LENDING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2018

Composition of Mortgages and other loans receivable

	December 31,			December 31,
(in millions)		2018		2017
Commercial mortgages^*	$	32,882	$	28,596
Residential mortgages		6,532		5,398
Life insurance policy loans		2,147		2,295
Commercial loans, other loans and notes receivable		1,971		1,056
Total mortgage and other loans receivable		43,532		37,345
Allowance for credit losses		(397)		(322)
Mortgage and other loans receivable, net	$	43,135	$	37,023

* Commercial mortgages primarily represent loans for apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 22 percent and 11 percent, respectively, at December 31, 2018, and 23 percent and 12 percent, respectively, at December 31, 2017).

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, 2018
Loan-to-Value Ratios^(b)
Less than 65%	$	19,204	$	2,543	$	250	$	21,997
65% to 75%		9,060		300		203		9,563
76% to 80%		476		20		15		511
Greater than 80%		596		103		112		811
Total commercial mortgages	$	29,336	$	2,966	$	580	$	32,882

December 31, 2017
Loan-to-Value Ratios^(b)
Less than 65%	$	18,000	$	1,525	$	351	$	19,876
65% to 75%		6,038		193		184		6,415
76% to 80%		569		40		-		609
Greater than 80%		1,416		206		74		1,696
Total commercial mortgages	$	26,023	$	1,964	$	609	$	28,596

(a) The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio was 1.9X and 2.1X at December 31, 2018 and 2017, respectively.

(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. Our weighted average loan-to-value ratio was 58 percent and 57 percent at December 31, 2018, and 2017, respectively.

Schedule of credit quality indicators for the commercial mortgage loans

	Number															Percent
	of	Class														of
(dollars in millions)	Loans	Apartments			Offices		Retail	Industrial			Hotel		Others		Total^(c)	Total $
December 31, 2018
Credit Quality Performance
Indicator:
In good standing	762	$	11,190	$	9,774	$	5,645	$	3,074	$	2,507	$	580	$	32,770	100	%
Restructured^(a)	2		-		96		-		-		16		-		112	-
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total^(b)	764	$	11,190	$	9,870	$	5,645	$	3,074	$	2,523	$	580	$	32,882	100	%
Allowance for credit losses:
Specific			-		2		-		-		1		-		3	-	%
General			122		104		51		13		19		6		315	1
Total allowance for credit losses		$	122	$	106	$	51	$	13	$	20	$	6	$	318	1	%

December 31, 2017
Credit Quality Performance
Indicator:
In good standing	778	$	8,163	$	8,585	$	5,338	$	2,023	$	2,373	$	1,960	$	28,442	99	%
Restructured^(a)	5		-		115		23		-		16		-		154	1
90 days or less delinquent	-		-		-		-		-		-		-		-	-
>90 days delinquent or in
process of foreclosure	-		-		-		-		-		-		-		-	-
Total^(b)	783	$	8,163	$	8,700	$	5,361	$	2,023	$	2,389	$	1,960	$	28,596	100	%
Allowance for credit losses:
Specific		$	-	$	3	$	1	$	-	$	1	$	-	$	5	-	%
General			72		94		37		6		15		18		242	1
Total allowance for credit losses		$	72	$	97	$	38	$	6	$	16	$	18	$	247	1	%

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

(b) Does not reflect allowance for credit losses.

(c) Our commercial mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. 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

	2018						2017						2016
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	$	247	$	75	$	322	$	194	$	103	$	297	$	171	$	137	$	308
Loans charged off		(17)		(2)		(19)		(22)		(3)		(25)		(13)		(2)		(15)
Recoveries of loans previously
charged off		-		1		1		-		1		1		11		-		11
Net charge-offs		(17)		(1)		(18)		(22)		(2)		(24)		(2)		(2)		(4)
Provision for loan losses		88		5		93		75		(26)		49		25		(32)		(7)
Other		-		-		-		-		-		-		-		-		-
Allowance, end of year	$	318 ^*	$	79	$	397	$	247 ^*	$	75	$	322	$	194 ^*	$	103	$	297

* Of the total allowance at the end of the year, $3 million, $5 million and $11 million relates to individually assessed credit losses on $54 million, $82 million and $280 million of commercial mortgages as of December 31, 2018, 2017 and 2016, respectively.