Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Lehman Brothers Financial Services Conference 2008
33 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, May 20, 2008
Slide 1: The PNC Financial Services Group, Inc.
The PNC Financial Services Group, Inc. Lehman Brothers Financial Services Conference London May 20, 2008 Exhibit 99.1
Slide 2: Cautionary Statement Regarding Forward-Looking Information and Adjusted Information
Cautionary Statement Regarding Forward-Looking Information and Adjusted Information This presentation contains forward-looking statements regarding our outlook or expectations relating to PNC’s future business, operations, financial condition, financial performance and asset quality. Forward-looking
Slide 3: PNC - Designed to Consistently Deliver Strong Results
Clear strategies and strong execution PNC - Designed to Consistently Deliver Strong Results Maintaining a moderate risk profile Creating positive operating leverage - Ability to grow high-quality diverse revenue streams - A well-positioned balance sheet for strong net interest income growth - A cont
Slide 4: PNC Corporate Profile Highlights
PNC Corporate Profile Highlights ¹ Overview Market cap $24 billion Assets $140 billion Loans $71 billion Deposits $80 billion Branches 1,096 ATMs 3,903 Employees 27,335 (1) As of March 31, 2008, not including market cap. Market cap as of May 6, 2008. Loans are net of unearned income. One of the larg
Slide 5: Key Growth Statistics
Key Growth Statistics PNC Has a Demonstrated Ability to Deliver Solid Results 7% 10% Net interest income 7% 9% ¹ Noninterest income 8% 10% ¹ Total revenue Peers PNC Compound annual growth 2003-2007 (1%) 5% Diluted EPS 4% 10% Net income 12% 19% Assets (1) PNC noninterest income and total revenue are
Slide 6: PNC Franchise
PNC Franchise BLK CO TX KS BLK Retail Banking Footprint Corporate & Institutional Offices PFPC International Offices BlackRock Headquarters (60 offices in 19 countries)
Slide 7: PNC 2008 Execution Highlights
PNC 2008 Execution Highlights PNC’s Ability to Execute Yielded Positive Results, Despite Market Volatility Delivered solid 1Q08 results in a difficult environment 1Q08 net income of $377 million or $1.09 per diluted share Posted strong revenue growth Created positive operating leverage Maintained a
Slide 8: Maintaining a moderate risk profile
Maintaining a moderate risk profile PNC - Designed to Consistently Deliver Strong Results Clear strategies and strong execution Creating positive operating leverage - Ability to grow high-quality diverse revenue streams - A well-positioned balance sheet for strong net interest income growth - A cont
Slide 9: Balanced Asset Mix Less Dependent on Credit
PNC 51 % Balanced Asset Mix Less Dependent on Credit 30% 21% 19% 7% 21% Total Assets $140 billion Wachovia Wells Fargo US Bancorp Regions BB&T SunTrust Fifth Third National City KeyCorp Comerica Cash, FF sold, other short- term investments Other Assets Consumer loans, including residential mortgage
Slide 10: Consumer Loan Portfolio
Consumer Loan Portfolio Auto 5% Other 14% Total portfolio $29 billion Residential mortgage 32% Home Equity Portfolio Credit Statistics ¹ First lien positions 39% In-footprint exposure 93% Weighted average: Loan to value 72% FICO scores Net charge-offs ² 0.35% 90 days past due 0.42% Home equity 49% R
Slide 11: Commercial Lending Portfolio
Commercial Lending Portfolio Asset- based 12% Commercial real estate 22% Equip. leasing 8% Total portfolio $42 billion Commercial Real Estate Type Outstanding Nonperforming billions billions Commercial - other 58% As of March 31, 2008. (1) Excludes $44 million charge-off increase due to the realignm
Slide 12: Strong Relative Credit Risk Profile
Strategic Decisions and Operating Discipline Result in a Strong Relative Credit Risk Profile Peer comparison source: SNL DataSource; Peer Group represents average of super-regional banks identified in the Appendix other than PNC. PNC as reported. 0.00% 0.30% 0.60% 0.90% 1.20% 1.50% Nonperforming loa
Slide 13: Creating positive operating leverage
Creating positive operating leverage Ability to grow high-quality diverse revenue streams A well-positioned balance sheet for strong net interest income growth A continuous improvement culture PNC - Designed to Consistently Deliver Strong Results Clear strategies and strong execution Maintaining a m
Slide 14: Diverse and Valuable Revenue Stream
PNC 53 % Diverse and Valuable Revenue Stream Deposit and other net interest income Loan net interest income 14% 29% 18% Asset management 12% Consumer services and deposit charges 12% Fund servicing 9% Corporate services 6% Other Total revenue $1.8 billion Revenue growth +13% 1Q08 vs. 1Q07 US Bancorp
Slide 15: Consumer Services, Deposit Charges and Brokerage
Consumer Services, Deposit Charges and Brokerage Key drivers Consumer services Deposit charges Brokerage - PNC Investments Retail checking relationships (millions) 2.31 +17% ² Consumer online banking users 55% +18% ³ Consumer online bill-pay users 35% +61% ³ Retail average deposits (billions) Nonint
Slide 16: Asset Management
Asset Management Key drivers PNC Wealth Management BlackRock BlackRock ¹ AUM (billions) Equity and balanced $427 Fixed income Cash management Alternative investments Total $1,364 Change from March 31, 2007 +18% PNC Wealth Management AUM (billions) Equity $36 Fixed income Liquidity/Other Total $65 (1
Slide 17: Fund Servicing
Fund Servicing Key drivers Investor services Securities services $0 $50 $100 $150 $200 $250 1Q08 1Q07 Accounting/administration net fund assets (billions) Domestic $875 +20% Offshore $125 +37% Custody fund assets (billions) $476 +9% Total assets serviced (billions) $2,600 +18% Shareholder accounts (
Slide 18: Corporate Services
Corporate Services Key drivers Treasury management Capital markets and other Mortgage servicing $0 $25 $50 $75 $100 $125 $150 $175 1Q08 1Q07 Corporate & Institutional (average billions) Noninterest-bearing demand deposits $7.5 +6% Money market deposits $5.0 +11% Loans $24.4 +25% Commercial mortgage
Slide 19: Strong Net Interest Income Growth
Strong Net Interest Income Growth 2.95% 3.09% +14bps $623 $738 $761 $793 $854 $0 $150 $300 $450 $600 $750 $900 1Q07 2Q07 3Q07 4Q07 1Q08 Net interest margin
Slide 20: Creating Positive Operating Leverage
Creating Positive Operating Leverage Operating Leverage +3% PNC’s Disciplined Growth Strategies Help Drive Positive Operating Leverage…and EPS Growth $0 $1 $2 $3 $4 $5 $6 $7 Adjusted revenue ² Adjusted noninterest expense ³ Adjusted net income $1.2 $1.3 $1.5 (1) As reported: revenue 7%, expense 5%,
Slide 21: Building capital flexibility and strong liquidity
Building capital flexibility and strong liquidity PNC - Designed to Consistently Deliver Strong Results Clear strategies and strong execution Maintaining a moderate risk profile Creating positive operating leverage - Ability to grow high-quality diverse revenue streams - A well-positioned balance sh
Slide 22: Building Our Capital Flexibility
Building Our Capital Flexibility PNC’s Execution and Disciplined Use of Capital Help Build Flexibility Strong earnings Access to capital markets Return to shareholders Investing in our businesses Target Range Tier 1 Capital Ratio 7.7% (at March 31, 2008) Sources/Uses 8.5% 7.5%
Slide 23: Well-Positioned from a Liquidity Standpoint
Well-Positioned from a Liquidity Standpoint Peer Group Composite Ranking Lehman Brothers Criteria 1 PNC Net loans and leases to total deposits Net non-core funding dependence Net short-term liabilities to total assets On hand liquidity to total liabilities Reliance on wholesale funding Source: Bank
Slide 24: Summary: PNC Is Continuing to Build a Great Company
Summary PNC Is Continuing to Build a Great Company Clear strategies and strong execution Commitment to a moderate risk profile Ability to grow high quality revenue streams Focus on continuous improvement Disciplined capital management processes Strong liquidity PNC’s… …leave us well-positioned for t
Slide 25: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Appendix We make statements in this presentation, and we may from time to time make other statements, regarding our outlook or expectations for earnings, revenues, expenses and/or other matters regarding or affecting PNC that are forward-loo
Slide 26: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix •Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through the effective use of third-party insurance, deriv
Slide 27: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix In millions, for the three months ended March 31, 2008 December 31, 2007 March 31, 2007 December 31, 2007 March 31, 2007 Net interest income $854 $793 $623 8% 37% Loan net interest income 7% 40% Deposit net interest income 8% 36% Noninterest income 16% (2%) To
Slide 28: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, 2007 PNC PNC In millions As Reported Adjustments (a) As Adjusted Net interest income $2,915 $2,915 Noninterest income 3,790 $131 3,921 Total revenue 6,705 6,836 Provision for credit losses (45) Noninterest expense 4,296 (184) 4,
Slide 29: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, 2005 BlackRock PNC Deconsolidation and BlackRock PNC In millions As Reported Other Adjustments Equity Method As Adjusted Net interest income $2,154 $(12) $2,142 Noninterest income 4,173 (1,214) $163 3,122 Total revenue 6,327 (1,
Slide 30: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, 2003 BlackRock PNC Deconsolidation and BlackRock PNC In millions As Reported Other Adjustments Equity Method As Adjusted Net interest income $1,996 $(16) $1,980 Noninterest income 3,263 (604) $108 2,767 Total revenue 5,259 (620)
Slide 31: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix In millions PNC as reported BlackRock related adjustments (a) 2003 adjusted for BlackRock PNC as reported BlackRock related adjustments (b) 2007 adjusted for BlackRock '03-'07 CAGR, reported '03-'07 CAGR, adjusted for BlackRock Net interest income $1,996 $(16)
Slide 32: Peer Group of Super-Regional Banks
Peer Group of Super-Regional Banks Appendix The PNC Financial Services Group, Inc. PNC BB&T Corporation BBT Comerica CMA Fifth Third Bancorp FITB KeyCorp KEY National City Corporation NCC Regions Financial RF SunTrust Banks, Inc. STI U.S. Bancorp USB Wachovia Corporation WB Wells Fargo & Company WFC
Slide 33: PNC Awards & Recognition
PNC Awards & Recognition The PNC Financial Services Group has been recognized nationally and regionally for its accomplishments and success as a diversified financial services firm that reflects the needs, values and aspirations of our customers, employees, communities and shareholders. HIGH-PERFORM
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