S UMMARY F INANCIAL R ESULTS for PNC FINANCIAL SERVICES GROUP INC (PNC)

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PNC » Topics » S UMMARY F INANCIAL R ESULTS

This excerpt taken from the PNC 10-Q filed May 11, 2009.

SUMMARY FINANCIAL RESULTS


	Three months ended March 31
	2009			2008
Net income, in millions	$	530		$	384
Diluted earnings per common share	$	1.03		$	1.09
Return on
Average common		10.23	%		10.82	%
Average assets		.77	%		1.10	%

Highlights of the first quarter of 2009 included the following:

•

Net income for the first quarter of 2009 reflected the diversification of our businesses. Total revenue was $3.9 billion for the quarter. Net interest income was strong and noninterest income benefited from robust residential mortgage banking activity driven by refinancing volumes and income from servicing rights. Pretax, pre-provision earnings exceeded credit costs by over $650 million in the first quarter of 2009.

•

Our Tier 1 risk-based capital ratio increased by 30 basis points during the quarter to 10.0% and the Tier 1 common capital ratio increased to 4.9% at March 31, 2009. The reduction in our quarterly common stock dividend beginning in April 2009 is expected to add $1 billion annually to PNC’s common equity and cash positions, resulting in annual improvement in capital ratios of approximately 40 basis points.

•

We strengthened our liquidity position and we remain core funded with a loan to deposit ratio of 88% at March 31, 2009 compared with 91% at December 31, 2008. We continued to generate new deposits while allowing high rate acquired certificate of deposit balances to decline consistent with our focus on relationship-based deposits.

•

We are committed to responsible lending, essential to economic recovery. Loans and commitments of approximately $26 billion were originated and renewed during the first quarter of 2009 as we

continued to make credit available to qualified borrowers.

•

Credit quality deterioration continued during the first quarter of 2009 as expected, reflecting further economic weakening and resulting in net additions to loan loss reserves. Nonperforming assets increased during the quarter and were 2.02% of total loans and foreclosed assets at March 31, 2009 compared with 1.23% at December 31, 2008. The ratio of allowance for loan and lease losses to total loans increased to 2.51% at March 31, 2009 from 2.23% at December 31, 2008.

•

Investment securities were $46 billion at March 31, 2009, or 16% of total assets. Approximately 92% of the portfolio was comprised of agency or investment grade equivalent securities.

•

The acquisition of National City is currently exceeding our expectations.

•

The transaction was accretive to first quarter 2009 earnings and is expected to be accretive for full year 2009.

•

The combined company was focused on clients and business growth, implementing centralized loan and deposit pricing.

•

Cost savings of approximately $400 million annualized were realized in the first quarter of 2009, progressing toward the two-year goal of reducing combined company annualized noninterest expense by $1.2 billion.

•

Agreements were reached in April 2009 to divest 61 branches in the third quarter of 2009.

•

The first wave of client conversions is planned for the fourth quarter of 2009.

Our Consolidated Income Statement Review section of this Financial Review describes in greater detail the various items that impacted our results for the first quarters of 2009 and 2008.

This excerpt taken from the PNC 10-Q filed Aug 8, 2008.

SUMMARY FINANCIAL RESULTS


	Three months ended						Six months ended
In millions, except per share data	June 30 2008			June 30 2007			June 30 2008			June 30 2007
Net income	$	505		$	423		$	882		$	882
Diluted earnings per share	$	1.45		$	1.22		$	2.54		$	2.67
Return on
Average common shareholders’ equity		13.99	%		11.61	%		12.32	%		13.39	%
Average assets		1.44	%		1.38	%		1.26	%		1.54	%

Highlights of the second quarter of 2008 included the following:

•

Net interest income grew 32% in the second quarter of 2008 compared with the second quarter of 2007 reflecting a significant decline in funding costs. The net interest margin expanded to 3.47% compared with 3.03% in the second quarter of 2007.

•

Noninterest income increased 9% compared with the second quarter of 2007. Diversity of noninterest revenue continued to differentiate us.

•

Net income for the second quarter of 2008 included an after-tax gain of $52 million, or $.15 per diluted share, on the mark to market of our BlackRock long-term incentive plan (LTIP) shares obligation and $24 million, or $.07 per diluted share, of after-tax integration costs.

•

Average loans increased 15% and average deposits increased 7% in the second quarter of 2008 compared with the second quarter of 2007.

•

Certain market risk positions were lowered during the second quarter via a reduction of commercial mortgage loans held for sale intended for securitization by approximately 23% and trading assets by approximately 22%, resulting in increased hedge coverage in connection with these activities.

•

Overall asset quality continued to be manageable in a challenging credit environment. Coverage ratio of the

allowance for loan and lease losses to total loans improved to 1.35% at June 30, 2008 from 1.21% at December 31, 2007.

•

We continued to maintain a strong capital position. Our Tier 1 risk-based capital ratio increased to 8.2% at June 30, 2008 compared with 6.8% at December 31, 2007.

In addition, we created positive operating leverage by growing revenue while controlling noninterest expense. Revenue growth of 16% in the first half of 2008 compared with the same period in 2007 exceeded noninterest expense growth of 9% for the same periods.

Our Consolidated Income Statement Review section of this Financial Review describes in greater detail the various items that impacted our results for the second quarter and first half of 2008 and 2007.

This excerpt taken from the PNC 10-Q filed May 12, 2008.

SUMMARY FINANCIAL RESULTS


	Three months ended
	March 31, 2008			March 31, 2007
Net income (millions)	$	377		$	459
Diluted earnings per share	$	1.09		$	1.46
Return on
Average tangible common shareholders’ equity		25.98	%		26.63	%
Average common shareholders’ equity		10.62	%		15.59	%
Average assets		1.08	%		1.73	%

The decline in earnings for the first quarter of 2008 compared with the first quarter of 2007 reflected a higher provision for credit losses in 2008, partially offset by an increase in operating leverage as the increase in net interest income exceeded the decline in noninterest income and increase in noninterest expense. Our Consolidated Income Statement Review section of this Financial Review describes in greater detail the various items that impacted our results for the first quarter of 2008 and 2007.

Highlights of the first quarter of 2008 included the following:

•

We continued to grow revenue while controlling noninterest expense, creating positive operating leverage. Revenue growth of 13% exceeded noninterest expense growth of 10% in the year-over-year comparison.

•

Net interest income on a taxable-equivalent basis grew 37% in the first quarter of 2008 compared with the first quarter of 2007. The net interest margin improved to 3.09% compared with 2.95% in the first quarter of 2007. Noninterest income declined 2% compared with the first quarter of 2007 as several increases in fee income were more than offset by valuation and trading losses.

•

Average loans for the first quarter increased 28% over first quarter 2007, while average deposits increased 17% in the comparison.

•

Overall asset quality remained solid despite the impact of the challenging credit environment. The allowance for loan and lease losses was 1.22% of total loans at March 31, 2008 and 1.21% at December 31, 2007.

•

PNC maintained a strong liquidity position and continued to be well capitalized, building the Tier 1 risk-based capital ratio to 7.7% at March 31, 2008 compared with 6.8% at December 31, 2007. In April 2008, we announced a 5% increase of the cash dividend on common stock to 66 cents per share in recognition of the current market environment and reflecting confidence in our ability to grow earnings.

This excerpt taken from the PNC 10-K filed Feb 29, 2008.

SUMMARY FINANCIAL RESULTS


	Year ended December 31
In billions, except for per share data	2007		2006
Net income	$1.467		$2.595
Diluted earnings per share	$4.35		$8.73
Return on
Average common shareholders’ equity	10.53	%	27.97	%
Average assets	1.19	%	2.73	%

We refer you to the Consolidated Income Statement Review portion of the 2006 Versus 2005 section of this Item 7 for significant items which collectively increased net income for 2006 by $1.1 billion, or $3.67 per diluted share.

Our performance in 2007 included the following accomplishments:

•

Our total assets at December 31, 2007 reached a record level of $139 billion, as further detailed in the Consolidated Balance Sheet Review section of this Item 7. We achieved growth by expanding our footprint, growing and deepening customer relationships, and enhancing product capabilities.

•

We differentiated ourselves with a diverse revenue mix of both interest and noninterest

income. Noninterest income represented 57% of total revenue for 2007.

•

Overall asset quality remained strong, reflecting our commitment to maintain a moderate risk profile. While nonperforming assets increased in 2007 compared with 2006, the coverage ratio of the allowance for loan and lease losses to nonperforming loans was 190% and the allowance for loan and lease losses to total loans increased to 1.21% at December 31, 2007.

•

PNC continued to be well capitalized and maintained a strong liquidity position.

•

At December 31, 2007, our investment in BlackRock was $4.1 billion and, based upon the closing price of BlackRock’s common stock on that date, we had an additional $5.3 billion of pretax value that was not recognized.

This excerpt taken from the PNC 10-Q filed Aug 8, 2007.

SUMMARY FINANCIAL RESULTS


	Three months ended				Six months ended
In millions, except per share data	June 30 2007		June 30 2006		June 30 2007		June 30 2006
Net income	$423		$381		$882		$735
Diluted earnings per share	$1.22		$1.28		$2.67		$2.47
Return on
Average common shareholders’ equity	11.61	%	17.49	%	13.39	%	17.08	%
Average assets	1.38	%	1.64	%	1.54	%	1.60	%

Net income increased $147 million, or 20%, for the first six months of 2007 compared with the prior year period. Diluted

earnings per share increased 8% and reflected the shares issued for the Mercantile acquisition in the first quarter of 2007. In addition, we delivered positive operating leverage in the first half of 2007.

Earnings for the first six months of 2007 included the impact of the following items:

•

A first quarter after-tax gain of $53 million, or $.17 per diluted share, recognized in connection with the transfer of BlackRock shares to satisfy a portion of our 2002 BlackRock long-term incentive plan (“LTIP”) shares obligation,

•

An after-tax loss of $20 million, or $.06 per diluted share, from the net mark-to-market adjustments on our remaining BlackRock LTIP shares obligation, and

•

After-tax integration costs related to the Mercantile acquisition and the 2006 BlackRock/Merrill Lynch investment management business (“MLIM”) transaction totaling $19 million, or $.07 per diluted share.

Earnings for the first six months of 2006 included the after-tax impact of integration costs related to the BlackRock/MLIM transaction totaling $8 million, or $.03 per diluted share.

Results for the second quarter of 2007 included the following:

•

Taxable-equivalent net interest income grew 33% compared with the second quarter of 2006 and our net interest margin improved to 3.03% for the second quarter compared with 2.90% for the prior year second quarter, although noninterest income was impacted by lower equity management gains and trading revenue.

•

Asset quality remained very strong. Nonperforming assets to total assets were .20% at June 30, 2007 compared with .24% at June 30, 2006 and .17% at December 31, 2006.

•

We successfully completed the execution of our One PNC initiative, achieving our goal of $400 million total annual pretax earnings benefit. We now have an ongoing continuous improvement program that focuses on delivering positive operating leverage.

•

Average total loans grew 27% for the second quarter of 2007 compared with the second quarter of 2006 and average total deposits increased 25% in the same comparison.

•

PNC returned capital to shareholders through a 15% increase in the common stock dividend, to $.63 per common share, and by purchasing 4 million common shares during the quarter at a cost of $294 million under our repurchase program.

This excerpt taken from the PNC 10-Q filed May 9, 2007.

SUMMARY FINANCIAL RESULTS


	Three months ended
In millions, except per share data	Mar. 31, 2007			Mar. 31, 2006
Net income	$	459		$	354
Diluted earnings per share	$	1.46		$	1.19
Return on
Average common shareholders’ equity		15.59	%		16.67	%
Average assets		1.73	%		1.56	%

Earnings for the first quarter of 2007 included the after-tax impact of the following items:

•

A gain of $53 million, or $.17 per diluted share, recognized in connection with the transfer of BlackRock shares to satisfy a portion of our 2002 BlackRock LTIP shares obligation,

•

A loss of $20 million, or $.06 per diluted share, from the net mark-to-market adjustment on our remaining BlackRock long-term incentive plan (“LTIP”) shares obligation, and

•

Acquisition integration costs related to the Mercantile acquisition and the 2006 BlackRock/MLIM transaction totaling $8 million, or $.03 per diluted share.

Our first quarter 2007 results included the following accomplishments consistent with our strategy:

•

We closed on the acquisition of Mercantile, increasing total assets to a record $123 billion.

•

Our business segments each grew earnings over the prior year first quarter. The rates of growth were 6% for Retail Banking, 29% for Corporate & Institutional Banking, 6% for BlackRock and 15% for PFPC.

•

We created positive operating leverage compared with the first quarter of 2006.

•

First quarter 2007 net interest income grew 12% compared with the first quarter of 2006. The net interest margin improved to 2.95% from 2.88% for the fourth quarter of 2006 and was unchanged from the first quarter of 2006.

•

Average loans increased $5.0 billion, or 10%, compared with the first quarter of 2006, largely due to the partial first quarter 2007 impact of Mercantile as well as growth in commercial loans.

•

Average deposits for the first quarter of 2007 increased $8.7 billion, or 14%, compared with the first quarter of 2006 due to growth in interest- and noninterest-bearing deposits and to the partial quarter impact of Mercantile.

•

Asset quality remained very strong. Nonperforming assets to total assets were .17% at March 31, 2007 compared with .22% at March 31, 2006.

This excerpt taken from the PNC 10-K filed Mar 1, 2007.

SUMMARY FINANCIAL RESULTS


	Year ended December 31
In billions, except for per share data	2006		2005
Net income	$2.595		$1.325
Diluted earnings per share	$8.73		$4.55
Return on
Average common shareholders’ equity	27.97	%	16.58	%
Average assets	2.73	%	1.50	%

Net income for 2006 included the after-tax impact of the following items:

•

The third quarter gain on the BlackRock/MLIM transaction of $1.3 billion, or $4.36 per diluted share;

•

The third quarter securities portfolio rebalancing loss of $127 million, or $.43 per diluted share;

•

BlackRock/MLIM transaction integration costs of $47 million, or $.16 per diluted share, and

•

The third quarter mortgage loan portfolio repositioning loss of $31 million, or $.10 per diluted share.

The aggregate impact of these items increased 2006 net income by $1.1 billion, or $3.67 per diluted common share.

We refer you to the Consolidated Income Statement Review portion of the 2005 Versus 2004 section of this Item 7 for significant items impacting 2005 results.

Our performance in 2006 included the following accomplishments:

•

Our total assets at December 31, 2006 exceeded $100 billion for the first time, as further detailed in

the Consolidated Balance Sheet Review section of this Item 7.

•

Average total loans of $49.6 billion for 2006 increased $2.2 billion, or 5%, compared with 2005. Amounts for 2005 included $1.7 billion of average loans related to the Market Street Funding LLC (“Market Street”) commercial paper conduit that we deconsolidated in October 2005, while total 2006 average loans were impacted by the $.5 billion decline in average residential mortgage loans related to PNC’s third quarter 2006 balance sheet repositioning. Apart from the impact of these actions, the increase was largely due to growth in commercial, residential mortgage and commercial real estate loans.

•

Average total deposits increased $5.7 billion, or 10%, compared with the prior year, primarily the result of an increase in interest-bearing deposits as customers continued to shift deposits to higher-return accounts and other products.

•

Asset quality remained very strong. Nonperforming loans totaled $147 million at December 31, 2006, a decline of $43 million, or 23%, compared with the balance at December 31, 2005.

This excerpt taken from the PNC 10-Q filed Nov 9, 2006.

SUMMARY FINANCIAL RESULTS


	Three months ended				Nine months ended
In millions, except per share data	Sept. 30 2006		Sept. 30 2005		Sept. 30 2006		Sept. 30 2005
Net income	$1,484		$334		$2,219		$970
Diluted earnings per share	$5.01		$1.14		$7.46		$3.35
Return on
Average common shareholders’ equity	65.94	%	16.13	%	33.87	%	16.49	%
Average assets	6.17	%	1.45	%	3.17	%	1.48	%

Results for the third quarter and first nine months of 2006 included the impact of the following items:

The gain on the third quarter BlackRock/MLIM transaction totaling $1.3 billion after-tax, or $4.36 per diluted share;

Securities portfolio rebalancing charges recognized in the third quarter totaling $127 million after-tax, or $.43 per diluted share;

The third quarter mortgage loan portfolio repositioning loss of $31 million after-tax, or $.10 per diluted share; and

Our share of the after-tax impact of BlackRock/MLIM integration costs, which totaled $31 million, or $.10 per diluted share, for the third quarter of 2006 and $39 million, or $.13 per diluted share, for the first nine months of 2006.

In addition to the closing of the BlackRock/MLIM transaction and our balance sheet repositioning activities, our third quarter 2006 performance included the following accomplishments:

Average loans of $50.3 billion for the third quarter of 2006 increased $888 million, or 2 percent, compared with $49.5 billion for the third quarter 2005, primarily as a result of increased commercial, commercial real estate and residential mortgage loans. Average loans increased $3.0 billion, or 6 percent, compared with the prior year third quarter excluding the $2.1 billion of average loans in the prior year period related to Market Street Funding, PNC’s commercial paper conduit that was deconsolidated in October 2005.

Average deposits for the third quarter increased $5.0 billion, or 8 percent, compared with the same quarter in the prior year, primarily as a result of an increase in money market deposits, retail certificates of deposit, Eurodollar deposits and noninterest-bearing deposits.

Asset quality remained very strong, with the ratio of nonperforming assets to loans, loans held for sale and foreclosed assets declining to .36% from .42% at December 31, 2005.

EXCERPTS ON THIS PAGE:

10-Q	May 11, 2009

10-Q	Aug 8, 2008

10-Q	May 12, 2008

10-K	Feb 29, 2008

10-Q	Aug 8, 2007

10-Q	May 9, 2007

10-K	Mar 1, 2007

10-Q	Nov 9, 2006

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