PNC’s third quarter results for 2025 were met with a negative market reaction, despite revenue and GAAP earnings per share surpassing Wall Street expectations. Management attributed the quarter’s financial performance to robust growth in commercial interest-bearing deposits, strong loan production in corporate and business credit, and record levels of debit and credit card transactions. However, CFO Rob Reilly explained that the outsized growth in higher-cost commercial deposits compressed net interest margin (NIM) more than anticipated, impacting investor sentiment. CEO Bill Demchak pointed out persistent strength in consumer spending and resilient credit quality, but noted that the mix shift in deposits influenced margin dynamics this quarter.
Is now the time to buy PNC? Find out in our full research report (it’s free for active Edge members).
PNC Financial Services Group (PNC) Q3 CY2025 Highlights:
- Revenue: $5.92 billion vs analyst estimates of $5.81 billion (8.9% year-on-year growth, 1.8% beat)
- Adjusted EPS: $4.35 vs analyst estimates of $4.05 (7.5% beat)
- Adjusted Operating Income: $2.32 billion vs analyst estimates of $2.37 billion (39.2% margin, 2.3% miss)
- Market Capitalization: $71.38 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From PNC Financial Services Group’s Q3 Earnings Call
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Scott Siefers (Piper Sandler) asked about the impact of commercial deposit growth on net interest margin and why it compressed this quarter. CFO Rob Reilly explained the margin was reduced by the deposit mix shift but expects NIM to expand going forward.
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Betsy Graseck (Morgan Stanley) probed PNC’s approach to scale and M&A strategy. CEO Bill Demchak emphasized selective, strategic acquisitions like FirstBank, but said the bank would not pursue deals simply to follow peers.
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John Pancari (Evercore ISI) questioned fixed asset repricing and loan spread trends. Reilly noted that fixed-rate asset repricing momentum remains intact into 2026 and that recent NII guidance changes were due to timing of Federal Reserve rate cuts.
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Erika Najarian (UBS) sought clarity on the sustainability of NII growth and risks tied to non-bank financial institution (NDFI) lending. Reilly and Demchak emphasized that the NDFI portfolio is low risk and that NII growth projections remain strong, subject only to timing of rate cuts.
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Mike Mayo (Wells Fargo) inquired about potential regulatory cost savings from recent proposals. Demchak acknowledged that hundreds of employees are currently dedicated to regulatory compliance and sees potential for substantial efficiency gains if new rules are enacted.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace and sustainability of commercial deposit and loan growth, (2) signs of net interest margin recovery as deposit mix normalizes, and (3) the successful integration and market share gains from the FirstBank acquisition. Additional focus will be placed on branch expansion progress and cost control measures to support PNC’s long-term growth and profitability.
PNC Financial Services Group currently trades at $181.91, down from $189.82 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members).
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