Form: 8-K

Current report filing

January 18, 2022

Documents



Exhibit 99.1

pncbanklogoa18.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
FOURTH QUARTER 2021
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
FOURTH QUARTER 2021
(UNAUDITED)
Consolidated Results:
Page
2
6-7
9-11
Business Segment Results:
14-15
18-20

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on January 18, 2022. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

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

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

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

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 Fourth Quarter 2021 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
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THE PNC FINANCIAL SERVICES GROUP, INC.
Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions, except per share data 2021 2021 2021 2021 2020 2021 2020
Interest Income
Loans $ 2,414  $ 2,437  $ 2,160  $ 1,996  $ 2,074  $ 9,007  $ 8,927 
Investment securities 484  460  469  421  442  1,834  2,041 
Other 77  78  72  66  60  293  339 
Total interest income 2,975  2,975  2,701  2,483  2,576  11,134  11,307 
Interest Expense
Deposits 27  29  30  40  53  126  643 
Borrowed funds 86  90  90  95  99  361  718 
Total interest expense 113  119  120  135  152  487  1,361 
Net interest income 2,862  2,856  2,581  2,348  2,424  10,647  9,946 
Noninterest Income
Asset management 251  248  239  226  221  964  836 
Consumer services 508  496  457  384  387  1,845  1,484 
Corporate services 839  842  688  555  650  2,924  2,167 
Residential mortgage 101  147  103  105  99  456  604 
Service charges on deposits 126  159  131  119  134  535  500 
Other (a) 440  449  468  483  293  1,840  1,364 
Total noninterest income 2,265  2,341  2,086  1,872  1,784  8,564  6,955 
Total revenue 5,127  5,197  4,667  4,220  4,208  19,211  16,901 
Provision For (Recapture of) Credit Losses (327) (203) 302  (551) (254) (779) 3,175 
Noninterest Expense
Personnel 2,038  1,986  1,640  1,477  1,521  7,141  5,673 
Occupancy 260  248  217  215  215  940  826 
Equipment 437  355  326  293  296  1,411  1,176 
Marketing 97  103  74  45  64  319  236 
Other 959  895  793  544  612  3,191  2,386 
Total noninterest expense 3,791  3,587  3,050  2,574  2,708  13,002  10,297 
Income from continuing operations before income taxes and noncontrolling interests 1,663  1,813  1,315  2,197  1,754  6,988  3,429 
Income taxes from continuing operations 357  323  212  371  298  1,263  426 
Net income from continuing operations 1,306  1,490  1,103  1,826  1,456  5,725  3,003 
Income from discontinued operations before taxes 5,777 
Income taxes from discontinued operations 1,222 
Net income from discontinued operations 4,555 
Net income 1,306  1,490  1,103  1,826  1,456  5,725  7,558 
Less: Net income attributable to noncontrolling interests 13  16  12  10  14  51  41 
Preferred stock dividends (b) 71  57  48  57  48  233  229 
Preferred stock discount accretion and
    redemptions		 2  1  1  1  1  5  4 
Net income attributable to common shareholders $ 1,220  $ 1,416  $ 1,042  $ 1,758  $ 1,393  $ 5,436  $ 7,284 
Earnings Per Common Share
Basic earnings from continuing operations $ 2.87  $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 12.71  $ 6.37 
Basic earnings from discontinued operations 10.62 
Total basic earnings $ 2.87  $ 3.31  $ 2.43  $ 4.11  $ 3.26  $ 12.71  $ 16.99 
Diluted earnings from continuing operations $ 2.86  $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 12.70  $ 6.36 
Diluted earnings from discontinued operations 10.60 
Total diluted earnings $ 2.86  $ 3.30  $ 2.43  $ 4.10  $ 3.26  $ 12.70  $ 16.96 
Average Common Shares Outstanding
Basic 424  426  427  426  425  426  427 
Diluted 424  426  427  426  426  426  427 
Efficiency 74  % 69  % 65  % 61  % 64  % 68  % 61  %
Noninterest income to total revenue 44  % 45  % 45  % 44  % 42  % 45  % 41  %
Effective tax rate from continuing operations (c) 21.5  % 17.8  % 16.1  % 16.9  % 17.0  % 18.1  % 12.4  %
(a)Includes net gains on sales of securities of $14 million, $15 million, $10 million, $25 million, and $51 million for the quarters ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and $64 million and $305 million for the twelve months ended December 31, 2021 and December 31, 2020, respectively.
(b)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually.
(c)The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 2
Table 2: Consolidated Balance Sheet (Unaudited)
December 31 September 30 June 30 March 31 December 31
In millions, except par value 2021 2021 2021 2021 2020
Assets
Cash and due from banks $ 8,004  $ 8,843  $ 8,724  $ 7,455  $ 7,017 
Interest-earning deposits with banks (a) 74,250  75,478  72,447  86,161  85,173 
Loans held for sale (b) 2,231  2,121  2,227  1,967  1,597 
Investment securities – available for sale 131,536  124,127  125,058  96,799  87,358 
Investment securities – held to maturity 1,426  1,479  1,485  1,456  1,441 
Loans (b) 288,372  290,230  294,704  237,013  241,928 
Allowance for loan and lease losses (4,868) (5,355) (5,730) (4,714) (5,361)
Net loans 283,504  284,875  288,974  232,299  236,567 
Equity investments 8,180  7,737  7,521  6,386  6,052 
Mortgage servicing rights 1,818  1,833  1,793  1,680  1,242 
Goodwill 10,916  10,885  10,958  9,317  9,233 
Other (b) 36,583  36,137  35,025  30,894  30,999 
Total assets $ 558,448  $ 553,515  $ 554,212  $ 474,414  $ 466,679 
Liabilities
Deposits
Noninterest-bearing $ 155,175  $ 156,305  $ 154,190  $ 120,641  $ 112,637 
Interest-bearing 302,103  292,597  298,693  254,426  252,708 
Total deposits 457,278  448,902  452,883  375,067  365,345 
Borrowed funds
Federal Home Loan Bank borrowings 1,500  3,500 
Bank notes and senior debt 20,661  22,993  24,408  22,139  24,271 
Subordinated debt 6,996  7,074  7,120  6,241  6,403 
Other (b) 3,127  3,404  3,285  3,150  3,021 
Total borrowed funds 30,784  33,471  34,813  33,030  37,195 
Allowance for unfunded lending related commitments 662  646  645  507  584 
Accrued expenses and other liabilities 13,998  14,199  11,186  11,931  9,514 
Total liabilities 502,722  497,218  499,527  420,535  412,638 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares 2,713  2,713  2,713  2,713  2,713 
Capital surplus 17,457  17,453  15,928  15,879  15,884 
Retained earnings 50,228  49,541  48,663  48,113  46,848 
Accumulated other comprehensive income 409  1,079  1,463  1,290  2,770 
Common stock held in treasury at cost: 123, 120, 118, 118, and 119 shares (15,112) (14,527) (14,140) (14,146) (14,205)
Total shareholders’ equity 55,695  56,259  54,627  53,849  54,010 
Noncontrolling interests 31  38  58  30  31 
Total equity 55,726  56,297  54,685  53,879  54,041 
Total liabilities and equity $ 558,448  $ 553,515  $ 554,212  $ 474,414  $ 466,679 
(a)Amounts include balances held with the Federal Reserve Bank of $73.8 billion, $75.1 billion, $71.9 billion, $85.8 billion and $84.9 billion as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our 2021 Form 10-Qs included, and our 2021 Form 10-K will include, additional information regarding these items.
(c)Par value less than $0.5 million at each date.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 3
Table 3: Average Consolidated Balance Sheet (Unaudited) (a)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2021 2021 2021 2021 2020 2021 2020
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 64,521  $ 63,163  $ 56,042  $ 45,298  $ 48,036  $ 57,325  $ 50,594 
Non-agency 974  1,051 1,142 1,236 1,337 1,100 1,480 
Commercial mortgage-backed 5,538  6,134 6,465 6,241 6,568 6,093 6,865 
Asset-backed 6,206 5,608 5,855 5,304 5,017 5,745 5,090 
U.S. Treasury and government agencies 44,415 38,149 32,419 22,309 18,783 34,394 17,234 
Other 4,741 4,994 5,107 4,561 4,561 4,852 4,564 
Total securities available for sale 126,395 119,099 107,030 84,949 84,302 109,509 85,827
Securities held to maturity
Asset-backed 18 
U.S. Treasury and government agencies 812 807 802 797 793 805 786 
Other 642 680 671 650 650 660 648 
Total securities held to maturity 1,454 1,487 1,473 1,447 1,443 1,465 1,452
Total investment securities 127,849 120,586 108,503 86,396 85,745 110,974 87,279
Loans
Commercial and industrial 152,355 152,964 137,892 129,996 134,944 143,389 139,254 
Commercial real estate 35,256 37,054 31,611 28,598 28,991 33,159 28,765 
Equipment lease financing 6,183 6,300 6,332 6,332 6,380 6,286 6,812 
Consumer 56,244 57,533 52,575 50,904 52,872 54,338 55,423 
Residential real estate 38,872 37,475 27,197 22,305 22,638 31,524 22,379 
Total loans 288,910 291,326 255,607 238,135 245,825 268,696 252,633
Interest-earning deposits with banks (b) 75,377 80,274 78,522 85,410 76,374 79,869 47,333 
Other interest-earning assets 9,112 9,113 8,079 7,829 8,134 8,539 9,553 
Total interest-earning assets 501,248 501,299 450,711 417,770 416,078 468,078 396,798
Noninterest-earning assets 59,032 57,943 53,718 50,450 48,901 55,317 52,497 
Total assets $ 560,280  $ 559,242  $ 504,429  $ 468,220  $ 464,979  $ 523,395  $ 449,295 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 65,214  $ 82,911  $ 64,990  $ 59,083  $ 62,621  $ 68,124  $ 60,229 
Demand 108,345 106,588 99,091 91,619 88,026 101,471 82,295 
Savings 104,644 89,679 87,307 82,926 79,430 91,194 75,574 
Time deposits 18,029 19,293 18,048 18,449 19,448 18,439 20,673 
Total interest-bearing deposits 296,232 298,471 269,436 252,077 249,525 279,228 238,771
Borrowed funds
Federal Home Loan Bank borrowings 265 2,411 4,761 661 9,470 
Bank notes and senior debt 21,581 22,573 22,620 22,799 24,022 22,390 27,030 
Subordinated debt 6,779 6,787 6,218 5,929 5,936 6,432 5,936 
Other 5,987 4,992 5,046 4,057 3,433 5,025 5,502 
Total borrowed funds 34,347 34,352 34,149 35,196 38,152 34,508 47,938
Total interest-bearing liabilities 330,579 332,823 303,585 287,273 287,677 313,736 286,709
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 156,549 155,948 132,283 113,299 109,878 139,683 95,055 
Accrued expenses and other liabilities 17,726 15,332 14,755 14,258 14,348 15,528 15,774 
Equity 55,426 55,139 53,806 53,390 53,076 54,448 51,757 
Total liabilities and equity $ 560,280  $ 559,242  $ 504,429  $ 468,220  $ 464,979  $ 523,395  $ 449,295 
(a)Calculated using average daily balances.
(b)Amounts include average balances held with the Federal Reserve Bank of Cleveland of $75.1 billion, $80.1 billion, $78.3 billion, $85.2 billion and $76.1 billion for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, and $79.6 billion and $47.0 billion for the twelve months ended December 31, 2021 and December 31, 2020, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
2021 2021 2021 2021 2020 2021 2020
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 1.47  % 1.41  % 1.61  % 1.72  % 1.81  % 1.54  % 2.19  %
Non-agency 7.36  % 8.07  % 7.85  % 7.24  % 7.15  % 7.64  % 7.36  %
Commercial mortgage-backed 2.37  % 2.34  % 2.49  % 2.58  % 2.66  % 2.45  % 2.67  %
Asset-backed 1.48  % 1.50  % 2.07  % 1.84  % 2.04  % 1.72  % 2.53  %
U.S. Treasury and government agencies 1.17  % 1.18  % 1.30  % 1.68  % 1.77  % 1.30  % 1.88  %
Other 2.77  % 2.90  % 3.00  % 3.28  % 3.45  % 2.97  % 3.51  %
Total securities available for sale 1.50  % 1.51  % 1.73  % 1.95  % 2.05  % 1.65  % 2.35  %
Securities held to maturity
U.S. Treasury and government agencies 2.89  % 2.88  % 2.86  % 2.83  % 2.88  % 2.86  % 2.80  %
Other 4.20  % 4.33  % 3.67  % 4.17  % 4.20  % 4.09  % 4.32  %
Total securities held to maturity 3.47  % 3.54  % 3.23  % 3.43  % 3.47  % 3.41  % 3.44  %
Total investment securities 1.52  % 1.54  % 1.75  % 1.97  % 2.08  % 1.67  % 2.36  %
Loans
Commercial and industrial 2.90  % 2.80  % 2.89  % 2.91  % 2.87  % 2.92  % 3.07  %
Commercial real estate 2.86  % 3.17  % 2.92  % 2.80  % 2.63  % 2.99  % 2.98  %
Equipment lease financing 3.81  % 3.83  % 3.76  % 3.90  % 3.90  % 3.82  % 3.86  %
Consumer 4.71  % 4.85  % 4.82  % 4.78  % 4.74  % 4.79  % 4.93  %
Residential real estate 3.26  % 3.15  % 3.50  % 3.53  % 3.69  % 3.32  % 3.81  %
Total loans 3.32  % 3.32  % 3.38  % 3.38  % 3.35  % 3.37  % 3.55  %
Interest-earning deposits with banks 0.15  % 0.16  % 0.11  % 0.10  % 0.10  % 0.13  % 0.21  %
Other interest-earning assets 2.14  % 2.03  % 2.46  % 2.34  % 1.99  % 2.23  % 2.50  %
Total yield on interest-earning assets 2.36  % 2.36  % 2.40  % 2.40  % 2.46  % 2.39  % 2.87  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 0.02  % 0.03  % 0.03  % 0.03  % 0.05  % 0.03  % 0.23  %
Demand 0.02  % 0.03  % 0.03  % 0.04  % 0.04  % 0.03  % 0.13  %
Savings 0.04  % 0.04  % 0.05  % 0.06  % 0.08  % 0.05  % 0.31  %
Time deposits 0.11  % 0.12  % 0.20  % 0.32  % 0.41  % 0.18  % 0.79  %
Total interest-bearing deposits 0.04  % 0.04  % 0.05  % 0.06  % 0.08  % 0.05  % 0.27  %
Borrowed funds
Federal Home Loan Bank borrowings 0.35  % 0.43  % 0.40  % 0.45  % 1.09  %
Bank notes and senior debt 0.94  % 0.97  % 0.98  % 1.04  % 1.00  % 1.00  % 1.58  %
Subordinated debt 1.28  % 1.28  % 1.35  % 1.43  % 1.38  % 1.34  % 1.89  %
Other
0.79  % 0.93  % 0.97  % 1.21  % 1.39  % 0.96  % 1.36  %
Total borrowed funds 0.98  % 1.03  % 1.04  % 1.09  % 1.02  % 1.05  % 1.50  %
Total rate on interest-bearing liabilities 0.13  % 0.14  % 0.16  % 0.19  % 0.21  % 0.16  % 0.47  %
Interest rate spread 2.23  % 2.22  % 2.24  % 2.21  % 2.25  % 2.23  % 2.40  %
Benefit from use of noninterest bearing sources (b) 0.04  % 0.05  % 0.05  % 0.06  % 0.07  % 0.06  % 0.13  %
Net interest margin 2.27  % 2.27  % 2.29  % 2.27  % 2.32  % 2.29  % 2.53  %
(a)Yields and rates are calculated using the applicable annualized interest income or interest expense divided by the applicable average earning assets or interest-bearing liabilities. Net interest margin is the total yield on interest-earning assets minus the total rate on interest-bearing liabilities and includes the benefit from use of noninterest-bearing sources. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating average yields used in the calculation of net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020 were $22 million, $22 million, $15 million, $15 million and $17 million, respectively. The taxable-equivalent adjustments to net interest income for the twelve months ended December 31, 2021 and December 31, 2020 were $74 million and $75 million, respectively.
(b)Represents the positive effects of investing noninterest-bearing sources in interest-earning assets.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 5
Table 5: Details of Loans (Unaudited)
December 31 September 30 June 30 March 31 December 31
In millions 2021 2021 2021 2021 2020
Commercial
Commercial and industrial $ 152,933  $ 152,735  $ 155,300  $ 129,798  $ 132,073 
Commercial real estate 34,015  36,195  37,964  28,319  28,716 
Equipment lease financing 6,130  6,257  6,376  6,389  6,414 
Total commercial 193,078 195,187 199,640 164,506 167,203
Consumer
Residential real estate 39,712  38,214  36,846  22,418  22,560 
Home equity 24,061  24,479  25,174  23,493  24,088 
Automobile 16,635  17,265  17,551  13,584  14,218 
Credit card 6,626  6,466  6,528  5,675  6,215 
Education 2,533  2,653  2,726  2,842  2,946 
Other consumer 5,727  5,966  6,239  4,495  4,698 
Total consumer 95,294  95,043  95,064  72,507  74,725 
Total loans $ 288,372  $ 290,230  $ 294,704  $ 237,013  $ 241,928 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 6
Allowance for Credit Losses (Unaudited)

Table 6: Change in Allowance for Loan and Lease Losses
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2021 2021 2021 2021 2020 2021 2020
Allowance for loan and lease losses
Beginning balance $ 5,355  $ 5,730  $ 4,714  $ 5,361  $ 5,751  $ 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 (35) (46) (245) (59) (133) (385) (382)
Commercial real estate (2) (1) (28) (5) (1) (36) (2)
Equipment lease financing (4) (3) (1) (5) (4) (13) (23)
Residential real estate (4) (4) (3) (4) (6) (15) (10)
Home equity (4) (2) (7) (7) (11) (20) (42)
Automobile (49) (33) (35) (52) (55) (169) (265)
Credit card (60) (62) (65) (69) (72) (256) (300)
Education (4) (3) (3) (5) (3) (15) (16)
Other consumer (62) (52) (41) (37) (42) (192) (152)
Total gross charge-offs (224) (206) (428) (243) (327) (1,101) (1,192)
Recoveries:
Commercial and industrial 20  25  29  14  23  88  75 
Commercial real estate 2  2  2  1  3  7  9 
Equipment lease financing 3  2  3  3  3  11  10 
Residential real estate 8  9  6  5  4  28  16 
Home equity 23  25  21  17  17  86  61 
Automobile 26  38  41  38  33  143  128 
Credit card 10  13  11  12  9  46  35 
Education 2  2  2  2  2  8  8 
Other consumer 6  9  7  5  4  27  18 
Total recoveries 100  125  122  97  98  444  360 
Net (charge-offs) / recoveries:
Commercial and industrial (15) (21) (216) (45) (110) (297) (307)
Commercial real estate 1  (26) (4) 2  (29) 7 
Equipment lease financing (1) (1) 2  (2) (1) (2) (13)
Residential real estate 4  5  3  1  (2) 13  6 
Home equity 19  23  14  10  6  66  19 
Automobile (23) 5  6  (14) (22) (26) (137)
Credit card (50) (49) (54) (57) (63) (210) (265)
Education (2) (1) (1) (3) (1) (7) (8)
Other consumer (56) (43) (34) (32) (38) (165) (134)
Total net (charge-offs) (b) (124) (81) (306) (146) (229) (657) (832)
Provision for (recapture of) credit losses (c) (362) (229) 206  (502) (164) (887) 2,985 
Other (1) (6) 1  1  3  (5) 3 
Ending balance $ 4,868  $ 5,355  $ 5,730  $ 4,714  $ 5,361  $ 4,868  $ 5,361 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (16) $ (21) $ (240) $ (51) $ (109) $ (328) $ (313)
Consumer net charge-offs (108) (60) (66) (95) (120) (329) (519)
Total net charge-offs (b) $ (124) $ (81) $ (306) $ (146) $ (229) $ (657) $ (832)
Net charge-offs to average loans (d) 0.17  % 0.11  % 0.48  % 0.25  % 0.37  % 0.24  % 0.33  %
Commercial 0.03  % 0.04  % 0.55  % 0.13  % 0.25  % 0.18  % 0.18  %
Consumer 0.45  % 0.25  % 0.33  % 0.53  % 0.63  % 0.38  % 0.67  %
(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 7 for the components of the Provision for (recapture of) credit losses being reported on the Consolidated Income Statement.
(d)    Three month period percentages are annualized.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 7
Allowance for Credit Losses (Unaudited) (Continued)

Table 7: Components of the Provision for (Recapture of) Credit Losses
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2021 2021 2021 (a) 2021 2020 2021 (a) 2020
Provision for (recapture of) credit losses
Loans and leases $ (362) $ (229) $ 206  $ (502) $ (164) (887) $ 2,985 
Unfunded lending related commitments 16  1  92  (77) (105) 32  87 
Investment securities 25  26  11  51  80 
Other financial assets 19  4  2  4  25  23 
Total provision for (recapture of) credit losses $ (327) $ (203) $ 302  $ (551) $ (254) $ (779) $ 3,175 
(a)     Amounts include $1.0 billion of provision for credit losses that was recorded as part of the BBVA acquisition on June 1, 2021.

Table 8: Allowance for Credit Losses by Loan Class (a)
December 31, 2021 September 30, 2021 December 31, 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 $ 1,879  $ 152,933  1.23  % $ 2,173  $ 152,735  1.42  % $ 2,300  $ 132,073  1.74  %
Commercial real estate 1,216  34,015  3.57  % 1,312  36,195  3.62  % 880  28,716  3.06  %
Equipment lease financing 90  6,130  1.47  % 118  6,257  1.89  % 157  6,414  2.45  %
Total commercial 3,185  193,078  1.65  % 3,603  195,187  1.85  % 3,337  167,203  2.00  %
Consumer
Residential real estate 21  39,712  0.05  % 42  38,214  0.11  % 28  22,560  0.12  %
Home equity 149  24,061  0.62  % 167  24,479  0.68  % 313  24,088  1.30  %
Automobile 372  16,635  2.24  % 365  17,265  2.11  % 379  14,218  2.67  %
Credit card 712  6,626  10.75  % 701  6,466  10.84  % 816  6,215  13.13  %
Education 71  2,533  2.80  % 81  2,653  3.05  % 129  2,946  4.38  %
Other consumer 358  5,727  6.25  % 396  5,966  6.64  % 359  4,698  7.64  %
Total consumer 1,683  95,294  1.77  % 1,752  95,043  1.84  % 2,024  74,725  2.71  %
Total
 4,868  $ 288,372  1.69  % 5,355  $ 290,230  1.85  % 5,361  $ 241,928  2.22  %
Allowance for unfunded lending related commitments
 662  646  584 
Allowance for credit losses
 $ 5,530  $ 6,001  $ 5,945 
Supplemental Information
Allowance for credit losses to total loans
 1.92  % 2.07  % 2.46  %
Commercial 1.94  % 2.12  % 2.29  %
Consumer 1.87  % 1.96  % 2.84  %

(a)     Excludes allowances for investment securities and other financial assets, which together totaled $171 million, $162 million and $109 million at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 8
Details of Nonperforming Assets (Unaudited)

Table 9: Nonperforming Assets by Type
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2021 2021 2021 2021 2020
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers $ 188  $ 220  $ 206  $ 79  $ 90 
Real estate related (a) 64  49  78  48  95 
Manufacturing 52  62  65  55  81 
Retail/wholesale trade 50  59  71  66  61 
Health care 46  56  71  19  20 
Transportation and warehousing 18  21  18  18  20 
Other industries 378  362  421  227  299 
Total commercial and industrial 796  829  930  512  666 
Commercial real estate 364  365  501  221  224 
Equipment lease financing 8  10  15  16  33 
Total commercial 1,168  1,204  1,446  749  923 
Consumer (b)
Residential real estate 517  533  503  541  528 
Home equity 596  592  626  656  645 
Automobile 183  184  191  178  175 
Credit card 7  7  7  7  8 
Other consumer 9  8  6  7  7 
Total consumer 1,312  1,324  1,333  1,389  1,363 
Total nonperforming loans (c) 2,480  2,528  2,779  2,138  2,286 
OREO and foreclosed assets 26  31  39  41  51 
Total nonperforming assets $ 2,506  $ 2,559  $ 2,818  $ 2,179  $ 2,337 
Nonperforming loans to total loans 0.86  % 0.87  % 0.94  % 0.90  % 0.94  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.87  % 0.88  % 0.96  % 0.92  % 0.97  %
Nonperforming assets to total assets 0.45  % 0.46  % 0.51  % 0.46  % 0.50  %
Allowance for loan and lease losses to nonperforming loans 196  % 212  % 206  % 220  % 235  %
(a)Represents loans related to customers in the real estate and construction industries.
(b)Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
(c)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option.



Table 10: Change in Nonperforming Assets
October 1, 2021 - July 1, 2021 - April 1, 2021 - January 1, 2021 - October 1, 2020 -
In millions December 31, 2021 September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020
Beginning balance $ 2,559  $ 2,818  $ 2,179  $ 2,337  $ 2,152 
Acquired nonperforming assets (a) 880 
New nonperforming assets 395  365  207  249  586 
Charge-offs and valuation adjustments (53) (71) (61) (70) (97)
Principal activity, including paydowns and payoffs (240) (333) (264) (186) (185)
Asset sales and transfers to loans held for sale (3) (30) (15) (86) (14)
Returned to performing status (152) (190) (108) (65) (105)
Ending balance $ 2,506  $ 2,559  $ 2,818  $ 2,179  $ 2,337 
(a)Represents nonperforming assets acquired as a part of the BBVA acquisition on June 1, 2021 and includes $871 million of loans and $9 million of OREO and foreclosed assets. Our second quarter 2021 Form 10-Q included additional information on the BBVA acquisition.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 9
Accruing Loans Past Due (Unaudited)                  

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 third quarter 2021 Form 10-Q included, and our 2021 Form 10-K will include, additional information on COVID-19 related loan modifications.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2021 2021 2021 2021 2020
Commercial
Commercial and industrial $ 235 $ 97 $ 72 $ 80 $ 106
Commercial real estate 46 68 5 12 6
Equipment lease financing 25 5 3 21 31
Total commercial 306 170 80 113 143
Consumer
Residential real estate
Non government insured (b) 310 178 182 61 89
Government insured 69 81 88 101 92
Home equity 53 45 44 43 50
Automobile 146 114 98 76 134
Credit card 49 42 37 31 43
Education
Non government insured 5 5 5 6 5
Government insured
 38 40 41 43 50
Other consumer 35 34 31 11 14
Total consumer 705 539 526 372 477
Total $ 1,011 $ 709 $ 606 $ 485 $ 620
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.35  % 0.24  % 0.21  % 0.20  % 0.26  %
Commercial 0.16  % 0.09  % 0.04  % 0.07  % 0.09  %
Consumer 0.74  % 0.57  % 0.55  % 0.51  % 0.64  %
(a)Excludes loans held for sale.
(b)Amounts as of September 30, 2021 and June 30, 2021 have been revised to align the methodology of acquired residential real estate loans attributable to BBVA to PNC's methodology, which resulted in an increase of $50 million and $58 million as of September 30, 2021 and June 30, 2021, respectively. This change was made as a result of the conversion of bank systems completed in October 2021.


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

Table 12: Accruing Loans Past Due 60 to 89 Days (a)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2021 2021 2021 2021 2020
Commercial
Commercial and industrial $ 72 $ 50 $ 27 $ 13 $ 26
Commercial real estate 24 2 3 1 1
Equipment lease financing 2 4 4 1 5
Total commercial 98 56 34 15 32
Consumer
Residential real estate
Non government insured (b) 78 53 53 13 16
Government insured 41 45 52 60 62
Home equity 18 18 17 20 21
Automobile 40 23 20 19 34
Credit card 33 27 24 24 30
Education
Non government insured
 2 3 2 3 2
Government insured
 23 23 20 22 27
Other consumer 22 15 16 6 10
Total consumer 257 207 204 167 202
Total $ 355 $ 263 $ 238 $ 182 $ 234
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.12  % 0.09  % 0.08  % 0.08  % 0.10  %
Commercial 0.05  % 0.03  % 0.02  % 0.01  % 0.02  %
Consumer 0.27  % 0.22  % 0.21  % 0.23  % 0.27  %
(a)Excludes loans held for sale.
(b)Amounts as of September 30, 2021 and June 30, 2021 have been revised to align the methodology of acquired residential real estate loans attributable to BBVA to PNC's methodology, which resulted in an increase of $18 million and $23 million as of September 30, 2021 and June 30, 2021, respectively. This change was made as a result of the conversion of bank systems completed in October 2021.



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Accruing Loans Past Due (Unaudited) (Continued)

Table 13: Accruing Loans Past Due 90 Days or More (a)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2021 2021 2021 2021 2020
Commercial
Commercial and industrial $ 132 $ 56 $ 45 $ 63 $ 30
Commercial real estate 1 11 2
Total commercial 133 67 47 63 30
Consumer
Residential real estate
Non government insured (b) 59 33 44 17 27
Government insured 269 268 297 258 292
Automobile 14 4 3 6 12
Credit card 62 53 59 52 60
Education
Non government insured 2 1 1 2 2
Government insured
 63 60 66 74 75
Other consumer 17 11 14 7 11
Total consumer 486 430 484 416 479
Total $ 619 $ 497 $ 531 $ 479 $ 509
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.21  % 0.17  % 0.18  % 0.20  % 0.21  %
Commercial 0.07  % 0.03  % 0.02  % 0.04  % 0.02  %
Consumer 0.51  % 0.45  % 0.51  % 0.57  % 0.64  %
Total accruing loans past due $ 1,985 $ 1,469 $ 1,375 $ 1,146 $ 1,363
Commercial $ 537 $ 293 $ 161 $ 191 $ 205
Consumer $ 1,448 $ 1,176 $ 1,214 $ 955 $ 1,158
Total accruing loans past due to total loans 0.69  % 0.51  % 0.47  % 0.48  % 0.56  %
Commercial 0.28  % 0.15  % 0.08  % 0.12  % 0.12  %
Consumer 1.52  % 1.24  % 1.28  % 1.32  % 1.55  %
(a)Excludes loans held for sale.
(b)Amounts as of September 30, 2021 and June 30, 2021 have been revised to align the methodology of acquired residential real estate loans attributable to BBVA to PNC's methodology, which resulted in an increase of $5 million and $4 million as of September 30, 2021 and June 30, 2021, respectively. This change was made as a result of the conversion of bank systems completed in October 2021.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 12
Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, insurance services, investment management and cash management products and services to consumer and small business customers. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. As a result of the BBVA acquisition, we have become a coast-to-coast Retail Bank. Our national expansion strategy is designed to grow customers with digitally-led banking and a thin branch network as we expand into new markets. Deposit products include checking, savings and money market accounts and certificates of deposit. Lending products include residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans and personal and small business loans and lines of credit. The residential mortgage loans are directly originated within our branch network and nationwide, and are typically underwritten to agency and/or third-party standards, and either sold, servicing retained or held on our balance sheet. Brokerage, investment management and cash management products and services include managed, education, retirement and trust accounts.

Corporate & Institutional Banking provides lending, treasury management, and capital markets-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 corporations with cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services and access to online/mobile information management and reporting services. Within Treasury Management, PNC Global Transfers (formerly BBVA Transfer Services, Inc.) provides wholesale money transfer processing capabilities between the U.S. and Mexico and other countries primarily in Central America and South America. 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 14: Period End Employees
December 31 September 30 June 30 March 31 December 31
2021 2021 2021 2021 2020
Full-time employees
Retail Banking 32,563  33,188  33,471  27,690  27,621 
Other full-time employees 25,105  25,442  25,512  22,281  21,928 
Total full-time employees 57,668  58,630  58,983  49,971  49,549 
Part-time employees
Retail Banking 1,669  1,616  1,821  1,697  1,611 
Other part-time employees 89  94  431  101  97 
Total part-time employees 1,758  1,710  2,252  1,798  1,708 
Total 59,426  60,340  61,235  51,769  51,257 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 13
Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2021 2021 2021 2021 2020 2021 2020
Income
Retail Banking $ 362  $ 447  $ 232  $ 607  $ 336  $ 1,648  $ 844 
Corporate & Institutional Banking 1,334  1,123  809  1,058  992  4,324  1,674 
Asset Management Group 106  114  87  99  82  406  255 
Other (509) (210) (37) 52  32  (704) 189 
Net income from continuing operations
  excluding noncontrolling interests		 $ 1,293  $ 1,474  $ 1,091  $ 1,816  $ 1,442  $ 5,674  $ 2,962 
  
Revenue
Retail Banking $ 2,408  $ 2,375  $ 2,203  $ 2,016  $ 1,853  $ 9,002  $ 8,128 
Corporate & Institutional Banking 2,281  2,306  1,959  1,808  1,913  8,354  7,111 
Asset Management Group 388  397  356  322  316  1,463  1,211 
Other 50  119  149  74  126  392  451 
Total revenue $ 5,127  $ 5,197  $ 4,667  $ 4,220  $ 4,208  $ 19,211  $ 16,901 

(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.

Prior to 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. Following conversion, there were changes in the segmentation of BBVA USA customers as we integrated data to PNC applications, finalized the review of customer relationships and better aligned customers with PNC's products and services. These changes are reflected in fourth quarter reporting and are considered immaterial.

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Table 16: Retail Banking (Unaudited) (a)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2021 2021 2021 2021 2020 2021 2020
Income Statement
Net interest income $ 1,634  $ 1,713  $ 1,497  $ 1,362  $ 1,380  $ 6,206  $ 5,609 
Noninterest income 774  662  706  654  473  2,796  2,519 
Total revenue 2,408  2,375  2,203  2,016  1,853  9,002  8,128 
Provision for (recapture of) credit losses 55  (113) 214  (257) (81) (101) 968 
Noninterest expense 1,874  1,889  1,677  1,476  1,482  6,916  6,019 
Pretax earnings 479  599  312  797  452  2,187  1,141 
Income taxes 112  140  73  183  105  508  266 
Noncontrolling interests 5  12  7  7  11  31  31 
Earnings $ 362  $ 447  $ 232  $ 607  $ 336  $ 1,648  $ 844 
Average Balance Sheet
Loans held for sale $ 1,425  $ 1,583  $ 1,405  $ 891  $ 672  $ 1,328  $ 745 
Loans
Consumer
Residential real estate $ 30,888  $ 30,702  $ 21,653  $ 17,468  $ 18,042  $ 25,230  $ 18,171 
Home equity 22,572  23,047  22,080  21,833  22,366  22,387  22,633 
Automobile 16,944  17,377  14,888  13,890  14,536  15,787  15,968 
Credit card 6,513  6,484  5,900  5,819  6,218  6,182  6,629 
Education 2,620  2,712  2,812  2,938  3,027  2,770  3,176 
Other consumer 2,612  2,892  2,175  1,898  2,086  2,397  2,334 
Total consumer 82,149  83,214  69,508  63,846  66,275  74,753  68,911 
Commercial 12,844  15,895  14,796  13,743  13,391  14,321  12,573 
Total loans $ 94,993  $ 99,109  $ 84,304  $ 77,589  $ 79,666  $ 89,074  $ 81,484 
Total assets $ 114,656  $ 117,394  $ 100,948  $ 92,891  $ 94,303  $ 106,551  $ 97,643 
Deposits
Noninterest-bearing $ 65,510  $ 65,985  $ 54,260  $ 44,845  $ 43,818  $ 57,729  $ 39,754 
Interest-bearing 197,312  196,006  178,946  163,389  157,011  184,040  150,482 
Total deposits $ 262,822  $ 261,991  $ 233,206  $ 208,234  $ 200,829  $ 241,769  $ 190,236 
Performance Ratios
Return on average assets 1.25  % 1.51  % 0.92  % 2.65  % 1.41  % 1.55  % 0.86  %
Noninterest income to total revenue 32  % 28  % 32  % 32  % 26  % 31  % 31  %
Efficiency 78  % 80  % 76  % 73  % 80  % 77  % 74  %
(a)See note (a) on page 13.

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Retail Banking (Unaudited) (Continued)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions, except as noted 2021 2021 2021 2021 2020 2021 2020
Supplemental Noninterest Income
  Information
Consumer services $ 479  $ 470  $ 435  $ 368  $ 369  $ 1,752  $ 1,427 
Residential mortgage $ 101  $ 147  $ 103  $ 105  $ 99  $ 456  $ 604 
Service charges on deposits $ 136  $ 158  $ 129  $ 119  $ 133  $ 542  $ 497 
Residential Mortgage Information
Residential mortgage servicing statistics
  (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 133  $ 139  $ 145  $ 117  $ 121 
Serviced portfolio acquisitions $ 2  $ 2  $ 33  $ 7  $ 12  $ 44  $ 33 
MSR asset value (b) $ 1.1  $ 1.1  $ 1.1  $ 1.0  $ 0.7 
MSR capitalization value (in basis points) (b) 81  81  77  83  56 
Servicing income: (in millions)
Servicing fees, net (c) $ 14  $ 18  $ (3) $ 5  $ 13  $ 34  $ 118 
Mortgage servicing rights valuation, net of
  economic hedge		 $ 2  $ 24  $ 24  $ 14  $ (1) $ 64  $ 137 
Residential mortgage loan statistics
Loan origination volume (in billions) $ 6.6  $ 7.4  $ 6.5  $ 4.3  $ 3.7  $ 24.8  $ 15.1 
Loan sale margin percentage 2.55  % 3.01  % 2.67  % 3.28  % 3.75  % 2.84  % 3.57  %
Percentage of originations represented by:
Purchase volume (d) 38  % 47  % 48  % 34  % 45  % 43  % 40  %
Refinance volume 62  % 53  % 52  % 66  % 55  % 57  % 60  %
Other Information (b)
Customer-related statistics (average) (e)
Non-teller deposit transactions (f) 64  % 66  % 65  % 66  % 66  % 65  % 64  %
Digital consumer customers (g) 79  % 80  % 80  % 79  % 77  % 79  % 74  %
Credit-related statistics
Nonperforming assets $ 1,220  $ 1,220  $ 1,245  $ 1,229  $ 1,211 
Net charge-offs - loans and leases $ 124  $ 82  $ 79  $ 108  $ 136  $ 393  $ 569 
Other statistics
ATMs 9,523  9,572  9,636  8,874  8,900 
Branches (h) 2,629  2,712  2,724  2,137  2,162 
Brokerage account client assets (in billions) (i) $ 78  $ 76  $ 83  $ 61  $ 59 

(a)Represents mortgage loan servicing balances for third parties and the related income.
(b)Presented as of period end, except for average customer-related statistics and net charge-offs, which are both shown for the three months and year 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)Amounts prior to the three months ended December 31, 2021 represent PNC legacy only statistics. Fourth quarter statistics included BBVA activity following the conversion on October 12, 2021.
(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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Page 16
Table 17: Corporate & Institutional Banking (Unaudited) (a)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2021 2021 2021 2021 2020 2021 2020
Income Statement
Net interest income $ 1,228  $ 1,250  $ 1,092  $ 1,001  $ 994  $ 4,571  $ 4,049 
Noninterest income 1,053  1,056  867  807  919  3,783  3,062 
Total revenue 2,281  2,306  1,959  1,808  1,913  8,354  7,111 
Provision for (recapture of) credit losses (369) (99) 104  (282) (166) (646) 2,088 
Noninterest expense 975  980  813  711  801  3,479  2,856 
Pretax earnings 1,675  1,425  1,042  1,379  1,278  5,521  2,167 
Income taxes 337  299  229  318  282  1,183  483 
Noncontrolling interests 4  3  4  3  4  14  10 
Earnings $ 1,334  $ 1,123  $ 809  $ 1,058  $ 992  $ 4,324  $ 1,674 
Average Balance Sheet
Loans held for sale $ 539  $ 541  $ 564  $ 691  $ 1,039  $ 583  $ 762 
Loans
Commercial
Commercial and industrial $ 137,079  $ 134,128  $ 121,232  $ 114,944  $ 120,297  $ 126,928  $ 125,426 
Commercial real estate 33,559  35,368  30,118  27,182  27,509  31,584  27,180 
Equipment lease financing 6,184  6,300  6,332  6,332  6,381  6,286  6,813 
Total commercial 176,822  175,796  157,682  148,458  154,187  164,798  159,419 
Consumer 12  20  13  9  10  13  10 
Total loans $ 176,834  $ 175,816  $ 157,695  $ 148,467  $ 154,197  $ 164,811  $ 159,429 
Total assets $ 198,910  $ 202,268  $ 181,770  $ 170,531  $ 177,792  $ 188,479  $ 183,189 
Deposits
Noninterest-bearing $ 88,023  $ 85,869  $ 75,570  $ 66,666  $ 64,334  $ 79,109  $ 53,681 
Interest-bearing 72,397  77,247  69,443  69,668  74,426  72,210  70,622 
Total deposits $ 160,420  $ 163,116  $ 145,013  $ 136,334  $ 138,760  $ 151,319  $ 124,303 
Performance Ratios
Return on average assets 2.66  % 2.20  % 1.79  % 2.52  % 2.21  % 2.29  % 0.91  %
Noninterest income to total revenue 46  % 46  % 44  % 45  % 48  % 45  % 43  %
Efficiency 43  % 42  % 42  % 39  % 42  % 42  % 40  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 560  $ 592  $ 523  $ 494  $ 472  $ 2,169  $ 1,884 
Capital Markets (b) $ 571  $ 577  $ 432  $ 403  $ 530  $ 1,983  $ 1,607 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 42  $ 44  $ 29  $ 30  $ 45  $ 145  $ 162 
Commercial mortgage loan servicing income (d) 90  88  66  90  82  334  294 
Commercial mortgage servicing rights valuation, net of economic hedge (e) 16  14  33  17  14  80  72 
Total $ 148  $ 146  $ 128  $ 137  $ 141  $ 559  $ 528 
MSR asset value (f) $ 740  $ 703  $ 682  $ 702  $ 569 
Average loans by C&IB business
Corporate Banking $ 87,284  $ 85,208  $ 77,645  $ 74,459  $ 76,664  $ 81,069  $ 81,977 
Real Estate 44,787  47,335  41,188  38,395  41,427  42,936  40,381 
Business Credit 26,065  25,540  22,965  21,552  21,337  24,047  22,589 
Commercial Banking 10,924  13,458  12,513  10,807  11,375  12,054  10,415 
Other 7,774  4,275  3,384  3,254  3,394  4,705  4,067 
Total average loans $ 176,834  $ 175,816  $ 157,695  $ 148,467  $ 154,197  $ 164,811  $ 159,429 
Credit-related statistics
Nonperforming assets (f) $ 1,007  $ 1,061  $ 1,274  $ 658  $ 827 
Net charge-offs - loans and leases $ (1) $ 13  $ 233  $ 44  $ 99  $ 289  $ 280 

(a)See note (a) on page 13.
(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 18: Asset Management Group (Unaudited) (a)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions, except as noted 2021 2021 2021 2021 2020 2021 2020
Income Statement
Net interest income $ 130  $ 141  $ 112  $ 93  $ 91  $ 476  $ 357 
Noninterest income 258  256  244  229  225  987  854 
Total revenue 388  397  356  322  316  1,463  1,211 
Provision for (recapture of) credit losses (15) (6) 23  (9) (2) (7) 21 
Noninterest expense 265  255  219  202  211  941  858 
Pretax earnings 138  148  114  129  107  529  332 
Income taxes 32  34  27  30  25  123  77 
Earnings $ 106  $ 114  $ 87  $ 99  $ 82  $ 406  $ 255 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 6,295  $ 5,727  $ 4,439  $ 3,635  $ 3,326  $ 5,033  $ 2,832 
Other consumer 4,535  4,544  4,190  4,008  4,077  4,321  4,042 
Total consumer 10,830  10,271  8,629  7,643  7,403  9,354  6,874 
Commercial 2,093  2,693  1,415  756  774  1,746  831 
Total loans $ 12,923  $ 12,964  $ 10,044  $ 8,399  $ 8,177  $ 11,100  $ 7,705 
Total assets $ 13,317  $ 13,805  $ 10,640  $ 8,873  $ 8,615  $ 11,677  $ 8,186 
Deposits
Noninterest-bearing $ 3,025  $ 4,332  $ 2,537  $ 1,754  $ 1,689  $ 2,919  $ 1,568 
Interest-bearing 26,318  24,984  20,894  18,825  17,880  22,782  17,347 
Total deposits $ 29,343  $ 29,316  $ 23,431  $ 20,579  $ 19,569  $ 25,701  $ 18,915 
Performance Ratios
Return on average assets 3.16  % 3.28  % 3.28  % 4.52  % 3.78  % 3.48  % 3.12  %
Noninterest income to total revenue 66  % 64  % 69  % 71  % 71  % 67  % 71  %
Efficiency 68  % 64  % 62  % 63  % 67  % 64  % 71  %
Other Information
Nonperforming assets (b) $ 62  $ 80  $ 85  $ 68  $ 66 
Net charge-offs (recoveries) - loans and leases $ 1  $ (1) $ 2  $ 1  $ 2  $ 1 
Brokerage account client assets (in billions) (b) $ 5  $ 5  $ 5 
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management $ 192  $ 183  $ 183  $ 173  $ 170 
Nondiscretionary client assets under administration 175  170  172  161  154 
Total $ 367  $ 353  $ 355  $ 334  $ 324 
Discretionary client assets under management
Personal $ 123  $ 117  $ 119  $ 110  $ 108 
Institutional 69  66  64  63  62 
Total $ 192  $ 183  $ 183  $ 173  $ 170 
(a)See note (a) on page 13.
(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.