Why did PNC's reported revenue decline sequentially despite net interest income growth?

Total revenue fell $313 million (5%) to $6.6 billion because noninterest income dropped 15%. The second quarter included a $448 million gain from the Visa share exchange and elevated capital markets and advisory revenue ($577 million), neither of which recurred at the same level in the third quarter. Net interest income rose $99 million (2%) on commercial loan growth and higher asset yields, partially offsetting that decline.

Are the third-quarter adjusted earnings figures meaningful for comparison?

The adjusted figures exclude $36 million of integration costs tied to the FirstBank acquisition and net significant items of negative $25 million, mainly Visa Class B-3 derivative fair value adjustments. Together these reduced EPS by $0.12 in the quarter. Management uses these measures to show operating trends, but they are non-GAAP, and investors should weigh them alongside reported GAAP results of $4.97 per diluted share.

How concerning is the rise in nonperforming loans and charge-offs?

Nonperforming loans increased 8% to $2.2 billion, and net charge-offs rose to $257 million, though $35 million of the charge-offs came from the one-time student loan transfer. The increases were driven by commercial loans, and the allowance for credit losses covered 1.42% of total loans, down from 1.48%. Provision expense was steady at $189 million. Monitoring commercial credit in future quarters will show whether this is a trend or a one-time shift.

What is the outlook for PNC's capital position and shareholder returns?

PNC returned $1.4 billion in the quarter ($0.8 billion in dividends and $0.6 billion in buybacks) and expects fourth-quarter repurchases to approximate third-quarter levels, subject to market conditions. The CET1 ratio was an estimated 9.8%, and the stress capital buffer is held at the 2.5% regulatory minimum through December 31, 2027. Roughly 27% of the 100 million-share repurchase authorization remained available at quarter-end. The main capital risk is AOCI, which reached negative $6.5 billion as interest rates rose.

What macroeconomic assumptions underlie PNC's forward-looking statements?

PNC's baseline forecast assumes real GDP growth above 2% in 2026, steady unemployment, and core inflation staying above 3% through year-end. It also assumes the Federal Reserve raises rates twice more, at the December 2026 and March 2027 meetings, bringing the federal funds rate to 4.25%–4.50%. Key risks include a reversal in AI-related sentiment and a further sharp rise in bond yields, which would increase unrealized securities losses and weigh on capital.

PNC 8-K: Earnings & Results

01—Abstract

Summary

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

PNC Financial Services Group reported third quarter 2026 net income of $2.1 billion^a, or $4.97 diluted EPS ($5.09 as adjusted for integration costs and significant items), up from $4.35 in 3Q25.

Revenue of $6.6 billion^b fell 5% sequentially because elevated 2Q26 capital markets activity and Visa-related gains did not recur, though revenue rose 11% year over year. Net interest income grew 2% sequentially to $4.2 billion, and net interest margin was 2.94%. Return on average tangible common equity was 18.3%, and the efficiency ratio improved to 57% from 60%.

Adjusted noninterest expense fell 3% sequentially, with the FirstBank integration contributing to the year-over-year increase. Balance sheet growth was broad-based, led by commercial loans. Average loans rose 2% sequentially to $372.2 billion^c, and period-end deposits increased 4% to $466.4 billion.

Credit quality showed modest pressure: net charge-offs rose to $257 million^d (including $35 million tied to the transfer of a $1.4 billion student loan portfolio to held-for-sale), and nonperforming loans rose 8% to $2.2 billion, driven by commercial loans. The allowance for credit losses fell to 1.42% of total loans from 1.48%. Capital remained solid, with a CET1 ratio of 9.8% (estimated), but it declined from 9.9% as AOCI worsened to negative $6.5 billion.

PNC returned $1.4 billion to shareholders and declared a $2.00 quarterly dividend, and management expects fourth-quarter buybacks to approximate third-quarter levels. The company's outlook assumes two more Federal Reserve rate hikes, which PNC expects would bring the federal funds rate to 4.25%–4.50%. Investors should watch the rising AOCI drag on tangible book value, which fell to $107.64 from $111.09 in the prior quarter, along with commercial credit trends and the durability of fee income after the strong second quarter.

02—Key points

Key Highlights

Third-quarter 2026 net income of $2.1 billion; diluted EPS of $4.97 ($5.09 adjusted), versus $4.35 a year earlier
Return on average tangible common equity of 18.3%, up from 17.9% in 2Q26 and 16.8% in 3Q25
Average loans grew 2% sequentially to $372.2 billion, driven by commercial loans (up 4%), and period-end deposits rose 4% to $466.4 billion
Fee income fell 6% sequentially to $2.1 billion as 2Q26 capital markets activity normalized, though it rose 4% year over year
Net charge-offs increased to $257 million, including $35 million from the student loan portfolio transfer; nonperforming loans rose 8% to $2.2 billion
CET1 ratio of 9.8% (estimated) versus 9.9% in 2Q26; AOCI deteriorated to negative $6.5 billion, pressuring tangible book value to $107.64 per share
Quarterly dividend of $2.00 per share declared, with fourth-quarter buybacks expected to match third-quarter levels

03—Questions

Frequently Asked Questions

Why did PNC's reported revenue decline sequentially despite net interest income growth?
Total revenue fell $313 million (5%) to $6.6 billion because noninterest income dropped 15%. The second quarter included a $448 million gain from the Visa share exchange and elevated capital markets and advisory revenue ($577 million), neither of which recurred at the same level in the third quarter. Net interest income rose $99 million (2%) on commercial loan growth and higher asset yields, partially offsetting that decline.
Are the third-quarter adjusted earnings figures meaningful for comparison?
The adjusted figures exclude $36 million of integration costs tied to the FirstBank acquisition and net significant items of negative $25 million, mainly Visa Class B-3 derivative fair value adjustments. Together these reduced EPS by $0.12 in the quarter. Management uses these measures to show operating trends, but they are non-GAAP, and investors should weigh them alongside reported GAAP results of $4.97 per diluted share.
How concerning is the rise in nonperforming loans and charge-offs?
Nonperforming loans increased 8% to $2.2 billion, and net charge-offs rose to $257 million, though $35 million of the charge-offs came from the one-time student loan transfer. The increases were driven by commercial loans, and the allowance for credit losses covered 1.42% of total loans, down from 1.48%. Provision expense was steady at $189 million. Monitoring commercial credit in future quarters will show whether this is a trend or a one-time shift.
What is the outlook for PNC's capital position and shareholder returns?
PNC returned $1.4 billion in the quarter ($0.8 billion in dividends and $0.6 billion in buybacks) and expects fourth-quarter repurchases to approximate third-quarter levels, subject to market conditions. The CET1 ratio was an estimated 9.8%, and the stress capital buffer is held at the 2.5% regulatory minimum through December 31, 2027. Roughly 27% of the 100 million-share repurchase authorization remained available at quarter-end. The main capital risk is AOCI, which reached negative $6.5 billion as interest rates rose.
What macroeconomic assumptions underlie PNC's forward-looking statements?
PNC's baseline forecast assumes real GDP growth above 2% in 2026, steady unemployment, and core inflation staying above 3% through year-end. It also assumes the Federal Reserve raises rates twice more, at the December 2026 and March 2027 meetings, bringing the federal funds rate to 4.25%–4.50%. Key risks include a reversal in AI-related sentiment and a further sharp rise in bond yields, which would increase unrealized securities losses and weigh on capital.

04—Continue

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