PNC Financial Services (PNC)

Assets under management increased to $104 billion at September 30, 2009 compared with $98 billion at June 30, 2009 due to higher equity market values and improvement in net flows. Nondiscretionary assets under administration declined by $11 billion compared with June 30, 2009 due to lower institutional assets related to the exit of a noncore product offering.

Noninterest income for the quarter of $155 million increased $4 million compared with the second quarter of 2009 as asset management fees were positively impacted by the improving equity markets, new business generation and a shift in assets into higher yielding equity investments.

Net interest income for the third quarter of $70 million decreased $5 million compared with the linked quarter due to lower yields assigned to deposits in the declining rate environment and a reduction in higher yield loans.

Noninterest expense declined by $5 million to $162 million for the third quarter compared with the second quarter from continued expense discipline.

Provision for credit losses was $9 million for the third quarter of 2009 compared with $46 million for the second quarter. The lower provision was attributable to consistent reserve levels resulting from stable credit quality and lower net charge-offs.

Average loan balances decreased $120 million, or 2 percent, compared with the linked quarter as declines in commercial loans and residential mortgages were somewhat offset by home equity loan growth. Average deposits for the quarter declined $152 million, or 2 percent, compared with the second quarter due to the elimination of a deposit sweep product and the planned run off of high rate certificates of deposit.

Assets under management increased to $98 billion at June 30, 2009 compared with $96 billion at March 31, 2009 due to higher equity market values.

Noninterest income for the quarter declined $3 million compared with the linked quarter due to a seasonal decline in tax services revenue partially offset by higher asset management fees reflecting improved equity market values.

Net interest income for the quarter declined $21 million compared with the first quarter of 2009 due to a reduction of higher yielding loans. Personal wealth management products include traditional loans and deposits.

Noninterest expense for the quarter declined due to continued expense discipline.

Provision for credit losses was $46 million for the second quarter of 2009 compared with $17 million in the linked quarter. Loan loss reserves were increased beyond net charge-offs as credit quality continued to deteriorate.

Balance sheet activity for the quarter reflected a stable loan portfolio compared with the linked quarter as home equity loan growth largely offset declines in commercial and residential mortgage loans. Average deposits for the quarter declined $568 million compared with the first quarter due to seasonal outflows related to customer tax payments, the internal reassignment of balances to another business segment and the planned run off of higher rate certificates of deposit. These decreases were partially offset by deposit growth that resulted from the recapture of former National City customers and successful retention and acquisition efforts.

Assets under management were $96 billion at March 31, 2009 compared with $103 billion including National City at December 31, 2008. The decrease resulted from declining equity market values.

Noninterest income for the quarter was $155 million consisting primarily of asset management fees which were impacted by the decline in equity market values during the quarter. Other fee income sources provided solid results.

Net interest income was $100 million for the quarter.

Noninterest expense was $171 million for the first quarter of 2009, reflecting disciplined expense management somewhat offset by increased costs for FDIC insurance.

Provision for credit losses was $17 million for the quarter reflecting the deteriorating economic environment. Loan net charge-offs related to continued downward credit migration occurred in both the commercial and consumer loan portfolios.

Balance sheet activity for the quarter included core deposit growth in demand and money market deposits demonstrating a return to stability within the former National City franchise. Loan growth was primarily in consumer lending.