PNC Bank 2010 Annual Report Download - page 35
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Please find page 35 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.While the two consent orders have not been finalized, PNC
expects the orders to cover a range of matters. Among other
things, we expect the orders to require PNC and/or PNC Bank
to develop and implement written plans and programs and
undertake other remedial actions with respect to various
matters relating to loan servicing, loss mitigation and other
foreclosure activities and operations, including, among other
things, enterprise risk management, risk assessment and
management, compliance, internal audit, outsourcing of
foreclosure and related functions, management information
systems, borrower communications, potential related financial
injuries, and activities with respect to the Mortgage Electronic
Registration System (a widely used electronic registry
designed to track mortgage servicing rights and ownership of
U.S. residential mortgage loans). We also expect that the
orders will require PNC, PNC Bank and their boards to take
appropriate steps to ensure compliance with the orders and
with the plans and programs to be established under the
orders.
For additional information, please see Risk Factors in Item 1A
of this Report and Note 22 Legal Proceedings and Note 23
Commitments and Guarantees in the Notes To Consolidated
Financial Statements in Item 8 of this Report.
PNC’
S
P
ARTICIPATION IN
S
ELECT
G
OVERNMENT
P
ROGRAMS
TARP Capital Purchase Program
We redeemed the Series N (TARP) Preferred Stock on
February 10, 2010. In connection with the redemption, we
accelerated the accretion of the remaining issuance discount
on the Series N Preferred Stock and recorded a corresponding
reduction in retained earnings of $250 million in the first
quarter of 2010. This resulted in a one-time, noncash
reduction in net income attributable to common shareholders
and related basic and diluted earnings per share. See
Repurchase of Outstanding TARP Preferred Stock and Sale by
US Treasury of TARP Warrant in Note 18 Equity in the Notes
To Consolidated Financial Statements in Item 8 of this Report
for additional information.
FDIC Temporary Liquidity Guarantee Program
The FDIC’s TLGP is designed to strengthen confidence and
encourage liquidity in the banking system by:
• Guaranteeing newly issued senior unsecured debt of
eligible institutions, including FDIC-insured banks
and thrifts, as well as certain holding companies
(TLGP-Debt Guarantee Program), and
• Providing full deposit insurance coverage for
non-interest bearing transaction accounts in FDIC-
insured institutions, regardless of the dollar amount
(TLGP-Transaction Account Guarantee Program).
PNC did not issue any securities under the TLGP-Debt
Guarantee Program during 2010.
In December 2008, PNC Funding Corp issued fixed and
floating rate senior notes totaling $2.9 billion under the
FDIC’s TLGP-Debt Guarantee Program. In March 2009, PNC
Funding Corp issued floating rate senior notes totaling $1.0
billion under this program. Each of these series of senior notes
is guaranteed through maturity by the FDIC.
From October 14, 2008 through December 31, 2009, PNC
Bank, National Association (PNC Bank, N.A.) participated in
the TLGP-Transaction Account Guarantee Program. Under
this program, all non-interest bearing transaction accounts
were fully guaranteed by the FDIC for the entire amount in the
account. Coverage under this program is in addition to, and
separate from, the coverage available under the FDIC’s
general deposit insurance rules.
Beginning January 1, 2010, PNC Bank, N.A. ceased
participating in this program. Dodd-Frank, however, extended
the program for all banks for two years, beginning
December 31, 2010. Therefore, PNC Bank, N.A. is again
participating in the program, through December 31, 2012.
Home Affordable Modification Program (HAMP)
As part of its effort to stabilize the US housing market, in
March 2009 the Obama Administration published detailed
guidelines implementing HAMP, and authorized servicers to
begin loan modifications. PNC began participating in HAMP
through its then subsidiary National City Bank in May 2009
and directly through PNC Bank, N.A. in July 2009, and
entered into an agreement on October 1, 2010 to participate in
the Second Lien Program. HAMP is scheduled to terminate as
of December 31, 2012.
Home Affordable Refinance Program (HARP)
Another part of its efforts to stabilize the US housing market
is the Obama Administration’s Home Affordable Refinance
Program (HARP), which provided a means for certain
borrowers to refinance their mortgage loans. PNC began
participating in HARP in May 2009. The program terminates
as of June 10, 2011.
K
EY
F
ACTORS
A
FFECTING
F
INANCIAL
P
ERFORMANCE
Our financial performance is substantially affected by several
external factors outside of our control including the following:
• General economic conditions, including the speed
and stamina of the moderate economic recovery in
general and on our customers in particular,
• The level of, and direction, timing and magnitude of
movement in, interest rates and the shape of the
interest rate yield curve,
• The functioning and other performance of, and
availability of liquidity in, the capital and other
financial markets,
• Loan demand, utilization of credit commitments and
standby letters of credit, and asset quality,
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