Morningstar

PNC Earnings: 2026 Net Interest Income Guidance of 14% Growth Looks Particularly Strong

We expect to increase our $191 fair value estimate for PNC stock.

PNC bank logo sign.
Beata Zawrzel/NurPhoto via Getty
Securities in This Article
PNC Financial Services Group Inc
(PNC)

Key Morningstar Metrics for PNC Financial Services Group

What We Thought of PNC Financial Services Group’s Earnings

PNC Financial Services Group PNC finished 2025 strong, with fourth-quarter earnings growing 25% year over year. The bank delivered an impressive positive operating leverage of 500 basis points for 2025. It also closed the FirstBank acquisition on Jan. 5. Shares traded up around 4% following the earnings release.

Why it matters: The bank’s 2026 guidance is particularly strong in net interest income growth of 14%. Excluding the contribution from the FirstBank acquisition, legacy PNC’s NII is expected to grow by 7.5%-8.0%, which is one of the highest among the US banks that have reported in this earnings cycle, including money center banks.

  • Combined with the 8% average loan growth guidance in 2026, this implies more net interest margin expansion in 2026, which is better than our previous expectation, mostly driven by a fixed-rate asset repricing benefit.
  • We are also glad to see the 6% increase in fee income guidance for 2026, which is on top of a strong growth of 8% in 2025. We note the contribution from FirstBank is relatively small at around 1%. Capital market and advisory fees grew by 24% in 2025, and management expects high-single-digit growth for 2026.

The bottom line: As we incorporate the latest results and updated guidance, we expect to increase our $191 fair value estimate for narrow-moat-rated PNC by high single digits from stronger near-term earnings growth. We view shares as slightly overvalued after the contemplated update in our valuation.

Coming up: The bank is expected to incur $325 million in one-time integration charges for the FirstBank acquisition in 2026, in addition to the 7% expense growth guidance. PNC expects around $1 in EPS accretion in 2027 from FirstBank.

  • Management notes that additional upside could come from revenue synergies. While we think revenue synergies are notoriously hard to achieve, we are impressed by PNC’s past success in increasing treasury management fee income from legacy BBVA USA customers.

Editor’s Note: This analysis was originally published as a stock note by Morningstar Equity Research.

The author or authors do not own shares in any securities mentioned in this article. Find out about Morningstar’s editorial policies.

Sponsor Center