PNC Bank 2008 Annual Report Download - page 125

N OTE 12 D EPOSITS
The aggregate amount of time deposits with a denomination of
$100,000 or more was $26.8 billion at December 31, 2008 and
$14.8 billion at December 31, 2007.
Total time deposits of $75.9 billion at December 31, 2008
have contractual maturities for the years 2009 through 2014
and thereafter as follows:
• 2009: $44.9 billion,
• 2010: $12.8 billion,
• 2011: $4.9 billion,
• 2012: $7.7 billion,
• 2013: $1.3 billion, and
• 2014 and thereafter: $4.3 billion.
N OTE 13 B ORROWED F UNDS
Bank notes at December 31, 2008 totaling $1.0 billion have
interest rates ranging from 2.75% to 5.70% with
approximately $500 million maturing in 2009. Senior and
subordinated notes consisted of the following:
December 31, 2008
Dollars in millions Outstanding Stated Rate Maturity
Senior $12,622 .23 – 5.50% 2009 – 2047
Subordinated
Junior 2,898 2.77 – 10.18% 2028 – 2068
All other 8,310 2.35 – 9.65% 2009 – 2019
Total subordinated 11,208
Total senior and
subordinated $23,830
Included in outstandings for the senior and subordinated notes
in the table above are basis adjustment increases of $81
million and $551 million, respectively, related to fair value
accounting hedges as of December 31, 2008.
In December 2008, we issued the following senior notes
totaling $2.9 billion under the FDIC’s Temporary Liquidity
Guarantee Program-Debt Guarantee Program:
• $2 billion of fixed rate senior notes due June 2012.
These notes pay interest semiannually at a fixed rate
of 2.3%.
• $500 million of fixed rate senior notes due June
2011. These notes pay interest semiannually at a
fixed rate of 1.875%.
• $400 million of floating rate senior notes due June
2011. Interest will be reset quarterly to 3-month
LIBOR plus 28 basis points and interest will be paid
quarterly.
Each of these series of senior notes is guaranteed by the FDIC
and is backed by the full faith and credit of the United States
of America through June 30, 2012.
Total borrowed funds of $52.2 billion at December 31, 2008
have scheduled or anticipated repayments for the years 2009
through 2014 and thereafter as follows:
• 2009: $18.6 billion,
• 2010: $9.4 billion,
• 2011: $5.2 billion,
• 2012: $4.8 billion,
• 2013: $4.0 billion, and
• 2014 and thereafter: $10.2 billion.
Included in borrowed funds are FHLB borrowings of $18.1
billion at December 31, 2008, $9.0 billion of which are
collateralized by a blanket lien on residential mortgage and
other real estate-related loans and mortgage-backed and
treasury securities and $224 million are collateralized by
pledged mortgage-backed and treasury securities. The
remaining $8.9 billion, assumed in the National City
acquisition, are collateralized by a blanket lien on residential
mortgage and home equity loans and mortgage-backed
securities. FHLB advances of $5.1 billion have scheduled
maturities of less than one year. The remainder of the FHLB
borrowings have balances that will mature from 2010 – 2030,
with interest rates ranging from 0% – 7.33%.
As part of the National City acquisition, PNC assumed
liability for the conversion of $1.4 billion of convertible senior
notes. Interest on these notes is payable semiannually at a
fixed rate of 4.0%. The maturity date of these notes is
February 1, 2011. PNC may not redeem these notes prior to
their maturity date. Holders may convert the notes, at their
option, prior to November 15, 2010 under certain
circumstances, including (i) if the trading price of the notes is
less than a defined threshold measured against the market
value of PNC common stock, (ii) any time after March 31,
2008, if the market price of PNC common stock exceeds
130% of the conversion price of the notes in effect on the last
trading day of the immediately preceding calendar quarter, or
(iii) upon the occurrence of certain specific events. After
November 15, 2010, the holders may convert their notes at
any time through the third scheduled trading date preceding
the maturity date. The initial conversion rate equals 2.0725
shares per $1,000 face value of notes. The conversion rate will
be subject to adjustment for stock splits, stock dividends, cash
dividends in excess of certain thresholds, stock repurchases
where the price exceeds market values, and certain other
events. Upon conversion, PNC will pay cash equal to the
principal balance of the notes and may issue shares of its
common stock for any conversion value, determined over a
40 day observation period, that exceeds the principal balance
of the notes being converted. The maximum number of net
common shares that PNC may be required to issue is
3.6 million shares, subject to potential adjustment in the case
of certain events, make-whole fundamental changes, or early
termination.
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