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Loans and Allowance for Credit Losses (Tables)
 12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
Net Loans
The following table presents our recorded investment in loans, by segment, as of the dates indicated:
(In millions)December 31, 2020December 31, 2019
Domestic(1):
Commercial and financial:
Fund Finance(2)
11,531 10,270 
Leveraged loans2,923 3,342 
Overdrafts1,894 1,739 
Other(3)
2,688 3,411 
Commercial real estate2,096 1,766 
Total domestic21,132 20,528 
Foreign(1):
Commercial and financial:
Fund Finance(2)
4,432 3,145 
Leveraged loans1,242 1,119 
Overdrafts1,088 1,517 
Other(3)
31 — 
Total foreign6,793 5,781 
Total loans(2)
27,925 26,309 
Allowance for credit losses(122)(74)
Loans, net of allowance$27,803 $26,235 
(1) Domestic and foreign categorization is based on the borrower’s country of domicile.
(2) Fund finance loans include primarily $6,391 million loans to real money funds, $8,380 million private equity capital call finance loans and $821 million loans to business development companies as of December 31, 2020, compared to $6,040 million loans to real money funds, $6,076 million private equity capital call finance loans and $932 million loans to business development companies as of December 31, 2019.
(3) Includes $1,911 million securities finance loans, $754 million loans to municipalities and $54 million other loans as of December 31, 2020 and $2,537 million securities finance loans, $848 million loans to municipalities and $26 million other loans as of December 31, 2019.
Recorded Investment in Each Class of Total Loans and Leases by Credit Quality Indicator
The following tables present our recorded loans to counterparties by risk rating, as noted above, as of the dates indicated:
December 31, 2020Commercial and FinancialCommercial Real EstateTotal Loans
(In millions)
Investment grade$20,859 $1,724 $22,583 
Speculative4,852 372 5,224 
Special mention67 — 67 
Substandard34 — 34 
Doubtful17 — 17 
Total(1)
$25,829 $2,096 $27,925 

December 31, 2019Commercial and FinancialCommercial Real EstateTotal Loans 
(In millions)
Investment grade$19,501 $1,766 $21,267 
Speculative5,008 — 5,008 
Special mention25 — 25 
Substandard9 — 9 
Total(1)
$24,543 $1,766 $26,309 
(1) Loans Include $2,982 million and $3,256 million of overdrafts as of December 31, 2020 and December 31, 2019, respectively. Overdrafts are short-term in nature and do not present a significant credit risk to us.
The following table presents the amortized cost basis, by year of origination and credit quality indicator as of December 31, 2020. For origination years before the fifth annual period, we present the aggregate amortized cost basis of loans. For purchased loans, the date of issuance is used to determine the year of origination, not the date of acquisition. For modified, extended or renewed lending arrangements, we evaluate whether a credit event has occurred which would consider the loan to be a new arrangement.
(In millions)20202019201820172016PriorRevolving Loans
Total(1)
Domestic loans:
Commercial and financial:
Risk Rating:
Investment grade$1,894 $388 $4 $167 $200 $— $12,836 $15,489 
Speculative432 942 822 610 43 — 597 3,446 
Special mention— 28 — 39 — — — 67 
Substandard— 5 — — 29 — — 34 
Doubtful— — — — — — — — 
Total commercial and financing$2,326 $1,363 $826 $816 $272 $— $13,433 $19,036 
Commercial real estate:
Risk Rating:
Investment grade$178 $383 $688 $277 $197 $— $— $1,723 
Speculative120 166 58 — — 29 — 373 
Total commercial real estate$298 $549 $746 $277 $197 $29 $— $2,096 
Non-U.S. loans:
Commercial and financial:
Risk Rating:
Investment grade$1,028 $— $— $— $— $— $4,343 $5,371 
Speculative283 401 346 162 26 66 121 1,405 
Doubtful— — — 17 — — — 17 
Total commercial and financing$1,311 $401 $346 $179 $26 $66 $4,464 $6,793 
Total loans$3,935 $2,313 $1,918 $1,272 $495 $95 $17,897 $27,925 
(1) Any reserve associated with accrued interest is not material. As of December 31, 2020, accrued interest receivable of $72 million included in the amortized cost basis of loans has been excluded from the amortized cost basis within this table.
Schedule of Activity in the Allowance for Loan Losses
The following table presents the activity in the allowance for credit losses by portfolio and class for the year ended December 31, 2020:
Year End December 31, 2020
Commercial and Financial
(In millions)Leveraged Loans
Other Loans(1)
Commercial Real EstateHeld-to-Maturity SecuritiesOff-Balance Sheet CommitmentsAll Other Total
Allowance for credit losses:
Beginning balance$61 $10 $2 $— $19 $1 $93 
Charge-offs(2)
(41)— — — — — (41)
Provision70 7 6 3 2 — 88 
FX translation7 — — — 1 — 8 
Ending balance$97 $17 $8 $3 $22 $1 $148 
(1) Includes $13 million allowance for credit losses on Fund Finance loans and $4 million on other loans.
(2) Related to the sale of leveraged loans in 2020.
The following table presents activity in the allowance for loan losses for the periods indicated under the incurred loss methodology:
(In millions)Year Ended December 31, 2019Year Ended December 31, 2018
Allowance for loan losses:
Beginning balance$67 $54 
Provision for credit losses(1)
10 15 
Charge-offs(1)
(3)(2)
Ending balance$74 $67 
(1) The provisions and charge offs for credit losses were primarily attributable to exposure to purchased leveraged loans to non-investment grade loans.