PNC Bank to repay TARP money; Fiserv caps strong year; Law firm seeks claims against MGIC; NARI recognizes RitzHolman for nonprofit accounting
PNC Bank to repay TARP money
PNC Financial Services Group Inc. has reached an agreement with U.S. banking regulators and the U.S. Treasury to repay the roughly $7.6 billion the bank holding company received under the Troubled Asset Relief Program (TARP), part of the Capital Purchase Program.
The bank also is planning to offer roughly $3 billion in common stock to investors.
PNC Financial Services Group is the parent company of Cleveland-based National City Bank, which it acquired in December, 2008. National City operates branches in the Milwaukee market.
PNC’s fourth quarter 2009 net income was $1.1 billion, or $2.17 per diluted common share, compared with net income of $559 million, or $1.00 per diluted common share, for the third quarter of 2009.
"During the most challenging economic environment of our time, the execution of the PNC business model resulted in exceptional 2009 performance," said James Rohr, chairman and chief executive officer of Pittsburgh-based PNC. "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. 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."
PNC recently announced plans to sell PNC Global Investment Servicing, a provider of fund processing products and services, to BNY Mellon for about $2.3 billion. The transaction is expected to close in the third quarter of this year.
“With signs of an improving economic environment and stabilizing financial system, we believe now is the appropriate time for us to redeem the preferred shares held by the U.S. Treasury,” Rohr said. “As a result, we are pleased to have reached an agreement with our regulators to return the taxpayers’ investment in PNC. These strategic actions are expected to improve the quality of our capital and position us for further growth. Collectively, we believe these actions are in the best interests of our shareholders, customers and employees.”
Fiserv caps strong year
Brookfield-based Fiserv Inc. reported fourth quarter net income of $118 million, or 76 cents per share, up from $62 million, or 39 cents per share, in the same period a year ago.
The company’s quarterly total revenues grew to $1.06 billion from $1.04 billion a year earlier.
For the full year, Fiserv’s total adjusted revenue for the year decreased 1 percent to $3.87 billion from $3.89 billion in 2008.
"We finished the year with a strong fourth quarter highlighted by positive revenue growth, record December sales and superior free cash flow providing momentum as we enter the new year," said Jeffery Yabuki, president and chief executive officer of Fiserv. "In a challenging 2009, we delivered on our financial goals and enhanced our strategic position. These results reflect our industry-leading commitment to clients and the value of our integrated product offerings."
Fiserv expects 2010 adjusted internal revenue growth to be in a range of 1 to 3 percent. "The strong finish to 2009 is another proof point that our strategy is working. Although we believe the environment in 2010 will remain tough, we expect to grow revenue, earnings and free cash flow while continuing to invest in solutions that will help our clients to be even more successful," Yabuki said.
Neenah Foundry’s corporate parent files for Chapter 11 bankruptcy
Neenah Enterprises, Inc., one of the largest foundry companies in the United States and a large supplier of castings to the domestic municipal and industrial markets, has filed for reorganization under Chapter 11 of the the U.S. bankruptcy code. The company also said it has reached an agreement in principle with key creditors on reorganization that will reduce its debt by approximately $220 million while providing 100% recoveries for its suppliers and vendors.
"We’ve been going through efforts to streamline operations and reduce expenses over the last few years, with the intent of keeping sufficient liquidity to move operations forward," says Robert E. Ostendorf, Jr., President and CEO of NEI. "We will emerge from this stronger and more financially sound than ever. There is a bright future ahead for NEI."
The Company also announced that, pending the Bankruptcy Court’s approval, it has received commitments for up to $140 million in debtor-in-possession (DIP) financing to fund continuing operations. The financing will provide ample liquidity for the company and will allow it to continue funding its ongoing operations, including the payment of all employee wages and benefits in the ordinary course and the payment of all post-petition obligations to suppliers.
The Company filed a variety of customary "first day" motions with the Bankruptcy Court to enable it to continue business as usual during the restructuring. These motions include requests to continue paying employee wages and benefits in the ordinary course and to continue all existing customer programs.
Law firm seeks claims against MGIC
The Law Offices of Howard G. Smith in Bensalem, Pa., is investigating potential claims against Milwaukee-based MGIC Investment Corp. about whether the company’s 401(k) savings plan imprudently invested in MGIC stock and whether the plan’s administrators breached their fiduciary duties to the plan’s participants in violation of the Employee Retirement Income Security Act of 1974 (ERISA).
The investigation concerns public statements issued by MGIC between Oct. 12, 2006, and Feb. 12, 2008, regarding the company’s business, operations, financial performance and prospects.
According to a shareholder lawsuit pending in the United States District Court for the Eastern District of Wisconsin, MGIC and some of its executive officers failed to disclose and/or misrepresented the company’s exposure to losses related to its investments in entities established to invest in risky subprime mortgages.
The investigation concerns whether MGIC and other administrators of the plan failed to prudently and loyally manage the plans’ investments in MGIC stock by continuing to offer company stock when it was no longer a prudent investment for participants’ retirement savings.
NARI recognizes RitzHolman for nonprofit accounting
RitzHolman CPAs, a Milwaukee-based accounting firm, recently received the Affiliate Organization of the Year award from the Milwaukee Chapter of the National Association of the Remodeling Industry (NARI).
“As an industry leader in nonprofit accounting, RitzHolman CPAs has brought a fresh and educated perspective on the association’s finances and reporting,” said David Feldner, CAE, executive director of Milwaukee/NARI. “Not only is the responsiveness and customer service from the firm’s personnel second to none, but RitzHolman CPAs provided information on ways to improve our general accounting practices and provided reports that benchmarked the association’s financial health to those of similar size and budget. It is that extra effort that separates RitzHolman CPAs from other qualified accounting firms.”
