PNC Financial Services (PNC)

RECOURSE AGREEMENT WITH GOVERNMENT AGENCIES

We are authorized to originate, underwrite, close and service commercial mortgage loans and then sell them to FNMA under FNMA’s DUS program. We have similar arrangements with FHLMC.

Under these programs, we assume up to one-third of the risk of loss on unpaid principal balances. At September 30, 2008, the maximum recourse liability was $3.9 billion. Accordingly, we maintain a reserve for such potential losses which approximates the fair value of this liability. At September 30, 2008, the unpaid principal balance outstanding of loans sold as a participant in these programs was $12.6 billion. The fair value of the guarantee, in the form of reserves for losses under these programs, totaled $48 million as of September 30, 2008 and is included in other liabilities on our Consolidated Balance Sheet. If payment is required under these programs, we would not have an interest in the collateral underlying the mortgage loans on which losses occurred, although the value of the collateral is taken into account in determining the amounts of such losses. The serviced loans are not included on our Consolidated Balance Sheet.

RECOURSE AGREEMENT WITH GOVERNMENT AGENCIES

We are authorized to originate, underwrite, close and service commercial mortgage loans and then sell them to Fannie Mae under Fannie Mae’s DUS program. We have similar arrangements with Freddie Mac.

Under these programs, we assume up to one-third of the risk of loss on unpaid principal balances. At June 30, 2008, the maximum recourse liability was $3.7 billion. Accordingly, we maintain a reserve for such potential losses which approximates the fair value of this liability. At June 30, 2008, the unpaid principal balance outstanding of loans sold as a participant in these programs was $12.1 billion. The fair value of the guarantee, in the form of reserves for losses under these programs, totaled $41 million as of June 30, 2008 and is included in other liabilities on our Consolidated Balance Sheet. If payment is required under these programs, we would not have an interest in the collateral underlying the mortgage loans on which losses occurred, although the value of the collateral is taken into account in determining the amounts of such losses. The serviced loans are not included on our Consolidated Balance Sheet.

RECOURSE AGREEMENT WITH GOVERNMENT AGENCIES

In connection with our July 2007 acquisition of ARCS, we are authorized to originate, underwrite, close and service commercial mortgage loans and then sell them to Fannie Mae under Fannie Mae’s DUS program. We have similar arrangements with Freddie Mac.

Under these programs, we assume up to one-third of the risk of loss on unpaid principal balances. At March 31, 2008, the maximum recourse liability was $3.6 billion. Accordingly, we maintain a reserve for such potential losses which approximates the fair value of this liability. At March 31, 2008, the unpaid principal balance outstanding of loans sold as a participant in these programs was $11.8 billion. The fair value of the guarantee, in the form of reserves for losses under this program, totaled $40 million as of March 31, 2008 and is included in other liabilities on our Consolidated Balance Sheet. If payment is required under these programs, we would not have an interest in the collateral underlying the mortgage loans on which losses occurred. The serviced loans are not included on our Consolidated Balance Sheet.