Exhibit 99.1

pncbanklogoa18.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
THIRD QUARTER 2020
(Unaudited)




THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
THIRD 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 October 14, 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 Third 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
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
In millions, except per share data
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Interest Income
 
 

 
 
 
 
 

 
 
 
 
 
Loans
$
2,116

 
$
2,257

 
$
2,480

 
$
2,573

 
$
2,678

 
 
$
6,853

 
$
7,952

Investment securities
490

 
527

 
582

 
560

 
617

 
 
1,599

 
1,866

Other
70

 
71

 
138

 
201

 
208

 
 
279

 
610

Total interest income
2,676

 
2,855

 
3,200

 
3,334

 
3,503

 
 
8,731

 
10,428

Interest Expense


 


 
 
 
 
 


 
 


 
 
Deposits
74

 
141

 
375

 
468

 
531

 
 
590

 
1,518

Borrowed funds
118

 
187

 
314

 
378

 
468

 
 
619

 
1,433

Total interest expense
192

 
328

 
689

 
846

 
999

 
 
1,209

 
2,951

Net interest income
2,484

 
2,527

 
2,511

 
2,488

 
2,504

 
 
7,522

 
7,477

Noninterest Income


 


 
 
 
 
 


 
 


 
 
Asset management
215

 
199

 
201

 
216

 
213

 
 
615

 
646

Consumer services
390

 
330

 
377

 
390

 
402

 
 
1,097

 
1,165

Corporate services
479

 
512

 
526

 
499

 
469

 
 
1,517

 
1,415

Residential mortgage
137

 
158

 
210

 
87

 
134

 
 
505

 
281

Service charges on deposits
119

 
79

 
168

 
185

 
178

 
 
366

 
517

Other (a)
457

 
271

 
343

 
456

 
342

 
 
1,071

 
1,017

Total noninterest income
1,797

 
1,549

 
1,825

 
1,833

 
1,738

 
 
5,171

 
5,041

Total revenue
4,281

 
4,076

 
4,336

 
4,321

 
4,242

 
 
12,693

 
12,518

Provision For Credit Losses
52

 
2,463

 
914

 
221

 
183

 
 
3,429

 
552

Noninterest Expense


 


 
 
 
 
 


 
 


 
 
Personnel
1,410

 
1,373

 
1,369

 
1,468

 
1,400

 
 
4,152

 
4,179

Occupancy
205

 
199

 
207

 
201

 
206

 
 
611

 
633

Equipment
292

 
301

 
287

 
348

 
291

 
 
880

 
862

Marketing
67

 
47

 
58

 
77

 
76

 
 
172

 
224

Other
557

 
595

 
622

 
668

 
650

 
 
1,774

 
1,914

Total noninterest expense
2,531

 
2,515

 
2,543

 
2,762

 
2,623

 
 
7,589

 
7,812

Income (loss) from continuing operations before income taxes and noncontrolling interests
1,698

 
(902
)
 
879

 
1,338

 
1,436

 
 
1,675

 
4,154

Income taxes (benefit) from continuing operations
166

 
(158
)
 
120

 
195

 
255

 
 
128

 
706

Net income (loss) from continuing operations
1,532

 
(744
)
 
759

 
1,143

 
1,181

 
 
1,547

 
3,448

Income from discontinued operations before taxes


 
5,596

 
181

 
288

 
251

 
 
5,777

 
700

Income taxes from discontinued operations


 
1,197

 
25

 
50

 
40

 
 
1,222

 
111

Net income from discontinued operations


 
4,399

 
156

 
238

 
211

 
 
4,555

 
589

Net income
1,532

 
3,655

 
915

 
1,381

 
1,392

 
 
6,102

 
4,037

Less: Net income attributable to noncontrolling interests
13

 
7

 
7

 
14

 
13

 
 
27

 
35

Preferred stock dividends (b)
63

 
55

 
63

 
55

 
63

 
 
181

 
181

Preferred stock discount accretion and
redemptions
1

 
1

 
1

 
1

 
1

 
 
3

 
3

Net income attributable to common shareholders
$
1,455

 
$
3,592

 
$
844

 
$
1,311

 
$
1,315

 
 
$
5,891

 
$
3,818

Earnings Per Common Share


 
 
 
 
 
 
 
 
 
 


 
 
Basic earnings (loss) from continuing operations
$
3.40

 
$
(1.90
)
 
$
1.59

 
$
2.44

 
$
2.47

 
 
$
3.11

 
$
7.15

Basic earnings from discontinued operations


 
10.28

 
.37

 
.54

 
.48

 
 
10.61

 
1.30

Total basic earnings
$
3.40

 
$
8.40

 
$
1.96

 
$
2.98

 
$
2.95

 
 
$
13.73

 
$
8.45

Diluted earnings (loss) from continuing operations
$
3.39

 
$
(1.90
)
 
$
1.59

 
$
2.43

 
$
2.47

 
 
$
3.11

 
$
7.13

Diluted earnings from discontinued operations


 
10.28

 
.36

 
.54

 
.47

 
 
10.59

 
1.29

Total diluted earnings
$
3.39

 
$
8.40

 
$
1.95

 
$
2.97

 
$
2.94

 
 
$
13.70

 
$
8.42

Average Common Shares Outstanding


 
 
 
 
 
 
 
 
 
 


 
 
Basic
426

 
426

 
429

 
437

 
444

 
 
427

 
450

Diluted
426

 
426

 
430

 
438

 
445

 
 
428

 
451

Efficiency
59
%
 
62
%
 
59
%
 
64
%
 
62
%
 
 
60
%
 
62
%
Noninterest income to total revenue
42
%
 
38
%
 
42
%
 
42
%
 
41
%
 
 
41
%
 
40
%
Effective tax rate from continuing operations (c)
9.8
%
 
17.5
%
 
13.7
%
 
14.6
%
 
17.8
%
 
 
7.6
%
 
17.0
%

(a)
Includes net gains on sales of securities of $32 million, $40 million, $182 million, $12 million, and $3 million for the quarters ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019 and September 30, 2019, respectively, and $254 million and $36 million for the nine months ended September 30, 2020 and September 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)
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
In millions, except par value
2020
 
2020
 
2020
 
2019
 
2019
Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
6,629

 
$
6,338

 
$
7,493

 
$
5,061

 
$
5,671

Interest-earning deposits with banks (a)
70,959

 
50,233

 
19,986

 
23,413

 
19,036

Loans held for sale (b)
1,787

 
1,443

 
1,693

 
1,083

 
1,872

Asset held for sale (c)
 
 


 
8,511

 
8,558

 
8,321

Investment securities – available for sale
89,747

 
97,052

 
89,077

 
69,163

 
69,057

Investment securities – held to maturity
1,438

 
1,441

 
1,469

 
17,661

 
18,826

Loans (b)
249,279

 
258,236

 
264,643

 
239,843

 
237,377

Allowance for loan and lease losses (d)
(5,751
)
 
(5,928
)
 
(3,944
)
 
(2,742
)
 
(2,738
)
Net loans
243,528

 
252,308

 
260,699

 
237,101

 
234,639

Equity investments
4,938

 
4,943

 
4,694

 
5,176

 
5,004

Mortgage servicing rights
1,113

 
1,067

 
1,082

 
1,644

 
1,483

Goodwill
9,233

 
9,233

 
9,233

 
9,233

 
9,233

Other (b)
32,445

 
34,920

 
41,556

 
32,202

 
35,774

Total assets
$
461,817

 
$
458,978

 
$
445,493

 
$
410,295

 
$
408,916

Liabilities
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
Noninterest-bearing
$
107,281

 
$
99,458

 
$
81,614

 
$
72,779

 
$
74,077

Interest-bearing
247,798

 
246,539

 
223,590

 
215,761

 
211,506

Total deposits
355,079

 
345,997

 
305,204

 
288,540

 
285,583

Borrowed funds
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
5,500

 
8,500

 
23,491

 
16,341

 
21,901

Bank notes and senior debt
26,839

 
27,704

 
31,438

 
29,010

 
27,148

Subordinated debt
6,465

 
6,500

 
6,475

 
6,134

 
5,473

Other (b)
3,306

 
4,322

 
11,995

 
8,778

 
6,832

Total borrowed funds
42,110

 
47,026

 
73,399

 
60,263

 
61,354

Allowance for unfunded lending related commitments (d)
689

 
662

 
450

 
318

 
304

Accrued expenses and other liabilities
10,629

 
12,345

 
17,150

 
11,831

 
12,220

Total liabilities
408,507

 
406,030

 
396,203

 
360,952

 
359,461

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

 
2,712

 
2,712

 
2,712

 
2,711

Capital surplus
15,836

 
16,284

 
16,288

 
16,369

 
16,297

Retained earnings
45,947

 
44,986

 
41,885

 
42,215

 
41,413

Accumulated other comprehensive income
2,997

 
3,069

 
2,518

 
799

 
837

Common stock held in treasury at cost:118, 117, 118, 109 and 103 shares
(14,216
)
 
(14,128
)
 
(14,140
)
 
(12,781
)
 
(11,838
)
Total shareholders’ equity
53,276

 
52,923

 
49,263

 
49,314

 
49,420

Noncontrolling interests
34

 
25

 
27

 
29

 
35

Total equity
53,310

 
52,948

 
49,290

 
49,343

 
49,455

Total liabilities and equity
$
461,817

 
$
458,978

 
$
445,493

 
$
410,295

 
$
408,916

(a)
Amounts include balances held with the Federal Reserve Bank of Cleveland of $70.6 billion, $50.0 billion, $19.6 billion, $23.2 billion and $18.8 billion as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019 and September 30, 2019, respectively.
(b)
Amounts include assets and liabilities for which PNC has elected the fair value option. Our second quarter 2020 Form 10-Q included, and our third 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 included additional information related to the Blackrock divestiture.
(d)
Amounts as of September 30, 2020 and 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 10-K and our first and second quarter 2020 Form 10-Qs included, and our third 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
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
In millions
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Assets

 

 
 
 
 
 
 
 
 
 
 
 
Interest-earning assets:

 

 
 
 
 
 
 
 
 
 
 
 
Investment securities

 

 
 
 
 
 
 
 
 
 
 
 
Securities available for sale

 

 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 
 
 
 
 
 
 
 
 
 
 
Agency
$
52,215

 
$
52,500

 
$
49,636

 
$
33,937

 
$
32,926

 
 
$
51,453

 
$
30,714

Non-agency
1,437

 
1,529

 
1,617

 
1,582

 
1,716

 
 
1,527

 
1,802

Commercial mortgage-backed
6,927

 
7,232

 
6,734

 
6,054

 
5,728

 
 
6,964

 
5,549

Asset-backed
5,033

 
5,309

 
5,003

 
5,059

 
5,208

 
 
5,115

 
5,247

U.S. Treasury and government agencies
18,724

 
15,457

 
15,938

 
15,966

 
17,573

 
 
16,714

 
18,207

Other
4,723

 
4,952

 
4,024

 
2,849

 
3,053

 
 
4,567

 
3,316

Total securities available for sale
89,059

 
86,979

 
82,952

 
65,447

 
66,204

 
 
86,340

 
64,835

Securities held to maturity


 


 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 

 
14,943

 
15,768

 
 

 
15,582

Commercial mortgage-backed

 

 

 
498

 
544

 
 

 
571

Asset-backed

 
22

 
51

 
54

 
79

 
 
24

 
143

U.S. Treasury and government agencies
788

 
783

 
779

 
774

 
769

 
 
783

 
765

Other
655

 
646

 
640

 
1,794

 
1,802

 
 
648

 
1,823

Total securities held to maturity
1,443

 
1,451

 
1,470

 
18,063

 
18,962

 
 
1,455

 
18,884

Total investment securities
90,502

 
88,430

 
84,422

 
83,510

 
85,166

 
 
87,795

 
83,719

Loans


 


 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
139,795

 
153,595

 
128,723

 
124,876

 
125,356

 
 
140,701

 
123,069

Commercial real estate
29,081

 
28,707

 
28,275

 
28,670

 
28,855

 
 
28,689

 
28,477

Equipment lease financing
6,771

 
7,035

 
7,066

 
7,199

 
7,272

 
 
6,958

 
7,273

Consumer
54,692

 
56,485

 
57,680

 
56,765

 
55,702

 
 
56,279

 
55,303

Residential real estate
22,753

 
22,292

 
21,828

 
21,341

 
20,497

 
 
22,292

 
19,602

Total loans
253,092

 
268,114

 
243,572

 
238,851

 
237,682

 
 
254,919

 
233,724

Interest-earning deposits with banks (b)
60,327

 
34,600

 
17,569

 
23,316

 
15,632

 
 
37,582

 
14,708

Other interest-earning assets
9,752

 
10,867

 
9,468

 
11,371

 
14,094

 
 
10,028

 
12,780

Total interest-earning assets
413,673

 
402,011

 
355,031

 
357,048

 
352,574

 
 
390,324

 
344,931

Noninterest-earning assets
48,466

 
55,302

 
57,405

 
54,371

 
54,135

 
 
53,705

 
51,668

Total assets
$
462,139

 
$
457,313

 
$
412,436

 
$
411,419

 
$
406,709

 
 
$
444,029

 
$
396,599

Liabilities and Equity


 


 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities:


 


 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits


 


 
 
 
 
 
 
 
 
 
 
 
Money market
$
63,598

 
$
61,346

 
$
53,287

 
$
56,209

 
$
56,271

 
 
$
59,426

 
$
55,268

Demand
87,226

 
82,881

 
70,931

 
69,496

 
65,444

 
 
80,371

 
64,459

Savings
77,479

 
75,345

 
69,977

 
66,827

 
64,054

 
 
74,279

 
61,627

Time deposits
20,248

 
21,873

 
21,141

 
21,600

 
21,173

 
 
21,084

 
20,017

Total interest-bearing deposits
248,551

 
241,445

 
215,336

 
214,132

 
206,942

 
 
235,160

 
201,371

Borrowed funds


 


 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
7,196

 
12,559

 
13,440

 
18,944

 
25,883

 
 
11,051

 
23,368

Bank notes and senior debt
25,858

 
28,298

 
29,988

 
27,403

 
27,409

 
 
28,040

 
26,571

Subordinated debt
5,936

 
5,937

 
5,934

 
5,760

 
5,189

 
 
5,935

 
5,530

Other
4,354

 
6,435

 
7,826

 
7,926

 
5,452

 
 
6,199

 
6,564

Total borrowed funds
43,344

 
53,229

 
57,188

 
60,033

 
63,933

 
 
51,225

 
62,033

Total interest-bearing liabilities
291,895

 
294,674

 
272,524

 
274,165

 
270,875

 
 
286,385

 
263,404

Noninterest-bearing liabilities and equity:


 


 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
101,931

 
93,776

 
74,396

 
73,626

 
72,149

 
 
90,078

 
71,736

Accrued expenses and other liabilities
15,341

 
16,989

 
16,437

 
14,541

 
14,529

 
 
16,251

 
12,975

Equity
52,972

 
51,874

 
49,079

 
49,087

 
49,156

 
 
51,315

 
48,484

Total liabilities and equity
$
462,139

 
$
457,313

 
$
412,436

 
$
411,419

 
$
406,709

 
 
$
444,029

 
$
396,599


(a)
Calculated using average daily balances.
(b)
Amounts include average balances held with the Federal Reserve Bank of Cleveland of $60.0 billion, $34.2 billion, $17.3 billion, $23.0 billion and $15.3 billion for the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively, and $37.3 billion and $14.4 billion for the nine months ended September 30, 2020 and September 30, 2019, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 4 

Table 4: Details of Net Interest Margin (Unaudited)
 
 
 
 
 
 
Three months ended
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
 
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Average yields/rates (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Yield on interest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities available for sale
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agency
2.03
%
 
2.29
%
 
2.63
%
 
2.48
%
 
2.70
%
 
 
2.31
%
 
2.85
%
Non-agency
7.26
%
 
7.13
%
 
7.87
%
 
8.09
%
 
8.89
%
 
 
7.43
%
 
8.04
%
Commercial mortgage-backed
2.50
%
 
2.59
%
 
2.95
%
 
2.30
%
 
2.97
%
 
 
2.68
%
 
3.05
%
Asset-backed
2.44
%
 
2.60
%
 
3.05
%
 
3.26
%
 
3.31
%
 
 
2.70
%
 
3.33
%
U.S. Treasury and government agencies
1.64
%
 
1.77
%
 
2.29
%
 
2.31
%
 
2.44
%
 
 
1.88
%
 
2.47
%
Other
3.39
%
 
3.47
%
 
3.69
%
 
3.36
%
 
3.41
%
 
 
3.51
%
 
3.36
%
Total securities available for sale
2.16
%
 
2.39
%
 
2.77
%
 
2.65
%
 
2.90
%
 
 
2.43
%
 
2.97
%
Securities held to maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage-backed

 

 

 
2.63
%
 
2.78
%
 
 

 
2.91
%
Commercial mortgage-backed

 

 

 
4.44
%
 
3.68
%
 
 

 
3.59
%
Asset-backed

 
2.38
%
 
2.77
%
 
3.02
%
 
5.48
%
 
 
2.66
%
 
4.18
%
U.S. Treasury and government agencies
2.86
%
 
2.84
%
 
2.84
%
 
2.86
%
 
2.86
%
 
 
2.85
%
 
2.84
%
Other
4.20
%
 
4.27
%
 
4.48
%
 
4.47
%
 
4.40
%
 
 
4.32
%
 
4.41
%
Total securities held to maturity
3.47
%
 
3.47
%
 
3.56
%
 
2.87
%
 
2.98
%
 
 
3.50
%
 
3.08
%
Total investment securities
2.18
%
 
2.41
%
 
2.78
%
 
2.70
%
 
2.91
%
 
 
2.45
%
 
3.00
%
Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
2.82
%
 
2.83
%
 
3.62
%
 
3.88
%
 
4.06
%
 
 
3.07
%
 
4.20
%
Commercial real estate
2.65
%
 
2.84
%
 
3.64
%
 
3.89
%
 
4.40
%
 
 
3.03
%
 
4.40
%
Equipment lease financing
3.80
%
 
3.82
%
 
3.93
%
 
3.87
%
 
3.82
%
 
 
3.85
%
 
3.94
%
Consumer
4.69
%
 
4.86
%
 
5.38
%
 
5.45
%
 
5.61
%
 
 
4.98
%
 
5.57
%
Residential real estate
3.74
%
 
3.86
%
 
3.96
%
 
4.10
%
 
4.21
%
 
 
3.85
%
 
4.25
%
Total loans
3.32
%
 
3.37
%
 
4.08
%
 
4.27
%
 
4.47
%
 
 
3.58
%
 
4.54
%
Interest-earning deposits with banks
.10
%
 
.10
%
 
1.27
%
 
1.66
%
 
2.17
%
 
 
.28
%
 
2.32
%
Other interest-earning assets
2.23
%
 
2.26
%
 
3.51
%
 
3.65
%
 
3.49
%
 
 
2.64
%
 
3.70
%
Total yield on interest-earning assets
2.57
%
 
2.85
%
 
3.62
%
 
3.71
%
 
3.95
%
 
 
2.98
%
 
4.04
%
Rate on interest-bearing liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market
.07
%
 
.15
%
 
.72
%
 
.93
%
 
1.14
%
 
 
.29
%
 
1.15
%
Demand
.05
%
 
.08
%
 
.41
%
 
.51
%
 
.58
%
 
 
.17
%
 
.55
%
Savings
.11
%
 
.31
%
 
.79
%
 
.97
%
 
1.14
%
 
 
.39
%
 
1.15
%
Time deposits
.58
%
 
.80
%
 
1.34
%
 
1.52
%
 
1.66
%
 
 
.91
%
 
1.63
%
Total interest-bearing deposits
.12
%
 
.23
%
 
.70
%
 
.87
%
 
1.02
%
 
 
.34
%
 
1.01
%
Borrowed funds
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal Home Loan Bank borrowings
.47
%
 
1.00
%
 
1.69
%
 
2.11
%
 
2.48
%
 
 
1.16
%
 
2.63
%
Bank notes and senior debt
1.08
%
 
1.56
%
 
2.41
%
 
2.77
%
 
3.21
%
 
 
1.72
%
 
3.35
%
Subordinated debt
1.51
%
 
1.91
%
 
2.73
%
 
3.06
%
 
3.53
%
 
 
2.05
%
 
4.09
%
Other 
1.31
%
 
.92
%
 
1.69
%
 
1.89
%
 
2.43
%
 
 
1.33
%
 
2.44
%
Total borrowed funds
1.06
%
 
1.39
%
 
2.18
%
 
2.47
%
 
2.87
%
 
 
1.59
%
 
3.05
%
Total rate on interest-bearing liabilities
.26
%
 
.44
%
 
1.00
%
 
1.21
%
 
1.45
%
 
 
.56
%
 
1.48
%
Interest rate spread
2.31
%
 
2.41
%
 
2.62
%
 
2.50
%
 
2.50
%
 
 
2.42
%
 
2.56
%
Benefit from use of noninterest bearing sources (b)
.08

 
.11

 
.22

 
.28

 
.34

 
 
.15

 
.35

Net interest margin
2.39
%
 
2.52
%
 
2.84
%
 
2.78
%
 
2.84
%
 
 
2.57
%
 
2.91
%

(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 September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019 and September 30, 2019 were $17 million, $19 million, $22 million, $23 million and $25 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2020 and September 30, 2019 were $58 million and $79 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
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
In millions, except per share data
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Basic
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
1,532

 
$
(744
)
 
$
759

 
$
1,143

 
$
1,181

 
 
$
1,547

 
$
3,448

Less:

 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interests
13

 
7

 
7

 
14

 
13

 
 
27

 
35

Preferred stock dividends (a)
63

 
55

 
63

 
55

 
63

 
 
181

 
181

Preferred stock discount accretion and redemptions
1

 
1

 
1

 
1

 
1

 
 
3

 
3

Net income (loss) from continuing operations
attributable to common shareholders
1,455

 
(807
)
 
688

 
1,073

 
1,104

 
 
1,336

 
3,229

Less: Dividends and undistributed earnings allocated
to nonvested restricted shares
8

 
1

 
3

 
5

 
5

 
 
7

 
13

Net income (loss) from continuing operations
attributable to basic common shareholders
$
1,447

 
$
(808
)
 
$
685

 
$
1,068

 
$
1,099

 
 
$
1,329

 
$
3,216

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

 
$
156

 
$
238

 
$
211

 
 
$
4,555

 
$
589

Less: Undistributed earnings allocated to nonvested
   restricted shares
 
 
21

 
1

 
1

 
1

 
0

22

 
2

Net income from discontinued operations attributable to
   basic common shareholders

 
$
4,378

 
$
155

 
$
237

 
$
210

 
 
$
4,533

 
$
587

Basic weighted-average common shares outstanding
426

 
426

 
429

 
437

 
444

 
 
427

 
450

Basic earnings (loss) per common share from
continuing operations
$
3.40

 
$
(1.90
)
 
$
1.59

 
$
2.44

 
$
2.47

 
 
$
3.11

 
$
7.15

Basic earnings per common share from discontinued
   operations

 
$
10.28

 
$
.37

 
$
.54

 
$
.48

 
 
$
10.61

 
$
1.30

Basic earnings per common share
$
3.40

 
$
8.40

 
$
1.96

 
$
2.98

 
$
2.95

 
 
$
13.73

 
$
8.45

Diluted
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
   attributable to diluted common shareholders
$
1,447

 
$
(808
)
 
$
685

 
$
1,068

 
$
1,099

 
 
$
1,329

 
$
3,216

Net income from discontinued operations attributable to
basic common shareholders

 
$
4,378

 
$
155

 
$
237

 
$
210

 
 
$
4,533

 
$
587

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

 
1

 
3

 
2

 
0

2

0

7

Net income from discontinued operations attributable to
diluted common shareholders

 
$
4,377

 
$
154

 
$
234

 
$
208

 
 
$
4,531

 
$
580

Basic weighted-average common shares outstanding
426

 
426

 
429

 
437

 
444

 
 
427

 
450

Dilutive potential common shares
 
 

 
1

 
1

0.000004

1

 
 
1

 
1

Diluted weighted-average common shares outstanding
426

 
426

 
430

 
438

 
445

 
 
428

 
451

Diluted earnings (loss) per common share from
   continuing operations
$
3.39

 
$
(1.90
)
 
$
1.59

 
$
2.43

 
$
2.47

 
 
$
3.11

 
$
7.13

Diluted earnings per common share from discontinued
  operations
 
 
$
10.28

 
$
.36

 
$
.54

 
$
.47

 
 
$
10.59

 
$
1.29

Diluted earnings per common share
$
3.39

 
$
8.40

 
$
1.95

 
$
2.97

 
$
2.94

 
 
$
13.70

 
$
8.42

(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)
 
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
In millions
 
2020
 
2020
 
2020
 
2019
 
2019
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Manufacturing
 
$
22,551

 
$
25,590

 
$
27,225

 
$
21,540

 
$
21,846

Retail/wholesale trade
 
20,287

 
21,747

 
24,408

 
21,565

 
21,761

Service providers
 
20,260

 
21,347

 
19,411

 
16,112

 
16,189

Real estate related (a)
 
14,040

 
14,634

 
14,843

 
12,346

 
12,294

Financial services
 
15,005

 
13,596

 
13,473

 
11,318

 
10,437

Health care
 
9,368

 
10,109

 
9,238

 
8,035

 
8,137

Transportation and warehousing
 
7,295

 
7,771

 
8,160

 
7,474

 
7,216

Other industries
 
28,381

 
29,541

 
32,373

 
26,947

 
26,134

Total commercial and industrial
 
137,187

 
144,335

 
149,131

 
125,337

 
124,014

Commercial real estate
 
29,028

 
28,763

 
28,544

 
28,110

 
28,884

Equipment lease financing
 
6,479

 
7,097

 
7,061

 
7,155

 
7,290

Total commercial
 
172,694

 
180,195

 
184,736

 
160,602

 
160,188

Consumer
 
 
 
 
 
 
 
 
 
 
Home equity
 
24,539

 
24,879

 
25,081

 
25,085

 
24,971

Residential real estate
 
22,886

 
22,469

 
22,250

 
21,821

 
21,082

Automobile
 
14,977

 
16,157

 
17,194

 
16,754

 
16,004

Credit card
 
6,303

 
6,575

 
7,132

 
7,308

 
6,815

Education
 
3,051

 
3,132

 
3,247

 
3,336

 
3,461

Other consumer
 
4,829

 
4,829

 
5,003

 
4,937

 
4,856

Total consumer
 
76,585

 
78,041

 
79,907

 
79,241

 
77,189

Total loans
 
$
249,279

 
$
258,236

 
$
264,643

 
$
239,843

 
$
237,377

(a) Represents 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
 
 
Three months ended
 
 
Nine months ended
 
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
Dollars in millions
 
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Allowance for loan and lease losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
$
5,928

 
$
3,944

 
$
2,742

 
$
2,738

 
$
2,721

 
 
$
2,742

 
$
2,629

Adoption of ASU 2016-03 (a)
 
 
 

 
463

 

 

 
 
463

 
 
Gross charge-offs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(59
)
 
(112
)
 
(78
)
 
(67
)
 
(41
)
 
 
(249
)
 
(116
)
Commercial real estate
 
(1
)
 

 

 
(2
)
 
(11
)
 
 
(1
)
 
(16
)
Equipment lease financing
 
(4
)
 
(10
)
 
(5
)
 
(9
)
 
(2
)
 
 
(19
)
 
(6
)
Home equity
 
(12
)
 
(8
)
 
(11
)
 
(16
)
 
(11
)
 
 
(31
)
 
(52
)
Residential real estate
 
(2
)
 

 
(2
)
 
(4
)
 
(1
)
 
 
(4
)
 
(5
)
Automobile
 
(57
)
 
(69
)
 
(84
)
 
(78
)
 
(71
)
 
 
(210
)
 
(183
)
Credit card
 
(74
)
 
(76
)
 
(78
)
 
(70
)
 
(61
)
 
 
(228
)
 
(193
)
Education
 
(3
)
 
(4
)
 
(6
)
 
(6
)
 
(7
)
 
 
(13
)
 
(20
)
Other consumer
 
(35
)
 
(35
)
 
(40
)
 
(39
)
 
(36
)
 
 
(110
)
 
(92
)
Total gross charge-offs
 
(247
)
 
(314
)
 
(304
)
 
(291
)
 
(241
)
 
 
(865
)
 
(683
)
Recoveries:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
21

 
13

 
18

 
14

 
14

 
 
52

 
45

Commercial real estate
 
2

 

 
4

 
3

 
3

 
 
6

 
8

Equipment lease financing
 
3

 
2

 
2

 
2

 
2

 
 
7

 
6

Home equity
 
15

 
15

 
14

 
18

 
20

 
 
44

 
56

Residential real estate
 
4

 
4

 
4

 
3

 
4

 
 
12

 
11

Automobile
 
31

 
29

 
35

 
29

 
30

 
 
95

 
85

Credit card
 
9

 
9

 
8

 
6

 
7

 
 
26

 
21

Education
 
2

 
2

 
2

 
2

 
2

 
 
6

 
6

Other consumer
 
5

 
4

 
5

 
5

 
4

 
 
14

 
12

Total recoveries
 
92

 
78

 
92

 
82

 
86

 
 
262

 
250

Net (charge-offs) / recoveries:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
(38
)
 
(99
)
 
(60
)
 
(53
)
 
(27
)
 
 
(197
)
 
(71
)
Commercial real estate
 
1

 

 
4

 
1

 
(8
)
 
 
5

 
(8
)
Equipment lease financing
 
(1
)
 
(8
)
 
(3
)
 
(7
)
 

 
 
(12
)
 

Home equity
 
3

 
7

 
3

 
2

 
9

 
 
13

 
4

Residential real estate
 
2

 
4

 
2

 
(1
)
 
3

 
 
8

 
6

Automobile
 
(26
)
 
(40
)
 
(49
)
 
(49
)
 
(41
)
 
 
(115
)
 
(98
)
Credit card
 
(65
)
 
(67
)
 
(70
)
 
(64
)
 
(54
)
 
 
(202
)
 
(172
)
Education
 
(1
)
 
(2
)
 
(4
)
 
(4
)
 
(5
)
 
 
(7
)
 
(14
)
Other consumer
 
(30
)
 
(31
)
 
(35
)
 
(34
)
 
(32
)
 
 
(96
)
 
(80
)
Total net (charge-offs)
 
(155
)
 
(236
)
 
(212
)
 
(209
)
 
(155
)
 
 
(603
)
 
(433
)
Provision for (recapture of) credit losses (b)
 
(23
)
 
2,220

 
952

 
221

 
183

 
 
3,149

 
552

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

 

 

 

 
(14
)
 
(13
)
 
 

 
(19
)
Other
 
1

 

 
(1
)
 
6

 
2

 
 

 
9

Ending balance
 
$
5,751

 
$
5,928

 
$
3,944

 
$
2,742

 
$
2,738

 
 
$
5,751

 
$
2,738

Supplemental Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net charge-offs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial net charge-offs
 
$
(38
)
 
$
(107
)
 
$
(59
)
 
$
(59
)
 
$
(35
)
 
 
$
(204
)
 
$
(79
)
Consumer net charge-offs
 
(117
)
 
(129
)
 
(153
)
 
(150
)
 
(120
)
 
 
(399
)
 
(354
)
Total net charge-offs
 
$
(155
)
 
$
(236
)
 
$
(212
)
 
$
(209
)
 
$
(155
)
 
 
$
(603
)
 
$
(433
)
Net charge-offs to average loans (annualized)
 
.24
%
 
.35
%
 
.35
%
 
.35
%
 
.26
%
 
 
.32
%
 
.25
%
Commercial
 
.09
%
 
.23
%
 
.14
%
 
.15
%
 
.09
%
 
 
.15
%
 
.07
%
Consumer
 
.60
%
 
.66
%
 
.77
%
 
.76
%
 
.62
%
 
 
.68
%
 
.63
%

(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 and second quarter 2020 Form 10-Qs included, and our third 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
 
 
Nine months ended
 
 
September 30
 
June 30
 
March 31
 
 
September 30
In millions
 
2020
 
2020
 
2020
 
 
2020
Provision for credit losses
 
 
 
 
 
 
 
 
 
Loans and leases
 
$
(23
)
 
$
2,220

 
$
952

 
 
$
3,149

Unfunded lending related commitments
 
27

 
212

 
(47
)
 
 
192

Investment securities
 
39

 
30

 

 
 
69

Other financial assets
 
9

 
1

 
9

 
 
19

Total provision for credit losses
 
$
52

 
$
2,463

 
914

 
 
$
3,429


Table 9: Allowance for Credit Losses by Loan Class (a)
 
September 30, 2020
 
June 30, 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
$
2,735

 
$
137,187

1.99
%
 
$
2,834

 
$
144,335

1.96
%
 
$
1,489

 
$
125,337

1.19
%
Commercial real estate
630

 
29,028

2.17
%
 
382

 
28,763

1.33
%
 
278

 
28,110

.99
%
Equipment lease financing
163

 
6,479

2.52
%
 
164

 
7,097

2.31
%
 
45

 
7,155

.63
%
Total commercial
3,528

 
172,694

2.04
%
 
3,380

 
180,195

1.88
%
 
1,812

 
160,602

1.13
%
Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
349

 
24,539

1.42
%
 
382

 
24,879

1.54
%
 
87

 
25,085

.35
%
Residential real estate
28

 
22,886

.12
%
 
50

 
22,469

.22
%
 
258

 
21,821

1.18
%
Automobile
404

 
14,977

2.70
%
 
450

 
16,157

2.79
%
 
160

 
16,754

.95
%
Credit card
891

 
6,303

14.14
%
 
1,010

 
6,575

15.36
%
 
288

 
7,308

3.94
%
Education
136

 
3,051

4.46
%
 
151

 
3,132

4.82
%
 
17

 
3,336

.51
%
Other consumer
415

 
4,829

8.59
%
 
505

 
4,829

10.46
%
 
120

 
4,937

2.43
%
Total consumer
2,223

 
76,585

2.90
%
 
2,548

 
78,041

3.26
%
 
930

 
79,241

1.17
%
Total
5,751

 
$
249,279

2.31
%
 
5,928

 
$
258,236

2.30
%
 
2,742

 
$
239,843

1.14
%
Allowance for unfunded lending related commitments
689

 
 
 
 
662

 
 
 
 
318

 
 
 
Allowance for credit losses
$
6,440

 
 
 
 
$
6,590

 
 
 
 
$
3,060

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Supplemental Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allowance for credit losses to total loans
 
 
 
2.58
%
 
 
 
 
2.55
%
 
 
 
 
1.28
%
Commercial
 
 
 
2.38
%
 
 
 
 
2.18
%
 
 
 
 
1.33
%
Consumer
 
 
 
3.04
%
 
 
 
 
3.41
%
 
 
 
 
1.18
%

(a)    Excludes allowances for investment securities and other financial assets, which together totaled $98 million and $51 million at September 30, 2020 and June 30, 2020,
respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 9 

Details of Nonperforming Assets (Unaudited)

Table 10: Nonperforming Assets by Type
 
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
Dollars in millions
 
2020
 
2020
 
2020
 
2019
 
2019
Nonperforming loans, including TDRs
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Retail/wholesale trade
 
$
90

 
$
117

 
$
121

 
$
74

 
$
61

Manufacturing
 
80

 
58

 
79

 
102

 
109

Service providers
 
69

 
57

 
63

 
53

 
55

Real estate related (a)
 
140

 
158

 
25

 
24

 
33

Health care
 
20

 
19

 
14

 
17

 
17

Transportation and warehousing
 
14

 
20

 
23

 
18

 
13

Other industries
 
264

 
264

 
169

 
137

 
203

Total commercial and industrial
 
677

 
693

 
494

 
425

 
491

Commercial real estate
 
217

 
43

 
42

 
44

 
75

Equipment lease financing
 
21

 
22

 
30

 
32

 
10

Total commercial
 
915

 
758

 
566

 
501

 
576

Consumer (b)
 
 
 
 
 
 
 
 
 
 
Home equity
 
639

 
636

 
617

 
669

 
685

Residential real estate
 
339

 
305

 
292

 
315

 
325

Automobile
 
171

 
156

 
154

 
135

 
128

Credit card
 
13

 
15

 
10

 
11

 
9

Other consumer
 
8

 
6

 
5

 
4

 
5

Total consumer
 
1,170

 
1,118

 
1,078

 
1,134

 
1,152

Total nonperforming loans (c) (d)
 
2,085

 
1,876

 
1,644

 
1,635

 
1,728

OREO and foreclosed assets
 
67

 
79

 
111

 
117

 
119

Total nonperforming assets
 
$
2,152

 
$
1,955

 
$
1,755

 
$
1,752

 
$
1,847

Nonperforming loans to total loans
 
.84
%
 
.73
%
 
.62
%
 
.68
%
 
.73
%
Nonperforming assets to total loans, OREO and foreclosed assets
 
.86
%
 
.76
%
 
.66
%
 
.73
%
 
.78
%
Nonperforming assets to total assets
 
.47
%
 
.43
%
 
.39
%
 
.43
%
 
.45
%
Allowance for loan and lease losses to nonperforming loans (e)
 
276
%
 
316
%
 
240
%
 
168
%
 
158
%

(a)
Represents loans related to customers in the real estate and construction industries.
(b)
Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
(c)
Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option. Amounts in 2019 also excluded purchased impaired loans.
(d)
In connection with the adoption of the CECL standard, nonperforming loans as of September 30, 2020, June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first and second quarter 2020 Form 10-Qs included, and our third quarter 2020 Form 10-Q will include, additional information related to our adoption of the CECL standard.
(e)
Ratios at September 30, 2020, 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
 
 
July 1, 2020 -

 
April 1, 2020 -

 
January 1, 2020 -

 
October 1, 2019 -

 
July 1, 2019 -

In millions
 
September 30, 2020

 
June 30, 2020

 
March 31, 2020

 
December 31, 2019

 
September 30, 2019

Beginning balance
 
$
1,955

 
$
1,755

 
$
1,752

 
$
1,847

 
$
1,850

New nonperforming assets
 
512

 
458

 
391

 
357

 
290

Charge-offs and valuation adjustments
 
(75
)
 
(104
)
 
(145
)
 
(218
)
 
(112
)
Principal activity, including paydowns and payoffs
 
(175
)
 
(85
)
 
(158
)
 
(157
)
 
(122
)
Asset sales and transfers to loans held for sale
 
(20
)
 
(28
)
 
(20
)
 
(21
)
 
(34
)
Returned to performing status
 
(45
)
 
(41
)
 
(65
)
 
(56
)
 
(25
)
Ending balance
 
$
2,152

 
$
1,955

 
$
1,755

 
$
1,752

 
$
1,847



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

 
Industry
1
 
$
142

 
Real Estate and Rental and Leasing
2
 
85

 
Real Estate and Rental and Leasing
3
 
35

 
Real Estate and Rental and Leasing
4
 
34

 
Wholesale Trade
5
 
33

 
Real Estate and Rental and Leasing
6
 
33

 
Mining, Quarrying, and Oil and Gas Extraction
7
 
29

 
Information
8
 
27

 
Mining, Quarrying, and Oil and Gas Extraction
9
 
23

 
Mining, Quarrying, and Oil and Gas Extraction
10
 
20

 
Mining, Quarrying, and Oil and Gas Extraction
Total
 
$
461

 
 
As a percent of total nonperforming assets
 
21%
 
(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 reported as of September 30, 2020 and 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:
if current at the time of modification, the loan remains current throughout the modification period,
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
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 September 30, 2020 and 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 second quarter 2020 Form 10-Q included, and our third quarter 2020 Form 10-Q will include, additional information on COVID-19 related loan modifications.

Table 13: Accruing Loans Past Due 30 to 59 Days (a) (b)
 
 
Amount
 
Percent of Total Outstandings
 
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
Dollars in millions
 
2020
 
2020
 
2020
 
2019
 
2019
 
2020
 
2020
 
2020
 
2019
 
2019
Commercial and industrial
 
$
56

 
$
49

 
$
97

 
$
102

 
$
82

 
.04
%
 
.03
%
 
.07
%
 
.08
%
 
.07
%
Commercial real estate
 
6

 
51

 
6

 
4

 
3

 
.02
%
 
.18
%
 
.02
%
 
.01
%
 
.01
%
Equipment lease financing
 
7

 
8

 
42

 
49

 
6

 
.11
%
 
.11
%
 
.59
%
 
.68
%
 
.08
%
Home equity
 
48

 
70

 
65

 
58

 
53

 
.20
%
 
.28
%
 
.26
%
 
.23
%
 
.21
%
Residential real estate
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
99

 
135

 
121

 
90

 
76

 
.43
%
 
.60
%
 
.54
%
 
.41
%
 
.36
%
Government insured
 
89

 
63

 
52

 
50

 
53

 
.39
%
 
.28
%
 
.23
%
 
.23
%
 
.25
%
Automobile
 
116

 
105

 
177

 
178

 
145

 
.77
%
 
.65
%
 
1.03
%
 
1.06
%
 
.91
%
Credit card
 
44

 
53

 
59

 
60

 
56

 
.70
%
 
.81
%
 
.83
%
 
.82
%
 
.82
%
Education
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
6

 
3

 
7

 
7

 
8

 
.20
%
 
.10
%
 
.22
%
 
.21
%
 
.23
%
Government insured
 
51

 
36

 
45

 
48

 
48

 
1.67
%
 
1.15
%
 
1.39
%
 
1.44
%
 
1.39
%
Other consumer
 
17

 
17

 
17

 
15

 
17

 
.35
%
 
.35
%
 
.34
%
 
.30
%
 
.35
%
Total
 
$
539

 
$
590

 
$
688

 
$
661

 
$
547

 
.22
%
 
.23
%
 
.26
%
 
.28
%
 
.23
%
 
Table 14: Accruing Loans Past Due 60 to 89 Days (a) (b)
 
 
Amount
 
Percent of Total Outstandings
 
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
Dollars in millions
 
2020
 
2020
 
2020
 
2019
 
2019
 
2020
 
2020
 
2020
 
2019
 
2019
Commercial and industrial
 
$
37

 
$
28

 
$
22

 
$
30

 
$
49

 
.03
%
 
.02
%
 
.01
%
 
.02
%
 
.04
%
Commercial real estate
 
6

 
4

 
1

 
1

 
3

 
.02
%
 
.01
%
 
.00
%
 
.00
%
 
.01
%
Equipment lease financing
 
4

 
9

 
2

 
5

 
4

 
.06
%
 
.13
%
 
.03
%
 
.07
%
 
.05
%
Home equity
 
22

 
27

 
28

 
24

 
24

 
.09
%
 
.11
%
 
.11
%
 
.10
%
 
.10
%
Residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
22

 
34

 
30

 
16

 
20

 
.10
%
 
.15
%
 
.13
%
 
.07
%
 
.09
%
Government insured
 
58

 
59

 
52

 
53

 
57

 
.25
%
 
.26
%
 
.23
%
 
.24
%
 
.27
%
Automobile
 
32

 
34

 
49

 
47

 
36

 
.21
%
 
.21
%
 
.28
%
 
.28
%
 
.22
%
Credit card
 
33

 
38

 
37

 
37

 
33

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

 
2

 
4

 
3

 
5

 
.07
%
 
.06
%
 
.12
%
 
.09
%
 
.14
%
Government insured
 
24

 
21

 
26

 
31

 
30

 
.79
%
 
.67
%
 
.80
%
 
.93
%
 
.87
%
Other consumer
 
11

 
8

 
10

 
11

 
8

 
.23
%
 
.17
%
 
.20
%
 
.22
%
 
.16
%
Total
 
$
251

 
$
264

 
$
261

 
$
258

 
$
269

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



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
 
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
 
Sept. 30
 
Jun. 30
 
Mar. 31
 
Dec. 31
 
Sept. 30
Dollars in millions
 
2020
 
2020
 
2020
 
2019
 
2019
 
2020
 
2020
 
2020
 
2019
 
2019
Commercial and industrial
 
$
36

 
$
34

 
$
51

 
$
85

 
$
64

 
.03
%
 
.02
%
 
.03
%
 
.07
%
 
.05
%
Residential real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
28

 
19

 
18

 
14

 
15

 
.12
%
 
.08
%
 
.08
%
 
.06
%
 
.07
%
Government insured
 
241

 
245

 
282

 
301

 
287

 
1.05
%
 
1.09
%
 
1.27
%
 
1.38
%
 
1.36
%
Automobile
 
12

 
19

 
19

 
18

 
11

 
.08
%
 
.12
%
 
.11
%
 
.11
%
 
.07
%
Credit card
 
60

 
61

 
70

 
67

 
57

 
.95
%
 
.93
%
 
.98
%
 
.92
%
 
.84
%
Education
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non government insured
 
1

 
1

 
2

 
2

 
3

 
.03
%
 
.03
%
 
.06
%
 
.06
%
 
.09
%
Government insured
 
62

 
65

 
82

 
89

 
87

 
2.03
%
 
2.08
%
 
2.53
%
 
2.67
%
 
2.51
%
Other consumer
 
8

 
12

 
10

 
9

 
8

 
.17
%
 
.25
%
 
.20
%
 
.18
%
 
.16
%
Total
 
$
448

 
$
456

 
$
534

 
$
585

 
$
532

 
.18
%
 
.18
%
 
.20
%
 
.24
%
 
.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 September 30, 2020, June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first and second quarter 2020 Form 10-Qs included, and our third 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
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
2020
 
2020
 
2020
 
2019
 
2019
Full-time employees
 
 
 
 
 
 
 
 
 
Retail Banking
27,808

 
29,051

 
28,737

 
28,270

 
28,279

Other full-time employees
21,997

 
21,752

 
21,776

 
21,747

 
21,701

Total full-time employees
49,805

 
50,803

 
50,513

 
50,017

 
49,980

Part-time employees
 
 
 
 
 
 
 
 
 
Retail Banking
1,593

 
1,854

 
1,780

 
1,759

 
1,823

Other part-time employees
104

 
476

 
129

 
142

 
153

Total part-time employees
1,697

 
2,330

 
1,909

 
1,901

 
1,976

Total
51,502

 
53,133

 
52,422

 
51,918

 
51,956

 



THE PNC FINANCIAL SERVICES GROUP, INC.

Page 14 

Table 17: Summary of Business Segment Income and Revenue (Unaudited) (a)
 
Three months ended
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
In millions
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Banking
$
530

 
$
(223
)
 
$
201

 
$
277

 
$
347

 
 
$
508

 
$
936

Corporate & Institutional Banking
670

 
(358
)
 
370

 
649

 
645

 
 
682

 
1,799

Asset Management Group
91

 
28

 
54

 
91

 
46

 
 
173

 
171

Other
241

 
(191
)
 
134

 
126

 
143

 
 
184

 
542

Net income (loss) from continuing
   operations
$
1,532

 
$
(744
)
 
$
759

 
$
1,143

 
$
1,181

 
 
$
1,547

 
$
3,448

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail Banking
$
2,056

 
$
1,975

 
$
2,244

 
$
2,054

 
$
2,137

 
 
$
6,275

 
$
6,114

Corporate & Institutional Banking
1,748

 
1,790

 
1,660

 
1,615

 
1,584

 
 
5,198

 
4,636

Asset Management Group
310

 
293

 
292

 
352

 
286

 
 
895

 
927

Other
167

 
18

 
140

 
300

 
235

 
 
325

 
841

Total revenue
$
4,281

 
$
4,076

 
$
4,336

 
$
4,321

 
$
4,242

 
 
$
12,693

 
$
12,518


(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
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
Dollars in millions
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,383

 
$
1,390

 
$
1,456

 
$
1,402

 
$
1,393

 
 
$
4,229

 
$
4,118

Noninterest income
673

 
585

 
788

 
652

 
744

 
 
2,046

 
1,996

Total revenue
2,056

 
1,975

 
2,244

 
2,054

 
2,137

 
 
6,275

 
6,114

Provision for (recapture of) credit losses
(157
)
 
761

 
445

 
161

 
147

 
 
1,049

 
356

Noninterest expense
1,521

 
1,500

 
1,536

 
1,530

 
1,536

 
 
4,557

 
4,531

Pretax earnings (loss)
692

 
(286
)
 
263

 
363

 
454

 
 
669

 
1,227

Income taxes (benefit)
162

 
(63
)
 
62

 
86

 
107

 
 
161

 
291

Earnings
$
530

 
$
(223
)
 
$
201

 
$
277

 
$
347

 
 
$
508

 
$
936

Average Balance Sheet


 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
700

 
$
829

 
$
779

 
$
747

 
$
760

 
 
$
769

 
$
586

Loans


 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer


 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
$
22,647

 
$
22,790

 
$
22,736

 
$
22,590

 
$
22,434

 
 
$
22,723

 
$
22,679

Residential real estate
18,435

 
18,244

 
17,964

 
17,352

 
16,630

 
 
18,215

 
15,806

Automobile
15,573

 
16,688

 
17,096

 
16,427

 
15,761

 
 
16,449

 
15,201

Credit card
6,408

 
6,690

 
7,207

 
6,985

 
6,624

 
 
6,767

 
6,403

Education
3,119

 
3,218

 
3,343

 
3,428

 
3,538

 
 
3,226

 
3,672

Other consumer
2,262

 
2,454

 
2,533

 
2,418

 
2,309

 
 
2,417

 
2,187

Total consumer
68,444

 
70,084

 
70,879

 
69,200

 
67,296

 
 
69,797

 
65,948

Commercial
13,356

 
13,612

 
10,524

 
10,323

 
10,379

 
 
12,298

 
10,440

Total loans
$
81,800

 
$
83,696

 
$
81,403

 
$
79,523

 
$
77,675

 
 
$
82,095

 
$
76,388

Total assets
$
98,731

 
$
102,103

 
$
97,062

 
$
94,967

 
$
93,222

 
 
$
98,764

 
$
92,282

Deposits


 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
43,752

 
$
39,134

 
$
32,225

 
$
32,674

 
$
32,092

 
 
$
38,390

 
$
31,338

Interest-bearing demand
49,274

 
47,339

 
42,865

 
41,689

 
41,420

 
 
46,501

 
42,207

Money market
23,816

 
22,942

 
22,866

 
23,927

 
24,807

 
 
23,210

 
25,786

Savings
70,236

 
67,947

 
62,781

 
59,877

 
57,752

 
 
67,000

 
55,659

Certificates of deposit
10,852

 
11,661

 
12,233

 
12,598

 
12,766

 
 
11,579

 
12,619

Total deposits
$
197,930

 
$
189,023

 
$
172,970

 
$
170,765

 
$
168,837

 
 
$
186,680

 
$
167,609

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
2.13
%
 
(.88
)%
 
.84
%
 
1.16
%
 
1.48
%
 
 
.69
%
 
1.36
%
Noninterest income to total revenue
33
%
 
30
 %
 
35
%
 
32
%
 
35
%
 
 
33
%
 
33
%
Efficiency
74
%
 
76
 %
 
68
%
 
74
%
 
72
%
 
 
73
%
 
74
%
 
(a)
See note (a) on page 14.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 16 

Retail Banking (Unaudited) (Continued)
 
Three months ended
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
September 30
 
September 30
Dollars in millions, except as noted
2020
 
2020
 
2020
 
2019
 
2019
 
2020
 
2019
Supplemental Noninterest Income
    Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer services
$
371

 
$
315

 
$
372

 
$
382

 
$
397

 
$
1,058

 
$
1,148

Residential mortgage
$
137

 
$
158

 
$
210

 
$
87

 
$
134

 
$
505

 
$
281

Service charges on deposits
$
118

 
$
80

 
$
166

 
$
183

 
$
178

 
$
364

 
$
504

Residential Mortgage Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage servicing statistics (in billions, except as noted) (a)
 
 
 
 
 
 
 
 
 
 
 
 
 
Serviced portfolio balance (b)
$
119

 
$
122

 
$
118

 
$
120

 
$
123

 
 
 
 
Serviced portfolio acquisitions
$
8

 
$
11

 
$
2

 
$
3

 
$
3

 
$
21

 
$
9

MSR asset value (b)
$
0.6

 
$
0.6

 
$
0.6

 
$
1.0

 
$
0.9

 
 
 
 
MSR capitalization value (in basis points) (b)
50

 
47

 
51

 
83

 
72

 
 
 
 
Servicing income: (in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Servicing fees, net (c)
$
25

 
$
36

 
$
44

 
$
39

 
$
44

 
$
105

 
$
139

Mortgage servicing rights valuation, net of
economic hedge
$
17

 
$
20

 
$
101

 
$
9

 
$
40

 
$
138

 
$
38

Residential mortgage loan statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan origination volume (in billions)
$
4.0

 
$
4.2

 
$
3.2

 
$
3.5

 
$
3.4

 
$
11.4

 
$
8.0

Loan sale margin percentage
3.62
%
 
3.67
%
 
3.16
%
 
2.42
%
 
2.59
%
 
3.51
%
 
2.41
%
Percentage of originations represented by:
 
 
 
 
 
 
 
 
 
 
 
 
 
Purchase volume (d)
44
%
 
34
%
 
36
%
 
40
%
 
44
%
 
38
%
 
50
%
Refinance volume
56
%
 
66
%
 
64
%
 
60
%
 
56
%
 
62
%
 
50
%
Other Information (b)
 
 
 
 
 
 
 
 
 
 
 
 
 
Customer-related statistics (average)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-teller deposit transactions (e)
67
%
 
65
%
 
59
%
 
58
%
 
58
%
 
63
%
 
57
%
Digital consumer customers (f)
75
%
 
73
%
 
71
%
 
71
%
 
70
%
 
73
%
 
69
%
Credit-related statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets
$
1,077

 
$
1,037

 
$
1,011

 
$
1,046

 
$
1,056

 
 
 
 
Net charge-offs - loans and leases
$
125

 
$
142

 
$
166

 
$
154

 
$
128

 
$
433

 
$
380

Other statistics
 
 
 
 
 
 
 
 
 
 
 
 
 
ATMs
9,058

 
9,058

 
9,048

 
9,091

 
9,102

 
 
 
 
Branches (g)
2,207

 
2,256

 
2,277

 
2,296

 
2,310

 
 
 
 
Brokerage account client assets (in billions) (h)
$
55

 
$
53

 
$
49

 
$
54

 
$
52

 
 
 
 

(a)
Represents mortgage loan servicing balances for third parties and the related income.
(b)
Presented as of period end, except for average customer-related statistics and net charge-offs, which are both shown for the three and nine 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
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
September 30
 
September 30
Dollars in millions
2020
 
2020
 
2020
 
2019
 
2019
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
1,025

 
$
1,064

 
$
966

 
$
969

 
$
930

 
$
3,055

 
$
2,745

Noninterest income
723

 
726

 
694

 
646

 
654

 
2,143

 
1,891

Total revenue
1,748

 
1,790

 
1,660

 
1,615

 
1,584

 
5,198

 
4,636

Provision for credit losses
211

 
1,585

 
458

 
65

 
48

 
2,254

 
219

Noninterest expense
666

 
673

 
722

 
726

 
703

 
2,061

 
2,087

Pretax earnings (loss)
871

 
(468
)
 
480

 
824

 
833

 
883

 
2,330

Income taxes (benefit)
201

 
(110
)
 
110

 
175

 
188

 
201

 
531

Earnings
$
670

 
$
(358
)
 
$
370

 
$
649

 
$
645

 
$
682

 
$
1,799

Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held for sale
$
904

 
$
704

 
$
395

 
$
616

 
$
720

 
$
669

 
$
467

Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
125,187

 
$
138,992

 
$
117,288

 
$
114,113

 
$
114,701

 
$
127,149

 
$
112,371

Commercial real estate
27,511

 
27,106

 
26,589

 
26,586

 
26,570

 
27,070

 
26,257

Equipment lease financing
6,772

 
7,036

 
7,066

 
7,200

 
7,272

 
6,957

 
7,273

Total commercial
159,470

 
173,134

 
150,943

 
147,899

 
148,543

 
161,176

 
145,901

Consumer
11

 
8

 
9

 
11

 
13

 
9

 
16

Total loans
$
159,481

 
$
173,142

 
$
150,952

 
$
147,910

 
$
148,556

 
$
161,185

 
$
145,917

Total assets
$
183,266

 
$
199,254

 
$
172,502

 
$
167,555

 
$
168,193

 
$
185,001

 
$
163,126

Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
56,433

 
$
53,157

 
$
40,651

 
$
39,513

 
$
38,740

 
$
50,104

 
$
39,016

Interest-bearing demand
29,730

 
27,674

 
21,101

 
20,851

 
20,523

 
26,182

 
19,027

Money market
38,015

 
36,595

 
28,468

 
30,264

 
29,456

 
34,373

 
27,358

Other
8,956

 
9,546

 
7,868

 
7,916

 
7,100

 
8,789

 
6,258

Total deposits
$
133,134

 
$
126,972

 
$
98,088

 
$
98,544

 
$
95,819

 
$
119,448

 
$
91,659

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.45
%
 
(.72
)%
 
.87
%
 
1.54
%
 
1.52
%
 
.49
%
 
1.47
%
Noninterest income to total revenue
41
%
 
41
 %
 
42
%
 
40
%
 
41
%
 
41
%
 
41
%
Efficiency
38
%
 
38
 %
 
43
%
 
45
%
 
44
%
 
40
%
 
45
%
Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated revenue from:
 
 
 
 
 
 
 
 
 
 
 
 
 
Treasury Management (b)
$
452

 
$
469

 
$
491

 
$
494

 
$
460

 
$
1,412

 
$
1,372

Capital Markets (b)
$
345

 
$
388

 
$
344

 
$
291

 
$
290

 
$
1,077

 
$
849

Commercial mortgage banking activities
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial mortgage loans held for
   sale (c)
$
46

 
$
42

 
$
29

 
$
24

 
$
38

 
$
117

 
$
73

Commercial mortgage loan servicing
    income (d)
76

 
67

 
69

 
71

 
71

 
212

 
190

Commercial mortgage servicing rights
    valuation, net of economic hedge (e)
16

 
22

 
20

 
2

 
1

 
58

 
17

Total
$
138

 
$
131

 
$
118

 
$
97

 
$
110

 
$
387

 
$
280

MSR asset value (f)
$
515

 
$
490

 
$
477

 
$
649

 
$
595

 
 
 
 
Average Loans by C&IB business
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate Banking
$
81,617

 
$
91,634

 
$
78,057

 
$
75,665

 
$
74,883

 
$
83,762

 
$
73,460

Real Estate
40,592

 
42,124

 
37,368

 
36,908

 
38,172

 
40,030

 
37,231

Business Credit
21,845

 
23,943

 
23,251

 
22,900

 
22,824

 
23,009

 
22,480

Commercial Banking
11,770

 
10,708

 
7,784

 
7,793

 
7,947

 
10,093

 
8,048

Other
3,657

 
4,733

 
4,492

 
4,644

 
4,730

 
4,291

 
4,698

Total average loans
$
159,481

 
$
173,142

 
$
150,952

 
$
147,910

 
$
148,556

 
$
161,185

 
$
145,917

Credit-related statistics 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets (f)
$
832

 
$
674

 
$
508

 
$
444

 
$
526

 
 
 
 
Net charge-offs - loans and leases
$
32

 
$
99

 
$
50

 
$
47

 
$
30

 
$
181

 
$
58

 
(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
 
 
Nine months ended
 
September 30
 
June 30
 
March 31
 
December 31
 
September 30
 
 
September 30
 
September 30
Dollars in millions, except as noted
2020
 
2020
 
2020
 
2019
 
2019
 
 
2020
 
2019
Income Statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
89

 
$
89

 
$
88

 
$
80

 
$
70

 
 
$
266

 
$
208

Noninterest income
221

 
204

 
204

 
272

 
216

 
 
629

 
719

Total revenue
310

 
293

 
292

 
352

 
286

 
 
895

 
927

Provision for (recapture of) credit losses
(19
)
 
39

 
3

 
1

 
(1
)
 
 
23

 
(2
)
Noninterest expense
211

 
217

 
219

 
232

 
228

 
 
647

 
707

Pretax earnings
118

 
37

 
70

 
119

 
59

 
 
225

 
222

Income taxes
27

 
9

 
16

 
28

 
13

 
 
52

 
51

Earnings
$
91

 
$
28

 
$
54

 
$
91

 
$
46

 
 
$
173

 
$
171

Average Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential real estate
$
2,976

 
$
2,636

 
$
2,385

 
$
2,193

 
$
1,980

 
 
$
2,667

 
$
1,833

Other consumer
4,065

 
3,975

 
4,052

 
4,145

 
4,207

 
 
4,031

 
4,261

Total consumer
$
7,041

 
$
6,611

 
$
6,437

 
$
6,338

 
$
6,187

 
 
$
6,698

 
$
6,094

Commercial
$
810

 
$
883

 
$
856

 
$
793

 
$
758

 
 
$
849

 
$
747

Total loans
$
7,851

 
$
7,494

 
$
7,293

 
$
7,131

 
$
6,945

 
 
$
7,547

 
$
6,841

Total assets
$
8,361

 
$
7,958

 
$
7,801

 
$
7,697

 
$
7,331

 
 
$
8,041

 
$
7,247

Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing demand
$
1,692

 
$
1,421

 
$
1,468

 
$
1,407

 
$
1,299

 
 
$
1,528

 
$
1,344

Interest-bearing demand
8,101

 
7,742

 
6,850

 
6,846

 
3,393

 
 
7,566

 
3,121

Money market
1,542

 
1,597

 
1,709

 
1,773

 
1,740

 
 
1,616

 
1,852

Savings
7,243

 
7,398

 
7,197

 
6,950

 
6,302

 
 
7,279

 
5,969

Other
554

 
722

 
847

 
898

 
893

 
 
707

 
797

Total deposits
$
19,132

 
$
18,880

 
$
18,071

 
$
17,874

 
$
13,627

 
 
$
18,696

 
$
13,083

Performance Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
4.32
%
 
1.41
%
 
2.81
%
 
4.69
%
 
2.49
%
 
 
2.88
%
 
3.15
%
Noninterest income to total revenue
71
%
 
70
%
 
70
%
 
77
%
 
76
%
 
 
70
%
 
78
%
Efficiency
68
%
 
74
%
 
75
%
 
66
%
 
80
%
 
 
72
%
 
76
%
Other Information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming assets (b)
$
39

 
$
38

 
$
34

 
$
39

 
$
42

 
 
 
 
 
Net charge-offs (recoveries) - loans and leases
$
1

 

 
$
(1
)
 
$
4

 

 
 

 
$
1

Client Assets Under Administration (in billions)
    (b) (c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Discretionary client assets under management
$
158

 
$
151

 
$
136

 
$
154

 
$
163

 
 
 
 
 
Nondiscretionary client assets under administration
142

 
138

 
128

 
143

 
135

 
 
 
 
 
Total
$
300

 
$
289

 
$
264

 
$
297

 
$
298

 
 
 
 
 
Discretionary client assets under management
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal
$
99

 
$
94

 
$
84

 
$
99

 
$
98

 
 
 
 
 
Institutional
59

 
57

 
52

 
55

 
65

 
 
 
 
 
Total
$
158

 
$
151

 
$
136

 
$
154

 
$
163

 
 
 
 
 
 
(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.


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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.



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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.