01—Abstract
Summary
Summary of the 10-Q filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.
PNC Financial Services Group reported first-quarter 2026 net income of $1.8 billiona, or $4.13 per diluted share, down 13% from $2.0 billion ($4.88) in the fourth quarter of 2025 but up 18% from $1.5 billion ($3.51) a year earlier.
The sequential decline reflected higher noninterest expense (up $165 millionb, including FirstBank integration costs), lower noninterest income (down $136 million, mainly lower private equity revenue and mortgage servicing rights valuation) and a higher provision for credit losses ($210 million vs. $139 million). Net interest income rose 6% sequentially to $4.0 billion and net interest margin expanded 11 basis points to 2.95%, helped by the FirstBank acquisition, lower funding costs and commercial loan growth. Versus the prior-year quarter, total revenue grew 13% and net interest income grew 14%.
The balance sheet grew substantially following the January 5, 2026 acquisition of FirstBank Holding Company, which added roughly $26.4 billionc of assets, $16.0 billion of loans and $23.1 billion of deposits at close. Total assets reached $603.0 billion, total loans $360.9 billion (up 9% sequentially, with commercial loans up 10%), and total deposits $457.6 billion. Borrowed funds rose 17% to $66.7 billion, mainly through higher FHLB advances.
Credit quality remained stable overall: nonperforming assets were $2.4 billiond, net charge-offs were $253 million (0.29% of average loans, including $45 million of acquired charge-offs), and the ACL to total loans was 1.52%, down from 1.58%. Capital remained strong, with a CET1 ratio of 10.1% (down from 10.6%, reflecting the acquisition) and common shareholders' equity of $57.8 billion. For the second quarter, management guides to average loan growth of 2% to 3%, net interest income up about 3%, total revenue up about 3.5%, and net charge-offs of about $225 million, with $150 million of integration expense expected.
For full-year 2026, guidance includes average loan growth of about 11%, net interest income up about 14.5%, and $325 million of integration costs. The company plans $600 million to $700 million of second-quarter share repurchases and declared a $1.70 quarterly common dividend payable May 5, 2026.
02—Key points
Key Highlights
- Q1 2026 net income was $1.8 billion ($4.13 diluted EPS), down 13% sequentially but up 18% year over year; return on average common equity was 11.92%, versus 14.33% in Q4 2025 and 11.60% in Q1 2025.
- FirstBank acquisition (closed January 5, 2026) drove growth: total assets rose 5% to $603.0 billion, loans rose 9% to $360.9 billion, and deposits rose 4% to $457.6 billion; goodwill increased $2.3 billion to $13.3 billion.
- Net interest income of $4.0 billion rose 6% sequentially and 14% year over year; net interest margin reached 2.95%, up 11 basis points from Q4 2025, with deposit rates paid down 18 basis points.
- Noninterest expense rose 5% sequentially to $3.8 billion and the efficiency ratio worsened to 61% from 59%, including FirstBank operating and integration costs.
- Credit quality was stable: nonperforming assets were $2.4 billion, the ACL was $5.5 billion (1.52% of loans), and net charge-offs were $253 million, including $45 million of acquired purchase-accounting charge-offs.
- Capital returns continued at $1.4 billion in Q1 ($0.7 billion dividends and $0.7 billion buybacks), but CET1 fell to 10.1% from 10.6% after the acquisition, which was funded partly with about $2.9 billion of common stock issuance.
- Management guides 2026 average loans up about 11%, net interest income up about 14.5%, and noninterest expense (excluding integration) up about 7%, with a 19.5% effective tax rate; Q2 share repurchases are expected at $600 million to $700 million.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 5, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $6.17B$5.45B | +13.1% |
| Net Income | $1.77B$1.50B | +18.2% |
| EPS (Basic) | $4.13$3.52 | +17.3% |
| EPS (Diluted) | $4.13$3.51 | +17.7% |
| Shares Outstanding (Basic) | 405.00M398.00M | +1.8% |
| Shares Outstanding (Diluted) | 405.00M398.00M | +1.8% |
05—Questions
Frequently Asked Questions
Why did PNC's quarterly net income decline from Q4 2025 even though net interest income grew?
Net income fell $261 million (13%) from Q4 2025 to $1.8 billion, mainly because noninterest expense rose $165 million (including FirstBank operating and integration costs), noninterest income fell $136 million (lower private equity revenue, a $31 million mortgage servicing rights valuation decline and lower capital markets fees), and the provision for credit losses increased $71 million to $210 million. Q4 2025 also benefited from a low 12.7% effective tax rate, versus 19.0% in Q1 2026. Net interest income rose $230 million, which partly offset these headwinds.
How did the FirstBank acquisition affect PNC's balance sheet and capital?
FirstBank added about $26.4 billion of assets, $16.0 billion of loans and $23.1 billion of deposits at closing (before purchase accounting). The deal was valued at about $4.3 billion, including $2.9 billion of common stock and $1.2 billion of cash, and created $2.3 billion of goodwill and $761 million of core deposit intangibles. The CET1 ratio declined to 10.1% from 10.6%, and FirstBank's internal controls were excluded from management's assessment for the quarter. FirstBank customers are expected to convert to PNC Bank in mid-June 2026.
Is PNC's credit quality deteriorating?
Credit quality was broadly stable. Nonperforming assets were $2.4 billion (0.40% of total assets), essentially flat versus year-end, and the nonperforming loan ratio improved to 0.62% from 0.67%. Net charge-offs rose to $253 million from $205 million a year earlier, but $45 million of that was purchase-accounting related. Total delinquencies increased 8% to $1.6 billion, largely due to acquired FirstBank loans. The ACL ratio fell to 1.52% from 1.58%, though the office CRE portfolio, with 8.8% of its loans nonperforming and 8.9% reserved, remains an area of focus.
What is PNC's outlook for the rest of 2026?
For Q2 2026 versus Q1, management expects average loans up 2% to 3%, net interest income up about 3%, total revenue up about 3.5%, and net charge-offs of about $225 million. For full-year 2026 versus 2025, it expects average loans up about 11%, net interest income up about 14.5%, noninterest income up about 6%, and noninterest expense (excluding integration) up about 7%. Integration costs are projected at $150 million in Q2 and $325 million for the year. The baseline economic forecast assumes the Federal Reserve holds the federal funds rate at 3.50% to 3.75% through 2027, with risks from the Iran conflict and energy prices.
How strong is PNC's liquidity and capital position after the acquisition?
PNC remained well capitalized, with a CET1 ratio of 10.1%, total capital ratio of 13.1%, and supplementary leverage ratio of 7.4%. Total available contingent liquidity was $236.8 billion, the LCR and NSFR exceeded regulatory minimums, and parent company liquidity was $28.9 billion. Uninsured deposits were approximately 44% of total deposits. Brokered deposits fell to $1.9 billion from $5.1 billion. Senior and subordinated debt rose to $42.5 billion from $41.7 billion, including $4.1 billion of issuances in the quarter. The company also redeemed $1.25 billion of senior notes in January and announced a May 2026 redemption of $1.25 billion of PNC Bank notes.
06—Continue