PNC Bank 2002 Annual Report Download - page 43

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41
See 2001 Strategic Repositioning in the Risk Factors
section of this Financial Review for additional information
regarding certain risks associated with executing these
strategies.
LOANS
Loans were $35.5 billion at December 31, 2002 compared with
$38.0 billion at December 31, 2001. The decline of $2.5 billion
from the prior year was due to the impact of residential
mortgage loan prepayments and sales, transfers to held for sale
and the managed reduction of institutional loans, which more
than offset the impact in 2002 of the NBOC acquisition and
growth in home equity loans.
Details Of Loans
December 31 - in millions 2002 2001
Commercial
Retail/wholesale $4,161 $3,856
Manufacturing 3,454 3,352
Service providers 1,906 2,136
Real estate related 1,481 1,720
Financial services 1,218 1,362
Communications 124 139
Health care 458 517
Other 2,185 2,123
Total commercial 14,987 15,205
Commercial real estate
Real estate projects 1,750 1,780
Mortgage 517 592
Total commercial real estate 2,267 2,372
Consumer
Home equity 8,108 7,016
Automobile 484 773
Other 1,262 1,375
Total consumer 9,854 9,164
Residential mortgage 3,921 6,395
Lease financing
Equipment 3,560 3,356
Vehicle 1,521 2,201
Total lease financing 5,081 5,557
Other 415 445
Unearned income (1,075) (1,164)
Total, net of unearned income $35,450 $37,974
Loan portfolio composition continued to be diversified across
PNC’s footprint among numerous industries and types of
businesses. At December 31, 2002, loans of $35.5 billion
included $1.4 billion of vehicle leases, net of unearned income,
and $4 million of commercial loans that have been designated for
exit.
LOANS HELD FOR SALE
Loans held for sale totaled $1.6 billion at December 31, 2002,
a decline of $2.6 billion, or 62%, from the balance at
December 31, 2001. See 2001 Strategic Repositioning in this
Financial Review for further information regarding the
institutional lending held for sale portfolio, which accounted
for $2.3 billion of the decline from the prior year. Education
loans classified as held for sale declined $.3 billion to $1.0
billion at December 31, 2002. Substantially all education loans
are classified as held for sale. Approximately $72 million of
loans held at December 31, 2002 by companies formed with
American International Group, Inc. (“AIG”) are classified as
loans held for sale in the consolidated financial statements,
compared with $276 million of such loans at December 31,
2001. See Note 32 Subsequent Event.
Details Of Loans Held For Sale
December 31 - in millions 2002 2001
Institutional lending repositioning
Commercial
Manufacturing $126 $810
Communications 32 690
Health care 21 73
Financial services 17 40
Service providers 16 333
Retail/wholesale 12 114
Real estate related 230
Other 27 223
Total commercial 253 2,313
Commercial real estate 45 248
Lease financing 7
T
otal institutional lendin
g
re
p
ositionin
g
298 2,568
Education loans 1,035 1,340
Other 274 281
Total loans held for sale $1,607 $4,189
See Critical Accounting Policies And Judgments in the Risk
Factors section of this Financial Review for additional
information regarding loans held for sale.
NONPERFORMING, PAST DUE AND POTENTIAL
PROBLEM ASSETS
Nonperforming assets include nonaccrual loans, troubled debt
restructurings, nonaccrual loans held for sale and foreclosed
assets. In addition, certain performing assets have interest
payments that are past due or have the potential for future
repayment problems.