Statement Of Income Interest Ba
Statement Of Income Interest Based Revenue (USD $) | |||||||||||||||||||
In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 | |||||||||||||||
Interest Income | |||||||||||||||||||
Loans | $2,091 | $1,024 | $6,759 | $3,145 | |||||||||||||||
Investment securities | 684 | 447 | 2,045 | 1,270 | |||||||||||||||
Other | 113 | 103 | 345 | 355 | |||||||||||||||
Total interest income | 2,888 | 1,574 | 9,149 | 4,770 | |||||||||||||||
Interest Expense | |||||||||||||||||||
Deposits | 387 | 340 | 1,407 | 1,152 | |||||||||||||||
Borrowed funds | 279 | 234 | 1,033 | 787 | |||||||||||||||
Total interest expense | 666 | 574 | 2,440 | 1,939 | |||||||||||||||
Net interest income | 2,222 | 1,000 | 6,709 | 2,831 | |||||||||||||||
Noninterest Income | |||||||||||||||||||
Fund servicing | 194 | 233 | 586 | 695 | |||||||||||||||
Asset management | 242 | 180 | 639 | 589 | |||||||||||||||
Consumer services | 330 | 153 | 975 | 472 | |||||||||||||||
Corporate services | 252 | 198 | 761 | 547 | |||||||||||||||
Residential mortgage | 207 | 0 | 883 | 0 | |||||||||||||||
Service charges on deposits | 248 | 97 | 714 | 271 | |||||||||||||||
Net gains on sales of securities | 168 | 55 | 406 | 104 | |||||||||||||||
Other-than-temporary impairments | (401) | (129) | (1,540) | (138) | |||||||||||||||
Less: Noncredit portion of other-than-temporary impairments | (272) | [1] | 0 | [1] | (1,107) | [1] | 0 | [1] | |||||||||||
Net other-than-temporary impairments | (129) | (129) | (433) | (138) | |||||||||||||||
Other | 314 | (133) | 666 | 143 | |||||||||||||||
Total noninterest income | 1,826 | 654 | 5,197 | 2,683 | |||||||||||||||
Total revenue | 4,048 | 1,654 | 11,906 | 5,514 | |||||||||||||||
Provision for credit losses | 914 | 190 | 2,881 | 527 | |||||||||||||||
Noninterest Expense | |||||||||||||||||||
Personnel | 1,158 | 569 | 3,420 | 1,660 | |||||||||||||||
Occupancy | 181 | 89 | 559 | 274 | |||||||||||||||
Equipment | 188 | 91 | 580 | 267 | |||||||||||||||
Marketing | 58 | 38 | 174 | 94 | |||||||||||||||
Other | 794 | 344 | 2,632 | 974 | |||||||||||||||
Total noninterest expense | 2,379 | 1,131 | 7,365 | 3,269 | |||||||||||||||
Income before income taxes and noncontrolling interests | 755 | 333 | 1,660 | 1,718 | |||||||||||||||
Income taxes | 196 | 74 | 364 | 558 | |||||||||||||||
Net income | 559 | 259 | 1,296 | 1,160 | |||||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | (20) | 11 | (7) | 30 | |||||||||||||||
Preferred stock dividends | 99 | 0 | 269 | 0 | |||||||||||||||
Preferred stock discount accretion | 13 | 0 | 42 | 0 | |||||||||||||||
Net income attributable to common shareholders | $467 | $248 | $992 | $1,130 | |||||||||||||||
Earnings Per Common Share | |||||||||||||||||||
Basic | 1.01 | 0.72 | 2.19 | 3.28 | |||||||||||||||
Diluted | $1 | 0.7 | 2.17 | 3.23 | |||||||||||||||
Average Common Shares Outstanding | |||||||||||||||||||
Basic | 460 | 345 | 451 | 343 | |||||||||||||||
Diluted | 461 | 347 | 452 | 345 | |||||||||||||||
[1] Included in accumulated other comprehensive loss. |
Statement Of Financial Position
Statement Of Financial Position Unclassified - Deposit Based Operations (USD $) | |||||||||||||||||||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
| |||||||||||||||||
Assets | |||||||||||||||||||
Cash and due from banks | $3,426 | $4,471 | |||||||||||||||||
Federal funds sold and resale agreements (includes $1,024 and $1,072 measured at fair value) | 2,427 | [1] | 1,856 | [1] | |||||||||||||||
Trading securities | 2,075 | 1,725 | |||||||||||||||||
Interest-earning deposits with banks | 1,129 | 14,859 | |||||||||||||||||
Other short-term investments | 925 | 1,025 | |||||||||||||||||
Loans held for sale (includes $2,672 and $1,400 measured at fair value) | 3,509 | [1] | 4,366 | [1] | |||||||||||||||
Investment securities | 54,413 | 43,473 | |||||||||||||||||
Loans (includes $60 measured at fair value at September 30, 2009) | 160,608 | [1] | 175,489 | [1] | |||||||||||||||
Allowance for loan and lease losses | (4,810) | (3,917) | |||||||||||||||||
Net loans | 155,798 | 171,572 | |||||||||||||||||
Goodwill | 9,286 | 8,868 | |||||||||||||||||
Other intangible assets | 3,448 | 2,820 | |||||||||||||||||
Equity investments | 8,684 | 8,554 | |||||||||||||||||
Other (includes $454 measured at fair value at September 30, 2009) | 26,287 | [1] | 27,492 | [1] | |||||||||||||||
Total assets | 271,407 | 291,081 | |||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest-bearing | 43,025 | 37,148 | |||||||||||||||||
Interest-bearing | 140,784 | 155,717 | |||||||||||||||||
Total deposits | 183,809 | 192,865 | |||||||||||||||||
Borrowed funds | |||||||||||||||||||
Federal funds purchased and repurchase agreements | 3,996 | 5,153 | |||||||||||||||||
Federal Home Loan Bank borrowings | 11,953 | 18,126 | |||||||||||||||||
Bank notes and senior debt | 12,424 | 13,664 | |||||||||||||||||
Subordinated debt | 10,501 | 11,208 | |||||||||||||||||
Other | 3,036 | 4,089 | |||||||||||||||||
Total borrowed funds | 41,910 | 52,240 | |||||||||||||||||
Allowance for unfunded loan commitments and letters of credit | 324 | 344 | |||||||||||||||||
Accrued expenses | 3,592 | 3,949 | |||||||||||||||||
Other | 10,109 | 14,035 | |||||||||||||||||
Total liabilities | 239,744 | 263,433 | |||||||||||||||||
Equity | |||||||||||||||||||
Preferred stock | 0 | [2] | 0 | [2] | |||||||||||||||
Common stock - $5 par value Authorized 800 shares, issued 469 and 452 shares | 2,348 | 2,261 | |||||||||||||||||
Capital surplus - preferred stock | 7,960 | 7,918 | |||||||||||||||||
Capital surplus - common stock and other | 8,860 | 8,328 | |||||||||||||||||
Retained earnings | 12,179 | [3] | 11,461 | [3] | |||||||||||||||
Accumulated other comprehensive loss | (1,947) | [3] | (3,949) | [3] | |||||||||||||||
Common stock held in treasury at cost: 8 and 9 shares | (472) | (597) | |||||||||||||||||
Total shareholders' equity | 28,928 | 25,422 | |||||||||||||||||
Noncontrolling interests | 2,735 | 2,226 | |||||||||||||||||
Total equity | 31,663 | 27,648 | |||||||||||||||||
Total liabilities and equity | $271,407 | $291,081 | |||||||||||||||||
[1]Amounts represent items for which the Corporation has elected the fair value option. | |||||||||||||||||||
[2]Par value less than $.5 million at each date. | |||||||||||||||||||
[3]Retained earnings at January 1, 2009 was increased $110 million representing the after-tax noncredit portion of other-than-temporary impairment losses recognized in net income during 2008 that has been reclassified to accumulated other comprehensive loss. |
1_Statement Of Financial Positi
Statement Of Financial Position Unclassified - Deposit Based Operations (Parenthetical) (USD $) | ||
In Millions, except Per Share data | Sep. 30, 2009
| Dec. 31, 2008
|
Federal funds sold and resale agreements, fair value | $1,024 | $1,072 |
Loans held for sale, fair value | 2,672 | 1,400 |
Loans, fair value | 60 | 0 |
Other, fair value | $454 | $0 |
Common stock, par value | $5 | $5 |
Common stock, Authorized | 800 | 800 |
Common stock, issued | 469 | 452 |
Common stock held in treasury at cost, shares | 8 | 9 |
Statement Of Cash Flows Indirec
Statement Of Cash Flows Indirect Deposit Based Operations (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Activities | ||
Net income | $1,296 | $1,160 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Provision for credit losses | 2,881 | 527 |
Depreciation and amortization | 747 | 344 |
Deferred income taxes (benefit) | 143 | (7) |
Net gains on sales of securities | (406) | (104) |
Net other-than-temporary impairments | 433 | 138 |
Loan related valuation adjustments | (332) | 248 |
Net gains related to BlackRock LTIP shares adjustment | (103) | (69) |
Undistributed earnings of BlackRock | (107) | (156) |
Visa redemption gain | 0 | (95) |
Reversal of legal contingency reserve established in connection with an acquisition due to a settlement | 0 | (61) |
Excess tax benefits from share-based payment arrangements | (1) | (9) |
Net change in | ||
Trading securities and other short-term investments | (35) | 1,288 |
Loans held for sale | 602 | 272 |
Other assets | 3,094 | (2,510) |
Accrued expenses and other liabilities | (5,978) | 4,440 |
Other | 295 | (2) |
Net cash provided by operating activities | 2,529 | 5,404 |
Sales | ||
Investment securities | 12,611 | 5,943 |
Visa shares | 0 | 95 |
Loans | 408 | 51 |
Purchases | ||
Investment securities | (26,878) | (13,069) |
Loans | (212) | (211) |
Net change in | ||
Federal funds sold and resale agreements | (589) | 1,131 |
Investment securities | 5,803 | 3,120 |
Loans | 10,977 | (3,720) |
Net cash received from (paid for) acquisition and divestiture activity | (3,396) | 618 |
Interest-earning deposits with Federal Reserve | 13,558 | 0 |
Other | 56 | (574) |
Net cash provided (used) by investing activities | 12,338 | (6,616) |
Net change in | ||
Noninterest-bearing deposits | 6,650 | (264) |
Interest-bearing deposits | (11,603) | (196) |
Federal funds purchased and repurchase agreements | (1,177) | (2,333) |
Federal Home Loan Bank short-term borrowings | 0 | (1,650) |
Other short-term borrowed funds | (1,755) | 469 |
Sales/issuances | ||
Federal Home Loan Bank long-term borrowings | 1,500 | 5,050 |
Bank notes and senior debt | 2,459 | 825 |
Subordinated debt | 0 | 759 |
Other long-term borrowed funds | 147 | 62 |
Perpetual trust securities | 0 | 369 |
Preferred stock | 0 | 492 |
Supervisory Capital Assessment Program - common stock | 624 | 0 |
Common and treasury stock | 174 | 291 |
Repayments/maturities | ||
Federal Home Loan Bank long-term borrowings | (7,633) | (158) |
Bank notes and senior debt | (3,868) | (1,859) |
Subordinated debt | (529) | (140) |
Other long-term borrowed funds | (125) | (149) |
Excess tax benefits from share-based payment arrangements | 1 | 9 |
Acquisition of treasury stock | (124) | (199) |
Preferred stock cash dividends paid | (269) | 0 |
Common stock cash dividends paid | (384) | (673) |
Net cash provided (used) by financing activities | (15,912) | 705 |
Net Decrease In Cash And Due From Banks | (1,045) | (507) |
Cash and due from banks at beginning of period | 4,471 | 3,567 |
Cash and due from banks at end of period | 3,426 | 3,060 |
Cash Paid (Refunded) For | ||
Interest | 2,526 | 1,940 |
Income taxes | (558) | 668 |
Non-cash Items | ||
Issuance of common stock for Sterling acquisition | 0 | 312 |
Net increase (decrease) in investment in BlackRock | (84) | 180 |
Transfer from loans held for sale to loans, net | 190 | 1,789 |
Transfer from investment securities to trading securities | 74 | 0 |
Recognition of investment securities from securitization of credit card receivables | $72 | $0 |
Business
Business | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
Business | Business PNC is one of the largest diversified financial services companies in the United States and is headquartered in Pittsburgh, Pennsylvania. As described in Note 2 National City Acquisition, on December31, 2008, PNC acquired National City Corporation (National City). Our consolidated financial statements for 2009 reflect the impact of National City. PNC has businesses engaged in retail banking, corporate and institutional banking, asset management, residential mortgage banking and global investment servicing, providing many of its products and services nationally and others in PNCs primary geographic markets located in Pennsylvania, Ohio, New Jersey, Michigan, Maryland, Illinois, Indiana, Kentucky, Florida, Missouri, Virginia, Delaware, Washington, D.C., and Wisconsin. PNC also provides certain investment servicing internationally. We are in the process of integrating the businesses and operations of National City with those of PNC. |
NOTE 1 ACCOUNTING POLICIES
NOTE 1 ACCOUNTING POLICIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 1 ACCOUNTING POLICIES | NOTE 1 ACCOUNTING POLICIES BASIS OF FINANCIAL STATEMENT PRESENTATION Our consolidated financial statements include the accounts of the parent company and its subsidiaries, most of which are wholly owned, and certain partnership interests and variable interest entities. Effective July1, 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.168, The FASB Accounting Standards Codification TM and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No.162. The FASB Accounting Standards Codification TM (FASB ASC) will be the single source of authoritative nongovernmental generally accepted accounting principles (GAAP) in the United States of America. The FASB ASC is effective for financial statements that cover interim and annual periods ending after September15, 2009. Other than resolving certain minor inconsistencies in current GAAP, the FASB ASC is not intended to change GAAP, but rather to make it easier to review and research GAAP applicable to a particular transaction or specific accounting issue. Technical references to GAAP included in these Notes To Consolidated Financial Statements are provided under the new FASB ASC structure. On December31, 2008, we acquired National City. Our Consolidated Balance Sheet as of September30, 2009 and December31, 2008, our Consolidated Income Statement for the three months and nine months ended September30, 2009, and our Consolidated Statement of Cash Flows for the nine months ended September30, 2009 include the impact of the National City acquisition. See Note 2 National City Acquisition for additional information. We prepared these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America. We have eliminated intercompany accounts and transactions. We have also reclassified certain prior year amounts to conform with the 2009 presentation, including reclassifications required in connection with the adoption of new guidance impacting the accounting and reporting of noncontrolling interests in consolidated financial statements. These reclassifications did not have a material impact on our consolidated financial condition or results of operations. In our opinion, the unaudited interim consolidated financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the full year or any other interim period. When preparing these unaudited interim consolidated financial statements, we have assumed that you have read the audited consolidated financial statements included in our 2008 Annual Report on Form 10-K (2008 Form 10-K). Reference is made to Note 1 Accounting Policies in the 2008 Form 10-K for a detailed description of the significant accounting policies followed by PNC. There have been no significant changes to these policies in the first nine months of 2009. These interim consolidated financial statements serve to update the 2008 Form 10-K and may not in |
NOTE 2 NATIONAL CITY ACQUISITIO
NOTE 2 NATIONAL CITY ACQUISITION | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 2 NATIONAL CITY ACQUISITION | NOTE 2 NATIONAL CITY ACQUISITION On December31, 2008, we acquired National City for approximately $6.1 billion. The total consideration included approximately $5.6 billion of common stock, representing approximately 95million shares, $150 million of preferred stock and cash of $379 million paid to warrant holders by National City. The transaction requires no future contingent consideration payments. National City, based in Cleveland, Ohio, was one of the nations largest financial services companies. At December31, 2008, prior to our acquisition, National City had total assets of approximately $153 billion and total deposits of approximately $101 billion. This acquisition was accounted for under the purchase method of accounting. The purchase price was allocated to the National City assets acquired and liabilities assumed using their estimated fair values as of the acquisition date. During the first nine months of 2009, additional information was obtained about the fair value of assets acquired and liabilities assumed as of December31, 2008 which resulted in adjustments to the initial purchase price allocation. Most significantly, additional information was obtained on the credit quality of certain loans as of the acquisition date which resulted in additional fair value writedowns on acquired impaired loans. These adjustments resulted in the allocation of $446 million to other intangible assets and $891 million to premises and equipment which had been reduced in the initial purchase price allocation. Goodwill totaling $428 million has been recognized on the National City acquisition as of September30, 2009. As a condition of the acquisition, the regulators required that we divest 61 branches. This divestiture, which included $4.1 billion of deposits and $.8 billion of loans, was completed during the third quarter of 2009. A summary of adjustments to the initial purchase price allocation are summarized below. National City AcquisitionSummary Purchase Price Allocation In billions Excess of fair value of adjusted net assets acquired over purchase price December 31, 2008 $ (1.3 ) Additional fair value marks and other adjustments on purchased impaired loans December 31, 2008 2.0 Other adjustments, net (.3 ) Excess of purchase price over fair value of adjusted net assets acquired September30, 2009 $ .4 We are still awaiting and evaluating further information regarding pre-acquisition contingencies, including legal claims and other legal matters, and the finalization of restructuring plans related to the National City acquisition. Therefore, further modifications to the purchase price allocation may occur, resulting in an adjustment to goodwill in the fourth quarter of 2009. 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 December31, 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 $ 2,146 |
NOTE 3 VARIABLE INTEREST ENTITI
NOTE 3 VARIABLE INTEREST ENTITIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 3 VARIABLE INTEREST ENTITIES | NOTE 3 VARIABLE INTEREST ENTITIES As discussed in our 2008 Form 10-K, we are involved with various entities in the normal course of business that were deemed to be VIEs. We consolidated certain VIEs as of September30, 2009 and December31, 2008 for which we were determined to be the primary beneficiary. These consolidated VIEs and relationships with PNC are described in our 2008 Form 10-K. Consolidated VIEsPNC Is Primary Beneficiary In millions Aggregate Assets Aggregate Liabilities Partnership interests in tax credit investments (a) September30, 2009 $ 2,051 $ 825 December31, 2008 $ 1,690 $ 921 (b) Credit Risk Transfer Transaction September30, 2009 $ 900 $ 900 December31, 2008 $ 1,070 $ 1,070 (a) Amounts reported primarily represent investments in low income housing projects. (b) We have revised this amount as noncontrolling interests are no longer classified as aggregate liabilities. We hold significant variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. Information on these VIEs follows: Non-Consolidated VIEsSignificant Variable Interests In millions Aggregate Assets Aggregate Liabilities PNCRisk of Loss September30, 2009 Market Street $ 3,939 $ 3,965 $ 6,413 (a) Partnership interests in tax credit investments (b)(c) 1,767 1,218 734 Collateralized debt obligations 25 2 Total $ 5,731 $ 5,183 $ 7,149 December31, 2008 Market Street $ 4,916 $ 5,010 $ 6,965 (a) Partnership interests in tax credit investments (b)(c) 1,517 1,041 811 Collateralized debt obligations 20 2 Total $ 6,453 $ 6,051 $ 7,778 (a) PNCs risk of loss consists of off-balance sheet liquidity commitments to Market Street of $5.8 billion and other credit enhancements of $.6 billion at September30, 2009. The comparable amounts were $6.4 billion and $.6 billion at December31, 2008. (b) Amounts reported primarily represent investments in low income housing projects. (c) Aggregate assets and aggregate liabilities represent estimated balances due to limited availability of financial information associated with certain acquired National City partnerships. Market Street Market Street is a multi-seller asset-backed commercial paper conduit that is owned by an independent third party. Market Streets activities primarily involve purchasing assets or making loans secured by interests in pools of receivables from US corporations that desire access to the commercial paper market. Market Street funds the purchases of assets or loans by issuing commercial paper which has been rated A1/P1/F1 by Standard Poors, Moodys, and Fitch, respectively, and is supported by pool-specific credit enhancements, liquidity facilities and program-level credit enhancement. Generally, Market Street mitigates its potential interest rate risk by entering into agreements with its borrowers that reflect in |
NOTE 4 LOANS AND COMMITMENTS TO
NOTE 4 LOANS AND COMMITMENTS TO EXTEND CREDIT | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 4 LOANS AND COMMITMENTS TO EXTEND CREDIT | NOTE 4 LOANS AND COMMITMENTS TO EXTEND CREDIT Loans outstanding were as follows: In millions September30 2009 December31 2008 Commercial $ 56,928 $ 69,220 Commercial real estate 24,064 25,736 Consumer 52,875 52,489 Residential real estate 20,458 21,583 Equipment lease financing 6,283 6,461 Total loans $ 160,608 $ 175,489 Loans are presented net of unearned income, net deferred loan fees, unamortized discounts and premiums, and purchase discounts and premiums totaling $3.2 billion and $4.1 billion at September30, 2009 and December31, 2008, respectively. Future accretable discounts related to purchased impaired loans are not included in loans outstanding. Net Unfunded Credit Commitments In millions September30 2009 December31 2008 Commercial and commercial real estate $ 60,222 $ 60,020 Home equity lines of credit 21,021 23,195 Consumer credit card lines 18,721 19,028 Other 2,705 2,645 Total $ 102,669 $ 104,888 Commitments to extend credit represent arrangements to lend funds or provide liquidity subject to specified contractual conditions. At September30, 2009 commercial commitments are reported net of $9.6 billion of participations, assignments and syndications, primarily to financial institutions. The comparable amount at December31, 2008 was $8.6 billion. Commitments generally have fixed expiration dates, may require payment of a fee, and contain termination clauses in the event the customers credit quality deteriorates. Based on our historical experience, most commitments expire unfunded, and therefore cash requirements are substantially less than the total commitment. Consumer home equity lines of credit accounted for 53% of consumer unfunded credit commitments at September30, 2009. Unfunded credit commitments related to Market Street totaled $5.8 billion at September30, 2009 and $6.4 billion at December31, 2008 and are included in the preceding table primarily within the Commercial and Commercial Real Estate category. At September30, 2009, we pledged $27.9 billion of loans to the Federal Reserve Bank and $45.5 billion of loans to the Federal Home Loan Banks as collateral for the contingent ability to borrow, if necessary. Certain loans are accounted for at fair value with changes in the fair value reported in current period earnings. The fair value of these loans was $80 million, or approximately .05% of the total loan portfolio, at September30, 2009. |
NOTE 5 ASSET QUALITY
NOTE 5 ASSET QUALITY | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 5 ASSET QUALITY | NOTE 5 ASSET QUALITY The following table sets forth nonperforming assets and related information. These amounts exclude purchased impaired loans acquired in connection with the National City acquisition. See Note 6 Purchased Impaired Loans Related to National City for further information. Dollars in millions September30, 2009 December31, 2008 Nonaccrual loans Commercial $ 1,830 $ 576 Commercial real estate 1,872 766 Equipment lease financing 164 97 TOTAL COMMERCIAL LENDING 3,866 1,439 Consumer Home equity 207 66 Other 25 4 Total consumer 232 70 Residential real estate Residential mortgage 790 139 Residential construction 238 14 Total residential real estate 1,028 153 TOTAL CONSUMER LENDING 1,260 223 Total nonaccrual/nonperforming loans 5,126 1,662 Foreclosed and other assets Commercial lending 145 50 Consumer lending 373 469 Total foreclosed and other assets 518 519 Total nonperforming assets $ 5,644 $ 2,181 Nonperforming loans to total loans 3.19 % .95 % Nonperforming assets to total loans and foreclosed and other assets 3.50 1.24 Nonperforming assets to total assets 2.08 .75 Loans whose contractual terms have been restructured in a manner which grants a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation are considered troubled debt restructurings. Troubled debt restructurings typically result from our loss mitigation activities and could include rate reductions, principal forgiveness, forbearance and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Troubled debt restructurings included in total nonperforming loans in the table above totaled $230 million at September30, 2009. Net interest income less the provision for credit losses was $3.8 billion for the first nine months of 2009 compared with $2.3 billion for the first nine months of 2008. Comparable amounts for the third quarter of 2009 and the third quarter of 2008 were $1.3 billion and $810 million, respectively. Changes in the allowance for loan and lease losses follow: In millions 2009 2008 January1 $ 3,917 $ 830 Charge-offs (2,131 ) (391 ) Recoveries 255 59 Net charge-offs (1,876 ) (332 ) Provision for credit losses 2,881 527 Acquired allowance (a) (114 ) 20 Divestiture (18 ) Net change in allowance for unfunded loan commitments and letters of credit 20 8 September30 $ 4,810 $ 1,053 (a) Amount for 2009 reflects adjustments to the National City allowance acquired December31, 2008 due to additional impairment of loans effective at that date. Amount for 2008 reflects the Sterling acquisition. See Note 6 Purchased Impaired Loans |
NOTE 6 PURCHASED IMPAIRED LOANS
NOTE 6 PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 6 PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY | NOTE 6 PURCHASED IMPAIRED LOANS RELATED TO NATIONAL CITY At December31, 2008, PNC identified certain loans related to the National City acquisition, for which there was evidence of credit quality deterioration since origination and it was probable that PNC would be unable to collect all contractually required principal and interest payments. Evidence of credit quality deterioration includes statistics such as past due status, declines in current borrower FICO credit scores, geographic concentration and declines in current loan-to-value ratios. GAAP requires these loans to be recorded at fair value at acquisition date and prohibits the carrying over or the creation of valuation allowances in the initial accounting for such loans acquired in a transfer. GAAP allows purchasers to aggregate impaired loans acquired in the same fiscal quarter into one or more pools, provided that the loans have common risk characteristics. A pool is then accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows. With respect to the National City acquisition, we aggregated homogeneous consumer and residential real estate loans into pools with common risk characteristics. We account for commercial and commercial real estate loans individually. During the first nine months of 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 December31, 2008 and the carryover allowance for loan losses attributable to these loans of $114 million was released. Adjustments to the fair value of impaired loans of $1.8 billion were also recognized. At September30, 2009 and December31, 2008, purchased impaired loans had a carrying value of $11.1 billion and $12.7billion, respectively. During the first nine months of 2009, the amount of purchased impaired loans decreased by a net $1.6billion as a result of payments and other exit activities primarily offset by the purchase accounting adjustments described above and accretion of purchase accounting discount. The unpaid principal balance of these loans was $17.8 billion at September30, 2009 and $21.9 billion at December31, 2008, as detailed below: Purchased Impaired Loans September30, 2009 December31, 2008 In millions Recorded Investment Outstanding Balance Recorded Investment Outstanding Balance Commercial(a) $ 723 $ 1,654 $ 1,016 $ 2,485 Commercial real estate 1,851 3,308 1,911 3,856 Consumer 3,560 5,432 3,887 6,618 Residential real estate 4,949 7,361 5,895 8,959 Total $ 11,083 $ 17,755 $ 12,709 $ 21,918 (a) Includes purchased impaired loans held for sale. The recorded investment and outstanding balance of these loans was $19 million and $97 million, respectively, at September 30, 2009. The excess of cash flows expected at acquisition over the estimated fair value is referred to as the accretable yield and is recognized in interest income over the remaining life of the loan usi |
NOTE 7 INVESTMENT SECURITIES
NOTE 7 INVESTMENT SECURITIES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 7 INVESTMENT SECURITIES | NOTE 7 INVESTMENT SECURITIES Amortized Cost (a) Unrealized Fair Value In millions Gains Losses September30, 2009 SECURITIES AVAILABLE FOR SALE Debt securities US Treasury and government agencies $ 6,892 $ 49 $ (24 ) $ 6,917 Residential mortgage-backed Agency 23,251 577 (22 ) 23,806 Non-agency 11,064 248 (2,541 ) 8,771 Commercial mortgage-backed Agency 1,087 31 (1 ) 1,117 Non-agency 3,974 27 (250 ) 3,751 Asset-backed 1,921 21 (429 ) 1,513 State and municipal 1,349 77 (58 ) 1,368 Other debt 1,886 48 (5 ) 1,929 Total debt securities 51,424 1,078 (3,330 ) 49,172 Corporate stocks and other 553 23 576 Total securities available for sale $ 51,977 $ 1,101 $ (3,330 ) $ 49,748 SECURITIES HELD TO MATURITY Debt securities Commercial mortgage-backed (non-agency) $ 1,965 $ 205 $ 2,170 Asset-backed 2,541 115 $ (27 ) 2,629 Other debt 159 2 161 Total debt securities 4,665 322 (27 ) 4,960 Total securities held to maturity $ 4,665 $ 322 $ (27 ) $ 4,960 In millions Amortized Cost Unrealized Fair Value Gains Losses December31, 2008 SECURITIES AVAILABLE FOR SALE Debt securities US Treasury and government agencies $ 738 $ 1 $ 739 Residential mortgage-backed Agency 22,744 371 $ (9 ) 23,106 Non-agency 13,205 (4,374 ) 8,831 Commercial mortgage-backed (non-agency) 4,305 (859 ) 3,446 Asset-backed 2,069 4 (446 ) 1,627 State and municipal 1,326 13 (76 ) 1,263 Other debt 563 11 (15 ) 559 Total debt securities 44,950 400 (5,779 ) 39,571 Corporate stocks and other 575 (4 ) 571 Total securities available for sale $ 45,525 $ 400 $ (5,783 ) $ 40,142 SECURITIES HELD TO MATURITY Debt securities Commercial mortgage-backed (non-agency) $ 1,945 $ 10 $ (59 ) $ 1,896 Asset-backed 1,376 7 (25 ) 1,358 Other debt 10 10 Total debt securities 3,331 17 (84 ) 3,264 Total securities held to maturity $ 3,331 $ 17 $ (84 ) $ 3,264 (a) The amortized cost for debt securities for which an OTTI was recorded prior to January1, 2009 was adjusted for the pretax cumulative effect adjustment recorded under new GAAP that we adopted as of that date. The fair value of inves |
NOTE 8 FAIR VALUE
NOTE 8 FAIR VALUE | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 8 FAIR VALUE | NOTE 8 FAIR VALUE Fair Value Measurement Fair value is defined in GAAP as the price that would be received to sell an asset or the price paid to transfer a liability on the measurement date. The standard focuses on the exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between willing market participants. GAAP establishes a fair value reporting hierarchy to maximize the use of observable inputs when measuring fair value and defines the three levels of inputs as noted below. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities may include debt securities, equity securities and listed derivative contracts that are traded in an active exchange market and certain US Government agency securities that are actively traded in over-the-counter markets. Level 2 Observable inputs other than Level 1 such as: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated to observable market data for substantially the full term of the asset or liability. Level 2 assets and liabilities may include debt securities, equity securities and listed derivative contracts with quoted prices that are traded in markets that are not active, and certain debt and equity securities and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable inputs. This category generally includes agency residential and commercial mortgage-backed debt securities, asset-backed securities, corporate debt securities, residential mortgage loans held for sale, and derivative contracts. Level 3 Unobservable inputs that are supported by minimal or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities may include financial instruments whose value is determined using pricing models with internally developed assumptions, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. This category generally includes certain available for sale securities, commercial mortgage loans held for sale, private equity investments, trading securities, residential mortgage servicing rights, BlackRock Series C Preferred Stock and financial derivative contracts. The available for sale and trading securities within Level 3 include non-agency residential mortgage-backed securities, non-agency commercial mortgage-backed securities, auction rate securities, certain private-issuer asset-backed securities and corporate debt securities. Nonrecurring items, primarily certain nonaccrual and other loans held for sale, commercial mortgage servicing rights, equity investments and other assets are also included in this category. Assets and liabilities measured at fair value on a recurring basis, including instruments for which PNC has elected the fair value option, follow. The assets and l |
NOTE 9 GOODWILL AND OTHER INTAN
NOTE 9 GOODWILL AND OTHER INTANGIBLE ASSETS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 9 GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 9 GOODWILL AND OTHER INTANGIBLE ASSETS Changes in goodwill and other intangible assets during the first nine months of 2009 follow: Changes in Goodwill and Other Intangible Assets In millions Goodwill Customer- Related Servicing Rights January1, 2009 $ 8,868 $ 930 $ 1,890 Additions/adjustments: National City acquisition 428 517 10 Mortgage and other loan servicing rights 341 BlackRock (10 ) Impairment reversal 29 Amortization (184 ) (85 ) September30, 2009 $ 9,286 $ 1,263 $ 2,185 An interim impairment test of goodwill was performed during the first quarter of 2009. This test did not result in any impairment. Changes in goodwill by business segment during the first nine months of 2009 follow: Goodwill In millions January1 2009 Additions/ Adjustments September30 2009 Retail Banking $ 5,968 $ (744 ) $ 5,224 Corporate Institutional Banking 1,609 1,084 2,693 Global Investment Servicing 1,233 2 1,235 BlackRock 44 (10 ) 34 Asset Management Group 14 43 57 Residential Mortgage Banking 43 43 Total $ 8,868 $ 418 $ 9,286 Assets and liabilities of acquired entities are recorded at estimated fair value as of the acquisition date and are subject to refinement as information relative to the fair values at the date of acquisition becomes available. As of September30, 2009, goodwill totaling $428 million has been recognized in connection with the National City acquisition. We are still awaiting and evaluating further information regarding pre-acquisition contingencies, including legal claims and other legal matters, and the finalization of restructuring plans related to the National City acquisition. Therefore, further modifications to the purchase price allocation may occur, resulting in an adjustment to goodwill in the fourth quarter of 2009. Our investment in BlackRock changes when BlackRock repurchases its shares in the open market or issues shares for an acquisition or pursuant to its employee compensation plans. We adjust goodwill when BlackRock repurchases its shares at an amount greater (or less) than book value per share which results in an increase (or decrease) in our percentage ownership interest. The gross carrying amount, accumulated amortization and net carrying amount of other intangible assets by major category consisted of the following: Other Intangible Assets In millions September30 2009 December31 2008 Customer-related and other intangibles Gross carrying amount $ 1,808 $ 1,291 Accumulated amortization (545 ) (361 ) Net carrying amount $ 1,263 $ 930 Mortgage and other loan servicing rights Gross carrying amount $ 2,633 $ 2,286 Valuation allowance (35 ) Accumulated amortization (448 ) |
NOTE 10 LOAN SALES AND SECURITI
NOTE 10 LOAN SALES AND SECURITIZATIONS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 10 LOAN SALES AND SECURITIZATIONS | NOTE 10 LOAN SALES AND SECURITIZATIONS Loan Sales We sell residential and commercial mortgage loans to government-sponsored enterprises (GSEs) and in certain instances to other third-party investors. The GSEs, such as Government National Mortgage Association (GNMA), Federal National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corporation (FHLMC), generally securitize our transferred loans into mortgage-backed securities for sale into the secondary market. Generally, we do not retain any interest in the transferred loans other than mortgage servicing rights. Refer to Note 9 Goodwill and Other Intangible Assets for further discussion on our residential and commercial mortgage servicing rights assets. During the first nine months of 2009, residential and commercial mortgage loans sold totaled $17.0 billion and $4.3 billion, respectively. During the third quarter of 2009, residential and commercial mortgage loans sold totaled $5.0 billion and $881 million, respectively. During the first nine months of 2008, commercial mortgage loans sold totaled $2.6 billion, including $791 million during the third quarter. There were no residential mortgage loans sales in 2008 as these activities were obtained through our acquisition of National City. Our continuing involvement in these loan sales consists primarily of servicing and limited repurchase obligations for loan and servicer breaches in representations and warranties. Generally, we hold a cleanup call repurchase option for loans sold with servicing retained to the other third-party investors. In certain circumstances as servicer, we advance principal and interest payments to the GSEs and other third-party investors and also may make collateral protection advances. Our risk of loss in these servicing advances has historically been minimal. We maintain a liability for estimated losses on loans expected to be repurchased as a result of breaches in loan and servicer representations and warranties. We have also entered into recourse arrangements associated with commercial mortgage loans sold to FNMA and FHLMC. Refer to Note 18 Commitments and Guarantees for further discussion on our repurchase liability and recourse arrangements. Our maximum exposure to loss in our loan sale activities is limited to these repurchase and recourse obligations. In addition, for certain loans sold to GNMA and FNMA, we hold an option to repurchase individual delinquent loans that meet certain criteria. Without prior authorization from these GSEs, this option gives PNC the ability to repurchase the delinquent loan at par. Under GAAP, once we have the unilateral ability to repurchase the delinquent loan, effective control over the loan has been regained and we are required to recognize the loan and a corresponding repurchase liability on the balance sheet regardless of our intent to repurchase the loan. At September30, 2009 and December31, 2008, the balance of our repurchase option asset and liability totaled $1.2 billion and $476 million, respectively. Securitizations In securitizations, loans are typically transferred to a qualifying special purpose entity (QSPE) that is demonstrably dist |
NOTE 11 CAPITAL SECURITIES OF S
NOTE 11 CAPITAL SECURITIES OF SUBSIDIARY TRUSTS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 11 CAPITAL SECURITIES OF SUBSIDIARY TRUSTS | NOTE 11 CAPITAL SECURITIES OF SUBSIDIARY TRUSTS Our capital securities of subsidiary trusts are described in Note 14 Capital Securities of Subsidiary Trusts in our 2008 Form10-K. All of these Trusts are wholly owned finance subsidiaries of PNC. In the event of certain changes or amendments to regulatory requirements or federal tax rules, the capital securities are redeemable. The financial statements of the Trusts are not included in PNCs consolidated financial statements in accordance with GAAP. The obligations of the respective parent of each Trust, when taken collectively, are the equivalent of a full and unconditional guarantee of the obligations of such Trust under the terms of the Capital Securities. Such guarantee is subordinate in right of payment in the same manner as other junior subordinated debt. There are certain restrictions on PNCs overall ability to obtain funds from its subsidiaries. For additional disclosure on these funding restrictions, including an explanation of dividend and intercompany loan limitations, see Note 23 Regulatory Matters in our 2008 Form 10-K. PNC is subject to restrictions on dividends and other provisions similar to or in some ways more restrictive than those potentially imposed under the Exchange Agreements with Trust II and Trust III, as described in Note 3 Variable Interest Entities in our 2008 Form 10-K. PNC is also subject to dividend restrictions as a result of our issuance of preferred stock to the US Treasury under the TARP Capital Purchase Program as described in Note 19 Shareholders Equity in our 2008 Form 10-K. |
NOTE 12 CERTAIN EMPLOYEE BENEFI
NOTE 12 CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 12 CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS | NOTE 12 CERTAIN EMPLOYEE BENEFIT AND STOCK-BASED COMPENSATION PLANS PENSION AND POSTRETIREMENT PLANS As described in Note 15 Employee Benefit Plans in our 2008 Form 10-K, we have a noncontributory, qualified defined benefit pension plan (plan or pension plan) covering eligible employees. National City had a qualified pension plan covering substantially all employees hired prior to April1, 2006, which was merged with our qualified pension plan on December31, 2008. Both the PNC and National City portions of the plan derive benefits from cash balance formulas based on compensation levels, age, and length of service. Pension contributions are based on an actuarially determined amount necessary to fund total benefits payable to plan participants. As of the plan merger date, no changes to either plan design or benefits occurred. We also maintain nonqualified supplemental retirement plans for certain employees. On December31, 2008, the participants of National Citys supplemental executive retirement plans became 100% vested due to the change in control. We also provide certain health care and life insurance benefits for qualifying retired employees (postretirement benefits) through various plans. The nonqualified pension and postretirement benefit plans are unfunded. The Company reserves the right to terminate or make plan changes at any time. The components of our net periodic pension and post-retirement benefit cost for the third quarter and first nine months of 2009 and 2008 were as follows: Qualified Pension Plan Nonqualified RetirementPlans Postretirement Benefits Three months ended September30 In millions 2009 2008 2009 2008 2009 2008 Net periodic cost consists of: Service cost $ 22 $ 11 $ 1 $ 1 $ 1 $ 1 Interest cost 52 21 4 2 5 4 Expected return on plan assets (65 ) (40 ) Amortization of prior service cost (1 ) (1 ) (2 ) Amortization of actuarial losses 21 Net periodic cost (benefit) $ 29 $ (8 ) $ 5 $ 3 $ 5 $ 3 Qualified Pension Plan Nonqualified RetirementPlans Postretirement Benefits Nine months ended September30 In millions 2009 2008 2009 2008 2009 2008 Net periodic cost consists of: Service cost $ 67 $ 33 $ 2 $ 1 $ 3 $ 2 Interest cost 155 64 11 5 15 11 Expected return on plan assets (195 ) (120 ) Amortization of prior service cost (1 ) (1 ) (3 ) (5 ) Amortization of actuarial losses 62 1 1 Net periodic cost (benefit) $ 88 $ (24 ) $ 14 $ 7 $ 15 $ 8 STOCK-BASED COMPENSATION PLANS As more fully described in Note 16 Stock-Based Compensation Plans in our 2008 Form 10-K, we have long-term incentive award plans (I |
NOTE 13 FINANCIAL DERIVATIVES
NOTE 13 FINANCIAL DERIVATIVES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 13 FINANCIAL DERIVATIVES | NOTE 13 FINANCIAL DERIVATIVES We use a variety of derivative financial instruments to help manage interest rate, market and credit risk and reduce the effects that changes in interest rates may have on net income, fair value of assets and liabilities, and cash flows. These instruments include interest rate swaps, interest rate caps and floors, credit default swaps, futures contracts, and total return swaps. All derivatives are carried at fair value. Derivatives Designated in Hedge Relationships We enter into interest rate swaps to hedge the fair value of bank notes, Federal Home Loan Bank borrowings, senior debt and subordinated debt for changes in interest rates. Adjustments related to the ineffective portion of fair value hedging instruments are recorded in interest expense. We enter into interest rate swap contracts to modify the interest rate characteristics of designated commercial loans from variable to fixed in order to reduce the impact of changes in future cash flows due to interest rate changes. We hedged our exposure to the variability of future cash flows for all forecasted transactions for a maximum of 10 years for hedges converting floating-rate commercial loans to fixed. The fair value of these derivatives is reported in other assets or other liabilities and offset in accumulated other comprehensive income (loss) for the effective portion of the derivatives. We subsequently reclassify any unrealized gains or losses related to these swap contracts from accumulated other comprehensive income (loss) into interest income in the same period or periods during which the hedged forecasted transaction affects earnings. Ineffectiveness of the strategies, if any, is recognized immediately in earnings. During the next twelve months, we expect to reclassify to earnings $306 million of pretax net gains, or $199 million after-tax, on cash flow hedge derivatives currently reported in accumulated other comprehensive loss. This amount could differ from amounts actually recognized due to changes in interest rates and the addition of other hedges subsequent to September30, 2009. These net gains are anticipated to result from net cash flows on receive fixed interest rate swaps that would impact interest income recognized on the related floating rate commercial loans. As of September30, 2009 we have determined that there were no hedging positions where it was probable that certain forecasted transactions may not occur within the originally designated time period. The ineffective portion of the change in value of our fair value and cash flow hedge derivatives resulted in net losses of $29 million for the first nine months of 2009 compared to a net gain of $2 million for the first nine months of 2008. Derivatives Not Designated in Hedge Relationships The derivative portfolio also includes free standing derivative financial instruments not included in hedging strategies. These derivatives are entered into for risk management and economic hedge purposes, to meet customer needs, and for proprietary purposes. They primarily consist of interest rate, basis and total rate of return swaps, interest rate caps, floors and futures contracts |
NOTE 14 EARNINGS PER SHARE
NOTE 14 EARNINGS PER SHARE | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 14 EARNINGS PER SHARE | NOTE 14 EARNINGS PER SHARE The following table sets forth basic and diluted earnings per common share calculations: Three months ended September30 Nine months ended September30 In millions, except share and per share data 2009 2008 2009 2008 Basic Net income $ 559 $ 259 $ 1,296 $ 1,160 Less: Net income (loss) attributable to noncontrolling interests (20 ) 11 (7 ) 30 Dividends distributed to common shareholders 46 227 382 668 Dividends distributed to preferred shareholders 99 269 Dividends distributed to nonvested restricted shares 1 1 4 Preferred stock discount accretion 13 42 Undistributed net income $ 421 $ 20 $ 609 $ 458 Percentage of undistributed income allocated to common shares 99.7 % 99.5 % 99.7 % 99.5 % Undistributed income allocated to common shares $ 419 $ 20 $ 607 $ 456 Plus common dividends 46 227 382 668 Net income attributable to basic common shares $ 465 $ 247 $ 989 $ 1,124 Basic weighted-average common shares outstanding 459,632 345,049 451,417 342,780 Basic earnings per common share $ 1.01 $ .72 $ 2.19 $ 3.28 Diluted Net income attributable to basic common shares $ 465 $ 247 $ 989 $ 1,124 Less: BlackRock common stock equivalents 5 6 9 11 Net income attributable to diluted common shares $ 460 $ 241 $ 980 $ 1,113 Basic weighted average common shares outstanding 459,632 345,049 451,417 342,780 Weighted-average common shares to be issued: Convertible preferred stock 537 562 538 570 Convertible debentures 1 Stock options (a) 460 1,356 219 1,193 Warrants (b) Other performance awards 300 281 281 280 Diluted weighted-average common shares outstanding 460,929 347,248 452,455 344,824 Diluted earnings per common share $ 1.00 $ .70 $ 2.17 $ 3.23 (a)Excludes stock options considered to be anti-dilutive (in thousands) 15,440 5,129 16,060 6,029 (b)Excludes warrants considered to be anti-dilutive (in thousands) 21,929 21,929 Basic earnings per share is calculated using the two-class method to determine income attributable to common stockholders. The two-class method requires undistributed earnings for the period, which represents net income less common and participating security dividends (if applicable) declared or paid, to be allocated between the common and participating security stockholders based upon their respective rights to receive dividends. Participating securities include unv |
NOTE 15 TOTAL EQUITY AND OTHER
NOTE 15 TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 15 TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME | NOTE 15 TOTAL EQUITY AND OTHER COMPREHENSIVE INCOME Activity in total equity for the first nine months of 2009 follows. The par value of our preferred stock outstanding at September30, 2009 totaled less than $.5 million and, therefore, is excluded from the table. Shareholders Equity In millions, except per share data Shares Outstanding Common Stock Common Stock Capital Surplus Preferred Stock Capital Surplus Common Stock and Other Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Noncontrolling Interests Total Equity Balance at December31, 2008 443 $ 2,261 $ 7,918 $ 8,328 $ 11,461 $ (3,949 ) $ (597 ) $ 2,226 $ 27,648 Cumulative effect of adopting FASB ASC 320-10 110 (110 ) Balance at January1, 2009 443 2,261 7,918 8,328 11,571 (4,059 ) (597 ) 2,226 27,648 Net income 1,303 (7 ) 1,296 Other comprehensive income (loss), net of tax Other-than-temporary impairment losses on debt securities (589 ) (589 ) Net unrealized securities gains 2,768 2,768 Net unrealized losses on cash flow hedge derivatives (129 ) (129 ) Pension, other postretirement and postemployment benefit plan adjustments 48 48 Other 14 14 Comprehensive income (7 ) 3,408 Cash dividends declared Common ($.86 per share) (384 ) (384 ) Preferred (269 ) (269 ) Preferred stock discount accretion 42 (42 ) Supervisory Capital Assessment Program issuance 15 75 549 624 Common stock activity 3 12 84 96 Treasury stock activity (a) (151 ) 125 (26 ) Other 50 516 566 Balance at September30, 2009 461 $ 2,348 $ 7,960 $ 8,860 $ 12,179 $ (1,947 ) $ (472 ) $ 2,735 $ 31,663 Comprehensive loss for the first nine months of 2008 was $953 million. A summary of the components of the change in accumulated other comprehensive income (loss) follows: Nine months ended September30, 2009 In millions Pretax Tax(Expense) Benefit After-tax Change in net unrealized securities losses: Decrease in net unrealized losses on securities held at period end $ 4,541 $ (1,666 |
NOTE 16 SUMMARIZED FINANCIAL IN
NOTE 16 SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 16 SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK | NOTE 16 SUMMARIZED FINANCIAL INFORMATION OF BLACKROCK As required by SEC Regulation S-X, summarized consolidated financial information of BlackRock follows. In millions Nine months ended Sept. 30 2009 2008 Total revenue $ 3,156 $ 4,000 Total expenses 2,267 2,745 Operating income 889 1,255 Non-operating income (expense) (24 ) (165 ) Income before income taxes 865 1,090 Income tax expense 225 394 Net income 640 696 Less: net income (loss) attributable to non-controlling interests 21 (36 ) Net income attributable to BlackRock $ 619 $ 732 In millions Three months ended Sept. 30 2009 2008 Total revenue $ 1,140 $ 1,313 Total expenses 783 859 Operating income 357 454 Non-operating income (expense) 78 (141 ) Income before income taxes 435 313 Income tax expense 101 117 Net income 334 196 Less: net income (loss) attributable to non-controlling interests 17 (21 ) Net income attributable to BlackRock $ 317 $ 217 |
NOTE 17 LEGAL PROCEEDINGS
NOTE 17 LEGAL PROCEEDINGS | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 17 LEGAL PROCEEDINGS | NOTE 17 LEGAL PROCEEDINGS The disclosure below updates the description of legal proceedings in Note 24 Legal Proceedings in Part II, Item 8 of our 2008 Form 10-K and in Note 17 Legal Proceedings in PartI, Item 1 of our first and second quarter 2009 Quarterly Reports on Form 10-Q. National City Matters Visa. Although PNC Bank, N.A. is not named a defendant in any of the litigation currently pending against Visa, MasterCard, and several major financial institutions, including in some cases National City (since merged into PNC) and its subsidiary, National City Bank of Kentucky, since merged into National City Bank and was not initially a party to the judgment or loss sharing agreements to which National City and National City Bank are parties, it becomes responsible for National City Banks position in the litigation and under the agreements upon completion of the merger of National City Bank into PNC Bank, N.A., in addition to its existing indemnification obligations. Derivative Cases. In October 2009, the United States District Court for the Northern District of Ohio entered an order dismissing the consolidated shareholder derivative complaint. Securities and State Law Fiduciary Cases. In the lawsuit filed in January 2008 in the United States District Court for the Northern District of Ohio against National City and certain officers and directors of National City, plaintiffs have filed objections to the recommendation of the magistrate judge that the lawsuit be dismissed without prejudice. The recommendation remains subject to approval by the district court. National City Acquisition-Related Litigation In September 2009, objectors to the settlement previously approved by the Delaware Chancery Court filed an appeal of the approval to the Delaware Supreme Court. This appeal remains pending. Sterling Financial Corporation Matters In April 2008, we completed the acquisition of Sterling through the merger of Sterling Financial Corporation into The PNC Financial Services Group, Inc. As a result, we became responsible for litigation pending against Sterling and its subsidiaries at that time. Several class action lawsuits were filed in May, June and July 2007 in the United States District Courts for the Eastern District of Pennsylvania and the Southern District of NewYork related to Sterlings commercial finance subsidiary, Equipment Finance LLC, which we refer to as EFI. In October 2007, the lawsuits filed in New York were transferred to the Pennsylvania court for coordinated pretrial proceedings. In February 2008, the plaintiffs filed a consolidated amended complaint on behalf of those who purchased Sterling common stock during the period from April27, 2004 through May24, 2007. This complaint named Sterling, Bank of Lancaster County, N.A. (a predecessor to a bank subsidiary of Sterling), EFI, and members of their management as defendants. The plaintiffs alleged violations of the federal securities laws, including allegations that Sterlings public statements and filings fraudulently omitted information and included fraudulent misrepresentations about the improprieties at EFI as well as about their impact on Sterlings earnings a |
NOTE 18 COMMITMENTS AND GUARANT
NOTE 18 COMMITMENTS AND GUARANTEES | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 18 COMMITMENTS AND GUARANTEES | NOTE 18 COMMITMENTS AND GUARANTEES EQUITY FUNDING AND OTHER COMMITMENTS Our unfunded commitments at September30, 2009 included private equity investments of $473 million and other investments of $111 million. STANDBY LETTERS OF CREDIT We issue standby letters of credit and have risk participations in standby letters of credit and bankers acceptances issued by other financial institutions, in each case to support obligations of our customers to third parties, such as remarketing programs for customers variable rate demand notes. Net outstanding standby letters of credit totaled $9.9 billion at September30, 2009 and $10.3 billion at December31, 2008. Based on PNCs internal risk rating process for standby letters of credit as of September30, 2009, 85% of the net outstanding balance had internal credit ratings of pass, indicating the expected risk of loss is currently low compared to 88% as of December31, 2008, while 15% of the net outstanding balance as of September30, 2009 had internal risk ratings below pass, indicating a higher degree of risk of default compared to 12% as of December31, 2008. If the customer fails to meet its financial or performance obligation to the third party under the terms of the contract or there is a need to support a remarketing program, then upon the request of the guaranteed party, we would be obligated to make payment to them. The standby letters of credit and risk participations in standby letters of credit and bankers acceptances outstanding on September30, 2009 had terms ranging from less than 1 year to 10 years. The aggregate maximum amount of future payments PNC could be required to make under outstanding standby letters of credit and risk participations in standby letters of credit and bankers acceptances was $13.2 billion at September30, 2009, of which $5.4 billion support remarketing programs. As of September30, 2009, assets of approximately $1 billion secured certain specifically identified standby letters of credit. Approximately $3.3 billion in recourse provisions from third parties was also available for this purpose as of September30, 2009. In addition, a portion of the remaining standby letters of credit and letter of credit risk participations issued on behalf of specific customers is also secured by collateral or guarantees that secure the customers other obligations to us. The carrying amount of the liability for our obligations related to standby letters of credit and risk participations in standby letters of credit and bankers acceptances was $296 million at September30, 2009. STANDBY BOND PURCHASE AGREEMENTS AND OTHER LIQUIDITY FACILITIES We enter into standby bond purchase agreements to support municipal bond obligations. At September30, 2009, the aggregate of our commitments under these facilities was $483 million. We also enter into certain other liquidity facilities to support individual pools of receivables acquired by commercial paper conduits including Market Street. At September30, 2009, our total commitments under these facilities were $5.9 billion, of which $5.8 billion was related to Market Street. INDEMNIFICATIONS As further described in our 2008 Form 10-K, we |
NOTE 19 SEGMENT REPORTING
NOTE 19 SEGMENT REPORTING | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Notes to Financial Statements [Abstract] | |
NOTE 19 SEGMENT REPORTING | NOTE 19 SEGMENT REPORTING In the first quarter of 2009, we made changes to our business organization structure and management reporting in conjunction with the acquisition of National City. As a result, we now have seven reportable business segments, which include: Retail Banking Corporate Institutional Banking Asset Management Group Residential Mortgage Banking BlackRock Global Investment Servicing Distressed Assets Portfolio Business segment results for the third quarter and first nine months of 2008 have been reclassified to reflect current methodologies and current business and management structure and to present those periods on the same basis. Results of individual businesses are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to GAAP; therefore, the financial results of our individual businesses are not necessarily comparable with similar information for any other company. We refine our methodologies from time to time as our management accounting practices are enhanced and our businesses and management structure change. Financial results are presented, to the extent practicable, as if each business operated on a stand-alone basis. As permitted under GAAP, we have aggregated the business results for certain similar operating segments for financial reporting purposes. Assets receive a funding charge and liabilities and capital receive a funding credit based on a transfer pricing methodology that incorporates product maturities, duration and other factors. Capital is intended to cover unexpected losses and is assigned to the banking and servicing businesses using our risk-based economic capital model. We have assigned capital to Retail Banking equal to 6% of funds to reflect the capital required for well-capitalized domestic banks and to approximate market comparables for this business. The capital assigned for Global Investment Servicing reflects its legal entity shareholders equity. We have allocated the allowances for loan and lease losses and unfunded loan commitments and letters of credit based on our assessment of risk inherent in each business segments loan portfolio. Our allocation of the costs incurred by operations and other shared support areas not directly aligned with the businesses is primarily based on the use of services. Total business segment financial results differ from total consolidated results. The impact of these differences is reflected in the Other category in the business segment tables. Other includes residual activities that do not meet the criteria for disclosure as a separate reportable business, including LTIP share distributions and obligations, earnings and gains related to Hilliard Lyons for the first quarter of 2008, integration costs, asset and liability management activities including net securities gains or losses and certain trading activities, exited businesses, equity management activities, alternative investments, intercompany eliminations, most corporate overhead, and di |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Text Block] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | 2009-09-30 |
Entity Information
Entity Information (USD $) | ||
9 Months Ended
Sep. 30, 2009 | Oct. 30, 2009
| |
Entity [Text Block] | ||
Trading Symbol | PNC | |
Entity Registrant Name | PNC FINANCIAL SERVICES GROUP INC | |
Entity Central Index Key | 0000713676 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 461,290,310 |