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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables)
 6 Months Ended
Jun. 30, 2023
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, 2023 and 2022. Our allowance for credit losses increased by $1.4 billion to $14.6 billion as of June 30, 2023 from December 31, 2022.
Table 4.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended June 30, 2023
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of March 31, 2023$10,410 $2,205 $1,703 $14,318 
Charge-offs
(1,868)(526)(378)(2,772)
Recoveries(1)
340 247 0 587 
Net charge-offs(1,528)(279)(378)(2,185)
Provision for credit losses2,084 259 160 2,503 
Allowance build (release) for credit losses556 (20)(218)318 
Other changes(2)
10 0 0 10 
Balance as of June 30, 202310,976 2,185 1,485 14,646 
Reserve for unfunded lending commitments:
Balance as of March 31, 20230 0 211 211 
Provision (benefit) for losses on unfunded lending commitments0 0 (14)(14)
Balance as of June 30, 20230 0 197 197 
Combined allowance and reserve as of June 30, 2023$10,976 $2,185 $1,682 $14,843 
Six Months Ended June 30, 2023
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of December 31, 2022$9,545 $2,237 $1,458 $13,240 
Cumulative effects of accounting standards adoption(3)
(63)0 0 (63)
Balance as of January 1, 20239,482 2,237 1,458 13,177 
Charge-offs
(3,556)(1,057)(402)(5,015)
Recoveries(1)
659 471 3 1,133 
Net charge-offs(2,897)(586)(399)(3,882)
Provision for credit losses4,345 534 426 5,305 
Allowance build (release) for credit losses1,448 (52)27 1,423 
Other changes(2)
46 0 0 46 
Balance as of June 30, 202310,976 2,185 1,485 14,646 
Reserve for unfunded lending commitments:
Balance as of December 31, 20220 0 218 218 
Provision (benefit) for losses on unfunded lending commitments0 0 (21)(21)
Balance as of June 30, 20230 0 197 197 
Combined allowance and reserve as of June 30, 2023$10,976 $2,185 $1,682 $14,843 
Three Months Ended June 30, 2022
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of March 31, 2022$8,280 $1,902 $1,126 $11,308 
Charge-offs(1,009)(331)(43)(1,383)
Recoveries(1)
331 195 12 538 
Net charge-offs(678)(136)(31)(845)
Provision for credit losses581 281 183 1,045 
Allowance build (release) for credit losses(97)145 152 200 
Other changes(2)
(17)0 0 (17)
Balance as of June 30, 20228,166 2,047 1,278 11,491 
Reserve for unfunded lending commitments:
Balance as of March 31, 20230 0 200 200 
Provision for losses on unfunded lending commitments0 0 39 39 
Balance as of June 30, 20220 0 239 239 
Combined allowance and reserve as of June 30, 2022$8,166 $2,047 $1,517 $11,730 
Six Months Ended June 30, 2022
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of December 31, 2021$8,345 $1,918 $1,167 $11,430 
Charge-offs
(1,964)(680)(60)(2,704)
Recoveries(1)
679 398 15 1,092 
Net charge-offs(1,285)(282)(45)(1,612)
Provision for credit losses1,126 411 156 1,693 
Allowance build (release) for credit losses(159)129 111 81 
Other changes(2)
(20)0 0 (20)
Balance as of June 30, 20228,166 2,047 1,278 11,491 
Reserve for unfunded lending commitments:
Balance as of December 31, 20210 0 165 165 
Provision for losses on unfunded lending commitments0 0 74 74 
Balance as of June 30, 20220 0 239 239 
Combined allowance and reserve as of June 30, 2022$8,166 $2,047 $1,517 $11,730 
__________
(1)The amount and timing of recoveries are 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)Primarily represents the initial allowance for purchased credit-deteriorated loans and foreign currency translation adjustments. The initial allowance of purchased credit-deteriorated loans was $32 million for the six months ended June 30, 2023. There were no purchased credit-deteriorated loans acquired in the three months ended June 30, 2023.
(3)Impact from the adoption of ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures as of January 1, 2023.
Credit Quality Indicator
The table below presents our credit card portfolio by delinquency status as of June 30, 2023 and December 31, 2022.
Table 3.3: Credit Card Delinquency Status
June 30, 2023December 31, 2022
(Dollars in millions)Revolving LoansRevolving Loans Converted to TermTotalRevolving LoansRevolving Loans Converted to TermTotal
Credit Card:
Domestic credit card:
Current
$130,591 $295 $130,886 $126,811 $255 $127,066 
30-59 days
1,535 19 1,554 1,388 17 1,405 
60-89 days
1,148 12 1,160 964 11 975 
Greater than 90 days
2,356 19 2,375 2,121 14 2,135 
Total domestic credit card135,630 345 135,975 131,284 297 131,581 
International card businesses:
Current
6,209 23 6,232 5,866 29 5,895 
30-59 days
101 2 103 83 3 86 
60-89 days
58 1 59 55 3 58 
Greater than 90 days
121 1 122 106 4 110 
Total international card businesses6,489 27 6,516 6,110 39 6,149 
Total credit card$142,119 $372 $142,491 $137,394 $336 $137,730 
The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of June 30, 2023 and December 31, 2022. 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 Vintage Year
June 30, 2023
Term Loans by Vintage Year
(Dollars in millions)20232022202120202019PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Auto—At origination FICO scores:(1)
Greater than 660$6,319 $15,029 $11,726 $4,147 $1,828 $695 $39,744 $0 $0 $39,744 
621-6602,632 5,284 4,145 1,756 850 388 15,055 0 0 15,055 
620 or below3,725 6,604 5,320 3,052 1,586 755 21,042 0 0 21,042 
Total auto12,676 26,917 21,191 8,955 4,264 1,838 75,841 0 0 75,841 
Retail banking—Delinquency status:
Current54 150 94 72 123 530 1,023 379 5 1,407 
30-59 days0 3 0 1 0 3 7 7 0 14 
60-89 days0 0 0 0 0 1 1 3 0 4 
Greater than 90 days0 0 0 0 0 9 9 4 1 14 
Total retail banking54 153 94 73 123 543 1,040 393 6 1,439 
Total consumer banking$12,730 $27,070 $21,285 $9,028 $4,387 $2,381 $76,881 $393 $6 $77,280 
December 31, 2022
Term Loans by Vintage Year
(Dollars in millions)20222021202020192018PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Auto—At origination FICO scores:(1)
Greater than 660$17,872 $14,246 $5,354 $2,595 $1,032 $328 $41,427 $0 $0 $41,427 
621-6606,212 5,060 2,257 1,167 513 185 15,394 0 0 15,394 
620 or below7,717 6,501 3,898 2,144 914 378 21,552 0 0 21,552 
Total auto31,801 25,807 11,509 5,906 2,459 891 78,373 0 0 78,373 
Retail banking—Delinquency status:
Current166 128 82 133 127 470 1,106 408 4 1,518 
30-59 days2 1 0 0 0 2 5 8 0 13 
60-89 days0 1 0 0 0 1 2 2 0 4 
Greater than 90 days0 0 0 0 3 8 11 4 2 17 
Total retail banking168 130 82 133 130 481 1,124 422 6 1,552 
Total consumer banking$31,969 $25,937 $11,591 $6,039 $2,589 $1,372 $79,497 $422 $6 $79,925 
__________
(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.
The following table presents our commercial banking portfolio of loans held for investment by internal risk ratings as of June 30, 2023 and December 31, 2022. The internal risk rating status includes all past due loans, both performing and nonperforming.
Table 3.5: Commercial Banking Portfolio by Internal Risk Ratings
June 30, 2023
Term Loans by Vintage Year
(Dollars in millions)20232022202120202019PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Internal risk rating:(1)
Commercial and multifamily real estate
Noncriticized$5,154 $7,819 $2,037 $608 $965 $2,536 $19,119 $13,317 $25 $32,461 
Criticized performing669 1,098 265 142 331 639 3,144 20 0 3,164 
Criticized nonperforming30 64 21 0 30 271 416 0 0 416 
Total commercial and multifamily real estate5,853 8,981 2,323 750 1,326 3,446 22,679 13,337 25 36,041 
Commercial and industrial
Noncriticized7,677 17,297 4,359 2,223 717 2,935 35,208 16,728 186 52,122 
Criticized performing407 763 330 52 260 330 2,142 852 0 2,994 
Criticized nonperforming8 22 43 24 145 97 339 56 0 395 
Total commercial and industrial8,092 18,082 4,732 2,299 1,122 3,362 37,689 17,636 186 55,511 
Total commercial banking$13,945 $27,063 $7,055 $3,049 $2,448 $6,808 $60,368 $30,973 $211 $91,552 
December 31, 2022
Term Loans by Vintage Year
(Dollars in millions)20222021202020192018PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Internal risk rating:(1)
Commercial and multifamily real estate
Noncriticized$9,527 $4,086 $1,161 $1,671 $1,280 $2,898 $20,623 $13,254 $25 $33,902 
Criticized performing814 376 202 412 302 1,061 3,167 113 0 3,280 
Criticized nonperforming101 22 0 13 19 116 271 0 0 271 
Total commercial and multifamily real estate10,442 4,484 1,363 2,096 1,601 4,075 24,061 13,367 25 37,453 
Commercial and industrial
Noncriticized22,105 6,031 2,934 1,809 973 2,658 36,510 17,187 21 53,718 
Criticized performing992 560 156 160 167 76 2,111 964 0 3,075 
Criticized nonperforming196 21 5 87 40 5 354 76 0 430 
Total commercial and industrial23,293 6,612 3,095 2,056 1,180 2,739 38,975 18,227 21 57,223 
Total commercial banking$33,735 $11,096 $4,458 $4,152 $2,781 $6,814 $63,036 $31,594 $46 $94,676 
__________
(1)Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities.
The table below presents gross charge-offs for loans held for investment by vintage year during the six months ended June 30, 2023.
Table 4.2: Gross Charge-Offs by Vintage Year
Six Months Ended June 30, 2023
Term Loans by Vintage Year
(Dollars in millions)20232022202120202019PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Credit Card
Domestic credit cardN/AN/AN/AN/AN/AN/AN/A$3,310 $35 $3,345 
International card businessN/AN/AN/AN/AN/AN/AN/A205 6 211 
Total credit cardN/AN/AN/AN/AN/AN/AN/A3,515 41 3,556 
Consumer Banking
Auto$13 $344 $341 $167 $96 $63 $1,024 0 0 1,024 
Retail banking0 0 1 0 0 0 1 32 0 33 
Total consumer banking13 344 342 167 96 63 1,025 32 0 1,057 
Commercial Banking
Commercial and multifamily real estate0 29 46 22 98 185 380 0 0 380 
Commercial and industrial2 2 0 0 0 3 7 15 0 22 
Total commercial banking2 31 46 22 98 188 387 15 0 402 
Total$15 $375 $388 $189 $194 $251 $1,412 $3,562 $41 $5,015 
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, 2023 and 2022.
Table 4.3: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
Three Months Ended June 30,
(Dollars in millions)20232022
Estimated reimbursements from partners, beginning of period$1,841 $1,366 
Amounts due from partners for charged off loans(231)(119)
Change in estimated partner reimbursements that decreased provision for credit losses298 55 
Estimated reimbursements from partners, end of period$1,908 $1,302 
Six Months Ended June 30,
(Dollars in millions)20232022
Estimated reimbursements from partners, beginning of period$1,558 $1,450 
Amounts due from partners for charged off loans(432)(226)
Change in estimated partner reimbursements that decreased provision for credit losses(1)
782 78 
Estimated reimbursements from partners, end of period$1,908 $1,302 
__________
(1)Includes adjustments for purchased credit-deteriorated (“PCD”) loans acquired in the first quarter of 2023.