COMMERCIAL MORTGAGE LOANS (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Commercial Mortgage Loans Receivable by Origination Year and Key Credit Quality Indicators

The amortized cost basis of the Company's commercial mortgage loan receivables by origination year, net of the allowance, for credit losses is as follows:


	Term Loans Amortized Cost Basis by Origination Year
	2021		2020		2019		2018		2017		Prior		Total
	(Dollars In Millions)
As of September 30, 2021
Commercial mortgage loans:
Performing	$	1,362	$	1,448	$	2,066	$	1,483	$	1,309	$	2,941	$	10,609
Non-performing	—		—		—		—		—		—		—
Amortized cost	1,362		1,448		2,066		1,483		1,309		2,941		10,609
Allowance for credit losses	(8)		(13)		(22)		(18)		(16)		(26)		(103)
Total commercial mortgage loans	$	1,354	$	1,435	$	2,044	$	1,465	$	1,293	$	2,915	$	10,506


	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Total
	(Dollars In Millions)
As of December 31, 2020
Commercial mortgage loans:
Performing	$	1,463	$	2,442	$	1,577	$	1,344	$	943	$	2,458	$	10,227
Non-performing	—		—		—		—		—		1		1
Amortized cost	1,463		2,442		1,577		1,344		943		2,459		10,228
Allowance for credit losses	(21)		(46)		(55)		(37)		(25)		(38)		(222)
Total commercial mortgage loans	$	1,442	$	2,396	$	1,522	$	1,307	$	918	$	2,421	$	10,006

The following tables provide a comparative view of the key credit quality indicators of the Loan-to-Value and Debt Service Coverage Ratio (“DSCR”):


	As of September 30, 2021					As of December 31, 2020
	Amortized Cost		% of Total		DSCR (2)	Amortized Cost		% of Total		DSCR (2)
	(Dollars In Millions)					(Dollars In Millions)
Loan-to-Value(1)
Greater than 75%	$	308	3	%	1.32	$	399	4	%	1.29
50% - 75%	6,946		65	%	1.60	6,557		64	%	1.61
Less than 50%	3,355		32	%	2.03	3,272		32	%	2.01
Total commercial mortgage loans	$	10,609	100	%		$	10,228	100	%

(1) The loan-to-value ratio compares the current unpaid principal of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 54% and 54% at September 30, 2021 and December 31, 2020, respectively.
(2) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio for September 30, 2021 and December 31, 2020 was 1.73x and 1.72x, respectively.

Schedule of Allowance for Credit Losses on Funded and Unfunded Mortgages

The following provides a summary of the rollforward of the allowance for credit losses for funded commercial mortgage loans and unfunded commercial mortgage loan commitments for the periods indicated.


	For The Three Months Ended September 30,				For The Nine Months Ended September 30,
	2021		2020		2021		2020
	(Dollars In Millions)
Allowance for Funded Commercial Mortgage Loan Credit Losses
Beginning balance	$	136	$	173	$	222	$	5
Cumulative effect adjustment	—		—		—		80
Charge offs	—		—		—		—
Recoveries	—		—		(7)		(2)
Provision	(33)		2		(112)		92
Ending balance	$	103	$	175	$	103	$	175

Allowance for Unfunded Commercial Mortgage Loan Commitments Credit Losses
Beginning balance	$	12	$	20	$	22	$	—
Cumulative effect adjustment	—		—		—		11
Charge offs	—		—		—		—
Recoveries	—		—		—		—
Provision	(3)		—		(13)		9
Ending balance	$	9	$	20	$	9	$	20