PNC Bank 2005 Annual Report Download - page 3

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RETAIL BANKING
Retail Banking provides deposit, lending, brokerage, trust,
investment management and cash management services to
approximately 2.5 million consumer and small business
customers within our primary geographic area.
Our goal is to generate sustainable revenue growth by
consistently increasing our customer base. We seek additional
revenue growth by attempting to sell additional products and
services to these customers. In addition, we are focused on
optimizing our network of branches by opening stand-alone and
in-store branches in attractive sites while consolidating or selling
branches with less opportunity for growth.
We acquired Riggs National Corporation (“Riggs”), a
Washington, D.C. based banking company, effective May 13,
2005. The acquisition gives us a substantial presence on which
to build a market leading franchise in the affluent Washington,
D.C. metropolitan area. In connection with the acquisition,
Riggs shareholders received an aggregate of approximately
$297 million in cash and 6.6 million shares of PNC common
stock valued at $356 million.
We completed our acquisition of United National Bancorp, Inc.
(“United National”) on January 1, 2004. United National
shareholders received an aggregate of approximately $321
million in cash and 6.6 million shares of our common stock
valued at $360 million.
CORPORATE & INSTITUTIONAL BANKING
Corporate & Institutional Banking provides lending, treasury
management, and capital markets products and services to
mid-sized corporations, government entities and selectively to
large corporations. Lending products include secured and
unsecured loans, letters of credit and equipment leases.
Treasury management services include cash and investment
management, receivables management, disbursement services,
funds transfer services, information reporting and global trade
services. Capital markets products and services include
foreign exchange, derivatives, loan syndications, mergers and
acquisitions advisory and related services to middle-market
companies, securities underwriting, and securities sales and
trading. Corporate & Institutional Banking also provides
commercial loan servicing, real estate advisory and
technology solutions for the commercial real estate finance
industry. Corporate & Institutional Banking provides products
and services generally within our primary geographic markets
and provides certain products and services nationally.
On October 11, 2005, we acquired Harris Williams & Co., one
of the nation’ s largest firms focused on providing mergers and
acquisitions advisory and related services to middle market
companies, including private equity firms and private and
public companies.
Corporate & Institutional Banking is focused on becoming a
premier provider of financial services in each of the markets it
serves. Its value proposition to its customers is driven by
providing a broad range of competitive and high quality
products and services by a team fully committed to delivering
the comprehensive resources of PNC to help that client
succeed. Corporate & Institutional Banking’ s primary goals
are market share growth and enhanced returns by expansion
and retention of customer relationships and prudent risk and
expense management.
BLACKROCK
BlackRock, Inc. (“BlackRock”) is one of the largest publicly
traded investment management firms in the United States,
with approximately $453 billion of assets under management
at December 31, 2005. BlackRock provides diversified
investment management services to institutional and
individual investors worldwide through a variety of fixed
income, cash management, equity and alternative investment
products. Mutual funds include the flagship fund families,
BlackRock Funds and BlackRock Liquidity Funds. In addition,
BlackRock provides risk management, investment system
outsourcing and financial advisory services to institutional
investors under the BlackRock Solutions brand name.
On February 15, 2006, we announced that BlackRock and
Merrill Lynch & Co., Inc. (“Merrill Lynch”) had entered into a
definitive agreement pursuant to which Merrill Lynch will
contribute its investment management business to BlackRock
in exchange for newly issued BlackRock common and
preferred stock. Upon the closing of this transaction, which
we expect to occur on or around September 30, 2006,
BlackRock’ s assets under management will increase to almost
$1 trillion and Merrill Lynch will own an approximate 49%
economic interest in BlackRock. We will continue to own
approximately 44.5 million shares of BlackRock common
stock, representing an ownership interest of approximately
34%. In addition, upon closing, our investment in BlackRock
will increase resulting in an after-tax gain of approximately
$1.6 billion, subject to adjustments through closing. This gain
will significantly improve our capital position.
This transaction must be approved by BlackRock shareholders
and is subject to obtaining appropriate regulatory and other
approvals. We currently control more than 80% of the voting
interest in BlackRock and will vote our interest in support of
the transaction. Additional information on this transaction is
included in Note 26 Subsequent Event in the Notes To
Consolidated Financial Statements in Item 8, in our Current
Reports on Form 8-K filed February 15, 2006 and February
22, 2006, and in BlackRock’ s Current Reports on Form 8-K
filed February 15, 2006 and February 22, 2006.
Effective January 31, 2005, BlackRock acquired SSRM
Holdings, Inc. (“SSRM”), the holding company of State Street
Research & Management Company and SSR Realty Advisors
Inc. (subsequently renamed BlackRock Realty Advisors, Inc.),
from MetLife, Inc. for an adjusted purchase price of
approximately $265 million in cash and approximately
550,000 shares of BlackRock restricted class A common stock
valued at $37 million. Additional cash consideration may be
paid contingent on certain matters as described in Note 2
Acquisitions in the Notes To Consolidated Financial
Statements in Item 8. SSRM, through its subsidiaries, actively
manages stock, bond, balanced and real estate portfolios for
both institutional and individual investors. Substantially all of
SSRM’ s operations were integrated into BlackRock as of the
closing date. BlackRock acquired assets under management
totaling $50 billion in connection with this transaction.