Bank of America 2011 Annual Report Download - page 191

Bank of America 2011 189
NOTE 7 Allowance for Credit Losses
The table below summarizes the changes in the allowance for credit losses for 2011, 2010 and 2009.
(Dollars in millions)
Allowance for loan and lease losses, January 1
Loans and leases charged off
Recoveries of loans and leases previously charged off
Net charge-offs
Provision for loan and lease losses
Other
Allowance for loan and lease losses, December 31
Reserve for unfunded lending commitments, January 1
Provision for unfunded lending commitments
Other
Reserve for unfunded lending commitments, December 31
Allowance for credit losses, December 31
2011
Home
Loans
$ 19,252
(9,291)
894
(8,397)
10,300
(76)
21,079
—
—
—
—
$ 21,079
Credit Card
and Other
Consumer
$ 15,463
(12,247)
2,124
(10,123)
4,025
(796)
8,569
—
—
—
—
$ 8,569
Commercial
$ 7,170
(3,204)
891
(2,313)
(696)
(26)
4,135
1,188
(219)
(255)
714
$ 4,849
Total
Allowance
$41,885
(24,742)
3,909
(20,833)
13,629
(898)
33,783
1,188
(219)
(255)
714
$34,497
Allowance for loan and lease losses, January 1 (1)
Loans and leases charged off
Recoveries of loans and leases previously charged off
Net charge-offs
Provision for loan and lease losses
Other
Allowance for loan and lease losses, December 31
Reserve for unfunded lending commitments, January 1
Provision for unfunded lending commitments
Other
Reserve for unfunded lending commitments, December 31
Allowance for credit losses, December 31
2010
Home
Loans
$ 16,329
(10,915)
396
(10,519)
13,335
107
19,252
—
—
—
—
$ 19,252
Credit Card
and Other
Consumer
$ 22,243
(20,865)
2,034
(18,831)
12,115
(64)
15,463
—
—
—
—
$ 15,463
Commercial
$ 9,416
(5,610)
626
(4,984)
2,745
(7)
7,170
1,487
240
(539)
1,188
$ 8,358
Total Allowance
2010
$ 47,988
(37,390)
3,056
(34,334)
28,195
36
41,885
1,487
240
(539)
1,188
$ 43,073
2009
$ 23,071
(35,483)
1,795
(33,688)
48,366
(549)
37,200
421
204
862
1,487
$ 38,687
(1) The 2010 balance includes $10.8 billion of allowance for loan and lease losses related to the adoption of new consolidation guidance. This includes $573 million for the home loans portfolio segment
and $10.2 billion for the credit card and other consumer portfolio segment.
In 2011, for the PCI loan portfolio, the Corporation recorded
$2.2 billion in provision for credit losses with a corresponding
increase in the valuation allowance included as part of the
allowance for loan and lease losses. This compared to $2.2 billion
in 2010 and $3.5 billion in 2009. PCI loans that were acquired
as part of the Merrill Lynch acquisition were excluded from current
period PCI disclosures as the valuation allowance associated with
these loans is no longer significant. The valuation allowance
associated with the PCI loan portfolio was $8.5 billion, $6.4 billion
and $3.9 billion at December 31, 2011, 2010 and 2009,
respectively.
The “other” amount under allowance for loan and lease losses
for 2011 includes a $449 million reduction in the allowance for
loan and lease losses related to Canadian consumer card loans
that were transferred to LHFS. The 2009 “other” amount includes
a $750 million reduction in the allowance for loan and lease losses
related to $8.5 billion of credit card loans that were exchanged
for a $7.8 billion HTM debt security partially offset by a $340
million increase associated with the reclassification to other
assets of the amount reimbursable under residential mortgage
cash collateralized synthetic securitizations.
The “other” amount under the reserve for unfunded lending
commitments for 2011 and 2010 primarily represents accretion
of the Merrill Lynch purchase accounting adjustment and the
impact of funding previously unfunded positions. The 2009 amount
includes the remaining balance of the acquired Merrill Lynch
reserve excluding those commitments accounted for under the
fair value option, net of accretion, and the impact of funding
previously unfunded positions.