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OFFON

THE PNC FINANCIAL SERVICES GROUP, INC.

(PNC)
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PNC FINANCIAL SERVICES : Form 8-K

10/15/2021 | 11:22am EST
THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT
THIRD QUARTER 2021
(Unaudited)



THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT
THIRD QUARTER 2021
(UNAUDITED)

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 15, 2021. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

BUSINESS
PNC is one of the largest diversified financial services companies in the United States (U.S.) and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally. PNC's retail branch network is located primarily in markets across the Mid-Atlantic, Midwest, Southeast and Southwest. PNC also has strategic international offices in four countries outside the U.S.

ACQUISITION OF BBVA USA BANCSHARES, INC.
On June 1, 2021, PNC acquired BBVA USA Bancshares Inc. (BBVA), a U.S. financial holding company conducting its business operations primarily through its U.S. banking subsidiary, BBVA USA. PNC paid $11.5 billion in cash as consideration for the acquisition, and added $82.2 billion of deposits and $60.5 billion of loans to PNC's Consolidated Balance Sheet as a result of the acquisition.

As of October 12, 2021, PNC has converted approximately 2.6 million customers, 9,000 employees and nearly 600 branches across seven states, merging BBVA USA into PNC Bank. PNC's third quarter earnings results reflect the full quarter benefit of BBVA's acquired business operations, and our second quarter results reflect BBVA business operations for the month of June 2021. PNC's balance sheets at both September 30, 2021 and June 30, 2021 include BBVA's balances. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.

DISCONTINUED OPERATIONS
On May 15, 2020, PNC completed the sale of its 31.6 million shares of BlackRock, Inc., common and preferred stock through a registered secondary offering. In addition, BlackRock repurchased 2.65 million shares from PNC. The total proceeds from the sale were $14.2 billion in cash, net of $0.2 billion in expenses, and resulted in a gain on sale of $4.3 billion. Additionally, PNC contributed 500,000 BlackRock shares to the PNC Foundation on May 18, 2020. As a result, PNC has divested its entire holding in BlackRock. PNC and its affiliates only hold shares of BlackRock stock in a fiduciary capacity for clients of PNC and its affiliates. Activity for BlackRock for all periods presented on the Consolidated Income Statement have been reclassified to discontinued operations in accordance with Accounting Standard Codification (ASC) 205-20, Presentation of Financial Statements - Discontinued Operations.


THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Third Quarter 2021 Financial Supplement (Unaudited)
Financial Supplement Table Reference
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THE PNC FINANCIAL SERVICES GROUP, INC.

Page 1

Table 1: Consolidated Income Statement (Unaudited) (a)
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 2021 2021 2021 2020 2020 2021 2020
Interest Income
Loans $ 2,437 $ 2,160 $ 1,996 $ 2,074 $ 2,116 $ 6,593 $ 6,853
Investment securities 460 469 421 442 490 1,350 1,599
Other 78 72 66 60 70 216 279
Total interest income 2,975 2,701 2,483 2,576 2,676 8,159 8,731
Interest Expense
Deposits 29 30 40 53 74 99 590
Borrowed funds 90 90 95 99 118 275 619
Total interest expense 119 120 135 152 192 374 1,209
Net interest income 2,856 2,581 2,348 2,424 2,484 7,785 7,522
Noninterest Income
Asset management 248 239 226 221 215 713 615
Consumer services 496 457 384 387 390 1,337 1,097
Corporate services 842 688 555 650 479 2,085 1,517
Residential mortgage 147 103 105 99 137 355 505
Service charges on deposits 159 131 119 134 119 409 366
Other (b) 449 468 483 293 457 1,400 1,071
Total noninterest income 2,341 2,086 1,872 1,784 1,797 6,299 5,171
Total revenue 5,197 4,667 4,220 4,208 4,281 14,084 12,693
Provision For (Recapture of) Credit Losses (203) 302 (551) (254) 52 (452) 3,429
Noninterest Expense
Personnel 1,986 1,640 1,477 1,521 1,410 5,103 4,152
Occupancy 248 217 215 215 205 680 611
Equipment 355 326 293 296 292 974 880
Marketing 103 74 45 64 67 222 172
Other 895 793 544 612 557 2,232 1,774
Total noninterest expense 3,587 3,050 2,574 2,708 2,531 9,211 7,589
Income from continuing operations before income taxes and noncontrolling interests 1,813 1,315 2,197 1,754 1,698 5,325 1,675
Income taxes from continuing operations 323 212 371 298 166 906 128
Net income from continuing operations 1,490 1,103 1,826 1,456 1,532 4,419 1,547
Income from discontinued operations before taxes 5,777
Income taxes from discontinued operations 1,222
Net income from discontinued operations 4,555
Net income 1,490 1,103 1,826 1,456 1,532 4,419 6,102
Less: Net income attributable to noncontrolling interests 16 12 10 14 13 38 27
Preferred stock dividends (c) 57 48 57 48 63 162 181
Preferred stock discount accretion and
redemptions
1 1 1 1 1 3 3
Net income attributable to common shareholders $ 1,416 $ 1,042 $ 1,758 $ 1,393 $ 1,455 $ 4,216 $ 5,891
Earnings Per Common Share
Basic earnings from continuing operations $ 3.31 $ 2.43 $ 4.11 $ 3.26 $ 3.40 $ 9.84 $ 3.11
Basic earnings from discontinued operations 10.61
Total basic earnings $ 3.31 $ 2.43 $ 4.11 $ 3.26 $ 3.40 $ 9.84 $ 13.73
Diluted earnings from continuing operations $ 3.30 $ 2.43 $ 4.10 $ 3.26 $ 3.39 $ 9.83 $ 3.11
Diluted earnings from discontinued operations 10.59
Total diluted earnings $ 3.30 $ 2.43 $ 4.10 $ 3.26 $ 3.39 $ 9.83 $ 13.70
Average Common Shares Outstanding
Basic 426 427 426 425 426 426 427
Diluted 426 427 426 426 426 427 428
Efficiency 69 % 65 % 61 % 64 % 59 % 65 % 60 %
Noninterest income to total revenue 45 % 45 % 44 % 42 % 42 % 45 % 41 %
Effective tax rate from continuing operations (d) 17.8 % 16.1 % 16.9 % 17.0 % 9.8 % 17.0 % 7.6 %
(a)Results reflect the BBVA acquisition beginning in the month of June 2021.
(b)Includes net gains on sales of securities of $15 million, $10 million, $25 million, $51 million and $32 million for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively. Amounts for the nine months ended September 30, 2021 and 2020 were $50 million and $254 million, respectively.
(c)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually. On September 13, 2021, PNC issued 1,500,000 depositary shares of Series T preferred stock with a $1 par value. Beginning on December 15, dividends will be paid on the Series T on a quarterly basis (March 15, June 15, September 15 and December 15 of each year).
(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) (a)
September 30 June 30 March 31 December 31 September 30
In millions, except par value 2021 2021 2021 2020 2020
Assets
Cash and due from banks $ 8,843 $ 8,724 $ 7,455 $ 7,017 $ 6,629
Interest-earning deposits with banks (b) 75,478 72,447 86,161 85,173 70,959
Loans held for sale (c) 2,121 2,227 1,967 1,597 1,787
Investment securities - available for sale 124,127 125,058 96,799 87,358 89,747
Investment securities - held to maturity 1,479 1,485 1,456 1,441 1,438
Loans (c) 290,230 294,704 237,013 241,928 249,279
Allowance for loan and lease losses (5,355) (5,730) (4,714) (5,361) (5,751)
Net loans 284,875 288,974 232,299 236,567 243,528
Equity investments 7,737 7,521 6,386 6,052 4,938
Mortgage servicing rights 1,833 1,793 1,680 1,242 1,113
Goodwill 10,885 10,958 9,317 9,233 9,233
Other (c) 36,137 35,025 30,894 30,999 32,445
Total assets $ 553,515 $ 554,212 $ 474,414 $ 466,679 $ 461,817
Liabilities
Deposits
Noninterest-bearing $ 156,305 $ 154,190 $ 120,641 $ 112,637 $ 107,281
Interest-bearing 292,597 298,693 254,426 252,708 247,798
Total deposits 448,902 452,883 375,067 365,345 355,079
Borrowed funds
Federal Home Loan Bank borrowings 1,500 3,500 5,500
Bank notes and senior debt 22,993 24,408 22,139 24,271 26,839
Subordinated debt 7,074 7,120 6,241 6,403 6,465
Other (c) 3,404 3,285 3,150 3,021 3,306
Total borrowed funds 33,471 34,813 33,030 37,195 42,110
Allowance for unfunded lending related commitments 646 645 507 584 689
Accrued expenses and other liabilities 14,199 11,186 11,931 9,514 10,629
Total liabilities 497,218 499,527 420,535 412,638 408,507
Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 543, 543, 543, 543, and 542 shares 2,713 2,713 2,713 2,713 2,712
Capital surplus 17,453 15,928 15,879 15,884 15,836
Retained earnings 49,541 48,663 48,113 46,848 45,947
Accumulated other comprehensive income 1,079 1,463 1,290 2,770 2,997
Common stock held in treasury at cost:120, 118, 118, 119, and 118 shares (14,527) (14,140) (14,146) (14,205) (14,216)
Total shareholders' equity 56,259 54,627 53,849 54,010 53,276
Noncontrolling interests 38 58 30 31 34
Total equity 56,297 54,685 53,879 54,041 53,310
Total liabilities and equity $ 553,515 $ 554,212 $ 474,414 $ 466,679 $ 461,817
(a)BBVA balances are included at September 30, 2021 and June 30, 2021.
(b)Amounts include balances held with the Federal Reserve Bank of $75.1 billion, $71.9 billion, $85.8 billion, $84.9 billion and $70.6 billion as of September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, respectively.
(c)Amounts include assets and liabilities for which PNC has elected the fair value option. Our second quarter 2021 Form 10-Q included, and our third quarter 2021 Form 10-Q will include, additional information regarding these items.
(d)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 2021 2021 2021 2020 2020 2021 2020
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency $ 63,163 $ 56,042 $ 45,298 $ 48,036 $ 52,215 $ 54,900 $ 51,453
Non-agency 1,051 1,142 1,236 1,337 1,437 1,142 1,527
Commercial mortgage-backed 6,134 6,465 6,241 6,568 6,927 6,280 6,964
Asset-backed 5,608 5,855 5,304 5,017 5,033 5,590 5,115
U.S. Treasury and government agencies 38,149 32,419 22,309 18,783 18,724 31,017 16,714
Other 4,994 5,107 4,561 4,561 4,723 4,889 4,567
Total securities available for sale 119,099 107,030 84,949 84,302 89,059 103,818 86,340
Securities held to maturity
Asset-backed 24
U.S. Treasury and government agencies 807 802 797 793 788 802 783
Other 680 671 650 650 655 667 648
Total securities held to maturity 1,487 1,473 1,447 1,443 1,443 1,469 1,455
Total investment securities 120,586 108,503 86,396 85,745 90,502 105,287 87,795
Loans
Commercial and industrial 152,964 137,892 129,996 134,944 139,795 140,368 140,701
Commercial real estate 37,054 31,611 28,598 28,991 29,081 32,452 28,689
Equipment lease financing 6,300 6,332 6,332 6,380 6,771 6,321 6,958
Consumer 57,533 52,575 50,904 52,872 54,692 53,695 56,279
Residential real estate 37,475 27,197 22,305 22,638 22,753 29,048 22,292
Total loans 291,326 255,607 238,135 245,825 253,092 261,884 254,919
Interest-earning deposits with banks (c) 80,274 78,522 85,410 76,374 60,327 81,383 37,582
Other interest-earning assets 9,113 8,079 7,829 8,134 9,752 8,345 10,028
Total interest-earning assets 501,299 450,711 417,770 416,078 413,673 456,899 390,324
Noninterest-earning assets 57,943 53,718 50,450 48,901 48,466 54,065 53,705
Total assets $ 559,242 $ 504,429 $ 468,220 $ 464,979 $ 462,139 $ 510,964 $ 444,029
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 82,911 $ 64,990 $ 59,083 $ 62,621 $ 63,598 $ 69,105 $ 59,426
Demand 106,588 99,091 91,619 88,026 87,226 99,154 80,371
Savings 89,679 87,307 82,926 79,430 77,479 86,662 74,279
Time deposits 19,293 18,048 18,449 19,448 20,248 18,577 21,084
Total interest-bearing deposits 298,471 269,436 252,077 249,525 248,551 273,498 235,160
Borrowed funds
Federal Home Loan Bank borrowings 265 2,411 4,761 7,196 883 11,051
Bank notes and senior debt 22,573 22,620 22,799 24,022 25,858 22,663 28,040
Subordinated debt 6,787 6,218 5,929 5,936 5,936 6,315 5,935
Other 4,992 5,046 4,057 3,433 4,354 4,701 6,199
Total borrowed funds 34,352 34,149 35,196 38,152 43,344 34,562 51,225
Total interest-bearing liabilities 332,823 303,585 287,273 287,677 291,895 308,060 286,385
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 155,948 132,283 113,299 109,878 101,931 133,999 90,078
Accrued expenses and other liabilities 15,332 14,755 14,258 14,348 15,341 14,787 16,251
Equity 55,139 53,806 53,390 53,076 52,972 54,118 51,315
Total liabilities and equity $ 559,242 $ 504,429 $ 468,220 $ 464,979 $ 462,139 $ 510,964 $ 444,029

(a)Calculated using average daily balances.
(b)Results reflect the BBVA acquisition beginning in the month of June 2021.
(c)Amounts include average balances held with the Federal Reserve Bank of Cleveland of $80.1 billion, $78.3 billion, $85.2 billion, $76.1 billion and $60.0 billion for the three months ended September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020, and $81.1 billion and $37.3 billion for the nine months ended September 30, 2021 and September 30, 2020, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 4
Table 4: Details of Net Interest Margin (Unaudited) (a)
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
2021 2021 2021 2020 2020 2021 2020
Average yields/rates (b)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency 1.41 % 1.61 % 1.72 % 1.81 % 2.03 % 1.56 % 2.31 %
Non-agency 8.07 % 7.85 % 7.24 % 7.15 % 7.26 % 7.70 % 7.43 %
Commercial mortgage-backed 2.34 % 2.49 % 2.58 % 2.66 % 2.50 % 2.47 % 2.68 %
Asset-backed 1.50 % 2.07 % 1.84 % 2.04 % 2.44 % 1.80 % 2.70 %
U.S. Treasury and government agencies 1.18 % 1.30 % 1.68 % 1.77 % 1.64 % 1.34 % 1.88 %
Other 2.90 % 3.00 % 3.28 % 3.45 % 3.39 % 3.05 % 3.51 %
Total securities available for sale 1.51 % 1.73 % 1.95 % 2.05 % 2.16 % 1.70 % 2.43 %
Securities held to maturity
Asset-backed 2.66 %
U.S. Treasury and government agencies 2.88 % 2.86 % 2.83 % 2.88 % 2.86 % 2.86 % 2.85 %
Other 4.33 % 3.67 % 4.17 % 4.20 % 4.20 % 4.05 % 4.32 %
Total securities held to maturity 3.54 % 3.23 % 3.43 % 3.47 % 3.47 % 3.40 % 3.50 %
Total investment securities 1.54 % 1.75 % 1.97 % 2.08 % 2.18 % 1.73 % 2.45 %
Loans
Commercial and industrial 2.80 % 2.89 % 2.91 % 2.87 % 2.82 % 2.87 % 3.07 %
Commercial real estate 3.17 % 2.92 % 2.80 % 2.63 % 2.65 % 2.98 % 3.03 %
Equipment lease financing 3.83 % 3.76 % 3.90 % 3.90 % 3.80 % 3.83 % 3.85 %
Consumer 4.85 % 4.82 % 4.78 % 4.74 % 4.69 % 4.82 % 4.98 %
Residential real estate 3.15 % 3.50 % 3.53 % 3.69 % 3.74 % 3.35 % 3.85 %
Total loans 3.32 % 3.38 % 3.38 % 3.35 % 3.32 % 3.36 % 3.58 %
Interest-earning deposits with banks 0.16 % 0.11 % 0.10 % 0.10 % 0.10 % 0.12 % 0.28 %
Other interest-earning assets 2.03 % 2.46 % 2.34 % 1.99 % 2.23 % 2.27 % 2.64 %
Total yield on interest-earning assets 2.36 % 2.40 % 2.40 % 2.46 % 2.57 % 2.38 % 2.98 %
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market 0.03 % 0.03 % 0.03 % 0.05 % 0.07 % 0.03 % 0.29 %
Demand 0.03 % 0.03 % 0.04 % 0.04 % 0.05 % 0.03 % 0.17 %
Savings 0.04 % 0.05 % 0.06 % 0.08 % 0.11 % 0.05 % 0.39 %
Time deposits 0.12 % 0.20 % 0.32 % 0.41 % 0.58 % 0.21 % 0.91 %
Total interest-bearing deposits 0.04 % 0.05 % 0.06 % 0.08 % 0.12 % 0.05 % 0.34 %
Borrowed funds
Federal Home Loan Bank borrowings 0.35 % 0.43 % 0.40 % 0.47 % 0.42 % 1.16 %
Bank notes and senior debt 0.97 % 0.98 % 1.04 % 1.00 % 1.08 % 1.00 % 1.72 %
Subordinated debt 1.28 % 1.35 % 1.43 % 1.38 % 1.51 % 1.35 % 2.05 %
Other
0.93 % 0.97 % 1.21 % 1.39 % 1.31 % 1.02 % 1.33 %
Total borrowed funds 1.03 % 1.04 % 1.09 % 1.02 % 1.06 % 1.05 % 1.59 %
Total rate on interest-bearing liabilities 0.14 % 0.16 % 0.19 % 0.21 % 0.26 % 0.16 % 0.56 %
Interest rate spread 2.22 % 2.24 % 2.21 % 2.25 % 2.31 % 2.22 % 2.42 %
Benefit from use of noninterest bearing sources (c) 0.05 % 0.05 % 0.06 % 0.07 % 0.08 % 0.06 % 0.15 %
Net interest margin 2.27 % 2.29 % 2.27 % 2.32 % 2.39 % 2.28 % 2.57 %

(a)Results reflect the BBVA acquisition beginning in the month of June 2021.
(b)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, 2021, June 30, 2021, March 31, 2021, December 31, 2020 and September 30, 2020 were $22 million, $15 million, $15 million, $17 million and $17 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2021 and September 30, 2020 were $52 million and $58 million, respectively.
(c)Represents the positive effects of investing noninterest-bearing sources in interest-earning assets.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 5
Table 5: Per Share Related Information (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 2021 2021 2021 2020 2020 2021 2020
Basic
Net income from continuing operations $ 1,490 $ 1,103 $ 1,826 $ 1,456 $ 1,532 $ 4,419 $ 1,547
Less:
Net income attributable to noncontrolling interests 16 12 10 14 13 38 27
Preferred stock dividends 57 48 57 48 63 162 181
Preferred stock discount accretion and redemptions 1 1 1 1 1 3 3
Net income from continuing operations
attributable to common shareholders
1,416 1,042 1,758 1,393 1,455 4,216 1,336
Less: Dividends and undistributed earnings
allocated to nonvested restricted shares
8 5 8 6 8 21 7
Net income from continuing operations
attributable to basic common shareholders
$ 1,408 $ 1,037 $ 1,750 $ 1,387 $ 1,447 $ 4,195 $ 1,329
Net income from discontinued operations attributable
to common shareholders
$ 4,555
Less: Undistributed earnings allocated to nonvested
restricted shares
22
Net income from discontinued operations attributable
to basic common shareholders
$ 4,533
Basic weighted-average common shares outstanding 426 427 426 425 426 426 427
Basic earnings per common share from
continuing operations (a)
$ 3.31 $ 2.43 $ 4.11 $ 3.26 $ 3.40 $ 9.84 $ 3.11
Basic earnings per common share from discontinued
operations (a)
$ 10.61
Basic earnings per common share $ 3.31 $ 2.43 $ 4.11 $ 3.26 $ 3.40 $ 9.84 $ 13.73
Diluted
Net income from continuing operations
attributable to diluted common shareholder
$ 1,408 $ 1,037 $ 1,750 $ 1,387 $ 1,447 $ 4,195 $ 1,329
Net income from discontinued operations attributable
to basic common shareholders
$ 4,533
Less: Impact of earnings per share dilution from
discontinued operations
2
Net income from discontinued operations attributable
to diluted common shareholders
$ 4,531
Basic weighted-average common shares outstanding 426 427 426 425 426 426 427
Dilutive potential common shares 1 1 1
Diluted weighted-average common shares
outstanding
426 427 426 426 426 427 428
Diluted earnings per common share from
continuing operations (a)
$ 3.30 $ 2.43 $ 4.10 $ 3.26 $ 3.39 $ 9.83 $ 3.11
Diluted earnings per common share from discontinued operations (a) $ 10.59
Diluted earnings per common share $ 3.30 $ 2.43 $ 4.10 $ 3.26 $ 3.39 $ 9.83 $ 13.70

(a)Dividends are payable quarterly other than Series R and Series S preferred stock, which are payable semiannually. On September 13, 2021, PNC issued 1,500,000 depositary shares of Series T preferred stock with a $1 par value. Beginning on December 15, dividends will be paid on the Series T on a quarterly basis (March 15, June 15, September 15 and December 15 of each year).


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 6
Table 6: Details of Loans (Unaudited)
September 30 June 30 March 31 December 31 September 30
In millions 2021 (a) 2021 (a) 2021 2020 2020
Commercial
Commercial and industrial $ 152,735 $ 155,300 $ 129,798 $ 132,073 $ 137,187
Commercial real estate 36,195 37,964 28,319 28,716 29,028
Equipment lease financing 6,257 6,376 6,389 6,414 6,479
Total commercial 195,187 199,640 164,506 167,203 172,694
Consumer
Residential real estate 38,214 36,846 22,418 22,560 22,886
Home equity 24,479 25,174 23,493 24,088 24,539
Automobile 17,265 17,551 13,584 14,218 14,977
Credit card 6,466 6,528 5,675 6,215 6,303
Education 2,653 2,726 2,842 2,946 3,051
Other consumer 5,966 6,239 4,495 4,698 4,829
Total consumer 95,043 95,064 72,507 74,725 76,585
Total loans $ 290,230 $ 294,704 $ 237,013 $ 241,928 $ 249,279
(a)Includes $55.6 billion of loans at September 30, 2021, $34.7 billion in the commercial portfolio and $20.9 billion in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 totaled $60.5 billion, with $38.5 billion and $22.0 billion in the commercial and consumer portfolios, respectively. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 7
Allowance for Credit Losses (Unaudited)

Table 7: 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 2021 2021 2021 2020 2020 2021 2020
Allowance for loan and lease losses
Beginning balance $ 5,730 $ 4,714 $ 5,361 $ 5,751 $ 5,928 $ 5,361 $ 2,742
Adoption of ASU 2016-03 (a) 463
Acquisition PCD reserves (59) 1,115 1,056
Gross charge-offs:
Commercial and industrial (46) (245) (59) (133) (59) (350) (249)
Commercial real estate (1) (28) (5) (1) (1) (34) (1)
Equipment lease financing (3) (1) (5) (4) (4) (9) (19)
Residential real estate (4) (3) (4) (6) (2) (11) (4)
Home equity (2) (7) (7) (11) (12) (16) (31)
Automobile (33) (35) (52) (55) (57) (120) (210)
Credit card (62) (65) (69) (72) (74) (196) (228)
Education (3) (3) (5) (3) (3) (11) (13)
Other consumer (52) (41) (37) (42) (35) (130) (110)
Total gross charge-offs (206) (428) (243) (327) (247) (877) (865)
Recoveries:
Commercial and industrial 25 29 14 23 21 68 52
Commercial real estate 2 2 1 3 2 5 6
Equipment lease financing 2 3 3 3 3 8 7
Residential real estate 9 6 5 4 4 20 12
Home equity 25 21 17 17 15 63 44
Automobile 38 41 38 33 31 117 95
Credit card 13 11 12 9 9 36 26
Education 2 2 2 2 2 6 6
Other consumer 9 7 5 4 5 21 14
Total recoveries 125 122 97 98 92 344 262
Net (charge-offs) / recoveries:
Commercial and industrial (21) (216) (45) (110) (38) (282) (197)
Commercial real estate 1 (26) (4) 2 1 (29) 5
Equipment lease financing (1) 2 (2) (1) (1) (1) (12)
Residential real estate 5 3 1 (2) 2 9 8
Home equity 23 14 10 6 3 47 13
Automobile 5 6 (14) (22) (26) (3) (115)
Credit card (49) (54) (57) (63) (65) (160) (202)
Education (1) (1) (3) (1) (1) (5) (7)
Other consumer (43) (34) (32) (38) (30) (109) (96)
Total net (charge-offs) (b) (81) (306) (146) (229) (155) (533) (603)
Provision for (recapture of) credit losses (c) (229) 206 (502) (164) (23) (525) 3,149
Other (6) 1 1 3 1 (4)
Ending balance $ 5,355 $ 5,730 $ 4,714 $ 5,361 $ 5,751 $ 5,355 $ 5,751
Supplemental Information
Net charge-offs
Commercial net charge-offs $ (21) $ (240) $ (51) $ (109) $ (38) $ (312) $ (204)
Consumer net charge-offs (60) (66) (95) (120) (117) (221) (399)
Total net charge-offs (b) $ (81) $ (306) $ (146) $ (229) $ (155) $ (533) $ (603)
Net charge-offs to average loans (annualized) 0.11 % 0.48 % 0.25 % 0.37 % 0.24 % 0.27 % 0.32 %
Commercial 0.04 % 0.55 % 0.13 % 0.25 % 0.09 % 0.23 % 0.15 %
Consumer 0.25 % 0.33 % 0.53 % 0.63 % 0.60 % 0.36 % 0.68 %
(a) Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020, and our transition from an incurred loss methodology for our reserves to an expected credit loss methodology. Our 2020 Form 10-K included additional information related to our adoption of the CECL standard.
(b) Amounts for the three months ended June 30, 2021 included $248 million attributable to BBVA, primarily related to commercial industrial loans, which were largely the result of required purchase accounting treatment for the BBVA acquisition on June 1, 2021.
(c) See Table 8 for the components of the Provision for (recapture of) credit losses being reported on the Consolidated Income Statement.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 8
Allowance for Credit Losses (Unaudited) (Continued)

Table 8: Components of the Provision for (Recapture of) Credit Losses
Three months ended Nine months ended
September 30 June 30 March 31 December 31 September 30 September 30 September 30
In millions 2021 2021 (a) 2021 2020 2020 2021 (a) 2020
Provision for (recapture of) credit losses
Loans and leases $ (229) $ 206 $ (502) $ (164) $ (23) (525) $ 3,149
Unfunded lending related commitments 1 92 (77) (105) 27 16 192
Investment securities 25 26 11 39 51 69
Other financial assets 4 2 4 9 6 19
Total provision for (recapture of) credit losses $ (203) $ 302 $ (551) $ (254) $ 52 $ (452) $ 3,429
(a) Amounts include $1.0 billion of provision for credit losses that was recorded as part of the BBVA acquisition on June 1, 2021.

Table 9: Allowance for Credit Losses by Loan Class (a)
September 30, 2021 June 30, 2021 September 30, 2020

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 $ 2,173 $ 152,735 1.42 % $ 2,282 $ 155,300 1.47 % $ 2,735 $ 137,187 1.99 %
Commercial real estate 1,312 36,195 3.62 % 1,404 37,964 3.70 % 630 29,028 2.17 %
Equipment lease financing 118 6,257 1.89 % 126 6,376 1.98 % 163 6,479 2.52 %
Total commercial 3,603 195,187 1.85 % 3,812 199,640 1.91 % 3,528 172,694 2.04 %
Consumer
Residential real estate 42 38,214 0.11 % 63 36,846 0.17 % 28 22,886 0.12 %
Home equity 167 24,479 0.68 % 188 25,174 0.75 % 349 24,539 1.42 %
Automobile 365 17,265 2.11 % 421 17,551 2.40 % 404 14,977 2.70 %
Credit card 701 6,466 10.84 % 711 6,528 10.89 % 891 6,303 14.14 %
Education 81 2,653 3.05 % 98 2,726 3.60 % 136 3,051 4.46 %
Other consumer 396 5,966 6.64 % 437 6,239 7.00 % 415 4,829 8.59 %
Total consumer 1,752 95,043 1.84 % 1,918 95,064 2.02 % 2,223 76,585 2.90 %
Total
5,355 $ 290,230 1.85 % 5,730 $ 294,704 1.94 % 5,751 $ 249,279 2.31 %
Allowance for unfunded lending related commitments
646 645 689
Allowance for credit losses
$ 6,001 $ 6,375 $ 6,440
Supplemental Information
Allowance for credit losses to total loans
2.07 % 2.16 % 2.58 %
Commercial 2.12 % 2.18 % 2.38 %
Consumer 1.96 % 2.14 % 3.04 %

(a) Excludes allowances for investment securities and other financial assets, which together totaled $162 million, $138 million and $98 million at September 30, 2021, June 30, 2021 and September 30, 2020, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

Page 9
Details of Nonperforming Assets (Unaudited)

Table 10: Nonperforming Assets by Type
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (a) 2021 (a) 2021 2020 2020
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Service providers $ 220 $ 206 $ 79 $ 90 $ 69
Manufacturing 62 65 55 81 80
Retail/wholesale trade 59 71 66 61 90
Health care 56 71 19 20 20
Real estate related (b) 49 78 48 95 140
Transportation and warehousing 21 18 18 20 14
Other industries 362 421 227 299 264
Total commercial and industrial 829 930 512 666 677
Commercial real estate 365 501 221 224 217
Equipment lease financing 10 15 16 33 21
Total commercial 1,204 1,446 749 923 915
Consumer (c)
Residential real estate 533 503 541 528 339
Home equity 592 626 656 645 639
Automobile 184 191 178 175 171
Credit card 7 7 7 8 13
Other consumer 8 6 7 7 8
Total consumer 1,324 1,333 1,389 1,363 1,170
Total nonperforming loans (d) 2,528 2,779 2,138 2,286 2,085
OREO and foreclosed assets 31 39 41 51 67
Total nonperforming assets $ 2,559 $ 2,818 $ 2,179 $ 2,337 $ 2,152
Nonperforming loans to total loans 0.87 % 0.94 % 0.90 % 0.94 % 0.84 %
Nonperforming assets to total loans, OREO and foreclosed assets 0.88 % 0.96 % 0.92 % 0.97 % 0.86 %
Nonperforming assets to total assets 0.46 % 0.51 % 0.46 % 0.50 % 0.47 %
Allowance for loan and lease losses to nonperforming loans 212 % 206 % 220 % 235 % 276 %
(a)Includes $715 million of nonperforming assets at September 30, 2021, $666 million in the commercial portfolio, $41 million in the consumer portfolio and $8 million of OREO and foreclosed assets, attributable to BBVA. Comparable amounts at June 30, 2021 totaled $880 million, $847 million, $24 million and $9 million, respectively. Our second quarter 2021 Form 10-Q included additional information on the June 1, 2021 acquisition of BBVA.
(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 11: Change in Nonperforming Assets
July 1, 2021 - April 1, 2021 - January 1, 2021 - October 1, 2020 - July 1, 2020 -
In millions September 30, 2021 June 30, 2021 March 31, 2021 December 31, 2020 September 30, 2020
Beginning balance $ 2,818 $ 2,179 $ 2,337 $ 2,152 $ 1,955
New nonperforming assets 365 207 249 586 512
Charge-offs and valuation adjustments (71) (61) (70) (97) (75)
Principal activity, including paydowns and payoffs (333) (264) (186) (185) (175)
Asset sales and transfers to loans held for sale (30) (15) (86) (14) (20)
Returned to performing status (190) (108) (65) (105) (45)
Acquired nonperforming assets (a) 880
Ending balance $ 2,559 $ 2,818 $ 2,179 $ 2,337 $ 2,152
(a)Represents nonperforming assets acquired as a part of the BBVA acquisition on June 1, 2021 and includes $871 million of loans and $9 million of OREO and foreclosed assets. Our second quarter 2021 Form 10-Q included additional information on the BBVA acquisition.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 10
Accruing Loans Past Due (Unaudited)

Pursuant to the interagency guidance issued in April 2020 and in connection with the credit reporting rules from the U.S. Coronavirus Aid, Relief and Economic Security Act (CARES Act), the delinquency status of loans modified due to COVID-19 related hardships are reported for all periods presented in alignment with the rules set forth for banks to report delinquency status to the credit agencies. These rules require that COVID-19 related loan modifications be reported as follows:
•if current at the time of modification, the loan remains current throughout the modification period,
•if delinquent at the time of modification and the borrower was not made current as part of the modification, the loan maintains its reported as delinquent status during the modification period, or
•if delinquent at the time of modification and the borrower was made current as part of the modification or became current during the modification period, the loan is reported as current.
As a result, certain loans modified due to COVID-19 related hardships are not being reported as past due for the periods presented based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period. Our second quarter 2021 Form 10-Q included, and our third quarter 2021 Form 10-Q will include, additional information on COVID-19 related loan modifications.

Table 12: Accruing Loans Past Due 30 to 59 Days (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 97 $ 72 $ 80 $ 106 $ 56
Commercial real estate 68 5 12 6 6
Equipment lease financing 5 3 21 31 7
Total commercial 170 80 113 143 69
Consumer
Residential real estate
Non government insured 128 124 61 89 99
Government insured 81 88 101 92 89
Home equity 45 44 43 50 48
Automobile 114 98 76 134 116
Credit card 42 37 31 43 44
Education
Non government insured
5 5 6 5 6
Government insured
40 41 43 50 51
Other consumer 34 31 11 14 17
Total consumer 489 468 372 477 470
Total $ 659 $ 548 $ 485 $ 620 $ 539
Supplemental Information
Total accruing loans past due 30-59 days to total loans 0.23 % 0.19 % 0.20 % 0.26 % 0.22 %
Commercial 0.09 % 0.04 % 0.07 % 0.09 % 0.04 %
Consumer 0.51 % 0.49 % 0.51 % 0.64 % 0.61 %
(a)Excludes loans held for sale.
(b)Includes $220 million of accruing loans 30-59 days past due at September 30, 2021, $98 million in the commercial portfolio and $122 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $141 million, $30 million and $111 million, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

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Accruing Loans Past Due (Unaudited) (Continued)

Table 13: Accruing Loans Past Due 60 to 89 Days (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 50 $ 27 $ 13 $ 26 $ 37
Commercial real estate 2 3 1 1 6
Equipment lease financing 4 4 1 5 4
Total commercial 56 34 15 32 47
Consumer
Residential real estate
Non government insured 35 30 13 16 22
Government insured 45 52 60 62 58
Home equity 18 17 20 21 22
Automobile 23 20 19 34 32
Credit card 27 24 24 30 33
Education
Non government insured
3 2 3 2 2
Government insured
23 20 22 27 24
Other consumer 15 16 6 10 11
Total consumer 189 181 167 202 204
Total $ 245 $ 215 $ 182 $ 234 $ 251
Supplemental Information
Total accruing loans past due 60-89 days to total loans 0.08 % 0.07 % 0.08 % 0.10 % 0.10 %
Commercial 0.03 % 0.02 % 0.01 % 0.02 % 0.03 %
Consumer 0.20 % 0.19 % 0.23 % 0.27 % 0.27 %
(a)Excludes loans held for sale.
(b)Includes $80 million of accruing loans 60-89 days past due at September 30, 2021, $26 million in the commercial portfolio and $54 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $56 million, $10 million and $46 million, respectively.

THE PNC FINANCIAL SERVICES GROUP, INC.

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Accruing Loans Past Due (Unaudited) (Continued)

Table 14: Accruing Loans Past Due 90 Days or More (a)
September 30 June 30 March 31 December 31 September 30
Dollars in millions 2021 (b) 2021 (b) 2021 2020 2020
Commercial
Commercial and industrial $ 56 $ 45 $ 63 $ 30 $ 36
Commercial real estate 11 2
Total commercial 67 47 63 30 36
Consumer
Residential real estate
Non government insured 28 40 17 27 28
Government insured 268 297 258 292 241
Automobile 4 3 6 12 12
Credit card 53 59 52 60 60
Education
Non government insured
1 1 2 2 1
Government insured
60 66 74 75 62
Other consumer 11 14 7 11 8
Total consumer 425 480 416 479 412
Total $ 492 $ 527 $ 479 $ 509 $ 448
Supplemental Information
Total accruing loans past due 90 days or more to total loans 0.17 % 0.18 % 0.20 % 0.21 % 0.18 %
Commercial 0.03 % 0.02 % 0.04 % 0.02 % 0.02 %
Consumer 0.45 % 0.50 % 0.57 % 0.64 % 0.54 %
Total accruing loans past due $ 1,396 $ 1,290 $ 1,146 $ 1,363 $ 1,238
Commercial $ 293 $ 161 $ 191 $ 205 $ 152
Consumer $ 1,103 $ 1,129 $ 955 $ 1,158 $ 1,086
Total accruing loans past due to total loans 0.48 % 0.44 % 0.48 % 0.56 % 0.50 %
Commercial 0.15 % 0.08 % 0.12 % 0.12 % 0.09 %
Consumer 1.16 % 1.19 % 1.32 % 1.55 % 1.42 %
(a)Excludes loans held for sale.
(b)Includes $72 million of accruing loans 90 days or more past due at September 30, 2021, $6 million in the commercial portfolio and $66 million in the consumer portfolio, attributable to BBVA. Comparable amounts at June 30, 2021 were $94 million, $7 million and $87 million, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.

Page 13
Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, insurance services, investment management and cash management products and services to consumer and small business customers. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. The branch network is located primarily in markets across the Mid-Atlantic, Midwest, Southeast and Southwest. Our national expansion strategy is designed to grow customers with digitally-led banking and a thin branch network in markets outside of our existing retail branch network. Deposit products include checking, savings and money market accounts and certificates of deposit. Lending products include residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans and personal and small business loans and lines of credit. The residential mortgage loans are directly originated within our branch network and nationwide, and are typically underwritten to agency and/or third-party standards, and either sold, servicing retained or held on our balance sheet. Brokerage, investment management and cash management products and services include managed, education, retirement and trust accounts.

Corporate & Institutional Bankingprovides lending, treasury management, and capital markets-related products and services to mid-sized and large corporations, and government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. The Treasury Management business provides payables, receivables, deposit and account services, liquidity and investments, and online and mobile banking products and services to our clients. Capital markets-related products and services include foreign exchange, derivatives, fixed income, securities underwriting, loan syndications, mergers and acquisitions advisory and equity capital markets advisory related services. We also provide commercial loan servicing and technology solutions for the commercial real estate finance industry. Products and services are provided nationally.

Asset Management Group provides private banking for high net worth and ultra high net worth clients and institutional asset management. The Asset Management group is comprised of two distinct operating units:
•PNC Private Bank provides products and services to emerging affluent, high net worth and ultra high net worth individuals and their families including investment and retirement planning, customized investment management, credit and cash management solutions, and trust management and administration. In addition, multi-generational family planning services are also provided to ultra high net worth individuals and 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, and retirement plan fiduciary investment services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 15: Period End Employees
September 30 June 30 March 31 December 31 September 30
2021 2021 2021 2020 2020
Full-time employees
Retail Banking 33,188 33,471 27,690 27,621 27,808
Other full-time employees 25,442 25,512 22,281 21,928 21,997
Total full-time employees 58,630 58,983 49,971 49,549 49,805
Part-time employees
Retail Banking 1,616 1,821 1,697 1,611 1,593
Other part-time employees 94 431 101 97 104
Total part-time employees 1,710 2,252 1,798 1,708 1,697
Total 60,340 61,235 51,769 51,257 51,502


THE PNC FINANCIAL SERVICES GROUP, INC.

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Table 16: 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 2021 2021 2021 2020 2020 2021 2020
Income
Retail Banking $ 447 $ 232 $ 607 $ 336 $ 530 $ 1,286 $ 508
Corporate & Institutional Banking 1,123 809 1,058 992 670 2,990 682
Asset Management Group 114 87 99 82 91 300 173
Other (210) (37) 52 32 228 (195) 157
Net income from continuing operations excluding noncontrolling interest $ 1,474 $ 1,091 $ 1,816 $ 1,442 $ 1,519 $ 4,381 $ 1,520
Revenue
Retail Banking $ 2,375 $ 2,203 $ 2,016 $ 1,853 $ 2,056 $ 6,594 $ 6,275
Corporate & Institutional Banking 2,306 1,959 1,808 1,913 1,748 6,073 5,198
Asset Management Group 397 356 322 316 310 1,075 895
Other 119 149 74 126 167 342 325
Total revenue $ 5,197 $ 4,667 $ 4,220 $ 4,208 $ 4,281 $ 14,084 $ 12,693

(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.

Our third quarter 2021 business segment results reflect the full quarter benefit of BBVA's business operations, and our second quarter 2021 results reflect the impact of BBVA business operations for the month of June. Period end information presented includes BBVA's balances at both September 30, 2021 and June 30, 2021. Until the conversion of bank systems and branches on October 12, 2021, PNC Bank and BBVA customers were served through their respective PNC Bank and BBVA USA branches, websites and mobile apps, financial advisors and relationship managers. Upon conversion, there will be changes in the segmentation of BBVA USA customers as we integrate data to PNC applications, finalize the review of customer relationships and better align customers with PNC's products and services. These changes will be reflected in fourth quarter reporting.

THE PNC FINANCIAL SERVICES GROUP, INC.

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Table 17: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 1,713 $ 1,497 $ 1,362 $ 1,380 $ 1,383 $ 4,572 $ 4,229
Noninterest income 662 706 654 473 673 2,022 2,046
Total revenue 2,375 2,203 2,016 1,853 2,056 6,594 6,275
Provision for (recapture of) credit losses (113) 214 (257) (81) (157) (156) 1,049
Noninterest expense 1,889 1,677 1,476 1,482 1,512 5,042 4,537
Pretax earnings 599 312 797 452 701 1,708 689
Income taxes 140 73 183 105 162 396 161
Noncontrolling interest 12 7 7 11 9 26 20
Earnings $ 447 $ 232 $ 607 $ 336 $ 530 $ 1,286 $ 508
Average Balance Sheet
Loans held for sale $ 1,583 $ 1,405 $ 891 $ 672 $ 700 $ 1,296 $ 769
Loans
Consumer
Residential real estate $ 30,702 $ 21,653 $ 17,468 $ 18,042 $ 18,435 $ 23,323 $ 18,215
Home equity 23,047 22,080 21,833 22,366 22,647 22,324 22,723
Automobile 17,377 14,888 13,890 14,536 15,573 15,398 16,449
Credit card 6,484 5,900 5,819 6,218 6,408 6,070 6,767
Education 2,712 2,812 2,938 3,027 3,119 2,820 3,226
Other consumer 2,892 2,175 1,898 2,086 2,262 2,326 2,417
Total consumer 83,214 69,508 63,846 66,275 68,444 72,261 69,797
Commercial 15,895 14,796 13,743 13,391 13,356 14,819 12,298
Total loans $ 99,109 $ 84,304 $ 77,589 $ 79,666 $ 81,800 $ 87,080 $ 82,095
Total assets $ 117,394 $ 100,948 $ 92,891 $ 94,303 $ 98,731 $ 103,820 $ 98,764
Deposits
Noninterest-bearing demand $ 65,985 $ 54,260 $ 44,845 $ 43,818 $ 43,752 $ 55,107 $ 38,390
Interest-bearing demand 62,414 59,329 54,269 50,702 49,274 58,700 46,501
Money market 40,471 29,998 24,198 24,112 23,816 31,639 23,210
Savings 81,950 79,518 75,180 72,041 70,236 78,907 67,000
Certificates of deposit 11,171 10,101 9,742 10,156 10,852 10,321 11,579
Total deposits $ 261,991 $ 233,206 $ 208,234 $ 200,829 $ 197,930 $ 234,674 $ 186,680
Performance Ratios
Return on average assets 1.51 % 0.92 % 2.65 % 1.41 % 2.13 % 1.66 % 0.69 %
Noninterest income to total revenue 28 % 32 % 32 % 26 % 33 % 31 % 33 %
Efficiency 80 % 76 % 73 % 80 % 74 % 76 % 72 %
(a)See note (a) on page 14.

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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 2021 2021 2021 2020 2020 2021 2020
Supplemental Noninterest Income
Information
Consumer services $ 470 $ 435 $ 368 $ 369 $ 371 $ 1,273 $ 1,058
Residential mortgage $ 147 $ 103 $ 105 $ 99 $ 137 $ 355 $ 505
Service charges on deposits $ 158 $ 129 $ 119 $ 133 $ 118 $ 406 $ 364
Residential Mortgage Information
Residential mortgage servicing statistics
(in billions, except as noted) (a)
Serviced portfolio balance (b) $ 139 $ 145 $ 117 $ 121 $ 119
Serviced portfolio acquisitions $ 2 $ 33 $ 7 $ 12 $ 8 $ 42 $ 21
MSR asset value (b) $ 1.1 $ 1.1 $ 1.0 $ 0.7 $ 0.6
MSR capitalization value (in basis points) (b) 81 77 83 56 50
Servicing income: (in millions)
Servicing fees, net (c) $ 18 $ (3) $ 5 $ 13 $ 25 $ 20 $ 105
Mortgage servicing rights valuation, net of
economic hedge
$ 24 $ 24 $ 14 $ (1) $ 17 $ 62 $ 138
Residential mortgage loan statistics
Loan origination volume (in billions) $ 7.4 $ 6.5 $ 4.3 $ 3.7 $ 4.0 $ 18.2 $ 11.4
Loan sale margin percentage 3.01 % 2.67 % 3.28 % 3.75 % 3.62 % 2.95 % 3.51 %
Percentage of originations represented by:
Purchase volume (d) 47 % 48 % 34 % 45 % 44 % 45 % 38 %
Refinance volume 53 % 52 % 66 % 55 % 56 % 55 % 62 %
Other Information (b)
Customer-related statistics (average) (e)
Non-teller deposit transactions (f) 66 % 65 % 66 % 66 % 67 % 66 % 63 %
Digital consumer customers (g) 80 % 80 % 79 % 77 % 75 % 80 % 73 %
Credit-related statistics
Nonperforming assets $ 1,220 $ 1,245 $ 1,229 $ 1,211 $ 1,077
Net charge-offs - loans and leases $ 82 $ 79 $ 108 $ 136 $ 125 $ 269 $ 433
Other statistics
ATMs 9,572 9,636 8,874 8,900 9,058
Branches (h) 2,712 2,724 2,137 2,162 2,207
Brokerage account client assets (in billions) (i) $ 76 $ 83 $ 61 $ 59 $ 55

(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 both regularly scheduled loan payments, prepayments, and loans that were paid down or paid off during the period.
(d)Mortgages with borrowers as part of residential real estate purchase transactions.
(e)Represents PNC legacy only, statistics will be refreshed to include BBVA activity in fourth quarter reporting after the conversion of bank systems and branches is completed.
(f)Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.
(g)Represents consumer checking relationships that process the majority of their transactions through non-teller channels.
(h)Excludes stand-alone mortgage offices and satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
(i)Includes cash and money market balances.


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Table 18: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 1,250 $ 1,092 $ 1,001 $ 994 $ 1,025 $ 3,343 $ 3,055
Noninterest income 1,056 867 807 919 723 2,730 2,143
Total revenue 2,306 1,959 1,808 1,913 1,748 6,073 5,198
Provision for (recapture of) credit losses (99) 104 (282) (166) 211 (277) 2,254
Noninterest expense 980 813 711 801 663 2,504 2,055
Pretax earnings 1,425 1,042 1,379 1,278 874 3,846 889
Income taxes 299 229 318 282 201 846 201
Noncontrolling interest 3 4 3 4 3 10 6
Earnings $ 1,123 $ 809 $ 1,058 $ 992 $ 670 $ 2,990 $ 682
Average Balance Sheet
Loans held for sale $ 541 $ 564 $ 691 $ 1,039 $ 904 $ 598 $ 669
Loans
Commercial
Commercial and industrial $ 134,128 $ 121,232 $ 114,944 $ 120,297 $ 125,187 $ 123,505 $ 127,149
Commercial real estate 35,368 30,118 27,182 27,509 27,511 30,919 27,070
Equipment lease financing 6,300 6,332 6,332 6,381 6,772 6,321 6,957
Total commercial 175,796 157,682 148,458 154,187 159,470 160,745 161,176
Consumer 20 13 9 10 11 14 9
Total loans $ 175,816 $ 157,695 $ 148,467 $ 154,197 $ 159,481 $ 160,759 $ 161,185
Total assets $ 202,268 $ 181,770 $ 170,531 $ 177,792 $ 183,266 $ 184,964 $ 185,001
Deposits
Noninterest-bearing demand $ 85,869 $ 75,570 $ 66,666 $ 64,334 $ 56,433 $ 76,105 $ 50,104
Interest-bearing demand 33,817 30,156 28,118 28,793 29,730 30,718 26,182
Money market 36,115 31,788 33,182 36,705 38,015 33,706 34,373
Other 7,315 7,499 8,368 8,928 8,956 7,723 8,789
Total deposits $ 163,116 $ 145,013 $ 136,334 $ 138,760 $ 133,134 $ 148,252 $ 119,448
Performance Ratios
Return on average assets 2.20 % 1.79 % 2.52 % 2.21 % 1.45 % 2.16 % 0.49 %
Noninterest income to total revenue 46 % 44 % 45 % 48 % 41 % 45 % 41 %
Efficiency 42 % 42 % 39 % 42 % 38 % 41 % 40 %
Other Information
Consolidated revenue from:
Treasury Management (b) $ 592 $ 523 $ 494 $ 472 $ 452 $ 1,609 $ 1,412
Capital Markets (b) $ 577 $ 432 $ 403 $ 530 $ 345 $ 1,412 $ 1,077
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (c) $ 44 $ 29 $ 30 $ 45 $ 46 $ 103 $ 117
Commercial mortgage loan servicing income (d) 88 66 90 82 76 244 212
Commercial mortgage servicing rights valuation, net of economic hedge (e) 14 33 17 14 16 64 58
Total $ 146 $ 128 $ 137 $ 141 $ 138 $ 411 $ 387
MSR asset value (f) $ 703 $ 682 $ 702 $ 569 $ 515
Average loans by C&IB business
Corporate Banking $ 85,208 $ 77,645 $ 74,459 $ 76,664 $ 81,617 $ 78,975 $ 83,762
Real Estate 47,335 41,188 38,395 41,427 40,592 42,313 40,030
Business Credit 25,540 22,965 21,552 21,337 21,845 23,367 23,009
Commercial Banking 13,458 12,513 10,807 11,375 11,770 12,435 10,093
Other 4,275 3,384 3,254 3,394 3,657 3,669 4,291
Total average loans $ 175,816 $ 157,695 $ 148,467 $ 154,197 $ 159,481 $ 160,759 $ 161,185
Credit-related statistics
Nonperforming assets (f) $ 1,061 $ 1,274 $ 658 $ 827 $ 832
Net charge-offs - loans and leases $ 13 $ 233 $ 44 $ 99 $ 32 $ 290 $ 181

(a)See note (a) on page 14.
(b)Amounts are reported in net interest income and noninterest income.
(c)Represents other noninterest income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, originations 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 (primarily in corporate service fees) 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)Amounts are reported in corporate service fees.
(f)Presented as of period end.

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Table 19: 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 2021 2021 2021 2020 2020 2021 2020
Income Statement
Net interest income $ 141 $ 112 $ 93 $ 91 $ 89 $ 346 $ 266
Noninterest income 256 244 229 225 221 729 629
Total revenue 397 356 322 316 310 1,075 895
Provision for (recapture of) credit losses (6) 23 (9) (2) (19) 8 23
Noninterest expense 255 219 202 211 211 676 647
Pretax earnings 148 114 129 107 118 391 225
Income taxes 34 27 30 25 27 91 52
Earnings $ 114 $ 87 $ 99 $ 82 $ 91 $ 300 $ 173
Average Balance Sheet
Loans
Consumer
Residential real estate $ 5,727 $ 4,439 $ 3,635 $ 3,326 $ 2,976 $ 4,608 $ 2,667
Other consumer 4,544 4,190 4,008 4,077 4,065 4,249 4,031
Total consumer 10,271 8,629 7,643 7,403 7,041 8,857 6,698
Commercial 2,693 1,415 756 774 810 1,629 849
Total loans $ 12,964 $ 10,044 $ 8,399 $ 8,177 $ 7,851 $ 10,486 $ 7,547
Total assets $ 13,805 $ 10,640 $ 8,873 $ 8,615 $ 8,361 $ 11,124 $ 8,041
Deposits
Noninterest-bearing demand $ 4,332 $ 2,537 $ 1,754 $ 1,689 $ 1,692 $ 2,884 $ 1,528
Interest-bearing demand 10,200 9,477 9,104 8,404 8,101 9,597 7,566
Money market 6,193 3,066 1,520 1,606 1,542 3,610 1,616
Savings 7,729 7,789 7,747 7,388 7,243 7,755 7,279
Other 862 562 454 482 554 628 707
Total deposits $ 29,316 $ 23,431 $ 20,579 $ 19,569 $ 19,132 $ 24,474 $ 18,696
Performance Ratios
Return on average assets 3.28 % 3.28 % 4.52 % 3.78 % 4.32 % 3.61 % 2.88 %
Noninterest income to total revenue 64 % 69 % 71 % 71 % 71 % 68 % 70 %
Efficiency 64 % 62 % 63 % 67 % 68 % 63 % 72 %
Other Information
Nonperforming assets (b) $ 80 $ 85 $ 68 $ 66 $ 39
Net charge-offs (recoveries) - loans and leases $ (1) $ 2 $ 1 $ 1 $ 1
Brokerage account client assets (in billions) (b) $ 5 $ 5
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management $ 183 $ 183 $ 173 $ 170 $ 158
Nondiscretionary client assets under administration 170 172 161 154 142
Total $ 353 $ 355 $ 334 $ 324 $ 300
Discretionary client assets under management
Personal $ 117 $ 119 $ 110 $ 108 $ 99
Institutional 66 64 63 62 59
Total $ 183 $ 183 $ 173 $ 170 $ 158
(a)See note (a) on page 14.
(b)As of period end.
(c)Excludes brokerage account client assets.

THE PNC FINANCIAL SERVICES GROUP, INC.

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Glossary of Terms

2019 Tailoring Rules - Rules adopted by the federal banking agencies to better tailor the application of their capital, liquidity, and enhanced prudential requirements for banking organizations to the asset size and risk profile (as measured by certain regulatory metrics) of the banking organization. Effective January 1, 2020, the agencies' capital and liquidity rules classify all BHCs with $100 billion or more in total assets into one of four categories (Category I, Category II, Category III, and Category IV).

Adjusted average total assets - Primarily consisted of total average quarterly (or annual) assets plus/less unrealized losses (gains) on investment securities, less goodwill and certain other intangible assets (net of eligible deferred taxes).

Allowance for credit losses (ACL) - A valuation account that is deducted from or added to the amortized cost basis of the related
financial assets to present the net carrying value at the amount expected to be collected on the financial asset.

Amortized cost basis - Amount at which a financial asset is originated or acquired, adjusted for applicable accretion or amortization of premiums, discounts and net deferred fees or costs, collection of cash, charge-offs, foreign exchange and fair value hedge accounting adjustments.

Basel III common equity Tier 1 (CET1) capital (Tailoring Rules) - Common stock plus related surplus, net of treasury stock, plus retained earnings, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments. Investments in unconsolidated financial institutions, as well as mortgage servicing rights and deferred tax assets, must then be deducted to the extent such items (net of associated deferred tax liabilities) individually exceed 25% of our adjusted Basel III common equity Tier 1 capital.

Basel III common equity Tier 1 capital ratio - Common equity Tier 1 capital divided by period-end risk-weighted assets (as applicable).

Basel III Tier 1 capital - Common equity Tier 1 capital, plus qualifying preferred stock, plus certain trust preferred capital securities, plus certain noncontrolling interests that are held by others and plus/less other adjustments.

Basel III Tier 1 capital ratio - Tier 1 capital divided by period-end risk-weighted assets (as applicable).

Basel III Total capital - Tier 1 capital plus qualifying subordinated debt, plus certain trust preferred securities, plus, under the Basel III transitional rules and the standardized approach, the allowance for loan and lease losses included in Tier 2 capital and other.

Basel III Total capital ratio - Basel III Total capital divided by period-end risk-weighted assets (as applicable).

BBVA - BBVA USA Bancshares, Inc.

BBVA, S.A. - Banco Bilbao Vizcaya Argentaria, S.A.

BBVA USA - BBVA USA, the Alabama-chartered bank subsidiary of BBVA USA Bancshares, Inc.

BlackRock - BlackRock, Inc.

Charge-off - Process of removing a loan or portion of a loan from our balance sheet because it is considered uncollectible. We also record a charge-off when a loan is transferred from portfolio holdings to held for sale by reducing the loan carrying amount to the fair value of the loan, if fair value is less than carrying amount.

Common shareholders' equity - Total shareholders' equity less the liquidation value of preferred stock.

Credit valuation adjustment - Represents an adjustment to the fair value of our derivatives for our own and counterparties' non-performance risk.

Criticized commercial loans - Loans with potential or identified weaknesses based upon internal risk ratings that comply with the regulatory classification definitions of "Special Mention," "Substandard" or "Doubtful."

Current Expected Credit Loss (CECL) - Methodology for estimating the allowance for credit losses on in-scope financial assets held at amortized cost and unfunded lending related commitments which uses a combination of expected losses over a reasonable and supportable forecast period, a reversion period and long run average credit losses for their estimated contractual term.


THE PNC FINANCIAL SERVICES GROUP, INC.

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Discretionary client assets under management - Assets over which we have sole or shared investment authority for our customers/clients. We do not include these assets on our Consolidated Balance Sheet.

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

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

Efficiency - Noninterest expense divided by total revenue.

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

Fee income - Refers to the following categories within Noninterest income: Asset management; Consumer services; Corporate services; Residential mortgage; and Service charges on deposits.

FICO score - A credit bureau-based industry standard score created by Fair Isaac Co. which predicts the likelihood of borrower default. We use FICO scores both in underwriting and assessing credit risk in our consumer lending portfolio. Lower FICO scores indicate likely higher risk of default, while higher FICO scores indicate likely lower risk of default. FICO scores are updated on a periodic basis.

GAAP - Accounting principles generally accepted in the United States of America.

Leverage ratio - Basel III Tier 1 capital divided by average quarterly adjusted total assets.

Nondiscretionary client assets under administration - Assets we hold for our customers/clients in a nondiscretionary, custodial capacity. We do not include these assets on our Consolidated Balance Sheet.

Nonperforming assets - Nonperforming assets include nonperforming loans, OREO and foreclosed assets. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans accounted for at amortized cost whose credit quality has deteriorated to the extent that full collection of contractual principal and interest is not probable, including TDRs which have not returned to performing status. Interest income is not recognized on nonperforming loans. Nonperforming loans exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale and loans accounted for under the fair value option.

Operating leverage - The period to period dollar or percentage change in total revenue less the dollar or percentage change in noninterest expense. A positive variance indicates that revenue growth exceeded expense growth (i.e., positive operating leverage) while a negative variance implies expense growth exceeded revenue growth (i.e., negative operating leverage).

Other real estate owned (OREO) and foreclosed assets - Assets taken in settlement of troubled loans primarily through deed-in-lieu of foreclosure or foreclosure. Foreclosed assets include real and personal property. Certain assets that have a government-guarantee which are classified as other receivables are excluded.

Purchased credit deteriorated assets (PCD) - Acquired loans or debt securities that, at acquisition, are determined to have experienced a more-than-insignificant deterioration in credit quality since origination or issuance.

Risk-weighted assets - Computed by the assignment of specific risk-weights (as defined by the Board of Governors of the Federal Reserve System) to assets and off-balance sheet instruments.

Servicing rights - Intangible assets or liabilities created by an obligation to service assets for others. Typical servicing rights include the right to receive a fee for collecting and forwarding payments on loans and related taxes and insurance premiums held in escrow.

Supplementary leverage ratio - Basel III Tier 1 capital divided by Supplementary leverage exposure.

Taxable-equivalent interest income - The interest income earned on certain assets that is completely or partially exempt from federal income tax. These tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to

THE PNC FINANCIAL SERVICES GROUP, INC.

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

Troubled debt restructuring (TDR) - A loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties.

Unfunded lending related commitments - Standby letters of credit, financial guarantees, commitments to extend credit and similar unfunded obligations that are not unilaterally, unconditionally, cancelable at PNC's option.

Yield curve - A graph showing the relationship between the yields on financial instruments or market indices of the same credit quality with different maturities. For example, a "normal" or "positive" yield curve exists when long-term bonds have higher yields than short-term bonds. A "flat" yield curve exists when yields are the same for short-term and long-term bonds. A "steep" yield curve exists when yields on long-term bonds are significantly higher than on short-term bonds. An "inverted" or "negative" yield curve exists when short-term bonds have higher yields than long-term bonds.


Disclaimer

The PNC Financial Services Group Inc. published this content on 15 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 October 2021 15:21:02 UTC.


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Financials (USD)
Sales 2021 19 245 M - -
Net income 2021 5 601 M - -
Net Debt 2021 - - -
P/E ratio 2021 15,7x
Yield 2021 2,41%
Capitalization 85 310 M 85 310 M -
Capi. / Sales 2021 4,43x
Capi. / Sales 2022 4,17x
Nbr of Employees 50 403
Free-Float 77,7%
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Mean consensus OUTPERFORM
Number of Analysts 23
Last Close Price 201,85 $
Average target price 211,79 $
Spread / Average Target 4,92%
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Managers and Directors
William Stanton Demchak Chairman, President & Chief Executive Officer
Robert Q. Reilly Chief Financial Officer & Executive Vice President
Ganesh Krishnan Chief Information Officer & Executive VP
E. William Parsley Chief Operating Officer & Executive Vice President
Gagan Singh Chief Investment Officer