PNC FINANCIAL SERVICES GROUP, INC. - FORM 8-K - EX-99.2

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8-K - FORM 8-K - PNC FINANCIAL SERVICES GROUP, INC.	d793262d8k.htm
EX-99.1 - EX-99.1 - PNC FINANCIAL SERVICES GROUP, INC.	d793262dex991.htm

The PNC Financial Services Group, Inc.

Third Quarter 2014

Earnings Conference Call

October 15, 2014

Exhibit 99.2

Cautionary Statement Regarding Forward-Looking

Information and Adjusted Information

Our earnings conference call presentation includes “snapshot” information about PNC used by way of illustration. It is not intended as a full business

or financial review and should be viewed in the context of all of the information made available by PNC in its SEC filings. The presentation also

contains forward-looking statements regarding our outlook for earnings, revenues, expenses, capital and liquidity levels and ratios, asset levels, asset

quality, financial position, and other matters regarding or affecting PNC and its future business and operations. Forward-looking statements are

necessarily subject to numerous assumptions, risks and uncertainties, which change over time. The forward-looking statements in this presentation

are qualified by the factors affecting forward-looking statements identified in the more detailed Cautionary Statement included in the Appendix, which

is included in the version of the presentation materials posted on our corporate website at www.pnc.com/investorevents, and in our SEC filings. We

provide greater detail regarding these as well as other factors in our 2013 Form 10-K and our 2014 Form 10-Qs, including in the Risk Factors and Risk

Management sections and in the Legal Proceedings and Commitments and Guarantees Notes of the Notes To Consolidated Financial Statements in

those reports, and in our subsequent SEC filings. Our forward-looking statements may also be subject to other risks and uncertainties, including those

we may discuss in this presentation or in our SEC filings, accessible on the SEC’s website at www.sec.gov and on PNC’s corporate website at

www.pnc.com/secfilings. We have included web addresses in this presentation as inactive textual references only. Information on those websites is

not part of this presentation. Future events or circumstances may change our outlook and may also affect the nature of the assumptions, risks and

uncertainties to which our forward-looking statements are subject. Forward-looking statements in this presentation speak only as of the date of this

presentation. We do not assume any duty and do not undertake to update those statements. Actual results or future events could differ, possibly

materially, from those anticipated in forward-looking statements, as well as from historical performance.

In this presentation, we may sometimes refer to adjusted results to help illustrate the impact of certain types of items. This information supplements

our results as reported in accordance with GAAP and should not be viewed in isolation from, or as a substitute for, our GAAP results. We believe that

this additional information and the reconciliations we provide may be useful to investors, analysts, regulators and others to help evaluate the impact

of these respective items on our operations. We may also provide information on the components of total net interest income (purchase accounting

accretion and the remainder, which we refer to as core net interest income), on the impact of purchase accounting accretion on net interest margin

(core net interest margin being net interest margin less (annualized purchase accounting accretion divided by average interest-earning assets)), on

pretax pre-provision earnings (total revenue less noninterest expense), and on tangible book value per common share (calculated based on tangible

common shareholders’ equity (common shareholders’ equity less goodwill and other intangible assets, other than servicing rights, net of deferred tax

liabilities on such intangible assets) divided by period-end common shares outstanding). Where applicable, we provide GAAP reconciliations for such

additional information, including in the slides, the Appendix and/or other slides and materials on our corporate website at

www.pnc.com/investorevents and in our SEC filings. In certain discussions, we may also provide information on yields and margins for all interest-

earning assets calculated using 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. We believe this adjustment may be useful when comparing yields and

margins for all earning assets. We may also use annualized, pro forma, estimated or third party numbers for illustrative or comparative purposes only.

These may not reflect actual results.

This presentation may also include discussion of other non-GAAP financial measures, which, to the extent not so qualified therein or in the Appendix,

is qualified by GAAP reconciliation information available on our corporate website at www.pnc.com under “About PNC–Investor Relations,” which may

include materials from investor presentations or in our annual, quarterly or current reports.

3Q14 Highlights

–

Revenue growth driven by higher noninterest income

–

Fee income growth outpaced the decline in NII

–

Well-managed expenses; Completed actions to achieve full year CIP

(1)

target ahead

of schedule

–

Overall credit quality improvement

–

Fee income grew 4% linked quarter

(2)

–

Pro forma fully phased-in Basel III common equity Tier 1 capital ratio increased to

10.1%

(3)

–

Capital actions

3Q14 financial

summary

Net income

Diluted EPS from

net income

Return on average

assets

$1.0 billion

$1.79

1.25%

Successfully managed a challenging revenue environment

Continued progress on strategic priorities

Strong Basel III capital position

(1) CIP refers to PNC’s Continuous Improvement Program. (2) See Reconcilement section of the Appendix. (3) Estimated as of September 30, 2014. We previously

referred to Basel III common equity Tier 1 capital ratio as the Basel III Tier 1 common capital ratio. Calculated on a pro forma basis without the benefit of the Basel

III phase-in provisions. For 3Q14, the resulting fully phased-in Basel III common equity Tier 1 capital ratio was calculated based on standardized approach RWAs and

rules. See Estimated Transitional Basel III and Pro forma Fully Phased-In Basel III Common Equity Tier 1 Capital Ratios and related information in the Appendix for

further details.

Repurchased 4.2 million common shares in 3Q14

Capital Improvement Continued

Average securities declined by

$1.9 billion

Average loans increased $.6 billion

Spot loan balances essentially flat

Spot deposits at Federal Reserve

Bank increased $9.4 billion

Average deposits grew $3.9 billion

Highlights

% change from:

Category (billions)

Sept. 30,

2014

June 30,

2014

Sept. 30,

2013

Investment securities

$54.4

(3%)

(4%)

Total commercial lending

$123.1

Total consumer lending

76.7

(1%)

Total loans

$199.8

Interest-earning deposits with banks

$22.1

51%

378%

Total assets

$329.4

Transaction deposits

$190.1

Total deposits

$223.8

Total equity

$45.7

Capital ratios:

(1,5)

Sept. 30,

2014

June 30,

2014

Sept. 30,

2013

Transitional Basel III common equity

Tier 1

(2,3)

11.1%

11.0%

N/A

Pro forma Fully Phased-In Basel III

common equity Tier 1

(3,4)

10.1%

10.0%

8.7%

Tangible book value per common share

(TBV)

(6)

$59.24

$58.22

$52.17

Book value per common share

$76.71

$75.62

$69.75

Avg. Balances –

Three months ended

Linked quarter:

Prior Year Quarter:

Average loans grew 5%

Average deposits increased 6%

TBV grew 14%

(6)

–

Total Commercial grew $.9 billion

–

Total Consumer declined $.3

billion

–

Transaction deposits grew $4.3

billion

(1) September 30, 2014 ratios estimated. (2) Calculated using the regulatory capital methodology applicable to PNC during 2014. See Note A in the Appendix for further details.

(3) We previously referred to Basel III common equity Tier 1 capital ratio as the Basel III Tier 1 common capital ratio. (4) Calculated on a pro forma basis without the benefit of

the Basel III phase-in provisions. For both 3Q14 and 2Q14, the resulting pro forma fully phased-in Basel III common equity Tier 1 ratios were calculated based on standardized

approach RWAs and rules. Advanced approaches RWAs and rules were utilized for 3Q13. (5) See Estimated Transitional Basel III and Pro forma Fully Phased-In Basel III Common

Equity Tier 1 Capital Ratios and related information in the Appendix for further details. (6) See Appendix for additional information related to TBV.

Solid Profitability and Returns

Highlights

Revenue grew 1%

Pretax pre-provision earnings

largely reflect noninterest income

growth of 3% and modest expense

growth

Credit costs declined

Prior Year Quarter:

Solid profitability mostly related to

reduced credit costs and expense in

addition to growth in noninterest

income of 3% offset by NII decline

Linked quarter:

YTD:

Maintained similar profitability due

to lower credit costs and expenses

partially offset by purchase

accounting accretion decline

$ change from:

(millions)

3Q14

2Q14

3Q13

Net interest income

$2,104

($25)

($130)

Noninterest income

1,737

Total revenue

$3,841

$31

($79)

Noninterest expense

(1)

$2,357

$29

($37)

Pretax pre-provision

earnings

(2,5)

$1,484

($42)

Provision

(17)

(82)

Pretax earnings

(3)

$1,429

$19

$40

Net income

$1,038

($14)

$10

Net income attributable to

diluted common shares

$959

($36)

$12

3Q14

2Q14

3Q13

Returns

ROAA

(4)

1.25%

1.31%

1.34%

ROACE

(4)

9.52%

10.12%

10.40%

(1) Prior period amounts have been updated to reflect first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax

credits. (2),(3),(4) See Notes B, C and D, respectively, in the Appendix for additional details. (5) See Reconcilement section of the Appendix.

Average interest-earning assets

grew 2%

NII declined 1%

NII

impacted by lower Core NII

(4)

PAA declined

Net Interest Income and NIM Declined

Core NII

(1)

$1,957

($25)

($78)

Plus purchase accounting

accretion (PAA)

147

(52)

Total NII

$2,104

($25)

($130)

3Q14

2Q14

3Q13

Margins

Net interest margin (NIM)

2.98%

3.12%

3.47%

Core NIM

(2)

2.78%

2.92%

3.17%

Highlights

Linked quarter:

Prior year quarter:

$ change from:

(billions)

3Q14

2Q14

3Q13

Average interest-earning assets

$285.0

$6.6

$25.3

(millions)

YTD:

–

Core NII impacted by lower

earning asset yields and

securities balances

–

Higher liquidity position

Core NII

(1)

reflects the commercial

facility

fees

classification

change

(3)

in addition to linked quarter factors

above

(1) Core net interest income (Core NII) is total net interest income (NII), as reported, less related purchase accounting accretion (scheduled

and excess cash recoveries) (PAA). See also Note E in the Appendix. (2) Core NIM is net interest margin (NIM) less (annualized PAA/average

interest-earning assets). See Reconcilement in Appendix. (3) Change in classification to noninterest income beginning 2Q14 of certain

commercial facility fees reported in net interest income in prior periods. (4) See Reconcilement section of Appendix.

Fee income increased 5%

(2)

Noninterest income growth of 3%

was primarily driven by overall

strong fee income growth of 4%

(2)

from

our diversified businesses

Residential mortgage decline largely

related to lower loan sales revenue

Noninterest income grew 3%

Fee income increased 9%

(2)

Strong Fee Income Growth

Highlights

Linked quarter:

Prior Year Quarter:

$ change from:

(millions)

3Q14

2Q14

3Q13

Asset management

(1)

$411

$49

$81

Consumer services

320

(3)

Corporate services

374

Residential mortgage

140

(42)

(59)

Service charges on deposits

179

Fee income

$1,424

$58

$117

Other

noninterest income

256

(5)

(38)

Gain on VISA sales

(28)

Total other noninterest

income

(2,3)

$313

($2)

($66)

Total noninterest income

$1,737

$56

$51

3Q14

2Q14

3Q13

Noninterest income to total

revenue

45%

44%

43%

YTD:

(1) Asset management includes the Asset Management Group (AMG) and BlackRock. (2) See Reconcilement section of the Appendix.

(3) Total other noninterest income includes the categories other income (including VISA gains), net gains (losses) on sales of securities

and net-other-than-temporary impairments.

Disciplined Expense Management While Investing for

Growth

Completed actions to achieve full

year 2014 CIP

(2)

target of $500

million ahead of schedule

Noninterest expense in line with

lower-end of guidance

Highlights

Linked quarter:

Prior Year Quarter:

Noninterest expense decline of 2%

reflects continued expense

management

$ change from:

(millions)

3Q14

2Q14

3Q13

Personnel

$1,189

$17

Occupancy

200

(5)

Equipment

220

Marketing

(2)

Other

682

(3)

(64)

Total noninterest expense

$2,357

$29

($37)

3Q14

2Q14

3Q13

Efficiency ratio

(1,3)

61%

YTD:

Noninterest expense declined 3%

–

Personnel higher due to increased

variable compensation costs

largely related to business activity

–

Equipment increase mostly

related to technology and

business infrastructure

(1) See Note F in the Appendix. (2) CIP refers to PNC’s Continuous Improvement Program. (3) As required on adoption of Accounting

Standards Update 2014-01, 2013 periods have been updated for adoption of ASU 2014-01. This includes a reduction in noninterest expense

for 2013 periods. The efficiency ratio for the 2013 period listed above has been updated to reflect the adoption of this ASU.

3Q14

2Q14

3Q13

2Q14

3Q13

Nonperforming

loans

(1,2)

$2,612

$2,801

$3,206

(7%)

(19%)

Total Past

Due

(1,3)

$2,006

$2,098

$2,669

(4%)

(25%)

Net charge-offs

$82

$145

$224

(43%)

(63%)

Provision

$55

$72

$137

(24%)

(60%)

3Q14

2Q14

3Q13

Loan loss

reserves to total

loans

(4)

1.70%

1.72%

1.91%

Overall Credit Quality Continued to Improve

Highlights

(millions)

Continued credit quality

improvement

Maintained appropriate

reserves

% change from:

Linked quarter:

–

Overall delinquencies

declined 4%

–

Net charge-offs

declined and were

.16% of average

loans

(5)

–

Provision for credit

losses declined

As of quarter end except net charge-offs and provision, which are for the quarter. (1) Does not include purchased impaired loans or loans held for

sale. (2) Does not include foreclosed and other assets. Excludes certain government insured or guaranteed loans and loans accounted for under the

fair value option. (3) Includes loans that are government guaranteed/insured, primarily residential mortgages. Past due loans in this category totaled

$1.5 billion in 3Q14. (4) See Note G in the Appendix for additional details. (5) Net charge-offs to average loans (for 3Q14) (annualized).

Outlook

(1)

–

4Q14 vs. 3Q14

(1) Refer to Cautionary Statement in the Appendix, including economic and other assumptions. Does not take into account impact of potential

legal and regulatory contingencies. (2) Fee income refers to noninterest income in the following categories: asset management, consumer

services, corporate services, residential mortgage, and service charges on deposits.

Balance sheet

Income

statement

Loans

Net interest income

Fee income

(2)

Noninterest expense

Loan loss provision

Modest growth

Down modestly

Stable

Up low single digits

$25-$75 million

Cautionary Statement Regarding Forward-Looking

Information

Appendix

This presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial

review. It should not be viewed in isolation but rather in the context of all of the information made available by PNC in its SEC filings.

We also make statements in this presentation, and we may from time to time make other statements, regarding our outlook for earnings,

revenues, expenses, capital and liquidity levels and ratios, asset levels, asset quality, financial position, and other matters regarding or

affecting PNC and its future business and operations that are forward-looking statements within the meaning of the Private Securities

Litigation Reform Act. Forward-looking statements are typically identified by words such as “believe,” “plan,” “expect,” “anticipate,” “see,”

“look,” “intend,” “outlook,” “project,” “forecast,” “estimate,” “goal,” “will,” “should” and other similar words and expressions.

Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking

statements speak only as of the date made. We do not assume any duty and do not undertake to update forward-looking statements. Actual

results or future events could differ, possibly materially, from those anticipated in forward-looking statements, as well as from historical

performance.

Our forward-looking statements are subject to the following principal risks and uncertainties.

Our businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:

Changes in interest rates and valuations in debt, equity and other financial markets.

Disruptions in the liquidity and other functioning of U.S. and global financial markets.

The impact on financial markets and the economy of any changes in the credit ratings of U.S. Treasury obligations and other U.S.

government-backed debt, as well as issues surrounding the levels of U.S. and European government debt and concerns regarding the

creditworthiness of certain sovereign governments, supranationals and financial institutions in Europe.

Actions by the Federal Reserve, U.S. Treasury and other government agencies, including those that impact money supply and market interest

rates.

Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness.

Slowing or reversal of the current U.S. economic expansion.

Changes in customer preferences and behavior, whether due to changing business and economic conditions, legislative and regulatory

initiatives, or other factors.

Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially

different than we are currently expecting. These statements are based on our current view that the U.S. economic expansion will speed

up to an above trend growth rate near 3.0 percent in the second half of 2014 and that short-term interest rates will remain very low and

bond yields will rise only slowly in the latter half of 2014. These forward-looking statements also do not, unless otherwise indicated, take

into account the impact of potential legal and regulatory contingencies.

Continued residual effects of recessionary conditions and uneven spread of positive impacts of recovery on the economy and our

counterparties, including adverse impacts on levels of unemployment, loan utilization rates, delinquencies, defaults and counterparty

ability to meet credit and other obligations.

Cautionary Statement Regarding Forward-Looking

Information (continued)

Appendix

PNC’s ability to take certain capital actions, including paying dividends and any plans to increase common stock dividends, repurchase common

stock under current or future programs, or issue or redeem preferred stock or other regulatory capital instruments, is subject to the review of

such proposed actions by the Federal Reserve as part of PNC’s comprehensive capital plan for the applicable period in connection with the

regulators’ Comprehensive Capital Analysis and Review (CCAR) process and to the acceptance of such capital plan and non-objection to such

capital actions by the Federal Reserve.

PNC’s regulatory capital ratios in the future will depend on, among other things, the company’s financial performance, the scope and terms of

final capital regulations then in effect (particularly those implementing the Basel Capital Accords), and management actions affecting the

composition of PNC’s balance sheet. In addition, PNC’s ability to determine, evaluate and forecast regulatory capital ratios, and to take actions

(such as capital distributions) based on actual or forecasted capital ratios, will be dependent at least in part on the development, validation and

regulatory approval of related models.

Legal and regulatory developments could have an impact on our ability to operate our businesses, financial condition, results of operations,

competitive position, reputation, or pursuit of attractive acquisition opportunities. Reputational impacts could affect matters such as business

generation and retention, liquidity, funding, and ability to attract and retain management. These developments could include:

Changes resulting from legislative and regulatory reforms, including major reform of the regulatory oversight structure of the

financial services industry and changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other industry

aspects, and changes in accounting policies and principles. We will be impacted by extensive reforms provided for in the Dodd-Frank

Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and otherwise growing out of the most recent financial crisis,

the precise nature, extent and timing of which, and their impact on us, remains uncertain.

Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other

inquiries. In addition to matters relating to PNC’s current and historical business and activities, such matters may include

proceedings, claims, investigations, or inquiries relating to pre-acquisition business and activities of acquired companies, such

as National City. These matters may result in monetary judgments or settlements or other remedies, including fines, penalties,

restitution or alterations in our business practices, and in additional expenses and collateral costs, and may cause reputational

harm to PNC.

Results of the regulatory examination and supervision process, including our failure to satisfy requirements of agreements with

governmental agencies.

Changes to regulations governing bank capital and liquidity standards, including due to the Dodd-Frank Act and to Basel-related

initiatives.

Impact on business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of

adequacy of our intellectual property protection in general.

Cautionary Statement Regarding Forward-Looking

Information (continued)

Appendix

Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including,

where appropriate, through effective use of third-party insurance, derivatives, and capital management techniques, and to meet evolving

regulatory capital and liquidity standards. In particular, our results currently depend on our ability to manage elevated levels of impaired

assets.

Business and operating results also include impacts relating to our equity interest in BlackRock, Inc. and rely to a significant extent on

information provided to us by BlackRock. Risks and uncertainties that could affect BlackRock are discussed in more detail by BlackRock in

its SEC filings.

We grow our business in part by acquiring from time to time other financial services companies, financial services assets and related

deposits and other liabilities. Acquisition risks and uncertainties include those presented by the nature of the business acquired, including

in some cases those associated with our entry into new businesses or new geographic or other markets and risks resulting from our

inexperience in those new areas, as well as risks and uncertainties related to the acquisition transactions themselves, regulatory issues,

and the integration of the acquired businesses into PNC after closing.

Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can

affect market share, deposits and revenues. Industry restructuring in the current environment could also impact our business and

financial performance through changes in counterparty creditworthiness and performance and in the competitive and regulatory landscape

Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet

competitive demands.

Business and operating results can also be affected by widespread natural and other disasters, dislocations, terrorist activities,

cyberattacks or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties

specifically.

We provide greater detail regarding these as well as other factors in our 2013 Form 10-K and our 2014 Form 10-Qs, including in the Risk

Factors and Risk Management sections and the Legal Proceedings and Commitments and Guarantees Notes of the Notes To Consolidated

Financial Statements in those reports, and in our subsequent SEC filings. Our forward-looking statements may also be subject to other risks

and uncertainties, including those we may discuss elsewhere in this presentation or in our SEC filings, accessible on the SEC’s website at

www.sec.gov and on our corporate website at www.pnc.com/secfilings. We have included these web addresses as inactive textual references

only. Information on these websites is not part of this document.

Any annualized, pro forma, estimated, third party or consensus numbers in this presentation are used for illustrative or comparative purposes

only and may not reflect actual results. Any consensus earnings estimates are calculated based on the earnings projections made by analysts

who cover that company. The analysts’ opinions, estimates or forecasts (and therefore the consensus earnings estimates) are theirs alone,

are not those of PNC or its management, and may not reflect PNC’s or other company’s actual or anticipated results.

Notes

Appendix

Explanatory Notes

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

(E) PNC believes that core net interest income, a non-GAAP measure, is useful in evaluating components of net interest income.

(A) Transitional Basel III common equity Tier 1 capital ratio is common equity Tier 1 capital (using the definitions of, and deductions

from, capital under Basel III, as such definitions and deductions are phased-in for 2014) divided by period-end Basel I risk-

weighted assets with 2014 transition adjustments as defined by the Basel III rules.

(F) Efficiency ratio calculated as noninterest expense divided by total revenue.

(B) Pretax pre-provision earnings is defined as total revenue less noninterest expense. We believe that pretax pre-provision

earnings, a non-GAAP measure, is useful as a tool to help evaluate the ability to provide for credit costs through operations.

(D) ROAA is Return on Average Assets and ROACE is Return on Average Common Shareholders' Equity.

Estimated Transitional Basel III and Pro forma Fully Phased-

In Basel III Common Equity Tier 1 Capital Ratios

Appendix

As a result of the staggered effective dates of the final U.S. capital rules issued in July 2013, as well as the

fact that PNC remains in the parallel run qualification phase for the advanced approaches, PNC’s regulatory

risk-based capital ratios during 2014 are based on the definitions of, and deductions from, capital under Basel

III (as such definitions and deductions are phased-in for 2014) and Basel I risk-weighted assets (but subject

to certain adjustments as defined by the Basel III rules). We refer to the capital ratios calculated using these

Basel III phased-in provisions and Basel I risk-weighted assets as the Transitional Basel III ratios. These

capital ratios became effective for PNC on January 1, 2014.

We provide information on the next slide regarding PNC’s estimated Transitional Basel III common

equity Tier 1 ratio and PNC’s estimated pro forma fully phased-in Basel III common equity Tier 1

ratio. We previously referred to the Basel III common equity Tier 1 ratio as the Basel III Tier 1

common ratio. In addition, on the next slide we provide information regarding PNC’s Basel I Tier 1

common capital ratio during 2013, which was applicable to PNC through 2013 under the U.S.

regulatory capital rules.

Common equity Tier 1 capital as defined under the Basel III rules adopted by the U.S. banking

agencies differs materially from Basel I Tier 1 common capital. For example, under Basel III,

significant common stock investments in unconsolidated financial institutions, mortgage servicing

rights and deferred tax assets must be deducted from capital to the extent they individually exceed

10%, or in the aggregate exceed 15%, of the institution’s adjusted common equity Tier 1 capital.

Also, Basel I regulatory capital excludes accumulated other comprehensive income related to

securities currently and previously held as available for sale, as well as pension and other

postretirement plans, whereas under Basel III these items are a component of PNC's capital.

Estimated Transitional Basel III and Pro forma Fully Phased-

In Basel III Common Equity Tier 1 Capital Ratios

Appendix

Transitional Basel III

Pro forma Fully Phased-In Basel III

Dollars in millions

September 30, 2014

June 30, 2014

September 30, 2014

June 30, 2014

September 30, 2013(a)

Common stock, related surplus, and retained earnings, net of treasury stock

$39,809

$39,380

$39,809

$39,380

$37,143

Less regulatory capital adjustments:

Goodwill and disallowed intangibles, net of deferred tax liabilities

(8,914)

(8,923)

(9,233)

(9,262)

(9,350)

Basel III total threshold deductions

(214)

(216)

(1,070)

(1,075)

(2,011)

Accumulated other comprehensive income (b)

100

115

501

576

(231)

All other adjustments (c)

(30)

(5)

(98)

(74)

(302)

Estimated Basel III Common equity Tier 1 capital

30,751

30,351

29,909

29,545

25,249

Estimated Basel I risk-weighted assets calculated in accordance with

transition rules for 2014 (d)

276,525

277,126

N/A

Estimated Basel III standardized approach risk-weighted assets (e)

N/A

295,945

295,217

N/A

Estimated Basel III advanced approaches risk-weighted assets (f)

N/A

287,888

290,063

289,063

Estimated Basel III Common equity Tier 1 capital ratio

11.1%

11.0%

10.1%

10.0%

8.7%

Risk-weight and associated rules utilized

Basel I (with 2014

transition

adjustments)

Basel I (with

2014 transition

adjustments)

Standardized

Advanced

(a) Amounts have not been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax credits.

(b) Represents net adjustments related to accumulated other comprehensive income for securities currently and previously held as available for sale, as well as

pension and other postretirement plans.

(d) Includes credit and market risk-weighted assets.

(e) Basel III standardized approach risk-weighted assets were estimated based on the Basel III standardized approach rules and include credit and market risk-weighted assets.

(f) Basel III advanced approaches risk-weighted assets were estimated based on the Basel III advanced approaches rules, and include credit, market and operational risk-weighted assets.

2013 Basel I Tier 1 Common Capital Ratios (a) (b)

Dollars in millions

Dec. 31, 2013

Sept. 30, 2013

Basel I Tier 1 common capital

$28,484

$27,540

Basel I risk-weighted assets

272,169

266,698

Basel I Tier 1 common capital ratio

10.5%

10.3%

(a) Effective January 1, 2014, the Basel I Tier 1 common capital ratio no longer applies to PNC (except for stress testing purposes). Our 2013

Form 10-K included additional information regarding our Basel I capital ratios.

PNC utilizes the pro forma fully phased-in Basel III capital ratios to assess its capital position (without the benefit of phase-ins), including comparison to similar estimates made by

other financial institutions. Our Basel III capital ratios and estimates may be impacted by additional regulatory guidance or analysis, and in the case of those ratios calculated

using the advanced approaches, the ongoing evolution, validation and regulatory approval of PNC’s models integral to the calculation of advanced approaches risk-weighted

assets.

(b) Amounts have not been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income housing tax

credits.

Tangible Book Value per Common Share

Appendix

%Change

Tangible Book Value per Common Share Ratio

9/30/14 vs.

6/30/14

9/30/14 vs.

9/30/13

Dollars in millions, except per share data

September 30, 2014

June 30, 2014

September 30, 2013

Book value per common share (a)

76.71

75.62

69.75

10%

Tangible book value per common share

Common shareholders' equity (a)

40,536

40,261

37,103

Goodwill and Other Intangible Assets (b)

(9,559)

(9,590)

(9,690)

Deferred tax liabilities on Goodwill and Other Intangible Assets (b)

325

327

340

Tangible common shareholders' equity

31,302

30,998

27,753

Period-end common shares outstanding (in millions)

528

532

Tangible book value per common share (Non-GAAP)

59.24

58.22

52.17

14%

Tangible book value per common share is a non-GAAP financial measure and is calculated based on tangible common shareholders’ equity

divided by period-end common shares outstanding. We believe this non-GAAP financial measure serves as a useful tool to help evaluate the

strength and discipline of a company's capital management strategies and as an additional, conservative measure of total company value.

(a) Amounts for the 2013 period have been updated to reflect the first quarter 2014 adoption of Accounting Standards Update (ASU) 2014-01

related to investments in low income housing tax credits.

(b) Excludes the impact from mortgage servicing rights of $1.5 billion at both September 30, 2014 and June 30, 2014 and $1.6 billion at

September 30, 2013.

Non-GAAP to GAAP Reconcilement

Appendix

$ in millions

Sept. 30, 2014

June 30, 2014

Sept. 30, 2013

Net interest margin, as reported

2.98%

3.12%

3.47%

Purchase accounting accretion (1)

$147

$199

Purchase accounting accretion, if annualized

$583

$590

$790

Avg. interest earning assets

$284,951

$278,369

$259,606

Annualized purchase accounting accretion/Avg. interest-earning assets

0.20%

0.30%

Core net interest margin (2)

2.78%

2.92%

3.17%

For the three months ended

(1) Purchase accounting accretion is scheduled purchase accounting accretion plus excess cash recoveries.

(2) PNC believes that core net interest margin, a non-GAAP measure, is useful as a tool to help evaluate the impact of purchase

accounting accretion on net interest margin. The adjustment represents annualized purchase accounting accretion divided by

average interest-earning assets.

$ in millions

Sept. 30,

2014

June 30,

2014

Sept. 30,

2013

Sept. 30,

2014

Sept. 30,

2013

Net Interest Income

Core net interest income (a)

$1,957

$1,982

$2,035

$5,971

$6,229

Total purchase accounting accretion (a)

Scheduled accretion net of contractual interest

116

112

173

362

565

Excess cash recoveries

Total purchase accounting accretion

147

199

457

652

Total net interest income

$2,104

$2,129

$2,234

$6,428

$6,881

For the three months ended

For the nine months ended

(a) We believe that core net interest income, a non-GAAP measure, and purchase accounting accretion are

useful in evaluating the components of total net interest income.

Non-GAAP to GAAP Reconcilement

Appendix

For the three months ended

For the nine months ended

$ in millions

September 30, 2014

June 30, 2014

% change

September 30, 2013

% change

September 30, 2014

September 30, 2013

% change

Net interest income

$2,104

$2,129

-1%

$2,234

-6%

$6,428

$6,881

-7%

Noninterest income

$1,737

$1,681

$1,686

$5,000

$5,058

-1%

Total revenue

$3,841

$3,810

$3,920

-2%

$11,428

$11,939

-4%

Noninterest expense

($2,357)

($2,328)

($2,394)

-2%

($6,949)

($7,167)

-3%

Pretax pre-provision earnings (1)

$1,484

$1,482

$1,526

-3%

$4,479

$4,772

-6%

Net income

$1,038

$1,052

-1%

$1,028

$3,150

$3,138

(1) PNC believes that pretax, pre-provision earnings, a non-GAAP measure, is useful as a tool to help evaluate the ability to

provide for credit costs through operations.

For the three months ended

For the nine months ended

$ in millions

September 30, 2014

June 30, 2014

% change

September 30, 2013

% change

September 30, 2014

September 30, 2013

% change

Asset management

$411

$362

$330

$1,137

$978

Consumer services

$320

$323

$316

$933

$926

Corporate services

$374

$343

$306

$1,018

$909

Residential mortgage

$140

$182

$199

$483

$600

Service charges on deposits

$179

$156

$482

$439

Total fee income

$1,424

$1,366

$1,307

$4,053

$3,852

Net gains (losses) on sales of securities

($6)

$21

Net other-than-temporary impairments

($1)

($2)

(4)

(16)

Other

$314

$322

$360

$947

$1,126

Total noninterest income, as reported

$1,737

$1,681

$1,686

$5,000

$5,058

-1%

Non-GAAP to GAAP Reconcilement

Appendix

For the three months ended

$ in millions

September 30, 2014

June 30, 2014

% change

September 30, 2013

% change

Asset management

$411

$362

$330

Consumer services

$320

$323

$316

Corporate services

$374

$343

$306

Residential mortgage

$140

$182

$199

Service charges on deposits

$179

$156

Total fee income

$1,424

$1,366

$1,307

Net gains (losses) on sales of securities

($6)

$21

Net other-than-temporary impairments

($1)

($2)

Other

$314

$322

$360

Total noninterest income, as reported

$1,737

$1,681

$1,686

Corporate services

$374

$343

$306

22%

Less commercial facility fees in corporate services

($32)

($31)

impacted by classification change (1)

$342

$312

10%

$306

12%

facility fees classification change

(1) Certain commercial facility fees reported in net interest income in

prior periods are classified as noninterest income beginning in 2Q14.

Corporate services, adjusted for commercial

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