PNC and Riggs Negotiate Revised Merger Agreement

Business Wire, Feb 10, 2005

PITTSBURGH & WASHINGTON -- First graph, second sentence of release should read: Under the terms of the amended agreement, PNC will acquire Riggs for $20.00 per common share, or approximately $652 million (sted Under the terms of the amended agreement, PNC will acquire Riggs for $20.00 per common share, or approximately $654 million).

The corrected release reads:

PNC AND RIGGS NEGOTIATE REVISED MERGER AGREEMENT

The PNC Financial Services Group, Inc. (NYSE:PNC) and Riggs National Corporation (NASDAQ:RIGS) today announced that, as a result of their renewed negotiations, they have amended and restated the agreement for PNC to acquire Riggs. Under the terms of the amended agreement, PNC will acquire Riggs for $20.00 per common share, or approximately $652 million.

"We are looking forward to our entry into the extremely appealing Washington, D.C. marketplace, and we are confident that the Riggs franchise will provide us with an excellent platform from which to grow," said James E. Rohr, chairman and chief executive officer of The PNC Financial Services Group. "We have assessed the remaining risks to Riggs, and we believe we have reached a revised agreement that is fair to all parties."

PNC expects the financial impact of the transaction, including the anticipated internal rate of return and the impact on PNC's earnings per share, not to differ materially from previously announced expectations regarding the original transaction structure.

Under the restated terms of the merger agreement, which has been approved by the Boards of Directors of both companies, Riggs National Corporation will merge into The PNC Financial Services Group, Inc. and PNC Bank N.A. will acquire the assets of Riggs Bank N.A. This change in structure was effected to mitigate the potential business impact of Riggs Bank's plea agreement with the Department of Justice.

The amended agreement, which is substantially similar to the original agreement, values each share of Riggs common stock at approximately $20.00 based on PNC's closing NYSE stock price of $54.58 on February 7, 2005. The aggregate consideration is composed of a fixed number of approximately 6.4 million shares of PNC common stock and $286 million in cash in exchange for all 31.8 million Riggs common shares outstanding, subject to adjustment. Riggs stock options, currently with an aggregate in-the-money value of approximately $16 million, will be cashed out prior to closing, if not exercised. Riggs has agreed to dismiss its recently filed lawsuit against PNC.

The transaction is expected to close as soon as possible, and either party may terminate the agreement after May 31, 2005 if the transaction has not closed. The merger remains subject to customary closing conditions, including regulatory approvals and the approval of Riggs shareholders, the receipt of exemptions from the Department of Labor and the SEC to mitigate the potential business impact of Riggs Bank's plea agreement with the Department of Justice and the absence of an undisclosed material adverse effect after December 31, 2004. Mr. Joe L. Allbritton's agreement to vote 24.6% of the outstanding shares of Riggs in favor of the transaction remains applicable.

Sandler O'Neill & Partners L.P. acted as the financial advisor to PNC and Wachtell, Lipton, Rosen & Katz acted as its legal advisor. Lehman Brothers, Inc. acted as the financial advisor to Riggs and Sullivan & Cromwell LLP acted as its legal advisor.

FORWARD-LOOKING STATEMENT

This press release contains forward-looking statements reflecting PNC's outlook or expectations with respect to the planned acquisition of Riggs, the expected costs to be incurred in connection with the acquisition, Riggs's future performance, and the consequences of the integration of Riggs into PNC. Forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. The forward-looking statements in this press release speak only as of the date of this press release, and PNC assumes no duty and does not undertake to update them.

In addition to factors previously disclosed in PNC's SEC reports (accessible on the SEC website at www.sec.gov and on PNC's website at www.pnc.com) applicable to PNC's business generally (including, upon the acquisition, those aspects currently operated by Riggs), the forward-looking statements in this press release are subject to the following risks and uncertainties:

--Completion of the transaction is dependent on, among other things, receipt of stockholder and regulatory approvals, the timing of which cannot be predicted with precision at this point and which may not be received at all.

--The benefits to PNC of the transaction also depend on the nature of any future developments with respect to Riggs's regulatory and legal issues, the ability to comply with the terms of all current or future requirements, including any related action plan, resulting from these issues, and the extent of related costs.

--The transaction may be materially more expensive to complete than anticipated as a result of unexpected factors or events.