PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.1

Attached files

file	filename
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d519045d8k.htm
EX-99.2 - EX-99.2 - PNC FINANCIAL SERVICES GROUP, INC.	d519045dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FIRST QUARTER 2013

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FIRST QUARTER 2013

(UNAUDITED)


	Page
Consolidated Results:

Income Statement		1
Balance Sheet		2
Capital Ratios		2
Average Balance Sheet		3-4
Details of Net Interest Margin		5
Total and Core Net Interest Income and Net Interest Margin		6
Per Share Related Information		7
Selected Income Statement Information		7
Loans, Loans Held for Sale and Net Unfunded Commitments		8
Allowances for Credit Losses		9
Purchase Accounting Accretion, Accretable Yield and Valuation of Purchased Impaired Loans		10
Nonperforming Assets and Troubled Debt Restructurings		11-12
Accruing Loans Past Due		13

Business Segment Results:

Descriptions		14
Period End Employees		14
Income and Revenue		15
Retail Banking		16-17
Corporate & Institutional Banking		18
Asset Management Group		19
Residential Mortgage Banking		20
Non-Strategic Assets Portfolio		21
Glossary of Terms		22-25

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on April 17, 2013. 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, as well as other products and services in PNC’s primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Delaware, Alabama, Virginia, Georgia, 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
In millions, except per share data	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Interest Income
Loans	$	2,029		$	2,094		$	2,076		$	2,163		$	1,951
Investment securities		470			478			504			527			526
Other		112			99			90			106			120
Total interest income		2,611			2,671			2,670			2,796			2,597
Interest Expense
Deposits		93			97			103			83			103
Borrowed funds		129			150			168			187			203
Total interest expense		222			247			271			270			306
Net interest income		2,389			2,424			2,399			2,526			2,291
Noninterest Income
Asset management		308			302			305			278			284
Consumer services		296			294			288			290			264
Corporate services		277			349			295			290			232
Residential mortgage (a) (b)		234			-			227			(173)			230
Service charges on deposits		136			150			152			144			127
Net gains on sales of securities		14			45			40			62			57
Net other-than-temporary impairments		(10)			(15)			(24)			(34)			(38)
Other (c)		311			520			406			240			285
Total noninterest income		1,566			1,645			1,689			1,097			1,441
Total revenue		3,955			4,069			4,088			3,623			3,732
Provision For Credit Losses		236			318			228			256			185
Noninterest Expense
Personnel		1,169			1,216			1,171			1,119			1,111
Occupancy		211			226			212			199			190
Equipment		183			194			185			181			175
Marketing		45			70			74			67			68
Other (d)		787			1,123			1,008			1,082			911
Total noninterest expense (e)		2,395			2,829			2,650			2,648			2,455
Income before income taxes and noncontrolling interests		1,324			922			1,210			719			1,092
Income taxes		320			203			285			173			281
Net income		1,004			719			925			546			811
Less: Net income (loss) attributable to noncontrolling interests		(9)			1			(14)			(5)			6
Preferred stock dividends and discount accretion		75			54			63			25			39
Net income attributable to common shareholders	$	938		$	664		$	876		$	526		$	766
Earnings Per Common Share
Basic	$	1.78		$	1.26		$	1.66		$	1.00		$	1.45
Diluted	$	1.76		$	1.24		$	1.64		$	.98		$	1.44
Average Common Shares Outstanding
Basic		526			526			526			527			526
Diluted		528			528			529			530			529
Efficiency		61	%		70	%		65	%		73	%		66	%
Noninterest income to total revenue		40	%		40	%		41	%		30	%		39	%
Effective tax rate (f)		24.2	%		22.0	%		23.6	%		24.1	%		25.7	%

For additional information regarding footnotes (b) through (e) below, refer to Selected Consolidated Income Statement Information on page 7.

(a)	Residential mortgage income for the three months ended December 31, 2012 was less than $.5 million.

(b)	Includes provision for residential mortgage repurchase obligations.

(c)	Includes gains on sales of Visa Class B common shares.

(d)	Includes expenses for residential mortgage foreclosure-related matters, the goodwill impairment charge for the Residential Mortgage Banking segment and noncash charges for unamortized discounts related to redemption of trust preferred securities.

(e)	Includes integration costs.

(f)	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 PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Consolidated Balance Sheet (Unaudited)


In millions, except par value	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Assets
Cash and due from banks (a)	$	3,948		$	5,220		$	4,284		$	4,136		$	4,162
Federal funds sold and resale agreements (b)		1,274			1,463			1,724			1,646			1,371
Trading securities		2,243			2,096			2,664			2,121			2,639
Interest-earning deposits with banks (a)		1,541			3,984			2,321			3,995			2,084
Loans held for sale (b)		3,295			3,693			2,737			3,333			2,456
Investment securities (a)		59,361			61,406			62,814			61,937			64,554
Loans (a) (b)		186,504			185,856			181,864			180,425			176,214
Allowance for loan and lease losses (a)		(3,828)			(4,036)			(4,039)			(4,156)			(4,196)
Net loans		182,676			181,820			177,825			176,269			172,018
Goodwill		9,075			9,072			9,163			9,158			9,169
Other intangible assets		1,921			1,797			1,778			1,804			2,019
Equity investments (a) (c)		11,008			10,877			10,846			10,617			10,352
Other (a) (b)		24,470			23,679			24,647			24,559			25,059
Total assets	$	300,812		$	305,107		$	300,803		$	299,575		$	295,883

Liabilities
Deposits
Noninterest-bearing	$	64,652		$	69,980		$	64,484		$	64,476		$	62,463
Interest-bearing		146,968			143,162			141,779			142,447			143,664
Total deposits		211,620			213,142			206,263			206,923			206,127
Borrowed funds
Federal funds purchased and repurchase agreements		4,000			3,327			3,877			4,166			4,832
Federal Home Loan Bank borrowings		5,483			9,437			9,942			10,440			8,957
Bank notes and senior debt		10,918			10,429			9,960			10,185			12,065
Subordinated debt		7,996			7,299			6,754			7,593			8,221
Commercial paper (a)		6,953			8,453			10,731			9,469			6,870
Other (a)		2,297			1,962			1,840			1,836			1,594
Total borrowed funds		37,647			40,907			43,104			43,689			42,539
Allowance for unfunded loan commitments and letters of credit		238			250			239			224			243
Accrued expenses (a)		4,181			4,449			4,015			3,428			3,607
Other (a)		5,048			4,594			5,380			5,097			5,131
Total liabilities		258,734			263,342			259,001			259,361			257,647

Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 538, 538, 538, 537 and 537 shares		2,690			2,690			2,689			2,687			2,685
Capital surplus - preferred stock		3,591			3,590			3,559			3,120			1,638
Capital surplus - common stock and other		12,174			12,193			12,149			12,098			12,074
Retained earnings		20,993			20,265			19,813			19,149			18,834
Accumulated other comprehensive income (loss)		767			834			991			402			281
Common stock held in treasury at cost: 9, 10, 9, 8 and 9 shares		(552)			(569)			(518)			(451)			(467)
Total shareholders’ equity		39,663			39,003			38,683			37,005			35,045
Noncontrolling interests		2,415			2,762			3,119			3,209			3,191
Total equity		42,078			41,765			41,802			40,214			38,236
Total liabilities and equity	$	300,812		$	305,107		$	300,803		$	299,575		$	295,883
Capital Ratios
Tier 1 common (e)		9.8	%		9.6	%		9.5	%		9.3	%		9.3	%
Tier 1 risk-based (e)		11.7			11.6			11.7			11.4			11.4
Total risk-based (e)		14.9			14.7			14.5			14.2			14.4
Leverage (e)		10.4			10.4			10.4			10.1			10.5
Common shareholders’ equity to assets		12.0			11.6			11.7			11.3			11.3

(a)	Amounts include consolidated variable interest entities. Our 2012 Form 10-K included, and first quarter 2013 Form 10-Q will include, additional information regarding these items.

(b)	Amounts include assets for which PNC has elected the fair value option. Our 2012 Form 10-K included, and first quarter 2013 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 March 31, 2013 is estimated.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended
In millions	March 31 2013		December 31 2012		September 30 2012		June 30 2012		March 31 2012
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	25,168	$	25,552	$	26,546	$	26,968	$	27,031
Non-agency		6,025		6,245		6,490		6,716		6,577
Commercial mortgage-backed		3,745		3,674		3,720		3,561		3,774
Asset-backed		5,731		5,643		5,525		5,401		4,329
U.S. Treasury and government agencies		2,715		2,746		2,516		2,549		3,123
State and municipal		2,189		2,034		1,972		1,902		1,770
Other debt		2,649		2,860		3,045		3,178		2,996
Corporate stocks and other		368		346		390		317		347
Total securities available for sale		48,590		49,100		50,204		50,592		49,947
Securities held to maturity
Residential mortgage-backed		4,146		4,377		4,480		4,259		4,576
Commercial mortgage-backed		3,747		3,967		4,180		4,376		4,635
Asset-backed		826		702		825		874		1,170
U.S. Treasury and government agencies		231		229		227		225		223
State and municipal		639		664		671		671		671
Other		352		355		357		359		361
Total securities held to maturity		9,941		10,294		10,740		10,764		11,636
Total investment securities		58,531		59,394		60,944		61,356		61,583
Loans
Commercial		83,476		80,876		79,250		77,131		69,286
Commercial real estate		18,850		18,678		18,514		18,440		16,818
Equipment lease financing		7,241		6,956		6,774		6,586		6,377
Consumer		61,411		61,430		60,570		59,832		57,148
Residential real estate		15,121		15,257		15,575		15,932		14,927
Total loans		186,099		183,197		180,683		177,921		164,556
Loans held for sale		3,279		3,025		2,956		3,016		2,910
Federal funds sold and resale agreements		1,176		1,290		1,601		1,666		1,821
Other		7,095		6,737		6,422		6,173		6,864
Total interest-earning assets		256,180		253,643		252,606		250,132		237,734
Noninterest-earning assets:
Allowance for loan and lease losses		(3,937)		(3,987)		(4,152)		(4,176)		(4,314)
Cash and due from banks		4,055		4,126		3,907		3,694		3,777
Other		47,147		48,349		47,781		46,501		44,345
Total assets	$	303,445	$	302,131	$	300,142	$	296,151	$	281,542

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

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


	Three months ended
In millions	March 31 2013		December 31 2012		September 30 2012		June 30 2012		March 31 2012
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	69,003	$	67,997	$	67,628	$	66,902	$	61,162
Demand		39,372		36,619		34,733		34,388		31,599
Savings		10,671		10,190		10,066		10,008		9,183
Retail certificates of deposit		23,488		24,394		25,695		27,373		29,011
Time deposits in foreign offices and other time		2,267		2,740		3,230		3,577		3,238

Total interest-bearing deposits		144,801		141,940		141,352		142,248		134,193
Borrowed funds
Federal funds purchased and repurchase agreements		4,328		4,023		4,659		4,937		4,551
Federal Home Loan Bank borrowings		7,657		8,877		10,626		10,238		8,967
Bank notes and senior debt		10,469		9,702		9,657		10,618		11,138
Subordinated debt		7,249		6,668		6,408		7,293		7,719
Commercial paper		7,967		9,069		10,518		8,229		5,684
Other		2,057		1,961		1,868		1,809		2,153

Total borrowed funds		39,727		40,300		43,736		43,124		40,212

Total interest-bearing liabilities		184,528		182,240		185,088		185,372		174,405
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		64,850		65,527		62,483		60,478		57,900
Allowance for unfunded loan commitments and letters of credit		249		239		225		243		240
Accrued expenses and other liabilities		11,891		12,237		11,590		10,375		11,186
Equity		41,927		41,888		40,756		39,683		37,811

Total liabilities and equity	$	303,445	$	302,131	$	300,142	$	296,151	$	281,542
(a) Calculated using average daily balances.

Supplemental Average Balance Sheet Information (Unaudited)

Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	144,801	$	141,940	$	141,352	$	142,248	$	134,193
Noninterest-bearing deposits		64,850		65,527		62,483		60,478		57,900

Total deposits	$	209,651	$	207,467	$	203,835	$	202,726	$	192,093

Transaction deposits	$	173,225	$	170,143	$	164,844	$	161,768	$	150,661

Common shareholders’ equity	$	35,628	$	35,296	$	34,323	$	33,648	$	32,981


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Details of Net Interest Margin (Unaudited) (a)


	Three months ended
	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency		2.90	%		2.94	%		3.03	%		3.17	%		3.14	%
Non-agency		5.40			5.39			5.08			5.63			5.38
Commercial mortgage-backed		4.02			3.81			4.29			4.41			4.42
Asset-backed		1.92			1.93			2.09			1.91			2.24
U.S. Treasury and government agencies		1.65			1.76			2.08			2.33			1.80
State and municipal		4.93			4.66			4.62			4.63			5.13
Other debt		2.58			2.91			2.85			2.56			2.55
Corporate stocks and other		.12			.24			.12			.11			.03
Total securities available for sale		3.16			3.19			3.27			3.40			3.38
Securities held to maturity
Residential mortgage-backed		3.44			3.34			3.50			3.70			3.58
Commercial mortgage-backed		4.71			4.50			4.46			4.56			4.62
Asset-backed		1.80			1.76			2.61			1.83			1.68
U.S. Treasury and government agencies		3.77			3.82			3.81			3.79			3.79
State and municipal		4.23			4.23			4.18			4.20			4.18
Other		2.82			2.89			2.82			2.89			2.83
Total securities held to maturity		3.82			3.73			3.83			3.90			3.82
Total investment securities		3.27			3.28			3.37			3.49			3.47
Loans
Commercial		4.03			4.16			4.30			4.75			4.51
Commercial real estate		5.05			5.57			5.26			5.78			5.19
Equipment lease financing		4.05			4.26			4.45			4.96			4.74
Consumer		4.67			4.68			4.63			4.67			4.78
Residential real estate		5.29			5.36			5.18			5.44			5.59
Total loans		4.45			4.58			4.59			4.90			4.78
Loans held for sale		6.49			5.34			4.34			6.00			6.89
Federal funds sold and resale agreements		.74			1.04			1.22			1.45			1.58
Other		3.25			3.24			3.27			3.62			3.71
Total yield on interest-earning assets		4.15			4.24			4.24			4.51			4.41
Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.19			.19			.21			.21			.23
Demand		.04			.04			.04			.04			.04
Savings		.10			.09			.09			.10			.10
Retail certificates of deposit		.85			.89			.90			.57			.80
Time deposits in foreign offices and other time		.61			.45			.38			.49			.49
Total interest-bearing deposits		.26			.27			.29			.24			.31
Borrowed funds
Federal funds purchased and repurchase agreements		.16			.20			.19			.21			.22
Federal Home Loan Bank borrowings		.61			.70			.69			.74			.80
Bank notes and senior debt		1.83			2.07			2.16			2.30			2.48
Subordinated debt		2.83			3.57			4.71			4.77			5.09
Commercial paper		.25			.28			.28			.26			.26
Other		2.28			2.78			2.43			2.25			2.05
Total borrowed funds		1.30			1.46			1.53			1.72			2.01
Total rate on interest-bearing liabilities		.48			.54			.58			.58			.70

Interest rate spread		3.67			3.70			3.66			3.93			3.71
Impact of noninterest-bearing sources		.14			.15			.16			.15			.19

Net interest margin		3.81	%		3.85	%		3.82	%		4.08	%		3.90	%

(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 March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, were $40 million, $42 million, $36 million, $35 million and $31 million, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Total and Core Net Interest Income and Net Interest Margin (Unaudited)


Total and Core Net Interest Income


	Three months ended
In millions	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Core net interest income (a)	$	2,140		$	2,151		$	2,154		$	2,183		$	2,028
Purchase accounting accretion (a)		249			273			245			343			263

Total net interest income	$	2,389		$	2,424		$	2,399		$	2,526		$	2,291

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

Details of Net Interest Margin (b)

	Three months ended
In millions	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Average yields/rates
Yield on interest earning assets
Total investment securities		3.27	%		3.28	%		3.37	%		3.49	%		3.47	%
Total loans		4.45			4.58			4.59			4.90			4.78
Other		3.91			3.56			3.26			3.95			4.17
Total yield on interest earning assets		4.15			4.24			4.24			4.51			4.41

Rate on interest-bearing liabilities
Total interest-bearing deposits		.26			.27			.29			.24			.31
Total borrowed funds		1.30			1.46			1.53			1.72			2.01
Total rate on interest-bearing liabilities		.48			.54			.58			.58			.70

Interest rate spread		3.67			3.70			3.66			3.93			3.71
Impact of noninterest-bearing sources		.14			.15			.16			.15			.19

Net interest margin		3.81	%		3.85	%		3.82	%		4.08	%		3.90	%

(b) See note (a) on page 5.

Details of Core Net Interest Margin (c)

	Three months ended
In millions	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
Average yields/rates
Yield on interest earning assets
Total investment securities		3.21	%		3.17	%		3.27	%		3.37	%		3.41	%
Total loans		3.96			4.02			4.09			4.25			4.32
Other		3.22			3.35			3.11			3.73			3.65
Total yield on interest earning assets		3.75			3.80			3.85			4.01			4.05

Rate on interest-bearing liabilities
Total interest-bearing deposits		.29			.31			.34			.39			.54
Total borrowed funds		1.09			1.23			1.31			1.50			1.76
Total rate on interest-bearing liabilities		.46			.52			.57			.64			.81

Interest rate spread		3.29			3.28			3.28			3.37			3.24
Impact of noninterest-bearing sources		.14			.15			.16			.15			.19

Core net interest margin		3.43			3.43			3.44			3.52			3.43
Purchase accounting accretion impact on net interest margin		.38			.42			.38			.56			.47

Net interest margin		3.81	%		3.85	%		3.82	%		4.08	%		3.90	%

(c)	We believe that core net interest margin, a non-GAAP measure, is useful as a tool to help evaluate the impact of purchase accounting accretion on net interest margin. The adjustment represents annualized purchase accounting accretion divided by average interest-earning assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Per Share Related Information (Unaudited)


	Three months ended
	March 31		December 31		September 30		June 30		March 31
In millions, except per share data	2013		2012		2012		2012		2012
Basic
Net income	$	1,004	$	719	$	925	$	546	$	811
Less:
Net income (loss) attributable to noncontrolling interests		(9)		1		(14)		(5)		6
Preferred stock dividends and discount accretion and redemptions		75		54		63		25		39
Dividends and undistributed earnings allocated to nonvested restricted shares		4		4		5		1		4

Net income attributable to basic common shares	$	934	$	660	$	871	$	525	$	762
Basic weighted-average common shares outstanding		526		526		526		527		526
Basic earnings per common share	$	1.78	$	1.26	$	1.66	$	1.00	$	1.45
Diluted
Net income attributable to basic common shares	$	934	$	660	$	871	$	525	$	762
Less: BlackRock common stock equivalents		5		4		3		4		3

Net income attributable to diluted common shares	$	929	$	656	$	868	$	521	$	759
Basic weighted-average common shares outstanding		526		526		526		527		526
Dilutive potential common shares		2		2		3		3		3

Diluted weighted-average common shares outstanding		528		528		529		530		529
Diluted earnings per common share	$	1.76	$	1.24	$	1.64	$	.98	$	1.44

Selected Consolidated Income Statement Information (Unaudited)
	Three months ended
	March 31		December 31		September 30		June 30		March 31
In millions, except per share data	2013		2012		2012		2012		2012
Noninterest Income
Provision for residential mortgage repurchase obligations (Pre-tax)	$	(4)	$	(254)	$	(37)	$	(438)	$	(32)
Impact on diluted earnings per share (a)		(.00)		(.31)		(.05)		(.54)		(.04)
Gain on sale of Visa Class B common shares (Pre-tax)			$	130	$	137
Impact on diluted earnings per share (a)				.16		.17
Noninterest Expense
Goodwill impairment charge for Residential Mortgage Banking segment (Pre-tax)			$	45
Impact on diluted earnings per share (a)				(.08)
Expenses for residential mortgage foreclosure-related matters (Pre-tax)	$	15	$	91	$	53	$	43	$	38
Impact on diluted earnings per share (a)		(.02)		(.11)		(.06)		(.05)		(.05)
Noncash charges for unamortized discounts related to redemption of trust preferred securities (Pre-tax)			$	70	$	95	$	130
Impact on diluted earnings per share (a)				(.09)		(.12)		(.16)
Integration costs (Pre-tax)			$	35	$	35	$	52	$	145
Impact on diluted earnings per share (a)				(.04)		(.04)		(.06)		(.18)

(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 statutory federal income tax rate of 35%, excluding the goodwill impairment charge which was considered nondeductible for income tax purposes.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Details of Loans (Unaudited)


	March 31		December 31		September 30		June 30		March 31
In millions	2013		2012		2012		2012		2012
Commercial
Retail/wholesale trade	$	14,109	$	13,801	$	13,381	$	13,434	$	12,983
Manufacturing		14,139		13,856		13,498		13,442		12,684
Service providers		12,568		12,095		11,822		11,875		11,215
Real estate related (a)		10,274		10,616		10,208		10,051		10,091
Financial services (b)		9,679		9,026		9,136		9,397		8,273
Health care		7,392		7,267		6,652		6,240		5,695
Other industries		16,124		16,379		14,971		14,462		14,574
Total commercial		84,285		83,040		79,668		78,901		75,515
Commercial real estate
Real estate projects (c)		12,596		12,347		12,801		12,837		12,589
Commercial mortgage		6,183		6,308		5,808		5,643		5,945
Total commercial real estate		18,779		18,655		18,609		18,480		18,534
Equipment lease financing		7,240		7,247		6,923		6,764		6,594
Total commercial lending		110,304		108,942		105,200		104,145		100,643
Consumer
Home equity
Lines of credit		23,029		23,576		24,007		24,360		24,668
Installment		13,001		12,344		11,871		11,478		11,076
Credit card		4,081		4,303		4,135		4,123		4,089
Other consumer
Education		8,048		8,238		8,415		8,807		9,246
Automobile		8,716		8,708		8,328		7,166		5,794
Other		4,340		4,505		4,525		4,523		4,486
Total consumer		61,215		61,674		61,281		60,457		59,359
Residential real estate
Residential mortgage		14,217		14,430		14,505		14,927		15,287
Residential construction		768		810		878		896		925
Total residential real estate		14,985		15,240		15,383		15,823		16,212
Total consumer lending		76,200		76,914		76,664		76,280		75,571
Total loans (d)	$	186,504	$	185,856	$	181,864	$	180,425	$	176,214
(a) Includes loans to customers in the real estate and construction industries.
(b) Includes loans issued to a Financing Special Purpose Entity which holds receivables from other industries within Commercial Lending.
(c) Includes both construction loans and intermediate financing for projects.
(d) Includes purchased impaired loans:	$	7,073	$	7,406	$	7,749	$	8,083	$	8,421

Details of Loans Held for Sale (Unaudited)

	March 31		December 31		September 30		June 30		March 31
In millions	2013		2012		2012		2012		2012
Commercial mortgage	$	895	$	1,392	$	1,183	$	1,021	$	1,014
Residential mortgage		2,331		2,220		1,477		1,939		1,387
Other		69		81		77		373		55
Total	$	3,295	$	3,693	$	2,737	$	3,333	$	2,456

Net Unfunded Commitments (Unaudited)

	March 31		December 31		September 30		June 30		March 31
In millions	2013		2012		2012		2012		2012
Net unfunded commitments	$	121,812	$	120,592	$	118,285	$	113,636	$	112,454


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

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

Change in Allowance for Loan and Lease Losses


	March 31			December 31			September 30			June 30			March 31
Three months ended - in millions	2013			2012			2012			2012			2012
Beginning balance	$	4,036		$	4,039		$	4,156		$	4,196		$	4,347
Charge-offs:
Commercial		(114)			(126)			(114)			(123)			(111)
Commercial real estate		(86)			(72)			(83)			(75)			(84)
Equipment lease financing		(3)			(4)			(2)			(5)			(5)
Home equity (a)		(194)			(141)			(167)			(121)			(131)
Residential real estate (a)		(79)			(18)			(25)			(37)			(30)
Credit card (a)		(50)			(43)			(47)			(55)			(55)
Other consumer (a)		(43)			(56)			(43)			(46)			(51)
Total charge-offs (b)		(569)			(460)			(481)			(462)			(467)
Recoveries:
Commercial		63			77			76			75			72
Commercial real estate		13			29			34			29			23
Equipment lease financing		6			8			7			6			9
Home equity		13			15			16			17			13
Residential real estate		(1)						(1)			1			(1)
Credit card		5			9			6			6			5
Other consumer		14			12			12			13			13
Total recoveries		113			150			150			147			134
Net (charge-offs) recoveries:
Commercial		(51)			(49)			(38)			(48)			(39)
Commercial real estate		(73)			(43)			(49)			(46)			(61)
Equipment lease financing		3			4			5			1			4
Home equity		(181)			(126)			(151)			(104)			(118)
Residential real estate		(80)			(18)			(26)			(36)			(31)
Credit card		(45)			(34)			(41)			(49)			(50)
Other consumer		(29)			(44)			(31)			(33)			(38)
Total net charge-offs		(456)			(310)			(331)			(315)			(333)
Provision for credit losses		236			318			228			256			185
Other								1
Net change in allowance for unfunded loan commitments and letters of credit		12			(11)			(15)			19			(3)
Ending balance	$	3,828		$	4,036		$	4,039		$	4,156		$	4,196
Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized) (b)		.99	%		.67	%		.73	%		.71	%		.81	%
Allowance for loan and lease losses to total loans		2.05			2.17			2.22			2.30			2.38
Commercial lending net charge-offs	$	(121)		$	(88)		$	(82)		$	(93)		$	(96)
Consumer lending net charge-offs		(335)			(222)			(249)			(222)			(237)
Total net charge-offs	$	(456)		$	(310)		$	(331)		$	(315)		$	(333)
Net charge-offs to average loans
Commercial lending		.45	%		.33	%		.31	%		.37	%		.42	%
Consumer lending		1.78			1.15			1.30			1.18			1.32

(a)

Pursuant to regulatory guidance issued in the third quarter of 2012, additional consumer charge-offs of $45.2 million and $82.9 million have been taken as of December 31, 2012 and September 30, 2012, respectively, related to changes in treatment of certain loans where borrowers have been discharged from personal liability under bankruptcy protection where no formal affirmation of the loan obligation was provided by the borrower. Such loans have been classified as troubled debt restructurings (TDRs) and have been reported based upon fair value of the collateral less costs to sell.

(b)

Pursuant to alignment with interagency guidance on practices for loans and lines of credit related to consumer lending in the first quarter of 2013, additional charge-offs of $134 million have been taken. Excluding the impact of these additional charge-offs, annualized net charge-offs to average loans for the first quarter 2013 was 0.70%.

Change in Allowance for Unfunded Loan Commitments and Letters of Credit


	March 31		December 31		September 30		June 30		March 31
Three months ended - in millions	2013		2012		2012		2012		2012
Beginning balance	$	250	$	239	$	224	$	243	$	240
Net change in allowance for unfunded loan commitments and letters of credit		(12)		11		15		(19)		3
Ending balance	$	238	$	250	$	239	$	224	$	243


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

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

Accretion - Purchased Impaired Loans


	Three months ended
	March 31		December 31		March 31
In millions	2013		2012		2012
Impaired loans
Scheduled accretion	$	157	$	160	$	158
Reversal of contractual interest on impaired loans		(85)		(93)		(97)
Scheduled accretion net of contractual interest		72		67		61
Excess cash recoveries		50		45		40
Total impaired loans	$	122	$	112	$	101

Purchased Impaired Loans - Accretable Yield


In millions			In millions
January 1, 2013	$	2,166	January 1, 2012	$	2,109
			Addition due to RBC Bank (USA) acquisition on March 2, 2012		587
Scheduled accretion		(157)	Scheduled accretion		(158)
Excess cash recoveries		(50)	Excess cash recoveries		(40)
Net reclassifications to accretable from non-accretable and other activity (a)		213	Net reclassifications to accretable from non-accretable and other activity		(29)

March 31, 2013 (b)	$	2,172	March 31, 2012	$	2,469

(a) Over 48 percent of the net reclassifications were driven by the commercial portfolio. Approximately half of the commercial portfolio impact related to excess cash recoveries recognized during the period, with the remaining due to improvements of cash expected to be collected on both RBC Bank (USA) and National City loans in future periods. The remaining net reclassifications were due to future cash flow changes in the consumer portfolio.

(b) As of March 31, 2013, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $1.2 billion in future periods. This will offset the total net accretable interest in future interest income of $2.2 billion on purchased impaired loans.

Valuation of Purchased Impaired Loans


	March 31, 2013				December 31, 2012
Dollars in millions	Balance		Net Investment		Balance	Net Investment
Commercial and commercial real estate loans:
Unpaid principal balance	$	1,465			$ 1,680
Purchased impaired mark		(386)			(431)

Recorded investment		1,079			1,249
Allowance for loan losses		(198)			(239)

Net investment		881		60%	1,010		60%

Consumer and residential mortgage loans:
Unpaid principal balance		6,359			6,639
Purchased impaired mark		(365)			(482)

Recorded investment		5,994			6,157
Allowance for loan losses		(911)			(858)

Net investment		5,083		80%	5,299		80%

Total purchased impaired loans:
Unpaid principal balance		7,824			8,319
Purchased impaired mark		(751)			(913)

Recorded investment		7,073			7,406
Allowance for loan losses		(1,109)			(1,097)

Net investment	$	5,964		76%	$6,309		76%


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


	March 31			December 31			September 30			June 30			March 31
In millions	2013			2012			2012			2012			2012
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	62		$	61		$	88		$	110		$	108
Manufacturing		75			73			104			141			107
Service providers		112			124			144			145			149
Real estate related (b)		161			178			236			214			232
Financial services		13			9			13			15			20
Health care		21			25			26			22			23
Other industries		98			120			138			144			200
Total commercial		542			590			749			791			839
Commercial real estate
Real estate projects		606			654			802			924			977
Commercial mortgage		138			153			198			218			274
Total commercial real estate		744			807			1,000			1,142			1,251
Equipment lease financing		9			13			15			19			21
Total commercial lending		1,295			1,410			1,764			1,952			2,111
Consumer lending (c)
Home equity (d)		1,088			951			818			722			685
Residential real estate
Residential mortgage (d) (e)		952			824			766			707			684
Residential construction		13			21			24			32			44
Credit card		6			5			5			6			12
Other consumer (d)		68			43			37			39			45
Total consumer lending (f)		2,127			1,844			1,650			1,506			1,470
Total nonperforming loans (g)		3,422			3,254			3,414			3,458			3,581
OREO and foreclosed assets
Other real estate owned (OREO) (h)		472			507			578			670			749
Foreclosed and other assets		33			33			29			48			31
Total OREO and foreclosed assets		505			540			607			718			780
Total nonperforming assets	$	3,927		$	3,794		$	4,021		$	4,176		$	4,361
Nonperforming loans to total loans		1.83	%		1.75	%		1.88	%		1.92	%		2.03	%
Nonperforming assets to total loans, OREO and foreclosed assets		2.10			2.04			2.20			2.31			2.46
Nonperforming assets to total assets		1.31			1.24			1.34			1.39			1.47
Allowance for loan and lease losses to nonperforming loans (i)		112			124			118			120			117

(a)	See analysis of troubled debt restructurings (TDRs) on page 12.

(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)

Pursuant to alignment with interagency guidance on practices for loans and lines of credit related to consumer lending in the first quarter of 2013, nonperforming home equity loans increased $214 million, nonperforming residential mortgage loans increased $187 million and nonperforming other consumer loans increased $25 million. Charge-offs have been taken on these loans where the fair value less costs to sell the collateral was less than the recorded investment of the loan and were $134 million.

(e)	Nonperforming residential mortgage excludes loans of $123 million, $69 million, $61 million, $55 million and $55 million accounted for under the fair value option as of March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, respectively.

(f)

Pursuant to regulatory guidance issued in the third quarter of 2012, nonperforming consumer loans, primarily home equity and residential mortgage, increased $199 million and $112 million in the fourth and third quarters of 2012, respectively, related to changes in treatment of certain loans classified as TDRs, net of charge-offs, resulting from bankruptcy where no formal reaffirmation was provided by the borrower and therefore a concession has been granted based upon discharge from personal liability. Charge-offs have been taken where the fair value less costs to sell the collateral was less than the recorded investment of the loan and were $45.2 million and $82.9 million, respectively.

(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 $383 million, $380 million, $363 million, $262 million and $252 million at March 31, 2013, December 31, 2012, September 30, 2012, June 30, 2012 and March 31, 2012, 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 12

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Change in Nonperforming Assets


In millions	January 1, 2013 - March 31, 2013		October 1, 2012 - December 31, 2012		July 1, 2012 - September 30, 2012		April 1, 2012 - June 30, 2012		January 1, 2012 - March 31, 2012
Beginning balance	$	3,794	$	4,021	$	4,176	$	4,361	$	4,156
New nonperforming assets		1,032		804		861		797		1,186
Charge-offs and valuation adjustments		(343)		(297)		(392)		(293)		(236)
Principal activity, including paydowns and payoffs		(258)		(532)		(438)		(428)		(414)
Asset sales and transfers to loans held for sale		(114)		(134)		(162)		(168)		(146)
Returned to performing status		(184)		(68)		(24)		(93)		(185)
Ending balance	$	3,927	$	3,794	$	4,021	$	4,176	$	4,361

Largest Individual Nonperforming Assets at March 31, 2013 (a)


In millions
Ranking	Outstandings		Industry
1	$	37	Real Estate, Rental and Leasing
2		34	Real Estate, Rental and Leasing
3		19	Real Estate, Rental and Leasing
4		17	Real Estate, Rental and Leasing
5		16	Construction
6		14	Real Estate, Rental and Leasing
7		12	Other Real Estate Owned
8		11	Real Estate, Rental and Leasing
9		11	Other Industries
10		11	Other Industries
Total	$	182
As a percent of total nonperforming assets 4%

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

Summary of Troubled Debt Restructurings


	March 31		December 31		September 30		June 30		March 31
In millions	2013		2012		2012		2012		2012
Total commercial lending	$	610	$	541	$	556	$	483	$	412
Total consumer lending (a)		2,231		2,318		2,019		1,836		1,821
Total TDRs	$	2,841	$	2,859	$	2,575	$	2,319	$	2,233
Nonperforming	$	1,517	$	1,589	$	1,383	$	1,189	$	1,095
Accruing (b)		1,103		1,037		950		878		865
Credit card (c)		221		233		242		252		273
Total TDRs	$	2,841	$	2,859	$	2,575	$	2,319	$	2,233

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)

Pursuant to regulatory guidance issued in the third quarter of 2012, additional troubled debt restructurings related to changes in treatment of certain loans of $245.7 million and $154.8 million in the fourth and third quarters of 2012, respectively, net of charge-offs, resulting from bankruptcy where no formal reaffirmation was provided by the borrower and therefore a concession has been granted based upon discharge from personal liability were added to the consumer lending population. The additional TDR population increased nonperforming loans by $199 million and $112 million, respectively. Charge-offs have been taken where the fair value less costs to sell the collateral was less than the recorded investment of the loan and were $45.2 million and $82.9 million, respectively.

(b)

Accruing loans have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans. Loans where borrowers have been discharged from bankruptcy and have not formally reaffirmed their loan obligation are generally not returned to accrual status.

(c)

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 13

Accruing Loans Past Due (Unaudited)

Accruing Loans Past Due 30 to 59 Days (a) (b)


	Amount									Percent of Total Outstandings
Dollars in millions	Mar. 31 2013		Dec. 31 2012		Sept. 30 2012		Jun. 30 2012		Mar. 31 2012	Mar. 31 2013			Dec. 31 2012			Sept. 30 2012			Jun. 30 2012			Mar. 31 2012
Commercial	$	163	$	115	$	141	$	130	$ 195		.19	%		.14	%		.18	%		.16	%		.26	%
Commercial real estate		111		100		91		123	144		.59			.54			.49			.67			.78
Equipment lease financing		34		17		8		5	25		.47			.23			.12			.07			.38
Home equity		86		117		130		124	127		.24			.33			.36			.35			.36
Residential real estate
Non government insured		145		151		147		148	198		.97			.99			.96			.94			1.22
Government insured		114		127		127		123	122		.76			.83			.80			.78			.75
Credit card		30		34		31		33	34		.74			.79			.75			.80			.83
Other consumer
Non government insured		49		65		54		43	50		.23			.30			.25			.21			.26
Government insured		162		193		154		164	171		.77			.90			.72			.80			.88
Total	$	894	$	919	$	883	$	893	$ 1,066		.48			.49			.49			.49			.60

Accruing Loans Past Due 60 to 89 Days (a) (b)

	Amount									Percent of Total Outstandings
Dollars in millions	Mar. 31 2013		Dec. 31 2012		Sept. 30 2012		Jun. 30 2012		Mar. 31 2012	Mar. 31 2013			Dec. 31 2012			Sept. 30 2012			Jun. 30 2012			Mar. 31 2012
Commercial	$	35	$	55	$	92	$	65	$ 53		.04	%		.07	%		.12	%		.08	%		.07	%
Commercial real estate		36		57		66		105	44		.19			.31			.35			.57			.24
Equipment lease financing		1		1		5		2	2		.01			.01			.07			.03			.03
Home equity		33		58		69		68	79		.09			.16			.19			.19			.22
Residential real estate
Non government insured		41		49		52		52	56		.27			.32			.34			.33			.35
Government insured		86		97		94		91	100		.57			.64			.59			.58			.62
Credit card		20		23		20		22	24		.49			.53			.48			.53			.59
Other consumer
Non government insured		15		21		23		16	20		.07			.10			.11			.08			.10
Government insured		86		110		121		113	98		.41			.51			.57			.55			.50
Total	$	353	$	471	$	542	$	534	$ 476		.19			.25			.30			.30			.27

Accruing Loans Past Due 90 Days or More (a) (b)

	Amount									Percent of Total Outstandings
Dollars in millions	Mar. 31 2013		Dec. 31 2012		Sept. 30 2012		Jun. 30 2012		Mar. 31 2012	Mar. 31 2013			Dec. 31 2012			Sept. 30 2012			Jun. 30 2012			Mar. 31 2012
Commercial	$	27	$	42	$	41	$	34	$ 28		.03	%		.05	%		.05	%		.04	%		.04	%
Commercial real estate		3		15		36		16	5		.02			.08			.19			.09			.03
Equipment lease financing				2		1		1	5					.03			.01			.01			.08
Residential real estate
Non government insured		59		46		97		104	116		.39			.30			.63			.66			.72
Government insured		1,458		1,855		1,896		1,925	2,012		9.73			12.17			11.98			12.17			12.41
Credit card		35		36		32		38	47		.86			.84			.77			.92			1.15
Other consumer
Non government insured		13		18		18		17	21		.06			.08			.08			.08			.11
Government insured		311		337		335		348	351		1.47			1.57			1.58			1.70			1.80
Total	$	1,906	$	2,351	$	2,456	$	2,483	$ 2,585		1.02			1.26			1.35			1.38			1.47

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

(b)

Pursuant to alignment with interagency guidance on practices for loans and lines of credit related to consumer lending in the first quarter of 2013, accruing consumer loans past due 30 - 59 days decreased $44 million, accruing consumer loans past due 60 - 89 days decreased $36 million and accruing consumer loans past due 90 days or more decreased $315 million, of which, $295 million related to residential real estate government insured loans. As part of this alignment, these loans were moved into nonaccrual status.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

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, online banking and mobile channels. The branch network is located primarily in Pennsylvania, Ohio, New Jersey, Michigan, Illinois, Maryland, Indiana, North Carolina, Florida, Kentucky, Washington, D.C., Delaware, Alabama, Virginia, Georgia, 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 investment 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 administration services. Institutional clients include corporations, unions, municipalities, non-profits, foundations and endowments primarily located 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 of 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 loan applications are brokered by majority owned affiliates to others.

Non-Strategic Assets Portfolio includes a consumer portfolio of mainly residential mortgage and brokered home equity loans and a small commercial loan and lease portfolio. 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. We hold an equity investment in BlackRock, which is a key component of our diversified revenue strategy. BlackRock is a publicly traded company, and additional information regarding its business is available in its filings with the Securities and Exchange Commission (SEC). At March 31, 2013, our economic interest in BlackRock was 22%.

Period End Employees



	March 31 2013		December 31 2012		September 30 2012		June 30 2012		March 31 2012
Full-time employees
Retail Banking		22,985		23,331		23,403		23,388		23,583
Other full-time employees (a)		27,957		27,616		27,512		27,060		26,863
Total full-time employees		50,942		50,947		50,915		50,448		50,446
Part-time employees
Retail Banking		4,496		4,563		4,740		4,970		5,265
Other part-time employees (a)		734		775		879		1,215		894
Total part-time employees		5,230		5,338		5,619		6,185		6,159
Total		56,172		56,285		56,534		56,633		56,605

(a)	Includes period end employees for all businesses other than Retail Banking and includes operations, technology and staff services employees other than staff directly employed by Retail Banking.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

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


	Three months ended
In millions Income (Loss)	March 31 2013		December 31 2012		September 30 2012		June 30 2012		March 31 2012
Retail Banking (c)	$	120	$	121	$	192	$	136	$	147
Corporate & Institutional Banking		541		649		607		577		495
Asset Management Group		43		34		37		38		36
Residential Mortgage Banking (d) (e)		45		(192)		36		(213)		61
Non-Strategic Assets Portfolio		79		59		40		67		71
Other, including BlackRock (b) (f) (g)		176		48		13		(59)		1

Net income	$	1,004	$	719	$	925	$	546	$	811

Revenue

Retail Banking (c)	$	1,483	$	1,677	$	1,664	$	1,551	$	1,436
Corporate & Institutional Banking		1,341		1,576		1,416		1,439		1,266
Asset Management Group		255		247		243		240		243
Residential Mortgage Banking (d)		291		58		284		(109)		293
Non-Strategic Assets Portfolio		219		218		204		223		198
Other, including BlackRock (b) (f)		366		293		277		279		296

Total revenue	$	3,955	$	4,069	$	4,088	$	3,623	$	3,732

(a)

Our business information is presented based on our internal management reporting practices. We periodically refine our internal methodologies as management reporting practices are enhanced. During the second quarter of 2012, enhancements were made to the funds transfer pricing methodology. Retrospective application of our new funds transfer pricing methodology has been made to the prior period reportable business segment results and disclosures to create comparability to the current period presentation, which we believe is more meaningful to readers of our financial statements. During the third quarter of 2012, enhancements were made to certain assumptions used to estimate our total ALLL and provision. The estimated impact as of the beginning of the third quarter 2012 was approximately an increase of $41 million and a decrease of $55 million to the provision for credit losses of Retail Banking and Corporate & Institutional Banking, respectively.

(b)	We consider BlackRock to be a separate reportable business segment but have combined its results with Other for this presentation. Our first quarter 2013 Form 10-Q will include additional information regarding BlackRock.

(c)	Includes gains on sales of a portion of Visa Class B common shares in the third and fourth quarters of 2012. For more information, refer to Selected Consolidated Income Statement Information on page 7.

(d)	Includes provisions for residential mortgage repurchase obligations. For more information, refer to Selected Consolidated Income Statement Information on page 7.

(e)	Includes expenses for residential mortgage foreclosure-related matters. For more information, refer to Selected Consolidated Income Statement Information on page 7.

(f)

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, private equity investments, 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.

(g)	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 7.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Retail Banking (Unaudited) (a)


	Three months ended
Dollars in millions	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
INCOME STATEMENT
Net interest income	$	1,049		$	1,081		$	1,076		$	1,114		$	1,045
Noninterest income
Service charges on deposits		129			143			146			137			121
Brokerage		52			48			47			49			45
Consumer services		216			220			214			213			191
Other		37			185			181			38			34
Total noninterest income		434			596			588			437			391
Total revenue		1,483			1,677			1,664			1,551			1,436
Provision for credit losses		162			280			220			165			135
Noninterest expense		1,131			1,206			1,140			1,171			1,069
Pretax earnings		190			191			304			215			232
Income taxes		70			70			112			79			85
Earnings	$	120		$	121		$	192		$	136		$	147
AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	28,913		$	28,920		$	28,881		$	28,761		$	26,759
Indirect auto		7,006			6,718			5,654			5,042			4,439
Indirect other		1,000			1,063			1,133			1,211			1,292
Education		8,220			8,370			8,611			9,100			9,440
Credit cards		4,108			4,138			4,108			4,075			3,928
Other		2,141			2,145			2,068			2,004			1,888
Total consumer		51,388			51,354			50,455			50,193			47,746
Commercial and commercial real estate		11,290			11,266			11,360			11,445			10,682
Floor plan		2,014			1,915			1,769			1,803			1,663
Residential mortgage		811			862			918			972			1,031
Total loans		65,503			65,397			64,502			64,413			61,122
Goodwill and other intangible assets		6,148			6,174			6,199			6,228			5,888
Other assets		2,465			2,565			2,589			2,452			2,699
Total assets	$	74,116		$	74,136		$	73,290		$	73,093		$	69,709
Deposits
Noninterest-bearing demand	$	20,744		$	20,900		$	20,660		$	20,381		$	18,764
Interest-bearing demand		31,183			29,526			28,506			28,265			25,707
Money market		48,291			47,859			47,557			47,271			43,601
Total transaction deposits		100,218			98,285			96,723			95,917			88,072
Savings		10,537			10,068			9,954			9,900			9,077
Certificates of deposit		22,683			23,531			24,746			26,468			28,150
Total deposits		133,438			131,884			131,423			132,285			125,299
Other liabilities		273			285			255			190			629
Capital		9,058			9,051			9,034			8,455			8,328
Total liabilities and equity	$	142,769		$	141,220		$	140,712		$	140,930		$	134,256
PERFORMANCE RATIOS
Return on average capital		5	%		5	%		8	%		6	%		7	%
Return on average assets		.66			.65			1.04			.75			.85
Noninterest income to total revenue		29			36			35			28			27
Efficiency		76			72			69			75			74

(a)	See note (a) on page 15.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Retail Banking (Unaudited) (Continued)


	Three months ended
Dollars in millions, except as noted	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
OTHER INFORMATION (a)								.
Credit-related statistics:
Commercial nonperforming assets	$	230		$	245		$	266		$	275		$	315
Consumer nonperforming assets		1,050			902			799			685			650
Total nonperforming assets	$	1,280		$	1,147		$	1,065		$	960		$	965
Purchased impaired loans (b)	$	788		$	819		$	852		$	886		$	903
Commercial lending net charge-offs	$	37		$	34		$	19		$	38		$	28
Credit card lending net charge-offs		45			35			40			49			50
Consumer lending (excluding credit card) net charge-offs		168			148			160			100			113
Total net charge-offs	$	250		$	217		$	219		$	187		$	191
Commercial lending annualized net charge-off ratio		1.13	%		1.03	%		.58	%		1.15	%		.91	%
Credit card lending annualized net charge-off ratio		4.44	%		3.36	%		3.87	%		4.84	%		5.12	%
Consumer lending (excluding credit card) annualized net charge-off ratio (g)		1.42	%		1.22	%		1.35	%		.85	%		1.01	%
Total annualized net charge-off ratio (g)		1.55	%		1.32	%		1.35	%		1.17	%		1.26	%
Home equity portfolio credit statistics: (c)
% of first lien positions at origination (d)		48	%		42	%		41	%		39	%		37	%
Weighted-average loan-to-value ratios (LTVs) (d) (e)		85	%		81	%		80	%		78	%		81	%
Weighted-average updated FICO scores (f)		743			742			742			742			739
Annualized net charge-off ratio (g)		1.97	%		1.35	%		1.58	%		.92	%		1.11	%
Delinquency data: (h)
Loans 30 - 59 days past due		.44	%		.52	%		.51	%		.54	%		.56	%
Loans 60 - 89 days past due		.24	%		.33	%		.33	%		.33	%		.35	%
Loans 90 days past due		.99	%		1.22	%		1.24	%		1.24	%		1.24	%
Other statistics:
ATMs		7,303			7,282			7,261			7,206			7,220
Branches (i)		2,856			2,881			2,887			2,888			2,900
Customer-related statistics: (in thousands)
Retail Banking checking relationships		6,534			6,475			6,451			6,349			6,278
Retail online banking active customers		4,234			4,227			4,117			3,953			3,823
Retail online bill payment active customers		1,260			1,236			1,219			1,189			1,161
Brokerage statistics:
Financial consultants (j)		611			636			655			684			693
Full service brokerage offices		39			41			42			40			38
Brokerage account assets (billions)	$	39		$	38		$	38		$	36		$	37

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

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

(c)	Lien position, LTV and FICO statistics are based upon customer balances.

(d)	Lien position and LTV calculation at March 31, 2013 reflect the use of revised assumptions where data is missing.

(e)	LTV statistics are based upon current information.

(f)	Represents FICO scores that are updated at least quarterly.

(g)	Ratio for the three months ended March 31, 2013 includes additional consumer charge-offs taken as a result of alignment with interagency guidance on practices for loans and lines of credit we implemented in the first quarter of 2013.

(h)	Delinquency data includes nonaccrual loans. Amounts as of March 31, 2013 are based upon recorded investment; previous quarters’ amounts are based upon unpaid principal balances.

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Corporate & Institutional Banking (Unaudited) (a)


	Three months ended
Dollars in millions, except as noted	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
INCOME STATEMENT
Net interest income	$	956		$	1,057		$	1,019		$	1,085		$	938
Noninterest income
Corporate service fees		246			324			258			248			200
Other		139			195			139			106			128
Noninterest income		385			519			397			354			328
Total revenue		1,341			1,576			1,416			1,439			1,266
Provision for credit losses (benefit)		14			9			(61)			33			19
Noninterest expense		480			549			520			496			463
Pretax earnings		847			1,018			957			910			784
Income taxes		306			369			350			333			289
Earnings	$	541		$	649		$	607		$	577		$	495
AVERAGE BALANCE SHEET
Loans
Commercial	$	52,893		$	51,081		$	50,636		$	49,087		$	42,919
Commercial real estate		16,876			16,517			16,226			15,928			14,388
Commercial - real estate related		6,826			6,562			6,008			5,545			4,971
Asset-based lending		11,181			10,893			10,406			9,755			9,266
Equipment lease financing		6,552			6,272			6,095			5,911			5,706
Total loans		94,328			91,325			89,371			86,226			77,250
Goodwill and other intangible assets		3,752			3,724			3,707			3,749			3,442
Loans held for sale		1,236			1,190			1,263			1,190			1,244
Other assets		12,355			12,842			12,582			11,670			10,960
Total assets	$	111,671		$	109,081		$	106,923		$	102,835		$	92,896
Deposits
Noninterest-bearing demand	$	40,572		$	40,607		$	37,685		$	37,813		$	37,225
Money market		17,023			16,500			16,237			15,734			13,872
Other		6,979			6,842			6,277			5,933			5,372
Total deposits		64,574			63,949			60,199			59,480			56,469
Other liabilities		18,779			19,107			19,201			17,551			15,987
Capital		9,588			9,787			9,937			8,815			8,537
Total liabilities and equity	$	92,941		$	92,843		$	89,337		$	85,846		$	80,993
PERFORMANCE RATIOS
Return on average capital		23	%		26	%		24	%		26	%		23	%
Return on average assets		1.96			2.37			2.26			2.26			2.14
Noninterest income to total revenue		29			33			28			25			26
Efficiency		36			35			37			34			37
COMMERCIAL MORTGAGE SERVICING PORTFOLIO (in billions)
Beginning of period	$	282		$	265		$	264		$	268		$	267
Acquisitions/additions		21			35			12			7			10
Repayments/transfers		(13)			(18)			(11)			(11)			(9)
End of period	$	290		$	282		$	265		$	264		$	268
OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	329		$	337		$	346		$	354		$	343
Capital Markets (d)	$	131		$	228		$	175		$	151		$	156
Commercial mortgage loans held for sale (e)	$	38		$	44		$	13		$	34		$	13
Commercial mortgage loan servicing income, net of amortization (f)		53			57			55			53			30
Commercial mortgage servicing rights (impairment)/recovery, net of economic hedge		11			16			16			(6)			5
Total commercial mortgage banking activities	$	102		$	117		$	84		$	81		$	48
Total loans (g)	$	94,843		$	93,721		$	90,099		$	88,810		$	84,329
Net carrying amount of commercial mortgage servicing rights (g)	$	452		$	420		$	402		$	398		$	428
Credit-related statistics:
Nonperforming assets (g)	$	1,082		$	1,181		$	1,500		$	1,686		$	1,776
Purchased impaired loans (g) (h)	$	768		$	875		$	990		$	1,088		$	1,177
Net charge-offs	$	58		$	34		$	35		$	30		$	43

(a)	See note (a) on page 15.

(b)	Represents consolidated PNC amounts. Our first quarter 2013 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 and a direct write-down of commercial mortgage servicing rights of $24 million recognized in the first quarter of 2012. Commercial mortgage servicing rights (impairment)/recovery, net of economic 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 19

Asset Management Group (Unaudited) (a)


	Three months ended
Dollars in millions, except as noted	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
INCOME STATEMENT
Net interest income	$	73		$	74		$	73		$	75		$	75
Noninterest income		182			173			170			165			168
Total revenue		255			247			243			240			243
Provision for credit losses (benefit)		5			(2)			4			(1)			10
Noninterest expense		183			195			180			181			176
Pretax earnings		67			54			59			60			57
Income taxes		24			20			22			22			21
Earnings	$	43		$	34		$	37		$	38		$	36
AVERAGE BALANCE SHEET
Loans
Consumer	$	4,793		$	4,671		$	4,486		$	4,321		$	4,183
Commercial and commercial real estate		1,037			1,021			1,060			1,098			1,126
Residential mortgage		772			706			687			692			692
Total loans		6,602			6,398			6,233			6,111			6,001
Goodwill and other intangible assets		306			315			324			333			345
Other assets		223			226			214			215			220
Total assets	$	7,131		$	6,939		$	6,771		$	6,659		$	6,566
Deposits
Noninterest-bearing demand	$	1,331		$	1,573		$	1,336		$	1,362		$	1,575
Interest-bearing demand		3,616			3,009			2,662			2,674			2,637
Money market		3,841			3,562			3,466			3,535			3,651
Total transaction deposits		8,788			8,144			7,464			7,571			7,863
CDs/IRAs/savings deposits		454			461			465			490			549
Total deposits		9,242			8,605			7,929			8,061			8,412
Other liabilities		60			65			68			68			71
Capital		474			481			464			463			347
Total liabilities and equity	$	9,776		$	9,151		$	8,461		$	8,592		$	8,830
PERFORMANCE RATIOS
Return on average capital		37	%		28	%		32	%		33	%		42	%
Return on average assets		2.45			1.95			2.17			2.30			2.21
Noninterest income to total revenue		71			70			70			69			69
Efficiency		72			79			74			75			72
OTHER INFORMATION
Total nonperforming assets (b)	$	65		$	69		$	61		$	67		$	73
Purchased impaired loans (b) (c)	$	105		$	109		$	118		$	122		$	126
Total net charge-offs (recoveries)	$	3		$	2		$	(1)		$	3		$	2
ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	112		$	107		$	106		$	102		$	104
Institutional		124			117			116			112			115
Total	$	236		$	224		$	222		$	214		$	219
Asset Type
Equity	$	130		$	120		$	120		$	116		$	119
Fixed income		70			69			68			66			66
Liquidity/Other		36			35			34			32			34
Total	$	236		$	224		$	222		$	214		$	219
Discretionary assets under management
Personal	$	77		$	73		$	73		$	71		$	73
Institutional		41			39			39			38			39
Total	$	118		$	112		$	112		$	109		$	112
Asset Type
Equity	$	62		$	56		$	57		$	56		$	58
Fixed income		39			39			39			38			38
Liquidity/Other		17			17			16			15			16
Total	$	118		$	112		$	112		$	109		$	112
Nondiscretionary assets under administration
Personal	$	35		$	34		$	33		$	31		$	31
Institutional		83			78			77			74			76
Total	$	118		$	112		$	110		$	105		$	107
Asset Type
Equity	$	68		$	64		$	63		$	60		$	61
Fixed income		31			30			29			28			28
Liquidity/Other		19			18			18			17			18
Total	$	118		$	112		$	110		$	105		$	107

(a)	See note (a) on page 15.

(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 20

Residential Mortgage Banking (Unaudited) (a)


	Three months ended
Dollars in millions, except as noted	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
INCOME STATEMENT
Net interest income	$	48		$	53		$	52		$	53		$	51
Noninterest income
Loan servicing revenue
Servicing fees		41			48			49			52			56
Net MSR hedging gains		37			2			7			39			71
Loan sales revenue
Provision for residential mortgage repurchase obligations		(4	)		(254	)		(37	)		(438	)		(32	)
Loan sales revenue		172			213			216			177			141
Other		(3	)		(4	)		(3	)		8			6
Total noninterest income		243			5			232			(162	)		242
Total revenue		291			58			284			(109	)		293
Provision for credit losses (benefit)		20			2			2			(2	)		(7	)
Noninterest expense		200			333			226			230			203
Pretax earnings (loss)		71			(277	)		56			(337	)		97
Income taxes (benefit)		26			(85	)		20			(124	)		36
Earnings (loss)	$	45		$	(192	)	$	36		$	(213	)	$	61
AVERAGE BALANCE SHEET
Portfolio loans	$	2,553		$	2,559		$	2,648		$	2,751		$	2,922
Loans held for sale		2,038			1,832			1,694			1,830			1,675
Mortgage servicing rights (MSR)		764			620			599			665			645
Other assets		5,448			6,120			6,560			6,255			6,747
Total assets	$	10,803		$	11,131		$	11,501		$	11,501		$	11,989
Deposits	$	3,106		$	3,286		$	3,492		$	1,783		$	1,662
Borrowings and other liabilities		3,487			3,729			4,198			4,067			4,353
Capital		1,752			1,830			1,488			1,157			832
Total liabilities and equity	$	8,345		$	8,845		$	9,178		$	7,007		$	6,847
PERFORMANCE RATIOS
Return on average capital		10	%		(42	)%		10	%		(74	)%		29	%
Return on average assets		1.69			(6.86	)		1.25			(7.45	)		2.05
Noninterest income to total revenue		84			9			82			149			83
Efficiency		69			574			80			(211	)		69
RESIDENTIAL MORTGAGE SERVICING PORTFOLIO - THIRD-PARTY (in billions)
Beginning of period	$	119		$	119		$	116		$	121		$	118
Acquisitions		6			6			8						7
Additions		4			4			4			2			4
Repayments/transfers		(9	)		(10	)		(9	)		(7	)		(8	)
End of period	$	120		$	119		$	119		$	116		$	121
Servicing portfolio - third-party statistics: (b)
Fixed rate		92	%		92	%		91	%		91	%		91	%
Adjustable rate/balloon		8	%		8	%		9	%		9	%		9	%
Weighted-average interest rate		4.80	%		4.94	%		5.06	%		5.21	%		5.26	%
MSR capitalized value (in billions)	$	.8		$	.7		$	.6		$	.6		$	.7
MSR capitalization value (in basis points)		65			54			50			50			60
Weighted-average servicing fee (in basis points)		28			28			29			29			29
RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	614		$	421		$	462		$	101		$	83
Provision		4			254			37			438			32
RBC Bank (USA) acquisition														26
Losses - loan repurchases and settlements		(96	)		(61	)		(78	)		(77	)		(40	)
End of period	$	522		$	614		$	421		$	462		$	101
OTHER INFORMATION
Loan origination volume (in billions)	$	4.2		$	4.4		$	3.8		$	3.6		$	3.4
Loan sale margin percentage		4.07	%		4.87	%		5.68	%		4.89	%		4.17	%
Percentage of originations represented by:
Agency and government programs		100	%		100	%		100	%		100	%		100	%
Refinance volume		81	%		80	%		74	%		72	%		82	%
Total nonperforming assets (b)	$	236		$	134		$	82		$	78		$	80
Purchased impaired loans (b) (c)	$	24		$	38		$	69		$	84		$	100

(a)	See note (a) on page 15.

(b)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

Non-Strategic Assets Portfolio (Unaudited) (a)


	Three months ended
Dollars in millions	March 31 2013			December 31 2012			September 30 2012			June 30 2012			March 31 2012
INCOME STATEMENT
Net interest income	$	203		$	197		$	195		$	221		$	217
Noninterest income		16			21			9			2			(19	)
Total revenue		219			218			204			223			198
Provision for credit losses		42			52			61			50			18
Noninterest expense		52			73			79			67			68
Pretax earnings		125			93			64			106			112
Income taxes		46			34			24			39			41
Earnings	$	79		$	59		$	40		$	67		$	71
AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	537		$	720		$	846		$	1,008		$	1,004
Lease financing		688			684			678			675			670
Total commercial lending		1,225			1,404			1,524			1,683			1,674
Consumer Lending:
Home equity		4,158			4,325			4,498			4,668			4,849
Residential real estate		5,938			6,130			6,328			6,534			6,046
Total consumer lending		10,096			10,455			10,826			11,202			10,895
Total portfolio loans		11,321			11,859			12,350			12,885			12,569
Other assets (b)		(586	)		(481	)		(333	)		(195	)		(445	)
Total assets	$	10,735		$	11,378		$	12,017		$	12,690		$	12,124
Deposits and other liabilities	$	168		$	186		$	189		$	180		$	177
Capital		1,094			1,188			1,278			1,311			1,176
Total liabilities and equity	$	1,262		$	1,374		$	1,467		$	1,491		$	1,353
PERFORMANCE RATIOS
Return on average capital		29	%		20	%		12	%		21	%		24	%
Return on average assets		2.98			2.06			1.32			2.12			2.36
Noninterest income to total revenue		7			10			4			1			(10	)
Efficiency		24			33			39			30			34
OTHER INFORMATION
Nonperforming assets (c)	$	999		$	999		$	1,056		$	1,120		$	1,192
Purchased impaired loans (c) (d)	$	5,372		$	5,547		$	5,702		$	5,889		$	6,097
Net charge-offs	$	87		$	60		$	65		$	83		$	91
Annualized net charge-off ratio		3.12	%		2.01	%		2.09	%		2.59	%		2.91	%
LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	493		$	665		$	795		$	945		$	1,104
Lease financing		690			686			680			677			671
Total commercial lending		1,183			1,351			1,475			1,622			1,775
Consumer Lending:
Home equity		4,209			4,237			4,408			4,575			4,751
Residential real estate		5,880			6,093			6,272			6,475			6,693
Total consumer lending		10,089			10,330			10,680			11,050			11,444
Total loans	$	11,272		$	11,681		$	12,155		$	12,672		$	13,219

(a)	See note (a) on page 15.

(b)	Other assets were negative in all periods presented 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 22

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 23

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 loss, net 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.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 24

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 deed-in-lieu of foreclosure 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 (purchased impaired loans) - 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.

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.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 25

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

Return on average common shareholders’ equity - Annualized net income attributable to common shareholders 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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