PNC Financial Services Group Inc., which recently purchased District-based Riggs Bank, plans to invest $1.15 billion over five years in loans for small businesses and housing in the Washington area, the bank is scheduled to announce today.

Pittsburgh-based PNC is pledging $678 million in small-business loans in the Washington area, focusing on minority-owned businesses in lower-income areas such as Southeast Washington. The bank has set targets of at least $174 million in housing loans for borrowers with household incomes under $60,000 and $175 million in loans for community development projects and multifamily housing projects. The bank will also invest $122.5 million with local community partners, in the form of grants and housing tax credits.

The amount pledged is more than what Riggs used to invest in loans and housing, said Craig Pascal, territory manager of community development banking at PNC. For instance, he said Riggs used to lend less than $10 million a year to small businesses in the Washington area, whereas the new bank is planning to lend more than $100 million each year.

"The strength of an $80 billion company compared with a $5 billion company, that's where we feel we can have an impact," Pascal said.

Pledging money for small-business and housing loans is a good business opportunity for PNC, he added. "Studies have shown there are great untapped markets in low- and moderate-income communities," Pascal said.

The announcement comes at a time when banks are competing to underwrite loans for low-income residents as property prices go up, said Barbara Lang, president and chief executive of the DC Chamber of Commerce.

"We have a problem in this city on the affordable housing stock available for workers," Lang said. "[PNC officials] see that as a business opportunity. At the same time, they can make a commitment to the community and be seen as someone that is leading the way."

Banks are required by federal law to lend money to low- and moderate-income communities under the Community Reinvestment Act of 1977. The Office of the Comptroller of the Currency, the entity that evaluates whether PNC follows the law, gave the bank an "outstanding" rating, the highest out of five, in its last review on April 15, 2002. It will receive its next rating in 2006.

Other banks have also invested money in the Washington area. Bank of America said it has issued $12.9 billion in loans for small businesses, housing and community development over the past six years.

PNC plans to announce today it will invest $1.15 billion in the Washington area over five years.