Bank of America 2014 Annual Report Download - page 81

Bank of America 2014 79
Table 38 presents certain state concentrations for the direct/indirect consumer loan portfolio.
Table 38 Direct/Indirect State Concentrations
December 31
Outstandings
Accruing Past Due
90 Days or More Net Charge-offs
(Dollars in millions) 2014 2013 2014 2013 2014 2013
California $ 9,770 $ 10,041 $5 $57
$18 $42
Florida 7,930 7,634 525 27 41
Texas 7,741 7,850 566 19 32
New York 4,458 4,611 233 920
New Jersey 2,625 2,526 28512
Other U.S./Non-U.S. 47,857 49,530 45 219 91 198
Total direct/indirect loan portfolio $ 80,381 $ 82,192 $64
$ 408 $169 $ 345
Other Consumer
At December 31, 2014, approximately 37 percent of the $1.8
billion other consumer portfolio was associated with certain
consumer finance businesses that we previously exited. The
remainder is primarily leases within the consumer dealer financial
services portfolio included in CBB.
Consumer Loans Accounted for Under the Fair Value
Option
Outstanding consumer loans accounted for under the fair value
option totaled $2.1 billion at December 31, 2014 and were
comprised of residential mortgage loans that were previously
classified as held-for-sale, residential mortgage loans held in
consolidated variable interest entities (VIEs) and repurchased
home equity loans. The loans that were previously classified as
held-for-sale were transferred to the residential mortgage portfolio
in connection with the decision to retain the loans. The fair value
option had been elected at the time of origination and the loans
continue to be measured at fair value after the reclassification. In
2014, we recorded net losses of $13 million resulting from
changes in the fair value of these loans, including losses of $45
million on loans held in consolidated VIEs that were offset by gains
recorded on related long-term debt.
Nonperforming Consumer Loans, Leases and Foreclosed
Properties Activity
Table 39 presents nonperforming consumer loans, leases and
foreclosed properties activity during 2014 and 2013.
Nonperforming LHFS are excluded from nonperforming loans as
they are recorded at either fair value or the lower of cost or fair
value. Nonperforming loans do not include past due consumer
credit card loans, other unsecured loans and in general, consumer
non-real estate-secured loans (loans discharged in Chapter 7
bankruptcy are included) as these loans are typically charged off
no later than the end of the month in which the loan becomes
180 days past due. The charge-offs on these loans have no impact
on nonperforming activity and, accordingly, are excluded from this
table. The fully-insured loan portfolio is not reported as
nonperforming as principal repayment is insured. Additionally,
nonperforming loans do not include the PCI loan portfolio or loans
accounted for under the fair value option. For more information on
nonperforming loans, see Note 1 – Summary of Significant
Accounting Principles to the Consolidated Financial Statements.
During 2014, nonperforming consumer loans declined $5.0 billion
to $10.8 billion as outflows including the impact of loan sales,
returns to performing status and charge-offs outpaced new inflows
which continued to improve due to favorable delinquency trends.
The outstanding balance of a real estate-secured loan that is
in excess of the estimated property value less costs to sell is
charged off no later than the end of the month in which the loan
becomes 180 days past due unless repayment of the loan is fully
insured. At December 31, 2014, $5.9 billion, or 51 percent of
nonperforming consumer real estate loans and foreclosed
properties had been written down to their estimated property value
less costs to sell, including $5.2 billion of nonperforming loans
180 days or more past due and $630 million of foreclosed
properties. In addition, at December 31, 2014, $3.6 billion, or 33
percent of nonperforming consumer loans were modified and are
now current after successful trial periods, or are current loans
classified as nonperforming loans in accordance with applicable
policies.
Foreclosed properties increased $97 million in 2014 as
additions outpaced liquidations. PCI loans are excluded from
nonperforming loans as these loans were written down to fair value
at the acquisition date; however, once the underlying real estate
is acquired by the Corporation upon foreclosure of the delinquent
PCI loan, it is included in foreclosed properties. PCI-related
foreclosed properties increased $198 million in 2014. Not
included in foreclosed properties at December 31, 2014 was $1.1
billion of real estate that was acquired upon foreclosure of
delinquent FHA-insured loans. We exclude these amounts from
our nonperforming loans and foreclosed properties activity as we
expect we will be reimbursed once the property is conveyed to the
FHA for principal and, up to certain limits, costs incurred during
the foreclosure process and interest incurred during the holding
period. For more information on the review of our foreclosure
processes, see Off-Balance Sheet Arrangements and Contractual
Obligations – Servicing, Foreclosure and Other Mortgage Matters
on page 50.