LENDING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2017

LENDING ACTIVITIES

Composition of Mortgages and other loans receivable

	September 30,			December 31,
(in millions)		2017		2016
Commercial mortgages*	$	27,930	$	25,042
Residential mortgages		4,991		3,828
Life insurance policy loans		2,301		2,367
Commercial loans, other loans and notes receivable		1,212		2,300
Total mortgage and other loans receivable		36,434		33,537
Allowance for credit losses		(345)		(297)
Mortgage and other loans receivable, net	$	36,089	$	33,240

*Commercial mortgages primarily represent loans foroffices, apartments and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 22 percent and 12 percent, respectively, atSeptember 30,2017, and 24 percent and 12 percent, respectively, at December 31,2016).

Schedule of debt service coverage ratio and loan-to-value ratio for the commercial mortgage loans

	Debt Service Coverage Ratios(a)
(in millions)		>1.20X		1.00X - 1.20X		<1.00X		Total
September 30, 2017
Loan-to-Value Ratios(b)
Less than 65%	$	17,040	$	1,960	$	355	$	19,355
65% to 75%		5,466		418		205		6,089
76% to 80%		672		54		53		779
Greater than 80%		1,189		437		81		1,707
Total commercial mortgages	$	24,367	$	2,869	$	694	$	27,930
December 31, 2016
Loan-to-Value Ratios(b)
Less than 65%	$	13,998	$	1,694	$	232	$	15,924
65% to 75%		5,946		575		62		6,583
76% to 80%		1,246		174		47		1,467
Greater than 80%		471		392		205		1,068
Total commercial mortgages	$	21,661	$	2,835	$	546	$	25,042

(a) 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 was 1.8X and 1.9X at September 30,2017 and December 31, 2016, respectively.

(b) The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 58 percent at both September 30,2017, and December 31, 2016.

Schedule of credit quality indicators for the commercial mortgage loans

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total(c)	Total $
September 30, 2017
Credit Quality Performance Indicator:
In good standing	770	$	7,274	$	8,642	$	5,367	$	2,147	$	2,391	$	2,002	$	27,823	100	%
Restructured(a)	3		-		15		4		-		16		-		35	-
90 days or less delinquent	1		-		14		-		-		-		-		14	-
>90 days delinquent or in
process of foreclosure	2		-		40		18		-		-		-		58	-
Total(b)	776	$	7,274	$	8,711	$	5,389	$	2,147	$	2,407	$	2,002	$	27,930	100	%
Allowance for credit losses:
Specific		$	-	$	3	$	31	$	-	$	1	$	-	$	35	-	%
General			61		93		36		8		14		17		229	1
Total allowance for credit losses		$	61	$	96	$	67	$	8	$	15	$	17	$	264	1	%

December 31, 2016
Credit Quality Performance Indicator:
In good standing	784	$	6,005	$	7,830	$	5,179	$	1,898	$	2,373	$	1,589	$	24,874	99	%
Restructured(a)	4		-		134		18		-		16		-		168	1
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total(b)	788	$	6,005	$	7,964	$	5,197	$	1,898	$	2,389	$	1,589	$	25,042	100	%
Allowance for credit losses:
Specific		$	-	$	3	$	1	$	6	$	1	$	-	$	11	-	%
General			35		72		41		7		13		15		183	1
Total allowance for credit losses		$	35	$	75	$	42	$	13	$	14	$	15	$	194	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 2016 Annual Report.

(b)Does not reflect allowance for credit losses.

(c)99.7 percent of the commercial mortgagesheld at such respective dates were current as to payments of principal and interest. There were no significant amounts of nonperforming commercial mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented.

Schedule of changes in the allowance for losses on Mortgage and other loans receivable

	2017						2016
Nine Months Ended September 30,		Commercial		Other				Commercial		Other
(in millions)		Mortgages		Loans		Total		Mortgages		Loans		Total
Allowance, beginning of year	$	194	$	103	$	297	$	171	$	137	$	308
Loans charged off		(5)		(2)		(7)		(13)		(2)		(15)
Recoveries of loans previously charged off		-		-		-		11		-		11
Net charge-offs		(5)		(2)		(7)		(2)		(2)		(4)
Provision for loan losses		75		(20)		55		20		(25)		(5)
Other		-		-		-		-		-		-
Allowance, end of period	$	264 *	$	81	$	345	$	189 *	$	110	$	299

*Of the total allowance, $35million and $11 million relate to individually assessed credit losses on $342 million and $292 million of commercial mortgages at September 30,2017 and 2016, respectively.