity.
• The effective tax rate was 18.8% for the first quarter and 14.6% for the fourth quarter. The fourth quarter included a benefit from the resolution of certain tax matters.

Balance Sheet Highlights

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

• Average loans of $316.6 billion decreased $2.4 billion, or 1%, driven by lower commercial real estate loans.
  • Loans at March 31, 2025 of $318.9 billion increased $2.4 billion, or 1%, 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.
• Credit quality performance:
  • Delinquencies of $1.4 billion increased $49 million, or 4%, and included higher consumer loan delinquencies, primarily related to forbearance activity associated with the California wildfires.
  • Total nonperforming loans of $2.3 billion were stable.
  • Net loan charge-offs of $205 million decreased $45 million primarily due to lower commercial real estate net loan charge-offs.
  • The allowance for credit losses was stable at $5.2 billion. The allowance for credit losses to total loans was 1.64% at both March 31, 2025 and December 31, 2024.
• Average investment securities of $142.2 billion declined $1.7 billion.
• Average deposits of $420.6 billion decreased $4.6 billion due to seasonally lower commercial deposits and a decline in brokered time deposits. Noninterest-bearing deposits as a percentage of total average deposits were 22%.
• Average borrowed funds of $64.5 billion decreased $2.7 billion, or 4%, driven by lower Federal Home Loan Bank advances.
• PNC maintained a strong capital and liquidity position:
  • 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.
  • PNC returned $0.8 billion of capital to shareholders, reflecting $0.6 billion of dividends on common shares and $0.2 billion of common share repurchases.
  • The Basel III common equity Tier 1 capital ratio was an estimated 10.6% at March 31, 2025 and was 10.5% at December 31, 2024.
  • PNC's average LCR for the three months ended March 31, 2025 was 108%, 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.

CONSOLIDATED REVENUE REVIEW

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.

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 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.

CONSOLIDATED BALANCE SHEET REVIEW

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 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. 

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.

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 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.

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.

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

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.

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

Retail Banking Highlights

First quarter 2025 compared with fourth quarter 2024

• Earnings increased 4%, driven by lower noninterest expense, partially offset by a higher provision for credit losses.
  • Noninterest income was stable.
  • Noninterest expense decreased 5%, primarily due to asset impairments recognized in the fourth quarter.
  • Provision for credit losses of $168 million in the first quarter of 2025 reflected the impact of changes in macroeconomic factors and portfolio activity.
• Average loans decreased 1% and included lower residential mortgage and credit card loan balances.
• Average deposits decreased 1%, driven primarily by lower brokered time deposits, partially offset by growth in savings and time deposits.

First quarter 2025 compared with first quarter 2024

• Earnings increased 2%, primarily driven by higher net interest income, partially offset by higher noninterest expense and lower noninterest income.
  • Noninterest income decreased 8% due to lower residential mortgage revenue and higher negative Visa derivative adjustments primarily related to litigation escrow funding.
  • Noninterest expense increased 4% due to technology investments, higher marketing spend and increased customer activity.
• Average loans declined 2%, primarily due to lower residential mortgage loans.
• Average deposits decreased 2% and included lower brokered time deposits.

Corporate & Institutional Banking Highlights

First quarter 2025 compared with fourth quarter 2024

• Earnings decreased 9%, primarily due to lower noninterest and net interest income, partially offset by lower noninterest expense.
  • Noninterest income decreased 8%, reflecting a seasonal decline in business activity as well as lower merger and acquisition advisory activity and customer-related trading revenue.
  • Noninterest expense declined 3%, and included lower variable compensation associated with decreased business activity.
  • Provision for credit losses of $49 million in the first quarter of 2025 reflected the impact of changes in macroeconomic factors and portfolio activity.
• Average loans decreased 1% and included lower PNC real estate loans, partially offset by loan growth in PNC's corporate banking business.
• Average deposits decreased 2%, reflecting seasonal declines in corporate deposits.

First quarter 2025 compared with first quarter 2024

• Earnings increased 11%, reflecting higher net interest and noninterest income, partially offset by higher noninterest expense.
  • Noninterest income increased 10%, primarily due to higher merger and acquisition advisory activity and growth in treasury management product revenue.
  • Noninterest expense increased 4%, due to continued investments to support business growth and higher variable compensation associated with increased business activity.
• Average loans decreased 1% and included lower PNC real estate loans, partially offset by growth in PNC's business credit and corporate banking businesses.
• Average deposits increased 4% due to growth in interest-bearing deposits.

Asset Management Group Highlights

First quarter 2025 compared with fourth quarter 2024

• Earnings increased 10%, reflecting higher net interest income.
  • Noninterest income was stable.
  • Noninterest expense increased 1%, primarily driven by higher personnel costs.
• Discretionary client assets under management were stable.
• Average loans were stable.
• Average deposits increased 1%, driven by higher interest-bearing deposits.

First quarter 2025 compared with first quarter 2024

• Earnings increased 16%, due to higher net interest and noninterest income, partially offset by higher noninterest expense.
  • Noninterest income increased 6%, reflecting higher average equity markets.
  • Noninterest expense increased 5% and included increased technology investments.
• Discretionary client assets under management increased 8% and included the impact from higher spot equity markets.
• Average loans were stable.
• 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 first 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 13752054 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.

[TABULAR MATERIAL FOLLOWS]