PNC Bank 2011 Annual Report Download - page 194

pledged the $500,100,000 principal amount of National City
8.729% Junior Subordinated Notes due 2043 held by the Trust
and their proceeds to secure this purchase obligation.
If Series M shares are issued prior to December 10, 2012, any
dividends on such shares will be calculated at a rate per
annum equal to 12.000% until December 10, 2012, and
thereafter, at a rate per annum that will be reset quarterly and
will equal three-month LIBOR for the related dividend period
plus 8.610%. Dividends will be payable if and when declared
by the Board at the dividend rate so indicated applied to the
liquidation preference per share of the Series M Preferred
Stock. The Series M is redeemable at PNC’s option, subject to
Federal Reserve approval, if then applicable, on or after
December 10, 2012 at a redemption price per share equal to
the liquidation preference plus any declared but unpaid
dividends.
The replacement capital covenants with respect to the Normal
APEX Securities, our Series M shares and 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) were terminated
on November 5, 2010 as a result of a successful consent
solicitation.
After receiving all required approvals, on February 10, 2010,
we redeemed all 75,792 shares of our Fixed Rate Cumulative
Perpetual Preferred Stock, Series N that had been issued on
December 31, 2008 to the US Treasury under the US
Treasury’s Troubled Asset Relief Program (TARP) Capital
Purchase Program.
In connection with the redemption of the Series N Preferred
Stock, we accelerated the accretion of the remaining issuance
discount on the Series N Preferred Stock, recorded a
corresponding reduction in retained earnings of $250 million
during the first quarter of 2010 and paid dividends of $89
million to the US Treasury. This resulted in a noncash
reduction in net income attributable to common shareholders
and related basic and diluted earnings per share.
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.
W ARRANTS
We have outstanding 16,885,192 warrants, each to purchase
one share of PNC common stock at an exercise price of
$67.33 per share. These warrants were sold by the US
Treasury in a secondary public offering that closed on May 5,
2010 after the US Treasury exchanged its TARP Warrant
(issued on December 31, 2008 under the TARP Capital
Purchase Program in relation to the Series N preferred stock
referred to above) for 16,885,192 warrants. These warrants
expire December 31, 2018.
F ORMER N ATIONAL C ITY W ARRANTS
28,022 warrants issued by National City that converted into
warrants to purchase PNC common stock expired over the
period June 15, 2011 through July 15, 2011, and 28,023 of
such warrants expired over the period July 18, 2011 through
October 20, 2011. The strike price of these warrants was $750
per share. PNC reserved 5.0 million shares for issuance
pursuant to the warrants and has cancelled this reserve in
February 2012.
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: 379,459 shares in
2011, 149,088 shares in 2010 and 534,515 shares in 2009.
At December 31, 2011, we had reserved approximately
118.3 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. A maximum of 24.710 million shares
remained available for repurchase under this program at
December 31, 2011. This program will remain in effect until
fully utilized or until modified, superseded or terminated. We
did not repurchase any shares during 2011, 2010 or 2009
under this program.
The PNC Financial Services Group, Inc. – Form 10-K 185