PNC Bank 2007 Annual Report Download - page 7

TABLE OF CONTENTS
PART I Page
Item 1 Business. 2
Item 1A Risk Factors. 9
Item 1B Unresolved Staff Comments. 12
Item 2 Properties. 12
Item 3 Legal Proceedings. 12
Item 4 Submission of Matters to a Vote of
Security Holders. 14
Executive Officers of the Registrant 14
Directors of the Registrant 15
PART II
Item 5 Market for Registrant's Common Equity,
Related Stockholder Matters and Issuer
Purchases of Equity Securities. 15
Common Stock Performance Graph 16
Item 6 Selected Financial Data. 17
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of
Operations 19
Item 7A Quantitative and Qualitative Disclosures
About Market Risk. 64
Item 8 Financial Statements and Supplementary
Data. 65
Item 9 Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure. 123
Item 9A Controls and Procedures. 123
Item 9B Other Information. 123
PART III
Item 10 Directors, Executive Officers and
Corporate Governance. 123
Item 11 Executive Compensation. 124
Item 12 Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters. 124
Item 13
Certain Relationships and Related
Transactions, and Director Independence. 126
Item 14 Principal Accounting Fees and Services. 126
PART IV
Item 15 Exhibits, Financial Statement Schedules. 126
SIGNATURES 127
EXHIBIT INDEX E-1
PART I
Forward-Looking Statements: From time to time, The PNC
Financial Services Group, Inc. (“PNC” or the “Corporation”)
has made and may continue to make written or oral forward-
looking statements regarding our outlook or expectations for
earnings, revenues, expenses, capital levels, asset quality or
other future financial or business performance, strategies or
expectations, or the impact of legal, regulatory or supervisory
matters on our business operations or performance. This
Annual Report on Form 10-K (the“Report” or “Form 10-K”)
also includes forward-looking statements. With respect to all
such forward-looking statements, you should review our Risk
Factors discussion in Item 1A and our Risk Management,
Critical Accounting Policies and Judgments, and Cautionary
Statement Regarding Forward-Looking Information sections
included in Item 7 of this Report.
ITEM 1– BUSINESS
BUSINESS OVERVIEW We are one of the largest diversified
financial services companies in the United States based on
assets, with businesses engaged in retail banking, corporate and
institutional banking, asset management and global fund
processing services. We provide many of our products and
services nationally and others in our primary geographic
markets located in Pennsylvania, New Jersey, Washington, DC,
Maryland, Virginia, Ohio, Kentucky and Delaware. We also
provide certain global fund processing services internationally.
At December 31, 2007, our consolidated total assets, deposits
and shareholders' equity were $138.9 billion, $82.7 billion and
$14.9 billion, respectively.
We were incorporated under the laws of the Commonwealth of
Pennsylvania in 1983 with the consolidation of Pittsburgh
National Corporation and Provident National Corporation. Since
1983, we have diversified our geographical presence, business
mix and product capabilities through internal growth, strategic
bank and non-bank acquisitions and equity investments, and the
formation of various non-banking subsidiaries.
ACQUISITION AND DIVESTITURE ACTIVITY On December 7,
2007, we acquired Albridge Solutions Inc. (“Albridge”), a
Lawrenceville, New Jersey-based provider of portfolio
accounting and enterprise wealth management services. Albridge
provides financial advisors with consolidated client account
information from hundreds of data sources, and its enterprise
approach to providing a unified client view and performance
reporting helps advisors build their client and asset base. Albridge
will extend PFPC’s capabilities into the delivery of knowledge-
based information services through its relationships with 150
financial institutions and more than 100,000 financial advisors
with assets under management that exceed $1 trillion.
Also on December 7, 2007, we acquired Coates Analytics, LP
(“Coates Analytics”), a Chadds Ford, Pennsylvania-based
provider of web-based analytic tools that help asset managers
identify wholesaler territories and financial advisor targets,
promote products in the marketplace and strengthen
competitive intelligence. Coates Analytics will complement
PFPC’s business strategy as it currently serves six of the 10
largest broker/dealers and provides market data to more than
40 of the leading asset management and fund companies.
On November 16, 2007, we entered into a definitive
agreement to sell J.J.B. Hilliard, W.L.Lyons, Inc. (“Hilliard
Lyons”), a wholly-owned subsidiary of PNC and a full-service
brokerage and financial services provider, to Houchens
Industries, Inc. Hilliard Lyons is headquartered in Louisville,
Kentucky and has 76 branch offices mainly in cities outside of
PNC’s retail banking footprint with approximately $29 billion
of brokerage account assets and $5 billion of assets under
management. As a result of the sale, we expect to report an
after-tax gain of approximately $20 million and increase
Tier 1 regulatory capital by approximately $135 million after
elimination of goodwill recorded upon the purchase of
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