MetLife 2013 Annual Report Download - page 136

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
8. Investments (continued)
Past Due and Interest Accrual Status of Mortgage Loans
The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both
December 31, 2013 and 2012. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows:
commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and accrual status of mortgage
loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:
Past Due Greater than 90 Days Past Due and Still Accruing Interest Nonaccrual Status
December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012 December 31, 2013 December 31, 2012
(In millions)
Commercial .................. $ 12 $ 2 $12 $— $191 $ 84
Agricultural ................... 44 116 — 53 47 67
Residential ................... 79 29 — — 65 18
Total ...................... $135 $147 $12 $53 $303 $169
Impaired Mortgage Loans
Impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, by portfolio segment, were as follows at and
for the years ended:
Loans with a Valuation Allowance Loans without a Valuation Allowance All Impaired Loans
Unpaid
Principal
Balance Recorded Investment Valuation Allowances Carrying Value
Unpaid
Principal
Balance Recorded Investment
Unpaid
Principal
Balance Carrying Value
Average
Recorded
Investment Interest Income
(In millions)
December 31, 2013:
Commercial ..................... $214 $210 $ 58 $152 $299 $296 $513 $448 $526 $15
Agricultural ...................... 68 66 7 59 35 34 103 93 153 9
Residential ...................... 12 12 1 11 5 4 17 15 14 —
Total ......................... $294 $288 $ 66 $222 $339 $334 $633 $556 $693 $24
December 31, 2012:
Commercial ..................... $445 $436 $ 94 $342 $103 $103 $548 $445 $464 $14
Agricultural ...................... 110 107 21 86 79 74 189 160 204 8
Residential ...................... 13 13 2 11 — — 13 11 13 —
Total ......................... $568 $556 $117 $439 $182 $177 $750 $616 $681 $22
Unpaid principal balance is generally prior to any charge-offs. Interest income recognized is primarily cash basis income. The average recorded
investment for commercial, agricultural and residential mortgage loans was $313 million, $252 million and $23 million, respectively, for the year ended
December 31, 2011; and interest income recognized for commercial, agricultural and residential mortgage loans was $6 million, $5 million and $0,
respectively, for the year ended December 31, 2011.
Mortgage Loans Modified in a Troubled Debt Restructuring
For a small portion of the mortgage loan portfolio, classified as troubled debt restructurings, concessions are granted related to borrowers
experiencing financial difficulties. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date
at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concession
granted is considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the
continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a
troubled debt restructuring. Accordingly, the carrying value (after specific valuation allowance) before and after modification through a troubled debt
restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. The
number of mortgage loans and carrying value after specific valuation allowance of mortgage loans modified during the period in a troubled debt
restructuring were as follows:
Years Ended December 31,
2013 2012
Number of
Mortgage
Loans Carrying Value after Specific Valuation Allowance
Number of
Mortgage
Loans
Carrying Value after
Specific
Valuation Allowance
Pre-
Modification Post- Modification Pre- Modification Post- Modification
(In millions) (In millions)
Commercial ........................................... 1 $49 $49 1 $222 $199
Agricultural ............................................ 3 28 28 5 17 16
Residential ............................................ 27 5 5 — — —
Total ............................................... 31 $82 $82 6 $239 $215
The Company had one residential mortgage loan modified in a troubled debt restructuring with a subsequent payment default with a carrying value
of less than $1 million at December 31, 2013. There were no mortgage loans modified in a troubled debt restructuring with a subsequent payment
default at December 31, 2012. Payment default is determined in the same manner as delinquency status as described above.
128 MetLife, Inc.