PNC Bank 2002 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2002 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 117

  • 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
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

39
Equity management (private equity activities) net losses on
portfolio investments were $51 million in 2002 compared with
net losses of $179 million in 2001. See Equity Management
Asset Valuation in the Critical Accounting Policies And
Judgments section of this Financial Review for further
information.
Net securities gains were $89 million for 2002 compared
with $131 million for 2001.
Other noninterest income totaled $303 million for 2002
compared with $306 million for 2001. Other noninterest
income for 2002 included a $28 million benefit resulting from
a reduction in the put option liability related to the NBOC
acquisition, a $14 million gain on the sale of a real estate
investment and a lower level of asset write-downs compared
with the prior year. The impact of these items was more than
offset by lower revenue from trading activities in 2002 and
lower gains related to securitizations in 2002. Net trading
income included in other noninterest income was $91 million
for 2002 compared with $142 million in 2001. See Note 8
Trading Activities for further information. Gains from
securitization transactions totaled $12 million in 2002
compared with $31 million in 2001. See Note 15
Securitizations for further information.
NONINTEREST EXPENSE
Total noninterest expense was $3.227 billion for 2002
compared with $3.414 billion for 2001, a decline of $187
million. Noninterest expense for 2001 included the impact of
charges totaling $135 million in connection with the vehicle
leasing business including exit costs and additions to reserves
related to insured residual value exposures, integration and
severance costs of $56 million related to other strategic
initiatives, and goodwill amortization expense of $117 million.
Excluding these items, noninterest expense increased $121
million in 2002 compared with the prior year. The increase in
noninterest expense in 2002 was primarily attributable to
increases of $29 million, $25 million and $24 million at
BlackRock, PFPC and PNC Business Credit, respectively.
These increases reflected higher operating expenses to support
revenue growth at PNC Business Credit and BlackRock and
new product support at PFPC. In addition, noninterest
expense for 2002 included $30 million of legal and consulting
fees related to regulatory compliance and legal proceedings.
Partially offsetting these increases in 2002 was the benefit of a
$19 million reduction in facilities consolidation reserves at
PFPC. The PFPC reserves were originally established in 2001
as part of the other strategic initiatives referred to above and
are primarily related to a previously announced plan to
consolidate selected facilities. The facilities strategy has been
modified and certain originally contemplated relocations will
not occur.