EX-99.1 2 q12022financialsupplement.htm EX-99.1 Document


Exhibit 99.1

pncbanklogoa18a.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
FIRST QUARTER 2022
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2022
(UNAUDITED)

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on April 14, 2022. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. 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
Effective for the first quarter of 2022, PNC updated the presentation of its noninterest income categorization to be based on product and service type, and accordingly, has changed the basis of presentation of its noninterest income revenue streams to: (i) Asset management and brokerage, (ii) Capital markets related, (iii) Card and cash management, (iv) Lending and deposit services, (v) Residential and commercial mortgage and (vi) Other noninterest income. For a description of each updated noninterest income revenue stream, see PNC's Current Report on Form 8-K filed on March 31, 2022.

ACQUISITION OF BBVA USA BANCSHARES, INC.
On June 1, 2021, PNC acquired BBVA USA Bancshares Inc. (BBVA), a U.S. financial holding company conducting its business operations primarily through its U.S. banking subsidiary, BBVA USA. PNC paid $11.5 billion in cash as consideration for the acquisition.

On October 8, 2021, BBVA USA merged into PNC Bank. As of October 12, 2021, PNC converted approximately 2.6 million
customers, 9,000 employees and over 600 branches across seven states. Our 2021 results of operations reflect the benefit of BBVA's acquired business operations for the period since the acquisition closed on June 1, 2021. PNC's balance sheets at March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021 include BBVA's balances.





THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to First Quarter 2022 Financial Supplement (Unaudited)
Financial Supplement Table Reference
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THE PNC FINANCIAL SERVICES GROUP, INC.

Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months ended
March 31December 31September 30June 30March 31
In millions, except per share data20222021202120212021
Interest Income
Loans$2,293 $2,414 $2,437 $2,160 $1,996 
Investment securities544 484 460 469 421 
Other77 77 78 72 66 
Total interest income2,914 2,975 2,975 2,701 2,483 
Interest Expense
Deposits27 27 29 30 40 
Borrowed funds83 86 90 90 95 
Total interest expense110 113 119 120 135 
Net interest income2,804 2,862 2,856 2,581 2,348 
Noninterest Income
Asset management and brokerage377 385 375 350 328 
Capital markets related252 460 482 324 311 
Card and cash management620 646 663 597 492 
Lending and deposit services269 273 305 270 254 
Residential and commercial mortgage159 209 248 206 187 
Other (a)211 292 268 339 300 
Total noninterest income1,888 2,265 2,341 2,086 1,872 
Total revenue4,692 5,127 5,197 4,667 4,220 
Provision For (Recapture of) Credit Losses(208)(327)(203)302 (551)
Noninterest Expense
Personnel1,717 2,038 1,986 1,640 1,477 
Occupancy258 260 248 217 215 
Equipment331 437 355 326 293 
Marketing61 97 103 74 45 
Other805 959 895 793 544 
Total noninterest expense3,172 3,791 3,587 3,050 2,574 
Income before income taxes and noncontrolling interests1,728 1,663 1,813 1,315 2,197 
Income taxes299 357 323 212 371 
Net income1,429 1,306 1,490 1,103 1,826 
Less: Net income attributable to noncontrolling interests21 13 16 12 10 
Preferred stock dividends (b)45 71 57 48 57 
Preferred stock discount accretion and redemptions2 2 1 1 1 
Net income attributable to common shareholders$1,361 $1,220 $1,416 $1,042 $1,758 
Earnings Per Common Share
Basic$3.23 $2.87 $3.31 $2.43 $4.11 
Diluted$3.23 $2.86 $3.30 $2.43 $4.10 
Average Common Shares Outstanding
Basic420 424 426 427 426 
Diluted420 424 426 427 426 
Efficiency68 %74 %69 %65 %61 %
Noninterest income to total revenue40 %44 %45 %45 %44 %
Effective tax rate from continuing operations (c)17.3 %21.5 %17.8 %16.1 %16.9 %
(a)Includes net gains (losses) on sales of securities of $(4) million, $14 million, $15 million, $10 million and $25 million for the quarters ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.
(b)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually.
(c)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)
March 31December 31September 30June 30March 31
In millions, except par value20222021202120212021
Assets
Cash and due from banks$7,572 $8,004 $8,843 $8,724 $7,455 
Interest-earning deposits with banks (a)48,776 74,250 75,478 72,447 86,161 
Loans held for sale (b)1,506 2,231 2,121 2,227 1,967 
Investment securities – available for sale 112,313 131,536 124,127 125,058 96,799 
Investment securities – held to maturity20,098 1,426 1,479 1,485 1,456 
Loans (b)294,457 288,372 290,230 294,704 237,013 
Allowance for loan and lease losses (4,558)(4,868)(5,355)(5,730)(4,714)
Net loans289,899 283,504 284,875 288,974 232,299 
Equity investments7,798 8,180 7,737 7,521 6,386 
Mortgage servicing rights2,208 1,818 1,833 1,793 1,680 
Goodwill10,916 10,916 10,885 10,958 9,317 
Other (b) 40,160 35,326 36,137 35,025 30,894 
Total assets$541,246 $557,191 $553,515 $554,212 $474,414 
Liabilities
Deposits
Noninterest-bearing$150,798 $155,175 $156,305 $154,190 $120,641 
Interest-bearing299,399 302,103 292,597 298,693 254,426 
Total deposits450,197 457,278 448,902 452,883 375,067 
Borrowed funds
Federal Home Loan Bank borrowings1,500 
Bank notes and senior debt16,206 20,661 22,993 24,408 22,139 
Subordinated debt6,766 6,996 7,074 7,120 6,241 
Other (b)3,599 3,127 3,404 3,285 3,150 
Total borrowed funds26,571 30,784 33,471 34,813 33,030 
Allowance for unfunded lending related commitments 639 662 646 645 507 
Accrued expenses and other liabilities14,623 12,741 14,199 11,186 11,931 
Total liabilities492,030 501,465 497,218 499,527 420,535 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares2,713 2,713 2,713 2,713 2,713 
Capital surplus17,487 17,457 17,453 15,928 15,879 
Retained earnings51,058 50,228 49,541 48,663 48,113 
Accumulated other comprehensive income (loss)(5,731)409 1,079 1,463 1,290 
Common stock held in treasury at cost: 128, 123, 120, 118, and 118 shares(16,346)(15,112)(14,527)(14,140)(14,146)
Total shareholders’ equity49,181 55,695 56,259 54,627 53,849 
Noncontrolling interests35 31 38 58 30 
Total equity49,216 55,726 56,297 54,685 53,879 
Total liabilities and equity$541,246 $557,191 $553,515 $554,212 $474,414 
(a)Amounts include balances held with the Federal Reserve Bank of $48.4 billion, $73.8 billion, $75.1 billion, $71.9 billion and $85.8 billion as of March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our 2021 Form 10-K included, and our first quarter 2022 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 ended
March 31December 31September 30June 30March 31
In millions20222021202120212021
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency$67,498 $64,521 $63,163 $56,042 $45,298 
Non-agency1,007 9741,0511,1421,236
Commercial mortgage-backed5,229 5,5386,1346,4656,241
Asset-backed6,2256,2065,6085,8555,304
U.S. Treasury and government agencies47,46844,41538,14932,41922,309
Other4,8764,7414,9945,1074,561
Total securities available for sale132,303126,395119,099107,03084,949
Securities held to maturity
Residential mortgage-backed106 
U.S. Treasury and government agencies919812807802797
Other569642680671650
Total securities held to maturity1,5941,4541,4871,4731,447
Total investment securities133,897127,849120,586108,50386,396
Loans
Commercial and industrial155,481152,355152,964137,892129,996
Commercial real estate34,00435,25637,05431,61128,598
Equipment lease financing6,0996,1836,3006,3326,332
Consumer54,96556,24457,53352,57550,904
Residential real estate40,15238,87237,47527,19722,305
Total loans290,701288,910291,326255,607238,135
Interest-earning deposits with banks (c)62,54075,37780,27478,52285,410
Other interest-earning assets9,4179,1139,1138,0797,829
Total interest-earning assets496,555501,249501,299450,711417,770
Noninterest-earning assets53,54158,12357,94353,71850,450
Total assets$550,096 $559,372 $559,242 $504,429 $468,220 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market$62,596 $65,214 $82,911 $64,990 $59,083 
Demand112,372108,345106,58899,09191,619
Savings108,532104,64489,67987,30782,926
Time deposits16,04318,02919,29318,04818,449
Total interest-bearing deposits299,543296,232298,471269,436252,077
Borrowed funds
Federal Home Loan Bank borrowings2652,411
Bank notes and senior debt18,01521,58122,57322,62022,799
Subordinated debt6,7736,7796,7876,2185,929
Other5,5245,9874,9925,0464,057
Total borrowed funds30,31234,34734,35234,14935,196
Total interest-bearing liabilities329,855330,579332,823303,585287,273
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits153,726156,549155,948132,283113,299
Accrued expenses and other liabilities14,05816,81815,33214,75514,258
Equity52,45755,42655,13953,80653,390
Total liabilities and equity$550,096 $559,372 $559,242 $504,429 $468,220 
(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 Cleveland of $62.3 billion, $75.1 billion, $80.1 billion, $78.3 billion and $85.2 billion for the three months ended March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months ended
March 31December 31September 30June 30March 31
20222021202120212021
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency1.73 %1.47 %1.41 %1.61 %1.72 %
Non-agency7.53 %7.36 %8.07 %7.85 %7.24 %
Commercial mortgage-backed2.36 %2.37 %2.34 %2.49 %2.58 %
Asset-backed1.35 %1.48 %1.50 %2.07 %1.84 %
U.S. Treasury and government agencies1.18 %1.17 %1.18 %1.30 %1.68 %
Other2.73 %2.77 %2.90 %3.00 %3.28 %
Total securities available for sale1.62 %1.50 %1.51 %1.73 %1.95 %
Securities held to maturity
U.S. Treasury and government agencies2.61 %2.89 %2.88 %2.86 %2.83 %
Other4.17 %4.20 %4.33 %3.67 %4.17 %
Total securities held to maturity2.99 %3.47 %3.54 %3.23 %3.43 %
Total investment securities1.64 %1.52 %1.54 %1.75 %1.97 %
Loans
Commercial and industrial2.75 %2.90 %2.80 %2.89 %2.91 %
Commercial real estate2.79 %2.86 %3.17 %2.92 %2.80 %
Equipment lease financing3.74 %3.81 %3.83 %3.76 %3.90 %
Consumer4.69 %4.71 %4.85 %4.82 %4.78 %
Residential real estate3.10 %3.26 %3.15 %3.50 %3.53 %
Total loans3.19 %3.32 %3.32 %3.38 %3.38 %
Interest-earning deposits with banks0.19 %0.15 %0.16 %0.11 %0.10 %
Other interest-earning assets2.07 %2.14 %2.03 %2.46 %2.34 %
Total yield on interest-earning assets2.37 %2.36 %2.36 %2.40 %2.40 %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market0.03 %0.02 %0.03 %0.03 %0.03 %
Demand0.02 %0.02 %0.03 %0.03 %0.04 %
Savings0.04 %0.04 %0.04 %0.05 %0.06 %
Time deposits0.13 %0.11 %0.12 %0.20 %0.32 %
Total interest-bearing deposits0.04 %0.04 %0.04 %0.05 %0.06 %
Borrowed funds
Federal Home Loan Bank borrowings0.35 %0.43 %
Bank notes and senior debt1.02 %0.94 %0.97 %0.98 %1.04 %
Subordinated debt1.40 %1.28 %1.28 %1.35 %1.43 %
Other
0.97 %0.79 %0.93 %0.97 %1.21 %
Total borrowed funds1.10 %0.98 %1.03 %1.04 %1.09 %
Total rate on interest-bearing liabilities0.13 %0.13 %0.14 %0.16 %0.19 %
Interest rate spread2.24 %2.23 %2.22 %2.24 %2.21 %
Benefit from use of noninterest bearing sources (b)0.04 %0.04 %0.05 %0.05 %0.06 %
Net interest margin2.28 %2.27 %2.27 %2.29 %2.27 %
(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 March 31, 2022, December 31, 2021, September 30, 2021, June 30, 2021 and March 31, 2021 were $22 million, $22 million, $22 million, $15 million and $15 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)
March 31December 31September 30June 30March 31
In millions20222021202120212021
Commercial
Commercial and industrial
Manufacturing$25,035 $22,597 $22,760 $22,709 $20,032 
Retail/wholesale trade25,02722,80322,23822,59620,349
Service providers20,58420,75020,96922,30319,403
Financial services17,67417,95018,02215,94713,382
Real estate related (a)15,45915,12314,80914,94513,052
Technology, media & telecommunications10,68410,0708,9209,1957,746
Health care9,8109,94410,56711,7138,741
Transportation and warehousing7,2097,1367,3187,9676,751
Other industries26,39226,56027,13227,92520,342
Total commercial and industrial157,874 152,933 152,735 155,300 129,798 
Commercial real estate34,171 34,015 36,195 37,964 28,319 
Equipment lease financing6,216 6,130 6,257 6,376 6,389 
Total commercial198,261193,078195,187199,640164,506
Consumer
Residential real estate41,566 39,712 38,214 36,846 22,418 
Home equity24,185 24,061 24,479 25,174 23,493 
Automobile16,001 16,635 17,265 17,551 13,584 
Credit card6,464 6,626 6,466 6,528 5,675 
Education2,441 2,533 2,653 2,726 2,842 
Other consumer5,539 5,727 5,966 6,239 4,495 
Total consumer96,196 95,294 95,043 95,064 72,507 
Total loans$294,457 $288,372 $290,230 $294,704 $237,013 
(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 ended
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Allowance for loan and lease losses
Beginning balance$4,868 $5,355 $5,730 $4,714 $5,361 
Acquisition PCD reserves(59)1,115 
Gross charge-offs:
Commercial and industrial(41)(35)(46)(245)(59)
Commercial real estate(10)(2)(1)(28)(5)
Equipment lease financing(1)(4)(3)(1)(5)
Residential real estate(7)(4)(4)(3)(4)
Home equity(4)(4)(2)(7)(7)
Automobile(52)(49)(33)(35)(52)
Credit card(68)(60)(62)(65)(69)
Education(4)(4)(3)(3)(5)
Other consumer(64)(62)(52)(41)(37)
Total gross charge-offs(251)(224)(206)(428)(243)
Recoveries:
Commercial and industrial30 20 25 29 14 
Commercial real estate1 2 2 2 1 
Equipment lease financing3 3 2 3 3 
Residential real estate5 8 9 6 5 
Home equity21 23 25 21 17 
Automobile31 26 38 41 38 
Credit card12 10 13 11 12 
Education1 2 2 2 2 
Other consumer10 6 9 7 5 
Total recoveries114 100 125 122 97 
Net (charge-offs) / recoveries:
Commercial and industrial(11)(15)(21)(216)(45)
Commercial real estate(9)1 (26)(4)
Equipment lease financing2 (1)(1)2 (2)
Residential real estate(2)4 5 3 1 
Home equity17 19 23 14 10 
Automobile(21)(23)5 6 (14)
Credit card(56)(50)(49)(54)(57)
Education(3)(2)(1)(1)(3)
Other consumer(54)(56)(43)(34)(32)
Total net (charge-offs) (a)(137)(124)(81)(306)(146)
Provision for (recapture of) credit losses (b)(172)(362)(229)206 (502)
Other(1)(1)(6)1 1 
Ending balance$4,558 $4,868 $5,355 $5,730 $4,714 
Supplemental Information
Net charge-offs
Commercial net charge-offs$(18)$(16)$(21)$(240)$(51)
Consumer net charge-offs(119)(108)(60)(66)(95)
Total net charge-offs (a)$(137)$(124)$(81)$(306)$(146)
Net charge-offs to average loans (annualized)0.19 %0.17 %0.11 %0.48 %0.25 %
Commercial0.04 %0.03 %0.04 %0.55 %0.13 %
Consumer0.51 %0.45 %0.25 %0.33 %0.53 %
(a)    Amounts for the three months ended June 30, 2021 included $248 million attributable to BBVA, primarily related to commercial and industrial loans, which were largely the result of required purchase accounting treatment for the BBVA acquisition on June 1, 2021.
(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 ended
March 31December 31September 30June 30March 31
In millions2022202120212021 (a)2021
Provision for (recapture of) credit losses
Loans and leases$(172)$(362)$(229)$206 $(502)
Unfunded lending related commitments(23)16 1 92 (77)
Investment securities 1 25 26 
Other financial assets(14)19 4 2 
Total provision for (recapture of) credit losses$(208)$(327)$(203)$302 $(551)
(a)     Amounts include $1.0 billion of provision for credit losses that was recorded as part of the BBVA acquisition on June 1, 2021.

Table 8: Allowance for Credit Losses by Loan Class (a)
March 31, 2022December 31, 2021March 31, 2021

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$1,884 $157,874 1.19 %$1,879 $152,933 1.23 %$1,815 $129,798 1.40 %
Commercial real estate1,034 34,171 3.03 %1,216 34,015 3.57 %1,126 28,319 3.98 %
Equipment lease financing85 6,216 1.37 %90 6,130 1.47 %142 6,389 2.22 %
Total commercial3,003 198,261 1.51 %3,185 193,078 1.65 %3,083 164,506 1.87 %
Consumer
Residential real estate25 41,566 0.06 %21 39,712 0.05 %(17)22,418 (0.08)%
Home equity170 24,185 0.70 %149 24,061 0.62 %239 23,493 1.02 %
Automobile276 16,001 1.72 %372 16,635 2.24 %344 13,584 2.53 %
Credit card708 6,464 10.95 %712 6,626 10.75 %693 5,675 12.21 %
Education66 2,441 2.70 %71 2,533 2.80 %112 2,842 3.94 %
Other consumer310 5,539 5.60 %358 5,727 6.25 %260 4,495 5.78 %
Total consumer1,555 96,196 1.62 %1,683 95,294 1.77 %1,631 72,507 2.25 %
Total
4,558 $294,457 1.55 %4,868 $288,372 1.69 %4,714 $237,013 1.99 %
Allowance for unfunded lending related commitments
639 662 507 
Allowance for credit losses
$5,197 $5,530 $5,221 
Supplemental Information
Allowance for credit losses to total loans
1.76 %1.92 %2.20 %
Commercial1.81 %1.94 %2.12 %
Consumer1.67 %1.87 %2.39 %

(a)     Excludes allowances for investment securities and other financial assets, which together totaled $158 million, $171 million and $136 million at March 31, 2022, December 31, 2021 and March 31, 2021, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 8
Details of Nonperforming Assets (Unaudited)

Table 9: Nonperforming Assets by Type
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers$173 $188 $220 $206 $79 
Manufacturing70 52 62 65 55 
Retail/wholesale trade59 50 59 71 66 
Real estate related (a)39 64 49 78 48 
Health care37 46 56 71 19 
Technology, media & telecommunications36 33 37 62 43 
Transportation and warehousing28 18 21 18 18 
Other industries218 345 325 359 184 
Total commercial and industrial660 796 829 930 512 
Commercial real estate332 364 365 501 221 
Equipment lease financing6 8 10 15 16 
Total commercial998 1,168 1,204 1,446 749 
Consumer (b)
Residential real estate526 517 533 503 541 
Home equity576 596 592 626 656 
Automobile181 183 184 191 178 
Credit card8 7 7 7 7 
Other consumer9 9 8 6 7 
Total consumer1,300 1,312 1,324 1,333 1,389 
Total nonperforming loans (c)2,298 2,480 2,528 2,779 2,138 
OREO and foreclosed assets26 26 31 39 41 
Total nonperforming assets$2,324 $2,506 $2,559 $2,818 $2,179 
Nonperforming loans to total loans0.78 %0.86 %0.87 %0.94 %0.90 %
Nonperforming assets to total loans, OREO and foreclosed assets0.79 %0.87 %0.88 %0.96 %0.92 %
Nonperforming assets to total assets0.43 %0.45 %0.46 %0.51 %0.46 %
Allowance for loan and lease losses to nonperforming loans 198 %196 %212 %206 %220 %
(a)Represents loans related to customers in the real estate and construction industries.
(b)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.
(c)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
January 1, 2022 -October 1, 2021 -July 1, 2021 -April 1, 2021 -January 1, 2021 -
In millionsMarch 31, 2022December 31, 2021September 30, 2021June 30, 2021March 31, 2021
Beginning balance$2,506 $2,559 $2,818 $2,179 $2,337 
Acquired nonperforming assets (a)880 
New nonperforming assets346 395 365 207 249 
Charge-offs and valuation adjustments(62)(53)(71)(61)(70)
Principal activity, including paydowns and payoffs(274)(240)(333)(264)(186)
Asset sales and transfers to loans held for sale(21)(3)(30)(15)(86)
Returned to performing status(171)(152)(190)(108)(65)
Ending balance$2,324 $2,506 $2,559 $2,818 $2,179 
(a)Represents nonperforming assets acquired as a part of the BBVA acquisition on June 1, 2021 and includes $871 million of loans and $9 million of OREO and foreclosed assets. Our second quarter 2021 Form 10-Q included additional information on the BBVA acquisition.



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 COVID-19 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. Our 2021 Form 10-K included additional information on COVID-19 related loan modifications.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Commercial
Commercial and industrial$185$235$97$72$80
Commercial real estate684668512
Equipment lease financing20255321
Total commercial27330617080113
Consumer
Residential real estate
Non government insured 23931017818261
Government insured66698188101
Home equity4153454443
Automobile1091461149876
Credit card3949423731
Education
Non government insured 55556
Government insured
3638404143
Other consumer4735343111
Total consumer582705539526372
Total$855$1,011$709$606$485
Supplemental Information
Total accruing loans past due 30-59 days to total loans0.29 %0.35 %0.24 %0.21 %0.20 %
Commercial0.14 %0.16 %0.09 %0.04 %0.07 %
Consumer0.61 %0.74 %0.57 %0.55 %0.51 %
(a)Excludes loans held for sale.



THE PNC FINANCIAL SERVICES GROUP, INC.

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Accruing Loans Past Due (Unaudited) (Continued)

Table 12: Accruing Loans Past Due 60 to 89 Days (a)
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Commercial
Commercial and industrial$64$72$50$27$13
Commercial real estate4124231
Equipment lease financing12441
Total commercial10698563415
Consumer
Residential real estate
Non government insured 4778535313
Government insured3741455260
Home equity1618181720
Automobile2640232019
Credit card2833272424
Education
Non government insured
32323
Government insured
2123232022
Other consumer262215166
Total consumer204257207204167
Total$310$355$263$238$182
Supplemental Information
Total accruing loans past due 60-89 days to total loans0.11 %0.12 %0.09 %0.08 %0.08 %
Commercial0.05 %0.05 %0.03 %0.02 %0.01 %
Consumer0.21 %0.27 %0.22 %0.21 %0.23 %
(a)Excludes loans held for sale.




THE PNC FINANCIAL SERVICES GROUP, INC.

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Accruing Loans Past Due (Unaudited) (Continued)

Table 13: Accruing Loans Past Due 90 Days or More (a)
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Commercial
Commercial and industrial$105$132$56$45$63
Commercial real estate71112
Total commercial112133674763
Consumer
Residential real estate
Non government insured 4159334417
Government insured232269268297258
Automobile814436
Credit card6262535952
Education
Non government insured 22112
Government insured
6263606674
Other consumer151711147
Total consumer422486430484416
Total$534$619$497$531$479
Supplemental Information
Total accruing loans past due 90 days or more to total loans0.18 %0.21 %0.17 %0.18 %0.20 %
Commercial0.06 %0.07 %0.03 %0.02 %0.04 %
Consumer0.44 %0.51 %0.45 %0.51 %0.57 %
Total accruing loans past due$1,699$1,985$1,469$1,375$1,146
Commercial$491$537$293$161$191
Consumer$1,208$1,448$1,176$1,214$955
Total accruing loans past due to total loans0.58 %0.69 %0.51 %0.47 %0.48 %
Commercial0.25 %0.28 %0.15 %0.08 %0.12 %
Consumer1.26 %1.52 %1.24 %1.28 %1.32 %
(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. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. As a result of the BBVA acquisition, we have become a coast-to-coast Retail Bank. Our national expansion strategy is designed to grow customers with digitally-led banking and a thin branch network as we expand into new markets. Deposit products include checking, savings and money market accounts and certificates of deposit. 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 and capital markets 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. Within Treasury Management, PNC Global Transfers provides wholesale money transfer processing capabilities between the U.S. and Mexico and other countries primarily in Central America and South America. Capital markets products and services include foreign exchange, derivatives, fixed income, securities underwriting, loan syndications, mergers and acquisitions advisory and equity capital markets advisory related services. 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 comprised of two distinct 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, and 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, and retirement plan fiduciary investment services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 14: Period End Employees
March 31December 31September 30June 30March 31
20222021202120212021
Full-time employees
Retail Banking33,293 32,563 33,188 33,471 27,690 
Other full-time employees25,037 25,105 25,442 25,512 22,281 
Total full-time employees58,330 57,668 58,630 58,983 49,971 
Part-time employees
Retail Banking1,670 1,669 1,616 1,821 1,697 
Other part-time employees82 89 94 431 101 
Total part-time employees1,752 1,758 1,710 2,252 1,798 
Total60,082 59,426 60,340 61,235 51,769 


THE PNC FINANCIAL SERVICES GROUP, INC.

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Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months ended
March 31December 31September 30June 30March 31
In millions20222021202120212021
Income
Retail Banking$340 $362 $447 $232 $607 
Corporate & Institutional Banking956 1,334 1,123 809 1,058 
Asset Management Group102 106 114 87 99 
Other10 (509)(210)(37)52 
Net income excluding noncontrolling interests$1,408 $1,293 $1,474 $1,091 $1,816 
  
Revenue
Retail Banking$2,276 $2,408 $2,375 $2,203 $2,016 
Corporate & Institutional Banking1,964 2,281 2,306 1,959 1,808 
Asset Management Group386 388 397 356 322 
Other66 50 119 149 74 
Total revenue$4,692 $5,127 $5,197 $4,667 $4,220 

(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 ended
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Income Statement
Net interest income$1,531 $1,634 $1,713 $1,497 $1,362 
Noninterest income745 774 662 706 654 
Total revenue2,276 2,408 2,375 2,203 2,016 
Provision for (recapture of) credit losses(81)55 (113)214 (257)
Noninterest expense1,892 1,874 1,889 1,677 1,476 
Pretax earnings 465 479 599 312 797 
Income taxes109 112 140 73 183 
Noncontrolling interests16 5 12 7 7 
Earnings $340 $362 $447 $232 $607 
Average Balance Sheet
Loans held for sale$1,183 $1,425 $1,583 $1,405 $891 
Loans
Consumer
Residential real estate$31,528 $30,888 $30,702 $21,653 $17,468 
Home equity22,458 22,572 23,047 22,080 21,833 
Automobile16,274 16,944 17,377 14,888 13,890 
Credit card6,401 6,513 6,484 5,900 5,819 
Education2,532 2,620 2,712 2,812 2,938 
Other consumer2,348 2,612 2,892 2,175 1,898 
Total consumer 81,541 82,149 83,214 69,508 63,846 
Commercial 11,610 12,844 15,895 14,796 13,743 
Total loans$93,151 $94,993 $99,109 $84,304 $77,589 
Total assets$111,754 $113,782 $117,394 $100,948 $92,891 
Deposits
Noninterest-bearing $64,058 $65,510 $65,985 $54,260 $44,845 
Interest-bearing 201,021 197,312 196,006 178,946 163,389 
Total deposits$265,079 $262,822 $261,991 $233,206 $208,234 
Performance Ratios
Return on average assets1.23 %1.26 %1.51 %0.92 %2.65 %
Noninterest income to total revenue33 %32 %28 %32 %32 %
Efficiency83 %78 %80 %76 %73 %
(a)See note (a) on page 13.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 15
Retail Banking (Unaudited) (Continued)
Three months ended
March 31December 31September 30June 30March 31
Dollars in millions, except as noted20222021202120212021
Supplemental Noninterest Income Information
Asset management and brokerage $134 $131 $122 $110 $102 
Card and cash management$308 $347 $346 $324 $264 
Lending and deposit services $164 $157 $180 $148 $134 
Residential and commercial mortgage $99 $101 $147 $103 $105 
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)$135 $133 $139 $145 $117 
Serviced portfolio acquisitions$6 $2 $2 $33 $7 
MSR asset value (b)$1.3 $1.1 $1.1 $1.1 $1.0 
MSR capitalization value (in basis points) (b)98 81 81 77 83 
Servicing income: (in millions)
Servicing fees, net (c)$33 $14 $18 $(3)$5 
Mortgage servicing rights valuation, net of economic hedge$2 $2 $24 $24 $14 
Residential mortgage loan statistics
Loan origination volume (in billions)$5.1 $6.6 $7.4 $6.5 $4.3 
Loan sale margin percentage2.45 %2.55 %3.01 %2.67 %3.28 %
Percentage of originations represented by:
Purchase volume (d)42 %38 %47 %48 %34 %
Refinance volume58 %62 %53 %52 %66 %
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)64 %64 %66 %65 %66 %
Digital consumer customers (f)78 %79 %80 %80 %79 %
Credit-related statistics
Nonperforming assets $1,168 $1,220 $1,220 $1,245 $1,229 
Net charge-offs - loans and leases $141 $124 $82 $79 $108 
Other statistics
ATMs9,502 9,523 9,572 9,636 8,874 
Branches (g)2,591 2,629 2,712 2,724 2,137 
Brokerage account client assets (in billions) (h)$74 $78 $76 $83 $61 

(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 months ended.
(c)Servicing fees net of impact of decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan payments, prepayments, and loans that were paid down or 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)Excludes stand-alone 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.

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Table 17: Corporate & Institutional Banking (Unaudited) (a)
Three months ended
March 31December 31September 30June 30March 31
Dollars in millions20222021202120212021
Income Statement
Net interest income$1,160 $1,228 $1,250 $1,092 $1,001 
Noninterest income804 1,053 1,056 867 807 
Total revenue1,964 2,281 2,306 1,959 1,808 
Provision for (recapture of) credit losses(118)(369)(99)104 (282)
Noninterest expense837 975 980 813 711 
Pretax earnings1,245 1,675 1,425 1,042 1,379 
Income taxes 285 337 299 229 318 
Noncontrolling interests4 4 3 4 3 
Earnings$956 $1,334 $1,123 $809 $1,058 
Average Balance Sheet
Loans held for sale$628 $539 $541 $564 $691 
Loans
Commercial
Commercial and industrial $141,622 $137,079 $134,128 $121,232 $114,944 
Commercial real estate32,433 33,559 35,368 30,118 27,182 
Equipment lease financing6,099 6,184 6,300 6,332 6,332 
Total commercial 180,154 176,822 175,796 157,682 148,458 
Consumer8 12 20 13 9 
Total loans$180,162 $176,834 $175,816 $157,695 $148,467 
Total assets$200,724 $198,874 $202,268 $181,770 $170,531 
Deposits
Noninterest-bearing $86,178 $88,023 $85,869 $75,570 $66,666 
Interest-bearing 68,429 72,397 77,247 69,443 69,668 
Total deposits$154,607 $160,420 $163,116 $145,013 $136,334 
Performance Ratios
Return on average assets1.93 %2.66 %2.20 %1.79 %2.52 %
Noninterest income to total revenue41 %46 %46 %44 %45 %
Efficiency43 %43 %42 %42 %39 %
Other Information
Consolidated revenue from:
Treasury Management (b)$546 $560 $592 $523 $494 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c)$16 $42 $44 $29 $30 
Commercial mortgage loan servicing income (d)68 90 88 66 90 
Commercial mortgage servicing rights valuation, net of economic hedge13 16 14 33 17 
Total$97 $148 $146 $128 $137 
MSR asset value (e)$886 $740 $703 $682 $702 
Average loans by C&IB business
Corporate Banking$92,503 $87,284 $85,208 $77,645 $74,459 
Real Estate43,213 44,787 47,335 41,188 38,395 
Business Credit26,535 26,065 25,540 22,965 21,552 
Commercial Banking10,045 10,924 13,458 12,513 10,807 
Other7,866 7,774 4,275 3,384 3,254 
Total average loans$180,162 $176,834 $175,816 $157,695 $148,467 
Credit-related statistics
Nonperforming assets (e) $866 $1,007 $1,061 $1,274 $658 
Net charge-offs - loans and leases$(1)$(1)$13 $233 $44 

(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 ammortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
(e)Presented as of period end.

THE PNC FINANCIAL SERVICES GROUP, INC.

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Table 18: Asset Management Group (Unaudited) (a)
Three months ended
March 31December 31September 30June 30March 31
Dollars in millions, except as noted20222021202120212021
Income Statement
Net interest income$138 $130 $141 $112 $93 
Noninterest income248 258 256 244 229 
Total revenue386 388 397 356 322 
Provision for (recapture of) credit losses 2 (15)(6)23 (9)
Noninterest expense251 265 255 219 202 
Pretax earnings133 138 148 114 129 
Income taxes 31 32 34 27 30 
Earnings$102 $106 $114 $87 $99 
Average Balance Sheet
Loans
Consumer
Residential real estate $6,989 $6,295 $5,727 $4,439 $3,635 
Other consumer4,541 4,535 4,544 4,190 4,008 
Total consumer 11,530 10,830 10,271 8,629 7,643 
Commercial1,848 2,093 2,693 1,415 756 
Total loans$13,378 $12,923 $12,964 $10,044 $8,399 
Total assets$13,801 $13,317 $13,805 $10,640 $8,873 
Deposits
Noninterest-bearing $3,458 $3,025 $4,332 $2,537 $1,754 
Interest-bearing29,830 26,318 24,984 20,894 18,825 
Total deposits$33,288 $29,343 $29,316 $23,431 $20,579 
Performance Ratios
Return on average assets3.00 %3.16 %3.28 %3.28 %4.52 %
Noninterest income to total revenue64 %66 %64 %69 %71 %
Efficiency65 %68 %64 %62 %63 %
Other Information
Nonperforming assets (b) $72 $62 $80 $85 $68 
Net charge-offs (recoveries) - loans and leases$2 $1 $(1)$2 
Brokerage account client assets (in billions) (b)$5 $5 $5 $5 
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management$182 $192 $183 $183 $173 
Nondiscretionary client assets under administration165 175 170 172 161 
Total$347 $367 $353 $355 $334 
Discretionary client assets under management
PNC Private Bank$115 $123 $117 $119 $110 
Institutional Asset Management67 69 66 64 63 
Total$182 $192 $183 $183 $173 
(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).

BBVA – BBVA USA Bancshares, Inc.

BBVA, S.A. – Banco Bilbao Vizcaya Argentaria, S.A.

BBVA USA – BBVA USA, the Alabama-chartered bank subsidiary of BBVA USA Bancshares, Inc.

BlackRock – BlackRock, Inc.

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.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 19
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.

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; Consumer services; Corporate services; Residential mortgage; and Service charges on deposits.

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. FICO scores are updated on a periodic basis.

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, including TDRs which have not returned to performing status. 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. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to

THE PNC FINANCIAL SERVICES GROUP, INC.

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interest income earned on other taxable investments. This adjustment is not permitted under GAAP on the Consolidated Income Statement.

Troubled debt restructuring (TDR) - A loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties.

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.