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Allowance for Credit Losses and Reserve for Unfunded Lending Commitments (Tables)
 6 Months Ended
Jun. 30, 2024
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, 2024 and 2023. Our allowance for credit losses increased by $1.4 billion to $16.6 billion as of June 30, 2024 from December 31, 2023.
Table 5.1: Allowance for Credit Losses and Reserve for Unfunded Lending Commitments Activity
Three Months Ended June 30, 2024
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of March 31, 2024$11,754 $2,088 $1,538 $15,380 
Charge-offs
(2,686)(636)(39)(3,361)
Recoveries(1)
428 283 6 717 
Net charge-offs(2,258)(353)(33)(2,644)
Provision for credit losses
3,545 330 39 3,914 
Allowance build (release) for credit losses(2)
1,287 (23)6 1,270 
Other changes(3)
(1)0 0 (1)
Balance as of June 30, 202413,040 2,065 1,544 16,649 
Reserve for unfunded lending commitments:
Balance as of March 31, 20240 0 134 134 
Provision (benefit) for losses on unfunded lending commitments0 0 (5)(5)
Balance as of June 30, 20240 0 129 129 
Combined allowance and reserve as of June 30, 2024$13,040 $2,065 $1,673 $16,778 
Six Months Ended June 30, 2024
(Dollars in millions)Credit CardConsumer BankingCommercial BankingTotal
Allowance for credit losses:
Balance as of December 31, 2023$11,709 $2,042 $1,545 $15,296 
Charge-offs
(5,260)(1,296)(78)(6,634)
Recoveries(1)
795 563 16 1,374 
Net charge-offs(4,465)(733)(62)(5,260)
Provision for credit losses
5,804 756 61 6,621 
Allowance build (release) for credit losses(2)
1,339 23 (1)1,361 
Other changes(3)
(8)0 0 (8)
Balance as of June 30, 202413,040 2,065 1,544 16,649 
Reserve for unfunded lending commitments:
Balance as of December 31, 20230 0 158 158 
Provision (benefit) for losses on unfunded lending commitments0 0 (29)(29)
Balance as of June 30, 20240 0 129 129 
Combined allowance and reserve as of June 30, 2024$13,040 $2,065 $1,673 $16,778 
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(3)
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(4)
(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 losses
1,448 (52)27 1,423 
Other changes(3)
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 
________
(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)The Walmart Program Termination resulted in an allowance for credit losses build in Domestic Card of $826 million in the second quarter of 2024.
(3)Primarily represents foreign currency translation adjustments in the three and six months ended June 30, 2024 and the three months ended June 30, 2023 and the initial allowance for purchased credit-deteriorated (“PCD”) loans in the six months ended June 30, 2023. The initial allowance of PCD loans was $0 million and $32 million for the six months ended June 30, 2024 and 2023, respectively.
(4)Impact from the adoption of ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings (“TDR”) 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, 2024 and December 31, 2023.
Table 4.3: Credit Card Delinquency Status
June 30, 2024December 31, 2023
(Dollars in millions)Revolving LoansRevolving Loans Converted to TermTotalRevolving LoansRevolving Loans Converted to TermTotal
Credit Card:
Domestic credit card:
Current
$140,576 $402 $140,978 $140,521 $339 $140,860 
30-59 days
1,743 27 1,770 1,940 28 1,968 
60-89 days
1,333 17 1,350 1,454 17 1,471 
Greater than 90 days
2,940 27 2,967 3,339 28 3,367 
Total domestic credit card146,592 473 147,065 147,254 412 147,666 
International card businesses:
Current
6,470 36 6,506 6,521 31 6,552 
30-59 days
109 5 114 112 4 116 
60-89 days
66 3 69 72 4 76 
Greater than 90 days
136 5 141 132 5 137 
Total international card businesses6,781 49 6,830 6,837 44 6,881 
Total credit card$153,373 $522 $153,895 $154,091 $456 $154,547 
The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of June 30, 2024 and December 31, 2023. We present our auto loan portfolio by Fair Isaac Corporation (“FICO”) scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming.
Table 4.4: Consumer Banking Portfolio by Vintage Year
June 30, 2024
Term Loans by Vintage Year
(Dollars in millions)20242023202220212020PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Auto—At origination FICO scores:(1)
Greater than 660$8,444 $10,154 $10,305 $7,455 $2,227 $823 $39,408 $0 $0 $39,408 
621-6602,848 4,175 3,639 2,625 974 452 14,713 0 0 14,713 
620 or below3,912 5,785 4,548 3,362 1,729 928 20,264 0 0 20,264 
Total auto15,204 20,114 18,492 13,442 4,930 2,203 74,385 0 0 74,385 
Retail banking—Delinquency status:
Current85 80 94 55 57 513 884 355 4 1,243 
30-59 days0 0 0 0 0 14 14 8 0 22 
60-89 days0 0 0 0 0 1 1 3 0 4 
Greater than 90 days1 0 0 0 1 4 6 2 1 9 
Total retail banking86 80 94 55 58 532 905 368 5 1,278 
Total consumer banking$15,290 $20,194 $18,586 $13,497 $4,988 $2,735 $75,290 $368 $5 $75,663 
December 31, 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$12,219 $12,593 $9,505 $3,124 $1,213 $309 $38,963 $0 $0 $38,963 
621-6604,863 4,432 3,346 1,337 592 192 14,762 0 0 14,762 
620 or below6,647 5,539 4,283 2,349 1,131 401 20,350 0 0 20,350 
Total auto23,729 22,564 17,134 6,810 2,936 902 74,075 0 0 74,075 
Retail banking—Delinquency status:
Current98 157 57 65 117 468 962 363 4 1,329 
30-59 days1 0 1 1 0 1 4 11 0 15 
60-89 days0 0 0 0 0 1 1 2 0 3 
Greater than 90 days0 0 0 0 0 8 8 6 1 15 
Total retail banking99 157 58 66 117 478 975 382 5 1,362 
Total consumer banking$23,828 $22,721 $17,192 $6,876 $3,053 $1,380 $75,050 $382 $5 $75,437 
__________
(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, 2024 and December 31, 2023. The internal risk rating status includes all past due loans, both performing and nonperforming.
Table 4.5: Commercial Banking Portfolio by Internal Risk Ratings
June 30, 2024
Term Loans by Vintage Year
(Dollars in millions)20242023202220212020PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Internal risk rating:(1)
Commercial and multifamily real estate
Noncriticized$1,134 $2,511 $3,821 $2,245 $914 $4,974 $15,599 $12,499 $25 $28,123 
Criticized performing72 60 1,555 713 217 1,351 3,968 221 98 4,287 
Criticized nonperforming12 10 25 106 0 261 414 8 0 422 
Total commercial and multifamily real estate1,218 2,581 5,401 3,064 1,131 6,586 19,981 12,728 123 32,832 
Commercial and industrial
Noncriticized2,674 6,610 10,576 6,008 3,018 7,547 36,433 15,082 57 51,572 
Criticized performing30 92 750 747 173 576 2,368 941 43 3,352 
Criticized nonperforming31 75 121 23 181 168 599 273 0 872 
Total commercial and industrial2,735 6,777 11,447 6,778 3,372 8,291 39,400 16,296 100 55,796 
Total commercial banking$3,953 $9,358 $16,848 $9,842 $4,503 $14,877 $59,381 $29,024 $223 $88,628 
December 31, 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$3,068 $4,665 $2,773 $1,019 $2,104 $3,670 $17,299 $12,565 $25 $29,889 
Criticized performing148 1,494 706 284 463 904 3,999 133 0 4,132 
Criticized nonperforming65 26 124 0 47 163 425 0 0 425 
Total commercial and multifamily real estate3,281 6,185 3,603 1,303 2,614 4,737 21,723 12,698 25 34,446 
Commercial and industrial
Noncriticized6,909 11,935 6,994 3,566 2,359 5,117 36,880 14,822 167 51,869 
Criticized performing353 706 655 237 348 349 2,648 1,189 0 3,837 
Criticized nonperforming13 53 30 18 123 68 305 31 0 336 
Total commercial and industrial7,275 12,694 7,679 3,821 2,830 5,534 39,833 16,042 167 56,042 
Total commercial banking$10,556 $18,879 $11,282 $5,124 $5,444 $10,271 $61,556 $28,740 $192 $90,488 
__________
(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, 2024.
Table 5.2: Gross Charge-Offs by Vintage Year
Six Months Ended June 30, 2024
Term Loans by Vintage Year
(Dollars in millions)20242023202220212020PriorTotal Term LoansRevolving LoansRevolving Loans Converted to TermTotal
Credit Card
Domestic credit cardN/AN/AN/AN/AN/AN/AN/A$4,951 $57 $5,008 
International card businessN/AN/AN/AN/AN/AN/AN/A245 7 252 
Total credit cardN/AN/AN/AN/AN/AN/AN/A5,196 64 5,260 
Consumer Banking
Auto$18 $293 $420 $309 $126 $91 $1,257 0 0 1,257 
Retail banking0 0 0 0 0 2 2 37 0 39 
Total consumer banking18 293 420 309 126 93 1,259 37 0 1,296 
Commercial Banking
Commercial and multifamily real estate0 0 4 0 0 38 42 0 0 42 
Commercial and industrial0 0 19 5 8 4 36 0 0 36 
Total commercial banking0 0 23 5 8 42 78 0 0 78 
Total$18 $293 $443 $314 $134 $135 $1,337 $5,233 $64 $6,634 
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, 2024 and 2023.
Table 5.3: Summary of Credit Card Partnership Loss Sharing Arrangements Impacts
Three Months Ended June 30,
(Dollars in millions)20242023
Estimated reimbursements from partners, beginning of period$2,075 $1,841 
Amounts due from partners for charged off loans(253)(231)
Change in estimated partner reimbursements that (increased) decreased provision for credit losses
(612)298 
Estimated reimbursements from partners, end of period$1,210 $1,908 
Six Months Ended June 30,
(Dollars in millions)20242023
Estimated reimbursements from partners, beginning of period$2,014 $1,558 
Amounts due from partners for charged off loans(577)(432)
Change in estimated partner reimbursements that (increased) decreased provision for credit losses
(227)782 
Estimated reimbursements from partners, end of period$1,210 $1,908