PNC Bank 2010 Annual Report Download - page 94
Download and view the complete annual report
Please find page 94 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.2009 V
ERSUS
2008
On December 31, 2008, PNC acquired National City. This
acquisition had a substantial impact on the comparison of
2009 to 2008.
C
ONSOLIDATED
I
NCOME
S
TATEMENT
R
EVIEW
Summary Results
Net income for 2009 was $2.4 billion or $4.36 per diluted
share and for 2008 was $.9 billion or $2.44 per diluted share.
Net Interest Income
Net interest income was $9.1 billion for 2009 compared with
$3.9 billion for 2008, an increase of $5.2 billion, or 136%.
Higher net interest income for 2009 compared with 2008
reflected the increase in average interest-earning assets due to
National City and the improvement in the net interest margin.
The net interest margin was 3.82% in 2009 and 3.37% for
2008, an increase of 45 basis points.
Noninterest Income
Summary
Noninterest income was $7.1 billion for 2009 and $2.4 billion
for 2008.
Noninterest income for 2009 included the following:
• The gain on BlackRock/BGI transaction of
$1.076 billion,
• Net credit-related other-than-temporary impairments
(OTTI) on debt and equity securities of $577 million,
• Net gains on sales of securities of $550 million,
• Gains on hedging of residential mortgage servicing
rights of $355 million,
• Valuation and sale income related to our commercial
mortgage loans held for sale, net of hedges, of
$107 million,
• Gains of $103 million related to our BlackRock LTIP
shares adjustment in the first quarter, and net losses
on private equity and alternative investments of
$93 million.
Noninterest income for 2008 included the following:
• Net OTTI on debt and equity securities of
$312 million,
• Gains of $246 million related to the mark-to-market
adjustment on our BlackRock LTIP shares
obligation,
• Valuation and sale losses related to our commercial
mortgage loans held for sale, net of hedges, of
$197 million,
• Impairment and other losses related to private equity
and alternative investments of $180 million,
• Income from Hilliard Lyons totaling $164 million,
including the first quarter gain of $114 million from
the sale of this business,
• Net gains on sales of securities of $106 million, and
• A gain of $95 million related to the redemption of a
portion of our Visa Class B common shares related to
Visa’s March 2008 initial public offering.
Apart from the impact of these items, noninterest income
increased $3.1 billion in 2009 compared with 2008.
Additional analysis
Asset management revenue increased $172 million to
$858 million in 2009, compared with $686 million in 2008.
This increase reflected improving equity markets, new
business generation and a shift in assets into higher yielding
equity investments during the second half of 2009. Assets
managed totaled $103 billion at both December 31, 2009 and
2008, including the impact of National City.
Consumer services fees totaled $1.290 billion in 2009
compared with $623 million in 2008. Service charges on
deposits totaled $950 million for 2009 and $372 million for
2008. Both increases were primarily driven by the impact of
the National City acquisition. Reduced consumer spending,
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.
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.
Provision For Credit Losses
The provision for credit losses totaled $3.9 billion for 2009
compared with $1.5 billion for 2008. The provision for credit
losses for 2009 was in excess of net charge-offs of $2.7 billion
primarily due to required increases to our ALLL reflecting
continued deterioration in the credit markets and the resulting
increase in nonperforming loans.
86