Form: 8-K

Current report filing

October 15, 2021

Documents



Exhibit 99.1

pncbanklogoa18.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
THIRD QUARTER 2021
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
THIRD QUARTER 2021
(UNAUDITED)
Consolidated Results:
Page
7-8
10-12
Business Segment Results:
15-16
19-21

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 15, 2021. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

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

ACQUISITION OF BBVA USA BANCSHARES, INC.
On June 1, 2021, PNC acquired BBVA USA Bancshares Inc. (BBVA), a U.S. financial holding company conducting its business operations primarily through its U.S. banking subsidiary, BBVA USA. PNC paid $11.5 billion in cash as consideration for the acquisition, and added $82.2 billion of deposits and $60.5 billion of loans to PNC's Consolidated Balance Sheet as a result of the acquisition.

As of October 12, 2021, PNC has converted approximately 2.6 million customers, 9,000 employees and nearly 600 branches across seven states, merging BBVA USA into PNC Bank. PNC's third quarter earnings results reflect the full quarter benefit of BBVA's acquired business operations, and our second quarter results reflect BBVA business operations for the month of June 2021. PNC's balance sheets at both September 30, 2021 and June 30, 2021 include BBVA's balances. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.

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 $0.2 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 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 2021 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
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18
19


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 1

Table 1: Consolidated Income Statement (Unaudited) (a)
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 2021 2021 2021 2020 2020 2021 2020
Interest Income
Loans $ 2,437  $ 2,160  $ 1,996  $ 2,074  $ 2,116  $ 6,593  $ 6,853 
Investment securities 460  469  421  442  490  1,350  1,599 
Other 78  72  66  60  70  216  279 
Total interest income 2,975  2,701  2,483  2,576  2,676  8,159  8,731 
Interest Expense
Deposits 29  30  40  53  74  99  590 
Borrowed funds 90  90  95  99  118  275  619 
Total interest expense 119  120  135  152  192  374  1,209 
Net interest income 2,856  2,581  2,348  2,424  2,484  7,785  7,522 
Noninterest Income
Asset management 248  239  226  221  215  713  615 
Consumer services 496  457  384  387  390  1,337  1,097 
Corporate services 842  688  555  650  479  2,085  1,517 
Residential mortgage 147  103  105  99  137  355  505 
Service charges on deposits 159  131  119  134  119  409  366 
Other (b) 449  468  483  293  457  1,400  1,071 
Total noninterest income 2,341  2,086  1,872  1,784  1,797  6,299  5,171 
Total revenue 5,197  4,667  4,220  4,208  4,281  14,084  12,693 
Provision For (Recapture of) Credit Losses (203) 302  (551) (254) 52  (452) 3,429 
Noninterest Expense
Personnel 1,986  1,640  1,477  1,521  1,410  5,103  4,152 
Occupancy 248  217  215  215  205  680  611 
Equipment 355  326  293  296  292  974  880 
Marketing 103  74  45  64  67  222  172 
Other 895  793  544  612  557  2,232  1,774 
Total noninterest expense 3,587  3,050  2,574  2,708  2,531  9,211  7,589 
Income from continuing operations before income taxes and noncontrolling interests 1,813  1,315  2,197  1,754  1,698  5,325  1,675 
Income taxes from continuing operations 323  212  371  298  166  906  128 
Net income from continuing operations 1,490  1,103  1,826  1,456  1,532  4,419  1,547 
Income from discontinued operations before taxes 5,777 
Income taxes from discontinued operations 1,222 
Net income from discontinued operations 4,555 
Net income 1,490  1,103  1,826  1,456  1,532  4,419  6,102 
Less: Net income attributable to noncontrolling interests 16  12  10  14  13  38  27 
Preferred stock dividends (c) 57  48  57  48  63  162  181 
Preferred stock discount accretion and
    redemptions		 1  1  1  1  1  3  3 
Net income attributable to common shareholders $ 1,416  $ 1,042  $ 1,758  $ 1,393  $ 1,455  $ 4,216  $ 5,891 
Earnings Per Common Share
Basic earnings from continuing operations $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 3.40  $ 9.84  $ 3.11 
Basic earnings from discontinued operations 10.61 
Total basic earnings $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 3.40  $ 9.84  $ 13.73 
Diluted earnings from continuing operations $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 3.39  $ 9.83  $ 3.11 
Diluted earnings from discontinued operations 10.59 
Total diluted earnings $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 3.39  $ 9.83  $ 13.70 
Average Common Shares Outstanding
Basic 426  427  426  425  426  426  427 
Diluted 426  427  426  426  426  427  428 
Efficiency 69  % 65  % 61  % 64  % 59  % 65  % 60  %
Noninterest income to total revenue 45  % 45  % 44  % 42  % 42  % 45  % 41  %
Effective tax rate from continuing operations (d) 17.8  % 16.1  % 16.9  % 17.0  % 9.8  % 17.0  % 7.6  %
(a)Results reflect the BBVA acquisition beginning in the month of June 2021.
(b)Includes net gains on sales of securities of $15 million, $10 million, $25 million, $51 million and $32 million for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively. Amounts for the nine months ended September 30, 2021 and 2020 were $50 million and $254 million, respectively.
(c)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually. On September 13, 2021, PNC issued 1,500,000 depositary shares of Series T preferred stock with a $1 par value. Beginning on December 15, dividends will be paid on the Series T on a quarterly basis (March 15, June 15, September 15 and December 15 of each year).
(d)The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 2
Table 2: Consolidated Balance Sheet (Unaudited) (a)
September 30 June 30 March 31 December 31 September 30
In millions, except par value 2021 2021 2021 2020 2020
Assets
Cash and due from banks $ 8,843  $ 8,724  $ 7,455  $ 7,017  $ 6,629 
Interest-earning deposits with banks (b) 75,478  72,447  86,161  85,173  70,959 
Loans held for sale (c) 2,121  2,227  1,967  1,597  1,787 
Investment securities – available for sale 124,127  125,058  96,799  87,358  89,747 
Investment securities – held to maturity 1,479  1,485  1,456  1,441  1,438 
Loans (c) 290,230  294,704  237,013  241,928  249,279 
Allowance for loan and lease losses (5,355) (5,730) (4,714) (5,361) (5,751)
Net loans 284,875  288,974  232,299  236,567  243,528 
Equity investments 7,737  7,521  6,386  6,052  4,938 
Mortgage servicing rights 1,833  1,793  1,680  1,242  1,113 
Goodwill 10,885  10,958  9,317  9,233  9,233 
Other (c) 36,137  35,025  30,894  30,999  32,445 
Total assets $ 553,515  $ 554,212  $ 474,414  $ 466,679  $ 461,817 
Liabilities
Deposits
Noninterest-bearing $ 156,305  $ 154,190  $ 120,641  $ 112,637  $ 107,281 
Interest-bearing 292,597  298,693  254,426  252,708  247,798 
Total deposits 448,902  452,883  375,067  365,345  355,079 
Borrowed funds
Federal Home Loan Bank borrowings 1,500  3,500  5,500 
Bank notes and senior debt 22,993  24,408  22,139  24,271  26,839 
Subordinated debt 7,074  7,120  6,241  6,403  6,465 
Other (c) 3,404  3,285  3,150  3,021  3,306 
Total borrowed funds 33,471  34,813  33,030  37,195  42,110 
Allowance for unfunded lending related commitments 646  645  507  584  689 
Accrued expenses and other liabilities 14,199  11,186  11,931  9,514  10,629 
Total liabilities 497,218  499,527  420,535  412,638  408,507 
Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 543, 543, 543, 543, and 542 shares 2,713  2,713  2,713  2,713  2,712 
Capital surplus 17,453  15,928  15,879  15,884  15,836 
Retained earnings 49,541  48,663  48,113  46,848  45,947 
Accumulated other comprehensive income 1,079  1,463  1,290  2,770  2,997 
Common stock held in treasury at cost:120, 118, 118, 119, and 118 shares (14,527) (14,140) (14,146) (14,205) (14,216)
Total shareholders’ equity 56,259  54,627  53,849  54,010  53,276 
Noncontrolling interests 38  58  30  31  34 
Total equity 56,297  54,685  53,879  54,041  53,310 
Total liabilities and equity $ 553,515  $ 554,212  $ 474,414  $ 466,679  $ 461,817 
(a)BBVA balances are included at September 30, 2021 and June 30, 2021.
(b)Amounts include balances held with the Federal Reserve Bank of $75.1 billion, $71.9 billion, $85.8 billion, $84.9 billion and $70.6 billion as of September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.
(c)Amounts include assets and liabilities for which PNC has elected the fair value option. Our second quarter 2021 Form 10-Q included, and our third quarter 2021 Form 10-Q will include, additional information regarding these items.
(d)Par value less than $0.5 million at each date.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 3
Table 3: Average Consolidated Balance Sheet (Unaudited) (a) (b)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2021 2021 2021 2020 2020 2021 2020
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 63,163  $ 56,042  $ 45,298  $ 48,036  $ 52,215  $ 54,900  $ 51,453 
Non-agency 1,051  1,142 1,236 1,337 1,437 1,142 1,527 
Commercial mortgage-backed 6,134 6,465 6,241 6,568 6,927 6,280 6,964 
Asset-backed 5,608 5,855 5,304 5,017 5,033 5,590 5,115 
U.S. Treasury and government agencies 38,149 32,419 22,309 18,783 18,724 31,017 16,714 
Other 4,994 5,107 4,561 4,561 4,723 4,889 4,567 
Total securities available for sale 119,099 107,030 84,949 84,302 89,059 103,818 86,340
Securities held to maturity
Asset-backed 24 
U.S. Treasury and government agencies 807 802 797 793 788 802 783 
Other 680 671 650 650 655 667 648 
Total securities held to maturity 1,487 1,473 1,447 1,443 1,443 1,469 1,455
Total investment securities 120,586 108,503 86,396 85,745 90,502 105,287 87,795
Loans
Commercial and industrial 152,964 137,892 129,996 134,944 139,795 140,368 140,701 
Commercial real estate 37,054 31,611 28,598 28,991 29,081 32,452 28,689 
Equipment lease financing 6,300 6,332 6,332 6,380 6,771 6,321 6,958 
Consumer 57,533 52,575 50,904 52,872 54,692 53,695 56,279 
Residential real estate 37,475 27,197 22,305 22,638 22,753 29,048 22,292 
Total loans 291,326 255,607 238,135 245,825 253,092 261,884 254,919
Interest-earning deposits with banks (c) 80,274 78,522 85,410 76,374 60,327 81,383 37,582 
Other interest-earning assets 9,113 8,079 7,829 8,134 9,752 8,345 10,028 
Total interest-earning assets 501,299 450,711 417,770 416,078 413,673 456,899 390,324
Noninterest-earning assets 57,943 53,718 50,450 48,901 48,466 54,065 53,705 
Total assets $ 559,242  $ 504,429  $ 468,220  $ 464,979  $ 462,139  $ 510,964  $ 444,029 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 82,911  $ 64,990  $ 59,083  $ 62,621  $ 63,598  $ 69,105  $ 59,426 
Demand 106,588 99,091 91,619 88,026 87,226 99,154 80,371 
Savings 89,679 87,307 82,926 79,430 77,479 86,662 74,279 
Time deposits 19,293 18,048 18,449 19,448 20,248 18,577 21,084 
Total interest-bearing deposits 298,471 269,436 252,077 249,525 248,551 273,498 235,160
Borrowed funds
Federal Home Loan Bank borrowings 265 2,411 4,761 7,196 883 11,051 
Bank notes and senior debt 22,573 22,620 22,799 24,022 25,858 22,663 28,040 
Subordinated debt 6,787 6,218 5,929 5,936 5,936 6,315 5,935 
Other 4,992 5,046 4,057 3,433 4,354 4,701 6,199 
Total borrowed funds 34,352 34,149 35,196 38,152 43,344 34,562 51,225
Total interest-bearing liabilities 332,823 303,585 287,273 287,677 291,895 308,060 286,385
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 155,948 132,283 113,299 109,878 101,931 133,999 90,078 
Accrued expenses and other liabilities 15,332 14,755 14,258 14,348 15,341 14,787 16,251 
Equity 55,139 53,806 53,390 53,076 52,972 54,118 51,315 
Total liabilities and equity $ 559,242  $ 504,429  $ 468,220  $ 464,979  $ 462,139  $ 510,964  $ 444,029 

(a)Calculated using average daily balances.
(b)Results reflect the BBVA acquisition beginning in the month of June 2021.
(c)Amounts include average balances held with the Federal Reserve Bank of Cleveland of $80.1 billion, $78.3 billion, $85.2 billion, $76.1 billion and $60.0 billion for the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, and $81.1 billion and $37.3 billion for the nine months ended September 30, 2021 and September 30, 2020, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 4
Table 4: Details of Net Interest Margin (Unaudited) (a)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
2021 2021 2021 2020 2020 2021 2020
Average yields/rates (b)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 1.41  % 1.61  % 1.72  % 1.81  % 2.03  % 1.56  % 2.31  %
Non-agency 8.07  % 7.85  % 7.24  % 7.15  % 7.26  % 7.70  % 7.43  %
Commercial mortgage-backed 2.34  % 2.49  % 2.58  % 2.66  % 2.50  % 2.47  % 2.68  %
Asset-backed 1.50  % 2.07  % 1.84  % 2.04  % 2.44  % 1.80  % 2.70  %
U.S. Treasury and government agencies 1.18  % 1.30  % 1.68  % 1.77  % 1.64  % 1.34  % 1.88  %
Other 2.90  % 3.00  % 3.28  % 3.45  % 3.39  % 3.05  % 3.51  %
Total securities available for sale 1.51  % 1.73  % 1.95  % 2.05  % 2.16  % 1.70  % 2.43  %
Securities held to maturity
Asset-backed 2.66  %
U.S. Treasury and government agencies 2.88  % 2.86  % 2.83  % 2.88  % 2.86  % 2.86  % 2.85  %
Other 4.33  % 3.67  % 4.17  % 4.20  % 4.20  % 4.05  % 4.32  %
Total securities held to maturity 3.54  % 3.23  % 3.43  % 3.47  % 3.47  % 3.40  % 3.50  %
Total investment securities 1.54  % 1.75  % 1.97  % 2.08  % 2.18  % 1.73  % 2.45  %
Loans
Commercial and industrial 2.80  % 2.89  % 2.91  % 2.87  % 2.82  % 2.87  % 3.07  %
Commercial real estate 3.17  % 2.92  % 2.80  % 2.63  % 2.65  % 2.98  % 3.03  %
Equipment lease financing 3.83  % 3.76  % 3.90  % 3.90  % 3.80  % 3.83  % 3.85  %
Consumer 4.85  % 4.82  % 4.78  % 4.74  % 4.69  % 4.82  % 4.98  %
Residential real estate 3.15  % 3.50  % 3.53  % 3.69  % 3.74  % 3.35  % 3.85  %
Total loans 3.32  % 3.38  % 3.38  % 3.35  % 3.32  % 3.36  % 3.58  %
Interest-earning deposits with banks 0.16  % 0.11  % 0.10  % 0.10  % 0.10  % 0.12  % 0.28  %
Other interest-earning assets 2.03  % 2.46  % 2.34  % 1.99  % 2.23  % 2.27  % 2.64  %
Total yield on interest-earning assets 2.36  % 2.40  % 2.40  % 2.46  % 2.57  % 2.38  % 2.98  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 0.03  % 0.03  % 0.03  % 0.05  % 0.07  % 0.03  % 0.29  %
Demand 0.03  % 0.03  % 0.04  % 0.04  % 0.05  % 0.03  % 0.17  %
Savings 0.04  % 0.05  % 0.06  % 0.08  % 0.11  % 0.05  % 0.39  %
Time deposits 0.12  % 0.20  % 0.32  % 0.41  % 0.58  % 0.21  % 0.91  %
Total interest-bearing deposits 0.04  % 0.05  % 0.06  % 0.08  % 0.12  % 0.05  % 0.34  %
Borrowed funds
Federal Home Loan Bank borrowings 0.35  % 0.43  % 0.40  % 0.47  % 0.42  % 1.16  %
Bank notes and senior debt 0.97  % 0.98  % 1.04  % 1.00  % 1.08  % 1.00  % 1.72  %
Subordinated debt 1.28  % 1.35  % 1.43  % 1.38  % 1.51  % 1.35  % 2.05  %
Other
0.93  % 0.97  % 1.21  % 1.39  % 1.31  % 1.02  % 1.33  %
Total borrowed funds 1.03  % 1.04  % 1.09  % 1.02  % 1.06  % 1.05  % 1.59  %
Total rate on interest-bearing liabilities 0.14  % 0.16  % 0.19  % 0.21  % 0.26  % 0.16  % 0.56  %
Interest rate spread 2.22  % 2.24  % 2.21  % 2.25  % 2.31  % 2.22  % 2.42  %
Benefit from use of noninterest bearing sources (c) 0.05  % 0.05  % 0.06  % 0.07  % 0.08  % 0.06  % 0.15  %
Net interest margin 2.27  % 2.29  % 2.27  % 2.32  % 2.39  % 2.28  % 2.57  %

(a)Results reflect the BBVA acquisition beginning in the month of June 2021.
(b)Yields and rates are calculated using the applicable annualized interest income or interest expense divided by the applicable average earning assets or interest-bearing liabilities. Net interest margin is the total yield on interest-earning assets minus the total rate on interest-bearing liabilities and includes the benefit from use of noninterest-bearing sources. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating average yields used in the calculation of net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020 were $22 million, $15 million, $15 million, $17 million and $17 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2021 and September 30, 2020 were $52 million and $58 million, respectively.
(c)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 2021 2021 2021 2020 2020 2021 2020
Basic
Net income from continuing operations $ 1,490  $ 1,103  $ 1,826  $ 1,456  $ 1,532  $ 4,419  $ 1,547 
Less:
Net income attributable to noncontrolling interests 16  12  10  14  13  38  27 
Preferred stock dividends 57  48  57  48  63  162  181 
Preferred stock discount accretion and redemptions 1  1  1  1  1  3  3 
Net income from continuing operations
   attributable to common shareholders		 1,416  1,042  1,758  1,393  1,455  4,216  1,336 
Less: Dividends and undistributed earnings
  allocated to nonvested restricted shares		 8  5  8  6  8  21  7 
Net income from continuing operations
   attributable to basic common shareholders		 $ 1,408  $ 1,037  $ 1,750  $ 1,387  $ 1,447  $ 4,195  $ 1,329 
Net income from discontinued operations attributable
   to common shareholders		 $ 4,555 
Less: Undistributed earnings allocated to nonvested
    restricted shares		       22 
Net income from discontinued operations attributable
   to basic common shareholders		       $ 4,533 
Basic weighted-average common shares outstanding 426  427  426  425  426  426  427 
Basic earnings per common share from
   continuing operations (a)		 $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 3.40  $ 9.84  $ 3.11 
Basic earnings per common share from discontinued
   operations (a)		 $ 10.61 
Basic earnings per common share $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 3.40  $ 9.84  $ 13.73 
Diluted
Net income from continuing operations
   attributable to diluted common shareholder		 $ 1,408  $ 1,037  $ 1,750  $ 1,387  $ 1,447  $ 4,195  $ 1,329 
Net income from discontinued operations attributable
   to basic common shareholders		       $ 4,533 
Less: Impact of earnings per share dilution from
   discontinued operations		       2 
Net income from discontinued operations attributable
   to diluted common shareholders		       $ 4,531 
Basic weighted-average common shares outstanding 426  427 426  425  426  426  427 
Dilutive potential common shares 1  1  1 
Diluted weighted-average common shares
  outstanding		 426  427  426  426  426  427  428 
Diluted earnings per common share from
   continuing operations (a)		 $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 3.39  $ 9.83  $ 3.11 
Diluted earnings per common share from discontinued operations (a) $ 10.59 
Diluted earnings per common share $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 3.39  $ 9.83  $ 13.70 

(a)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually. On September 13, 2021, PNC issued 1,500,000 depositary shares of Series T preferred stock with a $1 par value. Beginning on December 15, dividends will be paid on the Series T on a quarterly basis (March 15, June 15, September 15 and December 15 of each year).



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 2021 (a) 2021 (a) 2021 2020 2020
Commercial
Commercial and industrial $ 152,735  $ 155,300  $ 129,798  $ 132,073  $ 137,187 
Commercial real estate 36,195  37,964  28,319  28,716  29,028 
Equipment lease financing 6,257  6,376  6,389  6,414  6,479 
Total commercial 195,187 199,640 164,506 167,203 172,694
Consumer
Residential real estate 38,214  36,846  22,418  22,560  22,886 
Home equity 24,479  25,174  23,493  24,088  24,539 
Automobile 17,265  17,551  13,584  14,218  14,977 
Credit card 6,466  6,528  5,675  6,215  6,303 
Education 2,653  2,726  2,842  2,946  3,051 
Other consumer 5,966  6,239  4,495  4,698  4,829 
Total consumer 95,043  95,064  72,507  74,725  76,585 
Total loans $ 290,230  $ 294,704  $ 237,013  $ 241,928  $ 249,279 
(a)Includes $55.6 billion of loans at September 30, 2021, $34.7 billion in the commercial portfolio and $20.9 billion in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 totaled $60.5 billion, with $38.5 billion and $22.0 billion in the commercial and consumer portfolios, respectively. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.

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 2021 2021 2021 2020 2020 2021 2020
Allowance for loan and lease losses
Beginning balance $ 5,730  $ 4,714  $ 5,361  $ 5,751  $ 5,928  $ 5,361  $ 2,742 
Adoption of ASU 2016-03 (a) 463 
Acquisition PCD reserves (59) 1,115  1,056 
Gross charge-offs:
Commercial and industrial (46) (245) (59) (133) (59) (350) (249)
Commercial real estate (1) (28) (5) (1) (1) (34) (1)
Equipment lease financing (3) (1) (5) (4) (4) (9) (19)
Residential real estate (4) (3) (4) (6) (2) (11) (4)
Home equity (2) (7) (7) (11) (12) (16) (31)
Automobile (33) (35) (52) (55) (57) (120) (210)
Credit card (62) (65) (69) (72) (74) (196) (228)
Education (3) (3) (5) (3) (3) (11) (13)
Other consumer (52) (41) (37) (42) (35) (130) (110)
Total gross charge-offs (206) (428) (243) (327) (247) (877) (865)
Recoveries:
Commercial and industrial 25  29  14  23  21  68  52 
Commercial real estate 2  2  1  3  2  5  6 
Equipment lease financing 2  3  3  3  3  8  7 
Residential real estate 9  6  5  4  4  20  12 
Home equity 25  21  17  17  15  63  44 
Automobile 38  41  38  33  31  117  95 
Credit card 13  11  12  9  9  36  26 
Education 2  2  2  2  2  6  6 
Other consumer 9  7  5  4  5  21  14 
Total recoveries 125  122  97  98  92  344  262 
Net (charge-offs) / recoveries:
Commercial and industrial (21) (216) (45) (110) (38) (282) (197)
Commercial real estate 1  (26) (4) 2  1  (29) 5 
Equipment lease financing (1) 2  (2) (1) (1) (1) (12)
Residential real estate 5  3  1  (2) 2  9  8 
Home equity 23  14  10  6  3  47  13 
Automobile 5  6  (14) (22) (26) (3) (115)
Credit card (49) (54) (57) (63) (65) (160) (202)
Education (1) (1) (3) (1) (1) (5) (7)
Other consumer (43) (34) (32) (38) (30) (109) (96)
Total net (charge-offs) (b) (81) (306) (146) (229) (155) (533) (603)
Provision for (recapture of) credit losses (c) (229) 206  (502) (164) (23) (525) 3,149 
Other (6) 1  1  3  1  (4)
Ending balance $ 5,355  $ 5,730  $ 4,714  $ 5,361  $ 5,751  $ 5,355  $ 5,751 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (21) $ (240) $ (51) $ (109) $ (38) $ (312) $ (204)
Consumer net charge-offs (60) (66) (95) (120) (117) (221) (399)
Total net charge-offs (b) $ (81) $ (306) $ (146) $ (229) $ (155) $ (533) $ (603)
Net charge-offs to average loans (annualized) 0.11  % 0.48  % 0.25  % 0.37  % 0.24  % 0.27  % 0.32  %
Commercial 0.04  % 0.55  % 0.13  % 0.25  % 0.09  % 0.23  % 0.15  %
Consumer 0.25  % 0.33  % 0.53  % 0.63  % 0.60  % 0.36  % 0.68  %
(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 2020 Form 10-K included additional information related to our adoption of the CECL standard.
(b) Amounts for the three months ended June 30, 2021 included $248 million attributable to BBVA, primarily related to commercial industrial loans, which were largely the result of required purchase accounting treatment for the BBVA acquisition on June 1, 2021.
(c)    See Table 8 for the components of the Provision for (recapture of) credit losses being reported on the Consolidated Income Statement.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 8
Allowance for Credit Losses (Unaudited) (Continued)

Table 8: Components of the Provision for (Recapture of) Credit Losses
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2021 2021 (a) 2021 2020 2020 2021 (a) 2020
Provision for (recapture of) credit losses
Loans and leases $ (229) $ 206  $ (502) $ (164) $ (23) (525) $ 3,149 
Unfunded lending related commitments 1  92  (77) (105) 27  16  192 
Investment securities 25  26  11  39  51  69 
Other financial assets 4  2  4  9  6  19 
Total provision for (recapture of) credit losses $ (203) $ 302  $ (551) $ (254) $ 52  $ (452) $ 3,429 
(a)     Amounts include $1.0 billion of provision for credit losses that was recorded as part of the BBVA acquisition on June 1, 2021.

Table 9: Allowance for Credit Losses by Loan Class (a)
September 30, 2021 June 30, 2021 September 30, 2020

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 $ 2,173  $ 152,735  1.42  % $ 2,282  $ 155,300  1.47  % $ 2,735  $ 137,187  1.99  %
Commercial real estate 1,312  36,195  3.62  % 1,404  37,964  3.70  % 630  29,028  2.17  %
Equipment lease financing 118  6,257  1.89  % 126  6,376  1.98  % 163  6,479  2.52  %
Total commercial 3,603  195,187  1.85  % 3,812  199,640  1.91  % 3,528  172,694  2.04  %
Consumer
Residential real estate 42  38,214  0.11  % 63  36,846  0.17  % 28  22,886  0.12  %
Home equity 167  24,479  0.68  % 188  25,174  0.75  % 349  24,539  1.42  %
Automobile 365  17,265  2.11  % 421  17,551  2.40  % 404  14,977  2.70  %
Credit card 701  6,466  10.84  % 711  6,528  10.89  % 891  6,303  14.14  %
Education 81  2,653  3.05  % 98  2,726  3.60  % 136  3,051  4.46  %
Other consumer 396  5,966  6.64  % 437  6,239  7.00  % 415  4,829  8.59  %
Total consumer 1,752  95,043  1.84  % 1,918  95,064  2.02  % 2,223  76,585  2.90  %
Total
 5,355  $ 290,230  1.85  % 5,730  $ 294,704  1.94  % 5,751  $ 249,279  2.31  %
Allowance for unfunded lending related commitments
 646  645  689 
Allowance for credit losses
 $ 6,001  $ 6,375  $ 6,440 
Supplemental Information
Allowance for credit losses to total loans
 2.07  % 2.16  % 2.58  %
Commercial 2.12  % 2.18  % 2.38  %
Consumer 1.96  % 2.14  % 3.04  %

(a)     Excludes allowances for investment securities and other financial assets, which together totaled $162 million, $138 million and $98 million at September 30, 2021, June 30, 2021 and September 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 2021 (a) 2021 (a) 2021 2020 2020
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers $ 220  $ 206  $ 79  $ 90  $ 69 
Manufacturing 62  65  55  81  80 
Retail/wholesale trade 59  71  66  61  90 
Health care 56  71  19  20  20 
Real estate related (b) 49  78  48  95  140 
Transportation and warehousing 21  18  18  20  14 
Other industries 362  421  227  299  264 
Total commercial and industrial 829  930  512  666  677 
Commercial real estate 365  501  221  224  217 
Equipment lease financing 10  15  16  33  21 
Total commercial 1,204  1,446  749  923  915 
Consumer (c)
Residential real estate 533  503  541  528  339 
Home equity 592  626  656  645  639 
Automobile 184  191  178  175  171 
Credit card 7  7  7  8  13 
Other consumer 8  6  7  7  8 
Total consumer 1,324  1,333  1,389  1,363  1,170 
Total nonperforming loans (d) 2,528  2,779  2,138  2,286  2,085 
OREO and foreclosed assets 31  39  41  51  67 
Total nonperforming assets $ 2,559  $ 2,818  $ 2,179  $ 2,337  $ 2,152 
Nonperforming loans to total loans 0.87  % 0.94  % 0.90  % 0.94  % 0.84  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.88  % 0.96  % 0.92  % 0.97  % 0.86  %
Nonperforming assets to total assets 0.46  % 0.51  % 0.46  % 0.50  % 0.47  %
Allowance for loan and lease losses to nonperforming loans 212  % 206  % 220  % 235  % 276  %
(a)Includes $715 million of nonperforming assets at September 30, 2021, $666 million in the commercial portfolio, $41 million in the consumer portfolio and $8 million of OREO and foreclosed assets, attributable to BBVA. Comparable amounts at June 30, 2021 totaled $880 million, $847 million, $24 million and $9 million, respectively. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.
(b)Represents loans related to customers in the real estate and construction industries.
(c)Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
(d)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option.



Table 11: Change in Nonperforming Assets
July 1, 2021 - April 1, 2021 - January 1, 2021 - October 1, 2020 - July 1, 2020 -
In millions September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020
Beginning balance $ 2,818  $ 2,179  $ 2,337  $ 2,152  $ 1,955 
New nonperforming assets 365  207  249  586  512 
Charge-offs and valuation adjustments (71) (61) (70) (97) (75)
Principal activity, including paydowns and payoffs (333) (264) (186) (185) (175)
Asset sales and transfers to loans held for sale (30) (15) (86) (14) (20)
Returned to performing status (190) (108) (65) (105) (45)
Acquired nonperforming assets (a) 880 
Ending balance $ 2,559  $ 2,818  $ 2,179  $ 2,337  $ 2,152 
(a)Represents nonperforming assets acquired as a part of the BBVA acquisition on June 1, 2021 and includes $871 million of loans and $9 million of OREO and foreclosed assets. Our second quarter 2021 Form 10-Q included additional information on the BBVA acquisition.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 10
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 for all periods presented 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 for the periods presented based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period. Our second quarter 2021 Form 10-Q included, and our third quarter 2021 Form 10-Q will include, additional information on COVID-19 related loan modifications.

Table 12: Accruing Loans Past Due 30 to 59 Days (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 97 $ 72 $ 80 $ 106 $ 56
Commercial real estate 68 5 12 6 6
Equipment lease financing 5 3 21 31 7
Total commercial 170 80 113 143 69
Consumer
Residential real estate
Non government insured 128 124 61 89 99
Government insured 81 88 101 92 89
Home equity 45 44 43 50 48
Automobile 114 98 76 134 116
Credit card 42 37 31 43 44
Education
Non government insured
 5 5 6 5 6
Government insured
 40 41 43 50 51
Other consumer 34 31 11 14 17
Total consumer 489 468 372 477 470
Total $ 659 $ 548 $ 485 $ 620 $ 539
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.23  % 0.19  % 0.20  % 0.26  % 0.22  %
Commercial 0.09  % 0.04  % 0.07  % 0.09  % 0.04  %
Consumer 0.51  % 0.49  % 0.51  % 0.64  % 0.61  %
(a)Excludes loans held for sale.
(b)Includes $220 million of accruing loans 30-59 days past due at September 30, 2021, $98 million in the commercial portfolio and $122 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $141 million, $30 million and $111 million, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 11
Accruing Loans Past Due (Unaudited) (Continued)

Table 13: Accruing Loans Past Due 60 to 89 Days (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 50 $ 27 $ 13 $ 26 $ 37
Commercial real estate 2 3 1 1 6
Equipment lease financing 4 4 1 5 4
Total commercial 56 34 15 32 47
Consumer
Residential real estate
Non government insured 35 30 13 16 22
Government insured 45 52 60 62 58
Home equity 18 17 20 21 22
Automobile 23 20 19 34 32
Credit card 27 24 24 30 33
Education
Non government insured
 3 2 3 2 2
Government insured
 23 20 22 27 24
Other consumer 15 16 6 10 11
Total consumer 189 181 167 202 204
Total $ 245 $ 215 $ 182 $ 234 $ 251
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.08  % 0.07  % 0.08  % 0.10  % 0.10  %
Commercial 0.03  % 0.02  % 0.01  % 0.02  % 0.03  %
Consumer 0.20  % 0.19  % 0.23  % 0.27  % 0.27  %
(a)Excludes loans held for sale.
(b)Includes $80 million of accruing loans 60-89 days past due at September 30, 2021, $26 million in the commercial portfolio and $54 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $56 million, $10 million and $46 million, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 12
Accruing Loans Past Due (Unaudited) (Continued)

Table 14: Accruing Loans Past Due 90 Days or More (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 56 $ 45 $ 63 $ 30 $ 36
Commercial real estate 11 2
Total commercial 67 47 63 30 36
Consumer
Residential real estate
Non government insured 28 40 17 27 28
Government insured 268 297 258 292 241
Automobile 4 3 6 12 12
Credit card 53 59 52 60 60
Education
Non government insured
 1 1 2 2 1
Government insured
 60 66 74 75 62
Other consumer 11 14 7 11 8
Total consumer 425 480 416 479 412
Total $ 492 $ 527 $ 479 $ 509 $ 448
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.17  % 0.18  % 0.20  % 0.21  % 0.18  %
Commercial 0.03  % 0.02  % 0.04  % 0.02  % 0.02  %
Consumer 0.45  % 0.50  % 0.57  % 0.64  % 0.54  %
Total accruing loans past due $ 1,396 $ 1,290 $ 1,146 $ 1,363 $ 1,238
Commercial $ 293 $ 161 $ 191 $ 205 $ 152
Consumer $ 1,103 $ 1,129 $ 955 $ 1,158 $ 1,086
Total accruing loans past due to total loans 0.48  % 0.44  % 0.48  % 0.56  % 0.50  %
Commercial 0.15  % 0.08  % 0.12  % 0.12  % 0.09  %
Consumer 1.16  % 1.19  % 1.32  % 1.55  % 1.42  %
(a)Excludes loans held for sale.
(b)Includes $72 million of accruing loans 90 days or more past due at September 30, 2021, $6 million in the commercial portfolio and $66 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $94 million, $7 million and $87 million, respectively.


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, Southeast and Southwest. Our national expansion strategy is designed to grow customers with digitally-led banking and a 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 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, fixed income, securities underwriting, loan syndications, mergers and acquisitions advisory and equity capital markets advisory related services. We also provide commercial loan servicing and technology solutions for the commercial real estate finance industry. Products and services are provided nationally.

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

Table 15: Period End Employees
September 30 June 30 March 31 December 31 September 30
2021 2021 2021 2020 2020
Full-time employees
Retail Banking 33,188  33,471  27,690  27,621  27,808 
Other full-time employees 25,442  25,512  22,281  21,928  21,997 
Total full-time employees 58,630  58,983  49,971  49,549  49,805 
Part-time employees
Retail Banking 1,616  1,821  1,697  1,611  1,593 
Other part-time employees 94  431  101  97  104 
Total part-time employees 1,710  2,252  1,798  1,708  1,697 
Total 60,340  61,235  51,769  51,257  51,502 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 14
Table 16: Summary of Business Segment Net 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 2021 2021 2021 2020 2020 2021 2020
Income
Retail Banking $ 447  $ 232  $ 607  $ 336  $ 530  $ 1,286  $ 508 
Corporate & Institutional Banking 1,123  809  1,058  992  670  2,990  682 
Asset Management Group 114  87  99  82  91  300  173 
Other (210) (37) 52  32  228  (195) 157 
Net income from continuing operations excluding noncontrolling interest $ 1,474  $ 1,091  $ 1,816  $ 1,442  $ 1,519  $ 4,381  $ 1,520 
  
Revenue
Retail Banking $ 2,375  $ 2,203  $ 2,016  $ 1,853  $ 2,056  $ 6,594  $ 6,275 
Corporate & Institutional Banking 2,306  1,959  1,808  1,913  1,748  6,073  5,198 
Asset Management Group 397  356  322  316  310  1,075  895 
Other 119  149  74  126  167  342  325 
Total revenue $ 5,197  $ 4,667  $ 4,220  $ 4,208  $ 4,281  $ 14,084  $ 12,693 

(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.

Our third quarter 2021 business segment results reflect the full quarter benefit of BBVA's business operations, and our second quarter 2021 results reflect the impact of BBVA business operations for the month of June. Period end information presented includes BBVA's balances at both September 30, 2021 and June 30, 2021. Until the conversion of bank systems and branches on October 12, 2021, PNC Bank and BBVA customers were served through their respective PNC Bank and BBVA USA branches, websites and mobile apps, financial advisors and relationship managers. Upon conversion, there will be changes in the segmentation of BBVA USA customers as we integrate data to PNC applications, finalize the review of customer relationships and better align customers with PNC's products and services. These changes will be reflected in fourth quarter reporting.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 15
Table 17: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 1,713  $ 1,497  $ 1,362  $ 1,380  $ 1,383  $ 4,572  $ 4,229 
Noninterest income 662  706  654  473  673  2,022  2,046 
Total revenue 2,375  2,203  2,016  1,853  2,056  6,594  6,275 
Provision for (recapture of) credit losses (113) 214  (257) (81) (157) (156) 1,049 
Noninterest expense 1,889  1,677  1,476  1,482  1,512  5,042  4,537 
Pretax earnings 599  312  797  452  701  1,708  689 
Income taxes 140  73  183  105  162  396  161 
Noncontrolling interest 12  7  7  11  9  26  20 
Earnings $ 447  $ 232  $ 607  $ 336  $ 530  $ 1,286  $ 508 
Average Balance Sheet
Loans held for sale $ 1,583  $ 1,405  $ 891  $ 672  $ 700  $ 1,296  $ 769 
Loans
Consumer
Residential real estate $ 30,702  $ 21,653  $ 17,468  $ 18,042  $ 18,435  $ 23,323  $ 18,215 
Home equity 23,047  22,080  21,833  22,366  22,647  22,324  22,723 
Automobile 17,377  14,888  13,890  14,536  15,573  15,398  16,449 
Credit card 6,484  5,900  5,819  6,218  6,408  6,070  6,767 
Education 2,712  2,812  2,938  3,027  3,119  2,820  3,226 
Other consumer 2,892  2,175  1,898  2,086  2,262  2,326  2,417 
Total consumer 83,214  69,508  63,846  66,275  68,444  72,261  69,797 
Commercial 15,895  14,796  13,743  13,391  13,356  14,819  12,298 
Total loans $ 99,109  $ 84,304  $ 77,589  $ 79,666  $ 81,800  $ 87,080  $ 82,095 
Total assets $ 117,394  $ 100,948  $ 92,891  $ 94,303  $ 98,731  $ 103,820  $ 98,764 
Deposits
Noninterest-bearing demand $ 65,985  $ 54,260  $ 44,845  $ 43,818  $ 43,752  $ 55,107  $ 38,390 
Interest-bearing demand 62,414  59,329  54,269  50,702  49,274  58,700  46,501 
Money market 40,471  29,998  24,198  24,112  23,816  31,639  23,210 
Savings 81,950  79,518  75,180  72,041  70,236  78,907  67,000 
Certificates of deposit 11,171  10,101  9,742  10,156  10,852  10,321  11,579 
Total deposits $ 261,991  $ 233,206  $ 208,234  $ 200,829  $ 197,930  $ 234,674  $ 186,680 
Performance Ratios
Return on average assets 1.51  % 0.92  % 2.65  % 1.41  % 2.13  % 1.66  % 0.69  %
Noninterest income to total revenue 28  % 32  % 32  % 26  % 33  % 31  % 33  %
Efficiency 80  % 76  % 73  % 80  % 74  % 76  % 72  %
(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 2021 2021 2021 2020 2020 2021 2020
Supplemental Noninterest Income
  Information
Consumer services $ 470  $ 435  $ 368  $ 369  $ 371  $ 1,273  $ 1,058 
Residential mortgage $ 147  $ 103  $ 105  $ 99  $ 137  $ 355  $ 505 
Service charges on deposits $ 158  $ 129  $ 119  $ 133  $ 118  $ 406  $ 364 
Residential Mortgage Information
Residential mortgage servicing statistics
  (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 139  $ 145  $ 117  $ 121  $ 119 
Serviced portfolio acquisitions $ 2  $ 33  $ 7  $ 12  $ 8  $ 42  $ 21 
MSR asset value (b) $ 1.1  $ 1.1  $ 1.0  $ 0.7  $ 0.6 
MSR capitalization value (in basis points) (b) 81  77  83  56  50 
Servicing income: (in millions)
Servicing fees, net (c) $ 18  $ (3) $ 5  $ 13  $ 25  $ 20  $ 105 
Mortgage servicing rights valuation, net of
  economic hedge		 $ 24  $ 24  $ 14  $ (1) $ 17  $ 62  $ 138 
Residential mortgage loan statistics
Loan origination volume (in billions) $ 7.4  $ 6.5  $ 4.3  $ 3.7  $ 4.0  $ 18.2  $ 11.4 
Loan sale margin percentage 3.01  % 2.67  % 3.28  % 3.75  % 3.62  % 2.95  % 3.51  %
Percentage of originations represented by:
Purchase volume (d) 47  % 48  % 34  % 45  % 44  % 45  % 38  %
Refinance volume 53  % 52  % 66  % 55  % 56  % 55  % 62  %
Other Information (b)
Customer-related statistics (average) (e)
Non-teller deposit transactions (f) 66  % 65  % 66  % 66  % 67  % 66  % 63  %
Digital consumer customers (g) 80  % 80  % 79  % 77  % 75  % 80  % 73  %
Credit-related statistics
Nonperforming assets $ 1,220  $ 1,245  $ 1,229  $ 1,211  $ 1,077 
Net charge-offs - loans and leases $ 82  $ 79  $ 108  $ 136  $ 125  $ 269  $ 433 
Other statistics
ATMs 9,572  9,636  8,874  8,900  9,058 
Branches (h) 2,712  2,724  2,137  2,162  2,207 
Brokerage account client assets (in billions) (i) $ 76  $ 83  $ 61  $ 59  $ 55 

(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.
(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)Represents PNC legacy only, statistics will be refreshed to include BBVA activity in fourth quarter reporting after the conversion of bank systems and branches is completed.
(f)Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.
(g)Represents consumer checking relationships that process the majority of their transactions through non-teller channels.
(h)Excludes stand-alone mortgage offices and satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
(i)Includes cash and money market balances.


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Table 18: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 1,250  $ 1,092  $ 1,001  $ 994  $ 1,025  $ 3,343  $ 3,055 
Noninterest income 1,056  867  807  919  723  2,730  2,143 
Total revenue 2,306  1,959  1,808  1,913  1,748  6,073  5,198 
Provision for (recapture of) credit losses (99) 104  (282) (166) 211  (277) 2,254 
Noninterest expense 980  813  711  801  663  2,504  2,055 
Pretax earnings 1,425  1,042  1,379  1,278  874  3,846  889 
Income taxes 299  229  318  282  201  846  201 
Noncontrolling interest 3  4  3  4  3  10  6 
Earnings $ 1,123  $ 809  $ 1,058  $ 992  $ 670  $ 2,990  $ 682 
Average Balance Sheet
Loans held for sale $ 541  $ 564  $ 691  $ 1,039  $ 904  $ 598  $ 669 
Loans
Commercial
Commercial and industrial $ 134,128  $ 121,232  $ 114,944  $ 120,297  $ 125,187  $ 123,505  $ 127,149 
Commercial real estate 35,368  30,118  27,182  27,509  27,511  30,919  27,070 
Equipment lease financing 6,300  6,332  6,332  6,381  6,772  6,321  6,957 
Total commercial 175,796  157,682  148,458  154,187  159,470  160,745  161,176 
Consumer 20  13  9  10  11  14  9 
Total loans $ 175,816  $ 157,695  $ 148,467  $ 154,197  $ 159,481  $ 160,759  $ 161,185 
Total assets $ 202,268  $ 181,770  $ 170,531  $ 177,792  $ 183,266  $ 184,964  $ 185,001 
Deposits
Noninterest-bearing demand $ 85,869  $ 75,570  $ 66,666  $ 64,334  $ 56,433  $ 76,105  $ 50,104 
Interest-bearing demand 33,817  30,156  28,118  28,793  29,730  30,718  26,182 
Money market 36,115  31,788  33,182  36,705  38,015  33,706  34,373 
Other 7,315  7,499  8,368  8,928  8,956  7,723  8,789 
Total deposits $ 163,116  $ 145,013  $ 136,334  $ 138,760  $ 133,134  $ 148,252  $ 119,448 
Performance Ratios
Return on average assets 2.20  % 1.79  % 2.52  % 2.21  % 1.45  % 2.16  % 0.49  %
Noninterest income to total revenue 46  % 44  % 45  % 48  % 41  % 45  % 41  %
Efficiency 42  % 42  % 39  % 42  % 38  % 41  % 40  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 592  $ 523  $ 494  $ 472  $ 452  $ 1,609  $ 1,412 
Capital Markets (b) $ 577  $ 432  $ 403  $ 530  $ 345  $ 1,412  $ 1,077 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 44  $ 29  $ 30  $ 45  $ 46  $ 103  $ 117 
Commercial mortgage loan servicing income (d) 88  66  90  82  76  244  212 
Commercial mortgage servicing rights valuation, net of economic hedge (e) 14  33  17  14  16  64  58 
Total $ 146  $ 128  $ 137  $ 141  $ 138  $ 411  $ 387 
MSR asset value (f) $ 703  $ 682  $ 702  $ 569  $ 515 
Average loans by C&IB business
Corporate Banking $ 85,208  $ 77,645  $ 74,459  $ 76,664  $ 81,617  $ 78,975  $ 83,762 
Real Estate 47,335  41,188  38,395  41,427  40,592  42,313  40,030 
Business Credit 25,540  22,965  21,552  21,337  21,845  23,367  23,009 
Commercial Banking 13,458  12,513  10,807  11,375  11,770  12,435  10,093 
Other 4,275  3,384  3,254  3,394  3,657  3,669  4,291 
Total average loans $ 175,816  $ 157,695  $ 148,467  $ 154,197  $ 159,481  $ 160,759  $ 161,185 
Credit-related statistics
Nonperforming assets (f) $ 1,061  $ 1,274  $ 658  $ 827  $ 832 
Net charge-offs - loans and leases $ 13  $ 233  $ 44  $ 99  $ 32  $ 290  $ 181 

(a)See note (a) on page 14.
(b)Amounts are 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.

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Table 19: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 141  $ 112  $ 93  $ 91  $ 89  $ 346  $ 266 
Noninterest income 256  244  229  225  221  729  629 
Total revenue 397  356  322  316  310  1,075  895 
Provision for (recapture of) credit losses (6) 23  (9) (2) (19) 8  23 
Noninterest expense 255  219  202  211  211  676  647 
Pretax earnings 148  114  129  107  118  391  225 
Income taxes 34  27  30  25  27  91  52 
Earnings $ 114  $ 87  $ 99  $ 82  $ 91  $ 300  $ 173 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 5,727  $ 4,439  $ 3,635  $ 3,326  $ 2,976  $ 4,608  $ 2,667 
Other consumer 4,544  4,190  4,008  4,077  4,065  4,249  4,031 
Total consumer 10,271  8,629  7,643  7,403  7,041  8,857  6,698 
Commercial 2,693  1,415  756  774  810  1,629  849 
Total loans $ 12,964  $ 10,044  $ 8,399  $ 8,177  $ 7,851  $ 10,486  $ 7,547 
Total assets $ 13,805  $ 10,640  $ 8,873  $ 8,615  $ 8,361  $ 11,124  $ 8,041 
Deposits
Noninterest-bearing demand $ 4,332  $ 2,537  $ 1,754  $ 1,689  $ 1,692  $ 2,884  $ 1,528 
Interest-bearing demand 10,200  9,477  9,104  8,404  8,101  9,597  7,566 
Money market 6,193  3,066  1,520  1,606  1,542  3,610  1,616 
Savings 7,729  7,789  7,747  7,388  7,243  7,755  7,279 
Other 862  562  454  482  554  628  707 
Total deposits $ 29,316  $ 23,431  $ 20,579  $ 19,569  $ 19,132  $ 24,474  $ 18,696 
Performance Ratios
Return on average assets 3.28  % 3.28  % 4.52  % 3.78  % 4.32  % 3.61  % 2.88  %
Noninterest income to total revenue 64  % 69  % 71  % 71  % 71  % 68  % 70  %
Efficiency 64  % 62  % 63  % 67  % 68  % 63  % 72  %
Other Information
Nonperforming assets (b) $ 80  $ 85  $ 68  $ 66  $ 39 
Net charge-offs (recoveries) - loans and leases $ (1) $ 2  $ 1  $ 1  $ 1 
Brokerage account client assets (in billions) (b) $ 5  $ 5 
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management $ 183  $ 183  $ 173  $ 170  $ 158 
Nondiscretionary client assets under administration 170  172  161  154  142 
Total $ 353  $ 355  $ 334  $ 324  $ 300 
Discretionary client assets under management
Personal $ 117  $ 119  $ 110  $ 108  $ 99 
Institutional 66  64  63  62  59 
Total $ 183  $ 183  $ 173  $ 170  $ 158 
(a)See note (a) on page 14.
(b)As of period end.
(c)Excludes brokerage account client assets.

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Glossary of Terms

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

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

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

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

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

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

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

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

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

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

BBVA – BBVA USA Bancshares, Inc.

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

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

BlackRock – BlackRock, Inc.

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

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

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

Criticized commercial loans - Loans with potential or identified weaknesses based upon internal risk ratings that comply with the regulatory classification definitions of “Special Mention,” “Substandard” or “Doubtful.”

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


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

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

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

Efficiency - Noninterest expense divided by total revenue.

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

Fee income - Refers to the following categories within Noninterest income: Asset management; Consumer services; Corporate services; Residential mortgage; and Service charges on deposits.

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

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

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

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

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

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

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

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

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

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

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

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

Taxable-equivalent interest income - The interest income earned on certain assets that is completely or partially exempt from federal income tax. These tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to

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

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

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

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