Executive Summary

PNC delivered a clean beat with EPS of $3.85 vs S&P Global consensus $3.56* and total revenue of $5.661B vs $5.603B*, driven by 2% average loan growth, 2 bps NIM expansion to 2.80%, and disciplined expenses (efficiency 60%). Bold positive operating leverage of 4% and 10% PPNR growth underscored the quality of the print .
Management nudged full‑year guidance: average loans raised to ~+1% (from stable), NII to ~+7% (from +6‑7%), while noninterest income trimmed to ~+4‑5% (from +5%) given heightened macro/tariff uncertainty; total revenue ~+6% and expense ~+1% maintained .
Credit quality stayed solid: NCOs $198MM (0.25%), NPLs down 8% QoQ; allowance at 1.62% of loans. Q3 guidance calls for higher NCOs ($275–$300MM) as fully‑reserved CRE office losses flow through .
Capital and returns remain strong: CET1 10.5%, AOCI improved by ~$0.6B; $1.0B capital returned (dividends + buybacks) and common dividend raised 6% to $1.70 per share, with $300–$400MM repurchases planned in Q3 .
Stock reaction catalysts: raised dividend and NII outlook, accelerating C&I growth with share gains in new markets, visible NIM path to ~2.90% by year‑end, and CCAR/SCB stability—all likely to support multiple resilience despite fee guidance caution and anticipated CRE charge‑off timing .

What Went Well and What Went Wrong

What Went Well

Positive operating leverage and PPNR growth: Revenue +4% QoQ with flat opex drove 4% positive operating leverage and 10% PPNR growth .
Commercial momentum and share gains: Average loans +2% QoQ on C&I +4% (highest new production in 10 quarters), with management attributing growth to both higher utilization (tariff‑related) and new production in expansion markets; “It’s largely share gain” in newer MSAs .
NIM/NII trajectory and guidance: NIM up to 2.80% (+2 bps), FY NII guide raised to ~+7%; management reaffirmed a path to ~2.90% margin by year‑end and sees momentum into 2026 .
- Quote: “We did up our guidance…to up 7% for NII and the momentum will continue into 2026.” – CFO Robert Reilly .

What Went Wrong

Fee guidance trimmed: FY noninterest income revised to ~+4‑5% (from +5%) citing heightened uncertainty, soft spots in corporate spending, and PE valuation headwinds, even as capital markets and asset management trends remain solid .
Charge‑offs expected to rise in Q3: Guidance for Q3 NCOs of $275–$300MM reflecting the pipeline of fully‑reserved CRE office losses timing through results (economic impact already reserved) .
Loan yield/spreads: Loan yields were flat; some mix‑driven spread pressure (tilt to higher credit quality) amid rational but competitive markets limits spread expansion near term .

Financial Results

Headline metrics vs prior periods and S&P Global consensus

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($MM)	$5,411	$5,452	$5,661
Diluted EPS ($)	$3.39	$3.51	$3.85
Net Interest Margin (%)	2.60	2.78	2.80
Efficiency Ratio (%)	62	62	60
Net Loan Charge‑offs ($MM)	$262	$205	$198
NCOs / Avg Loans (annualized, %)	0.33	0.26	0.25
Average Loans ($B)	$319.9	$316.6	$322.8
Average Deposits ($B)	$417.2	$420.6	$423.0
PPNR ($MM)	$2,054	$2,065	$2,278
EPS Consensus Mean ($)	—	$3.39*	$3.56*
Revenue Consensus Mean ($MM)	—	$5,482*	$5,603*

Notes: Consensus from S&P Global; PNC reports total revenue as $5.661B; S&P’s “Revenue Consensus Mean” may use a different definition. Values marked with * are retrieved from S&P Global.

EPS: $3.85 vs $3.56 consensus* → beat by $0.29 .
Revenue (PNC total revenue): $5,661MM vs $5,603MM consensus* → beat by ~$58MM .
Operating leverage +4%, PPNR +10% QoQ corroborate quality of beat .

Segment revenue

Segment Revenue ($MM)	Q2 2024	Q1 2025	Q2 2025
Retail Banking	$4,124	$3,542	$3,756
Corporate & Institutional Banking	$2,502	$2,630	$2,720
Asset Management Group	$388	$417	$423

Retail YoY is skewed by a $754MM gain from the 2024 Visa exchange program recorded in Q2’24, not recurring in 2025 .

Key performance indicators

KPI	Q2 2024	Q1 2025	Q2 2025
Net Interest Income ($MM)	$3,302	$3,476	$3,555
Fee Income (non‑GAAP) ($MM)	$1,777	$1,839	$1,894
CET1 Ratio (%)	10.2	10.6	10.5
Tangible Book Value ($/sh)	$89.12	$100.40	$103.96
AOCI ($B)	$(7.4)	$(5.2)	$(4.7)
NIB Deposits (% of total avg)	23%	22%	22%
Capital Returned ($MM)	—	~$800 (Q1)	~$1,000 (Q2)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Average Loans	FY 2025 vs FY 2024	Stable	~+1%	Raised
Net Interest Income	FY 2025 vs FY 2024	Up 6–7%	~+7%	Raised (upper end)
Noninterest Income	FY 2025 vs FY 2024	Up ~5%	~+4–5%	Lowered
Total Revenue	FY 2025 vs FY 2024	~+6%	~+6%	Maintained
Noninterest Expense	FY 2025 vs FY 2024	~+1%	~+1%	Maintained
Effective Tax Rate	FY 2025	~19%	~19%	Maintained
Avg Loans	Q3 2025 vs Q2 2025	—	~+1%	New
Net Interest Income	Q3 2025 vs Q2 2025	—	~+3%	New
Fee Income	Q3 2025 vs Q2 2025	—	+3–4%	New
Other Noninterest Income	Q3 2025	—	$150–$200MM	New
Total Revenue	Q3 2025 vs Q2 2025	—	+2–3%	New
Noninterest Expense	Q3 2025 vs Q2 2025	—	~+2%	New
Net Charge‑offs	Q3 2025	—	$275–$300MM	New (timing of CRE office)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 / Q1’25)	Current Period (Q2’25)	Trend
NIM/NII trajectory	NIM expanded to 2.78% in Q1; management expected record NII and positive operating leverage in 2025 .	NIM 2.80% (+2 bps); FY NII guide raised to ~+7%; targeting ~2.90% NIM by YE .	Improving, with momentum into 2026.
Loan growth & utilization	Q1 spot loans +$2.4B on higher C&I utilization/new production .	Avg loans +2%; C&I +4%; share gains in new markets; utilization aided by tariff front‑running .	Accelerating; mix toward higher‑quality credits.
Fees/capital markets	Q1: seasonally softer capital markets; fees down 2% QoQ .	Fees +3% QoQ; pipelines healthy; FY noninterest income nudged to +4–5% on uncertainty/PE marks .	Stabilizing near‑term; cautious FY.
Credit quality/CRE	Q1 NCOs 0.26%; CRE NCOs declining; ACL 1.64% .	NCOs 0.25%; NPLs -8% QoQ; Q3 NCOs guided higher on fully‑reserved CRE office pipeline .	Normalizing timing of CRE losses.
Deposits/pricing	Q1: NIB 22%; deposit mix management .	Rate paid flat; discuss being more competitive in new markets to gain share; NIB stays ~22% .	Stable cost; selective growth push.
Macro/tariffs	Q1: tariffs elevated downside risks .	Provision and loan utilization influenced by tariff considerations; FY fee guidance trimmed .	Uncertainty a headwind to risk appetite.
AI/technology	Q1: ongoing tech investment .	AI used to cut fraud costs, speed workflows; focus on long‑term delivery model shifts .	Execution phase; efficiency lever.
Stablecoin/crypto	—	Plans to enable crypto wallets/trading, industry‑led stablecoin participation; treasury use‑case optionality .	New capabilities under development.

Management Commentary

CEO Bill Demchak: “We had a very strong second quarter…Loan growth increased even through an uncertain macro environment…we delivered on what we said we would.” .
On scale and growth markets: “New markets and new clients are giving us an organic growth opportunity that we haven’t seen in years…It’s largely share gain” in higher‑growth MSAs .
CFO Robert Reilly: “Total revenue was up 4% and non‑interest expense was stable…provision reflected changes in macro scenarios, tariff considerations and portfolio activity…net income was $1.6B or $3.85 per share” .
On NII/NIM: “We did up our guidance…to up 7% for NII and the momentum will continue into 2026…tracking to that 2.90% range by year end” .

Q&A Highlights

Loan growth sustainability: Growth driven by both utilization (some tariff‑related inventory front‑running) and new production in growth markets; FY avg loan guide raised to +1%, but management doesn’t assume repeat of Q2’s spike .
NII/NIM path: FY NII now ~+7% with continued momentum into 2026; margin still tracking toward ~2.90% by year‑end on asset repricing and swaps .
Credit: Q3 NCOs guided up to $275–$300MM due to timing of fully‑reserved CRE office exposures; otherwise credit quality remains very good .
Fee outlook: FY noninterest income revised to +4–5% amid macro uncertainty; asset management ahead of plan; capital markets in line with January expectations .
Deposits/pricing: Rate paid essentially flat; debating more aggressive pricing in select new markets to accelerate deposit share, keeping overall costs contained .

Estimates Context

EPS: Actual $3.85 vs $3.56 S&P Global consensus* → beat by $0.29 .
Revenue: PNC‑reported total revenue $5.661B vs S&P Global consensus $5.603B* → beat by ~$58MM .
Estimate counts: Q2 EPS (15), revenue (15) estimates*.

Values marked with * are retrieved from S&P Global.

Key Takeaways for Investors

Core earnings quality improved: positive operating leverage, PPNR +10% QoQ, NIM expansion, and C&I‑led loan growth point to durable core trends even as fees are managed conservatively .
Guidance tilts constructive: FY loans raised to +1% and NII to ~+7%; Q3 revenue +2–3% with NII +3% provides near‑term visibility; watch fee cadence and “other” noninterest income normalization .
Credit normalization is orderly: Q3 NCO lift reflects timing of already reserved CRE office exposures; NPLs and delinquencies improved QoQ; ACL at 1.62% of loans remains robust .
Margin vector remains a tailwind: Repricing and swaps support a path toward ~2.90% NIM by YE; stable deposit costs and selective pricing in new markets help sustain NII trajectory into 2026 .
Capital return stepping up: Dividend increased to $1.70; buybacks expected at $300–$400MM in Q3; SCB at the 2.5% regulatory minimum and CET1 10.5% underpin flexibility .
Execution in growth markets is a differentiator: Share gains in newer MSAs are accelerating C&I and DDA growth, supporting a medium‑term thesis of above‑industry growth with disciplined risk .
Watch list: macro/tariff policy path (utilization and fees), capital markets activity into H2, and CRE office charge‑off timing—but base case remains favorable given reserves and operating momentum .

Appendix – Additional Q2 details:

Total revenue $5,661MM (+4% QoQ; +5% YoY), NII $3,555MM (+2% QoQ; +8% YoY), fee income (non‑GAAP) $1,894MM (+3% QoQ; +7% YoY) .
Efficiency improved to 60% (from 62% in Q1); TBV/share rose 4% QoQ to $103.96; AOCI improved ~$0.6B QoQ to $(4.7)B .
Capital return: $640MM common dividends and $335MM buybacks in Q2; Q3 buybacks planned at $300–$400MM .

PNC FINANCIAL SERVICES GROUP, INC. (PNC)·Q2 2025 Earnings Summary