QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (Zip Code) |
Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
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Credit Risk Profile | ||
1 | Capital One Financial Corporation (COF) |
2 | Capital One Financial Corporation (COF) |
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Supplemental Table: | ||
A |
3 | Capital One Financial Corporation (COF) |
INTRODUCTION |
• | Capital One Bank (USA), National Association (“COBNA”), which offers credit and debit card products, other lending products and deposit products; and |
• | Capital One, National Association (“CONA”), which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients. |
• | Credit Card: Consists of our domestic consumer and small business card lending, and international card businesses in Canada and the United Kingdom (“U.K.”). |
4 | Capital One Financial Corporation (COF) |
• | Consumer Banking: Consists of our deposit gathering and lending activities for consumers and small businesses, and national auto lending. |
• | Commercial Banking: Consists of our lending, deposit gathering, capital markets and treasury management services to commercial real estate and commercial and industrial customers. Our commercial and industrial customers typically include companies with annual revenues between $20 million and $2 billion. |
5 | Capital One Financial Corporation (COF) |
6 | Capital One Financial Corporation (COF) |
7 | Capital One Financial Corporation (COF) |
SELECTED FINANCIAL DATA |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except per share data and as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Income statement | ||||||||||||||||||||||
Net interest income | $ | 5,460 | $ | 5,746 | (5 | )% | $ | 11,485 | $ | 11,537 | — | |||||||||||
Non-interest income | 1,096 | 1,378 | (20 | ) | 2,320 | 2,670 | (13 | )% | ||||||||||||||
Total net revenue | 6,556 | 7,124 | (8 | ) | 13,805 | 14,207 | (3 | ) | ||||||||||||||
Provision for credit losses | 4,246 | 1,342 | ** | 9,669 | 3,035 | ** | ||||||||||||||||
Non-interest expense: | ||||||||||||||||||||||
Marketing | 273 | 546 | (50 | ) | 764 | 1,063 | (28 | ) | ||||||||||||||
Operating expense | 3,497 | 3,233 | 8 | 6,735 | 6,387 | 5 | ||||||||||||||||
Total non-interest expense | 3,770 | 3,779 | — | 7,499 | 7,450 | 1 | ||||||||||||||||
Income (loss) from continuing operations before income taxes | (1,460 | ) | 2,003 | ** | (3,363 | ) | 3,722 | ** | ||||||||||||||
Income tax provision (benefit) | (543 | ) | 387 | ** | (1,106 | ) | 696 | ** | ||||||||||||||
Income (loss) from continuing operations, net of tax | (917 | ) | 1,616 | ** | (2,257 | ) | 3,026 | ** | ||||||||||||||
Income (loss) from discontinued operations, net of tax | (1 | ) | 9 | ** | (1 | ) | 11 | ** | ||||||||||||||
Net income (loss) | (918 | ) | 1,625 | ** | (2,258 | ) | 3,037 | ** | ||||||||||||||
Dividends and undistributed earnings allocated to participating securities | (1 | ) | (12 | ) | (92 | ) | (4 | ) | (24 | ) | (83 | ) | ||||||||||
Preferred stock dividends | (90 | ) | (80 | ) | 13 | (145 | ) | (132 | ) | 10 | ||||||||||||
Issuance cost for redeemed preferred stock | — | — | — | (22 | ) | — | ** | |||||||||||||||
Net income (loss) available to common stockholders | $ | (1,009 | ) | $ | 1,533 | ** | $ | (2,429 | ) | $ | 2,881 | ** | ||||||||||
Common share statistics | ||||||||||||||||||||||
Basic earnings per common share: | ||||||||||||||||||||||
Net income (loss) from continuing operations | $ | (2.21 | ) | $ | 3.24 | ** | $ | (5.31 | ) | $ | 6.11 | ** | ||||||||||
Income from discontinued operations | — | 0.02 | ** | — | 0.02 | ** | ||||||||||||||||
Net income (loss) per basic common share | $ | (2.21 | ) | $ | 3.26 | ** | $ | (5.31 | ) | $ | 6.13 | ** | ||||||||||
Diluted earnings per common share: | ||||||||||||||||||||||
Net income (loss) from continuing operations | $ | (2.21 | ) | $ | 3.22 | ** | $ | (5.31 | ) | $ | 6.08 | ** | ||||||||||
Income from discontinued operations | — | 0.02 | ** | — | 0.02 | ** | ||||||||||||||||
Net income (loss) per diluted common share | $ | (2.21 | ) | $ | 3.24 | ** | $ | (5.31 | ) | $ | 6.10 | ** | ||||||||||
Weighted-average common shares outstanding (in millions): | ||||||||||||||||||||||
Basic | 456.7 | 470.8 | (3 | )% | 457.1 | 470.1 | (3 | )% | ||||||||||||||
Diluted | 456.7 | 473.0 | (3 | ) | 457.1 | 472.3 | (3 | ) | ||||||||||||||
Common shares outstanding (period-end, in millions) | 456.3 | 470.3 | (3 | ) | 456.3 | 470.3 | (3 | ) | ||||||||||||||
Dividends declared and paid per common share | $ | 0.40 | $ | 0.40 | — | $ | 0.80 | $ | 0.80 | — | ||||||||||||
Tangible book value per common share (period-end)(1) | 78.82 | 77.65 | 2 | 78.82 | 77.65 | 2 | ||||||||||||||||
Balance sheet (average balances) | ||||||||||||||||||||||
Loans held for investment | $ | 253,358 | $ | 242,653 | 4 | % | $ | 258,124 | $ | 242,307 | 7 | % | ||||||||||
Interest-earning assets | 378,145 | 338,026 | 12 | 366,746 | 337,913 | 9 | ||||||||||||||||
Total assets | 411,075 | 371,095 | 11 | 400,845 | 370,746 | 8 | ||||||||||||||||
Interest-bearing deposits | 261,256 | 230,452 | 13 | 251,185 | 229,020 | 10 | ||||||||||||||||
Total deposits | 288,344 | 253,634 | 14 | 276,498 | 252,528 | 9 | ||||||||||||||||
Borrowings | 49,827 | 49,982 | — | 50,810 | 51,510 | (1 | ) | |||||||||||||||
Common equity | 52,413 | 50,209 | 4 | 52,799 | 49,289 | 7 | ||||||||||||||||
Total stockholders’ equity | 57,623 | 54,570 | 6 | 58,096 | 53,650 | 8 |
8 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except per share data and as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected performance metrics | ||||||||||||||||||||||
Purchase volume | $ | 90,149 | $ | 106,903 | (16 | )% | $ | 190,069 | $ | 200,100 | (5 | )% | ||||||||||
Total net revenue margin(2) | 6.93 | % | 8.43 | % | (150 | )bps | 7.53 | % | 8.41 | % | (88 | )bps | ||||||||||
Net interest margin | 5.78 | 6.80 | (102 | ) | 6.26 | 6.83 | (57 | ) | ||||||||||||||
Return on average assets(3) | (0.89 | ) | 1.74 | ** | (1.13 | ) | 1.63 | ** | ||||||||||||||
Return on average tangible assets(4) | (0.93 | ) | 1.82 | ** | (1.17 | ) | 1.70 | ** | ||||||||||||||
Return on average common equity(5) | (7.69 | ) | 12.14 | ** | (9.20 | ) | 11.65 | ** | ||||||||||||||
Return on average tangible common equity(6) | (10.74 | ) | 17.26 | ** | (12.81 | ) | 16.70 | ** | ||||||||||||||
Equity-to-assets ratio(7) | 14.02 | 14.71 | (69 | ) | 14.49 | 14.47 | 2 | |||||||||||||||
Non-interest expense as a percentage of average loans held for investment | 5.95 | 6.23 | (28 | ) | 5.81 | 6.15 | (34 | ) | ||||||||||||||
Efficiency ratio(8) | 57.50 | 53.05 | 4 | % | 54.32 | 52.44 | 2 | % | ||||||||||||||
Operating efficiency ratio(9) | 53.34 | 45.38 | 8 | 48.79 | 44.96 | 4 | ||||||||||||||||
Effective income tax rate from continuing operations | 37.2 | 19.3 | 18 | 32.9 | 18.7 | 14 | ||||||||||||||||
Net charge-offs | $ | 1,505 | $ | 1,508 | — | $ | 3,296 | $ | 3,107 | 6 | ||||||||||||
Net charge-off rate | 2.38 | % | 2.48 | % | (10 | )bps | 2.55 | % | 2.56 | % | (1 | )bps |
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | Change | ||||||||
Balance sheet (period-end) | |||||||||||
Loans held for investment | $ | 251,512 | $ | 265,809 | (5 | )% | |||||
Interest-earning assets | 389,829 | 355,202 | 10 | ||||||||
Total assets | 421,296 | 390,365 | 8 | ||||||||
Interest-bearing deposits | 275,183 | 239,209 | 15 | ||||||||
Total deposits | 304,238 | 262,697 | 16 | ||||||||
Borrowings | 44,900 | 55,697 | (19 | ) | |||||||
Common equity | 50,835 | 53,157 | (4 | ) | |||||||
Total stockholders’ equity | 56,045 | 58,011 | (3 | ) | |||||||
Credit quality metrics | |||||||||||
Allowance for credit losses | $ | 16,832 | $ | 7,208 | 134 | ||||||
Allowance as a percentage of loans held for investment (“allowance coverage ratio”) | 6.69 | % | 2.71 | % | 398 | bps | |||||
30+ day performing delinquency rate | 2.09 | 3.51 | (142 | ) | |||||||
30+ day delinquency rate | 2.30 | 3.74 | (144 | ) | |||||||
Capital ratios | |||||||||||
Common equity Tier 1 capital(10) | 12.4 | % | 12.2 | % | 20 | bps | |||||
Tier 1 capital(10) | 14.2 | 13.7 | 50 | ||||||||
Total capital(10) | 16.7 | 16.1 | 60 | ||||||||
Tier 1 leverage(10) | 10.3 | 11.7 | (140 | ) | |||||||
Tangible common equity(11) | 8.8 | 10.2 | (140 | ) | |||||||
Supplementary leverage(10) | 9.7 | 9.9 | (20 | ) | |||||||
Other | |||||||||||
Employees (period end, in thousands) | 53.1 | 51.9 | 2 | % |
(1) | Tangible book value per common share is a non-GAAP measure calculated based on tangible common equity divided by common shares outstanding. See “MD&A—Table A —Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures. |
(2) | Total net revenue margin is calculated based on annualized total net revenue for the period divided by average interest-earning assets for the period. |
(3) | Return on average assets is calculated based on annualized income from continuing operations, net of tax, for the period divided by average total assets for the period. |
(4) | Return on average tangible assets is a non-GAAP measure calculated based on annualized income from continuing operations, net of tax, for the period divided by average tangible assets for the period. See “MD&A—Table A—Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures. |
(5) | Return on average common equity is calculated based on annualized net income available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average common equity. Our calculation of return on average common equity may not be comparable to similarly-titled measures reported by other companies. |
9 | Capital One Financial Corporation (COF) |
(6) | Return on average tangible common equity is a non-GAAP measure calculated based on annualized net income available to common stockholders less income (loss) from discontinued operations, net of tax, for the period, divided by average tangible common equity (“TCE”). Our calculation of return on average TCE may not be comparable to similarly-titled measures reported by other companies. See “MD&A—Table A—Reconciliation of Non-GAAP Measures” for additional information on non-GAAP measures. |
(7) | Equity-to-assets ratio is calculated based on average stockholders’ equity for the period divided by average total assets for the period. |
(8) | Efficiency ratio is calculated based on non-interest expense for the period divided by total net revenue for the period. |
(9) | Operating efficiency ratio is calculated based on operating expense for the period divided by total net revenue for the period. |
(10) | Capital ratios are calculated based on the Basel III Standardized Approach framework, see “MD&A—Capital Management” for additional information. |
(11) | Tangible common equity ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. See “MD&A—Table A—Reconciliation of Non-GAAP Measures” for the calculation of this measure and reconciliation to the comparative U.S. GAAP measure. |
** | Not meaningful |
10 | Capital One Financial Corporation (COF) |
EXECUTIVE SUMMARY AND BUSINESS OUTLOOK |
• | Earnings: Our net loss of $918 million in the second quarter of 2020 and $2.3 billion in the first six months of 2020 compared to net income of $1.6 billion in the second quarter of 2019 and $3.0 billion in the first six months of 2019 was primarily driven by: |
◦ | higher provision for credit losses due to expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic; |
◦ | lower net interest income due to a shift in our asset mix with cash balances representing a greater proportion of total average interest-earning assets as compared to loans, partially offset by the lower interest rate paid on interest-bearing liabilities; |
◦ | lower non-interest income due to lower net interchange fees from a decline in purchase volume in our Domestic Card business, and lower service charges and other customer-related fees due to decreased customer activity; and |
◦ | higher operating expenses due to legal reserve builds. |
• | Loans Held for Investment: |
◦ | Period-end loans held for investment decreased by $14.3 billion to $251.5 billion as of June 30, 2020 from December 31, 2019 primarily driven by a decline in purchase volume and elevated payments resulting from the impact of the government stimulus in our Domestic Card business, partially offset by growth in our auto and commercial loan portfolios. |
◦ | Average loans held for investment increased by $10.7 billion to $253.4 billion in the second quarter of 2020 compared to the second quarter of 2019 primarily driven by growth in our commercial and auto loan portfolios. Average loans held for investment increased by $15.8 billion to $258.1 billion in the first six months of 2020 compared to the first |
11 | Capital One Financial Corporation (COF) |
• | Net Charge-Off and Delinquency Metrics: Our net charge-off rate decreased by 10 basis points to 2.38% in the second quarter of 2020 compared to the second quarter of 2019 and decreased by 1 basis point to 2.55% in the first six months of 2020 compared to the first six months of 2019, primarily driven by consumer payment behavior, the impact of the government stimulus and the acquired Walmart portfolio, partially offset by elevated charge-offs in our commercial energy loan portfolio. |
• | Allowance for Credit Losses: Our allowance for credit losses increased by $9.6 billion to $16.8 billion, and our allowance coverage ratio increased by 398 basis points to 6.69% as of June 30, 2020 from December 31, 2019, driven by the allowance build from expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic as well as the adoption of the CECL standard. |
• | any change in current dividend or repurchase strategies; |
• | the effect of any acquisitions, divestitures or similar transactions that have not been previously disclosed; |
• | any changes in laws, regulations or regulatory interpretations, in each case after the date as of which such statements are made; |
• | the potential impact on our business, operations and reputation from, and expenses and uncertainties associated with, the Cybersecurity Incident, other than the incremental costs related to the incident we expect to incur in 2020 which will be separately reported as an adjusting item as it relates to the Company’s financial results; or |
• | Moreover, this Report reflects certain assumptions regarding the potential effects of the COVID-19 pandemic on our business, results of operations, and financial condition. The extent to which the COVID-19 pandemic ultimately impacts our business, results of operations, and financial condition will depend on future developments, which are still uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic. |
12 | Capital One Financial Corporation (COF) |
CONSOLIDATED RESULTS OF OPERATIONS |
13 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||
(Dollars in millions) | Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans:(1) | ||||||||||||||||||||||
Credit card | $ | 108,748 | $ | 3,731 | 13.72 | % | $ | 110,800 | $ | 4,339 | 15.66 | % | ||||||||||
Consumer banking | 64,851 | 1,364 | 8.41 | 59,858 | 1,251 | 8.36 | ||||||||||||||||
Commercial banking(2) | 80,803 | 608 | 3.01 | 73,157 | 864 | 4.72 | ||||||||||||||||
Other(3) | — | 117 | ** | 16 | (71 | ) | ** | |||||||||||||||
Total loans, including loans held for sale | 254,402 | 5,820 | 9.15 | 243,831 | 6,383 | 10.47 | ||||||||||||||||
Investment securities | 81,095 | 482 | 2.38 | 82,383 | 629 | 3.05 | ||||||||||||||||
Cash equivalents and other interest-earning assets | 42,648 | 16 | 0.15 | 11,812 | 64 | 2.16 | ||||||||||||||||
Total interest-earning assets | 378,145 | 6,318 | 6.68 | 338,026 | 7,076 | 8.37 | ||||||||||||||||
Cash and due from banks | 5,355 | 4,180 | ||||||||||||||||||||
Allowance for credit losses | (14,107 | ) | (7,308 | ) | ||||||||||||||||||
Premises and equipment, net | 4,332 | 4,266 | ||||||||||||||||||||
Other assets | 37,350 | 31,931 | ||||||||||||||||||||
Total assets | $ | 411,075 | $ | 371,095 | ||||||||||||||||||
Liabilities and stockholders’ equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits | $ | 261,256 | $ | 611 | 0.94 | % | $ | 230,452 | $ | 870 | 1.51 | % | ||||||||||
Securitized debt obligations | 16,432 | 56 | 1.37 | 18,262 | 139 | 3.04 | ||||||||||||||||
Senior and subordinated notes | 31,294 | 180 | 2.30 | 30,630 | 310 | 4.05 | ||||||||||||||||
Other borrowings and liabilities | 3,554 | 11 | 1.21 | 2,322 | 11 | 1.91 | ||||||||||||||||
Total interest-bearing liabilities | 312,536 | 858 | 1.10 | 281,666 | 1,330 | 1.89 | ||||||||||||||||
Non-interest-bearing deposits | 27,088 | 23,182 | ||||||||||||||||||||
Other liabilities | 13,828 | 11,677 | ||||||||||||||||||||
Total liabilities | 353,452 | 316,525 | ||||||||||||||||||||
Stockholders’ equity | 57,623 | 54,570 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 411,075 | $ | 371,095 | ||||||||||||||||||
Net interest income/spread | $ | 5,460 | 5.58 | $ | 5,746 | 6.48 | ||||||||||||||||
Impact of non-interest-bearing funding | 0.20 | 0.32 | ||||||||||||||||||||
Net interest margin | 5.78 | % | 6.80 | % |
14 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||
(Dollars in millions) | Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | ||||||||||||||||
Assets: | ||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||
Loans:(1) | ||||||||||||||||||||||
Credit card | $ | 115,801 | $ | 8,168 | 14.11 | % | $ | 111,126 | $ | 8,734 | 15.72 | % | ||||||||||
Consumer banking | 64,262 | 2,711 | 8.44 | 59,464 | 2,454 | 8.25 | ||||||||||||||||
Commercial banking(2) | 78,954 | 1,354 | 3.43 | 72,762 | 1,697 | 4.67 | ||||||||||||||||
Other(3) | — | 129 | ** | 31 | (134 | ) | ** | |||||||||||||||
Total loans, including loans held for sale | 259,017 | 12,362 | 9.55 | 243,383 | 12,751 | 10.48 | ||||||||||||||||
Investment securities | 79,654 | 1,012 | 2.54 | 83,027 | 1,284 | 3.09 | ||||||||||||||||
Cash equivalents and other interest-earning assets | 28,075 | 53 | 0.38 | 11,503 | 133 | 2.31 | ||||||||||||||||
Total interest-earning assets | 366,746 | 13,427 | 7.32 | 337,913 | 14,168 | 8.39 | ||||||||||||||||
Cash and due from banks | 5,024 | 4,233 | ||||||||||||||||||||
Allowance for credit losses | (12,258 | ) | (7,269 | ) | ||||||||||||||||||
Premises and equipment, net | 4,338 | 4,273 | ||||||||||||||||||||
Other assets | 36,995 | 31,596 | ||||||||||||||||||||
Total assets | $ | 400,845 | $ | 370,746 | ||||||||||||||||||
Liabilities and stockholders’ equity: | ||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||
Interest-bearing deposits | $ | 251,185 | $ | 1,342 | 1.07 | % | $ | 229,020 | $ | 1,687 | 1.47 | % | ||||||||||
Securitized debt obligations | 17,243 | 155 | 1.80 | 18,503 | 282 | 3.05 | ||||||||||||||||
Senior and subordinated notes | 31,318 | 419 | 2.67 | 30,732 | 624 | 4.06 | ||||||||||||||||
Other borrowings and liabilities | 3,667 | 26 | 1.42 | 3,497 | 38 | 2.20 | ||||||||||||||||
Total interest-bearing liabilities | 303,413 | 1,942 | 1.28 | 281,752 | 2,631 | 1.87 | ||||||||||||||||
Non-interest-bearing deposits | 25,313 | 23,508 | ||||||||||||||||||||
Other liabilities | 14,023 | 11,836 | ||||||||||||||||||||
Total liabilities | 342,749 | 317,096 | ||||||||||||||||||||
Stockholders’ equity | 58,096 | 53,650 | ||||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 400,845 | $ | 370,746 | ||||||||||||||||||
Net interest income/spread | $ | 11,485 | 6.04 | $ | 11,537 | 6.52 | ||||||||||||||||
Impact of non-interest-bearing funding | 0.22 | 0.31 | ||||||||||||||||||||
Net interest margin | 6.26 | % | 6.83 | % |
(1) | Past due fees included in interest income totaled approximately $265 million and $656 million in the second quarter and first six months of 2020, respectively, and $406 million and $801 million in the second quarter and first six months of 2019, respectively. |
(2) | Some of our commercial loans generate tax-exempt income. Accordingly, we present our Commercial Banking interest income and yields on a taxable- equivalent basis, calculated using the federal statutory rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. Taxable-equivalent adjustments included in the interest income and yield computations for our commercial loans totaled approximately $21 million and $41 million in the second quarter and first six months of 2020, respectively, and $20 million and $41 million in the second quarter and first six months of 2019, respectively, with corresponding reductions to the Other category. |
(3) | Interest income/expense of Other represents the impact of hedge accounting of our loan portfolios and the offsetting reduction of the taxable-equivalent adjustments of our commercial loans as described above. |
** | Not meaningful. |
15 | Capital One Financial Corporation (COF) |
• | changes in the volume of our interest-earning assets and interest-bearing liabilities; or |
• | changes in the interest rates related to these assets and liabilities. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
2020 vs. 2019 | 2020 vs. 2019 | |||||||||||||||||||||||
(Dollars in millions) | Total Variance | Volume | Rate | Total Variance | Volume | Rate | ||||||||||||||||||
Interest income: | ||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||
Credit card | $ | (608 | ) | $ | (79 | ) | $ | (529 | ) | $ | (566 | ) | $ | 330 | $ | (896 | ) | |||||||
Consumer banking | 113 | 105 | 8 | 257 | 201 | 56 | ||||||||||||||||||
Commercial banking(2) | (256 | ) | 57 | (313 | ) | (343 | ) | 106 | (449 | ) | ||||||||||||||
Other(3) | 188 | — | 188 | 263 | — | 263 | ||||||||||||||||||
Total loans, including loans held for sale | (563 | ) | 83 | (646 | ) | (389 | ) | 637 | (1,026 | ) | ||||||||||||||
Investment securities | (147 | ) | (10 | ) | (137 | ) | (272 | ) | (50 | ) | (222 | ) | ||||||||||||
Cash equivalents and other interest-earning assets | (48 | ) | 12 | (60 | ) | (80 | ) | 31 | (111 | ) | ||||||||||||||
Total interest income | (758 | ) | 85 | (843 | ) | (741 | ) | 618 | (1,359 | ) | ||||||||||||||
Interest expense: | ||||||||||||||||||||||||
Interest-bearing deposits | (259 | ) | 72 | (331 | ) | (345 | ) | 118 | (463 | ) | ||||||||||||||
Securitized debt obligations | (83 | ) | (13 | ) | (70 | ) | (127 | ) | (18 | ) | (109 | ) | ||||||||||||
Senior and subordinated notes | (130 | ) | 4 | (134 | ) | (205 | ) | 8 | (213 | ) | ||||||||||||||
Other borrowings and liabilities | — | 4 | (4 | ) | (12 | ) | 1 | (13 | ) | |||||||||||||||
Total interest expense | (472 | ) | 67 | (539 | ) | (689 | ) | 109 | (798 | ) | ||||||||||||||
Net interest income | $ | (286 | ) | $ | 18 | $ | (304 | ) | $ | (52 | ) | $ | 509 | $ | (561 | ) |
(1) | We calculate the change in interest income and interest expense separately for each item. The portion of interest income or interest expense attributable to both volume and rate is allocated proportionately when the calculation results in a positive value. When the portion of interest income or interest expense attributable to both volume and rate results in a negative value, the total amount is allocated to volume or rate, depending on which amount is positive. |
(2) | Some of our commercial loans generate tax-exempt income. Accordingly, we present our Commercial Banking interest income and yields on a taxable- equivalent basis, calculated using the federal statutory rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
(3) | Interest income/expense of Other represents the impact of hedge accounting of our loan portfolios and the offsetting reduction of the taxable-equivalent adjustments of our commercial loans as described above. |
16 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Interchange fees, net | $ | 672 | $ | 820 | $ | 1,424 | $ | 1,578 | ||||||||
Service charges and other customer-related fees | 258 | 352 | 585 | 705 | ||||||||||||
Net securities gains | — | 15 | — | 39 | ||||||||||||
Other non-interest income:(1) | ||||||||||||||||
Mortgage banking revenue | 38 | 33 | 106 | 79 | ||||||||||||
Treasury and other investment income | 63 | 47 | 56 | 103 | ||||||||||||
Other | 65 | 111 | 149 | 166 | ||||||||||||
Total other non-interest income | 166 | 191 | 311 | 348 | ||||||||||||
Total non-interest income | $ | 1,096 | $ | 1,378 | $ | 2,320 | $ | 2,670 |
(1) | Includes gains of $44 million and losses of $15 million on deferred compensation plan investments for the second quarter and first six months of 2020, respectively, and gains of $10 million and $38 million for the second quarter and first six months of 2019, respectively. |
• | lower net interchange fees due to lower purchase volume in our Domestic Card business; and |
• | lower service charges and other customer-related fees due to decreased customer activity. |
17 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Salaries and associate benefits(1) | $ | 1,704 | $ | 1,558 | $ | 3,331 | $ | 3,131 | ||||||||
Occupancy and equipment | 523 | 521 | 1,040 | 1,014 | ||||||||||||
Marketing | 273 | 546 | 764 | 1,063 | ||||||||||||
Professional services | 304 | 314 | 591 | 605 | ||||||||||||
Communications and data processing | 308 | 329 | 610 | 632 | ||||||||||||
Amortization of intangibles | 16 | 29 | 38 | 59 | ||||||||||||
Other non-interest expense: | ||||||||||||||||
Bankcard, regulatory and other fee assessments | 66 | 86 | 141 | 173 | ||||||||||||
Collections | 76 | 96 | 181 | 191 | ||||||||||||
Fraud losses | 71 | 97 | 150 | 200 | ||||||||||||
Other(2) | 429 | 203 | 653 | 382 | ||||||||||||
Total other non-interest expense | 642 | 482 | 1,125 | 946 | ||||||||||||
Total non-interest expense | $ | 3,770 | $ | 3,779 | $ | 7,499 | $ | 7,450 |
(1) | Includes expense of $44 million and benefit of $15 million related to our deferred compensation plan investments for the second quarter and first six months of 2020, respectively, and expense of $10 million and $38 million related to our deferred compensation plan investments for the second quarter and first six months of 2019, respectively. These amounts have corresponding offsets in other non-interest income. |
(2) | Includes legal reserve builds of $265 million and $310 million, and net Cybersecurity Incident expenses of $11 million and $15 million in the second quarter and first six months of 2020, respectively. |
18 | Capital One Financial Corporation (COF) |
CONSOLIDATED BALANCE SHEETS ANALYSIS |
June 30, 2020 | December 31, 2019 | |||||||||||||||
(Dollars in millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||
Investment securities available for sale: | ||||||||||||||||
U.S. Treasury securities | $ | 4,353 | $ | 4,362 | $ | 4,122 | $ | 4,124 | ||||||||
RMBS: | ||||||||||||||||
Agency | 68,223 | 70,687 | 62,003 | 62,839 | ||||||||||||
Non-agency | 1,144 | 1,327 | 1,235 | 1,499 | ||||||||||||
Total RMBS | 69,367 | 72,014 | 63,238 | 64,338 | ||||||||||||
Agency CMBS | 9,940 | 10,400 | 9,303 | 9,426 | ||||||||||||
Other securities(1) | 1,082 | 1,083 | 1,321 | 1,325 | ||||||||||||
Total investment securities available for sale | $ | 84,742 | $ | 87,859 | $ | 77,984 | $ | 79,213 |
(1) | Includes primarily supranational bonds, foreign government bonds and other asset-backed securities. |
19 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||
(Dollars in millions) | Loans | Allowance | Net Loans | Loans | Allowance | Net Loans | ||||||||||||||||||
Credit Card | $ | 107,310 | $ | 12,091 | $ | 95,219 | $ | 128,236 | $ | 5,395 | $ | 122,841 | ||||||||||||
Consumer Banking | 66,712 | 2,838 | 63,874 | 63,065 | 1,038 | 62,027 | ||||||||||||||||||
Commercial Banking | 77,490 | 1,903 | 75,587 | 74,508 | 775 | 73,733 | ||||||||||||||||||
Total | $ | 251,512 | $ | 16,832 | $ | 234,680 | $ | 265,809 | $ | 7,208 | $ | 258,601 |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | % of Total | Amount | % of Total | ||||||||||
Deposits: | ||||||||||||||
Consumer Banking | $ | 246,804 | 71 | % | $ | 213,099 | 67 | % | ||||||
Commercial Banking | 35,669 | 10 | 32,134 | 10 | ||||||||||
Other(1) | 21,765 | 6 | 17,464 | 5 | ||||||||||
Total deposits | 304,238 | 87 | 262,697 | 82 | ||||||||||
Securitized debt obligations | 15,761 | 5 | 17,808 | 6 | ||||||||||
Other debt | 29,139 | 8 | 37,889 | 12 | ||||||||||
Total funding sources | $ | 349,138 | 100 | % | $ | 318,394 | 100 | % |
(1) | Includes brokered deposits of $20.7 billion and $16.7 billion as of June 30, 2020 and December 31, 2019, respectively. |
20 | Capital One Financial Corporation (COF) |
OFF-BALANCE SHEET ARRANGEMENTS |
BUSINESS SEGMENT FINANCIAL PERFORMANCE |
21 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | ||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||
Total Net Revenue (Loss)(1) | Net Loss(2) | Total Net Revenue (Loss)(1) | Net Income (Loss)(2) | |||||||||||||||||||||||||
(Dollars in millions) | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||
Credit Card | $ | 4,214 | 64 | % | $ | (533 | ) | 58 | % | $ | 4,569 | 64 | % | $ | 938 | 58 | % | |||||||||||
Consumer Banking | 1,762 | 27 | (114 | ) | 12 | 1,875 | 26 | 543 | 33 | |||||||||||||||||||
Commercial Banking(3) | 698 | 11 | (118 | ) | 13 | 714 | 10 | 157 | 10 | |||||||||||||||||||
Other(3) | (118 | ) | (2 | ) | (152 | ) | 17 | (34 | ) | — | (22 | ) | (1 | ) | ||||||||||||||
Total | $ | 6,556 | 100 | % | $ | (917 | ) | 100 | % | $ | 7,124 | 100 | % | $ | 1,616 | 100 | % |
Six Months Ended June 30, | ||||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||||
Total Net Revenue(1) | Net Loss(2) | Total Net Revenue (Loss)(1) | Net Income(2) | |||||||||||||||||||||||||
(Dollars in millions) | Amount | % of Total | Amount | % of Total | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||
Credit Card | $ | 8,827 | 64 | % | $ | (1,524 | ) | 68 | % | $ | 9,109 | 64 | % | $ | 1,689 | 56 | % | |||||||||||
Consumer Banking | 3,545 | 26 | (166 | ) | 7 | 3,714 | 26 | 1,011 | 33 | |||||||||||||||||||
Commercial Banking(3) | 1,427 | 10 | (529 | ) | 23 | 1,390 | 10 | 303 | 10 | |||||||||||||||||||
Other(3) | 6 | — | (38 | ) | 2 | (6 | ) | — | 23 | 1 | ||||||||||||||||||
Total | $ | 13,805 | 100 | % | $ | (2,257 | ) | 100 | % | $ | 14,207 | 100 | % | $ | 3,026 | 100 | % |
(1) | Total net revenue (loss) consists of net interest income and non-interest income. |
(2) | Net income (loss) for our business segments and the Other category is based on income (loss) from continuing operations, net of tax. |
(3) | Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
22 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected income statement data: | ||||||||||||||||||||||
Net interest income | $ | 3,369 | $ | 3,531 | (5 | )% | $ | 7,071 | $ | 7,121 | (1 | )% | ||||||||||
Non-interest income | 845 | 1,038 | (19 | ) | 1,756 | 1,988 | (12 | ) | ||||||||||||||
Total net revenue(1) | 4,214 | 4,569 | (8 | ) | 8,827 | 9,109 | (3 | ) | ||||||||||||||
Provision for credit losses | 2,944 | 1,095 | 169 | 6,646 | 2,484 | 168 | ||||||||||||||||
Non-interest expense | 1,969 | 2,253 | (13 | ) | 4,177 | 4,424 | (6 | ) | ||||||||||||||
Income (loss) from continuing operations before income taxes | (699 | ) | 1,221 | ** | (1,996 | ) | 2,201 | ** | ||||||||||||||
Income tax provision (benefit) | (166 | ) | 283 | ** | (472 | ) | 512 | ** | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (533 | ) | $ | 938 | ** | $ | (1,524 | ) | $ | 1,689 | ** | ||||||||||
Selected performance metrics: | ||||||||||||||||||||||
Average loans held for investment(2) | $ | 108,748 | $ | 110,798 | (2 | ) | $ | 115,762 | $ | 111,125 | 4 | |||||||||||
Average yield on loans held for investment(3) | 13.72 | % | 15.66 | % | (194 | )bps | 14.11 | % | 15.72 | % | (161 | )bps | ||||||||||
Total net revenue margin(4) | 15.50 | 16.50 | (100 | ) | 15.25 | 16.39 | (114 | ) | ||||||||||||||
Net charge-offs | $ | 1,211 | $ | 1,320 | (8 | )% | $ | 2,647 | $ | 2,684 | (1 | )% | ||||||||||
Net charge-off rate | 4.46 | % | 4.76 | % | (30 | )bps | 4.57 | % | 4.83 | % | (26 | )bps | ||||||||||
Purchase volume | $ | 90,149 | $ | 106,903 | (16 | )% | $ | 190,069 | $ | 200,100 | (5 | )% | ||||||||||
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | Change | |||||||||||||||||||
Selected period-end data: | ||||||||||||||||||||||
Loans held for investment(2) | $ | 107,310 | $ | 128,236 | (16 | )% | ||||||||||||||||
30+ day performing delinquency rate | 2.74 | % | 3.89 | % | (115 | )bps | ||||||||||||||||
30+ day delinquency rate | 2.75 | 3.91 | (116 | ) | ||||||||||||||||||
Nonperforming loan rate(5) | 0.02 | 0.02 | — | |||||||||||||||||||
Allowance for credit losses(2) | $ | 12,091 | $ | 5,395 | 124 | % | ||||||||||||||||
Allowance coverage ratio | 11.27 | % | 4.21 | % | 7 |
(1) | We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge-off uncollectible amounts. Total net revenue was reduced by $318 million and $707 million in the second quarter and first six months of 2020 for finance charges and fees charged-off as uncollectible and by $318 million and $694 million in the second quarter and first six months of 2019 for the estimated uncollectible amount of credit card finance charges and fees and related losses. |
(2) | Period-end loans held for investment and average loans held for investment include billed finance charges and fees. Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment. |
(3) | Average yield on loans held for investment is calculated by dividing interest income for the period by average loans held for investment during the period. Interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment. |
(4) | Total net revenue margin is calculated by dividing annualized total net revenue for the period by average loans held for investment during the period. Interest income also includes interest income on loans held for sale. |
23 | Capital One Financial Corporation (COF) |
(5) | Within our credit card loan portfolio, only certain loans in our international card businesses are classified as nonperforming. See “MD&A—Nonperforming Loans and Other Nonperforming Assets” for additional information. |
** | Not meaningful |
• | Net Interest Income: Net interest income decreased by $162 million to $3.4 billion in the second quarter of 2020 primarily driven by lower margin and lower average loan balance from a decline in purchase volume and elevated payment from the impact of the government stimulus. Net interest income decreased by $50 million to $7.1 billion in the first six months of 2020 primarily driven by lower margin, partially offset by growth in our domestic credit card loan portfolio, including the acquired Walmart portfolio. |
• | Non-Interest Income: Non-interest income decreased by $193 million to $845 million in the second quarter of 2020 and decreased by $232 million to $1.8 billion in the first six months of 2020 primarily driven by lower net interchange fees due to a decline in purchase volume. |
• | Provision for Credit Losses: Provision for credit losses increased by $1.8 billion to $2.9 billion in the second quarter of 2020 and increased by $4.2 billion to $6.6 billion in the first six months of 2020 driven by expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic. |
• | Non-Interest Expense: Non-interest expense decreased by $284 million to $2.0 billion in the second quarter of 2020 and decreased by $247 million to $4.2 billion in the first six months of 2020 driven by our decision to decrease marketing spend in the current economic environment. |
• | Loans Held for Investment: |
◦ | Period-end loans held for investment decreased by $20.9 billion to $107.3 billion as of June 30, 2020 from December 31, 2019 and average loans held for investment decreased by $2.1 billion to $108.7 billion in the second quarter of 2020 compared to the second quarter of 2019 due to a decline in purchase volume and elevated payments driven by the impact of the government stimulus. |
◦ | Average loans held for investment increased by $4.6 billion to $115.8 billion in the first six months of 2020 compared to the first six months of 2019 primarily due to growth in our domestic credit card loan portfolio, including the acquired Walmart portfolio, partially offset by a decline in purchase volume and elevated payments driven by the impact of the government stimulus. |
• | Net Charge-Off and Delinquency Metrics: The net charge-off rate decreased by 30 basis points to 4.46% in the second quarter of 2020 compared to the second quarter of 2019 and decreased by 26 basis points to 4.57% in the first six months of 2020 compared to the first six months of 2019 primarily driven by consumer payment behavior, the impact of the government stimulus and the acquired Walmart portfolio. |
24 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected income statement data: | ||||||||||||||||||||||
Net interest income | $ | 3,094 | $ | 3,220 | (4 | )% | $ | 6,475 | $ | 6,493 | — | |||||||||||
Non-interest income | 795 | 971 | (18 | ) | 1,637 | 1,844 | (11 | )% | ||||||||||||||
Total net revenue(1)(2) | 3,889 | 4,191 | (7 | ) | 8,112 | 8,337 | (3 | ) | ||||||||||||||
Provision for credit losses | 2,906 | 1,024 | 184 | 6,370 | 2,315 | 175 | ||||||||||||||||
Non-interest expense | 1,776 | 2,034 | (13 | ) | 3,760 | 3,983 | (6 | ) | ||||||||||||||
Income (loss) from continuing operations before income taxes | (793 | ) | 1,133 | ** | (2,018 | ) | 2,039 | ** | ||||||||||||||
Income tax provision (benefit) | (188 | ) | 264 | ** | (478 | ) | 475 | ** | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (605 | ) | $ | 869 | ** | $ | (1,540 | ) | $ | 1,564 | ** | ||||||||||
Selected performance metrics: | ||||||||||||||||||||||
Average loans held for investment(3) | $ | 100,996 | $ | 101,930 | (1 | ) | $ | 107,354 | $ | 102,296 | 5 | |||||||||||
Average yield on loans held for investment(4) | 13.52 | % | 15.60 | % | (208 | )bps | 13.93 | % | 15.65 | % | (172 | )bps | ||||||||||
Total net revenue margin(5) | 15.40 | 16.45 | (105 | ) | 15.11 | 16.30 | (119 | ) | ||||||||||||||
Net charge-offs | $ | 1,143 | $ | 1,240 | (8 | )% | $ | 2,474 | $ | 2,534 | (2 | )% | ||||||||||
Net charge-off rate | 4.53 | % | 4.86 | % | (33 | )bps | 4.61 | % | 4.95 | % | (34 | )bps | ||||||||||
Purchase volume | $ | 82,860 | $ | 98,052 | (15 | )% | $ | 175,108 | $ | 183,790 | (5 | )% | ||||||||||
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | Change | |||||||||||||||||||
Selected period-end data: | ||||||||||||||||||||||
Loans held for investment(3) | $ | 99,390 | $ | 118,606 | (16 | )% | ||||||||||||||||
30+ day performing delinquency rate | 2.74 | % | 3.93 | % | (119 | )bps | ||||||||||||||||
Allowance for credit losses | $ | 11,569 | $ | 4,997 | 132 | % | ||||||||||||||||
Allowance coverage ratio | 11.64 | % | 4.21 | % | 7 |
(1) | We recognize finance charges and fee income on open-ended loans in accordance with the contractual provisions of the credit arrangements and charge-off uncollectible amounts. Uncollectible finance charges and fees are reflected as a reduction in total net revenue. |
(2) | We pay bounties to third parties for new accounts, which are considered loan origination costs and therefore deferred and amortized as an offset to revenue. Total net revenue was reduced by $130 million and $273 million in the second quarter and first six months of 2020 and by $111 million and $206 million in the second quarter and first six months of 2019 due to the amortization of these bounties. As of June 30, 2020, approximately $180 million of deferred bounty payments remained to be amortized in future periods. |
(3) | Period-end loans held for investment and average loans held for investment include billed finance charges and fees. Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment. |
(4) | Average yield on loans held for investment is calculated by dividing annualized interest income for the period by average loans held for investment during the period. Interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment. |
(5) | Total net revenue margin is calculated by dividing annualized total net revenue for the period by average loans held for investment during the period. |
** | Not meaningful |
25 | Capital One Financial Corporation (COF) |
• | higher provision for credit losses driven by expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic; |
• | lower net interest income in the second quarter of 2020 due to lower margin and lower average loan balance from a decline in purchase volume and elevated payment from the impact of the government stimulus, and lower net interest income in the first six months of 2020 due to lower margin, partially offset by growth in our domestic credit card loan portfolio, including the acquired Walmart portfolio; and |
• | lower non-interest income primarily driven by lower net interchange fees due to a decline in purchase volume. |
26 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected income statement data: | ||||||||||||||||||||||
Net interest income | $ | 1,665 | $ | 1,709 | (3 | )% | $ | 3,322 | $ | 3,388 | (2 | )% | ||||||||||
Non-interest income | 97 | 166 | (42 | ) | 223 | 326 | (32 | ) | ||||||||||||||
Total net revenue | 1,762 | 1,875 | (6 | ) | 3,545 | 3,714 | (5 | ) | ||||||||||||||
Provision for credit losses | 876 | 165 | ** | 1,736 | 400 | ** | ||||||||||||||||
Non-interest expense | 1,036 | 1,002 | 3 | 2,027 | 1,996 | 2 | ||||||||||||||||
Income (loss) from continuing operations before income taxes | (150 | ) | 708 | ** | (218 | ) | 1,318 | ** | ||||||||||||||
Income tax provision (benefit) | (36 | ) | 165 | ** | (52 | ) | 307 | ** | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (114 | ) | $ | 543 | ** | $ | (166 | ) | $ | 1,011 | ** | ||||||||||
Selected performance metrics: | ||||||||||||||||||||||
Average loans held for investment: | ||||||||||||||||||||||
Auto | $ | 61,798 | $ | 57,070 | 8 | $ | 61,401 | $ | 56,654 | 8 | ||||||||||||
Retail banking | 3,053 | 2,788 | 10 | 2,860 | 2,809 | 2 | ||||||||||||||||
Total consumer banking | $ | 64,851 | $ | 59,858 | 8 | $ | 64,261 | $ | 59,463 | 8 | ||||||||||||
Average yield on loans held for investment(1) | 8.41 | % | 8.36 | % | 5 | bps | 8.44 | % | 8.25 | % | 19 | bps | ||||||||||
Average deposits | $ | 232,293 | $ | 204,164 | 14 | % | $ | 223,682 | $ | 202,627 | 10 | % | ||||||||||
Average deposits interest rate | 0.89 | % | 1.26 | % | (37 | )bps | 0.97 | % | 1.22 | % | (25 | )bps | ||||||||||
Net charge-offs | $ | 192 | $ | 172 | 12 | % | $ | 438 | $ | 393 | 11 | % | ||||||||||
Net charge-off rate | 1.19 | % | 1.15 | % | 4 | bps | 1.36 | % | 1.32 | % | 4 | bps | ||||||||||
Auto loan originations | $ | 8,292 | $ | 7,327 | 13 | % | $ | 15,931 | $ | 13,549 | 18 | % | ||||||||||
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | Change | |||||||||||||||||||
Selected period-end data: | ||||||||||||||||||||||
Loans held for investment: | ||||||||||||||||||||||
Auto | $ | 63,319 | $ | 60,362 | 5 | % | ||||||||||||||||
Retail banking | 3,393 | 2,703 | 26 | |||||||||||||||||||
Total consumer banking | $ | 66,712 | $ | 63,065 | 6 | |||||||||||||||||
30+ day performing delinquency rate | 3.16 | % | 6.63 | % | (347 | )bps | ||||||||||||||||
30+ day delinquency rate | 3.48 | 7.34 | (386 | ) | ||||||||||||||||||
Nonperforming loan rate | 0.43 | 0.81 | (38 | ) | ||||||||||||||||||
Nonperforming asset rate(2) | 0.46 | 0.91 | (45 | ) | ||||||||||||||||||
Allowance for credit losses | $ | 2,838 | $ | 1,038 | 173 | % | ||||||||||||||||
Allowance coverage ratio | 4.25 | % | 1.65 | % | 260 | bps | ||||||||||||||||
Deposits | $ | 246,804 | $ | 213,099 | 16 | % |
(1) | Average yield on loans held for investment is calculated by dividing annualized interest income for the period by average loans held for investment during the period. Interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment. |
(2) | Nonperforming assets primarily consist of nonperforming loans and repossessed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment and repossessed assets. |
** | Not meaningful. |
27 | Capital One Financial Corporation (COF) |
• | Net Interest Income: Net interest income decreased by $44 million to $1.7 billion in the second quarter of 2020 and decreased by $66 million to $3.3 billion in the first six months of 2020 primarily driven by lower margins in our Retail Banking business due to a decline in interest rates, partially offset by growth in our auto loan portfolio, higher deposit volumes, and decrease in deposit rate paid. |
• | Non-Interest Income: Non-interest income decreased by $69 million to $97 million in the second quarter of 2020 and decreased by $103 million to $223 million in the first six months of 2020 primarily driven by lower service charges and fees on deposit accounts due to lower transaction volume. |
• | Provision for Credit Losses: Provision for credit losses increased by $711 million to $876 million in the second quarter of 2020 and increased by $1.3 billion to $1.7 billion in the first six months of 2020 driven by expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic. |
• | Non-Interest Expense: Non-interest expense increased by $34 million to $1.0 billion in the second quarter of 2020 and increased by $31 million to $2.0 billion in the first six months of 2020 primarily driven by COVID-19 related expenses, including increased pay for certain associates. |
• | Loans Held for Investment: Period-end loans held for investment increased by $3.6 billion to $66.7 billion as of June 30, 2020 from December 31, 2019 and average loans held for investment increased by $5.0 billion to $64.9 billion in the second quarter of 2020 compared to the second quarter of 2019 and increased by $4.8 billion to $64.3 billion in the first six months of 2020 compared to the first six months of 2019 primarily due to growth in our auto loan portfolio. |
• | Deposits: Period-end deposits increased by $33.7 billion to $246.8 billion as of June 30, 2020 from December 31, 2019 primarily driven by deposit growth from increased consumer savings including the impact of government stimulus. |
• | Net Charge-Off and Delinquency Metrics: The net charge-off rate increased by 4 basis points to 1.19% in the second quarter of 2020 compared to the second quarter of 2019 and to 1.36% in the first six months of 2020 compared to the first six months of 2019 primarily driven by our decision to temporarily pause involuntary repossessions and disruptions in vehicle auction markets, partially offset by the impact of short-term payment extensions offered to affected auto borrowers in response to the COVID-19 pandemic. |
• | The 30+ day delinquency rate decreased by 386 basis points to 3.48% as of June 30, 2020 from December 31, 2019 driven by lower auto delinquency inventories due to short-term payment extensions offered to affected auto borrowers in response to the COVID-19 pandemic, as well as the impact of government stimulus. |
28 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions, except as noted) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected income statement data: | ||||||||||||||||||||||
Net interest income | $ | 518 | $ | 514 | 1 | % | $ | 1,009 | $ | 1,003 | 1 | % | ||||||||||
Non-interest income | 180 | 200 | (10 | ) | 418 | 387 | 8 | |||||||||||||||
Total net revenue(1) | 698 | 714 | (2 | ) | 1,427 | 1,390 | 3 | |||||||||||||||
Provision for credit losses(2) | 427 | 82 | ** | 1,283 | 151 | ** | ||||||||||||||||
Non-interest expense | 425 | 427 | — | 837 | 844 | (1 | ) | |||||||||||||||
Income (loss) from continuing operations before income taxes | (154 | ) | 205 | ** | (693 | ) | 395 | ** | ||||||||||||||
Income tax provision (benefit) | (36 | ) | 48 | ** | (164 | ) | 92 | ** | ||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (118 | ) | $ | 157 | ** | $ | (529 | ) | $ | 303 | ** | ||||||||||
Selected performance metrics: | ||||||||||||||||||||||
Average loans held for investment: | ||||||||||||||||||||||
Commercial and multifamily real estate | $ | 31,723 | $ | 29,514 | 7 | $ | 31,402 | $ | 29,276 | 7 | ||||||||||||
Commercial and industrial | 48,036 | 42,476 | 13 | 46,699 | 42,304 | 10 | ||||||||||||||||
Total commercial lending | 79,759 | 71,990 | 11 | 78,101 | 71,580 | 9 | ||||||||||||||||
Small-ticket commercial real estate | — | 7 | ** | — | 139 | ** | ||||||||||||||||
Total commercial banking | $ | 79,759 | $ | 71,997 | 11 | $ | 78,101 | $ | 71,719 | 9 | ||||||||||||
Average yield on loans held for investment(1)(3) | 3.00 | % | 4.75 | % | (175 | )bps | 3.43 | % | 4.68 | % | (125 | )bps | ||||||||||
Average deposits | $ | 34,635 | $ | 31,364 | 10 | % | $ | 33,437 | $ | 31,092 | 8 | % | ||||||||||
Average deposits interest rate | 0.30 | % | 1.28 | % | (98 | )bps | 0.58 | % | 1.19 | % | (61 | )bps | ||||||||||
Net charge-offs | $ | 102 | $ | 16 | ** | $ | 211 | $ | 30 | ** | ||||||||||||
Net charge-off rate | 0.51 | % | 0.09 | % | 42 | bps | 0.54 | % | 0.08 | % | 46 | bps | ||||||||||
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | Change | |||||||||||||||||||
Selected period-end data: | ||||||||||||||||||||||
Loans held for investment: | ||||||||||||||||||||||
Commercial and multifamily real estate | $ | 30,953 | $ | 30,245 | 2 | % | ||||||||||||||||
Commercial and industrial | 46,537 | 44,263 | 5 | |||||||||||||||||||
Total commercial banking | $ | 77,490 | $ | 74,508 | 4 | |||||||||||||||||
Nonperforming loan rate | 0.85 | % | 0.60 | % | 25 | bps | ||||||||||||||||
Nonperforming asset rate(4) | 0.85 | 0.60 | 25 | |||||||||||||||||||
Allowance for credit losses(2) | $ | 1,903 | $ | 775 | 146 | % | ||||||||||||||||
Allowance coverage ratio | 2.46 | % | 1.04 | % | 142 | bps | ||||||||||||||||
Deposits | $ | 35,669 | $ | 32,134 | 11 | % | ||||||||||||||||
Loans serviced for others | 40,582 | 38,481 | 5 |
(1) | Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
(2) | The provision for losses on unfunded lending commitments is included in the provision for credit losses in our consolidated statements of income and the related reserve is included in other liabilities on our consolidated balance sheets. Our reserve for unfunded lending commitments totaled $218 million and $130 million as of June 30, 2020 and December 31, 2019, respectively. |
(3) | Average yield on loans held for investment is calculated by dividing annualized interest income for the period by average loans held for investment during the period. Interest income excludes various allocations including funds transfer pricing that assigns certain balance sheet assets, deposits and other liabilities and their related revenue and expenses attributable to each business segment. |
(4) | Nonperforming assets consist of nonperforming loans and other foreclosed assets. The total nonperforming asset rate is calculated based on total nonperforming assets divided by the combined period-end total loans held for investment and other foreclosed assets. |
29 | Capital One Financial Corporation (COF) |
** | Not meaningful. |
• | Net Interest Income: Net interest income remained substantially flat at $518 million in the second quarter of 2020 and $1.0 billion in the first six months of 2020 as higher average loan and deposit balances were offset by lower loan and deposit margins. |
• | Non-Interest Income: Non-interest income decreased by $20 million to $180 million in the second quarter of 2020 primarily driven by the absence of certain transaction gains. Non-interest income increased by $31 million to $418 million in the first six months of 2020 primarily driven by higher revenue from our capital markets and agency businesses. |
• | Provision for Credit Losses: Provision for credit losses increased by $345 million to $427 million in the second quarter of 2020 driven by expectations of continued economic worsening resulting from COVID-19. Provision for credit losses increased by $1.1 billion to $1.3 billion in the first six months of 2020 driven by expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic as well as credit deterioration in our commercial energy loan portfolio. |
• | Non-Interest Expense: Non-interest expense remained substantially flat at $425 million in the second quarter of 2020 and $837 million in the first six months of 2020. |
• | Loans Held for Investment: Period-end loans held for investment increased by $3.0 billion to $77.5 billion as of June 30, 2020 from December 31, 2019, and average loans held for investment increased by $7.8 billion to $79.8 billion in the second quarter of 2020 compared to the second quarter of 2019 and increased by $6.4 billion to $78.1 billion in the first six months of 2020 compared to the first six months of 2019 driven by growth across our commercial loan portfolio. |
• | Deposits: Period-end deposits increased by $3.5 billion to $35.7 billion as of June 30, 2020 from December 31, 2019 primarily driven by new business growth and elevated client liquidity needs. |
• | Net Charge-Off and Nonperforming Metrics: The net charge-off rate increased by 42 basis points to 0.51% in the second quarter of 2020 and increased by 46 basis points to 0.54% in the first six months of 2020 primarily driven by elevated charge-offs in our commercial energy loan portfolio. |
• | unallocated corporate revenue and expenses that do not directly support the operations of the business segments or for which the business segments are not considered financially accountable in evaluating their performance, such as certain restructuring charges; |
• | offsets related to certain line-item reclassifications; |
• | residual tax expense or benefit to arrive at the consolidated effective tax rate that is not assessed to our primary business segments; and |
• | foreign exchange-rate fluctuations on foreign currency-denominated balances. |
30 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||||||||||
Selected income statement data: | ||||||||||||||||||||||
Net interest income (loss) | $ | (92 | ) | $ | (8 | ) | ** | $ | 83 | $ | 25 | ** | ||||||||||
Non-interest loss | (26 | ) | (26 | ) | — | (77 | ) | (31 | ) | 148 | % | |||||||||||
Total net revenue (loss)(1) | (118 | ) | (34 | ) | ** | 6 | (6 | ) | ** | |||||||||||||
Provision (benefit) for credit losses | (1 | ) | — | ** | 4 | — | ** | |||||||||||||||
Non-interest expense(2) | 340 | 97 | ** | 458 | 186 | 146 | ||||||||||||||||
Loss from continuing operations before income taxes | (457 | ) | (131 | ) | ** | (456 | ) | (192 | ) | 138 | ||||||||||||
Income tax benefit | (305 | ) | (109 | ) | 180 | % | (418 | ) | (215 | ) | 94 | |||||||||||
Income (loss) from continuing operations, net of tax | $ | (152 | ) | $ | (22 | ) | ** | $ | (38 | ) | $ | 23 | ** |
(1) | Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
(2) | Includes legal reserve builds of $265 million and $310 million, and net Cybersecurity Incident expenses of $11 million and $15 million in the second quarter and first six months of 2020, respectively. |
** | Not meaningful. |
CRITICAL ACCOUNTING POLICIES AND ESTIMATES |
• | Loan loss reserves |
• | Asset impairment |
• | Fair value of financial instruments |
• | Customer rewards reserve |
31 | Capital One Financial Corporation (COF) |
32 | Capital One Financial Corporation (COF) |
ACCOUNTING CHANGES AND DEVELOPMENTS |
Standard | Guidance | Adoption Timing and Financial Statement Impacts | ||
Reference Rate Reform ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effect of Reference Rate Reform on Financial Reporting Issued March 2020 | The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. | This ASU is effective from March 12, 2020 through December 31, 2022 with early adoption as of January 1, 2020 permitted. We are evaluating the expected impact of and our operational readiness for this ASU. | ||
Income Tax Accounting Simplification ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Issued December 2019 | Simplifies various aspects of the guidance on accounting for income taxes. | This ASU is effective January 1, 2021 with early adoption permitted, using the retrospective, modified retrospective and prospective methods of adoption. We are currently evaluating the impact of adopting this standard. |
33 | Capital One Financial Corporation (COF) |
CAPITAL MANAGEMENT |
34 | Capital One Financial Corporation (COF) |
35 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||
Ratio | Minimum Capital Adequacy | Well- Capitalized | Ratio | Minimum Capital Adequacy | Well- Capitalized | |||||||||||||
Capital One Financial Corp: | ||||||||||||||||||
Common equity Tier 1 capital(3) | 12.4 | % | 4.5 | % | N/A | 12.2 | % | 4.5 | % | N/A | ||||||||
Tier 1 capital(4) | 14.2 | 6.0 | 6.0 | % | 13.7 | 6.0 | 6.0 | % | ||||||||||
Total capital(5) | 16.7 | 8.0 | 10.0 | 16.1 | 8.0 | 10.0 | ||||||||||||
Tier 1 leverage(6) | 10.3 | 4.0 | N/A | 11.7 | 4.0 | N/A | ||||||||||||
Supplementary leverage(7)(8) | 9.7 | 3.0 | N/A | 9.9 | 3.0 | N/A | ||||||||||||
COBNA: | ||||||||||||||||||
Common equity Tier 1 capital(3) | 19.2 | 4.5 | 6.5 | 16.1 | 4.5 | 6.5 | ||||||||||||
Tier 1 capital(4) | 19.2 | 6.0 | 8.0 | 16.1 | 6.0 | 8.0 | ||||||||||||
Total capital(5) | 21.1 | 8.0 | 10.0 | 18.1 | 8.0 | 10.0 | ||||||||||||
Tier 1 leverage(6) | 15.3 | 4.0 | 5.0 | 14.8 | 4.0 | 5.0 | ||||||||||||
Supplementary leverage(7) | 12.3 | 3.0 | N/A | 12.1 | 3.0 | N/A | ||||||||||||
CONA: | ||||||||||||||||||
Common equity Tier 1 capital(3) | 11.8 | 4.5 | 6.5 | 13.4 | 4.5 | 6.5 | ||||||||||||
Tier 1 capital(4) | 11.8 | 6.0 | 8.0 | 13.4 | 6.0 | 8.0 | ||||||||||||
Total capital(5) | 13.1 | 8.0 | 10.0 | 14.5 | 8.0 | 10.0 | ||||||||||||
Tier 1 leverage(6) | 7.3 | 4.0 | 5.0 | 9.2 | 4.0 | 5.0 | ||||||||||||
Supplementary leverage(7) | 6.6 | 3.0 | N/A | 8.2 | 3.0 | N/A |
(1) | Capital requirements that are not applicable are denoted by “N/A.” |
(2) | Ratios as of June 30, 2020 are preliminary. As we continue to validate our data, the calculations are subject to change until we file our June 30, 2020 Form FR Y-9C—Consolidated Financial Statements for Holding Companies and Call Reports. |
(3) | Common equity Tier 1 capital ratio is a regulatory capital measure calculated based on common equity Tier 1 capital divided by risk-weighted assets. |
(4) | Tier 1 capital ratio is a regulatory capital measure calculated based on Tier 1 capital divided by risk-weighted assets. |
(5) | Total capital ratio is a regulatory capital measure calculated based on total capital divided by risk-weighted assets. |
(6) | Tier 1 leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by adjusted average assets. |
(7) | Supplementary leverage ratio is a regulatory capital measure calculated based on Tier 1 capital divided by total leverage exposure. |
(8) | Supplementary leverage ratio for the Company as of June 30, 2020 excludes U.S. Treasury securities and deposits with the Federal Reserve Banks pursuant to an interim final rule issued by the Federal Reserve, see “MD&A—Supervision and Regulation” for more information. |
36 | Capital One Financial Corporation (COF) |
(Dollars in millions) | June 30, 2020 | December 31, 2019 | ||||||
Regulatory Capital Under Basel III Standardized Approach | ||||||||
Common equity excluding AOCI | $ | 50,614 | $ | 52,001 | ||||
Adjustments: | ||||||||
AOCI, net of tax(1) | (145 | ) | 1,156 | |||||
Goodwill, net of related deferred tax liabilities | (14,449 | ) | (14,465 | ) | ||||
Intangible assets, net of related deferred tax liabilities | (135 | ) | (170 | ) | ||||
Other(1) | — | (360 | ) | |||||
Common equity Tier 1 capital | 35,885 | 38,162 | ||||||
Tier 1 capital instruments | 5,209 | 4,853 | ||||||
Tier 1 capital | 41,094 | 43,015 | ||||||
Tier 2 capital instruments | 3,676 | 3,377 | ||||||
Qualifying allowance for credit losses | 3,738 | 3,956 | ||||||
Tier 2 capital | 7,414 | 7,333 | ||||||
Total capital | $ | 48,508 | $ | 50,348 | ||||
Regulatory Capital Metrics | ||||||||
Risk-weighted assets | $ | 290,222 | $ | 313,155 | ||||
Adjusted average assets | 398,062 | 368,511 | ||||||
Total leverage exposure | 422,007 | 435,976 |
(1) | In the first quarter of 2020, we elected to exclude from our regulatory capital ratios certain components of AOCI as permitted under the Tailoring Rules. As such, we revised our presentation herein to only include those components of AOCI that impact our regulatory capital ratios. |
37 | Capital One Financial Corporation (COF) |
Series | Description | Issuance Date | Per Annum Dividend Rate | Dividend Frequency | 2020 | |||||||
Q2 | Q1 | |||||||||||
Series B(1) | 6.00% Non-Cumulative | August 20, 2012 | 6.00% | Quarterly | — | $15.00 | ||||||
Series E | Fixed-to-Floating Rate Non-Cumulative | May 14, 2015 | 5.55% through 5/31/2020; 3-mo. LIBOR+ 380 bps thereafter | Semi-Annually through 5/31/2020; Quarterly thereafter | $27.75 | — | ||||||
Series F | 6.20% Non-Cumulative | August 24, 2015 | 6.20 | Quarterly | 15.50 | 15.50 | ||||||
Series G | 5.20% Non-Cumulative | July 29, 2016 | 5.20 | Quarterly | 13.00 | 13.00 | ||||||
Series H | 6.00% Non-Cumulative | November 29, 2016 | 6.00 | Quarterly | 15.00 | 15.00 | ||||||
Series I | 5.00% Non-Cumulative | September 11, 2019 | 5.00 | Quarterly | 12.50 | 12.50 | ||||||
Series J | 4.80% Non-Cumulative | January 31, 2020 | 4.80 | Quarterly | 16.13 | — |
(1) | On March 2, 2020, we redeemed all outstanding shares of our preferred stock Series B. |
38 | Capital One Financial Corporation (COF) |
RISK MANAGEMENT |
Governance and Accountability | ||||||
Strategy and Risk Alignment | ||||||
Risk Identification | Assessment, Measurement and Response | Monitoring and Testing | Aggregation, Reporting and Escalation | |||
Capital and Liquidity Management (including Stress Testing) | ||||||
Risk Data and Enabling Technology | ||||||
Culture and Talent Management |
39 | Capital One Financial Corporation (COF) |
• | Compliance risk |
• | Credit risk |
• | Liquidity risk |
• | Market risk |
• | Operational risk |
• | Reputation risk |
• | Strategic risk |
CREDIT RISK PROFILE |
40 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Loans | % of Total | Loans | % of Total | ||||||||||
Credit Card: | ||||||||||||||
Domestic credit card | $ | 99,390 | 39.5 | % | $ | 118,606 | 44.6 | % | ||||||
International card businesses | 7,920 | 3.2 | 9,630 | 3.6 | ||||||||||
Total credit card | 107,310 | 42.7 | 128,236 | 48.2 | ||||||||||
Consumer Banking: | ||||||||||||||
Auto | 63,319 | 25.2 | 60,362 | 22.7 | ||||||||||
Retail banking(1) | 3,393 | 1.3 | 2,703 | 1.0 | ||||||||||
Total consumer banking | 66,712 | 26.5 | 63,065 | 23.7 | ||||||||||
Commercial Banking:(1) | ||||||||||||||
Commercial and multifamily real estate | 30,953 | 12.3 | 30,245 | 11.4 | ||||||||||
Commercial and industrial | 46,537 | 18.5 | 44,263 | 16.7 | ||||||||||
Total commercial banking | 77,490 | 30.8 | 74,508 | 28.1 | ||||||||||
Total loans held for investment | $ | 251,512 | 100.0 | % | $ | 265,809 | 100.0 | % |
(1) | Includes PPP loans of $931 million and $231 million in our retail and commercial loan portfolios, respectively, as of June 30, 2020. See “MD&A—Credit Risk Profile—COVID-19 Customer Assistance Programs and Loan Modifications” for more information. |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | % of Total | Amount | % of Total | ||||||||||
Domestic credit card: | ||||||||||||||
California | $ | 10,263 | 9.6 | % | $ | 12,538 | 9.8 | % | ||||||
Texas | 8,093 | 7.5 | 9,353 | 7.3 | ||||||||||
Florida | 6,867 | 6.4 | 8,093 | 6.3 | ||||||||||
New York | 6,475 | 6.0 | 7,941 | 6.2 | ||||||||||
Illinois | 4,284 | 4.0 | 5,195 | 4.1 | ||||||||||
Pennsylvania | 4,178 | 3.9 | 4,979 | 3.9 | ||||||||||
Ohio | 3,653 | 3.4 | 4,388 | 3.4 | ||||||||||
New Jersey | 3,216 | 3.0 | 3,915 | 3.1 | ||||||||||
Michigan | 3,133 | 2.9 | 3,811 | 3.0 | ||||||||||
Other | 49,228 | 45.9 | 58,393 | 45.4 | ||||||||||
Total domestic credit card | 99,390 | 92.6 | 118,606 | 92.5 | ||||||||||
International card businesses: | ||||||||||||||
Canada | 5,353 | 5.0 | 6,493 | 5.1 | ||||||||||
United Kingdom | 2,567 | 2.4 | 3,137 | 2.4 | ||||||||||
Total international card businesses | 7,920 | 7.4 | 9,630 | 7.5 | ||||||||||
Total credit card | $ | 107,310 | 100.0 | % | $ | 128,236 | 100.0 | % |
41 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | % of Total | Amount | % of Total | ||||||||||
Auto: | ||||||||||||||
Texas | $ | 8,054 | 12.1 | % | $ | 7,675 | 12.2 | % | ||||||
California | 7,242 | 10.9 | 6,918 | 11.0 | ||||||||||
Florida | 5,316 | 8.0 | 5,013 | 7.9 | ||||||||||
Georgia | 2,886 | 4.3 | 2,757 | 4.4 | ||||||||||
Ohio | 2,735 | 4.1 | 2,652 | 4.2 | ||||||||||
Pennsylvania | 2,420 | 3.6 | 2,334 | 3.7 | ||||||||||
Illinois | 2,314 | 3.5 | 2,239 | 3.6 | ||||||||||
North Carolina | 2,207 | 3.3 | 2,060 | 3.3 | ||||||||||
Other | 30,145 | 45.1 | 28,714 | 45.4 | ||||||||||
Total auto | 63,319 | 94.9 | 60,362 | 95.7 | ||||||||||
Retail banking: | ||||||||||||||
New York | 1,152 | 1.7 | 793 | 1.3 | ||||||||||
Louisiana | 714 | 1.1 | 708 | 1.1 | ||||||||||
Texas | 637 | 1.0 | 595 | 1.0 | ||||||||||
Maryland | 242 | 0.4 | 155 | 0.2 | ||||||||||
New Jersey | 230 | 0.3 | 194 | 0.3 | ||||||||||
Virginia | 196 | 0.3 | 125 | 0.2 | ||||||||||
Other | 222 | 0.3 | 133 | 0.2 | ||||||||||
Total retail banking | 3,393 | 5.1 | 2,703 | 4.3 | ||||||||||
Total consumer banking | $ | 66,712 | 100.0 | % | $ | 63,065 | 100.0 | % |
June 30, 2020 | |||||||||||||||||||||
(Dollars in millions) | Commercial and Multifamily Real Estate | % of Total | Commercial and Industrial | % of Total | Total Commercial Banking | % of Total | |||||||||||||||
Geographic concentration:(1) | |||||||||||||||||||||
Northeast | $ | 17,566 | 56.7 | % | $ | 8,478 | 18.2 | % | $ | 26,044 | 33.6 | % | |||||||||
Mid-Atlantic | 3,328 | 10.8 | 6,412 | 13.8 | 9,740 | 12.6 | |||||||||||||||
South | 3,786 | 12.2 | 16,413 | 35.3 | 20,199 | 26.0 | |||||||||||||||
Other | 6,273 | 20.3 | 15,234 | 32.7 | 21,507 | 27.8 | |||||||||||||||
Total | $ | 30,953 | 100.0 | % | $ | 46,537 | 100.0 | % | $ | 77,490 | 100.0 | % |
42 | Capital One Financial Corporation (COF) |
December 31, 2019 | |||||||||||||||||||||
(Dollars in millions) | Commercial and Multifamily Real Estate | % of Total | Commercial and Industrial | % of Total | Total Commercial Banking | % of Total | |||||||||||||||
Geographic concentration:(1) | |||||||||||||||||||||
Northeast | $ | 17,139 | 56.7 | % | $ | 7,899 | 17.8 | % | $ | 25,038 | 33.6 | % | |||||||||
Mid-Atlantic | 3,024 | 10.0 | 5,927 | 13.4 | 8,951 | 12.0 | |||||||||||||||
South | 4,087 | 13.5 | 16,403 | 37.1 | 20,490 | 27.5 | |||||||||||||||
Other | 5,995 | 19.8 | 14,034 | 31.7 | 20,029 | 26.9 | |||||||||||||||
Total | $ | 30,245 | 100.0 | % | $ | 44,263 | 100.0 | % | $ | 74,508 | 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. |
(Percentage of portfolio) | June 30, 2020 | December 31, 2019 | ||||
Real estate | 39 | % | 39 | % | ||
Finance | 15 | 16 | ||||
Healthcare | 11 | 12 | ||||
Business services | 6 | 6 | ||||
Educational services | 5 | 4 | ||||
Oil and gas | 4 | 5 | ||||
Public administration | 4 | 4 | ||||
Retail trade | 3 | 4 | ||||
Construction and land | 3 | 2 | ||||
Other | 10 | 8 | ||||
Total | 100 | % | 100 | % |
43 | Capital One Financial Corporation (COF) |
(Percentage of portfolio) | June 30, 2020 | December 31, 2019 | ||||
Domestic credit card—Refreshed FICO scores:(1) | ||||||
Greater than 660 | 67 | % | 67 | % | ||
660 or below | 33 | 33 | ||||
Total | 100 | % | 100 | % | ||
Auto—At origination FICO scores:(2) | ||||||
Greater than 660 | 46 | % | 48 | % | ||
621 - 660 | 20 | 20 | ||||
620 or below | 34 | 32 | ||||
Total | 100 | % | 100 | % |
(1) | Percentages represent period-end loans held for investment in each credit score category. Domestic card credit scores generally represent FICO scores. These scores are obtained from one of the major credit bureaus at origination and are refreshed monthly thereafter. We approximate non-FICO credit scores to comparable FICO scores for consistency purposes. Balances for which no credit score is available or the credit score is invalid are included in the 660 or below category. |
(2) | Percentages represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category. |
44 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||
30+ Day Performing Delinquencies | 30+ Day Delinquencies | 30+ Day Performing Delinquencies | 30+ Day Delinquencies | |||||||||||||||||||||||||
(Dollars in millions) | Amount | Rate(1) | Amount | Rate(1) | Amount | Rate(1) | Amount | Rate(1) | ||||||||||||||||||||
Credit Card: | ||||||||||||||||||||||||||||
Domestic credit card | $ | 2,724 | 2.74 | % | $ | 2,724 | 2.74 | % | $ | 4,656 | 3.93 | % | $ | 4,656 | 3.93 | % | ||||||||||||
International card businesses | 215 | 2.71 | 231 | 2.91 | 335 | 3.47 | 353 | 3.66 | ||||||||||||||||||||
Total credit card | 2,939 | 2.74 | 2,955 | 2.75 | 4,991 | 3.89 | 5,009 | 3.91 | ||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||||||||
Auto | 2,079 | 3.28 | 2,276 | 3.59 | 4,154 | 6.88 | 4,584 | 7.59 | ||||||||||||||||||||
Retail banking | 30 | 0.89 | 47 | 1.39 | 28 | 1.02 | 43 | 1.59 | ||||||||||||||||||||
Total consumer banking | 2,109 | 3.16 | 2,323 | 3.48 | 4,182 | 6.63 | 4,627 | 7.34 | ||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||||||||
Commercial and multifamily real estate | 154 | 0.50 | 286 | 0.92 | 63 | 0.21 | 67 | 0.22 | ||||||||||||||||||||
Commercial and industrial | 65 | 0.14 | 226 | 0.49 | 101 | 0.23 | 244 | 0.55 | ||||||||||||||||||||
Total commercial banking | 219 | 0.28 | 512 | 0.66 | 164 | 0.22 | 311 | 0.42 | ||||||||||||||||||||
Total | $ | 5,267 | 2.09 | $ | 5,790 | 2.30 | $ | 9,337 | 3.51 | $ | 9,947 | 3.74 |
(1) | Delinquency rates are calculated by dividing delinquency amounts by period-end loans held for investment for each specified loan category. |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | Rate(1) | Amount | Rate(1) | ||||||||||
Delinquency status: | ||||||||||||||
30 – 59 days | $ | 2,532 | 1.01 | % | $ | 4,444 | 1.67 | % | ||||||
60 – 89 days | 1,342 | 0.53 | 2,537 | 0.95 | ||||||||||
> 90 days | 1,916 | 0.76 | 2,966 | 1.12 | ||||||||||
Total | $ | 5,790 | 2.30 | % | $ | 9,947 | 3.74 | % | ||||||
Geographic region: | ||||||||||||||
Domestic | $ | 5,559 | 2.21 | % | $ | 9,594 | 3.61 | % | ||||||
International | 231 | 0.09 | 353 | 0.13 | ||||||||||
Total | $ | 5,790 | 2.30 | % | $ | 9,947 | 3.74 | % |
(1) | Delinquency rates are calculated by dividing delinquency amounts by total period-end loans held for investment. |
45 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | Rate(1) | Amount | Rate(1) | ||||||||||
Loan category: | ||||||||||||||
Credit card | $ | 1,596 | 1.49 | % | $ | 2,407 | 1.88 | % | ||||||
Commercial banking | 14 | 0.02 | — | — | ||||||||||
Total | $ | 1,610 | 0.64 | $ | 2,407 | 0.91 | ||||||||
Geographic region: | ||||||||||||||
Domestic | $ | 1,516 | 0.62 | % | $ | 2,277 | 0.89 | % | ||||||
International | 94 | 1.18 | 130 | 1.34 | ||||||||||
Total | $ | 1,610 | 0.64 | $ | 2,407 | 0.91 |
(1) | Delinquency rates are calculated by dividing delinquency amounts by period-end loans held for investment for each specified loan category. |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | Rate | Amount | Rate | ||||||||||
Nonperforming loans held for investment:(2) | ||||||||||||||
Credit Card: | ||||||||||||||
International card businesses | $ | 23 | 0.29 | % | $ | 25 | 0.26 | % | ||||||
Total credit card | 23 | 0.02 | 25 | 0.02 | ||||||||||
Consumer Banking: | ||||||||||||||
Auto | 260 | 0.41 | 487 | 0.81 | ||||||||||
Retail banking | 24 | 0.70 | 23 | 0.87 | ||||||||||
Total consumer banking | 284 | 0.43 | 510 | 0.81 | ||||||||||
Commercial Banking: | ||||||||||||||
Commercial and multifamily real estate | 167 | 0.54 | 38 | 0.12 | ||||||||||
Commercial and industrial | 493 | 1.06 | 410 | 0.93 | ||||||||||
Total commercial banking | 660 | 0.85 | 448 | 0.60 | ||||||||||
Total nonperforming loans held for investment(3) | $ | 967 | 0.38 | $ | 983 | 0.37 | ||||||||
Other nonperforming assets(4) | 24 | 0.01 | 63 | 0.02 | ||||||||||
Total nonperforming assets | $ | 991 | 0.39 | $ | 1,046 | 0.39 |
46 | Capital One Financial Corporation (COF) |
(1) | We recognized interest income for loans classified as nonperforming of $11 million and $12 million in the first six months of 2020 and 2019, respectively. Interest income foregone related to nonperforming loans was $35 million and $39 million in the first six months of 2020 and 2019, respectively. Foregone interest income represents the amount of interest income in excess of recognized interest income that would have been recorded during the period for nonperforming loans as of the end of the period had the loans performed according to their contractual terms. |
(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. |
(3) | Excluding the impact of domestic credit card loans, nonperforming loans as a percentage of total loans held for investment was 0.64% and 0.67% as of June 30, 2020 and December 31, 2019, respectively. |
(4) | The denominators used in calculating nonperforming asset rates consist of total loans held for investment and other nonperforming assets. |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(Dollars in millions) | Amount | Rate(1) | Amount | Rate(1) | Amount | Rate(1) | Amount | Rate(1) | ||||||||||||||||||||
Credit Card: | ||||||||||||||||||||||||||||
Domestic credit card | $ | 1,143 | 4.53 | % | $ | 1,240 | 4.86 | % | $ | 2,474 | 4.61 | % | $ | 2,534 | 4.95 | % | ||||||||||||
International card businesses | 68 | 3.47 | 80 | 3.63 | 173 | 4.11 | 150 | 3.41 | ||||||||||||||||||||
Total credit card | 1,211 | 4.46 | 1,320 | 4.76 | 2,647 | 4.57 | 2,684 | 4.83 | ||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||||||||
Auto | 179 | 1.16 | 155 | 1.09 | 409 | 1.33 | 358 | 1.26 | ||||||||||||||||||||
Retail banking | 13 | 1.78 | 17 | 2.42 | 29 | 2.05 | 35 | 2.49 | ||||||||||||||||||||
Total consumer banking | 192 | 1.19 | 172 | 1.15 | 438 | 1.36 | 393 | 1.32 | ||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||||||||
Commercial and multifamily real estate | 7 | 0.09 | — | — | 7 | 0.04 | — | — | ||||||||||||||||||||
Commercial and industrial | 95 | 0.78 | 16 | 0.15 | 204 | 0.87 | 30 | 0.14 | ||||||||||||||||||||
Total commercial banking | 102 | 0.51 | 16 | 0.09 | 211 | 0.54 | 30 | 0.08 | ||||||||||||||||||||
Total net charge-offs | $ | 1,505 | 2.38 | $ | 1,508 | 2.48 | $ | 3,296 | 2.55 | $ | 3,107 | 2.56 | ||||||||||||||||
Average loans held for investment | $ | 253,358 | $ | 242,653 | $ | 258,124 | $ | 242,307 |
(1) | Net charge-off rates are calculated by dividing annualized net charge-offs by average loans held for investment for the period for each loan category. |
47 | Capital One Financial Corporation (COF) |
• | Credit Card |
• | Consumer Banking |
• | Commercial Banking |
48 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||
(Dollars in millions) | Amount | % of Total Modifications | Amount | % of Total Modifications | ||||||||||
Credit Card: | ||||||||||||||
Domestic credit card | $ | 585 | 31.8 | % | $ | 630 | 38.1 | % | ||||||
International card businesses | 185 | 10.0 | 201 | 12.2 | ||||||||||
Total credit card | 770 | 41.8 | 831 | 50.3 | ||||||||||
Consumer banking: | ||||||||||||||
Auto | 480 | 26.1 | 346 | 20.9 | ||||||||||
Retail banking | 23 | 1.2 | 24 | 1.5 | ||||||||||
Total consumer banking | 503 | 27.3 | 370 | 22.4 | ||||||||||
Commercial banking | 568 | 30.9 | 451 | 27.3 | ||||||||||
Total | $ | 1,841 | 100.0 | % | $ | 1,652 | 100.0 | % | ||||||
Status of TDRs: | ||||||||||||||
Performing | $ | 1,552 | 84.3 | % | $ | 1,347 | 81.5 | % | ||||||
Nonperforming | 289 | 15.7 | 305 | 18.5 | ||||||||||
Total | $ | 1,841 | 100.0 | % | $ | 1,652 | 100.0 | % |
49 | Capital One Financial Corporation (COF) |
50 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||
Credit Card | Consumer Banking | |||||||||||||||||||||||||||||||
(Dollars in millions) | Domestic Card | International Card Businesses | Total Credit Card | Auto | Retail Banking | Total Consumer Banking | Commercial Banking | Total | ||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | 9,806 | $ | 540 | $ | 10,346 | $ | 2,058 | $ | 96 | $ | 2,154 | $ | 1,573 | $ | 14,073 | ||||||||||||||||
Charge-offs | (1,493 | ) | (119 | ) | (1,612 | ) | (399 | ) | (17 | ) | (416 | ) | (103 | ) | (2,131 | ) | ||||||||||||||||
Recoveries(1) | 350 | 51 | 401 | 220 | 4 | 224 | 1 | 626 | ||||||||||||||||||||||||
Net charge-offs | (1,143 | ) | (68 | ) | (1,211 | ) | (179 | ) | (13 | ) | (192 | ) | (102 | ) | (1,505 | ) | ||||||||||||||||
Provision for credit losses | 2,906 | 38 | 2,944 | 847 | 29 | 876 | 432 | 4,252 | ||||||||||||||||||||||||
Allowance build (release) for credit losses | 1,763 | (30 | ) | 1,733 | 668 | 16 | 684 | 330 | 2,747 | |||||||||||||||||||||||
Other changes(2) | — | 12 | 12 | — | — | — | — | 12 | ||||||||||||||||||||||||
Balance as of June 30, 2020 | 11,569 | 522 | 12,091 | 2,726 | 112 | 2,838 | 1,903 | 16,832 | ||||||||||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | — | — | — | — | — | — | 223 | 223 | ||||||||||||||||||||||||
Benefit for losses on unfunded lending commitments | — | — | — | — | — | — | (5 | ) | (5 | ) | ||||||||||||||||||||||
Balance as of June 30, 2020 | — | — | — | — | — | — | 218 | 218 | ||||||||||||||||||||||||
Combined allowance and reserve as of June 30, 2020 | $ | 11,569 | $ | 522 | $ | 12,091 | $ | 2,726 | $ | 112 | $ | 2,838 | $ | 2,121 | $ | 17,050 |
Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||
Credit Card | Consumer Banking | |||||||||||||||||||||||||||||||
(Dollars in millions) | Domestic Card | International Card Businesses | Total Credit Card | Auto | Retail Banking | Total Consumer Banking | Commercial Banking | Total | ||||||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | 4,997 | $ | 398 | $ | 5,395 | $ | 984 | $ | 54 | $ | 1,038 | $ | 775 | $ | 7,208 | ||||||||||||||||
Cumulative effects from adoption of the CECL standard | 2,237 | 4 | 2,241 | 477 | 25 | 502 | 102 | 2,845 | ||||||||||||||||||||||||
Finance charge and fee reserve reclassification(3) | 439 | 23 | 462 | — | — | — | — | 462 | ||||||||||||||||||||||||
Balance as of January 1, 2020 | 7,673 | 425 | 8,098 | 1,461 | 79 | 1,540 | 877 | 10,515 | ||||||||||||||||||||||||
Charge-offs | (3,208 | ) | (253 | ) | (3,461 | ) | (875 | ) | (37 | ) | (912 | ) | (215 | ) | (4,588 | ) | ||||||||||||||||
Recoveries(1) | 734 | 80 | 814 | 466 | 8 | 474 | 4 | 1,292 | ||||||||||||||||||||||||
Net charge-offs | (2,474 | ) | (173 | ) | (2,647 | ) | (409 | ) | (29 | ) | (438 | ) | (211 | ) | (3,296 | ) | ||||||||||||||||
Provision for credit losses | 6,370 | 276 | 6,646 | 1,674 | 62 | 1,736 | 1,237 | 9,619 | ||||||||||||||||||||||||
Allowance build for credit losses | 3,896 | 103 | 3,999 | 1,265 | 33 | 1,298 | 1,026 | 6,323 | ||||||||||||||||||||||||
Other changes(2) | — | (6 | ) | (6 | ) | — | — | — | — | (6 | ) | |||||||||||||||||||||
Balance as of June 30, 2020 | 11,569 | 522 | 12,091 | 2,726 | 112 | 2,838 | 1,903 | 16,832 | ||||||||||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | — | — | — | — | 5 | 5 | 130 | 135 | ||||||||||||||||||||||||
Cumulative effects from adoption of the CECL standard | — | — | — | — | (5 | ) | (5 | ) | 42 | 37 | ||||||||||||||||||||||
Balance as of January 1, 2020 | — | — | — | — | — | — | 172 | 172 | ||||||||||||||||||||||||
Provision for losses on unfunded lending commitments | — | — | — | — | — | — | 46 | 46 | ||||||||||||||||||||||||
Balance as of June 30, 2020 | — | — | — | — | — | — | 218 | 218 | ||||||||||||||||||||||||
Combined allowance and reserve as of June 30, 2020 | $ | 11,569 | $ | 522 | $ | 12,091 | $ | 2,726 | $ | 112 | $ | 2,838 | $ | 2,121 | $ | 17,050 |
51 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||
Credit Card | Consumer Banking | |||||||||||||||||||||||||||||||
(Dollars in millions) | Domestic Card | International Card Businesses | Total Credit Card | Auto | Retail Banking | Total Consumer Banking | Commercial Banking | Total | ||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | 5,141 | $ | 427 | $ | 5,568 | $ | 1,002 | $ | 60 | $ | 1,062 | $ | 683 | $ | 7,313 | ||||||||||||||||
Charge-offs | (1,580 | ) | (131 | ) | (1,711 | ) | (401 | ) | (22 | ) | (423 | ) | (23 | ) | (2,157 | ) | ||||||||||||||||
Recoveries(1) | 340 | 51 | 391 | 246 | 5 | 251 | 7 | 649 | ||||||||||||||||||||||||
Net charge-offs | (1,240 | ) | (80 | ) | (1,320 | ) | (155 | ) | (17 | ) | (172 | ) | (16 | ) | (1,508 | ) | ||||||||||||||||
Provision for loan and lease losses | 1,024 | 71 | 1,095 | 150 | 15 | 165 | 69 | 1,329 | ||||||||||||||||||||||||
Allowance build (release) for loan and lease losses | (216 | ) | (9 | ) | (225 | ) | (5 | ) | (2 | ) | (7 | ) | 53 | (179 | ) | |||||||||||||||||
Other changes(2) | — | (1 | ) | (1 | ) | — | — | — | — | (1 | ) | |||||||||||||||||||||
Balance as of June 30, 2019 | 4,925 | 417 | 5,342 | 997 | 58 | 1,055 | 736 | 7,133 | ||||||||||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | — | — | — | — | 4 | 4 | 127 | 131 | ||||||||||||||||||||||||
Provision for losses on unfunded lending commitments | — | — | — | — | — | — | 13 | 13 | ||||||||||||||||||||||||
Balance as of June 30, 2019 | — | — | — | — | 4 | 4 | 140 | 144 | ||||||||||||||||||||||||
Combined allowance and reserve as of June 30, 2019 | $ | 4,925 | $ | 417 | $ | 5,342 | $ | 997 | $ | 62 | $ | 1,059 | $ | 876 | $ | 7,277 |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||
Credit Card | Consumer Banking | |||||||||||||||||||||||||||||||
(Dollars in millions) | Domestic Card | International Card Businesses | Total Credit Card | Auto | Retail Banking | Total Consumer Banking | Commercial Banking | Total | ||||||||||||||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | 5,144 | $ | 391 | $ | 5,535 | $ | 990 | $ | 58 | $ | 1,048 | $ | 637 | $ | 7,220 | ||||||||||||||||
Charge-offs | (3,232 | ) | (261 | ) | (3,493 | ) | (850 | ) | (44 | ) | (894 | ) | (43 | ) | (4,430 | ) | ||||||||||||||||
Recoveries(1) | 698 | 111 | 809 | 492 | 9 | 501 | 13 | 1,323 | ||||||||||||||||||||||||
Net charge-offs | (2,534 | ) | (150 | ) | (2,684 | ) | (358 | ) | (35 | ) | (393 | ) | (30 | ) | (3,107 | ) | ||||||||||||||||
Provision for loan and lease losses | 2,315 | 169 | 2,484 | 365 | 35 | 400 | 129 | 3,013 | ||||||||||||||||||||||||
Allowance build (release) for loan and lease losses | (219 | ) | 19 | (200 | ) | 7 | — | 7 | 99 | (94 | ) | |||||||||||||||||||||
Other changes(2) | — | 7 | 7 | — | — | — | — | 7 | ||||||||||||||||||||||||
Balance as of June 30, 2019 | 4,925 | 417 | 5,342 | 997 | 58 | 1,055 | 736 | 7,133 | ||||||||||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | — | — | — | — | 4 | 4 | 118 | 122 | ||||||||||||||||||||||||
Provision for losses on unfunded lending commitments | — | — | — | — | — | — | 22 | 22 | ||||||||||||||||||||||||
Balance as of June 30, 2019 | — | — | — | — | 4 | 4 | 140 | 144 | ||||||||||||||||||||||||
Combined allowance and reserve as of June 30, 2019 | $ | 4,925 | $ | 417 | $ | 5,342 | $ | 997 | $ | 62 | $ | 1,059 | $ | 876 | $ | 7,277 |
(1) | The amount and timing of recoveries is impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation. |
(2) | Represents foreign currency translation adjustments. |
(3) | Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment. |
52 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||
(Dollars in millions) | Allowance for Credit Losses | Amount(1) | Allowance Coverage Ratio | Allowance for Loan and Lease Losses | Amount(1) | Allowance Coverage Ratio | ||||||||||||||||
Credit Card | $ | 12,091 | $ | 2,955 | 409.20 | % | $ | 5,395 | $ | 5,009 | 107.70 | % | ||||||||||
Consumer Banking | 2,838 | 2,323 | 122.15 | 1,038 | 4,627 | 22.42 | ||||||||||||||||
Commercial Banking | 1,903 | 660 | 288.41 | 775 | 448 | 173.20 | ||||||||||||||||
Total | $ | 16,832 | 251,512 | 6.69 | $ | 7,208 | 265,809 | 2.71 |
(1) | Represents period-end 30+ day delinquent loans for our credit card and consumer banking loan portfolios, nonperforming loans for our commercial banking loan portfolio and total loans held for investment for the total ratio. |
LIQUIDITY RISK PROFILE |
(Dollars in millions) | June 30, 2020 | December 31, 2019 | ||||||
Cash and cash equivalents | $ | 55,818 | $ | 13,407 | ||||
Investment securities available for sale, at fair value | 87,859 | 79,213 | ||||||
FHLB borrowing capacity secured by loans | 11,425 | 10,835 | ||||||
Outstanding FHLB advances and letters of credit secured by loans | (159 | ) | (7,210 | ) | ||||
Investment securities encumbered for Public Funds and others | (5,797 | ) | (5,688 | ) | ||||
Total liquidity reserves | $ | 149,146 | $ | 90,557 |
53 | Capital One Financial Corporation (COF) |
54 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||
(Dollars in millions) | Average Balance | Interest Expense | Average Deposits Interest Rate | Average Balance | Interest Expense | Average Deposits Interest Rate | ||||||||||||||||
Interest-bearing checking accounts(1) | $ | 36,105 | $ | 28 | 0.31 | % | $ | 34,780 | $ | 77 | 0.89 | % | ||||||||||
Saving deposits(2) | 180,103 | 372 | 0.83 | 154,524 | 526 | 1.37 | ||||||||||||||||
Time deposits less than $100,000 | 28,607 | 138 | 1.94 | 26,214 | 182 | 2.78 | ||||||||||||||||
Total interest-bearing core deposits | 244,815 | 538 | 0.88 | 215,518 | 785 | 1.46 | ||||||||||||||||
Time deposits of $100,000 or more | 16,441 | 73 | 1.77 | 14,934 | 85 | 2.29 | ||||||||||||||||
Total interest-bearing deposits | $ | 261,256 | $ | 611 | 0.94 | $ | 230,452 | $ | 870 | 1.51 |
Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||
(Dollars in millions) | Average Balance | Interest Expense | Average Deposits Interest Rate | Average Balance | Interest Expense | Average Deposits Interest Rate | ||||||||||||||||
Interest-bearing checking accounts(1) | $ | 35,234 | $ | 81 | 0.46 | % | $ | 34,759 | $ | 148 | 0.86 | % | ||||||||||
Saving deposits(2) | 171,082 | 798 | 0.94 | 154,029 | 1,025 | 1.34 | ||||||||||||||||
Time deposits less than $100,000 | 27,908 | 295 | 2.13 | 26,249 | 358 | 2.75 | ||||||||||||||||
Total interest-bearing core deposits | 234,224 | 1,174 | 1.01 | 215,037 | 1,531 | 1.44 | ||||||||||||||||
Time deposits of $100,000 or more | 16,961 | 168 | 1.99 | 13,983 | 156 | 2.25 | ||||||||||||||||
Total interest-bearing deposits | $ | 251,185 | $ | 1,342 | 1.07 | $ | 229,020 | $ | 1,687 | 1.47 |
(1) | Includes negotiable order of withdrawal accounts. |
(2) | Includes money market deposit accounts. |
55 | Capital One Financial Corporation (COF) |
Issuances | Maturities/Redemptions | |||||||||||||||
Three Months Ended June 30, | Three Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Securitized debt obligations | $ | — | $ | 1,123 | $ | 1,383 | $ | 3,537 | ||||||||
Senior and subordinated notes | 2,000 | 1,411 | 5,592 | 750 | ||||||||||||
FHLB advances | — | — | — | 1 | ||||||||||||
Total | $ | 2,000 | $ | 2,534 | $ | 6,975 | $ | 4,288 |
Issuances | Maturities/Redemptions | |||||||||||||||
Six Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Securitized debt obligations | $ | 1,250 | $ | 2,623 | $ | 3,593 | $ | 4,126 | ||||||||
Senior and subordinated notes | 4,000 | 2,661 | 7,092 | 2,500 | ||||||||||||
FHLB advances | — | — | — | 251 | ||||||||||||
Total | $ | 5,250 | $ | 5,284 | $ | 10,685 | $ | 6,877 |
June 30, 2020 | December 31, 2019 | |||||||||||
Capital One Financial Corporation | COBNA | CONA | Capital One Financial Corporation | COBNA | CONA | |||||||
Moody’s | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | Baa1 | ||||||
S&P | BBB | BBB+ | BBB+ | BBB | BBB+ | BBB+ | ||||||
Fitch | A- | A- | A- | A- | A- | A- |
MARKET RISK PROFILE |
• | Traditional banking activities of deposit gathering and lending; |
56 | Capital One Financial Corporation (COF) |
• | Asset/liability management activities including the management of investment securities, short-term and long-term borrowings and derivatives; |
• | Foreign operations in the U.K. and Canada within our Credit Card business; and |
• | Customer accommodation activities within our Commercial Banking business. |
57 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||
Estimated impact on projected baseline net interest income: | ||||||
+200 basis points | 7.6 | % | 1.8 | % | ||
+100 basis points | 5.3 | 1.3 | ||||
+50 basis points | 2.7 | 1.1 | ||||
–50 basis points | (1.4 | ) | (0.5 | ) | ||
Estimated impact on economic value of equity: | ||||||
+200 basis points | 12.1 | (3.6 | ) | |||
+100 basis points | 10.5 | 0.5 | ||||
+50 basis points | 6.5 | 0.8 | ||||
–50 basis points | (10.5 | ) | (2.4 | ) |
58 | Capital One Financial Corporation (COF) |
• | implemented a robust governance framework and transition planning; |
• | completed initial assessment of exposures in products, legal contracts, systems, models and processes; |
• | included LIBOR transition language (“fallback language”) for new legal contracts/agreements; and |
• | started issuing securities with SOFR-based features in 2020. |
• | reviewing existing legal contracts/agreements and assessing fallback language impacts; |
• | monitoring of our LIBOR exposure; |
• | assessing internal operational readiness and risk management; |
• | implementing necessary updates to our infrastructure including systems, models, valuation tools and processes; |
• | engaging with our clients, industry working groups, and regulators; and |
• | monitoring developments associated with LIBOR alternatives and industry practices related to LIBOR-indexed instruments. |
59 | Capital One Financial Corporation (COF) |
SUPERVISION AND REGULATION |
FORWARD-LOOKING STATEMENTS |
60 | Capital One Financial Corporation (COF) |
• | the impact of the COVID-19 pandemic and related public health measures on our business, financial condition and results of operations; |
• | general economic and business conditions in the U.S., the U.K., Canada or our local markets, including conditions affecting employment levels, interest rates, tariffs, collateral values, consumer income, credit worthiness and confidence, spending and savings that may affect consumer bankruptcies, defaults, charge-offs and deposit activity; |
• | an increase or decrease in credit losses, including increases due to a worsening of general economic conditions in the credit environment, and the impact of inaccurate estimates or inadequate reserves; |
• | compliance with financial, legal, regulatory, tax or accounting changes or actions, including the impacts of the Tax Act, the Dodd-Frank Act, and other regulations governing bank capital and liquidity standards; |
• | our ability to manage effectively our capital and liquidity; |
• | developments, changes or actions relating to any litigation, governmental investigation or regulatory enforcement action or matter involving us, including those relating to U.K. PPI; |
• | the inability to sustain revenue and earnings growth; |
• | increases or decreases in interest rates and uncertainty with respect to the interest rate environment; |
• | uncertainty regarding, and transition away from, the London Interbank Offered Rate; |
• | our ability to access the capital markets at attractive rates and terms to capitalize and fund our operations and future growth; |
• | increases or decreases in our aggregate loan balances or the number of customers and the growth rate and composition thereof, including increases or decreases resulting from factors such as shifting product mix, amount of actual marketing expenses we incur and attrition of loan balances; |
• | the amount and rate of deposit growth; |
• | changes in deposit costs; |
• | our ability to execute on our strategic and operational plans; |
• | restructuring activities or other charges; |
• | our response to competitive pressures; |
• | changes in retail distribution strategies and channels, including the emergence of new technologies and product delivery systems; |
• | our success in integrating acquired businesses and loan portfolios, and our ability to realize anticipated benefits from announced transactions and strategic partnerships; |
• | the success of our marketing efforts in attracting and retaining customers; |
• | changes in the reputation of, or expectations regarding, the financial services industry or us with respect to practices, products or financial condition; |
• | any significant disruption in our operations or in the technology platforms on which we rely, including cybersecurity, business continuity and related operational risks, as well as other security failures or breaches of our systems or those of our customers, partners, service providers or other third parties; |
• | the potential impact to our business, operations and reputation from, and expenses and uncertainties associated with, the Cybersecurity Incident we announced on July 29, 2019 and associated legal proceedings and other inquiries or |
61 | Capital One Financial Corporation (COF) |
• | our ability to maintain a compliance and technology infrastructure suitable for the nature of our business; |
• | our ability to develop and adapt to rapid changes in digital technology to address the needs of our customers and comply with applicable regulatory standards, including compliance with data protection and privacy standards; |
• | the effectiveness of our risk management strategies; |
• | our ability to control costs, including the amount of, and rate of growth in, our expenses as our business develops or changes or as it expands into new market areas; |
• | the extensive use, reliability and accuracy of the models and data we rely on; |
• | our ability to recruit and retain talented and experienced personnel; |
• | the impact from, and our ability to respond to, natural disasters and other catastrophic events; |
• | changes in the labor and employment markets; |
• | fraud or misconduct by our customers, employees, business partners or third parties; |
• | merchants’ increasing focus on the fees charged by credit card networks; and |
• | other risk factors identified from time to time in our public disclosures, including in the reports that we file with the SEC. |
62 | Capital One Financial Corporation (COF) |
SUPPLEMENTAL TABLE |
(Dollars in millions, except as noted) | June 30, 2020 | December 31, 2019 | ||||||
Tangible Common Equity (Period-End): | ||||||||
Stockholders’ equity | $ | 56,045 | $ | 58,011 | ||||
Goodwill and intangible assets(1) | (14,869 | ) | (14,932 | ) | ||||
Noncumulative perpetual preferred stock | (5,209 | ) | (4,853 | ) | ||||
Tangible common equity | $ | 35,967 | $ | 38,226 | ||||
Tangible Common Equity (Quarterly Average): | ||||||||
Stockholders’ equity | $ | 57,623 | $ | 58,148 | ||||
Goodwill and intangible assets(1) | (14,880 | ) | (14,967 | ) | ||||
Noncumulative perpetual preferred stock | (5,209 | ) | (5,506 | ) | ||||
Tangible common equity | $ | 37,534 | $ | 37,675 | ||||
Tangible Assets (Period-End): | ||||||||
Total assets | $ | 421,296 | $ | 390,365 | ||||
Goodwill and intangible assets(1) | (14,869 | ) | (14,932 | ) | ||||
Tangible assets | $ | 406,427 | $ | 375,433 | ||||
Tangible Assets (Quarterly Average): | ||||||||
Total assets | $ | 411,075 | $ | 383,162 | ||||
Goodwill and intangible assets(1) | (14,880 | ) | (14,967 | ) | ||||
Tangible assets | $ | 396,195 | $ | 368,195 | ||||
Non-GAAP Ratio: | ||||||||
Tangible common equity(2) | 8.8 | % | 10.2 | % |
(1) | Includes impact of related deferred taxes. |
(2) | Tangible common equity (“TCE”) ratio is a non-GAAP measure calculated based on TCE divided by tangible assets. |
63 | Capital One Financial Corporation (COF) |
Glossary and Acronyms |
64 | Capital One Financial Corporation (COF) |
65 | Capital One Financial Corporation (COF) |
66 | Capital One Financial Corporation (COF) |
67 | Capital One Financial Corporation (COF) |
Acronyms |
68 | Capital One Financial Corporation (COF) |
69 | Capital One Financial Corporation (COF) |
Page | |
70 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions, except per share-related data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Interest income: | ||||||||||||||||
Loans, including loans held for sale | $ | $ | $ | $ | ||||||||||||
Investment securities | ||||||||||||||||
Other | ||||||||||||||||
Total interest income | ||||||||||||||||
Interest expense: | ||||||||||||||||
Deposits | ||||||||||||||||
Securitized debt obligations | ||||||||||||||||
Senior and subordinated notes | ||||||||||||||||
Other borrowings | ||||||||||||||||
Total interest expense | ||||||||||||||||
Net interest income | ||||||||||||||||
Provision for credit losses | ||||||||||||||||
Net interest income after provision for credit losses | ||||||||||||||||
Non-interest income: | ||||||||||||||||
Interchange fees, net | ||||||||||||||||
Service charges and other customer-related fees | ||||||||||||||||
Net securities gains | ||||||||||||||||
Other | ||||||||||||||||
Total non-interest income | ||||||||||||||||
Non-interest expense: | ||||||||||||||||
Salaries and associate benefits | ||||||||||||||||
Occupancy and equipment | ||||||||||||||||
Marketing | ||||||||||||||||
Professional services | ||||||||||||||||
Communications and data processing | ||||||||||||||||
Amortization of intangibles | ||||||||||||||||
Other | ||||||||||||||||
Total non-interest expense | ||||||||||||||||
Income (loss) from continuing operations before income taxes | ( | ) | ( | ) | ||||||||||||
Income tax provision (benefit) | ( | ) | ( | ) | ||||||||||||
Income (loss) from continuing operations, net of tax | ( | ) | ( | ) | ||||||||||||
Income (loss) from discontinued operations, net of tax | ( | ) | ( | ) | ||||||||||||
Net income (loss) | ( | ) | ( | ) | ||||||||||||
Dividends and undistributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Issuance cost for redeemed preferred stock | ( | ) | ||||||||||||||
Net income (loss) available to common stockholders | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Basic earnings per common share: | ||||||||||||||||
Net income (loss) from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Income from discontinued operations | ||||||||||||||||
Net income (loss) per basic common share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Diluted earnings per common share: | ||||||||||||||||
Net income (loss) from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Income from discontinued operations | ||||||||||||||||
Net income (loss) per diluted common share | $ | ( | ) | $ | $ | ( | ) | $ |
See Notes to Consolidated Financial Statements. | ||
71 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Net income (loss) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Net unrealized gains on securities available for sale | ||||||||||||||||
Net unrealized gains on hedging relationships | ||||||||||||||||
Foreign currency translation adjustments | ( | ) | ||||||||||||||
Net changes in securities held to maturity | ||||||||||||||||
Other | ( | ) | ||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||
Comprehensive income (loss) | $ | ( | ) | $ | $ | $ |
See Notes to Consolidated Financial Statements. | ||
72 | Capital One Financial Corporation (COF) |
(Dollars in millions, except per share-related data) | June 30, 2020 | December 31, 2019 | ||||||
Assets: | ||||||||
Cash and cash equivalents: | ||||||||
Cash and due from banks | $ | $ | ||||||
Interest-bearing deposits and other short-term investments | ||||||||
Total cash and cash equivalents | ||||||||
Restricted cash for securitization investors | ||||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | ||||||||
Loans held for investment: | ||||||||
Unsecuritized loans held for investment | ||||||||
Loans held in consolidated trusts | ||||||||
Total loans held for investment | ||||||||
Allowance for credit losses | ( | ) | ( | ) | ||||
Net loans held for investment | ||||||||
Loans held for sale ($668 million and $251 million carried at fair value at June 30, 2020 and December 31, 2019, respectively) | ||||||||
Premises and equipment, net | ||||||||
Interest receivable | ||||||||
Goodwill | ||||||||
Other assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities: | ||||||||
Interest payable | $ | $ | ||||||
Deposits: | ||||||||
Non-interest-bearing deposits | ||||||||
Interest-bearing deposits | ||||||||
Total deposits | ||||||||
Securitized debt obligations | ||||||||
Other debt: | ||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | ||||||||
Senior and subordinated notes | ||||||||
Other borrowings | ||||||||
Total other debt | ||||||||
Other liabilities | ||||||||
Total liabilities | ||||||||
Commitments, contingencies and guarantees (see Note 13) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock (par value $.01 per share; 50,000,000 shares authorized; 5,350,000 and 4,975,000 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively) | ||||||||
Common stock (par value $.01 per share; 1,000,000,000 shares authorized; 677,226,807 and 672,969,391 shares issued as of June 30, 2020 and December 31, 2019, respectively; 456,335,486 and 456,562,399 shares outstanding as of June 30, 2020 and December 31, 2019, respectively) | ||||||||
Additional paid-in capital, net | ||||||||
Retained earnings | ||||||||
Accumulated other comprehensive income | ||||||||
Treasury stock, at cost (par value $.01 per share; 220,891,321 and 216,406,992 shares as of June 30, 2020 and December 31, 2019, respectively) | ( | ) | ( | ) | ||||
Total stockholders’ equity | ||||||||
Total liabilities and stockholders’ equity | $ | $ |
See Notes to Consolidated Financial Statements. | ||
73 | Capital One Financial Corporation (COF) |
(Dollars in millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
Cumulative effects from adoption of the CECL standard | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||
Comprehensive income | ( | ) | ||||||||||||||||||||||||||||||||
Dividends—common stock(1) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Dividends—preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Purchases of treasury stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Issuances of common stock and restricted stock, net of forfeitures | ||||||||||||||||||||||||||||||||||
Exercises of stock options | ||||||||||||||||||||||||||||||||||
Issuances of preferred stock | ||||||||||||||||||||||||||||||||||
Redemptions of preferred stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
Compensation expense for restricted stock units and stock options | ||||||||||||||||||||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||||||||||
Comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Dividends—common stock(1) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Dividends—preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Purchases of treasury stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Issuances of common stock and restricted stock, net of forfeitures | ||||||||||||||||||||||||||||||||||
Exercises of stock options | ||||||||||||||||||||||||||||||||||
Compensation expense for restricted stock units and stock options | ||||||||||||||||||||||||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ | $ | $ | ( | ) | $ |
See Notes to Consolidated Financial Statements. | ||
74 | Capital One Financial Corporation (COF) |
(Dollars in millions) | Preferred Stock | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
Cumulative effects from adoption of new lease standard | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||
Dividends—common stock(1) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Dividends—preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Purchases of treasury stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Issuances of common stock and restricted stock, net of forfeitures | ||||||||||||||||||||||||||||||||||
Exercises of stock options | ||||||||||||||||||||||||||||||||||
Compensation expense for restricted stock units and stock options | ||||||||||||||||||||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||||
Dividends—common stock(1) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Dividends—preferred stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Purchases of treasury stock | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
Issuances of common stock and restricted stock, net of forfeitures | ||||||||||||||||||||||||||||||||||
Exercises of stock options | ||||||||||||||||||||||||||||||||||
Compensation expense for restricted stock units and stock options | ||||||||||||||||||||||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ | $ | $ | ( | ) | $ |
(1) | We declared dividend per share on our common stock of $ |
See Notes to Consolidated Financial Statements. | ||
75 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Operating activities: | ||||||||
Income (loss) from continuing operations, net of tax | $ | ( | ) | $ | ||||
Income (loss) from discontinued operations, net of tax | ( | ) | ||||||
Net income (loss) | ( | ) | ||||||
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||||||||
Provision for credit losses | ||||||||
Depreciation and amortization, net | ||||||||
Deferred tax benefit | ( | ) | ( | ) | ||||
Net securities losses (gains) | ( | ) | ||||||
Gain on sales of loans | ( | ) | ( | ) | ||||
Stock-based compensation expense | ||||||||
Other | ( | ) | ||||||
Loans held for sale: | ||||||||
Originations and purchases | ( | ) | ( | ) | ||||
Proceeds from sales and paydowns | ||||||||
Changes in operating assets and liabilities: | ||||||||
Changes in interest receivable | ||||||||
Changes in other assets | ||||||||
Changes in interest payable | ( | ) | ( | ) | ||||
Changes in other liabilities | ||||||||
Net change from discontinued operations | ||||||||
Net cash from operating activities | ||||||||
Investing activities: | ||||||||
Securities available for sale: | ||||||||
Purchases | ( | ) | ( | ) | ||||
Proceeds from paydowns and maturities | ||||||||
Proceeds from sales | ||||||||
Securities held to maturity: | ||||||||
Purchases | ( | ) | ||||||
Proceeds from paydowns and maturities | ||||||||
Loans: | ||||||||
Net changes in loans held for investment | ( | ) | ||||||
Principal recoveries of loans previously charged off | ||||||||
Net purchases of premises and equipment | ( | ) | ( | ) | ||||
Net cash from other investing activities | ( | ) | ( | ) | ||||
Net cash from investing activities | ( | ) | ||||||
See Notes to Consolidated Financial Statements. | ||
76 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Financing activities: | ||||||||
Deposits and borrowings: | ||||||||
Changes in deposits | $ | $ | ||||||
Issuance of securitized debt obligations | ||||||||
Maturities and paydowns of securitized debt obligations | ( | ) | ( | ) | ||||
Issuance of senior and subordinated notes and long-term FHLB advances | ||||||||
Maturities and paydowns of senior and subordinated notes and long-term FHLB advances | ( | ) | ( | ) | ||||
Changes in other borrowings | ( | ) | ( | ) | ||||
Common stock: | ||||||||
Net proceeds from issuances | ||||||||
Dividends paid | ( | ) | ( | ) | ||||
Preferred stock: | ||||||||
Net proceeds from issuances | ||||||||
Dividends paid | ( | ) | ( | ) | ||||
Redemptions | ( | ) | ||||||
Purchases of treasury stock | ( | ) | ( | ) | ||||
Proceeds from share-based payment activities | ||||||||
Net cash from financing activities | ( | ) | ||||||
Changes in cash, cash equivalents and restricted cash for securitization investors | ||||||||
Cash, cash equivalents and restricted cash for securitization investors, beginning of the period | ||||||||
Cash, cash equivalents and restricted cash for securitization investors, end of the period | $ | $ | ||||||
Supplemental cash flow information: | ||||||||
Non-cash items: | ||||||||
Net transfers from (to) loans held for investment to (from) loans held for sale | $ | ( | ) | $ | ||||
Interest paid | ||||||||
Income tax paid |
See Notes to Consolidated Financial Statements. | ||
77 | Capital One Financial Corporation (COF) |
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
• | Capital One Bank (USA), National Association (“COBNA”), which offers credit and debit card products, other lending products and deposit products; and |
• | Capital One, National Association (“CONA”), which offers a broad spectrum of banking products and financial services to consumers, small businesses and commercial clients. |
78 | Capital One Financial Corporation (COF) |
79 | Capital One Financial Corporation (COF) |
80 | Capital One Financial Corporation (COF) |
81 | Capital One Financial Corporation (COF) |
82 | Capital One Financial Corporation (COF) |
83 | Capital One Financial Corporation (COF) |
84 | Capital One Financial Corporation (COF) |
85 | Capital One Financial Corporation (COF) |
Standard | Guidance | Adoption Timing and Financial Statement Impacts | ||
Cloud Computing ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract Issued August 2018 | Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). | We adopted this guidance in the first quarter of 2020 using the prospective method of adoption. Our adoption of this standard did not have a material impact on our consolidated financial statements. | ||
Goodwill Impairment Test Simplification ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Issued January 2017 | Historical guidance for goodwill impairment testing prescribed that the company must compare each reporting unit’s carrying value to its fair value. If the carrying value exceeds fair value, an entity performs the second step, which assigns the reporting unit’s fair value to its assets and liabilities, including unrecognized assets and liabilities, in the same manner as required in purchase accounting and then records an impairment. This ASU eliminates the second step. Under the new guidance, an impairment of a reporting unit’s goodwill is determined based on the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the amount of goodwill allocated to the reporting unit. | We adopted this guidance in the first quarter of 2020 using the prospective method of adoption. Our adoption of this standard did not have a material impact on our consolidated financial statements. | ||
Current Expected Credit Loss (“CECL”) ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Issued June 2016 | Requires use of the current expected credit loss model that is based on expected losses (net of expected recoveries), rather than incurred losses, to determine our allowance for credit losses on financial assets measured at amortized cost, certain net investments in leases and certain off-balance sheet arrangements. Replaces current accounting for purchased credit-impaired (“PCI”) and impaired loans. Amends the other-than-temporary impairment model for available for sale debt securities. The new guidance requires that credit losses be recorded through an allowance approach, rather than through permanent write-downs for credit losses and subsequent accretion of positive changes through interest income over time. | We adopted this guidance in the first quarter of 2020, using the modified retrospective method of adoption. Upon adoption, we recorded an increase to our reserves for credit losses of $2.9 billion, an increase to our deferred tax assets of $694 million, and a decrease to our retained earnings of $2.2 billion. Additionally, we made a prospective change to present our finance charge and fee reserve as a component of our allowance for credit losses instead of as an offset to our loans held for investment. This balance sheet reclassification increased our allowance for credit losses, with a corresponding increase to our loans held for investment by $462 million as of January 1, 2020. |
86 | Capital One Financial Corporation (COF) |
NOTE 2—INVESTMENT SECURITIES |
June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Amortized Cost | Allowance for Credit Losses | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | |||||||||||||||
Investment securities available for sale: | ||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
RMBS: | ||||||||||||||||||||
Agency | ( | ) | ||||||||||||||||||
Non-agency | ( | ) | ( | ) | ||||||||||||||||
Total RMBS | ( | ) | ( | ) | ||||||||||||||||
Agency CMBS | ( | ) | ||||||||||||||||||
Other securities(1) | ( | ) | ||||||||||||||||||
Total investment securities available for sale | $ | $ | ( | ) | $ | $ | ( | ) | $ |
December 31, 2019 | ||||||||||||||||
(Dollars in millions) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||
Investment securities available for sale: | ||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | ) | $ | ||||||||||
RMBS: | ||||||||||||||||
Agency | ( | ) | ||||||||||||||
Non-agency | ( | ) | ||||||||||||||
Total RMBS | ( | ) | ||||||||||||||
Agency CMBS | ( | ) | ||||||||||||||
Other securities(1) | ||||||||||||||||
Total investment securities available for sale | $ | $ | $ | ( | ) | $ |
(1) | Includes primarily supranational bonds, foreign government bonds and other asset-backed securities. |
87 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
(Dollars in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Investment securities available for sale without an allowance for credit losses: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | ||||||||||||||
RMBS: | ||||||||||||||||||||||||
Agency | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Non-agency | ||||||||||||||||||||||||
Total RMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Agency CMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Other securities(1) | ( | ) | ( | ) | ||||||||||||||||||||
Total investment securities available for sale in a gross unrealized loss position without an allowance for credit losses(2) | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
December 31, 2019 | ||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||
(Dollars in millions) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||
Investment securities available for sale: | ||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | ||||||||||||||
RMBS: | ||||||||||||||||||||||||
Agency | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Non-agency | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Total RMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Agency CMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Other securities(1) | ||||||||||||||||||||||||
Total investment securities available for sale in a gross unrealized loss position | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) |
(1) | Includes primarily supranational bonds,foreign government bonds, and other asset-backed securities. |
(2) | Consists of approximately |
88 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Due in 1 Year or Less | Due > 1 Year through 5 Years | Due > 5 Years through 10 Years | Due > 10 Years | Total | |||||||||||||||
Fair value of securities available for sale: | ||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | $ | |||||||||||||||
RMBS(1): | ||||||||||||||||||||
Agency | ||||||||||||||||||||
Non-agency | ||||||||||||||||||||
Total RMBS | ||||||||||||||||||||
Agency CMBS(1) | ||||||||||||||||||||
Other securities | ||||||||||||||||||||
Total securities available for sale | $ | $ | $ | $ | $ | |||||||||||||||
Amortized cost of securities available for sale | $ | $ | $ | $ | $ | |||||||||||||||
Weighted-average yield for securities available for sale | % | % | % | % | % |
(1) | As of June 30, 2020, the weighted-average expected maturities of RMBS and Agency CMBS are |
89 | Capital One Financial Corporation (COF) |
NOTE 3—LOANS |
June 30, 2020 | ||||||||||||||||||||||||
Delinquent Loans | ||||||||||||||||||||||||
(Dollars in millions) | Current | 30-59 Days | 60-89 Days | > 90 Days | Total Delinquent Loans | Total Loans | ||||||||||||||||||
Credit Card: | ||||||||||||||||||||||||
Domestic credit card | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
International card businesses | ||||||||||||||||||||||||
Total credit card | ||||||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||||
Auto | ||||||||||||||||||||||||
Retail banking | ||||||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||||||
Total loans(1) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
% of Total loans | % | % | % | % | % | % |
90 | Capital One Financial Corporation (COF) |
December 31, 2019 | ||||||||||||||||||||||||||||
Delinquent Loans | ||||||||||||||||||||||||||||
(Dollars in millions) | Current | 30-59 Days | 60-89 Days | > 90 Days | Total Delinquent Loans | PCI Loans | Total Loans | |||||||||||||||||||||
Credit Card: | ||||||||||||||||||||||||||||
Domestic credit card | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
International card businesses | ||||||||||||||||||||||||||||
Total credit card | ||||||||||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||||||||
Auto | ||||||||||||||||||||||||||||
Retail banking | ||||||||||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||||||||||
Total loans(1) | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
% of Total loans | % | % | % | % | % | % | % |
(1) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||
(Dollars in millions) | > 90 Days and Accruing | Nonperforming Loans(1) | Nonperforming Loans Without an Allowance | > 90 Days and Accruing | Nonperforming Loans | |||||||||||||||
Credit Card: | ||||||||||||||||||||
Domestic credit card | $ | N/A | $ | $ | N/A | |||||||||||||||
International card businesses | $ | $ | ||||||||||||||||||
Total credit card | ||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||
Auto | ||||||||||||||||||||
Retail banking | ||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||
% of Total loans held for investment | % | % | % | % | % |
(1) | We recognized interest income for loans classified as nonperforming of $ |
91 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||
(Dollars in millions) | Revolving Loans | Revolving Loans Converted to Term | Total | |||||||||
Credit Card: | ||||||||||||
Domestic credit card: | ||||||||||||
Current | $ | $ | $ | |||||||||
30-59 days | ||||||||||||
60-89 days | ||||||||||||
Greater than 90 days | ||||||||||||
Total domestic credit card | ||||||||||||
International card businesses: | ||||||||||||
Current | ||||||||||||
30-59 days | ||||||||||||
60-89 days | ||||||||||||
Greater than 90 days | ||||||||||||
Total international card businesses | ||||||||||||
Total credit card | $ | $ | $ |
92 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Term Loans by Vintage Year | ||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Total Term Loans | Revolving Loans | Revolving Loans Converted to Term | Total | December 31, 2019 | |||||||||||||||||||||||||||||||||
Auto—At origination FICO scores:(1) | ||||||||||||||||||||||||||||||||||||||||||||
Greater than 660 | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
621-660 | ||||||||||||||||||||||||||||||||||||||||||||
620 or below | ||||||||||||||||||||||||||||||||||||||||||||
Total auto | ||||||||||||||||||||||||||||||||||||||||||||
Retail banking—Delinquency status: | ||||||||||||||||||||||||||||||||||||||||||||
Current | ||||||||||||||||||||||||||||||||||||||||||||
30-59 days | ||||||||||||||||||||||||||||||||||||||||||||
60-89 days | ||||||||||||||||||||||||||||||||||||||||||||
Greater than 90 days | ||||||||||||||||||||||||||||||||||||||||||||
Total retail banking(2) | ||||||||||||||||||||||||||||||||||||||||||||
Total consumer banking | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
(1) | Amounts represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category. |
(2) | Includes the Paycheck Protection Program (“PPP”) loans of $ |
• | Noncriticized: Loans that have not been designated as criticized, frequently referred to as “pass” loans. |
• | Criticized performing: Loans in which the financial condition of the obligor is stressed, affecting earnings, cash flows or collateral values. The borrower currently has adequate capacity to meet near-term obligations; however, the stress, left unabated, may result in deterioration of the repayment prospects at some future date. |
• | Criticized nonperforming: Loans that are not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Loans classified as criticized nonperforming have a well-defined weakness, or weaknesses, which jeopardize the full repayment of the debt. These loans are characterized by the distinct possibility that we will sustain a credit loss if the deficiencies are not corrected and are generally placed on nonaccrual status. |
93 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||
Term Loans by Vintage Year | ||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2018 | 2017 | 2016 | Prior | Total Term Loans | Revolving Loans | Revolving Loans Converted to Term | Total | ||||||||||||||||||||||||||||||
Internal risk rating:(1) | ||||||||||||||||||||||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||||||||||||||||||||||
Noncriticized | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Criticized performing | ||||||||||||||||||||||||||||||||||||||||
Criticized nonperforming | ||||||||||||||||||||||||||||||||||||||||
Total commercial and multifamily real estate | ||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||||||||||||||
Noncriticized | ||||||||||||||||||||||||||||||||||||||||
Criticized performing | ||||||||||||||||||||||||||||||||||||||||
Criticized nonperforming | ||||||||||||||||||||||||||||||||||||||||
Total commercial and industrial | ||||||||||||||||||||||||||||||||||||||||
Total commercial banking(2) | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2019 | |||||||||||||||||||||
(Dollars in millions) | Commercial and Multifamily Real Estate | % of Total | Commercial and Industrial | % of Total | Total Commercial Banking | % of Total | |||||||||||||||
Internal risk rating:(1) | |||||||||||||||||||||
Noncriticized | $ | % | $ | % | $ | % | |||||||||||||||
Criticized performing | |||||||||||||||||||||
Criticized nonperforming | |||||||||||||||||||||
PCI loans | |||||||||||||||||||||
Total | $ | % | $ | % | $ | % |
(1) | Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities. |
(2) | Includes PPP loans of $ |
94 | Capital One Financial Corporation (COF) |
Total Loans Modified(1) | Three Months Ended June 30, 2020 | |||||||||||||||||||||
Reduced Interest Rate | Term Extension | Balance Reduction | ||||||||||||||||||||
(Dollars in millions) | % of TDR Activity(2) | Average Rate Reduction | % of TDR Activity(2) | Average Term Extension (Months) | % of TDR Activity(2) | Gross Balance Reduction | ||||||||||||||||
Credit Card: | ||||||||||||||||||||||
Domestic credit card | $ | % | % | % | % | $ | ||||||||||||||||
International card businesses | ||||||||||||||||||||||
Total credit card | ||||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||
Auto | ||||||||||||||||||||||
Retail banking | ||||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||||
Total | $ | $ |
Total Loans Modified(1) | Six Months Ended June 30, 2020 | |||||||||||||||||||||
Reduced Interest Rate | Term Extension | Balance Reduction | ||||||||||||||||||||
(Dollars in millions) | % of TDR Activity(2) | Average Rate Reduction | % of TDR Activity(2) | Average Term Extension (Months) | % of TDR Activity(2) | Gross Balance Reduction | ||||||||||||||||
Credit Card: | ||||||||||||||||||||||
Domestic credit card | $ | % | % | % | % | $ | ||||||||||||||||
International card businesses | ||||||||||||||||||||||
Total credit card | ||||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||
Auto | ||||||||||||||||||||||
Retail banking | ||||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||
Commercial and multifamily real estate | ||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||||
Total | $ | $ |
95 | Capital One Financial Corporation (COF) |
Total Loans Modified(1) | Three Months Ended June 30, 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 | $ | % | % | % | |||||||||||
International card businesses | |||||||||||||||
Total credit card | |||||||||||||||
Consumer Banking: | |||||||||||||||
Auto | |||||||||||||||
Retail banking | |||||||||||||||
Total consumer banking | |||||||||||||||
Commercial Banking: | |||||||||||||||
Commercial and industrial | |||||||||||||||
Total commercial lending | |||||||||||||||
Small-ticket commercial real estate | |||||||||||||||
Total commercial banking | |||||||||||||||
Total | $ |
Total Loans Modified(1) | Six Months Ended June 30, 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 | $ | % | % | % | |||||||||||
International card businesses | |||||||||||||||
Total credit card | |||||||||||||||
Consumer Banking: | |||||||||||||||
Auto | |||||||||||||||
Retail banking | |||||||||||||||
Total consumer banking | |||||||||||||||
Commercial Banking: | |||||||||||||||
Commercial and multifamily real estate | |||||||||||||||
Commercial and industrial | |||||||||||||||
Total commercial lending | |||||||||||||||
Small-ticket commercial real estate | |||||||||||||||
Total commercial banking | |||||||||||||||
Total | $ |
(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. |
96 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(Dollars in millions) | Number of Contracts | Amount | Number of Contracts | Amount | Number of Contracts | Amount | Number of Contracts | Amount | ||||||||||||||||||||
Credit Card: | ||||||||||||||||||||||||||||
Domestic credit card | $ | $ | $ | $ | ||||||||||||||||||||||||
International card businesses | ||||||||||||||||||||||||||||
Total credit card | ||||||||||||||||||||||||||||
Consumer Banking: | ||||||||||||||||||||||||||||
Auto | ||||||||||||||||||||||||||||
Retail banking | ||||||||||||||||||||||||||||
Total consumer banking | ||||||||||||||||||||||||||||
Commercial Banking: | ||||||||||||||||||||||||||||
Commercial and industrial | ||||||||||||||||||||||||||||
Total commercial banking | ||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
97 | Capital One Financial Corporation (COF) |
NOTE 4—ALLOWANCE FOR CREDIT LOSSES AND RESERVE FOR UNFUNDED LENDING COMMITMENTS |
98 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2020 | ||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||
Balance as of March 31, 2020 | $ | $ | $ | $ | ||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Recoveries(1) | ||||||||||||||||
Net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for credit losses | ||||||||||||||||
Allowance build for credit losses | ||||||||||||||||
Other changes(2) | ||||||||||||||||
Balance as of June 30, 2020 | ||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||
Balance as of March 31, 2020 | ||||||||||||||||
Benefit for losses on unfunded lending commitments | ( | ) | ( | ) | ||||||||||||
Balance as of June 30, 2020 | ||||||||||||||||
Combined allowance and reserve as of June 30, 2020 | $ | $ | $ | $ |
Six Months Ended June 30, 2020 | ||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking | Total | ||||||||||||
Allowance for credit losses: | ||||||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ||||||||||||
Cumulative effects from adoption of the CECL standard | ||||||||||||||||
Finance charge and fee reserve reclassification(3) | ||||||||||||||||
Balance as of January 1, 2020 | ||||||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Recoveries(1) | ||||||||||||||||
Net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for credit losses | ||||||||||||||||
Allowance build for credit losses | ||||||||||||||||
Other changes(2) | ( | ) | ( | ) | ||||||||||||
Balance as of June 30, 2020 | ||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||
Balance as of December 31, 2019 | ||||||||||||||||
Cumulative effects from adoption of the CECL standard | ( | ) | ||||||||||||||
Balance as of January 1, 2020 | ||||||||||||||||
Provision for losses on unfunded lending commitments | ||||||||||||||||
Balance as of June 30, 2020 | ||||||||||||||||
Combined allowance and reserve as of June 30, 2020 | $ | $ | $ | $ |
99 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2019 | ||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking | Total | ||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||
Balance as of March 31, 2019 | $ | $ | $ | $ | ||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Recoveries(1) | ||||||||||||||||
Net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for loan and lease losses | ||||||||||||||||
Allowance build (release) for loan and lease losses | ( | ) | ( | ) | ( | ) | ||||||||||
Other changes(2) | ( | ) | ( | ) | ||||||||||||
Balance as of June 30, 2019 | ||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||
Balance as of March 31, 2019 | ||||||||||||||||
Provision for losses on unfunded lending commitments | ||||||||||||||||
Balance as of June 30, 2019 | ||||||||||||||||
Combined allowance and reserve as of June 30, 2019 | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | ||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking | Total | ||||||||||||
Allowance for loan and lease losses: | ||||||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | ||||||||||||
Charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Recoveries(1) | ||||||||||||||||
Net charge-offs | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Provision for loan and lease losses | ||||||||||||||||
Allowance build (release) for loan and lease losses | ( | ) | ( | ) | ||||||||||||
Other changes(2) | ||||||||||||||||
Balance as of June 30, 2019 | ||||||||||||||||
Reserve for unfunded lending commitments: | ||||||||||||||||
Balance as of December 31, 2018 | ||||||||||||||||
Provision for losses on unfunded lending commitments | ||||||||||||||||
Balance as of June 30, 2019 | ||||||||||||||||
Combined allowance and reserve as of June 30, 2019 | $ | $ | $ | $ |
(1) | The amount and timing of recoveries is impacted by our collection strategies, which are based on customer behavior and risk profile and include direct customer communications, repossession of collateral, the periodic sale of charged off loans as well as additional strategies, such as litigation. |
(2) | Represents foreign currency translation adjustments. |
(3) |
100 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Estimated reimbursements from partners, beginning of period | $ | $ | ||||||
Amounts due from partners which reduced net charge-offs | ( | ) | ( | ) | ||||
Amounts estimated to be charged to partners which reduced provision for credit losses | ||||||||
Estimated reimbursements from partners, end of period | $ | $ |
Six Months Ended June 30, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Estimated reimbursements from partners, beginning of period(1) | $ | $ | ||||||
Amounts due from partners which reduced net charge-offs | ( | ) | ( | ) | ||||
Amounts estimated to be charged to partners which reduced provision for credit losses | ||||||||
Estimated reimbursements from partners, end of period | $ | $ |
(1) |
101 | Capital One Financial Corporation (COF) |
NOTE 5—VARIABLE INTEREST ENTITIES AND SECURITIZATIONS |
June 30, 2020 | ||||||||||||||||||||
Consolidated | Unconsolidated | |||||||||||||||||||
(Dollars in millions) | Carrying Amount of Assets | Carrying Amount of Liabilities | Carrying Amount of Assets | Carrying Amount of Liabilities | Maximum Exposure to Loss | |||||||||||||||
Securitization-Related VIEs: | ||||||||||||||||||||
Credit card loan securitizations(1) | $ | $ | $ | $ | $ | |||||||||||||||
Auto loan securitizations | ||||||||||||||||||||
Home loan securitizations | ||||||||||||||||||||
Total securitization-related VIEs | ||||||||||||||||||||
Other VIEs:(2) | ||||||||||||||||||||
Affordable housing entities | ||||||||||||||||||||
Entities that provide capital to low-income and rural communities | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total other VIEs | ||||||||||||||||||||
Total VIEs | $ | $ | $ | $ | $ |
102 | Capital One Financial Corporation (COF) |
December 31, 2019 | ||||||||||||||||||||
Consolidated | Unconsolidated | |||||||||||||||||||
(Dollars in millions) | Carrying Amount of Assets | Carrying Amount of Liabilities | Carrying Amount of Assets | Carrying Amount of Liabilities | Maximum Exposure to Loss | |||||||||||||||
Securitization-Related VIEs: | ||||||||||||||||||||
Credit card loan securitizations(1) | $ | $ | $ | $ | $ | |||||||||||||||
Auto loan securitizations | ||||||||||||||||||||
Home loan securitizations | ||||||||||||||||||||
Total securitization-related VIEs | ||||||||||||||||||||
Other VIEs:(2) | ||||||||||||||||||||
Affordable housing entities | ||||||||||||||||||||
Entities that provide capital to low-income and rural communities | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total other VIEs | ||||||||||||||||||||
Total VIEs | $ | $ | $ | $ | $ |
(1) | Represents the carrying amount of assets and liabilities owned by the VIE, which includes the seller’s interest and repurchased notes held by other related parties. |
(2) |
103 | Capital One Financial Corporation (COF) |
(Dollars in millions) | Credit Card | Auto | Mortgages | |||||||||
June 30, 2020: | ||||||||||||
Securities held by third-party investors | $ | $ | $ | |||||||||
Receivables in the trust | ||||||||||||
Cash balance of spread or reserve accounts | ||||||||||||
Retained interests | Yes | Yes | Yes | |||||||||
Servicing retained | Yes | Yes | No | |||||||||
December 31, 2019: | ||||||||||||
Securities held by third-party investors | $ | $ | $ | |||||||||
Receivables in the trust | ||||||||||||
Cash balance of spread or reserve accounts | ||||||||||||
Retained interests | Yes | Yes | Yes | |||||||||
Servicing retained | Yes | Yes | No |
104 | Capital One Financial Corporation (COF) |
105 | Capital One Financial Corporation (COF) |
NOTE 6—GOODWILL AND INTANGIBLE ASSETS |
June 30, 2020 | ||||||||||||
(Dollars in millions) | Carrying Amount of Assets | Accumulated Amortization | Net Carrying Amount | |||||||||
Goodwill | $ | N/A | $ | |||||||||
Intangible assets: | ||||||||||||
Purchased credit card relationship (“PCCR”) intangibles | $ | ( | ) | |||||||||
Other(1) | ( | ) | ||||||||||
Total intangible assets | ( | ) | ||||||||||
Total goodwill and intangible assets | $ | $ | ( | ) | $ | |||||||
Commercial MSRs(2) | $ | $ | ( | ) | $ | |||||||
December 31, 2019 | ||||||||||||
(Dollars in millions) | Carrying Amount of Assets | Accumulated Amortization | Net Carrying Amount | |||||||||
Goodwill | $ | N/A | $ | |||||||||
Intangible assets: | ||||||||||||
PCCR intangibles | $ | ( | ) | |||||||||
Other(1) | ( | ) | ||||||||||
Total intangible assets | ( | ) | ||||||||||
Total goodwill and intangible assets | $ | $ | ( | ) | $ | |||||||
Commercial MSRs(2) | $ | $ | ( | ) | $ |
(1) | Primarily consists of intangibles for sponsorship, customer and merchant relationships, partnership, trade name and other contract intangibles. |
(2) | Commercial MSRs are accounted for under the amortization method on our consolidated balance sheets. |
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking | Total | ||||||||||||
Balance as of December 31, 2019 | $ | $ | $ | $ | ||||||||||||
Other adjustments(1) | ( | ) | ( | ) | ||||||||||||
Balance as of June 30, 2020 | $ | $ | $ | $ |
(1) | Represents foreign currency translation adjustments and measurement period adjustments on prior period acquisitions. |
106 | Capital One Financial Corporation (COF) |
NOTE 7—DEPOSITS AND BORROWINGS |
(Dollars in millions) | June 30, 2020 | December 31, 2019 | ||||||
Deposits: | ||||||||
Non-interest-bearing deposits | $ | $ | ||||||
Interest-bearing deposits(1) | ||||||||
Total deposits | $ | $ | ||||||
Short-term borrowings: | ||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | $ | $ | ||||||
FHLB advances | ||||||||
Total short-term borrowings | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||
(Dollars in millions) | Maturity Dates | Stated Interest Rates | Weighted-Average Interest Rate | Carrying Value | Carrying Value | ||||||||||
Long-term debt: | |||||||||||||||
Securitized debt obligations | 2020-2026 | 0.53% - 3.01% | % | $ | $ | ||||||||||
Senior and subordinated notes: | |||||||||||||||
Fixed unsecured senior debt(2) | 2020-2029 | 0.80 - 4.75 | |||||||||||||
Floating unsecured senior debt | 2020-2023 | 0.81 - 1.91 | |||||||||||||
Total unsecured senior debt | |||||||||||||||
Fixed unsecured subordinated debt | 2023-2026 | 3.38 - 4.20 | |||||||||||||
Total senior and subordinated notes | |||||||||||||||
Other long-term borrowings: | |||||||||||||||
Finance lease liabilities | 2020-2031 | 1.63 - 9.91 | |||||||||||||
Total other long-term borrowings | |||||||||||||||
Total long-term debt | $ | $ | |||||||||||||
Total short-term borrowings and long-term debt | $ | $ |
(1) | Includes $ |
(2) | Includes $ |
107 | Capital One Financial Corporation (COF) |
NOTE 8—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES |
• | Fair Value Hedges: We designate derivatives as fair value hedges when they are used to manage our exposure to changes in the fair value of certain financial assets and liabilities, which fluctuate in value as a result of movements in interest rates. Changes in the fair value of derivatives designated as fair value hedges are presented in the same line item on our consolidated statements of income as the earnings effect of the hedged items. Our fair value hedges primarily consist of interest rate swaps that are intended to modify our exposure to interest rate risk on various fixed-rate financial assets and liabilities. |
• | Cash Flow Hedges: We designate derivatives as cash flow hedges when they are used to manage our exposure to variability in cash flows related to forecasted transactions. Changes in the fair value of derivatives designated as cash flow hedges are recorded as a component of AOCI. Those amounts are reclassified into earnings in the same period during which the forecasted transactions impact earnings and presented in the same line item on our consolidated statements of income as the earnings effect of the hedged items. Our cash flow hedges use interest rate swaps and floors that are intended to hedge the variability in interest receipts or interest payments on some of our variable-rate financial assets or liabilities. We also enter into foreign currency forward contracts to hedge our exposure to variability in cash flows related to intercompany borrowings denominated in foreign currencies. |
• | Net Investment Hedges: We use net investment hedges to manage the foreign currency exposure related to our net investments in foreign operations that have functional currencies other than the U.S. dollar. Changes in the fair value of net investment hedges are recorded in the translation adjustment component of AOCI, offsetting the translation gain or loss from those foreign operations. We execute net investment hedges using foreign currency forward contracts to hedge the translation exposure of the net investment in our foreign operations under the forward method. |
• | Free-Standing Derivatives: Our free-standing derivatives primarily consist of our customer accommodation derivatives and other economic hedges. The customer accommodation derivatives and the related offsetting contracts are mainly interest rate, commodity and foreign currency contracts. The other free-standing derivatives are primarily used to economically hedge the risk of changes in the fair value of our commercial mortgage loan origination and purchase commitments as well as other interests held. Changes in the fair value of free-standing derivatives are recorded in earnings as a component of other non-interest income. |
108 | Capital One Financial Corporation (COF) |
• | CCPs: We clear eligible OTC derivatives with CCPs as part of our regulatory requirements. Futures commission merchants (“FCMs”) serve as the intermediary between CCPs and us. CCPs require that we post initial and variation margin through our FCMs to mitigate the risk of non-payment or default. Initial margin is required upfront by CCPs as collateral against potential losses on our cleared derivative contracts and variation margin is exchanged on a daily basis to account for mark-to-market changes in those derivative contracts. For CME and LCH-cleared OTC derivatives, we characterize variation margin cash payments as settlements. Our FCM agreements governing these derivative transactions include provisions that may require us to post additional collateral under certain circumstances. |
• | Bilateral Counterparties: We enter into legally enforceable master netting agreements and collateral agreements, where possible, with bilateral derivative counterparties to mitigate the risk of default. We review our collateral positions on a daily basis and exchange collateral with our counterparties in accordance with these agreements. These bilateral agreements typically provide the right to offset exposure with the same counterparty and require the party in a net liability position to post collateral. Agreements with certain bilateral counterparties require both parties to maintain collateral in the event the fair values of derivative instruments exceed established exposure thresholds. Certain of these bilateral agreements include provisions requiring that our debt maintain a credit rating of investment grade or above by each of the major credit rating agencies. In the event of a downgrade of our debt credit rating below investment grade, some of our counterparties would have the right to terminate their derivative contract and close out existing positions. |
109 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||
Notional or Contractual Amount | Derivative(1) | Notional or Contractual Amount | Derivative(1) | |||||||||||||||||||||
(Dollars in millions) | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
Derivatives designated as accounting hedges: | ||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||
Fair value hedges | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||
Total interest rate contracts | ||||||||||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||
Fair value hedges | ||||||||||||||||||||||||
Cash flow hedges | ||||||||||||||||||||||||
Net investment hedges | ||||||||||||||||||||||||
Total foreign exchange contracts | ||||||||||||||||||||||||
Total derivatives designated as accounting hedges | ||||||||||||||||||||||||
Derivatives not designated as accounting hedges: | ||||||||||||||||||||||||
Customer accommodation: | ||||||||||||||||||||||||
Interest rate contracts | ||||||||||||||||||||||||
Commodity contracts | ||||||||||||||||||||||||
Foreign exchange and other contracts | ||||||||||||||||||||||||
Total customer accommodation | ||||||||||||||||||||||||
Other interest rate exposures(2) | ||||||||||||||||||||||||
Other contracts | ||||||||||||||||||||||||
Total derivatives not designated as accounting hedges | ||||||||||||||||||||||||
Total derivatives | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Less: netting adjustment(3) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Total derivative assets/liabilities | $ | $ | $ | $ |
(1) | Does not reflect $ |
(2) | Other interest rate exposures include commercial mortgage-related derivatives and interest rate swaps. |
(3) | Represents balance sheet netting of derivative assets and liabilities, and related payables and receivables for cash collateral held or placed with the same counterparty. |
110 | Capital One Financial Corporation (COF) |
June 30, 2020 | December 31, 2019 | |||||||||||||||||||||||
Carrying Amount Assets/(Liabilities) | Cumulative Amount of Basis Adjustments Included in the Carrying Amount | Carrying Amount Assets/(Liabilities) | Cumulative Amount of Basis Adjustments Included in the Carrying Amount | |||||||||||||||||||||
(Dollars in millions) | Total Assets/(Liabilities) | Discontinued-Hedging Relationships | Total Assets/(Liabilities) | Discontinued-Hedging Relationships | ||||||||||||||||||||
Line item on our consolidated balance sheets in which the hedged item is included: | ||||||||||||||||||||||||
Investment securities available for sale(1)(2) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Interest-bearing deposits | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
Securitized debt obligations | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Senior and subordinated notes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) |
(1) | These amounts include the amortized cost basis of our investment securities designated in hedging relationships for which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. In the second quarter of 2020, we terminated all last of layer hedging relationships with cumulative basis adjustment totaling $ |
(2) | Carrying value represents amortized cost. |
111 | Capital One Financial Corporation (COF) |
Gross Amounts | Gross Amounts Offset in the Balance Sheet | Net Amounts as Recognized | Securities Collateral Held Under Master Netting Agreements | |||||||||||||||||||||
(Dollars in millions) | Financial Instruments | Cash Collateral Received | Net Exposure | |||||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||||||||
Derivative assets(1) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||
Derivative assets(1) | ( | ) | ( | ) |
Gross Amounts | Gross Amounts Offset in the Balance Sheet | Net Amounts as Recognized | Securities Collateral Pledged Under Master Netting Agreements | |||||||||||||||||||||
(Dollars in millions) | Financial Instruments | Cash Collateral Pledged | Net Exposure | |||||||||||||||||||||
As of June 30, 2020 | ||||||||||||||||||||||||
Derivative liabilities(1) | $ | $ | ( | ) | $ | ( | ) | $ | $ | $ | ||||||||||||||
Repurchase agreements(2) | ( | ) | ||||||||||||||||||||||
As of December 31, 2019 | ||||||||||||||||||||||||
Derivative liabilities(1) | ( | ) | ( | ) | ||||||||||||||||||||
Repurchase agreements(2) | ( | ) |
(1) | We received cash collateral from derivative counterparties totaling $ |
(2) | Under our customer repurchase agreements, which mature the next business day, we pledged collateral with a fair value of $ |
112 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||
Net Interest Income | Non-Interest Income | |||||||||||||||||||||||||||
(Dollars in millions) | Investment Securities | Loans, Including Loans Held for Sale | Other | Interest-bearing Deposits | Securitized Debt Obligations | Senior and Subordinated Notes | Other | |||||||||||||||||||||
Total amounts presented in our consolidated statements of income | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Fair value hedging relationships: | ||||||||||||||||||||||||||||
Interest rate and foreign exchange contracts: | ||||||||||||||||||||||||||||
Interest recognized on derivatives | $ | ( | ) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Gains (losses) recognized on derivatives | ( | ) | ( | ) | ||||||||||||||||||||||||
Gains (losses) recognized on hedged items(1) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
Excluded component of fair value hedges(2) | ||||||||||||||||||||||||||||
Net expense recognized on fair value hedges | $ | ( | ) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Cash flow hedging relationships:(3) | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Realized losses reclassified from AOCI into net income | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||||||
Realized gains reclassified from AOCI into net income(4) | ( | ) | ||||||||||||||||||||||||||
Net income (expense) recognized on cash flow hedges | $ | $ | $ | $ | $ | $ | $ | ( | ) |
113 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||
Net Interest Income | Non-Interest Income | |||||||||||||||||||||||||||
(Dollars in millions) | Investment Securities | Loans, Including Loans Held for Sale | Other | Interest-bearing Deposits | Securitized Debt Obligations | Senior and Subordinated Notes | Other | |||||||||||||||||||||
Total amounts presented in our consolidated statements of income | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Fair value hedging relationships: | ||||||||||||||||||||||||||||
Interest rate and foreign exchange contracts: | ||||||||||||||||||||||||||||
Interest recognized on derivatives | $ | ( | ) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Gains (losses) recognized on derivatives | ( | ) | ||||||||||||||||||||||||||
Gains (losses) recognized on hedged items(1) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
Excluded component of fair value hedges(2) | ( | ) | ||||||||||||||||||||||||||
Net income (expense) recognized on fair value hedges | $ | ( | ) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Cash flow hedging relationships:(3) | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Realized gains reclassified from AOCI into net income | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||||||
Realized gains reclassified from AOCI into net income(4) | ( | ) | ||||||||||||||||||||||||||
Net income recognized on cash flow hedges | $ | $ | $ | $ | $ | $ | $ | ( | ) |
114 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||
Net Interest Income | Non-Interest Income | |||||||||||||||||||||||||||
(Dollars in millions) | Investment Securities | Loans, Including Loans Held for Sale | Other | Interest-bearing Deposits | Securitized Debt Obligations | Senior and Subordinated Notes | Other | |||||||||||||||||||||
Total amounts presented in our consolidated statements of income | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Fair value hedging relationships: | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Interest recognized on derivatives | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
Gains (losses) recognized on derivatives | ( | ) | ||||||||||||||||||||||||||
Gains (losses) recognized on hedged items(1) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
Net income (expense) recognized on fair value hedges | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
Cash flow hedging relationships:(3) | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Realized losses reclassified from AOCI into net income | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | $ | |||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||||||
Realized gains (losses) reclassified from AOCI into net income(4) | ( | ) | ||||||||||||||||||||||||||
Net income (expense) recognized on cash flow hedges | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) |
115 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||
Net Interest Income | Non-Interest Income | |||||||||||||||||||||||||||
(Dollars in millions) | Investment Securities | Loans, Including Loans Held for Sale | Other | Interest-bearing Deposits | Securitized Debt Obligations | Senior and Subordinated Notes | Other | |||||||||||||||||||||
Total amounts presented in our consolidated statements of income | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Fair value hedging relationships: | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Interest recognized on derivatives | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
Gains (losses) recognized on derivatives | ( | ) | ||||||||||||||||||||||||||
Gains (losses) recognized on hedged items(1) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||
Net income (expense) recognized on fair value hedges | $ | ( | ) | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||||||
Cash flow hedging relationships:(3) | ||||||||||||||||||||||||||||
Interest rate contracts: | ||||||||||||||||||||||||||||
Realized losses reclassified from AOCI into net income | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | $ | |||||||||||||||||
Foreign exchange contracts: | ||||||||||||||||||||||||||||
Realized gains (losses) reclassified from AOCI into net income(4) | ( | ) | ||||||||||||||||||||||||||
Net income (expense) recognized on cash flow hedges | $ | ( | ) | $ | ( | ) | $ | $ | $ | $ | $ | ( | ) |
(1) | Includes amortization expense of $ |
(2) | Changes in fair values of cross-currency swaps attributable to changes in cross-currency basis spreads are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income. The initial value of the excluded component is recognized in earnings over the life of the swap under the amortization approach. |
(3) | See “Note 9—Stockholders’ Equity” for the effects of cash flow and net investment hedges on AOCI and amounts reclassified to net income, net of tax. |
(4) | We recognized a loss of $ |
116 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars in millions) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Gains (losses) recognized in other non-interest income: | ||||||||||||||||
Customer accommodation: | ||||||||||||||||
Interest rate contracts | $ | ( | ) | $ | $ | $ | ||||||||||
Commodity contracts | ( | ) | ||||||||||||||
Foreign exchange and other contracts | ||||||||||||||||
Total customer accommodation | ( | ) | ||||||||||||||
Other interest rate exposures | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other contracts | ( | ) | ||||||||||||||
Total | $ | ( | ) | $ | $ | $ |
117 | Capital One Financial Corporation (COF) |
NOTE 9—STOCKHOLDERS’ EQUITY |
Redeemable by Issuer Beginning | Per Annum Dividend Rate | Dividend Frequency | Liquidation Preference per Share | Total Shares Outstanding as of June 30, 2020 | Carrying Value (in millions) | ||||||||||||||||||||
Series | Description | Issuance Date | June 30, 2020 | December 31, 2019 | |||||||||||||||||||||
Series B(2) | 6.00% Non-Cumulative | August 20, 2012 | September 1, 2017 | Quarterly | $ | $ | $ | ||||||||||||||||||
Series E | Fixed-to-Floating Rate Non-Cumulative | May 14, 2015 | June 1, 2020 | 5.55% through 5/31/2020; 3-mo. LIBOR+ 380 bps thereafter | Semi-Annually through 5/31/2020; Quarterly thereafter | ||||||||||||||||||||
Series F | 6.20% Non-Cumulative | August 24, 2015 | December 1, 2020 | Quarterly | |||||||||||||||||||||
Series G | 5.20% Non-Cumulative | July 29, 2016 | December 1, 2021 | Quarterly | |||||||||||||||||||||
Series H | 6.00% Non-Cumulative | November 29, 2016 | December 1, 2021 | Quarterly | |||||||||||||||||||||
Series I | 5.00% Non-Cumulative | September 11, 2019 | December 1, 2024 | Quarterly | |||||||||||||||||||||
Series J | 4.80% Non-Cumulative | January 31, 2020 | June 1, 2025 | Quarterly | |||||||||||||||||||||
Total | $ | $ |
(1) | Except for Series E, ownership is held in the form of depositary shares, each representing a 1/40th interest in a share of fixed-rate non-cumulative perpetual preferred stock. |
(2) | On March 2, 2020, we redeemed all outstanding shares of our preferred stock Series B. |
Three Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Securities Available for Sale | Hedging Relationships(1) | Foreign Currency Translation Adjustments(2) | Other | Total | |||||||||||||||
AOCI as of March 31, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||||||||||
Amounts reclassified from AOCI into earnings | ||||||||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||||||
AOCI as of June 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ |
118 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Securities Available for Sale | Hedging Relationships(1) | Foreign Currency Translation Adjustments(2) | Other | Total | |||||||||||||||
AOCI as of December 31, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||
Cumulative effects from the adoption of the CECL standard | ( | ) | ( | ) | ||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||||||||||
Amounts reclassified from AOCI into earnings | ( | ) | ( | ) | ||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ||||||||||||||||||
AOCI as of June 30, 2020 | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||
(Dollars in millions) | Securities Available for Sale | Hedging Relationships(1) | Foreign Currency Translation Adjustments(2) | Securities Held to Maturity | Other | Total | ||||||||||||||||||
AOCI as of March 31, 2019 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
Other comprehensive income before reclassifications | ||||||||||||||||||||||||
Amounts reclassified from AOCI into earnings | ( | ) | ||||||||||||||||||||||
Other comprehensive income, net of tax | ||||||||||||||||||||||||
AOCI as of June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||
(Dollars in millions) | Securities Available for Sale | Hedging Relationships(1) | Foreign Currency Translation Adjustments(2) | Securities Held to Maturity | Other | Total | ||||||||||||||||||
AOCI as of December 31, 2018 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||||||||||||||
Amounts reclassified from AOCI into earnings | ( | ) | ( | ) | ||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ||||||||||||||||||||||
AOCI as of June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ |
(1) | Includes amounts related to cash flow hedges as well as the excluded component of cross-currency swaps designated as fair value hedges. |
(2) | Includes other comprehensive loss of $ |
119 | Capital One Financial Corporation (COF) |
(Dollars in millions) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
AOCI Components | Affected Income Statement Line Item | 2020 | 2019 | 2020 | 2019 | |||||||||||||
Securities available for sale: | ||||||||||||||||||
Non-interest income | $ | $ | $ | $ | ||||||||||||||
Income tax provision | ||||||||||||||||||
Net income | ||||||||||||||||||
Hedging relationships: | ||||||||||||||||||
Interest rate contracts: | Interest income | ( | ) | ( | ) | |||||||||||||
Foreign exchange contracts: | Interest income | |||||||||||||||||
Interest expense | ( | ) | ( | ) | ||||||||||||||
Non-interest income | ( | ) | ( | ) | ( | ) | ||||||||||||
Income (loss) from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||||
Income tax provision (benefit) | ( | ) | ( | ) | ( | ) | ||||||||||||
Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||||
Securities held to maturity:(1) | ||||||||||||||||||
Interest income | ( | ) | ( | ) | ||||||||||||||
Income tax provision (benefit) | ( | ) | ( | ) | ||||||||||||||
Net income (loss) | ( | ) | ( | ) | ||||||||||||||
Other: | ||||||||||||||||||
Non-interest income and non-interest expense | ||||||||||||||||||
Income tax provision | ||||||||||||||||||
Net income | ||||||||||||||||||
Total reclassifications | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) |
(1) | On December 31, 2019, we transferred our entire portfolio of held to maturity securities to available for sale. |
120 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
(Dollars in millions) | Before Tax | Provision (Benefit) | After Tax | Before Tax | Provision (Benefit) | After Tax | ||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||
Net unrealized gains on securities available for sale | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Net unrealized gains on hedging relationships | ||||||||||||||||||||||||
Foreign currency translation adjustments(1) | ( | ) | ||||||||||||||||||||||
Net changes in securities held to maturity | ||||||||||||||||||||||||
Other | ( | ) | ( | ) | ||||||||||||||||||||
Other comprehensive income | $ | $ | $ | $ | $ | $ |
Six Months Ended June 30, | ||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||
(Dollars in millions) | Before Tax | Provision (Benefit) | After Tax | Before Tax | Provision (Benefit) | After Tax | ||||||||||||||||||
Other comprehensive income: | ||||||||||||||||||||||||
Net unrealized gains on securities available for sale | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
Net unrealized gains on hedging relationships | ||||||||||||||||||||||||
Foreign currency translation adjustments(1) | ( | ) | ( | ) | ||||||||||||||||||||
Net changes in securities held to maturity | ||||||||||||||||||||||||
Other | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
Other comprehensive income | $ | $ | $ | $ | $ | $ |
(1) | Includes the impact of hedging instruments designated as net investment hedges. |
121 | Capital One Financial Corporation (COF) |
NOTE 10—EARNINGS PER COMMON SHARE |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(Dollars and shares in millions, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Income (loss) from continuing operations, net of tax | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Income (loss) from discontinued operations, net of tax | ( | ) | ( | ) | ||||||||||||
Net income (loss) | ( | ) | ( | ) | ||||||||||||
Dividends and undistributed earnings allocated to participating securities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Issuance cost for redeemed preferred stock | ( | ) | ||||||||||||||
Net income (loss) available to common stockholders | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Total weighted-average basic common shares outstanding | ||||||||||||||||
Effect of dilutive securities:(1) | ||||||||||||||||
Stock options | ||||||||||||||||
Other contingently issuable shares | ||||||||||||||||
Total effect of dilutive securities | ||||||||||||||||
Total weighted-average diluted common shares outstanding | ||||||||||||||||
Basic earnings per common share: | ||||||||||||||||
Net income (loss) from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Income from discontinued operations | ||||||||||||||||
Net income (loss) per basic common share | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Diluted earnings per common share:(1) | ||||||||||||||||
Net income (loss) from continuing operations | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
Income from discontinued operations | ||||||||||||||||
Net income (loss) per diluted common share | $ | ( | ) | $ | $ | ( | ) | $ |
(1) | In periods of net loss, dilutive securities are excluded as their inclusion would have an anti-dilutive effect. Accordingly, awards of |
122 | Capital One Financial Corporation (COF) |
NOTE 11—FAIR VALUE MEASUREMENT |
Level 1: | Valuation is based on quoted prices (unadjusted) in active markets for identical assets or liabilities. | |
Level 2: | Valuation is based on observable market-based inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
Level 3: | Valuation is generated from techniques that use significant assumptions not observable in the market. Valuation techniques include pricing models, discounted cash flow methodologies or similar techniques. |
June 30, 2020 | ||||||||||||||||||||
Fair Value Measurements Using | Netting Adjustments(1) | |||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | — | $ | |||||||||||||||
RMBS | — | |||||||||||||||||||
CMBS | — | |||||||||||||||||||
Other securities | — | |||||||||||||||||||
Total securities available for sale | — | |||||||||||||||||||
Loans held for sale | — | |||||||||||||||||||
Other assets: | ||||||||||||||||||||
Derivative assets(2) | $ | ( | ) | |||||||||||||||||
Other(3) | — | |||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Liabilities: | ||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||
Derivative liabilities(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Total liabilities | $ | $ | $ | $ | ( | ) | $ |
123 | Capital One Financial Corporation (COF) |
December 31, 2019 | ||||||||||||||||||||
Fair Value Measurements Using | Netting Adjustments(1) | |||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Assets: | ||||||||||||||||||||
Securities available for sale: | ||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | — | $ | |||||||||||||||
RMBS | — | |||||||||||||||||||
CMBS | — | |||||||||||||||||||
Other securities | — | |||||||||||||||||||
Total securities available for sale | — | |||||||||||||||||||
Loans held for sale | — | |||||||||||||||||||
Other assets: | ||||||||||||||||||||
Derivative assets(2) | $ | ( | ) | |||||||||||||||||
Other(3) | — | |||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Liabilities: | ||||||||||||||||||||
Other liabilities: | ||||||||||||||||||||
Derivative liabilities(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Total liabilities | $ | $ | $ | $ | ( | ) | $ |
(1) | Represents balance sheet netting of derivative assets and liabilities, and related payables and receivables for cash collateral held or placed with the same counterparty. See “Note 8—Derivative Instruments and Hedging Activities” for additional information. |
(2) | Does not reflect $ |
(3) | As of June 30, 2020 and December 31, 2019, other includes retained interests in securitizations of $ |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Total Gains (Losses) (Realized/Unrealized) | Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held as of June 30, 2020(1) | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Balance, April 1, 2020 | Included in Net Income(1) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfers Into Level 3 | Transfers Out of Level 3 | Balance, June 30, 2020 | ||||||||||||||||||||||||||||||||||
Securities available for sale:(2) | ||||||||||||||||||||||||||||||||||||||||||||
RMBS | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
CMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
Total securities available for sale | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
Retained interests in securitizations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
Net derivative assets (liabilities)(4) | ( | ) | ( | ) |
124 | Capital One Financial Corporation (COF) |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||
Total Gains (Losses) (Realized/Unrealized) | Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held as of June 30, 2020(1) | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Balance, January 1, 2020 | Included in Net Income(1) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfers Into Level 3 | Transfers Out of Level 3 | Balance, June 30, 2020 | ||||||||||||||||||||||||||||||||||
Securities available for sale:(2)(3) | ||||||||||||||||||||||||||||||||||||||||||||
RMBS | $ | $ | $ | ( | ) | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||
CMBS | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
Total securities available for sale | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
Retained interests in securitizations | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
Net derivative assets (liabilities)(4) | ( | ) | ( | ) |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Total Gains (Losses) (Realized/Unrealized) | Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held as of June 30, 2019(1) | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Balance, April 1, 2019 | Included in Net Income(1) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfers Into Level 3 | Transfers Out of Level 3 | Balance, June 30, 2019 | ||||||||||||||||||||||||||||||||||
Securities available for sale:(2) | ||||||||||||||||||||||||||||||||||||||||||||
RMBS | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
CMBS | ||||||||||||||||||||||||||||||||||||||||||||
Total securities available for sale | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
Retained interest in securitizations | ||||||||||||||||||||||||||||||||||||||||||||
Net derivative assets (liabilities)(4) | ( | ) | ( | ) | ( | ) |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||
Total Gains (Losses) (Realized/Unrealized) | Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held as of June 30, 2019(1) | |||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Balance, January 1, 2019 | Included in Net Income(1) | Included in OCI | Purchases | Sales | Issuances | Settlements | Transfers Into Level 3 | Transfers Out of Level 3 | Balance, June 30, 2019 | ||||||||||||||||||||||||||||||||||
Securities available for sale:(2) | ||||||||||||||||||||||||||||||||||||||||||||
RMBS | $ | $ | $ | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||||||||
CMBS | ( | ) | ||||||||||||||||||||||||||||||||||||||||||
Total securities available for sale | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
Other assets: | ||||||||||||||||||||||||||||||||||||||||||||
Retained interest in securitizations | ||||||||||||||||||||||||||||||||||||||||||||
Net derivative assets (liabilities)(4) | ( | ) | ( | ) | ( | ) |
125 | Capital One Financial Corporation (COF) |
(1) | Realized gains (losses) on securities available for sale are included in net securities gains (losses), and retained interests in securitizations are reported as a component of non-interest income in our consolidated statements of income. Gains (losses) on derivatives are included as a component of net interest income or non-interest income in our consolidated statements of income. |
(2) | For the three and six months ended June 30, 2020, included in OCI related to Level 3 securities available for sale still held as of June 30, 2020 were net unrealized gains of $ |
(3) | The fair value of RMBS as of January 1, 2020 includes a cumulative adjustment of $ |
(4) | Includes derivative assets and liabilities of $ |
126 | Capital One Financial Corporation (COF) |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||
(Dollars in millions) | Fair Value at June 30, 2020 | Significant Valuation Techniques | Significant Unobservable Inputs | Range | Weighted Average(1) | |||||||
Securities available for sale: | ||||||||||||
RMBS | $ | Discounted cash flows (vendor pricing) | Yield Voluntary prepayment rate Default rate Loss severity | 0-12% 5-10% 1-11% 30-100% | 4% 8% 2% 67% | |||||||
CMBS | Discounted cash flows (vendor pricing) | Yield | 1-2% | 1% | ||||||||
Other assets: | ||||||||||||
Retained interests in securitizations(2) | Discounted cash flows | Life of receivables (months) Voluntary prepayment rate Discount rate Default rate Loss severity | 33-52 3-14% 2-12% 3-4% 70-72% | N/A | ||||||||
Net derivative assets (liabilities) | Discounted cash flows | Swap rates | 1% | 1% |
Quantitative Information about Level 3 Fair Value Measurements | ||||||||||||
(Dollars in millions) | Fair Value at December 31, 2019 | Significant Valuation Techniques | Significant Unobservable Inputs | Range | Weighted Average(1) | |||||||
Securities available for sale: | ||||||||||||
RMBS | $ | Discounted cash flows (vendor pricing) | Yield Voluntary prepayment rate Default rate Loss severity | 2-18% 0-18% 1-6% 30-95% | 5% 10% 2% 67% | |||||||
CMBS | Discounted cash flows (vendor pricing) | Yield | 2-3% | 2% | ||||||||
Other assets: | ||||||||||||
Retained interests in securitizations(2) | Discounted cash flows | Life of receivables (months) Voluntary prepayment rate Discount rate Default rate Loss severity | 35-51 4-14% 3-10% 2-3% 74-88% | N/A | ||||||||
Net derivative assets (liabilities) | Discounted cash flows | Swap rates | 2% | 2% |
(1) | Weighted averages are calculated by using the product of the input multiplied by the relative fair value of the instruments. |
(2) | Due to the nature of the various mortgage securitization structures in which we have retained interests, it is not meaningful to present a consolidated weighted average for the significant unobservable inputs. |
127 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||
Estimated Fair Value Hierarchy | Total | |||||||||||
(Dollars in millions) | Level 2 | Level 3 | ||||||||||
Loans held for investment | $ | $ | $ | |||||||||
Other assets(1) | ||||||||||||
Total | $ | $ | $ |
December 31, 2019 | ||||||||||||
Estimated Fair Value Hierarchy | Total | |||||||||||
(Dollars in millions) | Level 2 | Level 3 | ||||||||||
Loans held for investment | $ | $ | $ | |||||||||
Other assets(1) | ||||||||||||
Total | $ | $ | $ |
(1) | As of June 30, 2020, other assets included equity investments accounted for under the measurement alternative of $ |
Total Gains (Losses) | ||||||||
Six Months Ended June 30, | ||||||||
(Dollars in millions) | 2020 | 2019 | ||||||
Loans held for investment | $ | ( | ) | $ | ( | ) | ||
Loans held for sale | ( | ) | ||||||
Other assets(1) | ( | ) | ( | ) | ||||
Total | $ | ( | ) | $ | ( | ) |
(1) | Other assets include fair value adjustments related to repossessed assets, long-lived assets held for sale and equity investments accounted for under the measurement alternative. |
128 | Capital One Financial Corporation (COF) |
June 30, 2020 | ||||||||||||||||||||
Carrying Value | Estimated Fair Value | Estimated Fair Value Hierarchy | ||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
Restricted cash for securitization investors | ||||||||||||||||||||
Net loans held for investment | ||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||
Interest receivable | ||||||||||||||||||||
Other investments(1) | ||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits with defined maturities | ||||||||||||||||||||
Securitized debt obligations | ||||||||||||||||||||
Senior and subordinated notes | ||||||||||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | ||||||||||||||||||||
Interest payable |
December 31, 2019 | ||||||||||||||||||||
Carrying Value | Estimated Fair Value | Estimated Fair Value Hierarchy | ||||||||||||||||||
(Dollars in millions) | Level 1 | Level 2 | Level 3 | |||||||||||||||||
Financial assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
Restricted cash for securitization investors | ||||||||||||||||||||
Net loans held for investment | ||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||
Interest receivable | ||||||||||||||||||||
Other investments(1) | ||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||
Deposits with defined maturities | ||||||||||||||||||||
Securitized debt obligations | ||||||||||||||||||||
Senior and subordinated notes | ||||||||||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase | ||||||||||||||||||||
Other borrowings(2) | ||||||||||||||||||||
Interest payable |
(1) | Other investments include FHLB and Federal Reserve stock. These investments are included in other assets on our consolidated balance sheets. |
(2) | Other borrowings excludes finance lease liabilities. |
129 | Capital One Financial Corporation (COF) |
NOTE 12—BUSINESS SEGMENTS AND REVENUE FROM CONTRACTS WITH CUSTOMERS |
130 | Capital One Financial Corporation (COF) |
Three Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Net interest income (loss) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Non-interest income (loss) | ( | ) | ||||||||||||||||||
Total net revenue (loss)(2) | ( | ) | ||||||||||||||||||
Provision (benefit) for credit losses | ( | ) | ||||||||||||||||||
Non-interest expense | ||||||||||||||||||||
Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Loss from continuing operations, net of tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Loans held for investment | $ | $ | $ | $ | $ | |||||||||||||||
Deposits |
Six Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Net interest income | $ | $ | $ | $ | $ | |||||||||||||||
Non-interest income (loss) | ( | ) | ||||||||||||||||||
Total net revenue(2) | ||||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||
Non-interest expense | ||||||||||||||||||||
Loss from continuing operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Income tax benefit | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Loss from continuing operations, net of tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||
Loans held for investment | $ | $ | $ | $ | $ | |||||||||||||||
Deposits |
Three Months Ended June 30, 2019 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Net interest income (loss) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Non-interest income (loss) | ( | ) | ||||||||||||||||||
Total net revenue (loss) | ( | ) | ||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||
Non-interest expense | ||||||||||||||||||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||||||||||||||||
Income tax provision (benefit) | ( | ) | ||||||||||||||||||
Income (loss) from continuing operations, net of tax | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Loans held for investment | $ | $ | $ | $ | $ | |||||||||||||||
Deposits |
131 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, 2019 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Net interest income | $ | $ | $ | $ | $ | |||||||||||||||
Non-interest income (loss) | ( | ) | ||||||||||||||||||
Total net revenue (loss) | ( | ) | ||||||||||||||||||
Provision for credit losses | ||||||||||||||||||||
Non-interest expense | ||||||||||||||||||||
Income (loss) from continuing operations before income taxes | ( | ) | ||||||||||||||||||
Income tax provision (benefit) | ( | ) | ||||||||||||||||||
Income from continuing operations, net of tax | $ | $ | $ | $ | $ | |||||||||||||||
Loans held for investment | $ | $ | $ | $ | $ | |||||||||||||||
Deposits |
(1) | Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
(2) |
Three Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Contract revenue: | ||||||||||||||||||||
Interchange fees, net(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Service charges and other customer-related fees | ( | ) | ||||||||||||||||||
Other | ||||||||||||||||||||
Total contract revenue | ( | ) | ||||||||||||||||||
Revenue from other sources | ( | ) | ||||||||||||||||||
Total non-interest income | $ | $ | $ | $ | ( | ) | $ |
132 | Capital One Financial Corporation (COF) |
Six Months Ended June 30, 2020 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Contract revenue: | ||||||||||||||||||||
Interchange fees, net(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Service charges and other customer-related fees | ( | ) | ||||||||||||||||||
Other | ||||||||||||||||||||
Total contract revenue | ( | ) | ||||||||||||||||||
Revenue from other sources | ( | ) | ||||||||||||||||||
Total non-interest income | $ | $ | $ | $ | ( | ) | $ |
Three Months Ended June 30, 2019 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Contract revenue: | ||||||||||||||||||||
Interchange fees, net(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Service charges and other customer-related fees | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total contract revenue | ( | ) | ||||||||||||||||||
Revenue from other sources | ( | ) | ||||||||||||||||||
Total non-interest income | $ | $ | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2019 | ||||||||||||||||||||
(Dollars in millions) | Credit Card | Consumer Banking | Commercial Banking(1) | Other(1) | Consolidated Total | |||||||||||||||
Contract revenue: | ||||||||||||||||||||
Interchange fees, net(2) | $ | $ | $ | $ | ( | ) | $ | |||||||||||||
Service charges and other customer-related fees | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total contract revenue | ( | ) | ||||||||||||||||||
Revenue from other sources | ( | ) | ||||||||||||||||||
Total non-interest income | $ | $ | $ | $ | ( | ) | $ |
(1) | Some of our commercial investments generate tax-exempt income, tax credits or other tax benefits. Accordingly, we present our Commercial Banking revenue and yields on a taxable-equivalent basis, calculated using the federal statutory tax rate of 21% and state taxes where applicable, with offsetting reductions to the Other category. |
(2) | Interchange fees are presented net of customer reward expenses. |
133 | Capital One Financial Corporation (COF) |
NOTE 13—COMMITMENTS, CONTINGENCIES, GUARANTEES AND OTHERS |
Contractual Amount | Carrying Value | |||||||||||||||
(Dollars in millions) | June 30, 2020 | December 31, 2019 | June 30, 2020 | December 31, 2019 | ||||||||||||
Credit card lines | $ | $ | N/A | N/A | ||||||||||||
Other loan commitments(1) | $ | $ | ||||||||||||||
Standby letters of credit and commercial letters of credit(2) | ||||||||||||||||
Total unfunded lending commitments | $ | $ | $ | $ |
(1) | Includes $ |
(2) | These financial guarantees have expiration dates ranging from 2020 to 2023 as of June 30, 2020. |
134 | Capital One Financial Corporation (COF) |
135 | Capital One Financial Corporation (COF) |
136 | Capital One Financial Corporation (COF) |
137 | Capital One Financial Corporation (COF) |
138 | Capital One Financial Corporation (COF) |
Total Number of Shares Withheld(1) | Average Price per Share | ||||||
April | 1,755 | $ | 42.27 | ||||
May | 29,084 | 64.62 | |||||
June | — | — | |||||
Total | 30,839 | 63.35 |
(1) | Consists of shares withheld to cover taxes on restricted stock awards whose restrictions have lapsed. We suspended our 2019 Stock Repurchase Program in March 2020 and the program subsequently expired at the end of the second quarter of 2020, see “MD&A—Capital Management—Dividend Policy and Stock Purchases” for more information. |
139 | Capital One Financial Corporation (COF) |
Exhibit No. | Description | |
3.1 | ||
3.2 | ||
4.1.1 | ||
4.1.2 | ||
4.1.3 | ||
4.2 | Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. The Company agrees to furnish a copy thereof to the SEC upon request. | |
31.1* | ||
31.2* | ||
32.1** | ||
32.2** | ||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
104* | The cover page of Capital One Financial Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, formatted in Inline XBRL (included within the Exhibit 101 attachments). |
+ | Represents a management contract or compensatory plan or arrangement. |
* | Indicates a document being filed with this Form 10-Q. |
** | Indicates a document being furnished with this Form 10-Q. Information in this Form 10-Q furnished herewith shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. Such exhibit shall not be deemed incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934. |
140 | Capital One Financial Corporation (COF) |
CAPITAL ONE FINANCIAL CORPORATION | |||||
Date: August 6, 2020 | By: | /s/ R. SCOTT BLACKLEY | |||
R. Scott Blackley | |||||
Chief Financial Officer |
141 | Capital One Financial Corporation (COF) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of Capital One Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 6, 2020 | By: | /s/ RICHARD D. FAIRBANK | ||
Richard D. Fairbank Chair, Chief Executive Officer and President |
1. | I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 of Capital One Financial Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | August 6, 2020 | By: | /s/ R. SCOTT BLACKLEY | ||
R. Scott Blackley Chief Financial Officer |
1. | The Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Form 10-Q”) of Capital One fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Capital One. |
Date: | August 6, 2020 | By: | /s/ RICHARD D. FAIRBANK | ||
Richard D. Fairbank Chair, Chief Executive Officer and President |
1. | The Quarterly Report on Form 10-Q for the quarter ended June 30, 2020 (the “Form 10-Q”) of Capital One fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Capital One. |
Date: | August 6, 2020 | By: | /s/ R. SCOTT BLACKLEY | ||
R. Scott Blackley Chief Financial Officer |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 1,625 | $ 3,037 |
Other comprehensive income (loss), net of tax: | ||
Net unrealized gains on securities available for sale | 272 | 564 |
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax | 537 | 814 |
Net unrealized gains on hedging relationships | 537 | 814 |
Foreign currency translation adjustments | 15 | 45 |
Net changes in securities held to maturity | 6 | 12 |
Other | 0 | (2) |
Other comprehensive income, net of tax | 830 | 1,433 |
Comprehensive income (loss) | $ 2,455 | $ 4,470 |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 5,350,000 | 4,975,000 |
Preferred stock, shares outstanding | 5,350,000 | 4,975,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 677,226,807 | 672,969,391 |
Common stock, shares outstanding | 456,335,486 | 456,562,399 |
Treasury stock, par value | $ 0.01 | $ 0.01 |
Treasury stock, common, shares | 220,891,321 | 216,406,992 |
Loans held for sale | $ 668 | $ 251 |
Securities available for sale, amortized cost | 84,742 | $ 77,984 |
Securities available for sale, allowance for credit loss | $ 3 |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
StatementOfStockholdersEquityAbstract [Abstract] | ||||
Dividend per share on common stock declared (in dollars per share) | $ 0.40 | $ 0.40 | $ 0.80 | $ 0.80 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Operating activities: | ||
Income (loss) from continuing operations, net of tax | $ (2,257) | $ 3,026 |
Income (loss) from discontinued operations, net of tax | (1) | 11 |
Net income (loss) | (2,258) | 3,037 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Provision for credit losses | 9,669 | 3,035 |
Depreciation and amortization, net | 1,804 | 1,585 |
Deferred tax benefit | (1,574) | (15) |
Net securities losses (gains) | 0 | (39) |
Gain on sales of loans | (11) | (57) |
Stock-based compensation expense | 74 | 129 |
Other | (7) | 0 |
Loans held for sale: | ||
Originations and purchases | (4,347) | (5,371) |
Proceeds from sales and paydowns | 4,002 | 4,869 |
Changes in operating assets and liabilities: | ||
Changes in interest receivable | 184 | 70 |
Changes in other assets | 954 | 1,251 |
Changes in interest payable | (59) | (21) |
Changes in other liabilities | 783 | 634 |
Net change from discontinued operations | 1 | 0 |
Net cash from operating activities | 9,215 | 9,107 |
Securities available for sale: | ||
Purchases | (14,568) | (5,674) |
Proceeds from paydowns and maturities | 9,113 | 3,362 |
Proceeds from sales | 144 | 3,983 |
Securities held to maturity: | ||
Purchases | 0 | (396) |
Proceeds from paydowns and maturities | 0 | 1,657 |
Loans: | ||
Net changes in loans held for investment | 9,797 | (3,395) |
Principal recoveries of loans previously charged off | 1,292 | 1,323 |
Net purchases of premises and equipment | (342) | (396) |
Net cash from other investing activities | (377) | (589) |
Net cash from investing activities | 5,059 | (125) |
Financing activities: | ||
Changes in deposits | 41,234 | 4,513 |
Issuance of securitized debt obligations | 1,248 | 2,617 |
Maturities and paydowns of securitized debt obligations | (3,593) | (4,126) |
Issuance of senior and subordinated notes and long-term FHLB advances | 3,987 | 2,646 |
Maturities and paydowns of senior and subordinated notes and long-term FHLB advances | (7,156) | (2,751) |
Changes in other borrowings | (6,759) | (9,069) |
Common stock: | ||
Net proceeds from issuances | 121 | 98 |
Dividends paid | (368) | (379) |
Preferred stock: | ||
Net proceeds from issuances | 1,209 | 0 |
Dividends paid | (145) | (132) |
Redemptions | (875) | 0 |
Purchases of treasury stock | (388) | (67) |
Proceeds from share-based payment activities | 20 | 0 |
Net cash from financing activities | 28,535 | (6,650) |
Changes in cash, cash equivalents and restricted cash for securitization investors | 42,809 | 2,332 |
Cash, cash equivalents and restricted cash for securitization investors, beginning of the period | 13,749 | 13,489 |
Cash, cash equivalents and restricted cash for securitization investors, end of the period | 56,558 | 15,821 |
Non-cash items: | ||
Net transfers from (to) loans held for investment to (from) loans held for sale | (36) | 1,428 |
Interest paid | 2,088 | 2,411 |
Income tax paid | $ 137 | $ 181 |
Summary of Significant Accounting Policies |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies |
The Company Capital One Financial Corporation, a Delaware Corporation established in 1994 and headquartered in McLean, Virginia, is a diversified financial services holding company with banking and non-banking subsidiaries. Capital One Financial Corporation and its subsidiaries (the “Company”) offer a broad array of financial products and services to consumers, small businesses and commercial clients through digital channels, branches, Cafés and other distribution channels. As of June 30, 2020, our principal subsidiaries included:
The Company is hereafter collectively referred to as “we,” “us” or “our.” COBNA and CONA are collectively referred to as the “Banks.” We also offer products outside of the United States of America (“U.S.”) principally through Capital One (Europe) plc (“COEP”), an indirect subsidiary of COBNA organized and located in the United Kingdom (“U.K.”), and through a branch of COBNA in Canada. COEP has authority, among other things, to provide credit card loans. Our branch of COBNA in Canada also has the authority to provide credit card loans. Our principal operations are organized for management reporting purposes into three major business segments, which are defined primarily based on the products and services provided or the types of customer served: Credit Card, Consumer Banking and Commercial Banking. We provide details on our business segments, the integration of recent acquisitions, if any, into our business segments and the allocation methodologies and accounting policies used to derive our business segment results in “Note 12—Business Segments and Revenue from Contracts with Customers.” Basis of Presentation and Use of Estimates The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and in the related disclosures. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgments, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information. Certain prior period amounts have been reclassified to conform to the current period presentation. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements, and related notes thereto, included in Capital One Financial Corporation’s 2019 Annual Report on Form 10-K (“2019 Form 10-K”). Income Taxes Our effective tax rates in the second quarter and first six months of 2020 were computed utilizing the estimated annual effective tax rate method and were driven by the relationship of our tax credits in proportion to our pre-tax earnings. We changed our methodology from the year-to-date method utilized in the first quarter of 2020 due to passage of time as we recorded two quarters of actual results that reduced forecast variability for the remainder of the year. Significant Accounting Policies Impacted by our Adoption of the CECL Standard In the first quarter of 2020, we adopted ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“CECL standard”) and updated the below significant accounting policies. Investment Securities We classify securities as available for sale or held to maturity based on our investment strategy and management’s assessment of our intent and ability to hold the securities until maturity. We did not have any securities that were classified as held to maturity as of June 30, 2020. We report securities available for sale on our consolidated balance sheets at fair value. The amortized cost of investment securities reflects the amount for which the security was acquired, adjusted for accrued interest, amortization of premiums, discounts, and net deferred fees and costs, collection of cash, and charge-offs. We elect to present accrued interest for securities available for sale within interest receivable on our consolidated balance sheets. Unrealized gains or losses are recorded, net of tax, as a component of accumulated other comprehensive income (“AOCI”). Unamortized premiums, discounts and other basis adjustments for available for sale securities are recognized in interest income over the contractual lives of the securities using the effective interest method. We record purchases and sales of investment securities available for sale on a trade date basis. Realized gains or losses from the sale of debt securities are computed using the first-in first-out method of identification, and are included in non-interest income in our consolidated statements of income. An individual debt security is impaired when the fair value of the security is less than its amortized cost. If we intend to sell an available for sale security in an unrealized loss position or it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis, any allowance for credit losses is reversed through our provision for credit losses and the difference between the amortized cost basis of the security and its fair value is recognized in our consolidated statements of income. For impaired debt securities that we have both the intent and ability to hold, the securities are evaluated to determine if a credit loss exists. The allowance for credit losses on our investment securities is recognized through our provision for credit losses and limited by the unrealized losses of a security measured as the difference between the security’s amortized cost and fair value. See further discussion below under the “Allowance for Credit Losses - Available for Sale Investment Securities” section of this Note. Our investment portfolio also includes certain debt securities that, at the time of purchase, had experienced a more-than-insignificant deterioration in credit quality since origination. Such debt securities are accounted for in accordance with accounting guidance for purchased financial assets with credit deterioration and are herein referred to as purchased credit-deteriorated (“PCD”) securities. PCD securities require the recognition of an allowance for credit losses at the time of acquisition. The allowance for credit losses is not recognized in earnings. Instead, the purchase price and the initial allowance collectively represent the amortized cost basis of a PCD security. Any noncredit discount or premium at the date of acquisition is amortized into interest income over the remaining life of the security. Subsequent to the date of purchase, we re-measure the allowance for credit losses on the amortized cost basis using the same policies as for other debt securities available for sale and changes are recognized through our provision for credit losses. See further discussion below under the “Allowance for Credit Losses - Available for Sale Investment Securities” section of this Note. We charge off any portion of an investment security that we determine is uncollectible. The amortized cost basis, excluding accrued interest, is charged off through the allowance for credit losses. Accrued interest is charged off as a reduction to interest income. Recoveries of previously charged off principal amounts are recognized in our provision for credit losses when received. Loans Our loan portfolio consists of loans held for investment, including loans underlying our consolidated securitization trusts, and loans held for sale and is divided into three portfolio segments: credit card, consumer banking and commercial banking loans. Credit card loans consist of domestic and international credit card loans. Consumer banking loans consist of auto and retail banking loans. Commercial banking loans consist of commercial and multifamily real estate as well as commercial and industrial loans. Loan Classification Upon origination or purchase, we classify loans as held for investment or held for sale based on our investment strategy and management’s intent and ability with regard to the loans, which may change over time. The accounting and measurement framework for loans differs depending on the loan classification, whether we elect the fair value option, whether the loans are originated or purchased and whether purchased loans are considered to have experienced a more-than-insignificant deterioration in credit quality since origination. The presentation within the consolidated statements of cash flows is based on management’s intent at acquisition or origination. Cash flows related to loans that are acquired or originated with the intent to hold for investment are included in cash flows from investing activities on our consolidated statements of cash flows. Cash flows related to loans that are acquired or originated with the intent to sell are included in cash flows from operating activities on our consolidated statements of cash flows. Loans Held for Investment Loans that we have the ability and intent to hold for the foreseeable future and loans associated with consolidated securitization transactions are classified as held for investment. Loans classified as held for investment, except for credit card loans, are reported at their amortized cost basis, excluding accrued interest. For these loans, we elect to present accrued interest within interest receivable in our consolidated balance sheets. For credit card loans, billed finance charges and fees are included in loans held for investment. Unbilled finance charges and fees on credit card loans are included in interest receivable. Interest income is recognized on performing loans held for investment on an accrual basis. We defer loan origination fees and direct loan origination costs on originated loans, premiums and discounts on purchased loans and loan commitment fees. We recognize these amounts in interest income as yield adjustments over the life of the loan and/or commitment period using the effective interest method. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. The amortized cost of loans held for investment is subject to our allowance for credit losses methodology described below under the “Allowance for Credit Losses - Loans Held for Investment” section of this Note. Loans Held for Sale Loans purchased or originated with the intent to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale. Multifamily commercial real estate loans originated with the intent to sell to government-sponsored enterprises are accounted for under the fair value option. We elect the fair value option on these loans as part of our management of interest rate risk with corresponding forward sale commitments. Loan origination fees and direct loan origination costs are recognized as incurred and are reported in other non-interest income in the consolidated statements of income. Interest income is calculated based on the loan's stated rate of interest and is reported in interest income in the consolidated statements of income. Fair value adjustments are recorded in other non-interest income in the consolidated statements of income. All other loans classified as held for sale are recorded at the lower of cost or fair value. Loan origination fees, direct loan origination costs and any discounts and premiums are deferred until the loan is sold and are then recognized as part of the total gain or loss on sale. The fair value of loans held for sale is determined on an aggregate portfolio basis for each loan type. Fair value adjustments are recorded in other non-interest income in the consolidated statements of income. If a loan is transferred from held for investment to held for sale, then on the transfer date, any decline in fair value related to credit is recorded as a charge-off and any allowance for credit losses is reversed through our provision for credit losses. The loan is then reclassified to held for sale at its amortized cost at the date of the transfer. A valuation allowance is established, if needed, such that the loan held for sale is recorded at the lower of cost or fair value. Subsequent to transfer, we report write-downs or recoveries in fair value up to the carrying value at the date of transfer and realized gains or losses on loans held for sale in our consolidated statements of income as a component of other non-interest income. We calculate the gain or loss on loan sales as the difference between the proceeds received and the carrying value of the loans sold, net of the fair value of any residual interests retained. Loans Acquired All purchased loans, including loans transferred in a business combination, are initially recorded at fair value, which includes consideration of expected future losses, as of the date of the acquisition. To determine the fair value of loans at acquisition, we estimate discounted contractual cash flows due using an observable market rate of interest, when available, adjusted for factors that a market participant would consider in determining fair value. In determining fair value, contractual cash flows are adjusted to include prepayment estimates based upon historical payment trends, forecasted default rates and loss severities and other relevant factors. The difference between the fair value and the contractual cash flows is recorded as a loan premium or discount, which may relate to either credit or non-credit factors, at acquisition. We account for purchased loans under the accounting guidance for purchased financial assets with credit deterioration when, at the time of purchase, the loans have experienced a more-than-insignificant deterioration in credit quality since origination. We also account for loans under this guidance when the loans were previously accounted for under the accounting guidance for purchased credit impaired loans and debt securities (“PCI”) prior to our adoption of Accounting Standards Codification (“ASC”) 326, Financial Instruments-Credit Losses, on January 1, 2020. We refer to these loans which are accounted for under accounting guidance for purchased financial assets with more-than-insignificant deterioration in credit quality since origination as “PCD loans”. We recognize an allowance for credit losses on purchased loans that have not experienced a more-than-insignificant deterioration in credit quality since origination at the time of purchase through earnings in a manner that is consistent with originated loans. The policies relating to the allowance for credit losses on loans is described below in the “Allowance for Credit Losses - Loans Held for Investment” section of this Note. Loan Modifications and Restructurings As part of our loss mitigation efforts, we may provide modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for foreclosure or repossession of collateral, if any. Our loan modifications typically include short-term payment deferrals, an extension of the loan term, a reduction in the interest rate, a reduction in the loan balance, or a combination of these concessions. A loan modification in which a concession is granted to a borrower experiencing financial difficulty is accounted for and reported as a troubled debt restructuring (“TDR”). See “Note 3—Loans” for additional information on our loan modifications and restructurings, including those in response to the COVID-19 pandemic. Delinquent and Nonperforming Loans The entire balance of a loan is considered contractually delinquent if the minimum required payment is not received by the first statement cycle date equal to or following the due date specified on the customer’s billing statement. Delinquency is reported on loans that are 30 or more days past due. Interest and fees continue to accrue on past due loans until the date the loan is placed on nonaccrual status, if applicable. For loan modifications, delinquency and nonaccrual status are reported in accordance with the revised terms of the loans. We generally place loans on nonaccrual status when we believe the collectability of interest and principal is not reasonably assured. Nonperforming loans generally include loans that have been placed on nonaccrual status. We do not report loans classified as held for sale as nonperforming. Our policies for classifying loans as nonperforming, by loan category, are as follows: •Credit card loans: As permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”), our policy is generally to exempt credit card loans from being classified as nonperforming, as these loans are generally charged off in the period the account becomes 180 days past due. Consistent with industry conventions, we generally continue to accrue interest and fees on delinquent credit card loans until the loans are charged off. •Consumer banking loans: We classify consumer banking loans as nonperforming when we determine that the collectability of all interest and principal on the loan is not reasonably assured, generally when the loan becomes 90 days past due. •Commercial banking loans: We classify commercial banking loans as nonperforming as of the date we determine that the collectability of all interest and principal on the loan is not reasonably assured. •Modified loans and troubled debt restructurings: Modified loans, including TDRs, that are current at the time of the restructuring remain on accrual status if there is demonstrated performance prior to the restructuring and continued performance under the modified terms is expected. Otherwise, the modified loan is classified as nonperforming. Interest and fees accrued but not collected at the date a loan is placed on nonaccrual status are reversed against earnings. In addition, the amortization of deferred loan fees, costs, premiums and discounts is suspended. Interest and fee income are subsequently recognized only upon the receipt of cash payments. However, if there is doubt regarding the ultimate collectability of loan principal, cash received is generally applied against the principal balance of the loan. Nonaccrual loans are generally returned to accrual status when all principal and interest is current and repayment of the remaining contractual principal and interest is reasonably assured, or when the loan is both well-secured and in the process of collection and collectability is no longer doubtful. Charge-Offs - Loans We charge off loans when we determine that the loan is uncollectible. The amortized cost basis, excluding accrued interest, is charged off as a reduction to the allowance for credit losses based on the time frames presented below. Accrued interest on loans other than credit card loans determined to be uncollectible is reversed as a reduction of interest income when the loan is classified as nonperforming. For credit card loans, accrued interest is charged off simultaneously with the charge off of other components of amortized cost and as a reduction of interest income. When received, recoveries of previously charged off amounts are recorded as an increase to the allowance for credit losses (see the “Allowance for Credit Losses - Loans Held for Investment” section of this Note for information on how we account for expected recoveries). Costs to recover charged off loans are recorded as collection expense and included in our consolidated statements of income as a component of other non-interest expense as incurred. Our charge-off time frames by loan type are presented below. •Credit card loans: We generally charge off credit card loans in the period the account becomes 180 days past due. We charge off delinquent credit card loans for which revolving privileges have been revoked as part of loan workout when the account becomes 120 days past due. Credit card loans in bankruptcy are generally charged off by the end of the month following 30 days after the receipt of a complete bankruptcy notification from the bankruptcy court. Credit card loans of deceased account holders are generally charged off 5 days after receipt of notification. •Consumer banking loans: We generally charge off consumer banking loans at the earlier of the date when the account is a specified number of days past due or upon repossession of the underlying collateral. Our charge-off period for auto loans is 120 days past due. Small business banking loans generally charge off at 120 days past due based on the date the amortized cost basis is deemed uncollectible. Auto loans that have not been previously charged off where the borrower has filed for bankruptcy and the loan has not been reaffirmed charge off in the period that the loan is 60 days from the bankruptcy notification date, regardless of delinquency status. Auto loans that have not been previously charged off and have been discharged under Chapter 7 bankruptcy are charged off at the end of the month in which the bankruptcy discharge occurs. Remaining consumer loans generally are charged off within 40 days of receipt of notification from the bankruptcy court. Consumer loans of deceased account holders are charged off by the end of the month following 60 days of receipt of notification. •Commercial banking loans: We charge off commercial loans in the period we determine that the amortized cost basis is uncollectible. Allowance for Credit Losses We maintain an allowance for credit losses (“allowance”) that represents management’s current estimate of expected credit losses over the contractual terms of our loans held for investment and investment securities classified as available for sale. We measure the allowance on a quarterly basis through consideration of past events, including historical experience, current conditions, and reasonable and supportable forecasts. Allowance for Credit Losses - Loans Held for Investment We measure current expected credit losses over the contractual terms of our loans. The contractual terms are adjusted for expected prepayments but are not extended for renewals or extensions, except when an extension or renewal arises from a borrower option that is not unconditionally cancellable or through a TDR that is reasonably expected to occur. We aggregate loans sharing similar risk characteristics into pools for purposes of measuring expected credit losses. Pools are reassessed periodically to confirm that all loans within each pool continue to share similar risk characteristics. Expected credit losses for loans that do not share similar risk characteristics with other financial assets are measured individually. Expected recoveries of amounts previously charged off or expected to be charged off are recognized within the allowance, with a corresponding reduction to our provision for credit losses. At times expected recoveries may result in a negative allowance. We limit the allowance to amounts previously charged off and expected to be charged off. Charge-offs of uncollectible amounts result in a reduction to the allowance and recoveries of previously charged off amounts result in an increase to the allowance. When developing an estimate of expected credit losses, we use both quantitative and qualitative methods in considering all available information relevant to assessing collectability. This may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. Significant judgment is applied to the development and duration of reasonable and supportable forecasts used in our estimation of lifetime losses. We estimate expected credit losses over the duration of those forecasts and then revert, on a rational and systematic basis, to historical losses at each relevant loss component of the estimate. Expected losses for contractual terms extending beyond the reasonable and supportable forecast and reversion periods are based on those historical losses. Management will consider and may qualitatively adjust for conditions, changes, and trends in loan portfolios that may not be captured in modeled results. These adjustments are referred to as qualitative factors and represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Management’s judgment may involve an assessment of current and forward-looking conditions including but not limited to changes in lending policies and procedures, nature and volume of the portfolio, external factors, and uncertainty as it relates to economic, model or forecast risks, where not already captured in the modeled results. Expected credit losses for collateral-dependent loans are based on the fair value of the underlying collateral. When we intend to liquidate the collateral, the fair value of the collateral is adjusted for expected costs to sell. A loan is deemed to be a collateral-dependent loan when (i) we determine foreclosure or repossession of the underlying collateral is probable, or (ii) foreclosure or repossession is not probable, but the borrower is experiencing financial difficulty and we expect repayment to be provided substantially through the operation or sale of the collateral. The allowance for a collateral-dependent loan reflects the difference between the loan’s amortized cost basis and the fair value (less selling costs, where applicable) of the loan's underlying collateral. Our credit card and consumer banking loan portfolios consist of smaller-balance, homogeneous loans. The consumer banking loan portfolio is divided into two primary portfolio segments: auto loans and retail banking loans. The credit card and consumer banking loan portfolios are further divided by our business units into groups based on common risk characteristics, such as origination year, contract type, interest rate, credit bureau score and geography. The commercial banking loan portfolio is primarily composed of larger-balance, non-homogeneous loans. These loans are subject to reviews that result in internal risk ratings. In assessing the risk rating of a particular commercial banking loan, among the factors we consider are the financial condition of the borrower, geography, collateral performance, historical loss experience and industry-specific information that management believes is relevant in determining and measuring expected credit losses. Subjective assessment and interpretation are involved. Emphasizing one factor over another or considering additional factors could impact the risk rating assigned to that commercial banking loan. For consumer banking and commercial banking loans, the contractual period typically does not include renewals or extensions because the renewals and extensions are generally not at the borrower’s exclusive option to exercise. Management has determined that the undrawn credit exposure that is associated with our credit card loans is unconditionally cancellable. For this reason, expected credit losses are measured based on the drawn balance at each quarterly measurement date, but not on the undrawn exposure. Because credit card loans do not have a defined contractual life, management estimates both the volume and application of payments to determine a contractual life of the drawn balance at the measurement date over which expected credit losses are developed for credit card loans. With the exception of credit card loans, we have made a policy election to not measure an allowance on accrued interest for loans held for investment because we reverse uncollectible accrued interest in a timely manner. See the “Delinquent and Nonperforming Loans” and “Charge-Offs - Loans” sections of this Note for information on what we consider timely. For credit card loans, we do not make this election, as we reserve for uncollectible accrued interest relating to credit card loans in the allowance. The allowance related to credit card and consumer banking loans assessed on a pooled basis is based on a modeled calculation, which is supplemented by management judgment as described above. Because of the homogeneous nature of our consumer loan portfolios, the allowance is based on the aggregated portfolio segment evaluations. The allowance is established through a process that begins with estimates of historical losses in each pool based upon various statistical analyses, with adjustments for current conditions and reasonable and supportable forecasts of conditions, which includes expected economic conditions. Loss forecast models are utilized to estimate expected credit losses and consider several portfolio indicators including, but not limited to, expected economic conditions, historical loss experience, account seasoning, the value of collateral underlying secured loans, estimated foreclosures or defaults based on observable trends, delinquencies, bankruptcy filings, unemployment, credit bureau scores and general business trends. Management believes these factors are relevant in estimating expected credit losses and also considers an evaluation of overall portfolio credit quality based on indicators such as changes in our credit evaluation, underwriting and collection management policies, the effect of other external factors such as competition and legal and regulatory requirements, general economic conditions and business trends, and uncertainties in forecasting and modeling techniques used in estimating our allowance. The allowance related to commercial banking loans assessed on a pooled basis is based on our historical loss experience for loans with similar risk characteristics and consideration of the current credit quality of the portfolio, which is supplemented by management judgment as described above. These are adjusted for current conditions, and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels. We apply internal risk ratings to commercial banking loans, which we use to assess credit quality and derive a total loss estimate based on an estimated probability of default (“default rate”) and loss given default (“loss severity”). Management may also apply judgment to adjust the loss factors derived, taking into consideration both quantitative and qualitative factors, including general economic conditions, industry-specific and geographic trends, portfolio concentrations, trends in internal credit quality indicators, and current and past underwriting standards that have occurred but are not yet reflected in the historical data underlying our loss estimates. The allowance related to smaller-balance homogeneous credit card and consumer banking loans whose terms have been modified in a TDR is calculated on a pool basis using historical loss experience, adjusted for current conditions and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels for the respective class of assets. The allowance related to consumer banking loans that are assessed at a loan-level is determined based on key considerations that include the borrower’s overall financial condition, resources and payment history, prospects for support from financially responsible guarantors, and when applicable, the estimated realizable value of any collateral. The allowance related to commercial banking loans that are assessed at a loan-level is generally determined in accordance with our policy for estimating expected credit losses for collateral-dependent loans as described above. Off-balance sheet credit exposures In addition to the allowance, we also measure expected credit losses related to unfunded lending commitments that are not unconditionally cancellable in our Commercial Banking business. This reserve is measured using the same measurement objectives as the allowance for loans held for investment and is recorded within other liabilities on our consolidated balance sheets. These commitments are segregated by risk according to our internal risk rating scale, which we use to assess credit quality and derive an expected credit loss estimate. We assess these risk classifications, taking into consideration both quantitative and qualitative factors, including historical loss experience, adjusted for current conditions and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels, and utilization assumptions to estimate the reserve for unfunded lending commitments. Expected credit losses are not measured on unfunded lending commitments that are unconditionally cancellable, including all of our unfunded credit card and consumer banking lending commitments and certain of our unfunded commercial banking lending commitments. Determining the appropriateness of the allowance and the reserve for unfunded lending commitments is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the reserve for unfunded lending commitments in future periods. See “Note 4—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments” for additional information. Allowance for Credit Losses - Available for Sale Investment Securities When an investment security available for sale is impaired due to credit factors, we recognize a provision for credit losses on our consolidated statements of income and an allowance for credit losses on the consolidated balance sheet. Credit losses recognized in the allowance for credit losses are limited to the amount by which the investment security’s amortized cost basis exceeds its fair value. Investment securities in unrealized gain positions do not have an allowance for credit losses as the investment security could be sold at its fair value to prevent realization of credit losses. We exclude accrued interest from the fair value and amortized cost basis of an investment security for purposes of measuring impairment. Charge-offs of uncollectible amounts of investment securities are deducted from the allowance for credit losses. For certain of our securities available for sale, we have determined that there is no risk of impairment due to credit factors. These investment securities include high quality debt instruments that are issued and guaranteed by the United States government and its agencies or are issued through certain government-sponsored enterprises. Management performs periodic assessments to reevaluate this conclusion by considering any changes in historical losses, current conditions, and reasonable and supportable forecasts. We evaluate impairment on a quarterly basis at the individual security level and determine whether any portion of the decline in fair value is due to a credit loss. We make this determination through the use of quantitative and qualitative analyses. Our qualitative analysis includes factors such as the extent to which fair value is less than amortized cost, any changes in the security’s credit rating, past defaults or delayed payments, and adverse conditions impacting the security or issuer. A credit loss exists to the extent that management does not expect to recover the amortized cost basis. For investment securities which require further assessment, we perform a quantitative analysis using a discounted cash flow methodology and compare the present value of expected future cash flows from the security available for sale to the security’s amortized cost basis. Projected future cash flows reflect management’s best estimate and is based on our understanding of past events, current conditions, reasonable and supportable forecasts, and are discounted by the security’s effective interest rate adjusted for expected prepayments. The allowance for credit losses for investment securities reflects the difference by which the amortized cost basis exceeds the present value of future cash flows and is limited to the amount by which the security’s amortized cost exceeds its fair value. See “Note 2—Investment Securities” for additional information. Revenue Recognition Interest Income and Fees Interest income and fees on loans and investment securities are recognized based on the contractual provisions of the underlying arrangements. Loan origination fees and costs and premiums and discounts on loans held for investment are deferred and generally amortized into interest income as yield adjustments over the contractual life and/or commitment period using the effective interest method. Costs deferred include direct origination costs such as bounties paid to third parties for new accounts and incentives paid to our network of auto dealers for loan referrals. In certain circumstances, we elect to factor prepayment estimates into the calculation of the constant effective yield necessary to apply the interest method. Prepayment estimates are based on historical prepayment data, existing and forecasted interest rates, and economic data. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. Unamortized premiums, discounts and other basis adjustments on investment securities are recognized in interest income over the contractual lives of the securities using the effective interest method. Finance charges and fees on credit card loans are recorded in revenue when earned. Billed finance charges and fees on credit card loans are included in loan receivables. Unbilled finance charges and fees on credit card loans are included in interest receivable on our consolidated balance sheets. Annual membership fees are classified as service charges and other customer-related fees on our consolidated statements of income and are deferred and amortized into income over 12 months on a straight-line basis. We continue to accrue finance charges and fees on credit card loans until the account is charged off. Newly Adopted Accounting Standards During the Six Months Ended June 30, 2020
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Investment Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities |
Our investment securities portfolio consists of the following: U.S. Treasury securities, U.S. government-sponsored enterprise or agency (“Agency”) and non-agency residential mortgage-backed securities (“RMBS”), Agency commercial mortgage-backed securities (“CMBS”), and other securities. Agency securities include Government National Mortgage Association (“Ginnie Mae”) guaranteed securities, Federal National Mortgage Association (“Fannie Mae”) and Federal Home Loan Mortgage Corporation (“Freddie Mac”) issued securities. The carrying value of our investments in U.S. Treasury and Agency securities represented 97% and 96% of our total investment securities portfolio as of June 30, 2020 and December 31, 2019, respectively. In the first quarter of 2020, we adopted the CECL standard. For purchased credit-deteriorated (“PCD”) securities, this resulted in an increase of their amortized cost basis and related allowance for credit losses. However, the allowance for credit losses for PCD securities is limited to the amount by which the amortized cost basis of the PCD security exceeds its fair value. This limitation resulted in an increase of $11 million to our retained earnings with a corresponding decrease in AOCI at adoption. We exclude accrued interest receivable from the amortized cost disclosed in this note. Our disclosures below reflect these adoption changes. Prior period presentation was not reclassified to conform to the current period presentation. See “Note 1—Summary of Significant Accounting Policies” for additional information. The table below presents the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale as of June 30, 2020 and December 31, 2019. Accrued interest receivable of $233 million as of June 30, 2020 is not included in the below table. Table 2.1: Investment Securities Available for Sale
Investment Securities in a Gross Unrealized Loss Position The table below provides the gross unrealized losses and fair value of our securities available for sale aggregated by major security type and the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019. The amounts as of June 30, 2020 only include securities available for sale without an allowance for credit losses. Table 2.2: Securities in a Gross Unrealized Loss Position
Maturities and Yields of Investment Securities The table below summarizes, by major security type, the contractual maturities and weighted-average yields of our investment securities as of June 30, 2020. Because borrowers may have the right to call or prepay certain obligations, the expected maturities of our securities are likely to differ from the scheduled contractual maturities presented below. The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security. Table 2.3: Contractual Maturities and Weighted-Average Yields of Securities
Net Securities Gains or Losses and Process from Sales We had no sales of securities for the three months ended June 30, 2020. For the six months ended June 30, 2020, total proceeds from the sale of our securities were $144 million and we recognized less than $1 million of gains. For the three and six months ended June 30, 2019, total proceeds from sale of our securities were $909 million and $4.0 billion, with gains of $15 million and $39 million, respectively. Securities Pledged and Received We pledged investment securities totaling $12.6 billion and $14.0 billion as of June 30, 2020 and December 31, 2019, respectively. These securities are primarily pledged to secure Federal Home Loan Banks (“FHLB”) advances and Public Funds deposits, as well as for other purposes as required or permitted by law. We accepted pledges of securities with a fair value of approximately $1 million as of both June 30, 2020 and December 31, 2019, related to our derivative transactions.
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Loans |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans |
Our loan portfolio consists of loans held for investment, including loans held in our consolidated trusts, and loans held for sale. We further divide our loans held for investment into three portfolio segments: credit card, consumer banking and commercial banking. Credit card loans consist of domestic and international credit card loans. Consumer banking loans consist of auto and retail banking loans. Commercial banking loans consist of commercial and multifamily real estate as well as commercial and industrial loans. The information presented in this section excludes loans held for sale, which are carried at either fair value (if we elect the fair value option) or at the lower of cost or fair value. In the first quarter of 2020, we adopted the CECL standard. Accordingly, our disclosures below reflect these adoption changes. Prior period presentation was not modified to conform to the current period presentation. See “Note 1—Summary of Significant Accounting Policies” for additional information. Amounts as of June 30, 2020, include the impacts of COVID-19 customer assistance programs where applicable. Accrued interest receivable of $1.3 billion as of June 30, 2020 is not included in the tables in this note. The table below presents the composition and aging analysis of our loans held for investment portfolio as of June 30, 2020 and December 31, 2019. The delinquency aging includes all past due loans, both performing and nonperforming. Table 3.1: Loan Portfolio Composition and Aging Analysis
(1) Loans include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $1.1 billion as of both June 30, 2020 and December 31, 2019.The following table presents our loans held for investment that are 90 days or more past due that continue to accrue interest and loans that are classified as nonperforming as of June 30, 2020 and December 31, 2019. We also present nonperforming loans without an allowance as of June 30, 2020. Nonperforming loans generally include loans that have been placed on nonaccrual status. Table 3.2: 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans
(1) We recognized interest income for loans classified as nonperforming of $5 million and $11 million for the three and six months ended June 30, 2020, respectively. Credit Quality Indicators We closely monitor economic conditions and loan performance trends to assess and manage our exposure to credit risk. We discuss these risks and our credit quality indicator for each portfolio segment below. Credit Card Our credit card loan portfolio is highly diversified across millions of accounts and numerous geographies without significant individual exposure. We therefore generally manage credit risk based on portfolios with common risk characteristics. The risk in our credit card loan portfolio correlates to broad economic trends, such as unemployment rates and home values, as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we assess in monitoring the credit quality and risk of our credit card loan portfolio is delinquency trends, including an analysis of loan migration between delinquency categories over time. The table below presents our credit card portfolio by delinquency status as of June 30, 2020. Table 3.3: Credit Card Delinquency Status
Consumer Banking Our consumer banking loan portfolio consists of auto and retail banking loans. Similar to our credit card loan portfolio, the risk in our consumer banking loan portfolio correlates to broad economic trends, such as unemployment rates, gross domestic product and home values, as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we monitor when assessing the credit quality and risk of our auto loan portfolio is borrower credit scores as they measure the creditworthiness of borrowers. Delinquency trends are the key indicator we assess in monitoring the credit quality and risk of our retail banking loan portfolio. The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of June 30, 2020 and December 31, 2019. We present our auto loan portfolio by FICO scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming. Table 3.4: Consumer Banking Portfolio by Credit Quality Indicator
(2) Includes the Paycheck Protection Program (“PPP”) loans of $931 million as of June 30, 2020. Commercial Banking The key credit quality indicator for our commercial loan portfolios is our internal risk ratings. We assign internal risk ratings to loans based on relevant information about the ability of the borrowers to repay their debt. In determining the risk rating of a particular loan, some of the factors considered are the borrower’s current financial condition, historical and projected future credit performance, prospects for support from financially responsible guarantors, the estimated realizable value of any collateral and current economic trends. The scale based on our internal risk rating system is as follows:
We use our internal risk rating system for regulatory reporting, determining the frequency of credit exposure reviews, and evaluating and determining the allowance for credit losses for commercial loans. Generally, loans that are designated as criticized performing and criticized nonperforming are reviewed quarterly by management to determine if they are appropriately classified/rated and whether any impairment exists. Noncriticized loans are also generally reviewed, at least annually, to determine the appropriate risk rating. In addition, we evaluate the risk rating during the renewal process of any loan or if a loan becomes past due. The following table presents our commercial banking portfolio of loans held for investment by internal risk ratings as of June 30, 2020 and December 31, 2019. The internal risk rating status includes all past due loans, both performing and nonperforming. Table 3.5: Commercial Banking Portfolio by Internal Risk Ratings
(2) Includes PPP loans of $231 million as of June 30, 2020. Revolving Loans Converted to Term Loans For the three and six months ended June 30, 2020, we converted $89 million and $249 million of revolving loans to term loans, respectively, primarily in our domestic credit card loan portfolio. Troubled Debt Restructurings In response to the COVID-19 pandemic, the Federal Banking Agencies issued an interagency statement that provides banking organizations with additional guidance and relief on accounting for certain customer concessions related to COVID-19. Specifically, TDR accounting relief is available for short-term COVID-19-related modifications of loans that were not more than 30 days past due where concessions do not extend beyond six months. We assessed all loan modifications introduced to borrowers as of June 30, 2020 in response to COVID-19 and followed guidance that such eligible loan modifications made on a temporary and good faith basis in response to COVID-19 are not considered TDRs. Total recorded TDRs were $1.8 billion and $1.7 billion as of June 30, 2020 and December 31, 2019, respectively. TDRs classified as performing in our credit card and consumer banking loan portfolios totaled $1.2 billion and $1.1 billion as of June 30, 2020 and December 31, 2019, respectively. TDRs classified as performing in our commercial banking loan portfolio totaled $349 million and $224 million as of June 30, 2020 and December 31, 2019, respectively. Commitments to lend additional funds on loans modified in TDRs totaled $145 million and $178 million as of June 30, 2020 and December 31, 2019, 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 and six months ended June 30, 2020 and 2019. Table 3.6: Troubled Debt Restructurings
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 3.7: TDRs—Subsequent Defaults
Loans Pledged We pledged loan collateral of $15.7 billion and $14.6 billion to secure the majority of our FHLB borrowing capacity of $17.9 billion and $18.7 billion as of June 30, 2020 and December 31, 2019, respectively. We also pledged loan collateral of $28.2 billion and $6.7 billion to secure our Federal Reserve Discount Window borrowing capacity of $22.2 billion and $5.3 billion as of June 30, 2020 and December 31, 2019, respectively. In addition to loans pledged, we securitized a portion of our credit card and auto loans. See “Note 5—Variable Interest Entities and Securitizations” for additional information.
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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments |
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Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses |
In the first quarter of 2020, we adopted the CECL standard. Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment. Accordingly, our disclosures below reflect these adoption changes. Prior period presentation was not modified to conform to the current period presentation. See “Note 1—Summary of Significant Accounting Policies” for additional information. Our allowance for credit losses represents management’s current estimate of expected credit losses over the contractual terms of our loans held for investment as of each balance sheet date. Expected recoveries of amounts previously charged off or expected to be charged off are recognized within the allowance. When developing an estimate of expected credit losses, we use both quantitative and qualitative methods in considering all available information relevant to assessing collectability. This may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. Management will consider and may qualitatively adjust for conditions, changes, and trends in loan portfolios that may not be captured in modeled results. These adjustments are referred to as qualitative factors and represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Significant judgment is applied in our estimation of lifetime credit losses. We have unfunded lending commitments in our Commercial Banking business that are not unconditionally cancellable by us and for which we estimate expected credit losses in establishing a reserve. This reserve is measured using the same measurement objectives as the allowance for loans held for investment. We build or release the reserve for unfunded lending commitments through the provision for credit losses in our consolidated statements of income and the related reserve for unfunded lending commitments is included in other liabilities on our consolidated balance sheets. Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity The table below summarizes changes in the allowance for credit losses and reserve for unfunded lending commitments by portfolio segment for the three and six months ended June 30, 2020 and 2019. The allowance balance as of June 30, 2020 reflects the cumulative effects from adoption of the CECL standard and the change to include finance charge and fee reserve in the allowance for credit losses. The reserve for unfunded lending commitments balance as of June 30, 2020 also reflects the cumulative effects from adoption of the CECL standard, including the component of loss sharing agreements with the GSEs on multifamily commercial real estate loans that are within the scope of the CECL standard. When developing an estimate of expected credit losses, we use both quantitative and qualitative methods in considering all available information relevant to assessing collectability. Management will consider and may make adjustments for qualitative factors, which represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Our allowance for credit losses increased by $9.6 billion to $16.8 billion as of June 30, 2020 from December 31, 2019, primarily driven by the allowance build from expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic as well as the adoption of the CECL standard. Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
Credit Card Partnership Loss Sharing Arrangements We have certain credit card partnership agreements that are presented within our consolidated financial statements on a net basis, in which our partner agrees to share a portion of the credit losses on the underlying loan portfolio. The expected reimbursements from these partners are netted against our allowance for credit losses. Our methodology for estimating reimbursements is consistent with the methodology we use to estimate the allowance for credit losses on our credit card loan receivables. These expected reimbursements result in reductions to net charge-offs and provision for credit losses. See “Note 1—Summary of Significant Accounting Policies” in our 2019 Form 10-K for further discussion of our credit card partnership agreements. The table below summarizes the changes in the estimated reimbursements from these partners for the three and six months ended June 30, 2020 and 2019. Table 4.2: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
(1) Includes effects from adoption of the CECL standard in the first quarter of 2020.
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Variable Interest Entities and Securitizations |
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Variable Interest Entities and Securitization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities and Securitizations |
In the normal course of business, we enter into various types of transactions with entities that are considered to be VIEs. Our primary involvement with VIEs has been related to our securitization transactions in which we transferred assets to securitization trusts. We have primarily securitized credit card and auto loans, which have provided a source of funding for us and enabled us to transfer a certain portion of the economic risk of the loans or related debt securities to third parties. The entity that has a controlling financial interest in a VIE is referred to as the primary beneficiary and is required to consolidate the VIE. The majority of the VIEs in which we are involved have been consolidated in our financial statements. Summary of Consolidated and Unconsolidated VIEs The assets of our consolidated VIEs primarily consist of cash, loan receivables and the related allowance for credit losses, which we report on our consolidated balance sheets under restricted cash for securitization investors, loans held in consolidated trusts and allowance for credit losses, respectively. The assets of a particular VIE are the primary source of funds to settle its obligations. Creditors of these VIEs typically do not have recourse to our general credit. Liabilities primarily consist of debt securities issued by the VIEs, which we report under securitized debt obligations on our consolidated balance sheets. For unconsolidated VIEs, we present the carrying amount of assets and liabilities reflected on our consolidated balance sheets and our maximum exposure to loss. Our maximum exposure to loss is estimated based on the unlikely event that all of the assets in the VIEs become worthless and we are required to meet our maximum remaining funding obligations. The tables below present a summary of VIEs in which we had continuing involvement or held a variable interest, aggregated based on VIEs with similar characteristics as of June 30, 2020 and December 31, 2019. We separately present information for consolidated and unconsolidated VIEs. Table 5.1: Carrying Amount of Consolidated and Unconsolidated VIEs
Securitization-Related VIEs In a securitization transaction, assets are transferred to a trust, which generally meets the definition of a VIE. We engage in securitization activities as an issuer and an investor. Our primary securitization issuance activity includes credit card and auto securitizations, conducted through securitization trusts which we consolidate. Our continuing involvement in these securitization transactions mainly consists of acting as the primary servicer and holding certain retained interests. In our multifamily agency business, we originate multifamily commercial real estate loans and transfer them to securitization trusts of government-sponsored enterprises (“GSEs”). We retain the related Mortgage servicing rights (“MSRs”) and service the transferred loans pursuant to the guidelines set forth by the GSEs. As an investor, we hold primarily RMBS and CMBS in our investment securities portfolio, which represent variable interests in the respective securitization trusts from which those securities were issued. We do not consolidate the securitization trusts employed in these transactions as we do not have the power to direct the activities that most significantly impact the economic performance of these securitization trusts. Our maximum exposure to loss as a result of our involvement with these VIEs is the carrying value of MSRs and contractual obligations under loss sharing arrangements as well as investment securities on our consolidated balance sheets. See “Note 6—Goodwill and Intangible Assets” for information related to our MSRs associated with these securitizations and “Note 2—Investment Securities” for more information on the securities held in our investment securities portfolio. We exclude these VIEs from the tables within this note because we do not consider our continuing involvement with these VIEs to be significant as we either invest in securities issued by the VIE and were not involved in the design of the VIE or no transfers have occurred between the VIE and us. In addition, where we have certain lending arrangements in the normal course of business with entities that could be VIEs, we have also excluded these VIEs from the tables presented in this note. See “Note 3—Loans” for additional information regarding our lending arrangements in the normal course of business. The table below presents our continuing involvement in certain securitization-related VIEs as of June 30, 2020 and December 31, 2019. Table 5.2: Continuing Involvement in Securitization-Related VIEs
Credit Card Securitizations We securitize a portion of our credit card loans which provides a source of funding for us. Credit card securitizations involve the transfer of credit card receivables to securitization trusts. These trusts then issue debt securities collateralized by the transferred receivables to third-party investors. We hold certain retained interests in our credit card securitizations and continue to service the receivables in these trusts. We consolidate these trusts because we are deemed to be the primary beneficiary as we have the power to direct the activities that most significantly impact the economic performance of the trusts, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the trusts. Auto Securitizations Similar to our credit card securitizations, we securitize a portion of our auto loans which provides a source of funding for us. Auto securitization involves the transfer of auto loans to securitization trusts. These trusts then issue debt securities collateralized by the transferred loans to third-party investors. We hold certain retained interests and continue to service the loans in these trusts. We consolidate these trusts because we are deemed to be the primary beneficiary as we have the power to direct the activities that most significantly impact the economic performance of the trusts, and the right to receive benefits or the obligation to absorb losses that could potentially be significant to the trusts. Mortgage Securitizations We had previously securitized mortgage loans by transferring these loans to securitization trusts that had issued mortgage-backed securities to investors. These mortgage trusts consist of option-adjustable rate mortgage (“option-ARM”) securitizations and securitizations from our discontinued operations which include the mortgage origination operations of our wholesale mortgage banking unit, GreenPoint Mortgage Funding, Inc. (“GreenPoint”) and the manufactured housing operations of GreenPoint Credit, LLC, a subsidiary of GreenPoint (collectively “GreenPoint securitizations”). We retain rights to certain future cash flows arising from these securitizations. We do not consolidate the mortgage securitizations because we do not have the power to direct the activities that most significantly impact the economic performance of the trusts, and the right to receive the benefits or the obligation to absorb losses that could potentially be significant to the trusts. Other VIEs Affordable Housing Entities As part of our community reinvestment initiatives, we invest in private investment funds that make equity investments in multifamily affordable housing properties. We receive affordable housing tax credits for these investments. The activities of these entities are financed with a combination of invested equity capital and debt. We account for certain of our investments in qualified affordable housing projects using the proportional amortization method if certain criteria are met. The proportional amortization method amortizes the cost of the investment over the period in which the investor expects to receive tax credits and other tax benefits, and the resulting amortization is recognized as a component of income tax expense attributable to continuing operations. For the six months ended June 30, 2020 and 2019, we recognized amortization of $285 million and $279 million, respectively, and tax credits of $622 million and $355 million, respectively, associated with these investments within income tax provision or benefit. The carrying value of our equity investments in these qualified affordable housing projects was $4.5 billion and $4.4 billion as of June 30, 2020 and December 31, 2019, respectively. We are periodically required to provide additional financial or other support during the period of the investments. Our liability for these unfunded commitments was $1.5 billion as of both June 30, 2020 and December 31, 2019, and is largely expected to be paid from 2020 to 2022. For those investment funds considered to be VIEs, we are not required to consolidate them if we do not have the power to direct the activities that most significantly impact the economic performance of those entities. We record our interests in these unconsolidated VIEs in loans held for investment, other assets and other liabilities on our consolidated balance sheets. Our maximum exposure to these entities is limited to our variable interests in the entities which consisted of assets of approximately $4.6 billion as of both June 30, 2020 and December 31, 2019. The creditors of the VIEs have no recourse to our general credit and we do not provide additional financial or other support other than during the period that we are contractually required to provide it. The total assets of the unconsolidated VIE investment funds were approximately $10.8 billion and $10.9 billion as of June 30, 2020 and December 31, 2019, respectively. Entities that Provide Capital to Low-Income and Rural Communities We hold variable interests in entities (“Investor Entities”) that invest in community development entities (“CDEs”) that provide debt financing to businesses and non-profit entities in low-income and rural communities. Variable interests in the CDEs held by the consolidated Investor Entities are also our variable interests. The activities of the Investor Entities are financed with a combination of invested equity capital and debt. The activities of the CDEs are financed solely with invested equity capital. We receive federal and state tax credits for these investments. We consolidate the VIEs in which we have the power to direct the activities that most significantly impact the VIE’s economic performance and where we have the obligation to absorb losses or right to receive benefits that could be potentially significant to the VIE. We consolidate other investments and CDEs that are not considered to be VIEs, but where we hold a controlling financial interest. The assets of the VIEs that we consolidated, which totaled approximately $2.0 billion and $1.9 billion as of June 30, 2020 and December 31, 2019, respectively, are reflected on our consolidated balance sheets in cash, loans held for investment, and other assets. The liabilities are reflected in other liabilities. The creditors of the VIEs have no recourse to our general credit. We have not provided additional financial or other support other than during the period that we are contractually required to provide it. Other We hold variable interests in other VIEs, including companies that promote renewable energy sources and other equity method investments. We were not required to consolidate these VIEs because we do not have the power to direct the activities that most significantly impact their economic performance. Our maximum exposure to these VIEs is limited to the investments on our consolidated balance sheets of $476 million and $502 million as of June 30, 2020 and December 31, 2019, respectively. The creditors of the other VIEs have no recourse to our general credit. We have not provided additional financial or other support other than during the period that we are contractually required to provide it.
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Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets |
The table below presents our goodwill, intangible assets and MSRs as of June 30, 2020 and December 31, 2019. Goodwill is presented separately, while intangible assets and MSRs are included in other assets on our consolidated balance sheets. Table 6.1: Components of Goodwill, Intangible Assets and MSRs
Amortization expense for amortizable intangible assets, which is presented separately in our consolidated statements of income, totaled $16 million and $38 million for the three and six months ended June 30, 2020, respectively, and $29 million and $59 million for the three and six months ended June 30, 2019, respectively. Goodwill The following table presents changes in the carrying amount of goodwill by each of our business segments as of June 30, 2020 and December 31, 2019. Table 6.2: Goodwill by Business Segments
(1) Represents foreign currency translation adjustments and measurement period adjustments on prior period acquisitions.
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Deposits and Borrowings |
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Deposits and Borrowings [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits and Borrowings |
Our deposits represent our largest source of funding for our assets and operations, which include checking accounts, money market deposits, negotiable order of withdrawals, savings deposits and time deposits. We also use a variety of other funding sources including short-term borrowings, senior and subordinated notes, securitized debt obligations and other borrowings. In addition, we utilize FHLB advances, which are secured by certain portions of our loan and investment securities portfolios. Securitized debt obligations are presented separately on our consolidated balance sheets, as they represent obligations of consolidated securitization trusts, while federal funds purchased and securities loaned or sold under agreements to repurchase, senior and subordinated notes and other borrowings, including FHLB advances, are included in other debt on our consolidated balance sheets. Our total short-term borrowings generally consist of federal funds purchased and securities loaned or sold under agreements to repurchase and short-term FHLB advances. Our long-term debt consists of borrowings with an original contractual maturity of greater than one year. The following tables summarize the components of our deposits, short-term borrowings and long-term debt as of June 30, 2020 and December 31, 2019. The carrying value presented below for these borrowings includes unamortized debt premiums and discounts, net of debt issuance costs and fair value hedge accounting adjustments. Table 7.1: Components of Deposits, Short-Term Borrowings and Long-Term Debt
(2) Includes $1.4 billion of EUR-denominated unsecured notes as of both June 30, 2020 and December 31, 2019.
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Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities |
Use of Derivatives and Accounting for Derivatives We regularly enter into derivative transactions to support our overall risk management activities. Our primary market risks stem from the impact on our earnings and economic value of equity due to changes in interest rates and, to a lesser extent, changes in foreign exchange rates. We manage our interest rate sensitivity by employing several techniques, which include changing the duration and re-pricing characteristics of various assets and liabilities by using interest rate derivatives. We also use foreign currency derivatives to limit our earnings and capital exposures to foreign exchange risk by hedging exposures denominated in foreign currencies. We primarily use interest rate and foreign currency derivatives to hedge, but we may also use a variety of other derivative instruments, including caps, floors, options, futures and forward contracts, to manage our interest rate and foreign exchange risks. We designate these risk management derivatives as either qualifying accounting hedges or free-standing derivatives. Qualifying accounting hedges are further designated as fair value hedges, cash flow hedges or net investment hedges. Free-standing derivatives are economic hedges that do not qualify for hedge accounting. We also offer interest rate, commodity, foreign currency derivatives and other contracts as an accommodation to our customers within our Commercial Banking business. We enter into these derivatives with our customers primarily to help them manage their interest rate risks, hedge their energy and other commodities exposures, and manage foreign currency fluctuations. We then enter into derivative contracts with counterparties to economically hedge substantially all of our subsequent exposures. See below for additional information on our use of derivatives and how we account for them:
Derivatives Counterparty Credit Risk Counterparty Types Derivative instruments contain an element of credit risk that arises from the potential failure of a counterparty to perform according to the terms of the contract, including making payments due upon maturity of certain derivative instruments. We execute our derivative contracts primarily in over-the-counter (“OTC”) markets. We also execute interest rate and commodity futures in the exchange-traded derivative markets. Our OTC derivatives consist of both trades cleared through central counterparty clearinghouses (“CCPs”) and uncleared bilateral contracts. The Chicago Mercantile Exchange (“CME”) and the LCH Group (“LCH”) are our CCPs in our centrally cleared contracts. In our uncleared bilateral contracts, we enter into agreements directly with our derivative counterparties. Counterparty Credit Risk Management We manage the counterparty credit risk associated with derivative instruments by entering into legally enforceable master netting arrangements, where possible, and exchanging collateral with our counterparties, typically in the form of cash or high-quality liquid securities. The amount of collateral exchanged is dependent upon the fair value of the derivative instruments as well as the fair value of the pledged collateral. When valuing collateral, an estimate of the variation in price and liquidity over time is subtracted in the form of a “haircut” to discount the value of the collateral pledged. Our exposure to derivative counterparty credit risk, at any point in time, is equal to the amount reported as a derivative asset on our balance sheet. The fair value of our derivatives is adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and any associated cash collateral received or pledged. See Table 8.3 for our net exposure associated with derivatives. The terms under which we collateralize our exposures differ between cleared exposures and uncleared bilateral exposures.
Credit Risk Valuation Adjustments We record counterparty credit valuation adjustments (“CVAs”) on our derivative assets to reflect the credit quality of our counterparties. We consider collateral and legally enforceable master netting agreements that mitigate our credit exposure to each counterparty in determining CVAs, which may be adjusted due to changes in the fair values of the derivative contracts, collateral, and creditworthiness of the counterparty. We also record debit valuation adjustments (“DVAs”) to adjust the fair values of our derivative liabilities to reflect the impact of our own credit quality. Balance Sheet Presentation The following table summarizes the notional amounts and fair values of our derivative instruments as of June 30, 2020 and December 31, 2019, which are segregated by derivatives that are designated as accounting hedges and those that are not, and are further segregated by type of contract within those two categories. The total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and any associated cash collateral received or pledged. Derivative assets and liabilities are included in other assets and other liabilities, respectively, on our consolidated balance sheets, and their related gains or losses are included in operating activities as changes in other assets and other liabilities in the consolidated statements of cash flows. Table 8.1: Derivative Assets and Liabilities at Fair Value
The following table summarizes the carrying value of our hedged assets and liabilities in fair value hedges and the associated cumulative basis adjustments included in those carrying values, excluding basis adjustments related to foreign currency risk, as of June 30, 2020 and December 31, 2019. Table 8.2: Hedged Items in Fair Value Hedging Relationships
Balance Sheet Offsetting of Financial Assets and Liabilities Derivative contracts and repurchase agreements that we execute bilaterally in the OTC market are generally governed by enforceable master netting arrangements where we generally have the right to offset exposure with the same counterparty. Either counterparty can generally request to net settle all contracts through a single payment upon default on, or termination of, any one contract. We elect to offset the derivative assets and liabilities under master netting arrangements for balance sheet presentation where a right of setoff exists. For derivative contracts entered into under master netting arrangements for which we have not been able to confirm the enforceability of the setoff rights, or those not subject to master netting arrangements, we do not offset our derivative positions for balance sheet presentation. The following table presents the gross and net fair values of our derivative assets, derivative liabilities, resale and repurchase agreements and the related offsetting amounts permitted under U.S. GAAP as of June 30, 2020 and December 31, 2019. The table also includes cash and non-cash collateral received or pledged in accordance with such arrangements. The amount of collateral presented, however, is limited to the amount of the related net derivative fair values or outstanding balances; therefore, instances of over-collateralization are excluded. Table 8.3: Offsetting of Financial Assets and Financial Liabilities
Income Statement and AOCI Presentation Fair Value and Cash Flow Hedges The net gains (losses) recognized in our consolidated statements of income related to derivatives in fair value and cash flow hedging relationships are presented below for the three and six months ended June 30, 2020 and 2019. Table 8.4: Effects of Fair Value and Cash Flow Hedge Accounting
In the next 12 months, we expect to reclassify to earnings net after-tax gains of $649 million recorded in AOCI as of June 30, 2020. These amounts will offset the cash flows associated with the hedged forecasted transactions. The maximum length of time over which forecasted transactions were hedged was approximately 7 years as of June 30, 2020. The amount we expect to reclassify into earnings may change as a result of changes in market conditions and ongoing actions taken as part of our overall risk management strategy. Free-Standing Derivatives The net impacts to our consolidated statements of income related to free-standing derivatives are presented below for the three and six months ended June 30, 2020 and 2019. These gains or losses are recognized in other non-interest income in our consolidated statements of income. Table 8.5: Gains (Losses) on Free-Standing Derivatives
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Stockholders' Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity |
Preferred Stock The following table summarizes our preferred stock outstanding as of June 30, 2020 and December 31, 2019. Table 9.1: Preferred Stock Outstanding(1)
Accumulated Other Comprehensive Income Accumulated other comprehensive income primarily consists of accumulated net unrealized gains associated with securities available for sale, changes in fair value of derivatives in hedging relationships, and foreign currency translation adjustments. The following table includes the AOCI impacts from the adoption of the CECL standard and the changes in AOCI by component for the three and six months ended June 30, 2020 and 2019. Table 9.2: Accumulated Other Comprehensive Income (Loss)
The following table presents amounts reclassified from each component of AOCI to our consolidated statements of income for the three and six months ended June 30, 2020 and 2019. Table 9.3: Reclassifications from AOCI
The table below summarizes other comprehensive income activity and the related tax impact for the three and six months ended June 30, 2020 and 2019. Table 9.4: Other Comprehensive Income
(1) Includes the impact of hedging instruments designated as net investment hedges.
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Earnings Per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share |
The following table sets forth the computation of basic and diluted earnings per common share. Table 10.1: Computation of Basic and Diluted Earnings per Common Share
(1) In periods of net loss, dilutive securities are excluded as their inclusion would have an anti-dilutive effect. Accordingly, awards of 362 thousand shares and options of 2.6 million shares with an exercise price ranging from $45.75 to $86.34 and awards of 956 thousand shares and options of 2.7 million shares with an exercise price ranging from $36.55 to $86.34 were excluded for the three and six months ended June 30, 2020, respectively. For the three months ended June 30, 2019, no shares were excluded from the computation of diluted earnings per share. For the six months ended June 30, 2019, 137 thousand shares related to options with an exercise price of $86.34 were excluded from the computation of diluted earnings per share, because their inclusion would be anti-dilutive.
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Fair Value Measurement |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement |
Fair value, also referred to as an exit price, is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level fair value hierarchy for classifying financial instruments. This hierarchy is based on the markets in which the assets or liabilities trade and whether the inputs to the valuation techniques used to measure fair value are observable or unobservable. The fair value measurement of a financial asset or liability is assigned a level based on the lowest level of any input that is significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are described below:
The accounting guidance for fair value measurements requires that we maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The accounting guidance provides for the irrevocable option to elect, on a contract-by-contract basis, to measure certain financial assets and liabilities at fair value at inception of the contract and record any subsequent changes in fair value in earnings. The determination and classification of financial instruments in the fair value hierarchy is performed at the end of each reporting period. We consider all available information, including observable market data, indications of market liquidity and orderliness, and our understanding of the valuation techniques and significant inputs. For additional information on the valuation techniques used in estimating the fair value of our financial assets and liabilities on a recurring basis, see “Note 16—Fair Value Measurement” in our 2019 Form 10-K. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following table displays our assets and liabilities measured on our consolidated balance sheets at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. Table 11.1: Assets and Liabilities Measured at Fair Value on a Recurring Basis
Level 3 Recurring Fair Value Rollforward The table below presents a reconciliation for all assets and liabilities measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2020 and 2019. Generally, transfers into Level 3 were primarily driven by the usage of unobservable assumptions in the pricing of these financial instruments as evidenced by wider pricing variations among pricing vendors and transfers out of Level 3 were primarily driven by the usage of assumptions corroborated by market observable information as evidenced by tighter pricing among multiple pricing sources. Table 11.2: Level 3 Recurring Fair Value Rollforward
Significant Level 3 Fair Value Asset and Liability Inputs Generally, uncertainties in fair value measurements of financial instruments, such as changes in unobservable inputs, may have a significant impact on fair value. Certain of these unobservable inputs will, in isolation, have a directionally consistent impact on the fair value of the instrument for a given change in that input. Alternatively, the fair value of the instrument may move in an opposite direction for a given change in another input. In general, an increase in the discount rate, default rates, loss severity and credit spreads, in isolation, would result in a decrease in the fair value measurement. In addition, an increase in default rates would generally be accompanied by a decrease in recovery rates, slower prepayment rates and an increase in liquidity spreads. Techniques and Inputs for Level 3 Fair Value Measurements The following table presents the significant unobservable inputs used to determine the fair values of our Level 3 financial instruments on a recurring basis. We utilize multiple vendor pricing services to obtain fair value for our securities. Several of our vendor pricing services are only able to provide unobservable input information for a limited number of securities due to software licensing restrictions. Other vendor pricing services are able to provide unobservable input information for all securities for which they provide a valuation. As a result, the unobservable input information for the securities available for sale presented below represents a composite summary of all information we are able to obtain. The unobservable input information for all other Level 3 financial instruments is based on the assumptions used in our internal valuation models. Table 11.3: Quantitative Information about Level 3 Fair Value Measurements
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We are required to measure and recognize certain assets at fair value on a nonrecurring basis on the consolidated balance sheets. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, from the application of lower of cost or fair value accounting or when we evaluate for impairment). The following table presents the carrying value of the assets measured at fair value on a nonrecurring basis and still held as of June 30, 2020 and December 31, 2019, and for which a nonrecurring fair value measurement was recorded during the six and twelve months then ended. Table 11.4: Nonrecurring Fair Value Measurements
In the above table, loans held for investment are generally valued based in part on the estimated fair value of the underlying collateral and the non-recoverable rate, which is considered to be a significant unobservable input. The non-recoverable rate ranged from 0% to 15%, with a weighted average of 3%, and from 0% to 50%, with a weighted average of 6%, as of June 30, 2020 and December 31, 2019, respectively. The weighted average non-recoverable rate is calculated based on the estimated market value of the underlying collateral. The significant unobservable inputs and related quantitative information related to fair value of the other assets are not meaningful to disclose as they vary significantly across properties and collateral. The following table presents total nonrecurring fair value measurements for the period, included in earnings, attributable to the change in fair value relating to assets that are still held at June 30, 2020 and 2019. Table 11.5: Nonrecurring Fair Value Measurements Included in Earnings
Fair Value of Financial Instruments The following table presents the carrying value and estimated fair value, including the level within the fair value hierarchy, of our financial instruments that are not measured at fair value on a recurring basis on our consolidated balance sheets as of June 30, 2020 and December 31, 2019. Table 11.6: Fair Value of Financial Instruments
(2) Other borrowings excludes finance lease liabilities.
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Business Segments and Revenue from Contracts with Customers |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure |
Our principal operations are organized into three major business segments, which are defined primarily based on the products and services provided or the types of customers 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, asset/liability management by our centralized Corporate Treasury group and residual tax expense or benefit to arrive at the consolidated effective tax rate that is not assessed to our primary business segments, are included in the Other category. Basis of Presentation We report the results of each of our business segments on a continuing operations basis. 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 17—Business Segments and Revenue from Contracts with Customers” in our 2019 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 or changes in organizational alignment. The following table presents our business segment results for the three and six months ended June 30, 2020 and 2019, selected balance sheet data as of June 30, 2020 and 2019, and a reconciliation of our total business segment results to our reported consolidated income from continuing operations, loans held for investment and deposits. Table 12.1: Segment Results and Reconciliation
Revenue from Contracts with Customers The majority of our revenue from contracts with customers consists of interchange fees, service charges and other customer-related fees, and other contract revenue. Interchange fees are primarily from our Credit Card business and are recognized upon settlement with the interchange networks, net of rewards earned by customers. Service charges and other customer-related fees within our Consumer Banking business are primarily related to fees earned on consumer deposit accounts for account maintenance and various transaction-based services such as overdrafts and ATM usage. Service charges and other customer-related fees within our Commercial Banking business are mostly related to fees earned on treasury management and capital markets services. Other contract revenue in our Credit Card business consists primarily of revenue from our partnership arrangements. Other contract revenue in our Consumer Banking business consists primarily of revenue earned on certain marketing and promotional events from our auto dealers. Revenue from contracts with customers is included in non-interest income in our consolidated statements of income. The following table presents revenue from contracts with customers and a reconciliation to non-interest income by business segment for the three and six months ended June 30, 2020 and 2019. Table 12.2: Revenue from Contracts with Customers and Reconciliation to Segments Result
(2) Interchange fees are presented net of customer reward expenses.
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Commitments, Contingencies, Guarantees, and Others |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments, Contingencies, Guarantees and Others |
Commitments to Lend Our unfunded lending commitments primarily consist of credit card lines, loan commitments to customers of both our Commercial Banking and Consumer Banking businesses, as well as standby and commercial letters of credit. These commitments, other than credit card lines, are legally binding conditional agreements that have fixed expirations or termination dates and specified interest rates and purposes. The contractual amount of these commitments represents the maximum possible credit risk to us should the counterparty draw upon the commitment. We generally manage the potential risk of unfunded lending commitments by limiting the total amount of arrangements, monitoring the size and maturity structure of these portfolios, and applying the same credit standards for all of our credit activities. For unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time. Commitments to extend credit other than credit card lines generally require customers to maintain certain credit standards. Collateral requirements and loan-to-value (“LTV”) ratios are the same as those for funded transactions and are established based on management’s credit assessment of the customer. These commitments may expire without being drawn upon; therefore, the total commitment amount does not necessarily represent future funding requirements. We also issue letters of credit, such as financial standby, performance standby and commercial letters of credit, to meet the financing needs of our customers. Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party in a borrowing arrangement. Commercial letters of credit are short-term commitments issued primarily to facilitate trade finance activities for customers and are generally collateralized by the goods being shipped to the customer. These collateral requirements are similar to those for funded transactions and are established based on management’s credit assessment of the customer. Management conducts regular reviews of all outstanding letters of credit and the results of these reviews are considered in assessing the adequacy of reserves for unfunded lending commitments. The following table presents the contractual amount and carrying value of our unfunded lending commitments as of June 30, 2020 and December 31, 2019. The carrying value represents our reserve and deferred revenue on legally binding commitments. Table 13.1: Unfunded Lending Commitments
Loss Sharing Agreements Within our Commercial Banking business, we originate multifamily commercial real estate loans with the intent to sell them to the GSEs. We enter into loss sharing agreements with the GSEs upon the sale of the loans. Beginning January 1, 2020, we elected the fair value option on new loss sharing agreements. Unrealized gains and losses are recorded in other non-interest income in our consolidated statements of income. For those loss sharing agreements entered into as of December 31, 2019, we amortize the liability recorded at inception into non-interest income as we are released from risk of payment under the loss sharing agreement and record our estimate of expected credit losses each period in provision for credit losses in our consolidated statements of income. The liability recognized on our consolidated balance sheets for these loss sharing agreements was $96 million and $75 million as of June 30, 2020 and December 31, 2019, respectively. See “Note 4—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments” for more information related to our credit card partnership loss sharing arrangements. U.K. Payment Protection Insurance In the U.K., we previously sold payment protection insurance (“PPI”). In response to an elevated level of customer complaints across the industry, heightened media coverage and pressure from consumer advocacy groups, the U.K. Financial Conduct Authority (“FCA”), formerly the Financial Services Authority, investigated and raised concerns about the way the industry has handled complaints related to the sale of these insurance policies. For the past several years, the U.K.’s Financial Ombudsman Service (“FOS”) has been adjudicating customer complaints relating to PPI, escalated to it by consumers who disagree with the rejection of their complaint by firms, leading to customer remediation payments by us and others within the industry. In August 2017, the FCA issued final rules and guidance on the PPI complaints. This set the deadline for complaints as August 29, 2019. It also provided clarity on how to handle PPI complaints under s.140A of the Consumer Credit Act, including guidance on how redress for such complaints should be calculated. In determining our best estimate of incurred losses for future remediation payments, management considers numerous factors, including (i) the number of customer complaints or information requests still to be processed; (ii) our expectation of upholding those complaints; (iii) the expected number of complaints customers escalate to the FOS; (iv) our expectation of the FOS upholding such escalated complaints; (v) the number of complaints that fall under s.140A of the Consumer Credit Act; and (vi) the estimated remediation payout to customers. We monitor these factors each quarter and adjust our reserves to reflect the latest data. Our U.K. PPI reserve totaled $76 million and $188 million as of June 30, 2020 and December 31, 2019, respectively. For the six months ended June 30, 2020, no additions were made to the reserve. Our best estimate of reasonably possible future losses beyond our reserve as of June 30, 2020 is approximately $50 million. Litigation In accordance with the current accounting standards for loss contingencies, we establish reserves for litigation-related matters that arise from the ordinary course of our business activities when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss can be reasonably estimated. None of the amounts we currently have recorded individually or in the aggregate are considered to be material to our financial condition. Litigation claims and proceedings of all types are subject to many uncertain factors that generally cannot be predicted with assurance. Below we provide a description of potentially material legal proceedings and claims. For some of the matters disclosed below, we are able to estimate reasonably possible losses above existing reserves, and for other disclosed matters, such an estimate is not possible at this time. For those matters below where an estimate is possible, management currently estimates the reasonably possible future losses beyond our reserves as of June 30, 2020 are approximately $1.0 billion. Our reserve and reasonably possible loss estimates involve considerable judgment and reflect that there is still significant uncertainty regarding numerous factors that may impact the ultimate loss levels. Notwithstanding our attempt to estimate a reasonably possible range of loss beyond our current accrual levels for some litigation matters based on current information, it is possible that actual future losses will exceed both the current accrual level and the range of reasonably possible losses disclosed here. Given the inherent uncertainties involved in these matters, especially those involving governmental agencies, and the very large or indeterminate damages sought in some of these matters, there is significant uncertainty as to the ultimate liability we may incur from these litigation matters and an adverse outcome in one or more of these matters could be material to our results of operations or cash flows for any particular reporting period. Interchange In 2005, a putative class of retail merchants filed antitrust lawsuits against MasterCard and Visa and several issuing banks, including Capital One, seeking both injunctive relief and monetary damages for an alleged conspiracy by defendants to fix the level of interchange fees. Other merchants have asserted similar claims in separate lawsuits, and while these separate cases did not name any issuing banks, Visa, MasterCard and issuers, including Capital One, have entered settlement and judgment sharing agreements allocating the liabilities of any judgment or settlement arising from all interchange-related cases. The lawsuits were consolidated before the U.S. District Court for the Eastern District of New York for certain purposes and were settled in 2012. The class settlement, however, was invalidated by the United States Court of Appeals for the Second Circuit in June 2016, and the suit was bifurcated into separate class actions seeking injunctive and monetary relief, respectively. In addition, numerous merchant groups opted out of the 2012 settlement and have pursued their own claims. The claims by the injunctive relief class have not been resolved, but the settlement of $5.5 billion for the monetary damages class received final approval from the trial court, and has been appealed to the U.S. Court of Appeals for the Second Circuit. Visa and MasterCard have also settled a number of the opt-out cases, which required non-material payments from issuing banks, including Capital One. Visa created a litigation escrow account following its initial public offering of stock in 2008 that funds settlements for its member banks, and any settlements related to MasterCard-allocated losses have either already been paid or are reflected in our reserves. Mortgage Representation and Warranty We face residual exposure related to subsidiaries that originated residential mortgage loans and sold these loans to various purchasers, including purchasers who created securitization trusts. In connection with their sales of mortgage loans, these subsidiaries entered into agreements containing varying representations and warranties about, among other things, the ownership of the loan, the validity of the lien securing the loan, the loan’s compliance with any applicable criteria established by the purchaser, including underwriting guidelines and the existence of mortgage insurance, and the loan’s compliance with applicable federal, state and local laws. Each of these subsidiaries may be required to repurchase mortgage loans or indemnify certain purchasers and others against losses they incur in the event of certain breaches of these representations and warranties. The substantial majority of our representation and warranty exposure has been resolved through litigation, and our remaining representation and warranty exposure is almost entirely litigation-related. Accordingly, we establish litigation reserves for representation and warranty losses that we consider to be both probable and reasonably estimable. The reserve process relies heavily on estimates, which are inherently uncertain, and requires the application of judgment. Our reserves and estimates of reasonably possible losses could be impacted by claims which may be brought by securitization trustees and sponsors, bond-insurers, investors, and GSEs, as well as claims brought by governmental agencies. Anti-Money Laundering In October 2018, we paid a civil monetary penalty of $100 million to resolve the monetary component of a July 2015 Office of the Comptroller of the Currency (“OCC”) consent order relating to our anti-money laundering (“AML”) program. The OCC lifted the AML consent order in November 2019. The Department of Justice and the New York District Attorney’s Office have closed their investigations into certain former check casher clients of the Commercial Banking business and our AML program. We are in discussions with the Financial Crimes Enforcement Network (“FinCEN”) of the U.S. Department of Treasury to explore a potential regulatory resolution of its investigation into our AML program, which could include a monetary penalty. Cybersecurity Incident As a result of the Cybersecurity Incident announced on July 29, 2019, we are subject to numerous legal proceedings and other inquiries and could be the subject of additional proceedings and inquiries in the future. Consumer class actions. To date, we have been named as a defendant in approximately 73 putative consumer class action cases (61 in U.S. federal courts and 12 in Canadian courts) alleging harm from the Cybersecurity Incident and seeking various remedies, including monetary and injunctive relief. The lawsuits allege breach of contract, negligence, violations of various privacy laws and a variety of other legal causes of action. The U.S. consumer class actions have been consolidated for pretrial proceedings before a multi-district litigation (“MDL”) panel in the U.S. District Court for the Eastern District of Virginia, Alexandria Division. Securities class action. The Company and certain officers have also been named as defendants in a putative class action pending in the MDL alleging violations of certain federal securities laws in connection with statements and alleged omissions in securities filings relating to our information security standards and practices. The complaint seeks certification of a class of all persons who purchased or otherwise acquired Capital One securities from July 23, 2015 to July 29, 2019, as well as unspecified monetary damages, costs and other relief. Governmental inquiries. We have received inquiries and requests for information relating to the Cybersecurity Incident from Congress, federal banking regulators, relevant Canadian regulators, the Department of Justice, and the offices of approximately fourteen state Attorneys General. We are cooperating with these offices and responding to their inquiries. In August 2020, we entered into consent orders with the Federal Reserve Board of Governors and the OCC resulting from regulatory reviews of the Cybersecurity Incident and relating to ongoing enhancements of our cybersecurity and operational risk management processes. Capital One will pay a $80 million penalty to the U.S. Treasury as part of the OCC agreement, which has been fully accrued as of June 30, 2020. The Federal Reserve Board agreement does not contain a monetary penalty. Taxi Medallion Finance Investigations Beginning in 2019, we have received subpoenas from the New York Attorney General’s office and from the U.S. Attorney’s Office for the Southern District of New York, Civil and Criminal Divisions, relating to investigations of the taxi medallion finance industry we exited beginning in 2015. The subpoenas seek, among other things, information regarding our lending counterparties and practices. We are cooperating with these investigations. U.K. PPI Litigation Some of the claimants in the U.K. PPI regulatory claims process described above have initiated legal proceedings. The significant increase in PPI regulatory claim volumes shortly before the August 29, 2019 claims submission deadline increases the potential exposure for PPI-related litigation, which is not subject to the August 29, 2019 deadline. Other Pending and Threatened Litigation In addition, we are commonly subject to various pending and threatened legal actions relating to the conduct of our normal business activities. In the opinion of management, the ultimate aggregate liability, if any, arising out of all such other pending or threatened legal actions, is not expected to be material to our consolidated financial position or our results of operations.
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Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||
Basis of Presentation | The accompanying unaudited interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”). | ||||||||||||||||||||||||||||||
Use of Estimates | The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and in the related disclosures. These estimates are based on information available as of the date of the consolidated financial statements. While management makes its best judgments, actual amounts or results could differ from these estimates. In the opinion of management, all normal, recurring adjustments have been included for a fair statement of this interim financial information. Certain prior period amounts have been reclassified to conform to the current period presentation. | ||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Our effective tax rates in the second quarter and first six months of 2020 were computed utilizing the estimated annual effective tax rate method and were driven by the relationship of our tax credits in proportion to our pre-tax earnings. We changed our methodology from the year-to-date method utilized in the first quarter of 2020 due to passage of time as we recorded two quarters of actual results that reduced forecast variability for the remainder of the year.
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Investment Securities | Investment Securities We classify securities as available for sale or held to maturity based on our investment strategy and management’s assessment of our intent and ability to hold the securities until maturity. We did not have any securities that were classified as held to maturity as of June 30, 2020. We report securities available for sale on our consolidated balance sheets at fair value. The amortized cost of investment securities reflects the amount for which the security was acquired, adjusted for accrued interest, amortization of premiums, discounts, and net deferred fees and costs, collection of cash, and charge-offs. We elect to present accrued interest for securities available for sale within interest receivable on our consolidated balance sheets. Unrealized gains or losses are recorded, net of tax, as a component of accumulated other comprehensive income (“AOCI”). Unamortized premiums, discounts and other basis adjustments for available for sale securities are recognized in interest income over the contractual lives of the securities using the effective interest method. We record purchases and sales of investment securities available for sale on a trade date basis. Realized gains or losses from the sale of debt securities are computed using the first-in first-out method of identification, and are included in non-interest income in our consolidated statements of income. An individual debt security is impaired when the fair value of the security is less than its amortized cost. If we intend to sell an available for sale security in an unrealized loss position or it is more likely than not that we will be required to sell the security prior to recovery of its amortized cost basis, any allowance for credit losses is reversed through our provision for credit losses and the difference between the amortized cost basis of the security and its fair value is recognized in our consolidated statements of income. For impaired debt securities that we have both the intent and ability to hold, the securities are evaluated to determine if a credit loss exists. The allowance for credit losses on our investment securities is recognized through our provision for credit losses and limited by the unrealized losses of a security measured as the difference between the security’s amortized cost and fair value. See further discussion below under the “Allowance for Credit Losses - Available for Sale Investment Securities” section of this Note. Our investment portfolio also includes certain debt securities that, at the time of purchase, had experienced a more-than-insignificant deterioration in credit quality since origination. Such debt securities are accounted for in accordance with accounting guidance for purchased financial assets with credit deterioration and are herein referred to as purchased credit-deteriorated (“PCD”) securities. PCD securities require the recognition of an allowance for credit losses at the time of acquisition. The allowance for credit losses is not recognized in earnings. Instead, the purchase price and the initial allowance collectively represent the amortized cost basis of a PCD security. Any noncredit discount or premium at the date of acquisition is amortized into interest income over the remaining life of the security. Subsequent to the date of purchase, we re-measure the allowance for credit losses on the amortized cost basis using the same policies as for other debt securities available for sale and changes are recognized through our provision for credit losses. See further discussion below under the “Allowance for Credit Losses - Available for Sale Investment Securities” section of this Note. We charge off any portion of an investment security that we determine is uncollectible. The amortized cost basis, excluding accrued interest, is charged off through the allowance for credit losses. Accrued interest is charged off as a reduction to interest income. Recoveries of previously charged off principal amounts are recognized in our provision for credit losses when received.
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Loans | Loans Our loan portfolio consists of loans held for investment, including loans underlying our consolidated securitization trusts, and loans held for sale and is divided into three portfolio segments: credit card, consumer banking and commercial banking loans. Credit card loans consist of domestic and international credit card loans. Consumer banking loans consist of auto and retail banking loans. Commercial banking loans consist of commercial and multifamily real estate as well as commercial and industrial loans. Loan Classification Upon origination or purchase, we classify loans as held for investment or held for sale based on our investment strategy and management’s intent and ability with regard to the loans, which may change over time. The accounting and measurement framework for loans differs depending on the loan classification, whether we elect the fair value option, whether the loans are originated or purchased and whether purchased loans are considered to have experienced a more-than-insignificant deterioration in credit quality since origination. The presentation within the consolidated statements of cash flows is based on management’s intent at acquisition or origination. Cash flows related to loans that are acquired or originated with the intent to hold for investment are included in cash flows from investing activities on our consolidated statements of cash flows. Cash flows related to loans that are acquired or originated with the intent to sell are included in cash flows from operating activities on our consolidated statements of cash flows. Loans Held for Investment Loans that we have the ability and intent to hold for the foreseeable future and loans associated with consolidated securitization transactions are classified as held for investment. Loans classified as held for investment, except for credit card loans, are reported at their amortized cost basis, excluding accrued interest. For these loans, we elect to present accrued interest within interest receivable in our consolidated balance sheets. For credit card loans, billed finance charges and fees are included in loans held for investment. Unbilled finance charges and fees on credit card loans are included in interest receivable. Interest income is recognized on performing loans held for investment on an accrual basis. We defer loan origination fees and direct loan origination costs on originated loans, premiums and discounts on purchased loans and loan commitment fees. We recognize these amounts in interest income as yield adjustments over the life of the loan and/or commitment period using the effective interest method. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. The amortized cost of loans held for investment is subject to our allowance for credit losses methodology described below under the “Allowance for Credit Losses - Loans Held for Investment” section of this Note. Loans Held for Sale Loans purchased or originated with the intent to sell or for which we do not have the ability and intent to hold for the foreseeable future are classified as held for sale. Multifamily commercial real estate loans originated with the intent to sell to government-sponsored enterprises are accounted for under the fair value option. We elect the fair value option on these loans as part of our management of interest rate risk with corresponding forward sale commitments. Loan origination fees and direct loan origination costs are recognized as incurred and are reported in other non-interest income in the consolidated statements of income. Interest income is calculated based on the loan's stated rate of interest and is reported in interest income in the consolidated statements of income. Fair value adjustments are recorded in other non-interest income in the consolidated statements of income. All other loans classified as held for sale are recorded at the lower of cost or fair value. Loan origination fees, direct loan origination costs and any discounts and premiums are deferred until the loan is sold and are then recognized as part of the total gain or loss on sale. The fair value of loans held for sale is determined on an aggregate portfolio basis for each loan type. Fair value adjustments are recorded in other non-interest income in the consolidated statements of income. If a loan is transferred from held for investment to held for sale, then on the transfer date, any decline in fair value related to credit is recorded as a charge-off and any allowance for credit losses is reversed through our provision for credit losses. The loan is then reclassified to held for sale at its amortized cost at the date of the transfer. A valuation allowance is established, if needed, such that the loan held for sale is recorded at the lower of cost or fair value. Subsequent to transfer, we report write-downs or recoveries in fair value up to the carrying value at the date of transfer and realized gains or losses on loans held for sale in our consolidated statements of income as a component of other non-interest income. We calculate the gain or loss on loan sales as the difference between the proceeds received and the carrying value of the loans sold, net of the fair value of any residual interests retained. Loans Acquired All purchased loans, including loans transferred in a business combination, are initially recorded at fair value, which includes consideration of expected future losses, as of the date of the acquisition. To determine the fair value of loans at acquisition, we estimate discounted contractual cash flows due using an observable market rate of interest, when available, adjusted for factors that a market participant would consider in determining fair value. In determining fair value, contractual cash flows are adjusted to include prepayment estimates based upon historical payment trends, forecasted default rates and loss severities and other relevant factors. The difference between the fair value and the contractual cash flows is recorded as a loan premium or discount, which may relate to either credit or non-credit factors, at acquisition. We account for purchased loans under the accounting guidance for purchased financial assets with credit deterioration when, at the time of purchase, the loans have experienced a more-than-insignificant deterioration in credit quality since origination. We also account for loans under this guidance when the loans were previously accounted for under the accounting guidance for purchased credit impaired loans and debt securities (“PCI”) prior to our adoption of Accounting Standards Codification (“ASC”) 326, Financial Instruments-Credit Losses, on January 1, 2020. We refer to these loans which are accounted for under accounting guidance for purchased financial assets with more-than-insignificant deterioration in credit quality since origination as “PCD loans”. We recognize an allowance for credit losses on purchased loans that have not experienced a more-than-insignificant deterioration in credit quality since origination at the time of purchase through earnings in a manner that is consistent with originated loans. The policies relating to the allowance for credit losses on loans is described below in the “Allowance for Credit Losses - Loans Held for Investment” section of this Note. Loan Modifications and Restructurings As part of our loss mitigation efforts, we may provide modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for foreclosure or repossession of collateral, if any. Our loan modifications typically include short-term payment deferrals, an extension of the loan term, a reduction in the interest rate, a reduction in the loan balance, or a combination of these concessions. A loan modification in which a concession is granted to a borrower experiencing financial difficulty is accounted for and reported as a troubled debt restructuring (“TDR”). See “Note 3—Loans” for additional information on our loan modifications and restructurings, including those in response to the COVID-19 pandemic. Delinquent and Nonperforming Loans The entire balance of a loan is considered contractually delinquent if the minimum required payment is not received by the first statement cycle date equal to or following the due date specified on the customer’s billing statement. Delinquency is reported on loans that are 30 or more days past due. Interest and fees continue to accrue on past due loans until the date the loan is placed on nonaccrual status, if applicable. For loan modifications, delinquency and nonaccrual status are reported in accordance with the revised terms of the loans. We generally place loans on nonaccrual status when we believe the collectability of interest and principal is not reasonably assured. Nonperforming loans generally include loans that have been placed on nonaccrual status. We do not report loans classified as held for sale as nonperforming. Our policies for classifying loans as nonperforming, by loan category, are as follows: •Credit card loans: As permitted by regulatory guidance issued by the Federal Financial Institutions Examination Council (“FFIEC”), our policy is generally to exempt credit card loans from being classified as nonperforming, as these loans are generally charged off in the period the account becomes 180 days past due. Consistent with industry conventions, we generally continue to accrue interest and fees on delinquent credit card loans until the loans are charged off. •Consumer banking loans: We classify consumer banking loans as nonperforming when we determine that the collectability of all interest and principal on the loan is not reasonably assured, generally when the loan becomes 90 days past due. •Commercial banking loans: We classify commercial banking loans as nonperforming as of the date we determine that the collectability of all interest and principal on the loan is not reasonably assured. •Modified loans and troubled debt restructurings: Modified loans, including TDRs, that are current at the time of the restructuring remain on accrual status if there is demonstrated performance prior to the restructuring and continued performance under the modified terms is expected. Otherwise, the modified loan is classified as nonperforming. Interest and fees accrued but not collected at the date a loan is placed on nonaccrual status are reversed against earnings. In addition, the amortization of deferred loan fees, costs, premiums and discounts is suspended. Interest and fee income are subsequently recognized only upon the receipt of cash payments. However, if there is doubt regarding the ultimate collectability of loan principal, cash received is generally applied against the principal balance of the loan. Nonaccrual loans are generally returned to accrual status when all principal and interest is current and repayment of the remaining contractual principal and interest is reasonably assured, or when the loan is both well-secured and in the process of collection and collectability is no longer doubtful. Charge-Offs - Loans We charge off loans when we determine that the loan is uncollectible. The amortized cost basis, excluding accrued interest, is charged off as a reduction to the allowance for credit losses based on the time frames presented below. Accrued interest on loans other than credit card loans determined to be uncollectible is reversed as a reduction of interest income when the loan is classified as nonperforming. For credit card loans, accrued interest is charged off simultaneously with the charge off of other components of amortized cost and as a reduction of interest income. When received, recoveries of previously charged off amounts are recorded as an increase to the allowance for credit losses (see the “Allowance for Credit Losses - Loans Held for Investment” section of this Note for information on how we account for expected recoveries). Costs to recover charged off loans are recorded as collection expense and included in our consolidated statements of income as a component of other non-interest expense as incurred. Our charge-off time frames by loan type are presented below. •Credit card loans: We generally charge off credit card loans in the period the account becomes 180 days past due. We charge off delinquent credit card loans for which revolving privileges have been revoked as part of loan workout when the account becomes 120 days past due. Credit card loans in bankruptcy are generally charged off by the end of the month following 30 days after the receipt of a complete bankruptcy notification from the bankruptcy court. Credit card loans of deceased account holders are generally charged off 5 days after receipt of notification. •Consumer banking loans: We generally charge off consumer banking loans at the earlier of the date when the account is a specified number of days past due or upon repossession of the underlying collateral. Our charge-off period for auto loans is 120 days past due. Small business banking loans generally charge off at 120 days past due based on the date the amortized cost basis is deemed uncollectible. Auto loans that have not been previously charged off where the borrower has filed for bankruptcy and the loan has not been reaffirmed charge off in the period that the loan is 60 days from the bankruptcy notification date, regardless of delinquency status. Auto loans that have not been previously charged off and have been discharged under Chapter 7 bankruptcy are charged off at the end of the month in which the bankruptcy discharge occurs. Remaining consumer loans generally are charged off within 40 days of receipt of notification from the bankruptcy court. Consumer loans of deceased account holders are charged off by the end of the month following 60 days of receipt of notification. •Commercial banking loans: We charge off commercial loans in the period we determine that the amortized cost basis is uncollectible.
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Allowance for Loan and Lease Losses | Allowance for Credit Losses We maintain an allowance for credit losses (“allowance”) that represents management’s current estimate of expected credit losses over the contractual terms of our loans held for investment and investment securities classified as available for sale. We measure the allowance on a quarterly basis through consideration of past events, including historical experience, current conditions, and reasonable and supportable forecasts. Allowance for Credit Losses - Loans Held for Investment We measure current expected credit losses over the contractual terms of our loans. The contractual terms are adjusted for expected prepayments but are not extended for renewals or extensions, except when an extension or renewal arises from a borrower option that is not unconditionally cancellable or through a TDR that is reasonably expected to occur. We aggregate loans sharing similar risk characteristics into pools for purposes of measuring expected credit losses. Pools are reassessed periodically to confirm that all loans within each pool continue to share similar risk characteristics. Expected credit losses for loans that do not share similar risk characteristics with other financial assets are measured individually. Expected recoveries of amounts previously charged off or expected to be charged off are recognized within the allowance, with a corresponding reduction to our provision for credit losses. At times expected recoveries may result in a negative allowance. We limit the allowance to amounts previously charged off and expected to be charged off. Charge-offs of uncollectible amounts result in a reduction to the allowance and recoveries of previously charged off amounts result in an increase to the allowance. When developing an estimate of expected credit losses, we use both quantitative and qualitative methods in considering all available information relevant to assessing collectability. This may include internal information, external information, or a combination of both relating to past events, current conditions, and reasonable and supportable forecasts. Significant judgment is applied to the development and duration of reasonable and supportable forecasts used in our estimation of lifetime losses. We estimate expected credit losses over the duration of those forecasts and then revert, on a rational and systematic basis, to historical losses at each relevant loss component of the estimate. Expected losses for contractual terms extending beyond the reasonable and supportable forecast and reversion periods are based on those historical losses. Management will consider and may qualitatively adjust for conditions, changes, and trends in loan portfolios that may not be captured in modeled results. These adjustments are referred to as qualitative factors and represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Management’s judgment may involve an assessment of current and forward-looking conditions including but not limited to changes in lending policies and procedures, nature and volume of the portfolio, external factors, and uncertainty as it relates to economic, model or forecast risks, where not already captured in the modeled results. Expected credit losses for collateral-dependent loans are based on the fair value of the underlying collateral. When we intend to liquidate the collateral, the fair value of the collateral is adjusted for expected costs to sell. A loan is deemed to be a collateral-dependent loan when (i) we determine foreclosure or repossession of the underlying collateral is probable, or (ii) foreclosure or repossession is not probable, but the borrower is experiencing financial difficulty and we expect repayment to be provided substantially through the operation or sale of the collateral. The allowance for a collateral-dependent loan reflects the difference between the loan’s amortized cost basis and the fair value (less selling costs, where applicable) of the loan's underlying collateral. Our credit card and consumer banking loan portfolios consist of smaller-balance, homogeneous loans. The consumer banking loan portfolio is divided into two primary portfolio segments: auto loans and retail banking loans. The credit card and consumer banking loan portfolios are further divided by our business units into groups based on common risk characteristics, such as origination year, contract type, interest rate, credit bureau score and geography. The commercial banking loan portfolio is primarily composed of larger-balance, non-homogeneous loans. These loans are subject to reviews that result in internal risk ratings. In assessing the risk rating of a particular commercial banking loan, among the factors we consider are the financial condition of the borrower, geography, collateral performance, historical loss experience and industry-specific information that management believes is relevant in determining and measuring expected credit losses. Subjective assessment and interpretation are involved. Emphasizing one factor over another or considering additional factors could impact the risk rating assigned to that commercial banking loan. For consumer banking and commercial banking loans, the contractual period typically does not include renewals or extensions because the renewals and extensions are generally not at the borrower’s exclusive option to exercise. Management has determined that the undrawn credit exposure that is associated with our credit card loans is unconditionally cancellable. For this reason, expected credit losses are measured based on the drawn balance at each quarterly measurement date, but not on the undrawn exposure. Because credit card loans do not have a defined contractual life, management estimates both the volume and application of payments to determine a contractual life of the drawn balance at the measurement date over which expected credit losses are developed for credit card loans. With the exception of credit card loans, we have made a policy election to not measure an allowance on accrued interest for loans held for investment because we reverse uncollectible accrued interest in a timely manner. See the “Delinquent and Nonperforming Loans” and “Charge-Offs - Loans” sections of this Note for information on what we consider timely. For credit card loans, we do not make this election, as we reserve for uncollectible accrued interest relating to credit card loans in the allowance. The allowance related to credit card and consumer banking loans assessed on a pooled basis is based on a modeled calculation, which is supplemented by management judgment as described above. Because of the homogeneous nature of our consumer loan portfolios, the allowance is based on the aggregated portfolio segment evaluations. The allowance is established through a process that begins with estimates of historical losses in each pool based upon various statistical analyses, with adjustments for current conditions and reasonable and supportable forecasts of conditions, which includes expected economic conditions. Loss forecast models are utilized to estimate expected credit losses and consider several portfolio indicators including, but not limited to, expected economic conditions, historical loss experience, account seasoning, the value of collateral underlying secured loans, estimated foreclosures or defaults based on observable trends, delinquencies, bankruptcy filings, unemployment, credit bureau scores and general business trends. Management believes these factors are relevant in estimating expected credit losses and also considers an evaluation of overall portfolio credit quality based on indicators such as changes in our credit evaluation, underwriting and collection management policies, the effect of other external factors such as competition and legal and regulatory requirements, general economic conditions and business trends, and uncertainties in forecasting and modeling techniques used in estimating our allowance. The allowance related to commercial banking loans assessed on a pooled basis is based on our historical loss experience for loans with similar risk characteristics and consideration of the current credit quality of the portfolio, which is supplemented by management judgment as described above. These are adjusted for current conditions, and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels. We apply internal risk ratings to commercial banking loans, which we use to assess credit quality and derive a total loss estimate based on an estimated probability of default (“default rate”) and loss given default (“loss severity”). Management may also apply judgment to adjust the loss factors derived, taking into consideration both quantitative and qualitative factors, including general economic conditions, industry-specific and geographic trends, portfolio concentrations, trends in internal credit quality indicators, and current and past underwriting standards that have occurred but are not yet reflected in the historical data underlying our loss estimates. The allowance related to smaller-balance homogeneous credit card and consumer banking loans whose terms have been modified in a TDR is calculated on a pool basis using historical loss experience, adjusted for current conditions and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels for the respective class of assets. The allowance related to consumer banking loans that are assessed at a loan-level is determined based on key considerations that include the borrower’s overall financial condition, resources and payment history, prospects for support from financially responsible guarantors, and when applicable, the estimated realizable value of any collateral. The allowance related to commercial banking loans that are assessed at a loan-level is generally determined in accordance with our policy for estimating expected credit losses for collateral-dependent loans as described above. Off-balance sheet credit exposures In addition to the allowance, we also measure expected credit losses related to unfunded lending commitments that are not unconditionally cancellable in our Commercial Banking business. This reserve is measured using the same measurement objectives as the allowance for loans held for investment and is recorded within other liabilities on our consolidated balance sheets. These commitments are segregated by risk according to our internal risk rating scale, which we use to assess credit quality and derive an expected credit loss estimate. We assess these risk classifications, taking into consideration both quantitative and qualitative factors, including historical loss experience, adjusted for current conditions and reasonable and supportable forecasts of conditions likely to cause future losses which vary from historical levels, and utilization assumptions to estimate the reserve for unfunded lending commitments. Expected credit losses are not measured on unfunded lending commitments that are unconditionally cancellable, including all of our unfunded credit card and consumer banking lending commitments and certain of our unfunded commercial banking lending commitments. Determining the appropriateness of the allowance and the reserve for unfunded lending commitments is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the reserve for unfunded lending commitments in future periods. See “Note 4—Allowance for Credit Losses and Reserve for Unfunded Lending Commitments” for additional information. Allowance for Credit Losses - Available for Sale Investment Securities When an investment security available for sale is impaired due to credit factors, we recognize a provision for credit losses on our consolidated statements of income and an allowance for credit losses on the consolidated balance sheet. Credit losses recognized in the allowance for credit losses are limited to the amount by which the investment security’s amortized cost basis exceeds its fair value. Investment securities in unrealized gain positions do not have an allowance for credit losses as the investment security could be sold at its fair value to prevent realization of credit losses. We exclude accrued interest from the fair value and amortized cost basis of an investment security for purposes of measuring impairment. Charge-offs of uncollectible amounts of investment securities are deducted from the allowance for credit losses. For certain of our securities available for sale, we have determined that there is no risk of impairment due to credit factors. These investment securities include high quality debt instruments that are issued and guaranteed by the United States government and its agencies or are issued through certain government-sponsored enterprises. Management performs periodic assessments to reevaluate this conclusion by considering any changes in historical losses, current conditions, and reasonable and supportable forecasts. We evaluate impairment on a quarterly basis at the individual security level and determine whether any portion of the decline in fair value is due to a credit loss. We make this determination through the use of quantitative and qualitative analyses. Our qualitative analysis includes factors such as the extent to which fair value is less than amortized cost, any changes in the security’s credit rating, past defaults or delayed payments, and adverse conditions impacting the security or issuer. A credit loss exists to the extent that management does not expect to recover the amortized cost basis. For investment securities which require further assessment, we perform a quantitative analysis using a discounted cash flow methodology and compare the present value of expected future cash flows from the security available for sale to the security’s amortized cost basis. Projected future cash flows reflect management’s best estimate and is based on our understanding of past events, current conditions, reasonable and supportable forecasts, and are discounted by the security’s effective interest rate adjusted for expected prepayments. The allowance for credit losses for investment securities reflects the difference by which the amortized cost basis exceeds the present value of future cash flows and is limited to the amount by which the security’s amortized cost exceeds its fair value. See “Note 2—Investment Securities” for additional information.
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Revenue Recognition | Revenue Recognition Interest Income and Fees Interest income and fees on loans and investment securities are recognized based on the contractual provisions of the underlying arrangements. Loan origination fees and costs and premiums and discounts on loans held for investment are deferred and generally amortized into interest income as yield adjustments over the contractual life and/or commitment period using the effective interest method. Costs deferred include direct origination costs such as bounties paid to third parties for new accounts and incentives paid to our network of auto dealers for loan referrals. In certain circumstances, we elect to factor prepayment estimates into the calculation of the constant effective yield necessary to apply the interest method. Prepayment estimates are based on historical prepayment data, existing and forecasted interest rates, and economic data. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. Unamortized premiums, discounts and other basis adjustments on investment securities are recognized in interest income over the contractual lives of the securities using the effective interest method. Finance charges and fees on credit card loans are recorded in revenue when earned. Billed finance charges and fees on credit card loans are included in loan receivables. Unbilled finance charges and fees on credit card loans are included in interest receivable on our consolidated balance sheets. Annual membership fees are classified as service charges and other customer-related fees on our consolidated statements of income and are deferred and amortized into income over 12 months on a straight-line basis. We continue to accrue finance charges and fees on credit card loans until the account is charged off.
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Offsetting of Financial Assets and Liabilities | Balance Sheet Offsetting of Financial Assets and Liabilities Derivative contracts and repurchase agreements that we execute bilaterally in the OTC market are generally governed by enforceable master netting arrangements where we generally have the right to offset exposure with the same counterparty. Either counterparty can generally request to net settle all contracts through a single payment upon default on, or termination of, any one contract. We elect to offset the derivative assets and liabilities under master netting arrangements for balance sheet presentation where a right of setoff exists. For derivative contracts entered into under master netting arrangements for which we have not been able to confirm the enforceability of the setoff rights, or those not subject to master netting arrangements, we do not offset our derivative positions for balance sheet presentation.
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New Accounting Standards | Newly Adopted Accounting Standards During the Six Months Ended June 30, 2020
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Available-for-Sale Securities | The table below presents the amortized cost, gross unrealized gains and losses, and fair value of securities available for sale as of June 30, 2020 and December 31, 2019. Accrued interest receivable of $233 million as of June 30, 2020 is not included in the below table. Table 2.1: Investment Securities Available for Sale
(1) Includes primarily supranational bonds, foreign government bonds and other asset-backed securities.
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Schedule of Available-for-Sale Securities in Gross Unrealized Loss Position | The table below provides the gross unrealized losses and fair value of our securities available for sale aggregated by major security type and the length of time that individual securities have been in a continuous unrealized loss position as of June 30, 2020 and December 31, 2019. The amounts as of June 30, 2020 only include securities available for sale without an allowance for credit losses. Table 2.2: Securities in a Gross Unrealized Loss Position
(2) Consists of approximately 350 securities in gross unrealized loss positions as of June 30, 2020.
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Schedule of Contractual Maturities for Securities | The table below summarizes, by major security type, the contractual maturities and weighted-average yields of our investment securities as of June 30, 2020. Because borrowers may have the right to call or prepay certain obligations, the expected maturities of our securities are likely to differ from the scheduled contractual maturities presented below. The weighted-average yield below represents the effective yield for the investment securities and is calculated based on the amortized cost of each security. Table 2.3: Contractual Maturities and Weighted-Average Yields of Securities
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Loans (Tables) |
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Loan Portfolio Composition and Aging Analysis | The table below presents the composition and aging analysis of our loans held for investment portfolio as of June 30, 2020 and December 31, 2019. The delinquency aging includes all past due loans, both performing and nonperforming. Table 3.1: Loan Portfolio Composition and Aging Analysis
(1) Loans include unamortized premiums and discounts, and unamortized deferred fees and costs totaling $1.1 billion as of both June 30, 2020 and December 31, 2019.
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90 Plus Day Delinquent Loans Accruing Interest and Nonperforming Loans | The following table presents our loans held for investment that are 90 days or more past due that continue to accrue interest and loans that are classified as nonperforming as of June 30, 2020 and December 31, 2019. We also present nonperforming loans without an allowance as of June 30, 2020. Nonperforming loans generally include loans that have been placed on nonaccrual status. Table 3.2: 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans
(1) We recognized interest income for loans classified as nonperforming of $5 million and $11 million for the three and six months ended June 30, 2020, respectively.
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Loans and Leases Receivable Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
TDR Disclosures in Progress Financial Impact of Modification | The following tables present the major modification types, recorded investment amounts and financial effects of loans modified in TDRs during the three and six months ended June 30, 2020 and 2019. Table 3.6: Troubled Debt Restructurings
(2) Due to multiple concessions granted to some troubled borrowers, percentages may total more than 100% for certain loan types. 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 3.7: TDRs—Subsequent Defaults
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Credit Card | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator | The table below presents our credit card portfolio by delinquency status as of June 30, 2020. Table 3.3: Credit Card Delinquency Status
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Consumer Banking | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator | The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of June 30, 2020 and December 31, 2019. We present our auto loan portfolio by FICO scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming. Table 3.4: Consumer Banking Portfolio by Credit Quality Indicator
(2) Includes the Paycheck Protection Program (“PPP”) loans of $931 million as of June 30, 2020.
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Commercial Banking | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Quality Indicator | The following table presents our commercial banking portfolio of loans held for investment by internal risk ratings as of June 30, 2020 and December 31, 2019. The internal risk rating status includes all past due loans, both performing and nonperforming. Table 3.5: Commercial Banking Portfolio by Internal Risk Ratings
(2) Includes PPP loans of $231 million as of June 30, 2020.
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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses on Financing Receivables | The table below summarizes changes in the allowance for credit losses and reserve for unfunded lending commitments by portfolio segment for the three and six months ended June 30, 2020 and 2019. The allowance balance as of June 30, 2020 reflects the cumulative effects from adoption of the CECL standard and the change to include finance charge and fee reserve in the allowance for credit losses. The reserve for unfunded lending commitments balance as of June 30, 2020 also reflects the cumulative effects from adoption of the CECL standard, including the component of loss sharing agreements with the GSEs on multifamily commercial real estate loans that are within the scope of the CECL standard. When developing an estimate of expected credit losses, we use both quantitative and qualitative methods in considering all available information relevant to assessing collectability. Management will consider and may make adjustments for qualitative factors, which represent management’s judgment of the imprecision and risks inherent in the processes and assumptions used in establishing the allowance for credit losses. Our allowance for credit losses increased by $9.6 billion to $16.8 billion as of June 30, 2020 from December 31, 2019, primarily driven by the allowance build from expectations of economic worsening and uncertainty as a result of the COVID-19 pandemic as well as the adoption of the CECL standard. Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
(3) Concurrent with our adoption of the CECL standard in the first quarter of 2020, we reclassified our finance charge and fee reserve to our allowance for credit losses, with a corresponding increase to credit card loans held for investment.
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Schedule of Loss Sharing Arrangement Impact | The table below summarizes the changes in the estimated reimbursements from these partners for the three and six months ended June 30, 2020 and 2019. Table 4.2: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
(1) Includes effects from adoption of the CECL standard in the first quarter of 2020.
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Variable Interest Entities and Securitizations (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Variable Interest Entities and Securitization [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount of Assets and Liabilities of Variable Interest Entities | The tables below present a summary of VIEs in which we had continuing involvement or held a variable interest, aggregated based on VIEs with similar characteristics as of June 30, 2020 and December 31, 2019. We separately present information for consolidated and unconsolidated VIEs. Table 5.1: Carrying Amount of Consolidated and Unconsolidated VIEs
(2) In certain investment structures, we consolidate a VIE which in turn holds as its primary asset an investment in an unconsolidated VIE. In these instances, we disclose the carrying amount of assets and liabilities on our consolidated balance sheets as unconsolidated VIEs to avoid duplicating our exposure, as the unconsolidated VIEs are generally the operating entities generating the exposure. The carrying amount of assets and liabilities included in the unconsolidated VIE columns above related to these investment structures were $2.3 billion of assets and $652 million of liabilities as of June 30, 2020, and $2.3 billion of assets and $741 million of liabilities as of December 31, 2019.
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External Debt and Receivable Balances of Securitization Programs | The table below presents our continuing involvement in certain securitization-related VIEs as of June 30, 2020 and December 31, 2019. Table 5.2: Continuing Involvement in Securitization-Related VIEs
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Goodwill and Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Goodwill, Intangible Assets and MSRs | The table below presents our goodwill, intangible assets and MSRs as of June 30, 2020 and December 31, 2019. Goodwill is presented separately, while intangible assets and MSRs are included in other assets on our consolidated balance sheets. Table 6.1: Components of Goodwill, Intangible Assets and MSRs
(2) Commercial MSRs are accounted for under the amortization method on our consolidated balance sheets.
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Goodwill Attributable to Business Segments | The following table presents changes in the carrying amount of goodwill by each of our business segments as of June 30, 2020 and December 31, 2019. Table 6.2: Goodwill by Business Segments
(1) Represents foreign currency translation adjustments and measurement period adjustments on prior period acquisitions.
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Deposits and Borrowings (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Deposits and Borrowings [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Deposits, Short-Term Borrowings and Long-Term Debt | The following tables summarize the components of our deposits, short-term borrowings and long-term debt as of June 30, 2020 and December 31, 2019. The carrying value presented below for these borrowings includes unamortized debt premiums and discounts, net of debt issuance costs and fair value hedge accounting adjustments. Table 7.1: Components of Deposits, Short-Term Borrowings and Long-Term Debt
(2) Includes $1.4 billion of EUR-denominated unsecured notes as of both June 30, 2020 and December 31, 2019.
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Derivative Instruments and Hedging Activities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Assets and Liabilities at Fair Value | The following table summarizes the notional amounts and fair values of our derivative instruments as of June 30, 2020 and December 31, 2019, which are segregated by derivatives that are designated as accounting hedges and those that are not, and are further segregated by type of contract within those two categories. The total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and any associated cash collateral received or pledged. Derivative assets and liabilities are included in other assets and other liabilities, respectively, on our consolidated balance sheets, and their related gains or losses are included in operating activities as changes in other assets and other liabilities in the consolidated statements of cash flows. Table 8.1: Derivative Assets and Liabilities at Fair Value
(3) Represents balance sheet netting of derivative assets and liabilities, and related payables and receivables for cash collateral held or placed with the same counterparty.
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Hedged Item in Fair Value Hedging Relationship | The following table summarizes the carrying value of our hedged assets and liabilities in fair value hedges and the associated cumulative basis adjustments included in those carrying values, excluding basis adjustments related to foreign currency risk, as of June 30, 2020 and December 31, 2019. Table 8.2: Hedged Items in Fair Value Hedging Relationships
(2) Carrying value represents amortized cost.
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Offsetting Assets | The following table presents the gross and net fair values of our derivative assets, derivative liabilities, resale and repurchase agreements and the related offsetting amounts permitted under U.S. GAAP as of June 30, 2020 and December 31, 2019. The table also includes cash and non-cash collateral received or pledged in accordance with such arrangements. The amount of collateral presented, however, is limited to the amount of the related net derivative fair values or outstanding balances; therefore, instances of over-collateralization are excluded. Table 8.3: Offsetting of Financial Assets and Financial Liabilities
(2) Under our customer repurchase agreements, which mature the next business day, we pledged collateral with a fair value of $584 million and $320 million as of June 30, 2020 and December 31, 2019, respectively, primarily consisting of agency RMBS securities.
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Offsetting Liabilities | The following table presents the gross and net fair values of our derivative assets, derivative liabilities, resale and repurchase agreements and the related offsetting amounts permitted under U.S. GAAP as of June 30, 2020 and December 31, 2019. The table also includes cash and non-cash collateral received or pledged in accordance with such arrangements. The amount of collateral presented, however, is limited to the amount of the related net derivative fair values or outstanding balances; therefore, instances of over-collateralization are excluded. Table 8.3: Offsetting of Financial Assets and Financial Liabilities
(2) Under our customer repurchase agreements, which mature the next business day, we pledged collateral with a fair value of $584 million and $320 million as of June 30, 2020 and December 31, 2019, respectively, primarily consisting of agency RMBS securities.
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Effects of Fair Value and Cash Flow Hedge Accounting | The net gains (losses) recognized in our consolidated statements of income related to derivatives in fair value and cash flow hedging relationships are presented below for the three and six months ended June 30, 2020 and 2019. Table 8.4: Effects of Fair Value and Cash Flow Hedge Accounting
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Gains (Losses) on Free-Standing Derivatives | The net impacts to our consolidated statements of income related to free-standing derivatives are presented below for the three and six months ended June 30, 2020 and 2019. These gains or losses are recognized in other non-interest income in our consolidated statements of income. Table 8.5: Gains (Losses) on Free-Standing Derivatives
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Stockholders' Equity (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Preferred Stock | The following table summarizes our preferred stock outstanding as of June 30, 2020 and December 31, 2019. Table 9.1: Preferred Stock Outstanding(1)
(2) On March 2, 2020, we redeemed all outstanding shares of our preferred stock Series B.
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Change in AOCI Gain (Loss) by Component (Net of Tax) | The following table includes the AOCI impacts from the adoption of the CECL standard and the changes in AOCI by component for the three and six months ended June 30, 2020 and 2019. Table 9.2: Accumulated Other Comprehensive Income (Loss)
(2) Includes other comprehensive loss of $8 million and gain of $134 million for the three and six months ended June 30, 2020, respectively, and other comprehensive gains of $53 million and $19 million for the three and six months ended June 30, 2019, respectively, from hedging instruments designated as net investment hedges.
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Reclassifications from AOCI | The following table presents amounts reclassified from each component of AOCI to our consolidated statements of income for the three and six months ended June 30, 2020 and 2019. Table 9.3: Reclassifications from AOCI
(1) On December 31, 2019, we transferred our entire portfolio of held to maturity securities to available for sale.
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Components of Other Comprehensive Income (Loss) and Related Tax Impact | The table below summarizes other comprehensive income activity and the related tax impact for the three and six months ended June 30, 2020 and 2019. Table 9.4: Other Comprehensive Income
(1) Includes the impact of hedging instruments designated as net investment hedges.
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Earnings Per Common Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Common Share | The following table sets forth the computation of basic and diluted earnings per common share. Table 10.1: Computation of Basic and Diluted Earnings per Common Share
(1) In periods of net loss, dilutive securities are excluded as their inclusion would have an anti-dilutive effect. Accordingly, awards of 362 thousand shares and options of 2.6 million shares with an exercise price ranging from $45.75 to $86.34 and awards of 956 thousand shares and options of 2.7 million shares with an exercise price ranging from $36.55 to $86.34 were excluded for the three and six months ended June 30, 2020, respectively. For the three months ended June 30, 2019, no shares were excluded from the computation of diluted earnings per share. For the six months ended June 30, 2019, 137 thousand shares related to options with an exercise price of $86.34 were excluded from the computation of diluted earnings per share, because their inclusion would be anti-dilutive.
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Fair Value Measurement (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table displays our assets and liabilities measured on our consolidated balance sheets at fair value on a recurring basis as of June 30, 2020 and December 31, 2019. Table 11.1: Assets and Liabilities Measured at Fair Value on a Recurring Basis
(3) As of June 30, 2020 and December 31, 2019, other includes retained interests in securitizations of $56 million and $66 million, deferred compensation plan assets of $347 million and $343 million, and equity securities of $1 million, respectively.
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Schedule of Level 3 Inputs Reconciliation | The table below presents a reconciliation for all assets and liabilities measured and recognized at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2020 and 2019. Generally, transfers into Level 3 were primarily driven by the usage of unobservable assumptions in the pricing of these financial instruments as evidenced by wider pricing variations among pricing vendors and transfers out of Level 3 were primarily driven by the usage of assumptions corroborated by market observable information as evidenced by tighter pricing among multiple pricing sources. Table 11.2: Level 3 Recurring Fair Value Rollforward
(4) Includes derivative assets and liabilities of $151 million and $117 million, respectively, as of June 30, 2020, $70 million and $64 million, respectively, as of June 30, 2019.
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Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis Quantitative Information | The following table presents the significant unobservable inputs used to determine the fair values of our Level 3 financial instruments on a recurring basis. We utilize multiple vendor pricing services to obtain fair value for our securities. Several of our vendor pricing services are only able to provide unobservable input information for a limited number of securities due to software licensing restrictions. Other vendor pricing services are able to provide unobservable input information for all securities for which they provide a valuation. As a result, the unobservable input information for the securities available for sale presented below represents a composite summary of all information we are able to obtain. The unobservable input information for all other Level 3 financial instruments is based on the assumptions used in our internal valuation models. Table 11.3: Quantitative Information about Level 3 Fair Value Measurements
(2) Due to the nature of the various mortgage securitization structures in which we have retained interests, it is not meaningful to present a consolidated weighted average for the significant unobservable inputs.
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Schedule of Assets Measured at Fair Value on Nonrecurring Basis | The following table presents the carrying value of the assets measured at fair value on a nonrecurring basis and still held as of June 30, 2020 and December 31, 2019, and for which a nonrecurring fair value measurement was recorded during the six and twelve months then ended. Table 11.4: Nonrecurring Fair Value Measurements
(1) As of June 30, 2020, other assets included equity investments accounted for under the measurement alternative of $28 million, repossessed assets of $23 million and long-lived assets held for sale of $1 million. As of December 31, 2019, other assets included equity investments accounted for under the measurement alternative of $5 million, repossessed assets of $61 million and long-lived assets held for sale of $37 million.
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Schedule of Earnings Related to Assets Measured at Fair Value on Nonrecurring Basis | The following table presents total nonrecurring fair value measurements for the period, included in earnings, attributable to the change in fair value relating to assets that are still held at June 30, 2020 and 2019. Table 11.5: Nonrecurring Fair Value Measurements Included in Earnings
(1) Other assets include fair value adjustments related to repossessed assets, long-lived assets held for sale and equity investments accounted for under the measurement alternative.
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Schedule of Fair Value of Financial Instruments | The following table presents the carrying value and estimated fair value, including the level within the fair value hierarchy, of our financial instruments that are not measured at fair value on a recurring basis on our consolidated balance sheets as of June 30, 2020 and December 31, 2019. Table 11.6: Fair Value of Financial Instruments
(2) Other borrowings excludes finance lease liabilities.
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Business Segments and Revenue from Contracts with Customers (Tables) |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Results and Reconciliation | The following table presents our business segment results for the three and six months ended June 30, 2020 and 2019, selected balance sheet data as of June 30, 2020 and 2019, and a reconciliation of our total business segment results to our reported consolidated income from continuing operations, loans held for investment and deposits. Table 12.1: Segment Results and Reconciliation
(2) Total net revenue was reduced by $318 million and $707 million in the three and six months ended June 30, 2020, respectively, for credit card finance charges and fees charged off as uncollectible.
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Disaggregation of Revenue | The following table presents revenue from contracts with customers and a reconciliation to non-interest income by business segment for the three and six months ended June 30, 2020 and 2019. Table 12.2: Revenue from Contracts with Customers and Reconciliation to Segments Result
(2) Interchange fees are presented net of customer reward expenses.
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Commitments, Contingencies, Guarantees, and Others (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Letter of Credit and Other Loan Commitments | The following table presents the contractual amount and carrying value of our unfunded lending commitments as of June 30, 2020 and December 31, 2019. The carrying value represents our reserve and deferred revenue on legally binding commitments. Table 13.1: Unfunded Lending Commitments
(2) These financial guarantees have expiration dates ranging from 2020 to 2023 as of June 30, 2020.
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Summary of Significant Accounting Policies - Segments (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020
Segment
| |
Accounting Policies [Abstract] | |
Number of operating segments | 3 |
Summary of Significant Accounting Policies - Loans and Allowance for Credit Losses (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for delinquency status of financing receivables | 30 days |
Credit Card | |
Loans and Leases Receivable Disclosure [Line Items] | |
Loan origination fees and direct loan origination costs amortization period | 12 months |
Threshold period past due for write-off of trade accounts receivable | 180 days |
Credit Card | Privileges Revoked | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for write-off of trade accounts receivable | 120 days |
Credit Card | Notification of Death | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for write-off of trade accounts receivable | 5 days |
Credit Card | Chapter Seven Bankruptcy | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for write-off of trade accounts receivable | 30 days |
Consumer Banking | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for nonperforming status of financing receivables | 90 days |
Consumer Banking | Notification of Death | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for nonperforming status of financing receivables | 60 days |
Consumer Banking | Chapter Seven Bankruptcy | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for nonperforming status of financing receivables | 60 days |
Consumer Banking | Auto | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for nonperforming status of financing receivables | 120 days |
Consumer Banking | Small Business Banking Loans | Maximum | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period past due for nonperforming status of financing receivables | 120 days |
Consumer Banking | Other Consumer Loans | |
Loans and Leases Receivable Disclosure [Line Items] | |
Threshold period following bankruptcy notice for write-off of financing receivable | 40 days |
Summary of Significant Accounting Policies - Revenue Recognition (Details) - Credit Card |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Loans and Leases Receivable Disclosure [Line Items] | |
Loan Commitment and Origination Fees and Discounts or Premiums, Amortization Period | 12 months |
Amortization term of annual membership fees | 12 months |
Summary of Significant Accounting Policies Newly Adopted Accounting Standards (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jan. 01, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit loss | $ 16,832 | $ 7,208 | |||||
Retained earnings | 35,361 | 40,340 | |||||
Accounting Standards Update 2016-13 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Deferred tax assets | $ 694 | ||||||
Retained earnings | 2,200 | ||||||
Cumulative effects from adoption of the CECL standard | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Retained earnings | 11 | ||||||
Allowance for credit losses | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit loss | $ 16,832 | $ 14,073 | 7,208 | $ 7,133 | $ 7,313 | $ 7,220 | |
Finance charge and fee reserve reclassification | 462 | ||||||
Allowance for credit losses | Accounting Standards Update 2016-13 | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit loss | $ 2,900 | ||||||
Allowance for credit losses | Cumulative effects from adoption of the CECL standard | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit loss | $ 2,845 |
Investment Securities - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jan. 01, 2020 |
|
Debt Securities, Available-for-sale [Line Items] | |||||||
Accrued interest receivable | $ 233 | ||||||
Proceeds from sales | $ 0 | $ 909 | 144 | $ 3,983 | |||
Debt Securities, Available-for-sale, Gain (Loss) | $ 15 | 1 | $ 39 | ||||
Derivative, collateral, obligation to return securities | $ 1 | $ 1 | 1 | 1 | |||
Increase in retained earnings | 35,361 | 40,340 | 35,361 | 35,361 | |||
Decrease in AOCI | $ (3,981) | $ (1,156) | (3,981) | (3,981) | |||
Investment securities portfolio | US Treasury and Agency securities | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Percentage of portfolio | 97.00% | 96.00% | |||||
Collateral pledged | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Debt securities, available-for-sale, restricted | $ 12,600 | $ 14,000 | $ 12,600 | $ 12,600 | |||
Cumulative effects from adoption of the CECL standard | |||||||
Debt Securities, Available-for-sale [Line Items] | |||||||
Increase in retained earnings | $ 11 | ||||||
Decrease in AOCI | $ 11 |
Investment Securities - Investment Available for Sale (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 84,742 | $ 77,984 |
Allowance for Credit Losses | (3) | |
Gross Unrealized Gains | 3,211 | 1,561 |
Gross Unrealized Losses | (91) | (332) |
Fair Value | 87,859 | 79,213 |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 4,353 | 4,122 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 12 | 6 |
Gross Unrealized Losses | (3) | (4) |
Fair Value | 4,362 | 4,124 |
RMBS, Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 68,223 | 62,003 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 2,541 | 1,120 |
Gross Unrealized Losses | (77) | (284) |
Fair Value | 70,687 | 62,839 |
RMBS, Non-agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,144 | 1,235 |
Allowance for Credit Losses | (3) | |
Gross Unrealized Gains | 187 | 266 |
Gross Unrealized Losses | (1) | (2) |
Fair Value | 1,327 | 1,499 |
RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 69,367 | 63,238 |
Allowance for Credit Losses | (3) | |
Gross Unrealized Gains | 2,728 | 1,386 |
Gross Unrealized Losses | (78) | (286) |
Fair Value | 72,014 | 64,338 |
CMBS, Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 9,940 | 9,303 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 469 | 165 |
Gross Unrealized Losses | (9) | (42) |
Fair Value | 10,400 | 9,426 |
Other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,082 | 1,321 |
Allowance for Credit Losses | 0 | |
Gross Unrealized Gains | 2 | 4 |
Gross Unrealized Losses | (1) | 0 |
Fair Value | $ 1,083 | $ 1,325 |
Investment Securities - Securities in Gross Unrealized Loss Position (Detail) $ in Millions |
Jun. 30, 2020
USD ($)
Security
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | $ 6,879 | $ 15,882 |
Fair Value - 12 Months or Longer | 3,941 | 12,252 |
Fair Value - Total | 10,820 | 28,134 |
Gross Unrealized Loss - Less than 12 Months | (37) | (120) |
Gross Unrealized Loss - 12 Months or Longer | (53) | (212) |
Gross Unrealized Loss - Total | $ (90) | (332) |
Number of securities in gross unrealized loss positions | Security | 350 | |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | $ 2,812 | 2,647 |
Fair Value - 12 Months or Longer | 0 | 0 |
Fair Value - Total | 2,812 | 2,647 |
Gross Unrealized Loss - Less than 12 Months | (3) | (4) |
Gross Unrealized Loss - 12 Months or Longer | 0 | 0 |
Gross Unrealized Loss - Total | (3) | (4) |
RMBS, Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | 2,732 | 10,494 |
Fair Value - 12 Months or Longer | 3,210 | 10,567 |
Fair Value - Total | 5,942 | 21,061 |
Gross Unrealized Loss - Less than 12 Months | (30) | (92) |
Gross Unrealized Loss - 12 Months or Longer | (47) | (192) |
Gross Unrealized Loss - Total | (77) | (284) |
RMBS, Non-agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | 14 | 35 |
Fair Value - 12 Months or Longer | 2 | 16 |
Fair Value - Total | 16 | 51 |
Gross Unrealized Loss - Less than 12 Months | 0 | (1) |
Gross Unrealized Loss - 12 Months or Longer | 0 | (1) |
Gross Unrealized Loss - Total | 0 | (2) |
RMBS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | 2,746 | 10,529 |
Fair Value - 12 Months or Longer | 3,212 | 10,583 |
Fair Value - Total | 5,958 | 21,112 |
Gross Unrealized Loss - Less than 12 Months | (30) | (93) |
Gross Unrealized Loss - 12 Months or Longer | (47) | (193) |
Gross Unrealized Loss - Total | (77) | (286) |
CMBS, Agency | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | 644 | 2,580 |
Fair Value - 12 Months or Longer | 724 | 1,563 |
Fair Value - Total | 1,368 | 4,143 |
Gross Unrealized Loss - Less than 12 Months | (3) | (23) |
Gross Unrealized Loss - 12 Months or Longer | (6) | (19) |
Gross Unrealized Loss - Total | (9) | (42) |
Other securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Fair Value - Less than 12 Months | 677 | 126 |
Fair Value - 12 Months or Longer | 5 | 106 |
Fair Value - Total | 682 | 232 |
Gross Unrealized Loss - Less than 12 Months | (1) | 0 |
Gross Unrealized Loss - 12 Months or Longer | 0 | 0 |
Gross Unrealized Loss - Total | $ (1) | $ 0 |
Investment Securities - Contractual Maturities and Weighted-Average Yields of Securities (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Securities available for sale | ||
Due in 1 year or less | $ 271 | |
Due after 1 year through 5 years | 7,528 | |
Due after 5 years through 10 years | 5,509 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 74,551 | |
Securities available for sale | 87,859 | $ 79,213 |
Amortized cost of securities available for sale | ||
Due in 1 year or less | 270 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after One Through Five Years, Amortized Cost | 7,486 | |
Due after 5 years through 10 years | 5,271 | |
Due 10 Years | 71,715 | |
Amortized Cost | $ 84,742 | 77,984 |
Weighted average yield for securities available for sale | ||
Due in 1 Year or Less | 1.15% | |
Due 1 Year through 5 Years | 1.52% | |
Due 5 Years through 10 Years | 2.38% | |
Due 10 Years | 2.61% | |
Total weighted average yield | 2.49% | |
U.S. Treasury securities | ||
Securities available for sale | ||
Due in 1 year or less | $ 0 | |
Due after 1 year through 5 years | 4,362 | |
Due after 5 years through 10 years | 0 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 0 | |
Securities available for sale | 4,362 | 4,124 |
Amortized cost of securities available for sale | ||
Amortized Cost | 4,353 | 4,122 |
RMBS, Agency | ||
Securities available for sale | ||
Due in 1 year or less | 0 | |
Due after 1 year through 5 years | 82 | |
Due after 5 years through 10 years | 963 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 69,642 | |
Securities available for sale | 70,687 | 62,839 |
Amortized cost of securities available for sale | ||
Amortized Cost | 68,223 | 62,003 |
RMBS, Non-agency | ||
Securities available for sale | ||
Due in 1 year or less | 0 | |
Due after 1 year through 5 years | 0 | |
Due after 5 years through 10 years | 0 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 1,327 | |
Securities available for sale | 1,327 | 1,499 |
Amortized cost of securities available for sale | ||
Amortized Cost | 1,144 | 1,235 |
RMBS | ||
Securities available for sale | ||
Due in 1 year or less | 0 | |
Due after 1 year through 5 years | 82 | |
Due after 5 years through 10 years | 963 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 70,969 | |
Securities available for sale | 72,014 | 64,338 |
Amortized cost of securities available for sale | ||
Amortized Cost | $ 69,367 | 63,238 |
Weighted average yield for securities available for sale | ||
Weighted-average expected life | 3 years 7 months 6 days | |
CMBS, Agency | ||
Securities available for sale | ||
Due in 1 year or less | $ 6 | |
Due after 1 year through 5 years | 2,550 | |
Due after 5 years through 10 years | 4,262 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 3,582 | |
Securities available for sale | 10,400 | 9,426 |
Amortized cost of securities available for sale | ||
Amortized Cost | $ 9,940 | 9,303 |
Weighted average yield for securities available for sale | ||
Weighted-average expected life | 5 years | |
Other securities | ||
Securities available for sale | ||
Due in 1 year or less | $ 265 | |
Due after 1 year through 5 years | 534 | |
Due after 5 years through 10 years | 284 | |
Debt Securities, Available-for-sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value | 0 | |
Securities available for sale | 1,083 | 1,325 |
Amortized cost of securities available for sale | ||
Amortized Cost | $ 1,082 | $ 1,321 |
Loans - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Loans and Leases Receivable Disclosure [Line Items] | |||
Accrued interest receivable | $ 1,300 | $ 1,300 | |
TDRs | 1,800 | 1,800 | $ 1,700 |
Commitments to lend on loans modified in TDRs | 145 | 145 | 178 |
Loans held for sale | 711 | 711 | 400 |
Federal Home Loan banks | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Loans Pledged as Collateral | 15,700 | 15,700 | 14,600 |
Line of Credit Facility, Remaining Borrowing Capacity | 17,900 | 17,900 | 18,700 |
Federal Reserve Discount Window | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Loans Pledged as Collateral | 28,200 | 28,200 | 6,700 |
Line of Credit Facility, Remaining Borrowing Capacity | 22,200 | 22,200 | 5,300 |
Credit Card and Consumer Banking | Performing | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
TDRs | 1,200 | 1,200 | 1,100 |
Commercial Banking | Performing | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
TDRs | 349 | 349 | $ 224 |
Domestic credit card: | Credit Card | |||
Loans and Leases Receivable Disclosure [Line Items] | |||
Revolving loans converted to term during period | $ 89 | $ 249 |
Loans - Loan Portfolio Composition and Aging Analysis (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | $ 245,722 | $ 255,736 |
Past due | 5,790 | 9,947 |
Total Loans | $ 251,512 | $ 265,809 |
Financing Receivable, Recorded Investment, Aging, Percent of Total Loan [Abstract] | ||
Current, percentage of total loans | 97.70% | 96.20% |
Past due, percentage of total loans | 2.30% | 3.70% |
Percentage of total loans | 100.00% | 100.00% |
Unamortized premiums and discounts, deferred fees and costs | $ 1,100 | $ 1,100 |
Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 104,355 | 123,134 |
Past due | 2,955 | 5,009 |
Total Loans | 107,310 | 128,236 |
Consumer Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 64,389 | 58,436 |
Past due | 2,323 | 4,627 |
Total Loans | 66,712 | 63,065 |
Consumer Banking | Auto | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 61,043 | 55,778 |
Past due | 2,276 | 4,584 |
Total Loans | 63,319 | 60,362 |
Consumer Banking | Retail banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 3,346 | 2,658 |
Past due | 47 | 43 |
Total Loans | 3,393 | 2,703 |
Commercial Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 76,978 | 74,166 |
Past due | 512 | 311 |
Total Loans | 77,490 | 74,508 |
Commercial Banking | Commercial and multifamily real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 30,667 | 30,157 |
Past due | 286 | 67 |
Total Loans | 30,953 | 30,245 |
Commercial Banking | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 46,311 | 44,009 |
Past due | 226 | 244 |
Total Loans | 46,537 | 44,263 |
PCI Loans | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 126 | |
Financing Receivable, Recorded Investment, Aging, Percent of Total Loan [Abstract] | ||
Percentage of total loans | 0.10% | |
PCI Loans | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 93 | |
PCI Loans | Consumer Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 2 | |
PCI Loans | Consumer Banking | Auto | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 0 | |
PCI Loans | Consumer Banking | Retail banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 2 | |
PCI Loans | Commercial Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Loans | 31 | |
PCI Loans | Commercial Banking | Total commercial lending | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 31 | |
PCI Loans | Commercial Banking | Commercial and multifamily real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 21 | |
Total Loans | 21 | |
PCI Loans | Commercial Banking | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 10 | |
Total Loans | 10 | |
30-59 days | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 2,532 | $ 4,444 |
Financing Receivable, Recorded Investment, Aging, Percent of Total Loan [Abstract] | ||
Past due, percentage of total loans | 1.00% | 1.60% |
30-59 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 744 | $ 1,474 |
30-59 days | Consumer Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 1,537 | 2,852 |
30-59 days | Consumer Banking | Auto | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 1,517 | 2,828 |
30-59 days | Consumer Banking | Retail banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 20 | 24 |
Total Loans | 20 | |
30-59 days | Commercial Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 251 | 118 |
30-59 days | Commercial Banking | Commercial and multifamily real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 137 | 43 |
30-59 days | Commercial Banking | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 114 | 75 |
60-89 days | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 1,342 | $ 2,537 |
Financing Receivable, Recorded Investment, Aging, Percent of Total Loan [Abstract] | ||
Past due, percentage of total loans | 0.50% | 1.00% |
60-89 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 608 | $ 1,122 |
60-89 days | Consumer Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 593 | 1,369 |
60-89 days | Consumer Banking | Auto | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 582 | 1,361 |
60-89 days | Consumer Banking | Retail banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 11 | 8 |
Total Loans | 11 | |
60-89 days | Commercial Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 141 | 46 |
60-89 days | Commercial Banking | Commercial and multifamily real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 118 | 20 |
60-89 days | Commercial Banking | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 23 | 26 |
Greater than 90 days | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 1,916 | $ 2,966 |
Financing Receivable, Recorded Investment, Aging, Percent of Total Loan [Abstract] | ||
Past due, percentage of total loans | 0.80% | 1.10% |
Greater than 90 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | $ 1,603 | $ 2,413 |
Greater than 90 days | Consumer Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 193 | 406 |
Greater than 90 days | Consumer Banking | Auto | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 177 | 395 |
Greater than 90 days | Consumer Banking | Retail banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 16 | 11 |
Total Loans | 16 | |
Greater than 90 days | Commercial Banking | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 120 | 147 |
Greater than 90 days | Commercial Banking | Commercial and multifamily real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 31 | 4 |
Greater than 90 days | Commercial Banking | Commercial and industrial | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 89 | 143 |
Domestic credit card: | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 96,666 | 113,857 |
Past due | 2,724 | 4,656 |
Total Loans | 99,390 | 118,606 |
Domestic credit card: | PCI Loans | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 93 | |
Domestic credit card: | 30-59 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 668 | 1,341 |
Total Loans | 668 | |
Domestic credit card: | 60-89 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 554 | 1,038 |
Total Loans | 554 | |
Domestic credit card: | Greater than 90 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 1,502 | 2,277 |
Total Loans | 1,502 | |
International card businesses: | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 7,689 | 9,277 |
Past due | 231 | 353 |
Total Loans | 7,920 | 9,630 |
International card businesses: | PCI Loans | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 0 | |
International card businesses: | 30-59 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 76 | 133 |
Total Loans | 76 | |
International card businesses: | 60-89 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 54 | 84 |
Total Loans | 54 | |
International card businesses: | Greater than 90 days | Credit Card | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Past due | 101 | $ 136 |
Total Loans | $ 101 |
Loans - 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | $ 1,610 | $ 1,610 | $ 2,407 |
Nonperforming Loans | 967 | 967 | $ 983 |
Nonperforming Loans Without an Allowance | $ 324 | $ 324 | |
Percentage, 90 Days Past Due and Accruing | 0.60% | 0.60% | 0.90% |
Percentage, Nonperforming Loans | 0.40% | 0.40% | 0.40% |
Percentage, Nonperforming Loans Without an Allowance | 0.10% | 0.10% | |
Interest income for loans classified as nonperforming | $ 5 | $ 11 | |
Credit Card | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 1,596 | 1,596 | $ 2,407 |
Nonperforming Loans | 23 | 23 | 25 |
Nonperforming Loans Without an Allowance | 0 | 0 | |
Credit Card | Domestic credit card: | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 1,502 | 1,502 | 2,277 |
Nonperforming Loans Without an Allowance | 0 | 0 | |
Credit Card | International card businesses: | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 94 | 94 | 130 |
Nonperforming Loans | 23 | 23 | 25 |
Nonperforming Loans Without an Allowance | 0 | 0 | |
Consumer Banking | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 0 | 0 | 0 |
Nonperforming Loans | 284 | 284 | 510 |
Nonperforming Loans Without an Allowance | 2 | 2 | |
Consumer Banking | Auto | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 0 | 0 | 0 |
Nonperforming Loans | 260 | 260 | 487 |
Nonperforming Loans Without an Allowance | 0 | 0 | |
Consumer Banking | Retail banking | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 0 | 0 | 0 |
Nonperforming Loans | 24 | 24 | 23 |
Nonperforming Loans Without an Allowance | 2 | 2 | |
Commercial Banking | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 14 | 14 | 0 |
Nonperforming Loans | 660 | 660 | 448 |
Nonperforming Loans Without an Allowance | 322 | 322 | |
Commercial Banking | Commercial and multifamily real estate | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 14 | 14 | 0 |
Nonperforming Loans | 167 | 167 | 38 |
Nonperforming Loans Without an Allowance | 162 | 162 | |
Commercial Banking | Commercial and industrial | |||
Financing Receivable, Past Due [Line Items] | |||
90 Days Past Due and Accruing | 0 | 0 | 0 |
Nonperforming Loans | 493 | 493 | $ 410 |
Nonperforming Loans Without an Allowance | $ 160 | $ 160 |
Loans - Credit Card Delinquency Status (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 251,512 | $ 265,809 |
Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 106,465 | |
Revolving Loans Converted to Term | 845 | |
Total Loans | 107,310 | 128,236 |
Domestic credit card: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 98,644 | |
Revolving Loans Converted to Term | 746 | |
Total Loans | 99,390 | 118,606 |
International card businesses: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 7,821 | |
Revolving Loans Converted to Term | 99 | |
Total Loans | 7,920 | $ 9,630 |
Current | Domestic credit card: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 96,000 | |
Revolving Loans Converted to Term | 666 | |
Total Loans | 96,666 | |
Current | International card businesses: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 7,625 | |
Revolving Loans Converted to Term | 64 | |
Total Loans | 7,689 | |
30-59 days | Domestic credit card: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 637 | |
Revolving Loans Converted to Term | 31 | |
Total Loans | 668 | |
30-59 days | International card businesses: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 66 | |
Revolving Loans Converted to Term | 10 | |
Total Loans | 76 | |
60-89 days | Domestic credit card: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 532 | |
Revolving Loans Converted to Term | 22 | |
Total Loans | 554 | |
60-89 days | International card businesses: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 43 | |
Revolving Loans Converted to Term | 11 | |
Total Loans | 54 | |
Greater than 90 days | Domestic credit card: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 1,475 | |
Revolving Loans Converted to Term | 27 | |
Total Loans | 1,502 | |
Greater than 90 days | International card businesses: | Credit Card | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Revolving Loans | 87 | |
Revolving Loans Converted to Term | 14 | |
Total Loans | $ 101 |
Loans Loans - Consumer Banking Portfolio by Credit Quality Indicator (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total Loans | $ 251,512 | $ 265,809 |
Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 16,338 | |
2019 | 22,241 | |
2018 | 13,038 | |
2017 | 8,360 | |
2016 | 4,076 | |
Prior | 1,855 | |
Total Term Loans | 65,908 | |
Revolving Loans | 795 | |
Revolving Loans Converted to Term | 9 | |
Total Loans | 66,712 | 63,065 |
Total Loans, Excluding PCI Loans | 63,063 | |
Auto | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 15,306 | |
2019 | 22,004 | |
2018 | 12,797 | |
2017 | 8,112 | |
2016 | 3,872 | |
Prior | 1,228 | |
Total Term Loans | 63,319 | |
Revolving Loans | 0 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 63,319 | 60,362 |
Total Loans, Excluding PCI Loans | 60,362 | |
Retail banking | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,032 | |
2019 | 237 | |
2018 | 241 | |
2017 | 248 | |
2016 | 204 | |
Prior | 627 | |
Total Term Loans | 2,589 | |
Revolving Loans | 795 | |
Revolving Loans Converted to Term | 9 | |
Total Loans | 3,393 | 2,703 |
Total Loans, Excluding PCI Loans | 2,701 | |
Loans under Paycheck Protection Program | 931 | |
Current | Retail banking | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 1,032 | |
2019 | 237 | |
2018 | 236 | |
2017 | 243 | |
2016 | 202 | |
Prior | 619 | |
Total Term Loans | 2,569 | |
Revolving Loans | 768 | |
Revolving Loans Converted to Term | 9 | |
Total Loans | 3,346 | |
Total Loans, Excluding PCI Loans | 2,658 | |
30-59 days | Retail banking | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 1 | |
2016 | 0 | |
Prior | 4 | |
Total Term Loans | 5 | |
Revolving Loans | 15 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 20 | |
Total Loans, Excluding PCI Loans | 24 | |
60-89 days | Retail banking | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 5 | |
2017 | 1 | |
2016 | 0 | |
Prior | 1 | |
Total Term Loans | 7 | |
Revolving Loans | 4 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 11 | |
Total Loans, Excluding PCI Loans | 8 | |
Greater than 90 days | Retail banking | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 3 | |
2016 | 2 | |
Prior | 3 | |
Total Term Loans | 8 | |
Revolving Loans | 8 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 16 | |
Total Loans, Excluding PCI Loans | 11 | |
Greater than 660 | Auto | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 6,968 | |
2019 | 10,018 | |
2018 | 6,099 | |
2017 | 3,931 | |
2016 | 1,879 | |
Prior | 519 | |
Total Term Loans | 29,414 | |
Revolving Loans | 0 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 29,414 | |
Total Loans, Excluding PCI Loans | 28,773 | |
621-660 | Auto | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 3,028 | |
2019 | 4,436 | |
2018 | 2,549 | |
2017 | 1,569 | |
2016 | 721 | |
Prior | 233 | |
Total Term Loans | 12,536 | |
Revolving Loans | 0 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 12,536 | |
Total Loans, Excluding PCI Loans | 11,924 | |
620 or below | Auto | Consumer Banking | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 5,310 | |
2019 | 7,550 | |
2018 | 4,149 | |
2017 | 2,612 | |
2016 | 1,272 | |
Prior | 476 | |
Total Term Loans | 21,369 | |
Revolving Loans | 0 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | $ 21,369 | |
Total Loans, Excluding PCI Loans | $ 19,665 |
Loans - Commercial Banking: Risk Profile by Internal Risk Rating (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 251,512 | $ 265,809 |
Commercial Banking | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 7,615 | |
2019 | 16,642 | |
2018 | 9,302 | |
2017 | 5,720 | |
2016 | 4,557 | |
Prior | 11,229 | |
Total Term Loans | 55,065 | |
Revolving Loans | 22,352 | |
Revolving Loans Converted to Term | 73 | |
Total Loans | 77,490 | $ 74,508 |
Internal Risk, Percentage | 100.00% | |
Loans under Paycheck Protection Program | 231 | |
Commercial Banking | PCI loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 31 | |
Internal Risk, Percentage | 0.00% | |
Commercial Banking | Noncriticized | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 71,848 | |
Internal Risk, Percentage | 96.50% | |
Commercial Banking | Criticized | Criticized performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 2,181 | |
Internal Risk, Percentage | 2.90% | |
Commercial Banking | Criticized | Criticized nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 448 | |
Internal Risk, Percentage | 0.60% | |
Commercial Banking | Commercial and multifamily real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 2,535 | |
2019 | 5,664 | |
2018 | 3,960 | |
2017 | 2,211 | |
2016 | 2,437 | |
Prior | 7,213 | |
Total Term Loans | 24,020 | |
Revolving Loans | 6,933 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 30,953 | $ 30,245 |
Internal Risk, Percentage | 100.00% | |
Commercial Banking | Commercial and multifamily real estate | PCI loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 21 | |
Internal Risk, Percentage | 0.10% | |
Commercial Banking | Commercial and multifamily real estate | Noncriticized | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 2,466 | |
2019 | 5,490 | |
2018 | 3,587 | |
2017 | 2,000 | |
2016 | 2,217 | |
Prior | 6,635 | |
Total Term Loans | 22,395 | |
Revolving Loans | 6,878 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 29,273 | $ 29,625 |
Internal Risk, Percentage | 97.90% | |
Commercial Banking | Commercial and multifamily real estate | Criticized | Criticized performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 69 | |
2019 | 163 | |
2018 | 343 | |
2017 | 211 | |
2016 | 216 | |
Prior | 456 | |
Total Term Loans | 1,458 | |
Revolving Loans | 55 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 1,513 | $ 561 |
Internal Risk, Percentage | 1.90% | |
Commercial Banking | Commercial and multifamily real estate | Criticized | Criticized nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 0 | |
2019 | 11 | |
2018 | 30 | |
2017 | 0 | |
2016 | 4 | |
Prior | 122 | |
Total Term Loans | 167 | |
Revolving Loans | 0 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 167 | $ 38 |
Internal Risk, Percentage | 0.10% | |
Commercial Banking | Commercial and industrial | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 5,080 | |
2019 | 10,978 | |
2018 | 5,342 | |
2017 | 3,509 | |
2016 | 2,120 | |
Prior | 4,016 | |
Total Term Loans | 31,045 | |
Revolving Loans | 15,419 | |
Revolving Loans Converted to Term | 73 | |
Total Loans | 46,537 | $ 44,263 |
Internal Risk, Percentage | 100.00% | |
Commercial Banking | Commercial and industrial | PCI loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Loans | $ 10 | |
Internal Risk, Percentage | 0.00% | |
Commercial Banking | Commercial and industrial | Noncriticized | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 4,879 | |
2019 | 10,234 | |
2018 | 4,758 | |
2017 | 3,078 | |
2016 | 1,998 | |
Prior | 3,814 | |
Total Term Loans | 28,761 | |
Revolving Loans | 12,774 | |
Revolving Loans Converted to Term | 73 | |
Total Loans | 41,608 | $ 42,223 |
Internal Risk, Percentage | 95.40% | |
Commercial Banking | Commercial and industrial | Criticized | Criticized performing | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 169 | |
2019 | 668 | |
2018 | 524 | |
2017 | 371 | |
2016 | 114 | |
Prior | 202 | |
Total Term Loans | 2,048 | |
Revolving Loans | 2,388 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | 4,436 | $ 1,620 |
Internal Risk, Percentage | 3.70% | |
Commercial Banking | Commercial and industrial | Criticized | Criticized nonperforming | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
2020 | 32 | |
2019 | 76 | |
2018 | 60 | |
2017 | 60 | |
2016 | 8 | |
Prior | 0 | |
Total Term Loans | 236 | |
Revolving Loans | 257 | |
Revolving Loans Converted to Term | 0 | |
Total Loans | $ 493 | $ 410 |
Internal Risk, Percentage | 0.90% |
Loans - Trouble Debt Restructurings (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | $ 412 | $ 186 | $ 704 | $ 459 |
Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 84 | 114 | 224 | 259 |
Consumer Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 138 | 57 | 264 | 130 |
Consumer Banking | Auto | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 137 | 52 | 260 | 124 |
Consumer Banking | Retail banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 1 | 5 | 4 | 6 |
Commercial Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 190 | 15 | 216 | 70 |
Commercial Banking | Total commercial lending | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 14 | 69 | ||
Commercial Banking | Commercial and multifamily real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | 9 | 28 | 34 | |
Commercial Banking | Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | $ 181 | 14 | $ 188 | 35 |
Commercial Banking | Small-ticket commercial real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | $ 1 | $ 1 | ||
Reduced Interest Rate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 22.00% | 75.00% | 36.00% | 75.00% |
Average Rate Reduction | 17.96% | 17.45% | 17.90% | 15.78% |
Reduced Interest Rate | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 100.00% | 100.00% | 100.00% | 100.00% |
Average Rate Reduction | 19.14% | 20.32% | 19.94% | 20.17% |
Reduced Interest Rate | Consumer Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 5.00% | 42.00% | 12.00% | 39.00% |
Average Rate Reduction | 4.19% | 3.93% | 3.55% | 3.90% |
Reduced Interest Rate | Consumer Banking | Auto | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 5.00% | 46.00% | 12.00% | 41.00% |
Average Rate Reduction | 4.12% | 3.78% | 3.51% | 3.81% |
Reduced Interest Rate | Consumer Banking | Retail banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 10.00% | 9.00% | 4.00% | 10.00% |
Average Rate Reduction | 8.37% | 10.55% | 11.42% | 10.91% |
Reduced Interest Rate | Commercial Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 0.00% | 49.00% |
Average Rate Reduction | 0.00% | 0.00% | 0.00% | 0.00% |
Reduced Interest Rate | Commercial Banking | Total commercial lending | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 49.00% | ||
Average Rate Reduction | 0.00% | 0.00% | ||
Reduced Interest Rate | Commercial Banking | Commercial and multifamily real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 100.00% | |
Average Rate Reduction | 0.00% | 0.00% | 0.00% | |
Reduced Interest Rate | Commercial Banking | Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 0.00% | 0.00% |
Average Rate Reduction | 0.00% | 0.00% | 0.00% | 0.00% |
Reduced Interest Rate | Commercial Banking | Small-ticket commercial real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Average Rate Reduction | 0.00% | 0.00% | ||
Term Extension | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 57.00% | 34.00% | 52.00% | 28.00% |
Average Term Extension (Months) | 5 months | 7 months | 5 months | 6 months |
Term Extension | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 0.00% | 0.00% |
Average Term Extension (Months) | 0 months | 0 months | 0 months | 0 months |
Term Extension | Consumer Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 95.00% | 86.00% | 93.00% | 89.00% |
Average Term Extension (Months) | 3 months | 8 months | 4 months | 7 months |
Term Extension | Consumer Banking | Auto | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 95.00% | 89.00% | 95.00% | 90.00% |
Average Term Extension (Months) | 3 months | 8 months | 4 months | 7 months |
Term Extension | Consumer Banking | Retail banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 59.00% | 57.00% | 15.00% | 61.00% |
Average Term Extension (Months) | 4 months | 3 months | 4 months | 3 months |
Term Extension | Commercial Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 55.00% | 98.00% | 57.00% | 20.00% |
Average Term Extension (Months) | 8 months | 3 months | 9 months | 0 months |
Term Extension | Commercial Banking | Total commercial lending | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 100.00% | 20.00% | ||
Average Term Extension (Months) | 3 months | 1 month | ||
Term Extension | Commercial Banking | Commercial and multifamily real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 100.00% | 100.00% | 0.00% | |
Average Term Extension (Months) | 7 months | 10 months | 0 months | |
Term Extension | Commercial Banking | Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 52.00% | 100.00% | 50.00% | 40.00% |
Average Term Extension (Months) | 8 months | 3 months | 8 months | 1 month |
Term Extension | Commercial Banking | Small-ticket commercial real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Average Term Extension (Months) | 0 months | 0 months | ||
Principal Forgiveness | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 4.00% | 2.00% | ||
Gross Balance Reduction | $ 7 | $ 7 | ||
Principal Forgiveness | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
Principal Forgiveness | Consumer Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
Principal Forgiveness | Consumer Banking | Auto | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
Principal Forgiveness | Consumer Banking | Retail banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
Principal Forgiveness | Commercial Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 8.00% | 7.00% | ||
Gross Balance Reduction | $ 7 | $ 7 | ||
Principal Forgiveness | Commercial Banking | Commercial and multifamily real estate | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
Principal Forgiveness | Commercial Banking | Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 9.00% | 8.00% | ||
Gross Balance Reduction | $ 7 | $ 7 | ||
Domestic credit card: | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | $ 56 | $ 74 | $ 145 | $ 172 |
Domestic credit card: | Reduced Interest Rate | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 100.00% | 100.00% | 100.00% | 100.00% |
Average Rate Reduction | 15.41% | 16.60% | 16.05% | 16.50% |
Domestic credit card: | Term Extension | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 0.00% | 0.00% |
Average Term Extension (Months) | 0 months | 0 months | 0 months | 0 months |
Domestic credit card: | Principal Forgiveness | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 | ||
International card businesses: | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Total Loans Modified | $ 28 | $ 40 | $ 79 | $ 87 |
International card businesses: | Reduced Interest Rate | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 100.00% | 100.00% | 100.00% | 100.00% |
Average Rate Reduction | 26.56% | 27.25% | 27.05% | 27.44% |
International card businesses: | Term Extension | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | 0.00% | 0.00% |
Average Term Extension (Months) | 0 months | 0 months | 0 months | 0 months |
International card businesses: | Principal Forgiveness | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
% of TDR Activity | 0.00% | 0.00% | ||
Gross Balance Reduction | $ 0 | $ 0 |
Loans - TDR - Subsequent Defaults (Detail) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020
USD ($)
Contract
|
Jun. 30, 2019
USD ($)
Contract
|
Jun. 30, 2020
USD ($)
Contract
|
Jun. 30, 2019
USD ($)
Contract
|
|
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 27,954 | 31,082 | 57,979 | 62,928 |
Total Loans | $ | $ 78 | $ 71 | $ 170 | $ 141 |
Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 27,090 | 29,766 | 55,833 | 60,499 |
Total Loans | $ | $ 46 | $ 54 | $ 94 | $ 111 |
Consumer Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 863 | 1,316 | 2,139 | 2,429 |
Total Loans | $ | $ 11 | $ 17 | $ 27 | $ 30 |
Consumer Banking | Auto | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 860 | 1,312 | 2,135 | 2,417 |
Total Loans | $ | $ 11 | $ 16 | $ 27 | $ 29 |
Consumer Banking | Retail banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 3 | 4 | 4 | 12 |
Total Loans | $ | $ 0 | $ 1 | $ 0 | $ 1 |
Commercial Banking | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 1 | 0 | 7 | 0 |
Total Loans | $ | $ 21 | $ 0 | $ 49 | $ 0 |
Commercial Banking | Commercial and industrial | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 1 | 0 | 7 | 0 |
Total Loans | $ | $ 21 | $ 0 | $ 49 | $ 0 |
Domestic credit card: | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 9,582 | 11,581 | 20,468 | 25,608 |
Total Loans | $ | $ 21 | $ 26 | $ 43 | $ 55 |
International card businesses: | Credit Card | ||||
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||||
Number of Contracts | Contract | 17,508 | 18,185 | 35,365 | 34,891 |
Total Loans | $ | $ 25 | $ 28 | $ 51 | $ 56 |
Allowance for Credit Losses and Reserve for Unfunded Lending Commitments - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | |||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Dec. 31, 2018 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Allowance for credit loss | $ 16,832 | $ 7,208 | ||||
Allowance for credit losses | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Increase (Decrease) in Allowance for Credit Loss | 9,600 | |||||
Allowance for credit loss | $ 16,832 | $ 14,073 | $ 7,208 | $ 7,133 | $ 7,313 | $ 7,220 |
Allowance for Credit Losses and Reserve for Unfunded Lending Commitments - Allowance for Loan and Lease Losses and Reserve for Unfunded Lending Commitments Activity (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | $ 7,208 | |||
Provision for credit losses | $ 4,246 | $ 1,342 | 9,669 | $ 3,035 |
Balance at the end of the period | 16,832 | 16,832 | ||
Allowance for credit losses | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 14,073 | 7,313 | 7,208 | 7,220 |
Charge-offs | (2,131) | (2,157) | (4,588) | (4,430) |
Recoveries | 626 | 649 | 1,292 | 1,323 |
Net charge-offs | (1,505) | (1,508) | (3,296) | (3,107) |
Provision for credit losses | 4,252 | 1,329 | 9,619 | 3,013 |
Allowance build (release) for credit losses | 2,747 | (179) | 6,323 | (94) |
Other changes | 12 | (1) | (6) | 7 |
Balance at the end of the period | 16,832 | 7,133 | 16,832 | 7,133 |
Allowance for credit losses | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 2,845 | |||
Allowance for credit losses | Finance charge and fee reserve reclassification | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 462 | |||
Allowance for credit losses | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 10,515 | |||
Reserve for unfunded lending commitments | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 223 | 131 | 135 | 122 |
Provision for credit losses | (5) | 13 | 46 | 22 |
Balance at the end of the period | 218 | 144 | 218 | 144 |
Reserve for unfunded lending commitments | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 37 | |||
Reserve for unfunded lending commitments | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 172 | |||
Combined allowance and reserve | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the end of the period | 17,050 | 7,277 | 17,050 | 7,277 |
Credit Card | Allowance for credit losses | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 10,346 | 5,568 | 5,395 | 5,535 |
Charge-offs | (1,612) | (1,711) | (3,461) | (3,493) |
Recoveries | 401 | 391 | 814 | 809 |
Net charge-offs | (1,211) | (1,320) | (2,647) | (2,684) |
Provision for credit losses | 2,944 | 1,095 | 6,646 | 2,484 |
Allowance build (release) for credit losses | 1,733 | (225) | 3,999 | (200) |
Other changes | 12 | (1) | (6) | 7 |
Balance at the end of the period | 12,091 | 5,342 | 12,091 | 5,342 |
Credit Card | Allowance for credit losses | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 2,241 | |||
Credit Card | Allowance for credit losses | Finance charge and fee reserve reclassification | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 462 | |||
Credit Card | Allowance for credit losses | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 8,098 | |||
Credit Card | Reserve for unfunded lending commitments | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | 0 | 0 | 0 |
Provision for credit losses | 0 | 0 | 0 | 0 |
Balance at the end of the period | 0 | 0 | 0 | 0 |
Credit Card | Reserve for unfunded lending commitments | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Credit Card | Reserve for unfunded lending commitments | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Credit Card | Combined allowance and reserve | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the end of the period | 12,091 | 5,342 | 12,091 | 5,342 |
Consumer Banking | Allowance for credit losses | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 2,154 | 1,062 | 1,038 | 1,048 |
Charge-offs | (416) | (423) | (912) | (894) |
Recoveries | 224 | 251 | 474 | 501 |
Net charge-offs | (192) | (172) | (438) | (393) |
Provision for credit losses | 876 | 165 | 1,736 | 400 |
Allowance build (release) for credit losses | 684 | (7) | 1,298 | 7 |
Other changes | 0 | 0 | 0 | 0 |
Balance at the end of the period | 2,838 | 1,055 | 2,838 | 1,055 |
Consumer Banking | Allowance for credit losses | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 502 | |||
Consumer Banking | Allowance for credit losses | Finance charge and fee reserve reclassification | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Consumer Banking | Allowance for credit losses | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 1,540 | |||
Consumer Banking | Reserve for unfunded lending commitments | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | 4 | 5 | 4 |
Provision for credit losses | 0 | 0 | 0 | 0 |
Balance at the end of the period | 0 | 4 | 0 | 4 |
Consumer Banking | Reserve for unfunded lending commitments | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | (5) | |||
Consumer Banking | Reserve for unfunded lending commitments | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Consumer Banking | Combined allowance and reserve | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the end of the period | 2,838 | 1,059 | 2,838 | 1,059 |
Commercial Banking | Allowance for credit losses | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 1,573 | 683 | 775 | 637 |
Charge-offs | (103) | (23) | (215) | (43) |
Recoveries | 1 | 7 | 4 | 13 |
Net charge-offs | (102) | (16) | (211) | (30) |
Provision for credit losses | 432 | 69 | 1,237 | 129 |
Allowance build (release) for credit losses | 330 | 53 | 1,026 | 99 |
Other changes | 0 | 0 | 0 | 0 |
Balance at the end of the period | 1,903 | 736 | 1,903 | 736 |
Commercial Banking | Allowance for credit losses | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 102 | |||
Commercial Banking | Allowance for credit losses | Finance charge and fee reserve reclassification | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 0 | |||
Commercial Banking | Allowance for credit losses | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 877 | |||
Commercial Banking | Reserve for unfunded lending commitments | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 223 | 127 | 130 | 118 |
Provision for credit losses | (5) | 13 | 46 | 22 |
Balance at the end of the period | 218 | 140 | 218 | 140 |
Commercial Banking | Reserve for unfunded lending commitments | Cumulative effects from adoption of the CECL standard | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 42 | |||
Commercial Banking | Reserve for unfunded lending commitments | Balance as of January 1, 2020 | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the beginning of the period | 172 | |||
Commercial Banking | Combined allowance and reserve | ||||
Allowance for Credit Losses [Roll Forward] | ||||
Balance at the end of the period | $ 2,121 | $ 876 | $ 2,121 | $ 876 |
Allowance for Credit Losses and Reserve for Unfunded Lending Commitments - Summary of Loss Sharing Arrangements (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Amounts estimated to be charged to partners which reduced provision for credit losses | $ 4,246 | $ 1,342 | $ 9,669 | $ 3,035 |
Loss sharing agreements | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Expected reimbursement from loss sharing partners, beginning balance | 2,653 | 442 | 2,166 | 379 |
Amounts due from partners which reduced net charge-offs | (293) | (105) | (595) | (213) |
Amounts estimated to be charged to partners which reduced provision for credit losses | 73 | 77 | 862 | 248 |
Expected reimbursement from loss sharing partners, ending balance | $ 2,433 | $ 414 | $ 2,433 | $ 414 |
Variable Interest Entities and Securitizations - Additional Information (Detail) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Variable Interest Entity [Line Items] | |||
Amortization method qualified affordable housing investments, amortization | $ 285 | $ 279 | |
Affordable housing tax credits | 622 | $ 355 | |
Amortization method qualified affordable housing investments | 4,500 | $ 4,400 | |
Qualified affordable housing investments, commitment | 1,500 | 1,500 | |
Carrying Amount of Assets | 421,296 | 390,365 | |
VIE, reporting entity involvement, maximum loss exposure | 5,348 | 5,413 | |
Affordable housing entities | |||
Variable Interest Entity [Line Items] | |||
VIE, reporting entity involvement, maximum loss exposure | 4,553 | 4,559 | |
Entities that provide capital to low-income and rural communities | |||
Variable Interest Entity [Line Items] | |||
VIE, reporting entity involvement, maximum loss exposure | 0 | 0 | |
Other | |||
Variable Interest Entity [Line Items] | |||
VIE, reporting entity involvement, maximum loss exposure | 476 | 502 | |
Unconsolidated | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 5,085 | 5,127 | |
Unconsolidated | Affordable housing entities | |||
Variable Interest Entity [Line Items] | |||
Total assets of the unconsolidated VIE investment funds | 10,800 | 10,900 | |
Carrying Amount of Assets | 4,553 | 4,559 | |
Unconsolidated | Entities that provide capital to low-income and rural communities | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 0 | 0 | |
Unconsolidated | Other | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 476 | 502 | |
Consolidated | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 30,404 | 35,519 | |
Consolidated | Affordable housing entities | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 248 | 236 | |
Consolidated | Entities that provide capital to low-income and rural communities | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | 2,030 | 1,889 | |
Consolidated | Other | |||
Variable Interest Entity [Line Items] | |||
Carrying Amount of Assets | $ 0 | $ 0 |
Variable Interest Entities and Securitizations - Carrying Amount of Consolidated and Unconsolidated VIEs (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | $ 5,348 | $ 5,413 |
Carrying Amount of Assets | 421,296 | 390,365 |
Carrying Amount of Liabilities | 365,251 | 332,354 |
Affordable housing entities | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 4,553 | 4,559 |
VIE, nonconsolidated, carrying amount of assets included in certain investment structures | 2,300 | 2,300 |
VIE, nonconsolidated, carrying amount of liabilities included in certain investment structures | 652 | 741 |
Entities that provide capital to low-income and rural communities | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 0 | 0 |
Other | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 476 | 502 |
Total other VIEs | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 5,029 | 5,061 |
Credit card loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 0 | 0 |
Auto loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 0 | 0 |
Home loan | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 319 | 352 |
Total securitization-related VIEs | ||
Variable Interest Entity [Line Items] | ||
Maximum Exposure to Loss | 319 | 352 |
Consolidated | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 30,404 | 35,519 |
Carrying Amount of Liabilities | 15,890 | 18,201 |
Consolidated | Affordable housing entities | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 248 | 236 |
Carrying Amount of Liabilities | 18 | 7 |
Consolidated | Entities that provide capital to low-income and rural communities | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 2,030 | 1,889 |
Carrying Amount of Liabilities | 69 | 69 |
Consolidated | Other | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 0 | 0 |
Carrying Amount of Liabilities | 0 | 0 |
Consolidated | Total other VIEs | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 2,278 | 2,125 |
Carrying Amount of Liabilities | 87 | 76 |
Consolidated | Credit card loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 25,119 | 31,112 |
Carrying Amount of Liabilities | 13,141 | 16,113 |
Consolidated | Auto loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 3,007 | 2,282 |
Carrying Amount of Liabilities | 2,662 | 2,012 |
Consolidated | Home loan | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 0 | 0 |
Carrying Amount of Liabilities | 0 | 0 |
Consolidated | Total securitization-related VIEs | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 28,126 | 33,394 |
Carrying Amount of Liabilities | 15,803 | 18,125 |
Unconsolidated | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 5,085 | 5,127 |
Carrying Amount of Liabilities | 1,262 | 1,289 |
Unconsolidated | Affordable housing entities | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 4,553 | 4,559 |
Carrying Amount of Liabilities | 1,262 | 1,289 |
Unconsolidated | Entities that provide capital to low-income and rural communities | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 0 | 0 |
Carrying Amount of Liabilities | 0 | 0 |
Unconsolidated | Other | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 476 | 502 |
Carrying Amount of Liabilities | 0 | 0 |
Unconsolidated | Total other VIEs | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 5,029 | 5,061 |
Carrying Amount of Liabilities | 1,262 | 1,289 |
Unconsolidated | Credit card loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 0 | 0 |
Carrying Amount of Liabilities | 0 | 0 |
Unconsolidated | Auto loan securitizations | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 0 | 0 |
Carrying Amount of Liabilities | 0 | 0 |
Unconsolidated | Home loan | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 56 | 66 |
Carrying Amount of Liabilities | 0 | 0 |
Unconsolidated | Total securitization-related VIEs | ||
Variable Interest Entity [Line Items] | ||
Carrying Amount of Assets | 56 | 66 |
Carrying Amount of Liabilities | $ 0 | $ 0 |
Variable Interest Entities and Securitizations - Continuing Involvement in Securitization Related VIEs (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Credit Card | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Securities held by third-party investors, non-mortgage | $ 13,102 | $ 15,798 |
Receivables in the trust, non-mortgage | 26,317 | 31,625 |
Cash balance of spread or reserve accounts, non-mortgage | 0 | 0 |
Auto | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Securities held by third-party investors, non-mortgage | 2,659 | 2,010 |
Receivables in the trust, non-mortgage | 2,885 | 2,192 |
Cash balance of spread or reserve accounts, non-mortgage | 10 | 7 |
Home Loan | ||
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | ||
Securities held by third-party investors, mortgage | 872 | 962 |
Receivables in the trust, mortgage | 882 | 978 |
Cash balance of spread or reserve accounts, mortgage | $ 16 | $ 17 |
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expense for amortizable intangible assets | $ 16 | $ 29 | $ 38 | $ 59 |
Goodwill and Intangible Assets - Components (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Schedule of Intangible Assets by Major Class [Line Items] | ||
Goodwill, gross | $ 14,645 | $ 14,653 |
Goodwill | 14,645 | 14,653 |
Intangible assets, gross (excluding Goodwill) | 2,181 | 2,178 |
Accumulated amortization | (2,041) | (2,004) |
Intangible assets, net (excluding Goodwill) | 140 | 174 |
Intangible assets gross including Goodwill | 16,826 | 16,831 |
Total goodwill and other intangible assets, net carrying value | 14,785 | 14,827 |
Commercial MSRs, gross | 611 | 555 |
Commercial MSR, accumulated amortization | (289) | (255) |
Total commercial MSRs | 322 | 300 |
PCCR intangibles | ||
Schedule of Intangible Assets by Major Class [Line Items] | ||
Intangible assets, gross (excluding Goodwill) | 1,932 | 1,932 |
Accumulated amortization | (1,887) | (1,864) |
Intangible assets, net (excluding Goodwill) | 45 | 68 |
Other intangible assets | ||
Schedule of Intangible Assets by Major Class [Line Items] | ||
Intangible assets, gross (excluding Goodwill) | 249 | 246 |
Accumulated amortization | (154) | (140) |
Intangible assets, net (excluding Goodwill) | $ 95 | $ 106 |
Goodwill and Intangible Assets - Goodwill Business Segments (Detail) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 14,653 |
Other adjustments | (8) |
Goodwill, ending balance | 14,645 |
Credit Card | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 5,088 |
Other adjustments | (8) |
Goodwill, ending balance | 5,080 |
Consumer Banking | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 4,645 |
Other adjustments | 0 |
Goodwill, ending balance | 4,645 |
Commercial Banking | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 4,920 |
Other adjustments | 0 |
Goodwill, ending balance | $ 4,920 |
Deposits and Borrowings - Deposits and Short-term Borrowings (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
---|---|---|---|
Deposits: | |||
Non-interest-bearing deposits | $ 29,055 | $ 23,488 | |
Interest-bearing deposits | 275,183 | 239,209 | |
Total deposits | 304,238 | 262,697 | $ 254,535 |
Short-term borrowings | |||
Short-term borrowings | 573 | 7,314 | |
Time deposits, at or above FDIC insurance limit | 5,900 | 6,500 | |
Federal funds purchased and securities loaned or sold under agreements to repurchase | |||
Short-term borrowings | |||
Short-term borrowings | 573 | 314 | |
FHLB advances | |||
Short-term borrowings | |||
Short-term borrowings | $ 0 | $ 7,000 |
Deposits and Borrowings - Long-Term Debt (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total long-term debt | $ 44,327 | $ 48,383 |
Total short-term borrowings and long-term debt | 44,900 | 55,697 |
EUR denominated unsecured notes | 28,481 | 30,472 |
Euro | ||
Debt Instrument [Line Items] | ||
EUR denominated unsecured notes | $ 1,400 | 1,400 |
Securitized debt obligations | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.77% | |
Carrying value | $ 15,761 | 17,808 |
Total senior and subordinated notes | ||
Debt Instrument [Line Items] | ||
Carrying value | $ 28,481 | 30,472 |
Senior notes | Total unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.65% | |
Carrying value | $ 23,709 | 25,997 |
Senior notes | Fixed unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.81% | |
Carrying value | $ 21,701 | 23,302 |
Senior notes | Floating unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.01% | |
Carrying value | $ 2,008 | 2,695 |
Subordinated notes | Fixed unsecured subordinated debt | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.78% | |
Carrying value | $ 4,772 | 4,475 |
Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.71% | |
Carrying value | $ 85 | 103 |
Total other long-term borrowings | ||
Debt Instrument [Line Items] | ||
Carrying value | $ 85 | $ 103 |
Minimum | Securitized debt obligations | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 0.53% | |
Minimum | Senior notes | Fixed unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 0.80% | |
Minimum | Senior notes | Floating unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 0.81% | |
Minimum | Subordinated notes | Fixed unsecured subordinated debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 3.38% | |
Minimum | Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 1.63% | |
Maximum | Securitized debt obligations | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 3.01% | |
Maximum | Senior notes | Fixed unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 4.75% | |
Maximum | Senior notes | Floating unsecured senior debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 1.91% | |
Maximum | Subordinated notes | Fixed unsecured subordinated debt | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 4.20% | |
Maximum | Finance lease liabilities | ||
Debt Instrument [Line Items] | ||
Stated interest rates | 9.91% |
Derivative Instruments and Hedging Activities - Additional Information (Detail) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Gain (net after-tax) recorded in AOCI related to derivatives designated as cash flow hedges expected to be reclassified to earnings over the next 12 months | $ 649 |
Maximum length of time over which forecasted transactions were hedged, years | 7 years |
Derivative Instruments and Hedging Activities - Derivative Assets and Liabilities at Fair Value (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | $ 269,784 | $ 255,546 |
Derivative assets, gross amount | 4,835 | 1,729 |
Derivative liabilities, gross amount | 2,214 | 1,197 |
Derivative asset, netting adjustments | (2,226) | (633) |
Derivative liability, netting adjustments | (754) | (523) |
Total derivative assets | 2,609 | 1,096 |
Total derivative liabilities | 1,460 | 674 |
Net valuation allowance on derivative assets and liabilities for non-performance risk | 33 | 12 |
Derivatives designated as accounting hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 172,000 | 164,821 |
Derivative assets, gross amount | 1,102 | 332 |
Derivative liabilities, gross amount | 110 | 305 |
Derivatives designated as accounting hedges | Interest rate contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 163,361 | 154,487 |
Derivative assets, gross amount | 1,005 | 332 |
Derivative liabilities, gross amount | 33 | 84 |
Derivatives designated as accounting hedges | Interest rate contracts | Fair value hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 48,761 | 57,587 |
Derivative assets, gross amount | 3 | 11 |
Derivative liabilities, gross amount | 20 | 55 |
Derivatives designated as accounting hedges | Interest rate contracts | Cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 114,600 | 96,900 |
Derivative assets, gross amount | 1,002 | 321 |
Derivative liabilities, gross amount | 13 | 29 |
Derivatives designated as accounting hedges | Foreign exchange contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 8,639 | 10,334 |
Derivative assets, gross amount | 97 | 0 |
Derivative liabilities, gross amount | 77 | 221 |
Derivatives designated as accounting hedges | Foreign exchange contracts | Fair value hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 1,404 | 1,402 |
Derivative assets, gross amount | 20 | 0 |
Derivative liabilities, gross amount | 0 | 6 |
Derivatives designated as accounting hedges | Foreign exchange contracts | Cash flow hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 4,639 | 6,103 |
Derivative assets, gross amount | 50 | 0 |
Derivative liabilities, gross amount | 63 | 113 |
Derivatives designated as accounting hedges | Foreign exchange contracts | Net investment hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 2,596 | 2,829 |
Derivative assets, gross amount | 27 | 0 |
Derivative liabilities, gross amount | 14 | 102 |
Derivatives not designated as accounting hedges | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 97,784 | 90,725 |
Derivative assets, gross amount | 3,733 | 1,397 |
Derivative liabilities, gross amount | 2,104 | 892 |
Derivatives not designated as accounting hedges | Customer accommodation | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 89,907 | 82,434 |
Derivative assets, gross amount | 3,645 | 1,349 |
Derivative liabilities, gross amount | 2,015 | 853 |
Derivatives not designated as accounting hedges | Interest rate contracts | Customer accommodation | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 68,707 | 62,268 |
Derivative assets, gross amount | 1,721 | 552 |
Derivative liabilities, gross amount | 224 | 117 |
Derivatives not designated as accounting hedges | Interest rate contracts | Other interest rate exposures | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 6,263 | 6,729 |
Derivative assets, gross amount | 87 | 48 |
Derivative liabilities, gross amount | 81 | 30 |
Derivatives not designated as accounting hedges | Foreign exchange contracts | Customer accommodation | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 3,816 | 4,674 |
Derivative assets, gross amount | 48 | 39 |
Derivative liabilities, gross amount | 52 | 42 |
Derivatives not designated as accounting hedges | Commodity contracts | Customer accommodation | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 17,384 | 15,492 |
Derivative assets, gross amount | 1,876 | 758 |
Derivative liabilities, gross amount | 1,739 | 694 |
Derivatives not designated as accounting hedges | Other contracts | ||
Derivatives, Fair Value [Line Items] | ||
Notional or contractual amount | 1,614 | 1,562 |
Derivative assets, gross amount | 1 | 0 |
Derivative liabilities, gross amount | $ 8 | $ 9 |
Derivative Instruments and Hedging Activities - Hedged Items in Fair Value Hedging Relationship (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Hedged Items In Fair Value Hedging Relationship [Line Items] | ||
Amortized cost of closed prepayment assets | $ 5,900 | |
Amortized cost of closed prepayable assets, designated hedged items | 3,100 | |
Hedged assets cumulative basis adjustment | $ 212 | 75 |
Available-for-sale securities | ||
Hedged Items In Fair Value Hedging Relationship [Line Items] | ||
Carrying Amount of Assets | 4,858 | 10,825 |
Hedged Assets, Fair Value Hedge, Cumulative Increase (Decrease) | 660 | 300 |
Hedged Assets, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | 212 | 52 |
Interest-bearing deposits | ||
Hedged Items In Fair Value Hedging Relationship [Line Items] | ||
Carrying Amount Of Liabilities | (14,851) | (14,310) |
Hedged Liabilities, Fair Value Hedge, Cumulative Increase (Decrease) | (306) | (12) |
Hedged Liabilities, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | 0 | 0 |
Securitized debt obligations | ||
Hedged Items In Fair Value Hedging Relationship [Line Items] | ||
Carrying Amount Of Liabilities | (10,011) | (9,403) |
Hedged Liabilities, Fair Value Hedge, Cumulative Increase (Decrease) | (248) | 44 |
Hedged Liabilities, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | 42 | 64 |
Senior and subordinated notes | ||
Hedged Items In Fair Value Hedging Relationship [Line Items] | ||
Carrying Amount Of Liabilities | (22,620) | (27,777) |
Hedged Liabilities, Fair Value Hedge, Cumulative Increase (Decrease) | (1,533) | (458) |
Hedged Liabilities, Discontinued Fair Value Hedge, Cumulative Increase (Decrease) | $ (732) | $ 324 |
Derivative Instruments and Hedging Activities - Offsetting Assets (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative assets | ||
Derivative assets, gross amount | $ 4,835 | $ 1,729 |
Derivative assets, offsetting financial instruments | (702) | (347) |
Derivative assets, offsetting cash collateral | (1,524) | (286) |
Total derivative assets | 2,609 | 1,096 |
Derivative assets, securities not netted | 0 | 0 |
Net Exposure | 2,609 | 1,096 |
Derivative, collateral, obligation to return cash | 1,700 | 347 |
Derivative, collateral, obligation to return securities | 1 | 1 |
Derivative, collateral, right to reclaim cash | $ 1,300 | $ 954 |
Derivative Instruments and Hedging Activities - Offsetting Liabilities (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative liabilities | ||
Derivative liabilities, gross amount | $ 2,214 | $ 1,197 |
Derivative liabilities, offsetting financial instruments | (702) | (347) |
Derivative liabilities, offsetting cash collateral | (52) | (176) |
Total derivative liabilities | 1,460 | 674 |
Derivative liabilities, securities collateral not netted | 0 | 0 |
Net exposure | 1,460 | 674 |
Repurchase agreements | ||
Gross amounts | 573 | 314 |
Repurchase agreements, securities sold, offset | 0 | 0 |
Repurchase agreements, cash collateral pledged, offset | 0 | 0 |
Net amounts as recognized | 573 | 314 |
Repurchase agreements, securities collateral not netted | (573) | (314) |
Net exposure | 0 | 0 |
Derivative, collateral, obligation to return cash | 1,700 | 347 |
Derivative, collateral, obligation to return securities | 1 | 1 |
Derivative, collateral, right to reclaim cash | 1,300 | 954 |
Securities sold under repurchase agreements, fair value of collateral | $ 584 | $ 320 |
Derivative Instruments and Hedging Activities - Effects of Fair Value and Cash Flow Hedge Accounting (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest and dividend income, securities | $ 482 | $ 629 | $ 1,012 | $ 1,284 |
Interest and fee income, loans | 5,820 | 6,383 | 12,362 | 12,751 |
Interest and dividend income, other | 16 | 64 | 53 | 133 |
Deposits | (611) | (870) | (1,342) | (1,687) |
Securitized debt obligations | (56) | (139) | (155) | (282) |
Senior and subordinated notes | (180) | (310) | (419) | (624) |
Non-interest income | 166 | 191 | 311 | 348 |
Amortization of basis adjustment | 17 | 56 | 53 | 117 |
Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Realized losses (gains) on foreign exchange contracts reclassified from AOCI | 299 | 123 | (93) | 295 |
Fair value hedges | Interest income - Investment securities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | (21) | (2) | (32) | (1) |
Fair value hedges | Interest income - Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 0 | 0 | 0 | 0 |
Fair value hedges | Interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 0 | 0 | 0 | 0 |
Fair value hedges | Interest expense - Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 26 | (30) | 25 | (63) |
Fair value hedges | Interest expense - Securitized Debt Obligation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 27 | (29) | 29 | (59) |
Fair value hedges | Interest expense - Senior and Subordinated Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 64 | (50) | 79 | (100) |
Fair value hedges | Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income (expense) recognized on fair value hedges | 0 | 1 | 0 | 1 |
Fair value hedges | Interest rate contracts | Interest income - Investment securities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | (17) | (1) | (28) | 1 |
Gains (losses) recognized on derivatives | (26) | (175) | (364) | (286) |
Gains (losses) recognized on hedged items | 22 | 174 | 360 | 284 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Fair value hedges | Interest rate contracts | Interest income - Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 0 | 0 | 0 | 0 |
Gains (losses) recognized on derivatives | 0 | 0 | 0 | 0 |
Gains (losses) recognized on hedged items | 0 | 0 | 0 | 0 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Fair value hedges | Interest rate contracts | Interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 0 | 0 | 0 | 0 |
Gains (losses) recognized on derivatives | 0 | 0 | 0 | 0 |
Gains (losses) recognized on hedged items | 0 | 0 | 0 | 0 |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Fair value hedges | Interest rate contracts | Interest expense - Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 27 | (33) | 25 | (69) |
Gains (losses) recognized on derivatives | 9 | 154 | 296 | 249 |
Gains (losses) recognized on hedged items | (10) | (151) | (296) | (243) |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Fair value hedges | Interest rate contracts | Interest expense - Securitized Debt Obligation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 40 | (6) | 52 | (12) |
Gains (losses) recognized on derivatives | (13) | 79 | 269 | 112 |
Gains (losses) recognized on hedged items | 0 | (102) | (292) | (159) |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Fair value hedges | Interest rate contracts | Interest expense - Senior and Subordinated Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 71 | (10) | 110 | (21) |
Gains (losses) recognized on derivatives | 61 | 471 | 1,129 | 752 |
Gains (losses) recognized on hedged items | (68) | (511) | (1,159) | (831) |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | (1) | ||
Fair value hedges | Interest rate contracts | Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Interest recognized on derivatives | 0 | 0 | 0 | 0 |
Gains (losses) recognized on derivatives | 26 | 11 | 3 | 11 |
Gains (losses) recognized on hedged items | (26) | (10) | (3) | (10) |
Gain (Loss) from Components Excluded from Assessment of Fair Value Hedge Effectiveness, Net | 0 | 0 | ||
Cash flow hedges | Interest income - Investment securities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 7 | (3) | 9 | (7) |
Cash flow hedges | Interest income - Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 135 | (59) | 159 | (115) |
Cash flow hedges | Interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 2 | 13 | 9 | 25 |
Cash flow hedges | Interest expense - Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest expense - Securitized Debt Obligation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest expense - Senior and Subordinated Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | 0 | 0 | 0 | 0 |
Cash flow hedges | Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Net income recognized on cash flow hedges | (2) | (1) | (2) | (1) |
Cash flow hedges | Interest rate contracts | Interest income - Investment securities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 7 | (3) | 9 | (7) |
Cash flow hedges | Interest rate contracts | Interest income - Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 135 | (59) | 159 | (115) |
Cash flow hedges | Interest rate contracts | Interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest rate contracts | Interest expense - Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest rate contracts | Interest expense - Securitized Debt Obligation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest rate contracts | Interest expense - Senior and Subordinated Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Interest rate contracts | Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Interest income - Investment securities | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Interest income - Loans | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 2 | 13 | 9 | 25 |
Cash flow hedges | Foreign exchange contracts | Interest expense - Deposits | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Interest expense - Securitized Debt Obligation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Interest expense - Senior and Subordinated Debt | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | 0 | 0 | 0 | 0 |
Cash flow hedges | Foreign exchange contracts | Non interest income - Other | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Reclassification adjustment from AOCI on derivatives, net of tax | $ (2) | $ (1) | $ (2) | $ (1) |
Derivative Instruments and Hedging Activities - Gains Losses on Freestanding Derivatives (Detail) - Other non-interest income - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | $ (34) | $ 1 | $ 16 | $ 10 |
Interest rate contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | (1) | 15 | 32 | 26 |
Interest rate contracts | Customer accommodation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | (1) | 4 | 12 | 10 |
Interest rate contracts | Other interest rate exposures | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | (34) | (14) | (16) | (14) |
Commodity contracts | Customer accommodation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | (1) | 7 | 16 | 9 |
Foreign exchange contracts | Customer accommodation | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | 1 | 4 | 4 | 7 |
Other contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gains (losses) on derivatives not designated as accounting hedges | $ 1 | $ 0 | $ 0 | $ (2) |
Stockholders' Equity - Preferred Stock Outstanding (Details) $ / shares in Units, $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020
USD ($)
$ / shares
shares
|
Dec. 31, 2019
USD ($)
|
|
Class of Stock [Line Items] | ||
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 5,209 | $ 4,853 |
Depository Share, Percent Interest in Preferred Stock | 0.025 | |
Series B Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 6.00% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 0 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 0 | 853 |
Series E Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 5.55% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 1,000,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 988 | 988 |
Preferred Stock, Dividend Payment Rate, Variable | Libor + 380 bps | |
Preferred Stock Dividend Rate, Variable | 3.80% | |
Series F Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 6.20% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 500,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 484 | 484 |
Series G Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 5.20% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 600,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 583 | 583 |
Series H Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 6.00% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 500,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 483 | 483 |
Series I Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 5.00% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 1,500,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 1,462 | 1,462 |
Series J Preferred Stock | ||
Class of Stock [Line Items] | ||
Per Annum Dividend Rate | 4.80% | |
Liquidation Preference per Share | $ / shares | $ 1,000 | |
Total Shares Outstanding as of June 30, 2020 | shares | 1,250,000 | |
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 1,209 | $ 0 |
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | $ 1,156 | |||
Other comprehensive income (loss), net of tax | $ 302 | $ 830 | 2,833 | $ 1,433 |
AOCI ending balance | 3,981 | 3,981 | ||
Accumulated Net Unrealized Investment Gain (Loss) | Securities Available for Sale | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 2,151 | (147) | 935 | (439) |
Other comprehensive income (loss) before reclassifications | 222 | 284 | 1,446 | 594 |
Amounts reclassified from AOCI into earnings | 0 | (12) | 0 | (30) |
Other comprehensive income (loss), net of tax | 222 | 272 | 1,446 | 564 |
AOCI ending balance | 2,373 | 125 | 2,373 | 125 |
Accumulated Net Unrealized Investment Gain (Loss) | Securities Held to Maturity | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | (184) | (190) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from AOCI into earnings | 6 | 12 | ||
Other comprehensive income (loss), net of tax | 6 | 12 | ||
AOCI ending balance | (178) | (178) | ||
Hedging Relationships | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 1,728 | (141) | 354 | (418) |
Other comprehensive income (loss) before reclassifications | (60) | 406 | 1,635 | 517 |
Amounts reclassified from AOCI into earnings | 117 | 131 | (204) | 297 |
Other comprehensive income (loss), net of tax | 57 | 537 | 1,431 | 814 |
AOCI ending balance | 1,785 | 396 | 1,785 | 396 |
Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | (174) | (147) | (107) | (177) |
Other comprehensive income (loss) before reclassifications | 23 | 15 | (44) | 45 |
Amounts reclassified from AOCI into earnings | 0 | 0 | 0 | 0 |
Other comprehensive income (loss), net of tax | 23 | 15 | (44) | 45 |
AOCI ending balance | (151) | (132) | (151) | (132) |
Other | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | (26) | (41) | (26) | (39) |
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | (1) |
Amounts reclassified from AOCI into earnings | 0 | 0 | 0 | (1) |
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (2) |
AOCI ending balance | (26) | (41) | (26) | (41) |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 3,679 | (660) | 1,156 | (1,263) |
Other comprehensive income (loss) before reclassifications | 185 | 705 | 3,037 | 1,155 |
Amounts reclassified from AOCI into earnings | 117 | 125 | (204) | 278 |
Other comprehensive income (loss), net of tax | 302 | 830 | 2,833 | 1,433 |
AOCI ending balance | 3,981 | 170 | 3,981 | 170 |
Net investment hedges | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
Gains (losses) recorded in AOCI | $ (8) | $ 53 | 134 | $ 19 |
Cumulative effects from adoption of the CECL standard | Accumulated Net Unrealized Investment Gain (Loss) | Securities Available for Sale | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | (8) | |||
Cumulative effects from adoption of the CECL standard | Hedging Relationships | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 0 | |||
Cumulative effects from adoption of the CECL standard | Foreign Currency Translation Adjustments | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 0 | |||
Cumulative effects from adoption of the CECL standard | Other | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | 0 | |||
Cumulative effects from adoption of the CECL standard | Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||||
AOCI beginning balance | $ (8) |
Stockholders' Equity - Reclassifications from AOCI (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | $ 5,460 | $ 5,746 | $ 11,485 | $ 11,537 |
Interest expense | 858 | 1,330 | 1,942 | 2,631 |
Non-interest income | 166 | 191 | 311 | 348 |
Income (loss) from continuing operations before income taxes | (1,460) | 2,003 | (3,363) | 3,722 |
Income tax provision (benefit) | (543) | 387 | (1,106) | 696 |
Net income (loss) | (918) | 1,625 | (2,258) | 3,037 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Net income (loss) | (117) | (125) | 204 | (278) |
Accumulated Net Unrealized Investment Gain (Loss) | Reclassification out of Accumulated Other Comprehensive Income [Member] | Available-for-sale securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Non-interest income | 0 | 15 | 0 | 39 |
Income tax provision (benefit) | 0 | 3 | 0 | 9 |
Net income (loss) | 0 | 12 | 0 | 30 |
Accumulated Net Unrealized Investment Gain (Loss) | Reclassification out of Accumulated Other Comprehensive Income [Member] | Securities Held to Maturity | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | 0 | (8) | 0 | (16) |
Income tax provision (benefit) | 0 | (2) | 0 | (4) |
Net income (loss) | 0 | (6) | 0 | (12) |
Hedging Relationships | Reclassification out of Accumulated Other Comprehensive Income [Member] | Interest rate contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | 142 | (62) | 168 | (122) |
Hedging Relationships | Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign exchange contracts | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest income | 2 | 13 | 9 | 25 |
Interest expense | (1) | 0 | (2) | 0 |
Non-interest income | (299) | (123) | 93 | (295) |
Income (loss) from continuing operations before income taxes | (156) | (172) | 268 | (392) |
Income tax provision (benefit) | (39) | (41) | 64 | (95) |
Net income (loss) | (117) | (131) | 204 | (297) |
Other | Reclassification out of Accumulated Other Comprehensive Income [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Income (loss) from continuing operations before income taxes | 0 | 0 | 0 | 1 |
Income tax provision (benefit) | 0 | 0 | 0 | 0 |
Net income (loss) | $ 0 | $ 0 | $ 0 | $ 1 |
Stockholders' Equity - Other Comprehensive Income (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Before Tax | ||||
Net unrealized gains (losses) on securities available for sale | $ 292 | $ 358 | $ 1,902 | $ 742 |
Net unrealized gains (losses) on hedging relationships | 76 | 708 | 1,884 | 1,073 |
Foreign currency translation adjustments | 20 | 33 | (1) | 52 |
Net changes in securities held to maturity | 0 | 9 | 16 | |
Other | 0 | (1) | 0 | (3) |
Other comprehensive income (loss), before tax | 388 | 1,107 | 3,785 | 1,880 |
Provision (Benefit) | ||||
Net unrealized gains (losses) on securities available for sale | 70 | 86 | 456 | 178 |
Net unrealized gains (losses) on hedging relationships | 19 | 171 | 453 | 259 |
Foreign currency translation adjustments | (3) | 18 | 43 | 7 |
Net changes in securities held to maturity | 0 | 3 | 0 | 4 |
Other | 0 | (1) | 0 | (1) |
Other comprehensive income (loss), provision (benefit) | 86 | 277 | 952 | 447 |
After Tax | ||||
Net unrealized gains (losses) on securities available for sale | 222 | 272 | 1,446 | 564 |
Net unrealized gains (losses) on hedging relationships | 57 | 537 | 1,431 | 814 |
Foreign currency translation adjustments | 23 | 15 | (44) | 45 |
Net changes in securities held to maturity | 0 | 6 | 0 | 12 |
Other | 0 | 0 | 0 | (2) |
Other comprehensive income, net of tax | $ 302 | $ 830 | $ 2,833 | $ 1,433 |
Earnings Per Common Share - Additional Information (Detail) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Award | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive options excluded from the computation of diluted earnings per share (in shares) | 362,000 | 956,000 | ||
Stock option | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive options excluded from the computation of diluted earnings per share (in shares) | 2,600,000 | 0 | 2,700,000 | 137,000 |
Maximum exercise price range | $ 86.34 | $ 86.34 | ||
Minimum exercise price range | $ 45.75 | $ 36.55 | $ 86.34 |
Earnings Per Common Share - Computation of Basic and Diluted Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Income (loss) from continuing operations, net of tax | $ (917) | $ 1,616 | $ (2,257) | $ 3,026 |
Income (loss) from discontinued operations, net of tax | (1) | 9 | (1) | 11 |
Net income (loss) | (918) | 1,625 | (2,258) | 3,037 |
Dividends and undistributed earnings allocated to participating securities | (1) | (12) | (4) | (24) |
Preferred stock dividends | (90) | (80) | (145) | (132) |
Issuance cost for redeemed preferred stock | 0 | 0 | (22) | 0 |
Net income (loss) available to common stockholders | $ (1,009) | $ 1,533 | $ (2,429) | $ 2,881 |
Total weighted-average basic shares outstanding | 456,700,000 | 470,800,000 | 457,100,000 | 470,100,000 |
Effect of dilutive securities: | ||||
Stock options | 0.0 | 1,300,000 | 0.0 | 1,200,000 |
Other contingently issuable shares | 0.0 | 900,000 | 0.0 | 1,000,000.0 |
Total effect of dilutive securities | 0.0 | 2,200,000 | 0.0 | 2,200,000 |
Total weighted-average diluted shares outstanding | 456,700,000 | 473,000,000.0 | 457,100,000 | 472,300,000 |
Basic earnings per common share: | ||||
Net income (loss) from continuing operations (in dollars per share) | $ (2.21) | $ 3.24 | $ (5.31) | $ 6.11 |
Income from discontinued operations | 0.00 | 0.02 | 0.00 | 0.02 |
Net income (loss) per basic common share (in dollars per share) | (2.21) | 3.26 | (5.31) | 6.13 |
Diluted earnings per common share: | ||||
Net income (loss) from continuing operations (in dollars per share) | (2.21) | 3.22 | (5.31) | 6.08 |
Income from discontinued operations (in dollars per share) | 0.00 | 0.02 | 0.00 | 0.02 |
Net income (loss) per diluted common share (in dollars per share) | $ (2.21) | $ 3.24 | $ (5.31) | $ 6.10 |
Stock option | ||||
Diluted earnings per common share: | ||||
Anti-dilutive options excluded from the computation of diluted earnings per share (in shares) | 2,600,000 | 0 | 2,700,000 | 137,000 |
Fair Value Measurement - Additional Information (Detail) - Non-Recoverable Rate - Level 3 - Appraisal value |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, measurement input | 0.00% | 0.00% |
Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, measurement input | 15.00% | 50.00% |
Weighted average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment, measurement input | 3.00% | 6.00% |
Fair Value Measurement - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 30, 2019 |
---|---|---|---|
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | $ 87,859 | $ 79,213 | |
Loans held for sale | 668 | 251 | |
Derivative assets, gross amount | 4,835 | 1,729 | |
Derivative asset, netting adjustments | (2,226) | (633) | |
Derivative asset | 2,609 | 1,096 | |
Liabilities: | |||
Derivative liabilities, gross amount | 2,214 | 1,197 | |
Derivative liability, netting adjustments | (754) | (523) | |
Derivative liability | 1,460 | 674 | |
Net valuation allowance | 33 | 12 | |
Level 1 | |||
Assets: | |||
Loans held for sale | 0 | 0 | |
Level 2 | |||
Assets: | |||
Loans held for sale | 43 | 149 | |
Level 3 | |||
Assets: | |||
Loans held for sale | 0 | 0 | |
Recurring | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 87,859 | 79,213 | |
Loans held for sale | 668 | 251 | |
Derivative asset | 2,609 | 1,096 | |
Other assets | 404 | 410 | |
Total assets | 91,540 | 80,970 | |
Liabilities: | |||
Derivative liability | 1,460 | 674 | |
Recurring | Level 1 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 4,556 | 4,355 | |
Loans held for sale | 0 | 0 | |
Derivative assets, gross amount | 301 | 84 | |
Other assets | 348 | 344 | |
Total assets | 5,205 | 4,783 | |
Other assets: | |||
Deferred compensation plan assets | 347 | 343 | |
Equity securities | 1 | 1 | |
Liabilities: | |||
Derivative liabilities, gross amount | 220 | 17 | |
Recurring | Level 2 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 82,547 | 74,416 | |
Loans held for sale | 668 | 251 | |
Derivative assets, gross amount | 4,383 | 1,568 | |
Other assets | 0 | 0 | |
Total assets | 87,598 | 76,235 | |
Liabilities: | |||
Derivative liabilities, gross amount | 1,877 | 1,129 | |
Recurring | Level 3 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 756 | 442 | |
Loans held for sale | 0 | 0 | |
Derivative assets, gross amount | 151 | 77 | $ 70 |
Other assets | 56 | 66 | |
Total assets | 963 | 585 | |
Other assets: | |||
Retained interests in securitizations | 56 | 66 | |
Liabilities: | |||
Derivative liabilities, gross amount | 117 | 51 | $ 64 |
U.S. Treasury securities | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 4,362 | 4,124 | |
U.S. Treasury securities | Recurring | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 4,362 | 4,124 | |
U.S. Treasury securities | Recurring | Level 1 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 4,362 | 4,124 | |
U.S. Treasury securities | Recurring | Level 2 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 0 | 0 | |
U.S. Treasury securities | Recurring | Level 3 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 0 | 0 | |
RMBS | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 72,014 | 64,338 | |
RMBS | Recurring | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 72,014 | 64,338 | |
RMBS | Recurring | Level 1 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 0 | 0 | |
RMBS | Recurring | Level 2 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 71,540 | 63,909 | |
RMBS | Recurring | Level 3 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 474 | 429 | |
CMBS | Recurring | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 10,400 | 9,426 | |
CMBS | Recurring | Level 1 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 0 | 0 | |
CMBS | Recurring | Level 2 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 10,118 | 9,413 | |
CMBS | Recurring | Level 3 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 282 | 13 | |
Other securities | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 1,083 | 1,325 | |
Other securities | Recurring | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 1,083 | 1,325 | |
Other securities | Recurring | Level 1 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 194 | 231 | |
Other securities | Recurring | Level 2 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 889 | 1,094 | |
Other securities | Recurring | Level 3 | |||
Assets: | |||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | $ 0 | $ 0 |
Fair Value Measurement - Level 3 Recurring Fair Value Rollfoward (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Jan. 01, 2020 |
Dec. 31, 2019 |
|
Derivative, Fair Value, Net [Abstract] | ||||||
Fair value of RMBS, cumulative effects from the CECL adoption | $ 4 | |||||
Derivative assets, gross amount | $ 4,835 | $ 4,835 | $ 1,729 | |||
Derivative liabilities, gross amount | 2,214 | 2,214 | 1,197 | |||
Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Net Unrealized Gains (Losses) Included in OCI Related to Assets and Liabilities Still Held | 36 | $ 3 | (23) | $ 13 | ||
Derivative, Fair Value, Net [Abstract] | ||||||
Beginning balance | 66 | 6 | 26 | (10) | ||
Total Gains or (Losses) (Realized/Unrealized), Included in Net Income | (8) | 0 | 12 | 5 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in OCI | 0 | 0 | 0 | 0 | ||
Purchases | 0 | 0 | 0 | 0 | ||
Sales | 0 | 0 | 0 | 0 | ||
Issuances | 2 | (7) | 26 | (13) | ||
Settlements | (26) | 8 | (28) | 27 | ||
Transfers Into Level 3 | 0 | 0 | 0 | 0 | ||
Transfers Out of Level 3 | 0 | (1) | (2) | (3) | ||
Ending balance | 34 | 6 | 34 | 6 | ||
Derivative assets, gross amount | 151 | 70 | 151 | 70 | 77 | |
Derivative liabilities, gross amount | 117 | 64 | 117 | 64 | $ 51 | |
RMBS | Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 373 | 434 | 433 | 433 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in Net Income | 6 | 9 | 9 | 17 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in OCI | 29 | 2 | (24) | 13 | ||
Purchases | 0 | 0 | 0 | 0 | ||
Sales | 0 | 0 | 0 | 0 | ||
Issuances | 0 | 0 | 0 | 0 | ||
Settlements | (16) | (13) | (33) | (25) | ||
Transfers Into Level 3 | 131 | 97 | 140 | 114 | ||
Transfers Out of Level 3 | (49) | (14) | (51) | (37) | ||
Ending balance | 474 | 515 | 474 | 515 | ||
Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held | 7 | 10 | 10 | 20 | ||
CMBS | Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 36 | 9 | 13 | 10 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in Net Income | 0 | 0 | 0 | 0 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in OCI | (1) | 0 | (1) | 0 | ||
Purchases | 0 | 0 | 0 | 0 | ||
Sales | 0 | 0 | 0 | 0 | ||
Issuances | 0 | 0 | 0 | 0 | ||
Settlements | (3) | 0 | (3) | (1) | ||
Transfers Into Level 3 | 250 | 0 | 273 | 0 | ||
Transfers Out of Level 3 | 0 | 0 | 0 | 0 | ||
Ending balance | 282 | 9 | 282 | 9 | ||
Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held | (3) | 0 | (3) | 0 | ||
Available-for-sale securities | Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 409 | 443 | 446 | 443 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in Net Income | 6 | 9 | 9 | 17 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in OCI | 28 | 2 | (25) | 13 | ||
Purchases | 0 | 0 | 0 | 0 | ||
Sales | 0 | 0 | 0 | 0 | ||
Issuances | 0 | 0 | 0 | 0 | ||
Settlements | (19) | (13) | (36) | (26) | ||
Transfers Into Level 3 | 381 | 97 | 413 | 114 | ||
Transfers Out of Level 3 | (49) | (14) | (51) | (37) | ||
Ending balance | 756 | 524 | 756 | 524 | ||
Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held | 4 | 10 | 7 | 20 | ||
Retained interest in securitizations | Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | 59 | 155 | 66 | 158 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in Net Income | (3) | 22 | (10) | 19 | ||
Total Gains or (Losses) (Realized/Unrealized), Included in OCI | 0 | 0 | 0 | 0 | ||
Purchases | 0 | 0 | 0 | 0 | ||
Sales | 0 | 0 | 0 | 0 | ||
Issuances | 0 | 0 | 0 | 0 | ||
Settlements | 0 | 0 | 0 | 0 | ||
Transfers Into Level 3 | 0 | 0 | 0 | 0 | ||
Transfers Out of Level 3 | 0 | 0 | 0 | 0 | ||
Ending balance | 56 | 177 | 56 | 177 | ||
Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held | (3) | 22 | (10) | 19 | ||
Net derivative assets (liabilities) | Recurring | Level 3 | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Net Unrealized Gains (Losses) Included in Net Income Related to Assets and Liabilities Still Held | $ 0 | $ (2) | $ 18 | $ 4 |
Fair Value Measurement - Quantitative Information about Level 3 Fair Value Measurements (Detail) $ in Millions |
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Mar. 31, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
---|---|---|---|---|---|---|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | $ 87,859 | $ 79,213 | ||||
Recurring | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 87,859 | 79,213 | ||||
Recurring | Level 3 | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 756 | 442 | ||||
Retained interests in securitizations | 56 | 66 | ||||
Net derivative assets (liabilities) | 34 | 26 | $ 66 | $ 6 | $ 6 | $ (10) |
RMBS | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 72,014 | 64,338 | ||||
RMBS | Recurring | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 72,014 | 64,338 | ||||
RMBS | Recurring | Level 3 | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 474 | 429 | ||||
CMBS | Recurring | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | 10,400 | 9,426 | ||||
CMBS | Recurring | Level 3 | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available for sale (amortized cost of $84.7 billion and allowance for credit losses of $3 million as of June 30, 2020) | $ 282 | $ 13 | ||||
Yield | RMBS | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.00 | 0.02 | ||||
Yield | RMBS | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.12 | 0.18 | ||||
Yield | RMBS | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.04 | 0.05 | ||||
Yield | CMBS | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.01 | 0.02 | ||||
Yield | CMBS | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.02 | 0.03 | ||||
Yield | CMBS | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.01 | 0.02 | ||||
Voluntary prepayment rate | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.03 | 0.04 | ||||
Voluntary prepayment rate | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.14 | 0.14 | ||||
Voluntary prepayment rate | RMBS | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.05 | 0.00 | ||||
Voluntary prepayment rate | RMBS | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.10 | 0.18 | ||||
Voluntary prepayment rate | RMBS | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.08 | 0.10 | ||||
Default rate | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.03 | 0.02 | ||||
Default rate | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.04 | 0.03 | ||||
Default rate | RMBS | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.01 | 0.01 | ||||
Default rate | RMBS | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.11 | 0.06 | ||||
Default rate | RMBS | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.02 | 0.02 | ||||
Loss severity | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.70 | 0.74 | ||||
Loss severity | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.72 | 0.88 | ||||
Loss severity | RMBS | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.30 | 0.30 | ||||
Loss severity | RMBS | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 1.00 | 0.95 | ||||
Loss severity | RMBS | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Securities available-for-sale, measurement input | 0.67 | 0.67 | ||||
Life of receivables (months) | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input, life of receivables | 33 months | 35 months | ||||
Life of receivables (months) | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input, life of receivables | 52 months | 51 months | ||||
Discount rate | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.02 | 0.03 | ||||
Discount rate | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Retained interests, measurement input | 0.12 | 0.10 | ||||
Swap rates | Recurring | Level 3 | Discounted cash flows | Minimum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Net derivative assets (liabilities), measurement input | 0.01 | 0.02 | ||||
Swap rates | Recurring | Level 3 | Discounted cash flows | Maximum | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Net derivative assets (liabilities), measurement input | 0.01 | 0.02 | ||||
Swap rates | Recurring | Level 3 | Discounted cash flows | Weighted average | ||||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||||
Net derivative assets (liabilities), measurement input | 0.01 | 0.02 |
Fair Value Measurement - Nonrecurring Fair Value Measurements (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loans held for investment | $ 0 | $ 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loans held for investment | 242,893 | 258,696 |
Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loans held for investment | 289 | 294 |
Other assets | 52 | 103 |
Total assets | 341 | 397 |
Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loans held for investment | 0 | 0 |
Other assets | 0 | 0 |
Total assets | 0 | 0 |
Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Net loans held for investment | 289 | 294 |
Other assets | 52 | 103 |
Total assets | 341 | 397 |
Equity investments accounted for under measurement alternative | 28 | 5 |
Foreclosed property and repossessed assets, fair value disclosure | 23 | 61 |
Long lived assets held for sale | $ 1 | $ 37 |
Fair Value Measurement - Nonrecurring Fair Value Measurements Included in Earnings (Detail) - Nonrecurring - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans held for investment | $ (253) | $ (132) |
Loans held for sale | 0 | (1) |
Other assets | (22) | (57) |
Total | $ (275) | $ (190) |
Fair Value Measurement - Fair Value of Financial Instruments (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Financial assets: | ||
Loans held for sale | $ 668 | $ 251 |
Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 4,583 | 4,129 |
Restricted cash for securitization investors | 740 | 342 |
Net loans held for investment | 0 | 0 |
Loans held for sale | 0 | 0 |
Interest receivable | 0 | 0 |
Other investments | 0 | 0 |
Financial liabilities: | ||
Deposits with defined maturities | 0 | 0 |
Securitized debt obligations | 0 | 0 |
Senior and subordinated notes | 0 | 0 |
Federal funds purchased and securities loaned or sold under agreements to repurchase | 0 | 0 |
Other borrowings | 0 | |
Interest payable | 0 | 0 |
Level 2 | ||
Financial assets: | ||
Cash and cash equivalents | 51,235 | 9,278 |
Restricted cash for securitization investors | 0 | 0 |
Net loans held for investment | 0 | 0 |
Loans held for sale | 43 | 149 |
Interest receivable | 1,574 | 1,758 |
Other investments | 1,341 | 1,638 |
Financial liabilities: | ||
Deposits with defined maturities | 44,452 | 45,225 |
Securitized debt obligations | 15,933 | 17,941 |
Senior and subordinated notes | 28,771 | 31,233 |
Federal funds purchased and securities loaned or sold under agreements to repurchase | 573 | 314 |
Other borrowings | 7,001 | |
Interest payable | 380 | 439 |
Level 3 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Restricted cash for securitization investors | 0 | 0 |
Net loans held for investment | 242,893 | 258,696 |
Loans held for sale | 0 | 0 |
Interest receivable | 0 | 0 |
Other investments | 0 | 0 |
Financial liabilities: | ||
Deposits with defined maturities | 0 | 0 |
Securitized debt obligations | 0 | 0 |
Senior and subordinated notes | 0 | 0 |
Federal funds purchased and securities loaned or sold under agreements to repurchase | 0 | 0 |
Other borrowings | 0 | |
Interest payable | 0 | 0 |
Carrying Value | ||
Financial assets: | ||
Cash and cash equivalents | 55,818 | 13,407 |
Restricted cash for securitization investors | 740 | 342 |
Net loans held for investment | 234,680 | 258,601 |
Loans held for sale | 43 | 149 |
Interest receivable | 1,574 | 1,758 |
Other investments | 1,341 | 1,638 |
Financial liabilities: | ||
Deposits with defined maturities | 43,912 | 44,958 |
Securitized debt obligations | 15,761 | 17,808 |
Senior and subordinated notes | 28,481 | 30,472 |
Federal funds purchased and securities loaned or sold under agreements to repurchase | 573 | 314 |
Other borrowings | 7,000 | |
Interest payable | 380 | 439 |
Estimated Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 55,818 | 13,407 |
Restricted cash for securitization investors | 740 | 342 |
Net loans held for investment | 242,893 | 258,696 |
Loans held for sale | 43 | 149 |
Interest receivable | 1,574 | 1,758 |
Other investments | 1,341 | 1,638 |
Financial liabilities: | ||
Deposits with defined maturities | 44,452 | 45,225 |
Securitized debt obligations | 15,933 | 17,941 |
Senior and subordinated notes | 28,771 | 31,233 |
Federal funds purchased and securities loaned or sold under agreements to repurchase | 573 | 314 |
Other borrowings | 7,001 | |
Interest payable | $ 380 | $ 439 |
Business Segments and Revenue from Contracts with Customers - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2020
Segment
| |
Segment Reporting Information [Line Items] | |
Number of operating segments | 3 |
Business Segments and Revenue from Contracts with Customers - Segment Results and Reconciliation (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Segment Reporting Information [Line Items] | |||||
Net interest income (loss) | $ 5,460 | $ 5,746 | $ 11,485 | $ 11,537 | |
Non-interest income (loss) | 1,096 | 1,378 | 2,320 | 2,670 | |
Total net revenue (loss) | 6,556 | 7,124 | 13,805 | 14,207 | |
Provision (benefit) for credit losses | 1,342 | 3,035 | |||
Non-interest expense | 3,770 | 3,779 | 7,499 | 7,450 | |
Income (loss) from continuing operations before income taxes | (1,460) | 2,003 | (3,363) | 3,722 | |
Income tax provision (benefit) | (543) | 387 | (1,106) | 696 | |
Income (loss) from continuing operations, net of tax | (917) | 1,616 | (2,257) | 3,026 | |
Loans held for investment | 244,460 | 244,460 | |||
Total Deposits | 304,238 | 254,535 | 304,238 | 254,535 | $ 262,697 |
Uncollectible Portion of Billed Finance Charges and Fees | 318 | 707 | |||
Operating segments | Credit Card | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (loss) | 3,369 | 3,531 | 7,071 | 7,121 | |
Non-interest income (loss) | 845 | 1,038 | 1,756 | 1,988 | |
Total net revenue (loss) | 4,214 | 4,569 | 8,827 | 9,109 | |
Provision (benefit) for credit losses | 2,944 | 1,095 | 6,646 | 2,484 | |
Non-interest expense | 1,969 | 2,253 | 4,177 | 4,424 | |
Income (loss) from continuing operations before income taxes | (699) | 1,221 | (1,996) | 2,201 | |
Income tax provision (benefit) | (166) | 283 | (472) | 512 | |
Income (loss) from continuing operations, net of tax | (533) | 938 | (1,524) | 1,689 | |
Loans held for investment | 107,310 | 112,141 | 107,310 | 112,141 | |
Total Deposits | 0 | 0 | 0 | 0 | |
Operating segments | Consumer Banking | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (loss) | 1,665 | 1,709 | 3,322 | 3,388 | |
Non-interest income (loss) | 97 | 166 | 223 | 326 | |
Total net revenue (loss) | 1,762 | 1,875 | 3,545 | 3,714 | |
Provision (benefit) for credit losses | 876 | 165 | 1,736 | 400 | |
Non-interest expense | 1,036 | 1,002 | 2,027 | 1,996 | |
Income (loss) from continuing operations before income taxes | (150) | 708 | (218) | 1,318 | |
Income tax provision (benefit) | (36) | 165 | (52) | 307 | |
Income (loss) from continuing operations, net of tax | (114) | 543 | (166) | 1,011 | |
Loans held for investment | 66,712 | 60,327 | 66,712 | 60,327 | |
Total Deposits | 246,804 | 205,220 | 246,804 | 205,220 | |
Operating segments | Commercial Banking | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (loss) | 518 | 514 | 1,009 | 1,003 | |
Non-interest income (loss) | 180 | 200 | 418 | 387 | |
Total net revenue (loss) | 698 | 714 | 1,427 | 1,390 | |
Provision (benefit) for credit losses | 427 | 82 | 1,283 | 151 | |
Non-interest expense | 425 | 427 | 837 | 844 | |
Income (loss) from continuing operations before income taxes | (154) | 205 | (693) | 395 | |
Income tax provision (benefit) | (36) | 48 | (164) | 92 | |
Income (loss) from continuing operations, net of tax | (118) | 157 | (529) | 303 | |
Loans held for investment | 77,490 | 71,992 | 77,490 | 71,992 | |
Total Deposits | 35,669 | 30,761 | 35,669 | 30,761 | |
Other | |||||
Segment Reporting Information [Line Items] | |||||
Net interest income (loss) | (92) | (8) | 83 | 25 | |
Non-interest income (loss) | (26) | (26) | (77) | (31) | |
Total net revenue (loss) | (118) | (34) | 6 | (6) | |
Provision (benefit) for credit losses | (1) | 0 | 4 | 0 | |
Non-interest expense | 340 | 97 | 458 | 186 | |
Income (loss) from continuing operations before income taxes | (457) | (131) | (456) | (192) | |
Income tax provision (benefit) | (305) | (109) | (418) | (215) | |
Income (loss) from continuing operations, net of tax | (152) | (22) | (38) | 23 | |
Loans held for investment | 0 | 0 | 0 | 0 | |
Total Deposits | $ 21,765 | $ 18,554 | $ 21,765 | $ 18,554 |
Business Segments and Revenue from Contracts with Customers - Revenue from Contracts with Customers (Detail) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | $ 805 | $ 969 | $ 1,742 | $ 1,863 |
Revenue from other sources | 291 | 409 | 578 | 807 |
Non-interest income | 1,096 | 1,378 | 2,320 | 2,670 |
Operating segments | Credit Card | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 669 | 777 | 1,427 | 1,491 |
Revenue from other sources | 176 | 261 | 329 | 497 |
Non-interest income | 845 | 1,038 | 1,756 | 1,988 |
Operating segments | Consumer Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 82 | 152 | 215 | 297 |
Revenue from other sources | 15 | 14 | 8 | 29 |
Non-interest income | 97 | 166 | 223 | 326 |
Operating segments | Commercial Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 56 | 42 | 103 | 78 |
Revenue from other sources | 124 | 158 | 315 | 309 |
Non-interest income | 180 | 200 | 418 | 387 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | (2) | (2) | (3) | (3) |
Revenue from other sources | (24) | (24) | (74) | (28) |
Non-interest income | (26) | (26) | (77) | (31) |
Interchange fees, net | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 672 | 820 | 1,424 | 1,578 |
Interchange fees, net | Operating segments | Credit Card | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 612 | 757 | 1,300 | 1,459 |
Interchange fees, net | Operating segments | Consumer Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 48 | 52 | 98 | 98 |
Interchange fees, net | Operating segments | Commercial Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 13 | 13 | 28 | 24 |
Interchange fees, net | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | (1) | (2) | (2) | (3) |
Service changes and other customer-related fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 73 | 102 | 168 | 202 |
Service changes and other customer-related fees | Operating segments | Credit Card | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 0 | 0 | 0 | 0 |
Service changes and other customer-related fees | Operating segments | Consumer Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 31 | 74 | 95 | 149 |
Service changes and other customer-related fees | Operating segments | Commercial Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 43 | 28 | 74 | 53 |
Service changes and other customer-related fees | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | (1) | 0 | (1) | 0 |
Other contract revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 60 | 47 | 150 | 83 |
Other contract revenue | Operating segments | Credit Card | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 57 | 20 | 127 | 32 |
Other contract revenue | Operating segments | Consumer Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 3 | 26 | 22 | 50 |
Other contract revenue | Operating segments | Commercial Banking | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | 0 | 1 | 1 | 1 |
Other contract revenue | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total contract revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments, Contingencies, Guarantees, and Others - Unfunded Lending Commitments: Contractual Amount and Carrying Value (Detail) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Loss Contingencies [Line Items] | ||
Unfunded lending commitments, contractual amount | $ 399,483 | $ 401,474 |
Off-balance sheet lending commitment, carrying value | 199 | 137 |
Credit Card | ||
Loss Contingencies [Line Items] | ||
Unused commitments to extend credit, contractual amount | 365,410 | 363,446 |
Other excluding credit card | ||
Loss Contingencies [Line Items] | ||
Unused commitments to extend credit, contractual amount | 32,631 | 36,454 |
Off-balance sheet lending commitment, carrying value | 156 | 110 |
Advised line of credit | 1,500 | 1,600 |
Letter of credit | ||
Loss Contingencies [Line Items] | ||
Standby letters of credit and commercial letters of credit, contractual amount | 1,442 | 1,574 |
Off-balance sheet lending commitment, carrying value | $ 43 | $ 27 |
Commitments, Contingencies, Guarantees, and Others - Loss Sharing and UK PPI (Detail) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Insurance claims | ||
Loss Contingencies [Line Items] | ||
Loss contingency accrual | $ 76 | $ 188 |
Loss contingency, period increase (decrease) | 0 | |
Loss contingency, estimate beyond reserve | 50 | |
Loss sharing agreements | ||
Loss Contingencies [Line Items] | ||
Guarantee obligation | $ 96 | $ 75 |
Commitments, Contingencies, Guarantees, and Others - Litigation (Detail) $ in Millions |
1 Months Ended | 6 Months Ended |
---|---|---|
Oct. 31, 2018
USD ($)
|
Jun. 30, 2020
USD ($)
claim
|
|
Loss Contingencies [Line Items] | ||
Loss contingency, estimate of possible loss | $ 1,000 | |
Anti-money laundering | ||
Loss Contingencies [Line Items] | ||
Litigation settlement paid | $ 100 | |
Cybersecurity Incident [Member] | ||
Loss Contingencies [Line Items] | ||
Number of consumer class action cases filed for Cybersecurity Incident | claim | 73 | |
Penalty to the US Treasury Accrued | $ 80 | |
Pending litigation | Interchange litigation | ||
Loss Contingencies [Line Items] | ||
Litigation settlement, attributable to reporting entity and third party | $ 5,500 | |
United States | Cybersecurity Incident [Member] | ||
Loss Contingencies [Line Items] | ||
Number of consumer class action cases filed for Cybersecurity Incident | claim | 61 | |
Canada | Cybersecurity Incident [Member] | ||
Loss Contingencies [Line Items] | ||
Number of consumer class action cases filed for Cybersecurity Incident | claim | 12 |
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