PNC Bank 2003 Annual Report Download - page 6

important issue is how well a company
can differentiate itself to profitably
grow its customer base.
Clearly, we believe PNC has built
the scale and expertise to compete
and win on this front — in each of our
businesses and each of our markets.
Our confidence is rooted in our
proven ability to execute over time
and in the strategic plan we developed.
Simply put, we plan to expand our
high-performing banking franchise
and grow our global asset management
and processing businesses.
We launched several initiatives
to bring this plan to life in 2003. In
particular, we took important steps to
leverage our successful regional banking
model in high-growth markets.
We completed the acquisition of
United National Bancorp on the first
day of 2004. This franchise adds more
than 50 branches and more than 100,000
new customers in attractive regions of
central New Jersey and the Lehigh Valley
of Pennsylvania.
We believe this acquisition
provides growth opportunities for all
of our banking businesses. In addition,
to further our growth in New Jersey,
we also plan to open offices in 40 Stop
& Shop supermarket locations. When
combined with the new United National
branches, our branch presence in
that demographically attractive state
should expand by one-third over the
next five years.
Growing PNC
Beyond the acquisition of United
National, we made notable progress in
all of our businesses in 2003.
•Regional Community Banking
increased checking customer relation-
ships by four percent, and grew home
equity loans by 17 percent.
•BlackRock grew net income by
17 percent and increased assets under
management by 13 percent to $309 billion.
value in what has become a more
dynamic financial services industry.
•We continued to enhance our
performance-driven culture. Through our
Chairman’s Challenge referral program,
non-sales employees generated the same
amount of deposits in 10 months as four
typical branches would in one year.
•We made further enhancements
to our risk management systems and
corporate governance. As a result, we
dramatically improved asset quality, and
Standard & Poors, Moody’s and Fitch
upgraded our debt rating outlook.
Separately, our banking regulators lifted
their written agreements related to the
restatement of our 2001 earnings. We also
reached an agreement with the Department
of Justice regarding these events. With
these challenges behind us, we are pleased
that we have been able to return our
complete attention to growing PNC.
•We strived to become even
more integral to the communities we
serve. We introduced PNC Grow Up
Great, a 10-year, $100 million program
to improve school readiness, one
of our nation’s most critical issues.
PNC Grow Up Great is one of the
most comprehensive corporate school
readiness programs in the country.
Winning in a Highly
Competitive Industry
With recent mergers forming
financial services firms that near or top
$1 trillion in assets, some have asked
what it will take to compete in our
industry. We do not believe that size
alone dictates success. To us, the more
We will maintain a disciplined approach to
investing your capital moving forward — one
designed to provide us with the flexibility to
compete and create value in what has become
a more dynamic financial services industry.
4