Bank of America 2009 Annual Report Download - page 69

during the last half of the year, the unsecured consumer portfolios within
Global Card Services experienced lower levels of delinquency and by the
fourth quarter consumer credit began to stabilize and in some cases
improve. As part of our ongoing risk mitigation and consumer client sup-
port initiatives, we have been working with borrowers to modify their loans
to terms that better align with their current ability to pay. Under certain
circumstances, we identify these as TDRs which are modifications where
an economic concession is granted to a borrower experiencing financial
difficulty. For more information on TDRs and portfolio impacts, see Non-
performing Consumer Loans and Foreclosed Properties Activity beginning
on page 74 and Note 6 – Outstanding Loans and Leases to the Con-
solidated Financial Statements.
Table 17 presents our consumer loans and leases and our managed
credit card portfolio, and related credit quality information. Nonperforming
loans do not include consumer credit card, consumer loans secured by
personal property or unsecured consumer loans that are past due as
these loans are generally charged off no later than the end of the month
in which the account becomes 180 days past due. Real estate-secured
past due loans, repurchased pursuant to our servicing agreement with
Government National Mortgage Association (GNMA) are not reported as
nonperforming as repayments are insured by the Federal Housing Admin-
istration (FHA). Additionally, nonperforming loans and accruing balances
past due 90 days or more do not include the Countrywide purchased
impaired loans even though the customer may be contractually past due.
Loans that were acquired from Countrywide that were considered
impaired were written down to fair value upon acquisition. In addition to
being included in the “Outstandings” column in the following table, these
loans are also shown separately, net of purchase accounting adjust-
ments, for increased transparency in the “Countrywide Purchased
Impaired Loan Portfolio” column. For additional information, see Note 6 –
Outstanding Loans and Leases to the Consolidated Financial Statements.
Under certain circumstances, loans that were originally classified as
discontinued real estate loans upon acquisition have been subsequently
modified and are now included in the residential mortgage portfolio shown
below. The impact of the Countrywide portfolio on certain credit statistics
is reported where appropriate. Refer to the Countrywide Purchased
Impaired Loan Portfolio discussion beginning on page 71 for more
information.
Loans that were acquired from Merrill Lynch were recorded at fair
value including those that were considered impaired upon acquisition.
The Merrill Lynch consumer purchased impaired loan portfolio did not
materially alter the reported credit quality statistics of the consumer port-
folios and is, therefore, excluded from the “Countrywide Purchased
Impaired Loan Portfolio” column and discussion that follows. In addition,
the nonperforming loans and delinquency statistics presented below
include the Merrill Lynch purchased impaired loan portfolio based on the
customer’s performance under the contractual terms of the loan. At
December 31, 2009, consumer loans included $47.2 billion from Merrill
Lynch of which $2.0 billion of residential mortgage and $146 million of
home equity loans were included in the Merrill Lynch purchased impaired
loan portfolio. There were no reported net charge-offs on these loans
during 2009 as the initial fair value at acquisition date already considered
the estimated credit losses.
Table 17 Consumer Loans and Leases
December 31
Outstandings Nonperforming
(1)
Accruing Past Due 90
Days or More
(2)
Countrywide Purchased
Impaired Loan Portfolio
(Dollars in millions) 2009 2008 2009 2008 2009 2008 2009 2008
Held basis
Residential mortgage
(3)
$242,129 $248,063 $16,596 $7,057 $11,680 $ 372 $11,077 $10,013
Home equity 149,126 152,483 3,804 2,637 ––13,214 14,099
Discontinued real estate
(4)
14,854 19,981 249 77 ––13,250 18,097
Credit card – domestic 49,453 64,128 n/a n/a 2,158 2,197 n/a n/a
Credit card – foreign 21,656 17,146 n/a n/a 500 368 n/a n/a
Direct/Indirect consumer
(5)
97,236 83,436 86 26 1,488 1,370 n/a n/a
Other consumer
(6)
3,110 3,442 104 91 34n/a n/a
Total held $577,564 $588,679 $20,839 $9,888 $15,829 $4,311 $37,541 $42,209
Supplemental managed basis data
Credit card – domestic $129,642 $154,151 n/a n/a $ 5,408 $5,033 n/a n/a
Credit card – foreign 31,182 28,083 n/a n/a 799 717 n/a n/a
Total credit card – managed $160,824 $182,234 n/a n/a $ 6,207 $5,750 n/a n/a
(1) Nonperforming held consumer loans and leases as a percentage of outstanding consumer loans and leases were 3.61 percent (3.86 percent excluding the Countrywide purchased impaired loan portfolio) and 1.68
percent (1.81 percent excluding the Countrywide purchased impaired loan portfolio) at December 31, 2009 and 2008.
(2) Accruing held consumer loans and leases past due 90 days or more as a percentage of outstanding consumer loans and leases were 2.74 percent (2.93 percent excluding Countrywide purchased impaired loan
portfolio) and 0.73 percent (0.79 percent excluding the Countrywide purchased impaired loan portfolio) at December 31, 2009 and 2008. Residential mortgages accruing past due 90 days or more represent
repurchases of insured or guaranteed loans. See Residential Mortgage discussion for more detail.
(3) Outstandings include foreign residential mortgages of $552 million at December 31, 2009 mainly from the Merrill Lynch acquisition. We did not have any foreign residential mortgage loans at December 31, 2008.
(4) Outstandings include $13.4 billion and $18.2 billion of pay option loans and $1.5 billion and $1.8 billion of subprime loans at December 31, 2009 and 2008. We no longer originate these products.
(5) Outstandings include dealer financial services loans of $41.6 billion and $40.1 billion, consumer lending loans of $19.7 billion and $28.2 billion, securities-based lending margin loans of $12.9 billion and $0, and
foreign consumer loans of $8.0 billion and $1.8 billion at December 31, 2009 and 2008, respectively.
(6) Outstandings include consumer finance loans of $2.3 billion and $2.6 billion, and other foreign consumer loans of $709 million and $618 million at December 31, 2009 and 2008.
n/a = not applicable
Bank of America 2009 67