Allowance for Credit Losses

3 Months Ended

Jun. 30, 2023

Loans and Leases Receivable Disclosure [Abstract]

Allowance for Credit Losses

Note 4 – Allowance for Credit Losses

The following tables provide information related to our allowance for credit losses for finance receivables and certain off-balance sheet lending commitments by portfolio segment:

	Three months ended June 30, 2023
	Retail loan			Dealer products		Total
Beginning balance, April 1, 2023	$	1,430		$	83	$	1,513
Charge-offs		(134	)		-		(134	)
Recoveries		29			-		29
Provision for credit losses		158			7		165
Ending balance, June 30, 2023 ¹	$	1,483		$	90	$	1,573

1 Ending balance includes $28 million of allowance for credit losses recorded in Other liabilities on the Consolidated Balance Sheet which is related to off-balance sheet lending commitments in the dealer products portfolio.

	Three months ended June 30, 2022
	Retail loan			Dealer products			Total
Beginning balance, April 1, 2022	$	1,195		$	77		$	1,272
Charge-offs		(91	)		-			(91	)
Recoveries		15			-			15
Provision for credit losses		90			(12	)		78
Ending balance, June 30, 2022 ¹	$	1,209		$	65		$	1,274

1 Ending balance includes $26 million of allowance for credit losses recorded in Other liabilities on the Consolidated Balance Sheet which is related to off-balance sheet lending commitments in the dealer products portfolio.

We have elected to exclude accrued interest from the measurement of expected credit losses as we apply policies and procedures that result in the timely write-offs of accrued interest. Accrued interest is written off within allowance for credit losses at the earlier of when an account is deemed to be uncollectible or when an account is greater than 120 days past due.

Finance receivables for the dealer products portfolio segment as of June 30, 2023, includes $1.1 billion in finance receivables that are guaranteed by Toyota Motor North America, Inc. (“TMNA”), and $199 million in finance receivables that are guaranteed by third-party private Toyota distributors. Finance receivables for the dealer products portfolio segment as of June 30, 2022, includes $958 million in finance receivables that are guaranteed by TMNA, and $187 million in finance receivables that are guaranteed by third-party private Toyota distributors. These finance receivables are related to certain Toyota and Lexus dealers and other third parties to whom we provided financing at the request of TMNA and third-party private Toyota distributors.