v2.4.0.8
Loans and Asset Quality (Tables)
|
12 Months Ended |
|
Receivables [Abstract] |
|
Loan Portfolio |
The table below provides the details of our loan portfolio and industry concentrations of credit risk at Dec. 31, 2013 and 2012.
| | | | | | | | | Loans | Dec. 31, | (in millions) | 2013 |
| | 2012 |
| Domestic: | | | | Financial institutions | $ | 4,511 |
| | $ | 5,455 |
| Commercial | 1,534 |
| | 1,306 |
| Wealth management loans and mortgages | 9,743 |
| | 8,796 |
| Commercial real estate | 2,001 |
| | 1,677 |
| Lease financings (a) | 1,322 |
| | 1,329 |
| Other residential mortgages | 1,385 |
| | 1,632 |
| Overdrafts | 1,314 |
| | 2,228 |
| Other | 768 |
| | 639 |
| Margin loans | 15,652 |
| | 13,397 |
| Total domestic | 38,230 |
| | 36,459 |
| Foreign: | | | | Financial institutions | 9,848 |
| | 5,833 |
| Commercial | 113 |
| | 111 |
| Wealth management loans and mortgages | 75 |
| | 68 |
| Commercial real estate | 9 |
| | 63 |
| Lease financings (a) | 945 |
| | 1,025 |
| Other (primarily overdrafts) | 2,437 |
| | 3,070 |
| Total foreign | 13,427 |
| | 10,170 |
| Total loans | $ | 51,657 |
| | $ | 46,629 |
|
| | (a) | Net of unearned income on domestic and foreign lease financings of $1,020 million at Dec. 31, 2013 and $1,135 million at Dec. 31, 2012. |
|
Allowance for Credit Losses Activity |
Transactions in the allowance for credit losses are summarized as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the year ended Dec. 31, 2013 | Wealth management loans and mortgages |
| Other residential mortgages |
| | | | | (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| All Other |
| | Foreign |
| Total |
| Beginning balance | $ | 104 |
| $ | 30 |
| $ | 36 |
| $ | 49 |
| $ | 30 |
| $ | 88 |
| $ | 2 |
| | $ | 48 |
| $ | 387 |
| Charge-offs | (4 | ) | (1 | ) | — |
| — |
| (1 | ) | (8 | ) | — |
| | (3 | ) | (17 | ) | Recoveries | 1 |
| — |
| 4 |
| — |
| — |
| 4 |
| — |
| | — |
| 9 |
| Net (charge-offs) recoveries | (3 | ) | (1 | ) | 4 |
| — |
| (1 | ) | (4 | ) | — |
| | (3 | ) | (8 | ) | Provision | (18 | ) | 12 |
| 9 |
| (12 | ) | (5 | ) | (30 | ) | (2 | ) | | 11 |
| (35 | ) | Ending balance | $ | 83 |
| $ | 41 |
| $ | 49 |
| $ | 37 |
| $ | 24 |
| $ | 54 |
| $ | — |
| | $ | 56 |
| $ | 344 |
| Allowance for: | | | | | | | | | | | Loan losses | $ | 21 |
| $ | 21 |
| $ | 10 |
| $ | 37 |
| $ | 19 |
| $ | 54 |
| $ | — |
| | $ | 48 |
| $ | 210 |
| Lending-related commitments | 62 |
| 20 |
| 39 |
| — |
| 5 |
| — |
| — |
| | 8 |
| 134 |
| Individually evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 15 |
| $ | 3 |
| $ | — |
| $ | — |
| $ | 12 |
| $ | — |
| $ | — |
| | $ | 6 |
| $ | 36 |
| Allowance for loan losses | 2 |
| 1 |
| — |
| — |
| 3 |
| — |
| — |
| | 1 |
| 7 |
| Collectively evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 1,519 |
| $ | 1,998 |
| $ | 4,511 |
| $ | 1,322 |
| $ | 9,731 |
| $ | 1,385 |
| $ | 17,734 |
| (a) | $ | 13,421 |
| $ | 51,621 |
| Allowance for loan losses | 19 |
| 20 |
| 10 |
| 37 |
| 16 |
| 54 |
| — |
| | 47 |
| 203 |
|
| | (a) | Includes $1,314 million of domestic overdrafts, $15,652 million of margin loans and $768 million of other loans at Dec. 31, 2013. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the year ended Dec. 31, 2012 | Wealth management loans and mortgages |
| Other residential mortgages |
| | | | | (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| All Other |
| | Foreign |
| Total |
| Beginning balance | $ | 91 |
| $ | 34 |
| $ | 63 |
| $ | 66 |
| $ | 29 |
| $ | 156 |
| $ | — |
|
| $ | 58 |
| $ | 497 |
| Charge-offs | (2 | ) | — |
| (13 | ) | — |
| (1 | ) | (22 | ) | — |
|
| — |
| (38 | ) | Recoveries | 2 |
| — |
| — |
| — |
| — |
| 6 |
| — |
|
| — |
| 8 |
| Net (charge-offs) | — |
| — |
| (13 | ) | — |
| (1 | ) | (16 | ) | — |
|
| — |
| (30 | ) | Provision | 13 |
| (4 | ) | (14 | ) | (17 | ) | 2 |
| (52 | ) | 2 |
| | (10 | ) | (80 | ) | Ending balance | $ | 104 |
| $ | 30 |
| $ | 36 |
| $ | 49 |
| $ | 30 |
| $ | 88 |
| $ | 2 |
|
| $ | 48 |
| $ | 387 |
| Allowance for: | | | | | | | | | | | Loan losses | $ | 30 |
| $ | 20 |
| $ | 12 |
| $ | 49 |
| $ | 26 |
| $ | 88 |
| $ | 2 |
|
| $ | 39 |
| $ | 266 |
| Lending-related commitments | 74 |
| 10 |
| 24 |
| — |
| 4 |
| — |
| — |
|
| 9 |
| 121 |
| Individually evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 57 |
| $ | 17 |
| $ | 3 |
| $ | — |
| $ | 31 |
| $ | — |
| $ | — |
|
| $ | 9 |
| $ | 117 |
| Allowance for loan losses | 12 |
| 1 |
| — |
| — |
| 7 |
| — |
| — |
|
| 4 |
| 24 |
| Collectively evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 1,249 |
| $ | 1,660 |
| $ | 5,452 |
| $ | 1,329 |
| $ | 8,765 |
| $ | 1,632 |
| $ | 16,264 |
| (a) | $ | 10,161 |
| $ | 46,512 |
| Allowance for loan losses | 18 |
| 19 |
| 12 |
| 49 |
| 19 |
| 88 |
| 2 |
|
| 35 |
| 242 |
|
| | (a) | Includes $2,228 million of domestic overdrafts, $13,397 million of margin loans and $639 million of other loans at Dec. 31, 2012. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the year ended Dec. 31, 2011 | Wealth management loans and mortgages |
| Other residential mortgages |
| All Other |
| | Foreign |
| Total |
| (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| | Beginning balance | $ | 93 |
| $ | 40 |
| $ | 11 |
| $ | 90 |
| $ | 41 |
| $ | 235 |
| $ | 1 |
|
| $ | 60 |
| $ | 571 |
| Charge-offs | (6 | ) | (4 | ) | (8 | ) | — |
| (1 | ) | (56 | ) | — |
|
| (8 | ) | (83 | ) | Recoveries | 3 |
| — |
| 2 |
| — |
| — |
| 3 |
| — |
|
| — |
| 8 |
| Net (charge-offs) | (3 | ) | (4 | ) | (6 | ) | — |
| (1 | ) | (53 | ) | — |
|
| (8 | ) | (75 | ) | Provision | 1 |
| (2 | ) | 58 |
| (24 | ) | (11 | ) | (26 | ) | (1 | ) |
| 6 |
| 1 |
| Ending balance | $ | 91 |
| $ | 34 |
| $ | 63 |
| $ | 66 |
| $ | 29 |
| $ | 156 |
| $ | — |
|
| $ | 58 |
| $ | 497 |
| Allowance for: | | | | | | | | | | | Loan losses | $ | 33 |
| $ | 24 |
| $ | 41 |
| $ | 66 |
| $ | 23 |
| $ | 156 |
| $ | — |
|
| $ | 51 |
| $ | 394 |
| Lending-related commitments | 58 |
| 10 |
| 22 |
| — |
| 6 |
| — |
| — |
|
| 7 |
| 103 |
| Individually evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 26 |
| $ | 38 |
| $ | 24 |
| $ | — |
| $ | 30 |
| $ | — |
| $ | — |
|
| $ | 10 |
| $ | 128 |
| Allowance for loan losses | 9 |
| 7 |
| 7 |
| — |
| 5 |
| — |
| — |
|
| 4 |
| 32 |
| Collectively evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 726 |
| $ | 1,411 |
| $ | 4,582 |
| $ | 1,558 |
| $ | 7,312 |
| $ | 1,923 |
| $ | 16,341 |
| (a) | $ | 9,998 |
| $ | 43,851 |
| Allowance for loan losses | 24 |
| 17 |
| 34 |
| 66 |
| 18 |
| 156 |
| — |
|
| 47 |
| 362 |
|
| | (a) | Includes $2,958 million of domestic overdrafts, $12,760 million of margin loans and $623 million of other loans at Dec. 31, 2011. |
|
Nonperforming Assets |
The table below presents the distribution of our nonperforming assets.
| | | | | | | | Nonperforming assets | Dec. 31, | (in millions) | 2013 |
| 2012 |
| Nonperforming loans: | | | Domestic: | | | Other residential mortgages | $ | 117 |
| $ | 158 |
| Commercial | 15 |
| 27 |
| Wealth management loans and mortgages | 11 |
| 30 |
| Commercial real estate | 4 |
| 18 |
| Financial institutions | — |
| 3 |
| Total domestic | 147 |
| 236 |
| Foreign loans | 6 |
| 9 |
| Total nonperforming loans | 153 |
| 245 |
| Other assets owned | 3 |
| 4 |
| Total nonperforming assets (a) | $ | 156 |
| $ | 249 |
|
| | (a) | Loans of consolidated investment management funds are not part of BNY Mellon’s loan portfolio. Included in the loans of consolidated investment management funds are nonperforming loans of $16 million at Dec. 31, 2013 and $174 million at Dec. 31, 2012. These loans are recorded at fair value and therefore do not impact the provision for credit losses and allowance for loan losses, and accordingly are excluded from the nonperforming assets table above. |
|
Lost Interest |
Lost interest | | | | | | | | | | | Lost interest | | | | (in millions) | 2013 | 2012 | 2011 | Amount by which interest income recognized on nonperforming loans exceeded reversals: | | | | Total | $ | 2 |
| $ | 5 |
| $ | 2 |
| Foreign | — |
| — |
| — |
| Amount by which interest income would have increased if nonperforming loans at year-end had been performing for the entire year: | | | | Total | $ | 9 |
| $ | 15 |
| $ | 17 |
| Foreign | — |
| — |
| — |
|
|
Information about Impaired Loans |
The table below sets forth information about our impaired loans. We use the discounted cash flow method as the primary method for valuing impaired loans.
| | | | | | | | | | | | | | | | | | | | | | | | | Impaired loans | 2013 | | 2012 | | 2011 | (in millions) | Average recorded investment |
| | Interest income recognized |
| | Average recorded investment |
| | Interest income recognized |
| | Average recorded investment |
| | Interest income recognized |
| Impaired loans with an allowance: | | | | | | | | | | | | Commercial | $ | 37 |
| | $ | 1 |
| | $ | 54 |
| | $ | 4 |
| | $ | 27 |
| | $ | 1 |
| Commercial real estate | 5 |
| | — |
| | 27 |
| | — |
| | 22 |
| | — |
| Financial institutions | 1 |
| | — |
| | 7 |
| | — |
| | 9 |
| | — |
| Wealth management loans and mortgages | 17 |
| | — |
| | 28 |
| | — |
| | 37 |
| | 1 |
| Foreign | 8 |
| | — |
| | 10 |
| | — |
| | 10 |
| | — |
| Total impaired loans with an allowance | 68 |
| | 1 |
| | 126 |
| | 4 |
| | 105 |
| | 2 |
| Impaired loans without an allowance: | | | | | | | | | | | | Commercial | 2 |
| | — |
| | — |
| | — |
| | 1 |
| | — |
| Commercial real estate | 6 |
| | — |
| | 3 |
| | — |
| | 13 |
| | — |
| Financial institutions | 1 |
| | — |
| | 2 |
| | — |
| | — |
| | — |
| Wealth management loans and mortgages | 3 |
| | — |
| | 4 |
| | — |
| | 2 |
| | — |
| Total impaired loans without an allowance (a) | 12 |
| | — |
| | 9 |
| | — |
| | 16 |
| | — |
| Total impaired loans | $ | 80 |
| | $ | 1 |
| | $ | 135 |
| | $ | 4 |
| | $ | 121 |
| | $ | 2 |
|
| | (a) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
| | | | | | | | | | | | | | | | | | | | | | | | | Impaired loans | | | | (in millions) | Recorded investment |
| | Unpaid principal balance |
| | Related allowance (a) |
| | Recorded investment |
| | Unpaid principal balance |
| | Related allowance (a) |
| Impaired loans with an allowance: | | | | | | | | | | | | Commercial | $ | 15 |
| | $ | 20 |
| | $ | 2 |
| | $ | 57 |
| | $ | 61 |
| | $ | 12 |
| Commercial real estate | 2 |
| | 4 |
| | 1 |
| | 15 |
| | 16 |
| | 1 |
| Financial institutions | — |
| | — |
| | — |
| | 1 |
| | 1 |
| | — |
| Wealth management loans and mortgages | 9 |
| | 9 |
| | 3 |
| | 28 |
| | 28 |
| | 7 |
| Foreign | 6 |
| | 17 |
| | 1 |
| | 9 |
| | 17 |
| | 4 |
| Total impaired loans with an allowance | 32 |
| | 50 |
| | 7 |
| | 110 |
| | 123 |
| | 24 |
| Impaired loans without an allowance: | | | | | | | | | | | | Commercial real estate | 1 |
| | 1 |
| | N/A |
| | 2 |
| | 2 |
| | N/A |
| Financial institutions | — |
| | — |
| | N/A |
| | 1 |
| | 8 |
| | N/A |
| Wealth management loans and mortgages | 3 |
| | 3 |
| | N/A |
| | 4 |
| | 4 |
| | N/A |
| Total impaired loans without an allowance (b) | 4 |
| | 4 |
| | N/A |
| | 7 |
| | 14 |
| | N/A |
| Total impaired loans (c) | $ | 36 |
| | $ | 54 |
| | $ | 7 |
| | $ | 117 |
| | $ | 137 |
| | $ | 24 |
|
| | (a) | The allowance for impaired loans is included in the allowance for loan losses. |
| | (b) | When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans. |
| | (c) | Excludes an aggregate of $1 million and $2 million of impaired loans in amounts individually less than $1 million at Dec. 31, 2013 and Dec. 31, 2012, respectively. The allowance for loan loss associated with these loans totaled less than $1 million at both Dec. 31, 2013 and Dec. 31, 2012. |
|
Information about Past Due Loans |
The table below sets forth information about our past due loans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Past due loans and still accruing interest | | | | | Days past due | Total past due |
| | Days past due | Total past due |
| (in millions) | 30-59 |
| 60-89 |
| >90 |
| 30-59 |
| 60-89 |
| >90 |
| Domestic: | | | | | | | | | | Wealth management loans and mortgages | $ | 45 |
| $ | 3 |
| $ | 1 |
| $ | 49 |
| | $ | 33 |
| $ | 7 |
| $ | 1 |
| $ | 41 |
| Other residential mortgages | 32 |
| 6 |
| 6 |
| 44 |
| | 50 |
| 9 |
| 5 |
| 64 |
| Financial institutions | 37 |
| — |
| — |
| 37 |
| | — |
| — |
| — |
| — |
| Commercial real estate | 22 |
| 2 |
| — |
| 24 |
| | 44 |
| — |
| — |
| 44 |
| Commercial | — |
| — |
| — |
| — |
| | — |
| 60 |
| — |
| 60 |
| Total domestic | 136 |
| 11 |
| 7 |
| 154 |
| | 127 |
| 76 |
| 6 |
| 209 |
| Foreign | — |
| — |
| — |
| — |
| | — |
| — |
| — |
| — |
| Total past due loans | $ | 136 |
| $ | 11 |
| $ | 7 |
| $ | 154 |
|
| $ | 127 |
| $ | 76 |
| $ | 6 |
| $ | 209 |
|
|
Troubled Debt Restructurings |
The following table presents TDRs that occurred in 2013 and 2012.
| | | | | | | | | | | | | | | | | | | | | | | TDRs | 2013 | | 2012 | | | | Outstanding recorded investment | | | | Outstanding recorded investment | (dollars in millions) | |
| Pre-modification | | Post-modification | | | |
| Pre-modification | | Post-modification | | Other residential mortgages | 123 |
| | $ | 24 |
| | $ | 30 |
| | 166 |
| | $ | 44 |
| | $ | 49 |
| Commercial | — |
| | — |
| | — |
| | 3 |
| | 42 |
| | 37 |
| Commercial real estate | — |
| | — |
| | — |
| | 2 |
| | 11 |
| | 12 |
| Wealth management loans and mortgages | — |
| | — |
| | — |
| | 6 |
| | 3 |
| | 3 |
| Foreign | — |
| | — |
| | — |
| | 1 |
| | 3 |
| | 3 |
| Total TDRs | 123 |
| | $ | 24 |
| | $ | 30 |
| | 178 |
| | $ | 103 |
| | $ | 104 |
|
|
Credit Quality Indicators - Commercial Portfolio - Credit Risk Profile by Creditworthiness Category |
The following tables set forth information about credit quality indicators.
Commercial loan portfolio
| | | | | | | | | | | | | | | | | | | | | | | | | Commercial loan portfolio – Credit risk profile by creditworthiness category | | Commercial | | Commercial real estate | | Financial institutions | (in millions) | |
| | |
| | |
| | |
| | |
| | |
| Investment grade | $ | 1,323 |
| | $ | 1,064 |
| | $ | 1,444 |
| | $ | 1,289 |
| | $ | 12,598 |
| | $ | 9,935 |
| Noninvestment grade | 324 |
| | 353 |
| | 566 |
| | 451 |
| | 1,761 |
| | 1,353 |
| Total | $ | 1,647 |
| | $ | 1,417 |
| | $ | 2,010 |
| | $ | 1,740 |
| | $ | 14,359 |
| | $ | 11,288 |
|
|
Credit Quality Indicators - Wealth Management Loans and Mortgages - Credit Risk Profile by Internally Assigned Grade |
Wealth management loans and mortgages
| | | | | | | | | Wealth management loans and mortgages – Credit risk profile by internally assigned grade | (in millions) | |
| | |
| Wealth management loans: | | | | Investment grade | $ | 4,920 |
| | $ | 4,597 |
| Noninvestment grade | 64 |
| | 125 |
| Wealth management mortgages | 4,834 |
| | 4,142 |
| Total | $ | 9,818 |
| | $ | 8,864 |
|
|
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