NEW YORK ( TheStreet) -- Shares of BlackRock ( BLK) have returned a whopping 42% this year through Tuesday's close of $291.69, and that's a very big deal for PNC Financial Services Group ( PNC). PNC of Pittsburgh "owned approximately 36 million common stock equivalent shares of BlackRock equity" as of March 31, according to the bank's 10-Q filing, with a carrying value of $5.6 billion. PNC "accounts for its investment in BlackRock under the equity method of accounting," according to the filing, "exclusive of a related deferred tax liability of $1.9 billion at both March 31, 2013." The bank's voting interest in BlackRock common shares is about 21%. But the market value of PNC's common stake in BlackRock was $9.2 billion as of March 31, and the value of the BlackRock stake rose to more than $10.5 billion as of Tuesday's close. PNC is leaving a lot of money on the table. Then again, because of the accounting treatment, the BlackRock stake added $138 million in revenue and $108 million in net income to PNC's first-quarter results.
"Obviously the BlackRock state for PNC has been a long-term, very valuable relationship," PNC Chief Financial Officer Rick Johnson said at a conference on Tuesday, according to a transcript provided by Thomson Reuters, adding that "clearly the value of what we hold is worth a lot more and sits on our books today." "At some point we have to clearly recognize that value and do something, and when we do it, I think we would like to do it in the most tax-efficient manner possible," Johnson said. He hinted that it could take some time for a sale to be made, as "there's still a lot of regulation left to be determined, both from a PNC and a BlackRock side to decide how both companies move forward in this environment." PNC's first-quarter net income attributable to common shareholders was $938 million, or $1.76 a share, increasing from $766 million, or $1.44 a share, during the first quarter of 2012. The bank's first-quarter return on average assets (ROA) was 1.34%, improving from 1.16% a year earlier, while its return on average common equity (ROCE) was 10.68%, improving from 9.41% during the first quarter of 2012.