PNC Bank 2010 Annual Report Download - page 44
Download and view the complete annual report
Please find page 44 of the 2010 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.The unpaid principal balance of purchased impaired loans
declined from $15.2 billion at December 31, 2009 to $9.7
billion at December 31, 2010 due to amounts determined to be
uncollectible, payoffs and disposals. The remaining purchased
impaired mark at December 31, 2010 was $1.9 billion which
was a decline from $4.9 billion at December 31, 2009. The net
investment of $9.8 billion at December 31, 2009 declined 30%
to $6.9 billion at December 31, 2010 primarily due to payoffs,
disposals and further impairment partially offset by accretion
during 2010. At December 31, 2010, our largest individual
purchased impaired loan had a recorded investment of
$22 million.
We currently expect to collect total cash flows of $9.1 billion
on purchased impaired loans, representing the $6.9 billion net
investment at December 31, 2010 and the accretable net
interest of $2.2 billion shown in the Accretable Net Interest-
Purchased Impaired Loans table that follows.
Purchase Accounting Accretion
Year ended December 31
In millions 2010 2009
Non-impaired loans $ 366 $ 773
Impaired loans 885 914
Reversal of contractual interest on impaired
loans (529) (752)
Net impaired loans 356 162
Securities 54 118
Deposits 545 996
Borrowings (155) (250)
Total $1,166 $1,799
In addition to the amounts in the table above, cash received in
excess of recorded investment from sales or payoffs of
impaired commercial loans (cash recoveries) totaled $483
million for 2010 and $204 million for 2009. We do not expect
this level of cash recoveries to be sustainable.
Remaining Purchase Accounting Accretion
In billions
Dec. 31
2008
Dec. 31
2009
Dec. 31
2010
Non-impaired loans $ 2.4 $ 1.6 $ 1.2
Impaired loans 3.7 3.5 2.2
Total loans (gross) 6.1 5.1 3.4
Securities .2 .1 .1
Deposits 2.1 1.0 .5
Borrowings (1.5) (1.2) (1.1)
Total $ 6.9 $ 5.0 $ 2.9
Accretable Net Interest – Purchased Impaired Loans
In billions
January 1, 2009 $ 3.7
Accretion (including cash recoveries) (1.1)
Adjustments resulting from changes in purchase price
allocation .3
Net reclassifications to accretable from non-accretable .8
Disposals (.2)
December 31, 2009 $ 3.5
Accretion (including cash recoveries) (1.4)
Net reclassifications to accretable from non-accretable .3
Disposals (.2)
December 31, 2010 $ 2.2
Net unfunded credit commitments are comprised of the
following:
Net Unfunded Credit Commitments
In millions
Dec. 31
2010
Dec. 31
2009
Commercial / commercial real estate (a) $59,256 $ 60,143
Home equity lines of credit 19,172 20,367
Consumer credit card lines 14,725 17,558
Other 2,652 2,727
Total $95,805 $100,795
(a) Less than 4% of these amounts at each date relate to commercial real estate.
Commitments to extend credit represent arrangements to lend
funds or provide liquidity subject to specified contractual
conditions. Commercial commitments reported above exclude
syndications, assignments and participations, primarily to
financial institutions, totaling $16.7 billion at December 31,
2010 and $13.2 billion at December 31, 2009.
Unfunded credit commitments related to the consolidation of
the Market Street commercial paper conduit (further described
in the Off-Balance Sheet Arrangements and Variable Interest
Entities section of this Item 7) totaled $3.1 billion at
December 31, 2010 and are a component of PNC’s total
unfunded credit commitments. These amounts are included in
the preceding table within the “Commercial / commercial real
estate” category.
Unfunded liquidity facility commitments and standby bond
purchase agreements totaled $458 million at December 31,
2010 and $6.2 billion at December 31, 2009 and are included
in the preceding table primarily within the “Commercial /
commercial real estate” category. Due to the consolidation of
Market Street, $5.7 billion of unfunded liquidity facility
commitments were no longer included in the preceding table
as of December 31, 2010.
In addition to credit commitments, our net outstanding
standby letters of credit totaled $10.1 billion at December 31,
2010 and $10.0 billion at December 31, 2009. Standby letters
of credit commit us to make payments on behalf of our
customers if specified future events occur.
36