PNC Bancorp, Inc. Successor to First National Pennsylvania Corporation, et al. - Page 19

                                         19                                           
               Some of the deferred costs recorded in the UFB ledger                  
          accounts were based on standard cost surveys performed by UFB for           
          the purpose of complying with SFAS 91.  Different standard cost             
          amounts were determined by UFB for subcategories of loans within            
          a general category.  For example, with respect to consumer loans            
          originated in 1991 and 1992, different standard cost amounts were           
          determined for unsecured consumer loans, secured consumer loans             
          for which UFSB performed an appraisal, and secured consumer loans           
          for which an outside third party performed an appraisal.  Except            
          with respect to records maintained in connection with its                   
          standard cost surveys, UFB did not maintain time records                    
          reflecting the amount of time UFSB employees spent working on               
          individual consumer lending transactions.  UFB likewise did not             
          maintain records summarizing actual expenditures for items such             
          as supplies, telephone calls, credit reports, property reports,             
          title searches, recording fees and attorney's fees with respect             
          to individual consumer lending transactions.                                
               The fees and costs recorded in the UFB ledger accounts were            
          deferred and recognized as a component of interest income over              
          the estimated expected life (not the contractual life) of the               
          loans to which they related in accordance with SFAS 91.  For                
          Federal income tax purposes, the amounts recorded in the UFB                
          ledger accounts were reported by UFB as current items of income             
          or expense.  The Schedules M-1 filed with UFB's Forms 1120 for              
          the periods in question reflect that the net amount of the costs            
          and fees recorded in the UFB ledger accounts was deferred and               



Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011