4.Bank Loans and Related Allowance for Loan Losses

The composition of bank loans by loan segment is as follows:


	March 31,		December 31,
	2015		2014
Residential real estate mortgages	$	8,172	$	8,127
Home equity loans and lines of credit		2,878		2,955
Personal loans secured by securities		2,549		2,320
Other		42		39
Total bank loans (1)		13,641		13,441
Allowance for loan losses		(38)		(42)
Total bank loans – net	$	13,603	$	13,399

(1)	All loans are evaluated for impairment by loan segment.

The Company has commitments to extend credit related to unused home equity lines of credit (HELOCs), personal loans secured by securities, and other lines of credit, which totaled $6.9 billion and $6.7 billion at March 31, 2015 and December 31, 2014, respectively. All of the personal loans were fully collateralized by securities with fair values in excess of borrowings at March 31, 2015 and December 31, 2014.

Schwab Bank provides a co-branded loan origination program for Schwab Bank clients (the Program) with Quicken Loans, Inc. (Quicken Loans®). Pursuant to the Program, Quicken Loans originates and services first lien residential real estate mortgage loans (First Mortgages) and HELOCs for Schwab Bank clients. Under the Program, Schwab Bank purchases certain First Mortgages and HELOCs that are originated by Quicken Loans. Schwab Bank purchased First Mortgages of $440 million and $286 million during the first quarters of 2015 and 2014, respectively. Schwab Bank purchased HELOCs with commitments of $117 million and $172 million during the first quarters of 2015 and 2014, respectively.

Credit Quality

Changes in the allowance for loan losses were as follows:


Three Months Ended	March 31, 2015							March 31, 2014
	Residential		Home Equity					Residential		Home Equity
	Real Estate		Loans and					Real Estate		Loans and
	Mortgages		Lines of Credit			Total		Mortgages		Lines of Credit			Total
Balance at beginning of period	$	29		$	13	$	42	$	34		$	14	$	48
Charge-offs		-			(1)		(1)		(1)			(1)		(2)
Recoveries		-			1		1		-			1		1
Provision for loan losses		(3)			(1)		(4)		-			1		1
Balance at end of period	$	26		$	12	$	38	$	33		$	15	$	48

The delinquency and nonaccrual analysis by loan class is as follows:


									>90 days past			Total past due
			30-59 days			60-89 days			due and other			and other			Total
March 31, 2015	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans
Residential real estate mortgages	$	8,140		$	9		$	1		$	22		$	32	$	8,172
Home equity loans and lines of credit		2,865			3			1			9			13		2,878
Personal loans secured by securities		2,549			-			-			-			-		2,549
Other		42			-			-			-			-		42
Total bank loans	$	13,596		$	12		$	2		$	31		$	45	$	13,641


									>90 days past			Total past due
			30-59 days			60-89 days			due and other			and other			Total
December 31, 2014	Current		past due			past due			nonaccrual loans			nonaccrual loans			loans
Residential real estate mortgages	$	8,092		$	9		$	2		$	24		$	35	$	8,127
Home equity loans and lines of credit		2,942			1			1			11			13		2,955
Personal loans secured by securities		2,320			-			-			-			-		2,320
Other		38			1			-			-			1		39
Total bank loans	$	13,392		$	11		$	3		$	35		$	49	$	13,441

There were no loans accruing interest that were contractually 90 days or more past due at March 31, 2015 or December 31, 2014. Nonperforming assets, which include nonaccrual loans and other real estate owned, totaled $40 million and $44 million at March 31, 2015 and December 31, 2014, respectively. Troubled debt restructurings were not material at March 31, 2015 or December 31, 2014.

In addition to monitoring delinquency, the Company monitors the credit quality of residential real estate mortgages and HELOCs by stratifying the portfolios by the year of origination, borrower FICO scores at origination (Origination FICO), updated borrower FICO scores (Updated FICO), loan-to-value (LTV) ratios at origination (Origination LTV), and estimated current LTV ratios (Estimated Current LTV), as presented in the following tables. Borrowers’ FICO scores are provided by an independent third-party credit reporting service and were last updated in March 2015. The Origination LTV and Estimated Current LTV ratios for a HELOC include any first lien mortgage outstanding on the same property at the time of the HELOC’s origination. The Estimated Current LTV for each loan is estimated by reference to a home price appreciation index.


			Weighted				Percent of Loans
			Average		Utilization		that are on
March 31, 2015	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,128		776	N/A			0.02	%
>70% – <90%		938		767	N/A			0.47	%
>90% – <100%		56		741	N/A			2.27	%
>100%		50		728	N/A			10.88	%
Total	$	8,172		774	N/A			0.16	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,225		774	36	%		0.08	%
>70% – <90%		504		764	48	%		0.30	%
>90% – <100%		83		754	61	%		0.73	%
>100%		66		743	61	%		1.12	%
Total	$	2,878		771	38	%		0.16	%

(1)	The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.


	Residential		Home Equity
	Real Estate		Loans and
March 31, 2015	Mortgages		Lines of Credit
Year of origination
Pre-2011	$	1,066	$	2,161
2011		545		129
2012		2,007		139
2013		2,920		243
2014		1,208		184
2015		426		22
Total	$	8,172	$	2,878
Origination FICO
<620	$	10	$	1
620 – 679		95		17
680 – 739		1,367		530
>740		6,700		2,330
Total	$	8,172	$	2,878
Origination LTV
<70%	$	5,644	$	1,932
>70% – <90%		2,512		926
>90% – <100%		16		20
Total	$	8,172	$	2,878


			Weighted				Percent of Loans
			Average		Utilization		that are on
December 31, 2014	Balance		Updated FICO		Rate (1)		Nonaccrual Status
Residential real estate mortgages:
Estimated Current LTV
<70%	$	7,131		774	N/A			0.04	%
>70% – <90%		882		765	N/A			0.50	%
>90% – <100%		61		740	N/A			2.95	%
>100%		53		726	N/A			10.95	%
Total	$	8,127		773	N/A			0.18	%
Home equity loans and lines of credit:
Estimated Current LTV
<70%	$	2,282		773	36	%		0.08	%
>70% – <90%		526		762	48	%		0.34	%
>90% – <100%		81		749	61	%		1.67	%
>100%		66		742	63	%		1.54	%
Total	$	2,955		769	39	%		0.20	%

(1)	The Utilization Rate is calculated using the outstanding HELOC balance divided by the associated total line of credit.

N/A Not applicable.


	Residential		Home Equity
	Real Estate		Loans and
December 31, 2014	Mortgages		Lines of Credit
Year of origination
Pre-2011	$	1,119	$	2,244
2011		588		137
2012		2,107		147
2013		3,047		250
2014		1,266		177
Total	$	8,127	$	2,955
Origination FICO
<620	$	10	$	-
620 – 679		97		18
680 – 739		1,366		549
>740		6,654		2,388
Total	$	8,127	$	2,955
Origination LTV
<70%	$	5,572	$	1,979
>70% – <90%		2,538		955
>90% – <100%		17		21
Total	$	8,127	$	2,955