XML 31 R17.htm IDEA: XBRL DOCUMENT v3.8.0.1
Total Equity and Other Comprehensive Income
 9 Months Ended
Sep. 30, 2017
Other Comprehensive Income [Abstract]  
Total Equity And Other Comprehensive Income Disclosure [Text Block]
TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME

Activity in total equity for the first nine months ended months of 2016 and 2017 follows:
Table 65: Rollforward of Total Equity
 
 
 
Shareholders’ Equity
 
  
  
 
In millions
Shares
Outstanding
Common
Stock

 
Common
Stock

Capital
Surplus -
Preferred
Stock

Capital
Surplus -
Common
Stock and
Other

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Treasury
Stock

 
Non-
controlling
Interests

Total Equity

 
Balance at January 1, 2016
504

 
$
2,708

$
3,452

$
12,745

$
29,043

$
130

$
(3,368
)
 
$
1,270

$
45,980

 
Net income
 
 
 
 
 
2,878

 
 
 
60

2,938

 
Other comprehensive income (loss), net of tax
 
 
 
 
 
 
516

 
 
 
516

 
Cash dividends declared
 
 
 
 
 
 
 
 
 
 


 
Common ($1.57 per share)
 
 
 
 
 
(791
)
 
 
 
 
(791
)
 
Preferred
 
 
 
 
 
(168
)
 
 
 
 
(168
)
 
Preferred stock discount accretion
 
 
 
4

 
(4
)
 
 
 
 


 
Common stock activity (a)
 
 
1

 
10

 
 
 
 
 
11

 
Treasury stock activity, net
(16
)
 
 
 
(23
)
 
 
(1,397
)
 
 
(1,420
)
 
Other
 
 
 
 
(29
)
 
 
 
 
(192
)
(221
)
 
Balance at September 30, 2016 (b)
488

 
$
2,709

$
3,456

$
12,703

$
30,958

$
646

$
(4,765
)
 
$
1,138

$
46,845

 
Balance at January 1, 2017
485

 
$
2,709

$
3,977

$
12,674

$
31,670

$
(265
)
$
(5,066
)
 
$
1,155

$
46,854

 
Net income
 
 
 
 
 
3,258

 
 
 
39

3,297

 
Other comprehensive income (loss), net of tax
 
 
 
 
 
 
243

 
 
 
243

 
Cash dividends declared
 
 
 
 
 
 
 
 
 
 
 
 
Common ($1.85 per share)
 
 
 
 
 
(904
)
 
 
 
 
(904
)
 
Preferred
 
 
 
 
 
(181
)
 
 
 
 
(181
)
 
Preferred stock discount accretion
 
 
 
5

 
(5
)
 
 
 
 
 
 
Redemption of noncontrolling interests
 
 
 
 
 
(19
)
 
 
 
(981
)
(1,000
)
 
Common stock activity (a)
 
 
1

 
9

 
 
 
 
 
10

 
Treasury stock activity, net
(9
)
 
 
 
(274
)
 
 
(1,396
)
 
 
(1,670
)
 
Other
 
 
 
 
(48
)
 
 
 
 
(149
)
(197
)
 
Balance at September 30, 2017 (b)
476

 
$
2,710

$
3,982

$
12,361

$
33,819

$
(22
)
$
(6,462
)
 
$
64

$
46,452

 
(a)
Common stock activity totaled less than.5 million shares issued.
(b)
The par value of our preferred stock outstanding was less than $.5 million at each date and, therefore, is excluded from this presentation.

Warrants
  
We had 4.0 million, 11.3 million, and 13.4 million warrants outstanding at September 30, 2017, December 31, 2016, and September 30, 2016, respectively. As of September 30, 2017, each warrant entitles the holder to purchase one share of PNC common stock at an exercise price of $67.28 per share. In accordance with the terms of the warrants, the warrants are exercised on a non-cash net basis with the warrant holder receiving PNC common shares determined based on the excess of the market price of PNC common stock on the exercise date over the exercise price of the warrant. The outstanding warrants will expire as of December 31, 2018 and are considered in the calculation of diluted earnings per common share in Note 10 Earnings Per Share in this Report.

On October 3, 2017 PNC declared a quarterly common stock dividend of $.75 per share to shareholders of record as of October 17, 2017. In accordance with the terms of the warrants, the declaration of a dividend in excess of $.66 per share may result in an adjustment to the warrant exercise price and to the warrant share number. As a result of this dividend, the warrant exercise price was reduced from $67.28 to $67.24 per share on October 17, 2017 and the warrant share number remained 1.00.
Noncontrolling Interests
   
Perpetual Trust Securities
Our noncontrolling interests balance at September 30, 2017 reflected our March 15, 2017 redemption of $1.0 billion Fixed-to-Floating Rate Non-Cumulative Exchangeable Perpetual Trust Securities issued by PNC Preferred Funding Trusts I and II with current distribution rates of 2.61% and 2.19%, respectively. The Perpetual Trust Securities were subject to replacement capital covenants dated December 6, 2006 and March 29, 2007 benefiting PNC Capital Trust C as the sole holder of $200 million of junior subordinated debentures issued by PNC in June 1998. Upon redemption of the Perpetual Trust Securities, the replacement capital covenants terminated and such debentures ceased being covered debt with respect to the replacement capital covenants.
Details of other comprehensive income (loss) are as follows:
Table 66: Other Comprehensive Income
 
Three months ended
September 30
 
 
Nine months ended
September 30
 
In millions
2017

2016

 
 
2017

2016

 
Net unrealized gains (losses) on non-OTTI securities
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on non-OTTI securities
$
68

$
(14
)
 
 
$
304

$
791

 
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
10

5

 
 
20

19

 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
(3
)
6

 
 
3

20

 
Net increase (decrease), pre-tax
61

(25
)
 
 
281

752

 
Effect of income taxes
(20
)
10

 
 
(103
)
(275
)
 
Net increase (decrease), after-tax
41

(15
)
 
 
178

477

 
Net unrealized gains (losses) on OTTI securities
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on OTTI securities
66

38

 
 
165

16

 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
 
 
 
 
2

 
 
Less: OTTI losses realized on securities reclassified to noninterest income
 
 
 
 
(1
)
(1
)
 
Net increase (decrease), pre-tax
66

38

 
 
164

17

 
Effect of income taxes
(22
)
(14
)
 
 
(60
)
(6
)
 
Net increase (decrease), after-tax
44

24

 
 
104

11

 
Net unrealized gains (losses) on cash flow hedge derivatives
 
 
 
 
 
 
 
Increase in net unrealized gains (losses) on cash flow hedge derivatives
(2
)
(63
)
 
 
15

328

 
Less: Net gains (losses) realized as a yield adjustment reclassified to loan interest income
38

51

 
 
128

167

 
Less: Net gains (losses) realized as a yield adjustment reclassified to investment securities interest income
5

10

 
 
16

23

 
Less: Net gains (losses) realized on sales of securities reclassified to noninterest income
2

1

 
 
5



 
Net increase (decrease), pre-tax
(47
)
(125
)
 
 
(134
)
138

 
Effect of income taxes
17

45

 
 
49

(51
)
 
Net increase (decrease), after-tax
(30
)
(80
)
 
 
(85
)
87

 
Pension and other postretirement benefit plan adjustments
 
 
 
 
 
 
 
Net pension and other postretirement benefit activity
 
 
 
 
(38
)
(5
)
 
Amortization of actuarial loss (gain) reclassified to other noninterest expense
12

13

 
 
36

37

 
Amortization of prior service cost (credit) reclassified to other noninterest expense
(1
)
(2
)
 
 
(4
)
(6
)
 
Net increase (decrease), pre-tax
11

11

 
 
(6
)
26

 
Effect of income taxes
(4
)
(5
)
 
 
2

(10
)
 
Net increase (decrease), after-tax
7

6

 
 
(4
)
16

 
Other
 
 
 
 
 
 
 
PNC’s portion of BlackRock’s OCI
4

(28
)
 
 
26

(40
)
 
Net investment hedge derivatives
(26
)
27

 
 
(76
)
136

 
Foreign currency translation adjustments and other
28

(24
)
 
 
82

(136
)
 
Net increase (decrease), pre-tax
6

(25
)
 
 
32

(40
)
 
Effect of income taxes
8



 
 
18

(35
)
 
Net increase (decrease), after-tax
14

(25
)
 
 
50

(75
)
 
Total other comprehensive income, pre-tax
97

(126
)
 
 
337

893

 
Total other comprehensive income, tax effect
(21
)
36

 
 
(94
)
(377
)
 
Total other comprehensive income, after-tax
$
76

$
(90
)
 
 
$
243

$
516

 
Table 67: Accumulated Other Comprehensive Income (Loss) Components
 
In millions, after-tax
Net unrealized gains (losses) on non-OTTI securities

 
Net unrealized gains (losses) on OTTI securities

 
Net unrealized gains (losses) on cash flow hedge derivatives

 
Pension and other postretirement benefit plan adjustments

 
Other

 
Total

 
Balance at June 30, 2016
$
778

 
$
53

 
$
597

 
$
(544
)
 
$
(148
)
 
$
736

 
Net activity
(15
)
 
24

 
(80
)
 
6

 
(25
)
 
(90
)
 
Balance at September 30, 2016
$
763

 
$
77

 
$
517

 
$
(538
)
 
$
(173
)
 
$
646

 
Balance at June 30, 2017
$
189

 
$
166

 
$
278

 
$
(564
)
 
$
(167
)
 
$
(98
)
 
Net activity
41

 
44

 
(30
)
 
7

 
14

 
76

 
Balance at September 30, 2017
$
230

 
$
210

 
$
248

 
$
(557
)
 
$
(153
)
 
$
(22
)
 
Balance at December 31, 2015
$
286

 
$
66

 
$
430

 
$
(554
)
 
$
(98
)
 
$
130

 
Net activity
477

 
11

 
87

 
16

 
(75
)
 
516

 
Balance at September 30, 2016
$
763

 
$
77

 
$
517

 
$
(538
)
 
$
(173
)
 
$
646

 
Balance at December 31, 2016
$
52

 
$
106

 
$
333

 
$
(553
)
 
$
(203
)
 
$
(265
)
 
Net activity
178

 
104

 
(85
)
 
(4
)
 
50

 
243

 
Balance at September 30, 2017
$
230

 
$
210

 
$
248

 
$
(557
)
 
$
(153
)
 
$
(22
)