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Three MonthsSix Months Ended EndedJune 30June 30 ——————– 2009200820092008 —————- Numerator 2 Income

June 18, 2010 Health No Comments

Three MonthsSix Months Ended EndedJune 30,June 30, ——————– 2009200820092008 —————- Numerator (2) Income from continuingoperations attributable toGoodrich$145.9$183.6$315.2$337.2 Percentage allocated to commonshareholders98.6% 98.6% 98.6% 98.6%—————-$143.9$181.0$310.8$332.4 Denominator (2) Weighted-average shares 123.9 125.2 123.9 125.1 Effect of dilutive securities 1.1 1.4 0.8 1.4 — — — — Adjusted weighted-average sharesand assumed conversion 125.0 126.6 124.7 126.5 ===== ===== ===== ===== Per share income from continuingoperations Basic $1.16 $1.45 $2.51 $2.65 ===== ===== ===== ===== Diluted $1.15 $1.43 $2.49 $2.62 ===== ===== ===== =====(2) On January 1, 2009, Goodrich adopted FASB Staff Position No. Treasury securities,partially offset by sales of agency residential mortgage-backed securities andmaturities and prepayments. The June 30, 2009 investment securities balanceincluded a net unrealized pretax loss of $3.8 billion representing thedifference between fair value and amortized cost compared with a netunrealized pretax loss of $4.4 billion at March 31, 2009. The lower unrealizedpretax loss was primarily the result of improving market liquidity ofcommercial and nonagency residential mortgage-backed securities.Average deposits were $193 billion for the second quarter of 2009 comparedwith $192 billion in the linked quarter. Average money market,interest-bearing demand and savings deposits increased $4.5 billion, or 6percent, during the second quarter as a result of relationship growth in manyof PNC’s markets. At June 30,2009, residential mortgages comprised 62 percent of total loans held for saleand commercial mortgages represented 33 percent.Average investment securities for the second quarter of 2009 were $51 billion,an increase of 3 percent compared with the linked quarter. Total loan originations and new commitmentsand renewals were approximately $29 billion in the second quarter of 2009,including $6.4 billion of originations for first mortgages, and were $26billion in the first quarter of 2009.Average loans held for sale increased to $4.8 billion in the second quarter of2009 compared with $4.5 billion for the first quarter of 2009.

Reduced loandemand as well as paydowns and lower utilization levels on commercial loanscontributed to the decreases. PNC is committed to providing credit andliquidity to qualified borrowers. The decrease was primarily due to a decline in loan demandsomewhat offset by an increase in lower risk investment securities.Average loans were $169 billion for the quarter and decreased $4.9 billion, or3 percent, compared with the first quarter of 2009 mainly as a result of a$3.7 billion, or 5 percent, decline in average commercial loans and a $.7billion, or 1 percent, decline in average consumer credits. Annualizedacquisition cost savings of approximately $500 million were realized by thesecond quarter of 2009, on track to achieve the $1.2 billion two-year goal ofreducing combined company annualized noninterest expense.CONSOLIDATED BALANCE SHEET REVIEW Total assets were $280 billion at June 30, 2009 compared with $286 billion atMarch 31, 2009. The linked quarter increase of $330 million included aspecial FDIC assessment of $133 million and integration costs of $125 million.Integration costs in noninterest expense were $13 million for the secondquarter of 2008 and $52 million in the first quarter of 2009. First quarter 2009 included a gain of $103 million related to PNC’sBlackRock long-term incentive plan (LTIP) programs shares obligation.

Therewas no impact from the LTIP obligation in the second quarter of 2009 as aresult of the first quarter 2009 restructuring of PNC’s ownership of BlackRockequity.CONSOLIDATED EXPENSE REVIEWNoninterest expense for the second quarter of 2009 was $2.7 billion comparedwith $1.1 billion in the prior year second quarter and $2.3 billion for thefirst quarter of 2009. Second quarter 2009 securities gainsrelated primarily to sales of agency residential mortgage-backed securities.Improved asset valuations resulted in better trading results and lower losseson private equity and alternative investments compared with the linkedquarter. Asset management revenue,corporate and consumer service fees, and service charges on deposits increasedin the comparison.Asset sales included net securities gains of $182 million for the secondquarter of 2009 compared with $8 million for the second quarter of 2008 and$56 million in the first quarter of 2009. Noninterest income increased 15 percent compared with thelinked quarter primarily due to higher gains on asset sales, improved assetvaluations and customer-related fee income somewhat offset by lower net gainson hedging residential mortgage servicing rights. The decrease in net interest income andmargin in the linked quarter comparison was primarily due to a reduction inloan demand partially offset by lower deposit rates and borrowing costs.

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