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.	d837706d8k.htm
EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d837706dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER AND FULL YEAR 2014

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER AND FULL YEAR 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 January 16, 2015. 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, Virginia, Alabama, Missouri, Georgia, Wisconsin and South Carolina. PNC also provides certain products and services internationally.

The PNC Financial Services Group, Inc.

Cross-Reference Index to Fourth Quarter and Full Year 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 December 31, 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															Year ended
In millions, except per share data	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Interest Income
Loans	$	1,835		$	1,848		$	1,845		$	1,899		$	1,949		$	7,427		$	7,866
Investment securities		398			387			412			427			434			1,624			1,749
Other		104			93			99			84			96			380			392

Total interest income		2,337			2,328			2,356			2,410			2,479			9,431			10,007

Interest Expense
Deposits		86			81			80			78			81			325			344
Borrowed funds		154			143			147			137			132			581			516

Total interest expense		240			224			227			215			213			906			860

Net interest income		2,097			2,104			2,129			2,195			2,266			8,525			9,147

Noninterest Income
Asset management		376			411			362			364			364			1,513			1,342
Consumer services		321			320			323			290			327			1,254			1,253
Corporate services (a)		397			374			343			301			301			1,415			1,210
Residential mortgage (b)		135			140			182			161			271			618			871
Service charges on deposits		180			179			156			147			158			662			597
Net gains (losses) on sales of securities (c)		—			—			(6	)		10			3			4			99
Net other-than-temporary impairments (d)		(7	)		(1	)		(1	)		(2	)		—			(11	)		(16	)
Other (e)		448			314			322			311			383			1,395			1,509

Total noninterest income		1,850			1,737			1,681			1,582			1,807			6,850			6,865

Total revenue		3,947			3,841			3,810			3,777			4,073			15,375			16,012
Provision For Credit Losses		52			55			72			94			113			273			643
Noninterest Expense
Personnel		1,170			1,189			1,172			1,080			1,207			4,611			4,743
Occupancy		216			200			199			218			211			833			833
Equipment		234			220			204			201			197			859			763
Marketing		67			66			68			52			66			253			246
Other (f)		852			682			685			713			833			2,932			3,096

Total noninterest expense		2,539			2,357			2,328			2,264			2,514			9,488			9,681

Income before income taxes and noncontrolling interests		1,356			1,429			1,410			1,419			1,446			5,614			5,688
Income taxes (f)		299			391			358			359			372			1,407			1,476

Net income		1,057			1,038			1,052			1,060			1,074			4,207			4,212

Less: Net income (loss) attributable to noncontrolling interests (f)		21			1			3			(2	)		13			23			11
Preferred stock dividends and discount accretion and redemptions		48			71			48			70			50			237			249

Net income attributable to common shareholders	$	988		$	966		$	1,001		$	992		$	1,011		$	3,947		$	3,952

Earnings Per Common Share
Basic	$	1.88		$	1.82		$	1.88		$	1.86		$	1.90		$	7.44		$	7.45
Diluted	$	1.84		$	1.79		$	1.85		$	1.82		$	1.87		$	7.30		$	7.36

Average Common Shares Outstanding
Basic		524			529			532			532			530			529			528
Diluted		532			537			539			539			535			537			532

Efficiency		64	%		61	%		61	%		60	%		62	%		62	%		60	%
Noninterest income to total revenue		47	%		45	%		44	%		42	%		44	%		45	%		43	%
Effective tax rate (g)		22.1	%		27.4	%		25.4	%		25.3	%		25.7	%		25.1	%		25.9	%

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 was less than $.5 million for both the three months ended December 31, 2014 and September 30, 2014, respectively.

(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

Table 2: Consolidated Balance Sheet (Unaudited)


In millions, except par value	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013
Assets
Cash and due from banks (a)	$	4,360		$	4,164		$	4,892		$	4,723		$	4,043
Federal funds sold and resale agreements (b)		1,852			1,761			1,526			1,143			1,986
Trading securities		2,353			2,650			2,228			2,381			3,073
Interest-earning deposits with banks (a) (c)		31,779			26,247			16,876			14,877			12,135
Loans held for sale (b)		2,262			2,143			2,228			2,102			2,255
Investment securities		55,823			55,039			56,602			58,644			60,294
Loans (a) (b)		204,817			200,872			200,984			198,242			195,613
Allowance for loan and lease losses (a)		(3,331	)		(3,406	)		(3,453	)		(3,530	)		(3,609	)

Net loans		201,486			197,466			197,531			194,712			192,004
Goodwill		9,103			9,074			9,074			9,074			9,074
Other intangible assets		1,844			1,994			1,997			2,115			2,216
Equity investments (a) (d) (e)		10,728			10,763			10,583			10,337			10,560
Other (a) (b)		23,482			23,123			23,527			23,315			22,552

Total assets	$	345,072		$	334,424		$	327,064		$	323,423		$	320,192

Liabilities
Deposits
Noninterest-bearing	$	73,479		$	72,963		$	71,001		$	70,063		$	70,306
Interest-bearing		158,755			153,341			151,553			152,319			150,625

Total deposits		232,234			226,304			222,554			222,382			220,931
Borrowed funds
Federal funds purchased and repurchase agreements		3,510			3,499			3,132			3,233			4,289
Federal Home Loan Bank borrowings		20,005			16,471			15,023			13,911			12,912
Bank notes and senior debt		15,750			15,327			14,102			13,861			12,603
Subordinated debt		9,151			9,046			9,099			8,289			8,244
Commercial paper		4,995			4,809			4,999			4,923			4,997
Other (a) (b)		3,357			3,175			2,711			2,589			3,060

Total borrowed funds		56,768			52,327			49,066			46,806			46,105
Allowance for unfunded loan commitments and letters of credit		259			251			232			228			242
Accrued expenses (a) (e)		5,187			5,090			4,753			4,808			4,690
Other (a)		4,550			4,457			4,666			4,281			4,187

Total liabilities		298,998			288,429			281,271			278,505			276,155

Equity
Preferred stock (f)
Common stock - $5 par value
Authorized 800 shares, issued 541, 540, 540, 540, and 540 shares		2,705			2,703			2,703			2,700			2,698
Capital surplus - preferred stock		3,946			3,945			3,944			3,943			3,941
Capital surplus - common stock and other		12,627			12,573			12,506			12,394			12,416
Retained earnings (e)		26,200			25,464			24,755			24,010			23,251
Accumulated other comprehensive income (loss)		503			727			881			656			436
Common stock held in treasury at cost: 18, 12, 8, 6, and 7 shares		(1,430	)		(931	)		(584	)		(382	)		(408	)

Total shareholders’ equity		44,551			44,481			44,205			43,321			42,334
Noncontrolling interests (e)		1,523			1,514			1,588			1,597			1,703

Total equity		46,074			45,995			45,793			44,918			44,037

Total liabilities and equity	$	345,072		$	334,424		$	327,064		$	323,423		$	320,192

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

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

(c)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $31.4 billion, $25.9 billion, $16.5 billion, $14.5 billion, and $11.7 billion as of December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014, and December 31, 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)


	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013
Transitional Basel III (a) (b) (c)
Common equity Tier 1 (d)		11.0	%		11.1	%		11.0	%		10.8	%		N/A
Tier 1 risk-based		12.7			12.8			12.7			12.6			N/A
Total capital risk-based		15.9			16.1			16.0			15.8			N/A
Leverage		10.8			11.1			11.2			11.1			N/A
Basel I Ratios (e)
Tier 1 common		N/A			N/A			N/A			N/A			10.5	%
Tier 1 risk-based		N/A			N/A			N/A			N/A			12.4
Total risk-based		N/A			N/A			N/A			N/A			15.8
Leverage		N/A			N/A			N/A			N/A			11.1
Common shareholders’ equity to assets		11.8	%		12.1	%		12.3	%		12.2	%		12.0	%

(a)	The ratios as of December 31, 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 third quarter 2014 Form 10-Q. Our 2014 Form 10-K 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 period 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															Year ended
In millions, except per share data	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Increase (Decrease) to Noninterest Income and Impact on Diluted Earnings per Share
Commercial mortgage servicing rights valuation, net of economic hedge
Pretax	$	5		$	8		$	14		$	11		$	(5	)	$	38		$	68
After-tax	$	4		$	5		$	9		$	7		$	(3	)	$	25		$	44
Impact on diluted earnings per share (a)	$	.01		$	.01		$	.02		$	.01		$	(.01	)	$	.05		$	.08
Benefit / (provision) for residential mortgage repurchase obligations
Pretax	$	(4	)	$	(13	)	$	(2	)	$	19		$	124		$	—		$	53
After-tax	$	(3	)	$	(8	)	$	(1	)	$	12		$	81		$	—		$	35
Impact on diluted earnings per share (a)	$	(.00	)	$	(.02	)	$	(.00	)	$	.02		$	.15		$	.00		$	.06
Gains on sales of Visa Class B common shares
Pretax	$	36		$	57		$	54		$	62					$	209		$	168
After-tax	$	24		$	37		$	35		$	40					$	136		$	109
Impact on diluted earnings per share (a)	$	.04		$	.07		$	.07		$	.07					$	.25		$	.21
Credit valuations for customer-related derivatives activities
Pretax	$	1		$	3		$	(4	)	$	(14	)	$	16		$	(14	)	$	56
After-tax	$	1		$	2		$	(3	)	$	(9	)	$	11		$	(9	)	$	37
Impact on diluted earnings per share (a)	$	.00		$	.00		$	(.00	)	$	(.02	)	$	.02		$	(.02	)	$	.07

(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															Year ended
In millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)	$	17,745		$	18,134		$	19,207		$	20,721		$	21,204		$	18,935		$	22,746
Non-agency		4,832			5,021			5,204			5,375			5,539			5,106			5,828
Commercial mortgage-backed (b)		5,799			5,147			5,295			5,576			5,583			5,461			5,228
Asset-backed		5,089			5,207			5,400			5,593			5,814			5,321			5,857
U.S. Treasury and government agencies		5,140			5,142			4,883			4,169			2,507			4,837			2,326
State and municipal		1,935			1,913			2,104			2,652			2,275			2,148			2,250
Other debt		1,780			1,763			2,028			2,505			2,523			2,016			2,632
Corporate stocks and other		433			404			362			409			359			402			342

Total securities available for sale		42,753			42,731			44,483			47,000			45,804			44,226			47,209
Securities held to maturity
Residential mortgage-backed		5,832			5,778			5,977			5,995			5,726			5,885			4,374
Commercial mortgage-backed		2,257			2,409			2,560			2,748			3,153			2,502			3,422
Asset-backed		767			874			990			1,004			1,047			908			983
U.S. Treasury and government agencies		247			245			242			240			238			243			235
State and municipal		2,048			2,058			1,732			1,055			1,056			1,727			749
Other		324			325			331			337			341			329			347

Total securities held to maturity		11,475			11,689			11,832			11,379			11,561			11,594			10,110

Total investment securities		54,228			54,420			56,315			58,379			57,365			55,820			57,319
Loans
Commercial		95,646			92,547			91,866			89,517			88,185			92,411			86,047
Commercial real estate		23,176			22,961			22,775			21,652			20,587			22,646			19,469
Equipment lease financing		7,621			7,610			7,564			7,470			7,428			7,567			7,329
Consumer		62,213			62,351			62,472			63,093			63,203			62,529			62,125
Residential real estate		14,223			14,359			14,556			14,849			15,180			14,495			15,003

Total loans		202,879			199,828			199,233			196,581			194,583			199,648			189,973
Interest-earning deposits with banks		27,701			22,108			14,650			12,157			10,455			19,204			4,910
Loans held for sale		2,205			2,272			2,060			1,949			2,225			2,123			2,909
Federal funds sold and resale agreements		1,771			1,409			1,184			1,416			864			1,446			960
Other		5,121			4,914			4,927			5,296			4,993			5,064			4,574

Total interest-earning assets		293,905			284,951			278,369			275,778			270,485			283,305			260,645
Noninterest-earning assets:
Allowance for loan and lease losses		(3,383	)		(3,445	)		(3,512	)		(3,591	)		(3,667	)		(3,482	)		(3,796	)
Cash and due from banks		4,176			3,934			3,776			3,890			3,904			3,945			3,953
Other		44,948			44,005			43,887			43,485			43,346			44,085			44,862

Total assets	$	339,646		$	329,445		$	322,520		$	319,562		$	314,068		$	327,853		$	305,664

(a)	Calculated using average daily balances.

(b)

In the third quarter of 2014, these line items were corrected for all periods then 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, and these lines are now also corrected for the year ended December 31, 2013, for which the impact was $1.1 billion.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

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


	Three months ended										Year ended
In millions	December 31 2014		September 30 2014		June 30 2014		March 31 2014		December 31 2013		December 31 2014		December 31 2013
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	77,696	$	76,014	$	74,261	$	74,034	$	73,534	$	75,513	$	70,567
Demand		44,389		43,112		43,316		42,635		41,151		43,367		40,144
Savings		12,410		12,152		11,976		11,408		11,010		11,990		10,954
Retail certificates of deposit		18,700		19,317		20,012		20,538		21,138		19,636		22,274
Time deposits in foreign offices and other time		2,754		2,235		2,168		2,069		2,013		2,308		2,061

Total interest-bearing deposits		155,949		152,830		151,733		150,684		148,846		152,814		146,000
Borrowed funds
Federal funds purchased and repurchase agreements		3,339		3,319		3,343		4,250		4,120		3,560		3,884
Federal Home Loan Bank borrowings		16,786		15,328		14,193		13,100		11,348		14,863		8,617
Bank notes and senior debt		15,395		14,221		13,490		13,327		12,252		14,114		11,221
Subordinated debt		8,812		8,804		8,570		8,040		7,900		8,559		7,373
Commercial paper		4,735		4,863		4,917		4,931		5,297		4,861		6,902
Other		3,303		2,801		2,591		2,740		2,156		2,860		2,025

Total borrowed funds		52,370		49,336		47,104		46,388		43,073		48,817		40,022

Total interest-bearing liabilities		208,319		202,166		198,837		197,072		191,919		201,631		186,022
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		73,468		70,993		68,219		67,679		68,193		70,108		66,168
Allowance for unfunded loan commitments and letters of credit		251		232		228		241		236		238		241
Accrued expenses and other liabilities		11,639		10,307		10,035		10,123		10,622		10,530		10,918
Equity		45,969		45,747		45,201		44,447		43,098		45,346		42,315

Total liabilities and equity	$	339,646	$	329,445	$	322,520	$	319,562	$	314,068	$	327,853	$	305,664

(a) Calculated using average daily balances.

Table 6: Supplemental Average Balance Sheet Information (Unaudited)
Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	155,949	$	152,830	$	151,733	$	150,684	$	148,846	$	152,814	$	146,000
Noninterest-bearing deposits		73,468		70,993		68,219		67,679		68,193		70,108		66,168

Total deposits	$	229,417	$	223,823	$	219,952	$	218,363	$	217,039	$	222,922	$	212,168
Transaction deposits	$	195,553	$	190,119	$	185,796	$	184,348	$	182,878	$	188,988	$	176,879
Common shareholders’ equity	$	40,522	$	40,238	$	39,659	$	38,838	$	37,455	$	39,820	$	36,425


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Table 7: Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Year ended
	December 31			September 30			June 30			March 31			December 31			December 31			December 31
	2014			2014			2014			2014			2013			2014			2013
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)		2.72	%		2.64	%		2.62	%		2.64	%		2.60	%		2.66	%		2.47	%
Non-agency		4.33			4.64			5.19			4.91			5.14			4.78			5.44
Commercial mortgage-backed (b)		3.37			3.61			3.59			3.49			3.92			3.52			4.25
Asset-backed		2.15			2.01			1.96			1.79			1.92			1.97			1.88
U.S. Treasury and government agencies		1.21			1.01			1.20			1.30			1.36			1.18			1.59
State and municipal		4.58			3.98			4.27			4.78			4.31			4.47			4.31
Other debt		3.25			2.41			2.35			2.39			2.30			2.58			2.43
Corporate stocks and other		.11			.10			.11			.10			.15			—			—
Total securities available for sale		2.82			2.75			2.84			2.86			2.96			2.82			2.98
Securities held to maturity
Residential mortgage-backed		3.60			3.35			3.55			3.55			3.42			3.52			3.50
Commercial mortgage-backed		4.09			3.99			3.76			4.09			4.28			3.96			4.41
Asset-backed		1.50			1.75			1.54			1.51			1.57			1.54			1.63
U.S. Treasury and government agencies		3.82			3.81			3.80			3.77			3.82			3.70			3.83
State and municipal		5.50			5.50			5.47			5.61			5.65			5.50			5.61
Other		3.02			2.84			2.87			3.00			4.20			3.04			3.17
Total securities held to maturity		3.88			3.73			3.69			3.68			3.72			3.74			3.78
Total investment securities		3.05			2.96			3.02			3.02			3.11			3.02			3.12
Loans
Commercial		3.04			3.17			3.24			3.50			3.53			3.28			3.77
Commercial real estate		3.88			3.90			4.04			4.20			4.50			4.06			4.81
Equipment lease financing		3.97			3.48			3.61			3.64			3.74			3.67			3.98
Consumer		4.11			4.16			4.16			4.26			4.29			4.17			4.42
Residential real estate		4.90			5.03			4.86			5.09			5.18			4.97			5.15
Total loans		3.63			3.71			3.75			3.95			4.02			3.78			4.21
Interest-earning deposits with banks		.29			.23			.27			.23			.26			.26			.24
Loans held for sale		4.67			4.48			4.79			4.71			5.40			4.66			5.40
Federal funds sold and resale agreements		.28			.38			.49			.32			.79			.35			.83
Other		4.56			4.24			5.26			4.02			4.51			4.50			4.77
Total yield on interest-earning assets		3.21			3.30			3.44			3.58			3.69			3.40			3.90
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.20			.18			.18			.17			.18			.19			.18
Demand		.06			.05			.05			.05			.05			.05			.04
Savings		.14			.12			.10			.08			.08			.12			.09
Retail certificates of deposit		.72			.73			.74			.75			.76			.74			.81
Time deposits in foreign offices and other time		.20			.18			.17			.18			.17			.17			.39
Total interest-bearing deposits		.22			.21			.21			.21			.22			.21			.24
Borrowed funds
Federal funds purchased and repurchase agreements		.11			.08			.07			.11			.14			.08			.15
Federal Home Loan Bank borrowings		.46			.48			.50			.50			.48			.49			.52
Bank notes and senior debt		1.35			1.33			1.51			1.49			1.51			1.43			1.70
Subordinated debt		2.64			2.40			2.65			2.54			2.63			2.56			2.78
Commercial paper		.31			.30			.29			.28			.26			.29			.23
Other		2.25			2.62			2.60			2.20			2.44			2.45			2.62
Total borrowed funds		1.17			1.14			1.24			1.18			1.21			1.19			1.29
Total rate on interest-bearing liabilities		.45			.44			.45			.44			.44			.45			.46

Interest rate spread		2.76			2.86			2.99			3.14			3.25			2.95			3.44
Impact of noninterest-bearing sources (c)		.13			.12			.13			.12			.13			.13			.13

Net interest margin		2.89	%		2.98	%		3.12	%		3.26	%		3.38	%		3.08	%		3.57	%

(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 December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 2013, were $49 million, $47 million, $47 million, $46 million and $45 million, respectively. The taxable-equivalent adjustments to net interest income for the year ended December 31, 2014 and December 31, 2013 were $189 million and $168 million, respectively.

(b)

In the third quarter of 2014, these line items were corrected for all periods then presented due to a misclassification of 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, and these lines are now also corrected for the year ended December 31, 2013.

(c)	Represents the positive effects of investing noninterest-bearing sources in interest-earning assets.


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															Year ended
In millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Core net interest income (a)	$	1,971		$	1,957		$	1,982		$	2,032		$	2,075		$	7,942		$	8,304
Total purchase accounting accretion (b)		126			147			147			163			191			583			843

Total net interest income	$	2,097		$	2,104		$	2,129		$	2,195		$	2,266		$	8,525		$	9,147

(a) We believe that core net interest income, a non-GAAP financial measure, is useful in evaluating the performance of our interest-based activities. (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															Year ended
In millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Average yields/rates
Yield on interest-earning assets
Total investment securities		3.05	%		2.96	%		3.02	%		3.02	%		3.11	%		3.02	%		3.12	%
Total loans		3.63			3.71			3.75			3.95			4.02			3.78			4.21
Other		1.15			1.19			1.76			1.62			2.05			1.37			2.96
Total yield on interest-earning assets		3.21			3.30			3.44			3.58			3.69			3.40			3.90

Rate on interest-bearing liabilities
Total interest-bearing deposits		.22			.21			.21			.21			.22			.21			.24
Total borrowed funds		1.17			1.14			1.24			1.18			1.21			1.19			1.29
Total rate on interest-bearing liabilities		.45			.44			.45			.44			.44			.45			.46

Interest rate spread		2.76			2.86			2.99			3.14			3.25			2.95			3.44
Impact of noninterest-bearing sources		.13			.12			.13			.12			.13			.13			.13

Net interest margin		2.89	%		2.98	%		3.12	%		3.26	%		3.38	%		3.08	%		3.57	%

(c) See note (a) on page 6.
Table 10: Details of Core Net Interest Margin (d)
	Three months ended															Year ended
In millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.98	%		2.89	%		2.96	%		2.96	%		3.02	%		2.96	%		3.03	%
Total loans		3.38			3.42			3.46			3.62			3.65			3.49			3.79
Other		1.14			1.19			1.74			1.64			1.99			1.37			2.77
Total yield on interest-earning assets		3.02			3.08			3.22			3.33			3.40			3.18			3.57

Rate on interest-bearing liabilities
Total interest-bearing deposits		.23			.23			.23			.23			.24			.23			.27
Total borrowed funds		1.03			1.00			1.10			1.04			1.06			1.05			1.12
Total rate on interest-bearing liabilities		.43			.42			.43			.43			.43			.43			.45

Interest rate spread		2.59			2.66			2.79			2.90			2.97			2.75			3.12
Impact of noninterest-bearing sources		.13			.12			.13			.12			.13			.13			.13

Core net interest margin		2.72			2.78			2.92			3.02			3.10			2.88			3.25
Purchase accounting accretion impact on net interest margin		.17			.20			.20			.24			.28			.20			.32

Net interest margin		2.89	%		2.98	%		3.12	%		3.26	%		3.38	%		3.08	%		3.57	%

(d)

We believe that core net interest margin, a non-GAAP financial 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											Year ended
In millions, except per share data	December 31 2014		September 30 2014		June 30 2014		March 31 2014			December 31 2013		December 31 2014		December 31 2013
Basic
Net income	$	1,057	$	1,038	$	1,052	$	1,060		$	1,074	$	4,207	$	4,212
Less:
Net income (loss) attributable to noncontrolling interests		21		1		3		(2	)		13		23		11
Preferred stock dividends and discount accretion and redemptions		48		71		48		70			50		237		249

Net income attributable to common shareholders		988		966		1,001		992			1,011		3,947		3,952
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares		2		3		3		3			5		11		18

Net income attributable to basic common shares	$	986	$	963	$	998	$	989		$	1,006	$	3,936	$	3,934
Basic weighted-average common shares outstanding		524		529		532		532			530		529		528
Basic earnings per common share	$	1.88	$	1.82	$	1.88	$	1.86		$	1.90	$	7.44	$	7.45

Diluted
Net income attributable to basic common shares	$	986	$	963	$	998	$	989		$	1,006	$	3,936	$	3,934
Less: Impact of BlackRock earnings per share dilution		5		4		3		6			5		18		18

Net income attributable to diluted common shares	$	981	$	959	$	995	$	983		$	1,001	$	3,918	$	3,916
Basic weighted-average common shares outstanding		524		529		532		532			530		529		528
Dilutive potential common shares		8		8		7		7			5		8		4

Diluted weighted-average common shares outstanding		532		537		539		539			535		537		532
Diluted earnings per common share	$	1.84	$	1.79	$	1.85	$	1.82		$	1.87	$	7.30	$	7.36

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			Year ended
In millions	December 31 2013			December 31 2013
Noninterest Expense
Previously reported	$	2,547		$	9,801
Adjustment from adoption of ASU 2014-01		(33	)		(120	)

Revised	$	2,514		$	9,681

Net Income
Previously reported	$	1,061		$	4,227
Adjustment from adoption of ASU 2014-01		13			(15	)

Revised	$	1,074		$	4,212

Diluted Earnings per Share
Previously reported	$	1.85		$	7.39
Adjustment from adoption of ASU 2014-01		.02			(.03	)

Revised	$	1.87		$	7.36

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

Revised		62	%		60	%

Effective Tax Rate
Previously reported		24.9	%		24.1	%
Adjustment from adoption of ASU 2014-01		.8			1.8

Revised		25.7	%		25.9	%


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

Revised	$	23,251

(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	December 31 2014		September 30 2014		June 30 2014		March 31 2014		December 31 2013
Commercial
Retail/wholesale trade	$	16,972	$	16,162	$	16,146	$	16,157	$	15,530
Manufacturing		18,744		18,649		18,683		17,185		16,208
Service providers		14,103		13,603		13,734		13,576		13,052
Real estate related (a)		10,812		10,722		10,908		10,856		10,729
Financial services		6,178		5,218		4,846		4,720		4,927
Health care		9,017		9,095		8,939		8,836		8,690
Other industries		21,594		20,051		20,280		19,771		19,242

Total commercial		97,420		93,500		93,536		91,101		88,378

Commercial real estate
Real estate projects (b)		14,577		14,564		14,535		14,268		13,613
Commercial mortgage		8,685		8,378		8,384		7,883		7,578

Total commercial real estate		23,262		22,942		22,919		22,151		21,191

Equipment lease financing		7,686		7,621		7,628		7,521		7,576

Total commercial lending		128,368		124,063		124,083		120,773		117,145

Consumer
Home equity
Lines of credit		20,361		20,667		20,959		21,277		21,696
Installment		14,316		14,388		14,507		14,595		14,751
Credit card		4,612		4,449		4,435		4,309		4,425
Other consumer
Education		6,626		6,978		7,118		7,360		7,534
Automobile		11,616		11,548		11,005		10,906		10,827
Other		4,511		4,428		4,317		4,216		4,170

Total consumer		62,042		62,458		62,341		62,663		63,403

Residential real estate
Residential mortgage		13,885		13,805		13,965		14,179		14,418
Residential construction		522		546		595		627		647

Total residential real estate		14,407		14,351		14,560		14,806		15,065

Total consumer lending		76,449		76,809		76,901		77,469		78,468

Total loans (c)	$	204,817	$	200,872	$	200,984	$	198,242	$	195,613

(a) Includes loans to customers in the real estate and construction industries. (b) Includes both construction loans and intermediate financing for projects.
(c) Includes purchased impaired loans:	$	4,858	$	5,167	$	5,557	$	5,824	$	6,106
Table 14: Details of Loans Held for Sale (Unaudited)
In millions	December 31 2014		September 30 2014		June 30 2014		March 31 2014		December 31 2013
Commercial mortgage	$	922	$	891	$	900	$	732	$	867
Residential mortgage		1,279		1,211		1,271		1,088		1,356
Other		61		41		57		282		32

Total	$	2,262	$	2,143	$	2,228	$	2,102	$	2,255

Table 15: Net Unfunded Loan Commitments (Unaudited)
In millions	December 31 2014		September 30 2014		June 30 2014		March 31 2014		December 31 2013
Net unfunded loan commitments	$	139,687	$	136,795	$	131,446	$	129,644	$	129,870


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	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013
Beginning balance	$	3,406		$	3,453		$	3,530		$	3,609		$	3,691
Gross charge-offs:
Commercial		(45	)		(60	)		(86	)		(85	)		(87	)
Commercial real estate		(24	)		(14	)		(14	)		(18	)		(24	)
Equipment lease financing		(5	)		(3	)		(4	)		(2	)		(2	)
Home equity		(62	)		(50	)		(68	)		(95	)		(114	)
Residential real estate		(14	)		(11	)		(7	)		(8	)		(2	)
Credit card		(38	)		(40	)		(42	)		(43	)		(42	)
Other consumer		(47	)		(44	)		(43	)		(49	)		(52	)

Total gross charge-offs		(235	)		(222	)		(264	)		(300	)		(323	)
Recoveries:
Commercial		51			62			43			51			65
Commercial real estate		20			15			29			20			23
Equipment lease financing		4			4			3			3			3
Home equity		20			19			20			19			18
Residential real estate		3			21			3			(1	)		6
Credit card		5			5			6			5			5
Other consumer		14			14			15			17			14

Total recoveries		117			140			119			114			134
Net (charge-offs) recoveries:
Commercial		6			2			(43	)		(34	)		(22	)
Commercial real estate		(4	)		1			15			2			(1	)
Equipment lease financing		(1	)		1			(1	)		1			1
Home equity		(42	)		(31	)		(48	)		(76	)		(96	)
Residential real estate		(11	)		10			(4	)		(9	)		4
Credit card		(33	)		(35	)		(36	)		(38	)		(37	)
Other consumer		(33	)		(30	)		(28	)		(32	)		(38	)

Total net charge-offs		(118	)		(82	)		(145	)		(186	)		(189	)
Provision for credit losses		52			55			72			94			113
Other		(1	)		(1	)					(1	)		1
Net change in allowance for unfunded loan commitments and letters of credit		(8	)		(19	)		(4	)		14			(7	)

Ending balance	$	3,331		$	3,406		$	3,453		$	3,530		$	3,609

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.23	%		.16	%		.29	%		.38	%		.39	%
Allowance for loan and lease losses to total loans		1.63			1.70			1.72			1.78			1.84
Commercial lending net charge-offs	$	1		$	4		$	(29	)	$	(31	)	$	(22	)
Consumer lending net charge-offs		(119	)		(86	)		(116	)		(155	)		(167	)

Total net charge-offs	$	(118	)	$	(82	)	$	(145	)	$	(186	)	$	(189	)
Net charge-offs to average loans
Commercial lending		.00	%		(.01	)%		.10	%		.11	%		.08	%
Consumer lending		.62			.44			.60			.81			.85

Table 17: Change in Allowance for Unfunded Loan Commitments and Letters of Credit
Three months ended - in millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013
Beginning balance	$	251		$	232		$	228		$	242		$	235
Net change in allowance for unfunded loan commitments and letters of credit		8			19			4			(14	)		7

Ending balance	$	259		$	251		$	232		$	228		$	242


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									Year ended
	December 31			September 30			December 31			December 31			December 31
In millions	2014			2014			2013			2014			2013
Impaired loans
Scheduled accretion	$	106		$	109		$	128		$	460		$	580
Reversal of contractual interest on impaired loans		(58	)		(57	)		(64	)		(253	)		(314	)

Scheduled accretion net of contractual interest		48			52			64			207			266
Excess cash recoveries		32			31			28			127			115

Total impaired loans	$	80		$	83		$	92		$	334		$	381

Table 19: Purchased Impaired Loans - Accretable Yield


In millions
October 1, 2014	$	1,819		January 1, 2014	$	2,055		January 1, 2013	$	2,166
Scheduled accretion		(106	)	Scheduled accretion		(460	)	Scheduled accretion		(580	)
Excess cash recoveries		(32	)	Excess cash recoveries		(127	)	Excess cash recoveries		(115	)
Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		(123	)	Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		90		Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		584

December 31, 2014 (b)	$	1,558		December 31, 2014 (b)	$	1,558		December 31, 2013	$	2,055

(a)

Approximately 93% of net reclassifications and other activity for the year were within the commercial portfolio as compared to 37% for year ending December 31, 2013. Net reclassifications and other activity for the fourth quarter were negative and primarily driven by disposals within the consumer portfolio.

(b)	As of December 31, 2014, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $0.9 billion in future periods. This will offset the total net accretable interest in future interest income of $1.6 billion on purchased impaired loans.

Table 20: Valuation of Purchased Impaired Loans


	December 31, 2014						September 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 (a)	$	466					$	573					$	937
Purchased impaired mark		(156	)					(168	)					(264	)

Recorded investment		310						405						673
Allowance for loan losses		(79	)					(96	)					(133	)

Net investment		231			50	%		309			54	%		540			58	%

Consumer and residential mortgage loans:
Outstanding balance (a)		4,541						4,795						5,548
Purchased impaired mark		7						(33	)					(115	)

Recorded investment		4,548						4,762						5,433
Allowance for loan losses		(793	)					(795	)					(871	)

Net investment		3,755			83	%		3,967			83	%		4,562			82	%

Total purchased impaired loans:
Outstanding balance (a)		5,007						5,368						6,485
Purchased impaired mark		(149	)					(201	)					(379	)

Recorded investment		4,858						5,167						6,106
Allowance for loan losses		(872	)					(891	)					(1,004	)

Net investment	$	3,986			80	%	$	4,276			80	%	$	5,102			79	%

(a)

Outstanding balance represents the balance on the loan servicing system for active loans. It is possible for the outstanding balance to be lower than the recorded investment for certain loans due to the use of pool accounting. Our third quarter 2014 Form 10-Q included, and our 2014 Form 10-K will include, more information on purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12


Details of Nonperforming Assets (Unaudited)
Table 21: Nonperforming Assets by Type
In millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	48		$	62		$	70		$	49		$	57
Manufacturing		59			44			69			63			58
Service providers		67			82			94			90			108
Real estate related (b)		66			76			79			122			124
Financial services		4			5			5			5			7
Health care		28			23			23			17			19
Other industries		18			28			54			91			84

Total commercial		290			320			394			437			457

Commercial real estate
Real estate projects		290			346			370			401			436
Commercial mortgage		44			49			65			79			82

Total commercial real estate		334			395			435			480			518

Equipment lease financing		2			3			4			6			5

Total commercial lending		626			718			833			923			980

Consumer lending (c)
Home equity		1,112			1,090			1,093			1,117			1,139
Residential real estate
Residential mortgage		694			725			799			829			890
Residential construction		12			18			17			13			14
Credit card		3			3			3			4			4
Other consumer		63			58			56			61			61

Total consumer lending		1,884			1,894			1,968			2,024			2,108

Total nonperforming loans (d)		2,510			2,612			2,801			2,947			3,088

OREO and foreclosed assets
Other real estate owned (OREO) (e)		351			353			352			343			360
Foreclosed and other assets		19			10			15			14			9

Total OREO and foreclosed assets		370			363			367			357			369

Total nonperforming assets	$	2,880		$	2,975		$	3,168		$	3,304		$	3,457

Nonperforming loans to total loans		1.23	%		1.30	%		1.39	%		1.49	%		1.58	%
Nonperforming assets to total loans, OREO and foreclosed assets		1.40			1.48			1.57			1.66			1.76
Nonperforming assets to total assets		.83			.89			.97			1.02			1.08
Allowance for loan and lease losses to nonperforming loans (f)		133			130			123			120			117

(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 $194 million, $214 million, $228 million, $238 million and $245 million at December 31, 2014, September 30, 2014, June 30, 2014, March 31, 2014 and December 31, 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	October 1, 2014 - December 31, 2014			July 1, 2014 - September 30, 2014			April 1, 2014 - June 30, 2014			January 1, 2014 - March 31, 2014			October 1, 2013 - December 31, 2013
Beginning balance	$	2,975		$	3,168		$	3,304		$	3,457		$	3,622
New nonperforming assets		470			380			644			633			836
Charge-offs and valuation adjustments		(158	)		(127	)		(148	)		(152	)		(223	)
Principal activity, including paydowns and payoffs		(183	)		(195	)		(300	)		(323	)		(556	)
Asset sales and transfers to loans held for sale		(130	)		(143	)		(212	)		(85	)		(115	)
Returned to performing status		(94	)		(108	)		(120	)		(226	)		(107	)

Ending balance	$	2,880		$	2,975		$	3,168		$	3,304		$	3,457

(a)

In the fourth quarter 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 the fourth quarter of 2013 were (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 December 31, 2014 (a)


In millions
Ranking	Outstandings		Industry
1	$	35	Real Estate, Rental and Leasing
2		21	Manufacturing
3		15	Real Estate, Rental and Leasing
4		11	Manufacturing
5		9	Real Estate, Rental and Leasing
6		8	Wholesale Trade
7		8	Retail Trade
8		8	Real Estate, Rental and Leasing
9		7	Real Estate, Rental and Leasing
10		7	Real Estate, Rental and Leasing

Total	$	129

As a percent of total nonperforming assets 4%

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

Table 24: Summary of Troubled Debt Restructurings


In millions	December 31 2014		September 30 2014		June 30 2014		March 31 2014		December 31 2013
Total consumer lending	$	2,041	$	2,064	$	2,121	$	2,134	$	2,161
Total commercial lending		542		552		546		579		578

Total TDRs	$	2,583	$	2,616	$	2,667	$	2,713	$	2,739

Nonperforming	$	1,370	$	1,303	$	1,369	$	1,405	$	1,511
Accruing (a)		1,083		1,174		1,153		1,151		1,062
Credit card		130		139		145		157		166

Total TDRs	$	2,583	$	2,616	$	2,667	$	2,713	$	2,739

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 and loans to borrowers not currently obligated to make principal and interest payments under the restructured terms 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	Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Dec. 31 2014			Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013
Commercial	$	73	$	46	$	71	$	93	$	81		.07	%		.05	%		.08	%		.10	%		.09	%
Commercial real estate		23		47		17		35		54		.10			.20			.07			.16			.25
Equipment lease financing		11		4		4		17		31		.14			.05			.05			.23			.41
Home equity		70		67		65		76		86		.20			.19			.18			.21			.24
Residential real estate
Non government insured		95		87		87		101		112		.66			.61			.60			.68			.74
Government insured		68		76		74		82		105		.47			.53			.51			.55			.70
Credit card		28		27		26		26		29		.61			.61			.59			.60			.66
Other consumer
Non government insured		62		56		50		51		62		.27			.24			.22			.23			.28
Government insured		152		164		154		149		154		.67			.71			.69			.66			.68

Total	$	582	$	574	$	548	$	630	$	714		.28			.29			.27			.32			.37

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


	Amount										Percent of Total Outstandings
Dollars in millions	Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Dec. 31 2014			Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013
Commercial	$	24	$	19	$	26	$	20	$	20		.02	%		.02	%		.03	%		.02	%		.02	%
Commercial real estate		2		6		48		25		11		.01			.03			.21			.11			.05
Equipment lease financing		1		1		1				2		.01			.01			.01						.03
Home equity		32		25		27		32		34		.09			.07			.08			.09			.09
Residential real estate
Non government insured		25		24		21		27		30		.17			.17			.14			.18			.20
Government insured		43		41		48		43		57		.30			.29			.33			.29			.38
Credit card		20		18		18		19		19		.43			.41			.41			.44			.43
Other consumer
Non government insured		19		20		15		16		18		.08			.09			.07			.07			.08
Government insured		93		100		94		104		94		.41			.44			.42			.46			.42

Total	$	259	$	254	$	298	$	286	$	285		.13			.13			.15			.14			.15

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


	Amount										Percent of Total Outstandings
Dollars in millions	Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Mar. 31 2014		Dec. 31 2013		Dec. 31 2014			Sept. 30 2014			Jun. 30 2014			Mar. 31 2014			Dec. 31 2013
Commercial	$	37	$	39	$	35	$	28	$	42		.04	%		.04	%		.04	%		.03	%		.05	%
Commercial real estate				1						2					.00									.01
Equipment lease financing
Residential real estate
Non government insured		23		24		23		30		35		.16			.17			.16			.20			.23
Government insured		719		785		872		924		1,025		4.99			5.47			5.99			6.24			6.80
Credit card		33		29		29		31		34		.72			.65			.65			.72			.77
Other consumer
Non government insured		16		13		12		13		14		.07			.06			.05			.06			.06
Government insured		277		287		281		284		339		1.22			1.25			1.25			1.26			1.50

Total	$	1,105	$	1,178	$	1,252	$	1,310	$	1,491		.54			.59			.62			.66			.76

(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 equity capital markets 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 December 31, 2014, our economic interest in BlackRock was 22%.

Table 28: Period End Employees


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

Full-time employees
Retail Banking	22,216	22,103	22,148	22,104	22,226
Other full-time employees (a)	27,529	27,528	27,765	27,740	27,695

Total full-time employees	49,745	49,631	49,913	49,844	49,921

Part-time employees
Retail Banking	3,274	3,410	3,644	3,761	4,030
Other part-time employees (a)	568	614	802	510	482

Total part-time employees	3,842	4,024	4,446	4,271	4,512

Total	53,587	53,655	54,359	54,115	54,433

(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												Year ended
In millions	December 31 2014			September 30 2014		June 30 2014		March 31 2014			December 31 2013		December 31 2014		December 31 2013
Income (Loss)
Retail Banking (c)	$	172		$	173	$	225	$	158		$	107	$	728	$	550
Corporate & Institutional Banking		564			549		470		523			569		2,106		2,264
Asset Management Group		45			46		53		37			36		181		162
Residential Mortgage Banking (d)		(9	)		12		36		(4	)		55		35		148
Non-Strategic Assets Portfolio		76			82		99		110			118		367		379
Other, including BlackRock (b) (e)		209			176		169		236			189		790		709

Net income	$	1,057		$	1,038	$	1,052	$	1,060		$	1,074	$	4,207	$	4,212

Revenue
Retail Banking (c)	$	1,520		$	1,521	$	1,514	$	1,494		$	1,500	$	6,049	$	6,100
Corporate & Institutional Banking		1,444			1,386		1,348		1,298			1,389		5,476		5,506
Asset Management Group		281			277		279		270			269		1,107		1,040
Residential Mortgage Banking (d)		182			185		227		206			327		800		1,100
Non-Strategic Assets Portfolio		140			152		147		148			167		587		742
Other, including BlackRock (b) (e)		380			320		295		361			421		1,356		1,524

Total revenue	$	3,947		$	3,841	$	3,810	$	3,777		$	4,073	$	15,375	$	16,012

(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 2014 Form 10-K will include additional information regarding BlackRock.

(c)	Includes gains on sales of portions of Visa Class B common shares in each quarter in 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															Year ended
Dollars in millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
INCOME STATEMENT
Net interest income	$	986		$	985		$	973		$	980		$	1,012		$	3,924		$	4,079
Noninterest income
Service charges on deposits		172			173			148			140			151			633			570
Brokerage		64			60			61			55			57			240			224
Consumer services		247			248			248			218			256			961			935
Other		51			55			84			101			24			291			292

Total noninterest income		534			536			541			514			488			2,125			2,021

Total revenue		1,520			1,521			1,514			1,494			1,500			6,049			6,100
Provision for credit losses		54			74			4			145			195			277			657
Noninterest expense		1,195			1,175			1,155			1,100			1,138			4,625			4,576

Pretax earnings		271			272			355			249			167			1,147			867
Income taxes		99			99			130			91			60			419			317

Earnings	$	172		$	173		$	225		$	158		$	107		$	728		$	550

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	28,457		$	28,684		$	28,959		$	29,317		$	29,588		$	28,852		$	29,300
Indirect auto		9,209			9,192			9,092			8,994			8,671			9,122			7,746
Indirect other		635			675			726			777			822			703			909
Education		6,895			7,100			7,298			7,547			7,680			7,208			7,923
Credit cards		4,475			4,401			4,307			4,271			4,250			4,364			4,142
Other		2,345			2,277			2,189			2,137			2,157			2,238			2,148

Total consumer		52,016			52,329			52,571			53,043			53,168			52,487			52,168
Commercial and commercial real estate		10,698			10,801			10,922			11,051			11,131			10,867			11,266
Floor plan		2,180			2,021			2,291			2,373			2,226			2,215			2,055
Residential mortgage		552			584			623			647			676			601			741

Total loans		65,446			65,735			66,407			67,114			67,201			66,170			66,230
Goodwill and other intangible assets		6,007			6,025			6,043			6,062			6,083			6,034			6,116
Other assets		2,946			2,922			2,753			2,744			2,730			2,842			2,625

Total assets	$	74,399		$	74,682		$	75,203		$	75,920		$	76,014		$	75,046		$	74,971

Deposits
Noninterest-bearing demand	$	22,860		$	22,392		$	21,907		$	21,359		$	21,699		$	22,134		$	21,248
Interest-bearing demand		34,298			33,900			34,272			33,490			32,298			33,992			31,811
Money market		51,204			50,204			50,142			49,484			49,250			50,263			48,784

Total transaction deposits		108,362			106,496			106,321			104,333			103,247			106,389			101,843
Savings		12,244			11,997			11,845			11,288			10,901			11,847			10,835
Certificates of deposit		17,959			18,720			19,354			19,882			20,425			18,972			21,488

Total deposits		138,565			137,213			137,520			135,503			134,573			137,208			134,166
Other liabilities		555			507			411			398			369			469			337

Total liabilities	$	139,120		$	137,720		$	137,931		$	135,901		$	134,942		$	137,677		$	134,503

PERFORMANCE RATIOS
Return on average assets		.92	%		.92	%		1.20	%		.84	%		.56	%		.97	%		.73	%
Noninterest income to total revenue		35			35			36			34			33			35			33
Efficiency		79			77			76			74			76			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															Year ended
Dollars in millions, except as noted	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
OTHER INFORMATION (a)								.
Credit-related statistics:
Commercial nonperforming assets	$	139		$	146		$	158		$	172		$	208
Consumer nonperforming assets		1,059			1,037			1,037			1,059			1,077

Total nonperforming assets	$	1,198		$	1,183		$	1,195		$	1,231		$	1,285

Purchased impaired loans (b)	$	575		$	600		$	631		$	663		$	692

Commercial lending net charge-offs (recoveries)	$	(2	)	$	2		$	11		$	20		$	13		$	31		$	89
Credit card lending net charge-offs		33			35			37			37			37			142			156
Consumer lending (excluding credit card) net charge-offs		73			56			68			88			118			285			468

Total net charge-offs	$	104		$	93		$	116		$	145		$	168		$	458		$	713

Commercial lending annualized net charge-off ratio		(.06	)%		.06	%		.33	%		.60	%		.39	%		.24	%		.67	%
Credit card lending annualized net charge-off ratio		2.93	%		3.16	%		3.45	%		3.51	%		3.45	%		3.25	%		3.77	%
Consumer lending (excluding credit card) annualized net charge-off ratio (c)		.60	%		.46	%		.56	%		.72	%		.94	%		.58	%		.96	%

Total annualized net charge-off ratio (c)		.63	%		.56	%		.70	%		.88	%		.99	%		.69	%		1.08	%

Home equity portfolio credit statistics: (d)
% of first lien positions at origination (e)		54	%		53	%		53	%		53	%		52	%
Weighted-average loan-to-value ratios
(LTVs) (e)(f)		77	%		78	%		79	%		79	%		81	%
Weighted-average updated FICO scores (g)		748			747			748			745			745
Annualized net charge-off ratio (c)		.52	%		.35	%		.54	%		.75	%		1.06	%		.54	%		1.14	%
Delinquency data - % of total loans: (h)
Loans 30 - 59 days past due		.20	%		.19	%		.19	%		.21	%		.20	%
Loans 60 - 89 days past due		.09	%		.07	%		.07	%		.08	%		.09	%

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

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

Other statistics:
ATMs		8,605			8,178			7,977			8,001			7,445
Branches (i)		2,697			2,691			2,695			2,703			2,714
Brokerage account client assets (billions)	$	43		$	43$			43		$	41		$	41

Customer-related statistics (average):
Non-teller deposit transactions (j)		38	%		36	%		33	%		31	%		30	%		35	%		25	%
Digital consumer customers (k)		49	%		47	%		45	%		43	%		40	%		46	%		38	%

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

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

(c)	Ratios for the full year 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 management assumptions where data limitations exist.

(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															Year ended
Dollars in millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
INCOME STATEMENT
Net interest income	$	956		$	922		$	921		$	934		$	960		$	3,733		$	3,804
Noninterest income
Corporate service fees		369			346			312			268			277			1,295			1,097
Other		119			118			115			96			152			448			605

Noninterest income		488			464			427			364			429			1,743			1,702

Total revenue		1,444			1,386			1,348			1,298			1,389			5,476			5,506
Provision for credit losses (benefit)		21			(4	)		103			(13	)		(29	)		107			(25	)
Noninterest expense		544			528			504			488			525			2,064			1,999

Pretax earnings		879			862			741			823			893			3,305			3,532
Income taxes		315			313			271			300			324			1,199			1,268

Earnings	$	564		$	549		$	470		$	523		$	569		$	2,106		$	2,264

AVERAGE BALANCE SHEET
Loans
Commercial	$	82,066		$	79,083		$	78,022		$	75,506		$	74,199		$	78,688		$	72,256
Commercial real estate		21,720			21,492			21,234			20,039			18,938			21,127			17,668
Equipment lease financing		6,977			6,922			6,878			6,789			6,749			6,892			6,642

Total commercial lending		110,763			107,497			106,134			102,334			99,886			106,707			96,566
Consumer		1,442			1,203			1,016			1,125			1,032			1,198			947

Total loans		112,205			108,700			107,150			103,459			100,918			107,905			97,513
Goodwill and other intangible assets		3,867			3,806			3,804			3,826			3,841			3,826			3,804
Loans held for sale		1,103			1,092			932			894			893			1,006			1,017
Other assets		10,784			10,073			10,139			9,758			9,746			10,190			10,636

Total assets	$	127,959		$	123,671		$	122,025		$	117,937		$	115,398		$	122,927		$	112,970

Deposits
Noninterest-bearing demand	$	46,769		$	44,730		$	42,521		$	42,772		$	43,482		$	44,210		$	41,514
Money market		22,706			21,821			20,277			20,678			20,579			21,377			18,168
Other		8,883			7,839			7,565			7,531			7,609			7,958			7,124

Total deposits		78,358			74,390			70,363			70,981			71,670			73,545			66,806
Other liabilities		7,833			7,412			7,476			7,476			8,207			7,551			14,465

Total liabilities	$	86,191		$	81,802		$	77,839		$	78,457		$	79,877		$	81,096		$	81,271

PERFORMANCE RATIOS
Return on average assets		1.75	%		1.76	%		1.54	%		1.80	%		1.96	%		1.71	%		2.00	%
Noninterest income to total revenue		34			33			32			28			31			32			31
Efficiency		38			38			37			38			38			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															Year ended
Dollars in millions, except as noted	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
COMMERCIAL MORTGAGE SERVICING PORTFOLIO - SERVICED FOR PNC AND OTHERS (in billions)
Beginning of period	$	322		$	316		$	313		$	308		$	298		$	308		$	282
Acquisitions/additions		34			21			18			23			26			96			83
Repayments/transfers		(20	)		(15	)		(15	)		(18	)		(16	)		(68	)		(57	)

End of period	$	336		$	322		$	316		$	313		$	308		$	336		$	308

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	338		$	326		$	313		$	311		$	309		$	1,288		$	1,260
Capital Markets (d)	$	230		$	212		$	178		$	157		$	220		$	777		$	722
Commercial mortgage loans held for sale (e)	$	42		$	32		$	33		$	19		$	37		$	126		$	133
Commercial mortgage loan servicing income (f)		58			56			53			55			60			222			226
Commercial mortgage servicing rights valuation, net of economic hedge (g)		5			8			14			11			(5	)		38			68

Total commercial mortgage banking activities	$	105		$	96		$	100		$	85		$	92		$	386		$	427
Average Loans (by C&IB business)
Corporate Banking	$	56,746		$	54,678		$	53,633		$	52,253		$	51,689		$	54,341		$	50,620
Real Estate		29,163			28,111			27,642			26,003			24,333			27,740			22,287
Business Credit		13,849			13,481			13,198			12,534			12,182			13,270			11,678
Equipment Finance		10,805			10,582			10,290			10,210			10,095			10,474			9,994
Other		1,642			1,848			2,387			2,459			2,619			2,080			2,934

Total average loans	$	112,205		$	108,700		$	107,150		$	103,459		$	100,918		$	107,905		$	97,513
Total loans (h)	$	113,935		$	109,792		$	108,990		$	105,398		$	101,773		$	113,935		$	101,773
Net carrying amount of commercial mortgage servicing rights (h)	$	506		$	532		$	515		$	529		$	549
Credit-related statistics:
Nonperforming assets (h)	$	557		$	616		$	715		$	786		$	804
Purchased impaired loans (h) (i)	$	246		$	316		$	370		$	428		$	515
Net charge-offs (recoveries)	$	(2	)	$	(7	)	$	15		$	2		$	10		$	8		$	105

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

(b)	Represents consolidated PNC amounts. Our 2014 Form 10-K 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 2014 periods 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															Year ended
Dollars in millions, except as noted	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
INCOME STATEMENT
Net interest income	$	74		$	72		$	72		$	71		$	71		$	289		$	288
Noninterest income		207			205			207			199			198			818			752

Total revenue		281			277			279			270			269			1,107			1,040
Provision for credit losses (benefit)		(3	)		(4	)		(6	)		12			8			(1	)		10
Noninterest expense		211			209			202			199			204			821			774

Pretax earnings		73			72			83			59			57			287			256
Income taxes		28			26			30			22			21			106			94

Earnings	$	45		$	46		$	53		$	37		$	36		$	181		$	162

AVERAGE BALANCE SHEET
Loans
Consumer	$	5,606		$	5,497		$	5,411		$	5,311		$	5,248		$	5,457		$	5,025
Commercial and commercial real estate		954			970			998			1,023			1,057			986			1,047
Residential mortgage		854			822			789			771			778			809			776

Total loans		7,414			7,289			7,198			7,105			7,083			7,252			6,848
Goodwill and other intangible assets		247			255			264			272			281			259			293
Other assets		255			231			223			222			230			234			225

Total assets	$	7,916		$	7,775		$	7,685		$	7,599		$	7,594		$	7,745		$	7,366

Deposits
Noninterest-bearing demand	$	1,436		$	1,362		$	1,327		$	1,338		$	1,442		$	1,366		$	1,311
Interest-bearing demand		4,152			3,857			3,912			3,893			3,547			3,954			3,491
Money market		4,025			4,005			3,857			3,889			3,760			3,944			3,754

Total transaction deposits		9,613			9,224			9,096			9,120			8,749			9,264			8,556
CDs/IRAs/savings deposits		467			463			446			436			427			454			438

Total deposits		10,080			9,687			9,542			9,556			9,176			9,718			8,994
Other liabilities		53			51			48			53			61			51			60

Total liabilities	$	10,133		$	9,738		$	9,590		$	9,609		$	9,237		$	9,769		$	9,054

PERFORMANCE RATIOS
Return on average assets		2.26	%		2.35	%		2.77	%		1.97	%		1.88	%		2.34	%		2.20	%
Noninterest income to total revenue		74			74			74			74			74			74			72
Efficiency		75			75			72			74			76			74			74

OTHER INFORMATION
Total nonperforming assets (b)	$	66		$	73		$	76		$	80		$	75
Purchased impaired loans (b) (c)	$	83		$	89		$	94		$	96		$	99
Total net charge-offs	$	—		$	—		$	2		$	1		$	3		$	3		$	1
CLIENT ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	115		$	113		$	113		$	112		$	111
Institutional		148			146			144			143			136

Total	$	263		$	259		$	257		$	255		$	247

Asset Type
Equity	$	151		$	147		$	149		$	145		$	142
Fixed income		72			72			71			66			70
Liquidity/Other		40			40			37			44			35

Total	$	263		$	259		$	257		$	255		$	247

Discretionary client assets under management
Personal	$	87		$	85		$	85		$	84		$	83
Institutional		48			47			46			46			44

Total	$	135		$	132		$	131		$	130		$	127

Asset Type
Equity	$	75		$	72		$	73		$	71		$	70
Fixed income		40			40			40			34			39
Liquidity/Other		20			20			18			25			18

Total	$	135		$	132		$	131		$	130		$	127

Nondiscretionary client assets under administration
Personal	$	28		$	28		$	28		$	28		$	28
Institutional		100			99			98			97			92

Total	$	128		$	127		$	126		$	125		$	120

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

Total	$	128		$	127		$	126		$	125		$	120

(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															Year ended
Dollars in millions, except as noted	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
INCOME STATEMENT
Net interest income	$	34		$	38		$	37		$	40		$	49		$	149		$	194
Noninterest income
Loan servicing revenue
Servicing fees		54			53			56			61			56			224			174
Mortgage servicing rights valuation, net of economic hedge		1			11			1			(1	)		1			12			121
Loan sales revenue
Benefit / (provision) for residential mortgage repurchase obligations		(4	)		(13	)		(2	)		19			124						53
Loan sales revenue		97			98			137			88			98			420			568
Other					(2	)		(2	)		(1	)		(1	)		(5	)		(10	)

Total noninterest income		148			147			190			166			278			651			906

Total revenue		182			185			227			206			327			800			1,100
Provision for credit losses (benefit)		(1	)		(1	)		1			(1	)		(3	)		(2	)		21
Noninterest expense		196			168			169			213			243			746			845

Pretax earnings (loss)		(13	)		18			57			(6	)		87			56			234
Income taxes (benefit)		(4	)		6			21			(2	)		32			21			86

Earnings (loss)	$	(9	)	$	12		$	36		$	(4	)	$	55		$	35		$	148

AVERAGE BALANCE SHEET
Portfolio loans	$	1,479		$	1,506		$	1,742		$	2,036		$	2,219		$	1,689		$	2,376
Loans held for sale		1,090			1,186			1,135			1,068			1,340			1,120			1,896
Mortgage servicing rights (MSR)		948			1,002			1,035			1,073			1,066			1,014			938
Other assets		4,246			3,724			3,574			4,600			4,458			4,034			4,686

Total assets	$	7,763		$	7,418		$	7,486		$	8,777		$	9,083		$	7,857		$	9,896

Deposits	$	2,302		$	2,415		$	2,318		$	2,100		$	2,388		$	2,285		$	2,920
Borrowings and other liabilities		3,057			2,601			2,403			3,464			3,553			2,879			3,142

Total liabilities	$	5,359		$	5,016		$	4,721		$	5,564		$	5,941		$	5,164		$	6,062

PERFORMANCE RATIOS
Return on average assets		(.46	)%		.64	%		1.93	%		(.18	)%		2.40	%		.45	%		1.50	%
Noninterest income to total revenue		81			79			84			81			85			81			82
Efficiency		108			91			74			103			74			93			77

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO SERVICED FOR THIRD PARTIES (in billions)
Beginning of period	$	111		$	111		$	114		$	114		$	115		$	114		$	119
Acquisitions					2						2			2			4			10
Additions		1			3			2			2			3			8			15
Repayments/transfers		(4	)		(5	)		(5	)		(4	)		(6	)		(18	)		(30	)

End of period	$	108		$	111		$	111		$	114		$	114		$	108		$	114

Servicing portfolio - third-party statistics: (b)
Fixed rate		94	%		94	%		94	%		94	%		93	%
Adjustable rate/balloon		6	%		6	%		6	%		6	%		7	%
Weighted-average interest rate		4.47	%		4.49	%		4.54	%		4.56	%		4.59	%
MSR asset value (in billions)	$	.8		$	1.0		$	1.0		$	1.1		$	1.1
MSR capitalization value (in basis points)		78			88			87			92			95
Weighted-average servicing fee (in basis points)		27			27			27			28			28

RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	108		$	101		$	103		$	131		$	471		$	131		$	614
(Benefit) / Provision		4			13			2			(19	)		(124	)					(53	)
Agency settlements														(191	)					(191	)
Losses - loan repurchases		(5	)		(6	)		(4	)		(9	)		(25	)		(24	)		(239	)

End of period	$	107		$	108		$	101		$	103		$	131		$	107		$	131

OTHER INFORMATION
Loan origination volume (in billions)	$	2.4		$	2.6		$	2.6		$	1.9		$	2.5		$	9.5		$	15.1
Loan sale margin percentage		3.96	%		3.80	%		5.38	%		4.53	%		3.96	%		4.41	%		3.76	%
Percentage of originations represented by:
Purchase volume (c)		42	%		50	%		50	%		37	%		41	%		45	%		30	%
Refinance volume		58	%		50	%		50	%		63	%		59	%		55	%		70	%
Total nonperforming assets (b)	$	120		$	135		$	160		$	173		$	189

(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															Year ended
Dollars in millions	December 31 2014			September 30 2014			June 30 2014			March 31 2014			December 31 2013			December 31 2014			December 31 2013
INCOME STATEMENT
Net interest income	$	122		$	146		$	137		$	142		$	161		$	547		$	689
Noninterest income		18			6			10			6			6			40			53

Total revenue		140			152			147			148			167			587			742
Provision for credit losses (benefit)		(20	)		(8	)		(39	)		(52	)		(59	)		(119	)		(21	)
Noninterest expense		39			30			30			26			39			125			163

Pretax earnings		121			130			156			174			187			581			600
Income taxes		45			48			57			64			69			214			221

Earnings	$	76		$	82		$	99		$	110		$	118		$	367		$	379

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	149		$	164		$	187		$	220		$	246		$	180		$	382
Lease financing		645			689			686			681			678			675			687

Total commercial lending		794			853			873			901			924			855			1,069

Consumer Lending:
Home equity		3,154			3,328			3,483			3,625			3,764			3,396			3,993
Residential real estate		4,399			4,794			4,961			5,104			5,312			4,812			5,613

Total consumer lending		7,553			8,122			8,444			8,729			9,076			8,208			9,606

Total portfolio loans		8,347			8,975			9,317			9,630			10,000			9,063			10,675
Other assets (b)		(678	)		(744	)		(740	)		(741	)		(757	)		(725	)		(688	)

Total assets	$	7,669		$	8,231		$	8,577		$	8,889		$	9,243		$	8,338		$	9,987

Deposits and other liabilities	$	219		$	223		$	227		$	231		$	236		$	225		$	236

Total liabilities	$	219		$	223		$	227		$	231		$	236		$	225		$	236

PERFORMANCE RATIOS
Return on average assets		3.93	%		3.95	%		4.63	%		5.02	%		5.06	%		4.40	%		3.79	%
Noninterest income to total revenue		13			4			7			4			4			7			7
Efficiency		28			20			20			18			23			21			22

OTHER INFORMATION
Nonperforming assets (c)	$	710		$	731		$	798		$	798		$	834
Purchased impaired loans (c) (d)	$	3,943		$	4,147		$	4,497		$	4,654		$	4,797
Net charge-offs (recoveries)	$	12		$	(6	)	$	10		$	31		$	9		$	47		$	172
Annualized net charge-off ratio		.57	%		(.27	)%		.43	%		1.31	%		.36	%		.52	%		1.61	%
LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	130		$	162		$	176		$	201		$	236
Lease financing		625			691			688			683			680

Total commercial lending		755			853			864			884			916

Consumer Lending:
Home equity		3,091			3,242			3,410			3,554			3,692
Residential real estate		4,290			4,665			4,928			5,092			5,267

Total consumer lending		7,381			7,907			8,338			8,646			8,959

Total loans	$	8,136		$	8,760		$	9,202		$	9,530		$	9,875

(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 for a single purchased impaired loan not included within a pool of loans from customers that exceeded the recorded investment of that 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 a single purchased impaired loan not included within a pool of loans includes any cash recoveries on that loan received in excess of the recorded investment.

Purchased impaired loans - Acquired loans (or pools of loans) determined to be credit impaired under FASB ASC 310-30 (AICPA SOP 03-3). Loans (or pools of 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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