PNC(PNC) - 2024 Q4 - Annual Report

Financial Position - As of December 31, 2024, the company's consolidated total assets were $560.0 billion, total deposits were$ 426.7 billion, and total shareholders' equity was $54.4 billion[15]. - PNC and PNC Bank are classified as Category III firms, with more than$ 250 billion but less than $700 billion in consolidated total assets, and have$ 24.0 billion in cross-jurisdictional activities as of December 31, 2024[32]. - As of December 31, 2024, PNC had weighted short-term wholesale funding of $43.7 billion, subject to reduced liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) requirements[57]. Capital Requirements - The company 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% to avoid limitations on capital distributions[39]. - The minimum CET1 ratio required is 4.5%, with a Tier 1 capital ratio of 6.0% and a Total capital ratio of 8.0% to be considered "adequately capitalized"[38]. - PNC and PNC Bank maintained a minimum leverage ratio of 4.0% and a supplementary leverage ratio of 3.0%, exceeding the required minimum levels as of December 31, 2024[41]. - The regulatory minimum LCR that PNC and PNC Bank are required to maintain is 100%, calculated daily[55]. - PNC expects to remain above current minimum capital and buffer requirements even if the proposed Basel III framework changes are finalized[47]. Regulatory Compliance - The company is subject to comprehensive supervision and examination by regulatory bodies, including the Federal Reserve and the OCC, which assess capital levels, asset quality, and risk management effectiveness[22]. - The regulatory capital rules classify banking organizations based on asset size and risk profile, impacting the capital and liquidity requirements applicable to the company[32]. - PNC is required to submit a resolution plan every three years, with the next full plan due by October 1, 2025[90]. - The OCC has established heightened risk management standards for large national banks, including PNC Bank, which must comply with these guidelines[74]. Risk Management - PNC must conduct internal liquidity stress tests and maintain a buffer of highly liquid assets to meet projected net cash outflows[59]. - The Federal Reserve's supervisory assessment of PNC's capital planning includes a review of its governance and risk management framework[50]. - PNC's aggregate net credit exposure to any unaffiliated counterparty may not exceed 25% of its Tier 1 capital under the enhanced prudential standards[65]. - The company is subject to various risks, including adverse economic conditions that can reduce demand for products and services[126]. - The company faces risks related to the valuation of financial assets, which can fluctuate significantly due to market volatility and changes in creditworthiness[175]. Economic Environment - PNC operates in an uncertain economic environment due to sustained inflationary pressures and geopolitical tensions, impacting financial performance[127]. - Changes in government legislation and policy can adversely affect PNC's business and financial performance, altering consumer and business behavior[129]. - The Federal Reserve's monetary policies significantly impact interest rates and overall financial market performance, affecting PNC's operations[132]. Cybersecurity - The company maintains vast amounts of confidential digital information, making it a target for cyber attacks that could lead to significant reputational damage and financial losses[156]. - The risk of data security breaches is heightened due to the expanded use of digital products and services, as well as the reliance on third-party vendors[157]. - The company has implemented policies and systems to mitigate risks related to information system failures and breaches, focusing on cybersecurity and business continuity[164]. - The Board of Directors oversees cybersecurity risks through the Technology and Risk Committees, which meet quarterly to assess technology and security risks[212]. Human Capital - PNC had a total of 55,184 employees as of December 31, 2024, including 53,686 full-time and 1,498 part-time employees[110]. - Approximately 60% of open requisitions at first-level and above career bands are filled with internal candidates, enhancing talent retention and development[111]. - PNC's human capital strategies focus on attracting, retaining, and developing employees to enhance competitive effectiveness[110]. Acquisitions and Growth - On October 2, 2023, the company acquired a portfolio of capital commitments facilities from Signature Bridge Bank, N.A., representing approximately$ 16.0 billion in total commitments, including approximately $9.0 billion of funded loans[17]. - The success of acquisitions is partially dependent on retaining the acquired company's customer base and integrating corporate cultures[202]. Legal and Reputational Risks - The company faces substantial legal liability risks, including ongoing lawsuits and governmental investigations, which could lead to significant monetary damages or reputational harm[199]. - The company is exposed to reputational risks that could arise from negative publicity or customer harm, which may lead to a loss of customers and reduced business[188].