PNC Financial Services Group's CEO Hosts 2012 Annual Meeting of Shareholders (Transcript)

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PNC Financial Services Group (NYSE:PNC)

2012 Annual Meeting of Shareholders

April 24, 2012 11:00 am ET


James E. Rohr - Chairman, Chief Executive Officer, Member of Executive Committee and Member of Risk Committee

George P. Long - Chief Governance Counsel and Corporate Secretary

James E. Rohr

Good morning, ladies and gentlemen. I am Jim Rohr, Chairman and Chief Executive Officer of the PNC Financial Services Group. And I'll be presiding today as the meeting chairman. I now call the PNC 2012 Annual Meeting of Shareholders to order.

On behalf of our Board of Directors and management team, I welcome all of you. And I would like to acknowledge those shareholders and others listening by means of webcast or teleconference.

Now particularly, I am pleased that we're holding our meeting today at the August Wilson Center for African American Culture, which is named for the Pulitzer Prize winning playwright and a Pittsburgh native, August Wilson.

Now everyone in attendance should have received an agenda describing the business to be conducted at today's meeting and the rules of conduct. If you did not receive an agenda, please raise your hand and the attendants will give you one.

We have 3 proposals to consider at this meeting, and there will be time for the discussion of proposals after they have been presented. If you have a question or a comment on the matters other than the specific proposals, please wait until the end of the meeting.

After we adjourn the formal meeting, you will have the opportunity to speak. Your agenda provides instructions on addressing the group. When addressing the meeting at any time, please remember that only shareholders or their proxies may address the audience. All questions and comments must be directed to me. Upon being recognized by me, please step to one of the microphones in the aisles, identify yourself and state whether you're a shareholder or represent a shareholder.

If you have a question that concerns your personal circumstances that do not affect shareholders generally, please consult one of the PNC employees at the information table outside of this room. They'll be more than happy to assist you.

As noted in the agenda, I have the right to limit questions to one at a time and at the end of the discussion, if it appears that the subject has been adequately covered or is not appropriate. To accommodate all shareholders who wish to speak, we're limiting each questioner to 3 minutes in duration and each speaker to 9 minutes overall.

Now I would like to introduce George Long, our Chief Governance Counsel and Corporate Secretary. George, welcome?

George P. Long

Good morning.

James E. Rohr

I would also like to welcome our other PNC director nominees who are here this morning. When I ask each of them in the audience to stand, please or his or her to stand up when their name is mentioned. Rick Berndt, Chuck Bunch, Paul Chellgren, Kay James, Rick Kelson, Bruce Lindsay, Tony Massaro, Jane Pepper, Don Shepard, Lorene Steffes, Dennis Strigl, Tom Usher, George Walls and Helge Wehmeier. Please join me in thanking our talented and dedicated Board of Directors.

I would now like to introduce the representatives from PricewaterhouseCoopers LLP, our independent registered public accounting firm. Here today are Bill Lewis, Sam Kennedy and Mike Yancek [ph]. Will you please stand? Thank you.

You will have the opportunity to ask questions of these representatives during the question-and-answer session. I would now like to ask our senior executives and business leaders in attendance to please stand to be recognized. Thank you, everyone. I would now ask George Long to present the Secretary's report. George?

George P. Long

Mr. Chairman, I present an affidavit from Computershare Trust Company, NA, PNC's transfer agent. The affidavit states that the notice of internet availability of proxy materials was mailed to certain shareholders on March 14, 2012, at which time shareholders were given access to the notice of annual meeting, proxy statement and form of proxy and our 2011 annual report.

Certain other shareholders were mailed paper copies or received electronic delivery of these proxy materials beginning on March 14, 2012. The materials were distributed to those who were shareholders of record as of January 31, 2012, the record date for this meeting.

The Board of Directors appointed Computershare as the judge of election for this meeting. The judge of election keeps a certified listing of all shareholders of record and this list is available for inspection by any shareholder.

On behalf of Computershare, Joe Roach is here to supervise the voting, and he has delivered his Oath of Office to me. Mr. Roach, will you please stand? Thank you.

The affidavit, Notice and Oath will be filed with the records of this meeting. Copies of the proxy statement and annual report are available outside of this room and the judge of election has certified at the beginning of this meeting, there are present in person or by proxy 454 million votes out of approximately 535.7 million votes represented by shares outstanding or over 86% of the total voting power.

That concludes my report. Our presentation materials and information in the Investor Relations of our website,, include cautionary statements regarding forward-looking information and adjusted information. And I urge you to read them. Jim?

James E. Rohr

Thank you, George. There is a quorum present, and I declare this to be a duly constituted meeting of the shareholders. Copies of the minutes of last year's annual meeting are available from the Secretary. George, would you please comment on those minutes?

George P. Long

Thank you, Jim. The 2011 Annual Meeting of Shareholders was held in Washington, D.C., on Tuesday, April 26, 2011. The minutes reflect the following: The election of 15 directors, the ratification of the selection of Pricewaterhouse Coopers as PNC's independent auditors for 2011, approval of the amended and restated 2006 Incentive Award Plan, the approval of an advisory vote on executive compensation and the recommendation of one year for the frequency of future advisory votes on executive compensation. That concludes my summary of the minutes of last year's meeting. Jim?

James E. Rohr

Thank you, George. The stated purposes of this meeting are to consider and act upon 3 management proposals. They are: First, the election as directors of the 15 nominees named in the proxy statement to serve until the next annual meeting and until their successors are elected and qualified; second, the proposal to ratify the Audit Committee selection of PricewaterhouseCoopers LLP as PNC's independent registered public accounting firm for 2012; and third, the proposed advisory vote for approving executive compensation.

In order to make this meeting as efficient as possible, I will now ask for a single motion to introduce these proposals. Such a motion will eliminate the need to have separate motions made and seconded throughout the meeting. May I have a motion?

Unknown Attendee


James E. Rohr

Thank you. May I have a second?

Kevin Glass

Mr. Chairman, my name is Kevin Glass. And as a shareholder of the company, I second that motion.

James E. Rohr

I declare that these proposals have been properly introduced and moved, and I now open the floor for any discussions or questions regarding these specific proposals. Thank you.

All proposals are now formally before the meeting and I declare the polls to be open. If anyone needs a ballot, please raise your hand so that we can give you one before the poll is closed. If you have already voted and do not intend to change your vote today, you do not need a ballot. Will the proxies please cast their ballots?


James E. Rohr

I just declare the polls to be closed. And now I ask the judge of election to gather all the written ballots. Please make sure that you have signed and fully completed your ballot before handing it in. Once the judge of election collects all the ballots, the polls will then close.

I now declare the polls to be closed. While the votes are being counted, I would like to take a moment to review our 2011 accomplishments and my thoughts on our first quarter performance. We had a good year in 2011 with our strong first quarter performance and with our strong first quarter performance, which included the very successful acquisition and conversion of the RBC Bank USA in the Southeast, we believe we're well positioned to have yet another very good year.

And earlier this month, we announced an increase in the quarterly common stock dividend, $0.40 per share, and we've raised our dividend by 300% during the last 2 years. We also announced plans to repurchase up to $250 million of our common stock in 2012.

Together, these actions, along with the RBC Bank acquisition, are designed to enhance the value we provide to you, the shareholders. We achieved these results by continuing to execute our proven business model.

Let me begin by reviewing the highlights of our 2011 performance. In a year marked by economic uncertainty and significant regulatory changes, we delivered net income of $3.1 billion. We achieved these results by growing the number of customers we serve, managing risk and expense and continuing to build on our already strong capital position.

Due to our success in adding new clients, we saw a strong full year loan growth of $8.4 billion or 6%, and our deposits increased to $188 billion at year end. Overall, credit quality metrics showed a significant improvement in 2011, and we ended the year as one of the best capitalized banks in our peer group.

Our balance sheet also remained strong and was core funded with an 85% loan-to-deposit ratio. And we leveraged our financial performance and continued capital strength to invest in several strategic acquisitions that expand our presence in attractive high-growth markets in the Southeast. And we believe our performance was due in large part to our focus on employee engagement.

Last month, we were honored to be named the 2011 Gallup Great Workplace Award winner for the second straight year. We are the only U.S. bank to receive this recognition in successive years.

As we look forward, we strive to deliver long-term value for our shareholders. And this slide shows the comparison of total returns. As you can see, PNC stock performance was generally lower than the S&P 500, which was driven primarily by gains in technology stocks. But it was significantly better than our bank peer group and the S&P 500 banks.

Our stock price saw growth over the first quarter as well. By executing our strategies, we believe that we will deliver a premium valuation over time. And with our recognized brand, innovative product offerings and strong cross-selling ability, we had an exceptional year last year for customer growth. We see customer growth as key to our long-term success.

In our retail bank, checking relationships increased by almost 300,000, including some 40,000 from acquisitions and represents a 5% growth, substantially higher than the 1% population increase in our footprint, demonstrating that PNC increased market share.

In our Corporate & Institutional Bank, new primary client growth in corporate banking were 1,165 companies, an increase of 15% compared to the new primary clients that we added in 2010. That marked the second consecutive year we added more than 1,000 new primary clients. The Asset Management Group saw a record new client growth due to strong referral activity from the retail bank and Corporate & Institutional Banking. And this customer growth helped to drive a dramatic change in net asset inflows for the wealth business.

Taken together, 2011 was a very good year for your company. At PNC, as you know, we've always taken a long view. As I look back to 2001, our locations were primarily contained within the boundaries of New York -- of Pennsylvania and New Jersey. And our asset and deposit size reflected that scope.

By the end of 2007, we had successfully converted Riggs, Mercantile and Yardville and announced plans to acquire Sterling. This is what PNC looked like in 2010, reflecting the integration of National City, which more than doubled our size.

And this map reflects PNC today, including the RBC Bank, we now rank seventh in deposits among the U.S. banks. Our retail bank has a branch footprint, which covers about half of the U.S. population. Our Corporate & Institutional Banking segment is a leader in serving middle-market clients with national capabilities to meet their needs. And PNC's asset management group is one of the largest bank-based wealth managers in the country.

The residential mortgage serves customers in 32 states. And last but not least, we continue to hold a 21% economic interest in BlackRock, the largest publicly traded investment management firm in the world. And we see tremendous growth potential in all of our markets, along with the new markets in the Southeast. Let me show you a short video that captures some of the excitement that we feel about the opportunities in this region.


James E. Rohr

For this year and beyond, we're focused on investing in our businesses and executing the growth strategies you see on this slide. We believe this provides us with opportunities for sustained growth.

Five years from now, we want to look back at this moment and say we saw the opportunity and we've made the most of it.

Now let's move on to our first quarter results. Last week, we announced that PNC had an excellent first quarter that builds on our 2011 achievements. Once again, we've grown the number of customers we serve, managed risk and expenses and returned value to shareholders. We saw a strong revenue growth this quarter as a direct result of our strategy to grow customers and loans.

Net interest income was up, as we were -- as were select fee categories. Let me share some highlights. We earned $811 million in net income or $1.44 per common diluted share -- diluted common share. That includes first quarter integration cost of $145 million or $0.18 a share. We continue to have remarkable customer growth in the first quarter. We saw $8 billion in average loan growth in the first quarter, a 5% increase following the strong results in the fourth quarter.

Due to customer growth, loan growth and our expanded footprint, we had a 5% increase in revenue in the first quarter. And overall, credit quality remained stable and expenses were well managed. Our balance sheet continues to be highly liquid and positioned to support additional client growth. And our capital ratios remain strong.

Overall, this was an excellent start to 2012, which we believe will be another very good year for PNC.

Throughout our history, we've managed our company with a focus on delivering for our 4 constituencies: Employees, customers, communities and you, our shareholders. This is what we've done in the past and what we will continue to do in the future.

Now I want you to -- now I want to show you a brief video that highlights many of our accomplishments and reflects our commitments to our constituents.


James E. Rohr

I love that video. It's amazing what all the PNC people have been able to accomplish. This year, we're celebrating our 160th year in banking. Our history traces back to 1852 when the Pittsburgh Trust and Savings Company began operations near the intersection of Fifth Avenue and Wood Street in downtown Pittsburgh, the same corner where we're headquartered today. Then as now, we remain committed to helping businesses and consumers achieve their goals. We have a strong team, and we're focused on working together to deliver shareholder value as we continue to build a great company. Thank you for being here.

Now I'd like to call on George Long for the results of the voting. George?

George P. Long

Mr. Chairman, the judge of election has provided a preliminary report to me, which certifies that a majority of the votes cast were for all director nominees, all 15, for the ratification of the selection of PricewaterhouseCoopers and for the advisory vote approving executive compensation. I will file this report with the records of the meeting and PNC will disclose the final results on their current report on Form 8-K. Jim?

James E. Rohr

Thank you, George. Subject to certification of the final voting results by the Judge of Election, I declare that the shareholders have approved the proposals. Now this concludes the formal business before the meeting as stated in the agenda, we will now adjourn. And you will be able to step forward and ask questions or make comments. There being no further business, this concludes our meeting, and I hereby declare this annual meeting to be adjourned.

I would now like to open the floor for questions from our shareholders.

Question-and-Answer Session

Unknown Attendee

Mr. Rohr, it's me, Lois Kriser [ph]. I just have a comment that I looked through that annual report, and it's so huge and I know nobody is going to read it. I think you didn't even read it yourself. But anyway, I just like a couple of pages of all that stuff consolidated so that you can find and come down to the liabilities and the earnings. I mean, this is -- you're paying millions of dollars to these Pricewaterhouse to write this thing, and it's such a waste of time because nobody's going to read it anyway. I bet the Board of Directors didn't even read it, and I don't blame them. So that's one comment. And the other comment is, I think, pretty soon, you're going to have to get some young men on the board, or young women, because it looks like we're getting up there in age. And what I think is that maybe instead of getting a lot of new ones, that you ought to cut this board down.

James E. Rohr

We've tried to condense the annual report, but the more we condense it, the more requirements that we have to add more disclosures in the annual report. And that's why that we've had the growth in so many pages. And with regards to the age of the directors, I'll take that up with the governance committee after we have the meeting. But I have to admit that this group of directors has been arguably the most successful group of bank directors in the large bank group for a number of years. So we'll try and keep them if we can. Thank you. Yes, sir?

Chris Nicholson

My name is Chris Nicholson. I come all the way from Philadelphia, a small town east of here. I'd like to take you back to 1865 when a small group of Quakers, including my grandfather, gathered to start the Provident banking and trust company and -- which later was incorporated into PNC. We were a little slow in Philadelphia. I think we started maybe 15 years later than you did here in Pittsburgh. John Carter, my grandfather, also in addition to in his spare time organizing banks, owned a chemical manufacturing company on Bainbridge Street and 24th. And worked on that -- and in addition to his being a manufacturer and a chemist, he was a scientist, botanist, astronomer and very active in community activities, particularly in the Quaker community. He is a strong supporter of the Academy of Natural Science and supported some of their important conservation programs. His life was framed by his Quaker beliefs, and there's something I found in our family archive that the furnaces at his chemical plant were closed, turned off banked down on every Sunday, so that the men -- his workers could have a day off. This, apparently, was not good for the furnaces that it shortened their life, but he was impressed with the need to provide good working opportunities for his employees. Although I never knew my grandfather, the Provident Bank has been a prominent positive presence and influence in my life as I was growing up. And I had 2 uncles that also worked for PNC, Walter Borton [ph] and my uncle S. Francis Nicholson [ph], who was Vice President of the Provident and very instrumental in developing sound investment policies. These 3 men had a very strong interest in environmental issues, which, I mean, this goes back more than 100 years before people paid much attention to the environment. I'm sure that they would object now to PNC money being used, the destructive practices of mountaintop removal. To acknowledge John Carter's strong -- and John Carter, as far as I know, is no relation to the current hero in the movie, John Carter. The -- but to acknowledge his interest in the environment, I'm going to -- I plan to sell the majority of my PNC shares, which will be at some loss. PNC, as you've told us, is a good company. It's a good investment. But I'm willing to do that, sell a majority of my holdings if the bank does not respond to the recommendation that we have given to you from the EQAT group. I also -- will also work in support future efforts to change PNC's lending practices, particularly in the environmental realm. My family ties to PNC are very important to me, and I want to help you achieve your goals of being a green bank and enhance our quality of life. Thanks very much.

James E. Rohr

Thank you very much, Mr. Nicholson, and thank you for your family history. Obviously, the Provident Bank is a major portion and a meaningful part of PNC and has been a great add for a long period of time. We appreciate your family's history with us as well, and we would not like you to sell your shares. So we would like you to just remain a shareholder because of the family history.

Chris Nicholson

I hope I can.

James E. Rohr

With regards to mountaintop removal, as you know, we achieved our policy with regards to financing mining companies. We don't finance mountaintop removal mining projects, and we don't finance any mining company who has mountaintop mining as the majority of their activities. As a matter of fact, the mining companies that we do finance have an average of 8% of their activity in mountaintop mining. What we had to do is we had to really try to strike a balance, try to minimize any involvement that we had with mountaintop mining without really inhibiting all of the people that work for these very large coal companies. And so we have responded to you the best we know how and we've tried to strike a balance. Yes, sir?

Unknown Shareholder

Andrew Barry [ph] is my name, I'm a shareholder. I want to make it clear that my remarks are being conveyed to Mr. Rohr, but they are directed to the Board of Directors. We have always voted for Mr. Rohr and we intend to continue to do so. In fact, what we do is vote for one person, Mr. Rohr. And I have people, women especially and others that are a little leery about coming up and speaking or saying thanks. I'm saying to you, all you have to do is vote for Mr. Rohr, vote against all the other directors. That's easy. So we'll go from here. So if we get into any discussions that you feel that is between Mr. Rohr and I, it's not so. I want to say this, our income dropped 8% from a year ago. This is what I've read. Our basic concern, of these women and men that have spoken to me, are that they're looking for the $0.66 per quarter, the dividend, and that's a long way to go, but we're up to what, $0.40. All I know is that something -- we got to cut down expenses. And I've got it from my family, everybody who's strong supporters of yours, we've got to cut down expenses. Two years ago, I brought it up, you put $100 million for education, $10 million a year, I understand you paid it off. You've come up with $350 million more, you're going to give to education. I want to -- I'm educating my kids and grandkids, thank God, I've been successful. But at the same time, we've got to look over, all of us, how it affects us. So all I'm saying in effect, we've got to eliminate spending and return our dividend. And that's about the extent of my remarks, Mr. Rohr.

James E. Rohr

Thank you very, very much. It's good to have you back. And we're worried about expenses as well. As a matter of fact, we have a program this year that will take out about $400 million worth of repetitive expenses, and that's a very important program for us. And bringing the dividend back is important to all of us. I mean, we've -- because of the financial crisis, clearly, we had to reduce it dramatically and we've been able to bring it back up to $0.40. And hopefully, through our success and our investments, we'll be able to continue to increase it in the future. Thank you. Yes, ma'am?

Unknown Attendee

My name is Bren Murphy [ph], I'm a student from Temple University. I am a member of Temple Community Against Mountaintop Removal and a member of Students United Against Destructive Industries. And I'm here as an individual, one of many who is tired of watching continued destruction of the land and communities and listening to institutions' claims to have their hands tied. Over the past 9 months, I've been organizing the students, community members and meeting with administration to end my university's involvement with mountaintop removal. I have seen this organization grow from 3 to 10 to 6 times that. I have watched this movement spread from one campus to the next with allies at University of Pennsylvania, Swarthmore, Haverford, Bryn Mawr Meyer. We've collected over 1,000 petition signatures calling on the universities to end this involvement. We have continuously met with administration. We have held campus and citywide protests, teach ins, in-class lectures, performances, rallies and have successfully closed the counts with Move your Money and divestment campaign. At Temple, we have engaged an act of civil disobedience ending in 3 student arrests on our own campus. We are organized. We are educated. And this movement is growing and will continue to grow. If not out of passion for the cause, this movement will grow out of necessity to end the devastation to the land and the people of Appalachia. We continue to do this because MTR is one of the greatest tragedies of our times, because there is no future for my generation, for our children in a world that has been destroyed by the blind greed of our investors. In August 2011, we were 3. I stand before you today representing the voices of over 1,000 students and community members. We as students understand the integral nature of our positions, both to our universities and the PNC. And as we have begun by changing the conversation about MTR in the student body and with the administration, we as students have recognized our truest agency and work diligently to play our roles in ending MTR. It is now that we ask you, as both a financial institution and as individuals, to find where your true agency lies. We ask you to work with and with respect to the people of Appalachia, with respect to the environment and with respect to the students and with those before you today to end MTR. If PNC has to fiduciary responsibility to its shareholders, to continue funding mountaintop removal, it is also true that we all have responsibility to the world, the people and this environment to end MTR. And I understand the policy change has made statements that there's only 8% that is financed by these companies, however, when these companies are huge and pressing, then the change is not significant enough.

James E. Rohr

Thank you. Another comment or question. Yes, sir?

Unknown Shareholder

Mr. Rohr, Walter Jeff Sullivan [ph], I'm a shareholder. We met last year in Washington DC. We had a nice conversation. Last year, we bought an ethical appeal to you from the Earth Quaker Action Team about mountaintop removal coal mining. Today, I want to try and make as best as I can an economic argument. There is profit to be made in the financing of coal. There's profit to be made in the financing of mountaintop removal coal mining. Virtually, all of that profit is by externalizing the true costs of coal and the true costs of mountaintop removal coal mining. By getting exemptions from environmental regulation, by abandoning binds without improving them, by having the health costs to people paid for by the government, by not paying to repair the road, coal cost the state of West Virginia more than they bring in both in taxes by all the people who work in the coal industry. So the profit that PNC bank makes by financing the coal industry is off of the backs of human beings and communities. There are liabilities involved. And the Earth Quaker Action Team is committed to bring some of these externalized costs on to your balance sheet. We can commit it by doing this by working with students and colleges and campuses, where you want to do business providing services. We will do that throughout your footprint by educating your -- the people who have accounts in your banks to know about your relationship with mountaintop removal coal mining. And we will do it by attaching your brand name to this practice. I believe you have a greater economic interest in joining with the future and becoming the bank that leads our society into a sustainable future. There are college students who want to put their money in a bank that leads us into a future where we can live. You have much less economic interest in a dying coal industry. And yet, there is still some profit to be made there. And my hope is that you will look at those liabilities and those possibilities and see where your true financial strength lies. And I think it's in keeping Bren Murphy [ph] as a customer rather than getting the last little bits of money out of a dying coal industry. On February 29, we announced the Green Your Money initiative, where we started to advertise throughout the footprint to people who have accounts in your bank about your relationship with mountaintop removal coal mining. On the 1st of June, if you haven't changed your policy to have a strong sector exclusion against mountaintop removal coal mining, we will start withdrawing those accounts. To date, we have more than $1.9 million of Quaker money identified in your bank that will be withdrawn, and we are building every day to find more. And we wish that it was enough to say there is an ethical issue in the financing of climate change. There's an ethical issue in the financing of birth defects and cancer. But if an ethical issue is not enough, we want to bring an economic argument that your future lies elsewhere. And I hope that you'll continue to educate yourself on the finances of this industry and continue to educate yourself on what it would be to be the leading bank to lead our culture into a sustainable future. That's the PNC bank that I hope you have a vision for. And to do that, mountaintop removal coal mining must end, and PNC bank has a leverage and influence and capacity to be a part of that process, even with those big coal companies that only do 8% of mountaintop removal coal mining. If it's only 8% of their business, they can find 8% to help build a much more diversified future-directed Appalachia, much like we have here in Pittsburgh after the end of the steel industry. Something has to happen in that part of the country to transform that economy, and PNC has a role to play in it. And I hope that, that would be your emphasis and not mountaintop removal coal mining.

James E. Rohr

Thank you. Another comment?

Unknown Shareholder

Yes, hi. My name is Diane Lindsay [ph]. And my question is why has the stockholders dividend not been restored to the 2009 rate of $0.66? It seems to me that the board is saying yes to a lot of wonderful ideas that are taking on more debt without regard to the stockholder and the shareholder and the bank customers. You sponsoring golf outings, the marketing is in millions of dollars. We're constructing brand-new building and buying a bank, the RBC Bank, and yet the stockholder is the last one to get that little incentive to restore what we had. As I understand it, these warrants have not been paid yet on the federal money, and that needs to be paid back. It seems we're taking on an awful lot of debt without having the income to match it. And so as a stockholder, I am worried not to see the growth that we have had previously and we're anticipating more debt. So I'd like to know why the dividends have not been restored.

James E. Rohr

Thank you for your comments. And we would love to continue to raise the dividend and hopefully, we will in the future, as we have introduced in the recent past. As you know, during the financial crisis, the regulatory environment changed rather dramatically, and we were required to reduce our dividend, which we did. The new regulatory requirements require the banks to significantly increase their capital ratios. And so we, during -- going into the regulatory environment, we had about 4% to 4.5% of our balance sheet was made up of capital. That now is in excess of 9%. We're going to have to continue to build capital under the new regulatory rules. And so what's happened is that's curtailed our ability to pay incremental dividends. And so over a period of time, as we continue to build our earnings, we've invested in RBC, for example, which we expect to have about a 19% return. As we continue to grow earnings, we would hope that we would be able to continue to grow that dividend. We'd love to see it back at $0.66 again. I agree with the comments that have been made. Yes, ma'am?

Unknown Shareholder

My name is Carolyn McCoy [ph], I'm a stockholder of record and a native of Pittsburgh. It's nice to be back in the city without the snow.

James E. Rohr

You almost missed it.

Unknown Shareholder

I am also the chair of the board of an organization you've heard mentioned here, Earth Quaker Action Team. And I want to say that we believe that PNC's continued investment in MTR coal companies represents a very poor choice for PNC bank, a choice that violates PNC's green image, the beautiful green wall that you have here and its core value of quality of life. As MTR threatens the quality of life of every man, woman and child and even unborn child in areas near mountaintop removal coal mining. We believe this policy threatens customer growth as students on PNC-affiliated campuses learn to associate PNC not with anything positive, but with the worst environmental practice in the U.S. And what has not been said is that Earth Quaker Action Team is launching a green walk for jobs and justice starting next week, where a group of people will walk from Philadelphia to Pittsburgh to your PNC headquarters. Over 200 miles of that distance will be walked and every step of the way, we will be calling attention to the fact that PNC, despite its new policy, is continuing to fund mountaintop removal. PNC still continues to support mountaintop removal through its investments or loans or bond underwriting of Alpha Coal Company, the coal company that bought Massey Energy; Massey Energy, the coal company that's associated with -- that was responsible for the Big Branch mine disaster. Massey had perhaps 50% of its coal profits from MTR. Alpha is a much larger company. So now the percentage of mountaintop removal is lower, but it hasn't helped the people in Appalachia one bit. It hasn't reduced the amount of mountaintop removal. So we feel that this policy is not adequate. We are calling on PNC to exclude mountaintop removal coal companies entirely from its financial support. So for 200 miles, for 16 days, every day and every evening, we'll be calling attention to the connection between PNC and MTR financing. We feel that this is an Achilles' heel for PNC. It is anything but useful to your company to continue to do this. Our campaign is not against PNC. Of course, it is against mountaintop removal coal mining. And as we walk, we will, of course, publicize our walk, and this will amplify our campaign not only to Pennsylvania, but to all the 16 states in which PNC is now invested. We feel that for the future of your company, for the future of our country, it is wrong and it is foolish to continue to support MTR. We call on PNC to make a sector exclusion of any coal company that engages in any degree of mountaintop removal.

James E. Rohr

Thank you. Just to conclude the mountaintop removal piece, I think we have found that there is not a way for us to finance coal mining in general while we're eliminating any support of mountaintop removal. That's because the large coal companies are engaged in it in a minor way. And so unless we would adopt the discriminatory practice against the entire industry, we would still have some mountaintop removal policy. We have some mountaintop removal activity in our portfolio. Again, I'd like to reiterate, we do not finance mountaintop removal companies per se or projects, but only, the only association we would have was -- we would affiliate with an energy company was a very minor portion or might have a minor portion of their activities in mountaintop. I would suggest, frankly, with that, the idea that you would protest the bank for financing the coal industry, which is really what we're doing in supporting a very diverse number of people and electricity industry and elsewhere. I think the issue about mountaintop removal is much more so involved with the Environmental Protection Agency, which I think is the place that, that issue should be taken up as opposed to a bank which finances an energy industry. Are there any other questions to come before the meeting? If there's not, thank you very much, everyone, for coming, and thank you for supporting us as your shareholders. We appreciate it. We now adjourn the meeting.

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