PNC Bank 2015 Annual Report Download - page 144

N OTE 3A SSET Q UALITY
We closely monitor economic conditions and loan
performance trends to manage and evaluate our exposure to
credit risk. Trends in delinquency rates may be a key
indicator, among other considerations, of credit risk within the
loan portfolios. The measurement of delinquency status is
based on the contractual terms of each loan. Loans that are 30
days or more past due in terms of payment are considered
delinquent. Loan delinquencies exclude loans held for sale,
purchased impaired loans, nonperforming loans and loans
accounted for under the fair value option which are on
nonaccrual status, but include government insured or
guaranteed loans and accruing loans accounted for under the
fair value option.
Nonperforming assets include nonperforming loans and
leases, OREO and foreclosed assets, and nonperforming
TDRs. Nonperforming loans are those loans accounted for at
amortized cost whose credit quality has deteriorated to the
extent that full collection of contractual principal and interest
is not probable. Interest income is not recognized on these
loans. Loans accounted for under the fair value option are
reported as performing loans as these loans are accounted for
at fair value. However, when nonaccrual criteria is met,
interest income is not recognized on these loans. Additionally,
certain government insured or guaranteed loans for which we
expect to collect substantially all principal and interest are not
reported as nonperforming loans and continue to accrue
interest. Purchased impaired loans are excluded from
nonperforming loans as we are currently accreting interest
income over the expected life of the loans. See Note 4
Purchased Loans for further information.
See Note 1 Accounting Policies for additional delinquency,
nonperforming, and charge-off information.
126 The PNC Financial Services Group, Inc. – Form 10-K