Bank of America 2007 Annual Report Download - page 136

Note 6 – Outstanding Loans and Leases
Outstanding loans and leases at December 31, 2007 and 2006 were:
December 31
(Dollars in millions) 2007 2006
Consumer
Residential mortgage $274,949 $241,181
Credit card – domestic 65,774 61,195
Credit card – foreign 14,950 10,999
Home equity
(1)
114,834 87,893
Direct/Indirect consumer
(1, 2)
76,844 59,378
Other consumer
(1, 3)
3,850 5,059
Total consumer 551,201 465,705
Commercial
Commercial – domestic
(4)
208,297 161,982
Commercial real estate
(5)
61,298 36,258
Commercial lease financing 22,582 21,864
Commercial – foreign 28,376 20,681
Total commercial loans measured at historical cost 320,553 240,785
Commercial loans measured at fair value
(6)
4,590 n/a
Total commercial 325,143 240,785
Total loans and leases $876,344 $706,490
(1) Home equity loan balances previously included in direct/indirect consumer and other consumer were reclassified to home equity to conform to current year presentation. Additionally, certain foreign consumer balances were
reclassified from other consumer to direct/indirect consumer to conform to current year presentation.
(2) Includes foreign consumer loans of $3.4 billion and $3.9 billion at December 31, 2007 and 2006.
(3) Includes other foreign consumer loans of $829 million and $2.3 billion, and consumer finance loans of $3.0 billion and $2.8 billion at December 31, 2007 and 2006.
(4) Includes small business commercial – domestic loans, primarily card-related, of $17.8 billion and $13.7 billion at December 31, 2007 and 2006.
(5) Includes domestic commercial real estate loans of $60.2 billion and $35.7 billion, and foreign commercial real estate loans of $1.1 billion and $578 million at December 31, 2007 and 2006.
(6) Certain commercial loans are measured at fair value in accordance with SFAS 159 and include commercial – domestic loans of $3.5 billion, commercial – foreign loans of $790 million and commercial real estate loans of
$304 million at December 31, 2007. See Note 19 – Fair Value Disclosures to the Consolidated Financial Statements for additional discussion of fair value for certain financial instruments.
n/a = not applicable
The following table presents the recorded loan amounts, with-
out consideration for the specific component of the allowance for
loan and lease losses, that were considered individually impaired in
accordance with SFAS 114 at December 31, 2007 and 2006. SFAS
114 impairment includes performing troubled debt restructurings
and excludes all commercial leases.
December 31
(Dollars in millions) 2007 2006
Commercial – domestic
(1)
$1,018 $586
Commercial real estate 1,099 118
Commercial – foreign 19 13
Total impaired loans $2,136 $717
(1) Includes small business commercial – domestic loans of $135 million and $79 million at December 31,
2007 and 2006.
The average recorded investment in certain impaired loans for 2007,
2006 and 2005 was approximately $1.2 billion, $722 million and $852
million, respectively. At December 31, 2007 and 2006, the recorded invest-
ment in impaired loans requiring an allowance for loan and lease losses
based on individual analysis per SFAS 114 guidelines was $1.2 billion and
$567 million, and the related allowance for loan and lease losses was
$123 million and $43 million. For 2007, 2006 and 2005, interest income
recognized on impaired loans totaled $130 million, $36 million and $17
million, respectively, all of which was recognized on a cash basis.
At December 31, 2007 and 2006, nonperforming loans and leases,
including impaired and nonaccrual consumer loans, totaled $5.6 billion
and $1.8 billion. In addition, included in other assets were consumer and
commercial nonperforming loans held-for-sale of $188 million and $80
million at December 31, 2007 and 2006.
The Corporation has loan products with varying terms (e.g., interest-only
mortgages, option adjustable rate mortgages, etc.) and loans with high
loan-to-value ratios. Exposure to any of these loan products does not result in
a significant concentration of credit risk. Terms of loan products, collateral
coverage, the borrower’s credit history, and the amount of these loans that are
retained on the Corporation’s balance sheet are included in the Corporation’s
assessment when establishing its allowance for loan and lease losses.
134 Bank of America 2007