PNC Bank 2012 Annual Report Download - page 9

These priorities along with our commitment to executing give us confidence that we can deliver
shareholder value in 2013.
* PNC believes that tangible book value per common share, a non-GAAP measure, is useful as a tool to help to better evaluate growth of
a company’s business apart from the amount, on a per share basis, of intangible assets other than servicing rights included in book value
per common share. PNC’s book value per share was $67.05 at year-end 2012, a 41% increase over $47.68 at year-end 2009. Subtracting
approximately $9.8 billion ($10.9 billion of goodwill and other intangible assets less $1.1 billion of servicing rights) or $18.54 per share
for year-end 2012, and subtracting approximately $10.7 billion ($12.9 billion of goodwill and other intangible assets less $2.2 billion of
servicing rights) or $23.09 per share for year-end 2009, results in tangible book value per share of approximately $48.51 for year-end 2012,
a 97% increase over approximately $24.59 at year-end 2009.
PNC’s 2012 peer group consists of BB&T Corporation, Bank of America Corporation, Capital One Financial Corporation, Comerica
Incorporated, Fifth Third Bancorp, JPMorgan Chase & Co., KeyCorp, M&T Bank Corporation, The PNC Financial Services Group, Inc.,
Regions Financial Corporation, SunTrust Banks, Inc., U.S. Bancorp, and Wells Fargo & Company.
MANAGE RISK, EXPENSES AND CAPITAL.
Managing credit risk remains a priority for us.
Our nonperforming assets declined from year
end 2011, and our provision for credit losses
and net charge-offs improved in 2012. Overall,
we remain committed to a moderate risk
philosophy.
At PNC, expense management is a part of
our culture, and we have a track record of
executing on our objectives. For 2013 we
increased our continuous improvement
target to $700 million, with the overall goal of
achieving full-year positive operating leverage
on a reported basis and producing stronger
results in 2013.
Our Tier 1 common capital ratio was 9.6
percent as of December 31, 2012, and our
estimated Basel III Tier 1 common capital
ratio on a pro forma basis as of that date was
7.5 percent. Of course that is based on our
current understanding of Basel rules and other
estimates. It remains our goal to be within the
range of 8.0 to 8.5 percent by year-end 2013
without benefit of phase-ins, and we believe
we can get there primarily based on increased
retained earnings in 2013.
Since the financial crisis began in 2008, we
have made strategic decisions to use capital
to grow our franchise for the long term. Over
time, we believe the opportunities associated
with these acquisitions should provide our
shareholders with strong returns.
Our earnings and capital strength supported
our decision to increase the common stock
dividend in the first quarter of 2012 for the
second time in as many years. Our dividend
yield as of December 31, 2012, was 2.76
percent, which we believe makes PNC stock
very attractive in the current low interest rate
environment.
An important
measure of any
stock is its tangible
book value per
share. We almost
doubled our
tangible book value
per share from
the end of 2009 to
year-end 2012, the
highest increase in
our peer group.*
2009 2012
$24.59
$48.51
TANGIBLE
BOOK VALUE
PER SHARE
At Year End
+97%