PNC Bank 2006 Annual Report Download - page 119

We have allocated the allowances for loan and lease losses
and unfunded loan commitments and letters of credit based on
our assessment of risk inherent in the loan portfolios. Our
allocation of the costs incurred by operations and other
support areas not directly aligned with the businesses is
primarily based on the use of services.
Total business segment financial results differ from total
consolidated results. The impact of these differences is
reflected in the “Intercompany Eliminations” and “Other”
categories. “Intercompany Eliminations” reflects activities
conducted among our businesses that are eliminated in the
consolidated results. “Other” includes residual activities that
do not meet the criteria for disclosure as a separate reportable
business, such as gains or losses related to BlackRock, 2006
BlackRock/MLIM integration costs, One PNC implementation
costs, asset and liability management activities, related net
securities gains or losses, certain trading activities, equity
management activities and minority interest in income of
BlackRock up to September 29, 2006, differences between
business segment performance reporting and financial
statement reporting (GAAP), and most corporate overhead.
Assets, revenue and earnings attributable to foreign activities
were not material in the periods presented.
B USINESS S EGMENT P RODUCTS A ND S ERVICES
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 customers
are serviced through approximately 850 offices in our branch
network, the call center located in Pittsburgh and the Internet
–www.pncbank.com. The branch network is located primarily
in Pennsylvania; New Jersey; the greater Washington, DC
area, including Maryland and Virginia; Ohio; Kentucky; and
Delaware. Brokerage services are provided through PNC
Investments, LLC, and J.J.B. Hilliard, W.L. Lyons, Inc. Retail
Banking also serves as investment manager and trustee for
employee benefit plans and charitable and endowment assets
and provides nondiscretionary defined contribution plan
services and investment options through its Vested Interest®
product. These services are provided to individuals and
corporations primarily within our primary geographic markets.
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-related 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,
with certain products and services provided nationally.
BlackRock is one of the world’s largest publicly traded
investment management firms. As of December 31, 2006,
BlackRock’s assets under management were approximately
$1.1 trillion. The firm manages assets on behalf of institutions
and individuals worldwide through a variety of equity, fixed
income, cash management and alternative investment
products. In addition, BlackRock provides BlackRock
Solutions®investment system, risk management, and financial
advisory services to a growing number of institutional
investors. The firm has a major presence in key global
markets, including the United States, Europe, Asia, Australia
and the Middle East.
See Note 2 Acquisitions regarding the BlackRock/MLIM
transaction.
PFPC is a leading full service provider of processing,
technology and business solutions for the global investment
industry. Securities services include custody, securities
lending, and accounting and administration for funds
registered under the 1940 Act and alternative investments.
Investor services include transfer agency, managed accounts,
subaccounting, and distribution. PFPC serviced $2.2 trillion in
total assets and 68 million shareholder accounts as of
December 31, 2006 both domestically and internationally
through its Ireland and Luxembourg operations.
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