Bank of America 2004 Annual Report Download - page 61

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Credit card loans are charged off at 180 days past due or 60 days
from notification of bankruptcy filing and are not classified as non-
performing. Unsecured consumer loans and deficiencies in non-real
estate secured loans and leases are charged off at 120 days past
due and not classified as nonperforming. Real estate secured con-
sumer loans are placed on nonaccrual and classified as nonperforming
at 90 days past due. The amount deemed uncollectible on real estate
secured loans is charged off at 180 days past due.
Table 11 presents the additions and reductions to nonperforming
assets in the consumer portfolio during 2004 and 2003.
Table 11
Nonperforming Consumer Assets Activity
(Dollars in millions) 2004 2003
Nonperforming loans and leases,
and foreclosed properties
Balance, January 1 $ 719 $ 832
Additions to nonperforming assets:
FleetBoston balance, April 1, 2004 127 –
New nonaccrual loans and leases,
and foreclosed properties 1,476 1,583
Transfers from assets held-for-sale(1) 15
Total additions 1,604 1,588
Reductions in nonperforming assets:
Paydowns and payoffs (376) (447)
Sales (219) (265)
Returns to performing status(2) (793) (878)
Charge-offs(3) (128) (111)
Total reductions (1,516) (1,701)
Total net additions to (reductions in)
nonperforming assets 88 (113)
Nonperforming consumer assets,
December 31 $ 807 $ 719
(1) Includes assets held-for-sale that were foreclosed and transferred to foreclosed properties.
(2) Consumer loans are generally returned to performing status when principal or interest is less
than 90 days past due.
(3) Consumer credit card and consumer non-real estate loans and leases are not classified as
nonperforming; therefore, the charge-offs on these loans are not included above.
On-balance sheet consumer loans and leases past due 90 days or
more and still accruing interest totaled $1.2 billion at December 31,
2004. This amount included $1.1 billion of credit card loans. When
the FleetBoston portfolio was acquired on April 1, 2004, it included
consumer loans and leases past due 90 days or more and still
accruing interest of $116 million including credit card loans of $98
million. At December 31, 2003, the comparable amount was $698
million, which included $616 million of credit card loans.
Nonperforming consumer asset sales in 2004 were $219 million,
comprised of $95 million of nonperforming consumer loans and
$124 million of consumer foreclosed properties. Nonperforming
consumer asset sales in 2003 totaled $265 million, comprised of
$141 million of nonperforming consumer loans and $124 million of
consumer foreclosed properties.
During the fourth quarter of 2004, we sold $1.1 billion of credit
card loans included in our held-for-sale portfolio that were acquired
as part of the FleetBoston acquisition.
Table 12 presents consumer net charge-offs and net charge-off
ratios for 2004 and 2003.
Table 12
Consumer Net Charge-offs and Net Charge-off Ratios(1)
2004 2003
(Dollars in millions) Amount Percent Amount Percent
Residential mortgage $ 36 0.02% $ 40 0.03%
Credit card 2,305 5.31 1,514 5.37
Home equity lines 15 0.04 12 0.05
Direct/Indirect consumer 208 0.55 181 0.55
Other consumer 193 2.51 255 2.89
Total consumer $2,757 0.93% $ 2,002 0.91%
(1) Percentage amounts are calculated as net charge-offs divided by average outstanding loans and
leases during the year for each loan category.
60 BANK OF AMERICA 2004
Table 10
Nonperforming Consumer Assets(1)
December 31 FleetBoston
(Dollars in millions) 2004 2003 2002 2001 2000 April 1, 2004
■■■■
Nonperforming consumer loans and leases
Residential mortgage $ 554 $ 531 $ 612 $ 556 $ 551 $ 55
Home equity lines 66 43 66 80 32 13
Direct/Indirect consumer 33 28 30 27 19 10
Other consumer 85 36 25 16 1,104 49
■■■■
Total nonperforming consumer loans and leases 738 638 733 679 1,706 127
Consumer foreclosed properties 69 81 99 334 182 –
■■■■
Total nonperforming consumer assets(2) $ 807 $ 719 $ 832 $1,013 $1,888 $ 127
■■■■
Nonperforming consumer loans and leases as a percentage of
outstanding consumer loans and leases 0.23% 0.27% 0.37% 0.41% 0.90% 0.20%
Nonperforming consumer assets as a percentage of outstanding
consumer loans, leases and foreclosed properties 0.25 0.30 0.42 0.61 1.00 0.20
■■■■
(1) In 2004, $40 in Interest Income was estimated to be contractually due on nonperforming consumer loans and leases.
(2) Balances do not include $28, $16, $41, $646 and $0 of nonperforming consumer loans held-for-sale, included in Other Assets at December 31, 2004, 2003, 2002, 2001 and 2000, respectively.