Form: 8-K

Current report filing

January 18, 2023

Documents



Exhibit 99.2

pncbanklogoa18.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
FOURTH QUARTER 2022
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
FOURTH 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 January 18, 2023. 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 third quarter 2022 Form 10-Q. Additionally, in the fourth quarter of 2022, PNC updated the name of the noninterest income line item "capital markets related" to "capital markets and advisory." This update did not impact the components of the category. All periods presented herein reflect these changes.

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. On October 12, 2021, PNC converted approximately 2.6 million
customers, 9,000 employees and over 600 branches across seven states. Our results of operations and balance sheets for all periods presented in this Financial Supplement reflect the benefit of BBVA’s acquired businesses for the period since the acquisition closed on June 1, 2021.





THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Fourth Quarter 2022 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
14-15
17
18


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 2022 2022 2022 2022 2021 2022 2021
Interest Income
Loans $ 3,860  $ 3,138  $ 2,504  $ 2,293  $ 2,414  $ 11,795  $ 9,007 
Investment securities 836  715  631  544  484  2,726  1,834 
Other 413  279  146  77  77  915  293 
Total interest income 5,109  4,132  3,281  2,914  2,975  15,436  11,134 
Interest Expense
Deposits 812  340  88  27  27  1,267  126 
Borrowed funds 613  317  142  83  86  1,155  361 
Total interest expense 1,425  657  230  110  113  2,422  487 
Net interest income 3,684  3,475  3,051  2,804  2,862  13,014  10,647 
Noninterest Income
Asset management and brokerage 345  357  365  377  385  1,444  1,438 
Capital markets and advisory 336  299  409  252  460  1,296  1,577 
Card and cash management 671  671  671  620  646  2,633  2,398 
Lending and deposit services 296  287  282  269  273  1,134  1,102 
Residential and commercial mortgage 184  143  161  159  209  647  850 
Other (a) 247  317  177  211  292  952  1,199 
Total noninterest income 2,079  2,074  2,065  1,888  2,265  8,106  8,564 
Total revenue 5,763  5,549  5,116  4,692  5,127  21,120  19,211 
Provision For (Recapture of) Credit Losses 408  241  36  (208) (327) 477  (779)
Noninterest Expense
Personnel 1,943  1,805  1,779  1,717  2,038  7,244  7,141 
Occupancy 247  241  246  258  260  992  940 
Equipment 369  344  351  331  437  1,395  1,411 
Marketing 106  93  95  61  97  355  319 
Other 809  797  773  805  959  3,184  3,191 
Total noninterest expense 3,474  3,280  3,244  3,172  3,791  13,170  13,002 
Income before income taxes and noncontrolling interests 1,881  2,028  1,836  1,728  1,663  7,473  6,988 
Income taxes 333  388  340  299  357  1,360  1,263 
Net income 1,548  1,640  1,496  1,429  1,306  6,113  5,725 
Less: Net income attributable to noncontrolling interests 20  16  15  21  13  72  51 
Preferred stock dividends (b) 120  65  71  45  71  301  233 
Preferred stock discount accretion and
    redemptions		 1  1  1  2  2  5  5 
Net income attributable to common shareholders $ 1,407  $ 1,558  $ 1,409  $ 1,361  $ 1,220  $ 5,735  $ 5,436 
Earnings Per Common Share
Basic $ 3.47  $ 3.78  $ 3.39  $ 3.23  $ 2.87  $ 13.86  $ 12.71 
Diluted $ 3.47  $ 3.78  $ 3.39  $ 3.23  $ 2.86  $ 13.85  $ 12.70 
Average Common Shares Outstanding
Basic 404  410  414  420  424  412  426 
Diluted 404  410  414  420  424  412  426 
Efficiency 60  % 59  % 63  % 68  % 74  % 62  % 68  %
Noninterest income to total revenue 36  % 37  % 40  % 40  % 44  % 38  % 45  %
Effective tax rate from continuing operations (c) 17.7  % 19.1  % 18.5  % 17.3  % 21.5  % 18.2  % 18.1  %
(a)Includes net gains (losses) on sales of securities of $(3) million, less than $1 million, less than $(1) million, $(4) million and $14 million for the quarters ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively, and $(7) million and $64 million for the twelve months ended December 31, 2022 and December 31, 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)
December 31 September 30 June 30 March 31 December 31
In millions, except par value 2022 2022 2022 2022 2021
Assets
Cash and due from banks $ 7,043  $ 6,548  $ 8,582  $ 7,572  $ 8,004 
Interest-earning deposits with banks (a) 27,320  40,278  28,404  48,776  74,250 
Loans held for sale (b) 1,010  1,126  1,191  1,506  2,231 
Investment securities – available for sale 44,159  45,798  52,984  112,313  131,536 
Investment securities – held to maturity 95,175  90,653  79,748  20,098  1,426 
Loans (b) 326,025  315,400  310,800  294,457  288,372 
Allowance for loan and lease losses (4,741) (4,581) (4,462) (4,558) (4,868)
Net loans 321,284  310,819  306,338  289,899  283,504 
Equity investments 8,437  8,130  8,441  7,798  8,180 
Mortgage servicing rights 3,423  3,206  2,608  2,208  1,818 
Goodwill 10,987  10,987  10,916  10,916  10,916 
Other (b) 38,425  41,932  41,574  40,160  35,326 
Total assets $ 557,263  $ 559,477  $ 540,786  $ 541,246  $ 557,191 
Liabilities
Deposits
Noninterest-bearing $ 124,486  $ 138,423  $ 146,438  $ 150,798  $ 155,175 
Interest-bearing 311,796  299,771  294,373  299,399  302,103 
Total deposits 436,282  438,194  440,811  450,197  457,278 
Borrowed funds
Federal Home Loan Bank borrowings 32,075  30,075  10,000 
Senior debt 16,657  13,357  14,358  16,206  20,661 
Subordinated debt 6,307  7,286  7,487  6,766  6,996 
Other (b) 3,674  3,915  4,139  3,599  3,127 
Total borrowed funds 58,713  54,633  35,984  26,571  30,784 
Allowance for unfunded lending related commitments 694  682  681  639  662 
Accrued expenses and other liabilities 15,762  19,245  15,622  14,623  12,741 
Total liabilities 511,451  512,754  493,098  492,030  501,465 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares 2,714  2,714  2,714  2,713  2,713 
Capital surplus 18,376  19,810  18,531  17,487  17,457 
Retained earnings 53,572  52,777  51,841  51,058  50,228 
Accumulated other comprehensive income (loss) (10,172) (10,486) (8,358) (5,731) 409 
Common stock held in treasury at cost: 142, 139, 132, 128, and 123 shares (18,716) (18,127) (17,076) (16,346) (15,112)
Total shareholders’ equity 45,774  46,688  47,652  49,181  55,695 
Noncontrolling interests 38  35  36  35  31 
Total equity 45,812  46,723  47,688  49,216  55,726 
Total liabilities and equity $ 557,263  $ 559,477  $ 540,786  $ 541,246  $ 557,191 
(a)Amounts include balances held with the Federal Reserve Bank of $26.9 billion, $39.8 billion, $28.0 billion, $48.4 billion and $73.8 billion as of December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our 2022 Form 10-Qs included, and our 2022 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) (b)
Three months ended Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2022 2022 2022 2022 2021 2022 2021
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 31,818  $ 32,500  $ 37,285  $ 67,498  $ 64,521  $ 42,151  $ 57,325 
Non-agency 714  748 902 1,007 974 842 1,100 
Commercial mortgage-backed 3,377  3,489 4,362 5,229 5,538 4,107 6,093 
Asset-backed 105 110 2,388 6,225 6,206 2,184 5,745 
U.S. Treasury and government agencies 10,345 11,789 17,480 47,468 44,415 21,642 34,394 
Other 3,370 3,506 4,200 4,876 4,741 3,982 4,852 
Total securities available for sale 49,729 52,142 66,617 132,303 126,395 74,908 109,509
Securities held to maturity
Residential mortgage-backed 44,184  39,329  33,086  106  29,325   
Commercial mortgage-backed 2,323  2,069  1,175  1,400   
Asset-backed 6,995  6,571  4,119  4,446  
U.S. Treasury and government agencies 36,441 34,279  28,167 919 812 25,074 805 
Other 3,218 2,600 1,560 569 642 1,996 660 
Total securities held to maturity 93,161 84,848 68,107 1,594 1,454 62,241 1,465
Total investment securities 142,890 136,990 134,724 133,897 127,849 137,149 110,974
Loans
Commercial and industrial 179,111 172,788 166,968 155,481 152,355 168,663 143,389 
Commercial real estate 36,181 35,140 34,467 34,004 35,256 34,954 33,159 
Equipment lease financing 6,275 6,202 6,200 6,099 6,183 6,196 6,286 
Consumer 54,809 54,563 54,551 54,965 56,244 54,721 54,338 
Residential real estate 45,499 44,333 42,604 40,152 38,872 43,165 31,524 
Total loans 321,875 313,026 304,790 290,701 288,910 307,699 268,696
Interest-earning deposits with banks (c) 30,395 31,892 39,689 62,540 75,377 41,050 79,869 
Other interest-earning assets 9,690 9,560 9,935 9,417 9,113 9,651 8,539 
Total interest-earning assets 504,850 491,468 489,138 496,555 501,249 495,549 468,078
Noninterest-earning assets 52,356 55,629 57,740 53,541 58,123 55,103 55,088 
Total assets $ 557,206  $ 547,097  $ 546,878  $ 550,096  $ 559,372  $ 550,652  $ 523,166 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 63,944  $ 60,934  $ 58,019  $ 62,596  $ 65,214  $ 61,376  $ 68,124 
Demand 122,501 120,358 119,636 112,372 108,345 118,749 101,471 
Savings 102,020 106,761 109,063 108,532 104,644 106,577 91,194 
Time deposits 12,982 10,020 10,378 16,043 18,029 12,340 18,439 
Total interest-bearing deposits 301,447 298,073 297,096 299,543 296,232 299,042 279,228
Borrowed funds
Federal Home Loan Bank borrowings 30,640 16,708 6,978  13,674 661 
Senior debt 16,312 14,597 16,172 18,015 21,581 16,265 22,390 
Subordinated debt 6,933 7,614 6,998 6,773 6,779 7,081 6,432 
Other 5,346 5,342 5,508 5,524 5,987 5,430 5,025 
Total borrowed funds 59,231 44,261 35,656 30,312 34,347 42,450 34,508
Total interest-bearing liabilities 360,678 342,334 332,752 329,855 330,579 341,492 313,736
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 133,461 141,167 149,432 153,726 156,549 144,382 139,683 
Accrued expenses and other liabilities 17,461 15,699 17,116 14,058 16,818 16,414 15,299 
Equity 45,606 47,897 47,578 52,457 55,426 48,364 54,448 
Total liabilities and equity $ 557,206  $ 547,097  $ 546,878  $ 550,096  $ 559,372  $ 550,652  $ 523,166 
(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 Cleveland of $30.0 billion, $31.5 billion, $39.3 billion, $62.3 billion and $75.1 billion for the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, and $40.7 billion and $79.6 billion for the twelve months ended December 31, 2022 and December 31, 2021, 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
2022 2022 2022 2022 2021 2022 2021
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 2.54  % 2.36  % 2.17  % 1.73  % 1.47  % 2.11  % 1.54  %
Non-agency 7.85  % 7.62  % 7.56  % 7.53  % 7.36  % 7.60  % 7.64  %
Commercial mortgage-backed 2.75  % 2.70  % 2.45  % 2.36  % 2.37  % 2.53  % 2.45  %
Asset-backed 11.98  % 6.31  % 1.84  % 1.35  % 1.48  % 1.69  % 1.72  %
U.S. Treasury and government agencies 1.96  % 1.73  % 1.60  % 1.18  % 1.17  % 1.45  % 1.30  %
Other 2.39  % 2.47  % 2.59  % 2.73  % 2.77  % 2.56  % 2.97  %
Total securities available for sale 2.52  % 2.33  % 2.13  % 1.62  % 1.50  % 2.02  % 1.65  %
Securities held to maturity
Residential mortgage-backed 2.60  % 2.30  % 1.98  % 2.31  %
Commercial mortgage-backed 4.57  % 3.50  % 2.30  % 3.64  %
Asset-backed 3.44  % 2.58  % 1.92  % 2.74  %
U.S. Treasury and government agencies 1.30  % 1.19  % 1.05  % 2.61  % 2.89  % 1.20  % 2.86  %
Other 4.47  % 4.10  % 4.21  % 4.17  % 4.20  % 4.31  % 4.09  %
Total securities held to maturity 2.27  % 1.96  % 1.65  % 2.99  % 3.47  % 1.99  % 3.41  %
Total investment securities 2.36  % 2.10  % 1.89  % 1.64  % 1.52  % 2.00  % 1.67  %
Loans
Commercial and industrial 4.70  % 3.69  % 2.90  % 2.75  % 2.90  % 3.60  % 2.92  %
Commercial real estate 5.28  % 4.27  % 3.15  % 2.79  % 2.86  % 3.97  % 2.99  %
Equipment lease financing 4.18  % 3.85  % 3.62  % 3.74  % 3.81  % 3.84  % 3.82  %
Consumer 5.88  % 5.32  % 4.68  % 4.69  % 4.71  % 5.14  % 4.79  %
Residential real estate 3.28  % 3.21  % 3.11  % 3.10  % 3.26  % 3.16  % 3.32  %
Total loans 4.75  % 3.98  % 3.29  % 3.19  % 3.32  % 3.86  % 3.37  %
Interest-earning deposits with banks 3.76  % 2.32  % 0.79  % 0.19  % 0.15  % 1.41  % 0.13  %
Other interest-earning assets 5.20  % 3.94  % 2.76  % 2.07  % 2.14  % 3.50  % 2.23  %
Total yield on interest-earning assets 4.02  % 3.35  % 2.69  % 2.37  % 2.36  % 3.14  % 2.39  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 1.75  % 0.85  % 0.19  % 0.03  % 0.02  % 0.72  % 0.03  %
Demand 1.14  % 0.59  % 0.15  % 0.02  % 0.02  % 0.49  % 0.03  %
Savings 0.50  % 0.09  % 0.04  % 0.04  % 0.04  % 0.17  % 0.05  %
Time deposits 1.45  % 0.26  % 0.18  % 0.13  % 0.11  % 0.52  % 0.18  %
Total interest-bearing deposits 1.07  % 0.45  % 0.12  % 0.04  % 0.04  % 0.42  % 0.05  %
Borrowed funds
Federal Home Loan Bank borrowings 3.92  % 2.60  % 1.24  % 3.22  % 0.45  %
Senior debt 4.30  % 2.96  % 1.61  % 1.02  % 0.94  % 2.47  % 1.00  %
Subordinated debt 4.79  % 3.43  % 1.94  % 1.40  % 1.28  % 2.91  % 1.34  %
Other
3.24  % 2.20  % 1.46  % 0.97  % 0.79  % 1.99  % 0.96  %
Total borrowed funds 4.07  % 2.81  % 1.58  % 1.10  % 0.98  % 2.72  % 1.05  %
Total rate on interest-bearing liabilities 1.55  % 0.75  % 0.27  % 0.13  % 0.13  % 0.71  % 0.16  %
Interest rate spread 2.47  % 2.60  % 2.42  % 2.24  % 2.23  % 2.43  % 2.23  %
Benefit from use of noninterest-bearing sources (b) 0.45  % 0.22  % 0.08  % 0.04  % 0.04  % 0.22  % 0.06  %
Net interest margin 2.92  % 2.82  % 2.50  % 2.28  % 2.27  % 2.65  % 2.29  %
(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, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021 were $36 million, $29 million, $25 million, $22 million and $22 million, respectively. The taxable-equivalent adjustments to net interest income for the twelve months ended December 31, 2022 and December 31, 2021 were $112 million and $74 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 2022 2022 2022 2022 2021
Commercial
Commercial and industrial
Manufacturing $ 30,845  $ 28,629  $ 27,179  $ 25,035  $ 22,597 
Retail/wholesale trade 29,176 27,532 26,475 25,027 22,803
Service providers 23,548 22,043 21,184 20,584 20,750
Financial services 21,320 21,590 19,594 17,674 17,950
Real estate related (a) 17,780 17,513 16,179 15,459 15,123
Technology, media & telecommunications 11,845 11,366 16,249 10,684 10,070
Health care 10,649 10,420 10,153 9,810 9,944
Transportation and warehousing 7,858 7,977 7,604 7,209 7,136
Other industries 29,198 26,743 27,214 26,392 26,560
Total commercial and industrial 182,219  173,813  171,831  157,874  152,933 
Commercial real estate 36,316  35,592  34,452  34,171  34,015 
Equipment lease financing 6,514  6,192  6,240  6,216  6,130 
Total commercial 225,049 215,597 212,523 198,261 193,078
Consumer
Residential real estate 45,889  45,057  43,717  41,566  39,712 
Home equity 25,983  25,367  24,693  24,185  24,061 
Automobile 14,836  15,025  15,323  16,001  16,635 
Credit card 7,069  6,774  6,650  6,464  6,626 
Education 2,173  2,287  2,332  2,441  2,533 
Other consumer 5,026  5,293  5,562  5,539  5,727 
Total consumer 100,976  99,803  98,277  96,196  95,294 
Total loans $ 326,025  $ 315,400  $ 310,800  $ 294,457  $ 288,372 
(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 Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2022 2022 2022 2022 2021 2022 2021
Allowance for loan and lease losses
Beginning balance $ 4,581  $ 4,462  $ 4,558  $ 4,868  $ 5,355  $ 4,868  $ 5,361 
Acquisition PCD reserves 1,056 
Gross charge-offs:
Commercial and industrial (121) (65) (30) (41) (35) (257) (385)
Commercial real estate (22) (7) (5) (10) (2) (44) (36)
Equipment lease financing (2) (1) (2) (1) (4) (6) (13)
Residential real estate (2) (2)   (7) (4) (11) (15)
Home equity (6) (3) (2) (4) (4) (15) (20)
Automobile (34) (32) (34) (52) (49) (152) (169)
Credit card (62) (59) (67) (68) (60) (256) (256)
Education (4) (4) (4) (4) (4) (16) (15)
Other consumer (64) (49) (51) (64) (62) (228) (192)
Total gross charge-offs (317) (222) (195) (251) (224) (985) (1,101)
Recoveries:
Commercial and industrial 33  23  15  30  20  101  88 
Commercial real estate 2  1  1  1  2  5  7 
Equipment lease financing 1  1  3  3  3  8  11 
Residential real estate 2  4  6  5  8  17  28 
Home equity 13  19  18  21  23  71  86 
Automobile 24  30  39  31  26  124  143 
Credit card 8  12  19  12  10  51  46 
Education 1  1  2  1  2  5  8 
Other consumer 9  12  9  10  6  40  27 
Total recoveries 93  103  112  114  100  422  444 
Net (charge-offs) / recoveries:
Commercial and industrial (88) (42) (15) (11) (15) (156) (297)
Commercial real estate (20) (6) (4) (9) (39) (29)
Equipment lease financing (1) 1  2  (1) 2  (2)
Residential real estate 2  6  (2) 4  6  13 
Home equity 7  16  16  17  19  56  66 
Automobile (10) (2) 5  (21) (23) (28) (26)
Credit card (54) (47) (48) (56) (50) (205) (210)
Education (3) (3) (2) (3) (2) (11) (7)
Other consumer (55) (37) (42) (54) (56) (188) (165)
Total net (charge-offs) (a) (224) (119) (83) (137) (124) (563) (657)
Provision for (recapture of) credit losses (b) 380  241  (10) (172) (362) 439  (887)
Other 4  (3) (3) (1) (1) (3) (5)
Ending balance $ 4,741  $ 4,581  $ 4,462  $ 4,558  $ 4,868  $ 4,741  $ 4,868 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (109) $ (48) $ (18) $ (18) $ (16) $ (193) $ (328)
Consumer net charge-offs (115) (71) (65) (119) (108) (370) (329)
Total net charge-offs (a) $ (224) $ (119) $ (83) $ (137) $ (124) $ (563) $ (657)
Net charge-offs to average loans (c) 0.28  % 0.15  % 0.11  % 0.19  % 0.17  % 0.18  % 0.24  %
Commercial 0.20  % 0.09  % 0.03  % 0.04  % 0.03  % 0.09  % 0.18  %
Consumer 0.45  % 0.28  % 0.27  % 0.51  % 0.45  % 0.38  % 0.38  %
(a)Amounts for the year ended December 31, 2021 included charge-offs 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.
(c)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 2022 2022 2022 2022 2021 2022 2021 (a)
Provision for (recapture of) credit losses
Loans and leases $ 380  $ 241  $ (10) $ (172) $ (362) $ 439  $ (887)
Unfunded lending related commitments 12  1  42  (23) 16  32  32 
Investment securities 10  3  3  1  17  17  51 
Other financial assets 6  (4) 1  (14) 19  (11) 25 
Total provision for (recapture of) credit losses $ 408  $ 241  $ 36  $ (208) $ (327) $ 477  $ (779)
(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, 2022 September 30, 2022 December 31, 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 $ 1,957  $ 182,219  1.07  % $ 1,974  $ 173,813  1.14  % $ 1,879  $ 152,933  1.23  %
Commercial real estate 1,047  36,316  2.88  % 994  35,592  2.79  % 1,216  34,015  3.57  %
Equipment lease financing 110  6,514  1.69  % 93  6,192  1.50  % 90  6,130  1.47  %
Total commercial 3,114  225,049  1.38  % 3,061  215,597  1.42  % 3,185  193,078  1.65  %
Consumer
Residential real estate 92  45,889  0.20  % 50  45,057  0.11  % 21  39,712  0.05  %
Home equity 274  25,983  1.05  % 215  25,367  0.85  % 149  24,061  0.62  %
Automobile 226  14,836  1.52  % 214  15,025  1.42  % 372  16,635  2.24  %
Credit card 748  7,069  10.58  % 732  6,774  10.81  % 712  6,626  10.75  %
Education 63  2,173  2.90  % 64  2,287  2.80  % 71  2,533  2.80  %
Other consumer 224  5,026  4.46  % 245  5,293  4.63  % 358  5,727  6.25  %
Total consumer 1,627  100,976  1.61  % 1,520  99,803  1.52  % 1,683  95,294  1.77  %
Total
 4,741  $ 326,025  1.45  % 4,581  $ 315,400  1.45  % 4,868  $ 288,372  1.69  %
Allowance for unfunded lending related commitments
 694  682  662 
Allowance for credit losses
 $ 5,435  $ 5,263  $ 5,530 
Supplemental Information
Allowance for credit losses to total loans
 1.67  % 1.67  % 1.92  %
Commercial 1.66  % 1.70  % 1.94  %
Consumer 1.69  % 1.60  % 1.87  %
(a)     Excludes allowances for investment securities and other financial assets, which together totaled $176 million, $162 million and $171 million at December 31, 2022, September 30, 2022 and December 31, 2021, 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 2022 2022 2022 2022 2021
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers $ 174  $ 223  $ 151  $ 173  $ 188 
Retail/wholesale trade 151  158  87  59  50 
Manufacturing 85  88  101  70  52 
Health care 50  45  54  37  46 
Real estate related (a) 50  47  59  39  64 
Transportation and warehousing 27  29  30  28  18 
Technology, media & telecommunications 20  20  21  36  33 
Other industries 106  138  146  218  345 
Total commercial and industrial 663  748  649  660  796 
Commercial real estate 189  148  161  332  364 
Equipment lease financing 6  7  5  6  8 
Total commercial 858  903  815  998  1,168 
Consumer (b)
Residential real estate 424  429  457  526  517 
Home equity 526  530  556  576  596 
Automobile 155  167  175  181  183 
Credit card 8  6  6  8  7 
Other consumer 14  33  37  9  9 
Total consumer 1,127  1,165  1,231  1,300  1,312 
Total nonperforming loans (c) 1,985  2,068  2,046  2,298  2,480 
OREO and foreclosed assets 34  33  29  26  26 
Total nonperforming assets $ 2,019  $ 2,101  $ 2,075  $ 2,324  $ 2,506 
Nonperforming loans to total loans 0.61  % 0.66  % 0.66  % 0.78  % 0.86  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.62  % 0.67  % 0.67  % 0.79  % 0.87  %
Nonperforming assets to total assets 0.36  % 0.38  % 0.38  % 0.43  % 0.45  %
Allowance for loan and lease losses to nonperforming loans 239  % 222  % 218  % 198  % 196  %
(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, 2022 - July 1, 2022 - April 1, 2022 - January 1, 2022 - October 1, 2021 -
In millions December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 December 31, 2021
Beginning balance $ 2,101  $ 2,075  $ 2,324  $ 2,506  $ 2,559 
New nonperforming assets 346  438  393  346  395 
Charge-offs and valuation adjustments (174) (79) (55) (62) (53)
Principal activity, including paydowns and payoffs (139) (182) (273) (274) (240)
Asset sales and transfers to loans held for sale (22) (3) (6) (21) (3)
Returned to performing status (93) (148) (308) (171) (152)
Ending balance $ 2,019  $ 2,101  $ 2,075  $ 2,324  $ 2,506 




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)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2022 2022 2022 2022 2021
Commercial
Commercial and industrial $ 169 $ 321 $ 99 $ 185 $ 235
Commercial real estate 19 11 28 68 46
Equipment lease financing 20 6 7 20 25
Total commercial 208 338 134 273 306
Consumer
Residential real estate
Non government insured 190 223 230 239 310
Government insured 91 75 68 66 69
Home equity 53 46 43 41 53
Automobile 106 96 102 109 146
Credit card 50 44 37 39 49
Education
Non government insured 5 6 5 5 5
Government insured
 29 30 39 36 38
Other consumer 15 21 38 47 35
Total consumer 539 541 562 582 705
Total $ 747 $ 879 $ 696 $ 855 $ 1,011
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.23  % 0.28  % 0.22  % 0.29  % 0.35  %
Commercial 0.09  % 0.16  % 0.06  % 0.14  % 0.16  %
Consumer 0.53  % 0.54  % 0.57  % 0.61  % 0.74  %
(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)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2022 2022 2022 2022 2021
Commercial
Commercial and industrial $ 27 $ 55 $ 128 $ 64 $ 72
Commercial real estate 4 4 11 41 24
Equipment lease financing 4 6 4 1 2
Total commercial 35 65 143 106 98
Consumer
Residential real estate
Non government insured 54 49 53 47 78
Government insured 58 46 42 37 41
Home equity 20 16 14 16 18
Automobile 25 21 24 26 40
Credit card 35 30 25 28 33
Education
Non government insured
 2 4 2 3 2
Government insured
 20 22 21 21 23
Other consumer 12 15 21 26 22
Total consumer 226 203 202 204 257
Total $ 261 $ 268 $ 345 $ 310 $ 355
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.08  % 0.08  % 0.11  % 0.11  % 0.12  %
Commercial 0.02  % 0.03  % 0.07  % 0.05  % 0.05  %
Consumer 0.22  % 0.20  % 0.21  % 0.21  % 0.27  %
(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)
December 31 September 30 June 30 March 31 December 31
Dollars in millions 2022 2022 2022 2022 2021
Commercial
Commercial and industrial $ 137 $ 139 $ 138 $ 105 $ 132
Commercial real estate 5 7 1
Total commercial 137 144 138 112 133
Consumer
Residential real estate
Non government insured 32 30 20 41 59
Government insured 167 166 182 232 269
Automobile 7 6 6 8 14
Credit card 70 58 54 62 62
Education
Non government insured 2 2 2 2 2
Government insured
 57 61 56 62 63
Other consumer 10 12 12 15 17
Total consumer 345 335 332 422 486
Total $ 482 $ 479 $ 470 $ 534 $ 619
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.15  % 0.15  % 0.15  % 0.18  % 0.21  %
Commercial 0.06  % 0.07  % 0.06  % 0.06  % 0.07  %
Consumer 0.34  % 0.34  % 0.34  % 0.44  % 0.51  %
Total accruing loans past due $ 1,490 $ 1,626 $ 1,511 $ 1,699 $ 1,985
Commercial $ 380 $ 547 $ 415 $ 491 $ 537
Consumer $ 1,110 $ 1,079 $ 1,096 $ 1,208 $ 1,448
Total accruing loans past due to total loans 0.46  % 0.52  % 0.49  % 0.58  % 0.69  %
Commercial 0.17  % 0.25  % 0.20  % 0.25  % 0.28  %
Consumer 1.10  % 1.08  % 1.12  % 1.26  % 1.52  %
(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 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. 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 composed 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, 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
December 31 September 30 June 30 March 31 December 31
2022 2022 2022 2022 2021
Full-time employees
Retail Banking 32,467  33,288  33,565  33,293  32,563 
Other full-time employees 27,427  26,328  25,390  25,037  25,105 
Total full-time employees 59,894  59,616  58,955  58,330  57,668 
Part-time employees
Retail Banking 1,577  1,520  1,712  1,670  1,669 
Other part-time employees 74  77  460  82  89 
Total part-time employees 1,651  1,597  2,172  1,752  1,758 
Total 61,545  61,213  61,127  60,082  59,426 


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 2022 2022 2022 2022 2021 2022 2021
Net Income
Retail Banking $ 752  $ 560  $ 322  $ 340  $ 362  $ 1,974  $ 1,648 
Corporate & Institutional Banking 982  929  1,003  956  1,334  3,870  4,324 
Asset Management Group 52  90  86  102  106  330  406 
Other (258) 45  70  10  (509) (133) (704)
Net income excluding noncontrolling
  interests		 $ 1,528  $ 1,624  $ 1,481  $ 1,408  $ 1,293  $ 6,041  $ 5,674 
  
Revenue
Retail Banking $ 3,079  $ 2,742  $ 2,410  $ 2,276  $ 2,408  $ 10,507  $ 9,002 
Corporate & Institutional Banking 2,451  2,255  2,221  1,964  2,281  8,891  8,354 
Asset Management Group 375  396  387  386  388  1,544  1,463 
Other (142) 156  98  66  50  178  392 
Total revenue $ 5,763  $ 5,549  $ 5,116  $ 4,692  $ 5,127  $ 21,120  $ 19,211 
(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 Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2022 2022 2022 2022 2021 2022 2021
Income Statement
Net interest income $ 2,330  $ 2,017  $ 1,662  $ 1,531  $ 1,634  $ 7,540  $ 6,206 
Noninterest income 749  725  748  745  774  2,967  2,796 
Total revenue 3,079  2,742  2,410  2,276  2,408  10,507  9,002 
Provision for (recapture of) credit losses 193  92  55  (81) 55  259  (101)
Noninterest expense 1,892  1,901  1,913  1,892  1,874  7,598  6,916 
Pretax earnings 994  749  442  465  479  2,650  2,187 
Income taxes 232  175  105  109  112  621  508 
Noncontrolling interests 10  14  15  16  5  55  31 
Earnings $ 752  $ 560  $ 322  $ 340  $ 362  $ 1,974  $ 1,648 
Average Balance Sheet
Loans held for sale $ 737  $ 837  $ 957  $ 1,183  $ 1,425  $ 927  $ 1,328 
Loans
Consumer
Residential real estate $ 35,286  $ 34,465  $ 33,240  $ 31,528  $ 30,888  $ 33,643  $ 25,230 
Home equity 24,126  23,393  22,886  22,458  22,572  23,221  22,387 
Automobile 14,793  15,088  15,566  16,274  16,944  15,425  15,787 
Credit card 6,882  6,684  6,508  6,401  6,513  6,620  6,182 
Education 2,257  2,327  2,410  2,532  2,620  2,381  2,770 
Other consumer 2,049  2,092  2,173  2,348  2,612  2,164  2,397 
Total consumer 85,393  84,049  82,783  81,541  82,149  83,454  74,753 
Commercial 11,181  10,881  11,044  11,610  12,844  11,177  14,321 
Total loans $ 96,574  $ 94,930  $ 93,827  $ 93,151  $ 94,993  $ 94,631  $ 89,074 
Total assets $ 115,827  $ 114,619  $ 113,068  $ 111,754  $ 113,782  $ 113,829  $ 106,331 
Deposits
Noninterest-bearing $ 64,031  $ 65,405  $ 65,599  $ 64,058  $ 65,510  $ 64,775  $ 57,729 
Interest-bearing 195,743  198,956  202,801  201,021  197,312  199,614  184,040 
Total deposits $ 259,774  $ 264,361  $ 268,400  $ 265,079  $ 262,822  $ 264,389  $ 241,769 
Performance Ratios
Return on average assets 2.58  % 1.94  % 1.14  % 1.23  % 1.26  % 1.73  % 1.55  %
Noninterest income to total revenue 24  % 26  % 31  % 33  % 32  % 28  % 31  %
Efficiency 61  % 69  % 79  % 83  % 78  % 72  % 77  %
(a)See note (a) on page 13.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 15
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 2022 2022 2022 2022 2021 2022 2021
Supplemental Noninterest Income Information
Asset management and brokerage $ 128  $ 131  $ 135  $ 134  $ 131  $ 528  $ 465 
Card and cash management $ 335  $ 344  $ 351  $ 308  $ 347  $ 1,338  $ 1,281 
Lending and deposit services $ 172  $ 167  $ 167  $ 164  $ 157  $ 670  $ 619 
Residential and commercial mortgage $ 111  $ 38  $ 71  $ 99  $ 101  $ 319  $ 456 
Residential Mortgage Information
Residential mortgage servicing statistics
   (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 190  $ 170  $ 145  $ 135  $ 133 
Serviced portfolio acquisitions $ 24  $ 29  $ 15  $ 6  $ 2  $ 74  $ 44 
MSR asset value (b) $ 2.3  $ 2.1  $ 1.6  $ 1.3  $ 1.1 
MSR capitalization value (in basis points) (b) 122  122  112  98  81 
Servicing income: (in millions)
Servicing fees, net (c) $ 73  $ 50  $ 36  $ 33  $ 14  $ 192  $ 34 
Mortgage servicing rights valuation, net of
   economic hedge		 $ 24  $ (30) $ 13  $ 2  $ 2  $ 9  $ 64 
Residential mortgage loan statistics
Loan origination volume (in billions) $ 2.1  $ 3.1  $ 4.8  $ 5.1  $ 6.6  $ 15.1  $ 24.8 
Loan sale margin percentage 2.20  % 1.97  % 1.88  % 2.45  % 2.55  % 2.14  % 2.84  %
Percentage of originations represented by:
Purchase volume (d) 88  % 85  % 74  % 42  % 38  % 67  % 43  %
Refinance volume 12  % 15  % 26  % 58  % 62  % 33  % 57  %
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e) 65  % 65  % 64  % 64  % 64  % 64  % 65  %
Digital consumer customers (f) 76  % 78  % 78  % 78  % 79  % 78  % 79  %
Credit-related statistics
Nonperforming assets $ 1,003  $ 1,027  $ 1,088  $ 1,168  $ 1,220 
Net charge-offs - loans and leases $ 108  $ 98  $ 88  $ 141  $ 124  $ 435  $ 393 
Other statistics
ATMs 8,933  9,169  9,301  9,502  9,523 
Branches (g) 2,518  2,527  2,535  2,591  2,629 
Brokerage account client assets (in billions) (h) $ 70  $ 67  $ 68  $ 74  $ 78 
(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)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)Reflects all branches and solution centers excluding 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 Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions 2022 2022 2022 2022 2021 2022 2021
Income Statement
Net interest income $ 1,489  $ 1,368  $ 1,253  $ 1,160  $ 1,228  $ 5,270  $ 4,571 
Noninterest income 962  887  968  804  1,053  3,621  3,783 
Total revenue 2,451  2,255  2,221  1,964  2,281  8,891  8,354 
Provision for (recapture of) credit losses 183  150  (17) (118) (369) 198  (646)
Noninterest expense 990  890  934  837  975  3,651  3,479 
Pretax earnings 1,278  1,215  1,304  1,245  1,675  5,042  5,521 
Income taxes 291  281  298  285  337  1,155  1,183 
Noncontrolling interests 5  5  3  4  4  17  14 
Earnings $ 982  $ 929  $ 1,003  $ 956  $ 1,334  $ 3,870  $ 4,324 
Average Balance Sheet
Loans held for sale $ 337  $ 449  $ 490  $ 628  $ 539  $ 475  $ 583 
Loans
Commercial
Commercial and industrial $ 166,176  $ 160,140  $ 153,948  $ 141,622  $ 137,079  $ 155,551  $ 126,928 
Commercial real estate 34,663  33,525  32,844  32,433  33,559  33,373  31,584 
Equipment lease financing 6,274  6,202  6,201  6,099  6,184  6,195  6,286 
Total commercial 207,113  199,867  192,993  180,154  176,822  195,119  164,798 
Consumer 8  7  14  8  12  9  13 
Total loans $ 207,121  $ 199,874  $ 193,007  $ 180,162  $ 176,834  $ 195,128  $ 164,811 
Total assets $ 234,120  $ 224,984  $ 219,513  $ 200,724  $ 198,874  $ 219,941  $ 188,470 
Deposits
Noninterest-bearing $ 67,340  $ 73,523  $ 81,028  $ 86,178  $ 88,023  $ 76,956  $ 79,109 
Interest-bearing 79,916  71,925  65,151  68,429  72,397  71,388  72,210 
Total deposits $ 147,256  $ 145,448  $ 146,179  $ 154,607  $ 160,420  $ 148,344  $ 151,319 
Performance Ratios
Return on average assets 1.66  % 1.64  % 1.83  % 1.93  % 2.66  % 1.76  % 2.29  %
Noninterest income to total revenue 39  % 39  % 44  % 41  % 46  % 41  % 45  %
Efficiency 40  % 39  % 42  % 43  % 43  % 41  % 42  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 843  $ 753  $ 659  $ 546  $ 560  $ 2,801  $ 2,169 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 15  $ 26  $ 20  $ 16  $ 42  $ 77  $ 145 
Commercial mortgage loan servicing income (d) 52  66  70  68  90  256  334 
Commercial mortgage servicing rights
   valuation, net of economic hedge		 39  53  33  13  16  138  80 
Total $ 106  $ 145  $ 123  $ 97  $ 148  $ 471  $ 559 
MSR asset value (e) $ 1,113  $ 1,132  $ 988  $ 886  $ 740 
Average loans by C&IB business
Corporate Banking $ 113,619  $ 109,197  $ 103,595  $ 92,503  $ 87,284  $ 104,798  $ 81,069 
Real Estate 48,031  45,837  44,202  43,213  44,787  45,335  42,936 
Business Credit 30,087  28,930  28,246  26,535  26,065  28,461  24,047 
Commercial Banking 8,683  9,008  9,459  10,045  10,924  9,294  12,054 
Other 6,701  6,902  7,505  7,866  7,774  7,240  4,705 
Total average loans $ 207,121  $ 199,874  $ 193,007  $ 180,162  $ 176,834  $ 195,128  $ 164,811 
Credit-related statistics
Nonperforming assets (e) $ 761  $ 779  $ 674  $ 866  $ 1,007 
Net charge-offs (recoveries) - loans and leases $ 100  $ 33  $ 11  $ (1) $ (1) $ 143  $ 289 
(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 Year ended
December 31 September 30 June 30 March 31 December 31 December 31 December 31
Dollars in millions, except as noted 2022 2022 2022 2022 2021 2022 2021
Income Statement
Net interest income $ 152  $ 165  $ 153  $ 138  $ 130  $ 608  $ 476 
Noninterest income 223  231  234  248  258  936  987 
Total revenue 375  396  387  386  388  1,544  1,463 
Provision for (recapture of) credit losses 17  4  5  2  (15) 28  (7)
Noninterest expense 291  274  270  251  265  1,086  941 
Pretax earnings 67  118  112  133  138  430  529 
Income taxes 15  28  26  31  32  100  123 
Earnings $ 52  $ 90  $ 86  $ 102  $ 106  $ 330  $ 406 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 8,835  $ 8,430  $ 7,835  $ 6,989  $ 6,295  $ 8,029  $ 5,033 
Other consumer 4,388  4,640  4,633  4,541  4,535  4,550  4,321 
Total consumer 13,223  13,070  12,468  11,530  10,830  12,579  9,354 
Commercial 1,291  1,328  1,560  1,848  2,093  1,505  1,746 
Total loans $ 14,514  $ 14,398  $ 14,028  $ 13,378  $ 12,923  $ 14,084  $ 11,100 
Total assets $ 14,935  $ 14,820  $ 14,449  $ 13,801  $ 13,317  $ 14,505  $ 11,677 
Deposits
Noninterest-bearing $ 2,107  $ 2,286  $ 2,824  $ 3,458  $ 3,025  $ 2,664  $ 2,919 
Interest-bearing 25,651  27,054  28,839  29,830  26,318  27,830  22,782 
Total deposits $ 27,758  $ 29,340  $ 31,663  $ 33,288  $ 29,343  $ 30,494  $ 25,701 
Performance Ratios
Return on average assets 1.38  % 2.41  % 2.39  % 3.00  % 3.16  % 2.28  % 3.48  %
Noninterest income to total revenue 59  % 58  % 60  % 64  % 66  % 61  % 67  %
Efficiency 78  % 69  % 70  % 65  % 68  % 70  % 64  %
Other Information
Nonperforming assets (b) $ 56  $ 95  $ 114  $ 72  $ 62 
Net charge-offs (recoveries) - loans and leases $ 18  $ (2) $ (1) $ 2  $ 1  $ 17  $ 2 
Brokerage account client assets (in billions) (b) $ 4  $ 4  $ 4  $ 5  $ 5 
Client Assets Under Administration
     (in billions) (b) (c)
Discretionary client assets under management $ 173  $ 166  $ 167  $ 182  $ 192 
Nondiscretionary client assets under administration 152  148  153  165  175 
Total $ 325  $ 314  $ 320  $ 347  $ 367 
Discretionary client assets under management
PNC Private Bank $ 105  $ 99  $ 103  $ 115  $ 123 
Institutional Asset Management 68  67  64  67  69 
Total $ 173  $ 166  $ 167  $ 182  $ 192 
(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.

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.

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.

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

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

Efficiency – Noninterest expense divided by total revenue.

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

Fee income – Refers to the following categories within Noninterest income: Asset management and brokerage, Capital markets and advisory, Card and cash management, Lending and deposit services, and Residential and commercial mortgage.

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

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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.