Financing Receivables

The Company’s financing receivables include commercial mortgage loans, syndicated loans, consumer loans, policy loans, certificate loans and margin loans. See Note 2 for information regarding the Company’s accounting policies related to loans and the allowance for loan losses.

Allowance for Loan Losses

The following tables present a rollforward of the allowance for loan losses for the years ended and the ending balance of the allowance for loan losses by impairment method and type of loan:



	December 31, 2013
	Commercial Mortgage Loans			Syndicated Loans			Consumer Loans			Total
	(in millions)
Beginning balance	$	29		$	7		$	8		$	44
Charge-offs	(3		)	(1		)	(3		)	(7		)
Recoveries	—			—			1			1
Provisions	—			—			(1		)	(1		)
Ending balance	$	26		$	6		$	5		$	37

Individually evaluated for impairment	$	8		$	—		$	1		$	9
Collectively evaluated for impairment	18			6			4			28



	December 31, 2012
	Commercial Mortgage Loans			Syndicated Loans			Consumer Loans			Total
	(in millions)
Beginning balance	$	35		$	9		$	16		$	60
Charge-offs	(6		)	(2		)	(14		)	(22		)
Recoveries	—			—			1			1
Provisions	—			—			5			5
Ending balance	$	29		$	7		$	8		$	44

Individually evaluated for impairment	$	6		$	—		$	1		$	7
Collectively evaluated for impairment	23			7			7			37



	December 31, 2011
	Commercial Mortgage Loans			Syndicated Loans			Consumer Loans			Total
	(in millions)
Beginning balance	$	38		$	10		$	16		$	64
Charge-offs	(2		)	—			(12		)	(14		)
Recoveries	—			—			1			1
Provisions	(1		)	(1		)	11			9
Ending balance	$	35		$	9		$	16		$	60

Individually evaluated for impairment	$	10		$	1		$	1		$	12
Collectively evaluated for impairment	25			8			15			48

The recorded investment in financing receivables by impairment method and type of loan was as follows:



	December 31, 2013
	Commercial Mortgage Loans		Syndicated Loans		Consumer Loans		Total
	(in millions)
Individually evaluated for impairment	$	42	$	9	$	7	$	58
Collectively evaluated for impairment	2,640		370		873		3,883
Total	$	2,682	$	379	$	880	$	3,941



	December 31, 2012
	Commercial Mortgage Loans		Syndicated Loans		Consumer Loans		Total
	(in millions)
Individually evaluated for impairment	$	44	$	2	$	8	$	54
Collectively evaluated for impairment	2,562		335		1,061		3,958
Total	$	2,606	$	337	$	1,069	$	4,012

As of December 31, 2013 and 2012, the Company’s recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses was $21 million and $17 million, respectively. Unearned income, unamortized premiums and discounts, and net unamortized deferred fees and costs are not material to the Company’s total loan balance.

Purchases and sales of loans were as follows:



	Years Ended December 31,
	2013		2012		2011
	(in millions)
Purchases
Consumer loans	$	—	$	51	$	373
Syndicated loans	158		111		194
Total loans purchased	$	158	$	162	$	567

Sales
Consumer loans	$	—	$	452	$	209
Syndicated loans	3		12		2
Total loans sold	$	3	$	464	$	211

The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.

Credit Quality Information

Nonperforming loans, which are generally loans 90 days or more past due, were $22 million and $7 million as of December 31, 2013 and 2012, respectively. All other loans were considered to be performing.

Commercial Mortgage Loans

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercial mortgage loans which management has assigned its highest risk rating were 2% of total commercial mortgage loans at both December 31, 2013 and 2012. Loans with the highest risk rating represent distressed loans which the Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. In addition, the Company reviews the concentrations of credit risk by region and property type.

Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:



	Loans				Percentage
	December 31,				December 31,
	2013		2012		2013		2012
	(in millions)
East North Central	$	251	$	260	9	%	10	%
East South Central	71		66		3		3
Middle Atlantic	211		207		8		8
Mountain	257		272		10		10
New England	149		146		5		6
Pacific	661		597		25		23
South Atlantic	713		661		26		25
West North Central	207		232		8		9
West South Central	162		165		6		6
	2,682		2,606		100	%	100	%
Less: allowance for loan losses	26		29
Total	$	2,656	$	2,577

Concentrations of credit risk of commercial mortgage loans by property type were as follows:



	Loans				Percentage
	December 31,				December 31,
	2013		2012		2013		2012
	(in millions)
Apartments	$	488	$	450	18	%	17	%
Hotel	33		36		1		1
Industrial	454		474		17		18
Mixed use	36		42		1		2
Office	559		610		21		24
Retail	951		858		36		33
Other	161		136		6		5
	2,682		2,606		100	%	100	%
Less: allowance for loan losses	26		29
Total	$	2,656	$	2,577

Syndicated Loans

The Company’s syndicated loan portfolio is diversified across industries and issuers. The primary credit indicator for syndicated loans is whether the loans are performing in accordance with the contractual terms of the syndication. Total nonperforming syndicated loans at December 31, 2013 and 2012 were $4 million and $3 million, respectively.

Consumer Loans

The Company considers the credit worthiness of borrowers (FICO score), collateral characteristic such as LTV and geographic concentration in determining the allowance for loan losses for consumer loans. At a minimum, management updates FICO scores and LTV ratios semiannually.

As of both December 31, 2013 and 2012, approximately 5% of consumer loans had FICO scores below 640. At December 31, 2013 and 2012, approximately 2% and 8%, respectively, of the Company’s residential mortgage loans had LTV ratios greater than 90%. The Company’s most significant geographic concentration for consumer loans is in California representing 38% of the portfolio as of both December 31, 2013 and 2012. No other state represents more than 10% of the total consumer loan portfolio.

Troubled Debt Restructurings

The following table presents the number of loans restructured by the Company during the period and their recorded investment at the end of the period:



	Years Ended December 31,
	2013			2012
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(in millions, except number of loans)
Commercial mortgage loans	8	$	24	4	$	13
Syndicated loans	1	—		5	2
Consumer bank loans	15	—		23	—
Total	24	$	24	32	$	15

The troubled debt restructurings did not have a material impact to the Company’s allowance for loan losses or income recognized for the years ended December 31, 2013, 2012 and 2011. There are no commitments to lend additional funds to borrowers whose loans have been restructured.