PNC Bank 2005 Annual Report Download - page 78

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RIGGS NATIONAL CORPORATION
We acquired Riggs National Corporation (“Riggs”), a
Washington, D.C. based banking company, effective May 13,
2005. Under the terms of the agreement, Riggs merged into
The PNC Financial Services Group, Inc. and PNC Bank,
National Association (“PNC Bank, N.A.”) acquired
substantially all of the assets of Riggs Bank, National
Association, the principal banking subsidiary of Riggs. 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 our common stock
valued at $356 million. Our Consolidated Balance Sheet at
June 30, 2005 included $2.8 billion of loans, net of unearned
income, and $3.5 billion of deposits, including $.8 billion of
brokered certificates of deposit, related to Riggs.
HARRIS WILLIAMS & CO.
On October 11, 2005, we acquired Harris Williams & Co.
(“Harris Williams”), 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.
2004 ACQUISITIONS
UNITED NATIONAL BANCORP
We acquired United National Bancorp, Inc. (“United
National”) effective January 1, 2004 by merging United
National with and into our subsidiary, PNC Bancorp, Inc.
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. As a result of the
acquisition, we added $3.7 billion of assets, including $.6
billion of goodwill, $2.3 billion of deposits, $1.0 billion of
borrowed funds and $.4 billion of shareholders’ equity to our
Average Consolidated Balance Sheet for the quarter ended
March 31, 2004.
AVIATION FINANCE GROUP
On September 1, 2004, we acquired the business of the
Aviation Finance Group, LLC, an Idaho-based company that
specializes in loans to finance private aircraft. The purchase
agreement calls for a contingent payment at the end of the
fifth anniversary date that may be due if certain loan balances
and profitability targets are exceeded on a cumulative five-
year basis.
NOTE 3 VARIABLE INTEREST ENTITIES
We are involved with various entities in the normal course
of business that may be deemed to be VIEs. We
consolidated certain VIEs as of December 31, 2005 and
2004 for which we were determined to be the primary
beneficiary.
Information about the VIEs in which we hold significant
variable interests but have not consolidated and those VIEs
that we have consolidated in our financial statements
follows:
Non-Consolidated VIEs – Significant Variable Interests
In millions
Aggregate
Assets
Aggregate
Debt
PNC Risk
of Loss
December 31, 2005
Collateralized debt obligations (a) $6,290 $5,491 $51 (b)
Private investment funds (a) 5,186 1,051 13 (b)
Market Street 3,519 3,514 5,089 (c)
Partnership interests in
low income housing projects 35 29 2
Total $15,030 $10,085 $5,155
December 31, 2004
Collateralized debt obligations (a) $3,152 $2,700 $33 (b)
Private investment funds (a) 1,872 125 24 (b)
Partnership interests in
low income housing projects
37
28 4
Total $5,061 $2,853 $61
(a) Held by BlackRock.
(b) Includes both PNC’ s risk of loss and BlackRock’ s risk of loss, limited
to PNC’ s ownership interest in BlackRock.
(c) Includes off-balance sheet liquidity commitments to Market Street of
$4.6 billion and other credit enhancements of $444 million.
Consolidated VIEs – PNC Is Primary Beneficiary
In millions
Aggregate
Assets
Aggregate
Debt
December 31, 2005
Partnership interests in
low income housing projects $680 $680
Other 12 10
Total $692 $690
December 31, 2004
Market Street $2,167 $2,167
Partnership interests in
low income housing projects 504 504
Other 13 10
Total $2,684 $2,681
• BlackRock is involved with various entities in the
normal course of business that may be deemed to be
VIEs and may hold interests therein, including
investment advisory agreements and equity securities,
which may be considered variable interests.
BlackRock engages in these transactions principally
to address client needs through the launch of
collateralized debt obligations (“CDOs”) and private
investment funds. BlackRock has not been deemed
the primary beneficiary of these entities. Additional
information about BlackRock is available in its SEC
filings, which can be found at www.sec.gov and on
BlackRock’ s website, www.blackrock.com.