Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Goldman Sachs Bank CEO Conference 2004
30 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Dec 7, 2004
Slide 1: The PNC Financial Services Group, Inc.
EXHIBIT 99.1 The PNC Financial Services Group, Inc. Goldman Sachs Bank CEO Conference New York, NY December 7, 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: 2004 Accomplishments and Financial Highlights
2004 Accomplishments Improved returns on capital Increased client acquisition and retention Continued strong asset quality trends Maintained balance sheet flexibility Integrated United Trust successfully Financial Highlights Nine Months Ended September 30, 2004 Net income $890 million EPS $3.13 ROCE
Slide 4: Building on Our Strengths and Seizing Our Opportunities
Building on Our Strengths and Seizing Our Opportunities What we’re good at… Growing low-cost deposit relationships Generating loans Maintaining strong risk profile Expanding differentiated set of fee-based businesses nationally and internationally And the opportunities/challenges we see… Managing ri
Slide 5: Growing a Valuable Core Deposit Base
Growing a Valuable Core Deposit Base Focused on Increasing and Deepening Checking Relationships millions 2.0 1.5 1.0 0.5 0.0 6% CAGR 2000 2001 2002 2003 9/30/04 Single-service Multi-service Regional Community Banking Average Demand Deposits $ billions $16 $12 $8 $4 $0 8% CAGR 2000 2001 2002 2003 YTD
Slide 6: Differentiated by Lower Cost Funding
Differentiated by Lower Cost Funding PNC’s High% of Noninterest-Bearing Funding Noninterest-Bearing Deposits to Average Earning Assets 2001 2002 2003 2004 22% 20% 18% 16% 14% 12% PNC Industry PNC’s Deposit Funding Advantage Cost of Total Deposits 2001 2002 2003 2004 5% 4% 3% 2% 1% 0% PNC Industry In
Slide 7: Capturing the Value of Time Deposits in a Rising Rate Environment
Capturing the Value of Time Deposits in a Rising Rate Environment Regional Community Banking Average Certificates of Deposit $ billions Average Certificates of Deposit $10 $9 $8 $7 Average Federal Funds Rate 1.75% 1.50% 1.25% 1.00% 0.75% 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04
Slide 8: An Opportunity: Asset Yields
An Opportunity: Asset Yields Quarter Ended September 30, 2004 PNC Peer Group Median Yield on earning assets 4.44% 5.01% Funding 1.25% 1.52% Net interest margin 3.19% 3.49% Provision to earnings assets 0.08% 0.16% Provision-adjusted net interest margin 3.11% 3.33% Source: SNL DataSource Peer group of
Slide 9: Capitalizing on Improving Loan Demand
Capitalizing on Improving Loan Demand Relative Change in PNC Wholesale Banking Loans Compared to Industry PNC Wholesale Loans Industry C&I Loans 2002 2003 2004 110% 100% 90% 80% PNC Wholesale loans outstanding exclude reclassification of Market Street Funding purchased customer receivables and is re
Slide 10: Well Positioned for Rising Interest Rates
Well Positioned for Rising Interest Rates Lower Mortgage Exposure Short-Term Securities Portfolio Weighted-Average Life of Securities Portfolio KEY 2.7 years PNC 2.8 STI 3.8 FITB 4.3 WFC 5.1 WB 5.2 USB 5.3 BBT Not disclosed BK Not disclosed NCC Not disclosed Weighted-average life as disclosed in com
Slide 11: Consolidated Revenue Trends Improving
Consolidated Revenue Trends Improving Net Interest Income (Taxable-equivalent basis) $ millions $610 $590 $570 $550 $530 $510 $490 $470 $450 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 Revenue Mix $ billions $4.0 $3.5 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 2001 2002 2003 YTD 9/30/04 Annu
Slide 12: Fee-Based Businesses Differentiate PNC
Fee-Based Businesses Differentiate PNC Noninterest Income to Total Revenue 80% 70% 60% 50% 40% 30% 20% 10% 0% BK PNC NCC WB FITB USB WFC STI KEY BBT Information for the nine months ended 9/30/04; PNC amounts calculated in the Appendix Source: SNL DataSource BlackRock PFPC Banking & Other
Slide 13: BlackRock – A Growth Engine
BlackRock – A Growth Engine Earnings $ millions $200 $150 $100 $50 $0 2002 2003 2004 Nine Months Ended September 30 2004 excludes $57 million after-tax impact from LTIP charge and is reconciled to GAAP in the Appendix Assets under management $ billions $400 $300 $200 $100 $0 $246 $294 $52 $323 $375
Slide 14: PFPC – Core Trends Improving
PFPC – Core Trends Improving Earnings $ millions Reported earnings Adjusted earnings $70 $60 $50 $40 $30 $20 $10 $0 2002 2003 2004 Nine Months Ended September 30 Servicing Statistics Nine Months Ended September 30 2004 % Change vs 2003 Assets serviced ($ billions) Accounting / administration $667 +7
Slide 15: PNC Advisors – Significant Market Opportunity
PNC Advisors – Significant Market Opportunity PNC Millionaire Clients PNC Bank Clients PNC Advisors Clients PNC Advisors Referrals from Regional Community Banking up 49% year over year Resultant sales up 193% year over year Source: Axiom
Slide 16: Treasury Management: Winning Clients with Value-Added Technology Products
Treasury Management Winning Clients with Value-Added Technology Products PNC Product Growth vs Industry 2003 vs 2002 Industry PNC P-Card purchase volume 20% 38% Electronic data interchange revenue 12% 23% B2B lockbox revenue (1)% 15% Source for industry growth in P-Card is Visa U.S.A. Source for ind
Slide 17: Improving the Revenue/Expense Relationship
Improving the Revenue/Expense Relationship Efficiency Ratio for Nine Months Ended September 30, 2004 Efficiency Ratio PNC reported 68% Excluding PFPC & BlackRock 63% Proforma revenue generated by: Increasing securities yield to peer median 61% Growing loans to 100% of deposits 58% Efficiency ratio r
Slide 18: Driving Efficiency Improvements
Driving Efficiency Improvements $ millions Expense Savings from Efficiency Initiatives Benefit in 2003 Benefit in 2004 Expected in 2005 Banking businesses $37 $47 $29 PFPC 51 33 7 Other 12 10 4 Total expense savings $100 $90 $40
Slide 19: Summary
Summary We’ve accomplished a great deal in 2004 Our businesses have executable plans to drive growth We’re well positioned for rising interest rates
Slide 20: Appendix
Appendix
Slide 21: 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 22: 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 23: 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 24: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Wholesale Banking Loans Outstanding * $ millions Three Months Ended Total Wholesale Banking Loans—Market Street Funding Loans = Wholesale Banking Loans Outstanding Excluding Market Street 9/30/03 $17,478 $2,481 $14,997 12/31/03 16,441 2,223 14,218 3/31/04 16,7
Slide 25: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Net Interest Income $ millions 2001 1Q02 3Q02 2Q02 4Q02 2002 Net interest income, GAAP basis $2,262 $590 $555 $528 $524 $2,197 Taxable-equivalent adjustment 16 3 3 4 3 13 Net interest income, taxable-equivalent basis $2,278 $593 $558 $532 $527 $2,210 1Q03 3Q03
Slide 26: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Noninterest Income to Total Revenue Nine Months Ended 9/30/04 $ millions Noninterest Income Consolidated Total Revenue* Noninterest Income to Consolidated Total Revenue BlackRock $537 13.0% PFPC 602 14.5 Banking businesses 1,337 32.3 Other 183 4.4 Total consol
Slide 27: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix BlackRock Adjusted Earnings $ millions Nine Months Ended 9/30/04 Net income, GAAP basis $93 After-tax impact of LTIP charge* 57 Net income, adjusted $150 *LTIP charge reflects the recognition of expenses associated with BlackRock’s long-term retention and ince
Slide 28: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix PFPC Adjusted Earnings $ millions Nine Months Ended September 30 2002 2003 2004 Net income, GAAP basis $60 $46 $50 Accretion of discounted contract liability* (16) (15) (7) Reduction in facilities consolidation reserve originally established in 2001** (11) Ren
Slide 29: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Efficiency Ratio for Nine Months Ended September 30, 2004 $ millions Nine Months Ended 9/30/04 Net Interest Income Noninterest Income Noninterest Expense Total Revenue Efficiency Ratio PNC, GAAP basis $1,466 $2,659 $4,125 $2,786 68% Less: BlackRock (27) (537)
Slide 30: Peer Group of Super-Regional Banks
Appendix Peer Group of Super-Regional Banks 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 &
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