PNC Bank 2010 Annual Report Download - page 180
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Please find page 180 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.capitalized,” regulators require banks to maintain capital ratios
of at least 6% for tier 1 risk-based, 10% for total risk-based
and 5% for leverage. At December 31, 2010 and
December 31, 2009, PNC Bank, N.A. met the “well
capitalized” capital ratio requirements.
The following table sets forth regulatory capital ratios for
PNC and its bank subsidiary, PNC Bank, N.A.
Regulatory Capital
Amount Ratios
December 31
Dollars in millions 2010 2009 2010 2009
Risk-based capital
Tier 1
PNC $26,092 $26,523 12.1% 11.4%
PNC Bank, N.A. 24,722 24,491 11.8 10.9
Total
PNC 33,724 34,813 15.6 15.0
PNC Bank, N.A. 31,662 32,481 15.1 14.4
Leverage
PNC NM NM 10.2 10.1
PNC Bank, N.A. NM NM 10.0 9.3
NM—Not meaningful.
The principal source of parent company cash flow is the
dividends it receives from its subsidiary bank, which may be
impacted by the following:
• Capital needs,
• Laws and regulations,
• Corporate policies,
• Contractual restrictions, and
• Other factors.
Also, there are statutory and regulatory limitations on the
ability of national banks to pay dividends or make other
capital distributions. The amount available for dividend
payments to the parent company by PNC Bank, N.A. without
prior regulatory approval was approximately $1.1 billion at
December 31, 2010.
Under federal law, a bank subsidiary generally may not extend
credit to the parent company or its non-bank subsidiaries on
terms and under circumstances that are not substantially the
same as comparable extensions of credit to nonaffiliates. No
extension of credit may be made to the parent company or a
non-bank subsidiary which is in excess of 10% of the capital
stock and surplus of such bank subsidiary or in excess of 20%
of the capital and surplus of such bank subsidiary as to
aggregate extensions of credit to the parent company and its
non-bank subsidiaries. Such extensions of credit, with limited
exceptions, must be fully collateralized by certain specified
assets. In certain circumstances, federal regulatory authorities
may impose more restrictive limitations.
Federal Reserve Board regulations require depository
institutions to maintain cash reserves with the Federal Reserve
Bank (FRB). At December 31, 2010, the balance outstanding
at the FRB was $983 million.
N
OTE
22 L
EGAL
P
ROCEEDINGS
We establish accruals for legal proceedings when information
related to the loss contingencies represented by those matters
indicates both that a loss is probable and that the amount of
loss can be reasonably estimated. Any such accruals are
adjusted thereafter as appropriate to reflect changed
circumstances. We also determine estimates of possible losses
or ranges of possible losses, whether in excess of any related
accrued liability or where there is no accrued liability, for
those matters disclosed in this Note 22 when we are able to do
so. For disclosed matters where we are able to estimate such
possible losses or ranges of possible losses, we currently
estimate that it is reasonably possible that we could incur
losses in an aggregate amount up to $400 million, with it also
being reasonably possible that we could incur no such losses
at all in these matters. The estimates included in this amount
are based on our analysis of currently available information,
and as new information is obtained we may change our
estimates. Due to the inherent subjectivity of the assessments
and unpredictability of outcomes of legal proceedings, any
amounts accrued or included in this aggregate amount may not
represent the ultimate loss to us from the legal proceedings in
question. Thus, our exposure and ultimate losses may be
higher or lower, and possibly significantly so, than the
amounts accrued or this aggregate amount.
The aggregate estimated amount provided above does not
include an estimate for every matter disclosed in this Note 22,
as we are unable, at this time, to estimate the losses that it is
reasonably possible that we could incur or ranges of such
losses with respect to some of the matters disclosed for one or
more of the following reasons. In our experience, legal
proceedings are inherently unpredictable. In many legal
proceedings, various factors exacerbate this inherent
unpredictability, including, among others, the following: the
proceeding is in its early stages; the damages sought are
unspecified, unsupported or uncertain; it is unclear whether a
case brought as a class action will be allowed to proceed on
that basis or, if permitted to proceed as a class action, how the
class will be defined; the plaintiff is seeking relief other than
compensatory damages; the matter presents meaningful legal
uncertainties, including novel issues of law; discovery has not
started or is not complete; there are significant facts in
dispute; and there are a large number of parties named as
defendants (including where it is uncertain how liability, if
any, will be shared among multiple defendants). Generally,
the less progress that has been made in the proceedings or the
broader the range of potential results, the harder it is for us to
estimate losses or ranges of losses that it is reasonably
possible we could incur. Therefore, as the estimated aggregate
amount disclosed above does not include all of the matters
disclosed below, the amount disclosed above does not
represent our maximum reasonably possible loss exposure for
all of the matters disclosed in this Note 22. The estimated
aggregate amount also does not reflect any of our exposure to
matters not so disclosed, as discussed below under “Other.”
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