Bank Loans and Related Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Composition of Bank Loans and Delinquency Analysis by Loan Segment

The composition of bank loans and delinquency analysis by loan type is as follows:

June 30, 2018	Current		30-59 days past due		60-89 days past due		≥90 days past due and other nonaccrual loans (3)		Total past due and other nonaccrual loans		Total loans		Allowance for loan losses		Total bank loans – net
First Mortgages (1,2)	$	10,126	$	15	$	2	$	15	$	32	$	10,158	$	17	$	10,141
HELOCs (1,2)	1,686		2		1		9		12		1,698		7		1,691
Pledged asset lines	4,558		11		1		—		12		4,570		—		4,570
Other	169		—		—		—		—		169		2		167
Total bank loans	$	16,539	$	28	$	4	$	24	$	56	$	16,595	$	26	$	16,569
December 31, 2017
First Mortgages (1,2)	$	9,983	$	14	$	2	$	17	$	33	$	10,016	$	16	$	10,000
HELOCs (1,2)	1,928		—		3		12		15		1,943		8		1,935
Pledged asset lines	4,361		4		4		—		8		4,369		—		4,369
Other	176		—		—		—		—		176		2		174
Total bank loans	$	16,448	$	18	$	9	$	29	$	56	$	16,504	$	26	$	16,478

⁽¹⁾ First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $74 million and $77 million at June 30, 2018 and December 31, 2017, respectively.

⁽²⁾ At June 30, 2018 and December 31, 2017, 47% and 48%, respectively, of the First Mortgage and HELOC portfolios were concentrated in California. These loans have performed in a manner consistent with the portfolio as a whole.

⁽³⁾ There were no loans accruing interest that were contractually 90 days or more past due at June 30, 2018 or December 31, 2017.

Changes in Allowance for Loan Losses

Changes in the allowance for loan losses were as follows:

Three Months Ended	June 30, 2018											June 30, 2017
	First Mortgages		HELOCs			Other			Total (1)			First Mortgages			HELOCs			Other		Total (1)
Balance at beginning of period	$	17	$	7		$	3		$	27		$	17		$	8		$	1	$	26
Charge-offs	—		—			(1		)	(1		)	(1		)	(1		)	—		(2		)
Recoveries	—		1			—			1			1			1			—		2
Provision for loan losses	—		(1		)	—			(1		)	—			—			—		—
Balance at end of period	$	17	$	7		$	2		$	26		$	17		$	8		$	1	$	26

Six Months Ended	June 30, 2018											June 30, 2017
	First Mortgages		HELOCs			Other			Total (1)			First Mortgages			HELOCs			Other		Total (1)
Balance at beginning of period	$	16	$	8		$	2		$	26		$	17		$	8		$	1	$	26
Charge-offs	—		—			(1		)	(1		)	(1		)	(1		)	—		(2		)
Recoveries	—		1			—			1			1			1			—		2
Provision for loan losses	1		(2		)	1			—			—			—			—		—
Balance at end of period	$	17	$	7		$	2		$	26		$	17		$	8		$	1	$	26

⁽¹⁾ All pledged asset lines (PALs) were fully collateralized by securities with fair values in excess of borrowings at June 30, 2018 and December 31, 2017.

Impaired Bank Loan Related Assets

A summary of impaired bank loan related assets is as follows:

	June 30, 2018		December 31, 2017
Nonaccrual loans (1)	$	24	$	28
Other real estate owned (2)	2		3
Total nonperforming assets	26		31
Troubled debt restructurings	6		11
Total impaired assets	$	32	$	42

⁽¹⁾ Nonaccrual loans include nonaccrual troubled debt restructurings.

⁽²⁾ Included in other assets on the condensed consolidated balance sheets.

Credit Quality Indicators of Bank Loan Portfolio

The credit quality indicators of the Company’s bank loan portfolio are detailed below:

June 30, 2018	Balance		Weighted Average Updated FICO	Utilization Rate (1)		Percent of Loans that are on Nonaccrual Status
First Mortgages:
Estimated Current LTV
<70%	$	9,287	776	N/A		0.06	%
>70% – <90%	865		770	N/A		0.42	%
>90% – <100%	4		696	N/A		8.72	%
>100%	2		729	N/A		10.14	%
Total	$	10,158	776	N/A		0.10	%
HELOCs:
Estimated Current LTV (2)
<70%	$	1,580	772	31	%	0.11	%
>70% – <90%	105		754	48	%	1.04	%
>90% – <100%	8		741	72	%	2.39	%
>100%	5		714	76	%	2.03	%
Total	$	1,698	771	31	%	0.19	%
Pledged asset lines:
Weighted-Average LTV (2)
=70%	$	4,570	766	38	%	—

December 31, 2017	Balance		Weighted Average Updated FICO	Utilization Rate (1)		Percent of Loans that are on Nonaccrual Status
First Mortgages:
Estimated Current LTV
<70%	$	9,046	775	N/A		0.09	%
>70% – <90%	961		769	N/A		0.46	%
>90% – <100%	5		714	N/A		10.49	%
>100%	4		713	N/A		6.23	%
Total	$	10,016	775	N/A		0.14	%
HELOCs:
Estimated Current LTV (2)
<70%	$	1,773	772	32	%	0.18	%
>70% – <90%	148		755	47	%	0.84	%
>90% – <100%	14		742	64	%	2.85	%
>100%	8		718	72	%	4.91	%
Total	$	1,943	770	33	%	0.27	%
Pledged asset lines:
Weighted-Average LTV (2)
=70%	$	4,369	765	41	%	—

⁽¹⁾ The Utilization Rate is calculated using the outstanding balance divided by the associated total line of credit.

⁽²⁾ Represents the LTV for the full line of credit (drawn and undrawn).

N/A Not applicable.

June 30, 2018	First Mortgages		HELOCs
Year of origination
Pre-2014	$	2,313	$	1,252
2014	461		99
2015	1,121		113
2016	2,734		101
2017	2,484		101
2018	1,045		32
Total	$	10,158	$	1,698
Origination FICO
<620	$	5	$	—
620 – 679	84		9
680 – 739	1,574		321
>740	8,495		1,368
Total	$	10,158	$	1,698
Origination LTV
<70%	$	7,677	$	1,194
>70% – <90%	2,476		496
>90% – <100%	5		8
Total	$	10,158	$	1,698

December 31, 2017	First Mortgages		HELOCs
Year of origination
Pre-2014	$	2,804	$	1,496
2014	530		116
2015	1,218		128
2016	2,886		111
2017	2,578		92
Total	$	10,016	$	1,943
Origination FICO
<620	$	6	$	1
620 – 679	89		10
680 – 739	1,569		365
>740	8,352		1,567
Total	$	10,016	$	1,943
Origination LTV
<70%	$	7,569	$	1,360
>70% – <90%	2,441		574
>90% – <100%	6		9
Total	$	10,016	$	1,943

Converting to Amortizing Loans

The following table presents when current outstanding HELOCs will convert to amortizing loans:

June 30, 2018	Balance
Converted to an amortizing loan by period end	$	537
Within 1 year	342
> 1 year – 3 years	152
> 3 years – 5 years	155
> 5 years	512
Total	$	1,698