PNC Bank 2013 Annual Report Download - page 142

In February 2013, the FASB issued ASU 2013-02,
Comprehensive Income (Topic 220): Reporting of Amounts
Reclassified Out of Accumulated Other Comprehensive
Income. This ASU requires companies to present information
about reclassification adjustments from Accumulated other
comprehensive income in a single note or on the face of the
financial statements. Additionally, companies are to disclose
by component reclassifications out of Accumulated other
comprehensive income and their effects on the respective line
items on net income and other disclosures currently required
under U.S. GAAP. ASU 2013-02 was effective for annual and
interim reporting periods beginning after December 15, 2012.
These required disclosures are included in Note 20 Other
Comprehensive Income.
In December 2011, the FASB issued ASU 2011-11, Balance
Sheet (Topic 210): Disclosures about Offsetting Assets and
Liabilities and then amended the scope of ASU 2011-11 in
January 2013 through the issuance of ASU 2013-01, Balance
Sheet (Topic 210): Clarifying the Scope of Disclosures about
Offsetting Assets and Liabilities. This ASU applies to all
entities that have derivative instruments, repurchase
agreements and reverse repurchase agreements, or securities
lending agreements that are (i) offset in accordance with ASC
210-20-45 or ASC 815-10-45 or (ii) subject to an enforceable
master netting arrangement or similar agreement, and requires
an entity to disclose information about offsetting to enable
users of its financial statements to understand the effect of
those arrangements on its financial position. The disclosures
were required for quarterly and annual reporting periods
beginning on or after January 1, 2013 and were to be applied
retrospectively for all comparative periods presented. We
adopted these ASUs on January 1, 2013 for our derivatives
that we offset in accordance with ASC 815-10-45 and for our
repurchase/resale arrangements under enforceable master
netting arrangements, which we do not currently offset on our
Consolidated Balance Sheet. These ASUs did not change the
accounting for these arrangements or require them to be offset
and thus had no impact on our results of operation or financial
position. These disclosures are included in Note 17 Financial
Derivatives and Note 24 Commitments and Guarantees.
In December 2011, the FASB issued ASU 2011-10, Property,
Plant, and Equipment (Topic 360): Derecognition of in
Substance Real Estate – a Scope Clarification (a consensus of
the FASB Emerging Issues Task Force). This ASU clarified
that the guidance in ASC 360-20 applies to a parent that
ceases to have a controlling financial interest (as described in
ASC 810-10) in a subsidiary that is in substance real estate as
a result of default on the subsidiary’s nonrecourse debt. ASU
2011-10 should be applied on a prospective basis and was
effective for fiscal years, and interim periods within those
years, beginning on or after June 15, 2012. We adopted ASU
2011-10 on January 1, 2013 and there was no impact to our
results of operations or financial position.
In October 2012, the FASB issued ASU 2012-06, Business
Combinations (Topic 805): Subsequent Accounting for an
Indemnification Asset Recognized at the Acquisition Date as a
Result of a Government-Assisted Acquisition of a Financial
Institution. This ASU impacts all entities that recognize an
indemnification asset in purchase accounting for a
government-assisted acquisition of a financial institution. The
effective date of ASU 2012-06 was January 1, 2013. We
adopted ASU 2012-06 on January 1, 2013 and there was no
impact to our results of operations or financial position.
In July 2012, the FASB issued ASU 2012-02, Intangibles –
Goodwill and Other (Topic 350): Testing Indefinite-Lived
Intangible Assets for Impairment. This ASU applies to
indefinite-lived intangible assets other than goodwill and
simplifies the impairment test of those assets by allowing an
entity to first assess qualitative factors to determine whether it
is more likely than not that the fair value of an indefinite lived
intangible asset is less than its carrying amount before
proceeding to the quantitative impairment test. The effective
date of this ASU was January 1, 2013. However, since we
currently do not have any indefinite lived intangibles other
than goodwill, this ASU did not have an effect on our results
of operations or financial position.
N
OTE 2A CQUISITION AND D IVESTITURE
A CTIVITY
2012 RBC B ANK (USA) A CQUISITION
On March 2, 2012, PNC acquired 100% of the issued and
outstanding common stock of RBC Bank (USA), the U.S.
retail banking subsidiary of Royal Bank of Canada. As part of
the acquisition, PNC also purchased a credit card portfolio
from RBC Bank (Georgia), National Association. PNC paid
$3.6 billion in cash as consideration for the acquisition of both
RBC Bank (USA) and the credit card portfolio. The fair value
of the net assets acquired totaled approximately $2.6 billion,
including $18.1 billion of deposits, $14.5 billion of loans and
$.2 billion of other intangible assets. Goodwill of $1.0 billion
was recorded as part of the acquisition. Refer to Note 2
Acquisition and Divestiture Activity in Item 8 of our 2012
Form 10-K for additional details related to the RBC Bank
(USA) transactions.
2012 S ALE O F S MARTSTREET
Effective October 26, 2012, PNC divested certain deposits and
assets of the Smartstreet business unit, which was acquired by
PNC as part of the RBC Bank (USA) acquisition, to Union
Bank, N.A. Smartstreet is a nationwide business focused on
homeowner or community association managers and had
approximately $1 billion of assets and deposits as of
September 30, 2012. The gain on sale was immaterial and
resulted in a reduction of goodwill and core deposit
intangibles by $46 million and $13 million, respectively.
Results from operations of Smartstreet from March 2, 2012
through October 26, 2012 are included in our Consolidated
Income Statement.
124 The PNC Financial Services Group, Inc. – Form 10-K