Bank of America 2015 Annual Report Download - page 79

Bank of America 2015 77
Table 39 presents commercial credit exposure by type for
utilized, unfunded and total binding committed credit exposure.
Commercial utilized credit exposure includes SBLCs and financial
guarantees, bankers’ acceptances and commercial letters of
credit for which we are legally bound to advance funds under
prescribed conditions, during a specified time period. Although
funds have not yet been advanced, these exposure types are
considered utilized for credit risk management purposes.
Total commercial utilized credit exposure increased $52.9
billion in 2015 primarily driven by growth in loans and leases. The
utilization rate for loans and leases, SBLCs and financial
guarantees, commercial letters of credit and bankers acceptances,
in the aggregate, was 56 percent and 57 percent at December 31,
2015 and 2014.
Table 39 Commercial Credit Exposure by Type
December 31
Commercial
Utilized (1)
Commercial
Unfunded (2, 3)
Total Commercial
Committed
(Dollars in millions) 2015 2014 2015 2014 2015 2014
Loans and leases $ 446,832 $392,821 $ 376,478 $317,258 $ 823,310 $ 710,079
Derivative assets (4) 49,990 52,682 ——49,990 52,682
Standby letters of credit and financial guarantees 33,236 33,550 690 745 33,926 34,295
Debt securities and other investments 21,709 17,301 4,173 5,315 25,882 22,616
Loans held-for-sale 5,456 7,036 1,203 2,315 6,659 9,351
Commercial letters of credit 1,725 2,037 390 126 2,115 2,163
Bankers’ acceptances 298 255 ——298 255
Foreclosed properties and other 317 960 ——317 960
Total $ 559,563 $506,642 $ 382,934 $325,759 $ 942,497 $ 832,401
(1) Total commercial utilized exposure includes loans of $5.1 billion and $6.6 billion and issued letters of credit with a notional amount of $290 million and $535 million accounted for under the fair
value option at December 31, 2015 and 2014.
(2) Total commercial unfunded exposure includes loan commitments accounted for under the fair value option with a notional amount of $10.6 billion and $9.4 billion at December 31, 2015 and 2014.
(3) Excludes unused business card lines which are not legally binding.
(4) Derivative assets are carried at fair value, reflect the effects of legally enforceable master netting agreements and have been reduced by cash collateral of $41.9 billion and $47.3 billion at December
31, 2015 and 2014. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $23.3 billion and $23.8 billion which consists primarily of other marketable
securities.
Table 40 presents commercial utilized reservable criticized
exposure by loan type. Criticized exposure corresponds to the
Special Mention, Substandard and Doubtful asset categories as
defined by regulatory authorities. Total commercial utilized
reservable criticized exposure increased $4.9 billion, or 43
percent, in 2015 driven by downgrades primarily related to our
energy exposure outpacing paydowns and upgrades.
Approximately 78 percent and 87 percent of commercial utilized
reservable criticized exposure was secured at December 31, 2015
and 2014.
Table 40 Commercial Utilized Reservable Criticized Exposure
December 31
2015 2014
(Dollars in millions) Amount (1) Percent (2) Amount (1) Percent (2)
U.S. commercial $ 9,965 3.56%$ 7,597 3.07%
Commercial real estate 513 0.87 1,108 2.24
Commercial lease financing 1,320 4.82 1,034 4.16
Non-U.S. commercial 3,944 4.04 887 1.03
15,742 3.39 10,626 2.60
U.S. small business commercial 766 5.95 944 7.10
Total commercial utilized reservable criticized exposure $ 16,508 3.46 $ 11,570 2.74
(1) Total commercial utilized reservable criticized exposure includes loans and leases of $15.1 billion and $10.2 billion and commercial letters of credit of $1.4 billion and $1.3 billion at December 31,
2015 and 2014.
(2) Percentages are calculated as commercial utilized reservable criticized exposure divided by total commercial utilized reservable exposure for each exposure category.
U.S. Commercial
At December 31, 2015, 70 percent of the U.S. commercial loan
portfolio, excluding small business, was managed in Global
Banking, 17 percent in Global Markets, 10 percent in GWIM
(generally business-purpose loans for high net worth clients) and
the remainder primarily in Consumer Banking. U.S. commercial
loans, excluding loans accounted for under the fair value option,
increased $32.5 billion, or 15 percent, during 2015 due to growth
across all of the commercial businesses. Nonperforming loans
and leases increased $166 million, or 24 percent, in 2015, largely
related to our energy exposure. Net charge-offs increased $51
million to $139 million during 2015.