The past year wasn't the best for giant regional bank PNC Financial (NYSE:PNC), which saw its fortunes rise and fall throughout 2012. For that reason, investors are doubtless looking forward to (if you can call it that) the Q4 earnings report with some trepidation, particularly since the bank has admitted to some headwinds that will likely impact the quarter's income.

Mortgage malaise strikes again
Last year at this time , PNC showed a dismal 40% drop in net income from its Q4 2010 numbers, as well as a drop in revenue of 9%. Things began to look up in the first quarter  of 2012, with revenues up by nearly 3% and net income rising by 2.5%.

Second-quarter results  were a mixed bag, showing another sizable drop in net income and reflecting a $438 million provision for mortgage put-back requests. At that time, management noted the increase in these requests, which it expected to continue -- particularly from Fannie Mae and Freddie Mac. The bank's net income margin and net interest income increased, however, primarily due to its acquisition of Royal Bank of Canada's (NYSE: RY) U.S. operations.

Things really started to look up in Q3 , with net income rising approximately 10% year over year. But, within the last couple of weeks, the rumblings began regarding Q4. The big $8.5 billion settlement  between the government and 10 mortgage lenders -- one of which is PNC -- caused the bank to make noises about fourth-quarter income results . The bank has recorded a charge  of $70 million for its part of the settlement and has increased reserves for put-back requests by another $254 million -- bringing the grand total for this last category to $614 million at the end of 2012.

What does this mean for Q4?
Put-back requests from government-sponsored entities have escalated for other regionals, as well. SunTrust (NYSE:STI) has been seeing its requests increase for over a year , and it noted in September  that it had set aside $375 million in repurchase provisions during the third quarter. Then, of course, there was the recent granddaddy of all put-back settlements  between Bank of America (NYSE:BAC) and Fannie Mae for a stunning $10.3 billion. In addition, both SunTrust and B of A are fellow signatories on the aforementioned fraudulent mortgage settlement.

Despite all the gloom, Fitch has noted  that put-back requests for the regional banks probably won't be as injurious as those facing the nation's biggest institutions. For its part, PNC has announced that issues involving faulty mortgages will likely reduce EPS by $0.47, but that its overall adjusted income will still beat analysts' predictions. In just a couple of days, we'll all know for sure.

Amanda Alix has no position in any stocks mentioned. The Motley Fool owns shares of Bank of America and PNC Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.