PNC Bank 2009 Annual Report Download - page 108

Condensed Statement of National City Net Assets
Acquired
The following condensed statement of net assets reflects the
revised values assigned to National City net assets as of the
December 31, 2008 acquisition date. The net assets acquired
are net of the cash paid by National City to its warrant holders
of $379 million.
In millions
Assets
Cash and due from banks $ 2,144
Federal funds sold and resale agreements 7,335
Trading assets, interest-earning deposits with banks,
and other short-term investments 9,244
Loans held for sale 2,185
Investment securities 13,327
Net loans 95,919
Other intangible assets 2,266
Equity investments 2,001
Other assets 13,665
Total assets $148,086
Liabilities
Deposits $103,594
Federal funds purchased and repurchase agreements 3,523
Other borrowed funds 22,138
Other liabilities 13,724
Total liabilities $142,979
Net assets acquired $ 5,107
Other intangible assets acquired consisted of the following (in millions):
Intangible Asset
Fair
Value
Weighted
Life
Amortization
Method
Residential mortgage servicing rights $1,019 (a) (a)
Core deposit 647 12 yrs. Accelerated
Commercial mortgage servicing rights 212 8 yrs. Accelerated
Asset management customer relationships 346 12 yrs. Straight-line
National City brand 27 21 mos. Straight-line
Consumer loan servicing rights 15 2 yrs. Accelerated
Total $2,266
(a) Intangible asset carried at fair value on a recurring basis.
Amortization expense related to the intangible assets in the
table above totaled $173 million in 2009. See Note 9 Goodwill
and Other Intangible Assets for additional information.
Purchase accounting adjustments include discounts and
premiums on interest-earning assets and interest-bearing
liabilities as follows:
• During 2009, additional information was obtained
about the credit quality of acquired loans as of the
acquisition date. As a result, an additional $2.6
billion of acquired loans were deemed impaired as of
December 31, 2008. We recorded an additional fair
value mark on these and previously impaired loans of
$1.8 billion effective December 31, 2008.
• The original accretable yield on acquired loans of
$6.1 billion at December 31, 2008 was reduced by
$1.0 billion during 2009. This decrease was due to
accretion of $1.7 billion and cash recoveries of $.2
billion that were partially offset by net
reclassifications to accretable yield of $.8 billion,
adjustments resulting from changes in the purchase
price allocation of $.3 billion and disposals of $.2
billion. Adjustments to accretable yield and purchase
accounting adjustments with respect to purchased
impaired loans are detailed in Note 6 Purchased
Impaired Loans Related to National City.
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