PNC reported strong Q4 and full-year 2025 results with record revenue and 21% EPS growth. Management struck a confident tone for 2026, citing robust loan growth, steady fee income, and the First Bank acquisition adding ~$1 to 2027 EPS. They guided to 11% revenue growth and 400bp positive operating leverage. Cross-company signals included a negative Visa derivative adjustment and a surge in middle-market M&A activity. Record Q4 revenue of $6.1B and full-year EPS of $16.59; 5% operating leverage for 2025.
PNC reported strong Q4 and full-year 2025 results with record revenue and 21% EPS growth. Management struck a confident tone for 2026, citing robust loan growth, steady fee income, and the First Bank acquisition adding ~$1 to 2027 EPS. They guided to 11% revenue growth and 400bp positive operating leverage. Cross-company signals included a negative Visa derivative adjustment and a surge in middle-market M&A activity. Record Q4 revenue of $6.1B and full-year EPS of $16.59; 5% operating leverage for 2025.
PNC reported strong Q4 and full-year 2025 results with record revenue and 21% EPS growth. Management struck a confident tone for 2026, citing robust loan growth, steady fee income, and the First Bank acquisition adding ~$1 to 2027 EPS. They guided to 11% revenue growth and…
Guidance · revenue to 11%
2026 guidance: total revenue +11%, net interest income +14%, non-interest income +6%, positive op leverage ~400bp.
First Bank acquisition closed Jan 5; expected to add ~$1 to 2027 EPS and be fully integrated by end of 2026.
Management discussed AI-driven cost savings and efficiency gains, outlining 171 opportunities and $1.4 billion of total addressable spend through AI initiatives, with expectations of 40 points of operating leverage between 2025 and 2030.
Capital markets fees expected up high single digits. Management expressed strong momentum from 2025 and optimistic guidance for 2026, including positive operating leverage and growth from the First Bank acquisition, while downplaying risks from rate cuts.
Management highlighted record investment spend in 2026, including technology initiatives, payments capabilities, consumer rewards platforms, and branch expansions, with tech spend expected to increase 10% plus or minus, partly funded by the Continuous Improvement Program.
Management expressed strong momentum from 2025 and optimistic guidance for 2026, including positive operating leverage and growth from the First Bank acquisition, while downplaying risks from rate cuts.
“The Visa derivative adjustment in the fourth quarter was negative $41 million, primarily related to Visa's December announcement of a litigation escrow funding.”
“The logjam in middle market investments, the willingness to do M&A, the willingness to take down credit to get a deal done has opened up where it was kind of on hold for a long period of time… You see it in the Harris-Williams results… bac…”
“Our plans in 26 are to reach that 3% level in the second half of 26, somewhere during the third quarter, maybe the end of the third quarter.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Revenue | FY2026 | 11% | 11% | GUIDED |
Shopify is mentioned as a potential new payment competitor that large banks could develop internally.
“they could choose to go build another Visa or MasterCard or Stripe or Shopify, right?”
And then as a follow-up to that, Ben, so I heard you correctly. You have your ongoing continuous improvement program. And as part of that, you have record investment spend in 2026, record tech spend, record AI spend. And even with that, you have 400 basis points of positive octal leverage in your guide. So I guess even with you doing all that, are you spending enough given the higher level of competition from the bigger banks?
Yeah, I think we are. I mean, part of what you spend is what you can achieve. So, you know, you push too hard, you start wasting money. For the places where we compete, Mike, so you think about what we do in welfare retail or, you know, our C&I middle market, smaller, large corporate related product capabilities. I think our tech spend is, you know, at least on par. And I think our product set is more than competitive. And I think our core infrastructure as it relates to, you know, running in everything being cloud native and build off of microservices and the ability to build products is as good as anybody. Where we lose. right, on tech spend is, you know, some of our larger friends who've reported so far, you know, they could choose to go build another Visa or MasterCard or Stripe or Shopify, right? They could choose to build a whole nother business inside of their existing operating platform where what we're doing with our tech spend is optimizing the businesses we're in today. And I think that's the big difference.
PNC expects to reach a 3% NIM in the second half of 2026, above the current 2.84%, driven by securities portfolio repricing and deposit cost declines, indicating improving profitability for the banking sector. — A rising NIM signals stronger net interest income and margin expansion, which is a positive read-across for other banks with similar asset sensitivity.
“we're coming into your market. If you're not coming into our market to come fight us, we're coming to your market to come fight you. And we're going to get some percentage of your market as is JP and B of A.”
I guess you're saying you still target the 30 largest MSAs so you can shift resources and people and attention as you see opportunities. You don't have to just defend a few of them. I guess is that what you're saying?
I don't think anybody has an ability to defend home turf here. The branch builds that are going on with the giant banks and ourselves and at least one other of the smaller banks in the country, you know, we're coming into your market. If you're not coming into our market to come fight us, we're coming to your market to come fight you. And we're going to get some percentage of your market as is JP and B of A. And, you know, ultimately, if you're not growing, you're shrinking. And, you know, so perhaps it's just a nuance and strategy or the realization that long term So survivability, at least in our view, is dependent on the ability to take the fight to all the markets in the U.S. and win. A national platform. Yeah.
The $41 million negative Visa derivative adjustment in Q4 is directly tied to Visa's litigation escrow funding announcement, potentially foreshadowing a larger liability for Visa. — This signals that Visa may need to set aside significant escrow funds for litigation, which could pressure Visa's earnings and share price.
… higher Treasury management revenue was more than offset by other seasonally lower activity. Lending and deposit services increased $7 million, or 2%, and included higher loan commitment fees. Mortgage revenue decreased $13 million, or 8%, reflecting lower MSR hedging activity down from elevated third quarter levels. Another non-interest income of $217 million increased $19 million, primarily due to higher private equity revenue. The Visa derivative adjustment in the fourth quarter was negative $41 million, primarily related to Visa's December announcement of a litigation escrow funding. Notably, we continue to see strong momentum across our lines of business and throughout our markets. And for the full year 2025, non-interest income of $8.7 billion grew $633 million, or 8%, compared to 2024. Turning to slide 8, our fourth quarter expenses were up $142 million, or 4% linked quarter. The growth was driven by increased business activity and seasonality, partially offset by a reduction to the FDIC special assessment accrual. Full-year non-interest expense increased $310 million, or 2%, reflecting business growth and continued investments in our franchise. As you know, we had a goal …
Management noted that the logjam in middle-market M&A opened in Q4, with Harris Williams backlog at an all-time high, suggesting a rising tide of deal activity that benefits investment banks.