This excerpt taken from the PNC 8-K filed Jan 17, 2008.
Reaches record assets of $139 billion
PITTSBURGH, Jan. 17, 2008 The PNC Financial Services Group, Inc. (NYSE: PNC) today reported 2007 net income of $1.5 billion, or $4.35 per diluted share, compared with 2006 net income of $2.6 billion, or $8.73 per diluted share. Net income for 2006 included a $1.3 billion after-tax gain from the BlackRock/Merrill Lynch Investment Managers (MLIM) transaction. Net income for the fourth quarter of 2007 was $178 million, or $.52 per diluted share, compared with $376 million, or $1.27 per diluted share, in the fourth quarter of 2006.
PNC had a good year in 2007 given the operating environment. We generated solid financial results, we closed several acquisitions and our assets reached record levels. However, our fourth quarter performance did not meet our expectations due to challenges that included unprecedented market volatility and credit deterioration in our residential real estate development portfolio, said PNC Chairman and Chief Executive Officer James E. Rohr. Assuming a reasonable economy, we believe PNC is well positioned for an even better year in 2008.
PNC earned adjusted net income of $1.7 billion, or $5.05 per diluted share, for the year compared with 2006 adjusted net income of $1.5 billion, or $5.08 per diluted share. Adjusted net income for 2007 increased 12 percent over 2006 and was positively impacted by higher revenue from the Mercantile Bankshares Corporation acquisition and organic business growth, partially offset by an increase in the provision for credit losses. Fourth quarter 2007 adjusted net income was $365 million, or $1.07 per diluted share, compared with adjusted net income of $391 million, or $1.32 per diluted share, for fourth quarter 2006.
- more -
PNC Reports 2007 Net Income of $1.5 Billion and Adjusted Net Income of $1.7 Billion - Page 2
To help to better understand trends at PNC, some of the period-to-period comparisons in this release are presented on an adjusted basis. References to adjusted amounts in this release reflect, as applicable, the following types of adjustments: (1) adjusting 2006 as if we had recorded our BlackRock investment on the equity method prior to its deconsolidation on September 29, 2006; (2) adjusting to exclude a gain from the BlackRock/MLIM transaction and losses from repositioning PNCs securities and mortgage loan portfolios in 2006; the net effects of PNCs BlackRock long-term incentive plan (LTIP) shares obligation in all 2007 periods and fourth quarter 2006; a charge for an indemnification obligation related to certain Visa litigation in the fourth quarter of 2007; and integration costs in all periods; and (3) adjusting, as appropriate, for the tax impact of these adjustments. Details of all adjustments, including reconciliations to reported results under generally accepted accounting principles (GAAP), are included in the Consolidated Financial Highlights section of this release. This section also includes a reconciliation of taxable-equivalent net interest income to net interest income as reported under GAAP.