Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Goldman Sachs Financial Services Conference 2009
27 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Dec 8, 2009
Slide 1: The PNC Financial Services Group, Inc. Goldman Sachs Financial Services Conference
Exhibit 99.1 The PNC Financial Services Group, Inc. Goldman Sachs Financial Services Conference December 8, 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 PNC’s business model has performed well in 2009 PNC is well-positioned to navigate the uncertain environment PNC has realistic opportunities for growth PNC’s Business Model Has Delivered Solid Results and Is Expected to Deliver Growth During the Economic Recovery. 3
Slide 4: 2009 Highlights
Business 1 2009 Highlights Model Performance - 2009 Continued to transition the balance sheet by: - Realigning our deposit mix - Maintaining strong bank liquidity - Repositioning the investment securities portfolio - Increasing reserves - Strengthening capital ratios Posted year-to-date net income o
Slide 5: 2009 National Recognition
Business 2009 National Recognition Model Performance - 2009 “BusinessWeek 50” top performing companies Most Admired Companies, Fortune magazine One of America’s Most Shareholder-Friendly Companies, Institutional Investor magazine 100 Best Companies for Working Mothers, Working Mother Top 50 Companie
Slide 6: An Environment of Change
Economic, An Environment of Change Regulatory and Operating Environment Economic environment - Subdued recovery - Unemployment - Interest rates Regulatory environment - PNC’s culture and principles - Impact on competitors - Consumer and small business needs Operating environment - Changing consumer
Slide 7: PNC's Framework for Success
PNC’s PNC’s Framework for Success Plans for Growth PNC Business September 30, Key Metrics Target Action Plans Model 2009 Loan to deposit Maximize credit portfolio value Staying core ratio 87% 80%-90% Reposition deposit gathering funded (as of) strategies Provision to Focus “front door” on risk-adjus
Slide 8: Realistic Opportunities for Growth
PNC’s Realistic Opportunities for Growth Plans for Growth Revenue Expense Credit Leverage product Exceed cost saves Return to a depth, cross sell and normalize moderate risk capabilities, expenses profile balance sheet and improved markets PNC Is Well-Positioned for Growth. 8
Slide 9: Product Sales Across the Franchise
PNC’s Product Sales Across the Franchise Plans for Growth Sept. 09 YTD annualized sales contribution by region Sales highlights Total franchise YTD09 sales 130% of YTD goal Legacy PNC Products 3Q09 sales up 21% vs. 1Q09 markets ¹ 61% Corporate Banking Legacy PNC markets¹ Wealth YTD09 sales 143% of Y
Slide 10: Cross-Sell Across the Franchise
PNC’s Cross-Sell Across the Franchise Plans for Growth % of year-to-date cross sell goal through September 30, 2009 Treasury management Capital markets 137% 116% 113% 114% 118% 79% Legacy National City markets ¹ Legacy PNC markets ² Total PNC PNC Is Leading the Way in Delivering the Brand to Our Acq
Slide 11: Retail and Mortgage Banking Opportunities
PNC’s Retail and Mortgage Banking Opportunities Plans for Growth University banking potential Leveraging mortgage banking Estimated # Incremental value of a Legacy PNC mortgage of students relationship vs. a non-mortgage relationship HH with multiservices +64% 2.0 million Other potential Average dep
Slide 12: Balance Sheet Management
PNC’s Balance Sheet Management Plans for Growth PNC Duration Fed Funds 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 decr
Slide 13: Integration Cost Savings
PNC’s Integration Cost Savings Plans for Growth Captured cost saves Integration cost savings highlights $200 Year-to-date cost savings of more than $460 million Implemented common vendor and expense policies and approval guidelines $140 Implementing multi-year plan to help $120 maximize the value of
Slide 14: 3Q09 Reserves, Net Charge-offs
PNC’s 3Q09 Reserves, Net Charge-offs Plans for Growth Reserves to total loans / net Reserves / total loans charge-offs to average loans ¹ PNC September 30, 2009 JPM 4.7% PNC 1.9 Loss coverage ² : COF 4.7% MTB 1.5 Commercial real estate 10% FITB 4.6% BBT 1.3 Commercial 5% KEY 4.0% FITB 1.3 Residentia
Slide 15: Capital Ratios
PNC’s Capital Ratios Plans for Growth Tier 1 common ratio Tier 1 risk-based ratio Highlights PNC capital ratios already reflect 10.9% impact of fair value marks – as 5.5% 10.5% of September 30, 2009, fair 5.3% 10.0% value marks 1were 9.7% approximately $6.6 billion 4.8% 4.9% Increased common equity
Slide 16: Getting from Here to There
PNC’s Getting from Here to There Plans for Growth Credit Improvement in Levers Expense credit costs Integration cost Revenue save capture Revenue growth 1.30% enhancements return on average .62% assets return on Realistic average opportunities to reach assets tactical goal of 1.30% ROAA Sept 30, Eco
Slide 17: Summary
Summary PNC performance during the recession validates our business model PNC’s execution leaves us well-positioned to navigate the changing environment PNC’s realistic opportunities for growth are expected to deliver significant value PNC Continues to Build a Great Company. 17
Slide 18: 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 19: 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 turn
Slide 20: 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 incu
Slide 21: Balance Sheet Overview
Balance Sheet Overview Appendix 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) ($20) securities/Assets 20% Trans
Slide 22: Loan Portfolio
Loan Portfolio Appendix Held for Investment (billions) 13% Highlights 10% Core portfolio of $141 billion Commercial real estate - Primarily in our footprint with a $21.4 Other majority collateralized consumer $16.5 - Relatively well balanced - No sector concentrations in commercial portfolio - Core
Slide 23: Credit Quality Trends
Credit Quality Trends Appendix 3Q09 2Q09 1Q09 30 – 89 days $2,380 $2,195 $2,136 Accruing loans past Change from prior quarter 8% 3% 11% 1 due (millions, except 90 days or more $875 $1,043 $501 percentages) Change from prior quarter (16%) 108% 27% Commercial lending $3,866 $3,226 $2,547 Nonperforming
Slide 24: Pretax Pre-Provision Earnings
1 Pretax Pre-Provision Earnings Appendix September 30 Nine months ended Three months ended 2009 $11.9 Revenue Expense Pretax pre-provision earnings Provision $7.4 (billions) $4.0 $4.5 $2.4 $2.9 $1.7 $0.9 (1) For the nine months ended September 30, 2009, total revenue of $11.906 billion less noninter
Slide 25: Investment Securities Portfolio
Investment Securities Portfolio Appendix Period end securities available for sale - % of portfolio Highlights amortized cost basis 3Q09 4Q08 Made significant progress improving US Treasury and government agencies 13% 2% the risk profile Residential mortgage-backed Increased purchases of Treasuries A
Slide 26: 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 27: 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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