▪	PNC received approval in January 2020 from the Federal Reserve to repurchase up to an additional $1.0 billion in common shares through the end of the second quarter of 2020. This is in addition to the share repurchase programs of up to $4.3 billion for the four-quarter period beginning in the third quarter of 2019, which were announced in June 2019.

▪	Net income was $1.4 billion, a decrease of $11 million, or 1 percent.

▪	Total revenue of $4.6 billion grew $116 million, or 3 percent.

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▪	Net interest income of $2.5 billion decreased $16 million, or 1 percent, due to lower loan and securities yields substantially offset by lower rates on deposits and borrowings.

–	Net interest margin decreased 6 basis points to 2.78 percent.

▪	Noninterest income of $2.1 billion increased $132 million, or 7 percent.

–	Fee income of $1.7 billion increased $18 million, or 1 percent, driven by higher asset management revenue and corporate service fees partially offset by lower residential mortgage revenue and consumer service fees.

–	Other noninterest income of $456 million increased $114 million reflecting higher revenue from private equity investments and a gain on the sale of proprietary mutual funds partially offset by negative derivative fair value adjustments related to Visa Class B common shares.

▪	Noninterest expense of $2.8 billion increased $139 million, or 5 percent, driven by equipment expense for technology-related write-offs and benefits expense, including a year-end employee award of an additional contribution to health savings accounts.

▪	Provision for credit losses of $221 million increased $38 million, or 21 percent, due to both the consumer lending portfolio and reserves attributable to certain commercial credits.

▪	The effective tax rate was 15.1 percent for the fourth quarter compared with 17.5 percent for the third quarter, and 16.4 percent for the full year 2019.

▪	Average loans increased $1.2 billion to $238.9 billion in the fourth quarter compared with the third quarter.

–	Average consumer lending balances of $78.1 billion increased $1.9 billion, or 3 percent, due to growth in residential mortgage, auto, credit card and unsecured installment loans partially offset by lower education loans.

–	Average commercial lending balances of $160.8 billion declined $.7 billion primarily in PNC's real estate business, including a decrease in multifamily agency warehouse lending balances, partially offset by growth in PNC's corporate banking business.

▪	Overall credit quality remained historically strong.

–	Nonperforming assets of $1.8 billion at December 31, 2019 decreased $95 million, or 5 percent, compared with September 30, 2019.

–	Net charge-offs were $209 million for the fourth quarter compared with $155 million for the third quarter as both consumer and commercial lending net charge-offs increased.

–	The allowance for loan and lease losses to total loans remained relatively stable at 1.14 percent at December 31, 2019 compared with 1.15 percent at September 30, 2019.

▪	Average deposits increased $8.7 billion, or 3 percent, to $287.8 billion in the fourth quarter compared with the third quarter due to higher commercial deposits reflecting seasonal growth and the full quarter impact of a new sweep deposit product offering for current asset management clients.

▪	Average investment securities decreased $1.7 billion, or 2 percent, to $83.5 billion in the fourth quarter compared with the third quarter.

▪	Average balances held with the Federal Reserve of $23.0 billion increased $7.7 billion compared with the third quarter.

▪	PNC returned $1.5 billion of capital to shareholders in the fourth quarter through repurchases of 6.5 million common shares for $1.0 billion and dividends on common shares of $.5 billion.

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–	For the full year 2019, PNC returned $5.4 billion of capital to shareholders through repurchases of 25.9 million common shares for $3.5 billion and dividends on common shares of $1.9 billion.

▪	PNC maintained a strong capital position.

–	The Basel III common equity Tier 1 capital ratio was an estimated 9.5 percent at December 31, 2019 and 9.6 percent at September 30, 2019.

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▪	Average loans increased 2 percent compared with the third quarter and 6 percent compared with fourth quarter 2018 due to growth in residential mortgage, auto, credit card and unsecured installment loans partially offset by lower education loans.

▪	Average deposits increased 1 percent compared with the third quarter and 6 percent compared with fourth quarter 2018 due to increases in savings and demand deposits partially offset by lower money market deposits reflecting a shift to relationship-based savings products.

▪	Net charge-offs were $154 million for the fourth quarter of 2019 compared with $128 million in the third quarter and $112 million in the fourth quarter of 2018 with increases primarily in credit card and auto loan portfolio net charge-offs.

▪	Residential mortgage loan origination volume was $3.5 billion for the fourth quarter of 2019 compared with $3.4 billion for the third quarter and $1.6 billion for the fourth quarter of 2018. Approximately 40 percent of fourth quarter 2019 volume was for home purchase transactions compared with 44 percent and 67 percent for the third quarter of 2019 and fourth quarter of 2018, respectively.

▪	The third party residential mortgage servicing portfolio was $120 billion at December 31, 2019 compared with $123 billion at September 30, 2019 and $125 billion at December 31, 2018. Residential mortgage loan servicing acquisitions were $3 billion for both the fourth and third quarters of 2019 and $2 billion for the fourth quarter of 2018.

▪	Approximately 71 percent of consumer customers used non-teller channels for the majority of their transactions during the fourth quarter of 2019 compared with 70 percent in the third quarter and 67 percent in the fourth quarter of 2018.

▪	Deposit transactions via ATM and mobile channels were 58 percent of total deposit transactions in both the fourth and third quarters of 2019 compared with 55 percent in the fourth quarter of 2018.

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Average loans decreased $.7 billion, or less than 1 percent, compared with the third quarter due to a decrease in multifamily agency warehouse lending partially offset by loan growth in PNC’s corporate banking business. Average loans grew 6 percent compared with the fourth quarter of 2018 driven by loan growth in PNC’s corporate banking and business credit businesses partially offset by a decrease in multifamily agency warehouse lending.

▪	Average deposits increased 3 percent over the third quarter reflecting seasonal growth and increased 7 percent compared with the fourth quarter of 2018 due to growth in interest-bearing deposits, including a shift from noninterest-bearing demand deposits.

▪	Net charge-offs were $47 million in the fourth quarter of 2019 compared with $30 million in the third quarter and $2 million in the fourth quarter of 2018.

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(a)	Dividends are payable quarterly other than the Series O, Series R and Series S preferred stock, which are payable semiannually, with the Series O payable in different quarters than the Series R and Series S preferred stock.

(b)	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.

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(a)

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 generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 were $23 million, $25 million and $28 million, respectively. The taxable equivalent adjustments to net interest income for the twelve months ended December 31, 2019 and December 31, 2018 were $103 million and $115 million, respectively.

(b)	Calculated as noninterest expense divided by total revenue.

(c)

Our business information is presented based on our internal management reporting practices. Net interest income in business segment results reflect 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.

(d)	Includes earnings and gains or losses related to PNC's equity investment in BlackRock and residual activities that do not meet the criteria for disclosure as a separate reportable business. We provide additional information on these activities in our Form 10-K and Form 10-Q filings with the SEC.

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(a)	Amounts include assets and liabilities for which we have elected the fair value option. Our third quarter 2019 Form 10-Q included, and our 2019 Form 10-K will include, additional information regarding these Consolidated Balance Sheet line items.

(b)	Amounts include our equity investment in BlackRock.

(c)	See the Tangible Book Value per Common Share table on page 18 for additional information.

(d)	All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented and calculated based on the standardized approach. See Capital Ratios on page 17 for additional information. The ratios as of December 31, 2019 are estimated.

(e)	The 2019 and 2018 Basel III Total risk-based capital ratios include nonqualifying trust preferred capital securities of $60 million and $80 million, respectively, that are subject to a phase-out period that runs through 2021.

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(a)	All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented.

(b)	Basel III standardized approach risk-weighted assets are based on the Basel III standardized approach rules and include credit and market risk-weighted assets.

(c)	Basel III advanced approaches risk-weighted assets are based on the Basel III advanced approaches rules, and include credit, market and operational risk-weighted assets. During the parallel run qualification phase, PNC has refined the data, models and internal processes used as part of the advanced approaches for determining risk-weighted assets.

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▪	Our businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:

–	Changes in interest rates and valuations in debt, equity and other financial markets.

–	Disruptions in the U.S. and global financial markets.

–	Actions by the Federal Reserve Board, U.S. Treasury and other government agencies, including those that impact money supply and market interest rates.

–	Changes in customer behavior due to changing business and economic conditions or legislative or regulatory initiatives.

–	Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness.

–	Impacts of tariffs and other trade policies of the U.S. and its global trading partners.

–	Slowing or reversal of the current U.S. economic expansion.

–	Commodity price volatility.

▪	Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account potential legal and regulatory contingencies. These statements are based on our views that:

–	U.S. economic growth, after accelerating a few years ago, has slowed since mid-2018 and is expected to slow further in 2020. Slower global economic growth, trade tensions, reduced fiscal stimulus, and aerospace production cuts are the primary drivers of softer U.S. growth.

–	Job growth will continue in 2020, but at a slower pace from 2019 due to both difficulty in finding workers and slower economic growth. The unemployment rate is expected to increase slightly in the near term, but the labor market will remain tight, pushing wages higher and supporting continued gains in consumer spending.

–	Near-term risks are generally to the downside, including a further softening in the global economy, a further escalation in trade tensions, and geopolitical concerns. But there are some upside risks as well, such as a quick U.S.-China trade deal and stronger labor force growth.

–	Inflation slowed in 2019, to below the Federal Open Market Committee’s (FOMC’s) 2 percent objective, but is expected to gradually increase over the next two years.

–	We do not expect further federal funds rate cuts in 2020. The federal funds rate is modestly positive for near-term economic growth in its current range of 1.50 to 1.75 percent.

▪

PNC’s ability to take certain capital actions, including returning capital to shareholders, is subject to review by the Federal Reserve Board as part of PNC’s comprehensive capital plan for the applicable period in connection with the Federal Reserve Board’s Comprehensive Capital Analysis and Review (CCAR) process and to the acceptance of such capital plan and non-objection to such capital actions by the Federal Reserve Board.

▪

PNC’s regulatory capital ratios in the future will depend on, among other things, the company’s financial performance, the scope and terms of final capital regulations then in effect and management actions affecting the composition of PNC’s balance sheet. In addition, PNC’s ability to determine, evaluate and forecast regulatory capital ratios, and to take actions (such as capital distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development, validation and regulatory review of related models.

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▪

Legal and regulatory developments could have an impact on our ability to operate our businesses, financial condition, results of operations, competitive position, reputation, or pursuit of attractive acquisition opportunities. Reputational impacts could affect matters such as business generation and retention, liquidity, funding, and ability to attract and retain management. These developments could include:

–	Changes to laws and regulations, including changes affecting oversight of the financial services industry, consumer protection, bank capital and liquidity standards, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles.

–	Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries. These matters may result in monetary judgments or settlements or other remedies, including fines, penalties, restitution or alterations in our business practices, and in additional expenses and collateral costs, and may cause reputational harm to PNC.

–	Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with governmental agencies.

–	Impact on business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of our intellectual property protection in general.

▪	Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital and liquidity standards.

▪	Business and operating results also include impacts relating to our equity interest in BlackRock, Inc. and rely to a significant extent on information provided to us by BlackRock. Risks and uncertainties that could affect BlackRock are discussed in more detail by BlackRock in its SEC filings.

▪

We grow our business in part through acquisitions and new strategic initiatives. Risks and uncertainties include those presented by the nature of the business acquired and strategic initiative, including in some cases those associated with our entry into new businesses or new geographic or other markets and risks resulting from our inexperience in those new areas, as well as risks and uncertainties related to the acquisition transactions themselves, regulatory issues, and the integration of the acquired businesses into PNC after closing.

▪	Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues. Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet competitive demands.

▪	Business and operating results can also be affected by widespread natural and other disasters, pandemics, dislocations, terrorist activities, system failures, security breaches, cyberattacks or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically.