Loans Held-for-Investment (Tables)
|
9 Months Ended |
Sep. 30, 2016 |
|---|
| Receivables [Abstract] |
|
| Schedule of Loans Held-for-investment |
Loans held-for-investment are summarized as follows: | | | | | | | | | | September 30,
2016 | | December 31,
2015 | | (Dollars in millions) | Consumer loans | | | | Residential first mortgage | $ | 2,136 |
| | $ | 3,100 |
| Second mortgage | 127 |
| | 135 |
| HELOC | 326 |
| | 384 |
| Other | 30 |
| | 31 |
| Total consumer loans | 2,619 |
| | 3,650 |
| Commercial loans | | | | Commercial real estate (1) | 1,168 |
| | 814 |
| Commercial and industrial | 708 |
| | 552 |
| Warehouse lending | 1,795 |
| | 1,336 |
| Total commercial loans | 3,671 |
| | 2,702 |
| Total loans held-for-investment | $ | 6,290 |
| | $ | 6,352 |
|
| | (1) | Includes $252 million and $188 million of owner occupied commercial real estate loans at September 30, 2016 and December 31, 2015, respectively. |
|
| Allowance for Loan Losses |
The allowance for loan losses by class of loan are summarized in the following table: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential First Mortgage (1) | | Second Mortgage | | HELOC | | Other Consumer | | Commercial Real Estate | | Commercial and Industrial | | Warehouse Lending | | Total | | (Dollars in millions) | Three Months Ended September 30, 2016 | | | | | | | | | | | | | | | | Beginning balance allowance for loan losses | $ | 81 |
| | $ | 10 |
| | $ | 20 |
| | $ | 1 |
| | $ | 19 |
| | $ | 11 |
| | $ | 8 |
| | $ | 150 |
| Charge-offs (2) | (7 | ) | | — |
| | (1 | ) | | (1 | ) | | — |
| | — |
| | — |
| | (9 | ) | Recoveries | — |
| | — |
| | 1 |
| | 1 |
| | — |
| | — |
| | — |
| | 2 |
| Provision (benefit) (3) | (4 | ) | | (1 | ) | | (4 | ) | | — |
| | 6 |
| | 3 |
| | — |
| | — |
| Ending balance allowance for loan losses | $ | 70 |
| | $ | 9 |
| | $ | 16 |
| | $ | 1 |
| | $ | 25 |
| | $ | 14 |
| | $ | 8 |
| | $ | 143 |
| Three Months Ended September 30, 2015 | | | | | | | | | | | | | | | | Beginning balance allowance for loan losses | $ | 151 |
| | $ | 14 |
| | $ | 25 |
| | $ | 1 |
| | $ | 15 |
| | $ | 12 |
| | $ | 4 |
| | $ | 222 |
| Charge-offs (2) | (21 | ) | | (1 | ) | | (1 | ) | | (1 | ) | | — |
| | (3 | ) | | — |
| | (27 | ) | Recoveries | 1 |
| | 1 |
| | — |
| | 1 |
| | — |
| | — |
| | — |
| | 3 |
| Provision (benefit) | (2 | ) | | (1 | ) | | (1 | ) | | — |
| | (2 | ) | | 5 |
| | — |
| | (1 | ) | Ending balance allowance for loan losses | $ | 129 |
| | $ | 13 |
|
| $ | 23 |
|
| $ | 1 |
|
| $ | 13 |
|
| $ | 14 |
|
| $ | 4 |
|
| $ | 197 |
| | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2016 | | | | | | | | | | | | | | | | Beginning balance allowance for loan losses | $ | 116 |
| | $ | 11 |
| | $ | 21 |
| | $ | 2 |
| | $ | 18 |
| | $ | 13 |
| | $ | 6 |
| | $ | 187 |
| Charge-offs (2) | (26 | ) | | (2 | ) | | (2 | ) | | (3 | ) | | — |
| | — |
| | — |
| | (33 | ) | Recoveries | 1 |
| | 1 |
| | 1 |
| | 2 |
| | — |
| | — |
| | — |
| | 5 |
| Provision (benefit) (3) | (21 | ) | | (1 | ) | | (4 | ) | | — |
| | 7 |
| | 1 |
| | 2 |
| | (16 | ) | Ending balance allowance for loan losses | $ | 70 |
| | $ | 9 |
| | $ | 16 |
| | $ | 1 |
| | $ | 25 |
| | $ | 14 |
| | $ | 8 |
| | $ | 143 |
| Nine Months Ended September 30, 2015 | | | | | | | | | | | | | | | | Beginning balance allowance for loan losses | $ | 234 |
| | $ | 12 |
| | $ | 19 |
| | $ | 1 |
| | $ | 17 |
| | $ | 11 |
| | $ | 3 |
| | $ | 297 |
| Charge-offs (2) | (80 | ) | | (2 | ) | | (2 | ) | | (3 | ) | | — |
| | (3 | ) | | — |
| | (90 | ) | Recoveries | 3 |
| | 1 |
| | — |
| | 2 |
| | 2 |
| | — |
| | — |
| | 8 |
| Provision (benefit) | (28 | ) | | 2 |
| | 6 |
| | 1 |
| | (6 | ) | | 6 |
| | 1 |
| | (18 | ) | Ending balance allowance for loan losses | $ | 129 |
| | $ | 13 |
| | $ | 23 |
| | $ | 1 |
| | $ | 13 |
| | $ | 14 |
| | $ | 4 |
| | $ | 197 |
|
| | (1) | Includes allowance and charge-offs related to loans with government guarantees. |
| | (2) | Includes charge-offs of zero and $16 million related to the transfer and subsequent sale of loans during the three months ended September 30, 2016 and September 30, 2015, respectively, and $8 million and $67 million related to the sale of loans during the nine months ended September 30, 2016 and September 30, 2015, respectively. Also includes charge-offs related to loans with government guarantees of $6 million and $13 million during the three and nine months ended September 30, 2016, respectively. |
| | (3) | Does not include $7 million provision for loan losses recorded in the Consolidated Statements of Operations to reserve for repossessed loans with government guarantees during the three and nine months ended September 30, 2016. |
The loans held-for-investment and allowance for loan losses by class of loan is summarized in the following table: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Residential First Mortgage (1) | | Second Mortgage | | HELOC | | Other Consumer | | Commercial Real Estate | | Commercial and Industrial | | Warehouse Lending | | Total | | (Dollars in millions) | September 30, 2016 | | | | | | | | | | | | | | | | Loans held-for-investment | | | | | | | | | | | | | | | | Individually evaluated | $ | 42 |
| | $ | 26 |
| | $ | 4 |
| | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | — |
| | $ | 73 |
| Collectively evaluated (2) | 2,087 |
| | 60 |
| | 291 |
| | 30 |
| | 1,168 |
| | 707 |
| | 1,795 |
| | 6,138 |
| Total loans | $ | 2,129 |
| | $ | 86 |
|
| $ | 295 |
|
| $ | 30 |
|
| $ | 1,168 |
|
| $ | 708 |
|
| $ | 1,795 |
|
| $ | 6,211 |
| Allowance for loan losses | | | | | | | | | | | | | | | | Individually evaluated | $ | 7 |
| | $ | 6 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 14 |
| Collectively evaluated (2) | 63 |
| | 3 |
| | 15 |
| | 1 |
| | 25 |
| | 14 |
| | 8 |
| | 129 |
| Total allowance for loan losses | $ | 70 |
| | $ | 9 |
|
| $ | 16 |
|
| $ | 1 |
|
| $ | 25 |
|
| $ | 14 |
|
| $ | 8 |
|
| $ | 143 |
| | | | | | | | | | | | | | | | | December 31, 2015 | | | | | | | | | | | | | | | | Loans held-for-investment | | | | | | | | | | | | | | | | Individually evaluated | $ | 87 |
| | $ | 28 |
| | $ | 3 |
| | $ | — |
| | $ | — |
| | $ | 2 |
| | $ | — |
| | $ | 120 |
| Collectively evaluated (2) | 3,007 |
| | 65 |
| | 318 |
| | 31 |
| | 814 |
| | 550 |
| | 1,336 |
| | 6,121 |
| Total loans | $ | 3,094 |
| | $ | 93 |
| | $ | 321 |
| | $ | 31 |
| | $ | 814 |
| | $ | 552 |
| | $ | 1,336 |
| | $ | 6,241 |
| Allowance for loan losses | | | | | | | | | | | | | | | | Individually evaluated | $ | 12 |
| | $ | 6 |
| | $ | 1 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 20 |
| Collectively evaluated (2) | 104 |
| | 5 |
| | 20 |
| | 1 |
| | 18 |
| | 13 |
| | 6 |
| | 167 |
| Total allowance for loan losses | $ | 116 |
| | $ | 11 |
| | $ | 21 |
| | $ | 2 |
| | $ | 18 |
| | $ | 13 |
| | $ | 6 |
| | $ | 187 |
|
| | (1) | Includes allowance related to loans with government guarantees. |
| | (2) | Excludes loans carried under the fair value option |
|
| Past Due Loans |
following table sets forth the loans held-for-investment aging analysis as of September 30, 2016 and December 31, 2015, of past due and current loans: | | | | | | | | | | | | | | | | | | | | | | | | | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or Greater Past Due (1) | | Total Past Due | | Current | | Total Investment Loans | | (Dollars in millions) | September 30, 2016 | | | | | | | | | | | | Consumer loans | | | | | | | | | | | | Residential first mortgage | $ | 4 |
| | $ | 1 |
| | $ | 29 |
| | $ | 34 |
| | $ | 2,102 |
| | $ | 2,136 |
| Second mortgage | — |
| | — |
| | 4 |
| | 4 |
| | 123 |
| | 127 |
| HELOC | 1 |
| | — |
| | 7 |
| | 8 |
| | 318 |
| | 326 |
| Other | 1 |
| | 1 |
| | — |
| | 2 |
| | 28 |
| | 30 |
| Total consumer loans | 6 |
| | 2 |
| | 40 |
| | 48 |
| | 2,571 |
| | 2,619 |
| Commercial loans | | | | | | | | | | | | Commercial real estate | — |
| | — |
| | — |
| | — |
| | 1,168 |
| | 1,168 |
| Commercial and industrial | — |
| | — |
| | — |
| | — |
| | 708 |
| | 708 |
| Warehouse lending | — |
| | — |
| | — |
| | — |
| | 1,795 |
| | 1,795 |
| Total commercial loans | — |
| | — |
| | — |
| | — |
| | 3,671 |
| | 3,671 |
| Total loans (2) | $ | 6 |
| | $ | 2 |
| | $ | 40 |
| | $ | 48 |
| | $ | 6,242 |
| | $ | 6,290 |
| December 31, 2015 | | | | | | | | | | | | Consumer loans | | | | | | | | | | | | Residential first mortgage | $ | 7 |
| | $ | 3 |
| | $ | 53 |
| | $ | 63 |
| | $ | 3,037 |
| | $ | 3,100 |
| Second mortgage | — |
| | — |
| | 2 |
| | 2 |
| | 133 |
| | 135 |
| HELOC | 2 |
| | 1 |
| | 9 |
| | 12 |
| | 372 |
| | 384 |
| Other | 1 |
| | — |
| | — |
| | 1 |
| | 30 |
| | 31 |
| Total consumer loans | 10 |
| | 4 |
| | 64 |
| | 78 |
| | 3,572 |
| | 3,650 |
| Commercial loans | | | | | | | | | | | | Commercial real estate | — |
| | — |
| | — |
| | — |
| | 814 |
| | 814 |
| Commercial and industrial | — |
| | — |
| | 2 |
| | 2 |
| | 550 |
| | 552 |
| Warehouse lending | — |
| | — |
| | — |
| | — |
| | 1,336 |
| | 1,336 |
| Total commercial loans | — |
| | — |
| | 2 |
| | 2 |
| | 2,700 |
| | 2,702 |
| Total loans (2) | $ | 10 |
| | $ | 4 |
| | $ | 66 |
| | $ | 80 |
| | $ | 6,272 |
| | $ | 6,352 |
|
| | (1) | Includes loans that are less than 90 days past due, which have been placed on nonaccrual. |
| | (2) | Includes $12 million and $10 million of loans 90 days or greater past due, accounted for under the fair value option at September 30, 2016 and December 31, 2015, respectively. |
|
| Troubled Debt Restructurings |
The following table provides a summary of TDRs outstanding by type and performing status: | | | | | | | | | | | | | | TDRs | | Performing | | Nonperforming | | Total | September 30, 2016 | (Dollars in millions) | Consumer loans | | | | | | Residential first mortgage | $ | 23 |
| | $ | 10 |
| | $ | 33 |
| Second mortgage | 33 |
| | 3 |
| | 36 |
| HELOC | 14 |
| | 4 |
| | 18 |
| Total consumer loans | 70 |
| | 17 |
| | 87 |
| Commercial loans | | | | | | Commercial and industrial | 1 |
| | — |
| | 1 |
| Total commercial loans | 1 |
| | — |
| | 1 |
| Total TDRs (1)(2) | $ | 71 |
| | $ | 17 |
| | $ | 88 |
| | | | | | | December 31, 2015 | | | | | | Consumer loans | | | | | | Residential first mortgage | $ | 49 |
| | $ | 27 |
| | $ | 76 |
| Second mortgage | 32 |
| | 1 |
| | 33 |
| HELOC | 20 |
| | 7 |
| | 27 |
| Total TDRs (1)(2) | $ | 101 |
| | $ | 35 |
| | $ | 136 |
|
| | (1) | The allowance for loan losses on consumer TDR loans totaled $11 million and $15 million at September 30, 2016 and December 31, 2015, respectively. |
| | (2) | Includes $26 million and $32 million of TDR loans accounted for under the fair value option at September 30, 2016 and December 31, 2015, respectively. |
The following table provides a summary of newly modified TDRs during the three and nine months ended September 30, 2016 and 2015. | | | | | | | | | | | | | | | | | New TDRs | | Number of Accounts | | Pre-Modification Unpaid Principal Balance | | Post-Modification Unpaid Principal Balance (1) | | Increase in Allowance at Modification | Three Months Ended September 30, 2016 | | | (Dollars in millions) | Residential first mortgages | 1 |
| | $ | — |
| | $ | — |
| | $ | — |
| Second mortgages | 16 |
| | 1 |
| | 1 |
| | — |
| HELOC (2)(3) | 1 |
| | — |
| | — |
| | — |
| Total TDR loans | 18 |
| | $ | 1 |
|
| $ | 1 |
| | $ | — |
| | | | | | | | | Three Months Ended September 30, 2015 | | | | Residential first mortgages | 48 |
| | $ | 13 |
| | $ | 14 |
| | $ | — |
| Second mortgages | 15 |
| | 1 |
| | 1 |
| | — |
| HELOC (2) | 46 |
| | 4 |
| | 4 |
| | — |
| Total TDR loans | 109 |
| | $ | 18 |
| | $ | 19 |
| | $ | — |
| | | | | | | | | Nine Months Ended September 30, 2016 |
| | | | | | | Residential first mortgages | 17 |
| | $ | 3 |
| | $ | 4 |
| | $ | — |
| Second mortgages | 42 |
| | 2 |
| | 2 |
| | — |
| HELOC (2)(3) | 86 |
| | 6 |
| | 5 |
| | — |
| Commercial and industrial | 1 |
| | 2 |
| | 1 |
| | — |
| Total TDR loans | 146 |
| | $ | 13 |
| | $ | 12 |
| | $ | — |
| | | | | | | | | Nine Months Ended September 30, 2015 |
| | | | | | | Residential first mortgages | 239 |
| | $ | 66 |
| | $ | 65 |
| | $ | (1 | ) | Second mortgages | 83 |
| | 4 |
| | 3 |
| | — |
| HELOC (2)(3) | 204 |
| | 12 |
| | 11 |
| | — |
| Other consumer | 3 |
| | — |
| | — |
| | — |
| Total TDR loans | 529 |
| | $ | 82 |
| | $ | 79 |
| | $ | (1 | ) |
| | (1) | Post-modification balances include past due amounts that are capitalized at modification date. |
| | (2) | HELOC post-modification unpaid principal balance reflects write downs. |
| | (3) | Includes loans carried at the fair value option. |
The following table provides a summary of TDR loans that were modified within the previous 12 months, which subsequently defaulted during the three and nine months ended September 30, 2016 and 2015. All TDR classes within consumer and commercial loan portfolios are considered subsequently defaulted when they are greater than 90 days past due. | | | | | | | | | | | | | TDRs that were modified in the previous 12 months, which have subsequently defaulted | | Number of Accounts | | Unpaid Principal Balance | | Increase in Allowance at Subsequent Default | Three Months Ended September 30, 2016 | (Dollars in millions) | HELOC (1) | 3 |
| | $ | — |
| | $ | — |
| Total TDR loans | 3 |
| | $ | — |
| | $ | — |
| Three Months Ended September 30, 2015 | | | | | | Residential first mortgages | 1 |
| | $ | — |
| | $ | — |
| Total TDR loans | 1 |
| | $ | — |
| | $ | — |
| Nine Months Ended September 30, 2016 | | | | | | Residential first mortgages | 1 |
| | $ | — |
| | $ | — |
| HELOC (1) | 7 |
| | — |
| | — |
| Total TDR loans | 8 |
| | $ | — |
| | $ | — |
| Nine Months Ended September 30, 2015 | | | | | | Residential first mortgages | 1 |
| | $ | — |
| | $ | — |
| Second mortgages | 1 |
| | — |
| | — |
| Total TDR loans | 2 |
| | $ | — |
| | $ | — |
|
| | (1) | HELOC post-modification unpaid principal balance reflects write downs. |
|
| Impaired Loans |
The following table presents individually evaluated impaired loans and the associated allowance: | | | | | | | | | | | | | | | | | | | | | | | | | | September 30, 2016 | | December 31, 2015 | | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | Recorded Investment | | Unpaid Principal Balance | | Related Allowance | | (Dollars in millions) | With no related allowance recorded | | | | | | | | | | | | Consumer loans | | | | | | | | | | | | Residential first mortgage | $ | 2 |
| | $ | 1 |
| | $ | — |
| | $ | 20 |
| | $ | 20 |
| | $ | — |
| Commercial loans | | | | | | | | | | | | Commercial and industrial | 1 |
| | 1 |
| | — |
| | 5 |
| | 2 |
| | — |
| | $ | 3 |
| | $ | 2 |
| | $ | — |
| | $ | 25 |
| | $ | 22 |
| | $ | — |
| With an allowance recorded | | | | | | | | | | | | Consumer loans | | | | | | | | | | | | Residential first mortgage | $ | 40 |
| | $ | 41 |
| | $ | 7 |
| | $ | 65 |
| | $ | 67 |
| | $ | 12 |
| Second mortgage | 26 |
| | 26 |
| | 6 |
| | 28 |
| | 28 |
| | 6 |
| HELOC | 4 |
| | 4 |
| | 2 |
| | 3 |
| | 3 |
| | 1 |
| Other consumer | — |
| | — |
| | — |
| | — |
| | — |
| | 1 |
| | $ | 70 |
| | $ | 71 |
| | $ | 15 |
| | $ | 96 |
| | $ | 98 |
| | $ | 20 |
| Total | | | | | | | | | | | | Consumer loans | | | | | | | | | | | | Residential first mortgage | $ | 42 |
| | $ | 42 |
| | $ | 7 |
| | $ | 85 |
| | $ | 87 |
| | $ | 12 |
| Second mortgage | 26 |
| | 26 |
| | 6 |
| | 28 |
| | 28 |
| | 6 |
| HELOC | 4 |
| | 4 |
| | 2 |
| | 3 |
| | 3 |
| | 1 |
| Other consumer | — |
| | — |
| | — |
| | — |
| | — |
| | 1 |
| Commercial loans | | | | | | | | | | | | Commercial and industrial | 1 |
| | 1 |
| | — |
| | 5 |
| | 2 |
| | — |
| Total impaired loans | $ | 73 |
| | $ | 73 |
| | $ | 15 |
| | $ | 121 |
| | $ | 120 |
| | $ | 20 |
|
The following table presents average impaired loans and the interest income recognized: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | 2016 | | 2015 | | 2016 | | 2015 | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | Average Recorded Investment | | Interest Income Recognized | | (Dollars in millions) | Consumer loans | | | | | | | | | | | | | | | | Residential first mortgage | $ | 43 |
| | $ | — |
| | $ | 96 |
| | $ | 1 |
| | $ | 55 |
| | $ | 1 |
| | $ | 172 |
| | $ | 4 |
| Second mortgage | 25 |
| | — |
| | 29 |
| | — |
| | 26 |
| | 1 |
| | 30 |
| | — |
| HELOC | 5 |
| | — |
| | 15 |
| | — |
| | 5 |
| | — |
| | 6 |
| | — |
| Commercial loans | | | | | | | | | | | | | | | | Commercial and industrial | 1 |
| | — |
| | 2 |
| | — |
| | 2 |
| | — |
| | 1 |
| | — |
| Total impaired loans | $ | 74 |
| | $ | — |
| | $ | 142 |
| | $ | 1 |
| | $ | 88 |
| | $ | 2 |
| | $ | 209 |
| | $ | 4 |
|
|
| Loan Credit Quality Indicators |
In accordance with regulatory guidance, we assign risk ratings to consumer loans in the following manner: •Consumer loans are classified as Watch once the loan becomes 60 days past due. •Open and closed-end consumer loans 90 days or more past due are classified Substandard.
| | | | | | | | | | | | | | | | | Commercial Credit Loans | Commercial Real Estate | | Commercial and Industrial | | Warehouse | | Total Commercial | September 30, 2016 | (Dollars in millions) | Grade | | | | | | | | Pass | $ | 1,122 |
| | $ | 654 |
| | $ | 1,659 |
| | $ | 3,435 |
| Watch | 37 |
| | 20 |
| | 86 |
| | 143 |
| Special mention | 3 |
| | 33 |
| | 50 |
| | 86 |
| Substandard | 6 |
| | 1 |
| | — |
| | 7 |
| Total loans | $ | 1,168 |
| | $ | 708 |
| | $ | 1,795 |
| | $ | 3,671 |
| | | | | | | | | December 31, 2015 | | | | | | | | Grade | | | | | | | | Pass | $ | 766 |
| | $ | 492 |
| | $ | 1,181 |
| | $ | 2,439 |
| Watch | 42 |
| | 30 |
| | 155 |
| | 227 |
| Special mention | 2 |
| | 21 |
| | — |
| | 23 |
| Substandard | 4 |
| | 9 |
| | — |
| | 13 |
| Total loans | $ | 814 |
| | $ | 552 |
| | $ | 1,336 |
| | $ | 2,702 |
|
| | | | | | | | | | | | | | | | | | | | | Consumer Credit Loans | Residential First Mortgage | | Second Mortgage | | HELOC | | Other Consumer | | Total | September 30, 2016 | (Dollars in millions) | Grade | | | | | | | | | | Pass | $ | 2,081 |
| | $ | 90 |
| | $ | 305 |
| | $ | 29 |
| | $ | 2,505 |
| Watch | 24 |
| | 33 |
| | 14 |
| | 1 |
| | 72 |
| Substandard | 31 |
| | 4 |
| | 7 |
| | — |
| | 42 |
| Total loans | $ | 2,136 |
| | $ | 127 |
| | $ | 326 |
| | $ | 30 |
| | $ | 2,619 |
| | | | | | | | | | | December 31, 2015 | | Grade | | | | | | | | | | Pass | $ | 2,993 |
| | $ | 101 |
| | $ | 353 |
| | $ | 31 |
| | $ | 3,478 |
| Watch | 49 |
| | 32 |
| | 22 |
| | — |
| | 103 |
| Substandard | 58 |
| | 2 |
| | 9 |
| | — |
| | 69 |
| Total loans | $ | 3,100 |
| | $ | 135 |
| | $ | 384 |
| | $ | 31 |
| | $ | 3,650 |
|
|