PNC Bank 2010 Annual Report Download - page 120
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Please find page 120 of the 2010 PNC Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.which the loan is included is impaired if expected cash flows
for the pool change. No additional disclosures are required as
a result of this ASU. ASU 2010-18 is effective for
modifications of loans accounted for within pools under ASC
310-30 occurring in the first interim or annual period ending
on or after July 15, 2010 with early adoption permitted. PNC
accounts for loans within pools consistent with the guidance in
this ASU.
In July 2010, the FASB issued ASU 2010-20 – Receivables
(Topic 310) – Disclosures about the Credit Quality of
Financing Receivables and the Allowance for Credit Losses.
This ASU requires additional disclosures related to an entity’s
allowance for credit losses and the credit quality of its
financing receivables (e.g., loans). Certain disclosures were
effective December 31, 2010 and others will be beginning in
the first quarter of 2011. See Note 5 Asset Quality and
Allowances for Loan and Lease Losses and Unfunded Loan
Commitments and Letters of Credit for additional information.
N
OTE
2D
IVESTITURE
S
ALE OF
PNC G
LOBAL
I
NVESTMENT
S
ERVICING
On July 1, 2010, we sold PNC Global Investment Servicing
Inc. (GIS), a leading provider of processing, technology and
business intelligence services to asset managers, broker-
dealers and financial advisors worldwide, for $2.3 billion in
cash pursuant to a definitive agreement entered into on
February 2, 2010. This transaction resulted in a pretax gain of
$639 million, net of transaction costs. The after-tax amount of
the gain of $328 million is included within Income from
discontinued operations on our Consolidated Income
Statement.
Results of operations of GIS through June 30, 2010 are
presented as Income from discontinued operations, net of
income taxes, on our Consolidated Income Statement for all
periods presented. Income taxes related to discontinued
operations for 2009 include $18 million of deferred income
taxes provided on the difference in the stock investment and
tax basis of GIS, previously a US subsidiary of PNC.
As part of the sale agreement, PNC has agreed to provide
certain transitional services on behalf of GIS until completion
of related systems conversion activities, which may cover a
period of up to three years from the date of sale.
Asset and liabilities of GIS at December 31, 2009 follow.
Investment in Discontinued Operations
In millions
December 31,
2009
Interest-earning deposits with banks $ 255
Goodwill 1,243
Other intangible assets 51
Other 359
Total assets $1,908
Interest-bearing deposits $ 93
Accrued expenses 266
Other 1,009
Total liabilities $1,368
Net assets $ 540
N
OTE
3L
OAN
S
ALE AND
S
ERVICING
A
CTIVITIES
AND
V
ARIABLE
I
NTEREST
E
NTITIES
L
OAN
S
ALE
A
ND
S
ERVICING
A
CTIVITIES
We have transferred residential and commercial mortgage
loans in securitization or sales transactions in which we have
continuing involvement. These transfers have occurred
through Agency securitization, Non-Agency securitization,
and whole-loan sale transactions. Agency securitizations
consist of securitization transactions with FNMA, FHLMC,
and Government National Mortgage Association (GNMA)
(collectively, the Agencies). FNMA and FHLMC generally
securitize our transferred loans into mortgage-backed
securities for sale into the secondary market through SPEs
they sponsor. We, as an authorized GNMA issuer/servicer,
pool loans into mortgage-backed securities for sale into the
secondary market. In Non-Agency securitizations, we have
transferred loans into securitization SPEs. In other instances
third-party investors have purchased (in whole-loan sale
transactions) and subsequently sold our loans into
securitization SPEs. Third-party investors have also purchased
our loans in whole-loan sale transactions. Securitization SPEs,
which are legal entities that are utilized in the Agency and
Non-Agency securitization transactions, are VIEs.
Our continuing involvement in the Agency securitizations,
Non-Agency securitizations, and whole-loan sale transactions
generally consists of servicing, repurchases of previously
transferred loans and loss share arrangements, and, in limited
circumstances, holding of mortgage-backed securities issued
by the securitization SPEs.
Depending on the transaction, we may act as the master,
primary, and/or special servicer to the securitization SPEs or
third-party investors. Servicing responsibilities typically
consist of collecting and remitting monthly borrower principal
and interest payments, maintaining escrow deposits,
performing loss mitigation and foreclosure activities, and, in
certain instances, funding of servicing advances. Servicing
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