Bank Loans and Related Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2019

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:

March 31, 2019	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)	$	10,354	$	22	$	—	$	14	$	36	$	10,390	$	14	$	10,376
HELOCs (1,2)	1,380		4		2		8		14		1,394		5		1,389
Pledged asset lines	4,571		4		1		—		5		4,576		—		4,576
Other	171		—		—		—		—		171		2		169
Total bank loans	$	16,476	$	30	$	3	$	22	$	55	$	16,531	$	21	$	16,510
December 31, 2018
First Mortgages (1,2)	$	10,349	$	21	$	2	$	12	$	35	$	10,384	$	14	$	10,370
HELOCs (1,2)	1,493		3		1		8		12		1,505		5		1,500
Pledged asset lines	4,558		3		—		—		3		4,561		—		4,561
Other	180		—		—		—		—		180		2		178
Total bank loans	$	16,580	$	27	$	3	$	20	$	50	$	16,630	$	21	$	16,609

⁽¹⁾ First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $72 million and $73 million at March 31, 2019 and December 31, 2018, respectively.

⁽²⁾ At March 31, 2019 and December 31, 2018, 47% 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 March 31, 2019 or December 31, 2018.

Changes in Allowance for Loan Losses

Changes in the allowance for loan losses were as follows:

	March 31, 2019										March 31, 2018
Three Months Ended	First Mortgages		HELOCs			Other		Total (1)			First Mortgages		HELOCs			Other		Total (1)
Balance at beginning of period	$	14	$	5		$	2	$	21		$	16	$	8		$	2	$	26
Charge-offs	—		—			—		—			—		—			—		—
Recoveries	—		1			—		1			—		—			—		—
Provision for loan losses	—		(1		)	—		(1		)	1		(1		)	1		1
Balance at end of period	$	14	$	5		$	2	$	21		$	17	$	7		$	3	$	27

⁽¹⁾ All pledged asset lines (PALs) were fully collateralized by securities with fair values in excess of borrowings as of each period presented.

Impaired Bank Loan Related Assets

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

	March 31, 2019		December 31, 2018
Nonaccrual loans (1)	$	22	$	21
Other real estate owned (2)	4		3
Total nonperforming assets	26		24
Troubled debt restructurings	3		4
Total impaired assets	$	29	$	28

⁽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:

March 31, 2019	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,322	777	0.07	%
>70% – <90%	1,065		771	0.33	%
>90% – <100%	2		691	—
>100%	1		756	—
Total	$	10,390	776	0.09	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,302	770	0.18	%
>70% – <90%	83		752	0.94	%
>90% – <100%	6		739	0.49	%
>100%	3		695	5.98	%
Total	$	1,394	769	0.23	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,576	765	—

December 31, 2018	Balance		Weighted Average Updated FICO	Percent of Loans that are on Nonaccrual Status
First Mortgages
Estimated Current LTV
<70%	$	9,396	776	0.04	%
>70% – <90%	985		769	0.41	%
>90% – <100%	2		717	—
>100%	1		753	—
Total	$	10,384	775	0.07	%
HELOCs
Estimated Current LTV (1)
<70%	$	1,416	770	0.13	%
>70% – <90%	80		752	0.60	%
>90% – <100%	6		729	3.36	%
>100%	3		702	—
Total	$	1,505	769	0.17	%
Pledged asset lines
Weighted-Average LTV (1)
=70%	$	4,561	766	—

⁽¹⁾ Represents the LTV for the full line of credit (drawn and undrawn).

March 31, 2019	First Mortgages		HELOCs
Year of origination
Pre-2015	$	2,202	$	1,036
2015	1,007		98
2016	2,539		90
2017	2,319		96
2018	1,941		68
2019	382		6
Total	$	10,390	$	1,394
Origination FICO
<620	$	4	$	—
620 – 679	80		7
680 – 739	1,629		267
>740	8,677		1,120
Total	$	10,390	$	1,394
Origination LTV
<70%	$	7,817	$	987
>70% – <90%	2,568		401
>90% – <100%	5		6
Total	$	10,390	$	1,394

December 31, 2018	First Mortgages		HELOCs
Year of origination
Pre-2015	$	2,387	$	1,140
2015	1,050		106
2016	2,606		95
2017	2,366		99
2018	1,975		65
Total	$	10,384	$	1,505
Origination FICO
<620	$	5	$	—
620 – 679	83		8
680 – 739	1,626		282
>740	8,670		1,215
Total	$	10,384	$	1,505
Origination LTV
<70%	$	7,815	$	1,064
>70% – <90%	2,564		434
>90% – <100%	5		7
Total	$	10,384	$	1,505

Converting to Amortizing Loans

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

March 31, 2019	Balance
Converted to an amortizing loan by period end	$	640
Within 1 year	66
> 1 year – 3 years	98
> 3 years – 5 years	173
> 5 years	417
Total	$	1,394