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Loans and Leases (Tables)
 12 Months Ended
Dec. 31, 2018
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, 2018
 
December 31, 2017
Domestic:
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
$
15,050

 
$
13,618

Senior secured bank loans
3,490

 
2,923

Loans to municipalities
902

 
2,105

Other
37

 
50

Commercial real estate
874

 
98

Lease financing(1)
—

 
267

Total domestic
20,353

 
19,061

Non-U.S.:
 
 
 
Commercial and financial:
 
 
 
Loans to investment funds
4,505

 
3,213

Senior secured bank loans
931

 
624

Lease financing(1)
—

 
396

Total non-U.S.
5,436

 
4,233

Total loans and leases
25,789

 
23,294

Allowance for loan and lease losses
(67
)
 
(54
)
Loans and leases, net of allowance
$
25,722

 
$
23,240


 
 
 
 
(1) Our leveraged lease portfolio was entirely sold off as of December 31, 2018.
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, 2018
Commercial and Financial
 
Commercial Real Estate
 
Lease
Financing
 
Total Loans and Leases
(In millions)
Investment grade(1)
$
19,599

 
$
874

 
$
—

 
$
20,473

Speculative(2)
5,308

 
—

 
—

 
5,308

Substandard(3)
8

 
—

 
—

 
8

Total
$
24,915

 
$
874

 
$
—

 
$
25,789

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(4)
29

 
—

 
—

 
29

Total
$
22,533

 
$
98

 
$
663

 
$
23,294

 
 
 
 
(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 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) Substandard loans and leases consist of counterparties with well-defined weaknesses that jeopardize repayment with the possibility we will sustain some loss.
(4) Special mention loans consist of counterparties with potential weaknesses that, if uncorrected, may result in deterioration of repayment prospects.
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, 2018
 
December 31, 2017
(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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment(1)
$
8

 
$
—

 
$
—

 
$
8

 
$
—

 
$
—

 
$
—

 
$
—

Collectively evaluated for impairment
24,907

 
874

 
—

 
25,781

 
22,533

 
98

 
663

 
23,294

Total
$
24,915

 
$
874

 
$
—

 
$
25,789

 
$
22,533

 
$
98

 
$
663

 
$
23,294

 
 
 
 
(1) As of December 31, 2018, we had one loan for $8 million in the commercial and financial segment that was individually evaluated for impairment and deemed to be impaired. This loan was subsequently paid in full in January 2019. As of December 31, 2017, there were no impaired loans.
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,
(In millions)
2018
 
2017
 
2016
Allowance for loan and lease losses:
Beginning balance
$
54

 
$
53

 
$
46

Provision for loan and lease losses(1)
15

 
2

 
10

Charge-offs(1)
(2
)
 
(1
)
 
(3
)
Ending balance
$
67


$
54


$
53

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