2 The PNC Financial Services Group, Inc. – Form 10-Q

~~Acquisition~~•Net interest margin decreased 5 basis points to 2.79% as the change in yields on interest-earning assets was more than offset by the change in rates on funding costs.

•Noninterest income decreased $235 million, or 12%, due to lower private equity revenue, a decrease in mortgage servicing rights valuation, net of ~~BBVA USA Bancshares, Inc.~~

On June 1, 2021, PNC acquired BBVA USA Bancshares, Inc. (BBVA), a U.S. financial holding company conducting its business operations primarily through its U.S. banking subsidiary, BBVA USA. PNC paid $11.5 billion in cash as consideration for the acquisition.economic hedge and lower revenue from market sensitive businesses, partially offset by seasonally higher consumer transaction volumes and increased treasury management product revenue. The decrease also included negative Visa Class B derivative fair value adjustments of $83 million related to litigation escrow funding and other valuation changes. The first quarter of 2023 included negative Visa Class B derivative fair value adjustments of $45 million.

•

~~On October 8, 2021, BBVA USA merged into PNC Bank. On October 12, 2021, PNC converted approximately 2.6 million customers, 9,000 employees and over 600 branches across seven states. Our results~~Provision for credit losses of ~~operations and balance sheets for all periods presented in this Report reflect the benefit of BBVA's acquired businesses for the period since the acquisition closed on June 1, 2021.~~

~~For additional information on the acquisition of BBVA, see Note 2 Acquisition Activity~~$146 million in the ~~Notes To Consolidated Financial Statements~~second quarter of 2023 reflected portfolio activity and changes in macroeconomic variables. The first quarter of 2023 included ~~in Item 1~~a provision for credit losses of ~~this Report~~$235 million.

•Noninterest expense increased $51 million, or 2%, to $3.4 billion, primarily due to seasonally higher marketing spend and ~~Note 2 Acquisition and Divestiture Activity in~~ the ~~Notes To Consolidated Financial Statements included in Item 8~~full quarter impact of ~~our 2021 Form 10-K.~~

annual employee merit increases.

~~Income Statement Highlights~~

Net income of ~~$1.5~~$3.2 billion, or ~~$3.39 per diluted common share for the second quarter of 2022 increased $67 million, or 5%, compared to $1.4 billion, or $3.23~~$7.34 per diluted common share, for the first ~~quarter~~six months of 2023 increased $269 million, or 9%, compared to $2.9 billion, or $6.61 per diluted common share, for the six months ended 2022, ~~driven by~~primarily as a result of higher net interest ~~and noninterest~~ income, partially offset by a higher provision for credit losses and ~~higher~~increased expenses.

•For the ~~three~~six months ended June 30, ~~2022~~2023 compared to the ~~three~~six months ended ~~March 31,~~June 30, 2022:

•Total revenue increased ~~$424 million,~~$1.1 billion, or 9%11%, to ~~$5.1~~$10.9 billion.

•Net interest income increased $1.2 billion, or 21%, as a result of ~~$3.1 billion increased $247 million, or 9%, driven by~~ higher interest-earning asset yields ~~on interest-earning assets~~ and ~~increased loan~~ balances, partially offset by higher funding costs.

•Net interest margin increased 2242 basis points ~~to 2.50% due to higher yields on interest-earning assets.~~

•~~Noninterest income increased $177 million, or 9%, to $2.1 billion, primarily due to increases in capital markets related fees.~~

•~~The second quarter of 2022 included a provision for credit losses of $36 million. The first quarter of 2022 included a provision recapture of $208 million.~~

•~~Noninterest expense increased $72 million, or 2%, to $3.2 billion, driven by increased business activity, annual employee merit increases and higher marketing spend.~~

•~~We generated positive operating leverage of 7% in the second quarter of 2022 compared to the first quarter of 2022.~~

Net income of $2.9 billion, or $6.61 per diluted common share for the first six months of 2022 decreased $4 million, compared to $2.9 billion, or $6.53 per diluted common share for the six months ended 2021, as higher net interest income was largely offset by higher expenses and a lower provision recapture.

•~~For the six months ended June 30, 2022 compared to the six months ended June 30, 2021:~~

•~~Total revenue increased $921 million, or 10%, to $9.8 billion.~~

•~~Net interest income increased $926 million, or 19%, as a result of higher interest-earning asset balances,~~ reflecting the benefit of ~~BBVA, and higher yields, partially offset by higher funding costs.~~

•~~Net interest margin increased 11 basis points, due to~~ higher yields on interest-earning assets.

•Noninterest income decreased $5$152 million, or 4%, and included lower merger and acquisition advisory activity.

•Provision for credit losses of $381 million for the first six months of 2023 included the impact of our updated economic outlook and changes in portfolio composition and quality. The first six months of 2022 included a recapture of credit losses of $172 million.

•Noninterest expense increased ~~$792~~$277 million, or ~~14%~~4%, ~~driven by the addition of BBVA operating expenses~~due to higher personnel costs, an increased FDIC assessment rate and ~~increased~~higher marketing and technology costs to support business ~~activity, partially offset by lower integration expenses.~~growth.

For additional detail, see the Consolidated Income Statement Review section of this Financial Review.

Balance Sheet Highlights

Our balance sheet was strong and well positioned at June 30, 2023. In comparison to December 31, 2022:

•Total assets of $558.2 billion were stable.

•Total loans decreased $4.3 billion, or 1%, to $321.8 billion.

•Total commercial loans decreased $5.1 billion, or 2%, to $220.0 billion driven by a lower utilization of loan commitments in addition to paydowns outpacing new production.

•Total consumer loans increased $828 million to $101.8 billion as growth in residential mortgages, automobile, home equity and credit card loans were partially offset by declines in the remaining portfolios as paydowns outpaced new originations.

•Investment securities decreased $3.7 billion, or 3%, to $135.7 billion, primarily due to prepayments and maturities outpacing purchases.

•Interest-earning deposits with banks, primarily with the Federal Reserve Bank, increased $10.9 billion, or 40%, to $38.3 billion, primarily due to higher borrowed funds and a decrease in loans, partially offset by lower deposits.

•Total deposits decreased $8.8 billion, or 2%, to $427.5 billion as a result of lower consumer and commercial deposits, reflecting seasonal declines and the impact of quantitative tightening by the Federal Reserve. In addition, noninterest-bearing balances decreased due to the continued shift into interest-bearing deposit products as interest rates have risen.

•Borrowed funds increased $6.7 billion, or 11%, to $65.4 billion due to parent company senior debt issuances and higher FHLB borrowings.

For additional detail, see the Consolidated Balance Sheet Review section of this Financial Review.

The PNC Financial Services Group, Inc. – Form 10-Q 3

~~Balance Sheet Highlights~~

~~Our balance sheet was well positioned at June 30, 2022. In comparison to December 31, 2021:~~

•~~Total assets decreased $16.4 billion, or 3%, to $540.8 billion.~~

•~~Total loans increased $22.4 billion, or 8%, to $310.8 billion.~~

•~~Total commercial loans increased $19.4 billion, or 10%, to $212.5 billion, driven by new production, and higher utilization of loan commitments, partially offset by PPP loan forgiveness.~~

•~~PPP loans outstanding were $1.0 billion and $3.4 billion at June 30, 2022 and December 31, 2021, respectively.~~

•Total consumer loans increased $3.0 billion to $98.3 billion, primarily due to increases in residential mortgages and home equity, partially offset by declines in the remaining portfolios as paydowns outpaced new originations.

•~~Investment securities decreased $0.2 billion to $132.7 billion, resulting from net unrealized losses, which reflected the impact of higher interest rates, partially offset by net purchase activity.~~

•Interest-earning deposits with banks, primarily with the Federal Reserve Bank, decreased $45.8 billion, or 62%, to $28.4 billion, reflecting higher loans outstanding and lower deposits, partially offset by an increase in borrowed funds.

•~~Total deposits decreased $16.5 billion, to $440.8 billion reflecting deposit outflows and seasonal declines.~~

•~~Borrowed funds increased $5.2 billion, or 17%, to $36.0 billion, primarily due to increased FHLB borrowings, partially offset by lower bank notes and senior debt.~~

~~For additional detail, see the Consolidated Balance Sheet Review section of this Financial Review.~~

Credit Quality Highlights

The second quarter of ~~2022~~2023 reflected strong credit quality performance.

•At June 30, ~~2022~~2023 compared to December 31, ~~2021:~~2022:

•Nonperforming assets ~~of $2.1 billion~~ decreased ~~$431~~$70 million, or ~~17%~~3%, ~~primarily driven by lower nonperforming commercial loans.~~to $1.9 billion.

•Overall loan delinquencies of ~~$1.5~~$1.2 billion decreased ~~$474~~$278 million, or ~~24%~~19%, driven by lower consumer and commercial ~~delinquencies, which included the resolution of BBVA USA conversion-related administrative and operational delays.~~loan delinquencies.

•The ACL related to loans, which consists of the ALLL and the allowance for unfunded lending related commitments, ~~decreased~~totaled $5.4 billion at both June 30, 2023 and December 31, 2022. During the six months ended June 30, 2023, reserves reflected our updated economic outlook and changes in portfolio composition and quality. ACL to ~~$5.1 billion, or 1.65% of~~ total loans was 1.68% and 1.67% at June 30, ~~2022, compared to $5.5 billion, or 1.92% of total loans at~~2023 and December 31, ~~2021. The decrease was primarily driven by the impacts from portfolio changes and improved COVID-19 related economic conditions.~~2022, respectively.

•Net charge-offs of ~~$83~~$194 million, or ~~0.11%~~0.24% of average loans, in the second quarter of ~~2022 decreased $54 million, or 39%,~~2023 were stable compared to ~~$137 million, or 0.19% of average loans, for~~ the first quarter of ~~2022, driven by lower consumer net charge-offs, primarily within auto.~~2023.

For additional detail see the Credit Risk Management portion of the Risk Management section of this Financial Review.

Capital and Liquidity Highlights

We maintained our strong capital ~~position.~~and liquidity positions.

•Common shareholders’ equity of ~~$41.6~~$42.1 billion at June 30, ~~2022, decreased $9.1~~2023, increased $2.1 billion, or ~~18%~~5%, compared to December 31, ~~2021 as~~2022, increased due to the benefit of net income ~~was more than~~and an improvement in AOCI, partially offset by ~~a decrease in AOCI, reflecting the impact of higher interest rates on net unrealized losses on securities~~common dividends paid and ~~swaps. The decline was also attributable to~~ common share ~~repurchases and dividends paid.~~repurchases.

•In the second quarter weof 2023, PNC returned ~~$1.4~~$0.7 billion of capital to shareholders, ~~through common share repurchases~~as a result of ~~$737 million, representing 4.3 million shares, and~~$0.6 billion of dividends on common shares and $0.1 billion of ~~$627 million.~~common share repurchases, representing 1.1 million shares.

•~~The~~Consistent with the SCB framework, which allows for capital ~~returns~~return in amounts ~~up to the level of capital~~ in excess of the ~~firm's~~ SCB ~~plus the regulatory~~ minimum ~~level of capital (e.g., CET1 of 4.5%). Consistent with the flexibility provided under the SCB framework,~~levels, our Board of Directors has ~~recently~~ authorized a ~~new share~~ repurchase ~~structure,~~framework under the ~~already~~previously approved ~~authorization for repurchases~~repurchase program of up to 100 million common shares, of which approximately ~~59%~~46% were still available for repurchase at June 30, ~~2022. This framework and our capital flexibility allow for~~2023. PNC’s SCB through September 30, 2023 is 2.9%. Based on the ~~continuation~~results of ~~our recent quarterly average share repurchase levels in dollars as well as~~ the ~~ability to increase those levels should conditions warrant. PNC's~~Federal Reserve’s 2023 annual stress test, PNC’s SCB for the four-quarter period beginning October 1, ~~2022 is 2.9%~~2023 will improve to the regulatory minimum of 2.5%.

•On July ~~1, 2022,~~3, 2023, the PNC Board of Directors ~~declared a~~raised the quarterly cash dividend on common stock ~~of $1.50~~to $1.55 per share, ~~payable on~~an increase of 5 cents per share. The dividend, with a payment date of August 5, ~~2022.~~2023, will be payable the next business day.

•Our CET1 ratio ~~decreased~~increased to ~~9.6%~~9.5% at June 30, ~~2022~~2023 from ~~10.3%~~ 9.1% at December 31, ~~2021.~~2022.

•~~Capital was impacted by our election~~PNC elected a five-year transition provision effective March 31, 2020 to delay until December 31, 2021 the ~~estimated~~full impact of the CECL standard on ~~CET1~~regulatory capital, ~~through December 31, 2021,~~ followed by a three-year transition period. ~~CECL’s estimated impact on CET1 capital is defined as the change in retained earnings at adoption plus or minus 25% of the change in CECL ACL at the balance sheet date, excluding~~

4 ~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~

~~the initial allowance for PCD loans from BBVA, compared to CECL ACL at adoption.~~ Effective for the first quarter of 2022, PNC is now in the three-year transition period, and the full impact of the CECL standard is being phased-in to regulatory capital through December 31, 2024. The fully implemented ratios reflect the full impact of CECL and exclude the benefits of this transition provision. The estimated CET1 fully implemented ratio was 9.4% at June 30, 2023 compared to 8.9% at December 31, 2022.

•PNC’s average LCR for the three months ended June 30, 2023 was 109% and exceeded the regulatory minimum requirement throughout the quarter.

See the Liquidity and Capital Management portion of the Risk Management section of this Financial Review for more detail on our ~~2022~~2023 liquidity and capital actions as well as our capital ratios.

PNC’s ability to take certain capital actions, including returning capital to shareholders, is subject to PNC meeting or exceeding an SCB established by the Federal Reserve Board in connection with the Federal Reserve Board’s CCAR process. For additional information, see Capital Management in the Risk Management section in this Financial Review and the Supervision and Regulation section in ~~Item 1 Business and Item 1A Risk Factors of~~ our ~~2021~~2022 Form 10-K.

Business Outlook

Statements regarding our business outlook are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account the potential impact of legal and regulatory contingencies. These statements are based on our views that:

•The ~~U.S.~~ economy ~~continues~~continued to ~~recover from the pandemic-caused recession~~expand in the first half of ~~2020. Growth~~2023, but economic growth is ~~likely~~slowing in response to ~~be lower than~~ the ~~economy’s long-run average throughout this year. Consumer spending growth will remain solid~~ongoing Federal Reserve monetary policy tightening to slow inflation. This has led to large increases in ~~2022 due~~both short- and long-term interest rates. The housing market stabilized in the first half of 2023 as the Federal Reserve signaled a potential end to ~~good underlying fundamentals.~~

•~~Supply-chain difficulties will gradually ease over~~its federal funds rate hiking cycle. However, given the ~~course of 2022. Labor shortages will remain a constraint this year, although strong wage growth will support consumer spending.~~

•~~Inflation accelerated~~upward trajectory in mortgage rates and declining affordability, PNC continues to expect slower activity in the housing market in the second half of ~~2021 to its fastest pace~~2023 with a recovery in ~~decades. Inflation~~early 2024 as the

4 The PNC Financial Services Group, Inc. – Form 10-Q

Federal Reserve starts cutting the federal funds rate.

•PNC’s baseline outlook is for a mild recession starting in late 2023 or early 2024, with a smaller contraction in real GDP of less than 1%, lasting into mid-2024. The unemployment rate will ~~slow~~increase in the second half of ~~2022 as pandemic-related supply~~this year, ending 2023 at above 4%, and then peak slightly above 5% in early 2025. Inflation will slow with weaker demand, ~~imbalances recede and energy prices stabilize. However, inflation will also broaden throughout the economy due~~moving back to ~~wage growth. The annual inflation rate will end 2022 above~~ the Federal Reserve’s ~~long-run~~2% objective ~~of 2%.~~by this time next year.

•~~The FOMC raised~~PNC expects the federal funds rate ~~by 0.75% in July,~~ to ~~a range of 2.25% to 2.50%. PNC expects further increases in the federal funds rate~~remain between 5.25% and 5.50% through ~~the rest of this year, to a range of 3.25% to 3.50% at the end of 2022. The federal funds rate~~March 2024, when it is expected that the Federal Reserve will cut rates in response to ~~peak between 3.50% and 3.75% in mid-early 2023, before falling in~~ the ~~second half of next year as inflation ebbs and economic growth slows.~~

•Uncertainty about the outlook has increased with the Russian invasion of Ukraine. It has created additional risk to higher inflation this year, which could lead the FOMC to tighten more aggressively than currently anticipated. In addition, risks to growth and the likelihood of a recession in late 2022 or 2023 have increased.recession.

For the third quarter of ~~2022,~~2023, compared to the second quarter of ~~2022,~~2023, we expect:

•Average loans to be down approximately 1%,

•Net interest income to be down 3% to 4%,

•Noninterest income, excluding net securities gains and Visa activity, to be up 1%10% to 2%11%,

•Revenue to be up approximately 1%,

•Noninterest expense, excluding the proposed FDIC special assessment, to be stable, and

•Net loan charge-offs to be $200 million to $250 million.

For the full year 2023, compared to the full year of 2022, we expect:

•Period-end loans to be stable,

•Average loans to be up 5% to 6%,

•Net interest income to be up ~~10%~~5% to ~~12%~~6%,

•Noninterest income, excluding net securities gains and Visa activity, to be down 3%2% to 5%4%,

•Revenue to be up 4%2% to ~~6%,~~

•~~Noninterest expense to be stable to up 1%, and~~

•~~Net loan charge-offs to be between $125 million and $175 million.~~

~~For the full year 2022, compared to full year 2021, we expect:~~

•~~Average loans to be up approximately 13%,~~

•~~Period-end loans to be up approximately 8%,~~

•~~Revenue to be up 9% to 11%~~2.5%,

•Noninterest expense, excluding ~~integration expense,~~the proposed FDIC special assessment, to be up ~~4% to 6%~~approximately 2%, and

•The effective tax rate to be approximately ~~19%~~18%.

We cannot provide, without unreasonable effort, a meaningful or accurate reconciliation of forward-looking non-GAAP measures to their most directly comparable GAAP financial measures. This is due to the inherent difficulty of forecasting the timing and amounts necessary for the reconciliation when such amounts are subject to events that cannot be reasonably predicted, as noted in our Cautionary Statement. Accordingly, we cannot address the probable significance of unavailable information.

See the Cautionary Statement Regarding Forward-Looking Information section in this Financial Review and Item 1A Risk Factors included in our ~~2021~~first quarter 2023 Form 10-Q and 2022 Form 10-K for other factors that could cause future events to differ, perhaps materially, from those anticipated in these forward-looking statements.

CONSOLIDATED INCOME STATEMENT REVIEW

Our Consolidated Income Statement is presented in ~~Part I,~~ Item 1 of this Report.

Net income of $1.5 billion, or ~~$3.39~~$3.36 per diluted common share, for the second quarter of ~~2022 increased $67~~2023 decreased $194 million, or 5%11%, compared to ~~$1.4~~$1.7 billion, or ~~$3.23~~$3.98 per diluted common share, for the first quarter of 2023, primarily due to lower noninterest income, net interest income and increased expenses, partially offset by a lower provision for credit losses. Net income of $3.2 billion, or $7.34 per diluted common share for the first six months of 2023 increased $269 million, or 9%, compared to $2.9 billion, or $6.61 per diluted common share for the same period in 2022, ~~driven by~~primarily as a result of higher net interest income, partially offset by a higher provision for credit losses and ~~noninterest income,~~increased expenses.

The PNC Financial Services Group, Inc. – Form 10-Q 5

partially offset by a higher provision for credit losses and higher expenses. Net income of $2.9 billion, or $6.61 per diluted common share for the first six months of 2022 decreased $4 million, compared to $2.9 billion, or $6.53 per diluted common share, for the same period in 2021, as higher net interest income was largely offset by higher expenses and a lower provision recapture.

Net Interest Income

Table 2:3: Summarized Average Balances and Net Interest Income (a)


		June 30, 2022						March 31, 2022						June 30, 2023						March 31, 2023
Three months ended Dollars in millions	Three months ended Dollars in millions	Average Balances		Average Yields/ Rates		Interest Income/ Expense		Average Balances		Average Yields/ Rates		Interest Income/ Expense			Three months ended Dollars in millions	Average Balances		Average Yields/ Rates		Interest Income/ Expense		Average Balances		Average Yields/ Rates		Interest Income/ Expense
Assets	Assets														Assets
Interest-earning assets	Interest-earning assets														Interest-earning assets
Investment securities	Investment securities	$	134,724	1.89	%	$	636	$	133,897	1.64	%	$	548		Investment securities	$	141,038	2.52	%	$	889	$	143,391	2.49	%	$	891
Loans	Loans	304,790		3.29	%	2,524		290,701		3.19	%	2,311			Loans	324,534		5.57	%	4,554		325,526		5.29	%	4,290
Interest-earning deposits with banks	Interest-earning deposits with banks	39,689		0.79	%	78		62,540		0.19	%	29			Interest-earning deposits with banks	31,433		5.10	%	400		34,054		4.58	%	390
Other	Other	9,935		2.76	%	68		9,417		2.07	%	48			Other	9,215		5.96	%	138		8,806		5.75	%	126
Total interest-earning assets/interest income	Total interest-earning assets/interest income	$	489,138	2.69	%	3,306		$	496,555	2.37	%	2,936			Total interest-earning assets/interest income	$	506,220	4.70	%	5,981		$	511,777	4.46	%	5,697
Liabilities	Liabilities														Liabilities
Interest-bearing liabilities	Interest-bearing liabilities														Interest-bearing liabilities
Interest-bearing deposits	Interest-bearing deposits	$	297,096	0.12	%	88		$	299,543	0.04	%	27			Interest-bearing deposits	$	312,559	1.96	%	1,531		$	315,056	1.66	%	1,291
Borrowed funds	Borrowed funds	35,656		1.58	%	142		30,312		1.10	%	83			Borrowed funds	65,692		5.44	%	903		62,968		4.98	%	783
Total interest-bearing liabilities/interest expense	Total interest-bearing liabilities/interest expense	$	332,752	0.27	%	230		$	329,855	0.13	%	110			Total interest-bearing liabilities/interest expense	$	378,251	2.56	%	2,434		$	378,024	2.20	%	2,074
Net interest margin/income (non-GAAP)	Net interest margin/income (non-GAAP)			2.50	%	3,076				2.28	%	2,826			Net interest margin/income (non-GAAP)			2.79	%	3,547				2.84	%	3,623
Taxable-equivalent adjustments	Taxable-equivalent adjustments					(25)						(22)			Taxable-equivalent adjustments					(37)						(38)
Net interest income (GAAP)	Net interest income (GAAP)					$	3,051					$	2,804		Net interest income (GAAP)					$	3,510					$	3,585

34The PNC Financial Services Group, Inc. – Form 10-Q

The following graph presents the SOFR curves for the base rate scenario and each of the alternate scenarios one year ~~forward.~~forward:

Table 33: Alternate Interest Rate Scenarios: One Year Forward

The second quarter ~~2022~~2023 interest sensitivity analyses indicate that our Consolidated Balance Sheet is positioned to benefit from an increase in interest rates over the longer term and an upward sloping interest rate yield curve. We believe that we have the deposit funding base and balance sheet flexibility to adjust, where appropriate and permissible, to changing interest rates and market conditions.

Market Risk Management – Customer-Related Trading Risk

We engage in fixed income securities, derivatives and foreign exchange transactions to support our customers’ investing and hedging activities. These transactions, related hedges and the credit valuation adjustment related to our customer derivatives portfolio are marked-to-market daily and reported as customer-related trading activities. We do not engage in proprietary trading of these products.

We use VaR as the primary means to measure and monitor market risk in customer-related trading activities. VaR is used to estimate the probability of portfolio losses based on the statistical analysis of historical market risk factors. VaR is calculated for each of the portfolios that comprise our customer-related trading activities of which the majority are covered positions as defined by the Market Risk Rule. VaR is computed with positions and market risk factors updated daily to ensure each portfolio is operating within its acceptable limits. See the Market Risk Management – Customer-Related Trading Risk section of our 2022 Form 10-K for more information on our models used to calculate VaR and our backtesting process.

Customer-related trading revenue was $107 million for the six months ended June 30, 2023, compared to $198 million for the six months ended June 30, 2022. The decrease was mainly due to higher funding costs on the trading positions inventory and lower derivative client sales revenues, partially offset by improved foreign exchange client revenues.

Market Risk Management – Equity And Other Investment Risk

Equity investment risk is the risk of potential losses associated with investing in both private and public equity markets. In addition to extending credit, taking deposits, underwriting securities and trading financial instruments, we make and manage direct investments in a variety of transactions, including management buyouts, recapitalizations and growth financings in a variety of industries. We also have investments in affiliated and non-affiliated funds that make similar investments in private equity, consistent with regulatory limitations. The economic and/or book value of these investments and other assets are directly affected by changes in market factors.

Various PNC business units manage our equity and other investment activities. Our businesses are responsible for making investment decisions within the approved policy limits and associated guidelines.

The PNC Financial Services Group, Inc. – Form 10-Q 35

A summary of our equity investments follows:

Table 34: Equity Investments Summary


	June 30 2023		December 31 2022		Change
Dollars in millions					$		%
Tax credit investments	$	4,267	$	4,308	$	(41)	(1)	%
Private equity and other	3,748		4,129		(381)		(9)	%
Total	$	8,015	$	8,437	$	(422)	(5)	%

Tax Credit Investments

Included in our equity investments are direct tax credit investments and equity investments held by consolidated entities. These tax credit investment balances included unfunded commitments totaling $2.4 billion and $2.5 billion at June 30, 2023 and December 31, 2022, respectively. These unfunded commitments are included in Other liabilities on our Consolidated Balance Sheet.

Note 5 Loan Sale and Servicing Activities and Variable Interest Entities in our 2022 Form 10-K has further information on tax credit investments.

Private Equity and Other

The largest component of our other equity investments is our private equity portfolio. The private equity portfolio is an illiquid portfolio consisting of mezzanine and equity investments that vary by industry, stage and type of investment. Private equity investments carried at estimated fair value totaled $1.8 billion at both June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, $1.6 billion was invested directly in a variety of companies and $0.2 billion was invested indirectly through various private equity funds.

Included in our other equity investments are Visa Class B common shares, which are recorded at cost. Visa Class B common shares that we own are transferable only under limited circumstances until they can be converted into shares of the publicly-traded Class A common shares, which cannot happen until the resolution of the pending interchange litigation. Based upon the June 30, 2023 per share closing price of $237.48for a Visa Class A common share, the estimated value of our total investment in the Class B common shares was approximately $1.3 billion at the current conversion rate of Visa B shares to Visa A shares, while our cost basis was insignificant. See Note 15 Fair Value and Note 21 Legal Proceedings in our 2022 Form 10-K for additional information regarding our Visa agreements. The estimated value does not represent fair value of the Visa B common shares given the shares’ limited transferability and the lack of observable transactions in the marketplace.

We also have certain other equity investments, the majority of which represent investments in affiliated and non-affiliated funds with both traditional and alternative investment strategies. Net gains related to these investments were $19 million for the six months ended June 30, 2023 and $23 million for the six months ended June 30, 2022.

Financial Derivatives

We use a variety of financial derivatives as part of the overall asset and liability risk management process to help manage exposure to market (primarily interest rate) and credit risk inherent in our business activities. We also enter into derivatives with customers to facilitate their risk management activities.

Financial derivatives involve, to varying degrees, market and credit risk. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional and an underlying as specified in the contract. Therefore, cash requirements and exposure to credit risk are significantly less than the notional amount on these instruments.

Further information on our financial derivatives is presented in Note 1 Accounting Policies, Note 15 Fair Value and Note 16 Financial Derivatives in our 2022 Form 10-K and in Note 11 Fair Value and Note 12 Financial Derivatives in this Report.

Not all elements of market and credit risk are addressed through the use of financial derivatives, and such instruments may be ineffective for their intended purposes due to unanticipated market changes, among other reasons.

~~LIBOR Transition~~Private Equity and Other

The ~~scheduled discontinuance~~largest component of ~~the requirement~~our other equity investments is our private equity portfolio. The private equity portfolio is an illiquid portfolio consisting of mezzanine and equity investments that ~~banks submit rates for the calculation~~vary by industry, stage and type of ~~LIBOR after~~investment. Private equity investments carried at estimated fair value totaled $1.8 billion at both June 30, 2023 ~~presents risks to the financial instruments originated, held or serviced by PNC that use LIBOR as~~and December 31, 2022, respectively. As of June 30, 2023, $1.6 billion was invested directly in a ~~reference rate. For more discussion regarding the transition from LIBOR, see the Risk Management section in Item 7~~variety of ~~our 2021 Form 10-K.~~companies and $0.2 billion was invested indirectly through various private equity funds.

~~Key efforts related~~Included in our other equity investments are Visa Class B common shares, which are recorded at cost. Visa Class B common shares that we own are transferable only under limited circumstances until they can be converted into shares of the publicly-traded Class A common shares, which cannot happen until the resolution of the pending interchange litigation. Based upon the June 30, 2023 per share closing price of $237.48for a Visa Class A common share, the estimated value of our total investment in the Class B common shares was approximately $1.3 billion at the current conversion rate of Visa B shares to Visa A shares, while our ~~transition plan to date have included:~~

•~~Enhancing fallback language~~cost basis was insignificant. See Note 15 Fair Value and Note 21 Legal Proceedings in ~~new contracts~~our 2022 Form 10-K for additional information regarding our Visa agreements. The estimated value does not represent fair value of the Visa B common shares given the shares’ limited transferability and ~~reviewing existing legal contracts/agreements to assess fallback language impacts,~~

•~~Making preparations for internal operational readiness,~~

•~~Making necessary enhancements to PNC's infrastructure, including systems, models, valuation tools and processes,~~

•~~Developing and delivering on internal and external LIBOR cessation communication plans,~~

•~~Engaging with PNC clients, industry working groups and regulators,~~

•~~Monitoring developments associated with LIBOR alternatives and industry practices related to LIBOR-indexed instruments,~~

•~~Incorporating BBVA into PNC’s LIBOR transition effort, and~~

•~~Initiating~~ the ~~offering~~lack of ~~instruments referencing alternative rates~~observable transactions in ~~order to align with regulatory guidance encouraging~~ the ~~transition away from the use of USD LIBOR in new contracts after December 31, 2021.~~marketplace.

~~PNC began offering conforming adjustable rate mortgages using SOFR instead~~We also have certain other equity investments, the majority of ~~USD LIBOR,~~which represent investments in ~~line~~affiliated and non-affiliated funds with ~~Fannie Mae~~both traditional and Freddie Mac requirements, and nonconforming adjustable rate residential mortgages using SOFR and private education loans using Prime. Alternative rates including, but not limited to, the Bloomberg Short Term Bank Yield Index and SOFR are currently being offered to our corporate and commercial customers. The focus for 2022 is planning for the cessation event in 2023 for all lines of business. Corporate & Institutional Banking has initiated amending contracts with inadequate fallback language, working on systems enhancements and continuing with client outreach and education. PNC has provided regular updates to Federal Reserve, OCC and FDIC examination staff regarding its LIBOR cessation and transition plans.

~~Market Risk Management – Customer-Related Trading Risk~~

We engage in fixed income securities, derivatives and foreign exchange transactions to support our customers’ investing and hedging activities. These transactions, related hedges and the credit valuation adjustmentalternative investment strategies. Net gains related to ~~our customer derivatives portfolio are marked-to-market daily and reported as customer-related trading activities.We do not engage in proprietary trading of~~ these ~~products.~~

36 ~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~

~~See the Market Risk Management – Customer-Related Trading Risk section of our 2021 Form 10-K for more information on our models used to calculate VaR and our backtesting process.~~

~~Customer-related trading revenue was $198~~investments were $19 million for the six months ended June 30, ~~2022, compared to $179~~2023 and $23 million for the six months ended June 30, 2021. The increase was primarily due to improved interest rate derivative and foreign exchange client sales revenues, partially offset by the impact of changes in credit valuations for customer-related derivative activities.2022.

~~Market Risk Management – Equity And Other Investment Risk~~

We use a variety of ~~transactions, including~~financial derivatives as part of the overall asset and liability risk management ~~buyouts, recapitalizations~~process to help manage exposure to market (primarily interest rate) and ~~growth financings~~credit risk inherent in ~~a variety of industries.~~our business activities. We also ~~have investments in affiliated and non-affiliated funds that make similar investments in private equity, consistent~~enter into derivatives with ~~regulatory limitations. The economic and/or book value of these investments and other assets are directly affected by changes in market factors.~~

~~Various PNC business units manage our equity and other investment~~customers to facilitate their risk management activities. ~~Our businesses are responsible for making investment decisions within the approved policy limits and associated guidelines.~~

~~A summary of our equity investments follows:~~

~~Table 34: Equity Investments Summary~~

June 30
2022 December 31
2021 Change
Dollars in millions $ %
Tax credit investments $ 4,081 $ 3,954 $ 127 3 %
Private equity and other 4,360 4,226 134 3 %
Total $ 8,441 $ 8,180 $ 261 3 %

~~Tax Credit Investments~~

~~Included~~Financial derivatives involve, to varying degrees, market and credit risk. Derivatives represent contracts between parties that usually require little or no initial net investment and result in ~~our equity investments~~one party delivering cash or another type of asset to the other party based on a notional and an underlying as specified in the contract. Therefore, cash requirements and exposure to credit risk are direct tax credit investments and equity investments held by consolidated entities. These tax credit investment balances included unfunded commitments totaling $2.3 billion and $2.2 billion at June 30, 2022 and December 31, 2021, respectively. These unfunded commitments are included in Other liabilitiessignificantly less than the notional amount on ~~our Consolidated Balance Sheet.~~these instruments.

Further information on our financial derivatives is presented in Note ~~5 Loan Sale~~1 Accounting Policies, Note 15 Fair Value and ~~Servicing Activities and Variable Interest Entities~~Note 16 Financial Derivatives in ~~the Notes To Consolidated Financial Statements in Item 8 of~~ our ~~2021~~2022 Form 10-K ~~has further information on tax credit investments.~~and in Note 11 Fair Value and Note 12 Financial Derivatives in this Report.

Private Equity and Other

The largest component of our other equity investments is our private equity portfolio. The private equity portfolio is an illiquid portfolio consisting of mezzanine and equity investments that vary by industry, stage and type of investment. Private equity investments carried at estimated fair value totaled ~~$2.0 billion and~~ $1.8 billion at both June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. As of June 30, ~~2022, $1.9~~2023, $1.6 billionwas invested directly in a variety of companies and ~~$0.1~~$0.2 billion was invested indirectly through various private equity funds.

Included in our other equity investments are Visa Class B common shares, which are recorded at cost. Visa Class B common shares that we own are transferable only under limited circumstances until they can be converted into shares of the publicly-traded Class A common shares, which cannot happen until the resolution of the pending interchange litigation. Based upon the June 30, ~~2022~~2023 per share closing price of ~~$196.89~~$237.48 for a Visa Class A common share, the estimated value of our total investment in the Class B common shares was approximately ~~$1.1~~$1.3 billion at the current conversion rate of Visa B shares to Visa A shares, while our cost basis was insignificant. See Note 15 Fair Value and Note 21 Legal Proceedings in ~~the Notes To Consolidated Financial Statements in Item 8 of~~ our ~~2021~~2022 Form 10-K for additional information regarding our Visa agreements. The estimated value does not represent fair value of the Visa B common shares given the ~~shares'~~shares’ limited transferability and the lack of observable transactions in the marketplace.

~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~ 37

Financial Derivatives

Further information on our financial derivatives is presented in Note 1 Accounting Policies, Note 15 Fair Value and Note 16 Financial Derivatives in our ~~Notes To Consolidated Financial Statements in Item 8 of our 2021~~2022 Form 10-K and in Note 1211 Fair Value and Note 1312 Financial Derivatives in ~~the Notes To Consolidated Financial Statements in Item 1 of~~ this Report.

LIBOR Transition

The cessation after June 30, 2023 of the requirement that banks submit rates for the calculation of LIBOR presents risks to the financial instruments originated, held or serviced by PNC that use LIBOR as a reference rate. For more discussion regarding the transition from LIBOR, see Item 1 Risk Factors and the Risk Management section in Item 7 of our 2022 Form 10-K.

As previously announced, PNC’s Series O, Series R and Series S preferred stock will transition to three-month CME Term SOFR plus a tenor spread adjustment of 0.26161% per annum (“Adjusted three-month CME Term SOFR”) as the replacement reference rate. Adjusted three-month CME Term SOFR will be used with respect to applicable floating-rate dividend periods with dividend

36 The PNC Financial Services Group, Inc. – Form 10-Q

determination dates occurring after June 30, 2023. The calculation of interest on the junior subordinated debentures issued by The PNC Financial Services Group, Inc. and owned by PNC Capital Trust C, a wholly-owned finance subsidiary of The PNC Financial Services Group, Inc., as well as the calculation of distributions on the trust preferred securities issued by PNC Capital Trust C will transition to a replacement reference rate of Adjusted three-month CME Term SOFR for interest or distribution periods, as applicable, with determination dates occurring after June 30, 2023. Further, two series of debt securities issued by a predecessor banking subsidiary, National City Bank, will also transition the calculation of interest. The National City Bank Notes due April 1, 2043 will use Adjusted three-month CME Term SOFR as the replacement reference rate for interest periods with determination dates occurring after June 30, 2023. The National City Bank Notes due April 1, 2037 will use one-month CME Term SOFR plus a tenor spread adjustment of 0.11448% per annum as the replacement reference rate with respect to interest periods with determination dates occurring after June 30, 2023.

As of June 30, 2023, PNC had approximately $32.1 billion in loans and securities and $347.8 billion notional value in derivatives tied to LIBOR. The vast majority of PNC’s LIBOR exposures have already transitioned or will transition to a non-LIBOR rate on their next reset date. As previously anticipated, a small subset of these exposures will leverage the Adjustable Interest Rate LIBOR Act for its intended purpose to address difficult exposures when necessary or will transition to “synthetic LIBOR,” a substitute version of LIBOR to be published through the end of September 2024 and calculated under an alternative methodology based on CME Term SOFR plus the applicable tenor spread adjustment.

RECENT REGULATORY DEVELOPMENTS

Bank Failures and Resolutions

Following the bank failures in March 2023 of Silicon Valley Bank, Santa Clara, California, and Signature Bank, New York, New York, and after recommendations by the boards of the FDIC and Federal Reserve and a determination by the Secretary of the Treasury in consultation with the President, the FDIC invoked the systemic risk exception to certain resolution-related and Deposit Insurance Fund restrictions in order to fully protect all depositors of both institutions, including uninsured deposits. The FDIC currently estimates the cost of protecting the uninsured depositors to the Deposit Insurance Fund at approximately $15.8 billion. By law, any losses to the Deposit Insurance Fund to support uninsured depositors under the systemic risk exception must be recovered by one or more special assessments on insured depository institutions or depository institution holding companies, or both. In May 2023, the FDIC proposed a rule to implement the special assessment. Under the proposal, the FDIC would collect from PNC, along with other BHCs and insured depository institutions, special assessments at an annual rate of 12.5 basis points of PNC’s uninsured deposits reported as of December 31, 2022 (adjusted to exclude the first $5 billion), over eight quarterly assessment periods, beginning after the first quarter 2024. See Note 16 Regulatory Matters for additional information.

Capital, Capital Planning, and Liquidity

In June ~~2022,~~2023, the Federal Reserve announced the results of its supervisory stress tests conducted as part of the ~~2022~~2023 CCAR process. PNC remained well above its risk-based minimum capital requirements in the supervisory stress tests, and PNC’s SCB for the four-quarter period beginning October 1, ~~2022, is 2.9%~~2023, will improve to the regulatory minimum of 2.5%. See the Liquidity and Capital Management portion of the Risk Management section in this Financial Review for a discussion of PNC’s capital actions.

~~Other Developments~~Proposed Expanded Risk-Based Capital Rules

~~In May 2022,~~On July 27, 2023, the ~~federal banking agencies issued a notice of~~Federal Reserve, OCC, and FDIC proposed ~~rulemaking~~for public comment an interagency rule to ~~amend~~implement the ~~regulations implementing the Community Reinvestment Act (CRA), which requires the agencies to assess a bank’s record of meeting the credit needs~~final components of the ~~communities in which they do business, including low- and moderate-income neighborhoods.The proposal~~Basel III framework that would significantly ~~expand~~revise the ~~number~~capital requirements for large banking organizations, including PNC and PNC Bank. In general, the proposed rule would align the regulatory capital elements and required deductions for Category III banking organizations such as PNC and PNC Bank with those currently applicable to Category I and II banking organizations and apply a new expanded risk-based approach which leverages the Basel rules, including the calculation of ~~areas~~risk-weighted assets (the “expanded risk-based approach”) in ~~which a bank~~addition to the current U.S. standardized approach. Our review of the proposal is ~~evaluated, materially change~~ongoing. Among other impacts, PNC and PNC Bank would be required to recognize most elements of AOCI in regulatory capital and deduct from CET1 capital, among other items, mortgage servicing assets and deferred tax assets that individually exceed 10 percent of CET1 capital or in the ~~tests used~~aggregate with other threshold items that exceed 15 percent of CET1 capital. The new expanded risk-based approach to ~~evaluate~~calculating risk-weighted assets would apply more granular and standardized risk-weighting methodologies for credit, operational, market, equity and credit valuation adjustment risks. PNC and PNC Bank would be required to calculate their risk-based capital ratios under the ~~bank in those areas,~~existing standardized approach and ~~expand~~ the ~~data a bank must collect~~expanded risk-based approach and ~~report.~~ Thewould be subject to the lower of the two resulting ratios for their risk-based capital minimums and buffer requirements, including the SCB. Based on our initial review of the proposal, we expect the proposal, if finalized ~~could~~in its current form, would result in lower pro forma capital ratios for PNC and PNC Bank that would remain above current minimum capital and buffer requirements. The proposal indicates the effective date of the final rule would be July 1, 2025, with certain provisions—including the recognition of AOCI elements in regulatory capital and the increase ~~PNC Bank’s obligations and compliance costs necessary~~in risk-weighted assets due to ~~achieve~~the expanded risk-based approach—having a ~~“Satisfactory” or “Outstanding” rating under~~three-year phase-in period. Comments on the ~~CRA framework, which factor into the ability of banks to expand and engage in new activities.~~proposal are due by November 30, 2023.

In June 2022, the FDIC issued a notice of proposed rulemaking to increase the assessment rates on deposit insurance by two basis points for all insured depository institutions like PNC Bank. Under the proposal, the new assessment rate schedule would begin with the first assessment period of 2023 and continue until the Deposit Insurance Fund reaches a reserve ratio of two percent.

The PNC Financial Services Group, Inc. – Form 10-Q 37

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Our consolidated financial statements are prepared by applying certain accounting policies. Note 1 Accounting Policies in our ~~2021~~2022 Form 10-K describes the most significant accounting policies that we ~~use to prepare our consolidated financial statements.~~use. Certain of these policies require us to make estimates or economic assumptions that may vary under different assumptions or conditions, and such variations may significantly affect our reported results and financial position for the period or in future periods. The policies and judgments related to residential and commercial MSRs and ~~level~~Level 3 fair value measurements are described in Critical Accounting Estimates and Judgments in ~~Item 7 of~~ our ~~2021~~2022 Form 10-K. The following details the critical estimates and judgments around the ACL.

Allowance for Credit Losses

We maintain the ACL at levels that we believe to be appropriate as of the balance sheet date to absorb expected credit losses on our existing investment securities, loans, equipment finance leases, other financial assets and unfunded lending related commitments, for the remaining contractual term of the assets or exposures, taking into consideration expected ~~prepayments.~~prepayments and estimated recoveries. Our determination of the ACL is based on historical loss and performance experience, as well as current borrower and transaction characteristics including collateral type and quality, current economic conditions, reasonable and supportable forecasts of future conditions and other relevant factors. We use methods sensitive to changes in economic conditions to interpret these factors and to estimate expected credit losses. We evaluate and, when appropriate, enhance the quality of our data and models and other methods used to estimate the ACL on an ongoing basis. We ~~apply~~incorporate qualitative factors ~~to reflect~~ in the ACL that reflect our best estimate of ~~amounts that we do not expect to collect because of, among other things, idiosyncratic risk factors, changes in economic conditions~~expected losses that may not be ~~reflected~~adequately represented in ~~forecasted results,~~our quantitative methods or ~~other potential methodology limitations.~~economic assumptions. The major drivers of ACL estimates include, but are not limited to:

38 ~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~

•Current economic conditions: Our forecast of expected losses depends on economic conditions as of the estimation date. As current economic conditions evolve, forecasted losses could be materially affected.

•Scenario weights and design: Our loss estimates are sensitive to the shape, direction and rate of change of macroeconomic forecasts and thus vary significantly between upside and downside scenarios. Changes to probability weights assigned to these scenarios and timing of peak business cycles reflected by the scenarios could materially affect our loss estimates.

•Current borrower quality: Our forecast of expected losses depends on current borrower and transaction characteristics, including credit metrics and collateral type/quality. As borrower quality evolves, forecasted losses could be materially affected.

•Portfolio volume and mix: Changes to portfolio volume and mix could materially affect our estimates, as CECL reserves

would be recognized upon origination or ~~acquisition.~~acquisition and derecognized upon paydown, maturity or sale.

For all assets and unfunded lending related commitments within the scope of the CECL standard, the applicable ACL is composed of one or a combination of the following components: (i) collectively assessed or pooled reserves, (ii) individually assessed reserves, and

(iii) qualitative (judgmental) reserves. Our methodologies and key assumptions for each of these components are discussed in Note 1

Accounting ~~Policies in our 2021 Form 10-K.~~Policies.

Reasonable and Supportable Economic Forecast

Under the CECL standard, we are required to consider reasonable and supportable forecasts in estimating expected credit losses. For this purpose,

we have established a framework ~~which~~that includes a ~~three year~~three-year forecast period and the use of four economic scenarios with associated probability weights, which in combination create a forecast of expected economic ~~outcomes over our reasonable and supportable forecast period.~~outcomes. Credit losses estimated in our reasonable and supportable forecast period are sensitive to the shape and severity of the scenarios used and weights assigned to them.

To generate the four economic forecast scenarios, we use a combination of quantitative macroeconomic models, other measures of economic activity and forward-looking expert judgment to forecast the distribution of economic outcomes over the reasonable and supportable forecast period. Each scenario is then given an associated probability (weight) ~~in order~~ to represent our current expectation within that distribution over the forecast period. This process is informed by current economic conditions, expected business cycle evolution and the expert judgment of PNC’s RAC. This approach seeks to provide a reasonable representation of the forecast of expected economic outcomes and is used to estimate expected credit losses across a variety of loans and securities. Each quarter, the scenarios are presented to RAC for approval, ~~to PNC’s RAC,~~ and the committee also ~~determines and~~ approves CECL ~~scenarios'~~scenarios’ weights for use for the current reporting period.

The scenarios used for the period ended June 30, ~~2022~~2023 reflect ana slight increase in downside risk compared to December 31, ~~2021.~~ 2022.The current outlook considers, among other factors, the ongoing inflationary pressures ~~that have broadened~~ and ~~intensified in recent months, along with our expectation that~~ the ~~FOMC will raise interest rates more aggressively than what was expected at December 31, 2021, increasing the risk~~corresponding tightening of ~~a broader-ranged economic slowdown. Though the~~monetary policy and credit availability. Our most-likely expectation ~~continues to be~~at June 30, 2023 is that the U.S. economy ~~avoids~~will be impacted by a mild recession ~~growth is expected to slow noticeably from current levels, and the primary downside risk to the outlook has shifted from the pandemic to monetary policy tightening and inflation.~~starting in late 2023 or early 2024.

We used a number of economic variables in our scenarios, with two of the most significant drivers being ~~Real~~real GDP and the U.S. unemployment rate. The following table presents a comparison of these two economic variables based on the weighted-average scenario forecasts used in determining our ACL at June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

38 The PNC Financial Services Group, Inc. – Form 10-Q

Table 35: Key Macroeconomic Variables in CECL Weighted-Average Scenarios

Assumptions as of June 30, 2022
2022 2023 2024
U.S. Real GDP (a) 1.6% 0.5% 1.2%
U.S. Unemployment Rate (b) 3.6% 4.5% 4.5%
Assumptions as of December 31, 2021
2022 2023 2024
U.S. Real GDP (a) 2.8% 1.4% 1.3%
U.S. Unemployment Rate (b) 4.4% 4.1% 3.9%


	Assumptions as of June 30, 2023
	2023	2024	2025
U.S. real GDP (a)	0.9%	(0.1)%	1.9%
U.S. unemployment rate (b)	4.0%	4.9%	4.5%
	Assumptions as of December 31, 2022
	2023	2024	2025
U.S. real GDP (a)	(0.4)%	1.4%	1.9%
U.S. unemployment rate (b)	4.9%	4.9%	4.4%

(a)Represents year-over-year growth (loss) rates.

(b)Represents quarterly average rate at December 31, ~~2022,~~ 2023, 2024 and ~~2024,~~2025, respectively.

Real GDP growth is expected to end ~~2022~~2023 at ~~1.6%~~0.9% on a weighted average basis, ~~down~~up from the ~~2.8%~~(0.4%) assumed at December 31, ~~2021~~2022 primarily due ~~primarily~~ to ~~weaker~~stronger economic activity at the start of 2023. Growth then drops to (0.1)% in 2024, before jumping to 1.9% in 2025. In line with stronger-than-anticipated job growth at the start of 2023, the weighted-average projection of the unemployment rate is expected ~~growth in~~to end 2023 at 4.0%, down from the ~~second half of 2022, along with the unexpected contraction of GDP in the first quarter of~~4.9% assumed at December 31, 2022. ~~Growth continues to slow to 0.5% and 1.2% in 2023 and 2024.~~ In line with the slowing in overall economic activity, the ~~weighted average~~weighted-average unemployment rate is expected to increase ~~modestly~~through the end of 2023 and 2024, reaching 4.9% by year-end 2024, and gradually improving to 4.5% ~~in 2023, remaining at that level through 2024.~~by the fourth quarter of 2025.

~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~ 39

The economy has seen significant improvement from the onset of the pandemic, as containment of the virus has permitted recovery in many industries. However, the pandemic fostered structural/secular changes that persist in certain subsegments of the economy. Additionally, recent challenges related to inflation, increased pressure on supply chain and rising interest rates have emerged. The current state of the economy ~~has created considerable~~reflects an environment with receding pandemic-related risks and labor-related supply chain pressures. However, heightened uncertainty ~~around losses~~remains due to structural and secular changes fostered by the pandemic for certain ~~portions~~sectors of ~~our commercial~~the economy combined with inflation and consumer portfolios. For commercial borrowers, supply chain, inflation, rising rates and advancing secular changes are the primary drivers of uncertainty. For consumer borrowers, higher inflation risk, rising interest ~~rates and the fading effects of government stimulus could reduce consumer liquidity and change payment hierarchy.~~rates. As such, for both our commercial and consumer loan portfolios, PNC identified and performed significant analysis around ~~these~~ segments impacted by such uncertainties to ensure our reserves are adequate, ~~in the~~given our current ~~economic environment.~~ macroeconomic expectations.

We believe the economic scenarios effectively reflect the distribution of potential economic outcomes. Additionally, through in-depth and granular analysis, we have addressed reserve requirements for the specific populations most affected in the current environment. Through this approach, we believe the reserve levels appropriately reflect the expected credit losses in the portfolio as of the balance sheet date.

See the following for additional details on the components of our ACL:

•Allowance For Credit Losses in the Credit Risk Management section of this Financial Review, and

•Note 32 Investment Securities and Note 43 Loans and Related Allowance for Credit Losses in ~~the Notes To Consolidated Financial Statements included in~~ this Report.

The PNC Financial Services Group, Inc. – Form 10-Q 39

Recently Issued Accounting Standards


Accounting Standards Update	Description	Financial Statement Impact
~~Troubled Debt Restructurings and Vintage Disclosures -~~Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method– ASU ~~2022-02~~2023-02 Issued March ~~2022~~2023	• Required effective date of January 1, ~~2023;~~2024; early adoption is permitted. • ~~Eliminates~~The amendments in this Update must be applied on either a modified retrospective or a retrospective basis. • The amendments in this Update permit reporting entities to elect to account for their tax equity investments, regardless of the tax credit program from which the income tax credits are received, using the proportional amortization method if certain conditions are met. • A reporting entity makes an accounting ~~guidance for TDRs and requires an entity~~policy election to apply the ~~loan refinancing and restructuring guidance~~proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to ~~determine whether a modification results in a new loan~~apply the proportional amortization method at the reporting entity level or ~~a continuation of an existing loan.~~ • ~~Enhances disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.~~ • ~~Requires disclosure of current-period gross writeoffs by year of origination for financing receivables and net investments in leases within the scope of CECL.~~ • ~~Requires a prospective transition approach~~ to all amendments except those related to the recognition and measurement of TDRs (which allow a modified retrospective transition approach through a cumulative-effect adjustment to retained earnings in the period of adoption).individual investments.	• We ~~do not expect~~are currently evaluating when to adopt the ~~adoption~~amendments in ASU 2023-02 and the impact of ~~this standard to materially impact~~the ASU on our consolidated results of operations orand our consolidated financial position. ~~The amendments will require changes to disclosures on information related to loan modifications and current-period gross write-offs.~~

Recently Adopted Accounting Pronouncements

See Note 1 Accounting Policies ~~in the Notes To Consolidated Financial Statements included in this Report~~ regarding the impact of new accounting pronouncements ~~which~~that we have adopted.

INTERNAL CONTROLS AND DISCLOSURE CONTROLS AND PROCEDURES

As of June 30, ~~2022,~~2023, we performed an evaluation under the supervision of and with the participation of our management, including the Chairman, President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures and of changes in our internal control over financial reporting.

Based on that evaluation, our Chairman, President and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) were effective as of June 30, ~~2022,~~2023, and that there has been no change in PNC’s internal control over financial reporting that occurred during the second quarter of ~~2022~~2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

40 ~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

We make statements in this Report, and we may from time to time make other statements, regarding our outlook for financial performance, such as earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting us and our future business and operations, including our sustainability strategy, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are typically identified by words such as “believe,” “plan,” “expect,” “anticipate,” “see,” “look,” “intend,” “outlook,” “project,” “forecast,” “estimate,” “goal,” “will,” “should” and other similar words and expressions.

Forward-looking statements are necessarily subject to numerous assumptions, risks and uncertainties, which change over time. Future events or circumstances may change our outlook and may also affect the nature of the assumptions, risks and uncertainties to which our forward-looking statements are subject. Forward-looking statements speak only as of the date made. We do not assume any duty and do not undertake any obligation to update forward-looking statements. Actual results or future events could differ, possibly materially, from those anticipated in forward-looking statements, as well as from historical performance. As a result, we caution against placing undue reliance on any forward-looking statements.

Our forward-looking statements are subject to the following principal risks and uncertainties.

•Our businesses, financial results and balance sheet values are affected by business and economic conditions, including:

–Changes in interest rates and valuations in debt, equity and other financial markets,

40 The PNC Financial Services Group, Inc. – Form 10-Q

–Disruptions in the U.S. and global financial markets,

–Actions by the Federal Reserve Board, U.S. Treasury and other government agencies, including those that impact money supply, market interest rates and inflation,

–Changes in customer behavior due to changing business and economic conditions or legislative or regulatory initiatives,

–Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness,

–Impacts of sanctions, tariffs and other trade policies of the U.S. and its global trading partners,

–~~The impact~~A continuation of turmoil in the ~~Russia-Ukraine conflict,~~banking industry, responsive measures to mitigate and ~~associated sanctions, on the global~~manage it and ~~U.S. economy,~~

–~~The length~~related supervisory and ~~extent of the economic impacts of the COVID-19 pandemic,~~regulatory actions and costs,

–Impacts of changes in federal, state and local governmental policy, including on the regulatory landscape, capital markets, taxes, infrastructure spending and social programs,

–PNC’s ability to attract, recruit and retain skilled employees, and

–Commodity price volatility.

•Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account the potential impact of legal and regulatory contingencies. These statements are based on our views that:

–The ~~U.S.~~ economy ~~continues~~continued to ~~recover from the pandemic-caused recession~~expand in the first half of ~~2020. Growth~~2023, but economic growth is ~~likely~~slowing in response to ~~be lower than~~ the ~~economy’s long-run average throughout this year. Consumer spending growth will remain solid~~ongoing Federal Reserve monetary policy tightening to slow inflation. This has led to large increases in ~~2022 due~~both short- and long-term interest rates. The housing market stabilized in the first half of 2023 as the Federal Reserve signaled a potential end to ~~good underlying fundamentals.~~

–~~Supply-chain difficulties will gradually ease over~~its federal funds rate hiking cycle. However, given the ~~course of 2022. Labor shortages will remain a constraint this year, although strong wage growth will support consumer spending.~~

–~~Inflation accelerated~~upward trajectory in mortgage rates and declining affordability, PNC continues to expect slower activity in the housing market in the second half of ~~2021 to its fastest pace~~2023 with a recovery in ~~decades. Inflation~~early 2024 as the Federal Reserve starts cutting the federal funds rate.

–PNC’s baseline outlook is for a mild recession starting in late 2023 or early 2024, with a smaller contraction in real GDP of less than 1%, lasting into mid-2024. The unemployment rate will ~~slow~~increase in the second half of ~~2022 as pandemic-related supply~~this year, ending 2023 at above 4%, and then peak slightly above 5% in early 2025. Inflation will slow with weaker demand, ~~imbalances recede and energy prices stabilize. However, inflation will also broaden throughout the economy due~~moving back to ~~wage growth. The annual inflation rate will end 2022 above~~ the Federal ~~Reserve's long-run~~Reserve’s 2% objective ~~of 2%.~~by this time next year.

–~~The FOMC raised~~PNC expects the federal funds rate ~~by 0.75% in July,~~ to ~~a range of 2.25% to 2.50%. PNC expects further increases in the federal funds rate~~remain between 5.25% and 5.50% through ~~the rest of this year, to a range of 3.25% to 3.50% at the end of 2022. The federal funds rate~~March 2024, when it is expected that the Federal Reserve will cut rates in response to ~~peak between 3.50% and 3.75% in mid-early 2023, before falling in~~ the ~~second half of next year as inflation ebbs and economic growth slows.~~

–Uncertainty about the outlook has increased with the Russian invasion of Ukraine. It has created additional risk to higher inflation this year, which could lead the FOMC to tighten more aggressively than currently anticipated. In addition, risks to growth and the likelihood of a recession in late 2022 or 2023 have increased.recession.

•PNC’s ability to take certain capital actions, including returning capital to shareholders, is subject to PNC meeting or exceeding minimum capital levels, including an SCB established by the Federal Reserve Board in connection with the Federal Reserve ~~Board's~~Board’s CCAR process.

•PNC’s regulatory capital ratios in the future will depend on, among other things, the company’s financial performance, the scope and terms of final capital regulations then in effect and management actions affecting the composition of PNC’s balance sheet. In addition, PNC’s ability to determine, evaluate and forecast regulatory capital ratios, and to take actions (such as capital distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development, validation and regulatory review of related models and the reliability of and risks resulting from extensive use of such models.

•Legal and regulatory developments could have an impact on our ability to operate our businesses, financial condition, results of operations, competitive position, reputation, or pursuit of attractive acquisition opportunities. Reputational impacts could

~~The PNC Financial Services Group, Inc. –~~ ~~Form 10-Q~~ 41

affect matters such as business generation and retention, liquidity, funding, and ability to attract and retain ~~management.~~employees. These developments could include:

–Changes to laws and regulations, including changes affecting oversight of the financial services industry, ~~consumer protection, bank capital~~changes in the enforcement and ~~liquidity standards, pension, bankruptcy~~interpretation of such laws and ~~other industry aspects,~~regulations, and changes in accounting ~~policies~~ and ~~principles.~~reporting standards.

–Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other ~~inquiries. These matters may result~~inquiries resulting in monetary ~~judgments or settlements or other remedies, including fines, penalties, restitution~~losses, costs, or alterations in our business practices, and ~~in additional expenses and collateral costs, and may cause~~potentially causing reputational harm to PNC.

–Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with governmental agencies.

–~~Impact on business and operating results of any costs~~Costs associated with obtaining rights in intellectual property claimed by others and of adequacy of our intellectual property protection in general.

•Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of systems and controls, third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital and liquidity standards.

•Our reputation and business and operating results may be affected by our ability to appropriately meet or address environmental, social or governance targets, goals, commitments or concerns that may arise.

•We grow our business in part through acquisitions and new strategic initiatives. Risks and uncertainties include those presented by the nature of the business acquired and strategic initiative, including in some cases those associated with our entry into new businesses or new geographic or other markets and risks resulting from our inexperience in those new areas, as well as risks and uncertainties related to the acquisition transactions themselves, regulatory issues, ~~and~~ the integration of the acquired businesses into PNC after ~~closing. Many of these risks and uncertainties are present in our acquisition and integration of BBVA, including its U.S. banking subsidiary, BBVA USA.~~closing or any failure to execute strategic or operational plans.

The PNC Financial Services Group, Inc. – Form 10-Q 41

•Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues. Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet competitive demands.

•Business and operating results can also be affected by widespread manmade, natural and other disasters ~~pandemics,~~(including severe weather events), health emergencies, dislocations, geopolitical instabilities or events, terrorist activities, system failures or disruptions, security breaches, cyberattacks, or international hostilities, or other extraordinary events beyond PNC’s control through impacts on the economy and financial markets generally or on us or our counterparties, customers or third-party vendors and service providers specifically.

We provide greater detail regarding these as well as other factors in our ~~2021~~2022 Form 10-K ~~first quarter 2022~~and subsequent Form ~~10-Q~~10-Qs and elsewhere in this Report, including in the Risk Factors and Risk Management sections and the Legal Proceedings and Commitments Notes of the Notes To Consolidated Financial Statements in these reports. Our forward-looking statements may also be subject to other risks and uncertainties, including those discussed elsewhere in this Report or in our other filings with the SEC.

42 The PNC Financial Services Group, Inc. – Form 10-Q

CONSOLIDATED INCOME STATEMENT

THE PNC FINANCIAL SERVICES GROUP, INC.


Unaudited	Unaudited	Three months ended June 30				Six months ended June 30				Unaudited	Three months ended June 30				Six months ended June 30
In millions, except per share data	In millions, except per share data	2022		2021		2022		2021		In millions, except per share data	2023		2022		2023		2022
Interest Income	Interest Income									Interest Income
Loans	Loans	$	2,504	$	2,160	$	4,797	$	4,156	Loans	$	4,523	$	2,504	$	8,781	$	4,797
Investment securities	Investment securities	631		469		1,175		890		Investment securities	883		631		1,768		1,175
Other	Other	146		72		223		138		Other	538		146		1,054		223
Total interest income	Total interest income	3,281		2,701		6,195		5,184		Total interest income	5,944		3,281		11,603		6,195
Interest Expense	Interest Expense									Interest Expense
Deposits	Deposits	88		30		115		70		Deposits	1,531		88		2,822		115
Borrowed funds	Borrowed funds	142		90		225		185		Borrowed funds	903		142		1,686		225
Total interest expense	Total interest expense	230		120		340		255		Total interest expense	2,434		230		4,508		340
Net interest income	Net interest income	3,051		2,581		5,855		4,929		Net interest income	3,510		3,051		7,095		5,855
Noninterest Income	Noninterest Income									Noninterest Income
Asset management and brokerage	Asset management and brokerage	365		350		742		678		Asset management and brokerage	348		365		704		742
Capital markets related		409		324		661		635
Capital markets and advisory										Capital markets and advisory	213		409		475		661
Card and cash management	Card and cash management	671		597		1,291		1,089		Card and cash management	697		671		1,356		1,291
Lending and deposit services	Lending and deposit services	282		270		551		524		Lending and deposit services	298		282		604		551
Residential and commercial mortgage	Residential and commercial mortgage	161		206		320		393		Residential and commercial mortgage	98		161		275		320
Other	Other	177		339		388		639		Other	129		177		387		388
Total noninterest income	Total noninterest income	2,065		2,086		3,953		3,958		Total noninterest income	1,783		2,065		3,801		3,953
Total revenue	Total revenue	5,116		4,667		9,808		8,887		Total revenue	5,293		5,116		10,896		9,808
Provision For (Recapture of) Credit Losses	Provision For (Recapture of) Credit Losses	36		302		(172)		(249)		Provision For (Recapture of) Credit Losses	146		36		381		(172)
Noninterest Expense	Noninterest Expense									Noninterest Expense
Personnel	Personnel	1,779		1,640		3,496		3,117		Personnel	1,846		1,779		3,672		3,496
Occupancy	Occupancy	246		217		504		432		Occupancy	244		246		495		504
Equipment	Equipment	351		326		682		619		Equipment	349		351		699		682
Marketing	Marketing	95		74		156		119		Marketing	109		95		183		156
Other	Other	773		793		1,578		1,337		Other	824		773		1,644		1,578
Total noninterest expense	Total noninterest expense	3,244		3,050		6,416		5,624		Total noninterest expense	3,372		3,244		6,693		6,416
Income before income taxes and noncontrolling interests	Income before income taxes and noncontrolling interests	1,836		1,315		3,564		3,512		Income before income taxes and noncontrolling interests	1,775		1,836		3,822		3,564
Income taxes	Income taxes	340		212		639		583		Income taxes	275		340		628		639

Net income	Net income	1,496		1,103		2,925		2,929		Net income	1,500		1,496		3,194		2,925
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	15		12		36		22		Less: Net income attributable to noncontrolling interests	17		15		34		36
Preferred stock dividends	Preferred stock dividends	71		48		116		105		Preferred stock dividends	127		71		195		116
Preferred stock discount accretion and redemptions	Preferred stock discount accretion and redemptions	1		1		3		2		Preferred stock discount accretion and redemptions	2		1		4		3
Net income attributable to common shareholders	Net income attributable to common shareholders	$	1,409	$	1,042	$	2,770	$	2,800	Net income attributable to common shareholders	$	1,354	$	1,409	$	2,961	$	2,770
Earnings Per Common Share	Earnings Per Common Share									Earnings Per Common Share
Basic	Basic	$	3.39	$	2.43	$	6.62	$	6.54	Basic	$	3.36	$	3.39	$	7.35	$	6.62

Diluted	Diluted	$	3.39	$	2.43	$	6.61	$	6.53	Diluted	$	3.36	$	3.39	$	7.34	$	6.61

Average Common Shares Outstanding	Average Common Shares Outstanding									Average Common Shares Outstanding
Basic	Basic	414		427		417		426		Basic	401		414		401		417
Diluted	Diluted	414		427		417		427		Diluted	401		414		401		417

See accompanying Notes To Consolidated Financial Statements.

The PNC Financial Services Group, Inc. – Form 10-Q 43

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

THE PNC FINANCIAL SERVICES GROUP, INC.


Unaudited In millions	Unaudited In millions	Three months ended June 30				Six months ended June 30				Unaudited In millions	Three months ended June 30				Six Months Ended June 30
		2022		2021		2022		2021			2023		2022		2023		2022
Net income	Net income	$	1,496	$	1,103	$	2,925	$	2,929	Net income	$	1,500	$	1,496	$	3,194	$	2,925
Other comprehensive income (loss), before tax and net of reclassifications into Net income	Other comprehensive income (loss), before tax and net of reclassifications into Net income									Other comprehensive income (loss), before tax and net of reclassifications into Net income
Net change in debt securities	Net change in debt securities	(2,715)		46		(9,030)		(1,148)		Net change in debt securities	(241)		(2,715)		628		(9,030)
Net change in cash flow hedge derivatives	Net change in cash flow hedge derivatives	(701)		222		(2,459)		(553)		Net change in cash flow hedge derivatives	(316)		(701)		211		(2,459)
Pension and other postretirement benefit plan adjustments	Pension and other postretirement benefit plan adjustments	8		(43)		62		(13)		Pension and other postretirement benefit plan adjustments	6		8		(4)		62
Net change in Other	Net change in Other	(4)				(7)		1		Net change in Other	3		(4)		7		(7)
Other comprehensive income (loss), before tax and net of reclassifications into Net income	Other comprehensive income (loss), before tax and net of reclassifications into Net income	(3,412)		225		(11,434)		(1,713)		Other comprehensive income (loss), before tax and net of reclassifications into Net income	(548)		(3,412)		842		(11,434)
Income tax benefit (expense) related to items of other comprehensive income	Income tax benefit (expense) related to items of other comprehensive income	785		(52)		2,667		406		Income tax benefit (expense) related to items of other comprehensive income	131		785		(195)		2,667
Other comprehensive income (loss), after tax and net of reclassifications into Net income	Other comprehensive income (loss), after tax and net of reclassifications into Net income	(2,627)		173		(8,767)		(1,307)		Other comprehensive income (loss), after tax and net of reclassifications into Net income	(417)		(2,627)		647		(8,767)

Comprehensive income (loss)	Comprehensive income (loss)	(1,131)		1,276		(5,842)		1,622		Comprehensive income (loss)	1,083		(1,131)		3,841		(5,842)
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests	15		12		36		22		Less: Comprehensive income attributable to noncontrolling interests	17		15		34		36
Comprehensive income (loss) attributable to PNC	Comprehensive income (loss) attributable to PNC	$	(1,146)	$	1,264	$	(5,878)	$	1,600	Comprehensive income (loss) attributable to PNC	$	1,066	$	(1,146)	$	3,807	$	(5,878)


Pennsylvania						25-1435979
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $5.00	PNC	New York Stock Exchange
Depositary Shares Each Representing a 1/4,000 Interest in a Share of Fixed-to- Floating Rate Non-Cumulative Perpetual Preferred Stock, Series P	~~PNC P~~	~~New York Stock Exchange~~


			Pages
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited).
Consolidated Income Statement			43
Consolidated Statement of Comprehensive Income			44
Consolidated Balance Sheet			45
Consolidated Statement of Cash Flows			46
Notes To Consolidated Financial Statements (Unaudited)
Note 1 Accounting Policies			48
Note 2 ~~Acquisition Activity~~Investment Securities			5056
Note 3 ~~Investment Securities~~			51
~~Note 4~~ Loans and Related Allowance for Credit Losses			5459
Note 54 Loan Sale and Servicing Activities and Variable Interest Entities			6371
Note 65 Goodwill and Mortgage Servicing Rights			66
~~Note 7 Leases~~			67
~~Note 8 Borrowed Funds~~			68
~~Note 9 Commitments~~			69
~~Note 10 Total Equity and Other Comprehensive Income~~			70
~~Note 11 Earnings Per Share~~			72
~~Note 12 Fair Value~~			73
Note 136 Leases			74
Note 7 Borrowed Funds			75
Note 8 Commitments			76
Note 9 Total Equity and Other Comprehensive Income			77
Note 10 Earnings Per Share			80
Note 11 Fair Value			81
Note 12 Financial Derivatives			8290
Note 13 Legal Proceedings			96
Note 14 ~~Legal Proceedings~~Segment Reporting			8898
Note 15 ~~Segment Reporting~~			89
~~Note 16~~ Fee-based Revenue from Contracts with Customers			93101
Note ~~17 Subsequent Events~~16 Regulatory Matters			95103

Statistical Information (Unaudited)
Average Consolidated Balance Sheet And Net Interest Analysis			96105
Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP)			98107
Glossary			98107
Defined Terms			98107
Acronyms			98107
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).
Financial Review			1
~~Consolidated Financial Highlights~~			1
Executive Summary			21
Consolidated Income Statement Review			5
Consolidated Balance Sheet Review			9
Business Segments Review			13
Risk Management			21
Recent Regulatory Developments			3837
Critical Accounting Estimates and Judgments			38
Internal Controls and Disclosure Controls and Procedures			40
Cautionary Statement Regarding Forward-Looking Information			4140
Item 3. Quantitative and Qualitative Disclosures about Market Risk.			21-38, ~~48-49 and 82-88~~49-50, 83-89
Item 4. Controls and Procedures.			40
PART II – OTHER INFORMATION
Item 1. Legal Proceedings.			98107
Item 1A. Risk Factors.			98108
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.			99108
Item 5. Other Information			108
Item 6. Exhibits.			~~100~~109
Exhibit Index			~~100~~109
Corporate Information			~~100~~109
Signature			~~102~~111


Dollars in millions, except as noted Unaudited	June 30 2022			December 31 2021			June 30 2021
Balance Sheet Data
Assets	$	540,786		$	557,191		$	554,212
Loans	$	310,800		$	288,372		$	294,704
Allowance for loan and lease losses	$	4,462		$	4,868		$	5,730
Interest-earning deposits with banks	$	28,404		$	74,250		$	72,447
Investment securities	$	132,732		$	132,962		$	126,543








Total deposits	$	440,811		$	457,278		$	452,883
Borrowed funds	$	35,984		$	30,784		$	34,813

Total shareholders’ equity	$	47,652		$	55,695		$	54,627
Common shareholders’ equity	$	41,648		$	50,685		$	51,107











Other Selected Ratios
Common equity Tier 1	9.6		%	10.3		%	10.1		%






Loans to deposits	71		%	63		%	65		%
Common shareholders’ equity to total assets	7.7		%	9.1		%	9.2		%


Dollars in millions, except as noted Unaudited	June 30 2023			December 31 2022			June 30 2022
Balance Sheet Highlights (a)
Assets	$	558,207		$	557,263		$	540,786
Loans	$	321,761		$	326,025		$	310,800
Allowance for loan and lease losses	$	4,737		$	4,741		$	4,462
Interest-earning deposits with banks	$	38,259		$	27,320		$	28,404
Investment securities	$	135,661		$	139,334		$	132,732








Total deposits	$	427,489		$	436,282		$	440,811
Borrowed funds	$	65,384		$	58,713		$	35,984

Total shareholders’ equity	$	49,320		$	45,774		$	47,652
Common shareholders’ equity	$	42,083		$	40,028		$	41,648











Other Selected Ratios
Common equity Tier 1	9.5		%	9.1		%	9.6		%






Loans to deposits	75		%	75		%	71		%
Common shareholders’ equity to total assets	7.5		%	7.2		%	7.7		%


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


MD&A TABLE REFERENCE	MD&A TABLE REFERENCE			MD&A TABLE REFERENCE
Table	Table	Description	Page	Table	Description	Page
1	1	Consolidated Financial Highlights	1	1	Summary of Operations, Per Common Share Data and Performance Ratios	2
2	2	Summarized Average Balances and Net Interest Income	6	2	Balance Sheet Highlights and Other Selected Ratios	2
3	3	Noninterest Income	7	3	Summarized Average Balances and Net Interest Income	6
4	4	Noninterest Expense	8	4	Noninterest Income	7
5	5	Provision for (Recapture of) Credit Losses	8	5	Noninterest Expense	8
6	6	Summarized Balance Sheet Data	9	6	Provision for (Recapture of) Credit Losses	8
7	7	Loans	10	7	Summarized Balance Sheet Data	9
8	8	Investment Securities	11	8	Loans	10
9	9	Weighted-Average Expected Maturities of Mortgage and Asset-Backed Debt Securities	11	9	Investment Securities	11
10	10	Details of Funding Sources	12	10	Weighted-Average Expected Maturities of Mortgage and Asset-Backed Debt Securities	11
11	11	Retail Banking Table	14	11	Details of Funding Sources	12
12	12	Corporate & Institutional Banking Table	17	12	Retail Banking Table	14
13	13	Asset Management Group Table	20	13	Corporate & Institutional Banking Table	17
14	14	Details of Loans	21	14	Asset Management Group Table	20
15	15	Commercial and Industrial Loans by Industry	22	15	Details of Loans	21
16	16	Commercial Real Estate Loans by Geography and Property Type	23	16	Commercial and Industrial Loans by Industry	22
17	17	Residential Real Estate Loan Statistics	24	17	Commercial Real Estate Loans by Geography and Property Type	23
18	18	Home Equity Loan Statistics	25	18	Residential Real Estate Loan Statistics	24
19	19	Auto Loan Statistics	25	19	Home Equity Loan Statistics	25
20	20	Nonperforming Assets by Type	26	20	Auto Loan Statistics	25
21	21	Change in Nonperforming Assets	26	21	Nonperforming Assets by Type	26
22	22	Accruing Loans Past Due	27	22	Change in Nonperforming Assets	26
23	23	Summary of Troubled Debt Restructurings	28	23	Accruing Loans Past Due	27
24	24	Allowance for Credit Losses by Loan Class	29	24	Allowance for Credit Losses by Loan Class	28
25	25	Loan Charge-Offs and Recoveries	30	25	Loan Charge-Offs and Recoveries	29
26	26	Senior and Subordinated Debt	31	26	Senior and Subordinated Debt	30
27	27	PNC Bank Notes Redeemed	31	27	Contingent Liquidity Sources	30
28	28	Parent Company Notes Redeemed	32	28	Parent Company Notes Issued	31
29	29	Credit Ratings for PNC and PNC Bank	33	29	Credit Ratings for PNC and PNC Bank	32
30	30	Basel III Capital	34	30	Basel III Capital	33
31	31	Interest Sensitivity Analysis	35	31	Interest Sensitivity Analysis	34
32	32	Net Interest Income Sensitivity to Alternative Rate Scenarios	35	32	Net Interest Income Sensitivity to Alternative Rate Scenarios	34
33	33	Alternate Interest Rate Scenarios: One Year Forward	36	33	Alternate Interest Rate Scenarios: One Year Forward	35
34	34	Equity Investments Summary	37	34	Equity Investments Summary	36
35	35	Key Macroeconomic Variables in CECL Weighted-Average Scenarios	39	35	Key Macroeconomic Variables in CECL Weighted-Average Scenarios	39


Dollars in millions, except per share data Unaudited	Three months ended									Six months ended
	June 30			March 31			June 30			June 30			June 30
	2022			2022			2021			2022			2021
Financial Results (a)

Net interest income	$	3,051		$	2,804		$	2,581		$	5,855		$	4,929
Noninterest income	2,065			1,888			2,086			3,953			3,958
Total revenue	5,116			4,692			4,667			9,808			8,887
Provision for (recapture of) credit losses	36			(208)			302			(172)			(249)
Noninterest expense	3,244			3,172			3,050			6,416			5,624
Income before income taxes and noncontrolling interests	$	1,836		$	1,728		$	1,315		$	3,564		$	3,512
Income taxes	340			299			212			639			583




Net income	$	1,496		$	1,429		$	1,103		$	2,925		$	2,929




Net income attributable to common shareholders	$	1,409		$	1,361		$	1,042		$	2,770		$	2,800
Per Common Share
Basic	$	3.39		$	3.23		$	2.43		$	6.62		$	6.54


Diluted	$	3.39		$	3.23		$	2.43		$	6.61		$	6.53




Book value per common share	$	101.39		$	106.47		$	120.25
Performance Ratios
Net interest margin (b)	2.50		%	2.28		%	2.29		%	2.39		%	2.28		%
Noninterest income to total revenue	40		%	40		%	45		%	40		%	45		%
Efficiency	63		%	68		%	65		%	65		%	63		%
Return on:
Average common shareholders’ equity	13.52		%	11.64		%	8.32		%	12.53		%	11.29		%
Average assets	1.10		%	1.05		%	0.88		%	1.07		%	1.21		%


		June 30, 2022						June 30, 2021							June 30, 2023						June 30, 2022
Six months ended Dollars in millions	Six months ended Dollars in millions	Average Balances		Average Yields/ Rates		Interest Income/ Expense		Average Balances		Average Yields/ Rates		Interest Income/ Expense		Six months ended Dollars in millions	Average Balances		Average Yields/ Rates		Interest Income/ Expense		Average Balances		Average Yields/ Rates		Interest Income/ Expense
Assets	Assets													Assets
Interest-earning assets	Interest-earning assets													Interest-earning assets
Investment securities	Investment securities	$	134,313	1.76	%	$	1,184	$	97,511	1.85	%	$	901	Investment securities	$	142,208	2.50	%	$	1,780	$	134,313	1.76	%	$	1,184
Loans	Loans	297,785		3.24	%	4,835		246,919		3.38	%	4,175		Loans	325,027		5.43	%	8,844		297,785		3.24	%	4,835
Interest-earning deposits with banks	Interest-earning deposits with banks	51,120		0.42	%	107		81,947		0.10	%	43		Interest-earning deposits with banks	32,736		4.83	%	790		51,120		0.42	%	107
Other	Other	9,677		2.42	%	116		7,955		2.40	%	95		Other	9,012		5.86	%	264		9,677		2.42	%	116
Total interest-earning assets/interest income	Total interest-earning assets/interest income	$	492,895	2.53	%	6,242		$	434,332	2.40	%	5,214		Total interest-earning assets/interest income	$	508,983	4.58	%	11,678		$	492,895	2.53	%	6,242
Liabilities	Liabilities													Liabilities
Interest-bearing liabilities	Interest-bearing liabilities													Interest-bearing liabilities
Interest-bearing deposits	Interest-bearing deposits	$	298,313	0.08	%	115		$	260,804	0.05	%	70		Interest-bearing deposits	$	313,801	1.81	%	2,822		$	298,313	0.08	%	115
Borrowed funds	Borrowed funds	32,998		1.36	%	225		34,670		1.06	%	185		Borrowed funds	64,337		5.22	%	1,686		32,998		1.36	%	225
Total interest-bearing liabilities/interest expense	Total interest-bearing liabilities/interest expense	$	331,311	0.20	%	340		$	295,474	0.17	%	255		Total interest-bearing liabilities/interest expense	$	378,138	2.38	%	4,508		$	331,311	0.20	%	340
Net interest margin/income (non-GAAP)	Net interest margin/income (non-GAAP)			2.39	%	5,902				2.28	%	4,959		Net interest margin/income (non-GAAP)			2.81	%	7,170				2.39	%	5,902
Taxable-equivalent adjustments	Taxable-equivalent adjustments					(47)						(30)		Taxable-equivalent adjustments					(75)						(47)
Net interest income (GAAP)	Net interest income (GAAP)					$	5,855					$	4,929	Net interest income (GAAP)					$	7,095					$	5,855


		June 30		December 31		Change					June 30		December 31		Change
Dollars in millions	Dollars in millions	2022		2021		$		%		Dollars in millions	2023		2022		$		%
Assets	Assets									Assets
Interest-earning deposits with banks	Interest-earning deposits with banks	$	28,404	$	74,250	$	(45,846)	(62)	%	Interest-earning deposits with banks	$	38,259	$	27,320	$	10,939	40	%
Loans held for sale	Loans held for sale	1,191		2,231		(1,040)		(47)	%	Loans held for sale	835		1,010		(175)		(17)	%
Investment securities	Investment securities	132,732		132,962		(230)		—		Investment securities	135,661		139,334		(3,673)		(3)	%
Loans	Loans	310,800		288,372		22,428		8	%	Loans	321,761		326,025		(4,264)		(1)	%
Allowance for loan and lease losses	Allowance for loan and lease losses	(4,462)		(4,868)		406		8	%	Allowance for loan and lease losses	(4,737)		(4,741)		4		—
Mortgage servicing rights	Mortgage servicing rights	2,608		1,818		790		43	%	Mortgage servicing rights	3,455		3,423		32		1	%
Goodwill	Goodwill	10,916		10,916				—		Goodwill	10,987		10,987				—
Other	Other	58,597		51,510		7,087		14	%	Other	51,986		53,905		(1,919)		(4)	%
Total assets	Total assets	$	540,786	$	557,191	$	(16,405)	(3)	%	Total assets	$	558,207	$	557,263	$	944	—
Liabilities	Liabilities									Liabilities
Deposits	Deposits	$	440,811	$	457,278	$	(16,467)	(4)	%	Deposits	$	427,489	$	436,282	$	(8,793)	(2)	%
Borrowed funds	Borrowed funds	35,984		30,784		5,200		17	%	Borrowed funds	65,384		58,713		6,671		11	%
Allowance for unfunded lending related commitments	Allowance for unfunded lending related commitments	681		662		19		3	%	Allowance for unfunded lending related commitments	663		694		(31)		(4)	%
Other	Other	15,622		12,741		2,881		23	%	Other	15,325		15,762		(437)		(3)	%
Total liabilities	Total liabilities	493,098		501,465		(8,367)		(2)	%	Total liabilities	508,861		511,451		(2,590)		(1)	%
Equity	Equity									Equity
Total shareholders’ equity	Total shareholders’ equity	47,652		55,695		(8,043)		(14)	%	Total shareholders’ equity	49,320		45,774		3,546		8	%
Noncontrolling interests	Noncontrolling interests	36		31		5		16	%	Noncontrolling interests	26		38		(12)		(32)	%
Total equity	Total equity	47,688		55,726		(8,038)		(14)	%	Total equity	49,346		45,812		3,534		8	%
Total liabilities and equity	Total liabilities and equity	$	540,786	$	557,191	$	(16,405)	(3)	%	Total liabilities and equity	$	558,207	$	557,263	$	944	—


		June 30, 2022				December 31, 2021				Ratings as of June 30, 2022 (a)											June 30, 2023				December 31, 2022
Dollars in millions	Dollars in millions	Amortized Cost (b)		Fair Value		Amortized Cost (b)		Fair Value		AAA/ AA		A		BBB		BB and Lower		No Rating		Dollars in millions	Amortized Cost (b)		Fair Value		Amortized Cost (b)		Fair Value
U.S. Treasury and government agencies	U.S. Treasury and government agencies	$	45,459	$	44,231	$	47,024	$	47,054	100	%									U.S. Treasury and government agencies	$	44,848	$	42,403	$	45,767	$	43,330
Agency residential mortgage-backed	Agency residential mortgage-backed	71,120		68,227		67,326		67,632		100	%									Agency residential mortgage-backed	75,145		68,874		77,385		71,073
Non-agency residential mortgage-backed	Non-agency residential mortgage-backed	1,050		1,207		927		1,158		8	%			1	%	38	%	53	%	Non-agency residential mortgage-backed	911		1,015		973		1,074
Agency commercial mortgage-backed	Agency commercial mortgage-backed	2,126		2,032		1,740		1,773		100	%									Agency commercial mortgage-backed	2,598		2,405		2,693		2,501
Non-agency commercial mortgage-backed (c)	Non-agency commercial mortgage-backed (c)	3,238		3,175		3,423		3,436		85	%	1	%	2	%			12	%	Non-agency commercial mortgage-backed (c)	2,563		2,458		2,992		2,883
Asset-backed (d)	Asset-backed (d)	6,802		6,764		6,380		6,409		95	%	1	%			3	%	1	%	Asset-backed (d)	7,555		7,472		7,291		7,183
Other (e)	Other (e)	5,928		5,762		5,404		5,596		49	%	31	%	17	%			3	%	Other (e)	6,271		6,056		6,642		6,394
Total investment securities (f)	Total investment securities (f)	$	135,723	$	131,398	$	132,224	$	133,058	97	%	1	%	1	%			1	%	Total investment securities (f)	$	139,891	$	130,683	$	143,743	$	134,438


June 30, ~~2022~~2023			Years
Agency residential mortgage-backed			~~6.6~~7.7
Non-agency residential mortgage-backed			~~9.1~~9.9
Agency commercial mortgage-backed			~~4.9~~5.2
Non-agency commercial mortgage-backed			~~1.7~~1.3
Asset-backed			~~2.7~~2.3


(Unaudited)	(Unaudited)											(Unaudited)
Six months ended June 30	Six months ended June 30							Change				Six months ended June 30							Change
Dollars in millions, except as noted	Dollars in millions, except as noted	2022			2021			$		%		Dollars in millions, except as noted	2023			2022			$		%
Income Statement	Income Statement											Income Statement
Net interest income	Net interest income	$	3,193		$	2,859		$	334	12	%	Net interest income	$	4,729		$	3,193		$	1,536	48	%
Noninterest income	Noninterest income	1,493			1,360			133		10	%	Noninterest income	1,445			1,493			(48)		(3)	%
Total revenue	Total revenue	4,686			4,219			467		11	%	Total revenue	6,174			4,686			1,488		32	%
Provision for (recapture of) credit losses	Provision for (recapture of) credit losses	(26)			(43)			17		40	%	Provision for (recapture of) credit losses	224			(26)			250		*
Noninterest expense	Noninterest expense	3,805			3,153			652		21	%	Noninterest expense	3,831			3,805			26		1	%
Pretax earnings	Pretax earnings	907			1,109			(202)		(18)	%	Pretax earnings	2,119			907			1,212		134	%
Income taxes	Income taxes	214			256			(42)		(16)	%	Income taxes	497			214			283		132	%
Noncontrolling interests	Noncontrolling interests	31			14			17		121	%	Noncontrolling interests	21			31			(10)		(32)	%
Earnings	Earnings	$	662		$	839		$	(177)	(21)	%	Earnings	$	1,601		$	662		$	939	142	%
Average Balance Sheet	Average Balance Sheet											Average Balance Sheet
Loans held for sale	Loans held for sale	$	1,070		$	1,150		$	(80)	(7)	%	Loans held for sale	$	578		$	1,070		$	(492)	(46)	%
Loans	Loans											Loans
Consumer	Consumer											Consumer
Residential real estate	Residential real estate	$	32,389		$	19,573		$	12,816	65	%	Residential real estate	$	35,285		$	32,389		$	2,896	9	%
Home equity	Home equity	22,673			21,957			716		3	%	Home equity	24,617			22,673			1,944		9	%
Automobile	Automobile	15,918			14,392			1,526		11	%	Automobile	14,962			15,918			(956)		(6)	%
Credit card	Credit card	6,455			5,860			595		10	%	Credit card	6,960			6,455			505		8	%
Education	Education	2,470			2,875			(405)		(14)	%	Education	2,151			2,470			(319)		(13)	%
Other consumer	Other consumer	2,261			2,036			225		11	%	Other consumer	1,959			2,261			(302)		(13)	%
Total consumer	Total consumer	82,166			66,693			15,473		23	%	Total consumer	85,934			82,166			3,768		5	%
Commercial	Commercial	11,325			14,272			(2,947)		(21)	%	Commercial	11,574			11,325			249		2	%
Total loans	Total loans	$	93,491		$	80,965		$	12,526	15	%	Total loans	$	97,508		$	93,491		$	4,017	4	%
Total assets	Total assets	$	112,415		$	96,942		$	15,473	16	%	Total assets	$	115,103		$	112,415		$	2,688	2	%
Deposits	Deposits											Deposits
Noninterest-bearing	Noninterest-bearing	$	64,833		$	49,578		$	15,255	31	%	Noninterest-bearing	$	60,129		$	64,833		$	(4,704)	(7)	%
Interest-bearing	Interest-bearing	201,916			171,211			30,705		18	%	Interest-bearing	199,776			201,916			(2,140)		(1)	%
Total deposits	Total deposits	$	266,749		$	220,789		$	45,960	21	%	Total deposits	$	259,905		$	266,749		$	(6,844)	(3)	%
Performance Ratios	Performance Ratios											Performance Ratios
Return on average assets	Return on average assets	1.19		%	1.75		%					Return on average assets	2.80		%	1.19		%
Noninterest income to total revenue	Noninterest income to total revenue	32		%	32		%					Noninterest income to total revenue	23		%	32		%
Efficiency	Efficiency	81		%	75		%					Efficiency	62		%	81		%


At or for six months ended June 30	At or for six months ended June 30							Change				At or for six months ended June 30							Change
Dollars in millions, except as noted	Dollars in millions, except as noted	2022			2021			$		%		Dollars in millions, except as noted	2023			2022			$		%
Supplemental Noninterest Income Information	Supplemental Noninterest Income Information											Supplemental Noninterest Income Information
Asset management and brokerage	Asset management and brokerage	$	269		$	212		$	57	27	%	Asset management and brokerage	$	254		$	269		$	(15)	(6)	%
Card and cash management	Card and cash management	$	659		$	588		$	71	12	%	Card and cash management	$	668		$	659		$	9	1	%
Lending and deposit services	Lending and deposit services	$	331		$	282		$	49	17	%	Lending and deposit services	$	357		$	331		$	26	8	%
Residential and commercial mortgage	Residential and commercial mortgage	$	170		$	208		$	(38)	(18)	%	Residential and commercial mortgage	$	179		$	170		$	9	5	%
Residential Mortgage Information	Residential Mortgage Information											Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)	Residential mortgage servicing statistics (in billions, except as noted) (a)											Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)	Serviced portfolio balance (b)	$	145		$	145				—		Serviced portfolio balance (b)	$	191		$	145		$	46	32	%
Serviced portfolio acquisitions	Serviced portfolio acquisitions	$	21		$	40		$	(19)	(48)	%	Serviced portfolio acquisitions	$	9		$	21		$	(12)	(57)	%
MSR asset value (b)	MSR asset value (b)	$	1.6		$	1.1		$	0.5	45	%	MSR asset value (b)	$	2.3		$	1.6		$	0.7	44	%
MSR capitalization value (in basis points) (b)	MSR capitalization value (in basis points) (b)	112			77			35		45	%	MSR capitalization value (in basis points) (b)	123			112			11		10	%
Servicing income: (in millions)	Servicing income: (in millions)											Servicing income: (in millions)
Servicing fees, net (c)	Servicing fees, net (c)	$	69		$	2		$	67	*		Servicing fees, net (c)	$	145		$	69		$	76	110	%
Mortgage servicing rights valuation, net of economic hedge	Mortgage servicing rights valuation, net of economic hedge	$	15		$	38		$	(23)	(61)	%	Mortgage servicing rights valuation, net of economic hedge	$	5		$	15		$	(10)	(67)	%
Residential mortgage loan statistics	Residential mortgage loan statistics											Residential mortgage loan statistics
Loan origination volume (in billions)	Loan origination volume (in billions)	$	9.9		$	10.8		$	(0.9)	(8)	%	Loan origination volume (in billions)	$	3.8		$	9.9		$	(6.1)	(62)	%
Loan sale margin percentage	Loan sale margin percentage	2.18		%	2.92		%					Loan sale margin percentage	2.24		%	2.18		%
Percentage of originations represented by:	Percentage of originations represented by:											Percentage of originations represented by:
Purchase volume (d)	Purchase volume (d)	57		%	43		%					Purchase volume (d)	88		%	57		%
Refinance volume	Refinance volume	43		%	57		%					Refinance volume	12		%	43		%
Other Information (b)	Other Information (b)											Other Information (b)
Customer-related statistics (average)	Customer-related statistics (average)											Customer-related statistics (average)
Non-teller deposit transactions (e)	Non-teller deposit transactions (e)	64		%	66		%					Non-teller deposit transactions (e)	65		%	64		%
Digital consumer customers (f)	Digital consumer customers (f)	78		%	80		%					Digital consumer customers (f)	74		%	78		%
Credit-related statistics	Credit-related statistics											Credit-related statistics
Nonperforming assets	Nonperforming assets	$	1,088		$	1,245		$	(157)	(13)	%	Nonperforming assets	$	981		$	1,088		$	(107)	(10)	%
Net charge-offs - loans and leases	Net charge-offs - loans and leases	$	229		$	187		$	42	22	%	Net charge-offs - loans and leases	$	221		$	229		$	(8)	(3)	%
Other statistics	Other statistics											Other statistics
ATMs	ATMs	9,301			9,636			(335)		(3)	%	ATMs	8,566			9,301			(735)		(8)	%
Branches (g)	Branches (g)	2,535			2,724			(189)		(7)	%	Branches (g)	2,361			2,535			(174)		(7)	%
Brokerage account client assets (in billions) (h)	Brokerage account client assets (in billions) (h)	$	68		$	83		$	(15)	(18)	%	Brokerage account client assets (in billions) (h)	$	75		$	68		$	7	10	%


		June 30, 2022				December 31, 2021					June 30, 2023				December 31, 2022
Dollars in millions	Dollars in millions	Amount		% of Total		Amount		% of Total		Dollars in millions	Amount		% of Total		Amount		% of Total
Commercial and industrial	Commercial and industrial									Commercial and industrial
Manufacturing	Manufacturing	$	27,179	16	%	$	22,597	15	%	Manufacturing	$	30,586	17	%	$	30,845	17	%
Retail/wholesale trade	Retail/wholesale trade	26,475		15		22,803		15		Retail/wholesale trade	28,751		16		29,176		16
Service providers	Service providers	21,184		12		20,750		14		Service providers	22,277		13		23,548		13
Financial services	Financial services	19,594		11		17,950		12		Financial services	21,823		12		21,320		12
Real estate related (a)										Real estate related (a)	17,200		10		17,780		10
Technology, media & telecommunications	Technology, media & telecommunications	16,249		10		10,070		7		Technology, media & telecommunications	11,158		6		11,845		7
Real estate related (a)		16,179		10		15,123		10
Health care	Health care	10,153		6		9,944		7		Health care	10,186		6		10,649		6
Transportation and warehousing	Transportation and warehousing	7,604		4		7,136		5		Transportation and warehousing	8,048		5		7,858		4
Other industries	Other industries	27,214		16		26,560		15		Other industries	27,600		15		29,198		15
Total commercial and industrial loans	Total commercial and industrial loans	$	171,831	100	%	$	152,933	100	%	Total commercial and industrial loans	$	177,629	100	%	$	182,219	100	%


		June 30, 2022				December 31, 2021					June 30, 2023				December 31, 2022
Dollars in millions	Dollars in millions	Amount		% of Total		Amount		% of Total		Dollars in millions	Amount		% of Total		Amount		% of Total
Geography (a)	Geography (a)									Geography (a)
California	California	$	5,925	17	%	$	5,561	16	%	California	$	6,190	17	%	$	6,224	17	%
Texas	Texas	3,708		11		3,458		10		Texas	3,686		10		3,871		11
Florida	Florida	2,920		8		2,987		9		Florida	3,584		10		3,275		9
Pennsylvania										Pennsylvania	1,648		5		1,638		5
Virginia	Virginia	1,653		5		1,720		5		Virginia	1,550		4		1,638		5
Maryland	Maryland	1,590		5		1,557		5		Maryland	1,416		4		1,496		4
Pennsylvania		1,550		4		1,482		4
Illinois	Illinois	1,360		4		970		3		Illinois	1,267		4		1,321		4
Colorado										Colorado	1,218		3		1,336		4
Ohio	Ohio	1,168		3		1,219		4		Ohio	1,172		3		1,236		3
Colorado		1,142		3		1,126		3
New Jersey		986		3		982		3
North Carolina										North Carolina	1,146		3		1,150		3
Other	Other	12,450		37		12,953		38		Other	13,051		37		13,131		35
Total commercial real estate loans	Total commercial real estate loans	$	34,452	100	%	$	34,015	100	%	Total commercial real estate loans	$	35,928	100	%	$	36,316	100	%
Property Type (a)	Property Type (a)									Property Type (a)
Multifamily	Multifamily	$	11,744	34	%	$	10,581	31	%	Multifamily	$	14,835	41	%	$	13,738	38	%
Office	Office	9,406		27		9,547		28		Office	8,685		24		9,123		25
Industrial/warehouse	Industrial/warehouse	3,265		9		2,413		7		Industrial/warehouse	3,907		11		4,035		11
Retail	Retail	3,071		9		3,570		10		Retail	2,807		8		2,855		8
Seniors housing	Seniors housing	2,298		7		2,602		8		Seniors housing	1,835		5		2,228		6
Hotel/motel	Hotel/motel	1,976		6		2,008		6		Hotel/motel	1,768		5		1,896		5
Mixed use	Mixed use	723		2		724		2		Mixed use	266		1		701		2
Other	Other	1,969		6		2,570		8		Other	1,825		5		1,740		5
Total commercial real estate loans	Total commercial real estate loans	$	34,452	100	%	$	34,015	100	%	Total commercial real estate loans	$	35,928	100	%	$	36,316	100	%


		June 30, 2022				December 31, 2021					June 30, 2023				December 31, 2022
Dollars in millions	Dollars in millions	Amount		% of Total		Amount		% of Total		Dollars in millions	Amount		% of Total		Amount		% of Total
Geography (a)	Geography (a)									Geography (a)
Pennsylvania	Pennsylvania	$	5,105	21	%	$	5,108	21	%	Pennsylvania	$	4,876	19	%	$	5,051	19	%
New Jersey	New Jersey	3,188		13		3,117		13		New Jersey	3,237		12		3,266		13
Ohio	Ohio	2,364		10		2,398		10		Ohio	2,302		9		2,352		9
Florida	Florida	1,854		8		1,701		7		Florida	2,178		8		2,082		8
California										California	1,450		6		1,247		5
Maryland										Maryland	1,243		5		1,254		5
Michigan	Michigan	1,262		5		1,246		5		Michigan	1,238		5		1,263		5
Maryland		1,220		5		1,206		5
Texas										Texas	1,195		5		1,144		4
Illinois	Illinois	1,125		5		1,154		5		Illinois	1,095		4		1,126		4
Texas		999		4		978		4
North Carolina	North Carolina	941		4		918		4		North Carolina	1,010		4		995		4
California		881		4		705		3
Other	Other	5,754		21		5,530		23		Other	6,376		23		6,203		24
Total home equity loans	Total home equity loans	$	24,693	100	%	$	24,061	100	%	Total home equity loans	$	26,200	100	%	$	25,983	100	%
Lien type	Lien type									Lien type
1st lien	1st lien			62	%			62	%	1st lien			55	%			58	%
2nd lien	2nd lien			38				38		2nd lien			45				42
Total	Total			100	%			100	%	Total			100	%			100	%
Weighted-average loan origination statistics (b)	Weighted-average loan origination statistics (b)	June 30, 2022				December 31, 2021				Weighted-average loan origination statistics (b)	June 30, 2023				December 31, 2022
Loan origination FICO score	Loan origination FICO score			777				782		Loan origination FICO score			772				774
LTV of loan originations	LTV of loan originations			67	%			66	%	LTV of loan originations			66	%			67	%


		June 30, 2022	December 31, 2021		June 30, 2023	December 31, 2022
Weighted-average loan origination FICO score (b)
Weighted-average loan origination FICO score (a) (b)				Weighted-average loan origination FICO score (a) (b)
Indirect auto	Indirect auto	786	791	Indirect auto	781	784
Direct auto	Direct auto	777	775	Direct auto	779	776
Weighted-average term of loan originations - in months(a)	Weighted-average term of loan originations - in months(a)			Weighted-average term of loan originations - in months(a)
Indirect auto	Indirect auto	73	72	Indirect auto	73	73
Direct auto	Direct auto	62	62	Direct auto	63	63


In millions	2022		2021
January 1	$	2,506	$	2,337
Acquired nonperforming assets (a)			880
New nonperforming assets	739		456
Charge-offs and valuation adjustments	(117)		(131)
Principal activity, including paydowns and payoffs	(547)		(450)
Asset sales and transfers to loans held for sale	(27)		(101)
Returned to performing status	(479)		(173)
June 30	$	2,075	$	2,818


		Amount								% of Total Loans Outstanding					Amount								% of Total Loans Outstanding
		June 30 2022		December 31 2021		Change				June 30 2022		December 31 2021			June 30 2023		December 31 2022		Change				June 30 2023		December 31 2022
Dollars in millions	Dollars in millions					$		%						Dollars in millions					$		%
Early stage loan delinquencies	Early stage loan delinquencies													Early stage loan delinquencies
Accruing loans past due 30 to 59 days	Accruing loans past due 30 to 59 days	$	696	$	1,011	$	(315)	(31)	%	0.22	%	0.35	%	Accruing loans past due 30 to 59 days	$	555	$	747	$	(192)	(26)	%	0.17	%	0.23	%
Accruing loans past due 60 to 89 days	Accruing loans past due 60 to 89 days	345		355		(10)		(3)	%	0.11	%	0.12	%	Accruing loans past due 60 to 89 days	238		261		(23)		(9)	%	0.07	%	0.08	%
Total early stage loan delinquencies	Total early stage loan delinquencies	1,041		1,366		(325)		(24)	%	0.33	%	0.47	%	Total early stage loan delinquencies	793		1,008		(215)		(21)	%	0.25	%	0.31	%
Late stage loan delinquencies	Late stage loan delinquencies													Late stage loan delinquencies
Accruing loans past due 90 days or more	Accruing loans past due 90 days or more	470		619		(149)		(24)	%	0.15	%	0.21	%	Accruing loans past due 90 days or more	419		482		(63)		(13)	%	0.13	%	0.15	%
Total accruing loans past due	Total accruing loans past due	$	1,511	$	1,985	$	(474)	(24)	%	0.49	%	0.69	%	Total accruing loans past due	$	1,212	$	1,490	$	(278)	(19)	%	0.38	%	0.46	%


Six months ended June 30	Six months ended June 30	Gross Charge-offs		Recoveries		Net Charge-offs / (Recoveries)		% of Average Loans (Annualized)		Six months ended June 30	Gross Charge-offs		Recoveries		Net Charge-offs / (Recoveries)		% of Average Loans (Annualized)
Dollars in millions	Dollars in millions									Dollars in millions
2023										2023
Commercial										Commercial
Commercial and industrial										Commercial and industrial	$	149	$	53	$	96	0.11	%
Commercial real estate										Commercial real estate	99		2		97		0.54	%
Equipment lease financing										Equipment lease financing	7		6		1		0.03	%
Total commercial										Total commercial	255		61		194		0.17	%
Consumer										Consumer
Residential real estate										Residential real estate	5		7		(2)		(0.01)	%
Home equity										Home equity	11		24		(13)		(0.10)	%
Automobile										Automobile	61		51		10		0.13	%
Credit card										Credit card	154		22		132		3.82	%
Education										Education	9		4		5		0.47	%
Other consumer										Other consumer	80		17		63		2.65	%
Total consumer										Total consumer	320		125		195		0.39	%
Total										Total	$	575	$	186	$	389	0.24	%
2022	2022									2022
Commercial	Commercial									Commercial
Commercial and industrial	Commercial and industrial	$	71	$	45	$	26	0.03	%	Commercial and industrial	$	71	$	45	$	26	0.03	%
Commercial real estate	Commercial real estate	15		2		13		0.08	%	Commercial real estate	15		2		13		0.08	%
Equipment lease financing	Equipment lease financing	3		6		(3)		(0.10)	%	Equipment lease financing	3		6		(3)		(0.10)	%
Total commercial	Total commercial	89		53		36		0.04	%	Total commercial	89		53		36		0.04	%
Consumer	Consumer									Consumer
Residential real estate	Residential real estate	7		11		(4)		(0.02)	%	Residential real estate	7		11		(4)		(0.02)	%
Home equity	Home equity	6		39		(33)		(0.27)	%	Home equity	6		39		(33)		(0.27)	%
Automobile	Automobile	86		70		16		0.20	%	Automobile	86		70		16		0.20	%
Credit card	Credit card	135		31		104		3.24	%	Credit card	135		31		104		3.24	%
Education	Education	8		3		5		0.41	%	Education	8		3		5		0.41	%
Other consumer	Other consumer	115		19		96		3.45	%	Other consumer	115		19		96		3.45	%
Total consumer	Total consumer	357		173		184		0.39	%	Total consumer	357		173		184		0.39	%
Total	Total	$	446	$	226	$	220	0.15	%	Total	$	446	$	226	$	220	0.15	%
2021
Commercial
Commercial and industrial		$	304	$	43	$	261	0.39	%
Commercial real estate		33		3		30		0.20	%
Equipment lease financing		6		6
Total commercial		343		52		291		0.34	%
Consumer
Residential real estate		7		11		(4)		(0.03)	%
Home equity		14		38		(24)		(0.20)	%
Automobile		87		79		8		0.11	%
Credit card		134		23		111		3.81	%
Education		8		4		4		0.28	%
Other consumer		78		12		66		2.75	%
Total consumer		328		167		161		0.42	%
Total		$	671	$	219	$	452	0.37	%


In billions	~~2022~~2023
January 1	$	~~27.7~~23.0
Issuances	~~0.9~~6.2
Calls and maturities	~~(5.3)~~(1.5)
Other	~~(1.5)~~(0.1)

June 30	$	~~21.8~~27.6


Dollars in billions	June 30, 2023		December 31, 2022
Cash balance with Federal Reserve Bank	$	37.8	$	26.9
Available investment securities (a)	103.1		109.8
Unused borrowing capacity from FHLB and Federal Reserve Bank	86.4		67.2
Total available contingent liquidity	$	227.3	$	203.9


~~Redemption Date~~	~~Amount~~	~~Description of Redemption~~
~~May 31, 2022~~	~~$750 million~~	All outstanding senior bank notes with an original scheduled maturity date of June 29, 2022. The securities had a distribution rate of 2.875%. The redemption price was equal to $1,000 per $1,000 in principal amount, plus any accrued and unpaid distributions to the redemption date of May 31, 2022.
~~June 28, 2022~~	~~$750 million~~	All outstanding senior bank notes with an original scheduled maturity date of July 28, 2022. The securities had a distribution rate of 2.450%. The redemption price was equal to $1,000 per $1,000 in principal amount, plus any accrued and unpaid distributions to the redemption date of June 28, 2022.


Issuance Date	Amount	Description of Issuance
June ~~6, 2022~~12, 2023	$~~850 million~~1.0 billion	$~~850 million~~1.0 billion of ~~subordinated~~senior fixed-to-floating ~~rate~~ notes with a maturity date of June ~~6, 2033.~~12, 2026. Interest is payable semi-annually in arrears at a fixed rate of ~~4.626%~~5.812% per annum, on June 612 and December 912 of each year, beginning on December ~~6, 2022.~~12, 2023. Beginning on June ~~6, 2032,~~12, 2025, interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR ~~Index)~~Index as described in the Prospectus Supplement), plus ~~1.850%~~1.322%, on September ~~6, 2032,~~12, 2025, December ~~6, 2032,~~12, 2025, March ~~6, 2033~~12, 2026 and at the maturity date.
June 12, 2023	$2.5 billion	$2.5 billion of senior fixed-to-floating notes with a maturity date of June 12, 2029. Interest is payable semi-annually in arrears at a fixed rate of 5.582% per annum, on June 12 and December 12 of each year, beginning on December 12, 2023. Beginning on June 12, 2028, interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the Prospectus Supplement), plus 1.841%, on September 12, 2028, December 12, 2028, March 12, 2029 and at the maturity date.


	June 30, ~~2022~~2023
	Moody’s	Standard & Poor’s	Fitch
PNC
Senior debt	A3	A-	A
Subordinated debt	A3	BBB+	A-
Preferred stock	Baa2	BBB-	BBB
PNC Bank
Senior debt	A2	A	A+
Subordinated debt	A3	A-	A
Long-term deposits	Aa3	A	AA-
Short-term deposits	P-1	A-1	F1+
Short-term notes	P-1	A-1	F1


	Second Quarter 2022		Second Quarter 2021
Net Interest Income Sensitivity Simulation
Effect on net interest income in first year from gradual interest rate change over the following 12 months of:
100 basis point increase	3.2	%	5.2	%
100 basis point decrease (a)	(3.4)	%	N/A
Effect on net interest income in second year from gradual interest rate change over the preceding 12 months of:
100 basis point increase	5.6	%	13.1	%
100 basis point decrease (a)	(6.4)	%	N/A


	Second Quarter 2023		Second Quarter 2022
Net Interest Income Sensitivity Simulation
Effect on net interest income in first year from gradual parallel interest rate change over the following 12 months of:
100 basis point increase	0.0	%	3.2	%
100 basis point decrease	0.0	%	(3.4)	%
Effect on net interest income in second year from gradual parallel interest rate change over the preceding 12 months of:
100 basis point increase	1.4	%	5.6	%
100 basis point decrease	(1.6)	%	(6.4)	%


		June 30, 2022							June 30, 2023
		PNC Economist		Market Forward		Slope Flattening			PNC Economist		Market Forward		Slope Flattening
First year sensitivity	First year sensitivity	5.8	%	6.5	%	(0.8)	%	First year sensitivity	(0.9)	%	0.0	%	(0.5)	%
Second year sensitivity	Second year sensitivity	(0.5)	%	(1.2)	%	(3.1)	%	Second year sensitivity	0.2	%	(0.7)	%	(2.4)	%


	Assumptions as of June 30, 2022
	2022	2023	2024
U.S. Real GDP (a)	1.6%	0.5%	1.2%
U.S. Unemployment Rate (b)	3.6%	4.5%	4.5%
	Assumptions as of December 31, 2021
	2022	2023	2024
U.S. Real GDP (a)	2.8%	1.4%	1.3%
U.S. Unemployment Rate (b)	4.4%	4.1%	3.9%


(Continued from previous page)
Unaudited In millions	Six months ended June 30
	2023		2022
Financing Activities
Net change in
Noninterest-bearing deposits	$	(13,982)	$	(8,717)
Interest-bearing deposits	5,166		(7,730)
Federal funds purchased and repurchase agreements	94		(5)


Other borrowed funds	(35)		1,098
Sales/issuances
Federal Home Loan Bank borrowings	2,000		10,000
Senior debt	6,235
Subordinated debt			847
Other borrowed funds	486		435
Preferred stock	1,484		990
Common and treasury stock	36		34
Repayments/maturities
Federal Home Loan Bank borrowings	(75)
Senior debt	(750)		(5,250)
Subordinated debt	(750)
Other borrowed funds	(495)		(435)


Acquisition of treasury stock	(588)		(2,076)
Preferred stock cash dividends paid	(195)		(116)
Common stock cash dividends paid	(1,213)		(1,157)

Net cash provided (used) by financing activities	$	(2,582)	$	(12,082)
Net Increase (Decrease) In Cash And Due From Banks And Restricted Cash	$	(852)	$	578


Cash and due from banks and restricted cash at beginning of period	7,043		8,004
Cash and due from banks and restricted cash at end of period	$	6,191	$	8,582

Cash And Due From Banks And Restricted Cash
Cash and due from banks at end of period (unrestricted cash)	$	5,604	$	7,950
Restricted cash	587		632
Cash and due from banks and restricted cash at end of period	$	6,191	$	8,582
Supplemental Disclosures
Interest paid	$	2,586	$	420
Income taxes paid	$	719	$	62
Income taxes refunded	$	824	$	8
Leased assets obtained in exchange for new operating lease liabilities	$	113	$	103

Non-cash Investing And Financing Items
Transfer from securities available for sale to securities held to maturity			$	83,419
Transfer from loans to loans held for sale, net	$	712	$	330

Transfer from loans to foreclosed assets	$	32	$	25


Commercial
Loans classified as nonperforming and accounted for as nonaccrual			• Loans accounted for at amortized cost where: –The loan is 90 days or more past due. –The loan is rated substandard or worse due to the determination that full collection of principal and interest is not probable as demonstrated by the following conditions: •The collection of principal or interest is 90 days or more past due, •Reasonable doubt exists as to the certainty of the borrower’s future debt service ability, according to the terms of the credit arrangement, regardless of whether 90 days have passed or not, •The borrower has filed, or will likely file for bankruptcy, and it is not probable the borrower will be able to repay contractual payments due under the loan, •The bank advances additional funds to cover principal or interest, •We are in the process of liquidating a commercial borrower, or •We are pursuing remedies under a guarantee.
Loans excluded from nonperforming classification but accounted for as nonaccrual			• Loans accounted for under the fair value option and full collection of principal and interest is not probable. • Loans accounted for at the lower of cost or market less costs to sell (held for sale) and full collection of principal and interest is not probable.
Loans excluded from nonperforming classification and nonaccrual accounting			• Loans that are well secured and in the process of collection. • Certain government insured or guaranteed loans where substantially all principal and interest is insured. • Commercial purchasing card assets that do not accrue interest.


Loan Class	Forecast Period - Key Economic Variables	Reversion Method	Long-Run Average
Commercial
Commercial and industrial / Equipment lease financing	•GDP and Gross Domestic Investment measures, employment related variables and personal income and consumption measures	•Immediate reversion	•Average parameters determined based on internal and external historical data •Modeled parameters using long-run economic conditions for retail small balance obligors
Commercial real estate (CRE)	• CRE Price Index, unemployment rates, GDP, corporate bond yield and interest rates	• Immediate reversion	• Average parameters determined based on internal and external historical data
Consumer
Home equity / Residential real estate	•Unemployment rates, HPI and interest rates	•Straight-line over 3 years	•Modeled parameters using long-run economic conditions
Automobile	•Unemployment rates, HPI, personal consumption expenditure and Manheim used car index	•Straight-line over 1 year	•Average parameters determined based on internal and external historical data
Credit card	•Unemployment rates, personal consumption expenditure and HPI	•Straight-line over 2 years	•Modeled parameters using long-run economic conditions
Education / Other consumer	•Modeled using either discrete risk parameters or net charge-off and pay-down rates


	~~June 1, 2021~~
~~In millions~~	~~Fair Value~~
~~Fair value of acquisition consideration~~	$	~~11,480~~
~~Assets~~
~~Cash and due from banks~~	$	~~969~~
~~Interest-earning deposits with banks~~	~~13,313~~
~~Loans held for sale~~	~~463~~
~~Investment securities – available for sale~~	~~18,358~~
~~Net loans~~	~~61,423~~
~~Equity investments~~	~~723~~
~~Mortgage servicing rights~~	35
~~Core deposit intangibles and other intangible assets~~	~~378~~
~~Other~~	~~3,527~~
~~Total assets~~	$	~~99,189~~
~~Liabilities~~
~~Deposits~~	$	~~85,562~~
~~Borrowed funds~~	~~2,449~~
~~Accrued expenses and other liabilities~~	~~1,275~~
~~Total liabilities~~	$	~~89,286~~
~~Noncontrolling interests~~	22
~~Less: Net assets~~	$	~~9,881~~
~~Goodwill~~	$	~~1,599~~


		Unrealized loss position less than 12 months				Unrealized loss position 12 months or more				Total					Unrealized loss position less than 12 months				Unrealized loss position 12 months or more				Total
In millions	In millions	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		In millions	Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value
June 30, 2022
June 30, 2023														June 30, 2023

U.S. Treasury and government agencies	U.S. Treasury and government agencies	$	(729)	$	10,450	$	(120)	$	1,239	$	(849)	$	11,689	U.S. Treasury and government agencies	$	(9)	$	898	$	(751)	$	5,983	$	(760)	$	6,881
Residential mortgage-backed	Residential mortgage-backed													Residential mortgage-backed
Agency	Agency	(1,811)		28,806		(263)		2,135		(2,074)		30,941		Agency	(51)		2,309		(3,167)		24,700		(3,218)		27,009
Non-agency	Non-agency	(2)		101		(2)		19		(4)		120		Non-agency	(1)		46		(6)		67		(7)		113
Commercial mortgage-backed	Commercial mortgage-backed													Commercial mortgage-backed
Agency	Agency	(88)		1,720		(6)		136		(94)		1,856		Agency	(2)		89		(165)		1,485		(167)		1,574
Non-agency	Non-agency	(31)		1,078		(3)		140		(34)		1,218		Non-agency					(57)		808		(57)		808
Asset-backed	Asset-backed	0		0						0		0		Asset-backed	(3)		502		(1)		12		(4)		514
Other	Other	(153)		2,311		(5)		36		(158)		2,347		Other	(6)		243		(180)		2,022		(186)		2,265
Total securities available for sale	Total securities available for sale	$	(2,814)	$	44,466	$	(399)	$	3,705	$	(3,213)	$	48,171	Total securities available for sale	$	(72)	$	4,087	$	(4,327)	$	35,077	$	(4,399)	$	39,164
December 31, 2021
December 31, 2022														December 31, 2022
U.S. Treasury and government agencies	U.S. Treasury and government agencies	$	(370)	$	32,600					$	(370)	$	32,600	U.S. Treasury and government agencies	$	(601)	$	5,868	$	(235)	$	2,208	$	(836)	$	8,076
Agency residential mortgage-backed		(369)		41,521		$	(20)	$	1,489	(389)		43,010

Residential mortgage-backed														Residential mortgage-backed
Agency														Agency	(1,744)		19,036		(1,560)		8,971		(3,304)		28,007
Non-agency														Non-agency	(6)		112		(2)		17		(8)		129
Commercial mortgage-backed	Commercial mortgage-backed													Commercial mortgage-backed
Agency	Agency	(5)		451		(1)		60		(6)		511		Agency	(125)		1,283		(45)		372		(170)		1,655
Non-agency	Non-agency	(4)		1,453		(3)		474		(7)		1,927		Non-agency	(44)		750		(18)		394		(62)		1,144
Asset-backed	Asset-backed	(29)		3,465		(2)		188		(31)		3,653		Asset-backed					(1)		5		(1)		5
Other	Other	(13)		1,405						(13)		1,405		Other	(96)		1,418		(112)		1,144		(208)		2,562

Total securities available for sale	Total securities available for sale	$	(790)	$	80,895	$	(26)	$	2,211	$	(816)	$	83,106	Total securities available for sale	$	(2,616)	$	28,467	$	(1,973)	$	13,111	$	(4,589)	$	41,578


Six months ended June 30 In millions	Gross Gains		Gross Losses		Net Gains (Losses)		Tax Expense (Benefit)
2022	$	11	$	(15)	$	(4)	$	(1)
2021	$	201	$	(166)	$	35	$	7


June 30, 2022 Dollars in millions		1 Year or Less			After 1 Year through 5 Years			After 5 Years through 10 Years			After 10 Years			Total
June 30, 2023 Dollars in millions																	June 30, 2023 Dollars in millions	1 Year or Less			After 1 Year through 5 Years			After 5 Years through 10 Years			After 10 Years			Total
Securities Available for Sale	Securities Available for Sale																Securities Available for Sale
U.S. Treasury and government agencies	U.S. Treasury and government agencies	$	2,783		$	5,835		$	3,124		$	2,135		$	13,877		U.S. Treasury and government agencies	$	1,230		$	2,918		$	1,724		$	1,991		$	7,863
Residential mortgage-backed	Residential mortgage-backed																Residential mortgage-backed
Agency	Agency	2			83			3,046			31,109			34,240			Agency	1			134			3,675			27,057			30,867
Non-agency	Non-agency							2			760			762			Non-agency							8			634			642
Commercial mortgage-backed	Commercial mortgage-backed																Commercial mortgage-backed
Agency	Agency	62			243			1,363			372			2,040			Agency	49			409			905			396			1,759
Non-agency	Non-agency				7			224			1,165			1,396			Non-agency				119			100			795			1,014
Asset-backed	Asset-backed							11			101			112			Asset-backed				249			106			555			910
Other	Other	148			2,243			971			186			3,548			Other	307			2,008			495			152			2,962
Total securities available for sale at amortized cost	Total securities available for sale at amortized cost	$	2,995		$	8,411		$	8,741		$	35,828		$	55,975		Total securities available for sale at amortized cost	$	1,587		$	5,837		$	7,013		$	31,580		$	46,017
Fair value	Fair value	$	2,988		$	8,056		$	8,209		$	33,731		$	52,984		Fair value	$	1,550		$	5,460		$	6,385		$	28,392		$	41,787
Weighted-average yield, GAAP basis (a)	Weighted-average yield, GAAP basis (a)	2.01		%	1.58		%	2.16		%	2.68		%	2.40		%	Weighted-average yield, GAAP basis (a)	2.01		%	2.17		%	2.39		%	2.98		%	2.75		%
Securities Held to Maturity	Securities Held to Maturity																Securities Held to Maturity
U.S. Treasury and government agencies	U.S. Treasury and government agencies	$	474		$	23,231		$	7,484		$	393		$	31,582		U.S. Treasury and government agencies	$	2,075		$	31,522		$	2,477		$	911		$	36,985
Residential mortgage-backed	Residential mortgage-backed																Residential mortgage-backed
Agency	Agency				12			34			36,834			36,880			Agency				7			333			43,938			44,278
Non-agency	Non-agency										288			288			Non-agency										269			269
Commercial mortgage-backed	Commercial mortgage-backed																Commercial mortgage-backed
Agency	Agency							86						86			Agency				133			430			276			839
Non-agency	Non-agency				137			8			1,697			1,842			Non-agency	43			49						1,457			1,549
Asset-backed	Asset-backed	16			1,872			1,609			3,193			6,690			Asset-backed	11			2,103			1,949			2,582			6,645
Other	Other	182			906			561			731			2,380			Other	230			1,116			603			1,360			3,309
Total securities held to maturity at amortized cost	Total securities held to maturity at amortized cost	$	672		$	26,158		$	9,782		$	43,136		$	79,748		Total securities held to maturity at amortized cost	$	2,359		$	34,930		$	5,792		$	50,793		$	93,874
Fair value	Fair value	$	671		$	25,964		$	9,603		$	42,176		$	78,414		Fair value	$	2,330		$	33,471		$	5,526		$	47,569		$	88,896
Weighted-average yield, GAAP basis (a)	Weighted-average yield, GAAP basis (a)	1.08		%	1.10		%	1.76		%	2.38		%	1.87		%	Weighted-average yield, GAAP basis (a)	1.30		%	1.39		%	3.65		%	2.93		%	2.36		%


Commercial						Consumer

• Commercial and industrial						• Residential real estate
• Commercial real estate						• Home equity
• Equipment lease financing						• Automobile
						• Credit card
						• Education
						• Other consumer