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Loans (Tables)

3 Months Ended

Mar. 31, 2019

Loan Portfolio Composition and Aging Analysis

The table below presents the composition and an aging analysis of our loans held for investment portfolio as of March 31, 2019 and December 31, 2018. The delinquency aging includes all past due loans, both performing and nonperforming.

Table 4.1: Loan Portfolio Composition and Aging Analysis



	March 31, 2019
(Dollars in millions)	Current			30-59 Days			60-89 Days			> 90 Days			Total Delinquent Loans			PCI Loans			Total Loans
Credit Card:
Domestic credit card	$	97,295		$	1,029		$	780		$	1,948		$	3,757		$	0		$	101,052
International card businesses	8,451			124			78			131			333			0			8,784
Total credit card	105,746			1,153			858			2,079			4,090			0			109,836
Consumer Banking:
Auto	52,921			2,321			971			231			3,523			0			56,444
Retail banking	2,755			21			6			19			46			3			2,804
Total consumer banking	55,676			2,342			977			250			3,569			3			59,248
Commercial Banking:
Commercial and multifamily real estate	28,881			37			33			11			81			22			28,984
Commercial and industrial	41,662			217			84			133			434			101			42,197
Total commercial lending	70,543			254			117			144			515			123			71,181
Small-ticket commercial real estate	1			1			0			6			7			0			8
Total commercial banking	70,544			255			117			150			522			123			71,189
Total loans⁽¹⁾	$	231,966		$	3,750		$	1,952		$	2,479		$	8,181		$	126		$	240,273
% of Total loans	96.5		%	1.6		%	0.8		%	1.0		%	3.4		%	0.1		%	100.0		%



	December 31, 2018
(Dollars in millions)	Current			30-59 Days			60-89 Days			> 90 Days			Total Delinquent Loans			PCI Loans			Total Loans
Credit Card:
Domestic credit card	$	103,014		$	1,270		$	954		$	2,111		$	4,335		$	1		$	107,350
International card businesses	8,678			127			78			128			333			0			9,011
Total credit card	111,692			1,397			1,032			2,239			4,668			1			116,361
Consumer Banking:
Auto	52,032			2,624			1,326			359			4,309			0			56,341
Retail banking	2,809			23			8			20			51			4			2,864
Total consumer banking	54,841			2,647			1,334			379			4,360			4			59,205
Commercial Banking:
Commercial and multifamily real estate	28,737			101			20			19			140			22			28,899
Commercial and industrial	40,704			135			43			101			279			108			41,091
Total commercial lending	69,441			236			63			120			419			130			69,990
Small-ticket commercial real estate	336			2			1			4			7			0			343
Total commercial banking	69,777			238			64			124			426			130			70,333
Total loans⁽¹⁾	$	236,310		$	4,282		$	2,430		$	2,742		$	9,454		$	135		$	245,899
% of Total loans	96.1		%	1.7		%	1.0		%	1.1		%	3.8		%	0.1		%	100.0		%

__________

⁽¹⁾

Loans, other than PCI loans, include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $870 million and $818 million as of March 31, 2019 and December 31, 2018, respectively.

90 Plus Day Delinquent Loans Accruing Interest and Nonperforming Loans

The following table presents the outstanding balance of loans 90 days or more past due that continue to accrue interest and loans classified as nonperforming as of March 31, 2019 and December 31, 2018. Nonperforming loans generally include loans that have been placed on nonaccrual status. PCI loans are excluded from the table below. See “Note 1—Summary of Significant Accounting Policies” in our 2018 Form 10-K for additional information on our policies for nonperforming loans and accounting for PCI loans.

Table 4.2: 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans



	March 31, 2019				December 31, 2018
(Dollars in millions)	> 90 Days and Accruing		Nonperforming Loans		> 90 Days and Accruing		Nonperforming Loans
Credit Card:
Domestic credit card	$	1,948	N/A		$	2,111	N/A
International card businesses	124		$	23	122		$	22
Total credit card	2,072		23		2,233		22
Consumer Banking:
Auto	0		321		0		449
Retail banking	0		31		0		30
Total consumer banking	0		352		0		479



	March 31, 2019						December 31, 2018
(Dollars in millions)	> 90 Days and Accruing			Nonperforming Loans			> 90 Days and Accruing			Nonperforming Loans
Commercial Banking:
Commercial and multifamily real estate	$	0		$	69		$	0		$	83
Commercial and industrial	38			301			0			223
Total commercial lending	38			370			0			306
Small-ticket commercial real estate	0			8			0			6
Total commercial banking	38			378			0			312
Total	$	2,110		$	753		$	2,233		$	813
% of Total loans held for investment	0.9		%	0.3		%	0.9		%	0.3		%

Loans and Leases Receivable Disclosure [Line Items]

Impaired Loans

The following table presents information on our impaired loans as of March 31, 2019 and December 31, 2018, and for the three months ended March 31, 2019 and 2018. Impaired loans include loans modified in troubled debt restructurings (“TDRs”), all nonperforming commercial loans and nonperforming home loans with a specific impairment. Impaired loans without an allowance generally represent loans that have been charged down to the fair value of the underlying collateral for which we believe no additional losses have been incurred, or where the fair value of the underlying collateral meets or exceeds the loan’s amortized cost. PCI loans are excluded from the following tables.

Table 4.8: Impaired Loans



	March 31, 2019
(Dollars in millions)	With an Allowance		Without an Allowance		Total Recorded Investment		Related Allowance		Net Recorded Investment		Unpaid Principal Balance
Credit Card:
Domestic credit card	$	659	$	0	$	659	$	172	$	487	$	648
International card businesses	198		0		198		98		100		192
Total credit card⁽¹⁾	857		0		857		270		587		840
Consumer Banking:
Auto	308		37		345		28		317		446
Retail banking	53		0		53		4		49		60
Total consumer banking	361		37		398		32		366		506
Commercial Banking:
Commercial and multifamily real estate	47		60		107		3		104		110
Commercial and industrial	423		146		569		65		504		684
Total commercial lending	470		206		676		68		608		794
Small-ticket commercial real estate	0		7		7		0		7		9
Total commercial banking	470		213		683		68		615		803
Total	$	1,688	$	250	$	1,938	$	370	$	1,568	$	2,149



	December 31, 2018
(Dollars in millions)	With an Allowance		Without an Allowance		Total Recorded Investment		Related Allowance		Net Recorded Investment		Unpaid Principal Balance
Credit Card:
Domestic credit card	$	666	$	0	$	666	$	186	$	480	$	654
International card businesses	189		0		189		91		98		183
Total credit card⁽¹⁾	855		0		855		277		578		837
Consumer Banking:
Auto⁽²⁾	301		38		339		22		317		420
Retail banking	42		12		54		5		49		60
Total consumer banking	343		50		393		27		366		480
Commercial Banking:
Commercial and multifamily real estate	92		28		120		5		115		121
Commercial and industrial	301		169		470		29		441		593
Total commercial lending	393		197		590		34		556		714
Small-ticket commercial real estate	0		6		6		0		6		9
Total commercial banking	393		203		596		34		562		723
Total	$	1,591	$	253	$	1,844	$	338	$	1,506	$	2,040



	Three Months Ended March 31,
	2019				2018
(Dollars in millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Credit Card:
Domestic credit card	$	663	$	15	$	646	$	16
International card businesses	193		4		178		3
Total credit card⁽¹⁾	856		19		824		19
Consumer Banking:
Auto⁽²⁾	342		10		456		13
Home loan	0		0		229		1
Retail banking	54		0		61		0
Total consumer banking	396		10		746		14
Commercial Banking:
Commercial and multifamily real estate	113		0		106		1
Commercial and industrial	520		4		733		6
Total commercial lending	633		4		839		7
Small-ticket commercial real estate	6		0		6		0
Total commercial banking	639		4		845		7
Total	$	1,891	$	33	$	2,415	$	40

__________


⁽¹⁾	The period-end and average recorded investments of credit card loans include finance charges and fees.

⁽²⁾

2018 amounts include certain TDRs that were recorded as other assets on our consolidated balance sheets.

TDR Disclosures in Progress Financial Impact of Modification

Troubled Debt Restructurings

Total recorded TDRs were $1.7 billion and $1.6 billion as of March 31, 2019 and December 31, 2018, respectively. TDRs classified as performing in our credit card and consumer banking loan portfolios totaled $1.2 billion as of both March 31, 2019 and December 31, 2018. TDRs classified as performing in our commercial banking loan portfolio totaled $300 million and $282 million as of March 31, 2019 and December 31, 2018, respectively. Commitments to lend additional funds on loans modified in TDRs totaled $232 million and $256 million as of March 31, 2019 and December 31, 2018, respectively.

Loans Modified in TDRs

As part of our loan modification programs to borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. The following tables present the major modification types, recorded investment amounts and financial effects of loans modified in TDRs during the three months ended March 31, 2019 and 2018.

Table 4.9: Troubled Debt Restructurings



	Total Loans Modified⁽¹⁾		Three Months Ended March 31, 2019
			Reduced Interest Rate				Term Extension
(Dollars in millions)			% of TDR Activity⁽²⁾		Average Rate Reduction		% of TDR Activity⁽²⁾		Average Term Extension (Months)
Credit Card:
Domestic credit card	$	98	100	%	16.42	%	0	%	0
International card businesses	47		100		27.59		0		0
Total credit card	145		100		20.04		0		0
Consumer Banking:
Auto	72		37		3.83		91		7
Retail banking	1		15		13.01		85		6
Total consumer banking	73		37		3.88		91		7
Commercial Banking:
Commercial and multifamily real estate	34		100		0.00		0		0
Commercial and industrial	21		0		0.00		0		0
Total commercial lending	55		62		0.00		0		0
Small-ticket commercial real estate	0		0		0.00		0		0
Total commercial banking	55		61		0.00		0		0
Total	$	273	75		14.64		24		7



	Total Loans Modified⁽¹⁾		Three Months Ended March 31, 2018
			Reduced Interest Rate				Term Extension
(Dollars in millions)			% of TDR Activity⁽²⁾		Average Rate Reduction		% of TDR Activity⁽²⁾		Average Term Extension (Months)
Credit Card:
Domestic credit card	$	113	100	%	15.73	%	0	%	0
International card businesses	50		100		26.86		0		0
Total credit card	163		100		19.17		0		0
Consumer Banking:
Auto⁽³⁾	62		52		3.76		91		7
Home loan	6		28		1.78		83		214
Retail banking	2		11		10.22		81		5
Total consumer banking	70		49		3.71		90		23
Commercial Banking:
Commercial and multifamily real estate	2		0		0.00		100		7
Commercial and industrial	11		0		0.00		100		11
Total commercial lending	13		0		0.00		100		11
Small-ticket commercial real estate	2		0		0.00		0		0
Total commercial banking	15		0		0.00		85		11
Total	$	248	80		16.50		30		21

__________


⁽¹⁾	Represents the recorded investment of total loans modified in TDRs at the end of the quarter in which they were modified. As not every modification type is included in the table above, the total percentage of TDR activity may not add up to 100%. Some loans may receive more than one type of concession as part of the modification.


⁽²⁾	Due to multiple concessions granted to some troubled borrowers, percentages may total more than 100% for certain loan types.


⁽³⁾	Includes certain TDRs that are recorded as other assets on our consolidated balance sheets.

Subsequent Defaults of Completed TDR Modifications

The following table presents the type, number and recorded investment of loans modified in TDRs that experienced a default during the period and had completed a modification event in the twelve months prior to the default. A default occurs if the loan is either 90 days or more delinquent, has been charged off as of the end of the period presented or has been reclassified from accrual to nonaccrual status.

Table 4.10: TDRs—Subsequent Defaults



	Three Months Ended March 31,
	2019			2018
(Dollars in millions)	Number of Contracts	Amount		Number of Contracts	Amount
Credit Card:
Domestic credit card	14,027	$	29	16,339	$	34
International card businesses	16,706	28		13,939	26
Total credit card	30,733	57		30,278	60
Consumer Banking:
Auto	1,105	13		1,807	21
Home loan	0	0		3	1
Retail banking	8	0		8	0
Total consumer banking	1,113	13		1,818	22
Commercial Banking:
Commercial and industrial	0	0		6	35
Total commercial lending	0	0		6	35
Total commercial banking	0	0		6	35
Total	31,846	$	70	32,102	$	117

Credit Card

Loans and Leases Receivable Disclosure [Line Items]

Risk Profile by Geographic Region

The table below displays the geographic profile of our credit card loan portfolio as of March 31, 2019 and December 31, 2018. Table 4.3: Credit Card Risk Profile by Geographic Region



	March 31, 2019				December 31, 2018
(Dollars in millions)	Amount		% of Total		Amount		% of Total
Domestic credit card:
California	$	10,978	10.0	%	$	11,591	10.0	%
Texas	7,782		7.1		8,173		7.0
New York	6,948		6.3		7,400		6.4
Florida	6,755		6.2		7,086		6.1
Illinois	4,443		4.0		4,761		4.1
Pennsylvania	4,256		3.9		4,575		3.9
Ohio	3,676		3.3		3,967		3.4
New Jersey	3,420		3.1		3,641		3.1
Michigan	3,303		3.0		3,544		3.0
Other	49,491		45.1		52,612		45.3
Total domestic credit card	101,052		92.0		107,350		92.3
International card businesses:
Canada	5,832		5.3		6,023		5.1
United Kingdom	2,952		2.7		2,988		2.6
Total international card businesses	8,784		8.0		9,011		7.7
Total credit card	$	109,836	100.0	%	$	116,361	100.0	%

Net Charge-Offs

The table below presents net charge-offs for the three months ended March 31, 2019 and 2018.

Table 4.4: Credit Card Net Charge-Offs



	Three Months Ended March 31,
	2019				2018
(Dollars in millions)	Amount		Rate⁽¹⁾		Amount		Rate⁽¹⁾
Net charge-offs:⁽¹⁾
Domestic credit card	$	1,294	5.04	%	$	1,321	5.26	%
International card businesses	70		3.20		56		2.49
Total credit card	$	1,364	4.90		$	1,377	5.03

__________

⁽¹⁾

Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine to be uncollectible, net of recovered amounts. Net charge-off rate is calculated by dividing annualized net charge-offs by average loans held for investment for the period for each loan category. Net charge-offs and the net charge-off rate are impacted periodically by fluctuations in recoveries, including loan sales.

Consumer Banking

Loans and Leases Receivable Disclosure [Line Items]

Risk Profile by Geographic Region

The table below displays the geographic profile of our consumer banking loan portfolio as of March 31, 2019 and December 31, 2018.Table 4.5: Consumer Banking Risk Profile by Geographic Region



	March 31, 2019				December 31, 2018
(Dollars in millions)	Amount		% of Total		Amount		% of Total
Auto:
Texas	$	7,256	12.2	%	$	7,264	12.3	%
California	6,416		10.8		6,352		10.7
Florida	4,645		7.8		4,623		7.8
Georgia	2,638		4.5		2,665		4.5
Ohio	2,521		4.3		2,502		4.2
Pennsylvania	2,161		3.6		2,167		3.7
Illinois	2,156		3.6		2,171		3.7
Louisiana	2,134		3.6		2,174		3.7
Other	26,517		44.9		26,423		44.6
Total auto	56,444		95.3		56,341		95.2
Retail banking:
New York	827		1.4		837		1.4
Louisiana	753		1.3		772		1.3
Texas	628		1.0		647		1.1
New Jersey	193		0.3		201		0.3
Maryland	159		0.3		161		0.3
Virginia	134		0.2		137		0.2
Other	110		0.2		109		0.2
Total retail banking	2,804		4.7		2,864		4.8
Total consumer banking	$	59,248	100.0	%	$	59,205	100.0	%

Net Charge-Offs

The table below presents net charge-offs in our consumer banking loan portfolio for the three months ended March 31, 2019 and 2018, as well as nonperforming loans as of March 31, 2019 and December 31, 2018.

Table 4.6: Consumer Banking Net Charge-Offs (Recoveries) and Nonperforming Loans



	Three Months Ended March 31,
	2019				2018
(Dollars in millions)	Amount		Rate⁽¹⁾		Amount			Rate⁽¹⁾
Net charge-offs (recoveries):
Auto	$	203	1.44	%	$	208		1.53	%
Retail banking	18		2.56		16			1.89
Home loan	0		0.00		(1		)	(0.03	)
Total consumer banking	$	221	1.49		$	223		1.19



	March 31, 2019				December 31, 2018
(Dollars in millions)	Amount		Rate⁽²⁾		Amount		Rate⁽²⁾
Nonperforming loans:
Auto	$	321	0.57	%	$	449	0.80	%
Retail banking	31		1.10		30		1.04
Total consumer banking	$	352	0.59		$	479	0.81

__________


⁽¹⁾	Net charge-off (recovery) rate is calculated by dividing annualized net charge-offs (recoveries) by average loans held for investment for the period for each loan category.

⁽²⁾

Nonperforming loan rates are calculated based on nonperforming loans for each category divided by period-end total loans held for investment for each respective category.

Commercial Banking

Loans and Leases Receivable Disclosure [Line Items]

Risk Profile by Geographic Region and Internal Risk Rating

The following table presents the geographic concentration and internal risk ratings of our commercial loan portfolio as of March 31, 2019 and December 31, 2018.

Table 4.7: Commercial Banking Risk Profile by Geographic Region and Internal Risk Rating



	March 31, 2019
(Dollars in millions)	Commercial and Multifamily Real Estate		% of Total		Commercial and Industrial		% of Total		Small-Ticket Commercial Real Estate		% of Total		Total Commercial Banking		% of Total
Geographic concentration:⁽¹⁾
Northeast	$	15,559	53.6	%	$	7,714	18.3	%	$	5	62.5	%	$	23,278	32.7	%
Mid-Atlantic	3,366		11.6		4,818		11.4		0		0.0		8,184		11.5
South	4,566		15.8		15,134		35.9		1		12.5		19,701		27.7
Other	5,493		19.0		14,531		34.4		2		25.0		20,026		28.1
Total	$	28,984	100.0	%	$	42,197	100.0	%	$	8	100.0	%	$	71,189	100.0	%
Internal risk rating:⁽²⁾
Noncriticized	$	28,148	97.1	%	$	40,446	95.9	%	$	0	0.0	%	$	68,594	96.4	%
Criticized performing	745		2.6		1,349		3.2		0		0.0		2,094		2.9
Criticized nonperforming	69		0.2		301		0.7		8		100.0		378		0.5
PCI loans	22		0.1		101		0.2		0		0.0		123		0.2
Total	$	28,984	100.0	%	$	42,197	100.0	%	$	8	100.0	%	$	71,189	100.0	%



	December 31, 2018
(Dollars in millions)	Commercial and Multifamily Real Estate		% of Total		Commercial and Industrial		% of Total		Small-Ticket Commercial Real Estate		% of Total		Total Commercial Banking		% of Total
Geographic concentration:⁽¹⁾
Northeast	$	15,562	53.8	%	$	7,573	18.4	%	$	213	62.1	%	$	23,348	33.2	%
Mid-Atlantic	3,410		11.8		4,710		11.5		12		3.5		8,132		11.6
South	4,247		14.7		15,367		37.4		20		5.8		19,634		27.9
Other	5,680		19.7		13,441		32.7		98		28.6		19,219		27.3
Total	$	28,899	100.0	%	$	41,091	100.0	%	$	343	100.0	%	$	70,333	100.0	%
Internal risk rating:⁽²⁾
Noncriticized	$	28,239	97.7	%	$	39,468	96.1	%	$	336	98.0	%	$	68,043	96.8	%
Criticized performing	555		1.9		1,292		3.1		1		0.3		1,848		2.6
Criticized nonperforming	83		0.3		223		0.5		6		1.7		312		0.4
PCI loans	22		0.1		108		0.3		0		0.0		130		0.2
Total	$	28,899	100.0	%	$	41,091	100.0	%	$	343	100.0	%	$	70,333	100.0	%

__________


⁽¹⁾	Geographic concentration is generally determined by the location of the borrower’s business or the location of the collateral associated with the loan. Northeast consists of CT, MA, ME, NH, NJ, NY, PA and VT. Mid-Atlantic consists of DC, DE, MD, VA and WV. South consists of AL, AR, FL, GA, KY, LA, MO, MS, NC, SC, TN and TX.

⁽²⁾

Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.