PNC Bank 2014 Annual Report Download - page 145

Table 59: Non-Consolidated VIEs
In millions
Aggregate
Assets
Aggregate
Liabilities
PNC Risk
of Loss (a)
Carrying Value of
Assets Owned by PNC
Carrying Value of
Liabilities Owned by PNC
December 31, 2014
Commercial Mortgage-Backed Securitizations (b) $ 53,436 $ 53,436 $1,550 $1,550 (d) $ 1 (f)
Residential Mortgage-Backed Securitizations (b) 62,236 62,236 3,385 3,385 (d) 4 (f)
Tax Credit Investments and Other (c) 7,493 2,933 2,270 2,304 (e) 777 (g)
Total $123,165 $118,605 $7,205 $7,239 $782
In millions
Aggregate
Assets
Aggregate
Liabilities
PNC Risk
of Loss (a)
Carrying Value of
Assets Owned by PNC
Carrying Value of
Liabilities Owned by PNC
December 31, 2013
Commercial Mortgage-Backed Securitizations (b) $ 65,757 $ 65,757 $1,747 $1,747 (d)
Residential Mortgage-Backed Securitizations (b) 37,962 37,962 4,171 4,171 (d) $ 5 (f)
Tax Credit Investments and Other (c) (h) 7,086 2,622 2,030 2,055 (e) 826 (g)
Total $110,805 $106,341 $7,948 $7,973 $831
(a) This represents loans, investments and other assets related to non-consolidated VIEs, net of collateral (if applicable). Our total exposure related to our involvement in loan sale and
servicing activities is disclosed in Table 56. Additionally, we also invest in other mortgage and asset-backed securities issued by third-party VIEs with which we have no continuing
involvement. Further information on these securities is included in Note 6 Investment Securities and values disclosed represent our maximum exposure to loss for those securities’
holdings.
(b) Amounts reflect involvement with securitization SPEs where PNC transferred to and/or services loans for an SPE and we hold securities issued by that SPE. Asset amounts equal
outstanding liability amounts of the SPEs due to limited availability of SPE financial information.
(c) Aggregate assets and aggregate liabilities are based on limited availability of financial information associated with certain acquired partnerships and certain LLCs engaged in solar
power generation to which PNC provides lease financing. The aggregate assets and aggregate liabilities of LLCs engaged in solar power generation may not be reflective of the size of
these VIEs due to differences in classification of leases by these entities.
(d) Included in Trading securities, Investment securities, Other intangible assets and Other assets on our Consolidated Balance Sheet.
(e) Included in Loans, Equity investments and Other assets on our Consolidated Balance Sheet.
(f) Included in Other liabilities on our Consolidated Balance Sheet.
(g) Included in Deposits and Other liabilities on our Consolidated Balance Sheet.
(h) PNC Risk of Loss and Carrying Value of Assets Owned by PNC have been updated to reflect the first quarter 2014 adoption of ASU 2014-01 related to investments in low income
housing tax credits.
Credit Card Securitization Trust
We were the sponsor of several credit card securitizations
facilitated through a trust. This bankruptcy-remote SPE was
established to purchase credit card receivables from the
sponsor and to issue and sell asset-backed securities created
by it to independent third-parties. The SPE was financed
primarily through the sale of these asset-backed securities.
These transactions were originally structured to provide
liquidity and to afford favorable capital treatment.
Our continuing involvement in these securitization
transactions consisted primarily of holding certain retained
interests and acting as the primary servicer. We consolidated
the SPE as we were deemed the primary beneficiary of the
entity based upon our level of continuing involvement. Our
role as primary servicer gave us the power to direct the
activities of the SPE that most significantly affect its
economic performance and our holding of retained interests
gave us the obligation to absorb expected losses, or the ability
to receive residual returns that could be potentially significant
to the SPE. The underlying assets of the consolidated SPE
were restricted only for payment of the beneficial interests
issued by the SPE. Additionally, creditors of the SPE have no
direct recourse to PNC.
During the first quarter of 2012, the last series issued by the
SPE, Series 2007-1, matured. At December 31, 2014, the SPE
continued to exist and we consolidated the entity as we
continued to be the primary beneficiary of the SPE through
our holding of seller’s interest and our role as the primary
servicer.
Tax Credit Investments and Other
We make certain equity investments in various tax credit
limited partnerships or limited liability companies (LLCs).
The purpose of these investments is to achieve a satisfactory
return on capital and to assist us in achieving goals associated
with the Community Reinvestment Act.
Also, we are a national syndicator of affordable housing
equity. In these syndication transactions, we create funds in
which our subsidiaries are the general partner or managing
member and sell limited partnership or non-managing member
interests to third parties. In some cases PNC may also
purchase a limited partnership or non-managing member
interest in the fund. The purpose of this business is to generate
income from the syndication of these funds, generate servicing
fees by managing the funds, and earn tax credits to reduce our
tax liability. General partner or managing member activities
include identifying, evaluating, structuring, negotiating, and
closing the fund investments in operating limited partnerships
or LLCs, as well as oversight of the ongoing operations of the
fund portfolio.
Typically, the general partner or managing member will be the
party that has the right to make decisions that will most
The PNC Financial Services Group, Inc. – Form 10-K 127