Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Goldman Sachs Cross Country Field Trip (March 2005)
37 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Mar 29, 2005
Slide 1: The PNC Financial Services Group, Inc.
EXHIBIT 99.1 The PNC Financial Services Group, Inc. Goldman Sachs Cross Country Field Trip Hoboken, NJ March 29, 2005
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: Today's Discussion
Today’s Discussion Regional Community Banking Strategies for accelerating growth Neil Hall Q&A with leadership team Joe Rockey John Rogers Jeff Schmidt Ellen van der Horst Branch visit
Slide 4: Regional Community Banking: PNC's Largest Business
Regional Community Banking PNC’s Largest Business High Return, Moderate Risk Business Focused on Accelerating Growth Contribution to 2004 PNC Consolidated Earnings of $1.2 Billion Other Businesses 58% Regional Community Banking 42% 2004 Financial Highlights Earnings $504 million Earnings growth 2004
Slide 5: Regional Community Banking Franchise
Regional Community Banking Franchise 2004 Revenue—$2.1 Billion Regional Community Banking 2004 Revenue Contribution Consumer 67% Small Business 23% 10% Other Businesses See Appendix for GAAP reconciliation information 2004 Business Highlights Serves 2.2 million relationships 2 million consumer house
Slide 6: Regional Community Banking - Keys to Our Success
Regional Community Banking -Keys to Our Success Upgrading front-line employees Expanding branch distribution and touch points Creating a distinctive value proposition
Slide 7: Focusing on Checking Relationships
Focusing on Checking Relationships Best Source of Sustainable Value Is Growing Checking Relationships 97% of businesses and households have a checking account need 70%+ consider their checking account bank to be their primary financial services provider Favorable economics: Fee revenues and low-cost
Slide 8: Accelerating Performance: Acquisition
Accelerating Performance Acquisition Growth Retention
Slide 9: Strategies to Increase Branch Sales
Strategies to Increase Branch Sales Acquisition Promotions Linked to Growing Checking Relationships Consumer Promotion Home Equity Tactic Direct marketing to new and existing PNC customers Offer 50 bps lower than “street rate” when part of a package and direct deduct of payment from checking account
Slide 10: Expanding the Contribution from Alternative Channels
Expanding the Contribution from Alternative Channels Acquisition Sources of Consumer Client Acquisition Consumer Checking Relationships Acquired thousands 200 150 100 50 0 +68% +40% 2000 2004 Alternative Delivery Channels Branches Growth in Selected Alternative Delivery Channels 2004 vs 2000 Workpla
Slide 11: Targeting Small Businesses
Targeting Small Businesses Acquisition Targeting Process—Example Number of Essex, NJ Region Prospects All Businesses 13,678 Targeted 10,645 Industries 5,335 Proximity Client Profit 3,667 Potential Prioritizing prospects improves efficiency of calling efforts Relationship Acquisition Small Business D
Slide 12: Growing a Valuable Core Deposit Base
Growing a Valuable Core Deposit Base Acquisition Focused on Increasing Checking Relationships Checking Customer Base millions 2.0 1.5 1.0 0.5 0.0 CAGR 7% 2001 2002 2003 2004 Small Business Consumer Average Demand Deposits $ billions $16.0 $12.0 $8.0 $4.0 $0.0 10% CAGR 2001 2002 2003 2004
Slide 13: Accelerating Performance: Retention
Accelerating Performance Acquisition Growth Retention
Slide 14: Making Banking Easier for Our Customers Every Day
Making Banking Easier for Our Customers Every Day Deliver our customer promise Increase convenience Provide proactive problem resolution Measure with continuous customer feedback Mystery shopping Customer surveys Retention Improving Customer Satisfaction Overall Satisfaction with PNC % Satisfied (Sc
Slide 15: Value-Added Services Enhance Retention
Value-Added Services Enhance Retention Retention We are focused on activation Debit cards Online banking Direct deposit Online bill payment DDA Households Using Online Banking thousands 750 700 650 600 550 500 450 Increase 20% Dec 31 Mar 31 Jun 30 Sep 30 Dec 31 2003 2004 Penetration Rates 41% 42% 43
Slide 16: Cross-Channel Customer Experience
Cross-Channel Customer Experience Retention Workplace Banking Example Team-based approach that leverages channel capabilities Initial Proposal Small business and wholesale relationship managers Dedicated workplace bankers On-Site Visits Staffed by PNC employees Account opening applications Ongoing f
Slide 17: Keeping More Customers
Keeping More Customers Retention Continue to Improve on Top-Tier Checking Relationship Retention Rates Consumer Checking Retention 100% 90% 80% 70% Goal 93% 2002 2003 2004 Small Business Checking Retention 100% 90% 80% 70% Goal 87% 2002 2003 2004
Slide 18: Accelerating Performance: Growth
Accelerating Performance Acquisition Growth Retention
Slide 19: Comprehensive View of the Client
Comprehensive View of the Client Growth Client Data Consistent Across All Channels and Delivery Points Branch Personal Computer Call Center ATM Propensity to Buy Activity Log
Slide 20: Building a Relationship-Driven Sales Force
Building a Relationship-Driven Sales Force Growth Additions in 2004 to accelerate growth 490 branch managers 51 licensed investment professionals 54 business bankers Increasing Sales Force Investment Sales-Oriented FTEs 6,000 5,000 4,000 3,000 2,000 1,000 0 Increase 10% 2003 2004 Sales-oriented FTEs
Slide 21: Selling More to Customers
Selling More to Customers Growth Proven Success in Deepening Checking Relationships Multi-Service Checking Customers millions 1.25 1.00 0.75 0.50 0.25 0.00 Small Business Consumer 10% CAGR 5% CAGR 2001 2002 2003 2004 Deepening Relationships Small Business 25% loan growth over 2003 34% increase in me
Slide 22: Our Model is Working
Our Model is Working Execution is Driving Improved Customer Trends and Financial Performance Track record of consistent checking relationship growth Continued improvement in customer satisfaction Increases in loans, deposits and sustainable fee revenue Regional Community Banking Revenue $ millions $
Slide 23: New Branch Design Makes Banking Easier
New Branch Design Makes Banking Easier
Slide 24: Disciplined Expansion
Disciplined Expansion 20 in-store and de novo branch locations opened in 2004 90% at or ahead of proforma targets Successful integration of UnitedTrust Retention equal to footprint average Increased cross-sell of home equity, investments and on-line banking Increasing UnitedTrust Production Monthly
Slide 25: Opportunity to Improve Efficiency
Opportunity to Improve Efficiency Increase same-store sales Capture value from expanding sales force Leverage customer segmentation Affluent Small business Reduce costs Efficiency Ratio 2004 U.S. Bancorp* 44% Mercantile Bancshares Corporation 50% Wachovia Corporation* 52% National City Corporation*
Slide 26: Expanding into Attractive Washington, DC Market
Expanding into Attractive Washington, DC Market Strategic Focus Enter market aggressively Expand distribution Invest in Small Business Invest in people/ management team Targeted Branch Expansion Maryland Virginia Washington, DC Existing Riggs Branch Locations Targeted Sites
Slide 27: Summary
Summary Regional Community Banking – Making Banking Easy Accelerating our relationship-driven model Leveraging a high-return, moderate-risk franchise Executing strategies to drive growth Expanding into attractive markets Focused on improving efficiency
Slide 28: Overview of Hoboken Branch
Overview of Hoboken Branch Relocated to a new location in November 2002 Performance since 2002 Increased deposits $32 million or 54% annually Increased market share to 5.4% from 3.0% Added over 1,000 net DDA relationships or a 50% increase What to look for: Branch design Customer experience Informat
Slide 29: Q&A with Leadership Team
Q&A with Leadership Team Joe Rockey Executive Vice President Branch Distribution John Rogers Chief Financial Officer Jeff Schmidt Senior Vice President Manager of Business Banking Ellen van der Horst Chief Marketing Officer
Slide 30: Appendix
Appendix
Slide 31: 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 and/or other matters regarding or affecting PNC that are forward-looking stat
Slide 32: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Customer acceptance of our products and services, and our customers’ borrowing, repayment, investment and deposit practices; The impact on us of changes in the extent of customer or counterparty delinquencies, bankruptcies or def
Slide 33: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) The integration into PNC of the Riggs business and operations that we acquire, which will include conversion of Riggs’ different systems and procedures, may take longer or be more costly than anticipated and may have unanticipate
Slide 34: 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 35: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Earnings and Return on Capital Twelve Months Ended December 31 2004 2003 Earnings/ Earnings Return on Earnings/ $ millions (Loss) Contribution Capital * (Loss) Banking businesses Regional Community Banking $ 504 42% 21% $ 477 Wholesale Banking 443 37% 26% 391
Slide 36: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Revenue* Three Months Ended $ millions 3/31/04 6/30/04 9/30/04 12/31/04 2004 Banking businesses Regional Community Banking $ 501 $ 511 $ 525 $ 536 $ 2,073 Wholesale Banking 317 322 299 333 1,271 PNC Advisors 170 154 151 154 629 Total banking businesses 988 987
Slide 37: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Average Loans and Deposits 2004 $ millions Loans Deposits Banking businesses Regional Community Banking $ 17,969 $ 37,161 Wholesale Banking 17,133 7,527 PNC Advisors 2,347 2,264 Total banking businesses 37,449 46,952 Other 3,496 2,745 Total consolidated $ 40,9
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