Q2 2026 PNC Financial Services Group Inc Earnings Call

July 15, 2026

Speaker #1: Greetings, and welcome to the PNC Financial Services Group earnings conference call. At this time, all participants are on listen-only mode. A question and answer session will follow the formal presentation.

Operator: Greetings, welcome to The PNC Financial Services Group earnings conference call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If you would like to ask a question during that time, please press star one on your telephone keypad. If you would like to withdraw your question, please press star two on your telephone keypad. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bryan Gill. Thank you, Bryan. You may now begin.

Speaker #1: If you would like to ask a question during that time, please press *1 on your telephone keypad. If you would like to withdraw your question, please press *2 on your telephone keypad.

Speaker #1: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

Speaker #1: It is now my pleasure to introduce your host, Bryan Gill. Thank you, Bryan. You may now begin.

Speaker #2: Good morning, and welcome to today's conference call for The PNC Financial Services Group. I am Bryan Gill, the Director of Investor Relations for PNC. Participating on this call are PNC's Chairman and CEO, Bill Demchak, and Rob Reilly, Executive Vice President and CFO.

Bryan Gill: Well, good morning, welcome to today's conference call for The PNC Financial Services Group. I am Bryan Gill, the Director of Investor Relations for PNC, participating on this call are PNC's Chairman and CEO, William S. Demchak, and Rob Q. Reilly, Executive Vice President and CFO. Today's presentation contains forward-looking information. Cautionary statements about this information, as well as reconciliations of non-GAAP measures, are included in today's earnings release materials, as well as our SEC filings and other investor materials. These are all available on our corporate website, pnc.com, under Investor Relations. These statements speak only as of 15 July 2026, PNC undertakes no obligation to update them. Now I'd like to turn the call over to Bill.

Speaker #2: Today's presentation contains forward-looking information. Cautionary statements about this information, as well as reconciliations of non-GAAP measures, are included in today's earnings release materials, as well as our SEC filings and other investor materials.

Speaker #2: These are all available on our corporate website, pnc.com, under Investor Relations. These statements speak only as of July 15, 2026, and PNC undertakes no obligation to update them.

Speaker #2: Now I'd like to turn the call over to Bill.

Speaker #3: Thank you, Bryan, and good morning, everyone. As you saw, PNC delivered an impressive second quarter. We generated $2.1 billion of net income or $4.81 per diluted share.

William S. Demchak: Thank you, Bryan, good morning, everyone. As you saw, PNC delivered an impressive Q2. We generated $2.1 billion of net income, or $4.81 per diluted share. Our results included FirstBank integration costs and other significant items. Collectively, these items reduced earnings per share by $0.04, resulting in an adjusted diluted EPS of $4.85. Rob's going to take you through all those details on our financial results in a couple of minutes, but let me just hit a few highlights. Business momentum remains really strong. We continue to win new clients and deepen existing relationships. DDA growth continues at a healthy pace while client acquisition across our corporate and private banking businesses continues to grow meaningfully. Net interest income grew on the back of continued commercial loan growth as well as favorable deposit mix and pricing.

Bill Demchak: Thank you, Bryan, good morning, everyone. As you saw, PNC delivered an impressive Q2. We generated $2.1 billion of net income, or $4.81 per diluted share. Our results included FirstBank integration costs and other significant items. Collectively, these items reduced earnings per share by $0.04, resulting in an adjusted diluted EPS of $4.85. Rob's going to take you through all those details on our financial results in a couple of minutes, but let me just hit a few highlights. Business momentum remains really strong. We continue to win new clients and deepen existing relationships. DDA growth continues at a healthy pace while client acquisition across our corporate and private banking businesses continues to grow meaningfully. Net interest income grew on the back of continued commercial loan growth as well as favorable deposit mix and pricing.

Speaker #3: Our results included first bank integration costs and other significant items. Collectively, these items reduced earnings per share by 4 cents, resulting in an adjusted diluted EPS of $4.85.

Speaker #3: Now, Rob's going to take you through all those details on our financial results in a couple of minutes, but let me just hit a few highlights.

Speaker #3: Business momentum remains really strong. We continue to win new clients and deepen existing relationships. DDA growth continues at a healthy pace while client acquisition across our corporate and private banking businesses continues to grow meaningfully.

Speaker #3: Net interest income grew on the back of continued commercial loan growth, as well as favorable deposit mix and pricing. Fee income performance was a particular highlight, increasing 10% linked quarter and 20% year-over-year.

William S. Demchak: Fee income performance was a particular highlight, increasing 10% linked quarter and 20% year-over-year. Growth has been broad-based across every fee category, underscoring the value of our diversified business model. We also generated positive operating leverage and improved our efficiency ratio. Credit performance remains strong, reflecting the strength of our economy as well as the quality of our portfolio. The consistency of our financial strength was evident in the Fed's latest stress test results. For the fourth year in a row, PNC's start to trough capital depletion was the lowest in our peer group, further demonstrating our best-in-class resiliency. With this in mind, our board approved an increase to our quarterly common stock dividend of $0.30, or 18%, to $2 per share. Beyond these financial results, we continue to make meaningful progress on the things that will drive our future success.

Bill Demchak: Fee income performance was a particular highlight, increasing 10% linked quarter and 20% year-over-year. Growth has been broad-based across every fee category, underscoring the value of our diversified business model. We also generated positive operating leverage and improved our efficiency ratio. Credit performance remains strong, reflecting the strength of our economy as well as the quality of our portfolio. The consistency of our financial strength was evident in the Fed's latest stress test results. For the fourth year in a row, PNC's start to trough capital depletion was the lowest in our peer group, further demonstrating our best-in-class resiliency. With this in mind, our board approved an increase to our quarterly common stock dividend of $0.30, or 18%, to $2 per share. Beyond these financial results, we continue to make meaningful progress on the things that will drive our future success.

Speaker #3: Growth has been broad-based across every fee category, underscoring the value of our diversified business model. We also generated positive operating leverage and improved our efficiency ratio.

Speaker #3: Credit performance remained strong, reflecting the strength of our economy as well as the quality of our portfolio. The consistency of our financial strength was evident in the Fed's latest stress test results.

Speaker #3: For the fourth year in a row, PNC's start start to trough capital depletion was the lowest in our peer group, further demonstrating our best-in-class resiliency.

Speaker #3: With this in mind, our board approved an increase to our quarterly common stock dividend of $0.30, or 18%, to $2.00 per share. Beyond these financial results, we continue to make meaningful progress on the things that will drive our future success.

Speaker #3: We successfully completed the conversion of First Bank, opened new branches in high-growth markets, introduced a new mobile banking platform, all the while continuing to advance client and infrastructure technologies.

William S. Demchak: We successfully completed the conversion of FirstBank, opened new branches in high-growth markets, introduced a new mobile banking platform, all the while continuing to advance client and infrastructure technologies. None of these efforts are about the next quarter. They're about making PNC a better bank for our customers and positioning the company for sustained growth over the long term. In summary, we had a great quarter, importantly, we are well-positioned to drive further growth across our company. Before I turn it over to Rob, as always, I just want to thank our employees for everything they do for our company and our customers. With that, Rob will take you through the quarter. Rob?

Bill Demchak: We successfully completed the conversion of FirstBank, opened new branches in high-growth markets, introduced a new mobile banking platform, all the while continuing to advance client and infrastructure technologies. None of these efforts are about the next quarter. They're about making PNC a better bank for our customers and positioning the company for sustained growth over the long term. In summary, we had a great quarter, importantly, we are well-positioned to drive further growth across our company. Before I turn it over to Rob, as always, I just want to thank our employees for everything they do for our company and our customers. With that, Rob will take you through the quarter. Rob?

Speaker #3: None of these efforts are about the next quarter. They're about making PNC a better bank for our customers and positioning the company for sustained growth over the long term.

Speaker #3: In summary, we had a great quarter, an importantly, we are well-positioned to drive further growth across our company. Before I turn it over to Rob, as always, I just want to thank our employees for everything they do for our company and our customers.

Speaker #3: And with that, Rob will take you through the quarter. Rob?

Speaker #4: Thanks, Bill, and good morning, everyone. Our balance sheet is on slide 4 and is presented on an average basis. For the linked quarter, loans of $363 billion grew $12 billion or 4%.

Rob Q. Reilly: Thanks, Bill, good morning, everyone. Our balance sheet is on slide four and is presented on an average basis. For the linked quarter, loans of $363 billion grew $12 billion or 4%. Securities balances increased 2% to $147 billion during the quarter, and the portfolio yield improved nine basis points to 3.45%. Average deposit balances of $457 billion were stable, consistent with seasonal patterns, borrowings were $79 billion, an increase of $16 billion, reflecting higher FHLB advances. Our tangible book value was $111 per common share, up 2% linked quarter, and up 7% compared with the same period a year ago. Our return on tangible common equity was 17.9% in Q2. We continue to be well-positioned with capital flexibility. During the quarter, we returned $1.3 billion of capital to shareholders, which included $690 million of common dividends and $610 million of share repurchases.

Rob Reilly: Thanks, Bill, good morning, everyone. Our balance sheet is on slide four and is presented on an average basis. For the linked quarter, loans of $363 billion grew $12 billion or 4%. Securities balances increased 2% to $147 billion during the quarter, and the portfolio yield improved 9 basis points to 3.45%. Average deposit balances of $457 billion were stable, consistent with seasonal patterns, borrowings were $79 billion, an increase of $16 billion, reflecting higher FHLB advances. Our tangible book value was $111 per common share, up 2% linked quarter, and up 7% compared with the same period a year ago. Our return on tangible common equity was 17.9% in Q2. We continue to be well-positioned with capital flexibility. During the quarter, we returned $1.3 billion of capital to shareholders, which included $690 million of common dividends and $610 million of share repurchases.

Speaker #4: Securities balances increased 2% to $147 billion during the quarter, and the portfolio yield improved 9 basis points to 3.45%. Average deposit balances of $457 billion were stable, consistent with seasonal patterns.

Speaker #4: And borrowings were $79 billion, an increase of $16 billion, reflecting higher FHLB advances. Our tangible book value was $111 per common share, up 2% linked quarter.

Speaker #4: And up 7% compared with the same period a year ago. And our return on tangible common equity was 17.9% in the second quarter. We continue to be well-positioned with capital flexibility, during the quarter we returned $1.3 billion of capital to shareholders.

Speaker #4: Which included $690 million of common dividends, and $610 million of share repurchases. Going forward, we expect third quarter repurchases to approximate this same level.

Rob Q. Reilly: Going forward, we expect Q3 repurchases to approximate this same level. As Bill just mentioned, our board recently approved a $0.30 increase to our quarterly cash dividend on common stock, raising the dividend 18% to $2 per share. We remain well-capitalized with an estimated CET1 ratio of 9.9%. Slide five shows our loans in more detail. Loan balances averaged $363 billion in Q2, an increase of $12 billion or 4% linked quarter, the total average loan yield decreased three basis points linked quarter to 5.47%. Virtually all of the loan growth was in C&I, reflecting strong new production and higher utilization across almost every loan category. CRE balances increased $690 million during the quarter, driven primarily by growth in retail and industrial exposures.

Rob Reilly: Going forward, we expect Q3 repurchases to approximate this same level. As Bill just mentioned, our board recently approved a $0.30 increase to our quarterly cash dividend on common stock, raising the dividend 18% to $2 per share. We remain well-capitalized with an estimated CET1 ratio of 9.9%. Slide five shows our loans in more detail. Loan balances averaged $363 billion in Q2, an increase of $12 billion or 4% linked quarter, the total average loan yield decreased 3 basis points linked quarter to 5.47%. Virtually all of the loan growth was in C&I, reflecting strong new production and higher utilization across almost every loan category. CRE balances increased $690 million during the quarter, driven primarily by growth in retail and industrial exposures.

Speaker #4: As Bill just mentioned, our board recently approved a 30-cent increase to our quarterly cash dividend on common stock, raising the dividend 18% to $2 per share.

Speaker #4: And we remain well-capitalized with an estimated CET-1 ratio of 9.9%. Slide 5 shows our loans in more detail. Loan balances averaged $363 billion in the second quarter.

Speaker #4: An increase of $12 billion or 4% linked quarter. And the total average loan yield decreased 3 basis points linked quarter to 5.47%. Virtually all of the loan growth was in CNI, reflecting strong new production and higher utilization across almost every loan category.

Speaker #4: CRE balances increased $690 million during the quarter, driven primarily by growth in retail and industrial exposures. And consumer loans declined by $730 million, as growth in credit card balances partially offset expected declines in residential real estate and auto loans.

Rob Q. Reilly: Consumer loans declined by $730 million, as growth in credit card balances partially offset expected declines in residential real estate and auto loans. Slide six covers our deposit balances in more detail. Average deposits were stable with the prior quarter, as higher consumer balances were offset by a seasonal decline in commercial deposits. Our total rate paid on interest-bearing deposits decreased five basis points to 1.91% in Q2, reflecting lower rates paid across all deposit categories. Notably, average non-interest-bearing balances grew 4% linked quarter and represented 23% of total deposits. Turning to the income statement. As Bill mentioned, I want to provide a bit more detail regarding the integration costs and significant items in the quarter. When combined, these items had a minimal impact on our net income and earnings per share. First, we incurred $127 million of integration costs related to the FirstBank acquisition.

Rob Reilly: Consumer loans declined by $730 million, as growth in credit card balances partially offset expected declines in residential real estate and auto loans. Slide six covers our deposit balances in more detail. Average deposits were stable with the prior quarter, as higher consumer balances were offset by a seasonal decline in commercial deposits. Our total rate paid on interest-bearing deposits decreased 5 basis points to 1.91% in Q2, reflecting lower rates paid across all deposit categories. Notably, average non-interest-bearing balances grew 4% linked quarter and represented 23% of total deposits. Turning to the income statement. As Bill mentioned, I want to provide a bit more detail regarding the integration costs and significant items in the quarter. When combined, these items had a minimal impact on our net income and earnings per share. First, we incurred $127 million of integration costs related to the FirstBank acquisition.

Speaker #4: Slide 6 covers our deposit balances in more detail. Average deposits were stable with the prior quarter, as higher consumer balances were offset by a seasonal decline in commercial deposits.

Speaker #4: Our total rate paid on interest-bearing deposits decreased 5 basis points to $1.91% in the second quarter, reflecting lower rates paid across all deposit non-interest-bearing balances grew 4% linked quarter, and represented 23% of total deposits.

Speaker #4: Turning to the income statement, as Bill mentioned, I want to provide a bit more detail regarding the integration costs and significant items in the quarter.

Speaker #4: When combined, these items had a minimal impact on our net income and earnings per share. First, we incurred $127 million of integration costs related to the first bank acquisition.

Speaker #4: Beyond these integration costs, we had several significant items. We participated in the Visa exchange program and monetized half of our Visa class B2 shares, resulting in a $448 million pre-tax gain.

Rob Q. Reilly: Beyond these integration costs, we had several significant items. We participated in the Visa exchange program and monetized half of our Visa Class B-2 shares, resulting in a $448 million pre-tax gain. We also recorded a -$85 million Visa derivative fair value adjustment associated with our remaining Visa Class B-3 shares, primarily related to the extension of anticipated litigation resolution. We repositioned a portion of our securities portfolio through the sale of approximately $4 billion of available-for-sale securities, resulting in a $139 million loss. We reinvested the proceeds into securities with yields approximately 120 basis points higher than the securities sold. We contributed $140 million to the PNC Foundation, which supports our communities and early childhood education initiatives. All in, the FirstBank integration costs and significant items, when combined, resulted in a nominal reduction to our Q2 EPS of $0.04.

Rob Reilly: Beyond these integration costs, we had several significant items. We participated in the Visa exchange program and monetized half of our Visa Class B-2 shares, resulting in a $448 million pre-tax gain. We also recorded a -$85 million Visa derivative fair value adjustment associated with our remaining Visa Class B-3 shares, primarily related to the extension of anticipated litigation resolution. We repositioned a portion of our securities portfolio through the sale of approximately $4 billion of available-for-sale securities, resulting in a $139 million loss. We reinvested the proceeds into securities with yields approximately 120 basis points higher than the securities sold. We contributed $140 million to the PNC Foundation, which supports our communities and early childhood education initiatives. All in, the FirstBank integration costs and significant items, when combined, resulted in a nominal reduction to our Q2 EPS of $0.04.

Speaker #4: We also recorded a negative $85 million Visa derivative fair value adjustment, associated with our remaining Visa class B3 shares, primarily related to the extension of anticipated litigation resolution.

Speaker #4: In addition, we repositioned a portion of our securities portfolio through the sale of approximately $4 billion of available-for-sale securities, resulting in a $139 million loss.

Speaker #4: We reinvested the proceeds into securities with yields approximately 120 basis points higher than the securities sold. Finally, we contributed $140 million to the PNC Foundation, which supports our communities and early childhood education initiatives.

Speaker #4: So all in, the first bank integration costs and significant items, when combined, resulted in a nominal reduction to our second quarter EPS of 4 cents.

Speaker #4: Turning to slide 8, we highlight our income statement trends. Comparing the second quarter to the first quarter of 2026, total revenue was $6.9 billion, and grew $710 million, or 12%.

Rob Q. Reilly: Turning to slide eight, we highlight our income statement trends. Comparing the Q2 to the Q1 2026, total revenue was $6.9 billion and grew $710 million or 12%, and included both integration costs and significant items totaling $218 million. Non-interest expense of $4.1 billion increased $330 million or 9% and included $140 million PNC Foundation contribution, as well as $121 million of integration expense. We generated 3% positive operating leverage, and PPNR grew 16%. Provision was $191 million. Our effective tax rate was 21%. As a result, our Q2 net income was $2.1 billion or $4.81 per common share, and $4.85 as adjusted. Comparing the Q2 2026 to the same time last year, net income grew by $412 million, resulting in EPS growth of 25%. Turning to slide nine, we detail our revenue trends.

Rob Reilly: Turning to slide eight, we highlight our income statement trends. Comparing the Q2 to the Q1 2026, total revenue was $6.9 billion and grew $710 million or 12%, and included both integration costs and significant items totaling $218 million. Non-interest expense of $4.1 billion increased $330 million or 9% and included $140 million PNC Foundation contribution, as well as $121 million of integration expense. We generated 3% positive operating leverage, and PPNR grew 16%. Provision was $191 million. Our effective tax rate was 21%. As a result, our Q2 net income was $2.1 billion or $4.81 per common share, and $4.85 as adjusted. Comparing the Q2 2026 to the same time last year, net income grew by $412 million, resulting in EPS growth of 25%. Turning to slide nine, we detail our revenue trends.

Speaker #4: And included both integration costs and significant items totaling $218 million. Non-interest expense of 4.1 billion increased $330 million, or 9%, and included $140 million PNC Foundation contribution, as well as $121 million of integration expense.

Speaker #4: We generated 3% positive operating leverage and PP&R grew 16%. Provision was $191 million. Our effective tax rate was 21%. As a result, our second quarter net income was $2.1 billion, or $4.81 per common share, and $4.85 as adjusted.

Speaker #4: Comparing the second quarter of 2026 to the same time last year, net income grew by $412 million, resulting in EPS growth of 25%. Turning to slide 9, we detail our revenue trends.

Speaker #4: While the quarter included integration costs and significant items within the other non-interest income, our revenue growth was driven primarily by the underlying strength of our franchise.

Rob Q. Reilly: While the quarter included integration costs and significant items within the other non-interest income, our revenue growth was driven primarily by the underlying strength of our franchise. We generated 4% growth in net interest income and 10% growth in fee revenue. Net interest income of $4.1 billion increased to $146 million and included the benefit of commercial loan growth and higher non-interest-bearing deposit balances. Our net interest margin was 2.96%, an increase of one basis point. Fee income was $2.3 billion, an increase of $200 million or 10%. Looking at the details, asset management and brokerage increased $20 million or 5%, driven by increased client activity and higher average equity markets. Capital markets and advisory revenue increased to $114 million or 25%, reflecting record M&A advisory fees and strong activity across our other capital markets businesses.

Rob Reilly: While the quarter included integration costs and significant items within the other non-interest income, our revenue growth was driven primarily by the underlying strength of our franchise. We generated 4% growth in net interest income and 10% growth in fee revenue. Net interest income of $4.1 billion increased to $146 million and included the benefit of commercial loan growth and higher non-interest-bearing deposit balances. Our net interest margin was 2.96%, an increase of 1 basis point. Fee income was $2.3 billion, an increase of $200 million or 10%. Looking at the details, asset management and brokerage increased $20 million or 5%, driven by increased client activity and higher average equity markets. Capital markets and advisory revenue increased to $114 million or 25%, reflecting record M&A advisory fees and strong activity across our other capital markets businesses.

Speaker #4: We generated 4% growth in net interest income and 10% growth in fee revenue. Net interest income of $4.1 billion increased $146 million, and included the benefit of commercial loan growth and higher non-interest-bearing deposit balances.

Speaker #4: Our net interest margin was 2.96%, an increase of 1 basis point. Fee income was $2.3 billion, an increase of $200 million, or 10%. Looking at the details, asset management and brokerage increased $20 million, or 5%, driven by increased client activity and higher average equity markets.

Speaker #4: Capital markets and advisory revenue increased $114 million, or 25%, reflecting record M&A advisory fees and strong activity across our other capital markets businesses. Card and cash management increased $34 million, or 5%, driven by seasonally higher consumer transaction levels and growth in Treasury management product revenue.

Rob Q. Reilly: Card and cash management increased $34 million or 5%, driven by seasonally higher consumer transaction levels and growth in treasury management product revenue. Lending and deposit services increased by $6 million or 2%, primarily due to increased customer activity. Mortgage revenue increased $26 million or 22%, largely attributable to -residential mortgage servicing rights valuations recognized in the Q1. Other non-interest income of $489 million increased to $364 million, which included the $218 million of integration costs in significant items, as well as +private equity valuation adjustments. Compared with the Q2 2025, and excluding integration costs and significant items, total non-interest income increased $444 million or 21%. Importantly, this performance was driven by strong organic growth with broad-based increases across our businesses. Turning to slide 10. Q2 expenses increased $330 million or 9% linked quarter.

Rob Reilly: Card and cash management increased $34 million or 5%, driven by seasonally higher consumer transaction levels and growth in treasury management product revenue. Lending and deposit services increased by $6 million or 2%, primarily due to increased customer activity. Mortgage revenue increased $26 million or 22%, largely attributable to -residential mortgage servicing rights valuations recognized in the Q1. Other non-interest income of $489 million increased to $364 million, which included the $218 million of integration costs in significant items, as well as +private equity valuation adjustments. Compared with the Q2 2025, and excluding integration costs and significant items, total non-interest income increased $444 million or 21%. Importantly, this performance was driven by strong organic growth with broad-based increases across our businesses. Turning to slide 10. Q2 expenses increased $330 million or 9% linked quarter.

Speaker #4: Lending and deposit services increased by $6 million, or 2%, primarily due to increased customer activity. Mortgage revenue increased $26 million, or 22%, largely attributable to negative residential mortgage servicing rights valuations recognized in the first quarter.

Speaker #4: And other non-interest income of $489 million increased $364 million, which included the $218 million of integration costs and significant items, as well as positive private equity valuation adjustments.

Speaker #4: Compared with the second quarter of 2025 and excluding integration costs and significant items, total non-interest income increased $444 million or 21%. Importantly, this performance was driven by strong organic growth, with broad-based increases across our businesses.

Speaker #4: Turning to slide 10, second quarter expenses increased $330 million or 9% linked quarter. Expenses in the second quarter included integration expense and significant items totaling $261 million.

Rob Q. Reilly: Expenses in the second quarter included integration expense and significant items totaling $261 million. The first quarter of 2026 included $97 million of integration expense. Excluding the impact of integration costs and significant items, non-interest expense increased to $166 million or 5% linked quarter. The growth reflected increased business activity, higher marketing spend, as well as continued investments. We remain focused on expense management, and we're on track to reach our goal to reduce costs by $350 million in 2026 through our continuous improvement program. Which as a reminder, is independent of the FirstBank acquisition. This program will continue to fund a significant portion of our ongoing business and technology investments. Our credit metrics are presented on slide 11. Overall credit quality remains strong with improvements in NPLs, delinquencies, and net loan charge-offs.

Rob Reilly: Expenses in the second quarter included integration expense and significant items totaling $261 million. The first quarter of 2026 included $97 million of integration expense. Excluding the impact of integration costs and significant items, non-interest expense increased to $166 million or 5% linked quarter. The growth reflected increased business activity, higher marketing spend, as well as continued investments. We remain focused on expense management, and we're on track to reach our goal to reduce costs by $350 million in 2026 through our continuous improvement program. Which as a reminder, is independent of the FirstBank acquisition. This program will continue to fund a significant portion of our ongoing business and technology investments. Our credit metrics are presented on slide 11. Overall credit quality remains strong with improvements in NPLs, delinquencies, and net loan charge-offs.

Speaker #4: While the first quarter of 2026 included $97 million of integration expense, excluding the impact of integration costs and significant items, non-interest expense increased $166 million, or 5%, linked quarter.

Speaker #4: The growth reflected increased business activity, higher marketing spend, as well as continued investments. We remain focused on expense management, and we're on track to reach our goal to reduce costs by $350 million in 2026 through our continuous improvement program.

Speaker #4: Which, as a reminder, is independent of the first bank acquisition. And this program will continue to fund a significant portion of our ongoing business and technology investments.

Speaker #4: Our credit metrics are presented on slide 11. Overall credit quality remains strong, with improvements in NPLs, delinquencies, and net loan charge-offs. Non-performing loans of $2 billion decreased $216 million, or 10%, and represented 0.55% of total loans, down from 0.62% last quarter.

Rob Q. Reilly: Non-performing loans of $2 billion decreased $216 million or 10%, and represented 0.55% of total loans, down from 0.62% last quarter. Total delinquencies declined $122 million to $1.4 billion and now represent 0.39% of total loans. Total net loan charge-offs were $226 million, and our NCO ratio was 25 basis points. At the end of Q2, our allowance for credit losses totaled $5.5 billion or 1.48% of total loans. To summarize, PNC reported a strong Q2 of 2026, and we're well-positioned for the H2 of the year. Regarding our view of the overall economy, our base case assumes GDP growth to be approximately 2.1% in 2026, with the unemployment rate holding steady and ending the year at approximately 4.3%. We expect the Federal Reserve to keep rates stable throughout 2026.

Rob Reilly: Non-performing loans of $2 billion decreased $216 million or 10%, and represented 0.55% of total loans, down from 0.62% last quarter. Total delinquencies declined $122 million to $1.4 billion and now represent 0.39% of total loans. Total net loan charge-offs were $226 million, and our NCO ratio was 25 basis points. At the end of Q2, our allowance for credit losses totaled $5.5 billion or 1.48% of total loans. To summarize, PNC reported a strong Q2 of 2026, and we're well-positioned for the H2 of the year. Regarding our view of the overall economy, our base case assumes GDP growth to be approximately 2.1% in 2026, with the unemployment rate holding steady and ending the year at approximately 4.3%. We expect the Federal Reserve to keep rates stable throughout 2026.

Speaker #4: Total delinquencies declined $122 million to $1.4 billion, and now represent 0.39% of total loans. Total net loan charge-offs were $226 million, and our NCO ratio was 25 basis points.

Speaker #4: At the end of the second quarter, our allowance for credit losses totaled $5.5 billion, or 1.48% of total loans. To summarize, PNC reported a strong second quarter of 2026, and we're well positioned for the second half of the year.

Speaker #4: Regarding our view of the overall economy, our base case assumes GDP growth to be approximately 2.1% in 2026, with the unemployment rate holding steady and ending the year at approximately 4.3%.

Speaker #4: We expect the Federal Reserve to keep rates stable throughout 2026. For ease of comparability with our prior guidance, our full-year outlook excludes the impact of first bank integration charges and significant items.

Rob Q. Reilly: For ease of comparability with our prior guidance, our full-year outlook excludes the impact of FirstBank integration charges and significant items. Considering our reported H1 operating results, Q3 expectations, and current economic forecast, our outlook for the full year 2026 compared to 2025 results is as follows. We expect full-year average loan growth of approximately 12.5%. We expect full-year net interest income to be up 15% to 15.5%. We expect non-interest income to be up approximately 9%. Taking the component pieces of revenue together, we expect total revenue to be up approximately 13%. Non-interest expense to be up approximately 8.5%, and we expect our effective tax rate to be approximately 19.5%. Our outlook for Q3 of 2026 compared to Q2 of 2026 is as follows.

Rob Reilly: For ease of comparability with our prior guidance, our full-year outlook excludes the impact of FirstBank integration charges and significant items. Considering our reported H1 operating results, Q3 expectations, and current economic forecast, our outlook for the full year 2026 compared to 2025 results is as follows. We expect full-year average loan growth of approximately 12.5%. We expect full-year net interest income to be up 15% to 15.5%. We expect non-interest income to be up approximately 9%. Taking the component pieces of revenue together, we expect total revenue to be up approximately 13%. Non-interest expense to be up approximately 8.5%, and we expect our effective tax rate to be approximately 19.5%. Our outlook for Q3 of 2026 compared to Q2 of 2026 is as follows.

Speaker #4: Considering our reported first-half operating results, third-quarter expectations, and current economic forecast, our outlook for the full year 2026 compared to 2025 results is as follows.

Speaker #4: We expect full-year average loan growth of approximately 12.5%. We expect full-year net interest income to be up 15 to 15.5%. We expect non-interest income to be up approximately 9%.

Speaker #4: Taking the component pieces of revenue together, we expect total revenue to be up approximately 13%, non-interest expense to be up approximately 8.5%, and we expect our effective tax rate to be approximately 19.5%.

Speaker #4: Our outlook for the third quarter of 2026, compared to the second quarter of 2026, is as follows. We expect average loans to be up 1 to 2%.

Rob Q. Reilly: We expect average loans to be up 1% to 2%, net interest income to be up between 3% and 3.5%, fee income to be down 5% to 5.5%, other non-interest income to be in the range of $150 to $200 million. We expect adjusted non-interest expense to decline 2% to 3%, and in Q3, we anticipate approximately $50 million of integration expenses. We expect Q3 net charge-offs to be approximately $225 million. With that, Bill and I are ready to take your questions.

Rob Reilly: We expect average loans to be up 1% to 2%, net interest income to be up between 3% and 3.5%, fee income to be down 5% to 5.5%, other non-interest income to be in the range of $150 to $200 million. We expect adjusted non-interest expense to decline 2% to 3%, and in Q3, we anticipate approximately $50 million of integration expenses. We expect Q3 net charge-offs to be approximately $225 million. With that, Bill and I are ready to take your questions.

Speaker #4: Net interest income to be up between 3 and 3.5%. Fee income to be down 5 to 5.5%. Other non-interest income to be in the range of $150 to $200 million.

Speaker #4: We expect adjusted non-interest expense to decline 2 to 3%. And in the third quarter, we anticipate approximately $50 million of integration expenses. And we expect third quarter net charge-offs to be approximately $225 million.

Speaker #4: And with that, Bill and I are ready to take your questions.

Speaker #1: Thank you. We will now be conducting a question and answer session. As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad.

Operator: Thank you. We will now be conducting a question-and-answer session. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question today is coming from John McDonald of Truist Securities. Please go ahead.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.

Speaker #1: Our first question today is coming from John McDonald of Truist Securities. Please go ahead.

Speaker #2: Thanks. Good morning. Rob, I wanted to ask—you had some very strong loan growth through the quarter. Could you speak a little bit to the cadence of the loan and deposit growth as the quarter progressed?

John McDonald: Thanks. Good morning. Rob, wanted to ask-

Rob Q. Reilly: Hi

Rob Reilly: Hi

John McDonald: you've had some very strong loan growth through the quarter. Could you speak a little bit to the cadence of the loan and deposit growth as the quarter progressed? There seems a little bit different dynamics between the period end and average. Maybe just broadly to how you plan on funding the strong loan growth throughout the year.

Speaker #2: There seems a little bit different dynamics between the period end and average. And maybe just broadly to how you plan on funding the strong loan growth throughout the year.

Speaker #3: Yeah, sure. So good morning, John. Yeah, loan growth in the first half and in the second quarter continued to be pretty strong. Which is a good thing.

Rob Q. Reilly: Yeah, sure. Good morning, John. The loan growth in the H1 and in the Q2 continued to be pretty strong, which is a good thing. When we take a look at the H2, we still see loan growth, but not at the same rates. We are pointing to effectively sort of GDP growth in our guidance going through the balance of the year. More loan growth, but not to the same extent. In terms of funding, as we look forward, we do expect deposits to grow through the H2 of the year. That'll be a key component to the funding as that replaces some wholesale debt that we picked up in the Q2.

Rob Reilly: Yeah, sure. Good morning, John. The loan growth in the H1 and in the Q2 continued to be pretty strong, which is a good thing. When we take a look at the H2, we still see loan growth, but not at the same rates. We are pointing to effectively sort of GDP growth in our guidance going through the balance of the year. More loan growth, but not to the same extent. In terms of funding, as we look forward, we do expect deposits to grow through the H2 of the year. That'll be a key component to the funding as that replaces some wholesale debt that we picked up in the Q2.

Speaker #3: When we take a look at the second half, we still see loan growth, but not at the same rates. We are pointing to, effectively, sort of GDP growth in our guidance going through the balance of the year.

Speaker #3: So, more loan growth, but not to the same extent. And in terms of funding, as we look forward, we do expect deposits to grow through the second half.

Speaker #3: So that'll be a key component to the funding as it replaces some wholesale debt that we picked up in the second quarter.

Speaker #2: Okay, got it. And was that just about some of the funding that you picked up on the FHLB side this quarter? Was that just some temporary dynamics, and you expect that? You also had good NIB growth this quarter?

John McDonald: Okay. Got it. The funding that you picked up on the FHLB side this quarter, was that just some temporary dynamics? You also had good NIM growth this quarter. Maybe just comment on that and the outlook there.

Speaker #2: Maybe you could just comment on that and the outlook there.

Speaker #3: Yeah. So non-interest bearing, your second question first. Non-interest bearing deposits were higher than we expected. All of that, virtually all of that, was on the commercial side.

Rob Q. Reilly: Yeah. Your second question first. Non-interest-bearing deposits were higher than we expected. Virtually all of that was on the commercial side related to our treasury management business and some escrow monies that come through. That's a good thing. I would expect that to continue, not at the same rate. We're at 23% of our total deposits, and we have that pretty steady through the balance of the year. I think the funding, John, you should just assume we sort of optimize against every lever, whether it's wholesale funding or what we're doing on deposits. The drops this quarter in corporate deposits are pretty easy to turn back on. There's a bit of a seasonal effect, but there's also a rate effect. You saw we grew deposits in retail, which is the most important thing.

Rob Reilly: Yeah. Your second question first. Non-interest-bearing deposits were higher than we expected. Virtually all of that was on the commercial side related to our treasury management business and some escrow monies that come through. That's a good thing. I would expect that to continue, not at the same rate. We're at 23% of our total deposits, and we have that pretty steady through the balance of the year.

Speaker #3: Related to our Treasury Management business and some escrow monies that come through, so that's a good thing. I would expect that to continue, though not at the same rate.

Speaker #3: So we're at 23% of our total deposits, and we've kept that pretty steady through the balance of the year.

Speaker #2: I think the funding, John, you should just assume we sort of optimize against every lever, whether it's wholesale funding or what we're doing on deposits.

Bill Demchak: I think the funding, John, you should just assume we sort of optimize against every lever, whether it's wholesale funding or what we're doing on deposits. The drops this quarter in corporate deposits are pretty easy to turn back on. There's a bit of a seasonal effect, but there's also a rate effect. You saw we grew deposits in retail, which is the most important thing.

Speaker #2: The drops this quarter in corporate deposits are pretty easy to turn back on. There's a bit of a seasonal effect, but there's also a rate effect.

Speaker #2: You saw we grew deposits in retail, which is the most important thing. And the home loan advances this quarter were, think of it as the cheapest alternative to fund loans.

Rob Q. Reilly: The home loan advances this quarter were, think of it as the cheapest alternative to fund loans relative to other things. That changes all the time. I wouldn't read too much into that. No, it's just flexing to the optimal cost.

Bill Demchak: The home loan advances this quarter were, think of it as the cheapest alternative to fund loans relative to other things. That changes all the time. I wouldn't read too much into that. No, it's just flexing to the optimal cost.

Speaker #2: Relative to other things. And that changes all the time. I wouldn't read too much into that.

Speaker #3: No, it's just flexing to the optimal cost.

Speaker #2: Yeah, got it. Got it. Okay, great. Thanks, guys.

John McDonald: Yeah. Got it. Okay, great. Thanks, guys.

Speaker #3: Sure.

Rob Q. Reilly: Sure.

Rob Reilly: Sure.

Speaker #1: Thank you. Our next question is coming from John Pankari of Evercore ISI. Please go ahead.

Operator: Thank you. Our next question is coming from John Pancari of Evercore ISI. Please go ahead.

Speaker #4: Good morning.

John Pancari: Good morning.

Speaker #2: John, good morning.

Rob Q. Reilly: John.

Rob Reilly: John.

Speaker #4: On the loan growth side, I appreciate the trends—you've seen some pretty good strengthening. Can you maybe just talk about the areas of strengthening?

John Pancari: On the loan growth side, I appreciate the trends here. You've seen some pretty good strengthening. Can you maybe just talk about the areas of strengthening? What do you see in terms of demand and pipelines and utilization? Separately on the loan spread front, any shift in spreads that's observable here just amid the competitive backdrop? Thanks.

Speaker #4: What do you see in terms of demand and pipelines and utilization? And then separately, on the loan spread front, is there any shift in spreads that's observable here, just amid the competitive backdrop?

Speaker #4: Thanks.

Speaker #2: Do you want me?

Rob Q. Reilly: You want me? Yeah. Inside that, I would say the loan growth has been strong. Again, we expect loan growth to continue, not at the same rate, and that's just a function of maybe some pull forward in terms of borrowings or some pent-up borrowing demand spend, we'll see. As far as the mix, we don't see a lot of spread compression from a competitive standpoint, we do have some spread compression in the continuation of what we saw in Q1, which is most of the lending that we're doing is to the high credit quality, lower spread entities. Those are who are borrowing now. It's good business. It's sufficient return, particularly given that those loans often come with treasury management and/or capital markets. There's a little bit of dilution to the portfolio spreads, that's more mix than competitive pressures.

Rob Reilly: You want me? Yeah. Inside that, I would say the loan growth has been strong. Again, we expect loan growth to continue, not at the same rate, and that's just a function of maybe some pull forward in terms of borrowings or some pent-up borrowing demand spend, we'll see. As far as the mix, we don't see a lot of spread compression from a competitive standpoint, we do have some spread compression in the continuation of what we saw in Q1, which is most of the lending that we're doing is to the high credit quality, lower spread entities. Those are who are borrowing now. It's good business. It's sufficient return, particularly given that those loans often come with treasury management and/or capital markets. There's a little bit of dilution to the portfolio spreads, that's more mix than competitive pressures.

Speaker #3: Yeah. So, inside that, I would say the loan growth has been strong. Again, we expect loan growth to continue, though not at the same rate.

Speaker #3: And that's just a function of maybe some pull forward in terms of borrowings or some pent-up borrowing demand. And we'll see. As far as the mix, we don't see a lot of spread compression from a competitive standpoint.

Speaker #3: But we do have some spread compression in the continuation of what we saw in the first quarter, which is most of the lending that we're doing is to the high credit quality lower spread.

Speaker #3: Entities—those are who are borrowing now. It's good business. It's a sufficient return, particularly given that those loans often come with Treasury management and/or capital markets.

Speaker #3: So there's a little bit of dilution to the portfolio spreads, but that's more mixed than competitive pressures.

Speaker #2: Yeah. The other thing we continue to have a new markets outpace the legacy markets just in terms of growth as we grow share there.

Rob Q. Reilly: The other thing, we continue to have the new markets outpace the legacy markets just in terms of growth as we grow share there. For the first time, I'm sure this isn't true, but for the first time I can remember, we had strong growth across kind of every category inside of the C&I franchise and utilization increases. Broad-based. Yeah, it's broad-based. We're gaining share kind of all on the back of what feels like a pretty strong economy.

Bill Demchak: The other thing, we continue to have the new markets outpace the legacy markets just in terms of growth as we grow share there. For the first time, I'm sure this isn't true, but for the first time I can remember, we had strong growth across kind of every category inside of the C&I franchise and utilization increases. Broad-based. Yeah, it's broad-based. We're gaining share kind of all on the back of what feels like a pretty strong economy.

Speaker #2: And for the first time I'm sure this isn't true, but for the first time I can remember, we had strong growth across kind of every category inside of the CNI franchise.

Speaker #2: And utilization increases. So, yeah, it's broad-based. We're gaining share, kind of all on the back of what feels like a pretty strong economy.

Speaker #4: Okay, thank you. That's helpful. And then I know you don't really guide on more specifically around the margin, but just trying to get an idea, just given some of the pricing dynamics that you're seeing and the backdrop, and the environment, just wanted to get an idea of how you're thinking about this margin could traject through the back half of the year that's kind of baked into your guidance here.

John Pancari: Okay. Thank you. That's helpful. Then I know you don't really guide on more specifically around the margin, but just trying to get an idea, just given some of the pricing dynamics that you're seeing and the backdrop in the environment, just wanted to get an idea of how you're thinking about if the margin could traject through the back half of the year that's kind of baked into your guidance here. I know you saw a modest expansion in the quarter by about a bit. Just how are you thinking about how that could play out as you look through the back half?

Speaker #4: I know you saw a modest expansion in the quarter by about a bit. Just how are you thinking about how that could play out as you look through the back half?

Speaker #3: Yeah, so let me address that, John, because there's a lot of focus on NIM. We had said that we expect to go above 3% by the end of the year, and we still are standing by that.

Rob Q. Reilly: Yeah. Let me address that, John, because there's a lot of focus on NIM. We had said that we expect to go above 3% by the end of the year, and we still are standing next to that. That's that. The second piece is if you chunk down the NIM components, and it sort of gets to your earlier question, the components of our Q2 NIM. What helped our Q2 NIM, which went up a net 1 basis point, was obviously the decline in the rate paid on the interest-bearing, as well as the increased non-interest-bearing deposits. That helped NIM. What constrained NIM was the point that I was making earlier, is these commercial loans that are coming in at a pretty good rate, and the majority of those being the higher credit quality, lower spread. That constrains NIM.

Rob Reilly: Yeah. Let me address that, John, because there's a lot of focus on NIM. We had said that we expect to go above 3% by the end of the year, and we still are standing next to that. That's that. The second piece is if you chunk down the NIM components, and it sort of gets to your earlier question, the components of our Q2 NIM. What helped our Q2 NIM, which went up a net 1 basis point, was obviously the decline in the rate paid on the interest-bearing, as well as the increased non-interest-bearing deposits. That helped NIM. What constrained NIM was the point that I was making earlier, is these commercial loans that are coming in at a pretty good rate, and the majority of those being the higher credit quality, lower spread. That constrains NIM.

Speaker #3: So that's that. The second piece is if you chunk down the NIM components, and it sort of gets to your earlier question, the components of our second quarter NIM.

Speaker #3: What helped our second quarter NIM, which went up a net one basis point, was obviously the decline in the rate paid on the interest bearing.

Speaker #3: As well as the increased non-interest bearing deposits. So that helped NIM. What constrained NIM was the point that I was making earlier is these commercial loans that are coming in at a pretty good rate, and the majority of those being the higher credit quality lower spread.

Speaker #3: That constrains NIM. So when you think about it, and you look at it, those loans carry the fees along with them. So from an EPS perspective, those loans are hugely accretive.

Rob Q. Reilly: When you think about it and you look at it, those loans carry the fees along with them. From an EPS perspective, those loans are hugely accretive. On a standalone basis, they're dilutive to NIM. If we didn't have those loans, just for illustration purposes, if we didn't have that loan growth in the Q2, our NIM would've easily popped above 3%. We're given a choice between lower NIM, higher EPS, or higher NIM and lower EPS. We'll take EPS every time.

Rob Reilly: When you think about it and you look at it, those loans carry the fees along with them. From an EPS perspective, those loans are hugely accretive. On a standalone basis, they're dilutive to NIM. If we didn't have those loans, just for illustration purposes, if we didn't have that loan growth in the Q2, our NIM would've easily popped above 3%. We're given a choice between lower NIM, higher EPS, or higher NIM and lower EPS. We'll take EPS every time.

Speaker #3: On a standalone basis, they're dilutive to NIM. So if we didn't have those loans, just for illustration purposes, if we didn't have that loan growth in the second quarter, our NIM would have easily popped above 3%.

Speaker #3: So we're given a choice between lower NIM and higher EPS, or higher NIM and lower EPS. We'll take EPS every time.

Speaker #2: But having said that, we're still on the—

William S. Demchak: Having said that, we're still on the

Bill Demchak: Having said that, we're still on the

Speaker #3: We're on record for 3% in the back half of the year.

Rob Q. Reilly: We're on record for 3% at the 8-K update.

Rob Reilly: We're on record for 3% at the 8-K update.

William S. Demchak: Yeah. Much of that driven through the continual repricing of fixed-rate assets.

Bill Demchak: Yeah. Much of that driven through the continual repricing of fixed-rate assets.

Speaker #2: And much of that is driven through the continual repricing of fixed-rate assets.

Speaker #3: Well, that's the longer-term issue. So the longer-term issue is the seedness of the yield curve. We still have a lot of fixed rate assets to reprice, so that'll determine that.

Rob Q. Reilly: Well, that's the longer-term issue. The longer-term issue is the steepness of the yield curve. We still have a lot of fixed-rate assets to reprice, that'll determine that. I just mentioned that for illustration purposes because I think a lot of the focus on NIM is on the funding side and the issues there, but there's also the loan dynamic.

Rob Reilly: Well, that's the longer-term issue. The longer-term issue is the steepness of the yield curve. We still have a lot of fixed-rate assets to reprice, that'll determine that. I just mentioned that for illustration purposes because I think a lot of the focus on NIM is on the funding side and the issues there, but there's also the loan dynamic.

Speaker #3: But I just mentioned that for illustration purposes because I think a lot of the focus on NIM is on the funding side, and the issues there, but there's also the loan dynamic.

Speaker #2: Right.

John Pancari: Right. Got it. Thanks for that detail. I appreciate it.

Speaker #4: Got it. Thanks for that detail. I appreciate it.

Speaker #1: Thank you. Our next question is coming from Ibrahim Punawala of Bank of America. Please go ahead.

Operator: Thank you. Our next question is coming from Ebrahim Poonawala of Bank of America. Please go ahead.

Speaker #5: Hey, good morning. I guess maybe Bill, Rob, sticking with loan growth. So you mentioned the high credit quality, low-spread lending, which is good to hear from a credit quality standpoint.

Ebrahim Poonawala: Hey, good morning.

William S. Demchak: Good morning.

Bill Demchak: Good morning.

Ebrahim Poonawala: I guess, maybe Bill, Rob, sticking with loan growth. You mentioned the high credit quality, low spread lending, which is good to hear from a credit quality standpoint.

Speaker #5: Is this different from history in terms of this kind of loan growth, or this is kind of what you would expect in a good CNI environment where market spreads are tight?

Rob Q. Reilly: Yeah.

Bill Demchak: Yeah.

Ebrahim Poonawala: Is this different from history in terms of this kind of loan growth, or this is kind of what you would expect in a good C&I environment where market spreads are tight? One, is there something different about the quality or the type of borrower or the type of borrowing that's happening? Then I have a follow-up to that, but maybe if you could start there. Thanks.

Speaker #5: So one, is there something different about the quality or the type of borrower or the type of borrowing that's happening? And then I have a follow-up to that, but maybe if you could start there.

Speaker #5: Thanks.

Speaker #3: Yeah, I'd say I wouldn't say anything is way different, but I would say that the preponderance of the loan growth is in that higher credit quality, lower spread loans, which is probably, mix-wise, a little bit higher than the average run rate.

Rob Q. Reilly: Yeah, I wouldn't say anything is way different, I would say that the preponderance of the loan growth is in that higher credit quality, lower spread loans, which is probably mix-wise a little bit higher than average run rate. It's not off the charts.

Rob Reilly: Yeah, I wouldn't say anything is way different, I would say that the preponderance of the loan growth is in that higher credit quality, lower spread loans, which is probably mix-wise a little bit higher than average run rate. It's not off the charts.

Speaker #3: But it's not off the charts.

Speaker #5: Got it. And I guess as a follow-up to that, you had all the big banks' support. There's significant energy around the economy, around AI, and CapEx spend.

Ebrahim Poonawala: Got it. I guess as a follow-up to that, you had all the big banks report there's a significant energy around the economy, around AI, CapEx spend. We are seeing that in the financing markets. When you bring it back to you as the second bank today that talked about broad-based C&I growth. I'm just wondering, one, are you picking up some of that business tied to data center lending, et cetera? Second, when you think about the broad-based growth, are there other engines of the economy at work here, be it reshoring, manufacturing, et cetera? Or are you able to sort of connect the dots between second derivatives of AI CapEx driving that loan demand for PNC?

Speaker #5: We are seeing that in the financing markets. When you sort of bring it back to—you're the second bank today that talked about broad-based C&I growth.

Speaker #5: I'm just wondering, first, are you picking up some of that business tied to data center lending, etc.? And second, when you think about the broad-based growth, are there other engines of the economy at work here, be it reshoring, manufacturing, etc.?

Speaker #5: Or are you able to sort of connect the dots between second derivatives of AI CapEx driving that loan demand for PNC?

William S. Demchak: It's too broad-based to lay it all on AI. At the margin it's impacting what we're doing. As I said before, it's coming from kind of all sectors. I've heard the different explanations as to why it's showing up. People are otherwise used to the chaos in the environment and have figured out that they need to operate through it and grow. The M&A environment is more robust. Look, the economy's strong and people are spending money. While I appreciate the impact AI is having on GDP, that can't be the only driver of the loan growth that we're seeing given the industry dispersion and the geographic dispersion.

Bill Demchak: It's too broad-based to lay it all on AI. At the margin it's impacting what we're doing. As I said before, it's coming from kind of all sectors. I've heard the different explanations as to why it's showing up. People are otherwise used to the chaos in the environment and have figured out that they need to operate through it and grow. The M&A environment is more robust. Look, the economy's strong and people are spending money. While I appreciate the impact AI is having on GDP, that can't be the only driver of the loan growth that we're seeing given the industry dispersion and the geographic dispersion.

Speaker #2: It's too broad-based to lay it all on AI. At the margin, it's impacting what we're doing. But as I said before, it's coming from kind of all sectors.

Speaker #2: I've heard different explanations as to why it's showing up. People are otherwise used to the chaos in the environment and have figured out that they need to operate through it and grow.

Speaker #2: The M&A environment is more robust. Look, the economy is strong and people are spending money. But it's not while I appreciate the impact AI is having on GDP that can't be the only driver of the loan growth that we're seeing given the industry dispersion and the geographic dispersion.

Speaker #5: Got it. Thank you.

Ebrahim Poonawala: Got it. Thank you.

Speaker #1: Thank you. Our next question is coming from Erica Najarian of UBS. Please go ahead.

Operator: Thank you. Our next question is coming from Erika Najarian of UBS. Please go ahead.

Speaker #6: Hi. Good morning. Rob, if I could just start with you, to your point, there's a lot of focus on net interest margin trajectory because of the funding dynamic.

Erika Najarian: Hi. Good morning. Rob, if I could just start with you. To your point, there's a lot of focus on net interest margin trajectory because of the funding dynamic.

Speaker #6: The street currently has an exit rate. Of 3.08% for fourth quarter of 2026. As we think about where the loan growth is coming from, does that is that too fast of a ramp relative to the other opportunities in terms of fixed asset repricing?

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

Erika Najarian: The Street currently has an exit rate of 3.08% for Q4 of 2026. As we think about where the loan growth is coming from, is that too fast of a ramp relative to the other opportunities in terms of fixed asset repricing and obviously maybe optimizing some of the wholesale funding that you put on this quarter to core funding?

Speaker #6: And obviously, maybe optimizing some of the wholesale funding that you put on this quarter to core funding.

Speaker #3: Yeah. So again, we don't give NIM guidance, nor do we manage to it. That said, I always give NIM guidance. So it's we're above three Erica.

Rob Q. Reilly: Yeah. Again, we don't give NIM guidance, nor do we manage to it. That said, I always give NIM guidance, we're above three, Erika. The precise level at the exit run rate.

Rob Reilly: Yeah. Again, we don't give NIM guidance, nor do we manage to it. That said, I always give NIM guidance, we're above three, Erika. The precise level at the exit run rate.

Speaker #3: The precise level, at the exit run rate.

William S. Demchak: Why do you care?

Bill Demchak: Why do you care?

Speaker #2: Why do you care?

Speaker #3: Is difficult.

Rob Q. Reilly: It is difficult.

Rob Reilly: It is difficult.

Speaker #2: But at the end of the day, we'll stick to our guide and we'll get there. But if we grow EPS and NII at 2% higher and have a lower NIM—or, to Rob's earlier point, why do you focus on it?

William S. Demchak: At the end of the day, we'll stick to our guide and we'll get there. If we grow EPS and NII at 2% higher and have a lower NIM, or to Rob's earlier point, why do you focus on it?

Bill Demchak: At the end of the day, we'll stick to our guide and we'll get there. If we grow EPS and NII at 2% higher and have a lower NIM, or to Rob's earlier point, why do you focus on it?

Speaker #6: So I personally don't care. I think that the NII dollars are more important, and I couldn't quote you what JPMorgan's NIM was for this quarter.

Erika Najarian: I personally don't care. I think that the NII dollars are more important, and I couldn't quote you what JPMorgan's NIM was for this Q. I think you're right. I'm just thinking about why the stock is down despite the beat and raise. That's why I'm trying to clarify that question.

Speaker #6: So I think you're right. I'm just thinking about why the stock is down despite the beat and raise, so that's why I'm trying to clarify that question.

Speaker #2: More sellers than buyers. Maybe the simplest thing to say across the space is that we have healthy asset growth through loan growth, which is coming from client acquisition and economic activity.

William S. Demchak: More sellers than buyers. Look, maybe the simplest thing to say across the space is we have healthy asset growth through loan growth, which is coming from client acquisition and economic activity. We have a great ability to fund it. We're growing our retail franchise. Retail deposits are increasing. Corporate deposits we didn't pay up for, and they went down in the Q, but we can make those whatever we want.

Bill Demchak: More sellers than buyers. Look, maybe the simplest thing to say across the space is we have healthy asset growth through loan growth, which is coming from client acquisition and economic activity. We have a great ability to fund it. We're growing our retail franchise. Retail deposits are increasing. Corporate deposits we didn't pay up for, and they went down in the Q, but we can make those whatever we want.

Speaker #2: And we have a great ability to fund it. We're growing our retail franchise, retail deposits are increasing, corporate deposits. We didn't pay up for, and they went down in the quarter, but we can make those whatever we want.

Speaker #3: Got it.

Rob Q. Reilly: I was comparing deposits.

Rob Reilly: I was comparing deposits.

William S. Demchak: We're very liquid today. It's not a huge focus inside the company, even though the mechanical outcome, as we've said since the beginning of the year, will push us over 3% by the end of the year.

Bill Demchak: We're very liquid today. It's not a huge focus inside the company, even though the mechanical outcome, as we've said since the beginning of the year, will push us over 3% by the end of the year.

Speaker #2: Very liquid today. And so it's not a huge focus inside the company, even though the mechanical outcome, as we've said since the beginning of the year, will push us over 3% by the end of the year.

Speaker #6: Good. To that end, just to take a step back, clearly the company is doing well. You've talked about organic NII dollar growth of about $1.2 billion.

Erika Najarian: To that end, just to take a step back, clearly the company is doing well. You've talked about organic NII dollar growth of about $1.2 billion this year. I guess as we think about your plan over the next few years, is that NII dollar growth replicable for a sustainable period of time? You printed a pretty nice ROTCE this quarter. I guess I'm wondering about the path to the 20% that you've mentioned previously.

Speaker #6: This year. And so, I guess as we think about what's your plan over the next few years, is that NII dollar growth replicable for a sustainable period of time? Additionally, you printed a pretty nice ROTCE this quarter.

Speaker #6: I guess I'm wondering about the path to the 20% that you've mentioned previously.

Speaker #3: Well, maybe I could jump in there a little bit. So we're not going to get into 27 guidance, but we're on record saying that we've got a lot of fixed rate asset repricing that goes well into 27 and beyond.

Rob Q. Reilly: Well, maybe I could jump in there a little bit. We're not going to get into 2027 guidance, we're on record saying that we've got a lot of fixed rate asset repricing that goes well into 2027 and beyond. That's constructive for NII in 2027. As we get closer to the end of the year, we'll sharpen that up for you. As far as the ROTCE goes, we're on record saying that we'd hit 18% annualized exit rate Q4 2026. We're sticking to that as well. We're tracking to that. We point out this quarter we're at 17.9%, so arguably we're in the vicinity.

Rob Reilly: Well, maybe I could jump in there a little bit. We're not going to get into 2027 guidance, we're on record saying that we've got a lot of fixed rate asset repricing that goes well into 2027 and beyond. That's constructive for NII in 2027. As we get closer to the end of the year, we'll sharpen that up for you. As far as the ROTCE goes, we're on record saying that we'd hit 18% annualized exit rate Q4 2026. We're sticking to that as well. We're tracking to that. We point out this quarter we're at 17.9%, so arguably we're in the vicinity.

Speaker #3: So that's constructive for NII in 27. And as we get closer to the end of the year, we'll sharpen that up for you. As far as the ROTCE goes, we're on record saying that we'd hit 18% annualized exit rate fourth quarter 26.

Speaker #3: We're sticking to that as well. And we're tracking to that. We point out this quarter we're at 17.9%. So arguably, we're in the vicinity.

Speaker #6: Okay. Thank you.

Erika Najarian: Okay. Thank you.

Speaker #3: Sure.

Rob Q. Reilly: Sure.

Rob Reilly: Sure.

Speaker #1: Thank you. Our next question is coming from Mike Mayo of Wells Fargo. Please go ahead.

Operator: Thank you. Our next question is coming from Mike Mayo of Wells Fargo. Please go ahead.

Speaker #7: Hi. Just a little bit more color on loan growth. Certainly, it's growing faster than you had thought. Can you talk about line utilization and the potential for loans to grow even faster, and how much you're assuming line utilization will increase as part of your higher guide?

Mike Mayo: Hi. Just a little bit more color on loan growth. Certainly, it's growing faster than you had thought. Can you talk about line utilization and the potential for loans to grow even faster and how much you're assuming line utilization will increase as part of your higher guide?

Speaker #3: Oh, yeah. Hey, Mike. It's Rob. So, as we pointed out in the second quarter, utilization has increased for us, and it's been pretty broad-based.

Rob Q. Reilly: Oh, yeah. Hey, Mike, it's Rob. As we pointed out in Q2, utilization has increased for us, and it's been pretty broad based. When we look into H2, we have continued loan growth. We have an expectation that the utilization would at least hold, maybe go up a little bit. That's all part of our thinking in terms of sort of moderating the loan growth to roughly GDP.

Rob Reilly: Oh, yeah. Hey, Mike, it's Rob. As we pointed out in Q2, utilization has increased for us, and it's been pretty broad based. When we look into H2, we have continued loan growth. We have an expectation that the utilization would at least hold, maybe go up a little bit. That's all part of our thinking in terms of sort of moderating the loan growth to roughly GDP.

Speaker #3: When we look into the second half, we have continued loan growth. We have an expectation that the utilization would at least hold, maybe go up a little bit.

Speaker #3: But that's all part of our thinking in terms of sort of moderating the loan growth to roughly GDP.

Speaker #7: Okay. And do you ever look, if you your stock price is outperformed this year, and you look at it, and it's caught a bid, but do you ever wonder about this party that's taking place elsewhere as it relates to AI and this CapEx AI super cycle and all the mega IPOs and mega financings and mega mergers that you're not part of?

Mike Mayo: Okay. Your stock price has outperformed this year when you look at it, and it's caught a bid. Do you ever wonder about this party that's taken place elsewhere as it relates to AI and this CapEx AI super cycle and all the mega IPOs and mega financings and mega mergers that you're not part of, and it's like, wow, we're not part of that, but we have our own area. What's the counterargument to that whole super cycle, or is there enough to go around and a trickle-down effect? Bill, if you have thoughts on that because you've been on both sides of that kind of Wall Street mega cycle.

Speaker #7: And it's like, wow, we're not part of that, but we have our own area. What's the counterargument to that whole super cycle, or is there enough to go around in a trickle-down effect?

Speaker #7: Bill, if you have thoughts on that, because you've been on both sides of that kind of Wall Street mega-cycle.

Speaker #2: Right, so many ways to answer that. I guess I'd offer the following. The first is, you just look at who we are and our growth rate—our EPS went up 25% year on year.

William S. Demchak: Many ways to answer that. I guess I'd offer the following. The first is you just look at who we are and our growth rate. Our EPS is what? Up 25% year on year.

Bill Demchak: Many ways to answer that. I guess I'd offer the following. The first is you just look at who we are and our growth rate. Our EPS is what? Up 25% year on year.

Speaker #2: We're growing single-double assets on every line item on revenue and growing customers in a space that does not focus heavily on capital markets. Yet our capital markets revenue is up 80% year on year.

Mike Mayo: The line

William S. Demchak: single double digits on every line item on revenue and growing customers in a space that does not focus heavily on capital markets. Our capital markets revenue is up 80% year on year. Are we in the middle of a deal that pays $100 million in fees? No, we aren't. Are we actually growing the core franchise at a pace, importantly at a pace that is less cyclical than the boom you're seeing in the super cycle right now? We are. It's an alternative to something that I think is more volatile, yet we're dropping real dollars to the bottom line in a healthy economy and gaining share as we do it.

Bill Demchak: single double digits on every line item on revenue and growing customers in a space that does not focus heavily on capital markets. Our capital markets revenue is up 80% year on year. Are we in the middle of a deal that pays $100 million in fees? No, we aren't. Are we actually growing the core franchise at a pace, importantly at a pace that is less cyclical than the boom you're seeing in the super cycle right now? We are. It's an alternative to something that I think is more volatile, yet we're dropping real dollars to the bottom line in a healthy economy and gaining share as we do it.

Speaker #2: So are we in the middle of a deal that pays 100 million in fees? No, we aren't. But are we actually growing the core franchise at a pace importantly at a pace that is less cyclical than the boom you're seeing in the super cycle right now?

Speaker #2: We are. So it's an alternative to something that I think is more volatile, yet we're dropping real dollars to the bottom line in a healthy economy and gaining share as we do it.

Speaker #7: Okay. Appreciate the answer.

Mike Mayo: Okay. Appreciate the answer.

Speaker #1: Thank you. Our next question is coming from Manon Goslea of Morgan Stanley. Please go ahead.

Operator: Thank you. Our next question is coming from Manan Gosalia of Morgan Stanley. Please go ahead.

Speaker #5: Hey, good morning. Rob, I wanted to check in on the trends in deposit costs. The five basis points improvement this quarter is pretty good given the environment.

Manan Gosalia: Hey, good morning. Rob, I wanted to check in on the trends on deposit costs. The 5 basis points improvement this quarter, it's pretty good given the environment. Have you noticed anything in terms of the trajectory as you went through the quarter? Just given the increased focus on deposit competition, I'm wondering if you're seeing anything, any underlying trend in either the overall portfolio or in specific geographies on deposit costs.

Speaker #5: Have you noticed anything in terms of the trajectory as you went through the quarter? Just given the increased focus on deposit competition, I'm wondering if you're seeing anything any underlying trend in either the overall portfolio or in specific geographies on deposit costs.

Speaker #3: Yeah. So we track that obviously pretty closely. We declined in terms of rate paid in the first quarter. Our outlook, we do have rate paid drifting back up to first quarter levels.

Rob Q. Reilly: Yeah. We track that obviously pretty closely. We declined in terms of rate paid in Q1. Our outlook, we do have rate paid drifting back up to Q1 levels. That's all part of our guidance. Mostly in terms of back book repricing and some of the things that we want to do with our deposits. That's the track that we're on.

Rob Reilly: Yeah. We track that obviously pretty closely. We declined in terms of rate paid in Q1. Our outlook, we do have rate paid drifting back up to Q1 levels. That's all part of our guidance. Mostly in terms of back book repricing and some of the things that we want to do with our deposits. That's the track that we're on.

Speaker #3: That's all part of our guidance. Mostly in terms of backbook repricing and some of the things that we want to do with our deposits.

Speaker #3: So that's the track that we're on.

Speaker #5: So I guess in terms of the competitive environment, I guess what do you think is driving that? Is that just the rate outlook and the fact that rate cuts have come out of the forward curve and maybe we have a rate hike or two coming up?

Manan Gosalia: I guess in terms of the competitive environment, I guess what do you think is driving that? Is that just the rate outlook and the fact that rate cuts have come out of the forward curve and maybe we have a rate hike or two coming up? Is that the only thing that's driving it? Is there just more competition overall? Can you talk a little bit more about that dynamic?

Speaker #5: Is that the only thing that's driving it? Is there just more competition overall? Can you talk a little bit more about that dynamic?

Speaker #2: I think a couple of things. What's happening—let's separate what's going on in Wealth and Corporate, and assume correctly that those are competitive yields, and you can kind of dial them up and down with rate.

William S. Demchak: I think a couple of things. What's happening, let's separate what's going on in wealth and corporate and assume correctly that those are competitive yields and you can kind of dial them up and down with rate. On the retail side, to the extent you are in effect a commercial bank without a retail franchise, things are really tight, right? That's where you're seeing CD rates posted, brokered CDs at really high rates. If you're growing and own a good retail franchise, it's less severe. If you look inside of what we've done in retail, the growth in DDA households, the increase in balance and the actual drop in rate quarter on quarter of a basis point, right?

Bill Demchak: I think a couple of things. What's happening, let's separate what's going on in wealth and corporate and assume correctly that those are competitive yields and you can kind of dial them up and down with rate. On the retail side, to the extent you are in effect a commercial bank without a retail franchise, things are really tight, right? That's where you're seeing CD rates posted, brokered CDs at really high rates. If you're growing and own a good retail franchise, it's less severe. If you look inside of what we've done in retail, the growth in DDA households, the increase in balance and the actual drop in rate quarter on quarter of a basis point, right?

Speaker #2: On the retail side, to the extent you are in effect a commercial bank without a retail franchise, things are really tight, right? That's where you're seeing CD rates posted brokered CDs at really high rates.

Speaker #2: If you’re growing and own a good retail franchise, it’s less severe. If you look inside of what we’ve done in retail—the growth in DDA households, the increase in balance, and the actual drop in rate quarter on quarter of a basis point, right?

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

William S. Demchak: Would kind of lead you to a conclusion that if your company's balanced here between retail and just commercial lending, you actually are in a pretty good spot. I think we are. I don't think everybody is. We've talked about it forever, but retail share is moving aggressively to the larger players, and it's making it more difficult to fund if you're smaller and don't focus on it.

Bill Demchak: Would kind of lead you to a conclusion that if your company's balanced here between retail and just commercial lending, you actually are in a pretty good spot. I think we are. I don't think everybody is. We've talked about it forever, but retail share is moving aggressively to the larger players, and it's making it more difficult to fund if you're smaller and don't focus on it.

Speaker #2: Would kind of lead you to a conclusion that if you're companies balanced here between retail and just commercial lending, you actually are in a pretty good spot.

Speaker #2: And I think we are. I don't think everybody is. And we've talked about it forever, but retail share is moving aggressively to the larger players.

Speaker #2: And it's making it more difficult to fund if you're smaller and don't focus on.

Rob Q. Reilly: Yeah, I think that's right. I think that's why even though we do expect some increase in our rate date, it's not dramatic.

Rob Reilly: Yeah, I think that's right. I think that's why even though we do expect some increase in our rate date, it's not dramatic.

Speaker #3: Yeah. That's right. And I think that's why even though we do expect some increase in our rate paid, it's not dramatic.

Speaker #5: Great. Thank you.

Manan Gosalia: Great. Thank you.

Speaker #1: Thank you. Our next question is coming from Matt O'Connor of Deutsche Bank. Please go ahead.

Operator: Thank you. Our next question is coming from Matt O'Connor of Deutsche Bank. Please go ahead.

Speaker #6: Good morning. I was hoping to circle back on the capital market revenues and I guess the fact that a lot of the revenues in the industry are being driven by some of these biggest bigger headline deals and yet your revenues were so strong.

Matt O'Connor: Good morning. I was hoping to circle back on the capital market revenues and I guess the fact that a lot of the revenues in the industry are being driven by some of these bigger headline deals, and yet your revenues were so strong. Just remind us a little bit about what the mix is, maybe kind of generally from a product point of view, size of customer, and then just also any comments on how well it's integrated with the rest of the firm as a feeder system. Thank you.

Speaker #6: Just remind us a little bit about what the mix is, maybe kind of generally from a product point of view, size of customer, and then just also any comments on how well it's integrated with the rest of the firm, as a feeder system.

Speaker #6: Thank you.

Speaker #3: Yeah. Sure, Matt. So our capital markets was up overall, but each category was up. Paris Williams, which is about 40% of our capital markets business, had a record quarter.

Rob Q. Reilly: Yeah. Sure, Matt. Our capital markets was up overall, but each category was up. Harris Williams, which is about 40% of our capital markets business had a record quarter. Beyond that, loan syndication, Solebury Capital, trading all up.

Rob Reilly: Yeah. Sure, Matt. Our capital markets was up overall, but each category was up. Harris Williams, which is about 40% of our capital markets business had a record quarter. Beyond that, loan syndication, Solebury Capital, trading all up.

Speaker #3: But beyond that, loan syndication sold very well. Trading was also up, broad-based.

William S. Demchak: Broad-based. Inside of there, you have derivatives and FX and our share of investment grade underwriting has gone way up. It's a healthy market. We participate in it.

Bill Demchak: Broad-based. Inside of there, you have derivatives and FX and our share of investment grade underwriting has gone way up. It's a healthy market. We participate in it.

Speaker #2: And inside of there, you have derivatives and FX and our share of investment grade underwriting has gone way up. It's a healthy market. We've participated in it.

Speaker #6: And then just in terms of the interconnectivity with the other businesses, like when we see CNI loan growth, is that driving some of the hedging here?

Matt O'Connor: Just in terms of the interconnectivity with the other businesses, like when we see C&I loan growth, is that driving some of the hedging here? Obviously that would make sense, but sometimes it's different targeted customer bases.

Speaker #6: I mean, obviously, that would make sense, but sometimes it's different targeted customer bases.

William S. Demchak: No, it's all correlated. You're exactly right. Loan growth gives rise to derivative activities. Oftentimes, if it is even in a middle market instance where there's going to be some loan and which is syndicated, and there might be some bonds associated with it. We're inside of that also. It is all correlated. It's on the back of the size of the financings that are going on inside of the US economy.

Bill Demchak: No, it's all correlated. You're exactly right. Loan growth gives rise to derivative activities. Oftentimes, if it is even in a middle market instance where there's going to be some loan and which is syndicated, and there might be some bonds associated with it. We're inside of that also. It is all correlated. It's on the back of the size of the financings that are going on inside of the US economy.

Speaker #2: It's all correlated. And you're exactly right. Loan growth gives rise to derivative activities. Oftentimes, if it is a even in a middle market instance where there's going to be some loan and there's going to be which is syndicated and there might be some bonds associated with it, we're inside of that also.

Speaker #2: So it is all correlated, and it's on the back of the size of the financings that are going on inside of the U.S. economy.

Speaker #6: Okay. Thank you.

Matt O'Connor: Okay. Thank you.

Speaker #1: Thank you. Our next question is coming from Gerard Cassidy of RBC Capital Markets. Please go ahead.

Operator: Thank you. Our next question is coming from Gerard Cassidy of RBC Capital Markets. Please go ahead.

Speaker #6: Hi, Bill. Hey, Rob.

Gerard Cassidy: Hi, Bill. Hey, Rob.

Speaker #5: Hey, Gerard.

Rob Q. Reilly: Hey, Gerard.

Rob Reilly: Hey, Gerard.

Speaker #6: Rob, you guys have been good over the last two or three years. And getting out in front of the commercial real estate story—obviously, there was a lot of fear following the pandemic about office space and the issues around it.

Gerard Cassidy: Rob, you guys have been good over the last two, three years in getting out in front of the commercial real estate story. Obviously, there was a lot of fear following the pandemic about office space and the issues around it. Your credit continues to improve in commercial real estate, and now you're growing commercial real estate mortgages. Can you share with us some color? What are you guys seeing there? What are the opportunities to grow that portfolio further?

Speaker #6: Your credit continues to improve in commercial real estate, and now you're growing commercial real estate mortgages. But can you share with us some color?

Speaker #6: What are you guys seeing there? What are the opportunities to grow that portfolio further?

Speaker #3: Yeah, Gerard, so you're spot on. We've worked through the commercial real estate office portfolio—still some work to do there, but we did release some reserves.

Rob Q. Reilly: Yeah, Gerard. You're spot on. We've worked through the commercial real estate office portfolio. Still some work to do there, but we did release some reserves as we worked through that book. As far as loan growth, we inflected in Q1 for the first time after I don't know how many quarters of declines. We see that continuing. In fact, the pipelines are forming in commercial real estate in a very constructive way across all the categories. Multifamily, industrial, and retail pipelines are all up. We would expect commercial real estate to be a bigger component of our loan growth going forward.

Rob Reilly: Yeah, Gerard. You're spot on. We've worked through the commercial real estate office portfolio. Still some work to do there, but we did release some reserves as we worked through that book. As far as loan growth, we inflected in Q1 for the first time after I don't know how many quarters of declines. We see that continuing. In fact, the pipelines are forming in commercial real estate in a very constructive way across all the categories. Multifamily, industrial, and retail pipelines are all up. We would expect commercial real estate to be a bigger component of our loan growth going forward.

Speaker #3: As we work through that book, as far as loan growth, we inflected in the first quarter for the first time after I don't know how many quarters of declines.

Speaker #3: And we see that continuing. In fact, the pipelines are forming in commercial real estate in a very constructive way across all the categories. So, multifamily, industrial, and retail pipelines are all up.

Speaker #3: So we would expect commercial real estate to be a bigger component of our loan growth going forward.

Speaker #6: Very good. Is there any data center construction loans, just out of curiosity? I assume not—or not many.

Gerard Cassidy: Very good. Is there any data center construction loans necessarily? I assume not, or not many.

Speaker #3: No, nothing. Nothing major. You may know in terms of any data centers. Nothing.

Rob Q. Reilly: Nothing major.

Rob Reilly: Nothing major.

Gerard Cassidy: Yeah.

Bill Demchak: Yeah.

Rob Q. Reilly: Bill, you may know in terms of any data centers.

Rob Reilly: Bill, you may know in terms of any data centers.

Speaker #2: We're involved in the space. We've been involved in project construction loans forever. It's out of the real estate space. So tangentially, but not with big risk and not big size.

William S. Demchak: We're involved in the space. We've been involved in project construction loans forever inside of the real estate space. Tangentially, but not with big risk and not big size.

Bill Demchak: We're involved in the space. We've been involved in project construction loans forever inside of the real estate space. Tangentially, but not with big risk and not big size.

Speaker #3: Yeah.

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

Speaker #6: Okay, good. And then there's a follow-up. Can you share with us—obviously, First Bank has closed, it's integrated—what were some of the positive surprises you guys discovered in that process?

Gerard Cassidy: Okay, good. As a follow-up, can you share with us, obviously, FirstBank is closed, it's integrated. What were some of the positive surprises you guys discovered in that process? What were some of the issues that maybe required extra effort that you may not have had anticipated?

Speaker #6: And then what were some of the issues that maybe required extra effort that you may have not had anticipated?

Speaker #2: So I don't know if there's surprises or not, but perhaps the biggest thing that we proved to ourselves was that we could do an acquisition of that size without slowing down at all the rest of the company in terms of technology deployment or product rollout.

William S. Demchak: I don't know if they're surprises or not, but perhaps the biggest thing that we proved to ourselves was that we could do an acquisition of that size without slowing down at all the rest of the company in terms of technology deployment or product rollout. You'll notice in the middle of this whole thing, we put out a new mobile banking platform. Right? Normally you do a deal, you've got to freeze stuff. We didn't have to freeze stuff. Second thing was the data factory that we built patented, in its first form with BBVA, worked even better inside of this integration. Third thing, I think we're the first bank, correct me where I go wrong here, Rob.

Bill Demchak: I don't know if they're surprises or not, but perhaps the biggest thing that we proved to ourselves was that we could do an acquisition of that size without slowing down at all the rest of the company in terms of technology deployment or product rollout. You'll notice in the middle of this whole thing, we put out a new mobile banking platform. Right? Normally you do a deal, you've got to freeze stuff. We didn't have to freeze stuff. Second thing was the data factory that we built patented, in its first form with BBVA, worked even better inside of this integration. Third thing, I think we're the first bank, correct me where I go wrong here, Rob.

Speaker #2: We put out a new mobile banking platform, right? So normally, you do a deal, you get free stuff. We didn't have the free stuff.

Speaker #2: Second thing was the data factory that we built had to in its first form would be BBA for even better inside of this integration.

Speaker #2: Third thing, I think we're the first bank correct me where I go wrong here, Rob, but ever to do the early access where basically people could log in and credential before you did the actual account switch.

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

William S. Demchak: Ever to do the early access-

Bill Demchak: Ever to do the early access-

Rob Q. Reilly: Yeah

Rob Reilly: Yeah

William S. Demchak: where basically people could log in and credential before you did the actual account switch. All of that was great. What we underestimated on this one was the, I'm just going to call it a lack of digital awareness on a relative basis to our existing client base that maybe FirstBank customers had. We had a lot of branch traffic that was there to activate a debit card or to download a mobile app, and things that we otherwise might have expected would happen outside of the branch caused traffic in the branch that we underestimated and caused some confusion. We're going to have to improve on that going forward. All in all, mechanically, and the conversion is so much more than the-

Bill Demchak: where basically people could log in and credential before you did the actual account switch. All of that was great. What we underestimated on this one was the, I'm just going to call it a lack of digital awareness on a relative basis to our existing client base that maybe FirstBank customers had. We had a lot of branch traffic that was there to activate a debit card or to download a mobile app, and things that we otherwise might have expected would happen outside of the branch caused traffic in the branch that we underestimated and caused some confusion. We're going to have to improve on that going forward. All in all, mechanically, and the conversion is so much more than the-

Speaker #2: So all of that was great. What we underestimated on this one was the I'm just going to call it lack of digital awareness on a relative basis to our existing client base that maybe First Bank customers had.

Speaker #2: So we had a lot of branch traffic that was there to activate a debit card or to download a mobile app and things that we otherwise might have expected would happen outside of the branch caused traffic in the branch that we underestimated.

Speaker #2: And caused some confusion and we're going to have to approve on that going forward. But all in all, mechanically, and the conversion is so much more than the mechanics.

Rob Q. Reilly: Yeah

Rob Reilly: Yeah

Speaker #2: But mechanically, it went really well. Super proud of the team of people that got this done, both on the PNC side and, fortunately, on the First Bank side.

William S. Demchak: Mechanically, it went really well. Super proud of the team of people that got this done, both on the PNC side, and importantly on the FirstBank side. Super proud and thankful for the employees inside the FirstBank branches that went through a couple of days of real heavy volume.

Bill Demchak: Mechanically, it went really well. Super proud of the team of people that got this done, both on the PNC side, and importantly on the FirstBank side. Super proud and thankful for the employees inside the FirstBank branches that went through a couple of days of real heavy volume.

Speaker #2: Super proud and thankful for the employees inside the First Bank branches that went through a couple of days of real heavy volume.

Speaker #3: Heavy lifting, yeah. The thing to add to that, Gerard, too, just in terms of the financials—everything that we expected in terms of the price we paid, the return that we would have, the accretion—it's all there.

Rob Q. Reilly: Heavy lifting, yeah.

Rob Reilly: Heavy lifting, yeah.

William S. Demchak: Yeah.

Bill Demchak: Yeah.

Rob Q. Reilly: The thing to add to that, Gerard, too, just in terms of the financials. Everything that we expected in terms of the price we paid-

Rob Reilly: The thing to add to that, Gerard, too, just in terms of the financials. Everything that we expected in terms of the price we paid-

William S. Demchak: Sure

Bill Demchak: Sure

Rob Q. Reilly: the return that we would have, the accretion, it's all there and then some. From a financial perspective, we're in a really good place.

Rob Reilly: the return that we would have, the accretion, it's all there and then some. From a financial perspective, we're in a really good place.

Speaker #3: And then some. So from a financial perspective, we're in a really good place.

Speaker #6: Very good. Thank you, guys.

Gerard Cassidy: Very good. Thank you, guys.

William S. Demchak: Yeah.

Bill Demchak: Yeah.

Speaker #1: Thank you. The next question is coming from Ken Ouston of Autonomous Research. Please go ahead.

Operator: Thank you. The next question is coming from Ken Usdin of Autonomous Research. Please go ahead.

Ken Usdin: Hey, guys. Rob, I know you touched on the capital market strength before. We see, obviously, the fee guide that you gave, that would assume that that's probably coming off a little bit. Bill, you mentioned the super cycle, though. I'm just wondering, well, Rob, if you could kind of walk us through just your expectations for the fee areas that you usually give us, which is a good run through. Just how strong do you think this capital market flow-through could be? Did you see any pull forward into this really strong Q2 result from a closings perspective? Thanks.

Speaker #5: Hey, guys. Rob, I know you touched on the capital market strength before, and we see, obviously, the fee guide that you gave. That would assume that that's probably coming off a little bit.

Speaker #5: Bill, you mentioned the supercycle, though, and I'm just wondering—Rob, if you could kind of walk us through your expectations for the fee areas that you usually give us, which is a good run-through.

Speaker #5: And then, just how strong do you think this capital markets flow-through could be? And did you see any pull-forward into this really strong second quarter result from a closings perspective?

Speaker #5: Thanks.

Speaker #3: Well, I made it—feel I made to go first with the... Well, then that sort of tells the story, too. So for the third quarter, Ken, in terms of the fee sort of component breakdowns, we do feel like we pulled some of the capital markets forward into the second quarter.

Rob Q. Reilly: You want me to go first with the?

Rob Reilly: You want me to go first with the?

William S. Demchak: Yeah, go ahead.

Bill Demchak: Yeah, go ahead.

Rob Q. Reilly: Well, that sort of tells the story too. For the Q3, Ken, in terms of the fee component breakdowns, we do feel like we pulled some of the Capital Markets forward into the Q2, so the Q2 was elevated. When you look at the Q3 guide for the fee breakdown, it's largely around the Capital Markets that we think will probably be down about 20% quarter-over-quarter. The rest of the fee categories are sort of flattish to up, depending on what happens with market conditions. That's the big driver to get us down the 5.5% that we talked about.

Rob Reilly: Well, that sort of tells the story too. For the Q3, Ken, in terms of the fee component breakdowns, we do feel like we pulled some of the Capital Markets forward into the Q2, so the Q2 was elevated. When you look at the Q3 guide for the fee breakdown, it's largely around the Capital Markets that we think will probably be down about 20% quarter-over-quarter. The rest of the fee categories are sort of flattish to up, depending on what happens with market conditions. That's the big driver to get us down the 5.5% that we talked about.

Speaker #3: So the second quarter was elevated. So when you look at the third quarter guide for the fee breakdown, it's largely around the capital markets that we think will probably be down about 20% quarter over quarter.

Speaker #3: The rest of the fee categories are sort of flattished up depending on sort of what happens with market conditions. But that's the big driver to get it to down the 5.5% that we talked about.

Speaker #2: And just an aside, I mean, it's like you come off a record quarter, and everybody looks at the activity and says, "Oh, we can't do that again." So we knocked down our estimates going into the third quarter.

William S. Demchak: Just an aside, you come off a record quarter, and everybody looks at the activity and says, Oh, we can't do that again.

Bill Demchak: Just an aside, you come off a record quarter, and everybody looks at the activity and says, Oh, we can't do that again.

Rob Q. Reilly: Right.

Rob Reilly: Right.

William S. Demchak: We knock down our estimates going into the Q3. It's a handful of big deals that show up

Bill Demchak: We knock down our estimates going into the Q3. It's a handful of big deals that show up

Speaker #2: It's a handful of big deals that show up that cause a difference.

Rob Q. Reilly: Yeah

Rob Reilly: Yeah

William S. Demchak: that cause a difference

Bill Demchak: that cause a difference

Speaker #3: Yeah. No, that's right.

Rob Q. Reilly: That's right

Rob Reilly: That's right

William S. Demchak: inside of the size of things that are getting done in this market. That's our best guess for now.

Bill Demchak: inside of the size of things that are getting done in this market. That's our best guess for now.

Speaker #2: Inside of the size of things that are getting done in this market, that's our best guess for now. And—

Speaker #3: Well, for the third quarter, but then for the full year. So if you just sort of dial it back for the full year, asset management's having a great year with the equity markets up.

Rob Q. Reilly: Well, for Q3. For the full year, if you just dial it back for the full year, asset management's having a great year.

Rob Reilly: Well, for Q3. For the full year, if you just dial it back for the full year, asset management's having a great year.

William S. Demchak: Yeah

Bill Demchak: Yeah

Rob Q. Reilly: with the equity markets up. They're up high single digits. Capital markets for the full year will be up close to 25% to 30% year over year.

Rob Reilly: with the equity markets up. They're up high single digits. Capital markets for the full year will be up close to 25% to 30% year over year.

Speaker #3: So they're up high, single digits. Capital markets for the full year will be up close to 25% to 30% year over year. That's in our guidance.

William S. Demchak: Yeah.

Bill Demchak: Yeah.

Rob Q. Reilly: That's in our guidance. Card and cash management, mid to high single digits. Lending and deposit services, mid single digits. Mortgage, just to round it out, probably flattish to down, depending on hedge gains and how that works out.

Rob Reilly: That's in our guidance. Card and cash management, mid to high single digits. Lending and deposit services, mid single digits. Mortgage, just to round it out, probably flattish to down, depending on hedge gains and how that works out.

Speaker #3: Card and cash management, mid to high single digits. Lending and deposit services, mid single digits. And then mortgage, just around it out, probably flattish to down depending on sort of hedge gains and sort of how that works out.

Speaker #3: So the guide on capital

William S. Demchak: The guide on capital markets, it's volatile.

Bill Demchak: The guide on capital markets, it's volatile.

Speaker #2: Capital markets, I mean, just to be—it's evolved.

Speaker #3: That's right, especially in a 90-day period. Yeah.

Rob Q. Reilly: That's right.

Rob Reilly: That's right.

William S. Demchak: And so we-

Bill Demchak: And so we-

Rob Q. Reilly: Especially in a 90-day period.

Rob Reilly: Especially in a 90-day period.

William S. Demchak: Yeah.

Bill Demchak: Yeah.

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

Speaker #2: Yeah. But we're.

William S. Demchak: Yeah.

Bill Demchak: Yeah.

Speaker #5: Yeah, no, totally. Well, that's—sorry?

Ken Usdin: Yes. No, can we address that?

William S. Demchak: Sorry? I just said we're in the right places. We're in the right deals. Right? We're winning business. It's kind of a function of what's actually happening in the broader market.

Bill Demchak: Sorry? I just said we're in the right places. We're in the right deals. Right? We're winning business. It's kind of a function of what's actually happening in the broader market.

Speaker #2: I just said we're in the right places. We're in the right deals, right? We're winning business. So it's kind of a function of what's actually happening in the broader market.

Speaker #5: Yeah, exactly. That's why I'm pointing to that point, which is that it just seems like the potential for this type of result to continue seems pretty good.

Ken Usdin: Yeah, exactly. That's why I'm pointing to that point, which is that it just seems like the potential for this type of result to continue seems pretty good. Thanks for that color. Thanks, guys.

Speaker #5: So, thanks for that color. Thanks, guys.

Speaker #3: Sure.

William S. Demchak: Sure.

Bill Demchak: Sure.

Speaker #1: Thank you. The next question is coming from David Schifferini of Jefferies. Please go ahead.

Operator: Thank you. The next question is coming from David Chiaverini of Jefferies. Please go ahead.

Speaker #3: Hi, thanks for taking the questions. Can you give us an update on sensitivity to rates on NII? If we get a hike or two, what would that impact be?

David Chiaverini: Hi. Thanks for taking the questions. Can you give us an update on sensitivity to rates on NII? If we get a hike or two, what would that impact be?

Speaker #3: Very small in '26. And we've said it for a while: we're sort of in a neutral position to rates, so 25 basis points up or down.

Rob Q. Reilly: Very small in 2026. We've said it for a while. We're sort of in a neutral position to rates, 25 basis points up or down. Very little impact to 2026.

Rob Reilly: Very small in 2026. We've said it for a while. We're sort of in a neutral position to rates, 25 basis points up or down. Very little impact to 2026.

Speaker #3: Very little impact to '26.

William S. Demchak: Yeah. As you go forward, it becomes a function of how the rest of the curve reacts were they to raise rates. Within the range that we'd otherwise contemplate, there's still a healthy pickup next year just because of the continual repricing.

Bill Demchak: Yeah. As you go forward, it becomes a function of how the rest of the curve reacts were they to raise rates. Within the range that we'd otherwise contemplate, there's still a healthy pickup next year just because of the continual repricing.

Speaker #5: It should go forward.

Speaker #2: It becomes a function of how the rest of the curve reacts, were they to raise rates. But within the range that we'd otherwise contemplate, there's still a healthy pickup next year, just because of the continual repricing.

Speaker #3: Got it. Thanks for that. And shifting over to capital, CET1 at 9.9%. You mentioned the buyback in the third quarter should be similar to the second quarter level.

David Chiaverini: Got it. Thanks for that. Shifting over to capital CET1 at 9.9%, you mentioned the buyback in Q3 should be similar to the Q2 level. Is this 9.9% kind of the new comfort range that you guys would point to?

Speaker #3: Is this 9.9% kind of the new or comfort range that you guys would point to? I mean, we've said 10%. We were actually very, very close to rounding to 10%, but we rounded down to 9.9%.

Rob Q. Reilly: Yeah, I think so. We've said 10%. We were actually very close to rounding to 10%, but we rounded down to 9.9%. Our operating target is around 10%, and that's where we expect to be.

Rob Reilly: Yeah, I think so. We've said 10%. We were actually very close to rounding to 10%, but we rounded down to 9.9%. Our operating target is around 10%, and that's where we expect to be.

Speaker #3: But our operating target is around 10%, and that's where we expect to be. Thanks very much.

David Chiaverini: Thanks very much.

Speaker #5: Sure.

William S. Demchak: Sure.

Bill Demchak: Sure.

Speaker #1: Thank you. The next question is coming from Saul Martinez of HSBC. Please go ahead.

Operator: Thank you. The next question is coming from Saul Martinez of HSBC. Please go ahead.

Speaker #6: Hi. Good morning. Thanks for taking my question. Back on loan growth, is there I mean, do you guys feel like there's an element of conservatism being built into the second half guidance of roughly in line with nominal GDP growth?

Saul Martinez: Hi. Good morning. Thanks for taking my question. Back on loan growth. Do you guys feel like there's an element of conservatism being built into the H2 guidance of roughly in line with nominal GDP growth? I get the comments about pull forward, everything else you are talking about seems pretty constructive. The utilization rates kind of ticking higher, economy doing well, CRE returning to growth, M&A financing. Is the bias if you're going to be wrong more to the upside? Just curious if you think that's a logical conclusion.

Speaker #6: I get the comments about pull forward, but everything else you're talking about seems pretty constructive—the utilization rates are kind of ticking higher, and the economy is doing well.

Speaker #6: DRE returning to growth. M&A financing. Is there is a bias if you're going to be wrong more to the upside, just curious how if that's you think that's a logical conclusion?

Speaker #3: Comment. Why, I'd say, hey, regard your guide, Rob. Yeah, I'm just saying our guide is our guide, and that's what we think. We've guided to lower numbers, then they come in higher.

William S. Demchak: Comment.

Bill Demchak: Comment.

Rob Q. Reilly: Got it.

Rob Reilly: Got it.

William S. Demchak: Re-guide your guide, Rob.

Bill Demchak: Re-guide your guide, Rob.

Rob Q. Reilly: Yeah, I'm just saying our guide is our guide. That's what we think. We've guided to lower numbers. They come in higher. We've guided to higher numbers. They've come into lower. The guide's the guide.

Rob Reilly: Yeah, I'm just saying our guide is our guide. That's what we think. We've guided to lower numbers. They come in higher. We've guided to higher numbers. They've come into lower. The guide's the guide.

Speaker #3: We've guided to higher numbers that come into lower. So the guide's the guide.

Speaker #2: I think that the only thing I'm comfortable in saying is if there is loan growth across the economy, we will get more than our fair share simply because of the newer markets we're operating in and the share growth.

William S. Demchak: I think that the only thing I'm comfortable in saying is if there is loan growth across the economy, we will get more than our fair share simply because of the newer markets we're operating in and the share growth. It's become so hard to predict what's happening with loan growth. We kind of pick a real simple base case and hopefully outperform.

Bill Demchak: I think that the only thing I'm comfortable in saying is if there is loan growth across the economy, we will get more than our fair share simply because of the newer markets we're operating in and the share growth. It's become so hard to predict what's happening with loan growth. We kind of pick a real simple base case and hopefully outperform.

Speaker #2: But it's become so hard to predict what's happening with loan growth. We kind of pick a real simple base case and hopefully outperform.

Speaker #6: Got it. Okay. Fair enough. And then, I mean, nobody asked about credit anymore. For good reason, we've obviously it's been really strong. I mean, are there I mean, are there areas that you are monitoring that where you think there are vulnerabilities and even if it's not a big part of your portfolio, where do you think they're either from a sector standpoint, product, income categories, what do you where do you feel like there is more fragility?

Saul Martinez: Got it. Okay. Fair enough. Nobody asks about credit anymore, for good reason. Obviously, it's been really strong. Are there areas that you are monitoring where you think there are vulnerabilities and even if it's not a big part of your portfolio, where do you think they're either from a sector standpoint, product, income categories, where do you feel like there is more fragility?

Speaker #3: I'd answer that. I mean, overall, credit quality is very good on both the consumer side and the commercial side, and we don't see any big pockets forming.

Rob Q. Reilly: I'd integrate. Overall, credit quality is very good on both the consumer side and the commercial side. We don't see any big pockets forming. We follow sort of the pressures in the healthcare industry. There's pressures in the distillery sector. There's some pressures in transportation around fuel costs, those sorts of things. All the things that you read about and are well aware. I wouldn't say there's any big pocket or anything that particularly worries beyond that.

Rob Reilly: I'd integrate. Overall, credit quality is very good on both the consumer side and the commercial side. We don't see any big pockets forming. We follow sort of the pressures in the healthcare industry. There's pressures in the distillery sector. There's some pressures in transportation around fuel costs, those sorts of things. All the things that you read about and are well aware. I wouldn't say there's any big pocket or anything that particularly worries beyond that.

Speaker #3: We follow sort of the pressures in the healthcare industry. There's pressures in the distillery sector. There's some pressures in transportation around fuel costs, those sorts of things.

Speaker #3: All the things that you read about. And are well aware but I wouldn't say there's any big pocket or anything that's particularly worrisome beyond that.

Speaker #6: Okay. Got it. Thank you.

Saul Martinez: Okay. Got it. Thank you.

Speaker #1: Thank you. Our next question is coming from Chris McGrady of KBW. Please go ahead.

Operator: Thank you. Our next question is coming from Chris McGratty of KBW. Please go ahead.

Speaker #5: Oh, great, thanks. Hope I didn't miss it, but any comment on credit spreads over the past three months with improving loan growth? Thank you.

Chris McGratty: Oh, great. Thanks. Hope I didn't miss it, any comment on credit spreads over the past 3 months with improving loan growth? Thank you.

Speaker #3: Sorry, I didn't catch that.

Rob Q. Reilly: Sorry, I didn't catch that.

Rob Reilly: Sorry, I didn't catch that.

William S. Demchak: Credit spreads.

Bill Demchak: Credit spreads.

Speaker #2: Credit spreads.

Chris McGratty: Oh, sorry, Rob.

Speaker #5: Oh, sorry, Rob.

Rob Q. Reilly: Credit-

Rob Reilly: Credit-

Speaker #3: Credit.

Chris McGratty: Just a comment on credit spreads.

Speaker #2: Just a comment on credit spreads.

Rob Q. Reilly: I hate my trends in credit spreads. No, we're not seeing a lot of competitive pressure on the spreads. We are seeing some spread change relative to the mix change of higher credit quality, lower spread loans into our portfolio. Apples to apples, spreads are pretty similar quarter over quarter.

Bill Demchak: I hate my trends in credit spreads.

Speaker #3: No, we're not seeing a lot of competitive pressure on the spreads. We are seeing some spread change relative to the mix change.

Rob Reilly: No, we're not seeing a lot of competitive pressure on the spreads. We are seeing some spread change relative to the mix change of higher credit quality, lower spread loans into our portfolio. Apples to apples, spreads are pretty similar quarter over quarter.

Speaker #3: Of higher credit quality lower spread loans into our portfolio. But apples to apples, spreads are pretty similar quarter over quarter.

Speaker #5: Thank you.

Chris McGratty: Thank you.

Speaker #1: Once again, that is STAR 1. If you would like to register a question at this time. Our next question is a follow-up coming from Erica Najarian of UBS.

Operator: Once again, that is star one if you would like to register a question at this time. Our next question is a follow-up coming from Erika Najarian of UBS. Please go ahead.

Speaker #1: Please go ahead.

Speaker #7: I promise this isn't about NIM or loan growth. Quick follow-up.

Erika Najarian: I promise this isn't about NIM or loan growth. Quick follow-up.

William S. Demchak: I thought you were going to say you're talking about NIM, so

Bill Demchak: [inaudible]

Speaker #5: Up now. So

Speaker #7: Well, it's good. It's good. There was a news article last week about banks, including PNC, potentially being interested in a debit card network. And I'm just wondering—of course, you're not going to comment on any live deals—but what a debit card network, or how a debit card network, could be beneficial to PNC.

Erika Najarian: Well, it's good. There was a news article last week about banks, including PNC, potentially being interested in a debit card network, I'm just wondering, of course, you're not going to comment on any live deals, what a debit card network or how a debit card network could be beneficial to PNC? Do you have any sort of notion on how difficult it is to convert a PIN network to signature?

Speaker #7: And do you have any sort of notion on how difficult it is to convert a PIN network to signature?

William S. Demchak: We aren't going to comment.

Bill Demchak: We aren't going to comment.

Speaker #2: We aren't going to comment on that particular deal. I think it's a safe assumption, hypothetically, that the work set associated with a conversion like that would be pretty material.

Rob Q. Reilly: Yeah.

Rob Reilly: Yeah.

William S. Demchak: In particular deal, I think it's a safe assumption, hypothetically, that the work set associated with a conversion like that would be pretty material. Just leave it at that.

Bill Demchak: In particular deal, I think it's a safe assumption, hypothetically, that the work set associated with a conversion like that would be pretty material. Just leave it at that.

Speaker #2: Just leave it at that.

Speaker #7: Got it. Thank you.

Erika Najarian: Got it. Thank you.

Speaker #1: Thank you. At this time, I would like to turn the floor back over to Mr. Gill for closing comments.

Operator: Thank you. At this time, I would like to turn the floor back over to Mr. Gill for closing comments.

Speaker #6: Okay, well, thank you all for joining our call this morning. Please feel free to reach out to the IR team if you have any further questions.

Bryan Gill: Well, thank you all for joining our call this morning, and please feel free to reach out to the IR team if you have any further questions. Thanks.

Speaker #6: Thanks.

Speaker #2: Thanks, everybody.

William S. Demchak: Thanks, everybody.

Bill Demchak: Thanks, everybody.

Speaker #3: Thank you.

Rob Q. Reilly: Thank you.

Rob Reilly: Thank you.

Speaker #1: Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines or log off the webcast at this time. Thank you for your participation.

Operator: Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines or log off the webcast at this time. Thank you for your participation.

Q2 2026 PNC Financial Services Group Inc Earnings Call

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