Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Goldman Sachs Financial Services CEO Conference 2007
31 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Dec 12, 2007
Slide 1: The PNC Financial Services Group, Inc. - Goldman Sachs Financial Services CEO Conference 2007
Exhibit 99.1 The PNC Financial Services Group, Inc. Goldman Sachs Financial Services CEO Conference 2007 New York December 12, 2007
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's Differentiation
PNC’s Differentiation Performance validates business model Investing for the future Differentiation to drive growth
Slide 4: Growing Our Balance Sheet
Growing Our Balance Sheet As of September 30 $131B $98B $93B $78B $77B $65B $65B $60B $50B $48B $51B $42B Net loans Deposits Assets 1 1 Peer net Peer 1 deposit Peer asset loan CAGR CAGR CAGR 14% 10% 11% (1) Peer reflects CAGR of the average of the super-regional banks identified in the Appendix othe
Slide 5: Delivering the Bottom Line
Delivering the Bottom Line Net Income Diluted Earnings Per Share For the Nine Months $1.34B For the Nine Months Ended September 30 (as adjusted, Ended September 30 $4.00 $1.29B as reported) $3.77 (as adjusted, $1.12B (as adjusted, $3.85 as reported) (as adjusted, $7.46 as reported) $2.22B as reporte
Slide 6: Creating Positive Operating Leverage
Creating Positive Operating Leverage Generating Capital by Growing Revenues Faster Than Expenses Trend Continues¹ billions Compound Annual Nine months ended September 30, as adjusted $7 Growth Rate (2004 – 2006) 2007 vs 2006 $6 Revenue 9% Revenue +20% $5 $4 Expense Expense +15% $3 7% $2 $1.5 $1.2 $1
Slide 7: Credit Discipline Reflected in Reserves and Losses
Credit Discipline Reflected in Reserves and Losses Proactively Assessing Credits Managing the Risk Reserves to Nonperforming Assets Net Charge-offs to Average Loans 3Q07 3Q07 USB 318 % WB 0.19 % PNC 251 RF 0.27 RF 182 PNC 0.30 CMA 176 CMA 0.32 BBT 171 STI 0.35 KEY 168 KEY 0.35 WFC 142 BBT 0.41 WB 11
Slide 8: Building a Diversified Business Mix
Building a Diversified Business Mix High Fee Income Contribution Less Net Interest Income Dependent Noninterest Income to Total Revenue¹ Loans to Deposits² YTD07 3Q07 PNC 58 % PNC 84 % 50% USB 52 without RF 101 PFPC and FITB 48 BlackRock³ STI 104 WFC 46 BBT 104 WB 42 WB 106 STI 42 KEY 108 BBT 42 WFC
Slide 9: PNC's Differentiation
PNC’s Differentiation Performance validates business model Investing for the future Differentiation to drive growth
Slide 10: Improving Our Demographics
Improving Our Demographics Median Household Income Projected 5-Year Population Growth $73,965 10.0% $69,270 $69,363 $66,273 $60,949 8.4% $56,250 $54,620 6.0% 3.9% 3.7% 3.4% 2.0% 2003 Acquisitions Proforma 2003 Acquisitions Proforma Amounts based on data at time of acquisition announcement. United Tr
Slide 11: Executing in the Greater Washington Area
Executing in the Greater Washington Area (“GWA”) Deepening Relationships and Growing Noninterest Income* GWA noninterest income PNC - GWA Retail Relationships PNC - GWA Fee Growth to total revenue 125 $20 +38% 43.6% 100 40.5% $16 +96% 75 $12 +45% 50 $8 +48% 25 $4 +14% 0 $0 June 30 Sept 30 1Q06 3Q07
Slide 12: Leveraging Our Global Fund Servicing Platform
Leveraging Our Global Fund Servicing Platform High Growth Product Focus Transforming the Business Model Emerging product revenue Albridge Solutions, Inc. 3-yr CAGR 18% Emerging Product $700 Revenue Core Product $600 Revenue 28% $500 21% From $400 To… Processor Integrated $300 Provider 79% 72% $200 $
Slide 13: Leveraging Corporate & Institutional Relationships to Grow Noninterest Income
Leveraging Corporate & Institutional Relationships to Grow Noninterest Income Deepening Relationships with Fee Based Products and Services Major Product Revenue¹ Midland Loan Services Commercial Loan Servicing $800 CMBS Servicing Portfolio Institutional Servicing Portfolio Agency Servicing Portfolio
Slide 14: Leveraging Corporate & Institutional Banking Channels to Grow Low Cost Deposits
Leveraging Corporate & Institutional Banking Channels to Grow Low Cost Deposits Corporate & Institutional Banking Average Deposits Treasury Management 74% Total deposits Midland $13.6B 25% $13.6 billion $11.8B $10.5B Other 1% Noninterest bearing $7.2 billion Treasury Management Midland 59% 40% 3Q06
Slide 15: CMBS Originations - A Strategic Business with Unprecedented Liquidity Issues
CMBS Originations – A Strategic Business with Unprecedented Liquidity Issues and Spread Widening Context Market Volatility Impact on CMBS $50 Focused on risk adjusted returns, US CMBS Securitizations $40 supports our servicing activity $30 High quality HFS credit portfolio $20 consistent with modera
Slide 16: PNC's Differentiation
PNC’s Differentiation Performance validates business model Investing for the future Differentiation to drive growth
Slide 17: PNC's Differentiation - Focus on Execution
PNC’s Differentiation – Focus on Execution Strengthen the brand Engage Employees Foster Innovation Create a sense of urgency
Slide 18: Brand Equity Contribution to Market Cap
Brand Equity Contribution to Market Cap 16.1% 14.8% 13.3% 13.3% 11.5% 6.8% Home Motor Restaurants Toiletries/ Retailers Banks Appliances Vehicles Cosmetics Source: CoreBrand
Slide 19: PNC's Differentiation - Focus on Execution
PNC’s Differentiation – Focus on Execution Strengthen the brand Engage Employees Foster Innovation Create a sense of urgency
Slide 20: Summary
Summary Performance validates business model Investing for the future Differentiation to drive growth
Slide 21: 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 22: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix •Our ability to implement our business initiatives and strategies could affect our financial performance over the next several years. •Legal and regulatory developments could have an impact on our ability to operate our
Slide 23: Additional Information About The PNC/Sterling Financial Corporation Transaction
Additional Information About The PNC/Sterling Financial Corporation Transaction Appendix The PNC Financial Services Group, Inc. and Sterling Financial Corporation will be filing a proxy statement/prospectus and other relevant documents concerning the merger with the United States Securities and Exch
Slide 24: CMBS Supplemental Information
CMBS Supplemental Information Appendix Spread Volatility PNC CMBS Portfolio 14 Weekly CMBS Spread Volatility (03/29/05 – 12/04/07) High quality portfolio 12 11/19/07 -Internal assessment of 85%+ 10 AAA equivalent -Modest level of kick-outs 8 -Weighted average loan to 6 value of 72% with 08/01/07 con
Slide 25: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Earnings Summary – Nine Months Ended NINE MONTHS ENDED September 30, 2007 September 30, 2006 In millions, except per share data Adjustments, Net Diluted Adjustments, Net Diluted Pretax Income EPS Pretax Income EPS Net income, as reported $1,289 $3.85 $2,219 $7
Slide 26: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Income Statement Summary – For the Nine Months Ended September 30 NINE MONTHS ENDED September 30, 2007 September 30, 2006 In millions As Reported Adjustments As Adjusted (a) As Reported Adjustments As Adjusted (b) Net interest income $2,122 $2,122 $1,679 ($10)
Slide 27: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Income Statement Summary – For the Three Months Ended For the three months ended September 30, 2007 PNC PNC % Change vs. June 30, 2007 In millions As Reported Adjustments (a) As Adjusted Reported Adjusted Net interest income $761 $761 Loan net interest income
Slide 28: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Income Statement Summary – 2004 to 2006 BlackRock For the year ended December 31, 2006 PNC Deconsolidation and BlackRock PNC In millions As Reported Adjustments (a) Other Adjustments Equity Method As Adjusted Net interest income $2,245 $(10) $2,235 Provision f
Slide 29: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Income Statement Summary – 2004 to 2006 (continued) For the year ended December 31, 2004 BlackRock PNC Deconsolidation and BlackRock PNC In millions As Reported Other Adjustments Equity Method As Adjusted Net interest income $1,969 $(14) $1,955 Provision for c
Slide 30: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Business Segments Nine Months Ending September 30, 2007 Corporate & Retail Institutional Banking and Dollars in millions Banking Banking Other Other BlackRock PFPC Total Net interest income (expense) $1,517 $571 $48 $2,136 ($14) $2,122 Noninterest income 1,280
Slide 31: Peer Group of Super-Regional Banks
Peer Group of Super-Regional Banks Appendix Ticker 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 & Comp
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