PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1 - ELECTRONIC PRESENTATION SLIDES AND RELEATED MATERIAL

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d8k.htm

The PNC Financial Services Group, Inc.

Morgan Stanley

Financial Services Conference

February 1, 2011

Exhibit 99.1

Cautionary Statement Regarding Forward-Looking

Information and Adjusted Information

This presentation includes “snapshot” information about PNC used by way of illustration. It is not intended as a full business or financial review and

should be viewed in the context of all of the information made available by PNC in its SEC filings. The presentation also contains forward-looking

statements regarding our outlook or expectations relating to PNC’s future business, operations, financial condition, financial performance, capital and

liquidity levels, and asset quality. Forward-looking statements are necessarily subject to numerous assumptions, risks and uncertainties, which

change over time.

The forward-looking statements in this presentation are qualified by the factors affecting forward-looking statements identified in the more detailed

Cautionary Statement included in the Appendix, which is included in the version of the presentation materials posted on our corporate website at

www.pnc.com/investorevents. We provide greater detail regarding some of these factors in our 2009 Form 10-K and 2010 Form 10-Qs, including in

the Risk Factors and Risk Management sections of those reports, and in our subsequent SEC filings (accessible on the SEC’s website at www.sec.gov

and on or through our corporate website at www.pnc.com/secfilings). We have included web addresses here and elsewhere in this presentation as

inactive textual references only. Information on these websites is not part of this presentation.

Future events or circumstances may change our outlook or expectations and may also affect the nature of the assumptions, risks and uncertainties to

which our forward-looking statements are subject. The forward-looking statements in this presentation speak only as of the date of this presentation.

We do not assume any duty and do not undertake to update those statements.

In this presentation, we will sometimes refer to adjusted results to help illustrate the impact of certain types of items, such as our third quarter 2010

gain related to the sale of PNC Global Investment Servicing Inc. (“GIS”), the acceleration of accretion of the remaining issuance discount on our TARP

preferred stock in connection with the first quarter 2010 redemption of such stock, our fourth quarter 2009 gain related to BlackRock’s acquisition of

Barclays Global Investors (the “BLK/BGI gain”), our fourth quarter 2008 conforming provision for credit losses for National City, and integration costs

in the 2010 and 2009 periods. This information supplements our results as reported in accordance with GAAP and should not be viewed in isolation

from, or a substitute for, our GAAP results. We believe that this additional information and the reconciliations we provide may be useful to investors,

analysts, regulators and others as they evaluate the impact of these respective items on our results for the periods presented due to the extent to

which the items are not indicative of our ongoing operations. We may also provide information on pretax pre-provision earnings (total revenue less

noninterest expense), as we believe that pretax pre-provision earnings, a non-GAAP measure, is useful as a tool to help evaluate the ability to provide

for credit costs through operations. Where applicable, we provide GAAP reconciliations for such additional information.

In certain discussions, we may also provide information on yields and margins for all interest-earning assets calculated using net interest income on a

taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on

taxable investments. We believe this adjustment may be useful when comparing yields and margins for all earning assets. We may also use

annualized, proforma, estimated or third party numbers for illustrative or comparative purposes only. These may not reflect actual results.

This presentation may also include discussion of other non-GAAP financial measures, which, to the extent not so qualified therein or in the Appendix,

is qualified by GAAP reconciliation information available on our corporate website at www.pnc.com under “About PNC–Investor Relations.”

Today’s Discussion

PNC has a powerful franchise that achieved record

results in 2010

PNC’s businesses have momentum and are

positioned to capture high quality growth

opportunities

PNC is well positioned to navigate the economic

and regulatory environment

PNC Continues to Build a Great Company.

Footprint covering nearly 1/3 of the U.S.

population

Retail

Corporate & Institutional

A leader in serving middle-market

customers and government entities

One of the largest bank-held asset

managers in the U.S.

Asset Management

Residential Mortgage

One of the nation’s largest mortgage

platforms

PNC’s Powerful Franchise

8th

$264 billion

Assets

U.S. Rank¹

Dec. 31, 2010

6,673

2,470

$183 billion

5th

ATMs

5th

Branches

6th

Deposits

(1) Rankings source: SNL DataSource; Banks headquartered in U.S.

BlackRock

A leader in investment management, risk

management and advisory services worldwide

A Powerful

Franchise

and Record

Results

2010 Strategic Highlights

Exceptional achievements in a challenging environment

6.0%

9.8%²

Tier 1 common ratio

Diluted EPS

Return on avg assets

Net income

As reported

$4.36

$5.74

.87%

1.28%

$2.4 billion

$3.4 billion

2009

2010

Diluted EPS

Return on avg assets

Net income

As adjusted¹

$3.45

$6.07

.72%

1.25%

$2.0 billion

$3.3 billion

2009

2010

Amounts are as of or for the year ended December 31. (1) 2010 adjusted for the after-tax gain on the sale of GIS and the impact of the

accelerated accretion of the remaining issuance discount in connection with the redemption of our TARP preferred stock. 2009 adjusted for the

after-tax BLK/BGI gain. Both periods adjusted for after-tax integration costs. Further information is provided in the Appendix. (2) Estimated.

PNC Is Positioned to Deliver Even Greater Shareholder Value.

A Powerful

Franchise

and Record

Results

Grew our businesses and delivered record net income in 2010

Transitioned to a higher quality balance sheet

Improved our Tier 1 capital ratios to record levels

Implemented the PNC sales and service model

Exceeded our original acquisition-related cost savings target

Actively managed our risk positions toward a moderate profile

A Highly Engaged Team

Reflects PNC’s brand attributes of

ease, confidence and achievement

Awarded to 15 companies worldwide

for extraordinary ability to create an

engaged workplace culture

PNC is a two-time winner and the

only U.S. bank to be recognized

“Gallup Great Workplace Award”

Recipient

PNC

Recognized

for

Focusing

Employee

Engagement

Grow

and Deepen Customer Relationships.

A Powerful

Franchise

and Record

Results

Serving the Needs of Consumers and

Small Businesses

Well-

Positioned

Businesses

with

Momentum

Virtual Wallet

Mortgage

Credit card

Business banking

Retail

Banking

36%

Asset

Management

Group

Distressed

Assets

Portfolio

12%

Over 5.4 million checking relationships

Nearly 1 million online bill payment users

$212 billion in assets under administration

$108 billion in discretionary assets under management

$10+ billion in 2010 residential mortgage originations

Strong client base

PNC’s 2010 revenue contribution

Residential

Mortgage

Banking

BlackRock

and other

Corporate &

Institutional

Banking

32%

Broad array of innovative products

30 million households in footprint

25% of U.S. investable assets

9.5 million small businesses

50+ Division I colleges and universities

Significant Growth Opportunities

Broker-Dealer

Wealth management

Institutional asset

management

$15.2B

As of or for the year ended December 31, 2010.

Strong Momentum –

Retail Banking

4Q09

4Q10

Checking relationships

Online bill payment active customers

Well-

Positioned

Businesses

with

Momentum

5,390

5,465

4Q09

4Q10

780

977

Most of 2010 client growth occurred in

2H10 following conversions

4Q10 checking relationships up 27,000 in a

typically flat seasonal quarter

Customer engagement scores higher in

2H10 than 1H10

Workplace and University Banking channel

client acquisition up 20% in 2H10 vs. 2H09

In 2H10, opened 10 traditional branches

and 14 instore branches, consolidated 12

branches and increased ATMs by 134

Rethinking the Consumer Payments Model

Choice

Transparency

Simplicity, fairness

Integrated delivery

Helping customers achieve

Help me better

manage my money

Make it easy for me

Help me avoid

mistakes

Make it convenient

for me

Reward me

Help me use credit

wisely

Help me save

Well-

Positioned

Businesses

with

Momentum

Connects credit, debit, rewards

Rewards customers for doing more with PNC

Information organized like customers think

Creates best-in-class online / mobile experience across

consumer businesses

Aspiring to Create the Best Payment Account

Plans to deliver a fully-integrated consumer payment experience

Well-

Positioned

Businesses

with

Momentum

Strong Momentum –

Asset Management Group

Channel sales

+60%

2010 vs. 2009

Well-

Positioned

Businesses

with

Momentum

Asset Management Group

Record sales year in 2010, including

60% YoY increase in channel sales, a

strategic focus for PNC

Total assets under administration of

$212 billion, discretionary assets under

management of $108 billion

Net asset flows up $3 billion in 2H10

versus 1H10

Significantly increased frontline talent

with 60% increase in new hires YoY

2010 vs. 2009

New hires

Broad financing expertise

Treasury management

Capital markets

Serving the Needs of Businesses

Broad array of products/capabilities

Boarding new relationships

Focused on cross-sell of existing relationships

Capturing opportunities in newly integrated

markets

Significant Growth Opportunities

Deliver all of PNC to client

Focused on the middle market

Relationship oriented, consultative, high-touch

approach

Manage capital on basis of risk-adjusted returns

Go-to-Market Strategy

Retail

Banking

36%

Asset

Management

Group

Distressed

Assets

Portfolio

12%

PNC’s 2010 revenue contribution

Residential

Mortgage

Banking

BlackRock

and other

Corporate &

Institutional

Banking

32%

Harris Williams

Midland

Healthcare

Well-

Positioned

Businesses

with

Momentum

$15.2B

Revenue for the full year 2010.

Strong Momentum –

C&IB

Well-

Positioned

Businesses

with

Momentum

Corporate & Institutional Banking sales

New names

$250

$500

$750

$1,000

2007

2008

2009

2010

2010 sales¹

up 19% YoY

Post-conversion,

momentum is building

further; sales up 23% in

2H10 vs. 2H09

New names and cross-sell

both contributing

65%

59%

53%

54%

1,150+ new client names were added

in 2010

Represents potential of $250 million

revenue per year at full value

Commercial

Corporate

Asset Based

(1) Excludes Real Estate.

Non-Credit Sales

Credit Sales

53%

35%

12%

Strong Momentum –

C&IB

Well-

Positioned

Businesses

with

Momentum

Opportunity to cross-sell into the

Western Market client base is in

process of being realized

For every dollar of cross-sell

revenue that legacy PNC had,

legacy National City had 60 cents

Opportunity of $300 million

from up-sell penetration

2010 product sales increased YoY

across the entire client base

Treasury Management +4%

Capital Markets +44%

Equipment Finance +63%

Corporate & Institutional Banking sales

% Non-Credit Sales in Western Markets

Wave 1

Wave 2

46%

45%

39%

53%

52%

51%

47%

57%

20%

25%

30%

35%

40%

45%

50%

55%

60%

65%

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

Wave 3

Wave 4

2009

2010

“Waves”

refer to timing of branch and customer conversions.

Significant Business to be Captured

Market-specific C&IB opportunities

.7x

.6x

Tier 1 market baseline average

.4x

Washington D.C., Columbus and

Indianapolis higher than 2009

.5x

Selected tier 1 market as a multiple of baseline

Well-

Positioned

Businesses

with

Momentum

85% of Corporate Banking

relationship managers sold to

a new name in 2010

All relationship managers

cross-sold in 2010

Under-penetrated markets

represent opportunity for new

client acquisition and cross-

selling

Revenue per sales FTE by selected tier 1 market

(6)

(5)

(4)

(3)

(2)

(1)

PNC’s Balance Sheet Is Positioned to

Support Our Clients

PNC Duration

of Equity

(At Quarter End)

Fed Funds

Effective Rate

(At Quarter End)

2007

2008

2009

+3.4%

100 bps increase

(6.0%)¹

100 bps decrease

Effect on NII in 2

year from

gradual interest rate change

over preceding 12 months

Effect on NII in 1

year from

gradual interest rate change

over following 12 months

PNC 4Q10 NII Sensitivity

(2.4%)¹

+0.8%

100 bps decrease

100 bps increase

2010

(1) Given the inherent limitations in certain of these measurement tools and techniques, results become less meaningful as interest rates

approach zero.

Positioned

to Navigate

the

Environment

Transitioning Capital Management

Economic capital

Basel I

Migrating to Basel II

Pre-crisis

Post-crisis

Economic capital being integrated

into Basel II

Basel III regulatory capital

requirements to replace Basel I

Basel II and scenario stress testing

Linkage between capital and parent

company liquidity management

Positioned

to Navigate

the

Environment

Possible Impact of Basel III for PNC

Tier 1 common ratio¹

9.8%

Under

current

rules

10.0%

Capital management policy considerations for PNC

Basel III limits for Tier 1 common and Tier 1

risk-based will become binding regulatory

constraints when final

PNC has revised internal policies to target near-

term compliance (which assumes immediate

implementation)

Cushion amounts beyond Basel III limits will be

a function of multiple inputs

Issues

such

“systemically

important”

have

not

yet been resolved

12.6%

4Q10

Assumes full

Basel III

implementation

and without

benefit of multi-

year phase-in

Proforma

4Q12

Positioned

to Navigate

the

Environment

Ratios are estimated. Proforma assumptions may change. Proforma assumes current common stock dividend of $.10 per share per quarter and no

common stock repurchase. Assumed 2011 net income of $3.0 billion and 2012 net income of $3.4 billion from First Call mean estimate as of January

21, 2011. The First Call mean estimate is used for illustrative purposes only and does not necessarily reflect management’s expectations and may not

reflect actual results. Proforma estimates are subject to change depending on final Basel III rules and final regulatory implementation. Basel III

proforma assumptions are based on rules in current form and also include lower deferred tax assets and subinvestment grade securities at the end of

2012 and the impact of mortgage servicing rights and the after-tax treatment of our BlackRock investment.

Summary

PNC Continues to Build a Great Company.

PNC has a powerful franchise that achieved record

results in 2010

PNC’s businesses have momentum and are

positioned to capture high quality growth

opportunities

PNC is well positioned to navigate the economic

and regulatory environment

Cautionary Statement Regarding Forward-Looking

Information

Appendix

This presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial

review. It should not be viewed in isolation but rather in the context of all of the information made available by PNC in its SEC filings.

We also make statements in this presentation, and we may from time to time make other statements, regarding our outlook or expectations

for earnings, revenues, expenses, capital levels, liquidity levels, asset quality and/or other matters regarding or affecting PNC that are

forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are typically

identified by words such as “believe,” “plan,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “will,” “should,” “project,”

“goal” and other similar words and expressions. Forward-looking statements are subject to numerous assumptions, risks and uncertainties,

which change over time.

Forward-looking statements speak only as of the date they are made. We do not assume any duty and do not undertake to update our

forward-looking statements. Actual results or future events could differ, possibly materially, from those that we anticipated in our forward-

looking statements, and future results could differ materially from our historical performance.

Our forward-looking statements are subject to the following principal risks and uncertainties. We provide greater detail regarding some of

these factors in our 2009 Form 10-K and 2010 Form 10-Qs, including in the Risk Factors and Risk Management sections of those reports, and

in our subsequent SEC filings. Our forward-looking statements may also be subject to other risks and uncertainties, including those that we

may discuss elsewhere in this presentation or in our filings with the SEC, accessible on the SEC’s website at www.sec.gov and on or through

our corporate website at www.pnc.com/secfilings. We have included these web addresses as inactive textual references only. Information on

these websites is not part of this document.

•

Our businesses and financial results are affected by business and economic conditions, both generally and specifically in the principal

markets in which we operate. In particular, our businesses and financial results may be impacted by:

Changes in interest rates and valuations in the debt, equity and other financial markets.

Disruptions in the liquidity and other functioning of financial markets, including such disruptions in the markets for real estate and

other assets commonly securing financial products.

Actions by the Federal Reserve and other government agencies, including those that impact money supply and market interest rates.

Changes in our customers’, suppliers’ and other counterparties’ performance in general and their creditworthiness in particular.

A slowing or failure of the moderate economic recovery that began in mid-2009 and continued throughout 2010.

Continued effects of the aftermath of recessionary conditions and the uneven spread of the positive impacts of the recovery on the

economy in general and our customers in particular, including adverse impact on loan utilization rates as well as delinquencies, defaults

and customer ability to meet credit obligations.

Changes in levels of unemployment.

Changes in customer preferences and behavior, whether as a result of changing business and economic conditions, climate-related

physical changes or legislative and regulatory initiatives, or other factors.

•

Turbulence in significant portions of the US and global financial markets could impact our performance, both directly by affecting our

revenues and the value of our assets and liabilities and indirectly by affecting our counterparties and the economy generally.

Cautionary Statement Regarding Forward-Looking

Information (continued)

Appendix

•We will be impacted by the extensive reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank

Act”) and ongoing reforms impacting the financial institution industry generally. Further, as much of the Dodd-Frank Act will require the

adoption of implementing regulations by a number of different regulatory bodies, the precise nature, extent and timing of many of these

reforms and the impact on us is still uncertain.

•Financial industry restructuring in the current environment could also impact our business and financial performance as a result of changes

in the creditworthiness and performance of our counterparties and by changes in the competitive and regulatory landscape.

•Our results depend on our ability to manage current elevated levels of impaired assets.

•Given current economic and financial market conditions, our forward-looking financial statements are subject to the risk that these

conditions will be substantially different than we are currently expecting. These statements are based on our current view that the moderate

economic recovery that began in mid-2009 and continued throughout 2010 will slowly gather enough momentum in 2011 to lower the

unemployment rate amidst continued low interest rates.

•Legal and regulatory developments could have an impact on our ability to operate our businesses or our financial condition or results of

operations or our competitive position or reputation. Reputational impacts, in turn, could affect matters such as business generation and

retention, our ability to attract and retain management, liquidity, and funding. These legal and regulatory developments could include:

Changes resulting from legislative and regulatory responses to the current economic and financial industry environment.

Other legislative and regulatory reforms, including broad-based restructuring of financial industry regulation (such as that under the

Dodd-Frank Act) as well as changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other aspects

of the financial institution industry.

Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries. In

addition to matters relating to PNC’s business and activities, such matters may also include proceedings, claims, investigations, or

inquiries relating to pre-acquisition business and activities of acquired companies, such as National City.

The results of the regulatory examination and supervision process, including our failure to satisfy the requirements of agreements with

governmental agencies.

Changes in accounting policies and principles.

Changes resulting from legislative and regulatory initiatives relating to climate change that have or may have a negative impact on our

customers’ demand for or use of our products and services in general and their creditworthiness in particular.

Changes to regulations governing bank capital, including as a result of the Dodd-Frank Act and of the so-called “Basel III” initiatives.

•Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including,

where appropriate, through the effective use of third-party insurance, derivatives, and capital management techniques, and by our ability to

meet evolving regulatory capital standards.

•The adequacy of our intellectual property protection, and the extent of any costs associated with obtaining rights in intellectual property

claimed by others, can impact our business and operating results.

•Our ability to anticipate and respond to technological changes can have an impact on our ability to respond to customer needs and to meet

competitive demands.

•Our ability to implement our business initiatives and strategies could affect our financial performance over the next several years.

•Competition can have an impact on customer acquisition, growth and retention, as well as on our credit spreads and product pricing, which

can affect market share, deposits and revenues.

Cautionary Statement Regarding Forward-Looking

Information (continued)

Appendix

•Our business and operating results can also be affected by widespread disasters, terrorist activities or international hostilities, either as a result of

the impact on the economy and capital and other financial markets generally or on us or on our customers, suppliers or other counterparties

specifically.

•Also, risks and uncertainties that could affect the results anticipated in forward-looking statements or from historical performance relating to our

equity interest in BlackRock, Inc. are discussed in more detail in BlackRock’s filings with the SEC, including in the Risk Factors sections of

BlackRock’s reports. BlackRock’s SEC filings are accessible on the SEC’s website and on or through BlackRock’s website at www.blackrock.com. This

material is referenced for informational purposes only and should not be deemed to constitute a part of this document.

We grow our business in part by acquiring from time to time other financial services companies. Acquisitions present us with risks in addition to

those presented by the nature of the business acquired. These include risks and uncertainties related both to the acquisition transactions

themselves and to the integration of the acquired businesses into PNC after closing.

Acquisitions may be substantially more expensive to complete (including unanticipated costs incurred in connection with the integration of the

acquired company) and the anticipated benefits (including anticipated cost savings and strategic gains) may be significantly harder or take longer to

achieve than expected. Acquisitions may involve our entry into new businesses or new geographic or other markets, and these situations also

present risks resulting from our inexperience in those new areas.

As a regulated financial institution, our pursuit of attractive acquisition opportunities could be negatively impacted due to regulatory delays or other

regulatory issues. In addition, regulatory and/or legal issues relating to the pre-acquisition operations of an acquired business may cause

reputational harm to PNC following the acquisition and integration of the acquired business into ours and may result in additional future costs or

regulatory limitations arising as a result of those issues.

Any annualized, proforma, estimated, third party or consensus numbers in this presentation are used for illustrative or comparative purposes only

and may not reflect actual results. Any consensus earnings estimates are calculated based on the earnings projections made by analysts who cover

that company. The analysts’

opinions, estimates or forecasts (and therefore the consensus earnings estimates) are theirs alone, are not those of

PNC or its management, and may not reflect PNC’s or other company’s actual or anticipated results.

Non-GAAP to GAAP Reconcilement

Appendix

In millions except per share data

Adjustments,

pretax

Income taxes

(benefit)¹

Net income

attributable to

common

shareholders

Diluted EPS

from net

income

Average

Assets

Return on

Avg. Assets

Net income, diluted EPS, and return on avg. assets, as reported

$3,397

$3,011

$5.74

$264,902

1.28%

Adjustments:

Gain on sale of GIS

($639)

$311

(328)

(.63)

Integration costs

387

(136)

251

.48

TARP preferred stock accelerated discount accretion²

250

.48

Net income, diluted EPS, and return on avg. assets, as adjusted

$3,320

$3,184

$6.07

$264,902

1.25%

In millions except per share data

Adjustments,

pretax

Income taxes

(benefit)¹

Net income

attributable to

common

shareholders

Diluted EPS

from net

income

Average

Assets

Return on

Avg. Assets

Net income, diluted EPS, and return on avg. assets, as reported

$2,403

$2,003

$4.36

$276,876

0.87%

Adjustments:

Gain on BlackRock/BGI transaction

($1,076)

$389

(687)

(1.51)

Integration costs

421

(147)

274

.60

Net income, diluted EPS, and return on avg. assets, as adjusted

$1,990

$1,590

$3.45

$276,876

0.72%

PNC believes that information adjusted for the impact of certain items may be useful due to the extent to which the items are not indicative of our ongoing operations.

(1)

Calculated

using

marginal

federal

income

tax

rate

35%

and

includes

applicable

income

tax

adjustments.

The

after-tax

gain

the

sale

GIS

and

the

after-tax

gain

on the BlackRock/BGI transaction also reflect the impact of state income taxes.

(2) Represents accelerated accretion of the remaining issuance discount on redemption of the preferred stock in February 2010.

For the year ended December 31, 2010

For the year ended December 31, 2009

Peer Group of Banks

Appendix

The PNC Financial Services Group, Inc.

PNC

BB&T Corporation

BBT

Bank of America Corporation

BAC

Capital One Financial, Inc.

COF

Comerica Inc.

CMA

Fifth Third Bancorp

FITB

JPMorgan Chase

JPM

KeyCorp

KEY

M&T Bank

MTB

Regions Financial Corporation

SunTrust Banks, Inc.

STI

U.S. Bancorp

USB

Wells Fargo & Co.

WFC

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