EXHIBIT 99.1
[PNC LOGO]
THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT (UNAUDITED)
FOURTH QUARTER AND FULL YEAR 2003
THE PNC FINANCIAL SERVICES GROUP, INC.
FINANCIAL SUPPLEMENT (UNAUDITED)
FOURTH QUARTER AND FULL YEAR 2003
Page
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Consolidated Statement of Income 1 - 2
Consolidated Balance Sheet 3
Capital and Asset Quality Ratios 3
Results of Businesses
Summary 4 - 5
Banking Businesses
Regional Community Banking 6 - 7
Wholesale Banking
Corporate Banking 8 - 9
PNC Real Estate Finance 10 - 11
PNC Business Credit 12 - 13
PNC Advisors 14 - 15
Asset Management and Processing Businesses
BlackRock 16 - 17
PFPC 18 - 19
Details of Net Interest Income and Net Interest Margin 20
Details of Noninterest Income and Noninterest Expense 21
Consolidated Average Balance Sheet 22 - 23
Details of Loans and Loans Held for Sale 24
Allowances For Credit Losses And Unfunded Loan
Commitments And Letters of Credit 25
Details of Nonperforming Assets 26 - 27
Glossary of Terms 28
Business Definitions 30
The information contained in this Financial Supplement is preliminary, unaudited
and based on data available at January 21, 2004. It speaks only as of the
particular date or dates included in the accompanying pages. PNC does not
undertake an obligation to, and disclaims any duty to, correct or update any of
the information provided. The Corporation's future financial performance is
subject to risks and uncertainties as described in its SEC filings.
Certain prior period amounts included in this Financial Supplement have been
reclassified to conform to the current period presentation. In addition, amounts
included in this Financial Supplement are presented on a continuing operations
basis, unless otherwise noted.
Consolidated financial results for the three months ended September 30, 2003
have been adjusted to reflect the de-consolidation of certain variable interest
entities in accordance with the Financial Accounting Standards Board's Financial
Interpretation No. 46 (Revised 2003) ("FIN 46R"). These entities were previously
consolidated under the Corporation's early adoption of FIN 46 in PNC's
consolidated financial statements as of and for the three months ended September
30, 2003. In addition, based on guidance included in FIN 46R, the Corporation
deconsolidated the assets and liabilities of PNC Institutional Capital Trust A,
B, C and D effective December 31, 2003.
Average full-time equivalent employee (FTE) statistics as disclosed in this
Financial Supplement by business reflect staff directly employed by the
respective business and exclude corporate and shared services employees.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 1
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
December 31 December 31 December 31
For the year ended - in millions, except per share data 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Loans and fees on loans $ 1,940 $ 2,294 $ 3,279
Securities 579 616 625
Loans held for sale 48 135 119
Purchased customer receivables 22
Other 123 127 114
- -------------------------------------------------------------------------------------------------------------
Total interest income 2,712 3,172 4,137
- -------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits 457 659 1,229
Borrowed funds 210 316 646
Capital securities 29
Commercial paper 14
Liabilities of certain variable interest entities 6
- -------------------------------------------------------------------------------------------------------------
Total interest expense 716 975 1,875
- -------------------------------------------------------------------------------------------------------------
Net interest income 1,996 2,197 2,262
Provision for credit losses 177 309 903
- -------------------------------------------------------------------------------------------------------------
Net interest income less provision for credit losses 1,819 1,888 1,359
- -------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Asset management 861 853 848
Fund servicing 762 816 833
Service charges on deposits 239 227 218
Brokerage 184 195 206
Consumer services 251 239 229
Corporate services 485 526 60
Equity management (25) (51) (179)
Net securities gains 116 89 131
Investments held by certain variable interest entities 19
Other 365 303 306
- -------------------------------------------------------------------------------------------------------------
Total noninterest income 3,257 3,197 2,652
- -------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Staff 1,804 1,701 1,667
Net occupancy 282 243 220
Equipment 276 271 255
Marketing 64 51 57
Distributions on capital securities 28 58 63
Other 1,022 903 1,152
- -------------------------------------------------------------------------------------------------------------
Total noninterest expense 3,476 3,227 3,414
- -------------------------------------------------------------------------------------------------------------
Income from continuing operations before minority and noncontrolling
interests and income taxes 1,600 1,858 597
Minority and noncontrolling interests in income of consolidated entities 32 37 33
Income taxes 539 621 187
- -------------------------------------------------------------------------------------------------------------
Income from continuing operations 1,029 1,200 377
Income (loss) from discontinued operations (less applicable income tax
benefit of $9 in 2002 and income taxes of zero in 2001) (16) 5
- -------------------------------------------------------------------------------------------------------------
Income before cumulative effect of accounting change 1,029 1,184 382
Cumulative effect of accounting change (less applicable income tax
benefits of $14 in 2003 and $2 in 2001) (28) (5)
- -------------------------------------------------------------------------------------------------------------
Net income $ 1,001 $ 1,184 $ 377
- -------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE
From continuing operations
Basic $ 3.68 $ 4.23 $ 1.27
Diluted $ 3.65 $ 4.20 $ 1.26
- -------------------------------------------------------------------------------------------------------------
From net income
Basic $ 3.58 $ 4.18 $ 1.27
Diluted $ 3.55 $ 4.15 $ 1.26
- -------------------------------------------------------------------------------------------------------------
AVERAGE COMMON SHARES OUTSTANDING
Basic 280 283 287
Diluted 281 285 290
=============================================================================================================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 2
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
December 31 September 30 June 30 March 31 December 31
For the three months ended - in millions, except per share data 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME
Loans and fees on loans $ 461 $ 477 $ 495 $ 507 $ 540
Securities 140 141 155 143 150
Loans held for sale 13 8 15 12 18
Purchased customer receivables 11 11
Other 35 31 27 30 33
- -----------------------------------------------------------------------------------------------------------------------
Total interest income 660 668 692 692 741
- -----------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits 102 106 117 132 149
Borrowed funds 48 51 54 57 68
Capital securities 15 14
Commercial paper 7 7
Liabilities of certain variable interest entities 3 3
- -----------------------------------------------------------------------------------------------------------------------
Total interest expense 175 181 171 189 217
- -----------------------------------------------------------------------------------------------------------------------
Net interest income 485 487 521 503 524
Provision for credit losses 34 50 57 36 65
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Net interest income less provision for credit losses 451 437 464 467 459
- -----------------------------------------------------------------------------------------------------------------------
NONINTEREST INCOME
Asset management 229 216 209 207 202
Fund servicing 193 188 188 193 194
Service charges on deposits 62 60 60 57 61
Brokerage 51 46 46 41 44
Consumer services 63 65 64 59 61
Corporate services 123 132 114 116 151
Equity management (4) (17) (4) (14)
Net securities gains 15 19 26 56 1
Investments held by certain variable interest entities 10 9
Other 115 94 86 70 66
- -----------------------------------------------------------------------------------------------------------------------
Total noninterest income 861 825 776 795 766
- -----------------------------------------------------------------------------------------------------------------------
NONINTEREST EXPENSE
Staff 472 448 446 438 408
Net occupancy 65 63 64 90 62
Equipment 71 67 69 69 68
Marketing 15 16 18 15 11
Distributions on capital securities 14 14 14
Other 235 233 324 230 228
- -----------------------------------------------------------------------------------------------------------------------
Total noninterest expense 858 827 935 856 791
- -----------------------------------------------------------------------------------------------------------------------
Income from continuing operations before minority
and noncontrolling interests and income taxes 454 435 305 406 434
Minority and noncontrolling interests in income of
consolidated entities 6 2 13 11 11
Income taxes 146 152 108 133 145
- -----------------------------------------------------------------------------------------------------------------------
Income from continuing operations 302 281 184 262 278
Income (loss) from discontinued operations (less
applicable income tax benefit of $9) (16)
- -----------------------------------------------------------------------------------------------------------------------
Income before cumulative effect of accounting change 302 281 184 262 262
Cumulative effect of accounting change (less
applicable income tax benefit of $14) (28)
- -----------------------------------------------------------------------------------------------------------------------
Net income $ 274 $ 281 $ 184 $ 262 $ 262
- -----------------------------------------------------------------------------------------------------------------------
EARNINGS PER COMMON SHARE
From continuing operations
Basic $1.09 $1.01 $ .65 $ .93 $ .97
Diluted $1.08 $1.00 $ .65 $ .92 $ .97
From net income
Basic $ .99 $1.01 $ .65 $ .93 $ .92
Diluted $ .98 $1.00 $ .65 $ .92 $ .92
- -----------------------------------------------------------------------------------------------------------------------
AVERAGE COMMON SHARES OUTSTANDING
Basic 276 278 281 283 284
Diluted (a) 278 280 282 284 286
=======================================================================================================================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 3
CONSOLIDATED BALANCE SHEET (Unaudited)
December 31 September 30 June 30 March 31 December 31
In millions, except par value 2003 2003 2003 2003 2002
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ASSETS
Cash and due from banks $ 2,968 $ 3,150 $ 3,797 $ 3,626 $ 3,201
Federal funds sold 50 850 1,913 1,847
Other short-term investments 2,546 2,533 1,554 2,012 1,811
Loans held for sale 1,400 1,531 1,475 1,702 1,607
Securities 15,690 14,907 16,017 14,973 13,763
Loans, net of unearned income of $1,009, $1,037, $1,018,
$1,018 and $1,075 34,080 34,514 34,534 35,245 35,450
Allowance for credit losses (632) (648) (673) (680) (673)
- ---------------------------------------------------------------------------------------------------------------------------------
Net loans 33,448 33,866 33,861 34,565 34,777
Goodwill 2,390 2,385 2,356 2,356 2,313
Other intangible assets 317 311 316 330 333
Purchased customer receivables 2,223 2,481
Other 7,136 7,539 7,036 7,142 6,725
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets $ 68,168 $ 68,703 $ 67,262 $ 68,619 $ 66,377
=================================================================================================================================
LIABILITIES
Deposits
Noninterest-bearing $ 11,505 $ 12,118 $ 13,368 $ 12,460 $ 10,563
Interest-bearing 33,736 33,405 33,326 34,621 34,419
- ---------------------------------------------------------------------------------------------------------------------------------
Total deposits 45,241 45,523 46,694 47,081 44,982
Borrowed funds
Federal funds purchased 169 881 36 34 38
Repurchase agreements 1,081 1,048 1,015 1,082 814
Bank notes and senior debt 2,823 2,839 3,306 3,850 4,400
Federal Home Loan Bank borrowings 1,115 1,127 1,134 1,146 1,256
Subordinated debt 3,729 1,980 2,260 2,234 2,423
Mandatorily redeemable capital securities of
subsidiary trusts 848
Commercial paper 2,226 2,483
Liabilities of certain variable interest entities 144 160
Other borrowed funds 166 188 152 188 185
- ---------------------------------------------------------------------------------------------------------------------------------
Total borrowed funds 11,453 11,554 7,903 8,534 9,116
Allowance for unfunded loan commitments
and letters of credit 90 89 78 77 84
Accrued expenses 2,275 2,226 2,269 2,023 2,046
Other 2,002 2,193 2,435 3,020 2,172
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 61,061 61,585 59,379 60,735 58,400
- ---------------------------------------------------------------------------------------------------------------------------------
Minority and noncontrolling interests in consolidated entities 462 480 261 244 270
Mandatorily redeemable capital securities of
subsidiary trusts 848 848 848
SHAREHOLDERS' EQUITY
Preferred stock
Common stock - $5 par value
Authorized 800 shares, issued 353 shares 1,764 1,764 1,764 1,764 1,764
Capital surplus 1,108 1,110 1,100 1,102 1,101
Retained earnings 7,642 7,507 7,360 7,311 7,187
Deferred benefit expense (29) (24) (27) (28) (9)
Accumulated other comprehensive income 60 148 304 293 321
Common stock held in treasury at cost: 76, 76, 73, 71,
and 68 shares (3,900) (3,867) (3,727) (3,650) (3,505)
- ---------------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 6,645 6,638 6,774 6,792 6,859
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority and noncontrolling interests, capital
securities and shareholders' equity $ 68,168 $ 68,703 $ 67,262 $ 68,619 $ 66,377
=================================================================================================================================
CAPITAL RATIOS
Tier I risk-based (a) 9.5 % 8.7 % 8.9 % 8.7 % 8.8 %
Total risk-based (a) 13.7 12.0 12.3 12.3 12.5
Leverage (a) 8.2 7.6 8.1 8.0 8.1
Shareholders' equity to total assets 9.75 9.66 10.07 9.90 10.33
Common shareholders' equity to total assets 9.73 9.65 10.06 9.89 10.32
ASSET QUALITY RATIOS
Nonperforming assets to total loans,
loans held for sale and foreclosed assets .92 % 1.10 % 1.12 % 1.10 % 1.13 %
Nonperforming loans to total loans .78 .94 .95 .95 .87
Allowance for credit losses to total loans 1.85 1.88 1.95 1.93 1.90
Allowance for credit losses to nonperforming loans 238 200 206 203 218
Net charge-offs to average loans (For the three months ended) .57 .73 .73 .42 .39
=================================================================================================================================
(a) Estimated for December 31, 2003.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 4
RESULTS OF BUSINESSES - SUMMARY (Unaudited) (a)
Year ended - dollars in millions
December 31 December 31
EARNINGS (LOSS) 2003 2002
- -----------------------------------------------------------------------------------------------------------------
Banking Businesses
Regional Community Banking $ 608 $ 697
Wholesale Banking
Corporate Banking 173 150
PNC Real Estate Finance 102 90
PNC Business Credit 31 40
- -----------------------------------------------------------------------------------------------------------------
Total wholesale banking 306 280
PNC Advisors 72 97
- -----------------------------------------------------------------------------------------------------------------
Total banking businesses 986 1,074
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Asset management and processing businesses
BlackRock 155 133
PFPC 61 65
- -----------------------------------------------------------------------------------------------------------------
Total asset management and processing businesses 216 198
- -----------------------------------------------------------------------------------------------------------------
Total business earnings 1,202 1,272
Intercompany eliminations (6) (9)
Other (167) (63)
- -----------------------------------------------------------------------------------------------------------------
Results from continuing operations 1,029 1,200
Discontinued operations (16)
- -----------------------------------------------------------------------------------------------------------------
Results before cumulative effect of accounting change 1,029 1,184
Cumulative effect of accounting change (28)
- -----------------------------------------------------------------------------------------------------------------
Total consolidated $ 1,001 $ 1,184
=================================================================================================================
December 31 December 31
REVENUE (b) 2003 2002
- -----------------------------------------------------------------------------------------------------------------
Banking Businesses
Regional Community Banking $ 2,064 $ 2,182
Wholesale Banking
Corporate Banking 685 786
PNC Real Estate Finance 267 229
PNC Business Credit 192 182
- -----------------------------------------------------------------------------------------------------------------
Total wholesale banking 1,144 1,197
PNC Advisors 615 654
- -----------------------------------------------------------------------------------------------------------------
Total banking businesses 3,823 4,033
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Asset Management and Processing Businesses
BlackRock 598 577
PFPC 762 817
- -----------------------------------------------------------------------------------------------------------------
Total asset management and processing businesses 1,360 1,394
- -----------------------------------------------------------------------------------------------------------------
Total business revenue 5,183 5,427
Intercompany eliminations (89) (101)
Other 169 81
- -----------------------------------------------------------------------------------------------------------------
Total consolidated $ 5,263 $ 5,407
=================================================================================================================
(a) See "Review of Businesses" within the Financial Review section of the
Corporation's 2002 Annual Report to Shareholders included as Exhibit 13 in
the Corporation's 2002 Annual Report on Form 10-K for additional
information regarding presentation of results for the Corporation's major
businesses. The Corporation's line of business information is based on
management information systems, assumptions and methodologies that are
under review on an ongoing basis.
(b) Business revenue is presented on a taxable-equivalent basis except for
BlackRock and PFPC, which are presented on a book (GAAP) basis. The
interest income earned on certain assets is completely or partially exempt
from federal income tax. As such, these tax-exempt instruments typically
yield lower returns than a taxable investment. In order to provide accurate
comparisons of yields and margins for all earning assets, the interest
income earned on tax-exempt assets has been increased to make them fully
equivalent to other taxable interest income investments. A reconciliation
of total consolidated revenue on a book basis to total consolidated revenue
on a taxable-equivalent basis is as follows (in millions):
December 31 December 31
2003 2002
------------------------------
Total consolidated revenue, book (GAAP) basis $ 5,253 $ 5,394
Taxable-equivalent adjustment 10 13
------------------------------
Total consolidated revenue, taxable-equivalent basis $ 5,263 $ 5,407
==============================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 5
RESULTS OF BUSINESSES - SUMMARY (Unaudited) (a)
Three months ended - dollars in millions
December 31 September 30 June 30 March 31 December 31
EARNINGS (LOSS) 2003 2003 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------
Banking Businesses
Regional Community Banking $ 159 $ 138 $ 159 $ 152 $ 152
Wholesale Banking
Corporate Banking 61 37 33 42 33
PNC Real Estate Finance 28 34 24 16 23
PNC Business Credit 5 6 6 14 28
- ------------------------------------------------------------------------------------------------------------------------
Total wholesale banking 94 77 63 72 84
PNC Advisors 16 20 20 16 13
- ------------------------------------------------------------------------------------------------------------------------
Total banking businesses 269 235 242 240 249
- ------------------------------------------------------------------------------------------------------------------------
Asset Management and Processing Businesses
BlackRock 41 40 39 35 34
PFPC 18 16 15 12 8
- ------------------------------------------------------------------------------------------------------------------------
Total asset management and processing
businesses 59 56 54 47 42
- ------------------------------------------------------------------------------------------------------------------------
Total business earnings 328 291 296 287 291
Intercompany eliminations (1) (2) (1) (2) (2)
Other (25) (8) (111) (23) (11)
- ------------------------------------------------------------------------------------------------------------------------
Results from continuing operations 302 281 184 262 278
Discontinued operations (16)
- ------------------------------------------------------------------------------------------------------------------------
Results before cumulative effect of
accounting change 302 281 184 262 262
Cumulative effect of accounting change (28)
- ------------------------------------------------------------------------------------------------------------------------
Total consolidated $ 274 $ 281 $ 184 $ 262 $ 262
========================================================================================================================
December 31 September 30 June 30 March 31 December 31
REVENUE (b) 2003 2003 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------
Banking Businesses
Regional Community Banking $ 506 $ 503 $ 537 $ 518 $ 511
Wholesale Banking
Corporate Banking 172 165 159 189 198
PNC Real Estate Finance 69 80 62 56 58
PNC Business Credit 55 47 46 44 49
- ------------------------------------------------------------------------------------------------------------------------
Total wholesale banking 296 292 267 289 305
PNC Advisors 159 155 154 147 150
- ------------------------------------------------------------------------------------------------------------------------
Total banking businesses 961 950 958 954 966
- ------------------------------------------------------------------------------------------------------------------------
Asset management and processing businesses
BlackRock 161 150 144 143 137
PFPC 194 188 187 193 195
- ------------------------------------------------------------------------------------------------------------------------
Total asset management and processing
businesses 355 338 331 336 332
- ------------------------------------------------------------------------------------------------------------------------
Total business revenue 1,316 1,288 1,289 1,290 1,298
Intercompany eliminations (21) (21) (25) (22) (22)
Other 54 47 35 33 17
- ------------------------------------------------------------------------------------------------------------------------
Total consolidated $ 1,349 $ 1,314 $ 1,299 $ 1,301 $ 1,293
========================================================================================================================
(a) See "Review of Businesses" within the Financial Review section of the
Corporation's 2002 Annual Report to Shareholders included as Exhibit 13 in
the Corporation's 2002 Annual Report on Form 10-K for additional
information regarding presentation of results for the Corporation's major
businesses. The Corporation's line of business information is based on
management information systems, assumptions and methodologies that are
under review on an ongoing basis.
(b) Business revenue is presented on a taxable-equivalent basis except for
BlackRock and PFPC, which are presented on a book (GAAP) basis. A
reconciliation of total consolidated revenue on a book basis to total
consolidated revenue on a taxable-equivalent basis is as follows (in
millions):
December 31 September 30 June 30 March 31 December 31
2003 2003 2003 2003 2002
-----------------------------------------------------------------------
Total consolidated revenue, book (GAAP) basis $ 1,346 $ 1,312 $ 1,297 $ 1,298 $ 1,290
Taxable-equivalent adjustment 3 2 2 3 3
-----------------------------------------------------------------------
Total consolidated revenue, taxable-equivalent basis $ 1,349 $ 1,314 $ 1,299 $ 1,301 $ 1,293
=======================================================================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 6
REGIONAL COMMUNITY BANKING (Unaudited)
Year ended
Taxable-equivalent basis December 31 December 31
Dollars in millions 2003 2002
- -----------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 1,267 $ 1,409
Other noninterest income 704 689
Net securities gains 93 84
- -----------------------------------------------------------------------------------------------------------------
Total revenue 2,064 2,182
Provision for credit losses 46 52
Noninterest expense 1,094 1,061
- -----------------------------------------------------------------------------------------------------------------
Pretax earnings 924 1,069
Income taxes 316 372
- -----------------------------------------------------------------------------------------------------------------
Earnings $ 608 $ 697
=================================================================================================================
AVERAGE BALANCE SHEET
Loans
Consumer
Home equity $ 8,285 $ 7,101
Indirect 477 541
Other consumer 510 632
- -----------------------------------------------------------------------------------------------------------------
Total consumer 9,272 8,274
Residential mortgage 2,893 4,110
Commercial 3,946 3,599
Vehicle leasing 1,069 1,678
Other 117 119
- -----------------------------------------------------------------------------------------------------------------
Total loans 17,297 17,780
Securities 14,169 11,139
Education and other loans held for sale 1,164 1,319
Assigned assets and other assets 5,820 8,738
- -----------------------------------------------------------------------------------------------------------------
Total assets $ 38,450 $ 38,976
=================================================================================================================
Deposits
Noninterest-bearing demand $ 5,570 $ 5,046
Interest-bearing demand 6,313 6,057
Money market 12,303 12,279
Savings 2,023 1,962
Certificates 8,572 10,045
- -----------------------------------------------------------------------------------------------------------------
Total deposits 34,781 35,389
Other liabilities 1,072 958
Assigned capital 2,597 2,629
- -----------------------------------------------------------------------------------------------------------------
Total funds $ 38,450 $ 38,976
=================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 23% 27%
Noninterest income to total revenue 39 35
Efficiency 53 49
=================================================================================================================
OTHER INFORMATION (a)
Total nonperforming assets (b) $ 90 $ 82
Vehicle leasing outstandings, net of unearned income $ 698 $ 1,386
Net charge-offs $ 53 $ 56
Home equity portfolio credit statistics:
Percentage of first lien positions 51% 40%
Weighted average loan-to-value ratios 70% 70%
Weighted average FICO scores 713 709
Gains on sales of education loans (c) $ 20 $ 23
Average FTE staff 9,447 9,657
ATMs 3,600 3,550
Branches 719 714
Financial consultants 693 645
Business banking centers 208 193
Checking relationships 1,611,000 1,542,000
Online banking users 762,000 607,000
Deposit households using online banking 43.2% 36.6%
=================================================================================================================
(a) Presented as of period-end, except for net charge-offs, gains on sales of
education loans and average FTEs.
(b) See Note (a) on page 26 of this financial supplement. The impact of this
change was reflected in the amount at December 31, 2003.
(c) Included in other noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 7
REGIONAL COMMUNITY BANKING (Unaudited)
Three months ended
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Dollars in millions 2003 2003 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 307 $ 309 $ 334 $ 317 $ 331
Other noninterest income 183 177 181 163 180
Net securities gains 16 17 22 38
- ------------------------------------------------------------------------------------------------------------------------
Total revenue 506 503 537 518 511
Provision for credit losses 14 11 13 8 15
Noninterest expense 252 282 282 278 264
- ------------------------------------------------------------------------------------------------------------------------
Pretax earnings 240 210 242 232 232
Income taxes 81 72 83 80 80
- ------------------------------------------------------------------------------------------------------------------------
Earnings $ 159 $ 138 $ 159 $ 152 $ 152
========================================================================================================================
AVERAGE BALANCE SHEET
Loans
Consumer
Home equity $ 8,926 $ 8,476 $ 8,047 $ 7,675 $ 7,395
Indirect 510 492 468 438 458
Other consumer 474 504 516 546 582
- ------------------------------------------------------------------------------------------------------------------------
Total consumer 9,910 9,472 9,031 8,659 8,435
Residential mortgage 2,751 2,585 2,970 3,276 3,146
Commercial 3,934 3,911 4,001 3,939 3,857
Vehicle leasing 790 980 1,177 1,336 1,464
Other 120 114 117 117 115
- ------------------------------------------------------------------------------------------------------------------------
Total loans 17,505 17,062 17,296 17,327 17,017
Securities 15,133 14,792 14,211 12,504 11,982
Education and other loans held for sale 1,158 1,105 1,197 1,197 1,215
Assigned assets and other assets 4,185 5,448 5,731 7,961 8,661
- ------------------------------------------------------------------------------------------------------------------------
Total assets $ 37,981 $ 38,407 $ 38,435 $ 38,989 $ 38,875
========================================================================================================================
Deposits
Noninterest-bearing demand $ 5,799 $ 5,739 $ 5,471 $ 5,264 $ 5,242
Interest-bearing demand 6,601 6,397 6,136 6,112 6,191
Money market 12,140 12,307 12,407 12,361 12,184
Savings 2,020 2,050 2,046 1,976 1,950
Certificates 8,047 8,234 8,666 9,360 9,653
- ------------------------------------------------------------------------------------------------------------------------
Total deposits 34,607 34,727 34,726 35,073 35,220
Other liabilities 801 1,093 1,112 1,285 1,035
Assigned capital 2,573 2,587 2,597 2,631 2,620
- ------------------------------------------------------------------------------------------------------------------------
Total funds $ 37,981 $ 38,407 $ 38,435 $ 38,989 $ 38,875
========================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 25% 21% 25% 23% 23%
Noninterest income to total revenue 39 39 38 39 35
Efficiency 50 56 53 54 52
========================================================================================================================
OTHER INFORMATION (a)
Total nonperforming assets (b) $ 90 $ 74 $ 75 $ 86 $ 82
Vehicle leasing outstandings, net
of unearned income $ 698 $ 872 $ 1,048 $ 1,239 $ 1,386
Net charge-offs $ 15 $ 12 $ 13 $ 13 $ 15
Home equity portfolio credit statistics:
Percentage of first lien positions 51% 50% 46% 43% 40%
Weighted average loan-to-value ratios 70% 70% 72% 70% 70%
Weighted average FICO scores 713 712 712 709 709
Gains on sales of education loans (c) $ 8 $ 4 $ 7 $ 1 $ 10
Average FTE staff 9,474 9,524 9,447 9,404 9,610
ATMs 3,600 3,664 3,660 3,594 3,550
Branches 719 715 713 713 714
Financial consultants 693 702 693 674 645
Business banking centers 208 208 193 193 193
Checking relationships 1,611,000 1,606,000 1,575,000 1,555,000 1,542,000
Online banking users 762,000 728,000 684,000 647,000 607,000
Deposit households using online banking 43.2% 41.7% 40.2% 38.6% 36.6%
========================================================================================================================
(a) Presented as of period-end, except for net charge-offs, gains on sales of
education loans and average FTEs.
(b) See Note (a) on page 26 of this financial supplement. The impact of this
change was reflected in the amount at December 31, 2003.
(c) Included in other noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 8
WHOLESALE BANKING - CORPORATE BANKING (Unaudited)
Year ended
Taxable-equivalent basis December 31 December 31
Dollars in millions 2003 2002
- -----------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 301 $ 349
Noninterest income 384 437
- -----------------------------------------------------------------------------------------------------------------
Total revenue 685 786
Provision for credit losses 48 203
Noninterest expense 370 359
- -----------------------------------------------------------------------------------------------------------------
Pretax earnings 267 224
Income taxes 94 74
- -----------------------------------------------------------------------------------------------------------------
Earnings $ 173 $ 150
=================================================================================================================
AVERAGE BALANCE SHEET
Loans $ 8,180 $ 9,477
Purchased customer receivables 1,230
Loans held for sale 202 1,369
Other assets 2,855 2,961
- -----------------------------------------------------------------------------------------------------------------
Total assets $ 12,467 $ 13,807
=================================================================================================================
Deposits $ 5,135 $ 4,683
Commercial paper 1,232
Assigned funds and other liabilities 5,254 8,088
Assigned capital 846 1,036
- -----------------------------------------------------------------------------------------------------------------
Total funds $ 12,467 $ 13,807
=================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 20% 14%
Noninterest income to total revenue 56 56
Efficiency 54 46
=================================================================================================================
OTHER INFORMATION (a)
Consolidated revenue from treasury
management (b) $ 347 $ 343
Total nonperforming assets $ 116 $ 187
Net charge-offs $ 90 $ 137
Average FTE staff 1,890 2,123
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 85 $ 564
Outstandings $ 51 $ 245
Exit portfolio
Credit exposure $ 51 $ 413
Outstandings
Net gains on loans held for sale (c) $ 62 $ 155
=================================================================================================================
(a) Presented as of period-end, except for consolidated revenue from treasury
management, net charge-offs, net gains on loans held for sale and average
FTEs.
(b) Treasury management products offered through Corporate Banking are sold by
several businesses across PNC and related revenue net of expense is
included in the results of those businesses.
(c) Included in noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 9
WHOLESALE BANKING - CORPORATE BANKING (Unaudited)
Three months ended
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Dollars in millions 2003 2003 2003 2003 2002
- -----------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 77 $ 77 $ 71 $ 76 $ 78
Noninterest income 95 88 88 113 120
- ---------------------------------------------------------------------------------------------------------
Total revenue 172 165 159 189 198
Provision for credit losses (15) 23 25 15 64
Noninterest expense 92 85 84 109 87
- ---------------------------------------------------------------------------------------------------------
Pretax earnings 95 57 50 65 47
Income taxes 34 20 17 23 14
- ---------------------------------------------------------------------------------------------------------
Earnings $ 61 $ 37 $ 33 $ 42 $ 33
=========================================================================================================
AVERAGE BALANCE SHEET
Loans $ 7,848 $ 8,017 $ 8,262 $ 8,604 $ 8,821
Purchased customer receivables 2,384 2,496
Loans held for sale 169 154 196 291 464
Other assets 2,876 2,891 2,896 2,755 3,133
- ---------------------------------------------------------------------------------------------------------
Total assets $ 13,277 $ 13,558 $ 11,354 $ 11,650 $ 12,418
=========================================================================================================
Deposits $ 5,221 $ 5,230 $ 4,990 $ 5,097 $ 4,906
Commercial paper 2,386 2,502
Assigned funds and other liabilities 4,848 4,990 5,512 5,679 6,581
Assigned capital 822 836 852 874 931
- ---------------------------------------------------------------------------------------------------------
Total funds $ 13,277 $ 13,558 $ 11,354 $ 11,650 $ 12,418
=========================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 29 % 18 % 16 % 19 % 14 %
Noninterest income to total revenue 55 53 55 60 61
Efficiency 53 52 53 58 44
=========================================================================================================
OTHER INFORMATION (a)
Consolidated revenue from treasury
management (b) $ 85 $ 87 $ 86 $ 89 $ 86
Total nonperforming assets $ 116 $ 168 $ 176 $ 166 $ 187
Net charge-offs $ 12 $ 18 $ 42 $ 18 $ 15
Average FTE staff 1,882 1,879 1,888 1,971 2,109
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 85 $ 126 $ 173 $ 315 $ 564
Outstandings $ 51 $ 75 $ 101 $ 155 $ 245
Exit portfolio
Credit exposure $ 51 $ 61 $ 251 $ 349 $ 413
Outstandings $ 10 $ 11 $ 4
Net gains on loans held for sale (c) $ 15 $ 17 $ 13 $ 17 $ 55
=========================================================================================================
(a) Presented as of period-end, except for consolidated revenue from treasury
management, net charge-offs, net gains on loans held for sale and average
FTEs.
(b) Treasury management products offered through Corporate Banking are sold by
several businesses across PNC and related revenue net of expense is
included in the results of those businesses.
(c) Included in noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 10
WHOLESALE BANKING - PNC REAL ESTATE FINANCE (Unaudited)
Year ended
Taxable-equivalent basis December 31 December 31
Dollars in millions 2003 2002
- --------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 103 $ 117
Noninterest income
Net commercial mortgage banking
Net gains on loan sales 52 31
Servicing and other fees, net of amortization 39 40
Other 73 41
- ------------------------------------------------------------------------------------------
Total noninterest income 164 112
- ------------------------------------------------------------------------------------------
Total revenue 267 229
Provision for credit losses (7) (10)
Noninterest expense 199 160
- ------------------------------------------------------------------------------------------
Pretax earnings 75 79
Noncontrolling interests in income of consolidated entities (21) (2)
Income tax (benefit) expense (6) (9)
- ------------------------------------------------------------------------------------------
Earnings $ 102 $ 90
==========================================================================================
AVERAGE BALANCE SHEET
Loans
Commercial real estate $ 1,872 $ 2,230
Commercial - real estate related 1,404 1,471
- ------------------------------------------------------------------------------------------
Total loans 3,276 3,701
Commercial mortgages held for sale 324 271
Other loans held for sale 25 141
Other assets 1,133 905
- ------------------------------------------------------------------------------------------
Total assets $ 4,758 $ 5,018
==========================================================================================
Deposits $ 1,133 $ 750
Liabilities of certain variable interest entities 64
Noncontrolling interests in consolidated entities 67
Assigned funds and other liabilities 3,142 3,876
Assigned capital 352 392
- ------------------------------------------------------------------------------------------
Total funds $ 4,758 $ 5,018
==========================================================================================
PERFORMANCE RATIOS
Return on assigned capital 29 % 23 %
Noninterest income to total revenue 61 49
Efficiency 75 70
==========================================================================================
OTHER INFORMATION (a)
Total nonperforming assets $ 3 $ 2
Net charge-offs (recoveries) $ 1 $ (6)
Average FTE staff 743 789
Commercial mortgage servicing portfolio (b) $ 83 $ 74
Net carrying amount of commercial mortgage servicing rights $ 209 $ 201
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 16 $ 49
Outstandings $ 16 $ 44
Exit portfolio
Credit exposure $ 25
Outstandings $ 4
Net gains on loans held for sale (c) $ 8 $ 3
==========================================================================================
(a) Presented as of period-end, except for net charge-offs (recoveries), net
gains on loans held for sale and average FTEs.
(b) In billions.
(c) Included in noninterest income - other above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 11
WHOLESALE BANKING - PNC REAL ESTATE FINANCE (Unaudited)
Three months ended
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Dollars in millions 2003 2003 2003 2003 2002
- -----------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 22 $ 25 $ 28 $ 28 $ 30
Noninterest income
Net commercial mortgage banking
Net gains on loan sales 14 15 13 10 12
Servicing and other fees, net of amortization 9 11 8 11 10
Other 24 29 13 7 6
- -------------------------------------------------------------------------------------------------------------------
Total noninterest income 47 55 34 28 28
- -------------------------------------------------------------------------------------------------------------------
Total revenue 69 80 62 56 58
Provision for credit losses (6) (8) (1) 8 (3)
Noninterest expense 59 58 44 38 41
- -------------------------------------------------------------------------------------------------------------------
Pretax earnings 16 30 19 10 20
Noncontrolling interests in income of
consolidated entities (8) (11) (2)
Income tax (benefit) expense (4) 7 (3) (6) (3)
- -------------------------------------------------------------------------------------------------------------------
Earnings $ 28 $ 34 $ 24 $ 16 $ 23
===================================================================================================================
AVERAGE BALANCE SHEET
Loans
Commercial real estate $ 1,350 $ 1,841 $ 1,953 $ 2,052 $ 2,167
Commercial - real estate related 1,647 1,431 1,438 1,397 1,463
- -------------------------------------------------------------------------------------------------------------------
Total loans 2,997 3,272 3,391 3,449 3,630
Commercial mortgages held for sale 348 228 373 315 327
Other loans held for sale 18 24 37 53 94
Other assets 1,454 1,159 964 950 970
- -------------------------------------------------------------------------------------------------------------------
Total assets $ 4,817 $ 4,683 $ 4,765 $ 4,767 $ 5,021
===================================================================================================================
Deposits $ 1,308 $ 1,226 $ 1,044 $ 950 $ 892
Liabilities of certain variable interest entities 156 98
Noncontrolling interests in consolidated
entities 227 39
Assigned funds and other liabilities 2,787 2,975 3,368 3,454 3,746
Assigned capital 339 345 353 363 383
- -------------------------------------------------------------------------------------------------------------------
Total funds $ 4,817 $ 4,683 $ 4,765 $ 4,767 $ 5,021
===================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 33 % 39 % 27 % 18 % 24 %
Noninterest income to total revenue 68 69 55 50 48
Efficiency 86 73 71 68 71
===================================================================================================================
OTHER INFORMATION (a)
Total nonperforming assets $ 3 $ 3 $ 3 $ 12 $ 2
Net (recoveries) charge-offs $ (1) $ 2
Average FTE staff 738 742 747 770 780
Commercial mortgage servicing portfolio (b) $ 83 $ 80 $ 79 $ 75 $ 74
Net carrying amount of commercial
mortgage servicing rights $ 209 $ 200 $ 199 $ 201 $ 201
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 16 $ 16 $ 16 $ 19 $ 49
Outstandings $ 16 $ 16 $ 16 $ 19 $ 44
Exit portfolio
Credit exposure $ 25 $ 25
Outstandings $ 5 $ 4
Net gains (losses) on loans held for sale (c) $ 1 $ 6 $ 1 $ (3)
===================================================================================================================
(a) Presented as of period-end, except for net (recoveries) charge-offs, net
gains (losses) on loans held for sale and average FTEs.
(b) In billions.
(c) Included in noninterest income - other above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 12
WHOLESALE BANKING - PNC BUSINESS CREDIT (Unaudited)
Year ended
Taxable-equivalent basis December 31 December 31
Dollars in millions 2003 2002
- -------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 136 $ 134
Noninterest income 56 48
- -----------------------------------------------------------------------
Total revenue 192 182
Provision for credit losses 81 64
Noninterest expense 61 53
- -----------------------------------------------------------------------
Pretax earnings 50 65
Income taxes 19 25
- -----------------------------------------------------------------------
Earnings $ 31 $ 40
=======================================================================
AVERAGE BALANCE SHEET
Loans $ 3,551 $ 3,535
Loans held for sale 21 68
Other assets 245 234
- -----------------------------------------------------------------------
Total assets $ 3,817 $ 3,837
=======================================================================
Deposits $ 105 $ 84
Assigned funds and other liabilities 3,464 3,503
Assigned capital 248 250
- -----------------------------------------------------------------------
Total funds $ 3,817 $ 3,837
=======================================================================
PERFORMANCE RATIOS
Return on assigned capital 13 % 16 %
Noninterest income to total revenue 29 26
Efficiency 32 29
=======================================================================
OTHER INFORMATION (a)
Total nonperforming assets $ 108 $ 142
Net charge-offs $ 67 $ 32
NBOC put option liability $ 57
NBOC put option valuation income (b) $ 8 $ 28
Marketing locations 24 23
Average FTE staff 252 241
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 3 $ 13
Outstandings $ 3 $ 9
Net losses on loans held for sale (b) $ (1) $ (11)
=======================================================================
(a) Presented as of period-end, except for net charge-offs, NBOC put option
valuation income, net losses on loans held for sale and average FTEs.
(b) Included in noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 13
WHOLESALE BANKING - PNC BUSINESS CREDIT (Unaudited)
Three months ended
Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Dollars in millions 2003 2003 2003 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 35 $ 35 $ 34 $ 32 $ 33
Noninterest income 20 12 12 12 16
- -----------------------------------------------------------------------------------------------------------------------------
Total revenue 55 47 46 44 49
Provision for credit losses 30 23 21 7 (8)
Noninterest expense 17 15 15 14 12
- -----------------------------------------------------------------------------------------------------------------------------
Pretax earnings 8 9 10 23 45
Income taxes 3 3 4 9 17
- -----------------------------------------------------------------------------------------------------------------------------
Earnings $ 5 $ 6 $ 6 $ 14 $ 28
=============================================================================================================================
AVERAGE BALANCE SHEET
Loans $ 3,658 $ 3,633 $ 3,528 $ 3,381 $ 3,490
Loans held for sale 12 30 24 18 23
Other assets 263 263 225 229 225
- -----------------------------------------------------------------------------------------------------------------------------
Total assets $ 3,933 $ 3,926 $ 3,777 $ 3,628 $ 3,738
=============================================================================================================================
Deposits $ 126 $ 106 $ 106 $ 82 $ 102
Assigned funds and other liabilities 3,547 3,568 3,428 3,309 3,392
Assigned capital 260 252 243 237 244
- -----------------------------------------------------------------------------------------------------------------------------
Total funds $ 3,933 $ 3,926 $ 3,777 $ 3,628 $ 3,738
=============================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 8 % 9 % 10 % 24 % 46 %
Noninterest income to total revenue 36 26 26 27 33
Efficiency 31 32 33 32 24
=============================================================================================================================
OTHER INFORMATION (a)
Total nonperforming assets $ 108 $ 140 $ 145 $ 139 $ 142
Net charge-offs $ 22 $ 34 $ 6 $ 5 $ 6
NBOC put option liability $ 43 $ 49 $ 57
NBOC put option valuation income (b) $ 1 $ 1 $ 6 $ 9
Marketing locations 24 24 24 24 23
Average FTE staff 253 255 249 250 249
INSTITUTIONAL LENDING REPOSITIONING
Loans held for sale
Credit exposure $ 3 $ 8 $ 10 $ 10 $ 13
Outstandings $ 3 $ 7 $ 9 $ 7 $ 9
Net gains (losses) on loans held for sale (b) $ 2 $ (3)
=============================================================================================================================
(a) Presented as of period-end, except for net charge-offs, NBOC put option
valuation income, net gains (losses) on loans held for sale and average
FTEs.
(b) Included in noninterest income above.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 14
PNC ADVISORS (Unaudited)
Year ended; Taxable-equivalent basis December 31 December 31
Dollars in millions except as noted 2003 2002
- ----------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 82 $ 100
Noninterest income
Investment management and trust 313 334
Brokerage 123 131
Other 97 89
- ----------------------------------------------------------------------------------------------------------------------
Total noninterest income 533 554
- ----------------------------------------------------------------------------------------------------------------------
Total revenue 615 654
Provision for credit losses 3 4
Noninterest expense 500 497
- ----------------------------------------------------------------------------------------------------------------------
Pretax earnings 112 153
Income taxes 40 56
- ----------------------------------------------------------------------------------------------------------------------
Earnings $ 72 $ 97
======================================================================================================================
AVERAGE BALANCE SHEET
Loans
Consumer $ 1,317 $ 1,228
Residential mortgage 244 501
Commercial 438 460
Other 287 320
- ----------------------------------------------------------------------------------------------------------------------
Total loans 2,286 2,509
Other assets 626 420
- ----------------------------------------------------------------------------------------------------------------------
Total assets $ 2,912 $ 2,929
======================================================================================================================
Deposits $ 2,122 $ 2,007
Assigned funds and other liabilities 262 399
Assigned capital 528 523
- ----------------------------------------------------------------------------------------------------------------------
Total funds $ 2,912 $ 2,929
======================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 14 % 19 %
Noninterest income to total revenue 87 85
Efficiency 81 76
======================================================================================================================
ASSETS UNDER ADMINISTRATION (in billions) (a) (b)
Assets under management
Personal $ 44 $ 41
Institutional 9 9
- ----------------------------------------------------------------------------------------------------------------------
Total $ 53 $ 50
- ----------------------------------------------------------------------------------------------------------------------
Asset type
Equity $ 31 $ 26
Fixed income 16 17
Liquidity/other 6 7
- ----------------------------------------------------------------------------------------------------------------------
Total $ 53 $ 50
- ----------------------------------------------------------------------------------------------------------------------
Nondiscretionary assets under administration
Personal $ 22 $ 20
Institutional 65 62
- ----------------------------------------------------------------------------------------------------------------------
Total $ 87 $ 82
- ----------------------------------------------------------------------------------------------------------------------
Asset Type
Equity $ 30 $ 27
Fixed income 30 29
Liquidity/other 27 26
- ----------------------------------------------------------------------------------------------------------------------
Total $ 87 $ 82
======================================================================================================================
OTHER INFORMATION (b)
Total nonperforming assets $ 11 $ 5
Brokerage assets administered (in billions) $ 37 $ 32
Full service brokerage offices 98 106
Financial consultants 549 615
Margin loans $ 256 $ 260
Average FTE staff 3,093 3,351
======================================================================================================================
(a) Excludes brokerage assets administered.
(b) Presented as of period-end, except for average FTEs.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 15
PNC ADVISORS (Unaudited)
Three months ended; Taxable-equivalent basis December 31 September 30 June 30 March 31 December 31
Dollars in millions except as noted 2003 2003 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Net interest income $ 20 $ 20 $ 21 $ 21 $ 24
Noninterest income
Investment management and trust 81 78 78 76 76
Brokerage 36 30 31 26 29
Other 22 27 24 24 21
- ----------------------------------------------------------------------------------------------------------------------------
Total noninterest income 139 135 133 126 126
- ----------------------------------------------------------------------------------------------------------------------------
Total revenue 159 155 154 147 150
Provision for credit losses 1 1 1 1
Noninterest expense 134 123 121 122 129
- ----------------------------------------------------------------------------------------------------------------------------
Pretax earnings 24 31 32 25 20
Income taxes 8 11 12 9 7
- ----------------------------------------------------------------------------------------------------------------------------
Earnings $ 16 $ 20 $ 20 $ 16 $ 13
============================================================================================================================
AVERAGE BALANCE SHEET
Loans
Consumer $1,370 $1,332 $1,284 $1,280 $1,264
Residential mortgage 173 215 263 327 394
Commercial 414 464 435 439 439
Other 293 285 286 284 276
- ----------------------------------------------------------------------------------------------------------------------------
Total loans 2,250 2,296 2,268 2,330 2,373
Other assets 719 656 588 540 417
- ----------------------------------------------------------------------------------------------------------------------------
Total assets $2,969 $2,952 $2,856 $2,870 $2,790
============================================================================================================================
Deposits $2,161 $2,164 $2,077 $2,085 $2,016
Assigned funds and other liabilities 268 262 255 263 243
Assigned capital 540 526 524 522 531
- ----------------------------------------------------------------------------------------------------------------------------
Total funds $2,969 $2,952 $2,856 $2,870 $2,790
============================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 12 % 15 % 15 % 12 % 10 %
Noninterest income to total revenue 87 87 86 86 84
Efficiency 84 79 79 83 86
============================================================================================================================
ASSETS UNDER ADMINISTRATION (in billions) (a) (b)
Assets under management
Personal $ 44 $ 42 $ 42 $ 40 $ 41
Institutional 9 9 9 9 9
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 53 $ 51 $ 51 $ 49 $ 50
- ----------------------------------------------------------------------------------------------------------------------------
Asset Type
Equity $ 31 $ 28 $ 28 $ 25 $ 26
Fixed income 16 16 16 16 17
Liquidity/other 6 7 7 8 7
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 53 $ 51 $ 51 $ 49 $ 50
- ----------------------------------------------------------------------------------------------------------------------------
Nondiscretionary assets under administration
Personal $ 22 $ 23 $ 20 $ 20 $ 20
Institutional 65 63 65 61 62
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 87 $ 86 $ 85 $ 81 $ 82
- ----------------------------------------------------------------------------------------------------------------------------
Asset Type
Equity $ 30 $ 30 $ 29 $ 27 $ 27
Fixed income 30 29 29 28 29
Liquidity/other 27 27 27 26 26
- ----------------------------------------------------------------------------------------------------------------------------
Total $ 87 $ 86 $ 85 $ 81 $ 82
============================================================================================================================
OTHER INFORMATION (b)
Total nonperforming assets $ 11 $ 11 $ 5 $ 5 $ 5
Brokerage assets administered (in billions) $ 37 $ 35 $ 34 $ 31 $ 32
Full service brokerage offices 98 99 99 102 106
Financial consultants 549 561 577 585 615
Margin loans $ 256 $ 257 $ 253 $ 247 $ 260
Average FTE staff 2,984 3,081 3,118 3,226 3,326
============================================================================================================================
(a) Excludes brokerage assets administered.
(b) Presented as of period-end, except for average FTEs.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 16
BLACKROCK (Unaudited)
Year ended December 31 December 31
Dollars in millions except as noted 2003 2002
- -----------------------------------------------------------------------------------
INCOME STATEMENT
Investment advisory and
administrative fees $ 529 $ 519
Other income 69 58
- --------------------------------------------------------------------------------
Total revenue 598 577
Operating expense 337 320
Fund administration
and servicing costs 33 42
- --------------------------------------------------------------------------------
Total expense 370 362
- --------------------------------------------------------------------------------
Operating income 228 215
Nonoperating income 23 9
- --------------------------------------------------------------------------------
Pretax earnings 251 224
Income taxes 96 91
- --------------------------------------------------------------------------------
Earnings $ 155 $ 133
================================================================================
PERIOD-END BALANCE SHEET
Goodwill and other intangible assets $ 192 $ 183
Other assets 775 681
- --------------------------------------------------------------------------------
Total assets $ 967 $ 864
================================================================================
Other liabilities $ 254 $ 229
Stockholders' equity 713 635
- --------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $ 967 $ 864
================================================================================
PERFORMANCE DATA
Return on equity 23% 24%
Operating margin (a) 40 40
Diluted earnings per share $2.36 $2.04
================================================================================
ASSETS UNDER MANAGEMENT (in billions)
Separate accounts
Fixed income $ 190 $ 157
Liquidity 6 6
Liquidity - securities lending 10 6
Equity 9 10
Alternative investment products 7 5
- --------------------------------------------------------------------------------
Total separate accounts 222 184
Mutual funds (b)
Fixed income 24 19
Liquidity 59 66
Equity 4 4
- --------------------------------------------------------------------------------
Total mutual funds 87 89
- --------------------------------------------------------------------------------
Total assets under management $ 309 $ 273
================================================================================
OTHER INFORMATION
Average FTE staff 962 894
================================================================================
(a) Calculated as operating income divided by total revenue less administration
and servicing costs. A reconciliation of this presentation to operating
margin calculated on a GAAP basis (operating income divided by total
revenue) follows in millions:
Operating income $228 $215
============
Total revenue $598 $577
Less fund administration and servicing costs 33 42
------------
Revenue used for operating margin calculation, as reported 565 535
============
Operating margin, as reported 40% 40%
Operating margin, GAAP basis 38% 37%
PNC believes that operating margin, as reported, is an effective indicator
of management's ability to effectively employ BlackRock's resources.
Fund administration and servicing costs have been excluded from the
operating margin calculation because these costs are a fixed, asset-based
expense which can fluctuate based on the discretion of a third party.
(b) Includes BlackRock Funds, BlackRock Provident Institutional Funds,
BlackRock Closed End Funds, Short Term Investment Fund and BlackRock Global
Series.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 17
BLACKROCK (Unaudited)
Three months ended December 31 September 30 June 30 March 31 December 31
Dollars in millions except as noted 2003 2003 2003 2003 2002
- ---------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Investment advisory and
administration fees $141 $133 $128 $127 $122
Other income 20 17 16 16 15
- -----------------------------------------------------------------------------------------------------
Total revenue 161 150 144 143 137
Operating expense 90 84 81 81 74
Fund administration
and servicing costs 9 8 8 8 8
- -----------------------------------------------------------------------------------------------------
Total expense 99 92 89 89 82
- -----------------------------------------------------------------------------------------------------
Operating income 62 58 55 54 55
Nonoperating income 5 6 8 3 2
- -----------------------------------------------------------------------------------------------------
Pretax earnings 67 64 63 57 57
Income taxes 26 24 24 22 23
- -----------------------------------------------------------------------------------------------------
Earnings $ 41 $ 40 $ 39 $ 35 $ 34
=====================================================================================================
PERIOD-END BALANCE SHEET
Goodwill and other intangible assets $192 $192 $192 $183 $183
Other assets 775 728 709 653 681
- -----------------------------------------------------------------------------------------------------
Total assets $967 $920 $901 $836 $864
=====================================================================================================
Other liabilities $254 $223 $192 $168 $229
Stockholders' equity 713 697 709 668 635
- -----------------------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $967 $920 $901 $836 $864
=====================================================================================================
PERFORMANCE DATA
Return on equity 23% 23% 23% 22% 22%
Operating margin (a) 41 41 40 40 43
Diluted earnings per share $.63 $.61 $.58 $.54 $.52
=====================================================================================================
ASSETS UNDER MANAGEMENT (in billions)
Separate accounts
Fixed income $190 $178 $175 $168 $157
Liquidity 6 6 5 6 6
Liquidity - securities lending 10 10 8 6 6
Equity 9 9 9 9 10
Alternative investment products 7 7 6 6 5
- -----------------------------------------------------------------------------------------------------
Total separate accounts 222 210 203 195 184
Mutual funds (b)
Fixed income 24 23 22 20 19
Liquidity 59 58 58 56 66
Equity 4 3 3 3 4
- -----------------------------------------------------------------------------------------------------
Total mutual funds 87 84 83 79 89
- -----------------------------------------------------------------------------------------------------
Total assets under management $309 $294 $286 $274 $273
=====================================================================================================
OTHER INFORMATION
Average FTE staff 991 976 943 944 938
=====================================================================================================
(a) Calculated as operating income divided by total revenue less administration
and servicing costs. A reconciliation of this presentation to operating
margin calculated on a GAAP basis (operating income divided by total
revenue) follows in millions:
Operating income $ 62 $ 58 $ 55 $ 54 $ 55
========================================================
Total revenue $161 $150 $144 $143 $137
Less fund administration and servicing costs 9 8 8 8 8
--------------------------------------------------------
Revenue used for operating
margin calculation, as reported $152 $142 $136 $135 $129
========================================================
Operating margin, as reported 41% 41% 40% 40% 43%
Operating margin, GAAP basis 38% 38% 38% 38% 40%
PNC believes that operating margin, as reported, is an effective indicator
of management's ability to effectively employ BlackRock's resources.
Fund administration and servicing costs have been excluded from the
operating margin calculation because these costs are a fixed, asset-based
expense which can fluctuate based on the discretion of a third party.
(b) Includes BlackRock Funds, BlackRock Provident Institutional Funds,
BlackRock Closed End Funds, Short Term Investment Fund and BlackRock Global
Series.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 18
PFPC (Unaudited)
Year ended December 31 December 31
Dollars in millions except as noted 2003 2002
- -----------------------------------------------------------------------------
INCOME STATEMENT
Fund servicing revenue $ 762 $ 817
Operating expense 618 650
(Accretion)/amortization of
other intangibles, net (18) (19)
- ---------------------------------------------------------------------------
Net operating income 162 186
Nonoperating income (a) 8 10
Debt financing 69 88
- ---------------------------------------------------------------------------
Pretax earnings 101 108
Income taxes 40 43
- ---------------------------------------------------------------------------
Earnings $ 61 $ 65
===========================================================================
AVERAGE BALANCE SHEET
Goodwill and other intangible assets $ 1,037 $ 1,028
Other assets 872 860
- ---------------------------------------------------------------------------
Total assets $ 1,909 $ 1,888
===========================================================================
Debt financing $ 1,279 $ 1,290
Assigned funds and other liabilities 422 390
Assigned capital 208 208
- ---------------------------------------------------------------------------
Total funds $ 1,909 $ 1,888
===========================================================================
PERFORMANCE RATIOS
Return on assigned capital 29% 31%
Operating margin 21 23
===========================================================================
SERVICING STATISTICS
Accounting/administration net assets (b)
Domestic $ 622 $ 481
Foreign (c) 45 29
- ---------------------------------------------------------------------------
Total $ 667 $ 510
- ---------------------------------------------------------------------------
Asset type
Money Market $ 341 $ 297
Equity 193 118
Fixed income 92 72
Other 41 23
- ---------------------------------------------------------------------------
Total $ 667 $ 510
- ---------------------------------------------------------------------------
Custody assets (b) $ 401 $ 336
- ---------------------------------------------------------------------------
Shareholder accounts (in millions)
Transfer agency 21 26
Subaccounting 32 25
- ---------------------------------------------------------------------------
Total 53 51
===========================================================================
OTHER INFORMATION
Average FTE staff 5,081 5,834
===========================================================================
(a) Net of nonoperating expense.
(b) At December 31. Dollars in billions.
(c) Represents net assets serviced offshore.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 19
PFPC (Unaudited)
Three months ended December 31 September 30 June 30 March 31 December 31
Dollars in millions except as noted 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT
Fund servicing revenue $ 194 $ 188 $ 187 $ 193 $ 195
Operating expense 155 150 151 162 168
(Accretion)/amortization of
other intangibles, net (4) (6) (4) (4) (5)
- ------------------------------------------------------------------------------------------------------------------------------
Net operating income 43 44 40 35 32
Nonoperating income (a) 2 2 2 2 2
Debt financing 16 18 18 17 21
- ------------------------------------------------------------------------------------------------------------------------------
Pretax earnings 29 28 24 20 13
Income taxes 11 12 9 8 5
- ------------------------------------------------------------------------------------------------------------------------------
Earnings $ 18 $ 16 $ 15 $ 12 $ 8
==============================================================================================================================
AVERAGE BALANCE SHEET
Goodwill and other intangible assets $ 1,034 $ 1,034 $ 1,055 $ 1,025 $ 1,022
Other assets 949 862 836 840 857
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,983 $ 1,896 $ 1,891 $ 1,865 $ 1,879
==============================================================================================================================
Debt financing $ 1,248 $ 1,290 $ 1,290 $ 1,290 $ 1,290
Assigned funds and other liabilities 527 398 393 367 381
Assigned capital 208 208 208 208 208
- ------------------------------------------------------------------------------------------------------------------------------
Total funds $ 1,983 $ 1,896 $ 1,891 $ 1,865 $ 1,879
==============================================================================================================================
PERFORMANCE RATIOS
Return on assigned capital 34% 31% 29% 23% 15%
Operating margin 22 23 21 18 16
==============================================================================================================================
SERVICING STATISTICS
Accounting/administration net assets (b)
Domestic $ 622 $ 593 $ 583 $ 542 $ 481
Foreign (c) 45 41 35 31 29
- ------------------------------------------------------------------------------------------------------------------------------
Total $ 667 $ 634 $ 618 $ 573 $ 510
- ------------------------------------------------------------------------------------------------------------------------------
Asset Type
Money Market $ 341 $ 343 $ 349 $ 345 $ 297
Equity 193 166 148 121 118
Fixed income 92 89 88 79 72
Other 41 36 33 28 23
- ------------------------------------------------------------------------------------------------------------------------------
Total $ 667 $ 634 $ 618 $ 573 $ 510
- ------------------------------------------------------------------------------------------------------------------------------
Custody assets (b) $ 401 $ 384 $ 371 $ 347 $ 336
- ------------------------------------------------------------------------------------------------------------------------------
Shareholder accounts (in millions)
Transfer agency 21 21 20 21 26
Subaccounting 32 29 28 27 25
- ------------------------------------------------------------------------------------------------------------------------------
Total 53 50 48 48 51
==============================================================================================================================
OTHER INFORMATION
Average FTE staff 4,801 4,760 5,328 5,437 5,538
==============================================================================================================================
(a) Net of nonoperating expense.
(b) In billions.
(c) Represents net assets serviced offshore.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 20
DETAILS OF NET INTEREST INCOME AND NET INTEREST MARGIN (Unaudited)
Taxable-equivalent basis
Quarter ended Year ended
------------------------------------------------------------ ------------------------
NET INTEREST INCOME December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2003 2003 2003 2003 2002 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------
Interest income
Loans and fees on loans $ 463 $ 479 $ 497 $ 509 $ 542 $1,948 $2,304
Securities 141 141 155 144 150 581 618
Loans held for sale 13 8 15 12 18 48 135
Other 46 42 27 30 34 145 128
- --------------------------------------------------------------------------------------------------------------------------
Total interest income 663 670 694 695 744 2,722 3,185
- --------------------------------------------------------------------------------------------------------------------------
Interest expense
Deposits 102 106 117 132 149 457 659
Borrowed funds 73 75 54 57 68 259 316
- --------------------------------------------------------------------------------------------------------------------------
Total interest expense 175 181 171 189 217 716 975
- --------------------------------------------------------------------------------------------------------------------------
Net interest income $ 488 $ 489 $ 523 $ 506 $ 527 $2,006 $2,210
==========================================================================================================================
Lending revenue to total revenue (a) 25 % 24 % 23 % 22 % 27 % 23 % 24 %
Quarter ended Year ended
------------------------------------------------------------ ------------------------
December 31 September 30 June 30 March 31 December 31 December 31 December 31
NET INTEREST MARGIN 2003 2003 2003 2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
Average yields/rates
Yield on earning assets
Loans and fees on loans 5.31 % 5.50 % 5.67 % 5.82 % 6.03 % 5.62 % 6.21 %
Securities 3.63 3.69 4.21 4.41 4.67 3.96 5.15
Loans held for sale 3.02 2.11 3.45 2.65 3.48 2.88 4.66
Other 3.34 3.18 5.55 3.05 3.68 3.50 3.85
Total yield on earning assets 4.60 4.71 5.19 5.17 5.45 4.93 5.75
Rate on interest-bearing liabilities
Deposits 1.20 1.25 1.40 1.56 1.73 1.35 1.89
Borrowed funds 2.31 2.45 2.46 2.63 2.93 2.47 2.95
Total rate on interest-bearing
liabilities 1.50 1.57 1.61 1.77 1.98 1.61 2.14
- -----------------------------------------------------------------------------------------------------------------------------
Interest rate spread 3.10 3.14 3.58 3.40 3.47 3.32 3.61
Impact of noninterest-bearing sources .28 .30 .33 .36 .40 .32 .38
- -----------------------------------------------------------------------------------------------------------------------------
Net interest margin 3.38 % 3.44 % 3.91 % 3.76 % 3.87 % 3.64 % 3.99 %
=============================================================================================================================
(a) A reconciliation of net interest income as reported in the Consolidated
Statement of Income to net interest income on a taxable-equivalent basis
follows:
Quarter ended Year ended
--------------------------------------------------------- ------------------------
December 31 September 30 June 30 March 31 December 31 December 31 December 31
In millions 2003 2003 2003 2003 2002 2003 2002
- ----------------------------------------- --------------------------------------------------------- ------------------------
Net interest income, GAAP basis $485 $487 $521 $503 $524 $1,996 $2,197
Taxable-equivalent adjustment 3 2 2 3 3 10 13
--------------------------------------------------------- ------------------------
Net interest income, taxable-equivalent basis $488 $489 $523 $506 $527 $2,006 $2,210
========================================================= ========================
(b) The lending revenue to total revenue ratio is the sum of net interest income
and noninterest income from loans, loans held for sale and related
noninterest-earning assets and noninterest-bearing liabilities attributable
to the lending function divided by the sum of consolidated net interest
income and noninterest income.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 21
DETAILS OF NONINTEREST INCOME AND NONINTEREST EXPENSE (Unaudited)
In millions
Quarter ended Year ended
---------------------------------------------------------- ------------------------
December 31 September 30 June 30 March 31 December 31 December 31 December 31
NONINTEREST INCOME 2003 2003 2003 2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Asset management $ 229 $ 216 $ 209 $ 207 $ 202 $ 861 $ 853
Fund servicing 193 188 188 193 194 762 816
Service charges on deposits 62 60 60 57 61 239 227
Brokerage 51 46 46 41 44 184 195
Consumer services 63 65 64 59 61 251 239
Corporate services 123 132 114 116 151 485 526
Equity management (4) (17) (4) (14) (25) (51)
Net securities gains 15 19 26 56 1 116 89
Investments held by certain variable
interest entities 10 9 19
Other 115 94 86 70 66 365 303
- --------------------------------------------------------------------------------------------------------------------------------
Total noninterest income $ 861 $ 825 $ 776 $ 795 $ 766 $3,257 $3,197
================================================================================================================================
Net gains (losses) on institutional loans
held for sale (included in "Corporate
services" above) $ 16 $ 23 $ 15 $ 15 $ 52 $ 69 $ 147
Noninterest income to total revenue (a) 62 % 63 % 60 % 61 % 59 % 62 % 59 %
Quarter ended Year ended
---------------------------------------------------------- ------------------------
December 31 September 30 June 30 March 31 December 31 December 31 December 31
NONINTEREST EXPENSE 2003 2003 2003 2003 2002 2003 2002
- ------------------------------------------------------------------------------------------------------------------------------------
Staff $ 472 $ 448 $ 446 $ 438 $ 408 $1,804 $1,701
Net occupancy 65 63 64 90 62 282 243
Equipment 71 67 69 69 68 276 271
Marketing 15 16 18 15 11 64 51
Distributions on capital securities (b) 14 14 14 28 58
Other 235 233 324 230 228 1,022 903
- ---------------------------------------------------------------------------------------------------------------------------------
Total noninterest expense $ 858 $ 827 $ 935 $ 856 $ 791 $3,476 $3,227
=================================================================================================================================
Legal and consulting fees related to
regulatory compliance and certain legal
proceedings (included in "Other" above) $ 1 $ 1 $ 5 $ 2 $ 10 $ 9 $ 30
Costs incurred under DOJ agreement
(included in "Other" above) (c) $ 115 $ 115
Efficiency (d) 66 % 63 % 72 % 66 % 63 % 67 % 60 %
=================================================================================================================================
(a) Calculated as total noninterest income divided by the sum of net interest
income and noninterest income.
(b) The Corporation adopted Statement of Financial Accounting Standards No. 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity," (SFAS 150) effective July 1, 2003, as required by
SFAS 150, the Corporation's mandatorily redeemable capital securities of
subsidiary trusts totaling $848 million were reclassified in the third
quarter of 2003 from between the liabilities and shareholders' equity
sections of the Consolidated Balance Sheet to borrowed funds. The dividends
paid on these financial instruments, previously classified as noninterest
expense, were recharacterized as interest expense. Reclassification of prior
period amounts was not permitted under SFAS 150.
(c) See "Agreement with Department of Justice" in the Corporation's July 21,
2003 second quarter 2003 earnings press release included as Exhibit 99.1 to
the Corporation's Form 8-K on that date for further information regarding
amounts for the quarter ended June 30, 2003.
(d) The efficiency ratio for all periods presented is computed as noninterest
expense divided by the sum of net interest income and noninterest income.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 22
CONSOLIDATED AVERAGE BALANCE SHEET (Unaudited)
December 31 December 31
Year ended - in millions 2003 2002
- -------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-earning assets
Loans held for sale $ 1,664 $ 2,897
Securities 14,674 11,999
Loans, net of unearned income
Commercial 14,796 15,922
Commercial real estate 2,072 2,451
Consumer 10,617 9,545
Residential mortgage 3,148 4,639
Lease financing 3,695 4,173
Other 359 393
- ------------------------------------------------------------------------------------------------------------------------------
Total loans, net of unearned income 34,687 37,123
Other 4,147 3,326
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 55,172 55,345
Allowance for credit losses (668) (628)
Other noninterest-earning assets 12,775 11,872
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $ 67,279 $ 66,589
==============================================================================================================================
LIABILITIES, MINORITY AND NONCONTROLLING INTERESTS, CAPITAL SECURITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits
Demand and money market $ 22,360 $ 21,514
Savings 2,106 2,033
Retail certificates of deposit 8,810 10,361
Other time 266 556
Deposits in foreign offices 283 360
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 33,825 34,824
Borrowed funds 10,491 10,712
- ------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 44,316 45,536
Demand and other noninterest-bearing deposits 10,637 9,294
Allowance for unfunded loan commitments
and letters of credit 82 80
Accrued expenses and other liabilities 4,855 4,326
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities 59,890 59,236
Minority and noncontrolling interests in
consolidated subsidiaries 317 212
Mandatorily redeemable capital securities
of subsidiary trusts 421 848
Shareholders' equity 6,651 6,293
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest, capital
securities and shareholders' equity $ 67,279 $ 66,589
==============================================================================================================================
SUPPLEMENTAL AVERAGE BALANCE SHEET INFORMATION
Federal funds sold $ 491 $ 1,319
- ------------------------------------------------------------------------------------------------------------------------------
Interest-bearing deposits $ 33,825 $ 34,824
Demand and other noninterest-bearing deposits 10,637 9,294
- ------------------------------------------------------------------------------------------------------------------------------
Total deposits $ 44,462 $ 44,118
- ------------------------------------------------------------------------------------------------------------------------------
Common shareholders' equity $ 6,642 $ 6,283
- ------------------------------------------------------------------------------------------------------------------------------
THE PNC FINANCIAL SERVICES GROUP, INC. Page 23
CONSOLIDATED AVERAGE BALANCE SHEET (Unaudited)
December 31 September 30 June 30 March 31 December 31
Three months ended - in millions 2003 2003 2003 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------------
ASSETS
Interest-earning assets
Loans held for sale $ 1,645 $ 1,480 $ 1,754 $ 1,782 $ 1,985
Securities 15,617 15,295 14,672 13,078 12,852
Loans, net of unearned income
Commercial 14,465 14,712 14,965 15,050 15,426
Commercial real estate 1,825 2,034 2,169 2,265 2,382
Consumer 11,300 10,832 10,346 9,974 9,739
Residential mortgage 2,932 2,807 3,244 3,619 3,554
Lease financing 3,477 3,633 3,767 3,909 4,000
Other 353 360 360 363 356
- -------------------------------------------------------------------------------------------------------------------------------
Total loans, net of unearned income 34,352 34,378 34,851 35,180 35,457
Other 5,478 5,142 1,979 3,958 3,631
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-earning assets 57,092 56,295 53,256 53,998 53,925
Allowance for credit losses (645) (674) (671) (682) (655)
Other noninterest-earning assets 12,647 12,832 12,980 12,639 12,572
- -------------------------------------------------------------------------------------------------------------------------------
Total assets $ 69,094 $ 68,453 $65,565 $65,955 $65,842
===============================================================================================================================
LIABILITIES, MINORITY AND NONCONTROLLING INTERESTS, CAPITAL SECURITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Interest-bearing deposits
Demand and money market $ 22,745 $ 22,475 $22,141 $22,073 $21,713
Savings 2,099 2,133 2,131 2,058 2,020
Retail certificates of deposit 8,268 8,460 8,892 9,638 9,977
Other time 265 264 269 265 269
Deposits in foreign offices 466 238 220 206 192
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 33,843 33,570 33,653 34,240 34,171
Borrowed funds 12,405 12,099 8,701 8,702 9,045
- -------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 46,248 45,669 42,354 42,942 43,216
Demand and other noninterest-bearing deposits 11,070 11,040 10,278 10,146 9,933
Allowance for unfunded loan commitments
and letters of credit 88 77 77 84 79
Accrued expenses and other liabilities 4,688 4,827 4,980 4,928 4,829
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities 62,094 61,613 57,689 58,100 58,057
Minority and noncontrolling interests in
consolidated entities 471 295 252 251 261
Mandatorily redeemable capital securities
of subsidiary trusts 848 848 848
Shareholders' equity 6,529 6,545 6,776 6,756 6,676
- -------------------------------------------------------------------------------------------------------------------------------
Total liabilities, minority interest, capital
securities and shareholders' equity $ 69,094 $ 68,453 $65,565 $65,955 $65,842
===============================================================================================================================
SUPPLEMENTAL AVERAGE BALANCE SHEET INFORMATION
Federal funds sold $ 12 $ 46 $ 116 $ 1,813 $ 1,426
- -------------------------------------------------------------------------------------------------------------------------------
Interest-bearing deposits $ 33,843 $ 33,570 $33,653 $34,240 $34,171
Demand and other noninterest-bearing deposits 11,070 11,040 10,278 10,146 9,933
- -------------------------------------------------------------------------------------------------------------------------------
Total deposits $ 44,913 $ 44,610 $43,931 $44,386 $44,104
- -------------------------------------------------------------------------------------------------------------------------------
Common shareholders' equity $ 6,520 $ 6,536 $ 6,767 $ 6,746 $ 6,666
- -------------------------------------------------------------------------------------------------------------------------------
THE PNC FINANCIAL SERVICES GROUP, INC. Page 24
DETAILS OF LOANS AND LOANS HELD FOR SALE (Unaudited)
LOANS
December 31 September 30 June 30 March 31 December 31
Period ended-in millions 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
Commercial
Retail/wholesale $ 4,197 $ 4,093 $ 4,109 $ 4,147 $ 4,161
Manufacturing 3,321 3,618 3,591 3,685 3,454
Service providers 1,822 1,865 1,936 1,978 1,906
Real estate related 1,303 1,454 1,479 1,441 1,481
Financial services 1,169 1,251 1,274 1,255 1,218
Communications 93 68 78 110 124
Health care 403 413 407 422 458
Other 1,855 1,861 1,919 2,035 2,185
- ------------------------------------------------------------------------------------------------------------------------
Total commercial 14,163 14,623 14,793 15,073 14,987
- ------------------------------------------------------------------------------------------------------------------------
Commercial real estate
Real estate project 1,392 1,429 1,563 1,749 1,750
Mortgage 432 464 464 492 517
- ------------------------------------------------------------------------------------------------------------------------
Total commercial real estate 1,824 1,893 2,027 2,241 2,267
- ------------------------------------------------------------------------------------------------------------------------
Consumer
Home equity 9,790 9,486 8,876 8,435 8,108
Automobile 543 522 509 476 484
Other 1,099 1,151 1,166 1,209 1,262
- ------------------------------------------------------------------------------------------------------------------------
Total consumer 11,432 11,159 10,551 10,120 9,854
- ------------------------------------------------------------------------------------------------------------------------
Residential mortgage 2,886 2,894 3,114 3,627 3,921
Lease financing
Equipment 3,691 3,684 3,580 3,500 3,560
Vehicles 744 934 1,130 1,346 1,521
- ------------------------------------------------------------------------------------------------------------------------
Total lease financing 4,435 4,618 4,710 4,846 5,081
- ------------------------------------------------------------------------------------------------------------------------
Other 349 364 357 356 415
Unearned income (1,009) (1,037) (1,018) (1,018) (1,075)
- ------------------------------------------------------------------------------------------------------------------------
Total, net of unearned income $34,080 $34,514 $ 34,534 $ 35,245 $35,450
========================================================================================================================
WHOLESALE LENDING STATISTICS
Portfolio composition-total exposure
Investment grade equivalent or better 52 % 52 % 53 % 51 % 52 %
Non-investment grade-secured lending 25 25 24 25 24
Non-investment grade 23 23 23 24 24
- ------------------------------------------------------------------------------------------------------------------------
Total 100 % 100 % 100 % 100 % 100 %
- ------------------------------------------------------------------------------------------------------------------------
Client relationships >$50 million-total exposure $12,396 $12,662 $ 12,852 $ 13,086 $13,392
Client relationships >$50 million-customers 138 139 143 145 140
========================================================================================================================
CONSUMER LOAN STATISTICS (a)
Net charge-offs to loans .29 % .24 % .27 % .24 % .24 %
========================================================================================================================
LOANS HELD FOR SALE
December 31 September 30 June 30 March 31 December 31
Period ended - in millions 2003 2003 2003 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------
Education loans $1,014 $1,140 $1,059 $1,243 $1,035
Institutional lending repositioning 70 98 126 181 298
Other 316 293 290 278 274
- ---------------------------------------------------------------------------------------------------------------------------
Total $1,400 $1,531 $1,475 $1,702 $1,607
===========================================================================================================================
INSTITUTIONAL LENDING REPOSITIONING
December 31 September 30 June 30 March 31 December 31
Period ended - in millions 2003 2003 2003 2003 2002
- -----------------------------------------------------------------------------------------------------------------------------
Loans held for sale
Credit exposure $104 $150 $199 $344 $626
Outstandings 70 98 126 181 298
Exit portfolio
Credit exposure 51 61 251 374 438
Outstandings 10 11 9 4
==========================================================================================================================
(a) Includes consumer, residential mortgage and vehicle leasing.
THE PNC FINANCIAL SERVICES GROUP, INC. Page 25
ALLOWANCES FOR CREDIT LOSSES AND UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
(Unaudited)
CHANGE IN ALLOWANCE FOR CREDIT LOSSES
December 31 September 30 June 30 March 31 December 31
Three months ended - in millions 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
Beginning balance $648 $673 $680 $673 $648
Charge-offs
Commercial (53) (56) (27) (32) (27)
Commercial real estate (1) (2) (1)
Consumer (10) (9) (10) (10) (10)
Residential mortgage (2) (1) (1)
Lease financing (4) (5) (29) (8) (5)
- ---------------------------------------------------------------------------------------------------------------------
Total charge-offs (69) (72) (69) (50) (43)
Recoveries
Commercial 15 5 2 10 3
Commercial real estate 1 1
Consumer 3 3 3 3 3
Residential mortgage 1
Lease financing 1 1 1 1
- ---------------------------------------------------------------------------------------------------------------------
Total recoveries 20 9 6 14 8
Net charge-offs
Commercial (38) (51) (25) (22) (24)
Commercial real estate 1 (1) (2)
Consumer (7) (6) (7) (7) (7)
Residential mortgage (2) (1)
Lease financing (3) (5) (28) (7) (4)
- ---------------------------------------------------------------------------------------------------------------------
Total net charge-offs (49) (63) (63) (36) (35)
Provision for credit losses 34 50 57 36 65
Acquired allowance (NBOC acquisition) (1)
Net change in allowance for unfunded loan
commitments and letters of credit (1) (11) (1) 7 (5)
- ---------------------------------------------------------------------------------------------------------------------
Ending balance $632 $648 $673 $680 $673
=====================================================================================================================
CHANGE IN ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
December 31 September 30 June 30 March 31 December 31
Three months ended - in millions 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
Beginning balance $89 $78 $77 $84 $79
Net change in allowance for unfunded
loan commitments and letters of credit 1 11 1 (7) 5
- ---------------------------------------------------------------------------------------------------------------------
Ending balance $90 $89 $78 $77 $84
=====================================================================================================================
NET UNFUNDED COMMITMENTS
December 31 September 30 June 30 March 31 December 31
In millions 2003 2003 2003 2003 2002
- --------------------------------------------------------------------------------------------------------------------------
Net unfunded commitments $25,187 $24,664 $25,514 $25,652 $26,858
=======================================================================================================================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 26
DETAILS OF NONPERFORMING ASSETS (Unaudited)
NONPERFORMING ASSETS BY TYPE
December 31 September 30 June 30 March 31 December 31
Period ended - in millions 2003 2003 2003 2003 2002
- ----------------------------------------------------------------------------------------------------------------------------------
Nonaccrual loans
Commercial $213 $286 $ 296 $252 $226
Commercial real estate 6 4 6 13 7
Consumer 11 10 11 11 11
Residential mortgage (a) 24 8 7 7 7
Lease financing 11 15 6 51 57
- ----------------------------------------------------------------------------------------------------------------------------
Total nonaccrual loans 265 323 326 334 308
Troubled debt restructured loan 1 1 1 1 1
- ----------------------------------------------------------------------------------------------------------------------------
Total nonperforming loans 266 324 327 335 309
Nonperforming loans held for sale (b) 27 35 45 61 97
Foreclosed and other assets
Lease 17 18 19
Residential mortgage 9 9 7 6 6
Other 9 10 6 6 6
- ----------------------------------------------------------------------------------------------------------------------------
Total foreclosed and other assets 35 37 32 12 12
- ----------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets (c) $328 $396 $ 404 $408 $418
- ----------------------------------------------------------------------------------------------------------------------------
Nonperforming loans to total loans .78% .94% .95% .95% .87%
Nonperforming assets to total loans, loans held
for sale and foreclosed assets .92 1.10 1.12 1.10 1.13
Nonperforming assets to total assets .48 .58 .60 .59 .63
============================================================================================================================
(a) During the fourth quarter of 2003, the Corporation
accelerated the timeframe for recognizing delinquent,
well-secured residential mortgage loans as
nonperforming. This change resulted in the
classification of an additional $15 million of
residential mortgages as nonperforming assets at
December 31, 2003.
(b) Includes troubled debt restructured loans held for
sale $ 10 $ 9 $ 11 $ 12 $ 17
(c) Excludes equity management assets carried at
estimated fair value (December 31, 2003, September 30,
2003, June 30, 2003, March 31, 2003 and December 31,
2002 amounts include troubled debt restructured assets
of $5 million, $7 million, $3 million, $3 million and
$12 million, respectively). $ 37 $ 38 $ 39 $ 30 $ 40
CHANGE IN NONPERFORMING ASSETS
Three months Year
December 31, 2003 - in millions ended ended
- -------------------------------------------------------------------------------------------
Beginning of period $396 $418
Purchases 42
Transferred from accrual 111 467
Returned to performing (1) (5)
Principal reductions and payoffs (110) (331)
Asset sales (20) (54)
Charge-offs and valuation adjustments (48) (209)
- -------------------------------------------------------------------------------------------
December 31 $328 $328
===========================================================================================
THE PNC FINANCIAL SERVICES GROUP, INC. Page 27
DETAILS OF NONPERFORMING ASSETS (Unaudited)
NONPERFORMING ASSETS BY BUSINESS
December 31 September 30 June 30 March 31 December 31
Period ended - in millions 2003 2003 2003 2003 2002
- ------------------------------------------------------------------------------------------------------------------------
REGIONAL COMMUNITY BANKING
Nonperforming loans (a) $ 78 $ 63 $ 65 $ 76 $ 72
Foreclosed and other assets 12 11 10 10 10
----------------------------------------------------------------
Total $ 90 $ 74 $ 75 $ 86 $ 82
----------------------------------------------------------------
WHOLESALE BANKING-CORPORATE BANKING
Nonperforming loans $ 71 $118 $121 $114 $104
Nonperforming loans held for sale 24 28 36 52 83
Foreclosed and other assets 21 22 19
----------------------------------------------------------------
Total $116 $168 $176 $166 $187
----------------------------------------------------------------
WHOLESALE BANKING-PNC REAL ESTATE FINANCE
Nonperforming loans $ 2 $ 1 $ 1 $ 10 $ 2
Nonperforming loans held for sale 2
Foreclosed and other assets 1 2 2
----------------------------------------------------------------
Total $ 3 $ 3 $ 3 $ 12 $ 2
----------------------------------------------------------------
WHOLESALE BANKING-PNC BUSINESS CREDIT
Nonperforming loans $104 $132 $135 $130 $126
Nonperforming loans held for sale 3 7 9 7 14
Foreclosed and other assets 1 1 1 2 2
----------------------------------------------------------------
Total $108 $140 $145 $139 $142
----------------------------------------------------------------
PNC ADVISORS
Nonperforming loans $ 11 $ 10 $ 5 $ 5 $ 5
Foreclosed and other assets 1
----------------------------------------------------------------
Total $ 11 $ 11 $ 5 $ 5 $ 5
----------------------------------------------------------------
CONSOLIDATED TOTALS
Nonperforming loans $266 $324 $327 $335 $309
Nonperforming loans held for sale 27 35 45 61 97
Foreclosed and other assets 35 37 32 12 12
----------------------------------------------------------------
Total $328 $396 $404 $408 $418
================================================================
LARGEST NONPERFORMING LOANS AT DECEMBER 31, 2003 - IN MILLIONS (b)
PNC Corporate Banking PNC Business Credit
- ------------------------------------------------------------------------------------------------------------------------------------
Ranking Outstandings Industry Outstandings Industry Outstandings Industry
- ------------------------------------------------------------------------------------------------------------------------------------
1 $ 29 Retail/Wholesale $17 Service Provider $ 29 Retail/Wholesale
2 17 Service Provider 12 Manufacturing 17 Service Provider
3 17 Service Provider 12 Other Media/Comm 7 Paper and Forest Prod
4 12 Manufacturing 8 Manufacturing 6 Steel
5 12 Other Media/Comm 8 Manufacturing 5 Auto MFG and Related
6 8 Manufacturing 6 Finance 5 Manufacturing
7 8 Manufacturing 5 Manufacturing 5 Manufacturing
8 8 Service Provider 5 Contractors 4 Manufacturing
9 7 Paper and Forest Prod 5 Manufacturing 4 Service Provider
10 6 Steel 4 Health Care 3 Manufacturing
- ------------------------------------------------------------------------------------------------------------------------------------
Total $124 $82 $ 85
- ------------------------------------------------------------------------------------------------------------------------------------
As a percent of nonperforming assets
38% 71% 79%
====================================================================================================================================
(a) See Note (a) on page 26 of this financial supplement. The impact of this
change was reflected in the amount at December 31, 2003.
(b) Amounts are not net of allowance for credit losses, if applicable.
Page 28
GLOSSARY OF TERMS
Accounting/administration net assets - Net domestic and foreign pooled
investment assets for which PNC provides accounting and administration services.
These assets are not included on PNC's consolidated balance sheet.
Adjusted average total assets - Primarily comprised of total average quarterly
assets plus (less) unrealized losses (gains) on available-for-sale debt
securities, less goodwill and certain other intangible assets.
Annualized - Adjusted to reflect a full year of activity.
Assets under management - Assets over which PNC has sole or shared investment
authority for its customers/clients. These assets are not included on PNC's
consolidated balance sheet.
Assigned capital - Capital assignments based on management's assessment of
inherent risks and equity levels at independent companies providing similar
products and services in order to present, to the extent practicable, the
financial results of each business as if it operated on a stand-alone basis.
Charge-off - Process of removing a loan or portion of a loan from a bank's
balance sheet because the loan is considered uncollectible. A charge-off also is
recorded when a loan is transferred to held for sale and the loan's market value
is less than its carrying amount. This difference is a charge-off.
Common shareholders' equity to total assets - Common shareholders' equity
divided by total assets. Common shareholders' equity equals total shareholders'
equity less preferred stock and the portion of capital surplus and retained
interest related to the preferred stock.
Custody assets - All assets, including pooled investment assets, held on behalf
of clients under safekeeping arrangements. Such assets are not reported on PNC's
consolidated balance sheet. Assets held in custody at other institutions on
behalf of PNC are included in the appropriate asset categories as if held
physically by PNC.
Earning assets - Assets that generate income, which include: short-term
investments; loans held for sale; loans, net of unearned income; securities;
federal funds sold and certain other assets.
Efficiency - Noninterest expense divided by the sum of net interest income and
noninterest income.
Institutional lending repositioning - A 2001 PNC strategic action taken to build
a more diverse and valuable business mix designed to create shareholder value
over time by reducing lending leverage and improving the risk/return
characteristics of the banking business.
Leverage ratio - Tier 1 risk-based capital divided by adjusted average total
assets.
Net interest margin - Annualized taxable-equivalent net interest income divided
by average earning assets.
Nondiscretionary assets under administration - Assets held by PNC for
customers/clients in a non-discretionary, custodial capacity. These assets are
not included on PNC's consolidated balance sheet.
Noninterest income to total revenue - Total noninterest income divided by total
revenue. Total revenue includes total noninterest income plus net interest
income.
Page 29
Nonperforming assets - Nonperforming assets include nonaccrual loans, troubled
debt restructured loans, nonaccrual loans held for sale, foreclosed and other
assets.
Nonperforming loans - Nonperforming loans include loans to commercial, lease
financing, consumer, commercial real estate and residential mortgage customers
as well as troubled debt restructured loans. Nonperforming loans do not include
nonaccrual loans held for sale or foreclosed and other assets.
Recovery - Cash proceeds received on a loan that had previously been charged
off. The amount received is credited to the allowance for credit losses.
Return on assigned capital - Annualized net income divided by assigned capital.
Return on average assets - Annualized net income or annualized income from
continuing operations divided by average assets.
Return on average equity - Annualized net income or annualized income from
continuing operations divided by average shareholders' equity.
Risk-weighted assets - Primarily computed by the assignment of specific
risk-weights, as defined by The Board of Governors of the Federal Reserve
System, to assets and off-balance sheet instruments.
Securitization - The process by which financial assets are legally transformed
into securities.
Shareholders' equity to total assets - Total shareholders' equity divided by
total assets.
Taxable-equivalent interest - The interest income earned on certain assets is
completely or partially exempt from federal income tax. As such, these
tax-exempt instruments typically yield lower returns than a taxable investment.
In order to provide accurate comparisons of yields and margins for all earning
assets, the interest income earned on tax-exempt assets is increased to make
them fully equivalent to other taxable interest income investments.
Tier 1 risk-based capital - Tier 1 capital equals: total shareholders' equity,
plus trust preferred capital securities, plus certain minority interests that
are held by others; less goodwill and certain intangible assets, less equity
investments in nonfinancial companies and less net unrealized holding losses on
available-for-sale equity securities. Net unrealized holding gains on
available-for-sale equity securities, net unrealized holding gains (losses) on
available-for-sale debt securities and net unrealized holding gains (losses) on
cash flow hedge derivatives are excluded from total shareholders' equity for
Tier 1 capital purposes.
Tier 1 risk-based capital ratio - Tier 1 risk-based capital divided by
risk-weighted assets.
Total assets serviced - Total domestic and foreign pooled investment assets for
which PNC provides related fund processing services. These assets are not
included on PNC's consolidated balance sheet.
Total deposits - The sum of total transaction deposits, savings accounts,
certificates of deposit, other time deposits and deposits in foreign offices.
Total risk-based capital - Tier 1 risk-based capital plus qualifying senior and
subordinated debt, other minority interest not qualified as Tier 1, and the
allowance for credit losses, subject to certain limitations.
Total risk-based capital ratio - Total risk-based capital divided by
risk-weighted assets.
Page 30
BUSINESS DEFINITIONS
REGIONAL COMMUNITY BANKING provides deposit, lending, cash management and
investment services to two million consumer and small business customers within
PNC's geographic footprint.
WHOLESALE BANKING includes Corporate Banking, PNC Real Estate Finance and PNC
Business Credit.
- CORPORATE BANKING provides credit, equipment leasing, treasury
management and capital markets products and services to
mid-sized corporations, government entities and selectively to
large corporations primarily within PNC's geographic region.
Treasury management activities, which include cash and
investment management, receivables management, disbursement
services and global trade services; capital markets products,
which include foreign exchange, derivatives trading and loan
syndications; and equipment leasing products are offered
through Corporate Banking and sold by several businesses
across the Corporation.
- PNC REAL ESTATE FINANCE specializes in financial solutions for
the acquisition, development, permanent financing and
operation of commercial real estate nationally. PNC Real
Estate Finance offers treasury and investment management,
access to the capital markets, commercial mortgage loan
servicing and other products and services to clients that
develop, own, manage, or invest in commercial real estate.
PNC's commercial real estate financial services platform
provides processing services through Midland Loan Services,
Inc., a leading third-party provider of loan servicing and
technology to the commercial real estate finance industry. PNC
MultiFamily Capital is a national provider of financial
services for the multi-family housing industry, particularly
affordable, senior and healthcare housing.
- PNC BUSINESS CREDIT provides asset-based lending, treasury
management and capital markets products and services to middle
market customers nationally. PNC Business Credit's lending
services include loans secured by accounts receivable,
inventory, machinery and equipment, and other collateral, and
its customers include manufacturing, wholesale, distribution,
retailing and service industry companies.
PNC ADVISORS provides a full range of tailored investment, trust and banking
products and services to affluent individuals and families, including
full-service brokerage through J.J.B. Hilliard, W.L.Lyons, Inc. and investment
consulting and trust services to the ultra-affluent through Hawthorn. PNC
Advisors also serves as investment manager and trustee for employee benefit
plans and charitable and endowment assets and provides defined contribution plan
services and investment options through its Vested Interest(R) product. PNC
Advisors provides services to individuals and corporations primarily within
PNC's geographic footprint.
BLACKROCK is one of the largest publicly traded investment management firms in
the United States. BlackRock manages assets on behalf of institutions and
individuals worldwide through a variety of fixed income, liquidity and equity
mutual funds, separate accounts and alternative investment products. Mutual
funds include the flagship fund families, BlackRock Funds and BlackRock
Provident Institutional Funds. In addition, BlackRock provides risk management
and investment system services to institutional investors under the BlackRock
Solutions(R) brand name.
PFPC is among the largest providers of mutual fund transfer agency and
accounting and administration services in the United States, offering a wide
range of fund processing services to the investment management industry. PFPC
also provides processing solutions to the international marketplace through its
Ireland and Luxembourg operations.