PNC FINANCIAL SERVICES GROUP INC

Table 16: Commercial and Industrial Loans by Industry

(a)Represents loans to customers in the real estate and construction industries.

Owner occupied commercial real estate loans totaled $9.2 billion and $9.6 billion at December 31, 2024 and 2023, respectively. These loans are included in commercial and industrial loans as the credit decisioning for servicing these loans is based on the financial conditions of the owner, not the ability of the collateral to generate income. Owner occupied commercial real estate loans are well-diversified across industries.

Commercial Real Estate

Commercial real estate loans of $33.6 billion as of December 31, 2024 comprised $19.3 billion related to commercial mortgages on income-producing properties, $8.6 billion of intermediate-term financing loans and $5.7 billion of real estate construction project loans. At December 31, 2023, comparable amounts were $35.4 billion, $21.0 billion, $8.0 billion and $6.4 billion, respectively. Commercial real estate primarily consists of an investment in land and/or buildings held to generate income which serves as the primary source for the repayment of the loan. However, for all commercial real estate assets, the disposition of the assigned collateral serves as a secondary source of repayment for the loan should the borrower experience cash generation difficulties.

We monitor credit risk associated with our commercial real estate loans similar to commercial and industrial loans by analyzing PD and LGD. Additionally, risks associated with commercial real estate loans tend to be correlated to the loan structure, collateral location and quality, project progress and business environment. These attributes are also monitored and utilized in assessing credit risk. The portfolio is geographically diverse due to the nature of our business involving clients throughout the U.S.

60 The PNC Financial Services Group, Inc. –2024 Form 10-K