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1plan prior to the next annual submission date if, among other things, there has been or will be a material change in the BHC’s risk 2profile, financial condition or corporate structure since its last capital plan submission. 3In evaluating PNC’s capital plan, the Federal Reserve also considers a number of qualitative factors. In assessing a BHC’s capital 4planning and stress testing processes, the Federal Reserve considers whether the BHC has sound and effective governance to oversee 5these processes. The Federal Reserve’s evaluation focuses on whether a BHC’s capital planning and stress testing processes are 6supported by a strong risk management framework to identify, measure and assess material risks and that provides a strong foundation 7to capital planning. The Federal Reserve also considers the comprehensiveness of a BHC’s control framework and evaluates a BHC’s 8policy guidelines for capital planning and assessing capital adequacy. A BHC’s stress testing scenario design processes and 9approaches for estimating the impact of stress on its capital position, including stress testing models and non-model qualitative 10approaches, may be reviewed to ensure that projections reflect the impact of appropriately stressful conditions, as well as risks 11idiosyncratic to the BHC, on its capital position. Significant deficiencies in a BHC’s capital planning and stress testing processes may 12result in supervisory directives that require the firm to address the identified deficiencies and, potentially, a downgrade in the BHC’s 13supervisory capital positions and planning rating.14In connection with the 2024 CCAR exercise, we must file our capital plan and stress testing results using financial data as of 15December 31, 2023, with the Federal Reserve by April 5, 2024. In June 2024, we expect to receive PNC’s preliminary SCB for the 16four-quarter period beginning October 1, 2024. The Federal Reserve must provide firms their final SCB for this period by August 31, 172024, which would reflect any changes made to the firm’s planned common stock dividends to remain in compliance with the firm’s 18SCB.19As a Category III institution, PNC must conduct a company-run DFAST stress test in even numbered years and release PNC’s 20projections of certain revenue, loss and capital results from the exercise under the agencies’ hypothetical supervisory severely adverse 21macroeconomic scenario and applying the agencies’ DFAST capital action assumptions.22As part of the DFAST and annual CCAR processes, the Federal Reserve releases certain revenue, loss and capital results for each 23participating firm from its supervisory stress testing exercises.24Regulatory Liquidity Standards and Liquidity Risk Management Requirements. The Basel Committee’s Basel III framework also 25includes short-term liquidity standards and long-term funding standards, the LCR and NSFR, respectively.26The U.S. banking agencies’ LCR rules are designed to ensure that covered banking organizations maintain an adequate level of cash 27and high-quality liquid assets to meet estimated net liquidity needs in a short-term stress scenario using liquidity inflow and outflow 28assumptions prescribed in the rules (net cash outflow). A company’s LCR is the amount of its high-quality liquid assets divided by its 29net cash outflows, expressed as a percentage, and as calculated under the rules. The regulatory minimum LCR that covered banking 30organizations are required to maintain is 100%. PNC and PNC Bank are required to calculate the LCR on a daily basis. If either 31institution’s LCR is below the minimum requirement for three consecutive business days, the institution must promptly provide its 32regulator with a plan for achieving compliance with the minimum LCR requirement.33The NSFR is designed to measure the stability of the maturity structure of assets and liabilities of banking organizations over a one-34year time horizon. A covered BHC’s NSFR is the ratio of its available stable funding to its required stable funding amount (as 35calculated under the rules) over a one-year horizon. The regulatory minimum ratio for all covered banking organizations (expressed as 36a percentage) is 100%. PNC and PNC Bank calculate the NSFR daily. If either institution’s NSFR falls, or is likely to fall below, the 37minimum requirement, the institution must provide its regulator with a plan for achieving compliance with the minimum NSFR 38requirement.39As Category III institutions with less than $75 billion in weighted short-term wholesale funding, PNC and PNC Bank are subject to 40reduced LCR and NSFR requirements, with each company’s LCR net cash outflows and NSFR required stable funding (as calculated 41under the rules) reduced by 15%, thereby reducing the amount of high-quality liquid assets or available stable funding each institution 42must hold to meet the LCR and NSFR minimum requirements, respectively. As of December 31, 2023, PNC had weighted short-term 43wholesale funding for these purposes of $33.1 billion.  44The Federal Reserve requires large BHCs, including PNC, to publicly disclose certain quantitative and qualitative measures of their 45LCR- and NSFR-related liquidity profile. These disclosures include major components used to calculate the LCR and NSFR (e.g., 46high-quality liquid assets, cash outflows and inflows for the LCR, and available stable funding and required stable funding for the 47NSFR, at the consolidated parent company), and a qualitative discussion of the BHC’s LCR and NSFR results, including, among other 48things, key drivers of the results, composition of high-quality liquid assets and available stable funding, and concentration of funding 49sources. 50 516    The PNC Financial Services Group, Inc. – 2023 Form 10-K