Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — BancAnalysts Association of Boston Conference 2009
26 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Nov 6, 2009
Slide 1: The PNC Financial Services Group, Inc. BancAnalysts Association of Boston
Exhibit 99.1 The PNC Financial Services Group, Inc. BancAnalysts Association of Boston November 6, 2009
Slide 2: Cautionary Statement Regarding Forward-Looking Information and Adjusted Information
Cautionary Statement Regarding Forward-Looking Information and Adjusted Information This presentation includes “snapshot” information about PNC used by way of illustration. It is not intended as a full business or financial review and should be viewed in the context of all of the information made av
Slide 3: Key Messages
Key Messages Overview of PNC The changing credit markets PNC’s credit book Opportunities from PNC’s perspective PNC Is Well-Positioned to Take Advantage of Opportunities in the Marketplace. 3
Slide 4: A Powerful Franchise
A Powerful Franchise PNC Overview BlackRock (offices in 21 1 3Q09 U.S. Rank countries) th Deposits $184 billion 5 th Assets $271 billion 7 th Branches 2,553 5 th ATMs 6,463 5 CO KS OK TX Retail Residential Mortgage Footprint covering nearly 1/3 of One of the nation’s largest Global Investment Servic
Slide 5: 3Q09 Performance Review
3Q09 Performance Review PNC Overview Our business model performed well We believe the economy has stabilized The balance sheet remained well-positioned – further increased capital and reserves and maintained strong bank liquidity Pace of credit quality deterioration eased Strong revenue performance
Slide 6: Building a High Quality, Differentiated Balance Sheet
Building a High Quality, Differentiated PNC Balance Sheet Overview Change from Sept 30, 2009 Category (billions) Sept 30, June 30, Dec 31, Key Ratios 2009 2009 2008 Investment securities $54 $4 $11 Loans/Assets Total loans 161 (4) (15) 59% Other assets 56 (8) (16) Investment Total assets $271 ($8) (
Slide 7: Marketplace Credit Spreads
Credit Marketplace Credit Spreads Market Overview 600 Average spreads vs. LIBOR by rating AA Primary A Primary BBB Primary B 500 Primary BB Primary B Primary 400 BB Primary 300 BBB Primary 200 A Primary AA Primary 100 0 Oct-99 Oct-00 Oct-01 Oct-02 Oct-03 Oct-04 Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Cre
Slide 8: Increasing Bond Issuance & Decreasing Loan Issuance in the Market
Increasing Bond Issuance & Credit Market Decreasing Loan Issuance in the Market Overview $800 Leveraged loans High yield bonds Investment grade loans Investment grade bonds $700 $600 $500 $400 $300 $200 $100 $- Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2008 2009 The Collapse of the Leveraged Loan Market
Slide 9: PNC Loan Balances
PNC Loan Balances PNC’s Credit Book $175.5 $171.4 $180 $165.0 $160.6 Commercial loans down 14% from year end $120 Consumer loans down 1% from year end $60 Avg. originated loans and commitments to lend equal about $27 billion per qtr. $0 4Q08 1Q09 2Q09 3Q09 Despite Solid Loan Originations, Soft Deman
Slide 10: PNC Loan Portfolio
PNC Loan Portfolio PNC’s Credit Book Held for Investment (billions) 13% Highlights 10% Commercial Core portfolio of $141 billion real estate - Primarily in our footprint with a $21.4 Other consumer majority collateralized $16.5 - Relatively well balanced - No sector concentrations in commercial port
Slide 11: Relative Credit Risk Profile
Relative Credit Risk Profile PNC’s Credit Book Key 3Q09 metrics 1 4.00% 3.43% PNC Sept. 30, 2009 3.19% 3.20% 2.93% 2.99% 3.00% Reserves plus fair value marks 2 2.48% as a % of outstanding: 2.08% Commercial real estate 10% 2.00% 1.59% Commercial 5% Residential real estate 9% Consumer 3% 1.00% Total l
Slide 12: Commercial Real Estate (CRE)
Commercial Real Estate (CRE) PNC’s Credit Book CRE as a % of assets as of June 30, 2009 30% 1 The fair value marks on impaired CRE plus the allocated CRE allowance for losses as a % of total CRE outstandings was 10% as of Sept. 30, 2009 20% 16% 13% 14% 13% 13% 11% 9% 9% 9% 3% 3% JPM BAC PNC COF FITB
Slide 13: PNC Commercial Real Estate (CRE)
PNC Commercial Real Estate (CRE) PNC’s Credit Book PNC 3Q09 CRE loans by type Highlights Core CRE Portfolio Lodging Majority from larger national / regional 17% developers 4% Multifamily - Continuing to work closely with borrowers 11% 18% Residential Office - Current stress has been manageable devel
Slide 14: Midland Loan Services
Midland Loan Services Opportunities One of the leading third-party providers of The only company in the industry with the loan servicing, asset management and highest U.S. servicer and special servicer technology solutions for the commercial real ratings from Fitch and S&P estate finance industry. T
Slide 15: Commercial Real Estate Debt Market
Commercial Real Estate Debt Market Opportunities 1990 = $1.1 Trillion 2Q09 = $3.5 Trillion Holders Holders 23% 9% 45% Life Insurance Life 18% Insurance Companies Savings Cos. Institutions 6% Commercial Savings banks Institutions GSEs 5% GSEs Commercial 8% CMBS banks 4% Others CMBS 37% Others 13% 7%
Slide 16: CMBS Markets Remain Challenging
CMBS Markets Remain Challenging Opportunities $250 $45 $200 Total U.S. CMBS Issuances (left axis) $30 $150 Midland Servicing Portfolio Issuances (right axis) ($ billions) $100 $15 $50 $0 $0 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 $250 $40 $200 $30 Total U.S. C
Slide 17: Commercial Mortgage Maturities 2010-2011
Commercial Mortgage Maturities 2010-2011 Opportunities Estimated resolution for commercial mortgages serviced by Midland 28% Debt pay down required for qualification Qualify for bank / 46% insurance / agency Recapitalization refinance (REITs, funds, institutional investors, others) 14% Distressed /
Slide 18: Corporate & Institutional Banking Loan Spreads
Corporate & Institutional Banking Loan Spreads Opportunities PNC portfolio spreads above LIBOR 5.50% Asset based lending Real estate finance Corporate banking 4.80% 4.50% 3.53% 3.50% 2.83% 2.27% 2.50% 2.49% 2.06% 1.50% 1H06 2H06 1H07 2H07 1H08 2H08 1H09 3Q09 Loan Spreads in the C&IB Banking Segment
Slide 19: Substantial Cross Sell Opportunities
Substantial Cross Sell Opportunities Opportunities Illustration of credit only vs. cross sold relationship Credit only relationship 18% Cross sold relationship $130 $85 8% $33 $13 Revenue Economic Risk adjusted profit return on capital Assumptions: Metrics Credit only Cross sold DHE $5 MM $5 MM Outs
Slide 20: Proactively Managing the Balance Sheet
Proactively Managing the Balance Sheet Opportunities PNC Duration Fed Fund of Equity Effective Rate (At Quarter End) (At Quarter End) PNC 3Q09 NII Sensitivity 4 6% st 3 Effect on NII in 1 year from 5% gradual interest rate change 2 over following 12 months 1 4% 100 bps increase .9% 0 (1) 3% 100 bps
Slide 21: Summary
Summary PNC’s business model has performed well during the economic downturn PNC believes the economy has stabilized and the pace of our credit quality deterioration has eased PNC’s realistic opportunities for growth are expected to deliver significant value PNC Continues to Build a Great Company. 2
Slide 22: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information Appendix This presentation includes “snapshot” information about PNC used by way of illustration and is not intended as a full business or financial review. It should not be viewed in isolation but rather in the context of all of the informa
Slide 23: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix •Legal and regulatory developments could have an impact on our ability to operate our businesses or our financial condition or results of operations or our competitive position or reputation. Reputational impacts, in tur
Slide 24: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix •Our ability to achieve anticipated results from this transaction is dependent on the state going forward of the economic and financial markets, which have been under significant stress recently. Specifically, we may inc
Slide 25: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix December 31, 2008 In millions, for the three months ended Pretax Net income Reported net income (loss) ($246) National City conforming provision for credit losses $504 328 Net income (loss) excluding National City conforming $82 provision for credit losses PNC
Slide 26: Peer Group of Banks
Peer Group of Banks Appendix Ticker The PNC Financial Services Group, Inc. PNC BB&T Corporation BBT Bank of America Corporation BAC Capital One Financial, Inc. COF Comerica Inc. CMA Fifth Third Bancorp FITB JPMorgan Chase JPM KeyCorp KEY M&T Bank MTB Regions Financial Corporation RF SunTrust Banks,
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