PNC Bank 2011 Annual Report Download - page 41

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.
Beginning January 1, 2010, PNC Bank, N.A. ceased
participating in the FDIC’s TLGP-Transaction Account
Guarantee Program. Dodd-Frank, however, extended for two
years, beginning December 31, 2010, unlimited deposit
insurance coverage for non-interest bearing transaction
accounts held at all banks. Therefore, eligible accounts at PNC
Bank, N.A. are again eligible for unlimited deposit insurance,
through December 31, 2012. Coverage under this extension is
in addition to, and separate from, the coverage available under
the FDIC’s general deposit insurance rules.
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 was scheduled to terminate
as of December 31, 2012; however, the Administration has
announced that the HAMP program deadline will be extended
to December 31, 2013.
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. In 2011, the Obama
Administration revised the program to increase borrower
eligibility and extended it for another twelve months with a
new termination date of December 31, 2013.
K EY F ACTORS A FFECTING F INANCIAL P ERFORMANCE
Our financial performance is substantially affected by a
number of external factors outside of our control, including
the following:
• General economic conditions, including the
continuity, 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,
• Customer demand for non-loan products and
services,
• Changes in the competitive and regulatory landscape
and in counterparty creditworthiness and
performance as the financial services industry
restructures in the current environment,
• The impact of the extensive reforms enacted in the
Dodd-Frank legislation and other legislative,
regulatory and administrative initiatives, including
those outlined elsewhere in this Report, and
• The impact of market credit spreads on asset
valuations.
In addition, our success will depend, among other things,
upon:
• Further success in the acquisition, growth and
retention of customers,
• Continued development of the geographic markets
related to our recent acquisitions, including full
deployment of our product offerings,
• Closing the pending RBC Bank (USA) acquisition
and integrating its business into PNC after closing,
• Revenue growth and our ability to provide innovative
and valued products to our customers,
• Our ability to utilize technology to develop and
deliver products and services to our customers,
• Our ability to manage and implement strategic
business objectives within the changing regulatory
environment,
• A sustained focus on expense management,
• Managing the non-strategic assets portfolio and
impaired assets,
• Improving our overall asset quality and continuing to
meet evolving regulatory capital standards,
• Continuing to maintain and grow our deposit base as
a low-cost funding source,
• Prudent risk and capital management related to our
efforts to maintain our desired moderate risk profile,
• Actions we take within the capital and other financial
markets, and
• The impact of legal and regulatory contingencies.
For additional information, please see Risk Factors in Item 1A
of this Report and the Cautionary Statement Regarding
Forward-Looking Information section in this Item 7.
S UMMARY F INANCIAL R ESULTS
Year ended December 31 2011 2010
Net income (millions) $3,071 $3,397
Diluted earnings per common share
Continuing operations $ 5.64 $ 5.02
Discontinued operations .72
Net income $ 5.64 $ 5.74
Return from net income on:
Average common shareholders’ equity 9.56% 10.88%
Average assets 1.16% 1.28%
32 The PNC Financial Services Group, Inc. – Form 10-K