Quarterly report pursuant to Section 13 or 15(d)

Loans, Notes and Mortgages (Tables)

v2.4.0.8
Loans, Notes and Mortgages (Tables)
6 Months Ended
Jun. 30, 2013
Loans and Leases Receivable, Net of Deferred Income [Abstract]  
Schedule of Loans Outstanding
The table below presents information on Merrill Lynch’s loans outstanding at June 30, 2013 and December 31, 2012.
Age Analysis of Outstanding Loans
 
 
 
 
 
 
 
 
(dollars in millions)
June 30, 2013
 
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)
Impaired
Fair Value
Outstanding
Consumer loans
 
 
 
 
 
 
 
 
 
 Residential mortgage
$
19

$
6

$

$
25

$
575

$
30

$
3,996

$

$
4,626

 Home equity




75

5



80

       Total consumer
19

6


25

650

35

3,996


4,706

Commercial
 
 
 
 
 
 
 
 
 
 Commercial - U.S.




1,469

7



1,476

 Commercial real estate




165

33



198

 Commercial - non-U.S.




3,328

8



3,336

       Total commercial loans




4,962

48



5,010

 Commercial loans measured at fair value







203

203

     Total commercial




4,962

48


203

5,213

         Other (2)




9,247



1,098

10,345

     Total loans
$
19

$
6

$

$
25

$
14,859

$
83

$
3,996

$
1,301

$
20,264

Allowance for loan losses
 
 
 
 
 
 
 
 
(40
)
     Total loans, net
 
 
 
 
 
 
 
 
$
20,224

Age Analysis of Outstanding Loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in millions)
December 31, 2012
 
30-59 Days
 
60-89 Days
 
90 Days or more
 
Total Past
 
Total Current or Less Than
 
Nonperforming
 
Loans Measured at
 
Total
 
Past Due
 
Past Due
 
Past Due
 
Due
 
30 Days Past Due
 
Loans (1)
 
Fair Value
 
Outstanding
Consumer loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Residential mortgage
$
10

 
$
4

 
$

 
$
14

 
$
412

 
$
24

 
$

 
$
450

 Home equity
1

 

 

 
1

 
93

 
3

 

 
97

             Total consumer
11

 
4

 

 
15

 
505

 
27

 

 
547

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 U.S. commercial

 

 

 

 
2,625

 
8

 

 
2,633

 Commercial real estate

 

 

 

 
204

 
37

 

 
241

 Non-U.S. commercial

 

 

 

 
3,007

 
44

 

 
3,051

             Total commercial loans

 

 

 

 
5,836

 
89

 

 
5,925

 Commercial loans measured at
     fair value

 

 

 

 

 

 
1,208

 
1,208

             Total commercial

 

 

 

 
5,836

 
89

 
1,208

 
7,133

         Other (3)

 

 

 

 
10,053

 

 
1,869

 
11,922

             Total loans
$
11

 
$
4

 
$

 
$
15

 
$
16,394

 
$
116

 
$
3,077

 
$
19,602

 Allowance for loan losses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(57
)
             Total loans, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
19,545

(1) 
Excludes loans measured at fair value.
(2) 
Includes securities-backed loans and loans held for sale of $8.9 billion and $1.4 billion, respectively, as of June 30, 2013.
(3) 
Includes securities-backed loans and loans held for sale of $9.6 billion and $2.3 billion, respectively, as of December 31, 2012.
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 June 30, 2013 and December 31, 2012.
 
 
 
 
 
 
Consumer - Credit Quality Indicators
 
 
 
 
 
 
June 30, 2013
(dollars in millions)
Residential Mortgages (1)
 
Home Equity (1)
 
PCI Loans
Refreshed LTV
 
 
 
 
 
   Less than 90 percent
$
232

 
$
72

 
$
2,900

   Greater than 90 percent but less than 100 percent
112

 
4

 
391

   Greater than 100 percent
286

 
4

 
705

          Total Consumer
$
630

 
$
80

 
$
3,996

Refreshed FICO Score
 
 
 
 
 
   Less than 620
$
59

 
$
7

 
$
3,006

   Greater than or equal to 620 and less than 680
120

 
5

 
685

   Greater than or equal to 680 and less than 740
186

 
16

 
247

   Greater than or equal to 740
265

 
52

 
58

          Total Consumer
$
630

 
$
80

 
$
3,996

 
 
 
 
 
 
 
 
 
 
 
 
(1) Excludes PCI loans
 
 
 
 
 
 
 
 
 
Commercial - Credit Quality Indicators
 
 
 
 
 
 
 
(dollars in millions)
June 30, 2013
 
 
 
 
Commercial - U.S.
 
Commercial Real Estate
 
Commercial- non-U.S.
 
 
 
Risk Ratings
 
 
 
 
 
 
 
 
  Pass rated
$
1,412

 
$
77

 
$
3,214

 
 
 
  Reservable criticized
64

 
121

 
122

 
 
 
Total Commercial
$
1,476

 
$
198

 
$
3,336

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




 
 
 
 
 
 
Consumer - Credit Quality Indicators
 
 
 
 
 
 
December 31, 2012
 
(dollars in millions)
Residential Mortgages
 
Home Equity
 
 
Refreshed LTV
 
 
 
 
 
   Less than 90 percent
$
295

 
$
87

 
 
   Greater than 90 percent but less than 100 percent
41

 
5

 
 
   Greater than 100 percent
114

 
5

 
 
          Total Consumer
$
450

 
$
97

 
 
Refreshed FICO Score
 
 
 
 
 
   Less than 620
$
21

 
$
5

 
 
   Greater than or equal to 620 and less than 680
44

 
7

 
 
   Greater than or equal to 680 and less than 740
116

 
25

 
 
   Greater than or equal to 740
269

 
60

 
 
          Total Consumer
$
450

 
$
97

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
Commercial - Credit Quality Indicators
 
 
 
 
 
 
 
(dollars in millions)
December 31, 2012
 
 
 
 
Commercial - U.S.
 
Commercial Real Estate
 
Commercial- non-U.S.
 
 
 
     Risk Ratings
 
 
 
 
 
 
 
 
Pass rated
$
2,506

 
$
105

 
$
2,918

 
 
 
Reservable criticized
127

 
136

 
133

 
 
 
     Total Commercial
$
2,633

 
$
241

 
$
3,051

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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:
(dollars in millions)
 
 
 
 
For the Six Months Ended
June 30, 2013
 
For the Six Months Ended
June 30, 2012
Allowance for loan losses, at beginning of period
$
57

 
$
72

Provision for loan losses
(33
)
 
(16
)
Charge-offs
(3
)
 
(9
)
Recoveries
19

 
8

Net charge-offs
16

 
(1
)
Allowance for loan losses, at end of period
$
40

 
$
55

 
 
 
 
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 June 30, 2013 are as follows:
 
 
Available-for-Sale
 
 
Amortized
Cost
 
Fair
Value
 
Due in one year or less
$
410

 
$
410

 
Due after one year through five years
2

 
2

 
Due after five years through ten years
200

 
200

 
Total(1)
$
612

 
$
612

 
 
 
 
 
 
(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 June 30, 2013 and December 31, 2012:

Net Credit Default Protection by Maturity Profile
 
 
June 30,
2013
December 31,
2012
Less than or equal to one year
16
%
25
%
Greater than one year and less than or equal to five years
84

75

Total net credit default protection
100
%
100
%
 
 
 
Schedule of Net Credit Default Protection
Net Credit Default Protection by Credit Exposure Debt Rating

(dollars in millions)
 
 
 
 
 
June 30, 2013
 
December 31, 2012
Ratings(1)
Net
Notional
 
Percent
 
Net
Notional
 
Percent
AA
$
(173
)
 
11.4
%
 
$
(268
)
 
13.1
%
A
(873
)
 
57.5

 
(1,034
)
 
50.6

BBB
(414
)
 
27.3

 
(530
)
 
26.0

BB
(45
)
 
3.0

 
(86
)
 
4.2

B

 

 
(30
)
 
1.5

CCC and below
(12
)
 
0.8

 
(93
)
 
4.6

Total net credit default protection
$
(1,517
)
 
100
%
 
$
(2,041
)
 
100.0
%

(1) Merrill Lynch considers ratings of BBB- or higher to meet the definition of investment grade.

Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period [Table Text Block]
The following table below provides details of these loans:
 

(dollars in millions)
 
 
Six Months Ended June 30, 2013
Contractually required payments including interest
 
$
7,433

Less: Non accretable difference
 
(2,465
)
      Cash flows expected to be collected (1)
 
4,968

Less: Accretable yield
 
 
(851
)
      Fair value of loans acquired
 
$
4,117

 
 
 
 
(1) Represents undiscounted expected principal and interest cash flows
Accretable Yield Activity [Table Text Block]
 
 
 
 
 
 
(dollars in millions)
 
Three Months Ended June 30, 2013
Six Months Ended June 30, 2013
 
Accretable yield, beginning of period
 
$
677


 
Acquisitions
 
135

851

 
Accretions
 
(38
)
(72
)
 
Disposals/transfers
 
(7
)
(12
)
 
Reclassifications from nonaccretable difference
 
462

462

 
Accretable yield, June 30, 2013
 
$
1,229

$
1,229