LENDING ACTIVITIES

9 Months Ended

Sep. 30, 2015

6. LENDING ACTIVITIES

The following table presents the composition of Mortgage and other loans receivable, net:

	September 30,			December 31,
(in millions)		2015		2014
Commercial mortgages^*	$	20,818	$	18,909
Life insurance policy loans		2,625		2,710
Commercial loans, other loans and notes receivable		4,999		3,642
Total mortgage and other loans receivable		28,442		25,261
Allowance for losses		(206)		(271)
Mortgage and other loans receivable, net	$	28,236	$	24,990

* Commercial mortgages primarily represent loans for offices, retail, apartments and industrial properties, with exposures in California and New York representing the largest geographic concentrations (aggregating approximately 12 percent and 21 percent, respectively, at September 30, 2015, and 14 percent and 18 percent, respectively, at December 31, 2014).

The following table presents the credit quality indicators for commercial mortgages:

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total^(c)	Total $
September 30, 2015
Credit Quality Indicator:
In good standing	956	$	3,628	$	7,375	$	4,435	$	1,980	$	1,972	$	1,030	$	20,420	98	%
Restructured^(a)	9		-		150		25		18		16		6		215	1
90 days or less delinquent	5		-		-		-		6		-		-		6	-
>90 days delinquent or in
process of foreclosure	5		-		177		-		-		-		-		177	1
Total^(b)	975	$	3,628	$	7,702	$	4,460	$	2,004	$	1,988	$	1,036	$	20,818	100	%
Allowance for loan losses		$	29	$	62	$	35	$	14	$	13	$	9	$	162	1	%

December 31, 2014
Credit Quality Indicator:
In good standing	1,007	$	3,384	$	6,100	$	3,807	$	1,689	$	1,660	$	1,812	$	18,452	98	%
Restructured^(a)	7		-		343		7		-		17		-		367	2
90 days or less delinquent	6		-		-		10		-		-		5		15	-
>90 days delinquent or in
process of foreclosure	4		-		75		-		-		-		-		75	-
Total^(b)	1,024	$	3,384	$	6,518	$	3,824	$	1,689	$	1,677	$	1,817	$	18,909	100	%
Allowance for loan losses		$	3	$	86	$	28	$	22	$	6	$	14	$	159	1	%

(a) Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings, see Note 7 to the Consolidated Financial Statements in the 2014 Annual Report.

(b) Does not reflect Allowance for loan losses.

(c) Over 99 percent of the commercial mortgages held at such respective dates were current as to payments of principal and interest.

Allowance for Loan Losses

See Note 7 to the Consolidated Financial Statements in the 2014 Annual Report for a discussion of our accounting policy for evaluating Mortgage and other loans receivable for impairment.

The following table presents a rollforward of the changes in the allowance for losses on Mortgage and other loans receivable:

	2015						2014
Nine Months Ended September 30,		Commercial		Other				Commercial		Other
(in millions)		Mortgages		Loans		Total		Mortgages		Loans		Total
Allowance, beginning of year	$	159	$	112	$	271	$	201	$	111	$	312
Loans charged off		(23)		(6)		(29)		(10)		(13)		(23)
Recoveries of loans previously charged off		4		1		5		-		16		16
Net charge-offs		(19)		(5)		(24)		(10)		3		(7)
Provision for loan losses		22		(66)		(44)		(16)		(6)		(22)
Other		-		3		3		-		1		1
Allowance, end of period	$	162 ^*	$	44	$	206	$	175 ^*	$	109	$	284

* Of the total allowance, $24 million and $86 million relate to individually assessed credit losses on $512 million and $246 million of commercial mortgage loans at September 30, 2015 and 2014, respectively.

During the nine-month periods ended September 30, 2015 and 2014, loans with a carrying value of $42 million and $83 million, respectively, were modified in troubled debt restructurings.