PNC Prices $3.0 Billion Common Equity Offering
Positions PNC to Repay TARP Preferred Shares
PITTSBURGH, Feb. 3 /PRNewswire-FirstCall/ -- The PNC Financial Services Group, Inc. (NYSE: PNC) today announced that it priced a $3.0 billion offering of 55.6 million shares of its common stock at $54.00 per share. The underwriters will have a 30-day option to purchase up to an additional 8.3 million shares of common stock from the company to cover over-allotments, if any. The closing is expected to occur on or about February 8, 2010.
As previously announced, PNC reached an agreement with its banking regulators and the U.S. Treasury permitting it to redeem the $7.6 billion of preferred shares held by the U.S. Treasury under the Troubled Asset Relief Program (TARP) Capital Purchase Program. The common stock offering and the previously announced plan to sell PNC Global Investment Servicing, Inc. are part of the agreement.
Subject to market conditions, PNC plans to offer senior notes in an aggregate amount of $1.5 billion to $2.0 billion. The debt offering is intended to provide additional parent company liquidity in connection with the redemption of the TARP preferred shares, which will follow the debt offering and is anticipated to occur during February 2010. Any offers with respect to the proposed debt offering will be made only by a separate prospectus.
J.P. Morgan Securities Inc. and Morgan Stanley & Co. Incorporated acted as joint bookrunning managers for the common stock offering.
Copies of the registration statement and other documents PNC has filed with the Securities and Exchange Commission (SEC) containing more complete information about PNC and this offering are available for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, copies of the prospectus may be obtained from J.P. Morgan Securities Inc. toll free at (866) 803-9204 or Morgan Stanley & Co. Incorporated toll free at (800) 718-1649.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of the nation's largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services. The information contained on the PNC Web site is not a part of this news release.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
We make statements in this news release, and we may from time to time make other statements, regarding our outlook or expectations for earnings, revenues, expenses, capital levels, liquidity levels, asset quality 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," "plan," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "will," "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 some of these factors in our 2008 Form 10-K and 2009 Form 10Qs, including in the Risk Factors and Risk Management sections of those reports, and in our other SEC filings. Our forward-looking statements may also be subject to other risks and uncertainties, including those that we may discuss elsewhere in this news release or in our filings with the SEC, accessible on the SEC's website at www.sec.gov and on or through our corporate website at www.pnc.com/secfilings. We have included these web addresses as inactive textual references only. Information on these websites is not part of this document.
-- Our businesses and financial results are affected by business and
economic conditions, both generally and specifically in the principal
markets in which we operate. In particular, our businesses and financial
results may be impacted by:
-- Changes in interest rates and valuations in the debt, equity and
other financial markets.
-- Disruptions in the liquidity and other functioning of financial
markets, including such disruptions in the markets for real
estate and other assets commonly securing financial products.
-- Actions by the Federal Reserve and other government agencies,
including those that impact money supply and market interest
rates.
-- Changes in our customers', suppliers' and other counterparties'
performance in general and their creditworthiness in particular.
-- Changes in levels of unemployment.
-- Changes in customer preferences and behavior, whether as a
result of changing business and economic conditions or other
factors.
-- A continuation of recent turbulence in significant portions of the US
and global financial markets, particularly if it worsens, could impact
our performance, both directly by affecting our revenues and the value
of our assets and liabilities and indirectly by affecting our
counterparties and the economy generally.
-- Our business and financial performance could be impacted as the
financial industry restructures in the current environment, both by
changes in the creditworthiness and performance of our counterparties
and by changes in the competitive and regulatory landscape.
-- Given current economic and financial market conditions, our
forward-looking financial statements are subject to the risk that these
conditions will be substantially different than we are currently
expecting. These statements are based on our current expectations that
interest rates will remain low in the first half of 2010 but will move
upward in the second half of the year and our view that the modest
economic recovery that began last year will extend through 2010.
-- Legal and regulatory developments could have an impact on our ability to
operate our businesses or our financial condition or results of
operations or our competitive position or reputation. Reputational
impacts, in turn, could affect matters such as business generation and
retention, our ability to attract and retain management, liquidity, and
funding. These legal and regulatory developments could include:
-- Changes resulting from legislative and regulatory responses to
the current economic and financial industry environment,
including current and future conditions or restrictions imposed
as a result of our participation in the TARP Capital Purchase
Program.
-- Other legislative and regulatory reforms, including broad-based
restructuring of financial industry regulation as well as
changes to laws and regulations involving tax, pension,
bankruptcy, consumer protection, and other aspects of the
financial institution industry.
-- Increased litigation risk from recent regulatory and other
governmental developments.
-- Unfavorable resolution of legal proceedings or other claims and
regulatory and other governmental inquiries.
-- The results of the regulatory examination and supervision
process, including our failure to satisfy the requirements of
agreements with governmental agencies.
-- Changes in accounting policies and principles; and
-- Changes to regulations governing bank capital, including as a
result of the so-called "Basel 3" initiative.
-- If we do not redeem the Series N Preferred Stock we issued to the US
Department of the Treasury, such securities may limit our ability to
return capital to our shareholders and is dilutive to our common shares.
If we are unable previously to redeem the shares, the dividend rate
increases substantially after five years.
-- Our business and operating results are affected by our ability to
identify and effectively manage risks inherent in our businesses,
including, where appropriate, through the effective use of third-party
insurance, derivatives, and capital management techniques, and by our
ability to meet evolving regulatory capital standards.
-- The adequacy of our intellectual property protection, and the extent of
any costs associated with obtaining rights in intellectual property
claimed by others, can impact our business and operating results.
-- Our ability to anticipate and respond to technological changes can have
an impact on our ability to respond to customer needs and to meet
competitive demands.
-- Our ability to implement our business initiatives and strategies could
affect our financial performance over the next several years.
-- 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.
-- Our business and operating results can also be affected by widespread
natural disasters, terrorist activities or international hostilities,
either as a result of the impact on the economy and capital and other
financial markets generally or on us or on our customers, suppliers or
other counterparties specifically.
-- Also, risks and uncertainties that could affect the results anticipated
in forward-looking statements or from historical performance relating to
our equity interest in BlackRock, Inc. are discussed in more detail in
BlackRock's filings with the SEC, including in the Risk Factors sections
of BlackRock's reports. BlackRock's SEC filings are accessible on the
SEC's website and on or through BlackRock's website at
www.blackrock.com. This material is referenced for informational
purposes only and should not be deemed to constitute a part of this
document.
In addition, our acquisition of National City Corporation ("National City") on December 31, 2008 presents us with a number of risks and uncertainties related both to the acquisition itself and to the integration of the acquired businesses into PNC. These risks and uncertainties include the following:
-- The anticipated benefits of the transaction, including anticipated 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 on the state going forward of the economic and financial
markets, which have been under significant stress recently.
Specifically, we may incur more credit losses from National City's loan
portfolio than expected. Other issues related to achieving anticipated
financial results include the possibility that deposit attrition or
attrition in key client, partner and other relationships may be greater
than expected.
-- Legal proceedings or other claims made and governmental investigations
currently pending against National City, as well as others that may be
filed, made or commenced relating to National City's business and
activities before the acquisition, could adversely impact our financial
results.
-- Our ability to achieve anticipated results is also dependent on our
ability to bring National City's systems, operating models, and controls
into conformity with ours and to do so on our planned time schedule. The
integration of National City's business and operations into PNC, which
includes conversion of National City's different systems and procedures,
may take longer than anticipated or be more costly than anticipated or
have unanticipated adverse results relating to National City's or PNC's
existing businesses. PNC's ability to integrate National City
successfully may be adversely affected by the fact that this transaction
has resulted in PNC entering several markets where PNC did not
previously have any meaningful retail presence.
In addition to the National City transaction, we grow our business from time to time by acquiring other financial services companies. Acquisitions in general present us with risks, in addition to those presented by the nature of the business acquired, similar to some or all of those described above relating to the National City acquisition.
CONTACTS: MEDIA: Brian E. Goerke (412) 762-4550 corporate.communications@pnc.com INVESTORS: William H. Callihan (412) 762-8257 investor.relations@pnc.com
SOURCE The PNC Financial Services Group, Inc.
Released February 3, 2010