PNC Financial Services Group, Inc.: Form 10-K for the period ended Dec 31, 2025

Business Overview

The PNC Financial Services Group, Inc. is a financial services holding company headquartered in Pittsburgh, Pennsylvania and one of the largest diversified financial institutions in the U.S. PNC has businesses engaged in retail banking, corporate and institutional banking and asset management, providing many of our products and services nationally. We are organized around our customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Our retail branch network is located coast-to-coast, and we also have strategic international offices in four countries outside the U.S. At December 31, 2025, our consolidated total assets, total deposits and total shareholders’ equity were $573.6 billion, $440.9 billion and $60.6 billion, respectively.

We were incorporated under the laws of the Commonwealth of Pennsylvania in 1983 with the consolidation of Pittsburgh National Corporation and Provident National Corporation. Since 1983, we have diversified our geographical presence, business mix and product capabilities through organic growth, strategic bank and non-bank acquisitions and equity investments, and the formation of various non-banking subsidiaries. We primarily conduct our business through our primary domestic bank subsidiary, PNC Bank, a national banking association chartered and located in Wilmington, Delaware. We offer a broad range of deposit, credit and fee-based products and services to serve our customers. Our non-banking subsidiaries engage in activities that are financial in nature, including market-making, securities underwriting, and advisory services and other permissible investment and merchant banking related activities. See Note 22 Segment Reporting for additional details regarding our business segments, products and services.

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.

Subsidiaries

Our corporate legal structure at December 31, 2025 consisted of one domestic bank subsidiary, including its subsidiaries, and 52 active non-bank subsidiaries, in addition to various affordable housing investments and historic rehabilitation investments. For additional information on certain of our subsidiaries, see Exhibit 21 to this Report.

Supervision and Regulation

The PNC Financial Services Group, Inc., is a BHC under the BHC Act that has elected to be an FHC under the GLB Act. We are subject to numerous governmental regulations, some of which are highlighted below. See Note 19 Regulatory Matters for additional information regarding our regulatory matters.

As a BHC, PNC is subject to regulation under the BHC Act and to comprehensive consolidated supervision, regulation and examination by its primary regulator, the Federal Reserve. PNC primarily conducts its business through its domestic bank subsidiary, PNC Bank, which is a national banking association chartered under the laws of the U.S. PNC Bank is supervised and regulated primarily by the OCC, and with respect to some matters, by the FDIC and the CFPB.

On January 5, 2026, PNC acquired FirstBank Holding Company and its bank subsidiary, FirstBank, a Colorado state-chartered bank. FirstBank is primarily regulated by the Federal Reserve and the Colorado Division of Banking. We expect to merge FirstBank into PNC Bank this summer. Until the merger, FirstBank will remain a separate bank subsidiary of PNC.

Comprehensive examinations by our many regulators consider not only compliance with applicable laws, regulations and supervisory policies of the agencies, but also capital levels, asset quality, risk management effectiveness, the ability and performance of management and the Board of Directors, the effectiveness of internal controls and internal audit function, earnings, liquidity and various other factors.

The federal bank regulators have broad supervisory and enforcement authority with regard to BHCs and banks, including the power to conduct examinations and investigations, which potentially can result in the imposition of significant limitations on our activities and growth. The federal bank regulators generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity and take enforcement action against a regulated entity where the relevant agency determines, among other things, that the operations of the regulated entity or any of its subsidiaries fail to comply with applicable law or regulations, are conducted in an unsafe or unsound manner, or represent an unfair or deceptive act or practice. This supervisory framework, including the examination reports and supervisory ratings (which are not publicly available) of the agencies, could materially impact our operations.

The CFPB is responsible for examining us for compliance with most federal consumer financial protection laws, and the results of the CFPB’s examinations (which are not publicly available) also can result in restrictions or limitations on our operations.

We also are subject to regulation by the SEC by virtue of our status as a public company and by the SEC and the CFTC due to the nature of some of our businesses. Our businesses with operations outside the U.S. also are subject to the laws and regulations of the foreign jurisdictions in which they do business.

The scope of the laws and regulations and the intensity of supervision to which we are subject are continually under review. New legislation, administration changes, changes in rules promulgated by federal bank regulators, other federal and state regulatory authorities and self-regulatory organizations, or rescissions, withdrawals, or changes in the interpretation, application, or enforcement of existing laws and rules may directly affect the operations and profitability of our businesses. The more detailed description of the significant regulations to which we are subject included in this Report is based on current laws and regulations and is subject to potential material change. For additional information on the impact of the regulatory environment on us and the financial services industry, see Item 1A Risk Factors in this Report.

There are numerous rules governing the regulation of financial services institutions and their holding companies. Accordingly, the following discussion is general in nature and does not purport to be complete or to describe all of the laws, regulations and policies that apply to us. The regulatory framework applicable to financial services institutions and their holding companies is not intended primarily to protect our shareholders and our non-customer creditors, but rather to protect our customers (including depositors), the DIF, the financial markets, and the U.S. banking and financial system in general.

Banking Regulation and Supervision

Regulatory Capital Requirements. PNC and PNC Bank are subject to the regulatory capital requirements under the U.S. Basel III capital rules adopted by the Federal Reserve, for PNC, and by the OCC, for the Bank. The regulatory capital rules establish minimum requirements for the ratios of a banking organization’s regulatory capital to its risk-weighted assets, referred to as risk-based capital requirements, as well as for the ratios of its regulatory capital to measures of assets and other exposures, referred to as leverage capital requirements.

The federal banking agencies currently tailor the capital, liquidity and enhanced prudential requirements for banking organizations based on the asset size and risk profile (as measured by certain regulatory metrics) of the banking organization. The classification of any bank subsidiary of a BHC generally follows that of its parent BHC. PNC and PNC Bank currently are Category III banking organizations because PNC (i) has more than $250 billion, but less than $700 billion, in consolidated total assets, (ii) is not designated as a GSIB, and (iii) has less than $75 billion in cross-jurisdictional activity. Under the current rules, if PNC exceeds any of these thresholds or becomes a GSIB, PNC and PNC Bank would become a Category I or II institution and be subject to more stringent capital and liquidity standards. PNC’s acquisition of FirstBank did not affect PNC’s classification as a Category III banking organization.

The regulatory capital rules generally divide regulatory capital into three components: CET1 capital, additional tier 1 capital (which, together with CET1 capital, comprises tier 1 capital) and tier 2 capital. CET1 capital is generally common stock, retained earnings, and qualifying minority interests less required deductions. 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. Additional tier 1 capital generally includes, among other things, perpetual preferred stock and qualifying minority interests, less required deductions. Tier 2 capital generally comprises qualifying subordinated debt and, subject to certain quantitative limits, ACL, less any required deductions from tier 2 capital. The regulatory capital rules limit the extent to which minority interests in consolidated subsidiaries may be included in regulatory capital. Total capital is the sum of tier 1 capital and tier 2 capital.

In calculating regulatory capital, PNC and PNC Bank must deduct a number of components. For example, under the current regulatory capital rules, PNC and PNC Bank must deduct investments in unconsolidated financial institutions, MSRs and deferred tax assets (in each case, net of associated deferred tax liabilities) from CET1 capital to the extent such categories individually exceed 25% of the institution’s adjusted CET1 capital. PNC and PNC Bank are required to use the standardized approach for determining risk-weighted assets for purposes of calculating the risk-based capital ratios.

Under the Basel III capital rules, PNC and PNC Bank must maintain a minimum CET1 ratio of 4.5%, a tier 1 capital ratio of 6.0%, and a total capital ratio of 8.0% to be considered “adequately capitalized.” As described below, PNC is also subject to the Federal Reserve’s CCAR process and must hold a SCB, which must be satisfied solely with CET1. PNC’s SCB for the four-quarter period beginning October 1, 2025 is 2.5%. While PNC Bank is not subject to a SCB, PNC Bank is required to maintain a capital conservation buffer in the form of CET1 equal to a fixed 2.5% of risk-weighted assets.

PNC and PNC Bank must maintain risk-based capital above the minimum risk-based capital ratio requirements plus its SCB (in the case of PNC) or capital conservation buffer (in the case of PNC Bank) in order to avoid limitations on capital distributions. As a result, to avoid limitations on capital distributions and certain discretionary incentive compensation payments, PNC and PNC Bank must maintain a CET1 capital ratio of at least 7.0%, a tier 1 capital ratio of at least 8.5%, and a total capital ratio of at least 10.5%.

The Federal Reserve and OCC can also supplement the SCB or capital conservation buffer levels by a countercyclical capital buffer of up to an additional 2.5% of risk-weighted assets. This buffer, which must be held in the form of CET1 capital, is currently set at zero in the U.S.

The regulatory capital rules also require that banking organizations maintain a minimum amount of tier 1 capital as compared to average consolidated assets, referred to as the leverage ratio, of 4.0%. Category III banking organizations also must maintain a minimum amount of tier 1 capital as compared to total leverage exposure, referred to as the supplementary leverage ratio, of 3.0%. As of December 31, 2025, the leverage and supplementary leverage ratios of PNC and PNC Bank were above the required minimum level.

PNC and PNC Bank are not currently subject to the additional CET1 capital surcharge, minimum long-term debt requirement, minimum total loss-absorbing capacity or enhanced supplementary leverage ratio requirements that apply to U.S. GSIBs. In August 2023, the federal banking agencies proposed rules that would require Category II, III, and IV bank holding companies and banks to issue and maintain minimum amounts of long-term debt that satisfy certain requirements. Additionally, Category II, III, and IV bank holding companies would be subject to “clean holding company” requirements, which would prohibit such companies from entering into certain financial arrangements and cap certain liabilities. PNC, as a Category III holding company, and PNC Bank would be subject to the proposed rules. If the long-term debt rules were finalized in their current form, we would expect to achieve compliance through normal course funding. These proposed rules have not been finalized, and their future state is unclear.

Failure to meet applicable capital requirements could subject a banking organization to a variety of enforcement remedies available to the federal banking agencies, including limitations on capital distributions, the issuance of a capital directive to increase capital and, in severe cases, the termination of deposit insurance by the FDIC and the appointment of a conservator or receiver. In some cases, the extent of these powers depends upon whether the institution in question is considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” The thresholds at which an insured depository institution is considered “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized” are based on (i) the institution’s CET1, tier 1 and total risk-based capital ratios; (ii) the institution’s leverage ratio; and (iii) for the definitions of “adequately capitalized” and “undercapitalized,” the institution’s supplementary leverage ratio (if applicable). Business activities may also be affected by an institution’s capital classification. For example, PNC and PNC Bank must remain “well capitalized” for PNC to continue to take advantage of FHC status as described below.

At December 31, 2025, PNC and PNC Bank exceeded the required ratios for classification as “well capitalized.” For additional discussion of capital adequacy requirements, including the levels of capital required to be considered “well capitalized,” see the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report and Note 19 Regulatory Matters.

The federal banking agencies proposed a rule in July 2023 to implement the final components of the Basel III framework that would significantly revise the capital requirements for large banking organizations, including PNC and PNC Bank. The rule generally would align the regulatory capital elements and required deductions for Category III banking organizations, such as PNC and PNC Bank, with those currently applicable to Category I and II banking organizations and apply a new expanded risk-based approach for calculating risk-weighted assets. Among other impacts, PNC and PNC Bank would be required to recognize most elements of AOCI in regulatory capital and would be subject to more punitive deductions from CET1 for MSRs, deferred tax assets and investments in certain unconsolidated financial institutions. The agencies are expected to repropose the rule in 2026.

Stress Testing and Capital Planning. PNC is subject to the Federal Reserve’s capital plan rule, capital stress testing requirements and CCAR process, as well as the DFAST requirements of the Federal Reserve and the OCC.

As part of the CCAR process, the Federal Reserve undertakes a supervisory assessment of the capital planning process of BHCs, including PNC, that have $100 billion or more in total consolidated assets. This capital planning assessment is based on a review of a comprehensive capital plan submitted to the Federal Reserve that describes the Company’s planned capital actions, such as plans to pay or increase common stock dividends, engage in common stock repurchase programs, or issue or redeem preferred stock or other regulatory capital instruments during a nine quarter review period, as well as the results of stress tests conducted by both the company and the Federal Reserve under different hypothetical macroeconomic scenarios, including a supervisory severely adverse scenario provided by the Federal Reserve. Based on PNC’s performance under the Federal Reserve’s supervisory stress tests as part of CCAR 2025, PNC’s SCB for the four-quarter period beginning October 1, 2025, is the regulatory minimum of 2.5%.

As a Category III institution, PNC must also conduct a company-run DFAST stress test in even numbered years and release PNC’s projections of certain revenue, loss and capital results from the exercise under the agencies’ hypothetical supervisory severely adverse macroeconomic scenario and applying the agencies’ DFAST capital action assumptions. As part of the DFAST and annual CCAR processes, the Federal Reserve discloses certain revenue, loss and capital results from its supervisory stress testing exercises for each participating firm.

In April 2025, the Federal Reserve proposed to average stress test results over two consecutive years to reduce volatility in the SCB requirement. The proposal would also shift the applicable period of the SCB requirement from October 1 through September 30 of the following year, to January 1 through December 31 in the year following the CCAR exercise. The proposal was intended to be effective for the 2026 supervisory stress test but it has not been finalized.

In addition, in October 2025, the Federal Reserve issued proposals to seek comments on the scenarios for the 2026 supervisory stress test and on the enhanced transparency to its stress testing process. Under the proposals, the Federal Reserve would publish annual stress test scenarios and comprehensive model documentation for public comment. In February 2026, the Federal Reserve published the final scenarios for the 2026 supervisory stress test. The Federal Reserve also stated that the new models will not be finalized in time for the CCAR 2026 process and that the current SCB requirements will continue to apply for all firms, including PNC, until 2027, when new SCB can be calculated based on models that take public feedback into consideration.

Regulatory Liquidity Standards and Liquidity Risk Management Requirements. The Basel Committee’s Basel III framework also includes short-term liquidity standards and long-term funding standards, the LCR and NSFR, respectively, as implemented by the Federal Reserve and OCC.

The U.S. banking agencies’ LCR rules are designed to ensure that covered banking organizations maintain an adequate level of cash and high-quality liquid assets to meet estimated net liquidity needs in a short-term stress scenario lasting 30 days. 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.

As Category III institutions with less than $75 billion in weighted short-term wholesale funding, PNC and PNC Bank are subject to reduced LCR and NSFR requirements, with each company’s LCR net cash outflows and NSFR required stable funding (as calculated under the rules) reduced by 15%, thereby reducing the amount of high-quality liquid assets or available stable funding each institution must hold to meet the LCR and NSFR minimum requirements, respectively.

The Federal Reserve also requires PNC to publicly disclose certain quantitative and qualitative measures of its LCR- and NSFR-related liquidity profile, including major components used to calculate the LCR and NSFR and a qualitative discussion of PNC’s LCR and NSFR drivers and results.

Additionally, as a Category III institution, PNC must, among other things, conduct internal liquidity stress tests over a range of time horizons, maintain a 30-day buffer of high-quality liquid assets, and maintain a contingency funding plan that meets certain requirements.

For additional discussion of regulatory liquidity requirements, refer to the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report.

Dividend Restrictions. The PNC Financial Services Group, Inc. is a legal entity separate and distinct from its subsidiaries. The principal source of our liquidity at the parent company level is dividends and other capital distributions from PNC Bank. PNC Bank is subject to various restrictions on its ability to pay dividends to PNC Bancorp, Inc., its direct parent, which is a wholly-owned direct subsidiary of The PNC Financial Services Group, Inc. PNC Bank also is subject to federal laws limiting extensions of credit to its parent holding company and non-bank affiliates as discussed in Note 19 Regulatory Matters. Further information on bank level liquidity and parent company liquidity is also available in the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report.

Source of Strength. Federal Reserve rules provide that a BHC is expected to serve as a source of financial strength to its subsidiary banks and to commit resources to support such banks if necessary, including when directed to do so by the Federal Reserve. In addition, Dodd-Frank requires that the Federal Reserve jointly adopt new rules with the OCC and the FDIC to implement this source of strength requirement. The agencies have yet to propose these rules, but they may do so in the future.

Enhanced Prudential Standards. Under Federal Reserve rules, PNC and other BHCs with total consolidated assets of $100 billion or more are subject to various enhanced prudential standards related to liquidity risk management and overall risk management. For PNC, these rules, among other things, establish liquidity stress testing requirements (discussed above), limitations on PNC’s aggregate net credit exposures to any single, unaffiliated company, and certain oversight and governance responsibilities for PNC’s Chief Risk Officer, the Board of Directors and the Risk Committee of the Board of Directors.

The Federal Reserve may continue to develop the set of enhanced prudential standards that apply to large BHCs in order to further promote the resiliency of such firms and the U.S. financial system. For additional information, see Item 1A Risk Factors of this Report.

Additional Powers Under the GLB Act. The GLB Act permits a qualifying BHC, such as PNC, to become a FHC and thereby engage in, or affiliate with companies engaging in, a broader range of financial activities than would otherwise be permitted for a BHC. Among other activities, we currently rely on our status as an FHC to conduct merchant banking activities and securities underwriting and market-making activities. PNC’s status as an FHC is conditioned upon maintaining certain eligibility requirements for both PNC and its subsidiary depository institutions, including minimum capital ratios, supervisory ratings, and, in the case of its subsidiary depository institutions, maintaining at least a “Satisfactory” rating under the CRA.

In addition, the GLB Act permits PNC Bank to engage in expanded activities through a “financial subsidiary.” PNC Bank may also generally engage through a financial subsidiary in any activity that is determined to be financial in nature or incidental to a financial activity by the Secretary of the Treasury, in consultation with the Federal Reserve (other than insurance underwriting activities, insurance company investment activities and merchant banking). In order to establish a financial subsidiary, a national bank and each of its depository institution affiliates must be “well capitalized” and “well managed” and the national bank and each of its depository institution affiliates must have a CRA rating of “Satisfactory” or better.

If an FHC or a national bank with a financial subsidiary fails to continue to meet the applicable “well capitalized” or “well managed” criteria, the FHC or national bank must enter into an agreement with the Federal Reserve or the OCC, respectively, that, among other things, identifies how the capital or management deficiencies will be corrected. Until such deficiencies are corrected, the relevant agency may impose limits or conditions on the activities of the company or bank, and the company or bank may not engage in, or acquire a company engaged in, the types of expanded activities only permissible for an FHC or financial subsidiary without prior approval of the relevant agency.

In addition, an FHC generally may not engage in a new financial activity authorized by the GLB Act, or acquire a company engaged in such a new activity, if any of its insured depository institutions receives a CRA rating of less than “Satisfactory.” A national bank’s financial subsidiary generally may not engage in a new financial activity authorized by the GLB Act, or acquire a company engaged in such a new financial activity, if the national bank or any of its insured depository institution affiliates received a CRA rating of less than “Satisfactory.”

Privacy and Data Protection. PNC is subject to extensive federal and state laws related to consumer privacy and data protection. Federal banking regulators, pursuant to the GLB Act, have adopted rules that limit the ability of banks and other financial institutions to disclose nonpublic consumer information to nonaffiliated third parties. These rules require institutions to provide privacy policy disclosures and, in certain circumstances, allow consumers to prevent disclosure of certain personal information to nonaffiliated third parties. The GLB Act’s privacy provisions govern how consumer information is shared within diversified financial services companies and with external vendors. In addition, the Fair Credit Reporting Act regulates the sharing of certain consumer information among affiliated companies and, depending on the type and purpose of the information, provides consumers with the right to opt out of such sharing. The GLB Act and other laws also require PNC to implement a comprehensive information security program. Security and privacy policies and procedures for the protection of personal and confidential information are in effect across all of the organization’s businesses and geographic locations. The sharing, use, collection, disclosure, and other processing of these types of information are governed by increasingly stringent and evolving legislation and regulations, the intent of which is to protect the privacy of personal information, including personal financial information. We may become subject to new legislation or regulations concerning cybersecurity and data privacy.

Volcker Rule. The Volcker Rule and its implementing regulations prohibit banking entities from engaging in short-term trading as principal and having certain ownership interests in and relationships with hedge funds, private equity funds, and certain other private funds (together, “covered funds”), unless an exemption or exception applies. For example, the exemptions under the Volcker Rule allow banking entities to trade as principal for securities underwriting, market-making and risk-mitigating hedging purposes, subject to a variety of conditions. PNC maintains compliance programs to comply with the restrictions of the Volcker Rule.

Federal Reserve and OCC Supervision and Enforcement. The federal banking agencies possess broad powers to take corrective action as deemed appropriate based on the actions, operations or risk management programs of a BHC, an insured depository institution or their subsidiaries. The Federal Reserve and the OCC have the ability to take enforcement action against PNC and PNC Bank, respectively, to prevent and remedy acts and practices that the agencies determine to be unfair or deceptive. A finding that we have engaged in a deceptive act or practice may have collateral consequences on our ability to rely on certain exemptions in, or take advantage of certain provisions of, the securities laws absent a government waiver of such restrictions.

Moreover, less than satisfactory examination ratings, lower capital or liquidity ratios than peer group institutions, or regulatory concerns regarding management, controls, assets, operations or other factors can all potentially result in practical limitations on the ability of a bank or BHC to engage in new activities, grow, acquire new businesses, make capital distributions or continue to conduct existing activities.

OCC Heightened Standards. The OCC has established guidelines setting forth certain heightened risk management and governance standards for large national banks, including PNC Bank. The guidelines, among other things, establish minimum standards for the design and implementation of a risk governance framework, describe the appropriate risk management roles and responsibilities of front line units, independent risk management, internal audit, and the board of directors, and provide that a covered bank should have a comprehensive written statement that articulates its risk appetite and serves as a basis for the framework. In December 2025, the OCC issued a notice of proposed rulemaking that would increase the threshold at which the heightened standards apply from $50 billion to $700 billion in average total consolidated assets.

Transactions with Affiliates. Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve’s implementing regulation, Regulation W, place quantitative and qualitative restrictions on covered transactions between a bank and its affiliates. Covered transactions include, among other things, extensions of credit, guarantees, and purchases of assets. Transactions with affiliates are also generally required to be on arm’s length, market-prevailing terms.

Extensions of Credit to Executive Officers, Directors, or Principal Shareholders. The Federal Reserve Act and Federal Reserve regulations also place quantitative limitations and conditions on extensions of credit by a bank to its executive officers, directors, or principal shareholders and their related interests (including any company controlled by such persons). Generally, extensions of credit by a bank to such individuals, companies and related interests must comply with certain individual and aggregate lending limits, as well as procedural and qualitative requirements.

Debit Card Interchange Fees and Transaction Processing. The Federal Reserve is required to establish standards for assessing whether the amount of any interchange fee received by a debit card issuer such as PNC Bank is reasonable and proportional to the cost incurred by the issuer, subject to certain adjustments. The Federal Reserve implemented these standards through Regulation II, which limits the interchange fee an issuer may charge based on three components, and remains subject to ongoing litigation. In 2023, the Federal Reserve proposed revisions to the three components of the interchange fee cap. We expect the 2023 proposed rule, if finalized in its current form, will reduce PNC Bank’s interchange fee revenue. Additionally, we may become subject to new legislation or regulations concerning our card business that could affect our operations and profitability, such as laws capping credit card interest rates or requiring the use of an additional card network.

The Bank Secrecy Act and Economic Sanctions. The BSA requires all financial institutions, including banks and securities broker-dealers, to establish a risk-based system of internal controls reasonably designed to prevent money laundering and the financing of terrorism. As implemented by federal banking and securities regulators and the U.S. Department of the Treasury, the BSA, as amended, requires that certain financial institutions create and maintain a risk-based AML compliance program that is reasonably designed to prevent money laundering and to combat the financing of terrorism, including through suspicious activity reporting, currency transaction reporting, and other similar reporting requirements (e.g., a Financial Crimes Enforcement Network geographic targeting order requiring reporting under certain circumstances); the implementation of appropriate policies, procedures, and internal controls; independent testing; subject matter training; the designation of one or more individuals responsible for coordinating and monitoring ongoing compliance; and appropriate risk-based procedures for conducting initial and ongoing customer due diligence.

PNC is also subject to sanctions laws and regulations administered and imposed by the United States government, including the U.S. Treasury Department's Office of Foreign Assets Control (“OFAC”) and the Department of State, as well as comparable sanctions programs imposed by foreign governments and multilateral bodies with jurisdiction over PNC’s products, services, or activities. Sanctions can be either comprehensive or focused on specific individuals, entities, industry sectors, ownership interests, etc. to accomplish foreign policy and national security goals.

Executive and Incentive Compensation. The Federal Reserve and the OCC have provided guidance regarding incentive and other elements of compensation provided to executives and other employees at banking organizations they regulate, both as general industry-wide guidance and guidance specific to select larger companies, including PNC. This guidance is intended to ensure that the incentive compensation practices of covered banking organizations do not encourage excessive risk-taking. Dodd-Frank requires the Federal Reserve, the OCC, the FDIC, the SEC and two other regulatory agencies to adopt regulations governing incentive compensation provided by regulated financial services companies to their executives and other employees. These agencies jointly proposed regulations in 2011 and again in 2016 to implement these requirements. Final regulations have not been adopted.

Fiduciary Services. The trust, investment advisory, and other fiduciary activities conducted by PNC Bank also are subject to the OCC’s regulations governing the fiduciary activities of national banks, as well as applicable state fiduciary laws. The OCC’s regulations, among other things, set standards for the administration of fiduciary accounts, prohibit or govern potential conflicts of interests and establish recordkeeping requirements for fiduciary accounts.

Acquisitions. The Federal Reserve’s prior approval is required whenever we propose to acquire all or substantially all of the assets of any bank, to acquire direct or indirect ownership or control, subject to certain thresholds, of any bank or BHC, or to merge or consolidate with any other BHC. The Federal Reserve’s prior approval is also required for a BHC to acquire direct or indirect ownership or control, subject to certain thresholds, of a savings association or savings and loan holding company, or to merge or consolidate with a savings and loan holding company.

OCC prior approval is required for PNC Bank to acquire another insured bank or savings association by merger or to acquire deposits or substantially all of the assets of such institutions. Approval of the OCC and the FDIC is required to merge a non-bank entity into PNC Bank.

FDIC Insurance. The DIF provides insurance coverage for deposits held by PNC Bank, subject to certain requirements and limits. To maintain a statutory minimum ratio of the DIF to insured deposits in the U.S., member institutions, including PNC Bank, are required to pay deposit insurance assessments. Deposit insurance assessment rates are subject to change by the FDIC and may be affected by the overall economy and stability of the banking industry. The FDIC also has the authority to charge special assessments from time to time, including in response to systemic events. For example, in November 2023, the FDIC released a final rule to impose a special assessment to recover losses to the DIF resulting from the systemic risk determination made in March 2023. In December 2025, the FDIC adopted an interim final rule reducing the special assessment rate for the upcoming collection quarter in March 2026. The rule also allows for potential offsets to quarterly deposit assessments if the special assessment amount uncollected ultimately exceeds losses to the DIF. For additional information about the impact of the special assessment, see the FDIC Special Assessment portion of the Executive Summary section in Item 7 of this Report.

Resolution and Recovery Planning. PNC is required by section 165(d) of the Dodd-Frank Act and its implementing regulations to periodically submit to the Federal Reserve and the FDIC a resolution plan (including a public summary) that includes, among other things, an analysis of how the company could be resolved in a rapid and orderly fashion if the company were to fail or experience material financial distress. Following review of the plan, the Federal Reserve and the FDIC may jointly impose restrictions on a covered BHC, including additional capital requirements or limitations on growth, if the agencies jointly determine that the company’s plan is not credible or would not facilitate a rapid and orderly resolution under the U.S. Bankruptcy Code (or other applicable resolution framework). If the covered BHC were to fail to address deficiencies jointly identified by the Federal Reserve and FDIC in a timely manner, it may be subject to more stringent capital, leverage, or liquidity requirements, or restrictions on growth, activities, or operations.

PNC generally must file a resolution plan with the Federal Reserve and FDIC at least once each three-year period, with submissions alternating between a full plan and a plan targeted on certain areas or subjects identified by the agencies. In 2024, the Federal Reserve and FDIC finalized guidance for holding company resolution plans submitted by domestic triennial full filers, such as PNC, under the Dodd-Frank Act. The guidance addresses the Federal Reserve’s and FDIC’s expectations regarding key areas of resolution based on a firm’s resolution strategy. Firms like PNC with a multiple point of entry resolution strategy are required to incorporate more severe plan assumptions and include new required plan content, operational capabilities, and legal entity rationalization, among other requirements. PNC submitted its full resolution plan timely by October 1, 2025. The next targeted plan is due July 1, 2028.

The FDIC also requires large insured depository institutions, including PNC Bank, to periodically submit a resolution plan (including a public summary) to the FDIC that includes, among other things, an analysis of how the institution could be resolved under the FDI Act in a manner that protects depositors and limits losses or costs to creditors of the bank in accordance with the FDI Act. Under a final rule issued by the FDIC in June 2024, most banks with $100 billion or more in assets, including PNC Bank, are required to submit full resolution plans on a three-year cycle, with interim informational supplements due in off years. PNC Bank submitted its insured depository institution interim supplement prior to the submission deadline of July 1, 2025. PNC Bank will submit its next resolution plan to the FDIC by July 1, 2026.

The OCC also has guidelines that establish standards for recovery planning. These guidelines require a covered bank to develop and maintain a recovery plan that is evaluated and updated annually that, among other things, identifies a range of options that could be undertaken by the covered bank to restore its financial strength and viability should identified triggering events occur. In October 2025, the OCC issued a notice of proposed rulemaking to rescind its recovery planning guidelines. Under the proposal, covered banks would no longer be obligated to engage in prescriptive recovery planning activities.

CFPB Regulation and Supervision. We are subject to supervision and regulation by the CFPB with respect to a broad range of federal consumer financial laws and regulations, including the laws and regulations that relate to deposit products, credit card, mortgage, automobile, student and other consumer loans, and other consumer financial products and services that we offer. The CFPB has recently issued rulemakings that affect, among other things, fair lending requirements, data collection and reporting requirements for small business lenders such as PNC Bank, and personal financial data rights.

Securities and Derivatives Regulation

PNC, as a public company, is subject to the Exchange Act’s reporting requirements and related regulations and must file certain reports with the SEC on an ongoing basis. Our registered broker-dealers and investment adviser subsidiaries are subject to the Exchange Act, and the Investment Advisers Act of 1940, respectively, and related rules and regulations promulgated by the SEC. These rules, for example, require that broker-dealers and investment advisers act in a customer’s best interest when making investment recommendations to retail customers, which includes managing conflicts of interest, providing required disclosures and exercising a duty of care in making investment recommendations. FINRA is the primary self-regulatory organization for our registered broker-dealer subsidiaries. Our broker-dealer and investment adviser subsidiaries also are subject to additional regulation by states or local jurisdictions.

The SEC and FINRA have active enforcement functions that oversee broker-dealers and investment advisers and can bring actions that result in fines, restitution, a limitation on permitted activities, disqualification to continue to conduct certain activities and an inability to rely on certain favorable exemptions. Certain types of infractions and violations also can affect our ability to expeditiously issue new securities into the capital markets. In addition, certain changes in the activities of a broker-dealer require approval from FINRA, and FINRA takes into account a variety of considerations in acting upon applications for such approval, including internal controls, capital levels, management experience and quality, prior enforcement and disciplinary history and supervisory concerns.

The CFTC regulates swap dealers, other than security-based swap dealers, which are regulated by the SEC. PNC Bank is registered as a swap dealer with the CFTC. Because of the limited volume of our security-based swap dealing activities, PNC Bank has not registered (and currently does not intend, and is not required, to register) with the SEC as a security-based swap dealer.

PNC Bank’s derivatives and foreign exchange businesses are subject to the regulations and requirements imposed on CFTC-registered swap dealers, and the CFTC (and for certain delegated responsibilities, the National Futures Association) has a meaningful supervisory role with respect to PNC Bank’s derivatives and foreign exchange businesses. Among other things, the CFTC’s regulations include rules regarding business conduct standards, documentation, risk management, recordkeeping, reporting and segregation requirements. CFTC rules also require that most standardized swaps be centrally cleared through a regulated clearing house and be traded on a centralized exchange or swap execution facility. Because PNC Bank is a prudentially regulated swap dealer, PNC Bank is also subject to the OCC’s capital requirements and margin requirements on certain swaps that are not centrally cleared through a regulated clearing house.

Regulations of Other Agencies

In addition to regulations issued by the federal banking, securities and derivatives regulators, we also are subject to regulations issued by other federal agencies with respect to certain financial products and services we offer. For example, certain of our fiduciary, brokerage and investment management activities are subject to regulations issued by the Department of Labor under ERISA and related provisions of the Internal Revenue Code.

Competition

We are subject to intense competition from other regulated banking organizations, as well as various other types of financial institutions and non-bank entities that can offer a number of similar products and services without being subject to bank regulatory supervision and restrictions.

Our businesses compete to attract and retain deposits and/or to originate loans with:

• Other commercial banks,
• Savings banks,
• Credit unions,
• Consumer finance companies,
• Leasing companies,
• Investment management firms,
• Other non-bank lenders,
• Financial technology companies,
• Treasury management service companies,
• Insurance companies, and
• Issuers of commercial paper and other securities, including mutual funds.

In providing asset management services, our businesses compete with:

• Investment management firms,
• Large banks and other financial institutions,
• Brokerage firms,
• Financial technology companies,
• Mutual fund complexes, and
• Insurance companies.

Our various non-bank businesses engaged in investment banking and alternative investment activities compete with:

• Commercial banks,
• Investment banking firms,
• Collateralized loan obligation managers,
• Hedge funds,
• Mutual fund complexes,
• Merchant banks,
• Insurance companies,
• Private equity firms, and
• Other investment vehicles.

Competition is based on a number of factors including pricing, product structure, the range of products and services offered and the quality of customer service. Loan pricing, structure and credit standards are extremely important as we seek to achieve appropriate risk-adjusted returns. Deposit-taking activities are also subject to pricing pressures and to customer migration as a result of intense competition for deposits and investments. Competitors may seek to compete with us through traditional channels such as physical locations or through digital channels such as the internet or mobile applications. We include here by reference the additional information regarding competition and factors affecting our competitive position included in Item 1A Risk Factors of this Report.

Human Capital

We place great importance on having the right people in the right roles, with the right skills, and doing their best work. By focusing on the growth and development of our talented team members, we believe we are best positioned to deliver results for our customers. We believe when our employees deliver for our customers, they deliver for our communities and shareholders as well.

PNC devotes substantial resources to managing and developing human capital. Our Board of Directors provides oversight of our human capital management strategies, programs and policies developed by our Chief Human Resources Officer and senior management team and is assisted by our Board’s Nominating and Governance and Human Resources Committees. In addition, our Board’s Corporate Responsibility Committee monitors management’s progress regarding its commitments to inclusive talent practices for employees. Our Management Executive Committee assists and makes recommendations to our Chief Executive Officer and Board of Directors on human capital matters.

Additionally, our Talent & Inclusion Council is co-chaired by our Chief Executive Officer and Culture & Engagement Executive and includes senior leaders from across the organization. The council is responsible for overseeing strategic corporate initiatives that create and sustain an inclusive corporate culture and a talented workforce that is best positioned to serve our diverse customer base.

Employees totaled 55,333 at December 31, 2025. This total included 53,859 full-time and 1,474 part-time employees, of which 26,168 full-time and 1,427 part-time employees were employed in our Retail Banking business.

Part of PNC’s ability to compete effectively depends on our ability to attract new employees and retain and develop our existing employees. In support of our employees, our human capital strategies include:

• Advancing PNC’s talent-focused culture by developing strong leaders who exemplify our Leadership Standards, a set of standards designed to hold managers accountable for living our corporate values, enabling change, achieving results, fostering inclusion and developing the best talent and providing them with the tools and insights to effectively manage our people.
• Focusing on the development and retention of high performing talent with the relevant experiences, skills and perspectives to best support the diverse group of individuals, families and businesses that we serve across the country.
• Supporting all employees with opportunities for professional growth, career mobility and health and financial wellness.
• Fostering an accessible and inclusive workplace where all employees and customers can feel welcome, valued and respected.
• Supporting a strong ethical culture anchored in our corporate values and doing the right thing for our employees, customers, communities and shareholders.

In managing our employees, we focus on these key factors:

• Recruiting, developing and retaining talent. We believe recruiting, developing and retaining talent starts with our leaders, and we measure our managers against our Leadership Standards. Our talent priority is to invest in the development of our internal talent and to provide career advancement opportunities to our employees. We measure how many open requisitions we fill with internal candidates, participation in early career development programs and turnover. At our first-level and above career bands, we fill approximately 54% of our open requisitions with internal candidates, which has a direct impact on our ability to retain and develop our people. In addition, we hire approximately 400 interns and 375 full-time development program associates each year from our 11 early career development programs that support each of our lines of business and support areas.
• Culture and engagement. We focus on the development and implementation of inclusive strategies that attract, develop and retain talent, while strengthening a workplace culture grounded in living daily our core values (which include customer focus, diversity and inclusion, integrity, performance, quality of life, respect and teamwork). We cultivate a high-performing workforce where everyone can contribute to the success of PNC and that meets the needs of our diverse customer base. We measure employee engagement by regularly conducting employee surveys because we believe that engaged employees have lower attrition rates and improve customer outcomes. In compliance with government requirements and, in some cases, based on employee self-disclosure, we gather information related to the composition of our workforce. Information about our workforce is reflected in our EEO-1 reports, which are posted on our website.
• Total rewards. We are committed to providing competitive compensation and benefits programs as part of our overall strategy to retain and recruit talent. We design our compensation and benefits programs to focus on three key aspects of employee well-being: health, money and quality of life. These programs include competitive base salaries and, depending on eligibility, cash incentive and/or stock-based award opportunities, an Employee Stock Purchase Plan, a 401(k) Plan with employer match, a pension plan, healthcare, life insurance and disability benefits, health savings and dependent care flexible spending accounts, paid time off, paid maternity and parental leave, family care resources, flexible work schedules, a robust wellness program with incentives, family building benefits, employee assistance programs and educational assistance, among others. Additionally, we conduct pay equity analyses to determine if employees are being compensated fairly and consistently across roles.

Financial Information

We are subject to the informational requirements of the Exchange Act and, in accordance with the Exchange Act, we file annual,

quarterly and current reports, proxy statements and other information with the SEC. Our SEC File Number is 001-09718. You can

obtain copies of these and other filings, including exhibits, electronically at the SEC’s internet website at www.sec.gov (http://www.sec.gov) or on our

corporate internet website at www.pnc.com/secfilings (http://www.pnc.com/secfilings). Shareholders and bond holders may also obtain copies of these filings without

charge via the information request form at www.pnc.com/investorrelations (http://www.pnc.com/investorrelations) for copies without exhibits, via email to investor.relations@pnc.com (mailto:investor.relations@pnc.com) for copies of exhibits, including financial statements and schedule exhibits where applicable, or by contacting PNC Investor Relations at 800-843-2206. The interactive date file (XBRL) is only available electronically.

Corporate Governance at PNC

Information about our Board of Directors and its committees and corporate governance, including our PNC Code of Business Conduct and Ethics (as amended from time to time), is available on our website at www.pnc.com/corporategovernance (http://www.pnc.com/corporategovernance). In addition, any future waivers from a provision of the PNC Code of Business Conduct and Ethics covering any of our directors or executive officers (including our principal executive officer, principal financial officer and principal accounting officer or controller) will be posted at this internet address.

Shareholders who would like to request printed copies of the PNC Code of Business Conduct and Ethics or our Corporate Governance

Guidelines or the charters of our Board’s Audit, Nominating and Governance, Human Resources, or Risk Committees (all of which

are posted on our website at www.pnc.com/corporategovernance (http://www.pnc.com/corporategovernance)) may do so by sending their requests to our Corporate Secretary at

The PNC Financial Services Group, Inc. at The Tower at PNC Plaza, 300 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2401. Copies

will be provided without charge.

Internet Information

The PNC Financial Services Group, Inc.’s financial reports and information about its products and services are available on the

internet at www.pnc.com (http://www.pnc.com). We provide information for investors on our corporate website under “About – Investor Relations.” We use our account with X, @pncnews, as an additional way of disseminating to the public information that may be relevant to investors.

We generally post the following under “About – Investor Relations” shortly before or promptly following its first use or release: financially-related press releases, including earnings releases and supplemental financial information, various SEC filings, including annual, quarterly and current reports and proxy statements, presentation materials associated with earnings and other investor conference calls or events, and access to live and recorded audio from earnings and other investor conference calls or events. In some cases, we may post the presentation materials for other investor conference calls or events prior to the call or event. For earnings and other conference calls or events, we generally include in our posted materials a cautionary statement regarding forward-looking and non-GAAP financial information, and we provide GAAP reconciliations when we include non-GAAP financial information. Such GAAP reconciliations may be in materials for the applicable presentation, in prior presentation materials or in our annual, quarterly or current reports.

When warranted, we will also use our website to expedite public access to time-critical information regarding PNC instead of using a

press release or a filing with the SEC for first disclosure of the information. In some circumstances, the information may be relevant to

investors but directed at customers, in which case it may be accessed directly through the home page rather than “About – Investor Relations.”

We are required to provide additional public disclosure regarding estimated income, losses and pro forma regulatory capital ratios

under supervisory and PNC-developed hypothetical severely adverse economic scenarios, as well as information concerning our

capital stress testing processes, pursuant to the stress testing regulations adopted by the Federal Reserve and the OCC. We are also

required to make certain additional regulatory capital-related public disclosures about our capital structure, risk exposures, risk

assessment processes, risk-weighted assets and overall capital adequacy, including market risk-related disclosures, under the

regulatory capital rules adopted by the Federal banking agencies. Similarly, the Federal Reserve’s rules require quantitative and qualitative disclosures about our LCR and NSFR. Under these regulations, we may satisfy these requirements through postings on our

website, and, subject to limited exceptions, we have done so and expect to continue to do so without also providing disclosure of this information through filings with the SEC.

Other information posted on our corporate website that may not be available in our filings with the SEC includes information relating

to our corporate governance and communications from our chairman to shareholders.

Where we have included internet addresses in this Report, such as our internet address and the internet address of the SEC, we have

included those internet addresses as inactive textual references only. Except as specifically incorporated by reference into this Report,

information on those websites is not part hereof.

We are subject to a number of risks potentially impacting our business, financial condition, results of operations and cash flows. As a financial services company, certain elements of risk are inherent in what we do and the business decisions we make. Thus, we encounter risk as part of the normal course of our business, and we design risk management processes to help manage these risks. For more information about how we manage risks, see the Risk Management section in Item 7 of this Report.

The following are the material risk factors that affect us of which we are currently aware. Any one or more of these risk factors could have a material adverse impact on our business, financial condition, results of operations or cash flows. In addition, these risks present other possible adverse consequences, including those described below. These risk factors and other risks we face are also discussed further in other sections of this Report. Thus, the risk factors below should not be considered a complete list of potential risks that we may face.

Risks Related to the Economy and Other External Factors, Including Regulation

Our business and financial performance are vulnerable to the impact of adverse economic conditions.

Our business and overall financial performance are affected to a significant extent by economic conditions, primarily in the U.S. Declining or adverse economic conditions and adverse changes in investor, consumer and business sentiment generally result in reduced business activity, which may decrease the demand for our products and services or reduce the number of creditworthy borrowers. The ability of borrowers to repay loans is often weakened as a result of economic downturns, higher inflation and unemployment. In addition, adverse economic conditions may limit the availability of, or increase the costs of, capital and labor, erode customer purchasing power, confidence and spending and may also reduce our tolerance for extending credit. Increases in costs or expenses impacting our customers’ operations and financial performance, such as the interest rates payable on their debt obligations, could increase our credit risk or decrease the demand for our products and services.

We operate in an uncertain economic environment due to sustained inflationary pressures, including higher prices and lower housing affordability, and fluctuating trade policies (including tariffs), combined with geopolitical tensions. These conditions have led and may continue to lead to turmoil and volatility in financial markets, often with at least some financial asset categories losing value. Financial market volatility could also result from uncertainty about the timing and extent of rate cuts by the Federal Reserve. Any of these effects would likely have an adverse impact on our operations and financial performance, with the significance of the impact generally depending on the nature and severity of the adverse economic conditions. Even when economic conditions are relatively good or stable, specific economic factors can negatively affect our business and performance. This can be especially true when the factors relate to particular segments of the economy and impact our customers whose operations or financial conditions directly or indirectly depend on good or stable conditions in those segments. For example, underutilization of commercial real estate space, combined with higher interest rates, has harmed some customers’ creditworthiness and ability to refinance maturing loans, and decreased the demand for financial services in that sector.

Our foreign business activities and operations continue to be a relatively small part of our overall business. As a result, the direct impact on our business and financial performance from economic conditions outside the U.S. is not likely to be significant, although the impact would increase if we expanded our foreign business and operations more than nominally. We are, however, susceptible to the risk that foreign economic conditions, trade policies (including tariffs) and geopolitical tensions could negatively affect our business and financial performance. Primarily, this risk results from the possibility that poor economic conditions or financial market disruptions affecting other major economies would also affect the U.S.

The impact of government legislation, regulation and policy and other political factors on the economy could have an adverse effect on our business and financial performance.

Changes in law or governmental policy affecting the economy, business activity, or personal spending, investing or saving activities may cause consumers and businesses to alter their behavior in ways that impact demand for our products and services. Such changes may also alter the profitability of the transactions in which we engage or result in increased regulatory burden and associated costs. PNC may alter the types or terms of the products and services we offer to reflect such changes. Uncertainty regarding future law or policy may have similar impacts.

Congress and the current presidential administration have introduced and may continue to introduce changes in the laws or policies applicable to us and the agencies that regulate us, including their interpretations of rules and guidelines. These changes may subject financial institutions like us to changes in regulation, supervision and enforcement that are difficult to predict and uncertain for a period of time and may create the possibility of significant impacts on business activity in the U.S. and globally. In addition, the application of some laws may require significant judgment and be subject to differing interpretations. Further, some of the regulations finalized in the prior administration that are applicable to financial institutions were modified, rescinded or withdrawn or are subject to reevaluation, creating further uncertainty.

The impact that these changes may have on our operations or financial condition are discussed in more detail in the Risk Factor headed “As a regulated financial services firm, we are subject to numerous governmental regulations and comprehensive oversight by a variety of regulatory agencies and enforcement authorities. These regulations and their implementation can have a significant impact on our businesses and operations and our ability to grow and expand.”

Concern regarding high and rising federal debt levels and federal budgetary matters (including the debt ceiling), or prolonged stalemates leading to total or partial government shutdowns, also can create the risk of economic instability or market volatility, with potential adverse consequences to our business and financial performance.

The policies of the Federal Reserve and other governmental agencies have a significant impact on interest rates and overall financial market performance, which are important to our business and financial performance.

The monetary policies of the Federal Reserve, including changes in the federal funds rate, open market operations and balance sheet management, have a significant impact on interest rates, the value of financial instruments and other assets and liabilities, and overall financial market performance and volatility. These policies, including any resulting changes in economic conditions or in investor sentiment, can thus affect the activities and results of operations of financial services companies such as PNC.

An important function of the Federal Reserve is to monitor the national supply of bank credit and set certain interest rates. The actions of the Federal Reserve influence the rates of interest that we charge on loans and pay on borrowings and interest-bearing deposits. Rates of interest can also affect the value of our on-balance sheet and off-balance sheet financial instruments. We cannot control and may not accurately predict the nature or timing of future changes in monetary policies or the precise effects that they may have on our activities and financial outlook or results. In addition, actions by governmental authorities in other countries, including with respect to monetary policy, could impact financial markets and global interest rates, which could affect rates in the U.S. as well as rates on instruments denominated in currencies other than the U.S. dollar, any of which could have potential effects on us as described above. Some of the potential impacts on our business and results of governmental monetary policy are described in Risk Factors under the heading “Risks Related to the Business of Banking.”

As a regulated financial services firm, we are subject to numerous governmental regulations and comprehensive oversight by a variety of regulatory agencies and enforcement authorities. These regulations and their implementation can have a significant impact on our businesses and operations and our ability to grow and expand.

The PNC Financial Services Group, Inc. is a BHC and an FHC, with the Federal Reserve as its primary regulator. PNC Bank is a federally chartered bank, with the OCC as its primary regulator. In addition, our businesses are subject to regulation by multiple other banking, consumer protection, securities and derivatives regulatory bodies. We are also subject to the jurisdiction of criminal and civil enforcement authorities. As a result, we are subject to numerous laws and regulations intended to promote the safety and soundness of financial institutions, the stability of the U.S. banking and financial system (including protection of the DIF)), the transparency and liquidity of financial markets, and consumer protection that are not primarily intended to protect PNC security holders. We are also subject to foreign regulation to a limited extent as a result of our business activities outside the U.S.

Applicable laws and regulations restrict our permissible activities and require compliance with provisions designed to protect loan, deposit, brokerage, fiduciary, and other customers, and for the protection of customer information, among other things. We also are subject to laws and regulations designed to combat money laundering and terrorist financing, and restrict transactions with persons, companies or foreign governments designated by U.S. authorities. Over time, the scope of the laws and regulations affecting our businesses, as well as the number of requirements or limitations imposed by legislative or regulatory actions, has increased, and we expect to continue to face substantial regulatory oversight and new or revised regulatory requirements or initiatives. As we expand our product and service offerings into additional markets, domestic or foreign, either through organic growth or acquisition, we have faced and will continue to face increases in state or foreign regulation affecting our operations. Different approaches to regulation by different jurisdictions, including potentially conflicting federal and state regulations or state level regulations where we operate, could materially increase our compliance costs or risks of non-compliance. Legislative or regulatory actions can result in increased compliance costs, reduced business opportunities, or requirements and limitations on how we conduct our business. In particular, the financial services industry continues to face heightened scrutiny, including with respect to BSA/AML, know-your-customer and export and sanctions compliance requirements, consumer compliance and protection matters, and capital, liquidity and resolution planning. Although the presidential administration has indicated an intent to pursue the regulation of the financial services industry differently than was the case under the previous administration, there is uncertainty regarding the direction this administration will continue to take and its ability to implement its policies and objectives, as well as the ultimate impact on potential new regulatory initiatives and the enforcement of existing laws and regulations. It is possible the expected changes in regulation do not occur or are reversed by a subsequent administration, or the regulatory measures that are ultimately enacted deliver significant competitive advantages to financial services that are structured differently or serve different markets than PNC.

Federal banking regulators possess substantial supervisory and enforcement powers and have assumed an active oversight, examination and enforcement role across the financial services industry. The results of supervisory or examination activities by our regulators, including actual or perceived compliance failures, could result in limitations on our ability to enter into certain transactions, engage in new activities, expand geographically, make acquisitions or obtain necessary regulatory approvals in connection therewith, or otherwise require us to modify our businesses practices in a manner that materially impacts our financial condition or results of operations. These activities also could result in significant fines, penalties or required corrective actions, some of which could be expensive, difficult to implement or materially impact our business or financial condition. In addition, another financial institution’s violation of law or regulation may give rise to an investigation of the same or similar activities of PNC. Further, the Federal Reserve requires a BHC to act as a source of financial and managerial strength for its subsidiary banks. The Federal Reserve could require PNC to commit resources to PNC Bank when doing so is not otherwise in the interests of PNC or its shareholders or creditors.

We also rely on third parties who may expose us to compliance risk. A failure to comply with regulatory requirements or deficiencies in risk management practices could be incorporated in our confidential supervisory ratings, which could limit PNC’s ability to expand or require additional approvals before engaging in certain business activities. See the immediately following Risk Factor for a discussion of risks associated with capital and liquidity regulation and the Supervision and Regulation section in Item 1 of this Report and Note 19 Regulatory Matters for more information concerning the regulation of PNC.

We are subject to regulatory capital and liquidity standards that affect our business, operations and ability to pay dividends or otherwise return capital to shareholders.

PNC and PNC Bank are subject to regulatory capital and liquidity requirements established by the Federal Reserve and the OCC, respectively. Requirements to maintain specified levels of capital and liquidity, and regulatory expectations as to the quality of our capital and liquidity, impact our business activities and may prevent us from taking advantage of opportunities in the best interest of shareholders or force us to take actions contrary to their interests. For example, PNC’s ability to pay or increase dividends or otherwise return capital to shareholders is subject to PNC’s compliance with its SCB, which is determined through the Federal Reserve’s CCAR process. The Federal Reserve can also impose additional limitations on capital distributions, such as limitations on distributions during times of economic stress. In addition, dividends or other capital distributions from PNC Bank and, to a lesser extent, non-bank subsidiaries are PNC’s principal source of funds to, among other things, pay dividends on and make repurchases of its capital stock. Many of our subsidiaries are subject to laws that restrict dividend payments or authorize regulatory bodies to prohibit or limit dividends to PNC. Limitations on PNC’s ability to receive dividends from its subsidiaries, including PNC Bank, could have a material adverse effect on its liquidity and ability to pay dividends on and make repurchases of its capital stock, especially to the extent that PNC must first service any outstanding debt obligations. Capital and liquidity requirements may also impact the amount and type of loans we make. We may be constrained in our ability to expand, either organically or through acquisitions. We may be forced to sell or refrain from acquiring assets where the capital requirements appear inconsistent with the assets’ underlying risks. In addition, liquidity standards require us to maintain holdings of highly liquid short-term investments, thereby reducing our ability to invest in longer-term or less liquid assets, even if more desirable from an earnings, balance sheet or interest rate risk management perspective.

Regulatory capital and liquidity requirements are subject to review and revision by the Basel Committee and the U.S. banking agencies. Although the federal banking agencies issued a proposed rule in July 2023 to implement the final components of the Basel III framework, the status of this rule, and potential revisions to the rule, remain uncertain. More information is discussed in the Supervision and Regulation section in Item 1 of this Report and the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report.

Our ability to operate our business could be impaired if our liquidity is unexpectedly constrained.

Our liquidity could be impaired as a result of unanticipated outflows of cash or collateral, unexpected loss of consumer deposits or higher than anticipated draws on lending-related commitments, an inability to sell assets (or to sell assets at favorable times or prices), a default by a counterparty, our inability to access other sources of liquidity, including from sources that have historically been available or through the capital markets due to unforeseen market dislocations or interruptions, or a lack of market or customer confidence in PNC or financial institutions in general. Many of the above conditions and factors may be caused by events for which we have little or no control. In addition, if access to stable and lower-cost sources of funding is reduced, alternative sources of funding could be more expensive and limited in availability. The increased speed with which information is disseminated, through traditional or social media, could increase the speed or severity of liquidity pressures caused by, for example, negative news about PNC’s or other financial institutions’ actual or alleged financial prospects or safety and soundness. A negative impact on our liquidity would likely limit our ability to support our operations and fund outstanding liabilities as well as meet regulatory expectations, which would adversely affect our financial condition and results of operations. For information on our liquidity management, see the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report.

A downgrade in our credit ratings could significantly impact our liquidity, funding costs and access to the capital markets.

Our credit ratings are based on a number of factors, including the financial strength of PNC and PNC Bank, and factors outside of our control, such as conditions affecting the financial services industry generally. Reductions in one or more of our credit ratings could adversely affect our ability to borrow funds, increase our cost of capital and limit the number of investors or counterparties willing to do business with us. For example, downgrades could negatively impact our right to continue to service mortgages and hold related escrows and reserves. Downgrades could also adversely affect our ability to attract or retain customers, including deposits. In addition, a downgrade in our credit ratings could trigger obligations to make cash or collateral payments under derivative contracts with certain counterparties. There can be no assurance that we will maintain our current ratings and outlooks. For information on our credit ratings and outlooks, see the Liquidity and Capital Management portion of the Risk Management section in Item 7 of this Report.

Privacy and personal data rights initiatives have imposed and will continue to impose additional operational burdens on PNC, and they may limit our ability to pursue desirable business initiatives and increase the risks associated with any future gathering, maintenance, use, transmission and other processing of personal information.

Legislative and regulatory efforts to protect the privacy and enhance the portability of personal data have evolved over time. Individuals whose personal information may be protected by law may include our customers, prospective customers, job applicants, employees and third parties. These initiatives, among other things, limit how companies can gather, maintain, use, transmit and otherwise process personal data and impose obligations on companies in their management of such data, including requiring companies like PNC to make available to consumers and authorized third parties certain data relating to transactions and accounts and establishing obligations for accessing such data. Financial services companies such as PNC necessarily gather, maintain, use, transmit and otherwise process a significant amount of personal data. These types of initiatives increase compliance complexity and related costs, may result in significant financial penalties for compliance failures, and may limit our ability to develop new products or respond to technological changes. This is particularly true as we expand our business and operations into new markets. Also, we are, or may become, subject to evolving and developing data privacy and security laws and regulations in other jurisdictions, including foreign jurisdictions even where our presence in such jurisdictions is minimal. Such legal and regulatory requirements also could heighten the reputational impact of actual or perceived misuses of personal data by us, our vendors or others who gain unauthorized access to our personal data. Other jurisdictions may adopt similar requirements that impose different and potentially inconsistent compliance burdens. The impacts will be greater to the extent requirements vary across jurisdictions.

Climate-related risks could adversely affect our business and performance, including indirectly through impacts on our customers.

There continues to be concern, including on the part of certain stakeholders and in certain jurisdictions where we do business or have operations, regarding climate-related risks and impacts (including physical risk and transition risk). These concerns have led and may continue to lead to efforts to mitigate those impacts. We and our customers may face cost increases, asset value reductions, the reduced availability of insurance or sufficient insurance to cover losses, operations disruptions and changes and other impacts because of climate change (including because of the increased frequency or severity of acute weather events and long-term shifts in the climate) and related governmental actions or societal responses to climate change. The impact on our customers will likely vary depending on their specific attributes, including their reliance on or role in carbon intensive activities and their transition plans, as well as their exposure to the effects of climate change. Consumers and businesses may also change their behaviors because of these concerns which creates transition risk for PNC arising from adjusting to these concerns. PNC and its customers will need to respond to any new laws and regulations as well as any changes in consumer and business preferences related to climate change. Among the impacts to PNC could be a drop in demand for our products and services, particularly in certain sectors if our products or services do not support the environmental goals of our customers, or increased losses due to the impact of climate change on the collateral that secures customer borrowings. Our risk management needs to continue to evolve, or it may not be effective in identifying, measuring, monitoring and controlling climate risk exposure, particularly given that the timing, nature and severity of the impacts of climate change may not be predictable.

Additionally, the federal government has altered and may continue to alter climate policies or requirements in a way that conflicts with certain state-level policies or investor expectations. Such changes may present risk to PNC due to inconsistent expectations, requirements or costs. Environmental regulations or changes in the supply, demand or available sources of energy or other resources may affect the availability or cost of goods and services necessary to run our business and our customers’ businesses.

We have been and may continue to be subject to conflicting pressure from stakeholders and activists regarding how or when we take climate-related risks and impacts into account in our business practices or risk management. Further, there is ongoing scrutiny of climate-related policies, goals, including our use of and ability to achieve them, and disclosures, as well as conflicting pressure regarding the way in which climate may or should be considered by the financial sector, which could result in additional costs, reputational harm as a result of public sentiment, litigation and regulatory scrutiny (including from U.S. federal and state governments, policymakers and regulators), litigation and reduced investor and stakeholder confidence. The Risk Factor headed “We are at risk of an adverse impact on our business due to damage to our reputation” further discusses risks associated with our management of these matters.

Risks Related to the Use of Technology

The use of technology is critical to our ability to maintain or enhance the competitiveness of our businesses.

As a large financial services company, we handle a substantial volume of customer and other financial transactions. As a result, we rely heavily on information systems to conduct our business and to process, record, monitor and report on our transactions and those of our customers. Over time, we have seen more customer usage of technological solutions for financial needs as well as higher expectations of customers and regulatory requirements regarding effective and safe systems. As a result of these factors, the financial services industry continues to undergo rapid technological change with frequent introductions of new technology-driven products and services. Examples include expanded use of cloud computing, artificial intelligence (AI) and machine learning, biometric authentication, voice and natural language, data privacy and security enhancements and increased online and mobile device interaction with customers, including innovative ways that customers can manage their accounts.

In response to actual and anticipated customer behavior and expectations, as well as competitive pressures, we continue to invest in technology. We seek to automate functions previously performed manually, facilitate the ability of customers to engage in financial transactions and otherwise enhance the customer experience with respect to our products and services. This effort has involved and is likely to continue to involve the expenditure of considerable amounts of funds and other resources, which could be constrained to the extent that sustained adverse economic conditions and other factors described elsewhere in these Risk Factors negatively impact our business or financial performance. A failure to maintain or enhance our competitive position with respect to technology, whether because we fail to anticipate customer expectations, because our technological developments fail to perform as desired or are not rolled out in a timely manner, or because we fail to keep pace with our competitors, would likely cause us to lose market share or incur additional expense. Our ability to maintain or enhance our technological position is in part dependent on our ability to attract and retain talented employees.

Our use of technology is dependent on having the right to use its underlying intellectual property.

In some cases, we develop internally the intellectual property embedded in the technology we use. In others, we or our vendors license the use of intellectual property from others. Where we rely on access to third-party intellectual property, whether now or in the future, it may not be available to us on commercially reasonable terms or at all. If we fail to comply with any applicable obligations under our license agreements, or another person or entity were deemed to own intellectual property rights infringed, misappropriated or otherwise violated by our activities, we could be responsible for significant damages covering past activities and substantial fees to continue to engage in these types of activities. Our third-party licensors may also have the right to terminate the license, which may cause us to lose valuable rights, and could disrupt our operations. It also is possible that we could be prevented from using technology important to our business for at least some period of time. In such circumstances, there may be no alternative technology for us to use or it might be expensive to obtain. We could also suffer significant reputational damage in these circumstances. Protections offered by those from whom we license technology against these risks may be inadequate to cover any losses in full, and the measures we take to obtain, enforce and defend our intellectual property rights may not be successful in every jurisdiction or prevent infringement, misappropriation or other violation of our intellectual property rights. Over time, there have been and continue to be instances where technology used by PNC has been alleged to have infringed, misappropriated or otherwise violated intellectual property rights held by others, and, in some cases, we have suffered related losses. In certain situations, we may be compelled to engage in intellectual property-related litigation to enforce or defend our intellectual property rights, which may incur significant expenses and may be perceived negatively by customers or industry peers.

We could suffer a material adverse impact from failures and interruptions in the effective operation of our technology.

The need to ensure proper functioning and resiliency of our information and communications systems and other technology has become more important and challenging, and the costs involved in that effort continue to be high. Our ability to create, obtain, maintain and report on information in an accurate, timely and secure manner is a foundational component of our business. Effective management of our expanded digital products and services, geographic footprint and dispersed workforce heightens our need for secure, reliable and adequate information and communication systems and other technology. The risks of failures and interruptions result from a variety of factors. We are vulnerable to the impact of failures and interruptions of our technology to operate as needed or intended. Failures and interruptions leading to materially adverse impacts could include those resulting from human error, unexpected transaction volumes, or overall security, design or performance issues. In addition, our ability to use our technology effectively could be impacted due to design flaws, software bugs, errors, hardware failures, outages, bad weather, disasters, bad actors, terrorism, civil unrest, military conflict and the like. Such events could affect our technology directly or limit our use due to effects on key underlying infrastructure. Although we regularly update and replace technology that we depend on as our needs evolve and technology improves, we continue to utilize some older technology that may not be as reliable as newer ones. In addition, the implementation of and transition to new or updated technology creates risks related to associated timing and costs, disruptions in functionality for us or for customers, including the ability to perform functions critical to our business and operations, and longer-term failures to achieve desired improvements. Our ability to maintain, timely update and replace technology can become more challenging as the speed, frequency, volume, interconnectivity and complexity of information on technology increases. In some cases, the risk results from the potential for bad acts on the part of others, discussed in more detail in the Risk Factor headed “We are vulnerable to the risk of cyber attacks and breaches affecting the functioning of technology or the confidentiality of information that could adversely affect our customers and our business.”

We rely on technology maintained by other companies. We use other companies both to provide products and services directly to us and to assist us in providing products and services to our customers. Others provide the infrastructure that supports, for example, communications, payment, clearing and settlement systems, or information processing and storage. These companies range from those providing highly sophisticated information processing to those that provide fundamental services, such as electric power and telecommunications. In some cases, these other companies themselves utilize third parties to support their delivery of products and services to us and our customers. Technology maintained by or for these other companies is generally subject to many of the same risks we face with respect to our technology and thus their issues could have a negative impact on PNC. We have less ability to provide oversight over other companies’ technology. Any delays in receiving timely information from impacted companies upon whom we rely can affect our ability to detect, mitigate and remediate any failures or interruptions, including our ability to fully meet applicable disclosure requirements for a given incident. We may also be held responsible for failures and interruptions, including our ability to fully meet applicable disclosure requirements for a given incident. We may also be held responsible for failures and interruptions attributed to such other companies upon whom we rely as they relate to the information we share with them. We also face a risk that such other companies may be unable or unwilling to continue to provide products or services to meet our current or future needs, including in an efficient, cost-effective or favorable manner. Any transition to alternative products or services may be difficult to implement, may cause us to incur significant time and expense and may disrupt or degrade our ability to deliver our products and services.

The occurrence of any failure or interruption of any of our information or communications systems or other system, or those of other companies on which we rely, including those where there is not a reasonably available alternative, could result in a wide variety of adverse consequences to us. This risk is greater if the issue is widespread, extends for a significant period of time, or results in financial losses to our customers. The consequences include our ability to use our accounting, deposit, loan, payment and other systems, errors in transactions or impaired system functionality with customers, vendors or other parties, damage to our reputation or a loss of customer business (which could occur even if the negative impact on customers was de minimis) and litigation or additional regulatory scrutiny relating to such events (which in turn could lead to liability or other sanctions, including fines and penalties or reimbursement of adversely affected customers). In order to address ongoing and future risks, we may need to expend significant resources to support protective security measures and investigate, mitigate and remediate any vulnerabilities of our technology. Even if we do not suffer any material adverse consequences as a result of events affecting us directly, failures or interruptions at financial institutions, whether at PNC or others, could lead to a general loss of customer confidence in financial institutions, including us, and broadly increase legislative, regulatory and customer concerns regarding the functioning, safety and security of such technology. In that case, we would expect to incur even higher levels of costs with respect to prevention, mitigation and remediation of these risks.

We are vulnerable to the risk of cyber attacks and breaches affecting the functioning of technology or the confidentiality of information that could adversely affect our customers and our business.

Most corporate and commercial financial transactions are now handled electronically, and our customers increasingly use online access as well as mobile and cloud technologies to access our products and services. The ability to conduct business with us in this manner depends on the gathering, maintenance, use, transmission and other processing of vast amounts of digital information in electronic form. As a result, in the ordinary course of business, we gather, maintain, use, transmit and otherwise process vast amounts of digital information about us, our customers and our employees. This information tends to be confidential or proprietary and much of it is highly sensitive and personal. Such confidential, proprietary, sensitive and personal information includes information sufficient to support identity theft and includes personal health information, as well as information regarding business plans and financial performance that has not been made public. As a result, efforts by bad actors to engage in various types of cyber attacks and breaches, including by way of computer viruses, hacking, ransomware and other malware, denial of service attacks, credential staffing, phishing, social engineering, account takeovers, insider threats and supply chain attacks pose serious risks to our business and reputation.

We are faced with ongoing, nearly continual, efforts by others to breach data security at financial institutions or with respect to financial transactions. The effectiveness of these efforts may be enhanced using AI. These efforts may be to obtain access to confidential information, often with the intent of stealing from or defrauding us or our customers, or to disrupt our ability to conduct our business, including by destroying or impairing access to information gathered, maintained, used, transmitted or otherwise processed by us. Some of these involve efforts to enter our technology directly by going through or around our security protections. Others involve the use of social engineering schemes to gain access to confidential information from our employees, customers or vendors. The modernization of the payment systems, including near real-time movement solutions, increases the complexity of preventing and detecting these attacks and recovering fraudulent transactions. Our risk and exposure to cyber attacks and breaches is heightened because of our expanded digital products and services, geographic footprint and dispersed workforce, which results in more access points to our network. The same risks are presented by attacks potentially affecting information held by third parties on our behalf or accessed by third parties, including those offering financial applications, on behalf of our customers. These risks also arise when third parties with whom we do business, or their vendors or other entities with whom they do business, are themselves subject to cyber attacks and breaches, which has impacted our business and may do so in the future. Our ability to protect confidential information is even more limited with respect to such information gathered, maintained, used, transmitted or otherwise processed by these parties. For example, we are likely to be limited in our ability to identify and quickly resolve cyber attacks and breaches that may impact our business the further removed an entity is from our business, such as when a cyber attack or other data security breach occurs at vendors of our vendors. We may suffer reputational damage or legal liability for unauthorized access to customer information gathered, maintained, used, transmitted or otherwise processed by other parties, even if we were not responsible for preventing such access and had no reasonable way of preventing it.

Our customers often use their own devices, such as computers, smartphones and tablets, to do business with us and may provide their customer information (including passwords and other confidential information) to a third party in connection with obtaining services from that third party, including those offering financial applications. Although we take steps to provide safety and security for our customers’ transactions with us and their customer information, to the extent they utilize their own devices or provide third parties access to their accounts, our ability to assure such safety and security is necessarily limited. These risks are heightened as we and others continue to expand mobile applications, cloud solutions and other internet-based financial product offerings. For example, a number of our customers use financial applications to help manage their finances and investments, including through the aggregation of banking or other financial information that may require our customer to provide their secure banking credentials or account-identifying information to the financial application to aggregate this financial data. In some instances, third-party data aggregators are used by the financial application to access customers’ accounts and obtain the customers’ data and may be obtaining secure banking credentials or account-identifying information from our customers which has the potential to facilitate fraud if it is not properly protected. This has resulted in incidences of fraud, including automated clearing house fraud, credit card fraud and wire fraud, enabled through the use of synthetic identities and through account takeovers via these platforms. In addition, transactions by customers on financial applications that facilitate payments and fund transfers have also been fraudulently induced. These transactions occur when a customer authorizes payment to a recipient that fraudulently induced the customer into transferring a payment to such recipient. PNC has and may continue to face increased financial exposure due to activity associated with the increased use of these applications and data aggregators. Even where PNC does not have financial exposure for losses, PNC and the third parties with whom we do business could suffer increased reputational harm or regulatory scrutiny when such losses occur.

As our customers regularly use PNC-issued credit and debit cards to pay for transactions with retailers and other businesses, there is also the risk of cyber attacks and other data security breaches at those other businesses covering PNC account information. When our customers use PNC-issued cards to make purchases from those businesses, card account information often is provided to such businesses. If a business’s systems that gather, maintain, use, transmit and otherwise process card account information are subject to a cyber attack or other data security breach, holders of our cards who have made purchases from that business may experience fraud on their card accounts. We can be responsible for reimbursing our customers for such fraudulent transactions on customers’ card accounts, as well as for other costs related to cyber attacks and breaches, such as replacing cards associated with compromised card accounts. In addition, we provide card transaction processing services to some merchant customers under agreements we have with payment networks such as Visa and Mastercard. Under these agreements, we may be responsible for certain losses and penalties if one of our merchant customers suffers a cyber attack or other data security breach. Moreover, to the extent more confidential information becomes available to bad actors through the cumulative effect of cyber attacks breaches at companies generally, bad actors may find it easier to use such information to gain access to our customer accounts.

Other cyber attacks and data security breaches are not focused on gaining access to credit card or user credential information, but instead seek access to a range of other types of confidential information, such as internal emails and other forms of customer financial information, and this information may be used to support a ransomware attack. Ransomware attacks have sought to deny access to data and possibly shut down systems and devices maintained by target companies. In a ransomware attack, system data is encrypted, stolen or extorted, or access is otherwise denied, accompanied by a demand for ransom to restore access to the data or to prevent public disclosure of confidential information. Cyber attacks and data security breaches have also been conducted through business email compromise scams that involve using social engineering to cause employees to wire funds to the perpetrators in the mistaken belief that the requests were made by a company executive or established vendor. These types of phishing attacks have increased over time, and they have evolved to include other types of attacks like vishing (through voice messages) and smishing (through SMS text). Other cyber attacks and data security breaches have included distributed denial of service attacks, in which individuals or organizations flood commercial websites with extraordinarily high volumes of traffic with the goal of disrupting the ability of commercial enterprises to process transactions and possibly making their websites unavailable to customers for extended periods of time. Similarly, cyber attacks and breaches have been conducted through application program interfaces where bad actors seek to exploit the interfaces between mobile or web applications. We (as well as other financial services companies) have been subject to such cyber attacks and breaches. Recent cyber attacks and breaches have also included the insertion of malware into software updates and the infection of software while it is under assembly, known as a “supply chain attack.” Cyber attacks and breaches affecting our customers may put these relationships at risk, particularly if customers’ ability to continue operations is impaired due to the losses suffered. The techniques used in cyber attacks and breaches change rapidly and are increasingly sophisticated, including through the use of generative AI and deepfakes, and we expect in the future through the use of quantum computing, and we may not be able to anticipate cyber attacks or other data security breaches. Additionally, cyber attacks and breaches in some cases appear to be supported by foreign governments or other well-financed entities and often originate from less regulated and remote areas of the world. We have seen a higher volume and complexity of attacks during times of increased geopolitical tensions.

In addition to threats from external sources, insider threats represent a significant risk to us. Insiders, including those having legitimate access to our information, communications systems and other technology and the information contained therein, have the easiest opportunity to make inappropriate use of their access. Addressing that risk requires understanding not only how to protect us from unauthorized use and disclosure of data, but also how to engage behavioral analytics and other tools to identify potential internal threats before any damage is done. As more work is conducted outside of PNC’s facilities, the risk of improper access to PNC’s network or confidential information has increased, including for reasons such as a failure by an employee or contractor to secure a device with PNC access.

Cyber attacks and breaches often are not recognized until launched against a target and may go undetected for a period of time (or remain undetected), with the adverse consequences likely greater the longer it takes to discover the problem. As a result, we may be unable to implement adequate preventative measures to address these methods in advance of such cyber attacks and breaches. We have been and expect to continue to be the target of some of these types of cyber attacks and breaches. To date, none of these types of cyber attacks or other data security breaches has had a material impact on us. Nonetheless, we cannot entirely block efforts by bad actors to harm us, and there can be no assurance that future cyber attacks or other data security breaches will not be material. Attacks on others, some of which have led to serious adverse consequences, demonstrate the risks posed by new and evolving types of cyber attacks and breaches.

We need effective programs to limit the risk of failures, interruptions and security breaches occurring in our technology and to mitigate and remediate the impact when they do.

We have policies, procedures, systems and programs (including cybersecurity and business continuity programs) designed to prevent, mitigate and remediate the effect of failures, interruptions and security breaches in our technology. We continue to devote appropriate resources toward improving the reliability of our policies, procedures, systems and programs and their security against external and internal threats and expect to continue to do so in the future. We design our business continuity and other information and technology risk management programs to allow us to provide services in the case of an event resulting in material disruptions of business activities affecting our employees, facilities, technology or suppliers. We cannot guarantee the effectiveness of our policies, procedures, systems and programs to protect us in any future situation, nor can we guarantee the effectiveness of our oversight of risk arising from third parties upon whom we rely. Although we have policies, procedures, systems and programs designed to mitigate third-party risk, our ability to implement policies, procedures, systems and programs designed to prevent or limit the effect of possible failures, interruptions or security breaches impacting third-party technology, including the financial services industry infrastructure generally, is necessarily limited. Should such an adverse event occur, we may not have financial protection from the other third-party sufficient to compensate us or otherwise protect us from the consequences. While we maintain insurance coverage that may cover certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or any losses at all, and there can be no guarantee that our insurer will not deny coverage to any particular claim in the future or that such insurance will continue to be available on commercially reasonable terms or at all. As a result, we could suffer material financial and reputational losses in the future from any failures, interruptions or security breaches or the perceptions thereof, whether or not this perception is correct.

We may be unable to implement adequate preventive or mitigating measures to address failures, interruptions and security breaches in advance. Even with our proactive and defensive measures in place, such adverse events are likely to occur, and there remains the risk that one or more such events would be material to PNC. Our ability to mitigate and remediate the adverse consequences of such events is in part dependent on the quality of our business continuity planning, our ability to identify and understand threats to us from a holistic perspective, our ability to anticipate the timing and nature of any such event that occurs, with novel or unusual events posing a greater risk, and our ability to identify and quickly resolve vulnerabilities in our technology and those of third parties upon which we rely. Cyber attacks and breaches often are not recognized until launched against a target and may go undetected for a period of time, with the adverse consequences likely greater the longer it takes to discover the problem. In many cases, it also depends on the preparedness and responses of national or regional governments, including emergency responders, or on the part of other organizations and businesses with which we deal. Additionally, our failure to communicate failures, interruptions and security breaches appropriately to relevant parties could result in regulatory, legal, operational and reputational risk. See Item 1C Cybersecurity of this Report for more information on our cybersecurity risk management program.

Risks Related to the Business of Banking

Our business and financial results are subject to risks associated with the creditworthiness of our customers and counterparties.

Credit risk is inherent in the financial services business. It results from, among other things, 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, particularly given the high percentage of our assets represented directly or indirectly by loans and securities and the importance of lending activity to our overall business. We manage credit risk by assessing and monitoring the creditworthiness of our customers and counterparties, by diversifying our loan portfolio, by obtaining and monitoring collateral for certain exposures and by investing primarily in high quality securities.

A borrower’s ability to repay a loan can be adversely affected by many factors. Individual borrowers can be affected, for example, by declines in income, job losses, health issues or family issues. Commercial borrowers can be affected, for example, by poor business performance, changes in customer behavior or catastrophic losses. Weakness in the economy or in financial markets typically adversely impacts the ability of our borrowers to repay outstanding loans. We are exposed to increased credit risk if we fail to evaluate properly at origination the likely ability of a borrower to repay a loan. Properly estimating the current and potential value of any collateral pledged to support the loan also is critical to effectively managing credit risk. A failure to identify declining creditworthiness of a borrower or declining collateral value at a time when remedial actions could reduce our exposure increases credit risk. Any decrease in our borrowers’ ability to repay loans likely would result in higher levels of nonperforming loans, net charge-offs, provision for credit losses and valuation adjustments on loans held for sale. Managing credit risk effectively also relies on forecasts of future overall economic conditions, which are inherently imperfect. We also have credit risk arising from many other types of business relationships. Routine transactions give us credit exposure to brokers and dealers, commercial banks, investment banks, mutual and hedge funds, other institutional clients, as well as vendors and other non-financial entities.

Our credit risk may be exacerbated when the value of collateral held by us to secure obligations to us cannot be realized, including because of legal or regulatory changes, or is liquidated at prices that are not sufficient to recover the full amount of the loan or derivatives exposure due to us. In addition, credit risk may be exacerbated when counterparties are unable to post collateral, whether for operational or other reasons.

We reserve for credit losses on our loan and lease portfolio through our ACL estimated under CECL. Under CECL, the ACL reflects expected lifetime losses, which has led and could continue to lead to volatility in the allowance and the provision for credit losses as economic forecasts, actual credit performance and other factors used in the loss estimating process change. We also have reserves for unfunded loan commitments and letters of credit. Changes to expected losses are reflected in net income through provision for credit losses. A worsening of economic conditions or our economic outlook or an increase in credit risk, particularly following a period of good economic conditions, would likely lead to an increase in provision for credit losses with a resulting reduction in our net income and an increase to our allowance. Conversely, an improvement of economic conditions or our economic outlook, particularly following a period of poor economic conditions, could result in a recapture of provision for credit losses for a period of time with a resulting increase in our net income and decrease in our allowance. Either set of conditions is not likely to be sustained and may obscure actual current operations and financial performance. The section headed “Risks Related to Estimates and Assumptions” further discusses risks associated with estimating expected losses under CECL.

The concentration and mix of our assets could increase the potential for significant credit losses.

In the ordinary course of business, we often have heightened credit exposure to a particular industry, geography, asset class or financial market. As an example, loans secured by real estate typically represent a significant percentage of our overall credit portfolio. It also represents a portion of the assets underlying our investment securities. While there are limitations on the extent of total exposure to an individual consumer or business borrower, events adversely affecting some of our clients or counterparties, based on individual factors or the nature or location of their business, or asset classes or financial markets in which we are involved, could materially and adversely affect us. Declining economic conditions also may impact commercial borrowers more than consumer borrowers, or vice versa. In addition, we execute transactions with counterparties in the financial services industry. Financial services institutions are interconnected because of trading, funding, clearing or other relationships. As a result, uncertainty about the stability of other financial services institutions could lead to market-wide losses and defaults. Thus, the concentration and mix of our assets may affect the severity of the impact of recessions or other economic downturns on us.

Our business and financial performance are impacted significantly by market interest rates and movements in those rates.

As a result of the high percentage of our assets and liabilities that are in the form of interest-bearing or interest-related instruments, changes in interest rates, in the shape of the yield curve or in spreads between different market interest rates can have a material effect on our business, our profitability and the value of our financial assets and liabilities. For example:

• Changes in interest rates or interest rate spreads affect the difference between the interest that we earn on assets such as loans and investment securities and the interest that we pay on liabilities such as deposits and borrowings, which impacts our overall net interest income and margin as well as our profitability.
• Such changes can affect the ability of borrowers to meet obligations under variable or adjustable rate loans and other debt instruments and can, in turn, increase our credit losses on those assets.
• Such changes can decrease the demand for interest rate-based products and services, including loans and deposit accounts.
• Such changes affect our hedging of various forms of market and interest rate risk and may decrease the effectiveness of those hedges in helping to manage such risks.
• Movements in interest rates also affect loan prepayment speeds and could result in impairments of mortgage servicing assets or otherwise affect the profitability of such assets.
• Increases in interest rates likely lower the price we would receive on fixed-rate customer obligations if we were to sell them.

The rates on some interest-bearing instruments adjust promptly in accordance with changes in market rates, while others adjust only periodically or are fixed throughout a defined term. As a result, the impact of changes in interest rates can be either increased or diluted due to differences in the relative variability of the rates paid on our liabilities in relation to the rates received on our assets. The extent to which we have elected to hedge interest rate risk through interest rate swaps also affects the impact of rate changes. We attempt to manage the balance sheet to increase our benefit or reduce negative impacts from future movements in interest rates, but failures to anticipate actual movements may have the opposite result. In addition, we do not generally hedge all of our risk and our attempt to hedge risk does not mean we will be successful.

While higher interest rates generally enhance our ability to grow our net interest income, there are risks associated with a rising interest rate environment. As a general matter, increasing rates tend to decrease the value of fixed-rate financial instruments held on our balance sheet, as discussed in the Risk Factor headed “Our business and financial performance are vulnerable to the impact of changes in the values of financial assets.” Also, customers have and may continue to be less willing or able to borrow at higher rates. Higher interest rates also have hindered and may continue to hinder the ability of borrowers to support interest payments on variable rate loans. Higher interest rates have and may continue to indirectly affect the value of asset classes such as real estate typically financed through secured loans, with a resulting negative effect on collateral securing such loans. The benefits of higher interest rates are best achieved if we can increase the rates on loans and other assets faster than the rates on deposits and other liabilities increase. We may not be able to achieve this result in a rising rate environment, especially if central banks introduce rate increases more quickly than anticipated. On the other hand, lower interest rates tend to have a negative impact on our net interest margin, and, unless offset by higher earning assets, on our net interest income. We discuss the impact of governmental monetary policy on interest rates in the Risk Factor headed “The policies of the Federal Reserve and other governmental agencies have a significant impact on interest rates and overall financial market performance, which are important to our business and financial performance.”

Our business and financial performance are vulnerable to the impact of changes in the values of financial assets.

As a financial institution, a substantial majority of our assets and liabilities are financial in nature. Examples include loans, securities, servicing rights, deposits and borrowings. Such assets and liabilities will fluctuate in value, often significantly, due to movements in the financial markets or market volatility as well as developments specific to the asset or liability in question. The underlying value of assets under lease or securing an obligation generally decreases due to increases in supply or decreases in demand for the asset or deterioration in the condition of the asset. This could negatively impact the ability to collect fully on the secured obligation. Credit-based assets and liabilities will fluctuate in value due to changes in the perceived creditworthiness of borrowers or other counterparties and due to changes in market interest rates.

In many cases, we mark our assets and liabilities to market and recognize such changes either through net income or OCI. Thus, gains or losses on these assets and liabilities can have a direct impact on our results of operations and financial performance, unless we have effectively hedged our exposures. We may need to record losses in the value of financial assets even where our expectation of realizing the face value of the underlying instrument has not changed. Our remaining assets and liabilities are not marked to market. As a result, our balance sheet does not precisely represent the fair market value of our financial assets and liabilities. In addition, asset management revenue is earned primarily based on a percentage of the value of the assets being managed and thus is impacted by general changes in market valuations. Thus, although we are not directly impacted by changes in the value of such assets, decreases in the value of those assets would affect related noninterest income.

Risks Related to Estimates and Assumptions

Our asset and liability valuations and the determination of the amount of loss allowances and impairments taken on our assets are highly subjective. Our estimates could materially impact our results of operations or financial position.

Our accounting policies are key to how we report our financial condition and results of operations. We must exercise judgment in selecting and applying many of these policies and methods to comply with GAAP and reflect management’s judgment regarding the most appropriate manner to report PNC’s financial condition and results of operations. Management’s selection of a particular accounting policy to apply, while reasonable and appropriate, could result in PNC reporting different results than would have been reported under a different alternative. In addition, the Financial Accounting Standards Board, SEC and other regulatory agencies may issue new or amend existing accounting and reporting standards or change existing interpretations of those standards that could materially affect our financial statements. In some cases, PNC may be required to retrospectively apply a new or amended standard resulting in changes to previously reported financial results.

Certain accounting policies require that we use estimates, assumptions and judgments in preparing our financial statements, including in determining credit loss reserves, reserves related to legal proceedings and the fair value of certain assets and liabilities, among other items. These policies require management to make difficult, subjective and complex judgments about matters that are inherently uncertain, and different amounts could be reported under different conditions or using different assumptions. For example, CECL requires us to make difficult, subjective and complex judgments about future economic and market conditions in determining the ACL.

Some of our financial instruments, including certain derivatives, debt securities, loans, MSRs and private equity investments, among other items, require a determination of their fair value for our financial statements. Assets and liabilities carried at fair value inherently result in a higher degree of financial statement volatility. Changes in underlying factors or assumptions in any of the areas underlying our estimates could materially impact our future financial condition and results of operations. During periods of market disruption, it would be difficult to value certain assets if trading becomes less frequent and/or market data becomes less observable. There may be certain asset classes that were historically traded in active markets with significant observable data that rapidly become illiquid due to market volatility, a loss in market confidence or other factors. In addition, we have assets and liabilities carried at fair value that are estimated using unobservable inputs that are significant to the fair value of the assets or liabilities. The valuation of any asset or liability substantially based on unobservable inputs is necessarily less reliable than those based on active trading markets. Further, rapidly changing and unprecedented market conditions could materially impact the valuation of assets as reported within our consolidated financial statements. Our ability to hedge exposure is in part dependent on our ability to value the related assets or liabilities.

The determination of the amount of loss allowances and asset impairments varies by asset type and is based upon our periodic evaluation and assessment of known and inherent risks associated with the respective asset class. Management updates its evaluations regularly and reflects changes in allowances and impairments in operations as such evaluations are revised. Although we have policies and procedures in place to determine loss allowances and asset impairments, due to the subjective nature of this area, the level of impairments taken, and allowances reflected in our financial statements may not accurately reflect the actual level of risk and the amount of future losses.

There are risks resulting from the extensive use of models, some of which use AI, in our business.

We use financial and statistical models throughout many areas of our business, relying on them to inform decision making, automate processes, and estimate many financial values. Although it currently impacts a minority of the overall number of models that we use, we increasingly use models related to how we do business with customers and for internal process automation that leverage AI/machine learning algorithms. These models can be more predictive, but because of the complex way in which the many variables in AI/machine learning models interact, the results of these models are often less interpretable than traditional statistical models. Examples of model use include determining the pricing of various products, identifying potentially fraudulent or suspicious transactions, marketing to potential customers, grading loans and extending credit, measuring interest rate and other market risks, predicting or estimating losses, and assessing capital adequacy. We depend significantly on models for credit loss accounting under CECL, capital stress testing and estimating the value of items in our financial statements.

Models generally predict or infer certain financial outcomes, leveraging historical data and assumptions as to the future, often with respect to macroeconomic conditions. Development and implementation of some of these models, such as the models for credit loss accounting under CECL, require us to make difficult, subjective and complex judgments. Other models are used to support decisions made regarding how we do business with customers. Poorly designed or implemented models present the risk that our business decisions based on information incorporating model output will be adversely affected due to the inadequacy of that information. For example, our models may not be effective if historical data does not accurately represent future events or environments or if our models rely on erroneous, incomplete, biased, or otherwise flawed data, formulas, algorithms or assumptions and our internal model review processes fail to detect and address these flaws. Models, if flawed, could cause information we provide to the public or to our regulators to be inaccurate, incomplete or misleading. Some of the decisions that our regulators make, including those related to capital distribution to our shareholders, would likely be affected adversely if they perceive that the quality of the relevant models we use is insufficient. Finally, flaws in our models that negatively impact our customers or our ability to comply with applicable laws and regulations could negatively affect our reputation or result in fines and penalties from our regulators. Moreover, our use of AI/machine learning algorithms is subject to a variety of existing laws and regulations, including intellectual property, privacy (including with respect to automated decision making), consumer protection and federal equal opportunity laws and regulations, and additional new laws and regulations, and new applications or interpretations of existing laws and regulations, related to AI/machine learning algorithms may impact our ability to develop, use and commercialize AI/machine learning algorithms.

Risks Related to Our Need for Customers

Our success depends on our ability to attract and retain customers for our products and services.

Our performance is subject to risks associated with declines in customer demand for our products and services. As a result of the nature of those products and services, we are particularly at risk of losses of economic confidence or customer trust in us or, more broadly, in financial services institutions like us. Economic and market developments may affect consumer and business confidence levels. If customers lose confidence due to concerns regarding the economy, the demand for our products and services could suffer. If we fail to attract and retain customers, demand for our loans and other financial products and services could decrease, and we could experience adverse changes in payment patterns. We could lose interest income from a decline in credit usage and noninterest income from a decline in product sales, investments and other transactions. Demand for our products and services could also suffer as many of the risks to PNC related to the economy and other external factors, including regulation, such as changes to tax laws and tax rates, could negatively impact consumers and businesses and their interest in or ability to use our products and services.

Our ability to attract and retain customer deposits is impacted by the levels of interest rates, as customers balance the benefits of bank accounts with deposit insurance and some of the convenience associated with more traditional banking products against the possibility of higher yields from other investments. In general, if the spread between the rates we offer and those offered by alternatives to bank accounts widens, customers are often willing to forego the benefits of bank accounts (such as FDIC insurance) for higher returns elsewhere. Our customers have removed and could continue to remove money from deposit accounts with us in favor of other banks or other types of products, such as emerging financial technologies, including digital wallets, non-fungible tokens and digital currencies and cryptocurrencies (including stablecoins). In such circumstances, we need to increase rates to levels that are seen as competitive or lose customers, in either case with a negative impact to net interest income. In addition, deposits are a low-cost source of funds for us. Therefore, losing deposits could increase our funding costs and reduce our net interest income. Loss of customers could also harm noninterest income by decreasing fee-bearing transaction volume. In addition, when rates are higher, customers tend to shift deposits from noninterest-bearing accounts to interest-bearing ones, thereby negatively impacting net interest income.

Our customers increasingly use third-party financial applications that are expected to interface with their PNC accounts. This use leads to the risk that issues with respect to the effective functioning of that interface, regardless of cause, could result in a loss of customers as they seek banking relationships that work better with these other applications.

News or other publicity that harms our reputation, or harms the reputation of our industry generally, could cause a loss of customers or a reduction in the extent to which customers do business with us. This is described further in the Risk Factor headed “We are at risk of an adverse impact on our business due to damage to our reputation.”

In our asset management business, investment performance is an important factor influencing the level of assets that we manage. Poor investment advice or performance could hurt revenue and growth as existing clients might withdraw funds in favor of better performing products. Additionally, the ability to attract funds from existing and new clients might diminish. Overall economic conditions may limit the amount that customers are able or willing to invest as well as the value of the assets they do invest. The failure or negative performance of products of other financial institutions could lead to a loss of confidence in similar products offered by us without regard to the performance of our products. Such a negative contagion could lead to withdrawals, redemptions and liquidity issues in such products and have an adverse impact on our assets under management and asset management earnings.

We are at risk of an adverse impact on our business due to damage to our reputation.

Our ability to compete effectively, to attract and retain customers and employees, and to grow our business is dependent on maintaining our reputation and having the trust of our customers, employees, the communities that we serve and other stakeholders. Many types of developments, if publicized, can negatively impact a company’s reputation with adverse consequences to its business.

Financial services companies are highly vulnerable to reputational damage when they are found to have harmed customers, particularly retail customers, through conduct that is seen as illegal, unfair, deceptive, abusive, manipulative or otherwise wrongful. There also may be reputational damage from human error or systems failures viewed as having harmed customers without involving misconduct, including service disruptions or negative perceptions regarding our ability to maintain the security of our technology systems and protect client data. For example, we may suffer reputational harm to the extent that we are unable to successfully detect, prevent and remedy fraud that harms our clients. Our reputation may also be harmed by failing to deliver products and services of the quality expected by our customers and support the communities that we serve. Significant acquisitions by large banks also often attract public scrutiny, which may result in negative publicity that adversely affects our reputation if we engage in such transactions. We are also subject to the risk of reputational harm resulting from conduct of persons identified as our employees but acting outside of the scope of their employment, including through their misconduct, unethical behavior, or activities on personal social media. The reputational impact is likely greater to the extent that the bad conduct, errors or failures are pervasive, long-standing or affect a significant number of customers, particularly retail consumers. The negative impact of such reputational damage on our business may be disproportionate to the actual harm caused to customers. It may be severe even if we fully remediate any harm suffered by our customers. Furthermore, because we conduct most of our businesses under the “PNC” brand, negative public opinion about one business could also affect our other businesses. In addition, we could suffer reputational harm and a loss of customer trust as a result of the conduct of others in our industry even if we have not engaged in such conduct. We use third parties to help in many aspects of our business, with the risk that their conduct can affect our reputation regardless of the degree to which we are responsible for it. The speed with which information spreads through social media and other news sources on the internet means that negative information about PNC can rapidly have a broadly adverse impact on our reputation. This applies regardless of whether or not the information is accurate. False information can also be spread from unaffiliated or parody social media accounts pretending to be official company communications channels. Once information has gone viral, it can be difficult to counter it effectively, either by correcting inaccuracies or communicating remedial steps taken for actual issues. The potential impact of negative information going viral means that material reputational harm can result from a single discrete or isolated incident.

To an increasing extent, financial services companies, including PNC, are facing criticism with accompanying reputational risk from activists, investors and stakeholders who believe companies should be focusing more or less on environmental, social and governance matters. Companies in our industry are targeted for engaging in business with specific customers or with customers in particular industries, where the customers’ activities, even if legal, are perceived as having harmful impacts on matters such as the environment, consumer health and safety, or society at large. At the same time, financial services firms are also facing criticism and reputational harm if they are perceived as declining to provide, ceasing to provide, or otherwise restricting, banking and other services to businesses engaged in lawful activities or individuals due to their political or social viewpoints. These matters can incur legal and regulatory risk, which is discussed further in the Risk Factor headed “We are at risk for the impact of adverse results in legal proceedings.” In addition, some stakeholders are seeking increased transparency and action from financial services companies with respect to environmental, social and governance activities, political activities and activities that are or may be perceived to be politically partisan in nature. Criticism has come in many forms, including protests at PNC facilities and social media campaigns. In some circumstances, our stakeholders have held and continue to hold conflicting views on the role PNC and other financial services companies should play in continuing to or refraining from financing certain sectors. In some cases, we are subject to potentially conflicting proposed and enacted state and local laws affecting our industry that regulate the manner in which or whether we may finance or service certain clients, industries or sectors. The potential for conflict may increase in instances where federal law is silent or is found not to preempt state law. Many of these issues are divisive without broad agreement as to the appropriate steps a company such as PNC should take. As a result, however we respond to such criticism, we expose ourselves to the risks that current or potential customers decline to do business with us (or encourage others to do so) or current or potential employees refuse to work for us. This can be true regardless of whether we are perceived by some as not having done enough to address these concerns or by others as having inappropriately yielded to these pressures. These pressures can also be a factor in decisions as to which business opportunities and customers we pursue, potentially resulting in foregone profit opportunities.

We operate in a highly competitive environment in terms of the products and services we offer and the geographic markets in which we conduct business.

We are subject to intense competition both from other financial institutions and from non-bank entities, including financial technology companies (often referred to as “fintech”). In many cases, non-bank entities can engage in many activities similar to ours or offer products and services desirable to our customers without being subject to the same types of regulation, supervision and restrictions that are applicable to banks, which could place us at a competitive disadvantage. Developments in the regulatory landscape relating to emerging financial technologies, including with respect to payment services and systems, lending, digital wallets, non-fungible tokens and digital currencies and cryptocurrencies (including stablecoins), may affect our customers’ needs and expectations for products and services. New technologies have required and could require us to spend more to modify or adapt our products and services to attract and retain customers or to match products and services offered by competitors, including fintech companies. The failure of PNC to develop and market products and services that meet evolving customer needs or demands, or deliver them effectively and securely to our customers, or a decision not to offer a particular product or service because we deem it to be speculative or risky, could affect PNC’s ability to attract or retain customers. Any such impact could, in turn, reduce PNC’s revenues. The competition we face is described in Item 1 of this Report under “Competition.”

Consolidation in our industry, including among smaller banks combining to form more competitive larger ones and between banks and non-bank entities, could result in PNC facing more intense competition, particularly in impacted regions or with respect to particular products. As we expand into new markets, we may face competitors with more experience and established relationships in these markets, which could adversely affect our ability to compete. A failure to adequately address the competitive pressures we face could make it harder for us to attract and retain customers across our businesses. On the other hand, meeting these competitive pressures could require us to incur significant additional expense or to accept risk beyond what we would otherwise view as desirable under the circumstances. In addition, in our interest rate sensitive businesses, competitive pressures to increase rates on deposits or decrease rates on loans could reduce our net interest margin, negatively impacting our net interest income.

We depend on skilled labor, and employee attrition, competition for talented employees and labor shortages may have a material adverse effect on our business and operations.

Our performance and competitive position depend on our ability to attract, develop and retain high-performing employees. We face significant competition for these employees across many of our businesses and support areas. This presents greater risk as we expand into new markets, develop new product lines, or enhance staffing in certain areas, particularly technology. Competition for qualified personnel leads to increased expenses in affected business areas. Differences in demands, expectations and priorities of the workforce may require us to modify our recruiting and retention strategies to attract and retain employees. Limitations on the way regulated financial institutions can compensate their officers and employees may make it more difficult for regulated financial institutions, including PNC, to compete with other companies for talent.

Risks Related to Other Operational Issues

We depend on the effectiveness and integrity of employees, and the systems and controls for which they are responsible, to manage operational risks.

We are a large company that offers a wide variety of products and services to a broad and diverse group of customers. We rely on our employees to design, manage and operate our systems and controls to ensure that we properly enter into, record and manage processes, transactions and other relationships with customers, suppliers and other parties with whom we do business. In some cases, we rely on employees of third parties to perform these tasks. We also depend on employees and the systems and controls for which they are responsible to ensure that we identify and mitigate the risks that are inherent in our relationships and activities. These concerns are increased when we change processes or procedures, introduce new products or services, acquire or invest in a business or implement new technologies, as we may fail to adequately identify or manage operational risks resulting from such changes. These concerns may be further exacerbated by employee turnover and labor shortages.

As a large financial services firm, we are faced with ongoing attempts by individuals or organizations to defraud us or our customers for financial gain. We depend on systems, processes and personnel, either at PNC or from third parties, to identify and prevent potentially fraudulent transactions, but those systems may not be adequate and fraudulent actors regularly change tactics to improve their chance of success. Even if PNC is not financially responsible for reimbursing a customer for its fraud losses, such losses may damage PNC’s reputation or ability to attract and retain customers.

As a result of our necessary reliance on employees, whether ours or those of third parties, to perform these tasks and manage resulting risks, we are thus subject to human vulnerabilities. These range from innocent human error to misconduct or malfeasance, potentially leading to operational breakdowns or other failures. Our controls may not be adequate to prevent problems resulting from human involvement in our business, including risks associated with the design, operation and monitoring of automated systems. We may also fail to adequately maintain a culture of risk management among our employees. Errors by our employees or others responsible for systems and controls on which we depend and any resulting failures of those systems and controls to prevent unethical, fraudulent, improper or illegal conduct could result in significant harm to PNC. This harm could include customer remediation costs, regulatory fines or penalties, litigation or enforcement actions or limitations on our business activities. We could also suffer damage to our reputation, as described under “We are at risk of an adverse impact on our business due to damage to our reputation.”

We use automation, machine learning, AI and robotic process automation tools to help reduce some risks of human error. Nonetheless, we continue to rely on many manual processes to conduct our business and manage our risks. In addition, use of automation tools does not eliminate the need for effective design and monitoring of their operation to make sure they operate as intended. Enhanced use of automation may present its own risks. Automated systems may themselves experience outages or problems. Some tools are dependent on the quality of the data used by the tool to learn and enhance the process for which it is responsible. Bad, missing or anomalous data can adversely affect the functioning of such tools. It is possible that humans in some cases are better able than highly automated tools to identify that anomalous data is being used or that results are themselves anomalous.

We rely on third-party vendors, service providers and other counterparties to help support many aspects of our business. When we do so, our direct control of activities related to our business is reduced, which introduces risk.

Our use of third parties to support our business needs typically means that we do not directly control the activities we are having them perform. Any disruption in services provided by these third parties could adversely affect our ability to conduct our business. Replacing third parties could also entail significant delay and expense. Risks can arise through inadequate performance by a third party (including by its downstream service providers), specifically where that performance could affect us or our customers, and even when the result of factors or events are beyond such third party’s control. Many of the kinds of risks presented by activities performed by third parties are described elsewhere in these Risk Factors. Enhanced regulatory and other standards for the oversight of our use of third-party vendors and other service providers can result in higher costs and other potential exposures. We are also vulnerable, including to regulatory penalties, if an outside company fails to comply with legal requirements relevant to its work on our behalf. We may in any such circumstance suffer financial losses, legal consequences and injury to our reputation. Even if the other company makes us whole for financial losses, which is not necessarily the case, it is unlikely that it would be able to restore any injury to our reputation. As a result, the use of third parties to assist in our business activities heightens the risks to us inherent in those activities.

Other Key Risks

We are at risk for the impact of adverse results in legal proceedings.

Many aspects of our business involve substantial risk of legal liability. We have been named or threatened to be named as defendants in various lawsuits arising from our business activities. In addition, we are regularly the subject of governmental investigations and other forms of regulatory inquiry. We also are at risk when we have agreed to indemnify others for losses related to legal proceedings they face, such as in connection with the sale of a business or assets by us. The results of these legal proceedings could lead to significant monetary damages or penalties, restrictions on the way in which we conduct our business or reputational harm. Although we establish accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, we do not have accruals for all legal proceedings where we face a risk of loss. In addition, due to the inherent subjectivity of the assessments and unpredictability of the outcome of legal proceedings, amounts accrued often do not represent the ultimate loss to us from the legal proceedings in question. Thus, our ultimate future losses may be higher, and possibly significantly so, than the amounts accrued for legal loss contingencies. We discuss further the unpredictability of legal proceedings and describe certain of our pending legal proceedings in Note 20 Legal Proceedings.

We grow our business in part by acquiring other financial services businesses and businesses with technologies or other assets valuable to us from time to time. Acquisitions present several risks and uncertainties related both to the acquisition transactions themselves and to the integration of the acquired businesses into PNC after closing.

Acquisitions of other companies or of financial assets and deposits and other liabilities present risks and uncertainties to us in addition to those presented by the nature of the business acquired, which may materially and adversely affect our results of operations. Many of the same risks arise when we engage in strategic partnerships. Our ability to analyze the risks presented by prospective acquisitions, as well as our ability to prepare in advance of closing for integration, may be limited to the extent that we cannot gather necessary or desirable information with respect to the business we are acquiring. We may also make certain assumptions related to an acquisition that may prove to be inaccurate that limit the anticipated benefits (such as cost savings from synergies or strategic gains from being able to offer enhanced product sets) or make the acquisition more expensive or take longer to complete and integrate than anticipated. Prior to closing an acquisition, prospective acquisition targets are also subject to their own risks that we cannot manage or control. Our ability to complete an acquisition may be dependent on regulatory agencies with responsibilities for reviewing or approving the transaction, which could delay, restrictively condition or result in denial of an acquisition, or otherwise limit the benefits of the acquisition. Changes in regulatory rules or standards or the application of those rules or standards, or future regulatory initiatives designed to promote competition or limit systemic risk and the potential for a financial institution to become “too big to fail,” may also limit our ability to complete an acquisition.

Acquisition targets have their own risks specific to their businesses that could impact the success of an acquisition and its integration into PNC, such as:

• If a significant aspect of the value of a transaction is intellectual property, the extent to which the intellectual property may be utilized or protected and commercialized by PNC.
• If the acquisition includes loan portfolios, the extent of actual credit losses and the required allowance for credit losses following completion of the acquisition.
• If the acquisition involves entering into new businesses or geographic or other markets, potential limitations on our ability to take advantage of these opportunities because of our inexperience with respect to them.
• The results of litigation and governmental investigations that may be pending at the time of the acquisition or that may be filed or commenced thereafter, because of an acquisition or otherwise, are often hard to predict.
• Operational or compliance issues at the acquisition target may not be fully identified or remediated until after the acquisition closes, potentially resulting in increased costs or penalties.
• Models used by an acquisition target, such as for capital planning and credit loss accounting, may be designed or implemented in a manner different than at PNC, and our necessary reliance on these for a period of time, could materially impact our financial condition or results of operations to the extent that our estimates based on these models are inaccurate.
• Enterprise risk management systems, policies and procedures may be different and less mature than those of PNC, and our necessary reliance on these for a period of time, could limit PNC’s ability to identify, monitor, manage and report risks or subject us to heightened regulatory, legal, operational or reputational risk.

After closing, the success of an acquisition is likely partially dependent on our ability to retain and expand upon the acquired company’s customer base. It is also frequently subject to risks related to human capital, including risks related to integrating the corporate culture of the acquired company and, to the extent being retained, the quality of leadership of the acquired company.

Our business and financial performance could be adversely affected, directly or indirectly, by disasters, natural or otherwise, by terrorist activities, by international hostilities or by domestic civil unrest.

Neither the occurrence nor the potential impact of natural and other disasters (including severe weather events), health emergencies, dislocations, geopolitical instabilities, terrorist activities, international hostilities or other extraordinary events beyond PNC’s control can be predicted. However, these occurrences could adversely impact us, for example, by causing significant damage to our facilities or preventing us from conducting our business in the ordinary course. Also, their impact on our borrowers, depositors, other customers, suppliers or other counterparties could result in indirect adverse effects on us. Other indirect adverse consequences from these occurrences could result from impacts to the financial markets, the economy in general or in any region, or key parts of the infrastructure (such as the power grid) on which we and our customers rely. These types of indirect effects, whether specific to our counterparties or more generally applicable, could lead, for example, to an increase in delinquencies, bankruptcies or defaults that could result in PNC experiencing higher levels of nonperforming assets, net charge-offs and provisions for credit losses. They could also cause a reduction in demand for lending or other services that we provide.

Our ability to mitigate the adverse consequences of such occurrences is in part dependent on the quality of our resiliency planning. This includes our ability to anticipate the nature of any such event that might occur. There can be no assurance that PNC’s resiliency planning will fully mitigate all potential resiliency risks to PNC, its customers, and third parties with which it does business, or that its resiliency planning will be adequate to address the effects of simultaneous occurrences of multiple or extended events. The adverse impact of these occurrences also could be increased to the extent that there is a lack of preparedness on the part of national or regional emergency responders or on the part of other organizations and businesses that we deal with, many of which we depend on but have limited or no control over.

We manage our cybersecurity risk as an integral part of our enterprise risk management programs. Accordingly, the disclosures in this Item 1C should be reviewed in conjunction with the disclosure in the Risk Management section in Item 7 of this Report.

Information Security Program

PNC’s approach to cyber risk management, oversight and reporting is based on a well-structured information security program which has been approved by PNC’s Board of Directors. The program incorporates cyber risk considerations into day-to-day business activities and is responsible for protecting information assets to achieve business objectives in a secure manner and designed to keep customers’ information and their funds safe and available. Program capabilities are built against industry guidance and a security framework to identify risks to sensitive information, protect that information and maintain an appropriate response and recovery capability to help ensure resilience against information security incidents.

PNC’s information security program is designed to account for cybersecurity threats specifically targeting us and to ensure that PNC follows industry guidance and security frameworks for data protection, system development security, identity and access management, incident management, threat and vulnerability management, security operations management and third- and fourth-party security. Our program is continuously enhanced by threat intelligence, new regulations, industry guidance and disruptive new technologies. The program includes, among other things, annual security and privacy training for all PNC employees, phishing exercises, and informative articles and communications to raise employee awareness.

PNC’s information security program consists of policies and procedures for identifying new cyber risks and assessing their severity. PNC actively monitors and responds to the identified risks and overall cybersecurity threat landscape via active capabilities to share information and leverage intelligence, monitoring, and response capabilities across the security industry, which include cybersecurity threats, physical threats and fraud. PNC’s intelligence and analysis capabilities collaborate to analyze events and trends for possible response. PNC also maintains an incident response plan designed to handle potential or actual cybersecurity events that could impact us and our personnel, data, systems and customers, which is reviewed and refined periodically.

We have not experienced any material cybersecurity incidents that have impacted PNC’s business strategy, results of operations or financial condition to date. Notwithstanding our approach regarding cybersecurity, we may not be successful in preventing or mitigating the impact of a cybersecurity incident that could have a material impact on our business, results of operations or financial condition. See Item 1A Risk Factors of this Report for a discussion of cybersecurity risks.

Board Governance and Risk Oversight

PNC’s Board of Directors maintains governance and oversight of the risks posed by cybersecurity threats through the Board-level Technology and Risk Committees.

The Technology Committee meets no less than quarterly, and its purpose is to (i) assist the Board with the oversight of technology strategy and significant technology initiatives and programs, including those that can position the use of technology to drive strategic advantages and (ii) fulfill oversight responsibilities with respect to technology risk, information management and security risks (including cyber security, cyber fraud and physical security risks), and the adequacy of PNC’s business recovery, resiliency and contingency plans and test results.

The Technology Committee is informed of cyber threats and risks through multiple mechanisms. PNC’s Chief Information Security Officer presents quarterly to the Technology Committee on such topics as threat intelligence and assessment reports, incident and event reporting from other institutions, governance and regulatory exam statuses, and the status of other key program deliverables, among other content.

The Risk Committee meets no less than quarterly and provides oversight of PNC’s ERM framework. Cybersecurity risk is integrated into PNC’s overall ERM framework, and is represented as the Information Security domain, alongside seven other operational risk domains. See the Risk Management section in Item 7 of this Report for more details on our ERM framework.

PNC’s inherent information security risks, the maturity and completeness of the control environment and measurements against our risk appetite are presented quarterly to the Technology Committee by the firm’s Chief Technology Risk Officer. Overall risks across the Enterprise Risk Framework are then reported quarterly to the Risk Committee by the Chief Risk Officer.

Communication to the Board occurs more frequently than quarterly when dictated by incident and event management policies and procedures based on the criticality and urgency of the communication.

Role of Management

Management is directly involved in assessing and managing PNC’s risks from cybersecurity threats. PNC uses a three-lines-of-defense model where cybersecurity risk is managed and assessed by the first line of defense, led by the Chief Information Security Officer and the Head of Technology Risk Governance, and the second line of defense which is led by the Chief Technology Risk Officer under the leadership of the Chief Risk Officer. The first and second lines of defense are examined internally by our third line of defense, Internal Audit. The lines of defense model is designed to ensure appropriate oversight within the management structure. See the Risk Governance and Oversight section of Risk Management for more details on each of our lines of defense. In addition to the three lines of internal defense, PNC engages external consultants to assess and inform the program, as needed, and external assessors, consultants and auditors to review PNC’s program against those of industry peers.

The Chief Information Security Officer’s organization includes managers who have led cybersecurity programs in other industries such as robotics and AI, consulting, telecommunications, healthcare and manufacturing, which brings together a multi-faceted approach to managing cybersecurity threats and risks. The Information Security department leadership and personnel hold degrees in Information Security, Management Information Systems, Computer Science, Engineering Management and other professional majors. They also hold multiple professional certifications inclusive of vendor-issued security credentials from CISCO, Microsoft and F5, and industry certifications including but not limited to: Certified Information Systems Security Professional issued by the International Information System Security Certification Consortium; the Cybersecurity and Infrastructure Security Agency and Certified Information Security Manager issued by the Information Systems Audit and Control Association; and the Certificate of Cloud Security Knowledge issued by the Cloud Security Association.

Cyber Risks Related to Third Parties

Risks from cybersecurity threats associated with its use of third-party service providers are addressed as part of the information security risk and third-party risk domains, and their management is integrated into the ERM Framework. To help control cyber risks at third parties and protect customer data and systems, PNC assesses suppliers and third parties through a third-party security program that includes periodic security assessment. The third-party security program also includes regular monitoring of certain third parties using an independent security rating service that is designed to ensure insight and alerting is available at scale. In the event of an incident at a third party, there are specific incident response processes and protocols in place that are designed to protect PNC from potential adverse impacts.

Our executive and primary administrative offices are currently located at The Tower at PNC Plaza, Pittsburgh, Pennsylvania. The 33-story structure is owned by PNC Bank, National Association.

We own or lease numerous other premises for use in conducting business activities, including operations centers, offices, and branches and other facilities. We consider the facilities owned or occupied under lease by our subsidiaries to be adequate for the purposes of our business operations. We include here by reference the additional information regarding our properties in Note 6 Leases and Note 7 Premises, Equipment and Leasehold Improvements.

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,
• 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.

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

Dollars in millions, except per share data

(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

Dollars in millions, except as noted

(a) The December 31, 2024 ratio is calculated to reflect PNC’s election to adopt the CECL optional five-year transition provisions.

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.

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.

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.

CONSOLIDATED INCOME STATEMENT REVIEW

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)

Year ended December 31 Dollars in millions

(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.

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

Dollars in millions

*- 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.

Noninterest Expense

Table 5: Noninterest Expense

Dollars in millions

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

Dollars in millions

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.

CONSOLIDATED BALANCE SHEET REVIEW

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

Dollars in millions

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.

Loans

Table 8: Loans

Dollars in millions

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)

Dollars in millions

(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 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

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

Dollars in millions

(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.

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.

BUSINESS SEGMENTS REVIEW

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.

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)

Dollars in millions, except as noted

(continued on following page)

(Continued from previous page)

Dollars in millions, except as noted

*- 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.

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)

Dollars in millions

(continued on following page)

(Continued from previous page)

(Unaudited)

Dollars in millions

(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 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.

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)

Dollars in millions, except as noted

*- 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.

(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.

RISK MANAGEMENT

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.

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 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.

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.

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.

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

Dollars in millions

(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 following table presents our commercial real estate loans by geography and property type:

Table 17: Commercial Real Estate Loans by Geography and Property Type

Dollars in millions

(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.

The following table presents certain key statistics related to our residential real estate portfolio:

Table 18: Residential Real Estate Loan Statistics

Dollars in millions

(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 following table presents certain key statistics related to our home equity portfolio:

Table 19: Home Equity Loan Statistics

Dollars in millions

(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.

The following table presents a summary of nonperforming assets by major category:

Table 20: Nonperforming Assets by Type

Dollars in millions

(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

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 following table presents a summary of accruing loans past due by delinquency status:

Table 22: Accruing Loans Past Due (a)

Dollars in millions

(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

December 31, 2025 In millions

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 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.

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)

Dollars in millions

(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.

The following table summarizes our loan charge-offs and recoveries:

Table 25: Loan Charge-Offs and Recoveries

Year ended December 31 Dollars in millions

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.

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

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.

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

(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

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.

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

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.

The following table details Parent Company note redemptions during 2025:

Table 30: Parent Company Notes Redeemed

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

(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.

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

Dollars in millions

(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%.

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

(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 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

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

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

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 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.
• 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.

AVERAGE CONSOLIDATED BALANCE SHEET AND NET INTEREST 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)

Taxable-equivalent basis Dollars in millions

(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.

Table 37: Analysis of Year-to-Year Changes in Net Interest Income (a) (b)

In millions

(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 FINANCIAL INFORMATION

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.

Table 38: Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP) (a)

Year ended December 31 In millions

(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

(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.

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

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

(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

(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 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.

Recently Issued Accounting Standards

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.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

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.
• 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.

This information is set forth in the Risk Management section of Item 7 and in Note 1 Accounting Policies, Note 14 Fair Value and Note 15 Financial Derivatives in the Notes to Consolidated Financial Statements in Item 8 of this Report.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of The PNC Financial Services Group, Inc. and subsidiaries (PNC) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Exchange Act Rule 13a-15(f).

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

We performed an evaluation under the supervision and with the participation of our management, including the Chairman and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, of the effectiveness of PNC’s internal control over financial reporting as of December 31, 2025. This assessment was based on criteria for effective internal control over financial reporting described in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that PNC maintained effective internal control over financial reporting as of December 31, 2025.

PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited our consolidated financial statements as of and for the year ended December 31, 2025 included in this Report, has also audited the effectiveness of PNC’s internal control over financial reporting as of December 31, 2025. The report of PricewaterhouseCoopers LLP is included under Item 8 of this Report.

DISCLOSURE CONTROLS AND PROCEDURES AND CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

As of December 31, 2025, we performed an evaluation under the supervision and with the participation of our management, including the Chairman and Chief Executive Officer and the Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures and of changes in our internal control over financial reporting.

Based on that evaluation, our Chairman and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended) were effective as of December 31, 2025, and that there has been no change in PNC’s internal control over financial reporting that occurred during the fourth quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.