PNC Bank 2001 Annual Report Download - page 90

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NOTE 26 SEGMENT REPORTING
PNC operates seven major businesses engaged in regional
community banking, corporate banking, real estate finance,
asset-based lending, wealth management, asset management
and global fund services.
Business results are presented based on PNC’s
management accounting practices and the Corporation’s
management structure. There is no comprehensive,
authoritative body of guidance for management accounting
equivalent to generally accepted accounting principles;
therefore, PNC’s business results are not necessarily
comparable with similar information for any other financial
services institution. Financial results are presented, to the
extent practicable, as if each business operated on a stand-
alone basis.
The management accounting process uses various
balance sheet and income statement assignments and
transfers to measure performance of the businesses.
Methodologies change from time to time as management
accounting practices are enhanced and businesses change.
Securities available for sale or borrowings and related net
interest income are assigned based on the net asset or liability
position of each business. Capital is assigned based on
management’s assessment of inherent risks and equity levels
at independent companies providing similar products and
services. The allowance for credit losses is allocated based on
management’s assessment of risk inherent in the loan
portfolios. Support areas not directly aligned with the
businesses are allocated primarily based on the utilization of
services.
Total business financial results differ from consolidated
results from continuing operations primarily due to
differences between management accounting practices and
generally accepted accounting principles, equity management
activities, minority interest in income of consolidated entities,
residual asset and liability management activities, unallocated
reserves, eliminations and unassigned items, the impact of
which is reflected in the “Other” category.
The impact of the institutional lending repositioning and
other strategic actions that occurred during 2001, 2000 and
1999 is reflected in the business results.
BUSINESS SEGMENT PRODUCTS AND SERVICES
Regional Community Banking provides deposit, branch-
based brokerage, electronic banking and credit products and
services to retail customers as well as deposit, credit, treasury
management and capital markets products and services to
small businesses primarily within PNC’s geographic region.
Corporate Banking provides credit, equipment leasing,
treasury management and capital markets products and
services primarily to mid-sized corporations and government
entities within PNC’s geographic region.
PNC Real Estate Finance provides credit, capital
markets, treasury management, commercial mortgage loan
servicing and other financial products and services to
developers, owners and investors in commercial real estate.
PNC’s commercial real estate financial services platform
provides processing services through Midland Loan Services,
Inc., a leading third party provider of loan servicing and
technology to the commercial real estate finance industry,
and national syndication of affordable housing equity
through Columbia Housing Partners, LP.
PNC Business Credit provides asset-based lending,
capital markets and treasury management products and
services to middle market customers nationally. PNC
Business Credit’s lending services include loans secured by
accounts receivable, inventory, machinery and equipment,
and other collateral, and its customers include
manufacturing, wholesale, distribution, retailing and service
industry companies.
PNC Advisors provides a full range of tailored
investment products and services to affluent individuals and
families, including full-service brokerage through J.J.B.
Hilliard, W.L. Lyons, Inc. and investment advisory services
to the ultra-affluent through Hawthorn. PNC Advisors also
serves as investment manager and trustee for employee
benefit plans and charitable and endowment assets.
BlackRock is one of the largest publicly traded
investment management firms in the United States with
approximately $239 billion of assets under management at
December 31, 2001. BlackRock manages assets on behalf of
institutions and individuals worldwide through a variety of
fixed income, liquidity and equity mutual funds, separate
accounts and alternative investment products. Mutual funds
include the flagship fund families, BlackRock Funds and
BlackRock Provident Institutional Funds. In addition,
BlackRock provides risk management and investment system
services to institutional investors under the BlackRock
Solutions name.
PFPC is the largest full-service mutual fund transfer
agent and second largest provider of mutual fund accounting
and administration services in the United States, providing a
wide range of fund services to the investment management
industry. PFPC also provides processing solutions to the
international marketplace through its Ireland and
Luxembourg operations.