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PNC Reports Full Year 2012 Net Income of $3.0 Billion and $5.30 Diluted EPS

 PNC Reports Full Year 2012 Net Income of $3.0 Billion and $5.30 Diluted EPS

Earns Fourth Quarter Net Income of $719 Million and $1.24 Diluted EPS

Customers, Loans and Revenue Increase Over 2011

PR Newswire

PITTSBURGH, Jan. 17, 2013

PITTSBURGH, Jan. 17, 2013 /PRNewswire/ -- The PNC Financial Services Group,
Inc. (NYSE: PNC) today reported 2012 net income of $3.0 billion, or $5.30 per
diluted common share, compared with 2011 net income of $3.1 billion, or $5.64
per diluted common share. Fourth quarter 2012 net income was $719 million, or
$1.24 per diluted common share, compared with $925 million, or $1.64 per
diluted common share, for the third quarter of 2012 and $493 million, or $.85
per diluted common share, for the fourth quarter of 2011. Fourth quarter 2012
earnings were reduced by $.47 per diluted common share for the net impact of
previously disclosed actions taken in the fourth quarter associated with
residential mortgage banking activities and other items. Comparable items
which reduced earnings in the third quarter of 2012 and the fourth quarter of
2011 are provided in the Selected Income Statement Information section of this
news release.

"PNC expanded its businesses significantly in 2012," said James E. Rohr,
chairman and chief executive officer. "Our balance sheet strength along with
our committed employees allowed us to grow customers, loans and deposits
across our franchise and expand into Southeastern markets. While we are
pleased with the progress we have made, our financial results do not yet
reflect the full potential from our investments. Our commitment to revenue
growth, expense reduction and efficient capital management in 2013 should
position PNC to deliver even greater shareholder value."

Income Statement Highlights

  oPNC's businesses and markets drove growth in loans, deposits and customers
    and resulted in strong revenue in the fourth quarter.
  oPNC was successful in 2012 in growing and deepening customer relationships
    across its businesses and geographies through new client acquisition and
    cross sales.

       oRetail Banking net checking relationships grew 714,000 during 2012,
         including 460,000 from the RBC Bank (USA) acquisition.
       oCorporate & Institutional Banking continued to focus on building
         client relationships and adding new clients with attractive
         risk-return profiles. For the full year, 1,061 new corporate banking
         primary clients were added.
       oAsset management new primary client acquisitions were 37 percent
         higher in 2012 compared with 2011, fueled by an increase in referrals
         from other PNC businesses.
       oResidential Mortgage Banking loan origination volume in 2012
         increased to $15.2 billion reflecting growth of 33 percent over 2011.

  oNet interest income of $2.4 billion for the fourth quarter of 2012
    increased modestly compared with the third quarter.
  oNoninterest income was $1.6 billion for the fourth quarter of 2012 and
    $1.7 billion for the third quarter. Fourth quarter noninterest income was
    reduced by a $254 million provision for residential mortgage repurchase
    obligations. Both quarters included similar gains on sales of Visa shares.
    Excluding the impact of these items in both quarters, noninterest income
    increased 11 percent over the third quarter.
  oProvision for credit losses was $318 million for the fourth quarter of
    2012 compared with $228 million for the third quarter. The increase
    primarily reflected a larger loan portfolio and reduced reserve release in
    commercial lending.
  oNoninterest expense was $2.8 billion for the fourth quarter and $2.7
    billion for the third quarter. Fourth quarter noninterest expense included
    a noncash charge of $45 million for residential mortgage banking goodwill
    impairment and higher expenses for residential mortgage
    foreclosure-related matters.

Balance Sheet Highlights

  oLoans grew $4.0 billion, or 2 percent, during the fourth quarter to $186
    billion at December 31, 2012 compared with September 30, 2012.

       oTotal commercial lending increased $3.7 billion, or 4 percent, over
         the third quarter primarily in asset-based lending, healthcare,
         public finance and real estate.
       oTotal consumer lending increased $.3 billion primarily in automobile
         loans.

  oOverall credit quality improved during the fourth quarter of 2012 compared
    with the third quarter.

       oNonperforming assets of $3.8 billion at December 31, 2012 declined
         $.2 billion, or 6 percent.
       oNet charge-offs of $310 million decreased $21 million, or 6 percent.
       oAccruing loans past due decreased 4 percent.

  oTotal deposits increased to $213 billion at December 31, 2012 compared
    with $206 billion at September 30, 2012.

       oTransaction deposits grew $8.3 billion, or 5 percent, during the
         fourth quarter to $177 billion, or 83 percent of deposits, at
         December 31, 2012. Seasonal growth drove the increase.
       oRetail certificates of deposit declined $1.2 billion due to runoff of
         maturing accounts.

  oPNC's balance sheet remained core funded with a loans to deposits ratio of
    87 percent at December 31, 2012 and retained a strong bank holding company
    liquidity position.
  oPNC redeemed $.5 billion of 12 percent hybrid capital securities during
    the fourth quarter of 2012, effectively lowering funding costs.
  oPNC had a strong capital position at December 31, 2012.

       oThe Tier 1 common capital ratio increased to an estimated 9.6 percent
         at year end from 9.5 percent at September 30, 2012.
       oThe estimated proforma Basel III Tier 1 common capital ratio was 7.3
         percent at December 31, 2012 without benefit of phase-ins.



Earnings Summary
 In millions, except per share data           4Q12       3Q12       4Q11
 Net income                                 $ 719      $ 925      $ 493
 Diluted earnings per common share          $ 1.24     $ 1.64     $ .85
 Average diluted common shares outstanding    528        529        526
 Return on average assets                     .95   %    1.23  %    .72   %
 Return on average common equity              7.48  %    10.15 %    5.70  %
 Book value per common share Period end    $ 67.05    $ 66.41    $ 61.52
 Cash dividends declared per common share   $ .40      $ .40      $ .35



The following table presents selected income statement items that impacted
earnings in the periods presented and are referred to elsewhere in this news
release. The fourth quarter 2012 items were also disclosed in a Form 8-K filed
on January 9, 2013.

Selected Income Statement Information
                                                            Full Year
In millions, except per share   4Q12     3Q12     4Q11      2012      2011
data
Noninterest Income
 Provision for residential
 mortgage repurchase

 obligations
      Pretax                    $ 254    $ 37     $ 36      $ 761     $ 102
      After-tax                 $ 165    $ 24     $ 23      $ 495     $ 66
      Impact on diluted         $ (.31)  $ (.05)  $ (.04)   $ (.93)   $ (.13)
      earnings per share
 Gains on sales of Visa Class B
 common shares
      Pretax                    $ 130    $ 137              $ 267
      After-tax                 $ 85     $ 89               $ 174
      Impact on diluted         $ .16    $ .17              $ .33
      earnings per share
Noninterest Expense
 Goodwill impairment charge for
 Residential Mortgage

 Banking segment
      Pretax                    $ 45                        $ 45
      After-tax                 $ 45                        $ 45
      Impact on diluted         $ (.08)                     $ (.08)
      earnings per share
 Expenses for residential
 mortgage

 foreclosure-related matters
      Pretax                    $ 91     $ 53     $ 240     $ 225     $ 324
      After-tax                 $ 60     $ 34     $ 156     $ 146     $ 210
      Impact on diluted         $ (.11)  $ (.06)  $ (.30)   $ (.28)   $ (.40)
      earnings per share
 Noncash charges for
 unamortized discounts related
 to redemption of trust
 preferred securities
      Pretax                    $ 70     $ 95     $ 198     $ 295     $ 198
      After-tax                 $ 46     $ 61     $ 129     $ 192     $ 129
      Impact on diluted         $ (.09)  $ (.12)  $ (.24)   $ (.36)   $ (.24)
      earnings per share
 Integration costs
      Pretax                    $ 35     $ 35     $ 28      $ 267     $ 42
      After-tax                 $ 23     $ 23     $ 18      $ 174     $ 27
      Impact on diluted         $ (.04)  $ (.04)  $ (.04)   $ (.33)   $ (.05)
      earnings per share
Total impact of selected items
on diluted earnings per share   $ (.47)  $ (.10)  $ (.62)   $ (1.65)  $ (.82)



The Consolidated Financial Highlights accompanying this news release also
include reconciliations of reported amounts to non-GAAP financial measures,
including a reconciliation of business segment income to net income. After-tax
amounts referenced in this news release were calculated using the statutory
federal income tax rate of 35 percent, where applicable. Reference to core net
interest income is to total net interest income less purchase accounting
accretion. Information in this news release including the financial tables is
unaudited. See the notes in the Consolidated Financial Highlights.



CONSOLIDATED REVENUE REVIEW
Revenue                                              Change    Change
                                                     4Q12vs   4Q12vs
 In millions            4Q12      3Q12      4Q11     3Q12      4Q11
 Net interest income  $ 2,424   $ 2,399   $ 2,199    1     %   10   %
 Noninterest income     1,645     1,689     1,350    (3)   %   22   %
 Total revenue        $ 4,069   $ 4,088   $ 3,549    –         15   %



Total revenue for the fourth quarter of 2012 was stable with the third quarter
of 2012 and increased compared with the fourth quarter of 2011. Excluding the
impact of the provision for residential mortgage repurchase obligations in all
periods and gains on sales of Visa shares in the fourth and third quarters of
2012, fourth quarter 2012 total revenue increased 5 percent over third quarter
2012 and 17 percent over fourth quarter 2011.

Net interest income increased modestly compared with the third quarter. Core
net interest income remained stable as loan growth was largely offset by the
impact of lower core yields on interest earning assets. Purchase accounting
accretion increased driven by higher cash recoveries. Net interest income
increased compared with fourth quarter 2011 due to higher core net interest
income resulting from the RBC Bank (USA) acquisition, organic loan growth and
lower funding costs. The net interest margin of 3.85 percent for the fourth
quarter of 2012 remained relatively stable with 3.82 percent for the third
quarter of 2012 and 3.86 percent for the fourth quarter of 2011.



Noninterest Income                                         Change     Change
                                                           4Q12vs   4Q12vs
 In millions                  4Q12      3Q12      4Q11     3Q12       4Q11
 Asset management           $ 302     $ 305     $ 250      (1)   %    21    %
 Consumer services            294       288       269      2     %    9     %
 Corporate services           349       295       266      18    %    31    %
 Residential mortgage
   Residential mortgage       254       264       193      (4)   %    32    %
   banking
   Provision for
   residential mortgage
                              (254)     (37)      (36)     NM         NM
   repurchase obligations
 Service charges on           150       152       140      (1)   %    7     %
 deposits
 Net gains on sales of        45        40        62       13    %    (27)  %
 securities
 Net other-than-temporary     (15)      (24)      (44)     38    %    66    %
 impairments
 Other                        520       406       250      28    %    108   %
                            $ 1,645   $ 1,689   $ 1,350    (3)   %    22    %



Noninterest income for the fourth quarter of 2012 declined $44 million
compared with the third quarter of 2012 and increased significantly over
fourth quarter 2011. Fourth quarter 2012 included a $254 million provision for
residential mortgage repurchase obligations related to expected elevated
levels of repurchase demands primarily as a result of further changes in
behavior and demand patterns of FHLMC and FNMA for loans sold into agency
securitizations, including the years 2004 and 2005.

Excluding the impact of the provision for residential mortgage repurchase
obligations and gains on sales of Visa shares in both periods, noninterest
income for the fourth quarter of 2012 increased $180 million, or 11 percent,
compared with the third quarter. Asset management fees declined $3 million.
Consumer services fees grew $6 million over the third quarter due to customer
growth partially offset by the impact of Hurricane Sandy on customer volume
and activity. Corporate service fees grew $54 million compared with the third
quarter primarily due to strong merger and acquisition advisory fees.
Residential mortgage banking income in the fourth quarter included strong loan
sales revenue driven by higher loan origination volume and lower net hedging
gains on mortgage servicing rights. Service charges on deposits declined $2
million compared with the third quarter reflecting the impact of fees waived
related to Hurricane Sandy of $7 million. Other noninterest income increased
$114 million compared with the third quarter primarily due to higher revenue
associated with commercial mortgage banking activity, private equity
investments and asset sales. In each of the fourth and third quarters of 2012
PNC sold a portion of its investment in Visa and recognized gains of $130
million on the sale of 4 million Visa Class B common shares and $137 million
on the sale of 5 million Visa Class B common shares, respectively. At December
31, 2012, PNC's remaining investment in Visa Class B common shares was
approximately 14 million shares with a carrying value of $.3 billion and a
fair value of approximately $.9 billion.

Noninterest income for the fourth quarter of 2012 increased $295 million
compared with the fourth quarter of 2011. Excluding the impact of the
provision for residential mortgage repurchase obligations in both periods and
the gain on sale of Visa shares in fourth quarter 2012, noninterest income for
the fourth quarter of 2012 increased $383 million, or 28 percent, compared
with the fourth quarter of 2011. Asset management fees increased $52 million
from stronger equity markets and growth in customers and fees. Consumer
service fees grew $25 million due to growth in customers, including the RBC
Bank (USA) acquisition, and transaction volume. Corporate service fees
increased $83 million as a result of strong merger and acquisition advisory
fees, higher commercial mortgage servicing revenue and higher treasury
management fees. Residential mortgage banking revenue increased as a result of
continued strong loan sales revenue driven by higher loan origination volume.
Service charges on deposits increased $10 million reflecting customer growth
including the RBC Bank (USA) acquisition. Other noninterest income increased
$270 million compared with fourth quarter 2011 primarily attributable to the
gain on the sale of a portion of PNC's investment in Visa shares and higher
revenue from private equity investments, improved valuations and asset sales.



CONSOLIDATED EXPENSE REVIEW
Noninterest Expense                          Change    Change
                                             4Q12 vs   4Q12 vs
 In millions    4Q12      3Q12      4Q11     3Q12      4Q11
 Personnel    $ 1,216   $ 1,171   $ 1,052    4     %   16    %
 Occupancy      226       212       198      7     %   14    %
 Equipment      194       185       177      5     %   10    %
 Marketing      70        74        74       (5)   %   (5)   %
 Other          1,123     1,008     1,218    11    %   (8)   %
              $ 2,829   $ 2,650   $ 2,719    7     %   4     %



Noninterest expense for the fourth quarter of 2012 increased $179 million
compared with third quarter 2012. The fourth quarter reflected $91 million of
expenses for residential mortgage foreclosure-related matters, including a
charge of approximately $70 million resulting from an agreement to amend
consent orders entered into in April 2011, compared with $53 million in the
third quarter. In the fourth quarter a $45 million noncash charge for goodwill
impairment related to PNC's Residential Mortgage Banking business segment was
recorded. In addition, the fourth quarter included $70 million of noncash
charges for unamortized discounts related to redemption of trust preferred
securities compared with $95 million in the third quarter. Fourth quarter 2012
noninterest expense included $38 million of adjustments to accruals primarily
for deferred loan origination costs and a contribution to the PNC Foundation
of $28 million.

Noninterest expense for the fourth quarter of 2012 increased $110 million over
fourth quarter 2011 primarily driven by operating expense from the RBC Bank
(USA) acquisition, expense associated with strategic business investments, the
goodwill impairment charge, adjustments to accruals primarily for deferred
loan origination costs and the contribution to the PNC Foundation. These
increases were partially offset by lower expenses for residential mortgage
foreclosure-related matters and lower noncash charges related to redemption of
trust preferred securities, which were $240 million and $198 million,
respectively, in the fourth quarter of 2011.

The effective tax rate was 22.0 percent for the fourth quarter of 2012
compared with 23.6 percent for the third quarter of 2012 and 23.0 percent for
the fourth quarter of 2011.

CONSOLIDATED BALANCE SHEET REVIEW

Total assets were $305 billion at December 31, 2012 compared with $301 billion
at September 30, 2012 and $271 billion at December 31, 2011. The linked
quarter increase was primarily due to loan growth. In the comparison with the
prior year fourth quarter, the RBC Bank (USA) acquisition and organic loan
growth drove the increase in assets.



Loans                                                 Change       Change
                                                      12/31/12vs  12/31/12vs
 In billions       12/31/2012  9/30/2012  12/31/2011  9/30/12      12/31/11
 Commercial        $  108.9    $  105.2   $  88.3         4    %       23   %
 lending
 Consumer lending     77.0        76.7       70.7         –            9    %
 Total loans       $  185.9    $  181.9   $  159.0        2    %       17   %
 For the quarter
 ended:
 Average loans     $  183.2    $  180.7   $  156.2        1    %       17   %



Total loans at December 31, 2012 grew $4.0 billion compared with September 30,
2012. Commercial lending increased $3.7 billion during the fourth quarter of
2012 as a result of continued strong loan growth primarily in asset-based
lending, healthcare, public finance and real estate. Consumer lending
increased $.3 billion compared with September 30, 2012 as higher automobile
loans and credit card loans were partially offset by lower education loans.
Total loan originations and new commitments and renewals were $42 billion for
the fourth quarter of 2012 compared with $40 billion for the third quarter of
2012 and $41 billion for the fourth quarter of 2011. For the full year, total
loan originations and new commitments and renewals were $157 billion for 2012,
including $4.6 billion of small business loans, compared with $147 billion for
2011. Average loans in the fourth quarter of 2012 increased $2.5 billion
compared with the third quarter and $27.0 billion compared with fourth quarter
2011 reflecting organic loan growth and, in the comparison with fourth quarter
2011, loans added in the RBC Bank (USA) acquisition.



Investment Securities                                 Change       Change
                                                      12/31/12vs  12/31/12vs
 Inbillions       12/31/2012  9/30/2012  12/31/2011  9/30/12      12/31/11
 At quarter end    $  61.4     $  62.8    $  60.6        (2)   %      1     %
 Average for the   $  59.4     $  60.9    $  60.4        (2)   %      (2)   %
 quarter ended



Investment securities declined in the fourth quarter of 2012 compared with the
third quarter as a result of prepayments, primarily of mortgage-backed
securities, partially offset by net purchases. At both December 31 and
September 30, 2012, the available for sale investment securities balance
included a net unrealized pretax gain of $1.6 billion, representing the
difference between fair value and amortized cost, compared with a net
unrealized pretax loss of $40 million at December 31, 2011. The gain compared
with the fourth quarter 2011 loss was primarily due to improvement in the
value of non-agency residential mortgage-backed securities and lower market
interest rates.

Interest-earning deposits with banks of $4.0 billion at December 31, 2012
increased $1.7 billion compared with September 30, 2012 primarily due to
higher funds on deposit with the Federal Reserve. Loans held for sale of $3.7
billion at December 31, 2012 increased $1.0 billion compared with September
30, 2012 mainly as a result of higher residential mortgages held for sale
related to higher loan origination volume.



Deposits                                              Change       Change
                                                      12/31/12vs  12/31/12vs
 In billions       12/31/2012  9/30/2012  12/31/2011  9/30/12      12/31/11
 Transaction       $  176.7    $  168.4   $  147.6       5     %      20    %
 deposits
 Other deposits       36.4        37.9       40.4        (4)   %      (10)  %
 Total deposits    $  213.1    $  206.3   $  188.0       3     %      13    %
 For the quarter
 ended:
 Average deposits  $  207.5    $  203.8   $  186.5       2     %      11    %



Total deposits at December 31, 2012 grew $6.8 billion compared with September
30, 2012 and $25.1 billion compared with December 31, 2011. In the comparison
with third quarter end, growth in transaction deposits of $8.3 billion
primarily driven by seasonal growth was partially offset by a decline of $1.2
billion in retail certificates of deposit due to runoff of maturing accounts
and a decrease in time deposits, primarily Eurodollar deposits. In the
comparison with fourth quarter 2011, the increase was attributable to deposits
added in the RBC Bank (USA) acquisition and organic transaction deposit
growth.  Average deposits increased $3.7 billion over the third quarter and
$21.0 billion over fourth quarter 2011.



Borrowed Funds                                        Change       Change
                                                      12/31/12vs  12/31/12vs
 Inbillions       12/31/2012  9/30/2012  12/31/2011  9/30/12      12/31/11
 At quarter end    $  40.9     $  43.1    $  36.7        (5)   %       11   %
 Average for the   $  40.3     $  43.7    $  35.7        (8)   %       13   %
 quarter ended



Borrowed funds decreased $2.2 billion at December 31, 2012 compared with
September 30, 2012 primarily due to lower commercial paper. During the fourth
quarter of 2012, through a series of previously disclosed transactions, PNC
remarketed and exchanged $500 million of 8.729 percent junior subordinated
notes for senior notes and redeemed $500 million of 12 percent hybrid capital
securities issued by the National City Preferred Capital Trust I. The
remarketing and redemption resulted in fourth quarter 2012 noncash charges for
unamortized discounts of $70 million. Trust preferred securities redeemed
during full year 2012 totaled $2.3 billion with a weighted average rate of 8.3
percent, effectively lowering funding costs. Subordinated debt increased in
the comparison with third quarter due to the fourth quarter issuance of $1.0
billion of 2.70 percent subordinated notes. Borrowed funds increased $4.2
billion compared with December 31, 2011 primarily due to higher commercial
paper and Federal Home Loan Bank borrowings partially offset by lower bank
notes and senior debt and subordinated debt.



Capital
                                            12/31/2012*  9/30/2012  12/31/2011
 Common shareholders' equity In billions $  35.4      $  35.1    $  32.4
 Tier 1 common capital ratio                   9.6   %      9.5  %     10.3  %
 Tier 1 risk-based capital ratio               11.7  %      11.7 %     12.6  %
 * Ratios estimated



PNC continued to improve its strong capital levels and ratios. Common
shareholders' equity grew as a result of the retention of earnings. The Tier 1
common capital ratio increased compared with the third quarter as growth in
retained earnings was partially offset by an increase in risk-weighted assets
from loan growth. The estimated proforma Basel III Tier 1 common capital ratio
was 7.3 percent at December 31, 2012 without benefit of phase-ins, based on
current understanding of Basel III proposed rules, estimates of Basel II (with
proposed modifications) risk-weighted assets, and application of Basel II.5
rules. The decline in the Tier 1 common and Tier 1 risk-based capital ratios
compared with December 31, 2011 primarily reflected the impact of the RBC Bank
(USA) acquisition.

The PNC board of directors recently declared a quarterly common stock cash
dividend of 40 cents per share with a payment date of February 5, 2013. PNC
purchased $55 million of common stock in the fourth quarter of 2012 and $190
million in full year 2012 under a $250 million authorization as part of its
existing 25 million share repurchase program.



CREDIT QUALITY REVIEW
Credit Quality                                        Change       Change
                   At or for the quarter ended        12/31/12vs  12/31/12vs
 In millions       12/31/2012  9/30/2012  12/31/2011  9/30/12      12/31/11
 Nonperforming     $   3,254   $  3,414   $   3,560      (5)   %      (9)   %
 loans
 Nonperforming     $   3,794   $  4,021   $   4,156      (6)   %      (9)   %
 assets
 Accruing loans
 past due 90 days  $   2,351   $  2,456   $   2,973      (4)   %      (21)  %
 or more
 Net charge-offs   $   310     $  331     $   327        (6)   %      (5)   %
 Provision for     $   318     $  228     $   190        39    %      67    %
 credit losses
 Allowance for
 loan and lease    $   4,036   $  4,039   $   4,347      –            (7)   %
 losses



Overall credit quality continued to improve during the fourth quarter of 2012
compared with the third quarter. The decline in nonperforming assets at
December 31, 2012 compared with September 30, 2012 was primarily attributable
to decreases in commercial real estate and commercial nonperforming loans
partially offset by increases in consumer lending nonperforming loans. The
increase in total consumer lending nonperforming loans, primarily home equity
and residential mortgage, was largely attributable to $199 million in the
fourth quarter of additional troubled debt restructurings resulting from
bankruptcy where a concession has been granted to a borrower based upon
discharge from personal liability, recorded in accordance with regulatory
guidance implemented by PNC in the fourth and third quarters of 2012. Such
additional troubled debt restructurings recorded in the third quarter were
$112 million. The decline in nonperforming assets from fourth quarter 2011 was
due to lower commercial real estate and commercial nonperforming loans
partially offset by higher nonperforming consumer loans including those added
in the RBC Bank (USA) acquisition. Higher nonperforming consumer loans
included an increase in nonperforming home equity loans resulting from a first
quarter 2012 policy change which placed home equity loans on nonaccrual status
when past due 90 days or more compared with 180 days under the prior policy.
Nonperforming assets to total assets were 1.24 percent at December 31, 2012
compared with 1.34 percent at September 30, 2012 and 1.53 percent at December
31, 2011.

Overall delinquencies decreased by $140 million, or 4 percent, as of December
31, 2012 compared with September 30, 2012 driven by a decline in accruing
loans past due 90 days or more of $105 million primarily related to the
reclassification from accruing loans past due to nonperforming loans of
additional consumer loan troubled debt restructurings, net of charge-offs,
resulting from bankruptcy.

Net charge-offs for the fourth quarter of 2012 were .67 percent of average
loans on an annualized basis compared with .73 percent for the third quarter
of 2012 and .83 percent for the fourth quarter of 2011. The fourth and third
quarters of 2012 included net charge-offs of $45 million and $83 million,
respectively, related to additional troubled debt restructurings resulting
from bankruptcy as a result of implementation of regulatory guidance during
those quarters. Provision for credit losses increased in both comparisons
primarily reflecting a larger loan portfolio and reduced reserve release in
commercial lending and, in the prior year quarter comparison, the impact of
additional troubled debt restructurings resulting from bankruptcy.

The allowance for loan and lease losses to total loans was 2.17 percent at
December 31, 2012, 2.22 percent at September 30, 2012 and 2.73 percent at
December 31, 2011. The decrease in the allowance compared with year end 2011
resulted from improved overall credit quality. The allowance to nonperforming
loans was 124 percent at December 31, 2012 compared with 118 percent at
September 30, 2012 and 122 percent at December 31, 2011.



BUSINESS SEGMENT RESULTS
Business Segment Income (Loss)
 In millions                          4Q12              3Q12          4Q11
 Retail Banking                   $   121           $   192        $  62
 Corporate & Institutional            649               607           597
 Banking
 Asset Management Group               34                37            25
 Residential Mortgage Banking         (192)             36            (61)
 Non-Strategic Assets                 59                40            (2)
 Portfolio
 Other, including BlackRock           48                13            (128)
 Net income                       $   719           $   925        $  493
 Enhancements were made to internal transfer pricing methodology during the
 second quarter of 2012. Prior period amounts have been reclassified to
 conform with the current period presentation.
 See accompanying notes in Consolidated Financial Highlights



Retail Banking                                              Change    Change
                                                            4Q12 vs   4Q12 vs
 In millions                    4Q12      3Q12      4Q11    3Q12      4Q11
 Net interest income          $ 1,081   $ 1,076   $ 972     $  5      $  109
 Noninterest income           $ 596     $ 588     $ 411     $  8      $  185
 Provision for credit losses  $ 280     $ 220     $ 229     $  60     $  51
 Noninterest expense          $ 1,206   $ 1,140   $ 1,056   $  66     $  150
 Earnings                     $ 121     $ 192     $ 62      $  (71)   $  59
 In billions
 Average loans                $ 65.4    $ 64.5    $ 59.0    $  .9     $  6.4
 Average deposits             $ 131.9   $ 131.4   $ 121.8   $  .5     $  10.1



Retail Banking earned $596 million for the full year 2012 compared with $371
million in 2011. The increase in earnings was due to higher net interest
income, gains on sales of Visa Class B common shares, and lower provision for
credit losses partially offset by higher noninterest expense largely related
to the RBC Bank (USA) acquisition and higher additions to legal reserves.
Retail Banking's earnings for the fourth quarter of 2012 declined compared
with the third quarter of 2012 and increased compared to the fourth quarter of
2011. Fourth quarter 2012 noninterest income was reduced by the impact of
Hurricane Sandy on service charges on deposits and consumer service fees. The
increase in the provision linked quarter was due to elevated consumer
delinquencies due to seasonality. The increase in noninterest expense over the
third quarter was related to adjustments to accruals primarily for deferred
loan origination costs and to investments in the business. In the comparison
with fourth quarter 2011, the increase in net interest income was attributable
to the RBC Bank (USA) acquisition, higher average transaction deposit balances
and improvements in spreads. Noninterest income increased compared to the
fourth quarter of 2011 primarily due to the gain of $130 million on the sale
of 4 million Visa Class B common shares and the RBC Bank (USA) acquisition.
The increase in noninterest expense over fourth quarter 2011 was attributable
to the RBC Bank (USA) acquisition and adjustments to accruals primarily for
deferred loan origination costs.

  oRetail Banking continued to successfully execute its customer growth
    strategy.

       oChecking relationships totaled 6,475,000 at December 31, 2012.
       oRetail Banking grew net checking relationships by 714,000 in 2012,
         including 460,000 from the RBC Bank (USA) acquisition.
       oNet checking relationships grew organically in 2012 by 4 percent from
         year end 2011.
       oActive online banking and active online bill payment customers
         increased organically 15 percent and 8 percent, respectively, from
         year end 2011.

  oAverage transaction deposits for the fourth quarter of 2012 increased $1.6
    billion over the third quarter of 2012. Average certificates of deposit
    declined $1.2 billion in the same comparison due to runoff of maturing
    accounts. In the comparison with fourth quarter 2011, average transaction
    deposits increased $15.0 billion, or 18 percent, due to the RBC Bank (USA)
    acquisition and organic growth, while average certificates of deposit
    declined $6.5 billion, or 22 percent.
  oAverage loans for the fourth quarter of 2012 increased 1 percent compared
    with the third quarter driven by automobile loans. In the comparison with
    fourth quarter 2011, loans increased 11 percent primarily as a result of
    home equity and commercial loans from the RBC Bank (USA) acquisition and
    growth in automobile loans.
  oNet charge-offs were stable at $217 million for fourth quarter 2012
    compared with $219 million in the third quarter and increased compared
    with $195 million in the fourth quarter of 2011. In the prior year quarter
    comparison, higher net charge-offs were related to consumer loan troubled
    debt restructurings resulting from bankruptcy as a result of
    implementation of regulatory guidance. Nonperforming assets were $1.1
    billion at December 31, 2012, an increase of $82 million compared with
    September 30, 2012.
  oPNC's expansive branch footprint covers nearly half of the U.S. population
    in 17 states and Washington, D.C. with a network of 2,881 branches and
    7,282 ATMs at December 31, 2012.



Corporate & Institutional Banking                           Change    Change
                                                            4Q12 vs   4Q12 vs
 In millions                    4Q12      3Q12      4Q11    3Q12      4Q11
 Net interest income          $ 1,057   $ 1,019   $ 943     $   38    $  114
 Corporate service fees       $ 324     $ 258     $ 226     $   66    $  98
 Other noninterest income     $ 195     $ 139     $ 137     $   56    $  58
 Provision for credit losses  $ 9       $ (61)    $ (136)   $   70    $  145
 (benefit)
 Noninterest expense          $ 549     $ 520     $ 495     $   29    $  54
 Earnings                     $ 649     $ 607     $ 597     $   42    $  52
 In billions
 Average loans                $ 91.3    $ 89.4    $ 71.5    $   1.9   $  19.8
 Average deposits             $ 63.9    $ 60.2    $ 54.8    $   3.7   $  9.1



Corporate & Institutional Banking earned $2.3 billion for the full year 2012
compared with $1.9 billion in 2011. The increase in earnings was primarily due
to higher revenue partially offset by higher noninterest expense and a net of
no provision for credit losses for the year compared with a benefit in 2011.
Earnings for the fourth quarter of 2012 increased compared with both the third
quarter of 2012 and the fourth quarter of 2011 due to higher revenue. Net
interest income increased in both comparisons as a result of higher average
loans driven by organic growth, higher average deposits, an increase in
purchase accounting accretion and, in the comparison with fourth quarter 2011,
the RBC Bank (USA) acquisition. Corporate service fees increased in both
comparisons largely due to higher merger and acquisition advisory fees and, in
the prior year quarter comparison, higher commercial mortgage servicing
revenue and higher treasury management fees. Other noninterest income
increased compared with third quarter 2012 primarily due to higher revenue
associated with commercial mortgage banking activity and asset sales. In the
comparison with fourth quarter 2011, the increase in other noninterest income
was mainly attributable to higher capital markets activity and asset sales.
Provision for credit losses increased in both comparisons reflecting a larger
loan portfolio. Noninterest expense increased in both comparisons primarily
due to higher compensation-related costs driven by improved performance and,
in the prior year quarter comparison, higher staffing and operating expense
for the RBC Bank (USA) acquisition.

  oAverage loans increased in both comparisons due to strong growth across
    all loan categories. Loans added in the RBC Bank (USA) acquisition
    contributed to the increase in the comparison with fourth quarter 2011.
  oAverage deposits increased from the fourth quarter of 2011 due to deposits
    added in the RBC Bank (USA) acquisition and both comparisons benefited
    from inflows into noninterest-bearing demand deposits, including seasonal
    increases compared with the linked quarter.
  oNet charge-offs were $34 million in the fourth quarter of 2012 compared
    with $35 million in the third quarter of 2012 and $43 million in the
    fourth quarter of 2011. Nonperforming assets declined for the eleventh
    consecutive quarter.
  oThe commercial mortgage servicing portfolio was $282 billion at December
    31, 2012, $265 billion at September 30, 2012 and $267 billion at December
    31, 2011.



Asset Management Group                                      Change    Change
                                                            4Q12 vs   4Q12 vs
 In millions                       4Q12     3Q12     4Q11   3Q12      4Q11
 Net interest income             $ 74     $ 73     $ 73     $   1     $  1
 Noninterest income              $ 173    $ 170    $ 161    $   3     $  12
 Provision for credit losses     $ (2)    $ 4      $ 10     $   (6)   $  (12)
 (benefit)
 Noninterest expense             $ 195    $ 180    $ 184    $   15    $  11
 Earnings                        $ 34     $ 37     $ 25     $   (3)   $  9
 In billions
 Assets under                    $ 224    $ 222    $ 210    $   2     $  14
 administration Quarter end
 Average loans                   $ 6.4    $ 6.2    $ 6.1    $   .2    $  .3
 Average deposits                $ 8.6    $ 7.9    $ 8.0    $   .7    $  .6



Asset Management Group earned $145 million for full year 2012 compared with
$168 million for 2011. The decrease in earnings was due to higher noninterest
expense from strategic business investments and a provision for credit losses
in 2012 compared with a benefit in 2011. These were partially offset by higher
revenue as noninterest income increased from stronger equity markets and
business growth and net interest income benefited from higher deposit
balances. Fourth quarter 2012 earnings declined compared with the third
quarter of 2012 primarily due to higher noninterest expense, including higher
compensation costs related to business growth. Noninterest income increased in
both quarterly comparisons from improved equity markets and client sales.

  oThe business continued to focus on client acquisition and asset growth.
    New primary client acquisitions were 37 percent higher in 2012 compared
    with 2011.
  oAssets under administration at December 31, 2012 included discretionary
    assets under management of $112 billion and nondiscretionary assets under
    administration of $112 billion. Discretionary assets under management at
    December 31, 2012 were stable with September 30, 2012 and increased $5
    billion compared with December 31, 2011 driven by stronger equity markets
    and net positive flows.
  oAverage loans increased 3 percent compared with the third quarter of 2012
    as new client originations, primarily home equity installment loans,
    benefited from an attractive interest rate environment and loan referrals
    from other lines of business.
  oAverage deposits increased 9 percent compared with the third quarter due
    to significant growth in demand deposits, consistent with seasonal growth
    between the third and fourth quarters.



Residential Mortgage Banking                                Change    Change
                                                            4Q12 vs   4Q12 vs
 In millions                         4Q12     3Q12    4Q11  3Q12      4Q11
 Net interest income               $ 53     $ 52    $ 52    $ 1       $ 1
 Noninterest income
    Provision for residential
    mortgage
             repurchase            $ (254)  $ (37)  $ (36)  $ (217)   $ (218)
             obligations
    Other noninterest income       $ 259    $ 269   $ 204   $ (10)    $ 55
 Provision for credit losses       $ 2      $ 2     $ (10)    –       $ 12
 (benefit)
 Noninterest expense               $ 333    $ 226   $ 317   $ 107     $ 16
 Earnings (loss)                   $ (192)  $ 36    $ (61)  $ (228)   $ (131)
 In billions
 Residential mortgage servicing    $ 119    $ 119   $ 118     –       $ 1
 portfolio Quarter end
 Loan origination volume           $ 4.4    $ 3.8   $ 3.0   $ .6      $ 1.4



Residential Mortgage Banking reported a loss of $308 million for the full year
2012 compared with earnings of $89 million for 2011 primarily as a result of
$761 million of provision for residential mortgage repurchase obligations in
2012 compared with $102 million in 2011. Excluding this provision, loan sales
revenue increased $363 million in 2012 compared with 2011 driven by higher
loan origination volume in 2012 partially offset by lower net hedging gains on
mortgage servicing rights. Noninterest expense for 2012 increased $195 million
compared with 2011 primarily driven by higher loan origination volume, higher
servicing costs, a charge for goodwill impairment and higher additions to
legal reserves.

The loss in the fourth quarter of 2012 was primarily due to a higher provision
for residential mortgage repurchase obligations related to expected elevated
levels of repurchase demands primarily as a result of further changes in
behavior and demand patterns of FHLMC and FNMA for loans sold into agency
securitizations, including the years 2004 and 2005. Fourth quarter 2012
noninterest expense included a charge of approximately $70 million resulting
from an agreement to amend consent orders entered into in April 2011. An
agreement was reached with the Office of the Comptroller of the Currency and
the Board of Governors of the Federal Reserve System to end the independent
foreclosure review program under the consent orders and replace it with an
accelerated remediation process. Fourth quarter 2012 noninterest expense also
included a $45 million noncash charge for goodwill impairment; no goodwill
remained at December 31, 2012. In comparisons with both third quarter 2012 and
fourth quarter 2011, noninterest expense reflected higher residential mortgage
origination volume and servicing costs.

Other noninterest income in the fourth quarter included strong loan sales
revenue driven by higher loan origination volume. In the linked quarter
comparison, net hedging gains on mortgage servicing rights declined. In the
comparison to fourth quarter 2011, other noninterest income increased as
higher loan sales revenue driven by higher loan origination volume was
partially offset by lower net hedging gains on mortgage servicing rights.

Loan origination volume was strong in the fourth quarter of 2012.
Approximately 30 percent of originations were under the revised Home
Affordable Refinance Program. The fair value of mortgage servicing rights was
$.7 billion, $.6 billion and $.7 billion at December 31, 2012, September 30,
2012 and December 31, 2011, respectively.



Non-Strategic Assets Portfolio                        Change    Change
                                                      4Q12 vs   4Q12 vs
 In millions                    4Q12    3Q12    4Q11  3Q12      4Q11
 Net interest income          $ 197   $ 195   $ 192   $  2      $  5
 Noninterest income           $ 21    $ 9     $ 15    $  12     $  6
 Provision for credit losses  $ 52    $ 61    $ 88    $  (9)    $  (36)
 Noninterest expense          $ 73    $ 79    $ 119   $  (6)    $  (46)
 Earnings (loss)              $ 59    $ 40    $ (2)   $  19     $  61
 In billions
 Average loans                $ 11.9  $ 12.4  $ 12.7  $  (.5)   $  (.8)



Non-Strategic Assets Portfolio segment had earnings of $237 million for the
full year 2012 compared with $200 million for 2011. The increase was
attributable to lower provision for credit losses partially offset by lower
net interest income driven by declines in average loans and purchase
accounting accretion. Fourth quarter 2012 earnings increased compared with
both the third quarter of 2012 and the fourth quarter of 2011. Noninterest
income increased in the linked quarter comparison largely related to home
equity repurchase obligations. The decrease in noninterest expense in the
comparison with fourth quarter 2011 primarily resulted from lower non-credit
losses. The provision for credit losses declined compared with fourth quarter
2011 due to improved credit quality.

  oThe Non-Strategic Assets Portfolio primarily consists of non-strategic
    assets obtained through acquisitions of other companies. The decrease in
    average loans in both comparisons reflected customer payment activity and
    portfolio management activities to reduce underperforming assets. Certain
    assets in this segment continue to require special servicing and
    management oversight.
  oNet charge-offs were $60 million for the fourth quarter of 2012 compared
    with $65 million for the third quarter of 2012 and $77 million for the
    fourth quarter of 2011.

Other, including BlackRock

The "Other, including BlackRock" category, for the purposes of this release,
includes earnings and gains or losses related to PNC's equity interest in
BlackRock, and residual activities that do not meet the criteria for
disclosure as a separate reportable business, such as integration costs, asset
and liability management activities including net securities gains or losses,
other-than-temporary impairment of investment securities and certain trading
activities, exited businesses, alternative investments including private
equity, intercompany eliminations, most corporate overhead, tax adjustments
that are not allocated to business segments, and differences between business
segment performance reporting and financial statement reporting under
generally accepted accounting principles.

PNC recorded earnings of $3 million in "Other, including BlackRock" for the
full year 2012 compared with $303 million in 2011. The decline in earnings was
primarily due to higher integration costs and noncash charges related to
redemption of trust preferred securities. For the fourth quarter of 2012 PNC
recorded income of $48 million in "Other, including BlackRock" compared with
income of $13 million for the third quarter of 2012 and a loss of $128 million
for the fourth quarter of 2011. The increase in earnings compared with fourth
quarter 2011 was primarily due to lower noncash charges related to redemption
of trust preferred securities, higher revenue from private equity investments
and higher earnings from the BlackRock investment.

CONFERENCE CALL AND SUPPLEMENTAL FINANCIAL INFORMATION

PNC Chairman and Chief Executive Officer James E. Rohr and Executive Vice
President and Chief Financial Officer Richard J. Johnson will hold a
conference call for investors today at 10:00 a.m. Eastern Time regarding the
topics addressed in this news release and the related financial supplement.
Dial-in numbers for the conference call are (877) 272-3498 or (303) 223-4372
(international) and Internet access to the live audio listen-only webcast of
the call is available at www.pnc.com/investorevents. PNC's fourth quarter and
full year 2012 earnings release, the related financial supplement, and
presentation slides to accompany the conference call remarks will be available
at www.pnc.com/investorevents prior to the beginning of the call. A telephone
replay of the call will be available for one week at (800) 633-8284 or (402)
977-9140 (international), conference ID 21626992 and a replay of the audio
webcast will be available on PNC's website for 30 days.

The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's
largest diversified financial services organizations providing retail and
business banking; residential mortgage banking; specialized services for
corporations and government entities, including corporate banking, real estate
finance and asset-based lending; wealth management and asset management.

[TABULAR MATERIAL FOLLOWS]



The PNC Financial        Consolidated Financial Highlights (Unaudited)
Services Group, Inc.
Financial Results        Three months ended                  Year ended
Dollars in millions,     December   September   December     December December
except per share data    31         30          31           31       31
                             2012   2012        2011         2012     2011
Revenue
     Net interest        $   2,424  $   2,399   $   2,199    $ 9,640  $ 8,700
     income
     Noninterest             1,645      1,689       1,350      5,872    5,626
     income
        Total revenue        4,069      4,088       3,549      15,512   14,326
     Noninterest             2,829      2,650       2,719      10,582   9,105
     expense
        Pretax,
        pre-provision        1,240      1,438       830        4,930    5,221
        earnings (a)
Provision for credit         318        228         190        987      1,152
losses
Income before income
taxes and
noncontrolling
interests
     (pretax earnings)   $   922    $   1,210   $   640      $ 3,943  $ 4,069
Net income (b)           $   719    $   925     $   493      $ 3,001  $ 3,071
Less:
     Net income (loss)
     attributable to         1          (14)        17         (12)     15
     noncontrolling
     interests
     Preferred stock
     dividends and           54         63          25         181      58
     discount
     accretion
Net income
attributable to common   $   664    $   876     $   451      $ 2,832  $ 2,998
shareholders
Diluted earnings per     $   1.24   $   1.64    $   .85      $ 5.30   $ 5.64
common share
Cash dividends
declared per common      $   .40    $   .40     $   .35      $ 1.55   $ 1.15
share
Certain prior period amounts included in these Consolidated Financial
Highlights have been reclassified to conform with the current period
presentation, which we believe is more

meaningful to readers of our consolidated financial statements.
     We believe that pretax, pre-provision earnings, a non-GAAP measure, is
(a)  useful as a tool to help evaluate the ability to provide for credit costs
     through operations.
(b)  See page18 for a reconciliation of business segment income to net
     income.



Total and Core Net Interest Income
                   Three months ended                   Year ended
                   December 31 September   December     December   December
                               30          31           31         31
In millions            2012        2012        2011         2012       2011
Core net interest  $   2,151   $   2,154   $   1,943    $   8,516  $   7,581
income (a)
Purchase
accounting             273         245         256          1,124      1,119
accretion (a)
Total net interest $   2,424   $   2,399   $   2,199    $   9,640  $   8,700
income

(a) We believe that core net interest income and purchase accounting accretion
    are useful in evaluating the components of net interest income.



The PNC Financial    Consolidated Financial Highlights (Unaudited)
Services Group, Inc.
                      Three months ended                 Year ended
                      December   September   December    December   December
                      31         30          31          31         31
                         2012    2012        2011           2012      2011
Performance Ratios
Net interest margin      3.85  %    3.82   %   3.86   %     3.94  %   3.92   %
(a)
Noninterest income       40         41         38           38        39
to total revenue
Efficiency (b)           70         65         77           68        64
Return on:
    Average common
    shareholders'        7.48       10.15      5.70         8.31      9.56
    equity
    Average assets       .95        1.23       .72          1.02      1.16
Business Segment
Income (Loss) (c)
(d)
In millions
Retail Banking (e)    $  121   $    192    $   62        $  596   $   371
Corporate &
Institutional            649        607        597          2,328     1,940
Banking (f)
Asset Management         34         37         25           145       168
Group
Residential Mortgage     (192)      36         (61)         (308)     89
Banking (g)
Non-Strategic Assets     59         40         (2)          237       200
Portfolio
Other, including
BlackRock (d) (h)        48         13         (128)        3         303
(i)
    Net income (j)    $  719   $    925    $   493       $  3,001 $   3,071

    Calculated as annualized taxable-equivalent net interest income divided by
    average earning assets. The interest income earned on certain earning
(a) assets is completely or partially exempt from federal income tax. As such,
    these tax-exempt instruments typically yield lower returns than taxable
    investments. To provide more meaningful comparisons of net interest
    margins for all earning assets, we use net interest income on a
    taxable-equivalent basis in calculating net interest margin by increasing
    the interest income earned on tax-exempt assets to make it fully
    equivalent to interest income earned on taxable investments. This
    adjustment is not permitted under generally accepted accounting principles
    (GAAP) in the Consolidated Income Statement. The taxable-equivalent
    adjustments to net interest income for the three months ended December 31,
    2012, September 30, 2012, and December 31, 2011 were $42 million, $36
    million, and $28 million, respectively. The taxable-equivalent adjustments
    to net interest income for the year ended December 31, 2012 and December
    31, 2011 were $144 million and $104 million, respectively.
(b) Calculated as noninterest expense divided by total
    revenue.
    Our business information is presented based on our internal management
    reporting practices. We periodically refine our internal methodologies as
    management reporting practices are enhanced. During the second quarter of
    2012, enhancements were made to the funds transfer pricing methodology.
    Retrospective application of our new funds transfer pricing methodology
    has been made to the prior period reportable business segment results and
    disclosures to create comparability to the current period presentation,
(c) which we believe is more meaningful to readers of our financial
    statements. During the third quarter of 2012, enhancements were made to
    certain assumptions used to estimate our total allowance for loan and
    lease losses (ALLL) and provision. The estimated impact as of the
    beginning of the third quarter 2012 was approximately an increase of $41
    million and a decrease of $55 million to the provision for credit losses
    of Retail Banking and Corporate & Institutional Banking, respectively.

    
    We consider BlackRock to be a separate reportable business segment but
(d) have combined its results with Other for this presentation. Our 2012 Form
    10-K will include additional information regarding BlackRock.
    Includes gains on sales of a portion of Visa Class B common shares in the
(e) third and fourth quarters of 2012. See page 3 for additional information
    related to these amounts.
(f) We consider a primary client relationship to be a corporate banking client
    relationship with annual revenue generation of $10,000 to $50,000 or more.
(g) Includes provisions for residential mortgage repurchase obligations. See
    page 3 for additional information related to these amounts.
    Includes earnings and gains or losses related to PNC's equity interest in
    BlackRock and residual activities that do not meet the criteria for
    disclosure as a separate reportable business, such as gains or losses
    related to BlackRock transactions, integration costs, asset and liability
    management activities including net securities gains or losses,
    other-than-temporary impairment of investment securities and certain
(h) trading activities, exited businesses, alternative investments including
    private equity, intercompany eliminations, most corporate overhead, tax
    adjustments that are not allocated to business segments and differences
    between business segment performance reporting and financial statement
    reporting (GAAP), including the presentation of net income attributable to
    noncontrolling interests as the segments' results exclude their portion of
    net income attributable to noncontrolling interests.
    Includes amounts for integration costs and noncash charges for unamortized
(i) discounts related to redemption of trust preferred securities. See page 3
    for additional information related to these amounts.
    Includes expenses for residential mortgage foreclosure-related matters.
    For 2011, these expenses have been allocated among the following:
(j) Residential Mortgage Banking, Non-Strategic Assets Portfolio and Other.
    For 2012, these expenses were only allocated to Residential Mortgage
    Banking. See page 3 for additional information related to these amounts.



The PNC Financial Services       Consolidated Financial Highlights (Unaudited)
Group, Inc.
                                       December      September   December 31
                                       31            30
                                       2012          2012           2011
Balance Sheet Data
Dollars in millions, except per
share data
Assets                              $  305,107     $ 300,803     $  271,205
Loans (a) (b)                          185,856       181,864        159,014
Allowance for loan and lease           4,036         4,039          4,347
losses (a)
Interest-earning deposits with         3,984         2,321          1,169
banks (a)
Investment securities (a)              61,406        62,814         60,634
Loans held for sale (b)        3,693         2,737          2,936
Goodwill and other intangible          10,869        10,941         10,144
assets
Equity investments (a) (c)             10,877        10,846         10,134
Noninterest-bearing deposits           69,980        64,484         59,048
Interest-bearing deposits              143,162       141,779        128,918
Total deposits                         213,142       206,263        187,966
Transaction deposits                   176,705       168,377        147,637
Borrowed funds (a)                     40,907        43,104         36,704
Shareholders' equity                   39,003        38,683         34,053
Common shareholders' equity            35,413        35,124         32,417
Accumulated other comprehensive        834           991            (105)
income (loss)
Book value per common share            67.05         66.41          61.52
Common shares outstanding              528           529            527
(millions)
Loans to deposits                      87        %   88        %    85       %
Client Assets (billions)
Discretionary assets under          $  112         $ 112         $  107
management
Nondiscretionary assets under          112           110            103
administration
Total assets under                     224           222            210
administration
Brokerage account assets               38            38             34
Total client assets                 $  262         $ 260         $  244
Capital Ratios
Tier 1 common (d)                      9.6       %   9.5       %    10.3     %
Tier 1 risk-based (d)                  11.7          11.7           12.6
Total risk-based (d)                   14.7          14.5           15.8
Leverage (d)                           10.4          10.4           11.1
Common shareholders' equity to         11.6          11.7           12.0
assets
Asset Quality
Nonperforming loans to total           1.75      %   1.88      %    2.24     %
loans
Nonperforming assets to total
loans, OREO and foreclosed             2.04          2.20           2.60
assets
Nonperforming assets to total          1.24          1.34           1.53
assets
Net charge-offs to average loans
(for the three months ended)           .67           .73            .83
(annualized)
Allowance for loan and lease           2.17          2.22           2.73
losses to total loans
Allowance for loan and lease
losses to nonperforming loans          124           118            122
(e)
Accruing loans past due 90 days     $  2,351       $ 2,456       $  2,973
or more (f)

    Amounts include consolidated variable interest entities. Our third quarter
(a) 2012 Form 10-Q included, and our 2012 Form 10-K will include, additional
    information regarding these Consolidated Balance Sheet line items.
    Amounts include assets for which we have elected the fair value option.
(b) Our third quarter 2012 Form 10-Q included, and our 2012 Form 10-K will
    include, additional information regarding these Consolidated Balance Sheet
    line items.
(c) Amounts include our equity interest in BlackRock.
(d) The ratios as of December 31, 2012 are estimated.
    The allowance for loan and lease losses includes impairment reserves
(e) attributable to purchased impaired loans. Nonperforming loans exclude
    certain government insured or guaranteed loans, loans held for sale, loans
    accounted for under the fair value option and purchased impaired loans.
    Excludes loans held for sale and purchased impaired loans. In the first
    quarter of 2012, we adopted a policy stating that home equity loans past
(f) due 90 days or more would be placed on nonaccrual status. Prior policy
    required that these loans be past due 180 days before being placed on
    nonaccrual status.

Cautionary Statement Regarding Forward-Looking Information

We make statements in this news release and related conference call, and we
may from time to time make other statements, regarding our outlook for
earnings, revenues, expenses, capital levels and ratios, liquidity levels,
asset levels, asset quality, financial position, and other matters regarding
or affecting PNC and its future business and operations that are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are typically identified by
words such as "believe," "plan," "expect," "anticipate," "see," "look,"
"intend," "outlook," "project," "forecast," "estimate," "goal," "will,"
"should" and other similar words and expressions. Forward-looking statements
are subject to numerous assumptions, risks and uncertainties, which change
over time.

Forward-looking statements speak only as of the date made. We do not assume
any duty and do not undertake to update forward-looking statements. Actual
results or future events could differ, possibly materially, from those
anticipated in forward-looking statements, as well as from historical
performance.

Our forward-looking statements are subject to the following principal risks
and uncertainties.

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

       oChanges in interest rates and valuations in debt, equity and other
         financial markets.
       oDisruptions in the liquidity and other functioning of U.S. and global
         financial markets.
       oThe impact on financial markets and the economy of any changes in the
         credit ratings 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, supranationals and
         financial institutions in Europe.
       oActions by Federal Reserve, U.S. Treasury and other government
         agencies, including those that impact money supply and market
         interest rates.
       oChanges in customers', suppliers' and other counterparties'
         performance and creditworthiness.
       oSlowing or failure of the current moderate economic expansion.
       oContinued 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.
       oChanges in customer preferences and behavior, whether due to changing
         business and economic conditions, legislative and regulatory
         initiatives, or other factors.

  oOur 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 moderate economic expansion will persist and interest rates
    will remain very low in 2013, despite drags from Federal fiscal restraint
    and a European recession. These forward-looking statements also do not,
    unless otherwise indicated, take into account the impact of potential
    legal and regulatory contingencies.
  oPNC's regulatory capital ratios in the future will depend on, among other
    things, the company's financial performance, the scope and terms of final
    capital regulations then in effect (particularly those implementing the
    Basel Capital Accords), and management actions affecting the composition
    of PNC's balance sheet. In addition, PNC's ability to determine, evaluate
    and forecast regulatory capital ratios, and to take actions (such as
    capital distributions) based on actual or forecasted capital ratios, will
    be dependent on the ongoing development, validation and regulatory
    approval of related models.
  oLegal and regulatory developments could have an impact on our 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:

       oChanges resulting from legislative and regulatory reforms, including
         major reform of the regulatory oversight structure of the financial
         services industry 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.
       oChanges to regulations governing bank capital and liquidity
         standards, including due to the Dodd-Frank Act and to Basel-related
         initiatives.
       oUnfavorable 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.
       oResults of the regulatory examination and supervision process,
         including our failure to satisfy requirements of agreements with
         governmental agencies.
       oImpact 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.

  oBusiness 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.
  oBusiness 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 its
    SEC filings.
  oOur 2012 acquisition of RBC Bank (USA) presents us with risks and
    uncertainties related to the integration of the acquired businesses into
    PNC, including:

       oAnticipated benefits of the transaction, 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.
       oOur ability to achieve anticipated results from this transaction is
         dependent also on the extent of credit losses in the acquired loan
         portfolios and the extent of deposit attrition, in part related to
         the state of economic and financial markets. Also, litigation and
         regulatory and other governmental investigations that may be filed or
         commenced relating to the pre-acquisition business and activities of
         RBC Bank (USA) could impact the timing or realization of anticipated
         benefits to PNC.
       oIntegration of RBC Bank (USA)'s business and operations into PNC may
         take longer than anticipated or be substantially 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 results in PNC entering several geographic
         markets where PNC did not previously have any meaningful retail
         presence.

  oIn addition to the 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 and other liabilities.
    These other acquisitions often present risks and uncertainties analogous
    to those presented by the RBC Bank (USA) transaction. Acquisition risks
    include those presented by the nature of the business acquired as well as
    risks and uncertainties related to the acquisition transactions
    themselves, regulatory issues, and the integration of the acquired
    businesses into PNC after closing.
  oCompetition 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
    the 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.
  oBusiness and operating results can also be affected by widespread natural
    and other disasters, dislocations, terrorist activities or international
    hostilities through impacts on the economy and financial markets generally
    or on us or our counterparties specifically.

We provide greater detail regarding these as well as other factors in our 2011
Form 10-K, as amended by Amendment No. 1 thereto, and our 2012 Form 10-Qs,
including in the Risk Factors and Risk Management sections and the Legal
Proceedings and Commitments and Guarantees Notes of the Notes to Consolidated
Financial Statements in those reports, and in our subsequent SEC filings. Our
forward-looking statements may also be subject to other risks and
uncertainties, including those we may discuss elsewhere in this news release
or in SEC filings, accessible on the SEC's website at www.sec.gov and on our
corporate website at www.pnc.com/secfilings. We have included these web
addresses as inactive textual references only. Information on these websites
is not part of this document.

CONTACTS:

MEDIA:
Fred Solomon
(412) 762-4550
corporate.communications@pnc.com

INVESTORS:
William H. Callihan
(412) 762-8257
investor.relations@pnc.com

SOURCE The PNC Financial Services Group, Inc.

Website: http://www.pnc.com
 
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