Bank of America 2007 Annual Report Download - page 105

Table VI Allowance for Credit Losses
(Dollars in millions) 2007 2006 2005 2004 2003
Allowance for loan and lease losses, January 1 $ 9,016 $ 8,045 $ 8,626 $ 6,163 $ 6,358
Adjustment due to the adoption of SFAS 159 (32) ––––
LaSalle balance, October 1, 2007 725 ––––
U.S. Trust Corporation balance, July 1, 2007 25 ––––
MBNA balance, January 1, 2006 – 577 – – –
FleetBoston balance, April 1, 2004 – – – 2,763 –
Loans and leases charged off
Residential mortgage (79) (74) (58) (62) (64)
Credit card – domestic (3,410) (3,546) (4,018) (2,536) (1,657)
Credit card – foreign (452) (292) – – –
Home equity (286) (67) (46) (38) (38)
Direct/Indirect consumer (1,885) (857) (380) (344) (322)
Other consumer (346) (327) (376) (295) (343)
Total consumer charge-offs (6,458) (5,163) (4,878) (3,275) (2,424)
Commercial – domestic
(1)
(1,135) (597) (535) (504) (857)
Commercial real estate (54) (7) (5) (12) (46)
Commercial lease financing (55) (28) (315) (39) (132)
Commercial – foreign (28) (86) (61) (262) (408)
Total commercial charge-offs (1,272) (718) (916) (817) (1,443)
Total loans and leases charged off (7,730) (5,881) (5,794) (4,092) (3,867)
Recoveries of loans and leases previously charged off
Residential mortgage 22 35 31 26 24
Credit card – domestic 347 452 366 231 143
Credit card – foreign 74 67–––
Home equity 12 16 15 23 26
Direct/Indirect consumer 512 247 132 136 141
Other consumer 68 110 101 102 88
Total consumer recoveries 1,035 927 645 518 422
Commercial – domestic
(2)
128 261 365 327 224
Commercial real estate 7 4 5 15 5
Commercial lease financing 53 56 84 30 8
Commercial – foreign 27 94 133 89 102
Total commercial recoveries 215 415 587 461 339
Total recoveries of loans and leases previously charged off 1,250 1,342 1,232 979 761
Net charge-offs (6,480) (4,539) (4,562) (3,113) (3,106)
Provision for loan and lease losses 8,357 5,001 4,021 2,868 2,916
Other (23) (68) (40) (55) (5)
Allowance for loan and lease losses, December 31 11,588 9,016 8,045 8,626 6,163
Reserve for unfunded lending commitments, January 1 397 395 402 416 493
Adjustment due to the adoption of SFAS 159 (28) ––––
LaSalle balance, October 1, 2007 124 ––––
FleetBoston balance, April 1, 2004 – – – 85 –
Provision for unfunded lending commitments 28 9 (7) (99) (77)
Other (3) (7) – – –
Reserve for unfunded lending commitments, December 31 518 397 395 402 416
Allowance for credit losses, December 31 $ 12,106 $ 9,413 $ 8,440 $ 9,028 $ 6,579
Loans and leases outstanding measured at historical cost at December 31
$871,754 $706,490 $573,791 $521,813 $371,433
Allowance for loan and lease losses as a percentage of total loans and leases
outstanding measured at historical cost at December 31
(3)
1.33 % 1.28 % 1.40 % 1.65 % 1.66 %
Consumer allowance for loan and lease losses as a percentage of total consumer loans
and leases outstanding at December 31 1.23 1.19 1.27 1.34 1.25
Commercial allowance for loan and lease losses as a percentage of total commercial
loans and leases outstanding measured at historical cost at December 31
(3)
1.51 1.44 1.62 2.19 2.40
Average loans and leases outstanding measured at historical cost during the year $773,142 $652,417 $537,218 $472,617 $356,220
Net charge-offs as a percentage of average loans and leases outstanding measured at
historical cost during the year
(3, 4, 5)
0.84 % 0.70 % 0.85 % 0.66 % 0.87 %
Allowance for loan and lease losses as a percentage of total nonperforming loans and
leases measured at historical cost at December 31 207 505 532 390 215
Ratio of the allowance for loan and lease losses at December 31 to
net charge-offs (4, 5)
1.79 1.99 1.76 2.77 1.98
(1) Includes small business commercial – domestic charge offs of $911 million and $409 million in 2007 and 2006. Small business commercial – domestic charge offs were not material in 2005, 2004 and 2003.
(2) Includes small business commercial – domestic recoveries of $42 million and $48 million in 2007 and 2006. Small business commercial – domestic recoveries were not material in 2005, 2004 and 2003.
(3) Ratios do not include loans measured at fair value in accordance with SFAS 159 at and for the year ended December 31, 2007. Loans measured at fair value were $4.59 billion at December 31, 2007.
(4) In 2007, the impact of SOP 03-3 decreased net charge-offs by $75 million. Excluding the impact of SOP 03-3, net charge-offs as a percentage of average loans and leases outstanding measured at historical cost in 2007
would have been 0.85 percent and the ratio of the allowance for loan and lease losses to net charge-offs would have been 1.77 percent at December 31, 2007.
(5) In 2006, the impact of SOP 03-3 decreased net charge-offs by $288 million. Excluding the impact of SOP 03-3, net charge-offs as a percentage of average loans and leases outstanding measured at historical cost in 2006
would have been 0.74 percent, and the ratio of the allowance for loan and lease losses to net charge-offs would have been 1.87 percent at December 31, 2006.
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