PNC Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Income: $1.8 billion, or $4.13 per common share; adjusted for integration costs, $4.32.

Total Revenue: $6.2 billion, up 2% from the previous quarter.

Net Interest Income: $4.0 billion, increased by 6% due to the FirstBank acquisition and lower funding costs.

Net Interest Margin: Expanded to 2.95%, up 11 basis points.

Loan Growth: Average loans of $351 billion, up 7% linked quarter and 11% year-over-year.

Deposit Balances: Average deposits of $458 billion, up 4% linked quarter.

Tangible Book Value: $109.42 per share, down 3% linked quarter but up 9% year-over-year.

CET1 Ratio: Estimated at 10.1%, down 50 basis points from year-end 2025, primarily due to the FirstBank acquisition.

2Strategic Updates and Business Highlights

Acquisition of FirstBank: Successfully completed early in the quarter, with a planned conversion in mid-June.

Technology and Branch Investments: Continued investments in technology and branch network to enhance customer experience and operational efficiency.

Fee Income Growth: Achieved 13% year-over-year growth in fee income, driven by various business segments.

Credit Quality: Strong credit metrics with improved nonperforming loans (NPL) and delinquency ratios.

3Forward Guidance and Outlook

Q2 2026 Expectations:

Average loans expected to grow 2-3%.

Net interest income projected to increase by approximately 3%.

Total revenue anticipated to rise by about 3.5%.

Noninterest expense (excluding integration costs) expected to increase by around 2%.

Full-Year 2026 Outlook:

Average loan growth projected at 11%.

Net interest income anticipated to grow by 14.5%.

Total revenue expected to increase by 11%.

Noninterest expense (excluding integration costs) forecasted to rise by 7%.

4Bad News, Challenges, or Points of Concern

Integration Costs: Anticipated integration expenses of approximately $325 million related to the FirstBank acquisition, with $98 million recognized in Q1.

Market Concerns: Ongoing worries about energy prices, AI, and private credit exposure, although PNC does not foresee significant impacts on credit quality.

Loan Growth Visibility: While Q1 saw strong loan growth, there is caution regarding future growth due to potential paydowns and economic uncertainties.

Competitive Pressures: Increased competition for deposits and loans, particularly in certain geographic areas, which may affect margins.

5Notable Q&A Insights

Deposit Growth Strategy: PNC is focused on growing retail clients and digital acquisition to drive core deposit growth, despite challenges in maintaining low-cost deposits in a higher-rate environment.

Customer Sentiment: Despite negative consumer confidence surveys, PNC's internal metrics show strong spending and loan growth, indicating a disconnect between sentiment and actual activity.

Loan Pricing and Competition: PNC is experiencing competitive pressures in loan pricing, particularly in leveraged lending, but is leveraging its specialty lending to maintain growth.

NDFI Exposure: PNC reassured investors about the quality of its non-depository financial institution loans, emphasizing low risk and strong collateral backing. Overall, PNC reported a robust start to 2026, driven by strategic acquisitions and strong operational performance, while navigating challenges related to integration costs and competitive pressures.