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

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EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d81108dex992.htm
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d81108d8k.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2015

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2015

(UNAUDITED)


	Page
Consolidated Results:

Income Statement		1
Balance Sheet		2
Per Share Related Information		3
Capital Ratios		3
Average Balance Sheet		4-5
Details of Net Interest Margin		6
Total and Core Net Interest Income and Net Interest Margin		7
Loans, Loans Held for Sale and Commitments to Extend Credit		8
Allowances for Credit Losses		9
Purchase Accounting Accretion, Accretable Yield and Valuation of Purchased Impaired Loans		10
Nonperforming Assets and Troubled Debt Restructurings		11-12
Accruing Loans Past Due		13

Business Segment Results:

Descriptions		14
Period End Employees		14
Income and Revenue		15
Retail Banking		16-17
Corporate & Institutional Banking		18-19
Asset Management Group		20
Residential Mortgage Banking		21
Non-Strategic Assets Portfolio		22
Glossary of Terms		23-27

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 15, 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 Second Quarter 2015 Financial Supplement (Unaudited)

Financial Supplement Table Reference


Table	Description	Page
1	Consolidated Income Statement		1
2	Consolidated Balance Sheet		2
3	Per Share Related Information		3
4	Capital Ratios		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	Details of Loans		8
12	Details of Loans Held for Sale		8
13	Commitments to Extend Credit		8
14	Change in Allowance for Loan and Lease Losses		9
15	Change in Allowance for Unfunded Loan Commitments and Letters of Credit		9
16	Accretion - Purchased Impaired Loans		10
17	Purchased Impaired Loans - Accretable Yield		10
18	Valuation of Purchased Impaired Loans		10
19	Nonperforming Assets By Type		11
20	Change in Nonperforming Assets		12
21	Largest Individual Nonperforming Assets at June 30, 2015		12
22	Summary of Troubled Debt Restructurings		12
23	Accruing Loans Past Due 30 To 59 Days		13
24	Accruing Loans Past Due 60 To 89 Days		13
25	Accruing Loans Past Due 90 Days or More		13
26	Period End Employees		14
27	Summary of Business Segment Income and Revenue		15
28	Retail Banking		16-17
29	Corporate & Institutional Banking		18-19
30	Asset Management Group		20
31	Residential Mortgage Banking		21
32	Non-Strategic Assets Portfolio		22


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Table 1: Consolidated Income Statement (Unaudited)


	Three months ended															Six months ended
In millions, except per share data	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
Interest Income
Loans	$	1,791		$	1,802		$	1,835		$	1,848		$	1,845		$	3,593		$	3,744
Investment securities		407			406			398			387			412			813			839
Other		107			111			104			93			99			218			183

Total interest income		2,305			2,319			2,337			2,328			2,356			4,624			4,766

Interest Expense
Deposits		98			92			86			81			80			190			158
Borrowed funds		155			155			154			143			147			310			284

Total interest expense		253			247			240			224			227			500			442

Net interest income		2,052			2,072			2,097			2,104			2,129			4,124			4,324

Noninterest Income
Asset management		416			376			376			411			362			792			726
Consumer services		334			311			321			320			323			645			613
Corporate services		369			344			397			374			343			713			644
Residential mortgage		164			164			135			140			182			328			343
Service charges on deposits		156			153			180			179			156			309			303
Net gains (losses) on sales of securities (a)		8			42			—			—			(6	)		50			4
Other		367			269			441			313			321			636			630

Total noninterest income		1,814			1,659			1,850			1,737			1,681			3,473			3,263

Total revenue		3,866			3,731			3,947			3,841			3,810			7,597			7,587
Provision For Credit Losses		46			54			52			55			72			100			166
Noninterest Expense
Personnel		1,200			1,157			1,170			1,189			1,172			2,357			2,252
Occupancy		209			216			216			200			199			425			417
Equipment		231			222			234			220			204			453			405
Marketing		67			62			67			66			68			129			120
Other		659			692			852			682			685			1,351			1,398

Total noninterest expense		2,366			2,349			2,539			2,357			2,328			4,715			4,592

Income before income taxes and noncontrolling interests		1,454			1,328			1,356			1,429			1,410			2,782			2,829
Income taxes		410			324			299			391			358			734			717

Net income		1,044			1,004			1,057			1,038			1,052			2,048			2,112

Less: Net income (loss) attributable to noncontrolling interests		4			1			21			1			3			5			1
Preferred stock dividends and discount accretion and redemptions		48			70			48			71			48			118			118

Net income attributable to common shareholders	$	992		$	933		$	988		$	966		$	1,001		$	1,925		$	1,993

Earnings Per Common Share
Basic	$	1.92		$	1.79		$	1.88		$	1.82		$	1.88		$	3.71		$	3.73
Diluted	$	1.88		$	1.75		$	1.84		$	1.79		$	1.85		$	3.63		$	3.67

Average Common Shares Outstanding
Basic		517			521			524			529			532			519			532
Diluted		525			529			532			537			539			527			539

Efficiency		61	%		63	%		64	%		61	%		61	%		62	%		61	%
Noninterest income to total revenue		47	%		44	%		47	%		45	%		44	%		46	%		43	%
Effective tax rate (b)		28.2	%		24.4	%		22.1	%		27.4	%		25.4	%		26.4	%		25.3	%

(a)	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.

(b)	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	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014
Assets
Cash and due from banks (a)	$	4,412		$	4,151		$	4,360		$	4,164		$	4,892
Federal funds sold and resale agreements (b)		1,971			1,893			1,852			1,761			1,526
Trading securities		2,334			2,151			2,353			2,650			2,228
Interest-earning deposits with banks (a) (c)		33,969			31,198			31,779			26,247			16,876
Loans held for sale (b)		2,357			2,423			2,262			2,143			2,228
Investment securities		61,362			60,768			55,823			55,039			56,602
Loans (a) (b)		205,153			204,722			204,817			200,872			200,984
Allowance for loan and lease losses (a)		(3,272	)		(3,306	)		(3,331	)		(3,406	)		(3,453	)

Net loans		201,881			201,416			201,486			197,466			197,531
Goodwill		9,103			9,103			9,103			9,074			9,074
Mortgage servicing rights		1,558			1,333			1,351			1,510			1,482
Other intangible assets		435			463			493			484			515
Equity investments (a) (d)		10,531			10,523			10,728			10,763			10,583
Other (a) (b)		24,032			25,538			23,482			23,123			23,527

Total assets	$	353,945		$	350,960		$	345,072		$	334,424		$	327,064

Liabilities
Deposits
Noninterest-bearing	$	77,369		$	74,944		$	73,479		$	72,963		$	71,001
Interest-bearing		162,335			161,559			158,755			153,341			151,553

Total deposits		239,704			236,503			232,234			226,304			222,554
Borrowed funds
Federal funds purchased and repurchase agreements		2,190			2,202			3,510			3,499			3,132
Federal Home Loan Bank borrowings		22,193			21,224			20,005			16,471			15,023
Bank notes and senior debt		18,529			16,205			15,750			15,327			14,102
Subordinated debt		9,121			9,228			9,151			9,046			9,099
Commercial paper		2,956			4,399			4,995			4,809			4,999
Other (a) (b)		3,287			3,571			3,357			3,175			2,711

Total borrowed funds		58,276			56,829			56,768			52,327			49,066
Allowance for unfunded loan commitments and letters of credit		246			234			259			251			232
Accrued expenses (a)		5,031			5,039			5,187			5,090			4,753
Other (a)		4,776			5,917			4,550			4,457			4,666

Total liabilities		308,033			304,522			298,998			288,429			281,271

Equity
Preferred stock (e)
Common stock - $5 par value
Authorized 800 shares, issued 542, 541, 541, 540, and 540 shares		2,708			2,706			2,705			2,703			2,703
Capital surplus - preferred stock		3,449			3,948			3,946			3,945			3,944
Capital surplus - common stock and other		12,632			12,561			12,627			12,573			12,506
Retained earnings		27,609			26,882			26,200			25,464			24,755
Accumulated other comprehensive income (loss)		379			703			503			727			881
Common stock held in treasury at cost: 26, 21, 18, 12, and 8 shares		(2,262	)		(1,775	)		(1,430	)		(931	)		(584	)

Total shareholders’ equity		44,515			45,025			44,551			44,481			44,205
Noncontrolling interests		1,397			1,413			1,523			1,514			1,588

Total equity		45,912			46,438			46,074			45,995			45,793

Total liabilities and equity	$	353,945		$	350,960		$	345,072		$	334,424		$	327,064

(a)	Amounts include consolidated variable interest entities. Our first quarter 2015 Form 10-Q included, and our second quarter 2015 Form 10-Q will include, additional information regarding these items.

(b)	Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2015 Form 10-Q included, and our second quarter 2015 Form 10-Q will include, additional information regarding these items.

(c)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $33.6 billion, $30.8 billion, $31.4 billion, $25.9 billion, and $16.5 billion as of June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, respectively.

(d)	Amounts include our equity interest in BlackRock.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Table 3: Per Share Related Information (Unaudited)


	Three months ended										Six months ended
In millions, except per share data	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014		June 30 2015		June 30 2014
Basic
Net income	$	1,044	$	1,004	$	1,057	$	1,038	$	1,052	$	2,048	$	2,112
Less:
Net income (loss) attributable to noncontrolling interests		4		1		21		1		3		5		1
Preferred stock dividends and discount accretion and redemptions		48		70		48		71		48		118		118

Net income attributable to common shareholders		992		933		988		966		1,001		1,925		1,993
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares		—		2		2		3		3		2		6

Net income attributable to basic common shares	$	992	$	931	$	986	$	963	$	998	$	1,923	$	1,987
Basic weighted-average common shares outstanding		517		521		524		529		532		519		532
Basic earnings per common share	$	1.92	$	1.79	$	1.88	$	1.82	$	1.88	$	3.71	$	3.73

Diluted
Net income attributable to basic common shares	$	992	$	931	$	986	$	963	$	998	$	1,923	$	1,987
Less: Impact of BlackRock earnings per share dilution		5		5		5		4		3		10		9

Net income attributable to diluted common shares	$	987	$	926	$	981	$	959	$	995	$	1,913	$	1,978
Basic weighted-average common shares outstanding		517		521		524		529		532		519		532
Dilutive potential common shares		8		8		8		8		7		8		7

Diluted weighted-average common shares outstanding		525		529		532		537		539		527		539
Diluted earnings per common share	$	1.88	$	1.75	$	1.84	$	1.79	$	1.85	$	3.63	$	3.67

Table 4: Capital Ratios (Unaudited)


	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014
Transitional Basel III (a) (b)
Common equity Tier 1		10.6	%		10.5	%		10.9	%		11.1	%		11.0	%
Tier 1 risk-based		12.0			12.0			12.6			12.8			12.7
Total capital risk-based		14.9			15.0			15.8			16.1			16.0
Leverage		10.3			10.5			10.8			11.1			11.2
Common shareholders’ equity to assets		11.6	%		11.7	%		11.8	%		12.1	%		12.3	%

(a)

The ratios as of June 30, 2015 are estimated. See Capital Ratios discussion in the Banking Regulation and Supervision section of Item 1 Business and in the Consolidated Balance Sheet Review section in Item 7 of our 2014 Form 10-K. Our first quarter 2015 Form 10-Q included, and our second quarter 2015 Form 10-Q will include, additional discussion on these capital ratios.

(b)	Calculated using the regulatory capital methodology applicable to PNC during each period presented.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

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


	Three months ended															Six months ended
In millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)	$	20,550		$	19,290		$	17,745		$	18,134		$	19,207		$	19,924		$	19,959
Non-agency		4,480			4,657			4,832			5,021			5,204			4,568			5,290
Commercial mortgage-backed (b)		6,286			6,260			5,799			5,147			5,295			6,273			5,435
Asset-backed		5,228			5,140			5,089			5,207			5,400			5,184			5,496
U.S. Treasury and government agencies		5,204			5,142			5,140			5,142			4,883			5,174			4,528
State and municipal		1,973			1,969			1,935			1,913			2,104			1,971			2,376
Other debt		1,796			1,777			1,780			1,763			2,028			1,786			2,265
Corporate stocks and other		414			457			433			404			362			435			386

Total securities available for sale		45,931			44,692			42,753			42,731			44,483			45,315			45,735
Securities held to maturity
Residential mortgage-backed		8,196			7,035			5,832			5,778			5,977			7,618			5,966
Commercial mortgage-backed		2,005			2,097			2,257			2,409			2,560			2,050			2,674
Asset-backed		743			755			767			874			990			749			997
U.S. Treasury and government agencies		252			249			247			245			242			251			241
State and municipal		2,004			2,018			2,048			2,058			1,732			2,011			1,395
Other		311			320			324			325			331			316			334

Total securities held to maturity		13,511			12,474			11,475			11,689			11,832			12,995			11,607

Total investment securities		59,442			57,166			54,228			54,420			56,315			58,310			57,342
Loans
Commercial		98,364			97,866			95,646			92,547			91,866			98,117			90,698
Commercial real estate		24,812			23,924			23,176			22,961			22,775			24,370			22,217
Equipment lease financing		7,556			7,539			7,621			7,610			7,564			7,547			7,517
Consumer		60,240			61,476			62,213			62,351			62,472			60,855			62,781
Residential real estate		14,416			14,350			14,223			14,359			14,556			14,383			14,701

Total loans		205,388			205,155			202,879			199,828			199,233			205,272			197,914
Interest-earning deposits with banks		32,368			30,405			27,701			22,108			14,650			31,392			13,410
Loans held for sale		2,092			2,246			2,205			2,272			2,060			2,169			2,005
Federal funds sold and resale agreements		1,959			1,655			1,771			1,409			1,184			1,808			1,299
Other		5,470			5,046			5,121			4,914			4,927			5,259			5,111

Total interest-earning assets		306,719			301,673			293,905			284,951			278,369			304,210			277,081
Noninterest-earning assets:
Allowance for loan and lease losses		(3,309	)		(3,317	)		(3,383	)		(3,445	)		(3,512	)		(3,313	)		(3,551	)
Cash and due from banks		3,954			4,067			4,176			3,934			3,776			4,010			3,832
Other		45,276			45,634			44,948			44,005			43,887			45,454			43,687

Total assets	$	352,640		$	348,057		$	339,646		$	329,445		$	322,520		$	350,361		$	321,049

(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 six months ended June 30, 2014, 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										Six months ended
In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014		June 30 2015		June 30 2014
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	81,857	$	79,994	$	77,696	$	76,014	$	74,261	$	80,930	$	74,148
Demand		46,281		46,131		44,389		43,112		43,316		46,207		42,977
Savings		13,775		13,053		12,410		12,152		11,976		13,416		11,694
Retail certificates of deposit		18,334		18,541		18,700		19,317		20,012		18,437		20,274
Time deposits in foreign offices and other time		2,300		2,192		2,754		2,235		2,168		2,246		2,119

Total interest-bearing deposits		162,547		159,911		155,949		152,830		151,733		161,236		151,212
Borrowed funds
Federal funds purchased and repurchase agreements		2,718		3,116		3,339		3,319		3,343		2,916		3,794
Federal Home Loan Bank borrowings		22,001		20,774		16,786		15,328		14,193		21,391		13,649
Bank notes and senior debt		16,408		15,351		15,395		14,221		13,490		15,883		13,409
Subordinated debt		8,861		8,851		8,812		8,804		8,570		8,852		8,307
Commercial paper		3,640		4,986		4,735		4,863		4,917		4,309		4,923
Other		3,537		3,274		3,303		2,801		2,591		3,406		2,665

Total borrowed funds		57,165		56,352		52,370		49,336		47,104		56,757		46,747

Total interest-bearing liabilities		219,712		216,263		208,319		202,166		198,837		217,993		197,959
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		75,299		73,178		73,468		70,993		68,219		74,245		67,951
Allowance for unfunded loan commitments and letters of credit		234		260		251		232		228		246		235
Accrued expenses and other liabilities		11,540		12,326		11,639		10,307		10,035		11,935		10,078
Equity		45,855		46,030		45,969		45,747		45,201		45,942		44,826

Total liabilities and equity	$	352,640	$	348,057	$	339,646	$	329,445	$	322,520	$	350,361	$	321,049


(a) Calculated using average daily balances.

Table 6: Supplemental Average Balance Sheet Information (Unaudited)
Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	162,547	$	159,911	$	155,949	$	152,830	$	151,733	$	161,236	$	151,212
Noninterest-bearing deposits		75,299		73,178		73,468		70,993		68,219		74,245		67,951

Total deposits	$	237,846	$	233,089	$	229,417	$	223,823	$	219,952	$	235,481	$	219,163
Transaction deposits	$	203,437	$	199,303	$	195,553	$	190,119	$	185,796	$	201,382	$	185,076
Common shareholders’ equity	$	40,818	$	40,603	$	40,522	$	40,238	$	39,659	$	40,710	$	39,250


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

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


	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
	2015			2015			2014			2014			2014			2015			2014
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency (b)		2.43	%		2.67	%		2.72	%		2.64	%		2.62	%		2.55	%		2.63	%
Non-agency		4.70			4.51			4.33			4.64			5.19			4.61			5.05
Commercial mortgage-backed (b)		3.03			3.19			3.37			3.61			3.59			3.11			3.54
Asset-backed		2.12			2.08			2.15			2.01			1.96			2.10			1.87
U.S. Treasury and government agencies		1.12			1.27			1.21			1.01			1.20			1.20			1.25
State and municipal		4.76			4.45			4.58			3.98			4.27			4.60			4.56
Other debt		4.01			2.53			3.25			2.41			2.35			3.27			2.38
Corporate stocks and other		.10			.10			.11			.10			.11			.10			.11
Total securities available for sale		2.69			2.75			2.82			2.75			2.84			2.72			2.86
Securities held to maturity
Residential mortgage-backed		2.95			3.26			3.60			3.35			3.55			3.09			3.56
Commercial mortgage-backed		3.63			4.16			4.09			3.99			3.76			3.90			3.90
Asset-backed		1.53			1.52			1.50			1.75			1.54			1.52			1.53
U.S. Treasury and government agencies		3.81			3.77			3.82			3.81			3.80			3.79			3.79
State and municipal		5.49			5.52			5.50			5.50			5.47			5.51			5.52
Other		3.12			2.89			3.02			2.84			2.87			3.00			2.94
Total securities held to maturity		3.37			3.67			3.88			3.73			3.69			3.51			3.69
Total investment securities		2.85			2.95			3.05			2.96			3.02			2.90			3.02
Loans
Commercial		3.00			2.98			3.04			3.17			3.24			2.99			3.37
Commercial real estate		3.44			3.80			3.88			3.90			4.04			3.61			4.12
Equipment lease financing		3.45			3.47			3.97			3.48			3.61			3.46			3.62
Consumer		4.13			4.21			4.11			4.16			4.16			4.17			4.21
Residential real estate		4.91			4.88			4.90			5.03			4.86			4.89			4.98
Total loans		3.54			3.59			3.63			3.71			3.75			3.56			3.85
Interest-earning deposits with banks		.25			.25			.29			.23			.27			.25			.25
Loans held for sale		4.33			4.20			4.67			4.48			4.79			4.26			4.75
Federal funds sold and resale agreements		.22			.22			.28			.38			.49			.22			.40
Other		4.65			5.43			4.56			4.24			5.26			5.03			4.62
Total yield on interest-earning assets		3.06			3.15			3.21			3.30			3.44			3.10			3.51
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.27			.24			.20			.18			.18			.25			.18
Demand		.05			.06			.06			.05			.05			.05			.05
Savings		.17			.15			.14			.12			.10			.16			.09
Retail certificates of deposit		.68			.71			.72			.73			.74			.69			.75
Time deposits in foreign offices and other time		.16			.19			.20			.18			.17			.18			.17
Total interest-bearing deposits		.24			.23			.22			.21			.21			.24			.21
Borrowed funds
Federal funds purchased and repurchase agreements		.14			.12			.11			.08			.07			.13			.09
Federal Home Loan Bank borrowings		.46			.45			.46			.48			.50			.46			.50
Bank notes and senior debt		1.19			1.36			1.35			1.33			1.51			1.27			1.50
Subordinated debt		2.61			2.64			2.64			2.40			2.65			2.62			2.59
Commercial paper		.35			.34			.31			.30			.29			.34			.28
Other		1.95			1.99			2.25			2.62			2.60			1.97			2.40
Total borrowed funds		1.07			1.10			1.17			1.14			1.24			1.09			1.21
Total rate on interest-bearing liabilities		.46			.46			.45			.44			.45			.45			.45

Interest rate spread		2.60			2.69			2.76			2.86			2.99			2.65			3.06
Impact of noninterest-bearing sources (c)		.13			.13			.13			.12			.13			.13			.13

Net interest margin		2.73	%		2.82	%		2.89	%		2.98	%		3.12	%		2.78	%		3.19	%

(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 June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014 and June 30, 2014, were $49 million, $49 million, $49 million, $47 million and $47 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2015 and June 30, 2014 were $98 million and $93 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 six months ended June 30, 2014.

(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										Six months ended
In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014		June 30 2015		June 30 2014
Core net interest income (a)	$	1,941	$	1,944	$	1,971	$	1,957	$	1,982	$	3,885	$	4,014
Total purchase accounting accretion (b)		111		128		126		147		147		239		310

Total net interest income	$	2,052	$	2,072	$	2,097	$	2,104	$	2,129	$	4,124	$	4,324

(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 16: Accretion - Purchased Impaired Loans for details for certain of these periods.

Table 9: Details of Net Interest Margin (c)


	Three months ended															Six months ended
In millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.85	%		2.95	%		3.05	%		2.96	%		3.02	%		2.90	%		3.02	%
Total loans		3.54			3.59			3.63			3.71			3.75			3.56			3.85
Other		1.03			1.14			1.15			1.19			1.76			1.08			1.69
Total yield on interest-earning assets		3.06			3.15			3.21			3.30			3.44			3.10			3.51

Rate on interest-bearing liabilities
Total interest-bearing deposits		.24			.23			.22			.21			.21			.24			.21
Total borrowed funds		1.07			1.10			1.17			1.14			1.24			1.09			1.21
Total rate on interest-bearing liabilities		.46			.46			.45			.44			.45			.45			.45

Interest rate spread		2.60			2.69			2.76			2.86			2.99			2.65			3.06
Impact of noninterest-bearing sources		.13			.13			.13			.12			.13			.13			.13

Net interest margin		2.73	%		2.82	%		2.89	%		2.98	%		3.12	%		2.78	%		3.19	%

(c) See note (a) on page 6.

Table 10: Details of Core Net Interest Margin (d)


	Three months ended															Six months ended
In millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.78	%		2.89	%		2.98	%		2.89	%		2.96	%		2.83	%		2.96	%
Total loans		3.32			3.33			3.38			3.42			3.46			3.32			3.54
Other		1.03			1.13			1.14			1.19			1.74			1.08			1.69
Total yield on interest-earning assets		2.90			2.96			3.02			3.08			3.22			2.93			3.27

Rate on interest-bearing liabilities
Total interest-bearing deposits		.25			.24			.23			.23			.23			.25			.23
Total borrowed funds		.96			.99			1.03			1.00			1.10			.98			1.07
Total rate on interest-bearing liabilities		.44			.44			.43			.42			.43			.43			.43

Interest rate spread		2.46			2.52			2.59			2.66			2.79			2.50			2.84
Impact of noninterest-bearing sources		.13			.13			.13			.12			.13			.13			.13

Core net interest margin		2.59			2.65			2.72			2.78			2.92			2.63			2.97
Purchase accounting accretion impact on net interest margin		.14			.17			.17			.20			.20			.15			.22

Net interest margin		2.73	%		2.82	%		2.89	%		2.98	%		3.12	%		2.78	%		3.19	%

(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: Details of Loans (Unaudited)


In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014
Commercial
Retail/wholesale trade	$	17,162	$	17,126	$	16,972	$	16,162	$	16,146
Manufacturing		19,775		20,057		18,744		18,649		18,683
Service providers		14,054		13,916		14,103		13,603		13,734
Real estate related (a)		10,931		10,744		10,812		10,722		10,908
Financial services		5,966		6,306		6,178		5,218		4,846
Health care		9,396		9,192		9,017		9,095		8,939
Other industries		20,849		20,309		21,594		20,051		20,280

Total commercial		98,133		97,650		97,420		93,500		93,536

Commercial real estate
Real estate projects (b)		15,142		15,057		14,577		14,564		14,535
Commercial mortgage		9,664		9,498		8,685		8,378		8,384

Total commercial real estate		24,806		24,555		23,262		22,942		22,919

Equipment lease financing		7,783		7,470		7,686		7,621		7,628

Total commercial lending		130,722		129,675		128,368		124,063		124,083

Consumer
Home equity
Lines of credit		19,589		19,918		20,361		20,667		20,959
Installment		13,946		14,147		14,316		14,388		14,507
Credit card		4,520		4,434		4,612		4,449		4,435
Other consumer
Education		6,212		6,448		6,626		6,978		7,118
Automobile		11,057		11,120		11,616		11,548		11,005
Other		4,575		4,491		4,511		4,428		4,317

Total consumer		59,899		60,558		62,042		62,458		62,341

Residential real estate
Residential mortgage		14,041		13,982		13,885		13,805		13,965
Residential construction		491		507		522		546		595

Total residential real estate		14,532		14,489		14,407		14,351		14,560

Total consumer lending		74,431		75,047		76,449		76,809		76,901

Total loans (c)	$	205,153	$	204,722	$	204,817	$	200,872	$	200,984

(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:	$	4,465	$	4,675	$	4,858	$	5,167	$	5,557
Table 12: Details of Loans Held for Sale (Unaudited)
In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014
Commercial mortgage	$	784	$	1,037	$	922	$	891	$	900
Residential mortgage		1,369		1,249		1,279		1,211		1,271
Other		204		137		61		41		57

Total	$	2,357	$	2,423	$	2,262	$	2,143	$	2,228

Table 13: Commitments to Extend Credit (Unaudited)
In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014
Commitments to extend credit (a)	$	138,242	$	137,960	$	139,687	$	136,795	$	131,446

(a)	Commitments to extend credit, or net unfunded loan commitments, represent arrangements to lend funds or provide liquidity subject to specified contractual conditions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

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

Table 14: Change in Allowance for Loan and Lease Losses


Three months ended - in millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014
Beginning balance	$	3,306		$	3,331		$	3,406		$	3,453		$	3,530
Gross charge-offs:
Commercial		(48	)		(34	)		(45	)		(60	)		(86	)
Commercial real estate		(13	)		(12	)		(24	)		(14	)		(14	)
Equipment lease financing		(1	)					(5	)		(3	)		(4	)
Home equity		(50	)		(52	)		(62	)		(50	)		(68	)
Residential real estate		(6	)					(14	)		(11	)		(7	)
Credit card		(41	)		(43	)		(38	)		(40	)		(42	)
Other consumer		(44	)		(48	)		(47	)		(44	)		(43	)

Total gross charge-offs		(203	)		(189	)		(235	)		(222	)		(264	)
Recoveries:
Commercial		65			32			51			62			43
Commercial real estate		23			12			20			15			29
Equipment lease financing		1			1			4			4			3
Home equity		24			20			20			19			20
Residential real estate		4			2			3			21			3
Credit card		6			5			5			5			6
Other consumer		13			14			14			14			15

Total recoveries		136			86			117			140			119
Net (charge-offs) recoveries:
Commercial		17			(2	)		6			2			(43	)
Commercial real estate		10						(4	)		1			15
Equipment lease financing		—			1			(1	)		1			(1	)
Home equity		(26	)		(32	)		(42	)		(31	)		(48	)
Residential real estate		(2	)		2			(11	)		10			(4	)
Credit card		(35	)		(38	)		(33	)		(35	)		(36	)
Other consumer		(31	)		(34	)		(33	)		(30	)		(28	)

Total net charge-offs		(67	)		(103	)		(118	)		(82	)		(145	)
Provision for credit losses		46			54			52			55			72
Other		(1	)		(1	)		(1	)		(1	)
Net change in allowance for unfunded loan commitments and letters of credit		(12	)		25			(8	)		(19	)		(4	)

Ending balance	$	3,272		$	3,306		$	3,331		$	3,406		$	3,453

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.13	%		.20	%		.23	%		.16	%		.29	%
Allowance for loan and lease losses to total loans		1.59			1.61			1.63			1.70			1.72
Commercial lending net charge-offs	$	27		$	(1	)	$	1		$	4		$	(29	)
Consumer lending net charge-offs		(94	)		(102	)		(119	)		(86	)		(116	)

Total net charge-offs	$	(67	)	$	(103	)	$	(118	)	$	(82	)	$	(145	)
Net charge-offs to average loans
Commercial lending		(.08	)%		.00	%		.00	%		(.01	)%		.10	%
Consumer lending		.51			.55			.62			.44			.60

Table 15: Change in Allowance for Unfunded Loan Commitments and Letters of Credit


Three months ended - in millions	June 30 2015		March 31 2015			December 31 2014		September 30 2014		June 30 2014
Beginning balance	$	234	$	259		$	251	$	232	$	228
Net change in allowance for unfunded loan commitments and letters of credit		12		(25	)		8		19		4

Ending balance	$	246	$	234		$	259	$	251	$	232


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

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

Table 16: Accretion - Purchased Impaired Loans


	Three months ended									Six months ended
	June 30			March 31			June 30			June 30			June 30
In millions	2015			2015			2014			2015			2014
Impaired loans
Scheduled accretion	$	92		$	99		$	120		$	191		$	245
Reversal of contractual interest on impaired loans		(52	)		(55	)		(70	)		(107	)		(138	)

Scheduled accretion net of contractual interest		40			44			50			84			107
Excess cash recoveries (a)		28			33			35			61			64

Total impaired loans	$	68		$	77		$	85		$	145		$	171

(a)	Relates to excess cash recoveries for purchased impaired commercial loans.

Table 17: Purchased Impaired Loans - Accretable Yield


In millions
April 1, 2015	$	1,484		January 1, 2015	$	1,558
Scheduled accretion		(92	)	Scheduled accretion		(191	)
Excess cash recoveries		(28	)	Excess cash recoveries		(61	)
Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		79		Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		137

June 30, 2015 (b)	$	1,443		June 30, 2015 (b)	$	1,443

(a)

56% and 70% of the net reclassification for the second quarter and first six months of 2015, respectively, were driven by the consumer portfolio and were due to improvements of cash expected to be collected on loans in future periods. The remaining net reclassifications were predominantly due to future cash flow changes in the commercial portfolio.

(b)	As of June 30, 2015, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $0.8 billion in future periods. This will offset the total net accretable interest in future interest income of $1.4 billion on purchased impaired loans.

Table 18: Valuation of Purchased Impaired Loans


	June 30, 2015						March 31, 2015						December 31, 2014
Dollars in millions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Outstanding balance (a)	$	346					$	398					$	466
Recorded investment		235						276						310
Allowance for loan losses		(67	)					(80	)					(79	)

Net investment/Carrying value		168			49	%		196			49	%		231			50	%


Consumer and residential mortgage loans:
Outstanding balance (a)		4,136						4,343						4,541
Recorded investment		4,230						4,399						4,548
Allowance for loan losses		(788	)					(781	)					(793	)

Net investment/Carrying value		3,442			83	%		3,618			83	%		3,755			83	%

Total purchased impaired loans:

Outstanding balance (a)		4,482						4,741						5,007
Recorded investment		4,465						4,675						4,858
Allowance for loan losses		(855	)					(861	)					(872	)

Net investment/Carrying value	$	3,610			81	%	$	3,814			80	%	$	3,986			80	%

(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 2014 Form 10-K and first quarter 2015 Form 10-Q included, and our second quarter 2015 Form 10-Q will include, additional information on purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Details of Nonperforming Assets (Unaudited)

Table 19: Nonperforming Assets by Type


In millions	June 30 2015			March 31 2014			December 31 2014			September 30 2014			June 30 2014
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	43		$	46		$	48		$	62		$	70
Manufacturing		55			59			59			44			69
Service providers		50			63			67			82			94
Real estate related (b)		46			66			66			76			79
Financial services		2			1			4			5			5
Health care		28			28			28			23			23
Other industries		34			17			18			28			54

Total commercial		258			280			290			320			394

Commercial real estate
Real estate projects		211			257			290			346			370
Commercial mortgage		31			36			44			49			65

Total commercial real estate		242			293			334			395			435

Equipment lease financing		3			2			2			3			4

Total commercial lending		503			575			626			718			833

Consumer lending (c)
Home equity		1,057			1,101			1,112			1,090			1,093
Residential real estate
Residential mortgage		623			653			694			725			799
Residential construction		10			12			12			18			17
Credit card		3			3			3			3			3
Other consumer		56			61			63			58			56

Total consumer lending		1,749			1,830			1,884			1,894			1,968

Total nonperforming loans (d)		2,252			2,405			2,510			2,612			2,801

OREO and foreclosed assets
Other real estate owned (OREO)		302			331			351			353			352
Foreclosed and other assets		24			18			19			10			15

Total OREO and foreclosed assets (e)		326			349			370			363			367

Total nonperforming assets	$	2,578		$	2,754		$	2,880		$	2,975		$	3,168

Nonperforming loans to total loans		1.10	%		1.17	%		1.23	%		1.30	%		1.39	%
Nonperforming assets to total loans, OREO and foreclosed assets		1.25			1.34			1.40			1.48			1.57
Nonperforming assets to total assets		.73			.78			.83			.89			.97
Allowance for loan and lease losses to nonperforming loans (f)		145			137			133			130			123

(a)	See analysis of troubled debt restructurings (TDRs) on page 12.

(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)

The recorded investment of loans collateralized by residential real estate property that are in process of foreclosure was $.6 billion, $.7 billion, $.8 billion, $.7 billion and $.9 billion at June 30, 2015, March 31, 2015, December 31, 2014, September 30, 2014, and June 30, 2014, which included $.4 billion, $.5 billion, $.5 billion, $.5 billion and $.6 billion, respectively, of loans that are government insured/guaranteed.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Table 20: Change in Nonperforming Assets


In millions	April 1, 2015 - June 30, 2015			January 1, 2015 - March 31, 2015			October 1, 2014 - December 31, 2014			July 1, 2014 - September 30, 2014			April 1, 2014 - June 30, 2014
Beginning balance	$	2,754		$	2,880		$	2,975		$	3,168		$	3,304
New nonperforming assets		372			336			470			380			644
Charge-offs and valuation adjustments		(129	)		(124	)		(158	)		(127	)		(148	)
Principal activity, including paydowns and payoffs		(207	)		(170	)		(183	)		(195	)		(300	)
Asset sales and transfers to loans held for sale		(97	)		(93	)		(130	)		(143	)		(212	)
Returned to performing status		(115	)		(75	)		(94	)		(108	)		(120	)

Ending balance	$	2,578		$	2,754		$	2,880		$	2,975		$	3,168

Table 21: Largest Individual Nonperforming Assets at June 30, 2015 (a)


In millions
Ranking	Outstandings		Industry
1	$	34	Real Estate, Rental and Leasing
2		17	Construction
3		15	Construction
4		13	Manufacturing
5		13	Manufacturing
6		7	OREO
7		7	OREO
8		7	Retail Trade
9		7	Health Care and Social Assistance
10		6	OREO

Total	$	126

As a percent of total nonperforming assets 5%

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

Table 22: Summary of Troubled Debt Restructurings


In millions	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014
Total consumer lending	$	2,002	$	2,020	$	2,041	$	2,064	$	2,121
Total commercial lending		414		510		542		552		546

Total TDRs	$	2,416	$	2,530	$	2,583	$	2,616	$	2,667

Nonperforming	$	1,208	$	1,317	$	1,370	$	1,303	$	1,369
Accruing (a)		1,091		1,089		1,083		1,174		1,153
Credit card		117		124		130		139		145

Total TDRs	$	2,416	$	2,530	$	2,583	$	2,616	$	2,667

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 13

Accruing Loans Past Due (Unaudited)

Table 23: Accruing Loans Past Due 30 to 59 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014			Jun. 30 2014
Commercial	$	83	$	73	$	73	$	46	$	71		.08	%		.07	%		.07	%		.05	%		.08	%
Commercial real estate		5		24		23		47		17		.02			.10			.10			.20			.07
Equipment lease financing		2		16		11		4		4		.03			.21			.14			.05			.05
Home equity		65		61		70		67		65		.19			.18			.20			.19			.18
Residential real estate
Non government insured		78		72		95		87		87		.54			.50			.66			.61			.60
Government insured		64		70		68		76		74		.44			.48			.47			.53			.51
Credit card		23		25		28		27		26		.51			.56			.61			.61			.59
Other consumer
Non government insured		51		52		62		56		50		.23			.24			.27			.24			.22
Government insured		121		126		152		164		154		.55			.57			.67			.71			.69

Total	$	492	$	519	$	582	$	574	$	548		.24			.25			.28			.29			.27

Table 24: Accruing Loans Past Due 60 to 89 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014			Jun. 30 2014
Commercial	$	32	$	20	$	24	$	19	$	26		.03	%		.02	%		.02	%		.02	%		.03	%
Commercial real estate		5		23		2		6		48		.02			.09			.01			.03			.21
Equipment lease financing						1		1		1								.01			.01			.01
Home equity		25		30		32		25		27		.07			.09			.09			.07			.08
Residential real estate
Non government insured		20		18		25		24		21		.14			.12			.17			.17			.14
Government insured		38		35		43		41		48		.26			.24			.30			.29			.33
Credit card		17		17		20		18		18		.38			.38			.43			.41			.41
Other consumer
Non government insured		17		18		19		20		15		.08			.08			.08			.09			.07
Government insured		81		82		93		100		94		.37			.37			.41			.44			.42

Total	$	235	$	243	$	259	$	254	$	298		.11			.12			.13			.13			.15

Table 25: Accruing Loans Past Due 90 Days or More (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Jun. 30 2014		Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014			Jun. 30 2014
Commercial	$	35	$	35	$	37	$	39	$	35		.04	%		.04	%		.04	%		.04	%		.04	%
Commercial real estate		1						1				.00									.00
Residential real estate
Non government insured		19		26		23		24		23		.13			.18			.16			.17			.16
Government insured		585		634		719		785		872		4.03			4.38			4.99			5.47			5.99
Credit card		29		32		33		29		29		.64			.72			.72			.65			.65
Other consumer
Non government insured		13		17		16		13		12		.06			.08			.07			.06			.05
Government insured		232		244		277		287		281		1.06			1.11			1.22			1.25			1.25

Total	$	914	$	988	$	1,105	$	1,178	$	1,252		.45			.48			.54			.59			.62

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

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, Virginia, Alabama, 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, mergers and acquisitions advisory, equity capital markets advisory and related services. 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. Hawthorn provides multi-generational family planning including wealth strategy, investment management, private banking, tax and estate planning guidance, performance reporting and personal administration services to ultra high net worth 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 either sold, servicing retained, or held on PNC’s balance sheet. Loan sales are primarily 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, in which we hold an equity investment, is a leading publicly traded investment management firm providing a broad range of investment and risk management services to institutional and retail clients worldwide. Using a diverse platform of active and index investment strategies across asset classes, BlackRock develops investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments. BlackRock also offers an investment and risk management technology platform, risk analytics and advisory services and solutions to a broad base of institutional investors. We hold our equity investment in BlackRock as 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 June 30, 2015, our economic interest in BlackRock was 22%.

Table 26: Period End Employees


	June 30 2015		March 31 2015		December 31 2014		September 30 2014		June 30 2014
Full-time employees
Retail Banking		22,117		22,063		22,216		22,103		22,148
Other full-time employees (a)		27,659		27,696		27,529		27,528		27,765

Total full-time employees		49,776		49,759		49,745		49,631		49,913

Part-time employees
Retail Banking		3,112		3,150		3,274		3,410		3,644
Other part-time employees (a)		821		563		568		614		802

Total part-time employees		3,933		3,713		3,842		4,024		4,446

Total		53,709		53,472		53,587		53,655		54,359

(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 15

Table 27: Summary of Business Segment Income and Revenue (Unaudited) (a) (b)


	Three months ended											Six months ended
In millions	June 30 2015		March 31 2015		December 31 2014			September 30 2014		June 30 2014		June 30 2015		June 30 2014
Income (Loss)
Retail Banking	$	241	$	202	$	172		$	173	$	225	$	443	$	383
Corporate & Institutional Banking		508		482		564			549		470		990		993
Asset Management Group		62		37		45			46		53		99		90
Residential Mortgage Banking		19		28		(9	)		12		36		47		32
Non-Strategic Assets Portfolio		56		81		76			82		99		137		209
Other, including BlackRock (b) (c)		158		174		209			176		169		332		405

Net income	$	1,044	$	1,004	$	1,057		$	1,038	$	1,052	$	2,048	$	2,112

Revenue
Retail Banking	$	1,635	$	1,526	$	1,520		$	1,521	$	1,514	$	3,161	$	3,008
Corporate & Institutional Banking		1,363		1,284		1,444			1,386		1,348		2,647		2,646
Asset Management Group		314		281		281			277		279		595		549
Residential Mortgage Banking		206		207		182			185		227		413		433
Non-Strategic Assets Portfolio		109		121		140			152		147		230		295
Other, including BlackRock (b) (c)		239		312		380			320		295		551		656

Total revenue	$	3,866	$	3,731	$	3,947		$	3,841	$	3,810	$	7,597	$	7,587

(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. Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors. In the first quarter of 2015, enhancements were made to PNC’s funds transfer pricing methodology primarily for costs related to the new regulatory short-term liquidity standards. The enhancements incorporate an additional charge assigned to assets, including for unfunded loan commitments. Conversely, a higher transfer pricing credit has been assigned to those deposits that are accorded higher value under the regulatory rules for liquidity purposes. These adjustments apply to business segment results, predominantly in Retail Banking and Corporate & Institutional Banking, prospectively beginning with the first quarter of 2015. Prior periods have not been adjusted due to the impracticability of estimating the impact of the change for prior periods.

(b)	We consider BlackRock to be a separate reportable business segment but have combined its results with Other for this presentation. Our second quarter 2015 Form 10-Q will include additional information regarding BlackRock.

(c)

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 16

Table 28: Retail Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
INCOME STATEMENT
Net interest income	$	1,045		$	1,038		$	986		$	985		$	973		$	2,083		$	1,953
Noninterest income
Service charges on deposits		148			146			172			173			148			294			288
Brokerage		71			67			64			60			61			138			116
Consumer services		254			233			247			248			248			487			466
Other		117			42			51			55			84			159			185

Total noninterest income		590			488			534			536			541			1,078			1,055

Total revenue		1,635			1,526			1,520			1,521			1,514			3,161			3,008
Provision for credit losses		45			49			54			74			4			94			149
Noninterest expense		1,210			1,158			1,195			1,175			1,155			2,368			2,255

Pretax earnings		380			319			271			272			355			699			604
Income taxes		139			117			99			99			130			256			221

Earnings	$	241		$	202		$	172		$	173		$	225		$	443		$	383

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	27,775		$	28,152		$	28,457		$	28,684		$	28,959		$	27,964		$	29,137
Indirect auto		9,287			9,287			9,209			9,192			9,092			9,287			9,043
Indirect other		561			603			635			675			726			580			751
Education		6,387			6,626			6,895			7,100			7,298			6,506			7,422
Credit cards		4,447			4,444			4,475			4,401			4,307			4,446			4,289
Other		2,373			2,347			2,345			2,277			2,189			2,360			2,164

Total consumer		50,830			51,459			52,016			52,329			52,571			51,143			52,806
Commercial and commercial real estate		10,571			10,654			10,698			10,801			10,922			10,612			10,986
Floor plan		2,188			2,213			2,180			2,021			2,291			2,200			2,332
Residential mortgage		726			734			552			584			623			731			635

Total loans		64,315			65,060			65,446			65,735			66,407			64,686			66,759
Goodwill and other intangible assets		5,975			5,990			6,007			6,025			6,043			5,983			6,052
Other assets		3,079			2,967			2,946			2,922			2,753			3,022			2,748

Total assets	$	73,369		$	74,017		$	74,399		$	74,682		$	75,203		$	73,691		$	75,559

Deposits
Noninterest-bearing demand	$	23,434		$	22,591		$	22,860		$	22,392		$	21,907		$	23,015		$	21,634
Interest-bearing demand		36,454			35,650			34,298			33,900			34,272			36,054			33,883
Money market		55,026			53,105			51,204			50,204			50,142			54,071			49,815

Total transaction deposits		114,914			111,346			108,362			106,496			106,321			113,140			105,332
Savings		13,599			12,888			12,244			11,997			11,845			13,245			11,568
Certificates of deposit		16,749			17,318			17,959			18,720			19,354			17,032			19,617

Total deposits		145,262			141,552			138,565			137,213			137,520			143,417			136,517
Other liabilities		588			617			555			507			411			603			405

Total liabilities	$	145,850		$	142,169		$	139,120		$	137,720		$	137,931		$	144,020		$	136,922

PERFORMANCE RATIOS
Return on average assets		1.32	%		1.11	%		.92	%		.92	%		1.20	%		1.21	%		1.02	%
Noninterest income to total revenue		36			32			35			35			36			34			35
Efficiency		74			76			79			77			76			75			75

(a)	See note (a) on page 15.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Table 28: Retail Banking (Unaudited) (Continued)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
OTHER INFORMATION (a)
Credit-related statistics:
Commercial nonperforming assets	$	126		$	131		$	139		$	146		$	158
Consumer nonperforming assets		1,001			1,043			1,059			1,037			1,037

Total nonperforming assets	$	1,127		$	1,174		$	1,198		$	1,183		$	1,195

Purchased impaired loans (b)	$	531		$	553		$	575		$	600		$	631

Commercial lending net charge-offs (recoveries)	$	1		$	1		$	(2	)	$	2		$	11		$	2		$	31
Credit card lending net charge-offs		35			38			33			35			37			73			74
Consumer lending (excluding credit card) net charge-offs		50			60			73			56			68			110			156

Total net charge-offs	$	86		$	99		$	104		$	93		$	116		$	185		$	261

Commercial lending annualized net charge-off ratio		.02	%		.03	%		(.06	)%		.06	%		.33	%		.03	%		.47	%
Credit card lending annualized net charge-off ratio		3.15	%		3.47	%		2.93	%		3.16	%		3.45	%		3.29	%		3.48	%
Consumer lending (excluding credit card) annualized net charge-off ratio		.43	%		.51	%		.60	%		.46	%		.56	%		.47	%		.64	%

Total annualized net charge-off ratio		.53	%		.62	%		.63	%		.56	%		.70	%		.58	%		.79	%

Home equity portfolio credit statistics: (c)
% of first lien positions at origination (d)		55	%		54	%		54	%		53	%		53	%
Weighted-average loan-to-value ratios (LTVs) (d) (e)		76	%		76	%		77	%		78	%		79	%
Weighted-average updated FICO scores (f)		751			748			748			747			748
Annualized net charge-off ratio		.34	%		.42	%		.52	%		.35	%		.54	%		.38	%		.65	%
Delinquency data - % of total loans: (g)
Loans 30 - 59 days past due		.20	%		.18	%		.20	%		.19	%		.19	%
Loans 60 - 89 days past due		.08	%		.09	%		.09	%		.07	%		.07	%

Accruing loans past due		.28	%		.27	%		.29	%		.26	%		.26	%

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

Other statistics:
ATMs		8,880			8,754			8,605			8,178			7,977
Branches (h)		2,644			2,660			2,697			2,691			2,695
Brokerage account client assets (billions) (i)	$	44		$	44		$	43		$	43		$	43

Customer-related statistics (average):
Non-teller deposit transactions (j)		42	%		40	%		38	%		36	%		33	%		41	%		32	%
Digital consumer customers (k)		52	%		50	%		49	%		47	%		45	%		51	%		44	%

(a)	Presented as of period end, except for net charge-offs and annualized net charge-off ratios, which are for the three months and six months ended, respectively, and customer-related statistics which are averages for the quarterly and year-to-date periods, respectively.

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

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

(d)	Lien positions and LTV calculations reflect management assumptions where data limitations exist.

(e)	LTV statistics are based upon current information.

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

(g)	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.

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

(i)	Amounts include cash and money market balances.

(j)	Percentage of total consumer and business banking 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 18

Table 29: Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
INCOME STATEMENT
Net interest income	$	871		$	855		$	956		$	922		$	921		$	1,726		$	1,855
Noninterest income
Corporate service fees		341			310			369			346			312			651			580
Other		151			119			119			118			115			270			211

Noninterest income		492			429			488			464			427			921			791

Total revenue		1,363			1,284			1,444			1,386			1,348			2,647			2,646
Provision for credit losses (benefit)		20			17			21			(4	)		103			37			90
Noninterest expense		547			514			544			528			504			1,061			992

Pretax earnings		796			753			879			862			741			1,549			1,564
Income taxes		288			271			315			313			271			559			571

Earnings	$	508		$	482		$	564		$	549		$	470		$	990		$	993

AVERAGE BALANCE SHEET
Loans
Commercial	$	85,739		$	84,712		$	82,066		$	79,083		$	78,022		$	85,228		$	76,771
Commercial real estate		22,545			22,090			21,720			21,492			21,234			22,319			20,640
Equipment lease financing		6,927			6,914			6,977			6,922			6,878			6,920			6,834

Total commercial lending		115,211			113,716			110,763			107,497			106,134			114,467			104,245
Consumer		875			1,352			1,442			1,203			1,016			1,113			1,070

Total loans		116,086			115,068			112,205			108,700			107,150			115,580			105,315
Goodwill and other intangible assets		3,845			3,835			3,867			3,806			3,804			3,840			3,815
Loans held for sale		990			1,106			1,103			1,092			932			1,048			913
Other assets		11,318			11,169			10,784			10,073			10,139			11,243			9,949

Total assets	$	132,239		$	131,178		$	127,959		$	123,671		$	122,025		$	131,711		$	119,992

Deposits
Noninterest-bearing demand	$	47,916		$	46,976		$	46,769		$	44,730		$	42,521		$	47,449		$	42,646
Money market		21,722			22,286			22,706			21,821			20,277			22,002			20,476
Other		9,396			9,340			8,883			7,839			7,565			9,368			7,548

Total deposits		79,034			78,602			78,358			74,390			70,363			78,819			70,670
Other liabilities		7,897			8,271			7,833			7,412			7,476			8,083			7,477

Total liabilities	$	86,931		$	86,873		$	86,191		$	81,802		$	77,839		$	86,902		$	78,147

PERFORMANCE RATIOS
Return on average assets		1.54	%		1.49	%		1.75	%		1.76	%		1.54	%		1.52	%		1.67	%
Noninterest income to total revenue		36			33			34			33			32			35			30
Efficiency		40			40			38			38			37			40			37

(a)	See note (a) on page 15.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Table 29: Corporate & Institutional Banking (Unaudited) (Continued) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
COMMERCIAL LOAN SERVICING PORTFOLIO - SERVICED FOR PNC AND OTHERS (in billions)
Beginning of period	$	390		$	377		$	363		$	353		$	351		$	377		$	347
Acquisitions/additions		67			29			35			25			17			96			39
Repayments/transfers		(21	)		(16	)		(21	)		(15	)		(15	)		(37	)		(33	)

End of period	$	436		$	390		$	377		$	363		$	353		$	436		$	353

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	334		$	319		$	338		$	326		$	313		$	653		$	624
Capital Markets (c)	$	205		$	180		$	230		$	212		$	178		$	385		$	335
Commercial mortgage banking activities
Commercial mortgage loans held for sale (d)	$	47		$	26		$	42		$	32		$	33		$	73		$	52
Commercial mortgage loan servicing income (e)		65			56			58			56			53			121			108
Commercial mortgage servicing rights valuation, net of economic hedge (f)		8			16			5			8			14			24			25

Total	$	120		$	98		$	105		$	96		$	100		$	218		$	185
Average Loans (by C&IB business)
Corporate Banking	$	58,419		$	58,227		$	56,746		$	54,678		$	53,633		$	58,323		$	52,947
Real Estate		30,574			29,918			29,163			28,111			27,642			30,248			26,827
Business Credit		14,610			14,217			13,849			13,481			13,198			14,415			12,868
Equipment Finance		10,936			10,941			10,805			10,582			10,290			10,938			10,250
Other		1,547			1,765			1,642			1,848			2,387			1,656			2,423

Total average loans	$	116,086		$	115,068		$	112,205		$	108,700		$	107,150		$	115,580		$	105,315
Total loans (g)	$	115,708		$	114,946		$	113,935		$	109,792		$	108,990
Net carrying amount of commercial mortgage servicing rights (g)	$	543		$	494		$	506		$	532		$	515
Credit-related statistics:
Nonperforming assets (g)	$	463		$	516		$	557		$	616		$	715
Purchased impaired loans (g) (h)	$	181		$	221		$	246		$	316		$	370
Net charge-offs (recoveries)	$	(19	)	$	(1	)	$	(2	)	$	(7	)	$	15		$	(20	)	$	17

(a)	See note (a) on page 15.

(b)	Represents consolidated PNC amounts. Our second quarter 2015 Form 10-Q will include additional information regarding these items.

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

(d)	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.

(e)

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. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.

(f)	Includes amounts reported in corporate service fees.

(g)	Presented as of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Table 30: Asset Management Group (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
INCOME STATEMENT
Net interest income	$	71		$	73		$	74		$	72		$	72		$	144		$	143
Noninterest income		243			208			207			205			207			451			406

Total revenue		314			281			281			277			279			595			549
Provision for credit losses (benefit)		1			12			(3	)		(4	)		(6	)		13			6
Noninterest expense		215			210			211			209			202			425			401

Pretax earnings		98			59			73			72			83			157			142
Income taxes		36			22			28			26			30			58			52

Earnings	$	62		$	37		$	45		$	46		$	53		$	99		$	90

AVERAGE BALANCE SHEET
Loans
Consumer	$	5,687		$	5,650		$	5,606		$	5,497		$	5,411		$	5,669		$	5,361
Commercial and commercial real estate		943			932			954			970			998			938			1,011
Residential mortgage		893			865			854			822			789			878			780

Total loans		7,523			7,447			7,414			7,289			7,198			7,485			7,152
Goodwill and other intangible assets		230			238			247			255			264			234			268
Other assets		252			258			255			231			223			255			222

Total assets	$	8,005		$	7,943		$	7,916		$	7,775		$	7,685		$	7,974		$	7,642

Deposits
Noninterest-bearing demand	$	1,343		$	1,345		$	1,436		$	1,362		$	1,327		$	1,344		$	1,333
Interest-bearing demand		4,013			4,241			4,152			3,857			3,912			4,127			3,902
Money market		5,125			4,621			4,025			4,005			3,857			4,873			3,873

Total transaction deposits		10,481			10,207			9,613			9,224			9,096			10,344			9,108
CDs/IRAs/savings deposits		455			455			467			463			446			456			441

Total deposits		10,936			10,662			10,080			9,687			9,542			10,800			9,549
Other liabilities		43			47			53			51			48			45			50

Total liabilities	$	10,979		$	10,709		$	10,133		$	9,738		$	9,590		$	10,845		$	9,599

PERFORMANCE RATIOS
Return on average assets		3.11	%		1.89	%		2.26	%		2.35	%		2.77	%		2.50	%		2.37	%
Noninterest income to total revenue		77			74			74			74			74			76			74
Efficiency		68			75			75			75			72			71			73

OTHER INFORMATION
Total nonperforming assets (b)	$	56		$	63		$	66		$	73		$	76
Purchased impaired loans (b) (c)	$	77		$	82		$	83		$	89		$	94
Total net charge-offs	$	7		$	4		$	—		$	—		$	2		$	11		$	3
CLIENT ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	113		$	115		$	115		$	113		$	113
Institutional		149			150			148			146			144

Total	$	262		$	265		$	263		$	259		$	257

Asset Type
Equity	$	152		$	151		$	151		$	147		$	149
Fixed income		73			74			72			72			71
Liquidity/Other		37			40			40			40			37

Total	$	262		$	265		$	263		$	259		$	257

Discretionary client assets under management
Personal	$	86		$	88		$	87		$	85		$	85
Institutional		48			48			48			47			46

Total	$	134		$	136		$	135		$	132		$	131

Asset Type
Equity	$	75		$	75		$	75		$	72		$	73
Fixed income		41			41			40			40			40
Liquidity/Other		18			20			20			20			18

Total	$	134		$	136		$	135		$	132		$	131

Nondiscretionary client assets under administration
Personal	$	27		$	27		$	28		$	28		$	28
Institutional		101			102			100			99			98

Total	$	128		$	129		$	128		$	127		$	126

Asset Type
Equity	$	77		$	76		$	76		$	75		$	76
Fixed income		32			33			32			32			31
Liquidity/Other		19			20			20			20			19

Total	$	128		$	129		$	128		$	127		$	126

(a)	See note (a) on page 15.

(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 21

Table 31: Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
INCOME STATEMENT
Net interest income	$	30		$	30		$	34		$	38		$	37		$	60		$	77
Noninterest income
Loan servicing revenue
Servicing fees		46			48			54			53			56			94			117
Mortgage servicing rights valuation, net of economic hedge		33			25			1			11			1			58
Loan sales revenue		99			104			93			85			135			203			242
Other		(2	)								(2	)		(2	)		(2	)		(3	)

Total noninterest income		176			177			148			147			190			353			356

Total revenue		206			207			182			185			227			413			433
Provision for credit losses (benefit)		(2	)		2			(1	)		(1	)		1
Noninterest expense		178			161			196			168			169			339			382

Pretax earnings (loss)		30			44			(13	)		18			57			74			51
Income taxes (benefit)		11			16			(4	)		6			21			27			19

Earnings (loss)	$	19		$	28		$	(9	)	$	12		$	36		$	47		$	32

AVERAGE BALANCE SHEET
Portfolio loans	$	1,163		$	1,282		$	1,479		$	1,506		$	1,742		$	1,223		$	1,888
Loans held for sale		1,107			1,147			1,090			1,186			1,135			1,127			1,102
Mortgage servicing rights (MSR)		948			843			948			1,002			1,035			896			1,054
Other assets		3,918			3,973			4,246			3,724			3,574			3,944			4,084

Total assets	$	7,136		$	7,245		$	7,763		$	7,418		$	7,486		$	7,190		$	8,128

Deposits	$	2,497		$	2,215		$	2,302		$	2,415		$	2,318		$	2,357		$	2,210
Borrowings and other liabilities		2,436			2,840			3,057			2,601			2,403			2,636			2,930

Total liabilities	$	4,933		$	5,055		$	5,359		$	5,016		$	4,721		$	4,993		$	5,140

PERFORMANCE RATIOS
Return on average assets		1.07	%		1.57	%		(.46	)%		.64	%		1.93	%		1.32	%		.79	%
Noninterest income to total revenue		85			86			81			79			84			85			82
Efficiency		86			78			108			91			74			82			88

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO SERVICED FOR THIRD PARTIES (in billions)
Beginning of period	$	113		$	108		$	111		$	111		$	114		$	108		$	114
Acquisitions		6			8						2						14			2
Additions		2			2			1			3			2			4			4
Repayments/transfers		(6	)		(5	)		(4	)		(5	)		(5	)		(11	)		(9	)

End of period	$	115		$	113		$	108		$	111		$	111		$	115		$	111

Servicing portfolio - third-party statistics: (b)
Fixed rate		94	%		94	%		94	%		94	%		94	%
Adjustable rate/balloon		6	%		6	%		6	%		6	%		6	%
Weighted-average interest rate		4.35	%		4.41	%		4.47	%		4.49	%		4.54	%
MSR asset value (in billions)	$	1.0		$	.8		$	.8		$	1.0		$	1.0
MSR capitalization value (in basis points)		88			74			78			88			87
Weighted-average servicing fee (in basis points)		27			27			27			27			27

RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	106		$	107		$	108		$	101		$	103		$	107		$	131
(Benefit) / Provision		1			1			4			13			2			2			(17	)
Losses - loan repurchases		(10	)		(2	)		(5	)		(6	)		(4	)		(12	)		(13	)

End of period	$	97		$	106		$	107		$	108		$	101		$	97		$	101

OTHER INFORMATION
Loan origination volume (in billions)	$	2.9		$	2.6		$	2.4		$	2.6		$	2.6		$	5.5		$	4.5
Loan sale margin percentage		3.44	%		4.09	%		3.96	%		3.80	%		5.38	%		3.74	%		5.01	%
Percentage of originations represented by:
Purchase volume (c)		50	%		31	%		42	%		50	%		50	%		41	%		45	%
Refinance volume		50	%		69	%		58	%		50	%		50	%		59	%		55	%
Total nonperforming assets (b)	$	88		$	105		$	120		$	135		$	160

(a)	See note (a) on page 15.

(b)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 22

Table 32: Non-Strategic Assets Portfolio (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2015			March 31 2015			December 31 2014			September 30 2014			June 30 2014			June 30 2015			June 30 2014
INCOME STATEMENT
Net interest income	$	100		$	112		$	122		$	146		$	137		$	212		$	279
Noninterest income		9			9			18			6			10			18			16

Total revenue		109			121			140			152			147			230			295
Provision for credit losses (benefit)		(5	)		(31	)		(20	)		(8	)		(39	)		(36	)		(91	)
Noninterest expense		26			24			39			30			30			50			56

Pretax earnings		88			128			121			130			156			216			330
Income taxes		32			47			45			48			57			79			121

Earnings	$	56		$	81		$	76		$	82		$	99		$	137		$	209

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	114		$	125		$	149		$	164		$	187		$	119		$	203
Lease financing		629			625			645			689			686			627			684

Total commercial lending		743			750			794			853			873			746			887

Consumer Lending:
Home equity		2,854			3,021			3,154			3,328			3,483			2,937			3,553
Residential real estate		4,023			4,184			4,399			4,794			4,961			4,103			5,032

Total consumer lending		6,877			7,205			7,553			8,122			8,444			7,040			8,585

Total portfolio loans		7,620			7,955			8,347			8,975			9,317			7,786			9,472
Other assets (b)		(706	)		(679	)		(678	)		(744	)		(740	)		(692	)		(740	)

Total assets	$	6,914		$	7,276		$	7,669		$	8,231		$	8,577		$	7,094		$	8,732

Deposits and other liabilities	$	222		$	224		$	219		$	223		$	227		$	223		$	229

Total liabilities	$	222		$	224		$	219		$	223		$	227		$	223		$	229

PERFORMANCE RATIOS
Return on average assets		3.25	%		4.51	%		3.93	%		3.95	%		4.63	%		3.89	%		4.83	%
Noninterest income to total revenue		8			7			13			4			7			8			5
Efficiency		24			20			28			20			20			22			19

OTHER INFORMATION
Nonperforming assets (c)	$	616		$	669		$	710		$	731		$	798
Purchased impaired loans (c) (d)	$	3,663		$	3,808		$	3,943		$	4,147		$	4,497
Net charge-offs (recoveries)	$	(7	)	$	—		$	12		$	(6	)	$	10		$	(7	)	$	41
Annualized net charge-off ratio		(.36	)%		—	%		.57	%		(.27	)%		.43	%		(.18	)%		.87	%
LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	108		$	120		$	130		$	162		$	176
Lease financing		630			626			625			691			688

Total commercial lending		738			746			755			853			864

Consumer Lending:
Home equity		2,765			2,944			3,091			3,242			3,410
Residential real estate		3,941			4,139			4,290			4,665			4,928

Total consumer lending		6,706			7,083			7,381			7,907			8,338

Total loans	$	7,444		$	7,829		$	8,136		$	8,760		$	9,202

(a)	See note (a) on page 15.

(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 23

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 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.

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


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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.

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.

Fee income - When referring to the components of Noninterest income, we use the term fee income to refer to the following categories within Noninterest income: Asset management; Consumer services; Corporate services; Residential mortgage; and Service charges on deposits.

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

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. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors.

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%.


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Loss given default (LGD) - An estimate of loss, net of recovery based on collateral type, collateral value, loan exposure, and other factors. 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.

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. Excludes certain assets that have a government-guarantee which are classified as other receivables.

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.


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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.

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.

Transitional Basel III common equity – Common equity calculated under Basel III using phased in definitions and deductions applicable to PNC during the applicable presentation period.

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


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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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