Business Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Business Segments

NOTE 13—BUSINESS SEGMENTS

Our principal operations are currently organized for management reporting purposes into three primary business segments, which are defined primarily based on the products and services provided or the type of customer served: Credit Card, Consumer Banking and Commercial Banking. The operations of acquired businesses have been integrated into our existing business segments. Certain activities that are not part of a segment, such as management of our corporate investment portfolio and asset/ liability management by our centralized Corporate Treasury group, are included in the “Other” category.

Basis of Presentation

The results of our individual businesses, which we report on a continuing operations basis, reflect the manner in which management evaluates performance and makes decisions about funding our operations and allocating resources. Our business segment results are intended to reflect each segment as if it were a stand-alone business. We use an internal management accounting and reporting process to derive our business segment results. Our internal management accounting and reporting process employs various allocation methodologies, including funds transfer pricing, to assign certain balance sheet assets, deposits and other liabilities and their related revenue and expenses directly or indirectly attributable to each business segment. Total interest income and net fees are directly attributable to the segment in which they are reported. The net interest income of each segment reflects the results of our funds transfer pricing process, which is primarily based on a matched maturity method that takes into consideration market rates. Our funds transfer pricing process provides a funds credit for sources of funds, such as deposits generated by our Consumer Banking and Commercial Banking businesses, and a funds charge for the use of funds by each segment. The allocation process is unique to each business segment and acquired businesses. We provide additional information on the allocation methodologies used to derive our business segment results in “Note 20—Business Segments” in our 2012 Form 10-K.

Segment Results and Reconciliation

The following tables present our business segment results for the three and nine months ended September 30, 2013 and 2012 as well as selected balance sheet data as of September 30, 2013 and December 31, 2012 and a reconciliation of our total business segment results to our reported consolidated income from continuing operations, assets and deposits. Prior period amounts have been recast to conform to the current period presentation.

Table 13.1: Segment Results and Reconciliation

	Three Months Ended September 30, 2013
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking		Other			Consolidated Total
Net interest income	$	2,757	$	1,481	$	480	$	(158	)	$	4,560
Non-interest income		834		184		87		(14	)		1,091
Total net revenue		3,591		1,665		567		(172	)		5,651
Provision for credit losses		617		202		31		(1	)		849
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization		106		0		0		0			106
Core deposit intangible amortization		0		34		6		0			40
Total PCCR and core deposit intangible amortization		106		34		6		0			146
Other non-interest expense		1,798		893		260		50			3,001
Total non-interest expense		1,904		927		266		50			3,147
Income (loss) from continuing operations before income taxes		1,070		536		270		(221	)		1,655
Income tax provision (benefit)		376		191		96		(138	)		525
Income from continuing operations, net of tax	$	694	$	345	$	174	$	(83	)	$	1,130
Period-end total loans held for investment	$	77,967	$	71,285	$	42,399	$	163		$	191,814
Period-end total customer deposits		0		168,437		30,592		7,805			206,834

	Three Months Ended September 30, 2012
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Consolidated Total
Net interest income	$	2,991	$	1,501	$	432		$	(278	)	$	4,646
Non-interest income		826		260		87			(37	)		1,136
Total net revenue		3,817		1,761		519			(315	)		5,782
Provision for credit losses		892		202		(87	)		7			1,014
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization		131		0		0			0			131
Core deposit intangible amortization		0		41		8			0			49
Total PCCR and core deposit intangible amortization		131		41		8			0			180
Other non-interest expense		1,659		936		245			25			2,865
Total non-interest expense		1,790		977		253			25			3,045
Income (loss) from continuing operations before income taxes		1,135		582		353			(347	)		1,723
Income tax provision (benefit)		394		206		125			(190	)		535
Income from continuing operations, net of tax	$	741	$	376	$	228		$	(157	)	$	1,188
Period-end total loans held for investment	$	89,033	$	76,738	$	37,209		$	152		$	203,132
Period-end total customer deposits		0		173,100		28,670			11,485			213,255

	Nine Months Ended September 30, 2013
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Consolidated Total
Net interest income	$	8,391	$	4,437	$	1,391		$	(536	)	$	13,683
Non-interest income		2,487		554		264			(148	)		3,157
Total net revenue		10,878		4,991		1,655			(684	)		16,840
Provision for credit losses		2,073		444		(18	)		(3	)		2,496
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization		332		0		0			0			332
Core deposit intangible amortization		0		106		21			0			127
Total PCCR and core deposit intangible amortization		332		106		21			0			459
Other non-interest expense		5,239		2,621		772			143			8,775
Total non-interest expense		5,571		2,727		793			143			9,234
Income from continuing operations before income taxes		3,234		1,820		880			(824	)		5,110
Income tax provision (benefit)		1,135		648		313			(496	)		1,600
Income from continuing operations, net of tax	$	2,099	$	1,172	$	567		$	(328	)	$	3,510
Period-end total loans held for investment	$	77,967	$	71,285	$	42,399		$	163		$	191,814
Period-end total customer deposits		0		168,437		30,592			7,805			206,834
	Nine Months Ended September 30, 2012
(Dollars in millions)	Credit Card		Consumer Banking		Commercial Banking			Other			Consolidated Total
Net interest income	$	7,333	$	4,285	$	1,290		$	(847	)	$	12,061
Non-interest income		2,195		621		254			641			3,711
Total net revenue		9,528		4,906		1,544			(206	)		15,772
Provision for credit losses		3,061		420		(250	)		33			3,264
Non-interest expense:
Amortization of intangibles:
PCCR intangible amortization		223		0		0			0			223
Core deposit intangible amortization		0		120		26			0			146
Total PCCR and core deposit intangible amortization		223		120		26			0			369
Other non-interest expense		4,698		2,759		739			126			8,322
Total non-interest expense		4,921		2,879		765			126			8,691
Income from continuing operations before income taxes		1,546		1,607		1,029			(365	)		3,817
Income tax provision (benefit)		536		569		363			(537	)		931
Income from continuing operations, net of tax	$	1,010	$	1,038	$	666		$	172		$	2,886
Period-end total loans held for investment	$	89,033	$	76,738	$	37,209		$	152		$	203,132
Period-end total customer deposits		0		173,100		28,670			11,485			213,255