Hoefer & Arnett Starts PNC Financial at 'Reduce' SAN FRANCISCO, Dec. 15 /PRNewswire/ -- Hoefer & Arnett financial services analyst Chris Siedman initiated research coverage on PNC Financial Services (PNC) today with a $57 price target and a Reduce recommendation. The analyst cited both the company's slow-growing footprint, an expected decline in gains from loan sales, and potentially higher credit costs as possible reasons PNC's return on equity could drop next year to an estimated 16.4% from the 17% range where it has hovered since 2001 and the 20.6% average the company exhibited in the late 1990s. In addition, the analyst indicated that PNC may be overpaying in its pending acquisition of Riggs National (RIGS) in view of the Washington, D.C. based company's loss of customer deposits, falling net interest margin, and the 18% annualized rate of decline in non-interest revenue (excluding venture capital gains) from continuing operations over the last two quarters. Hoefer & Arnett estimates PNC could post core earnings of $1.01 per share in the fourth quarter and $4.32 next year (or $4.19 per diluted share on a GAAP basis). Trading (415) 658-0744 http://www.hoeferarnett.com/ All expressions of opinion reflect the judgment of the Research Department of Hoefer & Arnett, Inc. at this date and are subject to change. We have obtained information from sources considered reliable, but we do not guarantee that the foregoing report is accurate or complete. Other departments of Hoefer & Arnett, Inc may have information, which is not available to the Research Department about companies mentioned in this report. Hoefer & Arnett, Inc., or its affiliates may execute transactions in the securities mentioned in this report, which may not be consistent with the report's conclusions. Hoefer & Arnett, Inc. may perform investment banking or other services for, or solicit investment-banking business from any company mentioned in this report. Partners, officers, employees and accounts controlled by Hoefer & Arnett, Inc. may own shares of any company mentioned herein. Hoefer & Arnett Incorporated is a member of the National Association of Securities Dealers, CRD number 10883. DATASOURCE: Hoefer & Arnett Incorporated CONTACT: Chris Siedman, Analyst, +1-203-938-2695 or , or Sharlena Bolden, Research Coordinator, +1-415-362-7111 or , both of Hoefer & Arnett Incorporated Web site: http://www.hoeferarnett.com/

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