Segment Reporting

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Reporting

Note 23 Segment Reporting

We have six reportable business segments:

• Retail Banking
• Corporate & Institutional Banking
• Asset Management Group
• Residential Mortgage Banking
• BlackRock
• Non-Strategic Assets Portfolio

Results of individual businesses are presented based on our internal management reporting practices. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of our individual businesses are not necessarily comparable with similar information for any other company. We periodically refine our internal methodologies as management reporting practices are enhanced. To the extent significant and practicable, retrospective application of new methodologies is made to prior period reportable business segment results and disclosures to create comparability with the current period.

Financial results are presented, to the extent practicable, as if each business operated on a stand-alone basis. Additionally, we have aggregated the results forcorporate support functions within “Other” for financial reporting purposes.

Net interest income in business segment results reflects PNC’s internal funds transfer pricing methodology. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product repricing characteristics, tenor and other factors. In the first quarter of 2015, enhancements were made to PNC’s funds transfer pricing methodology primarily for costs related to the new regulatory short-term liquidity standards. The enhancements incorporate an additional charge assigned to assets, including for unfunded loan commitments. Conversely, a higher transfer pricing credit has been assigned to those deposits that are accorded higher value under Liquidity Coverage Ratio (LCR) rules for liquidity purposes. Please see the Supervision and Regulation section in Item 1 and the Liquidity Risk Management section in Item 7 of this Report for more information about the LCR. These adjustments apply to business segment results, primarily favorably impacting Retail Banking and adversely impacting Corporate & Institutional Banking, prospectively beginning with the first quarter of 2015. Prior periods have not been adjusted due to the impracticability of estimating the impact of the change for prior periods.

A portion of capital is intended to cover unexpected losses and is assigned to our business segments using our risk-based economic capital model, including consideration of the goodwill at those business segments, as well as the diversification of risk among the business segments, ultimately reflecting PNC’s portfolio risk adjusted capital allocation.

We have allocated the allowances for loan and lease losses and for unfunded loan commitments and letters of credit based on the loan exposures within each business segment’s portfolio. Key reserve assumptions and estimation processes react to and are influenced by observed changes in loan portfolio performance experience, the financial strength of the borrower, and economic conditions. Key reserve assumptions are periodically updated.

Our allocation of the costs incurred by operations and other shared support areas not directly aligned with the businesses is primarily based on the use of services.

Total business segment financial results differ from total consolidated net income. The impact of these differences is reflected in the “Other” category in the business segment tables. “Other” includes residual activities that do not meet the criteria for disclosure as a separate reportable business, such as gains or losses related to BlackRock transactions, integration costs, asset and liability management activities including net securities gains or losses, other-than-temporary impairment of investment securities and certain trading activities, exited businesses, private equity investments, intercompany eliminations, most corporate overhead, tax adjustments that are not allocated to business segments, and differences between business segment performance reporting and financial statement reporting (GAAP), including the presentation of net income attributable to noncontrolling interests as the segments’ results exclude their portion of net income attributable to noncontrolling interests. Assets, revenue and earnings attributable to foreign activities were not material in the periods presented for comparative purposes.

Business Segment Products and Services

Retail Bankingprovides deposit, lending, brokerage, investment management and cash management services to consumer and small business customers within our primary geographic markets. Our customers are serviced through our branch network, ATMs, call centers, online banking and mobile channels. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Illinois,Maryland, Indiana,Florida, North Carolina,Kentucky, Washington, D.C.,Delaware, Virginia, Alabama, Georgia, Missouri, Wisconsin and South Carolina.

Corporate & Institutional Bankingprovides lending, treasury management, and capital markets-related products and servicesto mid-sized and large corporations, government and not-for-profit entities. Lending products include secured and unsecured loans, letters of credit and equipment leases. Treasury management services include cash and investment management, receivables management, disbursement services, funds transfer services, information reporting and global trade services. Capital markets-related products and services include foreign exchange, derivatives, securities, loan syndications, mergers and acquisitions advisory,equity capital markets advisory and related services. We also provide commercial loan servicing and real estate advisory and technology solutions for the commercial real estate finance industry. Products and services are generally provided within our primary geographic markets, with certain products and services offered nationally and internationally.

Asset Management Groupincludes personal wealth management for high net worth and ultra high net worth clients and institutional asset management. Wealth management products and services include investment and retirement planning, customized investment management, private banking, tailored credit solutions, and trust management and administration for individuals and their families. Hawthorn provides multi-generational family planning including wealth strategy, investment management, private banking, tax and estate planning guidance, performance reporting and personal administration services to ultra high net worth families. Institutional asset management provides investment management, custody administration and retirement administration services. The business also offers PNC proprietary mutual funds. Institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments, primarily located in our geographic footprint.

Residential Mortgage Bankingdirectly originates first lien residential mortgage loans on a nationwide basis with a significant presence within the retail banking footprint. Mortgage loans represent loans collateralized by one-to-four family residential real estate. These loans are typically underwritten to government agency and/or third-party standards, and either sold, servicing retained, or held on PNC’s balance sheet. Loan sales are primarily to secondary mortgage conduits of FNMA, FHLMC, Federal Home Loan Banks and third-party investors, or are securitized and issued under the GNMA program. The mortgage servicing operation performs all functions related to servicing mortgage loans, primarily those in first lien position, for various investors and for loans owned by PNC.

BlackRock is a leading publicly traded investment management firm providing a broad range of investment and risk management services to institutional and retail clients worldwide. Using a diverse platform of active and index investment strategies across asset classes, BlackRock develops investment outcomes and asset allocation solutions for clients. Product offerings include single- and multi-asset class portfolios investing in equities, fixed income, alternatives and money market instruments. BlackRock also offers an investment and risk management technology platform, risk analytics and advisory services and solutions to a broad base of institutional investors.

We hold an equity investment in BlackRock, which provides us with an additional source of noninterest income and increases our overall revenue diversification. BlackRock is a publicly traded company, and additional information regarding its business is available in its filings with the Securities and Exchange Commission (SEC). At December 31,2015, our economic interest in BlackRock was 22%.

PNC received cash dividends from BlackRock of $320 million, $285 million, and $249 million during 2015, 2014, and 2013, respectively.

Non-Strategic Assets Portfolioincludes a consumer portfolio of mainly residential mortgage and brokered home equity loans and lines of credit and a small commercial/commercial real estate loan and lease portfolio. We obtained a significant portion of these non-strategic assets through acquisitions of other companies.

Table 138: Results Of Businesses
				Corporate &		Asset		Residential				Non-Strategic
Year ended December 31		Retail		Institutional		Management		Mortgage				Assets
In millions		Banking		Banking		Group		Banking		BlackRock		Portfolio		Other		Consolidated
2015
Income Statement
Net interest income		$	4,224	$	3,365	$	292	$	121			$	392	$	(116)	$	8,278
Noninterest income			2,223		1,935		869		613	$	717		53		537		6,947
	Total revenue		6,447		5,300		1,161		734		717		445		421		15,225
Provision for credit losses (benefit)			259		106		9		2				(114)		(7)		255
Depreciation and amortization			169		145		44		15						436		809
Other noninterest expense			4,592		2,003		802		676				83		498		8,654
Income (loss) before income taxes and noncontrolling interests			1,427		3,046		306		41		717		476		(506)		5,507
Income taxes (benefit)			520		1,015		112		15		169		175		(642)		1,364
Net income		$	907	$	2,031	$	194	$	26	$	548	$	301	$	136	$	4,143
Inter-segment revenue		$	1	$	24	$	9	$	20	$	15	$	(8)	$	(61)
Average Assets (a)		$	73,240	$	132,032	$	7,920	$	6,840	$	6,983	$	6,706	$	121,243	$	354,964
2014
Income Statement
Net interest income		$	3,923	$	3,605	$	289	$	149			$	547	$	12	$	8,525
Noninterest income			2,125		1,743		818		651	$	703		40		770		6,850
	Total revenue		6,048		5,348		1,107		800		703		587		782		15,375
Provision for credit losses (benefit)			277		107		(1)		(2)				(119)		11		273
Depreciation and amortization			176		135		42		12						411		776
Other noninterest expense			4,449		1,929		779		734				125		696		8,712
Income (loss) before income taxes and noncontrolling interests			1,146		3,177		287		56		703		581		(336)		5,614
Income taxes (benefit)			418		1,071		106		21		173		214		(596)		1,407
Net income		$	728	$	2,106	$	181	$	35	$	530	$	367	$	260	$	4,207
Inter-segment revenue		$	2	$	23	$	11	$	17	$	16	$	(10)	$	(59)
Average Assets (a)		$	75,046	$	122,927	$	7,745	$	7,857	$	6,640	$	8,338	$	99,300	$	327,853
2013
Income Statement
Net interest income		$	4,077	$	3,680	$	288	$	194			$	689	$	219	$	9,147
Noninterest income			2,021		1,702		752		906	$	621		53		810		6,865
	Total revenue		6,098		5,382		1,040		1,100		621		742		1,029		16,012
Provision for credit losses (benefit)			657		(25)		10		21				(21)		1		643
Depreciation and amortization			186		128		42		11						348		715
Other noninterest expense			4,390		1,871		732		834				163		976		8,966
Income (loss) before income taxes and noncontrolling interests			865		3,408		256		234		621		600		(296)		5,688
Income taxes (benefit)			315		1,144		94		86		152		221		(536)		1,476
Net income		$	550	$	2,264	$	162	$	148	$	469	$	379	$	240	$	4,212
Inter-segment revenue		$	3	$	28	$	12	$	8	$	17	$	(10)	$	(58)
Average Assets (a)		$	74,971	$	112,970	$	7,366	$	9,896	$	6,272	$	9,987	$	84,202	$	305,664
(a)	Period-end balances for BlackRock.