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PNC FINANCIAL SERVICES GROUP, INC. (PNC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 delivered solid growth: total revenue $5,567M (+2% q/q, +4% y/y), NII $3,523M (+3% q/q), and NIM expanded 11 bps to 2.75% as lower funding costs and fixed asset repricing flowed through .
  • Fee income fell 4% q/q on unusually strong Q3 mortgage and capital markets activity, but “Other” noninterest income rose on less negative Visa derivative marks; noninterest expense rose 5% including $97M asset impairments, partially offset by $18M FDIC special assessment reduction (net $62M after-tax) .
  • Net income was $1,627M ($3.77 diluted EPS), up 8% q/q; average deposits increased $3.1B q/q, CET1 improved to an estimated 10.5% (LCR 107%) .
  • 2025 outlook: management guides to record NII and positive operating leverage—FY revenue +~6%, NII +6–7%, fees +~5%, opex +~1%, tax ~19%; Q1 2025: NII down 2–3% (two fewer days), fees stable, other noninterest $150–$200M (ex-Visa), opex down 2–3%, NCOs ~$300M .
  • Stock reaction catalysts: accelerating NIM trajectory (“approaching 3% by end of ’25”), deposit betas trending high-40s on rate cuts, and continued CRE office reserve adequacy while balances and NPLs decline; management emphasized rate neutrality and hedging to lock reinvestment yields via forward starting swaps .

What Went Well and What Went Wrong

What Went Well

  • Net interest income and margin expansion: NII +3% q/q; NIM 2.75% (+11 bps) on lower funding costs and fixed asset repricing .
  • Deposit and capital strength: average deposits +$3.1B q/q; CET1 estimated 10.5%, average LCR 107% in Q4, TBV/share $95.33 .
  • Management confidence and momentum: “We achieved strong results…record revenue…positive operating leverage…I've never been more excited about the opportunities in front of us” — CEO Bill Demchak .

What Went Wrong

  • Fee income down 4% q/q on normalization from elevated Q3 mortgage and capital markets activity; mortgage revenue -33% q/q .
  • Noninterest expense +5% q/q, including $97M asset impairments (tech) and higher seasonal marketing spend (partially offset by $18M FDIC assessment reduction) .
  • Delinquencies +8% q/q to $1.382B (commercial-driven) and y/y net charge-offs +25% to $250M, though NPLs -10% q/q .

Financial Results

Quarterly trend (Q2 → Q3 → Q4 2024)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions)$5,411 $5,432 $5,567
Net Interest Income ($USD Millions)$3,302 $3,410 $3,523
Noninterest Income ($USD Millions)$2,109 $2,022 $2,044
Noninterest Expense ($USD Millions)$3,357 $3,327 $3,506
Provision for Credit Losses ($USD Millions)$235 $243 $156
Net Income ($USD Millions)$1,477 $1,505 $1,627
Diluted EPS ($)$3.39 $3.49 $3.77
Net Interest Margin (%)2.60 2.64 2.75
Efficiency Ratio (%)62 61 63
Return on Assets (%)1.05 1.05 1.14
CET1 Ratio (%)10.2 10.3 10.5 (est.)

Year-over-year (Q4 2023 → Q4 2024)

MetricQ4 2023Q4 2024
Total Revenue ($USD Millions)$5,361 $5,567
Net Interest Income ($USD Millions)$3,403 $3,523
Noninterest Income ($USD Millions)$1,958 $2,044
Net Income ($USD Millions)$883 $1,627
Diluted EPS ($)$1.85 $3.77
Net Interest Margin (%)2.66 2.75
Efficiency Ratio (%)76 63
Return on Assets (%)0.62 1.14
CET1 Ratio (%)9.9 10.5 (est.)

Segment net income

Segment Net Income ($USD Millions)Q2 2024Q3 2024Q4 2024
Retail Banking$1,715 $1,164 $1,074
Corporate & Institutional Banking$1,046 $1,197 $1,365
Asset Management Group$103 $104 $103
Other$(1,405) $(975) $(932)
Net income ex-NCI$1,459 $1,490 $1,610

KPIs

KPIQ2 2024Q3 2024Q4 2024
Average Deposits ($USD Billions)$417.2 $422.1 $425.3
Average Loans ($USD Billions)$319.9 $319.6 $319.1
Net Loan Charge-offs ($USD Millions)$262 $286 $250
Allowance for Credit Losses ($USD Millions)$5,353 $5,314 $5,205
Nonperforming Loans ($USD Millions)$2,503 $2,578 $2,326
Tangible Book Value per Share ($)$89.12 $96.98 $95.33
AOCI ($USD Billions)$(7.4) $(5.1) $(6.6)
LCR (avg, %)108 109 107

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueFY 2025N/A~+6% y/y New
Net Interest IncomeFY 2025N/A+6–7% y/y New
Noninterest IncomeFY 2025N/A~+5% y/y New
Noninterest ExpenseFY 2025N/A~+1% y/y New
Effective Tax RateFY 2025N/A~19% New
Average LoansFY 2025N/AStable (spot +2–3%) New
NIMFY 2025 exitN/A“Approaching 3% by end of ’25” New
Net Interest IncomeQ1 2025N/A-2% to -3% q/q (75% due to fewer days) New
Average LoansQ1 2025N/A~-1% q/q New
Fee IncomeQ1 2025N/AStable New
Other Noninterest IncomeQ1 2025N/A$150–$200M, ex-Visa New
Total RevenueQ1 2025N/A-1% to -2% q/q New
Total Noninterest ExpenseQ1 2025N/A-2% to -3% q/q New
Net Charge-offsQ1 2025N/A~$300M New
Common DividendNext Pay DateN/A$1.60 per share (declared Jan 3; payable Feb 5) Maintained

Note: No prior explicit numeric guidance was provided in Q3/Q2 materials beyond directional commentary; entries marked N/A reflect lack of prior quantified guidance .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
NII/NIM trajectoryNII and NIM increased; beginning trajectory toward record NII in 2025 NII +3% q/q; NIM +4 bps; reiterated record NII in 2025 NII +3% q/q; NIM +11 bps; FY25 NII +6–7% guide Strengthening
Deposit mix/betasAvg deposits relatively stable; IB % 77% Avg deposits +1% q/q; IB 77%, NIB 23% Avg deposits +$3.1B; IB 77%, NIB 23%; deposit beta cumulative 47% and expected high-40s Stable mix; favorable beta
CRE office exposureNPLs up; nonperformers 2.5B NPLs 2.6B; office stress acknowledged Office balances down ~7%; reserves increased to 13%; NCOs declined q/q Managed down; still stressed
Technology/online banking——New cloud-native online banking rollout to accelerate product changes and improve UX New initiative
Branch expansion——Doubling new branch builds; focus on South Florida/TX/AZ/CO; Salt Lake City entry Expansion accelerating
Capital and buybacksCET1 10.2%; dividend raised to $1.60 CET1 10.3%; repurchases >$0.1B CET1 10.5%; repurchases >$0.2B; continued $100–$200M quarterly buybacks Building capacity
Hedging/swapsSecurities repositioning to higher yields Duration ~3.3 years; AFS unrealized losses improved Using received-fixed and forward starters to lock reinvestment yields; portfolio duration ~3.4 yrs Rate neutrality reinforced
Visa derivative impactsGain $754M and negative derivative -$116M Negative Visa derivative -$128M Negative Visa derivative -$23M; less drag on “Other” income Headwind easing

Management Commentary

  • “We generated record revenue and strengthened our capital levels…delivered positive operating leverage…as we enter 2025, I have never been more excited” — Bill Demchak, CEO .
  • “Our forward guidance solidly points to record NII in 2025…meaningful positive operating leverage…balance sheet is well positioned; adequately reserved; strong capital” — CEO prepared remarks .
  • “Deposit beta cumulative 47%…expect high-40s in rate-cut cycle; NIM to continue increasing; approaching 3% exit for ’25; rate neutral for 2025” — CFO Rob Reilly .
  • “Office CRE balances and NPLs declined; reserves increased to 13%; expect additional charge-offs but believe we are adequately reserved” — CFO .
  • “Cloud-native online banking…introduce products overnight; complement physical expansion; improve consumer digital scores” — CEO .

Q&A Highlights

  • NIM trajectory: Management confirmed “approaching 3% by end of ’25” while maintaining rate neutrality; NII down 2–3% in Q1 (two fewer days) then improving through fixed asset repricing .
  • Deposit dynamics: Expect deposits +1–2% in 2025, with seasonal commercial dip in Q1; DDA growth in 2024 bodes well for share gains in expansion markets .
  • Loan growth/utilization: Strong unfunded commitments indicate intent, but utilization remains low given uncertainty and cost of capital; guide assumes stable average loans (spot +2–3%) .
  • Capital return: Ongoing buybacks in $100–$200M range per quarter feasible alongside loan growth; CET1 (revised incl. AOCI) stable despite rate moves .
  • Hedging strategy: Increased forward-start swaps to lock reinvestment yields as fixed assets roll; continue through ’25 and begin biting off ’26–’27 .

Estimates Context

  • Wall Street consensus (S&P Global) EPS and revenue estimates for Q4 2024 were unavailable due to API limits at the time of retrieval; therefore, beat/miss vs consensus cannot be assessed. Values from S&P Global were not retrievable; no estimates are shown.
  • Given estimate unavailability, investors should note management’s FY 2025 guide (revenue +~6%; NII +6–7%; fees +~5%; opex +~1%; tax ~19%) as the anchor for forward revisions .

Key Takeaways for Investors

  • NIM inflection and fixed asset repricing are accelerating earnings power; management expects NIM to approach 3% by YE25 while remaining rate neutral—supportive for multiple expansion if delivered .
  • Deposit betas trending high-40s in a cutting cycle and deposit growth in expansion markets should sustain funding cost relief and NII strength .
  • CRE office risk is being actively managed down (balances, NPLs, NCOs) with increased reserves (~13%); near-term charge-off lumpiness persists but appears contained relative to portfolio size .
  • Operating leverage setup for 2025 is favorable: revenue +~6% vs opex +~1%; Q1 dip is calendar/seasonality (two fewer days) rather than trend break—watch cadence from Q2 onward .
  • Strategic investments (cloud-native online banking, branch densification) should enhance fee growth and customer acquisition, particularly in high-growth regions .
  • Capital return remains steady with CET1 at ~10.5% and continued buybacks ($100–$200M/qtr), providing downside support while loan growth visibility remains conservative .
  • Trading lens: Near-term focus on Q1 cadence (NII/fees/opex) and any surprises in office CRE charge-offs; medium-term thesis rests on deliverability of NIM→3% and revenue growth hitting guidance.

All data and quotes sourced from PNC’s Q4 2024 Form 8-K and press release, Q4 2024 earnings call transcript, and related company press releases: .