PNC Financial Services Group 10-Q Filing for Q3 2024

TL;DR

PNC's Q3 2024 10-Q is in. Check financials.

AI Summary

PNC Financial Services Group, Inc. filed its 10-Q for the period ending September 30, 2024. The filing covers the third quarter of 2024, detailing financial performance and operational updates. Key financial data and business segments are presented for the reporting period and comparative prior periods.

Why It Matters

This filing provides investors and analysts with a detailed look at PNC's financial health and performance during the third quarter of 2024, influencing investment decisions and market sentiment.

Risk Assessment

Risk Level: medium — As a major financial institution, PNC is subject to various market, credit, and regulatory risks inherent in the banking industry.

Key Numbers

• 2024 Q3 — Reporting Period (Financials for the third quarter of 2024 are detailed.)
• 2023-09-30 — Prior Period End (Comparative financial data from the prior year's third quarter.)

Key Players & Entities

• PNC FINANCIAL SERVICES GROUP, INC. (company) — Filer of the 10-Q
• 20240930 (date) — Period of report
• 20241101 (date) — Filing date
• PITTSBURGH (location) — City of business and mail address

FAQ

Key Financial Figures

• $5.00 — ch Registered Common Stock, par value $5.00 PNC New York Stock Exchange Indicate
• $5 — hares of the registrant's common stock ($5 par value) outstanding. T HE PNC F IN
• $16.0 billion — red portfolio represented approximately $16.0 billion in total commitments, including approxi
• $9.0 billion — al commitments, including approximately $9.0 billion of funded loans, at the time of acquisi
• $325 m — 2024 personnel expense by approximately $325 million, on a pre-tax basis. PNC incurred
• $150 million — pre-tax basis. PNC incurred expenses of $150 million in the fourth quarter of 2023 in connec
• $515 million — sult, PNC incurred a pre-tax expense of $515 million during the fourth quarter of 2023. In t
• $130 million — curred an additional pre-tax expense of $130 million related to the increase in the FDIC's e
• $754 million — conversion event resulted in a gain of $754 million related to the Visa Class C common shar
• $116 million — tive fair value adjustments of negative $116 million and a $120 million expense related to a
• $120 million — ustments of negative $116 million and a $120 million expense related to a PNC Foundation con
• $3.8 b — vestment securities for net proceeds of $3.8 billion, resulting in a loss of $497 mill
• $497 million — of $3.8 billion, resulting in a loss of $497 million. PNC redeployed the full proceeds from
• $141 million — ome and pre-tax noninterest expense was $141 million and $120 million, respectively. Hurri
• $120 m — oninterest expense was $141 million and $120 million, respectively. Hurricanes Helen

Filing Documents

• pnc-20240930.htm (10-Q) — 7413KB
• exhibit1033.htm (EX-10.33) — 28KB
• pnc-9302024xex22.htm (EX-22) — 3KB
• pnc-9302024xex311.htm (EX-31.1) — 10KB
• pnc-9302024xex312.htm (EX-31.2) — 10KB
• pnc-9302024xex321.htm (EX-32.1) — 5KB
• pnc-9302024xex322.htm (EX-32.2) — 5KB
• exhibit1033001.jpg (GRAPHIC) — 191KB
• exhibit1033002.jpg (GRAPHIC) — 236KB
• exhibit1033003.jpg (GRAPHIC) — 271KB
• exhibit1033004.jpg (GRAPHIC) — 257KB
• exhibit1033005.jpg (GRAPHIC) — 224KB
• exhibit1033006.jpg (GRAPHIC) — 198KB
• exhibit1033007.jpg (GRAPHIC) — 266KB
• exhibit1033008.jpg (GRAPHIC) — 236KB
• exhibit1033009.jpg (GRAPHIC) — 117KB
• exhibit1033010.jpg (GRAPHIC) — 24KB
• pnc-20240930_g1.jpg (GRAPHIC) — 85KB
• 0000713676-24-000081.txt ( ) — 36284KB
• pnc-20240930.xsd (EX-101.SCH) — 103KB
• pnc-20240930_cal.xml (EX-101.CAL) — 177KB
• pnc-20240930_def.xml (EX-101.DEF) — 765KB
• pnc-20240930_lab.xml (EX-101.LAB) — 1235KB
• pnc-20240930_pre.xml (EX-101.PRE) — 1034KB
• pnc-20240930_htm.xml (XML) — 9391KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements (Unaudited)

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)

Notes To Consolidated Financial Statements (Unaudited) Note 1 Accounting Policies 48 Note 2 Investment Securities 49 Note 3 Loans and Related Allowance for Credit Losses 52 Note 4 Loan Sale and Servicing Activities and Variable Interest Entities 66 Note 5 Goodwill and Mortgage Servicing Rights 69 Note 6 Leases 70 Note 7 Borrowed Funds 71 Note 8 Commitments 72 Note 9 Total Equity and Other Comprehensive Income 73 Note 10 Earnings Per Share 76 Note 11 Fair Value 77 Note 12 Financial Derivatives 86 Note 13 Legal Proceedings 92 Note 14 Segment Reporting 93 Note 15 Fee-based Revenue from Contracts with Customers 97 Note 16 Subsequent Events 98 Statistical Information (Unaudited) Average Consolidated Balance Sheet And Net Interest Analysis 100 Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP) 102 Glossary 102 Defined Terms 102 Acronyms 102

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A). Financial Review 1 Executive Summary 1 Consolidated Income Statement Review 7 Consolidated Balance Sheet Review 10 Business Segments Review 14 Risk Management 21 Recent Regulatory Developments 38 Critical Accounting Estimates and Judgments 38 Internal Controls and Disclosure Controls and Procedures 40 Cautionary Statement Regarding Forward-Looking Information 41

Quantitative and Qualitative Disclosures about Market Risk. 21-38, 49-50,

Item 3. Quantitative and Qualitative Disclosures about Market Risk. 21-38, 49-50, 83-89

Controls and Procedures. 40

Item 4. Controls and Procedures. 40

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 102

Risk Factors

Item 1A. Risk Factors. 102

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 102

Other Information

Item 5. Other Information 103

Exhibits

Item 6. Exhibits. 104 Exhibit Index 104 Corporate Information 104 Signature 106 MD&A TABLE REFERENCE Table Description Page 1 Summary of Operations, Per Common Share Data and Performance Ratios 3 2 Balance Sheet Highlights and Other Selected Ratios 3 3 Summarized Average Balances and Net Interest Income 7 4 Noninterest Income 8 5 Noninterest Expense 9 6 Provision for Credit Losses 10 7 Summarized Balance Sheet Data 10 8 Loans 11 9 Investment Securities 12 10 Weighted-Average Expected Maturities of Mortgage and Asset-Backed Debt Securities 12 11 Details of Funding Sources 13 12 Retail Banking Table 15 13 Corporate & Institutional Banking Table 17 14 Asset Management Group Table 20 15 Details of Loans 22 16 Commercial and Industrial Loans by Industry 22 17 Commercial Real Estate Loans by Geography and Property Type 23 18 Residential Real Estate Loan Statistics 25 19 Home Equity Loan Statistics 26 20 Auto Loan Statistics 26 21 Nonperforming Assets by Type 27 22 Change in Nonperforming Assets 27 23 Accruing Loans Past Due 28 24 Allowance for Credit Losses by Loan Class 29 25 Loan Charge-Offs and Recoveries 30 26 Senior and Subordinated Debt 31 27 Primary Contingent Liquidity Sources 31 28 Parent Company Notes Issued 32 29 Credit Ratings and Outlook 33 30 Basel III Capital 34 31 Net Interest Income Sensitivity Analysis 35 32 Economic Value of Equity Sensitivity Analysis 36 33 Equity Investments Summary 37 34 Key Macroeconomic Variables in CECL Weighted-Average Scenarios 39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE Table Description Page 35 Investment Securities Summary 49 36 Gross Unrealized Loss and Fair Value of Securities Available for Sale Without an Allowance for Credit Losses 50 37 Gains (Losses) on Sales of Securities Available for Sale 50 38 Contractual Maturity of Debt Securities 51 39 Fair Value of Securities Pledged and Accepted as Collateral 51 40 Analysis of Loan Portfolio 53 41 Nonperforming Assets 54 42 Commercial Credit Quality Indicators 55 43 Credit Quality Indicators for Residential Real Estate and Home Equity Loan Classes 56 44 Credit Quality Indicators for Automobile, Credit Card, Education and Other Consumer Loan Classes 58 45 Loan Modifications Granted to Borrowers Experiencing Financial Difficulty 60 46 Financial Effect of FDMs 62 47 Payment Performance of FDMs Modified in the Last 12 Months 64 48 Payment Performance of FDMs 64 49 Subsequently Defaulted FDMs 65 50 Rollforward of Allowance for Credit Losses 66 51 Loan Sale and Servicing Activities 67 52 Principal Balance, Delinquent Loans and Net Charge-offs Related to Serviced Loans For Others 68 53 Non-Consolidated VIEs 68 54 Mortgage Servicing Rights 69 55 Commercial Mortgage Servicing Rights – Key Valuation Assumptions 70 56 Residential Mortgage Servicing Rights – Key Valuation Assumptions 70 57 Lessor Income 71 58 Borrowed Funds 71 59 FHLB Borrowings, Senior Debt and Subordinated Debt 71 60 Commitments to Extend Credit and Other Commitments 72 61 Rollforward of Total Equity 73 62 Other Comprehensive Income (Loss) 74 63 Accumulated Other Comprehensive Income (Loss) Components 74 64 Dividends Per Share 75 65 Basic and Diluted Earnings Per Common Share 76 66 Fair Value Measurements – Recurring Basis Summary 77 67 Reconciliation of Level 3 Assets and Liabilities 78 68 Fair Value Measurements – Recurring Quantitative Information 82 69 Fair Val

Selected Financial Data

Selected Financial Data The following tables include selected financial data, which should be reviewed in conjunction with the Consolidated Financial Statements and Notes included in Item 1 of this Report as well as the other disclosures in this Report concerning our historical financial performance, our future prospects and the risks associated with our business and financial performance. Table 1: Summary of Operations, Per Common Share Data and Performance Ratios Dollars in millions, except per share data Unaudited Three months ended Nine months ended September 30 June 30 September 30 September 30 September 30 2024 2024 2023 2024 2023 Summary of Operations (a) Net interest income $ 3,410 $ 3,302 $ 3,418 $ 9,976 $ 10,513 Noninterest income 2,022 2,109 1,815 6,012 5,616 Total revenue 5,432 5,411 5,233 15,988 16,129 Provision for credit losses 243 235 129 633 510 Noninterest expense 3,327 3,357 3,245 10,018 9,938 Income before income taxes and noncontrolling interests 1,862 1,819 1,859 5,337 5,681 Income taxes 357 342 289 1,011 917 Net income $ 1,505 $ 1,477 $ 1,570 $ 4,326 $ 4,764 Net income attributable to common shareholders $ 1,406 $ 1,362 $ 1,448 $ 4,015 $ 4,409 Per Common Share Basic $ 3.50 $ 3.39 $ 3.60 $ 9.99 $ 10.95 Diluted $ 3.49 $ 3.39 $ 3.60 $ 9.98 $ 10.94 Book value per common share $ 124.56 $ 116.70 $ 105.98 Performance Ratios Net interest margin (b) 2.64 % 2.60 % 2.71 % 2.60 % 2.78 % Noninterest income to total revenue 37 % 39 % 35 % 38 % 35 % Efficiency 61 % 62 % 62 % 63 % 62 % Return on: Average common shareholders' equity 11.72 % 12.16 % 13.65 % 11.76 % 14.23 % Average assets 1.05 % 1.05 % 1.12 % 1.02 % 1.14 % (a) The Executive Summary and Consolidated Income Statement Review portions of this Financial Review section provide information regarding items impacting the comparability of the periods presented. (b) See explanation and reconciliation of this non-GAAP measure in the Average Consolidated Balance Sheet and