Form: 8-K

Current report filing

July 15, 2022

Documents



Exhibit 99.1

pncbanklogoa18a.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
SECOND QUARTER 2022
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
SECOND QUARTER 2022
(UNAUDITED)
Consolidated Results:
Page
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 July 15, 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.

PRESENTATION OF NONINTEREST INCOME
Effective for the first quarter of 2022, PNC updated the presentation of its noninterest income categorization to be based on product and service type, and accordingly, has changed the basis of presentation of its noninterest income revenue streams to: (i) Asset management and brokerage, (ii) Capital markets related, (iii) Card and cash management, (iv) Lending and deposit services, (v) Residential and commercial mortgage and (vi) Other noninterest income. For a description of each updated noninterest income revenue stream, see our first quarter 2022 Form 10-Q.

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 2021 results of operations reflect the benefit of BBVA's acquired business operations for the period since the acquisition closed on June 1, 2021. PNC's balance sheets include BBVA's balances for all periods presented.





THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Second Quarter 2022 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
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2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
14-15
17
18


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
In millions, except per share data 2022 2022 2021 2021 2021 2022 2021
Interest Income
Loans $ 2,504  $ 2,293  $ 2,414  $ 2,437  $ 2,160  $ 4,797  $ 4,156 
Investment securities 631  544  484  460  469  1,175  890 
Other 146  77  77  78  72  223  138 
Total interest income 3,281  2,914  2,975  2,975  2,701  6,195  5,184 
Interest Expense
Deposits 88  27  27  29  30  115  70 
Borrowed funds 142  83  86  90  90  225  185 
Total interest expense 230  110  113  119  120  340  255 
Net interest income 3,051  2,804  2,862  2,856  2,581  5,855  4,929 
Noninterest Income
Asset management and brokerage 365  377  385  375  350  742  678 
Capital markets related 409  252  460  482  324  661  635 
Card and cash management 671  620  646  663  597  1,291  1,089 
Lending and deposit services 282  269  273  305  270  551  524 
Residential and commercial mortgage 161  159  209  248  206  320  393 
Other (a) 177  211  292  268  339  388  639 
Total noninterest income 2,065  1,888  2,265  2,341  2,086  3,953  3,958 
Total revenue 5,116  4,692  5,127  5,197  4,667  9,808  8,887 
Provision For (Recapture of) Credit Losses 36  (208) (327) (203) 302  (172) (249)
Noninterest Expense
Personnel 1,779  1,717  2,038  1,986  1,640  3,496  3,117 
Occupancy 246  258  260  248  217  504  432 
Equipment 351  331  437  355  326  682  619 
Marketing 95  61  97  103  74  156  119 
Other 773  805  959  895  793  1,578  1,337 
Total noninterest expense 3,244  3,172  3,791  3,587  3,050  6,416  5,624 
Income before income taxes and noncontrolling interests 1,836  1,728  1,663  1,813  1,315  3,564  3,512 
Income taxes 340  299  357  323  212  639  583 
Net income 1,496  1,429  1,306  1,490  1,103  2,925  2,929 
Less: Net income attributable to noncontrolling interests 15  21  13  16  12  36  22 
Preferred stock dividends (b) 71  45  71  57  48  116  105 
Preferred stock discount accretion and
    redemptions		 1  2  2  1  1  3  2 
Net income attributable to common shareholders $ 1,409  $ 1,361  $ 1,220  $ 1,416  $ 1,042  $ 2,770  $ 2,800 
Earnings Per Common Share
Basic $ 3.39  $ 3.23  $ 2.87  $ 3.31  $ 2.43  $ 6.62  $ 6.54 
Diluted $ 3.39  $ 3.23  $ 2.86  $ 3.30  $ 2.43  $ 6.61  $ 6.53 
Average Common Shares Outstanding
Basic 414  420  424  426  427  417  426 
Diluted 414  420  424  426  427  417  427 
Efficiency 63  % 68  % 74  % 69  % 65  % 65  % 63  %
Noninterest income to total revenue 40  % 40  % 44  % 45  % 45  % 40  % 45  %
Effective tax rate from continuing operations (c) 18.5  % 17.3  % 21.5  % 17.8  % 16.1  % 17.9  % 16.6  %
(a)Includes net gains (losses) on sales of securities of less than $(1) million, $(4) million, $14 million, $15 million, and $10 million for the quarters ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively, and $(4) million and $35 million for the six months ended June 30, 2022 and June 30, 2021, 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)
June 30 March 31 December 31 September 30 June 30
In millions, except par value 2022 2022 2021 2021 2021
Assets
Cash and due from banks $ 8,582  $ 7,572  $ 8,004  $ 8,843  $ 8,724 
Interest-earning deposits with banks (a) 28,404  48,776  74,250  75,478  72,447 
Loans held for sale (b) 1,191  1,506  2,231  2,121  2,227 
Investment securities – available for sale 52,984  112,313  131,536  124,127  125,058 
Investment securities – held to maturity 79,748  20,098  1,426  1,479  1,485 
Loans (b) 310,800  294,457  288,372  290,230  294,704 
Allowance for loan and lease losses (4,462) (4,558) (4,868) (5,355) (5,730)
Net loans 306,338  289,899  283,504  284,875  288,974 
Equity investments 8,441  7,798  8,180  7,737  7,521 
Mortgage servicing rights 2,608  2,208  1,818  1,833  1,793 
Goodwill 10,916  10,916  10,916  10,885  10,958 
Other (b) 41,574  40,160  35,326  36,137  35,025 
Total assets $ 540,786  $ 541,246  $ 557,191  $ 553,515  $ 554,212 
Liabilities
Deposits
Noninterest-bearing $ 146,438  $ 150,798  $ 155,175  $ 156,305  $ 154,190 
Interest-bearing 294,373  299,399  302,103  292,597  298,693 
Total deposits 440,811  450,197  457,278  448,902  452,883 
Borrowed funds
Federal Home Loan Bank borrowings 10,000 
Bank notes and senior debt 14,358  16,206  20,661  22,993  24,408 
Subordinated debt 7,487  6,766  6,996  7,074  7,120 
Other (b) 4,139  3,599  3,127  3,404  3,285 
Total borrowed funds 35,984  26,571  30,784  33,471  34,813 
Allowance for unfunded lending related commitments 681  639  662  646  645 
Accrued expenses and other liabilities 15,622  14,623  12,741  14,199  11,186 
Total liabilities 493,098  492,030  501,465  497,218  499,527 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares 2,714  2,713  2,713  2,713  2,713 
Capital surplus 18,531  17,487  17,457  17,453  15,928 
Retained earnings 51,841  51,058  50,228  49,541  48,663 
Accumulated other comprehensive income (loss) (8,358) (5,731) 409  1,079  1,463 
Common stock held in treasury at cost: 132, 128, 123, 120, and 118 shares (17,076) (16,346) (15,112) (14,527) (14,140)
Total shareholders’ equity 47,652  49,181  55,695  56,259  54,627 
Noncontrolling interests 36  35  31  38  58 
Total equity 47,688  49,216  55,726  56,297  54,685 
Total liabilities and equity $ 540,786  $ 541,246  $ 557,191  $ 553,515  $ 554,212 
(a)Amounts include balances held with the Federal Reserve Bank of $28.0 billion, $48.4 billion, $73.8 billion, $75.1 billion and $71.9 billion as of June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2022 Form 10-Q included, and our second quarter 2022 Form 10-Q 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) (b)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
In millions 2022 2022 2021 2021 2021 2022 2021
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 37,285  $ 67,498  $ 64,521  $ 63,163  $ 56,042  $ 52,308  $ 50,700 
Non-agency 902  1,007 974 1,051 1,142 954 1,189 
Commercial mortgage-backed 4,362  5,229 5,538 6,134 6,465 4,793 6,354 
Asset-backed 2,388 6,225 6,206 5,608 5,855 4,296 5,581 
U.S. Treasury and government agencies 17,480 47,468 44,415 38,149 32,419 32,391 27,392 
Other 4,200 4,876 4,741 4,994 5,107 4,536 4,835 
Total securities available for sale 66,617 132,303 126,395 119,099 107,030 99,278 96,051
Securities held to maturity
Residential mortgage-backed 33,086  106  16,687 
Commercial mortgage-backed 1,175  591 
Asset-backed 4,119  2,071
U.S. Treasury and government agencies 28,167 919 812 807 802 14,618 800 
Other 1,560 569 642 680 671 1,068 660 
Total securities held to maturity 68,107 1,594 1,454 1,487 1,473 35,035 1,460
Total investment securities 134,724 133,897 127,849 120,586 108,503 134,313 97,511
Loans
Commercial and industrial 166,968 155,481 152,355 152,964 137,892 161,256 133,966 
Commercial real estate 34,467 34,004 35,256 37,054 31,611 34,237 30,113 
Equipment lease financing 6,200 6,099 6,183 6,300 6,332 6,150 6,332 
Consumer 54,551 54,965 56,244 57,533 52,575 54,757 51,744 
Residential real estate 42,604 40,152 38,872 37,475 27,197 41,385 24,764 
Total loans 304,790 290,701 288,910 291,326 255,607 297,785 246,919
Interest-earning deposits with banks (c) 39,539 62,540 75,377 80,274 78,522 50,976 81,947 
Other interest-earning assets 10,085 9,417 9,113 9,113 8,079 9,821 7,955 
Total interest-earning assets 489,138 496,555 501,249 501,299 450,711 492,895 434,332
Noninterest-earning assets 54,856 53,541 58,123 57,943 53,718 54,133 52,093 
Total assets $ 543,994  $ 550,096  $ 559,372  $ 559,242  $ 504,429  $ 547,028  $ 486,425 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 58,019  $ 62,596  $ 65,214  $ 82,911  $ 64,990  $ 60,295  $ 62,053 
Demand 119,636 112,372 108,345 106,588 99,091 116,024 95,376 
Savings 109,063 108,532 104,644 89,679 87,307 108,799 85,129 
Time deposits 10,378 16,043 18,029 19,293 18,048 13,195 18,246 
Total interest-bearing deposits 297,096 299,543 296,232 298,471 269,436 298,313 260,804
Borrowed funds
Federal Home Loan Bank borrowings 6,978 265 3,508 1,332 
Bank notes and senior debt 16,172 18,015 21,581 22,573 22,620 17,089 22,709 
Subordinated debt 6,998 6,773 6,779 6,787 6,218 6,886 6,074 
Other 5,508 5,524 5,987 4,992 5,046 5,515 4,555 
Total borrowed funds 35,656 30,312 34,347 34,352 34,149 32,998 34,670
Total interest-bearing liabilities 332,752 329,855 330,579 332,823 303,585 331,311 295,474
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 149,432 153,726 156,549 155,948 132,283 151,567 122,843 
Accrued expenses and other liabilities 14,232 14,058 16,818 15,332 14,755 14,146 14,508 
Equity 47,578 52,457 55,426 55,139 53,806 50,004 53,600 
Total liabilities and equity $ 543,994  $ 550,096  $ 559,372  $ 559,242  $ 504,429  $ 547,028  $ 486,425 
(a)Calculated using average daily balances.
(b)Nonaccrual loans are included in loans, net of unearned income. The impact of financial derivatives used in interest rate risk management is included in the interest income/expense and average yields/rates of the related assets and liabilities. Basis adjustments related to hedged items are included in noninterest-earning assets and noninterest-bearing liabilities. Average balances of securities are based on amortized historical cost (excluding adjustments to fair value, which are included in other assets). Average balances for certain loans and borrowed funds accounted for at fair value are included in noninterest-earning assets and noninterest-bearing liabilities, with changes in fair value recorded in Noninterest income.
(c)Amounts include average balances held with the Federal Reserve Bank of $39.3 billion, $62.3 billion, $75.1 billion, $80.1 billion and $78.3 billion for the three months ended June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021, and $50.7 billion and $81.7 billion for the six months ended June 30, 2022 and June 30, 2021, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
2022 2022 2021 2021 2021 2022 2021
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 2.17  % 1.73  % 1.47  % 1.41  % 1.61  % 1.89  % 1.66  %
Non-agency 7.56  % 7.53  % 7.36  % 8.07  % 7.85  % 7.55  % 7.54  %
Commercial mortgage-backed 2.45  % 2.36  % 2.37  % 2.34  % 2.49  % 2.40  % 2.54  %
Asset-backed 1.84  % 1.35  % 1.48  % 1.50  % 2.07  % 1.49  % 1.96  %
U.S. Treasury and government agencies 1.60  % 1.18  % 1.17  % 1.18  % 1.30  % 1.29  % 1.45  %
Other 2.59  % 2.73  % 2.77  % 2.90  % 3.00  % 2.67  % 3.13  %
Total securities available for sale 2.13  % 1.62  % 1.50  % 1.51  % 1.73  % 1.79  % 1.82  %
Securities held to maturity
Residential mortgage-backed 1.98  % 1.96  %
Commercial mortgage-backed 2.30  % 2.29  %
Asset-backed 1.92  % 1.91  %
U.S. Treasury and government agencies 1.05  % 2.61  % 2.89  % 2.88  % 2.86  % 1.09  % 2.85  %
Other 4.21  % 4.17  % 4.20  % 4.33  % 3.67  % 4.19  % 3.91  %
Total securities held to maturity 1.65  % 2.99  % 3.47  % 3.54  % 3.23  % 1.67  % 3.33  %
Total investment securities 1.89  % 1.64  % 1.52  % 1.54  % 1.75  % 1.76  % 1.85  %
Loans
Commercial and industrial 2.90  % 2.75  % 2.90  % 2.80  % 2.89  % 2.83  % 2.90  %
Commercial real estate 3.15  % 2.79  % 2.86  % 3.17  % 2.92  % 3.01  % 2.86  %
Equipment lease financing 3.62  % 3.74  % 3.81  % 3.83  % 3.76  % 3.68  % 3.83  %
Consumer 4.68  % 4.69  % 4.71  % 4.85  % 4.82  % 4.68  % 4.80  %
Residential real estate 3.11  % 3.10  % 3.26  % 3.15  % 3.50  % 3.07  % 3.51  %
Total loans 3.29  % 3.19  % 3.32  % 3.32  % 3.38  % 3.24  % 3.38  %
Interest-earning deposits with banks 0.79  % 0.19  % 0.15  % 0.16  % 0.11  % 0.42  % 0.10  %
Other interest-earning assets 2.70  % 2.07  % 2.14  % 2.03  % 2.46  % 2.36  % 2.40  %
Total yield on interest-earning assets 2.69  % 2.37  % 2.36  % 2.36  % 2.40  % 2.53  % 2.40  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 0.19  % 0.03  % 0.02  % 0.03  % 0.03  % 0.10  % 0.03  %
Demand 0.15  % 0.02  % 0.02  % 0.03  % 0.03  % 0.09  % 0.03  %
Savings 0.04  % 0.04  % 0.04  % 0.04  % 0.05  % 0.04  % 0.05  %
Time deposits 0.18  % 0.13  % 0.11  % 0.12  % 0.20  % 0.15  % 0.26  %
Total interest-bearing deposits 0.12  % 0.04  % 0.04  % 0.04  % 0.05  % 0.08  % 0.05  %
Borrowed funds
Federal Home Loan Bank borrowings 1.24  % 0.35  % 1.24  % 0.42  %
Bank notes and senior debt 1.61  % 1.02  % 0.94  % 0.97  % 0.98  % 1.30  % 1.01  %
Subordinated debt 1.94  % 1.40  % 1.28  % 1.28  % 1.35  % 1.68  % 1.39  %
Other
1.46  % 0.97  % 0.79  % 0.93  % 0.97  % 1.22  % 1.07  %
Total borrowed funds 1.58  % 1.10  % 0.98  % 1.03  % 1.04  % 1.36  % 1.06  %
Total rate on interest-bearing liabilities 0.27  % 0.13  % 0.13  % 0.14  % 0.16  % 0.20  % 0.17  %
Interest rate spread 2.42  % 2.24  % 2.23  % 2.22  % 2.24  % 2.33  % 2.23  %
Benefit from use of noninterest-bearing sources (b) 0.08  % 0.04  % 0.04  % 0.05  % 0.05  % 0.06  % 0.05  %
Net interest margin 2.50  % 2.28  % 2.27  % 2.27  % 2.29  % 2.39  % 2.28  %
(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 June 30, 2022, March 31, 2022, December 31, 2021, September 30, 2021 and June 30, 2021 were $25 million, $22 million, $22 million, $22 million and $15 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2022 and June 30, 2021 were $47 million and $30 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)
June 30 March 31 December 31 September 30 June 30
In millions 2022 2022 2021 2021 2021
Commercial
Commercial and industrial
Manufacturing $ 27,179  $ 25,035  $ 22,597  $ 22,760  $ 22,709 
Retail/wholesale trade 26,475 25,027 22,803 22,238 22,596
Service providers 21,184 20,584 20,750 20,969 22,303
Financial services 19,594 17,674 17,950 18,022 15,947
Technology, media & telecommunications 16,249 10,684 10,070 8,920 9,195
Real estate related (a) 16,179 15,459 15,123 14,809 14,945
Health care 10,153 9,810 9,944 10,567 11,713
Transportation and warehousing 7,604 7,209 7,136 7,318 7,967
Other industries 27,214 26,392 26,560 27,132 27,925
Total commercial and industrial 171,831  157,874  152,933  152,735  155,300 
Commercial real estate 34,452  34,171  34,015  36,195  37,964 
Equipment lease financing 6,240  6,216  6,130  6,257  6,376 
Total commercial 212,523 198,261 193,078 195,187 199,640
Consumer
Residential real estate 43,717  41,566  39,712  38,214  36,846 
Home equity 24,693  24,185  24,061  24,479  25,174 
Automobile 15,323  16,001  16,635  17,265  17,551 
Credit card 6,650  6,464  6,626  6,466  6,528 
Education 2,332  2,441  2,533  2,653  2,726 
Other consumer 5,562  5,539  5,727  5,966  6,239 
Total consumer 98,277  96,196  95,294  95,043  95,064 
Total loans $ 310,800  $ 294,457  $ 288,372  $ 290,230  $ 294,704 
(a)Represents loans to customers in the real estate and construction industries.


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 Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
Dollars in millions 2022 2022 2021 2021 2021 2022 2021
Allowance for loan and lease losses
Beginning balance $ 4,558  $ 4,868  $ 5,355  $ 5,730  $ 4,714  $ 4,868  $ 5,361 
Acquisition PCD reserves (59) 1,115  1,115 
Gross charge-offs:
Commercial and industrial (30) (41) (35) (46) (245) (71) (304)
Commercial real estate (5) (10) (2) (1) (28) (15) (33)
Equipment lease financing (2) (1) (4) (3) (1) (3) (6)
Residential real estate (7) (4) (4) (3) (7) (7)
Home equity (2) (4) (4) (2) (7) (6) (14)
Automobile (34) (52) (49) (33) (35) (86) (87)
Credit card (67) (68) (60) (62) (65) (135) (134)
Education (4) (4) (4) (3) (3) (8) (8)
Other consumer (51) (64) (62) (52) (41) (115) (78)
Total gross charge-offs (195) (251) (224) (206) (428) (446) (671)
Recoveries:
Commercial and industrial 15  30  20  25  29  45  43 
Commercial real estate 1  1  2  2  2  2  3 
Equipment lease financing 3  3  3  2  3  6  6 
Residential real estate 6  5  8  9  6  11  11 
Home equity 18  21  23  25  21  39  38 
Automobile 39  31  26  38  41  70  79 
Credit card 19  12  10  13  11  31  23 
Education 2  1  2  2  2  3  4 
Other consumer 9  10  6  9  7  19  12 
Total recoveries 112  114  100  125  122  226  219 
Net (charge-offs) / recoveries:
Commercial and industrial (15) (11) (15) (21) (216) (26) (261)
Commercial real estate (4) (9) 1  (26) (13) (30)
Equipment lease financing 1  2  (1) (1) 2  3 
Residential real estate 6  (2) 4  5  3  4  4 
Home equity 16  17  19  23  14  33  24 
Automobile 5  (21) (23) 5  6  (16) (8)
Credit card (48) (56) (50) (49) (54) (104) (111)
Education (2) (3) (2) (1) (1) (5) (4)
Other consumer (42) (54) (56) (43) (34) (96) (66)
Total net (charge-offs) (a) (83) (137) (124) (81) (306) (220) (452)
Provision for (recapture of) credit losses (b) (10) (172) (362) (229) 206  (182) (296)
Other (3) (1) (1) (6) 1  (4) 2 
Ending balance $ 4,462  $ 4,558  $ 4,868  $ 5,355  $ 5,730  $ 4,462  $ 5,730 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (18) $ (18) $ (16) $ (21) $ (240) $ (36) $ (291)
Consumer net charge-offs (65) (119) (108) (60) (66) (184) (161)
Total net charge-offs (a) $ (83) $ (137) $ (124) $ (81) $ (306) $ (220) $ (452)
Net charge-offs to average loans (annualized) 0.11  % 0.19  % 0.17  % 0.11  % 0.48  % 0.15  % 0.37  %
Commercial 0.03  % 0.04  % 0.03  % 0.04  % 0.55  % 0.04  % 0.34  %
Consumer 0.27  % 0.51  % 0.45  % 0.25  % 0.33  % 0.39  % 0.42  %
(a)    Amounts for the three and six months ended June 30, 2021 included $248 million attributable to BBVA, primarily related to commercial and industrial loans, which were largely the result of required purchase accounting treatment for the BBVA acquisition on June 1, 2021.
(b)    See Table 7 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 7
Allowance for Credit Losses (Unaudited) (Continued)

Table 7: Components of the Provision for (Recapture of) Credit Losses
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
In millions 2022 2022 2021 2021 2021 (a) 2022 2021 (a)
Provision for (recapture of) credit losses
Loans and leases $ (10) $ (172) $ (362) $ (229) $ 206  $ (182) $ (296)
Unfunded lending related commitments 42  (23) 16  1  92  19  15 
Investment securities 3  1  25  4  26 
Other financial assets 1  (14) 19  4  (13) 6 
Total provision for (recapture of) credit losses $ 36  $ (208) $ (327) $ (203) $ 302  $ (172) $ (249)
(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)
June 30, 2022 March 31, 2022 June 30, 2021

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 $ 1,853  $ 171,831  1.08  % $ 1,884  $ 157,874  1.19  % $ 2,282  $ 155,300  1.47  %
Commercial real estate 993  34,452  2.88  % 1,034  34,171  3.03  % 1,404  37,964  3.70  %
Equipment lease financing 91  6,240  1.46  % 85  6,216  1.37  % 126  6,376  1.98  %
Total commercial 2,937  212,523  1.38  % 3,003  198,261  1.51  % 3,812  199,640  1.91  %
Consumer
Residential real estate 36  43,717  0.08  % 25  41,566  0.06  % 63  36,846  0.17  %
Home equity 190  24,693  0.77  % 170  24,185  0.70  % 188  25,174  0.75  %
Automobile 254  15,323  1.66  % 276  16,001  1.72  % 421  17,551  2.40  %
Credit card 715  6,650  10.75  % 708  6,464  10.95  % 711  6,528  10.89  %
Education 63  2,332  2.70  % 66  2,441  2.70  % 98  2,726  3.60  %
Other consumer 267  5,562  4.80  % 310  5,539  5.60  % 437  6,239  7.00  %
Total consumer 1,525  98,277  1.55  % 1,555  96,196  1.62  % 1,918  95,064  2.02  %
Total
 4,462  $ 310,800  1.44  % 4,558  $ 294,457  1.55  % 5,730  $ 294,704  1.94  %
Allowance for unfunded lending related commitments
 681  639  645 
Allowance for credit losses
 $ 5,143  $ 5,197  $ 6,375 
Supplemental Information
Allowance for credit losses to total loans
 1.65  % 1.76  % 2.16  %
Commercial 1.68  % 1.81  % 2.18  %
Consumer 1.60  % 1.67  % 2.14  %

(a)     Excludes allowances for investment securities and other financial assets, which together totaled $163 million, $158 million and $138 million at June 30, 2022, March 31, 2022 and June 30, 2021, respectively.

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

Table 9: Nonperforming Assets by Type
June 30 March 31 December 31 September 30 June 30
Dollars in millions 2022 2022 2021 2021 2021
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers $ 151  $ 173  $ 188  $ 220  $ 206 
Manufacturing 101  70  52  62  65 
Retail/wholesale trade 87  59  50  59  71 
Real estate related (a) 59  39  64  49  78 
Health care 54  37  46  56  71 
Transportation and warehousing 30  28  18  21  18 
Technology, media & telecommunications 21  36  33  37  62 
Other industries 146  218  345  325  359 
Total commercial and industrial 649  660  796  829  930 
Commercial real estate 161  332  364  365  501 
Equipment lease financing 5  6  8  10  15 
Total commercial 815  998  1,168  1,204  1,446 
Consumer (b)
Residential real estate 457  526  517  533  503 
Home equity 556  576  596  592  626 
Automobile 175  181  183  184  191 
Credit card 6  8  7  7  7 
Other consumer 37  9  9  8  6 
Total consumer 1,231  1,300  1,312  1,324  1,333 
Total nonperforming loans (c) 2,046  2,298  2,480  2,528  2,779 
OREO and foreclosed assets 29  26  26  31  39 
Total nonperforming assets $ 2,075  $ 2,324  $ 2,506  $ 2,559  $ 2,818 
Nonperforming loans to total loans 0.66  % 0.78  % 0.86  % 0.87  % 0.94  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.67  % 0.79  % 0.87  % 0.88  % 0.96  %
Nonperforming assets to total assets 0.38  % 0.43  % 0.45  % 0.46  % 0.51  %
Allowance for loan and lease losses to nonperforming loans 218  % 198  % 196  % 212  % 206  %
(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
April 1, 2022 - January 1, 2022 - October 1, 2021 - July 1, 2021 - April 1, 2021 -
In millions June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021
Beginning balance $ 2,324  $ 2,506  $ 2,559  $ 2,818  $ 2,179 
Acquired nonperforming assets (a) 880 
New nonperforming assets 393  346  395  365  207 
Charge-offs and valuation adjustments (55) (62) (53) (71) (61)
Principal activity, including paydowns and payoffs (273) (274) (240) (333) (264)
Asset sales and transfers to loans held for sale (6) (21) (3) (30) (15)
Returned to performing status (308) (171) (152) (190) (108)
Ending balance $ 2,075  $ 2,324  $ 2,506  $ 2,559  $ 2,818 
(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)                  

Under the CARES Act credit reporting rules, 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 2021 Form 10-K included additional information on COVID-19 related loan modifications.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)
June 30 March 31 December 31 September 30 June 30
Dollars in millions 2022 2022 2021 2021 2021
Commercial
Commercial and industrial $ 99 $ 185 $ 235 $ 97 $ 72
Commercial real estate 28 68 46 68 5
Equipment lease financing 7 20 25 5 3
Total commercial 134 273 306 170 80
Consumer
Residential real estate
Non government insured 230 239 310 178 182
Government insured 68 66 69 81 88
Home equity 43 41 53 45 44
Automobile 102 109 146 114 98
Credit card 37 39 49 42 37
Education
Non government insured 5 5 5 5 5
Government insured
 39 36 38 40 41
Other consumer 38 47 35 34 31
Total consumer 562 582 705 539 526
Total $ 696 $ 855 $ 1,011 $ 709 $ 606
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.22  % 0.29  % 0.35  % 0.24  % 0.21  %
Commercial 0.06  % 0.14  % 0.16  % 0.09  % 0.04  %
Consumer 0.57  % 0.61  % 0.74  % 0.57  % 0.55  %
(a)Excludes loans held for sale.



THE PNC FINANCIAL SERVICES GROUP, INC.
Page 10
Accruing Loans Past Due (Unaudited) (Continued)

Table 12: Accruing Loans Past Due 60 to 89 Days (a)
June 30 March 31 December 31 September 30 June 30
Dollars in millions 2022 2022 2021 2021 2021
Commercial
Commercial and industrial $ 128 $ 64 $ 72 $ 50 $ 27
Commercial real estate 11 41 24 2 3
Equipment lease financing 4 1 2 4 4
Total commercial 143 106 98 56 34
Consumer
Residential real estate
Non government insured 53 47 78 53 53
Government insured 42 37 41 45 52
Home equity 14 16 18 18 17
Automobile 24 26 40 23 20
Credit card 25 28 33 27 24
Education
Non government insured
 2 3 2 3 2
Government insured
 21 21 23 23 20
Other consumer 21 26 22 15 16
Total consumer 202 204 257 207 204
Total $ 345 $ 310 $ 355 $ 263 $ 238
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.11  % 0.11  % 0.12  % 0.09  % 0.08  %
Commercial 0.07  % 0.05  % 0.05  % 0.03  % 0.02  %
Consumer 0.21  % 0.21  % 0.27  % 0.22  % 0.21  %
(a)Excludes loans held for sale.




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

Table 13: Accruing Loans Past Due 90 Days or More (a)
June 30 March 31 December 31 September 30 June 30
Dollars in millions 2022 2022 2021 2021 2021
Commercial
Commercial and industrial $ 138 $ 105 $ 132 $ 56 $ 45
Commercial real estate 7 1 11 2
Total commercial 138 112 133 67 47
Consumer
Residential real estate
Non government insured 20 41 59 33 44
Government insured 182 232 269 268 297
Automobile 6 8 14 4 3
Credit card 54 62 62 53 59
Education
Non government insured 2 2 2 1 1
Government insured
 56 62 63 60 66
Other consumer 12 15 17 11 14
Total consumer 332 422 486 430 484
Total $ 470 $ 534 $ 619 $ 497 $ 531
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.15  % 0.18  % 0.21  % 0.17  % 0.18  %
Commercial 0.06  % 0.06  % 0.07  % 0.03  % 0.02  %
Consumer 0.34  % 0.44  % 0.51  % 0.45  % 0.51  %
Total accruing loans past due $ 1,511 $ 1,699 $ 1,985 $ 1,469 $ 1,375
Commercial $ 415 $ 491 $ 537 $ 293 $ 161
Consumer $ 1,096 $ 1,208 $ 1,448 $ 1,176 $ 1,214
Total accruing loans past due to total loans 0.49  % 0.58  % 0.69  % 0.51  % 0.47  %
Commercial 0.20  % 0.25  % 0.28  % 0.15  % 0.08  %
Consumer 1.12  % 1.26  % 1.52  % 1.24  % 1.28  %
(a)Excludes loans held for sale.




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 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 provides wholesale money transfer processing capabilities between the U.S., Mexico and other countries primarily in Central America and South America. Capital markets 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 their 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, retirement plan fiduciary investment services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 14: Period End Employees
June 30 March 31 December 31 September 30 June 30
2022 2022 2021 2021 2021
Full-time employees
Retail Banking 33,565  33,293  32,563  33,188  33,471 
Other full-time employees 25,390  25,037  25,105  25,442  25,512 
Total full-time employees 58,955  58,330  57,668  58,630  58,983 
Part-time employees
Retail Banking 1,712  1,670  1,669  1,616  1,821 
Other part-time employees 460  82  89  94  431 
Total part-time employees 2,172  1,752  1,758  1,710  2,252 
Total 61,127  60,082  59,426  60,340  61,235 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 13
Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
In millions 2022 2022 2021 2021 2021 2022 2021
Income
Retail Banking $ 322  $ 340  $ 362  $ 447  $ 232  $ 662  $ 839 
Corporate & Institutional Banking 1,003  956  1,334  1,123  809  1,959  1,867 
Asset Management Group 86  102  106  114  87  188  186 
Other 70  10  (509) (210) (37) 80  15 
Net income excluding noncontrolling
  interests		 $ 1,481  $ 1,408  $ 1,293  $ 1,474  $ 1,091  $ 2,889  $ 2,907 
  
Revenue
Retail Banking $ 2,410  $ 2,276  $ 2,408  $ 2,375  $ 2,203  $ 4,686  $ 4,219 
Corporate & Institutional Banking 2,221  1,964  2,281  2,306  1,959  4,185  3,767 
Asset Management Group 387  386  388  397  356  773  678 
Other 98  66  50  119  149  164  223 
Total revenue $ 5,116  $ 4,692  $ 5,127  $ 5,197  $ 4,667  $ 9,808  $ 8,887 

(a)Our business information is presented based on our internal management reporting practices. Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 14
Table 16: Retail Banking (Unaudited) (a)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
Dollars in millions 2022 2022 2021 2021 2021 2022 2021
Income Statement
Net interest income $ 1,662  $ 1,531  $ 1,634  $ 1,713  $ 1,497  $ 3,193  $ 2,859 
Noninterest income 748  745  774  662  706  1,493  1,360 
Total revenue 2,410  2,276  2,408  2,375  2,203  4,686  4,219 
Provision for (recapture of) credit losses 55  (81) 55  (113) 214  (26) (43)
Noninterest expense 1,913  1,892  1,874  1,889  1,677  3,805  3,153 
Pretax earnings 442  465  479  599  312  907  1,109 
Income taxes 105  109  112  140  73  214  256 
Noncontrolling interests 15  16  5  12  7  31  14 
Earnings $ 322  $ 340  $ 362  $ 447  $ 232  $ 662  $ 839 
Average Balance Sheet
Loans held for sale $ 957  $ 1,183  $ 1,425  $ 1,583  $ 1,405  $ 1,070  $ 1,150 
Loans
Consumer
Residential real estate $ 33,240  $ 31,528  $ 30,888  $ 30,702  $ 21,653  $ 32,389  $ 19,573 
Home equity 22,886  22,458  22,572  23,047  22,080  22,673  21,957 
Automobile 15,566  16,274  16,944  17,377  14,888  15,918  14,392 
Credit card 6,508  6,401  6,513  6,484  5,900  6,455  5,860 
Education 2,410  2,532  2,620  2,712  2,812  2,470  2,875 
Other consumer 2,173  2,348  2,612  2,892  2,175  2,261  2,036 
Total consumer 82,783  81,541  82,149  83,214  69,508  82,166  66,693 
Commercial 11,044  11,610  12,844  15,895  14,796  11,325  14,272 
Total loans $ 93,827  $ 93,151  $ 94,993  $ 99,109  $ 84,304  $ 93,491  $ 80,965 
Total assets $ 113,068  $ 111,754  $ 113,782  $ 117,394  $ 100,948  $ 112,415  $ 96,942 
Deposits
Noninterest-bearing $ 65,599  $ 64,058  $ 65,510  $ 65,985  $ 54,260  $ 64,833  $ 49,578 
Interest-bearing 202,801  201,021  197,312  196,006  178,946  201,916  171,211 
Total deposits $ 268,400  $ 265,079  $ 262,822  $ 261,991  $ 233,206  $ 266,749  $ 220,789 
Performance Ratios
Return on average assets 1.14  % 1.23  % 1.26  % 1.51  % 0.92  % 1.19  % 1.75  %
Noninterest income to total revenue 31  % 33  % 32  % 28  % 32  % 32  % 32  %
Efficiency 79  % 83  % 78  % 80  % 76  % 81  % 75  %
(a)See note (a) on page 13.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 15
Retail Banking (Unaudited) (Continued)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
Dollars in millions, except as noted 2022 2022 2021 2021 2021 2022 2021
Supplemental Noninterest Income Information
Asset management and brokerage $ 135  $ 134  $ 131  $ 122  $ 110  $ 269  $ 212 
Card and cash management $ 351  $ 308  $ 347  $ 346  $ 324  $ 659  $ 588 
Lending and deposit services $ 167  $ 164  $ 157  $ 180  $ 148  $ 331  $ 282 
Residential and commercial mortgage $ 71  $ 99  $ 101  $ 147  $ 103  $ 170  $ 208 
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 145  $ 135  $ 133  $ 139  $ 145 
Serviced portfolio acquisitions $ 15  $ 6  $ 2  $ 2  $ 33  $ 21  $ 40 
MSR asset value (b) $ 1.6  $ 1.3  $ 1.1  $ 1.1  $ 1.1 
MSR capitalization value (in basis points) (b) 112  98  81  81  77 
Servicing income: (in millions)
Servicing fees, net (c) $ 36  $ 33  $ 14  $ 18  $ (3) $ 69  $ 2 
Mortgage servicing rights valuation, net of
   economic hedge		 $ 13  $ 2  $ 2  $ 24  $ 24  $ 15  $ 38 
Residential mortgage loan statistics
Loan origination volume (in billions) $ 4.8  $ 5.1  $ 6.6  $ 7.4  $ 6.5  $ 9.9  $ 10.8 
Loan sale margin percentage 1.88  % 2.45  % 2.55  % 3.01  % 2.67  % 2.18  % 2.92  %
Percentage of originations represented by:
Purchase volume (d) 74  % 42  % 38  % 47  % 48  % 57  % 43  %
Refinance volume 26  % 58  % 62  % 53  % 52  % 43  % 57  %
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e) 64  % 64  % 64  % 66  % 65  % 64  % 66  %
Digital consumer customers (f) 78  % 78  % 79  % 80  % 80  % 78  % 80  %
Credit-related statistics
Nonperforming assets $ 1,088  $ 1,168  $ 1,220  $ 1,220  $ 1,245 
Net charge-offs - loans and leases $ 88  $ 141  $ 124  $ 82  $ 79  $ 229  $ 187 
Other statistics
ATMs 9,301  9,502  9,523  9,572  9,636 
Branches (g) 2,535  2,591  2,629  2,712  2,724 
Brokerage account client assets (in billions) (h) $ 68  $ 74  $ 78  $ 76  $ 83 

(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 six 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)Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.
(f)Represents consumer checking relationships that process the majority of their transactions through non-teller channels.
(g)Excludes stand-alone mortgage offices and satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
(h)Includes cash and money market balances.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 16
Table 17: Corporate & Institutional Banking (Unaudited) (a)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
Dollars in millions 2022 2022 2021 2021 2021 2022 2021
Income Statement
Net interest income $ 1,253  $ 1,160  $ 1,228  $ 1,250  $ 1,092  $ 2,413  $ 2,093 
Noninterest income 968  804  1,053  1,056  867  1,772  1,674 
Total revenue 2,221  1,964  2,281  2,306  1,959  4,185  3,767 
Provision for (recapture of) credit losses (17) (118) (369) (99) 104  (135) (178)
Noninterest expense 934  837  975  980  813  1,771  1,524 
Pretax earnings 1,304  1,245  1,675  1,425  1,042  2,549  2,421 
Income taxes 298  285  337  299  229  583  547 
Noncontrolling interests 3  4  4  3  4  7  7 
Earnings $ 1,003  $ 956  $ 1,334  $ 1,123  $ 809  $ 1,959  $ 1,867 
Average Balance Sheet
Loans held for sale $ 490  $ 628  $ 539  $ 541  $ 564  $ 559  $ 627 
Loans
Commercial
Commercial and industrial $ 153,948  $ 141,622  $ 137,079  $ 134,128  $ 121,232  $ 147,819  $ 118,106 
Commercial real estate 32,844  32,433  33,559  35,368  30,118  32,640  28,658 
Equipment lease financing 6,201  6,099  6,184  6,300  6,332  6,150  6,332 
Total commercial 192,993  180,154  176,822  175,796  157,682  186,609  153,096 
Consumer 14  8  12  20  13  11  10 
Total loans $ 193,007  $ 180,162  $ 176,834  $ 175,816  $ 157,695  $ 186,620  $ 153,106 
Total assets $ 219,513  $ 200,724  $ 198,874  $ 202,268  $ 181,770  $ 210,171  $ 176,182 
Deposits
Noninterest-bearing $ 81,028  $ 86,178  $ 88,023  $ 85,869  $ 75,570  $ 83,589  $ 71,142 
Interest-bearing 65,151  68,429  72,397  77,247  69,443  66,780  69,555 
Total deposits $ 146,179  $ 154,607  $ 160,420  $ 163,116  $ 145,013  $ 150,369  $ 140,697 
Performance Ratios
Return on average assets 1.83  % 1.93  % 2.66  % 2.20  % 1.79  % 1.88  % 2.14  %
Noninterest income to total revenue 44  % 41  % 46  % 46  % 44  % 42  % 44  %
Efficiency 42  % 43  % 43  % 42  % 42  % 42  % 40  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 659  $ 546  $ 560  $ 592  $ 523  $ 1,205  $ 1,017 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 20  $ 16  $ 42  $ 44  $ 29  $ 36  $ 59 
Commercial mortgage loan servicing income (d) 70  68  90  88  66  138  156 
Commercial mortgage servicing rights valuation,
   net of economic hedge		 33  13  16  14  33  46  50 
Total $ 123  $ 97  $ 148  $ 146  $ 128  $ 220  $ 265 
MSR asset value (e) $ 988  $ 886  $ 740  $ 703  $ 682 
Average loans by C&IB business
Corporate Banking $ 103,595  $ 92,503  $ 87,284  $ 85,208  $ 77,645  $ 98,079  $ 75,806 
Real Estate 44,202  43,213  44,787  47,335  41,188  43,710  39,799 
Business Credit 28,246  26,535  26,065  25,540  22,965  27,395  22,263 
Commercial Banking 9,459  10,045  10,924  13,458  12,513  9,751  11,919 
Other 7,505  7,866  7,774  4,275  3,384  7,685  3,319 
Total average loans $ 193,007  $ 180,162  $ 176,834  $ 175,816  $ 157,695  $ 186,620  $ 153,106 
Credit-related statistics
Nonperforming assets (e) $ 674  $ 866  $ 1,007  $ 1,061  $ 1,274 
Net charge-offs (recoveries) - loans and leases $ 11  $ (1) $ (1) $ 13  $ 233  $ 10  $ 277 

(a)See note (a) on page 13.
(b)Amounts are reported in net interest income and noninterest income.
(c)Represents commercial mortgage banking income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, origination 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 from loan servicing, net of reduction in commercial mortgage servicing rights due to ammortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
(e)Presented as of period end.

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Table 18: Asset Management Group (Unaudited) (a)
Three months ended Six months ended
June 30 March 31 December 31 September 30 June 30 June 30 June 30
Dollars in millions, except as noted 2022 2022 2021 2021 2021 2022 2021
Income Statement
Net interest income $ 153  $ 138  $ 130  $ 141  $ 112  $ 291  $ 205 
Noninterest income 234  248  258  256  244  482  473 
Total revenue 387  386  388  397  356  773  678 
Provision for (recapture of) credit losses 5  2  (15) (6) 23  7  14 
Noninterest expense 270  251  265  255  219  521  421 
Pretax earnings 112  133  138  148  114  245  243 
Income taxes 26  31  32  34  27  57  57 
Earnings $ 86  $ 102  $ 106  $ 114  $ 87  $ 188  $ 186 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 7,835  $ 6,989  $ 6,295  $ 5,727  $ 4,439  $ 7,414  $ 4,040 
Other consumer 4,633  4,541  4,535  4,544  4,190  4,587  4,099 
Total consumer 12,468  11,530  10,830  10,271  8,629  12,001  8,139 
Commercial 1,560  1,848  2,093  2,693  1,415  1,704  1,087 
Total loans $ 14,028  $ 13,378  $ 12,923  $ 12,964  $ 10,044  $ 13,705  $ 9,226 
Total assets $ 14,449  $ 13,801  $ 13,317  $ 13,805  $ 10,640  $ 14,126  $ 9,761 
Deposits
Noninterest-bearing $ 2,824  $ 3,458  $ 3,025  $ 4,332  $ 2,537  $ 3,140  $ 2,148 
Interest-bearing 28,839  29,830  26,318  24,984  20,894  29,331  19,865 
Total deposits $ 31,663  $ 33,288  $ 29,343  $ 29,316  $ 23,431  $ 32,471  $ 22,013 
Performance Ratios
Return on average assets 2.39  % 3.00  % 3.16  % 3.28  % 3.28  % 2.68  % 3.84  %
Noninterest income to total revenue 60  % 64  % 66  % 64  % 69  % 62  % 70  %
Efficiency 70  % 65  % 68  % 64  % 62  % 67  % 62  %
Other Information
Nonperforming assets (b) $ 114  $ 72  $ 62  $ 80  $ 85 
Net charge-offs (recoveries) - loans and leases $ (1) $ 2  $ 1  $ (1) $ 2  $ 1  $ 2 
Brokerage account client assets (in billions) (b) $ 4  $ 5  $ 5  $ 5  $ 5 
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management $ 167  $ 182  $ 192  $ 183  $ 183 
Nondiscretionary client assets under administration 153  165  175  170  172 
Total $ 320  $ 347  $ 367  $ 353  $ 355 
Discretionary client assets under management
PNC Private Bank $ 103  $ 115  $ 123  $ 117  $ 119 
Institutional Asset Management 64  67  69  66  64 
Total $ 167  $ 182  $ 192  $ 183  $ 183 
(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.