PNC Bank 2007 Annual Report Download - page 85

recovered in subsequent years. Our adoption of the
guidance in FSP FAS 13-2 resulted in an after-tax
charge to beginning retained earnings at January 1,
2007 of approximately $149 million.
N
OTE 2A CQUISITIONS AND D IVESTITURES
2007
Pending Sale of Hilliard Lyons
On November 16, 2007, we entered into a definitive
agreement to sell J.J.B. Hilliard, W.L.Lyons, Inc. (“Hilliard
Lyons”), a Louisville, Kentucky-based wholly-owned
subsidiary of PNC and a full-service brokerage and financial
services provider, to Houchens Industries, Inc. The transaction
is expected to be completed in the first half of 2008 subject to
regulatory and certain other required approvals.
Albridge Solutions Inc.
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 financial institutions
and financial advisors.
Coates Analytics, LP
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.
Yardville National Bancorp
On October 26, 2007 we acquired Hamilton, New Jersey-
based Yardville. Yardville shareholders received in the
aggregate approximately 3.4 million shares of PNC common
stock and $156 million in cash. Total consideration paid was
approximately $399 million in stock and cash. Yardville’s
subsidiary bank, Yardville National Bank, is a commercial
and consumer bank and at closing had approximately $2.6
billion in assets and $2.0 billion in deposits.
Sterling Financial Corporation
On July 19, 2007, we entered into a definitive agreement with
Lancaster, Pennsylvania-based Sterling Financial Corporation
(“Sterling”) for PNC to acquire Sterling for approximately
4.5 million shares of PNC common stock and $224 million in
cash. Based upon PNC’s closing common stock price on
July 17, 2007, the consideration represents $565 million in
stock and cash or approximately $19.00 per Sterling share.
The transaction is expected to close in the second quarter of
2008 and is subject to customary closing conditions, including
the approval of Sterling’s shareholders.
ARCS Commercial Mortgage Co., L.P.
On July 2, 2007, we acquired 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.
Mercantile Bankshares Corporation
Effective March 2, 2007, we acquired Mercantile Bankshares
Corporation (“Mercantile”). Mercantile shareholders received
.4184 shares of PNC common stock and $16.45 in cash for
each share of Mercantile, or in the aggregate approximately
53 million shares of PNC common stock and $2.1 billion in
cash. Total consideration paid was approximately $5.9 billion.
Our acquisition of Mercantile added approximately $21 billion
of assets to our Consolidated Balance Sheet, including $12.4
billion of loans, $4.4 billion of goodwill and $3.0 billion of
available for sale and trading securities. Loans added with this
acquisition included $4.8 billion of commercial real estate,
$4.9 billion of commercial, $1.1 billion of residential
mortgage and $1.6 billion of consumer loans. In addition, we
added $12.5 billion of deposits and $2.1 billion of borrowed
funds in connection with this acquisition. Our Consolidated
Income Statement includes the impact of Mercantile
subsequent to our March 2, 2007 acquisition.
2006
BlackRock/MLIM Transaction
On September 29, 2006, Merrill Lynch contributed its
investment management business (“MLIM”) to BlackRock in
exchange for 65 million shares of newly issued BlackRock
common and preferred stock. BlackRock accounted for the
MLIM transaction under the purchase method of accounting.
Immediately following the closing, PNC continued to own
44 million shares of BlackRock common stock representing
an ownership interest of 34% of the combined company (as
compared with 69% immediately prior to the closing).
Although PNC's share ownership percentage declined, PNC’s
investment in BlackRock increased due to the increase in total
equity recorded by BlackRock as a result of the MLIM
transaction.
Upon the closing of the BlackRock/MLIM transaction, the
carrying value of our investment in BlackRock increased by
$3.1 billion to $3.8 billion, primarily reflecting PNC's portion
of the increase in BlackRock’s equity resulting from the value
of shares issued in the transaction.
We also recorded a liability at September 30, 2006 for deferred
taxes of $.9 billion, related to the excess of the book value over
the tax basis of our investment in BlackRock, and a liability of
80