LOANS AND LEASES

A summary of the loans and leases portfolio follows:



	December 31,
(in millions)	2015		2014
Commercial		$33,264		$31,431
Commercial real estate	8,971		7,809
Leases	3,979		3,986
Total commercial	46,214		43,226
Residential mortgages	13,318		11,832
Home equity loans	2,557		3,424
Home equity lines of credit	14,674		15,423
Home equity loans serviced by others ⁽¹⁾	986		1,228
Home equity lines of credit serviced by others ⁽¹⁾	389		550
Automobile	13,828		12,706
Student	4,359		2,256
Credit cards	1,634		1,693
Other retail	1,083		1,072
Total retail	52,828		50,184
Total loans and leases ^{(2) (3)}		$99,042		$93,410

⁽¹⁾ The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽²⁾ Excluded from the table above are loans held for sale totaling $365 million and $281 million as of December 31, 2015 and 2014, respectively.

⁽³⁾Mortgage loans serviced for others by the Company’s subsidiaries are not included above, and amounted to $17.6 billion and $17.9 billion at December 31, 2015 and 2014, respectively.

Loans held for sale at fair value totaled $325 million and $256 million at December 31, 2015 and 2014, respectively, and consisted of residential mortgages originated for sale of $268 million and the commercial trading portfolio of $57 million as of December 31, 2015. As of December 31, 2014, residential mortgages originated for sale were $213 million, and commercial trading portfolio totaled $43 million. Other loans held for sale totaled $40 million and $25 million as of December 31, 2015 and 2014, respectively, and consisted of commercial loan syndications.

Loans pledged as collateral for FHLB borrowed funds totaled $23.2 billion and $22.0 billion at December 31, 2015 and 2014, respectively. This collateral consists primarily of residential mortgages and home equity loans. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, totaled $15.9 billion and $11.8 billion at December 31, 2015 and 2014, respectively.

During the year ended December 31, 2015, the Company purchased automobile loans with an outstanding principal balance of $1.3 billion, a portfolio of residential mortgages with an outstanding principal balance of $1.1 billion, and a portfolio of student loans with an outstanding principal balance of $957 million. During the year ended December 31, 2014, the Company purchased a portfolio of residential loans with an outstanding principal balance of $1.9 billion, a portfolio of auto loans with an outstanding principal balance of $1.7 billion and a portfolio of student loans with an outstanding principal balance of $59 million.

During the year ended December 31, 2015, the Company sold a portfolio of commercial loans with an outstanding principal balance of $401 million as part of the Company’s loan syndication project, residential mortgages with an outstanding principal balance of $273 million, and $41 million of credit card balances associated with a terminated agent credit card servicing agreement. During the year ended December 31, 2014, in addition to the $1.0 billion loans sold as part of the Company's sale of its Chicago-area retail branches, the Company sold portfolios of residential mortgage loans with outstanding principal balances of $126 million and student loans of $357 million, as well as commercial loans with an outstanding principal balance of $301 million.

The Company is engaged in the leasing of equipment for commercial use, with primary lease concentrations to Fortune 1000 companies for large capital equipment acquisitions. A lessee is evaluated from a credit perspective using the same underwriting standards and procedures as for a loan borrower. A lessee is expected to make rental payments based on its cash flows and the viability of its balance sheet. Leases are usually not evaluated as collateral-based transactions, and therefore the lessee’s overall financial strength is the most important credit evaluation factor.

A summary of the investment in leases, before the ALLL, is as follows:



	December 31,
(in millions)	2015		2014
Direct financing leases		$3,898		$3,873
Leveraged leases	81		113
Total leases		$3,979		$3,986

The components of the investment in leases, before the ALLL, are as follows:



	December 31,
(in millions)	2015			2014
Total future minimum lease rentals		$3,195			$3,324
Estimated residual value of leased equipment (non-guaranteed)	1,157			1,059
Initial direct costs	22			22
Unearned income on minimum lease rentals and estimated residual value of leased equipment	(395		)	(419		)
Total leases		$3,979			$3,986

At December 31, 2015, the future minimum lease rentals on direct financing and leveraged leases are as follows:



Year Ended December 31,	(in millions)
2016		$707
2017	588
2018	528
2019	445
2020	327
Thereafter	600
Total		$3,195

Pre-tax income on leveraged leases was $2 million, $2 million and $3 million for the years ended December 31, 2015, 2014 and 2013, respectively. The income tax expense on this income was $1 million for the years ended December 31, 2015, 2014 and 2013. There was no investment credit recognized in income during these years.