Strong results for the first quarter reflected pretax earnings from continuing operations of $1.1 billion, comparable to the fourth quarter of 2010.

Net interest income for the first quarter was $2.2 billion and the net interest margin was 3.94 percent, both remaining relatively stable with the fourth quarter of 2010.

Noninterest income of $1.5 billion for the first quarter declined $.2 billion from the linked quarter primarily due to a $160 million gain on the sale of a portion of PNC’s BlackRock shares in the fourth quarter.

The provision for credit losses of $.4 billion in the first quarter was relatively consistent with the fourth quarter as overall credit quality improved.

Noninterest expense decreased $270 million to $2.1 billion compared with the fourth quarter primarily reflecting the company’s disciplined expense management and elevated fourth quarter expense levels.

Improvement in overall credit quality continued in the first quarter of 2011. Nonperforming assets decreased $43 million to $5.3 billion at March 31, 2011 compared with year end and declined $1.3 billion from March 31, 2010. Accruing loans past due of $1.9 billion were relatively unchanged from year end and significantly decreased from $3.3 billion at March 31, 2010. The allowance for loan and lease losses was $4.8 billion, or 3.19 percent of total loans and 108 percent of nonperforming loans, as of March 31, 2011.

Total loans were $149 billion at March 31, 2011 and $151 billion at December 31, 2010. Growth in commercial loans of $1.4 billion during the quarter was offset by declines in commercial real estate loans of $.8 billion and residential mortgage loans of $.7 billion. Loans and commitments originated and renewed totaled approximately $27 billion in the first quarter, including $.9 billion of small business loans.

Total deposits were $182 billion at March 31, 2011 and $183 billion at December 31, 2010. Transaction deposits of $135 billion were essentially stable with year end and grew $8.1 billion from March 31, 2010. Higher cost retail certificates of deposit continued to decline with a reduction of $1.5 billion, or 4 percent, in the first quarter.

PNC’s high quality balance sheet was core funded with a loan to deposit ratio of 82 percent at March 31, 2011 and a strong bank liquidity position to support growth.

PNC’s strong capital levels were reflected in its Tier 1 common capital ratio which increased to an estimated 10.3 percent at March 31, 2011 from 9.8 percent at December 31, 2010.

The PNC board of directors raised the quarterly cash dividend on common stock payable on May 5, 2011 to 35 cents per share, an increase of 25 cents per share, or 250 percent. The board of directors also confirmed that PNC may begin to purchase common stock under its existing 25 million share repurchase program in open market or privately negotiated transactions. PNC plans to repurchase up to $500 million of common stock during the remainder of 2011.

PNC reached a definitive agreement in January 2011 to acquire 19 branches and approximately $350 million of deposits from BankAtlantic Bancorp, Inc. located in the Tampa, Florida area. The transaction is expected to close in June 2011, subject to customary closing conditions.

Checking relationships grew by 56,000 during the first quarter of 2011. In addition, active online banking and active online bill payment customers grew by 6 percent and 5 percent, respectively, in the first quarter of 2011.

Success in implementing Retail Banking’s deposit strategy resulted in growth in average transaction deposits of $1.2 billion, or 2 percent, compared with the fourth quarter and $3.7 billion, or 5 percent, compared with the prior year first quarter. Transaction deposit growth was more than offset by planned run off of higher rate certificates of deposit net of successful retention of customer relationships. A continued decline in certificates of deposit is expected throughout 2011.

Customer loan demand has shown signs of improvement. Average loans were essentially stable with the fourth quarter of 2010 and decreased $.9 billion, or 2 percent, compared with the year ago quarter. The decrease from first quarter 2010 was primarily due to lower home equity loans, commercial loans and residential mortgages partially offset by higher education and indirect auto loans.

Net interest income for the first quarter of 2011 decreased $8 million, or 1 percent, compared with the linked quarter and $51 million, or 6 percent, compared with the first quarter of 2010. The declines were primarily driven by lower interest credits assigned to deposits.

Noninterest income decreased $23 million, or 5 percent, compared with the fourth quarter and $61 million, or 12 percent, from the first quarter of 2010. The linked quarter decline reflected primarily seasonal decreases in transaction-related fees, such as merchant services, debit cards and credit cards. In the year-over-year quarter comparison, noninterest income declined due to lower overdraft fees resulting from Regulation E rules.

Noninterest expense for the first quarter decreased $47 million, or 4 percent, from the fourth quarter and increased $26 million, or 3 percent, over the first quarter of 2010. The decrease from the linked quarter was due to seasonally lower expenses including compensation and volume-related expense associated with lower fee income and the timing of marketing expense. In the year-over-year quarter comparison, increased expense was driven by investments in the business.

Provision for credit losses was $276 million for the first quarter of 2011 compared with $157 million in the fourth quarter and $339 million in the first quarter of 2010. Net charge-offs were $257 million for the first quarter of 2011 compared with $225 million in the fourth quarter and $300 million in the first quarter of 2010. The increase in the provision compared with the fourth quarter was primarily due to trends reflecting an increase in bankruptcies within the home equity portfolio, continued loan modifications, many of which resulted in troubled debt restructurings, and a longer foreclosure timeline. Credit quality improved in the credit card and small business portfolios.

PNC’s expansive branch footprint covers nearly one-third of the U.S. population in 14 states with a network of 2,446 branches and 6,660 ATMs at March 31, 2011. During the first quarter of 2011, PNC opened 6 traditional branches, consolidated 30 branches and had a net decrease of 13 ATMs.

For 2011, Retail Banking revenue will decline compared with 2010 from the impact of the rules set forth in Regulation E related to overdraft fees and is expected to be negatively impacted by the potential limits related to interchange rates on debit card transactions proposed in the Dodd-Frank legislation. The incremental negative impact of these two aspects of regulatory reform on fees is estimated to be approximately $400 million in 2011 compared with 2010 if limits to interchange rates are implemented consistent with rules currently proposed by the Federal Reserve Board. Changes in the proposed interchange rules could impact this estimate. Further, estimates do not include any additional financial impact of other or additional regulatory requirements.

Net interest income for the first quarter of 2011 of $799 million decreased $118 million compared with the fourth quarter of 2010 and $91 million compared with the first quarter of 2010. The decrease from the linked quarter was primarily due to lower purchase accounting accretion. The decline in the prior year first quarter comparison was mainly a result of lower purchase accounting accretion, lower interest credits assigned to deposits and a decrease in average loan balances partially offset by improved loan spreads and an increase in average deposits.

Corporate service fees were $187 million in the first quarter of 2011 compared with $334 million in the fourth quarter of 2010 and $242 million in the first quarter of 2010. The linked quarter comparison reflected a decrease in the value of commercial mortgage servicing rights due to changes in interest rates and prepayments compared with an increase in value in the fourth quarter of 2010. Lower merger and acquisition advisory fees also impacted the comparison. The decline from the first quarter of 2010 was primarily due to a reduction in the value of commercial mortgage servicing rights largely driven by lower interest rates, lower debt underwriting revenue and lower ancillary commercial mortgage servicing fees.

Noninterest expense of $445 million in the first quarter of 2011 declined $61 million compared with the fourth quarter of 2010 and was essentially flat compared with the first quarter of 2010. The decrease from the linked quarter reflected lower compensation-related costs.

Provision for credit losses was a benefit of $30 million in the first quarter of 2011 compared with provisions of $18 million in the fourth quarter of 2010 and $236 million in the first quarter of 2010. The year-over-year first quarter comparison reflected overall improvement in portfolio credit quality along with lower loan and commitment levels. Net charge-offs for the first quarter of 2011 decreased to $153 million compared with $349 million in fourth quarter 2010 and $271 million in the first quarter of 2010. Net charge-offs declined across all portfolios in the linked quarter comparison, particularly in the equipment lease financing and commercial real estate portfolios, which also drove the year-over-year decline. Nonperforming assets declined for the fourth consecutive quarter.

Average loans were $64 billion for the first quarter of 2011 compared with $63 billion in the fourth quarter of 2010 and $66 billion in the first quarter of 2010. The increase in the linked quarter comparison, primarily in commercial loans, was due to a modest increase in utilization and new business activity. The year-over-year first quarter decline was largely related to exits of certain client relationships combined with lower credit utilization rates in 2011.

Average deposits were $46 billion in both the first quarter of 2011 and the fourth quarter of 2010 and increased $3.9 billion, or 9 percent, from the prior year first quarter. Deposit inflows continued as customers moved balances into noninterest-bearing demand deposits to maintain liquidity.

The commercial mortgage servicing portfolio was $266 billion at both March 31, 2011 and December 31, 2010 and $282 billion at March 31, 2010. The decrease from a year ago was the result of run off exceeding additions due to limited market opportunities to purchase servicing rights as well as the sale of an acquired agency servicing operation, a noncore business, in the second quarter of 2010.

Overall results benefited from successful sales efforts to new customers and product penetration of the existing customer base. The business achieved record client growth in 2010 and continued this momentum into 2011. Sales of treasury management and capital markets products to customers in PNC’s western markets have been successful following the systems conversions. Sales in the first quarter of 2011 were ahead of both target and first quarter 2010.

Assets under administration were $219 billion at March 31, 2011 compared with $212 billion at December 31, 2010 and $209 billion at March 31, 2010. Discretionary assets under management were $110 billion at March 31, 2011 compared with $108 billion at December 31, 2010 and $105 billion at March 31, 2010. The increase in the comparisons was driven by higher equity markets, successful client retention and strong sales performance.

Noninterest income of $162 million for the quarter increased $3 million, or 2 percent, compared with the linked quarter due to higher asset values from stronger equity markets and new sales. The noninterest income decline of $2 million, or 1 percent, in the prior year first quarter comparison was primarily due to the exit of acquisition-related noncore products.

Net interest income was $60 million for the first quarter of 2011 compared with $65 million in the fourth quarter of 2010 and $63 million in the first quarter of 2010. The decreases were attributable to lower loan yields and lower interest credits assigned to deposits reflective of the current low rate environment.

Noninterest expense of $160 million in the first quarter of 2011 decreased $11 million, or 6 percent, compared with the fourth quarter and increased $4 million, or 3 percent, from the year ago first quarter. The decrease from the linked quarter was mainly due to higher compensation-related costs in the fourth quarter. The increase from first quarter 2010 was attributable to investments in the business to drive growth.

Provision for credit losses was a benefit of $6 million in the first quarter of 2011 reflecting improved credit quality compared with provisions of $9 million for both the fourth quarter and first quarter of 2010. A net recovery of $11 million was recognized for the first quarter compared with net charge-offs of $21 million in the linked quarter and $4 million in the first quarter of 2010.

Average deposits for the quarter of $ 7.7 billion increased $175 million, or 2 percent, compared with the fourth quarter and $765 million, or 11 percent, over the prior year first quarter. Average transaction deposits grew 3 percent over the linked quarter and 15 percent compared with first quarter 2010 and were substantially offset by the strategic run off of higher rate certificates of deposit in the prior year comparison. Average loan balances of $6.3 billion increased $40 million, or 1 percent, compared with the linked quarter and decreased $126 million, or 2 percent, from the prior year first quarter primarily due to soft loan demand in the current economy.

Total loan originations were $3.2 billion for the first quarter of 2011 compared with $3.5 billion in the fourth quarter of 2010 and $2.0 billion in the first quarter of 2010. Refinance application volume declined slightly from the linked quarter, but was up compared to first quarter 2010. Loans continue to be originated primarily through direct channels under FNMA, FHLMC and FHA/VA agency guidelines.

Residential mortgage loans serviced for others totaled $127 billion at March 31, 2011 compared with $125 billion at December 31, 2010 and $141 billion at March 31, 2010. Although payoffs continued to outpace production, the increase at March 31, 2011 compared with year end was due to the acquisition of servicing rights related to $4.6 billion of residential loans on March 31, 2011.

Noninterest income was $202 million in the first quarter of 2011 compared with $168 million in the fourth quarter of 2010 and $154 million in the first quarter of 2010. The linked quarter increase reflected higher loan sales revenue and higher net hedging gains on mortgage servicing rights. The year-over-year first quarter increase resulted from higher loan sales revenue driven by higher loan origination volume and higher net hedging gains on mortgage servicing rights.

Net interest income was $56 million in the first quarter of 2011 compared with $60 million in the fourth quarter of 2010 and $74 million in the first quarter of 2010. The decrease in both comparisons was primarily due to lower interest earned on escrow deposits.

The provision for credit losses was $8 million in both the first quarter of 2011 and fourth quarter of 2010 and was a benefit of $16 million in the first quarter of 2010.

Noninterest expense was $137 million in the first quarter of 2011 compared with $215 million in the fourth quarter of 2010 and $120 million in the first quarter of 2010. The decrease compared with the linked quarter was primarily due to lower foreclosure-related expenses. The increase from the prior year first quarter was driven by higher loan origination volume and higher foreclosure-related expenses.

The fair value of mortgage servicing rights was $1.1 billion at March 31, 2011 compared with $1.0 billion at December 31, 2010 and $1.3 billion at March 31, 2010. The increase in fair value from year end was primarily attributable to the mortgage servicing acquisition of $4.6 billion on March 31, 2011. The decline in fair value from first quarter 2010 was due to lower mortgage rates, higher servicing costs and a smaller mortgage servicing portfolio.

Average loans were $14 billion for the first quarter of 2011 compared with $15 billion in the fourth quarter of 2010 and $18 billion in the first quarter of 2010. The decreases were due to portfolio management activities including loan sales, paydowns and net charge-offs.

Net interest income was $236 million for the first quarter of 2011 compared with $256 million for the fourth quarter of 2010 and $342 million for the first quarter of 2010. The decline in both comparisons reflected lower purchase accounting accretion and a decline in average loan balances.

Noninterest income was $9 million in the first quarter of 2011 compared with a loss of $56 million in the fourth quarter of 2010 and a loss of $12 million in the first quarter of 2010. Increases in reserves for brokered home equity loan indemnification and repurchase obligations were recorded in both quarters of 2010.

Noninterest expense for the first quarter of 2011 was $53 million compared with $81 million in the fourth quarter of 2010 and $48 million in the first quarter of 2010. The decrease in the linked quarter comparison reflected expenditures in the fourth quarter in connection with external servicing activity. The increase from the prior year first quarter was driven by other real estate owned-related losses and expenses.

The provision for credit losses was $152 million in the first quarter of 2011 compared with $231 million in the fourth quarter of 2010 and $165 million in first quarter of 2010. The decrease from the fourth quarter was primarily due to declining losses in the residential mortgage portfolios. The decrease from the prior year first quarter was driven by improved credit performance within the mortgage and construction loan portfolios.

Net charge-offs were $123 million for the first quarter of 2011 compared with $183 million for the fourth quarter of 2010 and $111 million for the first quarter of 2010. The decrease in the linked quarter comparison was primarily due to lower net charge-offs on non-prime mortgages. The year over year quarter comparison reflected increases for the brokered home equity portfolio.

Loans in this segment require special servicing and management oversight given current loan performance and market conditions. Accordingly, the business activities of this segment are focused on maximizing value within a defined risk profile. This includes selling assets when the terms and conditions are appropriate to reduce future credit and servicing costs.

FINANCIAL RESULTS

Dollars in millions, except per share data

Revenue

Net interest income

Noninterest income (a)

Total revenue

Noninterest expense

Pretax, pre-provision earnings from continuing operations (b)

Provision for credit losses

Income from continuing operations before income taxes and noncontrolling interests (pretax earnings)

Income from continuing operations before noncontrolling interests (c)

Income from discontinued operations, net of income taxes (d)

Net income

Less:

Net income (loss) attributable to noncontrolling interests

Preferred stock dividends, including TARP (e)

Preferred stock discount accretion and redemptions, including redemption of TARP preferred stock discount accretion (e)

Net income attributable to common shareholders (e)

Diluted earnings per common share

Continuing operations

Discontinued operations (d)

Net income

Cash dividends declared per common share (f)

PERFORMANCE RATIOS

Net interest margin (a)

Provision-adjusted net interest margin (b)

Noninterest income to total revenue (c)

Efficiency (d)

Return on:

Average common shareholders’ equity

Average assets

BUSINESS SEGMENT INCOME (LOSS) (e) (f)

In millions

Retail Banking

Corporate & Institutional Banking

Asset Management Group

Residential Mortgage Banking

Distressed Assets Portfolio

Other, including BlackRock (f) (g) (h)

Income from continuing operations before noncontrolling interests

Net interest margin, as reported

Less: provision adjustment

Provision-adjusted net interest margin

BALANCE SHEET DATA

Dollars in millions, except per share data

Assets

Loans (a) (b)

Allowance for loan and lease losses (a)

Interest-earning deposits with banks (a)

Investment securities (a)

Loans held for sale (b)

Goodwill and other intangible assets

Equity investments (a)

Noninterest-bearing deposits

Interest-bearing deposits

Total deposits

Transaction deposits

Borrowed funds (a)

Shareholders’ equity

Common shareholders’ equity

Accumulated other comprehensive income (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

CAPITAL RATIOS

Tier 1 common (c)

Tier 1 risk-based (c)

Total risk-based (c)

Leverage (c)

Common shareholders’ equity to assets

ASSET QUALITY RATIOS

Nonperforming loans to total loans

Nonperforming assets to total loans, OREO and foreclosed 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 (d)

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.

A slowing or failure of the moderate economic recovery that began in mid-2009 and continued throughout 2010 and into 2011.

Continued effects of the aftermath of recessionary conditions and the uneven spread of the positive impacts of the recovery on the economy in general and our customers in particular, including adverse impact on loan utilization rates as well as delinquencies, defaults and customer ability to meet credit obligations.

Changes in levels of unemployment.

Changes in customer preferences and behavior, whether as a result of changing business and economic conditions, climate-related physical changes or legislative and regulatory initiatives, or other factors.

Turbulence in significant portions of the US and global financial markets 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.

We will be impacted by the extensive reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and ongoing reforms impacting the financial institutions industry generally. Further, as much of the Dodd-Frank Act will require the adoption of implementing regulations by a number of different regulatory bodies, the precise nature, extent and timing of many of these reforms and the impact on us is still uncertain.

Financial industry restructuring in the current environment could also impact our business and financial performance as a result of changes in the creditworthiness and performance of our counterparties and by changes in the competitive and regulatory landscape.

Our results depend on our ability to manage current elevated levels of impaired assets.

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 view that the moderate economic recovery that began in mid-2009 and continued throughout 2010 will transition into a self-sustaining economic expansion in 2011 pushing the unemployment rate lower amidst continued low interest rates.

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.

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

Unfavorable resolution of legal proceedings or other claims and regulatory and other governmental investigations or other inquiries. In addition to matters relating to PNC’s business and activities, such matters may also include proceedings, claims, investigations, or inquiries relating to pre-acquisition business and activities of acquired companies, such as National City. These matters may result in monetary judgments or settlements or other remedies, including fines, penalties, restitution or alterations in our business practices and in additional expenses and collateral costs.

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.

Changes resulting from legislative and regulatory initiatives relating to climate change that have or may have a negative impact on our customers’ demand for or use of our products and services in general and their creditworthiness in particular.

Changes to regulations governing bank capital, including as a result of the Dodd-Frank Act and of the Basel III initiatives.

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 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.