XML 36 R17.htm IDEA: XBRL DOCUMENT v3.25.1
Fair Value
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value FAIR VALUE
Fair Value Measurement

We measure certain financial assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability on the measurement date and is determined using an exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The fair value hierarchy established by GAAP requires us to maximize the use of observable inputs when measuring fair value. For more information regarding the fair value hierarchy, see Note 14 Fair Value in our 2024 Form 10-K.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Interest-bearing Deposits
In the first quarter of 2025, PNC elected to begin accounting for certain brokered time deposits, which are economically hedged with derivatives, under the fair value option. The election of the fair value option aligns the accounting for the brokered time deposits with the related hedges. Fair value is estimated by discounting contractual cash flows using current market rates for instruments with similar maturities. The portion of the change in fair value attributable to instrument-specific credit risk is recognized in OCI, and is estimated as the difference between the overall change in fair value and the change in fair value resulting from a change in the specified benchmark interest rate. The portion of the change in fair value resulting from a change in the specified benchmark interest rate is recognized in the Consolidated Income Statement within Deposits interest expense. Brokered time deposits are classified as Level 2, as the estimates of current market rates used to determine fair value are based on dealer indications and benchmark interest rates that are considered observable.
For more information on the valuation methodologies used to measure assets and liabilities at fair value on a recurring basis, see Note 14 Fair Value in our 2024 Form 10-K. The following table summarizes our assets and liabilities measured at fair value on a recurring basis, including instruments for which we have elected the fair value option.

Table 67: Fair Value Measurements – Recurring Basis Summary

 March 31, 2025December 31, 2024
In millionsLevel 1Level 2Level 3Total
Fair Value		Level 1Level 2Level 3Total
Fair Value
Assets
Residential mortgage loans held for sale$— $438 $104 $542 $— $560 $68 $628 
Commercial mortgage loans held for sale— 461 4 465 — 199 4 203 
Securities available-for-sale
U.S. Treasury and government agencies23,457 1,047 — 24,504 22,534 1,017 — 23,551 
Residential mortgage-backed
Agency— 30,714 — 30,714 — 30,626 — 30,626 
Non-agency— — 596 596 — — 603 603 
Commercial mortgage-backed
Agency— 2,453 — 2,453 — 1,945 — 1,945 
Non-agency— 504 99 603 — 588 103691 
Asset-backed— 2,238 92 2,330 — 2,299 93 2,392 
Other— 2,064 54 2,118 — 2,177 54 2,231 
Total securities available-for-sale23,457 39,020 841 63,318 22,534 38,652 853 62,039 
Loans— 486 663 1,149 — 486 670 1,156 
Equity investments (a) 569 — 2,223 2,995 825 — 2,111 3,132 
Residential mortgage servicing rights— — 2,523 2,523 — — 2,626 2,626 
Commercial mortgage servicing rights— — 1,041 1,041 — — 1,085 1,085 
Trading securities (b) 1,759 2,514 — 4,273 987 1,787 — 2,774 
Financial derivatives (b) (c)15 3,049 10 3,074 33,004 4 3,011 
Other assets442 131 12 585 449 133 10 592 
Total assets (d)$26,242 $46,099 $7,421 $79,965 $24,798 $44,821 $7,431 $77,246 
Liabilities
Interest-bearing deposits$— $1,160 $— $1,160 $— $— $— $— 
Other borrowed funds 1,640 126 13 1,779 1,161 128 10 1,299 
Financial derivatives (c) (e) 17 4,552 161 4,730 11 5,334 150 5,495 
Other liabilities— 28 129 157 — 28 177 205 
Total liabilities (f) $1,657 $5,866 $303 $7,826 $1,172 $5,490 $337 $6,999 
(a)Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(b)Included in Other assets on the Consolidated Balance Sheet.
(c)Amounts at March 31, 2025 and December 31, 2024 are presented gross and are not reduced by the impact of legally enforceable master netting agreements that allow us to net positive and negative positions and cash collateral held or placed with the same counterparty. See Note 12 Financial Derivatives for additional information related to derivative offsetting.
(d)Total assets at fair value as a percentage of total consolidated assets was 14% at both March 31, 2025 and December 31, 2024. Level 3 assets as a percentage of total assets at fair value was 9% and 10% at March 31, 2025 and December 31, 2024, respectively. Level 3 assets as a percentage of total consolidated assets was 1% at both March 31, 2025 and December 31, 2024.
(e)Included in Other liabilities on the Consolidated Balance Sheet.
(f)Total liabilities at fair value as a percentage of total consolidated liabilities was 2% and 1% at March 31, 2025 and December 31, 2024, respectively. Level 3 liabilities as a percentage of total liabilities at fair value was 4% and 5% at March 31, 2025 and December 31, 2024, respectively. Level 3 liabilities as a percentage of total consolidated liabilities was less than 1% at both March 31, 2025 and December 31, 2024.
Reconciliations of assets and liabilities measured at fair value on a recurring basis using Level 3 inputs for the three months ended March 31, 2025 and 2024 are as follows:

Table 68: Reconciliation of Level 3 Assets and Liabilities
Three Months Ended March 31, 2025
   Total realized / unrealized
gains or losses for the 
period (a)		              Unrealized
gains/losses for the period
on assets and
liabilities held on
Consolidated
Balance Sheet at
Mar. 31, 2025 (a) (c)
Level 3 Instruments Only
In millions		Fair Value Dec. 31, 2024Included in
Earnings		Included
in Other
comprehensive
income (b)		PurchasesSalesIssuancesSettlementsTransfers
into
Level 3		Transfers
out of
Level 3		Fair
Value Mar. 31, 2025
Assets             
Residential mortgage
    loans held for sale		$68 $— $— $41 $— $— $(4)$4 $(5)(d)$104 $—  
Commercial mortgage
    loans held for sale		4 — — — — — — — — 4 —  
Securities available-for-sale
Residential mortgage-
  backed non-agency		603 2 8 — — — (17)— — 596 —  
Commercial mortgage-
  backed non-agency
103 (3)(1)— — — — — — 99 (3) 
Asset-backed93 1 1 — — — (3)— — 92 —  
Other54 — — — — — — — — 54 —  
Total securities
    available-for-sale		853 — 8 — — — (20)— — 841 (3) 
Loans670 5 — 7 — — (19)— — 663 5 
Equity investments2,111 46 — 176 (110)— — — — 2,223 25  
Residential mortgage
    servicing rights		2,626 (51)— 1 — 7 (60)— — 2,523 (51)
Commercial mortgage
    servicing rights		1,085 (2)— 27 — 9 (78)— — 1,041 (2) 
Financial derivatives 4 13 — — — — (7)— — 10 13  
Other assets10 — — 2 — — — — — 12 —  
Total assets $7,431 $11 $8 $254 $(110)$16 $(188)$4 $(5)$7,421 $(13)
Liabilities 
Other borrowed funds$10 $— $— $— $— $5 $(2)$— $— $13 $—  
Financial derivatives 150 37 — — — — (26)— — 161 38  
Other liabilities 177 10 — — — — (58)— — 129 7  
Total liabilities $337 $47 $— $— $— $5 $(86)$— $— $303 $45  
Net gains (losses) $(36)(e)        $(58)(f) 
(Continued from previous page)

Three Months Ended March 31, 2024
   Total realized / unrealized
gains or losses for the 
period (a)		            Unrealized
gains/losses for the
period
on assets and liabilities held on Consolidated Balance Sheet at Mar. 31, 2024 (a) (c)
Level 3 Instruments Only
In millions		Fair Value Dec. 31, 2023Included in EarningsIncluded in Other comprehensive income (b)PurchasesSalesIssuancesSettlementsTransfers into Level 3Transfers out of Level 3Fair Value Mar. 31, 2024
Assets             
Residential mortgage
   loans held for sale		$103 $(1)$— $2 $— $— $(2)$2 $(6)(d)$98 $(1)
Commercial mortgage
    loans held for sale		11 — — — — — — — — 11 — 
Securities available-for-sale
Residential mortgage-
    backed non-agency		696 3 (6)— — — (25)— — 668 — 
Commercial mortgage-backed non-agency103 — — — — — — — — 103 — 
Asset-backed102 — — — — — (2)— — 100 — 
Other55 (2)1 — — — (1)— — 53 (2)
Total securities
    available-for-sale		956 1 (5)— — — (28)— — 924 (2)
Loans726 4 — 5 — — (20)— (2)(d)713 5 
Equity investments 1,952 (5)— 89 (6)— — — — 2,030 (5)
Residential mortgage
    servicing rights		2,654 72 — 13 — 5 (57)— — 2,687 72 
Commercial mortgage
    servicing rights		1,032 107 — 12 — 3 (79)— — 1,075 107 
Financial derivatives6 9 — — — — (6)— — 9 9 
Other assets8 — — — — — — — — 8 — 
Total assets$7,448 $187 $(5)$121 $(6)$8 $(192)$2 $(8)$7,555 $185 
Liabilities
Other borrowed funds$9 $— $— $— $— $3 $(3)$— $— $9 $— 
Financial derivatives152 8 — — — — (47)— — 113 9 
Other liabilities237 (20)— — — 13 (41)— — 189 2 
Total liabilities$398 $(12)$— $— $— $16 $(91)$— $— $311 $11 
Net gains (losses)$199 (e)$174 (f)
(a)Losses for assets are bracketed while losses for liabilities are not.
(b)The difference in unrealized gains and losses for the period included in Other comprehensive income and changes in unrealized gains and losses for the period included in Other comprehensive income for securities available-for-sale held at the end of the reporting period were insignificant.
(c)The amount of the total gains or losses for the period included in earnings that is attributable to the change in unrealized gains or losses related to those assets and liabilities held at the end of the reporting period.
(d)Residential mortgage loan transfers out of Level 3 are primarily driven by residential mortgage loans transferring to OREO as well as reclassification of mortgage loans held for sale to held for investment.
(e)Net gains (losses) realized and unrealized included in earnings related to Level 3 assets and liabilities included amortization and accretion. The amortization and accretion amounts were included in Interest income on the Consolidated Income Statement and the remaining net gains (losses) realized and unrealized were included in Noninterest income on the Consolidated Income Statement.
(f)Net unrealized gains (losses) related to assets and liabilities held at the end of the reporting period were included in Noninterest income on the Consolidated Income Statement.
An instrument’s categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Changes from one quarter to the next related to the observability of inputs to a fair value measurement may result in a reclassification (transfer) of assets or liabilities between hierarchy levels.
Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities follows:

Table 69: Fair Value Measurements – Recurring Quantitative Information

March 31, 2025
Level 3 Instruments Only
Dollars in millions		Fair ValueValuation TechniquesUnobservable InputsRange (Weighted-Average) (a)
Residential mortgage loans held for sale$104 Consensus pricing (b)Cumulative default rate
3.6% - 100% (39.9%)
Loss severity
0.0% - 100% (5.9%)
Discount rate
5.5% - 9.0% (6.0%)
Commercial mortgage loans held for sale4 Discounted cash flowSpread over the benchmark curve (c)
560bps - 1,085bps (978bps)
Residential mortgage-backed
    non-agency securities		596 Priced by a third-party vendor using a discounted cash flow pricing modelConstant prepayment rate
1.0% - 27.9% (3.6%)
Constant default rate
0.0% - 12.0% (1.7%)
Loss severity
15.0% - 100.0% (42.2%)
Spread over the benchmark curve (c)
193bps weighted-average
Asset-backed securities92 Priced by a third-party vendor using a discounted cash flow pricing modelConstant prepayment rate
1.0% - 8.0% (4.2%)
Constant default rate
0.0% - 7.4% (1.6%)
Loss severity
35.0% - 100.0% (43.6%)
Spread over the benchmark curve (c)
163bps weighted-average
Loans - Residential real estate - Uninsured497 Consensus pricing (b)Cumulative default rate
3.6% - 100.0% (51.6%)
Loss severity
0.0% - 100.0% (4.8%)
Discount rate
5.5% - 7.5% (5.7%)
Loans - Residential real estate75 Discounted cash flowLoss severity
6.0% weighted-average
Discount rate
7.0% weighted-average
Loans - Home equity - First-lien13 Consensus pricing (b)Cumulative default rate
3.6% - 100.0% (50.4%)
Loss severity
0.0% - 100.0% (12.1%)
Discount rate
5.5% - 7.5% (6.1%)
Loans - Home equity - Second-lien78 Consensus pricing (b)Credit and liquidity discount
0.3% - 100.0% (40.1%)
Equity investments 2,223 Multiple of adjusted earningsMultiple of earnings
5.5x - 26.7x (10.4x)
Residential mortgage servicing rights2,523 Discounted cash flowConstant prepayment rate
0.0% - 49.6% (6.7%)
Spread over the benchmark curve (c)
455bps - 2,201bps (755bps)
Commercial mortgage servicing rights1,041 Discounted cash flowConstant prepayment rate
4.4% - 7.6% (4.6%)
Discount rate
9.3% - 11.2% (10.9%)
Financial derivatives - Swaps related to
    sales of certain Visa Class B
    common shares		(157)Discounted cash flowEstimated conversion factor of Visa Class B shares into Class A shares
1.53 weighted-average
Estimated annual growth rate of Visa Class A share price
16.0%
Estimated litigation resolution date
Q1 2026
Insignificant Level 3 assets, net of
    liabilities (d)		29 
Total Level 3 assets, net of liabilities (e)$7,118 
(Continued from previous page)

December 31, 2024
Level 3 Instruments Only
Dollars in millions		Fair ValueValuation TechniquesUnobservable InputsRange (Weighted-Average) (a)
Commercial mortgage loans held for sale$4 Discounted cash flowSpread over the benchmark curve (c)
560bps - 1,075bps (970bps)
Residential mortgage-backed
    non-agency securities		603 Priced by a third-party vendor using a discounted cash flow pricing modelConstant prepayment rate
1.0% - 27.9% (4.2%)
Constant default rate
0.0% - 12.0% (1.9%)
Loss severity
15.0% - 69.0% (42.4%)
Spread over the benchmark curve (c)
216bps weighted-average
Asset-backed securities93 Priced by a third-party vendor using a discounted cash flow pricing modelConstant prepayment rate
1.0% - 8.0% (3.8%)
Constant default rate
0.0% - 7.1% (1.5%)
Loss severity
35.0% - 100.0% (45.3%)
Spread over the benchmark curve (c)
170bps weighted-average
Loans - Residential real estate - Uninsured504 Consensus pricing (b)Cumulative default rate
3.6% - 100.0% (52.5%)
Loss severity
0.0% - 100.0% (5.0%)
Discount rate
5.5% - 7.5% (5.7%)
Loans - Residential real estate73 Discounted cash flowLoss severity
6.0% weighted-average
Discount rate
7.2% weighted-average
Loans - Home equity - First-lien14 Consensus pricing (b)Cumulative default rate
3.6% - 100.0% (51.6%)
Loss severity
0.0% - 100.0% (12.3%)
Discount rate
5.5% - 7.5% (6.1%)
Loans - Home equity - Second-lien79 Consensus pricing (b)
Credit and liquidity discount
0.3% - 100.0% (41.2%)
Equity investments 2,111 Multiple of adjusted earningsMultiple of earnings
5.5x - 26.7x (10.5x)
Residential mortgage servicing rights2,626 Discounted cash flowConstant prepayment rate
0.0% - 40.3% (6.4%)
Spread over the benchmark curve (c)
381bps - 2,202bps (755bps)
Commercial mortgage servicing rights1,085 Discounted cash flowConstant prepayment rate
4.3% - 7.4% (4.4%)
Discount rate
9.6% - 11.5% (11.2%)
Financial derivatives - Swaps related to
    sales of certain Visa Class B
    common shares		(143)Discounted cash flowEstimated conversion factor of Visa Class B shares into Class A shares
1.54 weighted-average
Estimated annual growth rate of Visa Class A share price
16.0%
Estimated litigation resolution date
Q1 2026
Insignificant Level 3 assets, net of
    liabilities (d) 		45  
Total Level 3 assets, net of liabilities (e)$7,094    
(a)Unobservable inputs were weighted by the relative fair value of the instruments.
(b)Consensus pricing refers to fair value estimates that are generally internally developed using information such as dealer quotes or other third-party provided valuations or comparable asset prices.
(c)The assumed yield spread over the benchmark curve for each instrument is generally intended to incorporate non-interest rate risks, such as credit and liquidity risks.
(d)Represents the aggregate amount of Level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant. The amount includes certain financial derivative assets and liabilities, trading securities, other securities, other assets, other borrowed funds and other liabilities. At December 31, 2024, the amount also includes residential mortgage loans held for sale.
(e)Consisted of total Level 3 assets of $7.4 billion and total Level 3 liabilities of $0.3 billion at both March 31, 2025 and December 31, 2024.

Financial Assets Accounted for at Fair Value on a Nonrecurring Basis

We may be required to measure certain financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower of amortized cost or fair value accounting or write-downs of individual assets due to impairment and are included in Table 70. For more information regarding the valuation methodologies of our financial assets measured at fair value on a nonrecurring basis, see Note 14 Fair Value in our 2024 Form 10-K.
Assets measured at fair value on a nonrecurring basis follow:

Table 70: Fair Value Measurements – Nonrecurring (a) (b) (c)
 Fair Value Gains (Losses)
Three months ended
In millionsMarch 31
2025		December 31
2024		March 31
2025		March 31
2024
Assets
Nonaccrual loans$557 $629 $(83)$(60)
Equity investments35 198 (6)(10)
Loans held for sale36 — (4)— 
OREO and foreclosed assets4 8 — — 
Long-lived assets7 18 (2)(3)
Total assets$639 $853 $(95)$(73)
(a)All Level 3 for the periods presented, except for $36 million included in Loans held for sale which was categorized as Level 2 as of March 31, 2025.
(b)Valuation techniques applied were fair value of property or collateral.
(c)Unobservable inputs used were appraised value/sales price, broker opinions or projected income/required improvement costs. Additional quantitative information was not meaningful for the periods presented.

Financial Instruments Accounted for under Fair Value Option

We elect the fair value option to account for certain financial instruments. For more information on these financial instruments for which the fair value option election has been made, refer to the Fair Value Measurement section of this Note 11. These financial instruments are initially measured at fair value. Gains and losses from initial measurement and any changes in fair value are subsequently recognized in earnings. For interest-bearing deposits, however, any changes in fair value attributable to instrument-specific credit risk are recognized in OCI.

Interest income related to changes in the fair values of these financial instruments is recorded on the Consolidated Income Statement in Other interest income, except for certain residential mortgage loans, for which income is also recorded in Loans interest income. Changes in the value on prepaid forward contracts included in Other assets is reported in Noninterest expense, and interest expense on the Other borrowed funds is reported in Borrowed funds interest expense. Fair value gains and losses recognized in earnings on interest-bearing deposits are reported in Deposits interest expense, consistent with the classification of contractual interest on these deposits.

We have excluded accrued interest from the fair value amounts reported in Table 71. We have excluded interest income and interest expense from the changes in fair value reported in Table 72.
Fair values and aggregate unpaid principal balances of items for which we elected the fair value option are as follows:

Table 71: Fair Value Option – Fair Value and Principal Balances
March 31, 2025December 31, 2024
In millionsFair ValueAggregate Unpaid
Principal Balance		DifferenceFair ValueAggregate Unpaid
Principal Balance		Difference
Assets
Residential mortgage loans held for sale
Accruing loans less than 90 days past due$520 $518 $2 $588 $588 $— 
Accruing loans 90 days or more past due13 13 — 11 11 — 
Nonaccrual loans9 11 (2)29 36 (7)
Total$542 $542 $— $628 $635 $(7)
Commercial mortgage loans held for sale (a) (b)
Accruing loans less than 90 days past due$465 $460 $5 $203 $200 $3 
Loans
Accruing loans less than 90 days past due$746 $827 $(81)$494 $505 $(11)
Accruing loans 90 days or more past due126 138 (12)126 137 (11)
Nonaccrual loans277 381 (104)536 718 (182)
Total$1,149 $1,346 $(197)$1,156 $1,360 $(204)
Other assets$131 $130 $1 $133 $142 $(9)
Liabilities
Interest-bearing deposits $1,160 $1,160 $— $— $— $— 
Other borrowed funds$33 $35 $(2)$34 $35 $(1)
Other liabilities with contractual unpaid principal balance$28 $31 $(3)$28 $32 $(4)
Other liabilities without contractual unpaid principal balance$86 $— $86 $106 $— $106 
(a)There were no accruing loans 90 days or more past due within this category at March 31, 2025 or December 31, 2024.
(b)There were no nonaccrual loans within this category at March 31, 2025 or December 31, 2024.
The changes in fair value for items for which we elected the fair value option are as follows:

Table 72: Fair Value Option – Changes in Fair Value Included in Earnings (a)
Gains (Losses)
 Three months ended
March 31March 31
In millions20252024
Assets
Residential mortgage loans held for sale$(4)$8 
Commercial mortgage loans held for sale$11 $(5)
Loans$7 $6 
Other assets$(9)$5 
Liabilities
Interest-bearing deposits$(1)$— 
Other liabilities$(7)$(2)
(a)The impact on earnings of offsetting hedged items or hedging instruments is not reflected in these amounts.

Additional Fair Value Information Related to Financial Instruments Not Recorded at Fair Value
The following table presents the carrying amounts and estimated fair values, as well as the level within the fair value hierarchy, of all other financial instruments that are not recorded on our Consolidated Balance Sheet at fair value as of March 31, 2025 and December 31, 2024. For more information regarding the methods and assumptions used to estimate the fair values of financial instruments included in Table 73, see Note 14 Fair Value in our 2024 Form 10-K.
Table 73: Additional Fair Value Information Related to Other Financial Instruments

 CarryingFair Value
In millionsAmountTotalLevel 1Level 2Level 3
March 31, 2025
Assets
Cash and due from banks$6,102 $6,102 $6,102 $— $— 
Interest-earning deposits with banks (a)32,298 32,298 31,878 420 — 
Securities held-to-maturity74,461 70,926 22,597 48,176 153 
Net loans (excludes leases)306,493 302,922 — — 302,922 
Other assets6,294 6,294 — 6,294 — 
Total assets$425,648 $418,542 $60,577 $54,890 $303,075 
Liabilities
Time deposits$32,307 $32,532 $— $32,532 $— 
Borrowed funds58,873 59,701 — 58,827 874 
Unfunded lending related commitments674 674 — — 674 
Other liabilities1,081 1,081 — 1,081 — 
Total liabilities$92,935 $93,988 $— $92,440 $1,548 
December 31, 2024
Assets
Cash and due from banks$6,904 $6,904 $6,904 $— $— 
Interest-earning deposits with banks (a)39,347 39,347 38,993 354 — 
Securities held-to-maturity77,698 73,058 23,992 48,914 152 
Net loans (excludes leases)304,129 298,241 — — 298,241 
Other assets5,722 5,722 — 5,713 9 
Total assets$433,800 $423,272 $69,889 $54,981 $298,402 
Liabilities
Time deposits$34,339 $34,383 $— $34,383 $— 
Borrowed funds60,302 61,260 — 60,350 910 
Unfunded lending related commitments719 719 — — 719 
Other liabilities1,058 1,058 — 1,058 — 
Total liabilities$96,418 $97,420 $— $95,791 $1,629 
(a)In the second quarter of 2024, we reclassified balances held at the FRB from Level 2 to Level 1 to align with our updated cash and cash equivalents policy. For additional details, see Note 1 Accounting Policies.

The aggregate fair values in Table 73 represent only a portion of the total market value of our assets and liabilities as, in accordance with the guidance related to fair values about financial instruments, we exclude the following:
•financial instruments recorded at fair value on a recurring basis (as they are disclosed in Table 67),
•investments accounted for under the equity method,
•equity securities without a readily determinable fair value that apply for the alternative measurement approach to fair value under ASU 2016-01,
•real and personal property,
•lease financing,
•loan customer relationships,
•deposit customer intangibles,
•MSRs,
•retail branch networks,
•fee-based businesses, such as asset management and brokerage,
•trade receivables and payables due in one year or less,
•deposit liabilities with no defined or contractual maturities under ASU 2016-01 and
•insurance contracts.