Loans and Leases (Tables)

6 Months Ended

Jun. 30, 2016

Loans and Leases Receivable Disclosure [Abstract]

The following table presents our recorded investment in loans and leases, by segment and class, as of the dates indicated:



(In millions)	June 30, 2016			December 31, 2015
Institutional:
Investment funds:
U.S.	$	11,893		$	11,136
Non-U.S.	2,540			1,678
Commercial and financial:
U.S.	3,916			4,671
Non-U.S.	505			278
Purchased receivables:
U.S.	79			93
Non-U.S.	—			—
Lease financing:
U.S.	335			337
Non-U.S.	544			578
Total institutional	19,812			18,771
Commercial real estate:
U.S.	27			28
Total loans and leases	19,839			18,799
Allowance for loan and lease losses	(51		)	(46		)
Loans and leases, net of allowance for loan and lease losses	$	19,788		$	18,753

Recorded Investment in Each Class of Total Loans and Leases by Credit Quality Indicator

The following tables present our recorded investment in each class of loans and leases by credit quality indicator as of the dates indicated:



	Institutional
June 30, 2016	Investment Funds		Commercial and Financial		Purchased Receivables		Lease Financing		Commercial Real Estate		Total Loans and Leases
(In millions)	Investment Funds		Commercial and Financial		Purchased Receivables		Lease Financing		Commercial Real Estate		Total Loans and Leases
Investment grade⁽¹⁾	$	14,116	$	1,075	$	79	$	851	$	27	$	16,148
Speculative⁽²⁾	315		3,331		—		28		—		3,674
Special mention⁽³⁾	2		—		—		—		—		2
Doubtful⁽⁴⁾	—		15		—		—		—		15
Total	$	14,433	$	4,421	$	79	$	879	$	27	$	19,839



	Institutional
December 31, 2015	Investment Funds		Commercial and Financial		Purchased Receivables		Lease Financing		Commercial Real Estate		Total Loans and Leases
(In millions)	Investment Funds		Commercial and Financial		Purchased Receivables		Lease Financing		Commercial Real Estate		Total Loans and Leases
Investment grade⁽¹⁾	$	12,415	$	1,780	$	93	$	888	$	28	$	15,204
Speculative⁽²⁾	399		3,138		—		27		—		3,564
Special mention⁽³⁾	—		31		—		—		—		31
Total	$	12,814	$	4,949	$	93	$	915	$	28	$	18,799

⁽¹⁾Investment-grade loans and leases consist of counterparties with strong credit quality and low expected credit risk and probability of default. Ratings apply to counterparties with a strong capacity to support the timely repayment of any financial commitment.

⁽²⁾Speculative loans and leases consist of counterparties that face ongoing uncertainties or exposure to business, financial, or economic downturns. However, these counterparties may have financial flexibility or access to financial alternatives, which allow for financial commitments to be met.

⁽³⁾Special mention loans and leases consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects.

⁽⁴⁾ Doubtful loans and leases meet the same definition of substandard loans and leases (i.e., well-defined weaknesses that jeopardize repayment with the possibility that we will sustain some loss) with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable.

Schedule of Loans and Leases Receivable by Impairment Methodology

The following table presents our recorded investment in loans and leases, disaggregated based on our impairment methodology, as of the dates indicated:



	June 30, 2016						December 31, 2015
(In millions)	Institutional		Commercial Real Estate		Total Loans and Leases		Institutional		Commercial Real Estate		Total Loans and Leases
Loans and leases⁽¹⁾:
Individually evaluated for impairment	$	15	$	—	$	15	$	—	$	—	$	—
Collectively evaluated for impairment	19,797		27		19,824		18,771		28		18,799
Total	$	19,812	$	27	$	19,839	$	18,771	$	28	$	18,799

⁽¹⁾For those portfolios where there are a small number of loans each with a large balance, we review each loan annually for indicators of impairment. For those loans where no such indicators are identified, the loans are collectively evaluated for impairment. As of June 30, 2016 and December 31, 2015, $2 million and zero, respectively, of the allowance for loan and lease loss related to institutional loans individually evaluated for impairment. As of June 30, 2016 and December 31, 2015, $49 million and $46 million, respectively, of the allowance for loan and lease loss related to institutional loans collectively evaluated for impairment.

Impaired Loans

The following table presents information related to our recorded investment in impaired loans and leases for the dates or periods indicated:



	As of June 30, 2016						As of December 31, 2015
(In millions)	Recorded Investment		Unpaid Principal Balance		Related Allowance⁽¹⁾		Recorded Investment		Unpaid Principal Balance		Related Allowance⁽¹⁾
With no related allowance recorded:
CRE—property development—acquired credit-impaired	$	—	$	34	$	—	$	—	$	34	$	—
CRE—other—acquired credit-impaired	—		22		—		—		22		—
Total CRE	—		56		—		—		56		—
With an allowance recorded:
Institutional- commercial and financial lending⁽²⁾	15		15		2		—		—		—
Total Institutional	15		15		2		—		—		—
Total CRE and institutional	$	15	$	71	$	2	$	—	$	56	$	—

⁽¹⁾As of June 30, 2016 and December 31, 2015, there was an additional allowance for loan and lease losses of $49 million and $46 million, respectively, related to loans that were not impaired.

⁽²⁾ We identified $15 million of commercial and financing loans as impaired. The average recorded investment and related interest revenue recognized is $15 million and zero, respectively, for the three and six month periods ended June 30, 2016.

Schedule of Activity in the Allowance for Loan Losses

The following table presents activity in the allowance for loan and lease losses for the periods indicated:



	Three Months Ended June 30,
	2016			2015
(In millions)	Total Loans and Leases			Total Loans and Leases
Allowance for loan and lease losses⁽¹⁾:
Beginning balance	$	47		$	41
Provision for loan losses	4			2
Charge-offs	—			—
Ending balance	$	51		$	43

	Six Months Ended June 30,
	2016			2015
(In millions)	Total Loans and Leases			Total Loans and Leases
Allowance for loan and lease losses⁽¹⁾:
Beginning balance	$	46		$	37
Provision for loan losses	8			6
Charge-offs	(3		)	—
Ending balance	$	51		$	43

⁽¹⁾As of June 30, 2016, approximately $43 million of our allowance for loan and lease losses was related to senior secured loans included in the institutional segment; the remaining $8 million was related to other institutional segment loans.