Quarterly report pursuant to Section 13 or 15(d)

Outstanding Loans and Leases (Tables)

v2.4.0.8
Outstanding Loans and Leases (Tables)
9 Months Ended
Sep. 30, 2013
Loans and Leases Receivable, Net of Deferred Income [Abstract]  
Loans And Leases Outstanding
The following tables present total outstanding loans and leases and an aging analysis for the Corporation's Home Loans, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2013 and December 31, 2012.

 
September 30, 2013
(Dollars in millions)
30-59 Days
Past Due
(1)
60-89 Days
Past Due
(1)
90 Days or
More Past Due
(2)
Total
Past Due
30 Days
or More
Total Current
or Less Than 30
Days Past Due
(3)
Purchased
Credit -
impaired
(4)
Loans
Accounted for
Under the Fair
Value Option
Total
Outstandings
Home loans
 
 
 
 
 
 
 
 
Core portfolio
 
 
 
 
 
 
 
 
Residential mortgage (5)
$
2,182

$
766

$
7,452

$
10,400

$
167,108

 
 
$
177,508

Home equity
230

118

654

1,002

54,714

 
 
55,716

Legacy Assets & Servicing portfolio
 
 
 
 
 
 
 
 
Residential mortgage (6)
2,952

1,485

18,793

23,230

32,694

$
20,064

 
75,988

Home equity
439

234

1,289

1,962

31,871

7,104

 
40,937

Credit card and other consumer
 
 
 
 
 
 
 
 
U.S. credit card
609

454

1,049

2,112

88,168

 
 
90,280

Non-U.S. credit card
67

55

142

264

10,819

 
 
11,083

Direct/Indirect consumer (7)
398

188

456

1,042

82,993

 
 
84,035

Other consumer (8)
24

9

19

52

1,861

 
 
1,913

Total consumer loans
6,901

3,309

29,854

40,064

470,228

27,168

 
537,460

Consumer loans accounted for under the fair value option (9)
 
 
 
 
 
 
$
2,186

2,186

Total consumer
6,901

3,309

29,854

40,064

470,228

27,168

2,186

539,646

Commercial
 
 
 
 
 
 
 
 
U.S. commercial
187

124

445

756

210,358

 
 
211,114

Commercial real estate (10)
44

108

440

592

44,348

 
 
44,940

Commercial lease financing
29

53

72

154

24,435

 
 
24,589

Non-U.S. commercial
286

1

3

290

92,655

 
 
92,945

U.S. small business commercial
71

58

128

257

12,891

 
 
13,148

Total commercial loans
617

344

1,088

2,049

384,687

 
 
386,736

Commercial loans accounted for under the fair value option (9)
 
 
 
 
 
 
8,010

8,010

Total commercial
617

344

1,088

2,049

384,687

 
8,010

394,746

Total loans and leases
$
7,518

$
3,653

$
30,942

$
42,113

$
854,915

$
27,168

$
10,196

$
934,392

Percentage of outstandings
0.81
%
0.39
%
3.31
%
4.51
%
91.49
%
2.91
%
1.09
%
 
(1) 
Home loans 30-59 days past due includes fully-insured loans of $2.6 billion and nonperforming loans of $736 million. Home loans 60-89 days past due includes fully-insured loans of $1.2 billion and nonperforming loans of $494 million.
(2) 
Home loans includes fully-insured loans of $18.0 billion.
(3) 
Home loans includes $6.2 billion and direct/indirect consumer includes $39 million of nonperforming loans.
(4) 
PCI loan amounts are shown gross of the valuation allowance.
(5) 
Total outstandings includes non-U.S. residential mortgage loans of $87 million.
(6) 
Total outstandings includes pay option loans of $5.2 billion. The Corporation no longer originates this product.
(7) 
Total outstandings includes dealer financial services loans of $39.5 billion, consumer lending loans of $3.1 billion, U.S. securities-based lending loans of $30.4 billion, non-U.S. consumer loans of $5.7 billion, student loans of $4.3 billion and other consumer loans of $1.0 billion.
(8) 
Total outstandings includes consumer finance loans of $1.2 billion, consumer leases of $492 million, consumer overdrafts of $175 million and other non-U.S. consumer loans of $5 million.
(9) 
Consumer loans accounted for under the fair value option were residential mortgage loans of $2.2 billion. Commercial loans accounted for under the fair value option were U.S. commercial loans of $1.8 billion and non-U.S. commercial loans of $6.2 billion. For additional information, see Note 16 – Fair Value Measurements and Note 17 – Fair Value Option.
(10) 
Total outstandings includes U.S. commercial real estate loans of $43.5 billion and non-U.S. commercial real estate loans of $1.4 billion.
 
December 31, 2012
(Dollars in millions)
30-59 Days
Past Due
(1)
60-89 Days
Past Due
(1)
90 Days or
More Past Due
(2)
Total
Past Due
30 Days
or More
Total Current
or Less Than 30
Days Past Due
(3)
Purchased
Credit -
impaired
(4)
Loans
Accounted for
Under the Fair
Value Option
Total
Outstandings
Home loans
 
 
 
 
 
 
 
 
Core portfolio
 
 
 
 
 
 
 
 
Residential mortgage (5)
$
2,274

$
806

$
6,227

$
9,307

$
160,809

 
 
$
170,116

Home equity
273

146

591

1,010

59,841

 
 
60,851

Legacy Assets & Servicing portfolio
 
 
 
 
 
 
 
 
Residential mortgage (6)
2,938

1,714

26,728

31,380

33,982

$
17,451

 
82,813

Home equity
608

357

1,444

2,409

36,213

8,667

 
47,289

Credit card and other consumer
 
 
 
 
 
 
 
 
U.S. credit card
729

582

1,437

2,748

92,087

 
 
94,835

Non-U.S. credit card
106

85

212

403

11,294

 
 
11,697

Direct/Indirect consumer (7)
569

239

573

1,381

81,824

 
 
83,205

Other consumer (8)
48

19

4

71

1,557

 
 
1,628

Total consumer loans
7,545

3,948

37,216

48,709

477,607

26,118

 
552,434

Consumer loans accounted for under the fair value option (9)
 
 
 
 
 
 
$
1,005

1,005

Total consumer
7,545

3,948

37,216

48,709

477,607

26,118

1,005

553,439

Commercial
 
 
 
 
 
 
 
 
U.S. commercial
323

133

639

1,095

196,031

 
 
197,126

Commercial real estate (10)
79

144

983

1,206

37,431

 
 
38,637

Commercial lease financing
84

79

30

193

23,650

 
 
23,843

Non-U.S. commercial
2



2

74,182

 
 
74,184

U.S. small business commercial
101

75

168

344

12,249

 
 
12,593

Total commercial loans
589

431

1,820

2,840

343,543

 
 
346,383

Commercial loans accounted for under the fair value option (9)
 
 
 
 
 
 
7,997

7,997

Total commercial
589

431

1,820

2,840

343,543

 
7,997

354,380

Total loans and leases
$
8,134

$
4,379

$
39,036

$
51,549

$
821,150

$
26,118

$
9,002

$
907,819

Percentage of outstandings
0.90
%
0.48
%
4.30
%
5.68
%
90.45
%
2.88
%
0.99
%
 
(1) 
Home loans 30-59 days past due includes fully-insured loans of $2.3 billion and nonperforming loans of $702 million. Home loans 60-89 days past due includes fully-insured loans of $1.3 billion and nonperforming loans of $558 million.
(2) 
Home loans includes fully-insured loans of $22.2 billion.
(3) 
Home loans includes $5.5 billion and direct/indirect consumer includes $63 million of nonperforming loans.
(4) 
PCI loan amounts are shown gross of the valuation allowance.
(5) 
Total outstandings includes non-U.S. residential mortgage loans of $93 million.
(6) 
Total outstandings includes pay option loans of $6.7 billion. The Corporation no longer originates this product.
(7) 
Total outstandings includes dealer financial services loans of $35.9 billion, consumer lending loans of $4.7 billion, U.S. securities-based lending loans of $28.3 billion, non-U.S. consumer loans of $8.3 billion, student loans of $4.8 billion and other consumer loans of $1.2 billion.
(8) 
Total outstandings includes consumer finance loans of $1.4 billion, consumer leases of $34 million, consumer overdrafts of $177 million and other non-U.S. consumer loans of $5 million.
(9) 
Consumer loans accounted for under the fair value option were residential mortgage loans of $1.0 billion. Commercial loans accounted for under the fair value option were U.S. commercial loans of $2.3 billion and non-U.S. commercial loans of $5.7 billion. For additional information, see Note 16 – Fair Value Measurements and Note 17 – Fair Value Option.
(10) 
Total outstandings includes U.S. commercial real estate loans of $37.2 billion and non-U.S. commercial real estate loans of $1.5 billion.

Schedule of Financing Receivables, Non Accrual Status
The table below presents the Corporation's nonperforming loans and leases including nonperforming TDRs, and loans accruing past due 90 days or more at September 30, 2013 and December 31, 2012. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation's 2012 Annual Report on Form 10-K.

Credit Quality
 
 
 
 
 
 
 
 
Nonperforming Loans and Leases (1)
 
Accruing Past Due 90 Days or More
(Dollars in millions)
September 30
2013
 
December 31
2012
 
September 30
2013
 
December 31
2012
Home loans
 
 
 
 
 
 
 
Core portfolio
 
 
 
 
 
 
 
Residential mortgage (2)
$
3,479

 
$
3,193

 
$
5,207

 
$
3,984

Home equity
1,417

 
1,265

 

 

Legacy Assets & Servicing portfolio
 
 
 
 
 
 
 
Residential mortgage (2)
9,849

 
11,862

 
12,753

 
18,173

Home equity
2,759

 
3,017

 

 

Credit card and other consumer
 
 
 
 
 
 
 
U.S. credit card
n/a

 
n/a

 
1,049

 
1,437

Non-U.S. credit card
n/a

 
n/a

 
142

 
212

Direct/Indirect consumer
59

 
92

 
437

 
545

Other consumer
18

 
2

 
1

 
2

Total consumer
17,581

 
19,431

 
19,589

 
24,353

Commercial
 
 
 
 
 
 
 
U.S. commercial
1,059

 
1,484

 
57

 
65

Commercial real estate
488

 
1,513

 
76

 
29

Commercial lease financing
49

 
44

 
66

 
15

Non-U.S. commercial
86

 
68

 
3

 

U.S. small business commercial
103

 
115

 
83

 
120

Total commercial
1,785

 
3,224

 
285

 
229

Total loans and leases
$
19,366

 
$
22,655

 
$
19,874

 
$
24,582

(1) 
Nonperforming loan balances did not include nonaccruing TDRs removed from the PCI loan portfolio prior to January 1, 2010 of $356 million and $521 million at September 30, 2013 and December 31, 2012.
(2) 
Residential mortgage loans in the Core and Legacy Assets & Servicing portfolios accruing past due 90 days or more are fully-insured loans. At September 30, 2013 and December 31, 2012, residential mortgage includes $13.9 billion and $17.8 billion of loans on which interest has been curtailed by the FHA, and therefore are no longer accruing interest, although principal is still insured, and $4.1 billion and $4.4 billion of loans on which interest is still accruing.
n/a = not applicable
Financing Receivable Credit Quality Indicators
The following tables present certain credit quality indicators for the Corporation's Home Loans, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2013 and December 31, 2012.

Home Loans – Credit Quality Indicators (1)
 
 
 
 
 
 
 
September 30, 2013
(Dollars in millions)
Core Portfolio Residential Mortgage (2)
Legacy Assets & Servicing Residential Mortgage (2)
Residential
Mortgage PCI
(3)
Core Portfolio Home Equity (2)
Legacy Assets & Servicing Home Equity (2)
Home
Equity PCI
Refreshed LTV (4)
 
 
 
 
 
 
Less than or equal to 90 percent
$
92,172

$
22,199

$
10,760

$
44,827

$
15,827

$
1,963

Greater than 90 percent but less than or equal to 100 percent
6,983

4,526

3,011

4,374

4,290

668

Greater than 100 percent
8,212

10,466

6,293

6,515

13,716

4,473

Fully-insured loans (5)
70,141

18,733





Total home loans
$
177,508

$
55,924

$
20,064

$
55,716

$
33,833

$
7,104

 
 
 
 
 
 
 
Refreshed FICO score
 
 
 
 
 
 
Less than 620
$
6,032

$
11,770

$
10,871

$
2,413

$
4,478

$
1,296

Greater than or equal to 620 and less than 680
7,955

5,919

3,363

4,187

5,240

1,272

Greater than or equal to 680 and less than 740
25,097

8,133

3,056

11,840

9,414

2,018

Greater than or equal to 740
68,283

11,369

2,774

37,276

14,701

2,518

Fully-insured loans (5)
70,141

18,733





Total home loans
$
177,508

$
55,924

$
20,064

$
55,716

$
33,833

$
7,104

(1) 
Excludes $2.2 billion of loans accounted for under the fair value option.
(2) 
Excludes PCI loans.
(3) 
Includes $4.7 billion of pay option loans. The Corporation no longer originates this product.
(4) 
Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance.
(5) 
Credit quality indicators are not reported for fully-insured loans as principal repayment is insured.

Credit Card and Other Consumer – Credit Quality Indicators
 
September 30, 2013
(Dollars in millions)
U.S. Credit
Card
 
Non-U.S.
Credit Card
 
Direct/Indirect
Consumer
 
Other
Consumer
(1)
Refreshed FICO score
 
 
 
 
 
 
 
Less than 620
$
5,112

 
$

 
$
1,293

 
$
571

Greater than or equal to 620 and less than 680
13,106

 

 
3,264

 
273

Greater than or equal to 680 and less than 740
36,054

 

 
10,087

 
205

Greater than or equal to 740
36,008

 

 
27,419

 
193

Other internal credit metrics (2, 3, 4)

 
11,083

 
41,972

 
671

Total credit card and other consumer
$
90,280

 
$
11,083

 
$
84,035

 
$
1,913

(1) 
65 percent of the other consumer portfolio is associated with portfolios from certain consumer finance businesses that the Corporation previously exited.
(2) 
Other internal credit metrics may include delinquency status, geography or other factors.
(3) 
Direct/indirect consumer includes $36.0 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $4.3 billion of loans the Corporation no longer originates.
(4) 
Non-U.S. credit card represents the U.K. credit card portfolio which is evaluated using internal credit metrics, including delinquency status. At September 30, 2013, 98 percent of this portfolio was current or less than 30 days past due, one percent was 30-89 days past due and one percent was 90 days or more past due.

Commercial – Credit Quality Indicators (1)
 
September 30, 2013
(Dollars in millions)
U.S.
Commercial
 
Commercial
Real Estate
 
Commercial
Lease
Financing
 
Non-U.S.
Commercial
 
U.S. Small
Business
Commercial
(2)
Risk ratings
 
 
 
 
 
 
 
 
 
Pass rated
$
203,620

 
$
43,135

 
$
23,500

 
$
91,399

 
$
1,313

Reservable criticized
7,494

 
1,805

 
1,089

 
1,546

 
391

Refreshed FICO score (3)
 
 
 
 
 
 
 
 
 
Less than 620
 
 
 
 
 
 
 
 
235

Greater than or equal to 620 and less than 680
 
 
 
 
 
 
 
 
548

Greater than or equal to 680 and less than 740
 
 
 
 
 
 
 
 
1,594

Greater than or equal to 740
 
 
 
 
 
 
 
 
2,820

Other internal credit metrics (3, 4)
 
 
 
 
 
 
 
 
6,247

Total commercial
$
211,114

 
$
44,940

 
$
24,589

 
$
92,945

 
$
13,148

(1) 
Excludes $8.0 billion of loans accounted for under the fair value option.
(2) 
U.S. small business commercial includes $295 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At September 30, 2013, 99 percent of the balances where internal credit metrics are used was current or less than 30 days past due.
(3) 
Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio.
(4) 
Other internal credit metrics may include delinquency status, application scores, geography or other factors.
Home Loans – Credit Quality Indicators (1)
 
 
 
 
 
 
 
December 31, 2012
(Dollars in millions)
Core Portfolio
Residential
Mortgage
(2)
Legacy Assets & Servicing
Residential Mortgage
(2)
Residential
Mortgage PCI
(3)
Core Portfolio Home Equity (2)
Legacy Assets & Servicing Home
Equity
(2)
Home
Equity PCI
Refreshed LTV (4)
 
 
 
 
 
 
Less than or equal to 90 percent
$
80,585

$
20,613

$
8,581

$
44,971

$
15,922

$
2,074

Greater than 90 percent but less than or equal to 100 percent
8,891

5,097

2,368

5,825

4,507

805

Greater than 100 percent
12,984

16,454

6,502

10,055

18,193

5,788

Fully-insured loans (5)
67,656

23,198





Total home loans
$
170,116

$
65,362

$
17,451

$
60,851

$
38,622

$
8,667

 
 
 
 
 
 
 
Refreshed FICO score
 
 
 
 
 
 
Less than 620
$
6,366

$
14,320

$
8,647

$
2,586

$
5,411

$
1,989

Greater than or equal to 620 and less than 680
8,561

6,157

2,712

4,500

5,921

1,529

Greater than or equal to 680 and less than 740
25,141

8,611

2,976

12,625

10,395

2,299

Greater than or equal to 740
62,392

13,076

3,116

41,140

16,895

2,850

Fully-insured loans (5)
67,656

23,198





Total home loans
$
170,116

$
65,362

$
17,451

$
60,851

$
38,622

$
8,667

(1) 
Excludes $1.0 billion of loans accounted for under the fair value option.
(2) 
Excludes PCI loans.
(3) 
Includes $6.1 billion of pay option loans. The Corporation no longer originates this product.
(4) 
Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance.
(5) 
Credit quality indicators are not reported for fully-insured loans as principal repayment is insured.

Credit Card and Other Consumer – Credit Quality Indicators
 
December 31, 2012
(Dollars in millions)
U.S. Credit
Card
 
Non-U.S.
Credit Card
 
Direct/Indirect
Consumer
 
Other
Consumer
(1)
Refreshed FICO score
 
 
 
 
 
 
 
Less than 620
$
6,188

 
$

 
$
1,896

 
$
668

Greater than or equal to 620 and less than 680
13,947

 

 
3,367

 
301

Greater than or equal to 680 and less than 740
37,167

 

 
9,592

 
232

Greater than or equal to 740
37,533

 

 
25,164

 
212

Other internal credit metrics (2, 3, 4)

 
11,697

 
43,186

 
215

Total credit card and other consumer
$
94,835

 
$
11,697

 
$
83,205

 
$
1,628


(1) 
87 percent of the other consumer portfolio is associated with portfolios from certain consumer finance businesses that the Corporation previously exited.
(2) 
Other internal credit metrics may include delinquency status, geography or other factors.
(3) 
Direct/indirect consumer includes $36.5 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $4.8 billion of loans the Corporation no longer originates.
(4) 
Non-U.S. credit card represents the U.K. credit card portfolio which is evaluated using internal credit metrics, including delinquency status. At December 31, 2012, 97 percent of this portfolio was current or less than 30 days past due, one percent was 30-89 days past due and two percent was 90 days or more past due.

Commercial – Credit Quality Indicators (1)
 
December 31, 2012
(Dollars in millions)
U.S.
Commercial
 
Commercial Real Estate
 
Commercial
Lease
Financing
 
Non-U.S.
Commercial
 
U.S. Small
Business
Commercial
(2)
Risk ratings
 
 
 
 
 
 
 
 
 
Pass rated
$
189,602

 
$
34,968

 
$
22,874

 
$
72,688

 
$
1,690

Reservable criticized
7,524

 
3,669

 
969

 
1,496

 
573

Refreshed FICO score (3)
 
 
 
 
 
 
 
 
 
Less than 620
 
 
 
 
 
 
 
 
400

Greater than or equal to 620 and less than 680
 
 
 
 
 
 
 
 
580

Greater than or equal to 680 and less than 740
 
 
 
 
 
 
 
 
1,553

Greater than or equal to 740
 
 
 
 
 
 
 
 
2,496

Other internal credit metrics (3, 4)
 
 
 
 
 
 
 
 
5,301

Total commercial
$
197,126

 
$
38,637

 
$
23,843

 
$
74,184

 
$
12,593


(1) 
Excludes $8.0 billion of loans accounted for under the fair value option.
(2) 
U.S. small business commercial includes $366 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2012, 98 percent of the balances where internal credit metrics are used was current or less than 30 days past due.
(3) 
Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio.
(4) 
Other internal credit metrics may include delinquency status, application scores, geography or other factors.

Impaired Loans and Troubled Debt Restructurings

Impaired Financing Receivables
The table below presents impaired loans in the Corporation's Home Loans portfolio segment at September 30, 2013 and December 31, 2012, and for the three and nine months ended September 30, 2013 and 2012, and includes primarily loans managed by Legacy Assets & Servicing. Certain impaired home loans do not have a related allowance as the current valuation of these impaired loans exceeded the carrying value.

Impaired Loans – Home Loans
 
 
 
 
 
September 30, 2013
 
December 31, 2012
(Dollars in millions)
 
 
 
 
Unpaid
Principal
Balance
 
Carrying
Value
 
Related
Allowance
 
Unpaid
Principal
Balance
 
Carrying
Value
 
Related
Allowance
With no recorded allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
 
 
 
$
22,528

 
$
17,165

 
n/a

 
$
20,226

 
$
14,967

 
n/a

Home equity
 
 
 
 
3,002

 
1,328

 
n/a

 
2,624

 
1,103

 
n/a

With an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
 
 
 
$
13,793

 
$
13,227

 
$
1,141

 
$
14,223

 
$
13,158

 
$
1,252

Home equity
 
 
 
 
1,069

 
886

 
343

 
1,256

 
1,022

 
448

Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
 
 
 
$
36,321

 
$
30,392

 
$
1,141

 
$
34,449

 
$
28,125

 
$
1,252

Home equity
 
 
 
 
4,071

 
2,214

 
343

 
3,880

 
2,125

 
448

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
 
2013
 
2012
 
2013
 
2012
 
Average
Carrying
Value
 
Interest
Income
Recognized
(1)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(1)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(1)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(1)
With no recorded allowance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
$
16,984

 
$
152

 
$
11,606

 
$
88

 
$
16,563

 
$
436

 
$
9,734

 
$
239

Home equity
1,286

 
19

 
819

 
13

 
1,208

 
55

 
603

 
32

With an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
$
14,027

 
$
173

 
$
11,435

 
$
97

 
$
14,221

 
$
451

 
$
11,361

 
$
305

Home equity
902

 
9

 
1,095

 
12

 
942

 
31

 
1,186

 
34

Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
$
31,011

 
$
325

 
$
23,041

 
$
185

 
$
30,784

 
$
887

 
$
21,095

 
$
544

Home equity
2,188

 
28

 
1,914

 
25

 
2,150

 
86

 
1,789

 
66

(1) 
Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible.
n/a = not applicable
Purchased Loans at Acquisition Date
PCI loans are acquired loans with evidence of credit quality deterioration since origination for which it is probable at purchase date that the Corporation will be unable to collect all contractually required payments. The following table provides details on PCI loans acquired in connection with the FNMA Settlement during the nine months ended September 30, 2013.

Purchased Loans at Acquisition Date
(Dollars in millions)
 
Contractually required payments including interest
$
8,274

Less: Nonaccretable difference
2,159

Cash flows expected to be collected (1)
6,115

Less: Accretable yield
1,125

Fair value of loans acquired
$
4,990

(1) 
Represents undiscounted expected principal and interest cash flows at acquisition.
Accretable Yield Activity
The table below shows activity for the accretable yield on PCI loans, which primarily includes the Countrywide Financial Corporation (Countrywide) portfolio and loans repurchased in connection with the FNMA Settlement. For more information on the FNMA Settlement, see Note 8 – Representations and Warranties Obligations and Corporate Guarantees. The amount of accretable yield is affected by changes in credit outlooks, including metrics such as default rates and loss severities, prepayments speeds, which can change the amount and period of time over which interest payments are expected to be received, and the interest rates on variable rate loans. The reclassifications from nonaccretable difference during the three and nine months ended September 30, 2013 were due to increases in expected cash flows driven by improved home prices and lower expected defaults, along with a decrease in prepayment speeds as a result of rising interest rates. Changes in the prepayment assumption affect the expected remaining life of the portfolio which results in a change to the amount of future interest cash flows.

Rollforward of Accretable Yield
(Dollars in millions)
Three Months Ended September 30, 2013
Nine Months Ended September 30, 2013
Accretable yield, beginning of period
$
6,775

$
4,644

Accretion
(303
)
(901
)
Loans purchased

1,125

Disposals/transfers
(81
)
(219
)
Reclassifications from nonaccretable difference
292

2,034

Accretable yield, September 30, 2013
$
6,683

$
6,683

Consumer Portfolio Segment [Member]
 
Loans and Leases Receivable, Net of Deferred Income [Abstract]  
Impaired Financing Receivables
The table below provides information on the Corporation's renegotiated TDR portfolio in the Credit Card and Other Consumer portfolio segment at September 30, 2013 and December 31, 2012, and for the three and nine months ended September 30, 2013 and 2012.

Impaired Loans – Credit Card and Other Consumer – Renegotiated TDRs
 
 
 
 
 
September 30, 2013
 
December 31, 2012
(Dollars in millions)
 
 
 
 
Unpaid
Principal
Balance
 
Carrying
Value
(1)
 
Related
Allowance
 
Unpaid
Principal
Balance
 
Carrying
Value
(1)
 
Related
Allowance
With an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. credit card
 
 
 
 
$
1,706

 
$
1,716

 
$
370

 
$
2,856

 
$
2,871

 
$
719

Non-U.S. credit card
 
 
 
 
246

 
250

 
161

 
311

 
316

 
198

Direct/Indirect consumer
 
 
 
 
351

 
352

 
104

 
633

 
636

 
210

Other consumer
 
 
 
 
28

 
27

 
10

 
30

 
30

 
12

Without an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct/Indirect consumer
 
 
 
 
81

 
37

 

 
105

 
58

 

Other consumer
 
 
 
 
34

 
34

 

 
35

 
35

 

Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. credit card
 
 
 
 
$
1,706

 
$
1,716

 
$
370

 
$
2,856

 
$
2,871

 
$
719

Non-U.S. credit card
 
 
 
 
246

 
250

 
161

 
311

 
316

 
198

Direct/Indirect consumer
 
 
 
 
432

 
389

 
104

 
738

 
694

 
210

Other consumer
 
 
 
 
62

 
61

 
10

 
65

 
65

 
12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
 
2013
 
2012
 
2013
 
2012
 
Average
Carrying
Value
 
Interest
Income
Recognized
(2)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(2)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(2)
 
Average
Carrying
Value
 
Interest
Income
Recognized
(2)
With an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. credit card
$
1,926

 
$
30

 
$
3,727

 
$
58

 
$
2,310

 
$
108

 
$
4,380

 
$
204

Non-U.S. credit card
254

 
2

 
447

 
2

 
274

 
6

 
509

 
7

Direct/Indirect consumer
406

 
5

 
864

 
12

 
498

 
20

 
1,003

 
41

Other consumer
27

 
1

 
30

 

 
28

 
2

 
32

 
1

Without an allowance recorded
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Direct/Indirect consumer
38

 

 

 

 
45

 

 

 

Other consumer
34

 

 
34

 
1

 
34

 
1

 
35

 
2

Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. credit card
$
1,926

 
$
30

 
$
3,727

 
$
58

 
$
2,310

 
$
108

 
$
4,380

 
$
204

Non-U.S. credit card
254

 
2

 
447

 
2

 
274

 
6

 
509

 
7

Direct/Indirect consumer
444

 
5

 
864

 
12

 
543

 
20

 
1,003

 
41

Other consumer
61

 
1

 
64

 
1

 
62

 
3

 
67

 
3

(1) 
Includes accrued interest and fees.
(2) 
Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible.
Remaining Unpaid Principal Balance, Carrying Amount And Excluding Valuation Reserve
The table below provides information on the Corporation's primary modification programs for the renegotiated TDR portfolio at September 30, 2013 and December 31, 2012.

Credit Card and Other Consumer – Renegotiated TDRs by Program Type
 
Internal Programs
 
External Programs
 
Other
 
Total
 
Percent of Balances Current or
Less Than 30 Days Past Due
(Dollars in millions)
September 30
2013
December 31
2012
 
September 30
2013
December 31
2012
 
September 30
2013
December 31
2012
 
September 30
2013
December 31
2012
 
September 30
2013
December 31
2012
U.S. credit card
$
1,016

$
1,887

 
$
681

$
953

 
$
19

$
31

 
$
1,716

$
2,871

 
83.74
%
81.48
%
Non-U.S. credit card
78

99

 
27

38

 
145

179

 
250

316

 
49.34

43.71

Direct/Indirect consumer
215

405

 
131

225

 
43

64

 
389

694

 
84.62

83.11

Other consumer
61

65

 


 


 
61

65

 
73.13

72.73

Total renegotiated TDRs
$
1,370

$
2,456

 
$
839

$
1,216

 
$
207

$
274

 
$
2,416

$
3,946

 
80.04

78.58

Renegotiated Troubled Debt Restructurings By Program Type
The table below provides information on the Corporation's renegotiated TDR portfolio including the unpaid principal balance, carrying value and average pre- and post-modification interest rates of loans that were modified in TDRs during the three and nine months ended September 30, 2013 and 2012, and net charge-offs that were recorded during the period in which the modification occurred.

Credit Card and Other Consumer – Renegotiated TDRs Entered into During the Three Months September 30, 2013 and 2012
 
September 30, 2013
 
Three Months Ended September 30, 2013
(Dollars in millions)
Unpaid Principal Balance
 
Carrying
Value (1)
 
Pre-Modification Interest Rate
 
Post-Modification Interest Rate
 
Net Charge-offs
U.S. credit card
$
100

 
$
102

 
16.86
%
 
5.70
%
 
$
2

Non-U.S. credit card
61

 
64

 
26.09

 
0.67

 
2

Direct/Indirect consumer
16

 
12

 
10.89

 
4.68

 
4

Other consumer
2

 
2

 
9.10

 
6.01

 

Total
$
179

 
$
180

 
19.65

 
3.85

 
$
8

 
 
 
 
 
 
 
 
 
 
 
September 30, 2012
 
Three Months Ended September 30, 2012
U.S. credit card
$
102

 
$
105

 
17.37
%
 
6.32
%
 
$
2

Non-U.S. credit card
90

 
94

 
26.13

 
0.77

 
4

Direct/Indirect consumer
14

 
14

 
15.40

 
3.90

 
2

Other consumer
2

 
2

 
9.91

 
6.17

 

Total
$
208

 
$
215

 
21.00

 
3.73

 
$
8

 
 
 
 
 
 
 
 
 
 
Credit Card and Other Consumer – Renegotiated TDRs Entered into During the Nine Months Ended September 30, 2013 and 2012
 
September 30, 2013
 
Nine Months Ended September 30, 2013
U.S. credit card
$
237

 
$
240

 
16.88
%
 
5.96
%
 
$
16

Non-U.S. credit card
138

 
143

 
26.04

 
0.87

 
78

Direct/Indirect consumer
41

 
31

 
11.17

 
4.90

 
12

Other consumer
4

 
5

 
9.35

 
5.40

 

Total
$
420

 
$
419

 
19.51

 
4.13

 
$
106

 
 
 
 
 
 
 
 
 
 
 
September 30, 2012
 
Nine Months Ended September 30, 2012
U.S. credit card
$
342

 
$
346

 
17.73