|
☒
|
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.
|
22-43, 54-66 and 99-105
|
Item 4. Controls and Procedures.
|
|
|
|
|
|
|
MD&A TABLE REFERENCE
|
|
|
Table
|
Description
|
Page
|
1
|
||
2
|
||
3
|
||
4
|
||
5
|
||
6
|
||
7
|
||
8
|
||
9
|
||
10
|
||
11
|
||
12
|
||
13
|
||
14
|
||
15
|
||
16
|
||
17
|
||
18
|
||
19
|
||
20
|
||
21
|
||
22
|
||
23
|
||
24
|
||
25
|
||
26
|
Allowance for Credit Losses by Loan Class
|
|
27
|
||
28
|
||
29
|
||
30
|
||
31
|
||
32
|
||
33
|
||
34
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE
|
|
|
Table
|
Description
|
Page
|
35
|
||
36
|
||
37
|
||
38
|
||
39
|
|
|
40
|
||
41
|
||
42
|
||
43
|
||
44
|
||
45
|
||
46
|
||
47
|
||
48
|
||
49
|
||
50
|
||
51
|
||
52
|
||
53
|
||
54
|
||
55
|
||
56
|
||
57
|
||
58
|
||
59
|
||
60
|
||
61
|
||
62
|
||
63
|
||
64
|
||
65
|
||
66
|
||
67
|
||
68
|
||
69
|
||
70
|
||
71
|
||
72
|
||
73
|
||
74
|
||
75
|
||
76
|
||
77
|
||
78
|
||
79
|
||
80
|
||
81
|
||
82
|
||
83
|
||
84
|
Dollars in millions, except per share data
Unaudited
|
Three months ended
June 30 |
Six months ended
June 30 |
|
||||||||||
2020
|
2019
|
2020
|
2019
|
|
|||||||||
Financial Results (a)
|
|
|
|
|
|
||||||||
Revenue
|
|
|
|
|
|
||||||||
Net interest income
|
$
|
2,527
|
|
$
|
2,498
|
|
$
|
5,038
|
|
$
|
4,973
|
|
|
Noninterest income
|
1,549
|
|
1,717
|
|
3,374
|
|
3,303
|
|
|
||||
Total revenue
|
4,076
|
|
4,215
|
|
8,412
|
|
8,276
|
|
|
||||
Provision for credit losses
|
2,463
|
|
180
|
|
3,377
|
|
369
|
|
|
||||
Noninterest expense
|
2,515
|
|
2,611
|
|
5,058
|
|
5,189
|
|
|
||||
Income (loss) from continuing operations before income taxes and noncontrolling interests
|
$
|
(902
|
)
|
$
|
1,424
|
|
$
|
(23
|
)
|
$
|
2,718
|
|
|
Income taxes (benefit) from continuing operations
|
(158
|
)
|
239
|
|
(38
|
)
|
451
|
|
|
||||
Net income (loss) from continuing operations
|
$
|
(744
|
)
|
$
|
1,185
|
|
$
|
15
|
|
$
|
2,267
|
|
|
Income from discontinued operations before taxes
|
$
|
5,596
|
|
$
|
224
|
|
$
|
5,777
|
|
$
|
449
|
|
|
Income taxes from discontinued operations
|
1,197
|
|
35
|
|
1,222
|
|
71
|
|
|
||||
Net income from discontinued operations
|
$
|
4,399
|
|
$
|
189
|
|
$
|
4,555
|
|
$
|
378
|
|
|
Net income
|
$
|
3,655
|
|
$
|
1,374
|
|
$
|
4,570
|
|
$
|
2,645
|
|
|
Less:
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests
|
7
|
|
12
|
|
14
|
|
22
|
|
|
||||
Preferred stock dividends (b)
|
55
|
|
55
|
|
118
|
|
118
|
|
|
||||
Preferred stock discount accretion and redemptions
|
1
|
|
1
|
|
2
|
|
2
|
|
|
||||
Net income attributable to common shareholders
|
$
|
3,592
|
|
$
|
1,306
|
|
$
|
4,436
|
|
$
|
2,503
|
|
|
Per Common Share
|
|
|
|
|
|
||||||||
Basic earnings (loss) from continuing operations
|
$
|
(1.90
|
)
|
$
|
2.47
|
|
$
|
(.29
|
)
|
$
|
4.68
|
|
|
Basic earnings from discontinued operations
|
10.28
|
|
.42
|
|
10.60
|
|
.83
|
|
|
||||
Total basic earnings
|
$
|
8.40
|
|
$
|
2.89
|
|
$
|
10.33
|
|
$
|
5.51
|
|
|
Diluted earnings (loss) from continuing operations
|
$
|
(1.90
|
)
|
$
|
2.47
|
|
$
|
(.29
|
)
|
$
|
4.67
|
|
|
Diluted earnings from discontinued operations
|
10.28
|
|
.41
|
|
10.59
|
|
.82
|
|
|
||||
Total diluted earnings
|
$
|
8.40
|
|
$
|
2.88
|
|
$
|
10.32
|
|
$
|
5.49
|
|
|
Cash dividends declared per common share
|
$
|
1.15
|
|
$
|
.95
|
|
$
|
2.30
|
|
$
|
1.90
|
|
|
Effective tax rate from continuing operations (c)
|
17.5
|
%
|
16.8
|
%
|
165.2
|
%
|
16.6
|
%
|
|
||||
Performance Ratios
|
|
|
|
|
|
||||||||
Net interest margin (d)
|
2.52
|
%
|
2.91
|
%
|
2.67
|
%
|
2.94
|
%
|
|
||||
Noninterest income to total revenue
|
38
|
%
|
41
|
%
|
40
|
%
|
40
|
%
|
|
||||
Efficiency
|
62
|
%
|
62
|
%
|
60
|
%
|
63
|
%
|
|
||||
Return on:
|
|
|
|
|
|
||||||||
Average common shareholders’ equity
|
30.11
|
%
|
11.75
|
%
|
19.15
|
%
|
11.45
|
%
|
|
||||
Average assets
|
3.21
|
%
|
1.39
|
%
|
2.11
|
%
|
1.36
|
%
|
|
(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)
|
Dividends are payable quarterly other than Series O, Series R and Series S preferred stock, which are payable semiannually, with the Series O payable in different quarters than the Series R and Series S preferred stock.
|
(c)
|
The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax.
|
(d)
|
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
|
June 30
2020 |
|
December 31
2019 |
|
June 30
2019 |
|
|
|||
Balance Sheet Data (dollars in millions, except per share data)
|
|
|
|
|
||||||
Assets
|
$
|
458,978
|
|
$
|
410,295
|
|
$
|
405,761
|
|
|
Loans
|
$
|
258,236
|
|
$
|
239,843
|
|
$
|
237,215
|
|
|
Allowance for loan and lease losses (b)
|
$
|
5,928
|
|
$
|
2,742
|
|
$
|
2,721
|
|
|
Interest-earning deposits with banks (c)
|
$
|
50,233
|
|
$
|
23,413
|
|
$
|
18,362
|
|
|
Investment securities
|
$
|
98,493
|
|
$
|
86,824
|
|
$
|
88,303
|
|
|
Loans held for sale
|
$
|
1,443
|
|
$
|
1,083
|
|
$
|
1,144
|
|
|
Equity investments
|
$
|
4,943
|
|
$
|
5,176
|
|
$
|
4,817
|
|
|
Asset held for sale (d)
|
|
$
|
8,558
|
|
$
|
8,184
|
|
|
||
Mortgage servicing rights
|
$
|
1,067
|
|
$
|
1,644
|
|
$
|
1,627
|
|
|
Goodwill
|
$
|
9,233
|
|
$
|
9,233
|
|
$
|
9,221
|
|
|
Other assets
|
$
|
34,920
|
|
$
|
32,202
|
|
$
|
34,193
|
|
|
Noninterest-bearing deposits
|
$
|
99,458
|
|
$
|
72,779
|
|
$
|
69,867
|
|
|
Interest-bearing deposits
|
$
|
246,539
|
|
$
|
215,761
|
|
$
|
203,393
|
|
|
Total deposits
|
$
|
345,997
|
|
$
|
288,540
|
|
$
|
273,260
|
|
|
Borrowed funds
|
$
|
47,026
|
|
$
|
60,263
|
|
$
|
69,025
|
|
|
Allowance for unfunded lending related commitments (b)
|
$
|
662
|
|
$
|
318
|
|
$
|
291
|
|
|
Total shareholders’ equity
|
$
|
52,923
|
|
$
|
49,314
|
|
$
|
49,340
|
|
|
Common shareholders’ equity
|
$
|
48,928
|
|
$
|
45,321
|
|
$
|
45,349
|
|
|
Accumulated other comprehensive income
|
$
|
3,069
|
|
$
|
799
|
|
$
|
631
|
|
|
Book value per common share
|
$
|
115.26
|
|
$
|
104.59
|
|
$
|
101.53
|
|
|
Period-end common shares outstanding (in millions)
|
425
|
|
433
|
|
447
|
|
|
|||
Loans to deposits
|
75
|
%
|
83
|
%
|
87
|
%
|
|
|||
Common shareholders’ equity to total assets
|
10.7
|
%
|
11.0
|
%
|
11.2
|
%
|
|
|||
Client Assets (in billions)
|
|
|
|
|
||||||
Discretionary client assets under management
|
$
|
151
|
|
$
|
154
|
|
$
|
162
|
|
|
Nondiscretionary client assets under administration
|
138
|
|
143
|
|
132
|
|
|
|||
Total client assets under administration
|
289
|
|
297
|
|
294
|
|
|
|||
Brokerage account client assets
|
53
|
|
54
|
|
52
|
|
|
|||
Total client assets
|
$
|
342
|
|
$
|
351
|
|
$
|
346
|
|
|
Basel III Capital Ratios (e) (f)
|
|
|
|
|
||||||
Common equity Tier 1
|
11.3
|
%
|
9.5
|
%
|
9.7
|
%
|
|
|||
Common equity Tier 1 fully implemented (g)
|
10.9
|
%
|
N/A
|
|
N/A
|
|
|
|||
Tier 1 risk-based
|
12.4
|
%
|
10.7
|
%
|
10.9
|
%
|
|
|||
Total capital risk-based (h)
|
14.9
|
%
|
12.7
|
%
|
12.8
|
%
|
|
|||
Leverage
|
9.4
|
%
|
9.1
|
%
|
9.6
|
%
|
|
|||
Supplementary leverage
|
9.3
|
%
|
7.6
|
%
|
8.0
|
%
|
|
|||
Asset Quality
|
|
|
|
|
||||||
Nonperforming loans to total loans
|
.73
|
%
|
.68
|
%
|
.73
|
%
|
|
|||
Nonperforming assets to total loans, OREO and foreclosed assets
|
.76
|
%
|
.73
|
%
|
.78
|
%
|
|
|||
Nonperforming assets to total assets
|
.43
|
%
|
.43
|
%
|
.46
|
%
|
|
|||
Net charge-offs to average loans (for the three months ended) (annualized)
|
.35
|
%
|
.35
|
%
|
.24
|
%
|
|
|||
Allowance for loan and lease losses to total loans (i)
|
2.30
|
%
|
1.14
|
%
|
1.15
|
%
|
|
|||
Allowance for credit losses to total loans (i) (j)
|
2.55
|
%
|
1.28
|
%
|
1.27
|
%
|
|
|||
Allowance for loan and lease losses to nonperforming loans (i)
|
316
|
%
|
168
|
%
|
158
|
%
|
|
|||
Accruing loans past due 90 days or more (in millions)
|
$
|
456
|
|
$
|
585
|
|
$
|
524
|
|
|
(a)
|
The Executive Summary and Consolidated Balance Sheet Review portions of this Financial Review provide information regarding items impacting the comparability of the periods presented.
|
(b)
|
Amounts at June 30, 2020 reflect 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. 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 $50.0 billion, $23.2 billion and $18.1 billion as of June 30, 2020, December 31, 2019 and June 30, 2019, respectively.
|
(d)
|
Represents our held for sale investment in BlackRock, Inc. In the second quarter of 2020, PNC divested its entire investment in BlackRock. Prior period BlackRock investment balances have been reclassified to the Asset held for sale line in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Refer to Note 1 Accounting Policies and Note 2 Discontinued Operations for additional details.
|
(e)
|
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.
|
(f)
|
The June 30, 2020 ratios are calculated to reflect PNC's election to adopt the CECL optional five-year transition provision, unless noted differently.
|
(g)
|
The June 30, 2020 fully implemented CET1 ratio is calculated to reflect the full impact of CECL and excludes the benefits of the five-year transition provision.
|
(h)
|
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.
|
(i)
|
Ratios at June 30, 2020 reflect the changes in methodology due to the adoption of the CECL accounting standard on January 1, 2020, along with increases in reserves during 2020 due to the significantly adverse economic impact of the pandemic and its resulting effects on loan portfolio credit quality and loan growth.
|
(j)
|
Calculated as the Allowance for loan and lease losses plus the Allowance 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 decreased $139 million, or 3%, to $4.1 billion.
|
•
|
Net interest income of $2.5 billion increased $29 million, or 1%.
|
•
|
Net interest margin decreased to 2.52% compared to 2.91% for the second quarter of 2019.
|
•
|
Noninterest income decreased $168 million, or 10%, to $1.6 billion.
|
•
|
Provision for credit losses of $2.5 billion, which was calculated under the Current Expected Credit Losses (CECL) accounting standard adopted January 1, 2020, increased $2.3 billion compared to the second quarter of 2019 reflecting the change in methodology together with the significantly adverse economic impact of the pandemic and its resulting effects on loan portfolio credit quality and loan growth.
|
•
|
Noninterest expense decreased $96 million, or 4%, to $2.5 billion.
|
•
|
Total assets increased $48.7 billion, or 12%, to $459.0 billion.
|
•
|
Total loans increased $18.4 billion, or 8%, to $258.2 billion.
|
•
|
Total commercial loans grew $19.6 billion, or 12%, to $180.2 billion, reflecting PPP lending under the CARES Act and higher utilization of loan commitments driven by the economic impact of the pandemic on customer liquidity preferences.
|
•
|
Total consumer loans decreased $1.2 billion, or 2%, to $78.0 billion.
|
•
|
Investment securities increased $11.7 billion, or 13%, to $98.5 billion.
|
•
|
Interest-earning deposits with banks, primarily with the Federal Reserve Bank, increased $26.8 billion to $50.2 billion due to higher liquidity from deposit growth and proceeds from the sale of our equity investment in BlackRock.
|
•
|
Total deposits increased $57.5 billion, or 20%, to $346.0 billion due to growth in commercial deposits reflecting pandemic-related accumulation of liquidity by customers and higher consumer deposits driven by government stimulus payments and lower consumer spending.
|
•
|
Borrowed funds decreased $13.2 billion, or 22%, to $47.0 billion reflecting use of liquidity from deposit growth and proceeds from the sale of our equity investment in BlackRock.
|
•
|
At June 30, 2020 compared to December 31, 2019:
|
•
|
Nonperforming assets of $2.0 billion increased $203 million, or 12%, driven by higher commercial nonperforming loans primarily related to industries economically impacted by the pandemic and the energy industry.
|
•
|
Overall loan delinquencies of $1.3 billion decreased $194 million, or 13%, reflecting CARES Act and other forbearance and extension treatments.
|
•
|
Net charge-offs were $236 million, or .35% of average loans on an annualized basis, in the second quarter of 2020 compared to $142 million, or .24%, for the second quarter of 2019. Commercial loan net charge-offs increased $75 million and consumer loan net charge-offs increased $19 million.
|
•
|
The allowance for credit losses increased to $6.6 billion, or 2.55% of total loans, at June 30, 2020, calculated under the CECL accounting standard adopted January 1, 2020, compared to $3.1 billion, or 1.28% of total loans, at December 31, 2019, due to the change in methodology together with the significantly adverse economic impact of the pandemic and its resulting effects on loan portfolio credit quality and loan growth.
|
•
|
The Basel III common equity Tier 1 (CET1) capital ratio increased to 11.3% at June 30, 2020 from 9.5% at December 31, 2019.
|
•
|
The June 30, 2020 ratio reflects a capital increase due to proceeds from the sale of our equity investment in BlackRock, changes under the Tailoring Rules, effective January 1, 2020 for PNC, 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 defined as the change in retained earnings at adoption plus or minus 25% of the change in CECL Allowance for credit losses (ACL) at the balance sheet date compared to CECL ACL at transition. The estimated CECL impact is added to CET1 capital through December 31, 2021, then phased-out over the following three years.
|
•
|
Common shareholders' equity increased 8% to $48.9 billion at June 30, 2020, compared to $45.3 billion at December 31, 2019.
|
•
|
The PNC board of directors declared a quarterly cash dividend on common stock payable on August 5, 2020 of $1.15 per share, consistent with the second quarter dividend paid on May 5, 2020.
|
•
|
We announced on March 16, 2020 a temporary suspension of our common stock repurchase program in conjunction with the Federal Reserve's effort to support the U.S. economy during the pandemic, and will continue the suspension through the third quarter of 2020, with the exception of share repurchases to offset the effects of employee benefit plan-related issuances as permitted by recent guidance from the Federal Reserve. The estimated amount of these repurchases in the third quarter of 2020 is $100 million, but the timing and amount of executed repurchases will be based on market conditions and other factors.
|
•
|
PNC’s baseline economic forecast is for an economic recovery in the second half of 2020 and into 2021, following a very severe but short recession in the first half of 2020. Consumers are increasing their spending and workers are returning to their job sites as states are gradually lifting restrictions on businesses and activities because of the COVID-19 pandemic; fiscal stimulus from the federal government is also supporting economic growth in mid-2020. After a significant contraction in real GDP, steep job losses, and a large increase in the unemployment rate earlier in the second quarter, economic growth has resumed and the labor market is improving.
|
•
|
In the baseline forecast, real GDP increases 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 2022, and growth is well above its long-term trend through 2023.
|
•
|
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 decline in the low-single digits percentage range;
|
•
|
Net interest income to be down approximately 1%;
|
•
|
Noninterest income to be down between 3% and 5%, including our expectation for lower other noninterest income;
|
•
|
Noninterest expense to be flat to down; and
|
•
|
Net loan charge-offs to be between $250 million and $350 million.
|
|
|
2020
|
|
2019
|
|
||||||||||||||||||
Three months ended June 30
Dollars in millions |
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
$
|
88,430
|
|
|
2.41
|
%
|
|
$
|
533
|
|
|
$
|
83,641
|
|
|
3.03
|
%
|
|
$
|
635
|
|
|
Loans
|
|
268,114
|
|
|
3.37
|
%
|
|
2,270
|
|
|
234,845
|
|
|
4.56
|
%
|
|
2,693
|
|
|
||||
Interest-earning deposits with banks
|
|
34,600
|
|
|
0.10
|
%
|
|
9
|
|
|
13,469
|
|
|
2.38
|
%
|
|
80
|
|
|
||||
Other
|
|
10,867
|
|
|
2.26
|
%
|
|
62
|
|
|
13,145
|
|
|
3.55
|
%
|
|
116
|
|
|
||||
Total interest-earning assets/interest income
|
|
$
|
402,011
|
|
|
2.85
|
%
|
|
2,874
|
|
|
$
|
345,100
|
|
|
4.06
|
%
|
|
3,524
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
$
|
241,445
|
|
|
.23
|
%
|
|
141
|
|
|
$
|
201,234
|
|
|
1.03
|
%
|
|
515
|
|
|
||
Borrowed funds
|
|
53,229
|
|
|
1.39
|
%
|
|
187
|
|
|
62,335
|
|
|
3.08
|
%
|
|
484
|
|
|
||||
Total interest-bearing liabilities/interest expense
|
|
$
|
294,674
|
|
|
.44
|
%
|
|
328
|
|
|
$
|
263,569
|
|
|
1.51
|
%
|
|
999
|
|
|
||
Net interest margin/income (Non-GAAP)
|
|
|
|
2.52
|
%
|
|
2,546
|
|
|
|
|
2.91
|
%
|
|
2,525
|
|
|
||||||
Taxable-equivalent adjustments
|
|
|
|
|
|
(19
|
)
|
|
|
|
|
|
(27
|
)
|
|
||||||||
Net interest income (GAAP)
|
|
|
|
|
|
$
|
2,527
|
|
|
|
|
|
|
$
|
2,498
|
|
|
|
|
2020
|
|
2019
|
|
||||||||||||||||||
Six months ended June 30
Dollars in millions |
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
Average
Balances
|
|
|
Average
Yields/
Rates
|
|
|
Interest
Income/
Expense
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-earning assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment securities
|
|
$
|
86,426
|
|
|
2.59
|
%
|
|
$
|
1,121
|
|
|
$
|
82,983
|
|
|
3.04
|
%
|
|
$
|
1,262
|
|
|
Loans
|
|
255,843
|
|
|
3.71
|
%
|
|
4,766
|
|
|
231,712
|
|
|
4.58
|
%
|
|
5,315
|
|
|
||||
Interest-earning deposits with banks
|
|
26,085
|
|
|
0.50
|
%
|
|
65
|
|
|
14,238
|
|
|
2.41
|
%
|
|
171
|
|
|
||||
Other
|
|
10,167
|
|
|
2.84
|
%
|
|
144
|
|
|
12,113
|
|
|
3.82
|
%
|
|
231
|
|
|
||||
Total interest-earning assets/interest income
|
|
$
|
378,521
|
|
|
3.21
|
%
|
|
6,096
|
|
|
$
|
341,046
|
|
|
4.09
|
%
|
|
6,979
|
|
|
||
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
$
|
228,390
|
|
|
.45
|
%
|
|
516
|
|
|
$
|
198,540
|
|
|
1.00
|
%
|
|
987
|
|
|
||
Borrowed funds
|
|
55,209
|
|
|
1.80
|
%
|
|
501
|
|
|
61,066
|
|
|
3.14
|
%
|
|
965
|
|
|
||||
Total interest-bearing liabilities/interest expense
|
|
$
|
283,599
|
|
|
.71
|
%
|
|
1,017
|
|
|
$
|
259,606
|
|
|
1.50
|
%
|
|
1,952
|
|
|
||
Net interest margin/income (Non-GAAP)
|
|
|
|
2.67
|
%
|
|
5,079
|
|
|
|
|
2.94
|
%
|
|
5,027
|
|
|
||||||
Taxable-equivalent adjustments
|
|
|
|
|
|
(41
|
)
|
|
|
|
|
|
(54
|
)
|
|
||||||||
Net interest income (GAAP)
|
|
|
|
|
|
$
|
5,038
|
|
|
|
|
|
|
$
|
4,973
|
|
|
(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 June 30
|
|
Six months ended June 30
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
||||||||||||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
2020
|
|
|
2019
|
|
|
$
|
|
|
%
|
|
|
||||||||
Noninterest income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Asset management
|
|
$
|
199
|
|
|
$
|
221
|
|
|
$
|
(22
|
)
|
|
(10
|
)%
|
|
$
|
400
|
|
|
$
|
433
|
|
|
$
|
(33
|
)
|
|
(8
|
)%
|
|
Consumer services
|
|
330
|
|
|
392
|
|
|
(62
|
)
|
|
(16
|
)%
|
|
707
|
|
|
763
|
|
|
(56
|
)
|
|
(7
|
)%
|
|
||||||
Corporate services
|
|
512
|
|
|
484
|
|
|
28
|
|
|
6
|
%
|
|
1,038
|
|
|
946
|
|
|
92
|
|
|
10
|
%
|
|
||||||
Residential mortgage
|
|
158
|
|
|
82
|
|
|
76
|
|
|
93
|
%
|
|
368
|
|
|
147
|
|
|
221
|
|
|
150
|
%
|
|
||||||
Service charges on deposits
|
|
79
|
|
|
171
|
|
|
(92
|
)
|
|
(54
|
)%
|
|
247
|
|
|
339
|
|
|
(92
|
)
|
|
(27
|
)%
|
|
||||||
Other
|
|
271
|
|
|
367
|
|
|
(96
|
)
|
|
(26
|
)%
|
|
614
|
|
|
675
|
|
|
(61
|
)
|
|
(9
|
)%
|
|
||||||
Total noninterest income
|
|
$
|
1,549
|
|
|
$
|
1,717
|
|
|
$
|
(168
|
)
|
|
(10
|
)%
|
|
$
|
3,374
|
|
|
$
|
3,303
|
|
|
$
|
71
|
|
|
2
|
%
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
||||||||||||||||||||||||||
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
||||||||||||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
$
|
|
%
|
|
2020
|
|
|
2019
|
|
|
$
|
|
|
%
|
|
|
||||||||
Noninterest expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Personnel
|
|
$
|
1,373
|
|
|
$
|
1,365
|
|
|
$
|
8
|
|
|
1
|
%
|
|
$
|
2,742
|
|
|
$
|
2,779
|
|
|
$
|
(37
|
)
|
|
(1
|
)%
|
|
Occupancy
|
|
199
|
|
|
212
|
|
|
(13
|
)
|
|
(6
|
)%
|
|
406
|
|
|
427
|
|
|
(21
|
)
|
|
(5
|
)%
|
|
||||||
Equipment
|
|
301
|
|
|
298
|
|
|
3
|
|
|
1
|
%
|
|
588
|
|
|
571
|
|
|
17
|
|
|
3
|
%
|
|
||||||
Marketing
|
|
47
|
|
|
83
|
|
|
(36
|
)
|
|
(43
|
)%
|
|
105
|
|
|
148
|
|
|
(43
|
)
|
|
(29
|
)%
|
|
||||||
Other
|
|
595
|
|
|
653
|
|
|
(58
|
)
|
|
(9
|
)%
|
|
1,217
|
|
|
1,264
|
|
|
(47
|
)
|
|
(4
|
)%
|
|
||||||
Total noninterest expense
|
|
$
|
2,515
|
|
|
$
|
2,611
|
|
|
$
|
(96
|
)
|
|
(4
|
)%
|
|
$
|
5,058
|
|
|
$
|
5,189
|
|
|
$
|
(131
|
)
|
|
(3
|
)%
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
||||||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
||||
Provision for credit losses
|
|
|
|
|
|
|
|
|
|
||||||||
Loans and leases
|
|
$
|
2,220
|
|
|
$
|
180
|
|
|
$
|
3,172
|
|
|
$
|
369
|
|
|
Unfunded lending related commitments (a)
|
|
212
|
|
|
|
|
165
|
|
|
|
|
||||||
Investment securities
|
|
30
|
|
|
|
|
30
|
|
|
|
|
||||||
Other financial assets
|
|
1
|
|
|
|
|
10
|
|
|
|
|
||||||
Total provision for credit losses
|
|
$
|
2,463
|
|
|
$
|
180
|
|
|
$
|
3,377
|
|
|
$
|
369
|
|
|
|
|
Three months ended June 30
|
|
Six months ended June 30
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Dollars in millions
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
||||
Net income from discontinued operations
|
|
$
|
4,399
|
|
|
$
|
189
|
|
|
$
|
4,555
|
|
|
$
|
378
|
|
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Assets
|
|
|
|
|
|
|
|
|||||||
Interest-earning deposits with banks
|
$
|
50,233
|
|
|
$
|
23,413
|
|
|
$
|
26,820
|
|
115
|
%
|
|
Loans held for sale
|
1,443
|
|
|
1,083
|
|
|
360
|
|
33
|
%
|
|
|||
Asset held for sale (a)
|
|
|
8,558
|
|
|
(8,558
|
)
|
(100
|
)%
|
|
||||
Investment securities
|
98,493
|
|
|
86,824
|
|
|
11,669
|
|
13
|
%
|
|
|||
Loans
|
258,236
|
|
|
239,843
|
|
|
18,393
|
|
8
|
%
|
|
|||
Allowance for loan and lease losses (b)
|
(5,928
|
)
|
|
(2,742
|
)
|
|
(3,186
|
)
|
(116
|
)%
|
|
|||
Mortgage servicing rights
|
1,067
|
|
|
1,644
|
|
|
(577
|
)
|
(35
|
)%
|
|
|||
Goodwill
|
9,233
|
|
|
9,233
|
|
|
—
|
|
—
|
|
|
|||
Other
|
46,201
|
|
|
42,439
|
|
|
3,762
|
|
9
|
%
|
|
|||
Total assets
|
$
|
458,978
|
|
|
$
|
410,295
|
|
|
$
|
48,683
|
|
12
|
%
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|||||
Deposits
|
$
|
345,997
|
|
|
$
|
288,540
|
|
|
$
|
57,457
|
|
20
|
%
|
|
Borrowed funds
|
47,026
|
|
|
60,263
|
|
|
(13,237
|
)
|
(22
|
)%
|
|
|||
Allowance for unfunded lending related commitments (b)
|
662
|
|
|
318
|
|
|
344
|
|
108
|
%
|
|
|||
Other
|
12,345
|
|
|
11,831
|
|
|
514
|
|
4
|
%
|
|
|||
Total liabilities
|
406,030
|
|
|
360,952
|
|
|
45,078
|
|
12
|
%
|
|
|||
Equity
|
|
|
|
|
|
|
|
|
|
|||||
Total shareholders’ equity
|
52,923
|
|
|
49,314
|
|
|
3,609
|
|
7
|
%
|
|
|||
Noncontrolling interests
|
25
|
|
|
29
|
|
|
(4
|
)
|
(14
|
)%
|
|
|||
Total equity
|
52,948
|
|
|
49,343
|
|
|
3,605
|
|
7
|
%
|
|
|||
Total liabilities and equity
|
$
|
458,978
|
|
|
$
|
410,295
|
|
|
$
|
48,683
|
|
12
|
%
|
|
(a)
|
Represents our held for sale investment in BlackRock. In the second quarter of 2020, PNC divested its entire investment in BlackRock. Prior period BlackRock investment balances have been reclassified to the Asset held for sale line in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Refer to Note 1 Accounting Policies and Note 2 Discontinued Operations for additional details.
|
(b)
|
Amounts as of June 30, 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 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 as a result of higher interest-earning deposits with banks, primarily the Federal Reserve Bank, loan growth, and higher investment securities;
|
•
|
Total liabilities increased primarily due to deposit growth reflecting pandemic-related accumulation of liquidity by customers partially offset by lower FHLB borrowings and federal funds purchased;
|
•
|
Total equity increased as higher retained earnings driven by the gain on sale of our equity investment in BlackRock and higher accumulated other comprehensive income (AOCI) was partially offset by share repurchases, dividends on common and preferred stock, and the day-one effect of adopting the CECL accounting standard.
|
•
|
Allowance for Credit Losses in the Credit Risk Management section of this Financial Review, and
|
•
|
Note 1 Accounting Policies and Note 4 Loans and Related Allowance for Credit Losses in the Notes To Consolidated Financial Statements included in this Report.
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Commercial
|
|
|
|
|
|
|
|
|||||||
Commercial and industrial
|
$
|
144,335
|
|
|
$
|
125,337
|
|
|
$
|
18,998
|
|
15
|
%
|
|
Commercial real estate
|
28,763
|
|
|
28,110
|
|
|
653
|
|
2
|
%
|
|
|||
Equipment lease financing
|
7,097
|
|
|
7,155
|
|
|
(58
|
)
|
(1
|
)%
|
|
|||
Total commercial
|
180,195
|
|
|
160,602
|
|
|
19,593
|
|
12
|
%
|
|
|||
Consumer
|
|
|
|
|
|
|
|
|
|
|||||
Home equity
|
24,879
|
|
|
25,085
|
|
|
(206
|
)
|
(1
|
)%
|
|
|||
Residential real estate
|
22,469
|
|
|
21,821
|
|
|
648
|
|
3
|
%
|
|
|||
Automobile
|
16,157
|
|
|
16,754
|
|
|
(597
|
)
|
(4
|
)%
|
|
|||
Credit card
|
6,575
|
|
|
7,308
|
|
|
(733
|
)
|
(10
|
)%
|
|
|||
Education
|
3,132
|
|
|
3,336
|
|
|
(204
|
)
|
(6
|
)%
|
|
|||
Other consumer
|
4,829
|
|
|
4,937
|
|
|
(108
|
)
|
(2
|
)%
|
|
|||
Total consumer
|
78,041
|
|
|
79,241
|
|
|
(1,200
|
)
|
(2
|
)%
|
|
|||
Total loans
|
$
|
258,236
|
|
|
$
|
239,843
|
|
|
$
|
18,393
|
|
8
|
%
|
|
(a)
|
Ratings percentages allocated based on amortized cost, net of allowance for securities.
|
(b)
|
Amortized cost is presented net of applicable allowance for securities of $32 million at June 30, 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.
|
June 30, 2020
|
Years
|
|
|
Agency residential mortgage-backed
|
3.0
|
|
|
Non-agency residential mortgage-backed
|
6.4
|
|
|
Agency commercial mortgage-backed
|
3.5
|
|
|
Non-agency commercial mortgage-backed
|
2.6
|
|
|
Asset-backed
|
2.1
|
|
|
|
June 30
|
|
|
December 31
|
|
|
Change
|
|
||||||
Dollars in millions
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing
|
$
|
99,458
|
|
|
$
|
72,779
|
|
|
$
|
26,679
|
|
37
|
%
|
|
Interest-bearing
|
|
|
|
|
|
|
|
|
|
|||||
Money market
|
62,688
|
|
|
54,115
|
|
|
8,573
|
|
16
|
%
|
|
|||
Demand
|
85,379
|
|
|
71,692
|
|
|
13,687
|
|
19
|
%
|
|
|||
Savings
|
77,252
|
|
|
68,291
|
|
|
8,961
|
|
13
|
%
|
|
|||
Time deposits
|
21,220
|
|
|
21,663
|
|
|
(443
|
)
|
(2
|
)%
|
|
|||
Total interest-bearing deposits
|
246,539
|
|
|
215,761
|
|
|
30,778
|
|
14
|
%
|
|
|||
Total deposits
|
345,997
|
|
|
288,540
|
|
|
57,457
|
|
20
|
%
|
|
|||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|||||
FHLB borrowings
|
8,500
|
|
|
16,341
|
|
|
(7,841
|
)
|
(48
|
)%
|
|
|||
Bank notes and senior debt
|
27,704
|
|
|
29,010
|
|
|
(1,306
|
)
|
(5
|
)%
|
|
|||
Subordinated debt
|
6,500
|
|
|
6,134
|
|
|
366
|
|
6
|
%
|
|
|||
Other
|
4,322
|
|
|
8,778
|
|
|
(4,456
|
)
|
(51
|
)%
|
|
|||
Total borrowed funds
|
47,026
|
|
|
60,263
|
|
|
(13,237
|
)
|
(22
|
)%
|
|
|||
Total funding sources
|
$
|
393,023
|
|
|
$
|
348,803
|
|
|
$
|
44,220
|
|
13
|
%
|
|
•
|
Retail Banking
|
•
|
Corporate & Institutional Banking
|
•
|
Asset Management Group
|
(Unaudited)
|
|
|
|
|
|
|
|
|||||||
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
2019
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
2,846
|
|
|
$
|
2,725
|
|
|
$
|
121
|
|
4
|
%
|
|
Noninterest income
|
1,373
|
|
|
1,252
|
|
|
121
|
|
10
|
%
|
|
|||
Total revenue
|
4,219
|
|
|
3,977
|
|
|
242
|
|
6
|
%
|
|
|||
Provision for credit losses
|
1,206
|
|
|
209
|
|
|
997
|
|
477
|
%
|
|
|||
Noninterest expense
|
3,036
|
|
|
2,995
|
|
|
41
|
|
1
|
%
|
|
|||
Pretax earnings
|
(23
|
)
|
|
773
|
|
|
(796
|
)
|
(103
|
)%
|
|
|||
Income taxes (benefit)
|
(1
|
)
|
|
184
|
|
|
(185
|
)
|
(101
|
)%
|
|
|||
Earnings
|
$
|
(22
|
)
|
|
$
|
589
|
|
|
$
|
(611
|
)
|
(104
|
)%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans held for sale
|
$
|
804
|
|
|
$
|
498
|
|
|
$
|
306
|
|
61
|
%
|
|
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer
|
|
|
|
|
|
|
|
|||||||
Home equity
|
$
|
22,763
|
|
|
$
|
22,804
|
|
|
$
|
(41
|
)
|
—
|
%
|
|
Residential real estate
|
18,104
|
|
|
15,388
|
|
|
2,716
|
|
18
|
%
|
|
|||
Automobile
|
16,892
|
|
|
14,917
|
|
|
1,975
|
|
13
|
%
|
|
|||
Credit card
|
6,948
|
|
|
6,291
|
|
|
657
|
|
10
|
%
|
|
|||
Education
|
3,281
|
|
|
3,740
|
|
|
(459
|
)
|
(12
|
)%
|
|
|||
Other consumer
|
2,494
|
|
|
2,123
|
|
|
371
|
|
17
|
%
|
|
|||
Total consumer
|
70,482
|
|
|
65,263
|
|
|
5,219
|
|
8
|
%
|
|
|||
Commercial
|
12,068
|
|
|
10,471
|
|
|
1,597
|
|
15
|
%
|
|
|||
Total loans
|
$
|
82,550
|
|
|
$
|
75,734
|
|
|
$
|
6,816
|
|
9
|
%
|
|
Total assets
|
$
|
99,583
|
|
|
$
|
91,805
|
|
|
$
|
7,778
|
|
8
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
35,680
|
|
|
$
|
30,956
|
|
|
$
|
4,724
|
|
15
|
%
|
|
Interest-bearing demand
|
45,102
|
|
|
42,607
|
|
|
2,495
|
|
6
|
%
|
|
|||
Money market
|
22,903
|
|
|
26,283
|
|
|
(3,380
|
)
|
(13
|
)%
|
|
|||
Savings
|
65,364
|
|
|
54,596
|
|
|
10,768
|
|
20
|
%
|
|
|||
Certificates of deposit
|
11,947
|
|
|
12,543
|
|
|
(596
|
)
|
(5
|
)%
|
|
|||
Total deposits
|
$
|
180,996
|
|
|
$
|
166,985
|
|
|
$
|
14,011
|
|
8
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
(.04
|
)%
|
|
1.29
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
33
|
%
|
|
31
|
%
|
|
|
|
|
|||||
Efficiency
|
72
|
%
|
|
75
|
%
|
|
|
|
|
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
|
2019
|
|
|
$
|
%
|
|
|||||
Supplemental Noninterest Income Information
|
|
|
|
|
|
|
|
|||||||
Consumer services
|
$
|
687
|
|
|
$
|
751
|
|
|
$
|
(64
|
)
|
(9
|
)%
|
|
Residential mortgage
|
$
|
368
|
|
|
$
|
147
|
|
|
$
|
221
|
|
150
|
%
|
|
Service charges on deposits
|
$
|
246
|
|
|
$
|
326
|
|
|
$
|
(80
|
)
|
(25
|
)%
|
|
Residential Mortgage Information
|
|
|
|
|
|
|
|
|||||||
Residential mortgage servicing statistics (in billions, except as noted) (a)
|
|
|
|
|
|
|
|
|||||||
Serviced portfolio balance (b)
|
$
|
122
|
|
|
$
|
124
|
|
|
$
|
(2
|
)
|
(2
|
)%
|
|
Serviced portfolio acquisitions
|
$
|
13
|
|
|
$
|
6
|
|
|
$
|
7
|
|
117
|
%
|
|
MSR asset value (b)
|
$
|
0.6
|
|
|
$
|
1.0
|
|
|
$
|
(.4
|
)
|
(40
|
)%
|
|
MSR capitalization value (in basis points) (b)
|
47
|
|
|
80
|
|
|
(33
|
)
|
(41
|
)%
|
|
|||
Servicing income: (in millions)
|
|
|
|
|
|
|
|
|||||||
Servicing fees, net (c)
|
$
|
80
|
|
|
$
|
95
|
|
|
$
|
(15
|
)
|
(16
|
)%
|
|
Mortgage servicing rights valuation, net of economic hedge
|
$
|
121
|
|
|
$
|
(2
|
)
|
|
$
|
123
|
|
*
|
|
|
Residential mortgage loan statistics
|
|
|
|
|
|
|
|
|||||||
Loan origination volume (in billions)
|
$
|
7.4
|
|
|
$
|
4.6
|
|
|
$
|
2.8
|
|
61
|
%
|
|
Loan sale margin percentage
|
3.45
|
%
|
|
2.28
|
%
|
|
|
|
|
|||||
Percentage of originations represented by:
|
|
|
|
|
|
|
|
|||||||
Purchase volume (d)
|
35
|
%
|
|
55
|
%
|
|
|
|
|
|||||
Refinance volume
|
65
|
%
|
|
45
|
%
|
|
|
|
|
|||||
Other Information (b)
|
|
|
|
|
|
|
|
|||||||
Customer-related statistics (average)
|
|
|
|
|
|
|
|
|||||||
Non-teller deposit transactions (e)
|
61
|
%
|
|
56
|
%
|
|
|
|
|
|||||
Digital consumer customers (f)
|
72
|
%
|
|
69
|
%
|
|
|
|
|
|||||
Credit-related statistics
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (g)
|
$
|
1,037
|
|
|
$
|
1,074
|
|
|
$
|
(37
|
)
|
(3
|
)%
|
|
Net charge-offs - loans and leases
|
$
|
308
|
|
|
$
|
252
|
|
|
$
|
56
|
|
22
|
%
|
|
Other statistics
|
|
|
|
|
|
|
|
|||||||
ATMs
|
9,058
|
|
|
9,072
|
|
|
(14
|
)
|
—
|
%
|
|
|||
Branches (h)
|
2,256
|
|
|
2,321
|
|
|
(65
|
)
|
(3
|
)%
|
|
|||
Brokerage account client assets (in billions) (i)
|
$
|
53
|
|
|
$
|
52
|
|
|
$
|
1
|
|
2
|
%
|
|
(a)
|
Represents mortgage loan servicing balances for third parties and the related income.
|
(b)
|
Presented as of June 30, except for customer-related statistics, which are averages for the six months ended, and net charge-offs, which are for the six months ended.
|
(c)
|
Servicing fees net of impact of decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan 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 and $1.1 billion for June 30, 2020 and June 30, 2019, respectively.
|
(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 and a robust refinance market driven by historically low interest rates.
|
•
|
Average auto loans increased primarily due to strong new indirect auto loan volumes, including in our Southeast and expansion markets.
|
•
|
Average commercial loans increased primarily due to PPP 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 unsecured installment loans increased primarily driven by growth in originations through digital channels.
|
•
|
Average education loans decreased driven by a decline in the runoff portfolio of government guaranteed education loans.
|
•
|
Average home equity loans decreased as paydowns and payoffs on loans exceeded new originated volume.
|
•
|
Approximately 72% of consumer customers used non-teller channels for the majority of their transactions in the first six months of 2020 compared with 69% for the same period in 2019.
|
•
|
Deposit transactions via ATM and mobile channels increased to 61% of total deposit transactions in the first six months of 2020 from 56% 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 June 30.
|
(g)
|
Primarily nonperforming loans of $.7 billion and $.5 billion at June 30, 2020 and June 30, 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 increased utilization and new production, including PPP loan originations.
|
•
|
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 and multifamily agency warehouse lending, partially offset by project loan payoffs.
|
•
|
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 lower utilization.
|
•
|
Commercial Banking provides lending, treasury management and capital markets-related products and services to smaller corporations and businesses. Average loans for this business increased primarily driven by PPP loan originations.
|
(Unaudited)
|
|
|
|
|
|
|
|
|||||||
Six months ended June 30
|
|
|
|
|
Change
|
|
||||||||
Dollars in millions, except as noted
|
2020
|
|
2019
|
|
$
|
%
|
|
|||||||
Income Statement
|
|
|
|
|
|
|
|
|||||||
Net interest income
|
$
|
177
|
|
|
$
|
138
|
|
|
$
|
39
|
|
28
|
%
|
|
Noninterest income
|
408
|
|
|
503
|
|
|
(95
|
)
|
(19
|
)%
|
|
|||
Total revenue
|
585
|
|
|
641
|
|
|
(56
|
)
|
(9
|
)%
|
|
|||
Provision for credit losses
|
42
|
|
|
(1
|
)
|
|
43
|
|
*
|
|
|
|||
Noninterest expense
|
436
|
|
|
479
|
|
|
(43
|
)
|
(9
|
)%
|
|
|||
Pretax earnings
|
107
|
|
|
163
|
|
|
(56
|
)
|
(34
|
)%
|
|
|||
Income taxes
|
25
|
|
|
38
|
|
|
(13
|
)
|
(34
|
)%
|
|
|||
Earnings
|
$
|
82
|
|
|
$
|
125
|
|
|
$
|
(43
|
)
|
(34
|
)%
|
|
Average Balance Sheet
|
|
|
|
|
|
|
|
|||||||
Loans
|
|
|
|
|
|
|
|
|||||||
Consumer
|
|
|
|
|
|
|
|
|||||||
Residential real estate
|
$
|
2,511
|
|
|
$
|
1,758
|
|
|
$
|
753
|
|
43
|
%
|
|
Other consumer
|
4,013
|
|
|
4,289
|
|
|
(276
|
)
|
(6
|
)%
|
|
|||
Total consumer
|
6,524
|
|
|
6,047
|
|
|
477
|
|
8
|
%
|
|
|||
Commercial
|
869
|
|
|
741
|
|
|
128
|
|
17
|
%
|
|
|||
Total loans
|
$
|
7,393
|
|
|
$
|
6,788
|
|
|
$
|
605
|
|
9
|
%
|
|
Total assets
|
$
|
7,880
|
|
|
$
|
7,204
|
|
|
$
|
676
|
|
9
|
%
|
|
Deposits
|
|
|
|
|
|
|
|
|||||||
Noninterest-bearing demand
|
$
|
1,445
|
|
|
$
|
1,368
|
|
|
$
|
77
|
|
6
|
%
|
|
Interest-bearing demand
|
7,296
|
|
|
2,983
|
|
|
4,313
|
|
145
|
%
|
|
|||
Money market
|
1,653
|
|
|
1,910
|
|
|
(257
|
)
|
(13
|
)%
|
|
|||
Savings
|
7,297
|
|
|
5,799
|
|
|
1,498
|
|
26
|
%
|
|
|||
Other
|
785
|
|
|
747
|
|
|
38
|
|
5
|
%
|
|
|||
Total deposits
|
$
|
18,476
|
|
|
$
|
12,807
|
|
|
$
|
5,669
|
|
44
|
%
|
|
Performance Ratios
|
|
|
|
|
|
|
|
|||||||
Return on average assets
|
2.10
|
%
|
|
3.50
|
%
|
|
|
|
|
|||||
Noninterest income to total revenue
|
70
|
%
|
|
78
|
%
|
|
|
|
|
|||||
Efficiency
|
75
|
%
|
|
75
|
%
|
|
|
|
|
|||||
Supplemental Noninterest Income Information
|
|
|
|
|
|
|
|
|||||||
Asset management fees
|
$
|
400
|
|
|
$
|
433
|
|
|
$
|
(33
|
)
|
(8
|
)%
|
|
Other Information
|
|
|
|
|
|
|
|
|||||||
Nonperforming assets (a) (b)
|
$
|
38
|
|
|
$
|
45
|
|
|
$
|
(7
|
)
|
(16
|
)%
|
|
Net charge-offs (recoveries) - loans and leases
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(2
|
)
|
(200
|
)%
|
|
Client Assets Under Administration (in billions) (a) (c)
|
|
|
|
|
|
|
|
|||||||
Discretionary client assets under management
|
$
|
151
|
|
|
$
|
162
|
|
|
$
|
(11
|
)
|
(7
|
)%
|
|
Nondiscretionary client assets under administration
|
138
|
|
|
132
|
|
|
6
|
|
5
|
%
|
|
|||
Total
|
$
|
289
|
|
|
$
|
294
|
|
|
$
|
(5
|
)
|
(2
|
)%
|
|
Discretionary client assets under management
|
|
|
|
|
|
|
|
|||||||
Personal
|
$
|
94
|
|
|
$
|
99
|
|
|
$
|
(5
|
)
|
(5
|
)%
|
|
Institutional
|
57
|
|
|
63
|
|
|
(6
|
)
|
(10
|
)%
|
|
|||
Total
|
$
|
151
|
|
|
$
|
162
|
|
|
$
|
(11
|
)
|
(7
|
)%
|
|
(a)
|
As of June 30.
|
(b)
|
Primarily nonperforming loans of $38 million at June 30, 2020 and $45 million at June 30, 2019.
|
(c)
|
Excludes brokerage account client assets.
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
||||||
Manufacturing
|
$
|
25,590
|
|
|
18
|
%
|
|
|
$
|
21,540
|
|
|
17
|
%
|
|
Retail/wholesale trade
|
21,747
|
|
|
15
|
|
|
|
21,565
|
|
|
17
|
|
|
||
Service providers
|
21,347
|
|
|
15
|
|
|
|
16,112
|
|
|
13
|
|
|
||
Real estate related (a)
|
14,634
|
|
|
10
|
|
|
|
12,346
|
|
|
10
|
|
|
||
Financial services
|
13,596
|
|
|
9
|
|
|
|
11,318
|
|
|
9
|
|
|
||
Health care
|
10,109
|
|
|
7
|
|
|
|
8,035
|
|
|
6
|
|
|
||
Transportation and warehousing
|
7,771
|
|
|
5
|
|
|
|
7,474
|
|
|
6
|
|
|
||
Other industries
|
29,541
|
|
|
21
|
|
|
|
26,947
|
|
|
22
|
|
|
||
Total commercial and industrial loans
|
$
|
144,335
|
|
|
100
|
%
|
|
|
$
|
125,337
|
|
|
100
|
%
|
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography (a)
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
4,524
|
|
|
16
|
%
|
|
|
$
|
4,393
|
|
|
16
|
%
|
|
Florida
|
2,863
|
|
|
10
|
|
|
|
2,557
|
|
|
9
|
|
|
||
Texas
|
1,847
|
|
|
6
|
|
|
|
1,717
|
|
|
6
|
|
|
||
Maryland
|
1,771
|
|
|
6
|
|
|
|
1,889
|
|
|
7
|
|
|
||
Virginia
|
1,577
|
|
|
5
|
|
|
|
1,547
|
|
|
6
|
|
|
||
Pennsylvania
|
1,351
|
|
|
5
|
|
|
|
1,310
|
|
|
4
|
|
|
||
Ohio
|
1,280
|
|
|
4
|
|
|
|
1,307
|
|
|
4
|
|
|
||
New Jersey
|
1,209
|
|
|
4
|
|
|
|
1,106
|
|
|
4
|
|
|
||
Illinois
|
999
|
|
|
4
|
|
|
|
1,001
|
|
|
4
|
|
|
||
North Carolina
|
961
|
|
|
3
|
|
|
|
1,015
|
|
|
4
|
|
|
||
Other
|
10,381
|
|
|
37
|
|
|
|
10,268
|
|
|
36
|
|
|
||
Total commercial real estate loans
|
$
|
28,763
|
|
|
100
|
%
|
|
|
$
|
28,110
|
|
|
100
|
%
|
|
Property Type
|
|
|
|
|
|
|
|
|
|
||||||
Multifamily
|
$
|
9,326
|
|
|
32
|
%
|
|
|
$
|
9,003
|
|
|
32
|
%
|
|
Office
|
7,785
|
|
|
27
|
|
|
|
7,641
|
|
|
27
|
|
|
||
Retail
|
3,615
|
|
|
13
|
|
|
|
3,702
|
|
|
13
|
|
|
||
Industrial/Warehouse
|
2,069
|
|
|
7
|
|
|
|
2,003
|
|
|
7
|
|
|
||
Hotel/Motel
|
1,923
|
|
|
7
|
|
|
|
1,813
|
|
|
7
|
|
|
||
Senior Housing
|
1,309
|
|
|
5
|
|
|
|
1,123
|
|
|
4
|
|
|
||
Mixed Use
|
905
|
|
|
3
|
|
|
|
943
|
|
|
3
|
|
|
||
Other
|
1,831
|
|
|
6
|
|
|
|
1,882
|
|
|
7
|
|
|
||
Total commercial real estate loans
|
$
|
28,763
|
|
|
100
|
%
|
|
|
$
|
28,110
|
|
|
100
|
%
|
|
(a)
|
Presented in descending order based on loan balances at June 30, 2020.
|
•
|
Non-real estate related
|
•
|
Leisure recreation: restaurants, casinos, hotels, convention centers
|
•
|
Non-essential retail: retail excluding auto, gas, staples
|
•
|
Healthcare facilities: elective, private practices
|
•
|
Consumer services: religious organizations, childcare
|
•
|
Leisure travel: cruise, airlines, other travel/transportation
|
•
|
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
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography (a)
|
|
|
|
|
|
|
|
|
|
||||||
Pennsylvania
|
$
|
5,750
|
|
|
23
|
%
|
|
|
$
|
5,812
|
|
|
23
|
%
|
|
New Jersey
|
3,648
|
|
|
15
|
|
|
|
3,728
|
|
|
15
|
|
|
||
Ohio
|
2,845
|
|
|
11
|
|
|
|
2,899
|
|
|
12
|
|
|
||
Illinois
|
1,497
|
|
|
6
|
|
|
|
1,544
|
|
|
6
|
|
|
||
Florida
|
1,497
|
|
|
6
|
|
|
|
1,340
|
|
|
5
|
|
|
||
Michigan
|
1,408
|
|
|
6
|
|
|
|
1,371
|
|
|
5
|
|
|
||
Maryland
|
1,399
|
|
|
6
|
|
|
|
1,420
|
|
|
6
|
|
|
||
North Carolina
|
1,083
|
|
|
4
|
|
|
|
1,092
|
|
|
4
|
|
|
||
Kentucky
|
970
|
|
|
4
|
|
|
|
990
|
|
|
4
|
|
|
||
Virginia
|
827
|
|
|
3
|
|
|
|
810
|
|
|
3
|
|
|
||
Other
|
3,955
|
|
|
16
|
|
|
|
4,079
|
|
|
17
|
|
|
||
Total home equity loans
|
$
|
24,879
|
|
|
100
|
%
|
|
|
$
|
25,085
|
|
|
100
|
%
|
|
Lien type
|
|
|
|
|
|
|
|
|
|
||||||
1st lien
|
|
|
61
|
%
|
|
|
|
|
59
|
%
|
|
||||
2nd lien
|
|
|
39
|
|
|
|
|
|
41
|
|
|
||||
Total
|
|
|
100
|
%
|
|
|
|
|
100
|
%
|
|
(a)
|
Presented in descending order based on loan balances at June 30, 2020.
|
|
June 30, 2020
|
|
|
December 31, 2019
|
|
||||||||||
Dollars in millions
|
Amount
|
|
% of Total
|
|
|
Amount
|
|
% of Total
|
|
||||||
Geography (a)
|
|
|
|
|
|
|
|
|
|
||||||
California
|
$
|
7,618
|
|
|
34
|
%
|
|
|
$
|
6,800
|
|
|
31
|
%
|
|
New Jersey
|
1,786
|
|
|
8
|
|
|
|
1,779
|
|
|
8
|
|
|
||
Florida
|
1,567
|
|
|
7
|
|
|
|
1,580
|
|
|
7
|
|
|
||
Pennsylvania
|
1,096
|
|
|
5
|
|
|
|
1,113
|
|
|
5
|
|
|
||
Illinois
|
1,068
|
|
|
5
|
|
|
|
1,118
|
|
|
5
|
|
|
||
New York
|
990
|
|
|
4
|
|
|
|
1,008
|
|
|
5
|
|
|
||
Washington
|
923
|
|
|
4
|
|
|
|
646
|
|
|
3
|
|
|
||
Virginia
|
908
|
|
|
4
|
|
|
|
868
|
|
|
4
|
|
|
||
Maryland
|
895
|
|
|
4
|
|
|
|
923
|
|
|
4
|
|
|
||
North Carolina
|
848
|
|
|
4
|
|
|
|
877
|
|
|
4
|
|
|
||
Other
|
4,770
|
|
|
21
|
|
|
|
5,109
|
|
|
24
|
|
|
||
Total residential real estate loans
|
$
|
22,469
|
|
|
100
|
%
|
|
|
$
|
21,821
|
|
|
100
|
%
|
|
(a)
|
Presented in descending order based on loan balances at June 30, 2020.
|
|
June 30, 2020
|
|
December 31, 2019
|
|
|
Change
|
|||||||
Dollars in millions
|
$
|
|
%
|
||||||||||
Nonperforming loans
|
|
|
|
|
|
|
|||||||
Commercial
|
$
|
758
|
|
$
|
501
|
|
|
$
|
257
|
|
|
51
|
%
|
Consumer (a)
|
1,118
|
|
1,134
|
|
|
(16
|
)
|
|
(1
|
)%
|
|||
Total nonperforming loans
|
1,876
|
|
1,635
|
|
|
241
|
|
|
15
|
%
|
|||
OREO and foreclosed assets
|
79
|
|
117
|
|
|
(38
|
)
|
|
(32
|
)%
|
|||
Total nonperforming assets
|
$
|
1,955
|
|
$
|
1,752
|
|
|
$
|
203
|
|
|
12
|
%
|
TDRs included in nonperforming loans
|
$
|
860
|
|
$
|
843
|
|
|
$
|
17
|
|
|
2
|
%
|
Percentage of total nonperforming loans
|
46
|
%
|
52
|
%
|
|
|
|
|
|||||
Nonperforming loans to total loans
|
.73
|
%
|
.68
|
%
|
|
|
|
|
|||||
Nonperforming assets to total loans, OREO and foreclosed assets
|
.76
|
%
|
.73
|
%
|
|
|
|
|
|||||
Nonperforming assets to total assets
|
.43
|
%
|
.43
|
%
|
|
|
|
|
|||||
Allowance for loan and lease losses to nonperforming loans (b)
|
316
|
%
|
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 June 30, 2020 reflects the changes in ALLL methodology due to the adoption of the CECL accounting standard on January 1, 2020, along with increases in reserves during 2020 due to the significantly adverse economic impact of the pandemic, and its resulting effects on loan portfolio credit quality and loan growth.
|
In millions
|
|
2020
|
|
|
2019
|
|
|
||
January 1
|
|
$
|
1,752
|
|
|
$
|
1,808
|
|
|
New nonperforming assets
|
|
849
|
|
|
695
|
|
|
||
Charge-offs and valuation adjustments
|
|
(249
|
)
|
|
(334
|
)
|
|
||
Principal activity, including paydowns and payoffs
|
|
(243
|
)
|
|
(193
|
)
|
|
||
Asset sales and transfers to loans held for sale
|
|
(48
|
)
|
|
(40
|
)
|
|
||
Returned to performing status
|
|
(106
|
)
|
|
(86
|
)
|
|
||
June 30
|
|
$
|
1,955
|
|
|
$
|
1,850
|
|
|
|
|
Amount
|
|
|
|
% of Total Loans Outstanding
|
|
|||||||||||||||
|
|
June 30
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
June 30
2020 |
|
|
December 31
2019 |
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|
||||||||||||||||
Early stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 30 to 59 days
|
|
$
|
590
|
|
|
$
|
661
|
|
|
$
|
(71
|
)
|
|
(11
|
)%
|
|
.23
|
%
|
|
.28
|
%
|
|
Accruing loans past due 60 to 89 days
|
|
264
|
|
|
258
|
|
|
6
|
|
|
2
|
%
|
|
.10
|
%
|
|
.11
|
%
|
|
|||
Total early stage loan delinquencies
|
|
854
|
|
|
919
|
|
|
(65
|
)
|
|
(7
|
)%
|
|
.33
|
%
|
|
.38
|
%
|
|
|||
Late stage loan delinquencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Accruing loans past due 90 days or more
|
|
456
|
|
|
585
|
|
|
(129
|
)
|
|
(22
|
)%
|
|
.18
|
%
|
|
.24
|
%
|
|
|||
Total accruing loans past due
|
|
$
|
1,310
|
|
|
$
|
1,504
|
|
|
$
|
(194
|
)
|
|
(13
|
)%
|
|
.51
|
%
|
|
.63
|
%
|
|
(a)
|
Past due loan amounts include government insured or guaranteed loans of $.5 billion at June 30, 2020 and $.6 billion at December 31, 2019.
|
|
|
June 30
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
%
|
|
|||||||||||
Commercial
|
|
$
|
404
|
|
|
$
|
361
|
|
|
$
|
43
|
|
|
12
|
%
|
|
Consumer
|
|
1,181
|
|
|
1,303
|
|
|
(122
|
)
|
|
(9
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,585
|
|
|
$
|
1,664
|
|
|
$
|
(79
|
)
|
|
(5
|
)%
|
|
Nonperforming
|
|
$
|
860
|
|
|
$
|
843
|
|
|
$
|
17
|
|
|
2
|
%
|
|
Accruing (b)
|
|
725
|
|
|
821
|
|
|
(96
|
)
|
|
(12
|
)%
|
|
|||
Total TDRs
|
|
$
|
1,585
|
|
|
$
|
1,664
|
|
|
$
|
(79
|
)
|
|
(5
|
)%
|
|
(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.
|
|
|
Number of
Accounts
|
|
|
Unpaid
Principal
Balance
|
|
|
|
As of June 30, 2020 - Dollars in millions
|
|
|
|
|||||
Commercial
|
|
|
|
|
|
|||
Commercial and industrial
|
|
12,534
|
|
|
$
|
4,939
|
|
|
Commercial real estate
|
|
407
|
|
|
1,544
|
|
|
|
Equipment lease financing
|
|
2,774
|
|
|
285
|
|
|
|
Total commercial
|
|
15,715
|
|
|
$
|
6,768
|
|
|
Modification Type
|
Home Equity
|
Residential Real Estate
|
Automobile
|
Credit Card
|
Education
|
Other Consumer
|
Extensions - Defers current payments and moves them to the end of the loan by extending the loan's maturity or the extension re-amortizes the remaining principal balance.
|
a
|
|
a
|
|
a
|
a
|
Forbearance - Payment is deferred and moved to the end of the forbearance period. Balance is due at the end of the forbearance period, but payment options may be available to repay the forborne amount, including for many borrowers an option to delay payment until the payoff or maturity of the loan.
|
|
a
|
|
|
|
|
Minimum payment suspension - Reduces required minimum payment to $0 for a period of time.
|
|
|
|
a
|
|
|
New loan terms - Sets loan terms to a new monthly payment of principal and interest based on customer's financial situation.
|
a
|
a
|
|
|
|
|
Reduced payments - Allows the customer to make a lower payment for a period of time, with any deferred balance being moved to the end of the loan term or extending the loan's maturity.
|
a
|
|
a
|
|
|
a
|
Repayment plan - Allows reduced payment and interest rate for a period of time.
|
|
|
|
a
|
|
|
As of June 30, 2020 - Dollars in millions
|
|
Number of
Accounts
|
|
|
Unpaid
Principal
Balance
|
|
|
|
Consumer
|
|
|
|
|
|
|||
Home equity
|
|
14,245
|
|
|
$
|
1,403
|
|
|
Residential real estate (b)
|
|
5,619
|
|
|
1,620
|
|
|
|
Automobile
|
|
83,933
|
|
|
2,044
|
|
|
|
Credit card
|
|
39,235
|
|
|
266
|
|
|
|
Education (b)
|
|
84,615
|
|
|
579
|
|
|
|
Other consumer
|
|
14,671
|
|
|
204
|
|
|
|
Total consumer loan modifications
|
|
242,318
|
|
|
$
|
6,116
|
|
|
•
|
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, including the impact of COVID-19 hardship related loan modifications,
|
•
|
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.
|
|
|
June 30, 2020
|
|
December 31, 2019
|
|
||||||||||||||
Dollars in millions |
|
Allowance Amount
|
Total Loans
|
% of Total Loans
|
|
Allowance Amount
|
Total Loans
|
% of Total Loans
|
|
||||||||||
Allowance for loans and lease losses
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
|
$
|
2,834
|
|
$
|
144,335
|
|
1.96
|
%
|
|
$
|
1,489
|
|
$
|
125,337
|
|
1.19
|
%
|
|
Commercial real estate
|
|
382
|
|
28,763
|
|
1.33
|
%
|
|
278
|
|
28,110
|
|
.99
|
%
|
|
||||
Equipment lease financing
|
|
164
|
|
7,097
|
|
2.31
|
%
|
|
45
|
|
7,155
|
|
.63
|
%
|
|
||||
Total commercial
|
|
3,380
|
|
180,195
|
|
1.88
|
%
|
|
1,812
|
|
160,602
|
|
1.13
|
%
|
|
||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Home equity
|
|
382
|
|
24,879
|
|
1.54
|
%
|
|
87
|
|
25,085
|
|
.35
|
%
|
|
||||
Residential real estate
|
|
50
|
|
22,469
|
|
.22
|
%
|
|
258
|
|
21,821
|
|
1.18
|
%
|
|
||||
Automobile
|
|
450
|
|
16,157
|
|
2.79
|
%
|
|
160
|
|
16,754
|
|
.95
|
%
|
|
||||
Credit card
|
|
1,010
|
|
6,575
|
|
15.36
|
%
|
|
288
|
|
7,308
|
|
3.94
|
%
|
|
||||
Education
|
|
151
|
|
3,132
|
|
4.82
|
%
|
|
17
|
|
3,336
|
|
.51
|
%
|
|
||||
Other consumer
|
|
505
|
|
4,829
|
|
10.46
|
%
|
|
120
|
|
4,937
|
|
2.43
|
%
|
|
||||
Total consumer
|
|
2,548
|
|
78,041
|
|
3.26
|
%
|
|
930
|
|
79,241
|
|
1.17
|
%
|
|
||||
Total
|
|
5,928
|
|
$
|
258,236
|
|
2.30
|
%
|
|
2,742
|
|
$
|
239,843
|
|
1.14
|
%
|
|
||
Allowance for unfunded lending related commitments
|
|
662
|
|
|
|
|
318
|
|
|
|
|
||||||||
Allowance for credit losses
|
|
$
|
6,590
|
|
|
|
|
$
|
3,060
|
|
|
|
|
||||||
Allowance for credit losses to total loans
|
|
|
|
|
2.55
|
%
|
|
|
|
1.28
|
%
|
|
|||||||
Commercial
|
|
|
|
|
2.18
|
%
|
|
|
|
1.33
|
%
|
|
|||||||
Consumer
|
|
|
|
|
3.41
|
%
|
|
|
|
1.18
|
%
|
|
(a)
|
Excludes allowances for investment securities and other financial assets.
|
Six months ended June 30
|
|
Gross
Charge-offs
|
|
|
Recoveries
|
|
|
Net Charge-offs /
(Recoveries)
|
|
|
% of Average
Loans (Annualized)
|
|
|
|||
Dollars in millions
|
||||||||||||||||
2020
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial and industrial
|
|
$
|
190
|
|
|
$
|
31
|
|
|
$
|
159
|
|
|
.23
|
%
|
|
Commercial real estate
|
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(.03
|
)%
|
|
|||
Equipment lease financing
|
|
15
|
|
|
4
|
|
|
11
|
|
|
.31
|
%
|
|
|||
Total commercial
|
|
205
|
|
|
39
|
|
|
166
|
|
|
.19
|
%
|
|
|||
Consumer
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity
|
|
19
|
|
|
29
|
|
|
(10
|
)
|
|
(.08
|
)%
|
|
|||
Residential real estate
|
|
2
|
|
|
8
|
|
|
(6
|
)
|
|
(.05
|
)%
|
|
|||
Automobile
|
|
153
|
|
|
64
|
|
|
89
|
|
|
1.06
|
%
|
|
|||
Credit card
|
|
154
|
|
|
17
|
|
|
137
|
|
|
3.96
|
%
|
|
|||
Education
|
|
10
|
|
|
4
|
|
|
6
|
|
|
.37
|
%
|
|
|||
Other consumer
|
|
75
|
|
|
9
|
|
|
66
|
|
|
2.69
|
%
|
|
|||
Total consumer
|
|
413
|
|
|
131
|
|
|
282
|
|
|
.72
|
%
|
|
|||
Total
|
|
$
|
618
|
|
|
$
|
170
|
|
|
$
|
448
|
|
|
.35
|
%
|
|
2019
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial and industrial
|
|
$
|
75
|
|
|
$
|
31
|
|
|
$
|
44
|
|
|
.07
|
%
|
|
Commercial real estate
|
|
5
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
|||
Equipment lease financing
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
|||
Total commercial
|
|
84
|
|
|
40
|
|
|
44
|
|
|
.06
|
%
|
|
|||
Consumer
|
|
|
|
|
|
|
|
|
|
|||||||
Home equity
|
|
41
|
|
|
36
|
|
|
5
|
|
|
.04
|
%
|
|
|||
Residential real estate
|
|
4
|
|
|
7
|
|
|
(3
|
)
|
|
(.03
|
)%
|
|
|||
Automobile
|
|
112
|
|
|
55
|
|
|
57
|
|
|
.77
|
%
|
|
|||
Credit card
|
|
132
|
|
|
14
|
|
|
118
|
|
|
3.78
|
%
|
|
|||
Education
|
|
13
|
|
|
4
|
|
|
9
|
|
|
.49
|
%
|
|
|||
Other consumer
|
|
56
|
|
|
8
|
|
|
48
|
|
|
2.10
|
%
|
|
|||
Total consumer
|
|
358
|
|
|
124
|
|
|
234
|
|
|
.64
|
%
|
|
|||
Total
|
|
$
|
442
|
|
|
$
|
164
|
|
|
$
|
278
|
|
|
.24
|
%
|
|
In billions
|
2020
|
|
|
|
January 1
|
$
|
35.1
|
|
|
Issuances
|
3.5
|
|
|
|
Calls and maturities
|
(5.9
|
)
|
|
|
Other
|
1.5
|
|
|
|
June 30
|
$
|
34.2
|
|
|
•
|
Bank-level capital needs,
|
•
|
Laws and regulations,
|
•
|
Corporate policies,
|
•
|
Contractual restrictions, and
|
•
|
Other factors.
|
•
|
Pay common dividends at the same per share level as paid during the second quarter of 2020, provided that the amount does not exceed the average of the firm's net income for the four preceding calendar quarters;
|
•
|
Purchase common shares in an amount that equals the amount of share issuances related to expensed employee compensation; and
|
•
|
Make scheduled payments on additional Tier 1 and Tier 2 capital instruments.
|
Dollars in millions
|
Basel III
June 30, 2020 (a)
|
|
June 30, 2020 (Fully Implemented)
(estimated) (b)
|
|
||||
Common equity Tier 1 capital
|
|
|
|
|
||||
Common stock plus related surplus, net of treasury stock
|
$
|
873
|
|
|
$
|
873
|
|
|
Retained earnings
|
46,381
|
|
|
44,986
|
|
|
||
Goodwill, net of associated deferred tax liabilities
|
(9,025
|
)
|
|
(9,025
|
)
|
|
||
Other disallowed intangibles, net of deferred tax liabilities
|
(197
|
)
|
|
(197
|
)
|
|
||
Other adjustments/(deductions)
|
(75
|
)
|
|
(78
|
)
|
|
||
Common equity Tier 1 capital
|
$
|
37,957
|
|
|
$
|
36,559
|
|
|
Additional Tier 1 capital
|
|
|
|
|
||||
Preferred stock plus related surplus
|
3,995
|
|
|
3,995
|
|
|
||
Other adjustments/(deductions)
|
—
|
|
|
—
|
|
|
||
Tier 1 capital
|
$
|
41,952
|
|
|
$
|
40,554
|
|
|
Additional Tier 2 capital
|
|
|
|
|
||||
Qualifying subordinated debt
|
4,100
|
|
|
4,100
|
|
|
||
Trust preferred capital securities
|
40
|
|
|
—
|
|
|
||
Eligible credit reserves includable in Tier 2 capital
|
4,192
|
|
|
4,192
|
|
|
||
Total Basel III capital
|
$
|
50,284
|
|
|
$
|
48,846
|
|
|
Risk-weighted assets
|
|
|
|
|
||||
Basel III standardized approach risk-weighted assets (c)
|
$
|
336,990
|
|
|
$
|
335,615
|
|
|
Average quarterly adjusted total assets
|
$
|
446,741
|
|
|
$
|
445,343
|
|
|
Supplementary leverage exposure (d)
|
$
|
452,000
|
|
|
$
|
522,843
|
|
|
Basel III risk-based capital and leverage ratios (a)(e)
|
|
|
|
|
||||
Common equity Tier 1
|
11.3
|
%
|
|
10.9
|
%
|
|
||
Tier 1
|
12.4
|
%
|
|
12.1
|
%
|
|
||
Total (f)
|
14.9
|
%
|
|
14.6
|
%
|
|
||
Leverage (g)
|
9.4
|
%
|
|
9.1
|
%
|
|
||
Supplementary leverage ratio (d)(h)
|
9.3
|
%
|
|
7.8
|
%
|
|
(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 the optional five-year transition provision.
|
(c)
|
Basel III standardized approach weighted-assets are based on the Basel III standardized approach rules and include credit and market risk-weighted assets.
|
(d)
|
As of June 30, 2020 the Supplementary leverage exposure and Supplementary leverage ratio reflects the temporary exclusions of U.S. Treasury securities and deposits at Federal Reserve Banks.
|
(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)
|
The Supplementary leverage ratio is calculated based on Tier 1 capital divided by Supplementary leverage exposure, which takes into account both on balance sheet assets as well as certain off-balance sheet items, including loan commitments and potential future exposure under derivative contracts.
|
|
Second Quarter 2020
|
|
|
Second 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
|
3.2
|
%
|
|
1.9
|
%
|
|
Effect on net interest income in second year from gradual interest rate change over the
preceding 12 months of:
|
|
|
|
|
||
100 basis point increase
|
11.2
|
%
|
|
4.8
|
%
|
|
Duration of Equity Model (a)
|
|
|
|
|
||
Base case duration of equity (in years)
|
(8.1
|
)
|
|
(4.7
|
)
|
|
Key Period-End Interest Rates
|
|
|
|
|
||
One-month LIBOR
|
.16
|
%
|
|
2.40
|
%
|
|
Three-month LIBOR
|
.30
|
%
|
|
2.32
|
%
|
|
Three-year swap
|
.23
|
%
|
|
1.74
|
%
|
|
(a)
|
Given the inherent limitations in certain of these measurement tools and techniques, results become less meaningful as interest rates approach zero. Senior management approved the suspension of the 100bps decrease in rate change sensitivities considering the current low rate environment.
|
|
June 30, 2020
|
|
|||||
|
PNC
Economist
|
|
Market
Forward
|
|
Slope
Flattening
|
|
|
First year sensitivity
|
(.5
|
)%
|
1.0
|
%
|
(1.0
|
)%
|
|
Second year sensitivity
|
.4
|
%
|
1.4
|
%
|
(3.1
|
)%
|
|
•
|
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.
|
|
June 30
2020 |
|
|
December 31
2019 |
|
|
Change
|
|
|||||||
Dollars in millions
|
|
$
|
|
|
%
|
|
|
||||||||
Tax credit investments
|
$
|
2,141
|
|
|
$
|
2,218
|
|
|
$
|
(77
|
)
|
|
(3
|
)%
|
|
Private equity and other
|
2,802
|
|
|
2,958
|
|
|
(156
|
)
|
|
(5
|
)%
|
|
|||
Total
|
$
|
4,943
|
|
|
$
|
5,176
|
|
|
$
|
(233
|
)
|
|
(5
|
)%
|
|
•
|
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 3 Investment Securities and Note 4 Loans and Related Allowance for Credit Losses 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 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:
|
–
|
PNC’s baseline economic forecast is for an economic recovery in the second half of 2020 and into 2021, following a very severe but short recession in the first half of 2020. Consumers are increasing their spending and workers are returning to their job sites as states are gradually lifting restrictions on businesses and activities because of the COVID-19 pandemic; fiscal stimulus from the federal government is also supporting economic growth in mid-2020. After a significant contraction in real GDP, steep job losses, and a large increase in the unemployment rate earlier in the second quarter, economic growth has resumed and the labor market is improving.
|
–
|
In the baseline forecast, real GDP increases 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 2022, and growth is well above its long-term trend through 2023.
|
–
|
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 potential downside risks, including additional COVID-19 outbreaks, 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 businesses and activities are reimposed or expanded, the economy could fall back into recession. The potential expiration of fiscal stimulus is also a major downside risk. The longer the labor market recovery takes, the more it will damage consumer fundamentals and sentiment. This could make the recovery weaker. Similarly, weak near-term growth 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 beginning in the fourth quarter of 2020, is subject to PNC meeting or exceeding a stress capital buffer established by the Federal Reserve Board in connection with the Federal Reserve Board's Comprehensive Capital Analysis and Review (CCAR) process. The Federal Reserve also has imposed limitations on capital distributions in the third quarter of 2020 by CCAR-participating bank holding companies and may extend these limitations, potentially in modified form.
|
•
|
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
|
•
|
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.
|
•
|
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
June 30 |
|
Six months ended
June 30 |
||||||||||||
In millions, except per share data
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Interest Income
|
|
|
|
|
|
|
|
||||||||
Loans
|
$
|
2,257
|
|
|
$
|
2,672
|
|
|
$
|
4,737
|
|
|
$
|
5,274
|
|
Investment securities
|
527
|
|
|
629
|
|
|
1,109
|
|
|
1,249
|
|
||||
Other
|
71
|
|
|
196
|
|
|
209
|
|
|
402
|
|
||||
Total interest income
|
2,855
|
|
|
3,497
|
|
|
6,055
|
|
|
6,925
|
|
||||
Interest Expense
|
|
|
|
|
|
|
|
||||||||
Deposits
|
141
|
|
|
515
|
|
|
516
|
|
|
987
|
|
||||
Borrowed funds
|
187
|
|
|
484
|
|
|
501
|
|
|
965
|
|
||||
Total interest expense
|
328
|
|
|
999
|
|
|
1,017
|
|
|
1,952
|
|
||||
Net interest income
|
2,527
|
|
|
2,498
|
|
|
5,038
|
|
|
4,973
|
|
||||
Noninterest Income
|
|
|
|
|
|
|
|
||||||||
Asset management
|
199
|
|
|
221
|
|
|
400
|
|
|
433
|
|
||||
Consumer services
|
330
|
|
|
392
|
|
|
707
|
|
|
763
|
|
||||
Corporate services
|
512
|
|
|
484
|
|
|
1,038
|
|
|
946
|
|
||||
Residential mortgage
|
158
|
|
|
82
|
|
|
368
|
|
|
147
|
|
||||
Service charges on deposits
|
79
|
|
|
171
|
|
|
247
|
|
|
339
|
|
||||
Other
|
271
|
|
|
367
|
|
|
614
|
|
|
675
|
|
||||
Total noninterest income
|
1,549
|
|
|
1,717
|
|
|
3,374
|
|
|
3,303
|
|
||||
Total revenue
|
4,076
|
|
|
4,215
|
|
|
8,412
|
|
|
8,276
|
|
||||
Provision For Credit Losses
|
2,463
|
|
|
180
|
|
|
3,377
|
|
|
369
|
|
||||
Noninterest Expense
|
|
|
|
|
|
|
|
||||||||
Personnel
|
1,373
|
|
|
1,365
|
|
|
2,742
|
|
|
2,779
|
|
||||
Occupancy
|
199
|
|
|
212
|
|
|
406
|
|
|
427
|
|
||||
Equipment
|
301
|
|
|
298
|
|
|
588
|
|
|
571
|
|
||||
Marketing
|
47
|
|
|
83
|
|
|
105
|
|
|
148
|
|
||||
Other
|
595
|
|
|
653
|
|
|
1,217
|
|
|
1,264
|
|
||||
Total noninterest expense
|
2,515
|
|
|
2,611
|
|
|
5,058
|
|
|
5,189
|
|
||||
Income (loss) from continuing operations before income taxes and noncontrolling interests
|
(902
|
)
|
|
1,424
|
|
|
(23
|
)
|
|
2,718
|
|
||||
Income taxes (benefit) from continuing operations
|
(158
|
)
|
|
239
|
|
|
(38
|
)
|
|
451
|
|
||||
Net income (loss) from continuing operations
|
(744
|
)
|
|
1,185
|
|
|
15
|
|
|
2,267
|
|
||||
Income from discontinued operations before taxes
|
5,596
|
|
|
224
|
|
|
5,777
|
|
|
449
|
|
||||
Income taxes from discontinued operations
|
1,197
|
|
|
35
|
|
|
1,222
|
|
|
71
|
|
||||
Net income from discontinued operations
|
4,399
|
|
|
189
|
|
|
4,555
|
|
|
378
|
|
||||
Net income
|
3,655
|
|
|
1,374
|
|
|
4,570
|
|
|
2,645
|
|
||||
Less: Net income attributable to noncontrolling interests
|
7
|
|
|
12
|
|
|
14
|
|
|
22
|
|
||||
Preferred stock dividends
|
55
|
|
|
55
|
|
|
118
|
|
|
118
|
|
||||
Preferred stock discount accretion and redemptions
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Net income attributable to common shareholders
|
$
|
3,592
|
|
|
$
|
1,306
|
|
|
$
|
4,436
|
|
|
$
|
2,503
|
|
Earnings Per Common Share
|
|
|
|
|
|
|
|
||||||||
Basic earnings (loss) from continuing operations
|
$
|
(1.90
|
)
|
|
$
|
2.47
|
|
|
$
|
(0.29
|
)
|
|
$
|
4.68
|
|
Basic earnings from discontinued operations
|
10.28
|
|
|
.42
|
|
|
10.60
|
|
|
.83
|
|
||||
Total basic earnings
|
$
|
8.40
|
|
|
$
|
2.89
|
|
|
$
|
10.33
|
|
|
$
|
5.51
|
|
Diluted earnings (loss) from continuing operations
|
$
|
(1.90
|
)
|
|
$
|
2.47
|
|
|
$
|
(0.29
|
)
|
|
$
|
4.67
|
|
Diluted earnings from discontinued operations
|
10.28
|
|
|
.41
|
|
|
10.59
|
|
|
.82
|
|
||||
Total diluted earnings
|
$
|
8.40
|
|
|
$
|
2.88
|
|
|
$
|
10.32
|
|
|
$
|
5.49
|
|
Average Common Shares Outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
426
|
|
|
451
|
|
|
428
|
|
|
453
|
|
||||
Diluted
|
426
|
|
|
452
|
|
|
428
|
|
|
454
|
|
Unaudited
In millions
|
|
Three months ended
June 30 |
|
Six months ended
June 30 |
|
||||||||||||
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
||||||
Net income (loss) from continuing operations
|
|
$
|
(744
|
)
|
|
$
|
1,185
|
|
|
$
|
15
|
|
|
$
|
2,267
|
|
|
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
|
|
620
|
|
|
|
|
2,107
|
|
|
|
|
||||||
Net unrealized gains (losses) on securities with an allowance for credit losses
|
|
(82
|
)
|
|
|
|
(89
|
)
|
|
|
|
||||||
Net unrealized gains (losses) on non-OTTI securities
|
|
|
|
694
|
|
|
|
|
1,333
|
|
|
||||||
Net unrealized gains (losses) on OTTI securities
|
|
|
|
|
|
|
|
|
9
|
|
|
||||||
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
12
|
|
|
254
|
|
|
797
|
|
|
354
|
|
|
||||
Pension and other postretirement benefit plan adjustments
|
|
(17
|
)
|
|
(84
|
)
|
|
(5
|
)
|
|
61
|
|
|
||||
Other
|
|
2
|
|
|
5
|
|
|
10
|
|
|
10
|
|
|
||||
Other comprehensive income (loss) from continuing operations, before tax and net of reclassifications into Net income
|
|
535
|
|
|
869
|
|
|
2,820
|
|
|
1,767
|
|
|
||||
Income tax benefit (expense) from continuing operations related to items of other comprehensive income
|
|
(125
|
)
|
|
(205
|
)
|
|
(665
|
)
|
|
(407
|
)
|
|
||||
Other comprehensive income (loss) from continuing operations, after tax and net of reclassifications into Net income
|
|
410
|
|
|
664
|
|
|
2,155
|
|
|
1,360
|
|
|
||||
Net income from discontinued operations
|
|
4,399
|
|
|
189
|
|
|
4,555
|
|
|
378
|
|
|
||||
Other comprehensive income (loss) from discontinued operations, before tax and net of reclassifications into Net income
|
|
182
|
|
|
(35
|
)
|
|
148
|
|
|
(6
|
)
|
|
||||
Income tax benefit (expense) from discontinued operations related to items of other comprehensive income
|
|
(41
|
)
|
|
7
|
|
|
(33
|
)
|
|
2
|
|
|
||||
Other comprehensive income (loss) from discontinued operations, after tax and net of reclassifications into Net income
|
|
141
|
|
|
(28
|
)
|
|
115
|
|
|
(4
|
)
|
|
||||
Other comprehensive income (loss), after tax and net of reclassifications into Net income
|
|
551
|
|
|
636
|
|
|
2,270
|
|
|
1,356
|
|
|
||||
Comprehensive income
|
|
4,206
|
|
|
2,010
|
|
|
6,840
|
|
|
4,001
|
|
|
||||
Less: Comprehensive income attributable to noncontrolling interests
|
|
7
|
|
|
12
|
|
|
14
|
|
|
22
|
|
|
||||
Comprehensive income attributable to PNC
|
|
$
|
4,199
|
|
|
$
|
1,998
|
|
|
$
|
6,826
|
|
|
$
|
3,979
|
|
|
Unaudited
|
June 30
2020 |
|
|
December 31
2019 |
|
||
In millions, except par value
|
|||||||
Assets
|
|
|
|
||||
Cash and due from banks
|
$
|
6,338
|
|
|
$
|
5,061
|
|
Interest-earning deposits with banks
|
50,233
|
|
|
23,413
|
|
||
Loans held for sale (a)
|
1,443
|
|
|
1,083
|
|
||
Asset held for sale (b)
|
|
|
|
8,558
|
|
||
Investment securities – available for sale
|
97,052
|
|
|
69,163
|
|
||
Investment securities – held to maturity
|
1,441
|
|
|
17,661
|
|
||
Loans (a)
|
258,236
|
|
|
239,843
|
|
||
Allowance for loan and lease losses (c)
|
(5,928
|
)
|
|
(2,742
|
)
|
||
Net loans
|
252,308
|
|
|
237,101
|
|
||
Equity investments
|
4,943
|
|
|
5,176
|
|
||
Mortgage servicing rights
|
1,067
|
|
|
1,644
|
|
||
Goodwill
|
9,233
|
|
|
9,233
|
|
||
Other (a)
|
34,920
|
|
|
32,202
|
|
||
Total assets
|
$
|
458,978
|
|
|
$
|
410,295
|
|
Liabilities
|
|
|
|
||||
Deposits
|
|
|
|
||||
Noninterest-bearing
|
$
|
99,458
|
|
|
$
|
72,779
|
|
Interest-bearing
|
246,539
|
|
|
215,761
|
|
||
Total deposits
|
345,997
|
|
|
288,540
|
|
||
Borrowed funds
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
8,500
|
|
|
16,341
|
|
||
Bank notes and senior debt
|
27,704
|
|
|
29,010
|
|
||
Subordinated debt
|
6,500
|
|
|
6,134
|
|
||
Other (d)
|
4,322
|
|
|
8,778
|
|
||
Total borrowed funds
|
47,026
|
|
|
60,263
|
|
||
Allowance for unfunded lending related commitments (c)
|
662
|
|
|
318
|
|
||
Accrued expenses and other liabilities
|
12,345
|
|
|
11,831
|
|
||
Total liabilities
|
406,030
|
|
|
360,952
|
|
||
Equity
|
|
|
|
||||
Preferred stock (e)
|
|
|
|
||||
Common stock ($5 par value, Authorized 800 shares, issued 542 shares)
|
2,712
|
|
|
2,712
|
|
||
Capital surplus
|
16,284
|
|
|
16,369
|
|
||
Retained earnings
|
44,986
|
|
|
42,215
|
|
||
Accumulated other comprehensive income
|
3,069
|
|
|
799
|
|
||
Common stock held in treasury at cost: 117 and 109 shares
|
(14,128
|
)
|
|
(12,781
|
)
|
||
Total shareholders’ equity
|
52,923
|
|
|
49,314
|
|
||
Noncontrolling interests
|
25
|
|
|
29
|
|
||
Total equity
|
52,948
|
|
|
49,343
|
|
||
Total liabilities and equity
|
$
|
458,978
|
|
|
$
|
410,295
|
|
(a)
|
Our consolidated assets included the following for which we have elected the fair value option: Loans held for sale of $1.2 billion, Loans of $1.0 billion and Other assets of $.1 billion at June 30, 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)
|
Represents our held for sale investment in BlackRock. In the second quarter of 2020, PNC divested its entire investment in BlackRock. See Note 2 Discontinued Operations for additional information. Prior period BlackRock investment balances have been reclassified to the Asset held for sale line in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations. Refer to Note 1 Accounting Policies and Note 2 Discontinued Operations for additional details.
|
(c)
|
Amount as of June 30, 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. Refer to Note 1 Accounting Policies in this Report for additional detail on the adoption of this standard.
|
(d)
|
Our consolidated liabilities at June 30, 2020 and December 31, 2019 included Other borrowed funds of less than $.1 billion and $.1 billion, respectively, for which we have elected the fair value option.
|
(e)
|
Par value less than $.5 million at each date.
|
Unaudited
In millions
|
|
Six months ended
June 30 |
|
||||||
2020
|
|
|
2019
|
|
|
||||
Operating Activities
|
|
|
|
|
|
||||
Net income
|
|
$
|
4,570
|
|
|
$
|
2,645
|
|
|
Adjustments to reconcile net income to net cash provided (used) by operating activities
|
|
|
|
|
|
||||
Provision for credit losses
|
|
3,377
|
|
|
369
|
|
|
||
Depreciation and amortization
|
|
712
|
|
|
579
|
|
|
||
Deferred income taxes
|
|
(2,501
|
)
|
|
106
|
|
|
||
Net gains on sales of securities
|
|
(222
|
)
|
|
(32
|
)
|
|
||
Changes in fair value of mortgage servicing rights
|
|
728
|
|
|
502
|
|
|
||
Gain on sale of BlackRock
|
|
(5,740
|
)
|
|
|
|
|||
Undistributed earnings of BlackRock
|
|
(174
|
)
|
|
(220
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Trading securities and other short-term investments
|
|
(266
|
)
|
|
1,465
|
|
|
||
Loans held for sale
|
|
(170
|
)
|
|
(116
|
)
|
|
||
Other assets
|
|
(1,675
|
)
|
|
(2,286
|
)
|
|
||
Accrued expenses and other liabilities
|
|
3,161
|
|
|
812
|
|
|
||
Other
|
|
531
|
|
|
(180
|
)
|
|
||
Net cash provided (used) by operating activities
|
|
$
|
2,331
|
|
|
$
|
3,644
|
|
|
Investing Activities
|
|
|
|
|
|
||||
Sales
|
|
|
|
|
|
||||
Securities available for sale
|
|
$
|
12,055
|
|
|
$
|
2,817
|
|
|
Net proceeds from sale of BlackRock
|
|
14,225
|
|
|
|
|
|||
Loans
|
|
597
|
|
|
520
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Securities available for sale
|
|
10,110
|
|
|
4,795
|
|
|
||
Securities held to maturity
|
|
38
|
|
|
1,155
|
|
|
||
Purchases
|
|
|
|
|
|
||||
Securities available for sale
|
|
(31,593
|
)
|
|
(11,141
|
)
|
|
||
Securities held to maturity
|
|
(44
|
)
|
|
(292
|
)
|
|
||
Loans
|
|
(173
|
)
|
|
(735
|
)
|
|
||
Net change in
|
|
|
|
|
|
||||
Federal funds sold and resale agreements
|
|
460
|
|
|
4,538
|
|
|
||
Interest-earning deposits with banks
|
|
(26,820
|
)
|
|
(7,469
|
)
|
|
||
Loans
|
|
(19,886
|
)
|
|
(11,169
|
)
|
|
||
Other
|
|
(206
|
)
|
|
(502
|
)
|
|
||
Net cash provided (used) by investing activities
|
|
$
|
(41,237
|
)
|
|
$
|
(17,483
|
)
|
|
Unaudited
In millions
|
|
Six Months Ended
June 30 |
|
||||||
2020
|
|
|
2019
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||||
Net change in
|
|
|
|
|
|
||||
Noninterest-bearing deposits
|
|
$
|
26,673
|
|
|
$
|
(3,992
|
)
|
|
Interest-bearing deposits
|
|
30,778
|
|
|
9,514
|
|
|
||
Federal funds purchased and repurchase agreements
|
|
(5,888
|
)
|
|
1,546
|
|
|
||
Federal Home Loan Bank borrowings
|
|
(6,300
|
)
|
|
6,875
|
|
|
||
Other borrowed funds
|
|
1,486
|
|
|
(119
|
)
|
|
||
Sales/issuances
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
9,060
|
|
|
12,000
|
|
|
||
Bank notes and senior debt
|
|
3,487
|
|
|
4,438
|
|
|
||
Other borrowed funds
|
|
304
|
|
|
771
|
|
|
||
Common and treasury stock
|
|
34
|
|
|
40
|
|
|
||
Repayments/maturities
|
|
|
|
|
|
||||
Federal Home Loan Bank borrowings
|
|
(10,601
|
)
|
|
(11,000
|
)
|
|
||
Bank notes and senior debt
|
|
(5,897
|
)
|
|
(2,350
|
)
|
|
||
Subordinated debt
|
|
|
|
(700
|
)
|
|
|||
Other borrowed funds
|
|
(318
|
)
|
|
(777
|
)
|
|
||
Acquisition of treasury stock
|
|
(1,523
|
)
|
|
(1,613
|
)
|
|
||
Preferred stock cash dividends paid
|
|
(118
|
)
|
|
(118
|
)
|
|
||
Common stock cash dividends paid
|
|
(994
|
)
|
|
(868
|
)
|
|
||
Net cash provided (used) by financing activities
|
|
$
|
40,183
|
|
|
$
|
13,647
|
|
|
Net Increase (Decrease) In Cash And Due From Banks And Restricted Cash
|
|
1,277
|
|
|
(192
|
)
|
|
||
Net cash provided by discontinued operations
|
|
14,299
|
|
|
159
|
|
|
||
Net cash provided (used) by continuing operations
|
|
(13,022
|
)
|
|
(351
|
)
|
|
||
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
|
|
$
|
6,338
|
|
|
$
|
5,416
|
|
|
Cash and due from banks and restricted cash
|
|
|
|
|
|
||||
Cash and due from banks at end of period (unrestricted cash)
|
|
$
|
5,977
|
|
|
$
|
5,416
|
|
|
Restricted cash
|
|
361
|
|
|
|
|
|||
Cash and due from banks and restricted cash at end of period
|
|
$
|
6,338
|
|
|
$
|
5,416
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
||||
Interest paid
|
|
$
|
913
|
|
|
$
|
1,905
|
|
|
Income taxes paid
|
|
$
|
528
|
|
|
$
|
217
|
|
|
Income taxes refunded
|
|
$
|
9
|
|
|
$
|
7
|
|
|
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
59
|
|
|
$
|
236
|
|
|
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
|
|
$
|
542
|
|
|
$
|
256
|
|
|
Transfer from trading securities to investment securities
|
|
$
|
289
|
|
|
|
|
||
Transfer from loans to foreclosed assets
|
|
$
|
43
|
|
|
$
|
90
|
|
|
In millions
|
|
December 31, 2019
|
Transition Adjustment
|
January 1, 2020
|
||||||
Allowance for credit losses
|
|
|
|
|
||||||
Allowance for loan and lease losses
|
|
|
|
|
||||||
Commercial
|
|
$
|
1,812
|
|
$
|
(304
|
)
|
$
|
1,508
|
|
Consumer
|
|
930
|
|
767
|
|
1,697
|
|
|||
Total allowance for loan and lease losses
|
|
2,742
|
|
463
|
|
3,205
|
|
|||
Unfunded lending related commitments
|
|
318
|
|
179
|
|
497
|
|
|||
Other
|
|
—
|
|
19
|
|
19
|
|
|||
Total allowance for credit losses
|
|
$
|
3,060
|
|
$
|
661
|
|
$
|
3,721
|
|
|
|
|
|
|
||||||
In millions
|
|
December 31, 2019
|
|
Transition Adjustment
|
|
January 1, 2020
|
|
|||
Impact to retained earnings (a)
|
|
$
|
42,215
|
|
$
|
(671
|
)
|
$
|
41,544
|
|
•
|
Nonperforming Loans and Leases section of this Note 1,
|
•
|
Allowance for Credit Losses section of this Note 1, and
|
•
|
Note 4 Loans and Related Allowance for Credit Losses.
|
Commercial
|
||
Loans Classified as Nonperforming and Accounted for as Nonaccrual
|
|
• Loans accounted for at amortized cost where:
– The loan is 90 days or more past due.
– The loan is rated substandard or worse due to the determination that full collection of
principal and interest is not probable as demonstrated by the following conditions:
• The collection of principal or interest is 90 days or more past due;
• Reasonable doubt exists as to the certainty of the borrower’s future debt service
ability, according to the terms of the credit arrangement, regardless of whether 90
days have passed or not;
• The borrower has filed or will likely file for bankruptcy;
• The bank advances additional funds to cover principal or interest;
• We are in the process of liquidating a commercial borrower; or
• We are pursuing remedies under a guarantee.
|
Loans Excluded from Nonperforming Classification but Accounted for as Nonaccrual
|
|
• Loans accounted for under the fair value option and full collection of principal and interest
is not probable.
• Loans accounted for at the lower of cost or market less costs to sell (held for sale) and full
collection of principal and interest is not probable.
|
Loans Excluded from Nonperforming Classification and Nonaccrual Accounting
|
|
• Loans that are well secured and in the process of collection.
• Certain government insured loans where substantially all principal and interest is insured.
• Commercial purchasing card assets which do not accrue interest.
|
Loan Class
|
|
Probability of Default (PD)
|
Loss Given Default (LGD)
|
Exposure at Default (EAD)
|
Commercial
|
||||
Commercial and industrial / Equipment lease financing
|
|
• For wholesale obligors: internal risk ratings based on borrower characteristics and industry
• For retail small balance obligors: credit score, delinquency status, and product type
|
• 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 for loans
• Current utilization and historical pre-default draw experience for lines
|
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
|
• Commitment and historical prepayment experience
|
Consumer
|
||||
Home equity / 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 for loans
• Current utilization and historical pre-default draw experience for lines
|
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, delinquency status, utilization, payment behavior and months on book
|
• Borrower credit scores and credit line amount
|
• Pay-down curves are developed using a pro-rata method and estimated using borrower behavior segments, payment ratios and borrower credit scores
|
Education / Other consumer
|
|
• Net charge-off and pay-down 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
|
||||
Commercial and industrial / Equipment lease financing
|
|
• Gross Domestic Product and Gross Domestic Income measures, imports, employment related variables, 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, GDP, corporate bond yield and interest rates
|
• Immediate reversion
|
• Average parameters determined based on internal and external historical data
|
Consumer
|
||||
Home equity / Residential real estate
|
|
• Unemployment rates, HPI and interest rates
|
• Straight-line over 3 years
|
• Modeled parameters using long run economic conditions
|
Automobile
|
|
• Unemployment rates, HPI, personal consumption expenditure, 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 rate, personal consumption expenditure, and HPI
|
• Straight-line over 2 years
|
• Modeled parameters using long run economic conditions
|
Education / Other consumer
|
|
• Net charge-off and pay-down 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 ALLL 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, including the impact of COVID-19 hardship related loan modifications,
|
•
|
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
|
|
Three months ended
June 30 |
Six months ended
June 30 |
|||||||||||||
In millions
|
2020
|
|
2019
|
2020
|
|
2019
|
|
||||||||
Noninterest income
|
$
|
5,596
|
|
|
$
|
224
|
|
$
|
5,777
|
|
|
$
|
449
|
|
|
Total revenue
|
5,596
|
|
|
224
|
|
5,777
|
|
|
449
|
|
|
||||
Income from discontinued operations before income taxes and noncontrolling interests
|
5,596
|
|
|
224
|
|
5,777
|
|
|
449
|
|
|
||||
Income taxes
|
1,197
|
|
|
35
|
|
1,222
|
|
|
71
|
|
|
||||
Net income from discontinued operations
|
$
|
4,399
|
|
|
$
|
189
|
|
$
|
4,555
|
|
|
$
|
378
|
|
|
|
Six months ended
June 30 |
|
||||||
In millions
|
2020
|
|
2019
|
|
||||
Cash flows from discontinued operations
|
|
|
|
|
||||
Net cash provided (used) by operating activities of discontinued operations
|
$
|
74
|
|
|
$
|
159
|
|
|
Net cash provided by investing activities of discontinued operations
|
$
|
14,225
|
|
|
|
|
|
|
June 30, 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
|
|
$
|
19,255
|
|
|
$
|
933
|
|
|
|
|
$
|
20,188
|
|
|
|
$
|
16,150
|
|
|
$
|
382
|
|
|
$
|
(16
|
)
|
|
$
|
16,516
|
|
||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
55,630
|
|
|
1,860
|
|
|
$
|
(10
|
)
|
|
57,480
|
|
|
|
35,847
|
|
|
517
|
|
|
(43
|
)
|
|
36,321
|
|
|||||||
Non-agency
|
|
1,472
|
|
|
225
|
|
|
(15
|
)
|
|
1,682
|
|
|
|
1,515
|
|
|
302
|
|
|
(3
|
)
|
|
1,814
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Agency
|
|
3,002
|
|
|
141
|
|
|
(3
|
)
|
|
3,140
|
|
|
|
3,094
|
|
|
42
|
|
|
(18
|
)
|
|
3,118
|
|
||||||||
Non-agency
|
|
4,134
|
|
|
57
|
|
|
(152
|
)
|
|
4,039
|
|
|
|
3,352
|
|
|
29
|
|
|
(9
|
)
|
|
3,372
|
|
||||||||
Asset-backed
|
|
5,312
|
|
|
96
|
|
|
(40
|
)
|
|
5,368
|
|
|
|
5,044
|
|
|
78
|
|
|
(8
|
)
|
|
5,114
|
|
||||||||
Other
|
|
4,856
|
|
|
301
|
|
|
(2
|
)
|
|
5,155
|
|
|
|
2,788
|
|
|
121
|
|
|
(1
|
)
|
|
2,908
|
|
||||||||
Total securities available for sale (b)
|
|
$
|
93,661
|
|
|
$
|
3,613
|
|
|
$
|
(222
|
)
|
|
$
|
97,052
|
|
|
|
$
|
67,790
|
|
|
$
|
1,471
|
|
|
$
|
(98
|
)
|
|
$
|
69,163
|
|
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
U.S. Treasury and government agencies
|
|
$
|
785
|
|
|
$
|
146
|
|
|
|
|
$
|
931
|
|
|
|
$
|
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
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
|
|
|
|
|
52
|
|
|||||||||||||
Other
|
|
656
|
|
|
42
|
|
|
$
|
(14
|
)
|
|
684
|
|
|
|
1,792
|
|
|
85
|
|
|
(14
|
)
|
|
1,863
|
|
|||||||
Total securities held to maturity (b) (c)
|
|
$
|
1,441
|
|
|
$
|
188
|
|
|
$
|
(14
|
)
|
|
$
|
1,615
|
|
|
|
$
|
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
|
|
||||||
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
$
|
(7
|
)
|
|
$
|
2,124
|
|
|
$
|
(3
|
)
|
|
$
|
249
|
|
|
$
|
(10
|
)
|
|
$
|
2,373
|
|
Non-agency
|
|
(8
|
)
|
|
213
|
|
|
(6
|
)
|
|
81
|
|
|
(14
|
)
|
|
294
|
|
||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Agency
|
|
|
|
|
|
(3
|
)
|
|
136
|
|
|
(3
|
)
|
|
136
|
|
||||||||
Non-agency
|
|
(61
|
)
|
|
2,107
|
|
|
(2
|
)
|
|
71
|
|
|
(63
|
)
|
|
2,178
|
|
||||||
Asset-backed
|
|
(18
|
)
|
|
969
|
|
|
(22
|
)
|
|
616
|
|
|
(40
|
)
|
|
1,585
|
|
||||||
Other
|
|
(1
|
)
|
|
100
|
|
|
(1
|
)
|
|
35
|
|
|
(2
|
)
|
|
135
|
|
||||||
Total securities available for sale
|
|
$
|
(95
|
)
|
|
$
|
5,513
|
|
|
$
|
(37
|
)
|
|
$
|
1,188
|
|
|
$
|
(132
|
)
|
|
$
|
6,701
|
|
|
|
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
|
|
|
Six months ended June 30
In millions |
Gross Gains
|
|
Gross Losses
|
|
Net Gains (Losses)
|
|
Tax Expense (Benefit)
|
|
|
||||
2020
|
$
|
224
|
|
$
|
(2
|
)
|
$
|
222
|
|
$
|
47
|
|
|
2019
|
$
|
47
|
|
$
|
(15
|
)
|
$
|
32
|
|
$
|
7
|
|
|
June 30, 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
|
|
$
|
5,647
|
|
|
$
|
9,172
|
|
|
$
|
3,516
|
|
|
$
|
920
|
|
|
$
|
19,255
|
|
|
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
2
|
|
|
112
|
|
|
1,220
|
|
|
54,296
|
|
|
55,630
|
|
|
|||||
Non-agency
|
|
|
|
|
|
|
|
1,472
|
|
|
1,472
|
|
|
||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Agency
|
|
|
|
459
|
|
|
265
|
|
|
2,278
|
|
|
3,002
|
|
|
||||||
Non-agency
|
|
|
|
75
|
|
|
301
|
|
|
3,758
|
|
|
4,134
|
|
|
||||||
Asset-backed
|
|
66
|
|
|
2,603
|
|
|
1,039
|
|
|
1,604
|
|
|
5,312
|
|
|
|||||
Other
|
|
607
|
|
|
1,794
|
|
|
1,108
|
|
|
1,347
|
|
|
4,856
|
|
|
|||||
Total securities available for sale at amortized cost
|
|
$
|
6,322
|
|
|
$
|
14,215
|
|
|
$
|
7,449
|
|
|
$
|
65,675
|
|
|
$
|
93,661
|
|
|
Fair value
|
|
$
|
6,341
|
|
|
$
|
14,801
|
|
|
$
|
7,823
|
|
|
$
|
68,087
|
|
|
$
|
97,052
|
|
|
Weighted-average yield, GAAP basis (a)
|
|
0.75
|
%
|
|
2.08
|
%
|
|
2.12
|
%
|
|
2.97
|
%
|
|
2.62
|
%
|
|
|||||
Securities Held to Maturity
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and government agencies
|
|
|
|
$
|
198
|
|
|
$
|
306
|
|
|
$
|
281
|
|
|
$
|
785
|
|
|
||
Other
|
|
$
|
18
|
|
|
403
|
|
|
120
|
|
|
115
|
|
|
656
|
|
|
||||
Total securities held to maturity at amortized cost
|
|
$
|
18
|
|
|
$
|
601
|
|
|
$
|
426
|
|
|
$
|
396
|
|
|
$
|
1,441
|
|
|
Fair value
|
|
$
|
18
|
|
|
$
|
638
|
|
|
$
|
515
|
|
|
$
|
444
|
|
|
$
|
1,615
|
|
|
Weighted-average yield, GAAP basis (a)
|
|
2.94
|
%
|
|
3.23
|
%
|
|
3.93
|
%
|
|
2.66
|
%
|
|
3.30
|
%
|
|
In millions
|
June 30
2020 |
|
December 31
2019 |
|
||
Pledged to others
|
$
|
23,528
|
|
$
|
14,609
|
|
Accepted from others:
|
|
|
||||
Permitted by contract or custom to sell or repledge (a)
|
$
|
1,944
|
|
$
|
2,349
|
|
Permitted amount repledged to others
|
$
|
1,944
|
|
$
|
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
|
|
Consumer
|
|
||
• Commercial and industrial
|
|
• 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 (c)
|
|
|
Nonperforming
Loans
|
|
Fair Value
Option
Nonaccrual
Loans (d)
|
|
Total Loans
(e)(f)
|
|
|
||||||||
June 30, 2020 (a) (b)
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Commercial and industrial
|
$
|
143,531
|
|
$
|
49
|
|
$
|
28
|
|
$
|
34
|
|
$
|
111
|
|
|
$
|
693
|
|
|
$
|
144,335
|
|
|
||
Commercial real estate
|
28,665
|
|
51
|
|
4
|
|
|
55
|
|
|
43
|
|
|
28,763
|
|
|
||||||||||
Equipment lease financing
|
7,058
|
|
8
|
|
9
|
|
|
17
|
|
|
22
|
|
|
7,097
|
|
|
||||||||||
Total commercial
|
179,254
|
|
108
|
|
41
|
|
34
|
|
183
|
|
|
758
|
|
|
180,195
|
|
|
|||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Home equity
|
24,089
|
|
70
|
|
27
|
|
|
97
|
|
|
636
|
|
$
|
57
|
|
24,879
|
|
|
||||||||
Residential real estate
|
21,141
|
|
198
|
|
93
|
|
264
|
|
555
|
|
(c)
|
305
|
|
468
|
|
22,469
|
|
|
||||||||
Automobile
|
15,843
|
|
105
|
|
34
|
|
19
|
|
158
|
|
|
156
|
|
|
16,157
|
|
|
|||||||||
Credit card
|
6,408
|
|
53
|
|
38
|
|
61
|
|
152
|
|
|
15
|
|
|
6,575
|
|
|
|||||||||
Education
|
3,004
|
|
39
|
|
23
|
|
66
|
|
128
|
|
(c)
|
|
|
3,132
|
|
|
||||||||||
Other consumer
|
4,786
|
|
17
|
|
8
|
|
12
|
|
37
|
|
|
6
|
|
|
4,829
|
|
|
|||||||||
Total consumer
|
75,271
|
|
482
|
|
223
|
|
422
|
|
1,127
|
|
|
1,118
|
|
525
|
|
78,041
|
|
|
||||||||
Total
|
$
|
254,525
|
|
$
|
590
|
|
$
|
264
|
|
$
|
456
|
|
$
|
1,310
|
|
|
$
|
1,876
|
|
$
|
525
|
|
$
|
258,236
|
|
|
Percentage of total loans
|
98.56
|
%
|
.23
|
%
|
.10
|
%
|
.18
|
%
|
.51
|
%
|
|
.73
|
%
|
.20
|
%
|
100.00
|
%
|
|
(a)
|
Amounts in table represent loans held for investment and do not include any associated valuation allowance.
|
(b)
|
The accrued interest associated with our loan portfolio at June 30, 2020 totaled $.7 billion and is included in Other assets on the Consolidated Balance Sheet.
|
(c)
|
Past due loan amounts include government insured or guaranteed Residential real estate loans and Education loans totaling $.4 billion and $.1 billion, respectively, at June 30, 2020.
|
(d)
|
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.
|
(e)
|
Net of unearned income, unamortized deferred fees and costs on originated loans, and premiums or discounts on purchased loans totaling $1.6 billion at June 30, 2020.
|
(f)
|
Collateral dependent loans totaled $1.1 billion at June 30, 2020. The majority of these loans are within the Home equity and Residential real estate loan classes and are secured by consumer real estate.
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Commercial and industrial
|
$
|
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
|
159,825
|
|
155
|
|
36
|
|
85
|
|
276
|
|
|
501
|
|
|
|
160,602
|
|
|
|||||||||||
Consumer
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
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
|
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
|
|
June 30
2020 |
|
|
December 31
2019 |
|
|
||
Nonperforming loans
|
|
|
|
|
|
||||
Commercial
|
|
$
|
758
|
|
|
$
|
501
|
|
|
Consumer (a)
|
|
1,118
|
|
|
1,134
|
|
|
||
Total nonperforming loans (b)
|
|
1,876
|
|
|
1,635
|
|
|
||
OREO and foreclosed assets
|
|
79
|
|
|
117
|
|
|
||
Total nonperforming assets
|
|
$
|
1,955
|
|
|
$
|
1,752
|
|
|
Nonperforming loans to total loans
|
|
.73
|
%
|
|
.68
|
%
|
|
||
Nonperforming assets to total loans, OREO and foreclosed assets
|
|
.76
|
%
|
|
.73
|
%
|
|
||
Nonperforming assets to total assets
|
|
.43
|
%
|
|
.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 ALLL totaled $.6 billion at June 30, 2020, and is primarily comprised of loans with a valuation that exceeds the amortized cost basis.
|
|
Term Loans by Origination Year
|
|
|
|
|||||||||||||||||||||||
June 30, 2020 - In millions
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term
|
|
Total
Loans
|
|
|||||||||
Commercial and industrial
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
$
|
24,271
|
|
$
|
17,179
|
|
$
|
10,823
|
|
$
|
7,171
|
|
$
|
5,013
|
|
$
|
11,039
|
|
$
|
60,961
|
|
$
|
59
|
|
$
|
136,516
|
|
Criticized
|
218
|
|
524
|
|
656
|
|
463
|
|
247
|
|
517
|
|
5,177
|
|
17
|
|
7,819
|
|
|||||||||
Total commercial and industrial
|
24,489
|
|
17,703
|
|
11,479
|
|
7,634
|
|
5,260
|
|
11,556
|
|
66,138
|
|
76
|
|
144,335
|
|
|||||||||
Commercial real estate
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
1,797
|
|
7,027
|
|
4,054
|
|
3,652
|
|
2,734
|
|
8,347
|
|
216
|
|
|
27,827
|
|
||||||||||
Criticized
|
3
|
|
73
|
|
26
|
|
64
|
|
252
|
|
422
|
|
96
|
|
|
936
|
|
||||||||||
Total commercial real estate
|
1,800
|
|
7,100
|
|
4,080
|
|
3,716
|
|
2,986
|
|
8,769
|
|
312
|
|
|
28,763
|
|
||||||||||
Equipment lease financing
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Pass Rated
|
736
|
|
1,385
|
|
1,179
|
|
969
|
|
631
|
|
1,909
|
|
|
|
6,809
|
|
|||||||||||
Criticized
|
15
|
|
87
|
|
97
|
|
39
|
|
19
|
|
31
|
|
|
|
288
|
|
|||||||||||
Total equipment lease financing
|
751
|
|
1,472
|
|
1,276
|
|
1,008
|
|
650
|
|
1,940
|
|
|
|
7,097
|
|
|||||||||||
Total commercial
|
$
|
27,040
|
|
$
|
26,275
|
|
$
|
16,835
|
|
$
|
12,358
|
|
$
|
8,896
|
|
$
|
22,265
|
|
$
|
66,450
|
|
$
|
76
|
|
$
|
180,195
|
|
December 31, 2019 - In millions
|
|
Pass Rated
|
|
|
Criticized
|
|
|
Total Loans
|
|
|
|||
Commercial and industrial
|
|
$
|
119,761
|
|
|
$
|
5,576
|
|
|
$
|
125,337
|
|
|
Commercial real estate
|
|
27,424
|
|
|
686
|
|
|
28,110
|
|
|
|||
Equipment lease financing
|
|
6,891
|
|
|
264
|
|
|
7,155
|
|
|
|||
Total commercial
|
|
$
|
154,076
|
|
|
$
|
6,526
|
|
|
$
|
160,602
|
|
|
(a)
|
Loans in our commercial 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 June 30, 2020 and December 31, 2019.
|
|
Term Loans by Origination Year
|
|
|
|
|||||||||||||||||||||||
June 30, 2020 – In millions
|
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%
|
|
$
|
33
|
|
$
|
26
|
|
$
|
24
|
|
$
|
14
|
|
$
|
127
|
|
$
|
677
|
|
$
|
365
|
|
$
|
1,266
|
|
||
Greater than or equal to 90% to less than 100%
|
$
|
4
|
|
77
|
|
32
|
|
16
|
|
12
|
|
82
|
|
693
|
|
247
|
|
1,163
|
|
||||||||
Less than 90%
|
1,779
|
|
2,363
|
|
688
|
|
972
|
|
818
|
|
4,563
|
|
8,177
|
|
3,090
|
|
22,450
|
|
|||||||||
Total home equity
|
$
|
1,783
|
|
$
|
2,473
|
|
$
|
746
|
|
$
|
1,012
|
|
$
|
844
|
|
$
|
4,772
|
|
$
|
9,547
|
|
$
|
3,702
|
|
$
|
24,879
|
|
Updated FICO scores
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than 660
|
$
|
1,738
|
|
$
|
2,353
|
|
$
|
685
|
|
$
|
949
|
|
$
|
792
|
|
$
|
4,287
|
|
$
|
9,085
|
|
$
|
2,832
|
|
$
|
22,721
|
|
Less than or equal to 660
|
45
|
|
120
|
|
61
|
|
62
|
|
51
|
|
475
|
|
449
|
|
780
|
|
2,043
|
|
|||||||||
No FICO score available
|
|
|
|
1
|
|
1
|
|
10
|
|
13
|
|
90
|
|
115
|
|
||||||||||||
Total home equity
|
$
|
1,783
|
|
$
|
2,473
|
|
$
|
746
|
|
$
|
1,012
|
|
$
|
844
|
|
$
|
4,772
|
|
$
|
9,547
|
|
$
|
3,702
|
|
$
|
24,879
|
|
Residential real estate
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Current estimated LTV ratios
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than or equal to 100%
|
|
$
|
19
|
|
$
|
44
|
|
$
|
68
|
|
$
|
52
|
|
$
|
226
|
|
|
|
$
|
409
|
|
||||||
Greater than or equal to 90% to less than 100%
|
$
|
7
|
|
54
|
|
57
|
|
55
|
|
43
|
|
131
|
|
|
|
347
|
|
||||||||||
Less than 90%
|
3,872
|
|
5,526
|
|
1,598
|
|
2,475
|
|
2,535
|
|
5,128
|
|
|
|
21,134
|
|
|||||||||||
Government insured or guaranteed loans
|
1
|
|
10
|
|
13
|
|
17
|
|
26
|
|
512
|
|
|
|
579
|
|
|||||||||||
Total residential real estate
|
$
|
3,880
|
|
$
|
5,609
|
|
$
|
1,712
|
|
$
|
2,615
|
|
$
|
2,656
|
|
$
|
5,997
|
|
|
|
$
|
22,469
|
|
||||
Updated FICO scores
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Greater than 660
|
$
|
3,858
|
|
$
|
5,530
|
|
$
|
1,655
|
|
$
|
2,538
|
|
$
|
2,548
|
|
$
|
4,704
|
|
|
|
$
|
20,833
|
|
||||
Less than or equal to 660
|
20
|
|
64
|
|
36
|
|
39
|
|
68
|
|
632
|
|
|
|
859
|
|
|||||||||||
No FICO score available
|
1
|
|
5
|
|
8
|
|
21
|
|
14
|
|
149
|
|
|
|
198
|
|
|||||||||||
Government insured or guaranteed loans
|
1
|
|
10
|
|
13
|
|
17
|
|
26
|
|
512
|
|
|
|
579
|
|
|||||||||||
Total residential real estate
|
$
|
3,880
|
|
$
|
5,609
|
|
$
|
1,712
|
|
$
|
2,615
|
|
$
|
2,656
|
|
$
|
5,997
|
|
|
|
$
|
22,469
|
|
|
Home equity
|
Residential real estate
|
|
|||
December 31, 2019 - In millions
|
||||||
Current estimated LTV ratios
|
|
|
||||
Greater than or equal to 100%
|
$
|
1,243
|
|
$
|
333
|
|
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
|
|
|
Term Loans by Origination Year
|
|
|
|
|||||||||||||||||||||||
June 30, 2020 - In millions
|
2020
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
Prior
|
|
Revolving Loans
|
|
Revolving Loans Converted to Term
|
|
Total Loans
|
|
|||||||||
Automobile
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
1,816
|
|
$
|
3,802
|
|
$
|
1,814
|
|
$
|
1,042
|
|
$
|
606
|
|
$
|
201
|
|
|
|
$
|
9,281
|
|
||||
650 to 719
|
561
|
|
1,868
|
|
1,062
|
|
481
|
|
207
|
|
75
|
|
|
|
4,254
|
|
|||||||||||
620 to 649
|
73
|
|
445
|
|
257
|
|
104
|
|
39
|
|
15
|
|
|
|
933
|
|
|||||||||||
Less than 620
|
58
|
|
653
|
|
579
|
|
252
|
|
102
|
|
45
|
|
|
|
1,689
|
|
|||||||||||
Total automobile
|
$
|
2,508
|
|
$
|
6,768
|
|
$
|
3,712
|
|
$
|
1,879
|
|
$
|
954
|
|
$
|
336
|
|
|
|
$
|
16,157
|
|
||||
Credit card
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
|
|
|
|
|
|
$
|
3,395
|
|
$
|
11
|
|
$
|
3,406
|
|
||||||||||||
650 to 719
|
|
|
|
|
|
|
2,152
|
|
30
|
|
2,182
|
|
|||||||||||||||
620 to 649
|
|
|
|
|
|
|
378
|
|
12
|
|
390
|
|
|||||||||||||||
Less than 620
|
|
|
|
|
|
|
462
|
|
46
|
|
508
|
|
|||||||||||||||
No FICO score available or required (a)
|
|
|
|
|
|
|
86
|
|
3
|
|
89
|
|
|||||||||||||||
Total credit card
|
|
|
|
|
|
|
$
|
6,473
|
|
$
|
102
|
|
$
|
6,575
|
|
||||||||||||
Education
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
13
|
|
$
|
90
|
|
$
|
119
|
|
$
|
92
|
|
$
|
75
|
|
$
|
674
|
|
|
|
$
|
1,063
|
|
||||
650 to 719
|
3
|
|
12
|
|
16
|
|
10
|
|
7
|
|
112
|
|
|
|
160
|
|
|||||||||||
620 to 649
|
|
1
|
|
2
|
|
1
|
|
|
18
|
|
|
|
22
|
|
|||||||||||||
Less than 620
|
|
|
1
|
|
1
|
|
1
|
|
22
|
|
|
|
25
|
|
|||||||||||||
No FICO score available or required (a)
|
2
|
|
10
|
|
7
|
|
6
|
|
1
|
|
1
|
|
|
|
27
|
|
|||||||||||
Total loans using FICO credit metric
|
18
|
|
113
|
|
145
|
|
110
|
|
84
|
|
827
|
|
|
|
1,297
|
|
|||||||||||
Other internal credit metrics
|
18
|
|
59
|
|
|
|
|
1,758
|
|
|
|
1,835
|
|
||||||||||||||
Total education
|
$
|
36
|
|
$
|
172
|
|
$
|
145
|
|
$
|
110
|
|
$
|
84
|
|
$
|
2,585
|
|
|
|
$
|
3,132
|
|
||||
Other consumer
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
FICO score greater than 719
|
$
|
297
|
|
$
|
545
|
|
$
|
188
|
|
$
|
60
|
|
$
|
19
|
|
$
|
80
|
|
$
|
212
|
|
$
|
1
|
|
$
|
1,402
|
|
650 to 719
|
117
|
|
313
|
|
134
|
|
31
|
|
9
|
|
23
|
|
143
|
|
1
|
|
771
|
|
|||||||||
620 to 649
|
13
|
|
51
|
|
24
|
|
5
|
|
1
|
|
4
|
|
22
|
|
|
120
|
|
||||||||||
Less than 620
|
8
|
|
48
|
|
33
|
|
10
|
|
3
|
|
7
|
|
36
|
|
1
|
|
146
|
|
|||||||||
No FICO score available or required (a)
|
|
|
|
|
|
2
|
|
6
|
|
|
8
|
|
|||||||||||||||
Total loans using FICO credit metric
|
435
|
|
957
|
|
379
|
|
106
|
|
32
|
|
116
|
|
419
|
|
3
|
|
2,447
|
|
|||||||||
Other internal credit metrics
|
20
|
|
73
|
|
46
|
|
32
|
|
67
|
|
81
|
|
2,059
|
|
4
|
|
2,382
|
|
|||||||||
Total other consumer
|
$
|
455
|
|
$
|
1,030
|
|
$
|
425
|
|
$
|
138
|
|
$
|
99
|
|
$
|
197
|
|
$
|
2,478
|
|
$
|
7
|
|
$
|
4,829
|
|
|
|
|
|
||||||||||
December 31, 2019 - In millions
|
|
Automobile
|
Credit Card
|
Education
|
Other Consumer
|
||||||||
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 June 30, 2020 (a)
Dollars in millions
|
Number
of Loans |
|
|
Principal
Forgiveness
|
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
|||||||||
Commercial
|
|
29
|
|
|
$
|
147
|
|
|
$
|
33
|
|
|
|
|
$
|
125
|
|
|
$
|
158
|
|
|
||
Consumer
|
|
3,589
|
|
|
57
|
|
|
|
|
$
|
19
|
|
|
35
|
|
|
54
|
|
|
|||||
Total TDRs
|
|
3,618
|
|
|
$
|
204
|
|
|
$
|
33
|
|
|
$
|
19
|
|
|
$
|
160
|
|
|
$
|
212
|
|
|
During the six months ended June 30, 2020
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Commercial
|
|
42
|
|
|
$
|
209
|
|
|
$
|
39
|
|
|
|
|
$
|
162
|
|
|
$
|
201
|
|
|
||
Consumer
|
|
7,156
|
|
|
93
|
|
|
|
|
|
$
|
41
|
|
|
45
|
|
|
86
|
|
|
||||
Total TDRs
|
|
7,198
|
|
|
$
|
302
|
|
|
$
|
39
|
|
|
$
|
41
|
|
|
$
|
207
|
|
|
$
|
287
|
|
|
|
|
|
Pre-TDR
Recorded
Investment (e)
|
|
|
Post-TDR Recorded Investment (f)
|
|
|||||||||||||||
During the three months ended June 30, 2019 (d)
Dollars in millions
|
Number
of Loans |
|
|
Principal
Forgiveness
|
|
Rate
Reduction
|
|
|
Other
|
|
|
Total
|
|
|
||||||||
Commercial
|
|
15
|
|
|
$
|
31
|
|
|
|
|
$
|
1
|
|
|
$
|
27
|
|
|
$
|
28
|
|
|
Consumer
|
|
3,539
|
|
|
44
|
|
|
|
|
24
|
|
|
16
|
|
|
40
|
|
|
||||
Total TDRs
|
|
3,554
|
|
|
$
|
75
|
|
|
|
|
$
|
25
|
|
|
$
|
43
|
|
|
$
|
68
|
|
|
During the six months ended June 30, 2019
Dollars in millions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial
|
|
37
|
|
|
$
|
136
|
|
|
|
|
$
|
1
|
|
|
$
|
136
|
|
|
$
|
137
|
|
|
Consumer
|
|
7,353
|
|
|
86
|
|
|
|
|
48
|
|
|
32
|
|
|
80
|
|
|
||||
Total TDRs
|
|
7,390
|
|
|
$
|
222
|
|
|
|
|
$
|
49
|
|
|
$
|
168
|
|
|
$
|
217
|
|
|
In millions
|
|
2020
|
|
|
2019
|
|
||
Three months ended June 30
|
|
$
|
22
|
|
|
$
|
28
|
|
Six months ended June 30
|
|
$
|
37
|
|
|
$
|
39
|
|
|
Six months ended June 30, 2020
|
||||||||
In millions
|
Commercial
|
|
Consumer
|
|
Total
|
|
|||
Allowance for loan and lease losses
|
|
|
|
||||||
December 31, 2019
|
$
|
1,812
|
|
$
|
930
|
|
$
|
2,742
|
|
Adoption of ASU 2016-13 (a)
|
(304
|
)
|
767
|
|
463
|
|
|||
January 1, 2020
|
1,508
|
|
1,697
|
|
3,205
|
|
|||
Charge-offs
|
(205
|
)
|
(413
|
)
|
(618
|
)
|
|||
Recoveries
|
39
|
|
131
|
|
170
|
|
|||
Net (charge-offs)
|
(166
|
)
|
(282
|
)
|
(448
|
)
|
|||
Provision for credit losses
|
2,039
|
|
1,133
|
|
3,172
|
|
|||
Other
|
(1
|
)
|
|
(1
|
)
|
||||
June 30, 2020
|
$
|
3,380
|
|
$
|
2,548
|
|
$
|
5,928
|
|
Allowance for unfunded lending related commitments (b)
|
|
|
|
||||||
December 31, 2019
|
$
|
316
|
|
$
|
2
|
|
$
|
318
|
|
Adoption of ASU 2016-13 (a)
|
53
|
|
126
|
|
179
|
|
|||
January 1, 2020
|
369
|
|
128
|
|
497
|
|
|||
Provision for (recapture of) credit losses
|
179
|
|
(14
|
)
|
165
|
|
|||
June 30, 2020
|
$
|
548
|
|
$
|
114
|
|
$
|
662
|
|
Allowance for credit losses at June 30
|
$
|
3,928
|
|
$
|
2,662
|
|
$
|
6,590
|
|
(a)
|
Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020 and our transition from an incurred loss methodology for our reserves to an expected credit loss methodology.
|
(b)
|
See Note 9 Commitments for additional information about the underlying commitments related to this allowance.
|
•
|
Commercial reserves increased $2.1 billion attributable to the significantly adverse economic impact of the pandemic and its resulting effects on credit quality and loan growth.
|
•
|
Consumer reserves increased $.8 billion primarily reflecting the significantly adverse economic impact of the pandemic.
|
At or for the six months ended June 30, 2019
Dollars in millions |
Commercial
|
|
Consumer
|
|
Total
|
|
|||
Allowance for loan and lease losses
|
|
|
|
||||||
January 1, 2019
|
$
|
1,663
|
|
$
|
966
|
|
$
|
2,629
|
|
Charge-offs
|
(84
|
)
|
(358
|
)
|
(442
|
)
|
|||
Recoveries
|
40
|
|
124
|
|
164
|
|
|||
Net (charge-offs)
|
(44
|
)
|
(234
|
)
|
(278
|
)
|
|||
Provision for credit losses
|
187
|
|
182
|
|
369
|
|
|||
Net decrease in allowance for unfunded loan commitments and letters
of credit
|
(7
|
)
|
1
|
|
(6
|
)
|
|||
Other
|
|
|
7
|
|
7
|
|
|||
June 30, 2019
|
$
|
1,799
|
|
$
|
922
|
|
$
|
2,721
|
|
TDRs individually evaluated for impairment
|
$
|
33
|
|
$
|
123
|
|
$
|
156
|
|
Other loans individually evaluated for impairment
|
53
|
|
|
|
53
|
|
|||
Loans collectively evaluated for impairment
|
1,713
|
|
517
|
|
2,230
|
|
|||
Purchased impaired loans
|
|
|
282
|
|
282
|
|
|||
June 30, 2019
|
$
|
1,799
|
|
$
|
922
|
|
$
|
2,721
|
|
Loan portfolio
|
|
|
|
||||||
TDRs individually evaluated for impairment
|
$
|
396
|
|
$
|
1,381
|
|
$
|
1,777
|
|
Other loans individually evaluated for impairment
|
287
|
|
|
|
287
|
|
|||
Loans collectively evaluated for impairment
|
160,920
|
|
71,605
|
|
232,525
|
|
|||
Fair value option loans (a)
|
|
|
755
|
|
755
|
|
|||
Purchased impaired loans
|
|
|
1,871
|
|
1,871
|
|
|||
June 30, 2019
|
$
|
161,603
|
|
$
|
75,612
|
|
$
|
237,215
|
|
In millions
|
Residential
Mortgages |
|
|
Commercial
Mortgages (a) |
|
|
|||
Cash Flows - Three months ended June 30, 2020
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
2,195
|
|
|
|
$
|
1,334
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
100
|
|
|
|
$
|
10
|
|
|
Servicing fees (d)
|
$
|
81
|
|
|
|
$
|
31
|
|
|
Servicing advances recovered/(funded), net
|
$
|
7
|
|
|
|
$
|
(140
|
)
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
2,184
|
|
|
|
$
|
14
|
|
|
Cash Flows - Three months ended June 30, 2019
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
890
|
|
|
|
$
|
446
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
61
|
|
|
|
4
|
|
|
|
Servicing fees (d)
|
$
|
88
|
|
|
|
$
|
32
|
|
|
Servicing advances recovered/(funded), net
|
$
|
11
|
|
|
|
$
|
39
|
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
751
|
|
|
|
$
|
15
|
|
|
Cash Flows - Six months ended June 30, 2020
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
3,529
|
|
|
|
$
|
1,827
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
195
|
|
|
|
$
|
25
|
|
|
Servicing fees (d)
|
$
|
166
|
|
|
|
$
|
64
|
|
|
Servicing advances recovered/(funded), net
|
$
|
19
|
|
|
|
$
|
(128
|
)
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
3,545
|
|
|
|
$
|
51
|
|
|
Cash Flows - Six months ended June 30, 2019
|
|
|
|
|
|
||||
Sales of loans (b)
|
$
|
1,606
|
|
|
|
$
|
1,090
|
|
|
Repurchases of previously transferred loans (c)
|
$
|
154
|
|
|
|
$
|
4
|
|
|
Servicing fees (d)
|
$
|
174
|
|
|
|
$
|
63
|
|
|
Servicing advances recovered/(funded), net
|
$
|
28
|
|
|
|
$
|
16
|
|
|
Cash flows on mortgage-backed securities held (e)
|
$
|
1,259
|
|
|
|
$
|
29
|
|
|
(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 $22.4 billion, $17.8 billion, and $17.5 billion in residential mortgage-backed securities and $.9 billion, $.6 billion, and $.6 billion in commercial mortgage-backed securities at June 30, 2020, December 31, 2019 and June 30, 2019, respectively.
|
In millions
|
Residential Mortgages
|
|
|
|
Commercial Mortgages (a)
|
|
|
||
June 30, 2020
|
|
|
|
|
|
||||
Total principal balance
|
$
|
47,765
|
|
|
|
$
|
41,391
|
|
|
Delinquent loans (b)
|
$
|
433
|
|
|
|
$
|
100
|
|
|
December 31, 2019
|
|
|
|
|
|
||||
Total principal balance
|
$
|
49,323
|
|
|
|
$
|
42,414
|
|
|
Delinquent loans (b)
|
$
|
492
|
|
|
|
$
|
64
|
|
|
Three months ended June 30, 2020
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
2
|
|
|
|
|
|
||
Three months ended June 30, 2019
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
13
|
|
|
|
$
|
178
|
|
|
Six months ended June 30, 2020
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
10
|
|
|
|
$
|
99
|
|
|
Six months ended June 30, 2019
|
|
|
|
|
|
||||
Net charge-offs (c)
|
$
|
24
|
|
|
|
$
|
296
|
|
|
(a)
|
Represents information at the securitization level in which we have sold loans and we are the servicer for the securitization.
|
(b)
|
Serviced delinquent loans are 90 days or more past due or are in process of foreclosure.
|
(c)
|
Net charge-offs for Residential mortgages represent credit losses less recoveries distributed and as reported to investors during the period. Net charge-offs for Commercial mortgages represent credit losses less recoveries distributed and as reported by the trustee for commercial mortgage-backed securitizations. Realized losses for Agency securitizations are not reflected as we do not manage the underlying real estate upon foreclosure and, as such, do not have access to loss information.
|
In millions
|
PNC Risk of Loss (a)
|
|
|
|
Carrying Value of Assets
Owned by PNC |
|
|
|
|
Carrying Value of Liabilities
Owned by PNC |
|
|
|||
June 30, 2020
|
|
|
|
|
|
|
|
|
|
||||||
Mortgage-backed securitizations (b)
|
$
|
24,074
|
|
|
|
$
|
24,074
|
|
(c)
|
|
|
$
|
1
|
|
|
Tax credit investments and other
|
2,982
|
|
|
|
2,871
|
|
(d)
|
|
|
$
|
871
|
|
(e)
|
||
Total
|
$
|
27,056
|
|
|
|
$
|
26,945
|
|
|
|
|
$
|
872
|
|
|
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
|
45
|
|
16
|
|
|
22
|
|
14
|
|
|
||||
Purchases
|
23
|
|
51
|
|
|
61
|
|
65
|
|
|
||||
Changes in fair value due to:
|
|
|
|
|
|
|
||||||||
Time and payoffs (a)
|
(61
|
)
|
(75
|
)
|
|
(82
|
)
|
(77
|
)
|
|
||||
Other (b)
|
(166
|
)
|
(88
|
)
|
|
(419
|
)
|
(262
|
)
|
|
||||
June 30
|
$
|
490
|
|
$
|
630
|
|
|
$
|
577
|
|
$
|
997
|
|
|
Related unpaid principal balance at June 30
|
$
|
228,985
|
|
$
|
193,510
|
|
|
$
|
122,043
|
|
$
|
124,461
|
|
|
Servicing advances at June 30
|
$
|
285
|
|
$
|
204
|
|
|
$
|
92
|
|
$
|
128
|
|
|
(a)
|
Represents decrease in MSR value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period.
|
(b)
|
Represents MSR value changes resulting primarily from market-driven changes in interest rates.
|
Dollars in millions
|
June 30
2020 |
|
|
December 31
2019 |
|
|
||
Fair value
|
$
|
490
|
|
|
$
|
649
|
|
|
Weighted-average life (years)
|
4.3
|
|
|
4.1
|
|
|
||
Weighted-average constant prepayment rate
|
4.84
|
%
|
|
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
|
7.42
|
%
|
|
7.91
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
13
|
|
|
$
|
17
|
|
|
Decline in fair value from 20% adverse change
|
$
|
26
|
|
|
$
|
34
|
|
|
Dollars in millions
|
June 30
2020 |
|
|
December 31
2019 |
|
|
||
Fair value
|
$
|
577
|
|
|
$
|
995
|
|
|
Weighted-average life (years)
|
2.9
|
|
|
5.2
|
|
|
||
Weighted-average constant prepayment rate
|
27.56
|
%
|
|
13.51
|
%
|
|
||
Decline in fair value from 10% adverse change
|
$
|
41
|
|
|
$
|
46
|
|
|
Decline in fair value from 20% adverse change
|
$
|
79
|
|
|
$
|
89
|
|
|
Weighted-average option adjusted spread
|
912
|
|
bps
|
769
|
|
bps
|
||
Decline in fair value from 10% adverse change
|
$
|
14
|
|
|
$
|
27
|
|
|
Decline in fair value from 20% adverse change
|
$
|
27
|
|
|
$
|
52
|
|
|
|
Three months ended
June 30 |
Six months ended
June 30 |
|
||||||||||
In millions
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
||||
Product
|
|
|
|
|
|
||||||||
Sales-type leases and direct financing leases
|
$
|
70
|
|
$
|
77
|
|
$
|
141
|
|
$
|
151
|
|
|
Operating leases
|
25
|
|
30
|
|
52
|
|
61
|
|
|
||||
Lessor Income
|
$
|
95
|
|
$
|
107
|
|
$
|
193
|
|
$
|
212
|
|
|
In billions
|
|
|||
Less than 1 year
|
$
|
16.1
|
|
|
1 to 2 years
|
$
|
3.6
|
|
|
2 to 3 years
|
$
|
8.9
|
|
|
3 to 4 years
|
$
|
2.8
|
|
|
4 to 5 years
|
$
|
3.2
|
|
|
Over 5 years
|
$
|
12.4
|
|
|
|
Stated Rate
|
|
Maturity
|
|
Carrying Value
|
|
||||||
Dollars in millions
|
2020
|
|
2020
|
|
2020
|
|
2019
|
|
||||
Parent Company
|
|
|
|
|
|
|
|
|
||||
Senior debt
|
2.20%-4.38%
|
|
2020-2030
|
|
$
|
10,486
|
|
|
$
|
8,843
|
|
|
Subordinated debt
|
3.90%
|
|
2024
|
|
815
|
|
|
777
|
|
|
||
Junior subordinated debt
|
0.92%
|
|
2028
|
|
205
|
|
|
205
|
|
|
||
Subtotal
|
|
|
|
|
11,506
|
|
|
9,825
|
|
|
||
Bank
|
|
|
|
|
|
|
|
|
||||
FHLB (a)
|
0.43%-0.73%
|
|
2020-2021
|
|
8,500
|
|
|
16,341
|
|
|
||
Senior debt
|
0%-3.50%
|
|
2020-2043
|
|
17,219
|
|
|
20,167
|
|
|
||
Subordinated debt
|
2.70%-4.20%
|
|
2022-2029
|
|
5,479
|
|
|
5,152
|
|
|
||
Subtotal
|
|
|
|
|
31,198
|
|
|
41,660
|
|
|
||
Total
|
|
|
|
|
$
|
42,704
|
|
|
$
|
51,485
|
|
|
(a)
|
FHLB borrowings are generally collateralized by residential mortgage loans, other mortgage-related loans and investment securities.
|
In millions
|
June 30
2020 |
|
|
December 31
2019 |
|
|
||
Commitments to extend credit
|
|
|
|
|
||||
Total commercial lending
|
$
|
137,164
|
|
|
$
|
131,762
|
|
|
Home equity lines of credit
|
17,089
|
|
|
16,803
|
|
|
||
Credit card
|
32,253
|
|
|
30,862
|
|
|
||
Other
|
7,206
|
|
|
6,162
|
|
|
||
Total commitments to extend credit
|
193,712
|
|
|
185,589
|
|
|
||
Net outstanding standby letters of credit (a)
|
9,149
|
|
|
9,843
|
|
|
||
Reinsurance agreements (b)
|
92
|
|
|
1,393
|
|
|
||
Standby bond purchase agreements (c)
|
1,450
|
|
|
1,295
|
|
|
||
Other commitments (d)
|
1,123
|
|
|
1,498
|
|
|
||
Total commitments to extend credit and other commitments
|
$
|
205,526
|
|
|
$
|
199,618
|
|
|
(a)
|
Net outstanding standby letters of credit include $3.9 billion and $4.1 billion at June 30, 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 June 30, 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 $.5 billion and $.6 billion related to investments in qualified affordable housing projects at June 30, 2020 and December 31, 2019, respectively.
|
|
|
|
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 March 31, 2019 (a)
|
452
|
|
|
$
|
2,711
|
|
$
|
3,990
|
|
$
|
12,183
|
|
$
|
39,742
|
|
$
|
(5
|
)
|
$
|
(10,085
|
)
|
|
$
|
39
|
|
$
|
48,575
|
|
|
Net income
|
|
|
|
|
|
1,362
|
|
|
|
|
12
|
|
1,374
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
636
|
|
|
|
|
636
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(432
|
)
|
|
|
|
|
(432
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(55
|
)
|
|
|
|
|
(55
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Common stock activity
|
|
|
|
|
10
|
|
|
|
|
|
|
10
|
|
|
|||||||||||||||
Treasury stock activity
|
(5
|
)
|
|
|
|
(1
|
)
|
|
|
(781
|
)
|
|
|
(782
|
)
|
|
|||||||||||||
Other
|
|
|
|
|
65
|
|
|
|
|
|
(10
|
)
|
55
|
|
|
||||||||||||||
Balance at June 30, 2019 (a)
|
447
|
|
|
$
|
2,711
|
|
$
|
3,991
|
|
$
|
12,257
|
|
$
|
40,616
|
|
$
|
631
|
|
$
|
(10,866
|
)
|
|
$
|
41
|
|
$
|
49,381
|
|
|
Balance at March 31, 2020 (a)
|
424
|
|
|
$
|
2,712
|
|
$
|
3,994
|
|
$
|
12,294
|
|
$
|
41,885
|
|
$
|
2,518
|
|
$
|
(14,140
|
)
|
|
$
|
27
|
|
$
|
49,290
|
|
|
Net income
|
|
|
|
|
|
3,648
|
|
|
|
|
7
|
|
3,655
|
|
|
||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
551
|
|
|
|
|
551
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(491
|
)
|
|
|
|
|
(491
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(55
|
)
|
|
|
|
|
(55
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
|
|
|
|||||||||||||||
Common stock activity
|
|
|
|
|
11
|
|
|
|
|
|
|
11
|
|
|
|||||||||||||||
Treasury stock activity
|
1
|
|
|
|
|
2
|
|
|
|
12
|
|
|
|
14
|
|
|
|||||||||||||
Other
|
|
|
|
|
(18
|
)
|
|
|
|
|
(9
|
)
|
(27
|
)
|
|
||||||||||||||
Balance at June 30, 2020 (a)
|
425
|
|
|
$
|
2,712
|
|
$
|
3,995
|
|
$
|
12,289
|
|
$
|
44,986
|
|
$
|
3,069
|
|
$
|
(14,128
|
)
|
|
$
|
25
|
|
$
|
52,948
|
|
|
Six 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
|
|
|
|
|
|
2,623
|
|
|
|
|
22
|
|
2,645
|
|
|
||||||||||||||
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
1,356
|
|
|
|
|
1,356
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(868
|
)
|
|
|
|
|
(868
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(118
|
)
|
|
|
|
|
(118
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Common stock activity
|
|
|
|
|
10
|
|
|
|
|
|
|
10
|
|
|
|||||||||||||||
Treasury stock activity
|
(10
|
)
|
|
|
|
9
|
|
|
|
(1,412
|
)
|
|
|
(1,403
|
)
|
|
|||||||||||||
Other
|
|
|
|
3
|
|
(53
|
)
|
|
|
|
|
(23
|
)
|
(73
|
)
|
|
|||||||||||||
Balance at June 30, 2019 (a)
|
447
|
|
|
$
|
2,711
|
|
$
|
3,991
|
|
$
|
12,257
|
|
$
|
40,616
|
|
$
|
631
|
|
$
|
(10,866
|
)
|
|
$
|
41
|
|
$
|
49,381
|
|
|
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
|
|
|
|
|
|
4,556
|
|
|
|
|
14
|
|
4,570
|
|
|
||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
2,270
|
|
|
|
|
2,270
|
|
|
|||||||||||||||
Cash dividends declared - Common
|
|
|
|
|
|
(994
|
)
|
|
|
|
|
(994
|
)
|
|
|||||||||||||||
Cash dividends declared - Preferred
|
|
|
|
|
|
(118
|
)
|
|
|
|
|
(118
|
)
|
|
|||||||||||||||
Preferred stock discount accretion
|
|
|
|
2
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
||||||||||||||
Common stock activity
|
|
|
|
|
11
|
|
|
|
|
|
|
11
|
|
|
|||||||||||||||
Treasury stock activity
|
(8
|
)
|
|
|
|
51
|
|
|
|
(1,347
|
)
|
|
|
(1,296
|
)
|
|
|||||||||||||
Other
|
|
|
|
|
(149
|
)
|
|
|
|
|
(18
|
)
|
(167
|
)
|
|
||||||||||||||
Balance at June 30, 2020 (a)
|
425
|
|
|
$
|
2,712
|
|
$
|
3,995
|
|
$
|
12,289
|
|
$
|
44,986
|
|
$
|
3,069
|
|
$
|
(14,128
|
)
|
|
$
|
25
|
|
$
|
52,948
|
|
|
(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
June 30 |
|
|
Six months ended
June 30 |
|
||||||||||
In millions
|
2020
|
|
2019
|
|
|
|
2020
|
|
2019
|
|
|
||||
Net unrealized gains (losses) on securities without an allowance for credit losses
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on securities
|
$
|
661
|
|
|
|
|
$
|
2,330
|
|
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
1
|
|
|
|
|
2
|
|
|
|
||||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
40
|
|
|
|
|
221
|
|
|
|
||||||
Net increase (decrease), pre-tax
|
620
|
|
|
|
|
2,107
|
|
|
|
||||||
Effect of income taxes
|
(143
|
)
|
|
|
|
(484
|
)
|
|
|
||||||
Net increase (decrease), after-tax
|
477
|
|
|
|
|
1,623
|
|
|
|
||||||
Net unrealized gains (losses) on securities with an allowance for credit losses
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on securities
|
(82
|
)
|
|
|
|
(89
|
)
|
|
|
||||||
Net increase (decrease), pre-tax
|
(82
|
)
|
|
|
|
(89
|
)
|
|
|
||||||
Effect of income taxes
|
18
|
|
|
|
|
20
|
|
|
|
||||||
Net increase (decrease), after-tax
|
(64
|
)
|
|
|
|
(69
|
)
|
|
|
||||||
Net unrealized gains (losses) on non-OTTI securities
|
|
|
|
|
|
|
|
||||||||
Increase in net unrealized gains (losses) on non-OTTI securities
|
|
$
|
713
|
|
|
|
|
$
|
1,353
|
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
|
3
|
|
|
|
|
6
|
|
|
||||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
|
16
|
|
|
|
|
14
|
|
|
||||||
Net increase (decrease), pre-tax
|
|
694
|
|
|
|
|
1,333
|
|
|
||||||
Effect of income taxes
|
|
(159
|
)
|
|
|
|
(306
|
)
|
|
||||||
Net increase (decrease), after-tax
|
|
535
|
|
|
|
|
1,027
|
|
|
||||||
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
|
115
|
|
246
|
|
|
|
945
|
|
354
|
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to loan interest income
|
102
|
|
(12
|
)
|
|
|
144
|
|
(20
|
)
|
|
||||
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
|
1
|
|
1
|
|
|
|
3
|
|
2
|
|
|
||||
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
|
—
|
|
3
|
|
|
|
1
|
|
18
|
|
|
||||
Net increase (decrease), pre-tax
|
12
|
|
254
|
|
|
|
797
|
|
354
|
|
|
||||
Effect of income taxes
|
(3
|
)
|
(58
|
)
|
|
|
(183
|
)
|
(81
|
)
|
|
||||
Net increase (decrease), after-tax
|
9
|
|
196
|
|
|
|
614
|
|
273
|
|
|
||||
Pension and other postretirement benefit plan adjustments
|
|
|
|
|
|
|
|
||||||||
Net pension and other postretirement benefit activity
|
(20
|
)
|
(89
|
)
|
|
|
(10
|
)
|
54
|
|
|
||||
Amortization of actuarial loss (gain) reclassified to other noninterest expense
|
2
|
|
4
|
|
|
|
3
|
|
5
|
|
|
||||
Amortization of prior service cost (credit) reclassified to other noninterest expense
|
1
|
|
1
|
|
|
|
2
|
|
2
|
|
|
||||
Net increase (decrease), pre-tax
|
(17
|
)
|
(84
|
)
|
|
|
(5
|
)
|
61
|
|
|
||||
Effect of income taxes
|
4
|
|
19
|
|
|
|
1
|
|
(14
|
)
|
|
||||
Net increase (decrease), after-tax
|
(13
|
)
|
(65
|
)
|
|
|
(4
|
)
|
47
|
|
|
||||
Other
|
|
|
|
|
|
|
|
||||||||
Net investment hedge derivatives
|
5
|
|
32
|
|
|
|
80
|
|
14
|
|
|
||||
Foreign currency translation adjustments and other
|
(3
|
)
|
(27
|
)
|
|
|
(70
|
)
|
(4
|
)
|
|
||||
Net increase (decrease), pre-tax
|
2
|
|
5
|
|
|
|
10
|
|
10
|
|
|
||||
Effect of income taxes
|
(1
|
)
|
(7
|
)
|
|
|
(19
|
)
|
(4
|
)
|
|
||||
Net increase (decrease), after-tax
|
1
|
|
(2
|
)
|
|
|
(9
|
)
|
6
|
|
|
||||
Total other comprehensive income (loss) from continuing operations, pre-tax
|
535
|
|
869
|
|
|
|
2,820
|
|
1,767
|
|
|
||||
Total other comprehensive income (loss) from continuing operations, tax effect
|
(125
|
)
|
(205
|
)
|
|
|
(665
|
)
|
(407
|
)
|
|
||||
Total other comprehensive income (loss) from continuing operations, after-tax
|
$
|
410
|
|
$
|
664
|
|
|
|
$
|
2,155
|
|
$
|
1,360
|
|
|
Total other comprehensive income (loss) from discontinued operations, after-tax
|
141
|
|
(28
|
)
|
|
|
115
|
|
(4
|
)
|
|
||||
Total other comprehensive income (loss), after-tax
|
$
|
551
|
|
$
|
636
|
|
|
|
$
|
2,270
|
|
$
|
1,356
|
|
|
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
|
|
|
Accumulated other Comprehensive Income from Continuing Operations
|
|
|
Accumulated other Comprehensive Income from Discontinued Operations
|
|
Total
|
|
|
||||||||
Three months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at March 31, 2019
|
$
|
208
|
|
|
$
|
211
|
|
|
$
|
124
|
|
|
$
|
(418
|
)
|
|
$
|
(35
|
)
|
|
$
|
90
|
|
|
$
|
(95
|
)
|
$
|
(5
|
)
|
|
Net activity
|
535
|
|
|
|
|
|
196
|
|
|
(65
|
)
|
|
(2
|
)
|
|
664
|
|
|
(28
|
)
|
636
|
|
|
||||||||
Balance at June 30, 2019
|
$
|
743
|
|
|
$
|
211
|
|
|
$
|
320
|
|
|
$
|
(483
|
)
|
|
$
|
(37
|
)
|
|
$
|
754
|
|
|
$
|
(123
|
)
|
$
|
631
|
|
|
Six months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at December 31, 2018
|
$
|
(284
|
)
|
|
$
|
204
|
|
|
$
|
47
|
|
|
$
|
(530
|
)
|
|
$
|
(43
|
)
|
|
$
|
(606
|
)
|
|
$
|
(119
|
)
|
$
|
(725
|
)
|
|
Net activity
|
1,027
|
|
|
7
|
|
|
273
|
|
|
47
|
|
|
6
|
|
|
1,360
|
|
|
(4
|
)
|
1,356
|
|
|
||||||||
Balance at June 30, 2019
|
$
|
743
|
|
|
$
|
211
|
|
|
$
|
320
|
|
|
$
|
(483
|
)
|
|
$
|
(37
|
)
|
|
$
|
754
|
|
|
$
|
(123
|
)
|
$
|
631
|
|
|
In millions, after-tax
|
Net unrealized gains (losses) on securities without an Allowance
|
|
|
Net unrealized gains (losses) on securities with an Allowance
|
|
|
Net unrealized gains (losses) on cash flow hedge derivatives
|
|
|
Pension and other postretirement benefit plan adjustments
|
|
|
Other
|
|
|
Accumulated other Comprehensive Income from Continuing Operations
|
|
|
Accumulated other Comprehensive Income from Discontinued Operations
|
|
Total
|
|
|
||||||||
Three months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at March 31, 2020
|
$
|
2,213
|
|
|
$
|
(5
|
)
|
|
$
|
881
|
|
|
$
|
(399
|
)
|
|
$
|
(31
|
)
|
|
$
|
2,659
|
|
|
$
|
(141
|
)
|
$
|
2,518
|
|
|
Net activity
|
477
|
|
|
(64
|
)
|
|
9
|
|
|
(13
|
)
|
|
1
|
|
|
410
|
|
|
141
|
|
551
|
|
|
||||||||
Balance at June 30, 2020
|
$
|
2,690
|
|
|
$
|
(69
|
)
|
|
$
|
890
|
|
|
$
|
(412
|
)
|
|
$
|
(30
|
)
|
|
$
|
3,069
|
|
|
|
|
$
|
3,069
|
|
|
|
Six months ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Balance at December 31, 2019
|
$
|
844
|
|
|
$
|
223
|
|
|
$
|
276
|
|
|
$
|
(408
|
)
|
|
$
|
(21
|
)
|
|
$
|
914
|
|
|
$
|
(115
|
)
|
$
|
799
|
|
|
Cumulative effect of ASU 2016-03 adoption (a)
|
223
|
|
|
(223
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance at January 1, 2020
|
$
|
1,067
|
|
|
|
|
$
|
276
|
|
|
$
|
(408
|
)
|
|
$
|
(21
|
)
|
|
$
|
914
|
|
|
$
|
(115
|
)
|
$
|
799
|
|
|
||
Net activity
|
1,623
|
|
|
$
|
(69
|
)
|
|
614
|
|
|
(4
|
)
|
|
(9
|
)
|
|
2,155
|
|
|
115
|
|
2,270
|
|
|
|||||||
Balance at June 30, 2020
|
$
|
2,690
|
|
|
$
|
(69
|
)
|
|
$
|
890
|
|
|
$
|
(412
|
)
|
|
$
|
(30
|
)
|
|
$
|
3,069
|
|
|
|
|
$
|
3,069
|
|
|
(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 June 30
|
Six months ended June 30
|
||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||
Common Stock
|
$
|
1.15
|
|
$
|
.95
|
|
$
|
2.30
|
|
$
|
1.90
|
|
Preferred Stock
|
|
|
|
|
||||||||
Series B
|
$
|
.45
|
|
$
|
.45
|
|
$
|
.90
|
|
$
|
.90
|
|
Series O
|
|
|
$
|
3,375
|
|
$
|
3,375
|
|
||||
Series P
|
$
|
1,532
|
|
$
|
1,532
|
|
$
|
3,063
|
|
$
|
3,063
|
|
Series Q
|
$
|
1,344
|
|
$
|
1,344
|
|
$
|
2,688
|
|
$
|
2,688
|
|
Series R
|
$
|
2,425
|
|
$
|
2,425
|
|
$
|
2,425
|
|
$
|
2,425
|
|
Series S
|
$
|
2,500
|
|
$
|
2,500
|
|
$
|
2,500
|
|
$
|
2,500
|
|
|
|
Three months ended
June 30 |
|
Six months ended
June 30 |
|
||||||||||||
In millions, except per share data
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
||||
Basic
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations
|
|
$
|
(744
|
)
|
|
$
|
1,185
|
|
|
$
|
15
|
|
|
$
|
2,267
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling interests
|
|
7
|
|
|
12
|
|
|
14
|
|
|
22
|
|
|
||||
Preferred stock dividends
|
|
55
|
|
|
55
|
|
|
118
|
|
|
118
|
|
|
||||
Preferred stock discount accretion and redemptions
|
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
||||
Net income (loss) from continuing operations attributable to common shareholders
|
|
(807
|
)
|
|
1,117
|
|
|
(119
|
)
|
|
2,125
|
|
|
||||
Less: Dividends and undistributed earnings allocated to nonvested restricted shares
|
|
1
|
|
|
4
|
|
|
4
|
|
|
8
|
|
|
||||
Net income (loss) from continuing operations attributable to basic common shareholders
|
|
$
|
(808
|
)
|
|
$
|
1,113
|
|
|
$
|
(123
|
)
|
|
$
|
2,117
|
|
|
Net income from discontinued operations attributable to common shareholders
|
|
4,399
|
|
|
189
|
|
|
4,555
|
|
|
378
|
|
|
||||
Less: Undistributed earnings allocated to nonvested restricted shares
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
22
|
|
|
$
|
1
|
|
|
Net income from discontinued operations attributable to basic common shareholders
|
|
4,378
|
|
|
189
|
|
|
4,533
|
|
|
377
|
|
|
||||
Basic weighted-average common shares outstanding
|
|
426
|
|
|
451
|
|
|
428
|
|
|
453
|
|
|
||||
Basic earnings (loss) per common share from continuing operations (a)
|
|
$
|
(1.90
|
)
|
|
$
|
2.47
|
|
|
$
|
(.29
|
)
|
|
$
|
4.68
|
|
|
Basic earnings per common share from discontinued operations (a)
|
|
$
|
10.28
|
|
|
$
|
.42
|
|
|
$
|
10.60
|
|
|
$
|
.83
|
|
|
Basic earnings per common share (b)
|
|
$
|
8.40
|
|
|
$
|
2.89
|
|
|
$
|
10.33
|
|
|
$
|
5.51
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to diluted common shareholders
|
|
$
|
(808
|
)
|
|
$
|
1,113
|
|
|
$
|
(123
|
)
|
|
$
|
2,117
|
|
|
Net income from discontinued operations attributable to basic common shareholders
|
|
4,378
|
|
|
189
|
|
|
4,533
|
|
|
377
|
|
|
||||
Less: Impact of earnings per share dilution from discontinued operations
|
|
1
|
|
|
2
|
|
|
2
|
|
|
5
|
|
|
||||
Net income from discontinued operations attributable to diluted common shareholders
|
|
$
|
4,377
|
|
|
$
|
187
|
|
|
$
|
4,531
|
|
|
$
|
372
|
|
|
Basic weighted-average common shares outstanding
|
|
426
|
|
|
451
|
|
|
428
|
|
|
453
|
|
|
||||
Dilutive potential common shares (c)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|
||||
Diluted weighted-average common shares outstanding
|
|
426
|
|
|
452
|
|
|
428
|
|
|
454
|
|
|
||||
Diluted earnings (loss) per common share from continuing operations (a)
|
|
$
|
(1.90
|
)
|
|
$
|
2.47
|
|
|
$
|
(.29
|
)
|
|
$
|
4.67
|
|
|
Diluted earnings per common share from discontinued operations (a)
|
|
$
|
10.28
|
|
|
$
|
.41
|
|
|
$
|
10.59
|
|
|
$
|
.82
|
|
|
Diluted earnings per common share (b)
|
|
$
|
8.40
|
|
|
$
|
2.88
|
|
|
$
|
10.32
|
|
|
$
|
5.49
|
|
|
(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).
|
(b)
|
See Note 1 Accounting Policies in the Notes to Consolidated Financial Statements of this Report for additional information on our policy for not allocating losses to participating securities.
|
(c)
|
See Note 1 Accounting Policies in the Notes to Consolidated Financial Statements of this Report for additional information on our policy for not including potential dilutive shares in the diluted EPS calculations when a loss from continuing operations exists.
|
|
June 30, 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
|
|
|
$
|
743
|
|
|
$
|
88
|
|
|
$
|
831
|
|
|
|
|
|
$
|
817
|
|
|
$
|
2
|
|
|
$
|
819
|
|
|
||||
Commercial mortgage loans held for sale
|
|
|
344
|
|
|
60
|
|
|
404
|
|
|
|
|
|
182
|
|
|
64
|
|
|
246
|
|
|
||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
U.S. Treasury and government agencies
|
$
|
19,907
|
|
|
281
|
|
|
|
|
20,188
|
|
|
|
$
|
16,236
|
|
|
280
|
|
|
|
|
16,516
|
|
|
||||||||
Residential mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency
|
|
|
57,480
|
|
|
|
|
57,480
|
|
|
|
|
|
36,321
|
|
|
|
|
36,321
|
|
|
||||||||||||
Non-agency
|
|
|
191
|
|
|
1,491
|
|
|
1,682
|
|
|
|
|
|
73
|
|
|
1,741
|
|
|
1,814
|
|
|
||||||||||
Commercial mortgage-backed
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Agency
|
|
|
3,140
|
|
|
|
|
3,140
|
|
|
|
|
|
3,118
|
|
|
|
|
3,118
|
|
|
||||||||||||
Non-agency
|
|
|
4,020
|
|
|
19
|
|
|
4,039
|
|
|
|
|
|
3,372
|
|
|
|
|
3,372
|
|
|
|||||||||||
Asset-backed
|
|
|
5,158
|
|
|
210
|
|
|
5,368
|
|
|
|
|
|
4,874
|
|
|
240
|
|
|
5,114
|
|
|
||||||||||
Other
|
|
|
5,083
|
|
|
72
|
|
|
5,155
|
|
|
|
|
|
2,834
|
|
|
74
|
|
|
2,908
|
|
|
||||||||||
Total securities available for sale
|
19,907
|
|
|
75,353
|
|
|
1,792
|
|
|
97,052
|
|
|
|
16,236
|
|
|
50,872
|
|
|
2,055
|
|
|
69,163
|
|
|
||||||||
Loans
|
|
|
424
|
|
|
607
|
|
|
1,031
|
|
|
|
|
|
442
|
|
|
300
|
|
|
742
|
|
|
||||||||||
Equity investments (a)
|
821
|
|
|
|
|
1,183
|
|
|
2,280
|
|
|
|
855
|
|
|
|
|
1,276
|
|
|
2,421
|
|
|
||||||||||
Residential mortgage servicing rights
|
|
|
|
|
577
|
|
|
577
|
|
|
|
|
|
|
|
995
|
|
|
995
|
|
|
||||||||||||
Commercial mortgage servicing rights
|
|
|
|
|
490
|
|
|
490
|
|
|
|
|
|
|
|
649
|
|
|
649
|
|
|
||||||||||||
Trading securities (b)
|
1,815
|
|
|
1,261
|
|
|
|
|
3,076
|
|
|
|
433
|
|
|
2,787
|
|
|
|
|
3,220
|
|
|
||||||||||
Financial derivatives (b) (c)
|
|
|
8,038
|
|
|
141
|
|
|
8,179
|
|
|
|
|
|
3,448
|
|
|
54
|
|
|
3,502
|
|
|
||||||||||
Other assets
|
328
|
|
|
63
|
|
|
|
|
391
|
|
|
|
339
|
|
|
131
|
|
|
|
|
470
|
|
|
||||||||||
Total assets (d)
|
$
|
22,871
|
|
|
$
|
86,226
|
|
|
$
|
4,938
|
|
|
$
|
114,311
|
|
|
|
$
|
17,863
|
|
|
$
|
58,679
|
|
|
$
|
5,395
|
|
|
$
|
82,227
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Other borrowed funds
|
$
|
1,961
|
|
|
$
|
38
|
|
|
$
|
2
|
|
|
$
|
2,001
|
|
|
|
$
|
385
|
|
|
$
|
126
|
|
|
$
|
7
|
|
|
$
|
518
|
|
|
Financial derivatives (c) (e)
|
4
|
|
|
3,016
|
|
|
209
|
|
|
3,229
|
|
|
|
|
|
1,819
|
|
|
200
|
|
|
2,019
|
|
|
|||||||||
Other liabilities
|
|
|
|
|
85
|
|
|
85
|
|
|
|
|
|
|
|
137
|
|
|
137
|
|
|
||||||||||||
Total liabilities (f)
|
$
|
1,965
|
|
|
$
|
3,054
|
|
|
$
|
296
|
|
|
$
|
5,315
|
|
|
|
$
|
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 June 30, 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 13 Financial Derivatives for additional information related to derivative offsetting.
|
(d)
|
Total assets at fair value as a percentage of total consolidated assets was 25% and 20% as of June 30, 2020 and December 31, 2019, respectively. Level 3 assets as a percentage of total assets at fair value was 4% and 7% as of June 30, 2020 and December 31, 2019, respectively. Level 3 assets as a percentage of total consolidated assets was 1% at both June 30, 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 June 30, 2020 and December 31, 2019. Level 3 liabilities as a percentage of total liabilities at fair value was 6% and 13% as of June 30, 2020 and December 31, 2019, respectively. Level 3 liabilities as a percentage of total consolidated liabilities was less than 1% at both June 30, 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 June 30, 2020 (a) (c) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair Value Mar. 31, 2020
|
|
Included in
Earnings |
|
Included
in Other comprehensive income (b) |
|
Purchases
|
|
Sales
|
|
Issuances
|
|
Settlements
|
|
|
Transfers
into Level 3 |
|
Transfers
out of Level 3 |
|
|
Fair
Value June 30, 2020 |
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
4
|
|
|
|
|
$
|
5
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
83
|
|
|
|
$
|
88
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
60
|
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
||||||||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
1,442
|
|
$
|
12
|
|
|
$
|
123
|
|
|
|
|
(86
|
)
|
|
|
|
|
1,491
|
|
|
|
|||||||||||||||
Commercial mortgage-
backed non-agency |
|
|
|
|
|
|
|
|
|
19
|
|
|
|
19
|
|
|
|
||||||||||||||||||||
Asset-backed
|
202
|
|
2
|
|
|
16
|
|
|
|
|
(10
|
)
|
|
|
|
|
210
|
|
|
|
|||||||||||||||||
Other
|
73
|
|
|
|
2
|
|
|
|
|
(3
|
)
|
|
|
|
|
72
|
|
|
|
||||||||||||||||||
Total securities
available for sale |
1,717
|
|
14
|
|
|
141
|
|
|
|
|
|
|
|
(99
|
)
|
|
19
|
|
|
|
|
1,792
|
|
|
|
||||||||||||
Loans
|
655
|
|
2
|
|
|
|
55
|
|
(5
|
)
|
|
(22
|
)
|
|
|
(78
|
)
|
(e)
|
607
|
|
$
|
2
|
|
|
|||||||||||||
Equity investments
|
1,220
|
|
(62
|
)
|
|
|
42
|
|
(17
|
)
|
|
|
|
|
|
|
1,183
|
|
(62
|
)
|
|
||||||||||||||||
Residential mortgage
servicing rights |
605
|
|
(40
|
)
|
|
|
43
|
|
|
$
|
12
|
|
(43
|
)
|
|
|
|
|
577
|
|
(41
|
)
|
|
||||||||||||||
Commercial mortgage
servicing rights |
477
|
|
1
|
|
|
|
4
|
|
|
34
|
|
(26
|
)
|
|
|
|
|
490
|
|
1
|
|
|
|||||||||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Financial derivatives
|
135
|
|
50
|
|
|
|
4
|
|
|
|
(48
|
)
|
|
|
|
|
141
|
|
84
|
|
|
||||||||||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total assets
|
$
|
4,873
|
|
$
|
(35
|
)
|
|
$
|
141
|
|
$
|
153
|
|
$
|
(23
|
)
|
$
|
46
|
|
$
|
(241
|
)
|
|
$
|
102
|
|
$
|
(78
|
)
|
|
$
|
4,938
|
|
$
|
(16
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
5
|
|
|
|
|
|
|
$
|
13
|
|
$
|
(16
|
)
|
|
|
|
|
$
|
2
|
|
|
|
||||||||||||||
Financial derivatives
|
185
|
|
$
|
28
|
|
|
|
|
$
|
1
|
|
|
(5
|
)
|
|
|
|
|
209
|
|
$
|
27
|
|
|
|||||||||||||
Other liabilities
|
72
|
|
4
|
|
|
|
|
|
26
|
|
(19
|
)
|
|
|
$
|
2
|
|
|
85
|
|
(2
|
)
|
|
||||||||||||||
Total liabilities
|
$
|
262
|
|
$
|
32
|
|
|
|
|
|
$
|
1
|
|
$
|
39
|
|
$
|
(40
|
)
|
|
|
|
$
|
2
|
|
|
$
|
296
|
|
$
|
25
|
|
|
||||
Net gains (losses)
|
|
$
|
(67
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
|
$
|
(41
|
)
|
(g)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized gains/losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 2019
(a) (c) |
|||||||||||||||||||||||||
Level 3 Instruments Only
In millions |
Fair Value Mar. 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 June 30, 2019
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
1
|
|
|
|
|
$
|
1
|
|
$
|
(2
|
)
|
(e)
|
$
|
2
|
|
|
|
||||||||||||
Commercial mortgage
loans held for sale |
73
|
|
$
|
1
|
|
|
|
|
|
|
$
|
(1
|
)
|
|
|
|
73
|
|
$
|
1
|
|
|
||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
2,042
|
|
18
|
|
|
$
|
19
|
|
|
|
|
(103
|
)
|
|
|
|
1,976
|
|
|
|
||||||||||||||||
Asset-backed
|
266
|
|
2
|
|
|
4
|
|
|
|
|
(11
|
)
|
|
|
|
261
|
|
|
|
|||||||||||||||||
Other
|
85
|
|
|
|
(1
|
)
|
2
|
|
$
|
(3
|
)
|
|
(3
|
)
|
|
|
|
80
|
|
|
|
|||||||||||||||
Total securities
available for sale |
2,393
|
|
20
|
|
|
22
|
|
2
|
|
(3
|
)
|
|
(117
|
)
|
|
|
|
2,317
|
|
|
|
|||||||||||||||
Loans
|
272
|
|
2
|
|
|
|
13
|
|
(8
|
)
|
$
|
(1
|
)
|
(11
|
)
|
1
|
|
(9
|
)
|
(e)
|
259
|
|
1
|
|
|
|||||||||||
Equity investments
|
1,217
|
|
4
|
|
|
|
150
|
|
(48
|
)
|
|
|
|
|
|
1,323
|
|
3
|
|
|
||||||||||||||||
Residential mortgage
servicing rights |
1,131
|
|
(156
|
)
|
|
|
59
|
|
|
7
|
|
(44
|
)
|
|
|
|
997
|
|
(156
|
)
|
|
|||||||||||||||
Commercial mortgage
servicing rights |
681
|
|
(55
|
)
|
|
|
32
|
|
|
9
|
|
(37
|
)
|
|
|
|
630
|
|
(55
|
)
|
|
|||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
56
|
|
48
|
|
|
|
(2
|
)
|
|
|
(16
|
)
|
|
|
|
86
|
|
45
|
|
|
||||||||||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total assets
|
$
|
5,827
|
|
$
|
(136
|
)
|
|
$
|
22
|
|
$
|
255
|
|
$
|
(59
|
)
|
$
|
15
|
|
$
|
(228
|
)
|
$
|
2
|
|
$
|
(11
|
)
|
|
$
|
5,687
|
|
$
|
(161
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
6
|
|
|
|
|
|
|
$
|
12
|
|
$
|
(13
|
)
|
|
|
|
$
|
5
|
|
|
|
||||||||||||||
Financial derivatives
|
230
|
|
$
|
20
|
|
|
|
|
$
|
(1
|
)
|
|
(28
|
)
|
|
|
|
221
|
|
$
|
19
|
|
|
|||||||||||||
Other liabilities
|
62
|
|
11
|
|
|
|
|
2
|
|
51
|
|
(48
|
)
|
|
|
|
78
|
|
3
|
|
|
|||||||||||||||
Total liabilities
|
$
|
298
|
|
$
|
31
|
|
|
|
|
$
|
1
|
|
$
|
63
|
|
$
|
(89
|
)
|
|
|
|
$
|
304
|
|
$
|
22
|
|
|
||||||||
Net gains (losses)
|
|
$
|
(167
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
$
|
(183
|
)
|
(g)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
|
Unrealized gains / losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 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 June 30, 2020
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
7
|
|
$
|
(2
|
)
|
|
$
|
(3
|
)
|
|
$
|
87
|
|
$
|
(3
|
)
|
(e)
|
$
|
88
|
|
|
|
||||||||
Commercial mortgage
loans held for sale |
64
|
|
$
|
(1
|
)
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
60
|
|
$
|
(1
|
)
|
|
|||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
1,741
|
|
28
|
|
|
$
|
(99
|
)
|
|
|
|
(179
|
)
|
|
|
|
|
1,491
|
|
|
|
||||||||||||||||
Commercial mortgage-
backed non-agency |
|
|
|
|
|
|
|
|
|
19
|
|
|
|
19
|
|
|
|
||||||||||||||||||||
Asset-backed
|
240
|
|
4
|
|
|
(13
|
)
|
|
|
|
(21
|
)
|
|
|
|
|
210
|
|
|
|
|||||||||||||||||
Other
|
74
|
|
|
|
(3
|
)
|
4
|
|
|
|
(3
|
)
|
|
|
|
|
72
|
|
|
|
|||||||||||||||||
Total securities
available for sale |
2,055
|
|
32
|
|
|
(115
|
)
|
4
|
|
|
|
(203
|
)
|
|
19
|
|
|
|
1,792
|
|
|
|
|||||||||||||||
Loans
|
300
|
|
13
|
|
|
|
71
|
|
(31
|
)
|
|
340
|
|
(d)
|
|
(86
|
)
|
(e)
|
607
|
|
13
|
|
|
||||||||||||||
Equity investments
|
1,276
|
|
(131
|
)
|
|
|
113
|
|
(75
|
)
|
|
|
|
|
|
|
1,183
|
|
(125
|
)
|
|
||||||||||||||||
Residential mortgage
servicing rights |
995
|
|
(419
|
)
|
|
|
61
|
|
|
$
|
22
|
|
(82
|
)
|
|
|
|
|
577
|
|
(420
|
)
|
|
||||||||||||||
Commercial mortgage
servicing rights |
649
|
|
(166
|
)
|
|
|
23
|
|
|
45
|
|
(61
|
)
|
|
|
|
|
490
|
|
(166
|
)
|
|
|||||||||||||||
Trading securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Financial derivatives
|
54
|
|
151
|
|
|
|
6
|
|
|
|
(70
|
)
|
|
|
|
|
141
|
|
158
|
|
|
||||||||||||||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Total assets
|
$
|
5,395
|
|
$
|
(521
|
)
|
|
$
|
(115
|
)
|
$
|
285
|
|
$
|
(108
|
)
|
$
|
67
|
|
$
|
(82
|
)
|
|
$
|
106
|
|
$
|
(89
|
)
|
|
$
|
4,938
|
|
$
|
(541
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
7
|
|
|
|
|
|
|
$
|
25
|
|
$
|
(30
|
)
|
|
|
|
|
$
|
2
|
|
|
|
||||||||||||||
Financial derivatives
|
200
|
|
$
|
36
|
|
|
|
|
$
|
2
|
|
|
(29
|
)
|
|
|
|
|
209
|
|
$
|
37
|
|
|
|||||||||||||
Other liabilities
|
137
|
|
6
|
|
|
|
|
|
37
|
|
(97
|
)
|
|
$
|
2
|
|
|
|
85
|
|
(8
|
)
|
|
||||||||||||||
Total liabilities
|
$
|
344
|
|
$
|
42
|
|
|
|
|
$
|
2
|
|
$
|
62
|
|
$
|
(156
|
)
|
|
$
|
2
|
|
|
|
$
|
296
|
|
$
|
29
|
|
|
||||||
Net gains (losses)
|
|
$
|
(563
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
|
$
|
(570
|
)
|
(g)
|
|
|
Total realized / unrealized
gains or losses for the period (a) |
|
|
|
|
|
|
|
|
Unrealized gains/losses on assets and liabilities held on Consolidated Balance Sheet at June 30, 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 June 30, 2019
|
|
|||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage loans
held for sale |
$
|
2
|
|
|
|
|
$
|
2
|
|
$
|
(1
|
)
|
|
|
$
|
4
|
|
$
|
(5
|
)
|
(e)
|
$
|
2
|
|
|
|
||||||||||
Commercial mortgage
loans held for sale |
87
|
|
$
|
2
|
|
|
|
|
|
|
$
|
(16
|
)
|
|
|
|
73
|
|
$
|
2
|
|
|
||||||||||||||
Securities available for sale
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Residential mortgage-
backed non-agency |
2,128
|
|
36
|
|
|
$
|
21
|
|
|
|
|
(209
|
)
|
|
|
|
1,976
|
|
|
|
||||||||||||||||
Asset-backed
|
274
|
|
2
|
|
|
6
|
|
|
|
|
(21
|
)
|
|
|
|
261
|
|
|
|
|||||||||||||||||
Other
|
84
|
|
|
|
(1
|
)
|
3
|
|
(3
|
)
|
|
(3
|
)
|
|
|
|
80
|
|
|
|
||||||||||||||||
Total securities
available for sale |
2,486
|
|
38
|
|
|
26
|
|
3
|
|
(3
|
)
|
|
(233
|
)
|
|
|
|
2,317
|
|
|
|
|||||||||||||||
Loans
|
272
|
|
5
|
|
|
|
33
|
|
(11
|
)
|
$
|
(1
|
)
|
(25
|
)
|
3
|
|
(17
|
)
|
(e)
|
259
|
|
2
|
|
|
|||||||||||
Equity investments
|
1,255
|
|
56
|
|
|
|
195
|
|
(183
|
)
|
|
|
|
|
|
1,323
|
|
3
|
|
|
||||||||||||||||
Residential mortgage
servicing rights |
1,257
|
|
(262
|
)
|
|
|
65
|
|
|
14
|
|
(77
|
)
|
|
|
|
997
|
|
(261
|
)
|
|
|||||||||||||||
Commercial mortgage
servicing rights |
726
|
|
(88
|
)
|
|
|
51
|
|
|
16
|
|
(75
|
)
|
|
|
|
630
|
|
(88
|
)
|
|
|||||||||||||||
Trading securities
|
2
|
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
|
||||||||||||||||||||
Financial derivatives
|
25
|
|
87
|
|
|
|
|
|
|
(26
|
)
|
|
|
|
86
|
|
(13
|
)
|
|
|||||||||||||||||
Other assets
|
45
|
|
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
|
||||||||||||||||||||
Total assets
|
$
|
6,157
|
|
$
|
(162
|
)
|
|
$
|
26
|
|
$
|
349
|
|
$
|
(198
|
)
|
$
|
29
|
|
$
|
(499
|
)
|
$
|
7
|
|
$
|
(22
|
)
|
|
$
|
5,687
|
|
$
|
(355
|
)
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
Other borrowed funds
|
$
|
7
|
|
|
|
|
|
|
$
|
26
|
|
$
|
(28
|
)
|
|
|
|
$
|
5
|
|
|
|
||||||||||||||
Financial derivatives
|
268
|
|
$
|
50
|
|
|
|
|
$
|
1
|
|
|
(98
|
)
|
|
|
|
221
|
|
$
|
53
|
|
|
|||||||||||||
Other liabilities
|
58
|
|
20
|
|
|
|
|
2
|
|
53
|
|
(55
|
)
|
|
|
|
78
|
|
11
|
|
|
|||||||||||||||
Total liabilities
|
$
|
333
|
|
$
|
70
|
|
|
|
|
|
|
$
|
3
|
|
$
|
79
|
|
$
|
(181
|
)
|
|
|
|
|
|
$
|
304
|
|
$
|
64
|
|
|
||||
Net gains (losses)
|
|
$
|
(232
|
)
|
(f)
|
|
|
|
|
|
|
|
|
|
$
|
(419
|
)
|
(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 June 30, 2020 and $5.4 billion and $.3 billion as of December 31, 2019, respectively.
|
|
Fair Value
|
|
Gains (Losses)
Three months ended
|
|
Gains (Losses)
Six months ended |
|
||||||||||||||||||
In millions
|
June 30
2020 |
|
|
December 31
2019 |
|
|
June 30
2020 |
|
|
June 30
2019 |
|
|
June 30
2020 |
|
|
June 30
2019 |
|
|
||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nonaccrual loans
|
$
|
211
|
|
|
$
|
136
|
|
|
$
|
(31
|
)
|
|
$
|
(34
|
)
|
|
$
|
(56
|
)
|
|
$
|
(44
|
)
|
|
OREO and foreclosed assets
|
30
|
|
|
57
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(4
|
)
|
|
||||||
Long-lived assets
|
4
|
|
|
5
|
|
|
(2
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
||||||
Total assets
|
$
|
245
|
|
|
$
|
198
|
|
|
$
|
(34
|
)
|
|
$
|
(40
|
)
|
|
$
|
(61
|
)
|
|
$
|
(52
|
)
|
|
(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.
|
|
June 30, 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
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accruing loans less than 90 days past due
|
$
|
813
|
|
|
$
|
778
|
|
|
$
|
35
|
|
|
$
|
813
|
|
|
$
|
792
|
|
|
$
|
21
|
|
|
Accruing loans 90 days or more past due
|
7
|
|
|
7
|
|
|
|
|
|
2
|
|
|
2
|
|
|
|
|
|
||||||
Nonaccrual loans
|
11
|
|
|
12
|
|
|
(1
|
)
|
|
4
|
|
|
4
|
|
|
|
|
|||||||
Total
|
$
|
831
|
|
|
$
|
797
|
|
|
$
|
34
|
|
|
$
|
819
|
|
|
$
|
798
|
|
|
$
|
21
|
|
|
Commercial mortgage loans held for sale (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accruing loans less than 90 days past due
|
$
|
403
|
|
|
$
|
416
|
|
|
$
|
(13
|
)
|
|
$
|
245
|
|
|
$
|
263
|
|
|
$
|
(18
|
)
|
|
Nonaccrual loans
|
1
|
|
|
1
|
|
|
|
|
|
1
|
|
|
2
|
|
|
(1
|
)
|
|
||||||
Total
|
$
|
404
|
|
|
$
|
417
|
|
|
$
|
(13
|
)
|
|
$
|
246
|
|
|
$
|
265
|
|
|
$
|
(19
|
)
|
|
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Accruing loans less than 90 days past due
|
$
|
273
|
|
|
$
|
287
|
|
|
$
|
(14
|
)
|
|
$
|
291
|
|
|
$
|
304
|
|
|
$
|
(13
|
)
|
|
Accruing loans 90 days or more past due
|
233
|
|
|
244
|
|
|
(11
|
)
|
|
285
|
|
|
296
|
|
|
(11
|
)
|
|
||||||
Nonaccrual loans
|
525
|
|
|
794
|
|
|
(269
|
)
|
|
166
|
|
|
265
|
|
|
(99
|
)
|
|
||||||
Total
|
$
|
1,031
|
|
|
$
|
1,325
|
|
|
$
|
(294
|
)
|
|
$
|
742
|
|
|
$
|
865
|
|
|
$
|
(123
|
)
|
|
Other assets
|
$
|
62
|
|
|
$
|
59
|
|
|
$
|
3
|
|
|
$
|
132
|
|
|
$
|
125
|
|
|
$
|
7
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other borrowed funds
|
$
|
29
|
|
|
$
|
29
|
|
|
|
|
|
|
$
|
63
|
|
|
$
|
64
|
|
|
$
|
(1
|
)
|
|
(a)
|
There were no accruing loans 90 days or more past due within this category at June 30, 2020 or December 31, 2019.
|
|
Gains (Losses)
|
|
Gains (Losses)
|
|
||||||||||||
|
Three months ended
|
|
Six months ended
|
|
||||||||||||
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
June 30
|
|
|
||||
In millions
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Residential mortgage loans held for sale
|
$
|
52
|
|
|
$
|
20
|
|
|
$
|
98
|
|
|
$
|
34
|
|
|
Commercial mortgage loans held for sale
|
$
|
12
|
|
|
$
|
18
|
|
|
$
|
60
|
|
|
$
|
23
|
|
|
Loans
|
$
|
8
|
|
|
$
|
5
|
|
|
$
|
26
|
|
|
$
|
9
|
|
|
Other assets
|
$
|
9
|
|
|
$
|
12
|
|
|
$
|
(27
|
)
|
|
$
|
21
|
|
|
(a)
|
The impact on earnings of offsetting hedged items or hedging instruments is not reflected in these amounts.
|
|
Carrying
|
|
|
Fair Value
|
|
|||||||||||||||
In millions
|
Amount
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
|||||
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and due from banks
|
$
|
6,338
|
|
|
$
|
6,338
|
|
|
$
|
6,338
|
|
|
|
|
|
|
||||
Interest-earning deposits with banks
|
50,233
|
|
|
50,233
|
|
|
|
|
$
|
50,233
|
|
|
|
|
||||||
Securities held to maturity
|
1,443
|
|
|
1,615
|
|
|
931
|
|
|
487
|
|
|
$
|
197
|
|
|
||||
Net loans (excludes leases)
|
244,181
|
|
|
251,421
|
|
|
|
|
|
|
251,421
|
|
|
|||||||
Other assets
|
5,198
|
|
|
5,184
|
|
|
|
|
5,180
|
|
|
4
|
|
|
||||||
Total assets
|
$
|
307,393
|
|
|
$
|
314,791
|
|
|
$
|
7,269
|
|
|
$
|
55,900
|
|
|
$
|
251,622
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Time deposits
|
$
|
21,220
|
|
|
$
|
21,227
|
|
|
|
|
$
|
21,227
|
|
|
|
|
||||
Borrowed funds
|
45,024
|
|
|
45,309
|
|
|
|
|
43,603
|
|
|
$
|
1,706
|
|
|
|||||
Unfunded lending related commitments
|
662
|
|
|
662
|
|
|
|
|
|
|
662
|
|
|
|||||||
Other liabilities
|
372
|
|
|
372
|
|
|
|
|
372
|
|
|
|
|
|||||||
Total liabilities
|
$
|
67,278
|
|
|
$
|
67,570
|
|
|
|
|
$
|
65,202
|
|
|
$
|
2,368
|
|
|
||
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 lending related commitments
|
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 69);
|
•
|
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.
|
|
June 30, 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
|
$
|
27,874
|
|
|
|
$
|
30,663
|
|
|
|
||||||||
Cash flow hedges
|
16,342
|
|
$
|
7
|
|
|
23,642
|
|
$
|
6
|
|
|
||||||
Foreign exchange contracts:
|
|
|
|
|
|
|
||||||||||||
Net investment hedges
|
1,194
|
|
75
|
|
|
1,102
|
|
|
|
$
|
6
|
|
||||||
Total derivatives designated for hedging
|
$
|
45,410
|
|
$
|
82
|
|
|
|
$
|
55,407
|
|
$
|
6
|
|
$
|
6
|
|
|
Derivatives not used for hedging
|
|
|
|
|
|
|
||||||||||||
Derivatives used for mortgage banking activities (e):
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
$
|
55,678
|
|
|
|
$
|
52,007
|
|
$
|
1
|
|
|
||||||
Futures (f)
|
2,359
|
|
|
|
3,487
|
|
|
|
||||||||||
Mortgage-backed commitments
|
16,569
|
|
$
|
175
|
|
$
|
105
|
|
7,738
|
|
60
|
|
$
|
44
|
|
|||
Other
|
6,083
|
|
35
|
|
39
|
|
3,134
|
|
32
|
|
23
|
|
||||||
Total interest rate contracts
|
80,689
|
|
210
|
|
144
|
|
66,366
|
|
93
|
|
67
|
|
||||||
Derivatives used for customer-related activities:
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
278,337
|
|
6,584
|
|
1,854
|
|
249,075
|
|
2,769
|
|
1,187
|
|
||||||
Futures (f)
|
1,375
|
|
|
|
703
|
|
|
|
||||||||||
Mortgage-backed commitments
|
3,745
|
|
19
|
|
16
|
|
3,721
|
|
2
|
|
6
|
|
||||||
Other
|
23,328
|
|
292
|
|
104
|
|
21,379
|
|
113
|
|
33
|
|
||||||
Total interest rate contracts
|
306,785
|
|
6,895
|
|
1,974
|
|
274,878
|
|
2,884
|
|
1,226
|
|
||||||
Commodity contracts:
|
|
|
|
|
|
|
||||||||||||
Swaps
|
5,313
|
|
531
|
|
509
|
|
5,204
|
|
234
|
|
229
|
|
||||||
Other
|
3,651
|
|
126
|
|
126
|
|
4,203
|
|
72
|
|
72
|
|
||||||
Total commodity contracts
|
8,964
|
|
657
|
|
635
|
|
9,407
|
|
306
|
|
301
|
|
||||||
Foreign exchange contracts and other
|
24,774
|
|
282
|
|
274
|
|
27,120
|
|
204
|
|
162
|
|
||||||
Total derivatives for customer-related activities
|
340,523
|
|
7,834
|
|
2,883
|
|
311,405
|
|
3,394
|
|
1,689
|
|
||||||
Derivatives used for other risk management activities:
|
|
|
|
|
|
|
||||||||||||
Foreign exchange contracts and other
|
9,653
|
|
53
|
|
202
|
|
10,201
|
|
9
|
|
257
|
|
||||||
Total derivatives not designated for hedging
|
$
|
430,865
|
|
$
|
8,097
|
|
$
|
3,229
|
|
$
|
387,972
|
|
$
|
3,496
|
|
$
|
2,013
|
|
Total gross derivatives
|
$
|
476,275
|
|
$
|
8,179
|
|
$
|
3,229
|
|
$
|
443,379
|
|
$
|
3,502
|
|
$
|
2,019
|
|
Less: Impact of legally enforceable master netting agreements
|
|
1,196
|
|
1,196
|
|
|
690
|
|
690
|
|
||||||||
Less: Cash collateral received/paid
|
|
1,825
|
|
1,229
|
|
|
616
|
|
790
|
|
||||||||
Total derivatives
|
|
$
|
5,158
|
|
$
|
804
|
|
|
|
$
|
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 June 30, 2020
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,257
|
|
$
|
527
|
|
$
|
187
|
|
$
|
271
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
3
|
|
$
|
(80
|
)
|
|
||||
Derivatives
|
|
$
|
(2
|
)
|
$
|
47
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(2
|
)
|
$
|
133
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
102
|
|
$
|
1
|
|
|
|
|
|||
For the three months ended June 30, 2019
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
2,672
|
|
$
|
629
|
|
$
|
484
|
|
$
|
367
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
116
|
|
$
|
(523
|
)
|
|
||||
Derivatives
|
|
$
|
(113
|
)
|
$
|
485
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
5
|
|
$
|
9
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
(12
|
)
|
$
|
1
|
|
|
$
|
3
|
|
||
For the six months ended June 30, 2020
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
4,737
|
|
$
|
1,109
|
|
$
|
501
|
|
$
|
614
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
237
|
|
$
|
(1,441
|
)
|
|
||||
Derivatives
|
|
$
|
(233
|
)
|
$
|
1,386
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
(4
|
)
|
$
|
192
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
144
|
|
$
|
3
|
|
|
$
|
1
|
|
||
For the six months ended June 30, 2019
|
|
|
|
|
||||||||
Total amounts on the Consolidated Income Statement
|
$
|
5,274
|
|
$
|
1,249
|
|
$
|
965
|
|
$
|
675
|
|
Gains (losses) on fair value hedges recognized on:
|
|
|
|
|
||||||||
Hedged items (c)
|
|
$
|
174
|
|
$
|
(797
|
)
|
|
||||
Derivatives
|
|
$
|
(168
|
)
|
$
|
713
|
|
|
||||
Amounts related to interest settlements on derivatives
|
|
$
|
10
|
|
$
|
20
|
|
|
||||
Gains (losses) on cash flow hedges (d):
|
|
|
|
|
||||||||
Amount of derivative gains (losses) reclassified from AOCI
|
$
|
(20
|
)
|
$
|
2
|
|
|
$
|
18
|
|
(a)
|
For all periods presented, there were no components of derivative gains or losses excluded from the assessment of hedge effectiveness for any of the fair value or cash flow hedge strategies.
|
(b)
|
All cash flow and fair value hedge derivatives were interest rate contracts for the periods presented.
|
(c)
|
Includes an insignificant amount of fair value hedge adjustments related to discontinued hedge relationships.
|
(d)
|
For all periods presented, there were no gains or losses from cash flow hedge derivatives reclassified to income because it became probable that the original forecasted transaction would not occur.
|
|
June 30, 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)
|
$
|
3,476
|
|
|
$
|
124
|
|
|
$
|
5,666
|
|
|
$
|
59
|
|
|
Borrowed funds
|
$
|
29,156
|
|
|
$
|
1,991
|
|
|
$
|
28,616
|
|
|
$
|
548
|
|
|
(a)
|
Includes $(.2) billion and $(.3) billion of fair value hedge adjustments primarily related to discontinued borrowed funds hedge relationships for June 30, 2020 and December 31, 2019, respectively.
|
(b)
|
Carrying value shown represents amortized cost.
|
|
Three months ended
June 30 |
Six months ended
June 30 |
|
||||||||||
In millions
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
||||
Derivatives used for mortgage banking activities:
|
|
|
|
|
|
||||||||
Interest rate contracts (a)
|
$
|
125
|
|
$
|
218
|
|
$
|
779
|
|
$
|
346
|
|
|
Derivatives used for customer-related activities:
|
|
|
|
|
|
||||||||
Interest rate contracts
|
38
|
|
41
|
|
40
|
|
39
|
|
|
||||
Foreign exchange contracts and other (b)
|
29
|
|
30
|
|
40
|
|
53
|
|
|
||||
Gains (losses) from customer-related activities (c)
|
67
|
|
71
|
|
80
|
|
92
|
|
|
||||
Derivatives used for other risk management activities:
|
|
|
|
|
|
||||||||
Foreign exchange contracts and other (c)
|
(102
|
)
|
(10
|
)
|
105
|
|
(64
|
)
|
|
||||
Total gains (losses) from derivatives not designated as hedging instruments
|
$
|
90
|
|
$
|
279
|
|
$
|
964
|
|
$
|
374
|
|
|
(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
|
|
|
|||||||||||
June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
66
|
|
|
|
|
|
|
$
|
66
|
|
|
|
|
|
|
$
|
66
|
|
|
||||||
Over-the-counter
|
|
7,046
|
|
|
$
|
515
|
|
|
$
|
1,757
|
|
|
4,774
|
|
|
|
|
$
|
674
|
|
|
4,100
|
|
|
|||
Commodity contracts
|
|
657
|
|
|
443
|
|
|
61
|
|
|
153
|
|
|
|
|
|
|
153
|
|
|
|||||||
Foreign exchange and other contracts
|
|
410
|
|
|
238
|
|
|
7
|
|
|
165
|
|
|
|
|
1
|
|
|
164
|
|
|
||||||
Total derivative assets
|
|
$
|
8,179
|
|
|
$
|
1,196
|
|
|
$
|
1,825
|
|
|
$
|
5,158
|
|
|
(a)
|
|
$
|
675
|
|
|
$
|
4,483
|
|
|
Derivative liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Over-the-counter cleared
|
|
$
|
48
|
|
|
|
|
|
|
$
|
48
|
|
|
|
|
|
|
$
|
48
|
|
|
||||||
Over-the-counter
|
|
2,070
|
|
|
$
|
815
|
|
|
$
|
1,111
|
|
|
144
|
|
|
|
|
|
|
144
|
|
|
|||||
Commodity contracts
|
|
635
|
|
|
267
|
|
|
25
|
|
|
343
|
|
|
|
|
|
|
343
|
|
|
|||||||
Foreign exchange and other contracts
|
|
476
|
|
|
114
|
|
|
93
|
|
|
269
|
|
|
|
|
|
|
269
|
|
|
|||||||
Total derivative liabilities
|
|
$
|
3,229
|
|
|
$
|
1,196
|
|
|
$
|
1,229
|
|
|
$
|
804
|
|
|
(b)
|
|
|
|
|
$
|
804
|
|
|
|
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
|
Three months ended June 30
In millions |
|
Retail Banking
|
|
|
Corporate &
Institutional Banking |
|
|
Asset
Management Group |
|
|
Other
|
|
|
Consolidated (a)
|
|
|||||
2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
1,390
|
|
|
$
|
1,052
|
|
|
$
|
89
|
|
|
$
|
(4
|
)
|
|
$
|
2,527
|
|
Noninterest income
|
|
585
|
|
|
726
|
|
|
204
|
|
|
34
|
|
|
1,549
|
|
|||||
Total revenue
|
|
1,975
|
|
|
1,778
|
|
|
293
|
|
|
30
|
|
|
4,076
|
|
|||||
Provision for credit losses
|
|
761
|
|
|
1,585
|
|
|
39
|
|
|
78
|
|
|
2,463
|
|
|||||
Depreciation and amortization
|
|
67
|
|
|
51
|
|
|
12
|
|
|
121
|
|
|
251
|
|
|||||
Other noninterest expense
|
|
1,433
|
|
|
622
|
|
|
205
|
|
|
4
|
|
|
2,264
|
|
|||||
Income (loss) from continuing operations before income taxes (benefit) and
noncontrolling interests
|
|
(286
|
)
|
|
(480
|
)
|
|
37
|
|
|
(173
|
)
|
|
(902
|
)
|
|||||
Income taxes (benefit)
|
|
(63
|
)
|
|
(122
|
)
|
|
9
|
|
|
18
|
|
|
(158
|
)
|
|||||
Net income (loss) from continuing operations
|
|
$
|
(223
|
)
|
|
$
|
(358
|
)
|
|
$
|
28
|
|
|
$
|
(191
|
)
|
|
$
|
(744
|
)
|
Average Assets
|
|
$
|
102,103
|
|
|
$
|
199,254
|
|
|
$
|
7,958
|
|
|
$
|
147,998
|
|
|
$
|
457,313
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
1,376
|
|
|
$
|
897
|
|
|
$
|
68
|
|
|
$
|
157
|
|
|
$
|
2,498
|
|
Noninterest income
|
|
657
|
|
|
661
|
|
|
286
|
|
|
113
|
|
|
1,717
|
|
|||||
Total revenue
|
|
2,033
|
|
|
1,558
|
|
|
354
|
|
|
270
|
|
|
4,215
|
|
|||||
Provision for credit losses (benefit)
|
|
81
|
|
|
100
|
|
|
|
|
|
(1
|
)
|
|
180
|
|
|||||
Depreciation and amortization
|
|
59
|
|
|
50
|
|
|
28
|
|
|
120
|
|
|
257
|
|
|||||
Other noninterest expense
|
|
1,468
|
|
|
648
|
|
|
221
|
|
|
17
|
|
|
2,354
|
|
|||||
Income from continuing operations before income taxes (benefit) and
noncontrolling interests |
|
425
|
|
|
760
|
|
|
105
|
|
|
134
|
|
|
1,424
|
|
|||||
Income taxes (benefit)
|
|
100
|
|
|
158
|
|
|
25
|
|
|
(44
|
)
|
|
239
|
|
|||||
Net income from continuing operations
|
|
$
|
325
|
|
|
$
|
602
|
|
|
$
|
80
|
|
|
$
|
178
|
|
|
$
|
1,185
|
|
Average Assets
|
|
$
|
92,350
|
|
|
$
|
163,897
|
|
|
$
|
7,150
|
|
|
$
|
133,565
|
|
|
$
|
396,962
|
|
Six months ended June 30
In millions |
|
Retail
Banking |
|
|
Corporate &
Institutional Banking |
|
|
Asset
Management Group |
|
|
Other
|
|
|
Consolidated (a)
|
|
|||||
2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
2,846
|
|
|
$
|
2,002
|
|
|
$
|
177
|
|
|
$
|
13
|
|
|
$
|
5,038
|
|
Noninterest income
|
|
1,373
|
|
|
1,420
|
|
|
408
|
|
|
173
|
|
|
3,374
|
|
|||||
Total revenue
|
|
4,219
|
|
|
3,422
|
|
|
585
|
|
|
186
|
|
|
8,412
|
|
|||||
Provision for credit losses
|
|
1,206
|
|
|
2,043
|
|
|
42
|
|
|
86
|
|
|
3,377
|
|
|||||
Depreciation and amortization
|
|
124
|
|
|
99
|
|
|
23
|
|
|
245
|
|
|
491
|
|
|||||
Other noninterest expense
|
|
2,912
|
|
|
1,296
|
|
|
413
|
|
|
(54
|
)
|
|
4,567
|
|
|||||
Income (loss) from continuing operations before income taxes (benefit) and
noncontrolling interests |
|
(23
|
)
|
|
(16
|
)
|
|
107
|
|
|
(91
|
)
|
|
(23
|
)
|
|||||
Income taxes (benefit)
|
|
(1
|
)
|
|
(28
|
)
|
|
25
|
|
|
(34
|
)
|
|
(38
|
)
|
|||||
Net income (loss) from continuing operations
|
|
$
|
(22
|
)
|
|
$
|
12
|
|
|
$
|
82
|
|
|
$
|
(57
|
)
|
|
$
|
15
|
|
Average Assets
|
|
$
|
99,583
|
|
|
$
|
185,878
|
|
|
$
|
7,880
|
|
|
$
|
141,533
|
|
|
$
|
434,874
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income Statement
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income
|
|
$
|
2,725
|
|
|
$
|
1,774
|
|
|
$
|
138
|
|
|
$
|
336
|
|
|
$
|
4,973
|
|
Noninterest income
|
|
1,252
|
|
|
1,237
|
|
|
503
|
|
|
311
|
|
|
3,303
|
|
|||||
Total revenue
|
|
3,977
|
|
|
3,011
|
|
|
641
|
|
|
647
|
|
|
8,276
|
|
|||||
Provision for credit losses (benefit)
|
|
209
|
|
|
171
|
|
|
(1
|
)
|
|
(10
|
)
|
|
369
|
|
|||||
Depreciation and amortization
|
|
110
|
|
|
100
|
|
|
40
|
|
|
241
|
|
|
491
|
|
|||||
Other noninterest expense
|
|
2,885
|
|
|
1,284
|
|
|
439
|
|
|
90
|
|
|
4,698
|
|
|||||
Income from continuing operations before income taxes (benefit) and
noncontrolling interests |
|
773
|
|
|
1,456
|
|
|
163
|
|
|
326
|
|
|
2,718
|
|
|||||
Income taxes (benefit)
|
|
184
|
|
|
302
|
|
|
38
|
|
|
(73
|
)
|
|
451
|
|
|||||
Net income from continuing operations
|
|
$
|
589
|
|
|
$
|
1,154
|
|
|
$
|
125
|
|
|
$
|
399
|
|
|
$
|
2,267
|
|
Average Assets
|
|
$
|
91,805
|
|
|
$
|
160,551
|
|
|
$
|
7,204
|
|
|
$
|
131,901
|
|
|
$
|
391,461
|
|
(a)
|
There were no material intersegment revenues for the three and six months ended June 30, 2020 and 2019.
|
•
|
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
June 30 |
Six months ended
June 30 |
||||||||||
In millions
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||
Product
|
|
|
|
|
||||||||
Deposit account fees
|
$
|
73
|
|
$
|
154
|
|
$
|
231
|
|
$
|
302
|
|
Debit card fees
|
120
|
|
136
|
|
249
|
|
260
|
|
||||
Brokerage fees
|
86
|
|
86
|
|
179
|
|
175
|
|
||||
Merchant services
|
23
|
|
56
|
|
72
|
|
104
|
|
||||
Net credit card fees (a)
|
39
|
|
51
|
|
80
|
|
99
|
|
||||
Other
|
52
|
|
62
|
|
108
|
|
128
|
|
||||
Total in-scope noninterest income by product
|
$
|
393
|
|
$
|
545
|
|
$
|
919
|
|
$
|
1,068
|
|
Reconciliation to total Retail Banking noninterest income
|
|
|
|
|
||||||||
Total in-scope noninterest income
|
$
|
393
|
|
$
|
545
|
|
$
|
919
|
|
$
|
1,068
|
|
Total out-of-scope noninterest income (b)
|
192
|
|
112
|
|
454
|
|
184
|
|
||||
Total Retail Banking noninterest income
|
$
|
585
|
|
$
|
657
|
|
$
|
1,373
|
|
$
|
1,252
|
|
(a)
|
Net credit card fees consists of interchange fees of $102 million and $126 million and credit card reward costs of $63 million and $75 million for the three months ended June 30, 2020 and 2019, respectively. Net credit card fees consists of interchange fees of $220 million and $238 million and credit card reward costs of $140 million and $139 million for the six months ended June 30, 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
June 30 |
Six months ended
June 30 |
||||||||||
In millions
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||
Product
|
|
|
|
|
||||||||
Treasury management fees
|
$
|
218
|
|
$
|
212
|
|
$
|
434
|
|
$
|
411
|
|
Capital markets fees
|
187
|
|
149
|
|
362
|
|
276
|
|
||||
Commercial mortgage banking activities
|
24
|
|
24
|
|
50
|
|
49
|
|
||||
Other
|
17
|
|
19
|
|
37
|
|
36
|
|
||||
Total in-scope noninterest income by product
|
$
|
446
|
|
$
|
404
|
|
$
|
883
|
|
$
|
772
|
|
Reconciliation to total Corporate & Institutional Banking noninterest income
|
|
|
|
|
||||||||
Total in-scope noninterest income
|
$
|
446
|
|
$
|
404
|
|
$
|
883
|
|
$
|
772
|
|
Total out-of-scope noninterest income (a)
|
280
|
|
257
|
|
537
|
|
465
|
|
||||
Total Corporate & Institutional Banking noninterest income
|
$
|
726
|
|
$
|
661
|
|
$
|
1,420
|
|
$
|
1,237
|
|
(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
June 30 |
Six months ended
June 30 |
||||||||||
In millions
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
||||
Customer Type
|
|
|
|
|
||||||||
Personal
|
$
|
151
|
|
$
|
157
|
|
$
|
301
|
|
$
|
304
|
|
Institutional
|
48
|
|
64
|
|
99
|
|
129
|
|
||||
Total in-scope noninterest income by customer type
|
$
|
199
|
|
$
|
221
|
|
$
|
400
|
|
$
|
433
|
|
Reconciliation to Asset Management Group noninterest income
|
|
|
|
|
||||||||
Total in-scope noninterest income
|
$
|
199
|
|
$
|
221
|
|
$
|
400
|
|
$
|
433
|
|
Total out-of-scope noninterest income (a)
|
5
|
|
65
|
|
8
|
|
70
|
|
||||
Total Asset Management Group noninterest income
|
$
|
204
|
|
$
|
286
|
|
$
|
408
|
|
$
|
503
|
|
(a)
|
Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.
|
|
Six months ended June 30
|
|||||||||||||||||||||
|
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
|
$
|
51,068
|
|
|
$
|
626
|
|
|
2.45
|
%
|
|
$
|
29,589
|
|
|
$
|
434
|
|
|
2.93
|
%
|
|
Non-agency
|
1,573
|
|
|
59
|
|
|
7.51
|
%
|
|
1,845
|
|
|
71
|
|
|
7.64
|
%
|
|
||||
Commercial mortgage-backed
|
6,983
|
|
|
96
|
|
|
2.76
|
%
|
|
5,457
|
|
|
84
|
|
|
3.09
|
%
|
|
||||
Asset-backed
|
5,156
|
|
|
73
|
|
|
2.82
|
%
|
|
5,266
|
|
|
88
|
|
|
3.35
|
%
|
|
||||
U.S. Treasury and government agencies
|
15,697
|
|
|
161
|
|
|
2.03
|
%
|
|
18,529
|
|
|
232
|
|
|
2.49
|
%
|
|
||||
Other
|
4,488
|
|
|
81
|
|
|
3.57
|
%
|
|
3,453
|
|
|
57
|
|
|
3.34
|
%
|
|
||||
Total securities available for sale
|
84,965
|
|
|
1,096
|
|
|
2.58
|
%
|
|
64,139
|
|
|
966
|
|
|
3.01
|
%
|
|
||||
Securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
15,487
|
|
|
230
|
|
|
2.97
|
%
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
585
|
|
|
10
|
|
|
3.55
|
%
|
|
||||
Asset-backed
|
37
|
|
|
—
|
|
|
2.65
|
%
|
|
175
|
|
|
3
|
|
|
3.88
|
%
|
|
||||
U.S. Treasury and government agencies
|
781
|
|
|
11
|
|
|
2.84
|
%
|
|
763
|
|
|
11
|
|
|
2.83
|
%
|
|
||||
Other
|
643
|
|
|
14
|
|
|
4.38
|
%
|
|
1,834
|
|
|
42
|
|
|
4.42
|
%
|
|
||||
Total securities held to maturity
|
1,461
|
|
|
25
|
|
|
3.51
|
%
|
|
18,844
|
|
|
296
|
|
|
3.13
|
%
|
|
||||
Total investment securities
|
86,426
|
|
|
1,121
|
|
|
2.59
|
%
|
|
82,983
|
|
|
1,262
|
|
|
3.04
|
%
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
141,159
|
|
|
2,278
|
|
|
3.19
|
%
|
|
121,907
|
|
|
2,619
|
|
|
4.27
|
%
|
|
||||
Commercial real estate
|
28,491
|
|
|
466
|
|
|
3.23
|
%
|
|
28,285
|
|
|
625
|
|
|
4.40
|
%
|
|
||||
Equipment lease financing
|
7,051
|
|
|
137
|
|
|
3.88
|
%
|
|
7,274
|
|
|
145
|
|
|
4.00
|
%
|
|
||||
Consumer
|
57,082
|
|
|
1,454
|
|
|
5.12
|
%
|
|
55,099
|
|
|
1,517
|
|
|
5.55
|
%
|
|
||||
Residential real estate
|
22,060
|
|
|
431
|
|
|
3.91
|
%
|
|
19,147
|
|
|
409
|
|
|
4.28
|
%
|
|
||||
Total loans
|
255,843
|
|
|
4,766
|
|
|
3.71
|
%
|
|
231,712
|
|
|
5,315
|
|
|
4.58
|
%
|
|
||||
Interest-earning deposits with banks
|
26,085
|
|
|
65
|
|
|
.50
|
%
|
|
14,238
|
|
|
171
|
|
|
2.41
|
%
|
|
||||
Other interest-earning assets
|
10,167
|
|
|
144
|
|
|
2.84
|
%
|
|
12,113
|
|
|
231
|
|
|
3.82
|
%
|
|
||||
Total interest-earning assets/interest income
|
378,521
|
|
|
6,096
|
|
|
3.21
|
%
|
|
341,046
|
|
|
6,979
|
|
|
4.09
|
%
|
|
||||
Noninterest-earning assets
|
56,353
|
|
|
|
|
|
|
50,415
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
434,874
|
|
|
|
|
|
|
$
|
391,461
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
$
|
57,317
|
|
|
$
|
118
|
|
|
.41
|
%
|
|
$
|
54,758
|
|
|
$
|
315
|
|
|
1.16
|
%
|
|
Demand
|
76,906
|
|
|
88
|
|
|
.23
|
%
|
|
63,958
|
|
|
170
|
|
|
.53
|
%
|
|
||||
Savings
|
72,661
|
|
|
195
|
|
|
.54
|
%
|
|
60,394
|
|
|
347
|
|
|
1.16
|
%
|
|
||||
Time deposits
|
21,506
|
|
|
115
|
|
|
1.06
|
%
|
|
19,430
|
|
|
155
|
|
|
1.61
|
%
|
|
||||
Total interest-bearing deposits
|
228,390
|
|
|
516
|
|
|
.45
|
%
|
|
198,540
|
|
|
987
|
|
|
1.00
|
%
|
|
||||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank borrowings
|
13,000
|
|
|
89
|
|
|
1.36
|
%
|
|
22,089
|
|
|
303
|
|
|
2.73
|
%
|
|
||||
Bank notes and senior debt
|
29,143
|
|
|
295
|
|
|
2.00
|
%
|
|
26,145
|
|
|
451
|
|
|
3.43
|
%
|
|
||||
Subordinated debt
|
5,935
|
|
|
69
|
|
|
2.32
|
%
|
|
5,704
|
|
|
124
|
|
|
4.34
|
%
|
|
||||
Other
|
7,131
|
|
|
48
|
|
|
1.34
|
%
|
|
7,128
|
|
|
87
|
|
|
2.44
|
%
|
|
||||
Total borrowed funds
|
55,209
|
|
|
501
|
|
|
1.80
|
%
|
|
61,066
|
|
|
965
|
|
|
3.14
|
%
|
|
||||
Total interest-bearing liabilities/interest expense
|
283,599
|
|
|
1,017
|
|
|
.71
|
%
|
|
259,606
|
|
|
1,952
|
|
|
1.50
|
%
|
|
||||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
84,086
|
|
|
|
|
|
|
71,526
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
16,712
|
|
|
|
|
|
|
12,187
|
|
|
|
|
|
|
||||||||
Equity
|
50,477
|
|
|
|
|
|
|
48,142
|
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
434,874
|
|
|
|
|
|
|
$
|
391,461
|
|
|
|
|
|
|
||||||
Interest rate spread
|
|
|
|
|
2.50
|
%
|
|
|
|
|
|
2.59
|
%
|
|
||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
.17
|
|
|
|
|
|
|
.35
|
|
|
||||||||
Net interest income/margin
|
|
|
$
|
5,079
|
|
|
2.67
|
%
|
|
|
|
$
|
5,027
|
|
|
2.94
|
%
|
|
|
Three months ended June 30
|
|||||||||||||||||||||
|
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
|
$
|
52,500
|
|
|
$
|
300
|
|
|
2.29
|
%
|
|
$
|
30,169
|
|
|
$
|
221
|
|
|
2.93
|
%
|
|
Non-agency
|
1,529
|
|
|
27
|
|
|
7.13
|
%
|
|
1,801
|
|
|
36
|
|
|
7.99
|
%
|
|
||||
Commercial mortgage-backed
|
7,232
|
|
|
46
|
|
|
2.59
|
%
|
|
5,545
|
|
|
42
|
|
|
3.06
|
%
|
|
||||
Asset-backed
|
5,309
|
|
|
35
|
|
|
2.60
|
%
|
|
5,395
|
|
|
45
|
|
|
3.34
|
%
|
|
||||
U.S. Treasury and government agencies
|
15,457
|
|
|
69
|
|
|
1.77
|
%
|
|
18,815
|
|
|
118
|
|
|
2.48
|
%
|
|
||||
Other
|
4,952
|
|
|
44
|
|
|
3.47
|
%
|
|
3,237
|
|
|
27
|
|
|
3.33
|
%
|
|
||||
Total securities available for sale
|
86,979
|
|
|
521
|
|
|
2.39
|
%
|
|
64,962
|
|
|
489
|
|
|
3.01
|
%
|
|
||||
Securities held to maturity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
15,350
|
|
|
112
|
|
|
2.93
|
%
|
|
||||
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
—
|
|
|
570
|
|
|
5
|
|
|
3.57
|
%
|
|
||||
Asset-backed
|
22
|
|
|
—
|
|
|
2.38
|
%
|
|
172
|
|
|
1
|
|
|
3.92
|
%
|
|
||||
U.S. Treasury and government agencies
|
783
|
|
|
5
|
|
|
2.84
|
%
|
|
765
|
|
|
6
|
|
|
2.84
|
%
|
|
||||
Other
|
646
|
|
|
7
|
|
|
4.27
|
%
|
|
1,822
|
|
|
22
|
|
|
4.44
|
%
|
|
||||
Total securities held to maturity
|
1,451
|
|
|
12
|
|
|
3.47
|
%
|
|
18,679
|
|
|
146
|
|
|
3.10
|
%
|
|
||||
Total investment securities
|
88,430
|
|
|
533
|
|
|
2.41
|
%
|
|
83,641
|
|
|
635
|
|
|
3.03
|
%
|
|
||||
Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial and industrial
|
153,595
|
|
|
1,098
|
|
|
2.83
|
%
|
|
124,441
|
|
|
1,328
|
|
|
4.22
|
%
|
|
||||
Commercial real estate
|
28,707
|
|
|
206
|
|
|
2.84
|
%
|
|
28,423
|
|
|
318
|
|
|
4.43
|
%
|
|
||||
Equipment lease financing
|
7,035
|
|
|
68
|
|
|
3.82
|
%
|
|
7,283
|
|
|
74
|
|
|
4.06
|
%
|
|
||||
Consumer
|
56,485
|
|
|
683
|
|
|
4.86
|
%
|
|
55,202
|
|
|
766
|
|
|
5.56
|
%
|
|
||||
Residential real estate
|
22,292
|
|
|
215
|
|
|
3.86
|
%
|
|
19,496
|
|
|
207
|
|
|
4.27
|
%
|
|
||||
Total loans
|
268,114
|
|
|
2,270
|
|
|
3.37
|
%
|
|
234,845
|
|
|
2,693
|
|
|
4.56
|
%
|
|
||||
Interest-earning deposits with banks
|
34,600
|
|
|
9
|
|
|
.10
|
%
|
|
13,469
|
|
|
80
|
|
|
2.38
|
%
|
|
||||
Other interest-earning assets
|
10,867
|
|
|
62
|
|
|
2.26
|
%
|
|
13,145
|
|
|
116
|
|
|
3.55
|
%
|
|
||||
Total interest-earning assets/interest income
|
402,011
|
|
|
2,874
|
|
|
2.85
|
%
|
|
345,100
|
|
|
3,524
|
|
|
4.06
|
%
|
|
||||
Noninterest-earning assets
|
55,302
|
|
|
|
|
|
|
51,862
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
457,313
|
|
|
|
|
|
|
$
|
396,962
|
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market
|
$
|
61,346
|
|
|
$
|
23
|
|
|
.15
|
%
|
|
$
|
54,814
|
|
|
$
|
160
|
|
|
1.17
|
%
|
|
Demand
|
82,881
|
|
|
16
|
|
|
.08
|
%
|
|
64,431
|
|
|
89
|
|
|
.55
|
%
|
|
||||
Savings
|
75,345
|
|
|
57
|
|
|
.31
|
%
|
|
61,949
|
|
|
183
|
|
|
1.19
|
%
|
|
||||
Time deposits
|
21,873
|
|
|
45
|
|
|
.80
|
%
|
|
20,040
|
|
|
83
|
|
|
1.67
|
%
|
|
||||
Total interest-bearing deposits
|
241,445
|
|
|
141
|
|
|
.23
|
%
|
|
201,234
|
|
|
515
|
|
|
1.03
|
%
|
|
||||
Borrowed funds
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Federal Home Loan Bank borrowings
|
12,559
|
|
|
31
|
|
|
1.00
|
%
|
|
22,681
|
|
|
154
|
|
|
2.69
|
%
|
|
||||
Bank notes and senior debt
|
28,298
|
|
|
112
|
|
|
1.56
|
%
|
|
26,865
|
|
|
228
|
|
|
3.36
|
%
|
|
||||
Subordinated debt
|
5,937
|
|
|
29
|
|
|
1.91
|
%
|
|
5,526
|
|
|
58
|
|
|
4.17
|
%
|
|
||||
Other
|
6,435
|
|
|
15
|
|
|
.92
|
%
|
|
7,263
|
|
|
44
|
|
|
2.44
|
%
|
|
||||
Total borrowed funds
|
53,229
|
|
|
187
|
|
|
1.39
|
%
|
|
62,335
|
|
|
484
|
|
|
3.08
|
%
|
|
||||
Total interest-bearing liabilities/interest expense
|
294,674
|
|
|
328
|
|
|
.44
|
%
|
|
263,569
|
|
|
999
|
|
|
1.51
|
%
|
|
||||
Noninterest-bearing liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Noninterest-bearing deposits
|
93,776
|
|
|
|
|
|
|
71,648
|
|
|
|
|
|
|
||||||||
Accrued expenses and other liabilities
|
16,989
|
|
|
|
|
|
|
13,122
|
|
|
|
|
|
|
||||||||
Equity
|
51,874
|
|
|
|
|
|
|
48,623
|
|
|
|
|
|
|
||||||||
Total liabilities and equity
|
$
|
457,313
|
|
|
|
|
|
|
$
|
396,962
|
|
|
|
|
|
|
||||||
Interest rate spread
|
|
|
|
|
2.41
|
%
|
|
|
|
|
|
2.55
|
%
|
|
||||||||
Impact of noninterest-bearing sources
|
|
|
|
|
.11
|
|
|
|
|
|
|
.36
|
|
|
||||||||
Net interest income/margin
|
|
|
$
|
2,546
|
|
|
2.52
|
%
|
|
|
|
$
|
2,525
|
|
|
2.91
|
%
|
|
(a)
|
Nonaccrual loans are included in loans, net of unearned income. The impact of financial derivatives used in interest rate risk management is included in the interest income/expense and average yields/rates of the related assets and liabilities. Basis adjustments related to hedged items are included in noninterest-earning assets and noninterest-bearing liabilities. Average balances of securities are based on amortized historical cost (excluding adjustments to fair value, which are included in other assets). Average balances for certain loans and borrowed funds accounted for at fair value are included in noninterest-earning assets and noninterest-bearing liabilities, with changes in fair value recorded in Noninterest income.
|
(b)
|
Loan fees for the three months ended June 30, 2020 and June 30, 2019 were $35 million and $43 million, respectively. Loan fees for the six months ended June 30, 2020 and June 30, 2019 were $79 million and $71 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.
|
|
|
Six months ended
|
Three months ended
|
|||||||||||
In millions
|
|
June 30, 2020
|
|
|
June 30, 2019
|
|
June 30, 2020
|
|
June 30, 2019
|
|
||||
Net interest income (GAAP)
|
|
$
|
5,038
|
|
|
$
|
4,973
|
|
$
|
2,527
|
|
$
|
2,498
|
|
Taxable-equivalent adjustments
|
|
41
|
|
|
54
|
|
19
|
|
27
|
|
||||
Net interest income (Non-GAAP)
|
|
$
|
5,079
|
|
|
$
|
5,027
|
|
$
|
2,546
|
|
$
|
2,525
|
|
(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.
|
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)
|
|
|
April 1 - 30
|
16
|
|
$
|
101.50
|
|
—
|
|
76,028
|
|
May 1 - 31 (c)
|
—
|
|
$
|
105.99
|
|
—
|
|
76,028
|
|
June 1 - 30
|
—
|
|
$
|
—
|
|
—
|
|
76,028
|
|
Total
|
16
|
|
$
|
101.50
|
|
|
|
(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. 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. We announced on March 16, 2020 a temporary suspension of our common stock repurchase program in conjunction with the Federal Reserve's effort to support the U.S. economy during the pandemic, and will continue the suspension through the third quarter of 2020, with the exception of share repurchases to offset the effects of employee benefit plan-related issuances as permitted by recent guidance from the Federal Reserve. The estimated amount is $100 million in the third quarter of 2020, but the timing and amount of executed repurchases will be based on market conditions and other factors.
|
(c)
|
Average price paid for immaterial amounts of PNC common stock purchased in connection with our various employee benefit plans generally related to shares used to cover employee payroll tax withholding requirements.
|
/s/ Robert Q. Reilly
|
Robert Q. Reilly
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
A.
|
GRANT AND ACCEPTANCE OF PSUs
|
|
|
GRANTEE
|
[Name]
|
|
GRANT DATE
|
[Date]
|
|
AWARD
|
Performance share units (“PSUs”), each representing a right to receive one Share, and related Dividend Equivalents, payable in cash.
|
|
TARGET
|
[# Shares] PSUs and related Dividend Equivalents
|
|
PERFORMANCE PERIOD
|
January 1, 2020 - December 31, 2022
(other than limited exceptions in the event of death or a Change of Control, as described in Appendix C).
|
C.1
|
FORFEITURE UPON FAILURE TO MEET SERVICE-BASED VESTING REQUIREMENTS
|
Except as otherwise provided in Section B.2 above, if you cease to be an employee of PNC prior to an applicable Final Award Date, you will not have satisfied the service-based vesting requirements and the Award will be automatically forfeited and cancelled as of your Termination Date. Upon such forfeiture or cancellation, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
|
C.2
|
FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
|
At any time prior to the Final Award Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
|
C.3
|
FORFEITURE UPON FAILURE TO SATISFY PERFORMANCE CONDITIONS
|
If the final Corporate Performance Factor (as defined in Appendix C) is determined by the Committee to be 0.00%, the Award will be eligible to be forfeited and cancelled without payment of any consideration by PNC as of the date of such determination.
|
D.
|
DIVIDEND EQUIVALENTS
|
|
D.1
|
GENERALLY
|
As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the vested Payout Share Units (defined in Appendix C), in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Final Award Date, as though you were the record holder of such Payout Share Units, and such Payout Share Units had been issued and outstanding shares on the Grant Date through the Final Award Date.
|
D.2
|
ACCRUED DIVIDEND EQUIVALENT PAYMENTS
|
(a) Generally. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the Award vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Award. If the PSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled.
(b) Payment Upon a Change of Control. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the Award vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested Payout Share Units underlying the Award from the Grant Date through the date of the Change of Control.
|
E.
|
PAYMENT OF THE AWARD
|
|
E.1
|
PAYMENT TIMING
|
Except as otherwise provided below, vested Payout Share Units that remain outstanding will be settled as soon as practicable following the applicable Final Award Date (and no later than (x) December 31st following the year of death, in the event of your death, or (y) March 15th following the year the Award vests).
|
E.2
|
FORM OF PAYMENT; AMOUNT
|
(a) Payment Generally. Except as provided in subsection (b) below, your Final Award will be settled at the time set forth in Section E.1 by delivery to you of that number of whole Shares equal to the number of Payout Share Units under your Final Award, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A.
(b) Payment On or After a Change of Control.
Upon vesting on or after a Change of Control, vested Payout Share Units will be settled at the time set forth in Section E.1 by payment to you of cash in an amount equal to that number of whole Shares equal to the number of vested Payout Share Units, multiplied by the then current Fair Market Value of a share of Common Stock on the date of the Change of Control (subject to any applicable adjustment pursuant to Section 2 of Appendix A), less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A. Related accrued Dividend Equivalent payments will be paid to you in cash as described in Section D.2(b).
No interest will be paid with respect to any such payments made pursuant to this Section E.
|
F.
|
RESTRICTIVE COVENANTS
|
Upon your acceptance of this Award, you shall become subject to the restrictive covenant provisions set forth in Section 1 of Appendix A.
|
G.
|
CLAWBACK
|
The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
|
|
|
|
1.
|
General Overview and Definitions
|
Performance-based vesting and payout of your Award is determined based on the level of satisfaction of three performance metrics during the Performance Period – two corporate performance metrics and one risk-related performance metric. These metrics are described in more detail in the paragraphs below.
“PNC” for purposes of this Appendix C as it refers to performance-based vesting conditions means the Corporation and its consolidated subsidiaries for financial reporting purposes.
Each performance metric will be measured or reviewed on an annual basis for each calendar year (i.e., calendar year 2020, calendar year 2021 and calendar year 2022) during the Performance Period (each, a “Performance Year”). A Performance Year may refer to a partial calendar year in certain limited circumstances (e.g., in connection with death or a Change of Control) as further described in this Appendix C.
The three performance metrics are:
1. Relative Average EPS Growth - Annual growth in earnings per share, measured for each Performance Year and then averaged for the Performance Period and compared to similar performance of other members of PNC’s Peer Group based on PNC’s percentile rank using a continuous percentile rank calculation (“Relative Average EPS Growth”), where for purposes of this definition:
a. “EPS” means the publicly-reported diluted earnings per share of PNC or other Peer Group members for the Performance Year, in each case as adjusted, on an after-tax basis, for the impact of the items set forth in paragraph 3 below (rounded to the nearest cent), and
b. “EPS Growth,” with respect to a given Performance Year, means the growth or decline in EPS achieved by PNC or other Peer Group members for that Performance Year as compared to EPS for the comparable period of the prior calendar year, expressed as a percentage (rounded to the nearest one-hundredth).
c. “Peer Group” refers to the Committee-determined peer group as of the Grant Date. Performance will be measured based on the Peer Group on the last day of the Performance Period, taking into account name changes and the elimination from the Peer Group of any members since the beginning of the Performance Period (e.g., due to consolidation or merger). In the event of a merger of two members of the Peer Group during the Performance Period, the financial information of the resulting new company will be compared to that of the acquiring member of the Peer Group (as determined on a corporate accounting basis.)
The Peer Group for this Award consists of the following members: PNC, Bank of America Corporation, Capital One Financial Corporation, Citizens Financial Group, Inc., Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, M&T Bank Corporation, Regions Financial Corporation, Truist Financial Corp., U.S. Bancorp, and Wells Fargo & Company
2. Average ROE - Annual return on equity (“ROE”), with specified adjustments as described in paragraph 3, measured for each Performance Year and then averaged for the Performance Period (“Average ROE”) and compared to specified performance targets established by the Committee.
3. CET1 Ratio - Whether PNC has met or exceeded the common equity Tier 1 capital spot ratio limit as then in effect and applicable to The PNC Financial Services Group, Inc. (“CET1 Ratio”) (which may be on a pro forma fully phased-in basis, if applicable) as set forth in PNC’s Enterprise Capital Management Policy (or any successor policy) and monitored at least quarterly.
All performance metrics, including any adjustments, will be determined on the basis of:
(x) with respect to PNC’s absolute performance, PNC’s internal financial information;
(y) with respect to PNC’s relative performance to other members of the Peer Group, either publicly-disclosed financial information or, in the case of PNC, internal financial information that is anticipated to be publicly disclosed in an upcoming filing with the SEC; and
(z) with respect to other members of the Peer Group, publicly-disclosed financial information,
in each case, only where such amounts can be reasonably determined as of the date immediately prior to the date the Committee makes its determination as to the size of the payout.
|
|
|
|
2.
|
Calculating Corporate Performance Metrics
|
(a) Calculating Average ROE. For each Performance Year, annual ROE (expressed as a percentage, rounded to the nearest one-hundredth) is calculated and adjusted for the items set forth in paragraph 3. At the end of the Performance Period, Average ROE is determined by calculating the average of PNC’s annual ROE for each Performance Year, then rounding to the nearest one-hundredth.
(b) Calculating Relative Average EPS Growth. Annual EPS Growth for PNC and each other member of the Peer Group is calculated for each Performance Year, adjusted for the items set forth in paragraph 3, expressed as a percentage and rounded to the nearest one-hundredth.
At the end of the Performance Period, the annual EPS Growth percentages for each Performance Year are averaged. PNC’s average EPS Growth is compared to the average of each other member of the Peer Group to determine PNC’s percentile rank, based on a continuous percentile rank calculation and expressed as a percentage (rounded to the nearest one-hundredth).
(c) Calculating the Corporate Performance Factor.
(i) Once the Average ROE and Relative Average EPS Growth are determined, a corporate performance factor, expressed as a percentage, is calculated using the table attached as Exhibit 1, applying bilinear interpolation and rounding to the nearest one-hundredth (such percentage, the “Corporate Performance Factor”). The Corporate Performance Factor will range from 0.00% to 150.00%. The Corporate Performance Factor may be adjusted by the Committee as described in paragraph 7.
(ii) In the event of your death or a Change of Control, the provisions of paragraph 8 will govern the calculation of the Corporate Performance Factor.
|
|
|
|
3.
|
Adjustments to Corporate Performance Metrics
|
For purposes of measuring (a) EPS Growth performance for PNC and other members of the Peer Group or (b) ROE for PNC, earnings or EPS performance results, as applicable, will be adjusted, on an after-tax basis, for the impact of any of the following where such impact occurs during a given Performance Year (or, if applicable, during the prior year comparison period for a given year):
• discontinued operations (as such term is used under GAAP);
• acquisition costs and merger integration costs;
• in PNC’s case, the net impact on PNC of significant gains or losses related to BlackRock transactions; and
• items resulting from a change in U.S. federal tax law, which includes one-time adjustments to U.S. federal tax law (i.e., benefits or losses associated with the revaluation of assets or liabilities due to a change in tax law), but does not include (i) any going-forward changes to run rate income as a result of a change in U.S. federal tax law, to the extent such going-forward changes are reasonably determinable, or (ii) benefits or losses realized from the resolution of certain outstanding tax matters (e.g., court decision that reverses an earlier tax position) or changes in a company’s organizational tax structure.
In the case of the EPS growth metric and the ROE performance metric, there will be an additional adjustment to add the amount disclosed as provision for credit losses (or the equivalent) and subtract the amount disclosed as total net charge-offs.
In the case of the EPS growth metric, the impact of any stock splits (whether in the form of a stock split or a stock dividend) may result in an additional adjustment.
Adjustments will be made if the impact of such events occurs during a Performance Year (or partial year, if applicable), or, for purposes of determining EPS Growth, during the prior year comparison period for a Performance Year.
The Committee may also take into account other unusual or nonrecurring adjustments (applied on a consistent basis) in determining the Final Award.
After-tax adjustments for PNC and, where applicable, other members of the Peer Group, will be calculated using the same methodology for making such adjustments on an after-tax basis.
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4.
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Applying the Risk Performance Metric
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(a) CET1 Ratio Generally. The Award is subject to one risk performance factor based on whether PNC has met or exceeded the CET1 Ratio as of the last day of each Performance Year. The current CET1 Ratio is 7.0%.
(b) Determination of Annual CET1 Ratio. As soon as practicable following the end of the Performance Period, PNC will present information to the Committee relating to (i) the CET1 Ratio compared to (ii) the actual CET1 Ratio achieved by PNC with respect to each Performance Year, based on PNC’s publicly reported financial results for the period ending on the applicable end date.
• If PNC meets or exceeds the CET1 Ratio for each Performance Year, the risk performance metric is satisfied.
• If PNC does not meet the CET1 Ratio for a Performance Year, 1/3 of the target number of PSUs are eligible for forfeiture on the Final Award Date. The Committee will conduct a final review and adjust the target number of PSUs accordingly as of the Final Award Date.
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5.
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Risk Performance Review Adjustment
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In addition, and independent from the CET1 Ratio performance metric described in paragraph 4 above, on or prior to the Final Award Date, the Committee has the discretion to conduct a risk performance review relating to a risk-related action of potentially material consequence to PNC.
If the Committee exercises its discretion to conduct a risk performance review, the Committee will review and determine if a downward adjustment for risk performance is appropriate. If so, the Committee will determine the size of the risk adjustment to the Corporate Performance Factor (including reducing such Corporate Performance Factor to zero.)
Any determination to conduct a risk performance review will be made shortly after the close of the Performance Period, but no later than the 45th day following the close of the Performance Period, and any required review will be conducted no later than the end of the first quarter following the close of the Performance Period.
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6.
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Committee Discretion
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Notwithstanding the levels of corporate and risk performance achieved by PNC, the Committee may use its discretion to reduce or increase the number of Payout Share Units (including a reduction to zero) as it deems equitable to maintain the intended economics of the Award in light of changed circumstances.
Such circumstances are limited to external events affecting PNC, its financial statements or members of its Peer Group that are substantially outside of PNC’s control and could not reasonably be planned for as of the Grant Date.
Discretion in Connection with a Change of Control. The Committee will have no discretion to adjust the calculated maximum Payout Share Units following a Change of Control or during a Change of Control Coverage Period. In the event (a) your termination of employment with PNC is an Anticipatory Termination, (b) a Change of Control is pending, and (c) the Committee-determined Final Award Date occurs prior to the Change of Control, the Committee will have no discretion to adjust your calculated maximum Payout Share Units under these circumstances.
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7.
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Calculation of Payout Share Units and Determination of Final Award
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Following the end of the Performance Period, the Committee reviews performance against the performance metrics and makes its determination as to the Final Award, as follows:
(1) Application of Risk Performance Metric - The Committee first determines whether or not to reduce the target number of PSUs under the Award, based on the application of the risk performance metric, as follows:
(a) If PNC has met or exceeded the CET1 Ratio for each Performance Year, there is no reduction in the number of target PSUs under the Award.
(b) If PNC has not met the CET1 Ratio for any Performance Year, then for each Performance Year the CET1 Ratio was not met, the Committee can elect to reduce the target number of PSUs by one-third.
(2) Committee Review of Performance Factor - Next, the Committee determines whether to approve the calculated Corporate Performance Factor, a lower percentage or a higher percentage based on application of any risk-related adjustment (described in paragraph 5) or other Committee discretion consistent with paragraph 6.
(3) Final Award Determination - Once the Committee approves the final Corporate Performance Factor, it applies this percentage to (x) the target number of PSUs (as reduced for any failure to meet the CET1 Ratio during the Performance Period), and rounds down to the nearest whole share unit. The resulting amount is the number of Payout Share Units that are eligible to vest and be settled on the Final Award Date (i.e., the Final Award). In no event can the size of the Final Award be greater than 150.00% of the target number of PSUs.
(4) Special Rules Regarding the Final Award Date – The Final Award will become vested and payable as of the Final Award Date, which term is defined in Appendix B. The Final Award Date is typically the date on which the Committee makes its determination as to the size of the payout to be paid out to you, but:
• In the event of a Change of Control, the amount of Payout Share Units will be calculated (as of the date of the Change of Control) as described in paragraph 8 below and determination of the Final Award will be made as soon as practicable after the Change of Control.
• In the event of your death (prior to a Change of Control), the amount of Payout Share Units will be calculated as described in paragraph 8 below as soon as practicable following the calendar year of your death. In the event of your death following a Change of Control, the Payout Share Units and the Final Award Date will be determined as described above.
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8.
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Determination of Payout Share Units Upon Death or a Change of Control
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Death
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Notwithstanding anything to the contrary in this Agreement, if your employment with PNC ceases by reason of your death (or if you die following a termination of employment with PNC due to Disability or Retirement or following an Anticipatory Termination), but prior to the Committee-determined Final Award Date, then the total number of Payout Share Units is calculated based on (a) target corporate performance for all Performance Years and (b) actual risk performance for the completed Performance Years and the Performance Year in which the date of death occurs, and no risk adjustments for any remaining years in the Performance Period. The amount of Payout Share Units is rounded down to the nearest whole share unit. This amount is not pro-rated, but remains subject to the Committee’s exercise of discretion.
If a Change of Control occurs after your death and in the same calendar year of your death (but prior to the time the Committee makes a Final Award determination), the Final Award will be calculated as described below under “Change of Control” as though you remained continuously employed with PNC as of the Change of Control.
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Change of Control
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Upon a Change of Control, the total number of Payout Share Units is calculated based on (a) target corporate performance for all Performance Years and (b) actual risk performance for the completed Performance Years, rounded down to the nearest whole share unit. For any remaining Performance Years (including the year of the Change of Control), if the CET1 Ratio was not met or exceeded as of the quarter-end immediately preceding the Change of Control, then for each Performance Year, one-third of the target number of PSUs will be forfeited and expire as of the Change of Control.
The Committee does not have discretion to adjust this amount of Payout Share Units.
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SERVICE-BASED VESTING REQUIREMENTS
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The Award is divided into three approximately equal portions that will satisfy the service-based vesting requirements ratably over three years (each portion, a “Tranche”) on three “Scheduled Vesting Dates”, as follows:
• the service-based vesting requirement for the first Tranche will be satisfied on the 1st anniversary of the Grant Date,
• the service-based vesting requirement for the second Tranche will be satisfied on the 2nd anniversary of the Grant Date, and
• the service-based vesting requirement for the third Tranche will be satisfied on the 3rd anniversary of the Grant Date;
in each case, provided you remain continuously employed by PNC through and including the applicable Scheduled Vesting Date (or such earlier date as prescribed by Section B.2 below).
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RISK PERFORMANCE-BASED VESTING REQUIREMENTS
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Provided the service-based vesting requirements have been met, each Tranche will vest on the applicable Scheduled Vesting Date upon satisfaction of the risk performance metric applicable to that Tranche, as set forth in Appendix C to this Agreement.
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B.2
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EFFECT OF TERMINATION OF EMPLOYMENT PRIOR TO SCHEDULED VESTING DATE(S) ON VESTING REQUIREMENTS
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RETIREMENT
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Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated due to your Retirement, and not for Cause, then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
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DISABILITY
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Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated by PNC due to your Disability, and not for Cause, then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
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C.2
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FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
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At any time prior to a Scheduled Vesting Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
Upon such determination, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
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D.
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DIVIDEND EQUIVALENTS
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D.1
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GENERALLY
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As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the final number of vested RSUs for each Tranche, in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control), as though you were the record holder of such RSUs, and such RSUs had been issued and outstanding shares on the Grant Date through the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control).
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D.2
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ACCRUED DIVIDEND EQUIVALENT PAYMENTS
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(a) Generally. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the applicable Tranche vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Tranche to which they relate. If the RSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled without payment of any consideration by PNC.
(b) Payment Upon a Change of Control. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the applicable Tranche vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested RSUs underlying such Tranche from the Grant Date through the date of the Change of Control.
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E.
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PAYMENT OF THE AWARD
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E.1
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PAYMENT TIMING
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Except as otherwise provided below, vested RSUs that remain outstanding will be settled as soon as practicable following (i) the applicable Scheduled Vesting Date (but no later than March 15th following the year the applicable Scheduled Vesting Date occurs), or (ii) your date of death, if your date of death is prior to the last Scheduled Vesting Date (but no later than December 31st of the year following the year of your death).
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E.2
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FORM OF PAYMENT; AMOUNT
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(a) Payment Generally.
Except as provided in subsection (b) below, vested RSUs will be settled at the time set forth in this Section E.1 by delivery to you of that number of whole Shares equal to the number of RSUs less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A.
(b) Payment On or After a Change of Control.
Upon vesting on or after a Change of Control, vested RSUs will be settled at the time set forth in Section E.1 by payment to you of cash in an amount equal to that number of whole Shares equal to the number of vested RSUs, multiplied by the then current Fair Market Value of a share of Common Stock on the date of the Change of Control (subject to any applicable adjustment pursuant to Section 2 of Appendix A), less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A. Related accrued Dividend Equivalent payments will be paid to you in cash as described in Section D.2(b).
No interest will be paid with respect to any such payments made pursuant to this Section E.
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F.
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RESTRICTIVE COVENANTS
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Upon your acceptance of this Award, you shall become subject to the restrictive covenant provisions set forth in Section 1 of Appendix A.
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G.
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CLAWBACK
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The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
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SERVICE-BASED VESTING REQUIREMENTS
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The Award is divided into three approximately equal portions that will satisfy the service-based vesting requirements ratably over three years (each portion, a “Tranche”) on three “Scheduled Vesting Dates”, as follows:
• the service-based vesting requirement for the first Tranche will be satisfied on the 1st anniversary of the Grant Date,
• the service-based vesting requirement for the second Tranche will be satisfied on the 2nd anniversary of the Grant Date, and
• the service-based vesting requirement for the third Tranche will be satisfied on the 3rd anniversary of the Grant Date;
in each case, provided you remain continuously employed by PNC through and including the applicable Scheduled Vesting Date (or such earlier date as prescribed by Section B.2 below).
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RISK PERFORMANCE-BASED VESTING REQUIREMENTS
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Provided the service-based vesting requirements have been met, each Tranche will vest on the applicable Scheduled Vesting Date upon satisfaction of the risk performance metric applicable to that Tranche, as set forth in Appendix C to this Agreement.
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B.2
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EFFECT OF TERMINATION OF EMPLOYMENT PRIOR TO SCHEDULED VESTING DATES ON VESTING REQUIREMENTS
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RETIREMENT
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Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated due to your Retirement, and not for Cause (as determined by a PNC Designated Person), then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
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DISABILITY
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Notwithstanding anything to the contrary in this Agreement, if your employment with PNC is terminated by PNC due to your Disability, and not for Cause (as determined by a PNC Designated Person), then the service-based vesting requirements of the Award will be satisfied as of your Termination Date, but the Award will not vest and become payable until the Scheduled Vesting Date(s), subject to satisfaction of the risk performance-based vesting requirements and your continued compliance with the terms and conditions of this Agreement.
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C.2
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FORFEITURE IN CONNECTION WITH DETRIMENTAL CONDUCT
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At any time prior to a Scheduled Vesting Date, to the extent that PNC (acting through a PNC Designated Person) determines in its sole discretion (a) that you have engaged in Detrimental Conduct and (b) to forfeit and cancel all or a specified portion of the outstanding Award as a result of such determination, then such portion will be forfeited and cancelled effective as of the date of such determination.
Upon such determination, neither you nor your successors, heirs, assigns or legal representatives will have any further rights or interest in the Award under this Agreement.
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D.
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DIVIDEND EQUIVALENTS
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D.1
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GENERALLY
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As of the Award Effective Date, you will be entitled to earn accrued cash Dividend Equivalents on the final number of vested RSUs for each Tranche, in an amount equal to the cash dividends that would have been paid (without interest or reinvestment) between the Grant Date and the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control), as though you were the record holder of such RSUs, and such RSUs had been issued and outstanding shares on the Grant Date through the Scheduled Vesting Date for that Tranche (or such earlier date in the event of your death or a Change of Control).
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D.2
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ACCRUED DIVIDEND EQUIVALENT PAYMENTS
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(a) Generally. Accrued Dividend Equivalents will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the applicable Tranche vests and pays out (at which point such Dividend Equivalents will terminate). Dividend Equivalents are subject to the same vesting requirements and payout size adjustments as the Tranche to which they relate. If the RSUs to which such Dividend Equivalents relate are forfeited and cancelled, such related Dividend Equivalents will also be forfeited and cancelled without payment of any consideration by PNC.
(b) Payment Upon a Change of Control. Accrual of Dividend Equivalents will cease as of the Change of Control. Upon a Change of Control, Dividend Equivalents accrued (without reinvestment or interest) between the Grant Date and the Change of Control will vest and be paid out in cash, less the payment of any applicable withholding taxes pursuant to Section 6 of Appendix A, if and when the applicable Tranche vests and pays out, as if you were the record holder of the number of Shares equal to the number of vested RSUs underlying such Tranche from the Grant Date through the date of the Change of Control.
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G.
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CLAWBACK
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The Award, and any right to receive and retain any Shares (if applicable), cash or other value pursuant to the Award, is subject to rescission, cancellation or recoupment, in whole or in part, if and to the extent so provided under the Corporation’s Incentive Compensation Adjustment and Clawback Policy, as in effect from time to time with respect to the Award, or any other applicable clawback, adjustment or similar policy in effect on or established after the Grant Date and to any clawback or recoupment that may be required by applicable law or regulation.
By accepting this Award, you agree that you are obligated to provide all assistance necessary to the Corporation to recover or recoup the Shares, cash or other value pursuant to the Award which are subject to recovery or recoupment pursuant to applicable law, government regulation, stock exchange listing requirement or PNC policy. Such assistance shall include completing any documentation necessary to recover or recoup the Shares, cash or other value pursuant to the Award from any accounts you maintain with PNC or any pending or future compensation.
A copy of the Incentive Compensation Adjustment and Clawback Policy is included in the materials distributed to you with this Agreement.
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1.
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I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of The PNC Financial Services Group, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ William S. Demchak
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William S. Demchak
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Chairman, President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of The PNC Financial Services Group, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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/s/ Robert Q. Reilly
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Robert Q. Reilly
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Executive Vice President and Chief Financial Officer
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/s/ William S. Demchak
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William S. Demchak
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Chairman, President and Chief Executive Officer
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/s/ Robert Q. Reilly
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Robert Q. Reilly
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Executive Vice President and Chief Financial Officer
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