PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1 - FINANCIAL SUPPLEMENT (UNAUDITED) FOR SECOND QUARTER 2012

Attached files

file	filename
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d378588d8k.htm
EX-99.2 - ELECTRONIC PRESENTATION SLIDES FOR EARNINGS RELEASE CONFERENCE CALL - PNC FINANCIAL SERVICES GROUP, INC.	d378588dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2012

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2012

(UNAUDITED)


	Page
Consolidated Results:

Income Statement		1
Balance Sheet		2
Capital Ratios		2
Average Balance Sheet		3-4
Details of Net Interest Margin		5
Per Share Related Information		6
Selected Income Statement Information		6
Summary of Changes in Residential Mortgage Repurchase Reserve		6
Loans, Loans Held for Sale, and Net Unfunded Commitments		7
Allowances for Credit Losses		8
Purchase Accounting Accretion and Valuation of Purchased Impaired Loans		9
Nonperforming Assets and Troubled Debt Restructurings		10-11
Accruing Loans Past Due		12

Business Segment Results:

Descriptions		13
Income and Revenue		14
Period End Employees		14
Retail Banking		15-16
Corporate & Institutional Banking		17
Asset Management Group		18
Residential Mortgage Banking		19
Non-Strategic Assets Portfolio		20
Glossary of Terms		21-24

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on July 18, 2012. 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, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Alabama, Delaware, Georgia, Virginia, Missouri, Wisconsin and South Carolina. PNC also provides certain products and services internationally.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Consolidated Income Statement (Unaudited)


	Three months ended															Six months ended
	June 30			March 31			December 31			September 30			June 30			June 30			June 30
In millions, except per share data	2012			2012			2011			2011			2011			2012			2011
Interest Income
Loans	$	2,163		$	1,951		$	1,902		$	1,904		$	1,905		$	4,114		$	3,789
Investment securities		527			526			523			511			549			1,053			1,127
Other		106			120			109			115			93			226			214

Total interest income		2,796			2,597			2,534			2,530			2,547			5,393			5,130

Interest Expense
Deposits		83			103			139			167			180			186			362
Borrowed funds		187			203			196			188			217			390			442

Total interest expense		270			306			335			355			397			576			804

Net interest income		2,526			2,291			2,199			2,175			2,150			4,817			4,326

Noninterest Income
Asset management		278			284			250			287			288			562			551
Consumer services		290			264			269			330			333			554			644
Corporate services		290			232			266			187			228			522			445
Residential mortgage (a)		(173	)		230			157			198			163			57			358
Service charges on deposits		144			127			140			140			131			271			254
Net gains on sales of securities		62			57			62			68			82			119			119
Net other-than-temporary impairments		(34	)		(38	)		(44	)		(35	)		(39	)		(72	)		(73	)
Other		240			285			250			194			266			525			609

Total noninterest income		1,097			1,441			1,350			1,369			1,452			2,538			2,907

Total revenue		3,623			3,732			3,549			3,544			3,602			7,355			7,233
Provision For Credit Losses		256			185			190			261			280			441			701
Noninterest Expense
Personnel		1,119			1,111			1,052			949			976			2,230			1,965
Occupancy		199			190			198			171			176			389			369
Equipment		181			175			177			159			158			356			325
Marketing		67			68			74			72			63			135			103
Other (b)		1,082			911			1,218			789			803			1,993			1,484

Total noninterest expense (c)		2,648			2,455			2,719			2,140			2,176			5,103			4,246

Income before income taxes and noncontrolling interests		719			1,092			640			1,143			1,146			1,811			2,286
Income taxes		173			281			147			309			234			454			542

Net income		546			811			493			834			912			1,357			1,744

Less: Net income (loss) attributable to noncontrolling interests		(5	)		6			17			4			(1	)		1			(6	)
Preferred stock dividends and discount accretion		25			39			25			4			25			64			29

Net income attributable to common shareholders	$	526		$	766		$	451		$	826		$	888		$	1,292		$	1,721

Earnings Per Common Share
Basic	$	1.00		$	1.45		$	.86		$	1.57		$	1.69		$	2.44		$	3.27
Diluted	$	.98		$	1.44		$	.85		$	1.55		$	1.67		$	2.42		$	3.24

Average Common Shares Outstanding
Basic		527			526			524			524			524			526			524
Diluted		530			529			526			526			527			529			527

Efficiency		73	%		66	%		77	%		60	%		60	%		69	%		59	%

Noninterest income to total revenue		30	%		39	%		38	%		39	%		40	%		35	%		40	%

Effective tax rate (d)		24.1	%		25.7	%		23.0	%		27.0	%		20.4	%		25.1	%		23.7	%

For additional information regarding footnotes (a) through (c) below, refer to Selected Consolidated Income Statement Information on page 6.

(a)	Includes provision for residential mortgage repurchase obligations.

(b)	Includes expenses for residential mortgage foreclosure-related matters, and noncash charges for unamortized discounts related to redemption of trust preferred securities.

(c)	Includes integration costs.

(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 PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Consolidated Balance Sheet (Unaudited)


In millions, except par value	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011
Assets
Cash and due from banks (a)	$	4,136		$	4,162		$	4,105		$	3,982		$	3,865
Federal funds sold and resale agreements (b)		1,646			1,371			2,205			1,806			2,357
Trading securities		2,121			2,639			2,513			2,960			2,075
Interest-earning deposits with banks (a)		3,995			2,084			1,169			2,773			4,508
Loans held for sale (b)		3,333			2,456			2,936			2,491			2,679
Investment securities (a)		61,937			64,554			60,634			62,105			59,414
Loans (a) (b)		180,425			176,214			159,014			154,543			150,319
Allowance for loan and lease losses (a)		(4,156	)		(4,196	)		(4,347	)		(4,507	)		(4,627	)

Net loans		176,269			172,018			154,667			150,036			145,692
Goodwill		9,158			9,169			8,285			8,207			8,182
Other intangible assets		1,804			2,019			1,859			1,949			2,412
Equity investments (a) (c)		10,617			10,352			10,134			9,915			9,776
Other (a) (b)		24,559			25,059			22,698			23,246			22,157

Total assets	$	299,575		$	295,883		$	271,205		$	269,470		$	263,117


Liabilities
Deposits
Noninterest-bearing	$	64,476		$	62,463		$	59,048		$	55,180		$	52,683
Interest-bearing		142,447			143,664			128,918			132,552			129,208

Total deposits		206,923			206,127			187,966			187,732			181,891
Borrowed funds
Federal funds purchased and repurchase agreements		4,166			4,832			2,984			3,105			3,812
Federal Home Loan Bank borrowings		10,440			8,957			6,967			5,015			5,022
Bank notes and senior debt		10,185			12,065			11,793			11,990			10,526
Subordinated debt		7,593			8,221			8,321			9,564			9,358
Other (a)		11,305			8,464			6,639			5,428			6,458

Total borrowed funds		43,689			42,539			36,704			35,102			35,176
Allowance for unfunded loan commitments and letters of credit		224			243			240			217			202
Accrued expenses (a)		3,428			3,607			4,175			3,587			3,502
Other (a)		5,097			5,131			4,874			5,590			7,473

Total liabilities		259,361			257,647			233,959			232,228			228,244


Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 537, 537, 537, 536, and 536 shares		2,687			2,685			2,683			2,682			2,682
Capital surplus - preferred stock		3,120			1,638			1,637			1,636			648
Capital surplus - common stock and other		12,098			12,074			12,072			12,054			12,025
Retained earnings		19,149			18,834			18,253			17,985			17,344
Accumulated other comprehensive income (loss)		402			281			(105	)		397			69
Common stock held in treasury at cost: 8, 9, 10, 10, and 10 shares		(451	)		(467	)		(487	)		(535	)		(533	)

Total shareholders’ equity		37,005			35,045			34,053			34,219			32,235
Noncontrolling interests		3,209			3,191			3,193			3,023			2,638

Total equity		40,214			38,236			37,246			37,242			34,873

Total liabilities and equity	$	299,575		$	295,883		$	271,205		$	269,470		$	263,117

Capital Ratios
Tier 1 common (e)		9.3	%		9.3	%		10.3	%		10.5	%		10.5	%
Tier 1 risk-based (e)		11.4			11.4			12.6			13.1			12.8
Total risk-based (e)		14.3			14.4			15.8			16.5			16.2
Leverage (e)		10.1			10.5			11.1			11.4			11.0
Common shareholders’ equity to assets		11.3			11.3			12.0			12.1			12.0

(a)	Amounts include consolidated variable interest entities. Our first quarter 2012 Form 10-Q included, and second quarter 2012 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 quarter 2012 Form 10-Q included, and second quarter 2012 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 June 30, 2012 is estimated.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended															Six months ended
In millions	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	26,968		$	27,031		$	25,691		$	22,822		$	25,993		$	27,000		$	27,555
Non-agency		6,716			6,577			6,859			7,135			7,618			6,646			7,836
Commercial mortgage-backed		3,561			3,774			3,640			3,623			3,278			3,667			3,288
Asset-backed		5,401			4,329			3,832			3,817			3,185			4,865			2,972
US Treasury and government agencies		2,549			3,123			3,376			3,699			4,505			2,836			5,090
State and municipal		1,902			1,770			1,767			1,929			2,234			1,836			2,158
Other debt		3,178			2,996			2,731			3,113			3,578			3,087			3,785
Corporate stocks and other		317			347			446			449			376			332			409

Total securities available for sale		50,592			49,947			48,342			46,587			50,767			50,269			53,093
Securities held to maturity
Residential mortgage-backed		4,259			4,576			4,658			3,840			1,130			4,418			568
Commercial mortgage-backed		4,376			4,635			4,794			4,520			4,215			4,506			4,227
Asset-backed		874			1,170			1,353			1,863			2,276			1,022			2,369
US Treasury and government agencies		225			223			221			124						223
State and municipal		671			671			670			389			8			671			8
Other		359			361			363			365			150			360			76

Total securities held to maturity		10,764			11,636			12,059			11,101			7,779			11,200			7,248

Total investment securities		61,356			61,583			60,401			57,688			58,546			61,469			60,341
Loans
Commercial		77,131			69,286			63,483			59,951			57,932			73,208			57,120
Commercial real estate		18,440			16,818			16,413			16,347			16,779			17,630			17,160
Equipment lease financing		6,586			6,377			6,233			6,150			6,189			6,481			6,248
Consumer		59,832			57,148			55,556			54,632			54,014			58,490			54,236
Residential real estate		15,932			14,927			14,474			14,717			15,001			15,430			15,258

Total loans		177,921			164,556			156,159			151,797			149,915			171,239			150,022
Loans held for sale		3,016			2,910			2,673			2,497			2,719			2,963			2,955
Federal funds sold and resale agreements		1,666			1,821			2,035			2,030			2,321			1,744			2,566
Other		6,173			6,864			7,138			10,060			7,241			6,518			6,525

Total interest-earning assets		250,132			237,734			228,406			224,072			220,742			243,933			222,409
Noninterest-earning assets:
Allowance for loan and lease losses		(4,176	)		(4,314	)		(4,472	)		(4,592	)		(4,728	)		(4,245	)		(4,781	)
Cash and due from banks		3,694			3,777			3,883			3,544			3,433			3,735			3,413
Other		46,501			44,345			42,905			43,827			41,659			45,424			40,785

Total assets	$	296,151		$	281,542		$	270,722		$	266,851		$	261,106		$	288,847		$	261,826

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

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


	Three months ended										Six months ended
In millions	June 30 2012		March 31 2012		December 31 2011		September 30 2011		June 30 2011		June 30 2012		June 30 2011
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	66,902	$	61,162	$	58,897	$	59,009	$	58,594	$	64,032	$	58,575
Demand		34,388		31,599		29,338		27,654		26,912		32,993		26,614
Savings		10,008		9,183		8,545		8,305		8,222		9,596		7,941
Retail certificates of deposit		27,373		29,011		30,888		33,607		35,098		28,192		35,799
Time deposits in foreign offices and other time		3,577		3,238		2,869		2,191		2,250		3,407		3,104

Total interest-bearing deposits		142,248		134,193		130,537		130,766		131,076		138,220		132,033
Borrowed funds
Federal funds purchased and repurchase agreements		4,937		4,551		3,714		3,685		4,138		4,744		5,251
Federal Home Loan Bank borrowings		10,238		8,967		6,090		5,015		5,021		9,603		5,054
Bank notes and senior debt		10,618		11,138		11,463		10,480		11,132		10,878		11,437
Subordinated debt		7,293		7,719		8,463		8,982		8,981		7,506		9,166
Other		10,038		7,837		5,935		5,736		5,713		8,937		5,779

Total borrowed funds		43,124		40,212		35,665		33,898		34,985		41,668		36,687

Total interest-bearing liabilities		185,372		174,405		166,202		164,664		166,061		179,888		168,720
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		60,478		57,900		55,946		53,300		49,720		59,189		48,743
Allowance for unfunded loan commitments and letters of credit		243		240		217		202		204		242		196
Accrued expenses and other liabilities		10,375		11,186		11,132		12,478		10,747		10,781		10,262
Equity		39,683		37,811		37,225		36,207		34,374		38,747		33,905

Total liabilities and equity	$	296,151	$	281,542	$	270,722	$	266,851	$	261,106	$	288,847	$	261,826


(a) Calculated using average daily balances.

Supplemental Average Balance Sheet Information (Unaudited)

Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	142,248	$	134,193	$	130,537	$	130,766	$	131,076	$	138,220	$	132,033
Noninterest-bearing deposits		60,478		57,900		55,946		53,300		49,720		59,189		48,743

Total deposits	$	202,726	$	192,093	$	186,483	$	184,066	$	180,796	$	197,409	$	180,776

Transaction deposits	$	161,768	$	150,661	$	144,181	$	139,963	$	135,226	$	156,214	$	133,932

Common shareholders’ equity	$	33,648	$	32,981	$	32,552	$	32,124	$	31,101	$	33,315	$	30,650


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Six months ended
	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency		3.17	%		3.14	%		3.11	%		3.34	%		3.70	%		3.16	%		3.66	%
Non-agency		5.63			5.38			5.44			5.13			5.47			5.50			5.35
Commercial mortgage-backed		4.41			4.42			4.43			4.41			4.73			4.42			4.73
Asset-backed		1.91			2.24			2.39			2.38			2.43			2.06			2.55
US Treasury and government agencies		2.33			1.80			2.61			3.01			2.46			2.04			2.49
State and municipal		4.63			5.13			4.58			4.27			4.37			4.87			4.65
Other debt		2.56			2.55			2.75			2.42			2.58			2.56			2.58
Corporate stocks and other		.11			.03			.04			.04			.04			.07			.05
Total securities available for sale		3.40			3.38			3.46			3.54			3.77			3.39			3.73
Securities held to maturity
Residential mortgage-backed		3.70			3.58			3.39			3.45			3.68			3.64			3.66
Commercial mortgage-backed		4.56			4.62			4.57			4.95			5.11			4.59			5.17
Asset-backed		1.83			1.68			1.98			1.87			2.20			1.75			2.38
US Treasury and government agencies		3.79			3.79			3.81			4.29						3.79
State and municipal		4.20			4.18			4.19			4.48			5.10			4.19			5.10
Other		2.89			2.83			2.88			2.83			2.95			2.86			2.94
Total securities held to maturity		3.90			3.82			3.74			3.82			4.01			3.86			4.11
Total investment securities		3.49			3.47			3.51			3.59			3.80			3.48			3.78

Loans
Commercial		4.75			4.51			4.66			4.86			4.88			4.64			4.96
Commercial real estate		5.78			5.19			5.33			5.25			5.51			5.50			5.06
Equipment lease financing		4.96			4.74			4.84			5.11			4.86			4.85			4.93
Consumer		4.67			4.78			4.81			4.82			4.94			4.72			4.97
Residential real estate		5.44			5.59			5.35			5.90			6.22			5.51			6.19
Total loans		4.90			4.78			4.85			5.00			5.11			4.84			5.10

Loans held for sale		6.00			6.89			5.96			7.31			5.62			6.44			7.31
Federal funds sold and resale agreements		1.45			1.58			1.48			1.55			1.39			1.52			1.28
Other		3.62			3.71			3.45			2.43			2.60			3.67			2.80
Total yield on interest-earning assets		4.51			4.41			4.44			4.52			4.64			4.46			4.66

Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.21			.23			.25			.31			.34			.22			.34
Demand		.04			.04			.05			.08			.10			.04			.10
Savings		.10			.10			.16			.19			.19			.10			.19
Retail certificates of deposit		.57			.80			1.16			1.26			1.32			.69			1.30
Time deposits in foreign offices and other time		.49			.49			.53			.72			.75			.49			.62
Total interest-bearing deposits		.24			.31			.42			.51			.55			.27			.55

Borrowed funds
Federal funds purchased and repurchase agreements		.21			.22			.15			.15			.17			.22			.17
Federal Home Loan Bank borrowings		.74			.80			.93			.99			1.02			.77			1.02
Bank notes and senior debt		2.30			2.48			2.11			2.01			2.40			2.39			2.36
Subordinated debt		4.77			5.09			4.91			4.76			5.24			4.94			5.35
Other		.62			.75			.93			.92			1.12			.68			1.05
Total borrowed funds		1.72			2.01			2.17			2.20			2.46			1.86			2.40
Total rate on interest-bearing liabilities		.58			.70			.80			.86			.95			.64			.96

Interest rate spread		3.93			3.71			3.64			3.66			3.69			3.82			3.70
Impact of noninterest-bearing sources		.15			.19			.22			.23			.24			.17			.23

Net interest margin		4.08	%		3.90	%		3.86	%		3.89	%		3.93	%		3.99	%		3.93	%

(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 June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011, and June 30, 2011, were $35 million, $31 million, $28 million, $27 million, and $25 million, respectively. The taxable-equivalent adjustments to net interest income for the six months ended June 30, 2012 and June 30, 2011 were $66 million and $49 million, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Per Share Related Information (Unaudited)


	Three months ended												Six months ended
	June 30			March 31		December 31		September 30		June 30			June 30		June 30
In millions, except per share data	2012			2012		2011		2011		2011			2012		2011
Basic
Net income	$	546		$	811	$	493	$	834	$	912		$	1,357	$	1,744
Less: Net income (loss) attributable to noncontrolling interests		(5	)		6		17		4		(1	)		1		(6	)
Preferred stock dividends and discount accretion		25			39		25		4		25			64		29
Dividends and undistributed earnings allocated to nonvested restricted shares		1			4		2		4		4			5		6

Net income attributable to basic common shares	$	525		$	762	$	449	$	822	$	884		$	1,287	$	1,715
Basic weighted-average common shares outstanding		527			526		524		524		524			526		524
Basic earnings per common share	$	1.00		$	1.45	$	.86	$	1.57	$	1.69		$	2.44	$	3.27

Diluted
Net income attributable to basic common shares	$	525		$	762	$	449	$	822	$	884		$	1,287	$	1,715
Less: BlackRock common stock equivalents		4			3		3		6		4			7		10

Net income attributable to diluted common shares	$	521		$	759	$	446	$	816	$	880		$	1,280	$	1,705
Basic weighted-average common shares outstanding		527			526		524		524		524			526		524
Dilutive potential common shares		3			3		2		2		3			3		3

Diluted weighted-average common shares outstanding		530			529		526		526		527			529		527
Diluted earnings per common share	$	0.98		$	1.44	$	.85	$	1.55	$	1.67		$	2.42	$	3.24


Selected Consolidated Income Statement Information (Unaudited)

	Three months ended												Six months ended
	June 30			March 31		December 31		September 30		June 30			June 30		June 30
In millions, except per share data	2012			2012		2011		2011		2011			2012		2011
Noninterest Income
Provision for residential mortgage repurchase obligations (Pre-tax)	$	438		$	32	$	36	$	31	$	21		$	470	$	35
Impact on diluted earnings per share (a)		.54			.04		.04		.04		.03			.58		.04
Noninterest Expense
Noncash charges for unamortized discounts related to redemption of trust preferred securities (Pre-tax)	$	130				$	198						$	130
Impact on diluted earnings per share (a)		.16					.24							.16
Expenses for residential mortgage foreclosure-related matters (Pre-tax)	$	43		$	38	$	240	$	63	$	16		$	81	$	21
Impact on diluted earnings per share (a)		.05			.05		.30		.08		.02			.10		.03
Integration costs (Pre-tax)	$	52		$	145	$	28	$	8	$	5		$	197	$	6
Impact on diluted earnings per share (a)		.06			.18		.04		.01		.01			.24		.01
Income Taxes
Benefit related to reversal of deferred tax liabilities (b)										$	54				$	54
Impact on diluted earnings per share (a)											.07					.07

(a)	In calculating impact on diluted earnings per share in the table above, after-tax amounts for the income statement items were calculated using a marginal federal income tax rate of 35% and include applicable income tax adjustments.

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

Summary of Changes in Residential Mortgage Repurchase Reserve (Unaudited)


	June 30			March 31			December 31			September 30			June 30
Three months ended - in millions	2012			2012			2011			2011			2011
Beginning balance	$	101		$	83		$	85		$	95		$	124
Provision		438			32			36			31			21
RBC Bank (USA) Acquisition					26
Losses – loan repurchases and settlements		(77	)		(40	)		(38	)		(41	)		(50	)

Ending balance	$	462		$	101		$	83		$	85		$	95


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Details of Loans (Unaudited)


	June 30		March 31		December 31		September 30		June 30
In millions	2012		2012		2011		2011		2011
Commercial
Retail/wholesale trade	$	13,434	$	12,983	$	11,539	$	11,287	$	10,952
Manufacturing		13,442		12,684		11,453		10,980		10,426
Service providers		11,875		11,215		9,717		9,326		8,984
Real estate related (a)		10,051		10,091		8,488		8,073		7,515
Financial services		9,397		8,273		6,646		5,676		5,206
Health care		6,240		5,695		5,068		4,668		4,115
Other industries		14,462		14,574		12,783		12,240		11,422

Total commercial		78,901		75,515		65,694		62,250		58,620

Commercial real estate
Real estate projects		12,837		12,589		10,640		10,936		11,086
Commercial mortgage		5,643		5,945		5,564		5,477		5,233

Total commercial real estate		18,480		18,534		16,204		16,413		16,319

Equipment lease financing		6,764		6,594		6,416		6,186		6,210

Total commercial lending		104,145		100,643		88,314		84,849		81,149

Consumer
Home equity
Lines of credit		24,360		24,668		22,491		22,677		22,838
Installment		11,478		11,076		10,598		10,486		10,541
Credit card		4,123		4,089		3,976		3,785		3,754
Other consumer
Education		8,807		9,246		9,582		9,154		8,816
Automobile		7,166		5,794		5,181		4,447		3,705
Other		4,523		4,486		4,403		4,490		4,534

Total consumer		60,457		59,359		56,231		55,039		54,188

Residential real estate
Residential mortgage		14,927		15,287		13,885		14,022		14,302
Residential construction		896		925		584		633		680

Total residential real estate		15,823		16,212		14,469		14,655		14,982

Total consumer lending		76,280		75,571		70,700		69,694		69,170

Total loans (b)	$	180,425	$	176,214	$	159,014	$	154,543	$	150,319

(a) Includes loans to customers in the real estate and construction industries.
(b) Includes purchased impaired loans:	$	8,083	$	8,421	$	6,667	$	6,927	$	7,256

Details of Loans Held for Sale (Unaudited)

	June 30		March 31		December 31		September 30		June 30
In millions	2012		2012		2011		2011		2011
Commercial mortgage	$	1,021	$	1,014	$	1,294	$	1,081	$	1,226
Residential mortgage		1,939		1,387		1,522		1,353		1,351
Other		373		55		120		57		102

Total	$	3,333	$	2,456	$	2,936	$	2,491	$	2,679


Net Unfunded Commitments (Unaudited)
	June 30		March 31		December 31		September 30		June 30
In millions	2012		2012		2011		2011		2011
Net unfunded commitments	$	113,636	$	112,454	$	103,271	$	103,236	$	99,791


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

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

Change in Allowance for Loan and Lease Losses


	June 30			March 31			December 31			September 30			June 30
Three months ended - in millions	2012			2012			2011			2011			2011
Beginning balance	$	4,196		$	4,347		$	4,507		$	4,627		$	4,759
Charge-offs:
Commercial		(123	)		(111	)		(143	)		(193	)		(185	)
Commercial real estate		(75	)		(84	)		(90	)		(92	)		(124	)
Equipment lease financing		(5	)		(5	)		(7	)		(3	)		(11	)
Home equity		(121	)		(131	)		(109	)		(123	)		(112	)
Residential real estate		(37	)		(30	)		(32	)		(20	)		(43	)
Credit card		(55	)		(55	)		(50	)		(51	)		(60	)
Other consumer		(46	)		(51	)		(51	)		(42	)		(49	)

Total charge-offs		(462	)		(467	)		(482	)		(524	)		(584	)
Recoveries:
Commercial		75			72			76			78			98
Commercial real estate		29			23			40			25			26
Equipment lease financing		6			9			13			13			15
Home equity		17			13			11			16			11
Residential real estate		1			(1	)		1			8			1
Credit card		6			5			5			6			6
Other consumer		13			13			9			13			13

Total recoveries		147			134			155			159			170
Net (charge-offs) recoveries:
Commercial		(48	)		(39	)		(67	)		(115	)		(87	)
Commercial real estate		(46	)		(61	)		(50	)		(67	)		(98	)
Equipment lease financing		1			4			6			10			4
Home equity		(104	)		(118	)		(98	)		(107	)		(101	)
Residential real estate		(36	)		(31	)		(31	)		(12	)		(42	)
Credit card		(49	)		(50	)		(45	)		(45	)		(54	)
Other consumer		(33	)		(38	)		(42	)		(29	)		(36	)

Total net charge-offs		(315	)		(333	)		(327	)		(365	)		(414	)
Provision for credit losses		256			185			190			261			280
Other											(1	)
Net change in allowance for unfunded loan commitments and letters of credit		19			(3	)		(23	)		(15	)		2

Ending balance	$	4,156		$	4,196		$	4,347		$	4,507		$	4,627

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.71	%		.81	%		.83	%		.95	%		1.11	%
Allowance for loan and lease losses to total loans		2.30			2.38			2.73			2.92			3.08

Commercial lending net charge-offs	$	(93	)	$	(96	)	$	(111	)	$	(172	)	$	(181	)
Consumer lending net charge-offs		(222	)		(237	)		(216	)		(193	)		(233	)

Total net charge-offs	$	(315	)	$	(333	)	$	(327	)	$	(365	)	$	(414	)

Net charge-offs to average loans
Commercial lending		.37	%		.42	%		.51	%		.83	%		.90	%
Consumer lending		1.18			1.32			1.22			1.10			1.35

Change in Allowance for Unfunded Loan Commitments and Letters of Credit


	June 30			March 31		December 31		September 30		June 30
Three months ended - in millions	2012			2012		2011		2011		2011
Beginning balance	$	243		$	240	$	217	$	202	$	204
Net change in allowance for unfunded loan commitments and letters of credit		(19	)		3		23		15		(2	)

Ending balance	$	224		$	243	$	240	$	217	$	202


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Purchase Accounting Accretion and Valuation of Purchased Impaired Loans (Unaudited)

Total and Core Net Interest Income


	Three months ended										Six months ended
	June 30		March 31		December 31		September 30		June 30		June 30		June 30
In millions	2012		2012		2011		2011		2011		2012		2011
Total net interest income	$	2,526	$	2,291	$	2,199	$	2,175	$	2,150	$	4,817	$	4,326
Purchase accounting accretion (a)		343		263		256		292		290		606		571

Core net interest income (a)	$	2,183	$	2,028	$	1,943	$	1,883	$	1,860	$	4,211	$	3,755

(a)	We believe that core net interest income and purchase accounting accretion are useful in evaluating the components of net interest income.

Accretion - Purchased Impaired Loans


	Three months ended
	June 30			March 31			June 30
In millions	2012 (a)			2012 (a)			2011 (b)
Impaired loans
Scheduled accretion	$	178		$	158		$	186
Reversal of contractual interest on impaired loans		(111	)		(97	)		(88	)

Scheduled accretion net of contractual interest		67			61			98
Excess cash recoveries		51			40			40

Total impaired loans	$	118		$	101		$	138

(a)	Represents National City and RBC Bank (USA) acquisitions.

(b)	Represents National City acquisition.

Accretable Net Interest - Purchased Impaired Loans


In billions
April 1, 2012	$	2.5

Accretion		(.1	)
Excess cash recoveries		(.1	)
Net reclassifications to accretable from non-accretable and other activity		.1

June 30, 2012 (a)	$	2.4


In billions
January 1, 2012	$	2.1
Addition due to RBC Bank (USA) acquisition on March 2, 2012		.6
Accretion		(.3	)
Excess cash recoveries		(.1	)
Net reclassifications to accretable from non-accretable and other activity		.1

June 30, 2012	$	2.4

(a)	As of June 30, 2012, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $1.5 billion in future periods. This will offset the total net accretable interest in future interest income of $2.4 billion on purchased impaired loans.

Valuation of Purchased Impaired Loans


	June 30, 2012 (a)						March 31, 2012 (a)						December 31, 2011 (b)
Dollars in billions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Unpaid principal balance	$	2.2					$	2.4					$	1.0
Purchased impaired mark		(.7	)					(.7	)					(.1	)

Recorded investment		1.5						1.7						.9
Allowance for loan losses		(.2	)					(.2	)					(.2	)

Net investment		1.3			59	%		1.5			63	%		.7			70	%


Consumer and residential mortgage loans:
Unpaid principal balance		7.3						7.7						6.5
Purchased impaired mark		(.7	)					(1.0	)					(.7	)

Recorded investment		6.6						6.7						5.8
Allowance for loan losses		(.8	)					(.8	)					(.8	)

Net investment		5.8			79	%		5.9			77	%		5.0			77	%


Total purchased impaired loans:
Unpaid principal balance		9.5						10.1						7.5
Purchased impaired mark		(1.4	)					(1.7	)					(0.8	)

Recorded investment		8.1						8.4						6.7
Allowance for loan losses		(1.0	)					(1.0	)					(1.0	)

Net investment	$	7.1			75	%	$	7.4			73	%	$	5.7			76	%

(a)	Represents National City and RBC Bank (USA) acquisitions.

(b)	Represents National City acquisition.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


	June 30			March 31			December 31			September 30			June 30
In millions	2012			2012			2011			2011			2011
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	110		$	108		$	109		$	117		$	148
Manufacturing		141			107			117			149			160
Service providers		145			149			147			198			189
Real estate related (b)		214			232			252			256			261
Financial services		15			20			36			31			18
Health care		22			23			29			39			38
Other industries		144			200			209			204			233

Total commercial		791			839			899			994			1,047

Commercial real estate
Real estate projects		924			977			1,051			1,115			1,289
Commercial mortgage		218			274			294			310			378

Total commercial real estate		1,142			1,251			1,345			1,425			1,667

Equipment lease financing		19			21			22			30			35

Total commercial lending		1,952			2,111			2,266			2,449			2,749

Consumer lending (c)
Home equity (d)		722			685			529			484			421
Residential real estate
Residential mortgage (e)		707			684			685			676			630
Residential construction		32			44			41			46			36
Credit card (f)		6			12			8			7			8
Other consumer		39			45			31			30			26

Total consumer lending		1,506			1,470			1,294			1,243			1,121

Total nonperforming loans (g)		3,458			3,581			3,560			3,692			3,870

OREO and foreclosed assets
Other real estate owned (OREO) (h)		670			749			561			553			546
Foreclosed and other assets		48			31			35			53			65

Total OREO and foreclosed assets		718			780			596			606			611

Total nonperforming assets	$	4,176		$	4,361		$	4,156		$	4,298		$	4,481

Nonperforming loans to total loans		1.92	%		2.03	%		2.24	%		2.39	%		2.57	%
Nonperforming assets to total loans, OREO and foreclosed assets		2.31			2.46			2.60			2.77			2.97
Nonperforming assets to total assets		1.39			1.47			1.53			1.59			1.70
Allowance for loan and lease losses to nonperforming loans (g) (i)		120			117			122			122			120

(a)	See analysis of troubled debt restructurings (TDRs) on page 11.

(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)	In the first quarter of 2012, we adopted a policy stating that Home equity loans past due 90 days or more would be placed on nonaccrual status. Prior policy required that these loans be past due 180 days before being placed on nonaccrual status.

(e)	Nonperforming residential mortgage excludes loans of $55 million, $55 million, $61 million, $68 million, and $85 million, accounted for under the fair value option as of June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively.

(f)

Effective in the second quarter of 2011, the commercial nonaccrual policy was applied to certain small business credit card balances. This change resulted in loans being placed on nonaccrual status when they become 90 days or more past due. We continue to charge off these loans at 180 days past due.

(g)	Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans.

(h)

OREO excludes $262 million, $252 million, $280 million, $256 million, and $273 million at June 30, 2012, March 31, 2012, December 31, 2011, September 30, 2011 and June 30, 2011, respectively, related to residential real estate that was acquired by us upon foreclosure of serviced loans because they are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Change in Nonperforming Assets


In millions	April 1, 2012- June 30, 2012			January 1, 2012- March 31, 2012			October 1, 2011- December 31, 2011			July 1, 2011- September 30, 2011			April 1, 2011- June 30, 2011
Beginning balance	$	4,361		$	4,156		$	4,298		$	4,481		$	4,940
New nonperforming assets		797			1,186			854			925			843
Charge-offs and valuation adjustments		(293	)		(236	)		(221	)		(286	)		(323	)
Principal activity, including paydowns and payoffs		(428	)		(414	)		(506	)		(471	)		(603	)
Asset sales and transfers to loans held for sale		(168	)		(146	)		(152	)		(155	)		(128	)
Returned to performing status		(93	)		(185	)		(117	)		(196	)		(248	)

Ending balance	$	4,176		$	4,361		$	4,156		$	4,298		$	4,481

Largest Individual Nonperforming Assets at June 30, 2012 (a)


In millions
Ranking	Outstandings		Industry
1	$	45	Real Estate, Rental and Leasing
2		43	Real Estate, Rental and Leasing
3		35	Real Estate, Rental and Leasing
4		23	Wholesale Trade
5		23	Real Estate, Rental and Leasing
6		20	Construction
7		20	Construction
8		18	Real Estate, Rental and Leasing
9		17	Real Estate, Rental and Leasing
10		16	Construction

Total	$	260

As a percent of total nonperforming assets 6%

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

Summary of Troubled Debt Restructurings


In millions	June 30 2012		March 31 2012		December 31 2011		September 30 2011		June 30 2011
Total commercial lending	$	483	$	412	$	405	$	396	$	305
Total consumer lending		1,836		1,821		1,798		1,751		1,614

Total TDRs	$	2,319	$	2,233	$	2,203	$	2,147	$	1,919

Nonperforming	$	1,189	$	1,095	$	1,141	$	1,062	$	845
Accruing (a)		878		865		771		780		752
Credit card (b)		252		273		291		305		322

Total TDRs	$	2,319	$	2,233	$	2,203	$	2,147	$	1,919

Loans whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties are considered troubled debt restructurings (TDRs). TDRs typically result from our loss mitigation activities and include rate reductions, principal forgiveness, postponement/reduction of scheduled amortization, and extensions, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Certain consumer government insured or guaranteed loans which were evaluated for TDR consideration, loans held for sale, loans accounted for under the fair value option, and pooled purchased impaired loans are not classified as TDRs.

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

(b)

Includes credit cards and certain small business and consumer credit agreements whose terms have been restructured 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 12


Accruing Loans Past Due (Unaudited)

Accruing Loans Past Due 30 to 59 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2012		Mar. 31 2012		Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Jun. 30 2012			Mar. 31 2012			Dec. 31 2011			Sept. 30 2011			Jun. 30 2011
Commercial	$	130	$	195	$	122	$	163	$	149		.16	%		.26	%		.19	%		.26	%		.25	%
Commercial real estate		123		144		96		84		98		.67			.78			.59			.51			.60
Equipment lease financing		5		25		22		9		9		.07			.38			.34			.15			.14
Home equity (b)		124		174		173		177		141		.35			.49			.52			.53			.42
Residential real estate
Non government insured (c)		148		222		180		198		201		.94			1.37			1.24			1.35			1.34
Government insured		123		122		122		121		123		.78			.75			.84			.83			.82
Credit card		33		34		38		39		39		.80			.83			.96			1.03			1.04
Other consumer
Non government insured		43		50		58		55		51		.21			.26			.30			.30			.30
Government insured		164		171		207		161		134		.80			.88			1.08			.89			.79

Total	$	893	$	1,137	$	1,018	$	1,007	$	945		.49			.64			.64			.65			.63


Accruing Loans Past Due 60 to 89 Days (a)

	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2012		Mar. 31 2012		Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Jun. 30 2012			Mar. 31 2012			Dec. 31 2011			Sept. 30 2011			Jun. 30 2011
Commercial	$	65	$	53	$	47	$	54	$	75		.08	%		.07	%		.07	%		.09	%		.13	%
Commercial real estate		105		44		35		25		71		.57			.24			.22			.15			.44
Equipment lease financing		2		2		5		4		2		.03			.03			.08			.06			.03
Home equity (b)		68		103		114		101		91		.19			.29			.34			.30			.27
Residential real estate
Non government insured (c)		52		73		72		81		68		.33			.45			.50			.55			.45
Government insured		91		100		104		110		119		.58			.62			.72			.75			.80
Credit card		22		24		25		26		23		.53			.59			.63			.69			.61
Other consumer
Non government insured		16		20		21		22		20		.08			.10			.11			.12			.12
Government insured		113		98		124		121		84		.55			.50			.65			.67			.49

Total	$	534	$	517	$	547	$	544	$	553		.30			.29			.34			.35			.37


Accruing Loans Past Due 90 Days or More (a)

	Amount										Percent of Total Outstandings
Dollars in millions	Jun. 30 2012		Mar. 31 2012		Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Jun. 30 2012			Mar. 31 2012			Dec. 31 2011			Sept. 30 2011			Jun. 30 2011
Commercial	$	34	$	28	$	49	$	34	$	42		.04	%		.04	%		.07	%		.05	%		.08	%
Commercial real estate		16		5		6		13		12		.09			.03			.04			.08			.07
Equipment lease financing		1		5				2		1		.01			.08						.03			.02
Home equity (b)(d)						221		206		182								.67			.62			.55
Residential real estate
Non government insured (c)		104		140		152		137		145		.66			.86			1.05			.93			.97
Government insured		1,925		2,012		2,129		1,998		1,926		12.17			12.41			14.71			13.63			12.85
Credit card		38		47		48		45		45		.92			1.15			1.21			1.19			1.20
Other consumer
Non government insured		17		21		23		23		21		.08			.11			.12			.13			.12
Government insured		348		351		345		310		272		1.70			1.80			1.80			1.71			1.60

Total	$	2,483	$	2,609	$	2,973	$	2,768	$	2,646		1.38			1.48			1.87			1.79			1.76

(a)	Excludes loans held for sale and purchased impaired loans.

(b)	In the second quarter of 2012, the Home equity amounts as of June 30, 2012 were reduced by $42 million and $27 million for the Accruing Loans Past Due 30 to 59 Days and 60 to 89 Days respectively, to correct for immaterial amounts. Prior periods have not been adjusted.

(c)

In the second quarter of 2012, the Residential real estate amounts as of June 30, 2012 were reduced by $28 million, $14 million and $28 million for the Accruing Loans Past Due 30 to 59 Days, 60 to 89 Days and 90 Days or More respectively, to correct for immaterial amounts. Prior periods have not been adjusted.

(d)	In the first quarter of 2012, we adopted a policy stating that Home equity loans past due 90 days or more would be placed on nonaccrual status. Prior policy required that these loans be past due 180 days before being placed on nonaccrual status.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

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 channels. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Alabama, Delaware, Georgia, Virginia, Missouri, Wisconsin, and South Carolina.

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 and retirement 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.

Non-Strategic Assets Portfolio (formerly, 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. We obtained a significant portion of these non-strategic assets through acquisitions of other companies.

BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. BlackRock provides diversified investment management services to institutional clients, intermediary and individual investors through various investment vehicles. Investment management services primarily consist of the management of equity, fixed income, multi-asset class, alternative investment and cash management products. BlackRock offers its investment products in a variety of vehicles, including open-end and closed-end mutual funds, iShares® exchange-traded funds (“ETFs”), collective investment trusts and separate accounts. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services to a broad base of clients. Financial markets advisory services include valuation services relating to illiquid securities, dispositions and workout assignments (including long-term portfolio liquidation assignments), risk management and strategic planning and execution. At June 30, 2012, our economic interest in BlackRock was 22%.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

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


	Three months ended												Six months ended
In millions Income (Loss)	June 30 2012			March 31 2012		December 31 2011			September 30 2011		June 30 2011		June 30 2012			June 30 2011
Retail Banking	$	136		$	147	$	62		$	121	$	129	$	283		$	188
Corporate & Institutional Banking		577			495		597			437		462		1,072			906
Asset Management Group		38			36		25			40		54		74			103
Residential Mortgage Banking (c)		(213	)		61		(61	)		23		55		(152	)		127
Non-Strategic Assets Portfolio		67			71		(2	)		93		84		138			109
Other, including BlackRock (b) (d) (e)		(59	)		1		(128	)		120		128		(58	)		311

Net income (f)	$	546		$	811	$	493		$	834	$	912	$	1,357		$	1,744


Revenue
Retail Banking	$	1,551		$	1,436	$	1,383		$	1,423	$	1,404	$	2,987		$	2,773
Corporate & Institutional Banking		1,439			1,266		1,306			1,149		1,202		2,705			2,320
Asset Management Group		240			243		234			228		236		483			467
Residential Mortgage Banking		(109	)		293		220			254		219		184			478
Non-Strategic Assets Portfolio		223			198		207			238		270		421			515
Other, including BlackRock (b) (d)		279			296		199			252		271		575			680

Total revenue	$	3,623		$	3,732	$	3,549		$	3,544	$	3,602	$	7,355		$	7,233

(a)

Our business information is presented based on our internal management reporting practices. We refine our internal methodologies from time to time as our internal management reporting practices are enhanced. During the second quarter of 2012, enhancements were made to the transfer pricing methodology. Prior period amounts have been reclassified to conform with the current period presentation, which we believe is more meaningful to readers of our financial statements.

(b)	We consider BlackRock to be a separate reportable business segment but have combined its results with Other for this presentation. Our second quarter 2012 Form 10-Q will include additional information regarding BlackRock.

(c)	Includes provisions for residential mortgage repurchase obligations. For more information, refer to Selected Consolidated Income Statement Information on page 6.

(d)

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, alternative investments, including private equity, intercompany eliminations, most corporate overhead, tax adjustments that are not allocated to business segments, and differences between business segment performance reporting and financial statement reporting (GAAP), including the presentation of net income attributable to noncontrolling interests as the segments’ results exclude their portion of net income attributable to noncontrolling interests.

(e)	Includes amounts for integration costs and noncash charges for unamortized discounts related to redemption of trust preferred securities. For more information, refer to Selected Consolidated Income Statement Information on page 6.

(f)	Includes expenses for residential mortgage foreclosure-related matters. These expenses have been allocated among the following: Residential Mortgage Banking, Non-Strategic Assets Portfolio, and Other. For more information, refer to Selected Consolidated Income Statement Information on page 6.


Period End Employees (a)	June 30 2012		March 31 2012		December 31 2011		September 30 2011		June 30 2011
Full-time employees
Retail Banking		23,388		23,583		21,056		21,058		21,044
Corporate & Institutional Banking		4,721		4,639		4,364		4,340		3,864
Asset Management Group		3,219		3,158		3,109		3,072		3,053
Residential Mortgage Banking		4,210		4,055		3,718		3,646		3,688
Non-Strategic Assets Portfolio		179		229		116		114		121
Other
Operations & Technology		9,525		9,548		8,933		8,807		8,724
Staff Services and Other		5,206		5,234		4,644		4,639		5,021

Total Other		14,731		14,782		13,577		13,446		13,745

Total full-time employees		50,448		50,446		45,940		45,676		45,515

Retail Banking part-time employees		4,970		5,265		5,083		5,103		5,112
Other part-time employees		1,215		894		868		913		1,216

Total part-time employees		6,185		6,159		5,951		6,016		6,328

Total (b)		56,633		56,605		51,891		51,692		51,843

(a)	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.

(b)	The increase in the total number of employees at March 31, 2012 is primarily driven by the acquisition of RBC Bank (USA) during the first quarter of 2012.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Retail Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
INCOME STATEMENT
Net interest income	$	1,114		$	1,045		$	972		$	956		$	940		$	2,159		$	1,878
Noninterest income
Service charges on deposits		137			121			135			133			125			258			242
Brokerage		49			45			48			48			52			94			105
Consumer services		213			191			195			251			253			404			481
Other		38			34			33			35			34			72			67

Total noninterest income		437			391			411			467			464			828			895

Total revenue		1,551			1,436			1,383			1,423			1,404			2,987			2,773
Provision for credit losses		165			135			229			206			180			300			456
Noninterest expense		1,171			1,069			1,056			1,026			1,020			2,240			2,021

Pretax earnings		215			232			98			191			204			447			296
Income taxes		79			85			36			70			75			164			108

Earnings	$	136		$	147		$	62		$	121		$	129		$	283		$	188

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	28,407		$	26,591		$	25,776		$	25,756		$	25,906		$	27,499		$	25,984
Indirect auto		5,036			4,433			3,872			3,308			2,756			4,735			2,579
Indirect other		1,203			1,282			1,355			1,432			1,519			1,242			1,565
Education		9,100			9,440			9,302			9,124			8,881			9,270			8,991
Credit cards		4,075			3,928			3,805			3,733			3,680			4,001			3,705
Other		2,372			2,072			1,957			1,874			1,809			2,222			1,816

Total consumer		50,193			47,746			46,067			45,227			44,551			48,969			44,640
Commercial and commercial real estate		11,445			10,682			10,369			10,482			10,636			11,083			10,711
Floor plan		1,803			1,663			1,452			1,304			1,473			1,733			1,523
Residential mortgage		972			1,031			1,092			1,150			1,196			1,002			1,241

Total loans		64,413			61,122			58,980			58,163			57,856			62,787			58,115
Goodwill and other intangible assets		6,228			5,888			5,735			5,748			5,750			6,058			5,759
Other assets		2,452			2,699			2,455			2,247			2,151			2,575			2,337

Total assets	$	73,093		$	69,709		$	67,170		$	66,158		$	65,757		$	71,420		$	66,211

Deposits
Noninterest-bearing demand	$	20,381		$	18,764		$	18,105		$	18,081		$	18,443		$	19,572		$	18,274
Interest-bearing demand		28,265			25,707			23,583			22,381			21,869			26,986			21,397
Money market		47,271			43,601			41,638			41,191			40,776			45,436			40,583

Total transaction deposits		95,917			88,072			83,326			81,653			81,088			91,994			80,254
Savings		9,900			9,077			8,450			8,218			8,140			9,489			7,858
Certificates of deposit		26,468			28,150			29,998			32,664			34,060			27,309			34,709

Total deposits		132,285			125,299			121,774			122,535			123,288			128,792			122,821
Other liabilities		190			629			758			786			765			410			955
Capital		8,455			8,328			8,152			8,223			8,246			8,391			8,148

Total liabilities and equity	$	140,930		$	134,256		$	130,684		$	131,544		$	132,299		$	137,593		$	131,924

PERFORMANCE RATIOS
Return on average capital		6	%		7	%		3	%		6	%		6	%		7	%		5	%
Return on average assets		.75			.85			.37			.73			.79			.80			.57
Noninterest income to total revenue		28			27			30			33			33			28			32
Efficiency		75			74			76			72			73			75			73

(a)	See note (a) on page 14.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Retail Banking (Unaudited) (Continued)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
OTHER INFORMATION (a)
Credit-related statistics:
Commercial nonperforming assets	$	275		$	315		$	336		$	330		$	301
Consumer nonperforming assets		685			650			513			454			403

Total nonperforming assets	$	960		$	965		$	849		$	784		$	704

Purchased impaired loans (b)	$	886		$	903		$	757		$	786		$	826

Commercial lending net charge-offs	$	38		$	28		$	48		$	39		$	65		$	66		$	132
Credit card lending net charge-offs		49			50			44			45			54			99			122
Consumer lending (excluding credit card) net charge-offs		100			113			103			98			104			213			226

Total net charge-offs	$	187		$	191		$	195		$	182		$	223		$	378		$	480

Commercial lending annualized net charge-off ratio		1.15	%		.91	%		1.61	%		1.31	%		2.15	%		1.04	%		2.18	%
Credit card lending annualized net charge-off ratio		4.84	%		5.12	%		4.59	%		4.78	%		5.89	%		4.98	%		6.64	%
Consumer lending (excluding credit card) annualized net charge-off ratio		.85	%		1.01	%		.94	%		.91	%		.99	%		.93	%		1.08	%

Total annualized net charge-off ratio		1.17	%		1.26	%		1.31	%		1.24	%		1.55	%		1.21	%		1.67	%

Home equity portfolio credit statistics: (c)
% of first lien positions at origination (d)		39	%		37	%		39	%		38	%		37	%
Weighted-average loan-to-value ratios (LTVs) (d)		78	%		81	%		72	%		72	%		73	%
Weighted-average updated FICO scores (e)		742			739			743			743			743
Annualized net charge-off ratio		.92	%		1.11	%		1.01	%		1.02	%		1.00	%		1.01	%		1.16	%
Loans 30 - 59 days past due		.54	%		.56	%		.58	%		.58	%		.48	%
Loans 60 - 89 days past due		.33	%		.35	%		.38	%		.32	%		.30	%
Loans 90 days past due (f)		1.24	%		1.24	%		1.22	%		1.12	%		1.02	%

Other statistics:
ATMs		7,206			7,220			6,806			6,754			6,734
Branches (g)		2,888			2,900			2,511			2,469			2,459

Customer-related statistics: (in thousands)
Retail Banking checking relationships		6,349			6,278			5,761			5,722			5,627
Retail online banking active customers		3,953			3,823			3,519			3,479			3,354
Retail online bill payment active customers		1,189			1,161			1,105			1,079			1,045

Brokerage statistics:
Financial consultants (h)		684			693			686			703			712
Full service brokerage offices		40			38			38			37			37
Brokerage account assets (billions)	$	36		$	37		$	34		$	33		$	35

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

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

(c)	Lien position, LTV, FICO and delinquency statistics are based upon balances and other data that exclude the impact of accounting for acquired loans.

(d)	Updated LTV is reported for June 30, 2012 and March 31, 2012. For previous quarters, lien positions and LTV are based upon data from loan origination. Original LTV excludes certain acquired portfolio loans where this data is not available.

(e)	Represents FICO scores that are updated monthly for home equity lines and quarterly for the home equity installment loans.

(f)	Includes non-accrual loans.

(g)	Excludes satellite offices (e.g., drive-ups, electronic branches, retirement centers) that provide limited products and/or services.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
INCOME STATEMENT
Net interest income	$	1,085		$	938		$	943		$	898		$	874		$	2,023		$	1,697
Noninterest income
Corporate service fees		248			200			226			150			193			448			376
Other		106			128			137			101			135			234			247

Noninterest income		354			328			363			251			328			682			623

Total revenue		1,439			1,266			1,306			1,149			1,202			2,705			2,320
Provision for credit losses (benefit)		33			19			(136	)		11			31			52			1
Noninterest expense		496			463			495			448			443			959			889

Pretax earnings		910			784			947			690			728			1,694			1,430
Income taxes		333			289			350			253			266			622			524

Earnings	$	577		$	495		$	597		$	437		$	462		$	1,072		$	906

AVERAGE BALANCE SHEET
Loans
Commercial	$	49,087		$	42,919		$	38,709		$	36,353		$	34,673		$	46,004		$	33,939
Commercial real estate		15,928			14,388			13,903			13,670			13,839			15,158			14,091
Commercial - real estate related		5,545			4,971			4,463			3,741			3,494			5,258			3,478
Asset-based lending		9,755			9,266			8,893			8,472			7,961			9,510			7,667
Equipment lease financing		5,911			5,706			5,529			5,457			5,483			5,808			5,511

Total loans		86,226			77,250			71,497			67,693			65,450			81,738			64,686
Goodwill and other intangible assets		3,749			3,442			3,291			3,391			3,456			3,595			3,470
Loans held for sale		1,190			1,244			1,271			1,186			1,229			1,217			1,285
Other assets		11,670			10,960			10,111			9,629			8,877			11,316			8,561

Total assets	$	102,835		$	92,896		$	86,170		$	81,899		$	79,012		$	97,866		$	78,002

Deposits
Noninterest-bearing demand	$	37,813		$	37,225		$	35,770		$	32,631		$	29,504		$	37,519		$	28,678
Money market		15,734			13,872			13,385			13,522			12,643			14,803			12,388
Other		5,933			5,372			5,617			5,781			5,149			5,653			5,601

Total deposits		59,480			56,469			54,772			51,934			47,296			57,975			46,667
Other liabilities		17,551			15,987			14,095			14,094			12,871			16,769			12,540
Capital		8,815			8,537			8,256			7,992			7,928			8,676			7,893

Total liabilities and equity	$	85,846		$	80,993		$	77,123		$	74,020		$	68,095		$	83,420		$	67,100

PERFORMANCE RATIOS
Return on average capital		26	%		23	%		29	%		22	%		23	%		25	%		23	%
Return on average assets		2.26			2.14			2.75			2.12			2.35			2.20			2.34
Noninterest income to total revenue		25			26			28			22			27			25			27
Efficiency		34			37			38			39			37			35			38

COMMERCIAL MORTGAGE SERVICING PORTFOLIO (in billions)
Beginning of period	$	268		$	267		$	267		$	268		$	266		$	267		$	266
Acquisitions/additions		7			10			12			8			13			17			23
Repayments/transfers		(11	)		(9	)		(12	)		(9	)		(11	)		(20	)		(21	)

End of period	$	264		$	268		$	267		$	267		$	268		$	264		$	268

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	354		$	343		$	323		$	319		$	309		$	697		$	624
Capital Markets (d)	$	151		$	156		$	160		$	158		$	165		$	307		$	304
Commercial mortgage loans held for sale (e)	$	34		$	13		$	38		$	23		$	23		$	47		$	52
Commercial mortgage loan servicing income, net of amortization (f)		53			54			55			38			35			107			87
Commercial mortgage servicing rights (impairment)/recovery, net of hedge		(6	)		(19	)		—			(82	)		(40	)		(25	)		(75	)

Total commercial mortgage banking activities	$	81		$	48		$	93		$	(21	)	$	18		$	129		$	64
Total loans (g)	$	88,810		$	84,329		$	73,417		$	70,307		$	66,142
Net carrying amount of commercial mortgage servicing rights (g)	$	398		$	428		$	468		$	482		$	592
Credit-related statistics:
Nonperforming assets (g)	$	1,686		$	1,776		$	1,889		$	2,033		$	2,260
Purchased impaired loans (g) (h)	$	1,088		$	1,177		$	404		$	472		$	603
Net charge-offs	$	30		$	43		$	43		$	94		$	85		$	73		$	238

(a)	See note (a) on page 14.

(b)	Represents consolidated PNC amounts. Our second quarter 2012 10-Q will include additional information regarding these items.

(c)	Includes amounts reported in net interest income and corporate service fees.

(d)	Includes amounts reported in net interest income, corporate service fees and other noninterest income.

(e)	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.

(f)	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, net of hedge is shown separately.

(g)	Presented as of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Asset Management Group (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
INCOME STATEMENT
Net interest income	$	75		$	75		$	73		$	69		$	69		$	150		$	138
Noninterest income		165			168			161			159			167			333			329

Total revenue		240			243			234			228			236			483			467
Provision for credit losses (benefit)		(1	)		10			10			(10	)		(18	)		9			(24	)
Noninterest expense		181			176			184			175			168			357			328

Pretax earnings		60			57			40			63			86			117			163
Income taxes		22			21			15			23			32			43			60

Earnings	$	38		$	36		$	25		$	40		$	54		$	74		$	103

AVERAGE BALANCE SHEET
Loans
Consumer	$	4,321		$	4,183		$	4,173		$	4,134		$	4,068		$	4,252		$	4,062
Commercial and commercial real estate		1,098			1,126			1,193			1,223			1,289			1,112			1,395
Residential mortgage		692			692			696			705			711			692			713

Total loans		6,111			6,001			6,062			6,062			6,068			6,056			6,170
Goodwill and other intangible assets		333			345			349			356			365			339			370
Other assets		215			220			233			246			220			218			246

Total assets	$	6,659		$	6,566		$	6,644		$	6,664		$	6,653		$	6,613		$	6,786

Deposits
Noninterest-bearing demand	$	1,362		$	1,575		$	1,305		$	1,307		$	1,061		$	1,468		$	1,112
Interest-bearing demand		2,674			2,637			2,529			2,315			2,309			2,656			2,301
Money market		3,535			3,651			3,625			3,591			3,548			3,593			3,577

Total transaction deposits		7,571			7,863			7,459			7,213			6,918			7,717			6,990
CDs/IRAs/savings deposits		490			549			587			620			645			519			664

Total deposits		8,061			8,412			8,046			7,833			7,563			8,236			7,654
Other liabilities		68			71			78			76			71			70			70
Capital		463			347			355			345			353			405			349

Total liabilities and equity	$	8,592		$	8,830		$	8,479		$	8,254		$	7,987		$	8,711		$	8,073

PERFORMANCE RATIOS
Return on average capital		33	%		42	%		28	%		46	%		61	%		37	%		60	%
Return on average assets		2.30			2.21			1.49			2.38			3.26			2.25			3.06
Noninterest income to total revenue		69			69			69			70			71			69			70
Efficiency		75			72			79			77			71			74			70

OTHER INFORMATION
Total nonperforming assets (b)	$	67		$	73		$	60		$	69		$	69
Purchased impaired loans (b) (c)	$	122		$	126		$	127		$	134		$	135
Total net charge-offs (recoveries)	$	3		$	2		$	6		$	5		$	—		$	5		$	(11	)

ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	102		$	104		$	100		$	95		$	102
Institutional		112			115			110			107			117

Total	$	214		$	219		$	210		$	202		$	219

Asset Type
Equity	$	116		$	119		$	111		$	104		$	121
Fixed income		66			66			66			66			65
Liquidity/Other		32			34			33			32			33

Total	$	214		$	219		$	210		$	202		$	219

Discretionary assets under management
Personal	$	71		$	73		$	69		$	65		$	70
Institutional		38			39			38			38			39

Total	$	109		$	112		$	107		$	103		$	109

Asset Type
Equity	$	56		$	58		$	53		$	49		$	56
Fixed income		38			38			38			38			37
Liquidity/Other		15			16			16			16			16

Total	$	109		$	112		$	107		$	103		$	109

Nondiscretionary assets under administration
Personal	$	31		$	31		$	31		$	30		$	32
Institutional		74			76			72			69			78

Total	$	105		$	107		$	103		$	99		$	110

Asset Type
Equity	$	60		$	61		$	58		$	55		$	65
Fixed income		28			28			28			28			28
Liquidity/Other		17			18			17			16			17

Total	$	105		$	107		$	103		$	99		$	110

(a)	See note (a) on page 14.

(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 19

Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions, except as noted	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
INCOME STATEMENT
Net interest income	$	53		$	51		$	52		$	46		$	47		$	104		$	103
Noninterest income
Loan servicing revenue
Servicing fees		52			56			53			60			63			108			113
Net MSR hedging gains		39			71			35			69			52			110			116
Loan sales revenue
Provision for residential mortgage repurchase obligations		(438	)		(32	)		(36	)		(31	)		(21	)		(470	)		(35	)
Loan sales revenue		177			141			110			103			73			318			171
Other		8			6			6			7			5			14			10

Total noninterest income		(162	)		242			168			208			172			80			375

Total revenue		(109	)		293			220			254			219			184			478
Provision for credit losses (benefit)		(2	)		(7	)		(10	)		15			(8	)		(9	)
Noninterest expense		230			203			317			203			140			433			277

Pretax earnings (loss)		(337	)		97			(87	)		36			87			(240	)		201
Income taxes (benefit)		(124	)		36			(26	)		13			32			(88	)		74

Earnings (loss)	$	(213	)	$	61		$	(61	)	$	23		$	55		$	(152	)	$	127

AVERAGE BALANCE SHEET
Portfolio loans	$	2,751		$	2,922		$	2,868		$	2,777		$	2,703		$	2,836		$	2,718
Loans held for sale		1,830			1,675			1,409			1,301			1,464			1,753			1,632
Mortgage servicing rights (MSR)		665			645			701			851			1,027			655			1,037
Other assets		6,255			6,747			6,786			5,948			5,628			6,501			5,831

Total assets	$	11,501		$	11,989		$	11,764		$	10,877		$	10,822		$	11,745		$	11,218

Deposits	$	1,783		$	1,662		$	1,756		$	1,785		$	1,569		$	1,723		$	1,578
Borrowings and other liabilities		4,067			4,353			4,324			3,788			3,253			4,209			3,696
Capital		1,157			832			832			694			667			995			698

Total liabilities and equity	$	7,007		$	6,847		$	6,912		$	6,267		$	5,489		$	6,927		$	5,972

PERFORMANCE RATIOS
Return on average capital		(74	)%		29	%		(29	)%		13	%		33	%		(31	)%		37	%
Return on average assets		(7.45	)		2.05			(2.06	)		.84			2.04			(2.60	)		2.28
Noninterest income to total revenue		149			83			76			82			79			43			78
Efficiency		(211	)		69			144			80			64			235			58

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO - THIRD-PARTY (in billions)
Beginning of period	$	121		$	118		$	121		$	125		$	127		$	118		$	125
Acquisitions					7			1									7			5
Additions		2			4			3			2			4			6			7
Repayments/transfers		(7	)		(8	)		(7	)		(6	)		(6	)		(15	)		(12	)

End of period	$	116		$	121		$	118		$	121		$	125		$	116		$	125

Servicing portfolio - third-party statistics: (b)
Fixed rate		91	%		91	%		90	%		90	%		90	%
Adjustable rate/balloon		9	%		9	%		10	%		10	%		10	%
Weighted-average interest rate		5.21	%		5.26	%		5.38	%		5.44	%		5.49	%
MSR capitalized value (in billions)	$	.6		$	.7		$	.7		$	.7		$	1.0
MSR capitalization value (in basis points)		50			60			54			56			80
Weighted-average servicing fee (in basis points)		29			29			29			29			29

OTHER INFORMATION
Loan origination volume (in billions)	$	3.6		$	3.4		$	3.0		$	2.6		$	2.6		$	7.0		$	5.8
Percentage of originations represented by:
Agency and government programs		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Refinance volume		72	%		82	%		79	%		69	%		68	%		77	%		77	%
Total nonperforming assets (b)	$	78		$	80		$	76		$	77		$	65
Purchased impaired loans (b) (c)	$	84		$	100		$	112		$	132		$	141

(a)	See note (a) on page 14.

(b)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Non-Strategic Assets Portfolio (Unaudited) (a)


	Three months ended															Six months ended
Dollars in millions	June 30 2012			March 31 2012			December 31 2011			September 30 2011			June 30 2011			June 30 2012			June 30 2011
INCOME STATEMENT
Net interest income	$	221		$	217		$	192		$	228		$	257		$	438		$	493
Noninterest income		2			(19	)		15			10			13			(17	)		22

Total revenue		223			198			207			238			270			421			515
Provision for credit losses		50			18			88			45			81			68			233
Noninterest expense		67			68			119			47			56			135			109

Pretax earnings		106			112			—			146			133			218			173
Income taxes		39			41			2			53			49			80			64

Earnings (loss)	$	67		$	71		$	(2	)	$	93		$	84		$	138		$	109

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	1,008		$	1,004		$	1,030		$	1,143		$	1,363		$	1,006		$	1,477
Lease financing		675			670			703			691			697			672			727

Total commercial lending		1,683			1,674			1,733			1,834			2,060			1,678			2,204

Consumer Lending:
Consumer		4,668			4,849			5,006			5,167			5,301			4,758			5,429
Residential real estate		6,534			6,046			5,937			6,116			6,265			6,291			6,293

Total consumer lending		11,202			10,895			10,943			11,283			11,566			11,049			11,722

Total portfolio loans		12,885			12,569			12,676			13,117			13,626			12,727			13,926
Other assets (b)		(195	)		(445	)		(368	)		(402	)		(256	)		(320	)		(183	)

Total assets	$	12,690		$	12,124		$	12,308		$	12,715		$	13,370		$	12,407		$	13,743

Deposits and other liabilities	$	180		$	177		$	85		$	76		$	137		$	179		$	148
Capital		1,311			1,176			1,213			1,273			1,422			1,244			1,397

Total liabilities and equity	$	1,491		$	1,353		$	1,298		$	1,349		$	1,559		$	1,423		$	1,545

PERFORMANCE RATIOS
Return on average capital		21	%		24	%		(1	)%		29	%		24	%		22	%		16	%
Return on average assets		2.12			2.36			(.06	)		2.90			2.52			2.24			1.60

OTHER INFORMATION
Nonperforming assets (c)	$	1,120		$	1,192		$	1,024		$	1,064		$	1,087
Purchased impaired loans (c) (d)	$	5,889		$	6,097		$	5,251		$	5,390		$	5,543
Net charge-offs	$	83		$	91		$	77		$	74		$	96		$	174		$	219
Annualized net charge-off ratio		2.59	%		2.91	%		2.41	%		2.24	%		2.83	%		2.75	%		3.17	%

LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	945		$	1,104		$	976		$	1,077		$	1,222
Lease financing		677			671			670			701			701

Total commercial lending		1,622			1,775			1,646			1,778			1,923

Consumer Lending:
Consumer		4,575			4,751			4,930			5,066			5,240
Residential real estate		6,475			6,693			5,840			6,065			6,250

Total consumer lending		11,050			11,444			10,770			11,131			11,490

Total loans	$	12,672		$	13,219		$	12,416		$	12,909		$	13,413

(a)	See note (a) on page 14.

(b)	Other assets were negative in the second quarter 2012, first quarter 2012, and 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 21

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.

Commercial mortgage banking activities - Includes commercial mortgage servicing, originating commercial mortgages for sale and related hedging activities. Commercial mortgage banking activities revenue includes commercial mortgage servicing (including net interest income and noninterest income from loan servicing and ancillary services, net of commercial mortgage servicing rights amortization, and commercial mortgage servicing rights valuations), and revenue derived from commercial mortgage loans intended for sale and related hedges (including loan origination fees, net interest income, valuation adjustments and gains or losses on sales).

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.

Core net interest income - Total net interest income less purchase accounting accretion.

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 and is based on a measurement of economic risk. 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.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 22

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.

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. PNC’s product set includes loans priced using LIBOR as a benchmark.

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%.

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.

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 nonperforming loans, TDRs and OREO and foreclosed assets, but exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under fair value option and purchased impaired loans. 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, home equity, residential real estate, credit card and other consumer customers as well as TDRs which have not returned to performing status. Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. Nonperforming loans exclude 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.


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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).

Options - Contracts that grant the purchaser, for a premium payment, the right, but not the obligation, to either purchase or sell the associated financial instrument at a set price during a specified period or at a specified date in the future.

Other real estate owned (OREO) and foreclosed assets - Assets taken in settlement of troubled loans primarily through surrender or foreclosure. Foreclosed assets include real and personal property, equity interests in corporations, partnerships, and limited liability companies.

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 - Total revenue less noninterest expense.

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

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. Accretion for purchased impaired loans includes any cash recoveries received in excess of the recorded investment.

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.


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

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 (TDR) - A loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties.

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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