PNC Bank 2005 Annual Report Download - page 62

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Tier 1 risk-based capital - Tier 1 risk-based capital equals: total
shareholders' equity, plus trust preferred capital securities, plus
certain minority interests that are held by others; less goodwill
and certain other intangible assets, less equity investments in
nonfinancial companies and less net unrealized holding losses
on available-for-sale equity securities. Net unrealized holding
gains on available-for-sale equity securities, net unrealized
holding gains (losses) on available-for-sale debt securities and
net unrealized holding gains (losses) on cash flow hedge
derivatives are excluded from total shareholders’ equity for tier
1 risk-based capital purposes.
Tier 1 risk-based capital ratio - Tier 1 risk-based capital
divided by period-end risk-weighted assets.
Total fund assets serviced - Total domestic and offshore fund
investment assets for which we provide related processing
services. We do not include these assets on our Consolidated
Balance Sheet.
Total return swap - A non-traditional swap where one party
agrees to pay the other the “total return” of a defined
underlying asset (e.g., loan), usually in return for receiving a
stream of LIBOR based cash flows. The total returns of the
asset, including interest and any default shortfall, are passed
through to the counterparty. The counterparty is therefore
assuming the credit and economic risk of the underlying
asset.
Total risk-based capital - Tier 1 risk-based capital plus
qualifying senior and subordinated debt, other minority interest
not qualified as tier 1, and the allowance for loan and lease
losses, subject to certain limitations.
Total risk-based capital ratio - Total risk-based capital divided
by period-end risk-weighted assets.
Transaction deposits - The sum of money market and interest-
bearing demand deposits and demand and other noninterest-
bearing deposits.
Yield curve (shape of the yield curve, flat yield curve) - A
graph showing the relationship between the yields on financial
instruments or market indices of the same credit quality with
different maturities. For example, a “normal” or “positive”
yield curve exists when long-term bonds have higher yields
than short-term bonds. A “flat” yield curve exists when yields
are the same for short-term and long-term bonds. A “steep”
yield curve exists when yields on long-term bonds are
significantly higher than on short-term bonds.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING
INFORMATION
We make statements in this Report, and we may from time to
time make other statements, regarding our outlook or
expectations for earnings, revenues, expenses and/or other
matters regarding or affecting PNC that are forward-looking
statements within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements are
typically identified by words such as “believe,” “expect,”
“anticipate,” “intend,” “outlook,” “estimate,” “forecast,”
“project” and other similar words and expressions.
Forward-looking statements are subject to numerous
assumptions, risks and uncertainties, which change over time.
Forward-looking statements speak only as of the date they are
made. We do not assume any duty and do not undertake to
update our forward-looking statements. Actual results or future
events could differ, possibly materially, from those that we
anticipated in our forward-looking statements, and future
results could differ materially from our historical performance.
Our forward-looking statements are subject to the following
principal risks and uncertainties. We provide greater detail
regarding these factors elsewhere in this Report, including in
the Risk Factors and Risk Management sections. 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.
• Our business and operating results are affected by
business and economic conditions generally or
specifically in the principal markets in which we do
business. We are affected by changes in our
customers’ financial performance, as well as changes
in customer preferences and behavior, including as a
result of changing economic conditions.
• The value of our assets and liabilities, as well as our
overall financial performance, are affected by changes
in interest rates or in valuations in the debt and equity
markets. Actions by the Federal Reserve and other
government agencies, including those that impact
money supply and market interest rates, can affect our
activities and financial results.
• Competition can have an impact on customer
acquisition, growth and retention, as well as on our
credit spreads and product pricing, which can affect
market share, deposits and revenues.