Citigroup Inc.

Residential Mortgage Loan to Values (LTVs)Loan to value (LTV) ratios are important credit indicators for U.S. mortgageloans. These ratios (loan balance divided by appraised value) are calculatedat origination and updated by applying market price data. The followingtable provides details on the LTV ratios attributable to Citi’s U.S. mortgageportfolios as of December 31, 2010. LTVs are updated monthly using the mostrecent Core Logic HPI data available for substantially all of the portfolioapplied at the Metropolitan Statistical Area level, if available; otherwise atthe state level. The remainder of the portfolio is updated in a similar mannerusing the Office of Federal Housing Enterprise Oversight indices.LTV Distribution in U.S. Portfolio (1)(2)In millions of dollarsLess than orequal to 80%> 80% but lessthan or equalto 100%LTVGreaterthan100%First mortgages $32,408 $25,311 $26,636Home equity loans 12,698 10,940 20,670Total $45,106 $36,251 $47,306Impaired Consumer LoansImpaired loans are those where Citigroup believes it is probable that it willnot collect all amounts due according to the original contractual termsof the loan. Impaired Consumer loans include non-accrual commercialmarket loans as well as smaller-balance homogeneous loans whose termshave been modified due to the borrower’s financial difficulties and Citigrouphas granted a concession to the borrower. These modifications may includeinterest rate reductions and/or principal forgiveness. Impaired Consumerloans exclude smaller-balance homogeneous loans that have not beenmodified and are carried on a non-accrual basis, as well as substantially allloans modified pursuant to Citi’s short-term modification programs (i.e., forperiods of 12 months or less). At December 31, 2010, loans included in theseshort-term programs amounted to $5.7 billion.Valuation allowances for impaired Consumer loans are determined inaccordance with ASC 310-10-35 considering all available evidence including,as appropriate, the present value of the expected future cash flows discountedat the loan’s original contractual effective rate, the secondary market value ofthe loan and the fair value of collateral less disposal costs.(1) Excludes loans guaranteed by U.S. government agencies, loans subject to LTSCs and loans recordedat fair value.(2) Excludes balances where LTV was not available. Such amounts are not material.The following table presents information about total impaired Consumer loans at and for the periods ending December 31, 2010 and 2009, respectively:Impaired Consumer LoansIn millions of dollarsRecorded Principalinvestment (1)(2) balanceRelated specificallowance (3)At and for the period ended Dec. 31, 2010 Dec. 31, 2009Averagecarrying value (4)Interest incomerecognized Recorded investment (1)Mortgage and real estate $10,629First mortgages $16,225 $17,287 $ 2,783 $13,606 $ 862Home equity loans 1,205 1,256 393 1,010 40Credit cards 5,906 5,906 3,237 5,314 131 2,453Installment and other 3,853Individual installment and other 3,286 3,348 1,172 3,627 393Commercial market loans 706 934 145 909 26Total (5) $27,328 $28,731 $ 7,730 $24,466 $ 1,452 $16,935At and for the period endedIn millions of dollarsDec. 31,2009Dec. 31,2008Average carrying value (4) $14,049 $5,266Interest income recognized 792 276(1) Recorded investment in a loan includes accrued credit card interest, and excludes net deferred loanfees and costs, unamortized premium or discount and direct write-downs.(2) $1,050 million of first mortgages, $6 million of home equity loans and $323 million of commercialmarket loans do not have a specific allowance.(3) Included in the Allowance for loan losses.(4) Average carrying value does not include related specific allowance.(5) Prior to 2008, the Company’s financial accounting systems did not separately track impaired smallerbalance,homogeneous Consumer loans whose terms were modified due to the borrowers’ financialdifficulties and it was determined that a concession was granted to the borrower. Smaller-balanceConsumer loans modified since January 1, 2008 amounted to $26.6 billion and $15.9 billion atDecember 31, 2010 and 2009, respectively. However, information derived from the Company’s riskmanagement systems indicates that the amounts of such outstanding modified loans, including thosemodified prior to 2008, approximated $28.2 billion and $18.1 billion at December 31, 2010 and2009, respectively.217