PNC Bank 2007 Annual Report Download - page 8

Hilliard Lyons in 1998. We expect this transaction to close in
the first half of 2008, subject to regulatory and certain other
required approvals.
On October 26, 2007, we acquired Hamilton, New Jersey-
based Yardville National Bancorp (“Yardville”). Total
consideration paid was approximately $399 million in stock
and cash. Yardville’s subsidiary bank, The Yardville National
Bank (“Yardville National Bank”), is a commercial and
consumer bank and at closing had approximately $2.6 billion
in assets, $2.0 billion in deposits and 35 branches in central
New Jersey and eastern Pennsylvania. We plan to merge
Yardville National Bank into PNC Bank, National Association
(“PNC Bank, N.A.”) in the first quarter of 2008.
On July 19, 2007, we entered into a definitive agreement with
Sterling Financial Corporation (“Sterling”) for PNC to acquire
Sterling for approximately 4.5 million shares of PNC common
stock and $224 million in cash. Sterling, based in Lancaster,
Pennsylvania with approximately $3.2 billion in assets and $2.7
billion in deposits, provides banking and other financial services,
including leasing, trust, investment and brokerage, to individuals
and businesses through 67 branches in Pennsylvania, Maryland
and Delaware. We expect this transaction to close in the second
quarter of 2008, subject to customary closing conditions and the
approval of Sterling’s shareholders.
On July 2, 2007, we acquired ARCS Commercial Mortgage
Co., L.P. (“ARCS”), a Calabasas Hills, California-based
lender with 10 origination offices in the United States. ARCS
has been a leading originator and servicer of agency
multifamily loans for the past decade. It originated more than
$2.1 billion of loans in 2006 and services approximately $13
billion of commercial mortgage loans.
On March 2, 2007, we acquired Mercantile Bankshares
Corporation (“Mercantile”). Total consideration paid was
approximately $5.9 billion in stock and cash. Mercantile has
added banking and investment and wealth management services
through 235 branches in Maryland, Virginia, the District of
Columbia, Delaware and southeastern Pennsylvania. This
transaction has significantly expanded our presence in the
mid-Atlantic region, particularly within the attractive Maryland,
Northern Virginia and Washington, DC markets.
Our acquisition of Mercantile added approximately $21 billion of
assets and $12.5 billion of deposits to our Consolidated Balance
Sheet. Our Consolidated Income Statement includes the impact
of Mercantile subsequent to our March 2, 2007 acquisition.
We include information on significant recent and pending
acquisitions and divestitures in Note 2 Acquisitions and
Divestitures in the Notes To Consolidated Financial
Statements in Item 8 of this Report and here by reference.
REVIEW OF LINES OF BUSINESS In addition to the following
information relating to our lines of business, we incorporate
information under the captions Line of Business Highlights,
Product Revenue, Leases and Related Tax Matters, and
Business Segments Review in Item 7 of this Report here by
reference. Also, we include financial and other information by
business in Note 26 Segment Reporting in the Notes To
Consolidated Financial Statements in Item 8 of this Report
here by reference. We have four major businesses engaged in
providing banking, asset management and global fund
processing products and services: Retail Banking;
Corporate & Institutional Banking; BlackRock; and PFPC.
Assets, revenue and earnings attributable to foreign activities
were not material in the periods presented.
R ETAIL B ANKING
Retail Banking provides deposit, lending, brokerage, trust,
investment management, and cash management services to
approximately 2.9 million consumer and small business
customers within our primary geographic markets. Our
customers are serviced through over 1,100 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, Washington, DC, Maryland,
Virginia, Ohio, Kentucky and Delaware. Brokerage services are
provided through PNC Investments, LLC, and Hilliard Lyons.
See the Business Overview section of this Item 1 regarding our
planned divestiture of Hilliard Lyons in the first half of 2008.
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. These services are provided to individuals and
corporations primarily within our primary geographic markets.
Our core strategy is to acquire and retain customers who maintain
their primary checking and transaction relationships with PNC.
We also seek revenue growth by deepening our share of our
customers’ financial assets and needs, including savings and
liquidity deposits, loans and investable assets. A key element of
our strategy is to continue to optimize our physical distribution
network by opening and upgrading stand-alone and in-store
branches in attractive sites while consolidating or selling
branches with less opportunity for growth.
C ORPORATE &I NSTITUTIONAL B ANKING
Corporate & Institutional Banking provides lending, treasury
management, and capital markets-related 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. We also
provide commercial loan servicing, real estate advisory and
technology solutions for the commercial real estate finance
industry. We provide products and services generally within
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