PNC Reports Third Quarter 2025 Net Income of $1.8 Billion, $4.35 Diluted EPS

From Bill Demchak, PNC Chairman and Chief Executive Officer:
"We delivered another great quarter with better than expected financial results and steady client growth across all our business lines. Fee income grew 9% and expenses were well-controlled which contributed to another quarter of positive operating leverage. Credit performed well and we continued to build on our strong capital levels. The planned acquisition of FirstBank positions us for accelerated expansion in Colorado and Arizona as we continue to strategically grow our national franchise."

Pending Acquisition of FirstBank

• On September 8, 2025, PNC announced a definitive agreement to acquire FirstBank Holding Company, including its banking subsidiary FirstBank, headquartered in Lakewood, CO for implied consideration of $4.1 billion. FirstBank operates 95 branches, with a leading position in Colorado and a substantial presence in Arizona. As of June 30, 2025, FirstBank had $26.8 billion in assets. The combination will more than triple PNC's network in Colorado to 120 branches and increase PNC's presence in Arizona to more than 70 branches. The transaction is expected to close in early 2026, subject to receipt of all required approvals and other customary closing conditions.

Income Statement Highlights

Third quarter 2025  compared with second quarter 2025

• Total revenue of $5.9 billion increased $254 million, or 4%, driven by growth in both noninterest income and net interest income.
  • Net interest income of $3.6 billion increased $93 million, or 3%, driven by the continued benefit of fixed rate asset repricing, loan growth and one additional day in the quarter.
    • Net interest margin declined 1 basis point to 2.79%, driven by average commercial deposit growth of 5%.
  • Fee income of $2.1 billion increased $175 million, or 9%, driven by broad-based growth across categories.
  • Other noninterest income of $198 million decreased $14 million reflecting negative Visa derivative adjustments, partially offset by higher private equity revenue.
• Noninterest expense of $3.5 billion increased 2% driven by increased business activity and continued investments in technology and branches.
• Provision for credit losses was $167 million in the third quarter.
• The effective tax rate was 20.3% for the third quarter and 18.8% for the second quarter.

Balance Sheet Highlights

Third quarter 2025 compared with second quarter 2025 or September 30, 2025 compared with June 30, 2025

• Average loans of $325.9 billion increased $3.2 billion, or 1%, driven by growth in the commercial and industrial portfolio of $4.3 billion, or 2%, partially offset by a decline in commercial real estate loans of $1.0 billion, or 3%. Consumer loan balances were stable.
• Credit quality performance:
  • Delinquencies of $1.2 billion decreased $70 million, or 5%, due to lower commercial and consumer loan delinquencies.
  • Total nonperforming loans of $2.1 billion were stable.
  • Net loan charge-offs of $179 million decreased $19 million reflecting lower commercial real estate net loan charge-offs.
  • The allowance for credit losses was stable at $5.3 billion. The allowance for credit losses to total loans was 1.61% at September 30, 2025 and 1.62% at June 30, 2025.
• Average investment securities of $144.4 billion increased $2.5 billion, or 2%, reflecting net purchase activity, primarily of agency residential mortgage-backed securities late in the second quarter.
• Average deposits of $431.8 billion increased $8.9 billion, or 2%, due to commercial deposit growth. Consumer deposits were stable.
• PNC maintained a strong capital and liquidity position:
  • On October 2, 2025, the PNC board of directors declared a quarterly cash dividend on common stock of $1.70 per share to be paid on November 5, 2025 to shareholders of record at the close of business October 14, 2025.
  • PNC returned $1.0 billion of capital to shareholders, reflecting $0.7 billion of dividends on common shares and $0.3 billion of common share repurchases.
  • The Basel III common equity Tier 1 capital ratio was an estimated 10.6% at September 30, 2025 and was 10.5% at June 30, 2025.
  • PNC's average LCR for the three months ended September 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 third quarter of 2025 increased $254 million compared to the second quarter of 2025 and $483 million compared to the third quarter of 2024. In each comparison the increase was driven by growth in both noninterest income and net interest income.

Net interest income of $3.6 billion increased $93 million from the second quarter of 2025, driven by the continued benefit of fixed rate asset repricing, loan growth and one additional day in the quarter. Compared to the third quarter of 2024, net interest income increased $238 million due to lower funding costs, the benefit of fixed rate asset repricing and loan growth.

Net interest margin was 2.79% in the third quarter of 2025, decreasing 1 basis point from the second quarter of 2025 driven by average commercial deposit growth of 5%. Compared to the third quarter of 2024, net interest margin increased 15 basis points reflecting the benefit of fixed rate asset repricing.

Noninterest income for the third quarter of 2025 increased $161 million, or 8%, compared with the second quarter of 2025 driven by strong fee income growth. Asset management and brokerage fees increased $13 million driven by higher average equity markets. Capital markets and advisory revenue increased $111 million primarily due to an increase in merger and acquisition advisory activity, higher underwriting fees, and increased loan syndication revenue. Lending and deposit services increased $18 million primarily due to increased customer activity. Residential and commercial mortgage revenue increased $33 million driven by higher mortgage servicing rights valuation, net of economic hedge, and increased residential mortgage production revenue. Other noninterest income decreased $14 million reflecting negative Visa derivative adjustments, partially offset by higher private equity revenue. Visa derivative adjustments were negative $35 million in the third quarter of 2025 and positive $2 million in the second quarter of 2025.

Noninterest income for the third quarter of 2025 increased $245 million, or 12%, from the third quarter of 2024, driven by higher other noninterest income and broad-based fee income growth. Other noninterest income in the third quarter of 2025 included negative $35 million of Visa derivative adjustments compared to negative $128 million in the third quarter of 2024.

Noninterest expense for the third quarter of 2025 increased $78 million compared to the second quarter of 2025 and $134 million compared with the third quarter of 2024. In both comparisons, the increase was driven by increased business activity and continued investments in technology and branches.

The effective tax rate was 20.3% for the third quarter of 2025, 18.8% for the second quarter of 2025 and 19.2% for the third quarter of 2024.

Average loans increased $3.2 billion compared to the second quarter of 2025. Average commercial loans increased $3.4 billion, driven by growth in the commercial and industrial portfolio of $4.3 billion partially offset by a decline in commercial real estate loans of $1.0 billion. Average consumer loans were stable as growth, primarily in the auto and credit card loan portfolio, was offset by lower residential mortgage loans.

In comparison to the third quarter of 2024, average loans increased $6.3 billion. Average commercial loans increased $7.8 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 September 30, 2025 increased $0.3 billion and $5.2 billion from June 30, 2025 and September 30, 2024, respectively. In both comparisons, the increase was due to growth in commercial and industrial loans, partially offset by lower commercial real estate loans.

Average investment securities of $144.4 billion in the third quarter of 2025 increased $2.5 billion compared to the second quarter of 2025 and $2.1 billion compared to the third quarter of 2024. In both comparisons, the increase reflected net purchase activity, primarily of agency residential mortgage-backed securities.

The duration of the investment securities portfolio was 3.4 years as of September 30, 2025 and June 30, 2025 and 3.3 years as of September 30, 2024. Net unrealized losses on available-for-sale securities were $2.1 billion at September 30, 2025, $2.6 billion at June 30, 2025 and $2.3 billion at September 30, 2024. 

Average Federal Reserve Bank balances for the third quarter of 2025 were $34.2 billion, increasing $3.4 billion from the second quarter of 2025 and decreasing $10.7 billion from the third quarter of 2024. In comparison to the second quarter of 2025, the increase was driven by deposit growth. Compared to the third quarter of 2024, the decline reflected lower borrowed funds outstanding.

Third quarter 2025 average deposits of $431.8 billion increased $8.9 billion compared to the second quarter of 2025 driven by commercial deposit growth. Compared to the third quarter of 2024, average deposits increased $9.7 billion reflecting growth in both commercial and consumer deposits, partially offset by lower brokered time deposits.

Average borrowed funds of $66.3 billion in the third quarter of 2025 increased $1.0 billion compared to the second quarter of 2025 and decreased $9.8 billion compared to the third quarter of 2024. In comparison to the third quarter of 2024, the decrease was primarily driven by lower Federal Home Loan Bank advances, partially offset by higher senior debt outstanding.

PNC maintained a strong capital position. Common shareholders' equity at September 30, 2025 increased $1.3 billion from June 30, 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 $4.1 billion at September 30, 2025 improved from negative $4.7 billion at June 30, 2025 and negative $5.1 billion at September 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 third quarter of 2025, PNC returned $1.0 billion of capital to shareholders, reflecting $0.7 billion of dividends on common shares and $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 37% were still available for repurchase at September 30, 2025.

Share repurchase activity in the fourth quarter of 2025 is expected to be generally consistent with our third 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.

PNC's SCB for the four-quarter period beginning October 1, 2025 is the regulatory minimum of 2.5%. On October 2, 2025, the PNC board of directors declared a quarterly cash dividend on common stock of $1.70 per share to be paid on November 5, 2025 to shareholders of record at the close of business October 14, 2025.

At September 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 $167 million in the third quarter of 2025, $254 million in the second quarter of 2025 and $243 million in the third quarter of 2024.

Net loan charge-offs were $179 million in the third quarter of 2025, decreasing $19 million compared to the second quarter of 2025 and $107 million compared to the third quarter of 2024. In both comparisons, the decline reflected lower commercial real estate net loan charge-offs.

The allowance for credit losses was $5.3 billion at September 30, 2025, June 30, 2025 and September 30, 2024. The allowance for credit losses as a percentage of total loans was 1.61% at September 30, 2025, 1.62% at June 30, 2025 and 1.65% at September 30, 2024.

 Delinquencies at September 30, 2025 were $1.2 billion, decreasing $70 million from June 30, 2025, due to lower commercial and consumer loan delinquencies. Compared to September 30, 2024, delinquencies decreased $42 million reflecting lower consumer loan delinquencies.

Nonperforming loans were $2.1 billion at September 30, 2025 and June 30, 2025, and $2.6 billion at September 30, 2024. Compared to September 30, 2024, the improvement was primarily driven by lower commercial real estate nonperforming loans.

Retail Banking Highlights

Third quarter 2025  compared with second quarter 2025

• Earnings decreased 3%, driven by increased noninterest expense and a higher provision for credit losses, partially offset by higher revenue.
  • Noninterest income increased 1%, primarily due to higher residential mortgage revenue and increased customer activity, partially offset by negative Visa derivative adjustments.
  • Noninterest expense increased 3%, and included the impact of continued technology and branch investments.
  • Provision for credit losses of $126 million in the third quarter of 2025 reflected portfolio activity.
• Average loans decreased 1%, as growth in auto and credit card loans was more than offset by lower residential real estate and commercial loans.
• Average deposits were stable.

Third quarter 2025 compared with third quarter 2024

• Earnings increased 13%, driven by higher revenue, partially offset by increased noninterest expense.
  • Noninterest income increased 13%, primarily due to lower negative Visa derivative adjustments and increased business activity, partially offset by a decline in residential mortgage servicing rights valuation, net of economic hedge.
  • Noninterest expense increased 5%, primarily driven by technology investments.
• Average loans decreased 2%, as growth in auto loans was more than offset by lower residential real estate and commercial loans.
• Average deposits increased 2%, primarily due to higher consumer time deposits.

Corporate & Institutional Banking Highlights

Third quarter 2025  compared with second quarter 2025

• Earnings increased 19%, reflecting a lower provision for credit losses as well as higher noninterest and net interest income, partially offset by higher noninterest expense.
  • Noninterest income increased 11%, driven by broad-based growth including increased capital markets and advisory fees.
  • Noninterest expense increased 3%, primarily due to higher variable compensation associated with increased business activity.
  • Provision for credit losses of $44 million in the third quarter of 2025 included improved commercial real estate portfolio expectations.
• 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 6%, reflecting growth in interest-bearing deposits.

Third quarter 2025  compared with third quarter 2024

• Earnings increased 22%, driven by higher net interest and noninterest income as well as a lower provision for credit losses, partially offset by higher noninterest expense.
  • Noninterest income increased 10%, reflecting broad-based growth.
  • Noninterest expense increased 3%, reflecting continued investments to support business growth and higher variable compensation associated with increased business activity.
• Average loans increased 4%, 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 6%, due to higher interest-bearing deposits.

Asset Management Group Highlights

Third quarter 2025  compared with second quarter 2025

• Earnings decreased 9%, due to a higher provision for credit losses, higher noninterest expense and lower net interest income, partially offset by higher noninterest income.
  • Noninterest income increased 4%, primarily driven by higher average equity markets.
  • Noninterest expense increased 2%, and included increased technology investments and the timing of marketing spend.
• Discretionary client assets under management increased 5%, as a result of higher spot equity markets and positive net flows.
• Average loans and deposits were stable.

Third quarter 2025 compared with third quarter 2024

• Earnings increased 22%, due to higher revenue, partially offset by a higher provision for credit losses and higher noninterest expense.
  • Noninterest income increased 5%, reflecting higher average equity markets.
  • Noninterest expense increased 1%, and included continued investments to support business growth.
• Discretionary client assets under management increased 7%, driven by higher spot equity markets and positive net flows.
• Average loans and deposits were stable.

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 11:00 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 third 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 13753961 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.

CONTACTS

MEDIA:
Kristen Pillitteri
(412) 762-4550
media.relations@pnc.com 

INVESTORS:
Bryan Gill
(412) 768-4143
investor.relations@pnc.com 

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