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The PNC Financial Services Group, Inc.’s PNC first-quarter 2025 adjusted earnings per share of $3.51 surpassed the Zacks Consensus Estimate of $3.40. In the prior-year quarter, the company reported earnings per share of $3.36.
Results were aided by a rise in fee income, NII and the loan balance. However, an increase in expenses and provision for credit losses acted as spoilsports.
Net income (GAAP basis) was $1.49 billion, which jumped 11.5% from the prior-year quarter.
PNC Financial’s Revenues & Expenses Rise Y/Y
Total quarterly revenues were $5.48 billion, up 6.4% year over year. The top line surpassed the Zacks Consensus Estimate by 0.02%.
NII was $3.47 billion, which rose 6.5% from the year-ago quarter. The net interest margin (NIM) increased 21 basis points to 2.78%. Our estimate for NII and NIM was $3.44 billion and 2.69%, respectively.
Non-interest income increased 5.1% year over year to $1.97 billion. The improvement was driven by a rise in all the components of fee income, except for residential and commercial mortgage income. Our estimate was $2.03 billion.
Non-interest expenses totaled $3.39 billion, which rose 1.6% from the year-ago figure. Our estimate was $3.43 billion.
The efficiency ratio was 62% compared with 65% in the year-ago quarter. A fall in the efficiency ratio reflects increased profitability.
PNC’s Loan Balance Rises, Deposits Decline
As of March 31, 2025, total loans were $318.9 billion, which increased 0.8% on a sequential basis. Our estimate for total loans was $316 billion. However, total deposits decreased marginally from the end of the previous quarter to $422.9 billion. Our estimate for total deposits was $424.7 billion.
PNC Financial’s Credit Quality: Mixed Bag
Non-performing loans fell 3.7% year over year to $2.3 billion. Further, net loan charge-offs were $205 million, which declined 15.6% year over year. Our estimate for non-performing loans was the same as reported.
The company reported a provision for credit losses of $219 million in the first quarter, which surged 41.3% from the year-earlier quarter. Our estimate for the metric was $250 million.
The allowance for credit losses decreased 2.7% to $5.2 billion. Our estimate for the metric was $5.3 billion.
PNC’s Capital Position & Profitability Ratios Improves
As of March 31, 2025, the Basel III common equity tier 1 capital ratio was 10.6% compared with 10.1% as of March 31, 2024.
Return on average assets and average common shareholders’ equity were 1.09% and 11.60%, respectively, compared with 0.97% and 11.39% witnessed in the prior-year quarter.