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

Attached files

file	filename
8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d416131d8k.htm
EX-99.2 - ELECTRONIC PRESENTATION SLIDES FOR EARNINGS RELEASE CONFERENCE CALL - PNC FINANCIAL SERVICES GROUP, INC.	d416131dex992.htm

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2012

(Unaudited)

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2012

(UNAUDITED)


	Page
Consolidated Results:

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

Business Segment Results:

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

The information contained in this Financial Supplement is preliminary, unaudited and based on data available on October 16, 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 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., Alabama, Delaware, Georgia, Virginia, Missouri, Wisconsin and South Carolina. PNC also provides certain products and services internationally.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Consolidated Income Statement (Unaudited)


	Three months ended															Nine months ended
In millions, except per share data	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
Interest Income
Loans	$	2,076		$	2,163		$	1,951		$	1,902		$	1,904		$	6,190		$	5,693
Investment securities		504			527			526			523			511			1,557			1,638
Other		90			106			120			109			115			316			329

Total interest income		2,670			2,796			2,597			2,534			2,530			8,063			7,660

Interest Expense
Deposits		103			83			103			139			167			289			529
Borrowed funds		168			187			203			196			188			558			630

Total interest expense		271			270			306			335			355			847			1,159

Net interest income		2,399			2,526			2,291			2,199			2,175			7,216			6,501

Noninterest Income
Asset management		305			278			284			250			287			867			838
Consumer services		288			290			264			269			330			842			974
Corporate services		295			290			232			266			187			817			632
Residential mortgage (a)		227			(173	)		230			157			198			284			556
Service charges on deposits		152			144			127			140			140			423			394
Net gains on sales of securities		40			62			57			62			68			159			187
Net other-than-temporary impairments		(24	)		(34	)		(38	)		(44	)		(35	)		(96	)		(108	)
Other (b)		406			240			285			250			194			931			803

Total noninterest income		1,689			1,097			1,441			1,350			1,369			4,227			4,276

Total revenue		4,088			3,623			3,732			3,549			3,544			11,443			10,777
Provision For Credit Losses		228			256			185			190			261			669			962
Noninterest Expense
Personnel		1,171			1,119			1,111			1,052			949			3,401			2,914
Occupancy		212			199			190			198			171			601			540
Equipment		185			181			175			177			159			541			484
Marketing		74			67			68			74			72			209			175
Other (c)		1,008			1,082			911			1,218			789			3,001			2,273

Total noninterest expense (d)		2,650			2,648			2,455			2,719			2,140			7,753			6,386

Income before income taxes and noncontrolling interests		1,210			719			1,092			640			1,143			3,021			3,429
Income taxes		285			173			281			147			309			739			851

Net income		925			546			811			493			834			2,282			2,578

Less: Net income (loss) attributable to noncontrolling interests		(14	)		(5	)		6			17			4			(13	)		(2	)
Preferred stock dividends and discount accretion		63			25			39			25			4			127			33

Net income attributable to common shareholders	$	876		$	526		$	766		$	451		$	826		$	2,168		$	2,547

Earnings Per Common Share
Basic	$	1.66		$	1.00		$	1.45		$	.86		$	1.57		$	4.10		$	4.84
Diluted	$	1.64		$	.98		$	1.44		$	.85		$	1.55		$	4.06		$	4.79

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

Efficiency		65	%		73	%		66	%		77	%		60	%		68	%		59	%
Noninterest income to total revenue		41	%		30	%		39	%		38	%		39	%		37	%		40	%
Effective tax rate (e)		23.6	%		24.1	%		25.7	%		23.0	%		27.0	%		24.5	%		24.8	%

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

(a)	Includes provision for residential mortgage repurchase obligations.

(b)	Includes gain on sale of Visa Class B common shares.

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

(d)	Includes integration costs.

(e)	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	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011
Assets
Cash and due from banks (a)	$	4,284		$	4,136		$	4,162		$	4,105		$	3,982
Federal funds sold and resale agreements (b)		1,724			1,646			1,371			2,205			1,806
Trading securities		2,664			2,121			2,639			2,513			2,960
Interest-earning deposits with banks (a)		2,321			3,995			2,084			1,169			2,773
Loans held for sale (b)		2,737			3,333			2,456			2,936			2,491
Investment securities (a)		62,814			61,937			64,554			60,634			62,105
Loans (a) (b)		181,864			180,425			176,214			159,014			154,543
Allowance for loan and lease losses (a)		(4,039	)		(4,156	)		(4,196	)		(4,347	)		(4,507	)

Net loans		177,825			176,269			172,018			154,667			150,036
Goodwill		9,163			9,158			9,169			8,285			8,207
Other intangible assets		1,778			1,804			2,019			1,859			1,949
Equity investments (a) (c)		10,846			10,617			10,352			10,134			9,915
Other (a) (b)		24,647			24,559			25,059			22,698			23,246

Total assets	$	300,803		$	299,575		$	295,883		$	271,205		$	269,470

Liabilities
Deposits
Noninterest-bearing	$	64,484		$	64,476		$	62,463		$	59,048		$	55,180
Interest-bearing		141,779			142,447			143,664			128,918			132,552

Total deposits		206,263			206,923			206,127			187,966			187,732
Borrowed funds
Federal funds purchased and repurchase agreements		3,877			4,166			4,832			2,984			3,105
Federal Home Loan Bank borrowings		9,942			10,440			8,957			6,967			5,015
Bank notes and senior debt		9,960			10,185			12,065			11,793			11,990
Subordinated debt		6,754			7,593			8,221			8,321			9,564
Commercial paper (a)		10,731			9,469			6,870			4,271			3,325
Other (a)		1,840			1,836			1,594			2,368			2,103

Total borrowed funds		43,104			43,689			42,539			36,704			35,102
Allowance for unfunded loan commitments and letters of credit		239			224			243			240			217
Accrued expenses (a)		4,015			3,428			3,607			4,175			3,587
Other (a)		5,380			5,097			5,131			4,874			5,590

Total liabilities		259,001			259,361			257,647			233,959			232,228

Equity
Preferred stock (d)
Common stock - $5 par value
Authorized 800 shares, issued 538, 537, 537, 537, and 536 shares		2,689			2,687			2,685			2,683			2,682
Capital surplus - preferred stock		3,559			3,120			1,638			1,637			1,636
Capital surplus - common stock and other		12,149			12,098			12,074			12,072			12,054
Retained earnings		19,813			19,149			18,834			18,253			17,985
Accumulated other comprehensive income (loss)		991			402			281			(105	)		397
Common stock held in treasury at cost: 9, 8, 9, 10, and 10 shares		(518	)		(451	)		(467	)		(487	)		(535	)

Total shareholders’ equity		38,683			37,005			35,045			34,053			34,219
Noncontrolling interests		3,119			3,209			3,191			3,193			3,023

Total equity		41,802			40,214			38,236			37,246			37,242

Total liabilities and equity	$	300,803		$	299,575		$	295,883		$	271,205		$	269,470

Capital Ratios
Tier 1 common (e)		9.5	%		9.3	%		9.3	%		10.3	%		10.5	%
Tier 1 risk-based (e)		11.7			11.4			11.4			12.6			13.1
Total risk-based (e)		14.5			14.2			14.4			15.8			16.5
Leverage (e)		10.4			10.1			10.5			11.1			11.4
Common shareholders’ equity to assets		11.7			11.3			11.3			12.0			12.1

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

(b)	Amounts include assets for which PNC has elected the fair value option. Our first and second quarter 2012 Form 10-Qs included, and third quarter 2012 Form 10-Q will include, additional information regarding these items.

(c)	Amounts include our equity interest in BlackRock.

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

(e)	The ratio as of September 30, 2012 is estimated.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Average Consolidated Balance Sheet (Unaudited) (a)


	Three months ended															Nine months ended
In millions	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
Assets
Interest-earning assets:
Investment securities
Securities available for sale
Residential mortgage-backed
Agency	$	26,546		$	26,968		$	27,031		$	25,691		$	22,822		$	26,847		$	25,960
Non-agency		6,490			6,716			6,577			6,859			7,135			6,594			7,600
Commercial mortgage-backed		3,720			3,561			3,774			3,640			3,623			3,685			3,401
Asset-backed		5,525			5,401			4,329			3,832			3,817			5,087			3,257
US Treasury and government agencies		2,516			2,549			3,123			3,376			3,699			2,729			4,622
State and municipal		1,972			1,902			1,770			1,767			1,929			1,882			2,081
Other debt		3,045			3,178			2,996			2,731			3,113			3,073			3,558
Corporate stocks and other		390			317			347			446			449			351			422

Total securities available for sale		50,204			50,592			49,947			48,342			46,587			50,248			50,901
Securities held to maturity
Residential mortgage-backed		4,480			4,259			4,576			4,658			3,840			4,438			1,671
Commercial mortgage-backed		4,180			4,376			4,635			4,794			4,520			4,396			4,326
Asset-backed		825			874			1,170			1,353			1,863			956			2,198
US Treasury and government agencies		227			225			223			221			124			225			42
State and municipal		671			671			671			670			389			671			136
Other		357			359			361			363			365			359			173

Total securities held to maturity		10,740			10,764			11,636			12,059			11,101			11,045			8,546

Total investment securities		60,944			61,356			61,583			60,401			57,688			61,293			59,447
Loans
Commercial		79,250			77,131			69,286			63,483			59,951			75,237			58,074
Commercial real estate		18,514			18,440			16,818			16,413			16,347			17,927			16,886
Equipment lease financing		6,774			6,586			6,377			6,233			6,150			6,580			6,215
Consumer		60,570			59,832			57,148			55,556			54,632			59,188			54,370
Residential real estate		15,575			15,932			14,927			14,474			14,717			15,478			15,075

Total loans		180,683			177,921			164,556			156,159			151,797			174,410			150,620
Loans held for sale		2,956			3,016			2,910			2,673			2,497			2,961			2,801
Federal funds sold and resale agreements		1,601			1,666			1,821			2,035			2,030			1,696			2,385
Other		6,422			6,173			6,864			7,138			10,060			6,485			7,717

Total interest-earning assets		252,606			250,132			237,734			228,406			224,072			246,845			222,970
Noninterest-earning assets:
Allowance for loan and lease losses		(4,152	)		(4,176	)		(4,314	)		(4,472	)		(4,592	)		(4,214	)		(4,717	)
Cash and due from banks		3,907			3,694			3,777			3,883			3,544			3,793			3,457
Other		47,781			46,501			44,345			42,905			43,827			46,215			41,809

Total assets	$	300,142		$	296,151		$	281,542		$	270,722		$	266,851		$	292,639		$	263,519

(a)	Calculated using average daily balances.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

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


	Three months ended										Nine months ended
In millions	September 30 2012		June 30 2012		March 31 2012		December 31 2011		September 30 2011		September 30 2012		September 30 2011
Liabilities and Equity
Interest-bearing liabilities:
Interest-bearing deposits
Money market	$	67,628	$	66,902	$	61,162	$	58,897	$	59,009	$	65,240	$	58,721
Demand		34,733		34,388		31,599		29,338		27,654		33,577		26,965
Savings		10,066		10,008		9,183		8,545		8,305		9,754		8,063
Retail certificates of deposit		25,695		27,373		29,011		30,888		33,607		27,353		35,061
Time deposits in foreign offices and other time		3,230		3,577		3,238		2,869		2,191		3,348		2,796

Total interest-bearing deposits		141,352		142,248		134,193		130,537		130,766		139,272		131,606
Borrowed funds
Federal funds purchased and repurchase agreements		4,659		4,937		4,551		3,714		3,685		4,716		4,723
Federal Home Loan Bank borrowings		10,626		10,238		8,967		6,090		5,015		9,946		5,041
Bank notes and senior debt		9,657		10,618		11,138		11,463		10,480		10,468		11,115
Subordinated debt		6,408		7,293		7,719		8,463		8,982		7,137		9,104
Commercial paper		10,518		8,229		5,684		3,527		3,428		8,152		3,135
Other		1,868		1,809		2,153		2,408		2,308		1,943		2,630

Total borrowed funds		43,736		43,124		40,212		35,665		33,898		42,362		35,748

Total interest-bearing liabilities		185,088		185,372		174,405		166,202		164,664		181,634		167,354
Noninterest-bearing liabilities and equity:
Noninterest-bearing deposits		62,483		60,478		57,900		55,946		53,300		60,295		50,279
Allowance for unfunded loan commitments and letters of credit		225		243		240		217		202		236		198
Accrued expenses and other liabilities		11,590		10,375		11,186		11,132		12,478		11,052		11,007
Equity		40,756		39,683		37,811		37,225		36,207		39,422		34,681

Total liabilities and equity	$	300,142	$	296,151	$	281,542	$	270,722	$	266,851	$	292,639	$	263,519

(a) Calculated using average daily balances. Supplemental Average Balance Sheet Information (Unaudited) Deposits and Common Shareholders’ Equity
Interest-bearing deposits	$	141,352	$	142,248	$	134,193	$	130,537	$	130,766	$	139,272	$	131,606
Noninterest-bearing deposits		62,483		60,478		57,900		55,946		53,300		60,295		50,279

Total deposits	$	203,835	$	202,726	$	192,093	$	186,483	$	184,066	$	199,567	$	181,885
Transaction deposits	$	164,844	$	161,768	$	150,661	$	144,181	$	139,963	$	159,112	$	135,965
Common shareholders’ equity	$	34,323	$	33,648	$	32,981	$	32,552	$	32,124	$	33,654	$	31,147


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Details of Net Interest Margin (Unaudited) (a)


	Three months ended															Nine months ended
	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
Average yields/rates
Yield on interest-earning assets
Investment securities
Securities available for sale
Residential mortgage-backed
Agency		3.03	%		3.17	%		3.14	%		3.11	%		3.34	%		3.11	%		3.57	%
Non-agency		5.08			5.63			5.38			5.44			5.13			5.37			5.28
Commercial mortgage-backed		4.29			4.41			4.42			4.43			4.41			4.37			4.62
Asset-backed		2.09			1.91			2.24			2.39			2.38			2.07			2.49
US Treasury and government agencies		2.08			2.33			1.80			2.61			3.01			2.05			2.63
State and municipal		4.62			4.63			5.13			4.58			4.27			4.78			4.53
Other debt		2.85			2.56			2.55			2.75			2.42			2.65			2.54
Corporate stocks and other		.12			.11			.03			.04			.04			.09			.05
Total securities available for sale		3.27			3.40			3.38			3.46			3.54			3.35			3.68
Securities held to maturity
Residential mortgage-backed		3.50			3.70			3.58			3.39			3.45			3.59			3.47
Commercial mortgage-backed		4.46			4.56			4.62			4.57			4.95			4.55			5.09
Asset-backed		2.61			1.83			1.68			1.98			1.87			1.99			2.23
US Treasury and government agencies		3.81			3.79			3.79			3.81			4.29			3.79			4.25
State and municipal		4.18			4.20			4.18			4.19			4.48			4.19			4.46
Other		2.82			2.89			2.83			2.88			2.83			2.84			2.85
Total securities held to maturity		3.83			3.90			3.82			3.74			3.82			3.85			3.98
Total investment securities		3.37			3.49			3.47			3.51			3.59			3.44			3.72

Loans
Commercial		4.30			4.75			4.51			4.66			4.86			4.52			4.92
Commercial real estate		5.26			5.78			5.19			5.33			5.25			5.42			5.12
Equipment lease financing		4.45			4.96			4.74			4.84			5.11			4.71			5.01
Consumer		4.63			4.67			4.78			4.81			4.82			4.69			4.92
Residential real estate		5.18			5.44			5.59			5.35			5.90			5.40			6.09
Total loans		4.59			4.90			4.78			4.85			5.00			4.76			5.06

Loans held for sale		4.34			6.00			6.89			5.96			7.31			5.73			7.31
Federal funds sold and resale agreements		1.22			1.45			1.58			1.48			1.55			1.43			1.36
Other		3.27			3.62			3.71			3.45			2.43			3.53			2.63
Total yield on interest-earning assets		4.24			4.51			4.41			4.44			4.52			4.39			4.61

Rate on interest-bearing liabilities
Interest-bearing deposits
Money market		.21			.21			.23			.25			.31			.21			.33
Demand		.04			.04			.04			.05			.08			.04			.10
Savings		.09			.10			.10			.16			.19			.10			.19
Retail certificates of deposit		.90			.57			.80			1.16			1.26			.76			1.29
Time deposits in foreign offices and other time		.38			.49			.49			.53			.72			.45			.65
Total interest-bearing deposits		.29			.24			.31			.42			.51			.28			.54

Borrowed funds
Federal funds purchased and repurchase agreements		.19			.21			.22			.15			.15			.21			.16
Federal Home Loan Bank borrowings		.69			.74			.80			.93			.99			.74			1.01
Bank notes and senior debt		2.16			2.30			2.48			2.11			2.01			2.32			2.25
Subordinated debt		4.71			4.77			5.09			4.91			4.76			4.87			5.16
Commercial paper		.28			.26			.26			.28			.23			.27			.27
Other		2.43			2.25			2.05			1.87			1.95			2.23			1.89
Total borrowed funds		1.53			1.72			2.01			2.17			2.20			1.74			2.34
Total rate on interest-bearing liabilities		.58			.58			.70			.80			.86			.62			.92

Interest rate spread		3.66			3.93			3.71			3.64			3.66			3.77			3.69
Impact of noninterest-bearing sources		.16			.15			.19			.22			.23			.16			.23

Net interest margin		3.82	%		4.08	%		3.90	%		3.86	%		3.89	%		3.93	%		3.92	%

(a)

Calculated as annualized taxable-equivalent net interest income divided by average earning assets. The interest income earned on certain earning assets is completely or partially exempt from federal income tax. As such, these tax-exempt instruments typically yield lower returns than taxable investments. To provide more meaningful comparisons of yields and margins for all earning assets in calculating net interest margins, in this table we use net interest income on a taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on taxable investments. This adjustment is not permitted under generally accepted accounting principles (GAAP) in the Consolidated Income Statement. The taxable-equivalent adjustments to net interest income for the three months ended September 30, 2012, June 30, 2012, March 31, 2012, December 31, 2011, and September 30, 2011, were $36 million, $35 million, $31 million, $28 million, and $27 million, respectively. The taxable-equivalent adjustments to net interest income for the nine months ended September 30, 2012 and September 30, 2011 were $102 million and $76 million, respectively.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

Per Share Related Information (Unaudited)


	Three months ended												Nine months ended
In millions, except per share data	September 30 2012			June 30 2012			March 31 2012		December 31 2011		September 30 2011		September 30 2012			September 30 2011
In millions, except per share data	September 30 2012			June 30 2012			March 31 2012		December 31 2011		September 30 2011		September 30 2012			September 30 2011
Basic
Net income	$	925		$	546		$	811	$	493	$	834	$	2,282		$	2,578
Less:
Net income (loss) attributable to noncontrolling interests		(14	)		(5	)		6		17		4		(13	)		(2	)
Preferred stock dividends and discount accretion and redemptions		63			25			39		25		4		127			33
Dividends and undistributed earnings allocated to nonvested restricted shares		5			1			4		2		4		10			10

Net income attributable to basic common shares	$	871		$	525		$	762	$	449	$	822	$	2,158		$	2,537
Basic weighted-average common shares outstanding		526			527			526		524		524		526			524
Basic earnings per common share	$	1.66		$	1.00		$	1.45	$	.86	$	1.57	$	4.10		$	4.84

Diluted
Net income attributable to basic common shares	$	871		$	525		$	762	$	449	$	822	$	2,158		$	2,537
Less: BlackRock common stock equivalents		3			4			3		3		6		10			16

Net income attributable to diluted common shares	$	868		$	521		$	759	$	446	$	816	$	2,148		$	2,521
Basic weighted-average common shares outstanding		526			527			526		524		524		526			524
Dilutive potential common shares		3			3			3		2		2		3			2

Diluted weighted-average common shares outstanding		529			530			529		526		526		529			526
Diluted earnings per common share	$	1.64		$	.98		$	1.44	$	.85	$	1.55	$	4.06		$	4.79

Selected Consolidated Income Statement Information (Unaudited)


	Three months ended										Nine months ended
In millions, except per share data	September 30 2012		June 30 2012		March 31 2012		December 31 2011		September 30 2011		September 30 2012		September 30 2011
In millions, except per share data	September 30 2012		June 30 2012		March 31 2012		December 31 2011		September 30 2011		September 30 2012		September 30 2011
Noninterest Income
Gain on sale of Visa Class B common shares (Pre-tax)	$	137									$	137
Impact on diluted earnings per share (a)		.17										.17
Provision for residential mortgage repurchase obligations (Pre-tax)	$	37	$	438	$	32	$	36	$	31	$	507	$	66
Impact on diluted earnings per share (a)		.05		.54		.04		.04		.04		.62		.08

Noninterest Expense
Noncash charges for unamortized discounts related to redemption of trust preferred securities (Pre-tax)	$	95	$	130			$	198			$	225
Impact on diluted earnings per share (a)		.12		.16				.24				.28
Expenses for residential mortgage foreclosure-related matters (Pre-tax)	$	53	$	43	$	38	$	240	$	63	$	134	$	84
Impact on diluted earnings per share (a)		.06		.05		.05		.30		.08		.16		.10
Integration costs (Pre-tax)	$	35	$	52	$	145	$	28	$	8	$	232	$	14
Impact on diluted earnings per share (a)		.04		.06		.18		.04		.01		.29		.02

Income Taxes
Benefit related to reversal of deferred tax liabilities (b)													$	54
Impact on diluted earnings per share (a)														.07

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

Details of Loans (Unaudited)


	September 30		June 30		March 31		December 31		September 30
In millions	2012		2012		2012		2011		2011
Commercial
Retail/wholesale trade	$	13,381	$	13,434	$	12,983	$	11,539	$	11,287
Manufacturing		13,498		13,442		12,684		11,453		10,980
Service providers		11,822		11,875		11,215		9,717		9,326
Real estate related (a)		10,208		10,051		10,091		8,488		8,073
Financial services		9,136		9,397		8,273		6,646		5,676
Health care		6,652		6,240		5,695		5,068		4,668
Other industries		14,971		14,462		14,574		12,783		12,240

Total commercial		79,668		78,901		75,515		65,694		62,250

Commercial real estate
Real estate projects		12,801		12,837		12,589		10,640		10,936
Commercial mortgage		5,808		5,643		5,945		5,564		5,477

Total commercial real estate		18,609		18,480		18,534		16,204		16,413

Equipment lease financing		6,923		6,764		6,594		6,416		6,186

Total commercial lending		105,200		104,145		100,643		88,314		84,849

Consumer
Home equity
Lines of credit		24,007		24,360		24,668		22,491		22,677
Installment		11,871		11,478		11,076		10,598		10,486
Credit card		4,135		4,123		4,089		3,976		3,785
Other consumer
Education		8,415		8,807		9,246		9,582		9,154
Automobile		8,328		7,166		5,794		5,181		4,447
Other		4,525		4,523		4,486		4,403		4,490

Total consumer		61,281		60,457		59,359		56,231		55,039

Residential real estate
Residential mortgage		14,505		14,927		15,287		13,885		14,022
Residential construction		878		896		925		584		633

Total residential real estate		15,383		15,823		16,212		14,469		14,655

Total consumer lending		76,664		76,280		75,571		70,700		69,694

Total loans (b)	$	181,864	$	180,425	$	176,214	$	159,014	$	154,543


(a) Includes loans to customers in the real estate and construction industries.
(b) Includes purchased impaired loans:	$	7,749	$	8,083	$	8,421	$	6,667	$	6,927

Details of Loans Held for Sale (Unaudited)


	September 30		June 30		March 31		December 31		September 30
In millions	2012		2012		2012		2011		2011
Commercial mortgage	$	1,183	$	1,021	$	1,014	$	1,294	$	1,081
Residential mortgage		1,477		1,939		1,387		1,522		1,353
Other		77		373		55		120		57

Total	$	2,737	$	3,333	$	2,456	$	2,936	$	2,491

Net Unfunded Commitments (Unaudited)


	September 30		June 30		March 31		December 31		September 30
In millions	2012		2012		2012		2011		2011
Net unfunded commitments	$	118,285	$	113,636	$	112,454	$	103,271	$	103,236


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

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

Change in Allowance for Loan and Lease Losses


Three months ended - in millions	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011
Beginning balance	$	4,156		$	4,196		$	4,347		$	4,507		$	4,627
Charge-offs:
Commercial		(114	)		(123	)		(111	)		(143	)		(193	)
Commercial real estate		(83	)		(75	)		(84	)		(90	)		(92	)
Equipment lease financing		(2	)		(5	)		(5	)		(7	)		(3	)
Home equity (a)		(167	)		(121	)		(131	)		(109	)		(123	)
Residential real estate (a)		(25	)		(37	)		(30	)		(32	)		(20	)
Credit card (a)		(47	)		(55	)		(55	)		(50	)		(51	)
Other consumer (a)		(43	)		(46	)		(51	)		(51	)		(42	)

Total charge-offs (b)		(481	)		(462	)		(467	)		(482	)		(524	)
Recoveries:
Commercial		76			75			72			76			78
Commercial real estate		34			29			23			40			25
Equipment lease financing		7			6			9			13			13
Home equity		16			17			13			11			16
Residential real estate		(1	)		1			(1	)		1			8
Credit card		6			6			5			5			6
Other consumer		12			13			13			9			13

Total recoveries		150			147			134			155			159
Net (charge-offs) recoveries:
Commercial		(38	)		(48	)		(39	)		(67	)		(115	)
Commercial real estate		(49	)		(46	)		(61	)		(50	)		(67	)
Equipment lease financing		5			1			4			6			10
Home equity		(151	)		(104	)		(118	)		(98	)		(107	)
Residential real estate		(26	)		(36	)		(31	)		(31	)		(12	)
Credit card		(41	)		(49	)		(50	)		(45	)		(45	)
Other consumer		(31	)		(33	)		(38	)		(42	)		(29	)

Total net charge-offs		(331	)		(315	)		(333	)		(327	)		(365	)
Provision for credit losses		228			256			185			190			261
Other		1												(1	)
Net change in allowance for unfunded loan commitments and letters of credit		(15	)		19			(3	)		(23	)		(15	)

Ending balance	$	4,039		$	4,156		$	4,196		$	4,347		$	4,507


Supplemental Information
Net charge-offs to average loans (for the three months ended) (annualized)		.73	%		.71	%		.81	%		.83	%		.95	%
Allowance for loan and lease losses to total loans		2.22			2.30			2.38			2.73			2.92
Commercial lending net charge-offs	$	(82	)	$	(93	)	$	(96	)	$	(111	)	$	(172	)
Consumer lending net charge-offs		(249	)		(222	)		(237	)		(216	)		(193	)

Total net charge-offs	$	(331	)	$	(315	)	$	(333	)	$	(327	)	$	(365	)
Net charge-offs to average loans
Commercial lending		.31	%		.37	%		.42	%		.51	%		.83	%
Consumer lending		1.30			1.18			1.32			1.22			1.10

(a)

Pursuant to regulatory guidance, additional consumer charge-offs of $82.9 million have been taken as of September 30, 2012 related to changes in treatment of certain loans where borrowers have been discharged from personal liability under bankruptcy protection as TDRs and measurement of those loans at fair value of the collateral less costs to sell.

(b)

Pursuant to regulatory guidance, the Company will adopt a policy in the first quarter of 2013, subsequent to operationalizing related procedures, to charge-off a portion of certain second-lien consumer loans (residential mortgage and home equity lines of credit) where the first lien is delinquent. If this policy had been in effect as of September 30, 2012, there would have been approximately $81 million of additional cumulative charge-offs as of that date. The risk of loss associated with these loans has been considered in the determination of our Allowance for Loan and Lease Losses (ALLL) at September 30, 2012.

Change in Allowance for Unfunded Loan Commitments and Letters of Credit


Three months ended - in millions	September 30 2012		June 30 2012			March 31 2012		December 31 2011		September 30 2011
Beginning balance	$	224	$	243		$	240	$	217	$	202
Net change in allowance for unfunded loan commitments and letters of credit		15		(19	)		3		23		15

Ending balance	$	239	$	224		$	243	$	240	$	217


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

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

Total and Core Net Interest Income


	Three months ended										Nine months ended
In millions	September 30 2012		June 30 2012		March 31 2012		December 31 2011		September 30 2011		September 30 2012		September 30 2011
Core net interest income (a)	$	2,154	$	2,183	$	2,028	$	1,943	$	1,884	$	6,365	$	5,639
Purchase accounting accretion (a)		245		343		263		256		291		851		862

Total net interest income	$	2,399	$	2,526	$	2,291	$	2,199	$	2,175	$	7,216	$	6,501

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

Accretion - Purchased Impaired Loans


	Three months ended
In millions	September 30 2012 (a)			June 30 2012 (a)			September 30 2011 (b)
Impaired loans
Scheduled accretion	$	175		$	178		$	166
Reversal of contractual interest on impaired loans		(103	)		(111	)		(99	)

Scheduled accretion net of contractual interest		72			67			67
Excess cash recoveries		21			51			72

Total impaired loans	$	93		$	118		$	139

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

(b)	Represents National City acquisition.

Accretable Net Interest - Purchased Impaired Loans


In millions				In billions
July 1, 2012	$	2,403		January 1, 2012	$	2,109
				Addition due to RBC Bank (USA) acquisition on March 2, 2012		587
Accretion		(175	)	Accretion		(511	)
Excess cash recoveries		(21	)	Excess cash recoveries		(112	)
Net reclassifications to accretable from non-accretable and other activity		57		Net reclassifications to accretable from non-accretable and other activity		191

September 30, 2012 (a)	$	2,264		September 30, 2012	$	2,264

(a)	As of September 30, 2012, we estimate that the reversal of contractual interest on purchased impaired loans will total approximately $1.3 billion in future periods. This will offset the total net accretable interest in future interest income of $2.3 billion on purchased impaired loans.

Valuation of Purchased Impaired Loans


	September 30, 2012 (a)						June 30, 2012 (a)						December 31, 2011 (b)
Dollars in millions	Balance			Net Investment			Balance			Net Investment			Balance			Net Investment
Commercial and commercial real estate loans:
Unpaid principal balance	$	1,937					$	2,153					$	988
Purchased impaired mark		(535	)					(621	)					(136	)

Recorded investment		1,402						1,532						852
Allowance for loan losses		(229	)					(227	)					(229	)

Net investment		1,173			61	%		1,305			61	%		623			63	%

Consumer and residential mortgage loans:
Unpaid principal balance		6,976						7,330						6,533
Purchased impaired mark		(629	)					(779	)					(718	)

Recorded investment		6,347						6,551						5,815
Allowance for loan losses		(839	)					(808	)					(769	)

Net investment		5,508			79	%		5,743			78	%		5,046			77	%

Total purchased impaired loans:
Unpaid principal balance		8,913						9,483						7,521
Purchased impaired mark		(1,164	)					(1,400	)					(854	)

Recorded investment		7,749						8,083						6,667
Allowance for loan losses		(1,068	)					(1,035	)					(998	)

Net investment	$	6,681			75	%	$	7,048			74	%	$	5,669			75	%

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

(b)	Represents National City acquisition.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


In millions	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011
Nonperforming loans, including TDRs (a)
Commercial lending
Commercial
Retail/wholesale trade	$	88		$	110		$	108		$	109		$	117
Manufacturing		104			141			107			117			149
Service providers		144			145			149			147			198
Real estate related (b)		236			214			232			252			256
Financial services		13			15			20			36			31
Health care		26			22			23			29			39
Other industries		138			144			200			209			204

Total commercial		749			791			839			899			994

Commercial real estate
Real estate projects		802			924			977			1,051			1,115
Commercial mortgage		198			218			274			294			310

Total commercial real estate		1,000			1,142			1,251			1,345			1,425

Equipment lease financing		15			19			21			22			30

Total commercial lending		1,764			1,952			2,111			2,266			2,449

Consumer lending (c)
Home equity (d)		818			722			685			529			484
Residential real estate
Residential mortgage (e)		766			707			684			685			676
Residential construction		24			32			44			41			46
Credit card (f)		5			6			12			8			7
Other consumer		37			39			45			31			30

Total consumer lending (g)		1,650			1,506			1,470			1,294			1,243

Total nonperforming loans (h)		3,414			3,458			3,581			3,560			3,692

OREO and foreclosed assets
Other real estate owned (OREO) (i)		578			670			749			561			553
Foreclosed and other assets		29			48			31			35			53

Total OREO and foreclosed assets		607			718			780			596			606

Total nonperforming assets	$	4,021		$	4,176		$	4,361		$	4,156		$	4,298

Nonperforming loans to total loans		1.88	%		1.92	%		2.03	%		2.24	%		2.39	%
Nonperforming assets to total loans, OREO and foreclosed assets		2.20			2.31			2.46			2.60			2.77
Nonperforming assets to total assets		1.34			1.39			1.47			1.53			1.59
Allowance for loan and lease losses to nonperforming loans (h) (j)		118			120			117			122			122

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

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

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

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

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

(f)

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

(g)

Pursuant to regulatory guidance, in the third quarter of 2012, nonperforming consumer loans, primarily home equity and residential mortgage, increased $112 million for additional TDRs, net of charge-offs, resulting from bankruptcy where a concession has been granted to a borrower based upon discharge from personal liability. 90% of these loans are current on their payments. 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 $82.9 million.

(h)	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.

(i)

OREO excludes $363 million, $262 million, $252 million, $280 million, and $256 million at September 30, 2012, June 30, 2012, March 31, 2011, December 31, 2011 and September 30, 2011, respectively, related to residential real estate that was acquired by us upon foreclosure of serviced loans because they are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Details of Nonperforming Assets and Troubled Debt Restructurings (Unaudited)

Change in Nonperforming Assets


	July 1, 2012 -			April 1, 2012 -			January 1, 2012 -			October 1, 2011 -			July 1, 2011 -
In millions	September 30, 2012			June 30, 2012			March 31, 2012			December 31, 2011			September 30, 2011
Beginning balance	$	4,176		$	4,361		$	4,156		$	4,298		$	4,481
New nonperforming assets		861			797			1,186			854			925
Charge-offs and valuation adjustments		(392	)		(293	)		(236	)		(221	)		(286	)
Principal activity, including paydowns and payoffs		(438	)		(428	)		(414	)		(506	)		(471	)
Asset sales and transfers to loans held for sale		(162	)		(168	)		(146	)		(152	)		(155	)
Returned to performing status		(24	)		(93	)		(185	)		(117	)		(196	)

Ending balance	$	4,021		$	4,176		$	4,361		$	4,156		$	4,298

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


In millions
Ranking	Outstandings		Industry
1	$	38	Real Estate, Rental and Leasing
2		38	Real Estate, Rental and Leasing
3		35	Real Estate, Rental and Leasing
4		19	Construction
5		18	Real Estate, Rental and Leasing
6		17	Real Estate, Rental and Leasing
7		16	Real Estate, Rental and Leasing
8		16	Construction
9		16	Real Estate, Rental and Leasing
10		14	Utilities

Total	$	227

As a percent of total nonperforming assets 6%

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

Summary of Troubled Debt Restructurings


	September 30		June 30		March 31		December 31		September 30
In millions	2012		2012		2012		2011		2011
Total commercial lending	$	556	$	483	$	412	$	405	$	396
Total consumer lending (a)		2,019		1,836		1,821		1,798		1,751

Total TDRs	$	2,575	$	2,319	$	2,233	$	2,203	$	2,147

Nonperforming	$	1,383	$	1,189	$	1,095	$	1,141	$	1,062
Accruing (b)		950		878		865		771		780
Credit card (c)		242		252		273		291		305

Total TDRs	$	2,575	$	2,319	$	2,233	$	2,203	$	2,147

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, additional troubled debt restructurings of $154.8 million, net of charge-offs, resulting from bankruptcy where a concession has been granted to a borrower based upon discharge from personal liability were added to the consumer lending population in the third quarter of 2012. 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 $82.9 million.

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

(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 12

Accruing Loans Past Due (Unaudited)

Accruing Loans Past Due 30 to 59 Days (a)


	Amount										Percent of Total Outstandings
	Sept. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30
Dollars in millions	2012		2012		2012		2011		2011		2012			2012			2012			2011			2011
Commercial	$	141	$	130	$	195	$	122	$	163		.18	%		.16	%		.26	%		.19	%		.26	%
Commercial real estate		91		123		144		96		84		.49			.67			.78			.59			.51
Equipment lease financing		8		5		25		22		9		.12			.07			.38			.34			.15
Home equity (b)		130		124		127		173		177		.36			.35			.36			.52			.53
Residential real estate
Non government insured (c)		147		148		198		180		198		.96			.94			1.22			1.24			1.35
Government insured		127		123		122		122		121		.80			.78			.75			.84			.83
Credit card		31		33		34		38		39		.75			.80			.83			.96			1.03
Other consumer
Non government insured		54		43		50		58		55		.25			.21			.26			.30			.30
Government insured		154		164		171		207		161		.72			.80			.88			1.08			.89

Total	$	883	$	893	$	1,066	$	1,018	$	1,007		.49			.49			.60			.64			.65


Accruing Loans Past Due 60 to 89 Days (a)

	Amount										Percent of Total Outstandings
	Sept. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30
Dollars in millions	2012		2012		2012		2011		2011		2012			2012			2012			2011			2011
Commercial	$	92	$	65	$	53	$	47	$	54		.12	%		.08	%		.07	%		.07	%		.09	%
Commercial real estate		66		105		44		35		25		.35			.57			.24			.22			.15
Equipment lease financing		5		2		2		5		4		.07			.03			.03			.08			.06
Home equity (b)		69		68		79		114		101		.19			.19			.22			.34			.30
Residential real estate
Non government insured (c)		52		52		56		72		81		.34			.33			.35			.50			.55
Government insured		94		91		100		104		110		.59			.58			.62			.72			.75
Credit card		20		22		24		25		26		.48			.53			.59			.63			.69
Other consumer
Non government insured		23		16		20		21		22		.11			.08			.10			.11			.12
Government insured		121		113		98		124		121		.57			.55			.50			.65			.67

Total	$	542	$	534	$	476	$	547	$	544		.30			.30			.27			.34			.35


Accruing Loans Past Due 90 Days or More (a)

	Amount										Percent of Total Outstandings
	Sept. 30		Jun. 30		Mar. 31		Dec. 31		Sept. 30		Sept. 30			Jun. 30			Mar. 31			Dec. 31			Sept. 30
Dollars in millions	2012		2012		2012		2011		2011		2012			2012			2012			2011			2011
Commercial	$	41	$	34	$	28	$	49	$	34		.05	%		.04	%		.04	%		.07	%		.05	%
Commercial real estate		36		16		5		6		13		.19			.09			.03			.04			.08
Equipment lease financing		1		1		5				2		.01			.01			.08						.03
Home equity (b)(d)								221		206											.67			.62
Residential real estate
Non government insured (c)		97		104		116		152		137		.63			.66			.72			1.05			.93
Government insured		1,896		1,925		2,012		2,129		1,998		11.98			12.17			12.41			14.71			13.63
Credit card		32		38		47		48		45		.77			.92			1.15			1.21			1.19
Other consumer
Non government insured		18		17		21		23		23		.08			.08			.11			.12			.13
Government insured		335		348		351		345		310		1.58			1.70			1.80			1.80			1.71

Total	$	2,456	$	2,483	$	2,585	$	2,973	$	2,768		1.35			1.38			1.47			1.87			1.79

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

(b)	The Home equity amounts as of March 31, 2012 were reduced by $47 million and $24 million for the Accruing Loans Past Due 30 to 59 Days and 60 to 89 Days respectively, to correct for immaterial amounts. Prior periods have not been adjusted.

(c)	The Residential real estate amounts as of March 31, 2012 were reduced by $24 million, $17 million and $24 million for the Accruing Loans Past Due 30 to 59 Days, 60 to 89 Days and 90 Days or More respectively, to correct for immaterial amounts. Prior periods have not been adjusted.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Business Segment Descriptions (Unaudited)

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

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

Asset Management Group includes personal wealth management for high net worth and ultra high net worth clients and institutional asset management. Wealth management products and services include financial and retirement planning, customized investment management, private banking, tailored credit solutions and trust management and administration for individuals and their families. Institutional asset management provides investment management, custody, and retirement administration services. The 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 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 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. At September 30, 2012, our economic interest in BlackRock was 22%.

Period End Employees


	September 30		June 30		March 31		December 31		September 30
	2012		2012		2012		2011		2011
Full-time employees
Retail Banking		23,403		23,388		23,583		21,056		21,058
Other full-time employees (a)		27,512		27,060		26,863		24,884		24,618

Total full-time employees		50,915		50,448		50,446		45,940		45,676

Part-time employees
Retail Banking		4,740		4,970		5,265		5,083		5,103
Other part-time employees (a)		879		1,215		894		868		913

Total part-time employees		5,619		6,185		6,159		5,951		6,016

Total (b)		56,534		56,633		56,605		51,891		51,692

(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.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

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


	Three months ended												Nine months ended
In millions	September 30 2012		June 30 2012			March 31 2012		December 31 2011			September 30 2011		September 30 2012			September 30 2011
Income (Loss)
Retail Banking (c)	$	192	$	136		$	147	$	62		$	121	$	475		$	309
Corporate & Institutional Banking		607		577			495		597			437		1,679			1,343
Asset Management Group		37		38			36		25			40		111			143
Residential Mortgage Banking (d)		36		(213	)		61		(61	)		23		(116	)		150
Non-Strategic Assets Portfolio		40		67			71		(2	)		93		178			202
Other, including BlackRock (b) (e) (f)		13		(59	)		1		(128	)		120		(45	)		431

Net income (g)	$	925	$	546		$	811	$	493		$	834	$	2,282		$	2,578

Revenue
Retail Banking (c)	$	1,664	$	1,551		$	1,436	$	1,383		$	1,423	$	4,651		$	4,196
Corporate & Institutional Banking		1,416		1,439			1,266		1,306			1,149		4,121			3,469
Asset Management Group		243		240			243		234			228		726			695
Residential Mortgage Banking (d)		284		(109	)		293		220			254		468			732
Non-Strategic Assets Portfolio		204		223			198		207			238		625			753
Other, including BlackRock (b) (e)		277		279			296		199			252		852			932

Total revenue	$	4,088	$	3,623		$	3,732	$	3,549		$	3,544	$	11,443		$	10,777

(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 third quarter 2012 Form 10-Q will include additional information regarding BlackRock.

(c)	Includes gain on the sale of a portion of Visa Class B common shares. For more information, refer to Selected Consolidated Income Statement Information on page 6.

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

(e)

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

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Retail Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
INCOME STATEMENT
Net interest income	$	1,076		$	1,114		$	1,045		$	972		$	956		$	3,235		$	2,834
Noninterest income
Service charges on deposits		146			137			121			135			133			404			375
Brokerage		47			49			45			48			48			141			153
Consumer services		214			213			191			195			251			618			732
Other		181			38			34			33			35			253			102

Total noninterest income		588			437			391			411			467			1,416			1,362

Total revenue		1,664			1,551			1,436			1,383			1,423			4,651			4,196
Provision for credit losses		220			165			135			229			206			520			662
Noninterest expense		1,140			1,171			1,069			1,056			1,026			3,380			3,047

Pretax earnings		304			215			232			98			191			751			487
Income taxes		112			79			85			36			70			276			178

Earnings	$	192		$	136		$	147		$	62		$	121		$	475		$	309

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	28,881		$	28,761		$	26,759		$	25,890		$	25,848		$	28,136		$	25,999
Indirect auto		5,654			5,042			4,439			3,878			3,312			5,047			2,830
Indirect other		1,133			1,211			1,292			1,368			1,445			1,212			1,533
Education		8,611			9,100			9,440			9,302			9,124			9,049			9,036
Credit cards		4,108			4,075			3,928			3,805			3,733			4,037			3,715
Other		2,068			2,004			1,888			1,824			1,765			1,987			1,725

Total consumer		50,455			50,193			47,746			46,067			45,227			49,468			44,838
Commercial and commercial real estate		11,360			11,445			10,682			10,369			10,482			11,176			10,634
Floor plan		1,769			1,803			1,663			1,452			1,304			1,745			1,449
Residential mortgage		918			972			1,031			1,092			1,150			974			1,210

Total loans		64,502			64,413			61,122			58,980			58,163			63,363			58,131
Goodwill and other intangible assets		6,199			6,228			5,888			5,735			5,748			6,105			5,756
Other assets		2,589			2,452			2,699			2,455			2,247			2,580			2,306

Total assets	$	73,290		$	73,093		$	69,709		$	67,170		$	66,158		$	72,048		$	66,193

Deposits
Noninterest-bearing demand	$	20,660		$	20,381		$	18,764		$	18,105		$	18,081		$	19,938		$	18,209
Interest-bearing demand		28,506			28,265			25,707			23,583			22,381			27,496			21,729
Money market		47,557			47,271			43,601			41,638			41,191			46,148			40,788

Total transaction deposits		96,723			95,917			88,072			83,326			81,653			93,582			80,726
Savings		9,954			9,900			9,077			8,450			8,218			9,645			7,979
Certificates of deposit		24,746			26,468			28,150			29,998			32,664			26,448			34,020

Total deposits		131,423			132,285			125,299			121,774			122,535			129,675			122,725
Other liabilities		255			190			629			758			786			358			898
Capital		9,034			8,455			8,328			8,152			8,223			8,607			8,173

Total liabilities and equity	$	140,712		$	140,930		$	134,256		$	130,684		$	131,544		$	138,640		$	131,796

PERFORMANCE RATIOS
Return on average capital		8	%		6	%		7	%		3	%		6	%		7	%		5	%
Return on average assets		1.04			.75			.85			.37			.73			.88			.62
Noninterest income to total revenue		35			28			27			30			33			30			32
Efficiency		69			75			74			76			72			73			73

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Retail Banking (Unaudited) (Continued)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
OTHER INFORMATION (a)								.
Credit-related statistics:
Commercial nonperforming assets	$	266		$	275		$	315		$	336		$	330
Consumer nonperforming assets		799			685			650			513			454

Total nonperforming assets	$	1,065		$	960		$	965		$	849		$	784

Purchased impaired loans (b)	$	852		$	886		$	903		$	757		$	786

Commercial lending net charge-offs	$	19		$	38		$	28		$	48		$	39		$	85		$	171
Credit card lending net charge-offs		40			49			50			44			45			139			167
Consumer lending (excluding credit card) net charge-offs		160			100			113			103			98			373			324

Total net charge-offs	$	219		$	187		$	191		$	195		$	182		$	597		$	662

Commercial lending annualized net charge-off ratio		.58	%		1.15	%		.91	%		1.61	%		1.31	%		.88	%		1.89	%
Credit card lending annualized net charge-off ratio		3.87	%		4.84	%		5.12	%		4.59	%		4.78	%		4.60	%		6.01	%
Consumer lending (excluding credit card) annualized net charge-off ratio		1.35	%		.85	%		1.01	%		.94	%		.91	%		1.07	%		1.02	%

Total annualized net charge-off ratio		1.35	%		1.17	%		1.26	%		1.31	%		1.24	%		1.26	%		1.52	%

Home equity portfolio credit statistics: (c)
% of first lien positions at origination		41	%		39	%		37	%		39	%		38	%
Weighted-average loan-to-value ratios (LTVs) (d)		80	%		78	%		81	%		72	%		72	%
Weighted-average updated FICO scores (e)		742			742			739			743			743
Annualized net charge-off ratio		1.58	%		.92	%		1.11	%		1.01	%		1.02	%		1.21	%		1.11	%
Loans 30 - 59 days past due		.51	%		.54	%		.56	%		.58	%		.58	%
Loans 60 - 89 days past due		.33	%		.33	%		.35	%		.38	%		.32	%
Loans 90 days past due (f)		1.24	%		1.24	%		1.24	%		1.22	%		1.12	%

Other statistics:
ATMs		7,261			7,206			7,220			6,806			6,754
Branches (g)		2,887			2,888			2,900			2,511			2,469

Customer-related statistics: (in thousands)
Retail Banking checking relationships		6,451			6,349			6,278			5,761			5,722
Retail online banking active customers		4,117			3,953			3,823			3,519			3,479
Retail online bill payment active customers		1,219			1,189			1,161			1,105			1,079

Brokerage statistics:
Financial consultants (h)		655			684			693			686			703
Full service brokerage offices		42			40			38			38			37
Brokerage account assets (billions)	$	38		$	36		$	37		$	34		$	33

(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 nine months ended, respectively.

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

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

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

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

(f)	Includes non-accrual loans.

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

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 17

Corporate & Institutional Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
INCOME STATEMENT
Net interest income	$	1,019		$	1,085		$	938		$	943		$	898		$	3,042		$	2,595
Noninterest income
Corporate service fees		258			248			200			226			150			706			526
Other		139			106			128			137			101			373			348

Noninterest income		397			354			328			363			251			1,079			874

Total revenue		1,416			1,439			1,266			1,306			1,149			4,121			3,469
Provision for credit losses (benefit)		(61	)		33			19			(136	)		11			(9	)		12
Noninterest expense		520			496			463			495			448			1,479			1,337

Pretax earnings		957			910			784			947			690			2,651			2,120
Income taxes		350			333			289			350			253			972			777

Earnings	$	607		$	577		$	495		$	597		$	437		$	1,679		$	1,343

AVERAGE BALANCE SHEET
Loans
Commercial	$	50,636		$	49,087		$	42,919		$	38,709		$	36,353		$	47,560		$	34,771
Commercial real estate		16,226			15,928			14,388			13,903			13,670			15,516			13,949
Commercial - real estate related		6,008			5,545			4,971			4,463			3,741			5,510			3,553
Asset-based lending		10,406			9,755			9,266			8,893			8,472			9,811			7,928
Equipment lease financing		6,095			5,911			5,706			5,529			5,457			5,904			5,499

Total loans		89,371			86,226			77,250			71,497			67,693			84,301			65,700
Goodwill and other intangible assets		3,707			3,749			3,442			3,291			3,391			3,633			3,444
Loans held for sale		1,263			1,190			1,244			1,271			1,186			1,233			1,251
Other assets		12,582			11,670			10,960			10,111			9,629			11,740			8,920

Total assets	$	106,923		$	102,835		$	92,896		$	86,170		$	81,899		$	100,907		$	79,315

Deposits
Noninterest-bearing demand	$	37,685		$	37,813		$	37,225		$	35,770		$	32,631		$	37,575		$	30,010
Money market		16,237			15,734			13,872			13,385			13,522			15,284			12,770
Other		6,277			5,933			5,372			5,617			5,781			5,862			5,662

Total deposits		60,199			59,480			56,469			54,772			51,934			58,721			48,442
Other liabilities		19,201			17,551			15,987			14,095			14,094			17,586			13,064
Capital		9,937			8,815			8,537			8,256			7,992			9,100			7,927

Total liabilities and equity	$	89,337		$	85,846		$	80,993		$	77,123		$	74,020		$	85,407		$	69,433

PERFORMANCE RATIOS
Return on average capital		24	%		26	%		23	%		29	%		22	%		25	%		23	%
Return on average assets		2.26			2.26			2.14			2.75			2.12			2.22			2.26
Noninterest income to total revenue		28			25			26			28			22			26			25
Efficiency		37			34			37			38			39			36			39

COMMERCIAL MORTGAGE SERVICING PORTFOLIO (in billions)
Beginning of period	$	264		$	268		$	267		$	267		$	268		$	267		$	266
Acquisitions/additions		12			7			10			12			8			29			31
Repayments/transfers		(11	)		(11	)		(9	)		(12	)		(9	)		(31	)		(30	)

End of period	$	265		$	264		$	268		$	267		$	267		$	265		$	267

OTHER INFORMATION
Consolidated revenue from: (b)
Treasury Management (c)	$	346		$	354		$	343		$	323		$	319		$	1,043		$	943
Capital Markets (d)	$	175		$	151		$	156		$	160		$	158		$	482		$	462
Commercial mortgage loans held for sale (e)	$	13		$	34		$	13		$	38		$	23		$	60		$	75
Commercial mortgage loan servicing income, net of amortization (f)		55			53			30			55			38			138			125
Commercial mortgage servicing rights (impairment)/recovery, net of hedge		16			(6	)		5			—			(82	)		15			(157	)

Total commercial mortgage banking activities	$	84		$	81		$	48		$	93		$	(21	)	$	213		$	43
Total loans (g)	$	90,099		$	88,810		$	84,329		$	73,417		$	70,307
Net carrying amount of commercial mortgage servicing rights (g)	$	402		$	398		$	428		$	468		$	482
Credit-related statistics:

Nonperforming assets (g)	$	1,500		$	1,686		$	1,776		$	1,889		$	2,033
Purchased impaired loans (g) (h)	$	990		$	1,088		$	1,177		$	404		$	472
Net charge-offs	$	35		$	30		$	43		$	43		$	94		$	108		$	332

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

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

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

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

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

(f)

Includes net interest income and noninterest income from loan servicing and ancillary services, net of commercial mortgage servicing rights amortization 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 hedge is shown separately.

(g)	Presented as of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 18

Asset Management Group (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
INCOME STATEMENT
Net interest income	$	73		$	75		$	75		$	73		$	69		$	223		$	207
Noninterest income		170			165			168			161			159			503			488

Total revenue		243			240			243			234			228			726			695
Provision for credit losses (benefit)		4			(1	)		10			10			(10	)		13			(34	)
Noninterest expense		180			181			176			184			175			537			503

Pretax earnings		59			60			57			40			63			176			226
Income taxes		22			22			21			15			23			65			83

Earnings	$	37		$	38		$	36		$	25		$	40		$	111		$	143

AVERAGE BALANCE SHEET
Loans
Consumer	$	4,486		$	4,321		$	4,183		$	4,173		$	4,134		$	4,330		$	4,086
Commercial and commercial real estate		1,060			1,098			1,126			1,193			1,223			1,095			1,337
Residential mortgage		687			692			692			696			705			691			710

Total loans		6,233			6,111			6,001			6,062			6,062			6,116			6,133
Goodwill and other intangible assets		324			333			345			349			356			334			365
Other assets		214			215			220			233			246			216			246

Total assets	$	6,771		$	6,659		$	6,566		$	6,644		$	6,664		$	6,666		$	6,744

Deposits
Noninterest-bearing demand	$	1,336		$	1,362		$	1,575		$	1,305		$	1,307		$	1,424		$	1,177
Interest-bearing demand		2,662			2,674			2,637			2,529			2,315			2,658			2,305
Money market		3,466			3,535			3,651			3,625			3,591			3,550			3,577

Total transaction deposits		7,464			7,571			7,863			7,459			7,213			7,632			7,059
CDs/IRAs/savings deposits		465			490			549			587			620			501			646

Total deposits		7,929			8,061			8,412			8,046			7,833			8,133			7,705
Other liabilities		68			68			71			78			76			69			73
Capital		464			463			347			355			345			425			347

Total liabilities and equity	$	8,461		$	8,592		$	8,830		$	8,479		$	8,254		$	8,627		$	8,125

PERFORMANCE RATIOS
Return on average capital		32	%		33	%		42	%		28	%		46	%		35	%		55	%
Return on average assets		2.17			2.30			2.21			1.49			2.38			2.22			2.83
Noninterest income to total revenue		70			69			69			69			70			69			70
Efficiency		74			75			72			79			77			74			72

OTHER INFORMATION
Total nonperforming assets (b)	$	61		$	67		$	73		$	60		$	69
Purchased impaired loans (b) (c)	$	118		$	122		$	126		$	127		$	134
Total net charge-offs (recoveries)	$	(1	)	$	3		$	2		$	6		$	5		$	4		$	(6	)

ASSETS UNDER ADMINISTRATION (in billions) (b) (d)
Personal	$	106		$	102		$	104		$	100		$	95
Institutional		116			112			115			110			107

Total	$	222		$	214		$	219		$	210		$	202

Asset Type
Equity	$	120		$	116		$	119		$	111		$	104
Fixed income		68			66			66			66			66
Liquidity/Other		34			32			34			33			32

Total	$	222		$	214		$	219		$	210		$	202

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

Total	$	112		$	109		$	112		$	107		$	103

Asset Type
Equity	$	57		$	56		$	58		$	53		$	49
Fixed income		39			38			38			38			38
Liquidity/Other		16			15			16			16			16

Total	$	112		$	109		$	112		$	107		$	103

Nondiscretionary assets under administration
Personal	$	33		$	31		$	31		$	31		$	30
Institutional		77			74			76			72			69

Total	$	110		$	105		$	107		$	103		$	99

Asset Type
Equity	$	63		$	60		$	61		$	58		$	55
Fixed income		29			28			28			28			28
Liquidity/Other		18			17			18			17			16

Total	$	110		$	105		$	107		$	103		$	99

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

(b)	As of period end.

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

(d)	Excludes brokerage account assets.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 19

Residential Mortgage Banking (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions, except as noted	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
INCOME STATEMENT
Net interest income	$	52		$	53		$	51		$	52		$	46		$	156		$	149
Noninterest income
Loan servicing revenue
Servicing fees		49			52			56			53			60			157			173
Net MSR hedging gains		7			39			71			35			69			117			185
Loan sales revenue
Provision for residential mortgage repurchase obligations		(37	)		(438	)		(32	)		(36	)		(31	)		(507	)		(66	)
Loan sales revenue		216			177			141			110			103			534			274
Other		(3	)		8			6			6			7			11			17

Total noninterest income		232			(162	)		242			168			208			312			583

Total revenue		284			(109	)		293			220			254			468			732
Provision for credit losses (benefit)		2			(2	)		(7	)		(10	)		15			(7	)		15
Noninterest expense		226			230			203			317			203			659			480

Pretax earnings (loss)		56			(337	)		97			(87	)		36			(184	)		237
Income taxes (benefit)		20			(124	)		36			(26	)		13			(68	)		87

Earnings (loss)	$	36		$	(213	)	$	61		$	(61	)	$	23		$	(116	)	$	150

AVERAGE BALANCE SHEET
Portfolio loans	$	2,648		$	2,751		$	2,922		$	2,868		$	2,777		$	2,773		$	2,738
Loans held for sale		1,694			1,830			1,675			1,409			1,301			1,733			1,520
Mortgage servicing rights (MSR)		599			665			645			701			851			636			974
Other assets		6,560			6,255			6,747			6,786			5,948			6,521			5,871

Total assets	$	11,501		$	11,501		$	11,989		$	11,764		$	10,877		$	11,663		$	11,103

Deposits	$	3,492		$	1,783		$	1,662		$	1,756		$	1,785		$	2,317		$	1,648
Borrowings and other liabilities		4,198			4,067			4,353			4,324			3,788			4,206			3,726
Capital		1,488			1,157			832			832			694			1,160			697

Total liabilities and equity	$	9,178		$	7,007		$	6,847		$	6,912		$	6,267		$	7,683		$	6,071

PERFORMANCE RATIOS
Return on average capital		10	%		(74	)%		29	%		(29	)%		13	%		(13	)%		29	%
Return on average assets		1.25			(7.45	)		2.05			(2.06	)		.84			(1.33	)		1.81
Noninterest income to total revenue		82			149			83			76			82			67			80
Efficiency		80			(211	)		69			144			80			141			66

RESIDENTIAL MORTGAGE SERVICING PORTFOLIO - THIRD-PARTY (in billions)
Beginning of period	$	116		$	121		$	118		$	121		$	125		$	118		$	125
Acquisitions		8						7			1						15			5
Additions		4			2			4			3			2			10			9
Repayments/transfers		(9	)		(7	)		(8	)		(7	)		(6	)		(24	)		(18	)

End of period	$	119		$	116		$	121		$	118		$	121		$	119		$	121

RESIDENTIAL MORTGAGE REPURCHASE RESERVE
Beginning of period	$	462		$	101		$	83		$	85		$	95		$	83		$	144
Provision		37			438			32			36			31			507			66
RBC Bank (USA) acquisition								26									26
Losses - loan repurchases and settlements		(78	)		(77	)		(40	)		(38	)		(41	)		(195	)		(125	)

End of period	$	421		$	462		$	101		$	83		$	85		$	421		$	85

Servicing portfolio - third-party statistics: (b)
Fixed rate		91	%		91	%		91	%		90	%		90	%
Adjustable rate/balloon		9	%		9	%		9	%		10	%		10	%
Weighted-average interest rate		5.06	%		5.21	%		5.26	%		5.38	%		5.44	%
MSR capitalized value (in billions)	$	.6		$	.6		$	.7		$	.7		$	.7
MSR capitalization value (in basis points)		50			50			60			54			56
Weighted-average servicing fee (in basis points)		29			29			29			29			29

OTHER INFORMATION
Loan origination volume (in billions)	$	3.8		$	3.6		$	3.4		$	3.0		$	2.6		$	10.8		$	8.4
Percentage of originations represented by:
Agency and government programs		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Refinance volume		74	%		72	%		82	%		79	%		69	%		76	%		75	%
Total nonperforming assets (b)	$	82		$	78		$	80		$	76		$	77
Purchased impaired loans (b) (c)	$	69		$	84		$	100		$	112		$	132

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

(b)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 20

Non-Strategic Assets Portfolio (Unaudited) (a)


	Three months ended															Nine months ended
Dollars in millions	September 30 2012			June 30 2012			March 31 2012			December 31 2011			September 30 2011			September 30 2012			September 30 2011
INCOME STATEMENT
Net interest income	$	195		$	221		$	217		$	192		$	228		$	633		$	721
Noninterest income		9			2			(19	)		15			10			(8	)		32

Total revenue		204			223			198			207			238			625			753
Provision for credit losses		61			50			18			88			45			129			278
Noninterest expense		79			67			68			119			47			214			156

Pretax earnings		64			106			112			—			146			282			319
Income taxes		24			39			41			2			53			104			117

Earnings (loss)	$	40		$	67		$	71		$	(2	)	$	93		$	178		$	202

AVERAGE BALANCE SHEET
Commercial Lending:
Commercial/Commercial real estate	$	846		$	1,008		$	1,004		$	1,030		$	1,143		$	952		$	1,360
Lease financing		678			675			670			703			691			674			715

Total commercial lending		1,524			1,683			1,674			1,733			1,834			1,626			2,075

Consumer Lending:
Home equity		4,498			4,668			4,849			5,006			5,167			4,671			5,341
Residential real estate		6,328			6,534			6,046			5,937			6,116			6,303			6,237

Total consumer lending		10,826			11,202			10,895			10,943			11,283			10,974			11,578

Total portfolio loans		12,350			12,885			12,569			12,676			13,117			12,600			13,653
Other assets (b)		(333	)		(195	)		(445	)		(368	)		(402	)		(324	)		(261	)

Total assets	$	12,017		$	12,690		$	12,124		$	12,308		$	12,715		$	12,276		$	13,392

Deposits and other liabilities	$	189		$	180		$	177		$	85		$	76		$	182		$	119
Capital		1,278			1,311			1,176			1,213			1,273			1,255			1,355

Total liabilities and equity	$	1,467		$	1,491		$	1,353		$	1,298		$	1,349		$	1,437		$	1,474

PERFORMANCE RATIOS
Return on average capital		12	%		21	%		24	%		(1	)%		29	%		19	%		20	%
Return on average assets		1.32			2.12			2.36			(.06	)		2.90			1.94			2.02

OTHER INFORMATION
Nonperforming assets (c)	$	1,056		$	1,120		$	1,192		$	1,024		$	1,064
Purchased impaired loans (c) (d)	$	5,702		$	5,889		$	6,097		$	5,251		$	5,390
Net charge-offs	$	65		$	83		$	91		$	77		$	74		$	239		$	293
Annualized net charge-off ratio		2.09	%		2.59	%		2.91	%		2.41	%		2.24	%		2.53	%		2.87	%

LOANS (c)
Commercial Lending:
Commercial/Commercial real estate	$	795		$	945		$	1,104		$	976		$	1,077
Lease financing		680			677			671			670			701

Total commercial lending		1,475			1,622			1,775			1,646			1,778

Consumer Lending:
Home equity		4,408			4,575			4,751			4,930			5,066
Residential real estate		6,272			6,475			6,693			5,840			6,065

Total consumer lending		10,680			11,050			11,444			10,770			11,131

Total loans	$	12,155		$	12,672		$	13,219		$	12,416		$	12,909

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

(b)	Other assets were negative in each 2012 quarter and each 2011 quarter due to the allowance for loan and lease losses.

(c)	As of period end.

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


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 21

Glossary Of Terms

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

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

Annualized - Adjusted to reflect a full year of activity.

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

Basis point - One hundredth of a percentage point.

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

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

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

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

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

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

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

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

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

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

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


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

Efficiency - Noninterest expense divided by total revenue.

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

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

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

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

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

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

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

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

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

Loss given default (LGD) - An estimate of recovery based on collateral type, collateral value, loan exposure, or the guarantor(s) quality and guaranty type (full or partial). Each loan has its own LGD. The LGD risk rating measures the percentage of exposure of a specific credit obligation that we expect to lose if default occurs. LGD is net of recovery, through either liquidation of collateral or deficiency judgments rendered from foreclosure or bankruptcy proceedings.

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

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

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

Nonperforming assets - Nonperforming assets include nonperforming loans, TDRs, and OREO and foreclosed assets, but exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under fair value option and purchased impaired loans. We do not accrue interest income on assets classified as nonperforming.

Nonperforming loans - Loans for which we do not accrue interest income. Nonperforming loans include loans to commercial, commercial real estate, equipment lease financing, home equity, residential real estate, credit card and other consumer customers as well as TDRs which have not returned to performing status. Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. Nonperforming loans exclude purchased impaired loans as we are currently accreting interest income over the expected life of the loans.

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


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

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

Other real estate owned (OREO) and foreclosed assets - Assets taken in settlement of troubled loans primarily through 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 - The initial investment of a purchased impaired loan plus interest accretion and less any cash payments and writedowns to date. The recorded investment excludes any valuation allowance which is included in our allowance for loan and lease losses.

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

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

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

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


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

Return on average common shareholders’ equity - Annualized net income 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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