PNC Financial Services (PNC)

CONSOLIDATED YEAR END BALANCE SHEET REVIEW

Total assets were $291 billion at December 31, 2008 compared with $139 billion at December 31, 2007 and $146 billion at September 30, 2008. The consolidated balance sheet included National City’s assets and liabilities substantially at fair value as of December 31, 2008. The acquisition added approximately $134 billion of assets, including $100 billion of loans, after giving effect to purchase accounting adjustments, eliminations and reclassifications.

Loans were $175 billion at December 31, 2008 compared with $68.3 billion at December 31, 2007 and $75.2 billion at September 30, 2008. The core loan portfolio was $148 billion at December 31, 2008 and consisted of 64 percent commercial loans and 36 percent consumer loans. As of December 31, 2008 loans totaling $27.5 billion were designated as a distressed loan portfolio that included residential real estate development loans, cross-border leases, brokered home equity loans and certain residential real estate loans. The majority of the distressed loans were from acquisitions, primarily National City. Loans held for sale were $4.4 billion at December 31, 2008 compared with $3.9 billion at December 31, 2007 and $1.9 billion at September 30, 2008. The acquisition of National City added approximately $2.2 billion of loans held for sale, primarily 1-4 family conforming residential mortgages. Approximately $1.8 billion of education loans previously held for sale were transferred to the loan portfolio during the first quarter of 2008.

Investment securities totaled $43.5 billion at December 31, 2008, including $13.3 billion of primarily U.S. government agency residential mortgage-backed securities from the National City acquisition, compared with $30.2 billion at December 31, 2007 and $31.0 billion at September 30, 2008. At December 31, 2008 net unrealized pretax losses on securities available for sale increased to $5.4 billion compared with $3.6 billion at September 30, 2008 as a result of further declines in fair value due to the impact of widening credit spreads. Net unrealized losses in the securities available for sale portfolio are included in shareholders’ equity as accumulated other comprehensive loss, net of tax. The net unrealized losses did not reflect credit quality concerns of any significance with the underlying assets which represented an overall well-diversified, high quality portfolio. U.S. government agency residential mortgage-backed securities represented 53 percent of the investment securities portfolio at December 31, 2008. PNC's tangible common equity ratio is expected to be less sensitive to the impact of widening credit spreads on accumulated other comprehensive loss primarily due to the composition of the securities available for sale portfolio acquired from National City and a substantially higher level of common equity in the combined company.

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PNC Reports Full Year 2008 Net Income of $882 Million Including Acquisition Costs or $1.3 Billion

Excluding Costs Related to Acquisitions – Page 6

Deposits were $193 billion at December 31, 2008, including $104 billion from the National City acquisition, compared with $82.7 billion at December 31, 2007 and $85.0 billion at September 30, 2008. Interest-bearing deposits represented 81 percent of total deposits at December 31, 2008 compared with 77 percent at September 30, 2008. The change in deposit composition reflected the higher proportion of certificates of deposit and other interest-bearing deposits associated with National City. Borrowed funds were $52.2 billion at December 31, 2008 compared with $30.9 billion at December 31, 2007 and $32.1 billion at September 30, 2008. Borrowed funds at December 31, 2008 included $18.2 billion of National City obligations and $2.9 billion of senior notes guaranteed by the FDIC under the Temporary Liquidity Guarantee Program that were issued during the fourth quarter of 2008.

PNC’s tier 1 risk-based capital ratio was an estimated 9.7 percent at December 31, 2008 compared with 6.8 percent at December 31, 2007 and 8.2 percent at September 30, 2008. The increase in the ratio from December 31, 2007 included the issuance of tier 1 eligible securities during the first half of 2008 totaling $1.3 billion, including REIT preferred, noncumulative perpetual preferred, and trust preferred securities. Additionally, $7.6 billion of preferred stock and a common stock warrant was issued to the Department of the Treasury under the TARP Capital Purchase Program on December 31, 2008. Tier 1 risk-based capital further increased as a result of $5.6 billion of common stock issued in the National City acquisition and PNC's assumption of $2.6 billion of tier 1 qualifying capital securities previously issued by National City. These increases in capital were partially offset by the deduction of higher acquisition-related intangible assets. The positive effect on the tier 1 ratio of the net increase in capital was somewhat offset by an increase in risk-weighted assets primarily related to acquisitions, including National City.

The increase in the tier 1 risk-based capital ratio from September 30, 2008 was primarily due to the TARP Capital Purchase Program issuance and the net increase in capital resulting from the National City acquisition. As of December 31, 2008 the combination of National City with PNC would have resulted in a tier 1 risk-based capital ratio exceeding the 6 percent “well-capitalized” requirement even without giving effect to the capital issuance under the TARP Program which qualified as tier 1 capital.

The company did not actively engage in share repurchase activity during 2008. In January 2009, the PNC board of directors declared a quarterly common stock cash dividend of 66 cents per share consistent with the previous quarter.

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PNC Reports Full Year 2008 Net Income of $882 Million Including Acquisition Costs or $1.3 Billion

Excluding Costs Related to Acquisitions – Page 7