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LENDING ACTIVITIES (Tables)
 9 Months Ended
Sep. 30, 2021
LENDING ACTIVITIES  
Composition of Mortgages and other loans receivable

 

September 30,

 

December 31,

(in millions)

 

2021

 

2020

Commercial mortgages(a)

$

35,980

$

36,424

Residential mortgages

 

4,808

 

4,645

Life insurance policy loans

 

1,876

 

1,986

Commercial loans, other loans and notes receivable

 

3,798

 

3,321

Total mortgage and other loans receivable

 

46,462

 

46,376

Allowance for credit losses(b)

 

(641)

 

(814)

Mortgage and other loans receivable, net

$

45,821

$

45,562

(a)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 10 percent, respectively, at September 30, 2021 and 24 percent and 10 percent, respectively, at December 31, 2020).(b)Does not include allowance for credit losses of $83 million and $79 million, respectively, at September 30, 2021 and December 31, 2020, in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities.
Schedule of debt service coverage ratio and loan-to-value ratio for the commercial mortgage loans

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2021

 

2020

 

2019

 

2018

 

2017

 

Prior

 

Total

>1.2X

$

1,466

$

1,827

$

5,082

$

4,592

$

3,709

$

12,977

$

29,653

1.00 - 1.20X

 

526

 

868

 

752

 

667

 

181

 

1,219

 

4,213

<1.00X

 

1

 

27

 

-

 

957

 

88

 

1,041

 

2,114

Total commercial mortgages

$

1,993

$

2,722

$

5,834

$

6,216

$

3,978

$

15,237

$

35,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2020

 

2019

 

2018

 

2017

 

2016

 

Prior

 

Total

>1.2X

$

1,914

$

5,596

$

5,649

$

3,941

$

4,592

$

10,730

$

32,422

1.00 - 1.20X

 

770

 

467

 

456

 

144

 

161

 

1,106

 

3,104

<1.00X

 

4

 

86

 

343

 

87

 

96

 

282

 

898

Total commercial mortgages

$

2,688

$

6,149

$

6,448

$

4,172

$

4,849

$

12,118

$

36,424

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2021

 

2020

 

2019

 

2018

 

2017

 

Prior

 

Total

Less than 65%

$

1,304

$

2,365

$

3,484

$

4,232

$

2,641

$

10,780

$

24,806

65% to 75%

 

355

 

331

 

2,331

 

1,984

 

1,010

 

3,346

 

9,357

76% to 80%

 

-

 

-

 

19

 

-

 

153

 

531

 

703

Greater than 80%

 

334

 

26

 

-

 

-

 

174

 

580

 

1,114

Total commercial mortgages

$

1,993

$

2,722

$

5,834

$

6,216

$

3,978

$

15,237

$

35,980

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2020

 

2019

 

2018

 

2017

 

2016

 

Prior

 

Total

Less than 65%

$

2,382

$

3,755

$

3,855

$

2,565

$

2,852

$

8,145

$

23,554

65% to 75%

 

274

 

2,330

 

2,363

 

1,306

 

1,200

 

2,551

 

10,024

76% to 80%

 

28

 

45

 

30

 

-

 

70

 

515

 

688

Greater than 80%

 

4

 

19

 

200

 

301

 

727

 

907

 

2,158

Total commercial mortgages

$

2,688

$

6,149

$

6,448

$

4,172

$

4,849

$

12,118

$

36,424

(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 at September 30, 2021 and 2.2X at December 31, 2020. The debt service coverage ratios have been updated within the last 12 months. The debt service coverage ratios are updated when additional relevant information becomes available.

 

(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 September 30, 2021 and was 60 percent at December 31, 2020. The loan-to-value ratios have been updated within the last three to nine months.

 
Schedule of credit quality performance indicators for the commercial mortgages

 

Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

of

 

Class

 

 

of

 

(dollars in millions)

Loans

 

Apartments

 

Offices

 

Retail

Industrial

 

Hotel

 

Others

 

Total

Total

 

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In good standing

646

 

$

14,084

$

10,405

$

4,872

$

3,774

$

1,932

$

451

$

35,518

99

%

Restructured(a)

9

 

 

-

 

141

 

49

 

-

 

136

 

-

 

326

1

 

90 days or less delinquent

-

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

-

 

>90 days delinquent or in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

process of foreclosure

5

 

 

-

 

81

 

55

 

-

 

-

 

-

 

136

-

 

Total(b)

660

 

$

14,084

$

10,627

$

4,976

$

3,774

$

2,068

$

451

$

35,980

100

%

Allowance for credit losses

 

 

$

104

$

262

$

114

$

42

$

29

$

6

$

557

2

%

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In good standing

688

 

$

13,969

$

10,506

$

5,144

$

3,766

$

2,064

$

460

$

35,909

99

%

Restructured(a)

5

 

 

-

 

52

 

50

 

-

 

4

 

-

 

106

-

 

90 days or less delinquent

3

 

 

-

 

87

 

-

 

-

 

114

 

-

 

201

-

 

>90 days delinquent or in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

process of foreclosure

4

 

 

-

 

67

 

55

 

-

 

86

 

-

 

208

1

 

Total(b)

700

 

$

13,969

$

10,712

$

5,249

$

3,766

$

2,268

$

460

$

36,424

100

%

Allowance for credit losses

 

 

$

145

$

267

$

145

$

53

$

65

$

10

$

685

2

%

(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 2020 Annual Report.

(b) Does not reflect allowance for credit losses.

The following table presents credit quality performance indicators for residential mortgages by year of vintage:

September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2021

 

2020

 

2019

 

2018

 

2017

 

Prior

 

Total

FICO*:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

780 and greater

$

1,066

$

752

$

355

$

133

$

227

$

570

$

3,103

720 - 779

 

830

 

255

 

102

 

51

 

69

 

177

 

1,484

660 - 719

 

29

 

44

 

25

 

13

 

21

 

55

 

187

600 - 659

 

-

 

1

 

2

 

3

 

2

 

13

 

21

Less than 600

 

-

 

-

 

1

 

1

 

2

 

9

 

13

Total residential mortgages

$

1,925

$

1,052

$

485

$

201

$

321

$

824

$

4,808

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

2020

 

2019

 

2018

 

2017

 

2016

 

Prior

 

Total

FICO*:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

780 and greater

$

522

$

619

$

283

$

469

$

539

$

484

$

2,916

720 - 779

 

478

 

349

 

103

 

155

 

180

 

156

 

1,421

660 - 719

 

19

 

61

 

28

 

42

 

51

 

58

 

259

600 - 659

 

1

 

5

 

6

 

7

 

4

 

12

 

35

Less than 600

 

-

 

-

 

1

 

2

 

2

 

9

 

14

Total residential mortgages

$

1,020

$

1,034

$

421

$

675

$

776

$

719

$

4,645

*Fair Isaac Corporation (FICO) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last twelve months.
Schedule of changes in the allowance for credit losses on Mortgage and other loans receivable

Three Months Ended September 30,

2021

 

2020

 

 

Commercial

 

Other

 

 

 

 

Commercial

 

Other

 

 

(in millions)

 

Mortgages

 

Loans

 

Total

 

 

Mortgages

 

Loans

 

Total

Allowance, beginning of period

$

587

$

114

$

701

 

$

667

$

127

$

794

Loans charged off

 

(2)

 

-

 

(2)

 

 

-

 

-

 

-

Recoveries of loans previously charged off

 

-

 

-

 

-

 

 

-

 

-

 

-

Net charge-offs

 

(2)

 

-

 

(2)

 

 

-

 

-

 

-

Addition to (release of) allowance for loan losses

 

(28)

 

1

 

(27)

 

 

(8)

 

11

 

3

Reclassified to held for sale(b)

 

-

 

(31)

 

(31)

 

 

-

 

-

 

-

Allowance, end of period

$

557

$

84

$

641

 

$

659

$

138

$

797

Nine Months Ended September 30,

2021

 

2020

 

 

Commercial

 

Other

 

 

 

 

Commercial

 

Other

 

 

(in millions)

 

Mortgages

 

Loans

 

Total

 

 

Mortgages

 

Loans

 

Total

Allowance, beginning of year

$

685

$

129

$

814

 

$

336

$

102

$

438

Initial allowance upon CECL adoption

 

-

 

-

 

-

 

 

311

 

7

 

318

Loans charged off

 

(2)

 

-

 

(2)

 

 

(12)

 

-

 

(12)

Recoveries of loans previously charged off

 

-

 

-

 

-

 

 

-

 

-

 

-

Net charge-offs

 

(2)

 

-

 

(2)

 

 

(12)

 

-

 

(12)

Addition to (release of) allowance for loan losses

 

(126)

 

(14)

 

(140)

 

 

24

 

29

 

53

Reclassified to held for sale(b)

 

-

 

(31)

 

(31)

 

 

-

 

-

 

-

Allowance, end of period

$

557

$

84

$

641

 

$

659

$

138

$

797

(a)Does not include allowance for credit losses of $83 million and $66 million, respectively, at September 30, 2021 and 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities.(b)Reported in Other assets in the Condensed Consolidated Balance Sheets.