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, 2014
	Commercial Mortgage Loans			Syndicated Loans			Consumer Loans			Total
	(in millions)
Beginning balance	$	26		$	6		$	5		$	37
Charge-offs	(1		)	(2		)	(1		)	(4		)
Recoveries	—			—			1			1
Provisions	—			2			(1		)	1
Ending balance	$	25		$	6		$	4		$	35

Individually evaluated for impairment	$	8		$	—		$	1		$	9
Collectively evaluated for impairment	17			6			3			26



	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

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



	December 31, 2014
	Commercial Mortgage Loans		Syndicated Loans		Consumer Loans		Total
	(in millions)
Individually evaluated for impairment	$	31	$	4	$	7	$	42
Collectively evaluated for impairment	2,698		507		746		3,951
Total	$	2,729	$	511	$	753	$	3,993



	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

As of December 31, 2014 and 2013, the Company’s recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses was $13 million and $21 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,
	2014		2013		2012
	(in millions)
Purchases
Consumer loans	$	—	$	—	$	51
Syndicated loans	227		158		111
Total loans purchased	$	227	$	158	$	162

Sales
Consumer loans	$	—	$	—	$	452
Syndicated loans	13		3		12
Total loans sold	$	13	$	3	$	464

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 $12 million and $22 million as of December 31, 2014 and 2013, 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 1% and 2% of total commercial mortgage loans at December 31, 2014 and 2013, respectively. 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,
	2014		2013		2014		2013
	(in millions)
East North Central	$	238	$	251	9	%	9	%
East South Central	62		71		2		3
Middle Atlantic	217		211		8		8
Mountain	245		257		9		10
New England	140		149		5		5
Pacific	694		661		25		25
South Atlantic	740		713		27		26
West North Central	233		207		9		8
West South Central	160		162		6		6
	2,729		2,682		100	%	100	%
Less: allowance for loan losses	25		26
Total	$	2,704	$	2,656

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



	Loans				Percentage
	December 31,				December 31,
	2014		2013		2014		2013
	(in millions)
Apartments	$	500	$	488	18	%	18	%
Hotel	34		33		1		1
Industrial	461		454		17		17
Mixed use	45		36		2		1
Office	545		559		20		21
Retail	988		951		36		36
Other	156		161		6		6
	2,729		2,682		100	%	100	%
Less: allowance for loan losses	25		26
Total	$	2,704	$	2,656

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 both December 31, 2014 and 2013 were $4 million.

Consumer Loans

The Company considers the credit worthiness of borrowers (FICO score), collateral characteristics 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 December 31, 2014 and 2013, approximately 6% and 5% of consumer loans had FICO scores below 640. At both December 31, 2014 and 2013, approximately 2% 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 37% and 38% of the portfolio as of December 31, 2014 and 2013, respectively. 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,
	2014			2013
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
	(in millions, except number of loans)
Commercial mortgage loans	3	$	9	8	$	24
Syndicated loans	1	1		1	—
Consumer bank loans	9	1		15	—
Total	13	$	11	24	$	24

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, 2014, 2013 and 2012. There are no commitments to lend additional funds to borrowers whose loans have been restructured.