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Finance Receivables and Loans, Net
 12 Months Ended
Dec. 31, 2018
Loans and Leases Receivable, Net Amount [Abstract]  
Loans, Notes, Trade and Other Receivables Disclosure
Finance Receivables and Loans, Net
The composition of finance receivables and loans reported at gross carrying value was as follows.
December 31, ($ in millions)
 
2018
 
2017
Consumer automotive (a)
 
$
70,539

 
$
68,071

Consumer mortgage
 
 
 
 
Mortgage Finance (b)
 
15,155

 
11,657

Mortgage — Legacy (c)
 
1,546

 
2,093

Total consumer mortgage
 
16,701

 
13,750

Total consumer
 
87,240

 
81,821

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
33,672

 
33,025

Other
 
4,205

 
3,887

Commercial real estate
 
4,809

 
4,160

Total commercial
 
42,686

 
41,072

Total finance receivables and loans (d)
 
$
129,926

 
$
122,893

(a)
Certain finance receivables and loans are included in fair value hedging relationships. Refer to Note 21 for additional information.
(b)
Includes loans originated as interest-only mortgage loans of $18 million and $20 million at December 31, 2018, and December 31, 2017, respectively, 34% of which are expected to start principal amortization in 2019, and 41% in 2020. The remainder of these loans have exited the interest-only period.
(c)
Includes loans originated as interest-only mortgage loans of $341 million and $496 million at December 31, 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 $587 million and $551 million at December 31, 2018, and December 31, 2017, respectively.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans.
($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at January 1, 2018

$
1,066


$
79


$
131


$
1,276

Charge-offs (a)

(1,383
)

(35
)

(15
)

(1,433
)
Recoveries

456


25


7


488

Net charge-offs

(927
)

(10
)

(8
)

(945
)
Provision for loan losses

911


(15
)

22


918

Other (b)

(2
)

(1
)

(4
)

(7
)
Allowance at December 31, 2018

$
1,048

 
$
53

 
$
141


$
1,242

Allowance for loan losses at December 31, 2018








Individually evaluated for impairment

$
44


$
23


$
56


$
123

Collectively evaluated for impairment

1,004


30


85


1,119

Finance receivables and loans at gross carrying value

 
 
 
 
 
 
 
Ending balance

$
70,539


$
16,701


$
42,686


$
129,926

Individually evaluated for impairment

495


231


349


1,075

Collectively evaluated for impairment

70,044


16,470


42,337


128,851

(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 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.
($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Commercial
 
Total
Allowance at January 1, 2017
 
$
932

 
$
91

 
$
121

 
$
1,144

Charge-offs (a)
 
(1,344
)
 
(30
)
 
(18
)
 
(1,392
)
Recoveries
 
358

 
24

 
—

 
382

Net charge-offs
 
(986
)
 
(6
)
 
(18
)
 
(1,010
)
Provision for loan losses
 
1,127

 
(7
)
 
28

 
1,148

Other (b)
 
(7
)
 
1

 
—

 
(6
)
Allowance at December 31, 2017
 
$
1,066

 
$
79

 
$
131

 
$
1,276

Allowance for loan losses at December 31, 2017








Individually evaluated for impairment

$
36


$
27


$
14


$
77

Collectively evaluated for impairment

1,030


52


117


1,199

Finance receivables and loans at gross carrying value

 
 
 
 
 



Ending balance

$
68,071


$
13,750


$
41,072


$
122,893

Individually evaluated for impairment

430


231


72


733

Collectively evaluated for impairment

67,641


13,519


41,000


122,160

(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 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.
December 31, ($ in millions)

2018

2017
Consumer automotive

$
578


$
1,339

Consumer mortgage

10


9

Commercial

238


—

Total sales and transfers

$
826


$
1,348


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

$
896


$
865

Consumer mortgage

4,446


4,481

Commercial
 
15

 
—

Total purchases of finance receivables and loans

$
5,357

 
$
5,346


The following table presents an analysis of our past-due finance receivables and loans recorded at gross carrying value.
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
2018
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
2,107

 
$
537

 
$
296

 
$
2,940

 
$
67,599

 
$
70,539

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
67

 
5

 
4

 
76

 
15,079

 
15,155

Mortgage — Legacy
 
30

 
10

 
42

 
82

 
1,464

 
1,546

Total consumer mortgage
 
97

 
15

 
46

 
158

 
16,543

 
16,701

Total consumer
 
2,204

 
552

 
342

 
3,098

 
84,142

 
87,240

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
—

 
1

 
31

 
32

 
33,640

 
33,672

Other
 
—

 
4

 
16

 
20

 
4,185

 
4,205

Commercial real estate
 
—

 
—

 
1

 
1

 
4,808

 
4,809

Total commercial
 
—


5


48


53


42,633


42,686

Total consumer and commercial
 
$
2,204


$
557


$
390


$
3,151


$
126,775


$
129,926

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.
December 31, ($ in millions)
 
2018
 
2017
Consumer automotive
 
$
664

 
$
603

Consumer mortgage
 
 
 
 
Mortgage Finance
 
9

 
25

Mortgage — Legacy
 
70

 
92

Total consumer mortgage
 
79

 
117

Total consumer
 
743

 
720

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
203

 
27

Other
 
142

 
44

Commercial real estate
 
4

 
1

Total commercial
 
349

 
72

Total consumer and commercial finance receivables and loans
 
$
1,092


$
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 at least 90 days or when full collection is not expected. Refer to Note 1 for additional information.
 
 
2018
 
2017
December 31, ($ in millions)
 
Performing
 
Nonperforming
 
Total
 
Performing
 
Nonperforming
 
Total
Consumer automotive
 
$
69,875

 
$
664

 
$
70,539

 
$
67,468

 
$
603

 
$
68,071

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
15,146

 
9

 
15,155

 
11,632

 
25

 
11,657

Mortgage — Legacy
 
1,476

 
70

 
1,546

 
2,001

 
92

 
2,093

Total consumer mortgage
 
16,622

 
79

 
16,701

 
13,633

 
117

 
13,750

Total consumer
 
$
86,497

 
$
743

 
$
87,240

 
$
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.
 
 
2018
 
2017
December 31, ($ in millions)
 
Pass
 
Criticized (a)
 
Total
 
Pass
 
Criticized (a)
 
Total
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
$
30,799

 
$
2,873

 
$
33,672

 
$
30,982

 
$
2,043

 
$
33,025

Other
 
3,373

 
832

 
4,205

 
2,986

 
901

 
3,887

Commercial real estate
 
4,538

 
271

 
4,809

 
4,023

 
137

 
4,160

Total commercial
 
$
38,710

 
$
3,976

 
$
42,686


$
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.
The following table presents information about our impaired finance receivables and loans.
December 31, ($ in millions)
 
Unpaid principal balance (a)
 
Gross carrying value
 
Impaired with no allowance
 
Impaired with an allowance
 
Allowance for impaired loans
2018
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
503

 
$
495

 
$
105

 
$
390

 
$
44

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
15

 
15

 
6

 
9

 
1

Mortgage — Legacy
 
221

 
216

 
65

 
151

 
22

Total consumer mortgage
 
236

 
231

 
71

 
160

 
23

Total consumer
 
739

 
726

 
176

 
550

 
67

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
203

 
203

 
112

 
91

 
10

Other
 
159

 
142

 
40

 
102

 
46

Commercial real estate
 
4

 
4

 
4

 
—

 
—

Total commercial
 
366

 
349

 
156

 
193

 
56

Total consumer and commercial finance receivables and loans
 
$
1,105


$
1,075


$
332


$
743


$
123

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 table presents average balance and interest income for our impaired finance receivables and loans.
 
 
2018
 
2017
 
2016
Year ended December 31, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
478

 
$
28

 
$
391

 
$
21

 
$
344

 
$
17

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
11

 
1

 
8

 
—

 
8

 
—

Mortgage — Legacy
 
218

 
10

 
234

 
10

 
248

 
9

Total consumer mortgage
 
229

 
11

 
242

 
10

 
256

 
9

Total consumer
 
707

 
39

 
633

 
31

 
600

 
26

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
93

 
4

 
49

 
2

 
35

 
1

Other
 
84

 
—

 
69

 
9

 
60

 
1

Commercial real estate
 
5

 
1

 
5

 
—

 
6

 
—

Total commercial
 
182

 
5

 
123

 
11

 
101

 
2

Total consumer and commercial finance receivables and loans
 
$
889


$
44


$
756


$
42

 
$
701

 
$
28


Troubled Debt Restructurings
TDRs are loan modifications where concessions were granted to borrowers experiencing financial difficulties. For consumer automotive loans, we may offer several types of assistance to aid our customers, including payment extensions and rewrites of 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 $812 million, $712 million, and $663 million at December 31, 2018, 2017, and 2016, respectively.
Total commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $4 million, $6 million, and $2 million at December 31, 2018, 2017, and 2016, respectively. Refer to Note 1 for additional information.
The following tables present information related to finance receivables and loans recorded at gross carrying value modified in connection with a TDR during the period.
Year ended December 31, ($ in millions)
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
2018
 
 
 
 
 
 
Consumer automotive
 
26,748

 
$
426

 
$
378

Consumer mortgage
 
 
 
 
 
 
Mortgage Finance
 
23

 
9

 
9

Mortgage — Legacy
 
204

 
30

 
29

Total consumer mortgage
 
227


39


38

Total consumer finance receivables and loans
 
26,975

 
$
465

 
$
416

2017
 
 
 
 
 
 
Consumer automotive
 
26,156

 
$
380

 
$
333

Consumer mortgage
 
 
 
 
 
 
Mortgage Finance
 
4

 
1

 
1

Mortgage — Legacy
 
122

 
21

 
21

Total consumer mortgage
 
126

 
22

 
22

Total consumer finance receivables and loans
 
26,282

 
$
402

 
$
355

2016
 
 
 
 
 
 
Consumer automotive
 
20,227

 
$
347

 
$
293

Consumer mortgage
 
 
 
 
 
 
Mortgage Finance
 
7

 
3

 
3

Mortgage — Legacy
 
120

 
18

 
18

Total consumer mortgage
 
127

 
21

 
21

Total consumer finance receivables and loans
 
20,354

 
$
368

 
$
314

Year ended December 31, ($ in millions)
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
2018
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
Automotive
 
3

 
$
4

 
$
4

Other
 
3

 
85

 
82

Total commercial finance receivables and loans
 
6

 
$
89

 
$
86

2017
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
Automotive
 
4

 
$
16

 
$
15

Other
 
—

 
44

 
44

Commercial real estate
 
2

 
3

 
3

Total commercial finance receivables and loans
 
6

 
$
63

 
$
62

2016
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
Automotive
 
1

 
$
7

 
$
7

Total commercial finance receivables and loans
 
1

 
$
7

 
$
7

The following table presents information about finance receivables and loans recorded at gross carrying value that have redefaulted during the reporting period and were within twelve 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.
Year ended December 31, ($ in millions)
 
Number of loans
 
Gross carrying value
 
Charge-off amount
2018
 
 
 
 
 
 
Consumer automotive
 
9,711

 
$
111

 
$
73

Consumer mortgage
 
 
 
 
 
 
Mortgage — Legacy
 
2

 
—

 
—

Total consumer finance receivables and loans
 
9,713

 
$
111

 
$
73

2017
 
 
 
 
 
 
Consumer automotive
 
8,829

 
$
102

 
$
71

Consumer mortgage
 
 
 
 
 
 
Mortgage Finance
 
1

 
1

 
—

Mortgage — Legacy
 
2

 
—

 
—

Total consumer finance receivables and loans
 
8,832

 
$
103

 
$
71

2016
 
 
 
 
 
 
Consumer automotive
 
7,800

 
$
94

 
$
56

Consumer mortgage
 
 
 
 
 
 
Mortgage — Legacy
 
4

 
—

 
—

Total consumer finance receivables and loans
 
7,804

 
$
94

 
$
56


Concentration Risk
Consumer
We monitor our consumer loan portfolio for concentration risk across the states in which we lend. The highest concentrations of loans are in California and Texas, which represent an aggregate of 25.4% and 24.7% of our total outstanding consumer finance receivables and loans at December 31, 2018, and December 31, 2017, respectively.
The following table shows the percentage of total consumer finance receivables and loans recorded at gross carrying value by state concentration.
 
2018 (a)
 
2017
December 31,
Consumer automotive
 
Consumer mortgage
 
Consumer automotive
 
Consumer mortgage
California
8.4
%
 
36.9
%
 
8.2
%
 
34.6
%
Texas
12.8

 
6.2

 
13.2

 
6.5

Florida
8.8

 
4.7

 
8.5

 
4.8

Pennsylvania
4.5

 
1.4

 
4.6

 
1.5

Illinois
4.1

 
3.0

 
4.2

 
3.2

Georgia
4.1

 
2.8

 
4.2

 
2.5

North Carolina
3.9

 
1.7

 
3.7

 
1.8

New York
3.1

 
2.4

 
3.0

 
2.2

Ohio
3.5

 
0.4

 
3.4

 
0.5

New Jersey
2.7

 
2.1

 
2.6

 
2.1

Other United States
44.1

 
38.4

 
44.4

 
40.3

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, 2018.
Commercial Real Estate
The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. The following table shows the percentage of total commercial real estate finance receivables and loans reported at gross carrying value by state concentration.
December 31,
2018
 
2017
Texas
15.5
%
 
15.7
%
Florida
11.6

 
10.3

California
8.3

 
8.2

Michigan
6.8

 
7.7

New York
4.8

 
2.1

Georgia
4.0

 
4.6

North Carolina
3.6

 
3.6

South Carolina
3.4

 
3.5

New Jersey
3.1

 
3.6

Utah
2.6

 
1.6

Other United States
36.3

 
39.1

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 reported 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. These finance receivables and loans require additional monitoring and review including specific actions to mitigate our potential loss.
The following table presents the percentage of total commercial criticized finance receivables and loans reported at gross carrying value by industry concentrations.
December 31,
2018
 
2017
Automotive
80.6
%
 
76.3
%
Services
5.0

 
6.7

Health/Medical
3.7

 
4.9

Other
10.7

 
12.1

Total commercial criticized finance receivables and loans
100.0
%
 
100.0
%