Pnc Financial Services Group, Inc. (the) · NYSE:PNC
Pnc Financial Services Group, Inc. (the) — Barclays Capital Global Financial Services Conference 2009
27 slides from Pnc Financial Services Group, Inc. (the)'s conference presentation, Sep 15, 2009
Slide 1: The PNC Financial Services Group, Barclays Capital Global Financial Services Conference
Exhibit 99.1 The PNC Financial Services Group, Inc. Barclays Capital Global Financial Services Conference September 15, 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 The environment remains challenging but there are positive signs emerging Executing PNC’s proven business model is delivering solid results PNC has realistic opportunities for growth 3
Slide 4: Operating Environment Summary
Operating Environment Summary Unemployment rate and overall market volatility remain elevated Housing prices appear to be stabilizing Sales of new and existing homes slightly improved Regulatory changes are on the horizon Uncertainty remains but there are reasons to be cautiously optimistic Despite
Slide 5: PNC's Framework for Success
Executing PNC’s Framework for Success Our Business Model PNC - six months PNC Business 1 Key Metrics ended June 30, Target Action Plans Peers Model 2009 Maximize credit portfolio value Staying core Loan to 87% 80%-90% Reposition deposit gathering 100% funded deposit ratio strategies Focus “front doo
Slide 6: A Powerful Franchise – Largest in the U.S. Based on Deposits
th A Powerful Franchise – 5 Largest in the U.S. Executing Based on Deposits Our Business Model BlackRock (offices in 22 2Q09 U.S. Rank 1 countries) th Deposits $190 billion 5 th Assets $280 billion 7 th Branches 2,606 5 th ATMs 6,474 5 CO KS OK TX Retail Residential Mortgage Footprint covering nearl
Slide 7: Building a High Quality, Differentiated Balance Sheet
Building a High Quality, Differentiated Executing Balance Sheet Our Business Model Category (billions) June 30, Change from 2009 Dec. 31, 2008 Investment securities $50.0 $6.5 June 30, 2009 Total loans 165.0 (10.5) Key Ratios 1 Other assets 64.8 (7.3) Total assets $279.8 ($11.3) Loans/Assets PNC Pee
Slide 8: Loan Portfolio
Executing Loan Portfolio Our Business Model Overall portfolio highlights Commercial real estate Residential real estate is 10% construction and 90% mortgage Other 13% consumer - Weighted avg: FICO 706, loan to value 75% Home equity portfolio is high quality and 9% performing well - Weighted avg: FIC
Slide 9: Commercial Real Estate (CRE)
Executing Commercial Real Estate (CRE) Our Business Model CRE outstanding as a % of assets PNC 2Q09 total CRE loans PNC 2Q09 CRE nonperforming loans NPLs NPLs as a JPM 3% CRE type (millions) % of type Lodging BAC 3% Residential development $575 20.3% 3% Multifamily PNC 9% Retail 307 7.5% 17% COF 9%
Slide 10: Managing Overall Credit Quality
Executing Managing Overall Credit Quality Our Business Model Growth rate in nonperforming loans declined Proactive management (billions) 1Q09 2Q09 Isolated loans of $21 billion, or 13% of Nonperforming loans $2.96 $4.03 total loans at June 30, 2009, into our Distressed Assets Portfolio segment Chang
Slide 11: Relative Credit Risk Profile
Executing Relative Credit Risk Profile Our Business Model Key 2Q09 metrics 1 3.50% 2.98% 2.90% PNC June 30, 2009 3.00% 2.77% 2.53% 2.50% 2.44% Reserves plus fair value mark 2.22% as a % of outstanding 2 : 1.89% 2.00% Commercial real estate 11% 1.62% Commercial 5% 1.50% Residential real estate 12% 1.
Slide 12: Diverse Revenue Streams and Well-Controlled Expenses
Diverse Revenue Streams and Well-Controlled Executing Expenses Our Business Model Six months ended June 30, 2009 19% $7.9 Consumer 20% Revenue Expense services Pretax pre-provision earnings¹ Residential Provision Net income mortgage (billions) 12% Asset 1H09 mgmnt noninterest 43% $5.0 income $3.4B F
Slide 13: Strengthening Capital Ratios
Executing Strengthening Capital Ratios Our Business Model Tier 1 common ratio Tier 1 risk-based ratio Highlights 10.5% Increased common 5.3% 10.0% 9.7% equity by $1.9 billion 4.8% 4.9% from 4Q08 to 2Q09 Stress test-related capital plan accepted by regulators Expect to continue to increase common equ
Slide 14: Realistic Opportunities for Growth
Realistic Opportunities for Growth Growth Levers Growth Opportunity to create Credit costs should substantial positive be better relative to operating leverage Significant peers due to PNC’s shareholder Revenue fair value marks value Leverage product Expenses depth, cross sell Return on average capa
Slide 15: Credit Cost Trend
Credit Cost Trend Growth Levers Provision for credit losses to average loans Recession 2.30% 1.39% .83% .49% .50% .25% Target range .3% - .5% .13% .04% 2002 2003 2004 2005 2006 2007 1 2008 2,3 2009 3,4 PNC Is Focused on Returning to a Moderate Risk Profile. (1) Includes the $45 million conforming pr
Slide 16: Capturing Planned Expense Saves
Capturing Planned Expense Saves Growth Levers 1H09 annualized cost saves Highlights Implemented common vendor and expense policies and approval guidelines $1,200 Implementing multi-year plan to help maximize the value of physical space owned Total and leased goal Began consolidation of 93 mortgage o
Slide 17: Strong Product Sales Across the Franchise
Strong Product Sales Across the Franchise Growth Levers June 09 YTD annualized sales Sales highlights contribution by region Total franchise 1H09 sales 123% of YTD goal 2Q09 sales up 28% vs. 1Q09 Legacy PNC Products markets 1 Legacy PNC markets 1 60% Corporate Banking All markets above YTD goal Top
Slide 18: Deepening Relationships and Growing Fees
Deepening Relationships and Growing Fees Growth Levers Retail online active customers Noninterest income $1,805 Focus areas $1,566 3 Online bill pay Asset management +10% Consumer services 2 +4% Corporate services Online +8% banking 1 Deposit charges +8% 0 1Q09 2Q09 1Q09 2Q09 PNC Has Demonstrated an
Slide 19: Treasury Management, Capital Markets and Cross-Sell
Treasury Management, Capital Markets Growth and Cross-Sell Levers Treasury Management and % of year-to-date cross sell goal through June 30, 2009 Capital Markets Revenue Treasury management Capital markets 140% 132% 122% 111% 110% $148 $43 64% $275 $285 Significant progress Significant opportunity 1
Slide 20: Virtual Wallet
Virtual Wallet Growth Levers One of our fastest growing consumer bases Gen-Y will outnumber any other generation by 2017 Total income will surpass Baby Boomers by 2017 Average new accounts opened per day at 300+ year to date 2009 “A slick personal finance tool” From 2Q08 to 2Q09 PNC has grown our Ge
Slide 21: Summary
Summary PNC has an established framework for success The National City acquisition has added great value The execution of our business model across the franchise is delivering solid results PNC’s growth levers provide an opportunity to deliver significant shareholder value as the economy recovers PN
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 turn
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 Three months ended Six months ended March 31, 2009 June 30, 2009 June 30, 2009 in millions Total revenue $3,871 $3,987 $7,858 Noninterest expense 2,328 2,658 4,986 Pretax pre-provision earnings $1,543 $1,329 $2,872 PNC believes that pretax pre-provision earnin
Slide 26: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix Remaining fair value mark Remaining fair value and allowance as a % of As of June 30, 2009, in millions Reported loans mark (a) Total Allowance total Commercial real estate $24,865 $1,878 $26,743 $1,027 11% Commercial and equipment lease finanancing 66,686 1,1
Slide 27: Non-GAAP to GAAP Reconcilement
Non-GAAP to GAAP Reconcilement Appendix December 31, June 30, Accruing loans past due in millions (a)(b) 2008 2009 30 - 89 days $2,283 $2,310 Government insured/guaranteed (c) 102 123 Excluding government insured/guaranteed $2,181 $2,187 90 days or more (a)(d) $1,241 $2,078 Government insured/guaran
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