Bank of America 2015 Annual Report Download - page 68

66 Bank of America 2015
Table 25 presents outstandings, nonperforming balances, net charge-offs, allowance for loan and lease losses and provision for
loan and lease losses for the Core portfolio and the Legacy Assets & Servicing portfolio within the consumer real estate portfolio. For
more information on the Legacy Assets & Servicing portfolio, see LAS on page 40.
Table 25 Consumer Real Estate Portfolio (1)
December 31
Outstandings Nonperforming Net Charge-offs (2)
(Dollars in millions) 2015 2014 2015 2014 2015 2014
Core portfolio
Residential mortgage $ 145,845 $162,220 $ 1,845 $ 2,398 $128 $ 140
Home equity 48,264 51,887 1,354 1,496 219 275
Total Core portfolio 194,109 214,107 3,199 3,894 347 415
Legacy Assets & Servicing portfolio
Residential mortgage 42,066 53,977 2,958 4,491 345 (254)
Home equity 27,684 33,838 1,983 2,405 417 632
Total Legacy Assets & Servicing portfolio 69,750 87,815 4,941 6,896 762 378
Consumer real estate portfolio
Residential mortgage 187,911 216,197 4,803 6,889 473 (114)
Home equity 75,948 85,725 3,337 3,901 636 907
Total consumer real estate portfolio $ 263,859 $301,922 $ 8,140 $ 10,790 $ 1,109 $ 793
December 31
Allowance for Loan
and Lease Losses
Provision for Loan
and Lease Losses
2015 2014 2015 2014
Core portfolio
Residential mortgage $418 $ 593 $ (47) $ (47)
Home equity 639 702 153 3
Total Core portfolio 1,057 1,295 106 (44)
Legacy Assets & Servicing portfolio
Residential mortgage 1,082 2,307 (247)(696)
Home equity 1,775 2,333 71 (236)
Total Legacy Assets & Servicing portfolio 2,857 4,640 (176)(932)
Consumer real estate portfolio
Residential mortgage 1,500 2,900 (294)(743)
Home equity 2,414 3,035 224 (233)
Total consumer real estate portfolio $ 3,914 $ 5,935 $ (70) $ (976)
(1) Outstandings and nonperforming loans exclude loans accounted for under the fair value option. Consumer loans accounted for under the fair value option include residential mortgage loans of $1.6
billion and $1.9 billion and home equity loans of $250 million and $196 million at December 31, 2015 and 2014. For more information on the fair value option, see Note 21 – Fair Value Option to
the Consolidated Financial Statements.
(2) Net charge-offs exclude write-offs in the PCI loan portfolio. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management – Purchased Credit-impaired Loan Portfolio on
page 71.
We believe that the presentation of information adjusted to
exclude the impact of the PCI loan portfolio, the fully-insured loan
portfolio and loans accounted for under the fair value option is
more representative of the ongoing operations and credit quality
of the business. As a result, in the following discussions of the
residential mortgage and home equity portfolios, we provide
information that excludes the impact of the PCI loan portfolio, the
fully-insured loan portfolio and loans accounted for under the fair
value option in certain credit quality statistics. We separately
disclose information on the PCI loan portfolio on page 71.
Residential Mortgage
The residential mortgage portfolio makes up the largest
percentage of our consumer loan portfolio at 41 percent of
consumer loans and leases at December 31, 2015. Approximately
58 percent of the residential mortgage portfolio is in All Other and
is comprised of originated loans, purchased loans used in our
overall ALM activities, delinquent FHA loans repurchased pursuant
to our servicing agreements with GNMA as well as loans
repurchased related to our representations and warranties.
Approximately 30 percent of the residential mortgage portfolio is
in GWIM and represents residential mortgages originated for the
home purchase and refinancing needs of our wealth management
clients and the remaining portion of the portfolio is primarily in
Consumer Banking.
Outstanding balances in the residential mortgage portfolio,
excluding loans accounted for under the fair value option,
decreased $28.3 billion during 2015 due to loan sales of $24.2
billion and runoff outpacing the retention of new originations. Loan
sales primarily included $16.4 billion of loans with standby
insurance agreements, $3.1 billion of nonperforming and other
delinquent loans and $4.5 billion of loans in consolidated agency
residential mortgage securitization vehicles.
At December 31, 2015 and 2014, the residential mortgage
portfolio included $37.1 billion and $65.0 billion of outstanding
fully-insured loans. On this portion of the residential mortgage
portfolio, we are protected against principal loss as a result of
either FHA insurance or long-term standby agreements that provide
for the transfer of credit risk to FNMA and FHLMC. At December
31, 2015 and 2014, $33.4 billion and $47.8 billion had FHA
insurance with the remainder protected by long-term standby
agreements. At December 31, 2015 and 2014, $11.2 billion and