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

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d83088d8k.htm
EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d83088dex992.htm

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THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2015

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD 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 October 14, 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 Third 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 September 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															Nine months ended
In millions, except per share data	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
Interest Income
Loans	$	1,804		$	1,791		$	1,802		$	1,835		$	1,848		$	5,397		$	5,592
Investment securities		423			407			406			398			387			1,236			1,226
Other		114			107			111			104			93			332			276

Total interest income		2,341			2,305			2,319			2,337			2,328			6,965			7,094

Interest Expense
Deposits		107			98			92			86			81			297			239
Borrowed funds		172			155			155			154			143			482			427

Total interest expense		279			253			247			240			224			779			666

Net interest income		2,062			2,052			2,072			2,097			2,104			6,186			6,428

Noninterest Income
Asset management		376			416			376			376			411			1,168			1,137
Consumer services		341			334			311			321			320			986			933
Corporate services		384			369			344			397			374			1,097			1,018
Residential mortgage		125			164			164			135			140			453			483
Service charges on deposits		172			156			153			180			179			481			482
Net gains (losses) on sales of securities (a)		(9	)		8			42			—			—			41			4
Other		324			367			269			441			313			960			943

Total noninterest income		1,713			1,814			1,659			1,850			1,737			5,186			5,000

Total revenue		3,775			3,866			3,731			3,947			3,841			11,372			11,428
Provision For Credit Losses		81			46			54			52			55			181			221
Noninterest Expense
Personnel		1,222			1,200			1,157			1,170			1,189			3,579			3,441
Occupancy		209			209			216			216			200			634			617
Equipment		227			231			222			234			220			680			625
Marketing		64			67			62			67			66			193			186
Other		630			659			692			852			682			1,981			2,080

Total noninterest expense		2,352			2,366			2,349			2,539			2,357			7,067			6,949

Income before income taxes and noncontrolling interests		1,342			1,454			1,328			1,356			1,429			4,124			4,258
Income taxes		269			410			324			299			391			1,003			1,108

Net income		1,073			1,044			1,004			1,057			1,038			3,121			3,150

Less: Net income (loss) attributable to noncontrolling interests		18			4			1			21			1			23			2
Preferred stock dividends and discount accretion and redemptions (b)		64			48			70			48			71			182			189

Net income attributable to common shareholders	$	991		$	992		$	933		$	988		$	966		$	2,916		$	2,959

Earnings Per Common Share
Basic	$	1.93		$	1.92		$	1.79		$	1.88		$	1.82		$	5.64		$	5.55
Diluted	$	1.90		$	1.88		$	1.75		$	1.84		$	1.79		$	5.52		$	5.45

Average Common Shares Outstanding
Basic		512			517			521			524			529			516			531
Diluted		520			525			529			532			537			525			539

Efficiency		62	%		61	%		63	%		64	%		61	%		62	%		61	%
Noninterest income to total revenue		45	%		47	%		44	%		47	%		45	%		46	%		44	%
Effective tax rate (c)		20.0	%		28.2	%		24.4	%		22.1	%		27.4	%		24.3	%		26.0	%

(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)	Dividends are payable quarterly other than Series O and Series R preferred stock, which are payable semiannually in different quarters.

(c)	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	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014
Assets
Cash and due from banks (a)	$	3,835		$	4,412		$	4,151		$	4,360		$	4,164
Federal funds sold and resale agreements (b)		1,534			1,971			1,893			1,852			1,761
Trading securities		1,901			2,334			2,151			2,353			2,650
Interest-earning deposits with banks (a) (c)		34,224			33,969			31,198			31,779			26,247
Loans held for sale (b)		2,060			2,357			2,423			2,262			2,143
Investment securities		68,066			61,362			60,768			55,823			55,039
Loans (a) (b)		204,983			205,153			204,722			204,817			200,872
Allowance for loan and lease losses (a)		(3,237	)		(3,272	)		(3,306	)		(3,331	)		(3,406	)

Net loans		201,746			201,881			201,416			201,486			197,466
Goodwill		9,103			9,103			9,103			9,103			9,074
Mortgage servicing rights		1,467			1,558			1,333			1,351			1,510
Other intangible assets		407			435			463			493			484
Equity investments (a) (d)		10,497			10,531			10,523			10,728			10,763
Other (a) (b)		27,285			24,032			25,538			23,482			23,123

Total assets	$	362,125		$	353,945		$	350,960		$	345,072		$	334,424

Liabilities
Deposits
Noninterest-bearing	$	78,239		$	77,369		$	74,944		$	73,479		$	72,963
Interest-bearing		166,740			162,335			161,559			158,755			153,341

Total deposits		244,979			239,704			236,503			232,234			226,304
Borrowed funds
Federal funds purchased and repurchase agreements		2,077			2,190			2,202			3,510			3,499
Federal Home Loan Bank borrowings		21,664			22,193			21,224			20,005			16,471
Bank notes and senior debt		19,749			18,529			16,205			15,750			15,327
Subordinated debt		9,242			9,121			9,228			9,151			9,046
Commercial paper		1,125			2,956			4,399			4,995			4,809
Other (a) (b)		2,806			3,287			3,571			3,357			3,175

Total borrowed funds		56,663			58,276			56,829			56,768			52,327
Allowance for unfunded loan commitments and letters of credit		266			246			234			259			251
Accrued expenses (a)		5,185			5,031			5,039			5,187			5,090
Other (a)		8,754			4,776			5,917			4,550			4,457

Total liabilities		315,847			308,033			304,522			298,998			288,429

Equity
Preferred stock (e)
Common stock - $5 par value
Authorized 800 shares, issued 542, 542, 541, 541, and 540 shares		2,708			2,708			2,706			2,705			2,703
Capital surplus - preferred stock		3,450			3,449			3,948			3,946			3,945
Capital surplus - common stock and other		12,675			12,632			12,561			12,627			12,573
Retained earnings		28,337			27,609			26,882			26,200			25,464
Accumulated other comprehensive income (loss)		615			379			703			503			727
Common stock held in treasury at cost: 32, 26, 21, 18 and 12 shares		(2,837	)		(2,262	)		(1,775	)		(1,430	)		(931	)

Total shareholders’ equity		44,948			44,515			45,025			44,551			44,481
Noncontrolling interests		1,330			1,397			1,413			1,523			1,514

Total equity		46,278			45,912			46,438			46,074			45,995

Total liabilities and equity	$	362,125		$	353,945		$	350,960		$	345,072		$	334,424

(a)	Amounts include consolidated variable interest entities. Our second quarter 2015 Form 10-Q included, and our third 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 second quarter 2015 Form 10-Q included, and our third 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 $33.8 billion, $33.6 billion, $30.8 billion, $31.4 billion, and $25.9 billion as of September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 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										Nine months ended
In millions, except per share data	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014		September 30 2015		September 30 2014
Basic
Net income	$	1,073	$	1,044	$	1,004	$	1,057	$	1,038	$	3,121	$	3,150
Less:
Net income (loss) attributable to noncontrolling interests		18		4		1		21		1		23		2
Preferred stock dividends and discount accretion and redemptions (a)		64		48		70		48		71		182		189

Net income attributable to common shareholders		991		992		933		988		966		2,916		2,959
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares		—		—		2		2		3		2		9

Net income attributable to basic common shares	$	991	$	992	$	931	$	986	$	963	$	2,914	$	2,950
Basic weighted-average common shares outstanding		512		517		521		524		529		516		531
Basic earnings per common share	$	1.93	$	1.92	$	1.79	$	1.88	$	1.82	$	5.64	$	5.55

Diluted
Net income attributable to basic common shares	$	991	$	992	$	931	$	986	$	963	$	2,914	$	2,950
Less: Impact of BlackRock earnings per share dilution		4		5		5		5		4		14		13

Net income attributable to diluted common shares	$	987	$	987	$	926	$	981	$	959	$	2,900	$	2,937
Basic weighted-average common shares outstanding		512		517		521		524		529		516		531
Dilutive potential common shares		8		8		8		8		8		9		8

Diluted weighted-average common shares outstanding		520		525		529		532		537		525		539
Diluted earnings per common share	$	1.90	$	1.88	$	1.75	$	1.84	$	1.79	$	5.52	$	5.45

(a)	Dividends are payable quarterly other than Series O and Series R preferred stock, which are payable semiannually in different quarters.

Table 4: Capital Ratios (Unaudited)


	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014
Transitional Basel III (a) (b)
Common equity Tier 1		10.6	%		10.6	%		10.5	%		10.9	%		11.1	%
Tier 1 risk-based		12.0			12.0			12.0			12.6			12.8
Total capital risk-based		14.8			14.9			15.0			15.8			16.1
Leverage		10.2			10.3			10.5			10.8			11.1
Common shareholders’ equity to assets		11.5	%		11.6	%		11.7	%		11.8	%		12.1	%

(a)

The ratios as of September 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 second quarter 2015 Form 10-Q included, and our third 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															Nine months ended
In millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	21,813		$	20,550		$	19,290		$	17,745		$	18,134		$	20,560		$	19,344
Non-agency		4,279			4,480			4,657			4,832			5,021			4,471			5,199
Commercial mortgage-backed		6,228			6,286			6,260			5,799			5,147			6,258			5,339
Asset-backed		5,287			5,228			5,140			5,089			5,207			5,219			5,399
U.S. Treasury and government agencies		6,558			5,204			5,142			5,140			5,142			5,640			4,734
State and municipal		1,995			1,973			1,969			1,935			1,913			1,979			2,220
Other debt		1,837			1,796			1,777			1,780			1,763			1,803			2,096
Corporate stocks and other		542			414			457			433			404			471			392

Total securities available for sale		48,539			45,931			44,692			42,753			42,731			46,401			44,723
Securities held to maturity
Residential mortgage-backed		8,352			8,196			7,035			5,832			5,778			7,865			5,903
Commercial mortgage-backed		1,927			2,005			2,097			2,257			2,409			2,009			2,584
Asset-backed		733			743			755			767			874			744			956
U.S. Treasury and government agencies		254			252			249			247			245			252			242
State and municipal		1,979			2,004			2,018			2,048			2,058			2,000			1,618
Other		289			311			320			324			325			307			331

Total securities held to maturity		13,534			13,511			12,474			11,475			11,689			13,177			11,634

Total investment securities		62,073			59,442			57,166			54,228			54,420			59,578			56,357
Loans
Commercial		97,926			98,364			97,866			95,646			92,547			98,053			91,321
Commercial real estate		25,228			24,812			23,924			23,176			22,961			24,659			22,468
Equipment lease financing		7,683			7,556			7,539			7,621			7,610			7,593			7,548
Consumer		59,584			60,240			61,476			62,213			62,351			60,426			62,636
Residential real estate		14,406			14,416			14,350			14,223			14,359			14,391			14,586

Total loans		204,827			205,388			205,155			202,879			199,828			205,122			198,559
Interest-earning deposits with banks		37,289			32,368			30,405			27,701			22,108			33,380			16,341
Loans held for sale		2,048			2,092			2,246			2,205			2,272			2,128			2,095
Federal funds sold and resale agreements		1,598			1,959			1,655			1,771			1,409			1,737			1,336
Other		5,033			5,470			5,046			5,121			4,914			5,183			5,045

Total interest-earning assets		312,868			306,719			301,673			293,905			284,951			307,128			279,733
Noninterest-earning assets:
Allowance for loan and lease losses		(3,265	)		(3,309	)		(3,317	)		(3,383	)		(3,445	)		(3,297	)		(3,515	)
Cash and due from banks		3,890			3,954			4,067			4,176			3,934			3,969			3,867
Other		45,094			45,276			45,634			44,948			44,005			45,333			43,793

Total assets	$	358,587		$	352,640		$	348,057		$	339,646		$	329,445		$	353,133		$	323,878

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

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


	Three months ended										Nine months ended
In millions	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014		September 30 2015		September 30 2014
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	84,554	$	81,857	$	79,994	$	77,696	$	76,014	$	82,151	$	74,777
Demand		46,390		46,281		46,131		44,389		43,112		46,269		43,023
Savings		14,150		13,775		13,053		12,410		12,152		13,663		11,848
Retail certificates of deposit		18,392		18,334		18,541		18,700		19,317		18,422		19,951
Time deposits in foreign offices and other time		2,361		2,300		2,192		2,754		2,235		2,285		2,158

Total interest-bearing deposits		165,847		162,547		159,911		155,949		152,830		162,790		151,757
Borrowed funds
Federal funds purchased and repurchase agreements		2,298		2,718		3,116		3,339		3,319		2,708		3,634
Federal Home Loan Bank borrowings		21,882		22,001		20,774		16,786		15,328		21,556		14,215
Bank notes and senior debt		19,455		16,408		15,351		15,395		14,221		17,087		13,682
Subordinated debt		8,882		8,861		8,851		8,812		8,804		8,862		8,475
Commercial paper		1,867		3,640		4,986		4,735		4,863		3,486		4,903
Other		3,147		3,537		3,274		3,303		2,801		3,319		2,711

Total borrowed funds		57,531		57,165		56,352		52,370		49,336		57,018		47,620

Total interest-bearing liabilities		223,378		219,712		216,263		208,319		202,166		219,808		199,377
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		77,553		75,299		73,178		73,468		70,993		75,359		68,976
Allowance for unfunded loan commitments and letters of credit		246		234		260		251		232		246		234
Accrued expenses and other liabilities		11,667		11,540		12,326		11,639		10,307		11,845		10,155
Equity		45,743		45,855		46,030		45,969		45,747		45,875		45,136

Total liabilities and equity	$	358,587	$	352,640	$	348,057	$	339,646	$	329,445	$	353,133	$	323,878


(a) Calculated using average daily balances.

Table 6: Supplemental Average Balance Sheet Information (Unaudited)
Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	165,847	$	162,547	$	159,911	$	155,949	$	152,830	$	162,790	$	151,757
Noninterest-bearing deposits		77,553		75,299		73,178		73,468		70,993		75,359		68,976

Total deposits	$	243,400	$	237,846	$	233,089	$	229,417	$	223,823	$	238,149	$	220,733
Transaction deposits	$	208,497	$	203,437	$	199,303	$	195,553	$	190,119	$	203,779	$	186,776
Common shareholders’ equity	$	40,910	$	40,818	$	40,603	$	40,522	$	40,238	$	40,778	$	39,584


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

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


	Three months ended															Nine months ended
	September 30			June 30			March 31			December 31			September 30			September 30			September 30
	2015			2015			2015			2014			2014			2015			2014
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency		2.47	%		2.43	%		2.67	%		2.72	%		2.64	%		2.52	%		2.63	%
Non-agency		4.83			4.70			4.51			4.33			4.64			4.68			4.92
Commercial mortgage-backed		3.20			3.03			3.19			3.37			3.61			3.14			3.56
Asset-backed		2.15			2.12			2.08			2.15			2.01			2.12			1.92
U.S. Treasury and government agencies		1.36			1.12			1.27			1.21			1.01			1.26			1.16
State and municipal		4.83			4.76			4.45			4.58			3.98			4.68			4.40
Other debt		2.44			4.01			2.53			3.25			2.41			2.99			2.39
Corporate stocks and other		.26			.10			.10			.11			.10			.16			.10
Total securities available for sale		2.66			2.69			2.75			2.82			2.75			2.70			2.82
Securities held to maturity
Residential mortgage-backed		3.05			2.95			3.26			3.60			3.35			3.07			3.49
Commercial mortgage-backed		3.65			3.63			4.16			4.09			3.99			3.82			3.93
Asset-backed		1.57			1.53			1.52			1.50			1.75			1.54			1.60
U.S. Treasury and government agencies		3.82			3.81			3.77			3.82			3.81			3.80			3.80
State and municipal		5.50			5.49			5.52			5.50			5.50			5.50			5.50
Other		3.37			3.12			2.89			3.02			2.84			3.11			2.91
Total securities held to maturity		3.43			3.37			3.67			3.88			3.73			3.49			3.70
Total investment securities		2.83			2.85			2.95			3.05			2.96			2.87			3.00
Loans
Commercial		3.02			3.00			2.98			3.04			3.17			3.00			3.30
Commercial real estate		3.35			3.44			3.80			3.88			3.90			3.52			4.04
Equipment lease financing		3.42			3.45			3.47			3.97			3.48			3.45			3.58
Consumer		4.18			4.13			4.21			4.11			4.16			4.17			4.19
Residential real estate		4.76			4.91			4.88			4.90			5.03			4.85			5.00
Total loans		3.54			3.54			3.59			3.63			3.71			3.55			3.80
Interest-earning deposits with banks		.25			.25			.25			.29			.23			.25			.24
Loans held for sale		4.23			4.33			4.20			4.67			4.48			4.25			4.65
Federal funds sold and resale agreements		.33			.22			.22			.28			.38			.25			.39
Other		5.33			4.65			5.43			4.56			4.24			5.13			4.49
Total yield on interest-earning assets		3.02			3.06			3.15			3.21			3.30			3.08			3.43
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.29			.27			.24			.20			.18			.27			.18
Demand		.06			.05			.06			.06			.05			.05			.05
Savings		.18			.17			.15			.14			.12			.17			.10
Retail certificates of deposit		.68			.68			.71			.72			.73			.69			.74
Time deposits in foreign offices and other time		.17			.16			.19			.20			.18			.18			.18
Total interest-bearing deposits		.26			.24			.23			.22			.21			.24			.21
Borrowed funds
Federal funds purchased and repurchase agreements		.14			.14			.12			.11			.08			.13			.09
Federal Home Loan Bank borrowings		.49			.46			.45			.46			.48			.47			.49
Bank notes and senior debt		1.27			1.19			1.36			1.35			1.33			1.27			1.44
Subordinated debt		2.81			2.61			2.64			2.64			2.40			2.69			2.53
Commercial paper		.38			.35			.34			.31			.30			.35			.29
Other		2.03			1.95			1.99			2.25			2.62			1.99			2.48
Total borrowed funds		1.18			1.07			1.10			1.17			1.14			1.12			1.19
Total rate on interest-bearing liabilities		.49			.46			.46			.45			.44			.47			.44

Interest rate spread		2.53			2.60			2.69			2.76			2.86			2.61			2.99
Impact of noninterest-bearing sources (b)		.14			.13			.13			.13			.12			.13			.13

Net interest margin		2.67	%		2.73	%		2.82	%		2.89	%		2.98	%		2.74	%		3.12	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all earning assets in calculating net interest margins, in this table we use net interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014 and September 30, 2014, were $50 million, $49 million, $49 million, $49 million and $47 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2015 and September 30, 2014 were $148 million and $140 million, respectively.

(b)	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										Nine months ended
In millions	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014		September 30 2015		September 30 2014
Core net interest income (a)	$	1,972	$	1,941	$	1,944	$	1,971	$	1,957	$	5,857	$	5,971
Total purchase accounting accretion (b)		90		111		128		126		147		329		457

Total net interest income	$	2,062	$	2,052	$	2,072	$	2,097	$	2,104	$	6,186	$	6,428

(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															Nine months ended
In millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.83	%		2.85	%		2.95	%		3.05	%		2.96	%		2.87	%		3.00	%
Total loans		3.54			3.54			3.59			3.63			3.71			3.55			3.80
Other		.99			1.03			1.14			1.15			1.19			1.05			1.48
Total yield on interest-earning assets		3.02			3.06			3.15			3.21			3.30			3.08			3.43

Rate on interest-bearing liabilities
Total interest-bearing deposits		.26			.24			.23			.22			.21			.24			.21
Total borrowed funds		1.18			1.07			1.10			1.17			1.14			1.12			1.19
Total rate on interest-bearing liabilities		.49			.46			.46			.45			.44			.47			.44

Interest rate spread		2.53			2.60			2.69			2.76			2.86			2.61			2.99
Impact of noninterest-bearing sources		.14			.13			.13			.13			.12			.13			.13

Net interest margin		2.67	%		2.73	%		2.82	%		2.89	%		2.98	%		2.74	%		3.12	%

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

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


	Three months ended															Nine months ended
In millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
Average yields/rates
Yield on interest-earning assets
Total investment securities		2.77	%		2.78	%		2.89	%		2.98	%		2.89	%		2.81	%		2.94	%
Total loans		3.36			3.32			3.33			3.38			3.42			3.33			3.49
Other		.99			1.03			1.13			1.14			1.19			1.05			1.48
Total yield on interest-earning assets		2.89			2.90			2.96			3.02			3.08			2.92			3.20

Rate on interest-bearing liabilities
Total interest-bearing deposits		.26			.25			.24			.23			.23			.25			.23
Total borrowed funds		1.06			.96			.99			1.03			1.00			1.01			1.05
Total rate on interest-bearing liabilities		.46			.44			.44			.43			.42			.45			.42

Interest rate spread		2.43			2.46			2.52			2.59			2.66			2.47			2.78
Impact of noninterest-bearing sources		.14			.13			.13			.13			.12			.13			.13

Core net interest margin		2.57			2.59			2.65			2.72			2.78			2.60			2.91
Purchase accounting accretion impact on net interest margin		.10			.14			.17			.17			.20			.14			.21

Net interest margin		2.67	%		2.73	%		2.82	%		2.89	%		2.98	%		2.74	%		3.12	%

(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	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014
Commercial
Retail/wholesale trade	$	16,986	$	17,162	$	17,126	$	16,972	$	16,162
Manufacturing		19,649		19,775		20,057		18,744		18,649
Service providers		13,550		14,054		13,916		14,103		13,603
Real estate related (a)		11,492		10,931		10,744		10,812		10,722
Financial services		5,511		5,966		6,306		6,178		5,218
Health care		9,397		9,396		9,192		9,017		9,095
Other industries		20,842		20,849		20,309		21,594		20,051

Total commercial		97,427		98,133		97,650		97,420		93,500

Commercial real estate
Real estate projects (b)		15,333		15,142		15,057		14,577		14,564
Commercial mortgage		10,760		9,664		9,498		8,685		8,378

Total commercial real estate		26,093		24,806		24,555		23,262		22,942

Equipment lease financing		7,644		7,783		7,470		7,686		7,621

Total commercial lending		131,164		130,722		129,675		128,368		124,063

Consumer
Home equity
Lines of credit		19,309		19,589		19,918		20,361		20,667
Installment		13,697		13,946		14,147		14,316		14,388
Credit card		4,600		4,520		4,434		4,612		4,449
Other consumer
Education		6,070		6,212		6,448		6,626		6,978
Automobile		11,039		11,057		11,120		11,616		11,548
Other		4,612		4,575		4,491		4,511		4,428

Total consumer		59,327		59,899		60,558		62,042		62,458

Residential real estate
Residential mortgage		14,038		14,041		13,982		13,885		13,805
Residential construction		454		491		507		522		546

Total residential real estate		14,492		14,532		14,489		14,407		14,351

Total consumer lending		73,819		74,431		75,047		76,449		76,809

Total loans (c)	$	204,983	$	205,153	$	204,722	$	204,817	$	200,872

(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:	$	4,167	$	4,465	$	4,675	$	4,858	$	5,167
Table 12: Details of Loans Held for Sale (Unaudited)
In millions	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014
Commercial mortgage	$	860	$	784	$	1,037	$	922	$	891
Residential mortgage		1,128		1,369		1,249		1,279		1,211
Other		72		204		137		61		41

Total	$	2,060	$	2,357	$	2,423	$	2,262	$	2,143

Table 13: Commitments to Extend Credit (Unaudited)
In millions	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014
Commitments to extend credit (a)	$	141,370	$	138,242	$	137,960	$	138,592	$	136,795

(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	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014
Beginning balance	$	3,272		$	3,306		$	3,331		$	3,406		$	3,453
Gross charge-offs:
Commercial		(63	)		(48	)		(34	)		(45	)		(60	)
Commercial real estate		(4	)		(13	)		(12	)		(24	)		(14	)
Equipment lease financing		(1	)		(1	)					(5	)		(3	)
Home equity		(37	)		(50	)		(52	)		(62	)		(50	)
Residential real estate		(11	)		(6	)					(14	)		(11	)
Credit card		(37	)		(41	)		(43	)		(38	)		(40	)
Other consumer		(44	)		(44	)		(48	)		(47	)		(44	)

Total gross charge-offs		(197	)		(203	)		(189	)		(235	)		(222	)
Recoveries:
Commercial		42			65			32			51			62
Commercial real estate		11			23			12			20			15
Equipment lease financing		1			1			1			4			4
Home equity		25			24			20			20			19
Residential real estate		4			4			2			3			21
Credit card		5			6			5			5			5
Other consumer		13			13			14			14			14

Total recoveries		101			136			86			117			140
Net (charge-offs) recoveries:
Commercial		(21	)		17			(2	)		6			2
Commercial real estate		7			10			—			(4	)		1
Equipment lease financing		—			—			1			(1	)		1
Home equity		(12	)		(26	)		(32	)		(42	)		(31	)
Residential real estate		(7	)		(2	)		2			(11	)		10
Credit card		(32	)		(35	)		(38	)		(33	)		(35	)
Other consumer		(31	)		(31	)		(34	)		(33	)		(30	)

Total net charge-offs		(96	)		(67	)		(103	)		(118	)		(82	)
Provision for credit losses		81			46			54			52			55
Other					(1	)		(1	)		(1	)		(1	)
Net change in allowance for unfunded loan commitments and letters of credit		(20	)		(12	)		25			(8	)		(19	)

Ending balance	$	3,237		$	3,272		$	3,306		$	3,331		$	3,406

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.19	%		.13	%		.20	%		.23	%		.16	%
Allowance for loan and lease losses to total loans (a)		1.58			1.59			1.61			1.63			1.70
Commercial lending net charge-offs	$	(14	)	$	27		$	(1	)	$	1		$	4
Consumer lending net charge-offs		(82	)		(94	)		(102	)		(119	)		(86	)

Total net charge-offs	$	(96	)	$	(67	)	$	(103	)	$	(118	)	$	(82	)
Net charge-offs to average loans
Commercial lending		.04	%		(.08	)%		.00	%		.00	%		(.01	)%
Consumer lending		.44			.51			.55			.62			.44

(a)

This ratio will be impacted by the expected change in derecognition policies for purchased impaired loans that are pooled and accounted for as a single asset. It is estimated that the implementation of this policy change in the fourth quarter of 2015 will reduce the purchased impaired loan recorded investment balance included in total loans and associated allowance for loan and lease losses balance each by approximately $475 million. Our second quarter 2015 Form 10-Q included, and our third quarter 2015 Form 10-Q will include, additional discussion on this policy change.

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


Three months ended - in millions	September 30 2015		June 30 2015		March 31 2015			December 31 2014		September 30 2014
Beginning balance	$	246	$	234	$	259		$	251	$	232
Net change in allowance for unfunded loan commitments and letters of credit		20		12		(25	)		8		19

Ending balance	$	266	$	246	$	234		$	259	$	251


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									Nine months ended
In millions	September 30 2015			June 30 2015			September 30 2014			September 30 2015			September 30 2014
Impaired loans
Scheduled accretion	$	88		$	92		$	109		$	279		$	354
Reversal of contractual interest on impaired loans		(57	)		(52	)		(57	)		(164	)		(195	)

Scheduled accretion net of contractual interest		31			40			52			115			159
Excess cash recoveries (a)		19			28			31			80			95

Total impaired loans	$	50		$	68		$	83		$	195		$	254

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

Table 17: Purchased Impaired Loans - Accretable Yield


In millions
July 1, 2015	$	1,443		January 1, 2015	$	1,558
Accretion (including excess cash recoveries)		(107	)	Accretion (including excess cash recoveries)		(359	)
Disposals		(57	)	Disposals		(66	)
Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		72		Net reclassifications to (from) accretable from (to) non-accretable and other activity (a)		218

September 30, 2015 (b)	$	1,351		September 30, 2015 (b)	$	1,351

(a)

Approximately 60% and 66% of the net reclassification for the third quarter and first nine 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 September 30, 2015, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $0.7 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


	September 30, 2015						June 30, 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)	$	296					$	346					$	466
Recorded investment		204						235						310
Allowance for loan losses		(67	)					(67	)					(79	)

Net investment/Carrying value		137			46	%		168			49	%		231			50	%


Consumer and residential mortgage loans:
Outstanding balance (a)		3,854						4,136						4,541
Recorded investment		3,963						4,230						4,548
Allowance for loan losses		(751	)					(788	)					(793	)

Net investment/Carrying value		3,212			83	%		3,442			83	%		3,755			83	%

Total purchased impaired loans:

Outstanding balance (a)		4,150						4,482						5,007
Recorded investment		4,167						4,465						4,858
Allowance for loan losses		(818	)					(855	)					(872	)

Net investment/Carrying value	$	3,349			81	%	$	3,610			81	%	$	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 second quarter 2015 Form 10-Q included, and our third 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	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	41		$	43		$	46		$	48		$	62
Manufacturing		73			55			59			59			44
Service providers		57			50			63			67			82
Real estate related (b)		45			46			66			66			76
Financial services		3			2			1			4			5
Health care		26			28			28			28			23
Other industries		56			34			17			18			28

Total commercial		301			258			280			290			320

Commercial real estate
Real estate projects		184			211			257			290			346
Commercial mortgage		28			31			36			44			49

Total commercial real estate		212			242			293			334			395

Equipment lease financing		7			3			2			2			3

Total commercial lending		520			503			575			626			718

Consumer lending (c)
Home equity		1,029			1,057			1,101			1,112			1,090
Residential real estate
Residential mortgage		565			623			653			694			725
Residential construction		6			10			12			12			18
Credit card		3			3			3			3			3
Other consumer		54			56			61			63			58

Total consumer lending		1,657			1,749			1,830			1,884			1,894

Total nonperforming loans (d)		2,177			2,252			2,405			2,510			2,612

OREO and foreclosed assets
Other real estate owned (OREO)		293			302			331			351			353
Foreclosed and other assets		20			24			18			19			10

Total OREO and foreclosed assets (e)		313			326			349			370			363

Total nonperforming assets	$	2,490		$	2,578		$	2,754		$	2,880		$	2,975

Nonperforming loans to total loans		1.06	%		1.10	%		1.17	%		1.23	%		1.30	%
Nonperforming assets to total loans, OREO and foreclosed assets		1.21			1.25			1.34			1.40			1.48
Nonperforming assets to total assets		.69			.73			.78			.83			.89
Allowance for loan and lease losses to nonperforming loans (f) (g)		149			145			137			133			130

(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, $.6 billion, $.7 billion, $.8 billion and $.7 billion at September 30, 2015, June 30, 2015, March 31, 2015, December 31, 2014, and September 30, 2014, which included $.3 billion, $.4 billion, $.5 billion, $.5 billion and $.5 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.

(g)

In this ratio, the allowance for loan and lease losses will be impacted by the expected fourth quarter of 2015 change in derecognition policies for purchased impaired loans that are pooled and accounted for as a single asset. See footnote (a) of Table 14: Change in Allowance for Loan and Lease Losses on page 9 for additional information on this policy change.


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	July 1, 2015 - September 30, 2015			April 1, 2015 - June 30, 2015			January 1, 2015 - March 31, 2015			October 1, 2014 - December 31, 2014			July 1, 2014 - September 30, 2014
Beginning balance	$	2,578		$	2,754		$	2,880		$	2,975		$	3,168
New nonperforming assets		381			372			336			470			380
Charge-offs and valuation adjustments		(114	)		(129	)		(124	)		(158	)		(127	)
Principal activity, including paydowns and payoffs		(167	)		(207	)		(170	)		(183	)		(195	)
Asset sales and transfers to loans held for sale		(106	)		(97	)		(93	)		(130	)		(143	)
Returned to performing status		(82	)		(115	)		(75	)		(94	)		(108	)

Ending balance	$	2,490		$	2,578		$	2,754		$	2,880		$	2,975

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


In millions
Ranking	Outstandings		Industry
1	$	34	Real Estate, Rental and Leasing
2		26	Mining, Quarrying, Oil and Gas Extraction
3		17	Construction
4		13	Manufacturing
5		11	Manufacturing
6		10	Manufacturing
7		10	Wholesale Trade
8		9	Construction
9		8	Educational Services
10		8	Manufacturing

Total	$	146

As a percent of total nonperforming assets 6%

(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	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014
Total consumer lending	$	1,948	$	2,002	$	2,020	$	2,041	$	2,064
Total commercial lending		420		414		510		542		552

Total TDRs	$	2,368	$	2,416	$	2,530	$	2,583	$	2,616

Nonperforming	$	1,171	$	1,208	$	1,317	$	1,370	$	1,303
Accruing (a)		1,085		1,091		1,089		1,083		1,174
Credit card		112		117		124		130		139

Total TDRs	$	2,368	$	2,416	$	2,530	$	2,583	$	2,616

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	Sept. 30 2015		Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Sept. 30 2015			Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014
Commercial	$	56	$	83	$	73	$	73	$	46		.06	%		.08	%		.07	%		.07	%		.05	%
Commercial real estate		32		5		24		23		47		.12			.02			.10			.10			.20
Equipment lease financing		2		2		16		11		4		.03			.03			.21			.14			.05
Home equity		69		65		61		70		67		.21			.19			.18			.20			.19
Residential real estate
Non government insured		84		78		72		95		87		.58			.54			.50			.66			.61
Government insured		62		64		70		68		76		.43			.44			.48			.47			.53
Credit card		26		23		25		28		27		.57			.51			.56			.61			.61
Other consumer
Non government insured		58		51		52		62		56		.27			.23			.24			.27			.24
Government insured		119		121		126		152		164		.55			.55			.57			.67			.71

Total	$	508	$	492	$	519	$	582	$	574		.25			.24			.25			.28			.29

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


	Amount										Percent of Total Outstandings
Dollars in millions	Sept. 30 2015		Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Sept. 30 2015			Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014
Commercial	$	39	$	32	$	20	$	24	$	19		.04	%		.03	%		.02	%		.02	%		.02	%
Commercial real estate		17		5		23		2		6		.07			.02			.09			.01			.03
Equipment lease financing								1		1											.01			.01
Home equity		31		25		30		32		25		.09			.07			.09			.09			.07
Residential real estate
Non government insured		18		20		18		25		24		.12			.14			.12			.17			.17
Government insured		40		38		35		43		41		.28			.26			.24			.30			.29
Credit card		18		17		17		20		18		.39			.38			.38			.43			.41
Other consumer
Non government insured		22		17		18		19		20		.10			.08			.08			.08			.09
Government insured		80		81		82		93		100		.37			.37			.37			.41			.44

Total	$	265	$	235	$	243	$	259	$	254		.13			.11			.12			.13			.13

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


	Amount										Percent of Total Outstandings
Dollars in millions	Sept. 30 2015		Jun. 30 2015		Mar. 31 2015		Dec. 31 2014		Sept. 30 2014		Sept. 30 2015			Jun. 30 2015			Mar. 31 2015			Dec. 31 2014			Sept. 30 2014
Commercial	$	36	$	35	$	35	$	37	$	39		.04	%		.04	%		.04	%		.04	%		.04	%
Commercial real estate				1						1					.00									.00
Residential real estate
Non government insured		27		19		26		23		24		.19			.13			.18			.16			.17
Government insured		558		585		634		719		785		3.85			4.03			4.38			4.99			5.47
Credit card		30		29		32		33		29		.65			.64			.72			.72			.65
Other consumer
Non government insured		15		13		17		16		13		.07			.06			.08			.07			.06
Government insured		224		232		244		277		287		1.03			1.06			1.11			1.22			1.25

Total	$	890	$	914	$	988	$	1,105	$	1,178		.43			.45			.48			.54			.59

(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. The business also offers PNC proprietary mutual funds. 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 September 30, 2015, our economic interest in BlackRock was 22%.

Table 26: Period End Employees


	September 30 2015		June 30 2015		March 31 2015		December 31 2014		September 30 2014
Full-time employees
Retail Banking		21,960		22,117		22,063		22,216		22,103
Other full-time employees (a)		27,639		27,659		27,696		27,529		27,528

Total full-time employees		49,599		49,776		49,759		49,745		49,631

Part-time employees
Retail Banking		2,985		3,112		3,150		3,274		3,410
Other part-time employees (a)		564		821		563		568		614

Total part-time employees		3,549		3,933		3,713		3,842		4,024

Total		53,148		53,709		53,472		53,587		53,655

(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												Nine months ended
In millions	September 30 2015			June 30 2015		March 31 2015		December 31 2014			September 30 2014		September 30 2015		September 30 2014
Income (Loss)
Retail Banking	$	251		$	241	$	202	$	172		$	173	$	694	$	556
Corporate & Institutional Banking		502			508		482		564			549		1,492		1,542
Asset Management Group		44			62		37		45			46		143		136
Residential Mortgage Banking		(4	)		19		28		(9	)		12		43		44
Non-Strategic Assets Portfolio		68			56		81		76			82		205		291
Other, including BlackRock (b) (c)		212			158		174		209			176		544		581

Net income	$	1,073		$	1,044	$	1,004	$	1,057		$	1,038	$	3,121	$	3,150

Revenue
Retail Banking	$	1,643		$	1,635	$	1,526	$	1,520		$	1,521	$	4,804	$	4,529
Corporate & Institutional Banking		1,363			1,363		1,284		1,444			1,386		4,010		4,032
Asset Management Group		278			314		281		281			277		873		826
Residential Mortgage Banking		166			206		207		182			185		579		618
Non-Strategic Assets Portfolio		106			109		121		140			152		336		447
Other, including BlackRock (b) (c)		219			239		312		380			320		770		976

Total revenue	$	3,775		$	3,866	$	3,731	$	3,947		$	3,841	$	11,372	$	11,428

(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, primarily favorably impacting Retail Banking and adversely impacting 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 third 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															Nine months ended
Dollars in millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
INCOME STATEMENT
Net interest income	$	1,069		$	1,045		$	1,038		$	986		$	985		$	3,152		$	2,938
Noninterest income
Service charges on deposits		165			148			146			172			173			459			461
Brokerage		74			71			67			64			60			212			176
Consumer services		260			254			233			247			248			747			714
Other		75			117			42			51			55			234			240

Total noninterest income		574			590			488			534			536			1,652			1,591

Total revenue		1,643			1,635			1,526			1,520			1,521			4,804			4,529
Provision for credit losses		57			45			49			54			74			151			223
Noninterest expense		1,190			1,210			1,158			1,195			1,175			3,558			3,430

Pretax earnings		396			380			319			271			272			1,095			876
Income taxes		145			139			117			99			99			401			320

Earnings	$	251		$	241		$	202		$	172		$	173		$	694		$	556

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	27,508		$	27,775		$	28,152		$	28,457		$	28,684		$	27,810		$	28,985
Indirect auto		9,380			9,287			9,287			9,209			9,192			9,318			9,093
Indirect other		518			561			603			635			675			559			726
Education		6,197			6,387			6,626			6,895			7,100			6,402			7,314
Credit cards		4,537			4,447			4,444			4,475			4,401			4,476			4,327
Other		2,426			2,373			2,347			2,345			2,277			2,383			2,200

Total consumer		50,566			50,830			51,459			52,016			52,329			50,948			52,645
Commercial and commercial real estate		10,518			10,571			10,654			10,698			10,801			10,580			10,924
Floor plan		2,093			2,188			2,213			2,180			2,021			2,164			2,227
Residential mortgage		649			726			734			552			584			704			618

Total loans		63,826			64,315			65,060			65,446			65,735			64,396			66,414
Goodwill and other intangible assets		5,961			5,975			5,990			6,007			6,025			5,975			6,043
Other assets		3,129			3,079			2,967			2,946			2,922			3,059			2,807

Total assets	$	72,916		$	73,369		$	74,017		$	74,399		$	74,682		$	73,430		$	75,264

Deposits
Noninterest-bearing demand	$	24,018		$	23,434		$	22,591		$	22,860		$	22,392		$	23,353		$	21,890
Interest-bearing demand		35,918			36,454			35,650			34,298			33,900			36,009			33,889
Money market		56,163			55,026			53,105			51,204			50,204			54,775			49,945

Total transaction deposits		116,099			114,914			111,346			108,362			106,496			114,137			105,724
Savings		13,914			13,599			12,888			12,244			11,997			13,471			11,713
Certificates of deposit		16,234			16,749			17,318			17,959			18,720			16,763			19,314

Total deposits		146,247			145,262			141,552			138,565			137,213			144,371			136,751
Other liabilities		632			588			617			555			507			612			440

Total liabilities	$	146,879		$	145,850		$	142,169		$	139,120		$	137,720		$	144,983		$	137,191

PERFORMANCE RATIOS
Return on average assets		1.37	%		1.32	%		1.11	%		.92	%		.92	%		1.26	%		.99	%
Noninterest income to total revenue		35			36			32			35			35			34			35
Efficiency		72			74			76			79			77			74			76

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Table 28: Retail Banking (Unaudited) (Continued)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
OTHER INFORMATION (a)
Credit-related statistics:
Commercial nonperforming assets	$	116		$	126		$	131		$	139		$	146
Consumer nonperforming assets		976			1,001			1,043			1,059			1,037

Total nonperforming assets	$	1,092		$	1,127		$	1,174		$	1,198		$	1,183

Purchased impaired loans (b)	$	516		$	531		$	553		$	575		$	600

Commercial lending net charge-offs (recoveries)	$	(7	)	$	1		$	1		$	(2	)	$	2		$	(5	)	$	33
Credit card lending net charge-offs		31			35			38			33			35			104			109
Consumer lending (excluding credit card) net charge-offs		42			50			60			73			56			152			212

Total net charge-offs	$	66		$	86		$	99		$	104		$	93		$	251		$	354

Commercial lending annualized net charge-off ratio		(.23	)%		.02	%		.03	%		(.06	)%		.06	%		(.06	)%		.34	%
Credit card lending annualized net charge-off ratio		2.77	%		3.15	%		3.47	%		2.93	%		3.16	%		3.11	%		3.37	%
Consumer lending (excluding credit card) annualized net charge-off ratio		.36	%		.43	%		.51	%		.60	%		.46	%		.43	%		.58	%

Total annualized net charge-off ratio		.41	%		.53	%		.62	%		.63	%		.56	%		.52	%		.71	%

Home equity portfolio credit statistics: (c)
% of first lien positions at origination (d)		56	%		55	%		54	%		54	%		53	%
Weighted-average loan-to-value ratios (LTVs) (d)(e)		74	%		76	%		76	%		77	%		78	%
Weighted-average updated FICO scores (f)		751			751			748			748			747
Annualized net charge-off ratio		.16	%		.34	%		.42	%		.52	%		.35	%		.31	%		.55	%
Delinquency data - % of total loans: (g)
Loans 30 - 59 days past due		.20	%		.20	%		.18	%		.20	%		.19	%
Loans 60 - 89 days past due		.09	%		.08	%		.09	%		.09	%		.07	%

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

Nonperforming loans		3.09	%		3.13	%		3.12	%		3.13	%		3.04	%

Other statistics:
ATMs		8,996			8,880			8,754			8,605			8,178
Branches (h)		2,645			2,644			2,660			2,697			2,691
Brokerage account client assets (billions) (i)	$	42		$	44		$	44		$	43		$	43

Customer-related statistics (average):
Non-teller deposit transactions (j)		45	%		42	%		40	%		38	%		36	%		43	%		34	%
Digital consumer customers (k)		53	%		52	%		50	%		49	%		47	%		52	%		45	%

(a)	Presented as of period end, except for net charge-offs and annualized net charge-off ratios, which are for the three months and nine 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															Nine months ended
Dollars in millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
INCOME STATEMENT
Net interest income	$	887		$	871		$	855		$	956		$	922		$	2,613		$	2,777
Noninterest income
Corporate service fees		356			341			310			369			346			1,007			926
Other		120			151			119			119			118			390			329

Noninterest income		476			492			429			488			464			1,397			1,255

Total revenue		1,363			1,363			1,284			1,444			1,386			4,010			4,032
Provision for credit losses (benefit)		46			20			17			21			(4	)		83			86
Noninterest expense		533			547			514			544			528			1,594			1,520

Pretax earnings		784			796			753			879			862			2,333			2,426
Income taxes		282			288			271			315			313			841			884

Earnings	$	502		$	508		$	482		$	564		$	549		$	1,492		$	1,542

AVERAGE BALANCE SHEET
Loans
Commercial	$	85,452		$	85,739		$	84,712		$	82,066		$	79,083		$	85,304		$	77,550
Commercial real estate		22,965			22,545			22,090			21,720			21,492			22,536			20,927
Equipment lease financing		7,052			6,927			6,914			6,977			6,922			6,965			6,863

Total commercial lending		115,469			115,211			113,716			110,763			107,497			114,805			105,340
Consumer		694			875			1,352			1,442			1,203			971			1,116

Total loans		116,163			116,086			115,068			112,205			108,700			115,776			106,456
Goodwill and other intangible assets		3,870			3,845			3,835			3,867			3,806			3,850			3,812
Loans held for sale		826			990			1,106			1,103			1,092			973			973
Other assets		10,754			11,318			11,169			10,784			10,073			11,079			9,991

Total assets	$	131,613		$	132,239		$	131,178		$	127,959		$	123,671		$	131,678		$	121,232

Deposits
Noninterest-bearing demand	$	49,584		$	47,916		$	46,976		$	46,769		$	44,730		$	48,168		$	43,348
Money market		22,942			21,722			22,286			22,706			21,821			22,319			20,930
Other		10,578			9,396			9,340			8,883			7,839			9,776			7,646

Total deposits		83,104			79,034			78,602			78,358			74,390			80,263			71,924
Other liabilities		7,518			7,897			8,271			7,833			7,412			7,893			7,454

Total liabilities	$	90,622		$	86,931		$	86,873		$	86,191		$	81,802		$	88,156		$	79,378

PERFORMANCE RATIOS
Return on average assets		1.51	%		1.54	%		1.49	%		1.75	%		1.76	%		1.51	%		1.70	%
Noninterest income to total revenue		35			36			33			34			33			35			31
Efficiency		39			40			40			38			38			40			38

(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															Nine months ended
Dollars in millions, except as noted	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
COMMERCIAL LOAN SERVICING PORTFOLIO - SERVICED FOR PNC AND OTHERS (in billions)
Beginning of period	$	436		$	390		$	377		$	363		$	353		$	377		$	347
Acquisitions/additions		29			67			29			35			25			125			64
Repayments/transfers		(24	)		(21	)		(16	)		(21	)		(15	)		(61	)		(48	)

End of period	$	441		$	436		$	390		$	377		$	363		$	441		$	363

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	346		$	334		$	319		$	338		$	326		$	999		$	950
Capital Markets (c)	$	207		$	205		$	180		$	230		$	212		$	592		$	547
Commercial mortgage banking activities
Commercial mortgage loans held for sale (d)	$	21		$	47		$	26		$	42		$	32		$	94		$	84
Commercial mortgage loan servicing income (e)		70			65			56			58			56			191			164
Commercial mortgage servicing rights valuation, net of economic hedge (f)		1			8			16			5			8			25			33

Total	$	92		$	120		$	98		$	105		$	96		$	310		$	281
Average Loans (by C&IB business)
Corporate Banking	$	57,685		$	58,419		$	58,227		$	56,746		$	54,678		$	58,108		$	53,530
Real Estate		31,356			30,574			29,918			29,163			28,111			30,621			27,260
Business Credit		14,678			14,610			14,217			13,849			13,481			14,503			13,074
Equipment Finance		10,990			10,936			10,941			10,805			10,582			10,956			10,362
Other		1,454			1,547			1,765			1,642			1,848			1,588			2,230

Total average loans	$	116,163		$	116,086		$	115,068		$	112,205		$	108,700		$	115,776		$	106,456
Total loans (g)	$	116,238		$	115,708		$	114,946		$	113,935		$	109,792
Net carrying amount of commercial mortgage servicing rights (g)	$	505		$	543		$	494		$	506		$	532
Credit-related statistics:
Nonperforming assets (g)	$	484		$	463		$	516		$	557		$	616
Purchased impaired loans (g) (h)	$	153		$	181		$	221		$	246		$	316
Net charge-offs (recoveries)	$	26		$	(19	)	$	(1	)	$	(2	)	$	(7	)	$	6		$	10

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

(b)	Represents consolidated PNC amounts. Our third 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															Nine months ended
Dollars in millions, except as noted	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
INCOME STATEMENT
Net interest income	$	71		$	71		$	73		$	74		$	72		$	215		$	215
Noninterest income		207			243			208			207			205			658			611

Total revenue		278			314			281			281			277			873			826
Provision for credit losses (benefit)		(2	)		1			12			(3	)		(4	)		11			2
Noninterest expense		211			215			210			211			209			636			610

Pretax earnings		69			98			59			73			72			226			214
Income taxes		25			36			22			28			26			83			78

Earnings	$	44		$	62		$	37		$	45		$	46		$	143		$	136

AVERAGE BALANCE SHEET
Loans
Consumer	$	5,630		$	5,687		$	5,650		$	5,606		$	5,497		$	5,656		$	5,407
Commercial and commercial real estate		865			943			932			954			970			901			997
Residential mortgage		939			893			865			854			822			899			794

Total loans		7,434			7,523			7,447			7,414			7,289			7,456			7,198
Goodwill and other intangible assets		222			230			238			247			255			230			264
Other assets		246			252			258			255			231			236			225

Total assets	$	7,902		$	8,005		$	7,943		$	7,916		$	7,775		$	7,922		$	7,687

Deposits
Noninterest-bearing demand	$	1,220		$	1,343		$	1,345		$	1,436		$	1,362		$	1,207		$	1,342
Interest-bearing demand		4,125			4,013			4,241			4,152			3,857			4,126			3,887
Money market		5,462			5,125			4,621			4,025			4,005			5,072			3,918

Total transaction deposits		10,807			10,481			10,207			9,613			9,224			10,405			9,147
CDs/IRAs/savings deposits		505			455			455			467			463			472			448

Total deposits		11,312			10,936			10,662			10,080			9,687			10,877			9,595
Other liabilities		42			43			47			53			51			43			51

Total liabilities	$	11,354		$	10,979		$	10,709		$	10,133		$	9,738		$	10,920		$	9,646

PERFORMANCE RATIOS
Return on average assets		2.21	%		3.11	%		1.89	%		2.26	%		2.35	%		2.41	%		2.37	%
Noninterest income to total revenue		74			77			74			74			74			75			74
Efficiency		76			68			75			75			75			73			74

OTHER INFORMATION
Total nonperforming assets (b)	$	52		$	56		$	63		$	66		$	73
Purchased impaired loans (b) (c)	$	75		$	77		$	82		$	83		$	89
Total net charge-offs	$	3		$	7		$	4		$	—		$	—		$	14		$	3
CLIENT ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	110		$	113		$	115		$	115		$	113
Institutional		146			149			150			148			146

Total	$	256		$	262		$	265			263			259

Asset Type
Equity	$	142		$	152		$	151		$	151		$	147
Fixed income		73			73			74			72			72
Liquidity/Other		41			37			40			40			40

Total	$	256		$	262		$	265		$	263		$	259

Discretionary client assets under management
Personal	$	84		$	86		$	88		$	87		$	85
Institutional		48			48			48			48			47

Total	$	132		$	134		$	136			135			132

Asset Type
Equity	$	70		$	75		$	75		$	75		$	72
Fixed income		40			41			41			40			40
Liquidity/Other		22			18			20			20			20

Total	$	132		$	134		$	136		$	135		$	132

Nondiscretionary client assets under administration
Personal	$	26		$	27		$	27		$	28		$	28
Institutional		98			101			102			100			99

Total	$	124		$	128		$	129			128			127

Asset Type
Equity	$	72		$	77		$	76		$	76		$	75
Fixed income		33			32			33			32			32
Liquidity/Other		19			19			20			20			20

Total	$	124		$	128		$	129		$	128		$	127

(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															Nine months ended
Dollars in millions, except as noted	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
INCOME STATEMENT
Net interest income	$	31		$	30		$	30		$	34		$	38		$	91		$	115
Noninterest income
Loan servicing revenue
Servicing fees		49			46			48			54			53			143			170
Mortgage servicing rights valuation, net of economic hedge		12			33			25			1			11			70			11
Loan sales revenue		75			99			104			93			85			278			327
Other		(1	)		(2	)								(2	)		(3	)		(5	)

Total noninterest income		135			176			177			148			147			488			503

Total revenue		166			206			207			182			185			579			618
Provision for credit losses (benefit)		2			(2	)		2			(1	)		(1	)		2			(1	)
Noninterest expense		171			178			161			196			168			510			550

Pretax earnings (loss)		(7	)		30			44			(13	)		18			67			69
Income taxes (benefit)		(3	)		11			16			(4	)		6			24			25

Earnings (loss)	$	(4	)	$	19		$	28		$	(9	)	$	12		$	43		$	44

AVERAGE BALANCE SHEET
Portfolio loans	$	1,080		$	1,163		$	1,282		$	1,479		$	1,506		$	1,175		$	1,759
Loans held for sale		1,225			1,107			1,147			1,090			1,186			1,160			1,130
Mortgage servicing rights (MSR)		1,108			948			843			948			1,002			967			1,036
Other assets		3,100			3,918			3,973			4,246			3,724			3,660			3,964

Total assets	$	6,513		$	7,136		$	7,245		$	7,763		$	7,418		$	6,962		$	7,889

Deposits	$	2,529		$	2,497		$	2,215		$	2,302		$	2,415		$	2,415		$	2,279
Borrowings and other liabilities		1,462			2,436			2,840			3,057			2,601			2,241			2,819

Total liabilities	$	3,991		$	4,933		$	5,055		$	5,359		$	5,016		$	4,656		$	5,098

PERFORMANCE RATIOS
Return on average assets		(.24	)%		1.07	%		1.57	%		(.46	)%		.64	%		.83	%		.75	%
Noninterest income to total revenue		81			85			86			81			79			84			81
Efficiency		103			86			78			108			91			88			89

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO SERVICED FOR THIRD PARTIES (in billions)
Beginning of period	$	115		$	113		$	108		$	111		$	111		$	108		$	114
Acquisitions		10			6			8						2			24			4
Additions		2			2			2			1			3			6			7
Repayments/transfers		(5	)		(6	)		(5	)		(4	)		(5	)		(16	)		(14	)

End of period	$	122		$	115		$	113		$	108		$	111		$	122		$	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		4.29	%		4.35	%		4.41	%		4.47	%		4.49	%
MSR asset value (in billions)	$	1.0		$	1.0		$	.8		$	.8		$	1.0
MSR capitalization value (in basis points)		79			88			74			78			88
Weighted-average servicing fee (in basis points)		27			27			27			27			27

RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	97		$	106		$	107		$	108		$	101		$	107		$	131
(Benefit) / Provision		2			1			1			4			13			4			(4	)
Losses - loan repurchases		(4	)		(10	)		(2	)		(5	)		(6	)		(16	)		(19	)

End of period	$	95		$	97		$	106		$	107		$	108		$	95		$	108

OTHER INFORMATION
Loan origination volume (in billions)	$	2.7		$	2.9		$	2.6		$	2.4		$	2.6		$	8.2		$	7.1
Loan sale margin percentage		2.80	%		3.44	%		4.09	%		3.96	%		3.80	%		3.43	%		4.57	%
Percentage of originations represented by:
Purchase volume (c)		55	%		50	%		31	%		42	%		50	%		46	%		47	%
Refinance volume		45	%		50	%		69	%		58	%		50	%		54	%		53	%
Total nonperforming assets (b)	$	88		$	88		$	105		$	120		$	135

(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															Nine months ended
Dollars in millions	September 30 2015			June 30 2015			March 31 2015			December 31 2014			September 30 2014			September 30 2015			September 30 2014
INCOME STATEMENT
Net interest income	$	90		$	100		$	112		$	122		$	146		$	302		$	425
Noninterest income		16			9			9			18			6			34			22

Total revenue		106			109			121			140			152			336			447
Provision for credit losses (benefit)		(25	)		(5	)		(31	)		(20	)		(8	)		(61	)		(99	)
Noninterest expense		23			26			24			39			30			73			86

Pretax earnings		108			88			128			121			130			324			460
Income taxes		40			32			47			45			48			119			169

Earnings	$	68		$	56		$	81		$	76		$	82		$	205		$	291

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	102		$	114		$	125		$	149		$	164		$	114		$	190
Lease financing		632			629			625			645			689			628			686

Total commercial lending		734			743			750			794			853			742			876

Consumer Lending:
Home equity		2,706			2,854			3,021			3,154			3,328			2,859			3,477
Residential real estate		3,741			4,023			4,184			4,399			4,794			3,981			4,952

Total consumer lending		6,447			6,877			7,205			7,553			8,122			6,840			8,429

Total portfolio loans		7,181			7,620			7,955			8,347			8,975			7,582			9,305
Other assets (b)		(721	)		(706	)		(679	)		(678	)		(744	)		(702	)		(742	)

Total assets	$	6,460		$	6,914		$	7,276		$	7,669		$	8,231		$	6,880		$	8,563

Deposits and other liabilities	$	218		$	222		$	224		$	219		$	223		$	221		$	227

Total liabilities	$	218		$	222		$	224		$	219		$	223		$	221		$	227

PERFORMANCE RATIOS
Return on average assets		4.18	%		3.25	%		4.51	%		3.93	%		3.95	%		3.98	%		4.54	%
Noninterest income to total revenue		15			8			7			13			4			10			5
Efficiency		22			24			20			28			20			22			19

OTHER INFORMATION
Nonperforming assets (c)	$	571		$	616		$	669		$	710		$	731
Purchased impaired loans (c) (d)	$	3,411		$	3,663		$	3,808		$	3,943		$	4,147
Net charge-offs (recoveries)	$	(1	)	$	(7	)	$	—		$	12		$	(6	)	$	(8	)	$	35
Annualized net charge-off ratio		(.05	)%		(.36	)%		—	%		.57	%		(.27	)%		(.14	)%		.50	%
LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	98		$	108		$	120		$	130		$	162
Lease financing		633			630			626			625			691

Total commercial lending		731			738			746			755			853

Consumer Lending:
Home equity		2,586			2,765			2,944			3,091			3,242
Residential real estate		3,625			3,941			4,139			4,290			4,665

Total consumer lending		6,211			6,706			7,083			7,381			7,907

Total loans	$	6,942		$	7,444		$	7,829		$	8,136		$	8,760

(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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