PNC Targets A 3.0% Or Higher Net Interest Margin In The Fourth Quarter And Lifts 2026 Loan Outlook To About 13.5%
PNC's third-quarter slides show a 57% efficiency ratio and raised full-year ranges for loans, revenue and expenses.
PNC told investors it expects a net interest margin of 3.0% or above in the fourth quarter, up from 2.94% in the third. The target sits in the earnings slides the bank furnished in an 8-K on Thursday, alongside a higher 2026 outlook for loans, revenue and expenses.
The finding: a margin target and a higher full-year outlook
For the fourth quarter, PNC guided net interest income up about 4.0% from the third quarter's $4,206 million. It guided average loans up about 2.5% from $372.2 billion. The slides say these figures support the 3.0% or higher margin expectation.
For 2026, PNC now sees average loans up about 13.5%, against about 12.5% in its previous guidance. Noninterest expense, excluding integration costs and significant items, is now up about 9.5%, versus about 8.5% before.
Other ranges moved too. Total revenue is now guided up about 13.7%, from about 13%. Noninterest income is up about 10.5%, from about 9%. Net interest income is up about 15.5%, versus a prior 15% to 15.5%. The effective tax rate stays at about 19.5%. The earlier ranges were set in the July deck.
The quarter itself: net income was $2,097 million and diluted earnings per share $4.97, or $5.09 adjusted. The efficiency ratio was 57%, against 60% in the second quarter. Return on average tangible common equity, a non-GAAP measure, was 18.28%. Noninterest expense fell 8% from the second quarter while total revenue fell 5%, which the bank described as positive operating leverage.
The catch: comparisons are distorted and credit costs ticked up
The second quarter carried a $139 million securities loss and a $140 million PNC Foundation contribution, which flatter the third-quarter comparison on expenses. Noninterest income fell 15% from the second quarter, and capital markets and advisory fees fell 25%.
Net charge-offs rose to $257 million, or $222 million excluding $35 million tied to a student loan transfer, from $226 million in the second quarter. The company guides about $250 million for the fourth quarter. The allowance for credit losses fell to 1.42% of loans from 1.48%.
Capital moved the other way: the CET1 ratio was 9.8%, down from 9.9% in June, and tangible book value per share fell to $107.64 from $111.09. The bank returned $1.4 billion to shareholders, including $0.8 billion of dividends and $0.6 billion of buybacks.
Who it touches: holders and the rate assumption
The net interest outlook leans on balance-sheet repricing. The slides project 33% of the securities and receive-fixed swap portfolio to run off through 2028. About $5 billion of fixed-rate securities, yielding 2.65%, runs off in the fourth quarter.
PNC's baseline forecast assumes the Federal Reserve raises rates twice more, at its December 2026 and March 2027 meetings, to a range of 4.25% to 4.50%. It expects real GDP growth above 2% in 2026.
PNC shares closed at $214.94 on Thursday, down 0.4% on the session. Yahoo Finance headlined its coverage that third-quarter lending revenue missed estimates while costs beat.
The fourth-quarter report will show whether PNC reaches the 3.0% margin it put in writing on Thursday.
Sources
- 8-K Filing — PNC FINANCIAL SERVICES GROUP, INC. (PNC) — SEC EDGAR
- Exhibit a3q26earningsslides_vfx2.htm — PNC FINANCIAL SERVICES GROUP, INC. 8-K exhibit — SEC EDGAR
- PNC Third-Quarter Lending Revenue Misses Estimates as Costs Beat — Yahoo Finance
- 8-K filed 2026-07-15 — PNC FINANCIAL SERVICES GROUP, INC. (earlier disclosure) — SEC EDGAR
