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, April 15, 2025 /PRNewswire/ -- 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
▪ Net interest income decreased 1% driven by two fewer days in the quarter, partially offset by the benefit of lower funding costs and fixed rate asset repricing
– NIM expanded 3 bps to 2.78%
▪ Fee income decreased 2% due to a slowdown in capital markets activity and seasonality
▪ Other noninterest income of $137 million included negative $40 million of Visa derivative adjustments
▪ Noninterest expense decreased 3% as a result of 4Q24 asset impairments and seasonality
Balance Sheet
▪ Average loans decreased $2.4 billion, or 1%
– Spot loans increased $2.4 billion, reflecting $4.7 billion, or 3%, growth in commercial and industrial loans
▪ Average deposits decreased $4.6 billion, or 1%
▪ Net loan charge-offs were $205 million, or 0.26% annualized to average loans
▪ AOCI improved $1.3 billion to negative $5.2 billion reflecting the movement of interest rates
▪ TBV per share increased 5% to $100.40
▪ Maintained strong capital position
– CET1 capital ratio of 10.6%
– Repurchased approximately $200 million of common shares
Fee income (non-GAAP)
1,839
1,869
1,746
Other noninterest income
137
175
135
Noninterest income
1,976
2,044
1,881
Revenue
5,452
5,567
5,145
Noninterest expense
3,387
3,506
3,334
Pretax, pre-provision earnings (non-GAAP)
2,065
2,061
1,811
Provision for credit losses
219
156
155
Net income
1,499
1,627
1,344
Per Common Share
Diluted earnings per share (EPS)
$ 3.51
$ 3.77
$ 3.10
Average diluted common shares outstanding
398
399
400
Book value
127.98
122.94
113.30
Tangible book value (TBV) (non-GAAP)
100.40
95.33
85.70
Balance Sheet & Credit Quality
Average loans In billions
$ 316.6
$ 319.1
$ 320.6
Average securities In billions
142.2
143.9
135.4
Average deposits In billions
420.6
425.3
420.2
Accumulated other comprehensive income (loss) (AOCI)
In billions
(5.2)
(6.6)
(8.0)
Net loan charge-offs
205
250
243
Allowance for credit losses to total loans
1.64 %
1.64 %
1.68 %
Selected Ratios
Return on average common shareholders' equity
11.60 %
12.38 %
11.39 %
Return on average assets
1.09
1.14
0.97
Net interest margin (NIM) (non-GAAP)
2.78
2.75
2.57
Noninterest income to total revenue
36
37
37
Efficiency
62
63
65
Effective tax rate
18.8
14.6
18.8
Common equity Tier 1 (CET1) capital ratio
10.6
10.5
10.1
See non-GAAP financial measures in the Consolidated Financial Highlights accompanying this release. Totals may not sum due to rounding.
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."
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.
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
$ 1.60
$ 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
Change
1Q25 vs
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.
Noninterest Income
Change
Change
1Q25 vs
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
Change
1Q25 vs
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
85
112
64
(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.
CONSOLIDATED BALANCE SHEET REVIEW
Loans
Change
Change
03/31/25 vs
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) %
(1) %
Consumer
99.5
100.4
101.4
(1) %
(2) %
Average Loans
$ 316.6
$ 319.1
$ 320.6
(1) %
(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
Change
1Q25 vs
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.
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
Change
1Q25 vs
1Q25 vs
