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1. Company Snapshot

1.a. Company Description

The PNC Financial Services Group, Inc.operates as a diversified financial services company in the United States.The company's Retail Banking segment offers checking, savings, and money market accounts, as well as certificates of deposit; residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans, and personal and small business loans and lines of credit; and brokerage, insurance, and investment and cash management services.


This segment serves consumer and small business customers through a network of branches, ATMs, call centers, and online and mobile banking channels.Its Corporate & Institutional Banking segment provides secured and unsecured loans, letters of credit, and equipment leases; cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services, and access to online/mobile information management and reporting; foreign exchange, derivatives, fixed income, securities underwriting, loan syndications, and mergers and acquisitions and equity capital markets advisory related services; and commercial loan servicing and technology solutions.It serves mid-sized and large corporations, and government and not-for-profit entities.


The company's Asset Management Group segment offers investment and retirement planning, customized investment management, credit and cash management solutions, and trust management and administration services for high net worth and ultra high net worth individuals, and their families; and multi-generational family planning services for ultra high net worth individuals and their families.It also provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services for institutional clients.The company has 2,591 branches and 9,502 ATMs. The company was founded in 1852 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on PNC

The PNC Financial Services Group, Inc.'s recent performance was driven by strong Q3 earnings, with record revenue and 8% noninterest income growth. The acquisition of FirstBank Holding Company expands its footprint in growth regions, adding 5% to assets and deposits. A recent dividend hike resulted in a competitive 3.7% dividend yield. Additionally, the company has seen increased investor interest, with Addenda Capital Inc. raising its position by 45.6% and Czech National Bank acquiring 3,329 shares. Strong credit quality and EPS growth also contributed to the positive performance.

1.c. Company Highlights

2. PNC Financial Services Group's Strong 2025 Earnings and Promising 2026 Outlook

PNC Financial Services Group reported a robust financial performance for 2025, with net income reaching $7 billion, or $16.59 per share, driven by record revenue, 5% operating leverage, and 21% EPS growth. The actual EPS came out at $4.88 relative to estimates at $4.2, beating analyst expectations. Revenue growth was robust, and the company's ability to achieve 5% operating leverage is a testament to its effective cost management. The EPS growth of 21% is particularly noteworthy, indicating a strong bottom-line performance.

Publication Date: Jan -18

📋 Highlights
  • Record Financial Performance: PNC reported $7 billion net income ($16.59 EPS) with 21% EPS growth, 5% operating leverage, and record revenue in 2025.
  • FirstBank Acquisition Impact: The acquisition added 8% NII contribution and is projected to boost 2026 revenue growth by 11%, with $1/share earnings contribution by 2027.
  • Capital Returns & Efficiency: $1.1 billion returned to shareholders ($676M dividends, $400M buybacks), with plans to increase repurchases to $600–$700M quarterly, alongside 400 bps operating leverage in 2026.
  • Technology & AI Investment: $3.5 billion tech spend (10% increase), with AI driving 20% of growth, supporting 400 bps ARPU leverage and operational efficiency improvements.
  • Strategic Growth Metrics: 8% average loan growth (4% standalone) in 2026, 14% net interest income growth, and 3% NIM by 2026, reflecting strong market expansion and deposit optimization.

Acquisition of FirstBank and Expected Impact

The acquisition of FirstBank, closed on January 5, 2026, is expected to add approximately $1 per share to 2027 results. For 2026, PNC expects to generate meaningful positive operating leverage on a standalone basis and with FirstBank, with full-year average loan growth of approximately 8% and total revenue up approximately 11%. The acquisition is a strategic move to expand PNC's presence in attractive markets, with opportunities for growth in areas like commercial lending.

Capital Management and Shareholder Returns

PNC returned $1.1 billion of capital to shareholders in the quarter, with dividends of $676 million and share repurchases of approximately $400 million. The company expects to increase quarterly share repurchases to a range of $600 million to $700 million. The CET1 ratio was 10.6% at quarter end, and it expects the FirstBank acquisition to reduce this ratio by approximately 40 basis points.

Valuation and Dividend Yield

With a Price-to-Tangible Book Value (P/TBV) ratio of around 1.45, PNC's valuation appears reasonable. The Dividend Yield stands at 2.96%, providing a relatively attractive return for income-seeking investors. Considering the company's growth prospects, including the expected 8% average loan growth and 11% total revenue growth for 2026, the current valuation metrics suggest that the stock may be fairly priced, with a P/E Ratio of 12.68.

Outlook for 2026

For the first quarter of 2026, PNC expects average loans to be up approximately 5%, net interest income to be up approximately 6%, and fee income to be down 1-2%. The company expects to deliver approximately 400 basis points of positive operating leverage for the full year 2026, driven by PNC on a standalone basis and the addition of FirstBank. The acquisition is expected to generate an annualized earnings run rate of approximately $1 per share by the end of 2026.

Investment Spend and Technology

PNC's investments in branches and technology, including AI, are embedded in their guidance. The company's tech spend is $3.5 billion, up 10% this year, with AI driving 20% of the increase. These investments aim to drive momentum, improve client experience, and enhance operational efficiency. The continuous improvement program is expected to drive expense control and savings, with another 40 points of operating leverage expected between 2025-2030.

3. NewsRoom

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United Community Bank Cuts Holdings in The PNC Financial Services Group, Inc $PNC

Feb -02

Source: defenseworld.net

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UMB Bank n.a. Lowers Position in The PNC Financial Services Group, Inc $PNC

Feb -02

Source: defenseworld.net

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Principal Financial Group Inc. Sells 92,589 Shares of The PNC Financial Services Group, Inc $PNC

Feb -01

Source: defenseworld.net

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PNC FOUNDATION CONTRIBUTES $2M FOR NEW SNOW REMOVAL EQUIPMENT TO CITY OF PITTSBURGH

Jan -30

Source: prnewswire.com

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The PNC Financial Services Group, Inc $PNC Shares Sold by Bank of New York Mellon Corp

Jan -29

Source: defenseworld.net

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The PNC Financial Services Group, Inc $PNC Shares Acquired by Cambiar Investors LLC

Jan -28

Source: defenseworld.net

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The PNC Financial Services Group, Inc $PNC is Exane Asset Management’s 5th Largest Position

Jan -28

Source: defenseworld.net

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PNC Executive to Speak at Bank of America Financial Services Conference

Jan -27

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.50%)

6. Segments

Retail Banking Incl. Residential Mortgage

Expected Growth: 5.0%

The retail banking segment is expected to grow at a slightly lower rate than the global growth hypothesis due to intense competition in the consumer banking space and potential regulatory changes that may impact revenue. However, PNC's strong brand and diversified revenue streams will help mitigate these risks.

Corporate & Institutional Banking

Expected Growth: 6.0%

The corporate and institutional banking segment is expected to grow at a higher rate than the global growth hypothesis due to the increasing demand for corporate financing and treasury management services. PNC's strong relationships with corporate clients and its expertise in capital markets will drive growth in this segment.

Asset Management Group

Expected Growth: 5.5%

The asset management group segment is expected to grow in line with the global growth hypothesis due to the steady demand for investment and wealth management services. PNC's strong brand and expertise in asset management will help drive growth in this segment.

Other

Expected Growth: 5.5%

The 'Other' segment is expected to grow in line with the global growth hypothesis, as it is not a core driver of PNC's revenue. The segment's growth will be driven by various miscellaneous activities, which are expected to be relatively stable.

7. Detailed Products

Retail Banking

Provides personal banking services, including checking and savings accounts, credit cards, loans, and investment services

Corporate Banking

Offers cash management, lending, and treasury management services to large corporations and middle-market companies

Wealth Management

Provides investment, trust, and estate services to individuals, families, and institutions

Asset Management

Offers investment management services to institutional clients, including pension funds, endowments, and foundations

Residential Mortgage Banking

Provides mortgage lending services to individuals and families

Commercial Mortgage Banking

Offers commercial mortgage lending services to real estate investors and developers

Treasury Management

Provides cash management and treasury services to corporations and government entities

Harris Williams & Co.

Provides M&A advisory services to middle-market companies

8. The PNC Financial Services Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PNC Financial Services Group, Inc. is medium due to the presence of alternative financial institutions and digital payment platforms.

Bargaining Power Of Customers

The bargaining power of customers is low for PNC Financial Services Group, Inc. as customers have limited negotiating power due to the complexity of financial products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for PNC Financial Services Group, Inc. as the company relies on various suppliers for technology, infrastructure, and services.

Threat Of New Entrants

The threat of new entrants is low for PNC Financial Services Group, Inc. due to the high barriers to entry in the financial services industry, including regulatory requirements and capital requirements.

Intensity Of Rivalry

The intensity of rivalry is high for PNC Financial Services Group, Inc. due to the presence of several large and established financial institutions in the market, leading to intense competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 65.97%
Debt Cost 9.69%
Equity Weight 34.03%
Equity Cost 9.69%
WACC 9.69%
Leverage 193.83%

11. Quality Control: The PNC Financial Services Group, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Preferred Bank

A-Score: 7.0/10

Value: 7.1

Growth: 8.1

Quality: 7.5

Yield: 6.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
PNC Financial Services Group

A-Score: 6.5/10

Value: 5.7

Growth: 6.0

Quality: 6.7

Yield: 7.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
M&T Bank

A-Score: 6.2/10

Value: 6.5

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
OpenBank

A-Score: 5.7/10

Value: 6.6

Growth: 6.9

Quality: 5.8

Yield: 7.0

Momentum: 1.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Truist

A-Score: 5.7/10

Value: 4.7

Growth: 2.8

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
First Citizens BancShares

A-Score: 4.9/10

Value: 5.3

Growth: 9.8

Quality: 4.3

Yield: 0.0

Momentum: 3.5

Volatility: 6.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

232.02$

Current Price

232.02$

Potential

-0.00%

Expected Cash-Flows