PNC Financial Q1 Earnings Top Estimates on Rise in NII & Fee Income

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/YTotal 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 DeclineAs 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 BagNon-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 ImprovesAs 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.PNC Financial’s Capital Distribution ActivityIn the first quarter of 2025, PNC returned $0.8 billion of capital to shareholders. This included $0.6 billion in common stock dividends and $0.2 billion in common share repurchases.Our View on PNCPNC Financial’s fee income and NII growth, along with rising loan balance, will support its top-line growth. Its strong capital position aids steady capital distribution activities. However, a declining deposit balance and a rise in provisions are near-term concerns.The PNC Financial Services Group, Inc Price, Consensus and EPS Surprise  The PNC Financial Services Group, Inc price-consensus-eps-surprise-chart | The PNC Financial Services Group, Inc QuoteCurrently, PNC carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Earnings Dates & Expectations of BanksCitizens Financial Group, Inc. CFG is slated to report first-quarter 2025 results on April 16. Over the past seven days, the Zacks Consensus Estimate for CFG’s quarterly earnings per share has been unchanged at 75 cents. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)Fifth Third Bancorp FITB is scheduled to release first-quarter 2025 earnings on April 17. The consensus estimate for FITB’s quarterly earnings has been unchanged at 70 cents per share over the past seven days.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fifth Third Bancorp (FITB): Free Stock Analysis Report The PNC Financial Services Group, Inc (PNC): Free Stock Analysis Report Citizens Financial Group, Inc. (CFG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks