6. Lending Activities

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

	June 30,			December 31,
(in millions)		2018		2017
Commercial mortgages^*	$	30,888	$	28,596
Residential mortgages		6,200		5,398
Life insurance policy loans		2,192		2,295
Commercial loans, other loans and notes receivable		1,054		1,056
Total mortgage and other loans receivable		40,334		37,345
Allowance for credit losses		(356)		(322)
Mortgage and other loans receivable, net	$	39,978	$	37,023

* Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 22 percent and 11 percent, respectively, at June 30, 2018, and 23 percent and 12 percent, respectively, at December 31, 2017).

Credit Quality of Commercial Mortgages

The following table presents debt service coverage ratios and loan-to-value ratios for commercial mortgages:

	Debt Service Coverage Ratios^(a)
(in millions)		>1.20X		1.00X - 1.20X		<1.00X		Total
June 30, 2018
Loan-to-Value Ratios^(b)
Less than 65%	$	18,043	$	2,554	$	305	$	20,902
65% to 75%		7,515		202		220		7,937
76% to 80%		1,154		23		-		1,177
Greater than 80%		614		203		55		872
Total commercial mortgages	$	27,326	$	2,982	$	580	$	30,888

December 31, 2017
Loan-to-Value Ratios^(b)
Less than 65%	$	18,000	$	1,525	$	351	$	19,876
65% to 75%		6,038		193		184		6,415
76% to 80%		569		40		-		609
Greater than 80%		1,416		206		74		1,696
Total commercial mortgages	$	26,023	$	1,964	$	609	$	28,596

(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 2.0X and 2.1X at June 30, 2018 and December 31, 2017, 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 and 57 percent at June 30, 2018, and December 31, 2017, respectively.

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total^(c)	Total $
June 30, 2018
Credit Quality Performance
Indicator:
In good standing	765	$	9,449	$	9,276	$	5,048	$	2,625	$	2,424	$	1,932	$	30,754	100	%
Restructured^(a)	4		-		114		4		-		16		-		134	-
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total^(b)	769	$	9,449	$	9,390	$	5,052	$	2,625	$	2,440	$	1,932	$	30,888	100	%
Allowance for credit losses:
Specific		$	-	$	2	$	1	$	-	$	1	$	-	$	4	-	%
General			90		107		36		10		16		19		278	1
Total allowance for credit losses		$	90	$	109	$	37	$	10	$	17	$	19	$	282	1	%

December 31, 2017
Credit Quality Performance
Indicator:
In good standing	778	$	8,163	$	8,585	$	5,338	$	2,023	$	2,373	$	1,960	$	28,442	99	%
Restructured^(a)	5		-		115		23		-		16		-		154	1
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total^(b)	783	$	8,163	$	8,700	$	5,361	$	2,023	$	2,389	$	1,960	$	28,596	100	%
Allowance for credit losses:
Specific		$	-	$	3	$	1	$	-	$	1	$	-	$	5	-	%
General			72		94		37		6		15		18		242	1
Total allowance for credit losses		$	72	$	97	$	38	$	6	$	16	$	18	$	247	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 2017 Annual Report.

(b) Does not reflect allowance for credit losses.

(c) Our commercial mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. 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.

Allowance for Credit Losses

For a discussion of our accounting policy for evaluating Mortgage and other loans receivable for impairment see Note 7 to the Consolidated Financial Statements in the 2017 Annual Report

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

	2018						2017
Six Months Ended June 30,		Commercial		Other				Commercial		Other
(in millions)		Mortgages		Loans		Total		Mortgages		Loans		Total
Allowance, beginning of year	$	247	$	75	$	322	$	194	$	103	$	297
Loans charged off		(16)		-		(16)		(5)		(2)		(7)
Recoveries of loans previously charged off		-		-		-		-		-		-
Net charge-offs		(16)		-		(16)		(5)		(2)		(7)
Provision for loan losses		51		(1)		50		37		(20)		17
Other		-		-		-		-		-		-
Allowance, end of period	$	282 ^*	$	74	$	356	$	226 ^*	$	81	$	307

* Of the total allowance, $5 million and $35 million relate to individually assessed credit losses on $60 million and $289 million of commercial mortgages at June 30, 2018 and 2017, respectively.

There were no loans modified in troubled debt restructurings during the six-month period ended June 30, 2018. During the six-month period ended June 30, 2017, loans with a carrying value of $21 million were modified in troubled debt restructurings.