Summary of Changes in Allowance for Loan and Lease Losses |
The table below summarizes changes in the allowance
for loan and lease losses, by portfolio segment, for the three and
six months ended June 30, 2014 and 2013:
Table 5.1: Allowance for Loan and Lease Losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
Three Months Ended
June 30, 2014 |
|
|
Credit
Card |
|
|
Consumer
Banking |
|
|
Commercial
Banking |
|
|
Other(1) |
|
|
Total
Allowance |
|
|
Unfunded
Lending
Commitments
Reserve |
|
|
Combined
Allowance
&
Unfunded
Reserve |
|
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
Total
Consumer
Banking |
|
|
|
|
|
|
Balance as of March 31, 2014
|
|
$ |
2,984 |
|
|
$ |
608 |
|
|
$ |
72 |
|
|
$ |
64 |
|
|
$ |
744 |
|
|
$ |
362 |
|
|
$ |
8 |
|
|
$ |
4,098 |
|
|
$ |
99 |
|
|
$ |
4,197 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
|
549 |
|
|
|
145 |
|
|
|
0 |
|
|
|
(2) |
|
|
|
143 |
|
|
|
9 |
|
|
|
0 |
|
|
|
701 |
|
|
|
3 |
|
|
|
704 |
|
Charge-offs
|
|
|
(995) |
|
|
|
(183) |
|
|
|
(8) |
|
|
|
(14) |
|
|
|
(205) |
|
|
|
(8) |
|
|
|
(4) |
|
|
|
(1,212) |
|
|
|
0 |
|
|
|
(1,212) |
|
Recoveries
|
|
|
310 |
|
|
|
72 |
|
|
|
3 |
|
|
|
8 |
|
|
|
83 |
|
|
|
5 |
|
|
|
2 |
|
|
|
400 |
|
|
|
0 |
|
|
|
400 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
(685) |
|
|
|
(111) |
|
|
|
(5) |
|
|
|
(6) |
|
|
|
(122) |
|
|
|
(3) |
|
|
|
(2) |
|
|
|
(812) |
|
|
|
0 |
|
|
|
(812) |
|
Other changes(2)
|
|
|
10 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1 |
|
|
|
11 |
|
|
|
0 |
|
|
|
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2014
|
|
$ |
2,858 |
|
|
$ |
642 |
|
|
$ |
67 |
|
|
$ |
56 |
|
|
$ |
765 |
|
|
$ |
368 |
|
|
$ |
7 |
|
|
$ |
3,998 |
|
|
$ |
102 |
|
|
$ |
4,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2014
|
|
|
|
|
|
|
Consumer
Banking |
|
|
|
|
|
|
|
|
|
|
|
Unfunded
Lending
Commitments
Reserve |
|
|
Combined
Allowance
&
Unfunded
Reserve |
|
(Dollars in millions)
|
|
Credit
Card |
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
Total
Consumer
Banking |
|
|
Commercial
Banking |
|
|
Other(1) |
|
|
Total
Allowance |
|
|
|
Balance as of December 31, 2013
|
|
$ |
3,214 |
|
|
$ |
606 |
|
|
$ |
83 |
|
|
$ |
63 |
|
|
$ |
752 |
|
|
$ |
338 |
|
|
$ |
11 |
|
|
$ |
4,315 |
|
|
$ |
87 |
|
|
$ |
4,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
|
1,107 |
|
|
|
281 |
|
|
|
(6) |
|
|
|
8 |
|
|
|
283 |
|
|
|
37 |
|
|
|
(3) |
|
|
|
1,424 |
|
|
|
15 |
|
|
|
1,439 |
|
Charge-offs
|
|
|
(2,090) |
|
|
|
(388) |
|
|
|
(19) |
|
|
|
(29) |
|
|
|
(436) |
|
|
|
(15) |
|
|
|
(6) |
|
|
|
(2,547) |
|
|
|
0 |
|
|
|
(2,547) |
|
Recoveries
|
|
|
625 |
|
|
|
143 |
|
|
|
9 |
|
|
|
14 |
|
|
|
166 |
|
|
|
8 |
|
|
|
5 |
|
|
|
804 |
|
|
|
0 |
|
|
|
804 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
(1,465) |
|
|
|
(245) |
|
|
|
(10) |
|
|
|
(15) |
|
|
|
(270) |
|
|
|
(7) |
|
|
|
(1) |
|
|
|
(1,743) |
|
|
|
0 |
|
|
|
(1,743) |
|
Other changes(2)
|
|
|
2 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
2 |
|
|
|
0 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2014
|
|
$ |
2,858 |
|
|
$ |
642 |
|
|
$ |
67 |
|
|
$ |
56 |
|
|
$ |
765 |
|
|
$ |
368 |
|
|
$ |
7 |
|
|
$ |
3,998 |
|
|
$ |
102 |
|
|
$ |
4,100 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2013
|
|
|
|
|
|
|
Consumer
Banking |
|
|
|
|
|
|
|
|
|
|
|
Unfunded
Lending
Commitments
Reserve |
|
|
Combined
Allowance
&
Unfunded
Reserve |
|
(Dollars in millions)
|
|
Credit
Card |
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
Total
Consumer
Banking |
|
|
Commercial
Banking |
|
|
Other(1) |
|
|
Total
Allowance |
|
|
|
Balance as of March 31, 2013
|
|
$ |
3,494 |
|
|
$ |
528 |
|
|
$ |
103 |
|
|
$ |
112 |
|
|
$ |
743 |
|
|
$ |
342 |
|
|
$ |
27 |
|
|
$ |
4,606 |
|
|
$ |
85 |
|
|
$ |
4,691 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
|
713 |
|
|
|
101 |
|
|
|
(20) |
|
|
|
(12) |
|
|
|
69 |
|
|
|
1 |
|
|
|
(5) |
|
|
|
778 |
|
|
|
(16) |
|
|
|
762 |
|
Charge-offs
|
|
|
(1,181) |
|
|
|
(153) |
|
|
|
(5) |
|
|
|
(19) |
|
|
|
(177) |
|
|
|
(14) |
|
|
|
(7) |
|
|
|
(1,379) |
|
|
|
0 |
|
|
|
(1,379) |
|
Recoveries
|
|
|
331 |
|
|
|
61 |
|
|
|
1 |
|
|
|
5 |
|
|
|
67 |
|
|
|
10 |
|
|
|
2 |
|
|
|
410 |
|
|
|
0 |
|
|
|
410 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
(850) |
|
|
|
(92) |
|
|
|
(4) |
|
|
|
(14) |
|
|
|
(110) |
|
|
|
(4) |
|
|
|
(5) |
|
|
|
(969) |
|
|
|
0 |
|
|
|
(969) |
|
Other change(2)
|
|
|
(8) |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(1) |
|
|
|
1 |
|
|
|
(8) |
|
|
|
0 |
|
|
|
(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2013
|
|
$ |
3,349 |
|
|
$ |
537 |
|
|
$ |
79 |
|
|
$ |
86 |
|
|
$ |
702 |
|
|
$ |
338 |
|
|
$ |
18 |
|
|
$ |
4,407 |
|
|
$ |
69 |
|
|
$ |
4,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2013 |
|
|
|
|
|
|
Consumer
Banking |
|
|
|
|
|
|
|
|
|
|
|
Unfunded
Lending
Commitments
Reserve |
|
|
Combined
Allowance
&
Unfunded
Reserve |
|
(Dollars in millions)
|
|
Credit
Card |
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
Total
Consumer
Banking |
|
|
Commercial
Banking |
|
|
Other(1) |
|
|
Total
Allowance |
|
|
|
Balance as of December 31, 2012
|
|
$ |
3,979 |
|
|
$ |
486 |
|
|
$ |
113 |
|
|
$ |
112 |
|
|
$ |
711 |
|
|
$ |
433 |
|
|
$ |
33 |
|
|
$ |
5,156 |
|
|
$ |
35 |
|
|
$ |
5,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for credit losses
|
|
|
1,456 |
|
|
|
265 |
|
|
|
(26) |
|
|
|
5 |
|
|
|
244 |
|
|
|
(84) |
|
|
|
(3) |
|
|
|
1,613 |
|
|
|
34 |
|
|
|
1,647 |
|
Charge-offs
|
|
|
(2,443) |
|
|
|
(335) |
|
|
|
(12) |
|
|
|
(44) |
|
|
|
(391) |
|
|
|
(26) |
|
|
|
(15) |
|
|
|
(2,875) |
|
|
|
0 |
|
|
|
(2,875) |
|
Recoveries
|
|
|
671 |
|
|
|
121 |
|
|
|
4 |
|
|
|
13 |
|
|
|
138 |
|
|
|
15 |
|
|
|
3 |
|
|
|
827 |
|
|
|
0 |
|
|
|
827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net charge-offs
|
|
|
(1,772) |
|
|
|
(214) |
|
|
|
(8) |
|
|
|
(31) |
|
|
|
(253) |
|
|
|
(11) |
|
|
|
(12) |
|
|
|
(2,048) |
|
|
|
0 |
|
|
|
(2,048) |
|
Other changes(2)
|
|
|
(314) |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
0 |
|
|
|
(314) |
|
|
|
0 |
|
|
|
(314) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of June 30, 2013
|
|
$ |
3,349 |
|
|
$ |
537 |
|
|
$ |
79 |
|
|
$ |
86 |
|
|
$ |
702 |
|
|
$ |
338 |
|
|
$ |
18 |
|
|
$ |
4,407 |
|
|
$ |
69 |
|
|
$ |
4,476 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Other consists of our discontinued GreenPoint mortgage
operations loan portfolio and our community redevelopment loan
portfolio.
|
|
(2) |
Primarily represents foreign currency translation
adjustments and the net impact of loan transfers and sales. In the
first quarter of 2013, the allowance of loan and lease losses was
reduced by $289 million attributable to the transfer of the Best
Buy portfolio from loans held for investment to loans held for
sale, which was subsequently sold in the third quarter of 2013.
|
|
Components of Allowance for Loan and Lease Losses by Impairment Methodology |
The table below presents the components of our
allowance for loan and lease losses, by portfolio segment and
impairment methodology, and the recorded investment of the related
loans as of June 30, 2014 and December 31, 2013:
Table 5.2: Components of Allowance for Loan and Lease Losses by
Impairment Methodology
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014 |
|
|
Credit
Card |
|
|
Consumer
Banking |
|
|
Total
Consumer
Banking |
|
|
Commercial
Banking |
|
|
Other |
|
|
Total |
|
(Dollars in millions)
|
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
|
|
|
Allowance for loan and lease losses by impairment
methodology:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated(1)
|
|
$ |
2,635 |
|
|
$ |
625 |
|
|
$ |
17 |
|
|
$ |
49 |
|
|
$ |
691 |
|
|
$ |
336 |
|
|
$ |
7 |
|
|
$ |
3,669 |
|
Asset-specific(2)
|
|
|
223 |
|
|
|
17 |
|
|
|
18 |
|
|
|
7 |
|
|
|
42 |
|
|
|
32 |
|
|
|
0 |
|
|
|
297 |
|
Acquired Loans(3)
|
|
|
0 |
|
|
|
0 |
|
|
|
32 |
|
|
|
0 |
|
|
|
32 |
|
|
|
0 |
|
|
|
0 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance for loan and lease losses
|
|
$ |
2,858 |
|
|
$ |
642 |
|
|
$ |
67 |
|
|
$ |
56 |
|
|
$ |
765 |
|
|
$ |
368 |
|
|
$ |
7 |
|
|
$ |
3,998 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for investment by impairment
methodology:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated(1)
|
|
$ |
78,253 |
|
|
$ |
34,605 |
|
|
$ |
6,526 |
|
|
$ |
3,509 |
|
|
$ |
44,640 |
|
|
$ |
47,708 |
|
|
$ |
127 |
|
|
$ |
170,728 |
|
Asset-specific(2)
|
|
|
728 |
|
|
|
185 |
|
|
|
404 |
|
|
|
68 |
|
|
|
657 |
|
|
|
396 |
|
|
|
0 |
|
|
|
1,781 |
|
Acquired Loans(3)
|
|
|
37 |
|
|
|
2 |
|
|
|
25,714 |
|
|
|
49 |
|
|
|
25,765 |
|
|
|
217 |
|
|
|
0 |
|
|
|
26,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans held for investment
|
|
$ |
79,018 |
|
|
$ |
34,792 |
|
|
$ |
32,644 |
|
|
$ |
3,626 |
|
|
$ |
71,062 |
|
|
$ |
48,321 |
|
|
$ |
127 |
|
|
$ |
198,528 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance as a percentage of period-end loans held for
investment
|
|
|
3.62% |
|
|
|
1.85% |
|
|
|
0.21% |
|
|
|
1.54% |
|
|
|
1.08% |
|
|
|
0.76% |
|
|
|
4.89% |
|
|
|
2.01% |
|
(Dollars in millions)
|
|
December 31, 2013 |
|
|
Credit
Card |
|
|
Consumer
Banking |
|
|
Total
Consumer
Banking |
|
|
|
|
|
|
|
|
|
|
|
|
Auto |
|
|
Home
Loan |
|
|
Retail
Banking |
|
|
|
Commercial
Banking |
|
|
Other |
|
|
Total |
|
Allowance for loan and lease losses by impairment
methodology:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated(1)
|
|
$ |
2,953 |
|
|
$ |
590 |
|
|
$ |
27 |
|
|
$ |
53 |
|
|
$ |
670 |
|
|
$ |
313 |
|
|
$ |
11 |
|
|
$ |
3,947 |
|
Asset-specific(2)
|
|
|
261 |
|
|
|
16 |
|
|
|
18 |
|
|
|
10 |
|
|
|
44 |
|
|
|
25 |
|
|
|
0 |
|
|
|
330 |
|
Acquired Loans(3)
|
|
|
0 |
|
|
|
0 |
|
|
|
38 |
|
|
|
0 |
|
|
|
38 |
|
|
|
0 |
|
|
|
0 |
|
|
|
38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total allowance for loan and lease losses
|
|
$ |
3,214 |
|
|
$ |
606 |
|
|
$ |
83 |
|
|
$ |
63 |
|
|
$ |
752 |
|
|
$ |
338 |
|
|
$ |
11 |
|
|
$ |
4,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans held for investment by impairment
methodology:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collectively evaluated(1)
|
|
$ |
80,462 |
|
|
$ |
31,683 |
|
|
$ |
6,704 |
|
|
$ |
3,501 |
|
|
$ |
41,888 |
|
|
$ |
44,420 |
|
|
$ |
121 |
|
|
$ |
166,891 |
|
Asset-specific(2)
|
|
|
780 |
|
|
|
169 |
|
|
|
394 |
|
|
|
86 |
|
|
|
649 |
|
|
|
329 |
|
|
|
0 |
|
|
|
1,758 |
|
Acquired Loans(3)
|
|
|
63 |
|
|
|
5 |
|
|
|
28,184 |
|
|
|
36 |
|
|
|
28,225 |
|
|
|
262 |
|
|
|
0 |
|
|
|
28,550 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loans held for investment
|
|
$ |
81,305 |
|
|
$ |
31,857 |
|
|
$ |
35,282 |
|
|
$ |
3,623 |
|
|
$ |
70,762 |
|
|
$ |
45,011 |
|
|
$ |
121 |
|
|
$ |
197,199 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance as a percentage of period-end loans held for
investment
|
|
|
3.95% |
|
|
|
1.90% |
|
|
|
0.24% |
|
|
|
1.74% |
|
|
|
1.06% |
|
|
|
0.75% |
|
|
|
9.09% |
|
|
|
2.19% |
|
|
(1) |
The component of the allowance for loan and lease losses
for credit card and other consumer loans that we collectively
evaluate for impairment is based on a statistical calculation
supplemented by management judgment and interpretation. The
component of the allowance for loan and lease losses for commercial
loans, which we collectively evaluate for impairment, is based on
historical loss experience for loans with similar characteristics
and consideration of credit quality supplemented by management
judgment and interpretation.
|
|
(2) |
The asset-specific component of the allowance for loan
and lease losses for smaller-balance impaired loans is calculated
on a pool basis using historical loss experience for the respective
class of assets. The asset-specific component of the allowance for
loan and lease losses for larger-balance commercial loans is
individually calculated for each loan.
|
|
(3) |
The Acquired Loans component of the allowance for loan
and lease losses is accounted for based on expected cash flows. See
“Note 4—Loans” for details on these loans.
|
|