PNC Bank 2011 Annual Report Download - page 6

Total Loans
At Year End
Billions
Increasing Lending Our customer growth helped to drive increased lending in
2011. Loan growth accelerated toward the end of the year, with $4.5 billion of the $8.4 billion
annual increase occurring in the fourth quarter. Overall, we grew loans by 6 percent during
2011, with gains in commercial loans, indirect auto and education lending.
Tepid growth in the gross domestic product along with low interest rates had a dampening
effect on the banking industry in 2011, and we expect those factors to persist. In this
challenging environment, our balance sheet provides us with options to enhance our net
interest income through continued loan growth and repricing our deposit business.
We have significant opportunities to reduce funding costs through the repricing of certificates
of deposit and maturing debt as well as the potential to redeem relatively high-cost trust
preferred securities. In the fourth quarter of 2011 alone, we saw $6 billion of certificates of
deposit mature, and we called $750 million of trust preferred securities. We expect to see
additional opportunities to reduce funding costs in 2012.
Growing and Strengthening the Franchise During 2011 we
leveraged our financial performance and resulting capital strength to invest in our businesses.
We also announced several strategic acquisitions. These included purchases in greater Tampa,
Florida, of 19 branches from BankAtlantic, and 27 branches in the Atlanta area from Flagstar.
The acquisition of RBC Bank (USA), the U.S. retail banking operation of the Royal Bank of
Canada, closed and converted on March 2 of this year and is expected to be accretive to our
2012 earnings, excluding integration costs.
The RBC transaction added more than 400 Southeastern U.S. branches to PNC’s powerful retail
franchise. With RBC Bank (USA), PNC has approximately 2,900 branches in 17 states and the
District of Columbia. Since the beginning of 2008, this represents an increase of almost 1,800
branches and nine new states.
At PNC, acquisition was only one part of our growth story in 2011. Throughout the year, we
continued to add more customers and deepen our relationships with them across our existing
footprint, and all of our legacy markets exceeded their sales plans.
To support this growth, we developed innovative products and services focused on the needs of
tomorrow’s banking and investing clients. We applied an understanding of customer trends –
the roughly flat growth of branch and call center activity, the ongoing decline in check writing,
the expansion of online and mobile payments, and the increased use of multiple distribution
channels – to give customers a top-flight banking experience.
One example, the PNC Virtual Wallet® payments platform, has grown rapidly since its
introduction more than three years ago. At times in 2011, we added 14,000 new users every
$150.6
2010
$159.0
2011