Bank of America 2004 Annual Report Download - page 69

68 BANK OF AMERICA 2004
Table 22 presents the additions and reductions to nonperforming
assets in the commercial portfolio during 2004 and 2003.
Table 22 Nonperforming Commercial Assets Activity
(Dollars in millions) 2004 2003
Nonperforming loans and leases,
and foreclosed properties
Balance, January 1 $ 2,302 $ 4,430
Additions to nonperforming assets:
FleetBoston balance, April 1, 2004 957 –
New nonaccrual 1,294 2,134
Advances 82 199
Total additions 2,333 2,333
Reductions in nonperforming assets:
Paydowns and payoffs (1,405) (1,221)
Sales (589) (1,583)
Returns to performing status(1) (348) (197)
Charge-offs(2) (640) (1,352)
Transfers to assets held-for-sale (145) (108)
Total reductions (3,127) (4,461)
Total net reductions in
nonperforming assets (794) (2,128)
Nonperforming securities(3)
Balance, January 1 ––
Additions to nonperforming assets:
FleetBoston balance, April 1, 2004 135 –
New nonaccrual 56 –
Reductions in nonperforming assets:
Paydowns and payoffs (39) –
Sales (12) –
Total net securities additions to
nonperforming assets 140 –
Nonperforming commercial
assets, December 31 $ 1,648 $ 2,302
(1) Commercial loans and leases may be restored to performing status when all principal and
interest is current and full repayment of the remaining contractual principal and interest is
expected, or when the loan otherwise becomes well secured and is in the process of collection.
(2) Certain loan and lease products, including commercial credit card, are not classified as
nonperforming; therefore, the charge-offs on these loans are not included above.
(3) Primarily related to international securities held in the AFS securities portfolio.
Domestic commercial loans past due 90 days or more and still accruing
interest were $121 million at December 31, 2004 compared to $108
million at December 31, 2003. The increase was driven by the addition
of the FleetBoston past due portfolio of $28 million on April 1, 2004.
Table 23 presents commercial net charge-offs and net charge-off
ratios for 2004 and 2003.
Table 23 Commercial Net Charge-offs and Net Charge-off Ratios(1)
2004 2003
(Dollars in millions) Amount Percent Amount Percent
Commercial – domestic $ 177 0.15% $ 633 0.68%
Commercial real estate (3) (0.01) 41 0.20
Commercial lease financing 9 0.05 124 1.23
Commercial – foreign 173 1.05 306 2.36
Total commercial $ 356 0.20% $1,104 0.81%
(1) Percentage amounts are calculated as net charge-offs divided by average outstanding loans and
leases during the year for each loan category.
Commercial – domestic loan net charge-offs, as presented in Table 23,
decreased $456 million to $177 million in 2004, reflecting overall
improvement in the portfolio.
Commercial – foreign loan net charge-offs were $173 million in
2004 compared to $306 million in 2003. The decrease reflected
lower net charge-offs in Argentina, the United Kingdom and Italy. The
industry with the largest decrease in net charge-offs was utilities. The
country with the largest net charge-offs in 2004 was Italy.
At December 31, 2004 and 2003, our credit exposure related
to Parmalat Finanziaria S.p.A. and its related entities (Parmalat) was
less than $1 million and $274 million, respectively; the latter number
included $30 million of derivatives. Nonperforming loans related to
Parmalat were less than $1 million and $226 million at December
31, 2004 and 2003, respectively.
Included in Other Assets were commercial loans held-for-sale
and leveraged lease partnership interests of $1.3 billion and $198
million, respectively, at December 31, 2004 and $1.6 billion and
$332 million, respectively, at December 31, 2003. Included in these
balances were nonperforming loans held-for-sale and leveraged lease
partnership interests of $100 million and $23 million, respectively, at
December 31, 2004 and $183 million and $3 million, respectively, at
December 31, 2003.