PNC Raises 2026 Outlook After Q3 Loan Growth

PNC raised several full-year 2026 targets after strong loan and deposit growth supported higher third-quarter net interest income and profit. The bank reported net income of $2.10 billion, or $4.97 per diluted share, while adjusted diluted earnings were $5.09 per share.

Net income increased 15% from a year earlier and 2% from the second quarter. Diluted EPS rose 14% year over year and 3% sequentially, while adjusted EPS increased 17% and 5%, respectively. Pretax, pre-provision earnings, a non-GAAP measure, reached $2.81 billion, up 15% year over year and 1% from the linked quarter.

Total revenue was $6.56 billion, an 11% increase from the prior-year period but a 5% decline from the second quarter. The sequential decrease reflected lower noninterest income, including a decline in capital markets and advisory revenue and the impact of significant items recorded in the previous quarter.

Lending Growth Supports Net Interest Income

Average loans rose by $9.0 billion, or 2%, from the second quarter to $372.2 billion and were 14% higher year over year. Average commercial and industrial loans increased 4% sequentially and 19% from a year earlier, while commercial real estate loans recorded the same percentage increases. Consumer loans declined 1% from the second quarter but remained 4% above the prior-year level.

Net interest income increased 2% sequentially and 15% year over year to $4.21 billion. PNC’s reported net interest margin, calculated on a taxable-equivalent basis, was 2.94%, compared with 2.96% in the second quarter and 2.79% a year earlier.

Average deposits grew 1% from the linked quarter and 7% year over year to $461.2 billion, helping fund the bank’s balance-sheet expansion. Average total assets increased 2% sequentially and 10% from a year earlier to $628.9 billion. Average investment securities rose 3% from the second quarter to $151.4 billion.

Noninterest income totaled $2.36 billion, down 15% sequentially but up 4% year over year. Non-GAAP fee income declined 6% from the second quarter to $2.14 billion while increasing 4% from a year earlier. Capital markets and advisory revenue fell 25% sequentially to $433 million, though year-to-date revenue in that category was 39% higher. Asset management and brokerage revenue rose 11% year over year, while card and cash management revenue increased 4%.

Expenses Decline Sequentially, Credit Remains Stable

Noninterest expense was $3.75 billion, down 8% from the second quarter but up 8% year over year. Excluding integration costs and significant items, adjusted noninterest expense declined 3% sequentially to $3.72 billion. PNC’s efficiency ratio improved to 57% from 60% in the second quarter.

The provision for credit losses was $189 million, down 1% sequentially and up 13% year over year. Net charge-offs totaled $257 million, equivalent to 0.28% of average loans, compared with 0.25% in the prior quarter. Nonperforming loans represented 0.58% of period-end loans, up from 0.55% in June but below 0.65% a year earlier. Delinquencies declined to 0.34% of loans from 0.39% in the second quarter.

PNC estimated its Basel III common equity Tier 1 capital ratio at 9.8%, compared with 9.9% in the prior quarter. Non-GAAP return on average tangible common equity rose to 18.28% from 17.88%. The bank returned $1.4 billion to shareholders during the quarter, including $800 million of common dividends and $600 million of share repurchases.

Business metrics showed growth across PNC’s major operations. Retail Banking added about 215,000 net new checking accounts organically during the first nine months of 2026, while average credit card balances rose 12% year over year. Corporate and Institutional Banking average loans increased 17%, and the unit added about 500 Corporate and Commercial Banking clients in expansion markets. The Asset Management Group reported approximately $500 billion of assets under administration, up 13%, with new asset production increasing 28%.

PNC Lifts Full-Year Targets

PNC now expects average loans to increase about 13.5% in 2026 from the 2025 baseline, compared with its previous forecast of approximately 12.5%. It expects net interest income to grow about 15.5%, versus the previous range of 15% to 15.5%.

The bank also raised its expected noninterest income growth to about 10.5% from 9% and its total revenue growth target to approximately 13.7% from 13%. At the same time, projected noninterest expense growth increased to about 9.5% from 8.5%. The noninterest income, revenue and expense outlooks exclude specified integration costs and significant items. PNC maintained its expected effective tax rate at approximately 19.5%.

For the fourth quarter, management expects average loans to rise about 2.5% from the third-quarter level and net interest income to increase approximately 4%. Non-GAAP fee income is projected to grow about 3.5%, while adjusted noninterest expense is expected to rise roughly 5%. PNC expects other noninterest income of about $250 million and net charge-offs of approximately $250 million. The outlook supports management’s expectation for a fourth-quarter net interest margin of 3.0% or higher.

The forecasts depend on PNC’s economic assumptions and exclude potential legal and regulatory contingencies. The bank’s baseline calls for continued economic expansion into 2027, real U.S. GDP growth above 2% in 2026 and two additional Federal Reserve rate increases by March 2027. PNC identified elevated inflation, a possible reversal in AI-related investment sentiment, a further sharp rise in bond yields, regulatory changes, acquisition integration, competition, credit conditions and operational or cybersecurity disruptions among the uncertainties that could affect actual results.