PNC PNC Financial Services 10-Q 2026-09-30 section summaries

PNC — Q3 and first nine months of 2026

Consolidated results

Revenue grew 10.9% in Q3 and 15.1% for 9M. Nine-month noninterest income included a $459M Visa share-exchange gain (including $11M in Q3), while securities sales produced a $112M 9M loss versus a $2M loss a year earlier. Q3 noninterest expense included a $140M PNC Foundation contribution; Q3 Other activities also recorded a $139M securities loss from repositioning the AFS portfolio. PNC updated its internal funds-transfer-pricing methodology in Q2 and conformed prior-period segment presentations.

Business segments

Segment profit is net income excluding noncontrolling interests.

*Shown for Retail, C&IB and Other activities because 9M growth trends materially differed from Q3. Other activities includes asset/liability management, securities results, corporate overhead, runoff portfolios, tax adjustments and residual funds-transfer-pricing effects.

Balance sheet, funding and cash flow

The filing separately reports goodwill and mortgage servicing rights; it does not provide a single figure here for all other intangible assets. Federal Home Loan Bank advances rose to $36.512B from $13.000B. PNC’s 9M cash flow from operations was $7.140B versus $3.627B; investing cash outflow was $37.846B versus $13.508B, and financing cash inflow was $21.418B versus $2.501B. Cash, cash equivalents and restricted cash ended at $30.425B, down $9.288B. PNC repurchased $1.984B of treasury stock and paid $2.196B in common dividends during 9M.

Credit, securities and risk

Loans increased with the FirstBank acquisition and other growth. Commercial loans were $276.991B (from $232.463B), including $240.031B of commercial and industrial loans ($202.898B) and $36.960B of commercial real estate loans ($29.565B); consumer loans were $101.801B ($99.018B). Nonperforming loans were $2.194B versus $2.218B, and the NPL ratio improved to 0.58% from 0.67%. Past-due loans declined to $1.301B, or 0.34% of loans, from $1.443B, or 0.44%. Criticized C&I and CRE loans also declined year over year.

Loan-related allowance for credit losses was $5.386B, including $850M for unfunded commitments, compared with $5.2B at year-end. Q3 provision was $141M versus $136M, while net charge-offs were $257M versus $179M; for 9M, provision was $542M versus $567M and net charge-offs were $736M versus $582M. PNC attributed the allowance increase primarily to loan growth, FirstBank loans and updated macroeconomic factors. The $1.4B education-loan portfolio was transferred to held-for-sale in Q3, with $35M of charge-offs on transfer.

At September 30, AFS securities were $67.175B fair value against $71.141B amortized cost; HTM securities were $73.046B fair value against $79.195B amortized cost. The portfolio was 97% AAA/AA, but substantial holdings mature after 10 years. AFS gross unrealized losses were $4.199B, including $3.078B on securities underwater for at least 12 months; PNC did not expect to have to sell them before recovery. HTM unrealized losses on securities transferred from AFS were $2.2B. Accumulated other comprehensive loss widened to $6.472B from $3.408B at year-end, reflecting 9M after-tax OCI losses of $3.064B, principally from debt securities and cash-flow hedges.

Derivative notional was $755.759B. Gross derivative assets and liabilities were $3.737B and $6.587B; after eligible netting and collateral, balance-sheet amounts were $1.390B and $4.225B. Derivatives with credit-risk-contingent features had $3.6B of maximum additional collateral exposure, up from $1.5B at year-end. PNC also reported $29.584B of risk of loss from non-consolidated VIEs, primarily mortgage-backed securitizations and tax-credit investments.

Acquisition and capital

PNC acquired FirstBank on January 5 for $4.300B of consideration: $2.943B common stock, $119M preferred stock and $1.238B cash. The June conversion added about 780,000 customers, over 1,620 employees and 95 branches, expanding PNC in Colorado and Arizona. Preliminary acquired values included $26.656B of assets, $24.714B of liabilities and $2.358B of goodwill; acquired net loans had $15.177B fair value versus $16.170B unpaid principal balance. Integration costs were $36M in Q3 and $261M for 9M. In November, PNC redeemed $525M of Series S preferred depositary shares. Subsequent to quarter-end it redeemed $1.25B of 6.615% notes due 2027 and issued $1.5B of senior notes due 2029.

PNC — Q3 and first nine months of 2026

Consolidated results

Nine-month revenue increased 15%, and net income rose 19%. Q3 revenue was 11% above Q3 2025, while net interest income was up 15% year over year. Sequentially, Q3 revenue declined 5%: higher net interest income and lower expenses were more than offset by weaker noninterest income. The latter included negative $25 million of net Visa activity, compared with positive $363 million in Q2, and lower capital-markets advisory revenue. Q2 also included $139 million of securities losses.

Q3 expenses fell 8% from Q2. Q3 included $27 million of FirstBank integration costs, versus $121 million in Q2; Q2 also included a $140 million PNC Foundation contribution. Nine-month expense growth reflected FirstBank operating costs, higher personnel costs, $245 million of integration expense, and the Foundation contribution. The nine-month effective tax rate was 19.9%, versus 19.4%.

Net interest income, fees, and business drivers

On a taxable-equivalent basis, Q3 net interest income was $4.232 billion, up 15.1% from $3.678 billion in Q3 2025; nine-month NII was $12.356 billion, up 14.8% from $10.765 billion. Margin was 2.94% in Q3 versus 2.79% a year earlier, and 2.95% for 9M versus 2.79%. Sequential margin declined two basis points as lower-yielding loan growth and higher funding costs offset improved asset yields. Average loan yield increased to 5.50% from 5.47% in Q2, while the average cost of interest-bearing liabilities rose to 2.49% from 2.39%. Year-to-date margin benefited from fixed-rate asset repricing.

Nine-month noninterest income growth reflected capital-markets and advisory activity and the Visa exchange-program gain. The exchange generated a $459 million gain; Visa derivative adjustments were negative $153 million versus negative $73 million in 9M 2025. Q3 other income included an $11 million Visa-share valuation gain, versus $448 million in Q2. PNC’s restricted Visa Class B-3 shares had an estimated value of about $0.5 billion, but this was not fair value because of transfer restrictions and lack of observable transactions. Discretionary assets under management reached $250 billion, from $228 billion a year earlier, supported by positive net flows and stronger equity markets.

FirstBank, balance sheet, and funding

PNC acquired FirstBank on January 5, 2026, for $4.2 billion of cash and PNC common stock consideration, plus $0.1 billion of Series B preferred consideration exchanged for newly created PNC Series X preferred stock. In June, approximately 780,000 customers, more than 1,620 employees and 95 Colorado and Arizona branches were converted and merged into PNC Bank. Q3 included a full quarter of FirstBank results; 9M results include operations from the acquisition date.

Loans rose 14%, including commercial loans up 19% to $276.991 billion and consumer loans up 3% to $101.801 billion. Commercial growth reflected new production, higher commitment utilization and FirstBank; consumer balances benefited from acquired residential mortgages, partly offset by auto paydowns and the transfer of $1.4 billion of education loans to held-for-sale. Borrowed funds increased primarily because FHLB advances rose to $36.512 billion from $13.000 billion.

Credit, capital, and liquidity

Credit metrics improved overall: nonperforming assets were $2.325 billion, down from $2.361 billion at year-end, and accruing past-due loans fell to $1.301 billion from $1.443 billion. The total allowance for credit losses, including unfunded commitments, rose to $5.386 billion from $5.228 billion, while coverage declined to 1.42% of loans from 1.58%. Q3 net loan charge-offs were $257 million, or 0.28% of average loans, up $31 million sequentially and including $35 million related to the education-loan transfer. For 9M, net charge-offs increased 26% to $736 million from $582 million, reflecting higher C&I losses, $45 million of FirstBank purchase-accounting-related charge-offs and the education-loan transfer.

Office lending remains a key exposure: $4.8 billion outstanding (1.3% of total loans) plus $0.5 billion of unfunded commitments; 27.9% of office loans were criticized and 10.8% nonperforming, with reserves equal to 9.2% of office loans. PNC cites geographic diversification, though CRE exposure in Colorado increased to $4.678 billion from $746 million.

PNC returned $1.4 billion to shareholders in Q3: $0.8 billion in common dividends and $0.6 billion in repurchases. CET1 was 9.8%, down from 10.6%, primarily due to higher risk-weighted assets, repurchases and dividends. Parent-company available liquidity was $29.6 billion; primary contingent liquidity was $233.0 billion, versus $241.4 billion at year-end. About 46% of deposits were uninsured, though most were commercial operating and relationship accounts. PNC and PNC Bank remained above the 100% regulatory minimum for both LCR and NSFR.

Outlook and risks

For FY 2026, PNC expects revenue growth of approximately 14.5% versus FY 2025, or 13.7% excluding integration costs and significant items; net interest income is expected to rise 15.5%. Noninterest expense is expected to increase 12.3%, or 9.5% excluding those items. Expected total merger and integration costs are about $300 million, with $261 million recognized through 9M and approximately $20 million expected in Q4. For Q4 versus Q3, PNC expects average loans up 2.5%, NII up 4.0%, fee income up 3.5%, expense up 5.0%, and net loan charge-offs of approximately $250 million.

The modeled first-year NII effect of an instantaneous 200-basis-point rate increase shifted to negative 1.3%, from positive 1.8% a year earlier; actual results depend on balance-sheet composition and customer behavior. PNC’s credit-loss outlook assumes steady near-term growth and no U.S. recession, while recognizing elevated recession, geopolitical, energy-price and policy uncertainty. The Federal Reserve’s September 2026 rules change stress-test and SCB timing; PNC remains subject to a 2.5% minimum stress capital buffer until a new requirement takes effect January 1, 2028.

Item 3 provides no separate market-risk figures or analysis. It directs readers to the Risk Management section in Part I, Item 2, and to Notes 1 (Accounting Policies), 12 (Fair Value), and 13 (Financial Derivatives) in Part I, Item 1.

As of September 30, 2026, PNC’s CEO and CFO concluded that its disclosure controls and procedures were effective. No change in internal control over financial reporting during the third quarter of 2026 materially affected, or was reasonably likely to materially affect, those controls.

PNC reported no material changes to the risk factors previously disclosed in its 2025 Form 10-K.

During Q3 2026, none of PNC’s directors or executive officers adopted, terminated, or modified a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. This section reports no financial metrics, business developments, or other material changes.