Fitch Affirms PNC Financial Services' 'A' IDR On Mercantile Buy.

CHICAGO -- Fitch has affirmed all ratings of PNC Financial Services Group Inc. (PNC) and its affiliates following the announcement that PNC has reached an agreement to buy Mercantile Bankshares Corporation (Mercantile) of Baltimore, Maryland. The Rating Outlook remains Stable. A complete list of ratings follows at the end of this release.

Fitch views the proposed transaction positively. The acquisition of Mercantile, a $17 billion asset company with 240 offices in Maryland and adjacent states, will strengthen PNC's franchise in the mid-Atlantic area. The combined organization will be the second largest bank by deposit market share in Maryland and sixth largest in Virginia.Mercantile's core franchises of commercial banking, retail banking and wealth management fit well with PNC's existing businesses.

Mercantile shareholders will receive a combination of $2.1 billion in cash and PNC shares, for a total transaction value of $6 billion, for a multiple of 2.62 times book value. Management has targeted cost saves of $108 million, which represents roughly 25% of Mercantile's annual expense base. The transaction is expected to close in early 2007 and is projected to become accretive in 2008.

The consummation of the BlackRock/Merrill Lynch Investment Managers (MLIM) merger at the end third quarter-2006 resulted in a substantial upward revaluation of PNC's cost basis in BlackRock and in its total capital. This transaction will deploy most of the increase in capital. PNC expects tangible common equity of the combined firm at closing to be slightly higher than management's target of 5.5%. Fitch believes that this capital target is reasonable given PNC's risk profile and current rating level.

Risks related to the merger include some level of integration risk. This occurs at the same time that PNC faces indirect merger execution risk from the BlackRock/MLIM merger. Still, Fitch notes that PNC is an experienced acquirer and expects it the company to execute the transaction without significant problems.

At the close of the transaction Fitch anticipates that it will assign ratings to existing deposits, senior and subordinated debt of Mercantile and its affiliates. Ratings assigned will mirror those assigned to similar obligations of PNC and its subsidiaries.

Fitch has affirmed the following ratings with a Stable Outlook:

PNC Financial Services Group

--Long-term Issuer Default Rating (IDR) 'A';

--Long-term subordinated 'A-';

--Preferred stock 'A-'

--Short-term Issuer 'F1';

--Individual `B';

--Support '5'.

PNC Bank N.A.

--Long-term deposits 'A+';

--Long-term Issuer Default Rating (IDR) 'A';

--Long-term senior unsecured 'A';

--Long-term subordinated 'A-';

--Short-term Issuer'F1';

--Short-term deposits 'F1';

--Individual `B';

--Support '4'.

PNC Bank Delaware

--Long-term deposits 'A+';

--Long-term Issuer Default Rating (IDR) 'A';

--Short-term Issuer 'F1';

--Short-term deposits 'F1';

--Individual `B';

--Support '4'.

PNC Funding Corp

--Long-term Issuer Default Rating (IDR) 'A';

--Long-term senior unsecured 'A';

--Long-term subordinated 'A-';

--Short-term Issuer 'F1';

--Individual `B' ;

--Support '5'.

PNC Financial Corp.

--Long-term subordinated 'A-'.

Riggs National Corporation

--Long-term subordinated 'A-'.

PNC Capital Trust C, D

PNC Institutional Capital Trust A, B

Riggs Capital

Riggs Capital II

UNB Capital Trust I

--Trust preferred 'A-'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.