By PYMNTS | October 18, 2026
Several of America’s regional banks posted robust third-quarter earnings last week amid strong commercial loan demand.
And as Reuters reported Friday (Oct. 16), these earnings add to indications that the U.S. economy is still resilient even in the face of increasing borrowing costs.
People have accepted global uncertainty as a new reality and are moving forward with operations,” PNC Financial CEO William Demchak said.
“The clouds are as dark as they ever were, but the economy’s still strong. People are investing into it,” he added.
According to Reuters, PNC was the leader in regional loan growth for the quarter at 14.2%, followed by U.S. Bancorp at 8%, M&T at 5.5% and Citizens Financial at 5.29%.
The report added that this healthy borrowing activity defied expectations of inflation driven by the Iran war and the Federal Reserve’s September interest rate increase could cool corporate capital expenditures and weaken the appetite for borrowing.
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But regional banking executives said loan pipelines were still strong and they had not noticed any slowing in demand so far. They are also trying to gauge how much of the loan growth was tied to huge expenditures related to artificial intelligence, Reuters said.
“This whole AI ecosystem build-out is kind of full-on. It’s a very strong dynamic, and that kind of cascades into a lot of the supply ecosystem,” Citizens CEO Bruce Van Saun said.
“Even with higher rates, the kind of desire to get the compute power in place, the players aren’t really batting an eyelash,” he added.
In related news, Regions Bank Chief Financial Officer Anil Chadha said last week that the lender expects cybersecurity costs to increase its adjusted noninterest expense by between 1.5% and 3.5% for full-year 2026.
The bank’s technology and infrastructure investment drove a 6% increase in its equipment and software expense, management said.
“That is just investment in cybersecurity,” Chadha said of the adjusted noninterest expense numbers. “So, think about frontier AI and investments that we are making to ensure we have a trustful platform for our customers.”
Asked by an analyst about banks shifting tech investment toward cybersecurity due to the threat posed by AI, Chadha said such spending has always been crucial but is increasingly important now. This involves “meaningful expense,” both new and refocused, the finance chief added.
“We do expect that to continue through time,” Chadha said. “It is the new reality that we live in today. We are definitely front and center with that.”