Form: 8-K

Current report filing

April 16, 2024

Documents


Exhibit 99.2






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THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
FIRST QUARTER 2024
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
FIRST QUARTER 2024
(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 April 16, 2024. 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.



THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to First Quarter 2024 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table Description Page
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
14-15
17
18


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 1

Table 1: Consolidated Income Statement (Unaudited)
Three months ended
March 31 December 31 September 30 June 30 March 31
In millions, except per share data 2024 2023 2023 2023 2023
Interest Income
Loans $ 4,819  $ 4,875  $ 4,643  $ 4,523  $ 4,258 
Investment securities 883  885  892  883  885 
Other 798  742  668  538  516 
Total interest income 6,500  6,502  6,203  5,944  5,659 
Interest Expense
Deposits 2,077  1,995  1,792  1,531  1,291 
Borrowed funds 1,159  1,104  993  903  783 
Total interest expense 3,236  3,099  2,785  2,434  2,074 
Net interest income 3,264  3,403  3,418  3,510  3,585 
Noninterest Income
Asset management and brokerage 364  360  348  348  356 
Capital markets and advisory 259  309  168  213  262 
Card and cash management 671  688  689  697  659 
Lending and deposit services 305  314  315  298  306 
Residential and commercial mortgage 147  149  201  98  177 
Other (a) (b) 135  138  94  129  258 
Total noninterest income 1,881  1,958  1,815  1,783  2,018 
Total revenue 5,145  5,361  5,233  5,293  5,603 
Provision For Credit Losses 155  232  129  146  235 
Noninterest Expense
Personnel 1,794  1,983  1,773  1,846  1,826 
Occupancy 244  243  244  244  251 
Equipment 341  365  347  349  350 
Marketing 64  74  93  109  74 
Other 891  1,409  788  824  820 
Total noninterest expense 3,334  4,074  3,245  3,372  3,321 
Income before income taxes and noncontrolling interests 1,656  1,055  1,859  1,775  2,047 
Income taxes 312  172  289  275  353 
Net income 1,344  883  1,570  1,500  1,694 
Less: Net income attributable to noncontrolling interests 14  19  16  17  17 
Preferred stock dividends (c) 81  118  104  127  68 
Preferred stock discount accretion and redemptions 2  2  2  2  2 
Net income attributable to common shareholders $ 1,247  $ 744  $ 1,448  $ 1,354  $ 1,607 
Earnings Per Common Share
Basic $ 3.10  $ 1.85  $ 3.60  $ 3.36  $ 3.98 
Diluted $ 3.10  $ 1.85  $ 3.60  $ 3.36  $ 3.98 
Average Common Shares Outstanding
Basic 400  400  400  401  401 
Diluted 400  401  400  401  402 
Efficiency 65  % 76  % 62  % 64  % 59  %
Noninterest income to total revenue 37  % 37  % 35  % 34  % 36  %
Effective tax rate (d) 18.8  % 16.3  % 15.5  % 15.5  % 17.2  %
(a)Includes net gains (losses) on sale of securities of less than $1 million, less than $1 million, less than $1 million, $(2) million and less than $1 million for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively.
(b)Includes Visa Class B derivative fair value adjustments of $(7) million, $(100) million, $(51) million, $(83) million and $(45) million for the quarters ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively.
(c)Dividends are payable quarterly, other than Series S preferred stock, which is 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)
March 31 December 31 September 30 June 30 March 31
In millions, except par value 2024 2023 2023 2023 2023
Assets
Cash and due from banks $ 5,933  $ 6,921  $ 5,300  $ 6,191  $ 5,940 
Interest-earning deposits with banks (a) 53,612  43,804  41,484  38,259  33,865 
Loans held for sale (b) 743  734  923  835  998 
Investment securities – available for sale 42,280  41,785  40,590  41,787  43,220 
Investment securities – held to maturity 88,180  90,784  91,797  93,874  95,019 
Loans (b) 319,781  321,508  318,416  321,761  326,475 
Allowance for loan and lease losses (4,693) (4,791) (4,767) (4,737) (4,741)
Net loans 315,088  316,717  313,649  317,024  321,734 
Equity investments 8,280  8,314  8,046  8,015  8,323 
Mortgage servicing rights 3,762  3,686  4,006  3,455  3,293 
Goodwill 10,932  10,932  10,987  10,987  10,987 
Other (b) 37,352  37,903  40,552  37,780  38,398 
Total assets $ 566,162  $ 561,580  $ 557,334  $ 558,207  $ 561,777 
Liabilities
Deposits
Noninterest-bearing $ 98,061  $ 101,285  $ 105,672  $ 110,527  $ 118,014 
Interest-bearing 327,563  320,133  317,937  316,962  318,819 
Total deposits 425,624  421,418  423,609  427,489  436,833 
Borrowed funds
Federal Home Loan Bank borrowings 37,000  38,000  36,000  34,000  32,020 
Senior debt 27,907  26,836  22,407  22,005  19,622 
Subordinated debt 4,827  4,875  4,728  5,548  5,630 
Other (b) 2,973  3,026  3,032  3,831  3,550 
Total borrowed funds 72,707  72,737  66,167  65,384  60,822 
Allowance for unfunded lending related commitments 672  663  640  663  672 
Accrued expenses and other liabilities (b) 15,785  15,621  17,437  15,325  14,376 
Total liabilities 514,788  510,439  507,853  508,861  512,703 
Equity
Preferred stock (c)
Common stock - $5 par value
Authorized 800,000,000 shares, issued 543,116,260, 543,116,271, 543,012,047, 543,012,047 and 542,874,855 shares 2,716  2,716  2,715  2,715  2,714 
Capital surplus 19,032  19,020  19,971  19,934  19,864 
Retained earnings 56,913  56,290  56,170  55,346  54,598 
Accumulated other comprehensive income (loss) (8,042) (7,712) (10,261) (9,525) (9,108)
Common stock held in treasury at cost: 145,068,954, 145,087,054, 144,671,252, 144,763,739 and 143,781,812 shares (19,279) (19,209) (19,141) (19,150) (19,024)
Total shareholders’ equity 51,340  51,105  49,454  49,320  49,044 
Noncontrolling interests 34  36  27  26  30 
Total equity 51,374  51,141  49,481  49,346  49,074 
Total liabilities and equity $ 566,162  $ 561,580  $ 557,334  $ 558,207  $ 561,777 
(a)Amounts include balances held with the Federal Reserve Bank of $53.2 billion, $43.3 billion, $41.1 billion, $37.8 billion and $32.5 billion as of March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively.
(b)Amounts include assets and liabilities for which PNC has elected the fair value option. Our 2023 Form 10-K included, and our first quarter 2024 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
March 31 December 31 September 30 June 30 March 31
In millions 2024 2023 2023 2023 2023
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 30,411  $ 30,980  $ 31,020  $ 31,180  $ 31,850 
Non-agency 578  599 627 663 689
Commercial mortgage-backed 2,622  2,727 2,880 2,948 3,102
Asset-backed 1,414 1,080 989 575 218
U.S. Treasury and government agencies 8,199 7,788 7,996 8,231 9,088
Other 2,776 2,899 2,931 2,997 3,263
Total securities available for sale 46,000 46,073 46,443 46,594 48,210
Securities held to maturity
Residential mortgage-backed 42,633  43,336  44,112  45,033  45,616 
Commercial mortgage-backed 2,252  2,318  2,346  2,396  2,453 
Asset-backed 5,627  6,040  6,463  6,712  7,026
U.S. Treasury and government agencies 35,860 36,457  37,043 36,912  36,748
Other 3,062 3,164 3,256 3,391 3,338
Total securities held to maturity 89,434 91,315 93,220 94,444 95,181
Total investment securities 135,434 137,388 139,663 141,038 143,391
Loans
Commercial and industrial 177,258 180,566 175,206 180,878 182,017
Commercial real estate 35,522 35,617 36,032 35,938 36,110
Equipment lease financing 6,468 6,430 6,441 6,364 6,452
Consumer 53,933 54,512 54,744 55,070 55,020
Residential real estate 47,428 47,444 47,081 46,284 45,927
Total loans 320,609 324,569 319,504 324,534 325,526
Interest-earning deposits with banks (c) 48,250 42,627 38,352 31,433 34,054
Other interest-earning assets 8,002 8,738 8,777 9,215 8,806
Total interest-earning assets 512,295 513,322 506,296 506,220 511,777
Noninterest-earning assets 50,553 48,997 48,667 49,287 50,555
Total assets $ 562,848  $ 562,319  $ 554,963  $ 555,507  $ 562,332 
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 67,838  $ 66,393  $ 64,310  $ 63,691  $ 65,753 
Demand 122,748 124,124 123,730 124,111 124,376
Savings 97,719 98,490 100,643 102,415 104,408
Time deposits 32,975 30,357 25,872 22,342 20,519
Total interest-bearing deposits 321,280 319,364 314,555 312,559 315,056
Borrowed funds
Federal Home Loan Bank borrowings 37,717 37,783 34,109  33,752 32,056
Senior debt 28,475 26,634 23,479 20,910 19,679
Subordinated debt 5,082 5,091 5,293 5,850 6,100
Other 4,316 3,384 4,584 5,180 5,133
Total borrowed funds 75,590 72,892 67,465 65,692 62,968
Total interest-bearing liabilities 396,870 392,256 382,020 378,251 378,024
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 98,875 104,567 107,981 113,178 121,176
Accrued expenses and other liabilities 16,404 16,328 15,629 15,063 16,014
Equity 50,699 49,168 49,333 49,015 47,118
Total liabilities and equity $ 562,848  $ 562,319  $ 554,963  $ 555,507  $ 562,332 
(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 $47.8 billion, $42.2 billion, $37.9 billion, $30.6 billion and $33.5 billion for the three months ended March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 4
Table 4: Details of Net Interest Margin (Unaudited)
Three months ended
March 31 December 31 September 30 June 30 March 31
2024 2023 2023 2023 2023
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 2.88  % 2.83  % 2.73  % 2.67  % 2.67  %
Non-agency 9.65  % 9.15  % 10.42  % 9.39  % 8.53  %
Commercial mortgage-backed 2.99  % 3.00  % 3.41  % 2.84  % 2.62  %
Asset-backed 6.02  % 6.41  % 6.30  % 6.56  % 7.04  %
U.S. Treasury and government agencies 2.67  % 2.22  % 2.28  % 2.20  % 2.05  %
Other 2.63  % 2.61  % 2.58  % 2.55  % 2.47  %
Total securities available for sale 3.01  % 2.89  % 2.87  % 2.73  % 2.64  %
Securities held to maturity
Residential mortgage-backed 2.77  % 2.75  % 2.72  % 2.72  % 2.74  %
Commercial mortgage-backed 5.46  % 5.53  % 5.55  % 5.35  % 4.95  %
Asset-backed 4.49  % 4.57  % 4.36  % 4.10  % 3.97  %
U.S. Treasury and government agencies 1.31  % 1.32  % 1.34  % 1.34  % 1.33  %
Other 4.52  % 4.72  % 4.57  % 4.65  % 4.62  %
Total securities held to maturity 2.42  % 2.44  % 2.42  % 2.41  % 2.41  %
Total investment securities 2.62  % 2.59  % 2.57  % 2.52  % 2.49  %
Loans
Commercial and industrial 6.18  % 6.13  % 5.86  % 5.70  % 5.34  %
Commercial real estate 6.67  % 6.68  % 6.59  % 6.37  % 6.02  %
Equipment lease financing 5.17  % 4.98  % 4.72  % 4.51  % 4.28  %
Consumer 7.16  % 7.00  % 6.89  % 6.57  % 6.34  %
Residential real estate 3.65  % 3.60  % 3.52  % 3.41  % 3.35  %
Total loans 6.01  % 5.94  % 5.75  % 5.57  % 5.29  %
Interest-earning deposits with banks 5.47  % 5.53  % 5.44  % 5.10  % 4.58  %
Other interest-earning assets 6.92  % 6.96  % 6.66  % 5.96  % 5.75  %
Total yield on interest-earning assets 5.08  % 5.03  % 4.87  % 4.70  % 4.46  %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 3.45  % 3.32  % 3.10  % 2.79  % 2.40  %
Demand 2.26  % 2.26  % 2.15  % 1.89  % 1.58  %
Savings 1.81  % 1.68  % 1.49  % 1.26  % 1.03  %
Time deposits 4.44  % 4.11  % 3.67  % 3.26  % 3.00  %
Total interest-bearing deposits 2.60  % 2.48  % 2.26  % 1.96  % 1.66  %
Borrowed funds
Federal Home Loan Bank borrowings 5.65  % 5.66  % 5.55  % 5.28  % 4.80  %
Senior debt 6.59  % 6.25  % 6.17  % 5.91  % 5.39  %
Subordinated debt 6.64  % 6.63  % 6.52  % 6.19  % 5.69  %
Other
5.59  % 5.55  % 4.49  % 3.79  % 3.70  %
Total borrowed funds 6.07  % 5.94  % 5.77  % 5.44  % 4.98  %
Total rate on interest-bearing liabilities 3.24  % 3.10  % 2.86  % 2.56  % 2.20  %
Interest rate spread 1.84  % 1.93  % 2.01  % 2.14  % 2.26  %
Benefit from use of noninterest-bearing sources (b) 0.73  % 0.73  % 0.70  % 0.65  % 0.58  %
Net interest margin 2.57  % 2.66  % 2.71  % 2.79  % 2.84  %
(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 March 31, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023 were $34 million, $36 million, $36 million, $37 million and $38 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)
March 31 December 31 September 30 June 30 March 31
In millions 2024 2023 2023 2023 2023
Commercial
Commercial and industrial
Manufacturing $ 29,402  $ 28,989  $ 29,163  $ 30,586  $ 32,132 
Retail/wholesale trade 28,923 28,198 28,284 28,751 29,172
Financial services 27,640 28,422 22,770 21,823 22,534
Service providers 21,413 21,354 21,680 22,277 23,186
Real estate related (a) 15,583 16,235 16,182 17,200 17,548
Health care 10,193 9,808 10,092 10,186 10,537
Technology, media & telecommunications 10,158 10,249 10,989 11,158 11,338
Transportation and warehousing 7,523 7,733 7,891 8,048 7,824
Other industries 25,957 26,592 27,112 27,600 28,726
Total commercial and industrial 176,792  177,580  174,163  177,629  182,997 
Commercial real estate 35,591  35,436  35,776  35,928  35,991 
Equipment lease financing 6,462  6,542  6,493  6,400  6,424 
Total commercial 218,845 219,558 216,432 219,957 225,412
Consumer
Residential real estate 47,386  47,544  47,359  46,834  46,067 
Home equity 25,896  26,150  26,159  26,200  26,203 
Automobile 14,788  14,860  14,940  15,065  14,923 
Credit card 6,887  7,180  7,060  7,092  6,961 
Education 1,859  1,945  2,020  2,058  2,131 
Other consumer 4,120  4,271  4,446  4,555  4,778 
Total consumer 100,936  101,950  101,984  101,804  101,063 
Total loans $ 319,781  $ 321,508  $ 318,416  $ 321,761  $ 326,475 
(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
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Allowance for loan and lease losses
Beginning balance $ 4,791  $ 4,767  $ 4,737  $ 4,741  $ 4,741 
Adoption of ASU 2022-02 (a)     (35)
Beginning balance, adjusted 4,791  4,767  4,737  4,741  4,706 
Gross charge-offs:
Commercial and industrial (84) (52) (43) (45) (104)
Commercial real estate (56) (56) (25) (87) (12)
Equipment lease financing (8) (7) (4) (3) (4)
Residential real estate (1) (2) (1) (2) (3)
Home equity (10) (6) (4) (5) (6)
Automobile (32) (30) (30) (28) (33)
Credit card (92) (87) (78) (80) (74)
Education (4) (4) (4) (5) (4)
Other consumer (43) (40) (44) (38) (42)
Total gross charge-offs (330) (284) (233) (293) (282)
Recoveries:
Commercial and industrial 19  24  45  33  20 
Commercial real estate 2  2  2    2 
Equipment lease financing 2  1  2  3  3 
Residential real estate 3  3  3  4  3 
Home equity 9  10  12  13  11 
Automobile 25  23  26  27  24 
Credit card 15  11  10  11  11 
Education 2  2  1  2  2 
Other consumer 10  8  11  6  11 
Total recoveries 87  84  112  99  87 
Net (charge-offs) / recoveries:
Commercial and industrial (65) (28) 2  (12) (84)
Commercial real estate (54) (54) (23) (87) (10)
Equipment lease financing (6) (6) (2) (1)
Residential real estate 2  1  2  2 
Home equity (1) 4  8  8  5 
Automobile (7) (7) (4) (1) (9)
Credit card (77) (76) (68) (69) (63)
Education (2) (2) (3) (3) (2)
Other consumer (33) (32) (33) (32) (31)
Total net (charge-offs) (243) (200) (121) (194) (195)
Provision for credit losses (b) 147  221  153  189  229 
Other (2) 3  (2) 1  1 
Ending balance $ 4,693  $ 4,791  $ 4,767  $ 4,737  $ 4,741 
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (125) $ (88) $ (23) $ (99) $ (95)
Consumer net charge-offs (118) (112) (98) (95) (100)
Total net charge-offs $ (243) $ (200) $ (121) $ (194) $ (195)
Net charge-offs to average loans (annualized) 0.30  % 0.24  % 0.15  % 0.24  % 0.24  %
Commercial 0.23  % 0.16  % 0.04  % 0.18  % 0.17  %
Consumer 0.47  % 0.44  % 0.38  % 0.38  % 0.40  %
(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. Refer to our 2023 Form 10-K for 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
March 31 December 31 September 30 June 30 March 31
In millions 2024 2023 2023 2023 2023
Provision for credit losses
Loans and leases $ 147  $ 221  $ 153  $ 189  $ 229 
Unfunded lending related commitments 9  23  (23) (9) (22)
Investment securities 1  (7) (10) (1)
Other financial assets (2) (5) 9  (34) 29 
Total provision for credit losses $ 155  $ 232  $ 129  $ 146  $ 235 


Table 8: Allowance for Credit Losses by Loan Class (a)
March 31, 2024 December 31, 2023 March 31, 2023

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 $ 1,673  $ 176,792  0.95  % $ 1,806  $ 177,580  1.02  % $ 1,771  $ 182,997  0.97  %
Commercial real estate 1,468  35,591  4.12  % 1,371  35,436  3.87  % 1,171  35,991  3.25  %
Equipment lease financing 76  6,462  1.18  % 82  6,542  1.25  % 104  6,424  1.62  %
Total commercial 3,217  218,845  1.47  % 3,259  219,558  1.48  % 3,046  225,412  1.35  %
Consumer
Residential real estate 39  47,386  0.08  % 61  47,544  0.13  % 95  46,067  0.21  %
Home equity 272  25,896  1.05  % 276  26,150  1.06  % 316  26,203  1.21  %
Automobile 173  14,788  1.17  % 173  14,860  1.16  % 199  14,923  1.33  %
Credit card 749  6,887  10.88  % 766  7,180  10.67  % 782  6,961  11.23  %
Education 56  1,859  3.01  % 56  1,945  2.88  % 64  2,131  3.00  %
Other consumer 187  4,120  4.54  % 200  4,271  4.68  % 239  4,778  5.00  %
Total consumer 1,476  100,936  1.46  % 1,532  101,950  1.50  % 1,695  101,063  1.68  %
Total
 4,693  $ 319,781  1.47  % 4,791  $ 321,508  1.49  % 4,741  $ 326,475  1.45  %
Allowance for unfunded lending related commitments
 672  663  672 
Allowance for credit losses
 $ 5,365  $ 5,454  $ 5,413 
Supplemental Information
Allowance for credit losses to total loans
 1.68  % 1.70  % 1.66  %
Commercial 1.71  % 1.73  % 1.60  %
Consumer 1.60  % 1.62  % 1.79  %
(a)    Excludes allowances for investment securities and other financial assets, which together totaled $117 million, $120 million and $205 million at March 31, 2024, December 31, 2023 and March 31, 2023, respectively.

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

Table 9: Nonperforming Assets by Type
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Nonperforming loans
Commercial
Commercial and industrial
Technology, media & telecommunications $ 177  $ 156  $ 51  $ 55  $ 22 
Service providers 158  157  162  114  128 
Manufacturing 60  32  34  50  105 
Transportation and warehousing 40  35  44  33  24 
Health care 40  36  37  60  57 
Retail/wholesale trade 30  30  41  41  82 
Real estate related (a) 23  30  31  42  43 
Other industries 50  83  58  75  87 
Total commercial and industrial 578  559  458  470  548 
Commercial real estate 923  735  723  350  337 
Equipment lease financing 13  13  30  7  6 
Total commercial 1,514  1,307  1,211  827  891 
Consumer (b)
Residential real estate 284  294  330  429  432 
Home equity 464  458  446  506  523 
Automobile 97  104  114  133  145 
Credit card 13  10  11  10  9 
Other consumer 8  7  11  8  10 
Total consumer 866  873  912  1,086  1,119 
Total nonperforming loans (c) 2,380  2,180  2,123  1,913  2,010 
OREO and foreclosed assets 35  36  35  36  38 
Total nonperforming assets $ 2,415  $ 2,216  $ 2,158  $ 1,949  $ 2,048 
Nonperforming loans to total loans 0.74  % 0.68  % 0.67  % 0.59  % 0.62  %
Nonperforming assets to total loans, OREO and foreclosed assets 0.76  % 0.69  % 0.68  % 0.61  % 0.63  %
Nonperforming assets to total assets 0.43  % 0.39  % 0.39  % 0.35  % 0.36  %
Allowance for loan and lease losses to nonperforming loans 197  % 220  % 225  % 248  % 236  %
(a)Represents loans related to customers in the real estate and construction industries.
(b)Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
(c)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale and loans accounted for under the fair value option.


Table 10: Change in Nonperforming Assets
Three months ended
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Beginning balance $ 2,216  $ 2,158  $ 1,949  $ 2,048  $ 2,019 
New nonperforming assets 616  496  641  410  452 
Charge-offs and valuation adjustments (133) (104) (91) (135) (122)
Principal activity, including paydowns and payoffs (188) (250) (112) (297) (172)
Asset sales and transfers to loans held for sale (16) (6) (7) (12) (46)
Returned to performing status (a) (80) (78) (222) (65) (83)
Ending balance $ 2,415  $ 2,216  $ 2,158  $ 1,949  $ 2,048 
(a)Amounts for the three months ended September 30, 2023 included 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)                  

Table 11: Accruing Loans Past Due 30 to 59 Days (a) (b)
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Commercial
Commercial and industrial $ 125 $ 104 $ 84 $ 64 $ 119
Commercial real estate 2 7 2 10 25
Equipment lease financing 22 41 25 14 33
Total commercial 149 152 111 88 177
Consumer
Residential real estate
Non government insured 179 201 179 151 167
Government insured 78 81 78 77 78
Home equity 64 63 59 56 48
Automobile 81 91 83 84 79
Credit card 49 54 50 49 48
Education
Non government insured 5 5 6 5 6
Government insured
 20 22 26 28 29
Other consumer 11 16 15 17 13
Total consumer 487 533 496 467 468
Total $ 636 $ 685 $ 607 $ 555 $ 645
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.20  % 0.21  % 0.19  % 0.17  % 0.20  %
Commercial 0.07  % 0.07  % 0.05  % 0.04  % 0.08  %
Consumer 0.48  % 0.52  % 0.49  % 0.46  % 0.46  %
(a)Excludes loans held for sale.
(b)The CARES Act Credit reporting rules expired in the third quarter of 2023 and as such, delinquency status at March 31, 2024, December 31, 2023 and 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.








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) (b)
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Commercial
Commercial and industrial $ 35 $ 45 $ 32 $ 47 $ 21
Commercial real estate 2 1
Equipment lease financing 4 8 6 5 5
Total commercial 39 53 40 52 27
Consumer
Residential real estate
Non government insured 50 50 52 36 43
Government insured 42 51 51 50 55
Home equity 24 27 22 18 18
Automobile 19 20 19 20 18
Credit card 37 39 38 36 35
Education
Non government insured
 4 3 3 2 4
Government insured
 13 16 19 15 17
Other consumer 7 11 9 9 8
Total consumer 196 217 213 186 198
Total $ 235 $ 270 $ 253 $ 238 $ 225
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.07  % 0.08  % 0.08  % 0.07  % 0.07  %
Commercial 0.02  % 0.02  % 0.02  % 0.02  % 0.01  %
Consumer 0.19  % 0.21  % 0.21  % 0.18  % 0.20  %
(a)Excludes loans held for sale.
(b)The CARES Act Credit reporting rules expired in the third quarter of 2023 and as such, delinquency status at March 31, 2024, December 31, 2023 and 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.





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) (b)
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Commercial
Commercial and industrial $ 90 $ 76 $ 102 $ 112 $ 134
Commercial real estate 9
Total commercial 90 85 102 112 134
Consumer
Residential real estate
Non government insured 38 38 36 30 26
Government insured 137 154 146 144 152
Automobile 5 7 6 5 5
Credit card 82 86 80 71 74
Education
Non government insured 3 2 2 2 2
Government insured
 40 47 46 46 54
Other consumer 9 10 9 9 9
Total consumer 314 344 325 307 322
Total $ 404 $ 429 $ 427 $ 419 $ 456
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.13  % 0.13  % 0.13  % 0.13  % 0.14  %
Commercial 0.04  % 0.04  % 0.05  % 0.05  % 0.06  %
Consumer 0.31  % 0.34  % 0.32  % 0.30  % 0.32  %
Total accruing loans past due $ 1,275 $ 1,384 $ 1,287 $ 1,212 $ 1,326
Commercial $ 278 $ 290 $ 253 $ 252 $ 338
Consumer $ 997 $ 1,094 $ 1,034 $ 960 $ 988
Total accruing loans past due to total loans 0.40  % 0.43  % 0.40  % 0.38  % 0.41  %
Commercial 0.13  % 0.13  % 0.12  % 0.11  % 0.15  %
Consumer 0.99  % 1.07  % 1.01  % 0.94  % 0.98  %
(a)Excludes loans held for sale.
(b)The CARES Act Credit reporting rules expired in the third quarter of 2023 and as such, delinquency status at March 31, 2024, December 31, 2023 and 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.


































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 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
March 31 December 31 September 30 June 30 March 31
2024 2023 2023 2023 2023
Full-time employees
Retail Banking 28,580  28,761  29,692  30,446  31,583 
Other full-time employees 25,861  26,052  27,725  27,785  27,874 
Total full-time employees 54,441  54,813  57,417  58,231  59,457 
Part-time employees
Retail Banking 1,554  1,540  1,480  1,567  1,537 
Other part-time employees 56  58  70  503  79 
Total part-time employees 1,610  1,598  1,550  2,070  1,616 
Total 56,051  56,411  58,967  60,301  61,073 


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 13
Table 15: Summary of Business Segment Net Income and Revenue (Unaudited) (a)
Three months ended
March 31 December 31 September 30 June 30 March 31
In millions 2024 2023 2023 2023 2023
Net Income
Retail Banking $ 1,085  $ 1,073  $ 1,094  $ 954  $ 647 
Corporate & Institutional Banking 1,121  1,213  960  817  1,059 
Asset Management Group 97  72  73  63  52 
Other (973) (1,494) (573) (351) (81)
Net income excluding noncontrolling interests $ 1,330  $ 864  $ 1,554  $ 1,483  $ 1,677 
  
Revenue
Retail Banking $ 3,381  $ 3,391  $ 3,360  $ 3,150  $ 3,024 
Corporate & Institutional Banking 2,437  2,637  2,254  2,202  2,300 
Asset Management Group 387  380  362  353  357 
Other (1,060) (1,047) (743) (412) (78)
Total revenue $ 5,145  $ 5,361  $ 5,233  $ 5,293  $ 5,603 
(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
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Income Statement
Net interest income $ 2,617  $ 2,669  $ 2,576  $ 2,448  $ 2,281 
Noninterest income 764  722  784  702  743 
Total revenue 3,381  3,391  3,360  3,150  3,024 
Provision for (recapture of) credit losses 118  130  42  (14) 238 
Noninterest expense 1,837  1,848  1,876  1,904  1,927 
Pretax earnings 1,426  1,413  1,442  1,260  859 
Income taxes 333  329  337  295  202 
Noncontrolling interests 8  11  11  11  10 
Earnings $ 1,085  $ 1,073  752  $ 1,094  322  $ 954  $ 647 
Average Balance Sheet
Loans held for sale $ 478  $ 488  $ 633  $ 614  $ 542 
Loans
Consumer
Residential real estate $ 34,600  $ 34,951  $ 35,107  $ 35,150  $ 35,421 
Home equity 24,462  24,569  24,591  24,663  24,571 
Automobile 14,839  14,875  14,976  15,005  14,918 
Credit card 6,930  7,084  7,075  7,015  6,904 
Education 1,933  2,001  2,057  2,115  2,188 
Other consumer 1,771  1,840  1,882  1,929  1,990 
Total consumer 84,535  85,320  85,688  85,877  85,992 
Commercial 12,620  12,088  11,733  11,708  11,438 
Total loans $ 97,155  $ 97,408  $ 97,421  $ 97,585  $ 97,430 
Total assets $ 114,199  $ 114,730  $ 114,724  $ 114,826  $ 115,384 
Deposits
Noninterest-bearing $ 53,395  $ 55,948  $ 58,110  $ 59,464  $ 60,801 
Interest-bearing 195,615  195,314  195,560  197,854  201,720 
Total deposits $ 249,010  $ 251,262  $ 253,670  $ 257,318  $ 262,521 
Performance Ratios
Return on average assets 3.85  % 3.71  % 3.78  % 3.33  % 2.27  %
Noninterest income to total revenue 23  % 21  % 23  % 22  % 25  %
Efficiency 54  % 54  % 56  % 60  % 64  %
(a)See note (a) on page 13.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 15
Retail Banking (Unaudited) (Continued)
Three months ended
March 31 December 31 September 30 June 30 March 31
Dollars in millions, except as noted 2024 2023 2023 2023 2023
Supplemental Noninterest Income Information
Asset management and brokerage $ 137  $ 139  $ 130  $ 123  $ 131 
Card and cash management $ 306  $ 326  $ 329  $ 344  $ 324 
Lending and deposit services $ 178  $ 186  $ 193  $ 176  $ 181 
Residential and commercial mortgage $ 97  $ 117  $ 128  $ 75  $ 104 
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b) $ 207  $ 209  $ 213  $ 191  $ 188 
MSR asset value (b) $ 2.7  $ 2.7  $ 2.8  $ 2.3  $ 2.2 
Servicing income: (in millions)
Servicing fees, net (c) $ 82  $ 89  $ 67  $ 67  $ 78 
Mortgage servicing rights valuation net of economic hedge
 $ (6) $ 11  $ 37  $ (9) $ 14 
Residential mortgage loan statistics
Loan origination volume (in billions) $ 1.3  $ 1.5  $ 2.1  $ 2.4  $ 1.4 
Loan sale margin percentage 2.53  % 2.45  % 2.43  % 2.23  % 2.26  %
Other Information
Credit-related statistics
Nonperforming assets (b) $ 841  $ 834  $ 856  $ 981  $ 1,009 
Net charge-offs - loans and leases $ 139  $ 128  $ 114  $ 109  $ 112 
Other statistics
Branches (b) (d) 2,271  2,299  2,303  2,361  2,450 
Brokerage account client assets (in billions) (b) (e) $ 81  $ 78  $ 73  $ 75  $ 73 
(a)Represents mortgage loan servicing balances for third parties and the related income.
(b)Presented as of period end.
(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)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.
(e)Includes cash and money market balances.





THE PNC FINANCIAL SERVICES GROUP, INC.
Page 16
Table 17: Corporate & Institutional Banking (Unaudited) (a)
Three months ended
March 31 December 31 September 30 June 30 March 31
Dollars in millions 2024 2023 2023 2023 2023
Income Statement
Net interest income $ 1,549  $ 1,642  $ 1,419  $ 1,381  $ 1,414 
Noninterest income 888  995  835  821  886 
Total revenue 2,437  2,637  2,254  2,202  2,300 
Provision for (recapture of) credit losses 47  115  102  209  (28)
Noninterest expense 922  975  895  921  939 
Pretax earnings 1,468  1,547  1,257  1,072  1,389 
Income taxes 342  330  292  250  325 
Noncontrolling interests 5  4  5  5  5 
Earnings $ 1,121  $ 1,213  $ 960  $ 817  $ 1,059 
Average Balance Sheet
Loans held for sale $ 151  $ 450  $ 283  $ 440  $ 456 
Loans
Commercial
Commercial and industrial $ 163,326  $ 167,185  $ 161,810  $ 167,357  $ 168,874 
Commercial real estate 34,420  34,488  34,587  34,410  34,605 
Equipment lease financing 6,467  6,430  6,441  6,364  6,451 
Total commercial 204,213  208,103  202,838  208,131  209,930 
Consumer 3  5  4  5  7 
Total loans $ 204,216  $ 208,108  $ 202,842  $ 208,136  $ 209,937 
Total assets $ 228,698  $ 234,590  $ 230,082  $ 234,174  $ 234,536 
Deposits
Noninterest-bearing $ 43,854  $ 46,880  $ 48,123  $ 51,948  $ 58,529 
Interest-bearing 98,841  97,660  93,563  89,068  86,832 
Total deposits $ 142,695  $ 144,540  $ 141,686  $ 141,016  $ 145,361 
Performance Ratios
Return on average assets 1.99  % 2.05  % 1.66  % 1.40  % 1.83  %
Noninterest income to total revenue 36  % 38  % 37  % 37  % 39  %
Efficiency 38  % 37  % 40  % 42  % 41  %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 936  $ 1,044  $ 849  $ 778  $ 785 
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 10  $ 17  $ 17  $ 13  $ 27 
Commercial mortgage loan servicing income (d) 67  59  43  44  39 
Commercial mortgage servicing rights valuation, net of economic hedge 37  19  54  4  41 
Total $ 114  $ 95  $ 114  $ 61  $ 107 
Commercial mortgage servicing statistics
Serviced portfolio balance (in billions) (e) $ 287  $ 288  $ 282  $ 280  $ 281 
MSR asset value (e) $ 1,075  $ 1,032  $ 1,169  $ 1,106  $ 1,061 
Average loans by C&IB business
Corporate Banking $ 116,845  $ 119,916  $ 113,538  $ 117,259  $ 119,602 
Real Estate 46,608  47,028  47,234  47,692  47,297 
Business Credit 28,929  29,252  29,900  30,613  30,180 
Commercial Banking 7,546  7,591  7,861  8,225  8,430 
Other 4,288  4,321  4,309  4,347  4,428 
Total average loans $ 204,216  $ 208,108  $ 202,842  $ 208,136  $ 209,937 
Credit-related statistics
Nonperforming assets (e) $ 1,419  $ 1,217  $ 1,130  $ 738  $ 801 
Net charge-offs - loans and leases $ 108  $ 76  $ 12  $ 93  $ 85 
(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 time and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
(e)Presented as of period end.


THE PNC FINANCIAL SERVICES GROUP, INC.
Page 17
Table 18: Asset Management Group (Unaudited) (a)
Three months ended
March 31 December 31 September 30 June 30 March 31
Dollars in millions, except as noted 2024 2023 2023 2023 2023
Income Statement
Net interest income $ 157  $ 156  $ 139  $ 125  $ 127 
Noninterest income 230  224  223  228  230 
Total revenue 387  380  362  353  357 
Provision for (recapture of) credit losses (5) 2  (4) (10) 9 
Noninterest expense 265  284  271  280  280 
Pretax earnings 127  94  95  83  68 
Income taxes 30  22  22  20  16 
Earnings $ 97  $ 72  $ 73  $ 63  $ 52 
Average Balance Sheet
Loans
Consumer
Residential real estate $ 11,688  $ 11,314  $ 10,750  $ 9,855  $ 9,174 
Other consumer 3,758  3,893  3,901  4,065  4,156 
Total consumer 15,446  15,207  14,651  13,920  13,330 
Commercial 849  867  1,090  1,229  1,246 
Total loans $ 16,295  $ 16,074  $ 15,741  $ 15,149  $ 14,576 
Total assets $ 16,728  $ 16,505  $ 16,161  $ 15,562  $ 14,997 
Deposits
Noninterest-bearing $ 1,617  $ 1,742  $ 1,756  $ 1,787  $ 1,846 
Interest-bearing 27,064  26,479  25,417  25,482  26,337 
Total deposits $ 28,681  $ 28,221  $ 27,173  $ 27,269  $ 28,183 
Performance Ratios
Return on average assets 2.35  % 1.73  % 1.79  % 1.62  % 1.41  %
Noninterest income to total revenue 59  % 59  % 62  % 65  % 64  %
Efficiency 68  % 75  % 75  % 79  % 78  %
Other Information
Nonperforming assets (b) $ 28  $ 39  $ 39  $ 41  $ 42 
Net charge-offs (recoveries) - loans and leases   $ (1) $ (2)
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management
 PNC Private Bank $ 124  $ 117  $ 109  $ 111  $ 108 
Institutional Asset Management 71  72  67  65  69 
Total discretionary clients assets under management 195  189  176  176  177 
Nondiscretionary client assets under administration 199  179  170  168  156 
Total $ 394  $ 368  $ 346  $ 344  $ 333 
(a)See note (a) on page 13.
(b)Presented as of period end.
(c)Excludes brokerage account client assets.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 18
Glossary of Terms

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.

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.

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.

THE PNC FINANCIAL SERVICES GROUP, INC.
Page 19

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.

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.

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).

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.