The PNC Financial Services Group (PNC) BancAnalysts Association of Boston Conference summary

National expansion strategy and progress

• National expansion efforts have exceeded expectations, focusing on organic growth due to high acquisition valuations.

• Initiatives include new digital platforms, treasury management enhancements, credit card overhaul, and a new loyalty program.

• Expansion has led to presence in 26 of the top 30 and 9 of the 10 fastest-growing U.S. markets, with branch builds accelerating in the Southeast and Southwest.

• Relationship-based model emphasizes hiring top talent, patient client selection, and deep community integration.

• Expansion markets now account for nearly half of C&IB and AMG sales, with Texas and California emerging as major growth states.

Financial performance and investment

• C&IB AMG revenues in expansion markets are on pace for $2 billion in 2024, growing at a 20% CAGR since 2012.

• Retail DDA sales in new markets now represent nearly 40% of total production, with Texas leading DDA production.

• Over $1.5 billion is being invested in 200+ new branches and 1,400 renovations, targeting at least 7% branch market share in key markets.

• Positive operating leverage is expected to be maintained despite increased investment, with high incremental margins from expansion.

• Expansion market productivity is rising, with a path to $3.5 billion near-term and $6 billion long-term revenue potential.

Strategic approach: Build vs. buy

• Current focus is on organic growth due to unattractive acquisition valuations, but readiness for M&A remains if conditions change.

• Returns from organic expansion are very attractive, though they materialize over three to five years, while acquisitions deliver faster but not necessarily higher returns.

• The playbook for growth centers on disciplined execution, talent retention, and relationship-driven client acquisition.

• Achieving 7% branch share in a market is seen as a critical inflection point for accelerated deposit and DDA growth.

• No change in guidance; positive operating leverage and disciplined credit standards remain priorities.