Finance Receivables and Loans, Net

The composition of finance receivables and loans, net, reported at carrying value before allowance for loan losses was as follows.



December 31, ($ in millions)	2013		2012
Consumer automobile (a)	$	56,417	$	53,715
Consumer mortgage (b) (c)	8,444		9,821
Commercial
Commercial and industrial
Automobile	30,948		30,270
Mortgage	—		—
Other	1,664		2,697
Commercial real estate - Automobile	2,855		2,552
Total commercial	35,467		35,519
Total finance receivables and loans (d)	$	100,328	$	99,055


(a)	Includes $1 million of fair value adjustment for loans in hedge accounting relationships at December 31, 2013. Refer to Note 21 for additional information.


(b)	Includes interest-only mortgage loans of $1.5 billion and $2.1 billion at December 31, 2013, and December 31, 2012, respectively, the majority of which are expected to start principal amortization in 2015 or beyond.


(c)	Includes domestic consumer mortgages at a fair value of $1 million at December 31, 2013, as a result of fair value option election.


(d)	Totals are net of unearned income, unamortized premiums and discounts, and deferred fees and costs of $595 million and $895 million at December 31, 2013, and December 31, 2012, respectively.

The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans.



($ in millions)	Consumer automobile			Consumer mortgage			Commercial			Total
Allowance at January 1, 2013	$	575		$	452		$	143		$	1,170
Charge-offs	(639		)	(93		)	(5		)	(737		)
Recoveries	237			18			10			265
Net charge-offs	(402		)	(75		)	5			(472		)
Provision for loan losses	490			13			(2		)	501
Other	10			(1		)	—			9
Allowance at December 31, 2013	$	673		$	389		$	146		$	1,208
Allowance for loan losses
Individually evaluated for impairment	$	23		$	199		$	26		$	248
Collectively evaluated for impairment	650			190			120			960
Loans acquired with deteriorated credit quality	—			—			—			—
Finance receivables and loans at historical cost
Ending balance	56,417			8,443			35,467			100,327
Individually evaluated for impairment	281			919			204			1,404
Collectively evaluated for impairment	56,128			7,524			35,263			98,915
Loans acquired with deteriorated credit quality	8			—			—			8



($ in millions)	Consumer automobile			Consumer mortgage			Commercial			Total
Allowance at January 1, 2012	$	766		$	516		$	221		$	1,503
Charge-offs	(616		)	(149		)	(11		)	(776		)
Recoveries	247			11			44			302
Net charge-offs	(369		)	(138		)	33			(474		)
Provision for loan losses	257			86			(14		)	329
Other (a)	(79		)	(12		)	(97		)	(188		)
Allowance at December 31, 2012	$	575		$	452		$	143		$	1,170
Allowance for loan losses
Individually evaluated for impairment	$	16		$	186		$	26		$	228
Collectively evaluated for impairment	556			266			117			939
Loans acquired with deteriorated credit quality	3			—			—			3
Finance receivables and loans at historical cost
Ending balance	53,715			9,821			35,519			99,055
Individually evaluated for impairment	260			873			1,538			2,671
Collectively evaluated for impairment	53,425			8,948			33,981			96,354
Loans acquired with deteriorated credit quality	30			—			—			30


(a)	Includes provision for loan losses relating to discontinued operations of $65 million.

The following table presents information about significant sales of finance receivables and loans recorded at historical cost and transfers of finance receivables and loans from held-for-investment to held-for-sale.



December 31, ($ in millions)	2013		2012
Consumer automobile	$	—	$	1,960
Consumer mortgage	—		40
Commercial	65		96
Total sales and transfers	$	65	$	2,096

The following table presents an analysis of our past due finance receivables and loans, net, recorded at historical cost reported at carrying value before allowance for loan losses.



December 31, ($ in millions)	30-59 days past due		60-89 days past due		90 days or more past due		Total past due		Current		Total finance receivables and loans
2013
Consumer automobile	$	1,145	$	255	$	157	$	1,557	$	54,860	$	56,417
Consumer mortgage	82		31		124		237		8,206		8,443
Commercial
Commercial and industrial
Automobile	—		—		36		36		30,912		30,948
Mortgage	—		—		—		—		—		—
Other	—		—		—		—		1,664		1,664
Commercial real estate - Automobile	—		—		6		6		2,849		2,855
Total commercial	—		—		42		42		35,425		35,467
Total consumer and commercial	$	1,227	$	286	$	323	$	1,836	$	98,491	$	100,327
2012
Consumer automobile	$	920	$	213	$	138	$	1,271	$	52,444	$	53,715
Consumer mortgage	81		43		174		298		9,523		9,821
Commercial
Commercial and industrial
Automobile	—		—		16		16		30,254		30,270
Mortgage	—		—		—		—		—		—
Other	—		—		1		1		2,696		2,697
Commercial real estate - Automobile	—		—		8		8		2,544		2,552
Total commercial	—		—		25		25		35,494		35,519
Total consumer and commercial	$	1,001	$	256	$	337	$	1,594	$	97,461	$	99,055

The following table presents the carrying value before allowance for loan losses of our finance receivables and loans recorded at historical cost on nonaccrual status.



December 31, ($ in millions)	2013		2012
Consumer automobile	$	329	$	260
Consumer mortgage	192		382
Commercial
Commercial and industrial
Automobile	116		146
Mortgage	—		—
Other	74		33
Commercial real estate - Automobile	14		37
Total commercial	204		216
Total consumer and commercial finance receivables and loans	$	725	$	858

Management performs a quarterly analysis of the consumer automobile, consumer mortgage, and commercial portfolios using a range of credit quality indicators to assess the adequacy of the allowance based on historical and current trends. The tables below present the population of loans by quality indicators for our consumer automobile, consumer mortgage, and commercial portfolios.

The following table presents performing and nonperforming credit quality indicators in accordance with our internal accounting policies for our consumer finance receivables and loans recorded at historical cost reported at carrying value before allowance for loan losses. Nonperforming loans include finance receivables and loans on nonaccrual status when the principal or interest has been delinquent for 90 days or when full collection is determined not to be probable. Refer to Note 1 for additional information.



	2013						2012
December 31, ($ in millions)	Performing		Nonperforming		Total		Performing		Nonperforming		Total
Consumer automobile	$	56,088	$	329	$	56,417	$	53,455	$	260	$	53,715
Consumer mortgage	8,251		192		8,443		9,439		382		9,821

The following table presents pass and criticized credit quality indicators based on regulatory definitions for our commercial finance receivables and loans recorded at historical cost reported at carrying value before allowance for loan losses.



	2013						2012
December 31, ($ in millions)	Pass		Criticized (a)		Total		Pass		Criticized (a)		Total
Commercial
Commercial and industrial
Automobile	$	29,194	$	1,754	$	30,948	$	28,978	$	1,292	$	30,270
Mortgage	—		—		—		—		—		—
Other	1,388		276		1,664		2,417		280		2,697
Commercial real estate - Automobile	2,770		85		2,855		2,440		112		2,552
Total commercial	$	33,352	$	2,115	$	35,467	$	33,835	$	1,684	$	35,519


(a)	Includes loans classified as special mention, substandard, or doubtful. These classifications are based on regulatory definitions and generally represent loans within our portfolio that have a higher default risk or have already defaulted.

Impaired Loans and Troubled Debt Restructurings

Impaired Loans

Loans are considered impaired when we determine it is probable that we will be unable to collect all amounts due according to the terms of the loan agreement. For more information on our impaired finance receivables and loans, refer to Note 1.

The following table presents information about our impaired finance receivables and loans recorded at historical cost.



December 31, ($ in millions)	Unpaid principal balance		Carrying value before allowance		Impaired with no allowance		Impaired with an allowance		Allowance for impaired loans
2013
Consumer automobile	$	281	$	281	$	—	$	281	$	23
Consumer mortgage	924		919		128		791		199
Commercial
Commercial and industrial
Automobile	116		116		57		59		7
Mortgage	—		—		—		—		—
Other	74		74		—		74		16
Commercial real estate - Automobile	14		14		9		5		3
Total commercial	204		204		66		138		26
Total consumer and commercial finance receivables and loans	$	1,409	$	1,404	$	194	$	1,210	$	248
2012
Consumer automobile	$	260	$	260	$	90	$	170	$	16
Consumer mortgage	958		873		124		749		186
Commercial
Commercial and industrial
Automobile	146		146		54		92		7
Mortgage	—		—		—		—		—
Other	33		33		9		24		7
Commercial real estate - Automobile	37		37		9		28		12
Total commercial	216		216		72		144		26
Total consumer and commercial finance receivables and loans	$	1,434	$	1,349	$	286	$	1,063	$	228

The following tables present average balance and interest income for our impaired finance receivables and loans.



	2013				2012				2011
Year ended December 31, ($ in millions)	Average balance		Interest income		Average balance		Interest income		Average balance		Interest income
Consumer automobile	$	278	$	18	$	131	$	12	$	35	$	2
Consumer mortgage	908		29		693		28		553		22
Commercial
Commercial and industrial
Automobile	152		6		178		8		303		19
Mortgage	—		—		5		—		19		6
Other	72		2		32		6		84		1
Commercial real estate
Automobile	29		1		64		1		126		7
Mortgage	—		—		6		—		40		1
Total commercial	253		9		285		15		572		34
Total consumer and commercial finance receivables and loans	$	1,439	$	56	$	1,109	$	55	$	1,160	$	58

Troubled Debt Restructurings

TDRs are loan modifications where concessions were granted to borrowers experiencing financial difficulties. Numerous initiatives are in place to provide support to our mortgage customers in financial distress, including principal forgiveness, maturity extensions, delinquent interest capitalization, and changes to contractual interest rates. Additionally for automobile loans, we may offer several types of assistance to aid our customers, including extension of the loan maturity date and rewriting the loan terms. Total TDRs recorded at historical cost and reported at carrying value before allowance for loan losses were $1.3 billion at December 31, 2013, reflecting an increase of $112 million from December 31, 2012. Refer to Note 1 for additional information.

The following table presents information related to finance receivables and loans recorded at historical cost modified in connection with a TDR during the period.



	2013 (a)					2012 (a)
Year ended December 31, ($ in millions)	Number of loans	Pre-modification carrying value before allowance		Post-modification carrying value before allowance		Number of loans	Pre-modification carrying value before allowance		Post-modification carrying value before allowance
Consumer automobile	19,388	$	297	$	249	36,285	$	407	$	295
Consumer mortgage	1,092	278		234		2,969	436		350
Commercial
Commercial and industrial
Automobile	8	37		37		9	15		15
Mortgage	—	—		—		—	—		—
Other	4	80		78		—	—		—
Commercial real estate - Automobile	5	20		20		8	14		13
Total commercial	17	137		135		17	29		28
Total consumer and commercial finance receivables and loans	20,497	$	712	$	618	39,271	$	872	$	673


(a)	Due to recent industry practice, bankruptcy loans that have not been reaffirmed have been included within our TDR population beginning in the fourth quarter of 2012.

The following table presents information about finance receivables and loans recorded at historical cost that have redefaulted during the reporting period and were within 12 months or less of being modified as a TDR. Redefault is when finance receivables and loans meet the requirements for evaluation under our charge-off policy (Refer to Note 1 for additional information) except for commercial finance receivables and loans, where redefault is defined as 90 days past due.



	2013 (a)					2012 (a)
Year ended December 31, ($ in millions)	Number of loans	Carrying value before allowance		Charge-off amount		Number of loans	Carrying value before allowance		Charge-off amount
Consumer automobile	6,038	$	75	$	37	2,290	$	26	$	12
Consumer mortgage	32	8		1		153	19		3
Commercial
Commercial and industrial - Automobile	—	—		—		4	3		—
Commercial real estate - Automobile	—	—		—		3	3		—
Total commercial	—	—		—		7	6		—
Total consumer and commercial finance receivables and loans	6,070	$	83	$	38	2,450	$	51	$	15


(a)	Due to recent industry practice, bankruptcy loans that have not been reaffirmed have been included within our TDR population beginning in the fourth quarter of 2012.

At December 31, 2013, and December 31, 2012, commercial commitments to lend additional funds to debtors owing receivables whose terms had been modified in a TDR were $26 million and $25 million, respectively.

Concentration Risk

Consumer

We monitor our consumer loan portfolio for concentration risk across the geographies in which we lend. The highest concentrations of loans are in Texas and California, which represent an aggregate of 21.1% of our total outstanding consumer finance receivables and loans at December 31, 2013.

Concentrations in our mortgage portfolio are closely monitored given the volatility of the housing markets. Our consumer mortgage loan concentrations in California, Florida, and Michigan receive particular attention as the real estate value depreciation in these states has been the most severe.

The following table shows the percentage of total consumer finance receivables and loans recorded at historical cost reported at carrying value before allowance for loan losses by geographic region.



	2013 (a)				2012
December 31,	Automobile		1st Mortgage and home equity		Automobile		1st Mortgage and home equity
Texas	13.2	%	5.8	%	12.9	%	5.8	%
California	5.8		29.5		5.6		29.2
Florida	7.0		3.6		6.7		3.6
Pennsylvania	5.3		1.7		5.2		1.6
Illinois	4.4		4.4		4.3		4.8
Michigan	4.4		3.9		5.0		4.1
New York	4.3		1.9		4.6		2.0
Georgia	4.0		2.1		3.7		1.9
Ohio	4.0		0.7		4.0		0.8
North Carolina	3.4		1.9		3.3		2.0
Other United States	44.2		44.5		44.7		44.2
Total consumer loans	100.0	%	100.0	%	100.0	%	100.0	%


(a)	Presentation is in descending order as a percentage of total consumer finance receivables and loans at December 31, 2013.

Commercial Real Estate

The commercial real estate portfolio consists of loans issued primarily to automotive dealers. The following table shows the percentage of total commercial real estate finance receivables and loans reported at carrying value before allowance for loan losses by geographic region.



December 31,	2013		2012
Geographic region
Texas	13.2	%	13.0	%
Florida	12.6		11.7
Michigan	11.6		12.6
California	9.2		9.3
New York	4.5		4.9
North Carolina	4.1		3.9
Virginia	3.8		3.9
Pennsylvania	3.3		3.3
Georgia	3.1		3.0
Illinois	2.5		1.8
Other United States	32.1		32.6
Total commercial real estate finance receivables and loans	100.0	%	100.0	%

Commercial Criticized Exposure

Finance receivables and loans classified as special mention, substandard, or doubtful are deemed as criticized. These classifications are based on regulatory definitions and generally represent finance receivables and loans within our portfolio that have a higher default risk or have already defaulted. The following table presents the percentage of total commercial criticized finance receivables and loans reported at carrying value before allowance for loan losses by industry concentrations.



December 31,	2013		2012
Industry
Automotive	91.4	%	85.7	%
Electronics	3.4		1.2
Services	2.5		4.9
Other	2.7		8.2
Total commercial criticized finance receivables and loans	100.0	%	100.0	%