We will also provide details of reconciliation to GAAP to various non-GAAP financial measures we may discuss. These details may be found on today's conference call, press release and our financial supplement, in our presentation slides and appendix and in various other SEC reports and other documents. These are all available on our corporate website at pnc.com in the Investor Relations section. And now, I'd like to turn the call over to Jim Rohr.James Rohr Thank you, Bill. Good morning, everyone, and thank you for joining us. In our presentation today, I will focus on PNC's strategic accomplishments for 2010, and full-year highlights for our businesses. Rick will provide more detail on our fourth quarter and full-year financial results, and I will close with some of our expectations for 2011. Overall, PNC delivered exceptional performance in 2010 in a very challenging environment. Financially, we earned $3.4 billion in net income last year, a record for our company. In the fourth quarter, we earned $820 million or $1.50 per diluted common share. When adjusted for integration costs, our earnings were $871 million or $1.60 per diluted common share. Operationally, we transitioned to a higher quality balance sheet with excellent liquidity, our credit quality has improved, and we strengthened our capital positions. In fact, our Tier 1 common capital ratio was at a record level as of December 31, 2010. Importantly, we completed the conversion of National City customers and branches and have already demonstrated success in implementing our sales and service model throughout the expanded franchise. Our employee engagement score is also, even with the new employees for 2010, were up across the company. And we exceeded our original acquisition-related cost savings goal and ended the year with over $1.8 billion in annualized savings. Both financially and strategically, we executed our business plan effectively through the year and are well-positioned to compete successfully in 2011.
Turning to our businesses, they performed well in 2010. Most importantly, we increased the number of clients we serve, and we have the proven ability to grow in both high potential and mature markets. And we have the scale to compete successfully in a consolidating industry with leading positions in our major businesses and products.Retail Banking, for example, reported higher profits in 2010, compared to the previous year, solid results given the regulatory changes and a low interest rate environment. We grew checking relationships by 75,000 in 2010, an impressive gain considering the first half of the year was dominated by the customer-conversion process. In the fourth quarter, our net new checking relationships increased by 27,000, a good result compared to the same period of previous years, reflecting our ability to increase customers throughout our expanded franchise. Now in addition to adding clients through our branch network, we recognize some customers are best reached where they work or go to school. Together, our Workplace and University Banking channels produced 38% of our full-year customer acquisition. After customer conversions were complete, client acquisitions through these channels in the second half of the year grew by 20% compared to the same period of 2009. University Banking had an excellent year and increased the agreements with schools by more than 75% in 2010. And our goal, on the consumer side, is to deepen these relationships, and we saw active online bill payment customers grow by 25% in 2010. Now in response to the new Consumer Banking environment, we will be launching a new integrated payment model in the second quarter that connects credit, debit and rewards and leverages the strength of our Virtual Wallet offering. Based on extensive research, PNC's strategy is designed to give customers choices and option based on their needs.
Rather than optimizing fee revenue, our approach is focused on growing market share and share of wallet. We believe this approach will provide us the greater flexibility as the regulatory situation unfolds, and it recognizes that interest rates will eventually rise and deposits will become more valuable.Our Corporate & Institutional Bank had record earnings for the year. We grew average deposits by 17%, and credit and non-interest expenses were well-managed. We had record client growth as customers grew at twice the pace of any previous year. With more of our clients on one platform, we saw increased sales of Treasury Management and Capital Markets products throughout the franchise, but especially the customers in PNC's Western markets. In this important fee areas, both Treasury Management and Capital Markets delivered record revenue for the year. Treasury Management revenue increased by 8% in 2010, compared to the previous year and that compares favorably to industry growth, which was projected to be in the range of 1% to 2% annually for the year. Read the rest of this transcript for free on seekingalpha.com