Inquired about client sentiment given high rates and whether there's a tipping point for growth, especially with the spurt at quarter-end.

Management noted that the outsized loan growth is partly driven by new clients in expansion markets. While intuitively higher rates should slow borrowing, they haven't seen it yet, and pipelines remain strong. They acknowledged that some Q-end spurt might be anticipation of further rate hikes. “Intuitively, higher rates this goes forward is going to crimp CapEx and otherwise slow borrowing, but we're not seeing any instance of that yet, and our pipelines remain strong.”

Asked for a preview of FY27 NII growth, noting peers have given guidance and PNC's strong momentum.

Management stated it's premature for precise FY27 guidance but confirmed NII will exceed the annualized run rate of FY26. They agreed with the consensus range of $1 billion to $1.1 billion above 2026, citing certainty around fixed-rate asset repricing. “When we look at the consensus in terms of where you are, you sort of hit it, that's $1 billion to $1.1 billion above 2026 in terms of growth. And I think we would agree with that range.”

Asked about expected deposit beta dynamics with further Fed tightening and the impact of AI on deposit movement.

Management expects typical rising rate betas, settling in the mid-50s for cumulative beta. They noted that the prior cycle's noninterest-bearing to interest-bearing migration is largely complete. On AI, they acknowledged that deposit movement will become more efficient but expressed concerns about the safety of current "agentic applications" that transact without human oversight, emphasizing the need for secure connections and authentication. “It's incredibly dangerous thing, independent of the fact that I run I would just applies everybody that that's probably bad.”

PNC

PNC (PNC) Q3 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2026 (Q3 FY26)· Financials· Oct 15, 2026

Source: earnings call transcript

Executive summary

PNC Q3 FY26 — Strong Loan Growth and Client Momentum Drive Earnings Beat

PNC delivered a strong Q3 FY26, exceeding expectations with robust organic loan growth and significant client momentum across all business segments, particularly in expansion markets. While net interest margin saw a slight compression due to loan mix and funding costs, the bank remains confident in its NII trajectory, supported by fixed-rate asset repricing and disciplined expense management. The company is also strategically focused on internal AI transformation over large-scale M&A.

Highlights

Generated $2.1 billion of net income or $5.09 per diluted share as adjusted.
Delivered a return on tangible common equity of more than 18%.
Average loans grew $9 billion or 2% QoQ to $372 billion, with $30 billion of organic growth year-to-date.
Added 215,000 net new checking accounts year-to-date, with 6% growth in Southwest markets.
Capital markets fees are up 40% year-to-date, reflecting strong client activity.

Concerns

Tangible book value was down 3% linked quarter to $108 per common share, entirely driven by the decline in AOCI.
Total noninterest income decreased $137 million or 6% QoQ.
Net interest margin decreased 2 basis points to 2.94%, largely due to loan mix and increased funding costs.
Nonperforming loans increased $167 million or 8% to $2.2 billion, driven by previously reserved CRE office loans and one large commercial credit.

Guidance & targets

Category	Target	Timeline	Confidence
Q4 FY26 Share Repurchases	approximate $560 million medium materiality	Q4 · FY26	High
Q4 FY26 Average Loans Growth	up approximately 2.5% medium materiality	Q4 · FY26	High
Q4 FY26 Net Interest Income Growth	up approximately 4% high materiality	Q4 · FY26	High
Q4 FY26 Fee Income Growth	up approximately 3.5% medium materiality	Q4 · FY26	High
Q4 FY26 Other Noninterest Income	approximately $250 million low materiality	Q4 · FY26	High
Q4 FY26 Adjusted Noninterest Expense Growth	increase approximately 5% medium materiality	Q4 · FY26	High
Q4 FY26 Net Charge-offs	approximately $250 million medium materiality	Q4 · FY26	High
Full Year FY26 Average Loan Growth	approximately 13.5% high materiality	FY26	High
Full Year FY26 Net Interest Income Growth	up 15.5% high materiality	FY26	High
Full Year FY26 Noninterest Income Growth	up approximately 10.5% high materiality	FY26	High
Full Year FY26 Total Revenue Growth	up approximately 13.7% high materiality	FY26	High
Full Year FY26 Noninterest Expense Growth	up approximately 9.5% high materiality	FY26	High
Full Year FY26 Effective Tax Rate	approximately 19.5% medium materiality	FY26	High
Q4 FY26 Net Interest Margin	reach 3% or above high materiality	Q4 · FY26	High
FY27 Net Interest Income Growth	$1 billion to $1.1 billion above 2026 high materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Corporate and Institutional Banking (C&IB) National platform continues to generate impressive growth, with expansion markets contributing materially to loan growth and new client relationships. New client relationships: 500 year-to-dateCapital markets fees: up 40% year-to-dateTreasury management revenue: up 8%	—	17%	—	—
Retail Banking Continued organic client growth and deepening relationships, supported by new mobile app, total rewards program, and branch expansion. Net new checking accounts: 215,000 year-to-dateTotal accounts: up 2% year-over-yearSouthwest markets account growth: 6%Credit card balances: up 12%Brokerage assets: up 9% year-over-year	—	—	—	—
Asset Management Favorable equity markets and accelerated growth in expansion markets, albeit off a smaller base, are driving fee income. Assets under administration: $0.5 trillionAUM growth in expansion markets: 5x faster than legacy markets	—	10%	—	—

PNC operating KPIs by quarter

PNC operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2026 Q2 FY26	This call Sep 2026 Q3 FY26	Change vs prior quarter
Common equity tier 1 ratio (CET1)	10.5% We remain well capitalized with an estimated CET1 ratio of 10.5% as of December 31. Source: earnings call transcript	10.6% We remain well capitalized with an estimated CET1 ratio of 10.6% as of March 31. Source: earnings call transcript	9.9% And we remain well capitalized with an estimated CET1 ratio of 9.9%. Source: earnings call transcript	9.8% We remain well capitalized with an estimated CET1 ratio of 9.8%. Source: earnings call transcript	-0.1 pt
Net interest margin	2.75% Net interest income grew by $113 million or 3%, and our net interest margin was 2.75%, an increase of 11 basis points. Source: earnings call transcript	2.78% And our net interest margin was 2.78%, an increase of 3 basis points. Source: earnings call transcript	2.96% Our net interest margin was 2.96%, an increase of 1 basis point. Source: earnings call transcript	2.94% Our net interest margin was 2.94% and decreased 2 basis points. Source: earnings call transcript	0 pt
Return on tangible common equity (ROTCE)	—	—	17.9% Our tangible book value was $111 per common share, up 2% linked-quarter and up 7% compared with the same period a year ago, and our return on tangible common equity at 17.9% in the second quarter. Source: earnings call transcript	18%+ And our return on tangible common equity was more than 18% in the third quarter. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
New mobile app and total rewards program	launch	—

Deals & partnerships

First Bank Successful conversion of the acquired bank, contributing to loan growth.

The acquisition contributed to the strong loan growth experienced throughout the year.

Risks & headwinds

Decline in Accumulated Other Comprehensive Income (AOCI) Q3 FY26

Tangible book value down 3% linked quarter to $108 per common share.

Mitigation:Company remains well capitalized with an estimated CET1 ratio of 9.8%. Basel III rules are expected to increase capital ratings by about a point, including AOCI.

Net interest margin compression Q3 FY26

NIM decreased 2 basis points to 2.94%.

Mitigation:Expected to reach 3% or above in Q4 FY26, driven by loan yield increases, deposit cost offsets, and fixed-rate securities runoff.

Increase in nonperforming loans (NPLs) Q3 FY26

NPLs increased $167 million or 8% to $2.2 billion.

Mitigation:Primarily driven by the pull-through of previously reserved CRE office loans and one large commercial credit (service provider industry), which are already provisioned for. Credit quality remained strong overall.

Potential for AI-driven deposit movement to increase funding costs Over time

Deposit movement is going to become more efficient.

Mitigation:PNC aims to offer clients technology as good as third-party providers and produce it cheaply to maintain business. Management also expressed concerns about the safety of current 'agentic applications' that transact without human oversight, emphasizing the need for secure connections and authentication.

What to watch in Q4 FY26

Net Interest Margin (NIM)

Q4 FY26

Current 2.94%

Target 3% or above

Why it matters

NIM trajectory is a key driver of profitability for banks, and management has provided a specific target for the next quarter.

Importantly, the underlying drivers of NII growth remained strong, and based on our expectations for loan growth, we calculate that our net interest margin will reach 3% or above in the fourth quarter.

Find out whether PNC delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked about confidence in Q4 NIM target given deposit cost increases and lower-spread loan growth, and the trade-off with fee income.

Management explained that 50% of loan growth occurred in the last two weeks, impacting Q3 NII. Spreads on average declined due to high-yielding loans paying down and new production in higher-quality, lower-spread loans. They reiterated confidence in Q4 NIM reaching 3% or higher due to loan yield increases, deposit cost offsets, and securities runoff. They emphasized that lower-spread loans drive capital market fees, making them accretive to overall earnings and ROTCE when viewed holistically.

“If you just look at NII and NIM in isolation, you're not seeing the whole transaction.”

asked by John Pancari · answered by William Demchak / Robert Reilly

2 min read 6 chapters

Detailed narrative

Client Momentum and Expansion Markets

PNC is experiencing significant client momentum, particularly in its expansion markets, which are driving growth across Corporate and Institutional Banking (C&IB) and Retail Banking. C&IB added approximately 500 new client relationships year-to-date, contributing to 17% YoY loan growth. Retail Banking added 215,000 net new checking accounts, with 6% growth in Southwest markets.

Asset management AUM is growing 5x faster in expansion markets, albeit off a smaller base.

Loan Growth Dynamics

Average loans increased $9 billion (2%) QoQ to $372 billion, with spot loans growing $11 billion. Year-to-date, loans grew $47 billion (14%), with over $30 billion being organic growth, substantially exceeding initial expectations. This growth was concentrated in high credit quality, lower spread loans, which, while constraining NIM, generate attractive overall economics through fee income and broader client engagement.

Net Interest Income and Margin

Net Interest Income (NII) increased $100 million (2%) to $4.2 billion, driven by commercial loan growth and higher asset yields, partially offset by increased funding costs. Net Interest Margin (NIM) decreased 2 basis points to 2.94% due to the mix of loan growth and increased funding costs.

Management expects NIM to reach 3% or above in Q4 FY26, supported by fixed-rate securities runoff and continued loan yield increases.

Expense Management and Efficiency

Noninterest expense decreased $347 million (8%) QoQ to $3.8 billion. Excluding integration costs, expenses decreased $113 million (3%). The company is on track to achieve $350 million in cost reductions for FY26 through its continuous improvement program, which funds business and technology investments and is independent of the First Bank acquisition.

Credit Quality

Credit quality remained strong overall. Nonperforming loans increased $167 million (8%) to $2.2 billion, primarily due to previously reserved CRE office loans and one large commercial credit in the service provider industry. Total delinquencies declined $135 million to 0.34% of total loans.

Net charge-offs were $257 million (28 bps of average loans), with $35 million related to a student loan portfolio transfer, which is expected to have a de minimis financial impact.

AI and Digital Transformation Strategy

PNC has been strategically investing in its core infrastructure for AI, including putting GPU chips in its data centers and digitizing policies and procedures. The focus is on a 'fundamental transformation' of the company using AI harnesses to speed development, lower technology costs, and aid revenue generation, rather than just 'bells and whistles.' Management believes this internal transformation is strategically more important than large M&A at this time, aiming to lead the industry in an evolving world.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.