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

Attached files

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EX-99.2 - EXHIBIT 99.2 - PNC FINANCIAL SERVICES GROUP, INC.	a2q20earningsslides8k.htm
8-K - 8-K - PNC FINANCIAL SERVICES GROUP, INC.	q220208-kfs.htm

Exhibit 99.1

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2020

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2020

(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	6
Allowance for Credit Losses	7-8
Nonperforming Assets	9-10
Accruing Loans Past Due	11-12

Business Segment Results:
Descriptions	13
Period End Employees	13
Income and Revenue	14
Retail Banking	15-16
Corporate & Institutional Banking	17
Asset Management Group	18

Glossary of Terms	19-21

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 15, 2020. 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 retail branch network is located primarily in markets across the Mid-Atlantic, Midwest and Southeast. PNC also has strategic international offices in four countries outside the U.S.

DISCONTINUED OPERATIONS

On May 15, 2020, PNC completed the sale of its 31.6 million shares of BlackRock, Inc., common and preferred stock through a registered secondary offering. In addition, BlackRock repurchased 2.65 million shares from PNC. The total proceeds from the sale were $14.2 billion in cash, net of $.2 billion in expenses, and resulted in a gain on sale of $4.3 billion. Additionally, PNC contributed 500,000 BlackRock shares to the PNC Foundation on May 18, 2020. As a result, PNC has divested its entire holding in BlackRock. PNC and its affiliates only hold shares of BlackRock stock in a fiduciary capacity for clients of PNC and its affiliates. Activity for BlackRock for all periods presented on the Consolidated Income Statement have been reclassified to discontinued operations and prior period BlackRock investment balances have been reclassified to the Asset held for sale line on the Consolidated Balance Sheet in accordance with Accounting Standard Codification (ASC) 205-20, Presentation of Financial Statements - Discontinued Operations.



THE PNC FINANCIAL SERVICES GROUP, INC.
Cross Reference Index to Second Quarter 2020 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	6
7	Change in Allowance for Loan and Lease Losses	7
8	Components of the Provision For Credit Losses Under CECL	8
9	Allowance for Credit Losses by Loan Class	8
10	Nonperforming Assets by Type	9
11	Change in Nonperforming Assets	10
12	Largest Individual Nonperforming Assets	10
13	Accruing Loans Past Due 30 to 59 Days	11
14	Accruing Loans Past Due 60 to 89 Days	11
15	Accruing Loans Past Due 90 Days or More	12
16	Period End Employees	13
17	Summary of Business Segment Income and Revenue	14
18	Retail Banking	15-16
19	Corporate & Institutional Banking	17
20	Asset Management Group	18



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	2020			2020			2019			2019			2019			2020			2019
Interest Income
Loans	$	2,257		$	2,480		$	2,573		$	2,678		$	2,672		$	4,737		$	5,274
Investment securities	527			582			560			617			629			1,109			1,249
Other	71			138			201			208			196			209			402
Total interest income	2,855			3,200			3,334			3,503			3,497			6,055			6,925
Interest Expense
Deposits	141			375			468			531			515			516			987
Borrowed funds	187			314			378			468			484			501			965
Total interest expense	328			689			846			999			999			1,017			1,952
Net interest income	2,527			2,511			2,488			2,504			2,498			5,038			4,973
Noninterest Income
Asset management	199			201			216			213			221			400			433
Consumer services	330			377			390			402			392			707			763
Corporate services	512			526			499			469			484			1,038			946
Residential mortgage	158			210			87			134			82			368			147
Service charges on deposits	79			168			185			178			171			247			339
Other (a)	271			343			456			342			367			614			675
Total noninterest income	1,549			1,825			1,833			1,738			1,717			3,374			3,303
Total revenue	4,076			4,336			4,321			4,242			4,215			8,412			8,276
Provision For Credit Losses	2,463			914			221			183			180			3,377			369
Noninterest Expense
Personnel	1,373			1,369			1,468			1,400			1,365			2,742			2,779
Occupancy	199			207			201			206			212			406			427
Equipment	301			287			348			291			298			588			571
Marketing	47			58			77			76			83			105			148
Other	595			622			668			650			653			1,217			1,264
Total noninterest expense	2,515			2,543			2,762			2,623			2,611			5,058			5,189
Income (loss) from continuing operations before income taxes and noncontrolling interests	(902		)	879			1,338			1,436			1,424			(23		)	2,718
Income taxes (benefit) from continuing operations	(158		)	120			195			255			239			(38		)	451
Net income (loss) from continuing operations	(744		)	759			1,143			1,181			1,185			15			2,267
Income from discontinued operations before taxes	5,596			181			288			251			224			5,777			449
Income taxes from discontinued operations	1,197			25			50			40			35			1,222			71
Net income from discontinued operations	4,399			156			238			211			189			4,555			378
Net income	3,655			915			1,381			1,392			1,374			4,570			2,645
Less: Net income attributable to noncontrolling interests	7			7			14			13			12			14			22
Preferred stock dividends (b)	55			63			55			63			55			118			118
Preferred stock discount accretion and redemptions	1			1			1			1			1			2			2
Net income attributable to common shareholders	$	3,592		$	844		$	1,311		$	1,315		$	1,306		$	4,436		$	2,503
Earnings Per Common Share
Basic earnings (loss) from continuing operations	$	(1.90	)	$	1.59		$	2.44		$	2.47		$	2.47		$	(.29	)	$	4.68
Basic earnings from discontinued operations	10.28			.37			.54			.48			.42			10.60			.83
Total basic earnings	$	8.40		$	1.96		$	2.98		$	2.95		$	2.89		$	10.33		$	5.51
Diluted earnings (loss) from continuing operations	$	(1.90	)	$	1.59		$	2.43		$	2.47		$	2.47		$	(.29	)	$	4.67
Diluted earnings from discontinued operations	10.28			.36			.54			.47			.41			10.59			.82
Total diluted earnings	$	8.40		$	1.95		$	2.97		$	2.94		$	2.88		$	10.32		$	5.49
Average Common Shares Outstanding
Basic	426			429			437			444			451			428			453
Diluted	426			430			438			445			452			428			454
Efficiency	62		%	59		%	64		%	62		%	62		%	60		%	63		%
Noninterest income to total revenue	38		%	42		%	42		%	41		%	41		%	40		%	40		%
Effective tax rate from continuing operations (c)	17.5		%	13.7		%	14.6		%	17.8		%	16.8		%	165.2		%	16.6		%


(a)	Includes net gains on sales of securities of $40 million, $182 million, $12 million, $3 million, and $20 million for the quarters ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively, and $222 million and $32 million for the six months ended June 30, 2020 and June 30, 2019, respectively.


(b)	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.


(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)



	June 30			March 31			December 31			September 30			June 30
In millions, except par value	2020			2020			2019			2019			2019
Assets
Cash and due from banks	$	6,338		$	7,493		$	5,061		$	5,671		$	5,416
Interest-earning deposits with banks (a)	50,233			19,986			23,413			19,036			18,362
Loans held for sale (b)	1,443			1,693			1,083			1,872			1,144
Asset held for sale (c)				8,511			8,558			8,321			8,184
Investment securities – available for sale	97,052			89,077			69,163			69,057			69,355
Investment securities – held to maturity	1,441			1,469			17,661			18,826			18,948
Loans (b)	258,236			264,643			239,843			237,377			237,215
Allowance for loan and lease losses (d)	(5,928		)	(3,944		)	(2,742		)	(2,738		)	(2,721		)
Net loans	252,308			260,699			237,101			234,639			234,494
Equity investments	4,943			4,694			5,176			5,004			4,817
Mortgage servicing rights	1,067			1,082			1,644			1,483			1,627
Goodwill	9,233			9,233			9,233			9,233			9,221
Other (b)	34,920			41,556			32,202			35,774			34,193
Total assets	$	458,978		$	445,493		$	410,295		$	408,916		$	405,761
Liabilities
Deposits
Noninterest-bearing	$	99,458		$	81,614		$	72,779		$	74,077		$	69,867
Interest-bearing	246,539			223,590			215,761			211,506			203,393
Total deposits	345,997			305,204			288,540			285,583			273,260
Borrowed funds
Federal Home Loan Bank borrowings	8,500			23,491			16,341			21,901			29,376
Bank notes and senior debt	27,704			31,438			29,010			27,148			27,694
Subordinated debt	6,500			6,475			6,134			5,473			5,406
Other (b)	4,322			11,995			8,778			6,832			6,549
Total borrowed funds	47,026			73,399			60,263			61,354			69,025
Allowance for unfunded lending related commitments (d)	662			450			318			304			291
Accrued expenses and other liabilities	12,345			17,150			11,831			12,220			13,804
Total liabilities	406,030			396,203			360,952			359,461			356,380
Equity
Preferred stock (e)
Common stock - $5 par value
Authorized 800 shares, issued 542 shares	2,712			2,712			2,712			2,711			2,711
Capital surplus	16,284			16,288			16,369			16,297			16,248
Retained earnings	44,986			41,885			42,215			41,413			40,616
Accumulated other comprehensive income	3,069			2,518			799			837			631
Common stock held in treasury at cost:117, 118, 109, 103 and 95 shares	(14,128		)	(14,140		)	(12,781		)	(11,838		)	(10,866		)
Total shareholders’ equity	52,923			49,263			49,314			49,420			49,340
Noncontrolling interests	25			27			29			35			41
Total equity	52,948			49,290			49,343			49,455			49,381
Total liabilities and equity	$	458,978		$	445,493		$	410,295		$	408,916		$	405,761


(a)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $50.0 billion, $19.6 billion, $23.2 billion, $18.8 billion and $18.1 billion as of June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively.


(b)	Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information regarding these items.


(c)	Represents our held for sale investment in BlackRock. In the second quarter of 2020, PNC divested its entire holding in BlackRock. Prior period BlackRock investment balances have been reclassified to the Asset held for sale line in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Our second quarter 2020 Form 10-Q will include additional information.

(d)

Amounts as of June 30, 2020 and March 31, 2020 reflect the impact of adopting Accounting Standards Update 2016-13, Financial Instruments - Credit Losses, which is commonly referred to as the Current Expected Credit Losses (CECL) standard and our transition from an incurred loss methodology for these reserves to an expected credit loss methodology. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of this standard.


(e)	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	2020		2020		2019		2019		2019		2020		2019
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	52,500	$	49,636	$	33,937	$	32,926	$	30,169	$	51,068	$	29,589
Non-agency	1,529		1,617		1,582		1,716		1,801		1,573		1,845
Commercial mortgage-backed	7,232		6,734		6,054		5,728		5,545		6,983		5,457
Asset-backed	5,309		5,003		5,059		5,208		5,395		5,156		5,266
U.S. Treasury and government agencies	15,457		15,938		15,966		17,573		18,815		15,697		18,529
Other	4,952		4,024		2,849		3,053		3,237		4,488		3,453
Total securities available for sale	86,979		82,952		65,447		66,204		64,962		84,965		64,139
Securities held to maturity
Residential mortgage-backed	—		—		14,943		15,768		15,350		—		15,487
Commercial mortgage-backed	—		—		498		544		570		—		585
Asset-backed	22		51		54		79		172		37		175
U.S. Treasury and government agencies	783		779		774		769		765		781		763
Other	646		640		1,794		1,802		1,822		643		1,834
Total securities held to maturity	1,451		1,470		18,063		18,962		18,679		1,461		18,844
Total investment securities	88,430		84,422		83,510		85,166		83,641		86,426		82,983
Loans
Commercial and industrial	153,595		128,723		124,876		125,356		124,441		141,159		121,907
Commercial real estate	28,707		28,275		28,670		28,855		28,423		28,491		28,285
Equipment lease financing	7,035		7,066		7,199		7,272		7,283		7,051		7,274
Consumer	56,485		57,680		56,765		55,702		55,202		57,082		55,099
Residential real estate	22,292		21,828		21,341		20,497		19,496		22,060		19,147
Total loans	268,114		243,572		238,851		237,682		234,845		255,843		231,712
Interest-earning deposits with banks (b)	34,600		17,569		23,316		15,632		13,469		26,085		14,238
Other interest-earning assets	10,867		9,468		11,371		14,094		13,145		10,167		12,113
Total interest-earning assets	402,011		355,031		357,048		352,574		345,100		378,521		341,046
Noninterest-earning assets	55,302		57,405		54,371		54,135		51,862		56,353		50,415
Total assets	$	457,313	$	412,436	$	411,419	$	406,709	$	396,962	$	434,874	$	391,461
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	61,346	$	53,287	$	56,209	$	56,271	$	54,814	$	57,317	$	54,758
Demand	82,881		70,931		69,496		65,444		64,431		76,906		63,958
Savings	75,345		69,977		66,827		64,054		61,949		72,661		60,394
Time deposits	21,873		21,141		21,600		21,173		20,040		21,506		19,430
Total interest-bearing deposits	241,445		215,336		214,132		206,942		201,234		228,390		198,540
Borrowed funds
Federal Home Loan Bank borrowings	12,559		13,440		18,944		25,883		22,681		13,000		22,089
Bank notes and senior debt	28,298		29,988		27,403		27,409		26,865		29,143		26,145
Subordinated debt	5,937		5,934		5,760		5,189		5,526		5,935		5,704
Other	6,435		7,826		7,926		5,452		7,263		7,131		7,128
Total borrowed funds	53,229		57,188		60,033		63,933		62,335		55,209		61,066
Total interest-bearing liabilities	294,674		272,524		274,165		270,875		263,569		283,599		259,606
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits	93,776		74,396		73,626		72,149		71,648		84,086		71,526
Accrued expenses and other liabilities	16,989		16,437		14,541		14,529		13,122		16,712		12,187
Equity	51,874		49,079		49,087		49,156		48,623		50,477		48,142
Total liabilities and equity	$	457,313	$	412,436	$	411,419	$	406,709	$	396,962	$	434,874	$	391,461


(a)	Calculated using average daily balances.


(b)	Amounts include average balances held with the Federal Reserve Bank of Cleveland of $34.2 billion, $17.3 billion, $23.0 billion, $15.3 billion and $13.2 billion for the three months ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, respectively, and $25.8 billion and $14.0 billion for the six months ended June 30, 2020 and June 30, 2019, respectively.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4



Table 4: Details of Net Interest Margin (Unaudited)
	Three months ended										Six months ended
	June 30		March 31		December 31		September 30		June 30		June 30		June 30
	2020		2020		2019		2019		2019		2020		2019
Average yields/rates (a)
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	2.29	%	2.63	%	2.48	%	2.70	%	2.93	%	2.45	%	2.93	%
Non-agency	7.13	%	7.87	%	8.09	%	8.89	%	7.99	%	7.51	%	7.64	%
Commercial mortgage-backed	2.59	%	2.95	%	2.30	%	2.97	%	3.06	%	2.76	%	3.09	%
Asset-backed	2.60	%	3.05	%	3.26	%	3.31	%	3.34	%	2.82	%	3.35	%
U.S. Treasury and government agencies	1.77	%	2.29	%	2.31	%	2.44	%	2.48	%	2.03	%	2.49	%
Other	3.47	%	3.69	%	3.36	%	3.41	%	3.33	%	3.57	%	3.34	%
Total securities available for sale	2.39	%	2.77	%	2.65	%	2.90	%	3.01	%	2.58	%	3.01	%
Securities held to maturity
Residential mortgage-backed	—		—		2.63	%	2.78	%	2.93	%	—		2.97	%
Commercial mortgage-backed	—		—		4.44	%	3.68	%	3.57	%	—		3.55	%
Asset-backed	2.38	%	2.77	%	3.02	%	5.48	%	3.92	%	2.65	%	3.88	%
U.S. Treasury and government agencies	2.84	%	2.84	%	2.86	%	2.86	%	2.84	%	2.84	%	2.83	%
Other	4.27	%	4.48	%	4.47	%	4.40	%	4.44	%	4.38	%	4.42	%
Total securities held to maturity	3.47	%	3.56	%	2.87	%	2.98	%	3.10	%	3.51	%	3.13	%
Total investment securities	2.41	%	2.78	%	2.70	%	2.91	%	3.03	%	2.59	%	3.04	%
Loans
Commercial and industrial	2.83	%	3.62	%	3.88	%	4.06	%	4.22	%	3.19	%	4.27	%
Commercial real estate	2.84	%	3.64	%	3.89	%	4.40	%	4.43	%	3.23	%	4.40	%
Equipment lease financing	3.82	%	3.93	%	3.87	%	3.82	%	4.06	%	3.88	%	4.00	%
Consumer	4.86	%	5.38	%	5.45	%	5.61	%	5.56	%	5.12	%	5.55	%
Residential real estate	3.86	%	3.96	%	4.10	%	4.21	%	4.27	%	3.91	%	4.28	%
Total loans	3.37	%	4.08	%	4.27	%	4.47	%	4.56	%	3.71	%	4.58	%
Interest-earning deposits with banks	.10	%	1.27	%	1.66	%	2.17	%	2.38	%	.50	%	2.41	%
Other interest-earning assets	2.26	%	3.51	%	3.65	%	3.49	%	3.55	%	2.84	%	3.82	%
Total yield on interest-earning assets	2.85	%	3.62	%	3.71	%	3.95	%	4.06	%	3.21	%	4.09	%
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market	.15	%	.72	%	.93	%	1.14	%	1.17	%	.41	%	1.16	%
Demand	.08	%	.41	%	.51	%	.58	%	.55	%	.23	%	.53	%
Savings	.31	%	.79	%	.97	%	1.14	%	1.19	%	.54	%	1.16	%
Time deposits	.80	%	1.34	%	1.52	%	1.66	%	1.67	%	1.06	%	1.61	%
Total interest-bearing deposits	.23	%	.70	%	.87	%	1.02	%	1.03	%	.45	%	1.00	%
Borrowed funds
Federal Home Loan Bank borrowings	1.00	%	1.69	%	2.11	%	2.48	%	2.69	%	1.36	%	2.73	%
Bank notes and senior debt	1.56	%	2.41	%	2.77	%	3.21	%	3.36	%	2.00	%	3.43	%
Subordinated debt	1.91	%	2.73	%	3.06	%	3.53	%	4.17	%	2.32	%	4.34	%
Other	.92	%	1.69	%	1.89	%	2.43	%	2.44	%	1.34	%	2.44	%
Total borrowed funds	1.39	%	2.18	%	2.47	%	2.87	%	3.08	%	1.80	%	3.14	%
Total rate on interest-bearing liabilities	.44	%	1.00	%	1.21	%	1.45	%	1.51	%	.71	%	1.50	%
Interest rate spread	2.41	%	2.62	%	2.50	%	2.50	%	2.55	%	2.50	%	2.59	%
Benefit from use of noninterest bearing sources (b)	.11		.22		.28		.34		.36		.17		.35
Net interest margin	2.52	%	2.84	%	2.78	%	2.84	%	2.91	%	2.67	%	2.94	%

(a)

Yields and rates are calculated using the applicable annualized interest income or interest expense divided by the applicable average earning assets or interest-bearing liabilities. Net interest margin is the total yield on interest-earning assets minus the total rate on interest-bearing liabilities and includes the benefit from use of noninterest-bearing sources. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating average yields used in the calculation of net interest margin 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, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019 were $19 million, $22 million, $23 million, $25 million and $27 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2020 and June 30, 2019 were $41 million and $54 million, respectively.


(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	2020			2020		2019		2019			2019			2020				2019
Basic
Net income (loss) from continuing operations	$	(744	)	$	759	$	1,143	$	1,181		$	1,185		$	15			$	2,267
Less:
Net income attributable to noncontrolling interests	7			7		14		13			12			14				22
Preferred stock dividends (a)	55			63		55		63			55			118				118
Preferred stock discount accretion and redemptions	1			1		1		1			1			2				2
Net income (loss) from continuing operations attributable to common shareholders	(807		)	688		1,073		1,104			1,117			(119		)		2,125
Less: Dividends and undistributed earnings allocated to nonvested restricted shares	1			3		5		5			4			4				8
Net income (loss) from continuing operations attributable to basic common shareholders	$	(808	)	$	685	$	1,068	$	1,099		$	1,113		$	(123	)		$	2,117
Net income from discontinued operations attributable to common shareholders	$	4,399		$	156	$	238	$	211		$	189		$	4,555			$	378
Less: Undistributed earnings allocated to nonvested restricted shares	21			1		1		1			0		0	22				1
Net income from discontinued operations attributable to basic common shareholders	$	4,378		$	155	$	237	$	210		$	189		$	4,533			$	377
Basic weighted-average common shares outstanding	426			429		437		444			451			428				453
Basic earnings (loss) per common share from continuing operations	$	(1.90	)	$	1.59	$	2.44	$	2.47		$	2.47		$	(.29	)		$	4.68
Basic earnings per common share from discontinued operations	10.28			.37		.54		.48			.42			10.60				.83
Basic earnings per common share	$	8.40		$	1.96	$	2.98	$	2.95		$	2.89		$	10.33			$	5.51
Diluted
Net income (loss) from continuing operations attributable to diluted common shareholders	$	(808	)	$	685	$	1,068	$	1,099		$	1,113		$	(123	)		$	2,117
Net income from discontinued operations attributable to basic common shareholders	$	4,378		$	155	$	237	$	210		$	189		$	4,533			$	377
Less: Impact of earnings per share dilution from discontinued operations	1			1		3		2			2		0	2			0	5
Net income from discontinued operations attributable to diluted common shareholders	$	4,377		$	154	$	234	$	208		$	187		$	4,531			$	372
Basic weighted-average common shares outstanding	426			429		437		444			451			428				453
Dilutive potential common shares	—			1		1		1		0.000004	1			—				1
Diluted weighted-average common shares outstanding	426			430		438		445			452			428				454
Diluted earnings (loss) per common share from continuing operations	$	(1.90	)	$	1.59	$	2.43	$	2.47		$	2.47		$	(.29	)		$	4.67
Diluted earnings per common share from discontinued operations	10.28			.36		.54		.47			.41			10.59				.82
Diluted earnings per common share	$	8.40		$	1.95	$	2.97	$	2.94		$	2.88		$	10.32			$	5.49


(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.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Table 6: Details of Loans (Unaudited)



	June 30		March 31		December 31		September 30		June 30
In millions	2020		2020		2019		2019		2019
Commercial
Commercial and industrial
Manufacturing	$	25,590	$	27,225	$	21,540	$	21,846	$	22,191
Retail/wholesale trade	21,747		24,408		21,565		21,761		22,280
Service providers	21,347		19,411		16,112		16,189		15,387
Real estate related (a)	14,634		14,843		12,346		12,294		12,264
Financial services	13,596		13,473		11,318		10,437		11,916
Health care	10,109		9,238		8,035		8,137		8,594
Transportation and warehousing	7,771		8,160		7,474		7,216		6,588
Other industries	29,541		32,373		26,947		26,134		26,404
Total commercial and industrial	144,335		149,131		125,337		124,014		125,624
Commercial real estate	28,763		28,544		28,110		28,884		28,570
Equipment lease financing	7,097		7,061		7,155		7,290		7,409
Total commercial	180,195		184,736		160,602		160,188		161,603
Consumer
Home equity	24,879		25,081		25,085		24,971		25,132
Residential real estate	22,469		22,250		21,821		21,082		20,092
Automobile	16,157		17,194		16,754		16,004		15,612
Credit card	6,575		7,132		7,308		6,815		6,511
Education	3,132		3,247		3,336		3,461		3,555
Other consumer	4,829		5,003		4,937		4,856		4,710
Total consumer	78,041		79,907		79,241		77,189		75,612
Total loans	$	258,236	$	264,643	$	239,843	$	237,377	$	237,215

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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Allowance for Credit 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 - dollars in millions	2020			2020			2019			2019			2019
Allowance for loan and lease losses
Beginning balance	$	3,944		$	2,742		$	2,738		$	2,721		$	2,692
Adoption of ASU 2016-03 (a)				463
Gross charge-offs:
Commercial and industrial	(112		)	(78		)	(67		)	(41		)	(50		)
Commercial real estate							(2		)	(11		)	(2		)
Equipment lease financing	(10		)	(5		)	(9		)	(2		)	(1		)
Home equity	(8		)	(11		)	(16		)	(11		)	(18		)
Residential real estate				(2		)	(4		)	(1		)	(2		)
Automobile	(69		)	(84		)	(78		)	(71		)	(54		)
Credit card	(76		)	(78		)	(70		)	(61		)	(65		)
Education	(4		)	(6		)	(6		)	(7		)	(7		)
Other consumer	(35		)	(40		)	(39		)	(36		)	(28		)
Total gross charge-offs	(314		)	(304		)	(291		)	(241		)	(227		)
Recoveries:
Commercial and industrial	13			18			14			14			17
Commercial real estate				4			3			3			2
Equipment lease financing	2			2			2			2			2
Home equity	15			14			18			20			18
Residential real estate	4			4			3			4			4
Automobile	29			35			29			30			29
Credit card	9			8			6			7			7
Education	2			2			2			2			2
Other consumer	4			5			5			4			4
Total recoveries	78			92			82			86			85
Net (charge-offs) / recoveries:
Commercial and industrial	(99		)	(60		)	(53		)	(27		)	(33		)
Commercial real estate				4			1			(8		)
Equipment lease financing	(8		)	(3		)	(7		)				1
Home equity	7			3			2			9
Residential real estate	4			2			(1		)	3			2
Automobile	(40		)	(49		)	(49		)	(41		)	(25		)
Credit card	(67		)	(70		)	(64		)	(54		)	(58		)
Education	(2		)	(4		)	(4		)	(5		)	(5		)
Other consumer	(31		)	(35		)	(34		)	(32		)	(24		)
Total net (charge-offs)	(236		)	(212		)	(209		)	(155		)	(142		)
Provision for credit losses (b)	2,220			952			221			183			180
Net (increase) / decrease in allowance for unfunded loan commitments and letters of credit							(14		)	(13		)	(12		)
Other				(1		)	6			2			3
Ending balance	$	5,928		$	3,944		$	2,742		$	2,738		$	2,721
Supplemental Information
Net charge-offs
Commercial net charge-offs	$	(107	)	$	(59	)	$	(59	)	$	(35	)	$	(32	)
Consumer net charge-offs	(129		)	(153		)	(150		)	(120		)	(110		)
Total net charge-offs	$	(236	)	$	(212	)	$	(209	)	$	(155	)	$	(142	)
Net charge-offs to average loans (annualized)	.35		%	.35		%	.35		%	.26		%	.24		%
Commercial	.23		%	.14		%	.15		%	.09		%	.08		%
Consumer	.66		%	.77		%	.76		%	.62		%	.59		%

(a)

Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020, and our transition from an incurred loss methodology for our reserves to an expected credit loss methodology. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include additional information related to our adoption of the CECL standard.


(b)	See Table 8 for the components of the Provision for credit losses under CECL being reported on the Consolidated Income Statement.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Allowance for Credit Losses (Unaudited) (Continued)

Table 8: Components of the Provision for Credit Losses Under CECL



	Three months ended					Six months ended
	June 30		March 31			June 30
In millions	2020		2020			2020
Provision for credit losses
Loans and leases	$	2,220	$	952		$	3,172
Unfunded lending related commitments	212		(47		)	165
Investment securities and other financial assets	31		9			40
Total provision for credit losses	$	2,463	$	914		$	3,377

Table 9: Allowance for Credit Losses by Loan Class (a)



	June 30, 2020						March 31, 2020						December 31, 2019
Dollars in millions	Allowance Amount		Total Loans		% of Total Loans		Allowance Amount		Total Loans		% of Total Loans		Allowance Amount		Total Loans		% of Total Loans
Allowance for loan and lease losses
Commercial
Commercial and industrial	$	2,834	$	144,335	1.96	%	$	1,596	$	149,131	1.07	%	$	1,489	$	125,337	1.19	%
Commercial real estate	382		28,763		1.33	%	269		28,544		.94	%	278		28,110		.99	%
Equipment lease financing	164		7,097		2.31	%	114		7,061		1.61	%	45		7,155		.63	%
Total commercial	3,380		180,195		1.88	%	1,979		184,736		1.07	%	1,812		160,602		1.13	%
Consumer
Home equity	382		24,879		1.54	%	332		25,081		1.32	%	87		25,085		.35	%
Residential real estate	50		22,469		.22	%	18		22,250		.08	%	258		21,821		1.18	%
Automobile	450		16,157		2.79	%	377		17,194		2.19	%	160		16,754		.95	%
Credit card	1,010		6,575		15.36	%	746		7,132		10.46	%	288		7,308		3.94	%
Education	151		3,132		4.82	%	123		3,247		3.79	%	17		3,336		.51	%
Other consumer	505		4,829		10.46	%	369		5,003		7.38	%	120		4,937		2.43	%
Total consumer	2,548		78,041		3.26	%	1,965		79,907		2.46	%	930		79,241		1.17	%
Total	5,928		$	258,236	2.30	%	3,944		$	264,643	1.49	%	2,742		$	239,843	1.14	%
Allowance for unfunded lending related commitments	662						450						318
Allowance for credit losses	$	6,590					$	4,394					$	3,060

Supplemental Information
Allowance for credit losses to total loans					2.55	%					1.66	%					1.28	%
Commercial					2.18	%					1.26	%					1.33	%
Consumer					3.41	%					2.59	%					1.18	%

(a) Excludes allowances for investment securities and other financial assets.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Details of Nonperforming Assets (Unaudited)

Table 10: Nonperforming Assets by Type



	June 30			March 31			December 31			September 30			June 30
Dollars in millions	2020			2020			2019			2019			2019
Nonperforming loans, including TDRs
Commercial
Commercial and industrial
Retail/wholesale trade	$	117		$	121		$	74		$	61		$	42
Manufacturing	58			79			102			109			88
Service providers	57			63			53			55			53
Real estate related (a)	158			25			24			33			19
Health care	19			14			17			17			15
Transportation and warehousing	20			23			18			13			21
Other industries	264			169			137			203			203
Total commercial and industrial	693			494			425			491			441
Commercial real estate	43			42			44			75			93
Equipment lease financing	22			30			32			10			6
Total commercial	758			566			501			576			540
Consumer (b)
Home equity	636			617			669			685			712
Residential real estate	305			292			315			325			339
Automobile	156			154			135			128			118
Credit card	15			10			11			9			8
Other consumer	6			5			4			5			7
Total consumer	1,118			1,078			1,134			1,152			1,184
Total nonperforming loans (c) (d)	1,876			1,644			1,635			1,728			1,724
OREO and foreclosed assets	79			111			117			119			126
Total nonperforming assets	$	1,955		$	1,755		$	1,752		$	1,847		$	1,850
Nonperforming loans to total loans	.73		%	.62		%	.68		%	.73		%	.73		%
Nonperforming assets to total loans, OREO and foreclosed assets	.76		%	.66		%	.73		%	.78		%	.78		%
Nonperforming assets to total assets	.43		%	.39		%	.43		%	.45		%	.46		%
Allowance for loan and lease losses to nonperforming loans (e)	316		%	240		%	168		%	158		%	158		%


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


(b)	Excludes most unsecured consumer loans and lines of credit, 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 and loans accounted for under the fair value option. Amounts in 2019 also excluded purchased impaired loans.


(d)	In connection with the adoption of the CECL standard, nonperforming loans as of June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of the CECL standard.


(e)	Ratios at June 30, 2020 and March 31, 2020 reflect the transition impact on our allowance for loan and lease losses from the adoption of the CECL standard along with the increases in reserves during 2020 due to the significant economic impact of COVID-19 and loan growth.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Nonperforming Assets (Unaudited) (Continued)

Table 11: Change in Nonperforming Assets



	April 1, 2020			January 1, 2020			October 1, 2019			July 1, 2019			April 1, 2019
In millions	June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019			June 30, 2019
Beginning balance	$	1,755		$	1,752		$	1,847		$	1,850		$	1,785
New nonperforming assets	458			391			357			290			408
Charge-offs and valuation adjustments	(104		)	(145		)	(218		)	(112		)	(170		)
Principal activity, including paydowns and payoffs	(85		)	(158		)	(157		)	(122		)	(101		)
Asset sales and transfers to loans held for sale	(28		)	(20		)	(21		)	(34		)	(27		)
Returned to performing status	(41		)	(65		)	(56		)	(25		)	(45		)
Ending balance	$	1,955		$	1,755		$	1,752		$	1,847		$	1,850

Table 12: Largest Individual Nonperforming Assets (a)



June 30, 2020 - Dollars in millions
Ranking	Outstandings		Industry
1	$	99	Real Estate and Rental and Leasing
2	36		Mining, Quarrying, and Oil and Gas Extraction
3	35		Real Estate and Rental and Leasing
4	34		Wholesale Trade
5	29		Mining, Quarrying, and Oil and Gas Extraction
6	28		Wholesale Trade
7	27		Information
8	24		Mining, Quarrying, and Oil and Gas Extraction
9	23		Mining, Quarrying, and Oil and Gas Extraction
10	21		Mining, Quarrying, and Oil and Gas Extraction
Total	$	356
As a percent of total nonperforming assets			18%


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



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Accruing Loans Past Due (Unaudited)

Pursuant to the interagency guidance issued in April 2020 and in connection with the credit reporting rules from the U.S. Coronavirus Aid, Relief and Economic Security Act (CARES Act), the delinquency status of loans modified due to COVID-19 related hardships are being reported as of June 30, 2020 in alignment with the rules set forth for banks to report delinquency status to the credit agencies. These rules require that COVID-19 related loan modifications be reported as follows: (i) if current at the time of modification, the loan remains current throughout the modification period, (ii) if delinquent at the time of modification and the borrower was not made current as part of the modification, the loan maintains its reported as delinquent status during the modification period, or (iii) if delinquent at the time of modification and the borrower was made current as part of the modification or became current during the modification period, the loan is reported as current. As a result, certain loans modified due to COVID-19 related hardships are not being reported as past due as of June 30, 2020 based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period. Our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to COVID-19 related loan modifications.

Table 13: Accruing Loans Past Due 30 to 59 Days (a) (b)



	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	2020		2020		2019		2019		2019		2020		2020		2019		2019		2019
Commercial and industrial	$	49	$	97	$	102	$	82	$	105	.03	%	.07	%	.08	%	.07	%	.08	%
Commercial real estate	51		6		4		3		9		.18	%	.02	%	.01	%	.01	%	.03	%
Equipment lease financing	8		42		49		6		7		.11	%	.59	%	.68	%	.08	%	.09	%
Home equity	70		65		58		53		56		.28	%	.26	%	.23	%	.21	%	.22	%
Residential real estate
Non government insured	135		121		90		76		80		.60	%	.54	%	.41	%	.36	%	.40	%
Government insured	63		52		50		53		54		.28	%	.23	%	.23	%	.25	%	.27	%
Automobile	105		177		178		145		119		.65	%	1.03	%	1.06	%	.91	%	.76	%
Credit card	53		59		60		56		47		.81	%	.83	%	.82	%	.82	%	.72	%
Education
Non government insured	3		7		7		8		7		.10	%	.22	%	.21	%	.23	%	.20	%
Government insured	36		45		48		48		53		1.15	%	1.39	%	1.44	%	1.39	%	1.49	%
Other consumer	17		17		15		17		13		.35	%	.34	%	.30	%	.35	%	.28	%
Total	$	590	$	688	$	661	$	547	$	550	.23	%	.26	%	.28	%	.23	%	.23	%

Table 14: Accruing Loans Past Due 60 to 89 Days (a) (b)



	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	2020		2020		2019		2019		2019		2020		2020		2019		2019		2019
Commercial and industrial	$	28	$	22	$	30	$	49	$	33	.02	%	.01	%	.02	%	.04	%	.03	%
Commercial real estate	4		1		1		3		1		.01	%	.00	%	.00	%	.01	%	.00	%
Equipment lease financing	9		2		5		4		3		.13	%	.03	%	.07	%	.05	%	.04	%
Home equity	27		28		24		24		20		.11	%	.11	%	.10	%	.10	%	.08	%
Residential real estate
Non government insured	34		30		16		20		20		.15	%	.13	%	.07	%	.09	%	.10	%
Government insured	59		52		53		57		55		.26	%	.23	%	.24	%	.27	%	.27	%
Automobile	34		49		47		36		29		.21	%	.28	%	.28	%	.22	%	.19	%
Credit card	38		37		37		33		29		.58	%	.52	%	.51	%	.48	%	.45	%
Education
Non government insured	2		4		3		5		4		.06	%	.12	%	.09	%	.14	%	.11	%
Government insured	21		26		31		30		32		.67	%	.80	%	.93	%	.87	%	.90	%
Other consumer	8		10		11		8		9		.17	%	.20	%	.22	%	.16	%	.19	%
Total	$	264	$	261	$	258	$	269	$	235	.10	%	.10	%	.11	%	.11	%	.10	%



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Accruing Loans Past Due (Unaudited) (Continued)

Table 15: Accruing Loans Past Due 90 Days or More (a) (b)



	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	2020		2020		2019		2019		2019		2020		2020		2019		2019		2019
Commercial and industrial	$	34	$	51	$	85	$	64	$	59	.02	%	.03	%	.07	%	.05	%	.05	%
Residential real estate
Non government insured	19		18		14		15		13		.08	%	.08	%	.06	%	.07	%	.06	%
Government insured	245		282		301		287		293		1.09	%	1.27	%	1.38	%	1.36	%	1.46	%
Automobile	19		19		18		11		8		.12	%	.11	%	.11	%	.07	%	.05	%
Credit card	61		70		67		57		48		.93	%	.98	%	.92	%	.84	%	.74	%
Education
Non government insured	1		2		2		3		3		.03	%	.06	%	.06	%	.09	%	.08	%
Government insured	65		82		89		87		92		2.08	%	2.53	%	2.67	%	2.51	%	2.59	%
Other consumer	12		10		9		8		8		.25	%	.20	%	.18	%	.16	%	.17	%
Total	$	456	$	534	$	585	$	532	$	524	.18	%	.20	%	.24	%	.22	%	.22	%

(a) Excludes loans held for sale, amounts in 2019 also excluded purchased impaired loans.

(b) In connection with the adoption of the CECL standard, accruing loans past due as of June 30, 2020 and March 31, 2020 include purchased credit deteriorated loans. Our 2019 Form 10-K and our first quarter 2020 Form 10-Q included, and our second quarter 2020 Form 10-Q will include, additional information related to our adoption of the CECL standard.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, insurance services, investment management and cash management products and services to consumer and small business customers. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. The branch network is located primarily in markets across the Mid-Atlantic, Midwest and Southeast. In 2018, Retail Banking launched its national expansion strategy designed to grow customers with digitally-led banking and an ultra-thin branch network in markets outside of our existing retail branch network. 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. The Treasury Management business provides payables, receivables, deposit and account services, liquidity and investments, and online and mobile banking products and services to our clients. 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.

Asset Management Group provides personal wealth management for high net worth and ultra high net worth clients and institutional asset management. The Asset Management group is comprised of three distinct operating units:


•	Wealth management provides products and services to individuals and their families including investment and retirement planning, customized investment management, private banking, 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 clients.


•	Institutional asset management provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.

Table 16: Period End Employees



	June 30	March 31	December 31	September 30	June 30
	2020	2020	2019	2019	2019
Full-time employees
Retail Banking	29,051	28,737	28,270	28,279	28,671
Other full-time employees	21,752	21,776	21,747	21,701	21,571
Total full-time employees	50,803	50,513	50,017	49,980	50,242
Part-time employees
Retail Banking	1,854	1,780	1,759	1,823	2,037
Other part-time employees	476	129	142	153	518
Total part-time employees	2,330	1,909	1,901	1,976	2,555
Total	53,133	52,422	51,918	51,956	52,797



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Table 17: Summary of Business Segment Income and Revenue (Unaudited) (a)



	Three months ended											Six months ended
	June 30			March 31		December 31		September 30		June 30		June 30			June 30
In millions	2020			2020		2019		2019		2019		2020			2019
Income
Retail Banking	$	(223	)	$	201	$	277	$	347	$	325	$	(22	)	$	589
Corporate & Institutional Banking	(358		)	370		649		645		602		12			1,154
Asset Management Group	28			54		91		46		80		82			125
Other	(191		)	134		126		143		178		(57		)	399
Net income (loss) from continuing operations	$	(744	)	$	759	$	1,143	$	1,181	$	1,185	$	15		$	2,267

Revenue
Retail Banking	$	1,975		$	2,244	$	2,054	$	2,137	$	2,033	$	4,219		$	3,977
Corporate & Institutional Banking	1,790			1,660		1,615		1,584		1,578		3,450			3,052
Asset Management Group	293			292		352		286		354		585			641
Other	18			140		300		235		250		158			606
Total revenue	$	4,076		$	4,336	$	4,321	$	4,242	$	4,215	$	8,412		$	8,276

(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.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Table 18: 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	2020			2020			2019			2019			2019			2020			2019
Income Statement
Net interest income	$	1,390		$	1,456		$	1,402		$	1,393		$	1,376		$	2,846		$	2,725
Noninterest income	585			788			652			744			657			1,373			1,252
Total revenue	1,975			2,244			2,054			2,137			2,033			4,219			3,977
Provision for credit losses	761			445			161			147			81			1,206			209
Noninterest expense	1,500			1,536			1,530			1,536			1,527			3,036			2,995
Pretax earnings (loss)	(286		)	263			363			454			425			(23		)	773
Income taxes (benefit)	(63		)	62			86			107			100			(1		)	184
Earnings	$	(223	)	$	201		$	277		$	347		$	325		$	(22	)	$	589
Average Balance Sheet
Loans held for sale	$	829		$	779		$	747		$	760		$	554		$	804		$	498
Loans
Consumer
Home equity	$	22,790		$	22,736		$	22,590		$	22,434		$	22,620		$	22,763		$	22,804
Residential real estate	18,244			17,964			17,352			16,630			15,737			18,104			15,388
Automobile	16,688			17,096			16,427			15,761			15,222			16,892			14,917
Education	3,218			3,343			3,428			3,538			3,665			3,281			3,740
Credit cards	6,690			7,207			6,985			6,624			6,376			6,948			6,291
Other	2,454			2,533			2,418			2,309			2,179			2,494			2,123
Total consumer	70,084			70,879			69,200			67,296			65,799			70,482			65,263
Commercial	13,612			10,524			10,323			10,379			10,481			12,068			10,471
Total loans	$	83,696		$	81,403		$	79,523		$	77,675		$	76,280		$	82,550		$	75,734
Total assets	$	102,103		$	97,062		$	94,967		$	93,222		$	92,350		$	99,583		$	91,805
Deposits
Noninterest-bearing demand	$	39,134		$	32,225		$	32,674		$	32,092		$	31,516		$	35,680		$	30,956
Interest-bearing demand	47,339			42,865			41,689			41,420			42,735			45,102			42,607
Money market	22,942			22,866			23,927			24,807			25,799			22,903			26,283
Savings	67,947			62,781			59,877			57,752			56,075			65,364			54,596
Certificates of deposit	11,661			12,233			12,598			12,766			12,704			11,947			12,543
Total deposits	$	189,023		$	172,970		$	170,765		$	168,837		$	168,829		$	180,996		$	166,985
Performance Ratios
Return on average assets	(.88		)%	.84		%	1.16		%	1.48		%	1.41		%	(.04		)%	1.29		%
Noninterest income to total revenue	30		%	35		%	32		%	35		%	32		%	33		%	31		%
Efficiency	76		%	68		%	74		%	72		%	75		%	72		%	75		%


(a)	See note (a) on page 14.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

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	2020			2020			2019			2019			2019			2020			2019
Supplemental Noninterest Income Information
Consumer services	$	315		$	372		$	382		$	397		$	385		$	687		$	751
Residential mortgage	$	158		$	210		$	87		$	134		$	82		$	368		$	147
Service charges on deposits	$	80		$	166		$	183		$	178		$	164		$	246		$	326
Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)	$	122		$	118		$	120		$	123		$	124
Serviced portfolio acquisitions	$	11		$	2		$	3		$	3		$	5		$	13		$	6
MSR asset value (b)	$	0.6		$	0.6		$	1.0		$	0.9		$	1.0
MSR capitalization value (in basis points) (b)	47			51			83			72			80
Servicing income: (in millions)
Servicing fees, net (c)	$	36		$	44		$	39		$	44		$	42		$	80		$	95
Mortgage servicing rights valuation, net of economic hedge	$	20		$	101		$	9		$	40		$	7		$	121		$	(2	)
Residential mortgage loan statistics
Loan origination volume (in billions)	$	4.2		$	3.2		$	3.5		$	3.4		$	2.9		$	7.4		$	4.6
Loan sale margin percentage	3.67		%	3.16		%	2.42		%	2.59		%	2.24		%	3.45		%	2.28		%
Percentage of originations represented by:
Purchase volume (d)	34		%	36		%	40		%	44		%	54		%	35		%	55		%
Refinance volume	66		%	64		%	60		%	56		%	46		%	65		%	45		%
Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)	65		%	59		%	58		%	58		%	56		%	61		%	56		%
Digital consumer customers (f)	73		%	71		%	71		%	70		%	69		%	72		%	69		%
Credit-related statistics
Nonperforming assets	$	1,037		$	1,011		$	1,046		$	1,056		$	1,074
Net charge-offs - loans and leases	$	142		$	166		$	154		$	128		$	120		$	308		$	252
Other statistics
ATMs	9,058			9,048			9,091			9,102			9,072
Branches (g)	2,256			2,277			2,296			2,310			2,321
Brokerage account client assets (in billions) (h)	$	53		$	49		$	54		$	52		$	52


(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 quarterly averages, and net charge-offs, which are for the three months ended 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 payments, 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 17

Table 19: 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	2020			2020			2019			2019			2019			2020			2019
Income Statement
Net interest income	$	1,064		$	966		$	969		$	930		$	917		$	2,030		$	1,815
Noninterest income	726			694			646			654			661			1,420			1,237
Total revenue	1,790			1,660			1,615			1,584			1,578			3,450			3,052
Provision for credit losses	1,585			458			65			48			100			2,043			171
Noninterest expense	673			722			726			703			698			1,395			1,384
Pretax earnings (loss)	(468		)	480			824			833			780			12			1,497
Income taxes (benefit)	(110		)	110			175			188			178			—			343
Earnings	$	(358	)	$	370		$	649		$	645		$	602		$	12		$	1,154
Average Balance Sheet
Loans held for sale	$	704		$	395		$	616		$	720		$	330		$	550		$	338
Loans
Commercial
Commercial and industrial	$	138,992		$	117,288		$	114,113		$	114,701		$	113,702		$	128,139		$	111,186
Commercial real estate	27,106			26,589			26,586			26,570			26,224			26,848			26,098
Equipment lease financing	7,036			7,066			7,200			7,272			7,284			7,051			7,274
Total commercial	173,134			150,943			147,899			148,543			147,210			162,038			144,558
Consumer	8			9			11			13			16			9			18
Total loans	$	173,142		$	150,952		$	147,910		$	148,556		$	147,226		$	162,047		$	144,576
Total assets	$	199,254		$	172,502		$	167,555		$	168,193		$	163,897		$	185,878		$	160,551
Deposits
Noninterest-bearing demand	$	53,157		$	40,651		$	39,513		$	38,740		$	38,765		$	46,904		$	39,156
Interest-bearing demand	27,674			21,101			20,851			20,523			18,702			24,388			18,267
Money market	36,595			28,468			30,264			29,456			26,948			32,532			26,292
Other	9,546			7,868			7,916			7,100			6,109			8,706			5,830
Total deposits	$	126,972		$	98,088		$	98,544		$	95,819		$	90,524		$	112,530		$	89,545
Performance Ratios
Return on average assets	(.72		)%	.87		%	1.54		%	1.52		%	1.47		%	.01		%	1.45		%
Noninterest income to total revenue	41		%	42		%	40		%	41		%	42		%	41		%	41		%
Efficiency	38		%	43		%	45		%	44		%	44		%	40		%	45		%
Other Information
Consolidated revenue from:
Treasury Management (b)	$	469		$	491		$	494		$	460		$	467		$	960		$	912
Capital Markets (b)	$	388		$	344		$	291		$	290		$	313		$	732		$	559
Commercial mortgage banking activities
Commercial mortgage loans held for sale (c)	$	42		$	29		$	24		$	38		$	20		$	71		$	35
Commercial mortgage loan servicing income (d)	67			69			71			71			65			136			119
Commercial mortgage servicing rights valuation, net of economic hedge (e)	22			20			2			1			11			42			16
Total	$	131		$	118		$	97		$	110		$	96		$	249		$	170
MSR asset value (f)	$	490		$	477		$	649		$	595		$	630
Average Loans by C&IB business
Corporate Banking	$	91,634		$	78,057		$	75,665		$	74,883		$	74,366		$	84,846		$	72,736
Real Estate	42,124			37,368			36,908			38,172			37,143			39,746			36,752
Business Credit	23,943			23,251			22,900			22,824			22,877			23,597			22,306
Commercial Banking	10,708			7,784			7,793			7,947			8,080			9,246			8,099
Other	4,733			4,492			4,644			4,730			4,760			4,612			4,683
Total average loans	$	173,142		$	150,952		$	147,910		$	148,556		$	147,226		$	162,047		$	144,576
Credit-related statistics
Nonperforming assets (f)	$	674		$	508		$	444		$	526		$	497
Net charge-offs - loans and leases	$	99		$	50		$	47		$	30		$	23		$	149		$	28


(a)	See note (a) on page 14.


(b)	Amounts reported in net interest income and noninterest income.


(c)	Represents 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.


(d)	Represents 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.


(e)	Amounts are reported in corporate service fees.


(f)	Presented as of period end.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Table 20: 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	2020			2020			2019			2019			2019			2020			2019
Income Statement
Net interest income	$	89		$	88		$	80		$	70		$	68		$	177		$	138
Noninterest income	204			204			272			216			286			408			503
Total revenue	293			292			352			286			354			585			641
Provision for credit losses (benefit)	39			3			1			(1		)	—			42			(1		)
Noninterest expense	217			219			232			228			249			436			479
Pretax earnings	37			70			119			59			105			107			163
Income taxes	9			16			28			13			25			25			38
Earnings	$	28		$	54		$	91		$	46		$	80		$	82		$	125
Average Balance Sheet
Loans
Consumer
Residential real estate	$	2,636		$	2,385		$	2,193		$	1,980		$	1,792		$	2,511		$	1,758
Other	3,975			4,052			4,145			4,207			4,216			4,013			4,289
Total consumer	$	6,611		$	6,437		$	6,338		$	6,187		$	6,008		$	6,524		$	6,047
Commercial	$	883		$	856		$	793		$	758		$	731		$	869		$	741
Total loans	$	7,494		$	7,293		$	7,131		$	6,945		$	6,739		$	7,393		$	6,788
Total assets	$	7,958		$	7,801		$	7,697		$	7,331		$	7,150		$	7,880		$	7,204
Deposits
Noninterest-bearing demand	$	1,421		$	1,468		$	1,407		$	1,299		$	1,347		$	1,445		$	1,368
Interest-bearing demand	7,742			6,850			6,846			3,393			2,891			7,296			2,983
Money market	1,597			1,709			1,773			1,740			1,785			1,653			1,910
Savings	7,398			7,197			6,950			6,302			5,875			7,297			5,799
Other	722			847			898			893			797			785			747
Total deposits	$	18,880		$	18,071		$	17,874		$	13,627		$	12,695		$	18,476		$	12,807
Performance Ratios
Return on average assets	1.41		%	2.81		%	4.69		%	2.49		%	4.49		%	2.10		%	3.50		%
Noninterest income to total revenue	70		%	70		%	77		%	76		%	81		%	70		%	78		%
Efficiency	74		%	75		%	66		%	80		%	70		%	75		%	75		%
Other Information
Nonperforming assets (b)	$	38		$	34		$	39		$	42		$	45
Net charge-offs - loans and leases	—			$	(1	)	$	4		—			—			$	(1	)	$	1
Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management	$	151		$	136		$	154		$	163		$	162
Nondiscretionary client assets under administration	138			128			143			135			132
Total	$	289		$	264		$	297		$	298		$	294
Discretionary client assets under management
Personal	$	94		$	84		$	99		$	98		$	99
Institutional	57			52			55			65			63
Total	$	151		$	136		$	154		$	163		$	162


(a)	See note (a) on page 14.


(b)	As of period end.


(c)	Excludes brokerage account client assets.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Glossary of Terms

Amortized cost basis - Amount at which a financial asset is originated or acquired, adjusted for applicable accretion or amortization of premiums, discounts and net deferred fees or costs, collection of cash, charge-offs, foreign exchange and fair value hedge accounting adjustments.

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 (Tailoring Rules) - Common stock plus related surplus, net of treasury stock, plus retained earnings, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments. 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 25% 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 - Basel III 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.

Current Expected Credit Loss (CECL) - Methodology for estimating the allowance for credit losses on in-scope financial assets held at amortized cost and unfunded lending related commitments which uses a combination of expected losses over a reasonable and supportable forecast period, a reversion period and long run average credit losses for their estimated contractual term.

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.



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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.

Fee income - Refers 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 - Basel III 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 is 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) - Assuming a credit obligor enters default status, an estimate of loss, based on collateral type, collateral value, loan exposure, and other factors. 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, OREO and foreclosed asserts. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans accounted for at amortized cost whose credit quality has deteriorated to the extent that full collection of contractual principal and interest is not probable, including TDRs which have not returned to performing status. Interest income is not recognized on nonperforming loans. Nonperforming loans exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale and loans accounted for under the fair value option.



THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

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

Off-balance sheet credit exposures - Standby letters of credit, financial guarantees, commitments to extend credit and similar unfunded obligations that are not unilaterally, unconditionally, cancelable at PNC’s option.

Operating leverage - The period to period dollar or percentage change in total revenue 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. Certain assets that have a government-guarantee which are classified as other receivables are excluded.

Probability of default (PD) - An estimate of the likelihood that a credit obligor will enter into default status.

Purchased credit deteriorated assets - Acquired loans or debt securities that, at acquisition, are determined to have experienced a more-than-insignificant deterioration in credit quality since origination or issuance.

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.

Reasonable and supportable forecast period (RSFP) - In context of CECL, the period for which forecasts and projections of macroeconomic variables have been determined to be reasonable and supportable, and are used as inputs for ACL measurement.

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.

Supplementary leverage ratio - Basel III Tier 1 capital divided by Supplementary leverage exposure.

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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