AIG 2013 Annual Report Download - page 281

Mortgage and other loans receivable include commercial mortgages, life insurance policy loans, commercial loans,
and other loans and notes receivable. Commercial mortgages, commercial loans, and other loans and notes
receivable are carried at unpaid principal balances less credit allowances and plus or minus adjustments for the
accretion or amortization of discount or premium. Interest income on such loans is accrued as earned.
Direct costs of originating commercial mortgages, commercial loans, and other loans and notes receivable, net of
nonrefundable points and fees, are deferred and included in the carrying amount of the related receivables. The
amount deferred is amortized to income as an adjustment to earnings using the interest method.
Life insurance policy loans are carried at unpaid principal amount. There is no allowance for policy loans because
these loans serve to reduce the death benefit paid when the death claim is made and the balances are effectively
collateralized by the cash surrender value of the policy.
The following table presents the composition of Mortgages and other loans receivable:
Commercial mortgages*$ 13,788
Life insurance policy loans 2,952
Commercial loans, other loans and notes receivable 3,147
Total mortgage and other loans receivable 19,887
Allowance for losses (405)
Mortgage and other loans receivable, net $ 19,482
* Commercial mortgages primarily represent loans for office, retail and industrial properties, with exposures in California and New York
representing the largest geographic concentrations (18 percent and 17 percent, respectively, at December 31, 2013 and 22 percent and 15 percent,
respectively, at December 31, 2012).
The following table presents the credit quality indicators for commercial mortgage loans:
Credit Quality Indicator:
In good standing
Restructured(a)
90 days or less delinquent
>90 days delinquent or in process of
foreclosure
Total(b)
Allowance for losses
Credit Quality Indicator:
In good standing 998 $ 1,549 $ 4,698 $ 2,640 $ 1,654 $ 1,153 $ 1,671 $ 13,365 97%
Restructured(a) 8 50 207 7 2 – 22 288 2
90 days or less delinquent 4 – 17 – – – – 17 –
>90 days delinquent or in process of
foreclosure 6 – 13 26 – – 79 118 1
Total(b) 1,016 $ 1,599 $ 4,935 $ 2,673 $ 1,656 $ 1,153 $ 1,772 $ 13,788 100%
Allowance for losses $ 5 $ 74 $ 19 $ 19 $ 1 $ 41 $ 159 1%
(a) Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. See discussion of
troubled debt restructurings below.
(b) Does not reflect allowance for losses.
(c) Approximately 99 percent of the commercial mortgages held at such respective dates were current as to payments of principal and interest.
7. LENDING ACTIVITIES
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AIG 2013 Form 10-K 263
ITEM 8 / NOTE 7. LENDING ACTIVITIES
(in millions) December 31, 2013 December 31, 2012
$ 16,195
2,830
2,052
21,077
(312)
$ 20,765
Number Class
of Percent
December 31, 2013
(dollars in millions) Loans Apartments Offices Retail Industrial Hotel Others Total(c) of Total $
978 $ 2,786 $ 4,636 $ 3,364 $ 1,607 $ 1,431 $ 1,970 $ 15,794 98%
9 53 210 6 – – 85 354 2
2 ––5 ––– 5 –
6 – 42 – – – – 42 –
995 $ 2,839 $ 4,888 $ 3,375 $ 1,607 $ 1,431 $ 2,055 $ 16,195 100%
$ 10 $ 109 $ 9 $ 19 $ 3 $ 51 $ 201 1%
December 31, 2012
(dollars in millions)
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