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

Attached files

file	filename
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d421883d8k.htm
EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d421883dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2017

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2017

(UNAUDITED)


	Page
Consolidated Results:

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


Business Segment Results:

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

Glossary of Terms			16-18

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 14, 2017. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

BUSINESS

PNC is one of the largest diversified financial services companies in the United States and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, including residential mortgage, corporate and institutional banking and asset management, providing many of its products and services nationally, as well as other products and services in PNC’s primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, Florida, North Carolina, Kentucky, Washington, D.C., Delaware, Virginia, Georgia, Alabama, Missouri, Wisconsin and South Carolina. PNC also provides certain products and services internationally.

The PNC Financial Services Group, Inc.

Cross-Reference Index to Second Quarter 2017 Financial Supplement (Unaudited)

Financial Supplement Table Reference


Table	Description	Page
1	Consolidated Income Statement		1
2	Consolidated Balance Sheet		2
3	Average Consolidated Balance Sheet		3
4	Details of Net Interest Margin		4
5	Per Share Related Information		5
6	Details of Loans		5
7	Change in Allowance for Loan and Lease Losses		6
8	Nonperforming Assets By Type		7
9	Change in Nonperforming Assets		8
10	Largest Individual Nonperforming Assets at June 30, 2017		8
11	Accruing Loans Past Due 30 To 59 Days		9
12	Accruing Loans Past Due 60 To 89 Days		9
13	Accruing Loans Past Due 90 Days or More		9
14	Period End Employees		10
15	Summary of Business Segment Income and Revenue		11
16	Retail Banking		12-13
17	Corporate & Institutional Banking		14
18	Asset Management Group		15


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Table 1: Consolidated Income Statement (Unaudited)


	Three months ended															Six months ended
In millions, except per share data	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Interest Income
Loans	$	2,040		$	1,904		$	1,886		$	1,856		$	1,829		$	3,944		$	3,672
Investment securities		495			493			457			451			456			988			918
Other		139			123			110			101			99			262			201

Total interest income		2,674			2,520			2,453			2,408			2,384			5,194			4,791

Interest Expense
Deposits		143			120			114			107			104			263			209
Borrowed funds		273			240			209			206			212			513			416

Total interest expense		416			360			323			313			316			776			625

Net interest income		2,258			2,160			2,130			2,095			2,068			4,418			4,166

Noninterest Income
Asset management		398			403			399			404			377			801			718
Consumer services		360			332			349			348			354			692			691
Corporate services		434			393			387			389			403			827			728
Residential mortgage		104			113			142			160			165			217			265
Service charges on deposits		170			161			172			174			163			331			321
Other (a)		336			322			295			259			264			658			570

Total noninterest income		1,802			1,724			1,744			1,734			1,726			3,526			3,293

Total revenue		4,060			3,884			3,874			3,829			3,794			7,944			7,459
Provision For Credit Losses		98			88			67			87			127			186			279
Noninterest Expense
Personnel		1,263			1,249			1,231			1,239			1,226			2,512			2,371
Occupancy		202			222			210			215			215			424			436
Equipment		281			251			254			246			240			532			474
Marketing		67			55			60			72			61			122			115
Other		666			625			686			622			618			1,291			1,245

Total noninterest expense		2,479			2,402			2,441			2,394			2,360			4,881			4,641

Income before income taxes and noncontrolling interests		1,483			1,394			1,366			1,348			1,307			2,877			2,539
Income taxes		386			320			319			342			318			706			607

Net income		1,097			1,074			1,047			1,006			989			2,171			1,932

Less: Net income attributable to noncontrolling interests		10			17			22			18			23			27			42
Preferred stock dividends (b)		55			63			42			63			42			118			105
Preferred stock discount accretion and redemptions		2			21			1			1			1			23			3

Net income attributable to common shareholders	$	1,030		$	973		$	982		$	924		$	923		$	2,003		$	1,782

Earnings Per Common Share
Basic	$	2.12		$	1.99		$	2.01		$	1.87		$	1.84		$	4.10		$	3.54
Diluted	$	2.10		$	1.96		$	1.97		$	1.84		$	1.82		$	4.05		$	3.49

Average Common Shares Outstanding
Basic		484			487			487			490			497			486			499
Diluted		488			492			494			496			503			491			505

Efficiency		61	%		62	%		63	%		63	%		62	%		61	%		62	%
Noninterest income to total revenue		44	%		44	%		45	%		45	%		45	%		44	%		44	%
Effective tax rate (c)		26.0	%		23.0	%		23.4	%		25.4	%		24.3	%		24.5	%		23.9	%

(a)

Includes net gains (losses) on sales of securities of $13 million, $(2) million, $(4) million, $7 million, and $4 million for the quarters ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively, and $11 million and $13 million for the six months ended June 30, 2017 and June 30, 2016, respectively.

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

(c)	The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Table 2: Consolidated Balance Sheet (Unaudited)


In millions, except par value	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016
Assets
Cash and due from banks	$	5,039		$	5,003		$	4,879		$	4,531		$	4,196
Interest-earning deposits with banks (a)		22,482			27,877			25,711			27,058			26,750
Loans held for sale (b)		2,030			1,414			2,504			2,053			2,296
Investment securities - available for sale		58,878			59,339			60,104			61,941			56,884
Investment securities - held to maturity		17,553			17,093			15,843			16,573			14,917
Loans (b)		218,034			212,826			210,833			210,446			209,056
Allowance for loan and lease losses		(2,561	)		(2,561	)		(2,589	)		(2,619	)		(2,685	)

Net loans		215,473			210,265			208,244			207,827			206,371
Equity investments (c)		10,819			10,900			10,728			10,605			10,469
Mortgage servicing rights		1,867			1,867			1,758			1,293			1,222
Goodwill		9,163			9,103			9,103			9,103			9,103
Other (b)		28,886			28,083			27,506			28,364			29,127

Total assets	$	372,190		$	370,944		$	366,380		$	369,348		$	361,335

Liabilities
Deposits
Noninterest-bearing	$	79,550		$	79,246		$	80,230		$	82,159		$	77,866
Interest-bearing		179,626			181,464			176,934			177,736			171,912

Total deposits		259,176			260,710			257,164			259,895			249,778
Borrowed funds
Federal Home Loan Bank borrowings		19,039			19,549			17,549			17,050			18,055
Bank notes and senior debt		26,054			23,745			22,972			22,431			23,588
Subordinated debt		6,111			6,889			8,009			8,708			8,764
Other (b)		5,202			4,879			4,176			3,352			4,164

Total borrowed funds		56,406			55,062			52,706			51,541			54,571
Allowance for unfunded loan commitments and letters of credit		304			305			301			310			303
Accrued expenses and other liabilities		10,119			8,964			9,355			10,757			9,984

Total liabilities		326,005			325,041			319,526			322,503			314,636

Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 542 shares		2,710			2,709			2,709			2,709			2,709
Capital surplus		16,326			16,275			16,651			16,159			16,108
Retained earnings		33,133			32,372			31,670			30,958			30,309
Accumulated other comprehensive income (loss)		(98	)		(279	)		(265	)		646			736
Common stock held in treasury at cost: 62, 57, 57, 54 and 49 shares		(5,987	)		(5,323	)		(5,066	)		(4,765	)		(4,304	)

Total shareholders’ equity		46,084			45,754			45,699			45,707			45,558
Noncontrolling interests		101			149			1,155			1,138			1,141

Total equity		46,185			45,903			46,854			46,845			46,699

Total liabilities and equity	$	372,190		$	370,944		$	366,380		$	369,348		$	361,335

(a)	Amounts include balances held with the Federal Reserve Bank of Cleveland of $22.1 billion, $27.5 billion, $25.1 billion, $26.6 billion and $26.3 billion as of June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, respectively.

(b)	Amounts include assets and liabilities for which PNC has elected the fair value option. Our first quarter 2017 Form 10-Q included, and our second quarter 2017 Form 10-Q will include, additional information regarding these items.

(c)	Amounts include our equity interest in BlackRock.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Table 3: Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended										Six months ended
In millions	June 30 2017		March 31 2017		December 31 2016		September 30 2016		June 30 2016		June 30 2017		June 30 2016
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	25,862	$	26,385	$	26,374	$	25,825	$	24,856	$	26,122	$	24,777
Non-agency		2,947		3,127		3,303		3,490		3,728		3,037		3,832
Commercial mortgage-backed		5,493		5,919		6,283		6,276		6,335		5,705		6,461
Asset-backed		5,863		5,992		5,977		5,823		5,672		5,927		5,579
U.S. Treasury and government agencies		12,881		13,101		12,805		9,929		9,673		12,990		9,804
Other		5,093		5,293		5,237		5,166		5,004		5,193		4,925

Total securities available for sale		58,139		59,817		59,979		56,509		55,268		58,974		55,378
Securities held to maturity
Residential mortgage-backed		12,790		11,852		11,465		10,521		10,215		12,323		10,061
Commercial mortgage-backed		1,393		1,458		1,532		1,666		1,755		1,425		1,788
Asset-backed		490		556		585		702		708		523		712
U.S. Treasury and government agencies		533		529		444		264		262		531		260
Other		2,007		2,041		2,030		1,983		1,986		2,024		2,033

Total securities held to maturity		17,213		16,436		16,056		15,136		14,926		16,826		14,854

Total investment securities		75,352		76,253		76,035		71,645		70,194		75,800		70,232
Loans
Commercial		106,944		103,084		101,880		100,320		99,991		105,024		99,530
Commercial real estate		29,655		29,178		29,247		29,034		28,659		29,418		28,313
Equipment lease financing		7,602		7,497		7,398		7,463		7,570		7,550		7,495
Consumer		56,342		56,843		57,164		57,163		57,467		56,591		57,839
Residential real estate		15,830		15,651		15,193		14,870		14,643		15,741		14,580

Total loans		216,373		212,253		210,882		208,850		208,330		214,324		207,757
Interest-earning deposits with banks		22,543		24,192		25,245		28,063		26,463		23,363		25,998
Other interest-earning assets		9,748		8,395		7,983		8,174		7,449		9,076		7,606

Total interest-earning assets		324,016		321,093		320,145		316,732		312,436		322,563		311,593
Noninterest-earning assets		46,286		45,323		46,041		47,138		46,554		45,807		45,858

Total assets	$	370,302	$	366,416	$	366,186	$	363,870	$	358,990	$	368,370	$	357,451

Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	62,157	$	63,921	$	67,271	$	70,076	$	72,442	$	63,034	$	74,417
Demand		57,513		56,797		55,223		53,428		52,218		57,157		50,934
Savings		42,128		39,095		35,224		31,791		28,131		40,620		25,737
Time deposits		17,214		17,058		18,409		18,910		19,056		17,136		19,247

Total interest-bearing deposits		179,012		176,871		176,127		174,205		171,847		177,947		170,335
Borrowed funds
Federal Home Loan Bank borrowings		20,405		20,416		17,465		17,524		18,716		20,410		19,285
Bank notes and senior debt		24,817		22,992		21,653		22,896		22,375		23,910		21,533
Subordinated debt		6,607		7,102		8,287		8,356		8,336		6,854		8,327
Other		5,695		4,432		4,127		4,205		4,206		5,067		4,484

Total borrowed funds		57,524		54,942		51,532		52,981		53,633		56,241		53,629

Total interest-bearing liabilities		236,536		231,813		227,659		227,186		225,480		234,188		223,964
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		77,375		78,050		80,925		78,303		75,775		77,710		76,541
Accrued expenses and other liabilities		10,432		10,081		10,828		11,855		11,390		10,258		10,822
Equity		45,959		46,472		46,774		46,526		46,345		46,214		46,124

Total liabilities and equity	$	370,302	$	366,416	$	366,186	$	363,870	$	358,990	$	368,370	$	357,451

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

Table 4: Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Six months ended
	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency		2.51	%		2.57	%		2.30	%		2.39	%		2.46	%		2.54	%		2.51	%
Non-agency		5.58	%		5.59	%		5.18	%		5.06	%		4.79	%		5.59	%		4.61	%
Commercial mortgage-backed		2.56	%		2.35	%		2.25	%		2.47	%		2.94	%		2.45	%		2.86	%
Asset-backed		2.48	%		2.50	%		2.39	%		2.31	%		2.32	%		2.49	%		2.25	%
U.S. Treasury and government agencies		1.78	%		1.66	%		1.41	%		1.33	%		1.50	%		1.72	%		1.53	%
Other		3.08	%		2.93	%		2.97	%		2.99	%		3.02	%		3.00	%		3.01	%
Total securities available for sale		2.56	%		2.53	%		2.33	%		2.42	%		2.54	%		2.54	%		2.54	%
Securities held to maturity
Residential mortgage-backed		2.82	%		2.79	%		2.52	%		2.71	%		2.81	%		2.80	%		2.92	%
Commercial mortgage-backed		4.30	%		3.50	%		4.12	%		3.51	%		3.61	%		3.89	%		3.57	%
Asset-backed		2.35	%		2.21	%		2.29	%		1.99	%		1.91	%		2.28	%		1.87	%
U.S. Treasury and government agencies		3.10	%		3.07	%		3.25	%		3.81	%		3.79	%		3.09	%		3.80	%
Other		5.28	%		5.34	%		5.35	%		6.58	%		5.40	%		5.31	%		5.38	%
Total securities held to maturity		3.22	%		3.16	%		3.04	%		3.29	%		3.22	%		3.19	%		3.30	%
Total investment securities		2.71	%		2.67	%		2.48	%		2.60	%		2.68	%		2.69	%		2.70	%
Loans
Commercial		3.45	%		3.24	%		3.11	%		3.05	%		3.08	%		3.35	%		3.08	%
Commercial real estate		3.48	%		3.27	%		3.30	%		3.23	%		3.16	%		3.38	%		3.33	%
Equipment lease financing		3.65	%		3.34	%		3.33	%		4.06	%		3.44	%		3.49	%		3.42	%
Consumer		4.52	%		4.47	%		4.35	%		4.32	%		4.28	%		4.49	%		4.28	%
Residential real estate		4.55	%		4.55	%		4.64	%		4.60	%		4.84	%		4.55	%		4.79	%
Total loans		3.82	%		3.67	%		3.59	%		3.57	%		3.56	%		3.75	%		3.58	%
Interest-earning deposits with banks		1.04	%		.81	%		.56	%		.50	%		.51	%		.92	%		.50	%
Other interest-earning assets		3.38	%		3.54	%		3.80	%		3.23	%		3.59	%		3.46	%		3.61	%
Total yield on interest-earning assets		3.35	%		3.22	%		3.09	%		3.07	%		3.10	%		3.29	%		3.13	%
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.30	%		.23	%		.21	%		.19	%		.20	%		.27	%		.21	%
Demand		.12	%		.10	%		.08	%		.08	%		.08	%		.11	%		.07	%
Savings		.45	%		.42	%		.42	%		.40	%		.39	%		.44	%		.39	%
Time deposits		.73	%		.69	%		.66	%		.66	%		.66	%		.71	%		.66	%
Total interest-bearing deposits		.32	%		.28	%		.26	%		.25	%		.24	%		.30	%		.25	%
Borrowed funds
Federal Home Loan Bank borrowings		1.23	%		1.09	%		1.01	%		.86	%		.80	%		1.16	%		.74	%
Bank notes and senior debt		2.00	%		1.85	%		1.55	%		1.50	%		1.62	%		1.93	%		1.64	%
Subordinated debt		3.66	%		3.49	%		3.05	%		3.06	%		3.26	%		3.57	%		3.28	%
Other		1.67	%		1.36	%		1.41	%		1.41	%		1.39	%		1.54	%		1.31	%
Total borrowed funds		1.89	%		1.74	%		1.60	%		1.53	%		1.57	%		1.82	%		1.54	%
Total rate on interest-bearing liabilities		.70	%		.62	%		.56	%		.54	%		.56	%		.66	%		.56	%

Interest rate spread		2.65	%		2.60	%		2.53	%		2.53	%		2.54	%		2.63	%		2.57	%
Impact of noninterest-bearing sources (b)		.19			.17			.16			.15			.16			.18			.16

Net interest margin		2.84	%		2.77	%		2.69	%		2.68	%		2.70	%		2.81	%		2.73	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. To provide more meaningful comparisons of net interest yields for all earning assets, interest income includes the effects of taxable-equivalent adjustments using a statutory federal income tax rate of 35% to increase tax-exempt interest income to a taxable-equivalent basis. This adjustment is not permitted under generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016, were $54 million, $52 million, $50 million, $49 million and $48 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2017 and June 30, 2016 were $106 million and $96 million, respectively.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Table 5: Per Share Related Information (Unaudited)


	Three months ended										Six months ended
In millions, except per share data	June 30 2017		March 31 2017		December 31 2016		September 30 2016		June 30 2016		June 30 2017		June 30 2016
Basic
Net income	$	1,097	$	1,074	$	1,047	$	1,006	$	989	$	2,171	$	1,932
Less:
Net income (loss) attributable to noncontrolling interests		10		17		22		18		23		27		42
Preferred stock dividends (a)		55		63		42		63		42		118		105
Preferred stock discount accretion and redemptions		2		21		1		1		1		23		3

Net income attributable to common shareholders		1,030		973		982		924		923		2,003		1,782
Less:
Dividends and undistributed earnings allocated to nonvested restricted shares		4		6		7		7		6		10		12

Net income attributable to basic common shares	$	1,026	$	967	$	975	$	917	$	917	$	1,993	$	1,770
Basic weighted-average common shares outstanding		484		487		487		490		497		486		499
Basic earnings per common share	$	2.12	$	1.99	$	2.01	$	1.87	$	1.84	$	4.10	$	3.54
Diluted
Net income attributable to basic common shares	$	1,026	$	967	$	975	$	917	$	917	$	1,993	$	1,770
Less: Impact of BlackRock earnings per share dilution		1		4		2		4		3		5		6

Net income attributable to diluted common shares	$	1,025	$	963	$	973	$	913	$	914	$	1,988	$	1,764
Basic weighted-average common shares outstanding		484		487		487		490		497		486		499
Dilutive potential common shares		4		5		7		6		6		5		6

Diluted weighted-average common shares outstanding		488		492		494		496		503		491		505
Diluted earnings per common share	$	2.10	$	1.96	$	1.97	$	1.84	$	1.82	$	4.05	$	3.49

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

Table 6: Details of Loans (Unaudited)


In millions	June 30 2017		March 31 2017		December 31 2016		September 30 2016		June 30 2016
Commercial lending
Commercial
Manufacturing	$	20,533	$	20,054	$	18,891	$	19,813	$	19,665
Retail/wholesale trade		18,101		17,446		16,752		17,211		16,786
Service providers		15,111		14,185		14,707		14,159		14,258
Real estate related (a)		12,179		11,690		11,920		12,045		11,965
Health care		9,541		9,603		9,491		9,148		9,092
Financial services		8,493		7,710		7,241		7,203		7,400
Other industries		24,599		23,077		22,362		21,933		21,396

Total commercial		108,557		103,765		101,364		101,512		100,562

Commercial real estate		29,489		29,435		29,010		29,273		28,840
Equipment lease financing		7,719		7,462		7,581		7,378		7,620

Total commercial lending		145,765		140,662		137,955		138,163		137,022

Consumer lending
Home equity		29,219		29,577		29,949		30,432		30,883
Residential real estate		16,049		15,781		15,598		15,141		14,799
Credit card		5,211		5,112		5,282		5,029		4,896
Other consumer
Automobile		12,488		12,337		12,380		11,898		11,449
Education		4,751		4,974		5,159		5,337		5,482
Other		4,551		4,383		4,510		4,446		4,525

Total consumer lending		72,269		72,164		72,878		72,283		72,034

Total loans	$	218,034	$	212,826	$	210,833	$	210,446	$	209,056

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Allowances for Loan and Lease Losses (Unaudited)

Table 7: Change in Allowance for Loan and Lease Losses


Three months ended - in millions	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016
Beginning balance	$	2,561		$	2,589		$	2,619		$	2,685		$	2,711
Gross charge-offs:
Commercial		(48	)		(53	)		(61	)		(107	)		(86	)
Commercial real estate		(2	)		(1	)		(4	)		(2	)		(10	)
Equipment lease financing		(1	)		(1	)		(1	)		(1	)		(2	)
Home equity		(38	)		(34	)		(28	)		(39	)		(28	)
Residential real estate					(4	)		(3	)		(3	)
Credit card		(46	)		(46	)		(39	)		(39	)		(41	)
Other consumer		(59	)		(59	)		(58	)		(52	)		(46	)

Total gross charge-offs		(194	)		(198	)		(194	)		(243	)		(213	)
Recoveries:
Commercial		20			24			30			26			28
Commercial real estate		8			7			14			12			13
Equipment lease financing		1			1			1			7			1
Home equity		23			20			21			25			17
Residential real estate		4			4			2			2			2
Credit card		6			5			5			5			5
Other consumer		22			19			15			12			13

Total recoveries		84			80			88			89			79
Net (charge-offs) / recoveries:
Commercial		(28	)		(29	)		(31	)		(81	)		(58	)
Commercial real estate		6			6			10			10			3
Equipment lease financing											6			(1	)
Home equity		(15	)		(14	)		(7	)		(14	)		(11	)
Residential real estate		4						(1	)		(1	)		2
Credit card		(40	)		(41	)		(34	)		(34	)		(36	)
Other consumer		(37	)		(40	)		(43	)		(40	)		(33	)

Total net charge-offs		(110	)		(118	)		(106	)		(154	)		(134	)
Provision for credit losses		98			88			67			87			127
Other		11			6						8			2
Net change in allowance for unfunded loan commitments and letters of credit		1			(4	)		9			(7	)		(21	)

Ending balance	$	2,561		$	2,561		$	2,589		$	2,619		$	2,685

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.20	%		.23	%		.20	%		.29	%		.26	%
Allowance for loan and lease losses to total loans		1.17			1.20			1.23			1.24			1.28
Commercial lending net charge-offs	$	(22	)	$	(23	)	$	(21	)	$	(65	)	$	(56	)
Consumer lending net charge-offs		(88	)		(95	)		(85	)		(89	)		(78	)

Total net charge-offs	$	(110	)	$	(118	)	$	(106	)	$	(154	)	$	(134	)
Net charge-offs to average loans
Commercial lending		.06	%		.07	%		.06	%		.19	%		.17	%
Consumer lending		.49	%		.53	%		.47	%		.49	%		.44	%


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Details of Nonperforming Assets (Unaudited)

Table 8: Nonperforming Assets by Type


In millions	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016
Nonperforming loans, including TDRs
Commercial lending
Commercial
Retail/wholesale trade	$	86		$	106		$	87		$	59		$	80
Manufacturing		65			41			31			43			69
Service providers		52			44			40			43			69
Real estate related (a)		26			28			47			68			73
Financial services								1			1			1
Health care		33			23			30			22			26
Other industries		206			158			260			285			288

Total commercial		468			400			496			521			606

Commercial real estate		127			137			143			152			143
Equipment lease financing		4			12			16			18			19

Total commercial lending		599			549			655			691			768

Consumer lending (b)
Home equity		837			900			914			895			926
Residential real estate		439			473			501			502			513
Credit card		5			4			4			4			4
Other consumer
Automobile		66			61			55			41			38
Education and other		11			11			15			13			15

Total consumer lending		1,358			1,449			1,489			1,455			1,496

Total nonperforming loans (c)(d)		1,957			1,998			2,144			2,146			2,264

OREO, foreclosed and other assets		196			214			230			229			251

Total nonperforming assets	$	2,153		$	2,212		$	2,374		$	2,375		$	2,515

Nonperforming loans to total loans		.90	%		.94	%		1.02	%		1.02	%		1.08	%
Nonperforming assets to total loans, OREO, foreclosed and other assets		.99	%		1.04	%		1.12	%		1.13	%		1.20	%
Nonperforming assets to total assets		.58	%		.60	%		.65	%		.64	%		.70	%
Allowance for loan and lease losses to nonperforming loans		131	%		128	%		121	%		122	%		119	%

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

(b)	Excludes most consumer loans and lines of credit, not secured by residential real estate, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.

(c)	Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans.

(d)

The recorded investment of loans collateralized by residential real estate property that are in process of foreclosure was $.4 billion for each period presented, which included $.2 billion of loans that are government insured/guaranteed at June 30, 2017, March 31, 2017 and December 31, 2016 and $.3 billion for each other period presented.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Details of Nonperforming Assets (Unaudited) (Continued)

Table 9: Change in Nonperforming Assets


In millions	April 1, 2017 - June 30, 2017			January 1, 2017 - March 31, 2017			October 1, 2016 - December 31, 2016			July 1, 2016 - September 30, 2016			April 1, 2016 - June 30, 2016
Beginning balance	$	2,212		$	2,374		$	2,375		$	2,515		$	2,552
New nonperforming assets		436			330			518			370			405
Charge-offs and valuation adjustments		(152	)		(150	)		(132	)		(153	)		(158	)
Principal activity, including paydowns and payoffs		(161	)		(228	)		(279	)		(171	)		(149	)
Asset sales and transfers to loans held for sale		(58	)		(42	)		(57	)		(113	)		(76	)
Returned to performing status		(124	)		(72	)		(51	)		(73	)		(59	)

Ending balance	$	2,153		$	2,212		$	2,374		$	2,375		$	2,515

Table 10: Largest Individual Nonperforming Assets at June 30, 2017 (a)


In millions
Ranking	Outstandings		Industry
1		$45	Mining, Quarrying, Oil and Gas Extraction
2		41	Information
3		38	Wholesale Trade
4		26	Mining, Quarrying, Oil and Gas Extraction
5		23	Manufacturing
6		22	Mining, Quarrying, Oil and Gas Extraction
7		15	Mining, Quarrying, Oil and Gas Extraction
8		14	Transportation and Warehousing
9		14	Transportation and Warehousing
10		13	Real Estate, Rental and Leasing

Total		$251

As a percent of total nonperforming assets 12%

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Accruing Loans Past Due (Unaudited)

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


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2017		Mar. 31 2017		Dec. 31 2016		Sept. 30 2016		Jun. 30 2016		Jun. 30 2017			Mar. 31 2017			Dec. 31 2016			Sept. 30 2016			Jun. 30 2016
Commercial	$	42	$	62	$	81	$	64	$	61		.04	%		.06	%		.08	%		.06	%		.06	%
Commercial real estate		4		15		5		26		5		.01	%		.05	%		.02	%		.09	%		.02	%
Equipment lease financing		2		19		29		1		1		.03	%		.25	%		.38	%		.01	%		.01	%
Home equity		61		57		64		55		63		.21	%		.19	%		.21	%		.18	%		.20	%
Residential real estate
Non government insured		78		62		103		60		71		.49	%		.39	%		.66	%		.40	%		.48	%
Government insured		51		60		56		50		57		.32	%		.38	%		.36	%		.33	%		.39	%
Credit card		34		32		33		28		25		.65	%		.63	%		.62	%		.56	%		.51	%
Other consumer
Automobile		44		35		51		38		38		.35	%		.28	%		.41	%		.32	%		.33	%
Education and other
Non government insured		24		22		37		28		33		.26	%		.24	%		.38	%		.29	%		.33	%
Government insured		93		94		103		104		110		1.00	%		1.00	%		1.07	%		1.06	%		1.10	%

Total	$	433	$	458	$	562	$	454	$	464		.20	%		.22	%		.27	%		.22	%		.22	%

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


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2017		Mar. 31 2017		Dec. 31 2016		Sept. 30 2016		Jun. 30 2016		Jun. 30 2017			Mar. 31 2017			Dec. 31 2016			Sept. 30 2016			Jun. 30 2016
Commercial	$	26	$	29	$	20	$	24	$	34		.02	%		.03	%		.02	%		.02	%		.03	%
Commercial real estate		1		6		2		1		11		.00	%		.02	%		.01	%		.00	%		.04	%
Equipment lease financing		4				1		2		4		.05	%					.01	%		.03	%		.05	%
Home equity		24		23		30		27		27		.08	%		.08	%		.10	%		.09	%		.09	%
Residential real estate
Non government insured		14		23		18		20		18		.09	%		.15	%		.12	%		.13	%		.12	%
Government insured		55		54		50		51		47		.34	%		.34	%		.32	%		.34	%		.32	%
Credit card		20		21		21		19		17		.38	%		.41	%		.40	%		.38	%		.35	%
Other consumer
Automobile		12		10		12		11		10		.10	%		.08	%		.10	%		.09	%		.09	%
Education and other
Non government insured		9		11		12		13		11		.10	%		.12	%		.12	%		.13	%		.11	%
Government insured		54		50		66		68		64		.58	%		.53	%		.68	%		.70	%		.64	%

Total	$	219	$	227	$	232	$	236	$	243		.10	%		.11	%		.11	%		.11	%		.12	%

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


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2017		Mar. 31 2017		Dec. 31 2016		Sept. 30 2016		Jun. 30 2016		Jun. 30 2017			Mar. 31 2017			Dec. 31 2016			Sept. 30 2016			Jun. 30 2016
Commercial	$	50	$	40	$	39	$	37	$	38		.05	%		.04	%		.04	%		.04	%		.04	%
Commercial real estate		2										.01	%
Residential real estate
Non government insured		11		10		24		18		23		.07	%		.06	%		.15	%		.12	%		.16	%
Government insured		400		422		476		478		466		2.49	%		2.67	%		3.05	%		3.16	%		3.15	%
Credit card		36		37		37		31		30		.69	%		.72	%		.70	%		.62	%		.61	%
Other consumer
Automobile		4		5		5		4		3		.03	%		.04	%		.04	%		.03	%		.03	%
Education and other
Non government insured		8		9		10		9		10		.09	%		.10	%		.10	%		.09	%		.10	%
Government insured		163		176		191		189		184		1.75	%		1.88	%		1.98	%		1.93	%		1.84	%

Total	$	674	$	699	$	782	$	766	$	754		.31	%		.33	%		.37	%		.36	%		.36	%

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, investment management and cash management products and services to consumer and small business customers within our primary geographic markets. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, Florida, North Carolina, Kentucky, Washington, D.C., Delaware, Virginia, Georgia, Alabama, Missouri, Wisconsin and South Carolina. Deposit products include checking, savings and money market accounts and certificates of deposit. Lending products include residential mortgages, home equity loans and lines of credit, auto loans, credit cards, education loans and personal loans and lines of credit. The residential mortgage loans are directly originated within our branch network and nationwide, and are typically underwritten to government agency and/or third-party standards, and either sold, servicing retained, or held on our balance sheet. Our mortgage servicing operation performs all functions related to servicing residential mortgage loans for investors and for loans we own. Brokerage, investment management and cash management products and services include managed accounts, education accounts, retirement accounts and trust and estate services.

Corporate & Institutional Banking provides lending, treasury management, and capital markets-related products and services to mid-sized and large corporations, government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. Treasury management services include cash and investment management, receivables management, disbursement services, funds transfer services, information reporting and global trade services. Capital markets-related products and services include foreign exchange, derivatives, securities, loan syndications, mergers and acquisitions advisory and equity capital markets advisory related services. We also provide commercial loan servicing and technology solutions for the commercial real estate finance industry. Products and services are generally provided within our primary geographic markets. We offer certain products and services nationally, including expansion into new markets, as well as internationally.

Asset Management Group provides personal wealth management for high net worth and ultra high net worth clients and institutional asset management. Wealth management products and services include investment and retirement planning, customized investment management, private banking, tailored credit solutions, and trust management and administration for individuals and their families. Our Hawthorn unit provides multi-generational family planning including estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative services, asset custody and customized performance reporting to ultra high net worth families. Institutional asset management provides advisory, custody and retirement administration services. The business also offers PNC proprietary mutual funds. Institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments, primarily located in our geographic footprint.

BlackRock, in which we hold an equity investment, is a leading publicly traded investment management firm providing a broad range of investment and risk management services to institutional and retail clients worldwide. Using a diverse platform of active and index investment strategies across asset classes, BlackRock develops investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments. BlackRock also offers an investment and risk management technology platform, risk analytics, advisory and technology services and solutions to a broad base of institutional and wealth management investors. Our equity investment in BlackRock provides us with an additional source of noninterest income and increases our overall revenue diversification. BlackRock is a publicly traded company, and additional information regarding its business is available in its filings with the Securities and Exchange Commission (SEC). At June 30, 2017, our economic interest in BlackRock was 22%.

Table 14: Period End Employees (a)


	June 30 2017		March 31 2017		December 31 2016		September 30 2016		June 30 2016
Full-time employees
Retail Banking		29,056		29,177		29,063		29,022		28,967
Other full-time employees		20,806		20,494		20,297		20,229		20,047

Total full-time employees		49,862		49,671		49,360		49,251		49,014

Part-time employees
Retail Banking		2,543		2,481		2,445		2,564		2,829
Other part-time employees		551		203		201		228		547

Total part-time employees		3,094		2,684		2,646		2,792		3,376

Total		52,956		52,355		52,006		52,043		52,390

(a)	See note (a) on page 11. In the second quarter of 2017, certain personnel were moved from Other into Retail Banking. All prior periods have been revised to reflect this change.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

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


	Three months ended										Six months ended
In millions	June 30 2017		March 31 2017		December 31 2016		September 30 2016		June 30 2016		June 30 2017		June 30 2016
Income
Retail Banking	$	230	$	213	$	228	$	224	$	328	$	443	$	571
Corporate & Institutional Banking		518		484		545		509		457		1,002		855
Asset Management Group		52		47		55		58		48		99		97
Other, including BlackRock (c)		297		330		219		215		156		627		409

Net income	$	1,097	$	1,074	$	1,047	$	1,006	$	989	$	2,171	$	1,932

Revenue

Retail Banking	$	1,784	$	1,724	$	1,775	$	1,816	$	1,858	$	3,508	$	3,613
Corporate & Institutional Banking		1,478		1,363		1,393		1,352		1,344		2,841		2,602
Asset Management Group		290		289		288		294		289		579		569
Other, including BlackRock (c)		508		508		418		367		303		1,016		675

Total revenue	$	4,060	$	3,884	$	3,874	$	3,829	$	3,794	$	7,944	$	7,459

(a)

Effective for the first quarter of 2017, as a result of changes to how we manage our businesses, we realigned our segments and, accordingly, have changed the basis of presentation of our segments, resulting in four reportable business segments: Retail Banking, Corporate & Institutional Banking, Asset Management Group and BlackRock. For purposes of this presentation, we have combined BlackRock with Other. All 2016 prior periods presented were revised to conform to the new segment alignment.

(b)

Our business information is presented based on our internal management reporting practices. Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors. We periodically refine our internal methodologies as management reporting practices are enhanced. In the first quarter of 2017, we made certain adjustments to our internal funds transfer pricing methodology primarily relating to weighted average lives of certain non-maturity deposits. These changes in methodology affected business segment results, primarily adversely impacting net interest income for Corporate & Institutional Banking and Retail Banking, offset by increased net interest income in Other. All 2016 prior periods presented were revised to reflect our change in internal funds transfer pricing methodology.

(c)	Includes earnings and gains or losses related to PNC’s equity interest in BlackRock and residual activities that do not meet the criteria for disclosure as a separate reportable business. We provide additional information on these activities in our Form 10-K and Form 10-Q filings with the SEC.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Table 16: Retail Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Income Statement
Net interest income	$	1,139		$	1,121		$	1,120		$	1,136		$	1,133		$	2,260		$	2,255
Noninterest income		645			603			655			680			725			1,248			1,358

Total revenue		1,784			1,724			1,775			1,816			1,858			3,508			3,613
Provision for credit losses		50			71			87			102			36			121			108
Noninterest expense		1,370			1,315			1,328			1,359			1,305			2,685			2,604

Pretax earnings		364			338			360			355			517			702			901
Income taxes		134			125			132			131			189			259			330

Earnings	$	230		$	213		$	228		$	224		$	328		$	443		$	571

Average Balance Sheet
Loans held for sale	$	730		$	843		$	1,060		$	1,050		$	855		$	786		$	828
Loans
Consumer
Home equity	$	25,413		$	25,601		$	25,768		$	26,005		$	26,308		$	25,506		$	26,526
Automobile		12,220			12,146			11,868			11,353			10,978			12,185			10,882
Education		4,913			5,131			5,289			5,454			5,642			5,021			5,754
Credit cards		5,137			5,121			5,099			4,943			4,788			5,129			4,755
Other		1,760			1,756			1,762			1,781			1,792			1,757			1,807

Total consumer		49,443			49,755			49,786			49,536			49,508			49,598			49,724
Commercial and commercial real estate		10,925			11,006			11,082			11,201			11,562			10,965			11,682
Residential mortgage		11,918			11,688			11,169			10,798			10,486			11,804			10,376

Total loans	$	72,286		$	72,449		$	72,037		$	71,535		$	71,556		$	72,367		$	71,782
Total assets	$	88,671		$	87,109		$	86,133		$	85,789		$	85,348		$	88,559		$	85,780

Deposits
Noninterest-bearing demand	$	29,540		$	29,010		$	29,422		$	28,871		$	28,165		$	29,285		$	27,573
Interest-bearing demand		41,465			40,649			39,170			38,494			38,850			41,059			38,333
Money market		37,523			39,321			41,009			43,155			45,983			38,416			47,658
Savings		38,358			35,326			32,111			29,268			26,128			36,851			23,954
Certificates of deposit		13,304			13,735			14,150			14,601			15,018			13,518			15,169

Total deposits	$	160,190		$	158,041		$	155,862		$	154,389		$	154,144		$	159,129		$	152,687

Performance Ratios
Return on average assets		1.04	%		.99	%		1.05	%		1.04	%		1.54	%		1.01	%		1.34	%
Noninterest income to total revenue		36	%		35	%		37	%		37	%		39	%		36	%		38	%
Efficiency		77	%		76	%		75	%		75	%		70	%		77	%		72	%

(a)	See note (a) on page 11.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Retail Banking (Unaudited) (Continued)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Supplemental Noninterest Income Information
Consumer services	$	277		$	250		$	269		$	267		$	271		$	527		$	525
Brokerage	$	78		$	76		$	73		$	73		$	74		$	154		$	149
Residential mortgage	$	104		$	113		$	142		$	160		$	165		$	217		$	265
Service charges on deposits	$	163		$	154		$	165		$	168		$	155		$	317		$	306

Residential Mortgage Information
Residential mortgage servicing statistics (in billions, except as noted) (a)
Serviced portfolio balance (b)	$	131		$	130		$	125		$	126		$	126
Serviced portfolio acquisitions	$	8		$	8		$	3		$	5		$	6		$	16		$	11
MSR asset value (b)	$	1.2		$	1.3		$	1.2		$	.8		$	.8
MSR capitalization value (in basis points) (b)		95			97			94			65			61
Servicing income: (in millions)
Servicing fees, net (c)	$	44		$	52		$	42		$	45		$	50		$	96		$	105
Mortgage servicing rights valuation, net of economic hedge	$	11		$	12		$	35		$	30		$	35		$	23		$	27
Residential mortgage loan statistics
Loan origination volume (in billions)	$	2.2		$	1.9		$	3.0		$	3.1		$	2.6		$	4.1		$	4.5
Loan sale margin percentage		2.74	%		2.96	%		2.79	%		3.33	%		3.42	%		2.84	%		3.33	%
Percentage of originations represented by:
Purchase volume (d)		61	%		43	%		33	%		41	%		48	%		53	%		44	%
Refinance volume		39	%		57	%		67	%		59	%		52	%		47	%		56	%

Other Information (b)
Customer-related statistics (average)
Non-teller deposit transactions (e)		52	%		52	%		51	%		50	%		48	%		52	%		48	%
Digital consumer customers (f)		62	%		61	%		60	%		59	%		57	%		61	%		57	%
Credit-related statistics
Nonperforming assets	$	1,149		$	1,209		$	1,257		$	1,220		$	1,255
Net charge-offs	$	87		$	100		$	90		$	89		$	74		$	187		$	171
Other statistics
ATMs		8,972			8,976			9,024			9,045			8,993
Branches (g)		2,481			2,508			2,520			2,600			2,601
Universal branches (h)		518			527			526			475			467
Brokerage account client assets (in billions) (i)	$	46		$	46		$	44		$	44		$	44

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

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

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

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

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

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

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

(h)	Included in total branches, represents branches operating under our Universal model.

(i)	Includes cash and money market balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

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


	Three months ended															Six months ended
Dollars in millions	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Income Statement
Net interest income	$	890		$	839		$	864		$	826		$	805		$	1,729		$	1,622
Noninterest income		588			524			529			526			539			1,112			980

Total revenue		1,478			1,363			1,393			1,352			1,344			2,841			2,602
Provision for credit losses (benefit)		87			25			(3	)		8			70			112			172
Noninterest expense		602			584			567			565			557			1,186			1,090

Pretax earnings		789			754			829			779			717			1,543			1,340
Income taxes		271			270			284			270			260			541			485

Earnings	$	518		$	484		$	545		$	509		$	457		$	1,002		$	855

Average Balance Sheet
Loans held for sale	$	716		$	1,116		$	965		$	994		$	801		$	915		$	754
Loans
Commercial	$	96,012		$	92,116		$	90,816		$	89,146		$	88,426		$	94,067		$	87,875
Commercial real estate		27,575			27,091			27,124			26,990			26,630			27,334			26,294
Equipment lease financing		7,602			7,497			7,398			7,463			7,570			7,550			7,495

Total commercial lending		131,189			126,704			125,338			123,599			122,626			128,951			121,664
Consumer		278			331			352			399			445			304			474

Total loans	$	131,467		$	127,035		$	125,690		$	123,998		$	123,071		$	129,255		$	122,138
Total assets	$	148,267		$	142,592		$	142,325		$	141,550		$	140,056		$	145,445		$	138,663

Deposits
Noninterest-bearing demand	$	46,327		$	47,423		$	49,772		$	47,801		$	45,984		$	46,872		$	47,350
Money market		21,321			21,086			22,569			23,068			22,230			21,204			22,264
Interest-bearing demand and other		16,016			15,391			16,190			15,116			13,036			15,706			12,213

Total deposits	$	83,664		$	83,900		$	88,531		$	85,985		$	81,250		$	83,782		$	81,827

Performance Ratios
Return on average assets		1.40	%		1.38	%		1.52	%		1.43	%		1.31	%		1.39	%		1.24	%
Noninterest income to total revenue		40	%		38	%		38	%		39	%		40	%		39	%		38	%
Efficiency		41	%		43	%		41	%		42	%		41	%		42	%		42	%

Other Information
Commercial loan servicing portfolio (in billions) (b) (c)	$	502		$	490		$	487		$	461		$	459
Consolidated revenue from: (d)
Treasury Management (e)	$	372		$	359		$	358		$	347		$	328		$	731		$	643
Capital Markets (e)	$	268		$	247		$	208		$	213		$	235		$	515		$	387
Commercial mortgage banking activities
Commercial mortgage loans held for sale (f)	$	38		$	13		$	50		$	27		$	24		$	51		$	50
Commercial mortgage loan servicing income (g)		55			58			62			62			62			113			124
Commercial mortgage servicing rights valuation, net of economic hedge (h)		19			16			22			1			20			35			21

Total	$	112		$	87		$	134		$	90		$	106		$	199		$	195
Average Loans (by C&IB business)
Corporate Banking	$	54,937		$	53,839		$	52,920		$	51,904		$	51,189		$	54,416		$	50,361
Real Estate		38,318			37,136			37,262			36,721			36,193			37,730			35,989
Business Credit		15,645			14,839			14,741			14,772			14,865			15,244			14,769
Equipment Finance		13,481			12,478			12,096			11,771			11,784			12,982			11,718
Commercial Banking		7,124			7,041			6,914			7,074			7,269			7,057			7,327
Other		1,962			1,702			1,757			1,756			1,771			1,826			1,974

Total average loans	$	131,467		$	127,035		$	125,690		$	123,998		$	123,071		$	129,255		$	122,138
Net carrying amount of commercial mortgage servicing rights (c)	$	618		$	606		$	576		$	473		$	448
Credit-related statistics:
Nonperforming assets (c)	$	586		$	546		$	691		$	712		$	802
Net charge-offs	$	21		$	21		$	17		$	65		$	60		$	42		$	98

(a)	See note (a) on page 11.

(b)	Represents loans serviced for PNC and others.

(c)	Presented as of period end.

(d)	Represents consolidated PNC amounts.

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

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

(g)

Includes net interest income and noninterest income, primarily in corporate services fees, from loan servicing and ancillary services, net of changes in fair value on commercial mortgage servicing rights due to time and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.

(h)	Includes amounts reported in corporate service fees.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

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


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2017			March 31 2017			December 31 2016			September 30 2016			June 30 2016			June 30 2017			June 30 2016
Income Statement
Net interest income	$	73		$	71		$	73		$	74		$	76		$	144		$	153
Noninterest income		217			218			215			220			213			435			416

Total revenue		290			289			288			294			289			579			569
Provision for credit losses (benefit)		(7	)		(2	)		(6	)		(3	)		6			(9	)		3
Noninterest expense		215			217			207			206			206			432			412

Pretax earnings		82			74			87			91			77			156			154
Income taxes		30			27			32			33			29			57			57

Earnings	$	52		$	47		$	55		$	58		$	48		$	99		$	97

Average Balance Sheet
Loans
Consumer	$	5,089		$	5,113		$	5,266		$	5,350		$	5,501		$	5,101		$	5,565
Commercial and commercial real estate		700			728			738			721			769			719			778
Residential mortgage		1,246			1,190			1,137			1,069			1,023			1,218			1,014

Total loans	$	7,035		$	7,031		$	7,141		$	7,140		$	7,293		$	7,038		$	7,357
Total assets	$	7,516		$	7,476		$	7,597		$	7,588		$	7,756		$	7,517		$	7,822

Deposits
Noninterest-bearing demand	$	1,468		$	1,433		$	1,497		$	1,426		$	1,393		$	1,519		$	1,400
Interest-bearing demand		3,704			3,829			3,844			3,845			4,085			3,766			4,183
Money market		3,219			3,500			3,682			3,850			4,229			3,358			4,494
Savings		3,770			3,768			3,113			2,524			2,002			3,769			1,783
Other		230			246			272			275			279			239			276

Total deposits	$	12,391		$	12,776		$	12,408		$	11,920		$	11,988		$	12,651		$	12,136

Performance Ratios
Return on average assets		2.78	%		2.55	%		2.87	%		3.03	%		2.48	%		2.66	%		2.50	%
Noninterest income to total revenue		75	%		75	%		75	%		75	%		74	%		75	%		73	%
Efficiency		74	%		75	%		72	%		70	%		71	%		75	%		72	%

Other Information
Nonperforming assets (b)	$	49		$	51		$	53		$	51		$	48
Net charge-offs	$	1		$	1		$	2		$	1		$	2		$	2		$	6

Client Assets Under Administration (in billions) (b) (c)
Discretionary client assets under management	$	141		$	141		$	137		$	138		$	135
Nondiscretionary client assets under administration		125			123			120			119			117

Total	$	266		$	264		$	257		$	257		$	252

Discretionary client assets under management
Personal	$	89		$	87		$	85		$	85		$	84
Institutional		52			54			52			53			51

Total	$	141		$	141		$	137		$	138		$	135

Equity	$	72		$	71		$	68		$	67		$	66
Fixed income		49			50			49			49			47
Liquidity/Other		20			20			20			22			22

Total	$	141		$	141		$	137		$	138		$	135

(a)	See note (a) on page 11.

(b)	As of period end.

(c)	Excludes brokerage account client assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Glossary of Terms

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

Basel III common equity Tier 1 capital - Common stock plus related surplus, net of treasury stock, plus retained earnings, plus accumulated other comprehensive income for securities currently and previously held as available for sale, plus accumulated other comprehensive income for pension and other postretirement benefit plans, less goodwill, net of associated deferred tax liabilities, less other disallowed intangibles, net of deferred tax liabilities and plus/less other adjustments.

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

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

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

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

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

Charge-off - Process of removing a loan or portion of a loan from our balance sheet because it is considered uncollectible. We also record a charge-off when a loan is transferred from portfolio holdings to held for sale by reducing the loan carrying amount to the fair value of the loan, if fair value is less than carrying amount.

Combined loan-to-value ratio (CLTV) - This is the aggregate principal balance(s) of the mortgages on a property divided by its appraised value or purchase price.

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

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

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

Discretionary client assets under management - Assets over which we have sole or shared investment authority for our customers/clients. We do not include these assets on our Consolidated Balance Sheet.

Duration of equity - An estimate of the rate sensitivity of our economic value of equity. A negative duration of equity is associated with asset sensitivity (i.e., positioned for rising interest rates), while a positive value implies liability sensitivity (i.e., positioned for declining interest rates). For example, if the duration of equity is -1.5 years, the economic value of equity increases by 1.5% for each 100 basis point increase in interest rates.

Earning assets - Assets that generate income, which include: interest-earning deposits with banks; loans held for sale; loans; investment securities; and certain other assets.

Effective duration - A measurement, expressed in years, that, when multiplied by a change in interest rates, would approximate the percentage change in value of on- and off- balance sheet positions.

Efficiency - Noninterest expense divided by total revenue.

Fair value - The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

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

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

Futures and forward contracts - Contracts in which the buyer agrees to purchase and the seller agrees to deliver a specific financial instrument at a predetermined price or yield. May be settled either in cash or by delivery of the underlying financial instrument.

GAAP - Accounting principles generally accepted in the United States of America.

Impaired loans - Loans are determined to be impaired when, based on current information and events, it is probable that all contractually required payments will not be collected. Impaired loans include commercial nonperforming loans and consumer and commercial TDRs, regardless of nonperforming status. Excluded from impaired loans are nonperforming leases, loans held for sale, loans accounted for under the fair value option, smaller balance homogenous type loans and purchased impaired loans.

Leverage ratio - Tier 1 capital divided by average quarterly adjusted total assets.

LIBOR - Acronym for London InterBank Offered Rate. LIBOR is the average interest rate charged when banks in the London wholesale money market (or interbank market) borrow unsecured funds from each other. LIBOR rates are used as a benchmark for interest rates on a global basis. Our product set includes loans priced using LIBOR as a benchmark.

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

Loss given default (LGD) - An estimate of loss, net of recovery based on collateral type, collateral value, loan exposure, and other factors. Each loan has its own LGD. The LGD risk rating measures the percentage of exposure of a specific credit obligation that we expect to lose if default occurs. LGD is net of recovery, through any means, including but not limited to the liquidation of collateral or deficiency judgments rendered from foreclosure or bankruptcy proceedings.

Nonaccrual loans - Loans for which we do not accrue interest income. Nonaccrual loans include nonperforming loans, in addition to loans accounted for under the fair value option and loans accounted for as held for sale for which full collection of contractual principal and/or interest is not probable.

Nondiscretionary client assets under administration - Assets we hold for our customers/clients in a nondiscretionary, custodial capacity. We do not include these assets on our Consolidated Balance Sheet.

Nonperforming assets - Nonperforming assets include nonperforming loans and OREO, foreclosed and other assets, but exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans accounted for at amortized cost for which we do not accrue interest income. Nonperforming loans include loans to commercial, commercial real estate, equipment lease financing, home equity, residential real estate, credit card and other consumer customers as well as TDRs which have not returned to performing status. Nonperforming loans exclude certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. Nonperforming loans exclude purchased impaired loans as we are currently accreting interest income over the expected life of the loans.

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

Operating leverage - The period to period dollar or percentage change in total revenue (GAAP basis) less the dollar or percentage change in noninterest expense. A positive variance indicates that revenue growth exceeded expense growth (i.e., positive operating leverage) while a negative variance implies expense growth exceeded revenue growth (i.e., negative operating leverage).


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Options - Contracts that grant the purchaser, for a premium payment, the right, but not the obligation, to either purchase or sell the associated financial instrument at a set price during a specified period or at a specified date in the future.

Other real estate owned (OREO), foreclosed and other assets - Assets taken in settlement of troubled loans primarily through deed-in-lieu of foreclosure or foreclosure. Foreclosed and other assets include real and personal property, equity interests in corporations, partnerships, and limited liability companies. Excludes certain assets that have a government-guarantee which are classified as other receivables.

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

Recovery - Cash proceeds received on a loan that we had previously charged off. We credit the amount received to the allowance for loan and lease losses.

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

Servicing rights - An intangible asset or liability created by an obligation to service assets for others. Typical servicing rights include the right to receive a fee for collecting and forwarding payments on loans and related taxes and insurance premiums held in escrow.

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

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

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

Yield curve - A graph showing the relationship between the yields on financial instruments or market indices of the same credit quality with different maturities. For example, a “normal” or “positive” yield curve exists when long-term bonds have higher yields than short-term bonds. A “flat” yield curve exists when yields are the same for short-term and long-term bonds. A “steep” yield curve exists when yields on long-term bonds are significantly higher than on short-term bonds. An “inverted” or “negative” yield curve exists when short-term bonds have higher yields than long-term bonds.

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