Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Lehman Brothers 2004 Financial Services Conference
29 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Sep 14, 2004
Slide 1: The PNC Financial Services Group, Inc.
EXHIBIT 99.1 The PNC Financial Services Group, Inc. Lehman Brothers 2004 Financial Services Conference New York, NY September 14, 2004
Slide 2: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking 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 statements are necessari
Slide 3: Key Messages
Key Messages PNC is .... A diversified financial services company with a strong foundation for growth Positioned to accelerate growth An attractive valuation opportunity
Slide 4: Banking Industry – Historical Perspective
Banking Industry – Historical Perspective Weak Demand and Falling Prices Commercial & Industrial Loans Outstanding $ trillions $1.1 $1.0 $0.9 $0.8 2001 2002 2003 2004 Interest Rate Environment 3 month Libor 6.0% 4.0% 2.0% 0.0% 2001 2002 2003 2004 Source: Federal Reserve Board
Slide 5: Impact of Our Actions
Impact of Our Actions Net Interest Income $ billions $4.0 $3.0 $2.0 $1.0 $0.0 2001 2002 2003 1H04 Annualized Noninterest Income $ billions $4.0 $3.0 $2.0 $1.0 $0.0 2001 2002 2003 1H04 Annualized
Slide 6: Business Results are Gaining Momentum
Business Results are Gaining Momentum Six Months Ended June 30 $ millions Earnings (Loss) 2004 2003 Growth Return on Capital/Equity PNC banking businesses $520 $449 16% 24% BlackRock 103 74 39% 27% PFPC 33 29 14% 25% Total business segment earnings 656 552 19% 24% Minority interest in income of Blac
Slide 7: State Street Research Delivers Both Product Extension & Scale Benefits
State Street Research Delivers Both Product Extension & Scale Benefits BlackRock will have $366 billion pro-forma assets under management Establishes scale in U.S. equities $33 billion projected equity AUM Products across styles/cap ranges Expands private client business $26 billion projected open-e
Slide 8: Built a Conservative Credit Risk Profile
Built a Conservative Credit Risk Profile PNC Compares Favorably to Banks Rated One Level Higher June 30, 2004 PNC A-/A2 S&P A Moody’s A1 Nonperforming loans to loans 0.43% 0.63% 0.53% Net charge-offs to average loans (YTD) 0.47% 0.35% 0.32% Allowance for loan and lease losses to nonperforming loans
Slide 9: Positioned for Rising Interest Rates
Positioned for Rising Interest Rates A Fee Driven Bank… Noninterest Income to Total Revenue BK 73% PNC 65% FITB 49% WB 47% NCC 45% WFC 43% STI 41% USB 41% KEY 40% BBT 40% That’s Core Funded… Loans to Deposits BK 63% WB 71% PNC 78% STI 97% FITB 98% BBT 101% WFC 101% USB 102% NCC 116% KEY 117% With Fl
Slide 10: Key Messages
Key Messages PNC is .... A diversified financial services company with a strong foundation for growth Positioned to accelerate growth An attractive valuation opportunity
Slide 11: Growing a Valuable Core Deposit Base
Growing a Valuable Core Deposit Base Focused on Increasing and Deepening Checking Relationships Sources of Customer Acquisition Checking Relationships Acquired 100% 50% 0% 2000 2004 24% 31% Alternative Delivery Channels Branches Consistent Growth in Checking Customer Base millions 2.0 1.5 1.0 0.5 0.
Slide 12: Providing Lower Cost Funding
Providing Lower Cost Funding PNC’s High % of Noninterest-Bearing Funding Noninterest-Bearing Deposits to Average Earning Assets PNC Industry 20% 18% 16% 14% 12% 10% 2001 2002 2003 2004 PNC’s Deposit Funding Advantage Cost of Total Deposits PNC Industry 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 2001 2002 2003 20
Slide 13: Growing High Quality Home Equity Loan Portfolio
Growing High Quality Home Equity Loan Portfolio Average Home Equity Loans $ billions $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0 2001 2002 2003 2Q04 Home Equity Portfolio Credit Statistics First lien positions 51% Weighted average: Loan to value 71% FICO scores 717
Slide 14: Capturing the Small Business Opportunity
Capturing the Small Business Opportunity Loans $ billions $1.5 $1.0 $0.5 $0.0 ‘01 ‘02 ‘03 ‘04 12/01 12/02 12/03 6/04 Loan Production Outstandings—Average Deposits $ billions $3.0 $2.0 $1.0 $0.0 2001 2002 2003 6/04 December Average Average Noninterest-bearing DDA Money market Loan and deposit data ex
Slide 15: Commercial Loan Demand Beginning to Return
Commercial Loan Demand Beginning to Return Wholesale Banking Loans $ billions $18.0 $17.0 $16.0 $15.0 $14.0 2002 2003 2004
Slide 16: Winning Clients with Value-Added Technology Products
Winning Clients with Value-Added Technology Products Treasury Management Product Group One of the largest bank treasury management providers Rated #1 in quality by Phoenix- Hecht large corporate survey Top ten provider of corporate purchasing cards A/R Advantage—Building a Distinctive Expertise in R
Slide 17: PNC Advisors – Significant Market Opportunity
PNC Advisors – Significant Market Opportunity PNC’s Wealth Market Washington MSA would expand PNC Advisors’ wealth market by 27% 462,000 Wealth Households Existing Footprint Opportunity Washington MSA Opportunity PNC Advisors Clients PNC Clients Referrals from Regional Community and Wholesale Bankin
Slide 18: Expanding Presence in Growing Markets
Expanding Presence in Growing Markets 60% of PNC Branches Located between New York City and Washington, DC Riggs Franchise PNC Branch Locations Source: SNL Financial
Slide 19: Riggs Integration Plan Progressing
Riggs Integration Plan Progressing Leverages PNC’s demonstrated integration capabilities Delivered on United National systems integration and cost save promises Sales results above United National’s run-rate and meeting expectations Integration leader and teams engaged
Slide 20: Elevating Our Approach to Balance Sheet Management
Elevating Our Approach to Balance Sheet Management GOAL Consistently outperform benchmark returns while effectively managing risk Strengthened treasury team Leveraging BlackRock Solutions® capabilities Opportunity Capitalize on rising interest rate environment to enhance investment portfolio returns
Slide 21: Key Messages
Key Messages PNC is A diversified financial services company with a strong foundation for growth Positioned to accelerate growth An attractive valuation opportunity
Slide 22: PNC Valuation Opportunity
PNC Valuation Opportunity 2004 First Call Estimated Earnings $ millions Actual / Implied Market Capitalization $ billions 2004 P/E PNC $1,216 $15.0 12.3x BlackRock $190 $4.8 25.1x PNC excluding BlackRock * $1,081 $11.6 10.7x KBW Bank Index Average 13.9x First Call estimated earnings for PNC and Blac
Slide 23: Every day is an opportunity to do more
Every day is an opportunity to do more.sm
Slide 24: Appendix
Appendix
Slide 25: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information 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, capital levels, asset quality or other future financial or business performa
Slide 26: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) (8) how we choose to redeploy available capital, including the extent and timing of any share repurchases and acquisitions or other investments in our businesses; (9) the impact, extent and timing of technological changes, the ad
Slide 27: Additional Information About the Proposed Riggs National Corporation Acquisition
Additional Information About the Proposed Riggs National Corporation Acquisition The PNC Financial Services Group, Inc. and Riggs National Corporation have filed a proxy statement/prospectus and will file other relevant documents concerning the merger with the United States Securities and Exchange C
Slide 28: Peer Group of Super-Regional Banks
Peer Group of Super-Regional Banks Appendix Ticker BB&T Corporation BBT The Bank of New York Company, Inc. BK Fifth Third Bancorp FITB KeyCorp KEY National City Corporation NCC The PNC Financial Services Group, Inc. PNC SunTrust Banks, Inc. STI U.S. Bancorp USB Wachovia Corporation WB Wells Fargo &
Slide 29: Rating Agency Peer Groups
Rating Agency Peer Groups Appendix Standard & Poor’s Ticker BB&T Corporation BBT Comerica Incorporated CMA National City Corporation NCC Regions Financial Corporation RF Wachovia Corporation WB S&P peer group includes regional banks with assets greater than $25 billion and a long-term issuer rating
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