Corporate Trust - Current Issues Update

Corporate Trust - Current Issues Update

Terry McRobertsTerry McRobertsEVP, Corporate Trust Services – Regional Management & National SalesEVP, Corporate Trust Services – Regional Management & National SalesMarch 28, 2012

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US BanksUS Banks

AssetsU.S.Rank Company

$Billions1. J.P. Morgan $2,2892. Bank of America $2,220

3. Citigroup $1,9364. Wells Fargo $1,3055. U.S. Bancorp $ 330

6. Bank of NY Mellon $ 3047. PNC $ 2698. SunTrust $ 1739. BB&T $ 16810. Regions $ 130

Source: company reports & FactSet

Assets as of September 30, 2011; Market Value as of October 25, 2011

Market ValueU.S.Rank Company

$Billions1. Wells Fargo $1352. J.P. Morgan $131

3. Citigroup $ 904. Bank of America $ 655. U.S. Bancorp $ 48

6. PNC $ 287. Bank of NY Mellon $ 26

8. BB&T $ 169. Fifth Third $ 1110. SunTrust $ 10

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FIRMS Who is in the Business?

FIRMS Who is in the Business?

Municipal Tax-Exempt Bond Market Corporate Taxable Bond Market Structured Finance and Bond Market Business Escrow Services

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Municipal Tax-Exempt Bond TrusteeMunicipal Tax-Exempt Bond Trustee

Trustee Bank 2011 Deals

# of Deals P/V ($ billions) Market Share (#)

1. Bank of New York Mellon 549 $39.1 29.6%2. US Bank 480 $26.6 25.9%3. Wells Fargo Bank 213 $11.8 11.5%4. UMB Bank 73 $ 0.8 3.9%5. Regions Bank 71 $ 3.2 3.8%6. M&T/Wilmington Trust Bank 59 $ 3.3 3.2%7. Zions Bank 32 $ 0.8 1.7%8. Bank of Oklahoma 32 $ 0.6 1.7%9. Deutsche Bank 25 $ 1.3 1.4%10. Union Bank 25 $ 0.7 1.4%

Total Top 10 1559 $ 88.2 84.1%

Source: Thompson ReutersThird Quarter 2011

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Corporate Taxable Bond TrusteeCorporate Taxable Bond Trustee

Trustee Bank 2011 Deals

# of Deals P/V ($ billions) Market Share (#)

1. Bank of New York Mellon 375 $281 44.6%2. US Bank 146 $ 82 17.4%3. Wells Fargo Bank 134 $ 71 15.9%4. Deutsche Bank 82 $ 66 9.8%5. M&T/Wilmington Trust Bank 66 $ 39 7.9%6. Law Debenture Bank 13 $ 15 1.5%7. Citibank 7 $ 7 0.8%8. Mitsubishi UFJ Bank 8 $ 7 0.9%9. HSBC Bank 6 $ 6 0.7%10. UMB Bank 4 $ 3 0.5%

Total Top 10 841 $ 577 100%

Source: Thompson ReutersThird Quarter 2011

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Structured Finance Bond TrusteeStructured Finance Bond Trustee

Trustee Bank 2011 Deals

# of Deals P/V ($ billions) Market Share (#)

1. Bank of New York Mellon 64 $41 29.6%2. Deutsche Bank 51 $29 14.9%

3. Wells Fargo Bank 57 $25 21.1%4. US Bank 41 $21 17.6%5. Citibank 20 $13 9.6%6. Law Debenture Bank 1 $ 4 2.7%7. Perpetual Trustee 3 $ 2 1.3%8. State Street 3 $ 2 1.3% 9. M&T/Wilmington Trust 2 $ 2 1.3%10. Bank of Oklahoma 1 $0.2 0.6%

Total Top 10 243 $ 141 100%

Source: Thompson ReutersThird Quarter 2011

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Market Issues Coming into 2012Market Issues Coming into 2012

Potential Supply /

Demand Imbalance

Build America BondsRecord volume of expiring credit facilities Outflows from municipal bond funds

Market

Expiration of an estimated $65 billion in letters of credit and liquidity facilitiesBasel III impact on the availability and price for credit/liquidity facilitiesAlternatives (Direct Purchase, Floating Rate Notes, Put Bonds)Concentration of credit enhancement providers

Credit Differentiation

Investors and rating agencies more focused on underlying credit profilesHeadline riskFuture of bond insuranceCounterparty risks

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Market Issues

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ObservationsObservations

Basel III impact on the availability and price of credit

Record volume of expiring bank credit facilities have

not taxed the market as expected

Issuers have been successful in extending expiring

credit facilities or restructuring outstanding VRDNs

62% facilities extended*

15% facilities substituted*

22% restructured (5% with direct bank loans)*

$75

$47$34

$22

$37

$18

$15

$20

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2011 2012 2013 2014+Billion

sYear

SBPA Expirations

LOC Expirations

Municipal Credit ExpirationsMunicipal Credit Expirations

Source: Thomson Reuters

*Moody’s Investor Service 9/15/2011

$112

$65

$49

$42

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Impacts of the Changing Regulatory LandscapeImpacts of the Changing Regulatory Landscape

“A Rocky Road Ahead”

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ABA CTC OVERVIEWABA CTC OVERVIEW

SEC Rule 17Ad-16 SEC Rule 17g – 7 SEC Rule 15Ga – 1 Reputation Risk Municipal Advisors Municipal Disclosure - EMMA

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ABA CTC OVERVIEWABA CTC OVERVIEW

Foreclosure Issues Basel III Liquidity Impact Missing Security Holders Moody’s Appointment of Agents Issue Cost Basis Reporting

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Corporate Trust Audit EnvironmentCorporate Trust Audit Environment

Bank Audit Corporate Trust

Compliance SQRM Self Assessment OCC Teams Federal Reserve Bank SEC Audits

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