PNC Financial Services Group — Third Quarter 2026 Earnings Summary

Financial Performance

• Net income was $2.1 billion ($2,097 million), compared to $2.06 billion in the second quarter of 2026 and $1.82 billion in the third quarter of 2025.
• Diluted earnings per share (EPS) were $4.97, compared to $4.81 in the prior quarter and $4.35 in the prior year period.
• Adjusted diluted EPS was $5.09, an increase of $0.24 from the second quarter of 2026.
• Total revenue was $6.56 billion, a decrease of 5% from the second quarter of 2026, driven by lower noninterest income offsetting growth in net interest income.
• Net interest income (NII) increased 2% to $4.21 billion, driven by commercial loan growth and higher yields, partially offset by increased funding costs.
• Net interest margin (NIM) was 2.94%, down 2 basis points from 2.96% in the second quarter of 2026.
• Fee income decreased 6% to $2.14 billion, primarily due to elevated second quarter capital markets activity.
• Other noninterest income was $214 million, a decrease of $275 million from the second quarter, driven by significant items related to net Visa activity.
• Noninterest expense was $3.75 billion, a decrease of 8% from the second quarter of 2026.
• Adjusted noninterest expense (excluding integration costs and significant items) decreased 3% to $3.72 billion.
• Provision for credit losses was $189 million, stable compared to the second quarter of 2026.
• Pretax, pre-provision earnings (PPNR) were $2.81 billion, an increase of 1% from the second quarter of 2026.
• Return on average common shareholders' equity was 13.89%.
• Return on average tangible common equity (ROTCE) was 18.28%.
• Efficiency ratio improved to 57% from 60% in the second quarter of 2026.
• Net loan charge-offs were $257 million, including $35 million related to the student loan portfolio transfer.
• Allowance for credit losses was $5.4 billion, or 1.42% of total loans at September 30, 2026.

Guidance and Future Outlook

• Share repurchase activity in the fourth quarter of 2026 is expected to approximate third quarter 2026 levels.
• PNC's Stress Capital Buffer (SCB) will be maintained at the regulatory minimum of 2.5% through December 31, 2027.
• Management remains confident in the long-term outlook, citing strong momentum and a well-positioned strategy.

Business Segments and Product Lines

• Retail Banking: Earnings decreased 18% to $1.43 billion from the second quarter, driven by lower noninterest income (including a $448 million Visa gain in Q2) and lower net interest income. Brokerage account client assets were stable at $97 billion.
• Corporate & Institutional Banking: Earnings decreased 2% to $1.55 billion from the second quarter. Net interest income increased 3% to $2.05 billion.
• Asset Management Group: Earnings were $128 million, down from $135 million in the second quarter.
• Other: Reported a loss of $1.02 billion, compared to a loss of $1.43 billion in the second quarter.
• Loan Portfolio: Average loans increased 2% to $372.2 billion. Commercial loans grew 4% to $269.2 billion, while consumer loans decreased 1% to $103.0 billion.
• Deposit Portfolio: Average deposits increased 1% to $461.2 billion, driven by seasonally higher commercial interest-bearing deposits.
• Student Loans: A $1.4 billion student loan portfolio was transferred to held-for-sale during the quarter.

Market and Competitive Landscape

• Commercial loan growth was driven by strong new production and increased utilization.
• Capital markets and advisory revenue decreased 25% quarter-over-quarter due to elevated activity in the second quarter.
• Asset management and brokerage fees increased 2% quarter-over-quarter due to higher average equity markets and increased client activity.
• Card and cash management revenue was stable quarter-over-quarter, with treasury management product revenue growth offset by FirstBank integration-related fee waivers.

Risks and Challenges

• Integration Costs: PNC incurred $36 million in integration costs related to the FirstBank acquisition in the third quarter.
• Significant Items: Results included negative $25 million in significant items related to net Visa activity, including valuation gains on remaining Visa shares and derivative fair value adjustments for litigation escrow funding.
• Credit Quality: Nonperforming loans increased 8% to $2.2 billion, driven by higher commercial nonperforming loans.
• Market Volatility: Accumulated other comprehensive income (AOCI) was negative $6.5 billion, reflecting the impact of higher interest rates on securities and swaps.
• Funding Costs: Increased funding costs partially offset the growth in net interest income.

Management Commentary and Tone

• Bill Demchak, Chairman and CEO, stated: "Our strategy continues to drive growth across our businesses, as we deepen our presence in key markets and expand our reach nationally. During the third quarter, we continued to build on the strong momentum we delivered in the first half of the year, and we generated an 18.3% return on average tangible common equity. We are well positioned, and remain confident in our long-term outlook."
• The tone reflects confidence in the company's strategy and long-term growth despite short-term fluctuations in capital markets revenue and integration costs.

Other Key Points

• Dividends: On October 2, 2026, the board declared a quarterly cash dividend of $2.00 per share, payable November 5, 2026.
• Capital Returns: PNC returned $1.4 billion to shareholders in the third quarter, consisting of $0.8 billion in dividends and $0.6 billion in share repurchases.
• Share Repurchases: Approximately 27% of the 100 million common shares remained available for repurchase under the board-approved program as of September 30, 2026.
• Capital Ratios: The Basel III common equity tier 1 (CET1) capital ratio was 9.8% at September 30, 2026.
• Liquidity: The average Liquidity Coverage Ratio (LCR) for the quarter was 106%, exceeding regulatory minimum requirements.
• Tax Rate: The effective tax rate was 20.0% for the third quarter of 2026.
• Internal Adjustments: PNC updated its internal funds transfer pricing methodology in the second quarter of 2026, with prior periods adjusted to conform.