Pnc Financial Services Group, Inc. (the) · NYSE:PNC

Pnc Financial Services Group, Inc. (the) — BancAnalysts Association of Boston Conference 2005

30 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Nov 3, 2005

  1. Slide 1: BancAnalysts Association of Boston Conference

    The PNC Financial Services Group, Inc. BancAnalysts Association of Boston Conference Boston, MA November 3, 2005 The PNC Financial Services Group, Inc. BancAnalysts Association of Boston Conference Boston, MA November 3, 2005 EXHIBIT 99.1

  2. Slide 2: Cautionary Statement Regarding Forward-Looking Information

    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

  3. Slide 3: Banks Have Historically Traded at a Discount

    Banks Have Historically Traded at a Discount P/E of Large Cap Banks Relative to the S&P 500 Banks Have Historically Traded at a Discount 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% S&P 500 P/E S&P 500 P/E P/E of Banks > $10 Billion Market Capitalization P/E of Banks > $10 Billion Market Capitalizati

  4. Slide 4: The Challenge of Balancing Returns and Growth

    The Challenge of Balancing Returns and Growth Invest and grow fee-based businesses Improve asset yields Grow valuable core deposit franchise Improve operating leverage The Challenge of Balancing Returns and Growth Growth Banking Industry Valuation Issues PNC’s Strategy Leverage industry-leading risk

  5. Slide 5: Strong Risk Culture is Essential to Minimizing Surprises

    Strong Risk Culture is Essential to Minimizing Surprises Strategic Actions We’ve Taken to Enhance our Risk Culture Strong Risk Culture is Essential to Minimizing Surprises Strengthened personnel and systems Improved diversification Increased loan granularity Enhanced disclosure Remained disciplined

  6. Slide 6: Disciplined Approach Leads to Strong Asset Quality

    Disciplined Approach Leads to Strong Asset Quality Asset Quality Compared to Peers 0.0% 0.1% 0.2% 0.3% 0.4% 0.5% 0.6% 0.7% 0.8% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Disciplined Approach Leads to Strong Asset Quality Net Charge-offs to Average Loans PNC Peer Group Source: SNL DataSource PNC 2Q05 net char

  7. Slide 7: High Quality Consumer Loan Portfolio

    High Quality Consumer Loan Portfolio Home Equity Loans Auto Loans Other Consumer Loans Composition of Consumer Loan Portfolio High Quality Consumer Loan Portfolio Average Consumer Loans For the Three Months Ended 9/30/05 Home Equity Portfolio Credit Statistics First lien positions 47% Weighted avera

  8. Slide 8: Our Approach to Interest Rate Risk: Preserve and Optimize Long-Term Value

    Our Approach to Interest Rate Risk: Preserve and Optimize Long-Term Value Negative Duration of Equity Positions Us Well in a Rising Rate Environment Our Approach to Interest Rate Risk: Preserve and Optimize Long-Term Value $450 $470 $490 $510 $530 $550 $570 $590 Net interest income on a taxable-equi

  9. Slide 9: The Challenge of Balancing Returns and Growth

    The Challenge of Balancing Returns and Growth Invest and grow fee-based businesses Improve asset yields Grow valuable core deposit franchise Improve operating leverage The Challenge of Balancing Returns and Growth Growth Banking Industry Valuation Issues PNC’s Strategy Leverage industry-leading risk

  10. Slide 10: A Differentiated Franchise

    A Differentiated Franchise A Core Funded Bank… That’s Fee Driven… Generating Solid Returns A Differentiated Franchise BK 69% WB 75% PNC 84% STI 99% BBT 101% WFC 102% FITB 105% KEY 113% USB 113% NCC 130% BK 72% PNC 67% WB 49% USB 47% FITB 46% WFC 45% KEY 43% STI 42% BBT 40% NCC 37% USB 23.0% WFC 19.9

  11. Slide 11: Fee-Based Businesses Differentiate PNC

    Fee-Based Businesses Differentiate PNC Noninterest Income to Total Revenue Fee-Based Businesses Differentiate PNC 0% 10% 20% 30% 40% 50% 60% 70% 80% BK PNC WB USB FITB WFC KEY STI BBT NCC Information for the three months ended 9/30/05; PNC amounts calculated in the Appendix Source: SNL DataSource Ba

  12. Slide 12: Strategies for Growing Fee-Based Businesses

    Strategies for Growing Fee-Based Businesses Strong Noninterest Income Growth 10% CAGR 10% CAGR Strategies for Growing Fee-Based Businesses Geographic expansion Diversify product set Deepen product penetration Leverage technology $450 $550 $650 $750 $850 $950 $1,050 $1,150 $ millions Consolidated Non

  13. Slide 13: Opportunities to Improve Asset Yields

    Opportunities to Improve Asset Yields Composition of Earning Assets for Third Quarter 2005 0% 5% 10% 15% 20% 25% 30% 35% 40% Opportunities to Improve Asset Yields Source: Company reports Peer average reflects average of super-regional banks as defined in Appendix excluding PNC; BK and FITB also excl

  14. Slide 14: Loan Growth Driven by Higher Risk-Adjusted Products

    PNC Average Institutional and Business Banking Loans Loan Growth Driven by Higher Risk-Adjusted Products $0 $5 $10 $15 $20 $25 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 * Includes lease financing and excludes Market Street Funding Corporation: see Appendix for GAAP reconciliation $ billions Commercial

  15. Slide 15: An Opportunity to Increase Securities Yields

    An Opportunity to Increase Securities Yields Retained Portfolio Flexibility Increasing Yields on Securities Portfolio An Opportunity to Increase Securities Yields Yield on Securities Portfolio BK 4.27 % 3.52 % +75bp PNC 4.29 3.67 +62bp STI 4.40 3.82 +58bp USB 4.73 4.28 +45bp WB 5.07 4.75 +32bp WFC 5

  16. Slide 16: Growing a Valuable Core Deposit Base

    Growing a Valuable Core Deposit Base Deposit Increase Compared to Peers Strategies to Drive Growth Growing a Valuable Core Deposit Base Focus on growing consumer and small business checking relationships Expand distribution into faster growing regions Increase client penetration with industry-leadin

  17. Slide 17: Noninterest-Bearing Deposits Becoming More Valuable

    Noninterest-Bearing Deposits Becoming More Valuable PNC’s High % of Noninterest-Bearing Funding Rising Interest Rates Increase Value of PNC’s Noninterest-Bearing Deposits 12% 14% 16% 18% 20% 22% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 1Q 2Q 3Q 4Q 1Q 2Q 3Q Noninterest-Bearing Deposit

  18. Slide 18: One PNC – Driving Improved Operating Leverage

    One PNC – Driving Improved Operating Leverage One PNC – Driving Improved Operating Leverage Eliminate 3,000 positions Implement 2,400 ideas Achieve $400 million of total value 1,800 positions eliminated 77% of ideas are complete or in process On track to capture $400 million of value by 2007 Expecte

  19. Slide 19: PNC's High Return Business Mix

    PNCs High Return Business Mix Business Earnings Contribution – Nine Months Ended September 30, 2005 PNCs High Return Business Mix Consumer Banking Earnings $487 Return on capital 23% Institutional Banking Earnings $372 Return on capital 29% BlackRock Earnings $161 Return on average equity 25% PFPC E

  20. Slide 20: Summary

    Summary Summary Built a differentiated company Comprehensive risk management culture to increase predictability Proven and executable growth strategies PNC has:

  21. Slide 21: © PNC

    © PNC

  22. Slide 22: Appendix

    Appendix

  23. Slide 23: Cautionary Statement Regarding Forward-Looking Information

    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 matte

  24. Slide 24: Cautionary Statement Regarding Forward-Looking Information (continued)

    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 i

  25. Slide 25: Cautionary Statement Regarding Forward-Looking Information (continued)

    Cautionary Statement Regarding Forward-Looking Information (continued) Cautionary Statement Regarding Forward-Looking Information (continued) pursuit of attractive acquisition opportunities could be negatively impacted due to regulatory delays or other regulatory issues. Regulatory and/or legal issu

  26. Slide 26: Non-GAAP to GAAP Reconcilement: Net Interest Income

    Non-GAAP to GAAP Reconcilement Appendix Net Interest Income Non-GAAP to GAAP Reconcilement Net interest income, GAAP basis $494 $481 $491 $503 Taxable-equivalent adjustment Net interest income, taxable-equivalent basis $497 $485 $498 $509 $ millions 1Q04 3Q04 2Q04 4Q04 Net interest income, GAAP basi

  27. Slide 27: Non-GAAP to GAAP Reconcilement: Noninterest Income to Total Revenue

    Non-GAAP to GAAP Reconcilement Appendix Noninterest Income to Total Revenue* Non-GAAP to GAAP Reconcilement BlackRock $301 18.0% PFPC 13.0 Banking businesses 29.2 Other 6.4 Total consolidated $1,113 $1,672 66.6% Noninterest Income $ millions Consolidated Total Revenue Noninterest Income to Consolida

  28. Slide 28: Non-GAAP to GAAP Reconcilement: Average Institutional and Business Banking Loans

    Non-GAAP to GAAP Reconcilement Appendix PNC Average Institutional and Business Banking Loans Non-GAAP to GAAP Reconcilement Business Banking $2,968 $3,179 $3,629 $3,825 $3,918 $4,052 $4,277 $4,443 26% Institutional Banking Asset based lending 3,658 3,608 3,788 3,838 3,976 4,050 4,303 4,227 9% Commer

  29. Slide 29: Non-GAAP to GAAP Reconcilement: Business Earnings and Return on Capital

    Non-GAAP to GAAP Reconcilement Appendix Business Earnings and Return on Capital Non-GAAP to GAAP Reconcilement Consumer Banking $487 $443 23% Institutional Banking 29% BlackRock 25% PFPC 34% Total business segments 1,095 26% Minority interest in (income) of BlackRock (49) (27) Other (76) (4) Total c

  30. Slide 30: Peer Group

    Peer Group Appendix Peer Group 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 & Company WFC Ticker S

PNC Financial Services Group — BancAnalysts Association of Boston Conference 2005 on 6ix