PNC FINANCIAL SERVICES GROUP, INC.PNC
PNC FINANCIAL SERVICES GROUP, INC. Goodwill & Intangibles Disclosure
GOODWILL AND MORTGAGE SERVICING RIGHTS
Assets and liabilities of acquired entities are recorded at estimated fair value as of the acquisition date.
Goodwill
Allocations of goodwill by business segment at December 31, 2025, 2024 and 2023 follow:
Table 59: Goodwill by Business Segment
| In millions | Retail Banking | Corporate & Institutional Banking | Asset Management Group | Total | ||||||||||
| Balance as of December 31, 2025 | $ | 6,451 | $ | 4,319 | $ | 189 | $ | 10,959 | ||||||
| Other | (22) | 49 | — | 27 | ||||||||||
| Balance as of December 31, 2024 | $ | 6,473 | $ | 4,270 | $ | 189 | $ | 10,932 | ||||||
| Balance as of December 31, 2023 | $ | 6,473 | $ | 4,270 | $ | 189 | $ | 10,932 | ||||||
We review goodwill in each of our reporting units for impairment at least annually, in the fourth quarter, or more frequently if events occur or circumstances have changed significantly from the annual test date. Based on the results of our analysis, there were no impairment charges related to goodwill in 2025, 2024 or 2023. See Note 1 Accounting Policies for additional information regarding the goodwill impairment test.
Mortgage Servicing Rights
We recognize the right to service mortgage loans for others as an intangible asset when the benefits of servicing are expected to be more than adequate compensation to a servicer for performing the servicing. MSRs are recognized either when purchased or when originated loans are sold with servicing retained. MSRs totaled $3.7 billion at both December 31, 2025 and 2024, and consisted of loan servicing contracts for commercial and residential mortgages measured at fair value.
Commercial Mortgage Servicing Rights
We recognize gains or losses on changes in the fair value of commercial MSRs. Commercial MSRs are subject to changes in value from actual or expected prepayment of the underlying loans and defaults as well as market driven changes in interest rates. We manage this risk by economically hedging the fair value of commercial MSRs with securities, derivative instruments and resale agreements which are expected to increase (or decrease) in value when the value of commercial MSRs decreases (or increases).
The fair value of commercial MSRs is estimated by using a discounted cash flow model incorporating inputs for assumptions as to constant prepayment rates, discount rates and other factors determined based on current market conditions and expectations.
Changes in the commercial MSRs follow:
Table 60: Commercial Mortgage Servicing Rights
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| January 1 | $ | 1,085 | $ | 1,032 | $ | 1,113 | ||||||||||||||
| Additions: | ||||||||||||||||||||
| From loans sold with servicing retained | 55 | 44 | 50 | |||||||||||||||||
| Purchases | 90 | 64 | 44 | |||||||||||||||||
| Changes in fair value due to: | ||||||||||||||||||||
| Time and payoffs (a) | (306) | (317) | (332) | |||||||||||||||||
| Other (b) | 97 | 262 | 157 | |||||||||||||||||
| December 31 | $ | 1,021 | $ | 1,085 | $ | 1,032 | ||||||||||||||
| Related unpaid principal balance of loans serviced at December 31 | $ | 294,070 | $ | 290,384 | $ | 288,042 | ||||||||||||||
| Servicing advances at December 31 | $ | 643 | $ | 653 | $ | 561 | ||||||||||||||
(a)Represents decrease in MSR value due to passage of time, which includes the impact from regularly scheduled loan principal payments, prepayments and loans that were paid off during the period.
(b)Includes MSR value changes resulting from changes in interest rates and other market-driven conditions.
Residential Mortgage Servicing Rights
We recognize gains or losses on changes in the fair value of residential MSRs. Residential MSRs are subject to changes in value from actual or expected prepayment of the underlying loans and defaults as well as market driven changes in interest rates. We manage this risk by economically hedging the fair value of residential MSRs with securities and derivative instruments that are expected to increase (or decrease) in value when the value of residential MSRs decreases (or increases).
The fair value of residential MSRs is estimated by using a discounted cash flow valuation model that calculates the present value of estimated future net servicing cash flows, taking into consideration actual and expected mortgage loan prepayment rates, discount rates, servicing costs and other factors that are determined based on current market conditions.
Changes in the residential MSRs follow:
Table 61: Residential Mortgage Servicing Rights
| In millions | 2025 | 2024 | 2023 | |||||||||||||||||
| January 1 | $ | 2,626 | $ | 2,654 | $ | 2,310 | ||||||||||||||
| Additions: | ||||||||||||||||||||
| From loans sold with servicing retained | 32 | 28 | 23 | |||||||||||||||||
| Purchases | 263 | 43 | 444 | |||||||||||||||||
| Changes in fair value due to: | ||||||||||||||||||||
| Time and payoffs (a) | (264) | (254) | (237) | |||||||||||||||||
| Other (b) | (19) | 155 | 115 | |||||||||||||||||
| Sale | — | — | (1) | |||||||||||||||||
| December 31 | $ | 2,638 | $ | 2,626 | $ | 2,654 | ||||||||||||||
| Related unpaid principal balance of loans serviced at December 31 | $ | 198,019 | $ | 196,915 | $ | 209,158 | ||||||||||||||
| Servicing advances at December 31 | $ | 127 | $ | 153 | $ | 172 | ||||||||||||||
(a)Represents decrease in MSR value due to passage of time, which includes the impact from regularly scheduled loan principal payments, prepayments and loans that were paid off during the period.
(b)Includes MSR value changes resulting from changes in interest rates and other market-driven conditions.
Sensitivity Analysis
The fair value of commercial and residential MSRs and significant inputs to the valuation models as of December 31, 2025 and 2024 are shown in Tables 62 and 63. The expected and actual rates of mortgage loan prepayments are significant factors driving the fair value. Management uses both internal proprietary models and a third-party model to estimate future commercial mortgage loan prepayments and a third-party model to estimate future residential mortgage loan prepayments. These models have been refined based on current market conditions and management judgment. Future interest rates are another important factor in the valuation of MSRs. Management utilizes market implied forward interest rates to estimate the future direction of mortgage and discount rates. The forward rates utilized are derived from the current yield curve for U.S. dollar interest rate swaps and are consistent with pricing of capital markets instruments. Changes in the shape and slope of the forward curve in future periods may result in volatility in the fair value estimate.
A sensitivity analysis of the hypothetical effect on the fair value of MSRs to adverse changes in key assumptions is also presented in Tables 62 and 63. These sensitivities do not include the impact of the related hedging activities. Changes in fair value generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, the effect of a variation in a particular assumption on the fair value of the MSRs is calculated independently without changing any other assumption. In reality, changes in one factor may result in changes in another (e.g., changes in mortgage interest rates, which drive changes in prepayment rate estimates, could result in changes in the interest rate spread), which could either magnify or counteract the sensitivities.
The following tables set forth the fair value of commercial and residential MSRs and the sensitivity analysis of the hypothetical effect on the fair value of MSRs to immediate adverse changes of 10% and 20% in those assumptions:
Table 62: Commercial Mortgage Servicing Rights – Key Valuation Assumptions
| Dollars in millions | December 31, 2025 | December 31, 2024 | ||||||||||||
| Fair value | $ | 1,021 | $ | 1,085 | ||||||||||
| Weighted-average life (years) | 3.8 | 3.8 | ||||||||||||
| Weighted-average constant prepayment rate | 4.43 | % | 4.45 | % | ||||||||||
| Decline in fair value from 10% adverse change | $ | 8 | $ | 8 | ||||||||||
| Decline in fair value from 20% adverse change | $ | 16 | $ | 16 | ||||||||||
| Effective discount rate | 10.60 | % | 11.18 | % | ||||||||||
| Decline in fair value from 10% adverse change | $ | 30 | $ | 35 | ||||||||||
| Decline in fair value from 20% adverse change | $ | 61 | $ | 69 | ||||||||||
Table 63: Residential Mortgage Servicing Rights – Key Valuation Assumptions
| Dollars in millions | December 31, 2025 | December 31, 2024 | ||||||||||||
| Fair value | $ | 2,638 | $ | 2,626 | ||||||||||
| Weighted-average life (years) | 7.7 | 8.0 | ||||||||||||
| Weighted-average constant prepayment rate | 6.73 | % | 6.39 | % | ||||||||||
| Decline in fair value from 10% adverse change | $ | 64 | $ | 57 | ||||||||||
| Decline in fair value from 20% adverse change | $ | 124 | $ | 111 | ||||||||||
| Weighted-average option adjusted spread | 734 | bps | 755 | bps | ||||||||||
| Decline in fair value from 10% adverse change | $ | 82 | $ | 81 | ||||||||||
| Decline in fair value from 20% adverse change | $ | 159 | $ | 157 | ||||||||||
Fees from mortgage loan servicing, which include contractually specified servicing fees, late fees and ancillary fees, were $0.7 billion for 2025, 2024 and 2023. We also generate servicing fees from fee-based activities provided to others for which we do not have an associated servicing asset. Fees from commercial and residential MSRs are reported within Noninterest income on our Consolidated Income Statement in Residential and commercial mortgage.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 29, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.