PNC Bank 2009 Annual Report Download - page 6

TABLE OF CONTENTS
PART I Page
Item 1 Business. 2
Item 1A Risk Factors. 10
Item 1B Unresolved Staff Comments. 16
Item 2 Properties. 16
Item 3 Legal Proceedings. 17
Item 4 Reserved 17
Executive Officers of the Registrant
Directors of the Registrant
17
17
PART II
Item 5 Market for Registrant’s Common Equity,
Related Stockholder Matters and Issuer
Purchases of Equity Securities. 18
Common Stock Performance Graph 19
Item 6 Selected Financial Data. 20
Item 7 Management’s Discussion and Analysis of
Financial Condition and Results of
Operations 22
Item 7A Quantitative and Qualitative Disclosures
About Market Risk. 86
Item 8 Financial Statements and Supplementary
Data. 87
Item 9 Changes in and Disagreements With
Accountants on Accounting and
Financial Disclosure. 175
Item 9A Controls and Procedures. 175
Item 9B Other Information. 176
PART III
Item 10 Directors, Executive Officers and
Corporate Governance. 176
Item 11 Executive Compensation. 176
Item 12 Security Ownership of Certain Beneficial
Owners and Management and Related
Stockholder Matters. 176
Item 13 Certain Relationships and Related
Transactions, and Director
Independence. 178
Item 14 Principal Accounting Fees and Services. 178
PART IV
Item 15 Exhibits, Financial Statement Schedules. 178
SIGNATURES 179
EXHIBIT INDEX E-1
PART I
Forward-Looking Statements: From time to time, The PNC
Financial Services Group, Inc. (PNC or the Corporation) has
made and may continue to make written or oral forward-
looking statements regarding our outlook or expectations for
earnings, revenues, expenses, capital levels, liquidity 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 performance.
This Annual Report on Form 10-K (the Report or Form 10-K)
also includes forward-looking statements. With respect to all
such forward-looking statements, you should review our Risk
Factors discussion in Item 1A and our Risk Management,
Critical Accounting Policies and Judgments, and Cautionary
Statement Regarding Forward-Looking Information sections
included in Item 7 of this Report.
ITEM 1– BUSINESS
BUSINESS OVERVIEW Headquartered in Pittsburgh,
Pennsylvania, we are one of the largest diversified financial
services companies in the United States. We have businesses
engaged in retail banking, corporate and institutional banking,
asset management, residential mortgage banking and global
investment servicing, providing many of our products and
services nationally and others in our primary geographic
markets located in Pennsylvania, Ohio, New Jersey, Michigan,
Maryland, Illinois, Indiana, Kentucky, Florida, Missouri,
Virginia, Delaware, Washington, D.C., and Wisconsin. We
also provide certain investment servicing internationally. At
December 31, 2009, our consolidated total assets, deposits and
shareholders’ equity were $269.9 billion, $186.9 billion and
$29.9 billion, respectively.
As described further below and elsewhere in this Report, on
December 31, 2008, PNC acquired National City Corporation
(National City). Our consolidated financial statements for
2009 reflect the impact of National City.
We were incorporated under the laws of the Commonwealth
of Pennsylvania in 1983 with the consolidation of Pittsburgh
National Corporation and Provident National Corporation.
Since 1983, we have diversified our geographical presence,
business mix and product capabilities through internal growth,
strategic bank and non-bank acquisitions and equity
investments, and the formation of various non-banking
subsidiaries.
A CQUISITION O F N ATIONAL C ITY C ORPORATION
On December 31, 2008, we acquired National City for
approximately $6.1 billion. The total consideration included
approximately $5.6 billion of PNC common stock, $150
million of preferred stock, and cash of $379 million paid to
warrant holders by National City.
Following the closing, PNC received $7.6 billion from the US
Department of the Treasury (US Treasury) under the
Emergency Economic Stabilization Act of 2008 (EESA) in
exchange for the issuance of preferred stock and a warrant.
These proceeds were used to enhance National City Bank’s
regulatory capital position to well-capitalized in order to
continue serving the credit and deposit needs of existing and
new customers. On a consolidated basis, these proceeds
resulted in further improvement to our capital and liquidity
positions. See Repurchase of Outstanding TARP Preferred
Stock below for additional information.
National City, based in Cleveland, Ohio, was one of the
nation’s largest financial services companies. In connection
with obtaining regulatory approvals for the acquisition, PNC
agreed to divest 61 of National City Bank’s branches in
Western Pennsylvania. This divestiture, which included $4.1
billion of deposits and $.8 billion of loans, was completed
during the third quarter of 2009.
2