Commitments and Guarantees

3 Months Ended

Mar. 31, 2016

Commitments and Guarantees [Abstract]

Commitments and Guarantees

Note 15 Commitments and Guarantees

Commitments

In the normal course of business, we have various commitments outstanding, certain of which are not included on our Consolidated Balance Sheet. The following table presents our outstanding commitments to extend credit along with significant other commitments as of March 31,2016 and December 31, 2015, respectively.

Table 93: Commitments to Extend Credit and Other Commitments
			March 31		December 31
In millions			2016		2015
Commitments to extend credit
	Total commercial lending		$	101,434	$	101,252
	Home equity lines of credit			17,311		17,268
	Credit card			20,814		19,937
	Other			4,399		4,032
Total commitments to extend credit				143,958		142,489
Net outstanding standby letters of credit (a)				8,969		8,765
Reinsurance agreements (b)				1,968		2,010
Standby bond purchase agreements (c)				891		911
Other commitments (d)				969		966
		Total commitments to extend credit and other commitments	$	156,755	$	155,141
(a)	Net outstanding standby letters of credit include $4.6 billion and $4.7 billion which support remarketing programs at March 31, 2016 and December 31, 2015, respectively.
(b)	Represents aggregate maximum exposure up to the specified limits of the reinsurance contracts, and reflects estimates based on availability of financial information from insurance carriers. As of both March 31, 2016 and December 31, 2015, the aggregate maximum exposure amount comprised $1.6 billion for accidental death & dismemberment contracts and $.4 billion for credit life, accident & health contracts.
(c)	We enter into standby bond purchase agreements to support municipal bond obligations.
(d)	Includes $.5 billion related to investments in qualified affordable housing projects at both March 31, 2016 and December 31, 2015.

Commitments to Extend Credit

Commitments to extend credit, or net unfunded loan commitments, represent arrangements to lend funds or provide liquidity subject to specified contractual conditions. These commitments generally have fixed expiration dates, may require payment of a fee, and contain termination clauses in the event the customer’s credit quality deteriorates. Based on our historical experience, some commitments expire unfunded, and therefore cash requirements are substantially less than the total commitment.

Net Outstanding Standby Letters of Credit

We issue standby letters of credit and share in the risk of standby letters of credit issued by other financial institutions, in each case to support obligations of our customers to third parties, such as insurance requirements and the facilitation of transactions involving capital markets product execution. Internal credit ratings related to our net outstanding standby letters of credit were as follows:

Table 94: Internal Credit Ratings Related to Net Outstanding Standby Letters of Credit
		March 31			December 31
		2016			2015
Internal credit ratings (as a percentage of portfolio):
	Pass (a)		92	%		93	%
	Below pass (b)		8	%		7	%
(a)	Indicates that expected risk of loss is currently low.
(b)	Indicates a higher degree of risk of default.

If the customer fails to meet its financial or performance obligation to the third party under the terms of the contract or there is a need to support a remarketing program, then upon a draw by a beneficiary, subject to the terms of the letter of credit, we would be obligated to make payment to them. The standby letters of credit outstanding on March 31,2016 had terms ranging from less than 1 year to 9 years.

As of March 31,2016, assets of $1.1 billion secured certain specifically identified standby letters of credit. In addition, a portion of the remaining standby letters of credit issued on behalf of specific customers is also secured by collateral or guarantees that secure the customers’ other obligations to us. The carrying amount of the liability for our obligations related to standby letters of credit and participations in standby letters of credit was $.2 billion at March 31,2016 and is included in Other liabilities on our Consolidated Balance Sheet.

Reinsurance Agreements

We have a wholly-owned captive insurance subsidiary which provides reinsurance for accidental death & dismemberment, credit life, and accident & health, all of which are in run-off. This subsidiary previously entered into these various types of reinsurance agreements with third-party insurers where the subsidiary assumed the risk of loss through quota share agreements up to 100% reinsurance. In quota share agreements, the subsidiary and the third-party insurers share the responsibility for payment of all claims.

Recourse and Repurchase Obligations

As discussed in Note 2 Loan Sale and Servicing Activities and Variable Interest Entities, PNC has sold commercial mortgage, residential mortgage and home equity loans/lines of credit directly or indirectly through securitization and loan sale transactions in which we have continuing involvement. One form of continuing involvement includes certain recourse and loan repurchase obligations associated with the transferred assets. See Note 21 Commitments and Guarantees in our 2015 Form 10-K for details related to our Recourse and Repurchase Obligations.

Resale and Repurchase Agreements

We enter into repurchase and resale agreements where we transfer investment securities to/from a third party with the agreement to repurchase/resell those investment securities at a future date for a specified price. These agreements are entered into primarily to provide short-term financing for securities inventory positions, acquire securities to cover short positions and accommodate customers’ investing and financing needs. Repurchase and resale agreements are treated as collateralized financing transactions for accounting purposes and are generally carried at the amounts at which the securities will be subsequently reacquired or resold, including accrued interest. Our policy is to take 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.

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.

Table 95shows the amounts owed under resale and repurchase agreements and the securities collateral associated with those agreements where a legal opinion supporting the enforceability of the offsetting rights has been obtained. We do not present resale and repurchase agreements entered into with the same counterparty under a legally enforceable master netting agreement on a net basis on our Consolidated Balance Sheet or within Table 95.

Refer to Note 10 Financial Derivatives for additional information related to offsetting of financial derivatives.

Table 95: Resale and Repurchase Agreements Offsetting
				Amounts				Securities
				Offset				Collateral
			Gross	on the		Net		Held Under
			Resale	Consolidated		Resale		Master Netting		Net
In millions			Agreements	Balance Sheet		Agreements (a)		Agreements (b)		Amounts (c)
Resale Agreements
	March 31, 2016	$	978		$	978	$	904	$	74
	December 31, 2015	$	1,082		$	1,082	$	1,008	$	74
				Amounts				Securities
				Offset				Collateral
			Gross	on the		Net		Pledged Under
			Repurchase	Consolidated		Repurchase		Master Netting		Net
In millions			Agreements	Balance Sheet		Agreements (a)		Agreements (b)		Amounts (d)
Repurchase Agreements (e)
	March 31, 2016	$	2,492		$	2,492	$	1,760	$	732
	December 31, 2015	$	1,767		$	1,767	$	1,014	$	753
(a)	Resale agreements are included on the Consolidated Balance Sheet in Federal funds sold and resale agreements. Repurchase agreements are included on the Consolidated Balance Sheet in Federal funds purchased and repurchase agreements.
(b)	Represents the fair value of securities collateral purchased or sold, up to the amount owed under the agreement, for agreements supported by a legally enforceable master netting agreement.
(c)	Represents certain long term resale agreements which are fully collateralized but do not have the benefits of a netting opinion and, therefore, might be subject to a stay in insolvency proceedings and therefore are not eligible under ASC 210-20 for netting.
(d)	Represents overnight repurchase agreements entered into with municipalities, pension plans, and certain trusts and insurance companies which are fully collateralized but do not have the benefits of a netting opinion and, therefore, might be subject to a stay in insolvency proceedings and therefore are not eligible under ASC 210-20 for netting. There were no long term repurchase agreements as of March 31, 2016 and December 31, 2015.
(e)	Repurchase agreements have remaining contractual maturities that are classified as overnight or continuous. As of March 31, 2016 and December 31, 2015, the collateral pledged under these agreements consisted primarily of residential mortgage-backed agency securities.