LENDING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2016

Composition of Mortgages and other loans receivable

	December 31,			December 31,
(in millions)		2016		2015
Commercial mortgages^*	$	25,042	$	22,067
Residential mortgages		3,828		2,758
Life insurance policy loans		2,367		2,597
Commercial loans, other loans and notes receivable		2,300		2,451
Total mortgage and other loans receivable		33,537		29,873
Allowance for credit losses		(297)		(308)
Mortgage and other loans receivable, net	$	33,240	$	29,565

* Commercial mortgages primarily represent loans for offices, apartments and retail, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 24 percent and 12 percent, respectively, at December 31, 2016, and 22 percent and 12 percent, respectively, at December 31, 2015).

Nonperforming loans are generally those loans where payment of contractual principal or interest is more than 90 days past due. Nonperforming mortgages were not significant for all periods presented.

Schedule of debt service coverage ratio and loan-to-value ratio for the commercial mortgage loans

The following table presents debt service coverage ratios and loan-to-value ratios for commercial mortgages:

	Debt Service Coverage Ratios^(a)
(in millions)		>1.20X		1.00X - 1.20X		<1.00X		Total
December 31, 2016
Loan-to-Value Ratios^(b)
Less than 65%	$	13,998	$	1,694	$	232	$	15,924
65% to 75%		5,946		575		62		6,583
76% to 80%		1,246		174		47		1,467
Greater than 80%		471		392		205		1,068
Total commercial mortgages	$	21,661	$	2,835	$	546	$	25,042

December 31, 2015
Loan-to-Value Ratios^(b)
Less than 65%	$	10,283	$	1,704	$	150	$	12,137
65% to 75%		6,361		611		45		7,017
76% to 80%		1,370		169		81		1,620
Greater than 80%		646		226		421		1,293
Total commercial mortgages	$	18,660	$	2,710	$	697	$	22,067

(a) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest.

(b) The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan.

Schedule of credit quality indicators for the commercial mortgage loans

	Number															Percent
December 31, 2016	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total^(c)	Total $
Credit Quality Performance
Indicator:
In good standing	784	$	6,005	$	7,830	$	5,179	$	1,898	$	2,373	$	1,589	$	24,874	99	%
Restructured^(a)	4		-		134		18		-		16		-		168	1
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total^(b)	788	$	6,005	$	7,964	$	5,197	$	1,898	$	2,389	$	1,589	$	25,042	100	%
Allowance for credit losses:
Specific			-		3		1		6		1		-		11	-	%
General			35		72		41		7		13		15		183	1
Total allowance for credit losses		$	35	$	75	$	42	$	13	$	14	$	15	$	194	1	%
December 31, 2015
(dollars in millions)
Credit Quality Performance
Indicator:
In good standing	830	$	3,916	$	7,484	$	4,809	$	1,902	$	2,082	$	1,435	$	21,628	98	%
Restructured^(a)	9		-		156		25		6		16		6		209	1
90 days or less delinquent	1		-		-		4		-		-		-		4	-
>90 days delinquent or in
process of foreclosure	9		3		205		-		6		-		12		226	1
Total^(b)	849	$	3,919	$	7,845	$	4,838	$	1,914	$	2,098	$	1,453	$	22,067	100	%
Allowance for credit losses:
Specific		$	-	$	16	$	1	$	6	$	1	$	-	$	24	-	%
General			35		47		29		8		15		13		147	1
Total allowance for credit losses		$	35	$	63	$	30	$	14	$	16	$	13	$	171	1	%

(a) Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. See discussion of troubled debt restructurings below.

(b) Does not reflect allowance for credit losses.

(c) 100 percent of the commercial mortgages held at such respective dates were current as to payments of principal and interest. There were no significant amounts of nonperforming commercial mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented.

Schedule of changes in the allowance for losses on Mortgage and other loans receivable

	2016						2015						2014
Years Ended December 31,		Commercial		Other				Commercial		Other				Commercial		Other
(in millions)		Mortgages		Loans		Total		Mortgages		Loans		Total		Mortgages		Loans		Total
Allowance, beginning of year	$	171	$	137	$	308	$	159	$	112	$	271	$	201	$	111	$	312
Loans charged off		(13)		(2)		(15)		(23)		(6)		(29)		(29)		(39)		(68)
Recoveries of loans previously
charged off		11		-		11		4		1		5		18		16		34
Net charge-offs		(2)		(2)		(4)		(19)		(5)		(24)		(11)		(23)		(34)
Provision for loan losses		25		(32)		(7)		31		27		58		(31)		23		(8)
Other		-		-		-		-		3		3		-		1		1
Allowance, end of year	$	194 ^*	$	103	$	297	$	171 ^*	$	137	$	308	$	159 ^*	$	112	$	271

* Of the total allowance at the end of the year, $11 million, $24 million and $55 million relates to individually assessed credit losses on $280 million, $507 million and $192 million of commercial mortgages as of December 31, 2016, 2015 and 2014, respectively.