EX-99.2 3 q22023financialsupplement.htm EX-99.2 Document


Exhibit 99.2

pncbanklogoa18a.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2023
(UNAUDITED)

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 18, 2023. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

BUSINESS
PNC is one of the largest diversified financial services companies in the United States (U.S.) and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally. PNC's retail branch network is located coast-to-coast. PNC also has strategic international offices in four countries outside the U.S.

PRESENTATION OF NONINTEREST INCOME
In the fourth quarter of 2022, PNC updated the name of the noninterest income line item “Capital markets related” to “Capital markets and advisory.” This update did not impact the components of the category. All periods presented herein reflect these changes. For a description of each updated noninterest income revenue stream, see Note 1 Accounting Policies in our 2022 Form 10-K.



THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Second Quarter 2023 Financial Supplement (Unaudited)
Financial Supplement Table Reference
TableDescriptionPage
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
14-15
17
18


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
In millions, except per share data2023202320222022202220232022
Interest Income
Loans$4,523 $4,258 $3,860 $3,138 $2,504 $8,781 $4,797 
Investment securities883 885 836 715 631 1,768 1,175 
Other538 516 413 279 146 1,054 223 
Total interest income5,944 5,659 5,109 4,132 3,281 11,603 6,195 
Interest Expense
Deposits1,531 1,291 812 340 88 2,822 115 
Borrowed funds903 783 613 317 142 1,686 225 
Total interest expense2,434 2,074 1,425 657 230 4,508 340 
Net interest income3,510 3,585 3,684 3,475 3,051 7,095 5,855 
Noninterest Income
Asset management and brokerage348 356 345 357 365 704 742 
Capital markets and advisory213 262 336 299 409 475 661 
Card and cash management697 659 671 671 671 1,356 1,291 
Lending and deposit services298 306 296 287 282 604 551 
Residential and commercial mortgage98 177 184 143 161 275 320 
Other (a) (b)129 258 247 317 177 387 388 
Total noninterest income1,783 2,018 2,079 2,074 2,065 3,801 3,953 
Total revenue5,293 5,603 5,763 5,549 5,116 10,896 9,808 
Provision For (Recapture of) Credit Losses146 235 408 241 36 381 (172)
Noninterest Expense
Personnel1,846 1,826 1,943 1,805 1,779 3,672 3,496 
Occupancy244 251 247 241 246 495 504 
Equipment349 350 369 344 351 699 682 
Marketing109 74 106 93 95 183 156 
Other824 820 809 797 773 1,644 1,578 
Total noninterest expense3,372 3,321 3,474 3,280 3,244 6,693 6,416 
Income before income taxes and noncontrolling interests1,775 2,047 1,881 2,028 1,836 3,822 3,564 
Income taxes275 353 333 388 340 628 639 
Net income1,500 1,694 1,548 1,640 1,496 3,194 2,925 
Less: Net income attributable to noncontrolling interests17 17 20 16 15 34 36 
Preferred stock dividends (c)127 68 120 65 71 195 116 
Preferred stock discount accretion and
    redemptions		2 2 1 1 1 4 3 
Net income attributable to common shareholders$1,354 $1,607 $1,407 $1,558 $1,409 $2,961 $2,770 
Earnings Per Common Share
Basic$3.36 $3.98 $3.47 $3.78 $3.39 $7.35 $6.62 
Diluted$3.36 $3.98 $3.47 $3.78 $3.39 $7.34 $6.61 
Average Common Shares Outstanding
Basic401 401 404 410 414 401 417 
Diluted401 402 404 410 414 401 417 
Efficiency64 %59 %60 %59 %63 %61 %65 %
Noninterest income to total revenue34 %36 %36 %37 %40 %35 %40 %
Effective tax rate (d)15.5 %17.2 %17.7 %19.1 %18.5 %16.4 %17.9 %
(a)Includes net gains (losses) on sales of securities of $(2) million, less than $1 million, $(3) million, less than $1 million and less than $(1) million for the quarters ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and $(2) million and $(4) million for the six months ended June 30, 2023 and June 30, 2022, respectively.
(b)Includes Visa Class B derivative fair value adjustments of $(83) million, $(45) million, $(41) million, $13 million and $(16) million for the quarters ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and $(127) million and $(12) million for the six months ended June 30, 2023 and June 30, 2022, respectively.
(c)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually.
(d)The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.







THE PNC FINANCIAL SERVICES GROUP, INC.

Page 2


Table 2: Consolidated Balance Sheet (Unaudited)
June 30March 31December 31September 30June 30
In millions, except par value20232023202220222022
Assets
Cash and due from banks$6,191 $5,940 $7,043 $6,548 $8,582 
Interest-earning deposits with banks (a)38,259 33,865 27,320 40,278 28,404 
Loans held for sale (b)835 998 1,010 1,126 1,191 
Investment securities – available for sale 41,787 43,220 44,159 45,798 52,984 
Investment securities – held to maturity93,874 95,019 95,175 90,653 79,748 
Loans (b)321,761 326,475 326,025 315,400 310,800 
Allowance for loan and lease losses (4,737)(4,741)(4,741)(4,581)(4,462)
Net loans317,024 321,734 321,284 310,819 306,338 
Equity investments8,015 8,323 8,437 8,130 8,441 
Mortgage servicing rights3,455 3,293 3,423 3,206 2,608 
Goodwill10,987 10,987 10,987 10,987 10,916 
Other (b) 37,780 38,398 38,425 41,932 41,574 
Total assets$558,207 $561,777 $557,263 $559,477 $540,786 
Liabilities
Deposits
Noninterest-bearing$110,527 $118,014 $124,486 $138,423 $146,438 
Interest-bearing316,962 318,819 311,796 299,771 294,373 
Total deposits427,489 436,833 436,282 438,194 440,811 
Borrowed funds
Federal Home Loan Bank borrowings34,000 32,020 32,075 30,075 10,000 
Senior debt22,005 19,622 16,657 13,357 14,358 
Subordinated debt5,548 5,630 6,307 7,286 7,487 
Other (b)3,831 3,550 3,674 3,915 4,139 
Total borrowed funds65,384 60,822 58,713 54,633 35,984 
Allowance for unfunded lending related commitments 663 672 694 682 681 
Accrued expenses and other liabilities15,325 14,376 15,762 19,245 15,622 
Total liabilities508,861 512,703 511,451 512,754 493,098 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares2,715 2,714 2,714 2,714 2,714 
Capital surplus19,934 19,864 18,376 19,810 18,531 
Retained earnings55,346 54,598 53,572 52,777 51,841 
Accumulated other comprehensive income (loss)(9,525)(9,108)(10,172)(10,486)(8,358)
Common stock held in treasury at cost: 145, 144, 142, 139, and 132 shares(19,150)(19,024)(18,716)(18,127)(17,076)
Total shareholders’ equity49,320 49,044 45,774 46,688 47,652 
Noncontrolling interests26 30 38 35 36 
Total equity49,346 49,074 45,812 46,723 47,688 
Total liabilities and equity$558,207 $561,777 $557,263 $559,477 $540,786 
(a)Amounts include balances held with the Federal Reserve Bank of $37.8 billion, $32.5 billion, $26.9 billion, $39.8 billion and $28.0 billion as of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 Form 10-Q will include, additional information regarding these items.
(c)Par value less than $0.5 million at each date.




THE PNC FINANCIAL SERVICES GROUP, INC.

Page 3
Table 3: Average Consolidated Balance Sheet (Unaudited) (a) (b)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
In millions2023202320222022202220232022
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency$31,180 $31,850 $31,818 $32,500 $37,285 $31,513 $52,308 
Non-agency663 689714748902676954 
Commercial mortgage-backed2,948 3,1023,3773,4894,3623,0254,793 
Asset-backed5752181051102,3883974,296 
U.S. Treasury and government agencies8,2319,08810,34511,78917,4808,65732,391 
Other2,9973,2633,3703,5064,2003,1294,536 
Total securities available for sale46,59448,21049,72952,14266,61747,39799,278
Securities held to maturity
Residential mortgage-backed45,033 45,616 44,184 39,329 33,086 45,323 16,687 
Commercial mortgage-backed2,396 2,453 2,323 2,069 1,175 2,424 591 
Asset-backed6,712 7,026 6,995 6,571 4,1196,8682,071 
U.S. Treasury and government agencies36,91236,748 36,44134,279 28,16736,83114,618 
Other3,3913,3383,2182,6001,5603,3651,068 
Total securities held to maturity94,44495,18193,16184,84868,10794,81135,035
Total investment securities141,038143,391142,890136,990134,724142,208134,313
Loans
Commercial and industrial180,878182,017179,111172,788166,968181,444161,256 
Commercial real estate35,93836,11036,18135,14034,46736,02334,237 
Equipment lease financing6,3646,4526,2756,2026,2006,4086,150 
Consumer55,07055,02054,80954,56354,55155,04554,757 
Residential real estate46,28445,92745,49944,33342,60446,10741,385 
Total loans324,534325,526321,875313,026304,790325,027297,785
Interest-earning deposits with banks (c)31,43334,05430,39531,89239,68932,73651,120 
Other interest-earning assets9,2158,8069,6909,5609,9359,0129,677 
Total interest-earning assets506,220511,777504,850491,468489,138508,983492,895
Noninterest-earning assets49,28750,55552,35655,62957,74049,91856,232 
Total assets$555,507 $562,332 $557,206 $547,097 $546,878 $558,901 $549,127 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market$63,691 $65,753 $63,944 $60,934 $58,019 $64,716 $60,295 
Demand124,111124,376122,501120,358119,636124,243116,024 
Savings102,415104,408102,020106,761109,063103,406108,799 
Time deposits22,34220,51912,98210,02010,37821,43613,195 
Total interest-bearing deposits312,559315,056301,447298,073297,096313,801298,313
Borrowed funds
Federal Home Loan Bank borrowings33,75232,05630,640 16,7086,97832,9093,508 
Senior debt20,91019,67916,31214,59716,17220,29817,089 
Subordinated debt5,8506,1006,9337,6146,9985,9746,886 
Other5,1805,1335,3465,3425,5085,1565,515 
Total borrowed funds65,69262,96859,23144,26135,65664,33732,998
Total interest-bearing liabilities378,251378,024360,678342,334332,752378,138331,311
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits113,178121,176133,461141,167149,432117,155151,567 
Accrued expenses and other liabilities15,06316,01417,46115,69917,11615,53616,245 
Equity49,01547,11845,60647,89747,57848,07250,004 
Total liabilities and equity$555,507 $562,332 $557,206 $547,097 $546,878 $558,901 $549,127 
(a)Calculated using average daily balances.
(b)Nonaccrual loans are included in loans, net of unearned income. The impact of financial derivatives used in interest rate risk management is included in the interest income/expense and average yields/rates of the related assets and liabilities. Basis adjustments related to hedged items are included in noninterest-earning assets and noninterest-bearing liabilities. Average balances of securities are based on amortized historical cost (excluding adjustments to fair value, which are included in other assets). Average balances for certain loans and borrowed funds accounted for at fair value are included in noninterest-earning assets and noninterest-bearing liabilities, with changes in fair value recorded in Noninterest income.
(c)Amounts include average balances held with the Federal Reserve Bank of $30.6 billion, $33.5 billion, $30.0 billion, $31.5 billion and $39.3 billion for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022 and $32.0 billion and $50.7 billion for the six months ended June 30, 2023 and June 30,2022, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
2023202320222022202220232022
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency2.67 %2.67 %2.54 %2.36 %2.17 %2.67 %1.89 %
Non-agency9.39 %8.53 %7.85 %7.62 %7.56 %8.95 %7.55 %
Commercial mortgage-backed2.84 %2.62 %2.75 %2.70 %2.45 %2.72 %2.40 %
Asset-backed6.56 %7.04 %11.98 %6.31 %1.84 %6.67 %1.49 %
U.S. Treasury and government agencies2.20 %2.05 %1.96 %1.73 %1.60 %2.12 %1.29 %
Other2.55 %2.47 %2.39 %2.47 %2.59 %2.51 %2.67 %
Total securities available for sale2.73 %2.64 %2.52 %2.33 %2.13 %2.69 %1.79 %
Securities held to maturity
Residential mortgage-backed2.72 %2.74 %2.60 %2.30 %1.98 %2.73 %1.96 %
Commercial mortgage-backed5.35 %4.95 %4.57 %3.50 %2.30 %5.15 %2.29 %
Asset-backed4.10 %3.97 %3.44 %2.58 %1.92 %4.03 %1.91 %
U.S. Treasury and government agencies1.34 %1.33 %1.30 %1.19 %1.05 %1.33 %1.09 %
Other4.65 %4.62 %4.47 %4.10 %4.21 %4.63 %4.19 %
Total securities held to maturity2.41 %2.41 %2.27 %1.96 %1.65 %2.41 %1.67 %
Total investment securities2.52 %2.49 %2.36 %2.10 %1.89 %2.50 %1.76 %
Loans
Commercial and industrial5.70 %5.34 %4.70 %3.69 %2.90 %5.52 %2.83 %
Commercial real estate6.37 %6.02 %5.28 %4.27 %3.15 %6.19 %3.01 %
Equipment lease financing4.51 %4.28 %4.18 %3.85 %3.62 %4.40 %3.68 %
Consumer6.57 %6.34 %5.88 %5.32 %4.68 %6.46 %4.68 %
Residential real estate3.41 %3.35 %3.28 %3.21 %3.11 %3.38 %3.07 %
Total loans5.57 %5.29 %4.75 %3.98 %3.29 %5.43 %3.24 %
Interest-earning deposits with banks5.10 %4.58 %3.76 %2.32 %0.79 %4.83 %0.42 %
Other interest-earning assets5.96 %5.75 %5.20 %3.94 %2.76 %5.86 %2.42 %
Total yield on interest-earning assets4.70 %4.46 %4.02 %3.35 %2.69 %4.58 %2.53 %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market2.79 %2.40 %1.75 %0.85 %0.19 %2.59 %0.10 %
Demand1.89 %1.58 %1.14 %0.59 %0.15 %1.74 %0.09 %
Savings1.26 %1.03 %0.50 %0.09 %0.04 %1.14 %0.04 %
Time deposits3.26 %3.00 %1.45 %0.26 %0.18 %3.14 %0.15 %
Total interest-bearing deposits1.96 %1.66 %1.07 %0.45 %0.12 %1.81 %0.08 %
Borrowed funds
Federal Home Loan Bank borrowings5.28 %4.80 %3.92 %2.60 %1.24 %5.04 %1.24 %
Senior debt5.91 %5.39 %4.30 %2.96 %1.61 %5.66 %1.30 %
Subordinated debt6.19 %5.69 %4.79 %3.43 %1.94 %5.94 %1.68 %
Other
3.79 %3.70 %3.24 %2.20 %1.46 %3.74 %1.22 %
Total borrowed funds5.44 %4.98 %4.07 %2.81 %1.58 %5.22 %1.36 %
Total rate on interest-bearing liabilities2.56 %2.20 %1.55 %0.75 %0.27 %2.38 %0.20 %
Interest rate spread2.14 %2.26 %2.47 %2.60 %2.42 %2.20 %2.33 %
Benefit from use of noninterest-bearing sources (b)0.65 %0.58 %0.45 %0.22 %0.08 %0.61 %0.06 %
Net interest margin2.79 %2.84 %2.92 %2.82 %2.50 %2.81 %2.39 %
(a)Yields and rates are calculated using the applicable annualized interest income or interest expense divided by the applicable average earning assets or interest-bearing liabilities. Net interest margin is the total yield on interest-earning assets minus the total rate on interest-bearing liabilities and includes the benefit from use of noninterest-bearing sources. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating average yields used in the calculation of net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022 were $37 million, $38 million, $36 million, $29 million and $25 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2023 and June 30, 2022 were $75 million and $47 million, respectively.
(b)Represents the positive effects of investing noninterest-bearing sources in interest-earning assets.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 5
Table 5: Details of Loans (Unaudited)
June 30March 31December 31September 30June 30
In millions20232023202220222022
Commercial
Commercial and industrial
Manufacturing$30,586 $32,132 $30,845 $28,629 $27,179 
Retail/wholesale trade28,75129,17229,17627,53226,475
Service providers22,27723,18623,54822,04321,184
Financial services21,82322,53421,32021,59019,594
Real estate related (a)17,20017,54817,78017,51316,179
Technology, media & telecommunications11,15811,33811,84511,36616,249
Health care10,18610,53710,64910,42010,153
Transportation and warehousing8,0487,8247,8587,9777,604
Other industries27,60028,72629,19826,74327,214
Total commercial and industrial177,629 182,997 182,219 173,813 171,831 
Commercial real estate35,928 35,991 36,316 35,592 34,452 
Equipment lease financing6,400 6,424 6,514 6,192 6,240 
Total commercial219,957225,412225,049215,597212,523
Consumer
Residential real estate46,834 46,067 45,889 45,057 43,717 
Home equity26,200 26,203 25,983 25,367 24,693 
Automobile15,065 14,923 14,836 15,025 15,323 
Credit card7,092 6,961 7,069 6,774 6,650 
Education2,058 2,131 2,173 2,287 2,332 
Other consumer4,555 4,778 5,026 5,293 5,562 
Total consumer101,804 101,063 100,976 99,803 98,277 
Total loans$321,761 $326,475 $326,025 $315,400 $310,800 
(a)Represents loans to customers in the real estate and construction industries.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 6
Allowance for Credit Losses (Unaudited)

Table 6: Change in Allowance for Loan and Lease Losses
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
Dollars in millions2023202320222022202220232022
Allowance for loan and lease losses
Beginning balance$4,741 $4,741 $4,581 $4,462 $4,558 $4,741 $4,868 
Adoption of ASU 2022-02 (a) (35)(35)
Beginning balance, adjusted4,741 4,706 4,581 4,462 4,558 4,706 4,868 
Gross charge-offs:
Commercial and industrial(45)(104)(121)(65)(30)(149)(71)
Commercial real estate(87)(12)(22)(7)(5)(99)(15)
Equipment lease financing(3)(4)(2)(1)(2)(7)(3)
Residential real estate(2)(3)(2)(2) (5)(7)
Home equity(5)(6)(6)(3)(2)(11)(6)
Automobile(28)(33)(34)(32)(34)(61)(86)
Credit card(80)(74)(62)(59)(67)(154)(135)
Education(5)(4)(4)(4)(4)(9)(8)
Other consumer(38)(42)(64)(49)(51)(80)(115)
Total gross charge-offs(293)(282)(317)(222)(195)(575)(446)
Recoveries:
Commercial and industrial33 20 33 23 15 53 45 
Commercial real estate 2 2 1 1 2 2 
Equipment lease financing3 3 1 1 3 6 6 
Residential real estate4 3 2 4 6 7 11 
Home equity13 11 13 19 18 24 39 
Automobile27 24 24 30 39 51 70 
Credit card11 11 8 12 19 22 31 
Education2 2 1 1 2 4 3 
Other consumer6 11 9 12 9 17 19 
Total recoveries99 87 93 103 112 186 226 
Net (charge-offs) / recoveries:
Commercial and industrial(12)(84)(88)(42)(15)(96)(26)
Commercial real estate(87)(10)(20)(6)(4)(97)(13)
Equipment lease financing(1)(1)1 (1)3 
Residential real estate2 2 6 2 4 
Home equity8 5 7 16 16 13 33 
Automobile(1)(9)(10)(2)5 (10)(16)
Credit card(69)(63)(54)(47)(48)(132)(104)
Education(3)(2)(3)(3)(2)(5)(5)
Other consumer(32)(31)(55)(37)(42)(63)(96)
Total net (charge-offs) (194)(195)(224)(119)(83)(389)(220)
Provision for (recapture of) credit losses (b)189 229 380 241 (10)418 (182)
Other1 1 4 (3)(3)2 (4)
Ending balance$4,737 $4,741 $4,741 $4,581 $4,462 $4,737 $4,462 
Supplemental Information
Net charge-offs
Commercial net charge-offs$(99)$(95)$(109)$(48)$(18)$(194)$(36)
Consumer net charge-offs(95)(100)(115)(71)(65)(195)(184)
Total net charge-offs $(194)$(195)$(224)$(119)$(83)$(389)$(220)
Net charge-offs to average loans (annualized)0.24 %0.24 %0.28 %0.15 %0.11 %0.24 %0.15 %
Commercial0.18 %0.17 %0.20 %0.09 %0.03 %0.17 %0.04 %
Consumer0.38 %0.40 %0.45 %0.28 %0.27 %0.39 %0.39 %
(a)Represents the impact of adopting ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 Form 10-Q will include additional information related to our adoption of this ASU.
(b)See Table 7 for the components of the Provision for (recapture of) credit losses being reported on the Consolidated Income Statement.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 7
Allowance for Credit Losses (Unaudited) (Continued)

Table 7: Components of the Provision for (Recapture of) Credit Losses
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
In millions2023202320222022202220232022
Provision for (recapture of) credit losses
Loans and leases$189 $229 $380 $241 $(10)$418 $(182)
Unfunded lending related commitments(9)(22)12 1 42 (31)19 
Investment securities  (1)10 3 3 (1)4 
Other financial assets(34)29 6 (4)1 (5)(13)
Total provision for (recapture of) credit losses$146 $235 $408 $241 $36 $381 $(172)


Table 8: Allowance for Credit Losses by Loan Class (a)
June 30, 2023March 31, 2023June 30, 2022

Dollars in millions		Allowance AmountTotal Loans% of Total LoansAllowance AmountTotal Loans% of Total LoansAllowance AmountTotal Loans% of Total Loans
Allowance for loan and lease losses
Commercial
Commercial and industrial$1,836 $177,629 1.03 %$1,771 $182,997 0.97 %$1,853 $171,831 1.08 %
Commercial real estate1,206 35,928 3.36 %1,171 35,991 3.25 %993 34,452 2.88 %
Equipment lease financing100 6,400 1.56 %104 6,424 1.62 %91 6,240 1.46 %
Total commercial3,142 219,957 1.43 %3,046 225,412 1.35 %2,937 212,523 1.38 %
Consumer
Residential real estate72 46,834 0.15 %95 46,067 0.21 %36 43,717 0.08 %
Home equity294 26,200 1.12 %316 26,203 1.21 %190 24,693 0.77 %
Automobile188 15,065 1.25 %199 14,923 1.33 %254 15,323 1.66 %
Credit card765 7,092 10.79 %782 6,961 11.23 %715 6,650 10.75 %
Education61 2,058 2.96 %64 2,131 3.00 %63 2,332 2.70 %
Other consumer215 4,555 4.72 %239 4,778 5.00 %267 5,562 4.80 %
Total consumer1,595 101,804 1.57 %1,695 101,063 1.68 %1,525 98,277 1.55 %
Total
4,737 $321,761 1.47 %4,741 $326,475 1.45 %4,462 $310,800 1.44 %
Allowance for unfunded lending related commitments
663 672 681 
Allowance for credit losses
$5,400 $5,413 $5,143 
Supplemental Information
Allowance for credit losses to total loans
1.68 %1.66 %1.65 %
Commercial1.68 %1.60 %1.68 %
Consumer1.67 %1.79 %1.60 %
(a)    Excludes allowances for investment securities and other financial assets, which together totaled $171 million, $205 million and $163 million at June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 8
Details of Nonperforming Assets (Unaudited)

Table 9: Nonperforming Assets by Type
June 30March 31December 31September 30June 30
Dollars in millions20232023202220222022
Nonperforming loans (a)
Commercial
Commercial and industrial
Service providers$114 $128 $174 $223 $151 
Health care60 57 50 45 54 
Technology, media & telecommunications55 22 20 20 21 
Manufacturing50 105 85 88 101 
Real estate related (b)42 43 50 47 59 
Retail/wholesale trade41 82 151 158 87 
Transportation and warehousing33 24 27 29 30 
Other industries75 87 106 138 146 
Total commercial and industrial470 548 663 748 649 
Commercial real estate350 337 189 148 161 
Equipment lease financing7 6 6 7 5 
Total commercial827 891 858 903 815 
Consumer (c)
Residential real estate 429 432 424 429 457 
Home equity506 523 526 530 556 
Automobile133 145 155 167 175 
Credit card10 9 8 6 6 
Other consumer8 10 14 33 37 
Total consumer1,086 1,119 1,127 1,165 1,231 
Total nonperforming loans (d)1,913 2,010 1,985 2,068 2,046 
OREO and foreclosed assets36 38 34 33 29 
Total nonperforming assets$1,949 $2,048 $2,019 $2,101 $2,075 
Nonperforming loans to total loans0.59 %0.62 %0.61 %0.66 %0.66 %
Nonperforming assets to total loans, OREO and foreclosed assets0.61 %0.63 %0.62 %0.67 %0.67 %
Nonperforming assets to total assets0.35 %0.36 %0.36 %0.38 %0.38 %
Allowance for loan and lease losses to nonperforming loans 248 %236 %239 %222 %218 %
(a)In connection with the adoption of ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, nonperforming loan amounts after January 1, 2023 include certain loans whose terms were modified as a result of a borrower’s financial difficulty. Prior year amounts included nonperforming TDRs, for which accounting guidance was eliminated effective January 1, 2023. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 Form 10-Q will include additional information related to our adoption of this ASU.
(b)Represents loans related to customers in the real estate and construction industries.
(c)Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
(d)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option.


Table 10: Change in Nonperforming Assets
April 1, 2023 -January 1, 2023 -October 1, 2022 -July 1, 2022 -April 1, 2022 -
In millionsJune 30, 2023March 31, 2023December 31, 2022September 30, 2022June 30, 2022
Beginning balance$2,048 $2,019 $2,101 $2,075 $2,324 
New nonperforming assets410 452 346 438 393 
Charge-offs and valuation adjustments(135)(122)(174)(79)(55)
Principal activity, including paydowns and payoffs(297)(172)(139)(182)(273)
Asset sales and transfers to loans held for sale(12)(46)(22)(3)(6)
Returned to performing status(65)(83)(93)(148)(308)
Ending balance$1,949 $2,048 $2,019 $2,101 $2,075 




THE PNC FINANCIAL SERVICES GROUP, INC.

Page 9
Accruing Loans Past Due (Unaudited)                  

Under the CARES Act credit reporting rules, certain loans modified due to pandemic related hardships are not being reported as past due
for the periods presented based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period. The CARES Act credit reporting rules expire in the third quarter of 2023.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)
June 30March 31December 31September 30June 30
Dollars in millions20232023202220222022
Commercial
Commercial and industrial$64$119$169$321$99
Commercial real estate1025191128
Equipment lease financing14332067
Total commercial88177208338134
Consumer
Residential real estate
Non government insured 151167190223230
Government insured7778917568
Home equity5648534643
Automobile847910696102
Credit card4948504437
Education
Non government insured 56565
Government insured
2829293039
Other consumer1713152138
Total consumer467468539541562
Total$555$645$747$879$696
Supplemental Information
Total accruing loans past due 30-59 days to total loans0.17 %0.20 %0.23 %0.28 %0.22 %
Commercial0.04 %0.08 %0.09 %0.16 %0.06 %
Consumer0.46 %0.46 %0.53 %0.54 %0.57 %
(a)Excludes loans held for sale.



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 10
Accruing Loans Past Due (Unaudited) (Continued)

Table 12: Accruing Loans Past Due 60 to 89 Days (a)
June 30March 31December 31September 30June 30
Dollars in millions20232023202220222022
Commercial
Commercial and industrial$47$21$27$55$128
Commercial real estate14411
Equipment lease financing55464
Total commercial52273565143
Consumer
Residential real estate
Non government insured 3643544953
Government insured5055584642
Home equity1818201614
Automobile2018252124
Credit card3635353025
Education
Non government insured
24242
Government insured
1517202221
Other consumer98121521
Total consumer186198226203202
Total$238$225$261$268$345
Supplemental Information
Total accruing loans past due 60-89 days to total loans0.07 %0.07 %0.08 %0.08 %0.11 %
Commercial0.02 %0.01 %0.02 %0.03 %0.07 %
Consumer0.18 %0.20 %0.22 %0.20 %0.21 %
(a)Excludes loans held for sale.




THE PNC FINANCIAL SERVICES GROUP, INC.

Page 11
Accruing Loans Past Due (Unaudited) (Continued)

Table 13: Accruing Loans Past Due 90 Days or More (a)
June 30March 31December 31September 30June 30
Dollars in millions20232023202220222022
Commercial
Commercial and industrial$112$134$137$139$138
Commercial real estate5
Total commercial112134137144138
Consumer
Residential real estate
Non government insured 3026323020
Government insured144152167166182
Automobile55766
Credit card7174705854
Education
Non government insured 22222
Government insured
4654576156
Other consumer99101212
Total consumer307322345335332
Total$419$456$482$479$470
Supplemental Information
Total accruing loans past due 90 days or more to total loans0.13 %0.14 %0.15 %0.15 %0.15 %
Commercial0.05 %0.06 %0.06 %0.07 %0.06 %
Consumer0.30 %0.32 %0.34 %0.34 %0.34 %
Total accruing loans past due$1,212$1,326$1,490$1,626$1,511
Commercial$252$338$380$547$415
Consumer$960$988$1,110$1,079$1,096
Total accruing loans past due to total loans0.38 %0.41 %0.46 %0.52 %0.49 %
Commercial0.11 %0.15 %0.17 %0.25 %0.20 %
Consumer0.94 %0.98 %1.10 %1.08 %1.12 %
(a)Excludes loans held for sale.





































THE PNC FINANCIAL SERVICES GROUP, INC.

Page 12

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, insurance services, investment management and cash management products and services to consumer and small business customers who are serviced through our coast-to-coast branch network, digital channels, ATMs, or through our phone-based customer contact centers. Deposit products include checking, savings and money market accounts and time deposits. Lending products include residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans and personal and small business loans and lines of credit. The residential mortgage loans are directly originated within our branch network and nationwide, and are typically underwritten to agency and/or third-party standards, and either sold, servicing retained or held on our balance sheet. Brokerage, investment management and cash management products and services include managed, education, retirement and trust accounts.

Corporate & Institutional Banking provides lending, treasury management, capital markets and advisory products and services to mid-sized and large corporations and government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. The Treasury Management business provides corporations with cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services and access to online/mobile information management and reporting services. Capital markets and advisory includes services and activities primarily related to merger and acquisitions advisory, equity capital markets advisory, asset-backed financing, loan syndication, securities underwriting and customer-related trading. We also provide commercial loan servicing and technology solutions for the commercial real estate finance industry. Products and services are provided nationally.

Asset Management Group provides private banking for high net worth and ultra high net worth clients and institutional asset management. The Asset Management group is composed of two operating units:
•PNC Private Bank provides products and services to emerging affluent, high net worth and ultra high net worth individuals and their families, including investment and retirement planning, customized investment management, credit and cash management solutions, trust management and administration. In addition, multi-generational family planning services are also provided to ultra high net worth individuals and their families, which include estate, financial, tax, fiduciary and customized performance reporting through PNC Private Bank Hawthorn.
•Institutional Asset Management provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, retirement plan fiduciary investment services to institutional clients, including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 14: Period End Employees
June 30March 31December 31September 30June 30
20232023202220222022
Full-time employees
Retail Banking30,446 31,583 32,467 33,288 33,565 
Other full-time employees27,785 27,874 27,427 26,328 25,390 
Total full-time employees58,231 59,457 59,894 59,616 58,955 
Part-time employees
Retail Banking1,567 1,537 1,577 1,520 1,712 
Other part-time employees503 79 74 77 460 
Total part-time employees2,070 1,616 1,651 1,597 2,172 
Total60,301 61,073 61,545 61,213 61,127 


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 13
Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
In millions2023202320222022202220232022
Net Income
Retail Banking$954 $647 $752 $560 $322 $1,601 $662 
Corporate & Institutional Banking817 1,059 982 929 1,003 1,876 1,959 
Asset Management Group63 52 52 90 86 115 188 
Other(351)(81)(258)45 70 (432)80 
Net income excluding noncontrolling
  interests		$1,483 $1,677 $1,528 $1,624 $1,481 $3,160 $2,889 
  
Revenue
Retail Banking$3,150 $3,024 $3,079 $2,742 $2,410 $6,174 $4,686 
Corporate & Institutional Banking2,202 2,300 2,451 2,255 2,221 4,502 4,185 
Asset Management Group353 357 375 396 387 710 773 
Other(412)(78)(142)156 98 (490)164 
Total revenue$5,293 $5,603 $5,763 $5,549 $5,116 $10,896 $9,808 
(a)Our business information is presented based on our internal management reporting practices. Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 14
Table 16: Retail Banking (Unaudited) (a)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
Dollars in millions2023202320222022202220232022
Income Statement
Net interest income$2,448 $2,281 $2,330 $2,017 $1,662 $4,729 $3,193 
Noninterest income702 743 749 725 748 1,445 1,493 
Total revenue3,150 3,024 3,079 2,742 2,410 6,174 4,686 
Provision for (recapture of) credit losses(14)238 193 92 55 224 (26)
Noninterest expense1,904 1,927 1,892 1,901 1,913 3,831 3,805 
Pretax earnings 1,260 859 994 749 442 2,119 907 
Income taxes295 202 232 175 105 497 214 
Noncontrolling interests11 10 10 14 15 21 31 
Earnings $954 $647 752 $752 322 $560 $322 $1,601 $662 
Average Balance Sheet
Loans held for sale$614 $542 $737 $837 $957 $578 $1,070 
Loans
Consumer
Residential real estate$35,150 $35,421 $35,286 $34,465 $33,240 $35,285 $32,389 
Home equity24,663 24,571 24,126 23,393 22,886 24,617 22,673 
Automobile15,005 14,918 14,793 15,088 15,566 14,962 15,918 
Credit card7,015 6,904 6,882 6,684 6,508 6,960 6,455 
Education2,115 2,188 2,257 2,327 2,410 2,151 2,470 
Other consumer1,929 1,990 2,049 2,092 2,173 1,959 2,261 
Total consumer 85,877 85,992 85,393 84,049 82,783 85,934 82,166 
Commercial 11,708 11,438 11,181 10,881 11,044 11,574 11,325 
Total loans$97,585 $97,430 $96,574 $94,930 $93,827 $97,508 $93,491 
Total assets$114,826 $115,384 $115,827 $114,619 $113,068 $115,103 $112,415 
Deposits
Noninterest-bearing $59,464 $60,801 $64,031 $65,405 $65,599 $60,129 $64,833 
Interest-bearing 197,854 201,720 195,743 198,956 202,801 199,776 201,916 
Total deposits$257,318 $262,521 $259,774 $264,361 $268,400 $259,905 $266,749 
Performance Ratios
Return on average assets3.33 %2.27 %2.58 %1.94 %1.14 %2.80 %1.19 %
Noninterest income to total revenue22 %25 %24 %26 %31 %23 %32 %
Efficiency60 %64 %61 %69 %79 %62 %81 %
(a)See note (a) on page 13.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 15
Retail Banking (Unaudited) (Continued)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
Dollars in millions, except as noted2023202320222022202220232022
Supplemental Noninterest Income Information
Asset management and brokerage $123 $131 $128 $131 $135 $254 $269 
Card and cash management$344 $324 $335 $344 $351 $668 $659 
Lending and deposit services $176 $181 $172 $167 $167 $357 $331 
Residential and commercial mortgage $75 $104 $111 $38 $71 $179 $170 
Residential Mortgage Information
Residential mortgage servicing statistics
 (in billions, except as noted) (a)
Serviced portfolio balance (b)$191 $188 $190 $170 $145 
Serviced portfolio acquisitions$7 $2 $24 $29 $15 $9 $21 
MSR asset value (b)$2.3 $2.2 $2.3 $2.1 $1.6 
MSR capitalization value (in basis points) (b)123 119 122 122 112 
Servicing income: (in millions)
Servicing fees, net (c)$67 $78 $73 $50 $36 $145 $69 
Mortgage servicing rights valuation net of economic hedge
$(9)$14 $24 $(30)$13 $5 $15 
Residential mortgage loan statistics
Loan origination volume (in billions)$2.4 $1.4 $2.1 $3.1 $4.8 $3.8 $9.9 
Loan sale margin percentage2.23 %2.26 %2.20 %1.97 %1.88 %2.24 %2.18 %
Percentage of originations represented by:
Purchase volume (d)90 %84 %88 %85 %74 %88 %57 %
Refinance volume10 %16 %12 %15 %26 %12 %43 %
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)65 %65 %65 %65 %64 %65 %64 %
Digital consumer customers (f)72 %75 %76 %78 %78 %74 %78 %
Credit-related statistics
Nonperforming assets $981 $1,009 $1,003 $1,027 $1,088 
Net charge-offs - loans and leases$109 $112 $108 $98 $88 $221 $229 
Other statistics
ATMs8,566 8,697 8,933 9,169 9,301 
Branches (g)2,361 2,450 2,518 2,527 2,535 
Brokerage account client assets (in billions) (h)$75 $73 $70 $67 $68 
(a)Represents mortgage loan servicing balances for third parties and the related income.
(b)Presented as of period end, except for average customer-related statistics and net charge-offs, which are both shown for the three and six months ended.
(c)Servicing fees net of impact of decrease in MSR value due to passage of time, including the impact from regularly scheduled loan principal payments, prepayments and loans paid off during the period.
(d)Mortgages with borrowers as part of residential real estate purchase transactions.
(e)Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.
(f)Represents consumer checking relationships that process the majority of their transactions through non-teller channels.
(g)Reflects all branches and solution centers excluding standalone mortgage offices and satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
(h)Includes cash and money market balances.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 16
Table 17: Corporate & Institutional Banking (Unaudited) (a)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
Dollars in millions2023202320222022202220232022
Income Statement
Net interest income$1,381 $1,414 $1,489 $1,368 $1,253 $2,795 $2,413 
Noninterest income821 886 962 887 968 1,707 1,772 
Total revenue2,202 2,300 2,451 2,255 2,221 4,502 4,185 
Provision for (recapture of) credit losses209 (28)183 150 (17)181 (135)
Noninterest expense921 939 990 890 934 1,860 1,771 
Pretax earnings1,072 1,389 1,278 1,215 1,304 2,461 2,549 
Income taxes 250 325 291 281 298 575 583 
Noncontrolling interests5 5 5 5 3 10 7 
Earnings$817 $1,059 $982 $929 $1,003 $1,876 $1,959 
Average Balance Sheet
Loans held for sale$440 $456 $337 $449 $490 $448 $559 
Loans
Commercial
Commercial and industrial $167,357 $168,874 $166,176 $160,140 $153,948 $168,110 $147,819 
Commercial real estate34,410 34,605 34,663 33,525 32,844 34,507 32,640 
Equipment lease financing6,364 6,451 6,274 6,202 6,201 6,408 6,150 
Total commercial 208,131 209,930 207,113 199,867 192,993 209,025 186,609 
Consumer5 7 8 7 14 7 11 
Total loans$208,136 $209,937 $207,121 $199,874 $193,007 $209,032 $186,620 
Total assets $234,174 $234,536 $234,120 $224,984 $219,513 $234,354 $210,171 
Deposits
Noninterest-bearing $51,948 $58,529 $67,340 $73,523 $81,028 $55,221 $83,589 
Interest-bearing89,068 86,832 79,916 71,925 65,151 87,956 66,780 
Total deposits$141,016 $145,361 $147,256 $145,448 $146,179 $143,177 $150,369 
Performance Ratios
Return on average assets1.40 %1.83 %1.66 %1.64 %1.83 %1.61 %1.88 %
Noninterest income to total revenue37 %39 %39 %39 %44 %38 %42 %
Efficiency42 %41 %40 %39 %42 %41 %42 %
Other Information
Consolidated revenue from:
Treasury Management (b)$778 $785 $843 $753 $659 $1,563 $1,205 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c)$13 $27 $15 $26 $20 $40 $36 
Commercial mortgage loan servicing income (d)44 39 52 66 70 83 138 
Commercial mortgage servicing rights valuation, net of economic hedge4 41 39 53 33 45 46 
Total$61 $107 $106 $145 $123 $168 $220 
Commercial mortgage servicing statistics
Serviced portfolio balance (in billions) (e)$280 $281 $281 $282 $282 
MSR asset value (e)$1,106 $1,061 $1,113 $1,132 $988 
Average loans by C&IB business (f)
Corporate Banking$117,259 $119,602 $115,126 $110,665 $104,721 $118,424 $99,187 
Real Estate47,692 47,297 48,031 45,837 44,202 47,495 43,710 
Business Credit30,613 30,180 30,087 28,930 28,246 30,398 27,395 
Commercial Banking8,225 8,430 8,683 9,008 9,459 8,327 9,751 
Other4,347 4,428 5,194 5,434 6,379 4,388 6,577 
Total average loans$208,136 $209,937 $207,121 $199,874 $193,007 $209,032 $186,620 
Credit-related statistics
Nonperforming assets (e)$738 $801 $761 $779 $674 
Net charge-offs - loans and leases$93 $85 $100 $33 $11 $178 $10 
(a)See note (a) on page 13.
(b)Amounts are reported in net interest income and noninterest income.
(c)Represents commercial mortgage banking income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, origination fees, gains on sale of loans held for sale and net interest income on loans held for sale.
(d)Represents net interest income and noninterest income from loan servicing, net of reduction in commercial mortgage servicing rights due to amortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
(e)Presented as of period end.
(f)As the result of a business realignment within C&IB during the second quarter of 2023, certain loans were reclassified from Other to Corporate Banking in the prior periods to conform to the current period presentation.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 17
Table 18: Asset Management Group (Unaudited) (a)
Three months endedSix months ended
June 30March 31December 31September 30June 30June 30June 30
Dollars in millions, except as noted2023202320222022202220232022
Income Statement
Net interest income$125 $127 $152 $165 $153 $252 $291 
Noninterest income228 230 223 231 234 458 482 
Total revenue353 357 375 396 387 710 773 
Provision for (recapture of) credit losses(10)9 17 4 5 (1)7 
Noninterest expense280 280 291 274 270 560 521 
Pretax earnings83 68 67 118 112 151 245 
Income taxes 20 16 15 28 26 36 57 
Earnings$63 $52 $52 $90 $86 $115 $188 
Average Balance Sheet
Loans
Consumer
Residential real estate $9,855 $9,174 $8,835 $8,430 $7,835 $9,517 $7,414 
Other consumer4,065 4,156 4,388 4,640 4,633 4,110 4,587 
Total consumer 13,920 13,330 13,223 13,070 12,468 13,627 12,001 
Commercial1,229 1,246 1,291 1,328 1,560 1,237 1,704 
Total loans$15,149 $14,576 $14,514 $14,398 $14,028 $14,864 $13,705 
Total assets$15,562 $14,997 $14,935 $14,820 $14,449 $15,282 $14,126 
Deposits
Noninterest-bearing $1,787 $1,846 $2,107 $2,286 $2,824 $1,817 $3,140 
Interest-bearing25,482 26,337 25,651 27,054 28,839 25,907 29,331 
Total deposits$27,269 $28,183 $27,758 $29,340 $31,663 $27,724 $32,471 
Performance Ratios
Return on average assets1.62 %1.41 %1.38 %2.41 %2.39 %1.52 %2.68 %
Noninterest income to total revenue65 %64 %59 %58 %60 %65 %62 %
Efficiency79 %78 %78 %69 %70 %79 %67 %
Other Information
Nonperforming assets (b)$41 $42 $56 $95 $114 
Net charge-offs (recoveries) - loans and leases $(2)$18 $(2)$(1)$(2)$1 
Brokerage account client assets (in billions) (b)$5 $4 $4 $4 $4 
Client Assets Under Administration
     (in billions) (b) (c)
Discretionary client assets under management$176 $177 $173 $166 $167 
Nondiscretionary client assets under administration168 156 152 148 153 
Total$344 $333 $325 $314 $320 
Discretionary client assets under management
PNC Private Bank$111 $108 $105 $99 $103 
Institutional Asset Management65 69 68 67 64 
Total$176 $177 $173 $166 $167 
(a)See note (a) on page 13.
(b)As of period end.
(c)Excludes brokerage account client assets.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 18
Glossary of Terms

2019 Tailoring Rules – Rules adopted by the federal banking agencies to better tailor the application of their capital, liquidity, and enhanced prudential requirements for banking organizations to the asset size and risk profile (as measured by certain regulatory metrics) of the banking organization. Effective January 1, 2020, the agencies' capital and liquidity rules classify all BHCs with $100 billion or more in total assets into one of four categories (Category I, Category II, Category III, and Category IV).

Adjusted average total assets – Primarily consisted of total average quarterly (or annual) assets plus/less unrealized losses (gains) on investment securities, less goodwill and certain other intangible assets (net of eligible deferred taxes).

Allowance for credit losses (ACL) – A valuation account that is deducted from or added to the amortized cost basis of the related
financial assets to present the net carrying value at the amount expected to be collected on the financial asset.

Amortized cost basis – Amount at which a financial asset is originated or acquired, adjusted for applicable accretion or amortization of premiums, discounts and net deferred fees or costs, collection of cash, charge-offs, foreign exchange and fair value hedge accounting adjustments.

Basel III common equity Tier 1 (CET1) capital (Tailoring Rules) – Common stock plus related surplus, net of treasury stock, plus retained earnings, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments. Investments in unconsolidated financial institutions, as well as mortgage servicing rights and deferred tax assets, must then be deducted to the extent such items (net of associated deferred tax liabilities) individually exceed 25% of our adjusted Basel III common equity Tier 1 capital.

Basel III common equity Tier 1 capital ratio – Common equity Tier 1 capital divided by period-end risk-weighted assets (as applicable).

Basel III Tier 1 capital – Common equity Tier 1 capital, plus qualifying preferred stock, plus certain trust preferred capital securities, plus certain noncontrolling interests that are held by others and plus/less other adjustments.

Basel III Tier 1 capital ratio – Tier 1 capital divided by period-end risk-weighted assets (as applicable).

Basel III Total capital – Tier 1 capital plus qualifying subordinated debt, plus certain trust preferred securities, plus, under the Basel III transitional rules and the standardized approach, the allowance for loan and lease losses included in Tier 2 capital and other.

Basel III Total capital ratio – Basel III Total capital divided by period-end risk-weighted assets (as applicable).

Charge-off – Process of removing a loan or portion of a loan from our balance sheet because it is considered uncollectible. We also record a charge-off when a loan is transferred from portfolio holdings to held for sale by reducing the loan carrying amount to the fair value of the loan, if fair value is less than carrying amount.

Common shareholders’ equity – Total shareholders' equity less the liquidation value of preferred stock.

Credit valuation adjustment – Represents an adjustment to the fair value of our derivatives for our own and counterparties’ non-performance risk.

Criticized commercial loans – Loans with potential or identified weaknesses based upon internal risk ratings that comply with the regulatory classification definitions of “special mention,” “substandard” or “doubtful.”

Current Expected Credit Loss (CECL) – Methodology for estimating the allowance for credit losses on in-scope financial assets held at amortized cost and unfunded lending related commitments which uses a combination of expected losses over a reasonable and supportable forecast period, a reversion period and long run average credit losses for their estimated contractual term.

Discretionary client assets under management – Assets over which we have sole or shared investment authority for our customers/clients. We do not include these assets on our Consolidated Balance Sheet.

Earning assets – Assets that generate income, which include: interest-earning deposits with banks; loans held for sale; loans; investment securities; and certain other assets.

Effective duration – A measurement, expressed in years, that, when multiplied by a change in interest rates, would approximate the percentage change in value of on- and off- balance sheet positions.

Efficiency – Noninterest expense divided by total revenue.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 19
Fair value – The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fee income – Refers to the following categories within Noninterest income: Asset management and brokerage, Capital markets and advisory, Card and cash management, Lending and deposit services, and Residential and commercial mortgage.

FICO score – A credit bureau-based industry standard score created by Fair Isaac Co. which predicts the likelihood of borrower default. We use FICO scores both in underwriting and assessing credit risk in our consumer lending portfolio. Lower FICO scores indicate likely higher risk of default, while higher FICO scores indicate likely lower risk of default.

GAAP – Accounting principles generally accepted in the United States of America.

Leverage ratio – Basel III Tier 1 capital divided by average quarterly adjusted total assets.

Nondiscretionary client assets under administration – Assets we hold for our customers/clients in a nondiscretionary, custodial capacity. We do not include these assets on our Consolidated Balance Sheet.

Nonperforming assets – Nonperforming assets include nonperforming loans, OREO and foreclosed assets. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans – Loans accounted for at amortized cost whose credit quality has deteriorated to the extent that full collection of contractual principal and interest is not probable. Interest income is not recognized on nonperforming loans. Nonperforming loans exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale and loans accounted for under the fair value option.

Operating leverage – The period to period dollar or percentage change in total revenue less the dollar or percentage change in noninterest expense. A positive variance indicates that revenue growth exceeded expense growth (i.e., positive operating leverage) while a negative variance implies expense growth exceeded revenue growth (i.e., negative operating leverage).

Other real estate owned (OREO) and foreclosed assets – Assets taken in settlement of troubled loans primarily through deed-in-lieu of foreclosure or foreclosure. Foreclosed assets include real and personal property. Certain assets that have a government-guarantee which are classified as other receivables are excluded.

Purchased credit deteriorated assets (PCD) – Acquired loans or debt securities that, at acquisition, are determined to have experienced a more-than-insignificant deterioration in credit quality since origination or issuance.

Risk-weighted assets – Computed by the assignment of specific risk-weights (as defined by the Board of Governors of the Federal Reserve System) to assets and off-balance sheet instruments.

Servicing rights – Intangible assets or liabilities created by an obligation to service assets for others. Typical servicing rights include the right to receive a fee for collecting and forwarding payments on loans and related taxes and insurance premiums held in escrow.

Supplementary leverage ratio – Basel III Tier 1 capital divided by Supplementary leverage exposure.

Taxable-equivalent interest income – The interest income earned on certain assets that is completely or partially exempt from federal income tax. These tax-exempt instruments typically yield lower returns than taxable investments.

Troubled debt restructuring (TDR) – A loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. On January 1, 2023, we adopted ASU 2022-02, which eliminated the accounting guidance for TDRs.

Unfunded lending related commitments – Standby letters of credit, financial guarantees, commitments to extend credit and similar unfunded obligations that are not unilaterally, unconditionally, cancelable at PNC’s option.

Yield curve – A graph showing the relationship between the yields on financial instruments or market indices of the same credit quality with different maturities. For example, a “normal” or “positive” yield curve exists when long-term bonds have higher yields than short-term bonds. A “flat” yield curve exists when yields are the same for short-term and long-term bonds. A “steep” yield curve exists when yields on long-term bonds are significantly higher than on short-term bonds. An “inverted” or “negative” yield curve exists when short-term bonds have higher yields than long-term bonds.