Wells Fargo 2015 Annual Report Download - page 166

Note 6: Loans and Allowance for Credit Losses (continued)
approximately $75 billion at December 31, 2015 and $87 billion
at December 31, 2014.
We issue commercial letters of credit to assist customers in
purchasing goods or services, typically for international trade. At
December 31, 2015 and 2014, we had $1.1 billion and
$1.2 billion, respectively, of outstanding issued commercial
letters of credit. We also originate multipurpose lending
commitments under which borrowers have the option to draw
on the facility for different purposes in one of several forms,
including a standby letter of credit. See Note 14 (Guarantees,
Pledged Assets and Collateral) for additional information on
standby letters of credit.
When we make commitments, we are exposed to credit risk.
The maximum credit risk for these commitments will generally
be lower than the contractual amount because a significant
portion of these commitments are expected to expire without
being used by the customer. In addition, we manage the
potential risk in commitments to lend by limiting the total
amount of commitments, both by individual customer and in
total, by monitoring the size and maturity structure of these
commitments and by applying the same credit standards for
these commitments as for all of our credit activities.
For loans and commitments to lend, we generally require
collateral or a guarantee. We may require various types of
collateral, including commercial and consumer real estate, autos,
other short-term liquid assets such as accounts receivable or
inventory and long-lived assets, such as equipment and other
business assets. Collateral requirements for each loan or
commitment may vary based on the loan product and our
assessment of a customer’s credit risk according to the specific
credit underwriting, including credit terms and structure.
The contractual amount of our unfunded credit
commitments, including unissued standby and commercial
letters of credit, is summarized by portfolio segment and class of
financing receivable in Table 6.4. The table excludes the standby
and commercial letters of credit and temporary advance
arrangements described above.
Table 6.4: Unfunded Credit Commitments
(in millions)
Dec 31,
2015
Dec 31,
2014
Commercial:
Commercial and industrial $ 296,710 278,093
Real estate mortgage 7,378 6,134
Real estate construction 18,047 15,587
Lease financing — 3
Total commercial 322,135 299,817
Consumer:
Real estate 1-4 family first mortgage 34,621 32,055
Real estate 1-4 family
junior lien mortgage 43,309 45,492
Credit card 98,904 95,062
Other revolving credit and installment 27,899 24,816
Total consumer 204,733 197,425
Total unfunded
credit commitments $526,868 497,242
Wells Fargo & Company
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