PNC Bank 2001 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2001 PNC Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 104

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104

49
Nonperforming Assets By Type
December 31 - dollars in millions 2001 2000
Nonaccrual loans
Commercial $188 $312
Commercial real estate 43
Consumer 32
Residential mortgage 54
Lease financing 11 2
Total nonaccrual loans 211 323
Nonperforming loans held for sale (a) 169 33
Foreclosed assets
Commercial real estate 13
Residential mortgage 38
Other 75
Total foreclosed assets 11 16
Total nonperforming assets $391 $372
Nonaccrual loans to total loans .56% .64%
Nonperforming assets to total loans, loans
held for sale and foreclosed assets .93 .71
Nonperforming assets to total assets .56 .53
(a) Includes $6 million of a troubled debt restructured loan held for sale in 2001.
Of the total nonaccrual loans at December 31, 2001,
approximately 47% are related to PNC Business Credit.
These loans are to borrowers many of which have weaker
credit risk ratings. As a result, a greater proportion of such
loans may be classified as nonperforming. Such loans are
secured by accounts receivable, inventory, machinery and
equipment, and other collateral. This secured position helps
to mitigate risk of loss on these loans by reducing the
reliance on cash flows for repayment. The above table
excludes $18 million of equity management assets carried at
estimated fair value at December 31, 2001 and 2000. The
amount of nonaccrual loans that were current as to principal
and interest was $93 million at December 31, 2001 and $67
million at December 31, 2000. The amount of
nonperforming loans held for sale that were current as to
principal and interest was $8 million at December 31, 2001.
There were no nonperforming loans held for sale that were
current as to principal and interest at December 31, 2000.
Nonperforming Assets By Business
December 31 – in millions 2001 2000
Regional Community Banking $52 $47
Corporate Banking 220 252
PNC Real Estate Finance 635
PNC Business Credit 109 36
PNC Advisors 42
Total nonperforming assets $391 $372
At December 31, 2001, Corporate Banking, PNC Business
Credit and PNC Real Estate Finance had nonperforming
loans held for sale of $161 million, $7 million and $1 million,
respectively.
Credit quality was adversely impacted in 2001 and a
sustained weakness or further weakening of the economy, or
other factors that affect asset quality, could result in an
increase in the number of delinquencies, bankruptcies or
defaults, and a higher level of nonperforming assets, net
charge-offs and provision for credit losses in future periods.
With the current weak economy and growth in PNC
Business Credit, nonperforming assets will likely increase
from year end amounts. See the Forward-Looking
Statements section of this Financial Review for additional
factors that could cause actual results to differ materially
from forward-looking statements or historical performance.
Change In Nonperforming Assets
In millions 2001 2000
January 1 $372 $325
T
ransferred from accrua
l
852 471
Returned to
p
erformin
g
(28) (13)
Princi
p
al reductions (278) (184)
Asset sales (27) (79)
Char
g
e-offs and other (500) (148)
December 31 $391 $372
Accruing Loans And Loans Held For Sale Past Due 90
Days Or More
Amount
Percent of Total
Outstandings
December 31
Dollars in millions 2001 2000 2001 2000
Commercial $54 $46 .36% .22%
Commercial real estate 11 6.46 .23
Consumer 36 24 .39 .26
Residential mortgage 56 36 .88 .27
Lease financing 21.05 .03
Total loans 159 113 .42 .22
Loans held for sale 33 16 .79 .97
Total loans and
loans held for sale $192 $129 .46 .25
Loans and loans held for sale not included in nonperforming
or past due categories, but where information about possible
credit problems causes management to be uncertain about
the borrower’s ability to comply with existing repayment
terms over the next six months, totaled $87 million and $213
million, respectively, at December 31, 2001, compared with
$182 million and $11 million, respectively, at December 31,
2000.