The Consolidated Financial Highlights accompanying this news release include additional information regarding reconciliations of non-GAAP financial measures to reported amounts. Fee income, a non-GAAP financial measure, refers to noninterest income in the following categories: asset management, consumer services, corporate services, residential mortgage and service charges on deposits. Information in this news release, including the financial tables, is unaudited.

Total revenue for the first quarter of 2019 decreased $54 million compared with the fourth quarter and increased $175 million compared with the first quarter of 2018. Net interest income and noninterest income declined in the fourth quarter comparison and increased compared with first quarter 2018.

Net interest income for the first quarter of 2019 decreased $6 million compared with the fourth quarter and increased $114 million compared with the first quarter of 2018. In both comparisons, higher loan and securities yields and balances were partially offset by higher deposit and borrowing costs and balances. For the first quarter of 2019, this increase was more than offset by the impact of two fewer days compared with the fourth quarter. The net interest margin increased to 2.98 percent for the first quarter of 2019 compared with 2.96 percent for the fourth quarter of 2018 and 2.91 percent for the first quarter of 2018.

Noninterest income for the first quarter of 2019 declined $48 million compared with the fourth quarter from seasonally lower fee income and lower other noninterest income. Asset management revenue, including earnings from PNC's equity investment in BlackRock, increased $9 million reflecting higher average equity markets. Consumer services, corporate services and service charges on deposits decreased due to seasonally lower transaction volumes and activity. Residential mortgage revenue increased $6 million as a result of a reduction in the negative adjustment for residential mortgage servicing rights valuation, net of economic hedge, and higher servicing fee income partially offset by lower loan sales revenue. Other noninterest income decreased $17 million reflecting negative derivative fair value adjustments related to Visa Class B common shares of $31 million compared with positive adjustments of $42 million in the fourth quarter partially offset by asset gains and higher revenue from private equity investments.

Noninterest income for the first quarter of 2019 increased $61 million compared with the first quarter of 2018. Asset management revenue, including earnings from PNC's equity investment in BlackRock, declined $18 million. Consumer service fees increased $14 million driven by higher debit card, brokerage and credit card activity. Corporate service fees grew $33 million reflecting higher merger and acquisition advisory fees and treasury management product revenue. Residential mortgage revenue decreased $32 million as a result of a negative adjustment for residential mortgage servicing rights valuation, net of economic hedge, compared with a benefit in first quarter 2018 and lower loan sales revenue. Other noninterest income increased $63 million and included higher gains on asset sales and higher revenue from private equity investments partially offset by the negative Visa Class B derivative fair value adjustments.

Noninterest expense in total for the first quarter of 2019 was essentially unchanged from the fourth quarter. Seasonally higher personnel expense related to incentive compensation and occupancy expense were offset by seasonally lower marketing expense, lower equipment costs and lower professional services and other expense as PNC continued to focus on expense management.

Noninterest expense for the first quarter of 2019 increased $51 million compared with the first quarter of 2018. Investments in support of business growth were reflected in higher personnel expense and higher marketing expense, which included costs for PNC's national retail digital strategy. These increases were offset in part by a decrease in FDIC deposit insurance as a result of the elimination of the surcharge assessment.

The effective tax rate was 16.3 percent for both the first quarter of 2019 and fourth quarter of 2018 and 17.0 percent for the first quarter of 2018.

CONSOLIDATED BALANCE SHEET REVIEW

Average total assets were $385.9 billion in the first quarter of 2019, an increase of 1 percent compared with $383.1 billionin the fourth quarter of 2018 driven by loan growth. Average total assets increased 3 percent compared with $376.3 billion in the first quarter of 2018 as higher average investment securities, loans, and short-term investments were partially offset by lower interest-earning deposits with banks. Total assets were $392.8 billion at March 31, 2019, $382.3 billion at December 31, 2018 and $379.2 billion at March 31, 2018.

Average loans for the first quarter of 2019 grew $2.6 billion compared with the fourth quarter. Average commercial lending balances increased $2.5 billion due to loan growth in PNC's corporate banking business of $3.5 billion, as well as growth in business credit, partially offset by a decrease in average loans in the real estate business driven by seasonally lower multifamily agency warehouse lending balances of $1.5 billion. Average consumer lending balances increased $.1 billion due to growth in residential mortgage, auto, credit card and unsecured installment loans partially offset by lower home equity and education loans. Total loans at March 31, 2019 grew $6.0 billion compared with December 31, 2018with an increase in commercial lending balances of $6.1 billion and a decrease in consumer lending balances of $.1 billion.

First quarter 2019 average and period end loans increased $7.4 billion and $10.7 billion, respectively, compared with first quarter 2018 driven by growth in both commercial and consumer lending balances.

Average investment securities for the first quarter of 2019 increased $.2 billion and period end balances increased $1.2 billion compared with the fourth quarter due to net purchase activity. First quarter 2019 average and period end investment securities increased $7.7 billion and $9.3 billion, respectively, compared with the first quarter of 2018. Net unrealized gains on available for sale securities were $.5 billion at March 31, 2019 compared with net unrealized losses of $.1 billion at December 31, 2018 and $.2 billion at March 31, 2018.

Average balances held with the Federal Reserve Bank decreased to $14.7 billion in the first quarter of 2019 from $16.4 billion in the fourth quarter and $25.4 billion in the first quarter of 2018 as investment of liquidity continued. Balances held with the Federal Reserve were $15.0 billion at March 31, 2019, $10.5 billion at December 31, 2018, and $28.6 billion at March 31, 2018. The lower balance at year end 2018 reflected short-term investments in resale agreements included in other assets on the balance sheet.

Average deposits for the first quarter of 2019 increased $.7 billion compared with the fourth quarter and deposits at March 31, 2019 increased $3.4 billion over December 31, 2018 due to growth in consumer deposits partially offset by seasonal declines in commercial deposits. First quarter 2019 average and period end deposits increased $6.6 billion and $6.5 billion, respectively, compared with first quarter 2018. Higher interest-bearing deposits reflected consumer deposit growth, including from the national retail digital strategy, as well as a shift of commercial deposits from noninterest-bearing as deposit rates have risen.

Average borrowed funds for the first quarter of 2019 increased $1.0 billion compared with the fourth quarter and borrowed funds at March 31, 2019 increased $2.4 billion compared with December 31, 2018 reflecting higher federal funds purchased for liquidity management. First quarter 2019 average and period end borrowed funds increased $.1 billion and $1.8 billion, respectively, compared with first quarter 2018 as higher federal funds purchased, Federal Home Loan Bank borrowings and subordinated debt were largely offset by lower bank notes and senior debt.

Overall credit quality for the first quarter of 2019 remained strong. Provision for credit losses for the first quarter increased $41 million compared with the fourth quarter reflecting loan growth, including new loans and increased utilization, and reserve increases attributable to certain commercial credits. The commercial loan provision increased $31 million and the consumer loan provision increased $10 million.

Nonperforming assets at March 31, 2019 declined $23 million compared with December 31, 2018 primarily due to lower nonperforming home equity and commercial real estate loans partially offset by higher nonperforming commercial loans. Nonperforming assets decreased $219 million compared with March 31, 2018 as a result of lower nonperforming commercial, commercial real estate and consumer loans. Nonperforming assets to total assets were .45 percent at March 31, 2019, .47 percent at December 31, 2018 and .53 percent at March 31, 2018.

Overall delinquencies at March 31, 2019 declined $49 million, or 3 percent, compared with December 31, 2018. Accruing loans 30 to 59 days past due increased $49 million primarily due to higher commercial real estate and equipment lease financing delinquencies. Accruing loans past due 60 to 89 days decreased $59 million and accruing loans past due 90 days or more decreased $39 million.

Net charge-offs for the first quarter of 2019 increased $29 million compared with the fourth quarter driven by higher consumer loan net charge-offs of $24 million due to lower home equity loan recoveries and higher credit card net charge-offs. Compared with first quarter 2018, net charge-offs increased $23 million attributable to higher auto and credit card net charge-offs. Net charge-offs for the first quarter of 2019 were .24 percent of average loans on an annualized basis compared with .19 percent for the fourth quarter of 2018 and .21 percent for the first quarter of 2018.

The allowance for loan and lease losses to total loans was 1.16 percent at both March 31, 2019 and December 31, 2018 and 1.18 percent at March 31, 2018. The allowance to nonperforming loans increased to 163 percent at March 31, 2019 compared with 155 percent at December 31, 2018 and 141 percent at March 31, 2018.

Retail Banking earnings for the first quarter of 2019 decreased compared with the fourth quarter of 2018 and increased compared with the first quarter of 2018. Noninterest income declined compared with the fourth quarter due to seasonally lower service charges on deposits and consumer service fees, including merchant services and debit card fees, and negative derivative fair value adjustments related to Visa Class B common shares compared with positive adjustments in the fourth quarter. Noninterest income decreased compared with the first quarter of 2018 due to lower residential mortgage revenue attributable to a negative adjustment for residential mortgage servicing rights valuation, net of economic hedge, compared with a benefit in first quarter 2018, and lower loan sales revenue, as well as the negative Visa derivative fair value adjustments. These decreases were partially offset by growth in consumer services, including higher debit and credit card and brokerage fees. Provision for credit losses increased compared with the fourth quarter as a result of the credit card portfolio and increased compared with first quarter 2018 as loan balances in the credit card and auto portfolios increased. Noninterest expense declined compared with the fourth quarter primarily due to lower marketing and equipment expense and increased compared with first quarter 2018 due to higher marketing costs, including expense related to the national retail digital strategy.

• Average loans increased 1 percent and 2 percent compared with the fourth and first quarters of 2018, respectively, due to growth in residential mortgage, auto, credit card and unsecured installment loans partially offset by lower home equity and education loans.

• Average deposits grew 2 percent compared with the fourth quarter and 3 percent compared with first quarter 2018 as overall deposit and customer growth drove higher savings, demand and certificates of deposit partially offset by lower money market deposits reflecting a shift to relationship-based savings products.

• Net charge-offs were $132 million for the first quarter of 2019 compared with $112 million in the fourth quarter and $100 million in the first quarter of 2018.

• Residential mortgage loan origination volume was $1.7 billion for the first quarter of 2019 compared with $1.6 billion for the fourth quarter and $1.7 billion for the first quarter of 2018. Approximately 56 percent of first quarter 2019 volume was for home purchase transactions compared with 67 percent and 56 percent for the fourth and first quarters of 2018, respectively.

• The third party residential mortgage servicing portfolio was $123 billion at March 31, 2019 compared with $125 billion at both December 31, 2018 and March 31, 2018. Residential mortgage loan servicing acquisitions were $1 billion for first quarter 2019, $2 billion for fourth quarter 2018 and $1 billion for first quarter 2018.

• Approximately 68 percent of consumer customers used non-teller channels for the majority of their transactions during the first quarter of 2019 compared with 67 percent in the fourth quarter and 64 percent in the first quarter of 2018.

• Deposit transactions via ATM and mobile channels were 57 percent of total deposit transactions in the first quarter of 2019 compared with 55 percent in the fourth quarter and 54 percent in the first quarter of 2018.

Corporate & Institutional Banking earnings for the first quarter of 2019 decreased in both comparisons. Noninterest income declined compared with the fourth quarter primarily due to lower gains on asset sales and seasonally lower loan syndication fees and revenue from commercial mortgage banking activities partially offset by higher merger and acquisition advisory fees. Noninterest income increased compared with the first quarter of 2018 primarily due to higher merger and acquisition advisory fees and treasury management product revenue. Provision for credit losses in the first quarter of 2019 increased compared with the fourth quarter reflecting portfolio growth, including new loans and increased utilization, and reserve increases attributable to certain commercial credits. Noninterest expense increased compared with the first quarter of 2018 largely as a result of investments in strategic initiatives and variable costs associated with increased business activity.

• Average loans increased 2 percent compared with the fourth quarter primarily due to growth in PNC's corporate banking business as well as growth in business credit partially offset by seasonally lower multifamily agency warehouse lending in the real estate business. Average loans grew 5 percent over the first quarter of 2018 reflecting growth in both PNC's corporate banking and business credit businesses.

• Average deposits decreased 4 percent from the fourth quarter reflecting seasonal declines and increased 1 percent compared with the first quarter of 2018 due to growth in interest-bearing deposits substantially offset by a decline in noninterest-bearing demand deposits as deposit rates have risen.

• Net charge-offs were $5 million in the first quarter of 2019 compared with $2 million in the fourth quarter of 2018 and $9 million in the first quarter of 2018.