Bank of America 2014 Annual Report Download - page 189

Bank of America 2014 187
NOTE 5 Allowance for Credit Losses
The table below summarizes the changes in the allowance for credit losses by portfolio segment for 2014, 2013 and 2012.
2014
(Dollars in millions)
Home
Loans
Credit Card
and Other
Consumer Commercial
Total
Allowance
Allowance for loan and lease losses, January 1 $ 8,518 $ 4,905 $ 4,005 $ 17,428
Loans and leases charged off (2,219)(4,149)(658) (7,026)
Recoveries of loans and leases previously charged off 1,426 871 346 2,643
Net charge-offs (793) (3,278)(312) (4,383)
Write-offs of PCI loans (810) ——
(810)
Provision for loan and lease losses (976) 2,458 749 2,231
Other (1) (4) (38) (5)(47)
Allowance for loan and lease losses, December 31 5,935 4,047 4,437 14,419
Reserve for unfunded lending commitments, January 1 — — 484 484
Provision for unfunded lending commitments ——4444
Reserve for unfunded lending commitments, December 31 — — 528 528
Allowance for credit losses, December 31 $ 5,935 $ 4,047 $ 4,965 $ 14,947
2013
Allowance for loan and lease losses, January 1 $ 14,933 $ 6,140 $ 3,106 $ 24,179
Loans and leases charged off (3,766) (5,495) (1,108) (10,369)
Recoveries of loans and leases previously charged off 879 1,141 452 2,472
Net charge-offs (2,887) (4,354) (656) (7,897)
Write-offs of PCI loans (2,336) — — (2,336)
Provision for loan and lease losses (1,124) 3,139 1,559 3,574
Other (1) (68) (20) (4) (92)
Allowance for loan and lease losses, December 31 8,518 4,905 4,005 17,428
Reserve for unfunded lending commitments, January 1 — — 513 513
Provision for unfunded lending commitments — — (18) (18)
Other — — (11) (11)
Reserve for unfunded lending commitments, December 31 — — 484 484
Allowance for credit losses, December 31 $ 8,518 $ 4,905 $ 4,489 $ 17,912
2012
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)
Write-offs of PCI loans (2,820) — — (2,820)
Provision for loan and lease losses 4,073 3,899 338 8,310
Other (1) (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
(1) Primarily represents the net impact of portfolio sales, consolidations and deconsolidations, and foreign currency translation adjustments.
In 2014, 2013 and 2012, for the PCI loan portfolio, the
Corporation recorded a benefit of $31 million, $707 million and
$103 million, respectively in the provision for credit losses with a
corresponding decrease in the valuation allowance included as
part of the allowance for loan and lease losses. Write-offs in the
PCI loan portfolio totaled $810 million, $2.3 billion and $2.8 billion
with a corresponding decrease in the PCI valuation allowance
during 2014, 2013 and 2012, respectively. Write-offs in 2013
included certain PCI loans that were ineligible for the National
Mortgage Settlement, but had characteristics similar to the eligible
loans and the expectation of future cash proceeds was considered
remote. Write-offs of PCI loans in 2012 primarily related to the
National Mortgage Settlement. The valuation allowance
associated with the PCI loan portfolio was $1.7 billion, $2.5 billion
and $5.5 billion at December 31, 2014, 2013 and 2012,
respectively.