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

National expansion strategy and business model

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

• The relationship-based model emphasizes local presence, high-touch service, and leveraging a strong treasury management platform.

• 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.

• The approach centers on disciplined client selection, hiring top talent, and building deep, value-added relationships over time.

• New market sales now represent nearly half of total C&IB AMG sales, with Texas and California emerging as major growth states.

Financial performance and investment plans

• Organic growth delivers higher returns than current M&A opportunities and allows greater control over client and asset selection.

• A $1.5 billion investment is planned for over 200 new branch builds and 1,400 renovations, targeting at least 7% branch market share in key markets.

• Expansion markets' C&IB AMG revenues are on pace for $2 billion in 2024, growing at a 20% CAGR since 2012, with a path to $3.5 billion in the near term and $6 billion longer term.

• Incremental margins in expansion markets are high due to scalable infrastructure, supporting positive operating leverage.

• No change to expense guidance; investments are expected to maintain positive operating leverage.

Execution risks and strategic flexibility

• Success depends on consistent execution of the established playbook: retaining talent, targeting top clients, and maintaining credit discipline.

• Achieving 7% branch share is critical for accelerated deposit and DDA growth, with a strong correlation to market share gains.

• While organic growth is prioritized, the company remains open to acquisitions if valuations become attractive.

• Returns on organic expansion are strong and comparable to acquisitions over the long term, though acquisitions deliver faster results.

• Lending growth is focused on deepening relationships with core DDA customers, not just increasing loan balances.