PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1

Attached files

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d793262d8k.htm
EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d793262dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2014

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2014

(UNAUDITED)


	Page
Consolidated Results:

Income Statement		1
Balance Sheet		2
Capital Ratios		3
Selected Noninterest Income Information		3
Average Balance Sheet		4-5
Details of Net Interest Margin		6
Total and Core Net Interest Income and Net Interest Margin		7
Per Share Related Information		8
Impact to 2013 Periods from Adoption of ASU 2014-01 (Investments in Low Income Housing Tax Credits)		8
Loans, Loans Held for Sale and Net Unfunded Loan Commitments		9
Allowances for Credit Losses		10
Purchase Accounting Accretion, Accretable Yield and Valuation of Purchased Impaired Loans		11
Nonperforming Assets and Troubled Debt Restructurings		12-13
Accruing Loans Past Due		14

Business Segment Results:

Descriptions		15
Period End Employees		15
Income and Revenue		16
Retail Banking		17-18
Corporate & Institutional Banking		19-20
Asset Management Group		21
Residential Mortgage Banking		22
Non-Strategic Assets Portfolio		23
Glossary of Terms		24-28

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 15, 2014. 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 and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, corporate and institutional banking, asset management and residential mortgage banking, providing many of its products and services nationally, as well as other products and services in PNC’s primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Delaware, Alabama, Virginia, Missouri, Georgia, Wisconsin and South Carolina. PNC also provides certain products and services internationally.


The PNC Financial Services Group, Inc.
Cross-Reference Index to Third Quarter 2014 Financial Supplement (Unaudited)
Financial Supplement Table Reference
Table	Description	Page
1	Consolidated Income Statement		1
2	Consolidated Balance Sheet		2
3	Capital Ratios		3
4	Selected Noninterest Income Information		3
5	Average Consolidated Balance Sheet		4-5
6	Supplemental Average Balance Sheet Information		5
7	Details of Net Interest Margin		6
8	Total and Core Net Interest Income		7
9	Details of Net Interest Margin		7
10	Details of Core Net Interest Margin		7
11	Per Share Related Information		8
12	Impact to 2013 Periods from Adoption of ASU 2014-01 (Investments in Low Income Housing Tax Credits)		8
13	Details of Loans		9
14	Details of Loans Held for Sale		9
15	Net Unfunded Loan Commitments		9
16	Change in Allowance for Loan and Lease Losses		10
17	Change in Allowance for Unfunded Loan Commitments and Letters of Credit		10
18	Accretion - Purchased Impaired Loans		11
19	Purchased Impaired Loans - Accretable Yield		11
20	Valuation of Purchased Impaired Loans		11
21	Nonperforming Assets By Type		12
22	Change in Nonperforming Assets		13
23	Largest Individual Nonperforming Assets at September 30, 2014		13
24	Summary of Troubled Debt Restructurings		13
25	Accruing Loans Past Due 30 To 59 Days		14
26	Accruing Loans Past Due 60 To 89 Days		14
27	Accruing Loans Past Due 90 Days or More		14
28	Period End Employees		15
29	Summary of Business Segment Income and Revenue		16
30	Retail Banking		17-18
31	Corporate & Institutional Banking		19-20
32	Asset Management Group		21
33	Residential Mortgage Banking		22
34	Non-Strategic Assets Portfolio		23


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Table 1: Consolidated Income Statement (Unaudited)


	Three months ended															Nine months ended
In millions, except per share data	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Interest Income
Loans	$	1,848		$	1,845		$	1,899		$	1,949		$	1,933		$	5,592		$	5,917
Investment securities		387			412			427			434			423			1,226			1,315
Other		93			99			84			96			92			276			296

Total interest income		2,328			2,356			2,410			2,479			2,448			7,094			7,528

Interest Expense
Deposits		81			80			78			81			84			239			263
Borrowed funds		143			147			137			132			130			427			384

Total interest expense		224			227			215			213			214			666			647

Net interest income		2,104			2,129			2,195			2,266			2,234			6,428			6,881

Noninterest Income
Asset management		411			362			364			364			330			1,137			978
Consumer services		320			323			290			327			316			933			926
Corporate services (a)		374			343			301			301			306			1,018			909
Residential mortgage (b)		140			182			161			271			199			483			600
Service charges on deposits		179			156			147			158			156			482			439
Net gains (losses) on sales of securities (c)		—			(6	)		10			3			21			4			96
Net other-than-temporary impairments (d)		(1	)		(1	)		(2	)		—			(2	)		(4	)		(16	)
Other (e)		314			322			311			383			360			947			1,126

Total noninterest income		1,737			1,681			1,582			1,807			1,686			5,000			5,058

Total revenue		3,841			3,810			3,777			4,073			3,920			11,428			11,939
Provision For Credit Losses		55			72			94			113			137			221			530
Noninterest Expense
Personnel		1,189			1,172			1,080			1,207			1,181			3,441			3,536
Occupancy		200			199			218			211			205			617			622
Equipment		220			204			201			197			194			625			566
Marketing		66			68			52			66			68			186			180
Other (f)		682			685			713			833			746			2,080			2,263

Total noninterest expense		2,357			2,328			2,264			2,514			2,394			6,949			7,167

Income before income taxes and noncontrolling interests		1,429			1,410			1,419			1,446			1,389			4,258			4,242
Income taxes (f)		391			358			359			372			361			1,108			1,104

Net income		1,038			1,052			1,060			1,074			1,028			3,150			3,138

Less: Net income (loss) attributable to noncontrolling interests (f)		1			3			(2	)		13			2			2			(2	)
Preferred stock dividends and discount accretion and redemptions		71			48			70			50			71			189			199

Net income attributable to common shareholders	$	966		$	1,001		$	992		$	1,011		$	955		$	2,959		$	2,941

Earnings Per Common Share
Basic	$	1.82		$	1.88		$	1.86		$	1.90		$	1.80		$	5.55		$	5.55
Diluted	$	1.79		$	1.85		$	1.82		$	1.87		$	1.77		$	5.45		$	5.49

Average Common Shares Outstanding
Basic		529			532			532			530			529			531			528
Diluted		537			539			539			535			534			539			531

Efficiency		61	%		61	%		60	%		62	%		61	%		61	%		60	%
Noninterest income to total revenue		45	%		44	%		42	%		44	%		43	%		44	%		42	%
Effective tax rate (g)		27.4	%		25.4	%		25.3	%		25.7	%		26.0	%		26.0	%		26.0	%

For additional information regarding footnotes (a), (b) and (e) below, refer to Selected Noninterest Income Statement Information on page 3.

(a)	Includes commercial mortgage servicing rights valuation adjustments, net of economic hedge.

(b)	Includes benefit/provision for residential mortgage repurchase obligations.

(c)	Net gains (losses) on sales of securities for the three months ended September 30, 2014 was less than $.5 million.

(d)	Net other-than-temporary impairments for the three months ended December 31, 2013 was less than $.5 million.

(e)	Includes gains on sales of Visa Class B common shares and credit valuations for customer-related derivatives activities.

(f)	Amounts for 2013 periods have been updated to reflect the first quarter 2014 adoption of Accounting Standards Update (ASU) 2014-01 related to investments in low income housing tax credits.

(g)	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


Consolidated Balance Sheet (Unaudited)
In millions, except par value	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013
Assets
Cash and due from banks (a)	$	4,164		$	4,892		$	4,723		$	4,043		$	4,908
Federal funds sold and resale agreements (b)		1,761			1,526			1,143			1,986			911
Trading securities		2,650			2,228			2,381			3,073			1,603
Interest-earning deposits with banks (a) (c)		26,247			16,876			14,877			12,135			8,047
Loans held for sale (b)		2,143			2,228			2,102			2,255			2,399
Investment securities		55,039			56,602			58,644			60,294			57,260
Loans (a) (b)		200,872			200,984			198,242			195,613			192,856
Allowance for loan and lease losses (a)		(3,406	)		(3,453	)		(3,530	)		(3,609	)		(3,691	)

Net loans		197,466			197,531			194,712			192,004			189,165
Goodwill		9,074			9,074			9,074			9,074			9,074
Other intangible assets		1,994			1,997			2,115			2,216			2,194
Equity investments (a) (d) (e)		10,763			10,583			10,337			10,560			10,178
Other (a) (b)		23,123			23,527			23,315			22,552			22,733

Total assets	$	334,424		$	327,064		$	323,423		$	320,192		$	308,472

Liabilities
Deposits
Noninterest-bearing	$	72,963		$	71,001		$	70,063		$	70,306		$	68,747
Interest-bearing		153,341			151,553			152,319			150,625			147,327

Total deposits		226,304			222,554			222,382			220,931			216,074
Borrowed funds
Federal funds purchased and repurchase agreements		3,499			3,132			3,233			4,289			3,165
Federal Home Loan Bank borrowings		16,471			15,023			13,911			12,912			8,479
Bank notes and senior debt		15,327			14,102			13,861			12,603			11,924
Subordinated debt		9,046			9,099			8,289			8,244			7,829
Commercial paper (a)		4,809			4,999			4,923			4,997			6,994
Other (a) (b)		3,175			2,711			2,589			3,060			1,882

Total borrowed funds		52,327			49,066			46,806			46,105			40,273
Allowance for unfunded loan commitments and letters of credit		251			232			228			242			235
Accrued expenses (a) (e)		5,090			4,753			4,808			4,690			4,621
Other (a)		4,457			4,666			4,281			4,187			4,522

Total liabilities		288,429			281,271			278,505			276,155			265,725

Equity
Preferred stock (f)
Common stock - $5 par value
Authorized 800 shares, issued 540, 540, 540, 540, and 539 shares		2,703			2,703			2,700			2,698			2,695
Capital surplus - preferred stock		3,945			3,944			3,943			3,941			3,940
Capital surplus - common stock and other		12,573			12,506			12,394			12,416			12,310
Retained earnings (e)		25,464			24,755			24,010			23,251			22,474
Accumulated other comprehensive income (loss)		727			881			656			436			47
Common stock held in treasury at cost: 12, 8, 6, 7, and 7 shares		(931	)		(584	)		(382	)		(408	)		(423	)

Total shareholders’ equity		44,481			44,205			43,321			42,334			41,043
Noncontrolling interests (e)		1,514			1,588			1,597			1,703			1,704

Total equity		45,995			45,793			44,918			44,037			42,747

Total liabilities and equity	$	334,424		$	327,064		$	323,423		$	320,192		$	308,472

(a)

Amounts include consolidated variable interest entities. Our second quarter 2014 Form 10-Q included, and our third quarter 2014 Form 10-Q will include, additional information regarding these items.

(b)	Amounts include assets and liabilities for which PNC has elected the fair value option. Our second quarter 2014 Form 10-Q included, and our third quarter 2014 Form 10-Q will include, additional information regarding these items.

(c)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $25.9 billion, $16.5 billion, $14.5 billion, $11.7 billion, and $7.6 billion as of September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013, respectively.

(d)	Amounts include our equity interest in BlackRock.

(e)	Amounts for 2013 periods have been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax credits.

(f)	Par value less than $.5 million at each date.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Table 3: Capital Ratios (Unaudited)


	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013
Transitional Basel III (a) (b) (c)
Common equity Tier 1 (d)		11.1	%		11.0	%		10.8	%		N/A			N/A
Tier 1 risk-based		12.8			12.7			12.6			N/A			N/A
Total capital risk-based		16.2			16.0			15.8			N/A			N/A
Leverage		11.1			11.2			11.1			N/A			N/A
Basel 1 Ratios (e)
Tier 1 common		N/A			N/A			N/A			10.5	%		10.3	%
Tier 1 risk-based		N/A			N/A			N/A			12.4			12.3
Total risk-based		N/A			N/A			N/A			15.8			15.6
Leverage		N/A			N/A			N/A			11.1			11.1
Common shareholders’ equity to assets		12.1			12.3			12.2			12.0			12.0

(a)	The ratios as of September 30, 2014 are estimated.

(b)	Calculated using the regulatory capital methodology applicable to PNC during 2014.

(c)

See Capital Ratios discussion in the Banking Regulation and Supervision section of Item 1 Business in our 2013 Form 10-K and in the consolidated balance sheet review section in our second quarter 2014 Form 10-Q. Our third quarter 2014 Form 10-Q will include additional discussion on these capital ratios.

(d)	The Basel III common equity Tier 1 capital ratio was previously referred to as the Basel III Tier 1 common capital ratio.

(e)	Ratios for the 2013 periods have not been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax credits.

Table 4: Selected Noninterest Income Information (Unaudited)


	Three months ended															Nine months ended
In millions, except per share data	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Increase (Decrease) to Noninterest Income and Impact on Diluted Earnings per Share
Commercial mortgage servicing rights valuation, net of economic hedge
Pretax	$	8		$	14		$	11		$	(5	)	$	18		$	33		$	73
After-tax	$	5		$	9		$	7		$	(3	)	$	11		$	21		$	47
Impact on diluted earnings per share (a)	$	.01		$	.02		$	.01		$	(.01	)	$	.02		$	.04		$	.09
Benefit / (provision) for residential mortgage repurchase obligations
Pretax	$	(13	)	$	(2	)	$	19		$	124		$	6		$	4		$	(71	)
After-tax	$	(8	)	$	(1	)	$	12		$	81		$	4		$	3		$	(46	)
Impact on diluted earnings per share (a)	$	(.02	)	$	(.00	)	$	.02		$	.15		$	.01		$	.00		$	(.09	)
Gains on sales of Visa Class B common shares
Pretax	$	57		$	54		$	62					$	85		$	173		$	168
After-tax	$	37		$	35		$	40					$	55		$	112		$	109
Impact on diluted earnings per share (a)	$	.07		$	.07		$	.07					$	.10		$	.21		$	.21
Credit valuations for customer-related derivatives activities
Pretax	$	3		$	(4	)	$	(14	)	$	16		$	(1	)	$	(15	)	$	40
After-tax	$	2		$	(3	)	$	(9	)	$	11		$	0		$	(10	)	$	26
Impact on diluted earnings per share (a)	$	.00		$	(.00	)	$	(.02	)	$	.02		$	(.00	)	$	(.02	)	$	.05

(a)	In calculating impact on diluted earnings per share in the table above, after-tax amounts for the income statement items were calculated using a statutory federal income tax rate of 35%.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

Table 5: Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended															Nine months ended
In millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)	$	18,134		$	19,207		$	20,721		$	21,204		$	22,605		$	19,344		$	23,265
Non-agency		5,021			5,204			5,375			5,539			5,862			5,199			5,925
Commercial mortgage-backed (b)		5,147			5,295			5,576			5,583			5,418			5,339			5,108
Asset-backed		5,207			5,400			5,593			5,814			5,962			5,399			5,872
U.S. Treasury and government agencies		5,142			4,883			4,169			2,507			2,013			4,734			2,265
State and municipal		1,913			2,104			2,652			2,275			2,354			2,220			2,242
Other debt		1,763			2,028			2,505			2,523			2,630			2,096			2,669
Corporate stocks and other		404			362			409			359			339			392			337

Total securities available for sale		42,731			44,483			47,000			45,804			47,183			44,723			47,683
Securities held to maturity
Residential mortgage-backed		5,778			5,977			5,995			5,726			3,794			5,903			3,923
Commercial mortgage-backed		2,409			2,560			2,748			3,153			3,276			2,584			3,513
Asset-backed		874			990			1,004			1,047			1,064			956			957
U.S. Treasury and government agencies		245			242			240			238			236			242			233
State and municipal		2,058			1,732			1,055			1,056			658			1,618			646
Other		325			331			337			341			346			331			349

Total securities held to maturity		11,689			11,832			11,379			11,561			9,374			11,634			9,621

Total investment securities		54,420			56,315			58,379			57,365			56,557			56,357			57,304
Loans
Commercial		92,547			91,866			89,517			88,185			86,456			91,321			85,326
Commercial real estate		22,961			22,775			21,652			20,587			19,558			22,468			19,092
Equipment lease financing		7,610			7,564			7,470			7,428			7,296			7,548			7,296
Consumer		62,351			62,472			63,093			63,203			62,277			62,636			61,761
Residential real estate		14,359			14,556			14,849			15,180			14,918			14,586			14,944

Total loans		199,828			199,233			196,581			194,583			190,505			198,559			188,419
Interest-earning deposits with banks		22,108			14,650			12,157			10,455			4,626			16,341			3,041
Loans held for sale		2,272			2,060			1,949			2,225			3,071			2,095			3,140
Federal funds sold and resale agreements		1,409			1,184			1,416			864			664			1,336			992
Other		4,914			4,927			5,296			4,993			4,183			5,045			4,433

Total interest-earning assets		284,951			278,369			275,778			270,485			259,606			279,733			257,329
Noninterest-earning assets:
Allowance for loan and lease losses		(3,445	)		(3,512	)		(3,591	)		(3,667	)		(3,761	)		(3,515	)		(3,839	)
Cash and due from banks		3,934			3,776			3,890			3,904			3,984			3,867			3,969
Other		44,005			43,887			43,485			43,346			43,371			43,793			45,373

Total assets	$	329,445		$	322,520		$	319,562		$	314,068		$	303,200		$	323,878		$	302,832

(a)	Calculated using average daily balances.

(b)

These line items were corrected for all periods presented due to a misclassification of Government National Mortgage Association (GNMA) securities collateralized by project loans. $1.1 billion was previously reported as residential mortgage-backed agency securities and was reclassified to commercial mortgage-backed securities.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Table 5: Average Consolidated Balance Sheet (Unaudited) (Continued) (a)


	Three months ended										Nine months ended
In millions	September 30 2014		June 30 2014		March 31 2014		December 31 2013		September 30 2013		September 30 2014		September 30 2013
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	76,014	$	74,261	$	74,034	$	73,534	$	70,557	$	74,777	$	69,567
Demand		43,112		43,316		42,635		41,151		39,866		43,023		39,805
Savings		12,152		11,976		11,408		11,010		11,007		11,848		10,935
Retail certificates of deposit		19,317		20,012		20,538		21,138		21,859		19,951		22,657
Time deposits in foreign offices and other time		2,235		2,168		2,069		2,013		1,804		2,158		2,077

Total interest-bearing deposits		152,830		151,733		150,684		148,846		145,093		151,757		145,041
Borrowed funds
Federal funds purchased and repurchase agreements		3,319		3,343		4,250		4,120		2,967		3,634		3,804
Federal Home Loan Bank borrowings		15,328		14,193		13,100		11,348		8,208		14,215		7,697
Bank notes and senior debt		14,221		13,490		13,327		12,252		11,256		13,682		10,873
Subordinated debt		8,804		8,570		8,040		7,900		7,334		8,475		7,196
Commercial paper		4,863		4,917		4,931		5,297		7,109		4,903		7,443
Other		2,801		2,591		2,740		2,156		1,792		2,711		1,981

Total borrowed funds		49,336		47,104		46,388		43,073		38,666		47,620		38,994

Total interest-bearing liabilities		202,166		198,837		197,072		191,919		183,759		199,377		184,035
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		70,993		68,219		67,679		68,193		66,834		68,976		65,485
Allowance for unfunded loan commitments and letters of credit		232		228		241		236		242		234		243
Accrued expenses and other liabilities		10,307		10,035		10,123		10,622		10,327		10,155		11,018
Equity		45,747		45,201		44,447		43,098		42,038		45,136		42,051

Total liabilities and equity	$	329,445	$	322,520	$	319,562	$	314,068	$	303,200	$	323,878	$	302,832

(a) Calculated using average daily balances.

Table 6: Supplemental Average Balance Sheet Information (Unaudited)
Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	152,830	$	151,733	$	150,684	$	148,846	$	145,093	$	151,757	$	145,041
Noninterest-bearing deposits		70,993		68,219		67,679		68,193		66,834		68,976		65,485

Total deposits	$	223,823	$	219,952	$	218,363	$	217,039	$	211,927	$	220,733	$	210,526
Transaction deposits	$	190,119	$	185,796	$	184,348	$	182,878	$	177,257	$	186,776	$	174,857
Common shareholders’ equity	$	40,238	$	39,659	$	38,838	$	37,455	$	36,406	$	39,584	$	36,144


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Table 7: 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
	2014			2014			2014			2013			2013			2014			2013
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)		2.64	%		2.62	%		2.64	%		2.60	%		2.33	%		2.63	%		2.42	%
Non-agency		4.64			5.19			4.91			5.14			5.70			4.92			5.54
Commercial mortgage-backed (b)		3.61			3.59			3.49			3.92			3.65			3.56			4.40
Asset-backed		2.01			1.96			1.79			1.92			1.87			1.92			1.86
U.S. Treasury and government agencies		1.01			1.20			1.30			1.36			1.90			1.16			1.64
State and municipal		3.98			4.27			4.78			4.31			4.24			4.40			4.30
Other debt		2.41			2.35			2.39			2.30			2.38			2.39			2.45
Corporate stocks and other		.10			.11			.10			.15			.12			.10			.12
Total securities available for sale		2.75			2.84			2.86			2.96			2.91			2.82			2.99
Securities held to maturity
Residential mortgage-backed		3.35			3.55			3.55			3.42			3.92			3.49			3.54
Commercial mortgage-backed		3.99			3.76			4.09			4.28			4.29			3.93			4.46
Asset-backed		1.75			1.54			1.51			1.57			1.59			1.60			1.70
U.S. Treasury and government agencies		3.81			3.80			3.77			3.82			3.81			3.80			3.79
State and municipal		5.50			5.47			5.61			5.65			5.55			5.50			5.55
Other		2.84			2.87			3.00			4.20			2.90			2.91			2.87
Total securities held to maturity		3.73			3.69			3.68			3.72			3.86			3.70			3.81
Total investment securities		2.96			3.02			3.02			3.11			3.06			3.00			3.13
Loans
Commercial		3.17			3.24			3.50			3.53			3.62			3.30			3.78
Commercial real estate		3.90			4.04			4.20			4.50			4.64			4.04			4.84
Equipment lease financing		3.48			3.61			3.64			3.74			3.75			3.58			4.07
Consumer		4.16			4.16			4.26			4.29			4.31			4.19			4.46
Residential real estate		5.03			4.86			5.09			5.18			5.00			5.00			5.14
Total loans		3.71			3.75			3.95			4.02			4.06			3.80			4.23
Interest-earning deposits with banks		.23			.27			.23			.26			.22			.24			.24
Loans held for sale		4.48			4.79			4.71			5.40			5.34			4.65			5.37
Federal funds sold and resale agreements		.38			.49			.32			.79			1.10			.39			.77
Other		4.24			5.26			4.02			4.51			4.54			4.49			4.86
Total yield on interest-earning assets		3.30			3.44			3.58			3.69			3.79			3.43			3.95
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.18			.18			.17			.18			.18			.18			.18
Demand		.05			.05			.05			.05			.05			.05			.05
Savings		.12			.10			.08			.08			.10			.10			.10
Retail certificates of deposit		.73			.74			.75			.76			.79			.74			.82
Time deposits in foreign offices and other time		.18			.17			.18			.17			.22			.18			.43
Total interest-bearing deposits		.21			.21			.21			.22			.23			.21			.24
Borrowed funds
Federal funds purchased and repurchase agreements		.08			.07			.11			.14			.15			.09			.15
Federal Home Loan Bank borrowings		.48			.50			.50			.48			.48			.49			.54
Bank notes and senior debt		1.33			1.51			1.49			1.51			1.71			1.44			1.74
Subordinated debt		2.40			2.65			2.54			2.63			2.89			2.53			2.84
Commercial paper		.30			.29			.28			.26			.22			.29			.23
Other		2.62			2.60			2.20			2.44			2.91			2.48			2.59
Total borrowed funds		1.14			1.24			1.18			1.21			1.33			1.19			1.31
Total rate on interest-bearing liabilities		.44			.45			.44			.44			.46			.44			.47

Interest rate spread		2.86			2.99			3.14			3.25			3.33			2.99			3.48
Impact of noninterest-bearing sources		.12			.13			.12			.13			.14			.13			.14

Net interest margin		2.98	%		3.12	%		3.26	%		3.38	%		3.47	%		3.12	%		3.62	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all earning assets in calculating net interest margins, in this table we use net interest income on a taxable-equivalent basis 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 generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013 and September 30, 2013, were $47 million, $47 million, $46 million, $45 million and $43 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2014 and September 30, 2013 were $140 million and $123 million, respectively.

(b)

These lines items were corrected for all periods presented due to a misclassification of Government National Mortgage Association (GNMA) securities collateralized by project loans, which were previously reported as residential mortgage-backed agency securities and have been reclassified to commercial mortgage-backed securities.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Total and Core Net Interest Income and Net Interest Margin (Unaudited)

Table 8: Total and Core Net Interest Income


	Three months ended															Nine months ended
In millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Core net interest income (a)	$	1,957		$	1,982		$	2,032		$	2,075		$	2,035		$	5,971		$	6,229
Total purchase accounting accretion (a) (b)		147			147			163			191			199			457			652

Total net interest income	$	2,104		$	2,129		$	2,195		$	2,266		$	2,234		$	6,428		$	6,881

(a) We believe that core net interest income, a non-GAAP measure, and purchase accounting accretion are useful in evaluating the components of total net interest income. (b) Total purchase accounting accretion includes purchase accounting accretion on purchased impaired loans. Refer to Table 18: Accretion - Purchased Impaired Loans for details for certain of these periods. Table 9: Details of Net Interest Margin (c)
	Three months ended															Nine months ended
In millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.96	%		3.02	%		3.02	%		3.11	%		3.06	%		3.00	%		3.13	%
Total loans		3.71			3.75			3.95			4.02			4.06			3.80			4.23
Other		1.19			1.76			1.62			2.05			2.96			1.48			3.43
Total yield on interest-earning assets		3.30			3.44			3.58			3.69			3.79			3.43			3.95

Rate on interest-bearing liabilities
Total interest-bearing deposits		.21			.21			.21			.22			.23			.21			.24
Total borrowed funds		1.14			1.24			1.18			1.21			1.33			1.19			1.31
Total rate on interest-bearing liabilities		.44			.45			.44			.44			.46			.44			.47

Interest rate spread		2.86			2.99			3.14			3.25			3.33			2.99			3.48
Impact of noninterest-bearing sources		.12			.13			.12			.13			.14			.13			.14

Net interest margin		2.98	%		3.12	%		3.26	%		3.38	%		3.47	%		3.12	%		3.62	%


(c) See note (a) on page 6. Table 10: Details of Core Net Interest Margin (d)
	Three months ended															Nine months ended
In millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.89	%		2.96	%		2.96	%		3.02	%		2.96	%		2.94	%		3.05	%
Total loans		3.42			3.46			3.62			3.65			3.68			3.49			3.80
Other		1.19			1.74			1.64			1.99			2.74			1.48			3.18
Total yield on interest-earning assets		3.08			3.22			3.33			3.40			3.48			3.20			3.60

Rate on interest-bearing liabilities
Total interest-bearing deposits		.23			.23			.23			.24			.26			.23			.27
Total borrowed funds		1.00			1.10			1.04			1.06			1.18			1.05			1.13
Total rate on interest-bearing liabilities		.42			.43			.43			.43			.45			.42			.46
Interest rate spread		2.66			2.79			2.90			2.97			3.03			2.78			3.14
Impact of noninterest-bearing sources		.12			.13			.12			.13			.14			.13			.14

Core net interest margin		2.78			2.92			3.02			3.10			3.17			2.91			3.28
Purchase accounting accretion impact on net interest margin		.20			.20			.24			.28			.30			.21			.34

Net interest margin		2.98	%		3.12	%		3.26	%		3.38	%		3.47	%		3.12	%		3.62	%

(d)

We believe that core net interest margin, a non-GAAP measure, is useful as a tool to help evaluate the impact of purchase accounting accretion on net interest margin. To calculate core net interest margin, each calculated margin in the table has been adjusted by annualized purchase accounting accretion divided by average interest-earning assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Table 11: Per Share Related Information (Unaudited)


	Three months ended											Nine months ended
In millions, except per share data	September 30 2014		June 30 2014		March 31 2014			December 31 2013		September 30 2013		September 30 2014		September 30 2013
Basic
Net income	$	1,038	$	1,052	$	1,060		$	1,074	$	1,028	$	3,150	$	3,138
Less:
Net income (loss) attributable to noncontrolling interests		1		3		(2	)		13		2		2		(2	)
Preferred stock dividends and discount accretion and redemptions		71		48		70			50		71		189		199

Net income attributable to common shareholders		966		1,001		992			1,011		955		2,959		2,941
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares		3		3		3			5		4		9		13

Net income attributable to basic common shares	$	963	$	998	$	989		$	1,006	$	951	$	2,950	$	2,928
Basic weighted-average common shares outstanding		529		532		532			530		529		531		528
Basic earnings per common share	$	1.82	$	1.88	$	1.86		$	1.90	$	1.80	$	5.55	$	5.55

Diluted
Net income attributable to basic common shares	$	963	$	998	$	989		$	1,006	$	951	$	2,950	$	2,928
Less: Impact of BlackRock earnings per share dilution		4		3		6			5		4		13		13

Net income attributable to diluted common shares	$	959	$	995	$	983		$	1,001	$	947	$	2,937	$	2,915
Basic weighted-average common shares outstanding		529		532		532			530		529		531		528
Dilutive potential common shares		8		7		7			5		5		8		3

Diluted weighted-average common shares outstanding		537		539		539			535		534		539		531
Diluted earnings per common share	$	1.79	$	1.85	$	1.82		$	1.87	$	1.77	$	5.45	$	5.49

Table 12: Impact to 2013 Periods from Adoption of ASU 2014-01 (Investments in Low Income Housing Tax Credits) (Unaudited) (a)

Income Statement


	Three months ended						Nine months ended
In millions	December 31 2013			September 30 2013			September 30 2013
Noninterest Expense
Previously reported	$	2,547		$	2,424		$	7,254
Adjustment from adoption of ASU 2014-01		(33	)		(30	)		(87	)

Revised	$	2,514		$	2,394		$	7,167

Net Income
Previously reported	$	1,061		$	1,039		$	3,166
Adjustment from adoption of ASU 2014-01		13			(11	)		(28	)

Revised	$	1,074		$	1,028		$	3,138

Diluted Earnings per Share
Previously reported	$	1.85		$	1.79		$	5.55
Adjustment from adoption of ASU 2014-01		.02			(.02	)		(.06	)

Revised	$	1.87		$	1.77		$	5.49

Efficiency
Previously reported		63	%		62	%		61	%
Adjustment from adoption of ASU 2014-01		(1	)		(1	)		(1	)

Revised		62	%		61	%		60	%

Effective Tax Rate
Previously reported		24.9	%		23.5	%		23.8	%
Adjustment from adoption of ASU 2014-01		.8			2.5			2.2

Revised		25.7	%		26.0	%		26.0	%


Balance Sheet
In millions	December 31 2013			September 30 2013
Retained Earnings
Previously reported	$	23,325		$	22,561
Adjustment from adoption of ASU 2014-01		(74	)		(87	)

Revised	$	23,251		$	22,474

(a)	We adopted the guidance in ASU 2014-01, Investments - Equity Method and Joint Ventures (Topic 323): Accounting For Investments in Qualified Affordable Housing Projects in the first quarter of 2014. Retrospective application is required.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Table 13: Details of Loans (Unaudited)


In millions	September 30 2014		June 30 2014		March 31 2014		December 31 2013		September 30 2013
Commercial
Retail/wholesale trade	$	16,162	$	16,146	$	16,157	$	15,530	$	15,178
Manufacturing		18,649		18,683		17,185		16,208		15,406
Service providers		13,603		13,734		13,576		13,052		12,973
Real estate related (a)		10,722		10,908		10,856		10,729		10,554
Financial services (b)		5,218		4,846		4,720		4,927		5,177
Health care		9,095		8,939		8,836		8,690		8,266
Other industries (b)		20,051		20,280		19,771		19,242		19,436

Total commercial		93,500		93,536		91,101		88,378		86,990

Commercial real estate
Real estate projects (c)		14,564		14,535		14,268		13,613		13,036
Commercial mortgage		8,378		8,384		7,883		7,578		7,095

Total commercial real estate		22,942		22,919		22,151		21,191		20,131

Equipment lease financing		7,621		7,628		7,521		7,576		7,314

Total commercial lending		124,063		124,083		120,773		117,145		114,435

Consumer
Home equity
Lines of credit		20,667		20,959		21,277		21,696		22,043
Installment		14,388		14,507		14,595		14,751		14,548
Credit card		4,449		4,435		4,309		4,425		4,242
Other consumer
Education		6,978		7,118		7,360		7,534		7,711
Automobile		11,548		11,005		10,906		10,827		10,259
Other		4,428		4,317		4,216		4,170		4,226

Total consumer		62,458		62,341		62,663		63,403		63,029

Residential real estate
Residential mortgage		13,805		13,965		14,179		14,418		14,709
Residential construction		546		595		627		647		683

Total residential real estate		14,351		14,560		14,806		15,065		15,392

Total consumer lending		76,809		76,901		77,469		78,468		78,421

Total loans (d)	$	200,872	$	200,984	$	198,242	$	195,613	$	192,856

(a) Includes loans to customers in the real estate and construction industries. (b) Total commercial loans as of December 31, 2013 in the table above reflects a reclassification between Financial services and Other industries related to the wind down of Market Street Funding LLC. The corresponding loan balances as of September 30, 2013 were also reclassified to conform to the December 2013 presentation. There was no impact to periods prior to September 30, 2013. (c) Includes both construction loans and intermediate financing for projects.
(d) Includes purchased impaired loans:	$	5,167	$	5,557	$	5,824	$	6,106	$	6,398
Table 14: Details of Loans Held for Sale (Unaudited)
In millions	September 30 2014		June 30 2014		March 31 2014		December 31 2013		September 30 2013
Commercial mortgage	$	891	$	900	$	732	$	867	$	785
Residential mortgage		1,211		1,271		1,088		1,356		1,613
Other		41		57		282		32		1

Total	$	2,143	$	2,228	$	2,102	$	2,255	$	2,399

Table 15: Net Unfunded Loan Commitments (Unaudited)
In millions	September 30 2014		June 30 2014		March 31 2014		December 31 2013		September 30 2013
Net unfunded loan commitments	$	136,795	$	131,446	$	129,644	$	129,870	$	126,577


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit (Unaudited)

Table 16: Change in Allowance for Loan and Lease Losses


Three months ended - in millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013
Beginning balance	$	3,453		$	3,530		$	3,609		$	3,691		$	3,772
Gross charge-offs:
Commercial		(60	)		(86	)		(85	)		(87	)		(113	)
Commercial real estate		(14	)		(14	)		(18	)		(24	)		(42	)
Equipment lease financing		(3	)		(4	)		(2	)		(2	)		(2	)
Home equity		(50	)		(68	)		(95	)		(114	)		(86	)
Residential real estate		(11	)		(7	)		(8	)		(2	)		(9	)
Credit card		(40	)		(42	)		(43	)		(42	)		(41	)
Other consumer		(44	)		(43	)		(49	)		(52	)		(47	)

Total gross charge-offs		(222	)		(264	)		(300	)		(323	)		(340	)
Recoveries:
Commercial		62			43			51			65			54
Commercial real estate		15			29			20			23			24
Equipment lease financing		4			3			3			3			3
Home equity		19			20			19			18			18
Residential real estate		21			3			(1	)		6			(2	)
Credit card		5			6			5			5			6
Other consumer		14			15			17			14			13

Total recoveries		140			119			114			134			116
Net (charge-offs) recoveries:
Commercial		2			(43	)		(34	)		(22	)		(59	)
Commercial real estate		1			15			2			(1	)		(18	)
Equipment lease financing		1			(1	)		1			1			1
Home equity		(31	)		(48	)		(76	)		(96	)		(68	)
Residential real estate		10			(4	)		(9	)		4			(11	)
Credit card		(35	)		(36	)		(38	)		(37	)		(35	)
Other consumer		(30	)		(28	)		(32	)		(38	)		(34	)

Total net charge-offs		(82	)		(145	)		(186	)		(189	)		(224	)
Provision for credit losses		55			72			94			113			137
Other		(1	)					(1	)		1			(1	)
Net change in allowance for unfunded loan commitments and letters of credit		(19	)		(4	)		14			(7	)		7

Ending balance	$	3,406		$	3,453		$	3,530		$	3,609		$	3,691

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.16	%		.29	%		.38	%		.39	%		.47	%
Allowance for loan and lease losses to total loans		1.70			1.72			1.78			1.84			1.91
Commercial lending net charge-offs	$	4		$	(29	)	$	(31	)	$	(22	)	$	(76	)
Consumer lending net charge-offs		(86	)		(116	)		(155	)		(167	)		(148	)

Total net charge-offs	$	(82	)	$	(145	)	$	(186	)	$	(189	)	$	(224	)
Net charge-offs to average loans

Commercial lending		(.01	)%		.10	%		.11	%		.08	%		.27	%
Consumer lending		.44			.60			.81			.85			.76

Table 17: Change in Allowance for Unfunded Loan Commitments and Letters of Credit
Three months ended - in millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013
Beginning balance	$	232		$	228		$	242		$	235		$	242
Net change in allowance for unfunded loan commitments and letters of credit		19			4			(14	)		7			(7	)

Ending balance	$	251		$	232		$	228		$	242		$	235


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Purchase Accounting Accretion, Accretable Yield and Valuation of Purchased Impaired Loans (Unaudited)

Table 18: Accretion - Purchased Impaired Loans


	Three months ended									Nine months ended
	September 30			June 30			September 30			September 30			September 30
In millions	2014			2014			2013			2014			2013
Impaired loans
Scheduled accretion	$	109		$	120		$	145		$	354		$	452
Reversal of contractual interest on impaired loans		(57	)		(70	)		(82	)		(195	)		(250	)

Scheduled accretion net of contractual interest		52			50			63			159			202
Excess cash recoveries		31			35			26			95			87

Total impaired loans	$	83		$	85		$	89		$	254		$	289

Table 19: Purchased Impaired Loans - Accretable Yield


In millions				In millions
July 1, 2014	$	1,936		January 1, 2014	$	2,055
Scheduled accretion		(109	)	Scheduled accretion		(354	)
Excess cash recoveries		(31	)	Excess cash recoveries		(95	)
Net reclassifications to accretable from non-accretable and other activity (a)		23		Net reclassifications to accretable from non-accretable and other activity (a)		213

September 30, 2014 (b)	$	1,819		September 30, 2014 (b)	$	1,819

(a)

All of the net reclassifications for the third quarter of 2014 were driven by the commercial portfolio and were due to improvements of cash expected to be collected on both RBC Bank (USA) and National City loans in future periods. 68% of the net reclassifications for the first nine months of 2014 were driven by the consumer portfolio and were due to improvements of cash expected to be collected on both RBC Bank (USA) and National City loans in future periods with the remainder predominantly due to future cash flow changes in the commercial portfolio.

(b)	As of September 30, 2014, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $1.0 billion in future periods. This will offset the total net accretable interest in future interest income of $1.8 billion on purchased impaired loans.

Table 20: Valuation of Purchased Impaired Loans


	September 30, 2014						June 30, 2014						December 31, 2013
Dollars in millions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Outstanding balance	$	573					$	676					$	937
Purchased impaired mark		(168	)					(197	)					(264	)

Recorded investment		405						479						673
Allowance for loan losses		(96	)					(108	)					(133	)

Net investment		309			54	%		371			55	%		540			58	%

Consumer and residential mortgage loans:
Outstanding balance		4,795						5,120						5,548
Purchased impaired mark		(33	)					(42	)					(115	)

Recorded investment		4,762						5,078						5,433
Allowance for loan losses		(795	)					(778	)					(871	)

Net investment		3,967			83	%		4,300			84	%		4,562			82	%

Total purchased impaired loans:
Outstanding balance		5,368						5,796						6,485
Purchased impaired mark		(201	)					(239	)					(379	)

Recorded investment		5,167						5,557						6,106
Allowance for loan losses		(891	)					(886	)					(1,004	)

Net investment	$	4,276			80	%	$	4,671			81	%	$	5,102			79	%


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12


Details of Nonperforming Assets (Unaudited)
Table 21: Nonperforming Assets by Type
In millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	62		$	70		$	49		$	57		$	72
Manufacturing		44			69			63			58			61
Service providers		82			94			90			108			109
Real estate related (b)		76			79			122			124			142
Financial services		5			5			5			7			11
Health care		23			23			17			19			26
Other industries		28			54			91			84			77

Total commercial		320			394			437			457			498

Commercial real estate
Real estate projects		346			370			401			436			493
Commercial mortgage		49			65			79			82			105

Total commercial real estate		395			435			480			518			598

Equipment lease financing		3			4			6			5			6

Total commercial lending		718			833			923			980			1,102

Consumer lending (c)
Home equity		1,090			1,093			1,117			1,139			1,137
Residential real estate
Residential mortgage		725			799			829			890			891
Residential construction		18			17			13			14			11
Credit card		3			3			4			4			4
Other consumer		58			56			61			61			61

Total consumer lending		1,894			1,968			2,024			2,108			2,104

Total nonperforming loans (d)		2,612			2,801			2,947			3,088			3,206

OREO and foreclosed assets
Other real estate owned (OREO) (e)		353			352			343			360			403
Foreclosed and other assets		10			15			14			9			13

Total OREO and foreclosed assets		363			367			357			369			416

Total nonperforming assets	$	2,975		$	3,168		$	3,304		$	3,457		$	3,622

Nonperforming loans to total loans		1.30	%		1.39	%		1.49	%		1.58	%		1.66	%
Nonperforming assets to total loans, OREO and foreclosed assets		1.48			1.57			1.66			1.76			1.87
Nonperforming assets to total assets		.89			.97			1.02			1.08			1.17
Allowance for loan and lease losses to nonperforming loans (f)		130			123			120			117			115

(a)	See analysis of troubled debt restructurings (TDRs) on page 13.

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

(c)	Excludes most consumer loans and lines of credit, not secured by residential real estate, 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, loans accounted for under the fair value option and purchased impaired loans.

(e)

OREO excludes $214 million, $228 million, $238 million, $245 million and $264 million at September 30, 2014, June 30, 2014, March 31, 2014, December 31, 2013, and September 30, 2013, respectively, related to residential real estate that was acquired by us upon foreclosure of serviced loans as they are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) or guaranteed by the Department of Housing and Urban Development.

(f)	The allowance for loan and lease losses includes impairment reserves attributable to purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Table 22: Change in Nonperforming Assets (a)


In millions	July 1, 2014 - September 30, 2014			April 1, 2014 - June 30, 2014			January 1, 2014 - March 31, 2014			October 1, 2013 - Dec. 31, 2013			July 1, 2013 - September 30, 2013
Beginning balance	$	3,168		$	3,304		$	3,457		$	3,622		$	3,778
New nonperforming assets		380			644			633			836			863
Charge-offs and valuation adjustments		(127	)		(148	)		(152	)		(223	)		(220	)
Principal activity, including paydowns and payoffs		(195	)		(300	)		(323	)		(556	)		(483	)
Asset sales and transfers to loans held for sale		(143	)		(212	)		(85	)		(115	)		(117	)
Returned to performing status		(108	)		(120	)		(226	)		(107	)		(199	)

Ending balance	$	2,975		$	3,168		$	3,304		$	3,457		$	3,622

(a)

In the third and fourth quarters of 2013, amounts related to (i) New nonperforming assets, (ii) Principal activity, including paydowns and payoffs, and (iii) Returned to performing status were misstated. The original reported amounts for third quarter 2013 were (i) $824 million, (ii) ($289) million, and (iii) ($354) million respectively and for the fourth quarter 2013 (i) $714 million, (ii) ($141) million and (iii) ($400) million respectively. These updates did not impact the beginning or ending nonperforming asset balances and are corrected in the table.

Table 23: Largest Individual Nonperforming Assets at September 30, 2014


In millions
Ranking	Outstandings		Industry
1	$	36	Real Estate, Rental and Leasing
2		21	Wholesale Trade
3		15	Real Estate, Rental and Leasing
4		12	Manufacturing
5		11	Other Services (except Public Administration)
6		9	Real Estate, Rental and Leasing
7		9	Wholesale Trade
8		8	Real Estate, Rental and Leasing
9		7	Real Estate, Rental and Leasing
10		7	Mining, Quarrying, and Oil and Gas Extraction

Total	$	135

As a percent of total nonperforming assets 5%

(a)	Amounts shown are not net of related allowance for loan and lease losses, if applicable.

Table 24: Summary of Troubled Debt Restructurings


	September 30		June 30		March 31		December 31		September 30
In millions	2014		2014		2014		2013		2013
Total consumer lending	$	2,064	$	2,121	$	2,134	$	2,161	$	2,221
Total commercial lending		552		546		579		578		581

Total TDRs	$	2,616	$	2,667	$	2,713	$	2,739	$	2,802

Nonperforming	$	1,303	$	1,369	$	1,405	$	1,511	$	1,451
Accruing (a)		1,174		1,153		1,151		1,062		1,178
Credit card		139		145		157		166		173

Total TDRs	$	2,616	$	2,667	$	2,713	$	2,739	$	2,802

Loans whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties are considered troubled debt restructurings (TDRs). TDRs typically result from our loss mitigation activities and include rate reductions, principal forgiveness, postponement/reduction of scheduled amortization, and extensions, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Certain consumer government insured or guaranteed loans which were evaluated for TDR consideration, loans held for sale, loans accounted for under the fair value option, and pooled purchased impaired loans are not classified as TDRs.

(a)

Accruing loans have demonstrated a period of at least six months of current performance under the restructured terms and are excluded from nonperforming loans. Loans where borrowers have been discharged from bankruptcy and have not formally reaffirmed their loan obligation are not returned to accrual status.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Accruing Loans Past Due (Unaudited)

Table 25: Accruing Loans Past Due 30 to 59 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Sept. 30 2013		Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013			Sept. 30 2013
Commercial	$	46	$	71	$	93	$	81	$	73		.05	%		.08	%		.10	%		.09	%		.08	%
Commercial real estate		47		17		35		54		54		.20			.07			.16			.25			.27
Equipment lease financing		4		4		17		31		6		.05			.05			.23			.41			.08
Home equity		67		65		76		86		88		.19			.18			.21			.24			.24
Residential real estate
Non government insured		87		87		101		112		118		.61			.60			.68			.74			.77
Government insured		76		74		82		105		109		.53			.51			.55			.70			.71
Credit card		27		26		26		29		30		.61			.59			.60			.66			.71
Other consumer
Non government insured		56		50		51		62		56		.24			.22			.23			.28			.25
Government insured		164		154		149		154		170		.71			.69			.66			.68			.77

Total	$	574	$	548	$	630	$	714	$	704		.29			.27			.32			.37			.37

Table 26: Accruing Loans Past Due 60 to 89 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Sept. 30 2013		Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013			Sept. 30 2013
Commercial	$	19	$	26	$	20	$	20	$	37		.02	%		.03	%		.02	%		.02	%		.04	%
Commercial real estate		6		48		25		11		31		.03			.21			.11			.05			.15
Equipment lease financing		1		1				2		1		.01			.01						.03			.01
Home equity		25		27		32		34		32		.07			.08			.09			.09			.09
Residential real estate
Non government insured		24		21		27		30		31		.17			.14			.18			.20			.20
Government insured		41		48		43		57		57		.29			.33			.29			.38			.37
Credit card		18		18		19		19		19		.41			.41			.44			.43			.45
Other consumer
Non government insured		20		15		16		18		18		.09			.07			.07			.08			.08
Government insured		100		94		104		94		106		.44			.42			.46			.42			.48

Total	$	254	$	298	$	286	$	285	$	332		.13			.15			.14			.15			.17

Table 27: Accruing Loans Past Due 90 Days or More (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Sept. 30 2013		Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013			Sept. 30 2013
Commercial	$	39	$	35	$	28	$	42	$	33		.04	%		.04	%		.03	%		.05	%		.04	%
Commercial real estate		1						2		3		.00									.01			.01
Equipment lease financing										2														.03
Residential real estate
Non government insured		24		23		30		35		35		.17			.16			.20			.23			.23
Government insured		785		872		924		1,025		1,187		5.47			5.99			6.24			6.80			7.71
Credit card		29		29		31		34		31		.65			.65			.72			.77			.73
Other consumer
Non government insured		13		12		13		14		13		.06			.05			.06			.06			.06
Government insured		287		281		284		339		329		1.25			1.25			1.26			1.50			1.48

Total	$	1,178	$	1,252	$	1,310	$	1,491	$	1,633		.59			.62			.66			.76			.85

(a)	Excludes loans held for sale and purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, investment management and cash management services to consumer and small business customers within our primary geographic markets. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Delaware, Alabama, Virginia, Missouri, Georgia, Wisconsin and South Carolina.

Corporate & Institutional Banking provides lending, treasury management, and capital markets-related products and services to mid-sized and large corporations, government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. Treasury management services include cash and investment management, receivables management, disbursement services, funds transfer services, information reporting, and global trade services. Capital markets-related products and services include foreign exchange, derivatives, securities, loan syndications and mergers and acquisitions advisory and related services to middle-market companies. We also provide commercial loan servicing, and real estate advisory and technology solutions, for the commercial real estate finance industry. Products and services are generally provided within our primary geographic markets, with certain products and services offered nationally and internationally.

Asset Management Group includes personal wealth management for high net worth and ultra high net worth clients and institutional asset management. Wealth management products and services include investment and retirement planning, customized investment management, private banking, tailored credit solutions, and trust management and administration for individuals and their families. Institutional asset management provides investment management, custody administration and retirement administration services. Institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments, primarily located in our geographic footprint.

Residential Mortgage Banking directly originates first lien residential mortgage loans on a nationwide basis with a significant presence within the retail banking footprint. Mortgage loans represent loans collateralized by one-to-four-family residential real estate. These loans are typically underwritten to government agency and/or third-party standards, and sold, servicing retained, to secondary mortgage conduits of FNMA, FHLMC, Federal Home Loan Banks and third-party investors, or are securitized and issued under the GNMA program. The mortgage servicing operation performs all functions related to servicing mortgage loans, primarily those in first lien position, for various investors and for loans owned by PNC.

Non-Strategic Assets Portfolio includes a consumer portfolio of mainly residential mortgage and brokered home equity loans and lines of credit and a small commercial/commercial real estate loan and lease portfolio. We obtained a significant portion of these non-strategic assets through acquisitions of other companies.

BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. BlackRock provides diversified investment management services to institutional clients, intermediary investors and individual investors through various investment vehicles. Investment management services primarily consist of the management of equity, fixed income, multi-asset class, alternative investment and cash management products. BlackRock offers its investment products in a variety of vehicles, including open-end and closed-end mutual funds, iShares^® exchange-traded funds (ETFs), collective investment trusts and separate accounts. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients. Financial markets advisory services include valuation services relating to illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution. We hold an equity investment in BlackRock, which is a key component of our diversified revenue strategy. BlackRock is a publicly traded company, and additional information regarding its business is available in its filings with the Securities and Exchange Commission (SEC). At September 30, 2014, our economic interest in BlackRock was 22%.

Table 28: Period End Employees


	September 30	June 30	March 31	December 31	September 30
	2014	2014	2014	2013	2013

Full-time employees
Retail Banking	22,103	22,148	22,104	22,226	22,192
Other full-time employees (a)	27,528	27,765	27,740	27,695	27,973

Total full-time employees	49,631	49,913	49,844	49,921	50,165

Part-time employees
Retail Banking	3,410	3,644	3,761	4,030	4,194
Other part-time employees (a)	614	802	510	482	575

Total part-time employees	4,024	4,446	4,271	4,512	4,769

Total	53,655	54,359	54,115	54,433	54,934

(a)	Includes period end employees for all businesses other than Retail Banking and includes operations, technology and staff services employees other than staff directly employed by Retail Banking.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Table 29: Summary of Business Segment Income and Revenue (Unaudited) (a) (b)


	Three months ended											Nine months ended
In millions	September 30 2014		June 30 2014		March 31 2014			December 31 2013		September 30 2013		September 30 2014		September 30 2013
Income (Loss)
Retail Banking (c)	$	173	$	225	$	158		$	107	$	165	$	556	$	443
Corporate & Institutional Banking		549		470		523			569		542		1,542		1,695
Asset Management Group		46		53		37			36		47		136		126
Residential Mortgage Banking (d)		12		36		(4	)		55		28		44		93
Non-Strategic Assets Portfolio		82		99		110			118		121		291		260
Other, including BlackRock (b) (e)		176		169		236			189		125		581		521

Net income	$	1,038	$	1,052	$	1,060		$	1,074	$	1,028	$	3,150	$	3,138

Revenue
Retail Banking (c)	$	1,521	$	1,514	$	1,494		$	1,500	$	1,563	$	4,529	$	4,600
Corporate & Institutional Banking		1,386		1,348		1,298			1,389		1,356		4,032		4,117
Asset Management Group		277		279		270			269		262		826		771
Residential Mortgage Banking (d)		185		227		206			327		254		618		773
Non-Strategic Assets Portfolio		152		147		148			167		181		447		575
Other, including BlackRock (b) (e)		320		295		361			421		304		976		1,103

Total revenue	$	3,841	$	3,810	$	3,777		$	4,073	$	3,920	$	11,428	$	11,939

(a)	Our business information is presented based on our internal management reporting practices. We periodically refine our internal methodologies as management reporting practices are enhanced.

(b)	We consider BlackRock to be a separate reportable business segment but have combined its results with Other for this presentation. Our third quarter 2014 Form 10-Q will include additional information regarding BlackRock.

(c)	Includes gains on sales of portions of Visa Class B common shares in the first three quarters of 2014 and the second and third quarters of 2013. For more information, refer to Selected Noninterest Income Information on page 3.

(d)	Includes benefit/provision for residential mortgage repurchase obligations. For more information, refer to Selected Noninterest Income Information on page 3.

(e)

Includes earnings and gains or losses related to PNC’s equity interest in BlackRock and residual activities that do not meet the criteria for disclosure as a separate reportable business, such as gains or losses related to BlackRock transactions, integration costs, asset and liability management activities including net securities gains or losses, other-than-temporary impairment of investment securities and certain trading activities, exited businesses, private equity investments, intercompany eliminations, most corporate overhead, tax adjustments that are not allocated to business segments and differences between business segment performance reporting and financial statement reporting (GAAP), including the presentation of net income attributable to noncontrolling interests as the segments’ results exclude their portion of net income attributable to noncontrolling interests.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Table 30: Retail Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
INCOME STATEMENT
Net interest income	$	985		$	973		$	980		$	1,012		$	1,006		$	2,938		$	3,067
Noninterest income
Service charges on deposits		173			148			140			151			149			461			419
Brokerage		60			61			55			57			57			176			167
Consumer services		248			248			218			256			234			714			679
Other		55			84			101			24			117			240			268

Total noninterest income		536			541			514			488			557			1,591			1,533

Total revenue		1,521			1,514			1,494			1,500			1,563			4,529			4,600
Provision for credit losses		74			4			145			195			152			223			462
Noninterest expense		1,175			1,155			1,100			1,138			1,151			3,430			3,438

Pretax earnings		272			355			249			167			260			876			700
Income taxes		99			130			91			60			95			320			257

Earnings	$	173		$	225		$	158		$	107		$	165		$	556		$	443

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	28,684		$	28,959		$	29,317		$	29,588		$	29,477		$	28,985		$	29,203
Indirect auto		9,192			9,092			8,994			8,671			7,971			9,093			7,434
Indirect other		675			726			777			822			877			726			938
Education		7,100			7,298			7,547			7,680			7,818			7,314			8,005
Credit cards		4,401			4,307			4,271			4,250			4,148			4,327			4,106
Other		2,277			2,189			2,137			2,157			2,152			2,200			2,145

Total consumer		52,329			52,571			53,043			53,168			52,443			52,645			51,831
Commercial and commercial real estate		10,801			10,922			11,051			11,131			11,299			10,924			11,311
Floor plan		2,021			2,291			2,373			2,226			1,931			2,227			1,997
Residential mortgage		584			623			647			676			715			618			764

Total loans		65,735			66,407			67,114			67,201			66,388			66,414			65,903
Goodwill and other intangible assets		6,025			6,043			6,062			6,083			6,105			6,043			6,127
Other assets		2,922			2,753			2,744			2,730			2,722			2,807			2,590

Total assets	$	74,682		$	75,203		$	75,920		$	76,014		$	75,215		$	75,264		$	74,620

Deposits
Noninterest-bearing demand	$	22,392		$	21,907		$	21,359		$	21,699		$	21,349		$	21,890		$	21,096
Interest-bearing demand		33,900			34,272			33,490			32,298			31,748			33,889			31,647
Money market		50,204			50,142			49,484			49,250			48,939			49,945			48,628

Total transaction deposits		106,496			106,321			104,333			103,247			102,036			105,724			101,371
Savings		11,997			11,845			11,288			10,901			10,900			11,713			10,812
Certificates of deposit		18,720			19,354			19,882			20,425			21,050			19,314			21,846

Total deposits		137,213			137,520			135,503			134,573			133,986			136,751			134,029
Other liabilities		507			411			398			369			364			440			327

Total liabilities	$	137,720		$	137,931		$	135,901		$	134,942		$	134,350		$	137,191		$	134,356

PERFORMANCE RATIOS
Return on average assets		.92	%		1.20	%		.84	%		.56	%		.87	%		.99	%		.79	%
Noninterest income to total revenue		35			36			34			33			36			35			33
Efficiency		77			76			74			76			74			76			75

(a)	See note (a) on page 16.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Table 30: Retail Banking (Unaudited) (Continued)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
OTHER INFORMATION (a)								.
Credit-related statistics:
Commercial nonperforming assets	$	146		$	158		$	172		$	208		$	212
Consumer nonperforming assets		1,037			1,037			1,059			1,077			1,074

Total nonperforming assets	$	1,183		$	1,195		$	1,231		$	1,285		$	1,286

Purchased impaired loans (b)	$	600		$	631		$	663		$	692		$	718

Commercial lending net charge-offs	$	2		$	11		$	20		$	13		$	17		$	33		$	76
Credit card lending net charge-offs		35			37			37			37			35			109			119
Consumer lending (excluding credit card) net charge-offs		56			68			88			118			91			212			350

Total net charge-offs	$	93		$	116		$	145		$	168		$	143		$	354		$	545

Commercial lending annualized net charge-off ratio		.06	%		.33	%		.60	%		.39	%		.51	%		.34	%		.76	%
Credit card lending annualized net charge-off ratio		3.16	%		3.45	%		3.51	%		3.45	%		3.35	%		3.37	%		3.87	%
Consumer lending (excluding credit card) annualized net charge-off ratio (c)		.46	%		.56	%		.72	%		.94	%		.74	%		.58	%		.97	%

Total annualized net charge-off ratio (c)		.56	%		.70	%		.88	%		.99	%		.85	%		.71	%		1.11	%

Home equity portfolio credit statistics: (d)
% of first lien positions at origination (e)		53	%		53	%		53	%		52	%		52	%
Weighted-average loan-to-value ratios (LTVs) (e) (f)		78	%		79	%		79	%		81	%		83	%
Weighted-average updated FICO scores (g)		747			748			745			745			745
Annualized net charge-off ratio (c)		.35	%		.54	%		.75	%		1.06	%		.75	%		.55	%		1.17	%
Delinquency data - % of total loans: (h)
Loans 30 - 59 days past due		.19	%		.19	%		.21	%		.20	%		.22	%
Loans 60 - 89 days past due		.07	%		.07	%		.08	%		.09	%		.09	%

Accruing loans past due		.26	%		.26	%		.29	%		.29	%		.32	%

Nonperforming loans		3.04	%		3.08	%		3.12	%		3.15	%		3.13	%

Other statistics:
ATMs		8,178			7,977			8,001			7,445			7,441
Branches (i)		2,691			2,695			2,703			2,714			2,724
Brokerage account client assets (billions)	$	43		$	43		$	41		$	41		$	40

Customer-related statistics (average):
Non-teller deposit transactions (j)		36	%		33	%		31	%		30	%		27	%
Digital consumer customers (k)		47	%		45	%		43	%		40	%		38	%

(a)	Presented as of period end, except for net charge-offs and annualized net charge-off ratios, which are for the three and nine months ended, respectively.

(b)	Recorded investment of purchased impaired loans related to acquisitions.

(c)	Ratios for the first nine months of 2013 include additional consumer charge-offs taken as a result of alignment with interagency guidance on practices for loans and lines of credit we implemented in the first quarter of 2013.

(d)	Lien position, LTV and FICO statistics are based upon customer balances.

(e)	Lien positions and LTV calculations reflect the use of revised assumptions where data is missing.

(f)	LTV statistics are based upon current information.

(g)	Represents FICO scores that are updated at least quarterly.

(h)	Data based upon recorded investment. Past due amounts exclude purchased impaired loans, even if contractually past due, as we are currently accreting interest income over the expected life of the loans.

(i)	Excludes satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.

(j)	Percentage of total deposit transactions processed at an ATM or through our mobile banking application.

(k)	Represents consumer checking relationships that process the majority of their transactions through non-teller channels.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Table 31: Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
INCOME STATEMENT
Net interest income	$	922		$	921		$	934		$	960		$	945		$	2,777		$	2,844
Noninterest income
Corporate service fees		346			312			268			277			277			926			820
Other		118			115			96			152			134			329			453

Noninterest income		464			427			364			429			411			1,255			1,273

Total revenue		1,386			1,348			1,298			1,389			1,356			4,032			4,117
Provision for credit losses (benefit)		(4	)		103			(13	)		(29	)		30			86			4
Noninterest expense		528			504			488			525			495			1,520			1,474

Pretax earnings		862			741			823			893			831			2,426			2,639
Income taxes		313			271			300			324			289			884			944

Earnings	$	549		$	470		$	523		$	569		$	542		$	1,542		$	1,695

AVERAGE BALANCE SHEET
Loans
Commercial	$	79,083		$	78,022		$	75,506		$	74,199		$	72,753		$	77,550		$	71,601
Commercial real estate		21,492			21,234			20,039			18,938			17,830			20,927			17,240
Equipment lease financing		6,922			6,878			6,789			6,749			6,610			6,863			6,606

Total commercial lending		107,497			106,134			102,334			99,886			97,193			105,340			95,447
Consumer		1,203			1,016			1,125			1,032			801			1,116			919

Total loans		108,700			107,150			103,459			100,918			97,994			106,456			96,366
Goodwill and other intangible assets		3,806			3,804			3,826			3,841			3,848			3,812			3,792
Loans held for sale		1,092			932			894			893			975			973			1,058
Other assets		10,073			10,139			9,758			9,746			9,750			9,991			10,936

Total assets	$	123,671		$	122,025		$	117,937		$	115,398		$	112,567		$	121,232		$	112,152

Deposits
Noninterest-bearing demand	$	44,730		$	42,521		$	42,772		$	43,482		$	42,053		$	43,348		$	40,850
Money market		21,821			20,277			20,678			20,579			18,099			20,930			17,355
Other		7,839			7,565			7,531			7,609			6,992			7,646			6,962

Total deposits		74,390			70,363			70,981			71,670			67,144			71,924			65,167
Other liabilities		7,412			7,476			7,476			8,207			13,932			7,454			16,572

Total liabilities	$	81,802		$	77,839		$	78,457		$	79,877		$	81,076		$	79,378		$	81,739

PERFORMANCE RATIOS
Return on average assets		1.76	%		1.54	%		1.80	%		1.96	%		1.91	%		1.70	%		2.02	%
Noninterest income to total revenue		33			32			28			31			30			31			31
Efficiency		38			37			38			38			37			38			36

(a)	See note (a) on page 16.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Table 31: Corporate & Institutional Banking (Unaudited) (Continued) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
COMMERCIAL MORTGAGE SERVICING PORTFOLIO - SERVICED FOR THIRD PARTIES (in billions)
Beginning of period	$	316		$	313		$	308		$	298		$	294		$	308		$	282
Acquisitions/additions		21			18			23			26			18			62			57
Repayments/transfers		(15	)		(15	)		(18	)		(16	)		(14	)		(48	)		(41	)

End of period	$	322		$	316		$	313		$	308		$	298		$	322		$	298

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	326		$	313		$	311		$	309		$	309		$	950		$	951
Capital Markets (d)	$	212		$	178		$	157		$	220		$	175		$	547		$	502
Commercial mortgage loans held for sale (e)	$	32		$	33		$	19		$	37		$	27		$	84		$	96
Commercial mortgage loan servicing income (f)		56			53			55			60			60			164			166
Commercial mortgage servicing rights valuation, net of economic hedge (g)		8			14			11			(5	)		18			33			73

Total commercial mortgage banking activities	$	96		$	100		$	85		$	92		$	105		$	281		$	335
Average Loans (by C&IB business)
Corporate Banking	$	54,678		$	53,633		$	52,253		$	51,689		$	50,844		$	53,530		$	50,260
Real Estate		28,111			27,642			26,003			24,333			22,622			27,260			21,597
Business Credit		13,481			13,198			12,534			12,182			11,726			13,074			11,508
Equipment Finance		10,582			10,290			10,210			10,095			10,035			10,362			9,961
Other		1,848			2,387			2,459			2,619			2,767			2,230			3,040

Total average loans	$	108,700		$	107,150		$	103,459		$	100,918		$	97,994		$	106,456		$	96,366
Total loans (h)	$	109,792		$	108,990		$	105,398		$	101,773		$	99,337		$	109,792		$	99,337
Net carrying amount of commercial mortgage servicing rights (h)	$	532		$	515		$	529		$	549		$	541
Credit-related statistics:
Nonperforming assets (h)	$	616		$	715		$	786		$	804		$	949
Purchased impaired loans (h) (i)	$	316		$	370		$	428		$	515		$	600
Net charge-offs (recoveries)	$	(7	)	$	15		$	2		$	10		$	56		$	10		$	95

(a)	See note (a) on page 16.

(b)	Represents consolidated PNC amounts. Our third quarter 2014 Form 10-Q will include additional information regarding these items.

(c)	Includes amounts reported in net interest income and corporate service fees.

(d)	Includes amounts reported in net interest income, corporate service fees and other noninterest income.

(e)	Includes other noninterest income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, origination fees, and gains on sale of loans held for sale and net interest income on loans held for sale.

(f)

Includes net interest income and noninterest income, primarily in corporate services fees, from loan servicing and ancillary services, net of changes in fair value on commercial mortgage servicing rights due to time and payoffs for the first three quarters of 2014 and net of commercial mortgage servicing rights amortization for 2013 periods. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.

(g)	Includes amounts reported in corporate service fees.

(h)	Presented as of period end.

(i)	Recorded investment of purchased impaired loans related to acquisitions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

Table 32: Asset Management Group (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
INCOME STATEMENT
Net interest income	$	72		$	72		$	71		$	71		$	74		$	215		$	217
Noninterest income		205			207			199			198			188			611			554

Total revenue		277			279			270			269			262			826			771
Provision for credit losses (benefit)		(4	)		(6	)		12			8			(4	)		2			2
Noninterest expense		209			202			199			204			192			610			570

Pretax earnings		72			83			59			57			74			214			199
Income taxes		26			30			22			21			27			78			73

Earnings	$	46		$	53		$	37		$	36		$	47		$	136		$	126

AVERAGE BALANCE SHEET
Loans
Consumer	$	5,497		$	5,411		$	5,311		$	5,248		$	5,107		$	5,407		$	4,950
Commercial and commercial real estate		970			998			1,023			1,057			1,049			997			1,043
Residential mortgage		822			789			771			778			784			794			776

Total loans		7,289			7,198			7,105			7,083			6,940			7,198			6,769
Goodwill and other intangible assets		255			264			272			281			289			264			297
Other assets		231			223			222			230			216			225			223

Total assets	$	7,775		$	7,685		$	7,599		$	7,594		$	7,445		$	7,687		$	7,289

Deposits
Noninterest-bearing demand	$	1,362		$	1,327		$	1,338		$	1,442		$	1,220		$	1,342		$	1,266
Interest-bearing demand		3,857			3,912			3,893			3,547			3,329			3,887			3,472
Money market		4,005			3,857			3,889			3,760			3,693			3,918			3,752

Total transaction deposits		9,224			9,096			9,120			8,749			8,242			9,147			8,490
CDs/IRAs/savings deposits		463			446			436			427			431			448			442

Total deposits		9,687			9,542			9,556			9,176			8,673			9,595			8,932
Other liabilities		51			48			53			61			62			51			60

Total liabilities	$	9,738		$	9,590		$	9,609		$	9,237		$	8,735		$	9,646		$	8,992

PERFORMANCE RATIOS
Return on average assets		2.35	%		2.77	%		1.97	%		1.88	%		2.50	%		2.37	%		2.31	%
Noninterest income to total revenue		74			74			74			74			72			74			72
Efficiency		75			72			74			76			73			74			74

OTHER INFORMATION
Total nonperforming assets (b)	$	73		$	76		$	80		$	75		$	68
Purchased impaired loans (b) (c)	$	89		$	94		$	96		$	99		$	100
Total net charge-offs (recoveries)	$	—		$	2		$	1		$	3		$	(7	)	$	3		$	(2	)
CLIENT ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	113		$	113		$	112		$	111		$	106
Institutional		146			144			143			136			131

Total	$	259		$	257		$	255		$	247		$	237

Asset Type
Equity	$	147		$	149		$	145		$	142		$	132
Fixed income		72			71			66			70			70
Liquidity/Other		40			37			44			35			35

Total	$	259		$	257		$	255		$	247		$	237

Discretionary client assets under management
Personal	$	85		$	85		$	84		$	83		$	80
Institutional		47			46			46			44			42

Total	$	132		$	131		$	130		$	127		$	122

Asset Type
Equity	$	72		$	73		$	71		$	70		$	65
Fixed income		40			40			34			39			40
Liquidity/Other		20			18			25			18			17

Total	$	132		$	131		$	130		$	127		$	122

Nondiscretionary client assets under administration
Personal	$	28		$	28		$	28		$	28		$	26
Institutional		99			98			97			92			89

Total	$	127		$	126		$	125		$	120		$	115

Asset Type
Equity	$	75		$	76		$	74		$	72		$	67
Fixed income		32			31			32			31			30
Liquidity/Other		20			19			19			17			18

Total	$	127		$	126		$	125		$	120		$	115

(a)	See note (a) on page 16.

(b)	As of period end.

(c)	Recorded investment of purchased impaired loans related to acquisitions.

(d)	Excludes brokerage account client assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 22

Table 33: Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
INCOME STATEMENT
Net interest income	$	38		$	37		$	40		$	49		$	46		$	115		$	145
Noninterest income
Loan servicing revenue
Servicing fees		53			56			61			56			40			170			118
Mortgage servicing rights valuation, net of economic hedge		11			1			(1	)		1			57			11			120
Loan sales revenue
Benefit / (provision) for residential mortgage repurchase obligations		(13	)		(2	)		19			124			6			4			(71	)
Loan sales revenue		98			137			88			98			108			323			470
Other		(2	)		(2	)		(1	)		(1	)		(3	)		(5	)		(9	)

Total noninterest income		147			190			166			278			208			503			628

Total revenue		185			227			206			327			254			618			773
Provision for credit losses (benefit)		(1	)		1			(1	)		(3	)					(1	)		24
Noninterest expense		168			169			213			243			210			550			602

Pretax earnings (loss)		18			57			(6	)		87			44			69			147
Income taxes (benefit)		6			21			(2	)		32			16			25			54

Earnings (loss)	$	12		$	36		$	(4	)	$	55		$	28		$	44		$	93

AVERAGE BALANCE SHEET
Portfolio loans	$	1,506		$	1,742		$	2,036		$	2,219		$	2,334		$	1,759		$	2,429
Loans held for sale		1,186			1,135			1,068			1,340			2,104			1,130			2,083
Mortgage servicing rights (MSR)		1,002			1,035			1,073			1,066			1,068			1,036			895
Other assets		3,724			3,574			4,600			4,458			3,811			3,964			4,763

Total assets	$	7,418		$	7,486		$	8,777		$	9,083		$	9,317		$	7,889		$	10,170

Deposits	$	2,415		$	2,318		$	2,100		$	2,388		$	2,936		$	2,279		$	3,100
Borrowings and other liabilities		2,601			2,403			3,464			3,553			2,316			2,819			3,002

Total liabilities	$	5,016		$	4,721		$	5,564		$	5,941		$	5,252		$	5,098		$	6,102

PERFORMANCE RATIOS
Return on average assets		.64	%		1.93	%		(.18	)%		2.40	%		1.19	%		.75	%		1.22	%
Noninterest income to total revenue		79			84			81			85			82			81			81
Efficiency		91			74			103			74			83			89			78

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO SERVICED FOR THIRD PARTIES (in billions)
Beginning of period	$	111		$	114		$	114		$	115		$	116		$	114		$	119
Acquisitions		2						2			2			2			4			8
Additions		3			2			2			3			4			7			12
Repayments/transfers		(5	)		(5	)		(4	)		(6	)		(7	)		(14	)		(24	)

End of period	$	111		$	111		$	114		$	114		$	115		$	111		$	115

Servicing portfolio - third-party statistics: (b)
Fixed rate		94	%		94	%		94	%		93	%		92	%
Adjustable rate/balloon		6	%		6	%		6	%		7	%		8	%
Weighted-average interest rate		4.49	%		4.54	%		4.56	%		4.59	%		4.63	%
MSR capitalized value (in billions)	$	1.0		$	1.0		$	1.1		$	1.1		$	1.1
MSR capitalization value (in basis points)		88			87			92			95			90
Weighted-average servicing fee (in basis points)		27			27			28			28			28

RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	101		$	103		$	131		$	471		$	523		$	131		$	614
(Benefit) / Provision		13			2			(19	)		(124	)		(6	)		(4	)		71
Agency settlements											(191	)
Losses - loan repurchases		(6	)		(4	)		(9	)		(25	)		(46	)		(19	)		(214	)

End of period	$	108		$	101		$	103		$	131		$	471		$	108		$	471

OTHER INFORMATION
Loan origination volume (in billions)	$	2.6		$	2.6		$	1.9		$	2.5		$	3.7		$	7.1		$	12.6
Loan sale margin percentage		3.80	%		5.38	%		4.53	%		3.96	%		2.92	%		4.57	%		3.72	%
Percentage of originations represented by:
Purchase volume (c)		50	%		50	%		37	%		41	%		38	%		47	%		28	%
Refinance volume		50	%		50	%		63	%		59	%		62	%		53	%		72	%
Total nonperforming assets (b)	$	135		$	160		$	173		$	189		$	205

(a)	See note (a) on page 16.

(b)	As of period end.

(c)	Mortgages with borrowers as part of residential real estate purchase transactions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 23

Table 34: Non-Strategic Assets Portfolio (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2014			June 30 2014			March 31 2014			December 31 2013			September 30 2013			September 30 2014			September 30 2013
INCOME STATEMENT
Net interest income	$	146		$	137		$	142		$	161		$	161		$	425		$	528
Noninterest income		6			10			6			6			20			22			47

Total revenue		152			147			148			167			181			447			575
Provision for credit losses (benefit)		(8	)		(39	)		(52	)		(59	)		(43	)		(99	)		38
Noninterest expense		30			30			26			39			33			86			126

Pretax earnings		130			156			174			187			191			460			411
Income taxes		48			57			64			69			70			169			151

Earnings	$	82		$	99		$	110		$	118		$	121		$	291		$	260

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	164		$	187		$	220		$	246		$	319		$	190		$	430
Lease financing		689			686			681			678			686			686			689

Total commercial lending		853			873			901			924			1,005			876			1,119

Consumer Lending:
Home equity		3,328			3,483			3,625			3,764			3,935			3,477			4,071
Residential real estate		4,794			4,961			5,104			5,312			5,496			4,952			5,713

Total consumer lending		8,122			8,444			8,729			9,076			9,431			8,429			9,784

Total portfolio loans		8,975			9,317			9,630			10,000			10,436			9,305			10,903
Other assets (b)		(744	)		(740	)		(741	)		(757	)		(735	)		(742	)		(665	)

Total assets	$	8,231		$	8,577		$	8,889		$	9,243		$	9,701		$	8,563		$	10,238

Deposits and other liabilities	$	223		$	227		$	231		$	236		$	261		$	227		$	235

Total liabilities	$	223		$	227		$	231		$	236		$	261		$	227		$	235

PERFORMANCE RATIOS
Return on average assets		3.95	%		4.63	%		5.02	%		5.06	%		4.95	%		4.54	%		3.40	%
Noninterest income to total revenue		4			7			4			4			11			5			8
Efficiency		20			20			18			23			18			19			22

OTHER INFORMATION
Nonperforming assets (c)	$	731		$	798		$	798		$	834		$	863
Purchased impaired loans (c) (d)	$	4,147		$	4,497		$	4,654		$	4,797		$	4,966
Net charge-offs	$	(6	)	$	10		$	31		$	9		$	23		$	35		$	163
Annualized net charge-off ratio		(.27	)%		.43	%		1.31	%		.36	%		.87	%		.50	%		2.00	%
LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	162		$	176		$	201		$	236		$	270
Lease financing		691			688			683			680			675

Total commercial lending		853			864			884			916			945

Consumer Lending:
Home equity		3,242			3,410			3,554			3,692			3,844
Residential real estate		4,665			4,928			5,092			5,267			5,434

Total consumer lending		7,907			8,338			8,646			8,959			9,278

Total loans	$	8,760		$	9,202		$	9,530		$	9,875		$	10,223

(a)	See note (a) on page 16.

(b)	Other assets were negative in all periods presented due to the allowance for loan and lease losses.

(c)	As of period end.

(d)	Recorded investment of purchased impaired loans related to acquisitions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 24

Glossary Of Terms

Accretable net interest (Accretable yield) - The excess of cash flows expected to be collected on a purchased impaired loan over the carrying value of the loan. The accretable net interest is recognized into interest income over the remaining life of the loan using the constant effective yield method.

Adjusted average total assets - Primarily comprised 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).

Annualized - Adjusted to reflect a full year of activity.

Basel III common equity Tier 1 capital - Common stock plus related surplus, net of treasury stock, plus retained earnings, plus accumulated other comprehensive income for securities currently and previously held as available for sale, plus accumulated other comprehensive income for pension and other post postretirement benefit plans, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments.

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

Basis point - One hundredth of a percentage point.

Carrying value of purchased impaired loans - The net value on the balance sheet which represents the recorded investment less any valuation allowance.

Cash recoveries - Cash recoveries used in the context of purchased impaired loans represent cash payments from customers that exceeded the recorded investment of the designated impaired loan.

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.

Combined loan-to-value ratio (CLTV) - This is the aggregate principal balance(s) of the mortgages on a property divided by its appraised value or purchase price.

Common shareholders’ equity to total assets - Common shareholders’ equity divided by total assets. Common shareholders’ equity equals total shareholders’ equity less the liquidation value of preferred stock.

Core net interest income - Core net interest income is total net interest income less purchase accounting accretion.

Credit spread - The difference in yield between debt issues of similar maturity. The excess of yield attributable to credit spread is often used as a measure of relative creditworthiness, with a reduction in the credit spread reflecting an improvement in the borrower’s perceived creditworthiness.

Derivatives - Financial contracts whose value is derived from changes in publicly traded securities, interest rates, currency exchange rates or market indices. Derivatives cover a wide assortment of financial contracts, including but not limited to forward contracts, futures, options and swaps.

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.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 25

Duration of equity - An estimate of the rate sensitivity of our economic value of equity. A negative duration of equity is associated with asset sensitivity (i.e., positioned for rising interest rates), while a positive value implies liability sensitivity (i.e., positioned for declining interest rates). For example, if the duration of equity is -1.5 years, the economic value of equity increases by 1.5% for each 100 basis point increase in interest rates.

Earning assets - Assets that generate income, which include: federal funds sold; resale agreements; trading securities; 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.

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.

Funds transfer pricing - A management accounting methodology designed to recognize the net interest income effects of sources and uses of funds provided by the assets and liabilities of a business segment. We assign these balances LIBOR-based funding rates at origination that represent the interest cost for us to raise/invest funds with similar maturity and repricing structures.

Futures and forward contracts - Contracts in which the buyer agrees to purchase and the seller agrees to deliver a specific financial instrument at a predetermined price or yield. May be settled either in cash or by delivery of the underlying financial instrument.

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

Impaired loans - Loans are determined to be impaired when, based on current information and events, it is probable that all contractually required payments will not be collected. Impaired loans include commercial nonperforming loans and consumer and commercial TDRs, regardless of nonperforming status. Excluded from impaired loans are nonperforming leases, loans held for sale, loans accounted for under the fair value option, smaller balance homogenous type loans and purchased impaired loans.

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

LIBOR - Acronym for London InterBank Offered Rate. LIBOR is the average interest rate charged when banks in the London wholesale money market (or interbank market) borrow unsecured funds from each other. LIBOR rates are used as a benchmark for interest rates on a global basis. PNC’s product set includes loans priced using LIBOR as a benchmark.

Loan-to-value ratio (LTV) - A calculation of a loan’s collateral coverage that is used both in underwriting and assessing credit risk in our lending portfolio. LTV is the sum total of loan obligations secured by collateral divided by the market value of that same collateral. Market values of the collateral are based on an independent valuation of the collateral. For example, a LTV of less than 90% is better secured and has less credit risk than a LTV of greater than or equal to 90%.

Loss given default (LGD) - An estimate of loss, net of recovery based on collateral type, collateral value, loan exposure, or the guarantor(s) quality and guaranty type (full or partial). Each loan has its own LGD. The LGD risk rating measures the percentage of exposure of a specific credit obligation that we expect to lose if default occurs. LGD is net of recovery, through any means, including but not limited to the liquidation of collateral or deficiency judgments rendered from foreclosure or bankruptcy proceedings.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 26

Net interest margin - Annualized taxable-equivalent net interest income divided by average earning assets.

Nonaccretable difference - Contractually required payments receivable on a purchased impaired loan in excess of the cash flows expected to be collected.

Nonaccrual loans - Loans for which we do not accrue interest income. Nonaccrual loans include nonperforming loans, in addition to loans accounted for under fair value option and loans accounted for as held for sale for which full collection of contractual principal and/or interest is not probable.

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 and OREO and foreclosed assets, but exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans accounted for at amortized cost for which we do not accrue interest income. Nonperforming loans include loans to commercial, commercial real estate, equipment lease financing, home equity, residential real estate, credit card and other consumer customers as well as TDRs which have not returned to performing status. Nonperforming loans exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. Nonperforming loans exclude purchased impaired loans as we are currently accreting interest income over the expected life of the loans.

Notional amount - A number of currency units, shares, or other units specified in a derivative contract.

Operating leverage - The period to period dollar or percentage change in total revenue (GAAP basis) 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).

Options - Contracts that grant the purchaser, for a premium payment, the right, but not the obligation, to either purchase or sell the associated financial instrument at a set price during a specified period or at a specified date in the future.

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, equity interests in corporations, partnerships, and limited liability companies.

Other-than-temporary impairment (OTTI) - When the fair value of a security is less than its amortized cost basis, an assessment is performed to determine whether the impairment is other-than-temporary. If we intend to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, an other-than-temporary impairment is considered to have occurred. In such cases, an other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. Further, if we do not expect to recover the entire amortized cost of the security, an other-than-temporary impairment is considered to have occurred. However for debt securities, if we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before its recovery, the other-than-temporary loss is separated into (a) the amount representing the credit loss, and (b) the amount related to all other factors. The other-than-temporary impairment related to credit losses is recognized in earnings while the amount related to all other factors is recognized in other comprehensive income, net of tax.

Parent company liquidity coverage - Liquid assets divided by funding obligations within a two year period.

Pretax earnings - Income before income taxes and noncontrolling interests.

Pretax, pre-provision earnings - Total revenue less noninterest expense.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 27

Primary client relationship - A corporate banking client relationship with annual revenue generation of $10,000 to $50,000 or more, and for Asset Management Group, a client relationship with annual revenue generation of $10,000 or more.

Probability of default (PD) - An internal risk rating that indicates the likelihood that a credit obligor will enter into default status.

Purchase accounting accretion - Accretion of the discounts and premiums on acquired assets and liabilities. The purchase accounting accretion is recognized in net interest income over the weighted-average life of the financial instruments using the constant effective yield method. Accretion for purchased impaired loans includes any cash recoveries received in excess of the recorded investment.

Purchased impaired loans - Acquired loans determined to be credit impaired under FASB ASC 310-30 (AICPA SOP 03-3). Loans are determined to be impaired if there is evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected.

Recorded investment (purchased impaired loans) - The initial investment of a purchased impaired loan plus interest accretion and less any cash payments and writedowns to date. The recorded investment excludes any valuation allowance which is included in our allowance for loan and lease losses.

Recovery - Cash proceeds received on a loan that we had previously charged off. We credit the amount received to the allowance for loan and lease losses.

Residential development loans - Project-specific loans to commercial customers for the construction or development of residential real estate including land, single family homes, condominiums and other residential properties.

Residential mortgage servicing rights valuation, net of economic hedge - We have elected to measure acquired or originated residential mortgage servicing rights (MSRs) at fair value under GAAP. We employ a risk management strategy designed to protect the economic value of MSRs from changes in interest rates. This strategy utilizes securities and a portfolio of derivative instruments to hedge changes in the fair value of MSRs arising from changes in interest rates. These financial instruments are expected to have changes in fair value which are negatively correlated to the change in fair value of the MSR portfolio. Net MSR hedge gains/(losses) represent the change in the fair value of MSRs, exclusive of changes due to time decay and payoffs, combined with the change in the fair value of the associated securities and derivative instruments.

Return on average assets - Annualized net income divided by average assets.

Return on average capital - Annualized net income divided by average capital.

Return on average common shareholders’ equity - Annualized net income attributable to common shareholders divided by average common shareholders’ equity.

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.

Securitization - The process of legally transforming financial assets into securities.

Servicing rights - An intangible asset or liability 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.

Taxable-equivalent interest - The interest income earned on certain assets is completely or partially exempt from Federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on other taxable investments. This adjustment is not permitted under GAAP on the Consolidated Income Statement.

Total equity - Total shareholders’ equity plus noncontrolling interests.

Transaction deposits - The sum of interest-bearing money market deposits, interest-bearing demand deposits, and noninterest-bearing deposits.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 28

Transitional Basel III common equity - Common equity calculated under Basel III using phased in definitions and deductions applicable to PNC for 2014.

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

Watchlist - A list of criticized loans, credit exposure or other assets compiled for internal monitoring purposes. We define criticized exposure for this purpose as exposure with an internal risk rating of other assets especially mentioned, substandard, doubtful or loss.

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.

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