Financial Supplement for Second Quarter 2004

Exhibit 99.1

LOGO

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2004

UNAUDITED

THE PNC FINANCIAL SERVICES GROUP, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2004

UNAUDITED


		Page
Consolidated Statement of Income		1
Consolidated Balance Sheet		2
Capital and Asset Quality Ratios		2
Results of Business Segments
Summary		3
Banking Businesses
Regional Community Banking		4
Wholesale Banking		5
PNC Advisors		6
Asset Management and Processing Businesses
BlackRock		7
PFPC		8
Details of Net Interest Income and Net Interest Margin		9
Details of Noninterest Income and Noninterest Expense		10
Average Consolidated Balance Sheet		11-12
Details of Loans and Loans Held for Sale		13
Allowances For Loan and Lease Losses And Unfunded Loan Commitments And Letters of Credit		14
Details of Nonperforming Assets		15-16
Glossary of Terms		17-19
Business Segment Products and Services		19

The information contained in this Financial Supplement is preliminary, unaudited and based on data available at July 21, 2004. This information speaks only as of the particular date or dates included in the schedules. We do not undertake any obligation to, and disclaim any duty to, correct or update any of the information provided in this Financial Supplement. Our future financial performance is subject to risks and uncertainties as described in our SEC filings. We have reclassified certain prior period amounts included in this Financial Supplement to be consistent with the current period presentation.

See our Current Report on Form 8-K dated April 5, 2004 regarding changes to the presentation of the results of our business segments as reflected in this Financial Supplement on pages 3 through 8. The segments are defined on page 19.

The average full-time equivalent employee (FTE) statistics disclosed in this Financial Supplement for each business segment reflect staff directly employed by the respective business segment and exclude corporate and shared services employees.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 1

Consolidated Statement of Income (Unaudited)


*For the three months ended - in millions, except per share data*	June 30 2004		March 31 2004		December 31 2003			September 30 2003			June 30 2003
Interest Income
Loans and fees on loans	$	482	$	481	$	461		$	477		$	495
Securities		130		145		141			142			155
Other		46		40		58			49			42

Total interest income		658		666		660			668			692

Interest Expense
Deposits		107		104		102			106			117
Borrowed funds		70		68		73			75			54

Total interest expense		177		172		175			181			171

Net interest income		481		494		485			487			521
Provision for credit losses		8		12		34			50			57

Net interest income less provision for credit losses		473		482		451			437			464

Noninterest Income
Asset management		250		252		229			216			209
Fund servicing		200		204		193			188			188
Service charges on deposits		63		59		62			60			60
Brokerage		56		58		51			46			46
Consumer services		67		63		63			65			64
Corporate services		128		125		123			132			114
Equity management gains (losses)		35		7					(4	)		(17	)
Net securities gains		14		15		15			19			26
Other		97		128		125			103			86

Total noninterest income		910		911		861			825			776

Noninterest Expense
Staff		491		463		472			448			446
Net occupancy		67		68		65			63			64
Equipment		70		74		71			67			69
Marketing		24		20		15			16			18
Distributions on capital securities												14
Other		258		270		235			233			324

Total noninterest expense		910		895		858			827			935

Income before minority and noncontrolling interests and income taxes		473		498		454			435			305
Minority and noncontrolling interests in income of consolidated entities		11		7		6			2			13
Income taxes		158		163		146			152			108

Income before cumulative effect of accounting change		304		328		302			281			184
Cumulative effect of accounting change (less applicable income tax benefit of $14)						(28	)

Net income	$	304	$	328	$	274		$	281		$	184

Earnings Per Common Share
Before cumulative effect of accounting change
Basic	$	1.08	$	1.16	$	1.09		$	1.01		$	.65
Diluted	$	1.07	$	1.15	$	1.08		$	1.00		$	.65
From net income
Basic	$	1.08	$	1.16	$	.99		$	1.01		$	.65
Diluted	$	1.07	$	1.15	$	.98		$	1.00		$	.65

Average Common Shares Outstanding
Basic		281		282		276			278			281
Diluted		283		284		278			280			282


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 2

Consolidated Balance Sheet (Unaudited)


*In millions, except par value*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Assets
Cash and due from banks	$	3,065		$	2,787		$	2,968		$	3,150		$	3,797
Federal funds sold								50						850
Resale agreements		1,096			1,979			1,826			1,836			908
Other short-term investments		1,335			1,243			720			697			646
Loans held for sale		1,457			1,548			1,400			1,531			1,475
Securities		14,954			16,941			15,690			14,907			16,017
Loans, net of unearned income of $923, $980, $1,009, $1,037 and $1,018		39,094			37,519			34,080			34,514			34,534
Allowance for loan and lease losses		(593	)		(604	)		(632	)		(648	)		(673	)

Net loans		38,501			36,915			33,448			33,866			33,861
Goodwill		2,978			2,975			2,390			2,385			2,356
Other intangible assets		351			341			317			311			316
Purchased customer receivables		1,741			1,932			2,223			2,481
Other		7,640			7,454			7,136			7,539			7,036

Total assets	$	73,118		$	74,115		$	68,168		$	68,703		$	67,262

Liabilities
Deposits
Noninterest-bearing	$	12,246		$	11,879		$	11,505		$	12,118		$	13,368
Interest-bearing		37,748			36,246			33,736			33,405			33,326

Total deposits		49,994			48,125			45,241			45,523			46,694
Borrowed funds
Federal funds purchased		1,069			2,648			169			881			36
Repurchase agreements		1,163			1,279			1,081			1,048			1,015
Bank notes and senior debt		2,796			2,829			2,823			2,839			3,306
Federal Home Loan Bank borrowings		101			703			1,115			1,127			1,134
Subordinated debt		3,510			3,837			3,729			1,980			2,260
Mandatorily redeemable capital securities of subsidiary trusts											848
Commercial paper		1,743			1,934			2,226			2,483
Other borrowed funds		555			492			310			348			152

Total borrowed funds		10,937			13,722			11,453			11,554			7,903
Allowance for unfunded loan commitments and letters of credit		83			90			90			89			78
Accrued expenses		2,221			2,313			2,275			2,226			2,269
Other		2,400			2,217			2,002			2,193			2,435

Total liabilities		65,635			66,467			61,061			61,585			59,379

Minority and noncontrolling interests in consolidated entities		419			418			462			480			261

Mandatorily redeemable capital securities of subsidiary trusts														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		1,235			1,209			1,108			1,110			1,100
Retained earnings		7,991			7,829			7,642			7,507			7,360
Deferred compensation expense		(54	)		(27	)		(29	)		(24	)		(27	)
Accumulated other comprehensive (loss) income		(139	)		180			60			148			304
Common stock held in treasury at cost: 71, 71, 76, 76 and 73 shares		(3,733	)		(3,725	)		(3,900	)		(3,867	)		(3,727	)

Total shareholders’ equity		7,064			7,230			6,645			6,638			6,774

Total liabilities, minority and noncontrolling interests, capital securities and shareholders’ equity	$	73,118		$	74,115		$	68,168		$	68,703		$	67,262

CAPITAL RATIOS
Tier 1 Risk-based (a)		9.0	%		9.1	%		9.5	%		8.7	%		8.9	%
Total Risk-based (a)		12.7			13.1			13.8			12.0			12.3
Leverage (a)		7.7			7.7			8.2			7.6			8.1
Shareholders’ equity to total assets		9.66			9.76			9.75			9.66			10.07
Common shareholders’ equity to total assets		9.65			9.74			9.73			9.65			10.06

ASSET QUALITY RATIOS
Nonperforming assets to loans, loans held for sale and foreclosed assets		.51	%		.59	%		.92	%		1.10	%		1.12	%
Nonperforming loans to loans		.43			.49			.78			.94			.95
Allowance for loan and lease losses to loans		1.52			1.61			1.85			1.88			1.95
Allowance for loan and lease losses to nonperforming loans		351			330			238			200			206
Net charge-offs to average loans (For the three months ended)		.27			.68			.57			.73			.73

(a)	Estimated for June 30, 2004.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 3

Results of Business Segments - Summary (Unaudited) (a)

Three months ended – dollars in millions


	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Earnings (Loss)
Banking businesses
Regional Community Banking	$	125		$	102		$	127		$	122		$	122
Wholesale Banking		113			122			117			97			83
PNC Advisors		27			31			20			25			24

Total banking businesses		265			255			264			244			229

Asset management and processing businesses
BlackRock		48			55			41			40			39
PFPC		17			16			18			17			16

Total asset management and processing businesses		65			71			59			57			55

Total business segment earnings		330			326			323			301			284
Minority interest in income of BlackRock		(14	)		(16	)		(12	)		(12	)		(12	)
Other		(12	)		18			(9	)		(8	)		(88	)

Results before cumulative effect of accounting change		304			328			302			281			184
Cumulative effect of accounting change								(28	)

Total consolidated	$	304		$	328		$	274		$	281		$	184


	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Revenue (b)
Banking businesses
Regional Community Banking	$	511		$	501		$	489		$	478		$	479
Wholesale Banking		322			317			330			328			300
PNC Advisors		154			170			159			156			154

Total banking businesses		987			988			978			962			933

Asset management and processing businesses
BlackRock		184			182			161			150			144
PFPC		199			203			194			188			187

Total asset management and processing businesses		383			385			355			338			331

Total business segment revenue		1,370			1,373			1,333			1,300			1,264
Other		25			35			16			14			35

Total consolidated	$	1,395		$	1,408		$	1,349		$	1,314		$	1,299

(a)	See our Current Report on Form 8-K dated April 5, 2004 regarding changes to the presentation of the results of our business segments. Our business segment information is based on management information systems, assumptions and methodologies that we review and enhance on an ongoing basis.

(b)

Business segment 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. To provide accurate comparisons of yields and margins for all earning assets, we have increased the interest income earned on tax-exempt assets to make them fully equivalent to other taxable interest income investments. The following is a reconciliation of total consolidated revenue on a book basis to total consolidated revenue on a taxable-equivalent basis (in millions):


	June 30 2004		March 31 2004		December 31 2003		September 30 2003		June 30 2003
Total consolidated revenue, book (GAAP) basis	$	1,391	$	1,405	$	1,346	$	1,312	$	1,297
Taxable-equivalent adjustment		4		3		3		2		2

Total consolidated revenue, taxable-equivalent basis	$	1,395	$	1,408	$	1,349	$	1,314	$	1,299


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 4

Regional Community Banking (Unaudited) (a)


*Three months ended* *Taxable-equivalent basis* *Dollars in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
INCOME STATEMENT
Net interest income	$	340		$	333		$	314		$	310		$	307
Noninterest income
Service charges on deposits		60			57			59			58			57
Investment products		29			29			27			30			31
Other		82			82			89			80			84

Total noninterest income		171			168			175			168			172

Total revenue		511			501			489			478			479
Provision for credit losses		6			29			14			9			11
Noninterest expense
Staff expense		130			136			122			120			120
Net occupancy and equipment		66			68			60			61			61
Other		111			108			94			96			95

Total noninterest expense		307			312			276			277			276

Pretax earnings		198			160			199			192			192
Income taxes		73			58			72			70			70

Earnings	$	125		$	102		$	127		$	122		$	122

AVERAGE BALANCE SHEET
Loans
Consumer
Home equity	$	10,734		$	9,478		$	8,926		$	8,476		$	8,047
Indirect		836			774			510			492			468
Other consumer		533			682			474			504			516

Total consumer		12,103			10,934			9,910			9,472			9,031
Commercial loans		3,943			3,901			3,205			3,223			3,233
Floor plan		1,037			947			844			803			884
Residential mortgage		776			813			389			448			492
Other		24			28			22			23			25

Total loans		17,883			16,623			14,370			13,969			13,665
Goodwill		1,005			994			438			438			438
Loans held for sale		1,156			1,115			1,158			1,105			1,197
Other assets		1,587			2,060			1,312			1,370			1,300

Total assets	$	21,631		$	20,792		$	17,278		$	16,882		$	16,600

Deposits
Noninterest-bearing demand	$	6,464		$	6,248		$	5,804		$	5,744		$	5,476
Interest-bearing demand		6,916			6,916			6,596			6,392			6,131
Money market		12,465			12,356			12,140			12,307			12,407

Total transaction deposits		25,845			25,520			24,540			24,443			24,014
Savings		2,548			2,508			2,020			2,050			2,046
Certificates		8,421			8,565			8,047			8,234			8,666

Total deposits		36,814			36,593			34,607			34,727			34,726
Other liabilities		223			432			147			158			177
Capital		2,364			2,362			2,218			2,227			2,228

Total funds	$	39,401		$	39,387		$	36,972		$	37,112		$	37,131

PERFORMANCE RATIOS
Return on capital		21	%		17	%		23	%		22	%		22	%
Noninterest income to total revenue		33			34			36			35			36
Efficiency		60			62			56			58			58

OTHER INFORMATION (b)
Total nonperforming assets (c)	$	81		$	75		$	85		$	72		$	73
Net charge-offs (d)	$	10		$	32		$	12		$	10		$	11
Annualized net charge-off ratio (d)		.22	%		.77	%		.33	%		.28	%		.32	%
Home equity portfolio credit statistics:
Percentage of first lien positions		51	%		50	%		51	%		50	%		46	%
Weighted average loan-to-value ratios		71	%		72	%		70	%		70	%		72	%
Weighted average FICO scores		717			713			713			712			712
Loans 90 days past due		.20	%		.23	%		.25	%		.23	%		.28	%
Gains on sales of education loans (e)	$	2					$	8		$	4		$	7
Average FTE staff		10,254			10,379			9,589			9,643			9,559
ATMs		3,528			3,486			3,600			3,664			3,660
Branches		775			769			719			715			713
Checking relationships		1,700,000			1,679,000			1,611,000			1,606,000			1,575,000
Consumer DDA households using online banking		663,000			637,000			593,000			570,000			538,000
% of consumer DDA households using online banking		43	%		42	%		41	%		39	%		38	%
Consumer DDA households using online bill payment		112,000			102,000			63,000			58,000			54,000
% of consumer DDA households using online bill payment		7	%		7	%		4	%		4	%		4	%
Small business deposits
Demand	$	5,423		$	5,407		$	5,303		$	5,109		$	4,706
Money market		2,707			2,510			2,283			2,180			2,048
Certificates of deposit		300			324			300			309			350

(a)	See (a) on page 3.

(b)	Presented as of period-end, except for net charge-offs, annualized net charge-off ratio, home equity weighted average statistics, gains on sales of education loans and average FTEs.

(c)	See (b) on page 15.

(d)	See (a) on page 14.

(e)	Included in other noninterest income above.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 5

Wholesale Banking (Unaudited) (a)


*Three months ended* *Taxable-equivalent basis* *Dollars in millions except as noted*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
INCOME STATEMENT
Net interest income	$	170		$	163		$	169		$	170		$	167
Net interest income - FIN 46		1			1			1			2

Total net interest income		171			164			170			172			167
Noninterest income
Net commercial mortgage banking
Net gains on loan sales		14			10			14			15			14
Servicing and other fees, net of amortization		12			11			9			11			9
Net gains on institutional loans held for sale		17			28			16			23			15
Other - FIN 46		4			4			8			6
Other		104			100			113			101			95

Noninterest income		151			153			160			156			133

Total revenue		322			317			330			328			300
Provision for credit losses		8			(13	)		9			38			45
Noninterest expense - FIN 46		15			15			17			19
Noninterest expense		147			147			150			142			144

Pretax earnings		152			168			154			129			111
Noncontrolling interests in income of consolidated entities		(10	)		(10	)		(8	)		(11	)		(2	)
Income taxes		49			56			45			43			30

Earnings	$	113		$	122		$	117		$	97		$	83

AVERAGE BALANCE SHEET
Loans
Corporate banking	$	7,857		$	7,768		$	7,848		$	8,017		$	8,262
Commercial real estate		1,934			1,665			1,647			1,841			1,953
Commercial - real estate related		1,465			1,585			1,350			1,431			1,438
PNC Business Credit		3,788			3,608			3,658			3,633			3,528

Total loans		15,044			14,626			14,503			14,922			15,181
Purchased customer receivables		1,811			2,106			2,384			2,496
Loans held for sale		493			484			549			436			628
Other assets		4,641			4,631			4,575			4,294			4,081

Total assets	$	21,989		$	21,847		$	22,011		$	22,148		$	19,890

Deposits	$	6,981		$	6,694		$	6,641		$	6,543		$	6,120
Commercial paper		1,815			2,111			2,386			2,502
Other liabilities		3,583			3,725			3,707			3,405			3,152
Capital		1,659			1,854			1,942			2,001			2,019

Total funds	$	14,038		$	14,384		$	14,676		$	14,451		$	11,291

PERFORMANCE RATIOS
Return on capital		27	%		26	%		24	%		19	%		16	%
Noninterest income to total revenue		47			48			48			48			44
Efficiency		50			51			51			49			48

COMMERCIAL MORTGAGE
SERVICING PORTFOLIO (in billions)
Beginning of period	$	86		$	83		$	80		$	79		$	75
Acquisitions/additions		11			7			6			5			7
Repayments/transfers		(8	)		(4	)		(3	)		(4	)		(3	)

End of period	$	89		$	86		$	83		$	80		$	79

OTHER INFORMATION
Consolidated revenue from treasury management	$	91		$	88		$	90		$	90		$	89
Consolidated revenue from capital markets	$	37		$	32		$	32		$	32		$	28
Total loans (b)	$	15,430		$	14,797		$	14,219		$	14,996		$	15,137
Total nonperforming assets (b)	$	108		$	131		$	227		$	311		$	324
Net charge-offs	$	16		$	30		$	34		$	51		$	50
Average FTE staff		2,980			2,944			2,873			2,876			2,884
Net carrying amount of commercial mortgage servicing rights (b)	$	226		$	211		$	209		$	200		$	199

(a)	See (a) on page 3.

(b)	Presented as of period-end.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 6

PNC Advisors (Unaudited) (a)


*Three months ended* *Taxable-equivalent basis* *Dollars in millions except as noted*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
INCOME STATEMENT
Net interest income	$	27		$	27		$	27		$	27		$	27
Noninterest income
Investment management and trust		79			81			81			78			78
Brokerage		28			30			29			25			25
Other		20			32			22			26			24

Total noninterest income		127			143			132			129			127

Total revenue		154			170			159			156			154
Provision for credit losses		(2	)		1			1			1			1
Noninterest expense		114			120			126			116			115

Pretax earnings		42			49			32			39			38
Income taxes		15			18			12			14			14

Earnings	$	27		$	31		$	20		$	25		$	24

AVERAGE BALANCE SHEET
Loans
Consumer	$	1,475		$	1,386		$	1,371		$	1,331		$	1,284
Residential mortgage		137			154			173			216			263
Commercial		417			415			415			463			435
Other		303			292			291			287			286

Total loans		2,332			2,247			2,250			2,297			2,268
Other assets		405			413			411			434			429

Total assets	$	2,737		$	2,660		$	2,661		$	2,731		$	2,697

Deposits	$	2,298		$	2,189		$	2,175		$	2,181		$	2,098
Other liabilities		272			268			262			260			253
Capital		301			325			305			308			314

Total funds	$	2,871		$	2,782		$	2,742		$	2,749		$	2,665

PERFORMANCE RATIOS
Return on capital		36	%		38	%		26	%		32	%		31	%
Noninterest income to total revenue		82			84			83			82			82
Efficiency		74			71			79			74			74

ASSETS UNDER ADMINISTRATION (in billions) (b) (c) (d)
Assets under management
Personal	$	40		$	39		$	44		$	42		$	42
Institutional		9			9			9			9			9

Total	$	49		$	48		$	53		$	51		$	51

Asset Type
Equity	$	29		$	28		$	31		$	28		$	28
Fixed income		14			14			16			16			16
Liquidity/other		6			6			6			7			7

Total	$	49		$	48		$	53		$	51		$	51

Nondiscretionary assets under administration
Personal	$	27		$	29		$	22		$	23		$	20
Institutional		64			65			65			63			65

Total	$	91		$	94		$	87		$	86		$	85

Asset Type
Equity	$	32		$	33		$	30		$	30		$	29
Fixed income		33			34			30			29			29
Liquidity/other		26			27			27			27			27

Total	$	91		$	94		$	87		$	86		$	85

OTHER INFORMATION (c)
Total nonperforming assets	$	10		$	11		$	11		$	11		$	5
Brokerage assets administered (in billions)	$	23		$	24		$	23		$	22		$	21
Full service brokerage offices		75			76			76			77			77
Financial consultants		436			444			445			458			475
Margin loans	$	268		$	270		$	256		$	257		$	253
Average FTE staff		2,787			2,804			2,810			2,906			2,945

(a)	See (a) on page 3.

(b)	Excludes brokerage assets administered.

(c)	Presented as of period-end, except for average FTEs.

(d)	Balance at March 31, 2004 reflects the first quarter 2004 sale of certain activities of the investment consulting business of Hawthorn and the expected resulting movement of accounts from assets under management to nondiscretionary assets under administration.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 7

BlackRock (Unaudited) (a)


*Three months ended* *Dollars in millions except as noted*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
INCOME STATEMENT
Investment advisory and administration fees	$	162		$	160		$	141		$	133		$	128
Other income		22			22			20			17			16

Total revenue		184			182			161			150			144
Operating expense		113			104			90			84			81
Fund administration and servicing costs		8			8			9			8			8

Total expense		121			112			99			92			89

Operating income		63			70			62			58			55
Nonoperating income		15			6			5			6			8

Pretax earnings		78			76			67			64			63
Minority interest		4
Income taxes		26			21			26			24			24

Earnings	$	48		$	55		$	41		$	40		$	39

PERIOD-END BALANCE SHEET
Goodwill and other intangible assets	$	186		$	186		$	192		$	192		$	192
Other assets		780			723			775			728			709

Total assets	$	966		$	909		$	967		$	920		$	901

Liabilities	$	211		$	186		$	254		$	223		$	192
Stockholders’ equity		755			723			713			697			709

Total liabilities and stockholders’ equity	$	966		$	909		$	967		$	920		$	901

PERFORMANCE DATA
Return on equity		26	%		31	%		23	%		23	%		23	%
Operating margin (b)		36			40			41			41			40
Diluted earnings per share	$	.73		$	.84		$	.63		$	.61		$	.58

ASSETS UNDER MANAGEMENT (in billions)
Separate accounts
Fixed income	$	200		$	202		$	190		$	178		$	175
Liquidity		7			6			6			6			5
Liquidity - securities lending		9			9			10			10			8
Equity		9			9			9			9			9
Alternative investment products		6			6			7			7			6

Total separate accounts		231			232			222			210			203
Mutual funds (c)
Fixed income		24			25			24			23			22
Liquidity		50			59			59			58			58
Equity		5			5			4			3			3

Total mutual funds		79			89			87			84			83

Total assets under management	$	310		$	321		$	309		$	294		$	286

OTHER INFORMATION
Average FTE staff		984			947			991			976			943


(a) See (a) on page 3.
(b) Calculated as operating income divided by total revenue less fund administration and servicing costs. The following is a reconciliation of this presentation to operating margin calculated on a GAAP basis (operating income divided by total revenue) in millions:

Operating income	$	63		$	70		$	62		$	58		$	55

Total revenue	$	184		$	182		$	161		$	150		$	144
Less fund administration and servicing costs		8			8			9			8			8

Revenue used for operating margin calculation, as reported	$	176		$	174		$	152		$	142		$	136

Operating margin, as reported		36	%		40	%		41	%		41	%		40	%
Operating margin, GAAP basis		34	%		38	%		38	%		38	%		38	%

PNC believes that operating margin, as reported, is a more relevant indicator of management’s ability to effectively employ BlackRock’s resources.
We have excluded fund administration and servicing costs 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.
(c) Includes BlackRock Funds, BlackRock Liquidity Funds, BlackRock Closed End Funds, Short Term Investment Fund and BlackRock Global Series Funds.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 8

PFPC (Unaudited) (a)


*Three months ended* *Dollars in millions except as noted*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
INCOME STATEMENT
Fund servicing revenue	$	199		$	203		$	194		$	188		$	187
Operating expense		158			167			155			150			151
(Accretion)/amortization of other intangibles, net		(1	)		(3	)		(4	)		(6	)		(4	)

Operating income		42			39			43			44			40
Nonoperating income (b)					2			3			3			4
Debt financing		14			14			16			18			18

Pretax earnings		28			27			30			29			26
Income taxes		11			11			12			12			10

Earnings	$	17		$	16		$	18		$	17		$	16

AVERAGE BALANCE SHEET
Goodwill and other intangible assets	$	1,024		$	1,027		$	1,034		$	1,034		$	1,055
Other assets		1,054			952			949			862			836

Total assets	$	2,078		$	1,979		$	1,983		$	1,896		$	1,891

Debt financing	$	1,137		$	1,163		$	1,248		$	1,290		$	1,290
Other liabilities, net		681			550			467			306			298
Capital		260			266			268			300			303

Total funds	$	2,078		$	1,979		$	1,983		$	1,896		$	1,891

PERFORMANCE RATIOS
Return on capital		26	%		23	%		27	%		22	%		21	%
Operating margin (c)		21			19			22			23			21

SERVICING STATISTICS (d)
Accounting/administration net assets (in billions)
Domestic	$	612		$	621		$	609		$	581		$	573
Foreign (e)		53			48			45			41			35

Total	$	665		$	669		$	654		$	622		$	608

Asset type
Money market	$	326		$	337		$	341		$	342		$	349
Equity		200			198			186			159			141
Fixed income		94			95			90			88			88
Other		45			39			37			33			30

Total	$	665		$	669		$	654		$	622		$	608

Custody assets (in billions)	$	416		$	411		$	401		$	384		$	371

Shareholder accounts (in millions)
Transfer agency		21			22			21			21			20
Subaccounting		34			33			32			29			28

Total		55			55			53			50			48

OTHER INFORMATION
Average FTE staff		4,816			4,910			4,801			4,760			5,328

(a)	See (a) on page 3.

(b)	Net of nonoperating expense.

(c)	Operating income divided by total fund servicing revenue.

(d)	Period end.

(e)	Represents net assets serviced offshore.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 9

Details of Net Interest Income and Net Interest Margin (Unaudited)

Taxable-equivalent basis


	For the quarter ended
Net Interest Income *In millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Interest income
Loans and fees on loans	$	483		$	483		$	463		$	479		$	497
Securities		131			146			142			142			155
Other		48			40			58			49			42

Total interest income		662			669			663			670			694

Interest expense
Deposits		107			104			102			106			117
Borrowed funds		70			68			73			75			54

Total interest expense		177			172			175			181			171

Net interest income (a)	$	485		$	497		$	488		$	489		$	523


	For the quarter ended
Net Interest Margin	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Average yields/rates
Yield on earning assets
Loans and fees on loans		5.04	%		5.24	%		5.31	%		5.50	%		5.67	%
Securities		3.33			3.57			3.65			3.71			4.22
Other		2.73			2.31			3.21			2.88			4.53
Total yield on earning assets		4.34			4.44			4.60			4.71			5.19
Rate on interest-bearing liabilities
Deposits		1.15			1.16			1.20			1.25			1.40
Borrowed funds		2.21			2.07			2.31			2.45			2.46
Total rate on interest-bearing liabilities		1.42			1.40			1.50			1.57			1.61

Interest rate spread		2.92			3.04			3.10			3.14			3.58
Impact of noninterest-bearing sources		.26			.26			.28			.30			.33

Net interest margin		3.18	%		3.30	%		3.38	%		3.44	%		3.91	%

(a)	The following is a reconciliation of net interest income as reported in the Consolidated Statement of Income to net interest income on a taxable-equivalent basis:


	For the quarter ended
*In millions*	June 30 2004		March 31 2004		December 31 2003		September 30 2003		June 30 2003
Net interest income, GAAP basis	$	481	$	494	$	485	$	487	$	521
Taxable-equivalent adjustment		4		3		3		2		2

Net interest income, taxable-equivalent basis	$	485	$	497	$	488	$	489	$	523


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 10

Details of Noninterest Income and Noninterest Expense (Unaudited)


*In millions*	For the quarter ended
Noninterest Income	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Asset management	$	250		$	252		$	229		$	216		$	209
Fund servicing		200			204			193			188			188
Service charges on deposits		63			59			62			60			60
Brokerage		56			58			51			46			46
Consumer services		67			63			63			65			64
Corporate services		128			125			123			132			114
Equity management gains (losses)		35			7						(4	)		(17	)
Net securities gains		14			15			15			19			26
Other		97			128			125			103			86

Total noninterest income	$	910		$	911		$	861		$	825		$	776

Net gains on institutional loans held for sale (included in “Corporate services” above)	$	17		$	28		$	16		$	23		$	15

Noninterest income to total revenue (a)		65	%		65	%		64	%		63	%		60	%

	For the quarter ended
Noninterest Expense	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Staff	$	491		$	463		$	472		$	448		$	446
Net occupancy		67			68			65			63			64
Equipment		70			74			71			67			69
Marketing		24			20			15			16			18
Distributions on capital securities (b)														14
Other		258			270			235			233			324

Total noninterest expense	$	910		$	895		$	858		$	827		$	935

Costs incurred, including legal fees, under DOJ agreement (included in “Other” above) (c)													$	120

Efficiency (d)		65	%		64	%		64	%		63	%		72	%

Bank efficiency (e)		63	%		60	%		61	%		60	%		72	%

(a)

Calculated as total noninterest income divided by the sum of net interest income and noninterest income. The ratio presented for the quarter ended December 31, 2003 excludes the impact of revenue included in the cumulative effect of an accounting adjustment recorded in that quarter, as we consider this to be a more meaningful comparison with the other periods presented. If the additional revenue included in the cumulative effect of an accounting adjustment had been included in the computation, the ratio would have been 62% for the quarter ended December 31, 2003.

(b)

We 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, our mandatorily redeemable capital securities of subsidiary trusts totaling $848 million were reclassified in the third quarter of 2003 from a separate line item between the liabilities and shareholders’ equity sections of the Consolidated Balance Sheet to borrowed funds. From July 1, 2003 through December 31, 2003, 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. Effective December 31, 2003, we deconsolidated the assets and liabilities of the Trusts based upon guidance included in FIN 46R. The deconsolidation of the trusts removed $1.148 billion of Capital Securities issued by these Trusts while adding $1.184 billion of junior subordinated debentures and $36 million of other assets to the Consolidated Balance Sheet at December 31, 2003.

(c)	See “Agreement with Department of Justice” in the Financial Review section of our Quarterly Report on Form 10-Q for the second quarter of 2003 and our Current Report on Form 8-K dated June 23, 2004 for further information.

(d)

Calculated as noninterest expense divided by the sum of net interest income and noninterest income. The ratio presented for the quarter ended December 31, 2003 excludes the impact of revenue and expense included in the cumulative effect of an accounting adjustment recorded in that quarter, as we consider this to be a more meaningful comparison with the other periods presented. If the additional revenue and expense included in the cumulative effect of an accounting adjustment had been included in this computation, the ratio would have been 66% for the quarter ended December 31, 2003.

(e)	The bank efficiency ratio represents the consolidated efficiency ratio excluding the effect of BlackRock and PFPC.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 11

Average Consolidated Balance Sheet (Unaudited)


*Three months ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Assets
Interest-earning assets
Securities
Securities available for sale
U.S. Treasury and government agencies/corporations	$	6,654		$	6,432		$	5,929		$	4,562		$	3,825
Other debt		8,624			9,293			9,154			10,187			10,325
State and municipal		225			264			149			144			101
Corporate stocks and other		259			282			383			397			421

Total securities available for sale		15,762			16,271			15,615			15,290			14,672
Securities held to maturity		2			2			2			5

Total securities		15,764			16,273			15,617			15,295			14,672
Loans, net of unearned income
Commercial		15,568			14,921			14,465			14,712			14,965
Commercial real estate		2,100			2,249			1,825			2,034			2,169
Consumer		13,595			12,340			11,300			10,832			10,346
Residential mortgage		3,622			3,492			2,932			2,807			3,244
Lease financing		3,010			3,391			3,477			3,633			3,767
Other		362			354			353			360			360

Total loans, net of unearned income		38,257			36,747			34,352			34,378			34,851
Loans held for sale		1,636			1,560			1,645			1,480			1,754
Federal funds sold					207			12			46			116
Resale agreements		1,896			2,028			1,997			1,690			964
Purchased customer receivables		1,812			2,107			2,385			2,495
Other		1,550			1,161			1,084			911			899

Total interest-earning assets		60,915			60,083			57,092			56,295			53,256
Noninterest-earning assets
Allowance for loan and lease losses		(603	)		(653	)		(645	)		(674	)		(671	)
Cash and due from banks		2,793			2,896			2,774			2,788			2,679
Other assets		10,762			10,697			9,873			10,044			10,301

Total assets	$	73,867		$	73,023		$	69,094		$	68,453		$	65,565


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 12

Average Consolidated Balance Sheet (Unaudited)


*Three months ended - in millions*	June 30 2004		March 31 2004		December 31 2003		September 30 2003		June 30 2003
Liabilities, Minority and Noncontrolling Interests, Capital Securities and Shareholders’ Equity
Interest-bearing liabilities
Interest-bearing deposits
Money market	$	16,027	$	15,581	$	15,249	$	15,198	$	15,111
Demand		7,878		7,873		7,496		7,277		7,030
Savings		2,595		2,590		2,099		2,133		2,131
Retail certificates of deposit		8,650		8,780		8,268		8,460		8,892
Other time		680		343		265		264		269
Time deposits in foreign offices		1,485		806		466		238		220

Total interest-bearing deposits		37,315		35,973		33,843		33,570		33,653
Borrowed funds
Federal funds purchased		2,303		1,912		1,558		1,306		692
Repurchase agreements		1,508		1,157		1,226		1,204		1,116
Bank notes and senior debt		2,752		2,752		2,752		2,904		3,555
Federal Home Loan Bank borrowings		184		1,180		1,119		1,129		1,138
Subordinated debt		3,545		3,593		2,175		1,949		2,025
Mandatorily redeemable capital securities of subsidiary trusts						881		848
Commercial paper		1,815		2,111		2,388		2,501
Other borrowed funds		449		442		306		258		175

Total borrowed funds		12,556		13,147		12,405		12,099		8,701

Total interest-bearing liabilities		49,871		49,120		46,248		45,669		42,354
Noninterest-bearing liabilities, minority and noncontrolling interests, capital securities and shareholders’ equity
Demand and other noninterest-bearing deposits		11,681		11,350		11,070		11,040		10,278
Allowance for unfunded loan commitments and letters of credit		90		90		88		77		77
Accrued expenses and other liabilities		4,772		5,020		4,688		4,827		4,980
Minority and noncontrolling interests in consolidated entities		419		434		471		295		252
Mandatorily redeemable capital securities of subsidiary trusts										848
Shareholders’ equity		7,034		7,009		6,529		6,545		6,776

Total liabilities, minority and noncontrolling interests, capital securities and shareholders’ equity	$	73,867	$	73,023	$	69,094	$	68,453	$	65,565

Supplemental Average Balance Sheet Information
Interest-bearing deposits	$	37,315	$	35,973	$	33,843	$	33,570	$	33,653
Demand and other noninterest-bearing deposits		11,681		11,350		11,070		11,040		10,278

Total deposits	$	48,996	$	47,323	$	44,913	$	44,610	$	43,931

Common shareholders’ equity	$	7,026	$	7,000	$	6,520	$	6,536	$	6,767


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 13

Details of Loans and Loans Held for Sale (Unaudited)

Loans


*Period ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Commercial
Retail/wholesale	$	4,634		$	4,428		$	4,197		$	4,093		$	4,109
Manufacturing		3,747			3,497			3,321			3,618			3,591
Service providers		1,921			1,956			1,822			1,865			1,936
Real estate related		1,616			1,432			1,303			1,454			1,479
Financial services		1,268			1,157			1,169			1,251			1,274
Health care		470			448			403			413			407
Communications		105			78			93			68			78
Other		2,114			2,020			1,855			1,861			1,919

Total commercial		15,875			15,016			14,163			14,623			14,793

Commercial real estate
Real estate projects		1,530			1,521			1,392			1,429			1,563
Mortgage		575			534			432			464			464

Total commercial real estate		2,105			2,055			1,824			1,893			2,027

Consumer
Home equity		11,946			11,160			9,790			9,486			8,876
Automobile		825			762			543			522			509
Other		1,261			1,261			1,099			1,151			1,166

Total consumer		14,032			13,183			11,432			11,159			10,551

Residential mortgage		3,906			3,537			2,886			2,894			3,114
Lease financing
Equipment		3,747			3,765			3,691			3,684			3,580
Vehicles					583			744			934			1,130

Total lease financing		3,747			4,348			4,435			4,618			4,710

Other		352			360			349			364			357
Unearned income		(923	)		(980	)		(1,009	)		(1,037	)		(1,018	)

Total, net of unearned income	$	39,094		$	37,519		$	34,080		$	34,514		$	34,534

Wholesale Lending Statistics (a)
Portfolio composition-total exposure
Investment grade equivalent or better		53	%		53	%		52	%		52	%		53	%
Non-investment grade (secured lending)		24			24			25			25			24
Non-investment grade (other)		23			23			23			23			23

Total		100	%		100	%		100	%		100	%		100	%

Client relationships >$50 million-total exposure	$	12,596		$	12,000		$	12,396		$	12,662		$	12,852
Client relationships >$50 million-customers		140			134			138			139			143

Consumer Loan Statistic (b)
Net charge-offs to loans		.21	%		.22	%		.29	%		.24	%		.27	%

Loans Held for Sale

*Period ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Education loans	$	1,185		$	1,180		$	1,014		$	1,140		$	1,059
Institutional lending repositioning		27			61			70			98			126
Other		245			307			316			293			290

Total	$	1,457		$	1,548		$	1,400		$	1,531		$	1,475

(a)	Includes amounts for customers of Market Street Funding Corporation.

(b)	Includes consumer, residential mortgage and vehicle leasing.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 14

Allowances For Loan and Lease Losses And Unfunded Loan Commitments And Letters Of Credit (Unaudited)

Change in Allowance For Loan and Lease Losses


*Three months ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Beginning balance	$	604		$	632		$	648		$	673		$	680
Charge-offs
Commercial		(26	)		(59	)		(53	)		(56	)		(27	)
Commercial real estate					(2	)					(1	)		(2	)
Consumer		(11	)		(11	)		(10	)		(9	)		(10	)
Residential mortgage					(1	)		(2	)		(1	)		(1	)
Lease financing		(1	)		(2	)		(4	)		(5	)		(29	)

Total charge-offs (a)		(38	)		(75	)		(69	)		(72	)		(69	)
Recoveries
Commercial		5			8			15			5			2
Commercial real estate		1						1
Consumer		3			3			3			3			3
Residential mortgage					1						1
Lease financing		3			1			1						1

Total recoveries		12			13			20			9			6
Net charge-offs
Commercial		(21	)		(51	)		(38	)		(51	)		(25	)
Commercial real estate		1			(2	)		1			(1	)		(2	)
Consumer		(8	)		(8	)		(7	)		(6	)		(7	)
Residential mortgage								(2	)					(1	)
Lease financing		2			(1	)		(3	)		(5	)		(28	)

Total net charge-offs		(26	)		(62	)		(49	)		(63	)		(63	)
Provision for credit losses		8			12			34			50			57

Acquired allowance (United National)					22
Reclassification to other assets - FIN 46R											(1	)
Net change in allowance for unfunded loan commitments and letters of credit		7						(1	)		(11	)		(1	)

Ending balance	$	593		$	604		$	632		$	648		$	673


Change In Allowance For Unfunded Loan Commitments And Letters Of Credit

*Three months ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Beginning balance	$	90		$	90		$	89		$	78		$	77
Net change in allowance for unfunded loan commitments and letters of credit		(7	)					1			11			1

Ending balance	$	83		$	90		$	90		$	89		$	78


Net Unfunded Commitments

*In millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Net unfunded commitments	$	27,587		$	26,356		$	25,183		$	24,664		$	25,514

(a)	During the first quarter of 2004, we changed our policy for recognizing charge-offs on smaller commercial loans. This change resulted in the recognition of an additional $24 million of gross charge-offs for the first quarter of 2004.


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 15

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Type


*Period ended - in millions*	June 30 2004			March 31 2004			December 31 2003			September 30 2003			June 30 2003
Nonaccrual loans
Commercial (a)	$	119		$	132		$	213		$	286		$	296
Lease financing		13			12			11			15			6
Commercial real estate		3			3			6			4			6
Consumer		11			10			11			10			11
Residential mortgage (b)		23			26			24			8			7

Total nonaccrual loans		169			183			265			323			326
Troubled debt restructured loan								1			1			1
Total nonperforming loans		169			183			266			324			327

Nonperforming loans held for sale (c)		2			4			27			35			45
Foreclosed and other assets
Lease financing		17			17			17			18			19
Residential mortgage		11			13			9			9			7
Other		8			12			9			10			6

Total foreclosed and other assets		36			42			35			37			32

Total nonperforming assets (d)	$	207		$	229		$	328		$	396		$	404

Nonperforming loans to total loans		.43	%		.49	%		.78	%		.94	%		.95	%
Nonperforming assets to total loans, loans held for sale and foreclosed assets		.51			.59			.92			1.10			1.12
Nonperforming assets to total assets		.28			.31			.48			.58			.60


(a) See Note (a) on page 14.
(b) During the fourth quarter of 2003, we 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.
(c) Includes troubled debt restructured loans held for sale.	$	2		$	3		$	10		$	9		$	11
(d) Excludes equity management assets carried at estimated fair value (June 30, 2004, March 31, 2004, December 31, 2003, September 30, 2003 and June 30, 2003 amounts include troubled debt restructured assets of $10 million, $11 million, $5 million, $7 million and $3 million, respectively).	$	32		$	29		$	37		$	38		$	39

Change in Nonperforming Assets


June 30, 2003 - in millions	Three months ended			Six months ended
Beginning of period	$	229		$	328
Purchases (United National)					12
Transferred from accrual		69			116
Returned to performing		(1	)		(2	)
Principal reductions and payoffs		(65	)		(139	)
Asset sales		(6	)		(48	)
Charge-offs and valuation adjustments		(19	)		(60	)

June 30	$	207		$	207


THE PNC FINANCIAL SERVICES GROUP, INC.		Page 16

Details of Nonperforming Assets (Unaudited)

Nonperforming Assets by Business Segment


*Period ended - in millions*	June 30 2004		March 31 2004		December 31 2003		September 30 2003		June 30 2003
Regional Community Banking
Nonperforming loans (a)	$	70	$	64	$	74	$	62	$	64
Foreclosed and other assets		11		11		11		10		9

Total	$	81	$	75	$	85	$	72	$	73

Wholesale Banking
Nonperforming loans	$	85	$	102	$	177	$	251	$	257
Nonperforming loans held for sale		2		4		27		35		45
Foreclosed and other assets		21		25		23		25		22

Total	$	108	$	131	$	227	$	311	$	324

PNC Advisors
Nonperforming loans	$	9	$	11	$	11	$	10	$	5
Foreclosed and other assets		1						1

Total	$	10	$	11	$	11	$	11	$	5

Other (b)
Nonperforming loans (a)	$	5	$	6	$	4	$	1	$	1
Foreclosed and other assets		3		6		1		1		1

Total	$	8	$	12	$	5	$	2	$	2

Consolidated Totals
Nonperforming loans	$	169	$	183	$	266	$	324	$	327
Nonperforming loans held for sale		2		4		27		35		45
Foreclosed and other assets		36		42		35		37		32

Total	$	207	$	229	$	328	$	396	$	404

Largest Nonperforming Assets at June 30, 2004 - in millions (c)


Ranking	Outstandings	Industry
1	$17	Transportation
2	15	Metals Related
3	7	Individuals
4	7	Other Media/Communication
5	6	Metals Related
6	5	Miscellaneous Manufacturing
7	5	Miscellaneous Services
8	4	Miscellaneous Manufacturing
9	4	Miscellaneous Manufacturing
10	4	Transportation

Total	$74

As a percent of nonperforming assets
	35.75 %

(a)	See Note (b) on page 15. Amounts at June 30, 2004, March 31, 2004 and December 31, 2003 reflect the impact of this change.

(b)	Represents residential mortgages related to PNC’s Asset and Liability Management function.

(c)	Amounts shown are not net of related allowance for loan and lease losses.


		Page 17

Glossary of Terms

Accounting/administration net assets - Net domestic and foreign fund investment assets for which we provide accounting and administration services. We do not include these assets on our 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 we have sole or shared investment authority for our customers/clients. We do not include these assets on our Consolidated Balance Sheet.

Capital - Represents the amount of resources that a business segment should hold to guard against potentially large losses that could cause insolvency. It is based on a measurement of economic risk, as opposed to risk as defined by regulatory bodies or generally accepted accounting principles. The economic capital assessment process involves converting a risk distribution to the capital that is required to support the risk, consistent with an institution’s target credit rating. As such, economic risk serves as a “common currency” of risk that allows an institution to compare different risks on a similar basis.

Charge-off - Process of removing a loan or portion of a loan from a bank’s balance sheet because it 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 held on behalf of clients under safekeeping arrangements. We do not include these assets on our Consolidated Balance Sheet. Assets held in custody at other institutions on our behalf are included in the appropriate asset categories on the Consolidated Balance Sheet as if physically held by us.

Earning assets - Assets that generate income, which include: short-term investments; loans held for sale; loans, net of unearned income; securities; federal funds sold; resale agreements; purchased customer receivables; and certain other assets.

Economic value of equity (“EVE”) – The present value of the expected cash flows of our existing assets less the present value of the expected cash flows of our existing liabilities, plus the present value of the net cash flows of our existing off-balance sheet positions.

Efficiency - Noninterest expense divided by the sum of net interest income and noninterest income.

Funds transfer pricing – A management accounting methodology designed to recognize the net interest income effects of sources and uses of funds provided by the assets and liabilities of our business segments. These balances are assigned funding rates that represent the interest cost for us to raise/invest funds with similar maturity and repricing structures, using the least-cost funding sources available.

Leverage ratio - Tier 1 risk-based capital divided by adjusted average total assets.


		Page 18

Net interest margin - Annualized taxable-equivalent net interest income divided by average earning assets.

Nondiscretionary assets under administration - Assets we hold for our customers/clients in a non-discretionary capacity. We do not include these assets on our 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.

Nonperforming assets - Nonperforming assets include nonaccrual loans, troubled debt restructured loans, nonaccrual loans held for sale, foreclosed assets, and other assets. Interest income does not accrue on assets classified as nonperforming.

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. Interest income does not accrue on loans classified as nonperforming.

Recovery - Cash proceeds received on a loan that had previously been charged off. The amount received is credited to the allowance for loan and lease losses.

Return on capital - Annualized net income divided by average capital.

Return on average assets - Annualized net income divided by average assets.

Return on average equity - Annualized net income 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 of legally transforming financial assets into securities.

Shareholders’ equity to total assets – Period-end total shareholders’ equity divided by period-end 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 period-end risk-weighted assets.


		Page 19

Total assets serviced – Total domestic and foreign fund investment assets for which we provide related processing services. We do not include these assets on our 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 period-end risk-weighted assets.

Business Segment Products and Services

Regional Community Banking provides deposit, lending, cash management and investment services to 2.2 million consumer and small business customers within PNC’s primary geographic footprint.

Wholesale Banking provides lending, treasury management and capital markets-related products and services to mid-sized corporations, government entities and selectively to large corporations. Lending products include secured and unsecured loans, letters of credit and equipment leases. Treasury management services include cash and investment management, receivables management, disbursement services and global trade services. Capital markets products include foreign exchange, derivatives, loan syndications and securities underwriting and distribution.

PNC Advisors provides a broad range of tailored investment, trust and private banking products and services to affluent individuals and families, including services to the ultra-affluent through its Hawthorn unit, and provides full-service brokerage through J.J.B. Hilliard, W.L.Lyons, Inc. 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^® product. PNC Advisors provides services to individuals and corporations primarily within PNC’s primary geographic markets.

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 Liquidity Funds (formerly BlackRock Provident Institutional Funds). In addition, BlackRock provides risk management and investment system services to institutional investors under the BlackRock Solutions® 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 and providing processing solutions to the international marketplace through its Ireland and Luxembourg operations.