|
☒
|
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.) |
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange
on Which Registered
|
Common Stock, par value $5.00
|
PNC
|
New York Stock Exchange
|
Depositary Shares Each Representing a 1/4,000 Interest in a Share of Fixed-to-
Floating Rate Non-Cumulative Perpetual Preferred Stock, Series P |
PNC P
|
New York Stock Exchange
|
Depositary Shares Each Representing a 1/4,000 Interest in a Share of 5.375%
Non-Cumulative Perpetual Preferred Stock, Series Q |
PNC Q
|
New York Stock Exchange
|
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.
|
22-40, 53-64 and 94-99
|
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
|
Allowance for Credit Losses by Loan Class
|
|
24
|
||
25
|
||
26
|
||
27
|
||
28
|
||
29
|
||
30
|
||
31
|
||
32
|
|
|
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE
|
|
|
Table
|
Description
|
Page
|
33
|
||
34
|
||
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
|
||
77
|
||
78
|
||
79
|
||
80
|
Dollars in millions, except per share data
Unaudited
|
Three months ended
March 31 |
|
|||||
2020
|
2019
|
|
|||||
Financial Results (a)
|
|
|
|
||||
Revenue
|
|
|
|
||||
Net interest income
|
$
|
2,511
|
|
$
|
2,475
|
|
|
Noninterest income
|
2,006
|
|
1,811
|
|
|
||
Total revenue
|
4,517
|
|
4,286
|
|
|
||
Provision for credit losses
|
914
|
|
189
|
|
|
||
Noninterest expense
|
2,543
|
|
2,578
|
|
|
||
Income before income taxes and noncontrolling interests
|
$
|
1,060
|
|
$
|
1,519
|
|
|
Net income
|
$
|
915
|
|
$
|
1,271
|
|
|
Less:
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
7
|
|
10
|
|
|
||
Preferred stock dividends
|
63
|
|
63
|
|
|
||
Preferred stock discount accretion and redemptions
|
1
|
|
1
|
|
|
||
Net income attributable to common shareholders
|
844
|
|
1,197
|
|
|
||
Less:
|
|
|
|
||||
Dividends and undistributed earnings allocated to participating securities
|
4
|
|
5
|
|
|
||
Impact of BlackRock earnings per share dilution
|
1
|
|
3
|
|
|
||
Net income attributable to diluted common shares
|
$
|
839
|
|
$
|
1,189
|
|
|
Diluted earnings per common share
|
$
|
1.95
|
|
$
|
2.61
|
|
|
Cash dividends declared per common share
|
$
|
1.15
|
|
$
|
.95
|
|
|
Effective tax rate (b)
|
13.7
|
%
|
16.3
|
%
|
|
||
Performance Ratios
|
|
|
|
||||
Net interest margin (c)
|
2.84
|
%
|
2.98
|
%
|
|
||
Noninterest income to total revenue
|
44
|
%
|
42
|
%
|
|
||
Efficiency
|
56
|
%
|
60
|
%
|
|
||
Return on:
|
|
|
|
||||
Average common shareholders’ equity
|
7.51
|
%
|
11.13
|
%
|
|
||
Average assets
|
.89
|
%
|
1.34
|
%
|
|
(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.
|
(c)
|
Net interest margin is the total yield on interest-earning assets minus the total rate on interest-bearing liabilities and includes the benefit from use of noninterest-bearing sources. To provide more meaningful comparisons of net interest margins, we use net interest income on a taxable-equivalent basis in calculating average yields used in the calculation of net interest margin by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under 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
|
March 31
2020 |
|
December 31
2019 |
|
March 31
2019 |
|
|
|||
Balance Sheet Data (dollars in millions, except per share data)
|
|
|
|
|
||||||
Assets
|
$
|
445,493
|
|
$
|
410,295
|
|
$
|
392,837
|
|
|
Loans
|
$
|
264,643
|
|
$
|
239,843
|
|
$
|
232,293
|
|
|
Allowance for credit losses - loans and leases (b)
|
$
|
3,944
|
|
$
|
2,742
|
|
$
|
2,692
|
|
|
Interest-earning deposits with banks (c)
|
$
|
19,986
|
|
$
|
23,413
|
|
$
|
15,261
|
|
|
Investment securities (d)
|
$
|
90,546
|
|
$
|
86,824
|
|
$
|
83,869
|
|
|
Loans held for sale
|
$
|
1,693
|
|
$
|
1,083
|
|
$
|
686
|
|
|
Equity investments (e)
|
$
|
13,205
|
|
$
|
13,734
|
|
$
|
12,567
|
|
|
Mortgage servicing rights
|
$
|
1,082
|
|
$
|
1,644
|
|
$
|
1,812
|
|
|
Goodwill
|
$
|
9,233
|
|
$
|
9,233
|
|
$
|
9,218
|
|
|
Other assets (d)
|
$
|
41,556
|
|
$
|
32,202
|
|
$
|
34,761
|
|
|
Noninterest-bearing deposits
|
$
|
81,614
|
|
$
|
72,779
|
|
$
|
71,606
|
|
|
Interest-bearing deposits
|
$
|
223,590
|
|
$
|
215,761
|
|
$
|
199,615
|
|
|
Total deposits
|
$
|
305,204
|
|
$
|
288,540
|
|
$
|
271,221
|
|
|
Borrowed funds
|
$
|
73,399
|
|
$
|
60,263
|
|
$
|
59,860
|
|
|
Allowance for credit losses - unfunded lending related commitments (b)
|
$
|
450
|
|
$
|
318
|
|
$
|
279
|
|
|
Total shareholders’ equity
|
$
|
49,263
|
|
$
|
49,314
|
|
$
|
48,536
|
|
|
Common shareholders’ equity
|
$
|
45,269
|
|
$
|
45,321
|
|
$
|
44,546
|
|
|
Accumulated other comprehensive income (loss)
|
$
|
2,518
|
|
$
|
799
|
|
$
|
(5
|
)
|
|
Book value per common share
|
$
|
106.70
|
|
$
|
104.59
|
|
$
|
98.47
|
|
|
Period-end common shares outstanding (in millions)
|
424
|
|
433
|
|
452
|
|
|
|||
Loans to deposits
|
87
|
%
|
83
|
%
|
86
|
%
|
|
|||
Common shareholders’ equity to total assets
|
10.2
|
%
|
11.0
|
%
|
11.3
|
%
|
|
|||
Client Assets (in billions)
|
|
|
|
|
||||||
Discretionary client assets under management
|
$
|
136
|
|
$
|
154
|
|
$
|
158
|
|
|
Nondiscretionary client assets under administration
|
128
|
|
143
|
|
130
|
|
|
|||
Total client assets under administration
|
264
|
|
297
|
|
288
|
|
|
|||
Brokerage account client assets
|
49
|
|
54
|
|
51
|
|
|
|||
Total client assets
|
$
|
313
|
|
$
|
351
|
|
$
|
339
|
|
|
Basel III Capital Ratios (f) (g)
|
|
|
|
|
||||||
Common equity Tier 1
|
9.4
|
%
|
9.5
|
%
|
9.8
|
%
|
|
|||
Common equity Tier 1 fully implemented (h)
|
9.2
|
%
|
N/A
|
|
N/A
|
|
|
|||
Tier 1 risk-based
|
10.5
|
%
|
10.7
|
%
|
10.9
|
%
|
|
|||
Total capital risk-based (i)
|
12.6
|
%
|
12.7
|
%
|
13.0
|
%
|
|
|||
Leverage
|
9.5
|
%
|
9.1
|
%
|
9.6
|
%
|
|
|||
Supplementary leverage
|
7.9
|
%
|
7.6
|
%
|
8.0
|
%
|
|
|||
Asset Quality
|
|
|
|
|
||||||
Nonperforming loans to total loans
|
.62
|
%
|
.68
|
%
|
.71
|
%
|
|
|||
Nonperforming assets to total loans, OREO and foreclosed assets
|
.66
|
%
|
.73
|
%
|
.77
|
%
|
|
|||
Nonperforming assets to total assets
|
.39
|
%
|
.43
|
%
|
.45
|
%
|
|
|||
Net charge-offs to average loans (for the three months ended) (annualized)
|
.35
|
%
|
.35
|
%
|
.24
|
%
|
|
|||
Allowance for credit losses - loans and leases to total loans (j)
|
1.49
|
%
|
1.14
|
%
|
1.16
|
%
|
|
|||
Allowance for credit losses to total loans (k)
|
1.66
|
%
|
1.28
|
%
|
1.28
|
%
|
|
|||
Allowance for credit losses - loans and leases to nonperforming loans (j)
|
240
|
%
|
168
|
%
|
163
|
%
|
|
|||
Accruing loans past due 90 days or more (in millions)
|
$
|
534
|
|
$
|
585
|
|
$
|
590
|
|
|
(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)
|
Amount at March 31, 2020 reflects the impact of adopting Accounting Standards Update 2016-13 - Financial Instruments - Credit Losses, which is commonly referred to as the Current Expected Credit Losses (CECL) standard and our transition from an incurred loss methodology for these reserves to an expected credit loss methodology. Prior period amounts represent Allowance for Loan and Lease Losses (ALLL) under the incurred loss methodology. See Note 1 Accounting Policies of this Report for additional information related to our adoption of this standard.
|
(c)
|
Amounts include balances held with the Federal Reserve Bank of Cleveland (Federal Reserve Bank) of $19.6 billion, $23.2 billion and $15.0 billion as of March 31, 2020, December 31, 2019 and March 31, 2019, respectively.
|
(d)
|
Amounts as of March 31, 2020 are net of the related Allowance for Credit Losses (ACL) recorded in accordance with the adoption of the CECL standard, which totaled $2 million and $19 million for Investment securities and Other assets, respectively. See Note 1 Accounting Policies of this Report for additional detail related to our adoption of this standard.
|
(e)
|
Amounts include our equity interest in BlackRock, Inc.
|
(f)
|
All ratios are calculated using the regulatory capital methodology applicable to PNC during each period presented and calculated based on the standardized approach. 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 2019 Form 10-K.
|
(g)
|
The March 31, 2020 ratios are calculated to reflect PNC's election to adopt the CECL optional five-year transition provision, unless noted differently.
|
(h)
|
The March 31, 2020 ratio is calculated to reflect the full impact of CECL and excludes the benefits of phase-ins under the optional transition provision.
|
(i)
|
The 2020 and 2019 Basel III Total risk-based capital ratios include nonqualifying trust preferred capital securities of $40 million and $60 million, respectively, that are subject to a phase-out period that runs through 2021.
|
(j)
|
Prior period ratios are calculated with ALLL as the numerator under the incurred loss methodology prior to the adoption of the CECL standard.
|
(k)
|
Calculated as the ACL for loans and leases and the ACL for unfunded lending related commitments divided by total loans.
|
•
|
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 $231 million, or 5%, to $4.5 billion.
|
•
|
Net interest income of $2.5 billion increased $36 million, or 1%.
|
•
|
Net interest margin decreased to 2.84% compared to 2.98% for the first quarter of 2019.
|
•
|
Noninterest income increased $195 million, or 11%, to $2.0 billion.
|
•
|
Provision for credit losses of $914 million, which was calculated under the Current Expected Credit Losses (CECL) accounting standard effective January 1, 2020, increased $725 million compared to the first quarter of 2019 reflecting the change in methodology together with the significant economic impact of COVID-19 and loan growth.
|
•
|
Noninterest expense decreased $35 million, or 1%, to $2.5 billion.
|
•
|
Earnings per diluted common share decreased primarily due to lower net income partially offset by lower average common shares outstanding due to share repurchases.
|
•
|
Total assets increased $35.2 billion, or 9%, to $445.5 billion.
|
•
|
Total loans increased $24.8 billion, or 10%, to $264.6 billion.
|
•
|
Total commercial lending grew $24.1 billion, or 15%, to $184.7 billion, reflecting higher utilization of loan commitments near quarter end driven by the economic impact of COVID-19.
|
•
|
Total consumer lending increased $.7 billion, or 1%, to $79.9 billion.
|
•
|
Investment securities increased $3.7 billion, or 4%, to $90.5 billion.
|
•
|
Interest-earning deposits with banks, primarily with the Federal Reserve Bank, decreased $3.4 billion to $20.0 billion.
|
•
|
Total deposits increased $16.7 billion, or 6%, to $305.2 billion as higher commercial deposits near quarter end reflected liquidity maintained by customers due to the economic impact of COVID-19.
|
•
|
Borrowed funds increased $13.1 billion, or 22%, to $73.4 billion in part related to enhanced liquidity to meet customer needs caused by the economic impact of COVID-19.
|
•
|
At March 31, 2020 compared to December 31, 2019:
|
•
|
Nonperforming assets of $1.8 billion increased $3 million.
|
•
|
Overall loan delinquencies of $1.5 billion decreased $21 million, or 1%.
|
•
|
Net charge-offs were $212 million, or .35% of average loans on annualized basis, in the first quarter of 2020 compared to $136 million, or .24%, for the first quarter of 2019.
|
•
|
The allowance for credit losses of $4.4 billion to total loans was 1.66% at March 31, 2020, and reflects the January 1, 2020 transition adjustment of $.6 billion for the adoption of the CECL accounting standard.
|
•
|
The Basel III common equity Tier 1 (CET1) capital ratio was 9.4% at March 31, 2020 and 9.5% at December 31, 2019.
|
◦
|
The March 31, 2020 ratio reflects 2019 Tailoring Rules changes and our election of a five-year transition provision that delays CECL's estimated impact on CET1 capital, as defined by the rule. CECL's estimated impact on CET1 capital is the change in retained earnings at adoption plus or minus 25% of the change in CECL ACL at the balance sheet date compared to CECL ACL at transition. The estimated CECL impact is added to CET1 through December 31, 2021, then phased-out over the following three years.
|
•
|
Common shareholders' equity was $45.3 billion at both March 31, 2020 and December 31, 2019.
|
•
|
In the first quarter of 2020, we returned $1.9 billion of capital to shareholders through repurchases of 10.1 million common shares for $1.4 billion and dividends on common shares of $.5 billion.
|
•
|
We announced on March 16, 2020 a temporary suspension of our common stock share repurchase program through June 30, 2020 in conjunction with the Federal Reserve's effort to support the U.S. economy during the COVID-19 outbreak.
|
•
|
On April 2, 2020, the PNC board of directors declared a quarterly cash dividend on common stock of $1.15 per share effective with the May 5, 2020 dividend payment date.
|
•
|
Our baseline economic forecast is for a severe but short recession in the first half of 2020. Restrictions on movement because of the COVID-19 pandemic have led to a substantial drop in consumer spending and a steep drop in output as many businesses are closed or operating at significantly reduced levels, and many workers are unable to get to their jobs. PNC expects a significant contraction in U.S. real GDP and steep job losses over the next few months and a large increase in the unemployment rate through mid-2020.
|
•
|
In the baseline forecast, economic growth resumes in the third quarter as businesses re-open and consumers start to spend again. Fiscal stimulus and extremely low interest rates support the recovery. Real GDP surpasses its pre-recession peak in the second half of 2021, and growth is well above its long-term trend through 2022.
|
•
|
The baseline forecast assumes that the Federal Open Market Committee keeps the federal funds rate in its current range of 0.00% to 0.25% into 2023.
|
•
|
Average loans to be up approximately 10% to 15%;
|
•
|
Net interest income to be stable;
|
•
|
Noninterest income to be down approximately 15% to 20%;
|
•
|
Noninterest expense to be stable to down; and
|
•
|
Net charge-offs to be between $250 million and $350 million.
|
|
|
2020
|
|
2019
|
|
||||||||||||||||||
Three months ended March 31
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
|
|
$
|
84,422
|
|
|
2.78
|
%
|
|
$
|
588
|
|
|
$
|
82,318
|
|
|
3.05
|
%
|
|
$
|
627
|
|
|
Loans
|
|
243,572
|
|
|
4.08
|
%
|
|
2,496
|
|
|
228,545
|
|
|
4.61
|
%
|
|
2,622
|
|
|
||||
Interest-earning deposits with banks
|
|
17,569
|
|
|
1.27
|
%
|
|
56
|
|
|
15,017
|
|
|
2.43
|
%
|
|
91
|
|
|
||||
Other
|
|
9,468
|
|
|
3.51
|
%
|
|
82
|
|
|
11,068
|
|
|
4.14
|
%
|
|
115
|
|
|
||||
Total interest-earning assets/interest income
|
|
$
|
355,031
|
|
|
3.62
|
%
|
|
3,222
|
|
|
$
|
336,948
|
|
|
4.11
|
%
|
|
3,455
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
$
|
215,336
|
|
|
.70
|
%
|
|
375
|
|
|
$
|
195,816
|
|
|
.98
|
%
|
|
472
|
|
|
||
Borrowed funds
|
|
57,188
|
|
|
2.18
|
%
|
|
314
|
|
|
59,783
|
|
|
3.21
|
%
|
|
481
|
|
|
||||
Total interest-bearing liabilities/interest expense
|
|
$
|
272,524
|
|
|
1.00
|
%
|
|
689
|
|
|
$
|
255,599
|
|
|
1.50
|
%
|
|
953
|
|
|
||
Net interest margin/income (Non-GAAP)
|
|
|
|
2.84
|
%
|
|
2,533
|
|
|
|
|
2.98
|
%
|
|
2,502
|
|
|
||||||
Taxable-equivalent adjustments
|
|
|
|
|
|
(22
|
)
|
|
|
|
|
|
(27
|
)
|
|
||||||||
Net interest income (GAAP)
|
|
|
|
|
|
$
|
2,511
|
|
|
|
|
|
|
$
|
2,475
|
|
|
(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 in Item 1 of this Report.
|
|
|
Three months ended March 31
|
|
|||||||||||||
|
|
|
|
|
|
Change
|
|
|||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
|||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|||||||
Asset management
|
|
$
|
382
|
|
|
$
|
437
|
|
|
$
|
(55
|
)
|
|
(13
|
)%
|
|
Consumer services
|
|
377
|
|
|
371
|
|
|
6
|
|
|
2
|
%
|
|
|||
Corporate services
|
|
526
|
|
|
462
|
|
|
64
|
|
|
14
|
%
|
|
|||
Residential mortgage
|
|
210
|
|
|
65
|
|
|
145
|
|
|
223
|
%
|
|
|||
Service charges on deposits
|
|
168
|
|
|
168
|
|
|
—
|
|
|
—
|
|
|
|||
Other
|
|
343
|
|
|
308
|
|
|
35
|
|
|
11
|
%
|
|
|||
Total noninterest income
|
|
$
|
2,006
|
|
|
$
|
1,811
|
|
|
$
|
195
|
|
|
11
|
%
|
|
|
|
Three months ended March 31
|
|
|||||||||||||
|
|
|
|
|
|
Change
|
|
|||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
|||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|||||||
Personnel
|
|
$
|
1,369
|
|
|
$
|
1,414
|
|
|
$
|
(45
|
)
|
|
(3
|
)%
|
|
Occupancy
|
|
207
|
|
|
215
|
|
|
(8
|
)
|
|
(4
|
)%
|
|
|||
Equipment
|
|
287
|
|
|
273
|
|
|
14
|
|
|
5
|
%
|
|
|||
Marketing
|
|
58
|
|
|
65
|
|
|
(7
|
)
|
|
(11
|
)%
|
|
|||
Other
|
|
622
|
|
|
611
|
|
|
11
|
|
|
2
|
%
|
|
|||
Total noninterest expense
|
|
$
|
2,543
|
|
|
$
|
2,578
|
|
|
$
|
(35
|
)
|
|
(1
|
)%
|
|
|
March 31
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|||||||
Interest-earning deposits with banks
|
$
|
19,986
|
|
|
$
|
23,413
|
|
|
$
|
(3,427
|
)
|
(15
|
)%
|
|
Loans held for sale
|
1,693
|
|
|
1,083
|
|
|
610
|
|
56
|
%
|
|
|||
Investment securities (a)
|
90,546
|
|
|
86,824
|
|
|
3,722
|
|
4
|
%
|
|
|||
Loans
|
264,643
|
|
|
239,843
|
|
|
24,800
|
|
10
|
%
|
|
|||
Allowance for credit losses - loans and leases (b)
|
(3,944
|
)
|
|
(2,742
|
)
|
|
(1,202
|
)
|
(44
|
)%
|
|
|||
Mortgage servicing rights
|
1,082
|
|
|
1,644
|
|
|
(562
|
)
|
(34
|
)%
|
|
|||
Goodwill
|
9,233
|
|
|
9,233
|
|
|
—
|
|
—
|
|
|
|||
Other (a)
|
62,254
|
|
|
50,997
|
|
|
11,257
|
|
22
|
%
|
|
|||
Total assets
|
$
|
445,493
|
|
|
$
|
410,295
|
|
|
$
|
35,198
|
|
9
|
%
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
$
|
305,204
|
|
|
$
|
288,540
|
|
|
$
|
16,664
|
|
6
|
%
|
|
Borrowed funds
|
73,399
|
|
|
60,263
|
|
|
13,136
|
|
22
|
%
|
|
|||
Allowance for credit losses - unfunded lending related commitments (b)
|
450
|
|
|
318
|
|
|
132
|
|
42
|
%
|
|
|||
Other
|
17,150
|
|
|
11,831
|
|
|
5,319
|
|
45
|
%
|
|
|||
Total liabilities
|
396,203
|
|
|
360,952
|
|
|
35,251
|
|
10
|
%
|
|
|||
Equity
|
|
|
|
|
|
|
|
|
|
|||||
Total shareholders’ equity
|
49,263
|
|
|
49,314
|
|
|
(51
|
)
|
—
|
|
|
|||
Noncontrolling interests
|
27
|
|
|
29
|
|
|
(2
|
)
|
(7
|
)%
|
|
|||
Total equity
|
49,290
|
|
|
49,343
|
|
|
(53
|
)
|
—
|
|
|
|||
Total liabilities and equity
|
$
|
445,493
|
|
|
$
|
410,295
|
|
|
$
|
35,198
|
|
9
|
%
|
|
(a)
|
Amount as of March 31, 2020 is net of the related Allowance for Credit Losses recorded in accordance with the adoption of the CECL accounting standard. Refer to Note 1 Accounting Policies in this Report for additional detail on the adoption of this standard.
|
(b)
|
Amounts as of March 31, 2020 reflect the impact of adopting the CECL accounting standard and our transition from an incurred loss methodology for these reserves to an expected credit loss methodology. Prior period amounts represent Allowance for Loan and Lease losses (ALLL) under the incurred loss methodology. Refer to Note 1 Accounting Policies in this Report for additional detail on the adoption of this standard.
|
•
|
Total assets increased driven by loan growth, higher other assets due to timing of unsettled securities sales at quarter end and an increase in derivative values, and higher investment securities;
|
•
|
Total liabilities increased due to deposit growth and higher borrowed funds, and higher other liabilities due to timing of unsettled securities purchases at quarter end and higher derivative values;
|
•
|
Total equity decreased due to higher accumulated other comprehensive income (AOCI) and net income more than offset by share repurchases and dividends and the day-one effect of adopting the CECL accounting standard.
|
|
March 31
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Commercial lending
|
|
|
|
|
|
|
|
|||||||
Commercial
|
$
|
149,131
|
|
|
$
|
125,337
|
|
|
$
|
23,794
|
|
19
|
%
|
|
Commercial real estate
|
28,544
|
|
|
28,110
|
|
|
434
|
|
2
|
%
|
|
|||
Equipment lease financing
|
7,061
|
|
|
7,155
|
|
|
(94
|
)
|
(1
|
)%
|
|
|||
Total commercial lending
|
184,736
|
|
|
160,602
|
|
|
24,134
|
|
15
|
%
|
|
|||
Consumer lending
|
|
|
|
|
|
|
|
|
|
|||||
Home equity
|
25,081
|
|
|
25,085
|
|
|
(4
|
)
|
—
|
|
|
|||
Residential real estate
|
22,250
|
|
|
21,821
|
|
|
429
|
|
2
|
%
|
|
|||
Automobile
|
17,194
|
|
|
16,754
|
|
|
440
|
|
3
|
%
|
|
|||
Credit card
|
7,132
|
|
|
7,308
|
|
|
(176
|
)
|
(2
|
)%
|
|
|||
Education
|
3,247
|
|
|
3,336
|
|
|
(89
|
)
|
(3
|
)%
|
|
|||
Other consumer
|
5,003
|
|
|
4,937
|
|
|
66
|
|
1
|
%
|
|
|||
Total consumer lending
|
79,907
|
|
|
79,241
|
|
|
666
|
|
1
|
%
|
|
|||
Total loans
|
$
|
264,643
|
|
|
$
|
239,843
|
|
|
$
|
24,800
|
|
10
|
%
|
|
(a)
|
Ratings percentages allocated based on amortized cost.
|
(b)
|
Amortized cost is presented net of applicable ACL of $2 million at March 31, 2020 in accordance with the adoption of the CECL accounting standard. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies for additional detail on the adoption of this ASU.
|
(c)
|
Collateralized primarily by retail properties, office buildings, lodging properties and multifamily housing.
|
(d)
|
Collateralized primarily by corporate debt, government guaranteed education loans and other consumer credit products.
|
(e)
|
Includes state and municipal securities.
|
(f)
|
Includes available for sale and held to maturity securities, which are recorded on our balance sheet at fair value and amortized cost, respectively.
|
March 31, 2020
|
Years
|
|
|
Agency residential mortgage-backed
|
3.0
|
|
|
Non-agency residential mortgage-backed
|
6.2
|
|
|
Agency commercial mortgage-backed
|
3.6
|
|
|
Non-agency commercial mortgage-backed
|
2.9
|
|
|
Asset-backed
|
1.9
|
|
|
|
March 31
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing
|
$
|
81,614
|
|
|
$
|
72,779
|
|
|
$
|
8,835
|
|
12
|
%
|
|
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|||||
Money market
|
54,039
|
|
|
54,115
|
|
|
(76
|
)
|
—
|
|
|
|||
Demand
|
74,457
|
|
|
71,692
|
|
|
2,765
|
|
4
|
%
|
|
|||
Savings
|
72,654
|
|
|
68,291
|
|
|
4,363
|
|
6
|
%
|
|
|||
Time deposits
|
22,440
|
|
|
21,663
|
|
|
777
|
|
4
|
%
|
|
|||
Total interest-bearing deposits
|
223,590
|
|
|
215,761
|
|
|
7,829
|
|
4
|
%
|
|
|||
Total deposits
|
305,204
|
|
|
288,540
|
|
|
16,664
|
|
6
|
%
|
|
|||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|||||
FHLB borrowings
|
23,491
|
|
|
16,341
|
|
|
7,150
|
|
44
|
%
|
|
|||
Bank notes and senior debt
|
31,438
|
|
|
29,010
|
|
|
2,428
|
|
8
|
%
|
|
|||
Subordinated debt
|
6,475
|
|
|
6,134
|
|
|
341
|
|
6
|
%
|
|
|||
Other
|
11,995
|
|
|
8,778
|
|
|
3,217
|
|
37
|
%
|
|
|||
Total borrowed funds
|
73,399
|
|
|
60,263
|
|
|
13,136
|
|
22
|
%
|
|
|||
Total funding sources
|
$
|
378,603
|
|
|
$
|
348,803
|
|
|
$
|
29,800
|
|
9
|
%
|
|
•
|
Retail Banking
|
•
|
Corporate & Institutional Banking
|
•
|
Asset Management Group
|
•
|
BlackRock
|
(Unaudited)
|
|
|
|
|
|
|
|
|||||||
Three months ended March 31
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
2019
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
1,456
|
|
|
$
|
1,349
|
|
|
$
|
107
|
|
8
|
%
|
|
Noninterest income
|
788
|
|
|
595
|
|
|
193
|
|
32
|
%
|
|
|||
Total revenue
|
2,244
|
|
|
1,944
|
|
|
300
|
|
15
|
%
|
|
|||
Provision for credit losses
|
445
|
|
|
128
|
|
|
317
|
|
248
|
%
|
|
|||
Noninterest expense
|
1,536
|
|
|
1,468
|
|
|
68
|
|
5
|
%
|
|
|||
Pretax earnings
|
263
|
|
|
348
|
|
|
(85
|
)
|
(24
|
)%
|
|
|||
Income taxes
|
62
|
|
|
84
|
|
|
(22
|
)
|
(26
|
)%
|
|
|||
Earnings
|
$
|
201
|
|
|
$
|
264
|
|
|
$
|
(63
|
)
|
(24
|
)%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans held for sale
|
$
|
779
|
|
|
$
|
441
|
|
|
$
|
338
|
|
77
|
%
|
|
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer lending
|
|
|
|
|
|
|
|
|||||||
Home equity
|
$
|
22,736
|
|
|
$
|
22,990
|
|
|
$
|
(254
|
)
|
(1
|
)%
|
|
Residential real estate
|
17,964
|
|
|
15,034
|
|
|
2,930
|
|
19
|
%
|
|
|||
Automobile
|
17,096
|
|
|
14,608
|
|
|
2,488
|
|
17
|
%
|
|
|||
Credit cards
|
7,207
|
|
|
6,204
|
|
|
1,003
|
|
16
|
%
|
|
|||
Education
|
3,343
|
|
|
3,816
|
|
|
(473
|
)
|
(12
|
)%
|
|
|||
Other
|
2,533
|
|
|
2,068
|
|
|
465
|
|
22
|
%
|
|
|||
Total consumer lending
|
70,879
|
|
|
64,720
|
|
|
6,159
|
|
10
|
%
|
|
|||
Commercial and commercial real estate
|
10,524
|
|
|
10,461
|
|
|
63
|
|
1
|
%
|
|
|||
Total loans
|
$
|
81,403
|
|
|
$
|
75,181
|
|
|
$
|
6,222
|
|
8
|
%
|
|
Total assets
|
$
|
97,062
|
|
|
$
|
91,255
|
|
|
$
|
5,807
|
|
6
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
32,225
|
|
|
$
|
30,389
|
|
|
$
|
1,836
|
|
6
|
%
|
|
Interest-bearing demand
|
42,865
|
|
|
42,477
|
|
|
388
|
|
1
|
%
|
|
|||
Money market
|
22,866
|
|
|
26,773
|
|
|
(3,907
|
)
|
(15
|
)%
|
|
|||
Savings
|
62,781
|
|
|
53,100
|
|
|
9,681
|
|
18
|
%
|
|
|||
Certificates of deposit
|
12,233
|
|
|
12,381
|
|
|
(148
|
)
|
(1
|
)%
|
|
|||
Total deposits
|
$
|
172,970
|
|
|
$
|
165,120
|
|
|
$
|
7,850
|
|
5
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
.84
|
%
|
|
1.17
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
35
|
%
|
|
31
|
%
|
|
|
|
|
|||||
Efficiency
|
68
|
%
|
|
76
|
%
|
|
|
|
|
Three months ended March 31
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Supplemental Noninterest Income Information
|
|
|
|
|
|
|
|
|||||||
Consumer services
|
$
|
372
|
|
|
$
|
366
|
|
|
$
|
6
|
|
2
|
%
|
|
Residential mortgage
|
$
|
210
|
|
|
$
|
65
|
|
|
$
|
145
|
|
223
|
%
|
|
Service charges on deposits
|
$
|
166
|
|
|
$
|
162
|
|
|
$
|
4
|
|
2
|
%
|
|
Residential Mortgage Information
|
|
|
|
|
|
|
|
|||||||
Residential mortgage servicing statistics (in billions, except as noted) (a)
|
|
|
|
|
|
|
|
|||||||
Serviced portfolio balance (b)
|
$
|
118
|
|
|
$
|
123
|
|
|
$
|
(5
|
)
|
(4
|
)%
|
|
Serviced portfolio acquisitions
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
1
|
|
100
|
%
|
|
MSR asset value (b)
|
$
|
0.6
|
|
|
$
|
1.1
|
|
|
$
|
(.5
|
)
|
(45
|
)%
|
|
MSR capitalization value (in basis points) (b)
|
51
|
|
|
92
|
|
|
(41
|
)
|
(45
|
)%
|
|
|||
Servicing income: (in millions)
|
|
|
|
|
|
|
|
|||||||
Servicing fees, net (c)
|
$
|
44
|
|
|
$
|
53
|
|
|
$
|
(9
|
)
|
(17
|
)%
|
|
Mortgage servicing rights valuation, net of economic hedge
|
$
|
101
|
|
|
$
|
(9
|
)
|
|
$
|
110
|
|
*
|
|
|
Residential mortgage loan statistics
|
|
|
|
|
|
|
|
|||||||
Loan origination volume (in billions)
|
$
|
3.2
|
|
|
$
|
1.7
|
|
|
$
|
1.5
|
|
88
|
%
|
|
Loan sale margin percentage
|
3.16
|
%
|
|
2.35
|
%
|
|
|
|
|
|||||
Percentage of originations represented by:
|
|
|
|
|
|
|
|
|||||||
Purchase volume (d)
|
36
|
%
|
|
56
|
%
|
|
|
|
|
|||||
Refinance volume
|
64
|
%
|
|
44
|
%
|
|
|
|
|
|||||
Other Information (b)
|
|
|
|
|
|
|
|
|||||||
Customer-related statistics (average)
|
|
|
|
|
|
|
|
|||||||
Non-teller deposit transactions (e)
|
59
|
%
|
|
57
|
%
|
|
|
|
|
|||||
Digital consumer customers (f)
|
71
|
%
|
|
68
|
%
|
|
|
|
|
|||||
Credit-related statistics
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (g)
|
$
|
1,011
|
|
|
$
|
1,109
|
|
|
$
|
(98
|
)
|
(9
|
)%
|
|
Net charge-offs - loans and leases
|
$
|
166
|
|
|
$
|
132
|
|
|
$
|
34
|
|
26
|
%
|
|
Other statistics
|
|
|
|
|
|
|
|
|||||||
ATMs
|
9,048
|
|
|
9,112
|
|
|
(64
|
)
|
(1
|
)%
|
|
|||
Branches (h)
|
2,277
|
|
|
2,347
|
|
|
(70
|
)
|
(3
|
)%
|
|
|||
Brokerage account client assets (in billions) (i)
|
$
|
49
|
|
|
$
|
51
|
|
|
$
|
(2
|
)
|
(4
|
)%
|
|
(a)
|
Represents mortgage loan servicing balances for third parties and the related income.
|
(b)
|
Presented as of March 31, except for customer-related statistics, which are averages for the three months ended, and net charge-offs, which are for the three 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 payments, prepayments, and loans that were paid down or paid off during the period.
|
(d)
|
Mortgages with borrowers as part of residential real estate purchase transactions.
|
(e)
|
Percentage of total consumer and business banking deposit transactions processed at an ATM or through our mobile banking application.
|
(f)
|
Represents consumer checking relationships that process the majority of their transactions through non-teller channels.
|
(g)
|
Primarily nonperforming loans of $1.0 billion for both March 31, 2020 and March 31, 2019.
|
(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 primarily as a result of growth in nonconforming residential mortgage loans.
|
•
|
Average auto loans increased primarily due to strong new indirect auto loan volumes, including in our Southeast and expansion markets, as well as growth in direct auto loans.
|
•
|
Average credit card balances increased as we continued to focus on our long-term objective of deepening penetration within our existing customer base as well as new client acquisition.
|
•
|
Average education loans decreased driven by a decline in the runoff portfolio of government guaranteed education loans.
|
•
|
Average unsecured installment loans increased primarily driven by growth in originations through digital channels.
|
•
|
Average home equity loans decreased as paydowns and payoffs on loans exceeded new originated volume.
|
•
|
Approximately 71% of consumer customers used non-teller channels for the majority of their transactions in the first three months of 2020 compared with 68% for the same period in 2019.
|
•
|
Deposit transactions via ATM and mobile channels increased to 59% of total deposit transactions in the first three months of 2020 from 57% for the same period in 2019.
|
(a)
|
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)
|
Amounts are reported in net interest income and noninterest income.
|
(c)
|
Represents other noninterest income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, originations fees, gains on sale of loans held for sale and net interest income on loans held for sale.
|
(d)
|
Represents net interest income and noninterest income (primarily in corporate service fees) from loan servicing net of reduction in commercial mortgage servicing rights due to amortization expense and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
|
(e)
|
Amounts are reported in corporate service fees.
|
(f)
|
As of March 31.
|
(g)
|
Primarily nonperforming loans of $.5 billion and $.4 billion at March 31, 2020 and March 31, 2019, respectively.
|
•
|
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 reflecting strong new production and increased utilization in asset-backed financing, and increased lending to large and mid-sized corporate clients.
|
•
|
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 primarily due to new originations, partially offset by payoffs.
|
•
|
PNC Real Estate provides banking, financing and servicing solutions for commercial real estate clients across the country. Average loans for this business increased primarily driven by higher commercial mortgage balances, partially offset by loan payoffs.
|
•
|
Commercial Banking provides lending, treasury management and capital markets-related products and services to smaller corporations and businesses. Average loans for this business decreased as portfolio runoff outpaced new originations.
|
(Unaudited)
|
|
|
|
|
|
|
|
|||||||
Three months ended March 31
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
2019
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
88
|
|
|
$
|
70
|
|
|
$
|
18
|
|
26
|
%
|
|
Noninterest income
|
204
|
|
|
217
|
|
|
(13
|
)
|
(6
|
)%
|
|
|||
Total revenue
|
292
|
|
|
287
|
|
|
5
|
|
2
|
%
|
|
|||
Provision for credit losses
|
3
|
|
|
(1
|
)
|
|
4
|
|
*
|
|
|
|||
Noninterest expense
|
219
|
|
|
230
|
|
|
(11
|
)
|
(5
|
)%
|
|
|||
Pretax earnings
|
70
|
|
|
58
|
|
|
12
|
|
21
|
%
|
|
|||
Income taxes
|
16
|
|
|
13
|
|
|
3
|
|
23
|
%
|
|
|||
Earnings
|
$
|
54
|
|
|
$
|
45
|
|
|
$
|
9
|
|
20
|
%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer lending
|
|
|
|
|
|
|
|
|||||||
Residential real estate
|
$
|
2,385
|
|
|
$
|
1,723
|
|
|
662
|
|
38
|
%
|
|
|
Other
|
4,052
|
|
|
4,362
|
|
|
(310
|
)
|
(7
|
)%
|
|
|||
Total consumer lending
|
6,437
|
|
|
6,085
|
|
|
352
|
|
6
|
%
|
|
|||
Commercial and commercial real estate
|
856
|
|
|
752
|
|
|
104
|
|
14
|
%
|
|
|||
Total loans
|
$
|
7,293
|
|
|
$
|
6,837
|
|
|
$
|
456
|
|
7
|
%
|
|
Total assets
|
$
|
7,801
|
|
|
$
|
7,259
|
|
|
$
|
542
|
|
7
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
1,468
|
|
|
$
|
1,388
|
|
|
$
|
80
|
|
6
|
%
|
|
Interest-bearing demand
|
6,850
|
|
|
3,076
|
|
|
3,774
|
|
123
|
%
|
|
|||
Money market
|
1,709
|
|
|
2,036
|
|
|
(327
|
)
|
(16
|
)%
|
|
|||
Savings
|
7,197
|
|
|
5,723
|
|
|
1,474
|
|
26
|
%
|
|
|||
Other
|
847
|
|
|
697
|
|
|
150
|
|
22
|
%
|
|
|||
Total deposits
|
$
|
18,071
|
|
|
$
|
12,920
|
|
|
$
|
5,151
|
|
40
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
2.81
|
%
|
|
2.51
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
70
|
%
|
|
76
|
%
|
|
|
|
|
|||||
Efficiency
|
75
|
%
|
|
80
|
%
|
|
|
|
|
|||||
Supplemental Noninterest Income Information
|
|
|
|
|
|
|
|
|||||||
Asset management fees
|
$
|
201
|
|
|
$
|
212
|
|
|
$
|
(11
|
)
|
(5
|
)%
|
|
Other Information
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (a) (b)
|
$
|
34
|
|
|
$
|
48
|
|
|
$
|
(14
|
)
|
(29
|
)%
|
|
Net charge-offs - loans and leases
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
(200
|
)%
|
|
Client Assets Under Administration (in billions) (a) (c)
|
|
|
|
|
|
|
|
|||||||
Discretionary client assets under management
|
$
|
136
|
|
|
$
|
158
|
|
|
$
|
(22
|
)
|
(14
|
)%
|
|
Nondiscretionary client assets under administration
|
128
|
|
|
130
|
|
|
(2
|
)
|
(2
|
)%
|
|
|||
Total
|
$
|
264
|
|
|
$
|
288
|
|
|
$
|
(24
|
)
|
(8
|
)%
|
|
Discretionary client assets under management
|
|
|
|
|
|
|
|
|||||||
Personal
|
$
|
84
|
|
|
$
|
95
|
|
|
$
|
(11
|
)
|
(12
|
)%
|
|
Institutional
|
52
|
|
|
63
|
|
|
(11
|
)
|
(17
|
)%
|
|
|||
Total
|
$
|
136
|
|
|
$
|
158
|
|
|
$
|
(22
|
)
|
(14
|
)%
|
|
(a)
|
As of March 31.
|
(b)
|
Primarily nonperforming loans of $34 million at March 31, 2020 and $47 million at March 31, 2019.
|
(c)
|
Excludes brokerage account client assets.
|
(Unaudited)
|
|
|
|
||||
Three months ended March 31
|
|
|
|
||||
Dollars in millions
|
2020
|
2019
|
|
||||
Business segment earnings (a)
|
$
|
157
|
|
$
|
197
|
|
|
PNC’s economic interest in BlackRock (b)
|
22
|
%
|
22
|
%
|
|
(a)
|
Represents our share of BlackRock’s reported GAAP earnings net of income taxes on those earnings incurred by us.
|
(b)
|
At March 31.
|
In billions
|
March 31, 2020
|
|
December 31, 2019
|
|
|
||
Carrying value of our investment in BlackRock (c)
|
$
|
8.7
|
|
$
|
8.7
|
|
|
Market value of our investment in BlackRock (d)
|
$
|
15.3
|
|
$
|
17.5
|
|
|
(c)
|
We account for our investment in BlackRock under the equity method of accounting, exclusive of a related deferred tax liability of $1.8 billion for both March 31, 2020 and December 31, 2019, respectively. Our voting interest in BlackRock common stock was approximately 22% at March 31, 2020.
|
(d)
|
Does not include liquidity discount.
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
$
|
27,225
|
|
|
18
|
%
|
|
|
$
|
21,540
|
|
|
17
|
%
|
|
Retail/wholesale trade
|
24,408
|
|
|
16
|
|
|
|
21,565
|
|
|
17
|
|
|
||
Service providers
|
19,411
|
|
|
13
|
|
|
|
16,112
|
|
|
13
|
|
|
||
Real estate related (a)
|
14,843
|
|
|
10
|
|
|
|
12,346
|
|
|
10
|
|
|
||
Financial services
|
13,473
|
|
|
9
|
|
|
|
11,318
|
|
|
9
|
|
|
||
Health care
|
9,238
|
|
|
6
|
|
|
|
8,035
|
|
|
6
|
|
|
||
Transportation and warehousing
|
8,160
|
|
|
5
|
|
|
|
7,474
|
|
|
6
|
|
|
||
Other industries
|
32,373
|
|
|
23
|
|
|
|
26,947
|
|
|
22
|
|
|
||
Total commercial loans
|
$
|
149,131
|
|
|
100
|
%
|
|
|
$
|
125,337
|
|
|
100
|
%
|
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
4,406
|
|
|
15
|
%
|
|
|
$
|
4,393
|
|
|
16
|
%
|
|
Florida
|
2,651
|
|
|
9
|
|
|
|
2,557
|
|
|
9
|
|
|
||
Texas
|
1,844
|
|
|
6
|
|
|
|
1,717
|
|
|
6
|
|
|
||
Maryland
|
1,743
|
|
|
6
|
|
|
|
1,889
|
|
|
7
|
|
|
||
Virginia
|
1,509
|
|
|
5
|
|
|
|
1,547
|
|
|
6
|
|
|
||
Pennsylvania
|
1,341
|
|
|
5
|
|
|
|
1,310
|
|
|
4
|
|
|
||
Ohio
|
1,265
|
|
|
4
|
|
|
|
1,307
|
|
|
4
|
|
|
||
New Jersey
|
1,159
|
|
|
4
|
|
|
|
1,106
|
|
|
4
|
|
|
||
Illinois
|
1,028
|
|
|
4
|
|
|
|
1,001
|
|
|
4
|
|
|
||
North Carolina
|
997
|
|
|
4
|
|
|
|
1,015
|
|
|
4
|
|
|
||
Other
|
10,601
|
|
|
38
|
|
|
|
10,268
|
|
|
36
|
|
|
||
Total commercial real estate loans
|
$
|
28,544
|
|
|
100
|
%
|
|
|
$
|
28,110
|
|
|
100
|
%
|
|
Property Type
|
|
|
|
|
|
|
|
|
|
||||||
Multifamily
|
$
|
9,123
|
|
|
32
|
%
|
|
|
$
|
9,003
|
|
|
32
|
%
|
|
Office
|
7,794
|
|
|
27
|
|
|
|
7,641
|
|
|
27
|
|
|
||
Retail
|
3,599
|
|
|
13
|
|
|
|
3,702
|
|
|
13
|
|
|
||
Industrial/Warehouse
|
2,169
|
|
|
8
|
|
|
|
2,003
|
|
|
7
|
|
|
||
Hotel/Motel
|
1,892
|
|
|
7
|
|
|
|
1,813
|
|
|
7
|
|
|
||
Senior Housing
|
1,238
|
|
|
4
|
|
|
|
1,123
|
|
|
4
|
|
|
||
Mixed Use
|
871
|
|
|
3
|
|
|
|
943
|
|
|
3
|
|
|
||
Other
|
1,858
|
|
|
6
|
|
|
|
1,882
|
|
|
7
|
|
|
||
Total commercial real estate loans
|
$
|
28,544
|
|
|
100
|
%
|
|
|
$
|
28,110
|
|
|
100
|
%
|
|
•
|
Non-real estate related
|
◦
|
Leisure recreation: restaurants, casinos, hotels, convention centers
|
◦
|
Non-essential retail: retail excluding auto, gas, staples
|
◦
|
Healthcare facilities: elective, private practices
|
◦
|
Leisure travel: cruise, airlines, other travel/transportation
|
◦
|
Consumer services: religious organizations, childcare
|
◦
|
Other impacted areas: shipping, senior living, specialty education
|
•
|
Real estate related
|
◦
|
Non-essential retail and restaurants: malls, lifestyle centers, outlets, restaurants
|
◦
|
Hotel: full service, limited service, extended stay
|
◦
|
Senior housing: assisted living, independent living
|
•
|
Non-essential retail loans outstanding totaled $2.5 billion, 60% of which were asset-based loans;
|
•
|
Restaurant loan outstanding balances were $1.5 billion; and
|
•
|
Cruise line and commercial airline loan outstanding balances were less than $600 million.
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
Pennsylvania
|
$
|
5,778
|
|
|
23
|
%
|
|
|
$
|
5,812
|
|
|
23
|
%
|
|
New Jersey
|
3,729
|
|
|
15
|
|
|
|
3,728
|
|
|
15
|
|
|
||
Ohio
|
2,893
|
|
|
12
|
|
|
|
2,899
|
|
|
12
|
|
|
||
Illinois
|
1,541
|
|
|
6
|
|
|
|
1,544
|
|
|
6
|
|
|
||
Florida
|
1,431
|
|
|
6
|
|
|
|
1,340
|
|
|
5
|
|
|
||
Maryland
|
1,429
|
|
|
6
|
|
|
|
1,420
|
|
|
6
|
|
|
||
Michigan
|
1,404
|
|
|
6
|
|
|
|
1,371
|
|
|
5
|
|
|
||
North Carolina
|
1,098
|
|
|
4
|
|
|
|
1,092
|
|
|
4
|
|
|
||
Kentucky
|
985
|
|
|
4
|
|
|
|
990
|
|
|
4
|
|
|
||
Virginia
|
835
|
|
|
3
|
|
|
|
810
|
|
|
3
|
|
|
||
Other
|
3,958
|
|
|
15
|
|
|
|
4,079
|
|
|
17
|
|
|
||
Total home equity loans
|
$
|
25,081
|
|
|
100
|
%
|
|
|
$
|
25,085
|
|
|
100
|
%
|
|
Lien type
|
|
|
|
|
|
|
|
|
|
||||||
1st lien
|
|
|
60
|
%
|
|
|
|
|
59
|
%
|
|
||||
2nd lien
|
|
|
40
|
|
|
|
|
|
41
|
|
|
||||
Total
|
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
7,343
|
|
|
33
|
%
|
|
|
$
|
6,800
|
|
|
31
|
%
|
|
New Jersey
|
1,786
|
|
|
8
|
|
|
|
1,779
|
|
|
8
|
|
|
||
Florida
|
1,550
|
|
|
7
|
|
|
|
1,580
|
|
|
7
|
|
|
||
Pennsylvania
|
1,110
|
|
|
5
|
|
|
|
1,113
|
|
|
5
|
|
|
||
Illinois
|
1,076
|
|
|
5
|
|
|
|
1,118
|
|
|
5
|
|
|
||
New York
|
993
|
|
|
4
|
|
|
|
1,008
|
|
|
5
|
|
|
||
Maryland
|
898
|
|
|
4
|
|
|
|
923
|
|
|
4
|
|
|
||
Virginia
|
887
|
|
|
4
|
|
|
|
868
|
|
|
4
|
|
|
||
North Carolina
|
863
|
|
|
4
|
|
|
|
877
|
|
|
4
|
|
|
||
Washington
|
782
|
|
|
4
|
|
|
|
646
|
|
|
3
|
|
|
||
Other
|
4,962
|
|
|
22
|
|
|
|
5,109
|
|
|
24
|
|
|
||
Total residential real estate loans
|
$
|
22,250
|
|
|
100
|
%
|
|
|
$
|
21,821
|
|
|
100
|
%
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
|
Change
|
|||||||
Dollars in millions
|
$
|
|
%
|
||||||||||
Nonperforming loans
|
|
|
|
|
|
|
|||||||
Commercial lending
|
$
|
566
|
|
$
|
501
|
|
|
$
|
65
|
|
|
13
|
%
|
Consumer lending (a)
|
1,078
|
|
1,134
|
|
|
(56
|
)
|
|
(5
|
)%
|
|||
Total nonperforming loans
|
1,644
|
|
1,635
|
|
|
9
|
|
|
1
|
%
|
|||
OREO and foreclosed assets
|
111
|
|
117
|
|
|
(6
|
)
|
|
(5
|
)%
|
|||
Total nonperforming assets
|
$
|
1,755
|
|
$
|
1,752
|
|
|
$
|
3
|
|
|
—
|
|
TDRs included in nonperforming loans
|
$
|
767
|
|
$
|
843
|
|
|
$
|
(76
|
)
|
|
(9
|
)%
|
Percentage of total nonperforming loans
|
47
|
%
|
52
|
%
|
|
|
|
|
|||||
Nonperforming loans to total loans
|
.62
|
%
|
.68
|
%
|
|
|
|
|
|||||
Nonperforming assets to total loans, OREO and foreclosed assets
|
.66
|
%
|
.73
|
%
|
|
|
|
|
|||||
Nonperforming assets to total assets
|
.39
|
%
|
.43
|
%
|
|
|
|
|
|||||
Allowance for credit losses - loans and leases to total nonperforming loans (b)
|
240
|
%
|
168
|
%
|
|
|
|
|
(a)
|
Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
|
(b)
|
Ratio at March 31, 2020 reflects the transition impact on our allowance for loans and leases from the adoption of the CECL standard along with the increases in reserves during the first quarter of 2020 due to the significant economic impact of COVID-19 and loan growth.
|
In millions
|
|
2020
|
|
|
2019
|
|
|
||
January 1
|
|
$
|
1,752
|
|
|
$
|
1,808
|
|
|
New nonperforming assets
|
|
391
|
|
|
287
|
|
|
||
Charge-offs and valuation adjustments
|
|
(145
|
)
|
|
(164
|
)
|
|
||
Principal activity, including paydowns and payoffs
|
|
(158
|
)
|
|
(92
|
)
|
|
||
Asset sales and transfers to loans held for sale
|
|
(20
|
)
|
|
(13
|
)
|
|
||
Returned to performing status
|
|
(65
|
)
|
|
(41
|
)
|
|
||
March 31
|
|
$
|
1,755
|
|
|
$
|
1,785
|
|
|
|
|
Amount
|
|
|
|
Percentage of Total Loans Outstanding
|
|
|||||||||||||||
|
|
March 31
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
March 31
2020 |
|
|
December 31
2019 |
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|
||||||||||||||||
Early stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 30 to 59 days
|
|
$
|
688
|
|
|
$
|
661
|
|
|
$
|
27
|
|
|
4
|
%
|
|
.26
|
%
|
|
.28
|
%
|
|
Accruing loans past due 60 to 89 days
|
|
261
|
|
|
258
|
|
|
3
|
|
|
1
|
%
|
|
.10
|
%
|
|
.11
|
%
|
|
|||
Total
|
|
949
|
|
|
919
|
|
|
30
|
|
|
3
|
%
|
|
.36
|
%
|
|
.38
|
%
|
|
|||
Late stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 90 days or more
|
|
534
|
|
|
585
|
|
|
(51
|
)
|
|
(9
|
)%
|
|
.20
|
%
|
|
.24
|
%
|
|
|||
Total
|
|
$
|
1,483
|
|
|
$
|
1,504
|
|
|
$
|
(21
|
)
|
|
(1
|
)%
|
|
.56
|
%
|
|
.63
|
%
|
|
(a)
|
Past due loan amounts include government insured or guaranteed loans of $.5 billion at March 31, 2020 and $.6 billion at December 31, 2019. Additionally, in connection with the adoption of the CECL standard, past due loan amounts at March 31, 2020 include purchased credit deteriorated loans totaling $.1 billion.
|
|
|
March 31
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|||||||||||
Total commercial lending
|
|
$
|
349
|
|
|
$
|
361
|
|
|
$
|
(12
|
)
|
|
(3
|
)%
|
|
Total consumer lending
|
|
1,191
|
|
|
1,303
|
|
|
(112
|
)
|
|
(9
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,540
|
|
|
$
|
1,664
|
|
|
$
|
(124
|
)
|
|
(7
|
)%
|
|
Nonperforming
|
|
$
|
767
|
|
|
$
|
843
|
|
|
$
|
(76
|
)
|
|
(9
|
)%
|
|
Accruing (b)
|
|
773
|
|
|
821
|
|
|
(48
|
)
|
|
(6
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,540
|
|
|
$
|
1,664
|
|
|
$
|
(124
|
)
|
|
(7
|
)%
|
|
(a)
|
Amounts in table do not include associated valuation allowances.
|
(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,
|
•
|
Changes in market conditions, including regulatory and legal requirements,
|
•
|
Changes in the nature and volume of our portfolio,
|
•
|
Recent credit quality trends,
|
•
|
Recent loss experience in particular portfolios, including specific and unique events,
|
•
|
Recent macro-economic factors that may not be reflected in the forecast information,
|
•
|
Limitations of available data, including historical loss information and recent data such as collateral values,
|
•
|
Model imprecision,
|
•
|
Changes in lending policies and procedures, including changes in loss recognition and mitigation policies and procedures,
|
•
|
Timing of available information, including the performance of first lien positions, and
|
•
|
Other relevant factors.
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
||||||||||||||
Dollars in millions
|
|
Allowance Amount
|
Total Loans
|
% of Total Loans
|
|
Allowance Amount (b)
|
Total Loans
|
% of Total Loans
|
|
||||||||||
Allowance for credit losses - loans and leases
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
$
|
1,596
|
|
$
|
149,131
|
|
1.07
|
%
|
|
$
|
1,489
|
|
$
|
125,337
|
|
1.19
|
%
|
|
Commercial real estate
|
|
269
|
|
28,544
|
|
.94
|
%
|
|
278
|
|
28,110
|
|
.99
|
%
|
|
||||
Equipment lease financing
|
|
114
|
|
7,061
|
|
1.61
|
%
|
|
45
|
|
7,155
|
|
.63
|
%
|
|
||||
Total commercial lending
|
|
1,979
|
|
184,736
|
|
1.07
|
%
|
|
1,812
|
|
160,602
|
|
1.13
|
%
|
|
||||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home equity
|
|
332
|
|
25,081
|
|
1.32
|
%
|
|
87
|
|
25,085
|
|
.35
|
%
|
|
||||
Residential real estate
|
|
18
|
|
22,250
|
|
.08
|
%
|
|
258
|
|
21,821
|
|
1.18
|
%
|
|
||||
Automobile
|
|
377
|
|
17,194
|
|
2.19
|
%
|
|
160
|
|
16,754
|
|
.95
|
%
|
|
||||
Credit card
|
|
746
|
|
7,132
|
|
10.46
|
%
|
|
288
|
|
7,308
|
|
3.94
|
%
|
|
||||
Education
|
|
123
|
|
3,247
|
|
3.79
|
%
|
|
17
|
|
3,336
|
|
.51
|
%
|
|
||||
Other consumer
|
|
369
|
|
5,003
|
|
7.38
|
%
|
|
120
|
|
4,937
|
|
2.43
|
%
|
|
||||
Total consumer lending
|
|
1,965
|
|
79,907
|
|
2.46
|
%
|
|
930
|
|
79,241
|
|
1.17
|
%
|
|
||||
Total
|
|
3,944
|
|
$
|
264,643
|
|
1.49
|
%
|
|
2,742
|
|
$
|
239,843
|
|
1.14
|
%
|
|
||
Allowance for credit losses - unfunded lending related commitments
|
|
450
|
|
|
|
|
318
|
|
|
|
|
||||||||
Allowance for credit losses
|
|
$
|
4,394
|
|
|
|
|
$
|
3,060
|
|
|
|
|
||||||
Allowance for credit losses to total loans (c)
|
|
1.66
|
%
|
|
|
|
1.28
|
%
|
|
|
|
||||||||
Commercial lending
|
|
1.26
|
%
|
|
|
|
1.33
|
%
|
|
|
|
||||||||
Consumer lending
|
|
2.59
|
%
|
|
|
|
1.18
|
%
|
|
|
|
Three months ended March 31
|
|
Gross
Charge-offs
|
|
|
Recoveries
|
|
|
Net Charge-offs /
(Recoveries)
|
|
|
Percent of Average
Loans (Annualized)
|
|
|
|||
Dollars in millions
|
||||||||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
$
|
78
|
|
|
$
|
18
|
|
|
$
|
60
|
|
|
.19
|
%
|
|
Commercial real estate
|
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(.06
|
)%
|
|
|||
Equipment lease financing
|
|
5
|
|
|
2
|
|
|
3
|
|
|
.17
|
%
|
|
|||
Total commercial lending
|
|
83
|
|
|
24
|
|
|
59
|
|
|
.14
|
%
|
|
|||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity
|
|
11
|
|
|
14
|
|
|
(3
|
)
|
|
(.05
|
)%
|
|
|||
Residential real estate
|
|
2
|
|
|
4
|
|
|
(2
|
)
|
|
(.04
|
)%
|
|
|||
Automobile
|
|
84
|
|
|
35
|
|
|
49
|
|
|
1.15
|
%
|
|
|||
Credit card
|
|
78
|
|
|
8
|
|
|
70
|
|
|
3.90
|
%
|
|
|||
Education
|
|
6
|
|
|
2
|
|
|
4
|
|
|
.48
|
%
|
|
|||
Other consumer
|
|
40
|
|
|
5
|
|
|
35
|
|
|
2.83
|
%
|
|
|||
Total consumer lending
|
|
221
|
|
|
68
|
|
|
153
|
|
|
.77
|
%
|
|
|||
Total
|
|
$
|
304
|
|
|
$
|
92
|
|
|
$
|
212
|
|
|
.35
|
%
|
|
2019
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
$
|
25
|
|
|
$
|
14
|
|
|
$
|
11
|
|
|
.04
|
%
|
|
Commercial real estate
|
|
3
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
|||
Equipment lease financing
|
|
3
|
|
|
2
|
|
|
1
|
|
|
.06
|
%
|
|
|||
Total commercial lending
|
|
31
|
|
|
19
|
|
|
12
|
|
|
.03
|
%
|
|
|||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity
|
|
23
|
|
|
18
|
|
|
5
|
|
|
.08
|
%
|
|
|||
Residential real estate
|
|
2
|
|
|
3
|
|
|
(1
|
)
|
|
(.02
|
)%
|
|
|||
Automobile
|
|
58
|
|
|
26
|
|
|
32
|
|
|
.89
|
%
|
|
|||
Credit card
|
|
67
|
|
|
7
|
|
|
60
|
|
|
3.91
|
%
|
|
|||
Education
|
|
6
|
|
|
2
|
|
|
4
|
|
|
.43
|
%
|
|
|||
Other consumer
|
|
28
|
|
|
4
|
|
|
24
|
|
|
2.13
|
%
|
|
|||
Total consumer lending
|
|
184
|
|
|
60
|
|
|
124
|
|
|
.68
|
%
|
|
|||
Total
|
|
$
|
215
|
|
|
$
|
79
|
|
|
$
|
136
|
|
|
.24
|
%
|
|
In billions
|
2020
|
|
|
|
January 1
|
$
|
35.1
|
|
|
Issuances
|
3.5
|
|
|
|
Calls and maturities
|
(2.1
|
)
|
|
|
Other
|
1.4
|
|
|
|
March 31
|
$
|
37.9
|
|
|
Issuance Date
|
Amount
|
Description of Issuance
|
February 25, 2020
|
$1.0 billion
|
$1.0 billion of senior floating rate notes with a maturity date of February 24, 2023. Interest is payable quarterly at the 3-month LIBOR rate, reset quarterly, plus 32.5 basis points, on February 24, May 24, August 24, and November 24, commencing on May 24, 2020.
|
February 25, 2020
|
$500 million
|
$500 million of senior fixed-to-floating rate notes with a maturity date of February 24, 2023. Interest is payable semi-annually at a fixed rate of 1.743% per annum, on February 24 and August 24 of each year, beginning on August 24, 2020. Beginning on February 24, 2022, interest is payable quarterly at the floating rate equal to the 3-month LIBOR rate, reset quarterly, plus 32.3 basis points, on February 24, May 24, August 24, and November 24, commencing on May 24, 2022.
|
•
|
Bank-level capital needs,
|
•
|
Laws and regulations,
|
•
|
Corporate policies,
|
•
|
Contractual restrictions, and
|
•
|
Other factors.
|
Dollars in millions
|
Basel III
March 31, 2020 (a)
|
|
March 31, 2020 (Fully Implemented)
(estimated) (b)
|
|
||||
Common equity Tier 1 capital
|
|
|
|
|
||||
Common stock plus related surplus, net of treasury stock
|
$
|
866
|
|
|
$
|
866
|
|
|
Retained earnings
|
42,730
|
|
|
41,885
|
|
|
||
Goodwill, net of associated deferred tax liabilities
|
(9,027
|
)
|
|
(9,027
|
)
|
|
||
Other disallowed intangibles, net of deferred tax liabilities
|
(210
|
)
|
|
(210
|
)
|
|
||
Other adjustments/(deductions)
|
(220
|
)
|
|
(224
|
)
|
|
||
Total common equity Tier 1 capital before threshold deductions
|
34,139
|
|
|
33,290
|
|
|
||
Total threshold deductions (c)
|
—
|
|
|
—
|
|
|
||
Common equity Tier 1 capital
|
$
|
34,139
|
|
|
$
|
33,290
|
|
|
Additional Tier 1 capital
|
|
|
|
|
||||
Preferred stock plus related surplus
|
3,994
|
|
|
3,994
|
|
|
||
Other adjustments/(deductions)
|
—
|
|
|
—
|
|
|
||
Tier 1 capital
|
$
|
38,133
|
|
|
$
|
37,284
|
|
|
Additional Tier 2 capital
|
|
|
|
|
||||
Qualifying subordinated debt
|
4,249
|
|
|
4,249
|
|
|
||
Trust preferred capital securities
|
40
|
|
|
|
|
|||
Eligible credit reserves includable in Tier 2 capital
|
3,511
|
|
|
4,346
|
|
|
||
Total Basel III capital
|
$
|
45,933
|
|
|
$
|
45,879
|
|
|
Risk-weighted assets
|
|
|
|
|
||||
Basel III standardized approach risk-weighted assets (d)
|
$
|
363,631
|
|
|
$
|
363,651
|
|
|
Average quarterly adjusted total assets
|
$
|
402,018
|
|
|
$
|
401,169
|
|
|
Supplementary leverage exposure
|
$
|
481,144
|
|
|
$
|
481,140
|
|
|
Basel III risk-based capital and leverage ratios (a)(e)
|
|
|
|
|
||||
Common equity Tier 1
|
9.4
|
%
|
|
9.2
|
%
|
|
||
Tier 1
|
10.5
|
%
|
|
10.3
|
%
|
|
||
Total (f)
|
12.6
|
%
|
|
12.6
|
%
|
|
||
Leverage (g)
|
9.5
|
%
|
|
9.3
|
%
|
|
||
Supplementary leverage ratio (h)
|
7.9
|
%
|
|
7.7
|
%
|
|
(a)
|
The ratios are calculated to reflect PNC's election to adopt the CECL optional five-year transition provision.
|
(b)
|
The ratios are calculated to reflect the full impact of CECL and excludes the benefits of phase-ins under the optional transition provision.
|
(c)
|
Based on the Tailoring Rules, effective January 1, 2020 for PNC, the quantitative threshold limits increased, resulting in no deduction as of March 31, 2020.
|
(d)
|
Basel III standardized approach weighted-assets are based on the Basel III standardized approach rules and include credit and market risk-weighted assets.
|
(e)
|
All ratios are calculated using the regulatory capital methodology applicable to PNC and calculated based on the standardized approach.
|
(f)
|
The Basel III Total risk-based capital ratios include nonqualifying trust preferred capital securities of $40 million that are subject to a phase-out period that runs through 2021.
|
(g)
|
Leverage ratio is calculated based on Tier 1 capital divided by Average quarterly adjusted total assets.
|
(h)
|
Supplementary leverage ratio is calculated based on Tier 1 capital divided by Supplementary leverage exposure. PNC and PNC Bank are subject to a 3% minimum supplementary leverage ratio.
|
|
First Quarter 2020
|
|
|
First Quarter 2019
|
|
|
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
|
1.4
|
%
|
|
1.5
|
%
|
|
Effect on net interest income in second year from gradual interest rate change over the
preceding 12 months of:
|
|
|
|
|
||
100 basis point increase
|
6.1
|
%
|
|
4.0
|
%
|
|
Duration of Equity Model (a)
|
|
|
|
|
||
Base case duration of equity (in years)
|
(7.3
|
)
|
|
(3.7
|
)
|
|
Key Period-End Interest Rates
|
|
|
|
|
||
One-month LIBOR
|
.99
|
%
|
|
2.49
|
%
|
|
Three-month LIBOR
|
1.45
|
%
|
|
2.60
|
%
|
|
Three-year swap
|
.46
|
%
|
|
2.31
|
%
|
|
(a)
|
Given the inherent limitations in certain of these measurement tools and techniques, results become less meaningful as interest rates approach zero. Senior management recently approved the suspension of the 100bps decrease in rate shock sensitivities considering the current low rate environment.
|
|
March 31, 2020
|
|
|||||
|
PNC
Economist
|
|
Market
Forward
|
|
Slope
Flattening
|
|
|
First year sensitivity
|
(5.3
|
)%
|
(3.6
|
)%
|
(.6
|
)%
|
|
Second year sensitivity
|
(7.4
|
)%
|
(7.0
|
)%
|
(2.6
|
)%
|
|
•
|
enhancing fallback language in new contracts and reviewing existing legal contracts/agreements to assess fallback language impacts;
|
•
|
making preparations for internal operational readiness;
|
•
|
making necessary enhancements to our infrastructure including systems, models, valuation tools, and processes;
|
•
|
developing and delivering on internal and external LIBOR cessation communication plans;
|
•
|
engaging with our clients, industry working groups, and regulators; and
|
•
|
monitoring developments associated with LIBOR alternatives and industry practices related to LIBOR-indexed instruments.
|
|
March 31
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
|
%
|
|
|
||||||||
BlackRock
|
$
|
8,511
|
|
|
$
|
8,558
|
|
|
$
|
(47
|
)
|
|
(1
|
)%
|
|
Tax credit investments
|
2,134
|
|
|
2,218
|
|
|
(84
|
)
|
|
(4
|
)%
|
|
|||
Private equity and other
|
2,560
|
|
|
2,958
|
|
|
(398
|
)
|
|
(13
|
)%
|
|
|||
Total
|
$
|
13,205
|
|
|
$
|
13,734
|
|
|
$
|
(529
|
)
|
|
(4
|
)%
|
|
•
|
Funding for an additional 13 weeks of unemployment benefits, an additional $600 a week (for up to four months) of unemployment payments, and payments during the first week of an individual’s unemployment on a temporary basis;
|
•
|
Delays in the payment of the employer portion of Social Security taxes otherwise payable through January 1, 2021, with 50% of delayed amounts due by each of December 31, 2021 and December 31, 2022;
|
•
|
An expansion of the ability of corporate taxpayers to take advantage of net operating losses; and
|
•
|
Refundable tax credits for eligible employers against their portion of Social Security taxes equal to 50% of eligible wages paid between March 13, 2020 and December 31, 2020 (up to a maximum of $10,000 per employee) if the employer’s operations were fully or partially suspended by governmental authorities due to the COVID-19 crisis or the employer experienced a significant decline in gross receipts (as measured in the manner specified in the CARES Act).
|
•
|
Main Street Lending Facility, which will purchase up to $600 billion of participations in eligible loans made by U.S. banking organizations to eligible small- and medium-sized U.S. businesses;
|
•
|
Commercial Paper Funding Facility, which will purchase highly rated unsecured and asset-backed commercial paper issued by eligible U.S. issuers;
|
•
|
Primary Market Corporate Credit Facility, which will purchase up to $750 billion (in combination with the Secondary Market Corporate Facility) in corporate bonds and loans issued by eligible, investment grade U.S. issuers;
|
•
|
Secondary Market Corporate Credit Facility, which will purchase up to $750 billion (in combination with the Primary Market Corporate Facility) in investment grade corporate debt issued by eligible U.S issuers or shares of exchange traded funds that primarily invest in investment grade debt of U.S. issuers;
|
•
|
Municipal Liquidity Facility, which will purchase up to $500 billion of certain types of debt obligations issued by states and eligible cities and counties;
|
•
|
Term Asset-Backed Securities Loan Facility, which will purchase up to $100 billion in highly rated asset-backed securities that are backed by specified types of consumer, small business or commercial loans;
|
•
|
Paycheck Protection Program Lending Facility, which will provide lenders funding secured by SBA-guaranteed loans made under the PPP described above;
|
•
|
Primary Dealer Credit Facility, which will provide secured funding to broker-dealers that are registered as primary dealers with the Federal Reserve in exchange for a broad range of collateral; and
|
•
|
Money Market Mutual Fund Liquidity Facility, which is intended to provide liquidity to money market mutual funds by lending to U.S. banking entities in exchange for highly-rated collateral acquired from money market mutual funds.
|
•
|
Fair Value Measurements
|
•
|
Residential and Commercial Mortgage Servicing Rights
|
•
|
Scenario weights and design: Our loss estimates are sensitive to the shape and severity of macroeconomic forecasts and thus
|
•
|
Portfolio volume and mix: Changes to portfolio volume and mix could materially affect our estimates, as CECL reserves
|
•
|
Allowance For Credit Losses in the Credit Risk Management section of this Financial Review, and
|
•
|
Note 1 Accounting Policies, Note 2 Investment Securities and Note 3 Loans in the Notes To Consolidated Financial Statements included in this Report.
|
•
|
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 changing business and economic conditions or legislative or regulatory initiatives.
|
–
|
Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness.
|
–
|
Impacts of tariffs and other trade policies of the U.S. and its global trading partners.
|
–
|
The length and extent of economic contraction as a result of the coronavirus (COVID-19) pandemic.
|
–
|
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 view that:
|
–
|
Our baseline economic forecast is for a severe but short recession in the first half of 2020. Restrictions on movement because of the COVID-19 pandemic have led to a huge drop in consumer spending and a steep drop in output as many workers are unable to get to their jobs. We expect a significant contraction in U.S. real GDP and steep job losses over the next few months and a large increase in the unemployment rate in through mid-2020.
|
–
|
In the baseline forecast, economic growth resumes in the third quarter as consumers start to spend again. Fiscal stimulus and extremely low interest rates support the recovery. Real GDP surpasses its pre-recession peak in the second half of 2021, and growth is well above its long-term trend through 2022.
|
–
|
The baseline forecast assumes that the Federal Open Market Committee keeps the federal funds rate in its current range of 0.00% to 0.25% into 2023.
|
•
|
Given the many unknowns and risks being heavily weighted to the downside, our forward-looking statements are subject to the risk that conditions will be substantially different than we are currently expecting. If efforts to contain COVID-19 are unsuccessful and restrictions on movement last into the third quarter or beyond, the recession would be much longer and much more severe. Ineffective fiscal stimulus, or an extended delay in implementing it, are also major downside risks. The deeper the recession is, and the longer it lasts, the more it will damage consumer fundamentals and sentiment. This could both prolong the recession, and/or make any recovery weaker. Similarly, the recession could damage business fundamentals. And an extended global recession due to COVID-19 would weaken the U.S. recovery. As a result, the outbreak and its consequences, including responsive measures to manage it, have had and are likely to continue to have an adverse effect, possibly materially, on our business and financial performance by adversely affecting, possibly materially, the demand and profitability of our products and services, the valuation of assets and our ability to meet the needs of our customers.
|
•
|
PNC’s ability to take certain capital actions, including returning capital to shareholders, is subject to review by the Federal Reserve Board as part of PNC’s comprehensive capital plan for the applicable period in connection with the Federal Reserve
|
•
|
PNC’s regulatory capital ratios in the future will depend on, among other things, the company’s financial performance, the scope and terms of final capital regulations then in effect and management actions affecting the composition of PNC’s balance sheet. In addition, PNC’s ability to determine, evaluate and forecast regulatory capital ratios, and to take actions (such as capital distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development, validation and regulatory review of related models.
|
•
|
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 to laws and regulations, including changes affecting oversight of the financial services industry, consumer protection, bank capital and liquidity standards, pension, bankruptcy and other industry aspects, and changes in accounting policies and principles.
|
–
|
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 PNC.
|
–
|
Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with governmental agencies.
|
–
|
Impact on business and operating results of any costs 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 and new strategic initiatives. Risks and uncertainties include those presented by the nature of the business acquired and strategic initiative, including in some cases those associated with our entry into new businesses or new geographic or other markets and risks resulting from our inexperience in those new areas, as well as risks and uncertainties related to the acquisition transactions themselves, regulatory issues, and the integration of the acquired businesses into PNC after closing.
|
•
|
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
March 31 |
||||||
In millions, except per share data
|
2020
|
|
|
2019
|
|
||
Interest Income
|
|
|
|
||||
Loans
|
$
|
2,480
|
|
|
$
|
2,602
|
|
Investment securities
|
582
|
|
|
620
|
|
||
Other
|
138
|
|
|
206
|
|
||
Total interest income
|
3,200
|
|
|
3,428
|
|
||
Interest Expense
|
|
|
|
||||
Deposits
|
375
|
|
|
472
|
|
||
Borrowed funds
|
314
|
|
|
481
|
|
||
Total interest expense
|
689
|
|
|
953
|
|
||
Net interest income
|
2,511
|
|
|
2,475
|
|
||
Noninterest Income
|
|
|
|
||||
Asset management
|
382
|
|
|
437
|
|
||
Consumer services
|
377
|
|
|
371
|
|
||
Corporate services
|
526
|
|
|
462
|
|
||
Residential mortgage
|
210
|
|
|
65
|
|
||
Service charges on deposits
|
168
|
|
|
168
|
|
||
Other
|
343
|
|
|
308
|
|
||
Total noninterest income
|
2,006
|
|
|
1,811
|
|
||
Total revenue
|
4,517
|
|
|
4,286
|
|
||
Provision For Credit Losses
|
914
|
|
|
189
|
|
||
Noninterest Expense
|
|
|
|
||||
Personnel
|
1,369
|
|
|
1,414
|
|
||
Occupancy
|
207
|
|
|
215
|
|
||
Equipment
|
287
|
|
|
273
|
|
||
Marketing
|
58
|
|
|
65
|
|
||
Other
|
622
|
|
|
611
|
|
||
Total noninterest expense
|
2,543
|
|
|
2,578
|
|
||
Income before income taxes and noncontrolling interests
|
1,060
|
|
|
1,519
|
|
||
Income taxes
|
145
|
|
|
248
|
|
||
Net income
|
915
|
|
|
1,271
|
|
||
Less: Net income attributable to noncontrolling interests
|
7
|
|
|
10
|
|
||
Preferred stock dividends
|
63
|
|
|
63
|
|
||
Preferred stock discount accretion and redemptions
|
1
|
|
|
1
|
|
||
Net income attributable to common shareholders
|
$
|
844
|
|
|
$
|
1,197
|
|
Earnings Per Common Share
|
|
|
|
||||
Basic
|
$
|
1.96
|
|
|
$
|
2.62
|
|
Diluted
|
$
|
1.95
|
|
|
$
|
2.61
|
|
Average Common Shares Outstanding
|
|
|
|
||||
Basic
|
429
|
|
|
455
|
|
||
Diluted
|
430
|
|
|
456
|
|
Unaudited
In millions
|
|
Three months ended
March 31 |
||||||
2020
|
|
|
2019
|
|
||||
Net income
|
|
$
|
915
|
|
|
$
|
1,271
|
|
Other comprehensive income (loss), before tax and net of reclassifications into Net income:
|
|
|
|
|
||||
Net unrealized gains (losses) on securities without an allowance for credit losses
|
|
1,487
|
|
|
|
|||
Net unrealized gains (losses) on securities with an allowance for credit losses
|
|
(7
|
)
|
|
|
|||
Net unrealized gains (losses) on non-OTTI securities
|
|
|
|
639
|
|
|||
Net unrealized gains (losses) on OTTI securities
|
|
|
|
9
|
|
|||
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
785
|
|
|
100
|
|
||
Pension and other postretirement benefit plan adjustments
|
|
12
|
|
|
145
|
|
||
Other
|
|
(26
|
)
|
|
34
|
|
||
Other comprehensive income (loss), before tax and net of reclassifications into Net income
|
|
2,251
|
|
|
927
|
|
||
Income tax benefit (expense) related to items of other comprehensive income
|
|
(532
|
)
|
|
(207
|
)
|
||
Other comprehensive income (loss), after tax and net of reclassifications into Net income
|
|
1,719
|
|
|
720
|
|
||
Comprehensive income
|
|
2,634
|
|
|
1,991
|
|
||
Less: Comprehensive income attributable to noncontrolling interests
|
|
7
|
|
|
10
|
|
||
Comprehensive income attributable to PNC
|
|
$
|
2,627
|
|
|
$
|
1,981
|
|
Unaudited
|
March 31
2020 |
|
|
December 31
2019 |
|
||
In millions, except par value
|
|||||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
7,493
|
|
|
$
|
5,061
|
|
Interest-earning deposits with banks
|
19,986
|
|
|
23,413
|
|
||
Loans held for sale (a)
|
1,693
|
|
|
1,083
|
|
||
Investment securities – available for sale
|
89,077
|
|
|
69,163
|
|
||
Investment securities – held to maturity (b)
|
1,469
|
|
|
17,661
|
|
||
Loans (a)
|
264,643
|
|
|
239,843
|
|
||
Allowance for credit losses – loan and lease losses (c)
|
(3,944
|
)
|
|
(2,742
|
)
|
||
Net loans
|
260,699
|
|
|
237,101
|
|
||
Equity investments (d)
|
13,205
|
|
|
13,734
|
|
||
Mortgage servicing rights
|
1,082
|
|
|
1,644
|
|
||
Goodwill
|
9,233
|
|
|
9,233
|
|
||
Other (a) (b)
|
41,556
|
|
|
32,202
|
|
||
Total assets
|
$
|
445,493
|
|
|
$
|
410,295
|
|
Liabilities
|
|
|
|
||||
Deposits
|
|
|
|
||||
Noninterest-bearing
|
$
|
81,614
|
|
|
$
|
72,779
|
|
Interest-bearing
|
223,590
|
|
|
215,761
|
|
||
Total deposits
|
305,204
|
|
|
288,540
|
|
||
Borrowed funds
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
23,491
|
|
|
16,341
|
|
||
Bank notes and senior debt
|
31,438
|
|
|
29,010
|
|
||
Subordinated debt
|
6,475
|
|
|
6,134
|
|
||
Other (e)
|
11,995
|
|
|
8,778
|
|
||
Total borrowed funds
|
73,399
|
|
|
60,263
|
|
||
Allowance for credit losses – unfunded lending related commitments (c)
|
450
|
|
|
318
|
|
||
Accrued expenses and other liabilities
|
17,150
|
|
|
11,831
|
|
||
Total liabilities
|
396,203
|
|
|
360,952
|
|
||
Equity
|
|
|
|
||||
Preferred stock (f)
|
|
|
|
||||
Common stock ($5 par value, Authorized 800 shares, issued 542 shares)
|
2,712
|
|
|
2,712
|
|
||
Capital surplus
|
16,288
|
|
|
16,369
|
|
||
Retained earnings
|
41,885
|
|
|
42,215
|
|
||
Accumulated other comprehensive income
|
2,518
|
|
|
799
|
|
||
Common stock held in treasury at cost: 118 and 109 shares
|
(14,140
|
)
|
|
(12,781
|
)
|
||
Total shareholders’ equity
|
49,263
|
|
|
49,314
|
|
||
Noncontrolling interests
|
27
|
|
|
29
|
|
||
Total equity
|
49,290
|
|
|
49,343
|
|
||
Total liabilities and equity
|
$
|
445,493
|
|
|
$
|
410,295
|
|
(a)
|
Our consolidated assets included the following for which we have elected the fair value option: Loans held for sale of $1.5 billion, Loans of $1.1 billion and Other assets of $.1 billion at March 31, 2020 and Loans held for sale of $1.1 billion, Loans of $.7 billion and Other assets of $.1 billion at December 31, 2019.
|
(b)
|
Amounts as of March 31, 2020 are net of the related Allowances for Credit Losses recorded in accordance with the adoption of Accounting Standards Update 2016-13, Financial Instruments - Credit Losses, which totaled $2 million and $19 million for Investment securities and Other assets, respectively. See Recently Adopted Accounting Standards portion of Note 1 Accounting Policies for additional detail on the adoption of this ASU.
|
(c)
|
Amounts as of March 31, 2020 reflect the impact of adopting the CECL accounting standard and our transition from an incurred loss methodology for these reserves to an expected credit loss methodology. Prior period amounts represent Allowance for Loans and Leases (ALLL) under the incurred loss methodology. Refer to Note 1 Accounting Policies in this Report for additional detail on the adoption of this standard.
|
(d)
|
Amounts include our equity investment in BlackRock.
|
(e)
|
Our consolidated liabilities at both March 31, 2020 and December 31, 2019 included Other borrowed funds of $.1 billion for which we have elected the fair value option.
|
(f)
|
Par value less than $.5 million at each date.
|
Unaudited
In millions
|
|
Three months ended
March 31 |
|
||||||
2020
|
|
|
2019
|
|
|
||||
Operating Activities
|
|
|
|
|
|
||||
Net income
|
|
$
|
915
|
|
|
$
|
1,271
|
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities
|
|
|
|
|
|
||||
Provision for credit losses
|
|
914
|
|
|
189
|
|
|
||
Depreciation and amortization
|
|
328
|
|
|
272
|
|
|
||
Deferred income taxes
|
|
(226
|
)
|
|
111
|
|
|
||
Changes in fair value of mortgage servicing rights
|
|
620
|
|
|
210
|
|
|
||
Undistributed earnings of BlackRock
|
|
(56
|
)
|
|
(111
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Trading securities and other short-term investments
|
|
(1,014
|
)
|
|
358
|
|
|
||
Loans held for sale
|
|
(452
|
)
|
|
320
|
|
|
||
Other assets
|
|
(6,912
|
)
|
|
(2,931
|
)
|
|
||
Accrued expenses and other liabilities
|
|
5,376
|
|
|
1,796
|
|
|
||
Other
|
|
(189
|
)
|
|
(84
|
)
|
|
||
Net cash provided (used) by operating activities
|
|
$
|
(696
|
)
|
|
$
|
1,401
|
|
|
Investing Activities
|
|
|
|
|
|
||||
Sales
|
|
|
|
|
|
||||
Securities available for sale
|
|
$
|
5,447
|
|
|
$
|
840
|
|
|
Loans
|
|
314
|
|
|
306
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Securities available for sale
|
|
4,332
|
|
|
2,103
|
|
|
||
Securities held to maturity
|
|
12
|
|
|
510
|
|
|
||
Purchases
|
|
|
|
|
|
||||
Securities available for sale
|
|
(11,889
|
)
|
|
(3,861
|
)
|
|
||
Securities held to maturity
|
|
(4
|
)
|
|
(23
|
)
|
|
||
Loans
|
|
(100
|
)
|
|
(468
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Federal funds sold and resale agreements
|
|
965
|
|
|
4,810
|
|
|
||
Interest-earning deposits with banks
|
|
3,427
|
|
|
(4,368
|
)
|
|
||
Loans
|
|
(25,758
|
)
|
|
(6,085
|
)
|
|
||
Other
|
|
(125
|
)
|
|
213
|
|
|
||
Net cash provided (used) by investing activities
|
|
$
|
(23,379
|
)
|
|
$
|
(6,023
|
)
|
|
Unaudited
In millions
|
|
Three Months Ended
March 31 |
|
||||||
2020
|
|
|
2019
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||||
Net change in
|
|
|
|
|
|
||||
Noninterest-bearing deposits
|
|
$
|
8,857
|
|
|
$
|
(2,337
|
)
|
|
Interest-bearing deposits
|
|
7,829
|
|
|
5,736
|
|
|
||
Federal funds purchased and repurchase agreements
|
|
2,306
|
|
|
2,232
|
|
|
||
Federal Home Loan Bank borrowings
|
|
(400
|
)
|
|
|
|
|
||
Other borrowed funds
|
|
1,044
|
|
|
250
|
|
|
||
Sales/issuances
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
9,060
|
|
|
5,000
|
|
|
||
Bank notes and senior debt
|
|
3,486
|
|
|
2,147
|
|
|
||
Other borrowed funds
|
|
172
|
|
|
397
|
|
|
||
Common and treasury stock
|
|
23
|
|
|
22
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
(1,510
|
)
|
|
(6,000
|
)
|
|
||
Bank notes and senior debt
|
|
(2,100
|
)
|
|
(1,750
|
)
|
|
||
Other borrowed funds
|
|
(172
|
)
|
|
(296
|
)
|
|
||
Acquisition of treasury stock
|
|
(1,522
|
)
|
|
(826
|
)
|
|
||
Preferred stock cash dividends paid
|
|
(63
|
)
|
|
(63
|
)
|
|
||
Common stock cash dividends paid
|
|
(503
|
)
|
|
(436
|
)
|
|
||
Net cash provided (used) by financing activities
|
|
$
|
26,507
|
|
|
$
|
4,076
|
|
|
Net Increase (Decrease) In Cash And Due From Banks And Restricted Cash
|
|
2,432
|
|
|
(546
|
)
|
|
||
Cash and due from banks and restricted cash at beginning of period
|
|
5,061
|
|
|
5,608
|
|
|
||
Cash and due from banks and restricted cash at end of period
|
|
$
|
7,493
|
|
|
$
|
5,062
|
|
|
Cash and due from banks and restricted cash
|
|
|
|
|
|
||||
Cash and due from banks at end of period (unrestricted cash)
|
|
$
|
7,161
|
|
|
$
|
5,062
|
|
|
Restricted cash
|
|
332
|
|
|
|
|
|||
Cash and due from banks and restricted cash at end of period
|
|
$
|
7,493
|
|
|
$
|
5,062
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
||||
Interest paid
|
|
$
|
638
|
|
|
$
|
907
|
|
|
Income taxes paid
|
|
$
|
36
|
|
|
$
|
30
|
|
|
Income taxes refunded
|
|
$
|
5
|
|
|
$
|
2
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
57
|
|
|
$
|
155
|
|
|
Right-of-use assets recognized at adoption of ASU 2016-02
|
|
|
|
$
|
2,004
|
|
|
||
Non-cash Investing and Financing Items
|
|
|
|
|
|
||||
Transfer from loans to loans held for sale, net
|
|
$
|
313
|
|
|
$
|
139
|
|
|
Transfer from loans to foreclosed assets
|
|
$
|
37
|
|
|
$
|
48
|
|
|
Accounting Standards Update (ASU)
|
Description
|
Financial Statement Impact
|
Reference Rate Reform - ASU 2020-04
Issued March 2020
|
• Provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.
• Includes optional expedients related to contract modifications that allow an entity to account for modifications (if certain criteria are met) as if the modifications were only minor (assets within the scope of ASC 310, Receivables), were not substantial (assets within the scope of ASC 470, Debt), and/or did not result in remeasurements or reclassifications (assets within the scope of ASC 842, Leases, and other Topics) of the existing contract.
• Includes optional expedients related to hedging relationships within the scope of ASC 815, Derivatives & Hedging, whereby changes to the critical terms of a hedging relationship do not require dedesignation if certain criteria are met. In addition, potential sources of ineffectiveness as a result of reference rate reform may be disregarded when performing some effectiveness assessments.
• Allows for a one-time election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020.
• Guidance in this ASU is effective as of March 12, 2020 through December 31, 2022.
|
• Adopted March 12, 2020, will apply prospectively.
• As of March 31, 2020, we have not yet elected any optional expedients outlined in this ASU. However, we plan to elect these optional expedients in the future.
|
|
|
ALLL (a)
|
|
ACL (a)
|
||||||
In millions
|
|
December 31, 2019
|
Transition Adjustment
|
January 1, 2020
|
||||||
Allowance (a)
|
|
|
|
|
||||||
Loans and leases
|
|
|
|
|
||||||
Commercial lending
|
|
$
|
1,812
|
|
$
|
(304
|
)
|
$
|
1,508
|
|
Consumer lending
|
|
930
|
|
767
|
|
1,697
|
|
|||
Total loans and leases allowance
|
|
2,742
|
|
463
|
|
3,205
|
|
|||
Unfunded lending related commitments (b)
|
|
318
|
|
179
|
|
497
|
|
|||
Other
|
|
—
|
|
19
|
|
19
|
|
|||
Total allowance
|
|
$
|
3,060
|
|
$
|
661
|
|
$
|
3,721
|
|
|
|
|
|
|
||||||
In millions
|
|
December 31, 2019
|
|
Transition Adjustment
|
|
January 1, 2020
|
|
|||
Impact to retained earnings (c)
|
|
$
|
42,215
|
|
$
|
(671
|
)
|
$
|
41,544
|
|
Commercial lending
|
||
Loans Classified as Nonperforming and Accounted for as Nonaccrual
|
|
• Loans accounted for at amortized cost where:
– The loan is 90 days or more past due.
– The loan is rated substandard or worse due to the determination that full collection of
principal and interest is not probable as demonstrated by the following conditions:
• The collection of principal or interest is 90 days or more past due;
• Reasonable doubt exists as to the certainty of the borrower’s future debt service
ability, according to the terms of the credit arrangement, regardless of whether 90
days have passed or not;
• The borrower has filed or will likely file for bankruptcy;
• The bank advances additional funds to cover principal or interest;
• We are in the process of liquidating a commercial borrower; or
• We are pursuing remedies under a guarantee.
|
Loans Excluded from Nonperforming Classification but Accounted for as Nonaccrual
|
|
• Loans accounted for under the fair value option and full collection of principal and interest
is not probable.
• Loans accounted for at the lower of cost or market less costs to sell (held for sale) and full
collection of principal and interest is not probable.
|
Loans Excluded from Nonperforming Classification and Nonaccrual Accounting
|
|
• Loans that are well secured and in the process of collection.
|
Loan Class
|
|
Probability of Default (PD)
|
Loss Given Default (LGD)
|
Exposure at Default (EAD)
|
Commercial Lending
|
||||
Commercial and Equipment Lease Financing
|
|
• For wholesale obligors: internal risk ratings based on borrower characteristics and industry
• For retail small balance obligors: credit scores, exposure characteristics and industry
|
• Collateral type, collateral value, industry, size and outstanding exposure for secured loans
• Capital structure, industry and size for unsecured loans
• Product type and credit scores
|
• Outstanding balances, contractual maturities and historical prepayment experience
• Product type and historical prepayment experience
|
Commercial Real Estate
|
|
• Property performance metrics and capitalization rates for RSFP
• Internal risk ratings based on borrower characteristics for LRA
|
• Property values and anticipated liquidation costs
|
• Outstanding balances, contractual maturities, historical prepayment experience and contractual extension options
|
Consumer Lending
|
||||
Home Equity and Residential Real Estate
|
|
• Borrower credit scores, delinquency rates, origination vintage, loan-to-value (LTV) ratios and contractual maturity
|
• Collateral characteristics, LTV and costs to sell
|
• Outstanding balances, contractual maturities and historical prepayment experience
|
Automobile
|
|
• Borrower credit scores, borrower income, LTV and contractual maturity
|
• New vs. used, LTV and borrower credit scores
|
• Outstanding balances, contractual maturities and historical prepayment experience
|
Credit Card
|
|
• Borrower credit scores, customer type (individual vs. joint) and months on book
|
• Borrower credit scores
|
• Pay-down curves estimated using borrower behavior segments, payment ratios and borrower credit scores
• Payment ratios are developed using a pro-rata method
|
Education and Other Consumer
|
|
• Net charge-off rates by vintage are used to estimate expected losses in lieu of discrete risk parameters
|
Loan Class
|
|
RSFP - Key Economic Variables
|
Reversion Method
|
LRA Approach
|
Commercial Lending
|
||||
Commercial and Equipment Lease Financing
|
|
• Gross Domestic Product and Gross Domestic Income measures, imports, unemployment rates, House Price Index (HPI), credit spreads, personal income and consumption measures and stock market indices
|
• Immediate reversion
|
• Average parameters determined based on internal and external historical data
• Modeled parameters using long run economic conditions for retail small business obligors
|
Commercial Real Estate
|
|
• Unemployment rates, Commercial Property Price Index, stock market indices /volatility measures, and interest rates
|
• Immediate reversion
|
• Average parameters determined based on internal and external historical data
|
Consumer Lending
|
||||
Home Equity and Residential Real Estate
|
|
• Unemployment rates, HPI and interest rates
|
• Straight-line over 1-3 years based on economic scenario
|
• Modeled parameters using long run economic conditions
|
Automobile
|
|
• Unemployment rates, HPI, personal consumption, interest rates, Manheim used car index and domestic oil prices
|
• Straight-line over 1 year
|
• Average parameters determined based on internal and external historical data
|
Credit Card
|
|
• Unemployment rates, delinquency rates, personal consumption, HPI and housing data
|
• Straight-line over 2 years
|
• Modeled parameters using long run economic conditions
|
Education and Other Consumer
|
|
• Net charge-off rates by vintage are used to estimate expected losses in lieu of discrete risk parameters
|
•
|
For commercial nonperforming loans greater than or equal to a defined dollar threshold, reserves are based on an analysis of the present value of the loan’s expected future cash flows or the fair value of the collateral, if appropriate under our policy for collateral dependent loans. Nonperforming commercial loans below the defined threshold and accruing TDRs are reserved for under a pooled basis.
|
•
|
For consumer nonperforming loans classified as collateral dependent, charge-off and ACL related to recovery of amounts previously charged-off are evaluated through an analysis of the fair value of the collateral less costs to sell.
|
•
|
Industry concentrations and conditions,
|
•
|
Changes in market conditions, including regulatory and legal requirements,
|
•
|
Changes in the nature and volume of our portfolio,
|
•
|
Recent credit quality trends,
|
•
|
Recent loss experience in particular portfolios, including specific and unique events,
|
•
|
Recent macro-economic factors that may not be reflected in the forecast information,
|
•
|
Limitations of available data, including historical loss information and recent data such as collateral values,
|
•
|
Model imprecision,
|
•
|
Changes in lending policies and procedures, including changes in loss recognition and mitigation policies and procedures,
|
•
|
Timing of available information, including the performance of first lien positions, and
|
•
|
Other relevant factors
|
|
|
March 31, 2020 (a)
|
|
|
December 31, 2019
|
||||||||||||||||||||||||||||
In millions
|
|
Amortized
Cost (b)
|
|
|
Unrealized
|
|
Fair
Value
|
|
|
|
Amortized
Cost
|
|
|
Unrealized
|
|
Fair
Value
|
|
||||||||||||||||
Gains
|
|
|
Losses
|
|
|
|
|
Gains
|
|
|
Losses
|
|
|
||||||||||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
|
$
|
16,102
|
|
|
$
|
879
|
|
|
|
|
$
|
16,981
|
|
|
|
$
|
16,150
|
|
|
$
|
382
|
|
|
$
|
(16
|
)
|
|
$
|
16,516
|
|
||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
50,828
|
|
|
1,810
|
|
|
$
|
(10
|
)
|
|
52,628
|
|
|
|
35,847
|
|
|
517
|
|
|
(43
|
)
|
|
36,321
|
|
|||||||
Non-agency
|
|
1,563
|
|
|
142
|
|
|
(62
|
)
|
|
1,643
|
|
|
|
1,515
|
|
|
302
|
|
|
(3
|
)
|
|
1,814
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
3,181
|
|
|
114
|
|
|
(6
|
)
|
|
3,289
|
|
|
|
3,094
|
|
|
42
|
|
|
(18
|
)
|
|
3,118
|
|
||||||||
Non-agency
|
|
4,249
|
|
|
27
|
|
|
(194
|
)
|
|
4,082
|
|
|
|
3,352
|
|
|
29
|
|
|
(9
|
)
|
|
3,372
|
|
||||||||
Asset-backed
|
|
5,339
|
|
|
43
|
|
|
(104
|
)
|
|
5,278
|
|
|
|
5,044
|
|
|
78
|
|
|
(8
|
)
|
|
5,114
|
|
||||||||
Other
|
|
4,962
|
|
|
218
|
|
|
(4
|
)
|
|
5,176
|
|
|
|
2,788
|
|
|
121
|
|
|
(1
|
)
|
|
2,908
|
|
||||||||
Total securities available for sale
|
|
$
|
86,224
|
|
|
$
|
3,233
|
|
|
$
|
(380
|
)
|
|
$
|
89,077
|
|
|
|
$
|
67,790
|
|
|
$
|
1,471
|
|
|
$
|
(98
|
)
|
|
$
|
69,163
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
|
$
|
781
|
|
|
$
|
143
|
|
|
|
|
$
|
924
|
|
|
|
$
|
776
|
|
|
$
|
56
|
|
|
|
|
$
|
832
|
|
||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
14,419
|
|
|
270
|
|
|
$
|
(26
|
)
|
|
14,663
|
|
||||||||||
Non-agency
|
|
|
|
|
|
|
|
|
|
|
|
133
|
|
|
7
|
|
|
|
|
140
|
|
||||||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
|
|
|
|
|
|
|
|
|
|
59
|
|
|
1
|
|
|
|
|
60
|
|
||||||||||||
Non-agency
|
|
|
|
|
|
|
|
|
|
|
|
430
|
|
|
4
|
|
|
|
|
434
|
|
||||||||||||
Asset-backed
|
|
50
|
|
|
|
|
|
$
|
(1
|
)
|
|
49
|
|
|
|
52
|
|
|
|
|
|
|
|
52
|
|
||||||||
Other
|
|
638
|
|
|
33
|
|
|
(23
|
)
|
|
648
|
|
|
|
1,792
|
|
|
85
|
|
|
(14
|
)
|
|
1,863
|
|
||||||||
Total securities held to maturity, net of ACL (c)
|
|
$
|
1,469
|
|
|
$
|
176
|
|
|
$
|
(24
|
)
|
|
$
|
1,621
|
|
|
|
$
|
17,661
|
|
|
$
|
423
|
|
|
$
|
(40
|
)
|
|
$
|
18,044
|
|
|
|
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
|
|
||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
$
|
(3
|
)
|
|
$
|
409
|
|
|
$
|
(7
|
)
|
|
$
|
380
|
|
|
$
|
(10
|
)
|
|
$
|
789
|
|
Non-agency
|
|
(43
|
)
|
|
537
|
|
|
(17
|
)
|
|
77
|
|
|
(60
|
)
|
|
614
|
|
||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(1
|
)
|
|
187
|
|
|
(5
|
)
|
|
436
|
|
|
(6
|
)
|
|
623
|
|
||||||
Non-agency
|
|
(172
|
)
|
|
2,719
|
|
|
(22
|
)
|
|
147
|
|
|
(194
|
)
|
|
2,866
|
|
||||||
Asset-backed
|
|
(75
|
)
|
|
2,815
|
|
|
(25
|
)
|
|
538
|
|
|
(100
|
)
|
|
3,353
|
|
||||||
Other
|
|
(3
|
)
|
|
320
|
|
|
|
|
|
|
(3
|
)
|
|
320
|
|
||||||||
Total securities available for sale
|
|
$
|
(297
|
)
|
|
$
|
6,987
|
|
|
$
|
(76
|
)
|
|
$
|
1,578
|
|
|
$
|
(373
|
)
|
|
$
|
8,565
|
|
|
|
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
|
|
|
||||||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Securities Available for Sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Treasury and government agencies
|
|
$
|
(14
|
)
|
|
$
|
2,451
|
|
|
$
|
(2
|
)
|
|
$
|
607
|
|
|
$
|
(16
|
)
|
|
$
|
3,058
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(6
|
)
|
|
2,832
|
|
|
(37
|
)
|
|
4,659
|
|
|
(43
|
)
|
|
7,491
|
|
|
||||||
Non-agency
|
|
|
|
|
|
(3
|
)
|
|
102
|
|
|
(3
|
)
|
|
102
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
(6
|
)
|
|
852
|
|
|
(12
|
)
|
|
953
|
|
|
(18
|
)
|
|
1,805
|
|
|
||||||
Non-agency
|
|
(4
|
)
|
|
1,106
|
|
|
(5
|
)
|
|
230
|
|
|
(9
|
)
|
|
1,336
|
|
|
||||||
Asset-backed
|
|
(3
|
)
|
|
660
|
|
|
(5
|
)
|
|
561
|
|
|
(8
|
)
|
|
1,221
|
|
|
||||||
Other
|
|
|
|
|
|
(1
|
)
|
|
403
|
|
|
(1
|
)
|
|
403
|
|
|
||||||||
Total securities available for sale
|
|
$
|
(33
|
)
|
|
$
|
7,901
|
|
|
$
|
(65
|
)
|
|
$
|
7,515
|
|
|
$
|
(98
|
)
|
|
$
|
15,416
|
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed - Agency
|
|
|
|
|
|
$
|
(26
|
)
|
|
$
|
2,960
|
|
|
$
|
(26
|
)
|
|
$
|
2,960
|
|
|
||||
Other
|
|
$
|
(1
|
)
|
|
$
|
22
|
|
|
(13
|
)
|
|
105
|
|
|
(14
|
)
|
|
127
|
|
|
||||
Total securities held to maturity
|
|
$
|
(1
|
)
|
|
$
|
22
|
|
|
$
|
(39
|
)
|
|
$
|
3,065
|
|
|
$
|
(40
|
)
|
|
$
|
3,087
|
|
|
Three months ended March 31
In millions |
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
|
Tax Expense (Benefit)
|
|
|
||||
2020
|
$
|
184
|
|
$
|
(2
|
)
|
$
|
182
|
|
$
|
38
|
|
|
2019
|
$
|
27
|
|
$
|
(14
|
)
|
$
|
13
|
|
$
|
3
|
|
|
March 31, 2020
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
|
|
$
|
249
|
|
|
$
|
10,949
|
|
|
$
|
3,839
|
|
|
$
|
1,065
|
|
|
$
|
16,102
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
3
|
|
|
117
|
|
|
2,092
|
|
|
48,616
|
|
|
50,828
|
|
|
|||||
Non-agency
|
|
|
|
|
|
|
|
1,563
|
|
|
1,563
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
7
|
|
|
466
|
|
|
828
|
|
|
1,880
|
|
|
3,181
|
|
|
|||||
Non-agency
|
|
|
|
75
|
|
|
351
|
|
|
3,823
|
|
|
4,249
|
|
|
||||||
Asset-backed
|
|
15
|
|
|
2,721
|
|
|
1,169
|
|
|
1,434
|
|
|
5,339
|
|
|
|||||
Other
|
|
505
|
|
|
1,958
|
|
|
1,355
|
|
|
1,144
|
|
|
4,962
|
|
|
|||||
Total securities available for sale at amortized cost
|
|
$
|
779
|
|
|
$
|
16,286
|
|
|
$
|
9,634
|
|
|
$
|
59,525
|
|
|
$
|
86,224
|
|
|
Fair value
|
|
$
|
785
|
|
|
$
|
16,788
|
|
|
$
|
10,017
|
|
|
$
|
61,487
|
|
|
$
|
89,077
|
|
|
Weighted-average yield, GAAP basis (a)
|
|
3.10
|
%
|
|
2.16
|
%
|
|
2.58
|
%
|
|
3.14
|
%
|
|
2.89
|
%
|
|
|||||
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
|
|
|
$
|
198
|
|
|
$
|
303
|
|
|
$
|
280
|
|
|
$
|
781
|
|
|
||
Asset-backed
|
|
|
|
6
|
|
|
18
|
|
|
26
|
|
|
50
|
|
|
||||||
Other
|
|
$
|
32
|
|
|
379
|
|
|
113
|
|
|
114
|
|
|
638
|
|
|
||||
Total securities held to maturity at amortized cost
|
|
$
|
32
|
|
|
$
|
583
|
|
|
$
|
434
|
|
|
$
|
420
|
|
|
$
|
1,469
|
|
|
Fair value
|
|
$
|
32
|
|
|
$
|
613
|
|
|
$
|
516
|
|
|
$
|
460
|
|
|
$
|
1,621
|
|
|
Weighted-average yield, GAAP basis (a)
|
|
3.32
|
%
|
|
3.23
|
%
|
|
3.87
|
%
|
|
2.63
|
%
|
|
3.26
|
%
|
|
In millions
|
March 31
2020 |
|
December 31
2019 |
|
||
Pledged to others
|
$
|
25,722
|
|
$
|
14,609
|
|
Accepted from others:
|
|
|
||||
Permitted by contract or custom to sell or repledge (a)
|
$
|
1,439
|
|
$
|
2,349
|
|
Permitted amount repledged to others
|
$
|
1,439
|
|
$
|
360
|
|
(a)
|
Balances at December 31, 2019 include $2.0 billion in fair value of securities accepted from others to collateralize short-term investments in resale agreements that were not repledged.
|
Commercial Lending
|
|
Consumer Lending
|
|
||
• Commercial
|
|
• Home equity
|
• Commercial real estate
|
|
• Residential real estate
|
• Equipment lease financing
|
|
• Automobile
|
|
|
• Credit card
|
|
|
• Education
|
|
|
• Other consumer
|
|
|
|
|
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 (b)
|
|
|
Nonperforming
Loans
|
|
Fair Value
Option
Nonaccrual
Loans (c)
|
|
Total
Loans
(d)(e)
|
|
|
Accrued
Interest
Receivable (f)
|
|
|||||||||
March 31, 2020 (a)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
$
|
148,467
|
|
$
|
97
|
|
$
|
22
|
|
$
|
51
|
|
$
|
170
|
|
|
$
|
494
|
|
|
$
|
149,131
|
|
|
$
|
268
|
|
||
Commercial real estate
|
28,495
|
|
6
|
|
1
|
|
|
7
|
|
|
42
|
|
|
28,544
|
|
|
68
|
|
|||||||||||
Equipment lease financing
|
6,987
|
|
42
|
|
2
|
|
|
44
|
|
|
30
|
|
|
7,061
|
|
|
|
|
|||||||||||
Total commercial lending
|
183,949
|
|
145
|
|
25
|
|
51
|
|
221
|
|
|
566
|
|
|
184,736
|
|
|
336
|
|
||||||||||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity
|
24,311
|
|
65
|
|
28
|
|
|
93
|
|
|
617
|
|
$
|
60
|
|
25,081
|
|
|
118
|
|
|||||||||
Residential real estate
|
20,934
|
|
173
|
|
82
|
|
300
|
|
555
|
|
(b)
|
292
|
|
469
|
|
22,250
|
|
|
59
|
|
|||||||||
Automobile
|
16,795
|
|
177
|
|
49
|
|
19
|
|
245
|
|
|
154
|
|
|
17,194
|
|
|
64
|
|
||||||||||
Credit card
|
6,956
|
|
59
|
|
37
|
|
70
|
|
166
|
|
|
10
|
|
|
7,132
|
|
|
|
|
||||||||||
Education
|
3,081
|
|
52
|
|
30
|
|
84
|
|
166
|
|
(b)
|
|
|
3,247
|
|
|
134
|
|
|||||||||||
Other consumer
|
4,961
|
|
17
|
|
10
|
|
10
|
|
37
|
|
|
5
|
|
|
5,003
|
|
|
14
|
|
||||||||||
Total consumer lending
|
77,038
|
|
543
|
|
236
|
|
483
|
|
1,262
|
|
|
1,078
|
|
529
|
|
79,907
|
|
|
389
|
|
|||||||||
Total
|
$
|
260,987
|
|
$
|
688
|
|
$
|
261
|
|
$
|
534
|
|
$
|
1,483
|
|
|
$
|
1,644
|
|
$
|
529
|
|
$
|
264,643
|
|
|
$
|
725
|
|
Percentage of total loans
|
98.62
|
%
|
.26
|
%
|
.10
|
%
|
.20
|
%
|
.56
|
%
|
|
.62
|
%
|
.20
|
%
|
100.00
|
%
|
|
|
(a)
|
Amounts in table represent loans held for investment and do not include any associated valuation allowance.
|
(b)
|
Past due loan amounts include purchased credit deteriorated loans totaling $.1 billion and government insured or guaranteed Residential real estate loans and Education loans totaling $.4 billion and $.2 billion, respectively, at March 31, 2020.
|
(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, unamortized deferred fees and costs on originated loans, and premiums or discounts on purchased loans totaling $1.3 billion at March 31, 2020.
|
(e)
|
Collateral dependent loans totaled $1.1 billion at March 31, 2020. The majority of these loans are within the Home equity and Residential real estate loan classes and are secured by consumer real estate.
|
(f)
|
The accrued interest associated with our loan portfolio is included in Other assets on the 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 (h)
|
|
|
Nonperforming
Loans
|
|
Fair Value
Option
Nonaccrual
Loans (i)
|
|
Purchased
Impaired
Loans
|
|
Total
Loans (j)
|
|
|
|||||||||
December 31, 2019 (g)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial
|
$
|
124,695
|
|
$
|
102
|
|
$
|
30
|
|
$
|
85
|
|
$
|
217
|
|
|
$
|
425
|
|
|
|
$
|
125,337
|
|
|
||||
Commercial real estate
|
28,061
|
|
4
|
|
1
|
|
|
5
|
|
|
44
|
|
|
|
28,110
|
|
|
||||||||||||
Equipment lease financing
|
7,069
|
|
49
|
|
5
|
|
|
54
|
|
|
32
|
|
|
|
7,155
|
|
|
||||||||||||
Total commercial lending
|
159,825
|
|
155
|
|
36
|
|
85
|
|
276
|
|
|
501
|
|
|
|
160,602
|
|
|
|||||||||||
Consumer Lending
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Home equity
|
23,791
|
|
58
|
|
24
|
|
|
82
|
|
|
669
|
|
|
$
|
543
|
|
25,085
|
|
|
||||||||||
Residential real estate
|
19,640
|
|
140
|
|
69
|
|
315
|
|
524
|
|
(h)
|
315
|
|
$
|
166
|
|
1,176
|
|
21,821
|
|
|
||||||||
Automobile
|
16,376
|
|
178
|
|
47
|
|
18
|
|
243
|
|
|
135
|
|
|
|
16,754
|
|
|
|||||||||||
Credit card
|
7,133
|
|
60
|
|
37
|
|
67
|
|
164
|
|
|
11
|
|
|
|
7,308
|
|
|
|||||||||||
Education
|
3,156
|
|
55
|
|
34
|
|
91
|
|
180
|
|
(h)
|
|
|
|
3,336
|
|
|
||||||||||||
Other consumer
|
4,898
|
|
15
|
|
11
|
|
9
|
|
35
|
|
|
4
|
|
|
|
4,937
|
|
|
|||||||||||
Total consumer lending
|
74,994
|
|
506
|
|
222
|
|
500
|
|
1,228
|
|
|
1,134
|
|
166
|
|
1,719
|
|
79,241
|
|
|
|||||||||
Total
|
$
|
234,819
|
|
$
|
661
|
|
$
|
258
|
|
$
|
585
|
|
$
|
1,504
|
|
|
$
|
1,635
|
|
$
|
166
|
|
$
|
1,719
|
|
$
|
239,843
|
|
|
Percentage of total loans
|
97.90
|
%
|
.28
|
%
|
.11
|
%
|
.24
|
%
|
.63
|
%
|
|
.68
|
%
|
.07
|
%
|
.72
|
%
|
100.00
|
%
|
|
(g)
|
Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment does not include any associated valuation allowance.
|
(h)
|
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 accreted interest income over the expected life of the loans. Past due loan amounts include government insured or guaranteed Residential real estate loans totaling $.4 billion and Education loans totaling $.2 billion at December 31, 2019.
|
(i)
|
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.
|
(j)
|
Net of unearned income, unamortized deferred fees and costs on originated loans, and premiums or discounts on purchased loans totaling $1.1 billion at December 31, 2019.
|
Dollars in millions
|
|
March 31
2020 |
|
|
December 31
2019 |
|
|
||
Nonperforming loans
|
|
|
|
|
|
||||
Total commercial lending
|
|
$
|
566
|
|
|
$
|
501
|
|
|
Total consumer lending (a)
|
|
1,078
|
|
|
1,134
|
|
|
||
Total nonperforming loans (b)
|
|
1,644
|
|
|
1,635
|
|
|
||
OREO and foreclosed assets
|
|
111
|
|
|
117
|
|
|
||
Total nonperforming assets
|
|
$
|
1,755
|
|
|
$
|
1,752
|
|
|
Nonperforming loans to total loans
|
|
.62
|
%
|
|
.68
|
%
|
|
||
Nonperforming assets to total loans, OREO and foreclosed assets
|
|
.66
|
%
|
|
.73
|
%
|
|
||
Nonperforming assets to total assets
|
|
.39
|
%
|
|
.43
|
%
|
|
(a)
|
Excludes most unsecured consumer loans and lines of credit, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.
|
(b)
|
Nonperforming loans for which there is no related ACL totaled $.3 billion at March 31, 2020.
|
|
Amortized Cost Basis by Origination Year
|
|
|
|
|||||||||||||||||||||||
March 31, 2020 - Dollars in millions
|
Three Months Ended March 31, 2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term
|
|
Total
Loans
|
|
|||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
$
|
7,250
|
|
$
|
18,695
|
|
$
|
11,957
|
|
$
|
7,943
|
|
$
|
5,399
|
|
$
|
11,807
|
|
$
|
78,664
|
|
$
|
61
|
|
$
|
141,776
|
|
Criticized
|
16
|
|
373
|
|
580
|
|
435
|
|
307
|
|
530
|
|
5,098
|
|
16
|
|
7,355
|
|
|||||||||
Total commercial
|
7,266
|
|
19,068
|
|
12,537
|
|
8,378
|
|
5,706
|
|
12,337
|
|
83,762
|
|
77
|
|
149,131
|
|
|||||||||
% of total commercial
|
4.8
|
%
|
12.8
|
%
|
8.4
|
%
|
5.6
|
%
|
3.8
|
%
|
8.3
|
%
|
56.2
|
%
|
.1
|
%
|
100.0
|
%
|
|||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
898
|
|
6,812
|
|
4,221
|
|
3,766
|
|
2,973
|
|
8,908
|
|
203
|
|
|
27,781
|
|
||||||||||
Criticized
|
6
|
|
63
|
|
27
|
|
49
|
|
173
|
|
359
|
|
86
|
|
|
763
|
|
||||||||||
Total commercial real estate
|
904
|
|
6,875
|
|
4,248
|
|
3,815
|
|
3,146
|
|
9,267
|
|
289
|
|
|
28,544
|
|
||||||||||
% of total commercial real estate
|
3.2
|
%
|
24.0
|
%
|
14.9
|
%
|
13.4
|
%
|
11.0
|
%
|
32.5
|
%
|
1.0
|
%
|
|
100.0
|
%
|
||||||||||
Equipment lease financing
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
334
|
|
1,438
|
|
1,252
|
|
1,038
|
|
680
|
|
2,059
|
|
|
|
6,801
|
|
|||||||||||
Criticized
|
4
|
|
74
|
|
88
|
|
44
|
|
27
|
|
23
|
|
|
|
260
|
|
|||||||||||
Total equipment lease financing
|
338
|
|
1,512
|
|
1,340
|
|
1,082
|
|
707
|
|
2,082
|
|
|
|
7,061
|
|
|||||||||||
% of total equipment lease financing
|
4.8
|
%
|
21.4
|
%
|
19.0
|
%
|
15.3
|
%
|
10.0
|
%
|
29.5
|
%
|
|
|
100.0
|
%
|
|||||||||||
Total commercial lending
|
$
|
8,508
|
|
$
|
27,455
|
|
$
|
18,125
|
|
$
|
13,275
|
|
$
|
9,559
|
|
$
|
23,686
|
|
$
|
84,051
|
|
$
|
77
|
|
$
|
184,736
|
|
% of total commercial lending
|
4.6
|
%
|
14.9
|
%
|
9.8
|
%
|
7.2
|
%
|
5.2
|
%
|
12.8
|
%
|
45.5
|
%
|
—
|
|
100.0
|
%
|
December 31, 2019 - Dollars in millions
|
|
Pass Rated
|
|
|
Criticized
|
|
|
Total Loans
|
|
|
|||
Commercial
|
|
$
|
119,761
|
|
|
$
|
5,576
|
|
|
$
|
125,337
|
|
|
Commercial real estate
|
|
27,424
|
|
|
686
|
|
|
28,110
|
|
|
|||
Equipment lease financing
|
|
6,891
|
|
|
264
|
|
|
7,155
|
|
|
|||
Total commercial lending
|
|
$
|
154,076
|
|
|
$
|
6,526
|
|
|
$
|
160,602
|
|
|
(a)
|
Loans in our commercial lending portfolio are classified as Pass Rated or Criticized based on the regulatory definitions, which are driven by the PD and LGD ratings that we assign. The Criticized classification includes loans that were rated special mention, substandard or doubtful as of March 31, 2020 and December 31, 2019.
|
|
Amortized Cost Basis by Origination Year
|
|
|
|
|||||||||||||||||||||||
March 31, 2020 – Dollars in millions
|
Three months ended March 31, 2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term
|
|
Total Loans
|
|
|||||||||
Home Equity
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Current estimated LTV ratios
|
|
|
|
|
|
|
|
|
.
|
||||||||||||||||||
Greater than or equal to 100%
|
|
$
|
18
|
|
$
|
27
|
|
$
|
30
|
|
$
|
18
|
|
$
|
144
|
|
$
|
722
|
|
$
|
389
|
|
$
|
1,348
|
|
||
Greater than or equal to 90% to less than 100%
|
|
45
|
|
37
|
|
20
|
|
15
|
|
87
|
|
684
|
|
263
|
|
1,151
|
|
||||||||||
Less than 90%
|
$
|
785
|
|
2,584
|
|
761
|
|
1,041
|
|
875
|
|
4,880
|
|
8,502
|
|
3,154
|
|
22,582
|
|
||||||||
Total home equity
|
$
|
785
|
|
$
|
2,647
|
|
$
|
825
|
|
$
|
1,091
|
|
$
|
908
|
|
$
|
5,111
|
|
$
|
9,908
|
|
$
|
3,806
|
|
$
|
25,081
|
|
Updated FICO scores
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than 660
|
$
|
773
|
|
$
|
2,521
|
|
$
|
761
|
|
$
|
1,026
|
|
$
|
856
|
|
$
|
4,609
|
|
$
|
9,339
|
|
$
|
2,871
|
|
$
|
22,756
|
|
Less than or equal to 660
|
12
|
|
126
|
|
64
|
|
64
|
|
51
|
|
493
|
|
555
|
|
842
|
|
2,207
|
|
|||||||||
No FICO score available
|
|
|
|
1
|
|
1
|
|
9
|
|
14
|
|
93
|
|
118
|
|
||||||||||||
Total home equity
|
$
|
785
|
|
$
|
2,647
|
|
$
|
825
|
|
$
|
1,091
|
|
$
|
908
|
|
$
|
5,111
|
|
$
|
9,908
|
|
$
|
3,806
|
|
$
|
25,081
|
|
% of total home equity
|
3.1
|
%
|
10.6
|
%
|
3.3
|
%
|
4.3
|
%
|
3.6
|
%
|
20.4
|
%
|
39.5
|
%
|
15.2
|
%
|
100.0
|
%
|
|||||||||
Residential Real Estate
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Current estimated LTV ratios
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than or equal to 100%
|
|
$
|
3
|
|
$
|
58
|
|
$
|
74
|
|
$
|
68
|
|
$
|
241
|
|
|
|
$
|
444
|
|
||||||
Greater than or equal to 90% to less than 100%
|
$
|
4
|
|
27
|
|
61
|
|
64
|
|
50
|
|
155
|
|
|
|
361
|
|
||||||||||
Less than 90%
|
1,757
|
|
6,236
|
|
1,867
|
|
2,752
|
|
2,697
|
|
5,556
|
|
|
|
20,865
|
|
|||||||||||
Government insured or guaranteed loans
|
|
9
|
|
13
|
|
17
|
|
25
|
|
516
|
|
|
|
580
|
|
||||||||||||
Total residential real estate
|
$
|
1,761
|
|
$
|
6,275
|
|
$
|
1,999
|
|
$
|
2,907
|
|
$
|
2,840
|
|
$
|
6,468
|
|
|
|
$
|
22,250
|
|
||||
Updated FICO scores
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than 660
|
$
|
1,757
|
|
$
|
6,198
|
|
$
|
1,945
|
|
$
|
2,844
|
|
$
|
2,732
|
|
$
|
5,166
|
|
|
|
$
|
20,642
|
|
||||
Less than or equal to 660
|
2
|
|
65
|
|
41
|
|
41
|
|
79
|
|
693
|
|
|
|
921
|
|
|||||||||||
No FICO score available
|
2
|
|
3
|
|
|
5
|
|
4
|
|
93
|
|
|
|
107
|
|
||||||||||||
Government insured or guaranteed loans
|
|
9
|
|
13
|
|
17
|
|
25
|
|
516
|
|
|
|
580
|
|
||||||||||||
Total residential real estate
|
$
|
1,761
|
|
$
|
6,275
|
|
$
|
1,999
|
|
$
|
2,907
|
|
$
|
2,840
|
|
$
|
6,468
|
|
|
|
$
|
22,250
|
|
||||
% of total residential real estate
|
7.9
|
%
|
28.1
|
%
|
9.0
|
%
|
13.1
|
%
|
12.8
|
%
|
29.1
|
%
|
|
|
100.0
|
%
|
|
Home equity
|
Residential real estate
|
|
|||
December 31, 2019 - Dollars in millions
|
||||||
Current estimated LTV ratios
|
|
|
||||
Greater than or equal to 125%
|
$
|
366
|
|
$
|
112
|
|
Greater than or equal to 100% to less than 125%
|
877
|
|
221
|
|
||
Greater than or equal to 90% to less than 100%
|
1,047
|
|
340
|
|
||
Less than 90%
|
22,068
|
|
19,305
|
|
||
No LTV ratio available
|
184
|
|
83
|
|
||
Government insured or guaranteed loans
|
|
584
|
|
|||
Purchased impaired loans
|
543
|
|
1,176
|
|
||
Total loans
|
$
|
25,085
|
|
$
|
21,821
|
|
Updated FICO Scores
|
|
|
||||
Greater than 660
|
$
|
22,245
|
|
$
|
19,341
|
|
Less than or equal to 660
|
2,019
|
|
569
|
|
||
No FICO score available
|
278
|
|
151
|
|
||
Government insured or guaranteed loans
|
|
584
|
|
|||
Purchased impaired loans
|
543
|
|
1,176
|
|
||
Total loans
|
$
|
25,085
|
|
$
|
21,821
|
|
|
Amortized Cost Basis by Origination Year
|
|
|
|
|||||||||||||||||||||||
March 31, 2020 – Dollars in millions
|
Three months ended March 31, 2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term
|
|
Total Loans
|
|
|||||||||
Automobile
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
1,586
|
|
$
|
4,090
|
|
$
|
1,955
|
|
$
|
1,164
|
|
$
|
725
|
|
$
|
275
|
|
|
|
$
|
9,795
|
|
||||
650 to 719
|
320
|
|
2,112
|
|
1,225
|
|
571
|
|
256
|
|
105
|
|
|
|
4,589
|
|
|||||||||||
620 to 649
|
14
|
|
525
|
|
306
|
|
122
|
|
47
|
|
21
|
|
|
|
1,035
|
|
|||||||||||
Less than 620
|
8
|
|
673
|
|
633
|
|
283
|
|
119
|
|
59
|
|
|
|
1,775
|
|
|||||||||||
Total automobile
|
$
|
1,928
|
|
$
|
7,400
|
|
$
|
4,119
|
|
$
|
2,140
|
|
$
|
1,147
|
|
$
|
460
|
|
|
|
$
|
17,194
|
|
||||
% of total automobile
|
11.2
|
%
|
43.0
|
%
|
24.0
|
%
|
12.4
|
%
|
6.7
|
%
|
2.7
|
%
|
|
|
100.0
|
%
|
|||||||||||
Credit card
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
|
|
|
|
|
|
$
|
3,564
|
|
$
|
10
|
|
$
|
3,574
|
|
||||||||||||
650 to 719
|
|
|
|
|
|
|
2,370
|
|
27
|
|
2,397
|
|
|||||||||||||||
620 to 649
|
|
|
|
|
|
|
442
|
|
12
|
|
454
|
|
|||||||||||||||
Less than 620
|
|
|
|
|
|
|
547
|
|
49
|
|
596
|
|
|||||||||||||||
No FICO score available or required (a)
|
|
|
|
|
|
|
108
|
|
3
|
|
111
|
|
|||||||||||||||
Total credit card
|
|
|
|
|
|
|
$
|
7,031
|
|
$
|
101
|
|
$
|
7,132
|
|
||||||||||||
% total credit card
|
|
|
|
|
|
|
98.6
|
%
|
1.4
|
%
|
100.0
|
%
|
|||||||||||||||
Education
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
7
|
|
$
|
89
|
|
$
|
121
|
|
$
|
94
|
|
$
|
78
|
|
$
|
703
|
|
|
|
$
|
1,092
|
|
||||
650 to 719
|
2
|
|
14
|
|
19
|
|
12
|
|
9
|
|
124
|
|
|
|
180
|
|
|||||||||||
620 to 649
|
|
1
|
|
2
|
|
1
|
|
1
|
|
20
|
|
|
|
25
|
|
||||||||||||
Less than 620
|
|
1
|
|
1
|
|
1
|
|
1
|
|
24
|
|
|
|
28
|
|
||||||||||||
No FICO score available or required (a)
|
3
|
|
11
|
|
7
|
|
6
|
|
1
|
|
1
|
|
|
|
29
|
|
|||||||||||
Total loans using FICO credit metric
|
12
|
|
116
|
|
150
|
|
114
|
|
90
|
|
872
|
|
|
|
1,354
|
|
|||||||||||
Other internal credit metrics
|
11
|
|
59
|
|
|
|
|
1,823
|
|
|
|
1,893
|
|
||||||||||||||
Total education
|
$
|
23
|
|
$
|
175
|
|
$
|
150
|
|
$
|
114
|
|
$
|
90
|
|
$
|
2,695
|
|
|
|
$
|
3,247
|
|
||||
% total education
|
.7
|
%
|
5.4
|
%
|
4.6
|
%
|
3.5
|
%
|
2.8
|
%
|
83.0
|
%
|
|
|
100.0
|
%
|
|||||||||||
Other consumer
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
218
|
|
$
|
623
|
|
$
|
219
|
|
$
|
71
|
|
$
|
25
|
|
$
|
90
|
|
$
|
230
|
|
$
|
1
|
|
$
|
1,477
|
|
650 to 719
|
126
|
|
349
|
|
158
|
|
40
|
|
13
|
|
26
|
|
162
|
|
1
|
|
875
|
|
|||||||||
620 to 649
|
17
|
|
56
|
|
29
|
|
6
|
|
2
|
|
4
|
|
26
|
|
|
140
|
|
||||||||||
Less than 620
|
5
|
|
45
|
|
37
|
|
12
|
|
4
|
|
9
|
|
44
|
|
1
|
|
157
|
|
|||||||||
No FICO score available or required (a)
|
1
|
|
|
|
|
|
2
|
|
6
|
|
|
9
|
|
||||||||||||||
Total loans using FICO credit metric
|
367
|
|
1,073
|
|
443
|
|
129
|
|
44
|
|
131
|
|
468
|
|
3
|
|
2,658
|
|
|||||||||
Other internal credit metrics
|
14
|
|
74
|
|
49
|
|
34
|
|
65
|
|
88
|
|
2,018
|
|
3
|
|
2,345
|
|
|||||||||
Total other consumer
|
$
|
381
|
|
$
|
1,147
|
|
$
|
492
|
|
$
|
163
|
|
$
|
109
|
|
$
|
219
|
|
$
|
2,486
|
|
$
|
6
|
|
$
|
5,003
|
|
% total other consumer
|
7.6
|
%
|
22.9
|
%
|
9.8
|
%
|
3.3
|
%
|
2.2
|
%
|
4.4
|
%
|
49.7
|
%
|
.1
|
%
|
100.0
|
%
|
|
|
|
|
||||||||||
Dollars in millions
|
|
Automobile
|
Credit Card
|
Education
|
Other Consumer
|
||||||||
December 31, 2019
|
|
|
|
|
|
||||||||
FICO score greater than 719
|
|
$
|
9,232
|
|
$
|
3,867
|
|
$
|
1,139
|
|
$
|
1,421
|
|
650 to 719
|
|
4,577
|
|
2,326
|
|
197
|
|
843
|
|
||||
620 to 649
|
|
1,001
|
|
419
|
|
25
|
|
132
|
|
||||
Less than 620
|
|
1,603
|
|
544
|
|
27
|
|
143
|
|
||||
No FICO score available or required (a)
|
|
341
|
|
152
|
|
15
|
|
27
|
|
||||
Total loans using FICO credit metric
|
|
16,754
|
|
7,308
|
|
1,403
|
|
2,566
|
|
||||
Consumer loans using other internal credit metrics
|
|
|
|
1,933
|
|
2,371
|
|
||||||
Total loans
|
|
$
|
16,754
|
|
$
|
7,308
|
|
$
|
3,336
|
|
$
|
4,937
|
|
Weighted-average updated FICO score (b)
|
|
726
|
|
724
|
|
773
|
|
727
|
|
(a)
|
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 category and, when necessary, takes actions to mitigate the credit risk.
|
(b)
|
Weighted-average updated FICO score excludes accounts with no FICO score available or required.
|
|
|
|
Pre-TDR
Amortized Cost Basis (b)
|
|
|
Post-TDR Amortized Cost Basis (c)
|
|
|||||||||||||||||
During the three months ended March 31, 2020
Dollars in millions (a) |
Number
of Loans |
|
|
Principal
Forgiveness
|
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
|||||||||
Total commercial lending
|
|
13
|
|
|
$
|
62
|
|
|
$
|
6
|
|
|
|
|
$
|
37
|
|
|
$
|
43
|
|
|
||
Total consumer lending
|
|
3,567
|
|
|
36
|
|
|
|
|
$
|
22
|
|
|
10
|
|
|
32
|
|
|
|||||
Total TDRs
|
|
3,580
|
|
|
$
|
98
|
|
|
$
|
6
|
|
|
$
|
22
|
|
|
$
|
47
|
|
|
$
|
75
|
|
|
|
|
|
Pre-TDR
Recorded
Investment (e)
|
|
|
Post-TDR Recorded Investment (f)
|
|
|||||||||||||||
During the three months ended March 31, 2019
Dollars in millions (d) |
Number
of Loans |
|
|
Principal
Forgiveness
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
||||||||
Total commercial lending
|
|
22
|
|
|
$
|
105
|
|
|
|
|
|
|
$
|
109
|
|
|
$
|
109
|
|
|
||
Total consumer lending
|
|
3,814
|
|
|
42
|
|
|
|
|
$
|
24
|
|
|
16
|
|
|
40
|
|
|
|||
Total TDRs
|
|
3,836
|
|
|
$
|
147
|
|
|
|
|
$
|
24
|
|
|
$
|
125
|
|
|
$
|
149
|
|
|
At or for the three months ended March 31, 2020
Dollars in millions
|
Commercial Lending
|
|
Consumer Lending
|
|
Total
|
|
|||
ACL - loans and leases
|
|
|
|
||||||
December 31, 2019 (a)
|
$
|
1,812
|
|
$
|
930
|
|
$
|
2,742
|
|
Adoption of ASU 2016-13 (b)
|
(304
|
)
|
767
|
|
463
|
|
|||
January 1, 2020
|
$
|
1,508
|
|
$
|
1,697
|
|
$
|
3,205
|
|
Charge-offs
|
(83
|
)
|
(221
|
)
|
(304
|
)
|
|||
Recoveries
|
24
|
|
68
|
|
92
|
|
|||
Net (charge-offs)
|
(59
|
)
|
(153
|
)
|
(212
|
)
|
|||
Provision for credit losses (c)
|
531
|
|
421
|
|
952
|
|
|||
Other
|
(1
|
)
|
|
(1
|
)
|
||||
March 31, 2020
|
$
|
1,979
|
|
$
|
1,965
|
|
$
|
3,944
|
|
Portfolio segment ACL as a percentage of total ACL for loans and leases
|
50
|
%
|
50
|
%
|
100
|
%
|
|||
Ratio of ACL for loans and leases to total loans
|
1.07
|
%
|
2.46
|
%
|
1.49
|
%
|
At or for the three months ended March 31, 2020
Dollars in millions
|
Commercial Lending
|
|
Consumer Lending
|
|
Total
|
|
|
|||
ACL - unfunded lending related commitments
|
|
|
|
|
||||||
December 31, 2019 (a)
|
$
|
316
|
|
$
|
2
|
|
$
|
318
|
|
|
Adoption of ASU 2016-13 (b)
|
53
|
|
126
|
|
179
|
|
|
|||
January 1, 2020
|
369
|
|
128
|
|
497
|
|
|
|||
Provision for (recapture of ) credit losses
|
(25
|
)
|
(22
|
)
|
(47
|
)
|
|
|||
March 31, 2020
|
$
|
344
|
|
$
|
106
|
|
$
|
450
|
|
|
Portfolio segment ACL as a percentage of total ACL for unfunded lending related commitments
|
76
|
%
|
24
|
%
|
100
|
%
|
|
At or for the three months ended March 31, 2019
Dollars in millions
|
Commercial Lending
|
|
Consumer Lending
|
|
Total
|
|
|||
Allowance for loan and lease losses
|
|
|
|
||||||
January 1, 2019
|
$
|
1,663
|
|
$
|
966
|
|
$
|
2,629
|
|
Charge-offs
|
(31
|
)
|
(184
|
)
|
(215
|
)
|
|||
Recoveries
|
19
|
|
60
|
|
79
|
|
|||
Net (charge-offs)
|
(12
|
)
|
(124
|
)
|
(136
|
)
|
|||
Provision for credit losses
|
80
|
|
109
|
|
189
|
|
|||
Net decrease in allowance for unfunded loan commitments and letters
of credit
|
5
|
|
1
|
|
6
|
|
|||
Other
|
|
4
|
|
4
|
|
||||
March 31, 2019
|
$
|
1,736
|
|
$
|
956
|
|
$
|
2,692
|
|
TDRs individually evaluated for impairment
|
$
|
27
|
|
$
|
130
|
|
$
|
157
|
|
Other loans individually evaluated for impairment
|
60
|
|
|
60
|
|
||||
Loans collectively evaluated for impairment
|
1,649
|
|
551
|
|
2,200
|
|
|||
Purchased impaired loans
|
|
275
|
|
275
|
|
||||
March 31, 2019
|
$
|
1,736
|
|
$
|
956
|
|
$
|
2,692
|
|
Loan portfolio
|
|
|
|
||||||
TDRs individually evaluated for impairment
|
$
|
456
|
|
$
|
1,412
|
|
$
|
1,868
|
|
Other loans individually evaluated for impairment
|
190
|
|
|
190
|
|
||||
Loans collectively evaluated for impairment
|
157,796
|
|
69,732
|
|
227,528
|
|
|||
Fair value option loans (a)
|
|
758
|
|
758
|
|
||||
Purchased impaired loans
|
|
1,949
|
|
1,949
|
|
||||
March 31, 2019
|
$
|
158,442
|
|
$
|
73,851
|
|
$
|
232,293
|
|
Portfolio segment ALLL as a percentage of total ALLL
|
64
|
%
|
36
|
%
|
100
|
%
|
|||
Ratio of ALLL to total loans
|
1.10
|
%
|
1.29
|
%
|
1.16
|
%
|
In millions
|
Residential
Mortgages |
|
|
Commercial
Mortgages (a) |
|
|
|||
Cash Flows - Three months ended March 31, 2020
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
1,334
|
|
|
|
$
|
493
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
95
|
|
|
|
$
|
15
|
|
|
Servicing fees (d)
|
$
|
85
|
|
|
|
$
|
33
|
|
|
Servicing advances recovered/(funded), net
|
$
|
12
|
|
|
|
$
|
12
|
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
1,361
|
|
|
|
$
|
37
|
|
|
Cash Flows - Three months ended March 31, 2019
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
715
|
|
|
|
$
|
644
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
93
|
|
|
|
|
|
||
Servicing fees (d)
|
$
|
87
|
|
|
|
$
|
30
|
|
|
Servicing advances recovered/(funded), net
|
$
|
18
|
|
|
|
$
|
(23
|
)
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
507
|
|
|
|
$
|
14
|
|
|
(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 both residential and commercial mortgage government insured or guaranteed loans eligible for repurchase through the exercise of our removal of account provision option, as well as residential mortgage 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 $17.1 billion, $17.8 billion, and $14.6 billion in residential mortgage-backed securities and $.8 billion, $.6 billion, and $.6 billion in commercial mortgage-backed securities at March 31, 2020, December 31, 2019, and March 31, 2019, respectively.
|
In millions
|
Residential Mortgages
|
|
|
|
Commercial Mortgages (a)
|
|
|
||
March 31, 2020
|
|
|
|
|
|
||||
Total principal balance
|
$
|
48,468
|
|
|
|
$
|
41,514
|
|
|
Delinquent loans (b)
|
$
|
446
|
|
|
|
$
|
10
|
|
|
December 31, 2019
|
|
|
|
|
|
||||
Total principal balance
|
$
|
49,323
|
|
|
|
$
|
42,414
|
|
|
Delinquent loans (b)
|
$
|
492
|
|
|
|
$
|
64
|
|
|
Three months ended March 31, 2020
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
8
|
|
|
|
$
|
99
|
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
11
|
|
|
|
$
|
119
|
|
|
(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 |
|
|
|||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-backed securitizations (b)
|
$
|
19,067
|
|
|
|
$
|
19,067
|
|
(c)
|
|
|
|
|
||
Tax credit investments and other
|
3,023
|
|
|
|
2,948
|
|
(d)
|
|
|
$
|
992
|
|
(e)
|
||
Total
|
$
|
22,090
|
|
|
|
$
|
22,015
|
|
|
|
|
$
|
992
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-backed securitizations (b)
|
$
|
19,287
|
|
|
|
$
|
19,287
|
|
(c)
|
|
|
|
|
||
Tax credit investments and other
|
3,131
|
|
|
|
3,028
|
|
(d)
|
|
|
$
|
1,101
|
|
(e)
|
||
Total
|
$
|
22,418
|
|
|
|
$
|
22,315
|
|
|
|
|
$
|
1,101
|
|
|
(a)
|
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 credits 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 Deposits and Other liabilities on our Consolidated Balance Sheet.
|
|
Commercial MSRs
|
|
Residential MSRs
|
|
||||||||||
In millions
|
2020
|
|
2019
|
|
|
2020
|
|
2019
|
|
|
||||
January 1
|
$
|
649
|
|
$
|
726
|
|
|
$
|
995
|
|
$
|
1,257
|
|
|
Additions:
|
|
|
|
|
|
|
||||||||
From loans sold with servicing retained
|
11
|
|
7
|
|
|
10
|
|
7
|
|
|
||||
Purchases
|
19
|
|
19
|
|
|
18
|
|
6
|
|
|
||||
Changes in fair value due to:
|
|
|
|
|
|
|
||||||||
Time and payoffs (a)
|
(35
|
)
|
(38
|
)
|
|
(39
|
)
|
(33
|
)
|
|
||||
Other (b)
|
(167
|
)
|
(33
|
)
|
|
(379
|
)
|
(106
|
)
|
|
||||
March 31
|
$
|
477
|
|
$
|
681
|
|
|
$
|
605
|
|
$
|
1,131
|
|
|
Related unpaid principal balance at March 31
|
$
|
225,769
|
|
$
|
186,946
|
|
|
$
|
118,104
|
|
$
|
123,079
|
|
|
Servicing advances at March 31
|
$
|
145
|
|
$
|
243
|
|
|
$
|
99
|
|
$
|
138
|
|
|
(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
|
March 31
2020 |
|
|
December 31
2019 |
|
|
||
Fair value
|
$
|
477
|
|
|
$
|
649
|
|
|
Weighted-average life (years)
|
4.1
|
|
|
4.1
|
|
|
||
Weighted-average constant prepayment rate
|
4.51
|
%
|
|
4.56
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
8
|
|
|
$
|
9
|
|
|
Decline in fair value from 20% adverse change
|
$
|
16
|
|
|
$
|
17
|
|
|
Effective discount rate
|
7.57
|
%
|
|
7.91
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
12
|
|
|
$
|
17
|
|
|
Decline in fair value from 20% adverse change
|
$
|
24
|
|
|
$
|
34
|
|
|
Dollars in millions
|
March 31
2020 |
|
|
December 31
2019 |
|
|
||
Fair value
|
$
|
605
|
|
|
$
|
995
|
|
|
Weighted-average life (years)
|
2.9
|
|
|
5.2
|
|
|
||
Weighted-average constant prepayment rate
|
27.14
|
%
|
|
13.51
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
43
|
|
|
$
|
46
|
|
|
Decline in fair value from 20% adverse change
|
$
|
81
|
|
|
$
|
89
|
|
|
Weighted-average option adjusted spread
|
770
|
|
bps
|
769
|
|
bps
|
||
Decline in fair value from 10% adverse change
|
$
|
13
|
|
|
$
|
27
|
|
|
Decline in fair value from 20% adverse change
|
$
|
26
|
|
|
$
|
52
|
|
|
|
Three months ended
March 31 |
|
|||||
In millions
|
2020
|
|
2019
|
|
|
||
Product
|
|
|
|
||||
Sales-type leases and direct financing leases
|
$
|
71
|
|
$
|
74
|
|
|
Operating leases
|
27
|
|
31
|
|
|
||
Lessor Income
|
$
|
98
|
|
$
|
105
|
|
|
In billions
|
|
|||
Less than 1 year
|
$
|
38.8
|
|
|
1 to 2 years
|
$
|
7.4
|
|
|
2 to 3 years
|
$
|
8.1
|
|
|
3 to 4 years
|
$
|
2.7
|
|
|
4 to 5 years
|
$
|
2.9
|
|
|
Over 5 years
|
$
|
13.5
|
|
|
|
Stated Rate
|
|
Maturity
|
|
Carrying Value
|
|
|||||||
Dollars in millions
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
|||||
Parent Company
|
|
|
|
|
|
|
|
|
|||||
Senior debt
|
2.20%-4.38%
|
|
|
2020-2030
|
|
$
|
10,442
|
|
|
$
|
8,843
|
|
|
Subordinated debt
|
3.90
|
%
|
|
2024
|
|
814
|
|
|
777
|
|
|
||
Junior subordinated debt
|
2.15
|
%
|
|
2028
|
|
205
|
|
|
205
|
|
|
||
Subtotal
|
|
|
|
|
11,461
|
|
|
9,825
|
|
|
|||
Bank
|
|
|
|
|
|
|
|
|
|||||
FHLB (a)
|
0.32%-1.89%
|
|
|
2020-2021
|
|
23,491
|
|
|
16,341
|
|
|
||
Senior debt
|
1.13%-3.50%
|
|
|
2020-2043
|
|
20,996
|
|
|
20,167
|
|
|
||
Subordinated debt
|
2.70%-4.20%
|
|
|
2022-2029
|
|
5,456
|
|
|
5,152
|
|
|
||
Subtotal
|
|
|
|
|
49,943
|
|
|
41,660
|
|
|
|||
Total
|
|
|
|
|
$
|
61,404
|
|
|
$
|
51,485
|
|
|
(a)
|
FHLB borrowings are generally collateralized by residential mortgage loans, other mortgage-related loans and investment securities.
|
In millions
|
March 31
2020 |
|
|
December 31
2019 |
|
|
||
Commitments to extend credit
|
|
|
|
|
||||
Total commercial lending
|
$
|
115,996
|
|
|
$
|
131,762
|
|
|
Home equity lines of credit
|
16,843
|
|
|
16,803
|
|
|
||
Credit card
|
32,065
|
|
|
30,862
|
|
|
||
Other
|
7,100
|
|
|
6,162
|
|
|
||
Total commitments to extend credit
|
172,004
|
|
|
185,589
|
|
|
||
Net outstanding standby letters of credit (a)
|
9,428
|
|
|
9,843
|
|
|
||
Reinsurance agreements (b)
|
110
|
|
|
1,393
|
|
|
||
Standby bond purchase agreements (c)
|
1,464
|
|
|
1,295
|
|
|
||
Other commitments (d)
|
1,530
|
|
|
1,498
|
|
|
||
Total commitments to extend credit and other commitments
|
$
|
184,536
|
|
|
$
|
199,618
|
|
|
(a)
|
Net outstanding standby letters of credit include $4.0 billion and $4.1 billion at March 31, 2020 and December 31, 2019, 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 March 31, 2020, the aggregate maximum exposure amount was zero for accidental death and dismemberment contracts, and $.1 billion for credit life, accident and health contracts. Comparable amounts at December 31, 2019 were $1.3 billion and $.1 billion, respectively.
|
(c)
|
We enter into standby bond purchase agreements to support municipal bond obligations.
|
(d)
|
Includes $.6 billion related to investments in qualified affordable housing projects at both March 31, 2020 and December 31, 2019.
|
|
|
|
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
|
|
|
||||||||
Three months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2018 (a)
|
457
|
|
|
$
|
2,711
|
|
$
|
3,986
|
|
$
|
12,291
|
|
$
|
38,919
|
|
$
|
(725
|
)
|
$
|
(9,454
|
)
|
|
$
|
42
|
|
$
|
47,770
|
|
|
Cumulative effect of ASU 2016-02 adoption (b)
|
|
|
|
|
|
62
|
|
|
|
|
|
62
|
|
|
|||||||||||||||
Balance at January 1, 2019 (a)
|
457
|
|
|
$
|
2,711
|
|
$
|
3,986
|
|
$
|
12,291
|
|
$
|
38,981
|
|
$
|
(725
|
)
|
$
|
(9,454
|
)
|
|
$
|
42
|
|
$
|
47,832
|
|
|
Net income
|
|
|
|
|
|
1,261
|
|
|
|
|
10
|
|
1,271
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
720
|
|
|
|
|
720
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(436
|
)
|
|
|
|
|
(436
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(63
|
)
|
|
|
|
|
(63
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Common stock activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Treasury stock activity
|
(5
|
)
|
|
|
|
10
|
|
|
|
(631
|
)
|
|
|
(621
|
)
|
|
|||||||||||||
Other
|
|
|
|
3
|
|
(118
|
)
|
|
|
|
|
(13
|
)
|
(128
|
)
|
|
|||||||||||||
Balance at March 31, 2019 (a)
|
452
|
|
|
$
|
2,711
|
|
$
|
3,990
|
|
$
|
12,183
|
|
$
|
39,742
|
|
$
|
(5
|
)
|
$
|
(10,085
|
)
|
|
$
|
39
|
|
$
|
48,575
|
|
|
Balance at December 31, 2019 (a)
|
433
|
|
|
$
|
2,712
|
|
$
|
3,993
|
|
$
|
12,376
|
|
$
|
42,215
|
|
$
|
799
|
|
$
|
(12,781
|
)
|
|
$
|
29
|
|
$
|
49,343
|
|
|
Cumulative effect of ASU 2016-13 adoption (c)
|
|
|
|
|
|
(671
|
)
|
|
|
|
|
(671
|
)
|
|
|||||||||||||||
Balance at January 1, 2020 (a)
|
433
|
|
|
$
|
2,712
|
|
$
|
3,993
|
|
$
|
12,376
|
|
$
|
41,544
|
|
$
|
799
|
|
$
|
(12,781
|
)
|
|
$
|
29
|
|
$
|
48,672
|
|
|
Net income
|
|
|
|
|
|
908
|
|
|
|
|
7
|
|
915
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
1,719
|
|
|
|
|
1,719
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(503
|
)
|
|
|
|
|
(503
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(63
|
)
|
|
|
|
|
(63
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Common stock activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Treasury stock activity
|
(9
|
)
|
|
|
|
49
|
|
|
|
(1,359
|
)
|
|
|
(1,310
|
)
|
|
|||||||||||||
Other
|
|
|
|
|
|
(131
|
)
|
|
|
|
|
(9
|
)
|
(140
|
)
|
|
|||||||||||||
Balance at March 31, 2020 (a)
|
424
|
|
|
$
|
2,712
|
|
$
|
3,994
|
|
$
|
12,294
|
|
$
|
41,885
|
|
$
|
2,518
|
|
$
|
(14,140
|
)
|
|
$
|
27
|
|
$
|
49,290
|
|
|
(a)
|
The par value of our preferred stock outstanding was less than $.5 million at each date and, therefore, is excluded from this presentation.
|
(b)
|
Represents the cumulative effect of adopting ASU 2016-02 - Leases related primarily to deferred gains on previous sale-leaseback transactions. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in our 2019 Form 10-K for additional detail.
|
(c)
|
Represents the cumulative effect of adopting ASU 2016-13 - Financial Instruments - Credit Losses. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in this Report for additional detail on this adoption.
|
|
Three months ended
March 31 |
|
|||||
In millions
|
2020
|
|
2019
|
|
|
||
Net unrealized gains (losses) on securities without an allowance for credit losses
|
|
|
|
||||
Increase in net unrealized gains (losses) on securities
|
$
|
1,669
|
|
|
|
||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
1
|
|
|
|
|||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
181
|
|
|
|
|||
Net increase (decrease), pre-tax
|
1,487
|
|
|
|
|||
Effect of income taxes
|
(341
|
)
|
|
|
|||
Net increase (decrease), after-tax
|
1,146
|
|
|
|
|||
Net unrealized gains (losses) on securities with an allowance for credit losses
|
|
|
|
||||
Increase in net unrealized gains (losses) on securities
|
(7
|
)
|
|
|
|||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
|
|
|
||||
Net increase (decrease), pre-tax
|
(7
|
)
|
|
|
|||
Effect of income taxes
|
2
|
|
|
|
|||
Net increase (decrease), after-tax
|
(5
|
)
|
|
|
|||
Net unrealized gains (losses) on non-OTTI securities
|
|
|
|
||||
Increase in net unrealized gains (losses) on non-OTTI securities
|
|
$
|
640
|
|
|
||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
|
3
|
|
|
|||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
|
(2
|
)
|
|
|||
Net increase (decrease), pre-tax
|
|
639
|
|
|
|||
Effect of income taxes
|
|
(147
|
)
|
|
|||
Net increase (decrease), after-tax
|
|
492
|
|
|
|||
Net unrealized gains (losses) on OTTI securities
|
|
|
|
||||
Increase in net unrealized gains (losses) on OTTI securities
|
|
9
|
|
|
|||
Net increase (decrease), pre-tax
|
|
9
|
|
|
|||
Effect of income taxes
|
|
(2
|
)
|
|
|||
Net increase (decrease), after-tax
|
|
|
7
|
|
|
||
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
|
|
||||
Increase in net unrealized gains (losses) on cash flow hedge derivatives
|
830
|
|
108
|
|
|
||
Less: Net gains (losses) realized as a yield adjustment reclassified to loan interest income
|
42
|
|
(8
|
)
|
|
||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
2
|
|
1
|
|
|
||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
1
|
|
15
|
|
|
||
Net increase (decrease), pre-tax
|
785
|
|
100
|
|
|
||
Effect of income taxes
|
(180
|
)
|
(23
|
)
|
|
||
Net increase (decrease), after-tax
|
605
|
|
77
|
|
|
||
Pension and other postretirement benefit plan adjustments
|
|
|
|
||||
Net pension and other postretirement benefit activity
|
10
|
|
143
|
|
|
||
Amortization of actuarial loss (gain) reclassified to other noninterest expense
|
1
|
|
1
|
|
|
||
Amortization of prior service cost (credit) reclassified to other noninterest expense
|
1
|
|
1
|
|
|
||
Net increase (decrease), pre-tax
|
12
|
|
145
|
|
|
||
Effect of income taxes
|
(3
|
)
|
(33
|
)
|
|
||
Net increase (decrease), after-tax
|
9
|
|
112
|
|
|
||
Other
|
|
|
|
||||
PNC’s portion of BlackRock’s OCI
|
(34
|
)
|
29
|
|
|
||
Net investment hedge derivatives
|
75
|
|
(18
|
)
|
|
||
Foreign currency translation adjustments and other
|
(67
|
)
|
23
|
|
|
||
Net increase (decrease), pre-tax
|
(26
|
)
|
34
|
|
|
||
Effect of income taxes
|
(10
|
)
|
(2
|
)
|
|
||
Net increase (decrease), after-tax
|
(36
|
)
|
32
|
|
|
||
Total other comprehensive income (loss), pre-tax
|
2,251
|
|
927
|
|
|
||
Total other comprehensive income (loss), tax effect
|
(532
|
)
|
(207
|
)
|
|
||
Total other comprehensive income (loss), after-tax
|
$
|
1,719
|
|
$
|
720
|
|
|
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 December 31, 2018
|
$
|
(284
|
)
|
|
$
|
204
|
|
|
$
|
47
|
|
|
$
|
(530
|
)
|
|
$
|
(162
|
)
|
|
$
|
(725
|
)
|
|
Net activity
|
492
|
|
|
7
|
|
|
77
|
|
|
112
|
|
|
32
|
|
|
720
|
|
|
||||||
Balance at March 31, 2019
|
$
|
208
|
|
|
$
|
211
|
|
|
$
|
124
|
|
|
$
|
(418
|
)
|
|
$
|
(130
|
)
|
|
$
|
(5
|
)
|
|
In millions, after-tax
|
Net unrealized gains (losses) on non-OTTI securities / securities without an ACL
|
|
|
Net unrealized gains (losses) on OTTI securities / securities with an ACL
|
|
|
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
|
Pension and other postretirement benefit plan adjustments
|
|
|
Other
|
|
|
Total
|
|
|
||||||
Balance at December 31, 2019
|
$
|
844
|
|
|
$
|
223
|
|
|
$
|
276
|
|
|
$
|
(408
|
)
|
|
$
|
(136
|
)
|
|
$
|
799
|
|
|
Cumulative effect of ASU 2016-13 adoption (a)
|
223
|
|
|
(223
|
)
|
|
|
|
|
|
|
|
—
|
|
|
|||||||||
Balance at January 1, 2020
|
1,067
|
|
|
—
|
|
|
276
|
|
|
(408
|
)
|
|
(136
|
)
|
|
799
|
|
|
||||||
Net activity
|
1,146
|
|
|
(5
|
)
|
|
605
|
|
|
9
|
|
|
(36
|
)
|
|
1,719
|
|
|
||||||
March 31, 2020
|
2,213
|
|
|
(5
|
)
|
|
881
|
|
|
(399
|
)
|
|
(172
|
)
|
|
2,518
|
|
|
(a)
|
Represents the cumulative effect of adopting ASU 2016-13 - Credit Losses reflecting the change from OTTI to ACL for debt securities. See the Recently Adopted Accounting Standards portion of Note 1 Accounting Policies in this Report for additional detail on this adoption.
|
|
|
Three months ended
March 31 |
||||||
In millions, except per share data
|
|
2020
|
|
|
2019
|
|
||
Basic
|
|
|
|
|
||||
Net income
|
|
$
|
915
|
|
|
$
|
1,271
|
|
Less:
|
|
|
|
|
||||
Net income attributable to noncontrolling interests
|
|
7
|
|
|
10
|
|
||
Preferred stock dividends
|
|
63
|
|
|
63
|
|
||
Preferred stock discount accretion and redemptions
|
|
1
|
|
|
1
|
|
||
Net income attributable to common shareholders
|
|
844
|
|
|
1,197
|
|
||
Less: Dividends and undistributed earnings allocated to participating securities
|
|
4
|
|
|
5
|
|
||
Net income attributable to basic common shareholders
|
|
$
|
840
|
|
|
$
|
1,192
|
|
Basic weighted-average common shares outstanding
|
|
429
|
|
|
455
|
|
||
Basic earnings per common share (a)
|
|
$
|
1.96
|
|
|
$
|
2.62
|
|
Diluted
|
|
|
|
|
||||
Net income attributable to basic common shareholders
|
|
$
|
840
|
|
|
$
|
1,192
|
|
Less: Impact of BlackRock earnings per share dilution
|
|
1
|
|
|
3
|
|
||
Net income attributable to diluted common shareholders
|
|
$
|
839
|
|
|
$
|
1,189
|
|
Basic weighted-average common shares outstanding
|
|
429
|
|
|
455
|
|
||
Dilutive potential common shares
|
|
1
|
|
|
1
|
|
||
Diluted weighted-average common shares outstanding
|
|
430
|
|
|
456
|
|
||
Diluted earnings per common share (a)
|
|
$
|
1.95
|
|
|
$
|
2.61
|
|
(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).
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
||||||||||||||||||||||||||||
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
|
|
|
$
|
923
|
|
|
$
|
4
|
|
|
$
|
927
|
|
|
|
|
|
$
|
817
|
|
|
$
|
2
|
|
|
$
|
819
|
|
|
||||
Commercial mortgage loans held for sale
|
|
|
478
|
|
|
60
|
|
|
538
|
|
|
|
|
|
182
|
|
|
64
|
|
|
246
|
|
|
||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Treasury and government agencies
|
$
|
16,699
|
|
|
282
|
|
|
|
|
16,981
|
|
|
|
$
|
16,236
|
|
|
280
|
|
|
|
|
16,516
|
|
|
||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency
|
|
|
52,628
|
|
|
|
|
52,628
|
|
|
|
|
|
36,321
|
|
|
|
|
36,321
|
|
|
||||||||||||
Non-agency
|
|
|
201
|
|
|
1,442
|
|
|
1,643
|
|
|
|
|
|
73
|
|
|
1,741
|
|
|
1,814
|
|
|
||||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency
|
|
|
3,289
|
|
|
|
|
3,289
|
|
|
|
|
|
3,118
|
|
|
|
|
3,118
|
|
|
||||||||||||
Non-agency
|
|
|
4,082
|
|
|
|
|
4,082
|
|
|
|
|
|
3,372
|
|
|
|
|
3,372
|
|
|
||||||||||||
Asset-backed
|
|
|
5,076
|
|
|
202
|
|
|
5,278
|
|
|
|
|
|
4,874
|
|
|
240
|
|
|
5,114
|
|
|
||||||||||
Other
|
|
|
5,103
|
|
|
73
|
|
|
5,176
|
|
|
|
|
|
2,834
|
|
|
74
|
|
|
2,908
|
|
|
||||||||||
Total securities available for sale
|
16,699
|
|
|
70,661
|
|
|
1,717
|
|
|
89,077
|
|
|
|
16,236
|
|
|
50,872
|
|
|
2,055
|
|
|
69,163
|
|
|
||||||||
Loans
|
|
|
425
|
|
|
655
|
|
|
1,080
|
|
|
|
|
|
442
|
|
|
300
|
|
|
742
|
|
|
||||||||||
Equity investments (a)
|
500
|
|
|
|
|
1,220
|
|
|
2,014
|
|
|
|
855
|
|
|
|
|
1,276
|
|
|
2,421
|
|
|
||||||||||
Residential mortgage servicing rights
|
|
|
|
|
605
|
|
|
605
|
|
|
|
|
|
|
|
995
|
|
|
995
|
|
|
||||||||||||
Commercial mortgage servicing rights
|
|
|
|
|
477
|
|
|
477
|
|
|
|
|
|
|
|
649
|
|
|
649
|
|
|
||||||||||||
Trading securities (b)
|
1,976
|
|
|
2,041
|
|
|
|
|
4,017
|
|
|
|
433
|
|
|
2,787
|
|
|
|
|
3,220
|
|
|
||||||||||
Financial derivatives (b) (c)
|
3
|
|
|
8,635
|
|
|
135
|
|
|
8,773
|
|
|
|
|
|
3,448
|
|
|
54
|
|
|
3,502
|
|
|
|||||||||
Other assets
|
286
|
|
|
85
|
|
|
|
|
371
|
|
|
|
339
|
|
|
131
|
|
|
|
|
470
|
|
|
||||||||||
Total assets (d)
|
$
|
19,464
|
|
|
$
|
83,248
|
|
|
$
|
4,873
|
|
|
$
|
107,879
|
|
|
|
$
|
17,863
|
|
|
$
|
58,679
|
|
|
$
|
5,395
|
|
|
$
|
82,227
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other borrowed funds
|
$
|
1,363
|
|
|
$
|
56
|
|
|
$
|
5
|
|
|
$
|
1,424
|
|
|
|
$
|
385
|
|
|
$
|
126
|
|
|
$
|
7
|
|
|
$
|
518
|
|
|
Financial derivatives (c) (e)
|
3
|
|
|
3,740
|
|
|
185
|
|
|
3,928
|
|
|
|
|
|
1,819
|
|
|
200
|
|
|
2,019
|
|
|
|||||||||
Other liabilities
|
|
|
|
|
72
|
|
|
72
|
|
|
|
|
|
|
|
137
|
|
|
137
|
|
|
||||||||||||
Total liabilities (f)
|
$
|
1,366
|
|
|
$
|
3,796
|
|
|
$
|
262
|
|
|
$
|
5,424
|
|
|
|
$
|
385
|
|
|
$
|
1,945
|
|
|
$
|
344
|
|
|
$
|
2,674
|
|
|
(a)
|
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.
|
(b)
|
Included in Other assets on the Consolidated Balance Sheet.
|
(c)
|
Amounts at March 31, 2020 and December 31, 2019 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 12 Financial Derivatives for additional information related to derivative offsetting.
|
(d)
|
Total assets at fair value as a percentage of total consolidated assets was 24% and 20% as of March 31, 2020 and December 31, 2019, respectively. Level 3 assets as a percentage of total assets at fair value was 5% and 7% as of March 31, 2020 and December 31, 2019, respectively. Level 3 assets as a percentage of total consolidated assets was 1% at both March 31, 2020 and December 31, 2019.
|
(e)
|
Included in Other liabilities on the Consolidated Balance Sheet.
|
(f)
|
Total liabilities at fair value as a percentage of total consolidated liabilities was 1% at both March 31, 2020 and December 31, 2019. Level 3 liabilities as a percentage of total liabilities at fair value was 5% and 13% as of March 31, 2020 and December 31, 2019, respectively. Level 3 liabilities as a percentage of total consolidated liabilities was less than 1% at both March 31, 2020 and December 31, 2019.
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
|
Unrealized
gains / losses on assets and liabilities held on Consolidated Balance Sheet at Mar. 31, 2020 (a) (c) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair Value Dec. 31, 2019
|
|
Included in
Earnings |
|
Included
in Other comprehensive income (b) |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
|
Fair
Value Mar. 31, 2020 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
2
|
|
$
|
(1
|
)
|
|
|
|
$
|
4
|
|
$
|
(3
|
)
|
(e)
|
$
|
4
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
64
|
|
$
|
(1
|
)
|
|
|
|
|
|
$
|
(3
|
)
|
|
|
|
|
60
|
|
$
|
(1
|
)
|
|
||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
1,741
|
|
16
|
|
|
$
|
(222
|
)
|
|
|
|
(93
|
)
|
|
|
|
|
1,442
|
|
|
|
||||||||||||||||
Asset-backed
|
240
|
|
2
|
|
|
(29
|
)
|
|
|
|
(11
|
)
|
|
|
|
|
202
|
|
|
|
|||||||||||||||||
Other
|
74
|
|
|
|
(5
|
)
|
4
|
|
|
|
|
|
|
|
|
73
|
|
|
|
||||||||||||||||||
Total securities
available for sale |
2,055
|
|
18
|
|
|
(256
|
)
|
4
|
|
|
|
|
|
(104
|
)
|
|
|
|
|
|
|
1,717
|
|
|
|
||||||||||||
Loans
|
300
|
|
11
|
|
|
|
16
|
|
(26
|
)
|
|
362
|
|
(d)
|
|
(8
|
)
|
(e)
|
655
|
|
11
|
|
|
||||||||||||||
Equity investments
|
1,276
|
|
(69
|
)
|
|
|
71
|
|
(58
|
)
|
|
|
|
|
|
|
1,220
|
|
(64
|
)
|
|
||||||||||||||||
Residential mortgage
servicing rights |
995
|
|
(379
|
)
|
|
|
18
|
|
|
$
|
10
|
|
(39
|
)
|
|
|
|
|
605
|
|
(379
|
)
|
|
||||||||||||||
Commercial mortgage
servicing rights |
649
|
|
(167
|
)
|
|
|
19
|
|
|
11
|
|
(35
|
)
|
|
|
|
|
477
|
|
(166
|
)
|
|
|||||||||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Financial derivatives
|
54
|
|
101
|
|
|
|
2
|
|
|
|
(22
|
)
|
|
|
|
|
135
|
|
75
|
|
|
||||||||||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total assets
|
$
|
5,395
|
|
$
|
(486
|
)
|
|
$
|
(256
|
)
|
$
|
132
|
|
$
|
(85
|
)
|
$
|
21
|
|
$
|
159
|
|
|
$
|
4
|
|
$
|
(11
|
)
|
|
$
|
4,873
|
|
$
|
(524
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
7
|
|
|
|
|
|
|
$
|
12
|
|
$
|
(14
|
)
|
|
|
|
|
$
|
5
|
|
|
|
||||||||||||||
Financial derivatives
|
200
|
|
$
|
8
|
|
|
|
|
$
|
1
|
|
|
(24
|
)
|
|
|
|
|
185
|
|
$
|
10
|
|
|
|||||||||||||
Other liabilities
|
137
|
|
2
|
|
|
|
|
|
11
|
|
(78
|
)
|
|
$
|
2
|
|
$
|
(2
|
)
|
|
72
|
|
(6
|
)
|
|
||||||||||||
Total liabilities
|
$
|
344
|
|
$
|
10
|
|
|
|
|
|
$
|
1
|
|
$
|
23
|
|
$
|
(116
|
)
|
|
$
|
2
|
|
$
|
(2
|
)
|
|
$
|
262
|
|
$
|
4
|
|
|
|||
Net gains (losses)
|
|
$
|
(496
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
|
$
|
(528
|
)
|
(g)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized gains/losses on assets and liabilities held on Consolidated Balance Sheet at Mar. 31, 2019
(a) (c) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair Value Dec. 31, 2018
|
|
Included in Earnings
|
|
Included in Other comprehensive income (b)
|
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
Transfers into Level 3
|
|
Transfers out of Level 3
|
|
|
Fair Value Mar. 31, 2019
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
1
|
|
$
|
(1
|
)
|
|
|
$
|
3
|
|
$
|
(3
|
)
|
(e)
|
$
|
2
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
87
|
|
$
|
1
|
|
|
|
|
|
|
$
|
(15
|
)
|
|
|
|
73
|
|
$
|
1
|
|
|
||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
2,128
|
|
18
|
|
|
$
|
2
|
|
|
|
|
(106
|
)
|
|
|
|
2,042
|
|
|
|
||||||||||||||||
Asset-backed
|
274
|
|
|
|
2
|
|
|
|
|
(10
|
)
|
|
|
|
266
|
|
|
|
||||||||||||||||||
Other
|
84
|
|
|
|
|
1
|
|
|
|
|
|
|
|
85
|
|
|
|
|||||||||||||||||||
Total securities
available for sale |
2,486
|
|
18
|
|
|
4
|
|
1
|
|
|
|
(116
|
)
|
|
|
|
2,393
|
|
|
|
||||||||||||||||
Loans
|
272
|
|
3
|
|
|
|
20
|
|
(3
|
)
|
|
(14
|
)
|
2
|
|
(8
|
)
|
(e)
|
272
|
|
1
|
|
|
|||||||||||||
Equity investments
|
1,255
|
|
52
|
|
|
|
45
|
|
(135
|
)
|
|
|
|
|
|
1,217
|
|
|
|
|||||||||||||||||
Residential mortgage
servicing rights |
1,257
|
|
(106
|
)
|
|
|
6
|
|
|
$
|
7
|
|
(33
|
)
|
|
|
|
1,131
|
|
(106
|
)
|
|
||||||||||||||
Commercial mortgage
servicing rights |
726
|
|
(33
|
)
|
|
|
19
|
|
|
7
|
|
(38
|
)
|
|
|
|
681
|
|
(33
|
)
|
|
|||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
25
|
|
39
|
|
|
|
2
|
|
|
|
(10
|
)
|
|
|
|
56
|
|
41
|
|
|
||||||||||||||||
Other assets
|
45
|
|
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
|
||||||||||||||||||||
Total assets
|
$
|
6,157
|
|
$
|
(26
|
)
|
|
$
|
4
|
|
$
|
94
|
|
$
|
(139
|
)
|
$
|
14
|
|
$
|
(271
|
)
|
$
|
5
|
|
$
|
(11
|
)
|
|
$
|
5,827
|
|
$
|
(96
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
7
|
|
|
|
|
|
|
$
|
14
|
|
$
|
(15
|
)
|
|
|
|
$
|
6
|
|
|
|
||||||||||||||
Financial derivatives
|
268
|
|
$
|
30
|
|
|
|
|
$
|
2
|
|
|
(70
|
)
|
|
|
|
230
|
|
$
|
34
|
|
|
|||||||||||||
Other liabilities
|
58
|
|
9
|
|
|
|
|
|
2
|
|
(7
|
)
|
|
|
|
62
|
|
9
|
|
|
||||||||||||||||
Total liabilities
|
$
|
333
|
|
$
|
39
|
|
|
|
|
$
|
2
|
|
$
|
16
|
|
$
|
(92
|
)
|
|
|
|
$
|
298
|
|
$
|
43
|
|
|
||||||||
Net gains (losses)
|
|
$
|
(65
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
$
|
(139
|
)
|
(g)
|
(a)
|
Losses for assets are bracketed while losses for liabilities are not.
|
(b)
|
The difference in unrealized gains and losses for the period included in Other comprehensive income and changes in unrealized gains and losses for the period included in Other comprehensive income for securities available for sale held at the end of the reporting period were not significant.
|
(c)
|
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.
|
(d)
|
Upon adoption of ASU 2016-13 - Credit Losses, we discontinued the accounting for purchased impaired loans and elected the one-time fair value option election for some of these loans and certain nonperforming loans.
|
(e)
|
Residential mortgage loan transfers out of Level 3 are primarily driven by residential mortgage loans transferring to OREO as well as reclassification of mortgage loans held for sale to held for investment.
|
(f)
|
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.
|
(g)
|
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.
|
Level 3 Instruments Only
Dollars in millions
|
Fair Value
|
|
Valuation Techniques
|
Unobservable Inputs
|
Range (Weighted-Average) (a)
|
|
Commercial mortgage loans held for sale
|
$
|
64
|
|
Discounted cash flow
|
Spread over the benchmark curve (b)
|
530bps - 2,935bps (1,889bps)
|
Residential mortgage-backed
non-agency securities |
1,741
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate
|
1.0% - 36.2% (9.9%)
|
|
Constant default rate
|
0.0% - 14.1% (4.3%)
|
|||||
Loss severity
|
26.6% - 95.7% (51.9%)
|
|||||
Spread over the benchmark curve (b)
|
188bps weighted-average
|
|||||
Asset-backed securities
|
240
|
|
Priced by a third-party vendor using a discounted cash flow pricing model
|
Constant prepayment rate
|
1.0% - 22.0% (7.5%)
|
|
Constant default rate
|
1.0% - 7.2% (3.4%)
|
|||||
Loss severity
|
30.0% - 100.0% (57.6%)
|
|||||
Spread over the benchmark curve (b)
|
215bps weighted-average
|
|||||
Loans
|
184
|
|
Consensus pricing (c)
|
Cumulative default rate
|
3.6% - 100.0% (76.7%)
|
|
Loss severity
|
0.0% - 100.0% (14.5%)
|
|||||
Discount rate
|
5.0% - 8.0% (5.2%)
|
|||||
|
72
|
|
Discounted cash flow
|
Loss severity
|
8.0% weighted-average
|
|
Discount rate
|
4.8% weighted-average
|
|||||
|
44
|
|
Consensus pricing (c)
|
Credit and Liquidity discount
|
0.0% - 99.0% (63.4%)
|
|
Equity investments
|
1,276
|
|
Multiple of adjusted earnings
|
Multiple of earnings
|
5.0x - 16.5x (8.5x)
|
|
Residential mortgage servicing rights
|
995
|
|
Discounted cash flow
|
Constant prepayment rate
|
0.0% - 53.8% (13.5%)
|
|
Spread over the benchmark curve (b)
|
320bps - 1,435bps (769bps)
|
|||||
Commercial mortgage servicing rights
|
649
|
|
Discounted cash flow
|
Constant prepayment rate
|
3.5% - 18.1% (4.6%)
|
|
Discount rate
|
5.6% - 8.1% (7.9%)
|
|||||
Financial derivatives - Swaps related to
sales of certain Visa Class B common shares |
(176
|
)
|
Discounted cash flow
|
Estimated conversion factor of Visa Class B shares into Class A shares
|
162.3% weighted-average
|
|
Estimated annual growth rate of Visa Class A share price
|
16.0%
|
|||||
Estimated length of litigation
resolution date |
Q1 2021
|
|||||
Insignificant Level 3 assets, net of
liabilities (d) |
(38
|
)
|
|
|
|
|
Total Level 3 assets, net of liabilities (e)
|
$
|
5,051
|
|
|
|
|
(a)
|
Unobservable inputs were weighted by the relative fair value of the instruments.
|
(b)
|
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.
|
(c)
|
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.
|
(d)
|
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 securities, residential mortgage loans held for sale, other assets, other borrowed funds and other liabilities.
|
(e)
|
Consisted of total Level 3 assets of $4.9 billion and total Level 3 liabilities of $.3 billion as of March 31, 2020 and $5.4 billion and $.3 billion as of December 31, 2019, respectively.
|
|
Fair Value
|
|
Gains (Losses)
Three months ended
|
||||||||||||
In millions
|
March 31
2020 |
|
|
December 31
2019 |
|
|
March 31
2020 |
|
|
March 31
2019 |
|
||||
Assets
|
|
|
|
|
|
|
|
||||||||
Nonaccrual loans
|
$
|
140
|
|
|
$
|
136
|
|
|
$
|
(28
|
)
|
|
$
|
(18
|
)
|
Loans held for sale
|
150
|
|
|
|
|
|
|
|
|
|
|||||
OREO and foreclosed assets
|
25
|
|
|
57
|
|
|
(1
|
)
|
|
(2
|
)
|
||||
Long-lived assets
|
5
|
|
|
5
|
|
|
(1
|
)
|
|
(4
|
)
|
||||
Total assets
|
$
|
320
|
|
|
$
|
198
|
|
|
$
|
(30
|
)
|
|
$
|
(24
|
)
|
(a)
|
All Level 3 for the periods presented.
|
(b)
|
Valuation techniques applied were fair value of property or collateral.
|
(c)
|
Unobservable inputs used were appraised value/sales price, broker opinions or projected income/required improvement costs. Additional quantitative information was not meaningful for the periods presented.
|
|
March 31, 2020
|
|
December 31, 2019
|
|
||||||||||||||||||||
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
|
$
|
915
|
|
|
$
|
872
|
|
|
$
|
43
|
|
|
$
|
813
|
|
|
$
|
792
|
|
|
$
|
21
|
|
|
Accruing loans 90 days or more past due
|
3
|
|
|
3
|
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
||||||
Nonaccrual loans
|
9
|
|
|
9
|
|
|
|
|
|
4
|
|
|
4
|
|
|
|
|
|||||||
Total
|
$
|
927
|
|
|
$
|
884
|
|
|
$
|
43
|
|
|
$
|
819
|
|
|
$
|
798
|
|
|
$
|
21
|
|
|
Commercial mortgage loans held for sale (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing loans
|
$
|
537
|
|
|
$
|
521
|
|
|
$
|
16
|
|
|
$
|
245
|
|
|
$
|
263
|
|
|
$
|
(18
|
)
|
|
Nonaccrual loans
|
1
|
|
|
1
|
|
|
|
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
||||||
Total
|
$
|
538
|
|
|
$
|
522
|
|
|
$
|
16
|
|
|
$
|
246
|
|
|
$
|
265
|
|
|
$
|
(19
|
)
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performing loans
|
$
|
289
|
|
|
$
|
303
|
|
|
$
|
(14
|
)
|
|
$
|
291
|
|
|
$
|
304
|
|
|
$
|
(13
|
)
|
|
Accruing loans 90 days or more past due
|
262
|
|
|
275
|
|
|
(13
|
)
|
|
285
|
|
|
296
|
|
|
(11
|
)
|
|
||||||
Nonaccrual loans
|
529
|
|
|
801
|
|
|
(272
|
)
|
|
166
|
|
|
265
|
|
|
(99
|
)
|
|
||||||
Total
|
$
|
1,080
|
|
|
$
|
1,379
|
|
|
$
|
(299
|
)
|
|
$
|
742
|
|
|
$
|
865
|
|
|
$
|
(123
|
)
|
|
Other assets
|
$
|
85
|
|
|
$
|
118
|
|
|
$
|
(33
|
)
|
|
$
|
132
|
|
|
$
|
125
|
|
|
$
|
7
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other borrowed funds
|
$
|
48
|
|
|
$
|
49
|
|
|
$
|
(1
|
)
|
|
$
|
63
|
|
|
$
|
64
|
|
|
$
|
(1
|
)
|
|
(a)
|
There were no accruing loans 90 days or more past due within this category at March 31, 2020 or December 31, 2019.
|
|
Gains (Losses)
|
||||||
|
Three months ended
|
||||||
|
March 31
|
|
|
March 31
|
|
||
In millions
|
2020
|
|
|
2019
|
|
||
Assets
|
|
|
|
||||
Residential mortgage loans held for sale
|
$
|
46
|
|
|
$
|
14
|
|
Commercial mortgage loans held for sale
|
$
|
48
|
|
|
$
|
5
|
|
Loans
|
$
|
18
|
|
|
$
|
4
|
|
Other assets
|
$
|
(36
|
)
|
|
$
|
9
|
|
(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
|
|
|
|||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
7,493
|
|
|
$
|
7,493
|
|
|
$
|
7,493
|
|
|
|
|
|
|
||||
Interest-earning deposits with banks
|
19,986
|
|
|
19,986
|
|
|
|
|
$
|
19,986
|
|
|
|
|
||||||
Securities held to maturity
|
1,469
|
|
|
1,621
|
|
|
924
|
|
|
542
|
|
|
$
|
155
|
|
|
||||
Net loans (excludes leases)
|
252,557
|
|
|
259,894
|
|
|
|
|
|
|
259,894
|
|
|
|||||||
Other assets
|
5,493
|
|
|
5,493
|
|
|
|
|
5,493
|
|
|
|
|
|||||||
Total assets
|
$
|
286,998
|
|
|
$
|
294,487
|
|
|
$
|
8,417
|
|
|
$
|
26,021
|
|
|
$
|
260,049
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
$
|
22,440
|
|
|
$
|
22,399
|
|
|
|
|
$
|
22,399
|
|
|
|
|
||||
Borrowed funds
|
71,975
|
|
|
70,660
|
|
|
|
|
68,909
|
|
|
$
|
1,751
|
|
|
|||||
Unfunded loan commitments and letters of credit
|
450
|
|
|
450
|
|
|
|
|
|
|
450
|
|
|
|||||||
Other liabilities
|
456
|
|
|
456
|
|
|
|
|
456
|
|
|
|
|
|||||||
Total liabilities
|
$
|
95,321
|
|
|
$
|
93,965
|
|
|
|
|
$
|
91,764
|
|
|
$
|
2,201
|
|
|
||
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
5,061
|
|
|
$
|
5,061
|
|
|
$
|
5,061
|
|
|
|
|
|
|
||||
Interest-earning deposits with banks
|
23,413
|
|
|
23,413
|
|
|
|
|
$
|
23,413
|
|
|
|
|
||||||
Securities held to maturity
|
17,661
|
|
|
18,044
|
|
|
832
|
|
|
17,039
|
|
|
$
|
173
|
|
|
||||
Net loans (excludes leases)
|
229,205
|
|
|
232,670
|
|
|
|
|
|
|
232,670
|
|
|
|||||||
Other assets
|
5,700
|
|
|
5,700
|
|
|
|
|
5,692
|
|
|
8
|
|
|
||||||
Total assets
|
$
|
281,040
|
|
|
$
|
284,888
|
|
|
$
|
5,893
|
|
|
$
|
46,144
|
|
|
$
|
232,851
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
$
|
21,663
|
|
|
$
|
21,425
|
|
|
|
|
$
|
21,425
|
|
|
|
|
||||
Borrowed funds
|
59,745
|
|
|
60,399
|
|
|
|
|
58,622
|
|
|
$
|
1,777
|
|
|
|||||
Unfunded loan commitments and letters of credit
|
318
|
|
|
318
|
|
|
|
|
|
|
318
|
|
|
|||||||
Other liabilities
|
506
|
|
|
506
|
|
|
|
|
506
|
|
|
|
|
|||||||
Total liabilities
|
$
|
82,232
|
|
|
$
|
82,648
|
|
|
|
|
$
|
80,553
|
|
|
$
|
2,095
|
|
|
•
|
financial instruments recorded at fair value on a recurring basis (as they are disclosed in Table 65);
|
•
|
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 (MSRs);
|
•
|
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 under ASU 2016-01.
|
|
March 31, 2020
|
December 31, 2019
|
||||||||||||||||
In millions
|
Notional /
Contract Amount
|
|
Asset Fair
Value (b)
|
|
Liability Fair
Value (c)
|
|
Notional /
Contract Amount
|
|
Asset Fair
Value (b)
|
|
Liability Fair
Value (c)
|
|
||||||
Derivatives used for hedging
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts (d):
|
|
|
|
|
|
|
||||||||||||
Fair value hedges
|
$
|
31,764
|
|
|
|
$
|
30,663
|
|
|
|
||||||||
Cash flow hedges
|
24,889
|
|
$
|
133
|
|
|
23,642
|
|
$
|
6
|
|
|
||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
||||||||||||
Net investment hedges
|
1,182
|
|
70
|
|
|
1,102
|
|
|
|
$
|
6
|
|
||||||
Total derivatives designated for hedging
|
$
|
57,835
|
|
$
|
203
|
|
|
|
$
|
55,407
|
|
$
|
6
|
|
$
|
6
|
|
|
Derivatives not used for hedging
|
|
|
|
|
|
|
||||||||||||
Derivatives used for mortgage banking activities (e):
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
$
|
54,029
|
|
|
|
$
|
52,007
|
|
$
|
1
|
|
|
||||||
Futures (f)
|
2,901
|
|
|
|
3,487
|
|
|
|
||||||||||
Mortgage-backed commitments
|
19,022
|
|
$
|
248
|
|
$
|
206
|
|
7,738
|
|
60
|
|
$
|
44
|
|
|||
Other
|
7,168
|
|
35
|
|
49
|
|
3,134
|
|
32
|
|
23
|
|
||||||
Total interest rate contracts
|
83,120
|
|
283
|
|
255
|
|
66,366
|
|
93
|
|
67
|
|
||||||
Derivatives used for customer-related activities:
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
268,654
|
|
6,346
|
|
1,834
|
|
249,075
|
|
2,769
|
|
1,187
|
|
||||||
Futures (f)
|
1,491
|
|
|
|
703
|
|
|
|
||||||||||
Mortgage-backed commitments
|
7,182
|
|
44
|
|
71
|
|
3,721
|
|
2
|
|
6
|
|
||||||
Other
|
23,439
|
|
299
|
|
106
|
|
21,379
|
|
113
|
|
33
|
|
||||||
Total interest rate contracts
|
300,766
|
|
6,689
|
|
2,011
|
|
274,878
|
|
2,884
|
|
1,226
|
|
||||||
Commodity contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
5,152
|
|
792
|
|
783
|
|
5,204
|
|
234
|
|
229
|
|
||||||
Other
|
4,033
|
|
252
|
|
252
|
|
4,203
|
|
72
|
|
72
|
|
||||||
Total commodity contracts
|
9,185
|
|
1,044
|
|
1,035
|
|
9,407
|
|
306
|
|
301
|
|
||||||
Foreign exchange contracts and other
|
27,099
|
|
413
|
|
436
|
|
27,120
|
|
204
|
|
162
|
|
||||||
Total foreign exchange contracts and other
|
337,050
|
|
8,146
|
|
3,482
|
|
311,405
|
|
3,394
|
|
1,689
|
|
||||||
Derivatives used for other risk management activities:
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts and other
|
10,487
|
|
141
|
|
191
|
|
10,201
|
|
9
|
|
257
|
|
||||||
Total derivatives not designated for hedging
|
$
|
430,657
|
|
$
|
8,570
|
|
$
|
3,928
|
|
$
|
387,972
|
|
$
|
3,496
|
|
$
|
2,013
|
|
Total gross derivatives
|
$
|
488,492
|
|
$
|
8,773
|
|
$
|
3,928
|
|
$
|
443,379
|
|
$
|
3,502
|
|
$
|
2,019
|
|
Less: Impact of legally enforceable master netting agreements
|
|
1,341
|
|
1,341
|
|
|
690
|
|
690
|
|
||||||||
Less: Cash collateral received/paid
|
|
2,110
|
|
1,109
|
|
|
616
|
|
790
|
|
||||||||
Total derivatives
|
|
$
|
5,322
|
|
$
|
1,478
|
|
|
|
$
|
2,196
|
|
$
|
539
|
|
(a)
|
Centrally cleared derivatives are settled in cash daily and result in no derivative asset or derivative liability being recognized on our Consolidated Balance Sheet.
|
(b)
|
Included in Other assets on our Consolidated Balance Sheet.
|
(c)
|
Included in Other liabilities on our Consolidated Balance Sheet.
|
(d)
|
Represents primarily swaps.
|
(e)
|
Includes both residential and commercial mortgage banking activities.
|
(f)
|
Futures contracts settle in cash daily and, therefore, no derivative asset or derivative liability is recognized on our Consolidated Balance Sheet.
|
|
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 March 31, 2020
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,480
|
|
$
|
582
|
|
$
|
314
|
|
$
|
343
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
234
|
|
$
|
(1,361
|
)
|
|
||||
Derivatives
|
|
$
|
(231
|
)
|
$
|
1,339
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(2
|
)
|
$
|
59
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
42
|
|
$
|
2
|
|
|
|
$
|
1
|
|
|
For the three months ended March 31, 2019
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,602
|
|
$
|
620
|
|
$
|
481
|
|
$
|
308
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
58
|
|
$
|
(274
|
)
|
|
||||
Derivatives
|
|
$
|
(55
|
)
|
$
|
228
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
5
|
|
$
|
11
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
(8
|
)
|
$
|
1
|
|
|
$
|
15
|
|
(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.
|
|
March 31, 2020
|
|
December 31, 2019
|
|||||||||||||
In millions
|
Carrying Value of the Hedged Items
|
|
|
Cumulative Fair Value Hedge Adjustment included in the Carrying Value of Hedged Items (a)
|
|
|
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)
|
$
|
5,020
|
|
|
$
|
222
|
|
|
$
|
5,666
|
|
|
$
|
59
|
|
|
Borrowed funds
|
$
|
31,463
|
|
|
$
|
1,909
|
|
|
$
|
28,616
|
|
|
$
|
548
|
|
|
(a)
|
Includes $(.2) billion and $(.3) billion of fair value hedge adjustments primarily related to discontinued borrowed funds hedge relationships for March 31, 2020 and December 31, 2019, respectively.
|
(b)
|
Carrying value shown represents amortized cost.
|
|
Three months ended
March 31 |
|||||
In millions
|
2020
|
|
2019
|
|
||
Derivatives used for mortgage banking activities:
|
|
|
||||
Interest rate contracts (a)
|
$
|
654
|
|
$
|
128
|
|
Derivatives used for customer-related activities:
|
|
|
||||
Interest rate contracts
|
2
|
|
(2
|
)
|
||
Foreign exchange contracts and other (b)
|
11
|
|
23
|
|
||
Gains (losses) from customer-related activities (c)
|
13
|
|
21
|
|
||
Derivatives used for other risk management activities:
|
|
|
||||
Foreign exchange contracts and other (c)
|
207
|
|
(54
|
)
|
||
Total gains (losses) from derivatives not designated as hedging instruments
|
$
|
874
|
|
$
|
95
|
|
(a)
|
Included in Residential mortgage, Corporate services and Other noninterest income on our Consolidated Income Statement.
|
(b)
|
Includes an insignificant amount of gains (losses) on commodity contracts for all periods presented.
|
(c)
|
Included in Other noninterest income on our Consolidated Income Statement.
|
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
|
|
|
|||||||||||
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
296
|
|
|
|
|
|
|
$
|
296
|
|
|
|
|
|
|
$
|
296
|
|
|
||||||
Over-the-counter
|
|
6,809
|
|
|
$
|
499
|
|
|
$
|
1,701
|
|
|
4,609
|
|
|
|
|
$
|
634
|
|
|
3,975
|
|
|
|||
Commodity contracts
|
|
1,044
|
|
|
484
|
|
|
382
|
|
|
178
|
|
|
|
|
|
|
178
|
|
|
|||||||
Foreign exchange and other contracts
|
|
624
|
|
|
358
|
|
|
27
|
|
|
239
|
|
|
|
|
1
|
|
|
238
|
|
|
||||||
Total derivative assets
|
|
$
|
8,773
|
|
|
$
|
1,341
|
|
|
$
|
2,110
|
|
|
$
|
5,322
|
|
|
(a)
|
|
$
|
635
|
|
|
$
|
4,687
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
194
|
|
|
|
|
|
|
$
|
194
|
|
|
|
|
|
|
$
|
194
|
|
|
||||||
Over-the-counter
|
|
2,072
|
|
|
$
|
901
|
|
|
$
|
970
|
|
|
201
|
|
|
|
|
|
|
201
|
|
|
|||||
Commodity contracts
|
|
1,035
|
|
|
268
|
|
|
22
|
|
|
745
|
|
|
|
|
|
|
745
|
|
|
|||||||
Foreign exchange and other contracts
|
|
627
|
|
|
172
|
|
|
117
|
|
|
338
|
|
|
|
|
|
|
338
|
|
|
|||||||
Total derivative liabilities
|
|
$
|
3,928
|
|
|
$
|
1,341
|
|
|
$
|
1,109
|
|
|
$
|
1,478
|
|
|
(b)
|
|
|
|
|
$
|
1,478
|
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
14
|
|
|
|
|
|
|
$
|
14
|
|
|
|
|
|
|
$
|
14
|
|
|
||||||
Over-the-counter
|
|
2,969
|
|
|
$
|
365
|
|
|
$
|
593
|
|
|
2,011
|
|
|
|
|
$
|
215
|
|
|
1,796
|
|
|
|||
Commodity contracts
|
|
306
|
|
|
198
|
|
|
18
|
|
|
90
|
|
|
|
|
|
|
90
|
|
|
|||||||
Foreign exchange and other contracts
|
|
213
|
|
|
127
|
|
|
5
|
|
|
81
|
|
|
|
|
|
|
81
|
|
|
|||||||
Total derivative assets
|
|
$
|
3,502
|
|
|
$
|
690
|
|
|
$
|
616
|
|
|
$
|
2,196
|
|
|
(a)
|
|
$
|
215
|
|
|
$
|
1,981
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
14
|
|
|
|
|
|
|
$
|
14
|
|
|
|
|
|
|
$
|
14
|
|
|
||||||
Over-the-counter
|
|
1,279
|
|
|
$
|
475
|
|
|
$
|
692
|
|
|
112
|
|
|
|
|
|
|
112
|
|
|
|||||
Commodity contracts
|
|
301
|
|
|
152
|
|
|
17
|
|
|
132
|
|
|
|
|
|
|
132
|
|
|
|||||||
Foreign exchange and other contracts
|
|
425
|
|
|
63
|
|
|
81
|
|
|
281
|
|
|
|
|
|
|
281
|
|
|
|||||||
Total derivative liabilities
|
|
$
|
2,019
|
|
|
$
|
690
|
|
|
$
|
790
|
|
|
$
|
539
|
|
|
(b)
|
|
|
|
|
$
|
539
|
|
|
(a)
|
Represents the net amount of derivative assets included in Other assets on our Consolidated Balance Sheet.
|
(b)
|
Represents the net amount of derivative liabilities included in Other liabilities on our Consolidated Balance Sheet.
|
•
|
Retail Banking
|
•
|
Corporate & Institutional Banking
|
•
|
Asset Management Group
|
•
|
BlackRock
|
Three months ended March 31
In millions |
|
Retail Banking
|
|
|
Corporate &
Institutional Banking |
|
|
Asset
Management Group |
|
|
BlackRock
|
|
|
Other
|
|
|
Consolidated (a)
|
|
||||||
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
1,456
|
|
|
$
|
950
|
|
|
$
|
88
|
|
|
|
|
$
|
17
|
|
|
$
|
2,511
|
|
||
Noninterest income
|
|
788
|
|
|
694
|
|
|
204
|
|
|
$
|
180
|
|
|
140
|
|
|
2,006
|
|
|||||
Total revenue
|
|
2,244
|
|
|
1,644
|
|
|
292
|
|
|
180
|
|
|
157
|
|
|
4,517
|
|
||||||
Provision for credit losses
|
|
445
|
|
|
458
|
|
|
3
|
|
|
|
|
8
|
|
|
914
|
|
|||||||
Depreciation and amortization
|
|
57
|
|
|
48
|
|
|
11
|
|
|
|
|
124
|
|
|
240
|
|
|||||||
Other noninterest expense
|
|
1,479
|
|
|
674
|
|
|
208
|
|
|
|
|
(58
|
)
|
|
2,303
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
263
|
|
|
464
|
|
|
70
|
|
|
180
|
|
|
83
|
|
|
1,060
|
|
||||||
Income taxes (benefit)
|
|
62
|
|
|
94
|
|
|
16
|
|
|
23
|
|
|
(50
|
)
|
|
145
|
|
||||||
Net income
|
|
$
|
201
|
|
|
$
|
370
|
|
|
$
|
54
|
|
|
$
|
157
|
|
|
$
|
133
|
|
|
$
|
915
|
|
Average Assets (b)
|
|
$
|
97,062
|
|
|
$
|
172,502
|
|
|
$
|
7,801
|
|
|
$
|
8,511
|
|
|
$
|
126,560
|
|
|
$
|
412,436
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net interest income
|
|
$
|
1,349
|
|
|
$
|
877
|
|
|
$
|
70
|
|
|
|
|
$
|
179
|
|
|
$
|
2,475
|
|
||
Noninterest income
|
|
595
|
|
|
576
|
|
|
217
|
|
|
$
|
233
|
|
|
190
|
|
|
1,811
|
|
|||||
Total revenue
|
|
1,944
|
|
|
1,453
|
|
|
287
|
|
|
233
|
|
|
369
|
|
|
4,286
|
|
||||||
Provision for credit losses (benefit)
|
|
128
|
|
|
71
|
|
|
(1
|
)
|
|
|
|
(9
|
)
|
|
189
|
|
|||||||
Depreciation and amortization
|
|
51
|
|
|
50
|
|
|
12
|
|
|
|
|
121
|
|
|
234
|
|
|||||||
Other noninterest expense
|
|
1,417
|
|
|
636
|
|
|
218
|
|
|
|
|
73
|
|
|
2,344
|
|
|||||||
Income before income taxes and noncontrolling interests
|
|
348
|
|
|
696
|
|
|
58
|
|
|
233
|
|
|
184
|
|
|
1,519
|
|
||||||
Income taxes (benefit)
|
|
84
|
|
|
144
|
|
|
13
|
|
|
36
|
|
|
(29
|
)
|
|
248
|
|
||||||
Net income
|
|
$
|
264
|
|
|
$
|
552
|
|
|
$
|
45
|
|
|
$
|
197
|
|
|
$
|
213
|
|
|
$
|
1,271
|
|
Average Assets (b)
|
|
$
|
91,255
|
|
|
$
|
157,169
|
|
|
$
|
7,259
|
|
|
$
|
8,080
|
|
|
$
|
122,135
|
|
|
$
|
385,898
|
|
(a)
|
There were no material intersegment revenues for the three months ended March 31, 2020 and 2019.
|
(b)
|
Period-end balances for BlackRock.
|
•
|
Wealth Management provides products and services to individuals and their families including investment and retirement planning, customized investment management, private banking, and trust management and administration for individuals and their families.
|
•
|
Our Hawthorn unit provides multi-generational family planning including estate, financial, tax planning, fiduciary, investment management and consulting, private banking, personal administrative services, asset custody and customized performance reporting to ultra high net worth clients.
|
•
|
Institutional asset management provides outsourced chief investment officer, custody, private real estate, cash and fixed income client solutions, and fiduciary retirement advisory services to institutional clients including corporations, healthcare systems, insurance companies, unions, municipalities and non-profits.
|
|
Three months ended
March 31 |
|||||
In millions
|
2020
|
|
2019
|
|
||
Product
|
|
|
||||
Deposit account fees
|
$
|
158
|
|
$
|
148
|
|
Debit card fees
|
129
|
|
124
|
|
||
Brokerage fees
|
93
|
|
89
|
|
||
Merchant services
|
49
|
|
48
|
|
||
Net credit card fees (a)
|
41
|
|
48
|
|
||
Other
|
56
|
|
66
|
|
||
Total in-scope noninterest income by product
|
$
|
526
|
|
$
|
523
|
|
Reconciliation to total Retail Banking noninterest income
|
|
|
||||
Total in-scope noninterest income
|
$
|
526
|
|
$
|
523
|
|
Total out-of-scope noninterest income (b)
|
262
|
|
72
|
|
||
Total Retail Banking noninterest income
|
$
|
788
|
|
$
|
595
|
|
(a)
|
Net credit card fees consists of interchange fees of $118 million and $112 million and credit card reward costs of $77 million and $64 million for the three months ended March 31, 2020 and 2019, 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.
|
|
Three months ended
March 31 |
|||||
In millions
|
2020
|
|
2019
|
|
||
Product
|
|
|
||||
Treasury management fees
|
$
|
216
|
|
$
|
199
|
|
Capital markets fees
|
175
|
|
127
|
|
||
Commercial mortgage banking activities
|
26
|
|
25
|
|
||
Other
|
20
|
|
17
|
|
||
Total in-scope noninterest income by product
|
$
|
437
|
|
$
|
368
|
|
Reconciliation to total Corporate & Institutional Banking noninterest income
|
|
|
||||
Total in-scope noninterest income
|
$
|
437
|
|
$
|
368
|
|
Total out-of-scope noninterest income (a)
|
257
|
|
208
|
|
||
Total Corporate & Institutional Banking noninterest income
|
$
|
694
|
|
$
|
576
|
|
(a)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
|
Three months ended
March 31 |
|||||
In millions
|
2020
|
|
2019
|
|
||
Customer Type
|
|
|
||||
Personal
|
$
|
150
|
|
$
|
147
|
|
Institutional
|
51
|
|
65
|
|
||
Total in-scope noninterest income by customer type
|
$
|
201
|
|
$
|
212
|
|
Reconciliation to Asset Management Group noninterest income
|
|
|
||||
Total in-scope noninterest income
|
$
|
201
|
|
$
|
212
|
|
Total out-of-scope noninterest income (a)
|
3
|
|
5
|
|
||
Total Asset Management Group noninterest income
|
$
|
204
|
|
$
|
217
|
|
(a)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
|
Three months ended March 31
|
|
||||||||||||||||||||
|
2020
|
|
2019
|
|
||||||||||||||||||
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
|
$
|
49,636
|
|
|
$
|
326
|
|
|
2.63
|
%
|
|
$
|
29,002
|
|
|
$
|
213
|
|
|
2.94
|
%
|
|
Non-agency
|
1,617
|
|
|
32
|
|
|
7.87
|
%
|
|
1,890
|
|
|
35
|
|
|
7.31
|
%
|
|
||||
Commercial mortgage-backed
|
6,734
|
|
|
50
|
|
|
2.95
|
%
|
|
5,368
|
|
|
42
|
|
|
3.13
|
%
|
|
||||
Asset-backed
|
5,003
|
|
|
38
|
|
|
3.05
|
%
|
|
5,136
|
|
|
43
|
|
|
3.35
|
%
|
|
||||
U.S. Treasury and government agencies
|
15,938
|
|
|
92
|
|
|
2.29
|
%
|
|
18,240
|
|
|
114
|
|
|
2.49
|
%
|
|
||||
Other
|
4,024
|
|
|
37
|
|
|
3.69
|
%
|
|
3,671
|
|
|
30
|
|
|
3.34
|
%
|
|
||||
Total securities available for sale
|
82,952
|
|
|
575
|
|
|
2.77
|
%
|
|
63,307
|
|
|
477
|
|
|
3.01
|
%
|
|
||||
Securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
15,627
|
|
|
118
|
|
|
3.01
|
%
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
600
|
|
|
5
|
|
|
3.53
|
%
|
|
||||
Asset-backed
|
51
|
|
|
—
|
|
|
2.77
|
%
|
|
177
|
|
|
2
|
|
|
3.83
|
%
|
|
||||
U.S. Treasury and government agencies
|
779
|
|
|
6
|
|
|
2.84
|
%
|
|
760
|
|
|
5
|
|
|
2.81
|
%
|
|
||||
Other
|
640
|
|
|
7
|
|
|
4.48
|
%
|
|
1,847
|
|
|
20
|
|
|
4.40
|
%
|
|
||||
Total securities held to maturity
|
1,470
|
|
|
13
|
|
|
3.56
|
%
|
|
19,011
|
|
|
150
|
|
|
3.16
|
%
|
|
||||
Total investment securities
|
84,422
|
|
|
588
|
|
|
2.78
|
%
|
|
82,318
|
|
|
627
|
|
|
3.05
|
%
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
128,723
|
|
|
1,180
|
|
|
3.62
|
%
|
|
119,345
|
|
|
1,291
|
|
|
4.33
|
%
|
|
||||
Commercial real estate
|
28,275
|
|
|
260
|
|
|
3.64
|
%
|
|
28,147
|
|
|
307
|
|
|
4.37
|
%
|
|
||||
Equipment lease financing
|
7,066
|
|
|
69
|
|
|
3.93
|
%
|
|
7,263
|
|
|
71
|
|
|
3.93
|
%
|
|
||||
Consumer
|
57,680
|
|
|
771
|
|
|
5.38
|
%
|
|
54,996
|
|
|
751
|
|
|
5.54
|
%
|
|
||||
Residential real estate
|
21,828
|
|
|
216
|
|
|
3.96
|
%
|
|
18,794
|
|
|
202
|
|
|
4.29
|
%
|
|
||||
Total loans
|
243,572
|
|
|
2,496
|
|
|
4.08
|
%
|
|
228,545
|
|
|
2,622
|
|
|
4.61
|
%
|
|
||||
Interest-earning deposits with banks
|
17,569
|
|
|
56
|
|
|
1.27
|
%
|
|
15,017
|
|
|
91
|
|
|
2.43
|
%
|
|
||||
Other interest-earning assets
|
9,468
|
|
|
82
|
|
|
3.51
|
%
|
|
11,068
|
|
|
115
|
|
|
4.14
|
%
|
|
||||
Total interest-earning assets/interest income
|
355,031
|
|
|
3,222
|
|
|
3.62
|
%
|
|
336,948
|
|
|
3,455
|
|
|
4.11
|
%
|
|
||||
Noninterest-earning assets
|
57,405
|
|
|
|
|
|
|
48,950
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
412,436
|
|
|
|
|
|
|
$
|
385,898
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
$
|
53,287
|
|
|
$
|
95
|
|
|
.72
|
%
|
|
$
|
54,702
|
|
|
$
|
155
|
|
|
1.15
|
%
|
|
Demand
|
70,931
|
|
|
72
|
|
|
.41
|
%
|
|
63,480
|
|
|
81
|
|
|
.52
|
%
|
|
||||
Savings
|
69,977
|
|
|
138
|
|
|
.79
|
%
|
|
58,821
|
|
|
164
|
|
|
1.13
|
%
|
|
||||
Time deposits
|
21,141
|
|
|
70
|
|
|
1.34
|
%
|
|
18,813
|
|
|
72
|
|
|
1.55
|
%
|
|
||||
Total interest-bearing deposits
|
215,336
|
|
|
375
|
|
|
.70
|
%
|
|
195,816
|
|
|
472
|
|
|
.98
|
%
|
|
||||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank borrowings
|
13,440
|
|
|
58
|
|
|
1.69
|
%
|
|
21,491
|
|
|
149
|
|
|
2.77
|
%
|
|
||||
Bank notes and senior debt
|
29,988
|
|
|
183
|
|
|
2.41
|
%
|
|
25,418
|
|
|
223
|
|
|
3.50
|
%
|
|
||||
Subordinated debt
|
5,934
|
|
|
40
|
|
|
2.73
|
%
|
|
5,883
|
|
|
66
|
|
|
4.50
|
%
|
|
||||
Other
|
7,826
|
|
|
33
|
|
|
1.69
|
%
|
|
6,991
|
|
|
43
|
|
|
2.44
|
%
|
|
||||
Total borrowed funds
|
57,188
|
|
|
314
|
|
|
2.18
|
%
|
|
59,783
|
|
|
481
|
|
|
3.21
|
%
|
|
||||
Total interest-bearing liabilities/interest expense
|
272,524
|
|
|
689
|
|
|
1.00
|
%
|
|
255,599
|
|
|
953
|
|
|
1.50
|
%
|
|
||||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
74,396
|
|
|
|
|
|
|
71,402
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
16,437
|
|
|
|
|
|
|
11,242
|
|
|
|
|
|
|
||||||||
Equity
|
49,079
|
|
|
|
|
|
|
47,655
|
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
412,436
|
|
|
|
|
|
|
$
|
385,898
|
|
|
|
|
|
|
||||||
Interest rate spread
|
|
|
|
|
2.62
|
%
|
|
|
|
|
|
2.61
|
%
|
|
||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
.22
|
|
|
|
|
|
|
.37
|
|
|
||||||||
Net interest income/margin
|
|
|
$
|
2,533
|
|
|
2.84
|
%
|
|
|
|
$
|
2,502
|
|
|
2.98
|
%
|
|
|
Three months ended December 31
|
|||||||||
|
2019
|
|||||||||
Taxable-equivalent basis
Dollars in millions
|
Average
Balances
|
|
|
Interest Income/Expense
|
|
|
Average Yields/Rates
|
|
||
Assets
|
|
|
|
|
|
|||||
Interest-earning assets:
|
|
|
|
|
|
|||||
Investment securities
|
|
|
|
|
|
|||||
Securities available for sale
|
|
|
|
|
|
|||||
Residential mortgage-backed
|
|
|
|
|
|
|||||
Agency
|
$
|
33,937
|
|
|
$
|
210
|
|
|
2.48
|
%
|
Non-agency
|
1,582
|
|
|
32
|
|
|
8.09
|
%
|
||
Commercial mortgage-backed
|
6,054
|
|
|
35
|
|
|
2.30
|
%
|
||
Asset-backed
|
5,059
|
|
|
41
|
|
|
3.26
|
%
|
||
U.S. Treasury and government agencies
|
15,966
|
|
|
94
|
|
|
2.31
|
%
|
||
Other
|
2,849
|
|
|
24
|
|
|
3.36
|
%
|
||
Total securities available for sale
|
65,447
|
|
|
436
|
|
|
2.65
|
%
|
||
Securities held to maturity
|
|
|
|
|
|
|||||
Residential mortgage-backed
|
14,943
|
|
|
98
|
|
|
2.63
|
%
|
||
Commercial mortgage-backed
|
498
|
|
|
6
|
|
|
4.44
|
%
|
||
Asset-backed
|
54
|
|
|
1
|
|
|
3.02
|
%
|
||
U.S. Treasury and government agencies
|
774
|
|
|
6
|
|
|
2.86
|
%
|
||
Other
|
1,794
|
|
|
19
|
|
|
4.47
|
%
|
||
Total securities held to maturity
|
18,063
|
|
|
130
|
|
|
2.87
|
%
|
||
Total investment securities
|
83,510
|
|
|
566
|
|
|
2.70
|
%
|
||
Loans
|
|
|
|
|
|
|||||
Commercial
|
124,876
|
|
|
1,238
|
|
|
3.88
|
%
|
||
Commercial real estate
|
28,670
|
|
|
285
|
|
|
3.89
|
%
|
||
Equipment lease financing
|
7,199
|
|
|
70
|
|
|
3.87
|
%
|
||
Consumer
|
56,765
|
|
|
779
|
|
|
5.45
|
%
|
||
Residential real estate
|
21,341
|
|
|
219
|
|
|
4.10
|
%
|
||
Total loans
|
238,851
|
|
|
2,591
|
|
|
4.27
|
%
|
||
Interest-earning deposits with banks
|
23,316
|
|
|
97
|
|
|
1.66
|
%
|
||
Other interest-earning assets
|
11,371
|
|
|
104
|
|
|
3.65
|
%
|
||
Total interest-earning assets/interest income
|
357,048
|
|
|
3,358
|
|
|
3.71
|
%
|
||
Noninterest-earning assets
|
54,371
|
|
|
|
|
|
||||
Total assets
|
$
|
411,419
|
|
|
|
|
|
|||
Liabilities and Equity
|
|
|
|
|
|
|||||
Interest-bearing liabilities:
|
|
|
|
|
|
|||||
Interest-bearing deposits
|
|
|
|
|
|
|||||
Money market
|
$
|
56,209
|
|
|
132
|
|
|
.93
|
%
|
|
Demand
|
69,496
|
|
|
89
|
|
|
.51
|
%
|
||
Savings
|
66,827
|
|
|
164
|
|
|
.97
|
%
|
||
Time deposits
|
21,600
|
|
|
83
|
|
|
1.52
|
%
|
||
Total interest-bearing deposits
|
214,132
|
|
|
468
|
|
|
.87
|
%
|
||
Borrowed funds
|
|
|
|
|
|
|||||
Federal Home Loan Bank borrowings
|
18,944
|
|
|
102
|
|
|
2.11
|
%
|
||
Bank notes and senior debt
|
27,403
|
|
|
194
|
|
|
2.77
|
%
|
||
Subordinated debt
|
5,760
|
|
|
45
|
|
|
3.06
|
%
|
||
Other
|
7,926
|
|
|
37
|
|
|
1.89
|
%
|
||
Total borrowed funds
|
60,033
|
|
|
378
|
|
|
2.47
|
%
|
||
Total interest-bearing liabilities/interest expense
|
274,165
|
|
|
846
|
|
|
1.21
|
%
|
||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|||||
Noninterest-bearing deposits
|
73,626
|
|
|
|
|
|
||||
Accrued expenses and other liabilities
|
14,541
|
|
|
|
|
|
||||
Equity
|
49,087
|
|
|
|
|
|
||||
Total liabilities and equity
|
$
|
411,419
|
|
|
|
|
|
|||
Interest rate spread
|
|
|
|
|
2.50
|
%
|
||||
Impact of noninterest-bearing sources
|
|
|
|
|
.28
|
|
||||
Net interest income/margin
|
|
|
$
|
2,511
|
|
|
2.78
|
%
|
(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 March 31, 2020, December 31, 2019 and March 31, 2019 were $44 million, $43 million and $28 million, respectively.
|
(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.
|
|
|
Three months ended
|
||||||||||
In millions
|
|
March 31, 2020
|
|
|
December 31, 2019
|
|
|
March 31, 2019
|
|
|||
Net interest income (GAAP)
|
|
$
|
2,511
|
|
|
$
|
2,488
|
|
|
$
|
2,475
|
|
Taxable-equivalent adjustments
|
|
22
|
|
|
23
|
|
|
27
|
|
|||
Net interest income (Non-GAAP)
|
|
$
|
2,533
|
|
|
$
|
2,511
|
|
|
$
|
2,502
|
|
(a)
|
The interest income earned on certain interest-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.
|
•
|
The deterioration of national and global economic conditions, substantial increases in unemployment, and associated turmoil and volatility in the financial markets has negatively affected and is likely to continue to negatively affect, possibly materially, our financial performance and capital and liquidity. The following are the key factors contributing to this risk:
|
◦
|
There is a greater likelihood that more of our commercial and consumer customers or counterparties will become delinquent on their loans or other obligations to us, which, in turn, will result in a higher level of non-performing loans and net charge-offs. It will result in a higher and more volatile provision for credit losses for financial instruments held by us that are subject to CECL. Even if a loan returns to full performing status, it may be on modified terms that result in, for example, a term extension, interest rate reduction or principal deferral or forgiveness. Increases in loan delinquencies or modifications will also result in increased administrative costs.
|
◦
|
There has been and there is likely to continue to be a decrease in the demand for certain of our products and services.
|
◦
|
These rapidly changing and unprecedented market conditions have impacted and are likely to continue to impact the valuation of assets as reported within our consolidated financial statements, as well as causing substantial reductions in the value of our assets under management, all with the possible effects described in Item 1A of our 2019 Form 10-
|
◦
|
Although PNC’s capital and liquidity continue to be strong, these conditions also have and are likely to continue to negatively affect our capital and liquidity positions, possibly materially, which are critical to our ability to operate and grow our business. In addition, continued or accelerated disruption and volatility in the financial markets or long-lasting or deeper recessionary conditions may diminish our access to the capital markets. We have suspended our discretionary common share repurchase program and may take further actions that would limit a return of capital to shareholders, including potentially a reduction or suspension of the dividend payable to common shareholders, as a result of these conditions and their effect on our financial performance and position or as a result of regulatory guidance.
|
•
|
Some of the legislation responsive to the outbreak, including the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provides for certain commercial and consumer protections which are likely to alter the profitability of the transactions in which we engage, such as by allowing borrowers to delay payments on loans or other obligations to us and imposing other costs on us. These laws are also likely to delay or restrict our ability to realize the value of collateral by, for example, providing temporary foreclosure protection and eviction protection even when a customer is in breach of its obligations to us. We may also be limited in our ability to realize the value of collateral as a result of court closures and related delays. Moreover, collateral may be liquidated at prices insufficient to recover the full amount of exposure to us as a result of deteriorating economic conditions and volatile markets. See Recent Regulatory Developments in this Report for more information on PNC’s implementation of these programs.
|
•
|
Other laws related to employee benefits and the treatment of employees could also negatively impact us by increasing administrative, compensation and benefits costs by, for example, mandating coverage of certain COVID-19 related testing and treatment or mandating additional paid or unpaid leave. Further governmental action that is taken to mitigate the economic effects of the pandemic, as well as additional compensation or benefit actions taken by PNC, could adversely affect our financial condition and results of operations, possibly materially, in other ways that are not known now.
|
•
|
In response to the outbreak and its economic consequences, the Federal Reserve lowered its target for the federal funds rate to a range of 0% to 0.25%. As a result of the high percentage of our assets and liabilities that are in the form of interest-bearing or interest-related instruments, this change in interest rates will have a negative impact on our net interest income and net interest margin, which could be material and which could materially adversely affect our profitability. The possible effects of a low interest rate environment are further described in Item 1A of our 2019 Form 10-K in the Risk Factor headed “Our business and financial performance are impacted significantly by market interest rates and movements in those rates.” Moreover, such low rates increase the risk in the U.S. of a negative interest rate environment in which interest rates drop below zero, either broadly or for some types of instruments. For example, yields on one-month and three-month Treasuries briefly dropped below zero in March 2020. Such an occurrence would likely further reduce the interest we earn on loans and other earning assets, while also likely requiring us to pay to maintain our deposits with the Federal Reserve Bank. Our systems may not be able to handle adequately a negative interest rate environment and not all variable rate instruments are designed for such a circumstance. We cannot predict the nature or timing of future changes in monetary policies in response to the outbreak or the precise effects that they may have on our activities and financial results.
|
•
|
To protect our employees, customers and the communities in which we operate, we have modified the operations of many of our retail branches, including temporarily closing some branches, and have otherwise implemented work-from-home policies for a significant portion of our workforce. We believe we are capable of meeting the needs of our customers despite these modifications. However, these efforts may result in the loss of customers, impede our ability to perform certain transactions, and impair our ability to effectively identify, manage and control risk. For example, customers may be unwilling or unable to conduct transactions with us via online channels or through a local branch that is operating only in a drive-through mode. Another example is the infrastructure needed to provide products and services via online channels or to work effectively in a work-from-home environment, such as internet, telecommunications and internal information technology systems, may fail to perform as anticipated, resulting in our inability to deliver products or services or effectively manage the risks arising from our businesses. In addition, we rely on our employees, third party vendors and service providers and other counterparties, both domestically and abroad, to support many aspects of our business. Reduced workforces which may be caused by, but not limited to, illness, quarantine, stay at home or other government mandates, or difficulties transitioning back to an in office environment, could result in an adverse impact to our operations and financial performance. Redeployment of employees from current positions and of technology from current uses to support products and services responsive to the outbreak may further adversely impact our operations. Further, third party vendors, service providers and other counterparties, both domestically and abroad, face access, connectivity or other challenges operating within a work-from-home virtual environment.
|
•
|
In support of our employees, customers and communities, we may take steps beyond or in addition to those required by governmental or regulatory minimums which may further adversely impact our profitability. For example, we have and may continue to provide additional relief or forbearance to customers, health and wellness benefits to employees or financial support for community initiatives to assist those in need as a result of the outbreak. The actual or perceived failure to provide sufficient services, support or relief to those businesses or individuals in need or properly implement legislation responsive to the outbreak or our voluntary commitments to regulators could negatively impact our reputation with adverse consequences to our business. In addition, such actual or perceived failure, or operational and other issues that arise in connection with the implementation of government-mandated or other financial assistance or relief programs present elevated levels of legal and reputational risk, including the potential for governmental and regulatory inquiries, investigations and enforcement actions, as well as private lawsuits. Participation by PNC in governmental programs designed to provide liquidity to the financial system or impacted businesses, such as borrowing through the Federal Reserve discount window or borrowing from, or selling financial assets to, facilities established by the Federal Reserve or participation in programs under the CARES Act, also could expose us to governmental or public scrutiny and criticism, either at the time we participate in the program or subsequently.
|
2020 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)
|
|
|
January 1 - 31
|
4,056
|
|
$
|
153.22
|
|
4,052
|
|
82,040
|
|
February 1 - 29
|
4,423
|
|
$
|
147.96
|
|
3,982
|
|
78,058
|
|
March 1 - 31
|
2,030
|
|
$
|
107.57
|
|
2,030
|
|
76,028
|
|
Total
|
10,509
|
|
$
|
142.19
|
|
|
|
(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 2019 Annual Report on Form 10-K include additional information regarding our employee benefit and equity compensation plans that use PNC common stock.
|
(b)
|
On April 4, 2019, our Board of Directors approved the establishment of a new stock repurchase program authorization in the amount of 100 million shares of PNC common stock, effective July 1, 2019. The previous 2015 authorization was terminated as of end of day on June 30, 2019. Under this authorization, repurchases may be made in the open market or privately negotiated transactions, with the timing and exact amount of common stock repurchases depending 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 2019, we announced share repurchase programs of up to $4.3 billion for the four quarter period beginning with the third quarter of 2019, in accordance with PNC's 2019 capital plan. In January 2020, we announced an increase to these programs to repurchase up to an additional $1.0 billion in common shares through the end of the second quarter of 2020. In the first quarter of 2020, we repurchased 10.1 million shares of common stock on the open market, with an average price of $141.67 per share and an aggregate repurchase price of $1.4 billion. On March 16, 2020, PNC announced a temporary suspension of its common stock repurchase program through June 30, 2020 in conjunction with the Federal Reserve's effort to support the U.S. economy during the COVID-19 outbreak.
|
/s/ Robert Q. Reilly
|
Robert Q. Reilly
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 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 March 31, 2020 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
|