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Loans, Notes and Mortgages (Tables)
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3 Months Ended |
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Mar. 31, 2013
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| Loans and Leases Receivable, Net of Deferred Income [Abstract] |
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| Schedule of Loans Outstanding |
The table below presents information on Merrill Lynch’s loans outstanding at March 31, 2013 and December 31, 2012.
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Age Analysis of Outstanding Loans |
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(dollars in millions) |
March 31, 2013 |
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30-59 Days |
60-89 Days |
90 Days or more |
Total Past |
Total Current or Less Than |
Nonperforming |
Purchased Credit |
Loans Measured at |
Total |
|
Past Due |
Past Due |
Past Due |
Due |
30 Days Past Due |
Loans (1)
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Impaired |
Fair Value |
Outstanding |
Consumer loans |
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Residential mortgage |
$ |
14 |
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$ |
5 |
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$ |
— |
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$ |
19 |
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$ |
591 |
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$ |
28 |
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$ |
3,250 |
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$ |
— |
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$ |
3,888 |
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Home equity |
— |
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— |
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— |
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— |
|
83 |
|
5 |
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— |
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— |
|
88 |
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Total consumer |
14 |
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5 |
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— |
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19 |
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674 |
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33 |
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3,250 |
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— |
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3,976 |
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Commercial |
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Commercial - U.S. |
— |
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— |
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— |
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— |
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2,025 |
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8 |
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— |
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— |
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2,033 |
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Commercial real estate |
— |
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— |
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— |
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— |
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200 |
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33 |
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— |
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— |
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233 |
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Commercial - non-U.S. |
— |
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— |
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— |
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— |
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2,750 |
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8 |
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— |
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— |
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2,758 |
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Total commercial loans |
— |
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— |
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— |
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— |
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4,975 |
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49 |
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— |
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— |
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5,024 |
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Commercial loans measured at fair value |
— |
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— |
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— |
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— |
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— |
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— |
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— |
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800 |
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800 |
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Total commercial |
— |
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— |
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— |
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— |
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4,975 |
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49 |
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— |
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800 |
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5,824 |
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Other (2)
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— |
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— |
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— |
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— |
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9,069 |
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— |
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— |
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1,293 |
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10,362 |
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Total loans |
$ |
14 |
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$ |
5 |
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$ |
— |
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$ |
19 |
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$ |
14,718 |
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$ |
82 |
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$ |
3,250 |
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$ |
2,093 |
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$ |
20,162 |
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Allowance for loan losses |
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(57 |
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Total loans, net |
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$ |
20,105 |
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Age Analysis of Outstanding Loans |
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(dollars in millions) |
December 31, 2012 |
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30-59 Days |
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60-89 Days |
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90 Days or more |
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Total Past |
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Total Current or Less Than |
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Nonperforming |
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Loans Measured at |
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Total |
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Past Due |
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Past Due |
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Past Due |
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Due |
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30 Days Past Due |
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Loans (1)
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Fair Value |
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Outstanding |
Consumer loans |
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Residential mortgage |
$ |
10 |
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$ |
4 |
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$ |
— |
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$ |
14 |
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$ |
412 |
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$ |
24 |
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$ |
— |
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$ |
450 |
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Home equity |
1 |
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— |
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— |
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1 |
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93 |
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3 |
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— |
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97 |
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Total consumer |
11 |
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4 |
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— |
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15 |
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505 |
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27 |
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— |
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547 |
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Commercial |
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U.S. commercial |
— |
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— |
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— |
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— |
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2,625 |
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8 |
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— |
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2,633 |
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Commercial real estate |
— |
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— |
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— |
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— |
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204 |
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37 |
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— |
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241 |
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Non-U.S. commercial |
— |
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— |
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— |
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— |
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3,007 |
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44 |
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— |
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3,051 |
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Total commercial loans |
— |
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— |
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— |
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— |
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5,836 |
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89 |
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— |
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5,925 |
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Commercial loans measured at
fair value
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— |
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— |
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— |
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— |
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— |
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— |
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1,208 |
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1,208 |
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Total commercial |
— |
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— |
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— |
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— |
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5,836 |
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89 |
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1,208 |
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7,133 |
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Other (3)
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— |
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— |
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— |
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— |
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10,053 |
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— |
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1,869 |
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11,922 |
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Total loans |
$ |
11 |
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$ |
4 |
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$ |
— |
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$ |
15 |
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$ |
16,394 |
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$ |
116 |
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$ |
3,077 |
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$ |
19,602 |
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Allowance for loan losses |
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(57 |
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Total loans, net |
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$ |
19,545 |
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(1) |
Excludes loans measured at fair value. |
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(2) |
Includes securities-backed loans and loans held for sale of $8.8 billion and $1.6 billion, respectively, as of March 31, 2013.
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(3) |
Includes securities-backed loans and loans held for sale of $9.6 billion and $2.3 billion, respectively, as of December 31, 2012.
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| Schedule of Financing Receivable Credit Quality Indicators |
The tables below present credit quality indicators for Merrill Lynch's consumer and commercial loan portfolios, excluding loans accounted for under the fair value option, at March 31, 2013 and December 31, 2012.
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Consumer - Credit Quality Indicators |
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March 31, 2013 |
(dollars in millions) |
Residential Mortgages (1)
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Home Equity (1)
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PCI Loans |
Refreshed LTV |
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Less than 90 percent |
$ |
417 |
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$ |
79 |
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$ |
2,201 |
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Greater than 90 percent but less than 100 percent |
82 |
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5 |
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376 |
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Greater than 100 percent |
139 |
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4 |
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673 |
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Total Consumer |
$ |
638 |
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$ |
88 |
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$ |
3,250 |
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Refreshed FICO Score |
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Less than 620 |
$ |
54 |
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$ |
7 |
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$ |
2,571 |
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Greater than or equal to 620 and less than 680 |
136 |
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5 |
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500 |
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Greater than or equal to 680 and less than 740 |
177 |
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20 |
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155 |
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Greater than or equal to 740 |
271 |
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56 |
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24 |
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Total Consumer |
$ |
638 |
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$ |
88 |
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$ |
3,250 |
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(1) Excludes PCI loans
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Commercial - Credit Quality Indicators |
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(dollars in millions) |
March 31, 2013 |
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Commercial - U.S. |
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Commercial Real Estate |
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Commercial- non-U.S. |
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Risk Ratings |
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Pass rated |
$ |
1,950 |
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$ |
104 |
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$ |
2,660 |
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Reservable criticized |
83 |
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129 |
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98 |
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Total Commercial |
$ |
2,033 |
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$ |
233 |
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$ |
2,758 |
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Consumer - Credit Quality Indicators |
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December 31, 2012 |
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(dollars in millions) |
Residential Mortgages |
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Home Equity |
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Refreshed LTV |
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Less than 90 percent |
$ |
295 |
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$ |
87 |
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Greater than 90 percent but less than 100 percent |
41 |
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5 |
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Greater than 100 percent |
114 |
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5 |
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Total Consumer |
$ |
450 |
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$ |
97 |
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Refreshed FICO Score |
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Less than 620 |
$ |
21 |
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$ |
5 |
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Greater than or equal to 620 and less than 680 |
44 |
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7 |
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Greater than or equal to 680 and less than 740 |
116 |
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25 |
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Greater than or equal to 740 |
269 |
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60 |
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Total Consumer |
$ |
450 |
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$ |
97 |
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Commercial - Credit Quality Indicators |
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(dollars in millions) |
December 31, 2012 |
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Commercial - U.S. |
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Commercial Real Estate |
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Commercial- non-U.S. |
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Risk Ratings |
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Pass rated |
$ |
2,506 |
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$ |
105 |
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$ |
2,918 |
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Reservable criticized |
127 |
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136 |
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133 |
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Total Commercial |
$ |
2,633 |
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$ |
241 |
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$ |
3,051 |
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| Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent |
Activity in the allowance for loan losses, which is primarily associated with commercial loans, is presented below:
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(dollars in millions) |
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For the Three Months Ended
March 31, 2013 |
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For the Three Months Ended
March 31, 2012 |
Allowance for loan losses, at beginning of period |
$ |
57 |
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$ |
72 |
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Provision for loan losses |
(16 |
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3 |
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Charge-offs |
(2 |
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(3 |
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Recoveries |
18 |
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3 |
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Net charge-offs |
16 |
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— |
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Allowance for loan losses, at end of period |
$ |
57 |
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$ |
75 |
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| Investments Classified by Contractual Maturity Date |
The amortized cost and fair value of available-for-sale debt securities by expected maturity for mortgage-backed securities and contractual maturity for other debt securities at March 31, 2013 are as follows:
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Available-for-Sale |
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Amortized
Cost
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Fair
Value
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Due in one year or less |
$ |
411 |
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$ |
411 |
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Due after one year through five years |
99 |
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99 |
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Due after five years through ten years |
105 |
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105 |
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Total(1)
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$ |
615 |
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$ |
615 |
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(1) |
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay their obligations with or without prepayment penalties. |
The following tables provide information regarding Merrill Lynch’s net credit default protection associated with its funded and unfunded commercial loans as of March 31, 2013 and December 31, 2012:
Net Credit Default Protection by Maturity Profile
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March 31,
2013 |
December 31,
2012 |
Less than or equal to one year |
27 |
% |
25 |
% |
Greater than one year and less than or equal to five years |
73 |
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75 |
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Total net credit default protection |
100 |
% |
100 |
% |
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| Schedule of Net Credit Default Protection |
Net Credit Default Protection by Credit Exposure Debt Rating
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(dollars in millions) |
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March 31, 2013 |
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December 31, 2012 |
Ratings(1)
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Net
Notional |
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Percent |
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Net
Notional |
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Percent |
AA |
$ |
(238 |
) |
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12.9 |
% |
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$ |
(268 |
) |
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13.1 |
% |
A |
(983 |
) |
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53.5 |
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(1,034 |
) |
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50.6 |
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BBB |
(434 |
) |
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23.6 |
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(530 |
) |
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26.0 |
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BB |
(80 |
) |
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4.4 |
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(86 |
) |
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4.2 |
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B |
(30 |
) |
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1.6 |
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(30 |
) |
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1.5 |
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CCC and below |
(73 |
) |
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4.0 |
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(93 |
) |
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4.6 |
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Total net credit default protection |
$ |
(1,838 |
) |
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100 |
% |
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$ |
(2,041 |
) |
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100.0 |
% |
(1) Merrill Lynch considers ratings of BBB- or higher to meet the definition of investment grade.
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| Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block] |
The following table provides details of these loans:
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(dollars in millions) |
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Contractually required payments including interest |
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$ |
5,460 |
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Less: Nonaccretable difference |
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(1,440 |
) |
Cash flows expected to be collected (1)
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4,020 |
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Less: Accretable yield |
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(716 |
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Fair value of loans acquired |
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$ |
3,304 |
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(1) Represents undiscounted expected principal and interest cash flows.
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| Accretable Yield Activity [Table Text Block] |
The table below shows activity for the accretable yield on these loans. Reclassifications from nonaccretable difference primarily result when there is a change in expected cash flows due to various factors, including changes in interest rates on variable-rate loans and prepayment assumptions. Changes in the prepayment assumption affect the expected remaining life of the portfolio, which results in a change to the amount of future interest cash flows.
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(dollars in millions) |
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Three Months Ended March 31, 2013 |
Accretable yield, January 1, 2013 |
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$ |
— |
|
Acquisitions |
|
716 |
|
Accretions |
|
(34 |
) |
Disposals/transfers |
|
(5 |
) |
Accretable yield, March 31, 2013 |
|
$ |
677 |
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