|
|
|
☒
|
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
|
|
Pennsylvania
|
|
25-1435979
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
Large accelerated filer
|
|
☒
|
|
Accelerated filer
|
|
☐
|
Non-accelerated filer
|
|
☐
|
|
Smaller reporting company
|
|
☐
|
|
|
|
|
Emerging growth company
|
|
☐
|
|
|
Pages
|
PART I – FINANCIAL INFORMATION
|
|
Item 1. Financial Statements (Unaudited).
|
|
|
|
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).
|
|
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
|
21-38, 63-72 and 75-80
|
Item 4. Controls and Procedures.
|
|
|
|
|
|
|
MD&A TABLE REFERENCE
|
|
|
Table
|
Description
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
||
22
|
||
23
|
||
24
|
||
25
|
||
26
|
||
27
|
||
28
|
||
29
|
||
30
|
||
31
|
||
32
|
||
33
|
||
34
|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE
|
|
|
Table
|
Description
|
Page
|
35
|
||
36
|
||
37
|
||
38
|
||
39
|
||
40
|
||
41
|
||
42
|
||
43
|
||
44
|
||
45
|
||
46
|
||
47
|
||
48
|
||
49
|
||
50
|
||
51
|
||
52
|
||
53
|
||
54
|
||
55
|
||
56
|
||
57
|
||
58
|
||
59
|
||
60
|
||
61
|
||
62
|
||
63
|
||
64
|
||
65
|
||
66
|
||
67
|
||
68
|
||
69
|
||
70
|
||
71
|
||
72
|
||
73
|
||
74
|
||
75
|
||
76
|
Dollars in millions, except per share data
Unaudited
|
Three months ended June 30
|
Six months ended June 30
|
|
||||||||||
2018
|
2017
|
2018
|
2017
|
|
|||||||||
Financial Results (a)
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
2,413
|
|
$
|
2,258
|
|
$
|
4,774
|
|
$
|
4,418
|
|
|
Noninterest income
|
1,911
|
|
1,802
|
|
3,661
|
|
3,526
|
|
|
||||
Total revenue
|
4,324
|
|
4,060
|
|
8,435
|
|
7,944
|
|
|
||||
Provision for credit losses
|
80
|
|
98
|
|
172
|
|
186
|
|
|
||||
Noninterest expense
|
2,584
|
|
2,479
|
|
5,111
|
|
4,881
|
|
|
||||
Income before income taxes and noncontrolling interests
|
$
|
1,660
|
|
$
|
1,483
|
|
$
|
3,152
|
|
$
|
2,877
|
|
|
Net income
|
$
|
1,356
|
|
$
|
1,097
|
|
$
|
2,595
|
|
$
|
2,171
|
|
|
Less:
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests
|
10
|
|
10
|
|
20
|
|
27
|
|
|
||||
Preferred stock dividends
|
55
|
|
55
|
|
118
|
|
118
|
|
|
||||
Preferred stock discount accretion and redemptions
|
1
|
|
2
|
|
2
|
|
23
|
|
|
||||
Net income attributable to common shareholders
|
1,290
|
|
1,030
|
|
$
|
2,455
|
|
$
|
2,003
|
|
|
||
Less:
|
|
|
|
|
|
||||||||
Dividends and undistributed earnings allocated to nonvested restricted shares
|
5
|
|
4
|
|
10
|
|
10
|
|
|
||||
Impact of BlackRock earnings per share dilution
|
3
|
|
1
|
|
5
|
|
5
|
|
|
||||
Net income attributable to diluted common shares
|
$
|
1,282
|
|
$
|
1,025
|
|
$
|
2,440
|
|
$
|
1,988
|
|
|
Diluted earnings per common share
|
$
|
2.72
|
|
$
|
2.10
|
|
$
|
5.15
|
|
$
|
4.05
|
|
|
Cash dividends declared per common share
|
$
|
.75
|
|
$
|
.55
|
|
$
|
1.50
|
|
$
|
1.10
|
|
|
Effective tax rate (b)
|
18.3
|
%
|
26.0
|
%
|
17.7
|
%
|
24.5
|
%
|
|
||||
Performance Ratios
|
|
|
|
|
|
||||||||
Net interest margin (c)
|
2.96
|
%
|
2.84
|
%
|
2.94
|
%
|
2.81
|
%
|
|
||||
Noninterest income to total revenue
|
44
|
%
|
44
|
%
|
43
|
%
|
44
|
%
|
|
||||
Efficiency
|
60
|
%
|
61
|
%
|
61
|
%
|
61
|
%
|
|
||||
Return on:
|
|
|
|
|
|
||||||||
Average common shareholders’ equity
|
12.13
|
%
|
9.88
|
%
|
11.59
|
%
|
9.69
|
%
|
|
||||
Average assets
|
1.45
|
%
|
1.19
|
%
|
1.39
|
%
|
1.19
|
%
|
|
(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)
|
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. Amounts for the 2018 periods reflected the change in the statutory federal income tax rate from 35% to 21%, effective as of January 1, 2018, as a result of the new federal tax legislation.
|
(c)
|
Calculated as annualized taxable-equivalent net interest income divided by average earning assets. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP in the Consolidated Income Statement. For additional information, see Reconciliation of Taxable-Equivalent Net Interest Income (Non-GAAP) in the Statistical Information (Unaudited) section in Item 1 of this Report.
|
Unaudited
|
June 30
2018 |
|
December 31
2017 |
|
June 30
2017 |
|
|
|||
Balance Sheet Data
(dollars in millions, except per share data)
|
|
|
|
|
||||||
Assets
|
$
|
380,711
|
|
$
|
380,768
|
|
$
|
372,190
|
|
|
Loans
|
$
|
222,855
|
|
$
|
220,458
|
|
$
|
218,034
|
|
|
Allowance for loan and lease losses
|
$
|
2,581
|
|
$
|
2,611
|
|
$
|
2,561
|
|
|
Interest-earning deposits with banks (b)
|
$
|
21,972
|
|
$
|
28,595
|
|
$
|
22,482
|
|
|
Investment securities
|
$
|
80,125
|
|
$
|
76,131
|
|
$
|
76,431
|
|
|
Loans held for sale
|
$
|
1,325
|
|
$
|
2,655
|
|
$
|
2,030
|
|
|
Equity investments (c)
|
$
|
12,430
|
|
$
|
11,392
|
|
$
|
10,819
|
|
|
Mortgage servicing rights
|
$
|
2,045
|
|
$
|
1,832
|
|
$
|
1,867
|
|
|
Goodwill
|
$
|
9,218
|
|
$
|
9,173
|
|
$
|
9,163
|
|
|
Other assets
|
$
|
27,897
|
|
$
|
27,894
|
|
$
|
28,886
|
|
|
Noninterest-bearing deposits
|
$
|
79,047
|
|
$
|
79,864
|
|
$
|
79,550
|
|
|
Interest-bearing deposits
|
$
|
185,838
|
|
$
|
185,189
|
|
$
|
179,626
|
|
|
Total deposits
|
$
|
264,885
|
|
$
|
265,053
|
|
$
|
259,176
|
|
|
Borrowed funds
|
$
|
59,222
|
|
$
|
59,088
|
|
$
|
56,406
|
|
|
Total shareholders’ equity
|
$
|
46,904
|
|
$
|
47,513
|
|
$
|
46,084
|
|
|
Common shareholders’ equity
|
$
|
42,917
|
|
$
|
43,530
|
|
$
|
42,103
|
|
|
Accumulated other comprehensive income (loss)
|
$
|
(940
|
)
|
$
|
(148
|
)
|
$
|
(98
|
)
|
|
Book value per common share
|
$
|
92.26
|
|
$
|
91.94
|
|
$
|
87.78
|
|
|
Period-end common shares outstanding (in millions)
|
465
|
|
473
|
|
480
|
|
|
|||
Loans to deposits
|
84
|
%
|
83
|
%
|
84
|
%
|
|
|||
Client Assets
(in billions)
|
|
|
|
|
||||||
Discretionary client assets under management
|
$
|
149
|
|
$
|
151
|
|
$
|
141
|
|
|
Nondiscretionary client assets under administration
|
130
|
|
131
|
|
125
|
|
|
|||
Total client assets under administration
|
279
|
|
282
|
|
266
|
|
|
|||
Brokerage account client assets
|
49
|
|
49
|
|
46
|
|
|
|||
Total client assets
|
$
|
328
|
|
$
|
331
|
|
$
|
312
|
|
|
Capital Ratios
|
|
|
|
|
||||||
Basel III (d) (e) (f)
|
|
|
|
|
||||||
Common equity Tier 1
|
9.5
|
%
|
N/A
|
|
N/A
|
|
|
|||
Tier 1 risk-based
|
10.7
|
%
|
N/A
|
|
N/A
|
|
|
|||
Total capital risk-based
|
12.6
|
%
|
N/A
|
|
N/A
|
|
|
|||
Leverage
|
9.4
|
%
|
N/A
|
|
N/A
|
|
|
|||
Supplementary leverage
|
7.8
|
%
|
N/A
|
|
N/A
|
|
|
|||
Fully Phased-In Basel III (Non-GAAP) (f) (g)
|
|
|
|
|
||||||
Common equity Tier 1
|
N/A
|
|
9.8
|
%
|
9.8
|
%
|
|
|||
2017 Transitional Basel III (d) (f)
|
|
|
|
|
||||||
Common equity Tier 1
|
N/A
|
|
10.4
|
%
|
10.3
|
%
|
|
|||
Tier 1 risk-based
|
N/A
|
|
11.6
|
%
|
11.6
|
%
|
|
|||
Total capital risk-based
|
N/A
|
|
13.7
|
%
|
13.7
|
%
|
|
|||
Leverage
|
N/A
|
|
9.9
|
%
|
9.9
|
%
|
|
|||
Common shareholders’ equity to total assets
|
11.3
|
%
|
11.4
|
%
|
11.3
|
%
|
|
|||
Asset Quality
|
|
|
|
|
||||||
Nonperforming loans to total loans
|
.77
|
%
|
.85
|
%
|
.90
|
%
|
|
|||
Nonperforming assets to total loans, OREO, foreclosed and other assets
|
.83
|
%
|
.92
|
%
|
.99
|
%
|
|
|||
Nonperforming assets to total assets
|
.49
|
%
|
.53
|
%
|
.58
|
%
|
|
|||
Net charge-offs to average loans (for the three months ended) (annualized)
|
.20
|
%
|
.22
|
%
|
.20
|
%
|
|
|||
Allowance for loan and lease losses to total loans
|
1.16
|
%
|
1.18
|
%
|
1.17
|
%
|
|
|||
Allowance for loan and lease losses to total nonperforming loans
|
150
|
%
|
140
|
%
|
131
|
%
|
|
|||
Accruing loans past due 90 days or more (in millions)
|
$
|
586
|
|
$
|
737
|
|
$
|
674
|
|
|
(a)
|
The Executive Summary and Consolidated Balance Sheet Review portions of this Financial Review provide information regarding items impacting the comparability of the periods presented.
|
(b)
|
Amounts include balances held with the Federal Reserve Bank of Cleveland (Federal Reserve Bank) of $21.6 billion, $28.3 billion and $22.1 billion as of
June 30, 2018
,
December 31, 2017
and
June 30, 2017
, respectively.
|
(c)
|
Amounts include our equity interest in BlackRock. On January 1, 2018, $.6 billion of trading and available for sale securities, primarily money market funds, were reclassified to Equity investments in accordance with the adoption of Accounting Standards Update (ASU) 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in the Notes To Consolidated Financial Statements in our first quarter 2018 Quarterly Report on Form 10-Q (First Quarter 2018 Form 10-Q) for additional detail on this adoption.
|
(d)
|
All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented and calculated based on the standardized approach.
|
(e)
|
The 2018 Basel III ratios for Common equity Tier 1 capital, Tier 1 risk-based capital, Leverage and Supplementary leverage reflect the full phase-in of all Basel III adjustments to these metrics applicable to PNC. The 2018 Basel III Total risk-based capital ratio includes $80 million of nonqualifying trust preferred capital securities that are subject to a phase-out period that runs through 2021.
|
(f)
|
See Basel III Capital discussion in the Capital Management portion of the Risk Management section of this Financial Review and the capital discussion in the Banking Regulation and Supervision section of Item 1 Business and Item 1A Risk Factors in our 2017 Form 10-K. See also the Transitional Basel III and Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios (Non-GAAP) – June 30, 2017 table in the Statistical Information (Unaudited) section of this Report for a reconciliation of the June 30, 2017 ratios.
|
(g)
|
2017 Fully Phased-in Basel III results are presented as Pro forma estimates.
|
•
|
Expanding our leading banking franchise to new markets and digital platforms;
|
•
|
Deepening customer relationships by delivering a superior banking experience and financial solutions; and
|
•
|
Leveraging technology to innovate and enhance products, services, security and processes.
|
•
|
Total revenue increased
$264 million
, or
7%
, to
$4.3 billion
.
|
•
|
Net interest income increased
$155 million
, or
7%
, to
$2.4 billion
.
|
•
|
Net interest margin increased to
2.96%
compared to
2.84%
for the
second
quarter of
2017
.
|
•
|
Noninterest income increased
$109 million
, or
6%
, to
$1.9 billion
.
|
•
|
Provision for credit losses was
$80 million
compared to
$98 million
for the
second
quarter of
2017
.
|
•
|
Noninterest expense increased
$105 million
, or
4%
, to
$2.6 billion
.
|
•
|
Income tax expense decreased to
$304 million
compared to
$386 million
for the
second
quarter of
2017
.
|
•
|
Federal tax reform legislation, the Tax Cuts and Jobs Act, lowered the statutory federal income tax rate for corporations to 21% from 35% effective January 1, 2018.
|
•
|
Total loans increased
$2.4 billion
, or
1%
, to
$222.9 billion
.
|
•
|
Total commercial lending grew
$2.2 billion
, or
1%
.
|
•
|
Total consumer lending increased
$.2 billion
.
|
•
|
Total deposits declined
$.2 billion
to $
264.9 billion
.
|
•
|
Investment securities increased
$4.0 billion
, or
5%
, to
$80.1 billion
.
|
•
|
Interest-earning deposits with banks decreased $6.6 billion, or 23%, to $22.0 billion.
|
•
|
At
June 30, 2018
compared to
December 31, 2017
:
|
•
|
Nonperforming assets decreased
$181 million
, or
9%
, to
$1.9 billion
.
|
•
|
Overall loan delinquencies decreased $159 million, or 10%.
|
•
|
Net charge-offs were $
109 million
in the
second
quarter of 2018 compared to $
110 million
for the
second
quarter of 2017.
|
•
|
The Basel III common equity Tier 1 capital ratio, which includes the full phase-in of all Basel III adjustments and became effective for PNC as of January 1, 2018, was
9.5%
at
June 30, 2018
, compared with 9.8% at December 31, 2017, calculated on the same basis.
|
•
|
In the
second
quarter of 2018, we returned $1.2 billion of capital to shareholders through repurchases of 5.7 million common shares for $.8 billion and dividends on common shares of $.4 billion.
|
•
|
In June 2018, we announced share repurchase programs of up to $2.0 billion for the four-quarter period beginning in the third quarter of 2018, including repurchases of up to $.3 billion related to stock issuances under employee benefit plans.
|
•
|
In July 2018, our board of directors raised the quarterly cash dividend on common stock to 95 cents per share, an increase of 20 cents per share, or 27%, effective with the August dividend.
|
•
|
Modest loan growth;
|
•
|
Net interest income to increase by low single digits, on a percentage basis;
|
•
|
Fee income to increase by low single digits, on a percentage basis. Fee income consists of asset management, consumer services, corporate services, residential mortgage and service charges on deposits;
|
•
|
Provision for credit losses to be between $100 million and $150 million; and
|
•
|
Noninterest expense to be stable.
|
•
|
Loan growth to be up mid-single digits, on a percentage basis;
|
•
|
Revenue to increase on the upper end of mid-single digits, on a percentage basis;
|
•
|
Noninterest expense to increase on the lower end of mid-single digits, on a percentage basis; and
|
•
|
The effective tax rate to be approximately 17%.
|
|
|
2018
|
|
2017
|
|
||||||||||||||||||
Three months ended June 30
Dollars in millions |
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
$
|
77,479
|
|
|
2.91
|
%
|
|
$
|
564
|
|
|
$
|
75,352
|
|
|
2.71
|
%
|
|
$
|
511
|
|
|
Loans
|
|
222,684
|
|
|
4.23
|
%
|
|
2,367
|
|
|
216,373
|
|
|
3.82
|
%
|
|
2,077
|
|
|
||||
Interest-earning deposits with banks
|
|
21,017
|
|
|
1.78
|
%
|
|
93
|
|
|
22,543
|
|
|
1.04
|
%
|
|
58
|
|
|
||||
Other
|
|
6,905
|
|
|
4.98
|
%
|
|
87
|
|
|
9,748
|
|
|
3.38
|
%
|
|
82
|
|
|
||||
Total interest-earning assets/interest income
|
|
$
|
328,085
|
|
|
3.78
|
%
|
|
3,111
|
|
|
$
|
324,016
|
|
|
3.35
|
%
|
|
2,728
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
$
|
184,357
|
|
|
.57
|
%
|
|
261
|
|
|
$
|
179,012
|
|
|
.32
|
%
|
|
143
|
|
|
||
Borrowed funds
|
|
58,966
|
|
|
2.74
|
%
|
|
408
|
|
|
57,524
|
|
|
1.89
|
%
|
|
273
|
|
|
||||
Total interest-bearing liabilities/interest expense
|
|
$
|
243,323
|
|
|
1.10
|
%
|
|
669
|
|
|
$
|
236,536
|
|
|
.70
|
%
|
|
416
|
|
|
||
Net interest margin/income (Non-GAAP)
|
|
|
|
2.96
|
%
|
|
2,442
|
|
|
|
|
2.84
|
%
|
|
2,312
|
|
|
||||||
Taxable-equivalent adjustments
|
|
|
|
|
|
(29
|
)
|
|
|
|
|
|
(54
|
)
|
|
||||||||
Net interest income (GAAP)
|
|
|
|
|
|
$
|
2,413
|
|
|
|
|
|
|
$
|
2,258
|
|
|
|
|
2018
|
|
2017
|
|
||||||||||||||||||
Six months ended June 30
Dollars in millions |
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
$
|
76,075
|
|
|
2.85
|
%
|
|
$
|
1,083
|
|
|
$
|
75,800
|
|
|
2.69
|
%
|
|
$
|
1,019
|
|
|
Loans
|
|
221,899
|
|
|
4.16
|
%
|
|
4,617
|
|
|
214,324
|
|
|
3.75
|
%
|
|
4,018
|
|
|
||||
Interest-earning deposits with banks
|
|
23,329
|
|
|
1.64
|
%
|
|
191
|
|
|
23,363
|
|
|
.92
|
%
|
|
107
|
|
|
||||
Other
|
|
7,402
|
|
|
4.52
|
%
|
|
167
|
|
|
9,076
|
|
|
3.46
|
%
|
|
156
|
|
|
||||
Total interest-earning assets/interest income
|
|
$
|
328,705
|
|
|
3.68
|
%
|
|
6,058
|
|
|
$
|
322,563
|
|
|
3.29
|
%
|
|
5,300
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
$
|
183,900
|
|
|
.52
|
%
|
|
474
|
|
|
$
|
177,947
|
|
|
.30
|
%
|
|
263
|
|
|
||
Borrowed funds
|
|
59,300
|
|
|
2.52
|
%
|
|
752
|
|
|
56,241
|
|
|
1.82
|
%
|
|
513
|
|
|
||||
Total interest-bearing liabilities/interest expense
|
|
$
|
243,200
|
|
|
1.01
|
%
|
|
1,226
|
|
|
$
|
234,188
|
|
|
.66
|
%
|
|
776
|
|
|
||
Net interest margin/income (Non-GAAP)
|
|
|
|
2.94
|
%
|
|
4,832
|
|
|
|
|
2.81
|
%
|
|
4,524
|
|
|
||||||
Taxable-equivalent adjustments
|
|
|
|
|
|
(58
|
)
|
|
|
|
|
|
(106
|
)
|
|
||||||||
Net interest income (GAAP)
|
|
|
|
|
|
$
|
4,774
|
|
|
|
|
|
|
$
|
4,418
|
|
|
(a)
|
Interest income calculated as taxable-equivalent interest income. To provide more meaningful comparisons of interest income and yields for all interest-earning assets, as well as net interest margins, 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 taxable investments. This adjustment is not permitted under GAAP on the Consolidated Income Statement. For more information, see Reconciliation of Taxable-Equivalent Net Interest Income (Non-GAAP) in the Statistical Information (Unaudited) section of this Report.
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
||||||||||||||||||
Dollars in millions
|
|
2018
|
|
|
2017
|
|
|
$
|
|
%
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
|
|
||||||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Asset management
|
|
$
|
456
|
|
|
$
|
398
|
|
|
$
|
58
|
|
|
15
|
%
|
|
$
|
911
|
|
|
$
|
801
|
|
|
$
|
110
|
|
|
14
|
%
|
|
Consumer services
|
|
381
|
|
|
360
|
|
|
21
|
|
|
6
|
%
|
|
738
|
|
|
692
|
|
|
46
|
|
|
7
|
%
|
|
||||||
Corporate services
|
|
487
|
|
|
466
|
|
|
21
|
|
|
5
|
%
|
|
916
|
|
|
880
|
|
|
36
|
|
|
4
|
%
|
|
||||||
Residential mortgage
|
|
84
|
|
|
104
|
|
|
(20
|
)
|
|
(19
|
)%
|
|
181
|
|
|
217
|
|
|
(36
|
)
|
|
(17
|
)%
|
|
||||||
Service charges on deposits
|
|
169
|
|
|
170
|
|
|
(1
|
)
|
|
(1
|
)%
|
|
336
|
|
|
331
|
|
|
5
|
|
|
2
|
%
|
|
||||||
Other
|
|
334
|
|
|
304
|
|
|
30
|
|
|
10
|
%
|
|
579
|
|
|
605
|
|
|
(26
|
)
|
|
(4
|
)%
|
|
||||||
Total noninterest income
|
|
$
|
1,911
|
|
|
$
|
1,802
|
|
|
$
|
109
|
|
|
6
|
%
|
|
$
|
3,661
|
|
|
$
|
3,526
|
|
|
$
|
135
|
|
|
4
|
%
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
||||||||||||||||||
Dollars in millions
|
|
2018
|
|
|
2017
|
|
|
$
|
|
%
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
|
|
||||||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Personnel
|
|
$
|
1,356
|
|
|
$
|
1,276
|
|
|
$
|
80
|
|
|
6
|
%
|
|
$
|
2,710
|
|
|
$
|
2,533
|
|
|
$
|
177
|
|
|
7
|
%
|
|
Occupancy
|
|
203
|
|
|
202
|
|
|
1
|
|
|
—
|
|
|
421
|
|
|
424
|
|
|
(3
|
)
|
|
(1
|
)%
|
|
||||||
Equipment
|
|
281
|
|
|
281
|
|
|
—
|
|
|
—
|
|
|
554
|
|
|
532
|
|
|
22
|
|
|
4
|
%
|
|
||||||
Marketing
|
|
75
|
|
|
67
|
|
|
8
|
|
|
12
|
%
|
|
130
|
|
|
122
|
|
|
8
|
|
|
7
|
%
|
|
||||||
Other
|
|
669
|
|
|
653
|
|
|
16
|
|
|
2
|
%
|
|
1,296
|
|
|
1,270
|
|
|
26
|
|
|
2
|
%
|
|
||||||
Total noninterest expense
|
|
$
|
2,584
|
|
|
$
|
2,479
|
|
|
$
|
105
|
|
|
4
|
%
|
|
$
|
5,111
|
|
|
$
|
4,881
|
|
|
$
|
230
|
|
|
5
|
%
|
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2018
|
|
|
2017
|
|
|
$
|
%
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|||||||
Interest-earning deposits with banks
|
$
|
21,972
|
|
|
$
|
28,595
|
|
|
$
|
(6,623
|
)
|
(23
|
)%
|
|
Loans held for sale
|
1,325
|
|
|
2,655
|
|
|
(1,330
|
)
|
(50
|
)%
|
|
|||
Investment securities
|
80,125
|
|
|
76,131
|
|
|
3,994
|
|
5
|
%
|
|
|||
Loans
|
222,855
|
|
|
220,458
|
|
|
2,397
|
|
1
|
%
|
|
|||
Allowance for loan and lease losses
|
(2,581
|
)
|
|
(2,611
|
)
|
|
30
|
|
1
|
%
|
|
|||
Mortgage servicing rights
|
2,045
|
|
|
1,832
|
|
|
213
|
|
12
|
%
|
|
|||
Goodwill
|
9,218
|
|
|
9,173
|
|
|
45
|
|
—
|
|
|
|||
Other, net
|
45,752
|
|
|
44,535
|
|
|
1,217
|
|
3
|
%
|
|
|||
Total assets
|
$
|
380,711
|
|
|
$
|
380,768
|
|
|
$
|
(57
|
)
|
—
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
$
|
264,885
|
|
|
$
|
265,053
|
|
|
$
|
(168
|
)
|
—
|
|
|
Borrowed funds
|
59,222
|
|
|
59,088
|
|
|
134
|
|
—
|
|
|
|||
Other
|
9,629
|
|
|
9,042
|
|
|
587
|
|
6
|
%
|
|
|||
Total liabilities
|
333,736
|
|
|
333,183
|
|
|
553
|
|
—
|
|
|
|||
Equity
|
|
|
|
|
|
|
|
|
|
|||||
Total shareholders’ equity
|
46,904
|
|
|
47,513
|
|
|
(609
|
)
|
(1
|
)%
|
|
|||
Noncontrolling interests
|
71
|
|
|
72
|
|
|
(1
|
)
|
(1
|
)%
|
|
|||
Total equity
|
46,975
|
|
|
47,585
|
|
|
(610
|
)
|
(1
|
)%
|
|
|||
Total liabilities and equity
|
$
|
380,711
|
|
|
$
|
380,768
|
|
|
$
|
(57
|
)
|
—
|
|
|
•
|
Total assets were stable as higher investment securities and loan growth were funded by lower interest-earning deposits with banks;
|
•
|
Total liabilities increased slightly;
|
•
|
Total equity decreased slightly as share repurchases and lower accumulated other comprehensive income (AOCI) related to net unrealized securities losses were mostly offset by higher retained earnings driven by net income.
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2018
|
|
|
2017
|
|
|
$
|
%
|
|
|||||
Commercial lending
|
|
|
|
|
|
|
|
|||||||
Commercial
|
$
|
113,367
|
|
|
$
|
110,527
|
|
|
$
|
2,840
|
|
3
|
%
|
|
Commercial real estate
|
28,946
|
|
|
28,978
|
|
|
(32
|
)
|
—
|
|
|
|||
Equipment lease financing
|
7,323
|
|
|
7,934
|
|
|
(611
|
)
|
(8
|
)%
|
|
|||
Total commercial lending
|
149,636
|
|
|
147,439
|
|
|
2,197
|
|
1
|
%
|
|
|||
Consumer lending
|
|
|
|
|
|
|
|
|
|
|||||
Home equity
|
27,219
|
|
|
28,364
|
|
|
(1,145
|
)
|
(4
|
)%
|
|
|||
Residential real estate
|
17,805
|
|
|
17,212
|
|
|
593
|
|
3
|
%
|
|
|||
Credit card
|
5,830
|
|
|
5,699
|
|
|
131
|
|
2
|
%
|
|
|||
Other consumer
|
|
|
|
|
|
|
|
|
|
|||||
Automobile
|
13,892
|
|
|
12,880
|
|
|
1,012
|
|
8
|
%
|
|
|||
Education
|
4,057
|
|
|
4,454
|
|
|
(397
|
)
|
(9
|
)%
|
|
|||
Other
|
4,416
|
|
|
4,410
|
|
|
6
|
|
—
|
|
|
|||
Total consumer lending
|
73,219
|
|
|
73,019
|
|
|
200
|
|
—
|
|
|
|||
Total loans
|
$
|
222,855
|
|
|
$
|
220,458
|
|
|
$
|
2,397
|
|
1
|
%
|
|
(a)
|
Ratings percentages allocated based on amortized cost.
|
(b)
|
Collateralized primarily by retail properties, office buildings, lodging properties and multi-family housing.
|
(c)
|
Collateralized primarily by corporate debt, government guaranteed education loans and other consumer credit products.
|
(d)
|
Includes state and municipal securities.
|
(e)
|
On January 1, 2018, $.6 billion of available for sale securities, primarily money market funds, were reclassified to equity investments in accordance with the adoption of ASU 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on this adoption.
|
(f)
|
Includes available for sale and held to maturity securities, which are recorded on our balance sheet at fair value and amortized cost, respectively.
|
June 30, 2018
|
Years
|
|
|
Agency residential mortgage-backed
|
6.7
|
|
|
Non-agency residential mortgage-backed
|
6.4
|
|
|
Agency commercial mortgage-backed
|
3.6
|
|
|
Non-agency commercial mortgage-backed
|
3.1
|
|
|
Asset-backed
|
2.3
|
|
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2018
|
|
|
2017
|
|
|
$
|
%
|
|
|||||
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing
|
$
|
79,047
|
|
|
$
|
79,864
|
|
|
$
|
(817
|
)
|
(1
|
)%
|
|
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|||||
Money market
|
54,771
|
|
|
59,735
|
|
|
(4,964
|
)
|
(8
|
)%
|
|
|||
Demand
|
61,853
|
|
|
61,213
|
|
|
640
|
|
1
|
%
|
|
|||
Savings
|
51,974
|
|
|
46,980
|
|
|
4,994
|
|
11
|
%
|
|
|||
Time deposits
|
17,240
|
|
|
17,261
|
|
|
(21
|
)
|
—
|
|
|
|||
Total interest-bearing deposits
|
185,838
|
|
|
185,189
|
|
|
649
|
|
—
|
|
|
|||
Total deposits
|
264,885
|
|
|
265,053
|
|
|
(168
|
)
|
—
|
|
|
|||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|||||
Federal Home Loan Bank (FHLB) borrowings
|
22,036
|
|
|
21,037
|
|
|
999
|
|
5
|
%
|
|
|||
Bank notes and senior debt
|
27,596
|
|
|
28,062
|
|
|
(466
|
)
|
(2
|
)%
|
|
|||
Subordinated debt
|
4,781
|
|
|
5,200
|
|
|
(419
|
)
|
(8
|
)%
|
|
|||
Other
|
4,809
|
|
|
4,789
|
|
|
20
|
|
—
|
|
|
|||
Total borrowed funds
|
59,222
|
|
|
59,088
|
|
|
134
|
|
—
|
|
|
|||
Total funding sources
|
$
|
324,107
|
|
|
$
|
324,141
|
|
|
$
|
(34
|
)
|
—
|
|
|
•
|
Retail Banking
|
•
|
Corporate & Institutional Banking
|
•
|
Asset Management Group
|
•
|
BlackRock
|
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2018
|
|
2017
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
2,495
|
|
|
$
|
2,260
|
|
|
$
|
235
|
|
10
|
%
|
|
Noninterest income
|
1,313
|
|
|
1,248
|
|
|
65
|
|
5
|
%
|
|
|||
Total revenue
|
3,808
|
|
|
3,508
|
|
|
300
|
|
9
|
%
|
|
|||
Provision for credit losses
|
141
|
|
|
121
|
|
|
20
|
|
17
|
%
|
|
|||
Noninterest expense
|
2,845
|
|
|
2,685
|
|
|
160
|
|
6
|
%
|
|
|||
Pretax earnings
|
822
|
|
|
702
|
|
|
120
|
|
17
|
%
|
|
|||
Income taxes
|
196
|
|
|
259
|
|
|
(63
|
)
|
(24
|
)%
|
|
|||
Earnings
|
$
|
626
|
|
|
$
|
443
|
|
|
$
|
183
|
|
41
|
%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans held for sale
|
$
|
640
|
|
|
$
|
786
|
|
|
$
|
(146
|
)
|
(19
|
)%
|
|
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer
|
|
|
|
|
|
|
|
|||||||
Home equity
|
$
|
24,391
|
|
|
$
|
25,506
|
|
|
$
|
(1,115
|
)
|
(4
|
)%
|
|
Automobile
|
13,375
|
|
|
12,185
|
|
|
1,190
|
|
10
|
%
|
|
|||
Education
|
4,294
|
|
|
5,021
|
|
|
(727
|
)
|
(14
|
)%
|
|
|||
Credit cards
|
5,674
|
|
|
5,129
|
|
|
545
|
|
11
|
%
|
|
|||
Other
|
1,768
|
|
|
1,757
|
|
|
11
|
|
1
|
%
|
|
|||
Total consumer
|
49,502
|
|
|
49,598
|
|
|
(96
|
)
|
—
|
|
|
|||
Commercial and commercial real estate
|
10,493
|
|
|
10,965
|
|
|
(472
|
)
|
(4
|
)%
|
|
|||
Residential mortgage
|
13,570
|
|
|
11,804
|
|
|
1,766
|
|
15
|
%
|
|
|||
Total loans
|
$
|
73,565
|
|
|
$
|
72,367
|
|
|
$
|
1,198
|
|
2
|
%
|
|
Total assets
|
$
|
88,879
|
|
|
$
|
88,559
|
|
|
$
|
320
|
|
—
|
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
30,248
|
|
|
$
|
29,285
|
|
|
$
|
963
|
|
3
|
%
|
|
Interest-bearing demand
|
42,373
|
|
|
41,059
|
|
|
1,314
|
|
3
|
%
|
|
|||
Money market
|
31,560
|
|
|
38,416
|
|
|
(6,856
|
)
|
(18
|
)%
|
|
|||
Savings
|
45,139
|
|
|
36,851
|
|
|
8,288
|
|
22
|
%
|
|
|||
Certificates of deposit
|
11,948
|
|
|
13,518
|
|
|
(1,570
|
)
|
(12
|
)%
|
|
|||
Total deposits
|
$
|
161,268
|
|
|
$
|
159,129
|
|
|
$
|
2,139
|
|
1
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
1.42
|
%
|
|
1.01
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
34
|
%
|
|
36
|
%
|
|
|
|
|
|||||
Efficiency
|
75
|
%
|
|
77
|
%
|
|
|
|
|
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2018
|
|
|
2017
|
|
|
$
|
%
|
|
|||||
Supplemental Noninterest Income
Information |
|
|
|
|
|
|
|
|||||||
Consumer services
|
$
|
553
|
|
|
$
|
527
|
|
|
$
|
26
|
|
5
|
%
|
|
Brokerage
|
$
|
174
|
|
|
$
|
154
|
|
|
$
|
20
|
|
13
|
%
|
|
Residential mortgage
|
$
|
181
|
|
|
$
|
217
|
|
|
$
|
(36
|
)
|
(17
|
)%
|
|
Service charges on deposits
|
$
|
324
|
|
|
$
|
317
|
|
|
$
|
7
|
|
2
|
%
|
|
Residential Mortgage Information
|
|
|
|
|
|
|
|
|||||||
Residential mortgage servicing statistics (in billions, except as noted) (a)
|
|
|
|
|
|
|
|
|||||||
Serviced portfolio balance (b)
|
$
|
124
|
|
|
$
|
131
|
|
|
$
|
(7
|
)
|
(5
|
)%
|
|
Serviced portfolio acquisitions
|
$
|
4
|
|
|
$
|
16
|
|
|
$
|
(12
|
)
|
(75
|
)%
|
|
MSR asset value (b)
|
$
|
1.3
|
|
|
$
|
1.2
|
|
|
$
|
.1
|
|
8
|
%
|
|
MSR capitalization value (in basis points) (b)
|
104
|
|
|
95
|
|
|
9
|
|
9
|
%
|
|
|||
Servicing income: (in millions)
|
|
|
|
|
|
|
|
|||||||
Servicing fees, net (c)
|
$
|
90
|
|
|
$
|
96
|
|
|
$
|
(6
|
)
|
(6
|
)%
|
|
Mortgage servicing rights valuation, net of economic hedge
|
$
|
22
|
|
|
$
|
23
|
|
|
$
|
(1
|
)
|
(4
|
)%
|
|
Residential mortgage loan statistics
|
|
|
|
|
|
|
|
|||||||
Loan origination volume (in billions)
|
$
|
3.7
|
|
|
$
|
4.1
|
|
|
$
|
(.4
|
)
|
(10
|
)%
|
|
Loan sale margin percentage
|
2.49
|
%
|
|
2.84
|
%
|
|
|
|
|
|||||
Percentage of originations represented by:
|
|
|
|
|
|
|
|
|||||||
Purchase volume (d)
|
65
|
%
|
|
53
|
%
|
|
|
|
|
|||||
Refinance volume
|
35
|
%
|
|
47
|
%
|
|
|
|
|
|||||
Other Information (b)
|
|
|
|
|
|
|
|
|||||||
Customer-related statistics (average)
|
|
|
|
|
|
|
|
|||||||
Non-teller deposit transactions (e)
|
54
|
%
|
|
52
|
%
|
|
|
|
|
|||||
Digital consumer customers (f)
|
65
|
%
|
|
61
|
%
|
|
|
|
|
|||||
Credit-related statistics
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (g)
|
$
|
1,141
|
|
|
$
|
1,149
|
|
|
$
|
(8
|
)
|
(1
|
)%
|
|
Net charge-offs
|
$
|
212
|
|
|
$
|
187
|
|
|
25
|
|
13
|
%
|
|
|
Other statistics
|
|
|
|
|
|
|
|
|||||||
ATMs
|
9,043
|
|
|
8,972
|
|
|
71
|
|
1
|
%
|
|
|||
Branches (h)
|
2,404
|
|
|
2,481
|
|
|
(77
|
)
|
(3
|
)%
|
|
|||
Brokerage account client assets (in billions) (i)
|
$
|
49
|
|
|
$
|
46
|
|
|
$
|
3
|
|
7
|
%
|
|
(a)
|
Represents mortgage loan servicing balances for third parties and the related income.
|
(b)
|
Presented as of
June 30
, except for customer-related statistics, which are averages for the six months ended, and net charge-offs, which are for the
six months ended
.
|
(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)
|
Includes nonperforming loans of $1.1 billion at both
June 30, 2018
and
June 30, 2017
.
|
(h)
|
Excludes stand-alone mortgage offices and satellite offices (
e.g.
, drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
|
(i)
|
Includes cash and money market balances.
|
•
|
Average residential mortgages increased as a result of growth in nonconforming residential mortgage loans, both nationwide and within our branch network.
|
•
|
Average automobile loans, which consisted of both direct and indirect auto loans, increased primarily due to strong new loan volumes, including in our Southeast markets.
|
•
|
Average credit card balances increased as we continued to focus on our long-term objective of deepening penetration within our existing customer base.
|
•
|
Average home equity loans decreased as paydowns and payoffs on loans exceeded new originated volume.
|
•
|
Average commercial and commercial real estate loans declined as paydowns and payoffs on loans exceeded new volume.
|
•
|
Average education loans decreased driven by a decline in the runoff portfolio of government guaranteed education loans.
|
•
|
Approximately 65% of consumer customers used non-teller channels for the majority of their transactions in the first six months of 2018 compared with 61% in the first six months of 2017.
|
•
|
Deposit transactions via ATM and mobile channels increased to 54% of total deposit transactions versus 52% in the comparison.
|
•
|
Instant debit card issuance, which enables us to print a customer’s debit card in minutes, was available in 92% of our branch network as of June 30, 2018.
|
•
|
In the second half of 2018, Retail Banking plans to launch its national retail digital strategy in markets where it does not have existing branches, with an initial focus on certain markets where PNC's Corporate & Institutional Banking has expanded its middle market banking business.
|
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions
|
2018
|
|
2017
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
1,782
|
|
|
$
|
1,729
|
|
|
$
|
53
|
|
3
|
%
|
|
Noninterest income
|
1,182
|
|
|
1,112
|
|
|
70
|
|
6
|
%
|
|
|||
Total revenue
|
2,964
|
|
|
2,841
|
|
|
123
|
|
4
|
%
|
|
|||
Provision for credit losses
|
56
|
|
|
112
|
|
|
(56
|
)
|
(50
|
)%
|
|
|||
Noninterest expense
|
1,265
|
|
|
1,186
|
|
|
79
|
|
7
|
%
|
|
|||
Pretax earnings
|
1,643
|
|
|
1,543
|
|
|
100
|
|
6
|
%
|
|
|||
Income taxes
|
384
|
|
|
541
|
|
|
(157
|
)
|
(29
|
)%
|
|
|||
Earnings
|
$
|
1,259
|
|
|
$
|
1,002
|
|
|
$
|
257
|
|
26
|
%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans held for sale
|
$
|
890
|
|
|
$
|
915
|
|
|
$
|
(25
|
)
|
(3
|
)%
|
|
Loans
|
|
|
|
|
|
|
|
|||||||
Commercial
|
$
|
101,767
|
|
|
$
|
94,067
|
|
|
$
|
7,700
|
|
8
|
%
|
|
Commercial real estate
|
26,723
|
|
|
27,334
|
|
|
(611
|
)
|
(2
|
)%
|
|
|||
Equipment lease financing
|
7,669
|
|
|
7,550
|
|
|
119
|
|
2
|
%
|
|
|||
Total commercial lending
|
136,159
|
|
|
128,951
|
|
|
7,208
|
|
6
|
%
|
|
|||
Consumer
|
58
|
|
|
304
|
|
|
(246
|
)
|
(81
|
)%
|
|
|||
Total loans
|
$
|
136,217
|
|
|
$
|
129,255
|
|
|
$
|
6,962
|
|
5
|
%
|
|
Total assets
|
$
|
152,769
|
|
|
$
|
145,445
|
|
|
$
|
7,324
|
|
5
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
45,136
|
|
|
$
|
46,872
|
|
|
$
|
(1,736
|
)
|
(4
|
)%
|
|
Money market
|
23,118
|
|
|
21,204
|
|
|
1,914
|
|
9
|
%
|
|
|||
Other
|
18,590
|
|
|
15,706
|
|
|
2,884
|
|
18
|
%
|
|
|||
Total deposits
|
$
|
86,844
|
|
|
$
|
83,782
|
|
|
$
|
3,062
|
|
4
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
1.66
|
%
|
|
1.39
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
40
|
%
|
|
39
|
%
|
|
|
|
|
|||||
Efficiency
|
43
|
%
|
|
42
|
%
|
|
|
|
|
|||||
Other Information
|
|
|
|
|
|
|
|
|||||||
Consolidated revenue from: (a)
|
|
|
|
|
|
|
|
|||||||
Treasury Management (b)
|
$
|
865
|
|
|
$
|
731
|
|
|
$
|
134
|
|
18
|
%
|
|
Capital Markets (b)
|
$
|
541
|
|
|
$
|
515
|
|
|
$
|
26
|
|
5
|
%
|
|
Commercial mortgage banking activities
|
|
|
|
|
|
|
|
|||||||
Commercial mortgage loans held for sale (c)
|
$
|
52
|
|
|
$
|
51
|
|
|
$
|
1
|
|
2
|
%
|
|
Commercial mortgage loan servicing income (d)
|
115
|
|
|
113
|
|
|
2
|
|
2
|
%
|
|
|||
Commercial mortgage servicing rights valuation, net of economic hedge (e)
|
24
|
|
|
35
|
|
|
(11
|
)
|
(31
|
)%
|
|
|||
Total
|
$
|
191
|
|
|
$
|
199
|
|
|
$
|
(8
|
)
|
(4
|
)%
|
|
MSR asset value (f)
|
$
|
748
|
|
|
$
|
618
|
|
|
$
|
130
|
|
21
|
%
|
|
Average Loans by C&IB business
|
|
|
|
|
|
|
|
|||||||
Corporate Banking
|
$
|
58,191
|
|
|
$
|
54,416
|
|
|
$
|
3,775
|
|
7
|
%
|
|
Real Estate
|
37,336
|
|
|
37,730
|
|
|
(394
|
)
|
(1
|
)%
|
|
|||
Business Credit
|
17,078
|
|
|
15,244
|
|
|
1,834
|
|
12
|
%
|
|
|||
Equipment Finance
|
14,298
|
|
|
12,982
|
|
|
1,316
|
|
10
|
%
|
|
|||
Commercial Banking
|
7,065
|
|
|
7,057
|
|
|
8
|
|
—
|
|
|
|||
Other
|
2,249
|
|
|
1,826
|
|
|
423
|
|
23
|
%
|
|
|||
Total average loans
|
$
|
136,217
|
|
|
$
|
129,255
|
|
|
$
|
6,962
|
|
5
|
%
|
|
Credit-related statistics
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (f) (g)
|
$
|
385
|
|
|
$
|
586
|
|
|
$
|
(201
|
)
|
(34
|
)%
|
|
Net charge-offs
|
$
|
7
|
|
|
$
|
42
|
|
|
$
|
(35
|
)
|
(83
|
)%
|
|
(a)
|
Represents consolidated amounts. See the additional revenue discussion regarding treasury management, capital markets-related products and services, and commercial mortgage banking activities in the Product Revenue section of this Corporate & Institutional Banking section.
|
(b)
|
Includes amounts reported in net interest income and noninterest income.
|
(c)
|
Includes other noninterest income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, originations fees, gains on sale of loans held for sale and net interest income on loans held for sale.
|
(d)
|
Includes net interest income and noninterest income (primarily in corporate service fees) from loan servicing net of reduction in commercial mortgage servicing rights due to amortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
|
(e)
|
Amounts are reported in corporate service fees.
|
(f)
|
As of
June 30
.
|
(g)
|
Includes nonperforming loans of $.3 billion at
June 30, 2018
and $.5 billion at
June 30, 2017
.
|
•
|
Corporate Banking provides lending, treasury management and capital markets-related products and services to mid-sized and large corporations, and government and not-for-profit entities. Average loans for this business grew in the comparison reflecting increased lending to large and mid-sized corporate clients as well as strong production in asset backed financing.
|
•
|
PNC Real Estate provides banking, financing and servicing solutions for commercial real estate clients across the country. Average loans for this business decreased primarily driven by project loan payoffs, partially offset by higher commercial mortgage originations.
|
•
|
PNC Business Credit provides asset-based lending. The loan portfolio is relatively high yielding, with acceptable risk as the loans are mainly secured by short-term assets. Average loans for this business increased in the comparison as new originations and increased utilization were partially offset by payoffs.
|
•
|
PNC Equipment Finance provides equipment financing solutions for clients throughout the U.S. and Canada. Average loans, including commercial loans and finance leases, and operating leases were $15.3 billion in the first six months of 2018, an increase of $1.5 billion in the year over year comparison due to strong new production and the impact of the acquired business.
|
•
|
Commercial Banking provides lending, treasury management and capital markets-related products and services to smaller corporations and businesses. Average loans for this business were relatively unchanged.
|
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2018
|
|
2017
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
146
|
|
|
$
|
144
|
|
|
$
|
2
|
|
1
|
%
|
|
Noninterest income
|
448
|
|
|
435
|
|
|
13
|
|
3
|
%
|
|
|||
Total revenue
|
594
|
|
|
579
|
|
|
15
|
|
3
|
%
|
|
|||
Provision for credit losses (benefit)
|
—
|
|
|
(9
|
)
|
|
9
|
|
*
|
|
|
|||
Noninterest expense
|
441
|
|
|
432
|
|
|
9
|
|
2
|
%
|
|
|||
Pretax earnings
|
153
|
|
|
156
|
|
|
(3
|
)
|
(2
|
)%
|
|
|||
Income taxes
|
36
|
|
|
57
|
|
|
(21
|
)
|
(37
|
)%
|
|
|||
Earnings
|
$
|
117
|
|
|
$
|
99
|
|
|
$
|
18
|
|
18
|
%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer
|
$
|
4,741
|
|
|
$
|
5,101
|
|
|
$
|
(360
|
)
|
(7
|
)%
|
|
Commercial and commercial real estate
|
738
|
|
|
719
|
|
|
19
|
|
3
|
%
|
|
|||
Residential mortgage
|
1,539
|
|
|
1,218
|
|
|
321
|
|
26
|
%
|
|
|||
Total loans
|
$
|
7,018
|
|
|
$
|
7,038
|
|
|
$
|
(20
|
)
|
—
|
|
|
Total assets
|
$
|
7,484
|
|
|
$
|
7,517
|
|
|
$
|
(33
|
)
|
—
|
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
1,462
|
|
|
$
|
1,519
|
|
|
$
|
(57
|
)
|
(4
|
)%
|
|
Interest-bearing demand
|
3,494
|
|
|
3,766
|
|
|
(272
|
)
|
(7
|
)%
|
|
|||
Money market
|
2,454
|
|
|
3,358
|
|
|
(904
|
)
|
(27
|
)%
|
|
|||
Savings
|
4,651
|
|
|
3,769
|
|
|
882
|
|
23
|
%
|
|
|||
Other
|
345
|
|
|
239
|
|
|
106
|
|
44
|
%
|
|
|||
Total deposits
|
$
|
12,406
|
|
|
$
|
12,651
|
|
|
$
|
(245
|
)
|
(2
|
)%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
3.15
|
%
|
|
2.66
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
75
|
%
|
|
75
|
%
|
|
|
|
|
|||||
Efficiency
|
74
|
%
|
|
75
|
%
|
|
|
|
|
|||||
Supplemental Noninterest Income Information
|
|
|
|
|
|
|
|
|||||||
Asset management fees
|
$
|
442
|
|
|
$
|
428
|
|
|
$
|
14
|
|
3
|
%
|
|
Other Information
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (a) (b)
|
$
|
51
|
|
|
$
|
49
|
|
|
$
|
2
|
|
4
|
%
|
|
Net charge-offs
|
$
|
7
|
|
|
$
|
2
|
|
|
$
|
5
|
|
250
|
%
|
|
Client Assets Under Administration
(in billions) (a) (c)
|
|
|
|
|
|
|
|
|||||||
Discretionary client assets under management
|
$
|
149
|
|
|
$
|
141
|
|
|
$
|
8
|
|
6
|
%
|
|
Nondiscretionary client assets under administration
|
130
|
|
|
125
|
|
|
5
|
|
4
|
%
|
|
|||
Total
|
$
|
279
|
|
|
$
|
266
|
|
|
$
|
13
|
|
5
|
%
|
|
Discretionary client assets under management
|
|
|
|
|
|
|
|
|||||||
Personal
|
$
|
92
|
|
|
$
|
89
|
|
|
$
|
3
|
|
3
|
%
|
|
Institutional
|
57
|
|
|
52
|
|
|
5
|
|
10
|
%
|
|
|||
Total
|
$
|
149
|
|
|
$
|
141
|
|
|
$
|
8
|
|
6
|
%
|
|
(a)
|
As of
June 30
.
|
(b)
|
Includes nonperforming loans of $50 million at
June 30, 2018
and $45 million at
June 30, 2017
.
|
(c)
|
Excludes brokerage account client assets.
|
Six months ended June 30
|
|
|
|
|
||||
Dollars in millions
|
2018
|
|
2017
|
|
||||
Business segment earnings (a)
|
|
$392
|
|
|
|
$289
|
|
|
PNC’s economic interest in BlackRock (b)
|
22
|
%
|
|
22
|
%
|
|
(a)
|
Includes our share of BlackRock’s reported GAAP earnings net of income taxes on those earnings incurred by us.
|
(b)
|
At
June 30
.
|
In billions
|
June 30
2018 |
|
December 31
2017 |
|
|
||
Carrying value of our investment in BlackRock (c)
|
|
$7.9
|
|
|
$7.7
|
|
|
Market value of our investment in BlackRock (d)
|
|
$17.4
|
|
|
$17.9
|
|
|
(c)
|
We account for our investment in BlackRock under the equity method of accounting, exclusive of a related deferred tax liability of $1.6 billion at both
June 30, 2018
and
December 31, 2017
. Our voting interest in BlackRock common stock was approximately 21% at
June 30, 2018
.
|
(d)
|
Does not include liquidity discount.
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
$
|
21,667
|
|
|
19
|
%
|
|
|
$
|
20,578
|
|
|
19
|
%
|
|
Retail/wholesale trade
|
19,299
|
|
|
17
|
|
|
|
17,846
|
|
|
16
|
|
|
||
Service providers
|
14,343
|
|
|
13
|
|
|
|
15,100
|
|
|
14
|
|
|
||
Real estate related (a)
|
12,688
|
|
|
11
|
|
|
|
12,496
|
|
|
11
|
|
|
||
Health care
|
9,564
|
|
|
8
|
|
|
|
9,739
|
|
|
9
|
|
|
||
Financial services
|
9,241
|
|
|
8
|
|
|
|
8,532
|
|
|
8
|
|
|
||
Transportation and warehousing
|
5,531
|
|
|
5
|
|
|
|
5,609
|
|
|
5
|
|
|
||
Other industries
|
21,034
|
|
|
19
|
|
|
|
20,627
|
|
|
18
|
|
|
||
Total commercial loans
|
$
|
113,367
|
|
|
100
|
%
|
|
|
$
|
110,527
|
|
|
100
|
%
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
4,194
|
|
|
14
|
%
|
|
|
$
|
4,192
|
|
|
14
|
%
|
|
Florida
|
2,240
|
|
|
8
|
|
|
|
2,221
|
|
|
8
|
|
|
||
Maryland
|
2,128
|
|
|
7
|
|
|
|
2,104
|
|
|
7
|
|
|
||
Virginia
|
1,641
|
|
|
6
|
|
|
|
1,609
|
|
|
5
|
|
|
||
Texas
|
1,593
|
|
|
5
|
|
|
|
1,639
|
|
|
6
|
|
|
||
Illinois
|
1,405
|
|
|
5
|
|
|
|
1,325
|
|
|
5
|
|
|
||
Pennsylvania
|
1,339
|
|
|
5
|
|
|
|
1,394
|
|
|
5
|
|
|
||
New York
|
1,171
|
|
|
4
|
|
|
|
1,163
|
|
|
4
|
|
|
||
Ohio
|
1,104
|
|
|
4
|
|
|
|
1,134
|
|
|
4
|
|
|
||
New Jersey
|
936
|
|
|
3
|
|
|
|
964
|
|
|
3
|
|
|
||
All other states
|
11,195
|
|
|
39
|
|
|
|
11,233
|
|
|
39
|
|
|
||
Total commercial real estate loans
|
$
|
28,946
|
|
|
100
|
%
|
|
|
$
|
28,978
|
|
|
100
|
%
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
Pennsylvania
|
$
|
6,465
|
|
|
24
|
%
|
|
|
$
|
6,792
|
|
|
24
|
%
|
|
New Jersey
|
4,114
|
|
|
15
|
|
|
|
4,252
|
|
|
15
|
|
|
||
Ohio
|
3,244
|
|
|
12
|
|
|
|
3,413
|
|
|
12
|
|
|
||
Illinois
|
1,723
|
|
|
6
|
|
|
|
1,801
|
|
|
6
|
|
|
||
Maryland
|
1,526
|
|
|
6
|
|
|
|
1,572
|
|
|
6
|
|
|
||
Michigan
|
1,395
|
|
|
5
|
|
|
|
1,442
|
|
|
5
|
|
|
||
Florida
|
1,235
|
|
|
5
|
|
|
|
1,255
|
|
|
4
|
|
|
||
North Carolina
|
1,214
|
|
|
4
|
|
|
|
1,266
|
|
|
5
|
|
|
||
Kentucky
|
1,088
|
|
|
4
|
|
|
|
1,138
|
|
|
4
|
|
|
||
Indiana
|
879
|
|
|
3
|
|
|
|
924
|
|
|
3
|
|
|
||
All other states
|
4,336
|
|
|
16
|
|
|
|
4,509
|
|
|
16
|
|
|
||
Total home equity loans
|
$
|
27,219
|
|
|
100
|
%
|
|
|
$
|
28,364
|
|
|
100
|
%
|
|
Lien type
|
|
|
|
|
|
|
|
|
|
||||||
1st lien
|
|
|
58
|
%
|
|
|
|
|
58
|
%
|
|
||||
2nd lien
|
|
|
42
|
|
|
|
|
|
42
|
|
|
||||
Total
|
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
4,110
|
|
|
23
|
%
|
|
|
$
|
3,676
|
|
|
21
|
%
|
|
New Jersey
|
1,568
|
|
|
9
|
|
|
|
1,503
|
|
|
9
|
|
|
||
Florida
|
1,544
|
|
|
9
|
|
|
|
1,529
|
|
|
9
|
|
|
||
Illinois
|
1,190
|
|
|
6
|
|
|
|
1,230
|
|
|
7
|
|
|
||
Pennsylvania
|
976
|
|
|
5
|
|
|
|
962
|
|
|
5
|
|
|
||
New York
|
894
|
|
|
5
|
|
|
|
847
|
|
|
5
|
|
|
||
Maryland
|
888
|
|
|
5
|
|
|
|
902
|
|
|
5
|
|
|
||
North Carolina
|
840
|
|
|
5
|
|
|
|
821
|
|
|
5
|
|
|
||
Virginia
|
826
|
|
|
5
|
|
|
|
824
|
|
|
5
|
|
|
||
Ohio
|
671
|
|
|
4
|
|
|
|
684
|
|
|
4
|
|
|
||
All other states
|
4,298
|
|
|
24
|
|
|
|
4,234
|
|
|
25
|
|
|
||
Total residential real estate loans
|
$
|
17,805
|
|
|
100
|
%
|
|
|
$
|
17,212
|
|
|
100
|
%
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
|
Change
|
|||||||
Dollars in millions
|
$
|
|
%
|
||||||||||
Nonperforming loans
|
|
|
|
|
|
|
|||||||
Commercial lending
|
$
|
414
|
|
$
|
554
|
|
|
$
|
(140
|
)
|
|
(25
|
)%
|
Consumer lending (a)
|
1,305
|
|
1,311
|
|
|
(6
|
)
|
|
—
|
|
|||
Total nonperforming loans
|
1,719
|
|
1,865
|
|
|
(146
|
)
|
|
(8
|
)%
|
|||
OREO, foreclosed and other assets
|
135
|
|
170
|
|
|
(35
|
)
|
|
(21
|
)%
|
|||
Total nonperforming assets
|
$
|
1,854
|
|
$
|
2,035
|
|
|
$
|
(181
|
)
|
|
(9
|
)%
|
Amount of TDRs included in nonperforming loans
|
$
|
863
|
|
$
|
964
|
|
|
$
|
(101
|
)
|
|
(10
|
)%
|
Percentage of total nonperforming loans
|
50
|
%
|
52
|
%
|
|
|
|
|
|||||
Nonperforming loans to total loans
|
.77
|
%
|
.85
|
%
|
|
|
|
|
|||||
Nonperforming assets to total loans, OREO, foreclosed and other assets
|
.83
|
%
|
.92
|
%
|
|
|
|
|
|||||
Nonperforming assets to total assets
|
.49
|
%
|
.53
|
%
|
|
|
|
|
|||||
Allowance for loan and lease losses to total nonperforming loans
|
150
|
%
|
140
|
%
|
|
|
|
|
(a)
|
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.
|
In millions
|
|
2018
|
|
|
2017
|
|
|
||
January 1
|
|
$
|
2,035
|
|
|
$
|
2,374
|
|
|
New nonperforming assets
|
|
525
|
|
|
766
|
|
|
||
Charge-offs and valuation adjustments
|
|
(282
|
)
|
|
(302
|
)
|
|
||
Principal activity, including paydowns and payoffs
|
|
(280
|
)
|
|
(389
|
)
|
|
||
Asset sales and transfers to loans held for sale
|
|
(63
|
)
|
|
(100
|
)
|
|
||
Returned to performing status
|
|
(81
|
)
|
|
(196
|
)
|
|
||
June 30
|
|
$
|
1,854
|
|
|
$
|
2,153
|
|
|
|
|
Amount
|
|
|
|
Percentage of Total Loans Outstanding
|
|
|||||||||||||||
|
|
June 30
2018 |
|
|
December 31
2017 |
|
|
Change
|
|
June 30
2018 |
|
|
December 31
2017 |
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|
||||||||||||||||
Early stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 30 to 59 days
|
|
$
|
519
|
|
|
$
|
545
|
|
|
$
|
(26
|
)
|
|
(5
|
)%
|
|
.23
|
%
|
|
.25
|
%
|
|
Accruing loans past due 60 to 89 days
|
|
256
|
|
|
238
|
|
|
18
|
|
|
8
|
%
|
|
.11
|
%
|
|
.11
|
%
|
|
|||
Total
|
|
775
|
|
|
783
|
|
|
(8
|
)
|
|
(1
|
)%
|
|
.35
|
%
|
|
.36
|
%
|
|
|||
Late stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 90 days or more
|
|
586
|
|
|
737
|
|
|
(151
|
)
|
|
(20
|
)%
|
|
.26
|
%
|
|
.33
|
%
|
|
|||
Total
|
|
$
|
1,361
|
|
|
$
|
1,520
|
|
|
$
|
(159
|
)
|
|
(10
|
)%
|
|
.61
|
%
|
|
.69
|
%
|
|
(a)
|
Past due loan amounts include government insured or guaranteed loans of
$.7 billion
at
June 30, 2018
and $
.9 billion
at
December 31, 2017
.
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
||||||||||
Dollars in millions
|
|
Number of
Accounts
|
|
|
Unpaid
Principal
Balance
|
|
|
Number of
Accounts
|
|
|
Unpaid
Principal
Balance
|
|
|
||
Temporary modifications
|
|
2,783
|
|
|
$
|
192
|
|
|
3,033
|
|
|
$
|
217
|
|
|
Permanent modifications
|
|
22,255
|
|
|
2,453
|
|
|
23,270
|
|
|
2,581
|
|
|
||
Total consumer real estate related loan modifications
|
|
25,038
|
|
|
$
|
2,645
|
|
|
26,303
|
|
|
$
|
2,798
|
|
|
|
|
June 30
2018 |
|
|
December 31
2017 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|||||||||||
Total commercial lending
|
|
$
|
324
|
|
|
$
|
409
|
|
|
$
|
(85
|
)
|
|
(21
|
)%
|
|
Total consumer lending
|
|
1,544
|
|
|
1,652
|
|
|
(108
|
)
|
|
(7
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,868
|
|
|
$
|
2,061
|
|
|
$
|
(193
|
)
|
|
(9
|
)%
|
|
Nonperforming
|
|
$
|
863
|
|
|
$
|
964
|
|
|
$
|
(101
|
)
|
|
(10
|
)%
|
|
Accruing (b)
|
|
1,005
|
|
|
1,097
|
|
|
(92
|
)
|
|
(8
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,868
|
|
|
$
|
2,061
|
|
|
$
|
(193
|
)
|
|
(9
|
)%
|
|
(a)
|
Amounts in table represent recorded investment, which includes the unpaid principal balance plus net accounting adjustments, less any charge-offs. Recorded investment does not include any associated valuation allowance.
|
(b)
|
Accruing loans include consumer credit card loans and loans that have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans.
|
•
|
Industry concentrations and conditions,
|
•
|
Recent credit quality trends,
|
•
|
Recent loss experience in particular portfolios,
|
•
|
Recent macro-economic factors,
|
•
|
Model imprecision,
|
•
|
Changes in lending policies and procedures,
|
•
|
Timing of available information, including the performance of first lien positions, and
|
•
|
Limitations of available historical data.
|
Dollars in millions
|
|
2018
|
|
2017
|
|
||||
January 1
|
|
$
|
2,611
|
|
|
$
|
2,589
|
|
|
Total net charge-offs
|
|
(222
|
)
|
|
(228
|
)
|
|
||
Provision for credit losses
|
|
172
|
|
|
186
|
|
|
||
Net decrease / (increase) in allowance for unfunded loan commitments and letters of credit
|
|
8
|
|
|
(3
|
)
|
|
||
Other
|
|
12
|
|
|
17
|
|
|
||
June 30
|
|
$
|
2,581
|
|
|
$
|
2,561
|
|
|
Net charge-offs to average loans (for the six months ended) (annualized)
|
|
.20
|
%
|
|
.21
|
%
|
|
||
Total allowance for loan and lease losses to total loans
|
|
1.16
|
%
|
|
1.17
|
%
|
|
||
Commercial lending net charge-offs
|
|
$
|
(13
|
)
|
|
$
|
(45
|
)
|
|
Consumer lending net charge-offs
|
|
(209
|
)
|
|
(183
|
)
|
|
||
Total net charge-offs
|
|
$
|
(222
|
)
|
|
$
|
(228
|
)
|
|
Net charge-offs to average loans (for the six months ended) (annualized)
|
|
|
|
|
|
||||
Commercial lending
|
|
.02
|
%
|
|
.06
|
%
|
|
||
Consumer lending
|
|
.58
|
%
|
|
.51
|
%
|
|
Six months ended June 30
|
|
Gross
Charge-offs
|
|
|
Recoveries
|
|
|
Net
Charge-offs /
(Recoveries)
|
|
|
Percent of Average
Loans (Annualized)
|
|
|
|||
Dollars in millions
|
||||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
$
|
52
|
|
|
$
|
32
|
|
|
$
|
20
|
|
|
.04
|
%
|
|
Commercial real estate
|
|
8
|
|
|
14
|
|
|
(6
|
)
|
|
(.04
|
)%
|
|
|||
Equipment lease financing
|
|
4
|
|
|
5
|
|
|
(1
|
)
|
|
(.03
|
)%
|
|
|||
Home equity
|
|
61
|
|
|
44
|
|
|
17
|
|
|
.12
|
%
|
|
|||
Residential real estate
|
|
6
|
|
|
10
|
|
|
(4
|
)
|
|
(.05
|
)%
|
|
|||
Credit card
|
|
109
|
|
|
12
|
|
|
97
|
|
|
3.44
|
%
|
|
|||
Other consumer
|
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
|
77
|
|
|
35
|
|
|
42
|
|
|
.63
|
%
|
|
|||
Education
|
|
17
|
|
|
4
|
|
|
13
|
|
|
.61
|
%
|
|
|||
Other
|
|
52
|
|
|
8
|
|
|
44
|
|
|
2.02
|
%
|
|
|||
Total
|
|
$
|
386
|
|
|
$
|
164
|
|
|
$
|
222
|
|
|
.20
|
%
|
|
2017
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
$
|
101
|
|
|
$
|
44
|
|
|
$
|
57
|
|
|
.11
|
%
|
|
Commercial real estate
|
|
3
|
|
|
15
|
|
|
(12
|
)
|
|
(.08
|
)%
|
|
|||
Equipment lease financing
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
||||
Home equity
|
|
72
|
|
|
43
|
|
|
29
|
|
|
.20
|
%
|
|
|||
Residential real estate
|
|
4
|
|
|
8
|
|
|
(4
|
)
|
|
(.05
|
)%
|
|
|||
Credit card
|
|
92
|
|
|
11
|
|
|
81
|
|
|
3.18
|
%
|
|
|||
Other consumer
|
|
|
|
|
|
|
|
|
|
|
||||||
Automobile
|
|
58
|
|
|
28
|
|
|
30
|
|
|
.49
|
%
|
|
|||
Education
|
|
16
|
|
|
4
|
|
|
12
|
|
|
.48
|
%
|
|
|||
Other
|
|
44
|
|
|
9
|
|
|
35
|
|
|
1.58
|
%
|
|
|||
Total
|
|
$
|
392
|
|
|
$
|
164
|
|
|
$
|
228
|
|
|
.21
|
%
|
|
In billions
|
2018
|
|
|
|
January 1
|
$
|
33.3
|
|
|
Issuances
|
2.7
|
|
|
|
Calls and maturities
|
(3.2
|
)
|
|
|
Other
|
(.4
|
)
|
|
|
June 30
|
$
|
32.4
|
|
|
Issuance Date
|
Amount
|
Description of Issuance
|
June 8, 2018
|
$750 million
|
Senior notes with a maturity date of June 8, 2023. Interest is payable semi-annually at a fixed rate of 3.50% per annum on June 8 and December 8 of each year, beginning December 8, 2018.
|
•
|
Bank-level capital needs,
|
•
|
Laws and regulations,
|
•
|
Corporate policies,
|
•
|
Contractual restrictions, and
|
•
|
Other factors.
|
Dollars in millions
|
Basel III
June 30, 2018 (a) (b)
|
Fully Phased-In Basel III (Non-GAAP)
December 31, 2017 (c)
|
2017 Transitional Basel III
December 31, 2017 (a)
|
|||||||
Common equity Tier 1 capital
|
|
|
|
|
||||||
Common stock plus related surplus, net of treasury stock
|
$
|
6,656
|
|
$
|
8,195
|
|
|
$
|
8,195
|
|
Retained earnings
|
37,201
|
|
35,481
|
|
|
35,481
|
|
|||
Accumulated other comprehensive income (loss) for securities currently and those transferred from available for sale
|
(268
|
)
|
337
|
|
|
270
|
|
|||
Accumulated other comprehensive income (loss) for pension and other postretirement plans
|
(489
|
)
|
(544
|
)
|
|
(436
|
)
|
|||
Goodwill, net of associated deferred tax liabilities
|
(9,026
|
)
|
(8,988
|
)
|
|
(8,988
|
)
|
|||
Other disallowed intangibles, net of deferred tax liabilities
|
(293
|
)
|
(319
|
)
|
|
(255
|
)
|
|||
Other adjustments/(deductions)
|
(167
|
)
|
(141
|
)
|
|
(138
|
)
|
|||
Total common equity Tier 1 capital before threshold
deductions
|
33,614
|
|
34,021
|
|
|
34,129
|
|
|||
Total threshold deductions (d)
|
(3,408
|
)
|
(2,928
|
)
|
|
(1,983
|
)
|
|||
Common equity Tier 1 capital
|
30,206
|
|
31,093
|
|
|
32,146
|
|
|||
Additional Tier 1 capital
|
|
|
|
|
||||||
Preferred stock plus related surplus
|
3,987
|
|
3,985
|
|
|
3,985
|
|
|||
Other adjustments/(deductions)
|
(150
|
)
|
(146
|
)
|
|
(124
|
)
|
|||
Tier 1 capital
|
34,043
|
|
34,932
|
|
|
36,007
|
|
|||
Additional Tier 2 capital
|
|
|
|
|
||||||
Qualifying subordinated debt
|
3,205
|
|
3,433
|
|
|
3,482
|
|
|||
Trust preferred capital securities
|
80
|
|
|
|
100
|
|
||||
Eligible credit reserves includable in Tier 2 capital
|
2,870
|
|
2,907
|
|
|
2,907
|
|
|||
Total Basel III capital
|
$
|
40,198
|
|
$
|
41,272
|
|
|
$
|
42,496
|
|
Risk-weighted assets
|
|
|
|
|
||||||
Basel III standardized approach risk-weighted assets (e)
|
$
|
319,112
|
|
$
|
316,120
|
|
|
$
|
309,460
|
|
Basel III advanced approaches risk-weighted assets (f)
|
$
|
280,883
|
|
$
|
285,226
|
|
|
N/A
|
|
|
Average quarterly adjusted total assets
|
$
|
363,573
|
|
$
|
363,967
|
|
|
$
|
364,999
|
|
Supplementary leverage exposure
(g)
|
$
|
434,135
|
|
$
|
434,698
|
|
|
$
|
435,731
|
|
Basel III risk-based capital and leverage ratios
|
|
|
|
|
||||||
Common equity Tier 1 (i)
|
9.5
|
%
|
9.8
|
%
|
(h)
|
10.4
|
%
|
|||
Tier 1 (j)
|
10.7
|
%
|
11.1
|
%
|
(h)
|
11.6
|
%
|
|||
Total (k) (l) (m)
|
12.6
|
%
|
13.1
|
%
|
(h)
|
13.7
|
%
|
|||
Leverage (n)
|
9.4
|
%
|
9.6
|
%
|
|
9.9
|
%
|
|||
Supplementary leverage ratio (o)
|
7.8
|
%
|
8.0
|
%
|
|
8.3
|
%
|
(a)
|
All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented and calculated based on the standardized approach.
|
(b)
|
The Basel III Common equity Tier 1 capital, Tier 1 risk-based capital, Leverage and Supplementary ratios as of
June 30, 2018
reflect the full phase-in of all Basel III adjustments to these metrics applicable to PNC.
|
(c)
|
2017 Fully Phased-In Basel III results are presented as Pro forma estimates.
|
(d)
|
Under the Basel III rules, certain items such as significant common stock investments in unconsolidated financial institutions (primarily BlackRock), mortgage servicing rights and deferred tax assets must be deducted from capital (subject to a phase-in schedule that ended December 31, 2017 and net of associated deferred tax liabilities) to the extent they individually exceed 10%, or in the aggregate exceed 15%, of PNC's adjusted common equity Tier 1 capital.
|
(e)
|
Includes credit and market risk-weighted assets.
|
(f)
|
Basel III advanced approaches risk-weighted assets are calculated based on the Basel III advanced approaches rules, and include credit, market, and operational risk-weighted assets. During the parallel run qualification phase, PNC has refined the data, models, and internal processes used as part of the advanced approaches for determining risk-weighted assets. We anticipate additional refinements to this calculation through the parallel run qualification phase.
|
(g)
|
Supplementary leverage exposure is the sum of Adjusted average assets and certain off-balance sheet exposures including undrawn credit commitments and derivative potential future exposures.
|
(h)
|
Pro forma Fully phased-in Basel III capital ratios are based on Basel III standardized approach risk-weighted assets and rules.
|
(i)
|
For comparative purposes only, the advanced approaches Basel III Common equity Tier 1 capital ratio for
June 30, 2018
is 10.8% and for December 31, 2017 is 10.9% (estimated). This capital ratio is calculated using Common equity Tier 1 capital and dividing by Basel III advanced approaches risk-weighted assets.
|
(j)
|
For comparative purposes only, the advanced approaches Basel III Tier 1 risk-based capital ratio for
June 30, 2018
is 12.1% and for December 31, 2017 is 12.2% (estimated). This capital ratio is calculated using Tier 1 capital and dividing by Basel III advanced approaches risk-weighted assets.
|
(k)
|
For comparative purposes only, the advanced approaches Basel III Total capital risk-based capital ratio for
June 30, 2018
is 13.4% and for December 31, 2017 is 13.5% (estimated). This ratio is calculated using Total Basel III capital, which under the advanced approaches, Additional Tier 2 capital includes allowance for loan and lease losses in excess of Basel expected credit losses, if any, up to 0.6% of credit risk-weighted assets, and dividing by Basel III advanced approaches risk-weighted assets.
|
(l)
|
The Basel III Total risk-based capital ratio includes $80 million of nonqualifying trust preferred capital securities that are subject to a phase-out period that runs through 2021.
|
(m)
|
For comparative purposes only, as of
June 30, 2018
the ratio would be 12.6%, assuming nonqualifying trust preferred capital securities are phased out.
|
(n)
|
Leverage ratio is calculated based on Tier 1 capital divided by Average quarterly adjusted total assets.
|
(o)
|
Supplementary leverage ratio is calculated based on Tier 1 capital divided by Supplementary leverage exposure. As advanced approaches banking organizations, PNC and PNC Bank became subject to a 3% minimum supplementary leverage ratio effective January 1, 2018.
|
•
|
Traditional banking activities of gathering deposits and extending loans,
|
•
|
Equity and other investments and activities whose economic values are directly impacted by market factors, and
|
•
|
Fixed income securities, derivatives and foreign exchange activities, as a result of customer activities and securities underwriting.
|
|
Second Quarter 2018
|
|
|
Second Quarter 2017
|
|
|
Net Interest Income Sensitivity Simulation (a)
|
|
|
|
|
||
Effect on net interest income in first year from gradual interest rate change over the
following 12 months of:
|
|
|
|
|
||
100 basis point increase
|
2.0
|
%
|
|
2.8
|
%
|
|
100 basis point decrease
|
(2.5
|
)%
|
|
(3.3
|
)%
|
|
Effect on net interest income in second year from gradual interest rate change over the
preceding 12 months of:
|
|
|
|
|
||
100 basis point increase
|
4.1
|
%
|
|
5.4
|
%
|
|
100 basis point decrease
|
(6.5
|
)%
|
|
(8.7
|
)%
|
|
Duration of Equity Model (a)
|
|
|
|
|
||
Base case duration of equity (in years)
|
(.1
|
)
|
|
(2.5
|
)
|
|
Key Period-End Interest Rates
|
|
|
|
|
||
One-month LIBOR
|
2.09
|
%
|
|
1.22
|
%
|
|
Three-month LIBOR
|
2.34
|
%
|
|
1.30
|
%
|
|
Three-year swap
|
2.86
|
%
|
|
1.75
|
%
|
|
(a)
|
Given the inherent limitations in certain of these measurement tools and techniques, results become less meaningful as interest rates approach zero.
|
|
June 30, 2018
|
|
|||||
|
PNC
Economist
|
|
Market
Forward
|
|
Slope
Flattening
|
|
|
First year sensitivity
|
.9
|
%
|
1.2
|
%
|
(.7
|
)%
|
|
Second year sensitivity
|
.3
|
%
|
.3
|
%
|
(3.2
|
)%
|
|
|
June 30
2018 |
|
|
December 31
2017 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
|
%
|
|
|
||||||||
BlackRock
|
$
|
7,753
|
|
|
$
|
7,576
|
|
|
$
|
177
|
|
|
2
|
%
|
|
Tax credit investments
|
2,178
|
|
|
2,148
|
|
|
30
|
|
|
1
|
%
|
|
|||
Private equity and other
|
2,499
|
|
|
1,668
|
|
|
831
|
|
|
50
|
%
|
|
|||
Total
|
$
|
12,430
|
|
|
$
|
11,392
|
|
|
$
|
1,038
|
|
|
9
|
%
|
|
•
|
Fair Value Measurements
|
•
|
Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit
|
•
|
Goodwill
|
•
|
Residential and Commercial Mortgage Servicing Rights
|
•
|
Income Taxes
|
•
|
Legal Contingencies
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||||
Dollars in millions
|
Total Fair Value
|
|
|
Level 3
|
|
|
|
Total Fair Value
|
|
|
Level 3
|
|
|
||||
Total assets
|
$
|
71,936
|
|
|
$
|
6,474
|
|
|
|
$
|
69,673
|
|
|
$
|
6,475
|
|
|
Total assets at fair value as a percentage of consolidated assets
|
19
|
%
|
|
|
|
|
18
|
%
|
|
|
|
||||||
Level 3 assets as a percentage of total assets at fair value
|
|
|
9
|
%
|
|
|
|
|
9
|
%
|
|
||||||
Level 3 assets as a percentage of consolidated assets
|
|
|
2
|
%
|
|
|
|
|
2
|
%
|
|
||||||
Total liabilities
|
$
|
3,768
|
|
|
$
|
438
|
|
|
|
$
|
4,233
|
|
|
$
|
531
|
|
|
Total liabilities at fair value as a percentage of consolidated liabilities
|
1
|
%
|
|
|
|
|
1
|
%
|
|
|
|
||||||
Level 3 liabilities as a percentage of total liabilities at fair value
|
|
|
12
|
%
|
|
|
|
|
13
|
%
|
|
||||||
Level 3 liabilities as a percentage of consolidated liabilities
|
|
|
<1
|
%
|
|
|
|
|
<1
|
%
|
|
•
|
Our businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:
|
–
|
Changes in interest rates and valuations in debt, equity and other financial markets.
|
–
|
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 and market interest rates.
|
–
|
Changes in customer behavior due to newly enacted tax legislation, changing business and economic conditions or legislative or regulatory initiatives.
|
–
|
Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness.
|
–
|
Impact of tariffs and other trade policies of the U.S. and its global trading partners.
|
–
|
Slowing or reversal of the current U.S. economic expansion.
|
–
|
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 potential legal and regulatory contingencies. These statements are based on our current view that the U.S. economic growth will accelerate somewhat in
|
•
|
Our ability to take certain capital actions, including returning capital to shareholders, is subject to review by the Federal Reserve Board as part of our comprehensive capital plan for the applicable period in connection with the Federal Reserve Board’s CCAR process and to the acceptance of such capital plan and non-objection to such capital actions by the Federal Reserve Board.
|
•
|
Our 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 (particularly those implementing the international regulatory capital framework developed by the Basel Committee on Banking Supervision (Basel Committee), and management actions affecting the composition of our balance sheet. In addition, our 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 approval of related 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 affect matters such as business generation and retention, liquidity, funding, and ability to attract and retain management. These developments could include:
|
–
|
Changes resulting from legislative and regulatory reforms, including changes affecting oversight of the financial services industry, consumer protection, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles.
|
–
|
Changes to regulations governing bank capital and liquidity standards.
|
–
|
Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries. These matters may result in monetary judgments or settlements or other remedies, including fines, penalties, restitution or alterations in our business practices, and in additional expenses and collateral costs, and may cause reputational harm to us.
|
–
|
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 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.
|
•
|
Business and operating results also include impacts relating to our equity interest in BlackRock, Inc. and rely to a significant extent on information provided to us by BlackRock. Risks and uncertainties that could affect BlackRock are discussed in more detail by BlackRock in its SEC filings.
|
•
|
We grow our business in part through acquisitions. Acquisition risks and uncertainties include those presented by the nature of the business acquired, 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.
|
•
|
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 natural and other disasters, pandemics, dislocations, terrorist activities, system failures, security breaches, cyberattacks or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically.
|
Unaudited
|
Three months ended
June 30 |
|
Six months ended
June 30 |
||||||||||||
In millions, except per share data
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
||||
Interest Income
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
2,345
|
|
|
$
|
2,040
|
|
|
$
|
4,573
|
|
|
$
|
3,944
|
|
Investment securities
|
557
|
|
|
495
|
|
|
1,069
|
|
|
988
|
|
||||
Other
|
180
|
|
|
139
|
|
|
358
|
|
|
262
|
|
||||
Total interest income
|
3,082
|
|
|
2,674
|
|
|
6,000
|
|
|
5,194
|
|
||||
Interest Expense
|
|
|
|
|
|
|
|
||||||||
Deposits
|
261
|
|
|
143
|
|
|
474
|
|
|
263
|
|
||||
Borrowed funds
|
408
|
|
|
273
|
|
|
752
|
|
|
513
|
|
||||
Total interest expense
|
669
|
|
|
416
|
|
|
1,226
|
|
|
776
|
|
||||
Net interest income
|
2,413
|
|
|
2,258
|
|
|
4,774
|
|
|
4,418
|
|
||||
Noninterest Income
|
|
|
|
|
|
|
|
||||||||
Asset management
|
456
|
|
|
398
|
|
|
911
|
|
|
801
|
|
||||
Consumer services
|
381
|
|
|
360
|
|
|
738
|
|
|
692
|
|
||||
Corporate services
|
487
|
|
|
466
|
|
|
916
|
|
|
880
|
|
||||
Residential mortgage
|
84
|
|
|
104
|
|
|
181
|
|
|
217
|
|
||||
Service charges on deposits
|
169
|
|
|
170
|
|
|
336
|
|
|
331
|
|
||||
Other
|
334
|
|
|
304
|
|
|
579
|
|
|
605
|
|
||||
Total noninterest income
|
1,911
|
|
|
1,802
|
|
|
3,661
|
|
|
3,526
|
|
||||
Total revenue
|
4,324
|
|
|
4,060
|
|
|
8,435
|
|
|
7,944
|
|
||||
Provision For Credit Losses
|
80
|
|
|
98
|
|
|
172
|
|
|
186
|
|
||||
Noninterest Expense
|
|
|
|
|
|
|
|
||||||||
Personnel
|
1,356
|
|
|
1,276
|
|
|
2,710
|
|
|
2,533
|
|
||||
Occupancy
|
203
|
|
|
202
|
|
|
421
|
|
|
424
|
|
||||
Equipment
|
281
|
|
|
281
|
|
|
554
|
|
|
532
|
|
||||
Marketing
|
75
|
|
|
67
|
|
|
130
|
|
|
122
|
|
||||
Other
|
669
|
|
|
653
|
|
|
1,296
|
|
|
1,270
|
|
||||
Total noninterest expense
|
2,584
|
|
|
2,479
|
|
|
5,111
|
|
|
4,881
|
|
||||
Income before income taxes and noncontrolling interests
|
1,660
|
|
|
1,483
|
|
|
3,152
|
|
|
2,877
|
|
||||
Income taxes
|
304
|
|
|
386
|
|
|
557
|
|
|
706
|
|
||||
Net income
|
1,356
|
|
|
1,097
|
|
|
2,595
|
|
|
2,171
|
|
||||
Less: Net income attributable to noncontrolling interests
|
10
|
|
|
10
|
|
|
20
|
|
|
27
|
|
||||
Preferred stock dividends
|
55
|
|
|
55
|
|
|
118
|
|
|
118
|
|
||||
Preferred stock discount accretion and redemptions
|
1
|
|
|
2
|
|
|
2
|
|
|
23
|
|
||||
Net income attributable to common shareholders
|
$
|
1,290
|
|
|
$
|
1,030
|
|
|
$
|
2,455
|
|
|
$
|
2,003
|
|
Earnings Per Common Share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.74
|
|
|
$
|
2.12
|
|
|
$
|
5.19
|
|
|
$
|
4.10
|
|
Diluted
|
$
|
2.72
|
|
|
$
|
2.10
|
|
|
$
|
5.15
|
|
|
$
|
4.05
|
|
Average Common Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
469
|
|
|
484
|
|
|
471
|
|
|
486
|
|
||||
Diluted
|
472
|
|
|
488
|
|
|
474
|
|
|
491
|
|
Unaudited
In millions
|
|
Three months ended
June 30 |
|
Six months ended
June 30 |
|
||||||||||||
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
||||||
Net income
|
|
$
|
1,356
|
|
|
$
|
1,097
|
|
|
$
|
2,595
|
|
|
$
|
2,171
|
|
|
Other comprehensive income (loss), before tax and net of reclassifications into Net income:
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) on non-OTTI securities
|
|
(155
|
)
|
|
151
|
|
|
(801
|
)
|
|
220
|
|
|
||||
Net unrealized gains (losses) on OTTI securities
|
|
3
|
|
|
62
|
|
|
17
|
|
|
97
|
|
|
||||
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
(113
|
)
|
|
(10
|
)
|
|
(306
|
)
|
|
(87
|
)
|
|
||||
Pension and other postretirement benefit plan adjustments
|
|
6
|
|
|
45
|
|
|
69
|
|
|
(17
|
)
|
|
||||
Other
|
|
(35
|
)
|
|
22
|
|
|
(8
|
)
|
|
26
|
|
|
||||
Other comprehensive income (loss), before tax and net of reclassifications into Net income
|
|
(294
|
)
|
|
270
|
|
|
(1,029
|
)
|
|
239
|
|
|
||||
Income tax benefit (expense) related to items of other comprehensive income
|
|
53
|
|
|
(89
|
)
|
|
231
|
|
|
(72
|
)
|
|
||||
Other comprehensive income (loss), after tax and net of reclassifications into Net income
|
|
(241
|
)
|
|
181
|
|
|
(798
|
)
|
|
167
|
|
|
||||
Comprehensive income
|
|
1,115
|
|
|
1,278
|
|
|
1,797
|
|
|
2,338
|
|
|
||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
|
10
|
|
|
10
|
|
|
20
|
|
|
27
|
|
|
||||
Comprehensive income attributable to PNC
|
|
$
|
1,105
|
|
|
$
|
1,268
|
|
|
$
|
1,777
|
|
|
$
|
2,311
|
|
|
Unaudited
|
June 30
2018 |
|
|
December 31
2017 |
|
||
In millions, except par value
|
|||||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
5,425
|
|
|
$
|
5,249
|
|
Interest-earning deposits with banks
|
21,972
|
|
|
28,595
|
|
||
Loans held for sale (a)
|
1,325
|
|
|
2,655
|
|
||
Investment securities – available for sale
|
60,275
|
|
|
57,618
|
|
||
Investment securities – held to maturity
|
19,850
|
|
|
18,513
|
|
||
Loans (a)
|
222,855
|
|
|
220,458
|
|
||
Allowance for loan and lease losses
|
(2,581
|
)
|
|
(2,611
|
)
|
||
Net loans
|
220,274
|
|
|
217,847
|
|
||
Equity investments (b)
|
12,430
|
|
|
11,392
|
|
||
Mortgage servicing rights
|
2,045
|
|
|
1,832
|
|
||
Goodwill
|
9,218
|
|
|
9,173
|
|
||
Other (a)
|
27,897
|
|
|
27,894
|
|
||
Total assets
|
$
|
380,711
|
|
|
$
|
380,768
|
|
Liabilities
|
|
|
|
||||
Deposits
|
|
|
|
||||
Noninterest-bearing
|
$
|
79,047
|
|
|
$
|
79,864
|
|
Interest-bearing
|
185,838
|
|
|
185,189
|
|
||
Total deposits
|
264,885
|
|
|
265,053
|
|
||
Borrowed funds
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
22,036
|
|
|
21,037
|
|
||
Bank notes and senior debt
|
27,596
|
|
|
28,062
|
|
||
Subordinated debt
|
4,781
|
|
|
5,200
|
|
||
Other (c)
|
4,809
|
|
|
4,789
|
|
||
Total borrowed funds
|
59,222
|
|
|
59,088
|
|
||
Allowance for unfunded loan commitments and letters of credit
|
289
|
|
|
297
|
|
||
Accrued expenses and other liabilities
|
9,340
|
|
|
8,745
|
|
||
Total liabilities
|
333,736
|
|
|
333,183
|
|
||
Equity
|
|
|
|
||||
Preferred stock (d)
|
|
|
|
||||
Common stock ($5 par value, Authorized 800 shares, issued 542 shares)
|
2,710
|
|
|
2,710
|
|
||
Capital surplus
|
16,250
|
|
|
16,374
|
|
||
Retained earnings
|
37,201
|
|
|
35,481
|
|
||
Accumulated other comprehensive income (loss)
|
(940
|
)
|
|
(148
|
)
|
||
Common stock held in treasury at cost: 77 and 69 shares
|
(8,317
|
)
|
|
(6,904
|
)
|
||
Total shareholders’ equity
|
46,904
|
|
|
47,513
|
|
||
Noncontrolling interests
|
71
|
|
|
72
|
|
||
Total equity
|
46,975
|
|
|
47,585
|
|
||
Total liabilities and equity
|
$
|
380,711
|
|
|
$
|
380,768
|
|
(a)
|
Our consolidated assets included the following for which we have elected the fair value option: Loans held for sale of
$1.2 billion
, Loans of
$.8 billion
and Other assets of
$.2 billion
at
June 30, 2018
and Loans held for sale of
$1.7 billion
, Loans of
$.9 billion
and Other assets of
$.3 billion
at
December 31, 2017
.
|
(b)
|
Amounts include our equity interest in BlackRock. Effective for the first quarter of 2018, $.6 billion of trading and available for sale securities, primarily money market funds, were reclassified to Equity investments on January 1, 2018 in accordance with the adoption of Accounting Standards Update 2016-01, Financial Instruments - Overall:
Recognition and Measurement of Financial Assets and Financial Liabilities
.
|
(c)
|
Our consolidated liabilities at both
June 30, 2018
and
December 31, 2017
included Other borrowed funds of
$.1 billion
for which we have elected the fair value option.
|
(d)
|
Par value less than $.5 million at each date.
|
Unaudited
In millions
|
|
Six months ended
June 30 |
|
||||||
2018
|
|
|
2017
|
|
|
||||
Operating Activities
|
|
|
|
|
|
||||
Net income
|
|
$
|
2,595
|
|
|
$
|
2,171
|
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities
|
|
|
|
|
|
||||
Provision for credit losses
|
|
172
|
|
|
186
|
|
|
||
Depreciation and amortization
|
|
567
|
|
|
568
|
|
|
||
Deferred income taxes
|
|
167
|
|
|
80
|
|
|
||
Changes in fair value of mortgage servicing rights
|
|
(76
|
)
|
|
153
|
|
|
||
Undistributed earnings of BlackRock
|
|
(268
|
)
|
|
(198
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Trading securities and other short-term investments
|
|
161
|
|
|
(1,076
|
)
|
|
||
Loans held for sale
|
|
1,322
|
|
|
450
|
|
|
||
Other assets
|
|
(1,708
|
)
|
|
451
|
|
|
||
Accrued expenses and other liabilities
|
|
1,563
|
|
|
(364
|
)
|
|
||
Other
|
|
44
|
|
|
(201
|
)
|
|
||
Net cash provided (used) by operating activities
|
|
$
|
4,539
|
|
|
$
|
2,220
|
|
|
Investing Activities
|
|
|
|
|
|
||||
Sales
|
|
|
|
|
|
||||
Securities available for sale
|
|
$
|
5,189
|
|
|
$
|
3,504
|
|
|
Loans
|
|
761
|
|
|
776
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Securities available for sale
|
|
4,478
|
|
|
5,389
|
|
|
||
Securities held to maturity
|
|
1,254
|
|
|
1,269
|
|
|
||
Purchases
|
|
|
|
|
|
||||
Securities available for sale
|
|
(13,776
|
)
|
|
(6,634
|
)
|
|
||
Securities held to maturity
|
|
(2,663
|
)
|
|
(2,788
|
)
|
|
||
Loans
|
|
(299
|
)
|
|
(315
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Federal funds sold and resale agreements
|
|
434
|
|
|
(353
|
)
|
|
||
Interest-earning deposits with banks
|
|
6,623
|
|
|
3,229
|
|
|
||
Loans
|
|
(3,472
|
)
|
|
(7,080
|
)
|
|
||
Net cash paid for acquisition
|
|
|
|
(1,323
|
)
|
|
|||
Other
|
|
(988
|
)
|
|
(443
|
)
|
|
||
Net cash provided (used) by investing activities
|
|
$
|
(2,459
|
)
|
|
$
|
(4,769
|
)
|
|
Unaudited
In millions
|
|
Six Months Ended
June 30 |
|
||||||
2018
|
|
|
2017
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||||
Net change in
|
|
|
|
|
|
||||
Noninterest-bearing deposits
|
|
$
|
(862
|
)
|
|
$
|
(663
|
)
|
|
Interest-bearing deposits
|
|
649
|
|
|
2,692
|
|
|
||
Federal funds purchased and repurchase agreements
|
|
511
|
|
|
440
|
|
|
||
Federal Home Loan Bank borrowings
|
|
2,500
|
|
|
|
|
|||
Commercial paper
|
|
(100
|
)
|
|
|
|
|||
Other borrowed funds
|
|
(225
|
)
|
|
485
|
|
|
||
Sales/issuances
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
1,500
|
|
|
6,000
|
|
|
||
Bank notes and senior debt
|
|
2,738
|
|
|
4,063
|
|
|
||
Other borrowed funds
|
|
256
|
|
|
162
|
|
|
||
Common and treasury stock
|
|
40
|
|
|
68
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
(3,001
|
)
|
|
(4,510
|
)
|
|
||
Bank notes and senior debt
|
|
(2,850
|
)
|
|
(1,000
|
)
|
|
||
Subordinated debt
|
|
(324
|
)
|
|
(1,908
|
)
|
|
||
Other borrowed funds
|
|
(264
|
)
|
|
(88
|
)
|
|
||
Redemption of noncontrolling interests
|
|
|
|
|
(1,000
|
)
|
|
||
Acquisition of treasury stock
|
|
(1,641
|
)
|
|
(1,374
|
)
|
|
||
Preferred stock cash dividends paid
|
|
(118
|
)
|
|
(118
|
)
|
|
||
Common stock cash dividends paid
|
|
(713
|
)
|
|
(540
|
)
|
|
||
Net cash provided (used) by financing activities
|
|
$
|
(1,904
|
)
|
|
$
|
2,709
|
|
|
Net Increase (Decrease) In Cash And Due From Banks
|
|
176
|
|
|
160
|
|
|
||
Cash and due from banks at beginning of period
|
|
5,249
|
|
|
4,879
|
|
|
||
Cash and due from banks at end of period
|
|
$
|
5,425
|
|
|
$
|
5,039
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
||||
Interest paid
|
|
$
|
1,182
|
|
|
$
|
793
|
|
|
Income taxes paid
|
|
$
|
102
|
|
|
$
|
30
|
|
|
Income taxes refunded
|
|
$
|
461
|
|
|
$
|
11
|
|
|
Non-cash Investing and Financing Items
|
|
|
|
|
|
||||
Transfer from loans to loans held for sale, net
|
|
$
|
294
|
|
|
$
|
233
|
|
|
Transfer from loans to foreclosed assets
|
|
$
|
100
|
|
|
$
|
112
|
|
|
•
|
Lending,
|
•
|
Securities portfolio,
|
•
|
Asset management,
|
•
|
Customer deposits,
|
•
|
Loan sales, loan securitizations, and servicing,
|
•
|
Brokerage services,
|
•
|
Sale of securities,
|
•
|
Certain private equity activities, and
|
•
|
Securities, derivatives and foreign exchange activities.
|
•
|
Issuing loan commitments, standby letters of credit and financial guarantees,
|
•
|
Deposit account services,
|
•
|
Merchant services,
|
•
|
Selling various insurance products,
|
•
|
Providing treasury management services,
|
•
|
Providing merger and acquisition advisory and related services
|
•
|
Debit and credit card transactions, and
|
•
|
Participating in certain capital markets transactions.
|
•
|
Equity securities that have a readily determinable fair value are included in Equity investments on our Consolidated Balance Sheet. Both realized and unrealized gains and losses are included in Noninterest income. Dividend income on these equity securities is included in Other interest income on our consolidated income statement.
|
•
|
For investments in limited partnerships, limited liability companies and other investments that are not required to be consolidated, we use either the equity method of accounting or the practicability exception to fair value. We use the equity method for general and limited partner ownership interests and limited liability companies in which we are considered to have significant influence over the operations of the investee. Under the equity method, we record our equity ownership share of net income or loss of the investee in Noninterest income and any dividends received on equity method investments are recorded as a reduction to the investment balance. When an equity investment experiences an other-than-temporary decline in value, we may be required to record a loss on the investment.
|
•
|
We generally use the practicability exception to fair value for all other investments. When we elect this alternative measurement method, the carrying value is adjusted for impairment, if any, plus or minus changes in value resulting from observable price changes in orderly transactions for identical or similar instruments of the same issuer. These investments are written down to fair value if a qualitative assessment indicates impairment and the fair value is less than the carrying value. The amount of the write-down is accounted for as a loss included in Noninterest income. Distributions received on these investments are included in Noninterest income.
|
In millions
|
Residential
Mortgages |
|
|
Commercial
Mortgages (a) |
|
|
|||
Cash Flows - Three months ended June 30, 2018
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
1,051
|
|
|
|
$
|
458
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
77
|
|
|
|
|
|
||
Servicing fees (d)
|
$
|
89
|
|
|
|
$
|
35
|
|
|
Servicing advances recovered/(funded), net
|
$
|
39
|
|
|
|
$
|
(12
|
)
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
449
|
|
|
|
$
|
28
|
|
|
Cash Flows - Three months ended June 30, 2017
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
1,323
|
|
|
|
$
|
742
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
97
|
|
|
|
|
|
||
Servicing fees (d)
|
$
|
92
|
|
|
|
$
|
30
|
|
|
Servicing advances recovered/(funded), net
|
$
|
42
|
|
|
|
$
|
(5
|
)
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
345
|
|
|
|
$
|
54
|
|
|
Cash Flows - Six months ended June 30, 2018
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
2,244
|
|
|
|
$
|
1,660
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
196
|
|
|
|
|
|
||
Servicing fees (d)
|
$
|
181
|
|
|
|
$
|
66
|
|
|
Servicing advances recovered/(funded), net
|
$
|
43
|
|
|
|
$
|
5
|
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
871
|
|
|
|
$
|
49
|
|
|
Cash Flows - Six months ended June 30, 2017
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
2,917
|
|
|
|
$
|
2,359
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
228
|
|
|
|
|
|
||
Servicing fees (d)
|
$
|
186
|
|
|
|
$
|
63
|
|
|
Servicing advances recovered/(funded), net
|
$
|
84
|
|
|
|
$
|
26
|
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
694
|
|
|
|
$
|
183
|
|
|
(a)
|
Represents cash flow information associated with both commercial mortgage loan transfers and servicing activities.
|
(b)
|
Gains/losses recognized on sales of loans were insignificant for the periods presented.
|
(c)
|
Includes residential mortgage government insured or guaranteed loans eligible for repurchase through the exercise of our removal of account provision option and loans repurchased due to alleged breaches of origination covenants or representations and warranties made to purchasers.
|
(d)
|
Includes contractually specified servicing fees, late charges and ancillary fees.
|
(e)
|
Represents cash flows on securities where we transferred to and/or service loans for a securitization SPE and we hold securities issued by that SPE. The carrying values of such securities held were
$12.4 billion
,
$8.8 billion
, and
$7.2 billion
in residential mortgage-backed securities and
$.7 billion
,
$.6 billion
, and
$.7 billion
in commercial mortgage-backed securities at
June 30, 2018
,
December 31, 2017
, and
June 30, 2017
, respectively.
|
In millions
|
Residential
Mortgages |
|
|
|
Commercial
Mortgages (a) |
|
|
||
June 30, 2018
|
|
|
|
|
|
||||
Total principal balance
|
$
|
56,042
|
|
|
|
$
|
51,042
|
|
|
Delinquent loans (b)
|
$
|
695
|
|
|
|
$
|
279
|
|
|
December 31, 2017
|
|
|
|
|
|
||||
Total principal balance
|
$
|
58,320
|
|
|
|
$
|
49,116
|
|
|
Delinquent loans (b)
|
$
|
899
|
|
|
|
$
|
355
|
|
|
Three months ended June 30, 2018
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
13
|
|
|
|
$
|
22
|
|
|
Three months ended June 30, 2017
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
24
|
|
|
|
$
|
56
|
|
|
Six months ended June 30, 2018
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
25
|
|
|
|
$
|
52
|
|
|
Six months ended June 30, 2017
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
49
|
|
|
|
$
|
411
|
|
|
(a)
|
Represents information at the securitization level in which we have sold loans and we are the servicer for the securitization.
|
(b)
|
Serviced delinquent loans are 90 days or more past due or are in process of foreclosure.
|
(c)
|
Net charge-offs for Residential mortgages represent credit losses less recoveries distributed and as reported to investors during the period. Net charge-offs for Commercial mortgages represent credit losses less recoveries distributed and as reported by the trustee for commercial mortgage backed securitizations. Realized losses for Agency securitizations are not reflected as we do not manage the underlying real estate upon foreclosure and, as such, do not have access to loss information.
|
In millions
|
PNC Risk of Loss (a)
|
|
|
|
Carrying Value of Assets
Owned by PNC |
|
|
|
|
Carrying Value of Liabilities
Owned by PNC |
|
|
|||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-Backed Securitizations (b)
|
$
|
13,476
|
|
|
|
$
|
13,476
|
|
(c)
|
|
|
|
|
||
Tax Credit Investments and Other
|
3,025
|
|
|
|
3,001
|
|
(d)
|
|
|
$
|
841
|
|
(e)
|
||
Total
|
$
|
16,501
|
|
|
|
$
|
16,477
|
|
|
|
|
$
|
841
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-Backed Securitizations (b)
|
$
|
9,738
|
|
|
|
$
|
9,738
|
|
(c)
|
|
|
|
|
||
Tax Credit Investments and Other
|
3,069
|
|
|
|
3,001
|
|
(d)
|
|
|
$
|
858
|
|
(e)
|
||
Total
|
$
|
12,807
|
|
|
|
$
|
12,739
|
|
|
|
|
$
|
858
|
|
|
(a)
|
This represents loans, investments and other assets related to non-consolidated VIEs, net of collateral (if applicable). The risk of loss excludes any potential tax recapture associated with tax credit investments.
|
(b)
|
Amounts reflect involvement with securitization SPEs where we transferred to and/or service loans for an SPE and we hold securities issued by that SPE. Values disclosed in the PNC Risk of Loss column represent our maximum exposure to loss for those securities’ holdings.
|
(c)
|
Included in Investment securities, Mortgage servicing rights and Other assets on our Consolidated Balance Sheet.
|
(d)
|
Included in Investment securities, Loans, Equity investments and Other assets on our Consolidated Balance Sheet.
|
(e)
|
Included in Total deposits and Other liabilities on our Consolidated Balance Sheet.
|
|
Accruing
|
|
|
|
|
|
|
||||||||||||||||||||||
Dollars in millions
|
Current or Less
Than 30 Days
Past Due
|
|
30-59 Days
Past Due
|
|
60-89 Days
Past Due
|
|
90 Days
Or More
Past Due
|
|
Total Past
Due
|
|
|
Nonperforming
Loans
|
|
Fair Value
Option
Nonaccrual
Loans (c)
|
|
Purchased
Impaired
Loans
|
|
Total
Loans (d)
|
|
|
|||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
$
|
112,872
|
|
$
|
57
|
|
$
|
41
|
|
$
|
59
|
|
$
|
157
|
|
|
$
|
338
|
|
|
|
$
|
113,367
|
|
|
||||
Commercial real estate
|
28,855
|
|
18
|
|
2
|
|
|
20
|
|
|
71
|
|
|
|
28,946
|
|
|
||||||||||||
Equipment lease financing
|
7,299
|
|
12
|
|
7
|
|
|
19
|
|
|
5
|
|
|
|
7,323
|
|
|
||||||||||||
Total commercial lending
|
149,026
|
|
87
|
|
50
|
|
59
|
|
196
|
|
|
414
|
|
|
|
|
149,636
|
|
|
||||||||||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity
|
25,475
|
|
97
|
|
40
|
|
|
137
|
|
|
821
|
|
|
$
|
786
|
|
27,219
|
|
|
||||||||||
Residential real estate
|
15,268
|
|
129
|
|
66
|
|
353
|
|
548
|
|
(b)
|
381
|
|
$
|
183
|
|
1,425
|
|
17,805
|
|
|
||||||||
Credit card
|
5,715
|
|
40
|
|
24
|
|
44
|
|
108
|
|
|
7
|
|
|
|
5,830
|
|
|
|||||||||||
Other consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Automobile
|
13,696
|
|
82
|
|
20
|
|
7
|
|
109
|
|
|
87
|
|
|
|
13,892
|
|
|
|||||||||||
Education and other
|
8,201
|
|
84
|
|
56
|
|
123
|
|
263
|
|
(b)
|
9
|
|
|
|
8,473
|
|
|
|||||||||||
Total consumer lending
|
68,355
|
|
432
|
|
206
|
|
527
|
|
1,165
|
|
|
1,305
|
|
183
|
|
2,211
|
|
73,219
|
|
|
|||||||||
Total
|
$
|
217,381
|
|
$
|
519
|
|
$
|
256
|
|
$
|
586
|
|
$
|
1,361
|
|
|
$
|
1,719
|
|
$
|
183
|
|
$
|
2,211
|
|
$
|
222,855
|
|
|
Percentage of total loans
|
97.55
|
%
|
.23
|
%
|
.11
|
%
|
.26
|
%
|
.61
|
%
|
|
.77
|
%
|
.08
|
%
|
.99
|
%
|
100.00
|
%
|
|
|||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
$
|
109,989
|
|
$
|
45
|
|
$
|
25
|
|
$
|
39
|
|
$
|
109
|
|
|
$
|
429
|
|
|
|
|
$
|
110,527
|
|
|
|||
Commercial real estate
|
28,826
|
|
27
|
|
2
|
|
|
29
|
|
|
123
|
|
|
|
|
28,978
|
|
|
|||||||||||
Equipment lease financing
|
7,914
|
|
17
|
|
1
|
|
|
18
|
|
|
2
|
|
|
|
7,934
|
|
|
||||||||||||
Total commercial lending
|
146,729
|
|
89
|
|
28
|
|
39
|
|
156
|
|
|
554
|
|
|
|
147,439
|
|
|
|||||||||||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity
|
26,561
|
|
78
|
|
26
|
|
|
104
|
|
|
818
|
|
|
$
|
881
|
|
28,364
|
|
|
||||||||||
Residential real estate
|
14,389
|
|
151
|
|
74
|
|
486
|
|
711
|
|
(b)
|
400
|
|
$
|
197
|
|
1,515
|
|
17,212
|
|
|
||||||||
Credit card
|
5,579
|
|
43
|
|
26
|
|
45
|
|
114
|
|
|
6
|
|
|
|
5,699
|
|
|
|||||||||||
Other consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Automobile
|
12,697
|
|
79
|
|
20
|
|
8
|
|
107
|
|
|
76
|
|
|
|
12,880
|
|
|
|||||||||||
Education and other
|
8,525
|
|
105
|
|
64
|
|
159
|
|
328
|
|
(b)
|
11
|
|
|
|
8,864
|
|
|
|||||||||||
Total consumer lending
|
67,751
|
|
456
|
|
210
|
|
698
|
|
1,364
|
|
|
1,311
|
|
197
|
|
2,396
|
|
73,019
|
|
|
|||||||||
Total
|
$
|
214,480
|
|
$
|
545
|
|
$
|
238
|
|
$
|
737
|
|
$
|
1,520
|
|
|
$
|
1,865
|
|
$
|
197
|
|
$
|
2,396
|
|
$
|
220,458
|
|
|
Percentage of total loans
|
97.29
|
%
|
.25
|
%
|
.11
|
%
|
.33
|
%
|
.69
|
%
|
|
.85
|
%
|
.09
|
%
|
1.08
|
%
|
100.00
|
%
|
|
(a)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment in a loan includes the unpaid principal balance plus net accounting adjustments, less any charge-offs. Recorded investment does not include any associated valuation allowance.
|
(b)
|
Past due loan amounts exclude purchased impaired loans, even if contractually past due (or if we do not expect to receive payment in full based on the original contractual terms), as we are currently accreting interest income over the expected life of the loans. Past due loan amounts include government insured or guaranteed Residential real estate mortgages totaling $
.5 billion
and $
.6 billion
at
June 30, 2018
and
December 31, 2017
, respectively, and Education and other consumer loans totaling $
.2 billion
and $
.3 billion
at
June 30, 2018
and
December 31, 2017
, respectively.
|
(c)
|
Consumer loans accounted for under the fair value option for which we do not expect to collect substantially all principal and interest are subject to nonaccrual accounting and classification upon meeting any of our nonaccrual policies. Given that these loans are not accounted for at amortized cost, these loans have been excluded from the nonperforming loan population.
|
(d)
|
Net of unearned income, net deferred loan fees, unamortized discounts and premiums, and purchase discounts and premiums totaling $
1.2
billion at both
June 30, 2018
and
December 31, 2017
.
|
Dollars in millions
|
|
June 30
2018 |
|
|
December 31
2017 |
|
|
||
Nonperforming loans
|
|
|
|
|
|
||||
Total commercial lending
|
|
$
|
414
|
|
|
$
|
554
|
|
|
Total consumer lending (a)
|
|
1,305
|
|
|
1,311
|
|
|
||
Total nonperforming loans
|
|
1,719
|
|
|
1,865
|
|
|
||
OREO, foreclosed and other assets
|
|
135
|
|
|
170
|
|
|
||
Total nonperforming assets
|
|
$
|
1,854
|
|
|
$
|
2,035
|
|
|
Nonperforming loans to total loans
|
|
.77
|
%
|
|
.85
|
%
|
|
||
Nonperforming assets to total loans, OREO, foreclosed and other assets
|
|
.83
|
%
|
|
.92
|
%
|
|
||
Nonperforming assets to total assets
|
|
.49
|
%
|
|
.53
|
%
|
|
(a)
|
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.
|
|
|
|
|
Criticized Commercial Loans
|
|
|
|
||||||||||||||
In millions
|
|
Pass Rated
|
|
|
Special
Mention (b)
|
|
|
Substandard (c)
|
|
|
Doubtful (d)
|
|
|
Total Loans
|
|
|
|||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
107,584
|
|
|
$
|
2,180
|
|
|
$
|
3,535
|
|
|
$
|
68
|
|
|
$
|
113,367
|
|
|
Commercial real estate
|
|
28,523
|
|
|
159
|
|
|
262
|
|
|
2
|
|
|
28,946
|
|
|
|||||
Equipment lease financing
|
|
7,153
|
|
|
82
|
|
|
85
|
|
|
3
|
|
|
7,323
|
|
|
|||||
Total commercial lending
|
|
$
|
143,260
|
|
|
$
|
2,421
|
|
|
$
|
3,882
|
|
|
$
|
73
|
|
|
$
|
149,636
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
105,280
|
|
|
$
|
1,858
|
|
|
$
|
3,331
|
|
|
$
|
58
|
|
|
$
|
110,527
|
|
|
Commercial real estate
|
|
28,380
|
|
|
148
|
|
|
435
|
|
|
15
|
|
|
28,978
|
|
|
|||||
Equipment lease financing
|
|
7,754
|
|
|
77
|
|
|
102
|
|
|
1
|
|
|
7,934
|
|
|
|||||
Total commercial lending
|
|
$
|
141,414
|
|
|
$
|
2,083
|
|
|
$
|
3,868
|
|
|
$
|
74
|
|
|
$
|
147,439
|
|
|
(a)
|
Loans are classified as “Pass”, “Special Mention”, “Substandard” and “Doubtful” based on the Regulatory Classification definitions. We use probability of default and loss given default to rate commercial loans.
|
(b)
|
Special Mention rated loans have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects at some future date. These loans do not expose us to sufficient risk to warrant a more adverse classification at the reporting date.
|
(c)
|
Substandard rated loans have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.
|
(d)
|
Doubtful rated loans possess all the inherent weaknesses of a Substandard rated loan with the additional characteristics that the weakness makes collection or liquidation in full improbable due to existing facts, conditions and values.
|
|
|
Home Equity
|
|
Residential
Real Estate
|
|
|
Total
|
|
|
||||||||
June 30, 2018 - in millions
|
|
1st Liens
|
|
|
2nd Liens
|
|
|
|
|||||||||
Current estimated LTV ratios
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than or equal to 125% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
$
|
184
|
|
|
$
|
385
|
|
|
$
|
161
|
|
|
$
|
730
|
|
|
Less than or equal to 660 (b)
|
|
25
|
|
|
52
|
|
|
24
|
|
|
101
|
|
|
||||
Missing FICO
|
|
1
|
|
|
4
|
|
|
2
|
|
|
7
|
|
|
||||
Greater than or equal to 100% to less than 125% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
333
|
|
|
781
|
|
|
302
|
|
|
1,416
|
|
|
||||
Less than or equal to 660 (b)
|
|
47
|
|
|
97
|
|
|
31
|
|
|
175
|
|
|
||||
Missing FICO
|
|
2
|
|
|
5
|
|
|
3
|
|
|
10
|
|
|
||||
Greater than or equal to 90% to less than 100% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
332
|
|
|
863
|
|
|
337
|
|
|
1,532
|
|
|
||||
Less than or equal to 660
|
|
44
|
|
|
97
|
|
|
30
|
|
|
171
|
|
|
||||
Missing FICO
|
|
2
|
|
|
5
|
|
|
2
|
|
|
9
|
|
|
||||
Less than 90% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
13,340
|
|
|
7,735
|
|
|
14,145
|
|
|
35,220
|
|
|
||||
Less than or equal to 660
|
|
1,157
|
|
|
778
|
|
|
562
|
|
|
2,497
|
|
|
||||
Missing FICO
|
|
35
|
|
|
56
|
|
|
97
|
|
|
188
|
|
|
||||
Total home equity and residential real estate loans
|
|
$
|
15,502
|
|
|
$
|
10,858
|
|
|
$
|
15,696
|
|
|
$
|
42,056
|
|
|
December 31, 2017 - in millions
|
|
Home Equity
|
|
Residential
Real Estate
|
|
|
Total
|
|
|
||||||||
1st Liens
|
|
|
2nd Liens
|
|
|
|
|||||||||||
Current estimated LTV ratios
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than or equal to 125% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
$
|
108
|
|
|
$
|
385
|
|
|
$
|
126
|
|
|
$
|
619
|
|
|
Less than or equal to 660 (b)
|
|
21
|
|
|
64
|
|
|
23
|
|
|
108
|
|
|
||||
Missing FICO
|
|
1
|
|
|
5
|
|
|
1
|
|
|
7
|
|
|
||||
Greater than or equal to 100% to less than 125% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
300
|
|
|
842
|
|
|
253
|
|
|
1,395
|
|
|
||||
Less than or equal to 660 (b)
|
|
46
|
|
|
143
|
|
|
45
|
|
|
234
|
|
|
||||
Missing FICO
|
|
2
|
|
|
9
|
|
|
5
|
|
|
16
|
|
|
||||
Greater than or equal to 90% to less than 100% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
331
|
|
|
890
|
|
|
324
|
|
|
1,545
|
|
|
||||
Less than or equal to 660
|
|
55
|
|
|
134
|
|
|
55
|
|
|
244
|
|
|
||||
Missing FICO
|
|
2
|
|
|
9
|
|
|
4
|
|
|
15
|
|
|
||||
Less than 90% and updated FICO scores:
|
|
|
|
|
|
|
|
|
|
||||||||
Greater than 660
|
|
13,954
|
|
|
8,066
|
|
|
13,445
|
|
|
35,465
|
|
|
||||
Less than or equal to 660
|
|
1,214
|
|
|
774
|
|
|
507
|
|
|
2,495
|
|
|
||||
Missing FICO
|
|
42
|
|
|
57
|
|
|
95
|
|
|
194
|
|
|
||||
Total home equity and residential real estate loans
|
|
$
|
16,076
|
|
|
$
|
11,378
|
|
|
$
|
14,883
|
|
|
$
|
42,337
|
|
|
(a)
|
Amounts shown represent recorded investment.
|
(b)
|
Higher risk loans are defined as loans with both an updated FICO score of less than or equal to 660 and an updated LTV greater than or equal to 100%. The following states had the highest percentage of higher risk loans at
June 30, 2018
: New Jersey
17%
, Pennsylvania
17%
, Illinois
13%
, Ohio
9%
, Maryland
7%
, Florida
5%
, North Carolina
4%
and Michigan
4%
. The remainder of the states had lower than
4%
of the higher risk loans individually, and collectively they represent approximately
24%
of the higher risk loans. The following states had the highest percentage of higher risk loans at
December 31, 2017
: New Jersey
17%
, Pennsylvania
13%
, Illinois
13%
, Ohio
9%
, Maryland
8%
, Florida
6%
, North Carolina
5%
and Michigan
4%
. The remainder of the states had lower than
4%
of the higher risk loans individually, and collectively they represent approximately
25%
of the higher risk loans.
|
|
|
Credit Card
|
|
Other Consumer (a)
|
|
||||||||||
Dollars in millions
|
|
Amount
|
|
|
% of Total Loans
Using FICO
Credit Metric
|
|
|
Amount
|
|
|
% of Total Loans
Using FICO
Credit Metric
|
|
|
||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||
FICO score greater than 719
|
|
$
|
3,522
|
|
|
61
|
%
|
|
$
|
10,427
|
|
|
60
|
%
|
|
650 to 719
|
|
1,633
|
|
|
28
|
%
|
|
4,828
|
|
|
28
|
%
|
|
||
620 to 649
|
|
253
|
|
|
4
|
%
|
|
913
|
|
|
5
|
%
|
|
||
Less than 620
|
|
279
|
|
|
5
|
%
|
|
906
|
|
|
5
|
%
|
|
||
No FICO score available or required (b)
|
|
143
|
|
|
2
|
%
|
|
324
|
|
|
2
|
%
|
|
||
Total loans using FICO credit metric
|
|
5,830
|
|
|
100
|
%
|
|
17,398
|
|
|
100
|
%
|
|
||
Consumer loans using other internal credit metrics (a)
|
|
|
|
|
|
4,967
|
|
|
|
|
|||||
Total loan balance
|
|
$
|
5,830
|
|
|
|
|
$
|
22,365
|
|
|
|
|
||
Weighted-average updated FICO score (b)
|
|
|
|
734
|
|
|
|
|
736
|
|
|
||||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||
FICO score greater than 719
|
|
$
|
3,457
|
|
|
61
|
%
|
|
$
|
10,366
|
|
|
63
|
%
|
|
650 to 719
|
|
1,596
|
|
|
28
|
%
|
|
4,352
|
|
|
27
|
%
|
|
||
620 to 649
|
|
250
|
|
|
4
|
%
|
|
659
|
|
|
4
|
%
|
|
||
Less than 620
|
|
272
|
|
|
5
|
%
|
|
715
|
|
|
4
|
%
|
|
||
No FICO score available or required (b)
|
|
124
|
|
|
2
|
%
|
|
314
|
|
|
2
|
%
|
|
||
Total loans using FICO credit metric
|
|
5,699
|
|
|
100
|
%
|
|
16,406
|
|
|
100
|
%
|
|
||
Consumer loans using other internal credit metrics (a)
|
|
|
|
|
|
5,338
|
|
|
|
|
|||||
Total loan balance
|
|
$
|
5,699
|
|
|
|
|
$
|
21,744
|
|
|
|
|
||
Weighted-average updated FICO score (b)
|
|
|
|
735
|
|
|
|
|
741
|
|
|
(a)
|
We use updated FICO scores as an asset quality indicator for non-government guaranteed or insured education loans, automobile loans and other secured and unsecured lines and loans. We use internal credit metrics, such as delinquency status, geography or other factors, as an asset quality indicator for government guaranteed or insured education loans and consumer loans to high net worth individuals, as internal credit metrics are more relevant than FICO scores for these types of loans.
|
(b)
|
Credit card loans and other consumer loans with no FICO score available or required generally refers to new accounts issued to borrowers with limited credit history, accounts for which we cannot obtain an updated FICO score (
e.g.,
recent profile changes), cards issued with a business name and/or cards secured by collateral. Management proactively assesses the risk and size of this loan portfolio and, when necessary, takes actions to mitigate the credit risk. Weighted-average updated FICO score excludes accounts with no FICO score available or required.
|
|
|
|
Pre-TDR
Recorded
Investment (b)
|
|
|
Post-TDR Recorded Investment (c)
|
|
|||||||||||||||||
During the three months ended June 30, 2018
Dollars in millions |
Number
of Loans
|
|
|
Principal
Forgiveness
|
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
|||||||||
Total commercial lending
|
|
15
|
|
|
$
|
20
|
|
|
|
|
$
|
1
|
|
|
$
|
17
|
|
|
$
|
18
|
|
|
||
Total consumer lending
|
|
2,889
|
|
|
35
|
|
|
$
|
1
|
|
|
17
|
|
|
13
|
|
|
31
|
|
|
||||
Total TDRs
|
|
2,904
|
|
|
$
|
55
|
|
|
$
|
1
|
|
|
$
|
18
|
|
|
$
|
30
|
|
|
$
|
49
|
|
|
During the three months ended June 30, 2017
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial lending
|
|
33
|
|
|
$
|
177
|
|
|
|
|
|
|
|
$
|
156
|
|
|
$
|
156
|
|
|
|||
Total consumer lending
|
|
2,975
|
|
|
54
|
|
|
|
|
$
|
43
|
|
|
16
|
|
|
59
|
|
|
|||||
Total TDRs
|
|
3,008
|
|
|
$
|
231
|
|
|
|
|
|
$
|
43
|
|
|
$
|
172
|
|
|
$
|
215
|
|
|
|
|
|
Pre-TDR
Recorded
Investment (b)
|
|
|
Post-TDR Recorded Investment (c)
|
|
|||||||||||||||||
During the six months ended June 30, 2018
Dollars in millions
|
Number
of Loans
|
|
|
Principal
Forgiveness
|
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
|||||||||
Total commercial lending
|
|
47
|
|
|
$
|
30
|
|
|
|
|
$
|
2
|
|
|
$
|
24
|
|
|
$
|
26
|
|
|
||
Total consumer lending
|
|
5,868
|
|
|
84
|
|
|
$
|
1
|
|
|
47
|
|
|
29
|
|
|
77
|
|
|
||||
Total TDRs
|
|
5,915
|
|
|
$
|
114
|
|
|
$
|
1
|
|
|
$
|
49
|
|
|
$
|
53
|
|
|
$
|
103
|
|
|
During the six months ended June 30, 2017
Dollars in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total commercial lending
|
|
82
|
|
|
$
|
212
|
|
|
$
|
4
|
|
|
$
|
6
|
|
|
$
|
161
|
|
|
$
|
171
|
|
|
Total consumer lending
|
|
5,874
|
|
|
127
|
|
|
|
|
80
|
|
|
47
|
|
|
127
|
|
|
||||||
Total TDRs
|
|
5,956
|
|
|
$
|
339
|
|
|
$
|
4
|
|
|
$
|
86
|
|
|
$
|
208
|
|
|
$
|
298
|
|
|
(a)
|
Impact of partial charge-offs at TDR date are included in this table.
|
(b)
|
Represents the recorded investment of the loans as of the quarter end prior to TDR designation, and excludes immaterial amounts of accrued interest receivable.
|
(c)
|
Represents the recorded investment of the TDRs as of the end of the quarter in which the TDR occurs, and excludes immaterial amounts of accrued interest receivable.
|
In millions
|
|
Unpaid
Principal
Balance
|
|
|
Recorded
Investment
|
|
|
Associated
Allowance
|
|
|
Average
Recorded
Investment (a)
|
|
|
||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
||||||||
Impaired loans with an associated allowance
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial lending
|
|
$
|
541
|
|
|
$
|
370
|
|
|
$
|
89
|
|
|
$
|
365
|
|
|
Total consumer lending
|
|
944
|
|
|
894
|
|
|
147
|
|
|
941
|
|
|
||||
Total impaired loans with an associated allowance
|
|
1,485
|
|
|
1,264
|
|
|
236
|
|
|
1,306
|
|
|
||||
Impaired loans without an associated allowance
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial lending
|
|
236
|
|
|
194
|
|
|
|
|
295
|
|
|
|||||
Total consumer lending
|
|
1,089
|
|
|
650
|
|
|
|
|
660
|
|
|
|||||
Total impaired loans without an associated allowance
|
|
1,325
|
|
|
844
|
|
|
|
|
|
955
|
|
|
||||
Total impaired loans
|
|
$
|
2,810
|
|
|
$
|
2,108
|
|
|
$
|
236
|
|
|
$
|
2,261
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
||||||||
Impaired loans with an associated allowance
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial lending
|
|
$
|
580
|
|
|
$
|
353
|
|
|
$
|
76
|
|
|
$
|
419
|
|
|
Total consumer lending
|
|
1,061
|
|
|
1,014
|
|
|
195
|
|
|
1,072
|
|
|
||||
Total impaired loans with an associated allowance
|
|
1,641
|
|
|
1,367
|
|
|
271
|
|
|
1,491
|
|
|
||||
Impaired loans without an associated allowance
|
|
|
|
|
|
|
|
|
|
||||||||
Total commercial lending
|
|
494
|
|
|
366
|
|
|
|
|
330
|
|
|
|||||
Total consumer lending
|
|
1,019
|
|
|
638
|
|
|
|
|
648
|
|
|
|||||
Total impaired loans without an associated allowance
|
|
1,513
|
|
|
1,004
|
|
|
|
|
978
|
|
|
|||||
Total impaired loans
|
|
$
|
3,154
|
|
|
$
|
2,371
|
|
|
$
|
271
|
|
|
$
|
2,469
|
|
|
(a)
|
Average recorded investment is for the
six months ended
June 30, 2018
and the year ended
December 31, 2017
, respectively.
|
|
|
2018
|
|
2017
|
|
||||||||||||||||||||
At or for the six months ended June 30
Dollars in millions
|
|
Commercial
Lending
|
|
|
Consumer
Lending
|
|
|
Total
|
|
|
Commercial
Lending
|
|
|
Consumer
Lending
|
|
|
Total
|
|
|
||||||
Allowance for Loan and Lease Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
January 1
|
|
$
|
1,582
|
|
|
$
|
1,029
|
|
|
$
|
2,611
|
|
|
$
|
1,534
|
|
|
$
|
1,055
|
|
|
$
|
2,589
|
|
|
Charge-offs
|
|
(64
|
)
|
|
(322
|
)
|
|
(386
|
)
|
|
(106
|
)
|
|
(286
|
)
|
|
(392
|
)
|
|
||||||
Recoveries
|
|
51
|
|
|
113
|
|
|
164
|
|
|
61
|
|
|
103
|
|
|
164
|
|
|
||||||
Net (charge-offs)
|
|
(13
|
)
|
|
(209
|
)
|
|
(222
|
)
|
|
(45
|
)
|
|
(183
|
)
|
|
(228
|
)
|
|
||||||
Provision for credit losses
|
|
56
|
|
|
116
|
|
|
172
|
|
|
107
|
|
|
79
|
|
|
186
|
|
|
||||||
Net decrease / (increase) in allowance for unfunded loan
commitments and letters of credit
|
|
6
|
|
|
2
|
|
|
8
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
||||||
Other
|
|
(1
|
)
|
|
13
|
|
|
12
|
|
|
1
|
|
|
16
|
|
|
17
|
|
|
||||||
June 30
|
|
$
|
1,630
|
|
|
$
|
951
|
|
|
$
|
2,581
|
|
|
$
|
1,596
|
|
|
$
|
965
|
|
|
$
|
2,561
|
|
|
TDRs individually evaluated for impairment
|
|
$
|
29
|
|
|
$
|
147
|
|
|
$
|
176
|
|
|
$
|
50
|
|
|
$
|
194
|
|
|
$
|
244
|
|
|
Other loans individually evaluated for impairment
|
|
60
|
|
|
|
|
60
|
|
|
61
|
|
|
|
|
61
|
|
|
||||||||
Loans collectively evaluated for impairment
|
|
1,541
|
|
|
523
|
|
|
2,064
|
|
|
1,460
|
|
|
488
|
|
|
1,948
|
|
|
||||||
Purchased impaired loans
|
|
|
|
281
|
|
|
281
|
|
|
25
|
|
|
283
|
|
|
308
|
|
|
|||||||
June 30
|
|
$
|
1,630
|
|
|
$
|
951
|
|
|
$
|
2,581
|
|
|
$
|
1,596
|
|
|
$
|
965
|
|
|
$
|
2,561
|
|
|
Loan Portfolio
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TDRs individually evaluated for impairment
|
|
$
|
324
|
|
|
$
|
1,544
|
|
|
$
|
1,868
|
|
|
$
|
488
|
|
|
$
|
1,718
|
|
|
$
|
2,206
|
|
|
Other loans individually evaluated for impairment
|
|
240
|
|
|
|
|
240
|
|
|
303
|
|
|
|
|
303
|
|
|
||||||||
Loans collectively evaluated for impairment
|
|
149,072
|
|
|
68,711
|
|
|
217,783
|
|
|
144,896
|
|
|
67,119
|
|
|
212,015
|
|
|
||||||
Fair value option loans (a)
|
|
|
|
753
|
|
|
753
|
|
|
|
|
819
|
|
|
819
|
|
|
||||||||
Purchased impaired loans
|
|
|
|
2,211
|
|
|
2,211
|
|
|
78
|
|
|
2,613
|
|
|
2,691
|
|
|
|||||||
June 30
|
|
$
|
149,636
|
|
|
$
|
73,219
|
|
|
$
|
222,855
|
|
|
$
|
145,765
|
|
|
$
|
72,269
|
|
|
$
|
218,034
|
|
|
Portfolio segment ALLL as a percentage of total ALLL
|
|
63
|
%
|
|
37
|
%
|
|
100
|
%
|
|
62
|
%
|
|
38
|
%
|
|
100
|
%
|
|
||||||
Ratio of ALLL to total loans
|
|
1.09
|
%
|
|
1.30
|
%
|
|
1.16
|
%
|
|
1.09
|
%
|
|
1.34
|
%
|
|
1.17
|
%
|
|
(a)
|
Loans accounted for under the fair value option are not evaluated for impairment as these loans are accounted for at fair value. Accordingly, there is
no
allowance recorded on these loans.
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
In millions
|
|
Amortized
Cost
|
|
|
Unrealized
|
|
Fair
Value
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
|
|
Fair
Value
|
|
||||||||||||||||
Gains
|
|
|
Losses
|
|
|
|
|
Gains
|
|
|
Losses
|
|
|
||||||||||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
|
$
|
16,307
|
|
|
$
|
117
|
|
|
$
|
(224
|
)
|
|
$
|
16,200
|
|
|
|
$
|
14,432
|
|
|
$
|
173
|
|
|
$
|
(84
|
)
|
|
$
|
14,521
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
28,211
|
|
|
68
|
|
|
(660
|
)
|
|
27,619
|
|
|
|
25,534
|
|
|
121
|
|
|
(249
|
)
|
|
25,406
|
|
||||||||
Non-agency
|
|
2,174
|
|
|
334
|
|
|
(14
|
)
|
|
2,494
|
|
|
|
2,443
|
|
|
336
|
|
|
(21
|
)
|
|
2,758
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
1,890
|
|
|
1
|
|
|
(83
|
)
|
|
1,808
|
|
|
|
1,960
|
|
|
2
|
|
|
(58
|
)
|
|
1,904
|
|
||||||||
Non-agency
|
|
2,589
|
|
|
7
|
|
|
(29
|
)
|
|
2,567
|
|
|
|
2,603
|
|
|
19
|
|
|
(9
|
)
|
|
2,613
|
|
||||||||
Asset-backed
|
|
5,410
|
|
|
69
|
|
|
(18
|
)
|
|
5,461
|
|
|
|
5,331
|
|
|
74
|
|
|
(8
|
)
|
|
5,397
|
|
||||||||
Other debt
|
|
4,067
|
|
|
102
|
|
|
(43
|
)
|
|
4,126
|
|
|
|
4,322
|
|
|
129
|
|
|
(17
|
)
|
|
4,434
|
|
||||||||
Total debt securities
|
|
60,648
|
|
|
698
|
|
|
(1,071
|
)
|
|
60,275
|
|
|
|
56,625
|
|
|
854
|
|
|
(446
|
)
|
|
57,033
|
|
||||||||
Other (a)
|
|
|
|
|
|
|
|
|
|
|
587
|
|
|
|
|
(2
|
)
|
|
585
|
|
|||||||||||||
Total securities available for sale
|
|
$
|
60,648
|
|
|
$
|
698
|
|
|
$
|
(1,071
|
)
|
|
$
|
60,275
|
|
|
|
$
|
57,212
|
|
|
$
|
854
|
|
|
$
|
(448
|
)
|
|
$
|
57,618
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
|
$
|
749
|
|
|
$
|
25
|
|
|
$
|
(30
|
)
|
|
$
|
744
|
|
|
|
$
|
741
|
|
|
$
|
37
|
|
|
$
|
(13
|
)
|
|
$
|
765
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
16,126
|
|
|
22
|
|
|
(446
|
)
|
|
15,702
|
|
|
|
14,503
|
|
|
77
|
|
|
(139
|
)
|
|
14,441
|
|
||||||||
Non-agency
|
|
159
|
|
|
2
|
|
|
|
|
161
|
|
|
|
167
|
|
|
7
|
|
|
|
|
174
|
|
||||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
241
|
|
|
2
|
|
|
(2
|
)
|
|
241
|
|
|
|
407
|
|
|
4
|
|
|
|
|
411
|
|
|||||||||
Non-agency
|
|
512
|
|
|
2
|
|
|
(1
|
)
|
|
513
|
|
|
|
538
|
|
|
10
|
|
|
|
|
548
|
|
|||||||||
Asset-backed
|
|
191
|
|
|
1
|
|
|
|
|
192
|
|
|
|
200
|
|
|
1
|
|
|
|
|
201
|
|
||||||||||
Other debt
|
|
1,872
|
|
|
54
|
|
|
(26
|
)
|
|
1,900
|
|
|
|
1,957
|
|
|
88
|
|
|
(20
|
)
|
|
2,025
|
|
||||||||
Total securities held to maturity
|
|
$
|
19,850
|
|
|
$
|
108
|
|
|
$
|
(505
|
)
|
|
$
|
19,453
|
|
|
|
$
|
18,513
|
|
|
$
|
224
|
|
|
$
|
(172
|
)
|
|
$
|
18,565
|
|
(a)
|
On January 1, 2018,
$.6 billion
of available for sale securities, primarily money market funds, were reclassified to equity investments in accordance with the adoption of Accounting Standards Update (ASU) 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on this adoption.
|
|
|
Unrealized loss position less
than 12 months
|
|
Unrealized loss position 12
months or more
|
|
Total
|
|
||||||||||||||||||
In millions
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
Unrealized
Loss
|
|
|
Fair
Value
|
|
|
||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
$
|
(155
|
)
|
|
$
|
8,190
|
|
|
$
|
(69
|
)
|
|
$
|
1,286
|
|
|
$
|
(224
|
)
|
|
$
|
9,476
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(279
|
)
|
|
13,151
|
|
|
(381
|
)
|
|
8,462
|
|
|
(660
|
)
|
|
21,613
|
|
|
||||||
Non-agency
|
|
(1
|
)
|
|
57
|
|
|
(13
|
)
|
|
332
|
|
|
(14
|
)
|
|
389
|
|
|
||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(18
|
)
|
|
533
|
|
|
(65
|
)
|
|
1,189
|
|
|
(83
|
)
|
|
1,722
|
|
|
||||||
Non-agency
|
|
(19
|
)
|
|
1,403
|
|
|
(10
|
)
|
|
199
|
|
|
(29
|
)
|
|
1,602
|
|
|
||||||
Asset-backed
|
|
(15
|
)
|
|
2,626
|
|
|
(3
|
)
|
|
301
|
|
|
(18
|
)
|
|
2,927
|
|
|
||||||
Other debt
|
|
(22
|
)
|
|
1,628
|
|
|
(21
|
)
|
|
663
|
|
|
(43
|
)
|
|
2,291
|
|
|
||||||
Total debt securities available for sale
|
|
$
|
(509
|
)
|
|
$
|
27,588
|
|
|
$
|
(562
|
)
|
|
$
|
12,432
|
|
|
$
|
(1,071
|
)
|
|
$
|
40,020
|
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
$
|
(8
|
)
|
|
$
|
190
|
|
|
$
|
(22
|
)
|
|
$
|
246
|
|
|
$
|
(30
|
)
|
|
$
|
436
|
|
|
Residential mortgage-backed - Agency
|
|
(171
|
)
|
|
7,605
|
|
|
(275
|
)
|
|
5,582
|
|
|
(446
|
)
|
|
13,187
|
|
|
||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(2
|
)
|
|
127
|
|
|
|
|
|
|
(2
|
)
|
|
127
|
|
|
||||||||
Non-agency
|
|
(1
|
)
|
|
176
|
|
|
|
|
|
|
(1
|
)
|
|
176
|
|
|
||||||||
Other debt
|
|
(6
|
)
|
|
97
|
|
|
(20
|
)
|
|
101
|
|
|
(26
|
)
|
|
198
|
|
|
||||||
Total debt securities held to maturity
|
|
$
|
(188
|
)
|
|
$
|
8,195
|
|
|
$
|
(317
|
)
|
|
$
|
5,929
|
|
|
$
|
(505
|
)
|
|
$
|
14,124
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
$
|
(42
|
)
|
|
$
|
6,099
|
|
|
$
|
(42
|
)
|
|
$
|
1,465
|
|
|
$
|
(84
|
)
|
|
$
|
7,564
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(47
|
)
|
|
8,151
|
|
|
(202
|
)
|
|
9,954
|
|
|
(249
|
)
|
|
18,105
|
|
|
||||||
Non-agency
|
|
|
|
|
|
(21
|
)
|
|
383
|
|
|
(21
|
)
|
|
383
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(11
|
)
|
|
524
|
|
|
(47
|
)
|
|
1,302
|
|
|
(58
|
)
|
|
1,826
|
|
|
||||||
Non-agency
|
|
(3
|
)
|
|
400
|
|
|
(6
|
)
|
|
333
|
|
|
(9
|
)
|
|
733
|
|
|
||||||
Asset-backed
|
|
(4
|
)
|
|
1,697
|
|
|
(4
|
)
|
|
462
|
|
|
(8
|
)
|
|
2,159
|
|
|
||||||
Other debt
|
|
(3
|
)
|
|
966
|
|
|
(14
|
)
|
|
798
|
|
|
(17
|
)
|
|
1,764
|
|
|
||||||
Total debt securities available for sale
|
|
$
|
(110
|
)
|
|
$
|
17,837
|
|
|
$
|
(336
|
)
|
|
$
|
14,697
|
|
|
$
|
(446
|
)
|
|
$
|
32,534
|
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Debt securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
$
|
(3
|
)
|
|
$
|
195
|
|
|
$
|
(10
|
)
|
|
$
|
255
|
|
|
$
|
(13
|
)
|
|
$
|
450
|
|
|
Residential mortgage-backed - Agency
|
|
(10
|
)
|
|
3,167
|
|
|
(129
|
)
|
|
6,168
|
|
|
(139
|
)
|
|
9,335
|
|
|
||||||
Other debt
|
|
(12
|
)
|
|
83
|
|
|
(8
|
)
|
|
67
|
|
|
(20
|
)
|
|
150
|
|
|
||||||
Total debt securities held to maturity
|
|
$
|
(25
|
)
|
|
$
|
3,445
|
|
|
$
|
(147
|
)
|
|
$
|
6,490
|
|
|
$
|
(172
|
)
|
|
$
|
9,935
|
|
|
Six months ended June 30
In millions |
Proceeds
|
|
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
|
Tax Expense (Benefit)
|
|
|
|||||
2018
|
$
|
5,218
|
|
$
|
42
|
|
$
|
(46
|
)
|
$
|
(4
|
)
|
$
|
(1
|
)
|
|
2017
|
$
|
3,526
|
|
$
|
29
|
|
$
|
(18
|
)
|
$
|
11
|
|
$
|
4
|
|
|
June 30, 2018
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
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
|
$
|
263
|
|
|
$
|
9,873
|
|
|
$
|
5,720
|
|
|
$
|
451
|
|
|
$
|
16,307
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
3
|
|
|
74
|
|
|
540
|
|
|
27,594
|
|
|
28,211
|
|
|
|||||
Non-agency
|
|
|
|
|
|
|
|
2,174
|
|
|
2,174
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
4
|
|
|
343
|
|
|
550
|
|
|
993
|
|
|
1,890
|
|
|
|||||
Non-agency
|
|
|
|
|
|
349
|
|
|
2,240
|
|
|
2,589
|
|
|
|||||||
Asset-backed
|
|
43
|
|
|
2,005
|
|
|
2,110
|
|
|
1,252
|
|
|
5,410
|
|
|
|||||
Other debt
|
|
529
|
|
|
1,840
|
|
|
673
|
|
|
1,025
|
|
|
4,067
|
|
|
|||||
Total debt securities available for sale
|
|
$
|
842
|
|
|
$
|
14,135
|
|
|
$
|
9,942
|
|
|
$
|
35,729
|
|
|
$
|
60,648
|
|
|
Fair value
|
|
$
|
844
|
|
|
$
|
14,002
|
|
|
$
|
9,893
|
|
|
$
|
35,536
|
|
|
$
|
60,275
|
|
|
Weighted-average yield, GAAP basis
|
|
2.74
|
%
|
|
2.18
|
%
|
|
2.66
|
%
|
|
3.12
|
%
|
|
2.82
|
%
|
|
|||||
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
|
|
|
|
|
$
|
481
|
|
|
$
|
268
|
|
|
$
|
749
|
|
|
||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
|
|
$
|
72
|
|
|
417
|
|
|
15,637
|
|
|
16,126
|
|
|
|||||
Non-agency
|
|
|
|
|
|
|
|
159
|
|
|
159
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
$
|
92
|
|
|
93
|
|
|
5
|
|
|
51
|
|
|
241
|
|
|
||||
Non-agency
|
|
|
|
|
|
|
|
512
|
|
|
512
|
|
|
||||||||
Asset-backed
|
|
|
|
13
|
|
|
100
|
|
|
78
|
|
|
191
|
|
|
||||||
Other debt
|
|
30
|
|
|
419
|
|
|
836
|
|
|
587
|
|
|
1,872
|
|
|
|||||
Total debt securities held to maturity
|
|
$
|
122
|
|
|
$
|
597
|
|
|
$
|
1,839
|
|
|
$
|
17,292
|
|
|
$
|
19,850
|
|
|
Fair value
|
|
$
|
122
|
|
|
$
|
607
|
|
|
$
|
1,872
|
|
|
$
|
16,852
|
|
|
$
|
19,453
|
|
|
Weighted-average yield, GAAP basis
|
|
3.96
|
%
|
|
3.80
|
%
|
|
3.51
|
%
|
|
3.25
|
%
|
|
3.29
|
%
|
|
In millions
|
June 30
2018 |
|
December 31
2017 |
|
||
Pledged to others
|
$
|
8,074
|
|
$
|
8,175
|
|
Accepted from others:
|
|
|
||||
Permitted by contract or custom to sell or repledge
|
$
|
738
|
|
$
|
1,152
|
|
Permitted amount repledged to others
|
$
|
734
|
|
$
|
1,097
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
|
||||||||||||||||||||||||||||
In millions
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
Fair Value
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
Fair Value
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Residential mortgage loans held for sale
|
|
|
$
|
763
|
|
|
$
|
4
|
|
|
$
|
767
|
|
|
|
|
|
$
|
829
|
|
|
$
|
3
|
|
|
$
|
832
|
|
|
||||
Commercial mortgage loans held for sale
|
|
|
377
|
|
|
91
|
|
|
468
|
|
|
|
|
|
723
|
|
|
107
|
|
|
830
|
|
|
||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
$
|
15,766
|
|
|
434
|
|
|
|
|
16,200
|
|
|
|
$
|
14,088
|
|
|
433
|
|
|
|
|
14,521
|
|
|
||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
|
27,619
|
|
|
|
|
27,619
|
|
|
|
|
|
25,406
|
|
|
|
|
25,406
|
|
|
||||||||||||
Non-agency
|
|
|
89
|
|
|
2,405
|
|
|
2,494
|
|
|
|
|
|
97
|
|
|
2,661
|
|
|
2,758
|
|
|
||||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
|
1,808
|
|
|
|
|
1,808
|
|
|
|
|
|
1,904
|
|
|
|
|
1,904
|
|
|
||||||||||||
Non-agency
|
|
|
2,567
|
|
|
|
|
2,567
|
|
|
|
|
|
2,613
|
|
|
|
|
2,613
|
|
|
||||||||||||
Asset-backed
|
|
|
5,153
|
|
|
308
|
|
|
5,461
|
|
|
|
|
|
5,065
|
|
|
332
|
|
|
5,397
|
|
|
||||||||||
Other debt
|
|
|
4,035
|
|
|
91
|
|
|
4,126
|
|
|
|
|
|
4,347
|
|
|
87
|
|
|
4,434
|
|
|
||||||||||
Total debt securities
|
15,766
|
|
|
41,705
|
|
|
2,804
|
|
|
60,275
|
|
|
|
14,088
|
|
|
39,865
|
|
|
3,080
|
|
|
57,033
|
|
|
||||||||
Other (a)
|
|
|
|
|
|
|
|
|
|
|
524
|
|
|
61
|
|
|
|
|
585
|
|
|
||||||||||||
Total securities available for sale
|
15,766
|
|
|
41,705
|
|
|
2,804
|
|
|
60,275
|
|
|
|
14,612
|
|
|
39,926
|
|
|
3,080
|
|
|
57,618
|
|
|
||||||||
Loans
|
|
|
471
|
|
|
282
|
|
|
753
|
|
|
|
|
|
571
|
|
|
298
|
|
|
869
|
|
|
||||||||||
Equity investments (b)
|
672
|
|
|
59
|
|
|
1,167
|
|
|
2,115
|
|
|
|
|
|
|
|
1,036
|
|
|
1,265
|
|
|
||||||||||
Residential mortgage servicing rights
|
|
|
|
|
1,297
|
|
|
1,297
|
|
|
|
|
|
|
|
1,164
|
|
|
1,164
|
|
|
||||||||||||
Commercial mortgage servicing rights
|
|
|
|
|
748
|
|
|
748
|
|
|
|
|
|
|
|
668
|
|
|
668
|
|
|
||||||||||||
Trading securities (c)
|
1,370
|
|
|
1,700
|
|
|
2
|
|
|
3,072
|
|
|
|
1,243
|
|
|
1,670
|
|
|
2
|
|
|
2,915
|
|
|
||||||||
Financial derivatives (c) (d)
|
|
|
1,876
|
|
|
16
|
|
|
1,892
|
|
|
|
|
|
2,864
|
|
|
10
|
|
|
2,874
|
|
|
||||||||||
Other assets
|
282
|
|
|
204
|
|
|
63
|
|
|
549
|
|
|
|
278
|
|
|
253
|
|
|
107
|
|
|
638
|
|
|
||||||||
Total assets
|
$
|
18,090
|
|
|
$
|
47,155
|
|
|
$
|
6,474
|
|
|
$
|
71,936
|
|
|
|
$
|
16,133
|
|
|
$
|
46,836
|
|
|
$
|
6,475
|
|
|
$
|
69,673
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Other borrowed funds
|
$
|
479
|
|
|
$
|
352
|
|
|
$
|
7
|
|
|
$
|
838
|
|
|
|
$
|
1,079
|
|
|
$
|
254
|
|
|
$
|
11
|
|
|
$
|
1,344
|
|
|
Financial derivatives (d) (e)
|
|
|
2,499
|
|
|
384
|
|
|
2,883
|
|
|
|
|
|
2,369
|
|
|
487
|
|
|
2,856
|
|
|
||||||||||
Other liabilities
|
|
|
|
|
47
|
|
|
47
|
|
|
|
|
|
|
|
33
|
|
|
33
|
|
|
||||||||||||
Total liabilities
|
$
|
479
|
|
|
$
|
2,851
|
|
|
$
|
438
|
|
|
$
|
3,768
|
|
|
|
$
|
1,079
|
|
|
$
|
2,623
|
|
|
$
|
531
|
|
|
$
|
4,233
|
|
|
(a)
|
Prior period amounts included
$.6 billion
of available for sale securities, primarily money market funds, that were reclassified to equity investments on January 1, 2018 as the result of the adoption of ASU 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional details on this adoption.
|
(b)
|
Certain investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented on the Consolidated Balance Sheet.
|
(c)
|
Included in Other assets on the Consolidated Balance Sheet.
|
(d)
|
Amounts at
June 30, 2018
and
December 31, 2017
are presented gross and are not reduced by the impact of legally enforceable master netting agreements that allow us to net positive and negative positions and cash collateral held or placed with the same counterparty. See Note
9
Financial Derivatives
for additional information related to derivative offsetting.
|
(e)
|
Included in Other liabilities on the Consolidated Balance Sheet.
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized
gains / losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 2018 (a) (b) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair
Value Mar. 31, 2018 |
|
Included in
Earnings |
|
Included
in Other comprehensive income |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
|
Transfers
out of Level 3 |
|
Fair
Value June 30, 2018 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
$
|
4
|
|
|
|
||||||||||||
Commercial mortgage
loans held for sale |
92
|
|
$
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
91
|
|
$
|
(1
|
)
|
|
||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
2,545
|
|
1
|
|
|
$
|
5
|
|
|
|
|
$
|
(146
|
)
|
|
|
|
2,405
|
|
|
|
|||||||||||||||
Asset-backed
|
321
|
|
1
|
|
|
(1
|
)
|
|
|
|
(13
|
)
|
|
|
|
308
|
|
|
|
|||||||||||||||||
Other debt
|
94
|
|
|
|
6
|
|
2
|
|
|
|
(11
|
)
|
|
|
|
91
|
|
|
|
|||||||||||||||||
Total securities
available for sale |
2,960
|
|
2
|
|
|
10
|
|
2
|
|
|
|
|
|
(170
|
)
|
|
|
|
|
|
2,804
|
|
|
|
||||||||||||
Loans
|
302
|
|
3
|
|
|
|
18
|
|
$
|
(2
|
)
|
|
(25
|
)
|
(2
|
)
|
|
(12
|
)
|
282
|
|
(1
|
)
|
|
||||||||||||
Equity investments
|
1,129
|
|
62
|
|
|
|
79
|
|
(103
|
)
|
|
|
|
|
|
1,167
|
|
35
|
|
|
||||||||||||||||
Residential mortgage
servicing rights |
1,256
|
|
40
|
|
|
|
38
|
|
|
$
|
10
|
|
(47
|
)
|
|
|
|
1,297
|
|
35
|
|
|
||||||||||||||
Commercial mortgage
servicing rights |
723
|
|
33
|
|
|
|
21
|
|
|
6
|
|
(35
|
)
|
|
|
|
748
|
|
33
|
|
|
|||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
12
|
|
17
|
|
|
|
1
|
|
|
|
(14
|
)
|
|
|
|
16
|
|
18
|
|
|
||||||||||||||||
Other assets
|
68
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
63
|
|
(5
|
)
|
|
||||||||||||||||||
Total assets
|
$
|
6,546
|
|
$
|
151
|
|
|
$
|
10
|
|
$
|
160
|
|
$
|
(105
|
)
|
$
|
16
|
|
$
|
(291
|
)
|
$
|
1
|
|
|
$
|
(14
|
)
|
$
|
6,474
|
|
$
|
114
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
9
|
|
|
|
|
|
|
$
|
13
|
|
$
|
(15
|
)
|
|
|
|
$
|
7
|
|
|
|
||||||||||||||
Financial derivatives
|
437
|
|
$
|
(33
|
)
|
|
|
|
$
|
2
|
|
|
(22
|
)
|
|
|
|
384
|
|
$
|
(31
|
)
|
|
|||||||||||||
Other liabilities
|
42
|
|
3
|
|
|
|
|
|
29
|
|
(27
|
)
|
|
|
|
47
|
|
3
|
|
|
||||||||||||||||
Total liabilities
|
$
|
488
|
|
$
|
(30
|
)
|
|
|
|
|
|
$
|
2
|
|
$
|
42
|
|
$
|
(64
|
)
|
|
|
|
|
|
$
|
438
|
|
$
|
(28
|
)
|
|
||||
Net gains (losses)
|
|
$
|
181
|
|
(c)
|
|
|
|
|
|
|
|
|
|
$
|
142
|
|
(d)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized
gains / losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 2017 (a) (b) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair
Value Mar. 31, 2017 |
|
Included in
Earnings |
|
Included
in Other comprehensive income |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
|
Fair
Value Jun. 30, 2017 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
4
|
|
|
|
|
$
|
4
|
|
$
|
(1
|
)
|
|
|
$
|
3
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
581
|
|
$
|
28
|
|
|
|
|
(743
|
)
|
$
|
1,144
|
|
$
|
(28
|
)
|
|
|
|
982
|
|
|
|
|||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
3,096
|
|
24
|
|
|
$
|
51
|
|
|
|
|
(207
|
)
|
|
|
|
2,964
|
|
|
|
||||||||||||||||
Commercial mortgage-
backed non-agency |
|
12
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Asset-backed
|
366
|
|
4
|
|
|
11
|
|
|
|
|
|
(20
|
)
|
|
|
|
361
|
|
|
|
||||||||||||||||
Other debt
|
75
|
|
|
|
3
|
|
1
|
|
|
|
|
(1
|
)
|
|
|
|
78
|
|
|
|
||||||||||||||||
Total securities
available for sale |
3,537
|
|
40
|
|
|
65
|
|
1
|
|
(12
|
)
|
|
(228
|
)
|
|
|
|
3,403
|
|
|
|
|||||||||||||||
Loans
|
323
|
|
(6
|
)
|
|
|
18
|
|
(15
|
)
|
|
(18
|
)
|
4
|
|
(16
|
)
|
|
290
|
|
$
|
(8
|
)
|
|
||||||||||||
Equity investments
|
1,106
|
|
61
|
|
|
|
44
|
|
(224
|
)
|
|
|
|
|
|
|
|
987
|
|
22
|
|
|
||||||||||||||
Residential mortgage
servicing rights |
1,261
|
|
(48
|
)
|
|
|
71
|
|
|
11
|
|
(46
|
)
|
|
|
|
1,249
|
|
(42
|
)
|
|
|||||||||||||||
Commercial mortgage
servicing rights |
606
|
|
1
|
|
|
|
21
|
|
|
17
|
|
(27
|
)
|
|
|
|
618
|
|
|
|
||||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
24
|
|
18
|
|
|
|
2
|
|
|
|
(22
|
)
|
|
|
|
22
|
|
16
|
|
|
||||||||||||||||
Other assets
|
82
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
89
|
|
8
|
|
|
|||||||||||||||||
Total assets
|
$
|
7,526
|
|
$
|
101
|
|
|
$
|
65
|
|
$
|
161
|
|
$
|
(995
|
)
|
$
|
1,172
|
|
$
|
(369
|
)
|
$
|
7
|
|
$
|
(21
|
)
|
|
$
|
7,647
|
|
$
|
(4
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
7
|
|
|
|
|
|
|
$
|
16
|
|
$
|
(15
|
)
|
|
|
|
$
|
8
|
|
|
|
||||||||||||||
Financial derivatives
|
254
|
|
$
|
9
|
|
|
|
|
|
|
(15
|
)
|
|
|
|
248
|
|
$
|
12
|
|
|
|||||||||||||||
Other liabilities
|
31
|
|
3
|
|
|
|
|
|
72
|
|
(73
|
)
|
|
|
|
33
|
|
3
|
|
|
||||||||||||||||
Total liabilities
|
$
|
292
|
|
$
|
12
|
|
|
|
|
|
|
$
|
88
|
|
$
|
(103
|
)
|
|
|
|
$
|
289
|
|
$
|
15
|
|
|
|||||||||
Net gains (losses)
|
|
$
|
89
|
|
(c)
|
|
|
|
|
|
|
|
|
|
$
|
(19
|
)
|
(d)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized
gains / losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 2018 (a) (b) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions
|
Fair
Value Dec. 31, 2017 |
|
Included in
Earnings |
|
Included
in Other comprehensive income |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
|
Fair
Value June 30, 2018 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
3
|
|
|
|
|
$
|
2
|
|
$
|
(1
|
)
|
|
|
$
|
5
|
|
$
|
(5
|
)
|
|
$
|
4
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
107
|
|
$
|
(1
|
)
|
|
|
|
|
|
$
|
(15
|
)
|
|
|
|
91
|
|
$
|
(1
|
)
|
|
||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
2,661
|
|
20
|
|
|
$
|
8
|
|
|
|
|
(284
|
)
|
|
|
|
2,405
|
|
|
|
||||||||||||||||
Asset-backed
|
332
|
|
|
|
4
|
|
|
|
|
(28
|
)
|
|
|
|
308
|
|
|
|
||||||||||||||||||
Other debt
|
87
|
|
5
|
|
|
7
|
|
4
|
|
|
|
(12
|
)
|
|
|
|
91
|
|
|
|
||||||||||||||||
Total securities
available for sale |
3,080
|
|
25
|
|
|
19
|
|
4
|
|
|
|
(324
|
)
|
|
|
|
2,804
|
|
|
|
||||||||||||||||
Loans
|
298
|
|
5
|
|
|
|
55
|
|
(9
|
)
|
|
(43
|
)
|
|
(24
|
)
|
|
282
|
|
$
|
1
|
|
|
|||||||||||||
Equity investments
|
1,036
|
|
88
|
|
|
|
161
|
|
(118
|
)
|
|
|
|
|
|
1,167
|
|
60
|
|
|
||||||||||||||||
Residential mortgage
servicing rights |
1,164
|
|
147
|
|
|
|
47
|
|
|
$
|
23
|
|
(84
|
)
|
|
|
|
1,297
|
|
140
|
|
|
||||||||||||||
Commercial mortgage
servicing rights |
668
|
|
81
|
|
|
|
44
|
|
|
23
|
|
(68
|
)
|
|
|
|
748
|
|
81
|
|
|
|||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
10
|
|
24
|
|
|
|
2
|
|
|
|
(20
|
)
|
|
|
|
16
|
|
27
|
|
|
||||||||||||||||
Other assets
|
107
|
|
(2
|
)
|
|
|
|
|
|
(42
|
)
|
|
|
|
63
|
|
(2
|
)
|
|
|||||||||||||||||
Total assets
|
$
|
6,475
|
|
$
|
367
|
|
|
$
|
19
|
|
$
|
315
|
|
$
|
(128
|
)
|
$
|
46
|
|
$
|
(596
|
)
|
$
|
5
|
|
$
|
(29
|
)
|
|
$
|
6,474
|
|
$
|
306
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
11
|
|
|
|
|
|
|
$
|
32
|
|
$
|
(36
|
)
|
|
|
|
$
|
7
|
|
|
|
||||||||||||||
Financial derivatives
|
487
|
|
$
|
(23
|
)
|
|
|
|
$
|
5
|
|
|
(85
|
)
|
|
|
|
384
|
|
$
|
(26
|
)
|
|
|||||||||||||
Other liabilities
|
33
|
|
5
|
|
|
|
$
|
12
|
|
|
34
|
|
(37
|
)
|
|
|
|
47
|
|
5
|
|
|
||||||||||||||
Total liabilities
|
$
|
531
|
|
$
|
(18
|
)
|
|
|
$
|
12
|
|
$
|
5
|
|
$
|
66
|
|
$
|
(158
|
)
|
|
|
|
$
|
438
|
|
$
|
(21
|
)
|
|
||||||
Net gains (losses)
|
|
$
|
385
|
|
(c)
|
|
|
|
|
|
|
|
|
|
$
|
327
|
|
(d)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized
gains / losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 2017 (a) (b) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions
|
Fair
Value Dec. 31, 2016 |
|
Included in
Earnings |
|
Included
in Other comprehensive income |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
|
Fair
Value Jun. 30, 2017 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
6
|
|
$
|
(1
|
)
|
|
|
$
|
5
|
|
$
|
(7
|
)
|
|
$
|
5
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
1,400
|
|
$
|
37
|
|
|
|
|
(2,360
|
)
|
$
|
1,945
|
|
$
|
(40
|
)
|
|
|
|
982
|
|
|
|
|||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
3,254
|
|
50
|
|
|
$
|
69
|
|
|
|
|
(409
|
)
|
|
|
|
2,964
|
|
$
|
(1
|
)
|
|
||||||||||||||
Commercial mortgage-
backed non-agency |
|
12
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Asset-backed
|
403
|
|
8
|
|
|
15
|
|
|
(25
|
)
|
|
(40
|
)
|
|
|
|
361
|
|
|
|
||||||||||||||||
Other debt
|
66
|
|
|
|
12
|
|
2
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
78
|
|
|
|
||||||||||||||||
Total securities
available for sale |
3,723
|
|
70
|
|
|
96
|
|
2
|
|
(38
|
)
|
|
(450
|
)
|
|
|
|
3,403
|
|
(1
|
)
|
|
||||||||||||||
Loans
|
335
|
|
(5
|
)
|
|
|
40
|
|
(19
|
)
|
|
(37
|
)
|
6
|
|
(30
|
)
|
|
290
|
|
(7
|
)
|
|
|||||||||||||
Equity investments
|
1,331
|
|
157
|
|
|
|
81
|
|
(399
|
)
|
|
|
|
(183
|
)
|
(e)
|
987
|
|
88
|
|
|
|||||||||||||||
Residential mortgage
servicing rights |
1,182
|
|
(30
|
)
|
|
|
154
|
|
|
28
|
|
(85
|
)
|
|
|
|
1,249
|
|
(29
|
)
|
|
|||||||||||||||
Commercial mortgage
servicing rights |
576
|
|
14
|
|
|
|
34
|
|
|
46
|
|
(52
|
)
|
|
|
|
618
|
|
|
|
||||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
40
|
|
17
|
|
|
|
2
|
|
|
|
(37
|
)
|
|
|
|
22
|
|
35
|
|
|
||||||||||||||||
Other assets
|
239
|
|
5
|
|
|
|
|
|
|
(155
|
)
|
|
|
|
89
|
|
6
|
|
|
|||||||||||||||||
Total assets
|
$
|
8,830
|
|
$
|
265
|
|
|
$
|
96
|
|
$
|
319
|
|
$
|
(2,817
|
)
|
$
|
2,019
|
|
$
|
(856
|
)
|
$
|
11
|
|
$
|
(220
|
)
|
|
$
|
7,647
|
|
$
|
92
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
10
|
|
|
|
|
|
|
$
|
35
|
|
$
|
(37
|
)
|
|
|
|
$
|
8
|
|
|
|
||||||||||||||
Financial derivatives
|
414
|
|
$
|
18
|
|
|
|
|
$
|
2
|
|
|
(186
|
)
|
|
|
|
248
|
|
$
|
34
|
|
|
|||||||||||||
Other liabilities
|
9
|
|
19
|
|
|
|
|
|
149
|
|
(144
|
)
|
|
|
|
33
|
|
19
|
|
|
||||||||||||||||
Total liabilities
|
$
|
433
|
|
$
|
37
|
|
|
|
|
$
|
2
|
|
$
|
184
|
|
$
|
(367
|
)
|
|
|
|
$
|
289
|
|
$
|
53
|
|
|
||||||||
Net gains (losses)
|
|
$
|
228
|
|
(c)
|
|
|
|
|
|
|
|
|
|
$
|
39
|
|
(d)
|
(a)
|
Losses for assets are bracketed while losses for liabilities are not.
|
(b)
|
The amount of the total gains or losses for the period included in earnings that is attributable to the change in unrealized gains or losses related to those assets and liabilities held at the end of the reporting period.
|
(c)
|
Net gains (losses) realized and unrealized included in earnings related to Level 3 assets and liabilities included amortization and accretion. The amortization and accretion amounts were included in Interest income on the Consolidated Income Statement and the remaining net gains (losses) realized and unrealized were included in Noninterest income on the Consolidated Income Statement.
|
(d)
|
Net unrealized gains (losses) related to assets and liabilities held at the end of the reporting period were included in Noninterest income on the Consolidated Income Statement.
|
(e)
|
Reflects transfer out of Level 3 associated with change in valuation methodology for certain equity investments subject to the Volcker Rule provisions of the Dodd-Frank Act.
|
Level 3 Instruments Only
Dollars in millions
|
Fair Value
|
|
Valuation Techniques
|
Unobservable Inputs
|
Range (Weighted-Average)
|
|
Commercial mortgage loans held for sale
|
$
|
91
|
|
Discounted cash flow
|
Spread over the benchmark curve (a)
|
525bps - 1,650bps
(1,109bps)
|
Residential mortgage-backed
non-agency securities |
2,405
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate (CPR)
|
1.0% - 33.0% (10.6%
)
|
|
Constant default rate (CDR)
|
0.0% - 17.8% (5.5%)
|
|||||
Loss severity
|
10.0% - 95.7% (50.0%)
|
|||||
Spread over the benchmark curve (a)
|
184bps weighted-average
|
|||||
Asset-backed securities
|
308
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate (CPR)
|
1.0% - 19.0% (8.5%)
|
|
Constant default rate (CDR)
|
1.0% - 9.3% (4.2%)
|
|||||
Loss severity
|
15.0% - 100.0% (66.4%)
|
|||||
Spread over the benchmark curve (a)
|
126bps weighted-average
|
|||||
Loans
|
136
|
|
Consensus pricing (b)
|
Cumulative default rate
|
11.0% - 100.0% (82.1%)
|
|
Loss severity
|
0.0% - 100.0% (18.0%)
|
|||||
Discount rate
|
5.5% - 8.3% (5.9%)
|
|||||
|
92
|
|
Discounted cash flow
|
Loss severity
|
8.0% weighted-average
|
|
Discount rate
|
5.6% weighted-average
|
|||||
|
54
|
|
Consensus pricing (b)
|
Credit and Liquidity discount
|
0.0% - 99.0% (62.0%)
|
|
Equity investments
|
1,167
|
|
Multiple of adjusted earnings
|
Multiple of earnings
|
5.0x - 29.7x (9.0x)
|
|
Residential mortgage servicing rights
|
1,297
|
|
Discounted cash flow
|
Constant prepayment rate (CPR)
|
0.0% - 44.4% (8.4%)
|
|
Spread over the benchmark curve (a)
|
429bps - 1,795bps (828bps)
|
|||||
Commercial mortgage servicing rights
|
748
|
|
Discounted cash flow
|
Constant prepayment rate (CPR)
|
6.5% - 14.4% (7.5%)
|
|
Discount rate
|
6.9% - 8.7% (8.5%)
|
|||||
Financial derivatives - Swaps related to
sales of certain Visa Class B common shares |
(314
|
)
|
Discounted cash flow
|
Estimated conversion factor of Visa
Class B shares into Class A shares |
161.5% weighted-average
|
|
Estimated growth rate of Visa
Class A share price |
16.0%
|
|||||
Estimated length of litigation
resolution date |
Q4 2020
|
|||||
Insignificant Level 3 assets, net of
liabilities (c) |
52
|
|
|
|
|
|
Total Level 3 assets, net of liabilities (d)
|
$
|
6,036
|
|
|
|
|
Level 3 Instruments Only
Dollars in millions
|
Fair Value
|
|
Valuation Techniques
|
Unobservable Inputs
|
Range (Weighted-Average)
|
|
Commercial mortgage loans held for sale
|
$
|
107
|
|
Discounted cash flow
|
Spread over the benchmark curve (a)
|
525bps - 1,470bps (1020bps)
|
Residential mortgage-backed
non-agency securities |
2,661
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate (CPR)
|
1.0% - 31.6% (10.8%)
|
|
Constant default rate (CDR)
|
0.1% - 18.8% (5.4%)
|
|||||
Loss severity
|
15.0% - 100.0% (51.5%
)
|
|||||
Spread over the benchmark curve (a)
|
190bps weighted-average
|
|||||
Asset-backed securities
|
332
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate (CPR)
|
1.0% - 19.0% (7.9%)
|
|
Constant default rate (CDR)
|
2.0% - 11.8% (5.4%)
|
|||||
Loss severity
|
15.0% - 100.0% (68.5%)
|
|||||
Spread over the benchmark curve (a)
|
179bps weighted-average
|
|||||
Loans
|
133
|
|
Consensus pricing (b)
|
Cumulative default rate
|
11.0% - 100.0% (85.7%)
|
|
Loss severity
|
0.0% - 100.0% (20.6%)
|
|||||
Discount rate
|
5.5% - 8.0% (5.7%)
|
|||||
|
104
|
|
Discounted cash flow
|
Loss severity
|
8.0% weighted-average
|
|
Discount rate
|
4.9% weighted-average
|
|||||
|
61
|
|
Consensus pricing (b)
|
Credit and Liquidity discount
|
0.0% - 99.0% (61.1%)
|
|
Equity investments
|
1,036
|
|
Multiple of adjusted earnings
|
Multiple of earnings
|
4.5x - 29.7x (8.3x)
|
|
Residential mortgage servicing rights
|
1,164
|
|
Discounted cash flow
|
Constant prepayment rate (CPR)
|
0.0% - 36.7% (10.0%
)
|
|
Spread over the benchmark curve (a)
|
390bps - 1,839bps (830bps)
|
|||||
Commercial mortgage servicing rights
|
668
|
|
Discounted cash flow
|
Constant prepayment rate (CPR)
|
7.7% - 14.2% (8.5%)
|
|
Discount rate
|
6.4% - 7.9% (7.8%)
|
|||||
Financial derivatives - Swaps related to
sales of certain Visa Class B common shares |
(380
|
)
|
Discounted cash flow
|
Estimated conversion factor of Visa Class B shares into Class A shares
|
163.8% weighted-average
|
|
Estimated growth rate of Visa Class
A share price |
16.0%
|
|||||
Estimated length of litigation
resolution date |
Q2 2021
|
|||||
Insignificant Level 3 assets, net of
liabilities (c) |
58
|
|
|
|
|
|
Total Level 3 assets, net of liabilities (d)
|
$
|
5,944
|
|
|
|
|
(a)
|
The assumed yield spread over the benchmark curve for each instrument is generally intended to incorporate non-interest rate risks, such as credit and liquidity risks.
|
(b)
|
Consensus pricing refers to fair value estimates that are generally internally developed using information such as dealer quotes or other third-party provided valuations or comparable asset prices.
|
(c)
|
Represents the aggregate amount of Level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant. The amount includes certain financial derivative assets and liabilities, trading securities, other debt securities, residential mortgage loans held for sale, other assets, other borrowed funds and other liabilities.
|
(d)
|
Consisted of total Level 3 assets of
$6.5 billion
and total Level 3 liabilities of
$.4 billion
as of
June 30, 2018
and
$6.4 billion
and
$.5 billion
as of
December 31, 2017
, respectively.
|
|
Fair Value (a)
|
|
Gains (Losses)
Three months ended
|
|
Gains (Losses)
Six months ended |
|
||||||||||||||||||
In millions
|
June 30
2018 |
|
|
December 31
2017 |
|
|
June 30
2018 |
|
|
June 30
2017 |
|
|
June 30
2018 |
|
|
June 30
2017 |
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nonaccrual loans
|
$
|
123
|
|
|
$
|
100
|
|
|
$
|
(15
|
)
|
|
$
|
(23
|
)
|
|
$
|
(33
|
)
|
|
$
|
(23
|
)
|
|
OREO and foreclosed assets
|
44
|
|
|
70
|
|
|
(3
|
)
|
|
(5
|
)
|
|
(2
|
)
|
|
(8
|
)
|
|
||||||
Long-lived assets
|
9
|
|
|
80
|
|
|
(6
|
)
|
|
(5
|
)
|
|
(6
|
)
|
|
(8
|
)
|
|
||||||
Total assets
|
$
|
176
|
|
|
$
|
250
|
|
|
$
|
(24
|
)
|
|
$
|
(33
|
)
|
|
$
|
(41
|
)
|
|
$
|
(39
|
)
|
|
(a)
|
All Level 3 as of
June 30, 2018
and
December 31, 2017
.
|
Level 3 Instruments Only
In millions
|
Fair Value
|
|
|
Valuation Techniques
|
Unobservable Inputs
|
|
June 30, 2018
|
|
|
|
|
||
Assets
|
|
|
|
|
||
Nonaccrual loans
|
$
|
123
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
OREO and foreclosed assets
|
44
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
|
Long-lived assets
|
9
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
|
Total assets
|
$
|
176
|
|
|
|
|
December 31, 2017
|
|
|
|
|
||
Assets
|
|
|
|
|
||
Nonaccrual loans
|
$
|
100
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
OREO and foreclosed assets
|
70
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
|
Long-lived assets
|
47
|
|
|
Fair value of property or collateral
|
Appraised value/sales price
|
|
|
20
|
|
|
Fair value of property or collateral
|
Broker opinion
|
|
|
13
|
|
|
Fair value of property or collateral
|
Projected income/required improvement costs
|
|
Total assets
|
$
|
250
|
|
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
|
||||||||||||||||||||
In millions
|
Fair Value
|
|
|
Aggregate Unpaid
Principal Balance
|
|
|
Difference
|
|
|
Fair Value
|
|
|
Aggregate Unpaid
Principal Balance
|
|
|
Difference
|
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage loans held for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing loans
|
$
|
758
|
|
|
$
|
738
|
|
|
$
|
20
|
|
|
$
|
822
|
|
|
$
|
796
|
|
|
$
|
26
|
|
|
Accruing loans 90 days or more past due
|
2
|
|
|
2
|
|
|
|
|
|
3
|
|
|
3
|
|
|
|
|
|
||||||
Nonaccrual loans
|
7
|
|
|
8
|
|
|
(1
|
)
|
|
7
|
|
|
8
|
|
|
(1
|
)
|
|
||||||
Total
|
$
|
767
|
|
|
$
|
748
|
|
|
$
|
19
|
|
|
$
|
832
|
|
|
$
|
807
|
|
|
$
|
25
|
|
|
Commercial mortgage loans held for sale (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing loans
|
$
|
467
|
|
|
$
|
485
|
|
|
$
|
(18
|
)
|
|
$
|
828
|
|
|
$
|
842
|
|
|
$
|
(14
|
)
|
|
Nonaccrual loans
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
||||||
Total
|
$
|
468
|
|
|
$
|
487
|
|
|
$
|
(19
|
)
|
|
$
|
830
|
|
|
$
|
845
|
|
|
$
|
(15
|
)
|
|
Residential mortgage loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing loans
|
$
|
255
|
|
|
$
|
281
|
|
|
$
|
(26
|
)
|
|
$
|
251
|
|
|
$
|
280
|
|
|
$
|
(29
|
)
|
|
Accruing loans 90 days or more past due
|
315
|
|
|
325
|
|
|
(10
|
)
|
|
421
|
|
|
431
|
|
|
(10
|
)
|
|
||||||
Nonaccrual loans
|
183
|
|
|
298
|
|
|
(115
|
)
|
|
197
|
|
|
317
|
|
|
(120
|
)
|
|
||||||
Total
|
$
|
753
|
|
|
$
|
904
|
|
|
$
|
(151
|
)
|
|
$
|
869
|
|
|
$
|
1,028
|
|
|
$
|
(159
|
)
|
|
Other assets
|
$
|
171
|
|
|
$
|
181
|
|
|
$
|
(10
|
)
|
|
$
|
216
|
|
|
$
|
212
|
|
|
$
|
4
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other borrowed funds
|
$
|
60
|
|
|
$
|
61
|
|
|
$
|
(1
|
)
|
|
$
|
84
|
|
|
$
|
85
|
|
|
$
|
(1
|
)
|
|
(a)
|
There were no accruing loans 90 days or more past due within this category at
June 30, 2018
or
December 31, 2017
.
|
|
Gains (Losses)
|
|
Gains (Losses)
|
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
|
||||||||||||
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
||||
In millions
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans held for sale
|
$
|
8
|
|
|
$
|
32
|
|
|
$
|
12
|
|
|
$
|
62
|
|
|
Commercial mortgage loans held for sale
|
$
|
11
|
|
|
$
|
25
|
|
|
$
|
25
|
|
|
$
|
43
|
|
|
Residential mortgage loans
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
10
|
|
|
$
|
11
|
|
|
Other assets
|
$
|
(21
|
)
|
|
$
|
13
|
|
|
$
|
(10
|
)
|
|
$
|
20
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Other liabilities
|
$
|
(3
|
)
|
|
$
|
(3
|
)
|
|
$
|
(5
|
)
|
|
$
|
(19
|
)
|
|
(a)
|
The impact on earnings of offsetting hedged items or hedging instruments is not reflected in these amounts.
|
|
Carrying
|
|
|
Fair Value
|
|
|||||||||||||||
In millions
|
Amount
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
5,425
|
|
|
$
|
5,425
|
|
|
$
|
5,425
|
|
|
|
|
|
|
||||
Interest-earning deposits with banks
|
21,972
|
|
|
21,972
|
|
|
|
|
$
|
21,972
|
|
|
|
|
||||||
Securities held to maturity
|
19,850
|
|
|
19,453
|
|
|
744
|
|
|
18,565
|
|
|
$
|
144
|
|
|
||||
Net loans (excludes leases)
|
212,199
|
|
|
212,762
|
|
|
|
|
|
|
212,762
|
|
|
|||||||
Other assets
|
4,816
|
|
|
4,816
|
|
|
|
|
4,814
|
|
|
2
|
|
|
||||||
Total assets
|
$
|
264,262
|
|
|
$
|
264,428
|
|
|
$
|
6,169
|
|
|
$
|
45,351
|
|
|
$
|
212,908
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits (a)
|
$
|
17,240
|
|
|
$
|
16,914
|
|
|
|
|
$
|
16,914
|
|
|
|
|
||||
Borrowed funds
|
58,384
|
|
|
58,937
|
|
|
|
|
57,127
|
|
|
$
|
1,810
|
|
|
|||||
Unfunded loan commitments and letters of credit
|
289
|
|
|
289
|
|
|
|
|
|
|
289
|
|
|
|||||||
Other liabilities
|
421
|
|
|
421
|
|
|
|
|
421
|
|
|
|
|
|||||||
Total liabilities
|
$
|
76,334
|
|
|
$
|
76,561
|
|
|
|
|
$
|
74,462
|
|
|
$
|
2,099
|
|
|
||
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
5,249
|
|
|
$
|
5,249
|
|
|
$
|
5,249
|
|
|
|
|
|
|
||||
Interest-earning deposits with banks
|
28,595
|
|
|
28,595
|
|
|
|
|
$
|
28,595
|
|
|
|
|
||||||
Securities held to maturity
|
18,513
|
|
|
18,565
|
|
|
765
|
|
|
17,658
|
|
|
$
|
142
|
|
|
||||
Net loans (excludes leases)
|
209,044
|
|
|
211,175
|
|
|
|
|
|
|
211,175
|
|
|
|||||||
Other assets
|
6,078
|
|
|
6,736
|
|
|
|
|
5,949
|
|
|
787
|
|
|
||||||
Total assets
|
$
|
267,479
|
|
|
$
|
270,320
|
|
|
$
|
6,014
|
|
|
$
|
52,202
|
|
|
$
|
212,104
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
265,053
|
|
|
$
|
264,854
|
|
|
|
|
$
|
264,854
|
|
|
|
|
||||
Borrowed funds
|
57,744
|
|
|
58,503
|
|
|
|
|
56,853
|
|
|
$
|
1,650
|
|
|
|||||
Unfunded loan commitments and letters of credit
|
297
|
|
|
297
|
|
|
|
|
|
|
297
|
|
|
|||||||
Other liabilities
|
399
|
|
|
399
|
|
|
|
|
399
|
|
|
|
|
|||||||
Total liabilities
|
$
|
323,493
|
|
|
$
|
324,053
|
|
|
|
|
$
|
322,106
|
|
|
$
|
1,947
|
|
|
(a)
|
The amount at June 30, 2018 excludes deposit liabilities with no defined or contractual maturities in accordance with the adoption of ASU 2016-01. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional details on this adoption.
|
•
|
financial instruments recorded at fair value on a recurring basis (as they are disclosed in Table
51
),
|
•
|
investments accounted for under the equity method,
|
•
|
equity securities without a readily determinable fair value that apply for the alternative measurement approach to fair value under ASU 2016-01,
|
•
|
real and personal property,
|
•
|
lease financing,
|
•
|
loan customer relationships,
|
•
|
deposit customer intangibles,
|
•
|
mortgage servicing rights,
|
•
|
retail branch networks,
|
•
|
fee-based businesses, such as asset management and brokerage,
|
•
|
trademarks and brand names,
|
•
|
trade receivables and payables due in one year or less, and
|
•
|
deposit liabilities with no defined or contractual maturities.
|
|
Commercial MSRs
|
|
Residential MSRs
|
|
||||||||||
In millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
||||
January 1
|
$
|
668
|
|
$
|
576
|
|
|
$
|
1,164
|
|
$
|
1,182
|
|
|
Additions:
|
|
|
|
|
|
|
||||||||
From loans sold with servicing retained
|
23
|
|
46
|
|
|
23
|
|
28
|
|
|
||||
Purchases
|
44
|
|
34
|
|
|
47
|
|
154
|
|
|
||||
Changes in fair value due to:
|
|
|
|
|
|
|
||||||||
Time and payoffs (a)
|
(68
|
)
|
(52
|
)
|
|
(84
|
)
|
(85
|
)
|
|
||||
Other (b)
|
81
|
|
14
|
|
|
147
|
|
(30
|
)
|
|
||||
June 30
|
$
|
748
|
|
$
|
618
|
|
|
$
|
1,297
|
|
$
|
1,249
|
|
|
Related unpaid principal balance at June 30
|
$
|
174,589
|
|
$
|
147,531
|
|
|
$
|
124,325
|
|
$
|
131,060
|
|
|
Servicing advances at June 30
|
$
|
212
|
|
$
|
239
|
|
|
$
|
158
|
|
$
|
218
|
|
|
(a)
|
Represents decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period.
|
(b)
|
Represents MSR value changes resulting primarily from market-driven changes in interest rates.
|
Dollars in millions
|
June 30
2018 |
|
|
December 31
2017 |
|
|
||
Fair value
|
$
|
748
|
|
|
$
|
668
|
|
|
Weighted-average life (years)
|
4.1
|
|
|
4.4
|
|
|
||
Weighted-average constant prepayment rate
|
7.46
|
%
|
|
8.51
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
10
|
|
|
$
|
12
|
|
|
Decline in fair value from 20% adverse change
|
$
|
21
|
|
|
$
|
23
|
|
|
Effective discount rate
|
8.48
|
%
|
|
7.81
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
21
|
|
|
$
|
18
|
|
|
Decline in fair value from 20% adverse change
|
$
|
41
|
|
|
$
|
36
|
|
|
Dollars in millions
|
June 30
2018 |
|
|
December 31
2017 |
|
|
||
Fair value
|
$
|
1,297
|
|
|
$
|
1,164
|
|
|
Weighted-average life (years)
|
7.1
|
|
|
6.4
|
|
|
||
Weighted-average constant prepayment rate
|
8.43
|
%
|
|
10.04
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
39
|
|
|
$
|
44
|
|
|
Decline in fair value from 20% adverse change
|
$
|
75
|
|
|
$
|
85
|
|
|
Weighted-average option adjusted spread
|
828
|
|
bps
|
830
|
|
bps
|
||
Decline in fair value from 10% adverse change
|
$
|
39
|
|
|
$
|
35
|
|
|
Decline in fair value from 20% adverse change
|
$
|
75
|
|
|
$
|
67
|
|
|
|
Qualified Pension Plan
|
|
|
Nonqualified Pension Plan
|
|
|
Postretirement Benefits
|
|
||||||||||||||||||
Three months ended June 30
In millions |
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
||||||
Net periodic cost consists of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
30
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|||
Interest cost
|
42
|
|
|
44
|
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
|
3
|
|
|
3
|
|
|
||||
Expected return on plan assets
|
(77
|
)
|
|
(71
|
)
|
|
|
|
|
|
|
|
(2
|
)
|
|
(1
|
)
|
|
||||||||
Amortization of prior service credit
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|||||||||
Amortization of actuarial losses
|
|
|
10
|
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|||||||||
Net periodic cost/(benefit)
|
$
|
(4
|
)
|
|
$
|
7
|
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
|
Qualified Pension Plan
|
|
|
Nonqualified Pension Plan
|
|
|
Postretirement Benefits
|
|
||||||||||||||||||
Six months ended June 30
In millions |
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
||||||
Net periodic cost consists of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
58
|
|
|
$
|
51
|
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Interest cost
|
85
|
|
|
89
|
|
|
|
5
|
|
|
6
|
|
|
|
6
|
|
|
7
|
|
|
||||||
Expected return on plan assets
|
(153
|
)
|
|
(142
|
)
|
|
|
|
|
|
|
|
(3
|
)
|
|
(2
|
)
|
|
||||||||
Amortization of prior service credit
|
1
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|||||||||
Amortization of actuarial losses
|
|
|
22
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
|||||||||
Net periodic cost/(benefit)
|
$
|
(9
|
)
|
|
$
|
18
|
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
|
$
|
5
|
|
|
$
|
6
|
|
|
(a)
|
The service cost component is included in Personnel expense on the Consolidated Income Statement. All other components are included in Other noninterest expense on the Consolidated Income Statement.
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
In millions
|
Notional /
Contract
Amount
|
|
|
Asset Fair
Value (a)
|
|
|
Liability Fair
Value (b)
|
|
|
Notional /
Contract
Amount
|
|
|
Asset Fair
Value (a)
|
|
|
Liability Fair
Value (b)
|
|
||||||
Derivatives used for hedging under GAAP
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts (c):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fair value hedges
|
$
|
32,612
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
34,059
|
|
|
$
|
114
|
|
|
$
|
94
|
|
Cash flow hedges
|
21,802
|
|
|
4
|
|
|
|
|
23,875
|
|
|
60
|
|
|
6
|
|
|||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net investment hedges
|
1,049
|
|
|
19
|
|
|
|
|
1,060
|
|
|
|
|
|
11
|
|
|||||||
Total derivatives designated for hedging under GAAP
|
$
|
55,463
|
|
|
$
|
37
|
|
|
$
|
13
|
|
|
$
|
58,994
|
|
|
$
|
174
|
|
|
$
|
111
|
|
Derivatives not used for hedging under GAAP
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivatives used for mortgage banking activities (d):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Swaps
|
$
|
69,325
|
|
|
|
|
$
|
4
|
|
|
$
|
48,335
|
|
|
$
|
162
|
|
|
$
|
42
|
|
||
Futures (e)
|
53,525
|
|
|
|
|
|
|
47,494
|
|
|
|
|
|
||||||||||
Mortgage-backed commitments
|
6,808
|
|
|
$
|
30
|
|
|
17
|
|
|
8,999
|
|
|
19
|
|
|
9
|
|
|||||
Other
|
6,310
|
|
|
13
|
|
|
|
|
2,530
|
|
|
11
|
|
|
2
|
|
|||||||
Subtotal
|
135,968
|
|
|
43
|
|
|
21
|
|
|
107,358
|
|
|
192
|
|
|
53
|
|
||||||
Derivatives used for customer-related activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Swaps
|
218,121
|
|
|
1,140
|
|
|
1,875
|
|
|
194,042
|
|
|
2,079
|
|
|
1,772
|
|
||||||
Futures (e)
|
3,801
|
|
|
|
|
|
|
3,453
|
|
|
|
|
|
||||||||||
Mortgage-backed commitments
|
2,582
|
|
|
7
|
|
|
4
|
|
|
2,228
|
|
|
2
|
|
|
2
|
|
||||||
Other
|
21,073
|
|
|
69
|
|
|
65
|
|
|
17,775
|
|
|
75
|
|
|
36
|
|
||||||
Subtotal
|
245,577
|
|
|
1,216
|
|
|
1,944
|
|
|
217,498
|
|
|
2,156
|
|
|
1,810
|
|
||||||
Foreign exchange contracts and other
|
29,225
|
|
|
532
|
|
|
517
|
|
|
27,330
|
|
|
349
|
|
|
332
|
|
||||||
Subtotal
|
274,802
|
|
|
1,748
|
|
|
2,461
|
|
|
244,828
|
|
|
2,505
|
|
|
2,142
|
|
||||||
Derivatives used for other risk management activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts and other (f)
|
8,431
|
|
|
64
|
|
|
388
|
|
|
7,445
|
|
|
3
|
|
|
550
|
|
||||||
Total derivatives not designated for hedging under GAAP
|
$
|
419,201
|
|
|
$
|
1,855
|
|
|
$
|
2,870
|
|
|
$
|
359,631
|
|
|
$
|
2,700
|
|
|
$
|
2,745
|
|
Total gross derivatives
|
$
|
474,664
|
|
|
$
|
1,892
|
|
|
$
|
2,883
|
|
|
$
|
418,625
|
|
|
$
|
2,874
|
|
|
$
|
2,856
|
|
Less: Impact of legally enforceable master netting agreements
|
|
|
742
|
|
|
742
|
|
|
|
|
1,054
|
|
|
1,054
|
|
||||||||
Less: Cash collateral received/paid
|
|
|
92
|
|
|
723
|
|
|
|
|
636
|
|
|
763
|
|
||||||||
Total derivatives
|
|
|
$
|
1,058
|
|
|
$
|
1,418
|
|
|
|
|
|
$
|
1,184
|
|
|
$
|
1,039
|
|
(a)
|
Included in Other assets on our Consolidated Balance Sheet.
|
(b)
|
Included in Other liabilities on our Consolidated Balance Sheet.
|
(c)
|
Represents primarily swaps.
|
(d)
|
Includes both residential and commercial mortgage banking activities.
|
(e)
|
Futures contracts settle in cash daily and, therefore, no derivative asset or derivative liability is recognized on our Consolidated Balance Sheet.
|
(f)
|
Includes our obligation to fund a portion of certain BlackRock LTIP programs and the swaps entered into in connection with sales of a portion of Visa Class B common shares.
|
|
Location and Amount of Gains (Losses) Recognized in Income
|
|||||||||||
|
Interest Income
|
Interest Expense
|
Noninterest Income
|
|||||||||
In millions
|
Loans
|
Investment Securities
|
Borrowed Funds
|
Other
|
||||||||
For the three months ended June 30, 2018
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,345
|
|
$
|
557
|
|
$
|
408
|
|
$
|
334
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
|
$
|
(24
|
)
|
$
|
100
|
|
|
|
||
Derivatives
|
|
|
$
|
27
|
|
$
|
(125
|
)
|
|
|
||
Amounts related to interest settlements on derivatives
|
|
|
$
|
1
|
|
$
|
7
|
|
|
|
||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from accumulated OCI
|
$
|
11
|
|
$
|
3
|
|
|
|
$
|
5
|
|
|
For the three months ended June 30, 2017
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,040
|
|
$
|
495
|
|
$
|
273
|
|
$
|
304
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items
|
|
$
|
33
|
|
$
|
(75
|
)
|
|
||||
Derivatives
|
|
$
|
(34
|
)
|
$
|
67
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(10
|
)
|
$
|
61
|
|
|
||||
Gains (losses) on cash flow hedges - interest rate contracts (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from accumulated OCI
|
$
|
44
|
|
$
|
5
|
|
|
|
|
|||
For the six months ended June 30, 2018
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
4,573
|
|
$
|
1,069
|
|
$
|
752
|
|
$
|
579
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
(114
|
)
|
$
|
470
|
|
|
||||
Derivatives
|
|
$
|
119
|
|
$
|
(495
|
)
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(2
|
)
|
$
|
33
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from accumulated OCI
|
$
|
37
|
|
$
|
7
|
|
|
$
|
7
|
|
||
For the six months ended June 30, 2017
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
3,944
|
|
$
|
988
|
|
$
|
513
|
|
$
|
605
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items
|
|
$
|
12
|
|
$
|
11
|
|
|
||||
Derivatives
|
|
$
|
(12
|
)
|
$
|
(28
|
)
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(25
|
)
|
$
|
137
|
|
|
||||
Gains (losses) on cash flow hedges - interest rate contracts (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from accumulated OCI
|
$
|
90
|
|
$
|
11
|
|
|
$
|
3
|
|
(a)
|
For all periods presented, there were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for any of the fair value or cash flow hedge strategies.
|
(b)
|
All cash flow and fair value hedge derivatives were interest rate contracts for the periods presented.
|
(c)
|
Includes an insignificant amount of fair value hedge adjustments related to discontinued hedge relationships.
|
(d)
|
For all periods presented, there were no gains or losses from cash flow hedge derivatives reclassified to income because it became probable that the original forecasted transaction would not occur.
|
|
June 30, 2018
|
|
||||||
In millions
|
Carrying Value of the Hedged Items
|
|
|
Cumulative Fair Value Hedge Adjustment included in the Carrying Value of Hedged Items (a)
|
|
|
||
Investment securities - Available for Sale (b)
|
$
|
7,125
|
|
|
$
|
(199
|
)
|
|
Borrowed funds
|
$
|
27,818
|
|
|
$
|
(580
|
)
|
|
(a)
|
Includes
$.5 billion
of fair value hedge adjustments primarily related to borrowed funds discontinued relationships.
|
(b)
|
Carrying value shown represents amortized cost.
|
|
Three months ended
June 30 |
|
Six months ended
June 30 |
|
||||||||||
In millions
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
||||
Derivatives used for mortgage banking activities:
|
|
|
|
|
|
|
||||||||
Interest rate contracts (a)
|
$
|
(18
|
)
|
$
|
80
|
|
|
$
|
(132
|
)
|
$
|
73
|
|
|
Derivatives used for customer-related activities:
|
|
|
|
|
|
|
||||||||
Interest rate contracts
|
25
|
|
19
|
|
|
81
|
|
53
|
|
|
||||
Foreign exchange contracts and other
|
13
|
|
40
|
|
|
57
|
|
72
|
|
|
||||
Gains (losses) from customer-related activities (b)
|
38
|
|
59
|
|
|
138
|
|
125
|
|
|
||||
Derivatives used for other risk management activities:
|
|
|
|
|
|
|
||||||||
Foreign exchange contracts and other (b) (c)
|
147
|
|
(106
|
)
|
|
130
|
|
(156
|
)
|
|
||||
Total gains (losses) from derivatives not designated as hedging instruments
|
$
|
167
|
|
$
|
33
|
|
|
$
|
136
|
|
$
|
42
|
|
|
(a)
|
Included in Residential mortgage, Corporate services and Other noninterest income on our Consolidated Income Statement.
|
(b)
|
Included in Other noninterest income on our Consolidated Income Statement.
|
(c)
|
Includes BlackRock LTIP funding obligation and the swaps entered into in connection with sales of a portion of Visa Class B common shares.
|
In millions
|
|
|
|
Amounts Offset on the
Consolidated Balance Sheet
|
|
|
|
|
|
Securities
Collateral Held
/ (Pledged)
Under Master
Netting
Agreements
|
|
|
|
|
|||||||||||||
Gross
Fair Value
|
|
|
Fair Value
Offset Amount
|
|
|
Cash
Collateral
|
|
|
Net
Fair Value
|
|
|
|
|
Net Amounts
|
|
|
|||||||||||
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared (a)
|
|
$
|
15
|
|
|
|
|
|
|
$
|
15
|
|
|
|
|
|
|
$
|
15
|
|
|
||||||
Exchange-traded
|
|
1
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|
|||||||||
Over-the-counter
|
|
1,261
|
|
|
$
|
467
|
|
|
$
|
81
|
|
|
713
|
|
|
|
|
$
|
20
|
|
|
693
|
|
|
|||
Foreign exchange and other contracts
|
|
615
|
|
|
275
|
|
|
11
|
|
|
329
|
|
|
|
|
|
|
329
|
|
|
|||||||
Total derivative assets
|
|
$
|
1,892
|
|
|
$
|
742
|
|
|
$
|
92
|
|
|
$
|
1,058
|
|
|
(b)
|
|
$
|
20
|
|
|
$
|
1,038
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared (a)
|
|
$
|
12
|
|
|
|
|
|
|
$
|
12
|
|
|
|
|
|
|
$
|
12
|
|
|
||||||
Over-the-counter
|
|
1,966
|
|
|
$
|
591
|
|
|
$
|
482
|
|
|
893
|
|
|
|
|
|
|
893
|
|
|
|||||
Foreign exchange and other contracts
|
|
905
|
|
|
151
|
|
|
241
|
|
|
513
|
|
|
|
|
|
|
513
|
|
|
|||||||
Total derivative liabilities
|
|
$
|
2,883
|
|
|
$
|
742
|
|
|
$
|
723
|
|
|
$
|
1,418
|
|
|
(c)
|
|
|
|
|
$
|
1,418
|
|
|
|
December 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
827
|
|
|
$
|
251
|
|
|
$
|
567
|
|
|
$
|
9
|
|
|
|
|
|
|
$
|
9
|
|
|
||
Over-the-counter
|
|
1,695
|
|
|
668
|
|
|
67
|
|
|
960
|
|
|
|
|
$
|
32
|
|
|
928
|
|
|
|||||
Foreign exchange and other contracts
|
|
352
|
|
|
135
|
|
|
2
|
|
|
215
|
|
|
|
|
|
|
215
|
|
|
|||||||
Total derivative assets
|
|
$
|
2,874
|
|
|
$
|
1,054
|
|
|
$
|
636
|
|
|
$
|
1,184
|
|
|
(b)
|
|
$
|
32
|
|
|
$
|
1,152
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
260
|
|
|
$
|
251
|
|
|
|
|
|
$
|
9
|
|
|
|
|
|
|
$
|
9
|
|
|
|||
Over-the-counter
|
|
1,703
|
|
|
662
|
|
|
669
|
|
|
372
|
|
|
|
|
|
|
372
|
|
|
|||||||
Foreign exchange and other contracts
|
|
893
|
|
|
141
|
|
|
94
|
|
|
658
|
|
|
|
|
|
|
658
|
|
|
|||||||
Total derivative liabilities
|
|
$
|
2,856
|
|
|
$
|
1,054
|
|
|
$
|
763
|
|
|
$
|
1,039
|
|
|
(c)
|
|
|
|
|
$
|
1,039
|
|
|
(a)
|
Reflects our first quarter
2018
change in accounting presentation for variation margin for certain derivative instruments cleared through a central clearing house. The accounting change reduced the asset and liability gross fair values with corresponding reductions to the fair value and cash collateral offsets, resulting in no changes to the net fair value amounts.
|
(b)
|
Represents the net amount of derivative assets included in Other assets on our Consolidated Balance Sheet.
|
(c)
|
Represents the net amount of derivative liabilities included in Other liabilities on our Consolidated Balance Sheet.
|
|
|
Three months ended
June 30 |
|
Six months ended
June 30 |
|
||||||||||||
In millions, except per share data
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||
Net income
|
|
$
|
1,356
|
|
|
$
|
1,097
|
|
|
$
|
2,595
|
|
|
$
|
2,171
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests
|
|
10
|
|
|
10
|
|
|
20
|
|
|
27
|
|
|
||||
Preferred stock dividends
|
|
55
|
|
|
55
|
|
|
118
|
|
|
118
|
|
|
||||
Preferred discount accretion and redemptions
|
|
1
|
|
|
2
|
|
|
2
|
|
|
23
|
|
|
||||
Net income attributable to common shares
|
|
1,290
|
|
|
1,030
|
|
|
2,455
|
|
|
2,003
|
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends and undistributed earnings allocated to participating securities
|
|
5
|
|
|
4
|
|
|
10
|
|
|
10
|
|
|
||||
Net income attributable to basic common shares
|
|
$
|
1,285
|
|
|
$
|
1,026
|
|
|
$
|
2,445
|
|
|
$
|
1,993
|
|
|
Basic weighted-average common shares outstanding
|
|
469
|
|
|
484
|
|
|
471
|
|
|
486
|
|
|
||||
Basic earnings per common share (a)
|
|
$
|
2.74
|
|
|
$
|
2.12
|
|
|
$
|
5.19
|
|
|
$
|
4.10
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to basic common shares
|
|
$
|
1,285
|
|
|
$
|
1,026
|
|
|
$
|
2,445
|
|
|
$
|
1,993
|
|
|
Less: Impact of BlackRock earnings per share dilution
|
|
3
|
|
|
1
|
|
|
5
|
|
|
5
|
|
|
||||
Net income attributable to diluted common shares
|
|
$
|
1,282
|
|
|
$
|
1,025
|
|
|
$
|
2,440
|
|
|
$
|
1,988
|
|
|
Basic weighted-average common shares outstanding
|
|
469
|
|
|
484
|
|
|
471
|
|
|
486
|
|
|
||||
Dilutive potential common shares
|
|
3
|
|
|
4
|
|
|
3
|
|
|
5
|
|
|
||||
Diluted weighted-average common shares outstanding
|
|
472
|
|
|
488
|
|
|
474
|
|
|
491
|
|
|
||||
Diluted earnings per common share (a)
|
|
$
|
2.72
|
|
|
$
|
2.10
|
|
|
$
|
5.15
|
|
|
$
|
4.05
|
|
|
(a)
|
Basic and diluted earnings per share under the two-class method are determined on net income reported on the income statement less earnings allocated to nonvested restricted shares and restricted share units with nonforfeitable dividends and dividend rights (participating securities).
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
||||||||||||||||||||||
In millions
|
Shares
Outstanding
Common
Stock
|
|
|
Common
Stock
|
|
Capital
Surplus -
Preferred
Stock
|
|
Capital
Surplus -
Common
Stock and
Other
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Treasury
Stock
|
|
|
Non-
controlling
Interests
|
|
Total Equity
|
|
|
||||||||
Balance at January 1, 2017
|
485
|
|
|
$
|
2,709
|
|
$
|
3,977
|
|
$
|
12,674
|
|
$
|
31,670
|
|
$
|
(265
|
)
|
$
|
(5,066
|
)
|
|
$
|
1,155
|
|
$
|
46,854
|
|
|
Net income
|
|
|
|
|
|
2,144
|
|
|
|
|
27
|
|
2,171
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
167
|
|
|
|
|
167
|
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common ($1.10 per share)
|
|
|
|
|
|
(540
|
)
|
|
|
|
|
(540
|
)
|
|
|||||||||||||||
Preferred
|
|
|
|
|
|
(118
|
)
|
|
|
|
|
(118
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
4
|
|
|
(4
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Redemption of noncontrolling interests (a)
|
|
|
|
|
|
(19
|
)
|
|
|
|
(981
|
)
|
(1,000
|
)
|
|
||||||||||||||
Common stock activity (b)
|
|
|
1
|
|
|
9
|
|
|
|
|
|
|
10
|
|
|
||||||||||||||
Treasury stock activity
|
(5
|
)
|
|
|
|
(232
|
)
|
|
|
(921
|
)
|
|
|
(1,153
|
)
|
|
|||||||||||||
Other
|
|
|
|
|
(106
|
)
|
|
|
|
|
(100
|
)
|
(206
|
)
|
|
||||||||||||||
Balance at June 30, 2017 (c)
|
480
|
|
|
$
|
2,710
|
|
$
|
3,981
|
|
$
|
12,345
|
|
$
|
33,133
|
|
$
|
(98
|
)
|
$
|
(5,987
|
)
|
|
$
|
101
|
|
$
|
46,185
|
|
|
Balance at December 31, 2017
|
473
|
|
|
$
|
2,710
|
|
$
|
3,985
|
|
$
|
12,389
|
|
$
|
35,481
|
|
$
|
(148
|
)
|
$
|
(6,904
|
)
|
|
$
|
72
|
|
$
|
47,585
|
|
|
Cumulative effect of ASU adoptions (d)
|
|
|
|
|
|
(22
|
)
|
6
|
|
|
|
|
(16
|
)
|
|
||||||||||||||
Balance at January 1, 2018
|
473
|
|
|
$
|
2,710
|
|
$
|
3,985
|
|
$
|
12,389
|
|
$
|
35,459
|
|
$
|
(142
|
)
|
$
|
(6,904
|
)
|
|
$
|
72
|
|
$
|
47,569
|
|
|
Net income
|
|
|
|
|
|
2,575
|
|
|
|
|
20
|
|
2,595
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
(798
|
)
|
|
|
|
(798
|
)
|
|
|||||||||||||||
Cash dividends declared
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Common ($1.50 per share)
|
|
|
|
|
|
(713
|
)
|
|
|
|
|
(713
|
)
|
|
|||||||||||||||
Preferred
|
|
|
|
|
|
(118
|
)
|
|
|
|
|
(118
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
|
|||||||||||||||
Common stock activity (b)
|
|
|
|
|
9
|
|
|
|
|
|
|
9
|
|
|
|||||||||||||||
Treasury stock activity
|
(8
|
)
|
|
|
|
(26
|
)
|
|
|
(1,413
|
)
|
|
|
(1,439
|
)
|
|
|||||||||||||
Other
|
|
|
|
|
(109
|
)
|
|
|
|
|
(21
|
)
|
(130
|
)
|
|
||||||||||||||
Balance at June 30, 2018 (c)
|
465
|
|
|
$
|
2,710
|
|
$
|
3,987
|
|
$
|
12,263
|
|
$
|
37,201
|
|
$
|
(940
|
)
|
$
|
(8,317
|
)
|
|
$
|
71
|
|
$
|
46,975
|
|
|
(a)
|
See Note 15 Equity in our 2017 Form 10-K for additional information on the redemption of Perpetual Trust Securities.
|
(b)
|
Common stock activity totaled less than
.5 million
shares issued.
|
(c)
|
The par value of our preferred stock outstanding was less than
$.5 million
at each date and, therefore, is excluded from this presentation.
|
(d)
|
Represents the cumulative effect of adopting ASU 2014-09, ASU 2016-01, ASU 2017-12 and ASU 2018-02. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on the adoption of these ASUs
.
|
|
Three months ended
June 30 |
|
|
Six months ended
June 30 |
|
||||||||||
In millions
|
2018
|
|
2017
|
|
|
|
2018
|
|
2017
|
|
|
||||
Net unrealized gains (losses) on non-OTTI securities
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on non-OTTI securities
|
$
|
(161
|
)
|
$
|
169
|
|
|
|
$
|
(806
|
)
|
$
|
236
|
|
|
Less: Net gains (losses) realized as a yield adjustment reclassified to investment
securities interest income
|
2
|
|
5
|
|
|
|
6
|
|
10
|
|
|
||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
(8
|
)
|
13
|
|
|
|
(11
|
)
|
6
|
|
|
||||
Net increase (decrease), pre-tax
|
(155
|
)
|
151
|
|
|
|
(801
|
)
|
220
|
|
|
||||
Effect of income taxes
|
36
|
|
(58
|
)
|
|
|
186
|
|
(83
|
)
|
|
||||
Net increase (decrease), after-tax
|
(119
|
)
|
93
|
|
|
|
(615
|
)
|
137
|
|
|
||||
Net unrealized gains (losses) on OTTI securities
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on OTTI securities
|
3
|
|
61
|
|
|
|
17
|
|
98
|
|
|
||||
Less: OTTI losses realized on securities reclassified to noninterest income
|
|
(1
|
)
|
|
|
|
|
(1
|
)
|
|
|||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
|
|
|
|
|
|
2
|
|
|
||||||
Net increase (decrease), pre-tax
|
3
|
|
62
|
|
|
|
17
|
|
97
|
|
|
||||
Effect of income taxes
|
(1
|
)
|
(24
|
)
|
|
|
(5
|
)
|
(37
|
)
|
|
||||
Net increase (decrease), after-tax
|
2
|
|
38
|
|
|
|
12
|
|
60
|
|
|
||||
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on cash flow hedge derivatives
|
(94
|
)
|
39
|
|
|
|
(255
|
)
|
17
|
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to loan interest income
|
11
|
|
44
|
|
|
|
37
|
|
90
|
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment
securities interest income
|
3
|
|
5
|
|
|
|
7
|
|
11
|
|
|
||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
5
|
|
|
|
|
|
7
|
|
3
|
|
|
||||
Net increase (decrease), pre-tax
|
(113
|
)
|
(10
|
)
|
|
|
(306
|
)
|
(87
|
)
|
|
||||
Effect of income taxes
|
26
|
|
4
|
|
|
|
70
|
|
32
|
|
|
||||
Net increase (decrease), after-tax
|
(87
|
)
|
(6
|
)
|
|
|
(236
|
)
|
(55
|
)
|
|
||||
Pension and other postretirement benefit plan adjustments
|
|
|
|
|
|
|
|
||||||||
Net pension and other postretirement benefit activity
|
5
|
|
36
|
|
|
|
66
|
|
(38
|
)
|
|
||||
Amortization of actuarial loss (gain) reclassified to other noninterest expense
|
1
|
|
11
|
|
|
|
2
|
|
24
|
|
|
||||
Amortization of prior service cost (credit) reclassified to other noninterest expense
|
|
(2
|
)
|
|
|
1
|
|
(3
|
)
|
|
|||||
Net increase (decrease), pre-tax
|
6
|
|
45
|
|
|
|
69
|
|
(17
|
)
|
|
||||
Effect of income taxes
|
(1
|
)
|
(17
|
)
|
|
|
(16
|
)
|
6
|
|
|
||||
Net increase (decrease), after-tax
|
5
|
|
28
|
|
|
|
53
|
|
(11
|
)
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
PNC’s portion of BlackRock’s OCI
|
(37
|
)
|
20
|
|
|
|
(15
|
)
|
22
|
|
|
||||
Net investment hedge derivatives
|
69
|
|
(36
|
)
|
|
|
30
|
|
(50
|
)
|
|
||||
Foreign currency translation adjustments and other
|
(67
|
)
|
38
|
|
|
|
(23
|
)
|
54
|
|
|
||||
Net increase (decrease), pre-tax
|
(35
|
)
|
22
|
|
|
|
(8
|
)
|
26
|
|
|
||||
Effect of income taxes
|
(7
|
)
|
6
|
|
|
|
(4
|
)
|
10
|
|
|
||||
Net increase (decrease), after-tax
|
(42
|
)
|
28
|
|
|
|
(12
|
)
|
36
|
|
|
||||
Total other comprehensive income, pre-tax
|
(294
|
)
|
270
|
|
|
|
(1,029
|
)
|
239
|
|
|
||||
Total other comprehensive income, tax effect
|
53
|
|
(89
|
)
|
|
|
231
|
|
(72
|
)
|
|
||||
Total other comprehensive income, after-tax
|
$
|
(241
|
)
|
$
|
181
|
|
|
|
$
|
(798
|
)
|
$
|
167
|
|
|
In millions, after-tax
|
Net unrealized gains (losses) on non-OTTI securities
|
|
|
Net unrealized gains (losses) on OTTI securities
|
|
|
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
|
Pension and other postretirement benefit plan adjustments
|
|
|
Other
|
|
|
Total
|
|
|
||||||
Balance at March 31, 2017
|
$
|
96
|
|
|
$
|
128
|
|
|
$
|
284
|
|
|
$
|
(592
|
)
|
|
$
|
(195
|
)
|
|
$
|
(279
|
)
|
|
Net activity
|
93
|
|
|
38
|
|
|
(6
|
)
|
|
28
|
|
|
28
|
|
|
181
|
|
|
||||||
Balance at June 30, 2017
|
$
|
189
|
|
|
$
|
166
|
|
|
$
|
278
|
|
|
$
|
(564
|
)
|
|
$
|
(167
|
)
|
|
$
|
(98
|
)
|
|
Balance at March 31, 2018
|
$
|
(375
|
)
|
|
$
|
225
|
|
|
$
|
35
|
|
|
$
|
(494
|
)
|
|
$
|
(90
|
)
|
|
$
|
(699
|
)
|
|
Net activity
|
(119
|
)
|
|
2
|
|
|
(87
|
)
|
|
5
|
|
|
(42
|
)
|
|
(241
|
)
|
|
||||||
Balance at June 30, 2018
|
$
|
(494
|
)
|
|
$
|
227
|
|
|
$
|
(52
|
)
|
|
$
|
(489
|
)
|
|
$
|
(132
|
)
|
|
$
|
(940
|
)
|
|
Balance at December 31, 2016
|
$
|
52
|
|
|
$
|
106
|
|
|
$
|
333
|
|
|
$
|
(553
|
)
|
|
$
|
(203
|
)
|
|
$
|
(265
|
)
|
|
Net activity
|
137
|
|
|
60
|
|
|
(55
|
)
|
|
(11
|
)
|
|
36
|
|
|
167
|
|
|
||||||
Balance at June 30, 2017
|
$
|
189
|
|
|
$
|
166
|
|
|
$
|
278
|
|
|
$
|
(564
|
)
|
|
$
|
(167
|
)
|
|
$
|
(98
|
)
|
|
Balance at December 31, 2017
|
$
|
62
|
|
|
$
|
215
|
|
|
$
|
151
|
|
|
$
|
(446
|
)
|
|
$
|
(130
|
)
|
|
$
|
(148
|
)
|
|
Cumulative effect of adopting ASU 2018-02 (a)
|
59
|
|
|
|
|
33
|
|
|
(96
|
)
|
|
10
|
|
|
6
|
|
|
|||||||
Balance at January 1, 2018
|
121
|
|
|
215
|
|
|
184
|
|
|
(542
|
)
|
|
(120
|
)
|
|
(142
|
)
|
|
||||||
Net activity
|
(615
|
)
|
|
12
|
|
|
(236
|
)
|
|
53
|
|
|
(12
|
)
|
|
(798
|
)
|
|
||||||
Balance at June 30, 2018
|
$
|
(494
|
)
|
|
$
|
227
|
|
|
$
|
(52
|
)
|
|
$
|
(489
|
)
|
|
$
|
(132
|
)
|
|
$
|
(940
|
)
|
|
(a)
|
Represents the cumulative impact of adopting ASU 2018-02 which permits the reclassification to retained earnings of the income tax effects stranded within AOCI.
See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our First Quarter 2018 Form 10-Q for additional detail on this adoption.
|
In millions
|
June 30
2018 |
|
|
December 31
2017 |
|
|
||
Commitments to extend credit
|
|
|
|
|
||||
Total commercial lending
|
$
|
118,354
|
|
|
$
|
112,125
|
|
|
Home equity lines of credit
|
16,756
|
|
|
17,852
|
|
|
||
Credit card
|
26,413
|
|
|
24,911
|
|
|
||
Other
|
4,876
|
|
|
4,753
|
|
|
||
Total commitments to extend credit
|
166,399
|
|
|
159,641
|
|
|
||
Net outstanding standby letters of credit (a)
|
8,269
|
|
|
8,651
|
|
|
||
Reinsurance agreements (b)
|
1,605
|
|
|
1,654
|
|
|
||
Standby bond purchase agreements (c)
|
991
|
|
|
843
|
|
|
||
Other commitments (d)
|
1,146
|
|
|
1,732
|
|
|
||
Total commitments to extend credit and other commitments
|
$
|
178,410
|
|
|
$
|
172,521
|
|
|
(a)
|
Net outstanding standby letters of credit include
$3.0 billion
and
$3.5 billion
at
June 30, 2018
and
December 31, 2017
, respectively, which support remarketing programs.
|
(b)
|
Represents aggregate maximum exposure up to the specified limits of the reinsurance contracts provided by our wholly-owned captive insurance subsidiary. These amounts reflect estimates based on availability of financial information from insurance carriers. As of
June 30, 2018
, the aggregate maximum exposure amount comprised
$1.4 billion
for accidental death & dismemberment contracts and
$.2 billion
for credit life, accident and health contracts. Comparable amounts at
December 31, 2017
were
$1.5 billion
and
$.2 billion
, respectively.
|
(c)
|
We enter into standby bond purchase agreements to support municipal bond obligations.
|
(d)
|
Includes
$.5 billion
related to investments in qualified affordable housing projects at both
June 30, 2018
and
December 31, 2017
.
|
•
|
Retail Banking
|
•
|
Corporate & Institutional Banking
|
•
|
Asset Management Group
|
•
|
BlackRock
|
Three months ended June 30
In millions |
|
Retail
Banking |
|
|
Corporate &
Institutional Banking |
|
|
Asset
Management Group |
|
|
BlackRock
|
|
|
Other
|
|
|
Consolidated (a)
|
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
1,277
|
|
|
$
|
877
|
|
|
$
|
72
|
|
|
|
|
$
|
187
|
|
|
$
|
2,413
|
|
||
Noninterest income
|
|
678
|
|
|
635
|
|
|
222
|
|
|
$
|
232
|
|
|
144
|
|
|
1,911
|
|
|||||
Total revenue
|
|
1,955
|
|
|
1,512
|
|
|
294
|
|
|
232
|
|
|
331
|
|
|
4,324
|
|
||||||
Provision for credit losses (benefit)
|
|
72
|
|
|
15
|
|
|
7
|
|
|
|
|
(14
|
)
|
|
80
|
|
|||||||
Depreciation and amortization
|
|
47
|
|
|
45
|
|
|
13
|
|
|
|
|
132
|
|
|
237
|
|
|||||||
Other noninterest expense
|
|
1,403
|
|
|
594
|
|
|
210
|
|
|
|
|
140
|
|
|
2,347
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
433
|
|
|
858
|
|
|
64
|
|
|
232
|
|
|
73
|
|
|
1,660
|
|
||||||
Income taxes (benefit)
|
|
103
|
|
|
183
|
|
|
15
|
|
|
37
|
|
|
(34
|
)
|
|
304
|
|
||||||
Net income
|
|
$
|
330
|
|
|
$
|
675
|
|
|
$
|
49
|
|
|
$
|
195
|
|
|
$
|
107
|
|
|
$
|
1,356
|
|
Average Assets (b)
|
|
$
|
89,021
|
|
|
$
|
153,619
|
|
|
$
|
7,469
|
|
|
$
|
7,811
|
|
|
$
|
117,707
|
|
|
$
|
375,627
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
1,139
|
|
|
$
|
853
|
|
|
$
|
73
|
|
|
|
|
$
|
193
|
|
|
$
|
2,258
|
|
||
Noninterest income
|
|
645
|
|
|
588
|
|
|
217
|
|
|
$
|
186
|
|
|
166
|
|
|
1,802
|
|
|||||
Total revenue
|
|
1,784
|
|
|
1,441
|
|
|
290
|
|
|
186
|
|
|
359
|
|
|
4,060
|
|
||||||
Provision for credit losses
(benefit)
|
|
50
|
|
|
87
|
|
|
(7
|
)
|
|
|
|
(32
|
)
|
|
98
|
|
|||||||
Depreciation and amortization
|
|
47
|
|
|
54
|
|
|
14
|
|
|
|
|
128
|
|
|
243
|
|
|||||||
Other noninterest expense
|
|
1,323
|
|
|
548
|
|
|
201
|
|
|
|
|
164
|
|
|
2,236
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
364
|
|
|
752
|
|
|
82
|
|
|
186
|
|
|
99
|
|
|
1,483
|
|
||||||
Income taxes (benefit)
|
|
134
|
|
|
234
|
|
|
30
|
|
|
42
|
|
|
(54
|
)
|
|
386
|
|
||||||
Net income
|
|
$
|
230
|
|
|
$
|
518
|
|
|
$
|
52
|
|
|
$
|
144
|
|
|
$
|
153
|
|
|
$
|
1,097
|
|
Average Assets (b)
|
|
$
|
88,671
|
|
|
$
|
148,267
|
|
|
$
|
7,516
|
|
|
$
|
7,132
|
|
|
$
|
118,716
|
|
|
$
|
370,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Six months ended June 30
In millions |
|
Retail
Banking |
|
|
Corporate &
Institutional Banking |
|
|
Asset
Management Group |
|
|
BlackRock
|
|
|
Other
|
|
|
Consolidated (a)
|
|
||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
2,495
|
|
|
$
|
1,738
|
|
|
$
|
146
|
|
|
|
|
$
|
395
|
|
|
$
|
4,774
|
|
||
Noninterest income
|
|
1,313
|
|
|
1,182
|
|
|
448
|
|
|
$
|
467
|
|
|
251
|
|
|
3,661
|
|
|||||
Total revenue
|
|
3,808
|
|
|
2,920
|
|
|
594
|
|
|
467
|
|
|
646
|
|
|
8,435
|
|
||||||
Provision for credit losses (benefit)
|
|
141
|
|
|
56
|
|
|
|
|
|
|
(25
|
)
|
|
172
|
|
||||||||
Depreciation and amortization
|
|
92
|
|
|
93
|
|
|
25
|
|
|
|
|
260
|
|
|
470
|
|
|||||||
Other noninterest expense
|
|
2,753
|
|
|
1,172
|
|
|
416
|
|
|
|
|
300
|
|
|
4,641
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
822
|
|
|
1,599
|
|
|
153
|
|
|
467
|
|
|
111
|
|
|
3,152
|
|
||||||
Income taxes (benefit)
|
|
196
|
|
|
340
|
|
|
36
|
|
|
75
|
|
|
(90
|
)
|
|
557
|
|
||||||
Net income
|
|
$
|
626
|
|
|
$
|
1,259
|
|
|
$
|
117
|
|
|
$
|
392
|
|
|
$
|
201
|
|
|
$
|
2,595
|
|
Average Assets (b)
|
|
$
|
88,879
|
|
|
$
|
152,769
|
|
|
$
|
7,484
|
|
|
$
|
7,811
|
|
|
$
|
119,006
|
|
|
$
|
375,949
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
2,259
|
|
|
$
|
1,655
|
|
|
$
|
144
|
|
|
|
|
$
|
360
|
|
|
$
|
4,418
|
|
||
Noninterest income
|
|
1,248
|
|
|
1,112
|
|
|
435
|
|
|
$
|
372
|
|
|
359
|
|
|
3,526
|
|
|||||
Total revenue
|
|
3,507
|
|
|
2,767
|
|
|
579
|
|
|
372
|
|
|
719
|
|
|
7,944
|
|
||||||
Provision for credit losses (benefit)
|
|
121
|
|
|
112
|
|
|
(9
|
)
|
|
|
|
(38
|
)
|
|
186
|
|
|||||||
Depreciation and amortization
|
|
89
|
|
|
90
|
|
|
25
|
|
|
|
|
253
|
|
|
457
|
|
|||||||
Other noninterest expense
|
|
2,596
|
|
|
1,096
|
|
|
407
|
|
|
|
|
325
|
|
|
4,424
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
701
|
|
|
1,469
|
|
|
156
|
|
|
372
|
|
|
179
|
|
|
2,877
|
|
||||||
Income taxes (benefit)
|
|
258
|
|
|
467
|
|
|
57
|
|
|
83
|
|
|
(159
|
)
|
|
706
|
|
||||||
Net income
|
|
$
|
443
|
|
|
$
|
1,002
|
|
|
$
|
99
|
|
|
$
|
289
|
|
|
$
|
338
|
|
|
$
|
2,171
|
|
Average Assets (b)
|
|
$
|
88,559
|
|
|
$
|
145,445
|
|
|
$
|
7,517
|
|
|
$
|
7,132
|
|
|
$
|
119,717
|
|
|
$
|
368,370
|
|
(a)
|
There were no material intersegment revenues for the
three and six
months ended
June 30, 2018
and
2017
.
|
(b)
|
Period-end balances for BlackRock.
|
In millions
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
|
||||
Product
|
|
|
|
||||
Deposit account fees
|
$
|
145
|
|
$
|
289
|
|
|
Debit card fees
|
127
|
|
244
|
|
|
||
Brokerage fees
|
88
|
|
174
|
|
|
||
Merchant services
|
55
|
|
102
|
|
|
||
Net credit card fees (a)
|
49
|
|
94
|
|
|
||
Other
|
73
|
|
143
|
|
|
||
Total in-scope noninterest income by product
|
$
|
537
|
|
$
|
1,046
|
|
|
Reconciliation to total Retail Banking noninterest income
|
|
|
|
||||
Total in-scope noninterest income
|
$
|
537
|
|
$
|
1,046
|
|
|
Total out-of-scope noninterest income (b)
|
141
|
|
267
|
|
|
||
Total Retail Banking noninterest income
|
$
|
678
|
|
$
|
1,313
|
|
|
(a)
|
Net credit card fees consists of interchange fees of
$115 million
and
$217 million
and credit card reward costs of
$66 million
and
$123 million
for the three and six months ended
June 30, 2018
, respectively.
|
(b)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
In millions
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
|
||||
Product
|
|
|
|
||||
Treasury management fees
|
$
|
197
|
|
$
|
382
|
|
|
Capital markets fees
|
135
|
|
250
|
|
|
||
Commercial mortgage banking activities
|
21
|
|
42
|
|
|
||
Other
|
19
|
|
35
|
|
|
||
Total in-scope noninterest income by product
|
$
|
372
|
|
$
|
709
|
|
|
Reconciliation to total Corporate & Institutional Banking noninterest income
|
|
|
|
||||
Total in-scope noninterest income
|
$
|
372
|
|
$
|
709
|
|
|
Total out-of-scope noninterest income (a)
|
263
|
|
473
|
|
|
||
Total Corporate & Institutional Banking noninterest income
|
$
|
635
|
|
$
|
1,182
|
|
|
(a)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
In millions
|
Three Months Ended
June 30, 2018 |
Six Months Ended
June 30, 2018 |
|
||||
Customer Type
|
|
|
|
||||
Personal
|
$
|
152
|
|
$
|
306
|
|
|
Institutional
|
68
|
|
136
|
|
|
||
Total in-scope noninterest income by customer type
|
$
|
220
|
|
$
|
442
|
|
|
Reconciliation to Asset Management Group noninterest income
|
|
|
|
||||
Total in-scope noninterest income
|
$
|
220
|
|
$
|
442
|
|
|
Total out-of-scope noninterest income (a)
|
2
|
|
6
|
|
|
||
Total Asset Management Group noninterest income
|
$
|
222
|
|
$
|
448
|
|
|
(a)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
|
Six months ended June 30
|
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
||||||||||||||||||
Taxable-equivalent basis
Dollars in millions
|
Average
Balances
|
|
|
Interest
Income/
Expense
|
|
|
Average
Yields/
Rates
|
|
|
Average
Balances
|
|
|
Interest
Income/
Expense
|
|
|
Average
Yields/
Rates
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
25,986
|
|
|
$
|
343
|
|
|
2.64
|
%
|
|
$
|
26,122
|
|
|
$
|
332
|
|
|
2.54
|
%
|
|
Non-agency
|
2,334
|
|
|
73
|
|
|
6.25
|
%
|
|
3,037
|
|
|
85
|
|
|
5.59
|
%
|
|
||||
Commercial mortgage-backed
|
4,491
|
|
|
62
|
|
|
2.76
|
%
|
|
5,705
|
|
|
70
|
|
|
2.45
|
%
|
|
||||
Asset-backed
|
5,160
|
|
|
77
|
|
|
2.99
|
%
|
|
5,927
|
|
|
74
|
|
|
2.49
|
%
|
|
||||
U.S. Treasury and government agencies
|
15,017
|
|
|
164
|
|
|
2.17
|
%
|
|
12,990
|
|
|
112
|
|
|
1.72
|
%
|
|
||||
Other
|
4,172
|
|
|
75
|
|
|
3.61
|
%
|
|
5,193
|
|
|
78
|
|
|
3.00
|
%
|
|
||||
Total securities available for sale
|
57,160
|
|
|
794
|
|
|
2.77
|
%
|
|
58,974
|
|
|
751
|
|
|
2.54
|
%
|
|
||||
Securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
15,216
|
|
|
218
|
|
|
2.86
|
%
|
|
12,323
|
|
|
173
|
|
|
2.80
|
%
|
|
||||
Commercial mortgage-backed
|
854
|
|
|
16
|
|
|
3.74
|
%
|
|
1,425
|
|
|
27
|
|
|
3.89
|
%
|
|
||||
Asset-backed
|
196
|
|
|
3
|
|
|
3.19
|
%
|
|
523
|
|
|
6
|
|
|
2.28
|
%
|
|
||||
U.S. Treasury and government agencies
|
745
|
|
|
10
|
|
|
2.82
|
%
|
|
531
|
|
|
8
|
|
|
3.09
|
%
|
|
||||
Other
|
1,904
|
|
|
42
|
|
|
4.42
|
%
|
|
2,024
|
|
|
54
|
|
|
5.31
|
%
|
|
||||
Total securities held to maturity
|
18,915
|
|
|
289
|
|
|
3.06
|
%
|
|
16,826
|
|
|
268
|
|
|
3.19
|
%
|
|
||||
Total investment securities
|
76,075
|
|
|
1,083
|
|
|
2.85
|
%
|
|
75,800
|
|
|
1,019
|
|
|
2.69
|
%
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
112,411
|
|
|
2,180
|
|
|
3.86
|
%
|
|
105,024
|
|
|
1,767
|
|
|
3.35
|
%
|
|
||||
Commercial real estate
|
28,894
|
|
|
571
|
|
|
3.93
|
%
|
|
29,418
|
|
|
500
|
|
|
3.38
|
%
|
|
||||
Equipment lease financing
|
7,670
|
|
|
131
|
|
|
3.43
|
%
|
|
7,550
|
|
|
132
|
|
|
3.49
|
%
|
|
||||
Consumer
|
55,487
|
|
|
1,353
|
|
|
4.92
|
%
|
|
56,591
|
|
|
1,261
|
|
|
4.49
|
%
|
|
||||
Residential real estate
|
17,437
|
|
|
382
|
|
|
4.38
|
%
|
|
15,741
|
|
|
358
|
|
|
4.55
|
%
|
|
||||
Total loans
|
221,899
|
|
|
4,617
|
|
|
4.16
|
%
|
|
214,324
|
|
|
4,018
|
|
|
3.75
|
%
|
|
||||
Interest-earning deposits with banks
|
23,329
|
|
|
191
|
|
|
1.64
|
%
|
|
23,363
|
|
|
107
|
|
|
.92
|
%
|
|
||||
Other interest-earning assets
|
7,402
|
|
|
167
|
|
|
4.52
|
%
|
|
9,076
|
|
|
156
|
|
|
3.46
|
%
|
|
||||
Total interest-earning assets/interest income
|
328,705
|
|
|
6,058
|
|
|
3.68
|
%
|
|
322,563
|
|
|
5,300
|
|
|
3.29
|
%
|
|
||||
Noninterest-earning assets
|
47,244
|
|
|
|
|
|
|
45,807
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
375,949
|
|
|
|
|
|
|
$
|
368,370
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
$
|
57,355
|
|
|
167
|
|
|
.59
|
%
|
|
$
|
63,034
|
|
|
83
|
|
|
.27
|
%
|
|
||
Demand
|
60,017
|
|
|
68
|
|
|
.23
|
%
|
|
57,157
|
|
|
31
|
|
|
.11
|
%
|
|
||||
Savings
|
49,791
|
|
|
162
|
|
|
.65
|
%
|
|
40,620
|
|
|
88
|
|
|
.44
|
%
|
|
||||
Time deposits
|
16,737
|
|
|
77
|
|
|
.93
|
%
|
|
17,136
|
|
|
61
|
|
|
.71
|
%
|
|
||||
Total interest-bearing deposits
|
183,900
|
|
|
474
|
|
|
.52
|
%
|
|
177,947
|
|
|
263
|
|
|
.30
|
%
|
|
||||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank borrowings
|
20,839
|
|
|
209
|
|
|
2.00
|
%
|
|
20,410
|
|
|
119
|
|
|
1.16
|
%
|
|
||||
Bank notes and senior debt
|
28,887
|
|
|
390
|
|
|
2.69
|
%
|
|
23,910
|
|
|
232
|
|
|
1.93
|
%
|
|
||||
Subordinated debt
|
5,016
|
|
|
105
|
|
|
4.20
|
%
|
|
6,854
|
|
|
123
|
|
|
3.57
|
%
|
|
||||
Other
|
4,558
|
|
|
48
|
|
|
2.01
|
%
|
|
5,067
|
|
|
39
|
|
|
1.54
|
%
|
|
||||
Total borrowed funds
|
59,300
|
|
|
752
|
|
|
2.52
|
%
|
|
56,241
|
|
|
513
|
|
|
1.82
|
%
|
|
||||
Total interest-bearing liabilities/interest expense
|
243,200
|
|
|
1,226
|
|
|
1.01
|
%
|
|
234,188
|
|
|
776
|
|
|
.66
|
%
|
|
||||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
76,925
|
|
|
|
|
|
|
77,710
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
9,031
|
|
|
|
|
|
|
10,258
|
|
|
|
|
|
|
||||||||
Equity
|
46,793
|
|
|
|
|
|
|
46,214
|
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
375,949
|
|
|
|
|
|
|
$
|
368,370
|
|
|
|
|
|
|
||||||
Interest rate spread
|
|
|
|
|
2.67
|
%
|
|
|
|
|
|
2.63
|
%
|
|
||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
.27
|
|
|
|
|
|
|
.18
|
|
|
||||||||
Net interest income/margin
|
|
|
$
|
4,832
|
|
|
2.94
|
%
|
|
|
|
$
|
4,524
|
|
|
2.81
|
%
|
|
|
Three months ended June 30
|
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
||||||||||||||||||
Taxable-equivalent basis
Dollars in millions
|
Average
Balances
|
|
|
Interest
Income/
Expense
|
|
|
Average
Yields/
Rates
|
|
|
Average
Balances |
|
|
Interest
Income/ Expense |
|
|
Average
Yields/ Rates |
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
$
|
26,527
|
|
|
$
|
178
|
|
|
2.68
|
%
|
|
$
|
25,862
|
|
|
$
|
163
|
|
|
2.51
|
%
|
|
Non-agency
|
2,271
|
|
|
37
|
|
|
6.52
|
%
|
|
2,947
|
|
|
41
|
|
|
5.58
|
%
|
|
||||
Commercial mortgage-backed
|
4,449
|
|
|
31
|
|
|
2.76
|
%
|
|
5,493
|
|
|
35
|
|
|
2.56
|
%
|
|
||||
Asset-backed
|
5,161
|
|
|
40
|
|
|
3.11
|
%
|
|
5,863
|
|
|
37
|
|
|
2.48
|
%
|
|
||||
U.S. Treasury and government agencies
|
15,719
|
|
|
90
|
|
|
2.25
|
%
|
|
12,881
|
|
|
58
|
|
|
1.78
|
%
|
|
||||
Other
|
4,112
|
|
|
41
|
|
|
4.06
|
%
|
|
5,093
|
|
|
39
|
|
|
3.08
|
%
|
|
||||
Total securities available for sale
|
58,239
|
|
|
417
|
|
|
2.85
|
%
|
|
58,139
|
|
|
373
|
|
|
2.56
|
%
|
|
||||
Securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
15,608
|
|
|
113
|
|
|
2.89
|
%
|
|
12,790
|
|
|
90
|
|
|
2.82
|
%
|
|
||||
Commercial mortgage-backed
|
807
|
|
|
8
|
|
|
3.71
|
%
|
|
1,393
|
|
|
14
|
|
|
4.30
|
%
|
|
||||
Asset-backed
|
194
|
|
|
2
|
|
|
3.48
|
%
|
|
490
|
|
|
3
|
|
|
2.35
|
%
|
|
||||
U.S. Treasury and government agencies
|
747
|
|
|
5
|
|
|
2.83
|
%
|
|
533
|
|
|
4
|
|
|
3.10
|
%
|
|
||||
Other
|
1,884
|
|
|
19
|
|
|
4.39
|
%
|
|
2,007
|
|
|
27
|
|
|
5.28
|
%
|
|
||||
Total securities held to maturity
|
19,240
|
|
|
147
|
|
|
3.07
|
%
|
|
17,213
|
|
|
138
|
|
|
3.22
|
%
|
|
||||
Total investment securities
|
77,479
|
|
|
564
|
|
|
2.91
|
%
|
|
75,352
|
|
|
511
|
|
|
2.71
|
%
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
113,349
|
|
|
1,136
|
|
|
3.97
|
%
|
|
106,944
|
|
|
932
|
|
|
3.45
|
%
|
|
||||
Commercial real estate
|
28,888
|
|
|
295
|
|
|
4.04
|
%
|
|
29,655
|
|
|
261
|
|
|
3.48
|
%
|
|
||||
Equipment lease financing
|
7,494
|
|
|
58
|
|
|
3.16
|
%
|
|
7,602
|
|
|
69
|
|
|
3.65
|
%
|
|
||||
Consumer
|
55,387
|
|
|
686
|
|
|
4.96
|
%
|
|
56,342
|
|
|
635
|
|
|
4.52
|
%
|
|
||||
Residential real estate
|
17,566
|
|
|
192
|
|
|
4.36
|
%
|
|
15,830
|
|
|
180
|
|
|
4.55
|
%
|
|
||||
Total loans
|
222,684
|
|
|
2,367
|
|
|
4.23
|
%
|
|
216,373
|
|
|
2,077
|
|
|
3.82
|
%
|
|
||||
Interest-earning deposits with banks
|
21,017
|
|
|
93
|
|
|
1.78
|
%
|
|
22,543
|
|
|
58
|
|
|
1.04
|
%
|
|
||||
Other interest-earning assets
|
6,905
|
|
|
87
|
|
|
4.98
|
%
|
|
9,748
|
|
|
82
|
|
|
3.38
|
%
|
|
||||
Total interest-earning assets/interest income
|
328,085
|
|
|
3,111
|
|
|
3.78
|
%
|
|
324,016
|
|
|
2,728
|
|
|
3.35
|
%
|
|
||||
Noninterest-earning assets
|
47,542
|
|
|
|
|
|
|
46,286
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
375,627
|
|
|
|
|
|
|
$
|
370,302
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
$
|
56,199
|
|
|
89
|
|
|
.64
|
%
|
|
$
|
62,157
|
|
|
47
|
|
|
.30
|
%
|
|
||
Demand
|
60,409
|
|
|
37
|
|
|
.25
|
%
|
|
57,513
|
|
|
17
|
|
|
.12
|
%
|
|
||||
Savings
|
51,115
|
|
|
94
|
|
|
.74
|
%
|
|
42,128
|
|
|
47
|
|
|
.45
|
%
|
|
||||
Time deposits
|
16,634
|
|
|
41
|
|
|
.98
|
%
|
|
17,214
|
|
|
32
|
|
|
.73
|
%
|
|
||||
Total interest-bearing deposits
|
184,357
|
|
|
261
|
|
|
.57
|
%
|
|
179,012
|
|
|
143
|
|
|
.32
|
%
|
|
||||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank borrowings
|
20,956
|
|
|
118
|
|
|
2.23
|
%
|
|
20,405
|
|
|
63
|
|
|
1.23
|
%
|
|
||||
Bank notes and senior debt
|
28,787
|
|
|
214
|
|
|
2.95
|
%
|
|
24,817
|
|
|
125
|
|
|
2.00
|
%
|
|
||||
Subordinated debt
|
4,855
|
|
|
54
|
|
|
4.50
|
%
|
|
6,607
|
|
|
61
|
|
|
3.66
|
%
|
|
||||
Other
|
4,368
|
|
|
22
|
|
|
1.82
|
%
|
|
5,695
|
|
|
24
|
|
|
1.67
|
%
|
|
||||
Total borrowed funds
|
58,966
|
|
|
408
|
|
|
2.74
|
%
|
|
57,524
|
|
|
273
|
|
|
1.89
|
%
|
|
||||
Total interest-bearing liabilities/interest expense
|
243,323
|
|
|
669
|
|
|
1.10
|
%
|
|
236,536
|
|
|
416
|
|
|
.70
|
%
|
|
||||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
76,632
|
|
|
|
|
|
|
77,375
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
8,944
|
|
|
|
|
|
|
10,432
|
|
|
|
|
|
|
||||||||
Equity
|
46,728
|
|
|
|
|
|
|
45,959
|
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
375,627
|
|
|
|
|
|
|
$
|
370,302
|
|
|
|
|
|
|
||||||
Interest rate spread
|
|
|
|
|
2.68
|
%
|
|
|
|
|
|
2.65
|
%
|
|
||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
.28
|
|
|
|
|
|
|
.19
|
|
|
||||||||
Net interest income/margin
|
|
|
$
|
2,442
|
|
|
2.96
|
%
|
|
|
|
$
|
2,312
|
|
|
2.84
|
%
|
|
(a)
|
Nonaccrual loans are included in loans, net of unearned income. The impact of financial derivatives used in interest rate risk management is included in the interest income/expense and average yields/rates of the related assets and liabilities. Basis adjustments related to hedged items are included in noninterest-earning assets and noninterest-bearing liabilities. Average balances of securities are based on amortized historical cost (excluding adjustments to fair value, which are included in other assets). Average balances for certain loans and borrowed funds accounted for at fair value are included in noninterest-earning assets and noninterest-bearing liabilities, with changes in fair value recorded in Noninterest income.
|
(b)
|
Loan fees for the three months ended
June 30, 2018
and
June 30, 2017
were $
33
million and $
30
million, respectively. Loan fees for the
six months
ended
June 30, 2018
and
June 30, 2017
were
$65
million and
$54
million, respectfully.
|
(c)
|
Interest income calculated as taxable-equivalent interest income. To provide more meaningful comparisons of interest income and yields for all interest-earning assets, as well as net interest margins, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP. See Reconciliation of Taxable-Equivalent Net Interest Income in this Statistical Information section for more information.
|
|
|
Six months ended
|
|
Three months ended
|
|
||||||||||||
In millions
|
|
June 30, 2018
|
|
|
June 30, 2017
|
|
|
June 30, 2018
|
|
|
June 30, 2017
|
|
|
||||
Net interest income (GAAP)
|
|
$
|
4,774
|
|
|
$
|
4,418
|
|
|
$
|
2,413
|
|
|
$
|
2,258
|
|
|
Taxable-equivalent adjustments
|
|
58
|
|
|
106
|
|
|
29
|
|
|
54
|
|
|
||||
Net interest income (Non-GAAP)
|
|
$
|
4,832
|
|
|
$
|
4,524
|
|
|
$
|
2,442
|
|
|
$
|
2,312
|
|
|
(a)
|
The interest income earned on certain earning 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 net interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP. As a result of the Tax Cuts and Jobs Act, which was enacted into law during the fourth quarter of 2017, the statutory tax rate for corporations was lowered to 21% from 35%, effective January 1, 2018. Amounts for the 2017 periods were calculated using the previously applicable statutory federal income tax rate of 35%.
|
|
2017 Transitional Basel III (a)
|
|
|
Fully Phased-In Basel III
(Non-GAAP) (b)
|
|
|||
Dollars in millions
|
June 30
2017
|
|
|
June 30
2017 |
|
|
||
Common stock, related surplus and retained earnings, net of treasury stock
|
$
|
42,200
|
|
|
$
|
42,200
|
|
|
Less regulatory capital adjustments:
|
|
|
|
|
||||
Goodwill and disallowed intangibles, net of deferred tax liabilities
|
(9,156
|
)
|
|
(9,225
|
)
|
|
||
Basel III total threshold deductions
|
(1,144
|
)
|
|
(1,702
|
)
|
|
||
Accumulated other comprehensive income (loss) (c)
|
(167
|
)
|
|
(209
|
)
|
|
||
All other adjustments
|
(179
|
)
|
|
(181
|
)
|
|
||
Basel III Common equity Tier 1 capital
|
$
|
31,554
|
|
|
$
|
30,883
|
|
|
Basel III standardized approach risk-weighted assets (d)
|
$
|
306,379
|
|
|
$
|
314,389
|
|
|
Basel III advanced approaches risk-weighted assets (e)
|
N/A
|
|
|
$
|
282,472
|
|
|
|
Basel III Common equity Tier 1 capital ratio
|
10.3
|
%
|
|
9.8
|
%
|
|
||
Risk weight and associated rules utilized
|
Standardized (with 2017 transition adjustments)
|
|
Standardized
|
|
|
(a)
|
Calculated using the regulatory capital methodology applicable to PNC during 2017 and calculated based on the standardized approach.
|
(b)
|
2017 Fully Phased-In Basel III results are presented as Pro forma estimates.
|
(c)
|
Represents net adjustments related to accumulated other comprehensive income (loss) for securities currently and those transferred from available for sale, as well as pension and other postretirement plans.
|
(d)
|
Basel III standardized approach risk-weighted assets are based on the Basel III standardized approach rules and include credit and market risk-weighted assets.
|
(e)
|
Basel III advanced approaches risk-weighted assets are based on the Basel III advanced approaches rules, and include credit, market, and operational risk-weighted assets. During the parallel run qualification phase, PNC has refined the data, models, and internal processes used as part of the advanced approaches for determining risk-weighted assets. We anticipate additional refinements to this calculation through the parallel run qualification phase.
|
2018 period
In thousands, except per share data |
Total shares purchased (a)
|
|
Average price paid per share
|
|
Total shares purchased as part of publicly announced programs (b)
|
|
Maximum number of shares that may yet be purchased under the programs (b)
|
|
|
April 1 - 30
|
1,622
|
|
$
|
147.36
|
|
1,618
|
|
34,199
|
|
May 1 - 31
|
1,690
|
|
$
|
147.74
|
|
1,690
|
|
32,509
|
|
June 1 - 30
|
2,357
|
|
$
|
141.89
|
|
2,357
|
|
30,152
|
|
Total
|
5,669
|
|
$
|
145.20
|
|
|
|
(a)
|
Includes PNC common stock purchased in connection with our various employee benefit plans generally related to shares used to cover employee payroll tax withholding requirements. Note 11 Employee Benefit Plans and Note 12 Stock Based Compensation Plans in the Notes To Consolidated Financial Statements of our 2017 Annual Report on Form 10-K include additional information regarding our employee benefit and equity compensation plans that use PNC common stock.
|
(b)
|
On March 11, 2015, we announced that our Board of Directors approved the establishment of a stock repurchase program authorization in the amount of 100 million shares of PNC common stock, effective April 1, 2015. Repurchases are made in open market or privately negotiated transactions and the timing and exact amount of common stock repurchases will depend on a number of factors including, among others, market and general economic conditions, regulatory capital considerations, alternative uses of capital, the potential impact on our credit ratings, and contractual and regulatory limitations, including the results of the supervisory assessment of capital adequacy and capital planning processes undertaken by the Federal Reserve as part of the CCAR process. In June
2017
, we announced share repurchase programs of up to $2.7 billion for the four quarter period beginning with the third quarter of
2017
, including repurchases of up to $300 million related to employee benefit plans, in accordance with PNC's 2017 capital plan. In the second quarter of
2018
, we repurchased
5.7 million
shares of common stock on the open market, with an average price of
$145.20
per share and an aggregate repurchase price of
$.8 billion
.
|
|
High
|
|
|
Low
|
|
|
Close
|
|
|
Cash Dividends Declared (a)
|
|
|
||||
2018 Quarter
|
|
|
|
|
|
|
|
|
||||||||
First
|
$
|
163.59
|
|
|
$
|
143.94
|
|
|
$
|
151.24
|
|
|
$
|
.75
|
|
|
Second
|
$
|
154.58
|
|
|
$
|
134.59
|
|
|
$
|
135.10
|
|
|
.75
|
|
|
|
Total
|
|
|
|
|
|
|
$
|
1.50
|
|
|
||||||
2017 Quarter
|
|
|
|
|
|
|
|
|
||||||||
First
|
$
|
131.83
|
|
|
$
|
113.66
|
|
|
$
|
120.24
|
|
|
$
|
.55
|
|
|
Second
|
$
|
128.25
|
|
|
$
|
115.45
|
|
|
$
|
124.87
|
|
|
.55
|
|
|
|
Third
|
$
|
135.73
|
|
|
$
|
119.77
|
|
|
$
|
134.77
|
|
|
.75
|
|
|
|
Fourth
|
$
|
147.28
|
|
|
$
|
130.46
|
|
|
$
|
144.29
|
|
|
.75
|
|
|
|
Total
|
|
|
|
|
|
|
$
|
2.60
|
|
|
(a)
|
Our Board approved a third quarter
2018
cash dividend of $.95 per common share, with a payment date of August 5, 2018.
|
/s/ Robert Q. Reilly
|
Robert Q. Reilly
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
A.
|
GRANT AND ACCEPTANCE OF PSUs
|
|
|
GRANTEE:
|
[Name]
|
|
GRANT DATE:
|
February 15, 2018
|
|
AWARD:
|
Performance share units (“
PSUs
”), each representing a right to receive one Share, and related Dividend Equivalents, payable in cash.
|
|
TARGET:
|
[# Shares] PSUs and related Dividend Equivalents
|
|
PERFORMANCE PERIOD:
|
January 1, 2018 - December 31, 2020
(other than limited exceptions in the event of death or a Change of Control, as described in
Appendix C
).
|
C.1
|
FORFEITURE UPON FAILURE TO MEET SERVICE-BASED VESTING REQUIREMENTS
|
Except as otherwise provided in Section B.2 above, if you cease to be an employee of PNC prior to an applicable Final Award Date, you will not have satisfied the service-based vesting requirements and the Award will be automatically forfeited and cancelled as of your Termination Date.
Upon such forfeiture or cancellation, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
|
C.2
|
FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
|
At any time prior to the Final Award Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
|
C.3
|
FORFEITURE UPON FAILURE TO SATISFY PERFORMANCE CONDITIONS
|
If the final Corporate Performance Factor (as defined in
Appendix C
) is determined by the Committee to be 0.00%, the Award will be forfeited and cancelled without payment of any consideration by PNC as of the date of such determination.
|
D.
|
DIVIDEND EQUIVALENTS
|
|
D.1
|
GENERALLY
|
As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the vested Payout Share Units (defined in
Appendix C
), in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Final Award Date, as though you were the record holder of such Payout Share Units, and such Payout Share Units had been issued and outstanding shares on the Grant Date through the Final Award Date.
|
D.2
|
ACCRUED DIVIDEND EQUIVALENT PAYMENTS
|
(a)
Generally
. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the Award vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Award. If the PSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled.
(b)
Payment Upon a Change of Control
. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the Award vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested Payout Share Units underlying the Award from the Grant Date through the date of the Change of Control.
|
E.
|
PAYMENT OF THE AWARD
|
|
E.1
|
PAYMENT TIMING
|
Except as otherwise provided below, vested Payout Share Units that remain outstanding will be settled as soon as practicable following the applicable Final Award Date (and no later than (x) December 31
st
following the year of death, in the event of your death, or (y) March 15
th
following the year the Award vests).
|
E.2
|
FORM OF PAYMENT; AMOUNT
|
(a)
Payment Generally
. Except as provided in subsection (b) below, your Final Award will be settled at the time set forth in Section E.1 by delivery to you of that number of whole Shares equal to the number of Payout Share Units under your Final Award, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
.
(b)
Payment On or After a Change of Control
.
Upon vesting on or after a Change of Control, vested Payout Share Units will be settled at the time set forth in Section E.1 by payment to you of cash in an amount equal to that number of whole Shares equal to the number of vested Payout Share Units, multiplied by the then current Fair Market Value of a share of Common Stock on the date of the Change of Control (subject to any applicable adjustment pursuant to Section 2 of
Appendix A
), less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
. Related accrued Dividend Equivalent payments will be paid to you in cash as described in Section D.2(b).
No interest will be paid with respect to any such payments made pursuant to this Section E.
|
F.
|
RESTRICTIVE COVENANTS
|
Upon your acceptance of this Award, you shall become subject to the restrictive covenant provisions set forth in Section 1 of
Appendix A
.
|
G.
|
CLAWBACK
|
The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
|
|
|
|
1.
|
General Overview and Definitions
|
Performance-based vesting and payout of your Award is determined based on the level of satisfaction of three performance metrics during the Performance Period – two corporate performance metrics and one risk-related performance metric. These metrics are described in more detail in the paragraphs below.
“
PNC
” for purposes of this
Appendix C
as it refers to performance-based vesting conditions means the Corporation and its consolidated subsidiaries for financial reporting purposes.
Each performance metric will be measured or reviewed on an annual basis for each calendar year (i.e., calendar year 2018, calendar year 2019 and calendar year 2020) during the Performance Period (each, a “
Performance Year
”). A Performance Year may refer to a partial calendar year in certain limited circumstances (e.g., in connection with death or a Change of Control) as further described in this
Appendix C
.
The three performance metrics are:
1.
Relative Average EPS Growth
- Annual growth in earnings per share, measured for each Performance Year and then averaged for the Performance Period and compared to similar performance of other members of PNC’s Peer Group based on PNC’s percentile rank using a continuous percentile rank calculation (“
Relative Average EPS Growth
”), where for purposes of this definition:
|
|
|
a.
“
EPS
” means the publicly-reported diluted earnings per share of PNC or other Peer Group members for the Performance Year, in each case as adjusted, on an after-tax basis, for the impact of the items set forth in paragraph 3 below (rounded to the nearest cent), and
b.
“
EPS Growth
,” with respect to a given Performance Year, means the growth or decline in EPS achieved by PNC or other Peer Group members for that Performance Year as compared to EPS for the comparable period of the prior calendar year, expressed as a percentage (rounded to the nearest one-hundredth).
c.
“
Peer Grou
p” refers to the Committee-determined peer group as of the Grant Date. Performance will be measured based on the Peer Group on the last day of the Performance Period, taking into account name changes and the elimination from the Peer Group of any members since the beginning of the Performance Period (e.g., due to consolidation or merger).
The Peer Group for this Award consists of the following members: PNC, Bank of America Corporation, BB&T Corporation, Capital One Financial Corporation, Citizens Financial Group, Inc., Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, M&T Bank Corporation, Regions Financial Corporation, SunTrust Banks, Inc., U.S. Bancorp, and Wells Fargo & Company
2.
Average ROE -
Annual return on equity (“
ROE
”), with specified adjustments as described in paragraph 3, measured for each Performance Year and then averaged for the Performance Period (“
Average ROE
”) and compared to specified performance targets established by the Committee.
3.
CET1 Ratio -
Whether PNC has met or exceeded the common equity Tier 1 capital spot ratio limit as then in effect and applicable to The PNC Financial Services
|
|
|
Group, Inc. (“
CET1 Ratio
”) (which may be on a pro forma fully phased-in basis, if applicable) as set forth in PNC’s Enterprise Capital Management Policy (or any successor policy) and monitored at least quarterly.
All performance metrics, including any adjustments, will be determined on the basis of:
(x) with respect to PNC’s absolute performance, PNC’s internal financial information;
(y) with respect to PNC’s relative performance to other members of the Peer Group, either publicly-disclosed financial information or, in the case of PNC, internal financial information that is anticipated to be publicly disclosed in an upcoming filing with the SEC; and
(z) with respect to other members of the Peer Group, publicly-disclosed financial information,
in each case, only where such amounts can be reasonably determined as of the date immediately prior to the date the Committee makes its determination as to the size of the payout.
|
|
|
|
2.
|
Calculating Corporate Performance Metrics
|
(a) Calculating Average ROE
. For each Performance Year, annual ROE (expressed as a percentage, rounded to the nearest one-hundredth) is calculated and adjusted for the items set forth in paragraph 3. At the end of the Performance Period, Average ROE is determined by calculating the average of PNC’s annual ROE for each Performance Year, then rounding to the nearest one-hundredth.
(b) Calculating Relative Average EPS Growth
. Annual EPS Growth for PNC and each other member of the Peer Group is calculated for each Performance Year, adjusted for the items set forth in paragraph 3, expressed as a percentage and rounded to the nearest one-hundredth.
At the end of the Performance Period, the annual EPS Growth percentages for each Performance Year are averaged. PNC’s average EPS Growth is compared to the average of each other member of the Peer Group to
|
|
|
determine PNC’s percentile rank, based on a continuous percentile rank calculation and expressed as a percentage (rounded to the nearest one-hundredth).
(c) Calculating the Corporate Performance Factor.
(i) Once the Average ROE and Relative Average EPS Growth are determined, a corporate performance factor, expressed as a percentage, is calculated using the table attached as
Exhibit 1
, applying bilinear interpolation and rounding to the nearest one-hundredth (such percentage, the “
Corporate Performance Factor
”). The Corporate Performance Factor will range from 0.00% to 150.00%. The Corporate Performance Factor may be adjusted by the Committee as described in paragraph 7.
(ii) In the event of your death or a Change of Control, the provisions of paragraph 8 will govern the calculation of the Corporate Performance Factor.
|
|
|
|
3.
|
Adjustments to Corporate Performance Metrics
|
For purposes of measuring (a) EPS Growth performance for PNC and other members of the Peer Group or (b) ROE for PNC, earnings or EPS performance results, as applicable, will be adjusted, on an after-tax basis, for the impact of any of the following where such impact occurs during a given Performance Year (or, if applicable, during the prior year comparison period for a given year):
•
discontinued operations (as such term is used under GAAP);
•
acquisition costs and merger integration costs;
•
in PNC’s case, the net impact on PNC of significant gains or losses related to BlackRock transactions; and
•
items resulting from a change in U.S. federal tax law, which includes one-time adjustments to U.S. federal tax law (i.e., benefits or losses associated with the revaluation of assets or liabilities due to a change in tax law), but does not include (i) any going-forward changes to run rate income as a result of a change in U.S. federal tax law, to the extent such going-forward changes are reasonably determinable, or (ii) benefits or losses realized from the resolution of certain outstanding tax matters (e.g., court decision that reverses an earlier tax
|
7.
|
Calculation of Payout Share Units and Determination of Final Award
|
Following the end of the Performance Period, the Committee reviews performance against the performance metrics and makes its determination as to the Final Award, as follows:
(1)
Application of Risk Performance Metric
- The Committee first determines whether or not to reduce the target number of PSUs under the Award, based on the application of the risk performance metric, as follows:
(a)
If PNC has met or exceeded the CET1 Ratio for each Performance Year, there is no reduction in the number of target PSUs under the Award.
(b)
If PNC has not met the CET1 Ratio for any Performance Year, then for each Performance Year the CET1 Ratio was not met, the Committee can elect to reduce the target number of PSUs by one-third.
(2)
Committee Review of Performance Factor -
Next, the Committee determines whether to approve the calculated Corporate Performance Factor, a lower percentage or a higher percentage based on application of any risk-related adjustment (described in paragraph 5) or other Committee discretion consistent with paragraph 6.
(3) Final Award Determination -
Once the Committee approves the final Corporate Performance Factor, it applies this percentage to (x) the target number of PSUs (as reduced for any failure to meet the CET1 Ratio during the Performance Period), and rounds down to the nearest whole share unit. The resulting amount is the number of Payout Share Units that are eligible to vest and be settled on the Final Award Date (i.e., the Final Award).
In no event can the size of the Final Award be greater than 150.00% of the target number of PSUs.
|
|
|
(4) Special Rules Regarding the Final Award Date
– The Final Award will become vested and payable as of the Final Award Date, which term is defined in
Appendix B
. The Final Award Date is typically the date on which the Committee makes its determination as to the size of the payout to be paid out to you, but:
•
In the event of a Change of Control, the amount of Payout Share Units will be calculated (as of the date of the Change of Control) as described in paragraph 8 below and determination of the Final Award will be made as soon as practicable after the Change of Control.
•
In the event of your death (prior to a Change of Control), the amount of Payout Share Units will be calculated as described in paragraph 8 below as soon as practicable following the calendar year of your death. In the event of your death following a Change of Control, the Payout Share Units and the Final Award Date will be determined as described above.
|
|
|
|
8.
|
Determination of Payout Share Units Upon Death or a Change of Control
|
|
|
Death
|
Notwithstanding anything to the contrary in this Agreement, if your employment with PNC ceases by reason of your death (or if you die following a termination of employment with PNC due to Disability or Retirement or following an Anticipatory Termination), but prior to the Committee-determined Final Award Date, then the total number of Payout Share Units is calculated based on (a) target corporate performance for all Performance Years and (b) actual risk performance for the completed Performance Years and the Performance Year in which the date of death occurs, and no risk adjustments for any remaining years in the Performance Period. The amount of Payout Share Units is rounded down to the nearest whole share unit. This amount is not pro-rated, but remains subject to the Committee’s exercise of discretion.
If a Change of Control occurs after your death and in the same calendar year of your death (but prior to the time the Committee makes a Final Award determination), the Final Award will be calculated as described below under “Change of Control” as though you remained continuously employed with PNC as of the Change of Control.
|
|
Change of Control
|
Upon a Change of Control, the total number of Payout Share Units is calculated based on (a) target corporate performance for all Performance Years and (b) actual risk performance for the completed Performance Years, rounded down to the nearest whole share unit. For any remaining Performance Years (including the year of the Change of Control), if the CET1 Ratio was not met or exceeded as of the quarter-end immediately preceding the Change of Control, then for each Performance Year, one-third of the target number of PSUs will be forfeited and expire as of the Change of Control.
The Committee does not have discretion to adjust this amount of Payout Share Units.
|
|
|
|
9.
|
Definition of Change of Control Coverage Period
|
“
Change of Control Coverage Period
” means a period commencing on the occurrence of a Change of Control Triggering Event (defined below) and ending upon the earlier to occur of (a) the date of a Change of Control Failure (defined below) and (b) the date of a Change of Control. After the termination of any Change of Control Coverage Period, another Change of Control Coverage Period will commence upon the occurrence of another Change of Control Triggering Event.
For purposes of this definition:
•
a “
Change of Control Triggering Event
” means the occurrence of either of the following: (i) the Board or the Corporation’s shareholders approve a Business Combination, other than an Excluded Combination (as defined in the definition of Change of Control in
Appendix B
), or (ii) the commencement of a proxy contest in which any Person seeks to replace or remove a majority of the members of the Board
•
a “
Change of Control Failure
” means: (x) with respect to a Change of Control Triggering Event, the Corporation’s shareholders vote against the transaction approved by the Board or the agreement to consummate the transaction is terminated; or (y) with respect to a Change of Control Triggering Event described in clause (ii) of the definition above, the proxy contest fails to replace or remove a majority of the members of the Board.
|
|
|
|
10.
|
Committee Determination
|
The Committee may make prospective adjustments to the Award. All determinations made by the Committee or otherwise by PNC hereunder shall be made in its sole discretion and shall be final, binding and conclusive for all purposes on all parties.
|
|
|
Relative EPS Growth
|
||
|
|
PNC Percentile Rank at the 25th percentile or below
|
PNC Percentile Rank at the 50th percentile
|
PNC Percentile Rank at the 75th percentile or above
|
Absolute ROE
|
13.00%
|
100.0%
|
125.0%
|
150.0%
|
11.50%
|
87.5%
|
112.5%
|
137.5%
|
|
10.50%
|
75.0%
|
100.0%
|
125.0%
|
|
9.50%
|
62.5%
|
87.5%
|
100.0%
|
|
8.00%
|
50.0%
|
75.0%
|
87.5%
|
|
Below
|
0.0%
|
25.0%
|
50.0%
|
B.1
|
An Award becomes vested only upon satisfaction of both the service-based vesting requirements and the risk performance-based vesting requirements set forth below.
|
|
|
SERVICE-BASED VESTING REQUIREMENTS
|
The Award is divided into three approximately equal portions that will satisfy the service-based vesting requirements ratably over three years (each portion, a “
Tranche
”) on three “
Scheduled Vesting Dates
”, as follows:
•
the service-based vesting requirement for the first Tranche will be satisfied on the 1
st
anniversary of the Grant Date,
•
the service-based vesting requirement for the second Tranche will be satisfied on the 2
nd
anniversary of the Grant Date, and
•
the service-based vesting requirement for the third Tranche will be satisfied on the 3
rd
anniversary of the Grant Date;
in each case, provided you remain continuously employed by PNC through and including the applicable Scheduled Vesting Date (or such earlier date as prescribed by Section B.2 below).
|
|
RISK PERFORMANCE-BASED VESTING REQUIREMENTS
|
Provided the service-based vesting requirements have been met, each Tranche will vest on the applicable Scheduled Vesting Date upon satisfaction of the risk performance metric applicable to that Tranche, as set forth in
Appendix C
to this Agreement.
|
B.2
|
EFFECT OF TERMINATION OF EMPLOYMENT PRIOR TO SCHEDULED VESTING DATE(S) ON VESTING REQUIREMENTS
|
|
|
RETIREMENT
|
Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated due to your Retirement, and not for Cause, then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
|
C.1
|
FORFEITURE UPON FAILURE TO MEET VESTING REQUIREMENTS
|
Except as otherwise provided in Section B.2 above, if you cease to be an employee of PNC prior to an applicable Scheduled Vesting Date and the satisfaction of the risk performance-based vesting requirements, you will not have satisfied the vesting requirements and the outstanding portion of the Award will be automatically forfeited and cancelled as of your Termination Date.
|
C.2
|
FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
|
At any time prior to a Scheduled Vesting Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
Upon such determination, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
|
D.
|
DIVIDEND EQUIVALENTS
|
|
D.1
|
GENERALLY
|
As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the final number of vested RSUs for each Tranche, in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control), as though you were the record holder of such RSUs, and such RSUs had been issued and outstanding shares on the Grant Date through the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control).
|
D.2
|
ACCRUED DIVIDEND EQUIVALENT PAYMENTS
|
(a)
Generally
. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the applicable Tranche vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Tranche to which they relate. If the RSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled without payment of any consideration by PNC.
(b)
Payment Upon a Change of Control
. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the applicable Tranche vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested RSUs underlying such Tranche from the Grant Date through the date of the Change of Control.
|
E.
|
PAYMENT OF THE AWARD
|
|
E.1
|
PAYMENT TIMING
|
Except as otherwise provided below, vested RSUs that remain outstanding will be settled as soon as practicable following (i) the applicable Scheduled Vesting Date (but no later than March 15
th
following the year the applicable Scheduled Vesting Date occurs), or (ii) your date of death, if your date of death is prior to the last Scheduled Vesting Date (but no later than December 31
st
of the year following the year of your death).
|
E.2
|
FORM OF PAYMENT; AMOUNT
|
(a)
Payment Generally
.
Except as provided in subsection (b) below, vested RSUs will be settled at the time set forth in this Section E.1 by delivery to you of that number of whole Shares equal to the number of RSUs less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
.
(b)
Payment On or After a Change of Control
.
Upon vesting on or after a Change of Control, vested RSUs will be settled at the time set forth in Section E.1 by payment to you of cash in an amount equal to that number of whole Shares equal to the number of vested RSUs, multiplied by the then current Fair Market Value of a share of Common Stock on the date of the Change of Control (subject to any applicable adjustment pursuant to Section 2 of
Appendix A)
, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
. Related accrued Dividend Equivalent payments will be paid to you in cash as described in Section D.2(b).
No interest will be paid with respect to any such payments made pursuant to this Section E.
|
F.
|
RESTRICTIVE COVENANTS
|
Upon your acceptance of this Award, you shall become subject to the restrictive covenant provisions set forth in Section 1 of
Appendix A
.
|
G.
|
CLAWBACK
|
The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
|
|
|
|
1.
|
Generally
|
The Award is divided into three Tranches, with the first Tranche relating to the 2018 performance year, the second Tranche relating to the 2019 performance year, and the third tranche relating to the 2020 performance year (each such year, a “
Performance Year
”).
Each Tranche must satisfy a risk-related performance metric based on whether PNC has met or exceeded the common equity Tier 1 capital spot ratio limit as then in effect and applicable to The PNC Financial Services Group, Inc. (“
CET1 Ratio
”) (which may be on a pro forma fully phased-in basis, if applicable) as set forth in PNC’s Enterprise Capital Management Policy (or any successor policy) and monitored at least quarterly.
“
PNC
” for purposes of this
Appendix C
as it refers to risk performance-based vesting conditions means the Corporation and its consolidated subsidiaries for financial reporting purposes.
|
|
|
|
2.
|
Applying the Risk Performance Metric
|
(a) CET1 Ratio Generally
. Each Tranche is subject to a risk performance factor based on whether PNC has met or exceeded the CET1 Ratio as of the last day of each Performance Year. The current CET1 Ratio is 7.0%.
(b) Determination of Annual CET1 Ratio
. As soon as practicable following the end of each Performance Year, PNC will present information to the Committee relating to (i) the CET1 Ratio compared to (ii) the actual CET1 Ratio achieved by PNC with respect to that Performance Year, based on PNC’s publicly reported financial results for the period ending on the applicable end date. Except as otherwise provided in paragraph 5 in the event of your death or a Change of Control, this will generally be the public release of earnings results for PNC’s fourth quarter that occurs after the year-end measurement date, so that the Committee will be able to make its determination in late January or early February following a Performance Year.
•
If PNC meets or exceeds the CET1 Ratio for a Performance Year, the risk performance metric is satisfied.
•
If PNC does not meet the CET1 Ratio for a Performance Year, the applicable Tranche is eligible for forfeiture as determined by the Committee prior to settlement of the Tranche.
|
|
|
|
3.
|
Risk Performance Review Adjustment
|
In addition, and independent from the CET1 Ratio performance metric described in paragraph 2 above, with respect to each Tranche and prior to the settlement of that Tranche, the Committee has the discretion to conduct a risk performance review relating to a risk-related action of potentially material consequence to PNC.
If the Committee exercises its discretion to conduct a risk performance review, the Committee will review and determine if a downward adjustment for risk performance is appropriate for the applicable Tranche.
Any determination to conduct a risk performance review will be made shortly after the close of the Performance Year, but no later than the 45
th
day following the close of the Performance Year, and any required review will be conducted no later than two and a half-months after the close of the Performance Year.
|
|
|
|
B.1
|
An Award becomes vested only upon satisfaction of both the service-based vesting requirements and the risk performance-based vesting requirements set forth below.
|
|
|
SERVICE-BASED VESTING REQUIREMENTS
|
The Award is divided into three approximately equal portions that will satisfy the service-based vesting requirements ratably over three years (each portion, a “
Tranche
”) on three “
Scheduled Vesting Dates
”, as follows:
•
the service-based vesting requirement for the first Tranche will be satisfied on the 1
st
anniversary of the Grant Date,
•
the service-based vesting requirement for the second Tranche will be satisfied on the 2
nd
anniversary of the Grant Date, and
•
the service-based vesting requirement for the third Tranche will be satisfied on the 3
rd
anniversary of the Grant Date;
in each case, provided you remain continuously employed by PNC through and including the applicable Scheduled Vesting Date (or such earlier date as prescribed by Section B.2 below).
|
|
RISK PERFORMANCE-BASED VESTING REQUIREMENTS
|
Provided the service-based vesting requirements have been met, each Tranche will vest on the applicable Scheduled Vesting Date upon satisfaction of the risk performance metric applicable to that Tranche, as set forth in
Appendix C
to this Agreement.
|
B.2
|
EFFECT OF TERMINATION OF EMPLOYMENT PRIOR TO SCHEDULED VESTING DATES ON VESTING REQUIREMENTS
|
|
|
RETIREMENT
|
Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated due to your Retirement, and not for Cause (as determined by a PNC Designated Person), then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
|
C.1
|
FORFEITURE UPON FAILURE TO MEET VESTING REQUIREMENTS
|
Except as otherwise provided in Section B.2 above, if you cease to be an employee of PNC prior to an applicable Scheduled Vesting Date and the satisfaction of the risk performance-based vesting requirements, you will not have satisfied the vesting requirements and the outstanding portion of the Award will be automatically forfeited and cancelled as of your Termination Date.
|
C.2
|
FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
|
At any time prior to a Scheduled Vesting Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
Upon such determination, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
|
D.
|
DIVIDEND EQUIVALENTS
|
|
D.1
|
GENERALLY
|
As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the final number of vested RSUs for each Tranche, in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control), as though you were the record holder of such RSUs, and such RSUs had been issued and outstanding shares on the Grant Date through the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control).
|
D.2
|
ACCRUED DIVIDEND EQUIVALENT PAYMENTS
|
(a)
Generally
. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the applicable Tranche vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Tranche to which they relate. If the RSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled without payment of any consideration by PNC.
(b)
Payment Upon a Change of Control
. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
, if and when the applicable Tranche vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested RSUs underlying such Tranche from the Grant Date through the date of the Change of Control.
|
E.
|
PAYMENT OF THE AWARD
|
|
E.1
|
PAYMENT TIMING
|
Except as otherwise provided below, vested RSUs that remain outstanding will be settled as soon as practicable following (i) the applicable Scheduled Vesting Date (but no later than March 15
th
following the year the applicable Scheduled Vesting Date occurs), or (ii) your date of death, if your date of death is prior to the last Scheduled Vesting Date (but no later than December 31
st
of the year following the year of your death).
|
E.2
|
FORM OF PAYMENT; AMOUNT
|
(a)
Payment Generally
.
Except as provided in subsection (b) below, vested RSUs will be settled at the time set forth in this Section E.1 by delivery to you of that number of whole Shares equal to the number of RSUs less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
.
(b)
Payment On or After a Change of Control
.
Upon vesting on or after a Change of Control, vested RSUs will be settled at the time set forth in Section E.1 by payment to you of cash in an amount equal to that number of whole Shares equal to the number of vested RSUs, multiplied by the then current Fair Market Value of a share of Common Stock on the date of the Change of Control (subject to any applicable adjustment pursuant to Section 2 of
Appendix A)
, less the payment of any applicable withholding taxes pursuant to Section 6 of
Appendix A
. Related accrued Dividend Equivalent payments will be paid to you in cash as described in Section D.2(b).
No interest will be paid with respect to any such payments made pursuant to this Section E.
|
F.
|
RESTRICTIVE COVENANTS
|
Upon your acceptance of this Award, you shall become subject to the restrictive covenant provisions set forth in Section 1 of
Appendix A
.
|
G.
|
CLAWBACK
|
The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
|
|
|
|
1.
|
Generally
|
The Award is divided into three Tranches, with the first Tranche relating to the 2018 performance year, the second Tranche relating to the 2019 performance year, and the third tranche relating to the 2020 performance year (each such year, a “
Performance Year
”).
Each Tranche must satisfy a risk-related performance metric based on whether PNC has met or exceeded the common equity Tier 1 capital spot ratio limit as then in effect and applicable to The PNC Financial Services Group, Inc. (“
CET1 Ratio
”) (which may be on a pro forma fully phased-in basis, if applicable) as set forth in PNC’s Enterprise Capital Management Policy (or any successor policy) and monitored at least quarterly. Each Tranche of the Award will also be subject to an annual risk review based on business unit financial performance (or at the discretion of the Committee).
“
PNC
” for purposes of this
Appendix C
as it refers to risk performance-based vesting conditions means the Corporation and its consolidated subsidiaries for financial reporting purposes.
All performance metrics, including any adjustments, will be determined on the basis of PNC’s internal financial information as of the date immediately prior to the date the Committee certifies this metric for PNC’s corporate executive group and only where such amounts can be reasonably determined.
|
|
|
|
2.
|
Applying the Risk Performance Metric
|
(a) CET1 Ratio Generally
. Each Tranche is subject to a risk performance factor based on whether PNC has met or exceeded the CET1 Ratio as of the last day of each Performance Year. The current CET1 Ratio is 7.0%.
(b) Determination of Annual CET1 Ratio
. As soon as practicable following the end of each Performance Year, PNC will present information to the Committee relating to (i) the CET1 Ratio compared to (ii) the actual CET1 Ratio achieved by PNC with respect to that Performance Year, based on PNC’s publicly reported financial results for the period ending on the applicable end date. Except as otherwise provided in paragraph 5 in the event of your death or a Change of Control, this will generally be the public release of earnings results for PNC’s fourth quarter that occurs after the year-end measurement date, so that the Committee will be able to make its determination in late January or early February following a Performance Year.
•
If PNC meets or exceeds the CET1 Ratio for a Performance Year, the risk performance metric is satisfied.
•
If PNC does not meet the CET1 Ratio for a Performance Year, the applicable Tranche is eligible for forfeiture as determined by the Committee prior to settlement of the Tranche.
|
|
|
|
3.
|
Risk Performance Review Adjustments
|
In addition, and independent from the CET1 Ratio performance metric described in paragraph 2 above, with respect to each Tranche and prior to the settlement of that Tranche, the Committee conducts a risk performance review either (1) as a result of business unit financial performance (as described below) or (2) at the discretion of the Committee, relating to a risk-related action of potentially material consequence to PNC.
A risk performance review is triggered under (1) above if (a) one of the specific business unit or enterprise level review triggers set forth below is met and (b) that review trigger is applicable to you because either it (i) applies to your business unit or functional area as of the Grant Date and the Committee has not determined in its discretion to apply a different review trigger to you for the Performance Year, or (ii) the Committee has determined in its discretion
|
|
|
to apply such specific business unit or enterprise level review trigger to you for the Performance Year. The specific business unit or enterprise level review triggers are as follows:
•
PNC’s Retail Banking segment reports a loss for the Performance Year
•
PNC’s Corporate & Institutional Banking segment reports a loss for the Performance Year
•
PNC’s Asset Management Group segment reports a loss for the Performance Year
If you are not assigned to one of the above-named business units as of the Grant Date, the review trigger will be applicable to you only in the event the Committee determines in its discretion to apply such review trigger, as described in (ii) above. If your affiliated business unit or functional area as of the Grant Date is eliminated or no longer reportable due to restructuring or other business reason, the specific review trigger applicable to you will be based on your newly assigned business unit or functional area.
For purposes of this Agreement, whether or not a specified business unit has a loss for a given Performance Year will be determined on the basis of the reported earnings or loss, as the case may be, of the reportable business segment that includes the results of such business unit, based on PNC’s publicly reported financial results for that year.
If a risk performance review is triggered as a result of business financial performance under (1) or if the Committee exercises its discretion to conduct a risk performance review under (2) above, the Committee will review and determine if a downward adjustment for risk performance is appropriate either for the applicable Tranche or to a specific Grantee.
Any determination to conduct a risk performance review will be made shortly after the close of the Performance Year, but no later than the 45
th
day following the close of the Performance Year, and any required review will be conducted no later than two and a half-months after the close of the Performance Year.
|
|
|
|
|
|
|
|
|
|
|
EXHIBIT 12.1
|
|
|||||||||||||||
The PNC Financial Services Group, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31
|
||||||||||||||||||||
Dollars in millions
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pretax income from continuing operations before adjustment for noncontrolling interests in consolidated subsidiaries or income or loss from equity investees
|
$
|
2,736
|
|
|
$
|
4,510
|
|
|
$
|
4,642
|
|
|
$
|
4,860
|
|
|
$
|
4,993
|
|
|
$
|
5,148
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributed income of equity investees
|
200
|
|
|
352
|
|
|
324
|
|
|
310
|
|
|
275
|
|
|
242
|
|
||||||
Fixed charges excluding interest on deposits
|
821
|
|
|
1,227
|
|
|
978
|
|
|
796
|
|
|
734
|
|
|
664
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interests in pretax income of subsidiaries that have not incurred fixed charges
|
22
|
|
|
57
|
|
|
84
|
|
|
93
|
|
|
96
|
|
|
112
|
|
||||||
Interest capitalized
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
||||||||||
Earnings excluding interest on deposits
|
3,735
|
|
|
6,032
|
|
|
5,860
|
|
|
5,872
|
|
|
5,905
|
|
|
5,942
|
|
||||||
Interest on deposits
|
474
|
|
|
623
|
|
|
430
|
|
|
403
|
|
|
325
|
|
|
344
|
|
||||||
Total earnings
|
$
|
4,209
|
|
|
$
|
6,655
|
|
|
$
|
6,290
|
|
|
$
|
6,275
|
|
|
$
|
6,230
|
|
|
$
|
6,286
|
|
Fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on borrowed funds
|
$
|
751
|
|
|
$
|
1,082
|
|
|
$
|
830
|
|
|
$
|
640
|
|
|
$
|
581
|
|
|
$
|
516
|
|
Interest component of rentals
|
69
|
|
|
144
|
|
|
147
|
|
|
153
|
|
|
152
|
|
|
148
|
|
||||||
Amortization of notes and debentures
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
|
|
|
||||||||
Interest capitalized
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|||||||||
Fixed charges excluding interest on deposits
|
821
|
|
|
1,227
|
|
|
978
|
|
|
796
|
|
|
734
|
|
|
664
|
|
||||||
Interest on deposits
|
474
|
|
|
623
|
|
|
430
|
|
|
403
|
|
|
325
|
|
|
344
|
|
||||||
Total fixed charges
|
$
|
1,295
|
|
|
$
|
1,850
|
|
|
$
|
1,408
|
|
|
$
|
1,199
|
|
|
$
|
1,059
|
|
|
$
|
1,008
|
|
Ratio of earnings to fixed charges
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Excluding interest on deposits
|
4.55
|
x
|
|
4.92
|
x
|
|
5.99
|
x
|
|
7.38
|
x
|
|
8.04
|
x
|
|
8.95
|
x
|
||||||
Including interest on deposits
|
3.25
|
|
|
3.60
|
|
|
4.47
|
|
|
5.23
|
|
|
5.88
|
|
|
6.24
|
|
(1)
|
As defined in Item 503(d) of Regulation S-K
|
|
|
|
|
|
|
|
EXHIBIT 12.2
|
|
|||||||||||||||
The PNC Financial Services Group, Inc. and Subsidiaries
Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends (1)
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||||||||||
|
Six Months Ended June 30, 2018
|
|
Year Ended December 31
|
|
|
||||||||||||||||||
Dollars in millions
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|||||||||||||
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Pretax income from continuing operations before adjustment for noncontrolling interests in consolidated subsidiaries or income or loss from equity investees
|
$
|
2,736
|
|
|
$
|
4,510
|
|
|
$
|
4,642
|
|
|
$
|
4,860
|
|
|
$
|
4,993
|
|
|
$
|
5,148
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distributed income of equity investees
|
200
|
|
|
352
|
|
|
324
|
|
|
310
|
|
|
275
|
|
|
242
|
|
||||||
Fixed charges and preferred stock dividends excluding interest on deposits
|
970
|
|
|
1,590
|
|
|
1,300
|
|
|
1,134
|
|
|
1,091
|
|
|
1,028
|
|
||||||
Less:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Noncontrolling interests in pretax income of subsidiaries that have not incurred fixed charges
|
22
|
|
|
57
|
|
|
84
|
|
|
93
|
|
|
96
|
|
|
112
|
|
||||||
Interest capitalized
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
||||||||||
Preferred stock dividend requirements
|
149
|
|
|
363
|
|
|
322
|
|
|
338
|
|
|
357
|
|
|
364
|
|
||||||
Earnings excluding interest on deposits
|
3,735
|
|
|
6,032
|
|
|
5,860
|
|
|
5,872
|
|
|
5,905
|
|
|
5,942
|
|
||||||
Interest on deposits
|
474
|
|
|
623
|
|
|
430
|
|
|
403
|
|
|
325
|
|
|
344
|
|
||||||
Total earnings
|
$
|
4,209
|
|
|
$
|
6,655
|
|
|
$
|
6,290
|
|
|
$
|
6,275
|
|
|
$
|
6,230
|
|
|
$
|
6,286
|
|
Fixed charges and preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on borrowed funds
|
$
|
751
|
|
|
$
|
1,082
|
|
|
$
|
830
|
|
|
$
|
640
|
|
|
$
|
581
|
|
|
$
|
516
|
|
Interest component of rentals
|
69
|
|
|
144
|
|
|
147
|
|
|
153
|
|
|
152
|
|
|
148
|
|
||||||
Amortization of notes and debentures
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
|
|
|
||||||||
Interest capitalized
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
|
|
|||||||||
Preferred stock dividend requirements
|
149
|
|
|
363
|
|
|
322
|
|
|
338
|
|
|
357
|
|
|
364
|
|
||||||
Fixed charges and preferred stock dividends excluding interest on deposits
|
970
|
|
|
1,590
|
|
|
1,300
|
|
|
1,134
|
|
|
1,091
|
|
|
1,028
|
|
||||||
Interest on deposits
|
474
|
|
|
623
|
|
|
430
|
|
|
403
|
|
|
325
|
|
|
344
|
|
||||||
Total fixed charges and preferred stock dividends
|
$
|
1,444
|
|
|
$
|
2,213
|
|
|
$
|
1,730
|
|
|
$
|
1,537
|
|
|
$
|
1,416
|
|
|
$
|
1,372
|
|
Ratio of earnings to fixed charges and preferred stock dividends
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Excluding interest on deposits
|
3.85
|
x
|
|
3.79
|
x
|
|
4.51
|
x
|
|
5.18
|
x
|
|
5.41
|
x
|
|
5.78
|
x
|
||||||
Including interest on deposits
|
2.91
|
|
|
3.01
|
|
|
3.64
|
|
|
4.08
|
|
|
4.40
|
|
|
4.58
|
|
(1)
|
As defined in Item 503(d) of Regulation S-K.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of The PNC Financial Services Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ William S. Demchak
|
|
William S. Demchak
|
|
Chairman, President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 of The PNC Financial Services Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
/s/ Robert Q. Reilly
|
|
Robert Q. Reilly
|
|
Executive Vice President and Chief Financial Officer
|
|
|
/s/ William S. Demchak
|
|
William S. Demchak
|
|
Chairman, President and Chief Executive Officer
|
|
|
/s/ Robert Q. Reilly
|
|
Robert Q. Reilly
|
|
Executive Vice President and Chief Financial Officer
|