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Receivables (Tables)
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3 Months Ended |
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Mar. 31, 2013
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| Text Block [Abstract] |
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| Receivables |
Receivables consisted of the following: | | | | | | | | |
| March 31, 2013 | | December 31, 2012 | | (in millions) | Real estate secured: | | | | First lien | $ | 28,461 |
| | $ | 29,301 |
| Second lien | 3,469 |
| | 3,638 |
| Total real estate secured receivables | 31,930 |
| | 32,939 |
| HSBC acquisition purchase accounting fair value adjustments | 41 |
| | 43 |
| Accrued finance income | 886 |
| | 909 |
| Credit loss reserve for receivables | (4,313 | ) | | (4,607 | ) | Total receivables, net | $ | 28,544 |
| | $ | 29,284 |
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| Aging Analysis of Past Due Loans |
The following tables summarize the past due status of our receivables at March 31, 2013 and December 31, 2012. The aging of past due amounts is determined based on the contractual delinquency status of payments made under the receivable. An account is generally considered to be contractually delinquent when payments have not been made in accordance with the loan terms. Delinquency status may be affected by customer account management policies and practices such as re-age or modification. Additionally, delinquency status is also impacted by payment requirements which vary between servicing platforms. | | | | | | | | | | | | | | | | | | | | | | | | | | Days Past Due | | Total Past Due | | | | Total Receivables(1) | March 31, 2013 | 1 – 29 days | | 30 – 89 days | | 90+ days | | Current | | | (in millions) | Real estate secured: | | | | | | | | | | | | First lien | $ | 4,264 |
| | $ | 2,314 |
| | $ | 2,649 |
| | $ | 9,227 |
| | $ | 19,234 |
| | $ | 28,461 |
| Second lien | 573 |
| | 254 |
| | 207 |
| | 1,034 |
| | 2,435 |
| | 3,469 |
| Total real estate secured receivables(2) | $ | 4,837 |
| | $ | 2,568 |
| | $ | 2,856 |
| | $ | 10,261 |
| | $ | 21,669 |
| | $ | 31,930 |
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| | | | | | | | | | | | | | | | | | | | | | | | | | Days Past Due | | Total Past Due | | | | Total Receivables(1) | December 31, 2012 | 1 – 29 days | | 30 – 89 days | | 90+ days | | Current | | | (in millions) | Real estate secured: | | | | | | | | | | | | First lien | $ | 4,644 |
| | $ | 2,759 |
| | $ | 2,748 |
| | $ | 10,151 |
| | $ | 19,150 |
| | $ | 29,301 |
| Second lien | 652 |
| | 316 |
| | 239 |
| | 1,207 |
| | 2,431 |
| | 3,638 |
| Total real estate secured receivables(2) | $ | 5,296 |
| | $ | 3,075 |
| | $ | 2,987 |
| | $ | 11,358 |
| | $ | 21,581 |
| | $ | 32,939 |
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| | (1) | The receivable balances included in this table reflects the principal amount outstanding on the loan and certain basis adjustments to the loan such as deferred fees and costs on originated loans, purchase accounting fair value adjustments and premiums or discounts on purchased loans. However, these basis adjustments on the loans are excluded in other presentations regarding delinquent account balances. |
| | (2) | Our real estate secured receivables are currently maintained on two mortgage loan servicing platforms which results in differences relating to how contractual delinquency is measured. In April 2013, we moved all closed-end real estate secured receivables onto one platform which will result in the substantial majority of our real estate secured receivables utilizing the same platform going forward. |
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| Nonaccrual Receivables |
Nonaccrual receivables and nonaccrual receivables held for sale are summarized in the following table. | | | | | | | | | | March 31, 2013 | | December 31, 2012 | | (in millions) | Nonaccrual receivable portfolios: | | | | Real estate secured(1) | $ | 2,894 |
| | $ | 3,032 |
| Receivables held for sale | 2,332 |
| | 2,161 |
| Total nonaccrual receivables | $ | 5,226 |
| | $ | 5,193 |
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| | (1) | At March 31, 2013 and December 31, 2012, nonaccrual real estate secured receivables held for investment include $1.9 billion and $1.7 billion, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell. |
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| Additional Information on Nonaccrual Receivables |
The following table provides additional information on our total nonaccrual receivables: | | | | | | | | | Three Months Ended March 31, | 2013 | | 2012 | | (in millions) | Interest income that would have been recorded if the nonaccrual receivable had been current in accordance with contractual terms during the period | $ | 199 |
| | $ | 213 |
| Interest income that was recorded on nonaccrual receivables included in interest income on nonaccrual loans during the period | 14 |
| | 19 |
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| Receivables Classified as Trouble Debt Restructuring Loans |
The following table presents information about receivables and receivables held for sale which as a result of any account management action taken during the three months ended March 31, 2013 and 2012 became classified as TDR Loans. | | | | | | | | | Three Months Ended March 31, | 2013 | | 2012 | | (in millions) | Real estate secured: | | | | First lien | $ | 496 |
| | $ | 1,231 |
| Second lien | 51 |
| | 145 |
| Total real estate secured | 547 |
| | 1,376 |
| Personal non-credit card | 28 |
| | 147 |
| Total(1) | $ | 575 |
| | $ | 1,523 |
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| | (1) | The following summarizes the actions taken during the three months ended March 31, 2013 and 2012 which resulted in the above receivables being classified as a TDR Loan. |
| | | | | | | | | Three Months Ended March 31, | 2013 | | 2012 | | (in millions) | Interest rate modification | $ | 219 |
| | $ | 728 |
| Re-age of past due account | 356 |
| | 795 |
| Total | $ | 575 |
| | $ | 1,523 |
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| TDR Loans |
The following table presents information about receivables and receivables held for sale reported as TDR Loans as of March 31, 2013 and December 31, 2012. | | | | | | | | | | March 31, 2013 | | December 31, 2012 | | (in millions) | TDR Loans:(1)(2)(3) | | | | Real estate secured: | | | | First lien | $ | 14,843 |
| | $ | 14,607 |
| Second lien | 1,177 |
| | 1,205 |
| Total real estate secured(4) | 16,020 |
| | 15,812 |
| Personal non-credit card | 547 |
| | 592 |
| Total TDR Loans(5) | $ | 16,567 |
| | $ | 16,404 |
| | | | | Credit loss reserves for TDR Loans: | | | | Real estate secured: | | | | First lien | $ | 2,953 |
| | $ | 3,104 |
| Second lien | 486 |
| | 523 |
| Total real estate secured | 3,439 |
| | 3,627 |
| Total credit loss reserves for TDR Loans(3)(5) | $ | 3,439 |
| | $ | 3,627 |
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| | (1) | TDR Loans are considered to be impaired loans regardless of accrual status. |
| | (2) | The TDR Loan balances included in the table above reflect the current carrying amount of TDR Loans and includes all basis adjustments on the loan, such as unearned income, unamortized deferred fees and costs on originated loans and premiums or discounts on purchased loans as well as any charge-off recorded in accordance with our existing charge-off policies. Additionally, the carrying amount of TDR Loans classified as held for sale has been reduced by both the lower of amortized cost or fair value adjustment as well as the credit loss reserves associated with these receivables prior to the transfer. The following table reflects the unpaid principal balance of TDR Loans: |
| | | | | | | | | | March 31, 2013 | | December 31, 2012 | | (in millions) | Real estate secured: | | | | First lien | $ | 18,402 |
| | $ | 18,451 |
| Second lien | 1,321 |
| | 1,345 |
| Total real estate secured | 19,723 |
| | 19,796 |
| Personal non-credit card | 1,071 |
| | 1,139 |
| Total TDR Loans | $ | 20,794 |
| | $ | 20,935 |
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| | (3) | At March 31, 2013 and December 31, 2012, $2.7 billion (including $2.2 billion of real estate secured receivables) and $2.5 billion (including $1.9 billion of real estate secured receivables) of TDR Loans were reported as receivables held for sale for which there are no credit loss reserves as they are carried at the lower of amortized cost or fair value. |
| | (4) | At March 31, 2013 and December 31, 2012, TDR Loans held for investment totaling $1.7 billion and $1.5 billion, respectively, are recorded at the lower of amortized cost or fair value of the collateral less cost to sell. |
| | (5) | Included in credit loss reserves. |
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| Receivables Classified as Trouble Debt Restructuring Loan |
The following table discloses receivables and receivables held for sale which were classified as TDR Loans during the previous 12 months which became sixty days or greater contractually delinquent during the three months ended March 31, 2013 and 2012. | | | | | | | | | Three Months Ended March 31, | 2013 | | 2012 | Real estate secured: | | | | First lien | $ | 340 |
| | $ | 821 |
| Second lien | 36 |
| | 85 |
| Total real estate secured | 376 |
| | 906 |
| Personal non-credit card | 21 |
| | 128 |
| Total | $ | 397 |
| | $ | 1,034 |
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| Additional Information Relating to Trouble Debt Restructuring Loan |
Additional information relating to TDR Loans, including TDR Loans held for sale, is presented in the table below: | | | | | | | | | Three Months Ended March 31, | 2013 | | 2012 | | (in millions) | Average balance of TDR Loans: | | | | Real estate secured: | | | | First lien | $ | 14,730 |
| | $ | 13,722 |
| Second lien | 1,190 |
| | 1,131 |
| Total real estate secured | 15,920 |
| | 14,853 |
| Personal non-credit card | 574 |
| | 1,357 |
| Total average balance of TDR Loans | $ | 16,494 |
| | $ | 16,210 |
| Interest income recognized on TDR Loans: | | | | Real estate secured: | | | | First lien | $ | 242 |
| | $ | 176 |
| Second lien | 28 |
| | 22 |
| Total real estate secured | 270 |
| | 198 |
| Personal non-credit card | 40 |
| | 41 |
| Total interest income recognized on TDR Loans | $ | 310 |
| | $ | 239 |
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| Summary of Contractual Delinquency and Delinquency Ratio |
Delinquency The following table summarizes dollars of two-months-and-over contractual delinquency and as a percent of total receivables and receivables held for sale (“delinquency ratio”) for our loan portfolio: | | | | | | | | | | | | | | | | March 31, 2013 | | December 31, 2012 | | Dollars of Delinquency | | Delinquency Ratio | | Dollars of Delinquency | | Delinquency Ratio | | (dollars are in millions) | Real estate secured: | | | | | | | | First lien | $ | 5,789 |
| | 18.16 | % | | $ | 5,821 |
| | 18.01 | % | Second lien | 297 |
| | 8.57 |
| | 349 |
| | 9.59 |
| Total real estate secured | 6,086 |
| | 17.22 |
| | 6,170 |
| | 17.16 |
| Personal non-credit card | 42 |
| | 1.44 |
| | 103 |
| | 3.24 |
| Total | $ | 6,128 |
| | 16.01 | % | | $ | 6,273 |
| | 16.03 | % |
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| Nonperforming Consumer Receivable Portfolio |
The status of receivables and receivables held for sale is summarized in the following table: | | | | | | | | | | | | | | Accruing Loans | | Nonaccrual Loans | | Total | At March 31, 2013 | | | | | | Real estate secured(1)(2) | $ | 29,036 |
| | $ | 2,894 |
| | $ | 31,930 |
| Receivables held for sale | 4,022 |
| | 2,332 |
| | 6,354 |
| Total | $ | 33,058 |
| | $ | 5,226 |
| | $ | 38,284 |
| At December 31, 2012 | | | | | | Real estate secured(1)(2) | $ | 29,907 |
| | $ | 3,032 |
| | $ | 32,939 |
| Personal non-credit card | 4,042 |
| | 2,161 |
| | 6,203 |
| Total | $ | 33,949 |
| | $ | 5,193 |
| | $ | 39,142 |
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| | (1) | At March 31, 2013 and December 31, 2012, nonperforming real estate secured receivables held for investment include $1.9 billion and $1.7 billion, respectively, of receivables that are carried at the lower of amortized cost or fair value of the collateral less cost to sell. |
| | (2) | At March 31, 2013 and December 31, 2012, nonperforming real estate secured receivables held for investment include $2.0 billion and $2.1 billion, respectively, of TDR Loans, some of which may also be carried at fair value of the collateral less cost to sell |
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