Business Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Business Segments

NOTE 13—BUSINESS SEGMENTS

Our principal operations are currently organized into three major business segments, which are defined based on the products and services provided or the type of customer served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into our existing business segments. Certain activities that are not part of a segment, such as management of our corporate investment portfolio and asset/liability management by our centralized Corporate Treasury group, are included in the Other category.

Basis of Presentation

We report the results of each of our business segments on a continuing operations basis. See “Note 2—Discontinued Operations” for a discussion of our discontinued operations. The results of our individual businesses reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources.

Business Segment Reporting Methodology

The results of our business segments are intended to present each segment as if it were a stand-alone business. Our internal management and reporting process used to derive our segment results employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenue and expenses directly or indirectly attributable to each business segment. Our funds transfer pricing process provides a funds credit for sources of funds, such as deposits generated by our Consumer Banking and Commercial Banking businesses, and a funds charge for the use of funds by each segment. Due to the integrated nature of our business segments, estimates and judgments have been made in allocating certain revenue and expense items. Transactions between segments are based on specific criteria or approximate third-party rates. We regularly assess the assumptions, methodologies and reporting classifications used for segment reporting, which may result in the implementation of refinements or changes in future periods. We provide additional information on the allocation methodologies used to derive our business segment results in “Note 20—Business Segments” in our 2015 Form 10-K

Segment Results and Reconciliation

We may periodically change our business segments or reclassify business segment results based on modifications to our management reporting methodologies and changes in organizational alignment. The following tables present our business segment results for the three months ended March 31, 2016 and 2015, selected balance sheet data as of March 31, 2016 and 2015, and a reconciliation of our total business segment results to our reported consolidated income from continuing operations, assets and deposits. 

Table 13.1: Segment Results and Reconciliation

	Three Months Ended March 31, 2016
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(1)		Other(1)			Consolidated Total
Net interest income	$	3,033	$	1,420	$	537	$	66		$	5,056
Non-interest income	847		191		118		8			1,164
Total net revenue (loss)	3,880		1,611		655		74			6,220
Provision (benefit) for credit losses	1,071		230		228		(2		)	1,527
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization	70		0		0		0			70
Core deposit intangible amortization	0		15		3		0			18
Total PCCR and core deposit intangible amortization	70		15		3		0			88
Other non-interest expense	1,793		975		319		48			3,135
Total non-interest expense	1,863		990		322		48			3,223
Income (loss) from continuing operations before income taxes	946		391		105		28			1,470
Income tax provision (benefit)	337		142		38		(65		)	452
Income (loss) from continuing operations, net of tax	$	609	$	249	$	67	$	93		$	1,018
Loans held for investment	$	92,699	$	70,591	$	64,241	$	82		$	227,613
Deposits	0		177,803		33,383		10,593			221,779
	Three Months Ended March 31, 2015
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking(1)		Other(1)			Consolidated Total
Net interest income	$	2,666	$	1,434	$	461	$	15		$	4,576
Non-interest income	816		158		114		(17		)	1,071
Total net revenue (loss)	3,482		1,592		575		(2		)	5,647
Provision (benefit) for credit losses	669		206		60		0			935
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization	84		0		0		0			84
Core deposit intangible amortization	0		22		4		0			26
Total PCCR and core deposit intangible amortization	84		22		4		0			110
Other non-interest expense	1,692		948		268		31			2,939
Total non-interest expense	1,776		970		272		31			3,049
Income (loss) from continuing operations before income taxes	1,037		416		243		(33		)	1,663
Income tax provision (benefit)	369		150		88		(78		)	529
Income (loss) from continuing operations, net of tax	$	668	$	266	$	155	$	45		$	1,134
Loans held for investment	$	81,754	$	71,379	$	50,741	$	104		$	203,978
Deposits	0		172,502		32,575		5,363			210,440

__________

⁽¹⁾  Some of our tax-related commercial investments generate tax-exempt income or tax credits. Accordingly, we make certain reclassifications within our Commercial Banking business results to present revenues and yields on a taxable-equivalent basis, calculated assuming an effective tax rate approximately equal to our federal statutory tax rate of 35% with offsetting reclassifications to the Other category.