PNC FINANCIAL SERVICES GROUP, INC.

Net Interest Income

Table 3: Summarized Average Balances and Net Interest Income (a)

(a)Interest income calculated as taxable-equivalent interest income. To provide more meaningful comparisons of interest income and yields for all interest-earning assets, as well as net interest margins, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under GAAP on the Consolidated Income Statement. For more information, see Table 37 Reconciliation of Taxable-Equivalent Net Interest Income (non-GAAP).

(b)Interest income from Interest-earning deposits with banks primarily includes interest earned on our balances held with the FRB and is reported as Other interest income on our Consolidated Income Statement.

Changes in net interest income and margin result from the interaction of the volume and composition of interest-earning assets and related yields, interest-bearing liabilities and related rates paid and noninterest-bearing sources of funding. See Table 36 Average Consolidated Balance Sheet And Net Interest Analysis for additional information.

Net interest income increased $79 million, or 2%, and net interest margin increased 2 basis points, compared to the first quarter of 2025, driven by loan growth, the continued benefit of fixed rate asset repricing and one additional day in the quarter. Net interest income increased $465 million, or 7%, and net interest margin increased 21 basis points, compared to the first six months of 2024, primarily due to the benefit of lower funding costs and the continued repricing of fixed rate assets.

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

Average investment securities were stable, compared to the first quarter of 2025. Average investment securities increased $3.7 billion, or 3%, compared to the first six months of 2024, driven by net purchase activity of U.S. Treasury and government agency securities. Average investment securities represented 28% of average interest-earning assets for both the second and first quarters of 2025, and 28% for the first six months of 2025 compared to 27% for the first six months of 2024.

Average loans increased $6.1 billion, or, 2%, compared to the first quarter of 2025, driven by growth in commercial and industrial loans, reflecting strong new production and increased utilization of loan commitments, partially offset by a decline in commercial real estate loans. Compared to the first six months of 2024, average loans were stable. Average loans represented 64% of average interest-earning assets for the second quarter of 2025, compared to 63% for the first quarter of 2025, and 63% for both year-to-date periods.

Average interest-earning deposits with banks for the second quarter of 2025 decreased $3.0 billion, or 9%, compared to the first quarter of 2025, primarily driven by loan growth. Compared to the first six months of 2024, average interest-earning deposits with banks decreased $11.5 billion, or 26%, primarily due to lower borrowed funds outstanding.

Average interest-bearing deposits for the second quarter of 2025 were stable compared to the first quarter of 2025. Compared to the first six months of 2024 average interest-bearing deposits increased $7.9 billion, or 2%, as higher commercial deposits were partially offset by lower brokered time deposits. In total, average interest-bearing deposits represented 83% of average interest-bearing liabilities for the second quarter of 2025, compared to 84% for the first quarter of 2025, and 84% for the first six months of 2025 compared to 81% for the first six months of 2024.

Average borrowed funds increased $0.8 billion, or 1%, compared to the first quarter of 2025, and included higher senior debt outstanding. Average borrowed funds decreased $11.6 billion, or 15%, in the year-to-date comparison, primarily driven by lower FHLB advances, partially offset by higher senior debt outstanding.

Further details regarding average loans and deposits are included in the Business Segments Review section of this Financial Review.