The PNC Financial Services Group Inc.

02/20/2026 | Press release | Distributed by Public on 02/20/2026 12:55

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
EXECUTIVE SUMMARY
Key Strategic Goals
At PNC we manage our company for the long term. We are focused on the fundamentals of growing customers, loans, deposits and revenue and improving profitability, while investing for the future and managing risk, expenses and capital. We continue to invest in our products, markets and brand, and embrace our commitments to our customers, shareholders, employees and the communities where we do business.
We strive to serve our customers and expand and deepen relationships by offering a broad range of deposit, credit and fee-based products and services. We are focused on delivering those products and services to our customers with the goal of addressing their financial objectives and needs. Our business model is built on customer loyalty and engagement, understanding our customers' financial goals and offering our diverse products and services to help them achieve financial well-being. Our approach is concentrated on organically growing and deepening client relationships across our businesses that meet our risk/return measures.
We are focused on our strategic priorities, which are designed to enhance value over the long term, and consist of:
•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 create efficiencies that help us better serve customers.
Our capital and liquidity priorities are to support customers, fund business investments and return excess capital to shareholders, while maintaining appropriate capital and liquidity in light of economic conditions, the Basel III framework and other regulatory expectations. For more detail, see the Supervision and Regulation section in Item 1 Business, the Capital Highlights portion of this Executive Summary and the Liquidity and Capital Management portion of the Risk Management section in this Item 7.
Key Factors Affecting Financial Performance
We face a variety of risks that may impact various aspects of our risk profile from time to time. The extent of such impacts may vary depending on factors such as the current business and economic conditions, political and regulatory environment and operational challenges. Many of these risks and our risk management strategies are described in more detail elsewhere in this Report.
Our success will depend upon, among other things, the following factors that we manage or control:
•Effectively managing capital and liquidity including:
•Continuing to maintain and, over time, grow our deposit base as a low-cost stable funding source,
•Prudent liquidity and capital management to meet evolving regulatory capital, capital planning, stress testing and liquidity standards, and
•Actions we take within the capital and other financial markets,
•Execution of our strategic priorities,
•Management of credit risk in our portfolio,
•Our ability to manage and implement strategic business objectives within the changing regulatory environment,
•The impact of legal and regulatory-related contingencies,
•The appropriateness of critical accounting estimates and related contingencies, and
•Our ability to manage operational risks related to new products and services, changes in processes and procedures or the implementation of new technology.
Our financial performance is also substantially affected by a number of external factors outside of our control, including the following:
•Global and domestic economic conditions,
•The actions by the Federal Reserve, U.S. Treasury and other government agencies, including those that impact money supply and market interest rates and inflation,
•The level of, and direction, timing and magnitude of movement in, interest rates and the shape of the interest rate yield curve,
•The functioning and other performance of, and availability of liquidity in, U.S. and global financial markets,
•The impact of tariffs and other trade policies of the U.S. and its global trading partners,
•Changes in the competitive landscape,
•Impacts of changes in federal, state and local governmental policy, including on the regulatory landscape, capital markets, taxes, infrastructure spending and social programs,
•The impact of market credit spreads on asset valuations,
•The ability of customers, counterparties and issuers to perform in accordance with contractual terms,
32The PNC Financial Services Group, Inc. - 2025 Form 10-K
•Loan demand, utilization of credit commitments and standby letters of credit, and
•The impact on customers and changes in customer behavior due to changing business and economic conditions or regulatory or legislative initiatives.
For additional information on the risks we face, see Item 1A Risk Factors and the Cautionary Statement Regarding Forward-Looking Information section in this Item 7.
FDIC Special Assessment
In November 2023, the FDIC approved a final rule to implement a special assessment to recover the loss to the DIF associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank, subject to periodic adjustments based on the estimated total loss amount. In December 2025, the FDIC adopted an interim final rule allowing for potential offsets to assessments if the amount collected exceeds losses to the DIF. Based on these rules, PNC incurred pre-tax expenses of $515 million in 2023 and $112 million in 2024. Additionally, in 2025, PNC benefited from changes in the FDIC's expected losses which led to an accrual release of $60 million in the fourth quarter and $48 million in the third quarter, resulting in a $108 million accrual release for the full year. For additional information about the impact of the FDIC's special assessment, see the Supervision and Regulation section in Item 1 Business.
Second Quarter 2024 Significant Items
In the second quarter of 2024, PNC participated in the Visa exchange program, allowing PNC to convert its Visa Class B-1 common
shares into approximately equal amounts of Visa Class B-2 common shares and Visa Class C common shares. This conversion event
resulted in a gain of $754 million related to the Visa Class C common shares received. PNC retained the Visa Class B-2 common
shares. The second quarter of 2024 also included Visa Class B-2 derivative fair value adjustments of negative $116 million and a $120
million expense related to a PNC Foundation contribution. During the second quarter, PNC also repositioned the investment securities
portfolio, selling low-yielding investment securities for net proceeds of $3.8 billion, resulting in a loss of $497 million. PNC
redeployed the full proceeds from the sale into higher-yielding investment securities. The combined impact of all of these significant items on pre-tax noninterest income and pre-tax noninterest expense in the second quarter of 2024 was $141 million and $120 million, respectively.
Acquisition of FirstBank Holding Company
On January 5, 2026, PNC completed its acquisition of FirstBank Holding Company, including its banking subsidiary, FirstBank. As of close, FirstBank had $26.4 billion of assets, $16.0 billion of loans and $23.1 billion of deposits. Effective January 5, 2026, FirstBank's financial results are included in PNC's consolidated operations and will be reported in PNC's first quarter 2026 results. Conversion of FirstBank customers to PNC Bank is expected to occur this summer. Until conversion, FirstBank will remain a separate bank subsidiary of PNC. See Note 24 Subsequent Events for additional details on the acquisition of FirstBank.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 33
Selected Financial Data
The following tables include selected financial data which should be reviewed in conjunction with the Consolidated Financial Statements and Notes included in Item 8 of this Report as well as the other disclosures in this Report concerning our historical financial performance, our future prospects and the risks associated with our business and financial performance:
Table 1: Summary of Operations, Per Common Share Data and Performance Ratios
Year ended December 31
Dollars in millions, except per share data 2025 2024 2023
Summary of Operations
Net interest income $ 14,410 $ 13,499 $ 13,916
Noninterest income 8,689 8,056 7,574
Total revenue 23,099 21,555 21,490
Provision for credit losses 779 789 742
Noninterest expense 13,834 13,524 14,012
Income before income taxes and noncontrolling interests 8,486 7,242 6,736
Income taxes 1,489 1,289 1,089
Net income $ 6,997 $ 5,953 $ 5,647
Net income attributable to common shareholders $ 6,619 $ 5,529 $ 5,153
Per Common Share
Diluted earnings $ 16.59 $ 13.74 $ 12.79
Book value per common share $ 140.44 $ 122.94 $ 112.72
Tangible book value per common share (non-GAAP) (a) $ 112.51 $ 95.33 $ 85.08
Performance Ratios
Net interest margin (non-GAAP) (b) 2.83 % 2.66 % 2.76 %
Noninterest income to total revenue 38 % 37 % 35 %
Efficiency 60 % 63 % 65 %
Return on:
Average common shareholders' equity 12.90 % 11.92 % 12.35 %
Average assets 1.24 % 1.05 % 1.01 %
(a)See explanation and reconciliation of this non-GAAP measure in the Non-GAAP Financial Information section of this Item 7.
(b)See explanation and reconciliation of this non-GAAP measure in the Average Consolidated Balance Sheet and Net Interest Analysis and Non-GAAP Financial Information sections of this Item 7.
Table 2: Balance Sheet Highlights and Other Selected Ratios
December 31
Dollars in millions, except as noted 2025 2024
Balance Sheet Highlights
Assets $ 573,572 $ 560,038
Loans $ 331,481 $ 316,467
Allowance for loan and lease losses $ 4,410 $ 4,486
Interest-earning deposits with banks $ 32,936 $ 39,347
Investment securities $ 138,240 $ 139,732
Total deposits $ 440,866 $ 426,738
Borrowed funds $ 57,101 $ 61,673
Total shareholders' equity $ 60,585 $ 54,425
Common shareholders' equity $ 54,828 $ 48,676
Other Selected Ratios
Common equity tier 1 (a) 10.6 % 10.5 %
Dividend payout 39.8 % 45.9 %
Loans to deposits 75 % 74 %
Common shareholders' equity to total assets 9.6 % 8.7 %
Average common shareholders' equity to average assets 9.1 % 8.2 %
(a)The December 31, 2024ratio is calculated to reflect PNC's election to adopt the CECL optional five-year transition provisions.
34The PNC Financial Services Group, Inc. - 2025 Form 10-K
Income Statement Highlights
Net income for 2025 was $7.0 billion or $16.59 per diluted common share, an increase of $1.0 billion, or 18%, compared to net income of $6.0 billion, or $13.74 per diluted common share, for 2024. The increase was primarily due to higher net interest income and noninterest income, partially offset by higher noninterest expense.
•Total revenue increased $1.5 billion, or 7%, to $23.1 billion.
•Net interest income increased $0.9 billion, or 7%, to $14.4 billion and reflected lower funding costs, the continued benefit of fixed rate asset repricing and loan growth.
•Net interest margin increased to 2.83% for 2025 compared to 2.66% for 2024.
•Noninterest income increased $0.6 billion, or 8%, to $8.7 billion, primarily driven by growth in capital markets and advisory fees, card and cash management revenue and asset management and brokerage income.
•Provision for credit losses of $779 million for 2025 was driven by a net increase in the ACL, primarily due to commercial and industrial portfolio activity and changes to macroeconomic scenarios, partially offset by commercial real estate portfolio activity. Provision for credit losses was $789 million in 2024.
•Noninterest expense increased $310 million, or 2%, to $13.8 billion compared to 2024 driven by higher personnel costs, including higher variable compensation associated with increased business activity. These increases were partially offset by a decrease to other noninterest expense, primarily due to lower FDIC assessment expenses.
For additional detail, see the Consolidated Income Statement Review section of this Item 7.
Balance Sheet Highlights
Our balance sheet was well positioned at December 31, 2025. In comparison to December 31, 2024:
•Total assets increased primarily due to higher loan balances, partially offset by lower balances held with the FRB.
•Total loans increased $15.0 billion, or 5%, to $331.5 billion.
•Total commercial loans increased $16.3 billion, or 8%, to $232.5 billion, driven by growth in the commercial and industrial portfolio, reflecting new production, partially offset by lower commercial real estate loans.
•Total consumer loans decreased $1.3 billion, or 1%, to $99.0 billion, primarily due to lower residential real estate loans as paydowns outpaced originations, partially offset by growth in the auto loan portfolio.
•Investment securities decreased $1.5 billion, or 1%, to $138.2 billion, primarily due to net paydowns and maturities in the held-to-maturity portfolio, partially offset by net purchase activity in the available-for-sale portfolio.
•Interest-earning deposits with banks, primarily with the FRB, decreased $6.4 billion, or 16%, to $32.9 billion, primarily due to higher loan balances and lower borrowed funds, partially offset by higher deposits.
•Total deposits increased $14.1 billion, or 3%, to $440.9 billion, as higher interest-bearing deposits were partially offset by lower noninterest-bearing deposits. The increase in interest-bearing deposits was due to higher commercial and consumer deposits, partially offset by lower brokered time deposits. The decrease in noninterest-bearing deposits reflected lower commercial balances, partially offset by higher consumer balances.
•Borrowed funds of $57.1 billion decreased $4.6 billion, or 7%, primarily due to lower FHLB advances, partially offset by higher senior debt outstanding.
For additional detail, see the Consolidated Balance Sheet Review section of this Item 7.
Credit Quality Highlights
2025 reflected strong credit quality performance.
•At December 31, 2025 compared to December 31, 2024:
•The ACL related to loans, which consists of the ALLL and the allowance for unfunded lending related commitments, totaled $5.2 billion at both December 31, 2025 and 2024. ACL to total loans was 1.58% and 1.64% at December 31, 2025 and 2024, respectively.
•Overall loan delinquencies increased $61 million, or 4%, to $1.4 billion, as a result of higher commercial loan delinquencies, partially offset by lower consumer loan delinquencies.
•Nonperforming assets of $2.4 billion were stable.
•Net charge-offs of $0.7 billion or 0.23% of average loans in 2025 decreased $297 million compared to net charge-offs of $1.0 billion or 0.33% of average loans for 2024, reflecting lower commercial and consumer net loan charge-offs.
For additional detail, see the Credit Risk Management portion of the Risk Management section of this Item 7.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 35
Capital and Liquidity Highlights
We maintained strong capital and liquidity positions during 2025.
•Common shareholders' equity increased $6.2 billion to $54.8 billion at December 31, 2025, due to the benefit of net income and an improvement in AOCI, partially offset by common dividends paid and common share repurchases.
•In 2025, we returned $3.9 billion of capital to shareholders through dividends on common shares of more than $2.6 billion and repurchases of 6.8 million common shares for $1.2 billion.
•On January 5, 2026, the PNC Board of Directors declared a quarterly cash dividend on common stock of $1.70 per share paid on February 5, 2026 to shareholders of record at the close of business January 20, 2026.
•Our CET1 capital ratio increased to 10.6% at December 31, 2025 from 10.5% at December 31, 2024.
PNC's ability to take certain capital actions, including returning capital to shareholders, is subject to PNC meeting or exceeding an SCB established by the Federal Reserve Board in connection with the Federal Reserve Board's CCAR process. PNC's SCB for the four-quarter period beginning October 1, 2025 is the regulatory minimum of 2.5%. See additional discussion of the CCAR process in the Supervision and Regulation section of Item 1 Business and Item 1A Risk Factors of this Report and the Liquidity and Capital Management portion of the Risk Management section of this Item 7 for more detail on our 2025 capital and liquidity actions as well as our capital ratios.
Business Outlook
Statements regarding our business outlook are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking financial statements are subject, among other things, 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 views that:
•PNC's baseline forecast remains for continued expansion, but slower economic growth in 2026 than in 2024 and 2025. Tariffs remain a drag on consumer spending and business investment, while AI-related capex and wealth effects have been key supports to growth. Consumer spending growth is slowing to a pace more consistent with household income growth. The One Big Beautiful Bill will be a net positive for economic growth in 2026.
•The baseline forecast anticipates real GDP growth slowing to around 2% in 2026, with continued modest job gains and the unemployment rate at around 4.5%. Tariffs remain a risk to the outlook, and a reversal in sentiment around AI or a large decline in equity prices would be drags. Weaker labor force growth could lead to weaker long-run growth.
•Our baseline forecast is for the Federal Reserve to keep the federal funds rate unchanged in the first half of this year, in a range between 3.50% and 3.75%. We expect modest additional easing in the second half of the year with 25 basis points cuts at the FOMC meetings in July and September 2026, resulting in a federal funds rate in the range of 3.00% to 3.25% by the fall. However, there are two-sided risks to this outlook: (1) if inflation re-accelerates or proves more persistent than expected, the Federal Reserve may cut less or (2) if growth falters or recession emerges, easing could be deeper and more prolonged.
See Item 1A Risk Factors and the Cautionary Statement Regarding Forward-Looking Information section in this Item 7 for other factors that could cause future events to differ, perhaps materially, from those anticipated in these forward-looking statements.
For the full year 2026, compared to full year 2025, we expect:
•Average loans to be up approximately 8%,
•Net interest income to be up approximately 14%,
•Noninterest income to be up approximately 6%,
•Revenue to be up approximately 11%,
•Noninterest expense, excluding one-time integration costs, to be up approximately 7%, and
•The effective tax rate to be approximately 19.5%.
For the first quarter of 2026, compared to the fourth quarter of 2025, we expect:
•Average loans to be up approximately 5%,
•Net interest income to be up approximately 6%,
•Fee income to be down 1% to 2%,
•Other noninterest income to be between $150 million and $200 million,
•Revenue to be up 2% to 3%,
•Noninterest expense, excluding one-time integrations costs, to be up approximately 4%,
•Net loan charge-offs to be approximately $200 million, and
•Average diluted shares to be approximately 406 million.
We expect to incur non-recurring merger and integration costs of approximately $325 million, the majority of which we expect to be recognized in the first half of 2026.
36The PNC Financial Services Group, Inc. - 2025 Form 10-K
Noninterest income, revenue and other noninterest income guidance does not forecast net securities gains or losses or Visa activity. We are unable to provide a meaningful or accurate reconciliation of forward-looking non-GAAP measures, without unreasonable effort, to their most directly comparable GAAP financial measures. This is due to the inherent difficulty of forecasting the timing and amounts necessary for the reconciliation when such amounts are subject to events that cannot be reasonably predicted, as noted in our Cautionary Statement. Accordingly, we cannot address the probable significance of unavailable information.
CONSOLIDATEDINCOMESTATEMENTREVIEW
Our Consolidated Income Statement is presented in Item 8 of this Report. For the comparison of 2024 over 2023, see the Consolidated Income Statement Review section in our 2024 Form 10-K.
Net income for 2025 was $7.0 billion, or $16.59 per diluted common share, an increase of $1.0 billion, or 18%, compared to net income of $6.0 billion, or $13.74 per diluted common share, for 2024. The increase was primarily due to higher net interest income and noninterest income, partially offset by higher noninterest expense.
Net Interest Income
Table 3: Summarized Average Balances and Net Interest Income (a)
2025 2024
Year ended December 31
Dollars in millions 		Average
Balances 		Average
Yields/
Rates 		Interest
Income/
Expense 		Average
Balances 		Average
Yields/
Rates 		Interest
Income/
Expense
Assets
Interest-earning assets
Investment securities $ 142,697 3.29 % $ 4,694 $ 140,742 2.94 % $ 4,144
Loans 323,381 5.74 % 18,569 319,794 6.08 % 19,456
Interest-earning deposits with banks (b) 33,360 4.31 % 1,439 43,145 5.34 % 2,303
Other 13,245 5.45 % 722 9,135 6.70 % 612
Total interest-earning assets/interest income $ 512,683 4.96 % 25,424 $ 512,816 5.17 % 26,515
Liabilities
Interest-bearing liabilities
Interest-bearing deposits $ 335,529 2.23 % 7,497 $ 324,435 2.59 % 8,401
Borrowed funds 64,101 5.30 % 3,400 74,061 6.05 % 4,484
Total interest-bearing liabilities/interest expense $ 399,630 2.73 % 10,897 $ 398,496 3.23 % 12,885
Interest rate spread 2.23 % 1.94 %
Impact of noninterest-bearing sources 0.60 0.72
Net interest margin/income (non-GAAP) 2.83 % 14,527 2.66 % 13,630
Taxable-equivalent adjustments (117) (131)
Net interest income (GAAP) $ 14,410 $ 13,499
(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 Table 38 Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP) of this Item 7.
(b)Interest income from Interest-earning deposits with banks primarily includes interest earned on our balances held with the FRB and is reported as Other interest income on our Consolidated Income Statement.
Changes in net interest income and margin result from the interaction of the volume and composition of interest-earning assets and related yields, interest-bearing liabilities and related rates paid, and noninterest-bearing sources of funding. See the Average Consolidated Balance Sheet and Net Interest Analysis section of this Item 7 for additional information.
Net interest income increased $0.9 billion, or 7%, and net interest margin increased 17 basis points in 2025 compared with 2024 and reflected lower funding costs, the continued benefit of fixed rate asset repricing and loan growth.
Average investment securities increased $2.0 billion, or 1%, driven by net purchase activity of residential mortgage-backed securities and U.S. Treasury and government agency securities. Average investment securities represented 28% of average interest-earning assets in 2025 compared to 27% in 2024.
Average loans increased $3.6 billion, or 1%, primarily due to growth in commercial and industrial loans, partially offset by a decline in commercial and residential real estate loans. Average loans represented 63% of average interest-earning assets in 2025 compared to 62% in 2024.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 37
Average interest-earning deposits with banks decreased $9.8 billion, or 23%, primarily due to lower borrowed funds outstanding and increased loan balances, partially offset by higher deposit balances.
Average interest-bearing deposits increased $11.1 billion, or 3%, reflecting growth in commercial and consumer deposits, partially offset by lower brokered time deposits. In total, average interest-bearing deposits represented 84% of average interest-bearing liabilities in 2025 compared to 81% in 2024.
Average borrowed funds decreased $10.0 billion, or 13%, primarily due to lower FHLB advances, partially offset by higher senior debt outstanding.
Further details regarding average loans and deposits are included in the Business Segments Review section of this Item 7.
Noninterest Income
Table 4: Noninterest Income
Year ended December 31 Change
Dollars in millions 2025 2024 $ %
Noninterest income
Asset management and brokerage $ 1,597 $ 1,485 $ 112 8 %
Capital markets and advisory 1,548 1,250 298 24 %
Card and cash management 2,899 2,770 129 5 %
Lending and deposit services 1,310 1,259 51 4 %
Residential and commercial mortgage 571 581 (10) (2) %
Other income
Gain on Visa shares exchange program - 754 (754) *
Securities gains (losses) (9) (500) 491 *
Other 773 457 316 69 %
Total other income 764 711 53 7 %
Total noninterest income $ 8,689 $ 8,056 $ 633 8 %
*- Not Meaningful
Noninterest income as a percentage of total revenue was 38% for 2025 and 37% for 2024.
Asset management and brokerage fees increased reflecting the impact of higher average equity markets, higher annuity sales and net inflows. PNC's discretionary client assets under management increased to $234 billion at December 31, 2025 compared to $211 billion at December 31, 2024, primarily due to higher spot equity markets and net inflows. Capital markets and advisory fees increased primarily due to higher merger and acquisition advisory activity and increased trading revenue. Card and cash management revenue growth was driven by higher treasury management fees and increased credit card and debit card revenue. Lending and deposit services grew as a result of increased customer activity and growth in consumer checking accounts. Residential and commercial mortgage decreased due to lower residential mortgage revenue, partially offset by higher commercial mortgage revenue.
Other noninterest income increased reflecting lower negative Visa derivative adjustments and higher private equity revenue. Visa derivative adjustments were negative $114 million in 2025, primarily related to litigation escrow funding, compared to negative $274 million in 2024. Other noninterest income in 2024 included a $754 million gain resulting from PNC's participation in the Visa exchange program and a $497 million loss related to the repositioning of our investment securities portfolio.
Further details regarding our customer-related trading activities are included in the Market Risk Management - Customer-Related Trading Risk portion of the Risk Management section of this Item 7. Further details regarding private and other equity investments are included in the Market Risk Management - Equity and Other Investment Risk section.
38The PNC Financial Services Group, Inc. - 2025 Form 10-K
Noninterest Expense
Table 5: Noninterest Expense
Year ended December 31 Change
Dollars in millions 2025 2024 $ %
Noninterest expense
Personnel $ 7,782 $ 7,302 $ 480 7 %
Occupancy 962 954 8 1 %
Equipment 1,606 1,527 79 5 %
Marketing 378 362 16 4 %
Other 3,106 3,379 (273) (8) %
Total noninterest expense $ 13,834 $ 13,524 $ 310 2 %
Noninterest expense increased compared to 2024, driven by higher personnel costs, including higher variable compensation associated with increased business activity. These increases were partially offset by a decrease to other noninterest expense, primarily due to lower FDIC assessment expenses. Other noninterest expense in 2025 included a $108 million accrual release related to the FDIC's special assessment. Other noninterest expense in 2024 included a $120 million PNC Foundation contribution expense in the second quarter and $112 million in costs related to the FDIC's special assessment. Noninterest expense in 2024 also included $97 million of impairments in the fourth quarter, primarily related to technology investments.
We exceeded our 2025 continuous improvement program savings goal of $350 million. Our goal for 2026 is $350 million.
Effective Income Tax Rate
The effective income tax rate was 17.5% for 2025 compared with 17.8% for 2024. Both periods included the favorable resolution of certain tax matters.
The effective tax rate is generally lower than the statutory rate primarily due to tax credits we receive from our investments in low- income housing and new markets investments, as well as earnings on other tax exempt investments. Additional information regarding our effective tax rate is included in the Reconciliation of Statutory and Effective Tax Rates table in Note 18 Income Taxes.
Provision for Credit Losses
Table 6: Provision for Credit Losses
Year ended December 31
Dollars in millions 2025 2024
Provision for (recapture of) credit losses
Loans and leases $ 660 $ 741
Unfunded lending related commitments 97 56
Investment securities 1 (10)
Other financial assets 21 2
Total provision for credit losses $ 779 $ 789
Provision for credit losses of $779 million for 2025 was driven by a net increase in the ACL, primarily due to commercial and industrial portfolio activity and changes to macroeconomic scenarios, partially offset by commercial real estate portfolio activity.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 39
CONSOLIDATEDBALANCESHEETREVIEW
The summarized balance sheet data in Table 7 is based upon our Consolidated Balance Sheet in Item 8 of this Report. For additional detail of the comparison of 2024 over 2023, see the Consolidated Balance Sheet Review section in our 2024 Form 10-K.
Table 7: Summarized Balance Sheet Data
December 31 December 31 Change
Dollars in millions 2025 2024 $ %
Assets
Interest-earning deposits with banks $ 32,936 $ 39,347 $ (6,411) (16) %
Loans held for sale 1,939 850 1,089 128 %
Investment securities 138,240 139,732 (1,492) (1) %
Loans 331,481 316,467 15,014 5 %
Allowance for loan and lease losses (4,410) (4,486) 76 2 %
Mortgage servicing rights 3,659 3,711 (52) (1) %
Goodwill 10,959 10,932 27 - %
Other 58,768 53,485 5,283 10 %
Total assets $ 573,572 $ 560,038 $ 13,534 2 %
Liabilities
Deposits $ 440,866 $ 426,738 $ 14,128 3 %
Borrowed funds 57,101 61,673 (4,572) (7) %
Allowance for unfunded lending related commitments 818 719 99 14 %
Other 14,151 16,439 (2,288) (14) %
Total liabilities 512,936 505,569 7,367 1 %
Equity
Total shareholders' equity 60,585 54,425 6,160 11 %
Noncontrolling interests 51 44 7 16 %
Total equity 60,636 54,469 6,167 11 %
Total liabilities and equity $ 573,572 $ 560,038 $ 13,534 2 %
Our balance sheet was well positioned at December 31, 2025. In comparison to December 31, 2024:
•Total assets increased primarily due to higher loan balances, partially offset by lower balances held with the FRB.
•Total liabilities increased driven by higher deposit balances, partially offset by lower borrowed funds.
•Total equity increased due to the benefit of net income and an improvement in AOCI, partially offset by dividends paid and common shares repurchased.
The following discussion provides additional information about the major components of our balance sheet. Information regarding our ACL related to total loans is included in the Credit Risk Management section and Critical Accounting Estimates and Judgments section of this Item 7, Note 1 Accounting Policies and Note 3 Loans and Related Allowance for Credit Losses. Information regarding our capital and regulatory compliance is included in the Liquidity and Capital Management portion of the Risk Management section of this Item 7 and in Note 19 Regulatory Matters.
40The PNC Financial Services Group, Inc. - 2025 Form 10-K
Loans
Table 8: Loans
December 31 December 31 Change
Dollars in millions 2025 2024 $ %
Commercial
Commercial and industrial $ 195,723 $ 175,790 $ 19,933 11 %
Commercial real estate 29,565 33,619 (4,054) (12) %
Equipment lease financing 7,175 6,755 420 6 %
Total commercial 232,463 216,164 16,299 8 %
Consumer
Residential real estate 43,760 46,415 (2,655) (6) %
Home equity 25,941 25,991 (50) - %
Automobile 16,591 15,355 1,236 8 %
Credit card 7,014 6,879 135 2 %
Education 1,468 1,636 (168) (10) %
Other consumer 4,244 4,027 217 5 %
Total consumer 99,018 100,303 (1,285) (1) %
Total loans $ 331,481 $ 316,467 $ 15,014 5 %
Commercial loans increased driven by growth in the commercial and industrial portfolio, reflecting new production, partially offset by lower commercial real estate loans.
Consumer loans decreased primarily due to lower residential real estate loans as paydowns outpaced originations, partially offset by growth in the auto loan portfolio.
For additional information regarding our loan portfolio, see the Credit Risk Management portion of the Risk Management section, Note 1 Accounting Policies and Note 3 Loans and Related Allowance for Credit Losses.
Investment Securities
Investment securities of $138.2 billion at December 31, 2025 decreased $1.5 billion, or 1%, compared to December 31, 2024 primarily due to net paydowns and maturities in the held-to-maturity portfolio, partially offset by net purchase activity in the available-for-sale portfolio.
The level and composition of the investment securities portfolio fluctuates over time based on many factors, including market conditions, loan and deposit growth and balance sheet management activities. We manage our investment securities portfolio to optimize returns, while providing a reliable source of liquidity for our banking and other activities, considering the LCR, NSFR and other internal and external guidelines and constraints.
Table 9: Investment Securities (a)
December 31, 2025 December 31, 2024
Dollars in millions Amortized
Cost (b) 		Fair
Value 		Amortized
Cost (b) 		Fair
Value
U.S. Treasury and government agencies $ 50,559 $ 50,141 $ 53,382 $ 52,075
Agency residential mortgage-backed 75,028 71,386 73,760 67,117
Non-agency residential mortgage-backed 664 759 744 822
Agency commercial mortgage-backed 4,486 4,472 3,032 2,875
Non-agency commercial mortgage-backed (c) 584 582 1,542 1,523
Asset-backed (d) 4,087 4,177 5,733 5,793
Other debt (e) 4,594 4,597 4,998 4,892
Total investment securities (f) $ 140,002 $ 136,114 $ 143,191 $ 135,097
(a)Of our total securities portfolio, 97% were rated AAA/AA at both December 31, 2025 and 2024.
(b)Amortized cost is presented net of the allowance for investment securities, which totaled $66 million at December 31, 2025 and primarily related to non-agency commercial mortgage-backed securities. The comparable amount at December 31, 2024 was $91 million.
(c)Collateralized primarily by multifamily housing, office buildings, retail properties, lodging properties and industrial properties.
(d)Collateralized primarily by consumer credit products, corporate debt and government guaranteed education loans.
(e)Includes state and municipal securities and corporate bonds.
(f)Includes available-for-sale and held-to-maturity securities, which are recorded on our balance sheet at fair value and amortized cost, respectively.
Table 9 presents our investment securities portfolio by amortized cost and fair value. The difference between fair value and amortized cost at December 31, 2025 primarily reflected the impact of interest rate changes on the valuation of fixed-rate securities. We
The PNC Financial Services Group, Inc. - 2025 Form 10-K 41
continually monitor the credit risk in our portfolio and maintain the allowance for investment securities at an appropriate level to absorb expected credit losses on our investment securities portfolio for the remaining contractual term of the securities adjusted for expected prepayments. See Note 2 Investment Securities for additional details regarding the allowance for investment securities.
The duration of investment securities was 3.5 years at both December 31, 2025 and 2024. We estimate that at December 31, 2025 the effective duration of investment securities was 3.5 years for an immediate 50 basis points parallel increase in interest rates and 3.4 years for an immediate 50 basis points parallel decrease in interest rates. Comparable amounts at December 31, 2024 for the effective duration of investment securities were 3.4 years and 3.5 years, respectively.
Based on expected prepayment speeds, the weighted-average expected maturity of the investment securities portfolio was 5.2 years and 5.3 years at December 31, 2025 and 2024, respectively.
Table 10: Weighted-Average Expected Maturities of Mortgage and Asset-Backed Debt Securities
December 31, 2025 Years
Agency residential mortgage-backed 6.6
Non-agency residential mortgage-backed 9.8
Agency commercial mortgage-backed 4.0
Non-agency commercial mortgage-backed 0.6
Asset-backed 1.9
Additional information regarding our investment securities portfolio is included in Note 2 Investment Securities and Note 14 Fair Value.
Funding Sources
Table 11: Details of Funding Sources
December 31 December 31 Change
Dollars in millions 2025 2024 $ %
Deposits
Noninterest-bearing $ 91,748 $ 92,641 $ (893) (1) %
Interest-bearing
Money market 79,334 73,801 5,533 7 %
Demand 137,469 128,810 8,659 7 %
Savings 98,312 97,147 1,165 1 %
Time deposits (a) 34,003 34,339 (336) (1) %
Total interest-bearing deposits 349,118 334,097 15,021 4 %
Total deposits 440,866 426,738 14,128 3 %
Borrowed funds
Federal Home Loan Bank advances 13,000 22,000 (9,000) (41) %
Senior debt 38,642 32,497 6,145 19 %
Subordinated debt 3,016 4,104 (1,088) (27) %
Other 2,443 3,072 (629) (20) %
Total borrowed funds 57,101 61,673 (4,572) (7) %
Total funding sources $ 497,967 $ 488,411 $ 9,556 2 %
(a) Includes $3.6 billion of certain brokered time deposits accounted for under the fair value option at December 31, 2025.
Deposits are considered an attractive source of funding due to their stability and relatively low cost to fund. Compared to December 31, 2024, our funding source composition included higher deposit balances partially offset by lower borrowed funds, primarily related to decreased FHLB advances. This shift in composition contributed to the decrease in funding costs for the year ended December 31, 2025 compared to the same period in 2024.
Total deposits increased compared to December 31, 2024 as higher interest-bearing deposits were partially offset by lower noninterest-bearing deposits. The increase in interest-bearing deposits was due to higher commercial and consumer deposits, partially offset by lower brokered time deposits. The decrease in noninterest-bearing deposits reflected lower commercial balances, partially offset by higher consumer balances. Our total brokered deposit balances of $5.1 billion at December 31, 2025 and $7.3 billion at December 31, 2024, were significantly below both our internal and regulatory guidelines and limits.
Borrowed funds decreased primarily due to lower FHLB advances, partially offset by higher senior debt outstanding.
42The PNC Financial Services Group, Inc. - 2025 Form 10-K
The level and composition of borrowed funds fluctuates over time based on many factors, including market conditions, capital considerations, and funding needs, which are primarily driven by changes in loan, deposit and investment securities balances. While our largest source of liquidity on a consolidated basis is the customer deposit base generated by our banking businesses, we also manage our borrowed funds to provide a reliable source of liquidity for our banking and other activities, considering our LCR and NSFR requirements and other internal and external guidelines and constraints. See the Supervision and Regulation section of Item 1 Business, the Liquidity and Capital Management portion of the Risk Management section of this Item 7 and Note 19 Regulatory Matters for additional information regarding our 2025 liquidity and capital activities. See Note 9 Borrowed Funds for additional information related to our borrowings. See the Average Consolidated Balance Sheet and Net Interest Analysis and Analysis of Year-to-Year Changes in Net Interest Income sections of this Item 7 for additional information on year-over-year volume and related funding cost changes.
Shareholders' Equity
Total shareholders' equity of $60.6 billion at December 31, 2025 increased $6.2 billion compared to December 31, 2024, primarily due to the benefit of net income of $7.0 billion and an improvement in AOCI of $3.2 billion, partially offset by dividends paid of $3.0 billion and common share repurchases of $1.2 billion.
BUSINESSSEGMENTSREVIEW
We have three reportable business segments: Retail Banking, Corporate & Institutional Banking and the Asset Management Group. Our reportable business segments are defined by the nature of products and services, types of customers, methods used to distribute products or provide services and similar financial performance.
Total business segment financial results differ from our consolidated reporting due to the remaining corporate operations, or other activities, that do not meet the criteria for disclosure as a separate reportable business. These other activities include residual activities such as asset and liability management activities including net securities gains or losses, ACL for investment securities, certain trading activities, certain runoff consumer loan portfolios, private equity investments, intercompany eliminations, corporate overhead net of allocations, tax adjustments that are not allocated to business segments, exited businesses and the residual impact from FTP operations. See Table 119 in Note 22 Segment Reporting for additional information.
Certain amounts included in this Business Segments Review differ from those amounts shown in Note 22, primarily due to the presentation in this Financial Review of business net interest income on a taxable-equivalent basis.
See Note 22 Segment Reporting for additional information on our business segments, including a description of each business.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 43
Retail Banking
Retail Banking's core strategy is to build lifelong, primary relationships by creating a sense of financial well-being and ease for our clients. Over time, we seek to deepen those relationships by meeting the broad range of our clients' financial needs across savings, liquidity, lending, payments, investment and retirement solutions. We work to deliver these solutions in the most seamless and efficient way possible, meeting our customers where they are-whether in a branch, through digital channels, at an ATM or through our phone-based customer contact centers-while continuously optimizing the cost to sell and service. We believe that, over time, we can grow our customer base, enhance the breadth and depth of our client relationships and improve our efficiency through differentiated products and leading digital channels.
Table 12: Retail Banking Table
(Unaudited)
Year ended December 31 Change
Dollars in millions, except as noted 2025 2024 $ %
Income Statement
Net interest income (a)(b) $ 11,815 $ 10,965 $ 850 8 %
Noninterest income 3,048 3,582 (534) (15) %
Total revenue (a)(b) 14,863 14,547 316 2 %
Provision for credit losses 532 362 170 47 %
Noninterest expense (c)
Personnel 2,141 2,149 (8) - %
Segment allocations (d) 3,944 3,774 170 5 %
Depreciation and amortization 365 300 65 22 %
Other (e) 1,260 1,307 (47) (4) %
Total noninterest expense 7,710 7,530 180 2 %
Pre-tax earnings (a)(b) 6,621 6,655 (34) (1) %
Income taxes (a)(b) 1,541 1,553 (12) (1) %
Noncontrolling interests 35 39 (4) (10) %
Earnings (a)(b) $ 5,045 $ 5,063 $ (18) - %
Average Balance Sheet
Loans held for sale $ 804 $ 746 $ 58 8 %
Loans (a)
Consumer
Residential real estate $ 34,299 $ 36,099 $ (1,800) (5) %
Home equity 24,551 24,587 (36) - %
Automobile 15,858 14,960 898 6 %
Credit card 6,592 6,838 (246) (4) %
Education 1,568 1,787 (219) (12) %
Other consumer 1,780 1,763 17 1 %
Total consumer 84,648 86,034 (1,386) (2) %
Commercial 12,629 12,781 (152) (1) %
Total loans $ 97,277 $ 98,815 $ (1,538) (2) %
Total assets (a) $ 114,263 $ 116,842 $ (2,579) (2) %
Deposits (a)
Noninterest-bearing $ 52,101 $ 53,143 $ (1,042) (2) %
Interest-bearing (b) 190,841 186,740 4,101 2 %
Total deposits $ 242,942 $ 239,883 $ 3,059 1 %
Performance Ratios (a)(b)
Return on average assets 4.42 % 4.33 %
Noninterest income to total revenue 21 % 25 %
Efficiency 52 % 52 %
(continued on following page)
44The PNC Financial Services Group, Inc. - 2025 Form 10-K
(Continued from previous page)
Year ended December 31 Change
Dollars in millions, except as noted 2025 2024 $ %
Supplemental Noninterest Income Information
Asset management and brokerage $ 611 $ 552 $ 59 11 %
Card and cash management $ 1,286 $ 1,263 $ 23 2 %
Lending and deposit services $ 772 $ 744 $ 28 4 %
Residential and commercial mortgage $ 293 $ 342 $ (49) (14) %
Other income - Gain on Visa shares exchange program $ - $ 754 $ (754) *
Residential Mortgage Information
Residential mortgage servicing statistics (f)
Serviced portfolio balance (in billions) (g) $ 198 $ 197 $ 1 1 %
MSR asset value (g) $ 2,638 $ 2,626 $ 12 - %
Servicing income:
Servicing fees, net (h) $ 254 $ 287 $ (33) (11) %
Mortgage servicing rights valuation, net of economic hedge $ 11 $ 5 $ 6 120 %
Residential mortgage loan statistics
Loan origination volume (in billions) $ 5.8 $ 6.4 $ (0.6) (9) %
Loan sale margin percentage 1.32 % 1.76 %
Other Information
Credit-related statistics
Nonperforming assets (g) $ 840 $ 848 $ (8) (1) %
Net charge-offs - loans and leases $ 506 $ 570 $ (64) (11) %
Other statistics
Branches (g)(i) 2,224 2,234 (10) - %
Brokerage account client assets (in billions) (g)(j) $ 91 $ 84 $ 7 8 %
*- Not Meaningful
(a)During the second quarter of 2025, certain loans and deposits, and the associated income statement impact, were transferred from the Asset Management Group to Retail Banking to better align products and services with the appropriate business segment. Prior periods have been adjusted to conform with the current presentation.
(b)During the second quarter of 2025, brokered time deposits, and the associated income statement impact, were reclassified from Retail Banking to other activities, reflecting their use for asset and liability management. Prior periods have been adjusted to conform with the current presentation.
(c)As a result of an organizational realignment, certain expenses were reclassified as corporate operations and were moved from Retail Banking to other activities during the second quarter of 2025. Prior periods have been adjusted to conform with the current presentation.
(d)Represents expense allocations for corporate overhead services used by each business segment; primarily comprised of technology, human resources and occupancy-related allocations.
(e)Other is primarily comprised of other direct expenses including outside services and equipment expense. Amounts for 2024 also include asset impairments primarily related to technology investments.
(f)Represents mortgage loan servicing balances for third parties and the related income.
(g)As of December 31.
(h)Servicing fees net of impact of decrease in MSR value due to passage of time, which includes the impact from regularly scheduled loan principal payments, prepayments and loans paid off during the period.
(i)Reflects all branches excluding standalone mortgage offices and satellite offices (e.g., drive-ups, electronic branches and retirement centers) that provide limited products and/or services.
(j)Includes cash and money market balances.
Retail Banking earnings were stable in 2025 compared with 2024 as lower noninterest income, higher noninterest expense and higher provision for credit losses, was offset by an increase in net interest income.
Net interest income increased in the comparison due to wider interest rate spreads on the value of deposits.
Noninterest income decreased in the comparison driven by a gain of $754 million from the Visa exchange program that occurred in the second quarter of 2024 and lower residential mortgage fees, partially offset by lower negative Visa derivative adjustments and increased business activity.
Provision for credit losses primarily reflected portfolio activity.
Noninterest expense increased in the comparison primarily due to technology investments and higher marketing spend.
Retail Banking average total loans decreased in 2025 compared to 2024. Average consumer loans decreased as growth in the automobile portfolio was more than offset by lower residential real estate, as a result of paydowns outpacing new volume, lower credit card loan balances, and continued declines in education loans. Average commercial loans, primarily consisting of business banking loans, were stable in the comparison.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 45
Our focus on growing primary customer relationships is at the core of our deposit strategy in Retail, which is based on attracting and retaining stable, low-cost deposits as a key funding source for PNC. We have taken a disciplined approach to pricing, focused on retaining relationship-based balances and executing on targeted deposit growth and retention strategies aimed at more rate-sensitive customers. Our goal with regard to deposits is to optimize balances, economics and long-term customer growth. In 2025, average total deposits increased compared to 2024, driven by higher consumer time deposits.
Retail Banking continues to enhance the customer experience with refinements to product and service offerings that drive value for consumers and small businesses. As part of our strategic focus on growing customers and meeting their financial needs, we operate and continue to optimize a coast-to-coast network of retail branches and ATMs, which are complemented by PNC's suite of digital capabilities. In 2024, PNC announced it would be investing approximately $1.5 billion, over the next five years, to open more than 200 new branches in key locations, including Atlanta, Austin, Charlotte, Dallas, Denver, Houston, Miami, Orlando, Phoenix, Raleigh, San Antonio, and Tampa, while completing renovations of 1,400 existing locations across the country during the same time period. Additionally, in the fourth quarter of 2025, PNC announced that it was increasing the investment by $0.5 billion, to open an additional 100 branches in markets including Nashville, Chicago, Sarasota, and Winston-Salem and re-affirmed plans to complete the renovation of 100% of the branch network by 2029.
Corporate & Institutional Banking
Corporate & Institutional Banking's strategy is to be the leading relationship-based provider of traditional banking products and services to its customers through the economic cycles. We aim to grow our market share and drive higher returns by delivering value-added solutions that help our clients better run their organizations, all while maintaining prudent risk and expense management. We continue to focus on building client relationships where the risk-return profile is attractive. We are a coast-to-coast franchise and our full suite of commercial products and services is offered nationally.
Table 13: Corporate & Institutional Banking Table
(Unaudited)
Year ended December 31 Change
Dollars in millions 2025 2024 $ %
Income Statement
Net interest income $ 6,983 $ 6,412 $ 571 9 %
Noninterest income 4,342 3,927 415 11 %
Total revenue 11,325 10,339 986 10 %
Provision for credit losses 291 453 (162) (36) %
Noninterest expense
Personnel 1,621 1,508 113 7 %
Segment allocations (a) 1,573 1,497 76 5 %
Depreciation and amortization 201 202 (1) - %
Other (b) 594 557 37 7 %
Total noninterest expense 3,989 3,764 225 6 %
Pre-tax earnings 7,045 6,122 923 15 %
Income taxes 1,579 1,374 205 15 %
Noncontrolling interests 20 19 1 5 %
Earnings $ 5,446 $ 4,729 $ 717 15 %
Average Balance Sheet
Loans held for sale $ 590 $ 384 $ 206 54 %
Loans
Commercial
Commercial and industrial $ 172,058 $ 163,220 $ 8,838 5 %
Commercial real estate 30,620 34,208 (3,588) (10) %
Equipment lease financing 6,839 6,556 283 4 %
Total commercial 209,517 203,984 5,533 3 %
Consumer 3 3 - - %
Total loans $ 209,520 $ 203,987 $ 5,533 3 %
Total assets $ 235,289 $ 228,349 $ 6,940 3 %
Deposits
Noninterest-bearing $ 39,686 $ 42,081 $ (2,395) (6) %
Interest-bearing 113,720 102,931 10,789 10 %
Total deposits $ 153,406 $ 145,012 $ 8,394 6 %
Performance Ratios
Return on average assets 2.31 % 2.07 %
Noninterest income to total revenue 38 % 38 %
Efficiency 35 % 36 %
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46The PNC Financial Services Group, Inc. - 2025 Form 10-K
(Continued from previous page)
(Unaudited)
Year ended December 31 Change
Dollars in millions 2025 2024 $ %
Other Information
Consolidated revenue from: (c)
Treasury Management (d) $ 4,443 $ 3,922 $ 521 13 %
Commercial mortgage banking activities:
Commercial mortgage loans held for sale (e) $ 107 $ 81 $ 26 32 %
Commercial mortgage loan servicing income (f) 446 353 93 26 %
Commercial mortgage servicing rights valuation, net of economic hedge 159 147 12 8 %
Total $ 712 $ 581 $ 131 23 %
Commercial mortgage servicing statistics
Serviced portfolio balance (in billions) (g) (h) $ 294 $ 290 $ 4 1 %
MSR asset value (g) $ 1,021 $ 1,085 $ (64) (6) %
Average loans by C&IB business
Corporate Banking $ 124,484 $ 116,494 $ 7,990 7 %
Real Estate 42,121 46,061 (3,940) (9) %
Business Credit 31,647 29,690 1,957 7 %
Commercial Banking 7,196 7,450 (254) (3) %
Other 4,072 4,292 (220) (5) %
Total average loans $ 209,520 $ 203,987 $ 5,533 3 %
Credit-related statistics
Nonperforming assets (g) $ 1,375 $ 1,368 $ 7 1 %
Net charge-offs - loans and leases $ 249 $ 484 $ (235) (49) %
(a)Represents expense allocations for corporate overhead services used by each business segment; primarily comprised of technology, human resources and occupancy-related allocations.
(b)Other is primarily comprised of other direct expenses including outside services and equipment expense.
(c)See the additional revenue discussion regarding treasury management and commercial mortgage banking activities in the Product Revenue section of this Corporate & Institutional Banking section.
(d)Amounts are reported in net interest income and noninterest income.
(e)Represents commercial mortgage banking income for valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, origination fees, gains on sale of loans held for sale and net interest income on loans held for sale.
(f)Represents net interest income and noninterest income from loan servicing, net of reduction in commercial mortgage servicing rights due to time and payoffs. Commercial mortgage servicing rights valuation, net of economic hedge is shown separately.
(g)As of December 31.
(h)Represents balances related to capitalized servicing.
Corporate & Institutional Banking earnings increased $717 million in 2025 compared with 2024 driven by higher revenue and a lower provision for credit losses, partially offset by higher noninterest expense.
Net interest income increased in the comparison primarily due to wider interest rate spreads on the value of deposits and higher average deposit and loan balances, partially offset by narrower interest rate spreads on the value of loans.
Noninterest income increased in the comparison and reflected growth across all categories.
Provision for credit losses was driven by a net increase in the ACL, primarily due to commercial and industrial portfolio activity and changes to macroeconomic scenarios, partially offset by commercial real estate portfolio activity.
Noninterest expense increased in the comparison primarily due to continued investments to support business growth and higher variable compensation associated with increased business activity.
Average loans increased compared with 2024:
•Corporate Banking provides lending, equipment finance, treasury management and capital markets products and services to
mid-sized and large corporations, and government and not-for-profit entities. Average loans for this business increased reflecting new production, partially offset by lower average utilization of loan commitments.
•Real Estate provides banking, financing, servicing and technology solutions for commercial real estate clients across the country. Average loans for this business declined largely due to paydowns outpacing new production and lower average utilization of loan commitments.
•Business Credit provides asset-based lending and equipment financing solutions. The loan and lease portfolio is mainly secured by business assets. Average loans for this business increased reflecting a higher average utilization of loan commitments and new production.
•Commercial Banking provides lending, treasury management and capital markets products and services to smaller corporations and businesses. Average loans for this business declined driven by paydowns outpacing new production and lower average utilization of loan commitments.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 47
The deposit strategy of Corporate & Institutional Banking is to remain disciplined on pricing and focused on growing and retaining relationship-based balances over time, executing on customer and segment-specific deposit growth strategies and continuing to provide funding and liquidity to PNC. Average total deposits increased in 2025 compared to 2024, due to growth in interest-bearing deposits, partially offset by lower noninterest-bearing deposits. We continue to actively monitor the interest rate environment and make adjustments to our deposit strategy in response to evolving market conditions, bank funding needs and client relationship dynamics.
Product Revenue
In addition to credit and deposit products for commercial customers, Corporate & Institutional Banking offers treasury management capabilities, capital markets and advisory products and services, and commercial mortgage banking activities, for customers of all business segments. On a consolidated basis, the revenue from these other services is included in net interest income and noninterest income, as appropriate. From a business perspective, the majority of the revenue and expense related to these services is reflected in the Corporate & Institutional Banking segment results, with the remainder reflected in the results of other businesses where the customer relationships exist. The Other Information section in Table 13 includes the consolidated revenue to PNC for treasury management and commercial mortgage banking services. A discussion of the consolidated revenue from these services follows.
The Treasury Management business provides corporations with cash and investment management services, receivables and disbursement management services, funds transfer services and access to online/mobile information management and reporting services. Treasury management revenue is reported in noninterest income and net interest income. Noninterest income includes treasury management product revenue less earnings credits provided to customers on compensating deposit balances used to pay for products and services. Net interest income includes funding credit from all treasury management customer deposit balances. Compared with 2024, treasury management revenue increased due to wider interest rate spreads on the value of deposits, growth in average deposit balances and higher product revenue.
Commercial mortgage banking activities include revenue derived from commercial mortgage servicing (both net interest income and
noninterest income), revenue derived from commercial mortgage loans held for sale and hedges related to those activities. Total
revenue from commercial mortgage banking activities increased in the comparison primarily due to higher commercial mortgage loan servicing income and revenue from commercial mortgage loans held for sale.
Capital markets and advisory includes services and activities primarily related to merger and acquisition advisory, equity capital markets advisory, asset-backed financing, loan syndication, securities underwriting and customer-related trading. The increase in capital markets and advisory fees in the comparison was largely driven by higher merger and acquisition advisory fees, asset-backed financing fees and underwriting fees.
48The PNC Financial Services Group, Inc. - 2025 Form 10-K
Asset Management Group
The Asset Management Group strives to be a leading relationship-based provider of investment, planning, credit and cash management solutions and fiduciary services to affluent individuals and institutions by endeavoring to proactively deliver value-added ideas, solutions and exceptional service. The Asset Management Group's priorities are to serve our clients' financial objectives, grow and deepen customer relationships and deliver solid financial performance with prudent risk and expense management.
Table 14: Asset Management Group Table
(Unaudited)
Year ended December 31 Change
Dollars in millions, except as noted 2025 2024 $ %
Income Statement
Net interest income (a) $ 709 $ 613 $ 96 16 %
Noninterest income 1,001 949 52 5 %
Total revenue (a) 1,710 1,562 148 9 %
Provision for (recapture of) credit losses (19) (3) (16) *
Noninterest expense
Personnel 471 472 (1) - %
Segment allocations (b) 488 454 34 7 %
Depreciation and amortization 38 30 8 27 %
Other (c) 116 117 (1) (1) %
Total noninterest expense 1,113 1,073 40 4 %
Pre-tax earnings (a) 616 492 124 25 %
Income taxes (a) 144 116 28 24 %
Earnings (a) $ 472 $ 376 $ 96 26 %
Average Balance Sheet
Loans
Consumer
Residential real estate $ 9,908 $ 9,920 $ (12) - %
Other consumer 3,566 3,520 46 1 %
Total consumer 13,474 13,440 34 - %
Commercial 653 761 (108) (14) %
Total loans $ 14,127 $ 14,201 $ (74) (1) %
Total assets (a) $ 14,548 $ 14,644 $ (96) (1) %
Deposits (a)
Noninterest-bearing $ 1,484 $ 1,560 $ (76) (5) %
Interest-bearing 25,607 25,832 (225) (1) %
Total deposits $ 27,091 $ 27,392 $ (301) (1) %
Performance Ratios (a)
Return on average assets 3.24 % 2.57 %
Noninterest income to total revenue 59 % 61 %
Efficiency 65 % 69 %
Other Information
Nonperforming assets (d) $ 52 $ 28 $ 24 86 %
Net charge-offs - loans and leases $ 1 $ 2 $ (1) (50) %
Client Assets Under Administration (in billions) (d)(e)
Discretionary client assets under management
PNC Private Bank $ 138 $ 129 $ 9 7 %
Institutional Asset Management 96 82 14 17 %
Total discretionary client assets under management $ 234 $ 211 $ 23 11 %
Nondiscretionary client assets under administration 238 210 28 13 %
Total $ 472 $ 421 $ 51 12 %
*- Not Meaningful
(a)During the second quarter of 2025, certain loans and deposits, and the associated income statement impact, were transferred from the Asset Management Group to Retail Banking to better align products and services with the appropriate business segment. Prior periods have been adjusted to conform with the current presentation.
(b)Represents expense allocations for corporate overhead services used by each business segment; primarily comprised of technology, human resources and occupancy-related allocations.
(c)Other is primarily comprised of other direct expenses including outside services and equipment expense.
(d)As of December 31.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 49
(e)Excludes brokerage account client assets.
The Asset Management Group consists of two primary businesses: PNC Private Bank and Institutional Asset Management.
The PNC Private Bank is focused on being a premier private bank in each of the markets it serves, seeking to deliver high quality banking, trust and investment management services to our emerging affluent, high net worth and ultra-high net worth clients through a
broad array of products and services.
Institutional Asset Management provides outsourced chief investment officer, custody, cash and fixed income client solutions, and retirement plan fiduciary investment services to institutional clients, including corporations, healthcare systems, insurance companies, municipalities and non-profits.
Asset Management Group earnings increased $96 million in 2025 compared with 2024 driven by increased revenue and a higher provision recapture, partially offset by higher noninterest expense.
Net interest income increased in the comparison primarily due to wider interest rate spreads on the value of deposits.
Noninterest income increased in the comparison driven by higher average equity markets and positive net flows.
Noninterest expense increased in the comparison due to continued investments to support business growth.
Average total loans and deposits were stable in the comparison.
Discretionary client assets under management increased in the comparison and included the impact from higher spot equity markets and positive net flows.
RISKMANAGEMENT
Enterprise Risk Management
We encounter risk as part of the normal course of operating our business. Accordingly, we design our risk governance framework, referred to as the ERM Framework, and risk management processes to help manage this risk. We manage risk in light of our risk appetite to optimize long-term shareholder value while supporting our employees, customers and communities.
Our ERM Framework is structurally aligned with regulatory enhanced prudential standards and heightened standards promulgated by the Federal Reserve and OCC, respectively, which establish minimum requirements for the design and implementation of a risk governance framework. This Risk Management section describes our ERM Framework, which consists of seven core components that provide executive management and the Board of Directors with an aggregate view of significant risks impacting the organization. The seven core components are risk culture, enterprise strategy (including risk appetite, strategic planning, capital and liquidity planning and stress testing), risk governance and oversight framework, risk identification, risk assessments, risk controls and monitoring, and risk aggregation and reporting (see the figure below). The overall Risk Management section of this Item 7 also provides an analysis of the firm's Capital Management and our key areas of risk, which include, but are not limited to Credit, Market, Liquidity and Operational (including Compliance and Information Security). Our use of financial derivatives as part of our overall asset and liability risk management process is also addressed within this Risk Management section.
We operate within a rapidly evolving regulatory and financial services environment. Accordingly, we are actively focused on the timely incorporation of applicable regulatory pronouncements and emerging risks into our ERM Framework.
50The PNC Financial Services Group, Inc. - 2025 Form 10-K
Risk Culture
A strong risk culture helps us make well informed decisions, helps ensure individuals conform to the established culture, reduces an individual's ability to do something for personal gain, and rewards employees for working toward a common goal rather than individual interests. Our risk culture reinforces the appropriate protocols for responsible and ethical behavior. These protocols are especially critical in terms of our risk awareness, risk-taking behavior and risk management practices.
Managing risk is every employee's responsibility. All of our employees, individually and collectively, are responsible for ensuring the organization is performing with the utmost integrity, is applying sound risk management practices and is striving to achieve our stated objectives. All employees are also responsible for understanding our Enterprise Risk Appetite Statement, the ERM Framework and how risk management applies to their respective roles and responsibilities. Employees are encouraged to collaborate across groups to identify and mitigate risks and elevate issues as required. We reinforce risk management responsibilities through a performance management system where employee performance goals include risk management objectives and incentives for employees to reinforce balanced measures of risk-adjusted performance.
Proactive and open communication, between groups and up to the Board of Directors, facilitates timely identification and resolution of risk issues. Our multi-level risk committee structure provides formal channels to identify and report risk.
Enterprise Strategy
We seek to ensure that our overall enterprise strategy is within acceptable risk parameters through our risk appetite, strategic planning, capital and liquidity planning and stress testing processes. These components are reviewed and approved at least annually by the Board of Directors or one of its committees.
Risk Appetite: Our risk appetite represents the organization's desired enterprise risk position, set within our capital-based risk and liquidity capacity to achieve our strategic objectives and business plans. The Enterprise Risk Appetite Statement qualitatively describes the aggregate level of risk we are willing to accept in order to execute our business strategies. Qualitative guiding principles further define each of the risks within our taxonomy to support the risk appetite statement. Risk appetite metrics and limits, including forward-looking metrics, quantitatively measure whether we are operating within our stated risk appetite. Our risk appetite metrics reflect material risks, align with our established Risk Appetite Framework, balance risk and reward, leverage analytics, and are adjusted periodically based on changes in the external and internal risk environments.
Strategic Planning: Our enterprise and line of business strategic plans outline major objectives, strategies and goals which are expected to be achieved over the next five years while seeking to ensure we remain compliant with all capital, risk appetite and liquidity targets and guidelines. Our chief executive officer and chief financial officer lead the development of the corporate strategic plan.
Capital and Liquidity Planning and Stress Testing: Capital and liquidity planning helps to ensure we are maintaining safe and sound operations and viability. The planning processes and the resulting plans evolve as our overall risks, activities and risk management practices change. Additionally, both plans must align with our strategic planning process. Stress testing is an essential element of the capital planning and liquidity risk management processes. Effective stress testing enables us to consider the estimated effect on the firm's capital and liquidity positions across various hypothetical macroeconomic scenarios.
Risk Governance and Oversight
We employ a comprehensive risk management governance framework to help ensure that risks are identified, balanced decisions are made that consider risk and return, and risks are adequately monitored and managed. Risk committees established within this risk governance and oversight framework provide oversight for risk management activities at the Board of Directors, executive, corporate
The PNC Financial Services Group, Inc. - 2025 Form 10-K 51
and business levels. Committee composition is designed to provide effective oversight balanced across the three lines of defense in accordance with the OCC's heightened standards and the Federal Reserve Board's enhanced prudential standards. See the Supervision and Regulation section in Item 1 of this Report for more information.
To help ensure appropriate risks are being taken and effectively managed and controlled, risk is managed across three lines of defense. A summary of the Board of Directors' and each line of defense's responsibilities is provided below:
Board of Directors -The Board of Directors oversees our risk-taking activities, holds management accountable for adhering to the ERM Framework and is responsible for exercising sound, independent judgment when assessing risk.
First line of defense- The front line units are accountable for identifying, owning and managing risks to within acceptable levels while adhering to the ERM Framework. Our businesses strive to enhance risk management and internal control processes within their areas. Integrated and comprehensive processes are designed to adequately manage the business' risk profile and risk appetite through identifying, assessing, monitoring and reporting risks that may significantly impact each business.
Second line of defense -The second line of defense is independent from the first line of defense and is responsible for establishing the risk governance framework and the standards within each independent risk area for identifying, measuring, monitoring, controlling and reporting aggregate risks. As the second line of defense, the independent risk areas monitor the risks generated by the first line of defense, review and challenge the implementation of effective risk management practices, perform independent assessment of risk, and report on issues or exceptions. The risk areas help to ensure processes and controls owned by the businesses are designed and operating as intended.
Third line of defense- As the third line of defense, Internal Audit is independent from the first and second lines of defense. Internal Audit provides the Board of Directors and executive management comprehensive assurance on the effectiveness of the ERM Framework and the risk management practices across the organization.
Within the three lines of defense, the independent risk organization has sufficient authority to influence material decisions. Our business oversight and decision-making is supported through a governance structure at the Board of Directors and management level. Specific responsibilities include:
Board of Directors -Our Board of Directors oversees our business and affairs as managed by our officers and employees. The Board of Directors may receive assistance in carrying out its duties and may delegate authority through standing or special committees. The following provides a summary of some of the key responsibilities of the Board's standing committees:
•Audit Committee: monitors the integrity of our consolidated financial statements; monitors the effectiveness of internal control over financial reporting; monitors compliance with our code of ethics; oversees conduct risk management; evaluates a periodic, independent assessment of subsidiary banks' overall risk governance and risk management practices; monitors compliance with certain legal and regulatory requirements; evaluates and monitors the qualifications and independence of our independent auditors; and evaluates and monitors the performance of our Internal Audit function and our independent auditors.
•Nominating and Governance Committee: oversees the implementation of sound corporate governance principles and practices while promoting the best interests of our shareholders.
•Human Resources Committee: oversees the compensation of our executive officers and other specified responsibilities related to human resources matters affecting us, including succession planning; responsible for evaluating the relationship between risk-taking activities and incentive compensation plans.
•Risk Committee: oversees the establishment and implementation of our enterprise-wide risk governance framework, including related policies, procedures, activities and processes to identify, assess, monitor, manage and report the organization's material risks; evaluates and approves our overall risk governance framework (including risk appetite), approves significant changes to the framework and monitors compliance with the framework; reviews capital stress testing and capital management activities and makes related recommendations to the Board as appropriate.
•Corporate Responsibility Committee: oversees management's corporate responsibility efforts, internally and externally, to the extent such corporate responsibility efforts are not specifically within the purview of another Board committee (e.g., climate-related risks and climate-related financial disclosures), including oversight of management's continued development and evaluation of the appropriate components of such efforts.
•Technology Committee: oversees technology strategy and significant technology initiatives and programs, including those that can position the use of technology to drive strategic advantages, and fulfills the oversight responsibilities delegated from the Risk Committee with respect to technology risk, information management and security risks (including data risk, cybersecurity, cyber fraud and physical security risks), and the adequacy of PNC's business recovery, continuity and contingency plans and test results.
52The PNC Financial Services Group, Inc. - 2025 Form 10-K
Management Executive Committee - The Management Executive Committee is responsible for guiding the creation and execution of our business strategy across PNC. With this responsibility, the Management Executive Committee executes various strategic approval and review activities, with a focus on capital deployment, business performance and risk management.
Corporate Committees- The Corporate Committees generally operate based on the delegated approval authority from a Board-level Committee, the Management Executive Committee or other Corporate Committees. These Committees operate at the senior management level and are designed to facilitate the review, evaluation, oversight and approval of key business and risk activities.
Working Committees- Working Committees generally operate on delegated approval authority from a Corporate Committee or other Working Committees. Working Committees are intended to provide oversight of regulatory/legal matters, assist in the implementation of key enterprise-level activities within a business or function and support the oversight of key risk activities.
Transactional Committees- Transactional Committees generally operate based on delegated approval authority from a Corporate or Working Committee to approve individual transactions, transactional related activities or movements on the organization's balance sheet.
Policies and Procedures- We have established risk management Policies and Procedures to support our ERM Framework, articulate our risk culture, define the parameters and processes within which employees are to manage risk and conduct our business activities and to provide direction, guidance and clarity on roles and responsibilities to management and the Board of Directors. These Policies and Procedures are organized in a multi-tiered framework and require periodic review and approval by relevant Committees, including where appropriate Committees of the Board of Directors, or management.
Risk Identification
Risk identification takes place across a variety of risk types throughout the organization. These risk types include, but are not limited to, credit, liquidity, market and operational (which includes, among other types of risk, compliance and information security). Risks are identified based on a balanced use of analytical tools and management judgment for both on- and off-balance sheet exposures. Our governance structure supports risk identification by facilitating assessment of key risk issues, emerging risks and idiosyncratic risks and implementation of mitigation strategies as appropriate. These risks are prioritized based on quantitative and qualitative analysis and assessed against our risk appetite. Multiple tools and approaches are used to help identify and prioritize risks, including Risk Appetite Metrics, Key Risk Indicators, Key Performance Indicators, Risk and Control Self-Assessments, scenario analysis, stress testing and special assessments.
Risks are aggregated and assessed within and across risk functions and businesses. The aggregated risk information is reviewed and reported at an enterprise level to the Board of Directors or appropriate committees. This enterprise aggregation and reporting approach promotes the identification and appropriate escalation of material risks across the organization and supports an understanding of the cumulative impact of risk in relation to our risk appetite.
Risk Assessments
Once risks are identified, they are evaluated based on quantitative and qualitative analysis to determine whether they are material. Risk assessments support the overall management of an effective ERM Framework and help us to control and monitor our actual risk level and risk management effectiveness. Comprehensive, accurate and timely assessments of risk are essential to an effective ERM Framework. Risk assessments also support the implementation of mitigation strategies, or under certain circumstances, the decision to accept the risk (if there are no feasible alternatives to the business need, or the exposure may be significantly reduced or eliminated within a reasonable time frame through the course of business-as-usual activities). As part of the risk assessment processes, effective risk measurement practices are designed to uncover recurring risks that have been experienced in the past; facilitate the monitoring, understanding, analysis and reporting of known risks, including emerging risks; and reveal unanticipated risks that may not be easy to understand or predict.
Risk Controls and Monitoring
Our ERM Framework consists of policies, procedures, processes, personnel and control systems. Risk controls and limits provide the linkage from our Risk Appetite Statement and associated guiding principles to the risk-taking activities of our businesses. In addition to risk appetite limits, a system of more detailed internal controls exists which oversees and monitors our various processes and functions. These control systems measure performance, help employees make correct decisions, help ensure information is accurate and reliable and facilitate compliance with laws and regulations.
We design our monitoring and evaluation of risks and controls to provide assurance that policies, procedures and controls are effective and also to identify potential control improvements. Risk monitoring is a daily, ongoing process used by both the first and second line of defense to help ensure compliance with our ERM Framework. Risk monitoring is accomplished in many ways, including performing risk assessments at the business and risk assessment unit level, monitoring an area's key controls, the timely reporting of issues and establishing a quality control and/or quality assurance function, as applicable.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 53
Risk Aggregation and Reporting
Risk reporting is a comprehensive way to: (i) identify and communicate aggregate risks, including identified concentrations and themes; (ii) escalate instances where we are outside of our risk appetite; (iii) monitor our risk profile in relation to our risk appetite; and (iv) communicate risks and views on the effectiveness of our risk management activities through the governance structure up to the Board of Directors and executive management.
Risk reports are produced at the line of business, functional risk and enterprise levels. Each individual risk report includes an assessment of inherent risk, quality of risk management, residual risk, risk appetite and risk outlook. The enterprise level risk report aggregates material risks identified in the risk area reports and in the business reports to define the enterprise risk profile. The enterprise risk profile is a point-in-time assessment of enterprise risk and represents our overall risk position in relation to the desired enterprise risk appetite. The determination of the enterprise risk profile is based on analysis of quantitative reporting of risk limits and other measures along with qualitative assessments. Quarterly aggregation of risk reports from the risk areas and lines of business is designed to provide a clear view of our risk level relative to our risk appetite. The enterprise level report is provided through the governance structure to the Risk Committee of the Board of Directors.
Credit Risk Management
Credit risk represents the possibility that a customer, counterparty or issuer may not perform in accordance with the contractual terms of their loan, extension of credit or other financial obligation with PNC. Credit risk is inherent in the financial services business and results from extending credit to customers, purchasing securities and entering into financial derivative transactions and certain guarantee contracts. Credit risk is one of our most significant risks. Our processes for managing credit risk are designed to be embedded in our risk culture and in our decision-making processes using a systematic approach whereby credit risks and related exposures are identified and assessed, managed through specific policies and processes, measured and evaluated against our risk appetite and credit concentration limits, and reported, along with specific mitigation activities, to management and the Board of Directors through our governance structure. Our most significant concentration of credit risk is in our loan portfolio.
Loan Portfolio Characteristics and Analysis
Table 15: Details of Loans
In billions
We use several credit quality indicators, as further detailed in Note 3 Loans and Related Allowance for Credit Losses, to monitor and measure our exposure to credit risk within our loan portfolio. The following provides additional information about the significant loan classes that comprise our Commercial and Consumer portfolio segments.
Commercial
Commercial and Industrial
Commercial and industrial loans comprised 59% and 56% of our total loan portfolio at December 31, 2025 and 2024, respectively. The majority of our commercial and industrial loans are secured by collateral that provides a secondary source of repayment should a borrower experience cash generation difficulties. Examples of this collateral include short-term assets, such as accounts receivable, inventory and securities, and long-lived assets, such as equipment, owner-occupied real estate and other business assets.
54The PNC Financial Services Group, Inc. - 2025 Form 10-K
We actively manage our commercial and industrial loans to assess any changes (both positive and negative) in the level of credit risk at both the borrower and portfolio level. To evaluate the level of credit risk, we assign internal risk ratings reflecting our estimates of the borrower's PD and LGD for each related credit facility. This two-dimensional credit risk rating methodology provides granularity in the risk monitoring process and is updated on an ongoing basis through our credit risk management processes. In addition to monitoring the level of credit risk, we monitor different sources of concentration risk, including industry concentrations that may exist in our portfolio. Our commercial and industrial portfolio is well-diversified across industries as shown in the following table (based on the North American Industry Classification System).
Table 16: Commercial and Industrial Loans by Industry
December 31, 2025 December 31, 2024
Dollars in millions Amount % of Total Amount % of Total
Commercial and industrial
Financial services $ 36,993 19 % $ 27,737 16 %
Manufacturing 29,769 15 27,700 16
Service providers 24,159 12 21,881 12
Wholesale trade 19,263 10 18,399 10
Real estate related (a) 14,919 8 14,910 8
Technology, media and telecommunications 12,029 6 9,767 6
Retail trade 12,020 6 11,611 7
Health care 8,845 5 9,694 6
Transportation and warehousing 8,610 4 7,320 4
Other industries 29,116 15 26,771 15
Total commercial and industrial loans $ 195,723 100 % $ 175,790 100 %
(a)Represents loans to customers in the real estate and construction industries.
Owner occupied commercial real estate loans totaled $9.0 billion and $9.2 billion at December 31, 2025 and 2024, respectively. These loans are categorized as commercial and industrial loans as the credit decisioning for servicing these loans is based on the financial conditions of the owner, not the ability of the collateral to generate income. Owner occupied commercial real estate loans are well-diversified across industries.
Commercial Real Estate
Commercial real estate loans of $29.6 billion as of December 31, 2025 comprised $17.4 billion related to commercial mortgages on income-producing properties, $8.2 billion of intermediate-term financing loans and $4.0 billion of real estate construction project loans. At December 31, 2024, comparable amounts were $33.6 billion, $19.3 billion, $8.6 billion and $5.7 billion, respectively. Commercial real estate primarily consists of an investment in land and/or buildings held to generate income which serves as the primary source for the repayment of the loan. However, the disposition of the assigned collateral serves as a secondary source of repayment for the loan should the borrower experience cash generation difficulties.
We monitor credit risk associated with our commercial real estate loans similar to commercial and industrial loans by analyzing PD and LGD. Additionally, risks associated with commercial real estate loans tend to be correlated to the loan structure, collateral location and quality, project progress and business environment. These attributes are also monitored and utilized in assessing credit risk. The portfolio is geographically diverse due to the nature of our business involving clients throughout the U.S.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 55
The following table presents our commercial real estate loans by geography and property type:
Table 17: Commercial Real Estate Loans by Geography and Property Type
December 31, 2025 December 31, 2024
Dollars in millions Amount % of Total Amount % of Total
Geography (a)
California $ 5,248 18 % $ 5,675 17 %
Florida 3,668 12 3,807 11
Texas 2,950 10 3,763 11
Virginia 1,393 5 1,476 4
Ohio 1,233 4 1,107 3
Nevada 1,203 4 1,043 3
Illinois 1,186 4 1,090 3
Arizona 1,142 4 1,438 4
Pennsylvania 1,093 4 1,213 4
North Carolina 1,063 4 1,150 3
Other 9,386 31 11,857 37
Total commercial real estate loans $ 29,565 100 % $ 33,619 100 %
Property Type (a)
Multifamily $ 14,655 50 % $ 16,089 48 %
Office 5,053 17 6,707 20
Industrial/warehouse 4,059 14 3,911 12
Retail 1,891 6 2,090 6
Hotel/motel 1,409 5 1,567 5
Seniors housing 1,340 5 1,731 5
Other 1,158 3 1,524 4
Total commercial real estate loans $ 29,565 100 % $ 33,619 100 %
(a)Presented in descending order based on loan balances at December 31, 2025.
Commercial Real Estate: Office Portfolio
Given the fundamental change in office demand, real estate performance related to the office sector continues to be an area of focus. Our office portfolio remains geographically diversified. At December 31, 2025, our outstanding loan balances in the office portfolio totaled $5.1 billion, or 1.5% of total loans, while additional unfunded loan commitments totaled $0.1 billion. Within this population, criticized loans totaled 34.0% and nonperforming loans totaled 11.1%. We have established reserves of 11.0% against office loans, which we believe reflect the expected credit losses in this portfolio.
Continuing in response to structural shifts in office demand, the office portfolio remains a heightened focus with quarterly internal risk ratings, accelerated reappraisal requirements, and elevated credit approval standards. Additionally, active management efforts include ongoing performance assessments as well as the review of available market pricing information, including property valuations. Portfolio updates are distributed to senior management weekly. For information on commercial real estate appraisal procedures, refer to Note 1 Accounting Policies.
Given the ongoing uncertainty in this area, we expect continued stress in the office sector, and a portion of this stress will bear itself out as we work through maturities that will approximate 46.0% through the twelve months ended December 31, 2026. Upon maturity, and where the balance is not paid in full, an extension may be granted because contractual extension terms are met; alternatively, an extension may be granted based on negotiated terms, and a portion of these extensions may involve the curtailment or charge off of principal.
Consumer
Residential Real Estate
Residential real estate loans primarily consist of residential mortgage loans.
We obtain loan attributes at origination, including FICO scores and LTVs, and we update these and other credit metrics at least quarterly. We track borrower performance monthly. We also segment the mortgage portfolio into pools based on product type (e.g., nonconforming or conforming). This information is used for internal reporting and risk management. As part of our overall risk analysis and monitoring, we also segment the portfolio based upon loan delinquency, nonperforming status, modification and bankruptcy status, FICO scores, LTV and geographic concentrations.
56The PNC Financial Services Group, Inc. - 2025 Form 10-K
The following table presents certain key statistics related to our residential real estate portfolio:
Table 18: Residential Real Estate Loan Statistics
December 31, 2025 December 31, 2024
Dollars in millions Amount % of Total Amount % of Total
Geography (a)
California $ 18,726 43 % $ 19,869 43 %
Texas 3,486 8 3,748 8
Washington 3,183 7 3,481 7
Florida 3,025 7 3,171 7
New Jersey 1,773 4 1,847 4
New York 1,411 3 1,493 3
Arizona 1,247 3 1,340 3
Pennsylvania 1,159 3 1,197 3
Colorado 1,069 2 1,139 2
North Carolina 930 2 963 2
Other 7,751 18 8,167 18
Total residential real estate loans
$ 43,760 100 % $ 46,415 100 %
December 31, 2025 December 31, 2024
Weighted-average loan origination statistics (b)
Loan origination FICO score 773 773
LTV of loan originations 72 % 73 %
(a)Presented in descending order based on loan balances at December 31, 2025.
(b)Weighted-averages calculated for the twelve months ended December 31, 2025 and 2024, respectively.
We originate residential mortgage loans nationwide through our national mortgage business as well as within our branch network. Residential mortgage loans underwritten to agency standards, including conforming loan amount limits, are typically sold with servicing retained by us. We also originate nonconforming residential mortgage loans that do not meet agency standards, which we retain on our balance sheet. Our portfolio of originated nonconforming residential mortgage loans totaled $39.5 billion at December 31, 2025 with 46% located in California. Comparable amounts at December 31, 2024 were $41.7 billion and 46%, respectively.
Home Equity
Home equity loans of $25.9 billion as of December 31, 2025 were comprised of $22.1 billion of home equity lines of credit and $3.8 billion of closed-end home equity installment loans. At December 31, 2024, comparable amounts were $26.0 billion, $21.3 billion and $4.7 billion, respectively. Home equity lines of credit are a variable interest rate product with fixed rate conversion options available to certain borrowers.
Similar to residential real estate loans, we obtain loan attributes at origination, including FICO scores and LTVs, and we update these and other credit metrics at least quarterly. Borrower performance of this portfolio is tracked on a monthly basis. We also segment the population into pools based on product type (e.g., first lien product and second lien product) and track the historical performance of any related mortgage loans regardless of whether we hold such liens. This information is used for internal reporting and risk management. As part of our overall risk analysis and monitoring, we also segment the portfolio based upon loan delinquency, nonperforming status, modification and bankruptcy status, FICO scores, LTV, lien position and geographic concentration.
The credit performance of the majority of the home equity portfolio where we hold the first lien position is superior to the portion of the portfolio where we hold the second lien position but do not hold the first lien. Lien position information is generally determined at the time of origination and monitored on an ongoing basis for risk management purposes. We use a third-party service provider to obtain updated loan information, including lien and collateral data that is aggregated from public and private sources.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 57
The following table presents certain key statistics related to our home equity portfolio:
Table 19: Home Equity Loan Statistics
December 31, 2025 December 31, 2024
Dollars in millions Amount % of Total Amount % of Total
Geography (a)
Pennsylvania $ 4,330 17 % $ 4,504 17 %
New Jersey 3,136 12 3,153 12
Florida 2,239 9 2,239 9
Ohio 2,106 8 2,145 8
California 1,794 7 1,743 7
Texas 1,407 5 1,299 5
Maryland 1,202 5 1,209 5
Michigan 1,132 4 1,166 4
Illinois 1,025 4 1,032 4
North Carolina 1,006 4 1,001 4
Other 6,564 25 6,500 25
Total home equity loans $ 25,941 100 % $ 25,991 100 %
Lien type
1st lien 46 % 49 %
2nd lien 54 51
Total 100 % 100 %
December 31, 2025 December 31, 2024
Weighted-average loan origination statistics (b)
Loan origination FICO score 777 773
LTV of loan originations 61 % 62 %
(a)Presented in descending order based on loan balances at December 31, 2025.
(b)Weighted-averages calculated for the twelve months ended December 31, 2025 and 2024, respectively.
Automobile
As of December 31, 2025 total auto loans of $16.6 billion were comprised of $15.6 billion in the indirect auto portfolio and $1.0 billion in the direct auto portfolio. At December 31, 2024, comparable amounts were $15.4 billion, $14.4 billion and $1.0 billion, respectively. The indirect auto portfolio consists of loans originated primarily through independent franchised dealers. This business is strategically aligned with our core retail banking business. For the total auto loan portfolio, the weighted-average loan origination FICO score, calculated using the auto enhanced FICO scale, was 799 and the weighted-average term of loan originations was 71 months for the twelve months ended December 31, 2025. Comparable amounts for the twelve months ended December 31, 2024 were 793 and 71 months, respectively.
We offer both new and used auto financing to customers through our various channels. The portfolio balance was composed of 43% new vehicle loans and 57% used vehicle loans at both December 31, 2025 and 2024.
The auto loan portfolio's performance is measured monthly, including both updated collateral values and FICO scores that are obtained at least quarterly. For internal reporting and risk management, we analyze the portfolio by product channel and product type and regularly evaluate default and delinquency experience. As part of our overall risk analysis and monitoring, we segment the portfolio by geography, channel, collateral attributes and credit metrics which include FICO score, LTV and term.
Nonperforming Assets and Loan Delinquencies
Nonperforming Assets
Nonperforming assets include nonperforming loans and leases, OREO, foreclosed and other assets. Nonperforming loans are those loans accounted for at amortized cost whose credit quality has deteriorated to the extent full collection of contractual principal and interest is not probable. Loans held for sale, certain government insured or guaranteed loans and loans accounted for under the fair value option are excluded from nonperforming loans. See Note 1 Accounting Policies for details on our nonaccrual policies.
58The PNC Financial Services Group, Inc. - 2025 Form 10-K
The following table presents a summary of nonperforming assets by major category:
Table 20: Nonperforming Assets by Type
December 31, 2025 December 31, 2024 Change
Dollars in millions $ %
Nonperforming loans
Commercial $ 1,358 $ 1,462 $ (104) (7)%
Consumer (a) 860 864 (4) -%
Total nonperforming loans 2,218 2,326 (108) (5)%
OREO, foreclosed and other assets (b) 143 31 112 361%
Total nonperforming assets $ 2,361 $ 2,357 $ 4 -%
Nonperforming loans to total loans 0.67 % 0.73 %
Nonperforming assets to total loans, OREO, foreclosed and other assets (b) 0.71 % 0.74 %
Nonperforming assets to total assets 0.41 % 0.42 %
Allowance for loan and lease losses to nonperforming loans 199 % 193 %
Allowance for credit losses to nonperforming loans (c) 236 % 224 %
(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)Amounts at December 31, 2025 include $105 million of nonaccrual servicing advances primarily to single asset/single borrower trusts with commercial real estate as collateral.
(c)Calculated excluding allowances for investment securities and other financial assets.
The following table provides details on the change in nonperforming assets for the years ended December 31, 2025 and 2024:
Table 21: Change in Nonperforming Assets
In millions 2025 2024
January 1 $ 2,357 $ 2,216
New nonperforming assets 2,066 2,245
Charge-offs and valuation adjustments (478) (685)
Principal activity, including paydowns and payoffs (1,015) (1,112)
Asset sales and transfers to loans held for sale (128) (53)
Returned to performing status (441) (254)
December 31 $ 2,361 $ 2,357
As of December 31, 2025, approximately 96% of total nonperforming loans were secured by collateral.
Loan Delinquencies
We regularly monitor the level of loan delinquencies and believe these levels are a key indicator of credit quality in our loan portfolio. Measurement of delinquency status is based on the contractual terms of each loan. Loans that are 30 days or more past due are considered delinquent. Loan delinquencies include government insured or guaranteed loans, loans accounted for under the fair value option and PCD loans. Amounts exclude loans held for sale.
We manage credit risk based on the risk profile of the borrower, repayment sources, underlying collateral, and other support given current events, economic conditions and expectations. We refine our practices to address operating environment changes such as inflation levels, industry specific risks, interest rate levels, the level of consumer savings and deposit balances, and structural and secular changes such as those that arose from the pandemic. We offer loan modifications and collection programs to assist our customers and mitigate losses.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 59
The following table presents a summary of accruing loans past due by delinquency status:
Table 22: Accruing Loans Past Due (a)
Amount % of Total Loans Outstanding
December 31, 2025 December 31, 2024 Change December 31, 2025 December 31, 2024
Dollars in millions $ %
Early stage loan delinquencies
Accruing loans past due 30 to 59 days $ 660 $ 697 $ (37) (5) % 0.20 % 0.22 %
Accruing loans past due 60 to 89 days 403 288 115 40 % 0.12 % 0.09 %
Total early stage loan delinquencies 1,063 985 78 8 % 0.32 % 0.31 %
Late stage loan delinquencies
Accruing loans past due 90 days or more 380 397 (17) (4) % 0.11 % 0.13 %
Total accruing loans past due $ 1,443 $ 1,382 $ 61 4 % 0.44 % 0.44 %
(a)Past due loan amounts include government insured or guaranteed loans of $0.4 billion at both December 31, 2025 and 2024.
Accruing loans past due 90 days or more continue to accrue interest because they are (i) well secured by collateral and are in the process of collection, (ii) managed in homogeneous portfolios with specified charge-off timeframes adhering to regulatory guidelines, or (iii) certain government insured or guaranteed loans. As such, they are excluded from nonperforming loans.
Loan Modifications
We may provide relief to our customers experiencing financial hardships through a variety of solutions. Commercial loan and lease modifications are based on each individual borrower's situation, while consumer loan modifications are evaluated under our hardship relief programs. For additional information on our commercial real estate, office-related modification offerings, see the Commercial Real Estate portion of the Credit Risk Management section of this Financial Review.
See Note 3 Loans and Related Allowance for Credit Losses for additional information on loan modifications to borrowers experiencing financial difficulty.
The following table provides details on the contractual maturity ranges and interest sensitivity of our loan classes at December 31, 2025.
Table 23:Selected Loan Maturities and Interest Sensitivity
Loans Due After 1 Year Contractual Maturity Range
December 31, 2025
In millions
Predetermined Rate Floating or Adjustable Rate 1 Year or Less After 1 Year Through 5 Years After 5 Years Through 15 Years After 15 Years Gross Loans
Commercial
Commercial and industrial $ 17,639 $ 122,059 $ 56,025 $ 126,227 $ 12,450 $ 1,021 $ 195,723
Commercial real estate 3,508 13,049 13,008 15,185 1,133 239 29,565
Equipment lease financing 4,859 294 2,022 4,823 330 - 7,175
Total commercial 26,006 135,402 71,055 146,235 13,913 1,260 232,463
Consumer
Residential real estate 25,828 16,592 1,340 5,374 14,708 22,338 43,760
Home equity 13,241 11,327 1,373 3,852 7,414 13,302 25,941
Automobile 12,607 - 3,984 11,498 1,109 - 16,591
Credit card - - 7,014 - - - 7,014
Education 548 787 133 519 660 156 1,468
Other consumer 1,184 189 2,871 1,316 57 - 4,244
Total consumer 53,408 28,895 16,715 22,559 23,948 35,796 99,018
Total loans $ 79,414 $ 164,297 $ 87,770 $ 168,794 $ 37,861 $ 37,056 $ 331,481
Allowance for Credit Losses
Our determination of the ACL is based on historical loss and performance experience, current economic conditions, the reasonable and
supportable forecasts of future economic conditions and other relevant factors, including current borrower and/or transaction characteristics and assessments of the remaining estimated contractual term as of the balance sheet date. We maintain the ACL at an appropriate level for expected losses on our existing investment securities, loans, equipment finance leases, other financial assets and unfunded lending related commitments.
Expected losses are estimated primarily using a combination of (i) the expected losses over a reasonable and supportable forecast
60The PNC Financial Services Group, Inc. - 2025 Form 10-K
period, (ii) a period of reversion to long run average expected losses, where applicable and (iii) long run average expected losses for the remaining estimated contractual term.
We use forward-looking information in estimating expected credit losses for our reasonable and supportable forecast period. For this purpose, we have established a framework which includes a three-year forecast period and the use of four economic scenarios and associated probability weights, which in combination create a forecast of expected economic outcomes. Forward-looking information, such as forecasted relevant macroeconomic variables, is incorporated into the expected credit loss estimates using quantitative macroeconomic models, as well as through analysis from PNC's economists and management's judgment.
The reversion period is used to bridge our three-year reasonable and supportable forecast period and the long-run average expected credit losses. We consider a number of factors in determining the duration of the reversion period, such as contractual maturity of the asset, observed historical patterns and the estimated credit loss rates at the end of the forecast period relative to the beginning of the long run average period. The reversion period is typically 1-3 years, if not immediate.
The long-run average expected credit losses are derived from available historical credit information. We use long-run average expected losses for the portfolio over the estimated remaining contractual term beyond our reasonable and supportable forecast period and the reversion period.
The following discussion provides additional information on our reserves for loans and leases as well as unfunded lending related commitments. See Note 1 Accounting Policies for further discussion on our ACL, including details of our methodologies and discussion of the allowances for investment securities and other financial assets. See also the Critical Accounting Estimates and Judgments section of this Report for further discussion of the assumptions used in the determination of the ACL as of December 31, 2025.
Allowance for Loan and Lease Losses
Our pooled expected credit loss methodology is based upon the quantification of PD, LGD, EAD and the remaining estimated contractual term for a loan, loan segment or lease. We also consider the impact of prepayments and amortization on the estimated contractual term in our expected loss estimates. We use historical data, current borrower characteristics and forecasted economic variables in quantitative methods to estimate these risk parameters by loan, loan segment or lease. PD represents a quantification of risk of the likelihood that a borrower may not be able to pay their contractual obligation over a defined period of time. LGD describes the estimated magnitude of potential loss if a borrower were to default, and EAD (or utilization rates for certain revolving loans) is the estimated balance outstanding at the expected time of default. These parameters are calculated for each forecasted scenario and the long-run average period, and are combined to generate expected loss estimates by scenario in proportion to the scenario weights.
For loans and leases that do not share similar risk characteristics with a pool of loans, we establish individually assessed reserves using methods prescribed by GAAP. Reserves for individual commercial nonperforming loans exceeding a defined dollar threshold 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. Commercial nonperforming loans that are below the defined threshold are collectively reserved for, as we believe these loans continue to share similar risk characteristics. 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.
While our reserve models and methodologies strive to reflect all relevant expected credit risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between expected and actual outcomes. We may hold additional reserves that are designed to provide coverage for losses attributable to such risks. A portion of the allowance is related to qualitative measurement factors. These factors may include, but are not limited to:
•Industry concentrations and conditions,
•Changes in market conditions, including regulatory and legal requirements,
•Changes in the nature and volume of our portfolio,
•Recent credit quality trends,
•Recent loss experience in particular portfolios, including specific and unique events,
•Recent macroeconomic factors that may not be reflected in the forecast information,
•Limitations of available input data, including historical loss information and recent data such as collateral values,
•Model imprecision and limitations,
•Changes in lending policies and procedures, including changes in loss recognition and mitigation policies and procedures, and
•Timing of available information.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 61
Allowance for Unfunded Lending Related Commitments
We maintain the allowance for unfunded lending related commitments on off-balance sheet credit exposures that are not unconditionally cancelable, (e.g., unfunded loan commitments, letters of credit and certain financial guarantees) at a level we believe is appropriate as of the balance sheet date to absorb expected credit losses on these exposures. Other than the estimation of the probability of funding, this reserve is estimated in a manner similar to the methodology used for determining reserves for pooled loans and leases. The allowance for unfunded lending related commitments is recorded as a liability on the Consolidated Balance Sheet. Net adjustments to this reserve are included in the provision for credit losses on the Consolidated Income Statement.
The following table summarizes our ACL related to loans:
Table 24: Allowance for Credit Losses by Loan Class (a)
December 31, 2025 December 31, 2024

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 $ 1,947 $ 195,723 0.99 % $ 1,605 $ 175,790 0.91 %
Commercial real estate 1,057 29,565 3.58 % 1,483 33,619 4.41 %
Equipment lease financing 85 7,175 1.18 % 60 6,755 0.89 %
Total commercial 3,089 232,463 1.33 % 3,148 216,164 1.46 %
Consumer
Residential real estate 44 43,760 0.10 % 37 46,415 0.08 %
Home equity 271 25,941 1.04 % 266 25,991 1.02 %
Automobile 158 16,591 0.95 % 160 15,355 1.04 %
Credit card 632 7,014 9.01 % 664 6,879 9.65 %
Education 42 1,468 2.86 % 48 1,636 2.93 %
Other consumer 174 4,244 4.10 % 163 4,027 4.05 %
Total consumer 1,321 99,018 1.33 % 1,338 100,303 1.33 %
Total $ 4,410 $ 331,481 1.33 % $ 4,486 $ 316,467 1.42 %
Allowance for unfunded lending related commitments
818 719
Allowance for credit losses
$ 5,228 $ 5,205
Allowance for credit losses to total loans 1.58 % 1.64 %
Commercial 1.62 % 1.72 %
Consumer 1.47 % 1.47 %
(a) Excludes allowances for investment securities and other financial assets, which together totaled $99 million and $114 million at December 31, 2025 and 2024, respectively.
62The PNC Financial Services Group, Inc. - 2025 Form 10-K
The following table summarizes our loan charge-offs and recoveries:
Table 25: Loan Charge-Offs and Recoveries
Year ended December 31
Dollars in millions 		Gross
Charge-offs 		Recoveries Net Charge-offs / (Recoveries) % of Average Loans
2025
Commercial
Commercial and industrial $ 362 $ 143 $ 219 0.12 %
Commercial real estate 116 22 94 0.30 %
Equipment lease financing 32 23 9 0.13 %
Total commercial 510 188 322 0.14 %
Consumer
Residential real estate 8 11 (3) (0.01) %
Home equity 35 35 - - %
Automobile 130 94 36 0.23 %
Credit card 320 62 258 3.91 %
Education 16 6 10 0.64 %
Other consumer 157 36 121 2.90 %
Total consumer 666 244 422 0.43 %
Total $ 1,176 $ 432 $ 744 0.23 %
2024
Commercial
Commercial and industrial $ 328 $ 119 $ 209 0.12 %
Commercial real estate 358 13 345 0.98 %
Equipment lease financing 34 17 17 0.26 %
Total commercial 720 149 571 0.26 %
Consumer
Residential real estate 3 10 (7) (0.01) %
Home equity 36 42 (6) (0.02) %
Automobile 131 97 34 0.23 %
Credit card 355 55 300 4.38 %
Education 19 6 13 0.73 %
Other consumer 171 35 136 3.29 %
Total consumer 715 245 470 0.47 %
Total $ 1,435 $ 394 $ 1,041 0.33 %
Total net charge-offs decreased $297 million, or 29%, in 2025 compared to 2024. The decrease in the comparison was driven by lower net charge-offs in both our commercial and consumer portfolios, primarily attributable to decreases in commercial real estate and credit card loan classes.
See Note 1 Accounting Policies and Note 3 Loans and Related Allowance for Credit Losses for additional information.
Liquidity and Capital Management
The two fundamental components of liquidity risk are a potential loss assuming we are unable to meet our funding requirements at a reasonable cost, and the potential inability to operate our businesses because adequate contingent liquidity is not available. We manage liquidity risk at the consolidated company level (bank, parent company and all subsidiaries combined) to help ensure that we can obtain cost-effective funding to meet current and future obligations under both normal "business as usual" and stressful circumstances. We also maintain a liquidity position and use liquidity risk management practices that we believe are appropriate considering PNC and PNC Bank's capital adequacy, risk profile, complexity, activities, and size, as well as applicable regulatory liquidity requirements and associated regulatory practices.
We perform ongoing monitoring of liquidity through a series of early warning indicators tailored to PNC's risk profile, complexity, activities, and size that may identify a potential market, or PNC-specific, liquidity stress event. In addition, management performs a set of internal liquidity stress tests over multiple time horizons with varying levels of severity and maintains a contingency funding plan to address a potential liquidity stress event. Liquidity-related risk limits and operating guidelines are established within our Enterprise Liquidity Management Policy covering regulatory metrics and various concentration limits. Management committees, including the ALCO, and the Board of Directors and its Risk Committee regularly review compliance with key established limits. PNC was in compliance with all relevant internal and regulatory liquidity limits and guidelines throughout the year for 2025 and 2024.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 63
One of the ways we monitor our liquidity is by reference to the LCR, a regulatory minimum liquidity requirement designed to ensure that covered banking organizations maintain an adequate level of liquidity to meet net liquidity needs over the course of a hypothetical 30-day stress scenario. PNC and PNC Bank calculate the LCR daily and are required to maintain a regulatory minimum of 100%. The LCR for both PNC and PNC Bank exceeded the regulatory minimum requirement throughout the year for 2025 and 2024.
Fluctuations in our LCR result from changes to the components of the calculation, including high-quality liquid assets and net cash outflows, as a result of ongoing business activity.
The NSFR is designed to measure the stability of the maturity structure of assets and liabilities of banking organizations over a one-year time horizon. PNC and PNC Bank calculate the NSFR daily and are required to maintain a regulatory minimum of 100%. The NSFR for PNC and PNC Bank exceeded the regulatory minimum requirement throughout the year for 2025 and 2024.
We provide additional information regarding regulatory liquidity requirements and their potential impact on us in the Supervision and Regulation section of Item 1 Business and Item 1A Risk Factors of this Report.
Sources of Liquidity
Our largest source of liquidity on a consolidated basis is the customer deposit base generated by our banking businesses. These deposits provide relatively stable and low-cost funding. Total deposits increased to $440.9 billion at December 31, 2025 from $426.7 billion at December 31, 2024 as higher interest-bearing deposits were partially offset by lower noninterest-bearing deposits. The increase in interest-bearing deposits was due to higher commercial and consumer deposits, partially offset by lower brokered time deposits. The decrease in noninterest-bearing deposits reflected lower commercial balances, partially offset by higher consumer balances.
The aggregate amount of uninsured deposits, based on the regulatory instructions in the Consolidated Reports of Condition and Income - FFIEC 031, was estimated to be $209.3 billion and $194.9 billion at December 31, 2025 and 2024, respectively. The portion of U.S. time deposits in excess of the FDIC insurance limit or similar state deposit regime was $5.2 billion at December 31, 2025. The majority of our uninsured deposits are related to commercial operating and relationship accounts, which we define as commercial deposit customers who utilize two or more PNC products. See the Funding Sources in the Consolidated Balance Sheet Review and the Business Segments Review of this Item 7 for additional information on our deposits and related strategies.
We may also obtain liquidity through various forms of funding, such as senior notes, subordinated debt, FHLB advances, securities
sold under repurchase agreements, commercial paper and other short-term borrowings. See the Funding Sources in the Consolidated Balance Sheet Review of this Item 7 and Note 9 Borrowed Funds included in this Report for additional information related to our borrowings.
Total senior and subordinated debt, on a consolidated basis, increased due to the following activity:
Table 26: Senior and Subordinated Debt
In billions 2025
January 1 $ 36.6
Issuances 8.0
Calls and maturities (4.0)
Other 1.1
December 31 $ 41.7
Additionally, PNC maintains access to contingent funding sources that include unused borrowing capacity and certain liquid assets.
PNC has a contingency funding plan designed to ensure that liquidity sources are sufficient to meet ongoing obligations and
commitments, particularly in the event of liquidity stress. This plan is designed to examine and quantify the organization's liquidity under various internal liquidity stress scenarios and is periodically tested to assess the plan's reliability. Additionally, the plan provides the strategies for addressing liquidity needs and responsive actions we would consider during liquidity stress events, which could include the issuance of incremental debt, preferred stock, or additional deposit actions, including the issuance of brokered time deposits. The plan also addresses the governance, frequency of reporting and the responsibilities of key departments in the event of liquidity stress.
64The PNC Financial Services Group, Inc. - 2025 Form 10-K
PNC defines our primary contingent liquidity sources as cash held at the FRB, investment securities and unused borrowing capacity at the FHLB and FRB. The following table summarizes our primary contingent liquidity sources at December 31, 2025 and December 31, 2024:
Table 27: Primary Contingent Liquidity Sources
In billions December 31, 2025 December 31, 2024
Cash balance with Federal Reserve Bank $ 32.0 $ 39.0
Available investment securities (a) 77.2 64.5
Unused borrowing capacity from FHLB (b)
50.7 51.0
Unused borrowing capacity from Federal Reserve Bank (c)
81.5 77.9
Total available contingent liquidity $ 241.4 $ 232.4
(a)Represents the fair value of investment securities that can be used for pledging or to secure other sources of funding.
(b)At December 31, 2025, total FHLB borrowing capacity was $64.1 billion and total FHLB advances and letters of credit were $13.4 billion. Comparable amounts at December 31, 2024 were $73.3 billion and $22.3 billion, respectively.
(c)Total borrowing capacity with the FRB was $81.5 billion at December 31, 2025 and $77.9 billion at December 31, 2024. PNC had no outstanding borrowings with the FRB at December 31, 2025 and 2024.
Bank Liquidity
In addition to our primary contingent liquidity sources, under PNC Bank's 2014 bank note program, as amended, PNC Bank may from time to time offer up to $40.0 billion aggregate principal amount outstanding at any one time of its unsecured senior and subordinated notes with maturity dates more than nine months (in the case of senior notes) and five years or more (in the case of subordinated notes) from their date of issue. At December 31, 2025, PNC Bank's remaining capacity to issue under the program was $32.0 billion.
The following table details PNC Bank note issuances during 2025:
Table 28: PNC Bank Notes Issued
Issuance Date Amount Description of Issuance
May 13, 2025 $1.25 billion $1.25 billion of 4.543% senior fixed-to-floating rate notes with a maturity date of May 13, 2027. Interest is payable semi-annually in arrears at a fixed rate of 4.543% per annum, on May 13 and November 13 of each year, commencing on November 13, 2025. Beginning on May 13, 2026, interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the pricing supplement), plus 0.630%, on August 13, 2026, November 13, 2026, February 13, 2027 and at the maturity date.
July 21, 2025 $300 million $300 million of senior floating rate notes with a maturity date of July 21, 2028. Interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using SOFR Index as described in the pricing supplement), plus 0.730%, on January 21, April 21, July 21 and October 21 of each year, commencing on October 21, 2025 until the earlier of the optional redemption date or the maturity date.
July 21, 2025 $1.0 billion $1.0 billion of 4.429% senior fixed-to-floating rate notes with a maturity date of July 21, 2028. Interest is payable semi-annually in arrears at a fixed rate of 4.429% per annum, on January 21 and July 21 of each year, commencing on January 21, 2026. Beginning on July 21, 2027, interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the pricing supplement), plus 0.727%, on October 21, 2027, January 21, 2028, April 21, 2028 and at the maturity date.
See Note 24 Subsequent Events for details on PNC Bank's redemptions of all outstanding 4.775% senior fixed-to-floating rate notes with an original maturity date of January 15, 2027, and all outstanding senior floating rate bank notes with an original maturity date of January 15, 2027.
Under PNC Bank's 2013 commercial paper program, PNC Bank has the ability to offer up to $10.0 billion of its commercial paper to provide additional liquidity. As of December 31, 2025, there were no issuances outstanding under this program.
Additionally, PNC Bank may also access funding from the parent company through deposits placed at the bank or issuing intercompany unsecured notes.
Parent Company Liquidity
In addition to managing liquidity risk at the bank level, we manage the parent company's liquidity. The parent company's contractual obligations consist primarily of debt service related to parent company borrowings and funding non-bank affiliates. Additionally, the parent company maintains liquidity to fund discretionary activities such as paying dividends to our shareholders, share repurchases and acquisitions.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 65
As of December 31, 2025, available parent company liquidity totaled $29.7 billion. Parent company liquidity is held in intercompany cash and investments. For investments with longer durations, the related maturities are aligned with scheduled cash needs, such as the maturity of parent company debt obligations.
The principal source of parent company liquidity is the dividends or other capital distributions it receives from PNC Bank, which may be impacted by the following:
•Bank-level capital needs,
•Laws, regulations and the results of supervisory activities,
•Corporate policies,
•Contractual restrictions, and
•Other factors.
There are statutory and regulatory limitations on the ability of a national bank to pay dividends or make other capital distributions or to extend credit to the parent company or its non-bank subsidiaries. The amount available for dividend payments by PNC Bank to the parent company without prior regulatory approval was $8.4 billion at December 31, 2025. See Note 19 Regulatory Matters for further discussion of these limitations.
In addition to dividends from PNC Bank, other sources of parent company liquidity include cash and investments, as well as dividends and loan repayments from other subsidiaries and dividends or distributions from equity investments. We can also generate liquidity for the parent company and PNC's non-bank subsidiaries through the issuance of debt and equity securities, including certain capital instruments, in public or private markets and commercial paper. Under the parent company's 2014 commercial paper program, the parent company has the ability to offer up to $5.0 billion of commercial paper to provide additional liquidity. At December 31, 2025, there were no issuances outstanding under this program.
The following table details Parent Company note issuances during 2025:
Table 29: Parent Company Notes Issued
Issuance Date Amount Description of Issuance
January 29, 2025 $1.0 billion $1.0 billion of senior fixed-to-floating rate notes with a maturity date of January 29, 2031. Interest is payable semi-annually in arrears at a fixed rate of 5.222% per annum, on January 29 and July 29 of each year, commencing on July 29, 2025. Beginning on January 29, 2030 interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the Prospectus Supplement), plus 1.072%, on April 29, 2030, July 29, 2030, October 29, 2030 and at the maturity date.
January 29, 2025 $1.75 billion $1.75 billion of senior fixed-to-floating rate notes with a maturity date of January 29, 2036. Interest is payable semi-annually in arrears at a fixed rate of 5.575% per annum, on January 29 and July 29 of each year, commencing on July 29, 2025. Beginning on January 29, 2035 interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the Prospectus Supplement), plus 1.394%, on April 29, 2035, July 29, 2035, October 29, 2035 and at the maturity date.
May 13, 2025 $1.25 billion $1.25 billion of 4.899% senior fixed-to-floating rate notes with a maturity date of May 13, 2031. Interest is payable semi-annually in arrears at a fixed rate of 4.899% per annum, on May 13 and November 13 of each year, commencing on November 13, 2025. Beginning on May 13, 2030 interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the Prospectus Supplement), plus 1.333%, on August 13, 2030, November 13, 2030, February 13, 2031 and at the maturity date.
July 21, 2025 $1.5 billion $1.5 billion of 5.373% senior fixed-to-floating rate notes with a maturity date of July 21, 2036. Interest is payable semi-annually in arrears at a fixed rate of 5.373% per annum, on January 21 and July 21 of each year, commencing on January 21, 2026. Beginning on July 21, 2035 interest is payable quarterly in arrears at a floating rate per annum equal to Compounded SOFR (determined with respect to each quarterly interest period using the SOFR Index as described in the Prospectus Supplement), plus 1.417%, on October 21, 2035, January 21, 2036, April 21, 2036 and at the maturity date.
See Note 24 Subsequent Events for details on the parent company's issuances of the following:
•$1.5 billion of 5.423% subordinated fixed-rate reset notes that mature on January 25, 2041;
•$1.2 billion of 4.075% senior fixed-to-floating rate notes that mature on January 26, 2029; and
•$300 million of senior floating rate notes that mature on January 26, 2029.
66The PNC Financial Services Group, Inc. - 2025 Form 10-K
The following table details Parent Company note redemptions during 2025:
Table 30: Parent Company Notes Redeemed
Redemption Date Amount Description of Redemption
June 12, 2025 $1.0 billion All outstanding 5.812% senior fixed-to-floating rate notes with an original scheduled maturity date of June 12, 2026. The redemption price was equal to 100% of the principal amount, plus any accrued and unpaid interest to the redemption date of June 12, 2025.
See Note 24 Subsequent Events for details on the parent company's redemption of all outstanding 4.758% senior fixed-to-floating rate notes with an original maturity date of January 26, 2027.
Parent company senior and subordinated debt carrying value totaled $33.7 billion and $28.4 billion at December 31, 2025 and 2024, respectively.
Contractual Obligations and Commitments
We enter into various contractual arrangements in the normal course of business, certain of which require future payments that could
impact our liquidity and capital resources. These obligations include commitments to extend credit, outstanding letters of credit,
customer deposits, borrowed funds, operating lease payments and future pension and post-retirement benefits. For further discussion
related to these contractual obligations and other commitments, see Note 6 Leases, Note 8 Time Deposits, Note 9 Borrowed Funds,
Note 10 Commitments and Note 16 Employee Benefit Plans.
Credit Ratings
PNC's credit ratings affect the cost and availability of short and long-term funding, collateral requirements for certain derivative instruments and the ability to offer certain products.
In general, rating agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, level and quality of earnings, and the current legislative and regulatory environment, including implied government support. A decrease, or potential decrease, in credit ratings could impact access to the capital markets and/or increase the cost of debt, and thereby adversely affect liquidity and financial condition. For additional information on the potential impacts from a downgrade to our credit ratings, see Item 1A Risk Factors in this Report.
The following table presents credit ratings and outlook for PNC as of December 31, 2025:
Table 31: Credit Ratings and Outlook
December 31, 2025
Moody's S&P (a) Fitch DBRS (b)
PNC
Senior debt A3 A- A AA (low)
Subordinated debt A3 BBB+ A- A (high)
Preferred stock Baa2 BBB- BBB A (low)
PNC Bank
Senior debt A2 A A+ AA
Subordinated debt A2 A- A AA (low)
Long-term deposits Aa3
no rating
AA- AA
Short-term deposits P-1
no rating
F1+ no rating
Short-term notes P-1 A-1 F1 R-1 (high)
PNC
Agency rating outlook
Stable Stable Stable Stable
(a)S&P does not provide depositor ratings. PNC Bank's long term issuer rating is A and short term issuer rating is A-1.
(b)DBRS does not provide a short-term depositor rating. PNC Bank's short-term instrument rating is R-1 (high).
Capital Management
We manage our funding and capital positions by making adjustments to our balance sheet size and composition, issuing or redeeming debt, issuing equity or other capital instruments, executing treasury stock transactions and capital redemptions or repurchases and managing dividend policies and retaining earnings.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 67
In 2025, we returned $3.9 billion of capital to shareholders through dividends on common shares of more than $2.6 billion and repurchases of 6.8 million common shares for $1.2 billion. The SCB framework permits capital return in amounts in excess of SCB minimum levels. Consistent with this framework, PNC had approximately 35% of the 100 million common shares still available for repurchase at December 31, 2025 under the repurchase program previously approved by our Board of Directors. First quarter 2026 share repurchase activity is expected to approximate $600 million to $700 million. PNC may adjust share repurchase activity depending on market and economic conditions, as well as other factors. PNC's SCB for the four-quarter period beginning October 1, 2025 is the regulatory minimum of 2.5%.
On January 5, 2026, the PNC Board of Directors declared a quarterly cash dividend on common stock of $1.70 per share paid on February 5, 2026 to shareholders of record at the close of business January 20, 2026.
See the Supervision and Regulation section of Item 1 Business in this Report for further information concerning the CCAR and
DFAST process and the factors the Federal Reserve takes into consideration in its evaluation of capital plans.
The following table summarizes our Basel III capital balances and ratios:
Table 32: Basel III Capital
December 31, 2025
Dollars in millions Basel III
Common equity tier 1 capital
Common stock plus related surplus, net of treasury stock $ (5,031)
Retained earnings 63,266
Goodwill, net of associated deferred tax liabilities (10,731)
Other disallowed intangibles, net of deferred tax liabilities (170)
Other adjustments (deductions) (75)
Common equity tier 1 capital (a) $ 47,259
Additional tier 1 capital
Preferred stock plus related surplus 5,757
Tier 1 capital $ 53,016
Additional tier 2 capital
Qualifying subordinated debt 1,800
Eligible credit reserves includable in Tier 2 capital 5,216
Total Basel III capital $ 60,032
Risk-weighted assets
Basel III standardized approach risk-weighted assets (b) $ 444,438
Average quarterly adjusted total assets
$ 566,826
Supplementary leverage exposure (c) $ 699,750
Basel III risk-based capital and leverage ratios (d)
Common equity tier 1 10.6 %
Tier 1 11.9 %
Total 13.5 %
Leverage (e) 9.4 %
Supplementary leverage ratio (c) 7.6 %
(a)As permitted, PNC and PNC Bank have elected to exclude AOCI related to both available-for-sale securities and pension and other post-retirement plans from CET1 capital.
(b)Basel III standardized approach risk-weighted-assets are based on the Basel III standardized approach rules and include credit and market risk-weighted assets.
(c)The supplementary leverage ratio is calculated based on tier 1 capital divided by supplementary leverage exposure, which takes into account the quarterly average of both on balance sheet assets as well as certain off-balance sheet items, including loan commitments and potential future exposure under derivative contracts.
(d)All ratios are calculated using the regulatory capital methodology applicable to PNC and calculated based on the standardized approach.
(e)The leverage ratio is calculated based on tier 1 capital divided by average quarterly adjusted total assets.
PNC's regulatory risk-based capital ratios are calculated using the standardized approach for determining risk-weighted assets. Under the standardized approach for determining credit risk-weighted assets, exposures are generally assigned a pre-defined risk weight. Exposures to high volatility commercial real estate, nonaccruals, FDMs, past due exposures and equity exposures are generally subject to higher risk weights than other types of exposures.
At December 31, 2025, PNC and PNC Bank were considered "well capitalized," based on applicable U.S. regulatory capital ratio requirements. To qualify as "well capitalized", PNC must have Basel III capital ratios of at least 6% for tier 1 risk-based capital and 10% for total risk-based capital, and PNC Bank must have Basel III capital ratios of at least 6.5% for common equity tier 1 risk-based capital, 8% for tier 1 risk-based capital, 10% for total risk-based capital and a leverage ratio of at least 5%.
68The PNC Financial Services Group, Inc. - 2025 Form 10-K
Federal banking regulators have stated that they expect the largest U.S. BHCs, including PNC, to have a level of regulatory capital well in excess of the regulatory minimum and have required the largest U.S. BHCs, including PNC, to have a capital buffer sufficient to withstand losses and allow them to meet the credit needs of their customers through estimated stress scenarios. We seek to manage our capital consistent with these regulatory principles, and we believe that our December 31, 2025 capital levels were aligned with them.
We provide additional information regarding regulatory capital requirements and some of their potential impacts, including the proposed rules to adjust the Basel III framework, in the Supervision and Regulation section of Item 1 Business, Item 1A Risk Factors and Note 19 Regulatory Matters.
Market Risk Management
Market risk is the risk of a loss in earnings or economic value due to adverse movements in market factors such as interest rates, credit spreads, foreign exchange rates, commodity prices and equity prices. We are exposed to market risk primarily by our involvement in the following activities, among others:
•Traditional banking activities of gathering deposits and extending loans,
•Fixed income securities, derivatives and foreign exchange activities, and securities underwriting as a result of customer activities and our investment portfolio, and
•Other investments, including equity, and activities whose economic values are directly impacted by market factors.
We have established enterprise-wide policies and methodologies to identify, measure, monitor and report market risk. Market Risk Management provides independent oversight by monitoring compliance with established guidelines and reporting significant risks in the business to management committees and, where appropriate, the Risk Committee of the Board of Directors.
Market Risk Management - Interest Rate Risk
Interest rate risk results primarily from our traditional banking activities of gathering deposits and extending loans. Many factors, including economic and financial conditions, movements in interest rates and consumer preferences, affect the difference between the interest that we earn on assets, the interest that we pay on liabilities and the level of our noninterest-bearing funding sources. Due to the repricing term mismatches and embedded options inherent in certain of these products, changes in market interest rates not only affect expected near-term earnings, but also the economic values of these assets and liabilities.
Our Asset and Liability Management group centrally manages interest rate risk as prescribed in our market risk-related risk management policies, which are approved by management's ALCO and the Risk Committee of the Board of Directors.
PNC utilizes sensitivities of NII and EVE to a set of interest rate scenarios to identify and measure its short-term and long-term structural interest rate risks.
The following table includes NII sensitivity results as of December 31, 2025 and 2024:
Table 33: Net Interest Income Sensitivity Analysis
December 31, 2025 December 31, 2024
Net Interest Income Sensitivity Simulation (a)
Effect on NII in the first year from shocked interest rate:
200 basis point instantaneous increase
2.0 % (0.6) %
200 basis point instantaneous decrease
(2.9)% (0.5) %
(a)The effect on NII in the first year from a 100 basis point instantaneous increase or decrease is approximately half of the disclosed results for the 200 basis point scenarios.
When forecasting NII, we make certain key assumptions that can materially impact the resulting sensitivities, including the following:
Future Balance Sheet Composition:Our balance sheet composition is dynamic and based on our forecasted expectations. The projected balance sheet composition by the end of year one is generally consistent with the spot composition at December 31, 2025.
Balance Sheet Forecast:Our balance sheet forecast is based on various assumptions that include key interest rate risk aspects such as loan and deposit growth, as well as mix, and is consistent with our guidance.
Deposit Betas: Deposit pricing changes are primarily driven by changes in the Federal Funds rate. PNC's cumulative deposit beta was 41% through December 2025. We define the cumulative deposit beta as the change in deposit rate paid on total interest-bearing deposits divided by the change in the upper level of the average stated Federal Funds rate range since August 2024, the start of the current easing rate cycle. For rate sensitivity purposes, PNC assumes the cumulative deposit beta will increase modestly
from the current level. For interest rate risk modeling, PNC uses dynamic beta models to adjust assumed repricing sensitivity
depending on market rate levels as well as other factors. The dynamic beta assumptions reflect historical experience as well as future
The PNC Financial Services Group, Inc. - 2025 Form 10-K 69
expectations, and are periodically updated to reflect the current view of future expectations. Actual deposit rates paid may differ from
modeled projections due to variables such as competition for deposits and customer behavior.
Asset Prepayments:PNC includes prepayment assumptions for both loan and investment portfolios. Mortgage and home equity portfolios utilize an industry standard model to drive estimated prepayments that increase in lower rate environments. Commercial and other consumer loan portfolios assume static constant prepayment rates that are consistent across rate scenarios, as those portfolios historically do not exhibit significantly different prepayment behaviors based upon the level of market rates.
Impact of Derivatives: As part of our risk management strategy, PNC uses interest rate derivatives, some of which are forward starting, to hedge floating rate commercial loans. PNC had $60.0 billion in active and forward starting receive fix / pay float swaps as of December 31, 2025, with a weighted average duration of 2.3 years and an average fixed rate of 3.66%. PNC utilizes receive fix / pay float swaps to hedge fixed rate debt, as well as pay fix / receive float swaps to hedge the investment securities portfolio. See Note 15 Financial Derivatives for additional information on how we use derivatives to hedge these financial instruments.
Compared to December 31, 2024, there have been no material changes to our NII sensitivity assumptions, including data sources
that drive assumptions setting.
The following table includes EVE sensitivity results as of December 31, 2025 and 2024:
Table 34: Economic Value of Equity Sensitivity Analysis
December 31, 2025 December 31, 2024
Economic Value of Equity Sensitivity Simulation
200 basis point instantaneous increase
(1.7) % (6.5) %
200 basis point instantaneous decrease
(3.7)% 0.1%
EVE measures the present value of all projected future cash flows associated with a point-in-time balance sheet and does not include projected new volume. EVE sensitivity to interest rate changes is a complementary metric to NII sensitivity analysis and represents an estimation of long-term interest rate risk. PNC calculates its EVE sensitivity by measuring the changes in the economic value of assets, liabilities and off-balance sheet instruments in response to an instantaneous +/-200 bps parallel shift in interest rates. Similar to the NII sensitivity analysis, we incorporate dynamic deposit repricing and loan prepayment assumptions. Directionally, higher deposit beta assumptions result in increasing liability sensitivity whereas lower deposit betas increase asset sensitivity. Conceptually similar, higher loan prepayment assumptions cause an increase in asset sensitivity and lower prepayments result in an increase in liability sensitivity. These behavioral modeling assumptions are largely consistent between the EVE and NII sensitivity analyses, and also share the same starting balance sheet position as of December 31, 2025. Deposit attrition is also a significant contributor to EVE
sensitivity. Deposit attrition is projected based on a dynamic model developed using long-term historical deposit behavior in addition to management assumptions. PNC performs various sensitivity analyses to understand the impact of faster and slower deposit attrition, loan prepayments and deposit betas on our risk metrics, with the results reported to ALCO.
In the first quarter of 2025, PNC introduced a new deposit runoff model for EVE. Relative to the legacy model, the new deposit model
uses an improved functional form for capturing rate sensitivity and also takes into account more recent deposit behavioral data.
As a result of the introduction of the new deposit model, PNC's estimated balance sheet duration decreased, becoming more neutral.
The model change results in our estimated EVE having more symmetrical exposure to +200 bps and -200 bps shocks, as compared to
the prior model which resulted in our balance sheet facing greater exposure to a +200 bps rate shock and minimal exposure to a -200
bps rate shock.
Market Risk Management - Customer-Related Trading Risk
We engage in fixed income securities, derivatives and foreign exchange transactions to support our customers' investing and hedging activities. These transactions, related hedges and the credit and funding valuation adjustment related to our customer derivatives portfolio are marked-to-market daily and reported as customer-related trading activities. We do not engage in proprietary trading of these products.
We use VaR as the primary means to measure and monitor market risk in customer-related trading activities. VaR is used to estimate the probability of portfolio losses based on the statistical analysis of historical market risk factors. A diversified VaR reflects empirical correlations across different asset classes. We calculate a diversified VaR at a 95% confidence interval and the results for 2025 and 2024 were within our acceptable limits.
To help ensure the integrity of the models used to calculate VaR for each portfolio and enterprise-wide, we use a process known as backtesting. The backtesting process consists of comparing actual observations of gains or losses against the VaR levels that were calculated at the close of the prior day. Our VaR measure assumes that exposures remain constant and that recent market variability is a good predictor of future variability. Actual observations include customer-related revenue and intraday hedging, which helps to reduce losses and can reduce the number of instances actual losses exceed the prior day VaR measure. There were no instances during
70The PNC Financial Services Group, Inc. - 2025 Form 10-K
2025 and 2024 under our diversified VaR measure where actual losses exceeded the prior-day VaR measure. Our portfolio and enterprise-wide VaR models utilize a historical approach with a 500-day look-back period.
Customer-related trading revenue was $236 million in 2025 compared to $122 million in 2024 and is recorded in Capital markets and advisory noninterest income and Other interest income on our Consolidated Income Statement. The increase was primarily due to higher derivative customer-related trading revenue.
Market Risk Management - Equity And Other Investment Risk
Equity investment risk is the risk of potential losses associated with investing in both private and public equity markets. In addition to extending credit, taking deposits, underwriting securities and trading financial instruments, we make and manage direct investments in a variety of transactions, including management buyouts, recapitalizations and growth financings in a variety of industries. We also have investments in affiliated and non-affiliated funds that make similar investments in private equity, consistent with regulatory limitations. The economic and/or book value of these investments and other assets are directly affected by changes in market factors.
Various PNC business units manage our equity and other investment activities. Our businesses are responsible for making investment decisions within the approved policy limits and associated guidelines.
A summary of our equity investments follows:
Table 35: Equity Investments Summary
Dollars in millions December 31 2025 December 31 2024 Change
$ %
Tax credit investments $ 5,578 $ 5,066 $ 512 10 %
Private equity and other 5,212 4,534 678 15 %
Total $ 10,790 $ 9,600 $ 1,190 12 %
Tax Credit Investments
Included in our equity investments are direct tax credit investments and equity investments held by consolidated entities. These tax credit investment balances included unfunded commitments totaling $3.4 billion and $2.9 billion at December 31, 2025 and 2024, respectively. These unfunded commitments are included in Other liabilities on our Consolidated Balance Sheet.
Note 4 Loan Sale and Servicing Activities and Variable Interest Entities has further information on tax credit investments.
Private Equity and Other
The largest component of our other equity investments is our private equity portfolio. The private equity portfolio is an illiquid portfolio consisting of mezzanine and equity investments that vary by industry, stage and type of investment. Private equity investments carried at estimated fair value totaled $2.8 billion and $2.3 billion at December 31, 2025 and 2024, respectively. As of December 31, 2025, $2.5 billion was invested directly in a variety of companies, and $0.3 billion was invested indirectly through various private equity funds. Changes in fair value of private equity investments are recognized in Other noninterest income.See the Supervision and Regulation section in Item 1 of this Report for discussion of the Volcker Rule limitations on our interests in and relationships with private funds.
PNC owns Visa Class B-2 common shares which were previously converted from Visa Class B-1 common shares as a result of the
Visa exchange program in 2024. The Visa Class B-2 common shares, which are included in our other equity investments at cost,
remain subject to the same restrictions that were imposed on the Visa Class B-1 common shares. Participation in the exchange
required PNC to agree to a make-whole agreement that subjects PNC to the same indemnity obligations to Visa as prior to
participation in the exchange program.
The Visa Class B-2 common shares that we own are transferable only under limited circumstances until either the resolution of the pending interchange litigation or Visa launches another exchange program allowing PNC to convert a portion of its Visa Class B-2 common shares into freely transferable Visa Class C common shares. At December 31, 2025, the estimated value of our total investment in the Visa Class B-2 common shares was approximately $0.9 billion while our cost basis was insignificant. The estimated value does not represent fair value of the Visa Class B-2 common shares given the shares' limited transferability and the lack of observable transactions in the marketplace. See Note 14 Fair Value and Note 20 Legal Proceedings for additional information regarding our Visa agreements.
On February 13, 2026, Visa announced that its Board of Directors authorized a successive exchange offer for its outstanding Class B common stock as promptly as practicable after certain conditions are met, subject to any unforeseen circumstances. The required conditions to conducting the exchange are (i) one year has passed since the initial exchange offer for Class B-1 common stock; and (ii) the estimated interchange reimbursement fees at issue in unresolved claims for damages in the U.S. covered litigation have been
The PNC Financial Services Group, Inc. - 2025 Form 10-K 71
reduced by 50% or more since October 1, 2023, as determined by Visa. More than one year has passed since the launch of the initial exchange offer and the second condition is expected to occur within the next several weeks. The timing of the exchange offer will be subject to occurrence of these conditions, review by the SEC of the registration statement, Visa's outlook of market conditions and other relevant factors at the time.
We also have certain other equity investments, the majority of which represent investments in affiliated and non-affiliated funds with both traditional and alternative investment strategies. Net gains related to these investments were $6 million in 2025 and $33 million in 2024.
Impact of Inflation
Our assets and liabilities are primarily financial in nature and typically have varying maturity dates. Accordingly, future changes in
prices do not affect the obligations to pay or receive fixed and determinable amounts of money. However, during periods of inflation,
there may be a subsequent impact affecting certain fixed costs or expenses, an erosion of customer purchasing power, and fluctuations in the need or demand for our products and services. When significant levels of inflation occur, our business could potentially be impacted by, among other things, reducing our tolerance for extending credit or causing us to incur additional credit losses resulting from possible increased default rates. While the inflation rate remains above the Federal Reserve's 2% target in 2025, it has declined compared to 2024, resulting in continued easing of the Federal Reserve's monetary policy. See Item 1A Risk Factors, our Executive Summary and Cautionary Statement Regarding Forward-Looking Information in this Item 7 for further discussion of inflation and its overall impact to the economy, our borrowers' ability to repay their obligations and certain costs and expenses to PNC.
Financial Derivatives
Financial derivatives involve, to varying degrees, market and credit risk. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional and an underlying as specified in the contract. Therefore, cash requirements and exposure to credit risk are significantly less than the notional amount on these instruments.
We use a variety of financial derivatives as part of the overall asset and liability risk management process to help manage exposure to market (primarily interest rate) and credit risk inherent in our business activities. We also enter into derivatives with customers to facilitate their risk management activities.
Further information on our financial derivatives is presented in Note 1 Accounting Policies, Note 14 Fair Value and Note 15 Financial Derivatives.
Not all elements of market and credit risk are addressed through the use of financial derivatives, and such instruments may be ineffective for their intended purposes due to unanticipated market changes, among other reasons.
Operational Risk Management
Operational risk is the risk to PNC's current or projected financial condition and resilience arising from inadequate or failed internal processes or systems, human errors or misconduct or adverse external events. Operational risk is inherent to the entire organization.
Operational risk management is embedded in our culture and decision-making processes through a systematic approach whereby operational risks and exposures are: (i) identified and assessed; (ii) managed through the design and implementation of controls; (iii) measured and evaluated against our risk tolerance limits; and (iv) reported to management and the Risk Committee of the Board of Directors. Strong operational risk management and well-informed risk-based decisions benefit us by improving the customer experience, enhancing compliance, reducing reputational risk, minimizing losses, and supporting robust stress testing and capital planning.
The Operational Risk Management Framework is designed to provide effective and consistent management of operational risk. The primary purpose of the framework is to enable us to understand our operational risks and manage them to the desired risk profile, in line with our Risk Appetite. Additionally, the guidance established within the framework assists management in making well-informed risk-based business decisions.
The framework provides a disciplined and structured process for us to manage operational risk across eight operational risk domains. These domains provide a comprehensive view of operational risk and allow us to discuss operational risk in a standard way, facilitating reporting and ongoing risk mitigation.
The operational risk domains are:
•Operations: Risk resulting from inadequate or failed internal processes, misconduct or errors of people or fraud.
•Compliance: Risk arising from violations of laws, rules or regulations including nonconformance with prescribed practices and industry standards driven by self-regulatory organizations.
•Data Management: Risk associated with data accuracy, integrity or quality.
72The PNC Financial Services Group, Inc. - 2025 Form 10-K
•Model: Risk associated with the design, implementation and ongoing use and management of models.
•Technology and Systems: Risk associated with the use, operation and adoption of technology.
•Information Security: Risk resulting from the failure to protect information and ensure appropriate access to, and use and handling of, information assets.
•Business Continuity: Risk of potential disruptive events to business activities.
•Third Party: Risk arising from failure of third-party providers to conduct activity in a safe and sound manner and in compliance with contract provisions and applicable laws and regulations.
We utilize operational risk management programs within the framework, including Risk and Control Self-Assessments, scenario analysis, and internal and external loss event reviews and analysis, to assess existing risks, determine potential/emerging risks and evaluate the effectiveness of internal controls. Program tools and methodology assist our business managers in identifying potential risks and control gaps.
Lines of business are responsible for identifying, owning, managing and monitoring the operational risks and controls associated with their business activities and product or service offerings to within acceptable levels. Centralized functions, such as Business Continuity, Enterprise Third Party Management and Information Security, are responsible for the development, implementation and management of their individual programs and for the development and maintenance of the policies, procedures, methodologies, tools and technology utilized across the enterprise to identify, assess, monitor and report program risks. Additionally, independent risk management reviews and challenges line of business adherence to the framework to help ensure proper controls are in place and appropriate risk mitigation plans are established as necessary.
Compliance Risk
Enterprise Compliance is responsible for oversight of compliance risk for the organization. Compliance issues are identified and tracked through enterprise-wide monitoring and testing activities. Compliance risk issues are escalated through a comprehensive risk reporting process at both a business and enterprise level and incorporated, as appropriate, into the development and assessment of our operational risk profile. A management committee, chaired by the Chief Compliance Officer, is responsible for oversight of compliance and fiduciary risk management programs across PNC. Enterprise Compliance, through the Regulatory Change Program, helps PNC understand and proactively address emerging regulatory topics and risks as well as respond to changes in applicable laws and regulations. To understand emerging issues impacting the industry, Enterprise Compliance communicates regularly with various regulators having supervisory or regulatory responsibilities with respect to us, our subsidiaries, or businesses and participates in forums focused on regulatory and compliance matters in the financial services industry.
Information Security Risk
The Information Security component of our Operational Risk Management Framework is responsible for protecting information assets to achieve business objectives, which includes cybersecurity. PNC's cybersecurity program is designed to identify risks to sensitive information, protect that information, detect threats and events and maintain an appropriate response and recovery capability to help ensure resilience against information security incidents. The program includes, among other things, annual security and privacy training for all PNC employees and quarterly phishing exercises to raise employee awareness. Our security program is also regularly examined by federal regulators for compliance with financial regulations and standards. The program also establishes expectations for information asset management, system development security, identity and access management, incident management, threat and vulnerability management, security operations management and third- and fourth-party security. For additional information, see Item 1C Cybersecurity of this Report.
Conduct, Reputational and Strategic Risk
PNC's risk culture seeks to reinforce the appropriate protocols for responsible and ethical behavior through sound processes and controls. In order to promote a robust risk culture, the Board and executive management establish code of conduct and professional standards to which all employees must adhere. A strong risk culture discourages misconduct and supports conduct risk management at PNC. Conduct risk is defined as the risk that employees fail to comply with the ethical standards expected of them. Strong conduct risk management is important in supporting PNC's risk culture where risk management is every employee's responsibility. That responsibility enables the organization to operate within our risk appetite and emphasizes complying with laws and regulations. Reputational risk is another element of the ERM Framework and is defined as risk to PNC's franchise, brand, and/or value based on a negative perception of PNC by its stakeholders and/or the changing expectations of its stakeholders. This risk can produce quantifiable impact materializing through means such as PNC's brand value, corporate image, stock price, or other metric measuring the value of PNC or future earnings/ability to achieve business growth or meet strategic priorities. Another element of the ERM Framework that is also critical to optimizing shareholder returns is strategic risk. Strategic risk is the risk to earnings, capital, or liquidity that may arise from adverse business decisions, improper implementation of business decisions and/or inadequate response to changes in the business environment. Strategic risk is considered and assessed by our businesses in the annual strategic planning processes and monitored on an on-going basis as those plans are carried out.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 73
AVERAGECONSOLIDATED BALANCESHEETANDNETINTEREST ANALYSIS
The following tables show PNC's average consolidated balance sheet results and analysis of net interest income, as well as the year-to-year changes in net interest income.
Table 36: Average Consolidated Balance Sheet and Net Interest Analysis (a) (b) (c)
2025 2024 2023
Taxable-equivalent basis
Dollars in millions 		Average
Balances 		Interest
Income/
Expense 		Average
Yields/
Rates 		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 $ 34,170 $ 1,287 3.77 % $ 31,535 $ 1,040 3.30 % $ 31,899 $ 912 2.86 %
U.S. Treasury and government agencies 26,180 1,176 4.49 % 16,010 740 4.62 % 8,271 183 2.21 %
Other 7,957 303 3.81 % 7,291 268 3.68 % 6,653 209 3.14 %
Total securities available-for-sale 68,307 2,766 4.05 % 54,836 2,048 3.73 % 46,823 1,304 2.78 %
Securities held-to-maturity
Residential mortgage-backed 41,530 1,242 2.99 % 41,846 1,173 2.80 % 44,517 1,217 2.73 %
U.S. Treasury and government agencies 26,182 396 1.51 % 34,360 463 1.35 % 36,790 490 1.33 %
Other 6,678 290 4.34 % 9,700 460 4.74 % 12,221 557 4.56 %
Total securities held-to-maturity 74,390 1,928 2.59 % 85,906 2,096 2.44 % 93,528 2,264 2.42 %
Total investment securities 142,697 4,694 3.29 % 140,742 4,144 2.94 % 140,351 3,568 2.54 %
Loans
Commercial and industrial 185,786 10,756 5.79 % 177,210 11,087 6.26 % 179,650 10,494 5.84 %
Commercial real estate 31,473 1,908 6.06 % 35,241 2,352 6.67 % 35,923 2,336 6.50 %
Equipment lease financing 6,841 348 5.09 % 6,557 356 5.43 % 6,423 297 4.62 %
Consumer 54,103 3,858 7.13 % 53,678 3,914 7.29 % 54,835 3,675 6.70 %
Residential real estate 45,178 1,699 3.76 % 47,108 1,747 3.71 % 46,689 1,621 3.47 %
Total loans 323,381 18,569 5.74 % 319,794 19,456 6.08 % 323,520 18,423 5.69 %
Interest-earning deposits with banks 33,360 1,439 4.31 % 43,145 2,303 5.34 % 36,645 1,902 5.19 %
Other interest-earning assets 13,245 722 5.45 % 9,135 612 6.70 % 8,884 562 6.33 %
Total interest-earning assets/interest income 512,683 25,424 4.96 % 512,816 26,515 5.17 % 509,400 24,455 4.80 %
Noninterest-earning assets 53,785 52,067 49,370
Total assets $ 566,468 $ 564,883 $ 558,770
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market $ 74,670 2,208 2.96 % $ 70,331 2,392 3.40 % $ 65,037 1,890 2.91 %
Demand 128,230 2,403 1.87 % 122,095 2,706 2.22 % 124,084 2,444 1.97 %
Savings 97,061 1,592 1.64 % 96,708 1,746 1.81 % 101,470 1,381 1.36 %
Time deposits 35,568 1,294 3.64 % 35,301 1,557 4.41 % 24,802 894 3.60 %
Total interest-bearing deposits 335,529 7,497 2.23 % 324,435 8,401 2.59 % 315,393 6,609 2.10 %
Borrowed funds
Federal Home Loan Bank advances 17,563 831 4.73 % 32,345 1,821 5.63 % 34,440 1,864 5.41 %
Senior debt 36,941 2,107 5.70 % 30,751 2,022 6.58 % 22,696 1,373 6.05 %
Subordinated debt 3,727 211 5.66 % 4,574 300 6.56 % 5,580 348 6.24 %
Other 5,870 251 4.28 % 6,391 341 5.34 % 4,566 198 4.34 %
Total borrowed funds 64,101 3,400 5.30 % 74,061 4,484 6.05 % 67,282 3,783 5.62 %
Total interest-bearing liabilities/interest expense 399,630 10,897 2.73 % 398,496 12,885 3.23 % 382,675 10,392 2.72 %
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits 93,283 96,772 111,670
Accrued expenses and other liabilities 16,451 17,004 15,759
Equity 57,104 52,611 48,666
Total liabilities and equity $ 566,468 $ 564,883 $ 558,770
Interest rate spread 2.23 % 1.94 % 2.08 %
Benefit from use of noninterest bearing sources 0.60 0.72 0.68
Net interest income/margin $ 14,527 2.83 % $ 13,630 2.66 % $ 14,063 2.76 %
(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. Fair value 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).
(b)Loan fees for the years ended December 31, 2025, 2024 and 2023 were $172 million, $189 million and $183 million, respectively.
(c)Interest income calculated as taxable-equivalent interest income. See Reconciliation of Taxable-Equivalent Net Interest Income in the Non-GAAP Financial Information section for more information.
74The PNC Financial Services Group, Inc. - 2025 Form 10-K
Table 37: Analysis of Year-to-Year Changes in Net Interest Income (a) (b)
2025/2024 2024/2023
Taxable-equivalent basis Increase/(Decrease) in Income/
Expense Due to Changes in: 		Increase/(Decrease) in Income/
Expense Due to Changes in:
In millions Volume Rate Total Volume Rate Total
Interest-Earning Assets
Investment securities
Securities available-for-sale
Residential mortgage-backed $ 91 $ 156 $ 247 $ (10) $ 138 $ 128
U.S. Treasury and government agencies $ 457 $ (21) 436 $ 257 $ 300 557
Other $ 26 $ 9 35 $ 21 $ 38 59
Total securities available-for-sale $ 532 $ 186 718 $ 248 $ 496 744
Securities held-to-maturity
Residential mortgage-backed $ (9) $ 78 69 $ (74) $ 30 (44)
U.S. Treasury and government agencies $ (119) $ 52 (67) $ (33) $ 6 (27)
Other $ (134) $ (36) (170) $ (118) $ 21 (97)
Total securities held-to-maturity $ (293) $ 125 (168) $ (186) $ 18 (168)
Total investment securities $ 59 $ 491 550 $ 10 $ 566 576
Loans
Commercial and industrial $ 521 $ (852) (331) $ (145) $ 738 593
Commercial real estate $ (239) $ (205) (444) $ (45) $ 61 16
Equipment lease financing $ 15 $ (23) (8) $ 6 $ 53 59
Consumer $ 31 $ (87) (56) $ (79) $ 318 239
Residential real estate $ (73) $ 25 (48) $ 15 $ 111 126
Total loans $ 216 $ (1,103) (887) $ (214) $ 1,247 1,033
Interest-earning deposits with banks $ (468) $ (396) (864) $ 346 $ 55 401
Other interest-earning assets $ 239 $ (129) 110 $ 16 $ 34 50
Total interest-earning assets $ (7) $ (1,084) $ (1,091) $ 165 $ 1,895 $ 2,060
Interest-Bearing Liabilities
Interest-bearing deposits
Money market $ 142 $ (326) $ (184) $ 162 $ 340 $ 502
Demand $ 131 $ (434) (303) $ (40) $ 302 262
Savings $ 6 $ (160) (154) $ (68) $ 433 365
Time deposits $ 12 $ (275) (263) $ 434 $ 229 663
Total interest-bearing deposits $ 279 $ (1,183) (904) $ 194 $ 1,598 1,792
Borrowed funds
Federal Home Loan Bank advances $ (733) $ (257) (990) $ (116) $ 73 (43)
Senior debt $ 374 $ (289) 85 $ 522 $ 127 649
Subordinated debt $ (51) $ (38) (89) $ (65) $ 17 (48)
Other $ (26) $ (64) (90) $ 90 $ 53 143
Total borrowed funds $ (564) $ (520) (1,084) $ 397 $ 304 701
Total interest-bearing liabilities $ 37 $ (2,025) (1,988) $ 448 $ 2,045 2,493
Change in net interest income $ (4) $ 901 $ 897 $ 91 $ (524) $ (433)
(a)Changes attributable to rate/volume are prorated into rate and volume components.
(b)Interest income is calculated as taxable-equivalent interest income. To provide more meaningful comparisons of interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP. See Reconciliation of Taxable-Equivalent Net Interest Income in the Non-GAAP Financial Information section for more information.
NON-GAAP FINANCIALINFORMATION
PNC reports certain financial measures that are not in accordance with GAAP. These non-GAAP financial measures are provided as supplemental information to the financial measures in this Report that are calculated and presented in accordance with GAAP. While we believe that these non-GAAP measures are useful tools for the purpose of evaluating certain financial results, they should not be considered superior to and are not intended to be considered in isolation or as a substitute for the related GAAP financial measures presented in this Report.
The PNC Financial Services Group, Inc. - 2025 Form 10-K 75
Table 38: Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP) (a)
Year ended December 31
In millions
2025 2024 2023
Net interest income (GAAP) $ 14,410 $ 13,499 $ 13,916
Taxable-equivalent adjustments 117 131 147
Net interest income (non-GAAP) $ 14,527 $ 13,630 $ 14,063
(a)The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of net interest income, we use interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP.
Table 39: Reconciliation of Tangible Book Value Per Common Share (non-GAAP)
December 31
Dollars in millions, except per share data 		2025 2024 2023
Book value per common share $ 140.44 $ 122.94 $ 112.72
Tangible book value per common share
Common shareholders' equity $ 54,828 $ 48,676 $ 44,864
Goodwill and other intangible assets (11,138) (11,171) (11,244)
Deferred tax liabilities on goodwill and other intangible assets 237 241 244
Tangible common shareholders' equity $ 43,927 $ 37,746 $ 33,864
Period-end common shares outstanding (in millions) 390 396 398
Tangible book value per common share (non-GAAP) (a) $ 112.51 $ 95.33 $ 85.08
(a)Tangible book value per common share is a non-GAAP measure and is calculated based on tangible common shareholders' equity divided by period-end common shares outstanding. We believe this non-GAAP measure serves as a useful tool to help evaluate the strength and discipline of a company's capital management strategies and as an additional, conservative measure of total company value.
CRITICALACCOUNTINGESTIMATES ANDJUDGMENTS
Our consolidated financial statements are prepared by applying certain accounting policies. Note 1 Accounting Policies describes the most significant accounting policies that we use. Certain of these policies require us to make estimates or economic assumptions that may vary under different assumptions or conditions, and such variations may significantly affect our reported results and financial position for the period or in future periods. The following details the critical estimates and judgments around the ACL:
Allowance for Credit Losses
We maintain the ACL at levels that we believe to be appropriate as of the balance sheet date to absorb expected credit losses on our existing investment securities, loans, equipment finance leases, other financial assets and unfunded lending related commitments, for the remaining estimated contractual term of the assets or exposures, taking into consideration expected prepayments and estimated recoveries. Our determination of the ACL is based on historical loss and performance experience, as well as current borrower and transaction characteristics including collateral type and quality, current economic conditions, reasonable and supportable forecasts of future economic conditions and other relevant factors. We use methods sensitive to changes in economic conditions to interpret these factors and to estimate expected credit losses. We evaluate and, when appropriate, enhance the quality of our data and models and other methods used to estimate the ACL on an ongoing basis. The major drivers of ACL estimates include, but are not limited to:
•Current economic conditions: Our forecast of expected losses depends on economic conditions as of the estimation date. As current economic conditions evolve, forecasted losses could be materially affected.
•Scenario weights and design: Our loss estimates are sensitive to the shape, direction and rate of change of macroeconomic forecasts and thus vary significantly between upside and downside scenarios. Changes to the probability weights assigned to these scenarios and the timing of peak business cycles reflected by the scenarios could materially affect our loss estimates.
•Current borrower quality: Our forecast of expected losses depends on current borrower and transaction characteristics, including credit metrics and collateral type/quality. As borrower quality evolves, forecasted losses could be materially affected.
•Portfolio composition: Changes to portfolio volume and mix could materially affect our estimates, as CECL reserves
would be recognized upon origination or acquisition and derecognized upon paydown, maturity or sale.
We also incorporate qualitative factors in the ACL that reflect our best estimate of expected losses that may not be adequately represented in our quantitative methods or economic assumptions, as discussed below and in the Allowance for Credit Losses section of Note 1 Accounting Policies.
For all assets and unfunded lending related commitments within the scope of the CECL standard, the applicable ACL is composed of one or a combination of the following components: (i) collectively assessed or pooled reserves, (ii) individually assessed reserves, and
76The PNC Financial Services Group, Inc. - 2025 Form 10-K
(iii) qualitative (judgmental) reserves. Through this approach, we believe the reserve levels appropriately reflect the expected credit losses in the portfolio as of the balance sheet date.
Reasonable and Supportable Economic Forecast
Pursuant to the CECL standard, we are required to consider reasonable and supportable forecasts in estimating expected credit losses. For this purpose, we have established a framework that includes a three-year forecast period and the use of four economic scenarios with associated probability weights, which in combination create a forecast of expected economic outcomes. Credit losses estimated in our reasonable and supportable forecast period are sensitive to the shape and severity of the scenarios used and weights assigned to them.
To forecast the distribution of economic outcomes over the reasonable and supportable forecast period, we generate four economic forecast scenarios using a combination of quantitative macroeconomic models, other measures of economic activity and forward-looking expert judgment. Each scenario is then given an associated probability (weight) to represent our current expectation within that distribution over the forecast period. This process is informed by current economic conditions, expected business cycle evolution and the expert judgment of PNC's RAC. This approach seeks to provide a reasonable representation of the forecast of expected economic outcomes and is used to estimate expected credit losses across a variety of loans, securities and other financial assets. Each quarter, the scenarios and their respective weights are presented to RAC for approval.
The scenarios used for the period ended December 31, 2025 consider, among other factors, ongoing impacts of trade and fiscal policy, including tariffs, on the U.S. economic outlook. Given these factors, growth is expected to slow from current levels in the coming quarters. While recession risks remain elevated, our most likely expectation at December 31, 2025 is that the U.S. economy avoids a recession. We believe the economic scenarios effectively reflect the distribution of potential economic outcomes.
We used a number of economic variables in our scenarios, with two of the most significant drivers being real GDP and the U.S. unemployment rate. The following table presents a comparison of these two economic variables based on the weighted-average scenario forecasts used in determining our ACL at December 31, 2025 and 2024.
Table 40: Key Macroeconomic Variables in CECL Weighted-Average Scenarios
Assumptions as of December 31, 2025
2026 2027 2028
U.S. real GDP (a) 0.5% 2.0% 2.0%
U.S. Unemployment Rate (b) 5.1% 4.9% 4.4%
Assumptions as of December 31, 2024
2025 2026 2027
U.S. real GDP (a) 0.7% 2.2% 2.2%
U.S. Unemployment Rate (c) 4.8% 4.7% 4.4%
(a)Represents year-over-year growth rates.
(b)Represents quarterly average rate at December 31, 2026, 2027 and 2028, respectively.
(c)Represents quarterly average rate at December 31, 2025, 2026 and 2027, respectively.
Real GDP growth is expected to slow by the end of 2026 to 0.5% on a weighted average basis, down from the 2.2% assumed at December 31, 2024. Growth then rebounds to 2.0% where real GDP remains stable through 2027 and 2028. The weighted-average unemployment rate is expected to end 2026 at 5.1%, continuing to decrease to 4.9% in 2027, landing at 4.4% by the fourth quarter of 2028.
To provide additional context regarding the sensitivity of the ACL to a more pessimistic forecast of expected economic outcomes, we compared our modeled credit loss estimates under our most severe downside CECL scenario to our weighted average estimates. This severe downside scenario estimated that real GDP contracted in 2026 ending the year down 2.5% compared to 2025 levels, with growth picking up again by the end of 2027. The unemployment rate in this scenario increased to end 2026 at 6.6%, then peaks at 7.3% during 2027, before gradually improving to 6.1% by the end of 2028. This scenario does not reflect our current expectation at December 31, 2025, nor does it capture all the potential unknown variables that could arise in the forecast period, but it provides an approximation of a possible outcome under hypothetical severe conditions. This alternative scenario would result in a hypothetical increase in our modeled credit loss estimates of $2.0 billion at December 31, 2025. This sensitivity analysis considers only changes in the modeled credit loss estimates and does not consider potential increases or decreases in our qualitative component. The CECL methodology inherently requires a high degree of judgment, and as a result, it is possible that we may, at another point in time, reach different conclusions regarding our credit loss estimates.
Qualitative Component
As discussed in the Allowance for Credit Losses section of Note 1 Accounting Policies, we incorporate qualitative reserves in the ACL that reflect our best estimate of expected losses that may not be adequately represented in our quantitative methods or economic
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assumptions. Qualitative factors may include, but are not limited to, inherent forecasting limitations, model imprecision, timing of available information, and/or emerging and ongoing credit risks. At December 31, 2025, the qualitative framework considers PNC's view of the current state of the economy, which continues to reflect uncertainty due to the fundamental change in office demand, tariff and trade driven pressures, interest rate movements and housing affordability. Our most significant qualitative factor was related to the office portfolio of the commercial real estate loan class.
We believe the economic scenarios effectively reflect the distribution of potential economic outcomes. Additionally, through in-depth and granular analysis we have addressed reserve requirements for the specific populations most affected in the current environment. Through this approach, we believe the reserve levels appropriately reflect the expected credit losses in the portfolio as of the balance sheet date.
See the following for additional details on the components of our ACL:
•Allowance for Credit Losses in the Credit Risk Management section of this Item 7, and
•Note 1 Accounting Policies, Note 2 Investment Securities, and Note 3 Loans and Related Allowance for Credit Losses.
Residential and Commercial Mortgage Servicing Rights
We elect to measure our MSRs at fair value. This election was made to be consistent with our risk management strategy to hedge changes in the fair value of these assets. The fair value of our MSRs is estimated by using a discounted cash flow valuation model that calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs, and other factors which are determined based on current market conditions.
We employ risk management strategies designed to protect the value of MSRs from changes in interest rates and related market factors. The values of the MSRs are economically hedged with securities and derivatives, including, but not limited to, interest-rate swaps, options, and forward mortgage-backed and futures contracts. As interest rates change, these financial instruments are expected to have changes in fair value inverse to the change in fair value of the hedged MSR portfolios. The hedge relationships are actively managed in response to changing market conditions over the life of the MSRs. Selecting appropriate financial instruments to economically hedge residential or commercial MSRs requires significant management judgment to assess how rates and prepayment speeds could affect the future values of MSRs. Hedging results can frequently be less predictable in the short term, but over longer periods of time, they are expected to protect the economic value of the MSRs.
For information on how each estimate has changed and a sensitivity analysis of the hypothetical effect of the fair value of MSRs to immediate adverse changes in key assumptions, see Note 5 Goodwill and Mortgage Servicing Rights. For additional information on our residential and commercial MSRs, see Note 1 Accounting Policies, Note 5 Goodwill and Mortgage Servicing Rights and Note 14 Fair Value.
Fair Value Measurements - Level 3
We must use estimates, assumptions and judgments when assets and liabilities are required to be recorded at, or adjusted to reflect, fair value. Assets and liabilities carried at fair value inherently result in a higher degree of financial statement volatility. When observable price and third-party information is not available, we estimate fair value primarily by using cash flow and other financial modeling techniques. Changes in underlying factors, assumptions, or estimates in any of these valuation techniques could materially impact our future financial condition and results of operations.
We apply ASC 820 - Fair Value Measurements. This guidance defines fair value as the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. This guidance requires a three-level hierarchy for disclosure of assets and liabilities recorded at fair value. The classification of assets and liabilities within the hierarchy is based on whether the inputs to the valuation methodology used in the measurement are observable or unobservable. Level 3 assets and liabilities are those where the fair value is estimated using significant unobservable inputs. An asset or liability's classification as Level 2 or Level 3 is based upon the specific facts and circumstances associated with each instrument, and management applies judgment regarding the significance of unobservable inputs to each asset or liability when determining its fair value level classification. In addition to MSRs, certain of our private equity investments and available-for-sale securities have a high level of estimation uncertainty and require significant management judgment to determine the fair value. While estimating potential sensitivities around fair value measurements is inherently challenging, we provide a summary of the key unobservable inputs as well as additional information on Level 3 fair value measurements in Note 14 Fair Value.
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Recently Issued Accounting Standards
Accounting Standards Update Description Financial Statement Impact
Disaggregation of Income Statement Expenses - ASU 2024-03
Issued November 2024
• Required with issuance of 2027 Form 10-K; early adoption is permitted.
• Requires public business entities to disclose, in the notes to financial statements and on an annual and interim basis, specified information about certain costs and expenses (including, if relevant: inventory purchases, employee compensation, depreciation, intangible asset amortization, and depreciation from oil and gas-producing activities).
• Requires qualitative descriptions of amounts not separately disaggregated to be disclosed.
• Requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity's definition of selling expenses.
• Allows for either a prospective or retrospective transition approach.
• We are currently evaluating the disclosure requirements within this ASU and do not plan to early adopt.
• This ASU will not impact our Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity or Consolidated Statement of Cash Flows.
• We expect to provide additional disaggregated income statement expense disclosures in accordance with this ASU.
Purchased Loans - ASU 2025-08
Issued November 2025
• Required effective date of January 1, 2027; early adoption is permitted.
• Expands the population of acquired financial assets subject to the gross-up approach, which requires recognition of an ACL for the estimate of credit losses at the acquisition date.
• Clarifies that loans (excluding credit cards) acquired without credit deterioration and deemed "seasoned" are purchased seasoned loans and accounted for using the gross-up approach at acquisition.
• Requires entities to evaluate whether loans acquired in an asset acquisition (or initially recognized through the consolidation of a VIE) are deemed "seasoned". A loan is seasoned if it was purchased at least 90 days after origination and the acquirer was not involved in the origination of the loan. All loans that are acquired without credit deterioration through a business combination are deemed "seasoned".
• Requires a prospective transition approach; the ASU is applied to loans that are acquired on or after the initial application date.
• We adopted this ASU on January 1, 2026.
• Adoption of this ASU will result in more acquired loans using the gross-up approach, which will eliminate the Provision for credit losses recognized on these loans upon acquisition. Otherwise, this ASU will not materially impact our Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity or Consolidated Statement of Cash Flows.
Targeted Improvements to the Accounting for Internal-Use Software - ASU 2025-06
Issued September 2025
• Required with issuance of 2028 Form 10-K; early adoption is permitted.
• Removes all references to project stages throughout Subtopic 350-40.
• Requires entities to start capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function(s) intended.
• Clarifies that (1) the disclosures in Subtopic 360-10, Property, Plant, and Equipment - Overall, are required for all capitalized internal-use software costs and (2) the intangibles disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs.
• Supersedes Subtopic 350-50, Intangibles - Goodwill and Other - Website Development Costs, and incorporates relevant and incremental guidance unique to website-specific development costs into Subtopic 350-40.
• Allows for either a prospective, modified prospective, or retrospective transition approach.
• We are currently evaluating the requirements within this ASU and do not plan to early adopt.
• This ASU will not impact our Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows.
Recently Adopted Accounting Pronouncements
See Note 1 Accounting Policies regarding the impact of new accounting pronouncements that we have adopted.
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CAUTIONARYSTATEMENTREGARDINGFORWARD-LOOKINGINFORMATION
We make statements in this Report, and we may from time to time make other statements, regarding our outlook for financial performance, such as earnings, revenues, expenses, tax rates, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or affecting us and our future business and operations, including our sustainability strategy, that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are typically identified by words such as "believe," "plan," "expect," "anticipate," "see," "look," "intend," "outlook," "project," "forecast," "estimate," "goal," "will," "should" and other similar words and expressions.
Forward-looking statements are necessarily subject to numerous assumptions, risks and uncertainties, which change over time. Future events or circumstances may change our outlook and may also affect the nature of the assumptions, risks and uncertainties to which our forward-looking statements are subject. Forward-looking statements speak only as of the date made. We do not assume any duty and do not undertake any obligation to update forward-looking statements. Actual results or future events could differ, possibly materially, from those anticipated in forward-looking statements, as well as from historical performance. As a result, we caution against placing undue reliance on any forward-looking statements.
Our forward-looking statements are subject to the following principal risks and uncertainties.
•Our businesses, financial results and balance sheet values are affected by business and economic conditions, including:
-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, market interest rates and inflation,
-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 sanctions, tariffs and other trade policies of the U.S. and its global trading partners,
-Impacts of changes in federal, state and local governmental policy, including on the regulatory landscape, capital markets, taxes, infrastructure spending and social programs,
-Our ability to attract, recruit and retain skilled employees, and
-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. These statements are based on our views that:
-PNC's baseline forecast remains for continued expansion, but slower economic growth in 2026 than in 2024 and 2025. Tariffs remain a drag on consumer spending and business investment, while AI-related capex and wealth effects have been key supports to growth. Consumer spending growth is slowing to a pace more consistent with household income growth. The One Big Beautiful Bill will be a net positive for economic growth in 2026.
-The baseline forecast anticipates real GDP growth slowing to around 2% in 2026, with continued modest job gains and the unemployment rate at around 4.5%. Tariffs remain a risk to the outlook, and a reversal in sentiment around AI or a large decline in equity prices would be drags. Weaker labor force growth could lead to weaker long-run growth.
-Our baseline forecast is for the Federal Reserve to keep the federal funds rate unchanged in the first half of this year, in a range between 3.50% and 3.75%. We expect modest additional easing in the second half of the year with 25 basis points cuts at the FOMC meetings in July and September 2026, resulting in a federal funds rate in the range of 3.00% to 3.25% by the fall. However, there are two-sided risks to this outlook: (1) if inflation re-accelerates or proves more persistent than expected, the Federal Reserve may cut less or (2) if growth falters or recession emerges, easing could be deeper and more prolonged.
•PNC's ability to take certain capital actions, including returning capital to shareholders, is subject to PNC meeting or exceeding an SCB established by the Federal Reserve Board in connection with the Federal Reserve Board's CCAR process.
•PNC's regulatory capital ratios in the future will depend on, among other things, its financial performance, the scope and terms of final capital regulations then in effect and management actions affecting the composition of PNC's balance sheet. In addition, PNC's ability to determine, evaluate and forecast regulatory capital ratios, and to take actions (such as capital distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development, validation and regulatory review of related models and the reliability of and risks resulting from extensive use of such models.
•Legal and regulatory developments could have an impact on our ability to operate our businesses, financial condition, results of operations, competitive position, reputation or pursuit of attractive acquisition opportunities. Reputational impacts could affect matters such as business generation and retention, liquidity, funding and ability to attract and retain employees. These developments could include:
-Changes to laws and regulations, including changes affecting oversight of the financial services industry, changes in the enforcement and interpretation of such laws and regulations, and changes in accounting and reporting standards.
-Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries resulting in monetary losses, costs, or alterations in our business practices, and potentially causing reputational harm to PNC.
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-Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with governmental agencies.
-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.
•Our reputation and business and operating results may be affected by our ability to appropriately meet or address environmental, social or governance targets, goals, commitments or concerns that may arise.
•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, the integration of the acquired businesses into PNC after closing or any failure to execute strategic or operational plans.
•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 manmade, natural and other disasters (including severe weather events), health emergencies, dislocations, geopolitical instabilities or events, terrorist activities, system failures or disruptions, security breaches, cyberattacks, international hostilities, or other extraordinary events beyond PNC's control through impacts on the economy and financial markets generally or on us or our counterparties, customers or third-party vendors and service providers specifically.
We provide greater detail regarding these as well as other factors in this Report, including in Item 1A Risk Factors, the Risk Management section of Item 7 and Note 20 Legal Proceedings. Our forward-looking statements may also be subject to other risks and uncertainties, including those discussed elsewhere in this Report or in our other filings with the SEC.
The PNC Financial Services Group Inc. published this content on February 20, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 20, 2026 at 18:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]