Two profitable banks, two different signals
PNC Financial Services Group earned $2.097 billion in the third quarter of 2026, up from $1.822 billion a year earlier. M&T Bank reported $775 million, below its $792 million result in the corresponding 2025 quarter. Both banks disclosed growing average loans. That combination is more informative than the claim that regional lenders are uniformly enjoying an earnings boom. Balance-sheet expansion, pricing and expenses are moving at different speeds.
PNC reported diluted earnings of $4.97 per share, or $5.09 on its adjusted measure. M&T reported $5.04 of diluted earnings per common share. Those figures are not directly comparable without accounting for share counts, adjustments and the institutions' different business mixes. The more useful investor question is how incremental lending converts into net interest income after deposit funding and credit losses.
PNC's commercial lending is growing, but its acquisition matters
PNC's average loans rose $9.0 billion, or 2%, from the preceding quarter to $372.2 billion. Within that total, average commercial loans grew $10.4 billion, or 4%, while consumer loans fell $1.4 billion. The bank attributed commercial growth to new production and greater use of existing commitments. Period-end loans reached $378.8 billion, a different measurement from the quarterly average.
The FirstBank acquisition contributed to year-on-year comparisons. PNC said its net interest income rose 15% from a year earlier to $4.206 billion, reflecting commercial lending, the acquisition and lower funding costs. Investors should not assign the entire annual increase to organic demand. Acquisition-adjusted loan growth and revenue per dollar of assets are needed to judge whether the underlying franchise is improving.
M&T's credit and income lines tell a more cautious story
M&T's average loans increased $2.6 billion sequentially, including $1.6 billion in commercial real estate, $634 million in consumer loans and $367 million in residential real estate. Net interest income was essentially unchanged at $1.793 billion compared with $1.792 billion in the second quarter. Loan expansion therefore did not translate into a meaningful sequential increase in that income line.
The provision for credit losses rose to $135 million from $120 million in the preceding quarter, while the allowance for loan losses fell to 1.51% of total loans. Neither number on its own establishes deteriorating credit quality. Provisions are an accounting estimate for expected losses; actual charge-offs, non-performing balances, collateral values and sector concentration are separate evidence.
The funding and capital arithmetic
PNC's net interest margin was 2.94%, down two basis points from the preceding quarter but above 2.79% a year earlier. It estimated a common equity tier 1 ratio of 9.8%, compared with 9.9% at June's end. M&T estimated a 10.16% CET1 ratio. Those ratios use bank-specific risk-weighted assets and are not simple percentages of loans or deposits.
Both banks returned capital through dividends and repurchases. PNC reported $1.4 billion returned during the quarter; M&T repurchased $323 million of stock. Shareholder distributions are relevant only alongside organic capital generation and the risk associated with new lending. A rising loan book can support future earnings but also increases the importance of reserves if economic conditions turn.
What regional bank shares are actually pricing
The October results suggest that US business borrowers have not broadly abandoned credit, despite higher energy prices and interest-rate uncertainty. Reuters found similar lending resilience across several regional banks. That is a useful observation, not proof that every sector is expanding or that AI investment is the sole driver. PNC itself described exposures across energy, transport and other activities.
An investor comparing regional bank shares should monitor organic average commercial loans, net interest margin, non-performing assets, commercial real estate concentration and expense growth over several quarters. A bank can grow faster while producing weaker risk-adjusted returns. The next set of earnings will show whether stronger volumes survive the funding and credit costs required to support them.