Fair Value

6 Months Ended

Jun. 30, 2013

Fair Value [Abstract]

Fair Value

Note 9 Fair Value

Fair Value Measurement

GAAP establishes a fair value reporting hierarchy to maximize the use of observable inputs when measuring fair value. There are three levels of inputs used to measure fair value. For more information regarding the fair value hierarchy and the valuation methodologies for assets and liabilities measured at fair value on a recurring basis, see Note 9 Fair Value in our Notes To Consolidated Financial Statements under Item 8 of our 2012 Form 10-K.

Valuation Processes

We have various processes and controls in place to help ensure that fair value is reasonably estimated. Any models used to determine fair values or to validate dealer quotes are subject to review and independent testing as part of our model validation and internal control testing processes. Our Model Risk Management Committee reviews significant models at least annually. In addition, we have teams independent of the tradersthatverify marks and assumptions used for valuations at each period end.

Assets and liabilities measured at fair value, by their nature, result in a higher degree of financial statement volatility. Assets and liabilities classified within Level 3 inherently require the use of various assumptions, estimates and judgments when measuring their fair value. As observable market activity is commonly not available to use when estimating the fair value of Level 3 assets and liabilities, we must estimate fair value using various modeling techniques. These techniques include the use of a variety of inputs/assumptions including credit quality, liquidity, interest rates or other relevant inputs across the entire population of our Level 3 assets and liabilities. Changes in the significant underlying factors or assumptions (either an increase or a decrease) in any of these areas underlying our estimates may result in a significant increase/decrease in the Level 3 fair value measurement of a particular asset and/or liability from period to period.

Financial Instruments Accounted For at Fair Value on a Recurring Basis

A cross-functional team comprised of representatives from Asset & Liability Management, Finance, and Market Risk Management oversees the governance of the processes and methodologies used to estimate the fair value of securities and the price validation testing that is performed. This management team reviews pricing sources and trends and the results of validation testing.

For more information regarding the fair value of financial instruments accounted for at fair value on a recurring basis, see Note 9 Fair Value in our Notes To Consolidated Financial Statements under Item 8 of our 2012 Form 10-K.

The following disclosures for financial instruments accounted for at fair value have been updated during the first six months of 2013:

Loans

Loans accounted for at fair value consist primarily of residential mortgage loans. These loans are generally valued similarly to residential mortgage loans held for sale and are classified as Level 2. However, similar to residential mortgage loans held for sale, if these loans are repurchased and unsalable, they are classified as Level 3. During the first quarter of 2013, we have elected to account for certain home equity lines of credit at fair value. These loans are classified as Level 3. This category also includes repurchased brokered home equity loans. These loans are repurchased due to a breach of representations or warranties in the loan sales agreements and occur typically after the loan is in default. The fair value price is based on bids and market observations of transactions of similar vintage. Because transaction details regarding the credit and underwriting quality are often unavailable, unobservable bid information from brokers and investors is heavily relied upon. Accordingly, based on the significance of unobservable inputs, these loans are classified as Level 3. The fair value of these loans is included in the Loans – Home equity line item in Table 91: Fair Value Measurement - Recurring Quantitative Information in this Note 9 for both June 30, 2013 and December 31, 2012.A significant input to the valuation includes a credit and liquidity discount that is deemed representative of current market conditions. Significant increases (decreases) in this assumption would result in a significantly lower (higher) fair value measurement.

Other Borrowed Funds

During the first quarter of 2013, we have elected to account for certain other borrowed funds consisting primarily of secured debt at fair value. These other borrowed funds are classified as Level 3. Significant unobservable inputs for these borrowed funds include credit and liquidity discount and spread over the benchmark curve. Significant increases (decreases) in these assumptions would result in significantly lower (higher) fair value measurement.

Financial Derivatives

In connection with the sales of a portion of our Visa Class B common shares in the second quarter of 2013 and the second half of 2012, we entered into swap agreements with the purchaser of the shares to account for future changes in the value of the Class B common shares resulting from changes in the settlement of certain specified litigation and its effect on the conversion rate of Class B common shares into Visa Class A common shares and to make payments calculated by reference to the market price of the Class A common shares and a fixed rate of interest. The swaps are classified as Level 3 instruments and the fair valuesof the liability positions totaled $61 million at June 30, 2013 and $43 million at December 31, 2012, respectively.

Assets and liabilities measured at fair value on a recurring basis, including instruments for which PNC has elected the fair value option, follow.
Table 89: Fair Value Measurements - Summary
					June 30, 2013								December 31, 2012
											Total								Total
In millions				Level 1		Level 2		Level 3		Fair Value			Level 1	Level 2		Level 3		Fair Value
Assets
	Securities available for sale
		U.S. Treasury and government agencies		$	1,480	$	730			$	2,210	$	2,269	$	844			$	3,113
		Residential mortgage-backed
			Agency				24,248				24,248				26,784				26,784
			Non-agency				141	$	5,711		5,852					$	6,107		6,107
		Commercial mortgage-backed
			Agency				595				595				633				633
			Non-agency				3,679				3,679				3,264				3,264
		Asset-backed					5,362		672		6,034				4,945		708		5,653
		State and municipal					1,886		331		2,217				1,948		339		2,287
		Other debt					2,719		48		2,767				2,796		48		2,844
			Total debt securities		1,480		39,360		6,762		47,602		2,269		41,214		7,202		50,685
		Corporate stocks and other			281		16				297		351		16				367
			Total securities available for sale		1,761		39,376		6,762		47,899		2,620		41,230		7,202		51,052
	Financial derivatives (a) (b)
		Interest rate contracts			27		6,248		50		6,325		5		8,326		101		8,432
		Other contracts					259		1		260				131		5		136
			Total financial derivatives		27		6,507		51		6,585		5		8,457		106		8,568
	Residential mortgage loans held for sale (c)						2,216		30		2,246				2,069		27		2,096
	Trading securities (d)
		Debt (e) (f)			1,277		781		32		2,090		1,062		951		32		2,045
		Equity			19						19		42		9				51
			Total trading securities		1,296		781		32		2,109		1,104		960		32		2,096
	Trading loans						21				21				76				76
	Residential mortgage servicing rights (g)								975		975						650		650
	Commercial mortgage loans held for sale (c)								635		635						772		772
	Equity investments
		Direct investments							1,115		1,115						1,171		1,171
		Indirect investments (h)							623		623						642		642
			Total equity investments						1,738		1,738						1,813		1,813
	Customer resale agreements (i)						210				210				256				256
	Loans (j)						500		311		811				110		134		244
	Other assets
		BlackRock Series C Preferred Stock (k)							270		270						243		243
		Other			330		189		8		527		283		194		9		486
			Total other assets		330		189		278		797		283		194		252		729
		Total assets		$	3,414	$	49,800	$	10,812	$	64,026	$	4,012	$	53,352	$	10,988	$	68,352
Liabilities
	Financial derivatives (b) (l)
		Interest rate contracts		$	12	$	4,771	$	48	$	4,831	$	1	$	6,105	$	12	$	6,118
		BlackRock LTIP							270		270						243		243
		Other contracts					164		65		229				128		121		249
			Total financial derivatives		12		4,935		383		5,330		1		6,233		376		6,610
	Trading securities sold short (m)
		Debt			929		3				932		731		10				741
			Total trading securities sold short		929		3				932		731		10				741
	Other borrowed funds								195		195
	Other liabilities														5				5
		Total liabilities		$	941	$	4,938	$	578	$	6,457	$	732	$	6,248	$	376	$	7,356
(a)		Included in Other assets on our Consolidated Balance Sheet.
(b)		Amounts at June 30, 2013 and December 31, 2012 are presented gross and are not reduced by the impact of legally enforceable master netting agreements that allow PNC to net positive and negative positions and cash collateral held or placed with the same counterparty. The net asset amounts were $2.2 billion at June 30, 2013 compared with $2.4 billion at December 31, 2012 and the net liability amounts were $1.1 billion and $.6 billion, respectively.
(c)		Included in Loans held for sale on our Consolidated Balance Sheet. PNC has elected the fair value option for certain commercial and residential mortgage loans held for sale.
(d)		Fair value includes net unrealized losses of $13 million at June 30, 2013 compared with net unrealized gains of $59 million at December 31, 2012.
(e)		Approximately 23% of these securities are residential mortgage-backed securities and 61% are U.S. Treasury and government agencies securities at June 30, 2013. Comparable amounts at December 31, 2012 were 25% and 52%, respectively.
(f)		At both June 30, 2013 and December 31, 2012, the balance of residential mortgage-backed agency securities with embedded derivatives carried in Trading securities was zero.
(g)		Included in Other intangible assets on our Consolidated Balance Sheet.
(h)		The indirect equity funds are not redeemable, but PNC receives distributions over the life of the partnership from liquidation of the underlying investments by the investee, which we expect to occur over the next twelve years. The amount of unfunded contractual commitments related to indirect equity investments was $134 million and related to direct equity investments was $37 million as of June 30, 2013, respectively.
(i)		Included in Federal funds sold and resale agreements on our Consolidated Balance Sheet. PNC has elected the fair value option for these items.
(j)		Included in Loans on our Consolidated Balance Sheet.
(k)		PNC has elected the fair value option for these shares.
(l)		Included in Other liabilities on our Consolidated Balance Sheet.
(m)		Included in Other borrowed funds on our Consolidated Balance Sheet.

Reconciliations of assets and liabilities measured at fair value on a recurring basis using Level 3 inputs for the three months and
six months ended June 30, 2013 and 2012 follow.
Table 90: Reconciliation of Level 3 Assets and Liabilities
Three Months Ended June 30, 2013
																											Unrealized
																											gains (losses)
								Total realized / unrealized																			on assets and
							gains or losses for the period (a)																				liabilities held on
											Included																Consolidated
Level 3 Instruments					Fair Value						in Other										Transfers		Transfers		Fair Value		Balance Sheet
	Only				March 31,			Included in			comprehensive										into		out of		June 30,		at June 30,
In millions					2013			Earnings			income		Purchases		Sales		Issuances		Settlements		Level 3 (b)		Level 3 (b)		2013		2013 (c)
Assets
	Securities available for
		sale
		Residential mortgage-
			backed non-agency		$	6,038		$	47		$	(100)							$	(274)					$	5,711	$	(3)
		Commercial mortgage-
			backed non-agency						2											(2)
		Asset-backed				701			1			4								(34)						672		(1)
		State and municipal				330						(2)	$	4						(1)						331
		Other debt				49								1	$	(2)										48
			Total securities
				available for sale		7,118			50			(98)		5		(2)				(311)						6,762		(4)
	Financial derivatives					93			64					1						(105)			$	(2)		51		50
	Residential mortgage
		loans held for sale				44								21		(1)				1	$	3		(38)		30
	Trading securities - Debt					32																				32
	Residential mortgage
		servicing rights				779			208								$	43		(55)						975		208
	Commercial mortgage
		loans held for sale				769			(13)							(100)				(21)						635		(14)
	Equity investments
		Direct investments				1,193			15					49		(142)										1,115
		Indirect investments				627			20					6		(30)										623		20
			Total equity
				investments		1,820			35					55		(172)										1,738		20
	Loans					272			16											(10)		45		(12)		311		12
	Other assets
		BlackRock Series C
			Preferred Stock			270																				270
		Other				9						(1)														8
			Total other assets			279						(1)														278
				Total assets	$	11,206		$	360	(e)	$	(99)	$	82	$	(275)	$	43	$	(501)	$	48	$	(52)	$	10,812	$	272	(f)
Liabilities
	Financial derivatives (d)					400			84							1				(102)						383		16
	Other borrowed funds					130			3											62						195
				Total liabilities	$	530		$	87	(e)					$	1			$	(40)					$	578	$	16	(f)

Three Months Ended June 30, 2012
																									Unrealized
																									gains (losses)
								Total realized / unrealized																	on assets and
							gains or losses for the period (a)																		liabilities held on
											Included														Consolidated
Level 3 Instruments					Fair Value						in Other										Transfers		Fair Value		Balance Sheet
	Only				March 31,			Included in			comprehensive										out of		June 30,		at June 30,
In millions					2012			Earnings			income		Purchases		Sales		Issuances		Settlements		Level 3 (b)		2012		2012 (c)
Assets
	Securities available for
		sale
		Residential mortgage-
			backed non-agency		$	6,121		$	20		$	(34)	$	47					$	(267)			$	5,887	$	(31)
		Commercial mortgage-
			backed non-agency						1											(1)
		Asset-backed				752			(1)			17			$	(47)				(33)				688		(3)
		State and municipal				336			1															337
		Other debt				55								3		(3)								55
			Total securities
				available for sale		7,264			21			(17)		50		(50)				(301)				6,967		(34)
	Financial derivatives					84			115					1						(82)	$	(1)		117		123
	Trading securities - Debt					39			2															41		1
	Residential mortgage
		servicing rights				724			(126)								$	24		(41)				581		(124)
	Commercial mortgage
		loans held for sale				840			4											(7)				837		(2)
	Equity investments
		Direct investments				865			20					116		(44)								957		20
		Indirect investments				657			37					19		(36)								677		35
			Total equity
				investments		1,522			57					135		(80)								1,634		55
	Loans					6								1										7
	Other assets
		BlackRock Series C
			Preferred Stock			241			(41)															200		(41)
		Other				7																		7
			Total other assets			248			(41)															207		(41)
				Total assets	$	10,727		$	32	(e)	$	(17)	$	187	$	(130)	$	24	$	(431)	$	(1)	$	10,391	$	(22)	(f)
				Total liabilities (d)	$	334		$	(56)	(e)					$	1			$	10			$	289	$	(40)	(f)

Six Months Ended June 30, 2013
																												Unrealized
																												gains (losses)
								Total realized / unrealized																				on assets and
								gains or losses for the period (a)																				liabilities held on
												Included																Consolidated
Level 3 Instruments					Fair Value							in Other										Transfers		Transfers		Fair Value		Balance Sheet
	Only				Dec. 31,				Included in			comprehensive										into		out of		June 30,		at June 30,
In millions					2012				Earnings			income		Purchases		Sales		Issuances		Settlements		Level 3 (b)		Level 3 (b)		2013		2013 (c)
Assets
	Securities available for
		sale
		Residential mortgage-
			backed non-agency			$	6,107		$	90		$	39							$	(525)					$	5,711	$	(10)
		Commercial mortgage-
			backed non-agency							3											(3)
		Asset-backed					708			4			29								(69)						672		(4)
		State and municipal					339			1				$	4						(13)						331
		Other debt					48								2	$	(2)										48
			Total securities
				available for sale			7,202			98			68		6		(2)				(610)						6,762		(14)
	Financial derivatives						106			153					2						(208)			$	(2)		51		113
	Residential mortgage
		loans held for sale					27			1					49		(1)				1	$	6		(53)		30		1
	Trading securities - Debt						32																				32
	Residential mortgage
		servicing rights					650			286					64			$	80		(105)						975		279
	Commercial mortgage
		loans held for sale					772			(12)							(102)				(23)						635		(13)
	Equity investments
		Direct investments					1,171			34					63		(153)										1,115		14
		Indirect investments					642			33					10		(62)										623		33
			Total equity
				investments			1,813			67					73		(215)										1,738		47
	Loans						134			21											115		57		(16)		311		17
	Other assets
		BlackRock Series C
			Preferred Stock				243			60											(33)						270		60
		Other					9						(1)														8
			Total other assets				252			60			(1)								(33)						278		60
				Total assets		$	10,988		$	674	(e)	$	67	$	194	$	(320)	$	80	$	(863)	$	63	$	(71)	$	10,812	$	490	(f)
Liabilities
	Financial derivatives (d)						376			160							1				(154)						383		77
	Other borrowed funds									3											192						195
				Total liabilities		$	376		$	163	(e)					$	1			$	38					$	578	$	77	(f)

Six Months Ended June 30, 2012
																											Unrealized
																											gains (losses)
								Total realized / unrealized																			on assets and
							gains or losses for the period (a)																				liabilities held on
											Included																Consolidated
Level 3 Instruments					Fair Value						in Other										Transfers		Transfers		Fair Value		Balance Sheet
	Only				Dec. 31,			Included in			comprehensive										into		out of		June 30,		at June 30,
In millions					2011			Earnings			income		Purchases		Sales		Issuances		Settlements		Level 3 (b)		Level 3 (b)		2012		2012 (c)
Assets
	Securities available for
		sale
		Residential mortgage-
			backed non-agency		$	5,557		$	11		$	486	$	47	$	(163)			$	(509)	$	458			$	5,887	$	(63)
		Commercial mortgage
			backed non-agency						2											(2)
		Asset-backed				787			(7)			59				(87)				(64)						688		(8)
		State and municipal				336						3								(2)						337
		Other debt				49			(1)			1		9		(3)										55		(1)
			Total securities
				available for sale		6,729			5			549		56		(253)				(577)		458				6,967		(72)
	Financial derivatives					67			195					4						(150)		3	$	(2)		117		176
	Trading securities - Debt					39			3											(1)						41		2
	Residential mortgage
		servicing rights				647			(106)					64			$	53		(77)						581		(104)
	Commercial mortgage
		loans held for sale				843			(2)							(4)										837		(4)
	Equity investments
		Direct investments				856			42					159		(100)										957		41
		Indirect investments				648			68					30		(69)										677		65
			Total equity
				investments		1,504			110					189		(169)										1,634		106
	Loans					5								2												7
	Other assets
		BlackRock Series C
			Preferred Stock			210			(10)																	200		(10)
		Other				7																				7
			Total other assets			217			(10)																	207		(10)
				Total assets	$	10,051		$	195	(e)	$	549	$	315	$	(426)	$	53	$	(805)	$	461	$	(2)	$	10,391	$	94	(f)
				Total liabilities (d)	$	308		$	21	(e)					$	1			$	(40)	$	1	$	(2)	$	289	$	(8)	(f)
(a)			Losses for assets are bracketed while losses for liabilities are not.
(b)			PNC's policy is to recognize transfers in and transfers out as of the end of the reporting period.
(c)			The amount of the total gains or losses for the period included in earnings that is attributable to the change in unrealized gains or losses related to those assets and liabilities held at the end of the reporting period.
(d)			Financial derivatives, which include swaps entered into in connection with sales of certain Visa Class B common shares.
(e)			Net gains (realized and unrealized) included in earnings relating to Level 3 assets and liabilities were $273 million for the second quarter of 2013, while for the first six months of 2013 there were $511 million of net gains (realized and unrealized) included in earnings. The comparative amounts included net gains (realized and unrealized) of $88 million for second quarter 2012 and net gains (realized and unrealized) of $174 million for the first six months of 2012. These amounts also included amortization and accretion of $54 million for the second quarter of 2013 and $111 million for the first six months of 2013. The comparative amounts were $54 million for the second quarter of 2012 and $86 million for the first six months of 2012. The amortization and accretion amounts were included in Interest income on the Consolidated Income Statement, and the remaining net gains/(losses) (realized and unrealized) were included in Noninterest income on the Consolidated Income Statement.
(f)			Net unrealized gains relating to those assets and liabilities held at the end of the reporting period were $256 million for the second quarter of 2013, while for the first six months of 2013 there were $413 million of net unrealized gains. The comparative amounts included net unrealized gains of $18 million for the second quarter of 2012 and net unrealized gains of $102 million for the first six months of 2012. These amounts were included in Noninterest income on the Consolidated Income Statement.

An instrument's categorization within the hierarchy is based on the lowest level of input that is significant to the fair value measurement. PNC reviews and updates fair value hierarchy classifications quarterly. Changes from one quarter to the next related to the observability of inputs to a fair value measurement may result in a reclassification (transfer) of assets or liabilities between hierarchy levels. PNC's policy is to recognize transfers in and transfers out as of the end of the reporting period. During the first six months of 2013, there were transfers of residential mortgage loans held for sale and loans from Level 2 to Level 3 of$6 millionand $11 million, respectively, as a result of reduced market activity in the nonperforming residential mortgage sales market which reduced the observability of valuation inputs. Also during2013,there were transfers out of Level 3 residential mortgage loans held for sale and loans of $7 million and $16 million, respectively, primarily due to the transfer of residential mortgage loans held for sale and loans to OREO. In addition, there was approximately $46 million of Level 3 residential mortgage loans held for sale reclassified to Level 3 loans during the first six months of 2013 due to the loans being reclassified from held for sale loans to held in portfolio loans. This amount was included in Transfers out of Level 3 residential mortgages loans held for sale and Transfers into Level 3 loans within Table 90: Reconciliation of Level 3 Assets and Liabilities. In the comparable period of 2012, there were transfers of assets and liabilities from Level 2 to Level 3 of $460millionconsisting of mortgage-backed available forsale securities transferred as a result of a ratings downgrade which reduced the observability of valuation inputs.

Quantitative information about the significant unobservable inputs within Level 3 recurring assets and liabilities follows.
Table 91: Fair Value Measurement - Recurring Quantitative Information
June 30, 2013
Level 3 Instruments Only
Dollars in millions			Fair Value		Valuation Techniques		Unobservable Inputs		Range (Weighted Average)
	Residential mortgage-backed
		non-agency	$	5,711		Priced by a third-party vendor	Constant prepayment rate (CPR)			1.0%-27.0% (5.0%)	(a)
						using a discounted cash flow	Constant default rate (CDR)			0%-22.0% (7.0%)	(a)
						pricing model (a)	Loss Severity			6.0%-100% (51.0%)	(a)
							Spread over the benchmark curve (b)			267bps weighted average	(a)
	Asset-backed			672		Priced by a third-party vendor	Constant prepayment rate (CPR)			1.0%-11.0% (4.0%)	(a)
						using a discounted cash flow	Constant default rate (CDR)			3.0%-19.0% (10.0%)	(a)
						pricing model (a)	Loss Severity			10.0%-100% (73.0%)	(a)
							Spread over the benchmark curve (b)			358bps weighted average	(a)
	State and municipal			130		Discounted cash flow	Spread over the benchmark curve (b)			85bps-240bps (101bps)
				201		Consensus pricing (c)	Credit and Liquidity discount			0%-30.0% (8.0%)
	Other debt			48		Consensus pricing (c)	Credit and Liquidity discount			7.0%-95.0% (86.0%)
	Commercial mortgage loan			37		Discounted cash flow	Spread over the benchmark curve (b)			80bps-500bps (153bps)
		commitments					Embedded servicing value			.8%-3.0% (1.1%)
	Trading securities - Debt			32		Consensus pricing (c)	Credit and Liquidity discount			0%-20.0% (8.3%)
	Residential mortgage loans held
		for sale		30		Consensus pricing (c)	Cumulative default rate			2.6%-100% (6.8%)
							Loss Severity			0%-86.7% (47.9%)
							Gross discount rate			13.0%-14.0% (13.3%)
	Residential mortgage servicing rights			975		Discounted cash flow	Constant prepayment rate (CPR)			3.8%-48.7% (10.1%)
							Spread over the benchmark curve (b)			939bps-1,918bps (1,096bps)
	Commercial mortgage loans held
		for sale		635		Discounted cash flow	Spread over the benchmark curve (b)			460bps-5,160bps (947bps)
	Equity investments - Direct investments			1,115		Multiple of adjusted earnings	Multiple of earnings			4.5x-9.5x (7.1x)
	Equity investments - Indirect (d)			623		Net asset value	Net asset value
	Loans - Residential real estate			178		Consensus pricing (c)	Cumulative default rate			2.6%-100% (85.7%)
							Loss Severity			0%-100% (52.9%)
							Gross discount rate			12.0%
	Loans - Home equity			133		Consensus pricing (c)	Credit and Liquidity discount			37.0%-99.0% (69.0%)
	BlackRock Series C Preferred Stock			270		Consensus pricing (c)	Liquidity discount			20.0%
	BlackRock LTIP			(270)		Consensus pricing (c)	Liquidity discount			20.0%
	Swaps related to sales of certain Visa			(61)		Discounted cash flow	Estimated conversion factor of
		Class B common shares						Class B shares into Class A shares		41.5%
							Estimated growth rate of Visa
								Class A share price		7.6%
	Other borrowed funds (e)			(195)		Consensus pricing (c)	Credit and Liquidity discount			0%-99.0% (43.0%)
							Spread over the benchmark curve (b)			58bps
	Insignificant Level 3 assets, net of
		liabilities (f)		(30)
Total Level 3 assets, net of liabilities (g)			$	10,234

December 31, 2012

Level 3 Instruments Only

Dollars in millions

Fair Value

Valuation Techniques

Unobservable Inputs

Range (Weighted Average)

Residential mortgage-backed

non-agency

$

6,107

Priced by a third-party vendor

Constant prepayment rate (CPR)

1.0%-30.0% (5.0%)

(a)

using a discounted cash flow

Constant default rate (CDR)

0%-24.0% (7.0%)

(a)

pricing model (a)

Loss Severity

10.0%-95.0% (52.0%)

(a)

Spread over the benchmark curve (b)

315bps weighted average

(a)

Asset-backed

708

Priced by a third-party vendor

Constant prepayment rate (CPR)

1.0%-11.0% (3.0%)

(a)

using a discounted cash flow

Constant default rate (CDR)

1.0%-25.0% (9.0%)

(a)

pricing model (a)

Loss Severity

10.0%-100% (70.0%)

(a)

Spread over the benchmark curve (b)

511bps weighted average

(a)

State and municipal

130

Discounted cash flow

Spread over the benchmark curve (b)

100bps-280bps (119bps)

209

Consensus pricing (c)

Credit and Liquidity discount

0%-30.0% (8.0%)

Other debt

48

Consensus pricing (c)

Credit and Liquidity discount

7.0%-95.0% (86.0%)

Residential mortgage loan

commitments

85

Discounted cash flow

Probability of funding

8.5%-99.0% (71.1%)

Embedded servicing value

.5%-1.2% (.9%)

Trading securities - Debt

32

Consensus pricing (c)

Credit and Liquidity discount

8.0%-20.0% (12.0%)

Residential mortgage loans held

27

Consensus pricing (c)

Cumulative default rate

2.6%-100% (76.1%)

for sale

Loss Severity

0%-92.7% (55.8%)

Gross discount rate

14.0%-15.3% (14.9%)

Residential mortgage servicing rights

650

Discounted cash flow

Constant prepayment rate (CPR)

3.9%-57.3% (18.8%)

Spread over the benchmark curve (b)

939bps-1,929bps (1,115bps)

Commercial mortgage loans held

for sale

772

Discounted cash flow

Spread over the benchmark curve (b)

485bps-4,155bps (999bps)

Equity investments - Direct investments

1,171

Multiple of adjusted earnings

Multiple of earnings

4.5x-10.0x (7.1x)

Equity investments - Indirect (d)

642

Net asset value

Net asset value

Loans - Residential real estate

127

Consensus pricing (c)

Cumulative default rate

2.6%-100% (76.3%)

Loss Severity

0%-99.4% (61.1%)

Gross discount rate

12.0%-12.5% (12.2%)

Loans - Home equity

7

Consensus pricing (c)

Credit and Liquidity discount

37.0%-97.0% (65.0%)

BlackRock Series C Preferred Stock

243

Consensus pricing (c)

Liquidity discount

22.5%

BlackRock LTIP

(243)

Consensus pricing (c)

Liquidity discount

22.5%

Other derivative contracts

(72)

Discounted cash flow

Credit and Liquidity discount

37.0%-99.0% (46.0%)

Spread over the benchmark curve (b)

79bps

Swaps related to sales of certain

(43)

Discounted cash flow

Estimated conversion factor of

Visa Class B common shares

Class B shares into Class A shares

41.5%

Estimated growth rate of Visa Class

A share price

12.6%

Insignificant Level 3 assets, net of

liabilities (f)

12

Total Level 3 assets, net of liabilities (g)

$

10,612

(a)

Level 3 residential mortgage-backed non-agency and asset-backed securities with fair values as of June 30, 2013 totaling $5,013 million and $642 million, respectively, were priced by a third-party vendor using a discounted cash flow pricing model, that incorporates consensus pricing, where available. The comparable amounts as of December 31, 2012 were $5,363 million and $677 million, respectively. The significant unobservable inputs for these securities were provided by the third-party vendor and are disclosed in the table. Our procedures to validate the prices provided by the third-party vendor related to these securities are discussed further in the Fair Value Measurement section of Note 9 Fair Value in our Notes To Consolidated Financial Statements under Item 8 of our 2012 Form 10-K. Certain Level 3 residential mortgage-backed non-agency and asset-backed securities with fair values as of June 30, 2013 of $698 million and $30 million, respectively, were valued using a pricing source, such as a dealer quote or comparable security price, for which the significant unobservable inputs used to determine the price were not reasonably available. The comparable amounts as of December 31, 2012 were $744 million and $31 million, respectively.

(b)

The assumed yield spread over the benchmark curve for each instrument is generally intended to incorporate non-interest-rate risks such as credit and liquidity risks.

(c)

Consensus pricing refers to fair value estimates that are generally internally developed using information such as dealer quotes or other third-party provided valuations or comparable asset prices.

(d)

The range on these indirect equity investments has not been disclosed since these investments are recorded at their net asset redemption values.

(e)

Relates to a Non-agency securitization that PNC consolidated in the first quarter of 2013.

(f)

Represents the aggregate amount of Level 3 assets and liabilities measured at fair value on a recurring basis that are individually and in the aggregate insignificant. The amount includes loans and certain financial derivative assets and liabilities and other assets.

(g)

Consisted of total Level 3 assets of $10,812 million and total Level 3 liabilities of $578 million as of June 30, 2013 and $10,988 million and $376 million as of December 31, 2012, respectively.

Other Financial Assets Accounted for at Fair Value on a Nonrecurring Basis

We may be required to measure certain other financial assets at fair value on a nonrecurring basis. These adjustments to fair value usually result from the application of lower-of-cost-or-fair value accounting or write-downs of individual assets due to impairment and are included in Table 92: Fair Value Measurements - Nonrecurring and Table 93: Fair Value Measurements - Nonrecurring Quantitative Information.For more information regarding the valuation methodologies for assets measured at fair value on a nonrecurring basis, see Note 9 Fair Value in our Notes To Consolidated Financial Statements under item 8 of our 2012 Form 10-K.

Table 92: Fair Value Measurements - Nonrecurring (a)
								Gains (Losses)				Gains (Losses)
				Fair Value				Three months ended				Six months ended
			June 30		December 31		June 30		June 30		June 30		June 30
In millions			2013		2012		2013		2012		2013		2012
Assets
	Nonaccrual loans		$	83	$	158	$	(9)	$	(42)	$	(10)	$	(96)
	Loans held for sale			209		315		(11)		(1)		(11)		(1)
	Equity investments			6		12		(3)				(3)
	Commercial mortgage servicing rights			519		191		60		(14)		73		(9)
	OREO and foreclosed assets			199		207		(19)		(32)		(33)		(59)
	Long-lived assets held for sale			52		24		(12)		(6)		(27)		(13)
		Total assets	$	1,068	$	907	$	6	$	(95)	$	(11)	$	(178)
(a)		All Level 3 as of June 30, 2013 and December 31, 2012.

Quantitative information about the significant unobservable inputs within Level 3 nonrecurring assets follows.
Table 93: Fair Value Measurements - Nonrecurring Quantitative Information
Level 3 Instruments Only
Dollars in millions			Fair Value		Valuation Techniques		Unobservable Inputs	Range (Weighted Average)
June 30, 2013
Assets
	Nonaccrual loans (a)		$	64		Fair value of collateral	Loss severity		6.3%-85.2% (35.1%)
	Loans held for sale			209		Discounted cash flow	Spread over the benchmark curve (b)		80bps-247bps (109bps)
							Embedded servicing value		.8%-3.0% (2.8%)
	Equity Investments			6		Discounted cash flow	Market rate of return		6.5%
	Commercial mortgage			519		Discounted cash flow	Constant prepayment rate (CPR)		6.2%-11.7% (6.9%)
		servicing rights					Discount rate		6.2%-7.5% (7.1%)
	Other (c)			270		Fair value of property or collateral	Appraised value/sales price		Not meaningful
		Total Assets	$	1,068
December 31, 2012
Assets
	Nonaccrual loans (a)		$	90		Fair value of collateral	Loss severity		4.6%-97.2% (58.1%)
	Loans held for sale			315		Discounted cash flow	Spread over the benchmark curve (b)		40bps-233bps (86bps)
							Embedded servicing value		.8%-2.6% (2.0%)
	Equity Investments			12		Discounted cash flow	Market rate of return		4.6%-6.5% (5.4%)
	Commercial mortgage			191		Discounted cash flow	Constant prepayment rate (CPR)		7.1%-20.1% (7.8%)
		servicing rights					Discount rate		5.6%-7.8% (7.7%)
	Other (c)			299		Fair value of property or collateral	Appraised value/sales price		Not meaningful
		Total Assets	$	907
(a)	The fair value of nonaccrual loans included in this line item is determined based on internal loss rates. The fair value of nonaccrual loans where the fair value is determined based on the appraised value or sales price is included within Other, below.
(b)	The assumed yield spread over benchmark curve for each instrument is generally intended to incorporate non-interest-rate risks such as credit and liquidity risks.
(c)	Other included nonaccrual loans of $19 million, OREO and foreclosed assets of $199 million and Long-lived assets held for sale of $52 million as of June 30, 2013. Comparably, as of December 31, 2012, Other included nonaccrual loans of $68 million, OREO and foreclosed assets of $207 million and Long-lived assets held for sale of $24 million. The fair value of these assets are determined based on appraised value or sales price, the range of which is not meaningful to disclose.

Financial Assets Accounted For Under Fair Value Option

For more information regarding assets we elected to measure at fair value under fair value option on our Consolidated Balance Sheet, see Note 9 Fair Value in our Notes To Consolidated Financial Statements under Item 8 of our 2012 Form 10-K.

The following disclosures for financial instruments accounted for at fair value under fair value option have been updated for the first six months of 2013 as PNC consolidated a Non-agency securitization resulting in an incremental $125 million of home equity lines of credit and $195million of other borrowed funds, of which $70 million had previously been recorded in our financial statements.

Residential Mortgage Loans – Portfolio

Interest income on the Home Equity Lines of Credit for which we have elected the fair value option during first quarter 2013 is reported on the Consolidated Income Statement in Loan interest income.

Other Borrowed Funds

Interest expense on theOther borrowed funds for which we have elected the fair value option during first quarter 2013 is reported on the Consolidated Income Statement in Borrowed funds interest expense.

The changes in fair value included in Noninterest income for items for which we elected the fair value option are included in the table below.

Table 94: Fair Value Option - Changes in Fair Value (a)
			Gains (Losses)				Gains (Losses)
			Three months ended				Six months ended
			June 30		June 30		June 30		June 30
In millions			2013		2012		2013		2012
Assets
	Customer resale agreements		$	(3)	$	(2)	$	(5)	$	(6)
	Residential mortgage-backed agency securities with embedded derivatives (b)					(1)				13
	Trading loans			1				2
	Commercial mortgage loans held for sale			(13)		4		(12)		(2)
	Residential mortgage loans held for sale			(48)		(287)		66		(200)
	Residential mortgage loans – portfolio			13		(9)		19		(26)
	BlackRock Series C Preferred Stock					(41)		60		(10)
Liabilities
	Other borrowed funds			(3)				(3)
(a)		The impact on earnings of offsetting hedged items or hedging instruments is not reflected in these amounts.
(b)		These residential mortgage-backed agency securities with embedded derivatives were carried as Trading securities.

Fair values and aggregate unpaid principal balances of items for which we elected the fair value option follow.
Table 95: Fair Value Option - Fair Value and Principal Balances
							Aggregate Unpaid
In millions				Fair Value			Principal Balance		Difference
June 30, 2013
Assets
	Customer resale agreements				$	210	$	196	$	14
	Trading loans					21		22		(1)
	Residential mortgage loans held for sale
		Performing loans				2,200		2,196		4
		Accruing loans 90 days or more past due				5		4		1
		Nonaccrual loans				41		67		(26)
			Total			2,246		2,267		(21)
	Commercial mortgage loans held for sale (a)
		Performing loans				632		739		(107)
		Nonaccrual loans				3		7		(4)
			Total			635		746		(111)
	Residential mortgage loans - portfolio
		Performing loans				179		282		(103)
		Accruing loans 90 days or more past due (b)				331		535		(204)
		Nonaccrual loans				301		530		(229)
			Total			811		1,347		(536)
Liabilities
	Other borrowed funds (c)				$	195	$	344	$	(149)
December 31, 2012
Assets
	Customer resale agreements				$	256	$	237	$	19
	Trading loans					76		76
	Residential mortgage loans held for sale
		Performing loans				2,072		1,971		101
		Accruing loans 90 days or more past due				8		14		(6)
		Nonaccrual loans				16		36		(20)
			Total			2,096		2,021		75
	Commercial mortgage loans held for sale (a)
		Performing loans				766		889		(123)
		Nonaccrual loans				6		12		(6)
			Total			772		901		(129)
	Residential mortgage loans - portfolio
		Performing loans				58		116		(58)
		Accruing loans 90 days or more past due (b)				116		141		(25)
		Nonaccrual loans				70		207		(137)
		Total			$	244	$	464	$	(220)
(a)	There were no accruing loans 90 days or more past due within this category at June 30, 2013 or December 31, 2012.
(b)	The majority of these loans are government insured loans, which positively impacts the fair value.
(c)	Related to a Non-agency securitization that PNC consolidated in the first quarter of 2013.

The following table provides additional information regarding the fair value and classification within the fair value hierarchy of financial instruments.
Table 96: Additional Fair Value Information Related to Financial Instruments
		Carrying		Fair Value
In millions		Amount			Total		Level 1		Level 2		Level 3
June 30, 2013
Assets
Cash and due from banks		$	4,051	$	4,051	$	4,051
Short-term assets			6,454		6,454			$	6,454
Trading securities			2,109		2,109		1,296		781	$	32
Investment securities			57,449		57,648		2,016		48,848		6,784
Trading loans			21		21				21
Loans held for sale			3,814		3,819				2,216		1,603
Net loans (excludes leases)			178,656		180,811				500		180,311
Other assets			4,168		4,168		330		1,822		2,016
Mortgage servicing rights			1,500		1,505						1,505
Financial derivatives
	Designated as hedging instruments under GAAP		1,380		1,380				1,380
	Not designated as hedging instruments under GAAP		5,205		5,205		27		5,127		51
	Total Assets	$	264,807	$	267,171	$	7,720	$	67,149	$	192,302
Liabilities
Demand, savings and money market deposits		$	186,645	$	186,645			$	186,645
Time deposits			25,634		25,694				25,694
Borrowed funds			40,109		40,855	$	929		38,695	$	1,231
Financial derivatives
	Designated as hedging instruments under GAAP		329		329				329
	Not designated as hedging instruments under GAAP		5,001		5,001		12		4,606		383
Unfunded loan commitments and letters of credit			225		225						225
	Total Liabilities	$	257,943	$	258,749	$	941	$	255,969	$	1,839
December 31, 2012
Assets
Cash and due from banks		$	5,220	$	5,220	$	5,220
Short-term assets			6,495		6,495			$	6,495
Trading securities			2,096		2,096		1,104		960	$	32
Investment securities			61,406		61,912		2,897		51,789		7,226
Trading loans			76		76				76
Loans held for sale			3,693		3,697				2,069		1,628
Net loans (excludes leases)			174,575		177,215				110		177,105
Other assets			4,265		4,265		283		1,917		2,065
Mortgage servicing rights			1,070		1,077						1,077
Financial derivatives
	Designated as hedging instruments under GAAP		1,872		1,872				1,872
	Not designated as hedging instruments under GAAP		6,696		6,696		5		6,585		106
	Total Assets	$	267,464	$	270,621	$	9,509	$	71,873	$	189,239
Liabilities
Demand, savings and money market deposits		$	187,051	$	187,051			$	187,051
Time deposits			26,091		26,347				26,347
Borrowed funds			40,907		42,329	$	731		40,505	$	1,093
Financial derivatives
	Designated as hedging instruments under GAAP		152		152				152
	Not designated as hedging instruments under GAAP		6,458		6,458		1		6,081		376
Unfunded loan commitments and letters of credit			231		231						231
	Total Liabilities	$	260,890	$	262,568	$	732	$	260,136	$	1,700

The aggregate fair value of financial instruments in Table 96: Additional Fair Value Information Related to Financial Instruments does not represent thetotal market value of PNC's assets and liabilities as the table excludes the following:

• real and personal property,
• lease financing,
• loan customer relationships,
• deposit customer intangibles,
• retail branch networks,
• fee-based businesses, such as asset management and brokerage, and
• trademarks and brand names.

For more information regarding the fair value amounts for financial instruments and their classifications within the fair value hierarchy, see Note 9 Fair Value in our Notes To Consolidated Financial Statements under Item 8 of our 2012 Form 10-K.

The aggregate carrying value of our investments that are carried at cost and FHLB and FRB stock was $1.6 billion atJune 30,2013 and $1.7 billion at December 31, 2012, which approximates fair value at each date.