The PNC Financial Services Group, Inc. (PNC) 8-K Fourth Quarter and Full Year 2007

The PNC Financial Services Group, Inc.

Fourth

Quarter 2007

Earnings Conference Call

January 17, 2008

Exhibit 99.2

This presentation contains forward-looking statements regarding our outlook or expectations relating to PNC’s future business, operations, financial

condition, financial performance and asset quality.  Forward-looking statements are necessarily subject to numerous assumptions, risks and

uncertainties, which change over time.

The forward-looking statements in this presentation are qualified by the factors affecting forward-looking statements identified in the more detailed

Cautionary

Statement

included

in

the

Appendix,

which

is

included

in

the

version

of

the

presentation

materials

posted

on

our

corporate

website

at

www.pnc.com/investorevents.

We

provide

greater

detail

regarding

these

factors

in

our

2006

Form

10-K,

including

in

the

Risk

Factors

and

Risk

Management sections, and in our third quarter 2007 Form 10-Q and other SEC reports (accessible on the SEC’s website at www.sec.gov and on or

through our corporate website at www.pnc.com/secfilings).

Future events or circumstances may change our outlook or expectations and may also affect the nature of the assumptions, risks and uncertainties

to which our forward-looking statements are subject.  The forward-looking statements in this presentation speak only as of the date of this

presentation.

We

do

not

assume

any

duty

and

do

not

undertake

to

update

those

statements.

In this presentation, we will sometimes refer to adjusted results to help illustrate the impact of the deconsolidation of BlackRock near the end of

third quarter 2006 and the impact of certain types of items.  Adjusted results reflect, as applicable, the following types of adjustments:  (1) 2006

and

earlier

periods

reflect

the

impact

of

the

deconsolidation

of

BlackRock

by

adjusting

as

if

we

had

recorded

our

BlackRock

investment

on

the

equity

method prior to its deconsolidation;  (2) adjusting 2006 to exclude the impact of the third quarter 2006 gain on the BlackRock/MLIM transaction and

losses

on

the

repositioning

of

PNC’s

securities

and

mortgage

loan

portfolios;

(3)

adjusting

fourth

quarter

2006

and

the

2007

periods

to

exclude

the

net

mark-to-market

adjustments

on

PNC’s

remaining

BlackRock

LTIP

shares

obligation

and,

as

applicable,

the

gain

PNC

recognized

in

first

quarter

2007

in

connection

with

the

company’s

transfer

of

BlackRock

shares

to

satisfy

a

portion

of

its

BlackRock

LTIP

shares

obligation;

(4)

adjusting

all

2007 and 2006 periods to exclude, as applicable, integration costs related to acquisitions and to the BlackRock/MLIM transaction;  (5) adjusting

2007

periods,

as

applicable,

for

the

fourth

quarter

2007

Visa

litigation

charge;

and

(6)

adjusting,

as

appropriate,

for

the

tax

impact

of

these

adjustments.  We have provided these adjusted amounts and reconciliations so that investors, analysts, regulators and others will be better able to

evaluate the impact of these items on our results for the periods presented, in addition to providing a basis of comparability for the impact of the

BlackRock

deconsolidation

given

the

magnitude

of

the

impact

of

deconsolidation

on

various

components

of

our

income

statement

and

balance

sheet.

We

believe

that

information

as

adjusted

for

the

impact

of

the

specified

items

may

be

useful

due

to

the

extent

to

which

these

items

are

not

indicative

of our ongoing operations as the result of our management activities on those operations.  While we have not provided other adjustments for the

periods

discussed,

this

is

not

intended

to

imply

that

there

could

not

have

been

other

similar

types

of

adjustments,

but

any

such

adjustments

would

not have been similar in magnitude to the amount of the adjustments shown.  In certain discussions, we may also provide revenue information on a

taxable-equivalent basis by increasing the interest income earned on tax-exempt assets to make it fully equivalent to interest income earned on

taxable investments.  We believe this adjustment may be useful when comparing yields and margins for all earning assets.

This presentation may also include a discussion of other non-GAAP financial measures, which, to the extent not so qualified therein or in the

Appendix, is qualified by GAAP reconciliation information available on our corporate website at www.pnc.com under “About PNC–Investor Relations.”

Cautionary Statement Regarding Forward-Looking

Information and Adjusted Information

Strong organic client growth

Expenses well-contained

Solid business segment results in an uncertain time

Asset quality migrating, as expected, and at a manageable pace

Well-positioned balance sheet

Successful Mercantile integration

Unprecedented market volatility impacts 4Q07 results

2008 -

Focus on maximizing the franchise

2007 Performance Leaves PNC

Well-Positioned for the Future

Execution Results in a Good Year Despite a Difficult Environment

Key Take-Aways

Executing on Our Strategy Delivers

Differentiated Results

Delivered solid results with diverse revenue streams in a

period of extreme market volatility

Continued to create positive operating leverage on a full

year adjusted basis²

Maintained a moderate risk profile and balance sheet

flexibility

(1)

Adjusted fourth quarter 2007 and full year 2007 earnings are reconciled to GAAP earnings in the Appendix.

(2)

GAAP basis operating leverage for the full year 2007 period was negative primarily due to the impact of the 2006 gain from the

BlackRock/MLIM transaction and is reconciled in the Appendix.

2007

4Q07

$5.05

$1.07

Adjusted diluted EPS¹

$4.35

$0.52

Reported diluted EPS

$7

$6

$5

$4

$3

$2

$1

$0

+10%

+34%

+25%

+18%

Growing High Quality, Diverse

Revenue Streams

Total Revenue Growth

(1)

Adjusted amounts are reconciled to GAAP amounts in the Appendix.

(2)

Unadjusted 2006 mix:  noninterest income 74%, deposit net interest income 16%, loan net interest income 10%.

Unadjusted 2007 mix:  noninterest income 56%, deposit net interest income 27%, loan net interest income 17%.

(3)

Unadjusted % change: total revenue (22%), noninterest income (40%), deposit net interest income 34%, loan net interest income 24%.

2007 vs 2006

1,3

2006 Mix

2006 Mix

Adjusted Revenue Mix for the Year Ended

1,2

2007 Mix

2007 Mix

Noninterest

Income

62%

Deposit NII

23%

Loan NII

15%

Noninterest

Income

57%

Deposit NII

27%

Loan NII

16%

$0

$1

$2

$3

$4

$5

$6

$7

Revenue

+9%

Creating Positive Operating Leverage

Growing Revenues Faster Than Expenses

Adjusted Revenue

(as reported

$5.5 billion, $6.3 billion, $8.6 billion, $6.7 billion for 2004,

2005, 2006, 2007, respectively)

Adjusted Noninterest

Expense

(as reported $3.7 billion, $4.3 billion, $4.4 billion, $4.3 billion for 2004, 2005, 2006, 2007, respectively)

Adjusted Net Income

(as reported $1.2 billion, $1.3 billion, $2.6 billion, $1.5 billion for 2004, 2005, 2006, 2007, respectively)

$1.2

$1.3

$1.5

(1)

As reported: revenue 24%, expense 9%, operating leverage 15%, net income 47%. 

(2)

As reported: revenue (22%), expense (3%), operating leverage (19%), net income (43%). 

(3)

Adjusted amounts are reconciled to GAAP amounts in the Appendix.

2004

2005

2006

Expense

+7%

Net Income

+12%

Compound Annual Growth

(2004-2006, as adjusted)

1,3

Revenue

+18%

Expense

+15%

Net Income

+12%

2006-2007

As adjusted

2,3

Operating

Leverage

+2%

Operating

Leverage

+3%

$1.7

2007

Maintaining a Moderate Risk Profile

Credit decisions driven by

risk-adjusted returns

Minimal exposure to

subprime mortgages, high-

yield bridge and leveraged

finance loans

Relatively low commercial

real estate exposure

Highly granular portfolio

Credit quality migrating at

a manageable pace

Asset Quality

Active balance sheet

management style

Duration of equity of 2.1

years

Very liquid balance sheet

Low loans to deposits ratio

with a low cost deposit

base

Relatively large securities

book

High fee income to total

revenue

Interest Rate Risk

Shift to Tier 1 capital

benchmark

Earnings growth creates

capital flexibility

Dividends

Share repurchase, where

appropriate

Access to capital markets

Capital Management

Cautionary Statement Regarding

Forward-Looking Information

Appendix

We

make

statements

in

this

presentation,

and

we

may

from

time

to

time

make

other

statements,

regarding

our

outlook

or

expectations

for

earnings, revenues, expenses and/or other matters regarding or affecting PNC 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,”

“expect,”

“anticipate,”

“intend,”

“outlook,”

“estimate,”

“forecast,”

“will,”

“project”

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 they are made.  We do not assume any duty and do not undertake to update our forward-looking statements.  Because

forward-looking

statements

are

subject

to

assumptions

and

uncertainties,

actual

results

or

future

events

could

differ,

possibly

materially,

from

those that we anticipated in our forward-looking statements, and future results could differ materially from our historical performance.

Our forward-looking statements are subject to the following principal risks and uncertainties.  We provide greater detail regarding some of these

factors in our Form 10-K for the year ended December 31, 2006, including in the Risk Factors and Risk Management sections of that report, and in

our third quarter 2007 Form 10-Q and other SEC reports.  Our forward-looking statements may also be subject to other risks and uncertainties,

including those that we may discuss elsewhere in this presentation or in our filings with the SEC, accessible on the SEC’s website at www.sec.gov

and on or through our corporate website at www.pnc.com/secfilings.

•Our businesses and financial results are affected by business and economic conditions, both generally and specifically in the principal markets in

which we operate.  In particular, our businesses and financial results may be impacted by:

•Changes

in

interest

rates

and

valuations

in

the

debt,

equity

and

other

financial

markets.

•Disruptions in the liquidity and other functioning of financial markets, including such disruptions in the markets for real estate and other

assets commonly securing financial products.

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

•Changes in our customers’, suppliers’

and other counterparties’

performance in general and their creditworthiness in particular.

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

•A continuation of recent turbulence in significant portions of the global financial markets could impact our performance, both directly by affecting

our revenues and the value of our assets and liabilities and indirectly by affecting the economy generally.

•Our operating results are affected by our liability to provide shares of BlackRock common stock to help fund certain BlackRock long-term incentive

plan (“LTIP”) programs, as our LTIP liability is adjusted quarterly (“marked-to-market”) based on changes in BlackRock’s common stock price and

the number of remaining committed shares, and we recognize gain or loss on such shares at such times as shares are transferred for payouts

under the LTIP programs.

•Competition can have an impact on customer acquisition, growth and retention, as well as on our credit spreads and product pricing, which can

affect market share, deposits and revenues.

•Our ability to implement our business initiatives and strategies

could affect our financial performance over the next several years.

•Legal and regulatory developments could have an impact on our ability to operate our businesses or our financial condition or results of operations

or our competitive position or reputation.  Reputational impacts, in turn, could affect matters such as business generation and retention, our ability

to

attract

and

retain

management,

liquidity,

and

funding.

These

legal

and

regulatory

developments

could

include:

(a)

the

unfavorable

resolution

of legal proceedings or regulatory and other governmental inquiries;  (b) increased litigation risk from recent regulatory and other governmental

developments;

(c)

the

results

of

the

regulatory

examination

process,

our

failure

to

satisfy

the

requirements

of

agreements

with

governmental

agencies, and regulators’

future use of supervisory and enforcement tools;  (d) legislative and regulatory reforms, including changes to laws and

regulations

involving

tax,

pension,

education

lending,

and

the

protection

of

confidential

customer

information;

and

(e)

changes

in

accounting

policies and principles.

•Our business and operating results are affected by our ability to identify and effectively manage risks inherent in our businesses, including, where

appropriate, through the effective use of third-party insurance, derivatives, and capital management techniques.

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

competitive demands.

•The adequacy of our intellectual property protection, and the extent of any costs associated with obtaining rights in intellectual property claimed

by others, can impact our business and operating results.

•Our business and operating results can also be affected by widespread natural disasters, terrorist activities or international hostilities, either as a

result

of

the

impact

on

the

economy

and

capital

and

other

financial

markets

generally

or

on

us

or

on

our

customers,

suppliers

or

other

counterparties specifically.

•Also, risks and uncertainties that could affect the results anticipated in forward-looking statements or from historical performance relating to our

equity interest in BlackRock, Inc. are discussed in more detail in BlackRock’s filings with the SEC, including in the Risk Factors sections of

BlackRock’s reports.  BlackRock’s SEC filings are accessible on the SEC’s website and on or through BlackRock’s website at www.blackrock.com.

We

grow

our

business

from

time

to

time

by

acquiring

other

financial

services

companies,

including

our

pending

Sterling

Financial

Corporation

(“Sterling”)

acquisition.

Acquisitions

in

general

present

us

with

risks

in

addition

to

those

presented

by

the

nature

of

the

business

acquired.

In

particular, acquisitions may be substantially more expensive to complete (including as a result of costs incurred in connection with the integration

of

the

acquired

company)

and

the

anticipated

benefits

(including

anticipated

cost

savings

and

strategic

gains)

may

be

significantly

harder

or

take

longer to achieve than expected.  In some cases, acquisitions involve our entry into new businesses or new geographic or other markets, and these

situations

also

present

risks

resulting

from

our

inexperience

in

these

new

areas.

As

a

regulated

financial

institution,

our

pursuit

of

attractive

acquisition opportunities could be negatively impacted due to regulatory delays or other regulatory issues.  Regulatory and/or legal issues related to

the pre-acquisition operations of an acquired business may cause reputational harm to PNC following the acquisition and integration of the acquired

business into ours and may result in additional future costs arising as a result of those issues.

Any annualized, proforma, estimated, third party or consensus numbers in this presentation are used for illustrative or comparative purposes only

and may not reflect actual results.  Any consensus earnings estimates are calculated based on the earnings projections made by analysts who cover

that company.  The analysts’

opinions, estimates or forecasts (and therefore the consensus earnings estimates) are theirs alone, are not those of

PNC or its management, and may not reflect PNC’s, Sterling’s or other company’s actual or anticipated results.

Cautionary Statement Regarding

Forward-Looking Information (continued)

Appendix

The PNC Financial Services Group, Inc. and Sterling Financial Corporation (“Sterling”) will be filing a proxy

statement/prospectus

and

other

relevant

documents

concerning

the

merger

with

the

United

States

Securities

and

Exchange

Commission

(the

“SEC”).

WE

URGE

INVESTORS

TO

READ

THE

PROXY STATEMENT/PROSPECTUS

AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR

INCORPORATED BY REFERENCE IN THE PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN

IMPORTANT INFORMATION.

Investors will be able to obtain these documents free of charge at the SEC’s web site at http://www.sec.gov.  In

addition, documents filed with the SEC by The PNC Financial Services Group, Inc. will be available free of charge

from Shareholder Relations at (800) 843-2206.  Documents filed with the SEC by Sterling will be available free of

charge from Sterling by contacting Shareholder Relations at (877) 248-6420.

The directors, executive officers, and certain other members of management and employees of Sterling are

participants in the solicitation of proxies in favor of the merger from the shareholders of Sterling.  Information

about the directors and executive officers of Sterling is included in the proxy statement for its May 8, 2007

annual meeting of shareholders, which was filed with the SEC on April 2, 2007.  Additional information regarding

the

interests

of

such

participants

will

be

included

in

the

proxy

statement/prospectus

and

the

other

relevant

documents filed with the SEC when they become available.

Additional Information About The PNC/Sterling

Financial Corporation Transaction

Appendix

Non-GAAP to GAAP

Reconcilement

Earnings Summary

Appendix

THREE MONTHS ENDED

In millions, except per share data

Adjustments,

Net

Diluted

Adjustments,

Net

Diluted

Adjustments,

Net

Diluted

Pretax

Income

EPS

Pretax

Income

EPS

Pretax

Income

EPS

Net income, as reported

$178

$0.52

$407

$1.19

$376

$1.27

Adjustments:

   BlackRock LTIP (a)

$128

84

.24

$50

32

.09

$12

7

.02

   Visa indemnification (b)

82

53

.16

   Integration costs (c)

79

50

.15

43

30

.09

10

8

.03

Net income, as adjusted

$365

$1.07

$469

$1.37

$391

$1.32

YEAR ENDED

Adjustments,

Net

Diluted

Adjustments,

Net

Diluted

In millions, except per share data

Pretax

Income

EPS

Pretax

Income

EPS

Net income, as reported

$1,467

$4.35

$2,595

$8.73

Adjustments:

  BlackRock LTIP (a)

$127

83

.24

$12

7

.02

  Visa indemnification (b)

82

53

.16

  Integration costs (c)

151

99

.30

101

47

.16

  Gain on BlackRock/MLIM transaction (d)

(2,078)

(1,293)

(4.36)

  Securities portfolio rebalancing loss (d)

196

127

.43

  Mortgage loan portfolio repositioning loss (d)

48

31

.10

Net income, as adjusted

$1,702

$5.05

$1,514

$5.08

(d) Included in noninterest income on a pretax basis.

December 31, 2006

(b)

Our

payment

services

business

issues

and

acquires

credit

and

debit

card

transactions

through

Visa

U.S.A.

Inc.

card

association

or

its

affiliates

(“Visa”).

In

October

2007,

Visa

completed

a

restructuring

and

issued

shares

of

Visa

Inc.

common

stock

to

its

financial

institution

members

in

contemplation

of

its

initial

public

offering

(“IPO”)

currently

anticipated

in

the

first

quarter

of

2008

(the

“Visa

Reorganization”).

As

part

of

the

Visa

Reorganization,

we

received

our

proportionate

share

of

a

class

of

Visa

Inc.

common

stock

allocated

to

the

U.S.

members.

Visa

expects

that

a

portion

of

these

shares

will

be

redeemed

for

cash

out

of

the

proceeds

of

the

IPO.

The

U.S.

members

are

obligated

to

indemnify

Visa

for

judgments

and

settlements

related

to

specified

litigation.

Visa

will

set

aside

a

portion

of

the

proceeds

from

the

IPO

in

an

escrow

account

for the benefit of the U.S. member financial institutions to fund the expenses of the litigation as well as the members' proportionate share of any judgments or settlements that may arise out of the litigation.

December 31, 2007

September 30, 2007

December 31, 2006

December 31, 2007

(a)

Includes

the

impact

of

the

gain

recognized

in

connection

with

PNC's

transfer

of

BlackRock

shares

to

satisfy

a

portion

of

our

BlackRock

LTIP

shares

obligation

and

the

net

mark-to-market

adjustment

on

our

remaining BlackRock LTIP shares obligation, as applicable.

In

accordance

with

GAAP,

we

recorded

a

liability

and

operating

expense

totaling

$82

million

before

taxes

in

the

fourth

quarter

of

2007

representing

our

estimate

of

the

fair

value

of

our

indemnification

obligation

for

potential

losses

arising

from

this

litigation.

Our

estimate

is

based

on

publicly

available

information

and

other

information

made

available

to

all

of

the

affected

Visa

members

and

does

not

reflect

any

direct

knowledge

of

the

relative

strengths

and

weaknesses

of

the

litigation

still

pending

or

the

status

of

any

on-going

settlement

discussions.

We

believe

that

the

IPO

will

be

completed

and

cash

will

be

available

through

the

escrow

to

satisfy

litigation

settlements.

In

addition,

based

on

estimates

provided

by

Visa

regarding

its

planned

IPO,

we

believe

that

our

ownership

interest

in

Visa

has

a

value

significantly

in

excess

of

our

indemnification

liability.

Our

Visa

shares

will

not

generally

be

transferable

until

they

can

be

converted

into

shares

of

the

publicly

traded

class

of

stock,

which

cannot

happen

until

the

later

of

three

years

after

the

IPO

or

settlement

of all of the specified litigation.

(c)

In

addition

to

integration

costs

related

to

recent

or

pending

PNC

acquisitions

reflected

in

the

2007

periods,

the

first

three

quarters

of

2007

and

all

2006

periods

include

BlackRock/MLIM

integration

costs.

BlackRock/MLIM

integration

costs

recognized

by

PNC

in

the

first

three

quarters

of

2007

and

the

fourth

quarter

of

2006

were

included

in

noninterest

income

as

a

negative

component

of

the

"Asset

management"

line

item, which includes the impact of our equity earnings from our investment in BlackRock. For the first nine months of 2006, BlackRock/MLIM transaction integration costs were included in noninterest expense.

Non-GAAP to GAAP

Reconcilement

Income Statement Summary –

For the year ended

Appendix

Year ended

In millions

As Reported 

Adjustments

As Adjusted (a) 

As Reported 

Adjustments

As Adjusted (b)

Net interest income

$2,915

$2,915

$2,245

($10)

$2,235

Net interest income:

% Change As

Reported

% Change As

Adjusted

Loans

1,110

1,110

895

(10)

885

24%

25%

Deposits

1,805

1,805

1,350

1,350

34%

34%

Noninterest

Income

3,790

$131

3,921

6,327

(2,755)

3,572

(40%)

10%

Total revenue

6,705

131

6,836

8,572

(2,765)

5,807

(22%)

18%

Loan net interest income as a % of total revenue

16.6%

16.2%

10.4%

15.2%

Deposit net interest income as a % of total revenue

26.9%

26.4%

15.7%

23.2%

Noninterest

income as a % of total revenue

56.5%

57.4%

73.8%

61.5%

Provision for credit losses

315

(45)

270

124

124

Noninterest

income

3,790

131

3,921

6,327

(2,755)

3,572

Noninterest

expense

4,296

(184)

4,112

4,443

(856)

3,587

(3%)

15%

Income before minority interest

and income taxes

2,094

360

2,454

4,005

(1,909)

2,096

Minority interest in income

of BlackRock

47

(47)

Income taxes

627

125

752

1,363

(781)

582

Net income

$1,467

$235

$1,702

$2,595

($1,081)

$1,514

(43%)

12%

Operating Leverage -

Year Ended

As Reported

As Adjusted

Total revenue

(22%)

18%

Noninterest expense

(3%)

15%

Operating leverage 

(19%)

3%

(a)

Amounts

adjusted

to

exclude

the

impact

of

the

following

pretax

items:

(1)

the

gain

of

$83

million

recognized

in

connection

with

PNC's

transfer

of

BlackRock

shares

to

satisfy

a

portion

of

our

BlackRock

LTIP

shares

obligation,

(2)

the

net

mark-to-market

adjustment

totaling

$210

million

on

our

remaining

BlackRock

LTIP

shares

obligation,

(3)

acquisition

integration

costs

totaling

$151 million, and (4) Visa indemnification charge of $82 million. The net tax impact of these items is reflected in the adjustment to income taxes.

(b)

Amounts

adjusted

to

exclude

the

impact

of

the

following

pretax

items:

$2,078

million

gain

on

BlackRock/MLIM

transaction,

$196

million

securities

portfolio

rebalancing

loss,

$101

million

of

BlackRock/MLIM

transaction

integration

costs,

$48

million

mortgage

loan

portfolio

repositioning

loss,

and

$12

million

net

loss

related

to

our

BlackRock

LTIP

shares

obligation.

The

net

tax

impact of these items is reflected in the adjustment to income taxes.

2006 to 2007 Change

December 31, 2007

December 31, 2006

Non-GAAP to GAAP

Reconcilement

Income Statement Summary –

For the three months ended

Appendix

For the three months ended December 31, 2007

PNC

PNC

In millions

As Reported

Adjustments (a)

As Adjusted

Reported

Adjusted

Net interest income

$793

$793

Loan net interest income

304

304

3%

3%

Deposit net interest income

489

489

5%

5%

Provision for credit losses

188

($45)

143

Net interest income less provision for credit losses

605

(45)

650

Asset management

225

(1)

224

Other

609

128

737

Total noninterest

income

834

127

961

(16%)

(8%)

Compensation and benefits

553

(10)

543

Other

660

(107)

553

Total noninterest

expense

1,213

(117)

1,096

10%

4%

Income before income taxes

226

289

515

Income taxes

48

102

150

Net income

$178

$187

$365

(56%)

(22%)

For the three months ended September 30, 2007

PNC

PNC

In millions

As Reported

Adjustments (b)

As Adjusted

Net interest income

$761

$761

Loan net interest income

294

294

Deposit net interest income

467

467

Provision for credit losses

65

65

Net interest income less provision for credit losses

696

696

Asset management

204

$2

206

Other

786

50

836

Total noninterest

income

990

52

1,042

Compensation and benefits

553

(16)

537

Other

546

(25)

521

Total noninterest expense

1,099

(41)

1,058

Income before income taxes

587

93

680

Income taxes

180

31

211

Net income

$407

$62

$469

% Change vs. Sept 30, 2007

(a)

Amounts

adjusted

to

exclude

the

impact

of

the

following

items

on

a

pretax

basis:

$128

million

net

loss

related

to

our

BlackRock/LTIP

shares

obligation,

$82

million

Visa indemnification charge, and $79 million of acquisition integration costs.  The net tax impact of these items is reflected in the adjustment to income taxes.

(b)

Amounts

adjusted

to

exclude

the

impact

of

the

following

items

on

a

pretax

basis:

$50

million

net

loss

related

to

our

BlackRock/LTIP

shares

obligation

and

$43

million

of acquisition integration costs.  The net tax impact of these items is reflected in the adjustment to income taxes.

Non-GAAP to GAAP

Reconcilement

Income Statement Summary –

2004 to 2007

Appendix

For the year ended December 31, 2007

PNC

PNC

In millions

As Reported 

Adjustments (a)

As Adjusted

Net interest income

$2,915

$2,915

Provision for credit losses

315

$(45)

270

Noninterest income

3,790

131

3,921

Noninterest expense

4,296

(184)

4,112

     Income before income taxes

2,094

360

2,454

Income taxes

627

125

752

     Net income

$1,467

$235

$1,702

BlackRock

For the year ended December 31, 2006

PNC

Deconsolidation and

BlackRock

PNC

In millions

As Reported

Adjustments (a)

Other Adjustments

Equity Method

As Adjusted

Net interest income

$2,245

$(10)

$2,235

Provision for credit losses

124

124

Noninterest income

6,327

$(1,812)

(1,087)

$144

3,572

Noninterest expense

4,443

(91)

(765)

3,587

Income before minority interest and income taxes

4,005

(1,721)

(332)

144

2,096

Minority interest in income of BlackRock

47

18

(65)

Income taxes

1,363

(658)

(130)

7

582

   Net income

$2,595

$(1,081)

$(137)

$137

$1,514

(a)

Includes

the

impact

of

the

following

pretax

items:

$2,078

million

gain

on

BlackRock/MLIM

transaction,

$196

million

securities

portfolio

rebalancing

loss,

$101

million

of

BlackRock/MLIM

transaction

integration

costs,

$48

million

mortgage

loan

portfolio

repositioning

loss,

and

$12

million

net

loss

related

to

our

BlackRock

LTIP

shares

obligation.  The net tax impact of these items is reflected in the adjustment to income taxes.

(a)

Amounts

adjusted

to

exclude

the

impact

of

the

following

pretax

items:

(1)

the

gain

of

$83

million

recognized

in

connection

with

PNC's

transfer

of

BlackRock

shares

to

satisfy

a

portion

of

our

BlackRock

LTIP

shares

obligation,

(2)

the

net

mark-to-market

adjustment

totaling

$210

million

on

our

remaining

BlackRock

LTIP

shares

obligation,

(3)

acquisition

integration

costs

totaling

$151

million,

and

(4)

Visa

indemnification

charge

of

$82

million.

The

net

tax

impact

of

these

items

is

reflected

in

the

adjustment

to income taxes.

Non-GAAP to GAAP

Reconcilement

Income Statement Summary –

2004 to 2007 (continued)

Appendix

For the year ended December 31, 2005

BlackRock

PNC

Deconsolidation and

BlackRock

PNC

In millions

As Reported

Other Adjustments

Equity Method

As Adjusted

Net interest income

$2,154

$(12)

$2,142

Provision for credit losses

21

21

Noninterest income

4,173

(1,214)

$163

3,122

Noninterest expense

4,306

(853)

3,453

Income before minority interest and income taxes

2,000

(373)

163

1,790

Minority interest in income of BlackRock

71

(71)

Income taxes

604

(150)

11

465

   Net income

$1,325

$(152)

$152

$1,325

For the year ended December 31, 2004

BlackRock

PNC

Deconsolidation and

BlackRock

PNC

In millions

As Reported

Other Adjustments

Equity Method

As Adjusted

Net interest income

$1,969

$(14)

$1,955

Provision for credit losses

52

52

Noninterest income

3,572

(745)

$101

2,928

Noninterest expense

3,712

(564)

3,148

Income before minority interest and income taxes

1,777

(195)

101

1,683

Minority interest in income of BlackRock

42

(42)

Income taxes

538

(59)

7

486

   Net income

$1,197

$(94)

$94

$1,197

Non-GAAP to GAAP

Reconcilement

Income Statement Summary –

2004 to 2007 (continued)

Appendix

% Change

In millions

2004

2005

2006

2007

2004-2006 CAGR

2006-2007

Adjusted net interest income

$1,955

$2,142

$2,235

$2,915

Adjusted noninterest income

2,928

3,122

3,572

3,921

Adjusted total revenue

4,883

5,264

5,807

6,836

9%

18%

Adjusted noninterest expense

3,148

3,453

3,587

4,112

7%

15%

Adjusted net income

1,197

1,325

1,514

1,702

12%

12%

Adjusted operating leverage

2%

3%

% Change

In millions

2004

2005

2006

2007

2004-2006 CAGR

2006-2007

Net interest income, as reported

$1,969

$2,154

$2,245

$2,915

Noninterest income, as reported

3,572

4,173

6,327

3,790

Total revenue, as reported

5,541

6,327

8,572

6,705

24%

(22%)

Noninterest expense, as reported

3,712

4,306

4,443

4,296

9%

(3%)

Net income, as reported

1,197

1,325

2,595

1,467

47%

(43%)

Operating leverage, as reported

15%

(19%)

For the year ended December 31, as adjusted

For the year ended December 31, as reported