PNC Financial at Boston Conference: Branch Expansion and Growth Plans

On Friday, 07 November 2025, PNC Financial Services Group Inc (NYSE:PNC) presented at The BancAnalysts Association of Boston Conference. The company outlined its strategic plans for growth, focusing on expanding its branch network and enhancing both physical and digital customer experiences. While the company remains optimistic about future prospects, it also addressed investor concerns about potential acquisitions and capital allocation.

Key Takeaways

• PNC plans to increase its branch builds to 300 by 2030, up from a previously announced 200.
• The company expects $1 billion growth in net interest income by 2026 through asset repricing.
• PNC’s disciplined capital allocation strategy remains focused on organic growth and selective M&A.
• Digital adoption among PNC clients has reached 77%, with significant growth in digital sales.
• The company projects $20 billion-plus deposit growth opportunities from organic branch expansions.

Financial Results

• Q4 Guidance: PNC reaffirmed its guidance for the quarter, maintaining a stable outlook.
• Net Interest Income Growth: Anticipates $1 billion growth by 2026, driven by repricing $65 billion in assets.
• Cumulative Deposit Beta: Remains in the mid-40% range, with a current beta of around 37%.
• Capital Ratios: CET1 ratio stood at 10.7%, with a target of 10% deemed satisfactory.
• Share Repurchases: Expects $300 million to $400 million in Q4, leaning towards the higher end.
• PPNR Growth: Achieved 12% year-to-date growth in 2025, outpacing a peer average of 7%.

Operational Updates

• Branch Expansion: Plans to build 300 branches by 2030, with over 40% in fast-growing markets.
• Digital Sales Growth: Digital demand deposit account sales increased by 30% year-on-year.
• Consumer Growth: Consumer demand deposit accounts grew by 2% year-on-year, with 6% growth in Southwest markets.
• Digital Adoption: 77% of clients are digitally active, with improved net promoter scores.
• First Bank Acquisition: Set to close at the start of the year, pending regulatory approval.

Future Outlook

• Deposit Growth: Sees $20 billion-plus opportunities from organic branch builds.
• Market Presence: Aims to scale in 18 of the top 30 U.S. markets by the decade’s end.
• Card Business: Aspires to become the leading card provider for core customers over several years.
• M&A Strategy: Emphasizes disciplined M&A, focusing on strategic alignment and financial prudence.

Q&A Highlights

• Branch Expansion Impact: New branches expected to break even in under four years and become cash flow positive.
• Consumer Resiliency: Noted strong consumer spending, even among lower-end customers.
• Loan Portfolio: Loans to non-depository financial institutions are of high credit quality with no losses.
• M&A Outlook: More merger opportunities may arise, but the company remains cautious and disciplined.

For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - The BancAnalysts Association of Boston Conference:

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Gerard Cassidy, the President of The PNC Financial Services Group of Boston. Thank you all for attending.

Unidentified speaker: Woo!

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Thank you. Thank you very much. I appreciate that. With us today, we have PNC Financial, which we all obviously know. It is about $569 billion in total assets, market cap is over $70 billion, and presently they have over 2,200 branches throughout the United States. Last quarter, they had a return on tangible common equity of about 17%. Businesses are broken into three areas, primarily retail banking, corporate and investment banking, and asset management. To my immediate right is Rob Reilly, who many of you already know, Executive Vice President and CFO. I was chatting with Rob beforehand. He has been CFO since 2013. Some of you might remember before that, he headed up their asset management area for a number of years. To his right is Alex Overstrom.

For a few of us in this room, myself, Charlie, and Brent, who have been doing this for a number of years, we like some of the famous baseball players, the Griffees, the Boones, and the Bonds. Alex’s father presented here as part of Charlotte National back in the mid to early 1990s. We have a--this is the first father-son combo that the BAB has had.

Unidentified speaker: I don’t know if that bodes well or not, but we’ll go for it.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Thank you, Alex. He is Executive Vice President, Retail Banking at PNC. Prior to that, he was the Head of Small Business and Deputy Head of Retail Banking, and he joined PNC from Goldman Sachs in 2014. I’m going to turn the mic over to Rob, who then will hand it over to Alex, and then we’ll open it up for a fireside chat. Rob?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Oh, thanks, Gerard. Hey, you’ve handled it all. Thank you for having us. This is now my 13th year. I was a little stunned when you said way back in the 1990s, which, you know, some of us were there. Pleasure to be here with you this morning. Alex is going to walk you through some new initiatives on the retail bank that you might have read about in a press release this morning. We’re hopeful that you’ll get a sense in terms of our enthusiasm for our organic growth efforts, which we initiated at least verbally last year at BAB and laid it out. Alex is going to bring you up to speed.

Unidentified speaker: Great. Perfect. Thanks, Rob. Great to be here, Gerard. Thank you for the introduction. It is great to be back in Boston, close to my hometown of Hartford. As Rob mentioned, I’m going to spend a little bit of time today highlighting the retail business, talking a little bit about the drivers of our recent performance, our strategic priorities, and the opportunities we see ahead to continue to accelerate our growth. Before I do that, I’ll reference the statement on forward-looking information and non-GAAP information, and we’ll leave that there. Maybe just to start with a little bit of context on the business, we operate one of the largest retail banking franchises in the United States, $243 billion of low-cost deposits, $97 billion in loans. We’ve got a team of 27,000 that serves the holistic needs of more than 15 million consumers and small businesses around the country.

That organization, this collective organization, has generated $15 billion of net revenue over the last 12 months. If you look at our reach, it is both extensive and expanding. We serve 26 of the 30 largest U.S. markets, including 9 of the 10 fastest growing. Our coast-to-coast branch network puts us within easy reach of more than 40% of the U.S. population. You think about the scale, it’s driving very attractive financial performance. Over the last three years, we’ve grown our net revenue at a 14% compound annual growth rate, driven by both net interest income and fee income. During the same period, we’ve also lowered our direct expenses by nearly $300 million, resulting in a flat expense base and a significant improvement in our efficiency ratio. The outcome of that has been the very strong growth you see in PP&R on the slide.

Our success is anchored in a straightforward client-focused strategy. Start by being our customer’s primary bank, deliver consistently outstanding service, what we talk about being client-obsessed inside of the PNC organization, and ultimately earn the opportunity to support these clients holistically as their needs and their financial goals evolve with time. While it is simple, this strategy is at the heart of our retail business and guides really all of our investments that we make inside of the franchise, whether that is scaling our presence nationally across physical and digital channels, investing in experiences that make it easier for customers to choose PNC as their primary bank, or building capabilities that allow us to better serve clients’ needs throughout their life cycles. Everything that we do is oriented around the customer.

Let me start with a little bit of color on how we’ve scaled our presence nationally to position the business for growth. You can see we’ve evolved our branch network significantly over the last several years, with more than 40% of our branches now in our fast-growing expansion markets, and that’s up from less than 20% in 2018. This strategic shift is helping drive improved productivity across distribution channels. In our branches, we continue to achieve record levels of DDA sales as investments in our team members, in marketing, and in the client experience continue to pay dividends. In digital, our work to optimize the sales journey to reduce friction has allowed us to grow consumer DDA sales 30% year on year, with digital now representing a meaningful portion of our overall sales.

This combination has propelled overall customer growth, with consumer DDAs growing 2% year on year, including 6% in our fast-growing Southwest markets. Given this strong performance, we see a compelling opportunity to continue to invest. To the point Rob referenced earlier this morning, we announced plans to expand our branch builds to 300 by 2030, up from the 200 we announced a year ago at this conference. This announcement really reflects the strong momentum we have in our business and the significant organic growth opportunity we see in front of us. You look at these builds, they’ll bring markets like Nashville, Chicago, Sarasota, Fort Myers fully to scale, increasing their density and accelerating ultimately our growth.

Now, importantly, these branches come on top of our planned acquisition of First Bank, which, if approved, will make us the number one retail bank in Denver and a leading player in Phoenix. Our overarching objective in these investments is to drive scale and relevance, really to position ourselves as the leading bank in our key markets. To that end, by the end of this decade, we expect to be at scale in 18 of the top 30 U.S. markets, up from just six today. You can see on the right-hand side of the slide, this type of scale drives performance, not only in the branches themselves, but across channels, with digital sales per capita nearly six times higher in markets where we have a presence.

Long term, we see a $20 billion-plus deposit growth opportunities from these organic builds, with returns well in excess of our cost of capital, even under conservative assumptions. Now, stepping back more broadly across our channels, we’re investing to create seamless integrated customer experiences. Today, 77% of our clients are digitally active. We’re seeing very strong growth in our mobile users, and we actually recently completed the migration of all of our clients to our new online banking platform. Now we’re leveraging agentic development to build our new mobile app, which we expect to roll out in the first half of 2026. We’re also making it easier for clients to choose PNC as their primary bank, adding digital direct deposit switching, refreshing our debit card suite, and enabling instant debit card issuance through our mobile app.

Now, crucially, we’re still investing and, in fact, increasing our investment in our in-person experiences so that every client entering one of our branches is treated with genuine hospitality and care. These investments are reflected in our rising net promoter scores, which are up 10 points over the last three years across our branch network, driving solid improvements in client retention and helping to fuel the growth we talked about. Finally, while we’ve built a strong foundation, we have a significant opportunity in front of us to expand how we serve our clients throughout their life cycles. Take investing as an example. We built a phenomenal platform with a newly rebranded PNC Wealth Management. It manages close to $90 billion of investment assets, generates close to $1 billion of revenue. Yet, we’re only beginning to unlock the full potential of our affluent client base.

We have several initiatives underway to further accelerate our progress. These include adding dedicated advisors and bankers focused on this affluent segment, introducing a securities-based lending solution to help clients manage their liquidity, and providing customers with rewards for doing more with PNC. Likewise, you think about credit card. We have made strides introducing new products, growing client spend. Our market share among our own clients is still well below what we see as our potential. We have added a number of highly seasoned card experts to lead our team over the last 12 months. We are executing on a set of plans to address the opportunity that we see in front of us. That said, we recognize it will be a multi-year journey to realize our ambitions of becoming the number one card provider for our core PNC customers. In closing, we would say our strategy is working.

We’re accelerating our underlying client growth, delivering strong financial results, and doubling down on the organic investments to sustain and build on that momentum that we see. We believe the opportunities ahead of us are significant. We’re excited about what we’re doing and what’s to come. With that, Rob and I are happy to take your questions.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Good job. Alex, thank you for the presentation. Maybe we’ll start with some questions for you first, and then we’ll go to Rob, and we’ll open it up to the audience.

Unidentified speaker: Great. Sure.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Can you share with us, when you talk about that 7% branch share, does the expansion plan get you into that number that you need to get to?

Unidentified speaker: Yeah, that’s exactly right. Everything we’re sort of trying to do, we announced today, what we talked about on the slide is all about sort of driving that local scale in these key markets, which are now 20 or so that we’re investing in. We think that sort of 7% range is sort of where you begin to create that sense of ubiquity, that sense of convenience that really accelerates your growth. We see it already in our own markets in terms of checking acquisition, checking share. Ultimately, that leads, we think, to positive and accelerating deposit share. All of the markets that we’re investing in, we’re targeting that 7%. Obviously, you get down into the sort of very localized micro-market strategies, but that’s sort of the macro objective.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yep. One of the numbers that jumps out at us all on that screen, on the slides, was the flat expense growth that you guys showed. How do you balance the need for the branch expansion with keeping those expenses flat? What are the puts and takes that you guys have?

Unidentified speaker: Yeah, I appreciate you asking that in front of our CFO. You know, we did not spend as much time talking about it in the presentation, but it has been a very big focus since I got on this seat three years ago. I would say a couple of levers that we have been pulling and we will continue to pull. One was, frankly, optimizing network. You know, we have talked a lot today about how we grow it, but there has been a nice opportunity to optimize it. We exited a bunch of branches where we, frankly, were overly dense, supermarket branches, pruned the ATM network, and, frankly, addressed opportunities in our staffing across the broader network. The other thing where we have seen just a tremendous amount of cost takeout has been sort of our operational and middle office areas.

I think we’ve taken out probably more than 2,000 people over the last couple of years in those areas just as we’ve begun to automate more processes and just drive more efficiency through that. Our objective is we want to invest, we want to invest to grow, and we think it’s really important though to sort of do our part to self-fund as much of that investment as we can through automation, through technology, and just sort of rigorously running the business every day.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Gerard, you’re familiar. For those of you that know us well, that’s part of our continuous improvement program, where we take our efficiency dollars and use those to offset investments.

Unidentified speaker: Yeah.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Rob, coming to you, maybe you could share with us how the guidance for the quarter is going?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah, sure. We posted our Q4 days ago, where we reaffirmed our guidance. No change in the last four days.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: That’s good.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Sorry to not be dramatic more on that, but yeah, feeling good about the quarter.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Okay. Can we talk about NII for 2026?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: I think on the call, you referenced the billion dollar number.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Can.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Billion dollar growth, right?

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah. Yeah. Can you share with us the dynamics of the falling front end of the curve and what that might do?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. You know, it’s like we experienced in 2025. We’re well into repricing our fixed-rate assets that were put on much lower yields years ago. So between now and the end of 2026, we’ll have $65 billion, approximately $65 billion more of assets to reprice. So that’s the preponderance of it when we talk about 2026. That’ll be the big driver. When we get out into January and we’ve got full year guidance for you, we’ll have some more specifics. All in, we would expect on the incremental loan growth, simply because we think the CRE runoff that has been a headwind for loan growth the last couple of years will inflect probably in the first quarter of 2026, maybe late in the first quarter. But that alone, net-net everything else being equal, will be better for loan growth. Yeah.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Can I just follow up on the CRE comment about inflection?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. Right.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Is there any property types or any color on what’s driving that?

Rob Reilly, Executive Vice President and CFO, PNC Financial: I think it’s just following the office fallout that we’ve worked through, the slowdown in some construction that we had, actually a little bit of a gap. Is that funded up? So loans that we have made earlier in this year will start to fund in 2026. That’s what that’s about.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Got it. Okay. Maybe we could talk a little bit about deposit pricing in the quarter. Through the rate-cutting cycle, do you still expect the cumulative deposit beta in the mid-40% range?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Oh, yeah. Yeah, for sure. I mean, deposit rate paid rates are coming down. Our cumulative beta right now is down 37 or something like that, but that’s because it’s choppy on the front end as rate cuts come late in the quarter or on time in the quarter. Rate paid is definitely, it has come down. It’ll continue to come down. Our expectation is another rate cut in December, as we’ve said. We’ll get to that mid-40% down beta pretty quickly. That’s in line with our expectations.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Got it. Maybe also to talk about what happened in the third quarter, the increase in interest-bearing commercial deposits. Can you share with us what you’re looking for in this quarter?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Oh, sure. Yeah. As you know, we had a big increase in our commercial interest-bearing deposits in the third quarter. That was a one-time event, really, which related to customers, commercial customers of ours who had deposits off our balance sheet in money market funds. Because of the way rates were moving, when they did the math on the fee they were paying for the fund and the yield, it actually made sense to come over to our balance sheet, even though we did not increase our rate paid. We like when our commercial clients like to have deposits with us. It is NII accretive. We feel good about that, but there is not more of that to do.

When we get into the fourth quarter, we’ll see some growth in commercial interest-bearing, not to the same degree, but there are some seasonal increases that we see. It’ll be in line with that.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Got it. Obviously, you’ve got very strong capital, 10% CET1 ratio. Is that the right number or how are you?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah, I think so. We finished the quarter at 10.7% in CET1. As you know, you all know, the capital rules are still in flux, but generally are working in our favor. We’ll have to see the dust settle down on that before we get precise, super precise. I’d say 10% is a good number. We’re at 10.7%. 10% for right now is a good number.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Got it. Maybe then with the excess capital, any thoughts about buybacks?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. Yeah. We stated for the fourth quarter, we expect share repurchases of between $300 million and $400 million. We really like our share price right now. I’ll say that again. We really like our share price right now. We’ll be at the higher end of that range. All else being equal, going into 2026, I’d expect share repurchases to increase from there.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Got it. Maybe, Alex, coming back to you, are there any markets that you’re not in today that over time you might look to expand into?

Unidentified speaker: You know, it’s interesting. You sort of look at our footprint. We’re in 26 of the 30 largest markets. We like the opportunity in the markets we’re in. What you saw in the announcement today is really us bringing a lot of those markets, plus some other ones, to the degree of scale we think is opportunistic to accelerate our growth. In the near term, our focus is really operating in the markets we’ve got and growing those. Over the long arc of time, would we want to get into more? Sure. The near-term focus is really scaling up in the markets, several of which we announced today.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Sure.

Rob Reilly, Executive Vice President and CFO, PNC Financial: We’re in all the right markets where there’s a lot of growth. The idea is to build on what we’ve already got going in those markets.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah. We all know that density and market share is really important, particularly with deposits. Everybody’s aspiring to do that. Can you share with us what you might be doing differently than your peers that gives you the success that you’ve heard on the slides?

Unidentified speaker: You know, in sort of our view, we sort of think about winning and losing in retail banking or in around sort of two things. One, delivering really good customer service. As much as that may sound like a happy idea, it really matters in this business. And getting that right is key. And then really good products and experiences for digitally and in the product set. For us, it’s all about doing those things and then doing them at scale in the markets that we’re in. The investments you see today are all about bringing those things to more of our customers in more neighborhoods and surrounding them, whether it’s renovating all of our branches over the next several years, the digital investments we talked about to make it easier for clients to choose PNC as their primary bank.

In some ways, it is a relatively simple approach, but we think getting the basics right, executing them well, and doing that at scale is what’s driven the success and will continue to drive the success going forward.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: At this conference, many of the banks talked about the resiliency of the consumer. As you may have heard, Bank of America had an investor day on Wednesday. They also talked about the resiliency of the consumer. Can you share with us what you’re seeing on consumer spending in your consumer?

Unidentified speaker: It is, I mean, that is the word I would have used. It is actually remarkable. We were just looking at the sort of deep dive on the October numbers. The consumer’s hanging in there. Spending is robust. While it’s a little bit stronger at the upper end, it’s still actually hanging in there among lower-end customers. That has been, frankly, given all of the turbulence, perhaps a little bit surprising. Even with the government shutdown, what we’ve seen is customers that have been impacted by that are drawing down some savings in other places in order to allow themselves to continue to spend to some degree. It looks pretty solid right now. The employment numbers that we see through our customer data appear okay. It is still a pretty good picture. Obviously, very dependent as we go forward on the employment situation.

Rob Reilly, Executive Vice President and CFO, PNC Financial: We keep a close eye on that.

Unidentified speaker: Yeah. Sure. Right now it’s okay.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Maybe we could dig down a little deeper on the consumer loan growth. What are you doing? What are you seeing to drive that growth as you go forward?

Unidentified speaker: Yeah. I would just say we’re not sort of chasing consumer loan growth. What we’re trying to do is make sure we serve our customers and serve them well. I would sort of break our business into a couple of buckets. You sort of think about what we’ve got in the home lending side, home equity, mortgage, auto. We’ve got very, very strong platforms there. Autos, we’ve had a very nice year and continue to grow that business. Home equity is doing well. Mortgage has obviously been a little bit more subdued. We’ve got the right solutions. We’ve got the right products. We do a very good job bringing those to our customers. Where I think the biggest opportunity is, frankly, what we talked about today. We’re undersizing card by a lot. We haven’t grown that business over the last couple of years.

I think that’s beginning to inflect if you start looking at the balances. It is a lot of work that we’ve got ahead of us in order to get that to where we think ultimately we can make it a more meaningful part of the business. That is the investments that we’ve got. In the affluence space, we do a decent job on some of those sort of more traditional products. We talked about introducing a securities-based line of credit. We think that’s an attractive opportunity for us as sort of an incremental driver of growth. Those are the two biggest areas of focus at this point. I don’t know, Rob, if you had anything.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. No, that’s well said.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah. Coming back to card and credit card, how will you guys measure the success of what you’re achieving in the card space?

Unidentified speaker: Yeah, that’s a great question. First, we got to get a team that really understands the space, knows how to execute, knows what great is. I feel like we’ve got that group in place. They’re now beginning the journey of that investment to really build a best-in-class platform for our customers. I would really want to make sure people understand that we’re not trying to play a national card game and prospect in the card space. What we’re trying to do is really serve and deliver for our core customers. That’s the overriding objective that we’ve gotten. When we look at that, beginning to inflect on the balances, getting that to sort of sustainable year-over-year-over-year growth, that’ll be an early sign. Continuing to grow our spend. We’ve actually done a very good job in terms of growing customer spend.

We had a record quarter in the third quarter, and we feel good on the trajectory as we go into the fourth quarter. Ultimately, the longer tail on that is going to be actually driving up that attach rate among our core customers. Obviously, every day that goes by, we add more customers into the denominator. We are fighting against ourselves in some ways, but that also creates the opportunity. Those, I would say, are sort of the things that we look at. I think the earliest thing you will begin to see is the spend and the balances, and then over time, the attach rate.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. The key, Gerard, as you know, is the core customer offer. We’re not looking to go where no bank has ever gone before. We’re looking for our fair share. As Alex said, we’re putting a lot of work into it. Generally speaking, our core customers are very receptive to the offer.

Unidentified speaker: Yeah. They want to do business with us. We need to put out that value proposition that makes sense for them. Again, all of this still in the prime, super prime space, no change in credit appetite or anything else like that.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Rob, obviously, you guys talked about scale today, the announcement. M&A activity is picking up in our industry. Of course, everybody knows your First Bank deal that you did about a month ago. There’s a lot of speculation and chatter about what’s next for the bigger deals. Your name is often included in there as an acquirer, which may be weighing on the valuation. Can you give us some of your thoughts and color, how you guys think about M&A going forward?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. A couple of things on that. One, on the First Bank acquisition, we announced it a month ago, as Alex referenced. Our expectation is to close it at the first of the year pending regulatory approval, which we are optimistic about. Just to touch on that, we are really excited about it. We were excited about it at the time that we did it. We were drawn to what we saw as a pretty unique consumer interest-bearing and non-interest-bearing deposit franchise that was independent from their commercial activities. Really attractive. We structured it in a way. The IRRs are very good. Getting to know the people and working toward close, we are even more excited. Our new colleagues are culturally fit, and we are seeing big opportunities. Really, really feel good about that acquisition. In regard to acquisitions and how that is weighing on our stock price, it is.

In my estimation, our estimation, I think investors are overweighting our willingness to do a transaction at any cost. We see that in our valuation. We are trading at a discount now on a PE basis to our multiples for the first time since I have been at PNC, which I think is like 11 or 12 years. I mean, and it is not because of our operating performance or our track record. If you look at our operating performance year to date in 2025, we are at or near the top of the pack in our peer group in NII. We are at or near the top of the peer group in revenue because our fees have been very good. Importantly, in terms of core profitability, PPNR, the peer group is up 7%. They are having a good year. We are having a better year. We are at 12%.

We’re doing all the things that we want to do, a lot of that coming from our organic growth efforts that are now contributing. They’re not all on the comb. With that valuation and that move, clearly, there’s some portion of our shareholders that do not want us to do a deal. We hear that. Bill and I were talking about it yesterday. Bill Demchak, our CEO, and he and I, as you’ve noted, we are the longest-tenured combo of CEO and CFO in our peer group. We quickly realized we’re large shareholders too. We’re very much aligned personally with our shareholders as it should be. Here’s maybe your headline, Gerard. We’re not masochists. Like most people, we’re not going to hurt ourselves. If a deal cannot happen and organic growth is the path, so be it.

We won’t lose our discipline. We won’t lose our focus on what’s best for our shareholder. I think at the moment, the valuation is putting some of that in. If you feel that way, it’s untrue and you’re misinformed.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah. In the past, there have been some quotes about maybe growing to a trillion dollar size. If that is fair, what is that path? I mean, because that is still a big jump for me.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. I mean, that trillion dollar number is just an arbitrary number. And really what that’s about is we want more scale. But so does everybody. The largest bank in the country, we all know who that is. They want more scale. The smallest bank in the country, I do not know if anybody knows who that is, but I assure you they want more scale. In our case, we’re less reliant on anything immediate in terms of scale because we have more than most. It is just a target. How you get there is a combination of organic growth, which we feel great about, and acquisitions if they happen to make sense. I can assure you if we get to a trillion dollars, at that point, we’ll want more scale too. There is nothing magical about that number other than just making the point scale matters.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Right. Got it. Why don’t we open it up to some questions from the audience? Are there any questions for, yep, right up here, Pierce?

Rob Reilly, Executive Vice President and CFO, PNC Financial: He wants to follow up on the masochist thing I’ve got.

Thanks. Pierce Crosby from Davidson.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah, of course.

I wanted to ask you about how to think about the financial impact about the expansion branches that are sort of still in, I do not know if we want to call it infancies or at least just maturing. Would you say that they are a drag on absolute profitability today in returns on equity? Or I am looking at them as in the basket, not obviously the newest ones, but all of them together. Or is it more a case where since they have not necessarily grown enough to generate too much in loans yet, so it is not necessarily attracting capital? And the expenses that you are spending, they are at least covered by the revenue. They are not where you want them to be. But how should we think about what is sort of in the run rate?

As they mature, what are sort of those impacts on sort of margins, returns, and so forth? Also a sense of the order of magnitude of it, of whether this is sort of nitpicking or sort of an adjustment that we should be thinking about.

Rob Reilly, Executive Vice President and CFO, PNC Financial: I get it. Alex, what are you?

Unidentified speaker: I’ll start at the localized level.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. That’s right.

Unidentified speaker: Maybe just to sort of think about even just an individual branch so you can sort of give you a sense. You make a capital investment to open the branch thinking more on a cash flow basis just because I think that’s an easier way economically to think about it. That money is invested. There is basically a J curve where you begin to earn back to a break-even point. We’ve conservatively modeled a little bit less than four years to break even. After that, you’re sort of in the positive and fairly quickly thereafter get to payback. It is pretty attractive. You can sort of think about you have a series of J curves that sort of come online as you build the branches. As each one of those seasons, it gets more and more and more profitable.

You begin with a hole, and then it basically inflects and becomes quite attractive.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. That is pretty much what we have been doing, even on the corporate side in terms of these de novo markets, these waterfalls in terms of vintages, that the vintages that we did five years ago are now paying for the new vintage that is coming. It is neutral. I mean, I suppose if we stopped, which we do not want to do, we could improve some short-term returns. That is all part of the plan and fairly obvious.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yeah. Betsy?

Oh, hi, Betsy Graslak, Morgan Stanley. Thanks so much for coming here today.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah, great to see you.

I totally get your point that you’re going to be applying a very high bar to any potential opportunities. You might not be looking, but there might be some who are looking to partner with you, right, in the sense that you want more scale. Everyone wants more scale. We’re seeing this across industries. We have this unique time frame right now where regulators seem to be supportive of corporate actions at this moment. When you were speaking with Bill the other day, how did that factor into the conversation around how you’re thinking? Is there, because I’m sure you speak with lots of folks in the industry. Should we be surprised if there’s an opportunity that emerges in this environment?

Yeah. So it’s a good question. I sort of go to the place that we’ve been in the business, and I’m talking like the old guy. But we’ve been in the business for a long time, and we’ve got a track record in terms of making acquisitions that made sense for our shareholders. We’re very proud of that. And there’s things that we vetted that we didn’t do that we’re glad we didn’t do. The notion that this time is somehow different simply because the regulatory environment is generally viewed as more conducive to approving mergers doesn’t mean that we’re going to lose our discipline or lose our experience or lose our focus on the shareholders. Could more opportunities net-net come up potentially? Nothing really changes in terms of the way that we assess it. I think it’s important.

It’s important because it’s back to this valuation aspect. We’re not distinct in that regard. If we get back into a position where we have a premium again, because at the moment right now, our shareholders are saying, "Don’t do it," we’d do what we always do. If an opportunity were to come up, we’d look at it. Here’s the thing. So would a lot of other banks, to your point. We’re not that distinct.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Julian?

Can I ask a general question about competitive position between regional banks and the money center banks? I mean, you’re in a very luxurious position. You’re large. You’re high quality. I’m curious how the competitive position is changing at the margin in general between those two groups because you have competition from private debt. You have lower capital requirements for the money center banks and really not really seeing that for the regional banks. Also, some people think that maybe the biggest banks, the money center banks, might benefit more from cost cutting via AI. How are you seeing the competitive position changing between the two groups?

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah, sure. I think it’s best, especially in this period of day, it’s probably best to talk about that in terms of our client segments because the competition is different. So Alex, maybe you can just speak about that on the retail side, and then I’ll talk about commercial and our wealth and then the overall bank.

Unidentified speaker: Yeah. I would say we feel pretty good on, first and foremost, I would say we think about the world as 9,000 banks and credit unions out there. There’s a couple that are bigger than us, but we’re bigger than 8,994 of them. By the way, it takes like 4,000 of them combined to equal our retail franchise. We feel pretty good to Rob’s earlier point on our relative scale. We’re going after a lot of that share, and we feel like we’re doing that successfully and winning. We’re doing it as we continue to expand in the markets.

What we try to do is bring the capabilities of one of the larger banks in the country, which we have a totally comprehensive product set, the ability to support our customers in all sort of periods, and try to do it in a way that’s very local, very high touch, very relationship based. This concept of client obsession and sort of hospitality, like we mean that. We think we can treat our clients and treat our teams in a slightly different way than perhaps the biggest player. We like that positioning. We think that’s relatively unique in our model in the retail space. That’s been what’s allowing us to take share.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. It is similar on the commercial side in the sense that that competition is nothing new to us. We compete against all the large banks across the country, across all asset sizes. We do not win them all, but we win our fair share. I point back to the PPNR growth. The large banks are in our peer group. Averages have been about 7%. They have had a good year. We have had a better year.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Actually, Rob, maybe I can follow up with a question aside from deposit market share at this conference. The other topic that’s been talked about a lot is the loans to the non-depository financial institutions and private credit. Obviously, you guys are present there. Can you give us some color on how you approach that business? You have done a very good job, obviously, with minimal losses over the years.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah. No, thanks, George, because that’s a topic of the moment. The short answer is we feel really good about the loans that we have. They do represent the lowest risk loans in our commercial loan book or our total loan book for that matter. Let me break it down for you a little bit so you know what’s inside the bucket. As you know, the FDIC expanded the definition. What otherwise looks like growth in that category for us was loan reclassification. The buckets that we have, stick with me here. We have four buckets that comprise about 20% of our loans, $60 billion. The largest bucket inside of that, which is about 40% of the $60 billion or $25 billion or so, are asset securitizations.

Think trade receivables securitization, CLOs, both of which use the same structure, which is a bankruptcy remote special purpose entity that diversified assets go into. Then we lend on conservative advance rates to that entity. The short answer is we’ve been doing that since 1995, the trade receivables ending. We’ve had zero losses. Naturally, with all the attention around it, we recently did just a check on all the collateral and the compliance, which we oversee. We use some third parties, but we’re the eyes on. We liked what we saw. That’s the biggest component of the bucket. The next, where we are a little outsized, and you’ll recall when I tell you capital commitment lines to private equity funds. We purchased a few years ago Signature Bank’s capital commitment line business when they were working Signature Bank out.

We’re now 30% of that bucket is capital commitment lines. Those are short-term, secured by the capital commitments of pension funds, institutions, high net worth individuals. Again, short-term, just the commitment, not the use of the funds that go into leverage transactions. Again, zero, zero losses. The third, so there are two more buckets left, 15% each. The third is real estate. Real estate investment trusts, real estate funds, subscription facilities. Similar, we’ve been in that business a long time. Virtually no losses there. I say virtually, we were talking about this. We had one like five years ago, small loss, and we’re still talking about it. We’re still upset about that. That book is in very good shape.

Lastly, it is just all other, which are loans to insurance, true financial institutions, mortgage warehouse lines, some equipment leasing, no subprime consumer or anything along those lines. Put all that together. It is 90+% investment grade or investment grade equivalent, zero losses, zero criticized, zero watch list, zero NPLs, zero charge-offs. It is different than what you read. Really, just as an observer, defending NDFI, these are not NDFI. These are marginal borrowers that use too much leverage or asset class. We have seen that over the years at BAB, have we not, George?

Unidentified speaker: Oh, yes. Yeah.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Client selection is huge.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Yep. With that, we’re down to the last few seconds. I want to thank both of you for coming again to BAB.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Yeah, thank you for that.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Please join me in a round of applause thanking PNC.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Thank you.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: All right.

Rob Reilly, Executive Vice President and CFO, PNC Financial: Good job, guys.

Gerard Cassidy, President, The PNC Financial Services Group of Boston: Next up is Rajan Kone.

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