PNC Bank 2012 Annual Report Download - page 234

II Securities and the Trust III Securities), these Trust
Securities are automatically exchangeable into shares of PNC
preferred stock (Series I and Series J, respectively) in each
case under certain conditions relating to the capitalization or
the financial condition of PNC Bank, N.A. and upon the
direction of the Office of the Comptroller of the Currency.
The Series preferred stock of PNC REIT Corp. is also
automatically exchangeable under similar conditions into
shares of PNC Series H preferred stock.
As a part of the National City transaction, we established the
PNC Non-Cumulative Perpetual Preferred Stock, Series M
(the Series M Preferred Stock), which mirrored in all material
respects the former National City Non-Cumulative Perpetual
Preferred Stock, Series E. On December 10, 2012, PNC issued
$500.1 million (5,001 shares) of the Series M Preferred Stock
as required under a Stock Purchase Contract Agreement
between PNC and National City Preferred Capital Trust I (the
“Trust”) dated January 30, 2008. PNC immediately redeemed
all $500.1 million of the Series M Preferred Stock from the
Trust and the Trust in turn redeemed all $500.0 million
outstanding of its 12% Fixed-to-Floating Rate Normal APEX
and all $.1 million of its Common Securities.
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 1/4,000th 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.
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.
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.
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: 422,642 shares in
2012, 379,459 shares in 2011 and 149,088 shares in 2010.
At December 31, 2012, we had reserved approximately
108.4 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 21.551 million shares
remained available for repurchase under this program at
December 31, 2012. This program will remain in effect until
fully utilized or until modified, superseded or terminated. We
repurchased 3.2 million shares in 2012 and did not repurchase
any shares during 2011 or 2010 under this program.
The PNC Financial Services Group, Inc. – Form 10-K 215