PNC Reports Second Quarter 2026 Net Income of $2.1 Billion, $4.81 Diluted EPS or $4.85 as Adjusted

The PNC Financial Services Group, Inc. (NYSE: PNC) today reported: For the quarter In millions, except per share data and as noted 2Q26 1Q26 2Q25 Second Quarter Highlights Financial Results Comparisons reflect 2Q26 vs. 1Q26 Net interest income (NII) $ 4,107 $ 3,961 $ 3,555 Income Statement Adjusted EPS was $4.85 which excludes the net impact of FirstBank integration costs and 2Q26significant items, resulting in a 4 cent reduction to EPS Generated 3% positive operating leverage; PPNR increased 16%; ROTCE of 17.9% NII increased 4%; NIM of 2.96% increased 1 bp Fee income increased 10%, driven by strong capital markets activity Noninterest expense of $4.1 billion included $140 million of PNC Foundation contribution expense, $121 million of integration expenses and the impact of increased business activity Balance Sheet Average loans increased $12.3 billion, or 4% Average deposits were stable Average noninterest-bearing deposits grew 4% Rate paid on interest-bearing deposits declined 5 basis points Net loan charge-offs were $226 million, or 0.25% annualized to average loans Maintained strong capital position CET1 capital ratio of 9.9% Returned $1.3 billion to shareholders, including $0.6 billion of share repurchases Increased quarterly common stock dividend 30 cents, or 18% to $2.00 per share Converted FirstBank customers, employees, systems and branches as of June 22, 2026 Fee income (non-GAAP) 2,279 2,079 1,894 Other noninterest income 489 125 212 Noninterest income 2,768 2,204 2,106 Revenue 6,875 6,165 5,661 Noninterest expense 4,098 3,768 3,383 Pretax, pre-provision earnings (PPNR) (non-GAAP) 2,777 2,397 2,278 Provision for credit losses 191 210 254 Net income 2,055 1,772 1,643 Per Common Share Diluted earnings per share (EPS) $ 4.81 $ 4.13 $ 3.85 EPS impact of integration costs and 2Q26 significant items 0.04 0.19 — Diluted EPS - as adjusted (non-GAAP) 4.85 4.32 3.85 Average diluted common shares outstanding 403 405 397 Book value 145.52 143.65 131.61 Tangible book value (TBV) (non-GAAP) 111.09 109.42 103.96 Balance Sheet & Credit Quality Average loans In billions $ 363.2 $ 350.9 $ 322.8 Noninterest-bearing deposits In billions 103.5 99.1 93.1 Interest-bearing deposits In billions 353.5 359.3 329.8 Average deposits In billions 457.0 458.4 423.0 Accumulated other comprehensive income (loss) (AOCI) In billions (4.1) (3.8) (4.7) Net loan charge-offs 226 253 198 Allowance for credit losses to total loans 1.48 % 1.52 % 1.62 % Selected Ratios Return on average common shareholders' equity 13.61 % 11.92 % 12.20 % Return on avg. tangible common equity (ROTCE) (non-GAAP) 17.88 15.66 15.55 Return on average assets 1.34 1.19 1.17 Net interest margin (NIM) (non-GAAP) 2.96 2.95 2.80 Noninterest income to total revenue 40 36 37 Efficiency 60 61 60 Common equity tier 1 (CET1) capital ratio 9.9 10.1 10.5 See non-GAAP financial measures in the Consolidated Financial Highlights accompanying this release. Totals may not sum due to rounding. 1Q26 Diluted EPS - as adjusted, excludes $98 million of integration costs related to the FirstBank acquisition. From Bill Demchak, PNC Chairman and Chief Executive Officer:"Our strong second quarter performance reflects the disciplined execution of our growth strategy and positions us well for the second half of the year. We remain focused on delivering results that support our customers, shareholders and communities. Our successful FirstBank conversion, strong capital position and announced dividend increase provide further evidence of the strength and resilience of our franchise."Acquisition of FirstBankAs of June 22, 2026, PNC has converted approximately 780,000 customers, more than 1,620 employees and 95 branches across Colorado and Arizona, merging FirstBank into PNC Bank. Second quarter of 2026 results include the full quarter benefit of FirstBank. First quarter of 2026 results include FirstBank operations since acquisition close on January 5, 2026.Integration Costs and 2Q26 Significant ItemsIn the second quarter of 2026, PNC incurred integration costs related to the FirstBank acquisition of $127 million. Results for the quarter also reflected the impact of several significant items. PNC participated in the Visa exchange program monetizing 50% of its Visa Class B-2 shares resulting in a gain of $448 million and converting its remaining holdings into 0.9 million of Visa Class B-3 shares. This gain was substantially offset by a $140 million PNC Foundation contribution expense, a $139 million securities loss related to the repositioning of approximately $4 billion of available-for-sale investment securities into higher yielding instruments, and negative $85 million of Visa Class B-3 derivative fair value adjustments, driven by the extension of anticipated litigation resolution timing. The combined impact of both integration costs and 2Q26 significant items resulted in a $15 million decline in net income, or a 4 cent reduction to EPS. Impact of Integration Costs and 2Q26 Significant Items In millions 2Q26 Integration Costs and Significant Items Noninterest Income Integration Costs Significant Items Net Impact Gain on exchange of Visa Class B-2 shares $ 448 $ 448 Visa Class B-3 derivative fair value adjustments (85) (85) Loss on sale of securities (139) (139) Integration costs $ (6) (6) Noninterest income impact of integration costs and 2Q26 significant items $ (6) $ 224 $ 218 Noninterest Expense Contribution to PNC Foundation $ 140 $ 140 Integration costs $ 121 121 Noninterest expense impact of integration costs and 2Q26 significant item $ 121 $ 140 $ 261 Net Income and EPS Pretax, pre-provision impact $ (127) $ 84 $ (43) Income taxes (benefit) (26) (2) (28) Net Income decrease from integration costs and 2Q26 significant items $ (101) $ 86 $ (15) EPS impact of integration costs and 2Q26 significant items $ (0.25) $ 0.21 $ (0.04) Income taxes on integration costs and 2Q26 significant items are calculated at a statutory tax rate of 21% on pretax, pre-provision earnings. Significant items tax impact also includes the benefit of shares donated to the PNC Foundation. Income Statement HighlightsSecond quarter 2026 compared with first quarter 2026Total revenue of $6.9 billion increased $710 million, or 12%, driven by growth in both noninterest income and net interest income. Net interest income of $4.1 billion increased $146 million, or 4%, and included the benefit of commercial loan growth and higher noninterest-bearing deposit balances. Net interest margin increased 1 basis point to 2.96%. Fee income of $2.3 billion increased $200 million, or 10%, driven by growth across all fee categories, including record capital markets and advisory revenue. Other noninterest income of $489 million included both integration costs and 2Q26 significant items totaling $218 million as well as positive valuation adjustments of private equity investments. Noninterest expense of $4.1 billion increased $330 million, or 9%, and included $261 million of both integration expenses and 2Q26 significant items, compared to $97 million of integration expenses in the first quarter. Excluding these items from each quarter, noninterest expense was $3.8 billion, increasing $166 million, or 5%, primarily due to increased business activity. Provision for credit losses was $191 million in the second quarter and reflected portfolio activity as well as updates to macroeconomic factors. The effective tax rate was 20.5% for the second quarter and 19.0% for the first quarter.Balance Sheet HighlightsSecond quarter 2026 compared with first quarter 2026 or June 30, 2026 compared with March 31, 2026Average loans of $363.2 billion increased $12.3 billion, or 4%. Average commercial loans increased $13.0 billion, or 5%, driven by strong new production and increased utilization. Average consumer loans decreased $0.7 billion, or 1%, due to declines in both residential mortgage and auto loans, partially offset by growth in credit card loans. Loans at June 30, 2026 of $368.0 billion increased $7.0 billion, or 2%, from March 31, 2026 and included commercial loan growth, reflecting strong new production. Credit quality performance: Delinquencies of $1.4 billion decreased $122 million, or 8%, due to lower commercial loan delinquencies. Total nonperforming loans of $2.0 billion decreased $216 million, or 10%, driven by lower commercial real estate nonperforming loans. Net loan charge-offs of $226 million decreased $27 million primarily due to FirstBank acquired net loan charge-offs of $45 million recognized in the first quarter. The allowance for credit losses of $5.5 billion was stable. The allowance for credit losses to total loans was 1.48% at June 30, 2026 and 1.52% at March 31, 2026. Average investment securities of $147.1 billion increased $2.6 billion, or 2%, reflecting higher residential mortgage-backed securities. Average deposits of $457.0 billion were stable. The rate paid on interest-bearing deposits of 1.91%, declined 5 basis points. PNC maintained a strong capital and liquidity position: On July 6, 2026, the PNC board of directors raised the quarterly cash dividend on common stock to $2.00 per share, an increase of 30 cents, or 18%. The dividend is payable on August 5, 2026 to shareholders of record at the close of business July 20, 2026. PNC returned $1.3 billion of capital to shareholders, reflecting $0.7 billion of dividends on common shares and $0.6 billion of common share repurchases. Share repurchase activity in the third quarter of 2026 is expected to approximate second quarter of 2026 share repurchase levels. The Basel III common equity tier 1 capital ratio was an estimated 9.9% at June 30, 2026 and was 10.1% at March 31, 2026. PNC's average LCR for the three months ended June 30, 2026 was 106%, exceeding the regulatory minimum requirement throughout the quarter. Read More

PNC Reports Second Quarter 2026 Net Income of $2.1 Billion, $4.81 Diluted EPS or $4.85 as Adjusted

Autres actualités de l'entreprise