PNC Bank 2010 Annual Report Download - page 176
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Please find page 176 of the 2010 PNC Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.our Series M shares and (ii) our 6,000,000 of Depositary
Shares (each representing 1/4000th of an interest in a share of
our 9.875% Fixed-to-Floating Rate Non-Cumulative Preferred
Stock, Series L), whereby we agreed not to cause the
redemption or repurchase of the applicable securities, unless
such repurchases or redemptions are made from the proceeds
of the issuance of certain qualified securities and pursuant to
the other terms and conditions set forth in the replacement
capital covenants.
As a result of a successful consent solicitation of the holders
of our 6.875% Subordinated Notes due May 15, 2019, we
terminated these replacement capital covenants on
November 5, 2010.
In May 2008, we issued $500 million of Depositary Shares,
each representing a fractional interest in a share of PNC
Fixed-to-Floating Non-Cumulative Perpetual Preferred Stock,
Series K. Dividends are payable if and when declared each
May 21 and November 21 until May 21, 2013. After that date,
dividends will be payable each 21st of August, November,
February and May. Dividends will be paid at a rate of 8.25%
prior to May 21, 2013 and at a rate of three-month LIBOR
plus 422 basis points beginning May 21, 2013.
Series A through D Preferred Stocks are cumulative and,
except for Series B, are redeemable at our option. Annual
dividends on Series A, B and D preferred stock total $1.80 per
share and on Series C preferred stock total $1.60 per share.
Holders of Series A through D preferred stock are entitled to a
number of votes equal to the number of full shares of common
stock into which such preferred stock is convertible. Series A
through D preferred stock have the following conversion
privileges: (i) one share of Series A or Series B is convertible
into eight shares of PNC common stock; and (ii) 2.4 shares of
Series C or Series D are convertible into four shares of PNC
common stock.
During 2010, PNC called its Series A, C and D cumulative
convertible preferred stock for redemption in accordance with
the terms of that stock. Effective September 10, 2010, PNC
redeemed 1,777 outstanding shares of Series A at a
redemption price of $40.00 per share. Effective October 1,
2010, PNC redeemed 18,118 outstanding shares of Series C
and 26,010 shares of Series D at a redemption price of $20.00
per share.
As described in Note 13 Capital Securities of Subsidiary
Trusts and Perpetual Trust Securities, under the terms of two
of the hybrid capital vehicles we issued that currently qualify
as capital for regulatory purposes (the Trust II Securities and
the Trust III Securities), these Trust Securities are
automatically exchangeable into shares of PNC preferred
stock (Series I and Series J, respectively) in each case under
certain conditions relating to the capitalization or the financial
condition of PNC Bank, N.A. and upon the direction of the
Office of the Comptroller of the Currency.
TARP W
ARRANT
A warrant issued to the US Treasury in connection with the
Series N Preferred Stock described above would have enabled
the US Treasury to purchase up to approximately 16.9 million
shares of PNC common stock at an exercise price of $67.33
per share. After exchanging its TARP Warrant for 16,885,192
warrants, each to purchase one share of PNC common stock,
the US Treasury sold the warrants in a secondary public
offering. The sale closed on May 5, 2010. These warrants
expire December 31, 2018.
N
ATIONAL
C
ITY
W
ARRANTS
As part of the National City transaction, warrants issued by
National City converted into warrants to purchase PNC
common stock. The holder has the option to exercise 28,022
warrants, on a daily basis, commencing June 15, 2011 and
ending on July 15, 2011, and 28,023 warrants, on a daily
basis, commencing July 18, 2011 and ending on October 20,
2011. The strike price of these warrants is $750 per share.
Upon exercise, PNC will deliver common shares with a
market value equal to the number of warrants exercised
multiplied by the excess of the market price of PNC common
stock over the strike price. The maximum number of shares
that could be required to be issued is approximately
5.0 million, subject to adjustment in the case of certain events,
make-whole fundamental changes or early termination. PNC
has reserved 5.0 million shares for issuance pursuant to the
warrants and 3.6 million shares for issuance pursuant to the
related convertible senior notes.
O
THER
S
HAREHOLDERS
’E
QUITY
M
ATTERS
We have a dividend reinvestment and stock purchase plan.
Holders of preferred stock and PNC common stock may
participate in the plan, which provides that additional shares
of common stock may be purchased at market value with
reinvested dividends and voluntary cash payments. Common
shares issued pursuant to this plan were: 149,088 shares in
2010, 534,515 shares in 2009 and 716,819 shares in 2008.
At December 31, 2010, we had reserved approximately
126.1 million common shares to be issued in connection with
certain stock plans and the conversion of certain debt and
equity securities.
Effective October 4, 2007, our Board of Directors approved a
stock repurchase program to purchase up to 25 million shares
of PNC common stock on the open market or in privately
negotiated transactions. This program will remain in effect
until fully utilized or until modified, superseded or terminated.
We did not repurchase any shares during 2010, 2009 or 2008
under this program.
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