PNC FINANCIAL SERVICES GROUP, INC.
For the period ended Jun 30, 2025. Filed Aug 1, 2025.
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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, 2025 · Filed Aug 1, 2025
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Key Macroeconomic Variables in CECL Weighted-Average Scenarios
Table 38: Key Macroeconomic Variables in CECL Weighted-Average Scenarios
| Assumptions as of June 30, 2025 | |||
|---|---|---|---|
| 2025 | 2026 | 2027 | |
| U.S. real GDP (a) | 0.8% | 1.1% | 2.2% |
| U.S. unemployment rate (b) | 4.5% | 5.1% | 4.7% |
| Assumptions as of December 31, 2024 | |||
| 2025 | 2026 | 2027 | |
| U.S. real GDP (a) | 0.7% | 2.2% | 2.2% |
| U.S. unemployment rate (b) | 4.8% | 4.7% | 4.4% |
(a)Represents year-over-year growth rates.
(b)Represents quarterly average rate at December 31, 2025, 2026 and 2027, respectively.
The PNC Financial Services Group, Inc. –Form 10-Q 41
Real GDP growth is expected to end 2025 at 0.8% on a weighted average basis, similar to the 0.7% assumed at December 31, 2024. Growth then progresses to 1.1% and will continue to increase to 2.2% by the end of 2027. Unemployment is expected to increase moderately over the next year. The weighted-average unemployment rate will end 2025 at 4.5%, peaking at 5.1% in the fourth quarter of 2026, before decreasing to 4.7% by the end of 2027.
Qualitative Component
As further discussed in the Allowance for Credit Losses section of Note 1 Accounting Policies in our 2024 Form 10-K, we incorporate qualitative reserves in the ACL through detailed analysis to reflect our best estimate of expected losses that may not be adequately represented in our quantitative methods or economic assumptions. Qualitative factors may include, but are not limited to, inherent forecasting limitations, model imprecision, timing of available information, and/or emerging and ongoing credit risks. At June 30, 2025, the qualitative framework considers PNC’s view of the current state of the economy, which continues to reflect uncertainty due to the fundamental change in office demand, tariff and trade driven pressures, interest rate movements and housing affordability. Our most significant qualitative factor was related to the office portfolio of the commercial real estate loan class.
See the following for additional information related to our ACL:
Allowance for Credit Losses in the Credit Risk Management section of this Financial Review,
Note 2 Investment Securities and Note 3 Loans and Related Allowance for Credit Losses in this Report, and
Note 1 Accounting Policies in our 2024 Form 10-K.
Recently Issued Accounting Standards
| Accounting Standards Update | Description | Financial Statement Impact |
|---|---|---|
| Improvements to Income Tax Disclosures - ASU 2023-09Issued December 2023 | • Required with issuance of 2025 Form 10-K; early adoption is permitted.• Requires public business entities to, on an annual basis, (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.• Requires that all entities disclose, on an annual basis, (1) the amount of income taxes paid (net of refunds received), disaggregated by federal (national), state and foreign taxes, and (2) the amount of income taxes paid (net of refunds received), disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received).• Allows for either a prospective or retrospective transition approach. | • We are currently evaluating the disclosure requirements of this ASU and do not plan to early adopt.• This ASU will not impact our Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity or Consolidated Statement of Cash Flows. |
| Accounting Standards Update | Description | Financial Statement Impact |
| Disaggregation of Income Statement Expenses - ASU 2024-03Issued November 2024 | • Required with issuance of 2027 Form 10-K; early adoption is permitted.• Requires public business entities to disclose, in the notes to financial statements and on an annual and interim basis, specified information about certain costs and expenses (including, if relevant: employee compensation, depreciation, and intangible asset amortization).• Requires qualitative descriptions of amounts not separately disaggregated to be disclosed.• Requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.• Allows for either a prospective or retrospective transition approach. | • We are currently evaluating the disclosure requirements within this ASU and do not plan to early adopt.• This ASU will not impact our Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Statement of Changes in Equity or Consolidated Statement of Cash Flows. |
42 The PNC Financial Services Group, Inc. –Form 10-Q
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