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1The Asset Management Group consists of two primary businesses: PNC Private Bank and Institutional Asset Management.2The PNC Private Bank is focused on being a premier private bank in each of the markets it serves. This business seeks to deliver high 3quality banking, trust, and investment management services to our emerging affluent, high net worth and ultra-high net worth clients 4through a broad array of products and services. 5Institutional Asset Management provides outsourced chief investment officer, custody, cash and fixed income client solutions, and 6retirement plan fiduciary investment services to institutional clients, including corporations, healthcare systems, insurance companies, 7municipalities and non-profits.8Asset Management Group earnings decreased $70 million in 2023 compared with 2022, driven by lower net interest income and 9noninterest income and higher noninterest expense, partially offset by provision recapture.10Net interest income decreased in the comparison due to decline in average deposits as well as narrower interest rate spreads on the 11value of loans, partially offset by higher average loans and wider interest rate spreads on the value of deposits. 12Noninterest income decreased in the comparison driven by lower asset management fees due to the impact of client activity.13Noninterest expense increased in the comparison, reflecting continued investments to support business growth. 14Average loans increased compared with 2022, driven by growth in residential real estate lending, partially offset by a decrease in 15security based lending lines of credit. 16Average deposits decreased in the comparison due to competitive pricing pressures as clients continue to seek higher yielding returns, 17including deploying funds into discretionary client assets under management.18Discretionary client assets under management increased in comparison to the prior year, primarily due to higher spot equity markets as 19of December 31, 2023, partially offset by client activity.20RISK MANAGEMENT21Enterprise Risk Management22We encounter risk as part of the normal course of operating our business. Accordingly, we design our risk governance framework, 23referred to as the ERM Framework, and risk management processes to help manage this risk. We manage risk in light of our risk 24appetite to optimize long-term shareholder value while supporting our employees, customers and communities.25Our ERM Framework is structurally aligned with regulatory enhanced prudential standards and heightened standards promulgated by 26the Federal Reserve and OCC, respectively, which establish minimum requirements for the design and implementation of a risk 27governance framework. This Risk Management section describes our ERM Framework, which consists of seven core components that 28provide executive management and the Board of Directors with an aggregate view of significant risks impacting the organization. The 29seven core components are risk culture, enterprise strategy (including risk appetite, strategic planning, capital planning and stress 30testing), risk governance and oversight, risk identification, risk assessments, risk controls and monitoring, and risk aggregation and 31reporting (see the figure below). The overall Risk Management section of this Item 7 also provides an analysis of the firm’s Capital 32Management and our key areas of risk, which include, but are not limited to Credit, Market, Liquidity and Operational (including 33Compliance and Information Security). Our use of financial derivatives as part of our overall asset and liability risk management 34process is also addressed within this Risk Management section.35We operate within a rapidly evolving regulatory and financial services environment. Accordingly, we are actively focused on the 36timely incorporation of applicable regulatory pronouncements and emerging risks into our ERM Framework.37 3856    The PNC Financial Services Group, Inc. – 2023 Form 10-K