The PNC Financial Services Group, Inc. (NYSE: PNC) today reported first quarter 2001 earnings of $305 million or $1.03 per diluted share, excluding the cumulative effect of an accounting change, compared with $308 million or $1.03 per diluted share for the first quarter of 2000. Reported net income for the first quarter of 2001, which includes the effect of adopting the new accounting standard for derivatives, was $300 million or $1.01 per diluted share. Return on average common shareholders' equity was 18.82 percent and return on average assets was 1.62 percent for the first quarter of 2001 compared with 21.71 percent and 1.66 percent, respectively, for the first quarter of 2000. These results include the negative impact of a $27 million net loss from venture capital activities. Excluding this loss and the effect of the accounting change, first quarter 2001 results were $332 million or $1.12 per diluted share.
"PNC's diverse group of businesses is performing well in the face of a turbulent market and a slowing economy. I am pleased that our investments in asset management, processing and other growth businesses continue to fuel strong overall results for PNC," said James E. Rohr, president and chief executive officer of The PNC Financial Services Group. "We are also continuing to reposition our traditional lending businesses and strengthen our balance sheet even further. The actions taken during the first quarter are another important step in positioning PNC for an environment that we expect to remain quite challenging in the months ahead."
On January 31, 2001, PNC sold its residential mortgage banking business, which is reflected in its financial statements as discontinued operations. The recorded gain on sale and earnings from operations totaled $40 million after tax in the first quarter of 2001. These earnings were mostly offset by a $32 million after-tax charge related to the write-down of loans in the communications and energy, metals and mining portfolios that PNC has designated for exit and severance costs. The gain on sale of the residential mortgage banking business is subject to adjustment after final settlement is completed.
HIGHLIGHTS
* Asset management and processing businesses grew earnings 30 percent
compared with the first quarter of 2000 and increased to 28 percent of
total business earnings for the first quarter of 2001 compared with
23 percent in the first quarter of 2000.
* Excluding gains and losses from venture capital activities, noninterest
income grew 15 percent in the first quarter of 2001 compared with the
prior-year quarter and noninterest income to total revenue increased to
57 percent for the first quarter of 2001 compared with 53 percent a
year ago.
* Loans declined $5.0 billion from December 31, 2000 to $45.6 billion at
March 31, 2001 as a result of ongoing efforts to reduce balance sheet
leverage and lending revenue was 22 percent of total revenue in the
first quarter of 2001, one of the lowest in PNC's peer group.
* The loan to deposit ratio was 97 percent at March 31, 2001, down from
110 percent at March 31, 2000, and 121 percent at September 30, 1998
prior to the implementation of balance sheet downsizing initiatives.
FIRST QUARTER 2001 INCOME STATEMENT REVIEW
Taxable-equivalent net interest income of $559 million for the first quarter of 2001 remained relatively unchanged compared with the first quarter of 2000 as the impact of a higher level of earning assets was offset by a narrower net interest margin. The net interest margin was 3.62 percent for the first quarter of 2001 compared with 3.68 percent for the first quarter of 2000. The narrowing of the net interest margin was primarily due to a higher proportion of securities available for sale in the mix of earning assets.
The provision for credit losses was $80 million for the first quarter of 2001 compared with $31 million for the first quarter of 2000. The increase was primarily due to $41 million of additional provision for credit losses related to the write-down of loans in the communications and energy, metals and mining portfolios that PNC has designated for exit.
Noninterest income was $701 million for the first quarter of 2001 and included $39 million of equity management losses. Excluding equity management gains and losses in both years, noninterest income increased 15 percent compared with the first quarter of 2000 primarily due to growth in asset management and processing revenue.
Asset management fees of $223 million for the first quarter of 2001 increased $37 million or 20 percent compared with the first quarter of 2000 primarily driven by new business. Assets under management were $248 billion at March 31, 2001, a 13 percent increase compared with March 31, 2000. Fund servicing fees of $181 million for the first quarter of 2001 increased $26 million or 17 percent compared with the first quarter of 2000 primarily due to existing and new client growth. At March 31, 2001, PFPC provided accounting/administration services for $472 billion of pooled investment assets and provided custody services for $435 billion of customer assets. The comparable amounts were $448 billion and $425 billion, respectively, at March 31, 2000. PFPC serviced in excess of 44 million shareholder accounts at March 31, 2001 compared with 39 million a year ago.
Brokerage fees were $54 million for the first quarter of 2001 compared with $71 million for the first quarter of 2000. The decrease was primarily due to a decline in equity markets activity. Consumer services revenue of $55 million for the first quarter of 2000 increased $8 million or 17 percent compared with the prior-year quarter primarily due to an increase in retail transaction volume.
Corporate services revenue was $76 million for the first quarter of 2001 compared with $82 million for the first quarter of 2000 primarily due to lower capital markets revenue and other asset write-downs.
Equity management, which is comprised of venture capital activities, reflected losses of $39 million for the first quarter of 2001 compared with $87 million of income for the first quarter of 2000. The decrease primarily resulted from a decline in the estimated fair value of partnership and direct investments.
Net securities gains were $29 million for the first quarter of 2001 and were mostly offset by write-downs of other assets and e-commerce investments totaling $22 million that are reflected in corporate services and other income. Other noninterest income was $72 million for the first quarter of 2001 compared with $53 million for the first quarter of 2000. The increase was primarily due to residential mortgage loan securitizations and student loan sales.
Noninterest expense was $775 million and the efficiency ratio was 58 percent in the first quarter of 2001 compared with $792 million and 58 percent, respectively, during the first quarter of 2000.
Results from continuing operations were $265 million or $0.89 per diluted share for the first quarter of 2001. Excluding the loss from venture capital activities and costs related to downsizing initiatives, results from continuing operations were $324 million or $1.09 per diluted share. Earnings from continuing operations were $302 million or $1.01 per diluted share a year ago.
FIRST QUARTER 2001 BALANCE SHEET REVIEW
The Corporation has been pursuing a number of initiatives designed to improve the risk and return characteristics of its lending businesses. These include the sale of the residential mortgage banking and credit card businesses, exiting certain non-strategic institutional lending businesses and the continued downsizing of the indirect automobile lending portfolio. These actions have resulted in a reduction in the loan to deposit ratio to 97 percent at March 31, 2001, down from 121 percent at September 30, 1998 prior to the implementation of balance sheet downsizing initiatives.
Total assets were $71.0 billion at March 31, 2001 compared with $74.3 billion at March 31, 2000 prior to the sale of PNC's residential mortgage banking business. On the same basis, average interest-earning assets were $61.5 billion for the first quarter of 2001 compared with $65.0 billion for the first quarter of 2000. The decrease was primarily due to a $4.1 billion reduction in loans and loans held for sale that resulted from the sale of mortgage banking and other balance sheet downsizing initiatives.
Average deposits were $46.3 billion for the first quarter of 2001 compared with $44.3 billion in the first quarter of 2000 and represented 64 percent of total sources of funds in both periods. The increase in deposits primarily resulted from a number of strategic marketing initiatives to grow more valuable transaction accounts.
Average borrowed funds declined to $14.4 billion for the first quarter of 2001 compared with $20.1 billion for the first quarter of 2000 prior to the sale of PNC's residential mortgage banking business.
Shareholders' equity totaled $6.8 billion at March 31, 2001. The regulatory capital ratios are estimated to be 7.8 percent for leverage, 8.6 percent for tier I and 12.5 percent for total risk-based capital. During the first quarter of 2001, PNC repurchased 2.3 million shares of common stock. Common shares outstanding at March 31, 2001 were 288.9 million.
ASSET QUALITY REVIEW
The ratio of nonperforming assets to total loans, loans held for sale and foreclosed assets was .81 percent at March 31, 2001 compared with .71 percent at December 31, 2000 and .65 percent at March 31, 2000. The increase primarily resulted from a decrease in loans. Nonperforming assets were $386 million at March 31, 2001 compared with $372 million and $344 million at December 31, 2000 and March 31, 2000, respectively.
The allowance for credit losses was $675 million and represented 1.48 percent of period-end loans and 201 percent of nonperforming loans at March 31, 2001. The comparable ratios were 1.33 percent and 209 percent, respectively, at December 31, 2000 and 1.34 percent and 225 percent, respectively, at March 31, 2000. Net charge-offs were $80 million or .65 percent of average loans in the first quarter of 2001. The comparable amounts were $40 million or .32 percent, respectively, in the fourth quarter of 2000 and $31 million or .25 percent, respectively, in the first quarter of 2000. The increase was primarily due to a $41 million write-down of loans in the communications and energy, metals and mining portfolios that PNC has designated for exit. Excluding this amount, net charge-offs were $39 million or .32 percent of average loans for the first quarter of 2001.
BUSINESS RESULTS
Quarter ended March 31 - dollars in millions
Revenue Return on
Earnings (taxable- Assigned Capital
equivalent basis)
2001 2000 2001 2000 2001 2000
PNC Bank
Community Banking $162 $129 $542 $477 24% 20%
Corporate Banking 24 64 192 214 8 22
Total PNC Bank 186 193 734 691 19 21
Secured Finance
PNC Real Estate
Finance 20 13 53 46 21 14
PNC Business Credit 16 13 38 28 41 38
Total Secured
Finance 36 26 91 74 26 20
Total Banking 222 219 825 765 20 21
Asset Management
and Processing
PNC Advisors 44 41 199 204 32 30
BlackRock 25 19 134 108 26 26
PFPC 17 6 189 165 33 12
Total Asset
Management and
Processing 86 66 522 477 30 25
Total business
results 308 285 1,347 1,242 22 22
Other (43) 17 (87) 46
Results from
continuing
operations 265 302 1,260 1,288 17 21
Discontinued
operations 40 6
Results before
cumulative effect of
accounting change 305 308 1,260 1,288 19 22
Cumulative effect of
accounting change (5)
Total Consolidated $300 $308 $1,260 $1,288 19 22
Overall, businesses performed well during the first quarter of 2001 compared with the same period last year with the exception of Corporate Banking, which was negatively impacted by higher credit costs. Excluding Corporate Banking, total business earnings increased 29 percent compared with a year ago due to strong growth in Asset Management and Processing businesses, improved performance in Secured Finance and net securities gains in Community Banking.
PNC Bank -- Community Banking earned $162 million for the first quarter of 2001, an increase of 26 percent compared with the same quarter in 2000, primarily due to net securities gains and strong business growth. Excluding net securities gains in 2001 and net losses from last year, earnings increased 11 percent primarily driven by growth in deposits as well as higher noninterest income. Corporate Banking's earnings declined to $24 million for the first quarter of 2001 compared with $64 million for the first quarter of 2000 primarily due to $41 million of additional provision for credit losses related to the write-down of loans in the communications and energy, metals and mining portfolios that PNC has designated for exit.
Secured Finance -- PNC Real Estate Finance earned $20 million for the first quarter of 2001, a 54 percent increase compared with the prior-year quarter primarily due to higher commercial mortgage servicing revenue and growth in the affordable housing business. PNC Business Credit earned $16 million for the first quarter of 2001, a 23 percent increase compared with the first quarter of 2000 primarily due to an increase in noninterest income.
Asset Management and Processing -- PNC Advisors earned $44 million for the first quarter of 2001, a 7 percent increase compared with the first quarter of 2000 primarily driven by improved efficiency. Revenue growth attributable to new asset management business was more than offset by lower brokerage revenue. BlackRock earned $25 million for the first quarter of 2001, a 33 percent increase compared with the same period in 2000 primarily resulting from new business and strong fixed-income performance. PFPC's earnings were $17 million for the first quarter of 2001 compared with $6 million during the same period in 2000. The increase was primarily due to new and existing client growth. Cash earnings for PFPC, which exclude goodwill amortization, increased $11 million to $27 million.
Total business financial results differ from results from continuing operations primarily due to differences between management accounting practices and generally accepted accounting principles, divested and exited businesses in the prior year, equity management activities, minority interests, residual asset and liability management activities, eliminations and unassigned items, the impact of which is reflected in the "Other" category.
RECORDED COMMENTS ON FIRST QUARTER 2001 RESULTS
Recorded comments providing further information regarding the topics addressed in this earnings release will be available for one week, beginning at approximately 10:00 a.m. on April 19, by calling 1-800-753-8878. The recorded comments may include forward-looking information and are subject to the cautionary statements set forth below and elsewhere in this press release.
FORWARD-LOOKING STATEMENTS
This release and other statements that the Corporation may make may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to outlook for the second quarter 2001 and other future financial or business performance, conditions, strategies, expectations and goals. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "position," "target," "assume," "achievable," "potential," "strategy," "goal," "objective," "plan," "aspiration," "outlook," "outcome," "continue," "remain," "maintain," "strive," "trend," and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "may," or similar expressions. The Corporation cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. These forward-looking statements speak only as of the date of this press release, and the Corporation assumes no duty to update forward-looking statements. Actual results could differ materially from those anticipated in these forward-looking statements and future results could differ materially from historical performance.
The factors discussed elsewhere in this press release and the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: adjustments to recorded results of sale of residential mortgage banking business after final settlement is completed; decisions PNC makes with respect to the redeployment of available capital; changes in asset quality and credit risk; economic conditions; changes in financial and capital markets; the inability to sustain revenue and earnings growth; changes in interest rates; inflation; changes in values of assets under management and assets serviced; relative investment performance of assets under management; customer acceptance of PNC products and services; customer borrowing, repayment, investment, and deposit practices; customer disintermediation; valuation of debt and equity investments; the introduction, withdrawal, success and timing of business initiatives and strategies; the extent and cost of any share repurchases; decisions PNC makes with respect to further reduction of balance sheet leverage and potential investments in PNC businesses; competitive conditions; the inability to realize cost savings or revenue enhancements, implement integration plans and other consequences associated with mergers, acquisitions, restructurings and divestitures; and the impact, extent and timing of technological changes, capital management activities, and actions of the Federal Reserve Board and legislative and regulatory actions and reform. Further, an increase in the number of customer or counterparty delinquencies, bankruptcies, or defaults could result, among other things, in a higher loan loss provision and reduced profitability.
The Corporation's SEC reports, accessible on the SEC's website at http://www.sec.gov/ on PNC's website at http://www.pnc.com/ , identify additional factors that can affect forward-looking statements.
The PNC Financial Services Group, Inc., headquartered in Pittsburgh, is one of the nation's largest diversified financial services organizations, providing community banking, corporate banking, real estate finance, asset-based lending, wealth management, asset management and global fund services.
[TABULAR MATERIAL FOLLOWS]
Consolidated Financial Highlights
The PNC Financial Services Group, Inc.
For the three months ended - dollars March 31 Dec. 31 March 31
in millions, except per share data 2001 2000 2000
FINANCIAL PERFORMANCE
Revenue
Net interest income (taxable-
equivalent basis) $559 $538 $560
Noninterest income 701 735 728
Total revenue 1,260 1,273 1,288
Income from continuing operations 265 314 302
Discontinued operations 40 20 6
Income before cumulative effect of
accounting change 305 334 308
Cumulative effect of accounting
change (5)
Net income $300 $334 $308
Cash earnings from continuing
operations (a) $294 $344 $331
Cash earnings from discontinued
operations (a) 40 20 6
Cash earnings before cumulative
effect of accounting change (a) 334 364 337
Cash earnings from cumulative effect
of accounting change (a) (5)
Cash earnings from net income (a) $329 $364 $337
Per common share
Diluted earnings
Continuing operations $0.89 $1.06 $1.01
Discontinued operations .14 .07 .02
Diluted earnings before cumulative
effect of accounting change 1.03 1.13 1.03
Cumulative effect of accounting
change (.02)
Net income $1.01 $1.13 $1.03
Diluted cash earnings (a)
Continuing operations $1.00 $1.16 $1.11
Discontinued operations .14 .06 .02
Diluted cash earnings before
cumulative effect of accounting
change (a) 1.14 1.22 1.13
Cumulative effect of accounting
change (.02)
Net income $1.12 $1.22 $1.13
Cash dividends declared $0.48 $0.48 $0.45
SELECTED RATIOS
From continuing operations
Return on
Average common shareholders'
equity 16.59 % 20.10 % 21.29 %
Average assets 1.49 1.81 1.77
Net interest margin 3.62 3.60 3.68
Noninterest income to total revenue 55.63 57.74 56.52
Efficiency (b) 57.91 55.44 57.85
From net income
Return on
Average common shareholders'
equity 18.82 21.41 21.71
Average assets 1.62 1.72 1.66
Net interest margin 3.53 3.24 3.46
Noninterest income to total revenue 57.13 60.64 58.27
Efficiency (c) 56.18 53.09 57.36
(a) Excludes amortization of goodwill.
(b) Excludes amortization and distributions on capital securities.
(c) Excludes amortization, distributions on capital securities and
residential mortgage banking risk management activities.
Consolidated Financial Highlights
The PNC Financial Services Group, Inc.
For the three months
ended - dollars in March 31 Dec. 31 Sept. 30 June 30 March 31
millions 2001 2000 2000 2000 2000
BALANCE SHEET DATA
Assets $70,966 $69,844 $69,884 $68,885 $68,474
Earning assets 60,548 59,373 60,142 59,334 59,986
Loans, net of unearned
income 45,626 50,601 49,791 50,281 50,259
Securities available for
sale 11,976 5,902 6,490 5,315 5,906
Loans held for sale 1,765 1,655 2,127 2,305 2,799
Deposits 47,189 47,664 47,494 46,381 45,767
Borrowed funds 12,279 11,718 12,299 13,028 13,362
Shareholders' equity 6,781 6,656 6,383 6,157 6,039
Common shareholders'
equity 6,470 6,344 6,071 5,844 5,726
Book value per common
share 22.39 21.88 21.01 20.22 19.68
Loans to deposits .97 1.06 1.05 1.08 1.10
CAPITAL RATIOS
Leverage 7.80 % 8.03 % 6.87 % 6.72 % 6.67 %
Common shareholders'
equity to total assets 9.12 9.08 8.69 8.48 8.36
ASSET QUALITY RATIOS
Nonperforming assets to
total loans, loans held
for sale and foreclosed
assets .81 .71 .68 .67 .65
Allowance for credit
losses to total loans 1.48 1.33 1.36 1.34 1.34
Allowance for credit
losses to nonperforming
loans 200.89 208.98 219.16 217.04 224.67
Net charge-offs to
average loans .65 .32 .24 .27 .25
ANALYSIS OF FIRST QUARTER RESULTS
Per Diluted
In millions, except per share data Net Income Share
Net income $300 $1.01
Cumulative effect of accounting change 5 .02
Results before cumulative effect of accounting change 305 1.03
Venture capital activities 27 .09
332 1.12
Discontinued operations (40) (.14)
Loans designated for exit 27 .09
Severance costs 5 .02
Adjusted results $324 $1.09
Consolidated Statement of Income
The PNC Financial Services Group, Inc.
For the three months ended - dollars March 31 Dec. 31 March 31
in millions, except per share data 2001 2000 2000
Interest Income
Loans and fees on loans $981 $1,027 $984
Securities available for sale 122 96 94
Loans held for sale 37 41 64
Other 32 26 19
Total interest income 1,172 1,190 1,161
Interest Expense
Deposits 397 453 369
Borrowed funds 221 204 237
Total interest expense 618 657 606
Net interest income 554 533 555
Provision for credit losses 80 40 31
Net interest income less provision
for credit losses 474 493 524
Noninterest Income
Asset management 223 219 186
Fund servicing 181 167 155
Service charges on deposits 50 56 50
Brokerage 54 57 71
Consumer services 55 56 47
Corporate services 76 94 82
Equity management (39) 1 87
Net securities gains (losses) 29 16 (3)
Other 72 69 53
Total noninterest income 701 735 728
Noninterest Expense
Staff expense 421 410 411
Net occupancy 53 52 53
Equipment 57 59 56
Amortization 26 27 28
Marketing 9 22 13
Distributions on capital securities 17 17 16
Other 192 165 215
Total noninterest expense 775 752 792
Income from continuing operations
before income taxes 400 476 460
Income taxes 135 162 158
Income from continuing operations 265 314 302
Income from discontinued operations
(less applicable income taxes of $0,
$14, and $5) 40 20 6
Net income before cumulative effect
of accounting change 305 334 308
Cumulative effect of accounting
change (less applicable income taxes
of $2) (5)
Net income $300 $334 $308
Income from continuing operations
applicable to diluted earnings 261 310 297
Net income applicable to diluted
earnings 296 330 303
Earnings Per Common Share
Continuing operations
Basic $0.90 $1.07 $1.02
Diluted 0.89 1.06 1.01
Net income
Basic $1.02 $1.14 $1.04
Diluted 1.01 1.13 1.03
Cash Dividends Declared Per Common
Share .48 .48 .45
Average Common Shares Outstanding
Basic 289.2 289.2 291.9
Diluted 292.8 292.9 294.1
Details of Net Interest Income and Net Interest Margin
The PNC Financial Services Group, Inc.
Net Interest Income by Quarter
Taxable-equivalent basis
Three months ended March 31 Dec. 31 Sept. 30 June 30 March 31
- in millions 2001 2000 2000 2000 2000
Interest income
Loans and fees on loans $985 $1,031 $1,028 $1,013 $988
Securities available for sale 122 97 99 98 95
Loans held for sale 37 41 47 52 64
Other 33 26 30 22 19
Total interest income 1,177 1,195 1,204 1,185 1,166
Interest expense
Deposits 397 453 434 397 369
Borrowed funds 221 204 236 238 237
Total interest expense 618 657 670 635 606
Net interest income $559 $538 $534 $550 $560
Net Interest Margin by Quarter
Taxable-equivalent basis March 31 Dec. 31 Sept. 30 June 30 March 31
Three months ended 2001 2000 2000 2000 2000
Average yields/rates
Yield on earning assets
Loans and fees on loans 7.96 % 8.16 % 8.13 % 8.03 % 7.88 %
Securities available for
sale 6.08 6.53 6.41 6.50 6.22
Loans held for sale 7.31 8.32 8.77 8.11 7.64
Other 7.20 7.80 8.05 7.01 6.92
Total yield on
earning assets 7.67 7.99 7.98 7.86 7.68
Rate on interest-bearing
liabilities
Deposits 4.22 4.66 4.58 4.30 4.05
Borrowed funds 6.15 6.83 6.85 6.54 6.14
Total rate on
interest-bearing
liabilities 4.75 5.16 5.18 4.92 4.67
Interest rate spread 2.92 2.83 2.80 2.94 3.01
Impact of noninterest-
bearing sources .70 .77 .74 .69 .67
Net interest margin 3.62 % 3.60 % 3.54 % 3.63 % 3.68 %
Noninterest Income and Expense by Quarter
The PNC Financial Services Group, Inc.
Noninterest Income by Quarter
Three months ended March 31 Dec. 31 Sept. 30 June 30 March 31
- in millions 2001 2000 2000 2000 2000
Asset management $223 $219 $208 $196 $186
Fund servicing 181 167 168 164 155
Service charges on deposits 50 56 50 50 50
Brokerage 54 57 61 60 71
Consumer services 55 56 55 51 47
Corporate services 76 94 86 80 82
Equity management (39) 1 (3) 48 87
Net securities gains (losses) 29 16 7 (3)
Other 72 69 68 79 53
Total noninterest income $701 $735 $700 $728 $728
Noninterest income to total
revenue 55.63 % 57.74 % 56.73 % 56.96 % 56.52 %
Noninterest Expense by Quarter
Three months ended March 31 Dec. 31 Sept. 30 June 30 March 31
- in millions 2001 2000 2000 2000 2000
Staff expense $421 $410 $399 $396 $411
Net occupancy 53 52 50 48 53
Equipment 57 59 54 55 56
Amortization 26 27 27 28 28
Marketing 9 22 16 19 13
Distributions on capital
securities 17 17 17 17 16
Other 192 165 184 217 215
Total noninterest expense $775 $752 $747 $780 $792
Efficiency (a) 57.91 % 55.44 % 56.79 % 57.29 % 57.85 %
(a) Excludes amortization and distributions on capital securities.
Consolidated Balance Sheet
The PNC Financial Services Group, Inc.
March 31 Dec. 31 March 31
In millions, except par value 2001 2000 2000
Assets
Cash and due from banks $2,998 $3,662 $2,172
Short-term investments 853 1,151 967
Loans held for sale 1,765 1,655 2,799
Securities available for sale 11,976 5,902 5,906
Loans, net of unearned income of
$1,062, $999 and $724 45,626 50,601 50,259
Allowance for credit losses (675) (675) (674)
Net loans 44,951 49,926 49,585
Goodwill and other amortizable assets 2,437 2,468 2,482
Investment in discontinued operations 356 274
Other 5,986 4,724 4,289
Total assets $70,966 $69,844 $68,474
Liabilities
Deposits
Noninterest-bearing $8,431 $8,490 $8,019
Interest-bearing 38,758 39,174 37,748
Total deposits 47,189 47,664 45,767
Borrowed funds
Federal funds purchased 785 1,445 909
Repurchase agreements 830 607 136
Bank notes and senior debt 5,362 6,110 7,001
Federal Home Loan Bank borrowings 2,623 500 2,058
Subordinated debt 2,379 2,407 2,425
Other borrowed funds 300 649 833
Total borrowed funds 12,279 11,718 13,362
Other 3,869 2,958 2,458
Total liabilities 63,337 62,340 61,587
Mandatorily redeemable capital
securities of subsidiary trusts 848 848 848
Shareholders' Equity
Preferred stock 7 7 7
Common stock - $5 par value
Authorized 450 shares
Issued 353 shares 1,764 1,764 1,764
Capital surplus 1,323 1,303 1,285
Retained earnings 6,857 6,736 6,178
Deferred benefit expense (26) (25) (18)
Accumulated other comprehensive
income (loss) from continuing
operations 7 (43) (140)
Accumulated other comprehensive loss
from discontinued operations (45) (124)
Common stock held in treasury at
cost: 64, 63 and 62 shares (3,151) (3,041) (2,913)
Total shareholders' equity 6,781 6,656 6,039
Total liabilities, capital
securities and shareholders'
equity $70,966 $69,844 $68,474
Consolidated Average Balance Sheet Data by Quarter
The PNC Financial Services Group, Inc.
Three months ended - in March 31 Dec. 31 Sept. 30 June 30 March 31
millions 2001 2000 2000 2000 2000
Assets
Interest-earning assets
Loans held for sale $2,005 $1,991 $2,151 $2,577 $3,319
Securities available for
sale 8,061 5,928 6,179 6,009 6,128
Loans, net of unearned
income
Consumer 9,085 9,081 9,174 9,209 9,247
Residential mortgage 12,673 12,838 12,405 12,571 12,584
Commercial 20,882 21,109 21,800 22,042 21,791
Commercial real estate 2,580 2,670 2,688 2,682 2,698
Lease financing 3,897 3,639 3,238 3,049 2,958
Other 520 591 646 676 688
Total loans, net of
unearned income 49,637 49,928 49,951 50,229 49,966
Other 1,831 1,322 1,445 1,276 1,113
Total interest-earning
assets 61,534 59,169 59,726 60,091 60,526
Noninterest-earning assets 10,251 9,214 8,857 8,566 7,818
Investment in discontinued
operations 207 570 515 448 412
Total assets $71,992 $68,953 $69,098 $69,105 $68,756
Liabilities
Interest-bearing liabilities
Deposits
Demand and money
market $20,468 $19,762 $18,914 $18,549 $17,700
Savings 1,919 1,937 2,020 2,107 2,138
Retail certificates of
deposit 13,724 14,795 14,776 14,403 14,591
Other time 565 587 619 641 637
Deposits in foreign
offices 1,402 1,579 1,342 1,483 1,489
Total interest-bearing
deposits 38,078 38,660 37,671 37,183 36,555
Borrowed funds 14,375 11,738 13,518 14,422 15,333
Total interest-bearing
liabilities 52,453 50,398 51,189 51,605 51,888
Noninterest-bearing deposits 8,190 8,304 8,239 8,357 7,700
Other 3,830 2,978 2,637 2,290 2,393
Total liabilities 64,473 61,680 62,065 62,252 61,981
Mandatorily redeemable
capital securities of
subsidiary trusts 848 848 848 848 848
Shareholders' Equity 6,671 6,425 6,185 6,005 5,927
Total liabilities,
capital securities
and shareholders'
equity $71,992 $68,953 $69,098 $69,105 $68,756
Common Shareholders' Equity $6,360 $6,113 $5,873 $5,692 $5,614
Loan Portfolio and Nonperforming Assets by Quarter
The PNC Financial Services Group, Inc.
Loan Portfolio by Quarter
March 31 Dec. 31 Sept. 30 June 30 March 31
Period ended - in millions 2001 2000 2000 2000 2000
Consumer $9,049 $9,133 $9,174 $9,213 $9,173
Residential mortgage 8,806 13,264 12,563 12,470 12,711
Commercial 20,676 21,207 21,198 22,140 22,033
Commercial real estate 2,590 2,583 2,676 2,687 2,665
Lease financing 5,080 4,845 4,498 3,834 3,701
Other 487 568 646 669 700
Total loans 46,688 51,600 50,755 51,013 50,983
Unearned income (1,062) (999) (964) (732) (724)
Total loans, net of
unearned income $45,626 $50,601 $49,791 $50,281 $50,259
Nonperforming Assets by Type
March 31 Dec. 31 Sept. 30 June 30 March 31
Period ended - in millions 2001 2000 2000 2000 2000
Nonaccrual loans
Commercial $296 $312 $261 $259 $240
Commercial real estate 21 3 16 12 13
Residential mortgage 4 4 26 34 42
Consumer 3 2 3 3 3
Lease financing 6 2 2 3 2
Total nonaccrual loans 330 323 308 311 300
Troubled debt restructured
loans 6
Total nonperforming loans 336 323 308 311 300
Foreclosed and other assets
Commercial real estate 2 3 4 4 5
Residential mortgage 7 8 8 9 8
Other 41 38 34 29 31
Total foreclosed and other
assets 50 49 46 42 44
Total nonperforming
assets $386 $372 $354 $353 $344
Nonperforming Assets by Business
March 31 Dec. 31 Sept. 30 June 30 March 31
Period ended - in millions 2001 2000 2000 2000 2000
PNC Bank
Community Banking $61 $47 $82 $96 $104
Corporate Banking 210 219 156 153 160
Secured Finance
PNC Real Estate Finance 25 9 22 19 22
PNC Business Credit 33 36 32 22 2
PNC Advisors 4 2 6 8 8
Other 53 59 56 55 48
Total nonperforming
assets $386 $372 $354 $353 $344
The PNC Financial Services Group, Inc.
Asset Quality Data
Allowance For Credit Losses
Three months ended March 31 Dec. 31 Sept. 30 June 30 March 31
- in millions 2001 2000 2000 2000 2000
Beginning balance $675 $675 $675 $674 $674
Charge-offs
Consumer (10) (12) (11) (11) (12)
Residential mortgage (4) (1) (1) (2)
Commercial (78) (35) (27) (30) (29)
Commercial real estate (1) (2)
Lease financing (3) (3) (2) (1) (2)
Total charge-offs (91) (55) (43) (43) (45)
Recoveries
Consumer 5 6 5 5 6
Residential mortgage 1 1
Commercial 6 7 4 3 7
Commercial real estate 4
Lease financing 1 1
Total recoveries 11 15 13 9 14
Net charge-offs
Consumer (5) (6) (6) (6) (6)
Residential mortgage (3) (1) (2)
Commercial (72) (28) (23) (27) (22)
Commercial real estate (1) 2
Lease financing (3) (2) (2) (1) (1)
Total net charge-offs (80) (40) (30) (34) (31)
Provision for credit losses 80 40 30 35 31
Ending balance $675 $675 $675 $675 $674
NewsCom: http://www.newscom.com/cgi-bin/prnh/20000307/PHTU015
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, 888-776-6555 or 201-369-3467
SOURCE: PNC Financial Services Group
Contact: R. Jeep Bryant, Media, 412-762-4550, or
corporate.communications@pnc.com, or William H. Callihan, Investors,
412-762-8257, or investor.relations@pnc.com, both of PNC Financial Services
Group
Website: http://www.pnc.com/
Company News On-Call: http://www.prnewswire.com/comp/701257.html or fax,
800-758-5804, ext. 701257
