PNC Bank 2006 Annual Report Download - page 4

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2 PNC 2006 ANNUAL REPORT
The PNC Financial Services Group delivered remarkable results in
2006, with record reported earnings of $2.6 billion, or $8.73 per
diluted share. We executed on our five strategies to win by expanding
our customer base, leveraging our market leadership, improving our
operating leverage, investing to grow our company and managing risk
to drive consistent growth. At the same time, we unlocked a portion
of the tremendous value of our BlackRock investment for PNC
shareholders and continued our strong support for the community
and the environment.
Our business model drove year-over-year net income growth by 14 percent on an
adjusted basis*. We grew customers, revenue, average loans and average deposits.
At the end of 2006, PNC ranked among the top U.S. banks by deposits and asset size.
Our results, combined with our demonstrated ability to deliver on our promises,
established PNC as a great investment. The price of PNC stock increased 20 percent
in 2006. That helped push total shareholder return to 24 percent, third highest among
our peers for the year. We were first among our peers for the period of Jan. 1, 2004
to Dec. 31, 2006.
All 23,800 PNC employees contributed to these achievements. In 2006, they again
demonstrated how they are the key link in the PNC value chain by suggesting new
procedures to make banking easier, finding new revenue opportunities and uncovering
new ways to reduce expenses on our collective journey to build a great company.
Succeeding in Our Strategies to Win
We mapped our route to that goal over the past four years. Along the way, we focused
on five strategies that we believe will propel us to long-term success. Each strategy
provided its own contribution to our winning results in 2006:
We continue to grow our customer base. To increase satisfaction and attract higher
value checking relationships to our Retail Banking segment, we were one of the first
major banks to offer access to free ATMs worldwide. We simplified our checking
products and reached beyond our traditional banking territory through online
banking. We launched a new PNC-branded credit card and enhanced our merchant
services offerings.
During 2006, we drove an initiative to target the mass affluent within our existing
customer base. Our superior information technology enabled us to identify more
than 680,000 current PNC households with investable assets of between $100,000
and $1 million, and we strengthened our Private Client Group specifically to provide
these customers with a differentiated level of service.
JAMES E. ROHR
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
TO OUR SHAREHOLDERS