PNC Financial Services Group executives reported strong financial results for 2025 and outlined growth expectations for 2026 during a recent presentation. Chairman and CEO Bill Demchak described 2025 as "a successful year" by "virtually all measures."
The company earned $7 billion in net income, or $16.59 per share, for the full year. Management noted record revenue, 5% positive operating leverage, and 21% earnings per share growth.
Chief Financial Officer Rob Reilly reported fourth-quarter total revenue reached a record $6.1 billion, up 3% from the prior quarter. Net interest income rose to $3.7 billion while non-interest income increased to $2.3 billion. Fourth-quarter net income was $2 billion, or $4.88 per diluted share.
Reilly said the effective tax rate of 12.7% reflected favorable resolution of several tax matters. Net interest margin was 2.84% in the fourth quarter, up 5 basis points from the prior quarter.
Average loans were $328 billion, up $2 billion from the prior quarter. Deposits averaged $440 billion, up $8 billion. Non-interest-bearing deposits averaged $95 billion, representing 22% of total average deposits.
The company ended the quarter with an estimated CET1 ratio of 10.6%. PNC returned $1.1 billion of capital to shareholders in the quarter through dividends and share repurchases. Reilly said the company expects to increase buybacks to a $600 million to $700 million quarterly pace.
Credit quality was described as strong. Net charge-offs were $162 million, and provision expense was $139 million. The allowance for credit losses ended the fourth quarter at $5.2 billion, or 1.58% of total loans.
Demchak highlighted that PNC closed its acquisition of First Bank on January 5. Reilly said the deal expands PNC's presence in "high-growth communities across Colorado and Arizona." Conversion and integration are scheduled for June 2026, with full integration expected by the end of that year.
The purchase price was approximately $4.2 billion, funded 30% in cash and 70% in stock. Management expects the acquisition to add approximately $1 per share to 2027 results, with a projected internal rate of return of about 25%.
Reilly provided guidance for 2026 based on the combined company. The company expects approximately 8% average loan growth, 11% total revenue growth, and 14% net interest income growth. Non-interest expense is expected to increase about 7%, excluding integration costs.
Based on that outlook, Reilly said PNC expects about 400 basis points of positive operating leverage. For the first quarter of 2026 versus the fourth quarter of 2025, the company expects average loans up about 5% and net interest income up about 6%.
Demchak said PNC's investment agenda in 2026 is "higher this year than it's ever been." He cited branch expansion, modernization of payments capabilities, data center modernization, and investments in people in new markets. He said artificial intelligence represents about 20% of the year-over-year increase in technology spending.
Reilly said PNC exceeded its 2025 continuous improvement program target of $350 million in cost savings and set a $350 million target again for 2026. In capital markets, Reilly said revenue is expected to rise high single digits in 2026.
Demchak emphasized a strategic distinction between PNC and regional banks, describing PNC as "a national bank" with a strategy aimed at building a "national and ubiquitous presence."