PNC FINANCIAL SERVICES GROUP, INC.

Table 2: Balance Sheet Highlights and Other Selected Ratios

(a)The Executive Summary and Consolidated Balance Sheet Review portions of this Financial Review provide information regarding items impacting the comparability of applicable periods presented.

(b)The December 31, 2024 and June 30, 2024 ratios are calculated to reflect PNC’s election to adopt the CECL optional five-year transition provisions. The impact of the provisions was phased-in to regulatory capital through December 31, 2024.

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

Income Statement Highlights

Net income of $1.6 billion, or $3.85 per diluted common share, for the second quarter of 2025 increased $144 million, or 10%, compared to $1.5 billion, or $3.51 per diluted common share, for the first quarter of 2025, primarily due to higher noninterest and net interest income, partially offset by a higher provision for credit losses.

•For the three months ended June 30, 2025 compared to the three months ended March 31, 2025:

•Total revenue of $5.7 billion increased $209 million, or 4%.

•Net interest income of $3.6 billion increased $79 million, or 2%, driven by loan growth, the continued benefit of fixed rate asset repricing and one additional day in the quarter.

•Net interest margin increased 2 basis points to 2.80%.

•Noninterest income of $2.1 billion increased $130 million, or 7%, primarily due to Visa related activity and other positive valuation adjustments as well as higher card and cash management revenue. The second quarter of 2025 included positive $2 million of Visa derivative fair value adjustments, compared to negative $40 million in the first quarter of 2025.

•Provision for credit losses was $254 million in the second quarter of 2025 and was driven by net charge-offs and a net increase in the ACL due to changes in macroeconomic scenarios, tariff related considerations and portfolio activity, including loan growth. The first quarter of 2025 included a provision for credit losses of $219 million.

•Noninterest expense was stable compared to the first quarter of 2025, reflecting a continued focus on expense management, offset by seasonally higher marketing spend and expenses related to continued technology investment.

Net income of $3.1 billion, or $7.37 per diluted common share, for the first six months of 2025 increased $321 million, or 11%, compared to $2.8 billion, or $6.48 per diluted common share, for the same period in 2024 driven by higher net interest and noninterest income, partially offset by a higher provision for credit losses and increased noninterest expense.

•For the six months ended June 30, 2025 compared to the six months ended June 30, 2024:

•Total revenue increased $557 million, or 5%, to $11.1 billion.

•Net interest income increased $465 million, or 7%, primarily due to the benefit of lower funding costs and continued repricing of fixed rate assets.

•Net interest margin increased 21 basis points.

•Noninterest income increased $92 million, or 2%, primarily due to higher capital markets and advisory fees, asset management and brokerage income and card and cash management revenue, partially offset by lower other noninterest income. Other noninterest income for the first six months of 2024 included the benefit of $141 million of significant items recognized in the second quarter of 2024.

•Provision for credit losses was $473 million in the first six months of 2025 and was driven by net charge-offs and a net increase in the ACL due to changes in macroeconomic scenarios, tariff related considerations and portfolio activity, including loan growth. The first six months of 2024 included a provision for credit losses of $390 million.

•Noninterest expense increased $79 million, or 1%, compared to the first six months of 2024, due to higher expenses related to personnel and technology investments as well as increased marketing spend, partially offset by other noninterest expense. Other noninterest expense included $120 million of significant items in the second quarter of 2024 as well as a $130 million pre-tax expense in the first quarter of 2024 related to the FDIC’s special assessment.

For additional detail, see the Consolidated Income Statement Review section of this Financial Review.

Balance Sheet Highlights

Our balance sheet was well positioned at June 30, 2025. In comparison to December 31, 2024:

•Total assets of $559.1 billion were stable reflecting lower balances held with the FRB, partially offset by higher loans and securities balances.

•Total loans of $326.3 billion increased $9.9 billion, or 3%.

•Total commercial loans increased $10.8 billion, or 5%, to $227.0 billion, due to growth in the commercial and industrial portfolio, reflecting new production and higher utilization of loan commitments, partially offset by lower commercial real estate loans.

•Total consumer loans decreased $1.0 billion, or 1%, to $99.3 billion primarily due to lower residential real estate loans as paydowns outpaced originations, partially offset by growth in the auto loan portfolio.

•Investment securities increased $2.6 billion, or 2%, to $142.3 billion due to net purchase activity, primarily of agency residential mortgage-backed securities.

•Interest-earning deposits with banks, primarily with the FRB, decreased $14.9 billion, or 38%, to $24.5 billion, primarily driven by higher loans and securities balances.

•Total deposits were stable as lower interest-bearing deposits were offset by higher noninterest-bearing deposits.

•Borrowed funds decreased $1.2 billion, or 2%, to $60.4 billion due to lower FHLB advances, partially offset by higher senior debt outstanding.

The PNC Financial Services Group, Inc. –Form 10-Q 3

For additional detail, see the Consolidated Balance Sheet Review section of this Financial Review.

Credit Quality Highlights

The second quarter of 2025 reflected solid credit quality performance.

•At June 30, 2025 compared to December 31, 2024:

•Overall loan delinquencies of $1.3 billion decreased $79 million, or 6%, reflecting lower consumer and commercial loan delinquencies.

•The ACL related to loans, which consists of the ALLL and the allowance for unfunded lending related commitments, totaled $5.3 billion at June 30, 2025, compared to $5.2 billion at December 31, 2024. The increase in reserves was driven primarily by changes in macroeconomic scenarios. ACL to total loans was 1.62% at June 30, 2025, compared to 1.64% at December 31, 2024.

•Nonperforming assets of $2.1 billion decreased $0.2 billion, or 9%, primarily driven by lower commercial nonperforming loans, including lower commercial real estate nonperforming loans.

•Net loan charge-offs of $198 million, or 0.25% of average loans, in the second quarter of 2025 decreased $7 million compared to the first quarter of 2025, due to lower consumer net loan charge-offs, partially offset by higher commercial net loan charge-offs, primarily related to the commercial real estate portfolio.

For additional detail see the Credit Risk Management portion of the Risk Management section of this Financial Review.

Capital and Liquidity Highlights

We maintained our strong capital and liquidity positions.

•Common shareholders’ equity of $51.9 billion at June 30, 2025 increased $3.2 billion compared to December 31, 2024, due to the benefit of net income and an improvement in AOCI, partially offset by common dividends paid and common share repurchases.

•In the second quarter of 2025, PNC returned $1.0 billion of capital to shareholders, including more than $0.6 billion of dividends on common shares and more than $0.3 billion of common share repurchases.

•On July 3, 2025, the PNC Board of Directors raised the quarterly cash dividend on common stock to $1.70 per share, an increase of 10 cents, or 6%, per share. The dividend is payable on August 5, 2025 to shareholders of record at the close of business July 15, 2025.

•Our CET1 ratio was 10.5% at both June 30, 2025 and December 31, 2024.

PNC’s ability to take certain capital actions, including returning capital to shareholders, is subject to PNC meeting or exceeding an SCB established by the Federal Reserve Board in connection with the Federal Reserve Board’s CCAR process. Based on the results of the Federal Reserve's 2025 annual stress test, PNC’s SCB for the four-quarter period beginning October 1, 2025 will remain at the regulatory minimum of 2.5%. For additional information on our liquidity and capital actions as well as our capital ratios, see Capital Management in the Risk Management section in this Financial Review, the Recent Regulatory Developments section in this Financial Review and the Supervision and Regulation section in our 2024 Form 10-K.

Business Outlook

Statements regarding our business outlook are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than those we are currently expecting and do not take into account potential legal and regulatory contingencies. These statements are based on our views that:

•The economic fundamentals remain solid in mid-2025. The labor market has eased but job growth continues, and job and income gains have supported consumer spending growth in the first half of 2025. However, downside risks have materially increased with recent substantial changes to U.S. tariffs and corresponding policy changes by U.S. trading partners.

•PNC’s baseline forecast remains for continued expansion, but slower economic growth in 2025 than in 2024. Tariffs and the uncertainty surrounding them will weigh on consumer spending and business investment. High interest rates remain a drag on the economy, consumer spending growth will slow to a pace more consistent with household income growth, and government’s contribution to economic growth will be smaller.

•The baseline forecast is for real GDP growth of around 1.5% in 2025 and 2026, with the unemployment rate increasing to around 4.5% over the next year. However, the recent turbulence in trade policy indicates that growth may be significantly weaker than in this forecast and the unemployment rate higher. The higher tariffs rates are, the longer they remain in place, and the more uncertainty that exists around them, the weaker economic growth will be and the higher the unemployment rate will be. The longer trade disputes persist, the greater the likelihood of near-term recession.

•The baseline forecast is for one federal funds rate cut of 25 basis points this year, at the last FOMC meeting of 2025, with additional rate cuts of 25 basis points at each of the first two FOMC meetings of 2026. This would put the federal funds rate in a range of 3.50% to 3.75% by the spring of next year. High inflation could mean less monetary easing than in the forecast,

4 The PNC Financial Services Group, Inc. –Form 10-Q but if the economy enters recession the Federal Reserve could cut the federal funds rate more aggressively this year.

Consistent with the forward guidance we provided on July 16, 2025, for the third quarter of 2025, compared to the second quarter of 2025, we expect:

•Average loans to be up approximately 1%,

•Net interest income to be up approximately 3%,

•Fee income to be up 3% to 4%,

•Other noninterest income to be $150 million to $200 million,

•Total revenue to be up 2% to 3%,

•Noninterest expense to be up approximately 2%, and

•Net loan charge-offs to be $275 million to $300 million.

Consistent with the forward guidance we provided on July 16, 2025, for the full year 2025, compared to the full year of 2024, we expect:

•Average loans to be up approximately 1%,

•Net interest income to be up approximately 7%,

•Noninterest income to be up 4% to 5%,

•Revenue to be up approximately 6%,

•Noninterest expense to be up approximately 1%, and

•The effective tax rate to be approximately 19%.

Other noninterest income, noninterest income and total revenue guidance does not forecast net securities gains or losses or Visa activity.

We are unable to provide a meaningful or accurate reconciliation of forward-looking non-GAAP measures, without unreasonable effort, to their most directly comparable GAAP financial measures. This is due to the inherent difficulty of forecasting the timing and amounts necessary for the reconciliation, when such amounts are subject to events that cannot be reasonably predicted, as noted in our Cautionary Statement. Accordingly, we cannot address the probable significance of unavailable information.

See the Cautionary Statement Regarding Forward-Looking Information section in this Financial Review and Item 1A Risk Factors included in our 2024 Form 10-K for other factors that could cause future events to differ, perhaps materially, from those anticipated in these forward-looking statements.