July 18, 2023 - EX-99.2 - 8-K: Current report filing | The PNC Financial Services Group, Inc. (PNC)

Exhibit 99.2

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2023

(UNAUDITED)


Consolidated Results:			Page
Income Statement			1
Balance Sheet			2
Average Balance Sheet			3
Details of Net Interest Margin			4

Loans			5
Allowance for Credit Losses			6-7
Nonperforming Assets			8
Accruing Loans Past Due			9-11

Business Segment Results:
Descriptions			12
Period End Employees			12
Net Income and Revenue			13
Retail Banking			14-15
Corporate & Institutional Banking			16
Asset Management Group			17

Glossary of Terms			18-19

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 18, 2023. 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

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. For a description of each updated noninterest income revenue stream, see Note 1 Accounting Policies in our 2022 Form 10-K.


THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Second Quarter 2023 Financial Supplement (Unaudited)
Financial Supplement Table Reference

Table	Description	Page
1	Consolidated Income Statement	1
2	Consolidated Balance Sheet	2
3	Average Consolidated Balance Sheet	3
4	Details of Net Interest Margin	4

5	Details of Loans	5
6	Change in Allowance for Loan and Lease Losses	6
7	Components of the Provision for (Recapture of) Credit Losses	7
8	Allowance for Credit Losses by Loan Class	7
9	Nonperforming Assets by Type	8
10	Change in Nonperforming Assets	8
11	Accruing Loans Past Due 30 to 59 Days	9
12	Accruing Loans Past Due 60 to 89 Days	10
13	Accruing Loans Past Due 90 Days or More	11
14	Period End Employees	12
15	Summary of Business Segment Net Income and Revenue	13
16	Retail Banking	14-15
17	Corporate & Institutional Banking	16
18	Asset Management Group	17


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	2023			2023			2022			2022			2022			2023			2022
Interest Income
Loans	$	4,523		$	4,258		$	3,860		$	3,138		$	2,504		$	8,781		$	4,797
Investment securities	883			885			836			715			631			1,768			1,175
Other	538			516			413			279			146			1,054			223
Total interest income	5,944			5,659			5,109			4,132			3,281			11,603			6,195
Interest Expense
Deposits	1,531			1,291			812			340			88			2,822			115
Borrowed funds	903			783			613			317			142			1,686			225
Total interest expense	2,434			2,074			1,425			657			230			4,508			340
Net interest income	3,510			3,585			3,684			3,475			3,051			7,095			5,855
Noninterest Income
Asset management and brokerage	348			356			345			357			365			704			742
Capital markets and advisory	213			262			336			299			409			475			661
Card and cash management	697			659			671			671			671			1,356			1,291
Lending and deposit services	298			306			296			287			282			604			551
Residential and commercial mortgage	98			177			184			143			161			275			320
Other (a) (b)	129			258			247			317			177			387			388
Total noninterest income	1,783			2,018			2,079			2,074			2,065			3,801			3,953
Total revenue	5,293			5,603			5,763			5,549			5,116			10,896			9,808
Provision For (Recapture of) Credit Losses	146			235			408			241			36			381			(172)
Noninterest Expense
Personnel	1,846			1,826			1,943			1,805			1,779			3,672			3,496
Occupancy	244			251			247			241			246			495			504
Equipment	349			350			369			344			351			699			682
Marketing	109			74			106			93			95			183			156
Other	824			820			809			797			773			1,644			1,578
Total noninterest expense	3,372			3,321			3,474			3,280			3,244			6,693			6,416
Income before income taxes and noncontrolling interests	1,775			2,047			1,881			2,028			1,836			3,822			3,564
Income taxes	275			353			333			388			340			628			639




Net income	1,500			1,694			1,548			1,640			1,496			3,194			2,925
Less: Net income attributable to noncontrolling interests	17			17			20			16			15			34			36
Preferred stock dividends (c)	127			68			120			65			71			195			116
Preferred stock discount accretion and redemptions	2			2			1			1			1			4			3
Net income attributable to common shareholders	$	1,354		$	1,607		$	1,407		$	1,558		$	1,409		$	2,961		$	2,770
Earnings Per Common Share
Basic	$	3.36		$	3.98		$	3.47		$	3.78		$	3.39		$	7.35		$	6.62


Diluted	$	3.36		$	3.98		$	3.47		$	3.78		$	3.39		$	7.34		$	6.61


Average Common Shares Outstanding
Basic	401			401			404			410			414			401			417
Diluted	401			402			404			410			414			401			417
Efficiency	64		%	59		%	60		%	59		%	63		%	61		%	65		%
Noninterest income to total revenue	34		%	36		%	36		%	37		%	40		%	35		%	40		%
Effective tax rate (d)	15.5		%	17.2		%	17.7		%	19.1		%	18.5		%	16.4		%	17.9		%

(a)Includes net gains (losses) on sales of securities of $(2) million, less than $1 million, $(3) million, less than $1 million and less than $(1) million for the quarters ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and $(2) million and $(4) million for the six months ended June 30, 2023 and June 30, 2022, respectively.

(b)Includes Visa Class B derivative fair value adjustments of $(83) million, $(45) million, $(41) million, $13 million and $(16) million for the quarters ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively, and $(127) million and $(12) million for the six months ended June 30, 2023 and June 30, 2022, respectively.

(c)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually.

(d)The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.


THE PNC FINANCIAL SERVICES GROUP, INC.						Page 2

Table 2: Consolidated Balance Sheet (Unaudited)


	June 30		March 31		December 31		September 30		June 30
In millions, except par value	2023		2023		2022		2022		2022
Assets
Cash and due from banks	$	6,191	$	5,940	$	7,043	$	6,548	$	8,582
Interest-earning deposits with banks (a)	38,259		33,865		27,320		40,278		28,404
Loans held for sale (b)	835		998		1,010		1,126		1,191
Investment securities – available for sale	41,787		43,220		44,159		45,798		52,984
Investment securities – held to maturity	93,874		95,019		95,175		90,653		79,748
Loans (b)	321,761		326,475		326,025		315,400		310,800
Allowance for loan and lease losses	(4,737)		(4,741)		(4,741)		(4,581)		(4,462)
Net loans	317,024		321,734		321,284		310,819		306,338
Equity investments	8,015		8,323		8,437		8,130		8,441
Mortgage servicing rights	3,455		3,293		3,423		3,206		2,608
Goodwill	10,987		10,987		10,987		10,987		10,916
Other (b)	37,780		38,398		38,425		41,932		41,574
Total assets	$	558,207	$	561,777	$	557,263	$	559,477	$	540,786
Liabilities
Deposits
Noninterest-bearing	$	110,527	$	118,014	$	124,486	$	138,423	$	146,438
Interest-bearing	316,962		318,819		311,796		299,771		294,373
Total deposits	427,489		436,833		436,282		438,194		440,811
Borrowed funds
Federal Home Loan Bank borrowings	34,000		32,020		32,075		30,075		10,000
Senior debt	22,005		19,622		16,657		13,357		14,358
Subordinated debt	5,548		5,630		6,307		7,286		7,487
Other (b)	3,831		3,550		3,674		3,915		4,139
Total borrowed funds	65,384		60,822		58,713		54,633		35,984
Allowance for unfunded lending related commitments	663		672		694		682		681
Accrued expenses and other liabilities	15,325		14,376		15,762		19,245		15,622
Total liabilities	508,861		512,703		511,451		512,754		493,098
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800 shares, issued 543 shares	2,715		2,714		2,714		2,714		2,714
Capital surplus	19,934		19,864		18,376		19,810		18,531
Retained earnings	55,346		54,598		53,572		52,777		51,841
Accumulated other comprehensive income (loss)	(9,525)		(9,108)		(10,172)		(10,486)		(8,358)
Common stock held in treasury at cost: 145, 144, 142, 139, and 132 shares	(19,150)		(19,024)		(18,716)		(18,127)		(17,076)
Total shareholders’ equity	49,320		49,044		45,774		46,688		47,652
Noncontrolling interests	26		30		38		35		36
Total equity	49,346		49,074		45,812		46,723		47,688
Total liabilities and equity	$	558,207	$	561,777	$	557,263	$	559,477	$	540,786

(a)Amounts include balances held with the Federal Reserve Bank of $37.8 billion, $32.5 billion, $26.9 billion, $39.8 billion and $28.0 billion as of June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022, respectively.

(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 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	2023		2023		2022		2022		2022		2023		2022
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	31,180	$	31,850	$	31,818	$	32,500	$	37,285	$	31,513	$	52,308
Non-agency	663		689		714		748		902		676		954
Commercial mortgage-backed	2,948		3,102		3,377		3,489		4,362		3,025		4,793
Asset-backed	575		218		105		110		2,388		397		4,296
U.S. Treasury and government agencies	8,231		9,088		10,345		11,789		17,480		8,657		32,391
Other	2,997		3,263		3,370		3,506		4,200		3,129		4,536
Total securities available for sale	46,594		48,210		49,729		52,142		66,617		47,397		99,278
Securities held to maturity
Residential mortgage-backed	45,033		45,616		44,184		39,329		33,086		45,323		16,687
Commercial mortgage-backed	2,396		2,453		2,323		2,069		1,175		2,424		591
Asset-backed	6,712		7,026		6,995		6,571		4,119		6,868		2,071
U.S. Treasury and government agencies	36,912		36,748		36,441		34,279		28,167		36,831		14,618
Other	3,391		3,338		3,218		2,600		1,560		3,365		1,068
Total securities held to maturity	94,444		95,181		93,161		84,848		68,107		94,811		35,035
Total investment securities	141,038		143,391		142,890		136,990		134,724		142,208		134,313
Loans
Commercial and industrial	180,878		182,017		179,111		172,788		166,968		181,444		161,256
Commercial real estate	35,938		36,110		36,181		35,140		34,467		36,023		34,237
Equipment lease financing	6,364		6,452		6,275		6,202		6,200		6,408		6,150
Consumer	55,070		55,020		54,809		54,563		54,551		55,045		54,757
Residential real estate	46,284		45,927		45,499		44,333		42,604		46,107		41,385
Total loans	324,534		325,526		321,875		313,026		304,790		325,027		297,785
Interest-earning deposits with banks (c)	31,433		34,054		30,395		31,892		39,689		32,736		51,120
Other interest-earning assets	9,215		8,806		9,690		9,560		9,935		9,012		9,677
Total interest-earning assets	506,220		511,777		504,850		491,468		489,138		508,983		492,895
Noninterest-earning assets	49,287		50,555		52,356		55,629		57,740		49,918		56,232
Total assets	$	555,507	$	562,332	$	557,206	$	547,097	$	546,878	$	558,901	$	549,127
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	63,691	$	65,753	$	63,944	$	60,934	$	58,019	$	64,716	$	60,295
Demand	124,111		124,376		122,501		120,358		119,636		124,243		116,024
Savings	102,415		104,408		102,020		106,761		109,063		103,406		108,799
Time deposits	22,342		20,519		12,982		10,020		10,378		21,436		13,195
Total interest-bearing deposits	312,559		315,056		301,447		298,073		297,096		313,801		298,313
Borrowed funds
Federal Home Loan Bank borrowings	33,752		32,056		30,640		16,708		6,978		32,909		3,508
Senior debt	20,910		19,679		16,312		14,597		16,172		20,298		17,089
Subordinated debt	5,850		6,100		6,933		7,614		6,998		5,974		6,886
Other	5,180		5,133		5,346		5,342		5,508		5,156		5,515
Total borrowed funds	65,692		62,968		59,231		44,261		35,656		64,337		32,998
Total interest-bearing liabilities	378,251		378,024		360,678		342,334		332,752		378,138		331,311
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits	113,178		121,176		133,461		141,167		149,432		117,155		151,567
Accrued expenses and other liabilities	15,063		16,014		17,461		15,699		17,116		15,536		16,245
Equity	49,015		47,118		45,606		47,897		47,578		48,072		50,004
Total liabilities and equity	$	555,507	$	562,332	$	557,206	$	547,097	$	546,878	$	558,901	$	549,127

(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 $30.6 billion, $33.5 billion, $30.0 billion, $31.5 billion and $39.3 billion for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022 and $32.0 billion and $50.7 billion for the six months ended June 30, 2023 and June 30,2022, 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
	2023		2023		2022		2022		2022		2023		2022
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	2.67	%	2.67	%	2.54	%	2.36	%	2.17	%	2.67	%	1.89	%
Non-agency	9.39	%	8.53	%	7.85	%	7.62	%	7.56	%	8.95	%	7.55	%
Commercial mortgage-backed	2.84	%	2.62	%	2.75	%	2.70	%	2.45	%	2.72	%	2.40	%
Asset-backed	6.56	%	7.04	%	11.98	%	6.31	%	1.84	%	6.67	%	1.49	%
U.S. Treasury and government agencies	2.20	%	2.05	%	1.96	%	1.73	%	1.60	%	2.12	%	1.29	%
Other	2.55	%	2.47	%	2.39	%	2.47	%	2.59	%	2.51	%	2.67	%
Total securities available for sale	2.73	%	2.64	%	2.52	%	2.33	%	2.13	%	2.69	%	1.79	%
Securities held to maturity
Residential mortgage-backed	2.72	%	2.74	%	2.60	%	2.30	%	1.98	%	2.73	%	1.96	%
Commercial mortgage-backed	5.35	%	4.95	%	4.57	%	3.50	%	2.30	%	5.15	%	2.29	%
Asset-backed	4.10	%	3.97	%	3.44	%	2.58	%	1.92	%	4.03	%	1.91	%
U.S. Treasury and government agencies	1.34	%	1.33	%	1.30	%	1.19	%	1.05	%	1.33	%	1.09	%
Other	4.65	%	4.62	%	4.47	%	4.10	%	4.21	%	4.63	%	4.19	%
Total securities held to maturity	2.41	%	2.41	%	2.27	%	1.96	%	1.65	%	2.41	%	1.67	%
Total investment securities	2.52	%	2.49	%	2.36	%	2.10	%	1.89	%	2.50	%	1.76	%
Loans
Commercial and industrial	5.70	%	5.34	%	4.70	%	3.69	%	2.90	%	5.52	%	2.83	%
Commercial real estate	6.37	%	6.02	%	5.28	%	4.27	%	3.15	%	6.19	%	3.01	%
Equipment lease financing	4.51	%	4.28	%	4.18	%	3.85	%	3.62	%	4.40	%	3.68	%
Consumer	6.57	%	6.34	%	5.88	%	5.32	%	4.68	%	6.46	%	4.68	%
Residential real estate	3.41	%	3.35	%	3.28	%	3.21	%	3.11	%	3.38	%	3.07	%
Total loans	5.57	%	5.29	%	4.75	%	3.98	%	3.29	%	5.43	%	3.24	%
Interest-earning deposits with banks	5.10	%	4.58	%	3.76	%	2.32	%	0.79	%	4.83	%	0.42	%
Other interest-earning assets	5.96	%	5.75	%	5.20	%	3.94	%	2.76	%	5.86	%	2.42	%
Total yield on interest-earning assets	4.70	%	4.46	%	4.02	%	3.35	%	2.69	%	4.58	%	2.53	%
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market	2.79	%	2.40	%	1.75	%	0.85	%	0.19	%	2.59	%	0.10	%
Demand	1.89	%	1.58	%	1.14	%	0.59	%	0.15	%	1.74	%	0.09	%
Savings	1.26	%	1.03	%	0.50	%	0.09	%	0.04	%	1.14	%	0.04	%
Time deposits	3.26	%	3.00	%	1.45	%	0.26	%	0.18	%	3.14	%	0.15	%
Total interest-bearing deposits	1.96	%	1.66	%	1.07	%	0.45	%	0.12	%	1.81	%	0.08	%
Borrowed funds
Federal Home Loan Bank borrowings	5.28	%	4.80	%	3.92	%	2.60	%	1.24	%	5.04	%	1.24	%
Senior debt	5.91	%	5.39	%	4.30	%	2.96	%	1.61	%	5.66	%	1.30	%
Subordinated debt	6.19	%	5.69	%	4.79	%	3.43	%	1.94	%	5.94	%	1.68	%
Other	3.79	%	3.70	%	3.24	%	2.20	%	1.46	%	3.74	%	1.22	%
Total borrowed funds	5.44	%	4.98	%	4.07	%	2.81	%	1.58	%	5.22	%	1.36	%
Total rate on interest-bearing liabilities	2.56	%	2.20	%	1.55	%	0.75	%	0.27	%	2.38	%	0.20	%
Interest rate spread	2.14	%	2.26	%	2.47	%	2.60	%	2.42	%	2.20	%	2.33	%
Benefit from use of noninterest-bearing sources (b)	0.65	%	0.58	%	0.45	%	0.22	%	0.08	%	0.61	%	0.06	%
Net interest margin	2.79	%	2.84	%	2.92	%	2.82	%	2.50	%	2.81	%	2.39	%

(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, 2023, March 31, 2023, December 31, 2022, September 30, 2022 and June 30, 2022 were $37 million, $38 million, $36 million, $29 million and $25 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2023 and June 30, 2022 were $75 million and $47 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	2023		2023		2022		2022		2022
Commercial
Commercial and industrial
Manufacturing	$	30,586	$	32,132	$	30,845	$	28,629	$	27,179
Retail/wholesale trade	28,751		29,172		29,176		27,532		26,475
Service providers	22,277		23,186		23,548		22,043		21,184
Financial services	21,823		22,534		21,320		21,590		19,594
Real estate related (a)	17,200		17,548		17,780		17,513		16,179
Technology, media & telecommunications	11,158		11,338		11,845		11,366		16,249
Health care	10,186		10,537		10,649		10,420		10,153
Transportation and warehousing	8,048		7,824		7,858		7,977		7,604
Other industries	27,600		28,726		29,198		26,743		27,214
Total commercial and industrial	177,629		182,997		182,219		173,813		171,831
Commercial real estate	35,928		35,991		36,316		35,592		34,452
Equipment lease financing	6,400		6,424		6,514		6,192		6,240
Total commercial	219,957		225,412		225,049		215,597		212,523
Consumer
Residential real estate	46,834		46,067		45,889		45,057		43,717
Home equity	26,200		26,203		25,983		25,367		24,693
Automobile	15,065		14,923		14,836		15,025		15,323
Credit card	7,092		6,961		7,069		6,774		6,650
Education	2,058		2,131		2,173		2,287		2,332
Other consumer	4,555		4,778		5,026		5,293		5,562
Total consumer	101,804		101,063		100,976		99,803		98,277
Total loans	$	321,761	$	326,475	$	326,025	$	315,400	$	310,800

(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	2023			2023			2022			2022			2022			2023			2022
Allowance for loan and lease losses
Beginning balance	$	4,741		$	4,741		$	4,581		$	4,462		$	4,558		$	4,741		$	4,868
Adoption of ASU 2022-02 (a)				(35)												(35)
Beginning balance, adjusted	4,741			4,706			4,581			4,462			4,558			4,706			4,868
Gross charge-offs:
Commercial and industrial	(45)			(104)			(121)			(65)			(30)			(149)			(71)
Commercial real estate	(87)			(12)			(22)			(7)			(5)			(99)			(15)
Equipment lease financing	(3)			(4)			(2)			(1)			(2)			(7)			(3)
Residential real estate	(2)			(3)			(2)			(2)						(5)			(7)
Home equity	(5)			(6)			(6)			(3)			(2)			(11)			(6)
Automobile	(28)			(33)			(34)			(32)			(34)			(61)			(86)
Credit card	(80)			(74)			(62)			(59)			(67)			(154)			(135)
Education	(5)			(4)			(4)			(4)			(4)			(9)			(8)
Other consumer	(38)			(42)			(64)			(49)			(51)			(80)			(115)
Total gross charge-offs	(293)			(282)			(317)			(222)			(195)			(575)			(446)
Recoveries:
Commercial and industrial	33			20			33			23			15			53			45
Commercial real estate				2			2			1			1			2			2
Equipment lease financing	3			3			1			1			3			6			6
Residential real estate	4			3			2			4			6			7			11
Home equity	13			11			13			19			18			24			39
Automobile	27			24			24			30			39			51			70
Credit card	11			11			8			12			19			22			31
Education	2			2			1			1			2			4			3
Other consumer	6			11			9			12			9			17			19
Total recoveries	99			87			93			103			112			186			226
Net (charge-offs) / recoveries:
Commercial and industrial	(12)			(84)			(88)			(42)			(15)			(96)			(26)
Commercial real estate	(87)			(10)			(20)			(6)			(4)			(97)			(13)
Equipment lease financing				(1)			(1)						1			(1)			3
Residential real estate	2									2			6			2			4
Home equity	8			5			7			16			16			13			33
Automobile	(1)			(9)			(10)			(2)			5			(10)			(16)
Credit card	(69)			(63)			(54)			(47)			(48)			(132)			(104)
Education	(3)			(2)			(3)			(3)			(2)			(5)			(5)
Other consumer	(32)			(31)			(55)			(37)			(42)			(63)			(96)
Total net (charge-offs)	(194)			(195)			(224)			(119)			(83)			(389)			(220)
Provision for (recapture of) credit losses (b)	189			229			380			241			(10)			418			(182)
Other	1			1			4			(3)			(3)			2			(4)
Ending balance	$	4,737		$	4,741		$	4,741		$	4,581		$	4,462		$	4,737		$	4,462
Supplemental Information
Net charge-offs
Commercial net charge-offs	$	(99)		$	(95)		$	(109)		$	(48)		$	(18)		$	(194)		$	(36)
Consumer net charge-offs	(95)			(100)			(115)			(71)			(65)			(195)			(184)
Total net charge-offs	$	(194)		$	(195)		$	(224)		$	(119)		$	(83)		$	(389)		$	(220)
Net charge-offs to average loans (annualized)	0.24		%	0.24		%	0.28		%	0.15		%	0.11		%	0.24		%	0.15		%
Commercial	0.18		%	0.17		%	0.20		%	0.09		%	0.03		%	0.17		%	0.04		%
Consumer	0.38		%	0.40		%	0.45		%	0.28		%	0.27		%	0.39		%	0.39		%

(a)Represents the impact of adopting ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 Form 10-Q will include additional information related to our adoption of this ASU.

(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	2023		2023		2022		2022		2022		2023		2022
Provision for (recapture of) credit losses
Loans and leases	$	189	$	229	$	380	$	241	$	(10)	$	418	$	(182)
Unfunded lending related commitments	(9)		(22)		12		1		42		(31)		19
Investment securities			(1)		10		3		3		(1)		4
Other financial assets	(34)		29		6		(4)		1		(5)		(13)
Total provision for (recapture of) credit losses	$	146	$	235	$	408	$	241	$	36	$	381	$	(172)

Table 8: Allowance for Credit Losses by Loan Class (a)


	June 30, 2023						March 31, 2023						June 30, 2022
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	$	1,836	$	177,629	1.03	%	$	1,771	$	182,997	0.97	%	$	1,853	$	171,831	1.08	%
Commercial real estate	1,206		35,928		3.36	%	1,171		35,991		3.25	%	993		34,452		2.88	%
Equipment lease financing	100		6,400		1.56	%	104		6,424		1.62	%	91		6,240		1.46	%
Total commercial	3,142		219,957		1.43	%	3,046		225,412		1.35	%	2,937		212,523		1.38	%
Consumer
Residential real estate	72		46,834		0.15	%	95		46,067		0.21	%	36		43,717		0.08	%
Home equity	294		26,200		1.12	%	316		26,203		1.21	%	190		24,693		0.77	%
Automobile	188		15,065		1.25	%	199		14,923		1.33	%	254		15,323		1.66	%
Credit card	765		7,092		10.79	%	782		6,961		11.23	%	715		6,650		10.75	%
Education	61		2,058		2.96	%	64		2,131		3.00	%	63		2,332		2.70	%
Other consumer	215		4,555		4.72	%	239		4,778		5.00	%	267		5,562		4.80	%
Total consumer	1,595		101,804		1.57	%	1,695		101,063		1.68	%	1,525		98,277		1.55	%
Total	4,737		$	321,761	1.47	%	4,741		$	326,475	1.45	%	4,462		$	310,800	1.44	%
Allowance for unfunded lending related commitments	663						672						681
Allowance for credit losses	$	5,400					$	5,413					$	5,143

Supplemental Information
Allowance for credit losses to total loans					1.68	%					1.66	%					1.65	%
Commercial					1.68	%					1.60	%					1.68	%
Consumer					1.67	%					1.79	%					1.60	%

(a) Excludes allowances for investment securities and other financial assets, which together totaled $171 million, $205 million and $163 million at June 30, 2023, March 31, 2023 and June 30, 2022, 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	2023			2023			2022			2022			2022
Nonperforming loans (a)
Commercial
Commercial and industrial
Service providers	$	114		$	128		$	174		$	223		$	151
Health care	60			57			50			45			54
Technology, media & telecommunications	55			22			20			20			21
Manufacturing	50			105			85			88			101
Real estate related (b)	42			43			50			47			59
Retail/wholesale trade	41			82			151			158			87
Transportation and warehousing	33			24			27			29			30
Other industries	75			87			106			138			146
Total commercial and industrial	470			548			663			748			649
Commercial real estate	350			337			189			148			161
Equipment lease financing	7			6			6			7			5
Total commercial	827			891			858			903			815
Consumer (c)
Residential real estate	429			432			424			429			457
Home equity	506			523			526			530			556
Automobile	133			145			155			167			175
Credit card	10			9			8			6			6
Other consumer	8			10			14			33			37
Total consumer	1,086			1,119			1,127			1,165			1,231
Total nonperforming loans (d)	1,913			2,010			1,985			2,068			2,046
OREO and foreclosed assets	36			38			34			33			29
Total nonperforming assets	$	1,949		$	2,048		$	2,019		$	2,101		$	2,075
Nonperforming loans to total loans	0.59		%	0.62		%	0.61		%	0.66		%	0.66		%
Nonperforming assets to total loans, OREO and foreclosed assets	0.61		%	0.63		%	0.62		%	0.67		%	0.67		%
Nonperforming assets to total assets	0.35		%	0.36		%	0.36		%	0.38		%	0.38		%
Allowance for loan and lease losses to nonperforming loans	248		%	236		%	239		%	222		%	218		%

(a)In connection with the adoption of ASU 2022-02 Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, nonperforming loan amounts after January 1, 2023 include certain loans whose terms were modified as a result of a borrower’s financial difficulty. Prior year amounts included nonperforming TDRs, for which accounting guidance was eliminated effective January 1, 2023. Our first quarter 2023 Form 10-Q included, and our second quarter 2023 Form 10-Q will include additional information related to our adoption of this ASU.

(b)Represents loans related to customers in the real estate and construction industries.

(c)Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.

(d)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option.

Table 10: Change in Nonperforming Assets


	April 1, 2023 -		January 1, 2023 -		October 1, 2022 -		July 1, 2022 -		April 1, 2022 -
In millions	June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		June 30, 2022
Beginning balance	$	2,048	$	2,019	$	2,101	$	2,075	$	2,324

New nonperforming assets	410		452		346		438		393
Charge-offs and valuation adjustments	(135)		(122)		(174)		(79)		(55)
Principal activity, including paydowns and payoffs	(297)		(172)		(139)		(182)		(273)
Asset sales and transfers to loans held for sale	(12)		(46)		(22)		(3)		(6)
Returned to performing status	(65)		(83)		(93)		(148)		(308)
Ending balance	$	1,949	$	2,048	$	2,019	$	2,101	$	2,075


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 pandemic 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. The CARES Act credit reporting rules expire in the third quarter of 2023.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)



	June 30			March 31			December 31			September 30			June 30
Dollars in millions	2023			2023			2022			2022			2022
Commercial
Commercial and industrial	$	64		$	119		$	169		$	321		$	99
Commercial real estate	10			25			19			11			28
Equipment lease financing	14			33			20			6			7
Total commercial	88			177			208			338			134
Consumer
Residential real estate
Non government insured	151			167			190			223			230
Government insured	77			78			91			75			68
Home equity	56			48			53			46			43
Automobile	84			79			106			96			102
Credit card	49			48			50			44			37
Education
Non government insured	5			6			5			6			5
Government insured	28			29			29			30			39
Other consumer	17			13			15			21			38
Total consumer	467			468			539			541			562
Total	$	555		$	645		$	747		$	879		$	696
Supplemental Information
Total accruing loans past due 30-59 days to total loans	0.17		%	0.20		%	0.23		%	0.28		%	0.22		%
Commercial	0.04		%	0.08		%	0.09		%	0.16		%	0.06		%
Consumer	0.46		%	0.46		%	0.53		%	0.54		%	0.57		%

(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	2023			2023			2022			2022			2022
Commercial
Commercial and industrial	$	47		$	21		$	27		$	55		$	128
Commercial real estate				1			4			4			11
Equipment lease financing	5			5			4			6			4
Total commercial	52			27			35			65			143
Consumer
Residential real estate
Non government insured	36			43			54			49			53
Government insured	50			55			58			46			42
Home equity	18			18			20			16			14
Automobile	20			18			25			21			24
Credit card	36			35			35			30			25
Education
Non government insured	2			4			2			4			2
Government insured	15			17			20			22			21
Other consumer	9			8			12			15			21
Total consumer	186			198			226			203			202
Total	$	238		$	225		$	261		$	268		$	345
Supplemental Information
Total accruing loans past due 60-89 days to total loans	0.07		%	0.07		%	0.08		%	0.08		%	0.11		%
Commercial	0.02		%	0.01		%	0.02		%	0.03		%	0.07		%
Consumer	0.18		%	0.20		%	0.22		%	0.20		%	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	2023			2023			2022			2022			2022
Commercial
Commercial and industrial	$	112		$	134		$	137		$	139		$	138
Commercial real estate										5
Total commercial	112			134			137			144			138
Consumer
Residential real estate
Non government insured	30			26			32			30			20
Government insured	144			152			167			166			182
Automobile	5			5			7			6			6
Credit card	71			74			70			58			54
Education
Non government insured	2			2			2			2			2
Government insured	46			54			57			61			56
Other consumer	9			9			10			12			12
Total consumer	307			322			345			335			332
Total	$	419		$	456		$	482		$	479		$	470
Supplemental Information
Total accruing loans past due 90 days or more to total loans	0.13		%	0.14		%	0.15		%	0.15		%	0.15		%
Commercial	0.05		%	0.06		%	0.06		%	0.07		%	0.06		%
Consumer	0.30		%	0.32		%	0.34		%	0.34		%	0.34		%
Total accruing loans past due	$	1,212		$	1,326		$	1,490		$	1,626		$	1,511
Commercial	$	252		$	338		$	380		$	547		$	415
Consumer	$	960		$	988		$	1,110		$	1,079		$	1,096
Total accruing loans past due to total loans	0.38		%	0.41		%	0.46		%	0.52		%	0.49		%
Commercial	0.11		%	0.15		%	0.17		%	0.25		%	0.20		%
Consumer	0.94		%	0.98		%	1.10		%	1.08		%	1.12		%

(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 who are serviced through our coast-to-coast branch network, digital channels, ATMs, or through our phone-based customer contact centers. Deposit products include checking, savings and money market accounts and time deposits. 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, capital markets and advisory 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 and advisory includes services and activities primarily related to merger and acquisitions advisory, equity capital markets advisory, asset-backed financing, loan syndication, securities underwriting and customer-related trading. 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 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


	June 30	March 31	December 31	September 30	June 30
	2023	2023	2022	2022	2022
Full-time employees
Retail Banking	30,446	31,583	32,467	33,288	33,565
Other full-time employees	27,785	27,874	27,427	26,328	25,390
Total full-time employees	58,231	59,457	59,894	59,616	58,955
Part-time employees
Retail Banking	1,567	1,537	1,577	1,520	1,712
Other part-time employees	503	79	74	77	460
Total part-time employees	2,070	1,616	1,651	1,597	2,172
Total	60,301	61,073	61,545	61,213	61,127


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	2023		2023		2022		2022		2022		2023		2022
Net Income
Retail Banking	$	954	$	647	$	752	$	560	$	322	$	1,601	$	662
Corporate & Institutional Banking	817		1,059		982		929		1,003		1,876		1,959
Asset Management Group	63		52		52		90		86		115		188
Other	(351)		(81)		(258)		45		70		(432)		80
Net income excluding noncontrolling interests	$	1,483	$	1,677	$	1,528	$	1,624	$	1,481	$	3,160	$	2,889

Revenue
Retail Banking	$	3,150	$	3,024	$	3,079	$	2,742	$	2,410	$	6,174	$	4,686
Corporate & Institutional Banking	2,202		2,300		2,451		2,255		2,221		4,502		4,185
Asset Management Group	353		357		375		396		387		710		773
Other	(412)		(78)		(142)		156		98		(490)		164
Total revenue	$	5,293	$	5,603	$	5,763	$	5,549	$	5,116	$	10,896	$	9,808

(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	2023			2023				2022				2022			2022			2023			2022
Income Statement
Net interest income	$	2,448		$	2,281			$	2,330			$	2,017		$	1,662		$	4,729		$	3,193
Noninterest income	702			743				749				725			748			1,445			1,493
Total revenue	3,150			3,024				3,079				2,742			2,410			6,174			4,686
Provision for (recapture of) credit losses	(14)			238				193				92			55			224			(26)
Noninterest expense	1,904			1,927				1,892				1,901			1,913			3,831			3,805
Pretax earnings	1,260			859				994				749			442			2,119			907
Income taxes	295			202				232				175			105			497			214
Noncontrolling interests	11			10				10				14			15			21			31
Earnings	$	954		$	647		752	$	752		322	$	560		$	322		$	1,601		$	662
Average Balance Sheet
Loans held for sale	$	614		$	542			$	737			$	837		$	957		$	578		$	1,070
Loans
Consumer
Residential real estate	$	35,150		$	35,421			$	35,286			$	34,465		$	33,240		$	35,285		$	32,389
Home equity	24,663			24,571				24,126				23,393			22,886			24,617			22,673
Automobile	15,005			14,918				14,793				15,088			15,566			14,962			15,918
Credit card	7,015			6,904				6,882				6,684			6,508			6,960			6,455
Education	2,115			2,188				2,257				2,327			2,410			2,151			2,470
Other consumer	1,929			1,990				2,049				2,092			2,173			1,959			2,261
Total consumer	85,877			85,992				85,393				84,049			82,783			85,934			82,166
Commercial	11,708			11,438				11,181				10,881			11,044			11,574			11,325
Total loans	$	97,585		$	97,430			$	96,574			$	94,930		$	93,827		$	97,508		$	93,491
Total assets	$	114,826		$	115,384			$	115,827			$	114,619		$	113,068		$	115,103		$	112,415
Deposits
Noninterest-bearing	$	59,464		$	60,801			$	64,031			$	65,405		$	65,599		$	60,129		$	64,833
Interest-bearing	197,854			201,720				195,743				198,956			202,801			199,776			201,916
Total deposits	$	257,318		$	262,521			$	259,774			$	264,361		$	268,400		$	259,905		$	266,749
Performance Ratios
Return on average assets	3.33		%	2.27		%		2.58		%		1.94		%	1.14		%	2.80		%	1.19		%
Noninterest income to total revenue	22		%	25		%		24		%		26		%	31		%	23		%	32		%
Efficiency	60		%	64		%		61		%		69		%	79		%	62		%	81		%

(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	2023			2023			2022			2022			2022			2023			2022
Supplemental Noninterest Income Information
Asset management and brokerage	$	123		$	131		$	128		$	131		$	135		$	254		$	269
Card and cash management	$	344		$	324		$	335		$	344		$	351		$	668		$	659
Lending and deposit services	$	176		$	181		$	172		$	167		$	167		$	357		$	331
Residential and commercial mortgage	$	75		$	104		$	111		$	38		$	71		$	179		$	170
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)	$	191		$	188		$	190		$	170		$	145
Serviced portfolio acquisitions	$	7		$	2		$	24		$	29		$	15		$	9		$	21
MSR asset value (b)	$	2.3		$	2.2		$	2.3		$	2.1		$	1.6
MSR capitalization value (in basis points) (b)	123			119			122			122			112
Servicing income: (in millions)
Servicing fees, net (c)	$	67		$	78		$	73		$	50		$	36		$	145		$	69
Mortgage servicing rights valuation net of economic hedge	$	(9)		$	14		$	24		$	(30)		$	13		$	5		$	15
Residential mortgage loan statistics
Loan origination volume (in billions)	$	2.4		$	1.4		$	2.1		$	3.1		$	4.8		$	3.8		$	9.9
Loan sale margin percentage	2.23		%	2.26		%	2.20		%	1.97		%	1.88		%	2.24		%	2.18		%
Percentage of originations represented by:
Purchase volume (d)	90		%	84		%	88		%	85		%	74		%	88		%	57		%
Refinance volume	10		%	16		%	12		%	15		%	26		%	12		%	43		%
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)	65		%	65		%	65		%	65		%	64		%	65		%	64		%
Digital consumer customers (f)	72		%	75		%	76		%	78		%	78		%	74		%	78		%
Credit-related statistics
Nonperforming assets	$	981		$	1,009		$	1,003		$	1,027		$	1,088
Net charge-offs - loans and leases	$	109		$	112		$	108		$	98		$	88		$	221		$	229
Other statistics
ATMs	8,566			8,697			8,933			9,169			9,301
Branches (g)	2,361			2,450			2,518			2,527			2,535
Brokerage account client assets (in billions) (h)	$	75		$	73		$	70		$	67		$	68

(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 regularly scheduled loan principal payments, prepayments and loans 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 standalone 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	2023			2023			2022			2022			2022			2023			2022
Income Statement
Net interest income	$	1,381		$	1,414		$	1,489		$	1,368		$	1,253		$	2,795		$	2,413
Noninterest income	821			886			962			887			968			1,707			1,772
Total revenue	2,202			2,300			2,451			2,255			2,221			4,502			4,185
Provision for (recapture of) credit losses	209			(28)			183			150			(17)			181			(135)
Noninterest expense	921			939			990			890			934			1,860			1,771
Pretax earnings	1,072			1,389			1,278			1,215			1,304			2,461			2,549
Income taxes	250			325			291			281			298			575			583
Noncontrolling interests	5			5			5			5			3			10			7
Earnings	$	817		$	1,059		$	982		$	929		$	1,003		$	1,876		$	1,959
Average Balance Sheet
Loans held for sale	$	440		$	456		$	337		$	449		$	490		$	448		$	559
Loans
Commercial
Commercial and industrial	$	167,357		$	168,874		$	166,176		$	160,140		$	153,948		$	168,110		$	147,819
Commercial real estate	34,410			34,605			34,663			33,525			32,844			34,507			32,640
Equipment lease financing	6,364			6,451			6,274			6,202			6,201			6,408			6,150
Total commercial	208,131			209,930			207,113			199,867			192,993			209,025			186,609
Consumer	5			7			8			7			14			7			11
Total loans	$	208,136		$	209,937		$	207,121		$	199,874		$	193,007		$	209,032		$	186,620
Total assets	$	234,174		$	234,536		$	234,120		$	224,984		$	219,513		$	234,354		$	210,171
Deposits
Noninterest-bearing	$	51,948		$	58,529		$	67,340		$	73,523		$	81,028		$	55,221		$	83,589
Interest-bearing	89,068			86,832			79,916			71,925			65,151			87,956			66,780
Total deposits	$	141,016		$	145,361		$	147,256		$	145,448		$	146,179		$	143,177		$	150,369
Performance Ratios
Return on average assets	1.40		%	1.83		%	1.66		%	1.64		%	1.83		%	1.61		%	1.88		%
Noninterest income to total revenue	37		%	39		%	39		%	39		%	44		%	38		%	42		%
Efficiency	42		%	41		%	40		%	39		%	42		%	41		%	42		%
Other Information
Consolidated revenue from:
Treasury Management (b)	$	778		$	785		$	843		$	753		$	659		$	1,563		$	1,205
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c)	$	13		$	27		$	15		$	26		$	20		$	40		$	36
Commercial mortgage loan servicing income (d)	44			39			52			66			70			83			138
Commercial mortgage servicing rights valuation, net of economic hedge	4			41			39			53			33			45			46
Total	$	61		$	107		$	106		$	145		$	123		$	168		$	220
Commercial mortgage servicing statistics
Serviced portfolio balance (in billions) (e)	$	280		$	281		$	281		$	282		$	282
MSR asset value (e)	$	1,106		$	1,061		$	1,113		$	1,132		$	988
Average loans by C&IB business (f)
Corporate Banking	$	117,259		$	119,602		$	115,126		$	110,665		$	104,721		$	118,424		$	99,187
Real Estate	47,692			47,297			48,031			45,837			44,202			47,495			43,710
Business Credit	30,613			30,180			30,087			28,930			28,246			30,398			27,395
Commercial Banking	8,225			8,430			8,683			9,008			9,459			8,327			9,751
Other	4,347			4,428			5,194			5,434			6,379			4,388			6,577
Total average loans	$	208,136		$	209,937		$	207,121		$	199,874		$	193,007		$	209,032		$	186,620
Credit-related statistics
Nonperforming assets (e)	$	738		$	801		$	761		$	779		$	674
Net charge-offs - loans and leases	$	93		$	85		$	100		$	33		$	11		$	178		$	10

(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 amortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.

(e)Presented as of period end.

(f)As the result of a business realignment within C&IB during the second quarter of 2023, certain loans were reclassified from Other to Corporate Banking in the prior periods to conform to the current period presentation.


THE PNC FINANCIAL SERVICES GROUP, INC.						Page 17

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	2023			2023			2022			2022			2022			2023			2022
Income Statement
Net interest income	$	125		$	127		$	152		$	165		$	153		$	252		$	291
Noninterest income	228			230			223			231			234			458			482
Total revenue	353			357			375			396			387			710			773
Provision for (recapture of) credit losses	(10)			9			17			4			5			(1)			7
Noninterest expense	280			280			291			274			270			560			521
Pretax earnings	83			68			67			118			112			151			245
Income taxes	20			16			15			28			26			36			57
Earnings	$	63		$	52		$	52		$	90		$	86		$	115		$	188
Average Balance Sheet
Loans
Consumer
Residential real estate	$	9,855		$	9,174		$	8,835		$	8,430		$	7,835		$	9,517		$	7,414
Other consumer	4,065			4,156			4,388			4,640			4,633			4,110			4,587
Total consumer	13,920			13,330			13,223			13,070			12,468			13,627			12,001
Commercial	1,229			1,246			1,291			1,328			1,560			1,237			1,704
Total loans	$	15,149		$	14,576		$	14,514		$	14,398		$	14,028		$	14,864		$	13,705
Total assets	$	15,562		$	14,997		$	14,935		$	14,820		$	14,449		$	15,282		$	14,126
Deposits
Noninterest-bearing	$	1,787		$	1,846		$	2,107		$	2,286		$	2,824		$	1,817		$	3,140
Interest-bearing	25,482			26,337			25,651			27,054			28,839			25,907			29,331
Total deposits	$	27,269		$	28,183		$	27,758		$	29,340		$	31,663		$	27,724		$	32,471
Performance Ratios
Return on average assets	1.62		%	1.41		%	1.38		%	2.41		%	2.39		%	1.52		%	2.68		%
Noninterest income to total revenue	65		%	64		%	59		%	58		%	60		%	65		%	62		%
Efficiency	79		%	78		%	78		%	69		%	70		%	79		%	67		%
Other Information
Nonperforming assets (b)	$	41		$	42		$	56		$	95		$	114
Net charge-offs (recoveries) - loans and leases	$	(2)					$	18		$	(2)		$	(1)		$	(2)		$	1
Brokerage account client assets (in billions) (b)	$	5		$	4		$	4		$	4		$	4
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management	$	176		$	177		$	173		$	166		$	167
Nondiscretionary client assets under administration	168			156			152			148			153
Total	$	344		$	333		$	325		$	314		$	320
Discretionary client assets under management
PNC Private Bank	$	111		$	108		$	105		$	99		$	103
Institutional Asset Management	65			69			68			67			64
Total	$	176		$	177		$	173		$	166		$	167

(a)See note (a) on page 13.

(b)As of period end.

(c)Excludes brokerage account client assets.


THE PNC FINANCIAL SERVICES GROUP, INC.						Page 18

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).

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.

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.


THE PNC FINANCIAL SERVICES GROUP, INC.						Page 19

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.

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. 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.

Troubled debt restructuring (TDR) – A loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. On January 1, 2023, we adopted ASU 2022-02, which eliminated the accounting guidance for TDRs.

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.

Form: 8-K

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