PNC FINANCIAL SERVICES GROUP INC
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
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FY2024 · Filed Feb 21, 2025
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Residential Mortgage Servicing Rights – Key Valuation Assumptions
Table 66: Residential Mortgage Servicing Rights – Key Valuation Assumptions
| Dollars in millions · December 31, 2024 · December 31, 2023 | ||||
|---|---|---|---|---|
| Fair value | $2,626 | $2,654 | ||
| Weighted-average life (years) | 8.0 | 8.1 | ||
| Weighted-average constant prepayment rate | 6.39 | % | 6.42 | % |
| Decline in fair value from 10% adverse change | $57 | $60 | ||
| Decline in fair value from 20% adverse change | $111 | $117 | ||
| Weighted-average option adjusted spread | 755 | bps | 765 | bps |
| Decline in fair value from 10% adverse change | $81 | $83 | ||
| Decline in fair value from 20% adverse change | $157 | $161 | ||
Fees from mortgage loan servicing, which include contractually specified servicing fees, late fees and ancillary fees, were $0.7 billion for both 2024 and 2023, compared to $0.6 billion for 2022. We also generate servicing fees from fee-based 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 enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 Accounting Policies. For additional details on our equipment lease financing receivables, see Note 3 Loans and Related Allowance for Credit Losses.
Lessor Arrangements
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.
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