PNC Posts $2.4bn Gain, 61 Permanent HAMP Mods in 2009
[Update 1: Adds net income from BlackRock activities.] The PNC Financial Services Group (PNC) reported a Q409 net income of $1.1bn, or $2.17 per diluted common share, an increase from the $559m gain in Q309. The company's net income for the year reached $2.4bn, or $4.36 per diluted common share, compared to $914m, or $2.44 per share, in 2008. Gains related to the BlackRock (BLK) acquisition of Barclays Global Investors in June pushed the net income up from a possible $2bn. BlackRock - which merged with PNC in the mid-'90s - beat out Bank of New York Mellon for the acquisition. PNC gained $687m after taxes due to the integration, and incurred $274m in integration costs for all of 2009. "Our businesses performed well and customer growth and sales of products and services across the franchise were strong, giving us considerable momentum starting into 2010,” said James Rohr, CEO of PNC. “We continue to focus on risk management and made significant progress in transitioning to a stronger balance sheet with strengthened loan loss reserves, liquidity and capital." Through the end of 2009, PNC funded roughly 2,100 refinances totaling $400m through the Home Affordable Refinance Program (HARP). But PNC Mortgage, its servicing subsidiary, gave permanent modifications to 61 borrowers under the Home Affordable Modification Program (HAMP) since it joined the program in July 2009, according to the latest Treasury Department report for December. PNC holds more than 40,000 HAMP-eligible loans in its portfolio and started more than 12,000 trials or 30% of its eligible loans. Under HAMP, the Treasury provides capped incentive payments to servicers for the modification of loans on the verge of foreclosure. PNC currently holds a $37m incentive cap under HAMP. All participating servicers issued more than 66,000 permanent modifications through December, according to the report. Captial ratios at PNC continued to grow, as its Tier 1 common equity ratio increased 50bps to 6% at the end of the quarter. The estimated Tier 1 risk-based capital ratio grew 60bps to 11.5% at the end of the year. Its loan to deposit ratio reached 84% at the end of Q409. PNC held $269bn in assets by the end of the quarter. Nonperforming loans increased to 3.6% of the entire PNC portfolio from 3.19% in the previous quarter and 0.95% at the end of 2008. Write to Jon Prior.