Form: 8-K

Current report filing

October 13, 2023

Documents



Exhibit 99.2

pncbanklogoa18.jpg



THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
THIRD QUARTER 2023
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
THIRD QUARTER 2023
(UNAUDITED)
Consolidated Results:
Page
6-7
9-11
Business Segment Results:
14-15
18-19

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 13, 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 Third Quarter 2023 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
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2
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17
18


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions, except per share data 2023 2023 2023 2022 2022 2023 2022
Interest Income
Loans $ 4,643  $ 4,523  $ 4,258  $ 3,860  $ 3,138  $ 13,424  $ 7,935 
Investment securities 892  883  885  836  715  2,660  1,890 
Other 668  538  516  413  279  1,722  502 
Total interest income 6,203  5,944  5,659  5,109  4,132  17,806  10,327 
Interest Expense
Deposits 1,792  1,531  1,291  812  340  4,614  455 
Borrowed funds 993  903  783  613  317  2,679  542 
Total interest expense 2,785  2,434  2,074  1,425  657  7,293  997 
Net interest income 3,418  3,510  3,585  3,684  3,475  10,513  9,330 
Noninterest Income
Asset management and brokerage 348  348  356  345  357  1,052  1,099 
Capital markets and advisory 168  213  262  336  299  643  960 
Card and cash management 689  697  659  671  671  2,045  1,962 
Lending and deposit services 315  298  306  296  287  919  838 
Residential and commercial mortgage 201  98  177  184  143  476  463 
Other (a) (b) 94  129  258  247  317  481  705 
Total noninterest income 1,815  1,783  2,018  2,079  2,074  5,616  6,027 
Total revenue 5,233  5,293  5,603  5,763  5,549  16,129  15,357 
Provision For Credit Losses 129  146  235  408  241  510  69 
Noninterest Expense
Personnel 1,773  1,846  1,826  1,943  1,805  5,445  5,301 
Occupancy 244  244  251  247  241  739  745 
Equipment 347  349  350  369  344  1,046  1,026 
Marketing 93  109  74  106  93  276  249 
Other 788  824  820  809  797  2,432  2,375 
Total noninterest expense 3,245  3,372  3,321  3,474  3,280  9,938  9,696 
Income before income taxes and noncontrolling interests 1,859  1,775  2,047  1,881  2,028  5,681  5,592 
Income taxes 289  275  353  333  388  917  1,027 
Net income 1,570  1,500  1,694  1,548  1,640  4,764  4,565 
Less: Net income attributable to noncontrolling interests 16  17  17  20  16  50  52 
Preferred stock dividends (c) 104  127  68  120  65  299  181 
Preferred stock discount accretion and
    redemptions		 2  2  2  1  1  6  4 
Net income attributable to common shareholders $ 1,448  $ 1,354  $ 1,607  $ 1,407  $ 1,558  $ 4,409  $ 4,328 
Earnings Per Common Share
Basic $ 3.60  $ 3.36  $ 3.98  $ 3.47  $ 3.78  $ 10.95  $ 10.39 
Diluted $ 3.60  $ 3.36  $ 3.98  $ 3.47  $ 3.78  $ 10.94  $ 10.39 
Average Common Shares Outstanding
Basic 400  401  401  404  410  401  414 
Diluted 400  401  402  404  410  401  415 
Efficiency 62  % 64  % 59  % 60  % 59  % 62  % 63  %
Noninterest income to total revenue 35  % 34  % 36  % 36  % 37  % 35  % 39  %
Effective tax rate (d) 15.5  % 15.5  % 17.2  % 17.7  % 19.1  % 16.1  % 18.4  %
(a)Includes net gains (losses) on sale of securities of less than $1 million, $(2) million, less than $1 million, $(3) million and less than $1 million for the quarters ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively, and $(2) million and $(4) million for the nine months ended September 30, 2023 and September 30, 2022, respectively.
(b)Includes Visa Class B derivative fair value adjustments of $(51) million, $(83) million, $(45) million, $(41) million and $13 million for the quarters ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively, and $(179) million and $1 million for the nine months ended September 30, 2023 and September 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)
September 30 June 30 March 31 December 31 September 30
In millions, except par value 2023 2023 2023 2022 2022
Assets
Cash and due from banks $ 5,300  $ 6,191  $ 5,940  $ 7,043  $ 6,548 
Interest-earning deposits with banks (a) 41,484  38,259  33,865  27,320  40,278 
Loans held for sale (b) 923  835  998  1,010  1,126 
Investment securities – available for sale 40,590  41,787  43,220  44,159  45,798 
Investment securities – held to maturity 91,797  93,874  95,019  95,175  90,653 
Loans (b) 318,416  321,761  326,475  326,025  315,400 
Allowance for loan and lease losses (4,767) (4,737) (4,741) (4,741) (4,581)
Net loans 313,649  317,024  321,734  321,284  310,819 
Equity investments 8,046  8,015  8,323  8,437  8,130 
Mortgage servicing rights 4,006  3,455  3,293  3,423  3,206 
Goodwill 10,987  10,987  10,987  10,987  10,987 
Other (b) 40,552  37,780  38,398  38,425  41,932 
Total assets $ 557,334  $ 558,207  $ 561,777  $ 557,263  $ 559,477 
Liabilities
Deposits
Noninterest-bearing $ 105,672  $ 110,527  $ 118,014  $ 124,486  $ 138,423 
Interest-bearing 317,937  316,962  318,819  311,796  299,771 
Total deposits 423,609  427,489  436,833  436,282  438,194 
Borrowed funds
Federal Home Loan Bank borrowings 36,000  34,000  32,020  32,075  30,075 
Senior debt 22,407  22,005  19,622  16,657  13,357 
Subordinated debt 4,728  5,548  5,630  6,307  7,286 
Other (b) 3,032  3,831  3,550  3,674  3,915 
Total borrowed funds 66,167  65,384  60,822  58,713  54,633 
Allowance for unfunded lending related commitments 640  663  672  694  682 
Accrued expenses and other liabilities (b) 17,437  15,325  14,376  15,762  19,245 
Total liabilities 507,853  508,861  512,703  511,451  512,754 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800,000,000 shares, issued 543,012,047, 543,012,047, 542,874,855, 542,874,829 and 542,768,817 shares 2,715  2,715  2,714  2,714  2,714 
Capital surplus 19,971  19,934  19,864  18,376  19,810 
Retained earnings 56,170  55,346  54,598  53,572  52,777 
Accumulated other comprehensive income (loss) (10,261) (9,525) (9,108) (10,172) (10,486)
Common stock held in treasury at cost: 144,671,252, 144,763,739, 143,781,812, 142,298,689 and 138,582,781 shares (19,141) (19,150) (19,024) (18,716) (18,127)
Total shareholders’ equity 49,454  49,320  49,044  45,774  46,688 
Noncontrolling interests 27  26  30  38  35 
Total equity 49,481  49,346  49,074  45,812  46,723 
Total liabilities and equity $ 557,334  $ 558,207  $ 561,777  $ 557,263  $ 559,477 
(a)Amounts include balances held with the Federal Reserve Bank of $41.1 billion, $37.8 billion, $32.5 billion, $26.9 billion and $39.8 billion as of September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our second quarter 2023 Form 10-Q included, and our third 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 Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2023 2023 2023 2022 2022 2023 2022
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 31,020  $ 31,180  $ 31,850  $ 31,818  $ 32,500  $ 31,347  $ 45,633 
Non-agency 627  663 689 714 748 659 885 
Commercial mortgage-backed 2,880  2,948 3,102 3,377 3,489 2,976 4,354 
Asset-backed 989 575 218 105 110 597 2,885 
U.S. Treasury and government agencies 7,996 8,231 9,088 10,345 11,789 8,434 25,448 
Other 2,931 2,997 3,263 3,370 3,506 3,062 4,189 
Total securities available for sale 46,443 46,594 48,210 49,729 52,142 47,075 83,394
Securities held to maturity
Residential mortgage-backed 44,112  45,033  45,616  44,184  39,329  44,914  24,317 
Commercial mortgage-backed 2,346  2,396  2,453  2,323  2,069  2,398  1,089 
Asset-backed 6,463  6,712  7,026  6,995  6,571 6,732 3,587 
U.S. Treasury and government agencies 37,043 36,912  36,748 36,441  34,279 36,902 21,243 
Other 3,256 3,391 3,338 3,218 2,600 3,329 1,585 
Total securities held to maturity 93,220 94,444 95,181 93,161 84,848 94,275 51,821
Total investment securities 139,663 141,038 143,391 142,890 136,990 141,350 135,215
Loans
Commercial and industrial 175,206 180,878 182,017 179,111 172,788 179,342 165,142 
Commercial real estate 36,032 35,938 36,110 36,181 35,140 36,026 34,541 
Equipment lease financing 6,441 6,364 6,452 6,275 6,202 6,419 6,168 
Consumer 54,744 55,070 55,020 54,809 54,563 54,944 54,692 
Residential real estate 47,081 46,284 45,927 45,499 44,333 46,435 42,378 
Total loans 319,504 324,534 325,526 321,875 313,026 323,166 302,921
Interest-earning deposits with banks (c) 38,352 31,433 34,054 30,395 31,892 34,629 44,641 
Other interest-earning assets 8,777 9,215 8,806 9,690 9,560 8,933 9,637 
Total interest-earning assets 506,296 506,220 511,777 504,850 491,468 508,078 492,414
Noninterest-earning assets 48,667 49,287 50,555 52,356 55,629 49,496 56,029 
Total assets $ 554,963  $ 555,507  $ 562,332  $ 557,206  $ 547,097  $ 557,574  $ 548,443 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 64,310  $ 63,691  $ 65,753  $ 63,944  $ 60,934  $ 64,579  $ 60,510 
Demand 123,730 124,111 124,376 122,501 120,358 124,070 117,485 
Savings 100,643 102,415 104,408 102,020 106,761 102,475 108,112 
Time deposits 25,872 22,342 20,519 12,982 10,020 22,931 12,125 
Total interest-bearing deposits 314,555 312,559 315,056 301,447 298,073 314,055 298,232
Borrowed funds
Federal Home Loan Bank borrowings 34,109 33,752 32,056  30,640 16,708 33,313 7,957 
Senior debt 23,479 20,910 19,679 16,312 14,597 21,370 16,249 
Subordinated debt 5,293 5,850 6,100 6,933 7,614 5,745 7,131 
Other 4,584 5,180 5,133 5,346 5,342 4,964 5,457 
Total borrowed funds 67,465 65,692 62,968 59,231 44,261 65,392 36,794
Total interest-bearing liabilities 382,020 378,251 378,024 360,678 342,334 379,447 335,026
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 107,981 113,178 121,176 133,461 141,167 114,063 148,062 
Accrued expenses and other liabilities 15,629 15,063 16,014 17,461 15,699 15,567 16,061 
Equity 49,333 49,015 47,118 45,606 47,897 48,497 49,294 
Total liabilities and equity $ 554,963  $ 555,507  $ 562,332  $ 557,206  $ 547,097  $ 557,574  $ 548,443 
(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 $37.9 billion, $30.6 billion, $33.5 billion, $30.0 billion and $31.5 billion for the three months ended September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022 and $34.0 billion and $44.2 billion for the nine months ended September 30, 2023 and September 30,2022, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
2023 2023 2023 2022 2022 2023 2022
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 2.73  % 2.67  % 2.67  % 2.54  % 2.36  % 2.69  % 2.01  %
Non-agency 10.42  % 9.39  % 8.53  % 7.85  % 7.62  % 9.42  % 7.57  %
Commercial mortgage-backed 3.41  % 2.84  % 2.62  % 2.75  % 2.70  % 2.95  % 2.49  %
Asset-backed 6.30  % 6.56  % 7.04  % 11.98  % 6.31  % 6.44  % 1.56  %
U.S. Treasury and government agencies 2.28  % 2.20  % 2.05  % 1.96  % 1.73  % 2.17  % 1.36  %
Other 2.58  % 2.55  % 2.47  % 2.39  % 2.47  % 2.53  % 2.61  %
Total securities available for sale 2.87  % 2.73  % 2.64  % 2.52  % 2.33  % 2.75  % 1.91  %
Securities held to maturity
Residential mortgage-backed 2.72  % 2.72  % 2.74  % 2.60  % 2.30  % 2.73  % 2.14  %
Commercial mortgage-backed 5.55  % 5.35  % 4.95  % 4.57  % 3.50  % 5.28  % 3.04  %
Asset-backed 4.36  % 4.10  % 3.97  % 3.44  % 2.58  % 4.14  % 2.31  %
U.S. Treasury and government agencies 1.34  % 1.34  % 1.33  % 1.30  % 1.19  % 1.34  % 1.14  %
Other 4.57  % 4.65  % 4.62  % 4.47  % 4.10  % 4.61  % 4.12  %
Total securities held to maturity 2.42  % 2.41  % 2.41  % 2.27  % 1.96  % 2.41  % 1.82  %
Total investment securities 2.57  % 2.52  % 2.49  % 2.36  % 2.10  % 2.52  % 1.88  %
Loans
Commercial and industrial 5.86  % 5.70  % 5.34  % 4.70  % 3.69  % 5.64  % 3.14  %
Commercial real estate 6.59  % 6.37  % 6.02  % 5.28  % 4.27  % 6.33  % 3.44  %
Equipment lease financing 4.72  % 4.51  % 4.28  % 4.18  % 3.85  % 4.51  % 3.73  %
Consumer 6.89  % 6.57  % 6.34  % 5.88  % 5.32  % 6.60  % 4.89  %
Residential real estate 3.52  % 3.41  % 3.35  % 3.28  % 3.21  % 3.43  % 3.12  %
Total loans 5.75  % 5.57  % 5.29  % 4.75  % 3.98  % 5.54  % 3.50  %
Interest-earning deposits with banks 5.44  % 5.10  % 4.58  % 3.76  % 2.32  % 5.05  % 0.87  %
Other interest-earning assets 6.66  % 5.96  % 5.75  % 5.20  % 3.94  % 6.12  % 2.92  %
Total yield on interest-earning assets 4.87  % 4.70  % 4.46  % 4.02  % 3.35  % 4.68  % 2.80  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 3.10  % 2.79  % 2.40  % 1.75  % 0.85  % 2.76  % 0.36  %
Demand 2.15  % 1.89  % 1.58  % 1.14  % 0.59  % 1.87  % 0.26  %
Savings 1.49  % 1.26  % 1.03  % 0.50  % 0.09  % 1.26  % 0.06  %
Time deposits 3.67  % 3.26  % 3.00  % 1.45  % 0.26  % 3.34  % 0.18  %
Total interest-bearing deposits 2.26  % 1.96  % 1.66  % 1.07  % 0.45  % 1.96  % 0.20  %
Borrowed funds
Federal Home Loan Bank borrowings 5.55  % 5.28  % 4.80  % 3.92  % 2.60  % 5.22  % 2.20  %
Senior debt 6.17  % 5.91  % 5.39  % 4.30  % 2.96  % 5.85  % 1.80  %
Subordinated debt 6.52  % 6.19  % 5.69  % 4.79  % 3.43  % 6.12  % 2.30  %
Other
4.49  % 3.79  % 3.70  % 3.24  % 2.20  % 3.98  % 1.54  %
Total borrowed funds 5.77  % 5.44  % 4.98  % 4.07  % 2.81  % 5.41  % 1.95  %
Total rate on interest-bearing liabilities 2.86  % 2.56  % 2.20  % 1.55  % 0.75  % 2.54  % 0.39  %
Interest rate spread 2.01  % 2.14  % 2.26  % 2.47  % 2.60  % 2.14  % 2.41  %
Benefit from use of noninterest-bearing sources (b) 0.70  % 0.65  % 0.58  % 0.45  % 0.22  % 0.64  % 0.13  %
Net interest margin 2.71  % 2.79  % 2.84  % 2.92  % 2.82  % 2.78  % 2.54  %
(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 September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022 and September 30, 2022 were $36 million, $37 million, $38 million, $36 million and $29 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2023 and September 30, 2022 were $111 million and $76 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)
September 30 June 30 March 31 December 31 September 30
In millions 2023 2023 2023 2022 2022
Commercial
Commercial and industrial
Manufacturing $ 29,163  $ 30,586  $ 32,132  $ 30,845  $ 28,629 
Retail/wholesale trade 28,284 28,751 29,172 29,176 27,532
Financial services 22,770 21,823 22,534 21,320 21,590
Service providers 21,680 22,277 23,186 23,548 22,043
Real estate related (a) 16,182 17,200 17,548 17,780 17,513
Technology, media & telecommunications 10,989 11,158 11,338 11,845 11,366
Health care 10,092 10,186 10,537 10,649 10,420
Transportation and warehousing 7,891 8,048 7,824 7,858 7,977
Other industries 27,112 27,600 28,726 29,198 26,743
Total commercial and industrial 174,163  177,629  182,997  182,219  173,813 
Commercial real estate 35,776  35,928  35,991  36,316  35,592 
Equipment lease financing 6,493  6,400  6,424  6,514  6,192 
Total commercial 216,432 219,957 225,412 225,049 215,597
Consumer
Residential real estate 47,359  46,834  46,067  45,889  45,057 
Home equity 26,159  26,200  26,203  25,983  25,367 
Automobile 14,940  15,065  14,923  14,836  15,025 
Credit card 7,060  7,092  6,961  7,069  6,774 
Education 2,020  2,058  2,131  2,173  2,287 
Other consumer 4,446  4,555  4,778  5,026  5,293 
Total consumer 101,984  101,804  101,063  100,976  99,803 
Total loans $ 318,416  $ 321,761  $ 326,475  $ 326,025  $ 315,400 
(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 Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
Dollars in millions 2023 2023 2023 2022 2022 2023 2022
Allowance for loan and lease losses
Beginning balance $ 4,737  $ 4,741  $ 4,741  $ 4,581  $ 4,462  $ 4,741  $ 4,868 
Adoption of ASU 2022-02 (a)     (35) (35)
Beginning balance, adjusted 4,737  4,741  4,706  4,581  4,462  4,706  4,868 
Gross charge-offs:
Commercial and industrial (43) (45) (104) (121) (65) (192) (136)
Commercial real estate (25) (87) (12) (22) (7) (124) (22)
Equipment lease financing (4) (3) (4) (2) (1) (11) (4)
Residential real estate (1) (2) (3) (2) (2) (6) (9)
Home equity (4) (5) (6) (6) (3) (15) (9)
Automobile (30) (28) (33) (34) (32) (91) (118)
Credit card (78) (80) (74) (62) (59) (232) (194)
Education (4) (5) (4) (4) (4) (13) (12)
Other consumer (44) (38) (42) (64) (49) (124) (164)
Total gross charge-offs (233) (293) (282) (317) (222) (808) (668)
Recoveries:
Commercial and industrial 45  33  20  33  23  98  68 
Commercial real estate 2    2  2  1  4  3 
Equipment lease financing 2  3  3  1  1  8  7 
Residential real estate 3  4  3  2  4  10  15 
Home equity 12  13  11  13  19  36  58 
Automobile 26  27  24  24  30  77  100 
Credit card 10  11  11  8  12  32  43 
Education 1  2  2  1  1  5  4 
Other consumer 11  6  11  9  12  28  31 
Total recoveries 112  99  87  93  103  298  329 
Net (charge-offs) / recoveries:
Commercial and industrial 2  (12) (84) (88) (42) (94) (68)
Commercial real estate (23) (87) (10) (20) (6) (120) (19)
Equipment lease financing (2) (1) (1)   (3) 3 
Residential real estate 2  2  2  4  6 
Home equity 8  8  5  7  16  21  49 
Automobile (4) (1) (9) (10) (2) (14) (18)
Credit card (68) (69) (63) (54) (47) (200) (151)
Education (3) (3) (2) (3) (3) (8) (8)
Other consumer (33) (32) (31) (55) (37) (96) (133)
Total net (charge-offs) (121) (194) (195) (224) (119) (510) (339)
Provision for credit losses (b) 153  189  229  380  241  571  59 
Other (2) 1  1  4  (3)   (7)
Ending balance $ 4,767  $ 4,737  $ 4,741  $ 4,741  $ 4,581  $ 4,767  $ 4,581 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (23) $ (99) $ (95) $ (109) $ (48) $ (217) $ (84)
Consumer net charge-offs (98) (95) (100) (115) (71) (293) (255)
Total net charge-offs $ (121) $ (194) $ (195) $ (224) $ (119) $ (510) $ (339)
Net charge-offs to average loans (annualized) 0.15  % 0.24  % 0.24  % 0.28  % 0.15  % 0.21  % 0.15  %
Commercial 0.04  % 0.18  % 0.17  % 0.20  % 0.09  % 0.13  % 0.05  %
Consumer 0.38  % 0.38  % 0.40  % 0.45  % 0.28  % 0.39  % 0.35  %
(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 second quarter 2023 Form 10-Q included, and our third 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 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 Credit Losses
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2023 2023 2023 2022 2022 2023 2022
Provision for credit losses
Loans and leases $ 153  $ 189  $ 229  $ 380  $ 241  $ 571  $ 59 
Unfunded lending related commitments (23) (9) (22) 12  1  (54) 20 
Investment securities (10)   (1) 10  3  (11) 7 
Other financial assets 9  (34) 29  6  (4) 4  (17)
Total provision for credit losses $ 129  $ 146  $ 235  $ 408  $ 241  $ 510  $ 69 


Table 8: Allowance for Credit Losses by Loan Class (a)
September 30, 2023 June 30, 2023 September 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 $ 1,843  $ 174,163  1.06  % $ 1,836  $ 177,629  1.03  % $ 1,974  $ 173,813  1.14  %
Commercial real estate 1,270  35,776  3.55  % 1,206  35,928  3.36  % 994  35,592  2.79  %
Equipment lease financing 109  6,493  1.68  % 100  6,400  1.56  % 93  6,192  1.50  %
Total commercial 3,222  216,432  1.49  % 3,142  219,957  1.43  % 3,061  215,597  1.42  %
Consumer
Residential real estate 62  47,359  0.13  % 72  46,834  0.15  % 50  45,057  0.11  %
Home equity 288  26,159  1.10  % 294  26,200  1.12  % 215  25,367  0.85  %
Automobile 169  14,940  1.13  % 188  15,065  1.25  % 214  15,025  1.42  %
Credit card 762  7,060  10.79  % 765  7,092  10.79  % 732  6,774  10.81  %
Education 56  2,020  2.77  % 61  2,058  2.96  % 64  2,287  2.80  %
Other consumer 208  4,446  4.68  % 215  4,555  4.72  % 245  5,293  4.63  %
Total consumer 1,545  101,984  1.51  % 1,595  101,804  1.57  % 1,520  99,803  1.52  %
Total
 4,767  $ 318,416  1.50  % 4,737  $ 321,761  1.47  % 4,581  $ 315,400  1.45  %
Allowance for unfunded lending related commitments
 640  663  682 
Allowance for credit losses
 $ 5,407  $ 5,400  $ 5,263 
Supplemental Information
Allowance for credit losses to total loans
 1.70  % 1.68  % 1.67  %
Commercial 1.73  % 1.68  % 1.70  %
Consumer 1.62  % 1.67  % 1.60  %
(a)    Excludes allowances for investment securities and other financial assets, which together totaled $131 million, $171 million and $162 million at September 30, 2023, June 30, 2023 and September 30, 2022, respectively.

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

Table 9: Nonperforming Assets by Type
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2023 2023 2023 2022 2022
Nonperforming loans (a)
Commercial
Commercial and industrial
Service providers $ 162  $ 114  $ 128  $ 174  $ 223 
Technology, media & telecommunications 51  55  22  20  20 
Transportation and warehousing 44  33  24  27  29 
Retail/wholesale trade 41  41  82  151  158 
Health care 37  60  57  50  45 
Manufacturing 34  50  105  85  88 
Real estate related (b) 31  42  43  50  47 
Other industries 58  75  87  106  138 
Total commercial and industrial 458  470  548  663  748 
Commercial real estate 723  350  337  189  148 
Equipment lease financing 30  7  6  6  7 
Total commercial 1,211  827  891  858  903 
Consumer (c)
Residential real estate 330  429  432  424  429 
Home equity 446  506  523  526  530 
Automobile 114  133  145  155  167 
Credit card 11  10  9  8  6 
Other consumer 11  8  10  14  33 
Total consumer 912  1,086  1,119  1,127  1,165 
Total nonperforming loans (d) 2,123  1,913  2,010  1,985  2,068 
OREO and foreclosed assets 35  36  38  34  33 
Total nonperforming assets $ 2,158  $ 1,949  $ 2,048  $ 2,019  $ 2,101 
Nonperforming loans to total loans 0.67  % 0.59  % 0.62  % 0.61  % 0.66  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.68  % 0.61  % 0.63  % 0.62  % 0.67  %
Nonperforming assets to total assets 0.39  % 0.35  % 0.36  % 0.36  % 0.38  %
Allowance for loan and lease losses to nonperforming loans 225  % 248  % 236  % 239  % 222  %
(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 second quarter 2023 Form 10-Q included, and our third 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
July 1, 2023 - April 1, 2023 - January 1, 2023 - October 1, 2022 - July 1, 2022 -
In millions September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 September 30, 2022
Beginning balance $ 1,949  $ 2,048  $ 2,019  $ 2,101  $ 2,075 
New nonperforming assets 641  410  452  346  438 
Charge-offs and valuation adjustments (91) (135) (122) (174) (79)
Principal activity, including paydowns and payoffs (112) (297) (172) (139) (182)
Asset sales and transfers to loans held for sale (7) (12) (46) (22) (3)
Returned to performing status (a) (222) (65) (83) (93) (148)
Ending balance $ 2,158  $ 1,949  $ 2,048  $ 2,019  $ 2,101 
(a)Amounts for the three months ended September 30, 2023 include updates to our return to accrual guidelines to bring consistency across consumer loan classes as to how and when loans become eligible to return to performing status.



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

The CARES Act Credit reporting rules expired in the third quarter of 2023 and as such, delinquency status at September 30, 2023 is being reported for all loans based on the contractual terms of the loan. Prior period amounts continue to be presented in accordance with the credit reporting rules under the CARES Act, which required certain loans modified due to pandemic related hardships to not be reported as past due based on the contractual terms of the loan, even when borrowers may not have made payments on their loans during the modification period.

Table 11: Accruing Loans Past Due 30 to 59 Days (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2023 2023 2023 2022 2022
Commercial
Commercial and industrial $ 84 $ 64 $ 119 $ 169 $ 321
Commercial real estate 2 10 25 19 11
Equipment lease financing 25 14 33 20 6
Total commercial 111 88 177 208 338
Consumer
Residential real estate
Non government insured 179 151 167 190 223
Government insured 78 77 78 91 75
Home equity 59 56 48 53 46
Automobile 83 84 79 106 96
Credit card 50 49 48 50 44
Education
Non government insured 6 5 6 5 6
Government insured
 26 28 29 29 30
Other consumer 15 17 13 15 21
Total consumer 496 467 468 539 541
Total $ 607 $ 555 $ 645 $ 747 $ 879
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.19  % 0.17  % 0.20  % 0.23  % 0.28  %
Commercial 0.05  % 0.04  % 0.08  % 0.09  % 0.16  %
Consumer 0.49  % 0.46  % 0.46  % 0.53  % 0.54  %
(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)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2023 2023 2023 2022 2022
Commercial
Commercial and industrial $ 32 $ 47 $ 21 $ 27 $ 55
Commercial real estate 2 1 4 4
Equipment lease financing 6 5 5 4 6
Total commercial 40 52 27 35 65
Consumer
Residential real estate
Non government insured 52 36 43 54 49
Government insured 51 50 55 58 46
Home equity 22 18 18 20 16
Automobile 19 20 18 25 21
Credit card 38 36 35 35 30
Education
Non government insured
 3 2 4 2 4
Government insured
 19 15 17 20 22
Other consumer 9 9 8 12 15
Total consumer 213 186 198 226 203
Total $ 253 $ 238 $ 225 $ 261 $ 268
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.08  % 0.07  % 0.07  % 0.08  % 0.08  %
Commercial 0.02  % 0.02  % 0.01  % 0.02  % 0.03  %
Consumer 0.21  % 0.18  % 0.20  % 0.22  % 0.20  %
(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)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2023 2023 2023 2022 2022
Commercial
Commercial and industrial $ 102 $ 112 $ 134 $ 137 $ 139
Commercial real estate 5
Total commercial 102 112 134 137 144
Consumer
Residential real estate
Non government insured 36 30 26 32 30
Government insured 146 144 152 167 166
Automobile 6 5 5 7 6
Credit card 80 71 74 70 58
Education
Non government insured 2 2 2 2 2
Government insured
 46 46 54 57 61
Other consumer 9 9 9 10 12
Total consumer 325 307 322 345 335
Total $ 427 $ 419 $ 456 $ 482 $ 479
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.13  % 0.13  % 0.14  % 0.15  % 0.15  %
Commercial 0.05  % 0.05  % 0.06  % 0.06  % 0.07  %
Consumer 0.32  % 0.30  % 0.32  % 0.34  % 0.34  %
Total accruing loans past due $ 1,287 $ 1,212 $ 1,326 $ 1,490 $ 1,626
Commercial $ 253 $ 252 $ 338 $ 380 $ 547
Consumer $ 1,034 $ 960 $ 988 $ 1,110 $ 1,079
Total accruing loans past due to total loans 0.40  % 0.38  % 0.41  % 0.46  % 0.52  %
Commercial 0.12  % 0.11  % 0.15  % 0.17  % 0.25  %
Consumer 1.01  % 0.94  % 0.98  % 1.10  % 1.08  %
(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
September 30 June 30 March 31 December 31 September 30
2023 2023 2023 2022 2022
Full-time employees
Retail Banking 29,692  30,446  31,583  32,467  33,288 
Other full-time employees 27,725  27,785  27,874  27,427  26,328 
Total full-time employees 57,417  58,231  59,457  59,894  59,616 
Part-time employees
Retail Banking 1,480  1,567  1,537  1,577  1,520 
Other part-time employees 70  503  79  74  77 
Total part-time employees 1,550  2,070  1,616  1,651  1,597 
Total 58,967  60,301  61,073  61,545  61,213 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 13
Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2023 2023 2023 2022 2022 2023 2022
Net Income
Retail Banking $ 1,094  $ 954  $ 647  $ 752  $ 560  $ 2,695  $ 1,222 
Corporate & Institutional Banking 960  817  1,059  982  929  2,836  2,888 
Asset Management Group 73  63  52  52  90  188  278 
Other (573) (351) (81) (258) 45  (1,005) 125 
Net income excluding noncontrolling
  interests		 $ 1,554  $ 1,483  $ 1,677  $ 1,528  $ 1,624  $ 4,714  $ 4,513 
  
Revenue
Retail Banking $ 3,360  $ 3,150  $ 3,024  $ 3,079  $ 2,742  $ 9,534  $ 7,428 
Corporate & Institutional Banking 2,254  2,202  2,300  2,451  2,255  6,756  6,440 
Asset Management Group 362  353  357  375  396  1,072  1,169 
Other (743) (412) (78) (142) 156  (1,233) 320 
Total revenue $ 5,233  $ 5,293  $ 5,603  $ 5,763  $ 5,549  $ 16,129  $ 15,357 
(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 Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
Dollars in millions 2023 2023 2023 2022 2022 2023 2022
Income Statement
Net interest income $ 2,576  $ 2,448  $ 2,281  $ 2,330  $ 2,017  $ 7,305  $ 5,210 
Noninterest income 784  702  743  749  725  2,229  2,218 
Total revenue 3,360  3,150  3,024  3,079  2,742  9,534  7,428 
Provision for (recapture of) credit losses 42  (14) 238  193  92  266  66 
Noninterest expense 1,876  1,904  1,927  1,892  1,901  5,707  5,706 
Pretax earnings 1,442  1,260  859  994  749  3,561  1,656 
Income taxes 337  295  202  232  175  834  389 
Noncontrolling interests 11  11  10  10  14  32  45 
Earnings $ 1,094  $ 954  752  $ 647  322  $ 752  $ 560  $ 2,695  $ 1,222 
Average Balance Sheet
Loans held for sale $ 633  $ 614  $ 542  $ 737  $ 837  $ 597  $ 991 
Loans
Consumer
Residential real estate $ 35,107  $ 35,150  $ 35,421  $ 35,286  $ 34,465  $ 35,225  $ 33,088 
Home equity 24,591  24,663  24,571  24,126  23,393  24,608  22,916 
Automobile 14,976  15,005  14,918  14,793  15,088  14,966  15,638 
Credit card 7,075  7,015  6,904  6,882  6,684  6,999  6,532 
Education 2,057  2,115  2,188  2,257  2,327  2,119  2,422 
Other consumer 1,882  1,929  1,990  2,049  2,092  1,934  2,204 
Total consumer 85,688  85,877  85,992  85,393  84,049  85,851  82,800 
Commercial 11,733  11,708  11,438  11,181  10,881  11,628  11,176 
Total loans $ 97,421  $ 97,585  $ 97,430  $ 96,574  $ 94,930  $ 97,479  $ 93,976 
Total assets $ 114,724  $ 114,826  $ 115,384  $ 115,827  $ 114,619  $ 114,975  $ 113,157 
Deposits
Noninterest-bearing $ 58,110  $ 59,464  $ 60,801  $ 64,031  $ 65,405  $ 59,448  $ 65,026 
Interest-bearing 195,560  197,854  201,720  195,743  198,956  198,356  200,918 
Total deposits $ 253,670  $ 257,318  $ 262,521  $ 259,774  $ 264,361  $ 257,804  $ 265,944 
Performance Ratios
Return on average assets 3.78  % 3.33  % 2.27  % 2.58  % 1.94  % 3.13  % 1.44  %
Noninterest income to total revenue 23  % 22  % 25  % 24  % 26  % 23  % 30  %
Efficiency 56  % 60  % 64  % 61  % 69  % 60  % 77  %
(a)See note (a) on page 13.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 15
Retail Banking (Unaudited) (Continued)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
Dollars in millions, except as noted 2023 2023 2023 2022 2022 2023 2022
Supplemental Noninterest Income Information
Asset management and brokerage $ 130  $ 123  $ 131  $ 128  $ 131  $ 384  $ 400 
Card and cash management $ 329  $ 344  $ 324  $ 335  $ 344  $ 997  $ 1,003 
Lending and deposit services $ 193  $ 176  $ 181  $ 172  $ 167  $ 550  $ 498 
Residential and commercial mortgage $ 128  $ 75  $ 104  $ 111  $ 38  $ 307  $ 208 
Residential Mortgage Information
Residential mortgage servicing statistics
 (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 213  $ 191  $ 188  $ 190  $ 170 
Serviced portfolio acquisitions $ 25  $ 7  $ 2  $ 24  $ 29  $ 34  $ 50 
MSR asset value (b) $ 2.8  $ 2.3  $ 2.2  $ 2.3  $ 2.1 
MSR capitalization value (in basis points) (b) 133  123  119  122  122 
Servicing income: (in millions)
Servicing fees, net (c) $ 67  $ 67  $ 78  $ 73  $ 50  $ 212  $ 119 
Mortgage servicing rights valuation net of economic hedge
 $ 37  $ (9) $ 14  $ 24  $ (30) $ 42  $ (15)
Residential mortgage loan statistics
Loan origination volume (in billions) $ 2.1  $ 2.4  $ 1.4  $ 2.1  $ 3.1  $ 5.9  $ 13.0 
Loan sale margin percentage 2.43  % 2.23  % 2.26  % 2.20  % 1.97  % 2.31  % 2.13  %
Percentage of originations represented by:
Purchase volume (d) 87  % 90  % 84  % 88  % 85  % 87  % 64  %
Refinance volume 13  % 10  % 16  % 12  % 15  % 13  % 36  %
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e) 68  % 65  % 65  % 65  % 65  % 66  % 64  %
Digital consumer customers (f) 78  % 76  % 75  % 76  % 78  % 77  % 78  %
Credit-related statistics
Nonperforming assets $ 856  $ 981  $ 1,009  $ 1,003  $ 1,027 
Net charge-offs - loans and leases $ 114  $ 109  $ 112  $ 108  $ 98  $ 335  $ 327 
Other statistics
ATMs 8,476  8,566  8,697  8,933  9,169 
Branches (g) 2,303  2,361  2,450  2,518  2,527 
Brokerage account client assets (in billions) (h) $ 73  $ 75  $ 73  $ 70  $ 67 
(a)Represents mortgage loan servicing balances for third parties and the related income.
(b)Presented as of period end, except for average customer-related statistics and net charge-offs, which are both shown for the three and nine months ended.
(c)Servicing fees net of impact of decrease in MSR value due to passage of time, including the impact from 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 Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
Dollars in millions 2023 2023 2023 2022 2022 2023 2022
Income Statement
Net interest income $ 1,419  $ 1,381  $ 1,414  $ 1,489  $ 1,368  $ 4,214  $ 3,781 
Noninterest income 835  821  886  962  887  2,542  2,659 
Total revenue 2,254  2,202  2,300  2,451  2,255  6,756  6,440 
Provision for (recapture of) credit losses 102  209  (28) 183  150  283  15 
Noninterest expense 895  921  939  990  890  2,755  2,661 
Pretax earnings 1,257  1,072  1,389  1,278  1,215  3,718  3,764 
Income taxes 292  250  325  291  281  867  864 
Noncontrolling interests 5  5  5  5  5  15  12 
Earnings $ 960  $ 817  $ 1,059  $ 982  $ 929  $ 2,836  $ 2,888 
Average Balance Sheet
Loans held for sale $ 283  $ 440  $ 456  $ 337  $ 449  $ 392  $ 522 
Loans
Commercial
Commercial and industrial $ 161,810  $ 167,357  $ 168,874  $ 166,176  $ 160,140  $ 165,987  $ 151,971 
Commercial real estate 34,587  34,410  34,605  34,663  33,525  34,534  32,938 
Equipment lease financing 6,441  6,364  6,451  6,274  6,202  6,419  6,168 
Total commercial 202,838  208,131  209,930  207,113  199,867  206,940  191,077 
Consumer 4  5  7  8  7  6  9 
Total loans $ 202,842  $ 208,136  $ 209,937  $ 207,121  $ 199,874  $ 206,946  $ 191,086 
Total assets $ 230,082  $ 234,174  $ 234,536  $ 234,120  $ 224,984  $ 232,914  $ 215,163 
Deposits
Noninterest-bearing $ 48,123  $ 51,948  $ 58,529  $ 67,340  $ 73,523  $ 52,829  $ 80,197 
Interest-bearing 93,563  89,068  86,832  79,916  71,925  89,845  68,514 
Total deposits $ 141,686  $ 141,016  $ 145,361  $ 147,256  $ 145,448  $ 142,674  $ 148,711 
Performance Ratios
Return on average assets 1.66  % 1.40  % 1.83  % 1.66  % 1.64  % 1.63  % 1.79  %
Noninterest income to total revenue 37  % 37  % 39  % 39  % 39  % 38  % 41  %
Efficiency 40  % 42  % 41  % 40  % 39  % 41  % 41  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 849  $ 778  $ 785  $ 843  $ 753  $ 2,412  $ 1,958 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 17  $ 13  $ 27  $ 15  $ 26  $ 57  $ 62 
Commercial mortgage loan servicing income (d) 43  44  39  52  66  126  204 
Commercial mortgage servicing rights valuation, net of economic hedge 54  4  41  39  53  99  99 
Total $ 114  $ 61  $ 107  $ 106  $ 145  $ 282  $ 365 
Commercial mortgage servicing statistics
Serviced portfolio balance (in billions) (e) $ 282  $ 280  $ 281  $ 281  $ 282 
MSR asset value (e) $ 1,169  $ 1,106  $ 1,061  $ 1,113  $ 1,132 
Average loans by C&IB business (f)
Corporate Banking $ 113,538  $ 117,259  $ 119,602  $ 115,126  $ 110,665  $ 116,777  $ 103,055 
Real Estate 47,234  47,692  47,297  48,031  45,837  47,407  44,427 
Business Credit 29,900  30,613  30,180  30,087  28,930  30,230  27,913 
Commercial Banking 7,861  8,225  8,430  8,683  9,008  8,170  9,500 
Other 4,309  4,347  4,428  5,194  5,434  4,362  6,191 
Total average loans $ 202,842  $ 208,136  $ 209,937  $ 207,121  $ 199,874  $ 206,946  $ 191,086 
Credit-related statistics
Nonperforming assets (e) $ 1,130  $ 738  $ 801  $ 761  $ 779 
Net charge-offs - loans and leases $ 12  $ 93  $ 85  $ 100  $ 33  $ 190  $ 43 
(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.

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Table 18: Asset Management Group (Unaudited) (a)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
Dollars in millions, except as noted 2023 2023 2023 2022 2022 2023 2022
Income Statement
Net interest income $ 139  $ 125  $ 127  $ 152  $ 165  $ 391  $ 456 
Noninterest income 223  228  230  223  231  681  713 
Total revenue 362  353  357  375  396  1,072  1,169 
Provision for (recapture of) credit losses (4) (10) 9  17  4  (5) 11 
Noninterest expense 271  280  280  291  274  831  795 
Pretax earnings 95  83  68  67  118  246  363 
Income taxes 22  20  16  15  28  58  85 
Earnings $ 73  $ 63  $ 52  $ 52  $ 90  $ 188  $ 278 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 10,750  $ 9,855  $ 9,174  $ 8,835  $ 8,430  $ 9,932  $ 7,756 
Other consumer 3,901  4,065  4,156  4,388  4,640  4,040  4,605 
Total consumer 14,651  13,920  13,330  13,223  13,070  13,972  12,361 
Commercial 1,090  1,229  1,246  1,291  1,328  1,188  1,577 
Total loans $ 15,741  $ 15,149  $ 14,576  $ 14,514  $ 14,398  $ 15,160  $ 13,938 
Total assets $ 16,161  $ 15,562  $ 14,997  $ 14,935  $ 14,820  $ 15,578  $ 14,360 
Deposits
Noninterest-bearing $ 1,756  $ 1,787  $ 1,846  $ 2,107  $ 2,286  $ 1,796  $ 2,852 
Interest-bearing 25,417  25,482  26,337  25,651  27,054  25,742  28,564 
Total deposits $ 27,173  $ 27,269  $ 28,183  $ 27,758  $ 29,340  $ 27,538  $ 31,416 
Performance Ratios
Return on average assets 1.79  % 1.62  % 1.41  % 1.38  % 2.41  % 1.61  % 2.59  %
Noninterest income to total revenue 62  % 65  % 64  % 59  % 58  % 64  % 61  %
Efficiency 75  % 79  % 78  % 78  % 69  % 78  % 68  %
Other Information
Nonperforming assets (b) $ 39  $ 41  $ 42  $ 56  $ 95 
Net charge-offs (recoveries) - loans and leases   $ (2) $ 18  $ (2) $ (2) $ (1)
Brokerage account client assets (in billions) (b) $ 5  $ 5  $ 4  $ 4  $ 4 
Client Assets Under Administration
     (in billions) (b) (c)
Discretionary client assets under management $ 176  $ 176  $ 177  $ 173  $ 166 
Nondiscretionary client assets under administration 170  168  156  152  148 
Total $ 346  $ 344  $ 333  $ 325  $ 314 
Discretionary client assets under management
PNC Private Bank $ 109  $ 111  $ 108  $ 105  $ 99 
Institutional Asset Management 67  65  69  68  67 
Total $ 176  $ 176  $ 177  $ 173  $ 166 
(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).

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.


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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.