PNC FINANCIAL SERVICES GROUP INC

Table 11: Details of Funding Sources

Deposits are considered an attractive source of funding due to their stability and relatively low cost to fund. Compared to December 31, 2023, both deposits and borrowed funds declined.

Total deposits decreased reflecting lower consumer and commercial deposits. Noninterest-bearing deposit balances decreased primarily driven by a decline in commercial balances. Interest-bearing deposits increased modestly reflecting higher commercial balances, partially offset by lower consumer balances. This shift in deposit composition contributed to an increase in funding costs compared to the first quarter of 2024. Our total brokered deposit balances of $10.5 billion at June 30, 2024 decreased compared to $11.0 billion at December 31, 2023, and were significantly below both our internal and regulatory guidelines and limits.

Borrowed funds decreased due to lower FHLB borrowings, partially offset by parent company senior debt issuances.

12 The PNC Financial Services Group, Inc. –Form 10-Q

The level and composition of borrowed funds fluctuates over time based on many factors, including market conditions, capital considerations, and funding needs, which are primarily driven by changes in loan, deposit and investment securities balances. While our largest source of liquidity on a consolidated basis is the customer deposit base generated by our banking businesses, we also manage our borrowed funds to provide a reliable source of liquidity for our banking and other activities, considering our LCR and NSFR requirements and other internal and external guidelines and constraints. See the Liquidity and Capital Management portion of the Risk Management section in this Financial Review for additional information regarding our liquidity and capital acti vities. See Note 7 Borrowed Funds in this Report and Note 9 Borrowed Funds in our 2023 Form 10-K for additional information related to our borrowings. See Average Consolidated Balance Sheet and Net Interest Analysis in the Statistical Information section of this Report for additional information on volume and related funding cost changes.

Shareholders’ Equity

Total shareholders’ equity was $52.6 billion at June 30, 2024, an increase of $1.5 billion compared to December 31, 2023, reflecting net income of $2.8 billion and an improvement in AOCI of $0.3 billion, partially offset by dividends paid of $1.4 billion and $0.2 billion of common share repurchases.