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Finance Receivables and Loans, Net
 9 Months Ended
Sep. 30, 2017
Loans and Leases Receivable, Net Amount [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
Finance Receivables and Loans, Net
The composition of finance receivables and loans reported at gross carrying value was as follows.
($ in millions)
 
September 30, 2017
 
December 31, 2016
Consumer automotive (a)
 
$
67,077

 
$
65,793

Consumer mortgage
 
 
 
 
Mortgage Finance (b)
 
9,760

 
8,294

Mortgage — Legacy (c)
 
2,255

 
2,756

Total consumer mortgage
 
12,015

 
11,050

Total consumer
 
79,092

 
76,843

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
31,985

 
35,041

Other
 
3,774

 
3,248

Commercial real estate — Automotive
 
4,020

 
3,812

Total commercial
 
39,779

 
42,101

Total finance receivables and loans (d)
 
$
118,871

 
$
118,944

(a)
Includes $24 million and $43 million of fair value adjustment for loans in hedge accounting relationships at September 30, 2017, and December 31, 2016, respectively. Refer to Note 19 for additional information.
(b)
Includes loans originated as interest-only mortgage loans of $24 million and $30 million at September 30, 2017, and December 31, 2016, respectively, 35% of which are expected to start principal amortization in 2019, and 44% in 2020. The remainder of these loans have already exited the interest-only period.
(c)
Includes loans originated as interest-only mortgage loans of $538 million and $714 million at September 30, 2017, and December 31, 2016, respectively, 2% of which are expected to start principal amortization in 2018, and 1% beyond 2020. The remainder of these loans have already exited the interest-only period.
(d)
Totals include net increases of $494 million and $359 million at September 30, 2017, and December 31, 2016, respectively, for unearned income, unamortized premiums and discounts, and deferred fees and costs.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans.
Three months ended September 30, 2017 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at July 1, 2017
 
$
1,002

 
$
83

 
$
140

 
$
1,225

Charge-offs (a)
 
(327
)
 
(7
)
 
(10
)
 
(344
)
Recoveries
 
85

 
6

 
—

 
91

Net charge-offs
 
(242
)

(1
)
 
(10
)
 
(253
)
Provision for loan losses
 
314

 
—

 
—

 
314

Other
 
—

 
(1
)
 
1

 
—

Allowance at September 30, 2017
 
$
1,074


$
81


$
131

 
$
1,286

(a)
Represents the amount of the gross carrying value directly written off. For consumer and commercial loans, the loss from a charge-off is measured as the difference between the gross carrying value of a loan and the fair value of the collateral, less costs to sell. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for more information regarding our charge-off policies.
Three months ended September 30, 2016 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at July 1, 2016
 
$
862

 
$
109

 
$
118

 
$
1,089

Charge-offs (a)
 
(293
)
 
(10
)
 
—

 
(303
)
Recoveries
 
74

 
16

 
—

 
90

Net charge-offs
 
(219
)

6

 
—

 
(213
)
Provision for loan losses
 
269

 
(15
)
 
4

 
258

Allowance at September 30, 2016
 
$
912


$
100


$
122


$
1,134

(a)
Represents the amount of the gross carrying value directly written off. For consumer and commercial loans, the loss from a charge-off is measured as the difference between the gross carrying value of a loan and the fair value of the collateral, less costs to sell. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for more information regarding our charge-off policies.
Nine months ended September 30, 2017 ($ in millions)

Consumer automotive

Consumer mortgage

Commercial

Total
Allowance at January 1, 2017

$
932


$
91


$
121


$
1,144

Charge-offs (a)

(958
)

(22
)

(10
)

(990
)
Recoveries

266


19


—


285

Net charge-offs

(692
)

(3
)

(10
)

(705
)
Provision for loan losses

841


(6
)

19


854

Other (b)

(7
)

(1
)

1


(7
)
Allowance at September 30, 2017

$
1,074

 
$
81

 
$
131


$
1,286

Allowance for loan losses at September 30, 2017








Individually evaluated for impairment

$
35


$
30


$
21


$
86

Collectively evaluated for impairment

1,039


51


110


1,200

Finance receivables and loans at gross carrying value

 
 
 
 
 
 
 
Ending balance

$
67,077


$
12,015


$
39,779


$
118,871

Individually evaluated for impairment

403


237


146


786

Collectively evaluated for impairment

66,674


11,778


39,633


118,085

(a)
Represents the amount of the gross carrying value directly written off. For consumer and commercial loans, the loss from a charge-off is measured as the difference between the gross carrying value of a loan and the fair value of the collateral, less costs to sell. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for more information regarding our charge-off policies.
(b)
Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale.
Nine months ended September 30, 2016 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at January 1, 2016
 
$
834

 
$
114

 
$
106

 
$
1,054

Charge-offs (a)
 
(773
)
 
(29
)
 
(1
)
 
(803
)
Recoveries
 
233

 
25

 
1

 
259

Net charge-offs
 
(540
)
 
(4
)
 
—

 
(544
)
Provision for loan losses
 
644

 
(10
)
 
16

 
650

Other (b)
 
(26
)
 
—

 
—

 
(26
)
Allowance at September 30, 2016
 
$
912

 
$
100

 
$
122

 
$
1,134

Allowance for loan losses at September 30, 2016








Individually evaluated for impairment

$
24


$
35


$
25


$
84

Collectively evaluated for impairment

888


65


97


1,050

Finance receivables and loans at gross carrying value

 
 
 
 
 



Ending balance

$
64,816


$
10,857


$
39,286


$
114,959

Individually evaluated for impairment

349


251


111


711

Collectively evaluated for impairment

64,467


10,606


39,175


114,248

(a)
Represents the amount of the gross carrying value directly written off. For consumer and commercial loans, the loss from a charge-off is measured as the difference between the gross carrying value of a loan and the fair value of the collateral, less costs to sell. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for more information regarding our charge-off policies.
(b)
Primarily related to the transfer of finance receivables and loans from held-for-investment to held-for-sale.
The following table presents information about significant sales of finance receivables and loans and transfers of finance receivables and loans from held-for-investment to held-for-sale.
 
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)

2017

2016
 
2017
 
2016
Consumer automotive

$
28


$
57

 
$
1,326

 
$
4,216

Consumer mortgage

3


6

 
9

 
12

Commercial

—


—

 
—

 
28

Total sales and transfers

$
31


$
63

 
$
1,335

 
$
4,256


The following table presents information about significant purchases of finance receivables and loans.
 
 
Three months ended September 30,
 
Nine months ended September 30,
($ in millions)
 
2017
 
2016
 
2017
 
2016
Consumer automotive

$
83


$
—

 
$
762

 
$
—

Consumer mortgage

1,183


467

 
2,319

 
2,855

Total purchases of finance receivables and loans

$
1,266

 
$
467

 
$
3,081

 
$
2,855


The following table presents an analysis of our past due finance receivables and loans recorded at gross carrying value.
($ 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
September 30, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
1,742

 
$
414

 
$
261

 
$
2,417

 
$
64,660

 
$
67,077

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
75

 
1

 
5

 
81

 
9,679

 
9,760

Mortgage — Legacy
 
40

 
21

 
58

 
119

 
2,136

 
2,255

Total consumer mortgage
 
115

 
22

 
63

 
200

 
11,815

 
12,015

Total consumer
 
1,857

 
436

 
324

 
2,617

 
76,475

 
79,092

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
16

 
—

 
13

 
29

 
31,956

 
31,985

Other
 
—

 
—

 
8

 
8

 
3,766

 
3,774

Commercial real estate — Automotive
 
3

 
—

 
—

 
3

 
4,017

 
4,020

Total commercial
 
19


—


21


40


39,739


39,779

Total consumer and commercial
 
$
1,876


$
436


$
345


$
2,657


$
116,214


$
118,871

December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
1,850

 
$
428

 
$
302

 
$
2,580

 
$
63,213

 
$
65,793

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
39

 
6

 
4

 
49

 
8,245

 
8,294

Mortgage — Legacy
 
45

 
18

 
57

 
120

 
2,636

 
2,756

Total consumer mortgage
 
84

 
24

 
61

 
169

 
10,881

 
11,050

Total consumer
 
1,934

 
452

 
363

 
2,749

 
74,094

 
76,843

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
3

 
—

 
7

 
10

 
35,031

 
35,041

Other
 
—

 
—

 
—

 
—

 
3,248

 
3,248

Commercial real estate — Automotive
 
—

 
—

 
—

 
—

 
3,812

 
3,812

Total commercial
 
3


—


7


10


42,091


42,101

Total consumer and commercial
 
$
1,937


$
452


$
370


$
2,759


$
116,185


$
118,944


The following table presents the gross carrying value of our finance receivables and loans on nonaccrual status.
($ in millions)
 
September 30, 2017
 
December 31, 2016
Consumer automotive
 
$
573

 
$
598

Consumer mortgage
 
 
 
 
Mortgage Finance
 
7

 
10

Mortgage — Legacy
 
81

 
89

Total consumer mortgage
 
88

 
99

Total consumer
 
661

 
697

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
78

 
33

Other
 
61

 
84

Commercial real estate — Automotive
 
7

 
5

Total commercial
 
146

 
122

Total consumer and commercial finance receivables and loans
 
$
807


$
819


Management performs a quarterly analysis of the consumer automotive, consumer mortgage, and commercial portfolios using a range of credit quality indicators to assess the adequacy of the allowance for loan losses based on historical and current trends. The following tables present the population of loans by quality indicators for our consumer automotive, 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 gross carrying value. 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 not expected. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for additional information.
 
 
September 30, 2017
 
December 31, 2016
($ in millions)
 
Performing
 
Nonperforming
 
Total
 
Performing
 
Nonperforming
 
Total
Consumer automotive
 
$
66,504

 
$
573

 
$
67,077

 
$
65,195

 
$
598

 
$
65,793

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
9,753

 
7

 
9,760

 
8,284

 
10

 
8,294

Mortgage — Legacy
 
2,174

 
81

 
2,255

 
2,667

 
89

 
2,756

Total consumer mortgage
 
11,927

 
88

 
12,015

 
10,951

 
99

 
11,050

Total consumer
 
$
78,431

 
$
661

 
$
79,092

 
$
76,146

 
$
697

 
$
76,843


The following table presents pass and criticized credit quality indicators based on regulatory definitions for our commercial finance receivables and loans recorded at gross carrying value.
 
 
September 30, 2017
 
December 31, 2016
($ in millions)
 
Pass
 
Criticized (a)
 
Total
 
Pass
 
Criticized (a)
 
Total
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
$
30,189

 
$
1,796

 
$
31,985

 
$
33,160

 
$
1,881

 
$
35,041

Other
 
2,913

 
861

 
3,774

 
2,597

 
651

 
3,248

Commercial real estate — Automotive
 
3,891

 
129

 
4,020

 
3,653

 
159

 
3,812

Total commercial
 
$
36,993

 
$
2,786

 
$
39,779


$
39,410

 
$
2,691

 
$
42,101

(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 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K.
The following table presents information about our impaired finance receivables and loans.
($ in millions)
 
Unpaid principal balance (a)
 
Gross carrying value
 
Impaired with no allowance
 
Impaired with an allowance
 
Allowance for impaired loans
September 30, 2017
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
411

 
$
403

 
$
86

 
$
317

 
$
35

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
8

 
8

 
4

 
4

 
—

Mortgage — Legacy
 
234

 
229

 
56

 
173

 
30

Total consumer mortgage
 
242

 
237

 
60

 
177

 
30

Total consumer
 
653

 
640

 
146

 
494

 
65

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
78

 
78

 
51

 
27

 
3

Other
 
70

 
61

 
10

 
51

 
17

Commercial real estate — Automotive
 
7

 
7

 
3

 
4

 
1

Total commercial
 
155

 
146

 
64

 
82

 
21

Total consumer and commercial finance receivables and loans
 
$
808


$
786


$
210


$
576


$
86

December 31, 2016
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
407

 
$
370

 
$
131

 
$
239

 
$
28

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
8

 
8

 
3

 
5

 
—

Mortgage — Legacy
 
243

 
239

 
56

 
183

 
34

Total consumer mortgage
 
251

 
247

 
59

 
188

 
34

Total consumer
 
658

 
617

 
190

 
427

 
62

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
33

 
33

 
7

 
26

 
3

Other
 
99

 
84

 
—

 
84

 
19

Commercial real estate — Automotive
 
5

 
5

 
2

 
3

 
1

Total commercial
 
137

 
122

 
9

 
113

 
23

Total consumer and commercial finance receivables and loans
 
$
795


$
739


$
199


$
540


$
85

(a)
Adjusted for charge-offs.
The following tables present average balance and interest income for our impaired finance receivables and loans.
 
 
2017
 
2016
Three months ended September 30, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
389

 
$
5

 
$
347

 
$
4

Consumer mortgage
 
 
 
 
 
 
 
 
Mortgage Finance
 
8

 
—

 
8

 
—

Mortgage — Legacy
 
231

 
2

 
245

 
2

Total consumer mortgage
 
239

 
2

 
253

 
2

Total consumer
 
628

 
7

 
600

 
6

Commercial
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
Automotive
 
77

 
1

 
48

 
1

Other
 
63

 
—

 
63

 
—

Commercial real estate — Automotive
 
7

 
—

 
6

 
—

Total commercial
 
147

 
1

 
117

 
1

Total consumer and commercial finance receivables and loans
 
$
775


$
8


$
717


$
7


 
 
2017
 
2016
Nine months ended September 30, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
368

 
$
15

 
$
340

 
$
12

Consumer mortgage
 
 
 
 
 
 
 
 
Mortgage Finance
 
8

 
—

 
8

 
—

Mortgage — Legacy
 
236

 
7

 
250

 
7

Total consumer mortgage
 
244

 
7

 
258

 
7

Total consumer
 
612

 
22

 
598

 
19

Commercial
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
Automotive
 
55

 
2

 
35

 
1

Other
 
73

 
8

 
58

 
1

Commercial real estate — Automotive
 
6

 
—

 
6

 
—

Total commercial
 
134

 
10

 
99

 
2

Total consumer and commercial finance receivables and loans
 
$
746

 
$
32

 
$
697

 
$
21

Troubled Debt Restructurings
Troubled Debt Restructurings (TDRs) are loan modifications where concessions were granted to borrowers experiencing financial difficulties. For automotive loans, we may offer several types of assistance to aid our customers, including extension of the loan maturity date and rewriting the loan terms. Additionally, for mortgage loans, as part of certain programs, we offer mortgage loan modifications to qualified borrowers. These programs 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. Total TDRs recorded at gross carrying value were $715 million and $663 million at September 30, 2017, and December 31, 2016, respectively.
Commercial commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $7 million and $2 million at September 30, 2017, and December 31, 2016, respectively. Refer to Note 1 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for additional information.
The following tables present information related to finance receivables and loans recorded at gross carrying value modified in connection with a TDR during the period.
 
2017
 
2016
Three months ended September 30, ($ in millions)
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
Consumer automotive
7,165

 
$
80

 
$
75

 
4,427

 
$
70

 
$
58

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
2

 
—

 
—

 
2

 
—

 
—

Mortgage — Legacy
37

 
4

 
4

 
35

 
6

 
6

Total consumer mortgage
39

 
4

 
4

 
37

 
6

 
6

Total consumer
7,204

 
84

 
79

 
4,464

 
76

 
64

Commercial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Automotive
3

 
13

 
13

 
—

 
—

 
—

Commercial real estate — Automotive
1

 
3

 
3

 
—

 
—

 
—

Total commercial
4

 
16

 
16

 
—

 
—

 
—

Total consumer and commercial finance receivables and loans
7,208

 
$
100

 
$
95

 
4,464

 
$
76

 
$
64

 
2017
 
2016
Nine months ended September 30, ($ in millions)
Number of loans
 
Pre-modification gross carrying value 
 
Post-modification gross carrying value 
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
Consumer automotive
19,374

 
$
298

 
$
262

 
14,816

 
$
238

 
$
202

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
3

 
—

 
—

 
5

 
2

 
2

Mortgage — Legacy
109

 
19

 
18

 
92

 
14

 
14

Total consumer mortgage
112

 
19

 
18

 
97

 
16

 
16

Total consumer
19,486

 
317

 
280

 
14,913

 
254

 
218

Commercial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Automotive
3

 
13

 
13

 
—

 
—

 
—

Other
2

 
44

 
44

 
—

 
—

 
—

Commercial real estate — Automotive
1

 
3

 
3

 
—

 
—

 
—

Total commercial
6

 
60

 
60

 
—

 
—

 
—

Total consumer and commercial finance receivables and loans
19,492

 
$
377

 
$
340

 
14,913

 
$
254

 
$
218


The following tables present information about finance receivables and loans recorded at gross carrying value 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 to the Consolidated Financial Statements in our 2016 Annual Report on Form 10-K for additional information) except for commercial finance receivables and loans, where redefault is defined as 90 days past due.
 
 
2017
 
2016
Three months ended September 30, ($ in millions)
 
Number of loans
 
Gross carrying  value
 
Charge-off amount
 
Number of loans
 
Gross carrying value
 
Charge-off amount
Consumer automotive
 
2,222

 
$
25

 
$
18

 
1,959

 
$
23

 
$
14

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
—

 
—

 
—

 
—

 
—

 
—

Mortgage — Legacy
 
1

 
—

 
—

 
1

 
—

 
—

Total consumer finance receivables and loans
 
2,223

 
$
25

 
$
18

 
1,960

 
$
23

 
$
14

 
 
2017
 
2016
Nine months ended September 30, ($ in millions)
 
Number of loans
 
Gross carrying  value
 
Charge-off amount
 
Number of loans
 
Gross carrying value
 
Charge-off amount
Consumer automotive
 
6,354

 
$
74

 
$
51

 
5,617

 
$
69

 
$
39

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
1

 
1

 
—

 
—

 
—

 
—

Mortgage — Legacy
 
1

 
—

 
—

 
4

 
—

 
—

Total consumer finance receivables and loans
 
6,356

 
$
75

 
$
51

 
5,621

 
$
69

 
$
39