The PNC Financial Services Group, Inc. (PNC) 10-Q 7 May 10 2010 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information
	3 Months Ended Mar. 31, 2010	Apr. 30, 2010
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-03-31
Document Fiscal Year Focus	2,010
Document Fiscal Period Focus	Q1
Trading Symbol	PNC
Entity Registrant Name	PNC FINANCIAL SERVICES GROUP INC
Entity Central Index Key	0000713676
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		526,050,424

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED INCOME STATEMENT (USD $)
In Millions, except Per Share data	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Interest Income
Loans	$2,160		$2,465
Investment securities	623		689
Other	122		105
Total interest income	2,905		3,259
Interest Expense
Deposits	281		546
Borrowed funds	245		393
Total interest expense	526		939
Net interest income	2,379		2,320
Noninterest Income
Asset management	259		189
Consumer services	296		316
Corporate services	268		245
Residential mortgage	147		431
Service charges on deposits	200		224
Net gains on sales of securities	90		56
Other-than-temporary impairments	(240)		(686)
Less: Noncredit portion of other-than-temporary impairments	(124)	[1]	(537)	[1]
Net other-than-temporary impairments	(116)		(149)
Other	240		54
Total noninterest income	1,384		1,366
Total revenue	3,763		3,686
Provision for credit losses	751		880
Noninterest Expense
Personnel	956		996
Occupancy	187		179
Equipment	172		178
Marketing	50		57
Other	748		748
Total noninterest expense	2,113		2,158
Income from continuing operations before income taxes and noncontrolling interests	899		648
Income taxes	251		128
Income from continuing operations before noncontrolling interests	648		520
Income from discontinued operations (net of income taxes of $14 and $5)	23		10
Net income	671		530
Less: Net income (loss) attributable to noncontrolling interests	(5)		4
Preferred stock dividends	93		51
Preferred stock discount accretion	250		15
Net income attributable to common shareholders	$333		$460
Basic Earnings Per Common Share
Continuing operations	0.62		1.02
Discontinued operations	0.05		0.02
Net income	0.67		1.04
Diluted Earnings Per Common Share
Continuing operations	0.61		1.01
Discontinued operations	0.05		0.02
Net income	0.66		1.03
Average Common Shares Outstanding
Basic	498		443
Diluted	500		444
[1]Included in accumulated other comprehensive loss.

CONSOLIDATED INCOME STATEMENT (

CONSOLIDATED INCOME STATEMENT (Parenthetical) (USD $)
In Millions	3 Months Ended Mar. 31, 2010	3 Months Ended Mar. 31, 2009
Income from discontinued operations, income taxes	$14	$5

CONSOLIDATED BALANCE SHEET

CONSOLIDATED BALANCE SHEET (USD $)
In Millions	Mar. 31, 2010		Dec. 31, 2009
Assets
Cash and due from banks	$3,563	[1]	$4,288	[1]
Federal funds sold and resale agreements (includes $963 and $990 measured at fair value)	1,367	[2]	2,390	[2]
Trading securities	1,595		2,124
Interest-earning deposits with banks	607	[1]	4,488	[1]
Loans held for sale (includes $2,199 and $2,062 measured at fair value)	2,691	[2]	2,539	[2]
Investment securities	57,606	[1]	56,027	[1]
Loans	157,266	[1],[2]	157,543	[1],[2]
Allowance for loan and lease losses	(5,319)	[1]	(5,072)	[1]
Net loans	151,947		152,471
Goodwill	9,425		9,505
Other intangible assets	3,289		3,404
Equity investments	10,256	[1]	10,254	[1]
Other	23,050	[1],[2]	22,373	[1],[2]
Total assets	265,396		269,863
Deposits
Noninterest-bearing	43,122		44,384
Interest-bearing	139,401		142,538
Total deposits	182,523		186,922
Borrowed funds
Federal funds purchased and repurchase agreements	5,511		3,998
Federal Home Loan Bank borrowings	8,700		10,761
Bank notes and senior debt	12,638		12,362
Subordinated debt	10,001		9,907
Other	5,611	[1]	2,233	[1]
Total borrowed funds	42,461		39,261
Allowance for unfunded loan commitments and letters of credit	252		296
Accrued expenses	2,939	[1]	3,590	[1]
Other	7,787	[1]	7,227	[1]
Total liabilities	235,962		237,296
Equity
Preferred stock		[3]		[3]
Common stock - $5 par value Authorized 800 shares, issued 535 and 471 shares	2,676		2,354
Capital surplus - preferred stock	645		7,974
Capital surplus - common stock and other	11,945		8,945
Retained earnings	13,340		13,144
Accumulated other comprehensive loss	(1,288)		(1,962)
Common stock held in treasury at cost: 9 and 9 shares	(500)		(513)
Total shareholders' equity	26,818		29,942
Noncontrolling interests	2,616		2,625
Total equity	29,434		32,567
Total liabilities and equity	265,396		269,863
Variable Interest Entity, Primary Beneficiary [Member]
Assets
Cash and due from banks	17			[1]
Interest-earning deposits with banks	4			[1]
Investment securities	650			[1]
Loans	4,847			[1],[2]
Allowance for loan and lease losses	209			[1]
Equity investments	1,767			[1]
Other	775			[1],[2]
Borrowed funds
Other	4,454			[1]
Accrued expenses	118			[1]
Other	$972			[1]
[1]Amounts represent the assets or liabilities of consolidated variable interest entities (VIEs).
[2]Amounts represent items for which the Corporation has elected the fair value option.
[3]Par value less than $.5 million at each date.

CONSOLIDATED BALANCE SHEET (Par

CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)
In Millions, except Per Share data	Mar. 31, 2010		Dec. 31, 2009
Cash and due from banks	$3,563	[1]	$4,288	[1]
Interest-earning deposits with banks	607	[1]	4,488	[1]
Investment securities	57,606	[1]	56,027	[1]
Loans	157,266	[1],[2]	157,543	[1],[2]
Allowance for loan and lease losses	5,319	[1]	5,072	[1]
Equity investments	10,256	[1]	10,254	[1]
Other	23,050	[1],[2]	22,373	[1],[2]
Other	5,611	[1]	2,233	[1]
Accrued expenses	2,939	[1]	3,590	[1]
Other	7,787	[1]	7,227	[1]
Federal funds sold and resale agreements, fair value	963		990
Loans held for sale, fair value	2,199		2,062
Loans, fair value	109		88
Other, fair value	453		486
Common stock, par value	$5		$5
Common stock, Authorized	800		800
Common stock, issued	535		471
Common stock held in treasury at cost, shares	9		9
Variable Interest Entity, Primary Beneficiary [Member]
Cash and due from banks	17			[1]
Interest-earning deposits with banks	4			[1]
Investment securities	650			[1]
Loans	4,847			[1],[2]
Allowance for loan and lease losses	(209)			[1]
Equity investments	1,767			[1]
Other	775			[1],[2]
Other	4,454			[1]
Accrued expenses	118			[1]
Other	$972			[1]
[1]Amounts represent the assets or liabilities of consolidated variable interest entities (VIEs).
[2]Amounts represent items for which the Corporation has elected the fair value option.

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)
In Millions	3 Months Ended Mar. 31, 2010		3 Months Ended Mar. 31, 2009
Operating Activities
Net income	$671		$530
Adjustments to reconcile net income to net cash provided by operating activities
Provision for credit losses	751		880
Depreciation and amortization	226		258
Deferred income taxes	254		237
Net gains on sales of securities	(90)		(56)
Net other-than-temporary impairments	116		149
Net gains related to BlackRock LTIP shares adjustment			(103)
Undistributed earnings of BlackRock	(57)		(10)
Net change in
Trading securities and other short-term investments	885		1,123
Loans held for sale	(218)		148
Other assets	437		1,917
Accrued expenses and other liabilities	(907)		(4,812)
Other	204		609
Net cash provided by operating activities	2,272		870
Sales
Securities available for sale	6,040		2,744
Loans	299		50
Repayments/maturities
Securities available for sale	1,815		1,543
Securities held to maturity	256		88
Purchases
Securities available for sale	(9,154)		(6,028)
Securities held to maturity	(527)		(336)
Loans	(1,532)		(45)
Net change in
Federal funds sold and resale agreements	1,024		295
Interest-earning deposits with Federal Reserve	3,848		190
Loans	3,251		2,475
Other	297	[1]	(154)	[1]
Net cash provided by investing activities	5,617		822
Net change in
Noninterest-bearing deposits	(559)		3,462
Interest-bearing deposits	(2,527)		(1,691)
Federal funds purchased and repurchase agreements	1,514		(385)
Federal Home Loan Bank short-term borrowings	(280)
Other short-term borrowed funds	(1,149)		(1,950)
Sales/issuances
Bank notes and senior debt	1,991		967
Other long-term borrowed funds	1,303		55
Common and treasury stock	3,409		70
Repayments/maturities
Federal Home Loan Bank long-term borrowings	(1,757)		(1,148)
Bank notes and senior debt	(1,754)		(996)
Subordinated debt	29		(550)
Other long-term borrowed funds	(1,050)		(42)
Preferred stock - TARP	(7,579)
Acquisition of treasury stock	(67)		(35)
Preferred stock cash dividends paid	(93)		(51)
Common stock cash dividends paid	(45)		(293)
Net cash used by financing activities	(8,614)		(2,587)
Net Decrease In Cash And Due From Banks	(725)		(895)
Cash and due from banks at beginning of period	4,288	[2]	4,471
Cash and due from banks at end of period	3,563	[2]	3,576
Supplemental Disclosures
Interest paid	515		983
Income taxes paid	308		9
Income taxes refunded	1		19
Non-cash Items
Transfer from (to) loans to (from) loans held for sale, net	83		(207)
Transfer from loans to foreclosed assets	$382		$213
[1]Includes the impact of the consolidation of variable interest entities as of January 1, 2010.
[2]Amounts represent the assets or liabilities of consolidated variable interest entities (VIEs).

ACCOUNTING POLICIES

ACCOUNTING POLICIES
	3 Months Ended Mar. 31, 2010
ACCOUNTING POLICIES	NOTE 1 ACCOUNTING POLICIES BASIS OF FINANCIAL STATEMENT PRESENTATION Our consolidated financial statements include the accounts of the parent company and its subsidiaries, most of which are wholly owned, and certain partnership interests and variable interest entities. We prepared these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform with the 2010 presentation. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. See Note 2 Divestiture regarding our pending sale of PNC Global Investment Servicing Inc. The Consolidated Income Statement for all periods presented and related Notes To Consolidated Financial Statements reflect the global investment servicing business as discontinued operations. In our opinion, the unaudited interim consolidated financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. When preparing these unaudited interim consolidated financial statements, we have assumed that you have read the audited consolidated financial statements included in our 2009 Annual Report on Form 10-K (2009 Form 10-K). Reference is made to Note 1 Accounting Policies in the 2009 Form 10-K for a detailed description of significant accounting policies. There have been no significant changes to these policies in the first three months of 2010 other than as disclosed herein. These interim consolidated financial statements serve to update the 2009 Form 10-K and may not include all information and notes necessary to constitute a complete set of financial statements. We have considered the impact on these consolidated financial statements of events occurring subsequent to March31, 2010. USE OF ESTIMATES We prepare the consolidated financial statements using financial information available at the time, which requires us to make estimates and assumptions that affect the amounts reported. Our most significant estimates pertain to our allowance for loan and lease losses, impaired loans, fair value measurements, including security valuations and residential mortgage servicing rights, and revenue recognition. Actual results may differ from the estimates and the differences may be material to the consolidated financial statements. INVESTMENT IN BLACKROCK, INC. We account for our investment in the common stock, Series B and Series D Preferred Stocks of BlackRock (both deemed to be in substance common stock) under the equity method of accounting. On January31, 2010, the Series D Preferred Stock was converted to Series B Preferred Stock. The investment in BlackRock is reflected on our Consolidated Balance Sheet in the caption Equity investments, while our equity in earnings of BlackRock is reported on our Consolidated Income Statement in the caption Asset

DIVESTITURE

DIVESTITURE
	3 Months Ended Mar. 31, 2010
DIVESTITURE	NOTE 2 DIVESTITURE PENDING SALE OF PNC GLOBAL INVESTMENT SERVICING On February2, 2010, we entered into a definitive agreement to sell PNC Global Investment Servicing Inc. (GIS), a leading provider of processing, technology and business intelligence services to asset managers, broker-dealers and financial advisors worldwide, for $2.3 billion in cash. We currently anticipate closing the transaction in the third quarter of 2010. Completion of the transaction is subject to regulatory approvals and certain other closing conditions. Results of operations of GIS are presented as Income from discontinued operations, net of income taxes, on our Consolidated Income Statement for all periods presented. Asset and liabilities of GIS at March31, 2010 and December31, 2009 follow. Investment in Discontinued Operations In millions March31, 2010 December 31, 2009 Interest-earning deposits with banks $ 186 $ 255 Goodwill 1,243 1,243 Other intangible assets 50 51 Other 360 359 Total assets $ 1,839 $ 1,908 Interest-bearing deposits $ 94 $ 93 Accrued expenses 265 266 Other 1,557 1,009 Total liabilities $ 1,916 $ 1,368 Net assets (liabilities) $ (77 ) $ 540

LOAN SALE AND SERVICING ACTIVIT

LOAN SALE AND SERVICING ACTIVITIES AND VARIABLE INTEREST ENTITIES
	3 Months Ended Mar. 31, 2010
LOAN SALE AND SERVICING ACTIVITIES AND VARIABLE INTEREST ENTITIES	NOTE 3 LOAN SALE AND SERVICING ACTIVITIES AND VARIABLE INTEREST ENTITIES LOAN SALE AND SERVICING ACTIVITIES We have transferred residential and commercial mortgage loans in securitization or sales transactions in which we have continuing involvement. These transfers have occurred through Agency securitization, Non-Agency securitization, and whole-loan sale transactions. In Agency securitizations, Ginnie Mae (GNMA), Fannie Mae (FNMA), and Freddie Mac (FHLMC) (collectively the Agencies) securitize our transferred loans into mortgage-backed securities for sale into the secondary market through Special Purpose Entities (SPEs) they sponsor. In Non-Agency securitizations, we have transferred loans into securitization SPEs. In other instances third-party investors have purchased (in whole-loan sale transactions) and subsequently sold our loans into securitization SPEs. Third-party investors have also purchased our loans in whole-loan sale transactions. Securitization SPEs, which are legal entities that are utilized in the Agency and Non-Agency securitization transactions, are VIEs. Our continuing involvement in the Agency securitizations, Non-Agency securitizations, and whole-loan sale transactions generally consists of servicing, limited repurchases of previously transferred loans and loss share arrangements, and, in limited circumstances, holding of mortgage-backed securities issued by the securitization SPEs. Depending on the transaction, we may act as the master, primary, and/or special servicer to the securitization SPEs or third-party investors. Servicing responsibilities typically consist of collecting and remitting monthly borrower principal and interest payments, maintaining escrow deposits, performing loss mitigation and foreclosure activities, and, in certain instances, funding of servicing advances. Servicing advances are made for principal and interest and collateral protection. Servicing advances, which are reimbursable, are recognized in Other assets at cost. With respect to Agency securitizations, the Agencies are responsible for working out defaulted loans. We earn servicing and other ancillary fees for our role as servicer and depending on the contractual terms of the servicing arrangement, we can be terminated as servicer with or without cause. At the consummation date of each type of loan transfer, we recognize a servicing asset at fair value. See Note 9 Goodwill and Other Intangible Assets for further discussion of our residential and commercial servicing assets. Certain loans transferred to the Agencies contain removal of account provisions (ROAPs). Under these ROAPs, we hold an option to repurchase at par individual delinquent loans that meet certain criteria. When we have the unilateral ability to repurchase a delinquent loan, effective control over the loan has been regained and we recognize the loan and a corresponding liability on the balance sheet regardless of our intent to repurchase the loan. At March31, 2010 and December31, 2009, the balance of our ROAP asset and liability totaled $373 million and $577 million, respectively. We generally do not retain mortgage-backed securities issued by the Agency an

LOANS AND COMMITMENTS TO EXTEND

LOANS AND COMMITMENTS TO EXTEND CREDIT
	3 Months Ended Mar. 31, 2010
LOANS AND COMMITMENTS TO EXTEND CREDIT	NOTE 4 LOANS AND COMMITMENTS TO EXTEND CREDIT Loans outstanding were as follows: In millions March31 2010 December 31 2009 Commercial $ 54,703 $ 54,818 Commercial real estate 21,950 23,131 Consumer 55,234 53,582 Residential real estate 19,268 19,810 Equipment lease financing 6,111 6,202 Total loans $ 157,266 $ 157,543 Loans are presented net of unearned income, net deferred loan fees, unamortized discounts and premiums, and purchase discounts and premiums totaling $3.0 billion and $3.2 billion at March31, 2010 and December31, 2009, respectively. Future accretable discounts related to purchased impaired loans are not included in loans outstanding. At March31, 2010, we pledged $15.7 billion of loans to the Federal Reserve Bank and $28.2 billion of loans to the Federal Home Loan Bank as collateral for the contingent ability to borrow, if necessary. The comparable amounts at December31, 2009 were $18.8 billion and $32.6 billion, respectively. Certain loans are accounted for at fair value with changes in the fair value reported in current period earnings. The fair value of these loans was $111 million, or less than 1% of the total loan portfolio, at March31, 2010. Net Unfunded Credit Commitments In millions March31 2010 December 31 2009 Commercial and commercial real estate $ 56,850 $ 60,143 Home equity lines of credit 20,229 20,367 Consumer credit card line and other unsecured lines 18,248 18,800 Other 1,036 1,485 Total $ 96,363 $ 100,795 Commitments to extend credit represent arrangements to lend funds or provide liquidity subject to specified contractual conditions. At March31, 2010 commercial commitments are reported net of $12.5 billion of participations, assignments and syndications, primarily to financial institutions. The comparable amount at December31, 2009 was $13.2 billion. Commitments generally have fixed expiration dates, may require payment of a fee, and contain termination clauses in the event the customers credit quality deteriorates. Based on our historical experience, most commitments expire unfunded, and therefore cash requirements are substantially less than the total commitment. Consumer home equity lines of credit accounted for 53% of consumer unfunded credit commitments at March31, 2010. Unfunded credit commitments related to purchased customer receivables totaled $2.8 billion at March31, 2010. These receivables are now a component of PNCs total unfunded credit commitments due to the January1, 2010 consolidation of Market Street. These amounts are included in the preceding table within the Commercial and commercial real estate category. Unfunded credit commitments related to Market Street totaled $5.6 billion at December31, 2009 and are included in the preceding table primarily within the Commercial and commercial real estate category. This amount was eliminated as of March31, 2010 due to the consolidation of Market Street.

ASSET QUALITY

ASSET QUALITY
	3 Months Ended Mar. 31, 2010
ASSET QUALITY	NOTE 5 ASSET QUALITY The following table sets forth nonperforming assets and related information. These amounts exclude purchased impaired loans acquired in connection with the December31, 2008 National City acquisition. See Note 6 Purchased Impaired Loans Related to National City for further information. Dollars in millions March31, 2010 December31, 2009 Nonaccrual loans Commercial $ 1,833 $ 1,806 Commercial real estate 2,216 2,140 Equipment lease financing 123 130 TOTAL COMMERCIAL LENDING 4,172 4,076 Consumer Home equity 337 356 Other 35 36 Total consumer 372 392 Residential real estate Residential mortgage 968 955 Residential construction 249 248 Total residential real estate 1,217 1,203 TOTAL CONSUMER LENDING 1,589 1,595 Total nonaccrual/nonperforming loans 5,761 5,671 Foreclosed and other assets Commercial lending 328 266 Consumer lending 451 379 Total foreclosed and other assets 779 645 Total nonperforming assets $ 6,540 $ 6,316 Nonperforming loans to total loans 3.66 % 3.60 % Nonperforming assets to total loans and foreclosed and other assets 4.14 3.99 Nonperforming assets to total assets 2.46 2.34 Loans whose contractual terms have been restructured in a manner which grants a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation are considered troubled debt restructurings (TDRs). TDRs typically result from our loss mitigation activities and could include rate reductions, principal forgiveness, forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Total nonperforming loans in the table above include TDRs of $385 million at March31, 2010 and $440 million at December31, 2009. TDRs returned to performing (accrual) status totaled $217 million at March31, 2010 and are excluded from nonperforming loans. These loans have demonstrated a period of at least six months of performance under the modified terms. In addition, credit cards and certain small business and consumer credit agreements whose terms have been modified totaled $279 million at March31, 2010 and are excluded from nonperforming loans. Our policy is generally to exempt these loans from being placed on nonaccrual status as permitted by regulatory guidance. These loans are directly charged off in the period that they become 180 days past due. Net interest income less the provision for credit losses was $1.6 billion for the first three months of 2010 compared with $1.4 billion for the first three months of 2009. Changes in the allowance for loan and lease losses follow: In millions 2010 2009 January1 $ 5,072 $ 3,917 Charge-offs (827 ) (512 ) Recoveries 136 81 Net charge-offs (691 ) (431 ) Prov

PURCHASED IMPAIRED LOANS RELATE

PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY
	3 Months Ended Mar. 31, 2010
PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY	NOTE 6 PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY As further described in Note 6 of the 2009 Form 10-K, at December31, 2008, we identified certain loans related to the National City acquisition, for which there was evidence of credit quality deterioration since origination and it was probable that we would be unable to collect all contractually required principal and interest payments. GAAP requires these loans to be recorded at fair value at acquisition date and prohibits the carrying over or the creation of valuation allowances in the initial accounting for such loans acquired in a transfer. At March31, 2010 and December31, 2009, purchased impaired loans had a carrying value of $9.8 billion and $10.4 billion, respectively. During the first three months of 2010, the amount of purchased impaired loans decreased by a net $0.6 billion as a result of payments and other exit activities partially offset by accretion of purchase accounting discount. The unpaid principal balance of these loans was $13.6 billion at March31, 2010 and $15.4 billion at December31, 2009, as detailed below: Purchased Impaired Loans March31, 2010 December31, 2009 In millions Recorded Investment Outstanding Balance Recorded Investment Outstanding Balance Commercial (a) $ 430 $ 713 $ 558 $ 1,016 Commercial real estate (a) 1,495 2,235 1,694 2,705 Consumer 3,376 4,852 3,457 5,097 Residential real estate 4,471 5,784 4,663 6,620 Total $ 9,772 $ 13,584 $ 10,372 $ 15,438 (a) Includes purchased impaired loans held for sale. The recorded investment and outstanding balance of these loans was $99 million and $127 million, respectively, at March31, 2010. Comparable balances at December31, 2009 were $85 million and $200 million. The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan using the constant effective yield method. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition is referred to as the nonaccretable difference. Changes in the expected cash flows of individual commercial or pooled consumer purchased impaired loans from the date of acquisition will either impact the accretable yield or result in an impairment charge to the provision for credit losses in the period in which the changes become probable. Prepayments are treated as a reduction of cash flows expected to be collected and a reduction of projections of contractual cash flows such that the nonaccretable difference is not affected. Thus, for decreases in cash flows expected to be collected resulting from prepayments, the effect will be to reduce the yield prospectively. Subsequent decreases to the expected cash flows will generally result in an impairment charge to the provision for credit losses, resulting in an increase to the allowance for loan and lease losses, and a reclassification from accretable yield to nonaccretable difference. Durin

INVESTMENT SECURITIES

INVESTMENT SECURITIES
	3 Months Ended Mar. 31, 2010
INVESTMENT SECURITIES	NOTE 7 INVESTMENT SECURITIES Amortized Cost Unrealized Fair Value In millions Gains Losses March31, 2010 SECURITIES AVAILABLE FOR SALE Debt securities US Treasury and government agencies $ 10,520 $ 58 $ (39 ) $ 10,539 Residential mortgage-backed Agency 22,259 499 (54 ) 22,704 Non-agency 9,498 205 (1,993 ) 7,710 Commercial mortgage-backed Agency 1,179 25 (2 ) 1,202 Non-agency 1,908 37 (89 ) 1,856 Asset-backed 1,842 24 (335 ) 1,531 State and municipal 1,374 56 (54 ) 1,376 Other debt 2,180 50 (6 ) 2,224 Total debt securities 50,760 954 (2,572 ) 49,142 Corporate stocks and other 399 399 Total securities available for sale $ 51,159 $ 954 $ (2,572 ) $ 49,541 SECURITIES HELD TO MATURITY Debt securities Commercial mortgage-backed (non-agency) $ 4,295 $ 213 $ (2 ) $ 4,506 Asset-backed 3,761 102 (13 ) 3,850 Other debt 9 1 10 Total securities held to maturity $ 8,065 $ 316 $ (15 ) $ 8,366 December31, 2009 SECURITIES AVAILABLE FOR SALE Debt securities US Treasury and government agencies $ 7,548 $ 20 $ (48 ) $ 7,520 Residential mortgage-backed Agency 24,076 439 (77 ) 24,438 Non-agency 10,419 236 (2,353 ) 8,302 Commercial mortgage-backed Agency 1,299 10 (12 ) 1,297 Non-agency 4,028 42 (222 ) 3,848 Asset-backed 2,019 30 (381 ) 1,668 State and municipal 1,346 58 (54 ) 1,350 Other debt 1,984 38 (7 ) 2,015 Total debt securities 52,719 873 (3,154 ) 50,438 Corporate stocks and other 360 360 Total securities available for sale $ 53,079 $ 873 $ (3,154 ) $ 50,798 SECURITIES HELD TO MATURITY Debt securities Commercial mortgage-backed (non-agency) $ 2,030 $ 195 $ 2,225 Asset-backed 3,040 109 $ (13 ) 3,136 Other debt 159 1 160 Total securities held to maturity $ 5,229 $ 305 $ (13 ) $ 5,521 The fair value of investment securities is impacted by interest rates, credit spreads, market volatility and liquidity conditions. Net unrealized gains and losses in the securities available for sale portfolio are included in shareholders equity as accumulated other comprehensive income or loss, net of tax, unless credit-related. During the first three months of 2010, we transferred $2.2 billion of available fo

FAIR VALUE

FAIR VALUE
	3 Months Ended Mar. 31, 2010
FAIR VALUE	NOTE 8 FAIR VALUE Fair Value Measurement Fair value is defined in GAAP as the price that would be received to sell an asset or the price paid to transfer a liability on the measurement date. The standard focuses on the exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants. GAAP establishes a fair value reporting hierarchy to maximize the use of observable inputs when measuring fair value and defines the three levels of inputs as noted below. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities may include debt securities, equity securities and listed derivative contracts that are traded in an active exchange market and certain US government agency securities that are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 such as: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated to observable market data for substantially the full term of the asset or liability. Level 2 assets and liabilities may include debt securities, equity securities and listed derivative contracts with quoted prices that are traded in markets that are not active, and certain debt and equity securities and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable inputs. This category generally includes agency residential and commercial mortgage-backed debt securities, asset-backed securities, corporate debt securities, residential mortgage loans held for sale, and derivative contracts. Level 3 Unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities may include financial instruments whose value is determined using pricing models with internally developed assumptions, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain available for sale and trading securities, commercial mortgage loans held for sale, private equity investments, residential mortgage servicing rights, BlackRock Series C Preferred Stock and certain financial derivative contracts. The available for sale and trading securities within Level 3 include non-agency residential mortgage-backed securities, auction rate securities, certain private-issuer asset-backed securities and corporate debt securities. Nonrecurring items, primarily certain nonaccrual and other loans held for sale, commercial mortgage servicing rights, equity investments and other assets are also included in this category. We characterize active markets as those where transaction volumes are sufficient to provide objective pricing information, with reasonably narrow bid/ask spreads and where dealer quotes received do not vary widely

GOODWILL AND OTHER INTANGIBLE A

GOODWILL AND OTHER INTANGIBLE ASSETS
	3 Months Ended Mar. 31, 2010
GOODWILL AND OTHER INTANGIBLE ASSETS	NOTE 9 GOODWILL AND OTHER INTANGIBLE ASSETS Changes in goodwill by business segment during the first three months of 2010 follow: Changes in Goodwill by Business Segment (a) In millions Retail Banking Corporate Institutional Banking Asset Management Group Black- Rock Residential Mortgage Banking Other (b) Total January 1, 2010 $ 5,369 $ 2,756 $ 68 $ 26 $ 43 $ 1,243 $ 9,505 Acquisition-related (51 ) (17 ) (4 ) (72 ) BlackRock (8 ) (8 ) March 31, 2010 $ 5,318 $ 2,739 $ 64 $ 18 $ 43 $ 1,243 $ 9,425 (a) The Distressed Assets Portfolio business segment does not have any goodwill allocated to it. (b) Represents goodwill related to GIS, which is no longer a reportable business segment. Changes in goodwill and other intangible assets during the first three months of 2010 follow: Summary of Changes in Goodwill and Other Intangible Assets In millions Goodwill Customer- Related Servicing Rights January1, 2010 $ 9,505 $ 1,145 $ 2,259 Additions/adjustments: Acquisition-related (72 ) Mortgage and other loan servicing rights (36 ) BlackRock (8 ) Impairment charge (4 ) Amortization (53 ) (22 ) March31, 2010 $ 9,425 $ 1,092 $ 2,197 Assets and liabilities of acquired entities are recorded at estimated fair value as of the acquisition date and are subject to refinement as information relative to the fair values at the date of acquisition becomes available. Our investment in BlackRock changes when BlackRock repurchases its shares in the open market or issues shares for an acquisition or pursuant to its employee compensation plans. We adjust goodwill when BlackRock repurchases its shares at an amount greater (or less) than book value per share which results in an increase (or decrease) in our percentage ownership interest. The gross carrying amount, accumulated amortization and net carrying amount of other intangible assets by major category consisted of the following: Other Intangible Assets In millions March31 2010 December31 2009 Customer-related and other intangibles Gross carrying amount $ 1,742 $ 1,742 Accumulated amortization (650 ) (597 ) Net carrying amount $ 1,092 $ 1,145 Mortgage and other loan servicing rights Gross carrying amount $ 2,692 $ 2,729 Valuation allowance (4 ) Accumulated amortization (491 ) (470 ) Net carrying amount $ 2,197 $ 2,259 Total $ 3,289 $ 3,404 While certain of our other intangible assets have finite lives and are amortized primarily on a straight-line basis, certain core deposit intangibles are amortized on an accelerated basis. For customer-related int

CAPITAL SECURITIES OF SUBSIDIAR

CAPITAL SECURITIES OF SUBSIDIARY TRUSTS
	3 Months Ended Mar. 31, 2010
CAPITAL SECURITIES OF SUBSIDIARY TRUSTS	NOTE 10 CAPITAL SECURITIES OF SUBSIDIARY TRUSTS Our capital securities of subsidiary trusts are described in Note 14 Capital Securities of Subsidiary Trusts in our 2009 Form 10-K. All of these Trusts are wholly owned finance subsidiaries of PNC. In the event of certain changes or amendments to regulatory requirements or federal tax rules, the capital securities are redeemable. The financial statements of the Trusts are not included in PNCs consolidated financial statements in accordance with GAAP. The obligations of the respective parent of each Trust, when taken collectively, are the equivalent of a full and unconditional guarantee of the obligations of such Trust under the terms of the capital securities. Such guarantee is subordinate in right of payment in the same manner as other junior subordinated debt. There are certain restrictions on PNCs overall ability to obtain funds from its subsidiaries. For additional disclosure on these funding restrictions, including an explanation of dividend and intercompany loan limitations, see Note 23 Regulatory Matters in our 2009 Form 10-K. PNC is subject to restrictions on dividends and other provisions similar to or in some ways more restrictive than those potentially imposed under the Exchange Agreements with Trust II and Trust III, as described in Note 3 Variable Interest Entities in our 2009 Form 10-K.

CERTAIN EMPLOYEE BENEFIT AND ST

CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS
	3 Months Ended Mar. 31, 2010
CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS	NOTE 11 CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS PENSION AND POSTRETIREMENT PLANS As described in Note 15 Employee Benefit Plans in our 2009 Form 10-K, we have a noncontributory, qualified defined benefit pension plan covering eligible employees. The plan derives benefits from cash balance formulas based on compensation levels, age and length of service. Pension contributions are based on an actuarially determined amount necessary to fund total benefits payable to plan participants. Effective January1, 2010, the pension plan has one design for all eligible employees. All new participants on or after January1, 2010 will receive a fixed earnings credit of 3%. However, participants as of December31, 2009 will be maintained at the earnings credit level they have attained as of that date going forward. The percentage will not increase in future years. We also maintain nonqualified supplemental retirement plans for certain employees and provide certain health care and life insurance benefits for qualifying retired employees (postretirement benefits) through various plans. The nonqualified pension and postretirement benefit plans are unfunded. The Company reserves the right to terminate or make plan changes at any time. Effective January1, 2010, various benefit plans were amended to provide one plan design for all eligible employees. The pending sale of GIS will affect GIS participants in the pension and postretirement plans. At closing, all GIS participants will be vested in their benefits under the pension plan and their active participation in such plan will be terminated. However, they will continue to accrue service towards earning their retiree medical benefit. These changes will not have a significant impact on any of the plans. The components of our net periodic pension and post-retirement benefit cost for the first quarters of 2010 and 2009 were as follows: Qualified Pension Plan Nonqualified RetirementPlans Postretirement Benefits Three months ended March31 In millions 2010 2009 2010 2009 2010 2009 Net periodic cost consists of: Service cost $ 24 $ 23 $ 1 $ 1 $ 1 $ 1 Interest cost 51 54 3 4 5 5 Expected return on plan assets (72 ) (66 ) Amortization of prior service cost (2 ) (1 ) (1 ) Amortization of actuarial losses 9 20 1 Net periodic cost (benefit) $ 10 $ 31 $ 5 $ 5 $ 5 $ 5 STOCK-BASED COMPENSATION PLANS As more fully described in Note 16 Stock-Based Compensation Plans in our 2009 Form 10-K, we have long-term incentive award plans (Incentive Plans) that provide for the granting of incentive stock options, nonqualified stock options, stock appreciation rights, incentive shares/performance units, restricted stock, restricted share units, other share-based awards and dollar-denominated awards to executives and, other than incentive stock options, to non-employee directors. Certain

FINANCIAL DERIVATIVES

FINANCIAL DERIVATIVES
	3 Months Ended Mar. 31, 2010
FINANCIAL DERIVATIVES	NOTE 12 FINANCIAL DERIVATIVES We use derivative financial instruments (derivatives) primarily to help manage exposure to interest rate, market and credit risk and reduce the effects that changes in interest rates may have on net income, fair value of assets and liabilities, and cash flows. We also enter into derivatives with customers to facilitate their risk management activities and, to a lesser extent, to take proprietary risk positions. Derivatives represent contracts between parties that usually require little or no initial net investment and result in one party delivering cash or another type of asset to the other party based on a notional amount and an underlying as specified in the contract. Derivative transactions are often measured in terms of notional amount, but this amount is generally not exchanged and it is not recorded on the balance sheet. The notional amount is the basis to which the underlying is applied to determine required payments under the derivative contract. The underlying is a referenced interest rate, commonly LIBOR, security price or other index. Certain contracts and commitments, such as residential and commercial real estate loan commitments associated with loans to be sold, also qualify as derivative instruments. All derivatives are carried on the Consolidated Balance Sheet at fair value. Derivative balances are presented on a net basis taking into consideration the effects of legally enforceable master netting agreements. Cash collateral exchanged with counterparties is also netted against the applicable derivative fair values. Further discussion on how derivatives are accounted for is included in Note 1 Accounting Policies in our 2009 Form10-K. Derivatives Designated in Hedge Relationships Certain derivatives used to manage interest rate risk as part of our asset and liability risk management activities are designated as accounting hedges under GAAP. Derivatives hedging the risks associated with changes in the fair value of assets or liabilities are considered fair value hedges, while derivatives hedging the variability of expected future cash flows are considered cash flow hedges. Designating derivatives as accounting hedges allows for gains and losses on those derivatives, to the extent effective, to be recognized in the income statement in the same period the hedged items affect earnings. Cash Flow Hedges We enter into receive-fixed, pay-variable interest rate swaps to modify the interest rate characteristics of designated commercial loans from variable to fixed in order to reduce the impact of changes in future cash flows due to market interest rate changes. For these cash flow hedges, any changes in the fair value of the derivatives that are effective in offsetting changes in the forecasted interest cash flows are recorded in accumulated other comprehensive income and are reclassified to interest income in conjunction with the recognition of interest receipts on the loans. In the 12 months that follow March31, 2010, we expect to reclassify from the amount currently reported in accumulated other comprehensive income net derivative gains of $272 million pretax, or $177 million after-tax

EARNINGS PER SHARE

EARNINGS PER SHARE
	3 Months Ended Mar. 31, 2010
EARNINGS PER SHARE	NOTE 13 EARNINGS PER SHARE The following table sets forth basic and diluted earnings per common share calculations: Three months ended March31 In millions, except share and per share data 2010 2009 Basic Net income from continuing operations $ 648 $ 520 Less: Net income (loss) attributable to noncontrolling interests (5 ) 4 Dividends distributed to common shareholders 45 292 Dividends distributed to preferred shareholders 93 51 Preferred stock discount accretion 250 15 Undistributed net income from continuing operations $ 265 $ 158 Undistributed net income from discontinued operations 23 10 Undistributed net income $ 288 $ 168 Percentage of undistributed income allocated to common shares 99.7 % 99.7 % Undistributed income from continuing operations allocated to common shares $ 264 $ 157 Plus common dividends 45 292 Net income from continuing operations attributable to basic common shares $ 309 $ 449 Undistributed income from discontinued operations allocated to common shares 23 10 Net income attributable to basic common shares $ 332 $ 459 Basic weighted-average common shares outstanding 498,010 443,049 Basic earnings per common share from continuing operations $ .62 $ 1.02 Basic earnings per common share from discontinued operations .05 .02 Basic earnings per common share $ .67 $ 1.04 Diluted Net income from continuing operations attributable to basic common shares $ 309 $ 449 Less: BlackRock common stock equivalents 2 1 Net income from continuing operations attributable to diluted common shares $ 307 $ 448 Net income from discontinued operations attributable to diluted common shares 23 10 Net income attributable to diluted common shares $ 330 $ 458 Basic weighted average common shares outstanding 498,010 443,049 Dilutive potential common shares (a)(b) 2,317 688 Diluted weighted-average common shares outstanding 500,327 443,737 Diluted earnings per common share from continuing operations $ .61 $ 1.01 Diluted earnings per common share from discontinued operations .05 .02 Diluted earnings per common share $ .66 $ 1.03 (a)Excludes stock options considered to be anti-dilutive (in thousands) 14,134 20,402 (b)Excludes warrants considered to be anti-dilutive (in thousands) 21,929 19,407 Basic earnings per share is calculated using the two-class method to determine income attributable to common stockholders. The two-class method requires undistributed earnings for the period, which represents net income less common and participating security dividends (if applicable) declared or paid, to be allocated between the common and participating security stockholders based upon their respective rights to receive

TOTAL EQUITY AND OTHER COMPREHE

TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME
	3 Months Ended Mar. 31, 2010
TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME	NOTE 14 TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME Activity in total equity for the first three months of 2010 follows. The par value of our preferred stock outstanding at March31, 2010 totaled less than $.5 million and, therefore, is excluded from the table. Shareholders Equity In millions, except per share data Shares Outstanding Common Stock Common Stock Capital Surplus Preferred Stock Capital Surplus Common Stock and Other Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Noncontrolling Interests Total Equity Balance at December31, 2009 462 $ 2,354 $ 7,974 $ 8,945 $ 13,144 $ (1,962 ) $ (513 ) $ 2,625 $ 32,567 Cumulative effect of adopting ASU 2009-17, Consolidations (92 ) (13 ) (105 ) Balance at January1, 2010 462 $ 2,354 $ 7,974 $ 8,945 $ 13,052 $ (1,975 ) $ (513 ) $ 2,625 $ 32,462 Net income 676 (5 ) 671 Other comprehensive income (loss), net of tax Other-than-temporary impairment losses on debt securities 13 13 Net unrealized securities gains 487 487 Net unrealized gains on cash flow hedge derivatives 78 78 Pension, other postretirement and postemployment benefit plan adjustments 120 120 Other (11 ) (11 ) Comprehensive income (5 ) 1,358 Cash dividends declared Common ($.10 per share) (45 ) (45 ) Preferred (93 ) (93 ) Redemption of Series N (TARP) Preferred Stock (7,579 ) (7,579 ) Preferred stock discount accretion 250 (250 ) Common stock activity (a) 64 322 3,055 3,377 Treasury stock activity (b) (27 ) 13 (14 ) Other (28 ) (4 ) (32 ) Balance at March31, 2010 526 $ 2,676 $ 645 $ 11,945 $ 13,340 $ (1,288 ) $ (500 ) $ 2,616 $ 29,434 (a) Includes 63.9million common shares issuance, the net proceeds of which were used together with other available funds to redeem the Series N (TARP) Preferred Stock, for a $3.4 billion net increase in total equity. (b) Net treasury stock activity totaled less than .5million shares. Comprehensive income for the first three months of 200

INCOME TAXES

INCOME TAXES
	3 Months Ended Mar. 31, 2010
INCOME TAXES	NOTE 15 INCOME TAXES We had federal net operating loss carryforwards of $.9 billion at March31, 2010 and $1.2 billion at December31, 2009. The majority of the federal net operating loss can be carried forward to future tax periods until 2029. We have established that no valuation allowance relating to the federal net operating losses is necessary based upon all available positive and negative evidence including PNCs forecast of future taxable income. We had $1.8 billion of state net operating loss carryforwards at March31, 2010 and $2.0 billion at December31, 2009. The state net operating loss carryforwards will expire from 2010 to 2029. We have established a valuation allowance of $31 million relating to the state net operating losses at both March31, 2010 and December31, 2009. We had federal tax credit carryforwards of $289 million at March31, 2010 and $254 million at December31, 2009. In addition, there were $4 million of state tax credit carryforwards at both March31, 2010 and December31, 2009. The credit carryforwards will expire from 2012 to 2029. We have established that no valuation allowance relating to the tax credits is necessary based upon all available positive and negative evidence including PNCs forecast of future taxable income. PNCs consolidated federal income tax returns through 2003 have been audited by the IRS and we have resolved all matters through the IRS Appeals Division. The IRS is currently examining our 2004 through 2006 consolidated federal income tax returns and we expect that examination to conclude, with all adjustments being agreed to, in the first half of 2010. We expect the IRS to begin its examination of our 2007 and 2008 consolidated federal income tax returns during 2010. The consolidated federal income tax returns of National City through 2004 have been audited by the IRS. Included in the 2003 and 2004 examination were certain adjustments which are under review by the IRS Appeals Division. We do not anticipate any significant adverse impact to net income. The IRS has completed field examination of the 2005 through 2007 consolidated federal income tax returns of National City and a final report is expected in the second quarter of 2010. The audit of the 2008 federal income tax return will commence in 2010. We had unrecognized tax benefits of $227 million at both March31, 2010 and December31, 2009. At March31, 2010, the amount of unrecognized tax benefits that if recognized would impact the effective tax rate was $161 million. It is reasonably possible that the liability for uncertain tax positions could increase or decrease in the next twelve months due to completion of tax authorities exams or the expiration of statutes of limitations. Management estimates that the liability for uncertain tax positions could decrease by $44 million within the next twelve months.

SUMMARIZED FINANCIAL INFORMATIO

SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK
	3 Months Ended Mar. 31, 2010
SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK	NOTE 16 SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK Summarized consolidated financial information of BlackRock follows. In millions Threemonthsended March31 2010 2009 Total revenue $ 1,995 $ 987 Total expenses 1,341 716 Operating income 654 271 Non-operating income (expense) 2 (179 ) Income before income taxes 656 92 Income tax expense 228 30 Net income 428 62 Less: net income (loss) attributable to non-controlling interests 5 (22 ) Net income attributable to BlackRock $ 423 $ 84

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS
	3 Months Ended Mar. 31, 2010
LEGAL PROCEEDINGS	NOTE 17 LEGAL PROCEEDINGS The disclosure below updates the description of legal proceedings in Note 24 Legal Proceedings in Part II, Item8 of our 2009 Form 10-K. National City Matters ERISA Cases In February 2009, a lawsuit was filed in the United States District Court for the Northern District of Ohio against National City, National City Bank, the Administrative Committee of the National City Savings and Investment Plan, Harbor Federal Savings Bank, the Harbor Employees Stock Ownership Plan Committee and certain National City and Harbor directors and officers. This lawsuit was brought as a class action on behalf of all participants in or beneficiaries of the Harbor ESOP between December1, 2006 and the present whose account in the Harbor ESOP held National City stock (including National City units), and who continued to be employed by National City through December31, 2007. The complaint alleged breaches of fiduciary duties under ERISA relating to, among other things, National City stock being offered as an investment alternative, an alleged lock-up of National City stock, failure to pay benefits, conflicts of interest, and monitoring and disclosure obligations. The complaint sought equitable relief (including a declaration that the defendants breached their ERISA fiduciary duties, an injunction prohibiting further breaches, an order compelling the defendants to make good any losses to the Plan caused by their actions, the imposition of a constructive trust on any profits earned by the defendants from their actions and restitution), unspecified money damages and attorneys fees and costs. In January 2010, the parties entered into a definitive agreement settling this litigation. In May 2010, the court entered an order and final judgment approving this settlement. The amount of the settlement is not material to PNC. Securities and State Law Fiduciary Cases In the lawsuit filed in April 2008 in the Cuyahoga County, Ohio, Court of Common Pleas against National City, the parties entered into a settlement agreement in April 2010. The court has preliminarily approved the settlement. The settlement is subject to, among other things, notice to the proposed class and final court approval. A final settlement hearing is scheduled for June 2010. The amount of the settlement would not be material to PNC. In the lawsuit filed in August 2008 in the Palm Beach County, Florida, Circuit Court and now pending in the United States District Court for the Northern District of Ohio, the parties reached a tentative settlement in March 2010, which is subject to, among other things, documentation, notice to the proposed class and court approval. The amount of the settlement would not be material to PNC. In October 2008, a lawsuit was filed in the United States District Court for the Western District of Pennsylvania against National City. In December 2008, the complaint was amended to add as defendants Corsair Capital, LLC, Corsair NC Co-Invest, L.P. and unnamed other investors participating in the April 2008 capital infusion into National City. As amended, the lawsuit was brought as a class action on behalf of all shareholde

COMMITMENTS AND GUARANTEES

COMMITMENTS AND GUARANTEES
	3 Months Ended Mar. 31, 2010
COMMITMENTS AND GUARANTEES	NOTE 18 COMMITMENTS AND GUARANTEES EQUITY FUNDING AND OTHER COMMITMENTS Our unfunded commitments at March31, 2010 included private equity investments of $440 million and other investments of $64 million. STANDBY LETTERS OF CREDIT We issue standby letters of credit and have risk participations in standby letters of credit and bankers acceptances issued by other financial institutions, in each case to support obligations of our customers to third parties, such as remarketing programs for customers variable rate demand notes. Net outstanding standby letters of credit totaled $10.1 billion at March31, 2010 and $10.0 billion at December31, 2009. Based on PNCs internal risk rating process for standby letters of credit as of March31, 2010, 87% of the net outstanding balance had internal credit ratings of pass, indicating the expected risk of loss is currently low, compared with 86% as of December31, 2009. At March31, 2010, 13% of the net outstanding balance had internal risk ratings below pass, indicating a higher degree of risk of default, compared with 14% as of December31, 2009. If the customer fails to meet its financial or performance obligation to the third party under the terms of the contract or there is a need to support a remarketing program, then upon the request of the guaranteed party, we would be obligated to make payment to them. The standby letters of credit and risk participations in standby letters of credit and bankers acceptances outstanding on March31, 2010 had terms ranging from less than 1 year to 9 years. The aggregate maximum amount of future payments PNC could be required to make under outstanding standby letters of credit and risk participations in standby letters of credit and bankers acceptances was $13.0 billion at March31, 2010, of which $6.0 billion support remarketing programs. As of March31, 2010, assets of approximately $1.2 billion secured certain specifically identified standby letters of credit. Approximately $2.9 billion in recourse provisions from third parties was also available for this purpose as of March31, 2010. In addition, a portion of the remaining standby letters of credit and letter of credit risk participations issued on behalf of specific customers is also secured by collateral or guarantees that secure the customers other obligations to us. The carrying amount of the liability for our obligations related to standby letters of credit and risk participations in standby letters of credit and bankers acceptances was $259 million at March31, 2010. STANDBY BOND PURCHASE AGREEMENTS AND OTHER LIQUIDITY FACILITIES We enter into standby bond purchase agreements to support municipal bond obligations. At March31, 2010, the aggregate of our commitments under these facilities was $400 million. We also enter into certain other liquidity facilities to support individual pools of receivables acquired by commercial paper conduits. At March31, 2010 our total commitments under these facilities were $145 million. INDEMNIFICATIONS As further described in our 2009 Form 10-K, we are a party to numerous acquisition or divestiture agreements under which we have purchased or sold, or agreed to purcha

SEGMENT REPORTING

SEGMENT REPORTING
	3 Months Ended Mar. 31, 2010
SEGMENT REPORTING	NOTE 19 SEGMENT REPORTING We have six reportable business segments: Retail Banking Corporate Institutional Banking Asset Management Group Residential Mortgage Banking BlackRock Distressed Assets Portfolio Results of individual businesses are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of our individual businesses are not necessarily comparable with similar information for any other company. We refine our methodologies from time to time as our management accounting practices are enhanced and our businesses and management structure change. As a result of its pending sale, GIS is no longer a reportable business segment. Financial results are presented, to the extent practicable, as if each business operated on a stand-alone basis. As permitted under GAAP, we have aggregated the business results for certain similar operating segments for financial reporting purposes. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product maturities, duration and other factors. Capital is intended to cover unexpected losses and is assigned to the banking and servicing businesses using our risk-based economic capital model. We have assigned capital to Retail Banking equal to 6% of funds to approximate market comparables for this business. We have allocated the allowances for loan and lease losses and unfunded loan commitments and letters of credit based on our assessment of risk inherent in each business segments loan portfolio. Our allocation of the costs incurred by operations and other shared support areas not directly aligned with the businesses is primarily based on the use of services. Total business segment financial results differ from consolidated income from continuing operations before noncontrolling interests and exclude the earnings and revenue attributable to GIS. The impact of these differences is reflected in the Other category in the business segment tables. Other includes residual activities that do not meet the criteria for disclosure as a separate reportable business, such as gains or losses related to BlackRock transactions including LTIP share distributions and obligations, integration costs, asset and liability management activities including net securities gains or losses and certain trading activities, exited businesses, equity management activities, alternative investments, intercompany eliminations, most corporate overhead, and differences between business segment performance reporting and financial statement reporting (GAAP), including the presentation of net income attributable to noncontrolling interests. Assets, revenue and earnings attributable to foreign activities were not material in the periods presented for comparative purposes. BUSINESS SEGMENT PRODUCTS AND SERVICES Retail Banking provides deposit, lending, brokerage, trust, investment management, and cash management service

SUBSEQUENT EVENT

SUBSEQUENT EVENT
	3 Months Ended Mar. 31, 2010
SUBSEQUENT EVENT	NOTE 20 SUBSEQUENT EVENT After exchanging its TARP Warrant, described in Note 14 Total Equity And Other Comprehensive Income, for 16,885,192 warrants, each to purchase one share of PNC common stock, the US Treasury sold the warrants in a secondary public offering. The sale closed on May5, 2010.