Fee-based Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2024

Revenue from Contract with Customer [Abstract]

Fee-based Revenue from Contracts with Customers

FEE-BASED REVENUE FROM CONTRACTS WITH CUSTOMERS

A subset of our noninterest income relates to certain fee-based revenue within the scope of ASC Topic 606 - Revenue from Contracts with Customers (Topic 606). The objective of the standard is to clarify the principles for recognizing revenue from contracts with customers across all industries and to develop a common revenue standard under GAAP. The standard requires the application of a five-step recognition model to contracts, allocating the amount of consideration we expect to be entitled to across distinct promises in the contract, called performance obligations, and recognizing revenue when or as those services are transferred to the customer.

Fee-based revenue within the scope of Topic 606 is recognized within our three reportable business segments: Retail Banking, Corporate & Institutional Banking and Asset Management Group. Interest income, income from lease contracts, fair value gains from financial instruments (including derivatives), income from mortgage servicing rights and guarantee products, letter of credit fees, non-refundable fees associated with acquiring or originating a loan and gains from the sale of financial assets are outside of the scope of Topic 606.

Table 122 presents the noninterest income recognized within the scope of Topic 606 for each of our three reportable business segments’ principal products and services, along with the relationship to the noninterest income revenue streams shown on our Consolidated Income Statement. A description of the fee-based revenue and how it is recognized for each segment’s principal products and services follows this Table 122.

Table 122: Noninterest Income by Business Segment and Reconciliation to Consolidated Noninterest Income

Year ended December 31 In millions	Retail Banking		Corporate & Institutional Banking		Asset Management Group
2024
Asset management and brokerage
Asset management fees					$	933
Brokerage fees	$	551			1
Total asset management and brokerage	551				934
Card and cash management
Treasury management fees	41		$	1,481
Debit card fees	699
Net credit card fees (a)	189
Merchant services	157		74
Other	87
Total card and cash management	1,173		1,555
Lending and deposit services
Deposit account fees	645
Other	74		32
Total lending and deposit services	719		32
Residential and commercial mortgage (b)			117
Capital markets and advisory			888
Other			75
Total in-scope noninterest income	2,443		2,667		934
Out-of-scope noninterest income (c)	1,139		1,260		15
Noninterest income by business segment	$	3,582	$	3,927	$	949
Reconciliation to consolidated noninterest income	For the year ended December 31, 2024
Total in-scope business segment noninterest income					$	6,044
Out-of-scope business segment noninterest income (c)					2,414
Noninterest income from Other (d)					(402)
Noninterest income as shown on the Consolidated Income Statement					$	8,056

(Continued from previous page)
Year ended December 31 In millions	Retail Banking		Corporate & Institutional Banking		Asset Management Group
2023
Asset management and brokerage
Asset management fees					$	882
Brokerage fees	$	523			7
Total asset management and brokerage	523				889
Card and cash management
Treasury management fees	41		$	1,377
Debit card fees	691
Net credit card fees (a)	228
Merchant services	168		77
Other	96
Total card and cash management	1,224		1,454
Lending and deposit services
Deposit account fees	637
Other	73		34
Total lending and deposit services	710		34
Residential and commercial mortgage (b)			140
Capital markets and advisory			653
Other			68
Total in-scope noninterest income	2,457		2,349		889
Out-of-scope noninterest income (c)	494		1,188		16
Noninterest income by business segment	$	2,951	$	3,537	$	905
Reconciliation to consolidated noninterest income	For the year ended December 31, 2023
Total in-scope business segment noninterest income					$	5,695
Out-of-scope business segment noninterest income (c)					1,698
Noninterest income from Other (d)					181
Noninterest income as shown on the Consolidated Income Statement					$	7,574

(Continued from previous page)
Year ended December 31 In millions	Retail Banking		Corporate & Institutional Banking		Asset Management Group
2022
Asset management and brokerage
Asset management fees					$	908
Brokerage fees	$	528			8
Total asset management and brokerage	528				916
Card and cash management
Treasury management fees	40		$	1,284
Debit card fees	684
Net credit card fees (a)	237
Merchant services	186		66
Other	97
Total card and cash management	1,244		1,350
Lending and deposit services
Deposit account fees	583
Other	67		33
Total lending and deposit services	650		33
Residential and commercial mortgage (b)			140
Capital markets and advisory			790
Other			59
Total in-scope noninterest income	2,422		2,372		916
Out-of-scope noninterest income (c)	545		1,249		20
Noninterest income by business segment	$	2,967	$	3,621	$	936
Reconciliation to consolidated noninterest income	For the year ended December 31, 2022
Total in-scope business segment noninterest income					$	5,710
Out-of-scope business segment noninterest income (c)					1,814
Noninterest income from Other (d)					582
Noninterest income as shown on the Consolidated Income Statement					$	8,106

(a)Net credit card fees consist of interchange fees of $671 million, $673 million and $662 million and credit card reward costs totaled $482 million, $445 million and $425 million for the years ended December 31, 2024, 2023 and 2022, respectively.

(b)Residential mortgage noninterest income falls under the scope of other accounting and disclosure requirements outside of Topic 606 and is included within the out-of-scope noninterest income line for the Retail Banking segment.

(c)Out-of-scope noninterest income includes revenue streams that fall under the scope of other accounting and disclosure requirements outside of Topic 606.

(d)Includes residual activities from corporate operations. For additional information, see Note 22 Segment Reporting.

Retail Banking

Brokerage Fees

Retail Banking earns fee revenue by providing its customers a wide range of investment options through its brokerage services including mutual funds, annuities, stocks, bonds, long-term care and insurance products and managed accounts. We earn fee revenue for transaction-based brokerage services, such as the execution of market trades once the transaction has been completed as of the trade date. In other cases, such as investment management services, we earn fee revenue over the term of the customer contract.

Treasury Management Fees

Retail Banking earns fee revenue by providing customers with receivables and payables management services, funds transfer services, and access to online/mobile information management and reporting services. Treasury management fees are primarily recognized over time as we perform these services.

Debit Card and Net Credit Card Fees

As an issuing bank, Retail Banking earns interchange fee revenue from debit and credit card transactions. By offering card products, we maintain and administer card-related services, such as credit card reward programs, account data and statement information, card activation, card renewals, and card suspension and blockage. Interchange fees are earned when cardholders make purchases and are presented in Table 122 net of credit card reward costs, which are earned by customers when they make purchases.

Merchant Services

Retail Banking earns fee revenue for debit and credit card processing services and products. We provide these services to merchant businesses including point-of-sale payment acceptance capabilities and customized payment processing built around the merchant’s specific requirements. We earn fee revenue as the merchant’s customers make purchases.

Deposit Account Fees

Retail Banking provides demand deposit, money market and savings account products for consumer and small business customers. Services include online and branch banking, overdraft and wire transfer services, imaging services and cash alternative services, such as money orders and cashier’s checks. We recognize fee income at the time these services are performed for the customer.

Other

Other noninterest income primarily includes ATM fees earned from our customers and non-PNC customers. These fees are recognized as transactions occur.

Corporate & Institutional Banking

Treasury Management Fees

Corporate & Institutional Banking provides corporations with cash and investment management services, receivables and disbursement management services, funds transfer services, international payment services and access to online/mobile information management and reporting services. Treasury management fees are primarily recognized over time as we perform these services.

Merchant Services

Corporate & Institutional Banking earns fee revenue for debit and credit card processing services and products. We provide these services to merchant businesses including point-of-sale payment acceptance capabilities and customized payment processing built around the merchant’s specific requirements. We earn fee revenue as the merchant’s customers make purchases.

Commercial Mortgage

Commercial mortgage banking activities include servicing responsibilities where we do not own the servicing rights. Servicing responsibilities typically consist of collecting and remitting monthly borrower principal and interest payments, maintaining escrow deposits, performing loss mitigation and foreclosure activities, and, in certain instances, funding of servicing advances. We recognize servicing fees over time as we perform these activities.

Capital Markets and Advisory

Capital markets and advisory fees include securities underwriting fees, merger and acquisition advisory fees and other advisory-related fees. We generally recognize these fees when the Company’s performance obligation related to the underlying transaction is met.

Other

Other noninterest income within Corporate & Institutional Banking is primarily comprised of fees from collateral management and asset management services. We earn these fees over time as we perform these services.

Asset Management Group

Asset Management Fees

Asset Management Group provides both personal wealth and institutional asset management services including investment management, custody services, retirement planning, family planning, trust management and retirement plan fiduciary investment services. Asset management fees are recognized over the term of the customer contract based on the value of assets under management at a point in time.

Brokerage Fees

Asset Management Group provides a wide range of investment options through its brokerage services including mutual funds, annuities, stocks, bonds, insurance products and managed accounts. Brokerage fees are recognized over the term of the customer contract either based on the value of brokerage assets at a point in time or based on transactions executed on behalf of the customer.