Bank Loans and Related Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2023

Composition of Bank Loans and Delinquency Analysis by Loan Segment

The composition of bank loans and delinquency analysis by portfolio segment and class of financing receivable is as follows:


December 31, 2023	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 credit losses		Total bank loans – net
Residential real estate:
First Mortgages (1,2)	$	26,111	$	33	$	2	$	7	$	42	$	26,153	$	32	$	26,121
HELOCs (1,2)	473		1		1		4		6		479		2		477
Total residential real estate	26,584		34		3		11		48		26,632		34		26,598
Pledged asset lines	13,533		11		—		4		15		13,548		—		13,548
Other	297		—		—		—		—		297		4		293
Total bank loans	$	40,414	$	45	$	3	$	15	$	63	$	40,477	$	38	$	40,439

December 31, 2022
Residential real estate:
First Mortgages (1,2)	$	25,157	$	25	$	2	$	14	$	41	$	25,198	$	66	$	25,132
HELOCs (1,2)	590		2		—		5		7		597		4		593
Total residential real estate	25,747		27		2		19		48		25,795		70		25,725
Pledged asset lines	14,584		4		—		4		8		14,592		—		14,592
Other	191		—		—		—		—		191		3		188
Total bank loans	$	40,522	$	31	$	2	$	23	$	56	$	40,578	$	73	$	40,505

(1) First Mortgages and HELOCs include unamortized premiums and discounts and direct origination costs of $100 million and $98 million at December 31, 2023 and 2022, respectively.

(2) At both December 31, 2023 and 2022, 43% 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 December 31, 2023 or 2022.

Changes in Allowance for Credit Losses on Bank Loans

Changes in the allowance for credit losses on bank loans were as follows:


December 31, 2023	First Mortgages		HELOCs		Total residential real estate		Pledged asset lines		Other		Total
Balance at beginning of year	$	66	$	4	$	70	$	—	$	3	$	73

Charge-offs	—		—		—		—		—		—
Recoveries	—		—		—		—		—		—
Provision for credit losses	(34)		(2)		(36)		—		1		(35)
Balance at end of year	$	32	$	2	$	34	$	—	$	4	$	38

December 31, 2022
Balance at beginning of year	$	13	$	2	$	15	$	—	$	3	$	18

Charge-offs	—		—		—		(4)		—		(4)
Recoveries	—		1		1		—		—		1
Provision for credit losses	53		1		54		4		—		58
Balance at end of year	$	66	$	4	$	70	$	—	$	3	$	73

December 31, 2021
Balance at beginning of year	$	22	$	5	$	27	$	—	$	3	$	30

Charge-offs	—		—		—		—		(1)		(1)
Recoveries	—		1		1		—		—		1
Provision for credit losses	(9)		(4)		(13)		—		1		(12)
Balance at end of year	$	13	$	2	$	15	$	—	$	3	$	18

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


December 31,	2023		2022
Nonaccrual loans (1)	$	15	$	23
Other real estate owned (2)	—		2


Total nonperforming assets	$	15	$	25

(1) Nonaccrual loans include nonaccrual troubled debt restructurings recorded prior to the adoption of ASU 2022-02.

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

Credit Quality Indicators of Bank Loan Portfolio

The credit quality indicators of the Company’s First Mortgages and HELOCs are detailed below:


	First Mortgages Amortized Cost Basis by Origination Year
December 31, 2023	2023			2022			2021			2020			2019			pre-2019			Total First Mortgages			Revolving HELOCs amortized cost basis			HELOCs converted to term loans			Total HELOCs
Origination FICO
<620	$	—		$	2		$	1		$	1		$	—		$	1		$	5		$	—		$	—		$	—
620 – 679	4			27			30			20			2			13			96			—			1			1
680 – 739	299			782			1,160			395			106			188			2,930			50			38			88
≥740	2,391			5,258			10,439			3,558			743			733			23,122			261			129			390
Total	$	2,694		$	6,069		$	11,630		$	3,974		$	851		$	935		$	26,153		$	311		$	168		$	479
Origination LTV
≤70%	$	1,818		$	4,492		$	10,078		$	3,306		$	687		$	695		$	21,076		$	279		$	117		$	396
>70% – ≤90%	876			1,577			1,552			668			164			238			5,075			32			50			82
>90% – ≤100%	—			—			—			—			—			2			2			—			1			1
Total	$	2,694		$	6,069		$	11,630		$	3,974		$	851		$	935		$	26,153		$	311		$	168		$	479
Updated FICO
<620	$	4		$	15		$	19		$	8		$	2		$	15		$	63		$	2		$	5		$	7
620 – 679	46			77			87			38			11			39			298			6			10			16
680 – 739	265			575			984			316			61			108			2,309			48			26			74
≥740	2,379			5,402			10,540			3,612			777			773			23,483			255			127			382
Total	$	2,694		$	6,069		$	11,630		$	3,974		$	851		$	935		$	26,153		$	311		$	168		$	479
Estimated Current LTV (1)
≤70%	$	1,853		$	4,855		$	11,341		$	3,960		$	850		$	931		$	23,790		$	308		$	167		$	475
>70% – ≤90%	841			1,185			289			14			1			4			2,334			3			1			4
>90% – ≤100%	—			28			—			—			—			—			28			—			—			—
>100%	—			1			—			—			—			—			1			—			—			—
Total	$	2,694		$	6,069		$	11,630		$	3,974		$	851		$	935		$	26,153		$	311		$	168		$	479
Gross charge-offs	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Percent of Loans on Nonaccrual Status	0.01		%	0.02		%	0.01		%	0.01		%	0.01		%	0.36		%	0.03		%	0.07		%	2.40		%	0.84		%

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


	First Mortgages Amortized Cost Basis by Origination Year
December 31, 2022	2022			2021			2020			2019			pre-2019			Total First Mortgages			Revolving HELOCs amortized cost basis			HELOCs converted to term loans			Total HELOCs
Origination FICO
<620	$	3		$	1		$	—		$	—		$	1		$	5		$	—		$	—		$	—
620 – 679	28			31			21			2			15			97			—			2			2
680 – 739	820			1,224			430			116			243			2,833			59			47			106
≥740	5,593			11,037			3,819			811			1,003			22,263			323			166			489
Total	$	6,444		$	12,293		$	4,270		$	929		$	1,262		$	25,198		$	382		$	215		$	597
Origination LTV
≤70%	$	4,771		$	10,641		$	3,549		$	749		$	940		$	20,650		$	332		$	153		$	485
>70% – ≤90%	1,673			1,652			721			180			320			4,546			50			61			111
>90% – ≤100%	—			—			—			—			2			2			—			1			1
Total	$	6,444		$	12,293		$	4,270		$	929		$	1,262		$	25,198		$	382		$	215		$	597
Updated FICO
<620	$	11		$	12		$	7		$	2		$	13		$	45		$	2		$	5		$	7
620 – 679	87			127			42			10			43			309			6			10			16
680 – 739	711			1,079			378			89			161			2,418			52			35			87
≥740	5,635			11,075			3,843			828			1,045			22,426			322			165			487
Total	$	6,444		$	12,293		$	4,270		$	929		$	1,262		$	25,198		$	382		$	215		$	597
Estimated Current LTV (1)
≤70%	$	4,574		$	11,751		$	4,255		$	928		$	1,257		$	22,765		$	380		$	214		$	594
>70% – ≤90%	1,845			542			15			1			5			2,408			2			1			3
>90% – ≤100%	25			—			—			—			—			25			—			—			—
>100%	—			—			—			—			—			—			—			—			—
Total	$	6,444		$	12,293		$	4,270		$	929		$	1,262		$	25,198		$	382		$	215		$	597
Percent of Loans on Nonaccrual Status	0.02		%	0.03		%	0.09		%	0.02		%	0.43		%	0.06		%	0.34		%	1.90		%	0.84		%

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

Convert to Amortizing Loans

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


December 31, 2023	Balance
Converted to an amortizing loan by period end (1)	$	168
Within 1 year	18
> 1 year – 3 years	41
> 3 years – 5 years	47
> 5 years	205
Total	$	479

(1) Includes $21 million of HELOCs converted to amortizing loans during the year ended December 31, 2023.