PNC FINANCIAL SERVICES GROUP INC
For the period ended Mar 31, 2024. Filed May 2, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 2, 2024
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Residential Mortgage Servicing Rights – Key Valuation Assumptions
Table 54: Residential Mortgage Servicing Rights – Key Valuation Assumptions
| Dollars in millions · March 31, 2024 · December 31, 2023 | ||||
|---|---|---|---|---|
| Fair value | $2,687 | $2,654 | ||
| Weighted-average life (years) | 8.1 | 8.1 | ||
| Weighted-average constant prepayment rate | 6.29% | 6.42% | ||
| Decline in fair value from 10% adverse change | $58 | $60 | ||
| Decline in fair value from 20% adverse change | $113 | $117 | ||
| Weighted-average option adjusted spread | 766 | bps | 765 | bps |
| Decline in fair value from 10% adverse change | $83 | $83 | ||
| Decline in fair value from 20% adverse change | $162 | $161 | ||
Fees from mortgage loan servicing, which include contractually specified servicing fees, late fees and ancillary fees were $0.2 billion for both three months ended March 31, 2024 and 2023. We also generate servicing fees from activities provided to others for which we do not have an associated servicing asset. Fees from commercial and residential MSRs are reported within Noninterest income on our Consolidated Income Statement in Residential and commercial mortgage.
NOTE 6 LEASES
PNC’s lessor arrangements primarily consist of direct financing, sales-type and operating leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term. For more information on lease accounting, see Note 1 Accounting Policies and Note 6 Leases in our 2023 Form 10-K.
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