Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Lehman Brothers 2006 Financial Services Conference
38 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Sep 12, 2006
Slide 1: Lehman Brothers 2006 Financial Services Conference
The PNC Financial Services Group, Inc. Lehman Brothers 2006 Financial Services Conference September 12, 2006 EXHIBIT 99.1
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: Key Messages
Key Messages Delivered on our strategies Business initiatives to drive continued momentum PNC has:
Slide 4: Our Journey to Build a Great Company
Our Journey to Build a Great Company Opportunity Invested in industry leading technology platform Built a diversified business mix Expanded distribution capabilities Improved employee and customer satisfaction Enhanced risk management capabilities Developed strong corporate governance Expanded into
Slide 5: Keys to Success in the Current Environment
The PNC Financial Services Group, Inc. Lehman Brothers 2005 Financial Services Conference New York, NY September 13, 2005 Keys to Success in the Current Environment What We Told Investors Last Year PNC Financial Services Group, Inc. Lehman Brothers 2005 Financial Services Conference New York, NY Sep
Slide 6: PNC's High Return Business Mix
Business Results – Six Months Ended June 30, 2006 PNC’s High Return Business Mix $0 $100 $200 $300 $400 Retail Banking Corporate & Institutional Banking BlackRock PFPC Business earnings, earnings growth and return on capital reconciled to GAAP net income, growth and returns in Appendix. Percentages
Slide 7: Disciplined Approach Leads to Strong Credit Risk Profile
Disciplined Approach Leads to Strong Credit Risk Profile Strong Asset Quality Lending Profile (As of June 30, 2006) Diverse - No large industry concentration Limited large non-investment grade exposure - Only 2% is non-investment grade and >$50 million Targeted - Focused on clients that meet risk-ad
Slide 8: Impact of Expense Management Becoming More Visible
Impact of Expense Management Becoming More Visible Efficiency Ratios Improving 50% 55% 60% 65% 70% 75% Bank efficiency ratio represents the consolidated (GAAP basis) efficiency ratio excluding the effect of BlackRock and PFPC and is reconciled to GAAP in the Appendix. Efficiency equals noninterest e
Slide 9: Innovative Technology Platform
Innovative Technology Platform PNC Named to 2006 'CIO' 100 for Technology Achievement U.S. Banks PNC Wells Fargo
Slide 10: We've Been Delivering Results: Consolidated Net Income
We’ve Been Delivering Results… Consolidated Net Income $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2003 2004 2005 $0 $100 $200 $300 $400 $500 $600 $700 $800 1H05 2H05 1H06 $ millions
Slide 11: Rebalanced Securities Portfolio to Improve Total Return
Rebalanced Securities Portfolio to Improve Total Return Objective Actions Benefits Manage portfolio to optimize total return performance Performed comprehensive portfolio review Sold approximately $6 billion of securities likely to underperform on a relative value basis Purchased $3 billion of secur
Slide 12: Key Messages
Key Messages Delivered on our strategies Business initiatives to drive continued momentum - Retail Banking – Winning in the payments space - C&I Banking – Building a premier middle market franchise - PFPC – Expanding core clients and investing in growth opportunities - BlackRock – Building a world-c
Slide 13: Creating a Differentiated Brand
Creating a Differentiated Brand Deliver Exceptional Service Demonstrate Ease Build Confidence Ask for the Business
Slide 14: Driving Solid Growth in Retail Banking
Driving Solid Growth in Retail Banking Checking Relationships The Value Profit Chain is Working Business Growth Committed Employees Satisfied Customers Consumer +7% Small business +10% Checking Relationships 12/31/03 to 6/30/06 CAGR 59% 63% 68% 2002 2003 2004 Employees’ Willingness to Recommend PNC
Slide 15: Increasing and Deepening Checking Relationships
Increasing and Deepening Checking Relationships Retail Banking Retail Banking Checking Customer Base Checking Customer Base 0.0 0.5 1.0 1.5 2.0 2003 2004 2005 6/30/06 millions December 31 Small Business Consumer Small Business Small Business debit card revenue ($ millions) $5.8 +27% Small Business o
Slide 16: Growing Deposits Faster Than Our Peers
Growing Deposits Faster Than Our Peers Deposit Increase Compared to Peers Total interest-bearing deposits 12% 9% Total noninterest-bearing deposits 7% 1% Total deposits 11% 8% Average Balances 2Q06 vs. 2Q05 PNC Peers Source: SNL DataSource Peers reflects median of super-regional banks identified in
Slide 17: Noninterest-Bearing Deposits Becoming More Valuable
Noninterest-Bearing Deposits Becoming More Valuable PNC’s High Percentage of Noninterest-Bearing Funding Rising Interest Rates Increase Value of PNC’s Noninterest-Bearing Deposits WFC % PNC RF KEY USB STI BK FITB WB NCC BBT 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 0.60% 0.70% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2
Slide 18: PNC Bank debit card
PNCBANK DEBIT
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Slide 21: Investing in Our Brand to Drive Growth
Investing in Our Brand to Drive Growth Ease. Confidence. Achievement Redesigned and simplified checking product Redesigned and simplified checking product National marketing campaign to expand National marketing campaign to expand checking product reach beyond branch checking product reach beyond br
Slide 22: Checking that makes every ATM in the world free
YOU'VE ALREADY SPENT $289.00 IN ATM FEES THIS YEAR. YOUR FEE TODAY IS $2.50. DECLINE ACCEPT INTRODUCING CHECKING THAT MAKES EVERY ATM IN THE WORLD FREE. @ PNC BANK
Slide 23: Success in Greater Washington DC Market Highlights Scalability of Model
Success in Greater Washington DC Market Highlights Scalability of Model Demonstrating Ease of PNC Leveraging successful technology platform Extended hours Free ATM’s Opened five new branches - Plan to open approximately 35 more by end of 2008 Established Business Banking team Improved Monthly Same S
Slide 24: Hawthorn
HawTHoRN
Slide 25: Corporate & Institutional Banking: Building a Premier Middle Market Franchise
Corporate & Institutional Banking: Building a Premier Middle Market Franchise What’s Our Competitive Advantage? Focused on middle market Extensive product offering Established national origination and servicing capabilities Corporate & Institutional Banking Location Lock Box Location
Slide 26: Successfully Deepening C&I Banking Relationships
Successfully Deepening C&I Banking Relationships Cross-sell Results Driving Strong Fee Revenue Growth $ billions $0.0 $0.2 $0.4 $0.6 $0.8 2005 2006 +39% -4% Net Interest Income* Noninterest Income Six Months Ended June 30, Product Penetration of Primary Product Penetration of Primary Clients with a
Slide 27: Fee-Based Businesses Differentiate PNC
Fee-Based Businesses Differentiate PNC Noninterest Income to Total Revenue Information for the quarter ended 6/30/06 Source: SNL DataSource, PNC as reported 0% 10% 20% 30% 40% 50% 60% 70% 80% BK PNC USB WB FITB WFC KEY STI BBT NCC RF Noninterest Income 15% PNC 3-Year CAGR
Slide 28: PFPC – Benefiting from Investments in High Growth Products
PFPC – Benefiting from Investments in High Growth Products Servicing Statistics Assets serviced ($ billions) Accounting / administration $743 -3% Domestic $671 -4% Offshore $72 +7% Shareholder accounts (in millions) Total +12% Transfer agency -10% Subaccounting +24% YTD Earnings ($ millions) $53 +13
Slide 29: BlackRock – Strong Record of Growth
BlackRock – Strong Record of Growth Assets Under Management $0 $100 $200 $300 $400 $500 2002 2003 2004 2005 $ billions 18% CAGR 18% CAGR $273 $342 $453 $309 6/30/05 6/30/06 $464 $414 6/30/06 6/30/06 $1.046 Trillion $464 Proforma BlackRock/MLIM will Create One of the Largest Asset Managers in the Wor
Slide 30: Improving Capital Flexibility
Improving Capital Flexibility Tangible Common Equity Ratio Capital Management Priorities PNC (Pro forma) 7+ % FITB 6.9% RF 6.7% KEY 6.7% NCC 6.6% WFC 6.2% STI 5.8% USB 5.6% BBT 5.4% PNC 5.2% BK 5.2% WB 4.5% As of June 30, 2006 Pro forma after giving effect to anticipated BlackRock/Merrill Lynch tran
Slide 31: Summary
Summary Diversified business mix delivering high fee revenue contribution Balance sheet characterized by strong asset quality and significant flexibility in current environment Executing on strategies to maintain momentum Improved capital position anticipated
Slide 32: 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 33: Cautionary Statement Regarding Forward-Looking Information (continued)
Cautionary Statement Regarding Forward-Looking Information (continued) • 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, could
Slide 34: Appendix
Appendix
Slide 35: Non-GAAP to GAAP Reconcilement: Business Earnings and Return on Capital
Non-GAAP to GAAP Reconcilement Appendix Business Earnings and Return on Capital Business segments Retail Banking $375 $311 21% 26% Corporate & Institutional Banking (13)% 22% BlackRock 34% 29% PFPC 13% 29% Total business segments 25% Minority interest in income of BlackRock (41) (30) Other (7) (46)
Slide 36: Non-GAAP to GAAP Reconcilement: Efficiency Ratios
Non-GAAP to GAAP Reconcilement Appendix Efficiency Ratios Source: Page of The PNC Financial Services Group, Inc. second quarter 2006 Earnings Release Financial Supplement
Slide 37: Non-GAAP to GAAP Reconcilement: Tangible Common Equity Ratio
Non-GAAP to GAAP Reconcilement Appendix Tangible Common Equity Ratio Common shareholders equity $8.8 $1.6(a) $10.4 Goodwill & other intangible assets 4.1 ($0.5) 3.6 Tangible common equity $4.7 $6.8 Total assets $94.9 ($1.2) $2.5(b) $96.2 Goodwill & other intangible assets 4.1 (0.5) 3.6 Tangible asse
Slide 38: Peer Group of Super-Regional Banks
Peer Group of Super-Regional Banks Appendix 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 Regions Financial RF SunTrust Banks, Inc. STI U.S. Bancorp USB Wachovia Corporation WB
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