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Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2018
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]  
Loans and Allowance for Credit Losses

7. Loans, Lending Commitments and Allowance for Credit Losses

Loans

  

The Firm’s loans held for investment are recorded at amortized cost, and its loans held for sale are recorded at the lower of cost or fair value in the balance sheets. For a further description of these loans, refer to Note 7 to the financial statements in the 2017 Form 10-K. See Note 3 for further information regarding Loans and lending commitments held at fair value. See Note 11 for details of current commitments to lend in the future.

 

Loans by Type
At March 31, 2018
Loans HeldLoans Held
$ in millionsfor Investmentfor SaleTotal Loans
Corporate loans$31,903$12,000$43,903
Consumer loans26,877—26,877
Residential real estate loans26,5663326,599
Wholesale real estate loans10,0211,97811,999
Total loans, gross95,36714,011109,378
Allowance for loan losses(243)—(243)
Total loans, net$95,124$14,011$109,135
At December 31, 2017
Loans HeldLoans Held
$ in millionsfor Investmentfor SaleTotal Loans
Corporate loans$29,754$9,456$39,210
Consumer loans26,808—26,808
Residential real estate loans26,6353526,670
Wholesale real estate loans9,9801,68211,662
Total loans, gross93,17711,173104,350
Allowance for loan losses(224)—(224)
Total loans, net$92,953$11,173$104,126

Loans by Interest Rate Type
AtAt
March 31,December 31,
$ in millions20182017
Fixed$14,252$13,339
Floating or adjustable94,88390,787
Total loans, net$109,135$104,126

Loans to Non-U.S. Borrowers
AtAt
March 31,December 31,
$ in millions20182017
Loans, net$16,110$9,977

Credit Quality

For a further discussion about the Firm’s evaluation of credit transactions and monitoring and credit quality indicators, as well as factors considered by the Firm in determining the allowance for loan losses and impairments, see Notes 2 and 7 to the financial statements in the 2017 Form 10-K.

Loans Held for Investment before Allowance by Credit Quality
At March 31, 2018
$ in millionsCorporateConsumerResidential Real Estate Wholesale Real EstateTotal
Pass$31,327$26,872$26,492$9,126$93,817
Special mention1625—460627
Substandard405—74435914
Doubtful9———9
Loss—————
Total$31,903$26,877$26,566$10,021$95,367

At December 31, 2017
$ in millionsCorporateConsumerResidential Real EstateWholesale Real EstateTotal
Pass$29,166$26,802$26,562$9,480$92,010
Special mention1886—200394
Substandard393—73300766
Doubtful7———7
Loss—————
Total$29,754$26,808$26,635$9,980$93,177

The following loans and lending commitments have been evaluated for a specific allowance. All remaining loans and lending commitments are assessed under the inherent allowance methodology.

Impaired Loans and Lending Commitments before Allowance
At March 31, 2018
Residential
$ in millionsCorporateReal EstateTotal
Loans
With allowance$15$—$15
Without allowance16949118
UPB9551146
Lending Commitments
Without allowance1$226$—$226
At December 31, 2017
Residential
$ in millionsCorporateReal EstateTotal
Loans
With allowance$16$—$16
Without allowance111845163
UPB14646192
Lending Commitments
Without allowance1$199$—$199

 

  • At March 31, 2018 and December 31, 2017, no allowance was recorded for these loans and lending commitments as the present value of the expected future cash flows (or, alternatively, the observable market price of the instrument or the fair value of the collateral held) equaled or exceeded the carrying value.

Impaired Loans and Allowance by Region
At March 31, 2018
$ in millionsAmericasEMEAAsiaTotal
Impaired loans$129$—$4$133
Allowance for loan losses199$42$2$243
At December 31, 2017
$ in millionsAmericasEMEAAsiaTotal
Impaired loans$160$9$10$179
Allowance for loan losses194273224

Troubled Debt Restructurings
AtAt
March 31,December 31,
$ in millions20182017
Loans$52$51
Lending commitments2528
Allowance for loan losses and lending
commitments610

Impaired loans and lending commitments classified as held for investment within corporate loans include TDRs as shown in the previous table. These restructurings typically include modifications of interest rates, collateral requirements, other loan covenants and payment extensions.

Allowance for Loan Losses Rollforward
$ in millionsCorporateConsumerResidential Real EstateWholesale Real EstateTotal
December 31, 2017$126$4$24$70$224
Provision (release)6—(1)1419
Other(1)——1—
March 31, 2018$131$4$23$85$243
Inherent$126$4$23$85$238
Specific5———5

$ in millionsCorporateConsumerResidential Real EstateWholesale Real EstateTotal
December 31, 2016$195$4$20$55$274
Recoveries1———1
Provision (release)13——922
March 31, 2017$209$4$20$64$297
Inherent$142$4$20$64$230
Specific67———67

Allowance for Lending Commitments Rollforward
$ in millionsCorporateConsumerResidential Real EstateWholesale Real EstateTotal
December 31, 2017$194$1$—$3$198
Provision (release)7———7
Other—————
March 31, 2018$201$1$—$3$205
Inherent$200$1$—$3$204
Specific1———1

$ in millionsCorporateConsumerResidential Real EstateWholesale Real EstateTotal
December 31, 2016$185$1$—$4$190
Provision (release)3———3
March 31, 2017$188$1$—$4$193
Inherent$186$1$—$4$191
Specific2———2

Employee Loans
AtAt
March 31,December 31,
$ in millions20182017
Balance$3,687$4,185
Allowance for loan losses(75)(77)
Balance, net$3,612$4,108
Repayment term range, in years1 to 201 to 20

Employee loans are granted in conjunction with a program established to retain and recruit certain employees, are full recourse and generally require periodic repayments. These loans are recorded in Customer and other receivables in the balance sheets. The Firm establishes an allowance for loan amounts it does not consider recoverable, and the related provision is recorded in Compensation and benefits expense.