PNC Bank 2003 Annual Report Download - page 33

Cautionary Statement Regarding
Forward-Looking Information
To the Board of Directors
and Shareholders of The
PNC Financial Services
Group, Inc.
We have audited the consolidat-
ed balance sheet of The PNC Financial
Services Group, Inc. and subsidiaries as
of December 31, 2003 and 2002, and
the related consolidated statements of
income, shareholders’ equity, and cash
flows for the years then ended. Such
consolidated financial statements and
our report thereon dated February 18,
2004, expressing an unqualified opinion
and including an explanatory para-
graph relating to the change in 2002 in
the method of accounting for goodwill
and other intangible assets (which are
not included herein), are included in
the Form 10-K for the year ended
December 31, 2003. The accompanying
condensed consolidated financial state-
ments are the responsibility of the
Company’s management. Our responsi-
bility is to express an opinion on such
condensed consolidated financial state-
ments in relation to the complete con-
solidated financial statements.
In our opinion, the information
set forth in the accompanying con-
densed consolidated balance sheet as
of December 31, 2003 and 2002, and
the related condensed consolidated
statement of income for the years then
ended is fairly stated in all material
respects in relation to the basic consol-
idated financial statements from which
it has been derived.
February 18, 2004
This Summary Annual Report contains,
and other statements that we may make may
contain, forward-looking statements with
respect to our outlook or expectations for earn-
ings, revenues, expenses, capital levels, asset
quality or other future financial or business
performance, strategies or expectations, or the
impact of legal, regulatory or supervisory
matters on our business operations or perform-
ance. Forward-looking statements are typically
identified by words or phrases such as “believe,”
“feel,” “expect,” “anticipate,” “intend,”
“outlook,” “estimate,” “forecast,” “project,”
“position,” “target,” “assume,” “achievable,”
“potential,” “strategy,” “goal,” “objective,”
“plan,” “aspiration,” “outcome,” “continue,”
“remain,” “maintain,” “seek,” “strive,” “trend,”
and variations of such words and similar
expressions, or future or conditional verbs
such as “will,” “would,” “should,” “could,”
“might,” “can,” “may” or similar expressions.
We caution that forward-looking state-
ments are subject to numerous assumptions,
risks and uncertainties, which change over
time. Forward-looking statements speak only as
of the date they are made, and we assume
no duty and do not undertake to update for-
ward-looking statements. Actual results or
future events could differ, possibly materially,
from those anticipated in forward-looking
statements and future results could differ
materially from historical performance.
The factors discussed elsewhere in this
Summary Annual Report or disclosed in our
2003 Form 10-K and other SEC reports (accessible
on PNC’s website at www.pnc.com and on
the SEC’s website at www.sec.gov) and the
following factors, among others, could cause
actual results or future events to differ material-
ly from those anticipated in forward-looking
statements or from historical performance:
(1) changes in political, economic or
industry conditions, the interest rate environ-
ment or financial and capital markets (including
as a result of actions of the Federal Reserve
Board affecting interest rates, money supply or
otherwise reflecting changes in monetary poli-
cy), which could affect: (a) credit quality and
the extent of credit losses; (b) the extent of
funding of unfunded loan commitments and
letters of credit; (c) allowances for credit losses
and unfunded loan commitments and letters of
credit; (d) demand for credit or fee-based prod-
ucts and services; (e) net interest income; (f)
value of assets under management and assets
serviced, of private equity investments, of
other debt and equity investments, of loans
held for sale, or of other on-balance sheet and
off-balance sheet assets; or (g) the availability
and terms of funding necessary to meet PNC’s
liquidity needs;
(2) the impact of legal and regulatory
developments (including (a) the resolution of
legal proceedings or regulatory and other gov-
ernmental inquiries; (b) increased litigation risk
from recent regulatory and other governmental
developments; (c) the results of regulatory
examination process, PNC’s failure to satisfy the
requirements of agreements with governmental
agencies, and regulators’ future use of supervi-
sory and enforcement tools; (d) legislative and
regulatory reforms; and (e) changes in account-
ing policies and principles), with the impact of
any such developments possibly affecting the
ability of PNC to operate its businesses, PNC’s
financial condition, results of operations, or
reputation, which in turn could have an impact
on such matters as business generation and
retention, the ability to attract and retain man-
agement, liquidity and funding;
(3) the impact of changes in the nature
or extent of competition;
(4) the introduction, withdrawal, success
and timing of business initiatives and strategies;
(5) customer acceptance of PNC’s prod-
ucts and services and their borrowing, repay-
ment, investment and deposit practices;
(6) the impact of changes in the extent
of customer or counterparty delinquencies,
bankruptcies or defaults that could affect,
among other things, credit and asset quality risk
and the provision for credit losses;
(7) the ability to identify and effectively
manage risks inherent in PNC’s business;
(8) how PNC chooses to redeploy avail-
able capital, including the extent and timing of
any share repurchases and acquisitions or other
investments in PNC businesses;
(9) the impact, extent and timing of tech-
nological changes, the adequacy of intellectual
property protection and costs associated with
obtaining rights in intellectual property claimed
by others;
(10) the timing and pricing of any sales
of loans or other financial assets held for sale;
(11) the ability of PNC to obtain desirable
levels of insurance and whether or not insur-
ance coverage for claims by PNC is denied;
(12) relative and absolute investment
performance of assets under management; and
(13) the extent of terrorist activities and
international hostilities, increases or continua-
tions of which may adversely affect the econo-
my and financial and capital markets generally
or PNC specifically.
In addition, PNC’s forward-looking
statements are also subject to risks and uncer-
tainties related to the United National Bancorp
acquisition and the expected consequences of
the integration of its business into that of PNC,
including the following: (a) the integration of
United National’s business and operations into
PNC, which will include conversion of
UnitedTrust Bank’s different systems and
procedures, may take longer than anticipated
or be more costly than anticipated or have
unanticipated adverse results relating to PNC’s
businesses, including those acquired in the
acquisition; (b) the anticipated cost savings
of the acquisition may take longer than expect-
ed to be realized, may not be achieved, or may
not be achieved in their entirety; and (c) the
anticipated benefits to PNC are dependent in
part on the performance of United National’s
business in the future, and there can be no
assurance as to actual future results, which
could be impacted by various factors, including
the risks and uncertainties generally related
to the performance of PNC’s and United
National’s business (with respect to United
National, see United National’s SEC reports,
also accessible on the SEC’s website) or due to
factors related to the acquisition of United
National and the process of integrating it
into PNC. Any future mergers, acquisitions,
restructurings, divestitures or related transac-
tions will also be subject to similar risks and
uncertainties related to the ability to realize
expected cost savings or revenue enhancements
or to implement integration plans.
Independent
Auditors’ Report
31