PNC Earnings: Management Guides for Decent Revenue Growth and Controlled Expenses in 2025

Key Morningstar Metrics for PNC Financial Services Group

• Fair Value Estimate: $181.00
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Medium

What We Thought of PNC Financial Services Group’s Earnings

PNC Financial Services Group PNC reported fourth-quarter earnings of $3.77 per share, equating to an annualized return on tangible common equity of 15.8%. The firm’s 2025 guidance implies decent growth in net interest and fee income, while expenses are expected to be well-controlled.

Why it matters: NII improved on a sequential basis, but fee income remained relatively muted compared with other banks that have reported. The outlook for credit costs has also improved, as management expects the macroeconomic environment to remain strong in the upcoming year.

• Net interest margins expanded to 2.75% on a sequential basis, compared with 2.64% in the previous quarter, as the bank benefited from lower deposit costs and fixed-rate asset repricing. This led to NII growth of 3.3% on a sequential basis.
• Fee income performance remained slightly disappointing during the quarter, as growth in the asset management and capital markets segments was slower than at PNC’s larger peers.

The bottom line: We are maintaining our fair value estimate of $181 per share after incorporating fourth-quarter results.

• We think the stock is slightly pricey, and that investors considering this firm should wait for a better entry point.

Key stats: The bank’s credit quality metrics improved, as nonperforming loans declined by around 10% sequentially and office commercial real estate exposure reduced.

Coming up: Management projected NII to grow by 6%-7% in 2025 compared with 2024 levels. This implies 2% growth compared with the annualized NII in the fourth quarter. On a slightly negative note, NII guidance implies average loan balances will remain flat in the upcoming year.

• Fee income is expected to grow by around 5% in 2025, which we think is decent in the current context.
• On a positive note, expenses are expected to be up around 1% for the upcoming year. We like management’s expense discipline and believe that it will be key to the bank managing its expense base to achieve its profitability targets.