PNC Bank 2012 Annual Report Download - page 62

Table 4: Details Of Loans
In millions
December 31
2012
December 31
2011
Commercial Lending
Commercial
Retail/wholesale trade $ 13,801 $ 11,539
Manufacturing 13,856 11,453
Service providers 12,095 9,717
Real estate related (a) 10,616 8,488
Financial services 9,026 6,646
Health care 7,267 5,068
Other industries 16,379 12,783
Total commercial 83,040 65,694
Commercial real estate
Real estate projects (b) 12,347 10,640
Commercial mortgage 6,308 5,564
Total commercial real estate 18,655 16,204
Equipment lease financing 7,247 6,416
Total Commercial Lending (c) 108,942 88,314
Consumer Lending
Home equity
Lines of credit 23,576 22,491
Installment 12,344 10,598
Total home equity 35,920 33,089
Residential real estate
Residential mortgage 14,430 13,885
Residential construction 810 584
Total residential real estate 15,240 14,469
Credit card 4,303 3,976
Other consumer
Education 8,238 9,582
Automobile 8,708 5,181
Other 4,505 4,403
Total Consumer Lending 76,914 70,700
Total loans $185,856 $159,014
(a) Includes loans to customers in the real estate and construction industries.
(b) Includes both construction loans and intermediate financing for projects.
(c) Construction loans with interest reserves and A/B Note restructurings are not
significant to PNC.
Total loans above include purchased impaired loans of $7.4
billion, or 4% of total loans, at December 31, 2012, and $6.7
billion, or 4% of total loans, at December 31, 2011.
We are committed to providing credit and liquidity to
qualified borrowers. Total loan originations and new
commitments and renewals totaled $157.0 billion for 2012.
Our loan portfolio continued to be diversified among
numerous industries, types of businesses and consumers
across our principal geographic markets.
The Allowance for Loan and Lease Losses (ALLL) and the
Allowance for Unfunded Loan Commitments and Letters of
Credit are sensitive to changes in assumptions and judgments
and are inherently subjective as they require material
estimates, all of which may be susceptible to significant
change, including, among others:
• Probability of default,
• Loss given default,
• Exposure at date of default (EAD),
• Movement through delinquency stages,
• Amounts and timing of expected cash flows,
• Value of collateral, and
• Qualitative factors, such as changes in current
economic conditions, that may not be reflected in
historical results.
H
IGHER R ISK L OANS
Our total ALLL of $4.0 billion at December 31, 2012
consisted of $1.8 billion and $2.2 billion established for the
commercial lending and consumer lending categories,
respectively. The ALLL included what we believe to be
appropriate loss coverage on higher risk loans in the
commercial and consumer portfolios. We do not consider
government insured or guaranteed loans to be higher risk as
defaults have historically been materially mitigated by
payments of insurance or guarantee amounts for approved
claims. Additional information regarding our higher risk loans
is included in the Credit Risk Management portion of the Risk
Management section of this Item 7 and in Note 5 Asset
Quality and Note 7 Allowances for Loan and Lease Losses
and Unfunded Loan Commitments and Letters of Credit in the
Notes To Consolidated Financial Statements included in
Item 8 of this Report.
P URCHASE A CCOUNTING A CCRETION AND V ALUATION OF
P URCHASED I MPAIRED L OANS
Information related to purchase accounting accretion and
valuation of purchased impaired loans for 2012 and 2011
follows. Additional information is provided in Note 6
Purchased Loans in the Notes To Consolidated Financial
Statements included in Item 8 of this Report.
The PNC Financial Services Group, Inc. – Form 10-K 43