Bank of America 2012 Annual Report Download - page 200

198 Bank of America 2012
NOTE 6 Allowance for Credit Losses
The table below summarizes the changes in the allowance for credit losses by portfolio segment for 2012, 2011 and 2010.
2012
(Dollars in millions)
Home
Loans
Credit Card
and Other
Consumer Commercial
Total
Allowance
Allowance for loan and lease losses, January 1 $ 21,079 $ 8,569 $ 4,135 $ 33,783
Loans and leases charged off (7,849)(7,727)(2,096) (17,672)
Recoveries of loans and leases previously charged off 496 1,519 749 2,764
Net charge-offs (7,353)(6,208)(1,347) (14,908)
Provision for loan and lease losses 4,073 3,899 338 8,310
Write-offs of home equity PCI loans (2,820)——
(2,820)
Other (46) (120) (20) (186)
Allowance for loan and lease losses, December 31 14,933 6,140 3,106 24,179
Reserve for unfunded lending commitments, January 1 — — 714 714
Provision for unfunded lending commitments —— (141) (141)
Other ——(60) (60)
Reserve for unfunded lending commitments, December 31 — — 513 513
Allowance for credit losses, December 31 $ 14,933 $ 6,140 $ 3,619 $ 24,692
2011
Allowance for loan and lease losses, January 1 $ 19,252 $ 15,463 $ 7,170 $ 41,885
Loans and leases charged off (9,291) (12,247) (3,204) (24,742)
Recoveries of loans and leases previously charged off 894 2,124 891 3,909
Net charge-offs (8,397) (10,123) (2,313) (20,833)
Provision for loan and lease losses 10,300 4,025 (696) 13,629
Other (76) (796) (26) (898)
Allowance for loan and lease losses, December 31 21,079 8,569 4,135 33,783
Reserve for unfunded lending commitments, January 1 — — 1,188 1,188
Provision for unfunded lending commitments — — (219) (219)
Other — — (255) (255)
Reserve for unfunded lending commitments, December 31 — — 714 714
Allowance for credit losses, December 31 $ 21,079 $ 8,569 $ 4,849 $ 34,497
2010
Allowance for loan and lease losses, January 1 $ 16,329 $ 22,243 $ 9,416 $ 47,988
Loans and leases charged off (10,915) (20,865) (5,610) (37,390)
Recoveries of loans and leases previously charged off 396 2,034 626 3,056
Net charge-offs (10,519) (18,831) (4,984) (34,334)
Provision for loan and lease losses 13,335 12,115 2,745 28,195
Other 107 (64) (7) 36
Allowance for loan and lease losses, December 31 19,252 15,463 7,170 41,885
Reserve for unfunded lending commitments, January 1 — — 1,487 1,487
Provision for unfunded lending commitments — — 240 240
Other — — (539) (539)
Reserve for unfunded lending commitments, December 31 — — 1,188 1,188
Allowance for credit losses, December 31 $ 19,252 $ 15,463 $ 8,358 $ 43,073
In 2012, for the PCI loan portfolio, the Corporation recorded a
benefit of $103 million in provision for credit losses with a
corresponding decrease in the valuation allowance included as
part of the allowance for loan and lease losses. This compared to
$2.2 billion in provision for credit losses and a corresponding
increase in the valuation allowance in both 2011 and 2010. In
2012, there were $2.8 billion of write-offs in the Countrywide home
equity PCI loan portfolio primarily related to the National Mortgage
Settlement with a corresponding decrease in the PCI valuation
allowance. These write-offs had no impact on the provision for
credit losses as these loans were fully reserved. The valuation
allowance associated with the PCI loan portfolio was $5.5 billion,
$8.5 billion and $6.4 billion at December 31, 2012, 2011 and
2010, respectively.
The “other” amount under allowance for loan and lease losses
primarily represents the net impact of portfolio sales,
consolidations and deconsolidations, and foreign currency
translation adjustments. The 2011 amount 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 “other” amount under the reserve for unfunded lending
commitments for 2012, 2011 and 2010 primarily represents
accretion of the Merrill Lynch purchase accounting adjustment and
the impact of funding previously unfunded positions.