Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Q2 2008 Earnings Presentation
16 slides from Pnc Financial Services Group, Inc. (the)'s earnings presentation, Jul 17, 2008
Slide 1: The PNC Financial Services Group, Second Quarter 2008 Earnings Conference Call
Exhibit 99.2 The PNC Financial Services Group, Inc. Second Quarter 2008 Earnings Conference Call July 17, 2008
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: Business Model Performed Well
Business Model Performed Well Delivered strong second quarter 2008 results 1 - Reported earnings of $1.45 per diluted share, $1.37 adjusted - Diversified revenue growth created positive operating leverage Key Messages - Well-positioned balance sheet resulted in strong revenue growth - Asset quality
Slide 4: Differentiated Balance Sheet
Differentiated Balance Sheet Category (billions) June 30, % of 2008 assets Cash and short-term investments $9.2 6% Loans held for sale 2.3 2 Securities available for sale 31.0 22 Loans, net of unearned income 73.0 51 Other assets 27.3 19 Total assets $142.8 100% Loans, net of unearned income % 90 da
Slide 5: Credit Quality Migration Remained Manageable
Credit Quality Migration Remained Manageable 1 Net charge-offs to average loans Allowance for loan and lease losses to loans 2 1.00% 1.40% 0.90% 1.35% 0.80% 1.30% 0.70% 1.35% 1.25% 0.60% 0.62% 1.20% 1.22% 0.50% 0.57% 1.15% 1.21% 0.40% 0.49% 1.10% 0.30% 1.10% 1.09% 1.09% 1.05% 0.20% 0.27% 0.30% 0.10%
Slide 6: Staying Liquid and Building Capital Flexibility
Staying Liquid and Building Capital Flexibility Available Liquidity 1 Tier 1 Capital Ratio 8.5% $30B 8.1% Target $27B $27B 7.7% Range 7.5% 6.8% 2 4Q07 1Q08 2Q08 4Q07 1Q08 2Q08 PNC Is Well-Positioned in Terms of Liquidity and Capital Flexibility. Numbers at period end. (1) Unused borrowing capacity.
Slide 7: Strong and Diverse Revenue Growth
Strong and Diverse Revenue Growth Contribution to total revenue Fund 2Q08 servicing Change vs. Deposit and 1Q08 2Q07 Asset 11% other net interest management income Net interest income 10% Consumer Total 29% +14% +32% services and revenue deposit 12% $2.0 billion Noninterest income charges +10% +9% 9
Slide 8: Creating Positive Operating Leverage
Creating Positive Operating Leverage For the six months Compound Annual Growth ended June 30 $7 (2004-2007, as adjusted)¹ 2008 vs. 2007 $6 Revenue Revenue +12% +16% $5 $4 Expense Expense +9% +9% $3 $1.7 $2 $1.2 $1.3 $1.5 Operating Operating Leverage Leverage $1 +3% +7% $0 2004 2005 2006 2007 Adjuste
Slide 9: Strategic Growth Initiatives
Strategic Growth Initiatives Markets Sales across franchise at or above goals New markets outperforming expectations Corporate banking posting excellent cross-sell results Fund servicing revenue pipeline strong ARCS providing diversity with record production levels Innovative Products and Solutions
Slide 10: Product Innovation: Capturing Gen Y
Product Innovation: Capturing Gen Y 10
Slide 11: 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 12: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) Appendix Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through the effective use of third-party insurance, deriva
Slide 13: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix % Change for 2Q08 vs. In millions, for the three months ended June 30, 2008 March 31, 2008 June 30, 2007 March 31, 2008 June 30, 2007 Net interest income $977 $854 $738 14% 32% Loan net interest income 396 337 274 18% 45% Deposit and other net interest income
Slide 14: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, 2007 PNC PNC In millions As Reported Adjustments (a) As Adjusted Net interest income $2,915 $2,915 Noninterest income 3,790 $131 3,921 Total revenue 6,705 131 6,836 Provision for credit losses 315 (45) 270 Noninterest expense 4,
Slide 15: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, 2005 BlackRock PNC Deconsolidation and BlackRock PNC In millions As Reported Other Adjustments Equity Method As Adjusted Net interest income $2,154 $(12) $2,142 Noninterest income 4,173 (1,214) $163 3,122 Total revenue 6,327 (1,
Slide 16: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix For the year ended December 31, as adjusted Adjusted In millions 2004 2005 2006 2007 '04-'07 CAGR Adjusted net interest income $1,955 $2,142 $2,235 $2,915 14% Adjusted noninterest income 2,928 3,122 3,572 3,921 10% Adjusted total revenue 4,883 5,264 5,807 6,83
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