PNC Bank 2009 Annual Report Download - page 32

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given economic conditions, hindered PNC legacy growth
during 2009 in both categories.
Corporate services revenue totaled $1.021 billion in 2009
compared with $704 million in 2008. Corporate services fees
include treasury management fees which increased $221
million in 2009 compared with 2008.
Residential mortgage fees totaled $990 million in 2009. Fees
from strong mortgage refinancing volumes, especially in the
first quarter, and $355 million of net hedging gains from
mortgage servicing rights contributed to this total. We do not
expect to repeat this strong performance in 2010.
Other noninterest income totaled $987 million for 2009
compared with $263 million for 2008. Other noninterest
income for 2009 included trading income of $170 million,
valuation and sale income related to our commercial mortgage
loans held for sale, net of hedges, of $107 million, other gains
of $103 million related to our equity investment in BlackRock
and net losses on private equity and alternative investments of
$93 million.
Other noninterest income for 2008 included the $114 million
gain from the sale of Hilliard Lyons, the $95 million Visa
gain, gains of $246 million related to our equity investment in
BlackRock, and losses related to our commercial mortgage
loans held for sale, net of hedges, of $197 million.
Other noninterest income typically fluctuates from period to
period depending on the nature and magnitude of transactions
completed. Further details regarding our trading activities are
included in the Market Risk Management – Trading Risk
portion of the Risk Management section of this Item 7,
information regarding private equity and alternative
investments are included in the Market Risk Management-
Equity and Other Investment Risk section, and discussion
regarding gains related to our equity investment in BlackRock
are included in the Business Segments Review section.
With the exception of hedging gains related to residential
mortgage servicing and the BlackRock/BGI gain, we expect
noninterest income to be relatively flat in 2010 compared with
2009 levels. We also expect that the conversions of National
City customers to the PNC platform scheduled for completion
by June 2010 will create more product cross-selling
opportunities.
P
RODUCT
R
EVENUE
In addition to credit and deposit products for commercial
customers, Corporate & Institutional Banking offers other
services, including treasury management and capital markets-
related products and services and commercial mortgage
banking activities, that are marketed by several businesses to
commercial and retail customers.
Treasury management revenue, which includes fees as well as
net interest income from customer deposit balances, totaled
$1.137 billion for 2009 and $567 million for 2008. In addition
to the impact of National City, the increase was primarily
related to deposit growth and continued growth in legacy
offerings such as purchasing cards and services provided to
the Federal government and healthcare customers.
Revenue from capital markets-related products and services
totaled $533 million in 2009 compared with $336 million in
2008. The impact of National City-related revenue helped to
offset declines in merger and acquisition revenues reflecting
the difficult economic environment.
Commercial mortgage banking activities include revenue
derived from commercial mortgage servicing (including net
interest income and noninterest income from loan servicing
and ancillary services), and revenue derived from commercial
mortgage loans intended for sale and related hedges (including
loan origination fees, net interest income, valuation
adjustments and gains or losses on sales).
Commercial mortgage banking activities resulted in revenue
of $485 million in 2009 compared with $65 million in 2008.
The impact of National City-related revenue was reflected in
the 2009 increase. Revenue for 2009 included gains of $107
million on commercial mortgage loans held for sale, net of
hedges. Losses of $197 million on commercial mortgage loans
held for sale, net of hedges, reduced revenue for 2008.
28