6. 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, 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

	December 31, 2010

	Commercial Mortgage Loans			Syndicated Loans			Consumer Loans			Total
	(in millions)
Beginning balance	$	32		$	26		$	13		$	71
Charge-offs		(2	)		(5	)		(12	)		(19	)
Recoveries		—			—			1			1
Provisions		8			(11	)		14			11

Ending balance	$	38		$	10		$	16		$	64

Individually evaluated for impairment	$	8		$	1		$	2		$	11
Collectively evaluated for impairment		30			9			14			53

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

	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

	December 31, 2011

	Commercial Mortgage Loans		Syndicated Loans		Consumer Loans		Total
	(in millions)
Individually evaluated for impairment	$	68	$	5	$	11	$	84
Collectively evaluated for impairment		2,556		359		1,369		4,284

Total	$	2,624	$	364	$	1,380	$	4,368

As of December 31, 2012 and 2011, the Company's recorded investment in financing receivables individually evaluated for impairment for which there was no related allowance for loan losses was $17 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.

Purchases and sales of loans were as follows:

	Years Ended December 31,

	2012		2011		2010
	(in millions)
Purchases
Consumer loans	$	51	$	373	$	283
Syndicated loans		111		194		59

Total loans purchased	$	162	$	567	$	342

Sales
Consumer loans	$	452	$	209	$	415
Syndicated loans		12		2		40

Total loans sold	$	464	$	211	$	455

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 $7 million and $20 million as of December 31, 2012 and 2011, 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% and 3% of total commercial mortgage loans at December 31, 2012 and 2011, 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,
	2012		2011		2012			2011
	(in millions)
East North Central	$	260	$	252		10	%		10	%
East South Central		66		65		3			2
Middle Atlantic		207		223		8			9
Mountain		272		284		10			11
New England		146		141		6			5
Pacific		597		584		23			22
South Atlantic		661		648		25			25
West North Central		232		244		9			9
West South Central		165		183		6			7

		2,606		2,624		100	%		100	%

Less: allowance for loan losses		29		35

Total	$	2,577	$	2,589

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

	Loans				Percentage

	December 31,				December 31,
	2012		2011		2012			2011
	(in millions)
Apartments	$	450	$	392		17	%		15	%
Hotel		36		51		1			2
Industrial		474		480		18			18
Mixed use		42		42		2			2
Office		610		694		24			26
Retail		858		845		33			32
Other		136		120		5			5

		2,606		2,624		100	%		100	%

Less: allowance for loan losses		29		35

Total	$	2,577	$	2,589

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, 2012 and 2011 were $3 million.

Consumer Loans

The Company considers the credit worthiness of borrowers (FICO score), collateral characteristics such as loan-to-value ("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, 2012 and 2011, approximately 5% and 7%, respectively, of consumer loans had FICO scores below 640. At December 31, 2012 and 2011, approximately 8% and 2%, 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, 2012 and 2011. 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,

	2012				2011
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
	(in millions, except number of loans)
Commercial mortgage loans		4	$	13		11	$	51
Syndicated loans		5		2		2		—
Consumer loans		23		—		106		1

Total		32	$	15		119	$	52

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, 2012 and 2011. There are no material commitments to lend additional funds to borrowers whose loans have been restructured.