NOTE 10 LOAN SALES AND SECURITIZATIONS Loan Sales We sell residential and commercial mortgage loans in loan securitization transactions sponsored by Government National Mortgage Association (GNMA), FNMA, and FHLMC and in certain instances to other third-party investors.
GNMA, FNMA, and the FHLMC 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 2009, residential and commercial mortgage loans sold totaled $19.8 billion and $5.7 billion, respectively.
During 2008, commercial mortgage loans sold totaled $3.1 billion.
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 25 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 transferred in the GNMA and FNMA transactions, 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 December 31, 2009 and December 31, 2008, the balance of our repurchase option asset and liability totaled $577 million and $476 million, respectively.
Securitizations In securitizations, loans are typically transferred to a qualifying special purpose entity (QSPE) that is demonstrably distinct from the transferor to transfer the risk from our Consolidated Balance Sheet.
A QSPE is a bankruptcy-remote trust allowed to perform only certain passive activities.
In addition, these entities are self-liquidating and in certain instances are structured as Real Estate Mortgage Investment Conduits (REMICs) for tax purposes.
The QSPEs are generally financed by issuing certificates for various levels of senior and subordinated tranches.
QSPEs are exempt from consolidation provided certain conditions are met.
Our securitization activities were primarily obtained through our acquisition of National City.
Credit card receivables, automobile, and residential mortgage loans were securitized through QSPEs sponsored by NCB.
These QSPEs were financed primarily through the issuance and sale of beneficial interests to independent third parties and were not consolidated on our balance sheet at December 31, 2009 or December 31, 2008.
However, see Note 1 Accounting Policies regarding accounting guidance that impacts the accounting for these QSPEs effective January 1, 2010.
Qualitative and quantitative information about the securitization QSPEs and our retained interests in these transactions follow.
The following summarizes the assets and liabilities of the securitization QSPEs associated with securitization transactions that were outstanding at December 31, 2009.
## Table 0 ##
(a) Represents period-end outstanding principal balances of loans transferred to the securitization QSPEs.
Credit Card Loans At December 31, 2009, the credit card securitization series 2005-1, 2006-1, 2007-1, and 2008-3 were outstanding.
During the fourth quarter of 2009, the 2008-1 and 2008-2 credit card securitization series matured.
Our continuing involvement in the securitized credit card receivables consists primarily of servicing and our holding of certain retained interests.
Servicing fees earned approximate current market rates for servicing fees; therefore, no servicing asset or liability is recognized.
We hold a clean-up call repurchase option to the extent a securitization series extends past its scheduled note principal payoff date.
To the extent this occurs, the clean-up call option is triggered when the principal balance of the assetbacked notes of any series reaches 5% of the initial principal balance of the asset-backed notes issued at the securitization date.
ITEM 6 – SELECTED FINANCIAL DATA
## Table 1 ##
(a) Includes the impact of National City, which we acquired on December 31, 2008.
(b) Amount for 2009 included $1.076 billion gain related to BlackRock’s acquisition of Barclays Global Investors (BGI) on December 1, 2009.
(c) Amount for 2008 included $504 million conforming provision for credit losses related to our National City acquisition.
(d) Reflects results of operations for PNC Global Investment Servicing for all years presented.
See Pending Sale of PNC Global Investment Servicing in the Executive Summary section of Item 7 and Note 2 Acquisitions and Divestitures in the Notes To Consolidated Financial Statements included in Item 8 of this Report for additional information.
(e) Amount for 2009 included $332 million paid under the TARP Capital Purchase Program.
Certain prior-period amounts have been reclassified to conform with the current period presentation, which we believe is more meaningful to readers of our consolidated financial statements.
See Note 2 Acquisitions and Divestitures in the Notes To Consolidated Financial Statements in Item 8 of this Report for information on significant recent business acquisitions and divestitures, including our December 31, 2008 acquisition of National City and our pending 2010 sale of GIS.
For information regarding certain business risks, see Item 1A Risk Factors and the Risk Management section of Item 7 of this Report.
Also, see our Cautionary Statement Regarding Forward-Looking Information included in Item 7 of this Report for certain risks and uncertainties that could cause actual results to differ materially from those anticipated in forward-looking statements or from historical performance.
?
Revenue growth, ?
A sustained focus on expense management, including achieving our cost savings targets associated with our National City integration, and creating positive pre-tax, pre-provision earnings, ?
Managing the distressed assets portfolio and other impaired assets, ?
Maintaining our overall asset quality and continuing to meet evolving regulatory capital standards, ?
Continuing to maintain and grow our deposit base as a low-cost funding source, ?
Prudent risk and capital management leading to a return to our desired moderate risk profile, and ?
Actions we take within the capital and other financial markets.
Summary Financial Results
## Table 2 ##
On December 1, 2009, BlackRock acquired Barclays Global Investors (BGI) from Barclays Bank PLC.
PNC recognized a pretax gain of $1.076 billion, or $687 million after taxes, in the fourth quarter of 2009 related to this transaction.
Additional information regarding this transaction is included within the BlackRock section of our Business Segments Review section of this Item 7.
Our earnings and related per share amounts for 2008 do not include the impact of National City, which we acquired effective December 31, 2008, other than a conforming adjustment to our provision for credit losses of $504 million and other integration costs of $71 million, both of which were recognized in the fourth quarter of 2008.
Our Consolidated Balance Sheet at December 31, 2008 includes National City’s assets and liabilities at estimated fair value.
Our performance in 2009 included the following: ?
We remain committed to responsible lending to support economic growth.
Loans and commitments originated and renewed totaled approximately $110 billion in 2009.
Included were $4 billion of small business loans originated and renewed in 2009, and we have enhanced our second-look programs for small business loan applications.
As of December 31, 2009, we had funded approximately 2,100 refinances totaling $.4 billion through the Home Affordable Refinance Program and over 70,000 solicitations under the Home Affordable Modification Program had been sent to eligible borrowers.  ?
Loans totaled $158 billion at December 31, 2009 and declined 2% during the fourth quarter reflecting a slower pace of decline compared with the first nine months of 2009.  ?
We effectively managed deposit pricing and realigned the deposit mix during 2009, growing transaction deposits by $15 billion, or 14%, and reducing nonrelationship certificates of deposit by approximately $16 billion.  ?
Pretax, pre-provision earnings of $7.2 billion exceeded the provision for credit losses by $3.2 billion for 2009.  ?
Total revenue was $16.2 billion for 2009, reflecting our diverse revenue sources.
The net interest margin increased 45 basis points to 3.82% in 2009 compared with 2008.  ?
Noninterest expense totaled $9.1 billion in 2009, including $421 million of integration costs offset by $800 million of acquisition cost savings.  ?
The pace of credit quality deterioration continued to ease during the fourth quarter of 2009.
Nonperforming assets increased $.7 billion over the third quarter to $6.3 billion, a lower increase compared with the $1.0 billion increase in the third quarter.
We strengthened loan loss reserves for the 11th consecutive quarter.
The allowance for loan and lease losses of $5.1 billion combined with $4.9 billion of marks on acquired impaired loans represented approximately 6% of loans outstanding at December 31, 2009.  ?
Capital ratios continued to grow.
The Tier 1 common equity ratio increased by 50 basis points to 6.0% at December 31, 2009 and the Tier 1 risk-based capital ratio increased by 50 basis points to 11.4% as of year-end.  ?
We continued to maintain a strong bank liquidity position with an 84% loan to deposit ratio at December 31, 2009.
Holding company liquidity remained strong with sufficient liquid assets to fund 2010 debt maturities and other corporate obligations.  ?
The acquisition of National City Corporation exceeded our expectations during 2009.
- The transaction was accretive to 2009 earnings.
- Cost savings of over $800 million were realized in 2009.
We increased our multi-year acquisition-related annualized cost savings goal to $1.5 billion from $1.2 billion and are on track to meet the new goal.
- We have successfully completed two major conversions of National City customers to the PNC platform – one in November 2009 and another in February 2010.
We expect to complete the two remaining conversions by June 2010, ahead of original plans.
- We completed the consolidation of bank charters in November 2009.
investment policy, which is described more fully in Note 15 Employee Benefit Plans in the Notes To Consolidated Financial Statements in Item 8 of this Report.
We calculate the expense associated with the pension plan and the assumptions and methods that we use include a policy of reflecting trust assets at their fair market value.
On an annual basis, we review the actuarial assumptions related to the pension plan, including the discount rate, the rate of compensation increase and the expected return on plan assets.
The discount rate and compensation increase assumptions do not significantly affect pension expense.
However, the expected long-term return on assets assumption does significantly affect pension expense.
Our expected longterm return on plan assets for determining net periodic pension expense has been 8.25% for the past three years.
The expected return on plan assets is a long-term assumption established by considering historical and anticipated returns of the asset classes invested in by the pension plan and the allocation strategy currently in place among those classes.
While this analysis gives appropriate consideration to recent asset performance and historical returns, the assumption represents a long-term prospective return.
We review this assumption at each measurement date and adjust it if warranted.
For purposes of setting and reviewing this assumption, “longterm” refers to the period over which the plan’s projected benefit obligation will be disbursed.
While year-to-year annual returns can vary significantly (rates of return for the reporting years of 2009, 2008, and 2007 were +20.61%, -32.91%, and +7.57%, respectively), the assumption represents our estimate of long-term average prospective returns.
Our selection process references certain historical data and the current environment, but primarily utilizes qualitative judgment regarding future return expectations.
Recent annual returns may differ but, recognizing the volatility and unpredictability of investment returns, we generally do not change the assumption unless we modify our investment strategy or identify events that would alter our expectations of future returns.
To evaluate the continued reasonableness of our assumption, we examine a variety of viewpoints and data.
Various studies have shown that portfolios comprised primarily of US equity securities have returned approximately 10% over long periods of time, while US debt securities have returned approximately 6% annually over long periods.
Application of these historical returns to the plan’s allocation of equities and bonds produces a result between 8% and 8.5% and is one point of reference, among many other factors, that is taken into consideration.
We also examine the plan’s actual historical returns over various periods.
Recent experience is considered in our evaluation with appropriate consideration that, especially for short time periods, recent returns are not reliable indicators of future returns, and in many cases low returns in recent time periods are followed by higher returns in future periods (and vice versa).
Acknowledging the potentially wide range for this assumption, we also annually examine the assumption used by other companies with similar pension investment strategies, so that we can ascertain whether our determinations markedly differ from other observers.
In all cases, however, this data simply informs our process, which places the greatest emphasis on our qualitative judgment of future investment returns, given the conditions existing at each annual measurement date.
The expected long-term return on plan assets for determining net periodic pension cost for 2009 was 8.25%, unchanged from 2008.
During 2010, we intend to decrease the midpoint of the plan’s target allocation range for equities by approximately five percentage points.
As a result of this change and taking into account all other factors described above, PNC will change the expected long-term return on plan assets to 8.00% for determining net periodic pension cost for 2010.
Under current accounting rules, the difference between expected long-term returns and actual returns is accumulated and amortized to pension expense over future periods.
Each one percentage point difference in actual return compared with our expected return causes expense in subsequent years to change by up to $8 million as the impact is amortized into results of operations.
The table below reflects the estimated effects on pension expense of certain changes in annual assumptions, using 2010 estimated expense as a baseline.
## Table 3 ##
(a) The impact is the effect of changing the specified assumption while holding all other assumptions constant.
We currently estimate a pretax pension expense of $41 million in 2010 compared with pretax expense of $117 million in 2009.
This year-over-year reduction was primarily due to the amortization impact of the favorable 2009 investment returns as compared with the expected long-term return assumption.
Our pension plan contribution requirements are not particularly sensitive to actuarial assumptions.
Investment performance has the most impact on contribution requirements and will drive the amount of permitted contributions in future years.
Also, current law, including the provisions of the Pension Protection Act of 2006, sets limits as to both minimum and maximum contributions to the plan.
We expect that the minimum required contributions under the law will be zero for 2010.
We maintain other defined benefit plans that have a less significant effect on financial results, including various

<table><tr><td></td><td>December 31, 2009</td><td>December 31,2008</td></tr><tr><td>In millions</td><td>Credit Card</td><td>Mortgage</td><td>Credit Card</td><td>Mortgage</td></tr><tr><td>Assets (a)</td><td>$2,368</td><td>$232</td><td>$2,129</td><td>$319</td></tr><tr><td>Liabilities</td><td>1,622</td><td>232</td><td>1,824</td><td>319</td></tr></table>
<table><tr><td></td><td colspan="5">Year ended December 31</td></tr><tr><td>Dollars in millions, except per share data</td><td>2009 (a)</td><td>2008</td><td>2007</td><td>2006</td><td>2005</td></tr><tr><td> SUMMARYOFOPERATIONS</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Interest income</td><td>$12,086</td><td>$6,301</td><td>$6,144</td><td>$4,592</td><td>$3,720</td></tr><tr><td>Interest expense</td><td>3,003</td><td>2,447</td><td>3,197</td><td>2,309</td><td>1,533</td></tr><tr><td>Net interest income</td><td>9,083</td><td>3,854</td><td>2,947</td><td>2,283</td><td>2,187</td></tr><tr><td>Noninterest income (b)</td><td>7,145</td><td>2,442</td><td>2,944</td><td>5,422</td><td>3,297</td></tr><tr><td>Total revenue</td><td>16,228</td><td>6,296</td><td>5,891</td><td>7,705</td><td>5,484</td></tr><tr><td>Provision for credit losses (c)</td><td>3,930</td><td>1,517</td><td>315</td><td>124</td><td>21</td></tr><tr><td>Noninterest expense</td><td>9,073</td><td>3,685</td><td>3,652</td><td>3,795</td><td>3,662</td></tr><tr><td>Income from continuing operations before income taxes and noncontrolling interests</td><td>3,225</td><td>1,094</td><td>1,924</td><td>3,786</td><td>1,801</td></tr><tr><td>Income taxes</td><td>867</td><td>298</td><td>561</td><td>1,311</td><td>547</td></tr><tr><td>Income from continuing operations before noncontrolling interests</td><td>2,358</td><td>796</td><td>1,363</td><td>2,475</td><td>1,254</td></tr><tr><td>Income from discontinued operations (net of income taxes of $54, $63, $66, $52 and$57) (d)</td><td>45</td><td>118</td><td>128</td><td>124</td><td>104</td></tr><tr><td>Net income</td><td>2,403</td><td>914</td><td>1,491</td><td>2,599</td><td>1,358</td></tr><tr><td>Less: Net income (loss) attributable to noncontrolling interests</td><td>-44</td><td>32</td><td>24</td><td>4</td><td>33</td></tr><tr><td>Preferred stock dividends (e)</td><td>388</td><td>21</td><td></td><td>1</td><td>1</td></tr><tr><td>Preferred stock discount accretion</td><td>56</td><td></td><td></td><td></td><td></td></tr><tr><td>Net income attributable to common shareholders</td><td>$2,003</td><td>$861</td><td>$1,467</td><td>$2,594</td><td>$1,324</td></tr><tr><td> PERCOMMONSHARE</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Basic earnings</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$4.30</td><td>$2.15</td><td>$4.02</td><td>$8.39</td><td>$4.24</td></tr><tr><td>Discontinued operations (d)</td><td>.10</td><td>.34</td><td>.38</td><td>.42</td><td>.36</td></tr><tr><td>Net income</td><td>$4.40</td><td>$2.49</td><td>$4.40</td><td>$8.81</td><td>$4.60</td></tr><tr><td>Diluted earnings</td><td></td><td></td><td></td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$4.26</td><td>$2.10</td><td>$3.94</td><td>$8.29</td><td>$4.17</td></tr><tr><td>Discontinued operations (d)</td><td>.10</td><td>.34</td><td>.38</td><td>.42</td><td>.36</td></tr><tr><td>Net income</td><td>$4.36</td><td>$2.44</td><td>$4.32</td><td>$8.71</td><td>$4.53</td></tr><tr><td>Book value</td><td>$47.68</td><td>$39.44</td><td>$43.60</td><td>$36.80</td><td>$29.21</td></tr><tr><td>Cash dividends declared</td><td>$.96</td><td>$2.61</td><td>$2.44</td><td>$2.15</td><td>$2.00</td></tr></table>
<table><tr><td></td><td colspan="2">Year ended December 31</td></tr><tr><td></td><td>2009</td><td>2008</td></tr><tr><td>Net income, in millions</td><td>$2,403</td><td>$914</td></tr><tr><td>Diluted earnings per common share</td><td></td><td></td></tr><tr><td>Continuing operations</td><td>$4.26</td><td>$2.10</td></tr><tr><td>Discontinued operations</td><td>.10</td><td>.34</td></tr><tr><td>Net income</td><td>$4.36</td><td>$2.44</td></tr><tr><td>Return on</td><td></td><td></td></tr><tr><td>Average common shareholders’ equity</td><td>9.78%</td><td>6.52%</td></tr><tr><td>Average assets</td><td>.87%</td><td>.64%</td></tr></table>
<table><tr><td>Change in Assumption(a)</td><td>EstimatedIncrease to 2010PensionExpense(Inmillions)</td></tr><tr><td>.5% decrease in discount rate</td><td>$10</td></tr><tr><td>.5% decrease in expected long-term return on assets</td><td>$18</td></tr><tr><td>.5% increase in compensation rate</td><td>$3</td></tr></table>

Question: Does Interest income keeps increasing each year between 2008 and 2009?