PNC Bank 2011 Annual Report Download - page 109

– Changes in customer preferences and behavior,
whether due to changing business and economic
conditions, legislative and regulatory initiatives, or
other factors.
• Our forward-looking financial statements are subject to
the risk that economic and financial market conditions
will be substantially different than we are currently
expecting. These statements are based on our current
view that the modest economic expansion will persist in
2012 and interest rates will remain very low.
• Legal and regulatory developments could have an impact
on our ability to operate our businesses, financial
condition, results of operations, competitive position,
reputation, or pursuit of attractive acquisition
opportunities. Reputational impacts could affect matters
such as business generation and retention, liquidity,
funding, and ability to attract and retain management.
These developments could include:
– Changes resulting from legislative and regulatory
reforms, including broad-based restructuring of
financial industry regulation and changes to laws and
regulations involving tax, pension, bankruptcy,
consumer protection, and other industry aspects, and
changes in accounting policies and principles. We
will be impacted by extensive reforms provided for in
the Dodd-Frank Wall Street Reform and Consumer
Protection Act and otherwise growing out of the
recent financial crisis, the precise nature, extent and
timing of which, and their impact on us, remains
uncertain.
– Changes to regulations governing bank capital and
liquidity standards, including due to the Dodd-Frank
Act and to Basel III initiatives.
– Unfavorable resolution of legal proceedings or other
claims and regulatory and other governmental
investigations or other inquiries. In addition to
matters relating to PNC’s business and activities,
such matters may include proceedings, claims,
investigations, or inquiries relating to pre-acquisition
business and activities of acquired companies, such
as National City. These matters may result in
monetary judgments or settlements or other remedies,
including fines, penalties, restitution or alterations in
our business practices, and in additional expenses and
collateral costs, and may cause reputational harm to
PNC.
– Results of the regulatory examination and
supervision process, including our failure to satisfy
requirements of agreements with governmental
agencies.
– Impact on business and operating results of any costs
associated with obtaining rights in intellectual
property claimed by others and of adequacy of our
intellectual property protection in general.
• Business and operating results are affected by our ability
to identify and effectively manage risks inherent in our
businesses, including, where appropriate, through
effective use of third-party insurance, derivatives, and
capital management techniques, and to meet evolving
regulatory capital standards. In particular, our results
currently depend on our ability to manage elevated levels
of impaired assets.
• Business and operating results also include impacts
relating to our equity interest in BlackRock, Inc. and rely
to a significant extent on information provided to us by
BlackRock. Risks and uncertainties that could affect
BlackRock are discussed in more detail by BlackRock in
its SEC filings.
• Our planned acquisition of RBC Bank (USA) presents us
with risks and uncertainties related both to the acquisition
transaction itself and its integration into PNC after
closing, including:
– The transaction (including integration of RBC Bank
(USA)’s businesses) may be substantially more
expensive to complete than anticipated. Anticipated
benefits, including 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 also on the extent of credit
losses in the acquired loan portfolios and the extent
of deposit attrition, in part related to the state of
economic and financial markets. Also, litigation and
governmental investigations that may be filed or
commenced, as a result of this transaction or
otherwise, could impact the timing or realization of
anticipated benefits to PNC.
– Integration of RBC Bank (USA)’s business and
operations into PNC, which will include conversion
of RBC Bank (USA)’s different systems and
procedures, may take longer than anticipated or be
more costly than anticipated or have unanticipated
adverse results relating to RBC Bank (USA)’s or
PNC’s existing businesses. PNC’s ability to integrate
RBC Bank (USA) successfully may be adversely
affected by the facts that this transaction will result in
PNC entering several markets where PNC does not
currently have any meaningful retail presence and
that the conversion is taking place simultaneously
with the acquisition.
• In addition to the planned RBC Bank (USA) transaction,
we grow our business in part by acquiring from time to
time other financial services companies, financial services
assets and related deposits and other liabilities. These other
acquisitions often present risks and uncertainties analogous
to those presented by the RBC Bank (USA) transaction.
Acquisition risks include those presented by the nature of
the business acquired as well as risks and uncertainties
related to the acquisition transactions themselves,
regulatory issues, and the integration of the acquired
businesses into PNC after closing.
• Competition can have an impact on customer acquisition,
growth and retention and on credit spreads and product
100 The PNC Financial Services Group, Inc. – Form 10-K