PNC Bank 2008 Annual Report Download - page 83

This material is referenced for informational purposes
only and should not be deemed to constitute a part of this
report.
In addition, our recent acquisition of National City
Corporation (“National City”) presents us with a number of
risks and uncertainties related both to the acquisition
transaction itself and to the integration of the acquired
businesses into PNC. These risks and uncertainties include the
following:
• The transaction may be substantially more expensive to
complete (including the required divestitures and the
integration of National City’s businesses) and the
anticipated benefits, including anticipated cost savings
and strategic gains, may be significantly harder or take
longer to achieve than expected or may not be achieved
in their entirety as a result of unexpected factors or
events.
• Our ability to achieve anticipated results from this
transaction is dependent on the state going forward of the
economic and financial markets, which have been under
significant stress recently. Specifically, we may incur
more credit losses from National City’s loan portfolio
than expected. Other issues related to achieving
anticipated financial results include the possibility that
deposit attrition or attrition in key client, partner and
other relationships may be greater than expected.
• Litigation and governmental investigations currently
pending against National City, as well as others that may
be filed or commenced relating to National City’s
business and activities before the acquisition could
adversely impact our financial results.
• Our ability to achieve anticipated results is also
dependent on our ability to bring National City’s
systems, operating models, and controls into conformity
with ours and to do so on our planned time schedule. The
integration of National City’s business and operations
into PNC, which will include conversion of National
City’s different systems and procedures, may take longer
than anticipated or be more costly than anticipated or
have unanticipated adverse results relating to National
City’s or PNC’s existing businesses. PNC’s ability to
integrate National City successfully may be adversely
affected by the fact that this transaction will result in
PNC entering several markets where PNC did not
previously have any meaningful retail presence.
In addition to the National City transaction, we grow our
business from time to time by acquiring other financial
services companies. Acquisitions in general present us with
risks, in addition to those presented by the nature of the
business acquired, similar to some or all of those described
above relating to the National City acquisition.
ITEM 7A – QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
This information is set forth in the Risk Management section
of Item 7 of this Report.
ITEM 8– FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
Included below is the report of our current independent
registered public accounting firm. The report of our previous
independent registered public accounting firm is included
under Item 15 of this Report.
R EPORT O F I NDEPENDENT R EGISTERED P UBLIC
A CCOUNTING F IRM
To the Board of Directors and Shareholders of The PNC
Financial Services Group, Inc.
In our opinion, the accompanying consolidated balance sheets
and the related consolidated statements of income,
shareholders’ equity, and cash flows present fairly, in all
material respects, the financial position of The PNC Financial
Services Group, Inc. and its subsidiaries (the “Company”) at
December 31, 2008 and 2007, and the results of their
operations and their cash flows for the years then ended in
conformity with accounting principles generally accepted in
the United States of America. Also in our opinion, the
Company maintained, in all material respects, effective
internal control over financial reporting as of December 31,
2008, based on criteria established in Internal Control –
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The
Company’s management is responsible for these financial
statements, for maintaining effective internal control over
financial reporting and for its assessment of the effectiveness
of internal control over financial reporting, included in
Management’s Report on Internal Control over Financial
Reporting appearing under Item 9A. Our responsibility is to
express opinions on these financial statements and on the
Company’s internal control over financial reporting based on
our integrated audits. We conducted our audits in accordance
with the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance
about whether the financial statements are free of material
misstatement and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the financial statements included examining, on
a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles
used and significant estimates made by management, and
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