PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1 - FINANCIAL SUPPLEMENT (UNAUDITED) FOR THIRD QUARTER 2011

Attached files

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d243055d8k.htm
EX-99.2 - ELECTRONIC PRESENTATION SLIDES FOR EARNINGS RELEASE CONFERENCE CALL - PNC FINANCIAL SERVICES GROUP, INC.	d243055dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2011

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2011

(UNAUDITED)


	Page
Consolidated Results:

Income Statement		1
Balance Sheet		2
Capital Ratios		2
Average Balance Sheet		3-4
Net Interest Margin and Selected Income Statement Information		5
Loans, Loans Held for Sale, and Net Unfunded Commitments		6
Allowances for Credit Losses		7
Purchase Accounting Accretion and Accretable Net Interest		8
Nonperforming Assets and Troubled Debt Restructurings		9-10
Accruing Loans Past Due		11

Business Segment Results:

Descriptions		12
Income and Revenue		13
Period-end Employees		13
Retail Banking		14-15
Corporate & Institutional Banking		16
Asset Management Group		17
Residential Mortgage Banking		18
Distressed Assets Portfolio		19
Glossary of Terms		20-23

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 19, 2011. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

BUSINESS

PNC is one of the largest diversified financial services companies in the United States and is headquartered in Pittsburgh, Pennsylvania. PNC has businesses engaged in retail banking, corporate and institutional banking, asset management, and residential mortgage banking, providing many of its products and services nationally and others in PNC’s primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Maryland, Illinois, Indiana, Kentucky, Florida, Virginia, Missouri, Delaware, Washington, D.C., and Wisconsin. PNC also provides certain products and services internationally.

PENDING ACQUISITION OF RBC BANK (USA)

On June 19, 2011, PNC entered into a definitive agreement to acquire RBC Bank (USA), the US retail banking subsidiary of Royal Bank of Canada. RBC Bank (USA) has approximately $25 billion of assets and 424 branches in North Carolina, Florida, Alabama, Georgia, Virginia, and South Carolina. The transaction is expected to add approximately $19 billion of deposits and $16 billion of loans to PNC’s Consolidated Balance Sheet and to close in March 2012, subject to customary closing conditions, including regulatory approvals.

PENDING ACQUISITION OF BRANCHES FROM FLAGSTAR BANK, FSB

On July 26, 2011, PNC signed a definitive agreement to acquire 27 branches in metropolitan Atlanta, Georgia from Flagstar Bank, FSB, a subsidiary of Flagstar Bancorp, Inc., and assume approximately $240 million of deposits. The transaction is expected to close in December 2011, subject to customary closing conditions, including regulatory approvals.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Consolidated Income Statement (Unaudited)


	Three months ended															Nine months ended
In millions, except per share data	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
Interest Income
Loans	$	1,904		$	1,905		$	1,884		$	1,962		$	1,996		$	5,693		$	6,314
Investment securities		511			549			578			602			592			1,638			1,787
Other		115			93			121			107			113			329			378

Total interest income		2,530			2,547			2,583			2,671			2,701			7,660			8,479

Interest Expense
Deposits		167			180			182			205			233			529			758
Borrowed funds		188			217			225			265			253			630			692

Total interest expense		355			397			407			470			486			1,159			1,450

Net interest income		2,175			2,150			2,176			2,201			2,215			6,501			7,029

Noninterest Income
Asset management		287			288			263			303			249			838			751
Consumer services		330			333			311			322			328			974			939
Corporate services (a)		187			228			217			370			183			632			712
Residential mortgage		198			163			195			157			216			556			542
Service charges on deposits		140			131			123			132			164			394			573
Net gains on sales of securities		68			82			37			68			121			187			358
Net other-than-temporary impairments		(35	)		(39	)		(34	)		(44	)		(71	)		(108	)		(281	)
Other (b)		194			266			343			394			193			803			650

Total noninterest income		1,369			1,452			1,455			1,702			1,383			4,276			4,244

Total revenue		3,544			3,602			3,631			3,903			3,598			10,777			11,273
Provision For Credit Losses		261			280			421			442			486			962			2,060
Noninterest Expense
Personnel		949			976			989			1,032			959			2,914			2,874
Occupancy		171			176			193			194			177			540			536
Equipment		159			158			167			176			152			484			492
Marketing		72			63			40			70			81			175			196
Other		789			803			681			868			789			2,273			2,175

Total noninterest expense		2,140			2,176			2,070			2,340			2,158			6,386			6,273

Income from continuing operations before income taxes and noncontrolling interests		1,143			1,146			1,140			1,121			954			3,429			2,940
Income taxes		309			234			308			301			179			851			736

Income from continuing operations before noncontrolling interests		834			912			832			820			775			2,578			2,204
Income from discontinued operations (net of income taxes of zero, zero, zero, zero, $311, zero, and $338) (c)														328						373

Net income		834			912			832			820			1,103			2,578			2,577

Less: Net income (loss) attributable to noncontrolling interests		4			(1	)		(5	)		(3	)		2			(2	)		(12	)
Preferred stock dividends		4			24			4			24			4			32			122
Preferred stock discount accretion and redemptions					1						1			3			1			254

Net income attributable to common shareholders	$	826		$	888		$	833		$	798		$	1,094		$	2,547		$	2,213


Basic Earnings Per Common Share
Continuing operations	$	1.57		$	1.69		$	1.59		$	1.52		$	1.45		$	4.84		$	3.56
Discontinued operations														.63						.72

Net income	$	1.57		$	1.69		$	1.59		$	1.52		$	2.08		$	4.84		$	4.28
Diluted Earnings Per Common Share
Continuing operations	$	1.55		$	1.67		$	1.57		$	1.50		$	1.45		$	4.79		$	3.52
Discontinued operations														.62						.72

Net income	$	1.55		$	1.67		$	1.57		$	1.50		$	2.07		$	4.79		$	4.24
Average Common Shares Outstanding
Basic		524			524			524			524			523			524			515
Diluted		526			527			526			526			526			526			518

Efficiency		60	%		60	%		57	%		60	%		60	%		59	%		56	%

Noninterest income to total revenue		39	%		40	%		40	%		44	%		38	%		40	%		38	%

Effective tax rate (d)		27.0	%		20.4	%		27.0	%		26.9	%		18.8	%		24.8	%		25.0	%

(a)	Includes impairment charges/recoveries related to commercial mortgage servicing rights. Refer to the business segment results for Corporate & Institutional Banking on page 16 for additional information.

(b)

The fourth quarter of 2010 amount includes the $160 million gain ($102 million after taxes) related to our gain on the sale of a portion of our shares of BlackRock stock as part of BlackRock’s November 2010 secondary common stock offering. Our 2010 Annual Report on Form 10-K (2010 Form 10-K) includes additional information regarding this transaction.

(c)

Includes results of operations for PNC Global Investment Servicing Inc. (GIS) through June 30, 2010 and the related after-tax gain on sale. We sold GIS effective July 1, 2010, resulting in a gain of $639 million, or $328 million after taxes, recognized during the third quarter of 2010. The earnings per diluted share impact of the gain on sale was $.62 for the third quarter of 2010. Our 2010 Form 10-K includes additional information regarding our sale of GIS.

(d)

The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax. The lower effective tax rate for the second quarter of 2011 was primarily attributable to a $54 million benefit related to the reversal of deferred tax liabilities. The lower effective tax rate for the third quarter of 2010 was primarily the result of receiving a favorable IRS letter ruling in July 2010 that resolved a prior tax position and resulted in a tax benefit of $89 million.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Consolidated Balance Sheet (Unaudited)


In millions, except par value	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010
Assets
Cash and due from banks (a)	$	3,982		$	3,865		$	3,389		$	3,297		$	3,724
Federal funds sold and resale agreements (b)		1,806			2,357			2,240			3,704			2,094
Trading securities		2,960			2,075			2,254			1,826			955
Interest-earning deposits with banks (a)		2,773			4,508			1,359			1,610			415
Loans held for sale (b)		2,491			2,679			2,980			3,492			3,275
Investment securities (a)		62,105			59,414			60,992			64,262			63,461
Loans (a) (b)		154,543			150,319			149,387			150,595			150,127
Allowance for loan and lease losses (a)		(4,507	)		(4,627	)		(4,759	)		(4,887	)		(5,231	)

Net loans		150,036			145,692			144,628			145,708			144,896
Goodwill		8,207			8,182			8,146			8,149			8,166
Other intangible assets		1,949			2,412			2,618			2,604			2,352
Equity investments (a) (c)		9,915			9,776			9,595			9,220			10,137
Other (a) (b)		23,246			22,157			21,177			20,412			20,658

Total assets	$	269,470		$	263,117		$	259,378		$	264,284		$	260,133


Liabilities
Deposits
Noninterest-bearing	$	55,180		$	52,683		$	48,707		$	50,019		$	46,065
Interest-bearing		132,552			129,208			133,283			133,371			133,118

Total deposits		187,732			181,891			181,990			183,390			179,183
Borrowed funds
Federal funds purchased and repurchase agreements		3,105			3,812			4,079			4,144			4,661
Federal Home Loan Bank borrowings		5,015			5,022			5,020			6,043			7,106
Bank notes and senior debt		11,990			10,526			11,324			12,904			13,508
Subordinated debt		9,564			9,358			9,310			9,842			10,023
Other (a)		5,428			6,458			5,263			6,555			4,465

Total borrowed funds		35,102			35,176			34,996			39,488			39,763
Allowance for unfunded loan commitments and letters of credit		217			202			204			188			193
Accrued expenses (a)		3,587			3,502			3,078			3,188			3,134
Other (a)		5,590			7,473			5,393			5,192			5,194

Total liabilities		232,228			228,244			225,661			231,446			227,467


Equity
Preferred stock (d)
Common stock ($5 par value, authorized 800 shares, issued 536 shares)		2,682			2,682			2,682			2,682			2,680
Capital surplus - preferred stock		1,636			648			647			647			646
Capital surplus - common stock and other		12,054			12,025			12,056			12,057			12,008
Retained earnings		17,985			17,344			16,640			15,859			15,114
Accumulated other comprehensive income (loss)		397			69			(309	)		(431	)		146
Common stock held in treasury at cost: 10 shares		(535	)		(533	)		(584	)		(572	)		(552	)

Total shareholders’ equity		34,219			32,235			31,132			30,242			30,042
Noncontrolling interests		3,023			2,638			2,585			2,596			2,624

Total equity		37,242			34,873			33,717			32,838			32,666

Total liabilities and equity	$	269,470		$	263,117		$	259,378		$	264,284		$	260,133

Capital Ratios
Tier 1 common (e)		10.5	%		10.5	%		10.3	%		9.8	%		9.6	%
Tier 1 risk-based (e)		13.1			12.8			12.6			12.1			11.9
Total risk-based (e)		16.5			16.2			16.2			15.6			15.6
Leverage (e)		11.4			11.0			10.6			10.2			9.9
Common shareholders’ equity to assets		12.1			12.0			11.8			11.2			11.3

(a)	Amounts include consolidated variable interest entities. Our first and second quarter 2011 Form 10-Qs included, and third quarter 2011 Form 10-Q will include, additional information regarding these items.

(b)	Amounts include assets for which PNC has elected the fair value option. Our first and second quarter 2011 Form 10-Qs included, and third quarter 2011 Form 10-Q will include, additional information regarding these items.

(c)	Amounts include our equity interest in BlackRock.

(d)	Par value less than $.5 million at each date.

(e)	The ratio as of September 30, 2011 is estimated.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended															Nine months ended
In millions	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	22,822		$	25,993		$	29,134		$	28,457		$	22,916		$	25,960		$	21,745
Non-agency		7,135			7,618			8,057			8,495			8,917			7,600			9,491
Commercial mortgage-backed		3,623			3,278			3,298			3,325			3,100			3,401			3,798
Asset-backed		3,817			3,185			2,757			2,824			2,436			3,257			2,043
US Treasury and government agencies		3,699			4,505			5,682			6,250			7,758			4,622			7,987
State and municipal		1,929			2,234			2,081			1,732			1,323			2,081			1,348
Other debt		3,113			3,578			3,994			3,618			3,092			3,558			2,502
Corporate stocks and other		449			376			443			418			472			422			458

Total securities available for sale		46,587			50,767			55,446			55,119			50,014			50,901			49,372
Securities held to maturity
Residential mortgage-backed		3,840			1,130												1,671
Commercial mortgage-backed		4,520			4,215			4,239			4,311			4,130			4,326			3,509
Asset-backed		1,863			2,276			2,463			2,849			3,435			2,198			3,598
State and municipal		389			8			8			8			8			136			8
Other		489			150			1			2			1			215			55

Total securities held to maturity		11,101			7,779			6,711			7,170			7,574			8,546			7,170

Total investment securities		57,688			58,546			62,157			62,289			57,588			59,447			56,542
Loans
Commercial		59,951			57,932			56,300			54,065			53,502			58,074			54,431
Commercial real estate		16,347			16,779			17,545			18,555			19,847			16,886			21,068
Equipment lease financing		6,150			6,189			6,307			6,375			6,514			6,215			6,243
Consumer		54,632			54,014			54,460			54,741			55,036			54,370			55,107
Residential real estate		14,717			15,001			15,518			16,145			16,766			15,075			18,237

Total loans		151,797			149,915			150,130			149,881			151,665			150,620			155,086
Loans held for sale		2,497			2,719			3,193			3,331			3,021			2,801			2,716
Federal funds sold and resale agreements		2,030			2,321			2,813			2,130			1,602			2,385			1,821
Other		10,060			7,241			5,802			6,164			9,801			7,717			8,906

Total interest-earning assets		224,072			220,742			224,095			223,795			223,677			222,970			225,071
Noninterest-earning assets:
Allowance for loan and lease losses		(4,592	)		(4,728	)		(4,835	)		(5,039	)		(5,290	)		(4,717	)		(5,180	)
Cash and due from banks		3,544			3,433			3,393			3,516			3,436			3,457			3,587
Other		43,827			41,659			39,901			41,286			42,756			41,809			41,877

Total assets	$	266,851		$	261,106		$	262,554		$	263,558		$	264,579		$	263,519		$	265,355

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

Average Consolidated Balance Sheet (Unaudited) (Continued) (a)


	Three months ended										Nine months ended
In millions	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010		September 30 2011		September 30 2010
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	59,009	$	58,594	$	58,556	$	58,436	$	58,016	$	58,721	$	58,206
Demand		27,654		26,912		26,313		25,388		25,078		26,965		24,903
Savings		8,305		8,222		7,656		7,221		7,092		8,063		6,932
Retail certificates of deposit		33,607		35,098		36,509		39,201		41,724		35,061		44,190
Other time		361		410		515		598		740		428		885
Time deposits in foreign offices		1,830		1,840		3,452		2,799		2,650		2,368		2,781

Total interest-bearing deposits		130,766		131,076		133,001		133,643		135,300		131,606		137,897
Borrowed funds
Federal funds purchased and repurchase agreements		3,685		4,138		6,376		4,552		4,179		4,723		4,227
Federal Home Loan Bank borrowings		5,015		5,021		5,088		6,168		7,680		5,041		8,612
Bank notes and senior debt		10,480		11,132		11,745		13,073		12,799		11,115		12,694
Subordinated debt		8,982		8,981		9,353		9,490		9,569		9,104		9,700
Other		5,736		5,713		5,847		4,947		4,886		5,765		5,604

Total borrowed funds		33,898		34,985		38,409		38,230		39,113		35,748		40,837

Total interest-bearing liabilities		164,664		166,061		171,410		171,873		174,413		167,354		178,734
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		53,300		49,720		47,755		47,998		45,306		50,279		44,092
Allowance for unfunded loan commitments and letters of credit		202		204		188		193		218		198		255
Accrued expenses and other liabilities		12,478		10,747		9,771		10,506		12,687		11,007		11,186
Equity		36,207		34,374		33,430		32,988		31,955		34,681		31,088

Total liabilities and equity	$	266,851	$	261,106	$	262,554	$	263,558	$	264,579	$	263,519	$	265,355

(a)	Calculated using average daily balances.

Supplemental Average Balance Sheet Information (Unaudited)

Deposits and Common Shareholders’ Equity


Interest-bearing deposits	$	130,766	$	131,076	$	133,001	$	133,643	$	135,300	$	131,606	$	137,897
Noninterest-bearing deposits		53,300		49,720		47,755		47,998		45,306		50,279		44,092


Total deposits	$	184,066	$	180,796	$	180,756	$	181,641	$	180,606	$	181,885	$	181,989

Transaction deposits	$	139,963	$	135,226	$	132,624	$	131,822	$	128,400	$	135,965	$	127,201

Common shareholders’ equity	$	32,124	$	31,101	$	30,193	$	29,729	$	28,755	$	31,147	$	26,810


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Nine months ended
	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
Average yields/rates
Yield on interest-earning assets
Loans		5.00	%		5.11	%		5.09	%		5.21	%		5.24	%		5.06	%		5.44	%
Investment securities		3.59			3.80			3.76			3.91			4.15			3.72			4.25
Other		3.14			3.04			4.16			3.61			3.15			3.41			3.76
Total yield on interest-earning assets		4.52			4.64			4.67			4.76			4.82			4.61			5.04
Rate on interest-bearing liabilities
Deposits		.51			.55			.55			.61			.68			.54			.73
Borrowed funds		2.20			2.46			2.35			2.74			2.56			2.34			2.25
Total rate on interest-bearing liabilities		.86			.95			.95			1.08			1.10			.92			1.08

Interest rate spread		3.66			3.69			3.72			3.68			3.72			3.69			3.96
Impact of noninterest-bearing sources		.23			.24			.22			.25			.24			.23			.22

Net interest margin (b)		3.89	%		3.93	%		3.94	%		3.93	%		3.96	%		3.92	%		4.18	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all earning assets in calculating net interest margins, in this table we use 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. This adjustment is not permitted under generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, and September 30, 2010 were $27 million, $25 million, $24 million, $22 million, and $22 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2011 and September 30, 2010 were $76 million and $59 million, respectively.

(b)	A reconciliation of net interest margin to provision-adjusted net interest margin follows. We believe that provision-adjusted net interest margin, a non-GAAP measure, is useful as a tool to help evaluate the amount of credit related risk associated with interest-earning assets.


	Three months ended															Nine months ended
	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
Net interest margin, as reported		3.89	%		3.93	%		3.94	%		3.93	%		3.96	%		3.92	%		4.18	%
Less: provision adjustment		.46			.51			.76			.78			.86			.58			1.22

Provision-adjusted net interest margin		3.43	%		3.42	%		3.18	%		3.15	%		3.10	%		3.34	%		2.96	%

The adjustment represents annualized provision for credit losses divided by average interest-earning assets.

Selected Consolidated Income Statement Information (Unaudited)


	Three months ended								Nine months ended
In millions	September 30 2011	June 30 2011		March 31 2011	December 31 2010		September 30 2010		September 30 2011		September 30 2010
Noninterest Income
Gain on BlackRock transaction					$	160
Income from Continuing Operations before Income Taxes
Integration costs					$	78	$	96			$	309
Income Taxes
Benefit related to reversal of deferred tax liabilities (c)		$	54						$	54
Benefit related to a favorable IRS letter ruling (c)							$	89			$	89
Income from Discontinued Operations, Net of Income Taxes
Gain on sale of GIS							$	328			$	328
Net Income Attributable to Common Shareholders
TARP preferred stock accelerated discount accretion (d)											$	250

(c)	Represents tax benefit recognized within income taxes on our Consolidated Income Statement.

(d)	Represents accelerated accretion of the remaining issuance discount on redemption of the TARP preferred stock in February 2010. This resulted in a $.48 reduction to diluted earnings per share for the nine months ended September 30, 2010.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Details of Loans (Unaudited)


In millions	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010
Commercial
Retail/wholesale trade	$	11,287	$	10,952	$	10,665	$	9,901	$	9,752
Manufacturing		10,980		10,426		9,805		9,334		9,519
Service providers		9,326		8,984		8,690		8,866		8,747
Real estate related (a)		8,073		7,515		7,533		7,500		7,398
Financial services		5,676		5,206		5,034		4,573		3,773
Health care		4,668		4,115		3,839		3,481		3,169
Other industries		12,240		11,422		11,036		11,522		10,830

Total commercial		62,250		58,620		56,602		55,177		53,188

Commercial real estate
Real estate projects		10,936		11,086		11,581		12,211		13,021
Commercial mortgage		5,477		5,233		5,552		5,723		6,070

Total commercial real estate		16,413		16,319		17,133		17,934		19,091

Equipment lease financing		6,186		6,210		6,215		6,393		6,408

TOTAL COMMERCIAL LENDING		84,849		81,149		79,950		79,504		78,687

Consumer
Home equity
Lines of credit		22,677		22,838		23,001		23,473		23,770
Installment		10,486		10,541		10,655		10,753		10,815
Residential real estate
Residential mortgage		14,022		14,302		14,602		15,292		15,708
Residential construction		633		680		731		707		776
Credit card		3,785		3,754		3,707		3,920		3,883
Other consumer
Education		9,154		8,816		9,041		9,196		8,819
Automobile		4,447		3,705		3,156		2,983		2,863
Other		4,490		4,534		4,544		4,767		4,806

TOTAL CONSUMER LENDING		69,694		69,170		69,437		71,091		71,440

Total loans (b)	$	154,543	$	150,319	$	149,387	$	150,595	$	150,127

(a) Includes loans to customers in the real estate and construction industries.
(b) Includes purchased impaired loans:	$	6,927	$	7,256	$	7,522	$	7,780	$	8,130

Details of Loans Held for Sale (Unaudited)


In millions	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010
Commercial mortgage	$	1,081	$	1,226	$	1,047	$	1,207	$	1,381
Residential mortgage		1,353		1,351		1,840		1,890		1,786
Other		57		102		93		395		108

Total	$	2,491	$	2,679	$	2,980	$	3,492	$	3,275

Net Unfunded Commitments (Unaudited)


In millions	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010
Net unfunded commitments	$	103,236	$	99,791	$	96,781	$	95,805	$	97,147


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit (Unaudited)

Change in Allowance for Loan and Lease Losses


Three months ended - in millions	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010
Beginning balance	$	4,627		$	4,759		$	4,887		$	5,231		$	5,336
Charge-offs:
Commercial		(193	)		(185	)		(179	)		(331	)		(310	)
Commercial real estate		(92	)		(124	)		(158	)		(181	)		(102	)
Equipment lease financing		(3	)		(11	)		(14	)		(29	)		(12	)
Residential real estate		(20	)		(43	)		(58	)		(124	)		(47	)
Home equity		(123	)		(112	)		(140	)		(124	)		(160	)
Credit card		(51	)		(60	)		(74	)		(73	)		(67	)
Other consumer		(42	)		(49	)		(51	)		(62	)		(58	)

Total charge-offs		(524	)		(584	)		(674	)		(924	)		(756	)
Recoveries:
Commercial		78			98			80			71			80
Commercial real estate		25			26			14			20			14
Equipment lease financing		13			15			9			18			13
Residential real estate		8			1			1			(1	)		7
Home equity		16			11			10			9			10
Credit card		6			6			6			5			5
Other consumer		13			13			21			11			13

Total recoveries		159			170			141			133			142
Net (charge-offs) recoveries:
Commercial		(115	)		(87	)		(99	)		(260	)		(230	)
Commercial real estate		(67	)		(98	)		(144	)		(161	)		(88	)
Equipment lease financing		10			4			(5	)		(11	)		1
Residential real estate		(12	)		(42	)		(57	)		(125	)		(40	)
Home equity		(107	)		(101	)		(130	)		(115	)		(150	)
Credit card		(45	)		(54	)		(68	)		(68	)		(62	)
Other consumer		(29	)		(36	)		(30	)		(51	)		(45	)

Total net charge-offs		(365	)		(414	)		(533	)		(791	)		(614	)
Provision for credit losses		261			280			421			442			486
Other		(1	)											(2	)
Net change in allowance for unfunded loan commitments and letters of credit		(15	)		2			(16	)		5			25

Ending balance	$	4,507		$	4,627		$	4,759		$	4,887		$	5,231

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.95	%		1.11	%		1.44	%		2.09	%		1.61	%
Allowance for loan and lease losses to total loans		2.92			3.08			3.19			3.25			3.48
Commercial lending net charge-offs	$	(172	)	$	(181	)	$	(248	)	$	(432	)	$	(317	)
Consumer lending net charge-offs		(193	)		(233	)		(285	)		(359	)		(297	)

Total net charge-offs	$	(365	)	$	(414	)	$	(533	)	$	(791	)	$	(614	)

Net charge-offs to average loans
Commercial lending		.83	%		.90	%		1.25	%		2.17	%		1.57	%
Consumer lending		1.10			1.35			1.65			2.01			1.64

Change in Allowance for Unfunded Loan Commitments and Letters of Credit


Three months ended - in millions	September 30 2011		June 30 2011			March 31 2011		December 31 2010			September 30 2010
Beginning balance	$	202	$	204		$	188	$	193		$	218
Net change in allowance for unfunded loan commitments and letters of credit		15		(2	)		16		(5	)		(25	)

Ending balance	$	217	$	202		$	204	$	188		$	193


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Purchase Accounting Accretion and Accretable Net Interest (Unaudited)

Total Purchase Accounting Accretion


	Three months ended
In millions	September 30 2011			June 30 2011			September 30 2010
Non-impaired loans	$	68		$	72		$	70
Impaired loans
Scheduled accretion		166			186			187
Excess cash recoveries		72			40			111
Reversal of contractual interest on impaired loans		(99	)		(88	)		(138	)

Total impaired loans		139			138			160
Securities		15			14			15
Deposits		90			91			122
Borrowings		(20	)		(25	)		(42	)

Total	$	292		$	290		$	325

Total Remaining Purchase Accounting Accretion


In billions	September 30 2011			June 30 2011			December 31 2010
Non-impaired loans	$	1.0		$	1.1		$	1.2
Impaired loans		2.3			2.3			2.2

Total loans (gross)		3.3			3.4			3.4
Securities		.2			.2			.1
Deposits		.2			.3			.5
Borrowings		(1.0	)		(1.0	)		(1.1	)

Total	$	2.7		$	2.9		$	2.9

Accretable Net Interest - Purchased Impaired Loans


In billions				In billions
July 1, 2011	$	2.3		January 1, 2011	$	2.2
Accretion		(.1	)	Accretion		(.5	)
Excess cash recoveries		(.1	)	Excess cash recoveries		(.2	)
Net reclass to accretable difference and other activity		.2		Net reclass to accretable difference and other activity		.8

September 30, 2011	$	2.3		September 30, 2011	$	2.3

Valuation of Purchased Impaired Loans


	September 30, 2011						June 30, 2011						December 31, 2010
Dollars in billions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Unpaid principal balance	$	1.1					$	1.4					$	1.8
Purchased impaired mark		(.2	)					(.3	)					(.4	)

Recorded investment		.9						1.1						1.4
Allowance for loan losses		(.2	)					(.3	)					(.3	)

Net investment		.7			64	%		.8			57	%		1.1			61	%

Consumer and residential mortgage loans:
Unpaid principal balance		6.8						7.1						7.9
Purchased impaired mark		(.8	)					(.9	)					(1.5	)

Recorded investment		6.0						6.2						6.4
Allowance for loan losses		(.8	)					(.7	)					(.6	)

Net investment		5.2			76	%		5.5			77	%		5.8			73	%


Total purchased impaired loans:
Unpaid principal balance		7.9						8.5						9.7
Purchased impaired mark		(1.0	)					(1.2	)					(1.9	)

Recorded investment		6.9						7.3						7.8
Allowance for loan losses		(1.0	)					(1.0	)					(.9	)

Net investment	$	5.9			75	%	$	6.3			74	%	$	6.9			71	%


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


In millions	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010
Nonperforming loans, including TDRs (a)
Commercial
Retail/wholesale trade	$	117		$	148		$	180		$	197		$	219
Manufacturing		149			160			213			250			266
Service providers		198			189			214			218			230
Real estate related (b)		256			261			253			233			288
Financial services		31			18			27			16			36
Health care		39			38			46			50			59
Other industries		204			233			270			289			432

Total commercial		994			1,047			1,203			1,253			1,530

Commercial real estate
Real estate projects		1,115			1,289			1,468			1,422			1,562
Commercial mortgage		310			378			416			413			427

Total commercial real estate		1,425			1,667			1,884			1,835			1,989

Equipment lease financing		30			35			41			77			104

TOTAL COMMERCIAL LENDING		2,449			2,749			3,128			3,165			3,623

Consumer (c)
Home equity		484			421			464			448			406
Residential real estate
Residential mortgage (d)		676			630			641			764			727
Residential construction		46			36			46			54			42
Credit card (e)		7			8
Other consumer		30			26			29			35			38

TOTAL CONSUMER LENDING		1,243			1,121			1,180			1,301			1,213

Total nonperforming loans (f)		3,692			3,870			4,308			4,466			4,836

OREO and foreclosed assets
Other real estate owned (OREO) (g)		553			546			569			589			573
Foreclosed and other assets		53			65			63			68			97

OREO and foreclosed assets		606			611			632			657			670

Total nonperforming assets	$	4,298		$	4,481		$	4,940		$	5,123		$	5,506

Nonperforming loans to total loans		2.39	%		2.57	%		2.88	%		2.97	%		3.22	%
Nonperforming assets to total loans, OREO and foreclosed assets		2.77			2.97			3.29			3.39			3.65
Nonperforming assets to total assets		1.59			1.70			1.90			1.94			2.12
Allowance for loan and lease losses to nonperforming loans (f), (h)		122			120			110			109			108

(a)	See analysis of troubled debt restructurings (TDRs) on page 10.

(b)	Includes loans related to customers in the real estate and construction industries.

(c)	Excludes most consumer loans and lines of credit, not secured by residential real estate, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.

(d)	Effective in 2011, nonperforming residential mortgage excludes loans of $68 million accounted for under the fair value option as of September 30, 2011, and $85 million as of June 30, 2011 and March 31, 2011, respectively. Amounts for prior periods presented were not material.

(e)	Effective in the second quarter 2011, the commercial nonaccrual policy was applied to certain small business credit card balances. This change resulted in loans placed on nonaccrual status when they become 90 days or more past due, rather than being excluded and charged off at 180 days past due.

(f)	Nonperforming loans do not include purchased impaired loans or loans held for sale.

(g)

Other real estate owned excludes $256 million, $273 million, $233 million, $178 million, and $163 million at September 30, 2011, June 30, 2011, March 31, 2011, December 31, 2010, and September 30, 2010, respectively, related to serviced loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

(h)	The allowance for loan and lease losses includes impairment reserves attributable to purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Change in Nonperforming Assets


In millions	January 1, 2011- September 30, 2011			July 1, 2011- September 30, 2011			April 1, 2011- June 30, 2011			January 1, 2011- March 31, 2011
Beginning balance	$	5,123		$	4,481		$	4,940		$	5,123
New nonperforming assets		2,771			925			843			1,003
Charge-offs and valuation adjustments		(999	)		(286	)		(323	)		(390	)
Principal activity, including paydowns and payoffs		(1,454	)		(471	)		(603	)		(380	)
Asset sales and transfers to loans held for sale		(461	)		(155	)		(128	)		(178	)
Returned to performing status		(682	)		(196	)		(248	)		(238	)

Ending balance	$	4,298		$	4,298		$	4,481		$	4,940

Largest Individual Nonperforming Assets at September 30, 2011 (a)


In millions
Ranking	Outstandings		Industry
1	$	30	Accommodation and Food Services
2		25	Construction
3		24	Real Estate Rental and Leasing
4		23	Real Estate Rental and Leasing
5		23	Real Estate Rental and Leasing
6		21	Real Estate Rental and Leasing
7		20	Accommodation and Food Services
8		20	Real Estate Rental and Leasing
9		17	Real Estate Rental and Leasing
10		16	Real Estate Rental and Leasing

Total	$	219

As a percent of total nonperforming assets 5%

(a)	Amounts shown are not net of related allowance for loan and lease losses, if applicable.

Troubled Debt Restructurings by Type


In millions	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010
Commercial	$	396	$	305	$	260	$	236	$	108
Consumer		1,751		1,614		1,575		1,422		1,226

Total	$	2,147	$	1,919	$	1,835	$	1,658	$	1,334

Nonperforming		1,062		845		882		784		595
Accrual (a)		780		752		639		543		424
Credit card (b)		305		322		314		331		315

Total	$	2,147	$	1,919	$	1,835	$	1,658	$	1,334

Loans whose contractual terms have been restructured in a manner which grants a concession to a borrower experiencing financial difficulties are considered troubled debt restructurings (TDRs). TDRs typically result from our loss mitigation activities and could include rate reductions, principal forgiveness, forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Government insured or guaranteed, held for sale loans, purchased impaired loans and loans accounted for under the fair value option are not classified as TDRs.

(a)	Accruing loans have demonstrated a period of at least six months of performance under the modified terms and are excluded from nonperforming loans.

(b)

Credit cards and certain small business and consumer credit agreements whose terms have been modified and are TDRs. However, since our policy is to exempt these loans from being placed on nonaccrual status as permitted by regulatory guidance as generally these loans are directly charged off in the period that they become 180 days past due, these loans are excluded from nonperforming loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Accruing Loans Past Due (Unaudited)

Accruing Loans Past Due 30 to 59 Days (a)


	Amount								Percent of Total Outstandings
Dollars in millions	Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	163	$	149	$	208	$	251		.26	%		.25	%		.37	%		.45	%
Commercial real estate		84		98		315		128		.51			.60			1.84			.71
Equipment lease financing		9		9		72		37		.15			.14			1.16			.58
Residential real estate
Non government insured		198		201		205		226		1.35			1.34			1.34			1.41
Government insured		121		123		122		105		.83			.82			.80			.66
Home equity		177		141		146		159		.53			.42			.43			.47
Credit card		39		39		41		46		1.03			1.04			1.11			1.17
Other consumer
Non government insured		55		51		60		95		.30			.30			.36			.56
Government insured		161		134		123		165		.89			.79			.73			.97

Total	$	1,007	$	945	$	1,292	$	1,212		.65			.63			.86			.81

Accruing Loans Past Due 60 to 89 Days (a)

	Amount								Percent of Total Outstandings
Dollars in millions	Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	54	$	75	$	56	$	92		.09	%		.13	%		.10	%		.17	%
Commercial real estate		25		71		65		62		.15			.44			.38			.35
Equipment lease financing		4		2		5		2		.06			.03			.08			.03
Residential real estate
Non government insured		81		68		91		107		.55			.45			.59			.67
Government insured		110		119		131		118		.75			.80			.85			.74
Home equity		101		91		96		91		.30			.27			.29			.27
Credit card		26		23		25		32		.69			.61			.67			.82
Other consumer
Non government insured		22		20		25		32		.12			.12			.15			.19
Government insured		121		84		82		69		.67			.49			.49			.41

Total	$	544	$	553	$	576	$	605		.35			.37			.39			.40

Accruing Loans Past Due 90 Days or More (a)

	Amount								Percent of Total Outstandings
Dollars in millions	Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	34	$	42	$	49	$	59		.05	%		.08	%		.09	%		.11	%
Commercial real estate		13		12		6		43		.08			.07			.04			.24
Equipment lease financing		2		1				1		.03			.02						.02
Residential real estate
Non government insured		137		145		174		160		.93			.97			1.13			1.00
Government insured		1,998		1,926		1,903		1,961		13.63			12.85			12.41			12.26
Home equity		206		182		165		174		.62			.55			.49			.51
Credit card		45		45		65		77		1.19			1.20			1.75			1.96
Other consumer
Non government insured		23		21		27		28		.13			.12			.16			.16
Government insured		310		272		256		206		1.71			1.60			1.53			1.22

Total	$	2,768	$	2,646	$	2,645	$	2,709		1.79			1.76			1.77			1.80

(a)	Excludes purchased impaired loans.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Business Segment Descriptions (Unaudited)

Retail Banking provides deposit, lending, brokerage, investment management, and cash management services to consumer and small business customers within our primary geographic markets. Our customers are serviced through our branch network, call centers and online banking. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Maryland, Illinois, Indiana, Kentucky, Florida, Virginia, Missouri, Delaware, Washington, D.C., and Wisconsin.

Corporate & Institutional Banking provides lending, treasury management, and capital markets-related products and services to mid-sized corporations, government and not-for-profit entities, and selectively to large corporations. Lending products include secured and unsecured loans, letters of credit and equipment leases. Treasury management services include cash and investment management, receivables management, disbursement services, funds transfer services, information reporting, and global trade services. Capital markets-related products and services include foreign exchange, derivatives, loan syndications, mergers and acquisitions advisory and related services to middle-market companies, our multi-seller conduit, securities underwriting, and securities sales and trading. Corporate & Institutional Banking also provides commercial loan servicing, and real estate advisory and technology solutions for the commercial real estate finance industry. Corporate & Institutional Banking provides products and services generally within our primary geographic markets, with certain products and services offered nationally and internationally.

Asset Management Group includes personal wealth management for high net worth and ultra high net worth clients and institutional asset management. Wealth management products and services include financial planning, customized investment management, private banking, tailored credit solutions and trust management and administration for individuals and their families. Institutional asset management provides investment management, custody, and retirement planning services. The institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments located primarily in our geographic footprint.

Residential Mortgage Banking directly originates primarily first lien residential mortgage loans on a nationwide basis with a significant presence within the retail banking footprint, and also originates loans through majority owned affiliates. Mortgage loans represent loans collateralized by one-to-four-family residential real estate. These loans are typically underwritten to government agency and/or third party standards, and sold, servicing retained, to secondary mortgage conduits Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation (FHLMC), Federal Home Loan Banks and third-party investors, or are securitized and issued under the Government National Mortgage Association (GNMA) program. The mortgage servicing operation performs all functions related to servicing mortgage loans - primarily those in first lien position - for various investors and for loans owned by PNC. Certain loans originated through majority owned affiliates are sold to others.

Distressed Assets Portfolio includes commercial residential development loans, cross-border leases, consumer brokered home equity loans, retail mortgages, non-prime mortgages, and residential construction loans. These loans require special servicing and management oversight given current market conditions. We obtained the majority of these loans through acquisitions of other companies.

BlackRock is the largest publicly traded investment management firm in the world. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, multi-asset class, alternative and cash management separate accounts and funds, including iShares^®, the global product leader in exchange-traded funds. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services globally to a broad base of clients. At September 30, 2011, our economic interest in BlackRock was 21%.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Summary of Business Segment Income and Revenue (Unaudited) (a) (b)


	Three months ended													Nine months ended
In millions	September 30 2011		June 30 2011		March 31 2011			December 31 2010			September 30 2010			September 30 2011		September 30 2010
Income (Loss)
Retail Banking	$	33	$	44	$	(18	)	$	44		$	(4	)	$	59	$	100
Corporate & Institutional Banking		419		448		432			543			435			1,299		1,251
Asset Management Group		33		48		43			28			43			124		109
Residential Mortgage Banking		22		55		71			3			97			148		266
Distressed Assets Portfolio		93		84		25			(71	)		20			202		14
Other, including BlackRock (b) (c) (d)		234		233		279			273			184			746		464

Income from continuing operations before noncontrolling interests	$	834	$	912	$	832		$	820		$	775		$	2,578	$	2,204

Revenue
Retail Banking	$	1,283	$	1,271	$	1,247		$	1,278		$	1,360		$	3,801	$	4,108
Corporate & Institutional Banking		1,120		1,180		1,098			1,376			1,083			3,398		3,574
Asset Management Group		217		226		222			224			216			665		660
Residential Mortgage Banking		252		219		258			228			284			729		764
Distressed Assets Portfolio		238		270		245			200			248			753		936
Other, including BlackRock (b) (c) (d)		434		436		561			597			407			1,431		1,231

Revenue from continuing operations	$	3,544	$	3,602	$	3,631		$	3,903		$	3,598		$	10,777	$	11,273

(a)

Our business information is presented based on our management accounting practices and our management structure. We refine our methodologies from time to time as our management accounting practices are enhanced and our business and management structure change. Certain prior period amounts have been reclassified to reflect current methodologies and our current business and management structure. We have revised certain capital allocations among our business segments, including amounts for prior periods. PNC’s total capital did not change as a result of these adjustments for any periods presented. Amounts are presented on a continuing operations before noncontrolling interests basis and therefore exclude the earnings and revenue attributable to GIS and the related after-tax gain on sale of GIS, which closed July 1, 2010.

(b)	We consider BlackRock to be a separate reportable business segment but have combined its results with Other for this presentation. Our third quarter 2011 Form 10-Q will include additional information regarding BlackRock.

(c)

Includes earnings and gains or losses related to PNC’s equity interest in BlackRock and residual activities that do not meet the criteria for disclosure as a separate reportable business, such as gains or losses related to BlackRock transactions, integration costs, asset and liability management activities including net securities gains or losses, other-than-temporary impairment of investment securities and certain trading activities, exited businesses, equity management activities, alternative investments, intercompany eliminations, most corporate overhead, and differences between business segment performance reporting and financial statement reporting (GAAP).

(d)	Amount for the fourth quarter of 2010 includes the $160 million gain ($102 million after taxes) related to our gain on the sale of a portion of our shares of BlackRock stock as part of BlackRock’s November 2010 secondary common stock offering.


	September 30 2011		June 30 2011		March 31 2011		December 31 2010		September 30 2010
Period-end Employees
Full-time employees
Retail Banking		21,058		21,044		20,932		20,925		21,203
Corporate & Institutional Banking		4,340		3,864		3,761		3,756		3,660
Asset Management Group		3,072		3,053		3,042		3,001		2,975
Residential Mortgage Banking		3,646		3,688		3,682		3,539		3,339
Distressed Assets Portfolio		114		121		127		152		155
Other
Operations & Technology		8,807		8,724		8,644		8,582		8,568
Staff Services and Other		4,639		5,021		4,998		4,862		4,720

Total Other		13,446		13,745		13,642		13,444		13,288

Total full-time employees		45,676		45,515		45,186		44,817		44,620

Retail Banking part-time employees		5,103		5,112		4,981		4,965		4,799
Other part-time employees		913		1,216		959		987		974

Total part-time employees		6,016		6,328		5,940		5,952		5,773

Total		51,692		51,843		51,126		50,769		50,393

The period end employee statistics for the businesses reflect staff directly employed by the respective business, and exclude operations, technology and staff services employees that may perform services for the business.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Retail Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
INCOME STATEMENT
Net interest income	$	820		$	810		$	818		$	826		$	861		$	2,448		$	2,609
Noninterest income
Service charges on deposits		133			125			117			125			157			375			556
Brokerage		48			52			53			52			53			153			161
Consumer services		251			253			228			239			242			732			673
Other		31			31			31			36			47			93			109

Total noninterest income		463			461			429			452			499			1,353			1,499

Total revenue		1,283			1,271			1,247			1,278			1,360			3,801			4,108
Provision for credit losses		206			180			276			157			327			662			946
Noninterest expense		1,025			1,021			1,001			1,048			1,039			3,047			3,008

Pretax earnings (loss)		52			70			(30	)		73			(6	)		92			154
Income taxes (benefit)		19			26			(12	)		29			(2	)		33			54

Earnings (loss)	$	33		$	44		$	(18	)	$	44		$	(4	)	$	59		$	100

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	25,756		$	25,906		$	26,064		$	26,189		$	26,289		$	25,907		$	26,538
Indirect auto		3,308			2,756			2,400			2,318			2,170			2,825			2,024
Indirect other		1,432			1,519			1,612			1,695			1,792			1,520			1,936
Education		9,124			8,881			9,101			8,758			8,817			9,036			8,409
Credit cards		3,733			3,680			3,731			3,827			3,901			3,715			3,975
Other		1,874			1,809			1,823			1,840			1,805			1,835			1,792

Total consumer		45,227			44,551			44,731			44,627			44,774			44,838			44,674
Commercial and commercial real estate		10,482			10,636			10,786			10,897			11,086			10,634			11,271
Floor plan		1,304			1,473			1,572			1,482			1,267			1,449			1,287
Residential mortgage		1,150			1,196			1,287			1,389			1,528			1,210			1,669

Total loans		58,163			57,856			58,376			58,395			58,655			58,131			58,901
Goodwill and other intangible assets		5,748			5,750			5,769			5,803			5,837			5,756			5,881
Other assets		2,247			2,151			2,525			2,180			2,511			2,306			3,000

Total assets	$	66,158		$	65,757		$	66,670		$	66,378		$	67,003		$	66,193		$	67,782

Deposits
Noninterest-bearing demand	$	18,081		$	18,443		$	18,103		$	17,723		$	17,144		$	18,209		$	17,055
Interest-bearing demand		22,381			21,869			20,921			20,140			19,767			21,729			19,654
Money market		41,191			40,776			40,387			40,362			40,148			40,788			40,045

Total transaction deposits		81,653			81,088			79,411			78,225			77,059			80,726			76,754
Savings		8,218			8,140			7,573			7,155			7,029			7,979			6,864
Certificates of deposit		32,664			34,060			35,365			37,949			40,378			34,020			42,749

Total deposits		122,535			123,288			122,349			123,329			124,466			122,725			126,367
Other liabilities		786			765			1,147			1,087			1,444			898			1,583
Capital		8,223			8,246			8,048			8,323			8,582			8,173			8,478

Total liabilities and equity	$	131,544		$	132,299		$	131,544		$	132,739		$	134,492		$	131,796		$	136,428

PERFORMANCE RATIOS
Return on average capital		2	%		2	%		(1	)%		2	%		—	%		1	%		2	%
Return on average assets		.20			.27			(.11	)		.26			(.02	)		.12			.20
Noninterest income to total revenue		36			36			34			35			37			36			36
Efficiency		80			80			80			82			76			80			73

(a)	See note (a) on page 13.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Retail Banking (Unaudited) (Continued)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
OTHER INFORMATION (a)
Credit-related statistics:
Commercial nonperforming assets	$	330		$	301		$	301		$	297		$	262
Consumer nonperforming assets		454			403			409			422			400

Total nonperforming assets	$	784		$	704		$	710		$	719		$	662

Impaired loans (b)	$	786		$	826		$	869		$	895		$	939

Commercial lending net charge-offs	$	39		$	65		$	67		$	49		$	85		$	171		$	281
Credit card lending net charge-offs		45			54			68			68			63			167			248
Consumer lending (excluding credit card) net charge-offs		98			104			122			108			99			324			316

Total net charge-offs	$	182		$	223		$	257		$	225		$	247		$	662		$	845

Commercial lending annualized net charge-off ratio		1.31	%		2.15	%		2.20	%		1.57	%		2.73	%		1.89	%		2.99	%
Credit card lending annualized net charge-off ratio		4.78	%		5.89	%		7.39	%		7.05	%		6.41	%		6.01	%		8.34	%
Consumer lending (excluding credit card) annualized net charge-off ratio		.91	%		.99	%		1.17	%		1.02	%		.93	%		1.02	%		1.00	%

Total annualized net charge-off ratio		1.24	%		1.55	%		1.79	%		1.53	%		1.67	%		1.52	%		1.92	%

Home equity portfolio credit statistics: (c)
% of first lien positions (d)		38	%		37	%		36	%		36	%		35	%
Weighted average loan-to-value ratios (d)		72	%		73	%		73	%		73	%		73	%
Weighted average FICO scores (e)		743			743			731			726			725
Annualized net charge-off ratio		1.02	%		1.00	%		1.31	%		.97	%		.90	%		1.11	%		.87	%
Loans 30 - 59 days past due		.58	%		.48	%		.47	%		.49	%		.49	%
Loans 60 - 89 days past due		.32	%		.30	%		.31	%		.30	%		.30	%
Loans 90 days past due		1.12	%		1.02	%		.99	%		1.02	%		.94	%

Other statistics:
ATMs		6,754			6,734			6,660			6,673			6,626
Branches (f)		2,469			2,459			2,446			2,470			2,461

Customer-related statistics: (in thousands)
Retail Banking checking relationships		5,722			5,627			5,521			5,465			5,438
Retail online banking active customers		3,479			3,354			3,226			3,057			2,968
Retail online bill payment active customers		1,079			1,045			1,029			977			942

Brokerage statistics:
Financial consultants (g)		703			712			700			694			713
Full service brokerage offices		37			37			34			34			40
Brokerage account assets (billions)	$	33		$	35		$	35		$	34		$	33

(a)	Presented as of September 30, except for net charge-offs and annualized net charge-off ratios, which are for the three months ended and nine months ended, respectively.

(b)	Recorded investment of purchased impaired loans related to acquisitions.

(c)	Home equity lien position, loan to value, FICO and delinquency statistics are based on borrower contractual amounts and include purchased impaired loans.

(d)	Includes loans from acquired portfolios for which lien position and loan-to-value information was limited. Additionally, excludes brokered home equity loans.

(e)	Represents the most recent FICO scores we have on file.

(f)	Excludes certain satellite branches that provide limited products and/or services.

(g)	Financial consultants provide services in full service brokerage offices and traditional bank branches.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
INCOME STATEMENT
Net interest income	$	866		$	848		$	799		$	917		$	846		$	2,513		$	2,670
Noninterest income
Corporate service fees		153			197			187			334			148			537			627
Other		101			135			112			125			89			348			277

Noninterest income		254			332			299			459			237			885			904

Total revenue		1,120			1,180			1,098			1,376			1,083			3,398			3,574
Provision for credit losses (benefit)		11			31			(30	)		18			(48	)		12			285
Noninterest expense		448			443			445			506			447			1,336			1,315

Pretax earnings		661			706			683			852			684			2,050			1,974
Income taxes		242			258			251			309			249			751			723

Earnings	$	419		$	448		$	432		$	543		$	435		$	1,299		$	1,251

AVERAGE BALANCE SHEET
Loans
Commercial	$	36,353		$	34,673		$	33,194		$	31,895		$	32,196		$	34,771		$	33,088
Commercial real estate		13,670			13,839			14,347			15,035			15,897			13,949			16,948
Commercial - real estate related		3,741			3,494			3,463			3,254			3,021			3,553			3,016
Asset-based lending		8,472			7,961			7,370			6,893			6,362			7,928			6,124
Equipment lease financing		5,457			5,483			5,540			5,605			5,750			5,499			5,447

Total loans		67,693			65,450			63,914			62,682			63,226			65,700			64,623
Goodwill and other intangible assets		3,391			3,456			3,484			3,449			3,553			3,444			3,669
Loans held for sale		1,186			1,229			1,341			1,644			1,427			1,251			1,415
Other assets		9,629			8,877			8,241			8,890			8,724			8,920			8,128

Total assets	$	81,899		$	79,012		$	76,980		$	76,665		$	76,930		$	79,315		$	77,835

Deposits
Noninterest-bearing demand	$	32,631		$	29,504		$	27,843		$	27,544		$	25,259		$	30,010		$	23,759
Money market		13,522			12,643			12,131			11,880			12,105			12,770			12,246
Other		5,781			5,149			6,057			6,632			6,833			5,662			7,097

Total deposits		51,934			47,296			46,031			46,056			44,197			48,442			43,102
Other liabilities		14,094			12,871			12,205			13,155			12,936			13,064			11,541
Capital		7,992			7,928			7,858			8,073			8,487			7,927			8,762

Total liabilities and equity	$	74,020		$	68,095		$	66,094		$	67,284		$	65,620		$	69,433		$	63,405

PERFORMANCE RATIOS
Return on average capital		21	%		23	%		22	%		27	%		20	%		22	%		19	%
Return on average assets		2.03			2.27			2.28			2.81			2.24			2.19			2.15
Noninterest income to total revenue		23			28			27			33			22			26			25
Efficiency		40			38			41			37			41			39			37

COMMERCIAL MORTGAGE SERVICING
PORTFOLIO (in billions)
Beginning of period	$	268		$	266		$	266		$	263		$	265		$	266		$	287
Acquisitions/additions		8			13			10			12			8			31			23
Repayments/transfers		(9	)		(11	)		(10	)		(9	)		(10	)		(30	)		(47	)

End of period	$	267		$	268		$	266		$	266		$	263		$	267		$	263

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management	$	298		$	292		$	301		$	305		$	320		$	891		$	915
Capital Markets	$	158		$	165		$	139		$	205		$	116		$	462		$	401
Commercial mortgage loans held for sale (c)	$	23		$	23		$	29		$	9		$	24		$	75		$	58
Commercial mortgage loan servicing income, net of amortization (d)		32			29			47			48			41			108			244
Commercial mortgage servicing rights (impairment)/recovery (e)		(82	)		(40	)		(35	)		59			(81	)		(157	)		(40	)

Total commercial mortgage banking activities	$	(27	)	$	12		$	41		$	116		$	(16	)	$	26		$	262
Total loans (f)	$	70,307		$	66,142		$	64,368		$	63,695		$	62,477
Net carrying amount of commercial mortgage servicing rights (f)	$	482		$	592		$	645		$	665		$	616
Credit-related statistics:
Nonperforming assets (f)	$	2,033		$	2,260		$	2,574		$	2,594		$	3,064
Impaired loans (f) (g)	$	472		$	603		$	659		$	714		$	890
Net charge-offs	$	94		$	85		$	153		$	349		$	211		$	332		$	725

(a)	See note (a) on page 13.

(b)	Represents consolidated PNC amounts.

(c)	Includes valuations on commercial mortgage loans held for sale and related commitments, derivative valuations, origination fees, gains on sale of loans held for sale and net interest income on loans held for sale.

(d)	Includes net interest income and noninterest income from loan servicing and ancillary services, net of commercial mortgage servicing rights amortization. Commercial mortgage servicing rights (impairment)/recovery is shown separately.

(e)	See note (a) on page 1.

(f)	Presented as of period end.

(g)	Recorded investment of purchased impaired loans related to acquisitions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Asset Management Group (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
INCOME STATEMENT
Net interest income	$	58		$	59		$	60		$	65		$	66		$	177		$	191
Noninterest income		159			167			162			159			150			488			469

Total revenue		217			226			222			224			216			665			660
Provision for credit losses (benefit)		(10	)		(18	)		(6	)		9			(12	)		(34	)		11
Noninterest expense		175			168			160			171			160			503			476

Pretax earnings		52			76			68			44			68			196			173
Income taxes		19			28			25			16			25			72			64

Earnings	$	33		$	48		$	43		$	28		$	43		$	124		$	109

AVERAGE BALANCE SHEET
Loans
Consumer	$	4,134		$	4,068		$	4,054		$	4,083		$	4,020		$	4,086		$	4,005
Commercial and commercial real estate		1,223			1,289			1,503			1,426			1,447			1,337			1,437
Residential mortgage		705			711			715			723			802			710			893

Total loans		6,062			6,068			6,272			6,232			6,269			6,133			6,335
Goodwill and other intangible assets		356			365			374			384			394			365			404
Other assets		246			220			271			271			236			246			238

Total assets	$	6,664		$	6,653		$	6,917		$	6,887		$	6,899		$	6,744		$	6,977

Deposits
Noninterest-bearing demand	$	1,307		$	1,061		$	1,161		$	1,432		$	1,364		$	1,177		$	1,288
Interest-bearing demand		2,315			2,309			2,291			2,033			1,869			2,305			1,768
Money market		3,591			3,548			3,591			3,393			3,258			3,577			3,245

Total transaction deposits		7,213			6,918			7,043			6,858			6,491			7,059			6,301
CDs/IRAs/savings deposits		620			645			676			694			714			646			767

Total deposits		7,833			7,563			7,719			7,552			7,205			7,705			7,068
Other liabilities		76			71			69			74			81			73			94
Capital		345			353			344			380			413			347			410

Total liabilities and equity	$	8,254		$	7,987		$	8,132		$	8,006		$	7,699		$	8,125		$	7,572

PERFORMANCE RATIOS
Return on average capital		38	%		55	%		51	%		29	%		41	%		48	%		36	%
Return on average assets		1.96			2.89			2.52			1.61			2.47			2.46			2.09
Noninterest income to total revenue		73			74			73			71			69			73			71
Efficiency		81			74			72			76			74			76			72

OTHER INFORMATION
Total nonperforming assets (b)	$	69		$	69		$	74		$	90		$	102
Impaired loans (b) (c)	$	134		$	135		$	143		$	146		$	155
Net charge-offs (recoveries)	$	5		$	—		$	(11	)	$	21		$	1		$	(6	)	$	21

ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	95		$	102		$	102		$	99		$	95
Institutional		107			117			117			113			111

Total	$	202		$	219		$	219		$	212		$	206

Asset Type
Equity	$	104		$	121		$	120		$	115		$	107
Fixed income		66			65			64			63			66
Liquidity/Other		32			33			35			34			33

Total	$	202		$	219		$	219		$	212		$	206

Discretionary assets under management
Personal	$	65		$	70		$	71		$	69		$	67
Institutional		38			39			39			39			38

Total	$	103		$	109		$	110		$	108		$	105

Asset Type
Equity	$	49		$	56		$	57		$	55		$	51
Fixed income		38			37			36			36			38
Liquidity/Other		16			16			17			17			16

Total	$	103		$	109		$	110		$	108		$	105

Nondiscretionary assets under administration
Personal	$	30		$	32		$	31		$	30		$	28
Institutional		69			78			78			74			73

Total	$	99		$	110		$	109		$	104		$	101

Asset Type
Equity	$	55		$	65		$	63		$	60		$	56
Fixed income		28			28			28			27			28
Liquidity/Other		16			17			18			17			17

Total	$	99		$	110		$	109		$	104		$	101

(a)	See note (a) on page 13.

(b)	As of period end.

(c)	Recorded investment of purchased impaired loans related to acquisitions.

(d)	Excludes brokerage account assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
INCOME STATEMENT
Net interest income	$	46		$	47		$	56		$	60		$	52		$	149		$	196
Noninterest income
Loan servicing revenue
Servicing fees		60			63			50			46			61			173			196
Net MSR hedging gains		69			52			64			47			86			185			198
Loan sales revenue		72			52			84			66			77			208			165
Other		5			5			4			9			8			14			9

Total noninterest income		206			172			202			168			232			580			568

Total revenue		252			219			258			228			284			729			764
Provision for credit losses (benefit)		15			(8	)		8			8			21			15			(3	)
Noninterest expense		203			140			137			215			119			480			348

Pretax earnings		34			87			113			5			144			234			419
Income taxes		12			32			42			2			47			86			153

Earnings	$	22		$	55		$	71		$	3		$	97		$	148		$	266

AVERAGE BALANCE SHEET
Portfolio loans	$	2,777		$	2,703		$	2,734		$	2,667		$	2,572		$	2,738		$	2,643
Loans held for sale		1,301			1,464			1,802			1,731			1,427			1,520			1,184
Mortgage servicing rights (MSR)		851			1,027			1,048			863			863			974			1,069
Other assets		5,948			5,628			6,035			5,008			4,302			5,871			4,007

Total assets	$	10,877		$	10,822		$	11,619		$	10,269		$	9,164		$	11,103		$	8,903

Deposits	$	1,785		$	1,569		$	1,587		$	2,089		$	2,108		$	1,648		$	2,927
Borrowings and other liabilities		3,788			3,253			4,144			3,444			2,740			3,726			2,614
Capital		694			667			729			745			767			697			978

Total liabilities and equity	$	6,267		$	5,489		$	6,460		$	6,278		$	5,615		$	6,071		$	6,519

PERFORMANCE RATIOS
Return on average capital		13	%		33	%		39	%		2	%		50	%		28	%		36	%
Return on average assets		.80			2.04			2.48			.12			4.20			1.78			3.99
Noninterest income to total revenue		82			79			78			74			82			80			74
Efficiency		81			64			53			94			42			66			46

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO (in billions)
Beginning of period	$	125		$	127		$	125		$	131		$	137		$	125		$	145
Acquisitions								5									5
Additions		2			4			3			3			3			9			7
Repayments/transfers		(6	)		(6	)		(6	)		(9	)		(9	)		(18	)		(21	)

End of period	$	121		$	125		$	127		$	125		$	131		$	121		$	131

Servicing portfolio statistics: (b)
Fixed rate		90	%		90	%		90	%		89	%		89	%
Adjustable rate/balloon		10	%		10	%		10	%		11	%		11	%
Weighted average interest rate		5.44	%		5.49	%		5.53	%		5.62	%		5.69	%
MSR capitalized value (in billions)	$	.7		$	1.0		$	1.1		$	1.0		$	.8
MSR capitalization value (in basis points)		56			80			88			82			60
Weighted average servicing fee (in basis points)		29			29			30			30			30

OTHER INFORMATION
Loan origination volume (in billions)	$	2.6		$	2.6		$	3.2		$	3.5		$	2.7		$	8.4		$	7.0
Percentage of originations represented by:
Agency and government programs		100	%		100	%		100	%		99	%		99	%		100	%		99	%
Refinance volume		69	%		68	%		85	%		83	%		76	%		75	%		69	%
Total nonperforming assets (b)	$	77		$	65		$	78		$	172		$	164
Impaired loans (b) (c)	$	132		$	141		$	158		$	161		$	173

(a)	See note (a) on page 13.

(b)	As of period end.

(c)	Recorded investment of purchased impaired loans related to acquisitions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Distressed Assets Portfolio (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2011			June 30 2011			March 31 2011			December 31 2010			September 30 2010			September 30 2011			September 30 2010
INCOME STATEMENT
Net interest income	$	228		$	257		$	236		$	256		$	283		$	721		$	973
Noninterest income		10			13			9			(56	)		(35	)		32			(37	)

Total revenue		238			270			245			200			248			753			936
Provision for credit losses		45			81			152			231			176			278			745
Noninterest expense		47			56			53			81			46			156			169

Pretax earnings (loss)		146			133			40			(112	)		26			319			22
Income taxes (benefit)		53			49			15			(41	)		6			117			8

Earnings (loss)	$	93		$	84		$	25		$	(71	)	$	20		$	202		$	14

AVERAGE BALANCE SHEET
Commercial lending:
Commercial/Commercial real estate	$	1,143		$	1,363		$	1,582		$	1,840		$	2,088		$	1,360		$	2,374
Lease financing		691			697			757			759			753			715			788

Total commercial lending		1,834			2,060			2,339			2,599			2,841			2,075			3,162

Consumer lending:
Consumer		5,167			5,301			5,559			5,903			6,144			5,341			6,354
Residential real estate		6,116			6,265			6,332			6,845			7,205			6,237			7,835

Total consumer lending		11,283			11,566			11,891			12,748			13,349			11,578			14,189

Total portfolio loans		13,117			13,626			14,230			15,347			16,190			13,653			17,351
Other assets (b)		(402	)		(256	)		(109	)		15			555			(261	)		895

Total assets	$	12,715		$	13,370		$	14,121		$	15,362		$	16,745		$	13,392		$	18,246

Deposits and other liabilities	$	76		$	137		$	159		$	128		$	104		$	119		$	167
Capital		1,273			1,422			1,371			1,476			1,605			1,355			1,669

Total liabilities and equity	$	1,349		$	1,559		$	1,530		$	1,604		$	1,709		$	1,474		$	1,836

PERFORMANCE RATIOS
Return on average capital		29	%		24	%		7	%		(19	)%		5	%		20	%		1	%
Return on average assets		2.90			2.52			.72			(1.83	)		.47			2.02			.10

OTHER INFORMATION
Nonperforming assets (c)	$	1,064		$	1,087		$	1,208		$	1,242		$	1,218
Impaired loans (c) (d)	$	5,390		$	5,543		$	5,685		$	5,879		$	6,001
Net charge-offs	$	74		$	96		$	123		$	183		$	107		$	293		$	494
Annualized net charge-off ratio		2.24	%		2.83	%		3.51	%		4.73	%		2.62	%		2.87	%		3.81	%

LOANS (c)
Commercial lending:
Commercial/Commercial real estate	$	1,077		$	1,222		$	1,474		$	1,684		$	1,911
Lease financing		701			701			695			764			757

Total commercial lending		1,778			1,923			2,169			2,448			2,668

Consumer lending:
Consumer		5,066			5,240			5,381			5,769			6,011
Residential real estate		6,065			6,250			6,325			6,564			7,014

Total consumer lending		11,131			11,490			11,706			12,333			13,025

Total portfolio loans	$	12,909		$	13,413		$	13,875		$	14,781		$	15,693

(a)	See note (a) on page 13.

(b)	Other assets were negative in each 2011 quarter due to the allowance for loan and lease losses.

(c)	As of period end.

(d)	Recorded investment of purchased impaired loans related to acquisitions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Glossary of Terms

Accretable net interest (Accretable yield) - The excess of cash flows expected to be collected on a purchased impaired loan over the carrying value of the loan. The accretable net interest is recognized into interest income over the remaining life of the loan using the constant effective yield method.

Adjusted average total assets - Primarily comprised of total average quarterly (or annual) assets plus (less) unrealized losses (gains) on investment securities, less goodwill and certain other intangible assets (net of eligible deferred taxes).

Annualized - Adjusted to reflect a full year of activity.

Assets under management - Assets over which we have sole or shared investment authority for our customers/clients. We do not include these assets on our Consolidated Balance Sheet.

Basis point - One hundredth of a percentage point.

Carrying value of purchased impaired loans - The net value on the balance sheet which represents the recorded investment less any valuation allowance.

Cash recoveries - Cash recoveries used in the context of purchased impaired loans represent cash payments from customers that exceeded the recorded investment of the designated impaired loan.

Charge-off - Process of removing a loan or portion of a loan from our balance sheet because it is considered uncollectible. We also record a charge-off when a loan is transferred from portfolio holdings to held for sale by reducing the loan carrying amount to the fair value of the loan, if fair value is less than carrying amount.

Common shareholders’ equity to total assets - Common shareholders’ equity divided by total assets. Common shareholders’ equity equals total shareholders’ equity less the liquidation value of preferred stock.

Credit spread - The difference in yield between debt issues of similar maturity. The excess of yield attributable to credit spread is often used as a measure of relative creditworthiness, with a reduction in the credit spread reflecting an improvement in the borrower’s perceived creditworthiness.

Derivatives - Financial contracts whose value is derived from changes in publicly traded securities, interest rates, currency exchange rates or market indices. Derivatives cover a wide assortment of financial contracts, including but not limited to forward contracts, futures, options and swaps.

Duration of equity - An estimate of the rate sensitivity of our economic value of equity. A negative duration of equity is associated with asset sensitivity (i.e., positioned for rising interest rates), while a positive value implies liability sensitivity (i.e., positioned for declining interest rates). For example, if the duration of equity is +1.5 years, the economic value of equity declines by 1.5% for each 100 basis point increase in interest rates.

Earning assets - Assets that generate income, which include: Federal funds sold; resale agreements; trading securities; interest-earning deposits with banks; loans held for sale; loans; investment securities; and certain other assets.

Economic capital - Represents the amount of resources that a business or business segment should hold to guard against potentially large losses that could cause insolvency. It is based on a measurement of economic risk, as opposed to risk as defined by regulatory bodies. The economic capital measurement process involves converting a risk distribution to the capital that is required to support the risk, consistent with our target credit rating. As such, economic risk serves as a “common currency” of risk that allows us to compare different risks on a similar basis.

Effective duration - A measurement, expressed in years, that, when multiplied by a change in interest rates, would approximate the percentage change in value of on- and off- balance sheet positions.

Efficiency - Noninterest expense divided by total revenue.

Fair value - The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

FICO score - A credit bureau-based industry standard score created by Fair Isaac Co. which predicts the likelihood of borrower default. We use FICO scores both in underwriting and assessing credit risk in our consumer lending portfolio. Lower FICO scores indicate likely higher risk of default, while higher FICO scores indicate likely lower risk of default. FICO scores are updated on a periodic basis.

Funds transfer pricing - A management accounting methodology designed to recognize the net interest income effects of sources and uses of funds provided by the assets and liabilities of a business segment. We assign these balances LIBOR-based funding rates at origination that represent the interest cost for us to raise/invest funds with similar maturity and repricing structures.

Futures and forward contracts - Contracts in which the buyer agrees to purchase and the seller agrees to deliver a specific financial instrument at a predetermined price or yield. May be settled either in cash or by delivery of the underlying financial instrument.

GAAP - Accounting principles generally accepted in the United States of America.

Investment securities - Collectively, securities available for sale and securities held to maturity.

Leverage ratio - Tier 1 risk-based capital divided by adjusted average total assets.

LIBOR - Acronym for London InterBank Offered Rate. LIBOR is the average interest rate charged when banks in the London wholesale money market (or interbank market) borrow unsecured funds from each other. LIBOR rates are used as a benchmark for interest rates on a global basis.

Loan-to-value ratio (LTV) - A calculation of a loan’s collateral coverage that is used both in underwriting and assessing credit risk in our lending portfolio. LTV is the sum total of loan obligations secured by collateral divided by the market value of that same collateral. Market values of the collateral are based on an independent valuation of the collateral. For example, an LTV of less than 90% is better secured and has less credit risk than an LTV of greater than or equal to 90%. Our real estate market values are updated on an annual basis but may be updated more frequently for select loans.

Loss Given Default (LGD) - An estimate of recovery based on collateral type, collateral value, loan exposure, or the guarantor(s) quality and guaranty type (full or partial). Each loan has its own LGD. The LGD risk rating measures the percentage of exposure of a specific credit obligation that we expect to lose if default occurs. LGD is net of recovery, through either liquidation of collateral or deficiency judgments rendered from foreclosure or bankruptcy proceedings. The LGD rating is updated with the same frequency as the borrower’s PD rating, and should be done more frequently than the PD if the collateral values and amounts change often.

Net interest income from loans and deposits - A management accounting assessment, using funds transfer pricing methodology, of the net interest contribution from loans and deposits.

Net interest margin - Annualized taxable-equivalent net interest income divided by average earning assets.

Nonaccretable difference - Contractually required payments receivable on a purchased impaired loan in excess of the cash flows expected to be collected.

Nondiscretionary assets under administration - Assets we hold for our customers/clients in a non-discretionary, custodial capacity. We do not include these assets on our Consolidated Balance Sheet.

Nonperforming assets - Nonperforming assets include non-accrual loans, certain non-accrual troubled debt restructured loans, OREO, foreclosed and other assets. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans for which we do not accrue interest income. Nonperforming loans include loans to commercial, commercial real estate, equipment lease financing, consumer (including loans and lines of credit secured by residential real estate), and residential real estate (including mortgages and construction) customers as well as certain non-accrual troubled debt restructured loans. Nonperforming loans do not include loans held for sale or OREO and foreclosed assets. Nonperforming loans do not include purchased impaired loans as we are currently accreting interest income over the expected life of the loans.

Notional amount - A number of currency units, shares, or other units specified in a derivative contract.

Operating leverage - The period to period dollar or percentage change in total revenue (GAAP basis) less the dollar or percentage change in noninterest expense. A positive variance indicates that revenue growth exceeded expense growth (i.e., positive operating leverage) while a negative variance implies expense growth exceeded revenue growth (i.e., negative operating leverage).


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 22

Other real estate owned (OREO) - Foreclosed assets taken in settlement of troubled loans through surrender or foreclosure. Foreclosed assets include all assets received in full or partial satisfaction of a loan and include real and personal property, equity interests in corporations, partnerships, joint ventures, and beneficial interests in trusts. Premises that are no longer used in operations may also be included in real estate owned.

Other-than-temporary impairment (OTTI) - When the fair value of a security is less than its amortized cost basis, an assessment is performed to determine whether the impairment is other-than-temporary. If we intend to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis less any current-period credit loss, an other-than-temporary impairment is considered to have occurred. In such cases, an other-than-temporary impairment is recognized in earnings equal to the entire difference between the investment’s amortized cost basis and its fair value at the balance sheet date. Further, if we do not expect to recover the entire amortized cost of the security, an other-than-temporary impairment is considered to have occurred. However for debt securities, if we do not intend to sell the security and it is not more likely than not that we will be required to sell the security before its recovery, the other-than-temporary loss is separated into (a) the amount representing the credit loss, and (b) the amount related to all other factors. The other-than-temporary impairment related to credit losses is recognized in earnings while the amount related to all other factors is recognized in other comprehensive income, net of tax.

Parent company liquidity coverage - Liquid assets divided by funding obligations within a two year period.

Pretax earnings - Income from continuing operations before income taxes and noncontrolling interests.

Pretax, pre-provision earnings from continuing operations - Total revenue less noninterest expense, both from continuing operations.

Probability of Default (PD) - An internal risk rating that indicates the likelihood that a credit obligor will enter into default status.

Provision-adjusted net interest margin - Net interest margin less the ratio of the annualized provision for credit losses to average interest-earning assets.

Purchase accounting accretion - Accretion of the discounts and premiums on acquired assets and liabilities. The purchase accounting accretion is recognized in net interest income over the weighted average life of the financial instruments using the constant effective yield method.

Purchased impaired loans - Acquired loans determined to be credit impaired under FASB ASC 310-30 (AICPA SOP 03-3). Loans are determined to be impaired if there is evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected.

Recorded investment - The initial investment of a purchased impaired loan plus interest accretion and less any cash payments and writedowns to date. The recorded investment excludes any valuation allowance which is included in our allowance for loan and lease losses.

Recovery - Cash proceeds received on a loan that we had previously charged off. We credit the amount received to the allowance for loan and lease losses.

Residential development loans - Project-specific loans to commercial customers for the construction or development of residential real estate including land, single family homes, condominiums and other residential properties. This would exclude loans to commercial customers where proceeds are for general corporate purposes whether or not such facilities are secured.

Residential mortgage servicing rights hedge gains/(losses), net - We have elected to measure acquired or originated residential mortgage servicing rights (MSRs) at fair value under GAAP. We employ a risk management strategy designed to protect the economic value of MSRs from changes in interest rates. This strategy utilizes securities and a portfolio of derivative instruments to hedge changes in the fair value of MSRs arising from changes in interest rates. These financial instruments are expected to have changes in fair value which are negatively correlated to the change in fair value of the MSR portfolio. Net MSR hedge gains/(losses) represent the change in the fair value of MSRs, exclusive of changes due to time decay and payoffs, combined with the change in the fair value of the associated securities and derivative instruments.

Return on average assets - Annualized net income divided by average assets.

Return on average capital - Annualized net income divided by average capital.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 23

Return on average common shareholders’ equity - Annualized net income less preferred stock dividends, including preferred stock discount accretion and redemptions, divided by average common shareholders’ equity.

Risk-weighted assets - Computed by the assignment of specific risk-weights (as defined by the Board of Governors of the Federal Reserve System) to assets and off-balance sheet instruments.

Securitization - The process of legally transforming financial assets into securities.

Servicing rights - An intangible asset or liability created by an obligation to service assets for others. Typical servicing rights include the right to receive a fee for collecting and forwarding payments on loans and related taxes and insurance premiums held in escrow.

Taxable-equivalent interest - The interest income earned on certain assets is completely or partially exempt from Federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all interest-earning assets, we use interest income on a taxable-equivalent basis in calculating average yields and net interest margins by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on other taxable investments. This adjustment is not permitted under GAAP on the Consolidated Income Statement.

Tier 1 common capital - Tier 1 risk-based capital, less preferred equity, less trust preferred capital securities, and less noncontrolling interests.

Tier 1 common capital ratio - Tier 1 common capital divided by period-end risk-weighted assets.

Tier 1 risk-based capital - Total shareholders’ equity, plus trust preferred capital securities, plus certain noncontrolling interests that are held by others; less goodwill and certain other intangible assets (net of eligible deferred taxes relating to taxable and nontaxable combinations), less equity investments in nonfinancial companies less ineligible servicing assets and less net unrealized holding losses on available for sale equity securities. Net unrealized holding gains on available for sale equity securities, net unrealized holding gains (losses) on available for sale debt securities and net unrealized holding gains (losses) on cash flow hedge derivatives are excluded from total shareholders’ equity for Tier 1 risk-based capital purposes.

Tier 1 risk-based capital ratio - Tier 1 risk-based capital divided by period-end risk-weighted assets.

Total equity - Total shareholders’ equity plus noncontrolling interests.

Total risk-based capital - Tier 1 risk-based capital plus qualifying subordinated debt and trust preferred securities, other noncontrolling interest not qualified as Tier 1, eligible gains on available for sale equity securities and the allowance for loan and lease losses, subject to certain limitations.

Total risk-based capital ratio - Total risk-based capital divided by period-end risk-weighted assets.

Transaction deposits - The sum of interest-bearing money market deposits, interest-bearing demand deposits, and noninterest-bearing deposits.

Troubled debt restructuring - A restructuring of a loan whereby the lender for economic or legal reasons related to the borrower’s financial difficulties grants a concession to the borrower that the lender would not otherwise consider.

Watchlist - A list of criticized loans, credit exposure or other assets compiled for internal monitoring purposes. We define criticized exposure for this purpose as exposure with an internal risk rating of other assets especially mentioned, substandard, doubtful or loss.

Yield curve - A graph showing the relationship between the yields on financial instruments or market indices of the same credit quality with different maturities. For example, a “normal” or “positive” yield curve exists when long-term bonds have higher yields than short-term bonds. A “flat” yield curve exists when yields are the same for short-term and long-term bonds. A “steep” yield curve exists when yields on long-term bonds are significantly higher than on short-term bonds. An “inverted” or “negative” yield curve exists when short-term bonds have higher yields than long-term bonds.

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