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Finance Receivables and Loans, Net
 12 Months Ended
Dec. 31, 2019
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)
 
2019
 
2018
Consumer automotive (a)
 
$
72,390

 
$
70,539

Consumer mortgage
 
 
 
 
Mortgage Finance (b)
 
16,181

 
15,155

Mortgage — Legacy (c)
 
1,141

 
1,546

Total consumer mortgage
 
17,322

 
16,701

Consumer other (d)
 
212

 
—

Total consumer
 
89,924

 
87,240

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
28,332

 
33,672

Other
 
5,014

 
4,205

Commercial real estate
 
4,961

 
4,809

Total commercial
 
38,307

 
42,686

Total finance receivables and loans (e)
 
$
128,231

 
$
129,926

(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 $11 million and $18 million at December 31, 2019, and December 31, 2018, respectively, 47% of which are expected to start principal amortization in 2020. The remainder of these loans have exited the interest-only period.
(c)
Includes loans originated as interest-only mortgage loans of $212 million and $341 million at December 31, 2019, and December 31, 2018, respectively, of which 99% have exited the interest-only period.
(d)
Includes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
(e)
Totals include net unearned income, unamortized premiums and discounts, and deferred fees and costs of $503 million and $587 million at December 31, 2019, and December 31, 2018, respectively.
The following tables present an analysis of the activity in the allowance for loan losses on finance receivables and loans.
($ in millions)
 
Consumer automotive
 
Consumer mortgage
 
Consumer other (a)
 
Commercial
 
Total
Allowance at January 1, 2019
 
$
1,048

 
$
53

 
$
—

 
$
141

 
$
1,242

Charge-offs (b)
 
(1,423
)
 
(13
)
 
(5
)
 
(49
)
 
(1,490
)
Recoveries
 
493

 
21

 
—

 
—

 
514

Net charge-offs
 
(930
)
 
8

 
(5
)
 
(49
)
 
(976
)
Provision for loan losses
 
957

 
(13
)
 
14

 
40

 
998

Other
 
—

 
(2
)
 
—

 
1

 
(1
)
Allowance at December 31, 2019
 
$
1,075

 
$
46

 
$
9

 
$
133

 
$
1,263

Allowance for loan losses at December 31, 2019
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
 
$
38

 
$
18

 
$
—

 
$
33

 
$
89

Collectively evaluated for impairment
 
1,037

 
28

 
9

 
100

 
1,174

Finance receivables and loans at gross carrying value
 
 
 
 
 
 
 
 
 
 
Ending balance
 
$
72,390

 
$
17,322

 
$
201

 
$
38,307

 
$
128,220

Individually evaluated for impairment
 
538

 
208

 
—

 
215

 
961

Collectively evaluated for impairment
 
71,852

 
17,114

 
201

 
38,092

 
127,259


(a)
Excludes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
(b)
Represents the amount of the gross carrying value directly written off. For consumer and commercial loans, the loss from a charge-off is measured as the difference between the gross carrying value of a loan and the fair value of the collateral, less costs to sell. Refer to Note 1 for more information regarding our charge-off policies.
($ 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.
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.
Year ended December 31, ($ in millions)
 
2019
 
2018
Consumer automotive
 
$
20

 
$
578

Consumer mortgage
 
940

 
10

Commercial
 
—

 
238

Total sales and transfers (a)
 
$
960

 
$
826


(a)
During the year ended December 31, 2019, we also sold $131 million of loans held-for-sale that were initially classified as finance receivables and loans held-for-investment and were transferred to held-for-sale during 2018, and transferred $79 million of finance receivables from held-for-sale to held-for-investment, both relating to equipment finance receivables from our commercial automotive business.
The following table presents information about significant purchases of finance receivables and loans based on unpaid principal balance at the time of purchase.
Year ended December 31, ($ in millions)
 
2019
 
2018
Consumer automotive

$
531

 
$
896

Consumer mortgage

3,451

 
4,446

Consumer other (a)
 
117

 
—

Commercial
 
46

 
15

Total purchases of finance receivables and loans

$
4,145

 
$
5,357


(a)
During the year ended December 31, 2019, we also obtained $75 million of finance receivables and loans from our acquisition of Health Credit Services. For additional information on our acquisition, refer to Note 2.
The following table presents an analysis of our past-due finance receivables and loans recorded at gross carrying value.
December 31, ($ 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
2019
 
 
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
2,185

 
$
590

 
$
367

 
$
3,142

 
$
69,248

 
$
72,390

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
56

 
11

 
9

 
76

 
16,105

 
16,181

Mortgage — Legacy
 
25

 
8

 
28

 
61

 
1,080

 
1,141

Total consumer mortgage
 
81

 
19

 
37

 
137

 
17,185

 
17,322

Consumer other (a)
 
3

 
2

 
2

 
7

 
194

 
201

Total consumer
 
2,269

 
611

 
406

 
3,286

 
86,627

 
89,913

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
34

 
—

 
28

 
62

 
28,270

 
28,332

Other
 
—

 
—

 
17

 
17

 
4,997

 
5,014

Commercial real estate
 
—

 
—

 
4

 
4

 
4,957

 
4,961

Total commercial
 
34

 
—

 
49

 
83

 
38,224

 
38,307

Total consumer and commercial
 
$
2,303

 
$
611

 
$
455

 
$
3,369

 
$
124,851

 
$
128,220

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


(a)
Excludes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
The following table presents the gross carrying value of our finance receivables and loans on nonaccrual status.
December 31, ($ in millions)
 
2019
 
2018
Consumer automotive
 
$
762

 
$
664

Consumer mortgage
 
 
 
 
Mortgage Finance
 
17

 
9

Mortgage — Legacy
 
40

 
70

Total consumer mortgage
 
57

 
79

Consumer other
 
2

 
—

Total consumer
 
821

 
743

Commercial
 
 
 
 
Commercial and industrial
 
 
 
 
Automotive
 
73

 
203

Other
 
138

 
142

Commercial real estate
 
4

 
4

Total commercial
 
215

 
349

Total consumer and commercial finance receivables and loans
 
$
1,036


$
1,092


Management performs a quarterly analysis of the consumer automotive, consumer mortgage, consumer other, 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 more, or when full collection is not expected. Refer to Note 1 for additional information.
 
 
2019
 
2018
December 31, ($ in millions)
 
Performing
 
Nonperforming
 
Total
 
Performing
 
Nonperforming
 
Total
Consumer automotive
 
$
71,628

 
$
762

 
$
72,390

 
$
69,875

 
$
664

 
$
70,539

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
16,164

 
17

 
16,181

 
15,146

 
9

 
15,155

Mortgage — Legacy
 
1,101

 
40

 
1,141

 
1,476

 
70

 
1,546

Total consumer mortgage
 
17,265

 
57

 
17,322

 
16,622

 
79

 
16,701

Consumer other (a)
 
199

 
2

 
201

 
—

 
—

 
—

Total consumer
 
$
89,092

 
$
821

 
$
89,913

 
$
86,497

 
$
743

 
$
87,240


(a)
Excludes $11 million of finance receivables at December 31, 2019, for which we have elected the fair value option.
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.
 
 
2019
 
2018
December 31, ($ in millions)
 
Pass
 
Criticized (a)
 
Total
 
Pass
 
Criticized (a)
 
Total
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
$
25,235

 
$
3,097

 
$
28,332

 
$
30,799

 
$
2,873

 
$
33,672

Other
 
4,225

 
789

 
5,014

 
3,373

 
832

 
4,205

Commercial real estate
 
4,620

 
341

 
4,961

 
4,538

 
271

 
4,809

Total commercial
 
$
34,080

 
$
4,227

 
$
38,307


$
38,710

 
$
3,976

 
$
42,686

(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
2019
 
 
 
 
 
 
 
 
 
 
Consumer automotive
 
$
553

 
$
538

 
$
113

 
$
425

 
$
38

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
14

 
14

 
6

 
8

 
—

Mortgage — Legacy
 
199

 
194

 
64

 
130

 
18

Total consumer mortgage
 
213

 
208

 
70

 
138

 
18

Total consumer
 
766

 
746

 
183

 
563

 
56

Commercial
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
Automotive
 
73

 
73

 
1

 
72

 
12

Other
 
170

 
138

 
73

 
65

 
21

Commercial real estate
 
4

 
4

 
4

 
—

 
—

Total commercial
 
247

 
215

 
78

 
137

 
33

Total consumer and commercial finance receivables and loans
 
$
1,013

 
$
961

 
$
261

 
$
700

 
$
89

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

(a)
Adjusted for charge-offs.
The following table presents average balance and interest income for our impaired finance receivables and loans.
 
 
2019
 
2018
 
2017
Year ended December 31, ($ in millions)
 
Average balance
 
Interest income
 
Average balance
 
Interest income
 
Average balance
 
Interest income
Consumer automotive
 
$
510

 
$
35

 
$
478

 
$
28

 
$
391

 
$
21

Consumer mortgage
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage Finance
 
14

 
1

 
11

 
1

 
8

 
—

Mortgage — Legacy
 
206

 
9

 
218

 
10

 
234

 
10

Total consumer mortgage
 
220

 
10

 
229

 
11

 
242

 
10

Total consumer
 
730

 
45

 
707

 
39

 
633

 
31

Commercial
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
 
 
 
 
 
 
Automotive
 
113

 
2

 
93

 
4

 
49

 
2

Other
 
121

 
—

 
84

 
—

 
69

 
9

Commercial real estate
 
5

 
—

 
5

 
1

 
5

 
—

Total commercial
 
239

 
2

 
182

 
5

 
123

 
11

Total consumer and commercial finance receivables and loans
 
$
969

 
$
47

 
$
889

 
$
44

 
$
756

 
$
42


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 $867 million, $812 million, and $712 million at December 31, 2019, 2018, and 2017, respectively.
Total commitments to lend additional funds to borrowers whose terms had been modified in a TDR were $17 million, $4 million, and $6 million at December 31, 2019, 2018, and 2017, respectively. Refer to Note 1 for additional information.
The following tables present information related to finance receivables and loans recorded at gross carrying value modified in connection with a TDR during the period.
Year ended December 31, ($ in millions)
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
2019
 
 
 
 
 
 
Consumer automotive
 
27,623

 
$
476

 
$
413

Consumer mortgage
 
 
 
 
 
 
Mortgage Finance
 
8

 
1

 
1

Mortgage — Legacy
 
61

 
8

 
8

Total consumer mortgage
 
69

 
9

 
9

Total consumer finance receivables and loans
 
27,692

 
$
485

 
$
422

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

Year ended December 31, ($ in millions)
 
Number of loans
 
Pre-modification gross carrying value
 
Post-modification gross carrying value
2019
 
 
 
 
 
 
Commercial and industrial
 
 
 
 
 
 
Automotive
 
7

 
$
46

 
$
46

Other
 
3

 
82

 
46

Total commercial finance receivables and loans
 
10

 
$
128

 
$
92

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


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 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.
Year ended December 31, ($ in millions)
 
Number of loans
 
Gross carrying value
 
Charge-off amount
2019
 
 
 
 
 
 
Consumer automotive
 
7,215

 
$
81

 
$
52

Total consumer finance receivables and loans
 
7,215

 
$
81

 
$
52

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


Concentration Risk
Consumer
We monitor our consumer loan portfolio for concentration risk across the states in which we lend. The highest concentrations of consumer loans are in California and Texas, which represented an aggregate of 24.9% and 25.4% of our total outstanding consumer finance receivables and loans at December 31, 2019, and December 31, 2018, respectively.
The following table shows the percentage of consumer automotive and consumer mortgage finance receivables and loans by state concentration based on gross carrying value.
 
 
2019 (a)
 
2018
December 31,
 
Consumer automotive
 
Consumer mortgage
 
Consumer automotive
 
Consumer mortgage
California
 
8.5
%
 
35.1
%
 
8.4
%
 
36.9
%
Texas
 
12.4

 
6.5

 
12.8

 
6.2

Florida
 
8.8

 
5.1

 
8.8

 
4.7

Pennsylvania
 
4.6

 
1.9

 
4.5

 
1.4

Illinois
 
4.1

 
2.6

 
4.1

 
3.0

Georgia
 
3.9

 
2.8

 
4.1

 
2.8

North Carolina
 
4.0

 
2.0

 
3.9

 
1.7

New York
 
3.1

 
3.0

 
3.1

 
2.4

Ohio
 
3.6

 
0.5

 
3.5

 
0.4

New Jersey
 
2.8

 
2.3

 
2.7

 
2.1

Other United States
 
44.2

 
38.2

 
44.1

 
38.4

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, 2019.
Commercial Real Estate
The commercial real estate portfolio consists of finance receivables and loans issued primarily to automotive dealers. The following table presents the percentage of total commercial real estate finance receivables and loans by state concentration based on gross carrying value.
December 31,
 
2019
 
2018
Texas
 
15.0
%
 
15.5
%
Florida
 
11.6

 
11.6

Michigan
 
8.2

 
6.8

California
 
7.2

 
8.3

New York
 
5.9

 
4.8

North Carolina
 
4.6

 
3.6

Georgia
 
3.5

 
4.0

New Jersey
 
2.9

 
3.1

South Carolina
 
2.8

 
3.4

Illinois
 
2.4

 
2.0

Other United States
 
35.9

 
36.9

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 by industry concentration based on gross carrying value.
December 31,
 
2019
 
2018
Automotive
 
81.7
%
 
80.6
%
Services
 
5.4

 
5.0

Electronics
 
3.7

 
2.3

Other
 
9.2

 
12.1

Total commercial criticized finance receivables and loans
 
100.0
%
 
100.0
%