7.3 billion - Citigroup

Impaired Consumer LoansImpaired loans are those for which Citigroup believes it isprobable that it will not collect all amounts due according to theoriginal contractual terms of the loan. Impaired Consumer loansinclude non-accrual commercial market loans as well assmaller-balance homogeneous loans whose terms have beenmodified due to the borrower‘s financial difficulties andCitigroup has granted a concession to the borrower. Thesemodifications may include interest rate reductions and/orprincipal forgiveness. Impaired Consumer loans excludesmaller-balance homogeneous loans that have not been modifiedand are carried on a non-accrual basis. In addition, impairedConsumer loans exclude substantially all loans modifiedpursuant to Citi‘s short-term modification programs (i.e., forperiods of 12 months or less) that were modified prior toJanuary 1, 2011.Effective in the third quarter of 2011, as a result of adoptingASU 2011-02, certain loans modified under short-termprograms since January 1, 2011 that were previously measuredfor impairment under ASC 450 are now measured forimpairment under ASC 310-10-35. At the end of the firstinterim period of adoption (September 30, 2011), the recordedinvestment in receivables previously measured under ASC 450was $1,170 million and the allowance for credit lossesassociated with those loans was $467 million. See Note 1 to theConsolidated Financial Statements for a discussion of thischange.The following tables present information about total impaired Consumer loans at and for the periods ending March 31, 2012 andDecember 31, 2011, respectively, and for the three-month periods ended March 31, 2012 and March 31, 2011 for interest incomerecognized on impaired Consumer loans:Impaired Consumer LoansMarch 31, 2012Three MonthsEndedMar. 31, 2012Three MonthsEndedMar. 31, 2011In millions of dollarsRecordedinvestment (1)(2)UnpaidprincipalbalanceRelated specificallowance (3)AverageInterestincomeInterestincomecarrying value (4) recognized (5)(6) recognized (5)(6)Mortgage and real estateResidential first mortgages $19,076 $20,561 $2,995 $19,087 $215 $201Home equity loans 1,706 1,821 1,149 1,763 15 12Credit cards 5,971 6,031 2,788 6,465 87 97Installment and otherIndividual installment and other 2,208 2,209 937 2,472 69 71Commercial market loans 531 769 71 523 4 9Total (7) $29,492 $31,391 $7,940 $30,310 $390 $390(1) Recorded investment in a loan includes net deferred loan fees and costs, unamortized premium or discount and direct write-downs and includes accrued interestonly on credit card loans.(2) $929 million of residential first mortgages, $61 million of home equity loans and $203 million of commercial market loans do not have a specific allowance.(3) Included in the Allowance for loan losses.(4) Average carrying value represents the average recorded investment ending balance for last four quarters and does not include related specific allowance.(5) Includes amounts recognized on both an accrual and cash basis.(6) Cash interest receipts on smaller-balance homogeneous loans are generally recorded as revenue. The interest recognition policy for commercial market loans isidentical to that for Corporate loans, as described below.(7) Prior to 2008, the Company‘s financial accounting systems did not separately track impaired smaller-balance, homogeneous Consumer loans whose terms weremodified due to the borrowers‘ financial difficulties and it was determined that a concession was granted to the borrower. Smaller-balance consumer loansmodified since January 1, 2008 amounted to $29.0 billion at March 31, 2012. However, information derived from Citi‘s risk management systems indicates thatthe amounts of outstanding modified loans, including those modified prior to 2008, approximated $30.0 billion at March 31, 2012.119CITIGROUP – 2012 FIRST QUARTER 10-Q