Credit Loss Reserves

The following table summarizes the changes in credit loss reserves by product and the related receivable balance by product during the three months ended March 31, 2015 and 2014:



	Real Estate Secured						Personal Non- Credit Card			Total
	First Lien			Second Lien			Personal Non- Credit Card			Total
	(in millions)
Three Months Ended March 31, 2015:
Credit loss reserve rollforward:
Credit loss reserve balance at beginning of period	$	1,898		$	319		$	—		$	2,217
Provision for credit losses⁽¹⁾	37			(10		)	—			27
Net charge-offs:
Charge-offs⁽²⁾	(108		)	(39		)	—			(147		)
Recoveries	12			1			—			13
Total net charge-offs	(96		)	(38		)	—			(134		)
Credit loss reserve balance at end of period	$	1,839		$	271		$	—		$	2,110
Reserve components:
Collectively evaluated for impairment	$	154		$	53		$	—		$	207
Individually evaluated for impairment⁽³⁾	1,657			218			—			1,875
Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell	27			—			—			27
Receivables acquired with deteriorated credit quality	1			—			—			1
Total credit loss reserves	$	1,839		$	271		$	—		$	2,110
Receivables:
Collectively evaluated for impairment	$	9,863		$	1,524		$	—		$	11,387
Individually evaluated for impairment⁽³⁾	8,936			866			—			9,802
Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell	500			29			—			529
Receivables acquired with deteriorated credit quality	9			2			—			11
Total receivables	$	19,308		$	2,421		$	—		$	21,729

Three Months Ended March 31, 2014:
Credit loss reserve rollforward:
Credit loss reserve balance at beginning of period	$	2,777		$	496		$	—		$	3,273
Provision for credit losses	(24		)	30			(4		)	2
Net charge-offs:
Charge-offs⁽²⁾	(248		)	(63		)	—			(311		)
Recoveries	21			8			4			33
Total net charge-offs	(227		)	(55		)	4			(278		)
Credit loss reserve balance at end of period	$	2,526		$	471		$	—		$	2,997
Reserve components:
Collectively evaluated for impairment	$	414		$	125		$	—		$	539
Individually evaluated for impairment⁽³⁾	2,060			345			—			2,405
Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell	51			1			—			52
Receivables acquired with deteriorated credit quality	1			—			—			1
Total credit loss reserves	$	2,526		$	471		$	—		$	2,997
Receivables:
Collectively evaluated for impairment	$	11,924		$	1,850		$	—		$	13,774
Individually evaluated for impairment⁽³⁾	9,789			978			—			10,767
Receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell	876			51			—			927
Receivables acquired with deteriorated credit quality	10			3			—			13
Total receivables	$	22,599		$	2,882		$	—		$	25,481


⁽¹⁾	The provision for credit losses for real estate secured receivables during the first quarter of 2015 was impacted by a release of approximately $19 million associated with a correction to our credit loss reserve calculation for a segment of our portfolio.

⁽²⁾

For collateral dependent receivables that are transferred to held for sale, existing credit loss reserves at the time of transfer are recognized as a charge-off. We transferred to held for sale certain real estate secured receivables during the three months ended March 31, 2015 and 2014 that were carried at the lower of amortized cost or fair value of the collateral less cost to sell. Accordingly, we recognized the existing credit loss reserves on these receivables as additional charge-off totaling $15 million and $20 million during the three months ended March 31, 2015 and 2014, respectively.

⁽³⁾

These amounts represent TDR Loans for which we evaluate reserves using a discounted cash flow methodology. Each loan is individually identified as a TDR Loan and then grouped together with other TDR Loans with similar characteristics. The discounted cash flow impairment analysis is then applied to these groups of TDR Loans. The receivable balance above excludes TDR Loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $399 million and $637 million at March 31, 2015 and 2014, respectively. The reserve component above excludes credit loss reserves for TDR Loans that are carried at the lower of amortized cost or fair value of the collateral less cost to sell which totaled $22 million and $39 million at March 31, 2015 and 2014, respectively. These receivables and credit loss reserves are reflected within receivables carried at the lower of amortized cost or fair value of the collateral less cost to sell in the table above.