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LENDING ACTIVITIES (Tables)
12 Months Ended
Dec. 31, 2019
LENDING ACTIVITIES  
Composition of Mortgages and other loans receivable

 

December 31,

 

December 31,

(in millions)

 

2019

 

2018

Commercial mortgages*

$

36,170

$

32,882

Residential mortgages

 

6,683

 

6,532

Life insurance policy loans

 

2,065

 

2,147

Commercial loans, other loans and notes receivable

 

2,504

 

1,971

Total mortgage and other loans receivable

 

47,422

 

43,532

Allowance for credit losses

 

(438)

 

(397)

Mortgage and other loans receivable, net

$

46,984

$

43,135

*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 23 percent and 10 percent, respectively, at December 31, 2019, and 22 percent and 11 percent, respectively, at December 31, 2018).
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, 2019

 

 

 

 

 

 

 

 

Loan-to-Value Ratios(b)

 

 

 

 

 

 

 

 

Less than 65%

$

23,013

$

2,440

$

245

$

25,698

65% to 75%

 

9,007

 

899

 

40

 

9,946

76% to 80%

 

200

 

6

 

-

 

206

Greater than 80%

 

184

 

2

 

134

 

320

Total commercial mortgages

$

32,404

$

3,347

$

419

$

36,170

 

 

 

 

 

 

 

 

 

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

(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 2.0X and 1.9X at December 31, 2019 and 2018, 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 56 percent and 58 percent at December 31, 2019, and 2018, 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, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit Quality Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In good standing

736

 

$

13,698

$

10,553

$

5,332

$

3,663

$

2,211

$

522

$

35,979

99

%

Restructured(a)

3

 

 

-

 

89

 

-

 

-

 

101

 

-

 

190

1

 

90 days or less delinquent

1

 

 

1

 

-

 

-

 

-

 

-

 

-

 

1

-

 

>90 days delinquent or in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

process of foreclosure

-

 

 

-

 

-

 

-

 

-

 

-

 

-

 

-

-

 

Total(b)

740

 

$

13,699

$

10,642

$

5,332

$

3,663

$

2,312

$

522

$

36,170

100

%

Allowance for credit losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specific

 

 

$

-

$

2

$

1

$

-

$

6

$

-

$

9

-

%

General

 

 

 

81

 

153

 

44

 

30

 

14

 

5

 

327

1

 

Total allowance for credit losses

 

 

$

81

$

155

$

45

$

30

$

20

$

5

$

336

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%

(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

Years Ended December 31,

2019

 

2018

 

2017

 

 

Commercial

 

 

Other

 

 

 

 

Commercial

 

 

Other

 

 

 

 

Commercial

 

 

Other

 

 

(in millions)

 

Mortgages

 

 

Loans

 

Total

 

 

Mortgages

 

 

Loans

 

Total

 

 

Mortgages

 

 

Loans

 

Total

Allowance, beginning of year

$

318

 

$

79

$

397

 

$

247

 

$

75

$

322

 

$

194

 

$

103

$

297

Loans charged off

 

(2)

 

 

(3)

 

(5)

 

 

(17)

 

 

(2)

 

(19)

 

 

(22)

 

 

(3)

 

(25)

Recoveries of loans previously

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

charged off

 

-

 

 

-

 

-

 

 

-

 

 

1

 

1

 

 

-

 

 

1

 

1

Net charge-offs

 

(2)

 

 

(3)

 

(5)

 

 

(17)

 

 

(1)

 

(18)

 

 

(22)

 

 

(2)

 

(24)

Provision for loan losses

 

20

 

 

26

 

46

 

 

88

 

 

5

 

93

 

 

75

 

 

(26)

 

49

Allowance, end of year

$

336

*

$

102

$

438

 

$

318

*

$

79

$

397

 

$

247

*

$

75

$

322

*Of the total allowance at the end of the year, $10 million, $3 million and $5 million relate to individually assessed credit losses on $148 million, $54 million and $82 million of commercial mortgages as of December 31, 2019, 2018 and 2017, respectively.