XML 62 R48.htm IDEA: XBRL DOCUMENT v3.20.2
Fair Value (Tables)
 9 Months Ended
Sep. 30, 2020
Fair Value Disclosures [Abstract]  
Schedule of Fair Value, Assets and Liabilities Measured on a Recurring Basis
The following tables display the assets and liabilities measured at fair value on a recurring basis including financial instruments elected for the fair value option. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The tables below display the hedges separately from the hedged items; therefore, they do not directly display the impact of our risk-management activities.
Recurring fair value measurements
September 30, 2020 ($ in millions)
Level 1Level 2Level 3Total
Assets
Investment securities
Equity securities (a)$621 $— $6 $627 
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies
806 — — 806 
U.S. States and political subdivisions
— 970 7 977 
Foreign government17 179 — 196 
Agency mortgage-backed residential
— 20,495 — 20,495 
Mortgage-backed residential
— 3,036 — 3,036 
Agency mortgage-backed commercial— 2,244 — 2,244 
Asset-backed— 389 — 389 
Corporate debt
— 1,846 — 1,846 
Total available-for-sale securities823 29,159 7 29,989 
Mortgage loans held-for-sale (b)
— — 156 156 
Finance receivables and loans, net
Consumer other (b)— — 8 8 
Derivative contracts in a receivable position
Interest rate— — 18 18 
Foreign currency— 3 — 3 
Other2 — — 2 
Total derivative contracts in a receivable position
2 3 18 23 
Total assets$1,446 $29,162 $195 $30,803 
Liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Other$4 — — $4 
Total derivative contracts in a payable position
4 — — 4 
Total liabilities$4 $— $— $4 
(a)Our direct investment in any one industry did not exceed 11%.
(b)Carried at fair value due to fair value option elections.
Recurring fair value measurements
December 31, 2019 ($ in millions)
Level 1
Level 2
Level 3
Total
Assets
Investment securities
Equity securities (a)
$608 $— $8 $616 
Available-for-sale securities
Debt securities
U.S. Treasury and federal agencies
2,047 1 — 2,048 
U.S. States and political subdivisions
— 639 2 641 
Foreign government
15 171 — 186 
Agency mortgage-backed residential
— 21,404 — 21,404 
Mortgage-backed residential— 2,850 — 2,850 
Agency mortgage-backed commercial— 1,382 — 1,382 
Mortgage-backed commercial
— 42 — 42 
Asset-backed
— 368 — 368 
Corporate debt
— 1,363 — 1,363 
Total available-for-sale securities
2,062 28,220 2 30,284 
Mortgage loans held-for-sale (b)
— — 30 30 
Finance receivables and loans, net
Consumer other (b)— — 11 11 
Interests retained in financial asset sales— — 2 2 
Derivative contracts in a receivable position
Interest rate
— 62 2 64 
Total derivative contracts in a receivable position
— 62 2 64 
Total assets
$2,670 $28,282 $55 $31,007 
Liabilities
Accrued expenses and other liabilities
Derivative contracts in a payable position
Foreign currency$— $5 $— $5 
Total derivative contracts in a payable position
— 5 — 5 
Total liabilities
$— $5 $— $5 
(a)Our investment in any one industry did not exceed 13%.
(b)Carried at fair value due to fair value option elections.
Fair Value, Assets Measured on a Recurring Basis, Unobservable Input Reconciliation
The following tables present the reconciliation for all Level 3 assets and liabilities measured at fair value on a recurring basis. There were no transfers into or out of Level 3 in the periods presented. We often economically hedge the fair value change of our assets or liabilities with derivatives and other financial instruments. The Level 3 items presented below may be hedged by derivatives and other financial instruments that are classified as Level 1 or Level 2. Thus, the following tables do not fully reflect the impact of our risk-management activities.
Level 3 recurring fair value measurements
Net realized/unrealized gainsFair value at September 30, 2020Net unrealized gains still held at September 30, 2020
($ in millions)Fair value at July 1, 2020included in earningsincluded in OCIPurchasesSalesIssuancesSettlementsincluded in earningsincluded in OCI
Assets
Investment securities
Equity securities$5 $1 (a)$— $— $— $— $— $6 $1 $— 
Available-for-sale securities5 — — 2 — — — 7 — — 
Mortgage loans held-for-sale (b)91 22 (c)— 854 (811)— — 156 — — 
Finance receivables and loans, net (b)
8 2 (d)— 5 — — (7)8 — — 
Other assets
Interests retained in financial asset sales
1 — — — — — (1)— — — 
Derivative assets
12 6 (c)— — — — — 18 6 — 
Total assets$122 $31 $— $861 $(811)$— $(8)$195 $7 $— 
(a)Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(d)Reported as interest and fees on finance receivables and loans and other income, net of losses, in the Condensed Consolidated Statement of Comprehensive Income.
Level 3 recurring fair value measurements
Net realized/unrealized (losses) gainsFair value at September 30, 2019Net unrealized losses still held at September 30, 2019
($ in millions)Fair value at July 1, 2019included in earningsincluded in OCIPurchasesSalesIssuancesSettlementsincluded in earningsincluded in OCI
Assets
Equity securities$9 $(1)(a)$— $— $— $— $— $8 $(1)$— 
Mortgage loans held-for-sale (b)22 3 (c)— 222 (209)— — 38 — — 
Other assets
Interests retained in financial asset sales
3 — — — — — — 3 — — 
Derivative assets, net of derivative liabilities2 — — — — — — 2 — — 
Total assets$36 $2 $— $222 $(209)$— $— $51 $(1)$— 
(a)Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
Level 3 recurring fair value measurements
Net realized/unrealized (losses) gainsFair value at September 30, 2020Net unrealized (losses) gains still held at September 30, 2020
($ in millions)Fair value at Jan. 1, 2020included in earningsincluded in OCIPurchasesSalesIssuancesSettlementsincluded in earningsincluded in OCI
Assets
Investment securities
Equity securities$8 $(2)(a)$— $— $— $— $— $6 $(2)$— 
Available-for-sale securities2 — — 5 — — — 7 — — 
Mortgage loans held-for-sale (b)30 35 (c)— 1,832 (1,741)— — 156 2 — 
Finance receivables and loans, net (b)
11 2 (d)— 14 — — (19)8 — — 
Other assets
Interests retained in financial asset sales
2 — — — — — (2)— — — 
Derivative assets
2 16 (c)— — — — — 18 16 — 
Total assets$55 $51 $— $1,851 $(1,741)$— $(21)$195 $16 $— 
(a)Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
(d)Reported as interest and fees on finance receivables and loans and other income, net of losses in the Condensed Consolidated Statement of Comprehensive Income.
Level 3 recurring fair value measurements
Net realized/unrealized gainsFair value at September 30, 2019Net unrealized gains still held at September 30, 2019
($ in millions)Fair value at Jan. 1, 2019included in earningsincluded in OCIPurchasesSalesIssuancesSettlementsincluded in earningsincluded in OCI
Assets
Equity securities$7 $5 (a)$— $— $— $— $(4)$8 $5 $— 
Mortgage loans held-for-sale (b)8 7 (c)— 468 (445)— — 38 — — 
Other assets
Interests retained in financial asset sales
4 — — — — — (1)3 — — 
Derivative assets, net of derivative liabilities— 2 (c)— — — — — 2 2 — 
Total assets$19 $14 $— $468 $(445)$— $(5)$51 $7 $— 
(a)Reported as other gain on investments, net, in the Condensed Consolidated Statement of Comprehensive Income.
(b)Carried at fair value due to fair value option elections.
(c)Reported as gain on mortgage and automotive loans, net, in the Condensed Consolidated Statement of Comprehensive Income.
Fair Value Measurements - Nonrecurring Basis
The following tables display assets and liabilities measured at fair value on a nonrecurring basis and still held at September 30, 2020, and December 31, 2019, respectively. The amounts are generally as of the end of each period presented, which approximate the fair value measurements that occurred during each period.
Nonrecurring fair value measurements
Lower-of-cost or fair value reserve, valuation reserve, or cumulative adjustments
Total gain (loss) included in earnings
September 30, 2020 ($ in millions)
Level 1
Level 2
Level 3
Total
Assets
Loans held-for-sale, net$— $— $285 $285 $— n/m(a)
Commercial finance receivables and loans, net (b)
Automotive
— — 13 13 (11)n/m(a)
Other
— — 59 59 (13)n/m(a)
Total commercial finance receivables and loans, net
— — 72 72 (24)n/m(a)
Other assets
Nonmarketable equity investments
— 21 5 26 15 n/m(a)
Repossessed and foreclosed assets (c)
— — 6 6 (1)n/m(a)
Total assets
$— $21 $368 $389 $(10)n/m
n/m = not meaningful
(a)We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation reserve, loan loss allowance, or cumulative adjustment.
(b)Represents the portion of the portfolio specifically impaired during 2020. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables.
(c)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
Nonrecurring fair value measurements
Lower-of-cost or fair value reserve, valuation reserve, or cumulative adjustments
Total gain (loss) included in earnings
December 31, 2019 ($ in millions)
Level 1
Level 2
Level 3
Total
Assets
Loans held-for-sale, net
$— $— $128 $128 $— n/m(a)
Commercial finance receivables and loans, net (b)
Automotive
— — 64 64 (12)n/m(a)
Other
— — 45 45 (21)n/m(a)
Total commercial finance receivables and loans, net
— — 109 109 (33)n/m(a)
Other assets
Nonmarketable equity investments
— 5 7 12 — n/m(a)
Equity-method investments
— — 4 4 (6)n/m(a)
Repossessed and foreclosed assets (c)
— — 12 12 (1)n/m(a)
Total assets
$— $5 $260 $265 $(40)n/m
n/m = not meaningful
(a)We consider the applicable valuation allowance, loan loss allowance, or cumulative impairment to be the most relevant indicator of the impact on earnings caused by the fair value measurement. Accordingly, the table above excludes total gains and losses included in earnings for these items. The carrying values are inclusive of the respective valuation reserve, loan loss allowance, or cumulative adjustment.
(b)Represents the portion of the portfolio specifically impaired during 2019. The related valuation allowance represents the cumulative adjustment to fair value of those specific receivables.
(c)The allowance provided for repossessed and foreclosed assets represents any cumulative valuation adjustment recognized to adjust the assets to fair value.
Financial Instruments Disclosure
The following table presents the carrying and estimated fair value of financial instruments, except for those recorded at fair value on a recurring basis presented in the previous section of this note titled Recurring Fair Value. When possible, we use quoted market prices to determine fair value. Where quoted market prices are not available, the fair value is internally derived based on appropriate valuation methodologies with respect to the amount and timing of future cash flows and estimated discount rates. However, considerable judgment is required in interpreting current market data to develop the market assumptions and inputs necessary to estimate fair value. As such, the actual amount received to sell an asset or the amount paid to settle a liability could differ from our estimates. Fair value information presented herein was based on information available at September 30, 2020, and December 31, 2019.
Estimated fair value
($ in millions)
Carrying value
Level 1
Level 2
Level 3
Total
September 30, 2020
Financial assets
Held-to-maturity securities
$1,255 $— $1,336 $— $1,336 
Loans held-for-sale, net
285 — — 285 285 
Finance receivables and loans, net
114,641 — — 121,363 121,363 
FHLB/FRB stock (a)
843 — 843 — 843 
Financial liabilities
Deposit liabilities
$57,616 $— $— $58,505 $58,505 
Short-term borrowings
3,032 — — 3,033 3,033 
Long-term debt
25,704 — 19,763 8,909 28,672 
December 31, 2019
Financial assets
Held-to-maturity securities$1,568 $— $1,600 $— $1,600 
Loans held-for-sale, net128 — — 128 128 
Finance receivables and loans, net126,957 — — 130,837 130,837 
FHLB/FRB stock (a)1,150 — 1,150 — 1,150 
Financial liabilities
Deposit liabilities$60,146 $— $— $60,678 $60,678 
Short-term borrowings5,531 — — 5,532 5,532 
Long-term debt34,027 — 22,789 14,138 36,927 
(a)Included in other assets on our Condensed Consolidated Balance Sheet.