PNC FINANCIAL SERVICES GROUP INC
For the period ended Jun 30, 2024. Filed Aug 2, 2024.
View on SEC.govAbout this filing
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.
Jun 30, 2024 · Filed Aug 2, 2024
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Reconciliation of Level 3 Assets and Liabilities
Reconciliations of assets and liabilities measured at fair value on a recurring basis using Level 3 inputs for the three and six months ended June 30, 2024 and 2023 are as follows:
Table 67: Reconciliation of Level 3 Assets and Liabilities
Three Months Ended June 30, 2024
| Total realized / unrealizedgains or losses for the period (a) · Unrealizedgains/losses for the periodon assets andliabilities held onConsolidatedBalance Sheet atJune 30, 2024 (a) (c) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 3 Instruments OnlyIn millions · Fair Value Mar. 31, 2024 · Included inEarnings · Includedin Othercomprehensiveincome (b) · Purchases · Sales · Issuances · Settlements · TransfersintoLevel 3 · Transfersout ofLevel 3 · FairValue June 30, 2024 | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Residential mortgage loans held for sale | $98 | $12 | $(11) | $(2) | $1 | $(3)(d) | $95 | $(1) | ||||||||||||
| Commercial mortgage loans held for sale | 11 | (7) | 4 | |||||||||||||||||
| Securities available for sale | ||||||||||||||||||||
| Residential mortgage- backed non-agency | 668 | $3 | $(5) | (42) | 624 | |||||||||||||||
| Commercial mortgage- backed non-agency | 103 | 103 | ||||||||||||||||||
| Asset-backed | 100 | (1) | (3) | 96 | ||||||||||||||||
| Other | 53 | 3 | (2) | 54 | ||||||||||||||||
| Total securities available for sale | 924 | 3 | (6) | 3 | (47) | 877 | ||||||||||||||
| Loans | 713 | 4 | 7 | (2) | (18) | (3)(d) | 701 | 4 | ||||||||||||
| Equity investments | 2,030 | 31 | 47 | (78) | 2,030 | 23 | ||||||||||||||
| Residential mortgage servicing rights | 2,687 | 16 | 16 | $7 | (69) | 2,657 | 16 | |||||||||||||
| Commercial mortgage servicing rights | 1,075 | 65 | 12 | 8 | (78) | 1,082 | 65 | |||||||||||||
| Financial derivatives | 9 | 9 | 2 | (8) | 12 | 11 | ||||||||||||||
| Other assets | 8 | 8 | ||||||||||||||||||
| Total assets | $7,555 | $128 | $(6) | $99 | $(91) | $15 | $(229) | $1 | $(6) | $7,466 | $118 | |||||||||
| Liabilities | ||||||||||||||||||||
| Other borrowed funds | $9 | $4 | $(4) | $9 | ||||||||||||||||
| Financial derivatives | 113 | $110 | $2 | (42) | 183 | $115 | ||||||||||||||
| Other liabilities | 189 | 6 | 15 | (16) | 194 | 7 | ||||||||||||||
| Total liabilities | $311 | $116 | $2 | $19 | $(62) | $386 | $122 | |||||||||||||
| Net gains (losses) | $12(e) | $(4)(f) | ||||||||||||||||||
76 The PNC Financial Services Group, Inc. –Form 10-Q
Three Months Ended June 30, 2023
| Total realized / unrealizedgains or losses for the period (a) · Unrealized gains/losses for the period on assets and liabilities held on Consolidated Balance Sheet at June 30, 2023 (a) (c) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 3 Instruments OnlyIn millions · Fair Value Mar. 31, 2023 · Included in Earnings · Included in Other comprehensive income (b) · Purchases · Sales · Issuances · Settlements · Transfers into Level 3 · Transfers out of Level 3 · Fair Value June 30, 2023 | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Residential mortgage loans held for sale | $242 | $(4) | $3 | $(41) | $(2) | $(7)(d) | $191 | $(3) | ||||||||||||
| Commercial mortgage loans held for sale | 32 | 1 | (8) | 25 | ||||||||||||||||
| Securities available for sale | ||||||||||||||||||||
| Residential mortgage- backed non-agency | 787 | 4 | $14 | (37) | 768 | |||||||||||||||
| Commercial mortgage-backed non-agency | 3 | 3 | ||||||||||||||||||
| Asset-backed | 121 | 1 | (1) | (4) | 117 | |||||||||||||||
| Other | 53 | 3 | (2) | 54 | ||||||||||||||||
| Total securities available for sale | 964 | 5 | 13 | 3 | (43) | 942 | ||||||||||||||
| Loans | 757 | 3 | 11 | (1) | (28) | $8 | (5)(d) | 745 | 3 | |||||||||||
| Equity investments | 1,835 | 24 | 92 | (328) | 1,623 | 2 | ||||||||||||||
| Residential mortgage servicing rights | 2,232 | 81 | 91 | $5 | (60) | 2,349 | 80 | |||||||||||||
| Commercial mortgage servicing rights | 1,061 | 99 | 9 | 19 | (82) | 1,106 | 100 | |||||||||||||
| Financial derivatives | 19 | (10) | 2 | (5) | 6 | 4 | ||||||||||||||
| Total assets | $7,142 | $199 | $13 | $211 | $(370) | $24 | $(228) | $8 | $(12) | $6,987 | $186 | |||||||||
| Liabilities | ||||||||||||||||||||
| Other borrowed funds | $5 | $3 | $(3) | $5 | ||||||||||||||||
| Financial derivatives | 97 | $79 | $1 | (37) | 140 | $80 | ||||||||||||||
| Other liabilities | 229 | 31 | 89 | (110) | 239 | 21 | ||||||||||||||
| Total liabilities | $331 | $110 | $1 | $92 | $(150) | $384 | $101 | |||||||||||||
| Net gains (losses) | $89(e) | $85(f) | ||||||||||||||||||
The PNC Financial Services Group, Inc. –Form 10-Q 77
Six Months Ended June 30, 2024
| Total realized / unrealizedgains or losses for the period (a) · Unrealizedgains/losses for the periodon assets andliabilities held onConsolidatedBalance Sheet atJune 30, 2024 (a) (c) | ||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 3 Instruments OnlyIn millions · FairValueDec. 31,2023 · Included inEarnings · Includedin Othercomprehensiveincome (b) · Purchases · Sales · Issuances · Settlements · TransfersintoLevel 3 · Transfersout ofLevel 3 · FairValue June 30, 2024 | ||||||||||||||||||||
| Assets | ||||||||||||||||||||
| Residential mortgage loans held for sale | $103 | $(1) | $14 | $(11) | $(4) | $3 | $(9)(d) | $95 | $(2) | |||||||||||
| Commercial mortgage loans held for sale | 11 | (7) | 4 | |||||||||||||||||
| Securities available for sale | ||||||||||||||||||||
| Residential mortgage- backed non-agency | 696 | 6 | $(11) | (67) | 624 | |||||||||||||||
| Commercial mortgage- backed non-agency | 103 | 103 | ||||||||||||||||||
| Asset-backed | 102 | (1) | (5) | 96 | ||||||||||||||||
| Other | 55 | (2) | 1 | 3 | (3) | 54 | (2) | |||||||||||||
| Total securities available for sale | 956 | 4 | (11) | 3 | (75) | 877 | (2) | |||||||||||||
| Loans | 726 | 8 | 12 | (2) | (38) | (5)(d) | 701 | 8 | ||||||||||||
| Equity investments | 1,952 | 26 | 136 | (84) | 2,030 | 18 | ||||||||||||||
| Residential mortgage servicing rights | 2,654 | 88 | 29 | $12 | (126) | 2,657 | 88 | |||||||||||||
| Commercial mortgage servicing rights | 1,032 | 172 | 24 | 11 | (157) | 1,082 | 172 | |||||||||||||
| Financial derivatives | 6 | 18 | 2 | (14) | 12 | 21 | ||||||||||||||
| Other assets | 8 | 8 | ||||||||||||||||||
| Total assets | $7,448 | $315 | $(11) | $220 | $(97) | $23 | $(421) | $3 | $(14) | $7,466 | $303 | |||||||||
| Liabilities | ||||||||||||||||||||
| Other borrowed funds | $9 | $7 | $(7) | $9 | ||||||||||||||||
| Financial derivatives | 152 | $118 | $2 | (89) | 183 | $120 | ||||||||||||||
| Other liabilities | 237 | (14) | 28 | (57) | 194 | 9 | ||||||||||||||
| Total liabilities | $398 | $104 | $2 | $35 | $(153) | $386 | $129 | |||||||||||||
| Net gains (losses) | $211(e) | $174(f) | ||||||||||||||||||
78 The PNC Financial Services Group, Inc. –Form 10-Q
Six Months Ended June 30, 2023
| Total realized / unrealizedgains or losses for the period (a) · Unrealizedgains / losses for the periodon assets andliabilities held onConsolidatedBalance Sheet atJune 30, 2023 (a) (c) | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Level 3 Instruments OnlyIn millions · FairValueDec. 31,2022 · Included inEarnings · Includedin Othercomprehensiveincome (b) · Purchases · Sales · Issuances · Settlements · TransfersintoLevel 3 · Transfersout ofLevel 3 · Fair Value June 30, 2023 | |||||||||||||||||||||
| Assets | |||||||||||||||||||||
| Residential mortgage loans held for sale | $243 | $9 | $(42) | $(7) | $3 | $(15)(d) | $191 | $1 | |||||||||||||
| Commercial mortgage loans held for sale | 33 | (8) | 25 | ||||||||||||||||||
| Securities available for sale | |||||||||||||||||||||
| Residential mortgage- backed non-agency | 819 | $8 | $4 | (63) | 768 | ||||||||||||||||
| Commercial mortgage- backed non-agency | 3 | 3 | |||||||||||||||||||
| Asset-backed | 124 | 1 | (8) | 117 | |||||||||||||||||
| Other | 55 | (4) | 3 | (3) | 3 | 54 | |||||||||||||||
| Total securities available for sale | 1,001 | 9 | 3 | (74) | 3 | 942 | |||||||||||||||
| Loans | 769 | 6 | 20 | (1) | (50) | 15 | (14)(d) | 745 | 6 | ||||||||||||
| Equity investments | 1,778 | 145 | 232 | (398) | (134)(g) | 1,623 | 119 | ||||||||||||||
| Residential mortgage servicing rights | 2,310 | 33 | 109 | $10 | (113) | 2,349 | 33 | ||||||||||||||
| Commercial mortgage servicing rights | 1,113 | 108 | 17 | 32 | (164) | 1,106 | 108 | ||||||||||||||
| Financial derivatives | 5 | 7 | 3 | (9) | 6 | 10 | |||||||||||||||
| Total assets | $7,252 | $308 | $393 | $(441) | $42 | $(425) | $21 | $(163) | $6,987 | $277 | |||||||||||
| Liabilities | |||||||||||||||||||||
| Other borrowed funds | $4 | $6 | $(5) | $5 | |||||||||||||||||
| Financial derivatives | 123 | $118 | $3 | (104) | 140 | $122 | |||||||||||||||
| Other liabilities | 294 | 55 | 107 | (217) | 239 | 42 | |||||||||||||||
| Total liabilities | $421 | $173 | $3 | $113 | $(326) | $384 | $164 | ||||||||||||||
| Net gains (losses) | $135(e) | $113(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.
(g)Transfers out of Level 3 during the prior period were due to valuation methodology changes for certain private company investments. See Note 1 Accounting Policies in our 2023 Form 10-K for more information on our accounting for private company investments.
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.
The PNC Financial Services Group, Inc. –Form 10-Q 79
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