Exhibit 99.1

pncbanklogoa14.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
SECOND QUARTER 2020
(Unaudited)




THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2020
(UNAUDITED)



Consolidated Results:
Page
7-8
9-10
11-12
 
 
Business Segment Results:
 
15-16
 
 
19-21


The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 15, 2020. 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 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 primarily in markets across the Mid-Atlantic, Midwest and Southeast. PNC also has strategic international offices in four countries outside the U.S.

DISCONTINUED OPERATIONS
On May 15, 2020, PNC completed the sale of its 31.6 million shares of BlackRock, Inc., common and preferred stock through a registered secondary offering. In addition, BlackRock repurchased 2.65 million shares from PNC. The total proceeds from the sale were $14.2 billion in cash, net of $.2 billion in expenses, and resulted in a gain on sale of $4.3 billion. Additionally, PNC contributed 500,000 BlackRock shares to the PNC Foundation on May 18, 2020. As a result, PNC has divested its entire holding in BlackRock. PNC and its affiliates only hold shares of BlackRock stock in a fiduciary capacity for clients of PNC and its affiliates. Activity for BlackRock for all periods presented on the Consolidated Income Statement have been reclassified to discontinued operations and prior period BlackRock investment balances have been reclassified to the Asset held for sale line on the Consolidated Balance Sheet in accordance with Accounting Standard Codification (ASC) 205-20, Presentation of Financial Statements - Discontinued Operations.




THE PNC FINANCIAL SERVICES GROUP, INC.
 
Cross Reference Index to Second Quarter 2020 Financial Supplement (Unaudited)
Financial Supplement Table Reference
 
 
 
Table
Description
Page
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
15-16
19
20


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 1 


Table 1: Consolidated Income Statement (Unaudited)
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
In millions, except per share data
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Interest Income
 
 

 
 
 
 
 

 
 
 
 
 
Loans
$
2,257

 
$
2,480

 
$
2,573

 
$
2,678

 
$
2,672

 
 
$
4,737

 
$
5,274

Investment securities
527

 
582

 
560

 
617

 
629

 
 
1,109

 
1,249

Other
71

 
138

 
201

 
208

 
196

 
 
209

 
402

Total interest income
2,855

 
3,200

 
3,334

 
3,503

 
3,497

 
 
6,055

 
6,925

Interest Expense


 


 
 
 
 
 


 
 


 
 
Deposits
141

 
375

 
468

 
531

 
515

 
 
516

 
987

Borrowed funds
187

 
314

 
378

 
468

 
484

 
 
501

 
965

Total interest expense
328

 
689

 
846

 
999

 
999

 
 
1,017

 
1,952

Net interest income
2,527

 
2,511

 
2,488

 
2,504

 
2,498

 
 
5,038

 
4,973

Noninterest Income


 


 
 
 
 
 


 
 


 
 
Asset management
199

 
201

 
216

 
213

 
221

 
 
400

 
433

Consumer services
330

 
377

 
390

 
402

 
392

 
 
707

 
763

Corporate services
512

 
526

 
499

 
469

 
484

 
 
1,038

 
946

Residential mortgage
158

 
210

 
87

 
134

 
82

 
 
368

 
147

Service charges on deposits
79

 
168

 
185

 
178

 
171

 
 
247

 
339

Other (a)
271

 
343

 
456

 
342

 
367

 
 
614

 
675

Total noninterest income
1,549

 
1,825

 
1,833

 
1,738

 
1,717

 
 
3,374

 
3,303

Total revenue
4,076

 
4,336

 
4,321

 
4,242

 
4,215

 
 
8,412

 
8,276

Provision For Credit Losses
2,463

 
914

 
221

 
183

 
180

 
 
3,377

 
369

Noninterest Expense


 


 
 
 
 
 


 
 


 
 
Personnel
1,373

 
1,369

 
1,468

 
1,400

 
1,365

 
 
2,742

 
2,779

Occupancy
199

 
207

 
201

 
206

 
212

 
 
406

 
427

Equipment
301

 
287

 
348

 
291

 
298

 
 
588

 
571

Marketing
47

 
58

 
77

 
76

 
83

 
 
105

 
148

Other
595

 
622

 
668

 
650

 
653

 
 
1,217

 
1,264

Total noninterest expense
2,515

 
2,543

 
2,762

 
2,623

 
2,611

 
 
5,058

 
5,189

Income (loss) from continuing operations before income taxes and noncontrolling interests
(902
)
 
879

 
1,338

 
1,436

 
1,424

 
 
(23
)
 
2,718

Income taxes (benefit) from continuing operations
(158
)
 
120

 
195

 
255

 
239

 
 
(38
)
 
451

Net income (loss) from continuing operations
(744
)
 
759

 
1,143

 
1,181

 
1,185

 
 
15

 
2,267

Income from discontinued operations before taxes
5,596

 
181

 
288

 
251

 
224

 
 
5,777

 
449

Income taxes from discontinued operations
1,197

 
25

 
50

 
40

 
35

 
 
1,222

 
71

Net income from discontinued operations
4,399

 
156

 
238

 
211

 
189

 
 
4,555

 
378

Net income
3,655

 
915

 
1,381

 
1,392

 
1,374

 
 
4,570

 
2,645

Less: Net income attributable to noncontrolling interests
7

 
7

 
14

 
13

 
12

 
 
14

 
22

Preferred stock dividends (b)
55

 
63

 
55

 
63

 
55

 
 
118

 
118

Preferred stock discount accretion and
redemptions
1

 
1

 
1

 
1

 
1

 
 
2

 
2

Net income attributable to common shareholders
$
3,592

 
$
844

 
$
1,311

 
$
1,315

 
$
1,306

 
 
$
4,436

 
$
2,503

Earnings Per Common Share


 
 
 
 
 
 
 
 
 
 


 
 
Basic earnings (loss) from continuing operations
$
(1.90
)
 
$
1.59

 
$
2.44

 
$
2.47

 
$
2.47

 
 
$
(.29
)
 
$
4.68

Basic earnings from discontinued operations
10.28

 
.37

 
.54

 
.48

 
.42

 
 
10.60

 
.83

Total basic earnings
$
8.40

 
$
1.96

 
$
2.98

 
$
2.95

 
$
2.89

 
 
$
10.33

 
$
5.51

Diluted earnings (loss) from continuing operations
$
(1.90
)
 
$
1.59

 
$
2.43

 
$
2.47

 
$
2.47

 
 
$
(.29
)
 
$
4.67

Diluted earnings from discontinued operations
10.28

 
.36

 
.54

 
.47

 
.41

 
 
10.59

 
.82

Total diluted earnings
$
8.40

 
$
1.95

 
$
2.97

 
$
2.94

 
$
2.88

 
 
$
10.32

 
$
5.49

Average Common Shares Outstanding


 
 
 
 
 
 
 
 
 
 


 
 
Basic
426

 
429

 
437

 
444

 
451

 
 
428

 
453

Diluted
426

 
430

 
438

 
445

 
452

 
 
428

 
454

Efficiency
62
%
 
59
%
 
64
%
 
62
%
 
62
%
 
 
60
%
 
63
%
Noninterest income to total revenue
38
%
 
42
%
 
42
%
 
41
%
 
41
%
 
 
40
%
 
40
%
Effective tax rate from continuing operations (c)
17.5
%
 
13.7
%
 
14.6
%
 
17.8
%
 
16.8
%
 
 
165.2
%
 
16.6
%

(a)
Includes net gains on sales of securities of $40 million, $182 million, $12 million, $3 million, and $20 million for the quarters ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively, and $222 million and $32 million for the six months ended June 30, 2020 and June 30, 2019, respectively.
(b)
Dividends are payable quarterly other than 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.
(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)
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
In millions, except par value
2020
 
2020
 
2019
 
2019
 
2019
Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
6,338

 
$
7,493

 
$
5,061

 
$
5,671

 
$
5,416

Interest-earning deposits with banks (a)
50,233

 
19,986

 
23,413

 
19,036

 
18,362

Loans held for sale (b)
1,443

 
1,693

 
1,083

 
1,872

 
1,144

Asset held for sale (c)
 
 
8,511

 
8,558

 
8,321

 
8,184

Investment securities – available for sale
97,052

 
89,077

 
69,163

 
69,057

 
69,355

Investment securities – held to maturity
1,441

 
1,469

 
17,661

 
18,826

 
18,948

Loans (b)
258,236

 
264,643

 
239,843

 
237,377

 
237,215

Allowance for loan and lease losses (d)
(5,928
)
 
(3,944
)
 
(2,742
)
 
(2,738
)
 
(2,721
)
Net loans
252,308

 
260,699

 
237,101

 
234,639

 
234,494

Equity investments
4,943

 
4,694

 
5,176

 
5,004

 
4,817

Mortgage servicing rights
1,067

 
1,082

 
1,644

 
1,483

 
1,627

Goodwill
9,233

 
9,233

 
9,233

 
9,233

 
9,221

Other (b)
34,920

 
41,556

 
32,202

 
35,774

 
34,193

Total assets
$
458,978

 
$
445,493

 
$
410,295

 
$
408,916

 
$
405,761

Liabilities
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
Noninterest-bearing
$
99,458

 
$
81,614

 
$
72,779

 
$
74,077

 
$
69,867

Interest-bearing
246,539

 
223,590

 
215,761

 
211,506

 
203,393

Total deposits
345,997

 
305,204

 
288,540

 
285,583

 
273,260

Borrowed funds
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
8,500

 
23,491

 
16,341

 
21,901

 
29,376

Bank notes and senior debt
27,704

 
31,438

 
29,010

 
27,148

 
27,694

Subordinated debt
6,500

 
6,475

 
6,134

 
5,473

 
5,406

Other (b)
4,322

 
11,995

 
8,778

 
6,832

 
6,549

Total borrowed funds
47,026

 
73,399

 
60,263

 
61,354

 
69,025

Allowance for unfunded lending related commitments (d)
662

 
450

 
318

 
304

 
291

Accrued expenses and other liabilities
12,345

 
17,150

 
11,831

 
12,220

 
13,804

Total liabilities
406,030

 
396,203

 
360,952

 
359,461

 
356,380

Equity
 
 
 
 
 
 
 
 
 
Preferred stock (e)
 
 
 
 
 
 
 
 
 
Common stock - $5 par value
 
 
 
 
 
 
 
 
 
Authorized 800 shares, issued 542 shares
2,712

 
2,712

 
2,712

 
2,711

 
2,711

Capital surplus
16,284

 
16,288

 
16,369

 
16,297

 
16,248

Retained earnings
44,986

 
41,885

 
42,215

 
41,413

 
40,616

Accumulated other comprehensive income
3,069

 
2,518

 
799

 
837

 
631

Common stock held in treasury at cost:117, 118, 109, 103 and 95 shares
(14,128
)
 
(14,140
)
 
(12,781
)
 
(11,838
)
 
(10,866
)
Total shareholders’ equity
52,923

 
49,263

 
49,314

 
49,420

 
49,340

Noncontrolling interests
25

 
27

 
29

 
35

 
41

Total equity
52,948

 
49,290

 
49,343

 
49,455

 
49,381

Total liabilities and equity
$
458,978

 
$
445,493

 
$
410,295

 
$
408,916

 
$
405,761

(a)
Amounts include balances held with the Federal Reserve Bank of Cleveland of $50.0 billion, $19.6 billion, $23.2 billion, $18.8 billion and $18.1 billion as of June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively.
(b)
Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information regarding these items.
(c)
Represents our held for sale investment in BlackRock. In the second quarter of 2020, PNC divested its entire holding in BlackRock. Prior period BlackRock investment balances have been reclassified to the Asset held for sale line in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Our second quarter 2020 Form 10-Q will include additional information.
(d)
Amounts as of June 30, 2020 and March 31, 2020 reflect the impact of adopting Accounting Standards Update 2016-13, Financial Instruments - Credit Losses, which is commonly referred to as the Current Expected Credit Losses (CECL) standard and our transition from an incurred loss methodology for these reserves to an expected credit loss methodology. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of this standard.
(e)
Par value less than $.5 million at each date.



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 3 

Table 3: Average Consolidated Balance Sheet (Unaudited) (a)
 
 
 
 
 
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
In millions
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Assets

 

 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:

 

 
 
 
 
 
 
 
 
 
 
 
Investment securities

 

 
 
 
 
 
 
 
 
 
 
 
Securities available for sale

 

 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 
 
 
 
 
 
 
 
 
 
 
Agency
$
52,500

 
$
49,636

 
$
33,937

 
$
32,926

 
$
30,169

 
 
$
51,068

 
$
29,589

Non-agency
1,529

 
1,617

 
1,582

 
1,716

 
1,801

 
 
1,573

 
1,845

Commercial mortgage-backed
7,232

 
6,734

 
6,054

 
5,728

 
5,545

 
 
6,983

 
5,457

Asset-backed
5,309

 
5,003

 
5,059

 
5,208

 
5,395

 
 
5,156

 
5,266

U.S. Treasury and government agencies
15,457

 
15,938

 
15,966

 
17,573

 
18,815

 
 
15,697

 
18,529

Other
4,952

 
4,024

 
2,849

 
3,053

 
3,237

 
 
4,488

 
3,453

Total securities available for sale
86,979

 
82,952

 
65,447

 
66,204

 
64,962

 
 
84,965

 
64,139

Securities held to maturity


 


 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 
14,943

 
15,768

 
15,350

 
 

 
15,487

Commercial mortgage-backed

 

 
498

 
544

 
570

 
 

 
585

Asset-backed
22

 
51

 
54

 
79

 
172

 
 
37

 
175

U.S. Treasury and government agencies
783

 
779

 
774

 
769

 
765

 
 
781

 
763

Other
646

 
640

 
1,794

 
1,802

 
1,822

 
 
643

 
1,834

Total securities held to maturity
1,451

 
1,470

 
18,063

 
18,962

 
18,679

 
 
1,461

 
18,844

Total investment securities
88,430

 
84,422

 
83,510

 
85,166

 
83,641

 
 
86,426

 
82,983

Loans


 


 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
153,595

 
128,723

 
124,876

 
125,356

 
124,441

 
 
141,159

 
121,907

Commercial real estate
28,707

 
28,275

 
28,670

 
28,855

 
28,423

 
 
28,491

 
28,285

Equipment lease financing
7,035

 
7,066

 
7,199

 
7,272

 
7,283

 
 
7,051

 
7,274

Consumer
56,485

 
57,680

 
56,765

 
55,702

 
55,202

 
 
57,082

 
55,099

Residential real estate
22,292

 
21,828

 
21,341

 
20,497

 
19,496

 
 
22,060

 
19,147

Total loans
268,114

 
243,572

 
238,851

 
237,682

 
234,845

 
 
255,843

 
231,712

Interest-earning deposits with banks (b)
34,600

 
17,569

 
23,316

 
15,632

 
13,469

 
 
26,085

 
14,238

Other interest-earning assets
10,867

 
9,468

 
11,371

 
14,094

 
13,145

 
 
10,167

 
12,113

Total interest-earning assets
402,011

 
355,031

 
357,048

 
352,574

 
345,100

 
 
378,521

 
341,046

Noninterest-earning assets
55,302

 
57,405

 
54,371

 
54,135

 
51,862

 
 
56,353

 
50,415

Total assets
$
457,313

 
$
412,436

 
$
411,419

 
$
406,709

 
$
396,962

 
 
$
434,874

 
$
391,461

Liabilities and Equity


 


 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:


 


 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits


 


 
 
 
 
 
 
 
 
 
 
 
Money market
$
61,346

 
$
53,287

 
$
56,209

 
$
56,271

 
$
54,814

 
 
$
57,317

 
$
54,758

Demand
82,881

 
70,931

 
69,496

 
65,444

 
64,431

 
 
76,906

 
63,958

Savings
75,345

 
69,977

 
66,827

 
64,054

 
61,949

 
 
72,661

 
60,394

Time deposits
21,873

 
21,141

 
21,600

 
21,173

 
20,040

 
 
21,506

 
19,430

Total interest-bearing deposits
241,445

 
215,336

 
214,132

 
206,942

 
201,234

 
 
228,390

 
198,540

Borrowed funds


 


 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
12,559

 
13,440

 
18,944

 
25,883

 
22,681

 
 
13,000

 
22,089

Bank notes and senior debt
28,298

 
29,988

 
27,403

 
27,409

 
26,865

 
 
29,143

 
26,145

Subordinated debt
5,937

 
5,934

 
5,760

 
5,189

 
5,526

 
 
5,935

 
5,704

Other
6,435

 
7,826

 
7,926

 
5,452

 
7,263

 
 
7,131

 
7,128

Total borrowed funds
53,229

 
57,188

 
60,033

 
63,933

 
62,335

 
 
55,209

 
61,066

Total interest-bearing liabilities
294,674

 
272,524

 
274,165

 
270,875

 
263,569

 
 
283,599

 
259,606

Noninterest-bearing liabilities and equity:


 


 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
93,776

 
74,396

 
73,626

 
72,149

 
71,648

 
 
84,086

 
71,526

Accrued expenses and other liabilities
16,989

 
16,437

 
14,541

 
14,529

 
13,122

 
 
16,712

 
12,187

Equity
51,874

 
49,079

 
49,087

 
49,156

 
48,623

 
 
50,477

 
48,142

Total liabilities and equity
$
457,313

 
$
412,436

 
$
411,419

 
$
406,709

 
$
396,962

 
 
$
434,874

 
$
391,461


(a)
Calculated using average daily balances.
(b)
Amounts include average balances held with the Federal Reserve Bank of Cleveland of $34.2 billion, $17.3 billion, $23.0 billion, $15.3 billion and $13.2 billion for the three months ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively, and $25.8 billion and $14.0 billion for the six months ended June 30, 2020 and June 30, 2019, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 4 

Table 4: Details of Net Interest Margin (Unaudited)
 
 
 
 
 
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
 
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Average yields/rates (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Yield on interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency
2.29
%
 
2.63
%
 
2.48
%
 
2.70
%
 
2.93
%
 
 
2.45
%
 
2.93
%
Non-agency
7.13
%
 
7.87
%
 
8.09
%
 
8.89
%
 
7.99
%
 
 
7.51
%
 
7.64
%
Commercial mortgage-backed
2.59
%
 
2.95
%
 
2.30
%
 
2.97
%
 
3.06
%
 
 
2.76
%
 
3.09
%
Asset-backed
2.60
%
 
3.05
%
 
3.26
%
 
3.31
%
 
3.34
%
 
 
2.82
%
 
3.35
%
U.S. Treasury and government agencies
1.77
%
 
2.29
%
 
2.31
%
 
2.44
%
 
2.48
%
 
 
2.03
%
 
2.49
%
Other
3.47
%
 
3.69
%
 
3.36
%
 
3.41
%
 
3.33
%
 
 
3.57
%
 
3.34
%
Total securities available for sale
2.39
%
 
2.77
%
 
2.65
%
 
2.90
%
 
3.01
%
 
 
2.58
%
 
3.01
%
Securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 
2.63
%
 
2.78
%
 
2.93
%
 
 

 
2.97
%
Commercial mortgage-backed

 

 
4.44
%
 
3.68
%
 
3.57
%
 
 

 
3.55
%
Asset-backed
2.38
%
 
2.77
%
 
3.02
%
 
5.48
%
 
3.92
%
 
 
2.65
%
 
3.88
%
U.S. Treasury and government agencies
2.84
%
 
2.84
%
 
2.86
%
 
2.86
%
 
2.84
%
 
 
2.84
%
 
2.83
%
Other
4.27
%
 
4.48
%
 
4.47
%
 
4.40
%
 
4.44
%
 
 
4.38
%
 
4.42
%
Total securities held to maturity
3.47
%
 
3.56
%
 
2.87
%
 
2.98
%
 
3.10
%
 
 
3.51
%
 
3.13
%
Total investment securities
2.41
%
 
2.78
%
 
2.70
%
 
2.91
%
 
3.03
%
 
 
2.59
%
 
3.04
%
Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
2.83
%
 
3.62
%
 
3.88
%
 
4.06
%
 
4.22
%
 
 
3.19
%
 
4.27
%
Commercial real estate
2.84
%
 
3.64
%
 
3.89
%
 
4.40
%
 
4.43
%
 
 
3.23
%
 
4.40
%
Equipment lease financing
3.82
%
 
3.93
%
 
3.87
%
 
3.82
%
 
4.06
%
 
 
3.88
%
 
4.00
%
Consumer
4.86
%
 
5.38
%
 
5.45
%
 
5.61
%
 
5.56
%
 
 
5.12
%
 
5.55
%
Residential real estate
3.86
%
 
3.96
%
 
4.10
%
 
4.21
%
 
4.27
%
 
 
3.91
%
 
4.28
%
Total loans
3.37
%
 
4.08
%
 
4.27
%
 
4.47
%
 
4.56
%
 
 
3.71
%
 
4.58
%
Interest-earning deposits with banks
.10
%
 
1.27
%
 
1.66
%
 
2.17
%
 
2.38
%
 
 
.50
%
 
2.41
%
Other interest-earning assets
2.26
%
 
3.51
%
 
3.65
%
 
3.49
%
 
3.55
%
 
 
2.84
%
 
3.82
%
Total yield on interest-earning assets
2.85
%
 
3.62
%
 
3.71
%
 
3.95
%
 
4.06
%
 
 
3.21
%
 
4.09
%
Rate on interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market
.15
%
 
.72
%
 
.93
%
 
1.14
%
 
1.17
%
 
 
.41
%
 
1.16
%
Demand
.08
%
 
.41
%
 
.51
%
 
.58
%
 
.55
%
 
 
.23
%
 
.53
%
Savings
.31
%
 
.79
%
 
.97
%
 
1.14
%
 
1.19
%
 
 
.54
%
 
1.16
%
Time deposits
.80
%
 
1.34
%
 
1.52
%
 
1.66
%
 
1.67
%
 
 
1.06
%
 
1.61
%
Total interest-bearing deposits
.23
%
 
.70
%
 
.87
%
 
1.02
%
 
1.03
%
 
 
.45
%
 
1.00
%
Borrowed funds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
1.00
%
 
1.69
%
 
2.11
%
 
2.48
%
 
2.69
%
 
 
1.36
%
 
2.73
%
Bank notes and senior debt
1.56
%
 
2.41
%
 
2.77
%
 
3.21
%
 
3.36
%
 
 
2.00
%
 
3.43
%
Subordinated debt
1.91
%
 
2.73
%
 
3.06
%
 
3.53
%
 
4.17
%
 
 
2.32
%
 
4.34
%
Other 
.92
%
 
1.69
%
 
1.89
%
 
2.43
%
 
2.44
%
 
 
1.34
%
 
2.44
%
Total borrowed funds
1.39
%
 
2.18
%
 
2.47
%
 
2.87
%
 
3.08
%
 
 
1.80
%
 
3.14
%
Total rate on interest-bearing liabilities
.44
%
 
1.00
%
 
1.21
%
 
1.45
%
 
1.51
%
 
 
.71
%
 
1.50
%
Interest rate spread
2.41
%
 
2.62
%
 
2.50
%
 
2.50
%
 
2.55
%
 
 
2.50
%
 
2.59
%
Benefit from use of noninterest bearing sources (b)
.11

 
.22

 
.28

 
.34

 
.36

 
 
.17

 
.35

Net interest margin
2.52
%
 
2.84
%
 
2.78
%
 
2.84
%
 
2.91
%
 
 
2.67
%
 
2.94
%

(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 generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019 were $19 million, $22 million, $23 million, $25 million and $27 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2020 and June 30, 2019 were $41 million and $54 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: Per Share Related Information (Unaudited)
 
 
 
 
 
 
 
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
In millions, except per share data
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Basic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
(744
)
 
$
759

 
$
1,143

 
$
1,181

 
$
1,185

 
 
$
15

 
$
2,267

Less:

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
7

 
7

 
14

 
13

 
12

 
 
14

 
22

Preferred stock dividends (a)
55

 
63

 
55

 
63

 
55

 
 
118

 
118

Preferred stock discount accretion and redemptions
1

 
1

 
1

 
1

 
1

 
 
2

 
2

Net income (loss) from continuing operations
attributable to common shareholders
(807
)
 
688

 
1,073

 
1,104

 
1,117

 
 
(119
)
 
2,125

Less: Dividends and undistributed earnings allocated
to nonvested restricted shares
1

 
3

 
5

 
5

 
4

 
 
4

 
8

Net income (loss) from continuing operations
attributable to basic common shareholders
$
(808
)
 
$
685

 
$
1,068

 
$
1,099

 
$
1,113

 
 
$
(123
)
 
$
2,117

Net income from discontinued operations attributable to
   common shareholders
$
4,399

 
$
156

 
$
238

 
$
211

 
$
189

 
 
$
4,555

 
$
378

Less: Undistributed earnings allocated to nonvested
   restricted shares
21

 
1

 
1

 
1

 
0

 
0

22

 
1

Net income from discontinued operations attributable to
   basic common shareholders
$
4,378

 
$
155

 
$
237

 
$
210

 
$
189

 
 
$
4,533

 
$
377

Basic weighted-average common shares outstanding
426

 
429

 
437

 
444

 
451

 
 
428

 
453

Basic earnings (loss) per common share from
continuing operations
$
(1.90
)
 
$
1.59

 
$
2.44

 
$
2.47

 
$
2.47

 
 
$
(.29
)
 
$
4.68

Basic earnings per common share from discontinued
   operations
10.28

 
.37

 
.54

 
.48

 
.42

 
 
10.60

 
.83

Basic earnings per common share
$
8.40

 
$
1.96

 
$
2.98

 
$
2.95

 
$
2.89

 
 
$
10.33

 
$
5.51

Diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
   attributable to diluted common shareholders
$
(808
)
 
$
685

 
$
1,068

 
$
1,099

 
$
1,113

 
 
$
(123
)
 
$
2,117

Net income from discontinued operations attributable to
basic common shareholders
$
4,378

 
$
155

 
$
237

 
$
210

 
$
189

 
 
$
4,533

 
$
377

Less: Impact of earnings per share dilution from
discontinued operations
1

 
1

 
3

 
2

 
2

 
0

2

0

5

Net income from discontinued operations attributable to
diluted common shareholders
$
4,377

 
$
154

 
$
234

 
$
208

 
$
187

 
 
$
4,531

 
$
372

Basic weighted-average common shares outstanding
426

 
429

 
437

 
444

 
451

 
 
428

 
453

Dilutive potential common shares

 
1

 
1

 
1

0.000004

1

 
 

 
1

Diluted weighted-average common shares outstanding
426

 
430

 
438

 
445

 
452

 
 
428

 
454

Diluted earnings (loss) per common share from
   continuing operations
$
(1.90
)
 
$
1.59

 
$
2.43

 
$
2.47

 
$
2.47

 
 
$
(.29
)
 
$
4.67

Diluted earnings per common share from discontinued
  operations
10.28

 
.36

 
.54

 
.47

 
.41

 
 
10.59

 
.82

Diluted earnings per common share
$
8.40

 
$
1.95

 
$
2.97

 
$
2.94

 
$
2.88

 
 
$
10.32

 
$
5.49

(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.




THE PNC FINANCIAL SERVICES GROUP, INC.

Page 6 

Table 6: Details of Loans (Unaudited)
 
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
In millions
 
2020
 
2020
 
2019
 
2019
 
2019
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Manufacturing
 
$
25,590

 
$
27,225

 
$
21,540

 
$
21,846

 
$
22,191

Retail/wholesale trade
 
21,747

 
24,408

 
21,565

 
21,761

 
22,280

Service providers
 
21,347

 
19,411

 
16,112

 
16,189

 
15,387

Real estate related (a)
 
14,634

 
14,843

 
12,346

 
12,294

 
12,264

Financial services
 
13,596

 
13,473

 
11,318

 
10,437

 
11,916

Health care
 
10,109

 
9,238

 
8,035

 
8,137

 
8,594

Transportation and warehousing
 
7,771

 
8,160

 
7,474

 
7,216

 
6,588

Other industries
 
29,541

 
32,373

 
26,947

 
26,134

 
26,404

Total commercial and industrial
 
144,335

 
149,131

 
125,337

 
124,014

 
125,624

Commercial real estate
 
28,763

 
28,544

 
28,110

 
28,884

 
28,570

Equipment lease financing
 
7,097

 
7,061

 
7,155

 
7,290

 
7,409

Total commercial
 
180,195

 
184,736

 
160,602

 
160,188

 
161,603

Consumer
 
 
 
 
 
 
 
 
 
 
Home equity
 
24,879

 
25,081

 
25,085

 
24,971

 
25,132

Residential real estate
 
22,469

 
22,250

 
21,821

 
21,082

 
20,092

Automobile
 
16,157

 
17,194

 
16,754

 
16,004

 
15,612

Credit card
 
6,575

 
7,132

 
7,308

 
6,815

 
6,511

Education
 
3,132

 
3,247

 
3,336

 
3,461

 
3,555

Other consumer
 
4,829

 
5,003

 
4,937

 
4,856

 
4,710

Total consumer
 
78,041

 
79,907

 
79,241

 
77,189

 
75,612

Total loans
 
$
258,236

 
$
264,643

 
$
239,843

 
$
237,377

 
$
237,215

(a) Includes loans to customers in the real estate and construction industries.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 7 

Allowance for Credit Losses (Unaudited)

Table 7: Change in Allowance for Loan and Lease Losses
 
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
Three months ended - dollars in millions
 
2020
 
2020
 
2019
 
2019
 
2019
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
3,944

 
$
2,742

 
$
2,738

 
$
2,721

 
$
2,692

Adoption of ASU 2016-03 (a)
 
 
 
463

 

 

 

Gross charge-offs:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(112
)
 
(78
)
 
(67
)
 
(41
)
 
(50
)
Commercial real estate
 
 
 
 
 
(2
)
 
(11
)
 
(2
)
Equipment lease financing
 
(10
)
 
(5
)
 
(9
)
 
(2
)
 
(1
)
Home equity
 
(8
)
 
(11
)
 
(16
)
 
(11
)
 
(18
)
Residential real estate
 
 
 
(2
)
 
(4
)
 
(1
)
 
(2
)
Automobile
 
(69
)
 
(84
)
 
(78
)
 
(71
)
 
(54
)
Credit card
 
(76
)
 
(78
)
 
(70
)
 
(61
)
 
(65
)
Education
 
(4
)
 
(6
)
 
(6
)
 
(7
)
 
(7
)
Other consumer
 
(35
)
 
(40
)
 
(39
)
 
(36
)
 
(28
)
Total gross charge-offs
 
(314
)
 
(304
)
 
(291
)
 
(241
)
 
(227
)
Recoveries:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
13

 
18

 
14

 
14

 
17

Commercial real estate
 
 
 
4

 
3

 
3

 
2

Equipment lease financing
 
2

 
2

 
2

 
2

 
2

Home equity
 
15

 
14

 
18

 
20

 
18

Residential real estate
 
4

 
4

 
3

 
4

 
4

Automobile
 
29

 
35

 
29

 
30

 
29

Credit card
 
9

 
8

 
6

 
7

 
7

Education
 
2

 
2

 
2

 
2

 
2

Other consumer
 
4

 
5

 
5

 
4

 
4

Total recoveries
 
78

 
92

 
82

 
86

 
85

Net (charge-offs) / recoveries:
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(99
)
 
(60
)
 
(53
)
 
(27
)
 
(33
)
Commercial real estate
 

 
4

 
1

 
(8
)
 

Equipment lease financing
 
(8
)
 
(3
)
 
(7
)
 

 
1

Home equity
 
7

 
3

 
2

 
9

 

Residential real estate
 
4

 
2

 
(1
)
 
3

 
2

Automobile
 
(40
)
 
(49
)
 
(49
)
 
(41
)
 
(25
)
Credit card
 
(67
)
 
(70
)
 
(64
)
 
(54
)
 
(58
)
Education
 
(2
)
 
(4
)
 
(4
)
 
(5
)
 
(5
)
Other consumer
 
(31
)
 
(35
)
 
(34
)
 
(32
)
 
(24
)
Total net (charge-offs)
 
(236
)
 
(212
)
 
(209
)
 
(155
)
 
(142
)
Provision for credit losses (b)
 
2,220

 
952

 
221

 
183

 
180

Net (increase) / decrease in allowance for unfunded loan
commitments and letters of credit

 
 
 
 
 
(14
)
 
(13
)
 
(12
)
Other
 
 
 
(1
)
 
6

 
2

 
3

Ending balance
 
$
5,928

 
$
3,944

 
$
2,742

 
$
2,738

 
$
2,721

Supplemental Information
 
 
 
 
 
 
 
 
 
 
Net charge-offs
 
 
 
 
 
 
 
 
 
 
Commercial net charge-offs
 
$
(107
)
 
$
(59
)
 
$
(59
)
 
$
(35
)
 
$
(32
)
Consumer net charge-offs
 
(129
)
 
(153
)
 
(150
)
 
(120
)
 
(110
)
Total net charge-offs
 
$
(236
)
 
$
(212
)
 
$
(209
)
 
$
(155
)
 
$
(142
)
Net charge-offs to average loans (annualized)
 
.35
%
 
.35
%
 
.35
%
 
.26
%
 
.24
%
Commercial
 
.23
%
 
.14
%
 
.15
%
 
.09
%
 
.08
%
Consumer
 
.66
%
 
.77
%
 
.76
%
 
.62
%
 
.59
%

(a)
Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020, and our transition from an incurred loss methodology for our reserves to an expected credit loss methodology. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include additional information related to our adoption of the CECL standard.
(b)
See Table 8 for the components of the Provision for credit losses under CECL being reported on the Consolidated Income Statement.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 8 

Allowance for Credit Losses (Unaudited) (Continued)

Table 8: Components of the Provision for Credit Losses Under CECL
 
 
Three months ended
 
Six months ended
 
 
June 30
 
March 31
 
June 30
In millions
 
2020
 
2020
 
2020
Provision for credit losses
 
 
 
 
 
 
Loans and leases
 
$
2,220

 
$
952

 
$
3,172

Unfunded lending related commitments
 
212

 
(47
)
 
165

Investment securities and other financial assets
 
31

 
9

 
40

Total provision for credit losses
 
$
2,463

 
$
914

 
$
3,377


Table 9: Allowance for Credit Losses by Loan Class (a)
 
June 30, 2020
 
March 31, 2020
 
December 31, 2019

Dollars in millions
Allowance Amount
 
Total Loans
% of Total Loans
 
Allowance Amount
 
Total Loans
% of Total Loans
 
Allowance Amount
 
Total Loans
% of Total Loans
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
2,834

 
$
144,335

1.96
%
 
$
1,596

 
$
149,131

1.07
%
 
$
1,489

 
$
125,337

1.19
%
Commercial real estate
382

 
28,763

1.33
%
 
269

 
28,544

.94
%
 
278

 
28,110

.99
%
Equipment lease financing
164

 
7,097

2.31
%
 
114

 
7,061

1.61
%
 
45

 
7,155

.63
%
Total commercial
3,380

 
180,195

1.88
%
 
1,979

 
184,736

1.07
%
 
1,812

 
160,602

1.13
%
Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
382

 
24,879

1.54
%
 
332

 
25,081

1.32
%
 
87

 
25,085

.35
%
Residential real estate
50

 
22,469

.22
%
 
18

 
22,250

.08
%
 
258

 
21,821

1.18
%
Automobile
450

 
16,157

2.79
%
 
377

 
17,194

2.19
%
 
160

 
16,754

.95
%
Credit card
1,010

 
6,575

15.36
%
 
746

 
7,132

10.46
%
 
288

 
7,308

3.94
%
Education
151

 
3,132

4.82
%
 
123

 
3,247

3.79
%
 
17

 
3,336

.51
%
Other consumer
505

 
4,829

10.46
%
 
369

 
5,003

7.38
%
 
120

 
4,937

2.43
%
Total consumer
2,548

 
78,041

3.26
%
 
1,965

 
79,907

2.46
%
 
930

 
79,241

1.17
%
Total
5,928

 
$
258,236

2.30
%
 
3,944

 
$
264,643

1.49
%
 
2,742

 
$
239,843

1.14
%
Allowance for unfunded lending related commitments
662

 
 
 
 
450

 
 
 
 
318

 
 
 
Allowance for credit losses
$
6,590

 
 
 
 
$
4,394

 
 
 
 
$
3,060

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to total loans
 
 
 
2.55
%
 
 
 
 
1.66
%
 
 
 
 
1.28
%
Commercial
 
 
 
2.18
%
 
 
 
 
1.26
%
 
 
 
 
1.33
%
Consumer
 
 
 
3.41
%
 
 
 
 
2.59
%
 
 
 
 
1.18
%

(a)    Excludes allowances for investment securities and other financial assets.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 9 

Details of Nonperforming Assets (Unaudited)

Table 10: Nonperforming Assets by Type
 
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
Dollars in millions
 
2020
 
2020
 
2019
 
2019
 
2019
Nonperforming loans, including TDRs
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Retail/wholesale trade
 
$
117

 
$
121

 
$
74

 
$
61

 
$
42

Manufacturing
 
58

 
79

 
102

 
109

 
88

Service providers
 
57

 
63

 
53

 
55

 
53

Real estate related (a)
 
158

 
25

 
24

 
33

 
19

Health care
 
19

 
14

 
17

 
17

 
15

Transportation and warehousing
 
20

 
23

 
18

 
13

 
21

Other industries
 
264

 
169

 
137

 
203

 
203

Total commercial and industrial
 
693

 
494

 
425

 
491

 
441

Commercial real estate
 
43

 
42

 
44

 
75

 
93

Equipment lease financing
 
22

 
30

 
32

 
10

 
6

Total commercial
 
758

 
566

 
501

 
576

 
540

Consumer (b)
 
 
 
 
 
 
 
 
 
 
Home equity
 
636

 
617

 
669

 
685

 
712

Residential real estate
 
305

 
292

 
315

 
325

 
339

Automobile
 
156

 
154

 
135

 
128

 
118

Credit card
 
15

 
10

 
11

 
9

 
8

Other consumer
 
6

 
5

 
4

 
5

 
7

Total consumer
 
1,118

 
1,078

 
1,134

 
1,152

 
1,184

Total nonperforming loans (c) (d)
 
1,876

 
1,644

 
1,635

 
1,728

 
1,724

OREO and foreclosed assets
 
79

 
111

 
117

 
119

 
126

Total nonperforming assets
 
$
1,955

 
$
1,755

 
$
1,752

 
$
1,847

 
$
1,850

Nonperforming loans to total loans
 
.73
%
 
.62
%
 
.68
%
 
.73
%
 
.73
%
Nonperforming assets to total loans, OREO and foreclosed assets
 
.76
%
 
.66
%
 
.73
%
 
.78
%
 
.78
%
Nonperforming assets to total assets
 
.43
%
 
.39
%
 
.43
%
 
.45
%
 
.46
%
Allowance for loan and lease losses to nonperforming loans (e)
 
316
%
 
240
%
 
168
%
 
158
%
 
158
%

(a)
Includes 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. Amounts in 2019 also excluded purchased impaired loans.
(d)
In connection with the adoption of the CECL standard, nonperforming loans as of June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of the CECL standard.
(e)
Ratios at June 30, 2020 and March 31, 2020 reflect the transition impact on our allowance for loan and lease losses from the adoption of the CECL standard along with the increases in reserves during 2020 due to the significant economic impact of COVID-19 and loan growth.






THE PNC FINANCIAL SERVICES GROUP, INC.

Page 10 

Details of Nonperforming Assets (Unaudited) (Continued)

Table 11: Change in Nonperforming Assets
 
 
April 1, 2020

 
January 1, 2020

 
October 1, 2019

 
July 1, 2019

 
April 1, 2019

In millions
 
June 30, 2020

 
March 31, 2020

 
December 31, 2019

 
September 30, 2019

 
June 30, 2019

Beginning balance
 
$
1,755

 
$
1,752

 
$
1,847

 
$
1,850

 
$
1,785

New nonperforming assets
 
458

 
391

 
357

 
290

 
408

Charge-offs and valuation adjustments
 
(104
)
 
(145
)
 
(218
)
 
(112
)
 
(170
)
Principal activity, including paydowns and payoffs
 
(85
)
 
(158
)
 
(157
)
 
(122
)
 
(101
)
Asset sales and transfers to loans held for sale
 
(28
)
 
(20
)
 
(21
)
 
(34
)
 
(27
)
Returned to performing status
 
(41
)
 
(65
)
 
(56
)
 
(25
)
 
(45
)
Ending balance
 
$
1,955

 
$
1,755

 
$
1,752

 
$
1,847

 
$
1,850



Table 12: Largest Individual Nonperforming Assets (a)
June 30, 2020 - Dollars in millions
 
 
Ranking
 
Outstandings

 
Industry
1
 
$
99

 
Real Estate and Rental and Leasing
2
 
36

 
Mining, Quarrying, and Oil and Gas Extraction
3
 
35

 
Real Estate and Rental and Leasing
4
 
34

 
Wholesale Trade
5
 
29

 
Mining, Quarrying, and Oil and Gas Extraction
6
 
28

 
Wholesale Trade
7
 
27

 
Information
8
 
24

 
Mining, Quarrying, and Oil and Gas Extraction
9
 
23

 
Mining, Quarrying, and Oil and Gas Extraction
10
 
21

 
Mining, Quarrying, and Oil and Gas Extraction
Total
 
$
356

 
 
As a percent of total nonperforming assets
 
18%
 
(a)
Amounts shown are not net of related allowance for loan and lease losses, if applicable.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 11 

Accruing Loans Past Due (Unaudited)

Pursuant to the interagency guidance issued in April 2020 and in connection with the credit reporting rules from the U.S. Coronavirus Aid, Relief and Economic Security Act (CARES Act), the delinquency status of loans modified due to COVID-19 related hardships are being reported as of June 30, 2020 in alignment with the rules set forth for banks to report delinquency status to the credit agencies. These rules require that COVID-19 related loan modifications be reported as follows: (i) if current at the time of modification, the loan remains current throughout the modification period, (ii) if delinquent at the time of modification and the borrower was not made current as part of the modification, the loan maintains its reported as delinquent status during the modification period, or (iii) if delinquent at the time of modification and the borrower was made current as part of the modification or became current during the modification period, the loan is reported as current. As a result, certain loans modified due to COVID-19 related hardships are not being reported as past due as of June 30, 2020 based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period. Our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to COVID-19 related loan modifications.

Table 13: Accruing Loans Past Due 30 to 59 Days (a) (b)
 
 
Amount
 
Percent of Total Outstandings
 
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
Dollars in millions
 
2020
 
2020
 
2019
 
2019
 
2019
 
2020
 
2020
 
2019
 
2019
 
2019
Commercial and industrial
 
$
49

 
$
97

 
$
102

 
$
82

 
$
105

 
.03
%
 
.07
%
 
.08
%
 
.07
%
 
.08
%
Commercial real estate
 
51

 
6

 
4

 
3

 
9

 
.18
%
 
.02
%
 
.01
%
 
.01
%
 
.03
%
Equipment lease financing
 
8

 
42

 
49

 
6

 
7

 
.11
%
 
.59
%
 
.68
%
 
.08
%
 
.09
%
Home equity
 
70

 
65

 
58

 
53

 
56

 
.28
%
 
.26
%
 
.23
%
 
.21
%
 
.22
%
Residential real estate
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
135

 
121

 
90

 
76

 
80

 
.60
%
 
.54
%
 
.41
%
 
.36
%
 
.40
%
Government insured
 
63

 
52

 
50

 
53

 
54

 
.28
%
 
.23
%
 
.23
%
 
.25
%
 
.27
%
Automobile
 
105

 
177

 
178

 
145

 
119

 
.65
%
 
1.03
%
 
1.06
%
 
.91
%
 
.76
%
Credit card
 
53

 
59

 
60

 
56

 
47

 
.81
%
 
.83
%
 
.82
%
 
.82
%
 
.72
%
Education
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
3

 
7

 
7

 
8

 
7

 
.10
%
 
.22
%
 
.21
%
 
.23
%
 
.20
%
Government insured
 
36

 
45

 
48

 
48

 
53

 
1.15
%
 
1.39
%
 
1.44
%
 
1.39
%
 
1.49
%
Other consumer
 
17

 
17

 
15

 
17

 
13

 
.35
%
 
.34
%
 
.30
%
 
.35
%
 
.28
%
Total
 
$
590

 
$
688

 
$
661

 
$
547

 
$
550

 
.23
%
 
.26
%
 
.28
%
 
.23
%
 
.23
%
 
Table 14: Accruing Loans Past Due 60 to 89 Days (a) (b)
 
 
Amount
 
Percent of Total Outstandings
 
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
Dollars in millions
 
2020
 
2020
 
2019
 
2019
 
2019
 
2020
 
2020
 
2019
 
2019
 
2019
Commercial and industrial
 
$
28

 
$
22

 
$
30

 
$
49

 
$
33

 
.02
%
 
.01
%
 
.02
%
 
.04
%
 
.03
%
Commercial real estate
 
4

 
1

 
1

 
3

 
1

 
.01
%
 
.00
%
 
.00
%
 
.01
%
 
.00
%
Equipment lease financing
 
9

 
2

 
5

 
4

 
3

 
.13
%
 
.03
%
 
.07
%
 
.05
%
 
.04
%
Home equity
 
27

 
28

 
24

 
24

 
20

 
.11
%
 
.11
%
 
.10
%
 
.10
%
 
.08
%
Residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
34

 
30

 
16

 
20

 
20

 
.15
%
 
.13
%
 
.07
%
 
.09
%
 
.10
%
Government insured
 
59

 
52

 
53

 
57

 
55

 
.26
%
 
.23
%
 
.24
%
 
.27
%
 
.27
%
Automobile
 
34

 
49

 
47

 
36

 
29

 
.21
%
 
.28
%
 
.28
%
 
.22
%
 
.19
%
Credit card
 
38

 
37

 
37

 
33

 
29

 
.58
%
 
.52
%
 
.51
%
 
.48
%
 
.45
%
Education
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
2

 
4

 
3

 
5

 
4

 
.06
%
 
.12
%
 
.09
%
 
.14
%
 
.11
%
Government insured
 
21

 
26

 
31

 
30

 
32

 
.67
%
 
.80
%
 
.93
%
 
.87
%
 
.90
%
Other consumer
 
8

 
10

 
11

 
8

 
9

 
.17
%
 
.20
%
 
.22
%
 
.16
%
 
.19
%
Total
 
$
264

 
$
261

 
$
258

 
$
269

 
$
235

 
.10
%
 
.10
%
 
.11
%
 
.11
%
 
.10
%



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 12 

Accruing Loans Past Due (Unaudited) (Continued)

Table 15: Accruing Loans Past Due 90 Days or More (a) (b)
 
 
Amount
 
Percent of Total Outstandings
 
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Jun. 30
Dollars in millions
 
2020
 
2020
 
2019
 
2019
 
2019
 
2020
 
2020
 
2019
 
2019
 
2019
Commercial and industrial
 
$
34

 
$
51

 
$
85

 
$
64

 
$
59

 
.02
%
 
.03
%
 
.07
%
 
.05
%
 
.05
%
Residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
19

 
18

 
14

 
15

 
13

 
.08
%
 
.08
%
 
.06
%
 
.07
%
 
.06
%
Government insured
 
245

 
282

 
301

 
287

 
293

 
1.09
%
 
1.27
%
 
1.38
%
 
1.36
%
 
1.46
%
Automobile
 
19

 
19

 
18

 
11

 
8

 
.12
%
 
.11
%
 
.11
%
 
.07
%
 
.05
%
Credit card
 
61

 
70

 
67

 
57

 
48

 
.93
%
 
.98
%
 
.92
%
 
.84
%
 
.74
%
Education
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
1

 
2

 
2

 
3

 
3

 
.03
%
 
.06
%
 
.06
%
 
.09
%
 
.08
%
Government insured
 
65

 
82

 
89

 
87

 
92

 
2.08
%
 
2.53
%
 
2.67
%
 
2.51
%
 
2.59
%
Other consumer
 
12

 
10

 
9

 
8

 
8

 
.25
%
 
.20
%
 
.18
%
 
.16
%
 
.17
%
Total
 
$
456

 
$
534

 
$
585

 
$
532

 
$
524

 
.18
%
 
.20
%
 
.24
%
 
.22
%
 
.22
%
(a) Excludes loans held for sale, amounts in 2019 also excluded purchased impaired loans.
(b) In connection with the adoption of the CECL standard, accruing loans past due as of June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of the CECL standard.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 13 

 
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. The branch network is located primarily in markets across the Mid-Atlantic, Midwest and Southeast. In 2018, Retail Banking launched its national expansion strategy designed to grow customers with digitally-led banking and an ultra-thin branch network in markets outside of our existing retail branch network. 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 government 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-related 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 payables, receivables, deposit and account services, liquidity and investments, and online and mobile banking products and services to our clients. Capital markets-related products and services include foreign exchange, derivatives, 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 personal wealth management for high net worth and ultra high net worth clients and institutional asset management. The Asset Management group is comprised of three distinct operating units:
Wealth management provides products and services to individuals and their families including investment and retirement planning, customized investment management, private banking, and trust management and administration for individuals and their families.
Our Hawthorn unit provides multi-generational family planning including estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative services, asset custody and customized performance reporting to ultra high net worth clients.
Institutional asset management provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 16: Period End Employees
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
2020
 
2020
 
2019
 
2019
 
2019
Full-time employees
 
 
 
 
 
 
 
 
 
Retail Banking
29,051

 
28,737

 
28,270

 
28,279

 
28,671

Other full-time employees
21,752

 
21,776

 
21,747

 
21,701

 
21,571

Total full-time employees
50,803

 
50,513

 
50,017

 
49,980

 
50,242

Part-time employees
 
 
 
 
 
 
 
 
 
Retail Banking
1,854

 
1,780

 
1,759

 
1,823

 
2,037

Other part-time employees
476

 
129

 
142

 
153

 
518

Total part-time employees
2,330

 
1,909

 
1,901

 
1,976

 
2,555

Total
53,133

 
52,422

 
51,918

 
51,956

 
52,797

 



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 14 

Table 17: Summary of Business Segment Income and Revenue (Unaudited) (a)
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
In millions
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Banking
$
(223
)
 
$
201

 
$
277

 
$
347

 
$
325

 
 
$
(22
)
 
$
589

Corporate & Institutional Banking
(358
)
 
370

 
649

 
645

 
602

 
 
12

 
1,154

Asset Management Group
28

 
54

 
91

 
46

 
80

 
 
82

 
125

Other
(191
)
 
134

 
126

 
143

 
178

 
 
(57
)
 
399

Net income (loss) from continuing
   operations
$
(744
)
 
$
759

 
$
1,143

 
$
1,181

 
$
1,185

 
 
$
15

 
$
2,267

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Banking
$
1,975

 
$
2,244

 
$
2,054

 
$
2,137

 
$
2,033

 
 
$
4,219

 
$
3,977

Corporate & Institutional Banking
1,790

 
1,660

 
1,615

 
1,584

 
1,578

 
 
3,450

 
3,052

Asset Management Group
293

 
292

 
352

 
286

 
354

 
 
585

 
641

Other
18

 
140

 
300

 
235

 
250

 
 
158

 
606

Total revenue
$
4,076

 
$
4,336

 
$
4,321

 
$
4,242

 
$
4,215

 
 
$
8,412

 
$
8,276


(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 15 

Table 18: Retail Banking (Unaudited) (a)
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
Dollars in millions
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,390

 
$
1,456

 
$
1,402

 
$
1,393

 
$
1,376

 
 
$
2,846

 
$
2,725

Noninterest income
585

 
788

 
652

 
744

 
657

 
 
1,373

 
1,252

Total revenue
1,975

 
2,244

 
2,054

 
2,137

 
2,033

 
 
4,219

 
3,977

Provision for credit losses
761

 
445

 
161

 
147

 
81

 
 
1,206

 
209

Noninterest expense
1,500

 
1,536

 
1,530

 
1,536

 
1,527

 
 
3,036

 
2,995

Pretax earnings (loss)
(286
)
 
263

 
363

 
454

 
425

 
 
(23
)
 
773

Income taxes (benefit)
(63
)
 
62

 
86

 
107

 
100

 
 
(1
)
 
184

Earnings
$
(223
)
 
$
201

 
$
277

 
$
347

 
$
325

 
 
$
(22
)
 
$
589

Average Balance Sheet


 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
829

 
$
779

 
$
747

 
$
760

 
$
554

 
 
$
804

 
$
498

Loans


 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer


 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
$
22,790

 
$
22,736

 
$
22,590

 
$
22,434

 
$
22,620

 
 
$
22,763

 
$
22,804

Residential real estate
18,244

 
17,964

 
17,352

 
16,630

 
15,737

 
 
18,104

 
15,388

Automobile
16,688

 
17,096

 
16,427

 
15,761

 
15,222

 
 
16,892

 
14,917

Education
3,218

 
3,343

 
3,428

 
3,538

 
3,665

 
 
3,281

 
3,740

Credit cards
6,690

 
7,207

 
6,985

 
6,624

 
6,376

 
 
6,948

 
6,291

Other
2,454

 
2,533

 
2,418

 
2,309

 
2,179

 
 
2,494

 
2,123

Total consumer
70,084

 
70,879

 
69,200

 
67,296

 
65,799

 
 
70,482

 
65,263

Commercial
13,612

 
10,524

 
10,323

 
10,379

 
10,481

 
 
12,068

 
10,471

Total loans
$
83,696

 
$
81,403

 
$
79,523

 
$
77,675

 
$
76,280

 
 
$
82,550

 
$
75,734

Total assets
$
102,103

 
$
97,062

 
$
94,967

 
$
93,222

 
$
92,350

 
 
$
99,583

 
$
91,805

Deposits


 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
39,134

 
$
32,225

 
$
32,674

 
$
32,092

 
$
31,516

 
 
$
35,680

 
$
30,956

Interest-bearing demand
47,339

 
42,865

 
41,689

 
41,420

 
42,735

 
 
45,102

 
42,607

Money market
22,942

 
22,866

 
23,927

 
24,807

 
25,799

 
 
22,903

 
26,283

Savings
67,947

 
62,781

 
59,877

 
57,752

 
56,075

 
 
65,364

 
54,596

Certificates of deposit
11,661

 
12,233

 
12,598

 
12,766

 
12,704

 
 
11,947

 
12,543

Total deposits
$
189,023

 
$
172,970

 
$
170,765

 
$
168,837

 
$
168,829

 
 
$
180,996

 
$
166,985

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
(.88
)%
 
.84
%
 
1.16
%
 
1.48
%
 
1.41
%
 
 
(.04
)%
 
1.29
%
Noninterest income to total revenue
30
 %
 
35
%
 
32
%
 
35
%
 
32
%
 
 
33
 %
 
31
%
Efficiency
76
 %
 
68
%
 
74
%
 
72
%
 
75
%
 
 
72
 %
 
75
%
 
(a)
See note (a) on page 14.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 16 

Retail Banking (Unaudited) (Continued)
 
Three months ended
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
June 30
 
June 30
Dollars in millions, except as noted
2020
 
2020
 
2019
 
2019
 
2019
 
2020
 
2019
Supplemental Noninterest Income
    Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer services
$
315

 
$
372

 
$
382

 
$
397

 
$
385

 
$
687

 
$
751

Residential mortgage
$
158

 
$
210

 
$
87

 
$
134

 
$
82

 
$
368

 
$
147

Service charges on deposits
$
80

 
$
166

 
$
183

 
$
178

 
$
164

 
$
246

 
$
326

Residential Mortgage Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage servicing statistics (in billions, except as noted) (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
Serviced portfolio balance (b)
$
122

 
$
118

 
$
120

 
$
123

 
$
124

 
 
 
 
Serviced portfolio acquisitions
$
11

 
$
2

 
$
3

 
$
3

 
$
5

 
$
13

 
$
6

MSR asset value (b)
$
0.6

 
$
0.6

 
$
1.0

 
$
0.9

 
$
1.0

 
 
 
 
MSR capitalization value (in basis points) (b)
47

 
51

 
83

 
72

 
80

 
 
 
 
Servicing income: (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fees, net (c)
$
36

 
$
44

 
$
39

 
$
44

 
$
42

 
$
80

 
$
95

Mortgage servicing rights valuation, net of
economic hedge
$
20

 
$
101

 
$
9

 
$
40

 
$
7

 
$
121

 
$
(2
)
Residential mortgage loan statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan origination volume (in billions)
$
4.2

 
$
3.2

 
$
3.5

 
$
3.4

 
$
2.9

 
$
7.4

 
$
4.6

Loan sale margin percentage
3.67
%
 
3.16
%
 
2.42
%
 
2.59
%
 
2.24
%
 
3.45
%
 
2.28
%
Percentage of originations represented by:
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume (d)
34
%
 
36
%
 
40
%
 
44
%
 
54
%
 
35
%
 
55
%
Refinance volume
66
%
 
64
%
 
60
%
 
56
%
 
46
%
 
65
%
 
45
%
Other Information (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer-related statistics (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-teller deposit transactions (e)
65
%
 
59
%
 
58
%
 
58
%
 
56
%
 
61
%
 
56
%
Digital consumer customers (f)
73
%
 
71
%
 
71
%
 
70
%
 
69
%
 
72
%
 
69
%
Credit-related statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
$
1,037

 
$
1,011

 
$
1,046

 
$
1,056

 
$
1,074

 
 
 
 
Net charge-offs - loans and leases
$
142

 
$
166

 
$
154

 
$
128

 
$
120

 
$
308

 
$
252

Other statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
ATMs
9,058

 
9,048

 
9,091

 
9,102

 
9,072

 
 
 
 
Branches (g)
2,256

 
2,277

 
2,296

 
2,310

 
2,321

 
 
 
 
Brokerage account client assets (in billions) (h)
$
53

 
$
49

 
$
54

 
$
52

 
$
52

 
 
 
 

(a)
Represents mortgage loan servicing balances for third parties and the related income.
(b)
Presented as of period end, except for customer-related statistics, which are quarterly averages, and net charge-offs, which are for the three months ended and six months ended, respectively.
(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.

Page 17 

Table 19: Corporate & Institutional Banking (Unaudited) (a)
 
Three months ended
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
June 30
 
June 30
Dollars in millions
2020
 
2020
 
2019
 
2019
 
2019
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,064

 
$
966

 
$
969

 
$
930

 
$
917

 
$
2,030

 
$
1,815

Noninterest income
726

 
694

 
646

 
654

 
661

 
1,420

 
1,237

Total revenue
1,790

 
1,660

 
1,615

 
1,584

 
1,578

 
3,450

 
3,052

Provision for credit losses
1,585

 
458

 
65

 
48

 
100

 
2,043

 
171

Noninterest expense
673

 
722

 
726

 
703

 
698

 
1,395

 
1,384

Pretax earnings (loss)
(468
)
 
480

 
824

 
833

 
780

 
12

 
1,497

Income taxes (benefit)
(110
)
 
110

 
175

 
188

 
178

 

 
343

Earnings
$
(358
)
 
$
370

 
$
649

 
$
645

 
$
602

 
$
12

 
$
1,154

Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
704

 
$
395

 
$
616

 
$
720

 
$
330

 
$
550

 
$
338

Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
138,992

 
$
117,288

 
$
114,113

 
$
114,701

 
$
113,702

 
$
128,139

 
$
111,186

Commercial real estate
27,106

 
26,589

 
26,586

 
26,570

 
26,224

 
26,848

 
26,098

Equipment lease financing
7,036

 
7,066

 
7,200

 
7,272

 
7,284

 
7,051

 
7,274

Total commercial
173,134

 
150,943

 
147,899

 
148,543

 
147,210

 
162,038

 
144,558

Consumer
8

 
9

 
11

 
13

 
16

 
9

 
18

Total loans
$
173,142

 
$
150,952

 
$
147,910

 
$
148,556

 
$
147,226

 
$
162,047

 
$
144,576

Total assets
$
199,254

 
$
172,502

 
$
167,555

 
$
168,193

 
$
163,897

 
$
185,878

 
$
160,551

Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
53,157

 
$
40,651

 
$
39,513

 
$
38,740

 
$
38,765

 
$
46,904

 
$
39,156

Interest-bearing demand
27,674

 
21,101

 
20,851

 
20,523

 
18,702

 
24,388

 
18,267

Money market
36,595

 
28,468

 
30,264

 
29,456

 
26,948

 
32,532

 
26,292

Other
9,546

 
7,868

 
7,916

 
7,100

 
6,109

 
8,706

 
5,830

Total deposits
$
126,972

 
$
98,088

 
$
98,544

 
$
95,819

 
$
90,524

 
$
112,530

 
$
89,545

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
(.72
)%
 
.87
%
 
1.54
%
 
1.52
%
 
1.47
%
 
.01
%
 
1.45
%
Noninterest income to total revenue
41
 %
 
42
%
 
40
%
 
41
%
 
42
%
 
41
%
 
41
%
Efficiency
38
 %
 
43
%
 
45
%
 
44
%
 
44
%
 
40
%
 
45
%
Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated revenue from:
 
 
 
 
 
 
 
 
 
 
 
 
 
Treasury Management (b)
$
469

 
$
491

 
$
494

 
$
460

 
$
467

 
$
960

 
$
912

Capital Markets (b)
$
388

 
$
344

 
$
291

 
$
290

 
$
313

 
$
732

 
$
559

Commercial mortgage banking activities
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage loans held for sale (c)
$
42

 
$
29

 
$
24

 
$
38

 
$
20

 
$
71

 
$
35

Commercial mortgage loan servicing income (d)
67

 
69

 
71

 
71

 
65

 
136

 
119

Commercial mortgage servicing rights
    valuation, net of economic hedge (e)
22

 
20

 
2

 
1

 
11

 
42

 
16

Total
$
131

 
$
118

 
$
97

 
$
110

 
$
96

 
$
249

 
$
170

MSR asset value (f)
$
490

 
$
477

 
$
649

 
$
595

 
$
630

 
 
 
 
Average Loans by C&IB business
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Banking
$
91,634

 
$
78,057

 
$
75,665

 
$
74,883

 
$
74,366

 
$
84,846

 
$
72,736

Real Estate
42,124

 
37,368

 
36,908

 
38,172

 
37,143

 
39,746

 
36,752

Business Credit
23,943

 
23,251

 
22,900

 
22,824

 
22,877

 
23,597

 
22,306

Commercial Banking
10,708

 
7,784

 
7,793

 
7,947

 
8,080

 
9,246

 
8,099

Other
4,733

 
4,492

 
4,644

 
4,730

 
4,760

 
4,612

 
4,683

Total average loans
$
173,142

 
$
150,952

 
$
147,910

 
$
148,556

 
$
147,226

 
$
162,047

 
$
144,576

Credit-related statistics 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets (f)
$
674

 
$
508

 
$
444

 
$
526

 
$
497

 
 
 
 
Net charge-offs - loans and leases
$
99

 
$
50

 
$
47

 
$
30

 
$
23

 
$
149

 
$
28

 
(a)
See note (a) on page 14.
(b)
Amounts reported in net interest income and noninterest income.
(c)
Represents other noninterest income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, originations 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 (primarily in corporate service fees) 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)
Amounts are reported in corporate service fees.
(f)
Presented as of period end.



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 18 

Table 20: Asset Management Group (Unaudited) (a)
 
Three months ended
 
 
Six months ended
 
June 30
 
March 31
 
December 31
 
September 30
 
June 30
 
 
June 30
 
June 30
Dollars in millions, except as noted
2020
 
2020
 
2019
 
2019
 
2019
 
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
89

 
$
88

 
$
80

 
$
70

 
$
68

 
 
$
177

 
$
138

Noninterest income
204

 
204

 
272

 
216

 
286

 
 
408

 
503

Total revenue
293

 
292

 
352

 
286

 
354

 
 
585

 
641

Provision for credit losses (benefit)
39

 
3

 
1

 
(1
)
 

 
 
42

 
(1
)
Noninterest expense
217

 
219

 
232

 
228

 
249

 
 
436

 
479

Pretax earnings
37

 
70

 
119

 
59

 
105

 
 
107

 
163

Income taxes
9

 
16

 
28

 
13

 
25

 
 
25

 
38

Earnings
$
28

 
$
54

 
$
91

 
$
46

 
$
80

 
 
$
82

 
$
125

Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
$
2,636

 
$
2,385

 
$
2,193

 
$
1,980

 
$
1,792

 
 
$
2,511

 
$
1,758

Other
3,975

 
4,052

 
4,145

 
4,207

 
4,216

 
 
4,013

 
4,289

Total consumer
$
6,611

 
$
6,437

 
$
6,338

 
$
6,187

 
$
6,008

 
 
$
6,524

 
$
6,047

Commercial
$
883

 
$
856

 
$
793

 
$
758

 
$
731

 
 
$
869

 
$
741

Total loans
$
7,494

 
$
7,293

 
$
7,131

 
$
6,945

 
$
6,739

 
 
$
7,393

 
$
6,788

Total assets
$
7,958

 
$
7,801

 
$
7,697

 
$
7,331

 
$
7,150

 
 
$
7,880

 
$
7,204

Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
1,421

 
$
1,468

 
$
1,407

 
$
1,299

 
$
1,347

 
 
$
1,445

 
$
1,368

Interest-bearing demand
7,742

 
6,850

 
6,846

 
3,393

 
2,891

 
 
7,296

 
2,983

Money market
1,597

 
1,709

 
1,773

 
1,740

 
1,785

 
 
1,653

 
1,910

Savings
7,398

 
7,197

 
6,950

 
6,302

 
5,875

 
 
7,297

 
5,799

Other
722

 
847

 
898

 
893

 
797

 
 
785

 
747

Total deposits
$
18,880

 
$
18,071

 
$
17,874

 
$
13,627

 
$
12,695

 
 
$
18,476

 
$
12,807

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.41
%
 
2.81
%
 
4.69
%
 
2.49
%
 
4.49
%
 
 
2.10
%
 
3.50
%
Noninterest income to total revenue
70
%
 
70
%
 
77
%
 
76
%
 
81
%
 
 
70
%
 
78
%
Efficiency
74
%
 
75
%
 
66
%
 
80
%
 
70
%
 
 
75
%
 
75
%
Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets (b)
$
38

 
$
34

 
$
39

 
$
42

 
$
45

 
 
 
 
 
Net charge-offs - loans and leases

 
$
(1
)
 
$
4

 

 

 
 
$
(1
)
 
$
1

Client Assets Under Administration (in billions)
    (b) (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discretionary client assets under management
$
151

 
$
136

 
$
154

 
$
163

 
$
162

 
 
 
 
 
Nondiscretionary client assets under administration
138

 
128

 
143

 
135

 
132

 
 
 
 
 
Total
$
289

 
$
264

 
$
297

 
$
298

 
$
294

 
 
 
 
 
Discretionary client assets under management
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal
$
94

 
$
84

 
$
99

 
$
98

 
$
99

 
 
 
 
 
Institutional
57

 
52

 
55

 
65

 
63

 
 
 
 
 
Total
$
151

 
$
136

 
$
154

 
$
163

 
$
162

 
 
 
 
 
 
(a)
See note (a) on page 14.
(b)
As of period end.
(c)
Excludes brokerage account client assets.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 19 

Glossary of Terms

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.

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).

Basel III common equity Tier 1 capital - Common stock plus related surplus, net of treasury stock, plus retained earnings, plus accumulated other comprehensive income for securities currently, and those transferred from, available for sale and pension and other postretirement benefit plans, subject to phase-in limits, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments. Significant common stock investments in unconsolidated financial institutions, as well as mortgage servicing rights and deferred tax assets, must then be deducted to the extent such items individually exceed 10%, or in the aggregate exceed 15%, of our adjusted Basel III common equity Tier 1 capital.

Basel III common equity Tier 1 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 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.

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.

Combined loan-to-value ratio (CLTV) - This is the aggregate principal balance(s) of the mortgages on a property divided by its appraised value or purchase price.

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.”

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.

Duration of equity - An estimate of the rate sensitivity of our economic value of equity. A negative duration of equity is associated with asset sensitivity (i.e., positioned for rising interest rates), while a positive value implies liability sensitivity (i.e., positioned for declining interest rates). For example, if the duration of equity is -1.5 years, the economic value of equity increases by 1.5% for each 100 basis point increase in interest rates.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 20 


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.

Futures and forward contracts - Contracts in which the buyer agrees to purchase and the seller agrees to deliver a specific financial instrument at a predetermined price or yield. May be settled either in cash or by delivery of the underlying financial instrument.

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

Impaired loans - Loans are determined to be impaired when, based on current information and events, it is probable that all contractually required payments will not be collected. Impaired loans include commercial nonperforming loans and consumer and commercial TDRs, regardless of nonperforming status. Excluded from impaired loans are nonperforming leases, loans held for sale, loans accounted for under the fair value option, smaller balance homogenous type loans and purchased impaired loans.

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

LIBOR - Acronym for London InterBank Offered Rate. LIBOR is the average interest rate charged when banks in the London wholesale money market (or interbank market) borrow unsecured funds from each other. LIBOR rates are used as a benchmark for interest rates on a global basis. Our product set includes loans priced using LIBOR as a benchmark.

Loan-to-value ratio (LTV) - A calculation of a loan's collateral coverage that is used both in underwriting and assessing credit risk in our lending portfolio. LTV is the sum total of loan obligations secured by collateral divided by the market value of that same collateral. Market values of the collateral is based on an independent valuation of the collateral. For example, a LTV of less than 90% is better secured and has less credit risk than a LTV of greater than or equal to 90%.

Loss given default (LGD) - Assuming a credit obligor enters default status, an estimate of loss, based on collateral type, collateral value, loan exposure, and other factors. LGD is net of recovery, through any means, including but not limited to the liquidation of collateral or deficiency judgments rendered from foreclosure or bankruptcy proceedings.

Nonaccrual loans - Loans for which we do not accrue interest income. Nonaccrual loans include nonperforming loans, in addition to loans accounted for under fair value option and loans accounted for as held for sale for which full collection of contractual principal and/or interest is not probable.

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 asserts. 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.



THE PNC FINANCIAL SERVICES GROUP, INC.

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Notional amount - A number of currency units, shares, or other units specified in a derivative contract.

Off-balance sheet credit exposures - Standby letters of credit, financial guarantees, commitments to extend credit and similar unfunded obligations that are not unilaterally, unconditionally, cancelable at PNC’s 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).

Options - Contracts that grant the purchaser, for a premium payment, the right, but not the obligation, to either purchase or sell the associated financial instrument at a set price during a specified period or at a specified date in the future.

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.

Probability of default (PD) - An estimate of the likelihood that a credit obligor will enter into default status.

Purchased credit deteriorated assets - 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.

Recovery - Cash proceeds received on a loan that we had previously charged off. We credit the amount received to the allowance for loan and lease losses.

Reasonable and supportable forecast period (RSFP) - In context of CECL, the period for which forecasts and projections of macroeconomic variables have been determined to be reasonable and supportable, and are used as inputs for ACL measurement.

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 - An intangible asset or liability 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 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.

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.