XML 83 R40.htm IDEA: XBRL DOCUMENT v3.8.0.1
Loans and Leases (Tables)
 12 Months Ended
Dec. 31, 2017
Loans and Leases Receivable Disclosure [Abstract]  
Net Loans
The following table presents our recorded investment in loans and leases, by segment, as of the dates indicated:
(In millions)
December 31, 2017
 
December 31, 2016
Domestic:
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
$
13,618

 
$
11,734

Senior secured bank loans
2,923

 
3,256

Loans to municipalities
2,105

 
1,352

Other
50

 
70

Commercial real estate
98

 
27

Lease financing
267

 
338

Total domestic
19,061

 
16,777

Non-U.S.:
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
3,213

 
2,224

Senior secured bank loans
624

 
252

Lease financing
396

 
504

Total non-U.S.
4,233

 
2,980

Total loans and leases
23,294

 
19,757

Allowance for loan and lease losses
(54
)
 
(53
)
Loans and leases, net of allowance
$
23,240

 
$
19,704
Schedule of Components of Leveraged Lease Investments
The components of our net investment in leveraged lease financing, included in the lease financing segment in the preceding table, were as follows as of December 31, 2017 and December 31, 2016:
(In millions)
2017
 
2016
Net rental income receivable
$
808

 
$
1,039

Estimated residual values
89

 
89

Unearned income
(234
)
 
(286
)
Investment in leveraged lease financing
663

 
842

Less: related deferred income tax liabilities
(184
)
 
(313
)
Net investment in leveraged lease financing
$
479

 
$
529
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:
 
 
 
 
December 31, 2017
Commercial and Financial
 
Commercial Real Estate
 
Lease
Financing
 
Total Loans and Leases
(In millions)
Investment grade(1)
$
17,866

 
$
98

 
$
663

 
$
18,627

Speculative(2)
4,638

 
—

 
—

 
4,638

Special mention(3)
29

 
—

 
—

 
29

Total
$
22,533

 
$
98

 
$
663

 
$
23,294

December 31, 2016
Commercial and Financial
 
Commercial Real Estate
 
Lease
Financing
 
Total Loans and Leases
(In millions)
Investment grade(1)
$
14,889

 
$
27

 
$
842

 
$
15,758

Speculative(2)
3,984

 
—

 
—

 
3,984

Substandard(4)
15

 
—

 
—

 
15

Total
$
18,888

 
$
27

 
$
842

 
$
19,757

 
 
 
 
(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) Substandard loans and leases consist of counterparties with well-defined weakness that jeopardizes repayment with the possibility we will sustain some loss
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:
 
December 31, 2017
 
December 31, 2016
(In millions)
Commercial and Financial
 
Commercial Real Estate
 
Lease Financing
 
Total Loans and Leases
 
Commercial and Financial
 
Commercial Real Estate
 
Lease Financing
 
Total Loans and Leases
Loans and leases(1):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
—

 
$
—

 
$
—

 
$
—

 
$
15

 
$
—

 
$
—

 
$
15

Collectively evaluated for impairment
22,533

 
98

 
663

 
23,294

 
18,873

 
27

 
842

 
19,742

Total
$
22,533

 
$
98

 
$
663

 
$
23,294

 
$
18,888

 
$
27

 
$
842

 
$
19,757

 
 
 
 
(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 December 31, 2017 , no loans were individually evaluated for impairment. As of December 31, 2016, $195 thousand of the allowance for loan and lease loss related to commercial and financial loans were individually evaluated for impairment, and the remainder of the allowance related to commercial and financial loans collectively evaluated for impairment.
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:
 
Years Ended December 31,
 
2017
 
2016
 
2015
(In millions)
Total Loans and Leases
 
Total Loans and Leases
 
Total Loans and Leases
Allowance for loan and lease losses(1):
 
 
 
 
 
Beginning balance
$
53

 
$
46

 
$
38

Provision for loan and lease losses
2

 
10

 
12

Charge-offs
(1
)
 
(3
)
 
(4
)
Ending balance
$
54

 
$
53

 
$
46

 
 
 
 
(1) The provisions and charge-offs for loans and leases were attributable to exposure to senior secured loans to non-investment grade borrowers, purchased in connection with our participation in syndicated loans.