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

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EX-99.2 - EXHIBIT 99.2 - PNC FINANCIAL SERVICES GROUP, INC.	a2q18earningsslides8k.htm
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	q220188-kfs.htm

Exhibit 99.1

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

(UNAUDITED)



Consolidated Results:	Page
Income Statement	1
Balance Sheet	2
Average Balance Sheet	3
Details of Net Interest Margin	4
Per Share Related Information	5
Loans	5
Allowance for Loan and Lease Losses	6
Nonperforming Assets	7-8
Accruing Loans Past Due	9

Business Segment Results:
Descriptions	10
Period End Employees	10
Income and Revenue	11
Retail Banking	12-13
Corporate & Institutional Banking	14
Asset Management Group	15

Glossary of Terms	16-18

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 13, 2018. 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, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally. PNC's primary geographic markets are located in the Mid-Atlantic, Midwest and Southeast. PNC also provides certain products and services internationally.



THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Second Quarter 2018 Financial Supplement (Unaudited)
Financial Supplement Table Reference

Table	Description	Page
1	Consolidated Income Statement	1
2	Consolidated Balance Sheet	2
3	Average Consolidated Balance Sheet	3
4	Details of Net Interest Margin	4
5	Per Share Related Information	5
6	Details of Loans	5
7	Change in Allowance for Loan and Lease Losses	6
8	Nonperforming Assets by Type	7
9	Change in Nonperforming Assets	8
10	Largest Individual Nonperforming Assets at June 30, 2018	8
11	Accruing Loans Past Due 30 to 59 Days	9
12	Accruing Loans Past Due 60 to 89 Days	9
13	Accruing Loans Past Due 90 Days or More	9
14	Period End Employees	10
15	Summary of Business Segment Income and Revenue	11
16	Retail Banking	12-13
17	Corporate & Institutional Banking	14
18	Asset Management Group	15



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Table 1: Consolidated Income Statement (Unaudited)



	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
In millions, except per share data	2018			2018			2017			2017			2017			2018			2017
Interest Income
Loans	$	2,345		$	2,228		$	2,154		$	2,140		$	2,040		$	4,573		$	3,944
Investment securities	557			512			509			501			495			1,069			988
Other	180			178			162			154			139			358			262
Total interest income	3,082			2,918			2,825			2,795			2,674			6,000			5,194
Interest Expense
Deposits	261			213			190			170			143			474			263
Borrowed funds	408			344			290			280			273			752			513
Total interest expense	669			557			480			450			416			1,226			776
Net interest income	2,413			2,361			2,345			2,345			2,258			4,774			4,418
Noninterest Income
Asset management	456			455			720			421			398			911			801
Consumer services	381			357			366			357			360			738			692
Corporate services (a)	487			429			458			404			466			916			880
Residential mortgage	84			97			29			104			104			181			217
Service charges on deposits	169			167			183			181			170			336			331
Other (a) (b)	334			245			159			313			304			579			605
Total noninterest income	1,911			1,750			1,915			1,780			1,802			3,661			3,526
Total revenue	4,324			4,111			4,260			4,125			4,060			8,435			7,944
Provision For Credit Losses	80			92			125			130			98			172			186
Noninterest Expense
Personnel	1,356			1,354			1,449			1,286			1,276			2,710			2,533
Occupancy	203			218			240			204			202			421			424
Equipment	281			273			274			259			281			554			532
Marketing	75			55			60			62			67			130			122
Other	669			627			1,038			645			653			1,296			1,270
Total noninterest expense	2,584			2,527			3,061			2,456			2,479			5,111			4,881
Income before income taxes (benefit) and noncontrolling interests	1,660			1,492			1,074			1,539			1,483			3,152			2,877
Income taxes (benefit)	304			253			(1,017		)	413			386			557			706
Net income	1,356			1,239			2,091			1,126			1,097			2,595			2,171
Less: Net income attributable to noncontrolling interests	10			10			11			12			10			20			27
Preferred stock dividends (c)	55			63			55			63			55			118			118
Preferred stock discount accretion and redemptions	1			1			2			1			2			2			23
Net income attributable to common shareholders	$	1,290		$	1,165		$	2,023		$	1,050		$	1,030		$	2,455		$	2,003
Earnings Per Common Share
Basic	$	2.74		$	2.45		$	4.23		$	2.18		$	2.12		$	5.19		$	4.10
Diluted	$	2.72		$	2.43		$	4.18		$	2.16		$	2.10		$	5.15		$	4.05
Average Common Shares Outstanding
Basic	469			473			476			479			484			471			486
Diluted	472			476			480			483			488			474			491
Efficiency	60		%	61		%	72		%	60		%	61		%	61		%	61		%
Noninterest income to total revenue	44		%	43		%	45		%	43		%	44		%	43		%	44		%
Effective tax rate (d)	18.3		%	17.0		%	(94.7		)%	26.8		%	26.0		%	17.7		%	24.5		%

(a)

In the first quarter 2018, we reclassified operating lease income to corporate services noninterest income from other noninterest income. Prior period amounts were reclassified for operating lease income of $35 million, $34 million and $31 million for the three months ended December 31, 2017, September 30, 2017 and June 30, 2017, respectively, and $53 million for the six months ended June 30, 2017.


(b)	Includes net gains (losses) on sales of securities of $(3) million, $(1) million, $(3) million, $(1) million, and $13 million for the quarters ended June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017, respectively, and $(4) million and $11 million for the six months ended June 30, 2018 and June 30, 2017, respectively.


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

(d)

The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax. The first and second quarter 2018 results reflected the change in the statutory federal income tax rate from 35% to 21%, effective as of January 1, 2018, as a result of the new federal tax legislation. The fourth quarter 2017 results benefited from an income tax benefit from the new federal tax legislation primarily attributable to revaluation of deferred tax liabilities at the lower statutory tax rate. Where certain income tax effects could be reasonably estimated, these were included as provisional amounts as of December 31, 2017. As a result, these provisional amounts could be adjusted during the measurement period, which will end in December 2018. No changes were made to these provisional amounts during the first or second quarters of 2018.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Table 2: Consolidated Balance Sheet (Unaudited)



	June 30			March 31			December 31			September 30			June 30
In millions, except par value	2018			2018			2017			2017			2017
Assets
Cash and due from banks	$	5,425		$	4,649		$	5,249		$	4,736		$	5,039
Interest-earning deposits with banks (a)	21,972			28,821			28,595			24,713			22,482
Loans held for sale (b)	1,325			965			2,655			1,764			2,030
Investment securities – available for sale	60,275			56,018			57,618			57,254			58,878
Investment securities – held to maturity	19,850			18,544			18,513			17,740			17,553
Loans (b)	222,855			221,614			220,458			221,109			218,034
Allowance for loan and lease losses	(2,581		)	(2,604		)	(2,611		)	(2,605		)	(2,561		)
Net loans	220,274			219,010			217,847			218,504			215,473
Equity investments (c)	12,430			12,008			11,392			11,009			10,819
Mortgage servicing rights	2,045			1,979			1,832			1,854			1,867
Goodwill	9,218			9,218			9,173			9,163			9,163
Other (b)	27,897			27,949			27,894			28,454			28,886
Total assets	$	380,711		$	379,161		$	380,768		$	375,191		$	372,190
Liabilities
Deposits
Noninterest-bearing	$	79,047		$	78,303		$	79,864		$	79,967		$	79,550
Interest-bearing	185,838			186,401			185,189			180,768			179,626
Total deposits	264,885			264,704			265,053			260,735			259,176
Borrowed funds
Federal Home Loan Bank borrowings	22,036			19,537			21,037			20,538			19,039
Bank notes and senior debt	27,596			28,773			28,062			26,467			26,054
Subordinated debt	4,781			5,121			5,200			5,601			6,111
Other (b)	4,809			4,608			4,789			4,958			5,202
Total borrowed funds	59,222			58,039			59,088			57,564			56,406
Allowance for unfunded loan commitments and letters of credit	289			290			297			293			304
Accrued expenses and other liabilities	9,340			9,093			8,745			10,147			10,119
Total liabilities	333,736			332,126			333,183			328,739			326,005
Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 542 shares	2,710			2,710			2,710			2,710			2,710
Capital surplus	16,250			16,227			16,374			16,343			16,326
Retained earnings	37,201			36,266			35,481			33,819			33,133
Accumulated other comprehensive income (loss)	(940		)	(699		)	(148		)	(22		)	(98		)
Common stock held in treasury at cost: 77, 72, 69, 66 and 62 shares	(8,317		)	(7,535		)	(6,904		)	(6,462		)	(5,987		)
Total shareholders’ equity	46,904			46,969			47,513			46,388			46,084
Noncontrolling interests	71			66			72			64			101
Total equity	46,975			47,035			47,585			46,452			46,185
Total liabilities and equity	$	380,711		$	379,161		$	380,768		$	375,191		$	372,190


(a)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $21.6 billion, $28.6 billion, $28.3 billion, $24.3 billion and $22.1 billion as of June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017, respectively.


(b)	Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2018 Form 10-Q included, and our second quarter 2018 Form 10-Q will include, additional information regarding these items.

(c)

Amounts include our equity interest in BlackRock. The amount at March 31, 2018 included $.6 billion of trading and available for sale securities, primarily money market funds, that were reclassified to Equity investments on January 1, 2018 in accordance with the adoption of Accounting Standards Update 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities.


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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3



Table 3: Average Consolidated Balance Sheet (Unaudited) (a)
	Three months ended										Six months ended
	June 30		March 31		December 31		September 30		June 30		June 30		June 30
In millions	2018		2018		2017		2017		2017		2018		2017
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	26,527	$	25,438	$	25,338	$	25,493	$	25,862	$	25,986	$	26,122
Non-agency	2,271		2,398		2,577		2,758		2,947		2,334		3,037
Commercial mortgage-backed	4,449		4,534		4,542		4,838		5,493		4,491		5,705
Asset-backed	5,161		5,158		5,330		5,546		5,863		5,160		5,927
U.S. Treasury and government agencies	15,719		14,307		13,646		13,081		12,881		15,017		12,990
Other	4,112		4,233		4,940		5,011		5,093		4,172		5,193
Total securities available for sale	58,239		56,068		56,373		56,727		58,139		57,160		58,974
Securities held to maturity
Residential mortgage-backed	15,608		14,818		13,976		13,549		12,790		15,216		12,323
Commercial mortgage-backed	807		902		963		1,211		1,393		854		1,425
Asset-backed	194		199		220		358		490		196		523
U.S. Treasury and government agencies	747		743		739		561		533		745		531
Other	1,884		1,926		1,974		2,000		2,007		1,904		2,024
Total securities held to maturity	19,240		18,588		17,872		17,679		17,213		18,915		16,826
Total investment securities	77,479		74,656		74,245		74,406		75,352		76,075		75,800
Loans
Commercial	113,349		111,462		111,365		109,503		106,944		112,411		105,024
Commercial real estate	28,888		28,901		29,432		29,676		29,655		28,894		29,418
Equipment lease financing	7,494		7,845		7,670		7,704		7,602		7,670		7,550
Consumer	55,387		55,588		55,814		56,062		56,342		55,487		56,591
Residential real estate	17,566		17,308		16,840		16,273		15,830		17,437		15,741
Total loans	222,684		221,104		221,121		219,218		216,373		221,899		214,324
Interest-earning deposits with banks (b)	21,017		25,667		25,567		23,859		22,543		23,329		23,363
Other interest-earning assets	6,905		7,904		8,759		9,024		9,748		7,402		9,076
Total interest-earning assets	328,085		329,331		329,692		326,507		324,016		328,705		322,563
Noninterest-earning assets	47,542		46,944		47,136		46,890		46,286		47,244		45,807
Total assets	$	375,627	$	376,275	$	376,828	$	373,397	$	370,302	$	375,949	$	368,370
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	56,199	$	58,523	$	60,954	$	62,325	$	62,157	$	57,355	$	63,034
Demand	60,409		59,620		57,128		56,743		57,513		60,017		57,157
Savings	51,115		48,451		45,817		43,869		42,128		49,791		40,620
Time deposits	16,634		16,844		17,438		17,571		17,214		16,737		17,136
Total interest-bearing deposits	184,357		183,438		181,337		180,508		179,012		183,900		177,947
Borrowed funds
Federal Home Loan Bank borrowings	20,956		20,721		19,565		19,190		20,405		20,839		20,410
Bank notes and senior debt	28,787		28,987		27,778		26,602		24,817		28,887		23,910
Subordinated debt	4,855		5,179		5,433		5,970		6,607		5,016		6,854
Other	4,368		4,751		5,261		5,254		5,695		4,558		5,067
Total borrowed funds	58,966		59,638		58,037		57,016		57,524		59,300		56,241
Total interest-bearing liabilities	243,323		243,076		239,374		237,524		236,536		243,200		234,188
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits	76,632		77,222		80,152		78,931		77,375		76,925		77,710
Accrued expenses and other liabilities	8,944		9,118		10,801		10,749		10,432		9,031		10,258
Equity	46,728		46,859		46,501		46,193		45,959		46,793		46,214
Total liabilities and equity	$	375,627	$	376,275	$	376,828	$	373,397	$	370,302	$	375,949	$	368,370


(a)	Calculated using average daily balances.


(b)	Amounts include average balances held with the Federal Reserve Bank of Cleveland of $20.7 billion, $25.4 billion, $25.3 billion, $23.4 billion and $22.1 billion for the three months ended June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017, respectively, and $23.1 billion and $22.9 billion for six months ended June 30, 2018 and June 30, 2017, respectfully.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4



Table 4: Details of Net Interest Margin (Unaudited) (a)
	Three months ended										Six months ended
	June 30		March 31		December 31		September 30		June 30		June 30		June 30
	2018		2018		2017		2017		2017		2018		2017
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	2.68	%	2.60	%	2.58	%	2.61	%	2.51	%	2.64	%	2.54	%
Non-agency	6.52	%	5.99	%	4.29	%	5.91	%	5.58	%	6.25	%	5.59	%
Commercial mortgage-backed	2.76	%	2.75	%	4.68	%	2.71	%	2.56	%	2.76	%	2.45	%
Asset-backed	3.11	%	2.87	%	2.82	%	2.53	%	2.48	%	2.99	%	2.49	%
U.S. Treasury and government agencies	2.25	%	2.07	%	1.79	%	1.83	%	1.78	%	2.17	%	1.72	%
Other	4.06	%	3.17	%	3.32	%	3.08	%	3.08	%	3.61	%	3.00	%
Total securities available for sale	2.85	%	2.69	%	2.73	%	2.63	%	2.56	%	2.77	%	2.54	%
Securities held to maturity
Residential mortgage-backed	2.89	%	2.84	%	2.74	%	2.81	%	2.82	%	2.86	%	2.80	%
Commercial mortgage-backed	3.71	%	3.76	%	4.11	%	4.42	%	4.30	%	3.74	%	3.89	%
Asset-backed	3.48	%	2.90	%	2.66	%	2.53	%	2.35	%	3.19	%	2.28	%
U.S. Treasury and government agencies	2.83	%	2.80	%	2.85	%	3.07	%	3.10	%	2.82	%	3.09	%
Other	4.39	%	4.44	%	5.28	%	5.30	%	5.28	%	4.42	%	5.31	%
Total securities held to maturity	3.07	%	3.05	%	3.10	%	3.20	%	3.22	%	3.06	%	3.19	%
Total investment securities	2.91	%	2.78	%	2.82	%	2.77	%	2.71	%	2.85	%	2.69	%
Loans
Commercial	3.97	%	3.74	%	3.59	%	3.54	%	3.45	%	3.86	%	3.35	%
Commercial real estate	4.04	%	3.81	%	3.68	%	3.65	%	3.48	%	3.93	%	3.38	%
Equipment lease financing	3.16	%	3.68	%	2.33	%	3.71	%	3.65	%	3.43	%	3.49	%
Consumer	4.96	%	4.87	%	4.72	%	4.67	%	4.52	%	4.92	%	4.49	%
Residential real estate	4.36	%	4.40	%	4.41	%	4.45	%	4.55	%	4.38	%	4.55	%
Total loans	4.23	%	4.09	%	3.91	%	3.92	%	3.82	%	4.16	%	3.75	%
Interest-earning deposits with banks	1.78	%	1.52	%	1.33	%	1.26	%	1.04	%	1.64	%	.92	%
Other interest-earning assets	4.98	%	4.11	%	3.55	%	3.47	%	3.38	%	4.52	%	3.46	%
Total yield on interest-earning assets	3.78	%	3.59	%	3.45	%	3.45	%	3.35	%	3.68	%	3.29	%
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market	.64	%	.54	%	.45	%	.41	%	.30	%	.59	%	.27	%
Demand	.25	%	.21	%	.17	%	.14	%	.12	%	.23	%	.11	%
Savings	.74	%	.57	%	.51	%	.45	%	.45	%	.65	%	.44	%
Time deposits	.98	%	.88	%	.85	%	.79	%	.73	%	.93	%	.71	%
Total interest-bearing deposits	.57	%	.47	%	.42	%	.37	%	.32	%	.52	%	.30	%
Borrowed funds
Federal Home Loan Bank borrowings	2.23	%	1.76	%	1.48	%	1.37	%	1.23	%	2.00	%	1.16	%
Bank notes and senior debt	2.95	%	2.43	%	2.04	%	2.05	%	2.00	%	2.69	%	1.93	%
Subordinated debt	4.50	%	3.91	%	3.49	%	3.48	%	3.66	%	4.20	%	3.57	%
Other	1.82	%	2.18	%	1.74	%	1.60	%	1.67	%	2.01	%	1.54	%
Total borrowed funds	2.74	%	2.31	%	1.96	%	1.93	%	1.89	%	2.52	%	1.82	%
Total rate on interest-bearing liabilities	1.10	%	.91	%	.79	%	.75	%	.70	%	1.01	%	.66	%
Interest rate spread	2.68	%	2.68	%	2.66	%	2.70	%	2.65	%	2.67	%	2.63	%
Impact of noninterest-bearing sources (b)	.28		.23		.22		.21		.19		.27		.18
Net interest margin	2.96	%	2.91	%	2.88	%	2.91	%	2.84	%	2.94	%	2.81	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. To provide more meaningful comparisons of net interest yields for all earning assets, as well as net interest margins, we use interest income on a taxable-equivalent basis in calculating net interest 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 taxable investments. This adjustment is not permitted under generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017 were $29 million, $29 million, $54 million, $55 million and $54 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2018 and June 30, 2017 were $58 million and $106 million, respectively. Taxable equivalent amounts for the 2018 periods were calculated using a statutory federal income tax rate of 21%, reflecting the enactment of the new federal tax legislation effective January 1, 2018. Amounts for the 2017 periods were calculated using the previously applicable statutory federal income tax rate of 35%.


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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5



Table 5: Per Share Related Information (Unaudited)
	Three months ended										Six months ended
	June 30		March 31		December 31		September 30		June 30		June 30		June 30
In millions, except per share data	2018		2018		2017		2017		2017		2018		2017
Basic
Net income	$	1,356	$	1,239	$	2,091	$	1,126	$	1,097	$	2,595	$	2,171
Less:
Net income attributable to noncontrolling interests	10		10		11		12		10		20		27
Preferred stock dividends (a)	55		63		55		63		55		118		118
Preferred stock discount accretion and redemptions	1		1		2		1		2		2		23
Net income attributable to common shareholders	1,290		1,165		2,023		1,050		1,030		2,455		2,003
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares	5		5		8		5		4		10		10
Net income attributable to basic common shares	$	1,285	$	1,160	$	2,015	$	1,045	$	1,026	$	2,445	$	1,993
Basic weighted-average common shares outstanding	469		473		476		479		484		471		486
Basic earnings per common share	$	2.74	$	2.45	$	4.23	$	2.18	$	2.12	$	5.19	$	4.10
Diluted
Net income attributable to basic common shares	$	1,285	$	1,160	$	2,015	$	1,045	$	1,026	$	2,445	$	1,993
Less: Impact of BlackRock earnings per share dilution	3		2		8		3		1		5		5
Net income attributable to diluted common shares	$	1,282	$	1,158	$	2,007	$	1,042	$	1,025	$	2,440	$	1,988
Basic weighted-average common shares outstanding	469		473		476		479		484		471		486
Dilutive potential common shares	3		3		4		4		4		3		5
Diluted weighted-average common shares outstanding	472		476		480		483		488		474		491
Diluted earnings per common share	$	2.72	$	2.43	$	4.18	$	2.16	$	2.10	$	5.15	$	4.05


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

Table 6: Details of Loans (Unaudited)



	June 30		March 31		December 31		September 30		June 30
In millions	2018		2018		2017		2017		2017
Commercial lending
Commercial
Manufacturing	$	21,667	$	21,367	$	20,578	$	20,658	$	20,533
Retail/wholesale trade	19,299		18,232		17,846		18,256		18,101
Service providers	14,343		14,554		15,100		15,014		15,111
Real estate related (a)	12,688		12,701		12,496		12,174		12,179
Health care	9,564		9,937		9,739		9,659		9,541
Financial services	9,241		9,479		8,532		10,968		8,493
Transportation and warehousing	5,531		5,488		5,609		5,597		5,589
Other industries	21,034		20,550		20,627		18,991		19,010
Total commercial	113,367		112,308		110,527		111,317		108,557
Commercial real estate	28,946		28,835		28,978		29,516		29,489
Equipment lease financing	7,323		7,802		7,934		7,694		7,719
Total commercial lending	149,636		148,945		147,439		148,527		145,765
Consumer lending
Home equity	27,219		27,699		28,364		28,811		29,219
Residential real estate	17,805		17,456		17,212		16,601		16,049
Credit card	5,830		5,657		5,699		5,375		5,211
Other consumer
Automobile	13,892		13,295		12,880		12,743		12,488
Education	4,057		4,228		4,454		4,620		4,751
Other	4,416		4,334		4,410		4,432		4,551
Total consumer lending	73,219		72,669		73,019		72,582		72,269
Total loans	$	222,855	$	221,614	$	220,458	$	221,109	$	218,034

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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Allowance for Loan and Lease Losses (Unaudited)

Table 7: Change in Allowance for Loan and Lease Losses



	June 30			March 31			December 31			September 30			June 30
Three months ended - in millions	2018			2018			2017			2017			2017
Beginning balance	$	2,604		$	2,611		$	2,605		$	2,561		$	2,561
Gross charge-offs:
Commercial	(24		)	(28		)	(46		)	(39		)	(48		)
Commercial real estate	(2		)	(6		)	(15		)	(6		)	(2		)
Equipment lease financing	(2		)	(2		)	(5		)	(4		)	(1		)
Home equity	(33		)	(28		)	(25		)	(26		)	(38		)
Residential real estate	(4		)	(2		)	(1		)	(4		)
Credit card	(53		)	(56		)	(46		)	(44		)	(46		)
Other consumer
Automobile	(39		)	(38		)	(37		)	(31		)	(28		)
Education	(8		)	(9		)	(11		)	(7		)	(9		)
Other	(28		)	(24		)	(23		)	(24		)	(22		)
Total gross charge-offs	(193		)	(193		)	(209		)	(185		)	(194		)
Recoveries:
Commercial	16			16			20			17			20
Commercial real estate	8			6			7			6			8
Equipment lease financing	1			4			3			2			1
Home equity	23			21			24			24			23
Residential real estate	6			4			6			4			4
Credit card	6			6			5			5			6
Other consumer
Automobile	18			17			15			15			15
Education	2			2			2			2			2
Other	4			4			4			4			5
Total recoveries	84			80			86			79			84
Net (charge-offs) / recoveries:
Commercial	(8		)	(12		)	(26		)	(22		)	(28		)
Commercial real estate	6						(8		)				6
Equipment lease financing	(1		)	2			(2		)	(2		)
Home equity	(10		)	(7		)	(1		)	(2		)	(15		)
Residential real estate	2			2			5						4
Credit card	(47		)	(50		)	(41		)	(39		)	(40		)
Other consumer
Automobile	(21		)	(21		)	(22		)	(16		)	(13		)
Education	(6		)	(7		)	(9		)	(5		)	(7		)
Other	(24		)	(20		)	(19		)	(20		)	(17		)
Total net (charge-offs)	(109		)	(113		)	(123		)	(106		)	(110		)
Provision for credit losses	80			92			125			130			98
Net decrease / (increase) in allowance for unfunded loan commitments and letters of credit	1			7			(4		)	11			1
Other	5			7			8			9			11
Ending balance	$	2,581		$	2,604		$	2,611		$	2,605		$	2,561
Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)	.20		%	.21		%	.22		%	.19		%	.20		%
Allowance for loan and lease losses to total loans	1.16		%	1.18		%	1.18		%	1.18		%	1.17		%
Commercial lending net charge-offs	$	(3	)	$	(10	)	$	(36	)	$	(24	)	$	(22	)
Consumer lending net charge-offs	(106		)	(103		)	(87		)	(82		)	(88		)
Total net charge-offs	$	(109	)	$	(113	)	$	(123	)	$	(106	)	$	(110	)
Net charge-offs to average loans
Commercial lending	.01		%	.03		%	.10		%	.06		%	.06		%
Consumer lending	.58		%	.57		%	.48		%	.45		%	.49		%



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Details of Nonperforming Assets (Unaudited)

Table 8: Nonperforming Assets by Type



	June 30			March 31			December 31			September 30			June 30
In millions	2018			2018			2017			2017			2017
Nonperforming loans, including TDRs
Commercial lending
Commercial
Retail/wholesale trade	$	65		$	126		$	115		$	76		$	86
Manufacturing	49			67			55			63			65
Service providers	48			36			35			48			52
Real estate related (a)	22			25			33			37			26
Health care	15			13			15			23			33
Transportation and warehousing	3			3			27			15			16
Other industries	136			156			149			157			190
Total commercial	338			426			429			419			468
Commercial real estate	71			107			123			128			127
Equipment lease financing	5			4			2			3			4
Total commercial lending	414			537			554			550			599
Consumer lending (b)
Home equity	821			820			818			814			837
Residential real estate	381			391			400			423			439
Credit card	7			6			6			5			5
Other consumer
Automobile	87			79			76			71			66
Education and other	9			9			11			10			11
Total consumer lending	1,305			1,305			1,311			1,323			1,358
Total nonperforming loans (c)	1,719			1,842			1,865			1,873			1,957
OREO, foreclosed and other assets	135			162			170			194			196
Total nonperforming assets	$	1,854		$	2,004		$	2,035		$	2,067		$	2,153
Nonperforming loans to total loans	.77		%	.83		%	.85		%	.85		%	.90		%
Nonperforming assets to total loans, OREO, foreclosed and other assets	.83		%	.90		%	.92		%	.93		%	.99		%
Nonperforming assets to total assets	.49		%	.53		%	.53		%	.55		%	.58		%
Allowance for loan and lease losses to nonperforming loans	150		%	141		%	140		%	139		%	131		%


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


(b)	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.


(c)	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.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Details of Nonperforming Assets (Unaudited) (Continued)

Table 9: Change in Nonperforming Assets



	April 1, 2018 -			January 1, 2018 -			October 1, 2017 -			July 1, 2017 -			April 1, 2017 -
In millions	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Beginning balance	$	2,004		$	2,035		$	2,067		$	2,153		$	2,212
New nonperforming assets	276			249			307			303			436
Charge-offs and valuation adjustments	(145		)	(137		)	(141		)	(142		)	(152		)
Principal activity, including paydowns and payoffs	(199		)	(81		)	(87		)	(162		)	(161		)
Asset sales and transfers to loans held for sale	(34		)	(29		)	(40		)	(38		)	(58		)
Returned to performing status	(48		)	(33		)	(71		)	(47		)	(124		)
Ending balance	$	1,854		$	2,004		$	2,035		$	2,067		$	2,153

Table 10: Largest Individual Nonperforming Assets at June 30, 2018 (a)



In millions
Ranking	Outstandings	Industry
1	$38	Wholesale Trade
2	38	Information
3	26	Mining, Quarrying, Oil and Gas Extraction
4	24	Mining, Quarrying, Oil and Gas Extraction
5	21	Manufacturing
6	17	Service Providers
7	12	Real Estate, Rental and Leasing
8	10	Construction
9	8	Manufacturing
10	8	Nonfarm Nonresidential Properties
Total	$202
As a percent of total nonperforming assets		11%

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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Accruing Loans Past Due (Unaudited)

Table 11: Accruing Loans Past Due 30 to 59 Days (a)



	Amount										Percent of Total Outstandings
	Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30
Dollars in millions	2018		2018		2017		2017		2017		2018		2018		2017		2017		2017
Commercial	$	57	$	53	$	45	$	44	$	42	.05	%	.05	%	.04	%	.04	%	.04	%
Commercial real estate	18		21		27		8		4		.06	%	.07	%	.09	%	.03	%	.01	%
Equipment lease financing	12		18		17		4		2		.16	%	.23	%	.21	%	.05	%	.03	%
Home equity	97		94		78		74		61		.36	%	.34	%	.27	%	.26	%	.21	%
Residential real estate
Non government insured	66		66		90		75		78		.37	%	.38	%	.52	%	.45	%	.49	%
Government insured	63		64		61		60		51		.35	%	.37	%	.35	%	.36	%	.32	%
Credit card	40		40		43		40		34		.69	%	.71	%	.75	%	.74	%	.65	%
Other consumer
Automobile	82		77		79		71		44		.59	%	.58	%	.61	%	.56	%	.35	%
Education and other
Non government insured	18		22		25		30		24		.21	%	.26	%	.28	%	.33	%	.26	%
Government insured	66		72		80		80		93		.78	%	.84	%	.90	%	.88	%	1.00	%
Total	$	519	$	527	$	545	$	486	$	433	.23	%	.24	%	.25	%	.22	%	.20	%

Table 12: Accruing Loans Past Due 60 to 89 Days (a)



	Amount										Percent of Total Outstandings
	Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30
Dollars in millions	2018		2018		2017		2017		2017		2018		2018		2017		2017		2017
Commercial	$	41	$	22	$	25	$	28	$	26	.04	%	.02	%	.02	%	.03	%	.02	%
Commercial real estate	2		12		2		13		1		.01	%	.04	%	.01	%	.04	%	.00	%
Equipment lease financing	7		1		1		3		4		.10	%	.01	%	.01	%	.04	%	.05	%
Home equity	40		31		26		31		24		.15	%	.11	%	.09	%	.11	%	.08	%
Residential real estate
Non government insured	18		16		21		17		14		.10	%	.09	%	.12	%	.10	%	.09	%
Government insured	48		54		53		54		55		.27	%	.31	%	.31	%	.33	%	.34	%
Credit card	24		26		26		25		20		.41	%	.46	%	.46	%	.47	%	.38	%
Other consumer
Automobile	20		18		20		16		12		.14	%	.14	%	.16	%	.13	%	.10	%
Education and other
Non government insured	11		11		12		15		9		.13	%	.13	%	.14	%	.17	%	.10	%
Government insured	45		43		52		53		54		.53	%	.50	%	.59	%	.59	%	.58	%
Total	$	256	$	234	$	238	$	255	$	219	.11	%	.11	%	.11	%	.12	%	.10	%

Table 13: Accruing Loans Past Due 90 Days or More (a)



	Amount										Percent of Total Outstandings
	Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Jun. 30
Dollars in millions	2018		2018		2017		2017		2017		2018		2018		2017		2017		2017
Commercial	$	59	$	53	$	39	$	47	$	50	.05	%	.05	%	.04	%	.04	%	.05	%
Commercial real estate									2										.01	%
Residential real estate
Non government insured	14		13		24		12		11		.08	%	.07	%	.14	%	.07	%	.07	%
Government insured	339		360		462		406		400		1.90	%	2.06	%	2.68	%	2.45	%	2.49	%
Credit card	44		45		45		38		36		.75	%	.80	%	.79	%	.71	%	.69	%
Other consumer
Automobile	7		9		8		5		4		.05	%	.07	%	.06	%	.04	%	.03	%
Education and other
Non government insured	9		12		11		9		8		.11	%	.14	%	.12	%	.10	%	.09	%
Government insured	114		136		148		161		163		1.35	%	1.59	%	1.67	%	1.78	%	1.75	%
Total	$	586	$	628	$	737	$	678	$	674	.26	%	.28	%	.33	%	.31	%	.31	%

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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, insurance services, 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, Florida, North Carolina, Kentucky, Washington, D.C., Delaware, Virginia, Georgia, Alabama, Missouri, Wisconsin and South Carolina. Deposit products include checking, savings and money market accounts and certificates of deposit. Lending products include residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans and personal and small business loans and lines of credit. The residential mortgage loans are directly originated within our branch network and nationwide, and are typically underwritten to government agency and/or third-party standards, and either sold, servicing retained, or held on our balance sheet. Brokerage, investment management and cash management products and services include managed, education, retirement and trust accounts.

Corporate & Institutional Banking provides lending, treasury management, and capital markets-related products and services to mid-sized and large corporations, and government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. 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 underwriting, loan syndications, mergers and acquisitions advisory and equity capital markets advisory related services. We also provide commercial loan servicing and technology solutions for the commercial real estate finance industry. Products and services are provided nationally. We offer certain products and services internationally.

Asset Management Group provides 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. Our Hawthorn unit provides multi-generational family planning including estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative services, asset custody and customized performance reporting to ultra high net worth families. Institutional asset management provides advisory, custody and retirement administration services. The business also offers PNC proprietary mutual funds. Institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments, largely within our primary geographic markets.

BlackRock, in which we hold an equity investment, is a leading publicly-traded investment management firm providing a broad range of investment, risk management and technology 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, advisory and technology services and solutions to a broad base of institutional and wealth management investors. Our equity investment in BlackRock provides us with an additional source of noninterest income and increases our overall revenue diversification. BlackRock is a publicly-traded company, and additional information regarding its business is available in its filings with the Securities and Exchange Commission (SEC). At June 30, 2018, our economic interest in BlackRock was 22%.

Table 14: Period End Employees



	June 30	March 31	December 31	September 30	June 30
	2018	2018	2017	2017	2017
Full-time employees
Retail Banking	29,884	29,903	29,604	29,486	29,463
Other full-time employees	21,498	21,055	20,754	20,637	20,399
Total full-time employees	51,382	50,958	50,358	50,123	49,862
Part-time employees
Retail Banking	2,349	2,337	2,368	2,422	2,554
Other part-time employees	563	189	180	223	540
Total part-time employees	2,912	2,526	2,548	2,645	3,094
Total	54,294	53,484	52,906	52,768	52,956



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Table 15: Summary of Business Segment Income and Revenue (Unaudited) (a) (b)



	Three months ended											Six months ended
	June 30		March 31		December 31			September 30		June 30		June 30		June 30
In millions	2018		2018		2017			2017		2017		2018		2017
Income (loss)
Retail Banking	$	330	$	296	$	(145	)	$	232	$	230	$	626	$	443
Corporate & Institutional Banking	675		584		937			525		518		1,259		1,002
Asset Management Group	49		68		56			47		52		117		99
Other, including BlackRock (c)	302		291		1,243			322		297		593		627
Net income	$	1,356	$	1,239	$	2,091		$	1,126	$	1,097	$	2,595	$	2,171

Revenue
Retail Banking	$	1,955	$	1,853	$	1,535		$	1,819	$	1,784	$	3,808	$	3,508
Corporate & Institutional Banking	1,535		1,429		1,502			1,479		1,478		2,964		2,841
Asset Management Group	294		300		297			292		290		594		579
Other, including BlackRock (c)	540		529		926			535		508		1,069		1,016
Total revenue	$	4,324	$	4,111	$	4,260		$	4,125	$	4,060	$	8,435	$	7,944

(a)

Our business information is presented based on our internal management reporting practices. Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors.

(b)

Our business segment results for the 2018 periods presented reflected the change in the statutory federal income tax rate from 35% to 21%, effective as of January 1, 2018, as a result of the new federal tax legislation. Our business segment results for the fourth quarter of 2017 reflect the allocation of the impact of the new tax legislation to our business segments, primarily the revaluation of the net deferred tax positions allocated to the segments. Where certain income tax effects could be reasonably estimated, these were included as provisional amounts as of December 31, 2017. As a result, these provisional amounts could be adjusted during the measurement period, which will end in December 2018. No changes were made to these provisional amounts during the first or second quarters of 2018.


(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. We provide additional information on these activities in our Form 10-K and Form 10-Q filings with the SEC.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Table 16: Retail Banking (Unaudited) (a)



	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
Dollars in millions	2018			2018			2017			2017			2017			2018			2017
Income Statement
Net interest income	$	1,277		$	1,218		$	1,190		$	1,176		$	1,139		$	2,495		$	2,260
Noninterest income	678			635			345			643			645			1,313			1,248
Total revenue	1,955			1,853			1,535			1,819			1,784			3,808			3,508
Provision for credit losses	72			69			149			77			50			141			121
Noninterest expense	1,450			1,395			1,391			1,375			1,370			2,845			2,685
Pretax earnings (loss)	433			389			(5		)	367			364			822			702
Income taxes	103			93			140			135			134			196			259
Earnings (loss)	$	330		$	296		$	(145	)	$	232		$	230		$	626		$	443
Average Balance Sheet
Loans held for sale	$	629		$	652		$	819		$	802		$	730		$	640		$	786
Loans
Consumer
Home equity	$	24,177		$	24,608		$	24,933		$	25,173		$	25,413		$	24,391		$	25,506
Automobile	13,642			13,105			12,767			12,484			12,220			13,375			12,185
Education	4,181			4,409			4,567			4,723			4,913			4,294			5,021
Credit cards	5,728			5,619			5,450			5,280			5,137			5,674			5,129
Other	1,771			1,765			1,793			1,787			1,760			1,768			1,757
Total consumer	49,499			49,506			49,510			49,447			49,443			49,502			49,598
Commercial and commercial real estate	10,458			10,527			10,513			10,630			10,925			10,493			10,965
Residential mortgage	13,718			13,420			12,950			12,382			11,918			13,570			11,804
Total loans	$	73,675		$	73,453		$	72,973		$	72,459		$	72,286		$	73,565		$	72,367
Total assets	$	89,021		$	88,734		$	88,883		$	88,642		$	88,671		$	88,879		$	88,559
Deposits
Noninterest-bearing demand	$	30,712		$	29,779		$	30,344		$	30,222		$	29,540		$	30,248		$	29,285
Interest-bearing demand	42,802			41,939			40,954			40,762			41,465			42,373			41,059
Money market	30,799			32,330			33,922			35,671			37,523			31,560			38,416
Savings	46,426			43,838			41,536			39,908			38,358			45,139			36,851
Certificates of deposit	11,816			12,082			12,554			12,962			13,304			11,948			13,518
Total deposits	$	162,555		$	159,968		$	159,310		$	159,525		$	160,190		$	161,268		$	159,129
Performance Ratios
Return on average assets	1.49		%	1.35		%	(.65		)%	1.04		%	1.04		%	1.42		%	1.01		%
Noninterest income to total revenue	35		%	34		%	22		%	35		%	36		%	34		%	36		%
Efficiency	74		%	75		%	91		%	76		%	77		%	75		%	77		%


(a)	See notes (a) and (b) on page 11.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Retail Banking (Unaudited) (Continued)



	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
Dollars in millions, except as noted	2018			2018			2017			2017			2017			2018			2017
Supplemental Noninterest Income Information
Consumer services	$	287		$	266		$	279		$	273		$	277		$	553		$	527
Brokerage	$	88		$	86		$	81		$	77		$	78		$	174		$	154
Residential mortgage	$	84		$	97		$	29		$	104		$	104		$	181		$	217
Service charges on deposits	$	164		$	160		$	177		$	174		$	163		$	324		$	317
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)	$	124		$	125		$	127		$	129		$	131
Serviced portfolio acquisitions	$	3		$	1		$	1		$	2		$	8		$	4		$	16
MSR asset value (b)	$	1.3		$	1.3		$	1.2		$	1.2		$	1.2
MSR capitalization value (in basis points) (b)	104			101			92			95			95
Servicing income: (in millions)
Servicing fees, net (c)	$	39		$	51		$	45		$	46		$	44		$	90		$	96
Mortgage servicing rights valuation, net of economic hedge	$	13		$	9		$	(60	)	$	7		$	11		$	22		$	23
Residential mortgage loan statistics
Loan origination volume (in billions)	$	2.0		$	1.7		$	2.4		$	2.5		$	2.2		$	3.7		$	4.1
Loan sale margin percentage	2.21		%	2.83		%	2.71		%	2.80		%	2.74		%	2.49		%	2.84		%
Percentage of originations represented by:
Purchase volume (d)	71		%	56		%	50		%	57		%	61		%	65		%	53		%
Refinance volume	29		%	44		%	50		%	43		%	39		%	35		%	47		%
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)	54		%	54		%	54		%	54		%	52		%	54		%	52		%
Digital consumer customers (f)	65		%	64		%	63		%	62		%	62		%	65		%	61		%
Credit-related statistics
Nonperforming assets	$	1,141		$	1,131		$	1,129		$	1,126		$	1,149
Net charge-offs	$	112		$	100		$	99		$	85		$	87		$	212		$	187
Other statistics
ATMs	9,043			9,047			9,051			8,987			8,972
Branches (g)	2,404			2,442			2,459			2,474			2,481
Brokerage account client assets (in billions) (h)	$	49		$	49		$	49		$	48		$	46


(a)	Represents mortgage loan servicing balances for third parties and the related income.


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


(c)	Servicing fees net of impact of decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan prepayments and loans that were paid down or paid off during the period.


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


(e)	Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.


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


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


(h)	Includes cash and money market balances.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Table 17: Corporate & Institutional Banking (Unaudited) (a)



	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
Dollars in millions	2018			2018			2017			2017			2017			2018			2017
Income Statement
Net interest income	$	900		$	882		$	898		$	924		$	890		$	1,782		$	1,729
Noninterest income	635			547			604			555			588			1,182			1,112
Total revenue	1,535			1,429			1,502			1,479			1,478			2,964			2,841
Provision for credit losses (benefit)	15			41			(14		)	62			87			56			112
Noninterest expense	639			626			643			599			602			1,265			1,186
Pretax earnings	881			762			873			818			789			1,643			1,543
Income taxes (benefit)	206			178			(64		)	293			271			384			541
Earnings	$	675		$	584		$	937		$	525		$	518		$	1,259		$	1,002
Average Balance Sheet
Loans held for sale	$	594		$	1,189		$	845		$	917		$	716		$	890		$	915
Loans
Commercial	$	102,722		$	100,802		$	100,726		$	98,794		$	96,012		$	101,767		$	94,067
Commercial real estate	26,715			26,732			27,259			27,559			27,575			26,723			27,334
Equipment lease financing	7,495			7,845			7,670			7,704			7,602			7,669			7,550
Total commercial lending	136,932			135,379			135,655			134,057			131,189			136,159			128,951
Consumer	39			77			107			222			278			58			304
Total loans	$	136,971		$	135,456		$	135,762		$	134,279		$	131,467		$	136,217		$	129,255
Total assets	$	153,619		$	151,909		$	151,721		$	150,948		$	148,267		$	152,769		$	145,445
Deposits
Noninterest-bearing demand	$	44,383		$	45,896		$	48,116		$	47,180		$	46,327		$	45,136		$	46,872
Money market	22,832			23,406			23,992			23,413			21,321			23,118			21,204
Other	18,589			18,592			17,247			16,879			16,016			18,590			15,706
Total deposits	$	85,804		$	87,894		$	89,355		$	87,472		$	83,664		$	86,844		$	83,782
Performance Ratios
Return on average assets	1.76		%	1.56		%	2.45		%	1.38		%	1.40		%	1.66		%	1.39		%
Noninterest income to total revenue	41		%	38		%	40		%	38		%	40		%	40		%	39		%
Efficiency	42		%	44		%	43		%	41		%	41		%	43		%	42		%
Other Information
Consolidated revenue from: (b)
Treasury Management (c)	$	446		$	419		$	401		$	384		$	372		$	865		$	731
Capital Markets (c)	$	283		$	258		$	271		$	231		$	268		$	541		$	515
Commercial mortgage banking activities
Commercial mortgage loans held for sale (d)	$	38		$	14		$	42		$	22		$	38		$	52		$	51
Commercial mortgage loan servicing income (e)	60			55			59			56			55			115			113
Commercial mortgage servicing rights valuation, net of economic hedge (f)	20			4			13			6			19			24			35
Total	$	118		$	73		$	114		$	84		$	112		$	191		$	199
MSR asset value (g)	$	748		$	723		$	668		$	628		$	618
Average Loans by C&IB business
Corporate Banking	$	58,523		$	57,856		$	57,064		$	56,867		$	54,937		$	58,191		$	54,416
Real Estate	37,419			37,252			38,949			38,516			38,318			37,336			37,730
Business Credit	17,336			16,818			16,612			16,097			15,645			17,078			15,244
Equipment Finance	14,352			14,243			13,912			13,744			13,481			14,298			12,982
Commercial Banking	7,065			7,066			6,957			7,042			7,124			7,065			7,057
Other	2,276			2,221			2,268			2,013			1,962			2,250			1,826
Total average loans	$	136,971		$	135,456		$	135,762		$	134,279		$	131,467		$	136,218		$	129,255
Credit-related statistics
Nonperforming assets (g)	$	385		$	508		$	531		$	549		$	586
Net charge-offs	$	(2	)	$	9		$	29		$	22		$	21		$	7		$	42


(a)	See notes (a) and (b) on page 11.


(b)	Represents consolidated amounts.


(c)	Includes amounts reported in net interest income and noninterest income.


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


(e)	Includes net interest income and noninterest income (primarily in corporate service fees) from loan servicing net of reduction in commercial mortgage servicing rights due to amortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.


(f)	Includes amounts reported in corporate service fees.


(g)	Presented as of period end.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Table 18: Asset Management Group (Unaudited) (a)



	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
Dollars in millions, except as noted	2018			2018			2017			2017			2017			2018			2017
Income Statement
Net interest income	$	72		$	74		$	71		$	72		$	73		$	146		$	144
Noninterest income	222			226			226			220			217			448			435
Total revenue	294			300			297			292			290			594			579
Provision for credit losses (benefit)	7			(7		)	7			3			(7		)	—			(9		)
Noninterest expense	223			218			217			214			215			441			432
Pretax earnings	64			89			73			75			82			153			156
Income taxes	15			21			17			28			30			36			57
Earnings	$	49		$	68		$	56		$	47		$	52		$	117		$	99
Average Balance Sheet
Loans
Consumer	$	4,698		$	4,785		$	4,894		$	4,977		$	5,089		$	4,741		$	5,101
Commercial and commercial real estate	742			733			745			680			700			738			719
Residential mortgage	1,561			1,517			1,433			1,330			1,246			1,539			1,218
Total loans	$	7,001		$	7,035		$	7,072		$	6,987		$	7,035		$	7,018		$	7,038
Total assets	$	7,469		$	7,499		$	7,545		$	7,464		$	7,516		$	7,484		$	7,517
Deposits
Noninterest-bearing demand	$	1,459		$	1,466		$	1,609		$	1,464		$	1,468		$	1,462		$	1,519
Interest-bearing demand	3,448			3,540			3,517			3,469			3,704			3,494			3,766
Money market	2,332			2,577			2,863			3,058			3,219			2,454			3,358
Savings	4,690			4,613			4,282			3,961			3,770			4,651			3,769
Other	382			305			288			237			230			345			239
Total deposits	$	12,311		$	12,501		$	12,559		$	12,189		$	12,391		$	12,406		$	12,651
Performance Ratios
Return on average assets	2.63		%	3.68		%	2.94		%	2.50		%	2.78		%	3.15		%	2.66		%
Noninterest income to total revenue	76		%	75		%	76		%	75		%	75		%	75		%	75		%
Efficiency	76		%	73		%	73		%	73		%	74		%	74		%	75		%
Other Information
Nonperforming assets (b)	$	51		$	52		$	49		$	45		$	49
Net charge-offs	$	1		$	6		$	(1	)	$	3		$	1		$	7		$	2
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management	$	149		$	148		$	151		$	146		$	141
Nondiscretionary client assets under administration	130			129			131			129			125
Total	$	279		$	277		$	282		$	275		$	266
Discretionary client assets under management
Personal	$	92		$	92		$	94		$	90		$	89
Institutional	57			56			57			56			52
Total	$	149		$	148		$	151		$	146		$	141


(a)	See notes (a) and (b) on page 11.


(b)	As of period end.


(c)	Excludes brokerage account client assets.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Glossary of Terms

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

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 those transferred from available for sale and pension and other postretirement benefit plans, subject to phase-in limits, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments. Significant common stock investments in unconsolidated financial institutions, as well as mortgage servicing rights and deferred tax assets, must then be deducted to the extent such items individually exceed 10%, or in the aggregate exceed 15%, of our adjusted Basel III common equity Tier 1 capital.

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

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

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

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

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

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

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

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

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: 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.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

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.

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. Our product set includes loans priced using LIBOR as a benchmark.

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

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

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, foreclosed and other 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).



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

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), foreclosed and other assets - Assets taken in settlement of troubled loans primarily through deed-in-lieu of foreclosure or foreclosure. Foreclosed and other 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.

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

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.

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

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

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

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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