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

Attached files

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d279873d8k.htm
EX-99.2 - ELECTRONIC PRESENTATION SLIDES FOR EARNINGS RELEASE CONFERENCE CALL - PNC FINANCIAL SERVICES GROUP, INC.	d279873dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER AND FULL YEAR 2011

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER AND FULL YEAR 2011

(UNAUDITED)


	Page
Consolidated Results:

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

Business Segment Results:

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

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on January 18, 2012. We have reclassified certain prior period amounts to be consistent with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our United States Securities and Exchange Commission (SEC) filings.

BUSINESS

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

FLAGSTAR BRANCH ACQUISITION

Effective December 9, 2011, PNC acquired 27 branches in metropolitan Atlanta, Georgia from Flagstar Bank, FSB, a subsidiary of Flagstar Bancorp, Inc., and assumed approximately $210 million of deposits associated with those branches.

PENDING ACQUISITION OF RBC BANK (USA)

On June 19, 2011, PNC entered into a definitive agreement to acquire RBC Bank (USA), the US retail banking subsidiary of Royal Bank of Canada, with more than 400 branches in North Carolina, Florida, Alabama, Georgia, Virginia, and South Carolina. The transaction is expected to add approximately $19 billion of deposits and $16 billion of loans to PNC’s Consolidated Balance Sheet and to close in March 2012, subject to remaining customary closing conditions.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Consolidated Income Statement (Unaudited)


	Three months ended															Year ended
In millions, except per share data	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
Interest Income
Loans	$	1,902		$	1,904		$	1,905		$	1,884		$	1,962		$	7,595		$	8,276
Investment securities		523			511			549			578			602			2,161			2,389
Other		109			115			93			121			107			438			485

Total interest income		2,534			2,530			2,547			2,583			2,671			10,194			11,150

Interest Expense
Deposits		139			167			180			182			205			668			963
Borrowed funds		196			188			217			225			265			826			957

Total interest expense		335			355			397			407			470			1,494			1,920

Net interest income		2,199			2,175			2,150			2,176			2,201			8,700			9,230

Noninterest Income
Asset management		250			287			288			263			303			1,088			1,054
Consumer services		269			330			333			311			322			1,243			1,261
Corporate services (a)		266			187			228			217			370			898			1,082
Residential mortgage		157			198			163			195			157			713			699
Service charges on deposits		140			140			131			123			132			534			705
Net gains on sales of securities		62			68			82			37			68			249			426
Net other-than-temporary impairments		(44	)		(35	)		(39	)		(34	)		(44	)		(152	)		(325	)
Other (b)		250			194			266			343			394			1,053			1,044

Total noninterest income		1,350			1,369			1,452			1,455			1,702			5,626			5,946

Total revenue		3,549			3,544			3,602			3,631			3,903			14,326			15,176
Provision For Credit Losses		190			261			280			421			442			1,152			2,502
Noninterest Expense
Personnel		1,052			949			976			989			1,032			3,966			3,906
Occupancy		198			171			176			193			194			738			730
Equipment		177			159			158			167			176			661			668
Marketing		74			72			63			40			70			249			266
Other (c) (d)		1,218			789			803			681			868			3,491			3,043

Total noninterest expense		2,719			2,140			2,176			2,070			2,340			9,105			8,613

Income from continuing operations before income taxes and noncontrolling interests		640			1,143			1,146			1,140			1,121			4,069			4,061
Income taxes		147			309			234			308			301			998			1,037

Income from continuing operations before noncontrolling interests		493			834			912			832			820			3,071			3,024
Income from discontinued operations (e) (f)																				373

Net income		493			834			912			832			820			3,071			3,397

Less: Net income (loss) attributable to noncontrolling interests		17			4			(1	)		(5	)		(3	)		15			(15	)
Preferred stock dividends		24			4			24			4			24			56			146
Preferred stock discount accretion and redemptions		1						1						1			2			255

Net income attributable to common shareholders	$	451		$	826		$	888		$	833		$	798		$	2,998		$	3,011

Basic Earnings Per Common Share
Continuing operations	$	.86		$	1.57		$	1.69		$	1.59		$	1.52		$	5.70		$	5.08
Discontinued operations																				.72

Net income	$	.86		$	1.57		$	1.69		$	1.59		$	1.52		$	5.70		$	5.80
Diluted Earnings Per Common Share
Continuing operations	$	.85		$	1.55		$	1.67		$	1.57		$	1.50		$	5.64		$	5.02
Discontinued operations																				.72

Net income	$	.85		$	1.55		$	1.67		$	1.57		$	1.50		$	5.64		$	5.74
Average Common Shares Outstanding
Basic		524			524			524			524			524			524			517
Diluted		526			526			527			526			526			526			520

Efficiency		77	%		60	%		60	%		57	%		60	%		64	%		57	%

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

Effective tax rate (g)		23.0	%		27.0	%		20.4	%		27.0	%		26.9	%		24.5	%		25.5	%

The after-tax amounts below were calculated using a marginal federal income tax rate of 35% and include applicable income tax adjustments. The portion of our BlackRock shares and the after-tax gain on the sale of GIS also reflect the impact of state income taxes.

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

(b)

Other noninterest income for the three months and year ended December 31, 2010 included a $160 million gain ($102 million after taxes) related to our gain on the sale of a portion of our shares of BlackRock stock as part of BlackRock’s November 2010 secondary common stock offering. The impact on diluted earnings per share was $.19 for the three months and year ended December 31, 2010.

(c)

Other noninterest expense for the three months and year ended December 31, 2011 included a $198 million noncash charge ($129 million after taxes) for the unamortized discount related to redemption of $750 million of trust preferred securities during the fourth quarter of 2011. The impact on diluted earnings per share was $.24 for the three months and year ended December 31, 2011.

(d)

Includes expenses of $240 million and $324 million ($156 million and $210 million after taxes, respectively) for the three months and year ended December 31, 2011 for residential mortgage foreclosure-related expenses, primarily as a result of ongoing governmental matters. The impact on diluted earnings per share was $.30 and $.40 for the three months and year ended December 31, 2011. The impact for both the three months and year ended December 31, 2010 was $71 million ($46 million after taxes), with an impact on diluted earnings per share of $.09 for both periods.

(e)	Includes results of operations for PNC Global Investment Servicing Inc. (GIS) through June 30, 2010 and the related after-tax gain on sale. We sold GIS effective July 1, 2010, resulting in a gain of $639 million, or $328 million after taxes, recognized during the third quarter of 2010.

(f)	Net of income taxes of $338 million for the year ended December 31, 2010.

(g)

The effective income tax rates are generally lower than the statutory rate due to the relationship of pretax income to tax credits and earnings that are not subject to tax. The lower effective tax rate for the second quarter of 2011 was primarily attributable to a $54 million benefit related to the reversal of deferred tax liabilities.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Consolidated Balance Sheet (Unaudited)


In millions, except par value	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010
Assets
Cash and due from banks (a)	$	4,105		$	3,982		$	3,865		$	3,389		$	3,297
Federal funds sold and resale agreements (b)		2,205			1,806			2,357			2,240			3,704
Trading securities		2,513			2,960			2,075			2,254			1,826
Interest-earning deposits with banks (a)		1,169			2,773			4,508			1,359			1,610
Loans held for sale (b)		2,936			2,491			2,679			2,980			3,492
Investment securities (a)		60,634			62,105			59,414			60,992			64,262
Loans (a) (b)		159,014			154,543			150,319			149,387			150,595
Allowance for loan and lease losses (a)		(4,347	)		(4,507	)		(4,627	)		(4,759	)		(4,887	)

Net loans		154,667			150,036			145,692			144,628			145,708
Goodwill		8,285			8,207			8,182			8,146			8,149
Other intangible assets		1,859			1,949			2,412			2,618			2,604
Equity investments (a) (c)		10,134			9,915			9,776			9,595			9,220
Other (a) (b)		22,698			23,246			22,157			21,177			20,412

Total assets	$	271,205		$	269,470		$	263,117		$	259,378		$	264,284


Liabilities
Deposits
Noninterest-bearing	$	59,048		$	55,180		$	52,683		$	48,707		$	50,019
Interest-bearing		128,918			132,552			129,208			133,283			133,371

Total deposits		187,966			187,732			181,891			181,990			183,390
Borrowed funds
Federal funds purchased and repurchase agreements		2,984			3,105			3,812			4,079			4,144
Federal Home Loan Bank borrowings		6,967			5,015			5,022			5,020			6,043
Bank notes and senior debt		11,793			11,990			10,526			11,324			12,904
Subordinated debt		8,321			9,564			9,358			9,310			9,842
Other (a)		6,639			5,428			6,458			5,263			6,555

Total borrowed funds		36,704			35,102			35,176			34,996			39,488
Allowance for unfunded loan commitments and letters of credit		240			217			202			204			188
Accrued expenses (a)		4,175			3,587			3,502			3,078			3,188
Other (a)		4,874			5,590			7,473			5,393			5,192

Total liabilities		233,959			232,228			228,244			225,661			231,446


Equity
Preferred stock (d)
Common stock - $5 par value Authorized 800 shares, issued 537, 536, 536, 536, and 536 shares		2,683			2,682			2,682			2,682			2,682
Capital surplus - preferred stock		1,637			1,636			648			647			647
Capital surplus - common stock and other		12,072			12,054			12,025			12,056			12,057
Retained earnings		18,253			17,985			17,344			16,640			15,859
Accumulated other comprehensive income (loss)		(105	)		397			69			(309	)		(431	)
Common stock held in treasury at cost: 10 shares		(487	)		(535	)		(533	)		(584	)		(572	)

Total shareholders’ equity		34,053			34,219			32,235			31,132			30,242
Noncontrolling interests		3,193			3,023			2,638			2,585			2,596

Total equity		37,246			37,242			34,873			33,717			32,838

Total liabilities and equity	$	271,205		$	269,470		$	263,117		$	259,378		$	264,284

Capital Ratios
Tier 1 common (e)		10.3	%		10.5	%		10.5	%		10.3	%		9.8	%
Tier 1 risk-based (e)		12.6			13.1			12.8			12.6			12.1
Total risk-based (e)		15.8			16.5			16.2			16.2			15.6
Leverage (e)		11.1			11.4			11.0			10.6			10.2
Common shareholders’ equity to assets		12.0			12.1			12.0			11.8			11.2

(a)	Amounts include consolidated variable interest entities. Our 2011 Form 10-Qs included, and our 2011 Form 10-K will include, additional information regarding these items.

(b)	Amounts include assets for which PNC has elected the fair value option. Our 2011 Form 10-Qs included, and our 2011 Form 10-K 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 December 31, 2011 is estimated.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended															Year ended
In millions	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	25,691		$	22,822		$	25,993		$	29,134		$	28,457		$	25,892		$	23,437
Non-agency		6,859			7,135			7,618			8,057			8,495			7,413			9,240
Commercial mortgage-backed		3,640			3,623			3,278			3,298			3,325			3,461			3,679
Asset-backed		3,832			3,817			3,185			2,757			2,824			3,402			2,240
US Treasury and government agencies		3,376			3,699			4,505			5,682			6,250			4,308			7,549
State and municipal		1,767			1,929			2,234			2,081			1,732			2,002			1,445
Other debt		2,731			3,113			3,578			3,994			3,618			3,350			2,783
Corporate stocks and other		446			449			376			443			418			428			448

Total securities available for sale		48,342			46,587			50,767			55,446			55,119			50,256			50,821
Securities held to maturity
Residential mortgage-backed		4,658			3,840			1,130									2,424
Commercial mortgage-backed		4,794			4,520			4,215			4,239			4,311			4,444			3,711
Asset-backed		1,353			1,863			2,276			2,463			2,849			1,985			3,409
State and municipal		670			389			8			8			8			271			8
Other		584			489			150			1			2			308			41

Total securities held to maturity		12,059			11,101			7,779			6,711			7,170			9,432			7,169

Total investment securities		60,401			57,688			58,546			62,157			62,289			59,688			57,990
Loans
Commercial		63,483			59,951			57,932			56,300			54,065			59,437			54,339
Commercial real estate		16,413			16,347			16,779			17,545			18,555			16,767			20,435
Equipment lease financing		6,233			6,150			6,189			6,307			6,375			6,219			6,276
Consumer		55,556			54,632			54,014			54,460			54,741			54,669			55,015
Residential real estate		14,474			14,717			15,001			15,518			16,145			14,924			17,709

Total loans		156,159			151,797			149,915			150,130			149,881			152,016			153,774
Loans held for sale		2,673			2,497			2,719			3,193			3,331			2,768			2,871
Federal funds sold and resale agreements		2,035			2,030			2,321			2,813			2,130			2,297			1,899
Other		7,138			10,060			7,241			5,802			6,164			7,571			8,215

Total interest-earning assets		228,406			224,072			220,742			224,095			223,795			224,340			224,749
Noninterest-earning assets:
Allowance for loan and lease losses		(4,472	)		(4,592	)		(4,728	)		(4,835	)		(5,039	)		(4,656	)		(5,144	)
Cash and due from banks		3,883			3,544			3,433			3,393			3,516			3,565			3,569
Other		42,905			43,827			41,659			39,901			41,286			42,086			41,728

Total assets	$	270,722		$	266,851		$	261,106		$	262,554		$	263,558		$	265,335		$	264,902

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

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


	Three months ended										Year ended
In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010		December 31 2011		December 31 2010
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	58,897	$	59,009	$	58,594	$	58,556	$	58,436	$	58,765	$	58,264
Demand		29,338		27,654		26,912		26,313		25,388		27,563		25,025
Savings		8,545		8,305		8,222		7,656		7,221		8,185		7,005
Retail certificates of deposit		30,888		33,607		35,098		36,509		39,201		34,009		42,933
Other time		335		361		410		515		598		405		813
Time deposits in foreign offices		2,534		1,830		1,840		3,452		2,799		2,410		2,785

Total interest-bearing deposits		130,537		130,766		131,076		133,001		133,643		131,337		136,825
Borrowed funds
Federal funds purchased and repurchase agreements		3,714		3,685		4,138		6,376		4,552		4,469		4,309
Federal Home Loan Bank borrowings		6,090		5,015		5,021		5,088		6,168		5,305		7,996
Bank notes and senior debt		11,463		10,480		11,132		11,745		13,073		11,202		12,790
Subordinated debt		8,463		8,982		8,981		9,353		9,490		8,942		9,647
Other		5,935		5,736		5,713		5,847		4,947		5,808		5,438

Total borrowed funds		35,665		33,898		34,985		38,409		38,230		35,726		40,180

Total interest-bearing liabilities		166,202		164,664		166,061		171,410		171,873		167,063		177,005
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		55,946		53,300		49,720		47,755		47,998		51,707		45,076
Allowance for unfunded loan commitments and letters of credit		217		202		204		188		193		203		239
Accrued expenses and other liabilities		11,132		12,478		10,747		9,771		10,506		11,040		11,015
Equity		37,225		36,207		34,374		33,430		32,988		35,322		31,567

Total liabilities and equity	$	270,722	$	266,851	$	261,106	$	262,554	$	263,558	$	265,335	$	264,902

(a) Calculated using average daily balances. Supplemental Average Balance Sheet Information (Unaudited) Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	130,537	$	130,766	$	131,076	$	133,001	$	133,643	$	131,337	$	136,825
Noninterest-bearing deposits		55,946		53,300		49,720		47,755		47,998		51,707		45,076


Total deposits	$	186,483	$	184,066	$	180,796	$	180,756	$	181,641	$	183,044	$	181,901

Transaction deposits	$	144,181	$	139,963	$	135,226	$	132,624	$	131,822	$	138,035	$	128,365

Common shareholders’ equity	$	32,552	$	32,124	$	31,101	$	30,193	$	29,729	$	31,501	$	27,545


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Year ended
	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
Average yields/rates
Yield on interest-earning assets
Loans		4.85	%		5.00	%		5.11	%		5.09	%		5.21	%		5.04	%		5.42	%
Investment securities		3.51			3.59			3.80			3.76			3.91			3.67			4.16
Other		3.68			3.14			3.04			4.16			3.61			3.48			3.74
Total yield on interest-earning assets		4.44			4.52			4.64			4.67			4.76			4.59			5.00
Rate on interest-bearing liabilities
Deposits		.42			.51			.55			.55			.61			.51			.70
Borrowed funds		2.17			2.20			2.46			2.35			2.74			2.31			2.39
Total rate on interest-bearing liabilities		.80			.86			.95			.95			1.08			.89			1.09

Interest rate spread		3.64			3.66			3.69			3.72			3.68			3.70			3.91
Impact of noninterest-bearing sources		.22			.23			.24			.22			.25			.22			.23

Net interest margin (b)		3.86	%		3.89	%		3.93	%		3.94	%		3.93	%		3.92	%		4.14	%

(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 December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 31, 2010 were $28 million, $27 million, $25 million, $24 million, and $22 million, respectively. The taxable-equivalent adjustments to net interest income for the years ended December 31, 2011 and December 31, 2010 were $104 million and $81 million, respectively.

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


	Three months ended															Year ended
	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
Net interest margin, as reported		3.86	%		3.89	%		3.93	%		3.94	%		3.93	%		3.92	%		4.14	%
Less: provision adjustment		.33			.46			.51			.76			.78			.51			1.11

Provision-adjusted net interest margin		3.53	%		3.43	%		3.42	%		3.18	%		3.15	%		3.41	%		3.03	%

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

Selected Consolidated Income Statement Information (Unaudited)


	Three months ended										Year ended
In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010		December 31 2011		December 31 2010
Noninterest Income
Gain on BlackRock transaction									$	160			$	160
Noninterest Expense
Noncash charge for the unamortized discount related to redemption of trust preferred securities	$	198									$	198
Expenses for residential mortgage foreclosure-related matters	$	240	$	63	$	16	$	5	$	71	$	324	$	71
Integration costs	$	28	$	8	$	5	$	1	$	78	$	42	$	387
Income Taxes
Benefit related to reversal of deferred tax liabilities (c)					$	54					$	54
Benefit related to a favorable IRS letter ruling (c)													$	89
Income from Discontinued Operations, Net of Income Taxes
Gain on sale of GIS													$	328
Net Income Attributable to Common Shareholders
TARP preferred stock accelerated discount accretion (d)													$	250

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

(d)	Represents accelerated accretion of the remaining issuance discount on redemption of the TARP preferred stock in February 2010. This resulted in a $.48 reduction to diluted earnings per share for the year ended December 31, 2010.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Details of Loans (Unaudited)


In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010
Commercial
Retail/wholesale trade	$	11,539	$	11,287	$	10,952	$	10,665	$	9,901
Manufacturing		11,453		10,980		10,426		9,805		9,334
Service providers		9,717		9,326		8,984		8,690		8,866
Real estate related (a)		8,488		8,073		7,515		7,533		7,500
Financial services		6,646		5,676		5,206		5,034		4,573
Health care		5,068		4,668		4,115		3,839		3,481
Other industries		12,783		12,240		11,422		11,036		11,522

Total commercial		65,694		62,250		58,620		56,602		55,177

Commercial real estate
Real estate projects		10,640		10,936		11,086		11,581		12,211
Commercial mortgage		5,564		5,477		5,233		5,552		5,723

Total commercial real estate		16,204		16,413		16,319		17,133		17,934

Equipment lease financing		6,416		6,186		6,210		6,215		6,393

TOTAL COMMERCIAL LENDING		88,314		84,849		81,149		79,950		79,504

Consumer
Home equity
Lines of credit		22,491		22,677		22,838		23,001		23,473
Installment		10,598		10,486		10,541		10,655		10,753
Residential real estate
Residential mortgage		13,885		14,022		14,302		14,602		15,292
Residential construction		584		633		680		731		707
Credit card		3,976		3,785		3,754		3,707		3,920
Other consumer
Education		9,582		9,154		8,816		9,041		9,196
Automobile		5,181		4,447		3,705		3,156		2,983
Other		4,403		4,490		4,534		4,544		4,767

TOTAL CONSUMER LENDING		70,700		69,694		69,170		69,437		71,091

Total loans (b)	$	159,014	$	154,543	$	150,319	$	149,387	$	150,595

(a) Includes loans to customers in the real estate and construction industries.
(b) Includes purchased impaired loans:	$	6,667	$	6,927	$	7,256	$	7,522	$	7,780
Details of Loans Held for Sale (Unaudited)
In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010
Commercial mortgage	$	1,294	$	1,081	$	1,226	$	1,047	$	1,207
Residential mortgage		1,522		1,353		1,351		1,840		1,890
Other		120		57		102		93		395

Total	$	2,936	$	2,491	$	2,679	$	2,980	$	3,492

Net Unfunded Commitments (Unaudited)
In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010
Net unfunded commitments	$	103,271	$	103,236	$	99,791	$	96,781	$	95,805


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

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

Change in Allowance for Loan and Lease Losses


Three months ended - in millions	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010
Beginning balance	$	4,507		$	4,627		$	4,759		$	4,887		$	5,231
Charge-offs:
Commercial		(143	)		(193	)		(185	)		(179	)		(331	)
Commercial real estate		(90	)		(92	)		(124	)		(158	)		(181	)
Equipment lease financing		(7	)		(3	)		(11	)		(14	)		(29	)
Home equity		(109	)		(123	)		(112	)		(140	)		(124	)
Residential real estate		(32	)		(20	)		(43	)		(58	)		(124	)
Credit card		(50	)		(51	)		(60	)		(74	)		(73	)
Other consumer		(51	)		(42	)		(49	)		(51	)		(62	)

Total charge-offs		(482	)		(524	)		(584	)		(674	)		(924	)
Recoveries:
Commercial		76			78			98			80			71
Commercial real estate		40			25			26			14			20
Equipment lease financing		13			13			15			9			18
Home equity		11			16			11			10			9
Residential real estate		1			8			1			1			(1	)
Credit card		5			6			6			6			5
Other consumer		9			13			13			21			11

Total recoveries		155			159			170			141			133
Net (charge-offs) recoveries:
Commercial		(67	)		(115	)		(87	)		(99	)		(260	)
Commercial real estate		(50	)		(67	)		(98	)		(144	)		(161	)
Equipment lease financing		6			10			4			(5	)		(11	)
Home equity		(98	)		(107	)		(101	)		(130	)		(115	)
Residential real estate		(31	)		(12	)		(42	)		(57	)		(125	)
Credit card		(45	)		(45	)		(54	)		(68	)		(68	)
Other consumer		(42	)		(29	)		(36	)		(30	)		(51	)

Total net charge-offs		(327	)		(365	)		(414	)		(533	)		(791	)
Provision for credit losses		190			261			280			421			442
Other					(1	)
Net change in allowance for unfunded loan commitments and letters of credit		(23	)		(15	)		2			(16	)		5

Ending balance	$	4,347		$	4,507		$	4,627		$	4,759		$	4,887

Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.83	%		.95	%		1.11	%		1.44	%		2.09	%
Allowance for loan and lease losses to total loans		2.73			2.92			3.08			3.19			3.25
Commercial lending net charge-offs	$	(111	)	$	(172	)	$	(181	)	$	(248	)	$	(432	)
Consumer lending net charge-offs		(216	)		(193	)		(233	)		(285	)		(359	)

Total net charge-offs	$	(327	)	$	(365	)	$	(414	)	$	(533	)	$	(791	)

Net charge-offs to average loans
Commercial lending		.51	%		.83	%		.90	%		1.25	%		2.17	%
Consumer lending		1.22			1.10			1.35			1.65			2.01

Change in Allowance for Unfunded Loan Commitments and Letters of Credit


Three months ended - in millions	December 31 2011		September 30 2011		June 30 2011			March 31 2011		December 31 2010
Beginning balance	$	217	$	202	$	204		$	188	$	193
Net change in allowance for unfunded loan commitments and letters of credit		23		15		(2	)		16		(5	)

Ending balance	$	240	$	217	$	202		$	204	$	188


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

Purchase Accounting Accretion, Accretable Net Interest, and Purchased Impaired Loans (Unaudited)

Total Purchase Accounting Accretion


	Three months ended									Year ended
In millions	December 31 2011			September 30 2011			December 31 2010			December 31 2011			December 31 2010
Non-impaired loans	$	80		$	68		$	73		$	288		$	366
Impaired loans
Scheduled accretion		154			166			175			666			885
Excess cash recoveries		61			72			133			254			483
Reversal of contractual interest on impaired loans		(102	)		(99	)		(121	)		(395	)		(529	)

Total impaired loans		113			139			187			525			839
Securities		11			15			15			49			54
Deposits		77			90			112			358			545
Borrowings		(25	)		(20	)		(43	)		(101	)		(155	)

Total	$	256		$	292		$	344		$	1,119		$	1,649

Total Remaining Purchase Accounting Accretion


In billions	December 31 2011			September 30 2011			December 31 2010			December 31 2009
Non-impaired loans	$	.9		$	1.0		$	1.2		$	1.6
Impaired loans		2.1			2.3			2.2			3.5

Total loans (gross)		3.0			3.3			3.4			5.1
Securities		.4			.4			.5			.1
Deposits		.1			.2			.5			1.0
Borrowings		(.8	)		(1.0	)		(1.1	)		(1.2	)

Total	$	2.7		$	2.9		$	3.3		$	5.0

Accretable Net Interest - Purchased Impaired Loans


In billions				In billions				In billions
October 1, 2011	$	2.3		January 1, 2011	$	2.2		January 1, 2010	$	3.5
Accretion		(.2	)	Accretion		(.7	)	Accretion		(.9	)
Excess cash recoveries				Excess cash recoveries		(.2	)	Excess cash recoveries		(.5	)
Net reclass to accretable difference and other activity				Net reclass to accretable difference and other activity		.8		Net reclass to accretable difference and other activity		.1

December 31, 2011 (a)	$	2.1		December 31, 2011	$	2.1		December 31, 2010	$	2.2

(a)	As of December 31, 2011, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $1.4 billion in future periods.

This will offset the total net accretable interest income of $2.1 billion on purchased impaired loans.

Valuation of Purchased Impaired Loans


	December 31, 2011						September 30, 2011						December 31, 2010						December 31, 2009
Dollars in billions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Unpaid principal balance	$	1.0					$	1.1					$	1.8					$	3.5
Purchased impaired mark		(.1	)					(.2	)					(.4	)					(1.3	)

Recorded investment		.9						.9						1.4						2.2
Allowance for loan losses		(.2	)					(.2	)					(.3	)					(.2	)

Net investment		.7			70	%		.7			64	%		1.1			61	%		2.0			57	%


Consumer and residential mortgage loans:
Unpaid principal balance		6.5						6.8						7.9						11.7
Purchased impaired mark		(.7	)					(.8	)					(1.5	)					(3.6	)

Recorded investment		5.8						6.0						6.4						8.1
Allowance for loan losses		(.8	)					(.8	)					(.6	)					(.3	)

Net investment		5.0			77	%		5.2			76	%		5.8			73	%		7.8			67	%


Total purchased impaired loans:
Unpaid principal balance		7.5						7.9						9.7						15.2
Purchased impaired mark		(.8	)					(1.0	)					(1.9	)					(4.9	)

Recorded investment		6.7						6.9						7.8						10.3
Allowance for loan losses		(1.0	)					(1.0	)					(.9	)					(.5	)

Net investment	$	5.7			76	%	$	5.9			75	%	$	6.9			71	%	$	9.8			64	%


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


In millions	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010
Nonperforming loans, including TDRs (a)
Commercial
Retail/wholesale trade	$	109		$	117		$	148		$	180		$	197
Manufacturing		117			149			160			213			250
Service providers		147			198			189			214			218
Real estate related (b)		252			256			261			253			233
Financial services		36			31			18			27			16
Health care		29			39			38			46			50
Other industries		209			204			233			270			289

Total commercial		899			994			1,047			1,203			1,253

Commercial real estate
Real estate projects		1,051			1,115			1,289			1,468			1,422
Commercial mortgage		294			310			378			416			413

Total commercial real estate		1,345			1,425			1,667			1,884			1,835

Equipment lease financing		22			30			35			41			77

TOTAL COMMERCIAL LENDING		2,266			2,449			2,749			3,128			3,165

Consumer (c)
Home equity		529			484			421			464			448
Residential real estate
Residential mortgage (d)		685			676			630			641			764
Residential construction		41			46			36			46			54
Credit card (e)		8			7			8
Other consumer		31			30			26			29			35

TOTAL CONSUMER LENDING		1,294			1,243			1,121			1,180			1,301

Total nonperforming loans (f)		3,560			3,692			3,870			4,308			4,466

OREO and foreclosed assets
Other real estate owned (OREO) (g)		561			553			546			569			589
Foreclosed and other assets		35			53			65			63			68

TOTAL OREO AND FORECLOSED ASSETS		596			606			611			632			657

Total nonperforming assets	$	4,156		$	4,298		$	4,481		$	4,940		$	5,123

Nonperforming loans to total loans		2.24	%		2.39	%		2.57	%		2.88	%		2.97	%
Nonperforming assets to total loans, OREO and foreclosed assets		2.60			2.77			2.97			3.29			3.39
Nonperforming assets to total assets		1.53			1.59			1.70			1.90			1.94
Allowance for loan and lease losses to nonperforming loans (f), (h)		122			122			120			110			109

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

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

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

(d)

Effective in 2011, nonperforming residential mortgage excludes loans of $61 million accounted for under the fair value option as of December 31, 2011, $68 million as of September 30, 2011, and $85 million as of June 30, 2011 and March 31, 2011, respectively. The comparable balance at December 31, 2010 was not material.

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

(f)	Nonperforming loans do not include government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans.

(g)

Other real estate owned excludes $280 million, $256 million, $273 million, $233 million, and $178 million at December 31, 2011, September 30, 2011, June 30, 2011, March 31, 2011, and December 31, 2010, respectively, related to serviced loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Change in Nonperforming Assets


In millions	January 1, 2011- December 31, 2011			September 30, 2011- December 31, 2011			July 1, 2011- September 30, 2011			April 1, 2011- June 30, 2011			January 1, 2011- March 31, 2011
Beginning balance	$	5,123		$	4,298		$	4,481		$	4,940		$	5,123
New nonperforming assets		3,625			854			925			843			1,003
Charge-offs and valuation adjustments		(1,220	)		(221	)		(286	)		(323	)		(390	)
Principal activity, including paydowns and payoffs		(1,960	)		(506	)		(471	)		(603	)		(380	)
Asset sales and transfers to loans held for sale		(613	)		(152	)		(155	)		(128	)		(178	)
Returned to performing status		(799	)		(117	)		(196	)		(248	)		(238	)

Ending balance	$	4,156		$	4,156		$	4,298		$	4,481		$	4,940

Largest Individual Nonperforming Assets at December 31, 2011 (a)


In millions
Ranking	Outstandings		Industry
1	$	28	Accommodation and Food Services
2		23	Construction
3		23	Real Estate Rental and Leasing
4		20	Real Estate Rental and Leasing
5		20	Accommodation and Food Services
6		19	Real Estate Rental and Leasing
7		17	Real Estate Rental and Leasing
8		17	Real Estate Rental and Leasing
9		16	Real Estate Rental and Leasing
10		16	Real Estate Rental and Leasing

Total	$	199

As a percent of total nonperforming assets 5%

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

Summary of Troubled Debt Restructurings


In millions	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010
Commercial	$	405	$	396	$	305	$	260	$	236
Consumer		1,798		1,751		1,614		1,575		1,422

Total	$	2,203	$	2,147	$	1,919	$	1,835	$	1,658

Nonperforming	$	1,141	$	1,062	$	845	$	882	$	784
Accruing (a)		771		780		752		639		543
Credit card (b)		291		305		322		314		331

Total	$	2,203	$	2,147	$	1,919	$	1,835	$	1,658

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. Consumer government insured or guaranteed loans, held for sale loans, loans accounted for under the fair value option and pooled purchased impaired loans are not classified as TDRs.

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

(b)

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Accruing Loans Past Due (Unaudited)

Accruing Loans Past Due 30 to 59 Days (a)


	Amount										Percent of Total Outstandings
Dollars in millions	Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Dec. 31 2011			Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	122	$	163	$	149	$	208	$	251		.19	%		.26	%		.25	%		.37	%		.45	%
Commercial real estate		96		84		98		315		128		.59			.51			.60			1.84			.71
Equipment lease financing		22		9		9		72		37		.34			.15			.14			1.16			.58
Home equity		173		177		141		146		159		.52			.53			.42			.43			.47
Residential real estate
Non government insured		180		198		201		205		226		1.24			1.35			1.34			1.34			1.41
Government insured		122		121		123		122		105		.84			.83			.82			.80			.66
Credit card		38		39		39		41		46		.96			1.03			1.04			1.11			1.17
Other consumer
Non government insured		58		55		51		60		95		.30			.30			.30			.36			.56
Government insured		207		161		134		123		165		1.08			.89			.79			.73			.97

Total	$	1,018	$	1,007	$	945	$	1,292	$	1,212		.64			.65			.63			.86			.81


Accruing Loans Past Due 60 to 89 Days (a) etc.

	Amount										Percent of Total Outstandings
Dollars in millions	Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Dec. 31 2011			Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	47	$	54	$	75	$	56	$	92		.07	%		.09	%		.13	%		.10	%		.17	%
Commercial real estate		35		25		71		65		62		.22			.15			.44			.38			.35
Equipment lease financing		5		4		2		5		2		.08			.06			.03			.08			.03
Home equity		114		101		91		96		91		.34			.30			.27			.29			.27
Residential real estate
Non government insured		72		81		68		91		107		.50			.55			.45			.59			.67
Government insured		104		110		119		131		118		.72			.75			.80			.85			.74
Credit card		25		26		23		25		32		.63			.69			.61			.67			.82
Other consumer
Non government insured		21		22		20		25		32		.11			.12			.12			.15			.19
Government insured		124		121		84		82		69		.65			.67			.49			.49			.41

Total	$	547	$	544	$	553	$	576	$	605		.34			.35			.37			.39			.40


Accruing Loans Past Due 90 Days or More (a)

	Amount										Percent of Total Outstandings
Dollars in millions	Dec. 31 2011		Sept. 30 2011		Jun. 30 2011		Mar. 31 2011		Dec. 31 2010		Dec. 31 2011			Sept. 30 2011			Jun. 30 2011			Mar. 31 2011			Dec. 31 2010
Commercial	$	49	$	34	$	42	$	49	$	59		.07	%		.05	%		.08	%		.09	%		.11	%
Commercial real estate		6		13		12		6		43		.04			.08			.07			.04			.24
Equipment lease financing				2		1				1					.03			.02						.02
Home equity		221		206		182		165		174		.67			.62			.55			.49			.51
Residential real estate
Non government insured		152		137		145		174		160		1.05			.93			.97			1.13			1.00
Government insured		2,129		1,998		1,926		1,903		1,961		14.71			13.63			12.85			12.41			12.26
Credit card		48		45		45		65		77		1.21			1.19			1.20			1.75			1.96
Other consumer
Non government insured		23		23		21		27		28		.12			.13			.12			.16			.16
Government insured		345		310		272		256		206		1.80			1.71			1.60			1.53			1.22

Total	$	2,973	$	2,768	$	2,646	$	2,645	$	2,709		1.87			1.79			1.76			1.77			1.80

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Business Segment Descriptions (Unaudited)

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

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

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

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

Non-Strategic Assets Portfolio (formerly, Distressed Assets Portfolio) includes commercial residential development loans, cross-border leases, consumer brokered home equity loans, retail mortgages, non-prime mortgages, and residential construction loans. We obtained the majority of these non-strategic assets through acquisitions of other companies, and they fall outside of our core business strategy. At December 31, 2011, more than 83% of the consumer loans in this portfolio were performing. However, certain loans in this business segment continue to require special servicing and management oversight.

BlackRock is the largest publicly traded investment management firm in the world. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, multi-asset class, alternative and cash management separate accounts and funds, including iShares^®, the global product leader in exchange-traded funds. In addition, BlackRock provides market risk management, financial markets advisory and enterprise investment system services globally to a broad base of clients. At December 31, 2011, our economic interest in BlackRock was 21%.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

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


	Three months ended													Year ended
In millions	December 31 2011			September 30 2011		June 30 2011		March 31 2011			December 31 2010			December 31 2011		December 31 2010
Income (Loss)
Retail Banking	$	(28	)	$	33	$	44	$	(18	)	$	44		$	31	$	144
Corporate & Institutional Banking		576			419		448		432			543			1,875		1,794
Asset Management Group		17			33		48		43			28			141		137
Residential Mortgage Banking		(61	)		22		55		71			3			87		269
Non-Strategic Assets Portfolio (b)		(2	)		93		84		25			(71	)		200		(57	)
Other, including BlackRock (c) (d) (e) (f) (g) (h)		(9	)		234		233		279			273			737		737

Income from continuing operations before noncontrolling interests	$	493		$	834	$	912	$	832		$	820		$	3,071	$	3,024

Revenue
Retail Banking	$	1,241		$	1,283	$	1,271	$	1,247		$	1,278		$	5,042	$	5,386
Corporate & Institutional Banking		1,271			1,120		1,180		1,098			1,376			4,669		4,950
Asset Management Group		222			217		226		222			224			887		884
Residential Mortgage Banking		219			252		219		258			228			948		992
Non-Strategic Assets Portfolio (b)		207			238		270		245			200			960		1,136
Other, including BlackRock (c) (d) (e)		389			434		436		561			597			1,820		1,828

Revenue from continuing operations	$	3,549		$	3,544	$	3,602	$	3,631		$	3,903		$	14,326	$	15,176

(a)

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

(b)	Formerly, the Distressed Assets Portfolio.

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

(d)

Includes earnings and gains or losses related to PNC’s equity interest in BlackRock and residual activities that do not meet the criteria for disclosure as a separate reportable business, such as gains or losses related to BlackRock transactions, integration costs, asset and liability management activities including net securities gains or losses, other-than-temporary impairment of investment securities and certain trading activities, exited businesses, equity management activities, alternative 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.

(e)	Amounts for the three months and year ended December 31, 2010 include the $160 million gain ($102 million after taxes) related to our gain on the sale of a portion of our shares of BlackRock stock as part of BlackRock’s November 2010 secondary common stock offering.

(f)	Amounts for the three months and year ended December 31, 2011 include a $198 million noncash charge ($129 million after taxes) for the unamortized discount related to redemption of $750 million of trust preferred securities during the fourth quarter of 2011.

(g)

Amounts for the three months and year ended December 31, 2011 include expenses of $240 million and $324 million ($156 million and $210 million after taxes, respectively) for residential mortgage foreclosure-related expenses, primarily as a result of ongoing governmental matters. The related impact for both the three months and year ended December 31, 2010 was $71 million ($46 million after taxes).

(h)

Includes expenses of $28 million and $42 million ($18 million and $27 million after taxes, respectively) for the three months and year ended December 31, 2011 for integration costs. The related impact for the three months and year ended December 31, 2010 was $78 million and $387 million ($51 million and $251 million after taxes, respectively).


	December 31 2011		September 30 2011		June 30 2011		March 31 2011		December 31 2010
Period End Employees
Full-time employees
Retail Banking		21,056		21,058		21,044		20,932		20,925
Corporate & Institutional Banking		4,364		4,340		3,864		3,761		3,756
Asset Management Group		3,109		3,072		3,053		3,042		3,001
Residential Mortgage Banking		3,718		3,646		3,688		3,682		3,539
Non-Strategic Assets Portfolio		116		114		121		127		152
Other
Operations & Technology		8,933		8,807		8,724		8,644		8,582
Staff Services and Other		4,644		4,639		5,021		4,998		4,862

Total Other		13,577		13,446		13,745		13,642		13,444

Total full-time employees		45,940		45,676		45,515		45,186		44,817

Retail Banking part-time employees		5,083		5,103		5,112		4,981		4,965
Other part-time employees		868		913		1,216		959		987

Total part-time employees		5,951		6,016		6,328		5,940		5,952

Total		51,891		51,692		51,843		51,126		50,769

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Retail Banking (Unaudited) (a)


	Three months ended															Year ended
Dollars in millions	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
INCOME STATEMENT
Net interest income	$	832		$	820		$	810		$	818		$	826		$	3,280		$	3,435
Noninterest income
Service charges on deposits		135			133			125			117			125			510			681
Brokerage		48			48			52			53			52			201			213
Consumer services		195			251			253			228			239			927			912
Other		31			31			31			31			36			124			145

Total noninterest income		409			463			461			429			452			1,762			1,951

Total revenue		1,241			1,283			1,271			1,247			1,278			5,042			5,386
Provision for credit losses		229			206			180			276			157			891			1,103
Noninterest expense		1,056			1,025			1,021			1,001			1,048			4,103			4,056

Pretax earnings (loss)		(44	)		52			70			(30	)		73			48			227
Income taxes (benefit)		(16	)		19			26			(12	)		29			17			83

Earnings (loss)	$	(28	)	$	33		$	44		$	(18	)	$	44		$	31		$	144

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	25,776		$	25,756		$	25,906		$	26,064		$	26,189		$	25,874		$	26,450
Indirect auto		3,872			3,308			2,756			2,400			2,318			3,089			2,098
Indirect other		1,355			1,432			1,519			1,612			1,695			1,478			1,875
Education		9,302			9,124			8,881			9,101			8,758			9,103			8,497
Credit cards		3,805			3,733			3,680			3,731			3,827			3,738			3,938
Other		1,957			1,874			1,809			1,823			1,840			1,866			1,804

Total consumer		46,067			45,227			44,551			44,731			44,627			45,148			44,662
Commercial and commercial real estate		10,369			10,482			10,636			10,786			10,897			10,567			11,177
Floor plan		1,452			1,304			1,473			1,572			1,482			1,450			1,336
Residential mortgage		1,092			1,150			1,196			1,287			1,389			1,180			1,599

Total loans		58,980			58,163			57,856			58,376			58,395			58,345			58,774
Goodwill and other intangible assets		5,735			5,748			5,750			5,769			5,803			5,751			5,861
Other assets		2,455			2,247			2,151			2,525			2,180			2,352			2,793

Total assets	$	67,170		$	66,158		$	65,757		$	66,670		$	66,378		$	66,448		$	67,428

Deposits
Noninterest-bearing demand	$	18,105		$	18,081		$	18,443		$	18,103		$	17,723		$	18,183		$	17,223
Interest-bearing demand		23,583			22,381			21,869			20,921			20,140			22,196			19,776
Money market		41,638			41,191			40,776			40,387			40,362			41,002			40,125

Total transaction deposits		83,326			81,653			81,088			79,411			78,225			81,381			77,124
Savings		8,450			8,218			8,140			7,573			7,155			8,098			6,938
Certificates of deposit		29,998			32,664			34,060			35,365			37,949			33,006			41,539

Total deposits		121,774			122,535			123,288			122,349			123,329			122,485			125,601
Other liabilities		758			786			765			1,147			1,087			855			1,458
Capital		8,152			8,223			8,246			8,048			8,323			8,168			8,439

Total liabilities and equity	$	130,684		$	131,544		$	132,299		$	131,544		$	132,739		$	131,508		$	135,498

PERFORMANCE RATIOS
Return on average capital		(1	)%		2	%		2	%		(1	)%		2	%		—	%		2	%
Return on average assets		(.17	)		.20			.27			(.11	)		.26			.05			.21
Noninterest income to total revenue		33			36			36			34			35			35			36
Efficiency		85			80			80			80			82			81			75

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Retail Banking (Unaudited) (Continued)


	Three months ended															Year ended
Dollars in millions, except as noted	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
OTHER INFORMATION (a)								.
Credit-related statistics:
Commercial nonperforming assets	$	336		$	330		$	301		$	301		$	297
Consumer nonperforming assets		513			454			403			409			422

Total nonperforming assets	$	849		$	784		$	704		$	710		$	719

Impaired loans (b)	$	757		$	786		$	826		$	869		$	895

Commercial lending net charge-offs	$	48		$	39		$	65		$	67		$	49		$	219		$	330
Credit card lending net charge-offs		44			45			54			68			68			211			316
Consumer lending (excluding credit card) net charge-offs		103			98			104			122			108			427			424

Total net charge-offs	$	195		$	182		$	223		$	257		$	225		$	857		$	1,070

Commercial lending annualized net charge-off ratio		1.61	%		1.31	%		2.15	%		2.20	%		1.57	%		1.82	%		2.64	%
Credit card lending annualized net charge-off ratio		4.59	%		4.78	%		5.89	%		7.39	%		7.05	%		5.64	%		8.02	%
Consumer lending (excluding credit card) annualized net charge-off ratio		.94	%		.91	%		.99	%		1.17	%		1.02	%		1.00	%		1.00	%

Total annualized net charge-off ratio		1.31	%		1.24	%		1.55	%		1.79	%		1.53	%		1.47	%		1.82	%

Home equity portfolio credit statistics: (c)
% of first lien positions (d)		39	%		38	%		37	%		36	%		36	%
Weighted average loan-to-value ratios (d)		72	%		72	%		73	%		73	%		73	%
Weighted average FICO scores (e)		743			743			743			731			726
Annualized net charge-off ratio		1.01	%		1.02	%		1.00	%		1.31	%		.97	%		1.09	%		.90	%
Loans 30 - 59 days past due		.58	%		.58	%		.48	%		.47	%		.49	%
Loans 60 - 89 days past due		.38	%		.32	%		.30	%		.31	%		.30	%
Loans 90 days past due		1.22	%		1.12	%		1.02	%		.99	%		1.02	%

Other statistics:
ATMs		6,806			6,754			6,734			6,660			6,673
Branches (f)		2,511			2,469			2,459			2,446			2,470

Customer-related statistics: (in thousands)
Retail Banking checking relationships		5,761			5,722			5,627			5,521			5,465
Retail online banking active customers		3,519			3,479			3,354			3,226			3,057
Retail online bill payment active customers		1,105			1,079			1,045			1,029			977

Brokerage statistics:
Financial consultants (g)		686			703			712			700			694
Full service brokerage offices		38			37			37			34			34
Brokerage account assets (billions)	$	34		$	33		$	35		$	35		$	34

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

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

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

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

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

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Year ended
Dollars in millions, except as noted	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
INCOME STATEMENT
Net interest income	$	904		$	866		$	848		$	799		$	917		$	3,417		$	3,587
Noninterest income
Corporate service fees		230			153			197			187			334			767			961
Other		137			101			135			112			125			485			402

Noninterest income		367			254			332			299			459			1,252			1,363

Total revenue		1,271			1,120			1,180			1,098			1,376			4,669			4,950
Provision for credit losses (benefit)		(136	)		11			31			(30	)		18			(124	)		303
Noninterest expense		494			448			443			445			506			1,830			1,821

Pretax earnings		913			661			706			683			852			2,963			2,826
Income taxes		337			242			258			251			309			1,088			1,032

Earnings	$	576		$	419		$	448		$	432		$	543		$	1,875 $			1,794

AVERAGE BALANCE SHEET
Loans
Commercial	$	38,709		$	36,353		$	34,673		$	33,194		$	31,895		$	35,764		$	32,787
Commercial real estate		13,903			13,670			13,839			14,347			15,035			13,938			16,466
Commercial - real estate related		4,463			3,741			3,494			3,463			3,254			3,782			3,076
Asset-based lending		8,893			8,472			7,961			7,370			6,893			8,171			6,318
Equipment lease financing		5,529			5,457			5,483			5,540			5,605			5,506			5,487

Total loans		71,497			67,693			65,450			63,914			62,682			67,161			64,134
Goodwill and other intangible assets		3,291			3,391			3,456			3,484			3,449			3,405			3,613
Loans held for sale		1,271			1,186			1,229			1,341			1,644			1,257			1,473
Other assets		10,111			9,629			8,877			8,241			8,890			9,220			8,320

Total assets	$	86,170		$	81,899		$	79,012		$	76,980		$	76,665		$	81,043		$	77,540

Deposits
Noninterest-bearing demand	$	35,770		$	32,631		$	29,504		$	27,843		$	27,544		$	31,462		$	24,713
Money market		13,385			13,522			12,643			12,131			11,880			12,925			12,153
Other		5,617			5,781			5,149			6,057			6,632			5,651			6,980

Total deposits		54,772			51,934			47,296			46,031			46,056			50,038			43,846
Other liabilities		14,095			14,094			12,871			12,205			13,155			13,323			11,949
Capital		8,256			7,992			7,928			7,858			8,073			8,010			8,588

Total liabilities and equity	$	77,123		$	74,020		$	68,095		$	66,094		$	67,284		$	71,371		$	64,383

PERFORMANCE RATIOS
Return on average capital		28	%		21	%		23	%		22	%		27	%		23	%		21	%
Return on average assets		2.65			2.03			2.27			2.28			2.81			2.31			2.31
Noninterest income to total revenue		29			23			28			27			33			27			28
Efficiency		39			40			38			41			37			39			37

COMMERCIAL MORTGAGE SERVICING
PORTFOLIO (in billions)
Beginning of period	$	267		$	268		$	266		$	266		$	263		$	266		$	287
Acquisitions/additions		12			8			13			10			12			43			35
Repayments/transfers		(12	)		(9	)		(11	)		(10	)		(9	)		(42	)		(56	)

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

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management	$	296		$	298		$	292		$	301		$	305		$	1,187		$	1,220
Capital Markets	$	160		$	158		$	165		$	139		$	205		$	622		$	606
Commercial mortgage loans held for sale (c)	$	38		$	23		$	23		$	29		$	9		$	113		$	58
Commercial mortgage loan servicing income, net of amortization (d)		48			32			29			47			48			156			244
Commercial mortgage servicing rights (impairment)/recovery (e)		—			(82	)		(40	)		(35	)		59			(157	)		(40	)

Total commercial mortgage banking activities	$	86		$	(27	)	$	12		$	41		$	116		$	112		$	262
Total loans (f)	$	73,417		$	70,307		$	66,142		$	64,368		$	63,695
Net carrying amount of commercial mortgage servicing rights (f)	$	468		$	482		$	592		$	645		$	665
Credit-related statistics:
Nonperforming assets (f)	$	1,889		$	2,033		$	2,260		$	2,574		$	2,594
Impaired loans (f) (g)	$	404		$	472		$	603		$	659		$	714
Net charge-offs	$	43		$	94		$	85		$	153		$	349		$	375		$	1,074

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

(b)	Represents consolidated PNC amounts. Our 2011 Form 10-K will include additional information regarding these items.

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

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

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

(f)	Presented as of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Asset Management Group (Unaudited) (a)


	Three months ended															Year ended
Dollars in millions, except as noted	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
INCOME STATEMENT
Net interest income	$	61		$	58		$	59		$	60		$	65		$	238		$	256
Noninterest income		161			159			167			162			159			649			628

Total revenue		222			217			226			222			224			887			884
Provision for credit losses (benefit)		10			(10	)		(18	)		(6	)		9			(24	)		20
Noninterest expense		184			175			168			160			171			687			647

Pretax earnings		28			52			76			68			44			224			217
Income taxes		11			19			28			25			16			83			80

Earnings	$	17		$	33		$	48		$	43		$	28		$	141		$	137

AVERAGE BALANCE SHEET
Loans
Consumer	$	4,173		$	4,134		$	4,068		$	4,054		$	4,083		$	4,108		$	4,025
Commercial and commercial real estate		1,193			1,223			1,289			1,503			1,426			1,301			1,434
Residential mortgage		696			705			711			715			723			706			850

Total loans		6,062			6,062			6,068			6,272			6,232			6,115			6,309
Goodwill and other intangible assets		349			356			365			374			384			361			399
Other assets		233			246			220			271			271			243			246

Total assets	$	6,644		$	6,664		$	6,653		$	6,917		$	6,887		$	6,719		$	6,954

Deposits
Noninterest-bearing demand	$	1,305		$	1,307		$	1,061		$	1,161		$	1,432		$	1,209		$	1,324
Interest-bearing demand		2,529			2,315			2,309			2,291			2,033			2,361			1,835
Money market		3,625			3,591			3,548			3,591			3,393			3,589			3,283

Total transaction deposits		7,459			7,213			6,918			7,043			6,858			7,159			6,442
CDs/IRAs/savings deposits		587			620			645			676			694			632			748

Total deposits		8,046			7,833			7,563			7,719			7,552			7,791			7,190
Other liabilities		78			76			71			69			74			74			89
Capital		355			345			353			344			380			349			402

Total liabilities and equity	$	8,479		$	8,254		$	7,987		$	8,132		$	8,006		$	8,214		$	7,681

PERFORMANCE RATIOS
Return on average capital		19	%		38	%		55	%		51	%		29	%		40	%		34	%
Return on average assets		1.02			1.96			2.89			2.52			1.61			2.10			1.97
Noninterest income to total revenue		73			73			74			73			71			73			71
Efficiency		83			81			74			72			76			77			73

OTHER INFORMATION
Total nonperforming assets (b)	$	60		$	69		$	69		$	74		$	90
Impaired loans (b) (c)	$	127		$	134		$	135		$	143		$	146
Total net charge-offs (recoveries)	$	6		$	5		$	—		$	(11	)	$	21		$	—		$	42
ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	100		$	95		$	102		$	102		$	99
Institutional		110			107			117			117			113

Total	$	210		$	202		$	219		$	219		$	212

Asset Type
Equity	$	111		$	104		$	121		$	120		$	115
Fixed income		66			66			65			64			63
Liquidity/Other		33			32			33			35			34

Total	$	210		$	202		$	219		$	219		$	212

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

Total	$	107		$	103		$	109		$	110		$	108

Asset Type
Equity	$	53		$	49		$	56		$	57		$	55
Fixed income		38			38			37			36			36
Liquidity/Other		16			16			16			17			17

Total	$	107		$	103		$	109		$	110		$	108

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

Total	$	103		$	99		$	110		$	109		$	104

Asset Type
Equity	$	58		$	55		$	65		$	63		$	60
Fixed income		28			28			28			28			27
Liquidity/Other		17			16			17			18			17

Total	$	103		$	99		$	110		$	109		$	104

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

(b)	As of period end.

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

(d)	Excludes brokerage account assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Year ended
Dollars in millions, except as noted	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
INCOME STATEMENT
Net interest income	$	52		$	46		$	47		$	56		$	60		$	201		$	256
Noninterest income
Loan servicing revenue
Servicing fees		53			60			63			50			46			226			242
Net MSR hedging gains		35			69			52			64			47			220			245
Loan sales revenue		74			72			52			84			66			282			231
Other		5			5			5			4			9			19			18

Total noninterest income		167			206			172			202			168			747			736

Total revenue		219			252			219			258			228			948			992
Provision for credit losses (benefit)		(10	)		15			(8	)		8			8			5			5
Noninterest expense		317			203			140			137			215			797			563

Pretax earnings (loss)		(88	)		34			87			113			5			146			424
Income taxes (benefit)		(27	)		12			32			42			2			59			155

Earnings (loss)	$	(61	)	$	22		$	55		$	71		$	3		$	87		$	269

AVERAGE BALANCE SHEET
Portfolio loans	$	2,868		$	2,777		$	2,703		$	2,734		$	2,667		$	2,771		$	2,649
Loans held for sale		1,409			1,301			1,464			1,802			1,731			1,492			1,322
Mortgage servicing rights (MSR)		701			851			1,027			1,048			863			905			1,017
Other assets		6,786			5,948			5,628			6,035			5,008			6,102			4,259

Total assets	$	11,764		$	10,877		$	10,822		$	11,619		$	10,269		$	11,270		$	9,247

Deposits	$	1,756		$	1,785		$	1,569		$	1,587		$	2,089		$	1,675		$	2,716
Borrowings and other liabilities		4,324			3,788			3,253			4,144			3,444			3,877			2,823
Capital		832			694			667			729			745			731			919

Total liabilities and equity	$	6,912		$	6,267		$	5,489		$	6,460		$	6,278		$	6,283		$	6,458

PERFORMANCE RATIOS
Return on average capital		(29	)%		13	%		33	%		39	%		2	%		12	%		29	%
Return on average assets		(2.06	)		.80			2.04			2.48			.12			.77			2.91
Noninterest income to total revenue		76			82			79			78			74			79			74
Efficiency		145			81			64			53			94			84			57

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO (in billions)
Beginning of period	$	121		$	125		$	127		$	125		$	131		$	125		$	145
Acquisitions		1									5						6
Additions		3			2			4			3			3			12			10
Repayments/transfers		(7	)		(6	)		(6	)		(6	)		(9	)		(25	)		(30	)

End of period	$	118		$	121		$	125		$	127		$	125		$	118		$	125

Servicing portfolio statistics: (b)
Fixed rate		90	%		90	%		90	%		90	%		89	%
Adjustable rate/balloon		10	%		10	%		10	%		10	%		11	%
Weighted average interest rate		5.38	%		5.44	%		5.49	%		5.53	%		5.62	%
MSR capitalized value (in billions)	$	.7		$	.7		$	1.0		$	1.1		$	1.0
MSR capitalization value (in basis points)		54			56			80			88			82
Weighted average servicing fee (in basis points)		29			29			29			30			30

OTHER INFORMATION
Loan origination volume (in billions)	$	3.0		$	2.6		$	2.6		$	3.2		$	3.5		$	11.4		$	10.5
Percentage of originations represented by:
Agency and government programs		100	%		100	%		100	%		100	%		99	%		100	%		99	%
Refinance volume		79	%		69	%		68	%		85	%		83	%		76	%		74	%
Total nonperforming assets (b)	$	76		$	77		$	65		$	78		$	172
Impaired loans (b) (c)	$	112		$	132		$	141		$	158		$	161

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

(b)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Non-Strategic Assets Portfolio (Unaudited) (a) (b)


	Three months ended															Year ended
Dollars in millions	December 31 2011			September 30 2011			June 30 2011			March 31 2011			December 31 2010			December 31 2011			December 31 2010
INCOME STATEMENT
Net interest income	$	192		$	228		$	257		$	236		$	256		$	913		$	1,229
Noninterest income		15			10			13			9			(56	)		47			(93	)

Total revenue		207			238			270			245			200			960			1,136
Provision for credit losses		88			45			81			152			231			366			976
Noninterest expense		119			47			56			53			81			275			250

Pretax earnings (loss)		—			146			133			40			(112	)		319			(90	)
Income taxes (benefit)		2			53			49			15			(41	)		119			(33	)

Earnings (loss)	$	(2	)	$	93		$	84		$	25		$	(71	)	$	200		$	(57	)

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	1,030		$	1,143		$	1,363		$	1,582		$	1,840		$	1,277		$	2,240
Lease financing		703			691			697			757			759			712			781

Total commercial lending		1,733			1,834			2,060			2,339			2,599			1,989			3,021

Consumer Lending:
Consumer		5,006			5,167			5,301			5,559			5,903			5,257			6,240
Residential real estate		5,937			6,116			6,265			6,332			6,845			6,161			7,585

Total consumer lending		10,943			11,283			11,566			11,891			12,748			11,418			13,825

Total portfolio loans		12,676			13,117			13,626			14,230			15,347			13,407			16,846
Other assets (c)		(368	)		(402	)		(256	)		(109	)		15			(288	)		671

Total assets	$	12,308		$	12,715		$	13,370		$	14,121		$	15,362		$	13,119		$	17,517

Deposits and other liabilities	$	85		$	76		$	137		$	159		$	128		$	111		$	154
Capital		1,213			1,273			1,422			1,371			1,476			1,319			1,621

Total liabilities and equity	$	1,298		$	1,349		$	1,559		$	1,530		$	1,604		$	1,430		$	1,775

PERFORMANCE RATIOS
Return on average capital		(1	)%		29	%		24	%		7	%		(19	)%		15	%		(4	)%
Return on average assets		(.06	)		2.90			2.52			.72			(1.83	)		1.52			(.33	)

OTHER INFORMATION
Nonperforming assets (d)	$	1,024		$	1,064		$	1,087		$	1,208		$	1,242
Impaired loans (d) (e)	$	5,251		$	5,390		$	5,543		$	5,685		$	5,879
Net charge-offs	$	77		$	74		$	96		$	123		$	183		$	370		$	677
Annualized net charge-off ratio		2.41	%		2.24	%		2.83	%		3.51	%		4.73	%		2.76	%		4.02	%

LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	976		$	1,077		$	1,222		$	1,474		$	1,684
Lease financing		670			701			701			695			764

Total commercial lending		1,646			1,778			1,923			2,169			2,448

Consumer Lending:
Consumer		4,930			5,066			5,240			5,381			5,769
Residential real estate		5,840			6,065			6,250			6,325			6,564

Total consumer lending		10,770			11,131			11,490			11,706			12,333

Total portfolio loans	$	12,416		$	12,909		$	13,413		$	13,875		$	14,781

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

(b)	Formerly, the Distressed Assets Portfolio.

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

(d)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Glossary of Terms

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

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

Annualized - Adjusted to reflect a full year of activity.

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

Basis point - One hundredth of a percentage point.

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

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

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

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

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. It is based on a measurement of economic risk, as opposed to risk as defined by regulatory bodies. The economic capital measurement process involves converting a risk distribution to the capital that is required to support the risk, consistent with our target credit rating. As such, economic risk serves as a “common currency” of risk that allows us to compare different risks on a similar basis.

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

Efficiency - Noninterest expense divided by total revenue.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

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.

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

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

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

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

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

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

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

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 22

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).

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

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

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

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

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

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

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

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

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

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

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

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

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 23

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

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

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

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

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

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

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

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

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

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

Total equity - Total shareholders’ equity plus noncontrolling interests.

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

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

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

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

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

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

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