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# PNC's Efficiency Ratio Improves To 57% From 60% As Expenses Fall 8% And Loans Grow
- URL: https://www.bullished.co/pncs-efficiency-ratio-improves-to-57-from-60-as-expenses-fall-8-and-loans-grow-844110b3/
- Published: 2026-10-15T11:06:48.000Z
- Updated: 2026-10-28T21:22:29.000Z
- Description: Net income rose to $2.1 billion in the third quarter even as noninterest income fell 15% from the second quarter.
- Author: Matteo Parrino
- Tags: Earnings, PNC, Industry: Financials

[PNC](https://www.bullished.co/tag/pnc/)'s third-quarter net income was [$2.1 billion, or $4.97 per diluted share](https://www.sec.gov/Archives/edgar/data/0000713676/000162828026065936/q32026financialhighlightsa.htm?ref=bullished.co), against $2,055 million and $4.81 in the second quarter, according to an [8-K](https://www.bullished.co/learn/8-k-items-explained/) filed Thursday. Excluding integration costs and significant items, earnings were $5.09 a share, up $0.24 from the prior quarter.

Profit rose even though revenue fell: noninterest expense dropped 8% and net interest income grew, which more than covered a smaller quarter for fees.

## The finding: lower costs, bigger loan book

Net interest income, the gap between what the bank earns on loans and pays on deposits, rose 2% from the second quarter to [$4.2 billion](https://finance.yahoo.com/markets/stocks/articles/lower-expenses-higher-nii-support-115400713.html?ref=bullished.co), up $99 million. The company credited commercial loan growth and higher yields, partly offset by higher funding costs. Net interest margin was 2.94%, down from 2.96%.

Noninterest expense fell 8% to $3.8 billion, or 3% excluding integration costs and significant items. PNC attributed the adjusted decline to lower compensation and expense discipline. The efficiency ratio improved to 57% from 60% in the second quarter.

Average loans rose $9.0 billion, or 2%, to $372.2 billion. Average commercial loans grew $10.4 billion, or 4%, on new production and higher utilization, while average consumer loans fell $1.4 billion. Return on average tangible common equity, a measure of profit against shareholder capital stripped of intangibles, was 18.3%, up from 17.9%.

## The catch: fees, Visa items and charge-offs

Revenue of $6.6 billion fell $313 million, or 5%, as noninterest income dropped 15%. Fee income fell 6% to $2.1 billion, mainly because second-quarter capital markets and advisory revenue was elevated; that line fell $144 million.

The second quarter also carried a $448 million gain tied to a Visa share exchange. Integration costs from the FirstBank acquisition were $36 million, down from $127 million.

Net loan charge-offs were $257 million, up from $226 million, and included $35 million from moving a $1.4 billion student loan portfolio to held-for-sale. The provision for credit losses was $189 million, stable against $191 million. Nonperforming loans rose 8% to $2.2 billion on commercial loans, while delinquencies fell 9% to $1.3 billion.

## Capital and what to watch

The common equity tier 1 capital ratio was an estimated 9.8%, versus 9.9% at June 30\. PNC returned $1.4 billion to shareholders: $0.8 billion of dividends and $0.6 billion of buybacks. It expects fourth-quarter repurchases to approximate third-quarter levels.

The board declared a $2.00 quarterly dividend, payable November 5 to holders of record on October 14\. Executives hold an investor call at 10:00 a.m. Eastern Thursday.

CEO Bill Demchak said PNC is "well positioned, and remain confident in our long-term outlook."

Learn

- [Item 2.02: results of operations →](https://www.bullished.co/learn/8-k-items-explained/#item-202-results-of-operations)  
From 8-K Items Explained: What Every Item Code From 1.01 To 9.01 Tells You, With Examples

### Sources

- [8-K Filing — PNC FINANCIAL SERVICES GROUP, INC. (PNC)](https://www.sec.gov/Archives/edgar/data/0000713676/000162828026065936/pnc-20261015.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit q32026financialhighlightsa.htm — PNC FINANCIAL SERVICES GROUP, INC. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0000713676/000162828026065936/q32026financialhighlightsa.htm?ref=bullished.co) — SEC EDGAR
- [Exhibit q32026financialsupplement.htm — PNC FINANCIAL SERVICES GROUP, INC. 8-K exhibit](https://www.sec.gov/Archives/edgar/data/0000713676/000162828026065936/q32026financialsupplement.htm?ref=bullished.co) — SEC EDGAR
- [Lower Expenses & Higher NII to Support PNC Financial's Q3 Earnings](https://finance.yahoo.com/markets/stocks/articles/lower-expenses-higher-nii-support-115400713.html?ref=bullished.co) — Yahoo Finance

### More on PNC Financial Services

- [PNC Targets A 3.0% Or Higher Net Interest Margin In The Fourth Quarter And Lifts 2026 Loan Outlook To About 13.5%](https://www.bullished.co/pnc-targets-a-3-0-or-higher-net-interest-margin-in-the-fourth-quarter-and-lifts-2026-loan-df359214/)
- [PNC's Demchak Says A Big Deal Could 'Destroy Massive Value' By Slowing Its AI Build](https://www.bullished.co/pncs-demchak-says-a-big-deal-could-destroy-massive-value-by-slowing-its-ai-build-9bc642fa/)

[All PNC Financial Services (PNC) coverage →](https://www.bullished.co/tag/pnc/)