Strong third quarter results reflected growth in customers, loans and deposits with improving overall credit quality and disciplined expense management.

Net interest income of $2.2 billion for the third quarter increased $25 million compared with second quarter 2011.

Noninterest income of $1.4 billion for the third quarter declined $83 million from the second quarter primarily due to lower asset valuations. Commercial mortgage servicing rights values were reduced $105 million in the third quarter of 2011.

The provision for credit losses declined to $261 million for the third quarter compared with $280 million in the second quarter from improving credit quality.

Noninterest expense of $2.1 billion declined $36 million compared with the second quarter reflecting PNC’s continuous improvement process.

Overall credit quality continued to improve in the third quarter of 2011.

Nonperforming assets declined $183 million, or 4 percent, to $4.3 billion at September 30, 2011 compared with the second quarter.

Accruing loans past due were $4.3 billion at September 30, 2011 and $4.1 billion at June 30, 2011. The increase was primarily due to government insured loans.

Net charge-offs declined to $365 million in the third quarter compared with $414 million in the second quarter.

The allowance for loan and lease losses was 122 percent of nonperforming loans as of September 30, 2011 and 120 percent at June 30, 2011.

PNC grew clients throughout its businesses during the third quarter.

Retail banking checking relationships grew organically by 95,000 during the third quarter of 2011 and 74,000 in the second quarter. For year to date 2011, checking relationships grew organically by 225,000, or 3.5 times the growth in the same period of 2010.

New client acquisitions in corporate banking are on pace to exceed the 1,000 new primary client goal for 2011 and increased 10 percent over the third quarter of 2010.

Asset management group delivered its highest levels of the year in new sales, new primary clients and referrals from PNC’s retail, corporate and commercial bankers during the third quarter.

Total loans of $155 billion at September 30, 2011 grew $4.2 billion compared with June 30, 2011.

Commercial lending grew $3.7 billion and consumer lending increased $.5 billion.

Loans and commitments originated and renewed totaled approximately $39 billion in the third quarter, including $1 billion of small business loans.

Total deposits grew $5.8 billion during the third quarter to $188 billion at September 30, 2011 compared with $182 billion at June 30, 2011.

Transaction deposits increased $5.9 billion to $143 billion compared with the second quarter and $14.8 billion from September 30, 2010.

Higher cost retail certificates of deposit continued to decline with a net reduction of $2.0 billion, or 6 percent, in the third quarter.

PNC’s high quality balance sheet reflected a moderate risk profile, remained core funded with a loans to deposits ratio of 82 percent at September 30, 2011, and had strong capital and liquidity positions to support growth.

In June 2011 PNC announced that it had signed a definitive agreement to acquire RBC Bank (USA), the U.S. retail banking subsidiary of Royal Bank of Canada with 424 branches in North Carolina, Florida, Alabama, Georgia, Virginia and South Carolina. The transaction is expected to add approximately $19 billion of deposits and $16 billion of loans and to close in March 2012, subject to customary closing conditions, including regulatory approvals.

In July 2011 PNC announced that it had signed a definitive agreement to acquire 27 branches in metropolitan Atlanta, Georgia from Flagstar Bank, FSB, a subsidiary of Flagstar Bancorp, Inc., and assume approximately $240 million of deposits. The transaction is expected to close in December 2011, subject to customary closing conditions, including regulatory approvals.

Checking relationships grew organically by 95,000 during the third quarter of 2011 and 74,000 in the second quarter. For the first nine months of 2011, checking relationships grew organically by 225,000, or 3.5 times the growth in the same period of 2010. Active online banking and active online bill payment customers grew organically by 13 percent and 10 percent, respectively, since the beginning of 2011.

Average deposits declined $.8 billion during the third quarter compared with the second quarter due to a $1.4 billion decline in certificates of deposit partially offset by an increase of $.6 billion in transaction deposits. Success in implementing Retail Banking’s deposit strategy resulted in growth in average demand deposits of $3.6 billion, or 10 percent, compared with the prior year third quarter. Average certificates of deposit declined $7.7 billion, or 19 percent, compared with third quarter 2010. A continued decline in certificates of deposit is expected in fourth quarter 2011.

Average loans grew $.3 billion, or .5 percent, over second quarter 2011 and declined $.5 billion, or .8 percent, compared with the third quarter of 2010. In the linked quarter comparison, growth in indirect auto, education and credit card loans was partially offset by lower floor plan, commercial and home equity loans. The decrease from the prior year quarter resulted from declines in commercial and home equity loans somewhat offset by an increase in indirect auto.

Net interest income for the third quarter of 2011 increased $10 million, or 1 percent, compared with the second quarter and decreased $41 million, or 5 percent, compared with the third quarter of 2010. The increase in the linked quarter was primarily due to higher interest income on loans largely offset by lower interest credits assigned to deposits. The decline from third quarter 2010 was mainly driven by lower average loan balances and lower interest credits assigned to deposits in the continued low interest rate environment.

Noninterest income for the third quarter was consistent with the second quarter and decreased $36 million, or 7 percent, from the third quarter of 2010. The decline was due to lower overdraft fees resulting from the impact of Regulation E rules partially offset by higher transaction-related fees.

Noninterest expense for the third quarter was consistent with the second quarter and decreased $14 million, or 1 percent, compared with third quarter 2010. The decrease was primarily attributable to lower FDIC expense resulting from a change in FDIC methodology.

Net charge-offs declined to $182 million for the third quarter compared with $223 million in the second quarter and $247 million in the third quarter of 2010 as overall credit quality improved. Provision for credit losses was $206 million for the third quarter of 2011 compared with $180 million in the second quarter and $327 million in the third quarter of 2010. The increase in the provision linked quarter was mainly due to a modest increase in home equity portfolio delinquencies during the third quarter. The decrease compared with third quarter 2010 primarily resulted from improved credit quality within several loan portfolios.

PNC’s expansive branch footprint covers nearly one-third of the U.S. population in 15 states and Washington, D.C. with a network of 2,469 branches and 6,754 ATMs at September 30, 2011.

For 2011 Retail Banking revenue is expected to incrementally decline by approximately $275 million compared with 2010 from the impact of the rules set forth in Regulation E related to overdraft fees and the Dodd–Frank limits related to interchange rates on debit card transactions.

Regulation E, which became effective in the third quarter of 2010, had an incremental negative impact to 2011 revenues of approximately $200 million compared with 2010.

The Dodd–Frank limits related to interchange rates on debit cards were effective October 1, 2011 and are expected to have a negative incremental impact of approximately $75 million in the fourth quarter of 2011 and an additional incremental reduction in future periods’ annual revenue of approximately $175 million based on expected 2011 transaction volumes and will impact year-over-year quarterly comparisons through the third quarter of 2012.

Overall results benefited from successful sales efforts to new clients and product penetration of the existing customer base. New client acquisitions in corporate banking are on pace to exceed the 1,000 new primary client goal for the year and increased 10 percent over the third quarter of 2010.

Net interest income for the third quarter of 2011 of $866 million increased $18 million compared with the second quarter and $20 million compared with the third quarter of 2010. The increases were primarily due to higher average loans along with higher deposit levels which more than offset lower interest credits assigned to deposits.

Corporate service fees of $153 million for the third quarter of 2011 declined $44 million compared with the second quarter and increased $5 million compared with third quarter 2010. The linked quarter decline was impacted by reduced values of commercial mortgage servicing rights resulting from changes in interest rates and prepayments as reflected in higher impairment and amortization costs.

Other noninterest income of $101 million in the third quarter declined $34 million compared with the second quarter of 2011 and increased $12 million compared with the third quarter of 2010. The linked quarter decline was due to a high capital markets activity level in the second quarter and lower valuations on client derivatives. The increase over third quarter 2010 was due to higher valuations on client derivatives.

Noninterest expense of $448 million in the third quarter of 2011 was relatively consistent, increasing $5 million compared with the second quarter and $1 million from third quarter 2010.

Net charge-offs for the third quarter of 2011 were $94 million compared with $85 million in second quarter 2011 and $211 million in the third quarter of 2010. Net charge-offs increased in middle-market and specialty lending portfolios in the comparison with second quarter. The decrease in the year-over-year quarter comparison reflected declines across loan portfolios other than business credit and equipment lease financing. Nonperforming assets declined for the sixth consecutive quarter.

Provision for credit losses was $11 million for the third quarter of 2011 compared with $31 million in the second quarter and a benefit of $48 million in the third quarter of 2010. The linked quarter decline was due to overall improvement in portfolio credit quality. The increase from third quarter 2010 reflected higher loan and commitment levels.

Average loans were $68 billion for the third quarter of 2011 compared with $65 billion in the second quarter of 2011 and $63 billion in the third quarter of 2010. Loan growth in both comparisons was primarily in commercial loans and asset-based lending due to new client activity and higher utilization.

Average deposits of $52 billion in the third quarter of 2011 increased $5 billion, or 10 percent, from the second quarter and $8 billion, or 18 percent, from third quarter 2010. Deposit inflows into noninterest-bearing demand deposits continued as FDIC insurance has been an attraction for customers maintaining liquidity during this prolonged period of low interest rates.

The commercial mortgage servicing portfolio was $267 billion at September 30, 2011, $268 billion at June 30, 2011 and $263 billion at September 30, 2010. The increase over the prior year was largely the result of purchased servicing net of portfolio run-off.

Assets under administration were $202 billion at September 30, 2011 compared with $219 billion at June 30, 2011 and $206 billion at September 30, 2010. Discretionary assets under management were $103 billion at September 30, 2011 compared with $109 billion at June 30, 2011 and $105 billion at September 30, 2010. The discretionary asset declines in both comparisons were due to the weaker equity markets partially offset by strong sales performance and client retention.

Noninterest income of $159 million for the third quarter decreased $8 million, or 5 percent, compared with the linked quarter due to lower asset values from weaker equity markets. Noninterest income increased $9 million, or 6 percent, compared with third quarter 2010 from new client acquisition partially offset by the weaker equity markets.

Net interest income was $58 million for the third quarter of 2011 compared with $59 million in the second quarter and $66 million in the third quarter of 2010. The decreases were due to lower loan yields and lower interest credits assigned to deposits reflective of the current low rate environment and, in the comparison with third quarter 2010, reduced average loan balances.

Noninterest expense of $175 million in the third quarter of 2011 increased $7 million, or 4 percent, compared with the second quarter 2011 and $15 million, or 9 percent, compared with the third quarter of 2010 largely attributable to investments in the business to drive growth.

Credit quality indicators and net charge-offs remained stable during the third quarter. Provision for credit losses was a benefit of $10 million in the third quarter of 2011 compared with benefits of $18 million in the second quarter 2010 and $12 million in the third quarter of 2010.

Average deposits for the quarter of $7.8 billion increased $270 million, or 4 percent, compared with the second quarter and $628 million, or 9 percent, in the comparison with third quarter 2010 as growth in transaction deposits continued to exceed the strategic run-off of higher rate certificates of deposit. Average loan balances of $6.1 billion were consistent with the linked quarter and declined $207 million, or 3 percent, from the prior year third quarter. Planned exits and soft loan demand in the current economy continued to limit loan portfolio growth.

Total loan originations were $2.6 billion for both the third and second quarters of 2011 and $2.7 billion in the third quarter of 2010. Loans continued to be originated primarily through direct channels under FNMA, FHLMC and FHA/VA agency guidelines.

Residential mortgage loans serviced for others totaled $121 billion at September 30, 2011 compared with $125 billion at June 30, 2011 and $131 billion at September 30, 2010. Payoffs continued to outpace new loan production.

Noninterest income was $206 million in the third quarter of 2011 compared with $172 million in the second quarter of 2011 and $232 million in the third quarter of 2010. The linked quarter increase reflected higher loan sales revenue and higher net hedging gains on mortgage servicing rights. The decrease from third quarter 2010 resulted from lower net hedging gains on mortgage servicing rights.

Net interest income was $46 million in the third quarter of 2011 compared with $47 million in the second quarter of 2011 and $52 million in the third quarter of 2010. The decrease compared with the second quarter reflected a slightly lower balance of loans held for sale. The decline compared with third quarter 2010 was primarily due to lower interest earned on escrow deposits.

The provision for credit losses was $15 million in the third quarter compared with a benefit of $8 million in the second quarter of 2011 and a provision of $21 million in the third quarter of 2010.

Noninterest expense was $203 million in the third quarter of 2011 compared with $140 million in the second quarter and $119 million in the third quarter of 2010. The increase in both comparisons was driven by an increase in foreclosure-related expenses.

The fair value of mortgage servicing rights was $.7 billion at September 30, 2011 compared with $1.0 billion at June 30, 2011 and $.8 billion at September 30, 2010. The decline in fair value from the second quarter was primarily due to lower mortgage rates.

Average loans were $13 billion for the third quarter of 2011, a decline of $.5 billion from the second quarter of 2011 and $3 billion from the third quarter of 2010. The decreases were due to portfolio management activities including paydowns, loan sales and charge-offs.

Net interest income was $228 million for the third quarter compared with $257 million for the second quarter of 2011 and $283 million for the third quarter of 2010. The decrease in both comparisons was due to lower average loans and lower purchase accounting accretion.

Noninterest income was $10 million in the third quarter of 2011 compared with $13 million in the second quarter and a loss of $35 million in the third quarter of 2010, which included higher recourse reserves for potential repurchases of brokered home equity loans.

Noninterest expense for the third quarter was $47 million compared with $56 million in the second quarter of 2011 and $46 million in the third quarter of 2010. The linked quarter decline was driven by lower other real estate owned costs.

Net charge-offs were $74 million for the third quarter of 2011 compared with $96 million for the second quarter and $107 million for the third quarter of 2010. The decrease in the second quarter comparison was primarily due to lower net charge-offs on the non-prime mortgage portfolio. The decline from the prior year third quarter was largely attributable to a decrease in commercial net charge-offs.

The provision for credit losses was $45 million in the third quarter of 2011 compared with $81 million in the second quarter and $176 million in third quarter of 2010. Credit quality improvements across portfolios benefited both comparisons.

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.

Revenue

Net interest income

Noninterest income

Total revenue

Noninterest expense

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

Provision for credit losses

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

Income from continuing operations before noncontrolling interests (b)

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

Net income

Less:

Net income (loss) attributable to noncontrolling interests

Preferred stock dividends, including TARP (d)

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

Net income attributable to common shareholders (d)

Diluted earnings per common share

Continuing operations

Discontinued operations (c)

Net income

Cash dividends declared per common share

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 (g)

Asset Management Group

Residential Mortgage Banking

Distressed Assets Portfolio

Other, including BlackRock (f) (h)

Income from continuing operations before noncontrolling interests

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) (c)

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

CLIENT ASSETS (billions)

Discretionary assets under management

Nondiscretionary assets under administration

Total assets under administration

Brokerage account assets

Total client assets

CAPITAL RATIOS

Tier 1 common (d)

Tier 1 risk-based (d)

Total risk-based (d)

Leverage (d)

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 (e)

Our businesses, financial results and balance sheet values are affected by business and economic conditions, including the following:

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

Disruptions in the liquidity and other functioning of U.S. and global financial markets.

The impact on financial markets and the economy of the downgrade by Standard & Poor’s of U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the level of U.S. and European government debt and concerns regarding the creditworthiness of certain sovereign governments in Europe.

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

Changes in customers’, suppliers’ and other counterparties’ performance and creditworthiness.

Slowing or failure of the current moderate economic recovery.

Continued effects of aftermath of recessionary conditions and uneven spread of positive impacts of recovery on the economy and our counterparties, including adverse impacts on levels of unemployment, loan utilization rates, delinquencies, defaults and counterparty ability to meet credit and other obligations.

Changes in customer preferences and behavior, whether due to changing business and economic conditions, legislative and regulatory initiatives, or other factors.

Our forward-looking financial statements are subject to the risk that economic and financial market conditions will be substantially different than we are currently expecting. These statements are based on our current view that the modest economic expansion will persist in the year ahead and interest rates will remain very low.

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

Changes resulting from legislative and regulatory reforms, including broad-based restructuring of financial industry regulation and changes to laws and regulations involving tax, pension, bankruptcy, consumer protection, and other industry aspects, and changes in accounting policies and principles. We will be impacted by extensive reforms provided for in the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and otherwise growing out of the recent financial crisis, the precise nature, extent and timing of which, and their impact on us, remains uncertain.

Changes to regulations governing bank capital and liquidity standards, including due to the Dodd-Frank Act and to Basel III initiatives.

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 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, and may cause reputational harm to PNC.

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

Impact on business and operating results of any costs associated with obtaining rights in intellectual property claimed by others and of adequacy of our intellectual property protection in general.

Business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where appropriate, through effective use of third-party insurance, derivatives, and capital management techniques, and to meet evolving regulatory capital standards. In particular, our results currently depend on our ability to manage elevated levels of impaired assets.

Business and operating results also include impacts relating to our equity interest in BlackRock, Inc. and rely to a significant extent on information provided to us by BlackRock. Risks and uncertainties that could affect BlackRock are discussed in more detail by BlackRock in SEC filings.

Our planned acquisition of RBC Bank (USA) presents us with risks and uncertainties related both to the acquisition transaction itself and its integration into PNC after closing, including:

Closing is dependent on, among other things, receipt of regulatory and other applicable approvals, the timing of which cannot be predicted with precision at this point and which may not be received at all. The impact of closing on PNC’s financial statements will be affected by the timing of the transaction.

The transaction (including integration of RBC Bank (USA)’s businesses) may be substantially more expensive to complete than anticipated. Anticipated benefits, including 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 also on the following factors, in part related to the state of economic and financial markets: the extent of credit losses in the acquired loan portfolios and the extent of deposit attrition. Also, litigation and governmental investigations that may be filed or commenced, as a result of this transaction or otherwise, could impact the timing or realization of anticipated benefits to PNC.

Integration of RBC Bank (USA)’s business and operations into PNC, which will include conversion of RBC Bank (USA)’s different systems and procedures, may take longer than anticipated or be more costly than anticipated or have unanticipated adverse results relating to RBC Bank (USA)’s or PNC’s existing businesses. PNC’s ability to integrate RBC Bank (USA) successfully may be adversely affected by the fact that this transaction will result in PNC entering several markets where PNC does not currently have any meaningful retail presence.

In addition to the planned RBC Bank (USA) transaction, we grow our business in part by acquiring from time to time other financial services companies, financial services assets and related deposits. These other acquisitions, including our planned acquisition of branches and related deposits in metropolitan Atlanta, Georgia from Flagstar Bank, FSB, often present risks and uncertainties analogous to those presented by the RBC Bank (USA) transaction, as well as, in some cases, with risks related to entering into new lines of business.

Competition can have an impact on customer acquisition, growth and retention and on credit spreads and product pricing, which can affect market share, deposits and revenues. Industry restructuring in the current environment could also impact our business and financial performance through changes in counterparty creditworthiness and performance and in competitive and regulatory landscape. Our ability to anticipate and respond to technological changes can also impact our ability to respond to customer needs and meet competitive demands.

Business and operating results can also be affected by widespread disasters, dislocations, terrorist activities or international hostilities through impacts on the economy and financial markets generally or on us or our counterparties specifically.