PNC Financial Services : 1Q26 Basel III Pillar 3 Disclosures

Published: 2026-05-13 11:56:19 ET PNC

Published on 05/13/2026 at 11:56 am EDT

Pillar 3 Disclosure

Description

Pillar 3 Report

First Quarter 2026 Form 10-Q

2025

Form 10-K

Introduction

Forward-Looking Statements

Basis of Consolidation

Basel III Overview

2-5, 68, 164

Capital

Summary of Capital

29-30, 132, 164-165

Restrictions on Transfer of Funds or Total Capital

164

Capital Adequacy

Capital Ratios

Table 1: Capital Ratios

Table 2: Standardized Risk-Weighted Assets

Supplementary Leverage Ratio

Table 3: Supplementary Leverage Ratio

32, 36

Credit Risk

Credit Risk Management

Summary of Credit Exposures

8, 9, 19-25, 36, 53, 82

39, 41, 54-58, 74,

76-77, 106, 109,

151

Table 4: Loan Exposures by Remaining Contractual Maturity

Credit Risk Mitigation

Counterparty Credit

151

Risk

Counterparty Credit Risk Mitigation

Collateral

151

Table 5: Counterparty Credit Risk Exposures

Securitization

Summary of Accounting Policies for Securitization Activities

99, 121, 124

Risk Management

53, 56

106, 109, 151

Table 6: Securitization Exposures by Underlying Asset Type

Regulatory Treatment of Securitizations

Table 7: Capital Requirements of Securitization Exposures by Risk-Weighting

Equities Not Subject to

71, 91, 137

the Market Risk Rule

Summary of Equity Investment Exposures

34, 66

71, 125

Table 8: Book Value and Fair Value of Equity Exposures Not Subject to Market Risk Rule

Table 9: Capital Requirements of Equity Investment Exposures by Risk-Weighting

Market Risk Capital

Governance of Covered Positions

Valuation Policies, Procedures & Methodologies

20, 135

Value at Risk (VaR) Models

Table 10: VaR-Based Metrics

Back Testing

Model Validation

Stress Testing

Securitization Positions

Interest Rate Risk for Non-Trading Activities

Glossary of Terms

180

Disclosure Matrix

The PNC Financial Services Group, Inc. (PNC) is a financial services holding company headquartered in Pittsburgh, Pennsylvania and one of the largest diversified financial institutions in the United States (U.S.). PNC has businesses engaged in retail banking, corporate and institutional banking and asset management, providing many of our products and services nationally. We are organized around our customers and communities for strong relationships and local delivery of retail and business banking including a full range of lending products; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management. Our retail branch network is located coast-to-coast, and we also have strategic international offices in four countries outside the U.S. At March 31, 2026, our consolidated total assets, total deposits and total shareholders' equity were $603.0 billion, $457.6 billion and $63.6 billion, respectively.

PNC is a bank holding company under the Bank Holding Company Act that has elected to be a financial holding company under the Gramm-Leach-Bliley Act. As a bank holding company, PNC is subject to regulation under the Bank Holding Company Act and to comprehensive consolidated supervision, regulation and examination by its primary regulator, the Federal Reserve. PNC primarily conducts its business through its domestic bank subsidiary, PNC Bank, National Association (PNC Bank), which is a national banking association chartered under the laws of the U.S. PNC Bank is supervised and regulated primarily by the Office of the Comptroller of the Currency (OCC), and with respect to some matters, by the Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB).

On January 5, 2026, PNC acquired FirstBank Holding Company including its banking subsidiary, FirstBank, and our results for the three months ended March 31, 2026 reflect the impact of FirstBank's acquired business operations for the period since the acquisition closed. As of close and prior to purchase accounting adjustments, FirstBank had $26.4 billion of assets, $16.0 billion of loans and

$23.1 billion of deposits.

Conversion of FirstBank customers to PNC Bank is expected to occur mid-June 2026. Until conversion, FirstBank will remain a separate bank subsidiary of PNC.

For additional information on the acquisition of FirstBank, see Note 2 Acquisition Activity in our first quarter 2026 Form 10-Q.

This report (Pillar 3 Report) provides information about PNC's capital structure, risk exposures, risk assessment processes, risk-weighted assets and overall capital adequacy and should be read in conjunction with PNC's Securities and Exchange Commission (SEC) filings, including the Annual Report on Form 10-K for the year ended December 31, 2025 (2025 Form 10-K) and Quarterly Report on Form 10-Q for the period ended March 31, 2026 (first quarter 2026 Form 10-Q). These SEC filings are available at www.pnc.com/secfilings. The Pillar 3 Report and other regulatory disclosures, including PNC Bank's Call Report, are available at www.pnc.com/regulatorydisclosures. FirstBank's Call Report is available at www.ffiec.gov.

This disclosure may contain forward-looking statements, which are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date made. We do not assume any duty and do not undertake any obligation to update forward-looking statements. Actual results or future events could differ, possibly materially, from those anticipated in forward-looking statements, as well as from historical performance. See the Cautionary Statement Regarding Forward-Looking Information in PNC's first quarter 2026 Form 10-Q for more information. Also see all risks and uncertainties disclosed in PNC's SEC filings, including its 2025 Form 10-K, and subsequent reports on Forms 10-Q and 8-K, Proxy Statements on Schedule 14A, and, if applicable, its registration statements under the Securities Act of 1933, as amended, all of which are or will upon filing be accessible on PNC's website at https://www.pnc.com/secfilings and on the SEC's website at https://www.sec.gov.

Our consolidated financial statements include the accounts of the parent company and its subsidiaries, most of which are wholly-owned, certain partnership interests and variable interest entities that are required to be consolidated under accounting principles generally accepted in the United States of America (GAAP). We have eliminated intercompany accounts and transactions. The basis for consolidation for regulatory capital calculations is the same as that used in the presentation of PNC's consolidated financial statements, which is described in further detail in Note 1 Accounting Policies in our 2025 Form 10-K. Consistent with the regulatory capital rules, the minimum capital requirement for our consolidated insurance underwriting subsidiaries under applicable law is deducted from our regulatory capital.

PNC, PNC Bank and FirstBank are subject to the regulatory capital requirements established by the Federal Reserve and the OCC (Basel III capital rules). For additional information regarding regulatory capital requirements, see the Banking Regulation and Supervision section included in Item 1 Business of our 2025 Form 10-K.

The Basel III regulatory capital ratios of PNC, PNC Bank and FirstBank as of March 31, 2026 exceeded the applicable minimum levels. For additional information regarding regulatory capital requirements, see the Banking Regulation and Supervision section included in Item 1 Business, the Liquidity and Capital Management portion of the Risk Management section in Item 7 and Note 19 Regulatory Matters in our 2025 Form 10-K.

The disclosures by PNC in this Pillar 3 Report include those required by the standardized approach in the Basel III capital rules. PNC is the top-tier entity within the PNC organization to which the standardized approach applies. In addition, PNC has more than $1.0 billion in aggregate quarterly average trading assets and trading liabilities, and is subject to the market risk capital rule (the "Market Risk Rule"). This Pillar 3 Report also includes PNC's required disclosures under the Market Risk Rule.

PNC's regulatory capital structure consists of the following capital instruments:

Common Stock

PNC has $5 par value common stock. At March 31, 2026, there were 800 million shares authorized, and 557 million shares issued, of which 155 million shares were held in treasury at cost. Holders of PNC common stock are entitled to receive dividends when declared by PNC's Board of Directors out of funds legally available for this purpose. See the Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in Item 5 of our 2025 Form 10-K for additional information on our common stock.

Preferred Stock

See Note 11 Equity in our 2025 Form 10-K for information on our preferred stock.

Qualifying Subordinated Debt

PNC had $3.3 billion in subordinated debt that qualified as tier 2 capital for the Basel III ratio at March 31, 2026. The interest rates and maturities on our outstanding subordinated debt range from 2.70% to 5.90% and from 2026 to 2041, respectively.

Federal law and regulations place a variety of restrictions on the ability of PNC to transfer funds or total capital among entities within the PNC group. See Note 19 Regulatory Matters in our 2025 Form 10-K for additional information on these restrictions.

PNC's overall capital planning objective is to maintain sufficient capital resources, both in terms of quantity and quality, to cover all of the firm's risks and allow the firm to operate effectively through a range of economic environments. PNC's internal capital adequacy process (CAP) supports this overall objective by taking into account capital stress testing results, capital and liquidity positions and other risk considerations. In addition, PNC's CAP has a sound risk management infrastructure, including but not limited to, the thorough review and consideration of alternative economic scenarios as well as other risks. The Board of Directors, its Risk Committee, and senior management use the firm's CAP results to assess the level of capital that is appropriate for the firm to maintain in light of the range of risks facing the firm, the firm's business strategy, and its risk appetite. Sound capital stress testing practices and methodologies are a key component of PNC's CAP.

In addition to the Basel III capital rules, PNC is subject to the Federal Reserve's capital plan rule, annual capital stress testing requirements and Comprehensive Capital Analysis and Review (CCAR) process, as well as the applicable Dodd-Frank Act capital stress testing requirements implemented by the Federal Reserve and the OCC. As part of the CCAR process, the Federal Reserve undertakes a supervisory assessment of PNC's capital adequacy. This assessment is based on a review of a comprehensive capital plan submitted by PNC to the Federal Reserve that describes the company's planned capital actions during the nine-quarter review period, as well as the results of stress tests conducted by both the company and the Federal Reserve under different hypothetical macroeconomic scenarios, including supervisory severely adverse scenarios provided by the Federal Reserve.

All current period capital ratios are calculated using the regulatory capital rules applicable to PNC during 2026. These Basel III capital ratios may be impacted by any additional regulatory guidance or analysis by PNC as to the application of the rules to PNC.

At March 31, 2026, PNC, PNC Bank and FirstBank were considered "well capitalized" based on applicable U.S. regulatory capital ratios requirements. To qualify as "well capitalized," PNC must have Basel III capital ratios of at least 6% for tier 1 risk-based capital and 10% for total risk-based capital, and PNC Bank and FirstBank must have Basel III capital ratios of at least 6.5% for common equity tier 1 (CET1) risk-based capital, 8% for tier 1 risk-based capital, 10% for total risk-based capital and a leverage ratio of at least 5%. For PNC Bank's capital ratios, see PNC Bank's Call Report for the period ended March 31, 2026. For FirstBank's capital ratios, see FirstBank's Call Report for the period ended March 31, 2026.

The Basel III capital rules also include regulatory capital buffer requirements above the minimum risk-based capital ratio requirements that banking organizations must meet in order to avoid limitations on capital distributions (including dividends and repurchases of any tier 1 capital instrument, including common and qualifying preferred stock) and certain discretionary incentive compensation payments. Currently, PNC, PNC Bank and FirstBank must maintain a CET1 capital ratio of at least 7.0%, a tier 1 capital ratio of at least 8.5%, and a total capital ratio of at least 10.5%. At March 31, 2026, PNC, PNC Bank and FirstBank were above these ratios requirements.

PNC's eligible retained income, defined as the greater of (i) PNC's net income for the four preceding calendar quarters, net of any distributions and associated tax effects not already reflected in net income, and (ii) the average of PNC's net income over the preceding four quarters, at March 31, 2026 was $3.3 billion.

The Federal Reserve issued several proposals to revise and enhance the transparency of its stress testing framework. The Federal Reserve clarified that firms subject to the stress testing framework, including PNC, would remain subject to the current stress capital buffer until October 1, 2027, due to the open rulemakings. For additional information see Item 1 Business in our 2025 Form 10-K.

On March 19, 2026, the U.S. banking agencies (Federal Reserve, OCC and FDIC) issued two proposals to enhance the Basel III capital rules and to adopt the final components of the Basel III international capital standards. One of the proposals 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. The second proposal would revise the Standardized Approach in the current Basel III capital rules, which would apply to all other firms, unless they opt in to use the expanded risk-based approach. Category III and IV firms, and other firms that opt-in to the expanded risk based approach, would be required to include most of the elements of accumulated other comprehensive income (AOCI) in common equity tier 1, subject to a five-year transition period. Category I and II firms are currently subject to including these AOCI elements in regulatory capital, and would continue to be subject to this requirement. Under both proposals, firms would not be required to deduct mortgage servicing assets from regulatory capital. Comments on the proposals are due by June 18, 2026. For additional information, see the Recent Regulatory Developments section of our first quarter 2026 Form 10-Q.

The following table outlines the Basel III ratios for PNC as of March 31, 2026:

In millions

March 31, 2026

Basel III

Consolidated PNC

Regulatory capital

Common equity tier 1 capital

$ 47,686

Tier 1 capital

$ 53,563

Total capital

$ 62,102

Risk-weighted assets

Basel III standardized approach risk-weighted assets

$ 472,981

Average quarterly adjusted total assets

$ 591,156

Risk-based capital and leverage ratios

Common equity tier 1

10.1 %

Tier 1

11.3 %

Total

13.1 %

Leverage

9.1 %

Supplementary Leverage Ratio

7.4 %

See Table 31: Basel III Capital in the Capital Management portion of the Liquidity and Capital Management section of Risk Management in our first quarter 2026 Form 10-Q for additional information on the elements of, and adjustments and deductions to, our consolidated regulatory capital.

The following table outlines PNC's standardized approach risk-weighted assets as of March 31, 2026 using the categorization based on the standardized definitions:

In millions

March 31, 2026

On Balance Sheet

Exposures to sovereign entities (a)

$ 4

Exposures to depository institutions and foreign banks

815

Exposures to public sector entities

4,677

Corporate exposures

232,881

Residential mortgage exposures

45,969

High volatility commercial real estate

691

Past due loans

2,418

Other assets

40,942

Securitization exposures

14,080

Equity exposures

10,940

Off Balance Sheet and Market Risk

Off balance sheet commitments, maturity less than one year

7,728

Off balance sheet commitments, maturity more than one year

86,209

Derivatives

3,031

Securitization exposures

5,394

Letters of credit and other

13,024

Market Risk

4,178

Excess allowance for credit losses (b)

Total Standardized Risk-Weighted Assets

$ 472,981

Exposures to, and portions of exposures that are directly and unconditionally guaranteed by, the U.S. government, its agencies and the Federal Reserve receive 0% risk weight.

Any allowance in tier 2 capital that exceeds 1.25% of Credit Risk risk-weighted assets must be deducted from risk-weighted assets.

SLR is defined as Basel III tier 1 capital divided by supplementary leverage exposure. Unlike the traditional leverage ratio, the denominator of the SLR takes into account certain off-balance sheet items, including loan commitments and potential future exposure under derivative contracts. Under the Basel III capital rule, Category III firms (such as PNC and PNC Bank) are subject to minimum SLR requirements.

The following table represents the components of PNC's SLR as of March 31, 2026.

In millions

March 31, 2026

Tier 1 Capital

$ 53,563

Total Consolidated Assets (a)

$ 601,462

Adjustment for derivative transactions

1,660

Adjustment for repo-style transactions

164

Adjustment for off-balance sheet exposures

144,529

Other adjustments (b)

(19,162)

Total Supplementary Leverage Exposure

$ 728,653

Supplementary Leverage Ratio 7.4 %

Total average assets for the three months ended March 31, 2026, as reported in the Average Consolidated Balance Sheet and Net Interest Analysis table of our first quarter 2026 Form 10-Q.

Includes adjustments to tier 1 capital, adjustments for frequency calculations, and adjustments for deductions of qualifying central bank deposits for custodial banking organizations.

‌For additional information on the Supplementary Leverage Ratio, refer to Schedule A "Advanced Approaches Regulatory Capital" of our March 31, 2026 Regulatory Capital Reporting for Institutions Subject to the Advanced Capital Adequacy Framework - FFIEC 101.

Credit risk represents the possibility that a customer, counterparty or issuer may not perform in accordance with the contractual terms of their loan, extension of credit or other financial obligation with PNC. Credit risk is inherent in the financial services business and results from extending credit to customers, purchasing securities and entering into financial derivative transactions and certain guarantee contracts. Credit risk is one of our most significant risks. Our processes for managing credit risk are designed to be embedded in our risk culture and in our decision-making processes using a systematic approach whereby credit risks and related exposures are identified and assessed, managed through specific policies and processes, measured and evaluated against our risk appetite and credit concentration limits, and reported, along with specific mitigation activities, to management and the Board of Directors through our governance structure. Our most significant concentration of credit risk is in our loan portfolio.

Credit risk management is integrated into the overall enterprise risk management governance model. The committees responsible for conducting specific oversight, monitoring and reporting of credit risk management activities are described in further detail within the Risk Management section included in our 2025 Form 10-K. PNC's overall credit process includes comprehensive credit policies, judgmental or statistical credit underwriting, frequent and detailed risk measurement and modeling, extensive credit training programs, and an ongoing credit risk review and/or audit process. PNC management desires to construct and maintain a loan portfolio that will allow it to meet its strategic return goals while remaining within our risk appetite, as described further in the Risk Management section included in our 2025 Form 10-K. A component of our credit risk management framework is our credit concentration process, by which we maintain limits and monitor credit exposure by industry, geography, property, product type and customer. Loan participations with third parties, and loan sales and syndications, are used to manage risk concentrations.

In addition to credit policies and procedures, PNC uses established guidelines for delinquent and nonperforming loans, acceptable levels of industry and total borrower exposure, and other relevant credit measures to monitor risk. These guidelines are established by Credit Risk Management at the corporate, business and segment levels with the goal of remaining within a desired level of risk within PNC's risk appetite. The established portfolio limits focus on specific pools or characteristics of risk and are designed to ensure that we become aware of portfolio trends and help to enforce the desired construct of the loan portfolio. We may employ portfolio diversification and risk mitigation techniques to counter any undesirable risk pool trends or concentrations. Please refer to the Credit Risk Management section in our first quarter 2026 Form 10-Q and 2025 Form 10-K for the metrics that we use to monitor and manage credit risk.

Credit risk management actions undertaken across the enterprise include continual refinement of underwriting standards, efforts to reduce credit exposure where appropriate, and regular credit risk monitoring and management activities. To further mitigate credit risk, we may periodically reduce or exit certain lending areas. Where we have chosen not to retain the credit risk, it is either because it did not fit within the desired risk appetite, and/or because compensation for such risk is not adequate.

PNC's major types of credit risk exposures consist of the following, all of which are presented in accordance with GAAP:

Loans

PNC had $360.9 billion in loans at March 31, 2026. See the Loans section of the Consolidated Balance Sheet Review in Item 7 and Note 3 Loans and Related Allowance for Credit Losses of our 2025 Form 10-K for quantitative information on our loans.

Credit concentration limits have been established to avoid excessive credit concentrations in certain risk pools that, in the event of increased credit losses, could affect portfolio optimization in terms of capital preservation. Credit concentrations arise when otherwise unrelated loans are linked by a common characteristic (such as aggregate customer exposure, industry, product, property or geography).

See Table 16 Commercial and Industrial Loans by Industry in the Credit Risk Management section of our first quarter 2026 Form 10-Q for the distribution of commercial loans by industry. See Table 17 Commercial Real Estate Loans by Geography and Property Type, Table 18 Residential Real Estate Loan Statistics and Table 19 Home Equity Loan Statistics in the Credit Risk Management section of our first quarter 2026 Form 10-Q for loans by geographic market, property type and lien type.

The following table presents our commercial and consumer loan portfolios by remaining contractual maturity:

In millions

March 31, 2026

After 1 Year Through 5

1 Year or Less Years Greater Than 5 Years Total

Commercial loans

$ 68,696 $ 162,587 $ 24,677 $ 255,960

Consumer loans

17,314 23,299 64,350 104,963

Total

$ 86,010 $ 185,886 $ 89,027 $ 360,923

The methodologies used to estimate our allowance for loan and lease losses and PNC's policies for: (i) determining past due or delinquency status, (ii) placing loans on nonaccrual, (iii) returning loans to accrual status, and (iv) charging off uncollectible amounts are described in detail in the Credit Risk Management and Critical Accounting Estimates and Judgments sections in Item 7, as well as Note 1 Accounting Policies in our 2025 Form 10-K.

Securities

PNC had $143.1 billion in investment securities at March 31, 2026. See the Investment Securities section within the Consolidated Balance Sheet Review and Note 3 Investment Securities in our first quarter 2026 Form 10-Q for further information on investment securities, including the remaining contractual maturity on our debt securities.

Cash

PNC had $26.1 billion in interest-earning deposits with banks and $5.6 billion in cash and due from banks at March 31, 2026. See the Consolidated Balance Sheet Review included in our first quarter 2026 Form 10-Q for further information on interest-earning deposits with banks.

Derivatives

PNC had $3.1 billion in gross fair value of derivatives in an asset position and $4.0 billion in gross fair value of derivatives in a liability position at March 31, 2026. See Note 13 Financial Derivatives in our first quarter 2026 Form 10-Q for further quantitative and qualitative information on derivatives.

See the Average Consolidated Balance Sheet and Net Interest Analysis within our first quarter 2026 Form 10-Q for average balances of our credit risk exposures.

PNC uses various strategies to mitigate credit risk in its portfolios, including: establishing credit risk appetite measures and limits that define acceptable levels of total borrower exposure, and transferring loans to government agencies in securitization transactions. As described within the Counterparty Credit Risk section of this Pillar 3 Report, we may also obtain collateral from counterparties to manage our overall credit risk. In addition, guarantors can serve as a secondary source of repayment. The primary types of guarantors mitigating credit risk are: individuals, business entities, and the U.S. Government. Under the standardized approach, PNC can recognize a credit risk mitigation benefit for certain third-party guarantees. As of March 31, 2026, the reduction to risk-weighted assets as a result of our qualifying third-party guarantees was approximately $1.7 billion.

Counterparty credit exposure arises from the risk that a counterparty is unable to meet its payment obligations to PNC under certain financial contracts. PNC aggregates a counterparty's exposures for all transactions involving derivatives and repurchase agreements.

A primary responsibility of credit risk management is the approval of new counterparty trading relationships and the subsequent ongoing review of the creditworthiness of the counterparty. The credit risk associated with derivatives executed with customers is essentially the same as that involved in extending loans and is subject to normal credit policies. See the Credit Risk section within this Pillar 3 Report for further discussion of our credit policies. In addition to using master netting agreements and other collateral agreements to reduce credit risk associated with derivative instruments, we also seek to manage credit risk by evaluating credit ratings of counterparties and by using internal credit analysis, limits, and monitoring procedures. Credit risk is included in the determination of the estimated net fair value of our derivatives.

Credit limits are typically set on a loan equivalent exposure basis and credit exposures and limits are monitored daily.

For further information on counterparty credit risk, including PNC's use of derivatives, counterparty and transaction rating, credit approval process and provisioning and for the notional amount of our derivatives, see Note 13 Financial Derivatives in our first quarter 2026 Form 10-Q.

Credit risk from derivatives is mitigated, where possible, through master netting agreements whereby derivative assets and liabilities with the same counterparty can be offset. The International Swaps and Derivatives Association, Inc. (ISDA) Master Agreement is PNC's preferred agreement for documenting over-the-counter (OTC) derivatives. It provides the contractual framework within which dealing activities across a full range of OTC products are conducted and contractually binds both parties to apply close-out netting across all outstanding transactions covered by such master netting agreement if either party defaults or other termination events occur. There are certain instances in which we use customized agreements in lieu of an ISDA Master Agreement; however, these agreements include closeout netting language to protect PNC in a similar manner as the ISDA Master Agreement.

Repurchase and resale agreements are typically entered into with counterparties under industry standard master netting agreements which provide for the right to offset amounts owed to one another with respect to multiple repurchase and resale agreements under such master netting agreement (referred to as netting arrangements) and liquidate the purchased or borrowed securities in the event of counterparty default. In order for an arrangement to be eligible for netting under GAAP, we must obtain the requisite assurance that the offsetting rights included in the master netting agreement would be legally enforceable in the event of bankruptcy, insolvency, or a similar proceeding of such third party. Enforceability is evidenced by obtaining a legal opinion that supports, with sufficient confidence, the enforceability of the master netting agreement in bankruptcy.

PNC may obtain collateral against derivative assets, depending on the creditworthiness of the counterparty and/or nature of the transaction. All marketable transactions and associated collateral positions are independently revalued and monitored daily. Collateral thresholds vary by counterparty. The majority of collateral held as credit risk mitigation is either cash, U.S. Treasury, or Government agency securities.

With respect to repurchase and resale agreements, PNC takes possession of securities purchased under agreements to resell. We monitor the market value of securities to be repurchased and resold and additional collateral may be obtained where considered appropriate to protect against credit exposure.

Certain derivative agreements contain various credit-risk-related contingent provisions, such as those that require PNC's debt to maintain a specified credit rating from one or more of the major credit rating agencies. For additional information on the potential

impact of an investment rating downgrade, see the Offsetting and Counterparty Credit Risk and Credit-Risk Contingent Features sections of Note 13 Financial Derivatives in our first quarter 2026 Form 10-Q.

Further detail regarding the net unsecured credit exposure on our derivatives and other contracts is presented in the following table:

March 31, 2026

In millions

Gross Positive Fair Value

Collateral Held

Net Unsecured Credit Exposure

Credit Equivalent Amount

OTC derivatives

$ 9,417

$ 3,783

$ 4,208

$ 4,036

Repo-style transactions

$ 1,978

$ 1,795

$ 181

$ 207

The Basel III rules define a securitization exposure as an exposure that meets the following criteria:

All or a portion of the credit risk of one or more underlying exposures is transferred to one or more third parties;

The credit risk associated with the underlying exposures has been separated into at least two tranches reflecting different levels of seniority;

Performance of the securitization depends on performance of the underlying exposures;

All or substantially all of the underlying exposures are financial exposures;

The underlying exposures are not owned by an operating company; and

The underlying exposures are not owned by a small business investment company or related to a community development investment.

Generally, PNC does not securitize its own assets but does have multiple asset types meeting the definition of securitization exposure, which are primarily secured lending and investment positions. See the Credit Risk section within this report for further discussion of our credit policies. The following activities meet the regulatory definition of a securitization:

Investment securities that meet the definition of a securitization exposure including asset-backed securities, commercial and residential mortgage-backed securities, and collateralized loan obligations;

Secured lending to our clients consisting of collateralized loan obligations and securitizations of trade receivables, auto loan and lease assets, equipment leases, fleet leases, and capital commitments;

Servicing advances to transactions including commercial and residential mortgage-backed securities;

Subscription line facilities to real estate investment funds secured by the capital commitments of the funds' investors; and

OTC derivatives to special purpose entities.

For a description of the roles that PNC plays in the securitization process, refer to Note 4 Loan Sale and Servicing Activities and Variable Interest Entities in our 2025 Form 10-K.

A summary of PNC's accounting policies for securitization activities is outlined in Note 1 Accounting Policies and in Note 4 Loan Sale and Servicing Activities and Variable Interest Entities in our 2025 Form 10-K.

PNC's risk department monitors the identification and categorization of securitization exposures. Each quarter, senior management of each line of business with securitization exposures approves a summary of securitization exposures attributable to their business, including the associated capital requirements and the status of associated controls.

For further information on how we use derivatives to mitigate risk associated with changes in the fair value of assets, see

Note 15 Financial Derivatives in our 2025 Form 10-K. Information on how we monitor and evaluate changes in credit can be found in Note 3 Investment Securities and Note 4 Loans and Related Allowance for Credit Losses in our first quarter 2026 Form 10-Q.

Disclaimer

The PNC Financial Services Group Inc. published this content on May 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 13, 2026 at 15:55 UTC.