AIG 2015 Annual Report Download - page 280

ITEM 8 / NOTE 6. LENDING ACTIVITIES

280
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. Premiums and discounts on
purchased residential mortgages are also amortized to income as an adjustment to earnings using the interest method.
Life insurance policy loans are carried at unpaid principal balances. 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 Mortgage and other loans receivable, net:
December 31, December 31,
(in millions) 2015 2014
Commercial mortgages* $ 22,067 $ 18,909
Residential mortgages 2,758 1,007
Life insurance policy loans 2,597 2,710
Commercial loans, other loans and notes receivable 2,451 2,635
Total mortgage and other loans receivable 29,873 25,261
Allowance for credit losses (308) (271)
Mortgage and other loans receivable, net $ 29,565 $ 24,990
* Commercial mortgages primarily represent loans for offices, retail and apartments, with exposures in New York and California representing the largest
geographic concentrations (aggregating approximately 22 percent and 12 percent, respectively, at December 31, 2015, and 18 percent and 14 percent,
respectively, at December 31, 2014).
Nonperforming loans are generally those loans where payment of contractual principal or interest is more than 90 days past
due. Nonperforming mortgages were not significant for all periods presented.
The following table presents the credit quality indicators for commercial mortgages:
Number Percent
December 31, 2015 of Class of
(dollars in millions) Loans Apartments Offices Retail Industrial Hotel Others Total(c) Tot a l $
Credit Quality Indicator:
In good standing 830 $ 3,916 $7,484 $4,809 $1,902 $2,082 $ 1,435 $21,628 98 %
Restructured(a) 9 -156 25 616 6209 1
90 days or less delinquent 1 - - 4 - - - 4 -
>90 days delinquent or in
process of foreclosure 9 3205 - 6 - 12 226 1
Tot a l(b) 849 $ 3,919 $7,845 $4,838 $1,914 $2,098 $ 1,453 $22,067 100 %
Allowance for credit losses:
Specific -16 1 6 1 -24 - %
General 35 47 29 815 13 147 1
Total allowance for credit losses $ 35 $63 $30 $14 $16 $ 13 $171 1 %
December 31, 2014
(dollars in millions)
Credit Quality Indicator:
In good standing 1,007 $ 3,384 $ 6,100 $ 3,807 $ 1,689 $ 1,660 $ 1,812 $ 18,452 98 %
Restructured(a) 7 - 343 7 - 17 - 367 2
90 days or less delinquent 6 - - 10 - - 5 15 -
>90 days delinquent or in
process of foreclosure 4 - 75 - - - - 75 -
Tot a l(b) 1,024 $ 3,384 $ 6,518 $ 3,824 $ 1,689 $ 1,677 $ 1,817 $ 18,909 100 %