Bank of America 2015 Annual Report Download - page 72

70 Bank of America 2015
seven percent of the home equity portfolio at both December 31,
2015 and 2014.
Of the $71.3 billion in total home equity portfolio outstandings
at December 31, 2015, as shown in Table 29, 66 percent were
interest-only loans, almost all of which were HELOCs. The
outstanding balance of HELOCs that have entered the amortization
period was $9.7 billion, or 15 percent of total HELOCs at
December 31, 2015. The HELOCs that have entered the
amortization period have experienced a higher percentage of early
stage delinquencies and nonperforming status when compared to
the HELOC portfolio as a whole. At December 31, 2015, $226
million, or two percent of outstanding HELOCs that had entered
the amortization period were accruing past due 30 days or more
compared to $561 million, or one percent for the entire HELOC
portfolio. In addition, at December 31, 2015, $1.3 billion, or 14
percent of outstanding HELOCs that had entered the amortization
period were nonperforming, of which $507 million were
contractually current, compared to $3.1 billion, or five percent for
the entire HELOC portfolio, of which $1.2 billion were contractually
current. Loans in our HELOC portfolio generally have an initial draw
period of 10 years and 44 percent of these loans will enter the
amortization period in 2016 and 2017 and will be required to make
fully-amortizing payments. We communicate to contractually
current customers more than a year prior to the end of their draw
period to inform them of the potential change to the payment
structure before entering the amortization period, and provide
payment options to customers prior to the end of the draw period.
Although we do not actively track how many of our home equity
customers pay only the minimum amount due on their home equity
loans and lines, we can infer some of this information through a
review of our HELOC portfolio that we service and that is still in
its revolving period (i.e., customers may draw on and repay their
line of credit, but are generally only required to pay interest on a
monthly basis). During 2015, approximately 39 percent of these
customers with an outstanding balance did not pay any principal
on their HELOCs.
Table 29 presents outstandings, nonperforming balances and
net charge-offs by certain state concentrations for the home equity
portfolio. In the New York area, the New York-Northern New Jersey-
Long Island MSA made up 13 percent and 12 percent of the
outstanding home equity portfolio at December 31, 2015 and
2014. Loans within this MSA contributed 13 percent and 14
percent of net charge-offs in 2015 and 2014 within the home
equity portfolio. The Los Angeles-Long Beach-Santa Ana MSA
within California made up 12 percent of the outstanding home
equity portfolio at both December 31, 2015 and 2014. Loans
within this MSA contributed two percent and four percent of net
charge-offs in 2015 and 2014 within the home equity portfolio.
Table 29 Home Equity State Concentrations
December 31
Outstandings (1) Nonperforming (1) Net Charge-offs (2)
(Dollars in millions) 2015 2014 2015 2014 2015 2014
California $ 20,356 $ 23,250 $902 $ 1,012 $57 $ 118
Florida (3) 8,474 9,633 518 574 128 170
New Jersey (3) 5,570 5,883 230 299 51 68
New York (3) 5,249 5,671 316 387 61 81
Massachusetts 3,378 3,655 115 148 17 30
Other U.S./Non-U.S. 28,302 32,016 1,256 1,481 322 440
Home equity loans (4) $ 71,329 $ 80,108 $ 3,337 $ 3,901 $636 $ 907
Purchased credit-impaired home equity portfolio (5) 4,619 5,617
Total home equity loan portfolio $ 75,948 $ 85,725
(1) Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
(2) Net charge-offs exclude $174 million of write-offs in the home equity PCI loan portfolio in 2015 compared to $265 million in 2014. For more information on PCI write-offs, see Consumer Portfolio
Credit Risk Management – Purchased Credit-impaired Loan Portfolio on page 71.
(3) In these states, foreclosure requires a court order following a legal proceeding (judicial states).
(4) Amount excludes the PCI home equity portfolio.
(5) Twenty-nine percent of PCI home equity loans were in California at both December 31, 2015 and 2014. There were no other significant single state concentrations.