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:



	December 31, 2015			December 31, 2014			December 31, 2013
	(in millions)
Beginning balance	$	35		$	37		$	44
Charge-offs	(4		)	(4		)	(7		)
Recoveries	—			1			1
Provisions	1			1			(1		)
Ending balance	$	32		$	35		$	37

Individually evaluated for impairment	$	4		$	9		$	9
Collectively evaluated for impairment	28			26			28

The recorded investment in financing receivables by impairment method was as follows:



	December 31, 2015		December 31, 2014
	(in millions)
Individually evaluated for impairment	$	34	$	42
Collectively evaluated for impairment	3,910		3,951
Total	$	3,944	$	3,993

As of December 31, 2015 and 2014, 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 $13 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.

During the years ended December 31, 2015, 2014 and 2013, the Company purchased $162 million, $227 million and $158 million, respectively, and sold $16 million, $13 million and $3 million, respectively, consisting primarily of syndicated loans.

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 $10 million and $12 million as of December 31, 2015 and 2014, 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% of total commercial mortgage loans at both December 31, 2015 and 2014. 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,
	2015		2014		2015		2014
	(in millions)
East North Central	$	211	$	238	8	%	9	%
East South Central	74		62		3		2
Middle Atlantic	210		217		8		8
Mountain	248		245		9		9
New England	123		140		4		5
Pacific	741		694		27		25
South Atlantic	782		740		28		27
West North Central	229		233		8		9
West South Central	137		160		5		6
	2,755		2,729		100	%	100	%
Less: allowance for loan losses	21		25
Total	$	2,734	$	2,704

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



	Loans				Percentage
	December 31,				December 31,
	2015		2014		2015		2014
	(in millions)
Apartments	$	504	$	500	18	%	18	%
Hotel	35		34		1		1
Industrial	459		461		17		17
Mixed use	35		45		1		2
Office	541		545		20		20
Retail	984		988		36		36
Other	197		156		7		6
	2,755		2,729		100	%	100	%
Less: allowance for loan losses	21		25
Total	$	2,734	$	2,704

Syndicated Loans

The recorded investment in syndicated loans at December 31, 2015 and 2014 was $553 million and $511 million, respectively. 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, 2015 and 2014 were $6 million and $4 million, respectively.

Consumer Loans

The recorded investment in consumer loans at December 31, 2015 and 2014 was $636 million and $753 million, respectively. 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, 2015 and 2014, approximately 4% and 6%, respectively, of consumer loans had FICO scores below 640. At both December 31, 2015 and 2014, 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% of the portfolio as of both December 31, 2015 and 2014. No other state represents more than 10% of the total consumer loan portfolio.

Troubled Debt Restructurings

The recorded investment in restructured loans was not material as of December 31, 2015, 2014 and 2013. 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, 2015, 2014 and 2013. There are no commitments to lend additional funds to borrowers whose loans have been restructured.