PNC remains committed to responsible lending to support economic growth. Loans and commitments originated and renewed totaled approximately $27 billion in the fourth quarter and $110 billion for the year. Included were $4 billion of small business loans originated and renewed in 2009, and PNC has enhanced its second-look programs for small business loan applications. As of December 31, 2009, PNC had funded approximately 2,100 refinances totaling $.4 billion through the Home Affordable Refinance Program and over 70,000 solicitations under the Home Affordable Modification Program had been sent to eligible borrowers.

Loans totaled $158 billion at December 31, 2009 and declined 2 percent during the fourth quarter reflecting a slower pace of decline compared with the first nine months of 2009.

During the year the company effectively managed deposit pricing and realigned the deposit mix, growing transaction deposits by $15 billion, or 14 percent, and reducing nonrelationship certificates of deposit by approximately $16 billion.

Pretax pre-provision earnings of $2.7 billion exceeded the provision for credit losses by $1.7 billion in the fourth quarter of 2009. For the full year 2009, pretax pre-provision earnings of $7.3 billion exceeded the provision for credit losses by $3.3 billion.

Total revenue was $5.1 billion for the quarter and $17.0 billion for 2009, reflecting PNC’s diverse revenue sources. Net interest income increased during the quarter primarily due to higher than expected cash collections on impaired commercial loans. The net interest margin increased 29 basis points linked quarter to 4.05 percent for the fourth quarter of 2009 and 45 basis points to 3.82 percent for full year 2009 compared with the same periods in 2008.

Expenses of $2.4 billion in the fourth quarter were comparable to the third quarter as a $100 million increase in acquisition cost savings was partially offset by a $66 million increase in integration costs. For the year, expenses were $9.7 billion, including $.4 billion of integration costs offset by $800 million of acquisition cost savings.

The pace of credit quality deterioration continued to ease during the fourth quarter. Nonperforming assets increased $.7 billion over the third quarter to $6.3 billion, a lower increase compared with the $1.0 billion increase in the third quarter. PNC strengthened loan loss reserves for the 11^th consecutive quarter. The allowance for loan and lease losses of $5.1 billion combined with $4.9 billion of marks on acquired impaired loans represented approximately 6 percent of loans outstanding at December 31, 2009.

Capital ratios continued to grow. The estimated Tier 1 common equity ratio increased by 50 basis points to 6.0 percent at December 31, 2009 and the estimated Tier 1 risk-based capital ratio increased by 60 basis points to 11.5 percent as of year end.

PNC continued to maintain a strong bank liquidity position with an 84 percent loan to deposit ratio at December 31, 2009. Holding company liquidity remained strong with sufficient liquid assets to fund 2010 debt maturities and other corporate obligations.

The acquisition of National City Corporation exceeded expectations during 2009.

The transaction was accretive to each quarter and full year 2009 earnings.

Cost savings of over $800 million were realized in 2009. PNC increased its multi-year cost savings goal to $1.5 billion from $1.2 billion and is on track to meet the new goal.

PNC successfully completed the first major conversion of National City customers to the PNC platform in November 2009, with three remaining conversions on schedule to be completed by June 2010, ahead of original plans.

Consolidation of bank charters was completed in November 2009.

Checking relationships increased by 2,000 and active online banking and online bill payment customers grew by 3 percent and 2 percent, respectively, during the fourth quarter.

Average deposit balances declined $4.3 billion during the fourth quarter due primarily to required branch divestitures in the third quarter and the planned run off of higher rate certificates of deposit net of successful retention of customer relationships. Excluding approximately $1.4 billion of average transaction deposits from third quarter balances related to branch divestitures, average transaction deposits increased $1 billion in the fourth quarter. The deposit strategy of Retail Banking is to remain disciplined on pricing while targeting specific products and markets for growth. A continued decline in certificates of deposit is expected into 2010.

Average loan balances increased $.6 billion compared with the linked quarter as a result of higher education and credit card loans partially offset by declines due to branch divestitures in the third quarter and lower commercial, residential mortgage and home equity loans. In the current environment, consumer and commercial loan origination is being outpaced by refinances, paydowns and net charge-offs.

Net interest income for the fourth quarter of 2009 declined $32 million, or 4 percent, compared with the third quarter primarily as a result of lower interest credits assigned to deposits, reflective of the rate environment.

Noninterest income for the quarter declined $23 million, or 4 percent, compared with the linked quarter as a result of the impact of branch divestitures in the third quarter, a decrease in service charges on deposits related to lower overdraft charges, and lower brokerage fees.

Noninterest expense for the fourth quarter declined $29 million, or 3 percent, compared with the third quarter. Expenses were well managed as continued investments in distribution channels were more than offset by reductions in expenses from acquisitions and the required branch divestitures.

Provision for credit losses was $409 million for the fourth quarter of 2009 compared with $313 million in the third quarter due to an increase in reserves required for small commercial loans and the credit card portfolio.

Retail Banking had 2,512 branches and an ATM network of 6,473 machines at December 31, 2009, giving PNC one of the largest distribution networks among U.S. banks. During the fourth quarter of 2009, PNC opened 9 traditional branches and 5 in-store branches, consolidated 55 branches as a result of the first National City conversion in November, and added 10 ATMs.

Retail Banking 2009 results were slightly impacted by changes to overdraft charges, as mentioned above. In 2010, Retail Banking revenue will be negatively impacted in a more significant manner by 1) the new rules set forth in Regulation E related to overdraft charges and 2) the Credit Card Act of 2009. Current estimates are that 2010 earnings will be impacted by approximately $115 million after tax related to Regulation E and by approximately $40 million after tax attributable to the Credit Card Act of 2009. These estimates do not include any additional negative impact to revenue for other changes that may be made in 2010 from a customer advocacy perspective or other/additional regulatory requirements, or any offsetting impact of changes to products and/or pricing.

Net interest income for the fourth quarter of 2009 was $1.0 billion, an increase of $94 million compared with the third quarter of 2009 primarily due to higher than expected cash collections on impaired commercial loans, an increase in average noninterest-bearing demand deposits and a higher spread on loans, which more than offset the impact of a decrease in average loans.

Corporate service fees increased to $235 million in the fourth quarter of 2009 compared with $226 million in the linked quarter. The increase was primarily the result of higher merger and acquisition advisory fees.

Other noninterest income decreased $42 million to $133 million in the fourth quarter of 2009 compared with the third quarter mainly due to lower gains on loan sales from portfolio management activities.

Noninterest expense was $444 million in the fourth quarter of 2009 compared with $459 million in the third quarter. The decrease was primarily from lower asset impairment costs largely in the transportation related portfolio and a decline in compensation-related costs.

Provision for credit losses was $283 million in the fourth quarter of 2009 compared with $384 million in the third quarter of 2009. The decrease reflected a slowing pace of credit quality deterioration. Net charge-offs in the fourth quarter totaled $341 million. The $119 million increase compared with the linked quarter primarily resulted from commercial real estate loans.

Average loans were $67 billion for the fourth quarter of 2009 compared with $70 billion in the third quarter of 2009. The decrease was due to lower utilization levels among middle market and large corporate clients.

Average deposits were $43 billion in the fourth quarter of 2009, an increase of $3.7 billion, or 9 percent, compared with the third quarter. Continued deposit growth reflected customer movement of balances from off-balance sheet sweep products into noninterest-bearing demand deposits.

The commercial mortgage servicing portfolio was $287 billion at December 31, 2009 compared with $275 billion at September 30, 2009 and $270 billion at December 31, 2008. Continued growth in the agency and conventional servicing portfolios was somewhat offset by a decline in the commercial mortgage-backed securities servicing portfolio.

Assets under administration decreased to $205 billion at December 31, 2009 compared with $217 billion at September 30, 2009. Discretionary assets under management decreased to $103 billion at December 31, 2009 compared with $104 billion at September 30, 2009. The declines in discretionary and nondiscretionary assets were due to the exit of a noncore product offering and other National City integration impacts.

Noninterest income of $151 million for the quarter decreased $4 million compared with the third quarter of 2009 as increased asset management fees from new business generation and the improving equity markets were offset by lower other income.

Net interest income for the fourth quarter decreased $3 million, or 4 percent, compared with the linked quarter due to a reduction in higher yield loans.

Noninterest expense of $155 million declined by $7 million in the fourth quarter compared with the third quarter. This was the third consecutive quarterly decline as continued expense discipline and the benefits from acquisition-related initiatives were realized.

Provision for credit losses was $25 million for the fourth quarter of 2009 compared with $9 million for the third quarter. The increase in the provision was attributable to an increase in reserves required for primarily small commercial loans. Credit quality indicators remained stable and reserves were consistent with the linked quarter.

Average deposits for the quarter increased $148 million, or 2 percent, from the linked quarter as seasonal increases in demand deposits exceeded the planned run off of high rate certificates of deposit. Average loan balances decreased $80 million, or 1 percent, compared with the linked quarter as home equity loan growth was mitigated by declines in commercial loans and residential mortgages.

Total loan originations were $2.3 billion for the fourth quarter compared with $3.6 billion in the linked quarter, reflecting a significant drop in origination activity consistent with industry trends. Loans were primarily originated through direct channels under FNMA, FHLMC and FHA/VA agency guidelines.

Residential mortgage loans serviced for others totaled $145 billion at December 31, 2009 compared with $158 billion at September 30, 2009. During the fourth quarter $7.9 billion of servicing was sold and payoffs continued to slightly outpace new direct loan origination volume.

Noninterest income was $105 million in the fourth quarter of 2009 compared with $209 million in the third quarter. The decline was primarily due to a $57 million decrease in loan sales revenue driven by an increase in loan repurchase reserves primarily related to origination activities in prior years. Net hedging gains on mortgage servicing rights declined by $25 million in the fourth quarter.

Net interest income was $71 million in the fourth quarter of 2009 compared with $83 million in the third quarter, reflecting lower warehouse volumes and lower escrow deposits.

Noninterest expense was $142 million for the fourth quarter of 2009, up $1 million compared with the linked quarter. Higher foreclosure costs were partially offset by a decline in personnel expense.

The fair value of mortgage servicing rights was $1.3 billion at December 31, 2009, unchanged from September 30, 2009. The sale of servicing was offset by a higher fair value of the asset from lower prepayment expectations due to higher interest rates at year end.

Servicing revenue totaled $206 million and increased 3 percent over the linked quarter. Higher asset based fees resulting from higher equity markets, client inflows, and reimbursement of higher out-of-pocket client expenses were partially offset by lower revenue earned in interest sensitive businesses. Servicing revenue declined $16 million, or 7 percent, from fourth quarter 2008 due to the business impact of the lower rate environment as well as increased fund redemptions and account closures during the past year as a result of the volatility in the equity markets during that time.

Operating expense totaled $169 million, up slightly from third quarter 2009 levels and $5 million, or 3 percent, lower than fourth quarter 2008. The decrease from the prior year quarter was largely due to actions taken to reduce costs in response to the market downturn including job and salary actions in certain businesses and renegotiation of vendor contracts. The small increase from the linked quarter was driven by higher out-of-pocket client expenses that are billed and reimbursed.

Global Investment Servicing provided accounting/administration services for $855 billion of net fund assets and custody services for $459 billion of fund assets as of December 31, 2009 compared with $795 billion and $427 billion, respectively, at September 30, 2009 and $839 billion and $379 billion, respectively, at December 31, 2008. Increases in both categories over the linked quarter and prior year reflected the recovering equity markets, inflows from existing clients and new client conversions.

Total fund assets serviced by Global Investment Servicing were $2.3 trillion at December 31, 2009 compared with asset servicing levels of $2.2 trillion at September 30, 2009 and $2.0 trillion at December 31, 2008.

Average loans declined to $19 billion for the fourth quarter of 2009 compared with $20 billion in the third quarter. The decrease in average loans was primarily driven by scheduled repayments and net charge-offs.

Acquired impaired loans were reduced to $7.6 billion at December 31, 2009 compared with $7.8 billion at September 30, 2009 primarily as a result of paydowns. This segment contained 74 percent of the company’s acquired impaired loans at year end.

Net interest income decreased to $218 million for the fourth quarter of 2009 compared with $235 million for the third quarter primarily due to lower portfolio levels.

Noninterest income was $3 million for the fourth quarter compared with $19 million in the linked quarter. The decrease was mainly due to the impact of loan disposition activity in the fourth quarter.

Noninterest expense decreased $13 million to $49 million for the fourth quarter of 2009 compared with the third quarter due to reduced levels of other real estate owned operating expenses and improved disposition results related to sales of other real estate owned.

The provision for credit losses of $314 million increased $146 million compared with the linked quarter as a result of higher reserves for certain impaired consumer loans from lowered cash flow expectations.

Loans in this segment require special servicing and management oversight given current loan performance and market conditions. The business activities of this segment are focused on maximizing value within a defined risk profile, including selling assets when the terms and conditions are appropriate.

Our businesses and financial results are affected by business and economic conditions, both generally and specifically in the principal markets in which we operate. In particular, our businesses and financial results may be impacted by:

Changes in interest rates and valuations in the debt, equity and other financial markets.

Disruptions in the liquidity and other functioning of financial markets, including such disruptions in the markets for real estate and other assets commonly securing financial products.

Actions by the Federal Reserve and other government agencies, including those that impact money supply and market interest rates.

Changes in our customers’, suppliers’ and other counterparties’ performance in general and their creditworthiness in particular.

Changes in levels of unemployment.

Changes in customer preferences and behavior, whether as a result of changing business and economic conditions or other factors.

A continuation of recent turbulence in significant portions of the US and global financial markets, particularly if it worsens, could impact our performance, both directly by affecting our revenues and the value of our assets and liabilities and indirectly by affecting our counterparties and the economy generally.

Our business and financial performance could be impacted as the financial industry restructures in the current environment, both by changes in the creditworthiness and performance of our counterparties and by changes in the competitive and regulatory landscape.

Given current economic and financial market conditions, our forward-looking financial statements are subject to the risk that these conditions will be substantially different than we are currently expecting. These statements are based on our current expectations that interest rates will remain low in the first half of 2010 but will move upward in the second half of the year and our view that the modest economic recovery that began last year will extend through 2010.

Legal and regulatory developments could have an impact on our ability to operate our businesses or our financial condition or results of operations or our competitive position or reputation. Reputational impacts, in turn, could affect matters such as business generation and retention, our ability to attract and retain management, liquidity, and funding. These legal and regulatory developments could include:

Changes resulting from legislative and regulatory responses to the current economic and financial industry environment, including current and future conditions or restrictions imposed as a result of our participation in the TARP Capital Purchase Program.

Other legislative and regulatory reforms, including broad-based restructuring of financial industry regulation as well as changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other aspects of the financial institution industry.

Increased litigation risk from recent regulatory and other governmental developments.

Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental inquiries.

The results of the regulatory examination and supervision process, including our failure to satisfy the requirements of agreements with governmental agencies.

Changes in accounting policies and principles.

Our issuance of securities to the US Department of the Treasury may limit our ability to return capital to our shareholders and is dilutive to our common shares. If we are unable previously to redeem the shares, the dividend rate increases substantially after five years.

Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through the effective use of third-party insurance, derivatives, and capital management techniques, and by our ability to meet evolving regulatory capital standards.

The adequacy of our intellectual property protection, and the extent of any costs associated with obtaining rights in intellectual property claimed by others, can impact our business and operating results.

Our ability to anticipate and respond to technological changes can have an impact on our ability to respond to customer needs and to meet competitive demands.

Our ability to implement our business initiatives and strategies could affect our financial performance over the next several years.

Competition can have an impact on customer acquisition, growth and retention, as well as on our credit spreads and product pricing, which can affect market share, deposits and revenues.

Our business and operating results can also be affected by widespread natural disasters, terrorist activities or international hostilities, either as a result of the impact on the economy and capital and other financial markets generally or on us or on our customers, suppliers or other counterparties specifically.

Also, risks and uncertainties that could affect the results anticipated in forward-looking statements or from historical performance relating to our equity interest in BlackRock, Inc. are discussed in more detail in BlackRock’s filings with the SEC, including in the Risk Factors sections of BlackRock’s reports. BlackRock’s SEC filings are accessible on the SEC’s website and on or through BlackRock’s website at www.blackrock.com. This material is referenced for informational purposes only and should not be deemed to constitute a part of this document.

The anticipated benefits of the transaction, including anticipated cost savings and strategic gains, may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events.

Our ability to achieve anticipated results from this transaction is dependent on the state going forward of the economic and financial markets, which have been under significant stress recently. Specifically, we may incur more credit losses from National City’s loan portfolio than expected. Other issues related to achieving anticipated financial results include the possibility that deposit attrition or attrition in key client, partner and other relationships may be greater than expected.

Legal proceedings or other claims made and governmental investigations currently pending against National City, as well as others that may be filed, made or commenced relating to National City’s business and activities before the acquisition, could adversely impact our financial results.

Our ability to achieve anticipated results is also dependent on our ability to bring National City’s systems, operating models, and controls into conformity with ours and to do so on our planned time schedule. The integration of National City’s business and operations into PNC, which includes conversion of National City’s different systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to National City’s or PNC’s existing businesses. PNC’s ability to integrate National City successfully may be adversely affected by the fact that this transaction has resulted in PNC entering several markets where PNC did not previously have any meaningful retail presence.

Revenue

Net interest income

Noninterest income

Total revenue

Noninterest expense

Pretax, pre-provision earnings

Provision for credit losses

Net income (loss)

Net income (loss) attributable to common shareholders

Diluted earnings (loss) per common share

Cash dividends declared per common share

Total preferred dividends declared

TARP Capital Purchase Program preferred dividends

Impact of TARP Capital Purchase Program preferred dividends per common share

SELECTED RATIOS

Net interest margin (d)

Noninterest income to total revenue (e)

Efficiency (f)

Return on:

Average common shareholders’ equity

Average assets

Net income, as reported

Adjustments:

Gain on BlackRock/BGI transaction

Integration costs

Net income, as adjusted

Net income (loss), as reported

Adjustments:

Conforming provision for credit losses - National City

Other integration costs

Net income, as adjusted

Net income, as reported

Adjustments:

Gain on BlackRock/BGI transaction

Conforming provision for credit losses - National City

Other integration costs

Net income, as adjusted

BALANCE SHEET DATA

Dollars in millions, except per share data

Assets

Loans

Allowance for loan and lease losses

Interest-earning deposits with banks

Investment securities

Loans held for sale

Goodwill and other intangible assets

Equity investments

Noninterest-bearing deposits

Interest-bearing deposits

Total deposits

Borrowed funds

Shareholders’ equity

Common shareholders’ equity

Accumulated other comprehensive loss

Book value per common share

Common shares outstanding (millions)

Loans to deposits

ASSETS UNDER ADMINISTRATION (billions)

Discretionary assets under management

Nondiscretionary assets under administration

Total assets under administration

FUND ASSETS SERVICED (billions)

Accounting/administration net assets

Custody assets

CAPITAL RATIOS

Tier 1 risk-based (a)

Tier 1 common (a)

Total risk-based (a)

Leverage (a) (b)

Common shareholders’ equity to assets

ASSET QUALITY RATIOS

Nonperforming loans to total loans

Nonperforming assets to total loans and foreclosed and other assets

Nonperforming assets to total assets

Net charge-offs to average loans (for the three months ended) (annualized)

Allowance for loan and lease losses to total loans

Allowance for loan and lease losses to nonperforming loans

Earnings (Loss)

Retail Banking

Corporate & Institutional Banking

Asset Management Group

Residential Mortgage Banking

Global Investment Servicing

Distressed Assets Portfolio

Other, including BlackRock (b) (d) (e) (f)

Total consolidated net income (loss)

Revenue

Retail Banking

Corporate & Institutional Banking

Asset Management Group

Residential Mortgage Banking

Global Investment Servicing (g)

Distressed Assets Portfolio

Other, including BlackRock (b) (d) (e)

Total consolidated revenue