Loans and Allowance for Credit Losses |
5. LOANS AND ALLOWANCE FOR CREDIT LOSSES
The major categories of loans outstanding showing those subject to SOP 03-3 are presented in the following table. Certain loans acquired in the Wachovia acquisition are subject to SOP 03-3. These include loans where it is probable that we will not collect all contractual principal and interest. Loans within the scope of SOP 03-3 are initially recorded at fair value, and no allowance is carried over or initially recorded. Outstanding balances of all other loans are presented net of unearned income, net deferred loan fees, and unamortized discount and premium totaling $16,535million at June30, 2009, and $16,891million, at December31, 2008.
June 30, 2009 Dec. 31, 2008
All All
SOP 03-3 other SOP 03-3 other
(in millions) loans loans Total loans loans Total
Commercial and commercial real estate:
Commercial $ 2,667 179,370 182,037 4,580 197,889 202,469
Other real estate mortgage 5,826 97,828 103,654 7,762 95,346 103,108
Real estate construction 4,295 28,943 33,238 4,503 30,173 34,676
Lease financing 14,555 14,555 15,829 15,829
Total commercial and commercial real estate 12,788 320,696 333,484 16,845 339,237 356,082
Consumer:
Real estate 1-4 family first mortgage 40,471 196,818 237,289 39,214 208,680 247,894
Real estate 1-4 family junior lien mortgage 398 106,626 107,024 728 109,436 110,164
Credit card 23,069 23,069 23,555 23,555
Other revolving credit and installment 90,654 90,654 151 93,102 93,253
Total consumer 40,869 417,167 458,036 40,093 434,773 474,866
Foreign 1,554 28,540 30,094 1,859 32,023 33,882
Total loans $ 55,211 766,403 821,614 58,797 806,033 864,830
We consider a loan to be impaired under FAS 114, Accounting by Creditors for Impairment of a Loan an amendment of FASB Statement No.5 and 15, when, based on current information and events, we determine that we will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. We assess and account for as impaired certain nonaccrual commercial and commercial real estate loans that are over $5million and certain consumer, commercial and commercial real estate loans whose terms have been modified in a troubled debt restructuring. The recorded investment in impaired loans and the methodology used to measure impairment was:
June 30, Dec. 31,
(in millions) 2009 2008
Impairment measurement based on:
Collateral value method $ 247 88
Discounted cash flow method (1) 9,864 3,552
Total (2) $ 10,111 3,640
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