| Schedule of Loan Portfolio and Industry Concentrations of Credit Risk |
The table below provides the details of our loan portfolio.
| | | | | | | | | | Loans | Sept. 30, 2021 | Dec. 31, 2020 | | (in millions) | | Domestic: | | | | Commercial | $ | 1,659 | | $ | 1,356 | | | Commercial real estate | 6,081 | | 6,056 | | | Financial institutions | 4,049 | | 4,495 | | | Lease financings | 297 | | 431 | | Wealth management loans and mortgages | 17,819 | | 16,211 | | | Other residential mortgages | 317 | | 389 | | | Overdrafts | 1,667 | | 651 | | | Other | 2,308 | | 1,823 | | | Margin loans | 17,915 | | 13,141 | | | Total domestic | 52,112 | | 44,553 | | | Foreign: | | | | Commercial | 16 | | 73 | | | Commercial real estate | 311 | | — | | | Financial institutions | 5,399 | | 6,750 | | | Lease financings | 476 | | 559 | | Wealth management loans and mortgages | 168 | | 146 | | | Other (primarily overdrafts) | 2,940 | | 2,113 | | | Margin loans | 2,906 | | 2,275 | | | Total foreign | 12,216 | | 11,916 | | Total loans (a) | $ | 64,328 | | $ | 56,469 | |
(a) Net of unearned income of $247 million at Sept. 30, 2021 and $274 million at Dec. 31, 2020 primarily related to domestic and foreign lease financings.
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| Summary of Transactions in the Allowance for Credit Losses |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the quarter ended Sept. 30, 2021 | Wealth management loans and mortgages | | Other
residential
mortgages | | | | | (in millions) | Commercial | Commercial
real estate | Financial
institutions | Lease
financings | Other | | Total | | Beginning balance | $ | 8 | | $ | 289 | | $ | 7 | | $ | 2 | | $ | 5 | | | $ | 8 | | $ | — | | | $ | 319 | | | | | | | | | | | | | | | | | | | | | | | | | Charge-offs | — | | — | | — | | — | | — | | | — | | — | | | — | | | Recoveries | — | | — | | — | | — | | — | | | 1 | | — | | | 1 | | | Net recoveries | — | | — | | — | | — | | — | | | 1 | | — | | | 1 | | Provision (a) | 2 | | (63) | | 2 | | (1) | | — | | | (3) | | 16 | | | (47) | | Ending balance (b) | $ | 10 | | $ | 226 | | $ | 9 | | $ | 1 | | $ | 5 | | | $ | 6 | | $ | 16 | | | $ | 273 | | | Allowance for: | | | | | | | | | | | | Loan losses | $ | 2 | | $ | 199 | | $ | 5 | | $ | 1 | | $ | 4 | | | $ | 6 | | $ | 16 | | | $ | 233 | | | Lending-related commitments | 8 | | 27 | | 4 | | — | | 1 | | | — | | — | | | 40 | | | Individually evaluated for impairment: | | | | | | | | | | | Loan balance (c) | $ | — | | $ | 25 | | $ | — | | $ | — | | $ | 18 | | | $ | 1 | | $ | 16 | | | $ | 60 | | | Allowance for loan losses | — | | 3 | | — | | — | | — | | | — | | 16 | | | 19 | |
(a) Does not include the provision for credit losses related to other financial instruments of $2 million for the third quarter 2021. (b) Includes $4 million of allowance for credit losses related to foreign loans, primarily financial institutions. (c) Includes collateral-dependent loans of $60 million with $52 million of collateral at fair value.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the quarter ended June 30, 2021 | Wealth management loans and mortgages | | Other
residential
mortgages | | | | | (in millions) | Commercial | Commercial
real estate | Financial
institutions | Lease
financings | | | Total | | | | | | | | | | | | | | | | | | | | | | | | Beginning balance | $ | 11 | | $ | 365 | | $ | 7 | | $ | 2 | | $ | 6 | | | $ | 9 | | | | $ | 400 | | | Charge-offs | — | | — | | — | | — | | — | | | (1) | | | | (1) | | | Recoveries | — | | — | | 2 | | — | | — | | | 1 | | | | 3 | | | Net recoveries | — | | — | | 2 | | — | | — | | | — | | | | 2 | | Provision (a) | (3) | | (76) | | (2) | | — | | (1) | | | (1) | | | | (83) | | Ending balance (b) | $ | 8 | | $ | 289 | | $ | 7 | | $ | 2 | | $ | 5 | | | $ | 8 | | | | $ | 319 | | | Allowance for: | | | | | | | | | | | | Loan losses | $ | 3 | | $ | 248 | | $ | 4 | | $ | 2 | | $ | 4 | | | $ | 8 | | | | $ | 269 | | | Lending-related commitments | 5 | | 41 | | 3 | | — | | 1 | | | — | | | | 50 | | | Individually evaluated for impairment: | | | | | | | | | | | Loan balance (c) | $ | — | | $ | 26 | | $ | — | | $ | — | | $ | 17 | | | $ | 1 | | | | $ | 44 | | | Allowance for loan losses | — | | 3 | | — | | — | | — | | | — | | | | 3 | |
(a) Does not include the provision for credit losses benefit related to other financial instruments of $3 million for the second quarter 2021. (b) Includes $4 million of allowance for credit losses related to foreign loans, primarily financial institutions. (c) Includes collateral-dependent loans of $44 million with $50 million of collateral at fair value. | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the quarter ended Sept. 30, 2020 | Wealth management loans and mortgages | Other
residential
mortgages | | | | | Total | | (in millions) | Commercial | Commercial
real estate | Financial
institutions | Lease
financings | | | | Beginning balance | $ | 40 | | $ | 372 | | $ | 16 | | $ | 3 | | $ | 11 | | $ | 12 | | | | | | $ | 454 | | | | | | | | | | | | | | | | | | | | | | | | | | | Charge-offs | — | | — | | — | | — | | — | | — | | | | | | — | | | Recoveries | — | | — | | — | | — | | — | | 1 | | | | | | 1 | | | Net recoveries | — | | — | | — | | — | | — | | 1 | | | | | | 1 | | Provision (a) | (13) | | 14 | | (5) | | — | | 4 | | 5 | | | | | | 5 | | Ending balance (b) | $ | 27 | | $ | 386 | | $ | 11 | | $ | 3 | | $ | 15 | | $ | 18 | | | | | | $ | 460 | | | Allowance for: | | | | | | | | | | | | | Loan losses | $ | 14 | | $ | 270 | | $ | 7 | | $ | 3 | | $ | 13 | | $ | 18 | | | | | | $ | 325 | | | Lending-related commitments | 13 | | 116 | | 4 | | — | | 2 | | — | | | | | | 135 | | | Individually evaluated for impairment: | | | | | | | | | | | | Loan balance (c) | $ | — | | $ | — | | $ | — | | $ | — | | $ | 17 | | $ | — | | | | | | $ | 17 | | | Allowance for loan losses | — | | — | | — | | — | | — | | — | | | | | | — | |
(a) Does not include the provision for credit losses related to other financial instruments of $4 million for the third quarter 2020. (b) Includes $8 million of allowance for credit losses related to foreign loans, primarily financial institutions. (c) Includes collateral-dependent loans of $17 million with $25 million of collateral at fair value.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the nine months ended Sept. 30, 2021 | Wealth management loans and mortgages | Other
residential
mortgages | Other | | Total | | (in millions) | Commercial | Commercial
real estate | Financial
institutions | Lease
financings | | | Beginning balance | $ | 16 | | $ | 430 | | $ | 10 | | $ | 2 | | $ | 8 | | $ | 13 | | $ | — | | | $ | 479 | | | | | | | | | | | | | | | | | | | | | | | Charge-offs | — | | — | | — | | — | | (1) | | (1) | | — | | | (2) | | | Recoveries | — | | — | | 2 | | — | | — | | 4 | | — | | | 6 | | | Net recoveries (charge-offs) | — | | — | | 2 | | — | | (1) | | 3 | | — | | | 4 | | Provision (a) | (6) | | (204) | | (3) | | (1) | | (2) | | (10) | | 16 | | | (210) | | | Ending balance | $ | 10 | | $ | 226 | | $ | 9 | | $ | 1 | | $ | 5 | | $ | 6 | | $ | 16 | | | $ | 273 | |
(a) Does not include provision for credit losses benefit related to other financial instruments of $4 million for the nine months ended Sept. 30, 2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the nine months ended Sept. 30, 2020 | Wealth management loans and mortgages | Other
residential
mortgages | | Foreign | Total | | (in millions) | Commercial | Commercial
real estate | Financial
institutions | Lease
financings | | Balance at Dec. 31, 2019 | $ | 60 | | $ | 76 | | $ | 20 | | $ | 3 | | $ | 20 | | $ | 13 | | | $ | 24 | | $ | 216 | | Impact of adopting ASU 2016-13 | (43) | | 14 | | (6) | | — | | (12) | | 2 | | | (24) | | (69) | | | Balance at Jan. 1, 2020 | 17 | | 90 | | 14 | | 3 | | 8 | | 15 | | | — | | 147 | | | Charge-offs | — | | — | | — | | — | | — | | — | | | — | | — | | | Recoveries | — | | — | | — | | — | | — | | 4 | | | — | | 4 | | | Net recoveries | — | | — | | — | | — | | — | | 4 | | | — | | 4 | | Provision (a) | 10 | | 296 | | (3) | | — | | 7 | | (1) | | | — | | 309 | | | Ending balance | $ | 27 | | $ | 386 | | $ | 11 | | $ | 3 | | $ | 15 | | $ | 18 | | | $ | — | | $ | 460 | |
(a) Does not include provision for credit losses related to other financial instruments of $12 million for the nine months ended Sept. 30, 2020.
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| Financing Receivable Credit Quality Indicators |
The tables below provide information about the credit profile of the loan portfolio by the period of origination.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Credit profile of the loan portfolio | | | | Sept. 30, 2021 | | | | | | | | Revolving loans | | | | Originated, at amortized cost | Amortized cost | Converted to term loans – Amortized cost | | Accrued
interest
receivable | | (in millions) | YTD21 | 2020 | 2019 | 2018 | 2017 | Prior to 2017 | Total (a) | | Commercial: | | | | | | | | | | | | Investment grade | $ | 401 | | $ | 20 | | $ | — | | $ | — | | $ | 195 | | $ | 57 | | $ | 818 | | $ | — | | $ | 1,491 | | | | Non-investment grade | 90 | | 23 | | — | | — | | — | | — | | 71 | | — | | 184 | | | | Total commercial | 491 | | 43 | | — | | — | | 195 | | 57 | | 889 | | — | | 1,675 | | $ | — | | | Commercial real estate: | | | | | | | | | | | | Investment grade | 1,265 | | 524 | | 793 | | 166 | | 275 | | 651 | | 670 | | — | | 4,344 | | | | Non-investment grade | 613 | | 92 | | 625 | | 355 | | 74 | | 106 | | 157 | | 26 | | 2,048 | | | | Total commercial real estate | 1,878 | | 616 | | 1,418 | | 521 | | 349 | | 757 | | 827 | | 26 | | 6,392 | | 8 | | | Financial institutions: | | | | | | | | | | | | Investment grade | 759 | | — | | — | | — | | — | | 72 | | 6,949 | | — | | 7,780 | | | | Non-investment grade | 45 | | — | | 6 | | — | | — | | — | | 1,617 | | — | | 1,668 | | | | Total financial institutions | 804 | | — | | 6 | | — | | — | | 72 | | 8,566 | | — | | 9,448 | | 10 | | Wealth management loans and mortgages: | | | | | | | | | | | | Investment grade | 67 | | 15 | | 74 | | 4 | | 153 | | 125 | | 9,500 | | — | | 9,938 | | | | Non-investment grade | 2 | | — | | — | | — | | — | | — | | 28 | | — | | 30 | | | | Wealth management mortgages | 1,468 | | 1,036 | | 899 | | 561 | | 944 | | 3,084 | | 27 | | — | | 8,019 | | | Total wealth management loans and mortgages | 1,537 | | 1,051 | | 973 | | 565 | | 1,097 | | 3,209 | | 9,555 | | — | | 17,987 | | 28 | | | Lease financings | 23 | | 81 | | 15 | | 11 | | 4 | | 639 | | — | | — | | 773 | | — | | | Other residential mortgages | — | | — | | — | | — | | — | | 317 | | — | | — | | 317 | | 1 | | | Other loans | — | | — | | — | | — | | — | | — | | 2,362 | | — | | 2,362 | | 1 | | | Margin loans | 6,254 | | 800 | | — | | — | | — | | — | | 13,767 | | — | | 20,821 | | 8 | | | Total loans | $ | 10,987 | | $ | 2,591 | | $ | 2,412 | | $ | 1,097 | | $ | 1,645 | | $ | 5,051 | | $ | 35,966 | | $ | 26 | | $ | 59,775 | | $ | 56 | |
(a) Excludes overdrafts of $4,553 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Credit profile of the loan portfolio | | | | | Dec. 31, 2020 | | | | | | | | Revolving loans | | | | Originated, at amortized cost | Amortized cost | Converted to term loans – Amortized cost | | Accrued
interest
receivable | | (in millions) | 2020 | 2019 | 2018 | 2017 | 2016 | Prior to 2016 | Total (a) | | Commercial: | | | | | | | | | | | | Investment grade | $ | 128 | | $ | 18 | | $ | 71 | | $ | 420 | | $ | 57 | | $ | — | | $ | 493 | | $ | — | | $ | 1,187 | | | | Non-investment grade | 142 | | — | | 6 | | — | | — | | — | | 94 | | — | | 242 | | | | Total commercial | 270 | | 18 | | 77 | | 420 | | 57 | | — | | 587 | | — | | 1,429 | | $ | 2 | | | Commercial real estate: | | | | | | | | | | | | Investment grade | 778 | | 1,010 | | 458 | | 543 | | 312 | | 346 | | 127 | | — | | 3,574 | | | | Non-investment grade | 285 | | 619 | | 643 | | 159 | | 376 | | 144 | | 229 | | 27 | | 2,482 | | | | Total commercial real estate | 1,063 | | 1,629 | | 1,101 | | 702 | | 688 | | 490 | | 356 | | 27 | | 6,056 | | 8 | | | Financial institutions: | | | | | | | | | | | | Investment grade | 132 | | 146 | | 47 | | 125 | | 13 | | 156 | | 8,760 | | — | | 9,379 | | | | Non-investment grade | 84 | | 36 | | — | | — | | — | | — | | 1,746 | | — | | 1,866 | | | | Total financial institutions | 216 | | 182 | | 47 | | 125 | | 13 | | 156 | | 10,506 | | — | | 11,245 | | 12 | | | Wealth management loans and mortgages: | | | | | | | | | | | | Investment grade | 18 | | 85 | | 11 | | 147 | | 59 | | 112 | | 7,786 | | — | | 8,218 | | | | Non-investment grade | — | | — | | — | | — | | — | | — | | 54 | | — | | 54 | | | | Wealth management mortgages | 1,117 | | 1,044 | | 637 | | 1,188 | | 1,515 | | 2,546 | | 38 | | — | | 8,085 | | | | Total wealth management loans and mortgages | 1,135 | | 1,129 | | 648 | | 1,335 | | 1,574 | | 2,658 | | 7,878 | | — | | 16,357 | | 27 | | | Lease financings | 116 | | 18 | | 14 | | 9 | | 20 | | 813 | | — | | — | | 990 | | — | | | Other residential mortgages | — | | — | | — | | — | | — | | 389 | | — | | — | | 389 | | 1 | | | Other loans | — | | — | | — | | — | | — | | — | | 1,904 | | — | | 1,904 | | 1 | | | Margin loans | 4,614 | | — | | — | | — | | — | | — | | 10,802 | | — | | 15,416 | | 8 | | | Total loans | $ | 7,414 | | $ | 2,976 | | $ | 1,887 | | $ | 2,591 | | $ | 2,352 | | $ | 4,506 | | $ | 32,033 | | $ | 27 | | $ | 53,786 | | $ | 59 | |
(a) Excludes overdrafts of $2,683 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.
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