Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

or

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-09718

THE PNC FINANCIAL SERVICES GROUP, INC.

(Exact name of registrant as specified in its charter)

			Pennsylvania						25-1435979
			(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

The Tower at PNC Plaza, 300 Fifth Avenue, Pittsburgh, Pennsylvania 15222-2401

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code - (888) 762-2265

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class			Trading Symbol(s)			Name of Each Exchange on Which Registered
Common Stock, par value $5.00			PNC			New York Stock Exchange
Depositary Shares Each Representing a 1/4,000 Interest in a Share of Fixed-to- Floating Rate Non-Cumulative Perpetual Preferred Stock, Series P			PNC P			New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

$1.80 Cumulative Convertible Preferred Stock - Series B, par value $1.00

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such

files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer			☒			Accelerated filer			☐						Emerging growth company			☐
Non-accelerated filer			☐			Smaller reporting company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

The aggregate market value of the registrant’s outstanding voting common stock held by nonaffiliates on June 30, 2021, determined using the per share closing price on that date on the New York Stock Exchange of $190.76, was approximately $80.8 billion. There is no non-voting common equity of the registrant outstanding.

Number of shares of registrant’s common stock outstanding at February 4, 2022: 418,454,799

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive Proxy Statement of The PNC Financial Services Group, Inc. to be filed pursuant to Regulation 14A for the 2022 annual meeting of shareholders (Proxy Statement) are incorporated by reference into Part III of this Form 10-K.

THE PNC FINANCIAL SERVICES GROUP, INC.

Cross-Reference Index to 2021 Form 10-K

TABLE OF CONTENTS

						Page
PART I
Item 1			Business.			1
Item 1A			Risk Factors.			15
Item 1B			Unresolved Staff Comments.			32
Item 2			Properties.			32
Item 3			Legal Proceedings.			32
Item 4			Mine Safety Disclosures.			32
Information about our Executive Officers						33
PART II
Item 5			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.			34
			Common Stock Performance Graph			36
Item 6			Selected Financial Data			37
Item 7			Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).			38
			Executive Summary			38
			Consolidated Income Statement Review			42
			Consolidated Balance Sheet Review			45
			Business Segments Review			49
			Risk Management			57
			Critical Accounting Estimates and Judgments			82
			Cautionary Statement Regarding Forward-Looking Information			84
Item 7A			Quantitative and Qualitative Disclosures about Market Risk			86
Item 8			Financial Statements and Supplementary Data			86
			Report of Independent Registered Public Accounting Firm			87
			Consolidated Income Statement			90
			Consolidated Statement of Comprehensive Income			91
			Consolidated Balance Sheet			92
			Consolidated Statement of Changes in Equity			93
			Consolidated Statement of Cash Flows			94
			Notes to Consolidated Financial Statements			96
			Note 1 Accounting Policies			96
			Note 2 Acquisition and Divestiture Activity			111
			Note 3 Investment Securities			115
			Note 4 Loans and Related Allowance for Credit Losses			118
			Note 5 Loan Sale and Servicing Activities and Variable Interest Entities			130

THE PNC FINANCIAL SERVICES GROUP, INC.

Cross-Reference Index to 2021 Form 10-K (continued)

TABLE OF CONTENTS (Continued)

						Page
Item 8			Financial Statements and Supplementary Data. (continued)
			Note 6 Goodwill and Mortgage Servicing Rights			133
			Note 7 Leases			135
			Note 8 Premises, Equipment and Leasehold Improvements			137
			Note 9 Time Deposits			138
			Note 10 Borrowed Funds			138
			Note 11 Commitments			140
			Note 12 Equity			141
			Note 13 Other Comprehensive Income			143
			Note 14 Earnings Per Share			144
			Note 15 Fair Value			145
			Note 16 Financial Derivatives			158
			Note 17 Employee Benefit Plans			164
			Note 18 Stock Based Compensation Plans			170
			Note 19 Income Taxes			171
			Note 20 Regulatory Matters			173
			Note 21 Legal Proceedings			174
			Note 22 Parent Company			178
			Note 23 Segment Reporting			180
			Note 24 Fee-based Revenue from Contracts with Customers			183
			Note 25 Subsequent Events			186
			Statistical Information (Unaudited)			187
			Glossary			191
			Defined Terms			191
			Acronyms			195
Item 9			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.			196
Item 9A			Controls and Procedures.			196
Item 9B			Other Information.			196
PART III
Item 10			Directors, Executive Officers and Corporate Governance.			196
Item 11			Executive Compensation.			197
Item 12			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.			197
Item 13			Certain Relationships and Related Transactions, and Director Independence.			197
Item 14			Principal Accounting Fees and Services.			198
PART IV
Item 15			Exhibits, Financial Statement Schedules.			198
Item 16			Form 10-K Summary			203
SIGNATURES						204

THE PNC FINANCIAL SERVICES GROUP, INC.

Cross-Reference Index to 2021 Form 10-K (continued)

MD&A TABLE REFERENCE

Table			Description			Page
1			Summarized Average Balances and Net Interest Income			42
2			Noninterest Income			43
3			Noninterest Expense			43
4			Provision for (Recapture of) Credit Losses			44
5			Summarized Balance Sheet Data			45
6			Loans			46
7			Investment Securities			47
8			Weighted-Average Expected Maturities of Mortgage and Asset-Backed Debt Securities			47
9			Details of Funding Sources			48
10			Retail Banking Table			50
11			Corporate & Institutional Banking Table			53
12			Asset Management Group Table			56
13			Details of Loans			62
14			Commercial and Industrial Loans by Industry			62
15			Commercial Real Estate Loans by Geography and Property Type			63
16			Residential Real Estate Statistics			64
17			Home Equity Loan Statistics			65
18			Auto Loan Statistics			66
19			Nonperforming Assets by Type			66
20			Change in Nonperforming Assets			67
21			Accruing Loans Past Due			67
22			Summary of Troubled Debt Restructurings			68
23			Allowance for Credit Losses by Loan Class			70
24			Loan Charge-Offs and Recoveries			71
25			Senior and Subordinated Debt			72
26			PNC Bank Notes Redeemed			73
27			Parent Company Notes Issued			74
28			Contractual Obligations			74
29			Other Commitments			74
30			Credit Ratings for PNC and PNC Bank			75
31			Basel III Capital			76
32			Interest Sensitivity Analysis			77
33			Net Interest Income Sensitivity to Alternative Rate Scenarios			78
34			Alternate Interest Rate Scenarios: One Year Forward			78
35			Equity Investments Summary			80
36			Key Macroeconomic Variables in CECL Weighted-Average Scenarios			83

THE PNC FINANCIAL SERVICES GROUP, INC.

Cross-Reference Index to 2021 Form 10-K (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE

Table			Description			Page
37			Acquisition Consideration			111
38			Fair Value and Unpaid Principal Balance of Loans from the BBVA Acquisition			112
39			Intangible Assets			112
40			BBVA Financial Results			113
41			Unaudited Pro Forma Results			113
42			PCD Loan Activity			114
43			Consolidated Income Statement - Discontinued Operations			114
44			Consolidated Statement of Cash Flows - Discontinued Operations			114
45			Investment Securities Summary			115
46			Gross Unrealized Loss and Fair Value of Securities Available for Sale Without an Allowance for Credit Losses			116
47			Gains (Losses) on Sales of Securities Available for Sale			116
48			Contractual Maturity of Debt Securities			117
49			Fair Value of Securities Pledged and Accepted as Collateral			117
50			Analysis of Loan Portfolio			119
51			Nonperforming Assets			120
52			Commercial Credit Quality Indicators			122
53			Credit Quality Indicators for Residential Real Estate and Home Equity Loan Classes			124
54			Credit Quality Indicators for Automobile, Credit Card, Education and Other Consumer Loan Classes			126
55			Financial Impact and TDRs by Concession Type			128
56			Rollforward of Allowance for Credit Losses			128
57			Rollforward of Allowance for Loan and Lease Losses and Associated Loan Data			129
58			Cash Flows Associated with Loan Sale and Servicing Activities			131
59			Principal Balance, Delinquent Loans and Net Charge-offs Related to Serviced Loans For Others			131
60			Non-Consolidated VIEs			132
61			Goodwill by Business Segment			133
62			Commercial Mortgage Servicing Rights			134
63			Residential Mortgage Servicing Rights			134
64			Commercial Mortgage Servicing Rights – Key Valuation Assumptions			135
65			Residential Mortgage Servicing Rights – Key Valuation Assumptions			135
66			Lessor Income			135
67			Sales-Type and Direct Financing Leases			136
68			Future Minimum Lessor Receivable Arrangements			136
69			Operating Lease Costs and Cash Flows			136
70			Operating Lease Assets and Liabilities			136
71			Operating Lease Term and Discount Rates of Lessee Arrangements			137
72			Future Lease Payments for Operating Lease Liability Arrangements			137
73			Premises, Equipment and Leasehold Improvements			137
74			Depreciation and Amortization Expense			137
75			Time Deposits			138
76			Borrowed Funds			138
77			FHLB Borrowings, Senior Debt and Subordinated Debt			138
78			Commitments to Extend Credit and Other Commitments			140
79			Preferred Stock - Authorized, Issued and Outstanding			141
80			Terms of Outstanding Preferred Stock			141

THE PNC FINANCIAL SERVICES GROUP, INC.

Cross-Reference Index to 2021 Form 10-K (continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS TABLE REFERENCE (Continued)

Table			Description			Page
81			Dividends Per Share			142
82			Other Comprehensive Income (Loss)			143
83			Accumulated Other Comprehensive Income (Loss) Components			143
84			Basic and Diluted Earnings Per Common Share			144
85			Fair Value Measurements – Recurring Basis Summary			149
86			Reconciliation of Level 3 Assets and Liabilities			150
87			Fair Value Measurements – Recurring Quantitative Information			152
88			Fair Value Measurements – Nonrecurring			154
89			Fair Value Option – Fair Value and Principal Balances			155
90			Fair Value Option – Changes in Fair Value			155
91			Additional Fair Value Information Related to Other Financial Instruments			157
92			Total Gross Derivatives			158
93			Gains (Losses) Recognized on Fair Value and Cash Flow Hedges in the Consolidated Income Statement			160
94			Hedged Items - Fair Value Hedges			160
95			Risk Participation Agreements			161
96			Gains (Losses) on Derivatives Not Designated for Hedging			162
97			Derivative Assets and Liabilities Offsetting			163
98			Credit-Risk Contingent Features			164
99			Reconciliation of Changes in Projected Benefit Obligation and Change in Plan Assets			165
100			Asset Strategy Allocations			166
101			Pension Plan Valuation Methodologies			167
102			Pension Plan Assets - Fair Value Hierarchy			167
103			Estimated Cash Flows			168
104			Components of Net Periodic Benefit Cost			168
105			Net Periodic Costs - Assumptions			169
106			Other Pension Assumptions			169
107			Nonvested Performance Share Unit Awards and Restricted Share Unit Awards - Rollforward			170
108			Components of Income Tax Expense			171
109			Deferred Tax Assets and Liabilities			171
110			Reconciliation of Statutory and Effective Tax Rates			172
111			Net Operating Loss Carryforwards			172
112			Change in Unrecognized Tax Benefits			172
113			IRS Tax Examination Status			173
114			Basel Regulatory Capital			173
115			Parent Company - Income Statement			178
116			Parent Company - Balance Sheet			179
117			Parent Company - Interest Paid and Income Tax Refunds			180
118			Parent Company - Statement of Cash Flows			180
119			Results of Businesses			182
120			Retail Banking Noninterest Income Disaggregation			184
121			Corporate & Institutional Banking Noninterest Income Disaggregation			185
122			Asset Management Group Noninterest Income Disaggregation			185

PART I

Forward-Looking Statements: From time to time, The PNC Financial Services Group, Inc. has made and may continue to make written or oral forward-looking 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 or the impact of legal, regulatory or supervisory matters on our business operations or performance. This Annual Report on Form 10-K (the Report or Form 10-K) also includes forward-looking statements. With respect to all such forward-looking statements, you should review our Risk Factors discussion in Item 1A, our Risk Management, Critical Accounting Estimates and Judgments, and Cautionary Statement Regarding Forward-Looking Information sections included in Item 7, and Note 21 Legal Proceedings in the Notes to Consolidated Financial Statements included in Item 8 of this Report. In this Report, “PNC”, “we”, “us”, “the Company” or “the Corporation” refers to The PNC Financial Services Group, Inc. and its subsidiaries on a consolidated basis (except when referring to PNC as a public company, its common stock or other securities issued by PNC, which just refer to The PNC Financial Services Group, Inc.). References to The PNC Financial Services Group, Inc. or to any of its subsidiaries are specifically made where applicable.

See page 191 for a glossary of certain terms and acronyms used in this Report.