Loans

12 Months Ended

Dec. 31, 2011

Loans, Allowance for Credit Losses and Loans Held for Sale [Abstract]

Loans

8.    Loans

Loans consisted of the following:

At December 31,	2011		2010
	(in millions)
Commercial loans:
Construction and other real estate	$	7,860	$	8,228
Business banking and middle market enterprises		9,642		7,945
Global banking (1) (2)		12,658		10,745
Other commercial		3,489		3,085
Total commercial		33,649		30,003
Consumer loans:
Home equity mortgages		2,563		3,820
Other residential mortgages		14,113		13,697
Credit cards		828		1,250
Other consumer		714		1,039
Total consumer		18,218		19,806
Total loans	$	51,867	$	49,809

⁽¹⁾  Represents large multinational firms including globally focused U.S. corporate and financial institutions and USD lending to select high quality Latin American and other multinational customers managed by HSBC on a global basis.

^{(2 )}  Includes $1.2 billion of commercial loans at December 31, 2010 related to a VIE which has been consolidated.

We have loans outstanding to certain executive officers and directors. The loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons and do not involve more than normal risk of collectibility. The aggregate amount of such loans did not exceed 5% of shareholders’ equity at either December 31, 2011 or 2010.

Net deferred origination costs, totaled $59 million and $88 million at December 31, 2011 and 2010, respectively.

At December 31, 2011 and 2010, we had net unamortized premium on our loans of $59 million and $74 million, respectively. We amortized net premiums of $35 million and $20 million and net discounts of $59 million on our loans in 2011, 2010 and 2009, respectively.

Age Analysis of Past Due Loans  The following table summarizes the past due status of our loans at December 31, 2011 and 2010 for continuing and discontinued operations. The aging of past due amounts are determined based on the contractual delinquency status of payments under the loan. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status may be affected by customer account management policies and practices such as re-age or modification.

	Days Past Due
At December 31, 2011	1 - 29 days		30 - 89 days		90+ days		Total Past Due		Current		Total Loans
	(in millions)
Continuing operations:
Commercial loans:
Construction and other real estate	$	72	$	31	$	231	$	334	$	7,526	$	7,860
Business banking and middle market enterprises		887		58		71		1,016		8,626		9,642
Global banking		898		34		74		1,006		11,652		12,658
Other commercial		78		84		21		183		3,306		3,489
Total commercial		1,935		207		397		2,539		31,110		33,649
Consumer loans:
HELOC and home equity mortgages		181		54		89		324		2,239		2,563
Other residential mortgages		109		526		815		1,450		12,663		14,113
Credit cards		37		20		20		77		751		828
Other consumer		11		6		35		52		662		714
Total consumer		338		606		959		1,903		16,315		18,218
Total loans – continuing operations	$	2,273	$	813	$	1,356	$	4,442	$	47,425		51,867
Discontinued credit card and private label operations (1)	$	742	$	374	$	361	$	1,477	$	19,708	$	21,185

	Days Past Due
At December 31, 2010	1 - 29 days		30 - 89 days		90+ days		Total Past Due		Current		Total Loans
	(in millions)
Continuing operations:
Commercial loans:
Construction and other real estate	$	72	$	200	$	433	$	705	$	7,523	$	8,228
Business banking and middle market enterprises		367		84		66		517		7,428		7,945
Global banking		902		90		74		1,066		9,679		10,745
Other commercial		63		77		14		154		2,931		3,085
Total commercial		1,404		451		587		2,442		27,561		30,003
Consumer loans:
HELOC and home equity mortgages		328		83		93		504		3,316		3,820
Other residential mortgages		123		538		900		1,561		12,136		13,697
Credit cards		37		23		24		84		1,166		1,250
Other consumer		12		6		32		50		989		1,039
Total consumer		500		650		1,049		2,199		17,607		19,806
Total loans – continuing operations	$	1,904	$	1,101	$	1,636	$	4,641	$	45,168	$	49,809
Discontinued credit card and private label operations (1)	$	767	$	466	$	533	$	1,766	$	21,494	$	23,260

⁽¹⁾  At December 31, 2011, discontinued credit card and private label credit card operations represent our GM and UP credit card loans as well as our private label credit card and closed-end loans which are included as held for sale and carried at the lower of amortized cost or fair value. At December 31, 2010, these discontinued credit card and private label credit card loans were carried at amortized cost and as such, are not directly comparable to the current period balances.

Contractual Maturities Contractual maturities of loans were as follows:

	At December 31,
	2012		2013		2014		2015		2016		Thereafter		Total
	(in millions)
Commercial Loans:
Construction and other real estate	$	4,504	$	866	$	662	$	424	$	841	$	563	$	7,860
Business banking and middle market enterprises		5,094		1,144		887		584		1,228		705		9,642
Global banking		7,973		1,258		943		579		1,025		880		12,658
Other commercial		1,839		414		321		212		449		254		3,489
Consumer Loans:
Home equity mortgages (1)		843		541		332		206		131		510		2,563
Other residential mortgages		1,278		370		362		374		383		11,346		14,113
Credit card receivables (2)		236		592		-		-		-		-		828
Other consumer		551		57		44		31		19		12		714
Total	$	22,318	$	5,242	$	3,551	$	2,410	$	4,076	$	14,270	$	51,867

⁽¹⁾  Home equity mortgages maturities reflect estimates based on historical payment patterns.

⁽²⁾  As credit card receivables do not have stated maturities, the table reflects estimates based on historical payment patterns.

As substantial portion of consumer loans, based on our experience, will be renewed or repaid prior to contractual maturity, the above maturity schedule should not be regarded as a forecast of future cash collections. The following table summarizes contractual maturities of loans due after one year by repricing characteristic:

	At December 31, 2011
	Over 1 But Within 5 Years		Over 5 Years
	(in millions)
Receivables at predetermined interest rates	$	2,585	$	4,118
Receivables at floating or adjustable rates		12,694		10,152
Total	$	15,279	$	14,270

Nonaccrual Loans Nonaccrual loans totaled $1.8 billion and $2.0 billion at December 31, 2011 and 2010, respectively. Interest income that would have been recorded if such nonaccrual loans had been current and in accordance with contractual terms was approximately $117 million in 2011 and $146 million in 2010. Interest income that was included in finance and other interest income on these loans was approximately $19 million in 2011 and $28 million in 2010. For an analysis of reserves for credit losses, see Note 9, “Allowance for Credit Losses.”

Nonaccrual loans and accruing receivables 90 days or more delinquent are summarized in the following table:

At December 31,	2011		2010
	(in millions)
Nonaccrual loans:
Continuing operations:
Commercial:
Real Estate:
Construction and land loans	$	103	$	70
Other real estate		512		529
Business banking and middle markets enterprises		58		116
Global banking		137		74
Other commercial		15		12
Total commercial		825		801
Consumer:
Residential mortgages, excluding home equity mortgages		815		900
Home equity mortgages		89		93
Total residential mortgages		904		993
Other consumer loans		8		9
Total consumer loans		912		1,002
Nonaccrual loans held for sale		88		186
Total nonaccruing loans – continuing operations		1,825		1,989
Discontinued credit card and private label operations (1)		-		-
Total nonaccruing loans		1,825		1,989
Accruing loans contractually past due 90 days or more:
Continuing operations:
Commercial:
Real Estate:
Construction and land loans		-		-
Other real estate		1		137
Business banking and middle market enterprises		11		47
Global banking		-		-
Other commercial		2		2
Total commercial		14		186
Consumer:
Credit card receivables		20		24
Other consumer		27		23
Total consumer loans		47		47
Total accruing loans contractually past due 90 days or more – continuing operations		61		233
Discontinued credit card and private label operations (1)		361		533
Total accruing loans contractually past due 90 days or more		422		766
Total nonperforming loans	$	2,247	$	2,755

⁽¹⁾  At December 31, 2011, discontinued credit card and private label credit card operations represent our GM and UP credit card loans and our private label credit card and closed-end loans which are included as held for sale and carried at the lower of amortized cost or fair value. At December 31, 2010, these discontinued credit card and private label credit card loans were carried at amortized cost and as such, are not directly comparable to the current period balances.

Impaired Loans   A loan is considered to be impaired when it is deemed probable that not all principal and interest amounts due according to the contractual terms of the loan agreement will be collected. Probable losses from impaired loans are quantified and recorded as a component of the overall allowance for credit losses. Commercial and consumer loans for which we have modified the loan terms as part of a troubled debt restructuring are considered to be impaired loans. Additionally, commercial loans in nonaccrual status, or that have been partially charged-off or assigned a specific allowance for credit losses are also considered impaired loans.

Troubled debt restructurings  Troubled debt restructurings represent loans for which the original contractual terms have been modified to provide for terms that are less than what we would be willing to accept for new loans with comparable risk because of deterioration in the borrower’s financial condition.

During the third quarter of 2011, we adopted a new Accounting Standards Update which provided additional guidance for determining whether a restructuring of a receivable meets the criteria to be reported as a troubled debt restructuring (“TDR Loan”). Under this new guidance, we have determined that substantially all consumer loans modified as a result of a financial difficulty, including all modifications with trial periods regardless of whether the modification was permanent or temporary, should be reported as TDR Loans. For residential mortgage loans purchased from HSBC Finance, we have determined that all re-ages, except first-time early stage delinquency re-ages where the customer has not been granted a prior re-age or modification since the first quarter of 2007, should be considered a TDR Loan. Exclusion of these first-time early stage delinquency re-ages from our reported TDR Loans was not material. As required, the new guidance was applied retrospectively to restructurings occurring on or after January 1, 2011 and resulted in the reporting of an additional $51 million of residential mortgage loans as TDR Loans at September 30, 2011 with credit loss reserves of $10 million associated with these loans. The incremental loan loss provision recorded for these loans during the third quarter using a discounted cash flow analysis was $7 million. For our HSBC Bank USA credit card portfolio, we reported an additional $1 million of credit card loans as TDR Loans at September 30, 2011 with credit loss reserves of less than $1 million associated with these loans. The incremental loan loss provision recorded for these loans during the third quarter using a discounted cash flow analysis was not material. The TDR Loan balances and related credit loss reserves for consumer loans reported as of December 31, 2010 use our previous definition of TDR Loans and, as such, are not comparable to the current period balances. The new guidance did not impact our reporting of TDR Loans for commercial loans. See Note 3, “Discontinued Operations,” for a discussion of TDR Loans included in our discontinued credit card and private label operations.

Modifications for consumer and commercial loans may include changes to one or more terms of the loan, including, but not limited to, a change in interest rate, extension of the amortization period, reduction in payment amount and partial forgiveness or deferment of principal. A substantial amount of our modifications involve interest rate reductions which lower the amount of finance income we are contractually entitled to receive in future periods. Through lowering the interest rate and other loan term changes, we believe we are able to increase the amount of cash flow that will ultimately be collected from the loan, given the borrower’s financial condition. TDR Loans are reserved for either based on the present value of expected future cash flows discounted at the loans’ original effective interest rate which generally results in a higher reserve requirement for these loans or in the case of certain secured commercial loans, the estimated fair value of the underlying collateral. Once a consumer loan is classified as a TDR Loan, it continues to be reported as such until it is paid off or charged-off.

The following table presents information about receivables which were modified during the twelve months ended December 31, 2011 and as a result of this action became classified as TDR Loans.

	(in millions)
Commercial loans:
Construction and other real estate	$	70
Business banking and middle market enterprises		5
Global banking		-
Other commercial		-
Total commercial		75
Consumer loans:
Residential mortgages		235
Credit cards		5
Total consumer		240
Total	$	315

The following tables present information about our TDR Loans and the related credit loss reserves for TDR Loans:

At December 31,	2011		2010
	(in millions)
TDR Loans (1)(2):
Commercial loans:
Construction and other real estate	$	342	$	397
Business banking and middle market enterprises		94		88
Global banking		-		-
Other commercial		37		49
Total commercial		473		534
Consumer loans:
Residential mortgages		608		402
Credit cards		21		27
Total consumer		629		429
Total TDR Loans (3)	$	1,102	$	963

At December 31,	2011		2010
	(in millions)
Allowance for credit losses for TDR Loans (4):
Commercial loans:
Construction and other real estate	$	17	$	44
Business banking and middle market enterprises		3		8
Global banking		-		-
Other commercial		-		1
Total commercial		20		53
Consumer loans:
Residential mortgages		94		53
Credit cards		7		9
Total consumer		101		62
Total allowance for credit losses for TDR Loans	$	121	$	115

⁽¹⁾  TDR Loans are considered to be impaired loans. For consumer loans, all such loans are considered impaired loans regardless of accrual status. For commercial loans, impaired loans include other loans in addition to TDRs which totaled $614 million and $593 million at December 31, 2011 and 2010, respectively.

⁽²⁾ The TDR Loan balances included in the table above reflect the current carrying amount of TDR Loans and includes all basis adjustments on the loan, such as unearned income, unamortized deferred fees and costs on originated loans and premiums or discounts on purchased loans. The following table reflects the unpaid principal balance of TDR Loans:

At December 31,	2011		2010
	(in millions)
Commercial loans:
Construction and other real estate	$	393	$	429
Business banking and middle market enterprises		147		120
Global banking		-		-
Other commercial		40		52
Total commercial		580		601
Consumer loans:
Residential mortgages		682		352
Credit cards		20		26
Total consumer		702		378
Total – continuing operations	$	1,282	$	979

⁽³⁾ Includes balances of $331 million and $255 million at December 31, 2011 and 2010, respectively, which are classified as nonaccrual loans.

⁽⁴⁾ Included in the allowance for credit losses.

The following table presents commercial loans which were classified as TDR Loans during the previous 12 months which became 90 days or greater contractually delinquent (for consumer loans 60 days or greater contractually delinquent) during the twelve months ended December 31, 2011:

	(in millions)
Commercial loans:
Construction and other real estate	$	42
Business banking and middle market enterprises		-
Global banking		-
Other commercial		-
Total commercial		42
Consumer loans:
Residential mortgages		16
Credit cards		4
Total consumer		20
Total	$	62

Additional information relating to TDR Loans is presented in the table below.

Year Ended December 31,	2011		2010
	(in millions)
Average balance of TDR Loans
Commercial loans:
Construction and other real estate	$	346	$	273
Business banking and middle market enterprises		89		71
Global banking		-		-
Other commercial		44		51
Total commercial		479		395
Consumer loans:
Residential mortgages		532		305
Credit cards		23		23
Auto finance (1)		-		28
Total consumer		555		356
Total average balance of TDR Loans	$	1,034	$	751
Interest income recognized on TDR Loans
Commercial loans:
Construction and other real estate	$	9	$	3
Business banking and middle market enterprises		-		-
Global banking		-		-
Other commercial		5		5
Total commercial		14		8
Consumer loans:
Residential mortgages		20		12
Credit cards		1		2
Auto finance (1)		-		2
Total consumer		21		16
Total interest income recognized on TDR Loans	$	35	$	24

⁽¹⁾ In August 2010, we sold auto finance loans with an outstanding principal balance of $1.2 billion at date of sale, and other related assets to Santander Consumer USA (“SC USA”).

Impaired commercial loans  Impaired commercial loan statistics are summarized in the following table:

	Amount with Impairment Reserves		Amount without Impairment Reserves		Total Impaired Commercial Loans(1)(2)		Impairment Reserve
	(in millions)
At December 31, 2011
Construction and other real estate	$	391	$	342	$	733	$	114
Business banking and middle market enterprises		68		59		127		12
Global banking		137		-		137		90
Other commercial		1		89		90		-
Total	$	597	$	490	$	1,087	$	216
At December 31, 2010
Construction and other real estate	$	378	$	377	$	755	$	84
Business banking and middle market enterprises		113		39		152		26
Global banking		103		2		105		72
Other commercial		26		89		115		6
Total	$	620	$	507	$	1,127	$	188

⁽¹⁾ Includes impaired commercial loans which are also considered TDR Loans as follows:

At December 31,	2011		2010
	(in millions)
Construction and other real estate	$	342	$	397
Business banking and middle market enterprises		94		88
Global banking		-		-
Other commercial		37		49
Total	$	473	$	534

⁽²⁾ The impaired commercial loan balances included in the table above reflect the current carrying amount of the loan and includes all basis adjustments, such as unamortized deferred fees and costs on originated loans and any premiums or discounts. The unpaid principal balance of impaired commercial loans included in the table above are as follows:

At December 31,	2011		2010
	(in millions)
Construction and other real estate	$	784	$	787
Business banking and middle market enterprises		180		184
Global banking		137		105
Other commercial		93		118
Total	$	1,194	$	1,194

The following table presents information about average impaired commercial loan balances and interest income recognized on the impaired commercial loans:

Year Ended December 31,	2011		2010		2009
	(in millions)
Average balance of impaired commercial loans:
Construction and other real estate	$	744	$	638	$	310
Business banking and middle market enterprises		151		127		99
Global banking		107		149		182
Other commercial		111		155		64
Total average balance of impaired commercial loans	$	1,113	$	1,069	$	655
Interest income recognized on impaired commercial loans:
Construction and other real estate	$	9	$	4	$	(3	)
Business banking and middle market enterprises		4		2		(1	)
Global banking		1		5		(1	)
Other commercial		3		-		-
Total interest income recognized on impaired commercial loans	$	17	$	11	$	(5	)

Commercial Loan Credit Quality Indicators  The following credit quality indicators are monitored for our commercial loan portfolio:

Criticized asset classifications  These classifications are based on the risk rating standards of our primary regulator. Problem loans are assigned various criticized facility grades. We also assign obligor grades which are used under our allowance for credit losses methodology. Criticized assets for commercial loans are summarized in the following table:

	Special Mention		Substandard		Doubtful		Total
	(in millions)
At December 31, 2011
Construction and other real estate	$	1,009	$	990	$	186	$	2,185
Business banking and middle market enterprises		445		241		12		698
Global banking		45		397		109		551
Other commercial		99		131		-		230
Total	$	1,598	$	1,759	$	307	$	3,664
At December 31, 2010
Construction and other real estate	$	1,324	$	1,230	$	115	$	2,669
Business banking and middle market enterprises		465		504		5		974
Global banking		260		386		74		720
Other commercial		235		140		8		383
Total	$	2,284	$	2,260	$	202	$	4,746

Nonperforming  The status of our commercial loan portfolio is summarized in the following table:

	Performing Loans		Nonaccrual Loans		Accruing Loans Contractually Past Due 90 days or More		Total
	(in millions)
At December 31, 2011
Commercial:
Construction and other real estate	$	7,244	$	615	$	1	$	7,860
Business banking and middle market enterprise		9,573		58		11		9,642
Global banking		12,521		137		-		12,658
Other commercial		3,472		15		2		3,489
Total commercial – continuing operations	$	32,810	$	825	$	14	$	33,649
At December 31, 2010
Commercial:
Construction and other real estate	$	7,492	$	599	$	137	$	8,228
Business banking and middle market enterprise		7,782		116		47		7,945
Global banking		10,671		74		-		10,745
Other commercial		3,071		12		2		3,085
Total commercial – continuing operations	$	29,016	$	801	$	186	$	30,003

Credit risk profile  The following table shows the credit risk profile of our commercial loan portfolio:

	Investment Grade(1)		Non-Investment Grade		Total
	(in millions)
At December 31, 2011
Construction and other real estate	$	2,775	$	5,085	$	7,860
Business banking and middle market enterprises		4,408		5,234		9,642
Global banking		9,712		2,946		12,658
Other commercial		1,289		2,200		3,489
Total commercial	$	18,184	$	15,465	$	33,649
At December 31, 2010
Construction and other real estate	$	1,900	$	6,328	$	8,228
Business banking and middle market enterprises		2,866		5,079		7,945
Global banking		6,808		3,937		10,745
Other commercial		787		2,298		3,085
Total commercial	$	12,361	$	17,642	$	30,003

⁽¹⁾  Investment grade includes commercial loans with credit ratings of at least BBB- or above or the equivalent based on our internal credit rating system.

Consumer Loan Credit Quality Indicators   The following credit quality indicators are utilized for our consumer loan portfolio:

Delinquency  The following table summarizes dollars of two-months-and-over contractual delinquency and as a percent of total loans and loans held for sale (“delinquency ratio”) for our consumer loan portfolio for both continuing and discontinued operations:

	December 31, 2011					December 31, 2010
	Dollars of Delinquency		Delinquency Ratio			Dollars of Delinquency		Delinquency Ratio
	(dollars are in millions)
Continuing operations:
Consumer:
Residential mortgage, excluding home equity mortgages (1)	$	1,101		7.19	%	$	1,084		7.40	%
Home equity mortgages		99		2.89			109		2.85
Total residential mortgages		1,200		6.41			1,193		6.46
Credit card receivables		28		2.25			34		2.70
Other consumer		30		3.17			32		2.86
Total consumer – continuing operations		1,258		6.01			1,259		6.04
Discontinued credit card and private label operations (2)		514		2.43			726		3.31
Total consumer	$	1,772		4.21	%	$	1,985		4.64	%

⁽¹⁾  At December 31, 2011 and 2010, residential mortgage loan delinquency includes $803 million and $852 million, respectively, of loans that are carried at the lower of amortized cost or fair value less cost to sell.

⁽²⁾  At December 31, 2011, discontinued credit card and private label credit card operations include our GM and UP credit card loans and our private label credit card and closed-end loans which are included as held for sale and carried at the lower of amortized cost or fair value. At December 31, 2010, these discontinued credit card and private label credit card loans were carried at amortized cost and as such, are not directly comparable to the current period balances.

Nonperforming   The status of our consumer loan portfolio for both continuing and discontinued operations is summarized in the following table:

	Performing Loans		Nonaccrual Loans		Accruing Loans Contractually Past Due 90 days or More		Total
	(in millions)
At December 31, 2011
Continuing operations:
Consumer:
Residential mortgage, excluding home equity mortgages	$	13,298	$	815	$	-	$	14,113
Home equity mortgages		2,474		89		-		2,563
Total residential mortgages		15,772		904		-		16,676
Credit card receivables		808		-		20		828
Other consumer		679		8		27		714
Total consumer – continuing operations		17,259		912		47		18,218
Discontinued credit card and private label operations (1)		20,590		-		351		20,941
Total consumer	$	37,849	$	912	$	398	$	39,159
At December 31, 2010
Continuing operations:
Consumer:
Residential mortgage, excluding home equity mortgages	$	12,797	$	900	$	-	$	13,697
Home equity mortgages		3,727		93		-		3,820
Total residential mortgages		16,524		993		-		17,517
Credit card receivables		1,226		-		24		1,250
Other consumer		1,007		9		23		1,039
Total consumer – continuing operations		18,757		1,002		47		19,806
Discontinued credit card and private label operations (1)		22,466		-		523		22,989
Total consumer	$	41,223	$	1,002	$	570	$	42,795

⁽¹⁾  At December 31, 2011, discontinued credit card and private label credit card operations include our GM and UP credit card loans and our private label credit card and closed-end loans which are included as held for sale and carried at the lower of amortized cost or fair value. At December 31, 2010, these discontinued credit card and private label credit card loans were carried at amortized cost and as such, are not directly comparable to the current period balances.

Troubled debt restructurings  See discussion of impaired loans above for further details on this credit quality indicator.

Concentration of Credit Risk   A concentration of credit risk is defined as a significant credit exposure with an individual or group engaged in similar activities or affected similarly by economic conditions. We enter into a variety of transactions in the normal course of business that involve both on and off-balance sheet credit risk. Principal among these activities is lending to various commercial, institutional, governmental and individual customers. We participate in lending activity throughout the United States and internationally. In general, we manage the varying degrees of credit risk involved in on and off-balance sheet transactions through specific credit policies. These policies and procedures provide for a strict approval, monitoring and reporting process. It is our policy to require collateral when it is deemed appropriate. Varying degrees and types of collateral are secured depending upon management’s credit evaluation. As with any nonconforming and non-prime loan products, we utilize high underwriting standards and price these loans in a manner that is appropriate to compensate for higher risk.

Our loan portfolio includes the following types of loans:

• High loan-to-value (“LTV”) loans – Certain residential mortgages on primary residences with LTV ratios equal to or exceeding 90 percent at the time of origination and no mortgage insurance, which could result in the potential inability to recover the entire investment in loans involving foreclosed or damaged properties.

• Interest-only loans – A loan which allows a customer to pay the interest-only portion of the monthly payment for a period of time which results in lower payments during the initial loan period. However, subsequent events affecting a customer’s financial position could affect the ability of customers to repay the loan in the future when the principal payments are required.

• Adjustable rate mortgage (“ARM”) loans – A loan which allows us to adjust pricing on the loan in line with market movements. A customer’s financial situation and the general interest rate environment at the time of the interest rate reset could affect the customer’s ability to repay or refinance the loan after the adjustment.

The following table summarizes the balances of high LTV, interest-only and ARM loans in our loan portfolios, including certain loans held for sale, at December 31, 2011 and 2010, respectively.

At December 31,	2011		2010
	(in billions)
Residential mortgage loans with high LTV and no mortgage insurance (1)	$	1.1	$	1.2
Interest-only residential mortgage loans		4.1		3.7
ARM loans (2)		8.9		8.2

⁽¹⁾  Residential mortgage loans with high LTV and no mortgage insurance includes both fixed rate and adjustable rate mortgages. Excludes $68 million and $125 million of subprime residential mortgage loans held for sale at December 31, 2011 and 2010, respectively.

⁽²⁾  ARM loan balances above exclude $28 million and $99 million of subprime residential mortgage loans held for sale at December 31, 2011 and 2010, respectively. In 2012 and 2013, approximately $329 million and $411 million, respectively, of the ARM loans will experience their first interest rate reset.

Concentrations of first and second liens within the outstanding residential mortgage loan portfolio are summarized in the following table. Amounts in the table exclude residential mortgage loans held for sale of $2 billion and $1.0 billion at December 31, 2011 and 2010, respectively.

At December 31,	2011		2010
	(in millions)
Closed end:
First lien	$	14,113	$	13,697
Second lien		237		437
Revolving:
Second lien		2,326		3,383
Total	$	16,676	$	17,517

Regional exposure at December 31, 2011 for certain loan portfolios is summarized in the following table.

	Commercial Construction and Other Real Estate Loans			Residential Mortgage Loans			Credit Card Receivables
New York State		47.95	%		36.21	%		69.04	%
North Central United States		4.39			7.25			2.91
North Eastern United States		10.24			9.42			9.21
Southern United States		18.37			16.96			10.04
Western United States		19.05			30.16			7.32
Others		-			-			1.48
Total		100.00	%		100.00	%		100.00	%