PNC Bank 2012 Annual Report Download - page 136

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 2012 acquisition of RBC Bank (USA) presents us
with risks and uncertainties related to the integration of
the acquired businesses into PNC, including:
– Anticipated benefits of the transaction, 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
regulatory and other governmental investigations that
may be filed or commenced relating to the
pre-acquisition business and activities of RBC Bank
(USA) could impact the timing or realization of
anticipated benefits to PNC.
– Integration of RBC Bank (USA)’s business and
operations into PNC may take longer than anticipated
or be substantially 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 fact that this
transaction results in PNC entering several
geographic markets where PNC did not previously
have any meaningful retail presence.
• In addition to the 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
pricing, which can affect market share, deposits and
revenues. Industry restructuring in the current
environment could also impact our business and financial
performance through changes in counterparty
creditworthiness and performance and in the competitive
and regulatory landscape. Our ability to anticipate and
respond to technological changes can also impact our
ability to respond to customer needs and meet competitive
demands.
• Business and operating results can also be affected by
widespread natural and other disasters, dislocations,
terrorist activities or international hostilities through
impacts on the economy and financial markets generally
or on us or our counterparties specifically.
We provide greater detail regarding these as well as other
factors elsewhere in this Report, including in the Risk Factors
and Risk Management sections and the Legal Proceedings and
Commitments and Guarantees Notes of the Notes To
Consolidated Financial Statements in this Report. Our
forward-looking statements may also be subject to other risks
and uncertainties, including those discussed elsewhere in this
Report or in our other filings with the SEC.
I TEM 7A – Q UANTITATIVE AND Q UALITATIVE
D ISCLOSURES ABOUT M ARKET R ISK
This information is set forth in the Risk Management section
of Item 7 and in Note 1 Accounting Policies, Note 9 Fair
Value, and Note 17 Financial Derivatives in the Notes To
Consolidated Financial Statements in Item 8 of this Report.
The PNC Financial Services Group, Inc. – Form 10-K 117