PNC FINANCIAL SERVICES GROUP, INC.

Basel Capital Proposals

On March 19, 2026, the federal banking agencies issued proposals to enhance and modernize Basel III capital rules and to adopt the final components of the Basel III international capital standards. The agencies first issued a so-called Basel III Endgame proposal in July of 2023, which would have significantly revised and increased the capital requirements for large banking organizations, including PNC and PNC Bank. The agencies did not finalize that proposal given negative feedback from the public. The new 2026 proposals are designed to adopt the final Basel III international standards and to streamline and enhance the risk-sensitivity of the capital rules. The first proposal would revise the capital requirements for the largest firms, Category I and II, and require them to calculate their risk-based capital ratios using an expanded risk‑based approach. Other firms, including PNC, are allowed to opt in to use this approach. Under this approach, firms would be subject to a stricter definition of regulatory capital and required to include most of the elements of AOCI in CET1 capital. Firms would not be required to deduct mortgage servicing assets from regulatory capital. Under the expanded risk-based approach, the risk-weighted assets would comprise credit risk, operational risk, and, if applicable, market risk and credit valuation adjustment requirements. The second proposal would revise the standardized approach in the current Basel III capital rules, which would apply to all firms (except for Category I and II firms), unless they opt in to use the expanded risk-based approach. Category III and IV firms would be required to include most of the elements of AOCI in CET1 capital, subject to a five-year transition period. Similar to the first proposal, firms would not be required to deduct mortgage servicing assets from regulatory capital. Under the standardized approach, the risk-weighted assets would comprise credit risk, and, if applicable, market risk and credit valuation adjustment requirements. The proposal would also revise certain definitions in the current capital rules and introduce greater granularity for certain asset classes, including retail and residential mortgage exposures. The comment period on both proposals is open until June 18, 2026.

Resolution and Recovery Planning

On April 1, 2026, as part of the agency’s ongoing effort to identify and eliminate unnecessary regulatory burden, the OCC published a final rule that rescinds its recovery planning guidelines that apply to large insured national banks, including PNC Bank. The final rule is effective May 1, 2026.