How did the one-time items affect PNC's second-quarter earnings?

The items were mostly offsetting. A $448 million gain on the Visa Class B-2 exchange was largely offset by a $140 million PNC Foundation contribution, a $139 million securities loss from repositioning about $4 billion of AFS securities, $85 million of Visa B-3 derivative adjustments, and $121 million of FirstBank integration expenses plus $6 million in integration costs within noninterest income. Net, these reduced EPS by $0.04 (to $4.81 from $4.85 adjusted in the non-GAAP view), and the reported figure is the GAAP number investors should anchor to.

Is the dividend increase sustainable given the lower CET1 ratio?

The board raised the quarterly dividend 30 cents to $2.00 per share, payable August 5, 2026. PNC's stated SCB will stay at the 2.5% regulatory minimum through September 30, 2027, and the CET1 ratio of 9.9% remains well above the regulatory minimum with the company described as well capitalized. Payouts were about $0.7 billion in dividends in the quarter, and the company expects third-quarter buybacks to be similar to second-quarter levels, leaving roughly 29% of the 100 million-share authorization available.

What drove the increase in loans and deposits?

Average loans rose $12.3 billion (4%) sequentially, with commercial loans up $13.0 billion on strong new production and higher utilization, while consumer loans fell $0.7 billion. Average deposits were stable at $457 billion, as higher consumer deposits offset lower brokered time deposits and seasonal declines in commercial balances. Average borrowed funds rose $16.1 billion to $78.9 billion, mainly from higher FHLB advances, which indicates loan growth is being partly funded with wholesale borrowings.

How is PNC's credit quality trending?

Credit trends improved. Net charge-offs fell to $226 million (0.25% annualized) from $253 million, mainly because the prior quarter included $45 million of acquired FirstBank charge-offs. Delinquencies dropped 8% to $1.4 billion and nonperforming loans fell 10% to $2.0 billion, driven by commercial real estate. The allowance for credit losses was $5.5 billion (1.48% of loans), down from 1.52%. Year over year, charge-offs rose 14% and consumer delinquencies increased, so investors should watch consumer credit.

What is the outlook for interest rates and the economy as described in the filing?

PNC's baseline forecast calls for real GDP growth of 2.1% in 2026 and CPI inflation staying above 3% through year-end, with the unemployment rate near 4.3%. The company expects the Federal Reserve to hold the federal funds rate at 3.50% to 3.75% through 2027, but flags risks skewed toward tighter monetary policy because of persistent inflation and energy price pressures. Key downside risks include a sudden reversal in AI-related sentiment and a further sharp rise in oil prices. These are forward-looking management assumptions, not guarantees.

PNC 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 15, 2026. Cited figures are marked; the original filing is the authoritative source.

PNC Financial Services reported second-quarter 2026 net income of $2.1 billion^a, or $4.81 diluted EPS ($4.85 as adjusted for FirstBank integration costs and 2Q26 significant items), up from $4.13 in the first quarter and $3.85 a year ago.

Total revenue rose 12% sequentially to a record $6.9 billion^b, with net interest income up 4% to $4.1 billion, noninterest income up 26% to $2.8 billion, and fee income up 10%, led by record capital markets and advisory revenue. Positive operating leverage was 3%, pretax pre-provision earnings rose 16%, and ROTCE improved to 17.9%. Results include a $448 million gain from the Visa exchange program, partly offset by a $139 million securities loss from a roughly $4 billion repositioning, a $140 million PNC Foundation contribution, and $85 million of Visa B-3 derivative adjustments.

Credit and balance sheet trends were solid. Average loans grew $12.3 billion^c (4%) sequentially, driven by commercial lending, while average deposits were stable at $457 billion. Net charge-offs fell to $226 million (0.25% annualized), nonperforming loans declined 10% to $2.0 billion, and the allowance ratio was 1.48%.

The CET1 ratio was an estimated 9.9%, down from 10.1%, as PNC returned $1.3 billion^d to shareholders, including $0.6 billion of buybacks. The board raised the quarterly dividend 18% to $2.00 per share, and third-quarter buybacks are expected to be similar to the second quarter's pace. The FirstBank conversion was completed on June 22, 2026, adding roughly 780,000 customers and 95 branches in Colorado and Arizona.

Investors should weigh the strong underlying fee and lending momentum against a lower CET1 ratio, higher borrowed funds (up $16 billion sequentially to $78.9 billion on average), and a continued unrealized securities loss position of $2.1 billion. The company's baseline outlook assumes a Federal Reserve hold at 3.50% to 3.75% through 2027, with risks skewed toward tighter policy given persistent inflation.

02—Key points

Key Highlights

Diluted EPS of $4.81 ($4.85 adjusted) versus $4.13 in 1Q26 and $3.85 in 2Q25; net income of $2.055 billion.
Record total revenue of $6.9 billion, up 12% sequentially and 21% year over year, with NII of $4.1 billion (NIM 2.96%, +1 bp).
Fee income up 10% sequentially to $2.3 billion, led by capital markets and advisory revenue of $577 million, including record M&A advisory fees.
Noninterest expense of $4.1 billion included $261 million of integration costs and significant items; excluding these, expense rose 5% sequentially to $3.8 billion.
Credit quality improved: net charge-offs of $226 million (0.25%), nonperforming loans down 10% to $2.0 billion, and provision of $191 million.
CET1 ratio of 9.9% (estimated), down from 10.1%, while PNC returned $1.3 billion to shareholders; the quarterly dividend rises 18% to $2.00 per share.
FirstBank integration completed June 22, 2026, with roughly 780,000 customers and 95 branches converted; 2Q26 results include the full-quarter benefit.

03—Questions

Frequently Asked Questions

How did the one-time items affect PNC's second-quarter earnings?
The items were mostly offsetting. A $448 million gain on the Visa Class B-2 exchange was largely offset by a $140 million PNC Foundation contribution, a $139 million securities loss from repositioning about $4 billion of AFS securities, $85 million of Visa B-3 derivative adjustments, and $121 million of FirstBank integration expenses plus $6 million in integration costs within noninterest income. Net, these reduced EPS by $0.04 (to $4.81 from $4.85 adjusted in the non-GAAP view), and the reported figure is the GAAP number investors should anchor to.
Is the dividend increase sustainable given the lower CET1 ratio?
The board raised the quarterly dividend 30 cents to $2.00 per share, payable August 5, 2026. PNC's stated SCB will stay at the 2.5% regulatory minimum through September 30, 2027, and the CET1 ratio of 9.9% remains well above the regulatory minimum with the company described as well capitalized. Payouts were about $0.7 billion in dividends in the quarter, and the company expects third-quarter buybacks to be similar to second-quarter levels, leaving roughly 29% of the 100 million-share authorization available.
What drove the increase in loans and deposits?
Average loans rose $12.3 billion (4%) sequentially, with commercial loans up $13.0 billion on strong new production and higher utilization, while consumer loans fell $0.7 billion. Average deposits were stable at $457 billion, as higher consumer deposits offset lower brokered time deposits and seasonal declines in commercial balances. Average borrowed funds rose $16.1 billion to $78.9 billion, mainly from higher FHLB advances, which indicates loan growth is being partly funded with wholesale borrowings.
How is PNC's credit quality trending?
Credit trends improved. Net charge-offs fell to $226 million (0.25% annualized) from $253 million, mainly because the prior quarter included $45 million of acquired FirstBank charge-offs. Delinquencies dropped 8% to $1.4 billion and nonperforming loans fell 10% to $2.0 billion, driven by commercial real estate. The allowance for credit losses was $5.5 billion (1.48% of loans), down from 1.52%. Year over year, charge-offs rose 14% and consumer delinquencies increased, so investors should watch consumer credit.
What is the outlook for interest rates and the economy as described in the filing?
PNC's baseline forecast calls for real GDP growth of 2.1% in 2026 and CPI inflation staying above 3% through year-end, with the unemployment rate near 4.3%. The company expects the Federal Reserve to hold the federal funds rate at 3.50% to 3.75% through 2027, but flags risks skewed toward tighter monetary policy because of persistent inflation and energy price pressures. Key downside risks include a sudden reversal in AI-related sentiment and a further sharp rise in oil prices. These are forward-looking management assumptions, not guarantees.

04—Continue

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