Allowance for Credit Losses

9 Months Ended

Dec. 31, 2023

Loans and Leases Receivable Disclosure [Abstract]

Allowance for Credit Losses

Note 4 – Allowance for Credit Losses

The following tables provide information related to our allowance for credit losses for finance receivables and certain off-balance sheet lending commitments by portfolio segment:

	Three months ended December 31, 2023
	Retail loan			Dealer products		Total
Beginning balance, October 1, 2023	$	1,529		$	99	$	1,628
Charge-offs		(211	)		-		(211	)
Recoveries		27			-		27
Provision for credit losses		188			18		206
Ending balance, December 31, 2023 ¹	$	1,533		$	117	$	1,650
	Nine months ended December 31, 2023
	Retail loan			Dealer products		Total
Beginning balance, April 1, 2023	$	1,430		$	83	$	1,513
Charge-offs		(536	)		-		(536	)
Recoveries		81			-		81
Provision for credit losses		558			34		592
Ending balance, December 31, 2023 ¹	$	1,533		$	117	$	1,650

1 Ending balance includes $45 million of allowance for credit losses recorded in Other liabilities on the Consolidated Balance Sheet which is related to off-balance sheet lending commitments in the dealer products portfolio.

	Three months ended December 31, 2022
	Retail loan			Dealer products		Total
Beginning balance, October 1, 2022	$	1,321		$	74	$	1,395
Charge-offs		(173	)		-		(173	)
Recoveries		13			-		13
Provision for credit losses		265			13		278
Ending balance, December 31, 2022 ¹	$	1,426		$	87	$	1,513
	Nine months ended December 31, 2022
	Retail loan			Dealer products		Total
Beginning balance, April 1, 2022	$	1,195		$	77	$	1,272
Charge-offs		(370	)		-		(370	)
Recoveries		42			-		42
Provision for credit losses		559			10		569
Ending balance, December 31, 2022 ¹	$	1,426		$	87	$	1,513

1 Ending balance includes $29 million of allowance for credit losses recorded in Other liabilities on the Consolidated Balance Sheet which is related to off-balance sheet lending commitments in the dealer products portfolio.

Note 4 – Allowance for Credit Losses (Continued)

We have elected to exclude accrued interest from the measurement of expected credit losses as we apply policies and procedures that result in the timely write-offs of accrued interest. Accrued interest is written off within allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is greater than 120 days past due.

Finance receivables for the dealer products portfolio segment as of December 31, 2023, includes $1.4 billion in finance receivables that are guaranteed by Toyota Motor North America, Inc. (“TMNA”), and $230 million in finance receivables that are guaranteed by third-party private Toyota distributors. Finance receivables for the dealer products portfolio segment as of December 31, 2022, includes $983 million in finance receivables that are guaranteed by TMNA, and $203 million in finance receivables that are guaranteed by third-party private Toyota distributors. These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMNA and third-party private Toyota distributors.