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Finance Receivables and Loans, Net
 6 Months Ended
Jun. 30, 2018
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)
 
June 30, 2018
 
December 31, 2017
Consumer automotive (a)
 
$
70,473

 
$
68,071

Consumer mortgage
 
 
 
 
Mortgage Finance (b)
 
13,328

 
11,657

Mortgage — Legacy (c)
 
1,803

 
2,093

Total consumer mortgage
 
15,131

 
13,750

Total consumer
 
85,604

 
81,821

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
31,501

 
33,025

Other
 
4,027

 
3,887

Commercial real estate
 
4,412

 
4,160

Total commercial
 
39,940

 
41,072

Total finance receivables and loans (d)
 
$
125,544

 
$
122,893

(a)
Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 18 for additional information.
(b)
Includes loans originated as interest-only mortgage loans of $18 million and $20 million at June 30, 2018, and December 31, 2017, respectively, 36% of which are expected to start principal amortization in 2019, and 48% in 2020. The remainder of these loans have exited the interest-only period.
(c)
Includes loans originated as interest-only mortgage loans of $416 million and $496 million at June 30, 2018, and December 31, 2017, respectively, of which 99% have exited the interest-only period.
(d)
Totals include net unearned income, unamortized premiums and discounts, and deferred fees and costs of $612 million and $551 million at June 30, 2018, and December 31, 2017, respectively.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans.
Three months ended June 30, 2018 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at April 1, 2018
 
$
1,066

 
$
74

 
$
138

 
$
1,278

Charge-offs (a)
 
(296
)
 
(8
)
 
(2
)
 
(306
)
Recoveries
 
114

 
6

 
6

 
126

Net charge-offs
 
(182
)
 
(2
)
 
4

 
(180
)
Provision for loan losses
 
168

 
(4
)
 
(6
)
 
158

Other
 
1

 
(2
)
 
2

 
1

Allowance at June 30, 2018
 
$
1,053


$
66


$
138


$
1,257

(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 2017 Annual Report on Form 10-K for more information regarding our charge-off policies.
Three months ended June 30, 2017 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at April 1, 2017
 
$
941

 
$
86

 
$
128

 
$
1,155

Charge-offs (a)
 
(290
)
 
(6
)
 
—

 
(296
)
Recoveries
 
91

 
6

 
—

 
97

Net charge-offs
 
(199
)

—


—

 
(199
)
Provision for loan losses
 
260

 
(3
)
 
12

 
269

Allowance at June 30, 2017
 
$
1,002


$
83


$
140


$
1,225

(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 2017 Annual Report on Form 10-K for more information regarding our charge-off policies.
Six months ended June 30, 2018 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at January 1, 2018

$
1,066


$
79


$
131


$
1,276

Charge-offs (a)

(661
)

(20
)

(2
)

(683
)
Recoveries

226


12


6


244

Net charge-offs

(435
)

(8
)

4


(439
)
Provision for loan losses

421


(3
)

1


419

Other

1


(2
)

2


1

Allowance at June 30, 2018

$
1,053

 
$
66

 
$
138


$
1,257

Allowance for loan losses at June 30, 2018








Individually evaluated for impairment

$
42


$
24


$
27


$
93

Collectively evaluated for impairment

1,011


42


111


1,164

Finance receivables and loans at gross carrying value

 
 
 
 
 
 
 
Ending balance

$
70,473


$
15,131


$
39,940


$
125,544

Individually evaluated for impairment

480


228


198


906

Collectively evaluated for impairment

69,993


14,903


39,742


124,638

(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 2017 Annual Report on Form 10-K for more information regarding our charge-off policies.
Six months ended June 30, 2017 ($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at January 1, 2017
 
$
932

 
$
91

 
$
121

 
$
1,144

Charge-offs (a)
 
(631
)
 
(15
)
 
—

 
(646
)
Recoveries
 
181

 
13

 
—

 
194

Net charge-offs
 
(450
)
 
(2
)
 
—

 
(452
)
Provision for loan losses
 
527

 
(6
)
 
19

 
540

Other (b)
 
(7
)
 
—

 
—

 
(7
)
Allowance at June 30, 2017
 
$
1,002

 
$
83

 
$
140

 
$
1,225

Allowance for loan losses at June 30, 2017








Individually evaluated for impairment

$
34


$
31


$
32


$
97

Collectively evaluated for impairment

968


52


108


1,128

Finance receivables and loans at gross carrying value

 
 
 
 
 



Ending balance

$
66,774


$
11,294


$
42,460


$
120,528

Individually evaluated for impairment

380


242


151


773

Collectively evaluated for impairment

66,394


11,052


42,309


119,755

(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 2017 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 based on net carrying value.
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)

2018

2017
 
2018
 
2017
Consumer automotive

$
—


$
85

 
$
—

 
$
1,298

Consumer mortgage

4


3

 
5

 
6

Total sales and transfers

$
4


$
88

 
$
5

 
$
1,304


The following table presents information about significant purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.
 
 
Three months ended June 30,
 
Six months ended June 30,
($ in millions)
 
2018
 
2017
 
2018
 
2017
Consumer automotive

$
233


$
611

 
$
401

 
$
679

Consumer mortgage

852


809

 
2,147

 
1,136

Total purchases of finance receivables and loans

$
1,085

 
$
1,420

 
$
2,548

 
$
1,815


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
June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
1,706

 
$
387

 
$
248

 
$
2,341

 
$
68,132

 
$
70,473

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
50

 
4

 
11

 
65

 
13,263

 
13,328

Mortgage — Legacy
 
38

 
14

 
54

 
106

 
1,697

 
1,803

Total consumer mortgage
 
88

 
18

 
65

 
171

 
14,960

 
15,131

Total consumer
 
1,794

 
405

 
313

 
2,512

 
83,092

 
85,604

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
—

 
—

 
21

 
21

 
31,480

 
31,501

Other
 
4

 
—

 
—

 
4

 
4,023

 
4,027

Commercial real estate
 
—

 
—

 
—

 
—

 
4,412

 
4,412

Total commercial
 
4


—


21


25


39,915


39,940

Total consumer and commercial
 
$
1,798


$
405


$
334


$
2,537


$
123,007


$
125,544

December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
1,994

 
$
478

 
$
268

 
$
2,740

 
$
65,331

 
$
68,071

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
60

 
11

 
18

 
89

 
11,568

 
11,657

Mortgage — Legacy
 
43

 
25

 
62

 
130

 
1,963

 
2,093

Total consumer mortgage
 
103

 
36

 
80

 
219

 
13,531

 
13,750

Total consumer
 
2,097

 
514

 
348

 
2,959

 
78,862

 
81,821

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
5

 
—

 
3

 
8

 
33,017

 
33,025

Other
 
—

 
—

 
—

 
—

 
3,887

 
3,887

Commercial real estate
 
—

 
—

 
—

 
—

 
4,160

 
4,160

Total commercial
 
5


—


3


8


41,064


41,072

Total consumer and commercial
 
$
2,102


$
514


$
351


$
2,967


$
119,926


$
122,893


The following table presents the gross carrying value of our finance receivables and loans on nonaccrual status.
($ in millions)
 
June 30, 2018
 
December 31, 2017
Consumer automotive
 
$
602

 
$
603

Consumer mortgage
 
 
 
 
Mortgage Finance
 
18

 
25

Mortgage — Legacy
 
87

 
92

Total consumer mortgage
 
105

 
117

Total consumer
 
707

 
720

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
88

 
27

Other
 
104

 
44

Commercial real estate
 
6

 
1

Total commercial
 
198

 
72

Total consumer and commercial finance receivables and loans
 
$
905


$
792


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 2017 Annual Report on Form 10-K for additional information.
 
 
June 30, 2018
 
December 31, 2017
($ in millions)
 
Performing
 
Nonperforming
 
Total
 
Performing
 
Nonperforming
 
Total
Consumer automotive
 
$
69,871

 
$
602

 
$
70,473

 
$
67,468

 
$
603

 
$
68,071

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
13,310

 
18

 
13,328

 
11,632

 
25

 
11,657

Mortgage — Legacy
 
1,716

 
87

 
1,803

 
2,001

 
92

 
2,093

Total consumer mortgage
 
15,026

 
105

 
15,131

 
13,633

 
117

 
13,750

Total consumer
 
$
84,897

 
$
707

 
$
85,604

 
$
81,101

 
$
720

 
$
81,821


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.
 
 
June 30, 2018
 
December 31, 2017
($ in millions)
 
Pass
 
Criticized (a)
 
Total
 
Pass
 
Criticized (a)
 
Total
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
$
28,890

 
$
2,611

 
$
31,501

 
$
30,982

 
$
2,043

 
$
33,025

Other
 
3,260

 
767

 
4,027

 
2,986

 
901

 
3,887

Commercial real estate
 
4,193

 
219

 
4,412

 
4,023

 
137

 
4,160

Total commercial
 
$
36,343

 
$
3,597

 
$
39,940


$
37,991

 
$
3,081

 
$
41,072

(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 2017 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
June 30, 2018
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
491

 
$
480

 
$
117

 
$
363

 
$
42

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
10

 
10

 
4

 
6

 
—

Mortgage — Legacy
 
223

 
218

 
63

 
155

 
24

Total consumer mortgage
 
233

 
228

 
67

 
161

 
24

Total consumer
 
724

 
708

 
184

 
524

 
66

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
88

 
88

 
16

 
72

 
12

Other
 
116

 
104

 
40

 
64

 
15

Commercial real estate
 
6

 
6

 
4

 
2

 
—

Total commercial
 
210

 
198

 
60

 
138

 
27

Total consumer and commercial finance receivables and loans
 
$
934


$
906


$
244


$
662


$
93

December 31, 2017
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
438

 
$
430

 
$
91

 
$
339

 
$
36

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
8

 
8

 
4

 
4

 
—

Mortgage — Legacy
 
228

 
223

 
58

 
165

 
27

Total consumer mortgage
 
236

 
231

 
62

 
169

 
27

Total consumer
 
674

 
661

 
153

 
508

 
63

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
27

 
27

 
9

 
18

 
3

Other
 
54

 
44

 
10

 
34

 
11

Commercial real estate
 
1

 
1

 
—

 
1

 
—

Total commercial
 
82

 
72

 
19

 
53

 
14

Total consumer and commercial finance receivables and loans
 
$
756


$
733


$
172


$
561


$
77

(a)
Adjusted for charge-offs.
The following tables present average balance and interest income for our impaired finance receivables and loans.
 
 
2018
 
2017
Three months ended June 30, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
472

 
$
7

 
$
391

 
$
5

Consumer mortgage
 
 
 
 
 
 
 
 
Mortgage Finance
 
9

 
—

 
8

 
—

Mortgage — Legacy
 
219

 
3

 
238

 
3

Total consumer mortgage
 
228

 
3

 
246

 
3

Total consumer
 
700

 
10

 
637

 
8

Commercial
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
Automotive
 
78

 
1

 
54

 
1

Other
 
82

 
—

 
73

 
8

Commercial real estate
 
5

 
—

 
6

 
—

Total commercial
 
165

 
1

 
133

 
9

Total consumer and commercial finance receivables and loans
 
$
865


$
11


$
770


$
17


 
 
2018
 
2017
Six months ended June 30, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
462

 
$
14

 
$
381

 
$
10

Consumer mortgage
 
 
 
 
 
 
 
 
Mortgage Finance
 
9

 
—

 
8

 
—

Mortgage — Legacy
 
220

 
5

 
239

 
5

Total consumer mortgage
 
229

 
5

 
247

 
5

Total consumer
 
691

 
19

 
628

 
15

Commercial
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
Automotive
 
61

 
2

 
47

 
1

Other
 
66

 
—

 
77

 
8

Commercial real estate
 
4

 
—

 
6

 
—

Total commercial
 
131

 
2

 
130

 
9

Total consumer and commercial finance receivables and loans
 
$
822

 
$
21

 
$
758

 
$
24

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 $791 million and $712 million at June 30, 2018, and December 31, 2017, respectively.
Total commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $7 million and $6 million at June 30, 2018, and December 31, 2017, respectively. Refer to Note 1 to the Consolidated Financial Statements in our 2017 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.
 
2018
 
2017
Three months ended June 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
5,898

 
$
107

 
$
93

 
5,762

 
$
103

 
$
88

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
7

 
2

 
2

 
—

 
—

 
—

Mortgage — Legacy
27

 
6

 
7

 
19

 
3

 
2

Total consumer mortgage
34


8


9


19


3


2

Total consumer
5,932

 
115

 
102

 
5,781

 
106

 
90

Commercial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Automotive
3

 
4

 
4

 
—

 
—

 
—

Other
2

 
55

 
51

 
1

 
21

 
21

Total commercial
5

 
59

 
55


1


21


21

Total consumer and commercial finance receivables and loans
5,937


$
174


$
157


5,782


$
127


$
111

 
2018
 
2017
Six months ended June 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
12,940

 
$
235

 
$
203

 
12,209

 
$
218

 
$
187

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
8

 
3

 
3

 
1

 
—

 
—

Mortgage — Legacy
89

 
16

 
16

 
72

 
15

 
14

Total consumer mortgage
97

 
19

 
19

 
73

 
15

 
14

Total consumer
13,037

 
254

 
222

 
12,282

 
233

 
201

Commercial
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
Automotive
3

 
4

 
4

 
—

 
—

 
—

Other
2

 
55

 
51

 
2

 
44

 
44

Total commercial
5

 
59

 
55

 
2

 
44

 
44

Total consumer and commercial finance receivables and loans
13,042

 
$
313

 
$
277

 
12,284

 
$
277

 
$
245


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 2017 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.
 
 
2018
 
2017
Three months ended June 30, ($ in millions)
 
Number of loans
 
Gross carrying value
 
Charge-off amount
 
Number of loans
 
Gross carrying value
 
Charge-off amount
Consumer automotive
 
2,425

 
$
29

 
$
17

 
2,143

 
$
25

 
$
17

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
—

 
—

 
—

 
—

 
—

 
—

Mortgage — Legacy
 
1

 
—

 
—

 
—

 
—

 
—

Total consumer finance receivables and loans
 
2,426

 
$
29

 
$
17

 
2,143

 
$
25

 
$
17

 
 
2018
 
2017
Six months ended June 30, ($ in millions)
 
Number of loans
 
Gross carrying value
 
Charge-off amount
 
Number of loans
 
Gross carrying value
 
Charge-off amount
Consumer automotive
 
4,751

 
$
57

 
$
35

 
4,132

 
$
49

 
$
33

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
—

 
—

 
—

 
1

 
1

 
—

Mortgage — Legacy
 
1

 
—

 
—

 
—

 
—

 
—

Total consumer finance receivables and loans
 
4,752

 
$
57

 
$
35

 
4,133

 
$
50

 
$
33