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Loans | 12 Months Ended
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Dec. 31, 2023
Receivables [Abstract] |
Loans |
NOTE 3—LOANS
Our loan portfolio consists of loans held for investment, including loans held in our consolidated trusts, and loans held for sale. We further divide our loans held for investment into three portfolio segments: Credit Card, Consumer Banking and Commercial Banking. Credit card loans consist of domestic and international credit card loans. Consumer banking loans consist of auto and retail banking loans. Commercial banking loans consist of commercial and multifamily real estate as well as commercial and industrial loans. The information presented in the tables in this note excludes loans held for sale, which are carried at either fair value (if we elect the fair value option) or at the lower of cost or fair value. Accrued interest receivable of $2.2 billion and $1.9 billion as of December 31, 2023 and 2022, respectively, is not included in the tables in this note. The table below presents the composition and aging analysis of our loans held for investment portfolio as of December 31, 2023 and 2022. The delinquency aging includes all past due loans, both performing and nonperforming. Table 3.1: Loan Portfolio Composition and Aging Analysis
|  | December 31, 2023
|  |  |  | Delinquent Loans |  |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 140,860 |  | $ | 1,968 |  | $ | 1,471 |  | $ | 3,367 |  | $ | 6,806 |  | $ | 147,666
International card businesses |  | 6,552 |  | 116 |  | 76 |  | 137 |  | 329 |  | 6,881
Total credit card |  | 147,412 |  | 2,084 |  | 1,547 |  | 3,504 |  | 7,135 |  | 154,547
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 68,768 |  | 3,268 |  | 1,555 |  | 484 |  | 5,307 |  | 74,075
Retail banking |  | 1,329 |  | 15 |  | 3 |  | 15 |  | 33 |  | 1,362
Total consumer banking |  | 70,097 |  | 3,283 |  | 1,558 |  | 499 |  | 5,340 |  | 75,437
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 34,325 |  | 0 |  | 14 |  | 107 |  | 121 |  | 34,446
Commercial and industrial |  | 55,861 |  | 0 |  | 0 |  | 181 |  | 181 |  | 56,042
Total commercial banking |  | 90,186 |  | 0 |  | 14 |  | 288 |  | 302 |  | 90,488
Total loans(1) |  | $ | 307,695 |  | $ | 5,367 |  | $ | 3,119 |  | $ | 4,291 |  | $ | 12,777 |  | $ | 320,472
% of Total loans |  | 96.01% |  | 1.68% |  | 0.97% |  | 1.34% |  | 3.99% |  | 100.00%
|  | December 31, 2022
|  |  |  | Delinquent Loans |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 127,066 |  | $ | 1,405 |  | $ | 975 |  | $ | 2,135 |  |  | $ | 4,515 |  |  | $ | 131,581 |
International card businesses |  | 5,895 |  | 86 |  | 58 |  | 110 |  |  | 254 |  |  | 6,149 |
Total credit card |  | 132,961 |  | 1,491 |  | 1,033 |  | 2,245 |  |  | 4,769 |  |  | 137,730 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 73,467 |  | 3,101 |  | 1,418 |  | 387 |  |  | 4,906 |  |  | 78,373 |
Retail banking |  | 1,518 |  | 13 |  | 4 |  | 17 |  |  | 34 |  |  | 1,552 |
Total consumer banking |  | 74,985 |  | 3,114 |  | 1,422 |  | 404 |  |  | 4,940 |  |  | 79,925 |
|  | December 31, 2022
|  |  |  | Delinquent Loans |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | Total Loans
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 37,417 |  | 0 |  | 1 |  | 35 |  | 36 |  | 37,453
Commercial and industrial |  | 56,942 |  | 61 |  | 55 |  | 165 |  | 281 |  | 57,223
Total commercial banking |  | 94,359 |  | 61 |  | 56 |  | 200 |  | 317 |  | 94,676
Total loans(1) |  | $ | 302,305 |  | $ | 4,666 |  | $ | 2,511 |  | $ | 2,849 |  | $ | 10,026 |  | $ | 312,331
% of Total loans |  | 96.79% |  | 1.50% |  | 0.80% |  | 0.91% |  | 3.21% |  | 100.00%
__________ (1)Loans include unamortized premiums, discounts, and deferred fees and costs totaling $1.4 billion as of both December 31, 2023 and 2022 The following table presents our loans held for investment that are 90 days or more past due that continue to accrue interest, loans that are classified as nonperforming and loans that are classified as nonperforming without an allowance as of December 31, 2023 and 2022. Nonperforming loans generally include loans that have been placed on nonaccrual status. Table 3.2: 90+ Day Delinquent Loans Accruing Interest and Nonperforming Loans
|  | December 31, 2023 |  | December 31, 2022
(Dollars in millions) |  | > 90 Days and Accruing |  | Nonperforming Loans(1) |  | Nonperforming Loans Without an Allowance |  | > 90 Days and Accruing |  | Nonperforming Loans(1) |  | Nonperforming Loans Without an Allowance
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 3,367 |  |  | N/A |  | $ | 0 |  |  | $ | 2,135 |  |  | N/A |  | $ | 0 |
International card businesses |  | 132 |  |  | $ | 9 |  |  | 0 |  |  | 105 |  |  | $ | 9 |  |  | 0 |
Total credit card |  | 3,499 |  |  | 9 |  |  | 0 |  |  | 2,240 |  |  | 9 |  |  | 0 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 0 |  |  | 712 |  |  | 0 |  |  | 0 |  |  | 595 |  |  | 0 |
Retail banking |  | 0 |  |  | 46 |  |  | 19 |  |  | 0 |  |  | 39 |  |  | 8 |
Total consumer banking |  | 0 |  |  | 758 |  |  | 19 |  |  | 0 |  |  | 634 |  |  | 8 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 0 |  |  | 425 |  |  | 335 |  |  | 0 |  |  | 271 |  |  | 246 |
Commercial and industrial |  | 55 |  |  | 336 |  |  | 193 |  |  | 0 |  |  | 430 |  |  | 294 |
Total commercial banking |  | 55 |  |  | 761 |  |  | 528 |  |  | 0 |  |  | 701 |  |  | 540 |
Total |  | $ | 3,554 |  |  | $ | 1,528 |  |  | $ | 547 |  |  | $ | 2,240 |  |  | $ | 1,344 |  |  | $ | 548 |
% of Total loans held for investment |  | 1.11 | % |  | 0.48 | % |  | 0.17 | % |  | 0.72 | % |  | 0.43 | % |  | 0.18 | %
__________ (1)We recognized interest income for loans classified as nonperforming of $91 million and $66 million for the years ended December 31, 2023 and 2022, respectively Credit Quality Indicators We closely monitor economic conditions and loan performance trends to assess and manage our exposure to credit risk. We discuss these risks and our credit quality indicator for each portfolio segment below. Credit Card Our credit card loan portfolio is highly diversified across millions of accounts and numerous geographies without significant individual exposure. We therefore generally manage credit risk based on portfolios with common risk characteristics. The risk in our credit card loan portfolio correlates to broad economic trends, such as the U.S. unemployment rate and U.S. Real Gross Domestic Product (“GDP”) growth rate, as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we assess in monitoring the credit quality and risk of our credit card loan portfolio is delinquency trends, including an analysis of loan migration between delinquency categories over time. The table below presents our credit card portfolio by delinquency status as of December 31, 2023 and 2022. Table 3.3: Credit Card Delinquency Status
|  |  |  | December 31, 2023 |  | December 31, 2022
(Dollars in millions) |  |  |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  | $ | 140,521 |  |  | $ | 339 |  |  | $ | 140,860 |  |  | $ | 126,811 |  |  | $ | 255 |  |  | $ | 127,066 |
30-59 days |  |  |  | 1,940 |  |  | 28 |  |  | 1,968 |  |  | 1,388 |  |  | 17 |  |  | 1,405 |
60-89 days |  |  |  | 1,454 |  |  | 17 |  |  | 1,471 |  |  | 964 |  |  | 11 |  |  | 975 |
Greater than 90 days |  |  |  | 3,339 |  |  | 28 |  |  | 3,367 |  |  | 2,121 |  |  | 14 |  |  | 2,135 |
Total domestic credit card |  |  |  | 147,254 |  |  | 412 |  |  | 147,666 |  |  | 131,284 |  |  | 297 |  |  | 131,581 |
International card businesses: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  |  | 6,521 |  |  | 31 |  |  | 6,552 |  |  | 5,866 |  |  | 29 |  |  | 5,895 |
30-59 days |  |  |  | 112 |  |  | 4 |  |  | 116 |  |  | 83 |  |  | 3 |  |  | 86 |
60-89 days |  |  |  | 72 |  |  | 4 |  |  | 76 |  |  | 55 |  |  | 3 |  |  | 58 |
Greater than 90 days |  |  |  | 132 |  |  | 5 |  |  | 137 |  |  | 106 |  |  | 4 |  |  | 110 |
Total international card businesses |  |  |  | 6,837 |  |  | 44 |  |  | 6,881 |  |  | 6,110 |  |  | 39 |  |  | 6,149 |
Total credit card |  |  |  | $ | 154,091 |  |  | $ | 456 |  |  | $ | 154,547 |  |  | $ | 137,394 |  |  | $ | 336 |  |  | $ | 137,730 |
Consumer Banking Our consumer banking loan portfolio consists of auto and retail banking loans. Similar to our credit card loan portfolio, the risk in our consumer banking loan portfolio correlates to broad economic trends as well as consumers’ financial condition, all of which can have a material effect on credit performance. The key indicator we consider when assessing the credit quality and risk of our auto loan portfolio is borrower credit scores as they measure the creditworthiness of borrowers. Delinquency trends are the key indicator we assess in monitoring the credit quality and risk of our retail banking loan portfolio. The table below presents our consumer banking portfolio of loans held for investment by credit quality indicator as of December 31, 2023 and 2022. We present our auto loan portfolio by Fair Isaac Corporation (“FICO”) scores at origination and our retail banking loan portfolio by delinquency status, which includes all past due loans, both performing and nonperforming. Table 3.4: Consumer Banking Portfolio by Vintage Year
|  | December 31, 2023 |  |
|  | Term Loans by Vintage Year |  |  |  |  |  |  |  |
(Dollars in millions) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total |  |
Auto—At origination FICO scores:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Greater than 660 |  | $ | 12,219 |  |  | $ | 12,593 |  |  | $ | 9,505 |  |  | $ | 3,124 |  |  | $ | 1,213 |  |  | $ | 309 |  |  | $ | 38,963 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 38,963 |  |  |
621-660 |  | 4,863 |  |  | 4,432 |  |  | 3,346 |  |  | 1,337 |  |  | 592 |  |  | 192 |  |  | 14,762 |  |  | 0 |  |  | 0 |  |  | 14,762 |  |  |
620 or below |  | 6,647 |  |  | 5,539 |  |  | 4,283 |  |  | 2,349 |  |  | 1,131 |  |  | 401 |  |  | 20,350 |  |  | 0 |  |  | 0 |  |  | 20,350 |  |  |
Total auto |  | 23,729 |  |  | 22,564 |  |  | 17,134 |  |  | 6,810 |  |  | 2,936 |  |  | 902 |  |  | 74,075 |  |  | 0 |  |  | 0 |  |  | 74,075 |  |  |
Retail banking—Delinquency status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 98 |  |  | 157 |  |  | 57 |  |  | 65 |  |  | 117 |  |  | 468 |  |  | 962 |  |  | 363 |  |  | 4 |  |  | 1,329 |  |  |
30-59 days |  | 1 |  |  | 0 |  |  | 1 |  |  | 1 |  |  | 0 |  |  | 1 |  |  | 4 |  |  | 11 |  |  | 0 |  |  | 15 |  |  |
60-89 days |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1 |  |  | 1 |  |  | 2 |  |  | 0 |  |  | 3 |  |  |
Greater than 90 days |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 8 |  |  | 8 |  |  | 6 |  |  | 1 |  |  | 15 |  |  |
Total retail banking |  | 99 |  |  | 157 |  |  | 58 |  |  | 66 |  |  | 117 |  |  | 478 |  |  | 975 |  |  | 382 |  |  | 5 |  |  | 1,362 |  |  |
Total consumer banking |  | $ | 23,828 |  |  | $ | 22,721 |  |  | $ | 17,192 |  |  | $ | 6,876 |  |  | $ | 3,053 |  |  | $ | 1,380 |  |  | $ | 75,050 |  |  | $ | 382 |  |  | $ | 5 |  |  | $ | 75,437 |  |  |
|  | December 31, 2022
|  | Term Loans by Vintage Year |  |  |  |  |  |
(Dollars in millions) |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Auto—At origination FICO scores:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Greater than 660 |  | $ | 17,872 |  |  | $ | 14,246 |  |  | $ | 5,354 |  |  | $ | 2,595 |  |  | $ | 1,032 |  |  | $ | 328 |  |  | $ | 41,427 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 41,427 |
621-660 |  | 6,212 |  |  | 5,060 |  |  | 2,257 |  |  | 1,167 |  |  | 513 |  |  | 185 |  |  | 15,394 |  |  | 0 |  |  | 0 |  |  | 15,394 |
620 or below |  | 7,717 |  |  | 6,501 |  |  | 3,898 |  |  | 2,144 |  |  | 914 |  |  | 378 |  |  | 21,552 |  |  | 0 |  |  | 0 |  |  | 21,552 |
Total auto |  | 31,801 |  |  | 25,807 |  |  | 11,509 |  |  | 5,906 |  |  | 2,459 |  |  | 891 |  |  | 78,373 |  |  | 0 |  |  | 0 |  |  | 78,373 |
Retail banking—Delinquency status: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  | 166 |  |  | 128 |  |  | 82 |  |  | 133 |  |  | 127 |  |  | 470 |  |  | 1,106 |  |  | 408 |  |  | 4 |  |  | 1,518 |
30-59 days |  | 2 |  |  | 1 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 2 |  |  | 5 |  |  | 8 |  |  | 0 |  |  | 13 |
60-89 days |  | 0 |  |  | 1 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 1 |  |  | 2 |  |  | 2 |  |  | 0 |  |  | 4 |
Greater than 90 days |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 8 |  |  | 11 |  |  | 4 |  |  | 2 |  |  | 17 |
Total retail banking |  | 168 |  |  | 130 |  |  | 82 |  |  | 133 |  |  | 130 |  |  | 481 |  |  | 1,124 |  |  | 422 |  |  | 6 |  |  | 1,552 |
Total consumer banking |  | $ | 31,969 |  |  | $ | 25,937 |  |  | $ | 11,591 |  |  | $ | 6,039 |  |  | $ | 2,589 |  |  | $ | 1,372 |  |  | $ | 79,497 |  |  | $ | 422 |  |  | $ | 6 |  |  | $ | 79,925 |
__________ (1)Amounts represent period-end loans held for investment in each credit score category. Auto credit scores generally represent average FICO scores obtained from three credit bureaus at the time of application and are not refreshed thereafter. Balances for which no credit score is available or the credit score is invalid are included in the 620 or below category. Commercial Banking The key credit quality indicator for our commercial loan portfolios is our internal risk ratings. We assign internal risk ratings to loans based on relevant information about the ability of the borrowers to repay their debt. In determining the risk rating of a particular loan, some of the factors considered are the borrower’s current financial condition, historical and projected future credit performance, prospects for support from financially responsible guarantors, the estimated realizable value of any collateral and current economic trends. The scale based on our internal risk rating system is as follows: •Noncriticized: Loans that have not been designated as criticized, frequently referred to as “pass” loans. •Criticized performing: Loans in which the financial condition of the obligor is stressed, affecting earnings, cash flows or collateral values. The borrower currently has adequate capacity to meet near-term obligations; however, the stress, left unabated, may result in deterioration of the repayment prospects at some future date. •Criticized nonperforming: Loans that are not adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Loans classified as criticized nonperforming have a well-defined weakness, or weaknesses, which jeopardize the full repayment of the debt. These loans are characterized by the distinct possibility that we will sustain a credit loss if the deficiencies are not corrected and are generally placed on nonaccrual status. We use our internal risk rating system for regulatory reporting, determining the frequency of credit exposure reviews, and evaluating and determining the allowance for credit losses. Generally, loans that are designated as criticized performing and criticized nonperforming are reviewed quarterly by management to determine if they are appropriately classified/rated and whether any impairment exists. Noncriticized loans are also generally reviewed, at least annually, to determine the appropriate risk rating. In addition, we evaluate the risk rating during the renewal process of any loan or if a loan becomes past due. The following table presents our commercial banking portfolio of loans held for investment by internal risk ratings as of December 31, 2023 and 2022. The internal risk rating status includes all past due loans, both performing and nonperforming. Table 3.5: Commercial Banking Portfolio by Internal Risk Ratings
|  | December 31, 2023
|  | Term Loans by Vintage Year |  |  |  |  |  |
(Dollars in millions) |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Internal risk rating:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | $ | 3,068 |  |  | $ | 4,665 |  |  | $ | 2,773 |  |  | $ | 1,019 |  |  | $ | 2,104 |  |  | $ | 3,670 |  |  | $ | 17,299 |  |  | $ | 12,565 |  |  | $ | 25 |  |  | $ | 29,889 |
Criticized performing |  | 148 |  |  | 1,494 |  |  | 706 |  |  | 284 |  |  | 463 |  |  | 904 |  |  | 3,999 |  |  | 133 |  |  | 0 |  |  | 4,132 |
Criticized nonperforming |  | 65 |  |  | 26 |  |  | 124 |  |  | 0 |  |  | 47 |  |  | 163 |  |  | 425 |  |  | 0 |  |  | 0 |  |  | 425 |
Total commercial and multifamily real estate |  | 3,281 |  |  | 6,185 |  |  | 3,603 |  |  | 1,303 |  |  | 2,614 |  |  | 4,737 |  |  | 21,723 |  |  | 12,698 |  |  | 25 |  |  | 34,446 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | 6,909 |  |  | 11,935 |  |  | 6,994 |  |  | 3,566 |  |  | 2,359 |  |  | 5,117 |  |  | 36,880 |  |  | 14,822 |  |  | 167 |  |  | 51,869 |
Criticized performing |  | 353 |  |  | 706 |  |  | 655 |  |  | 237 |  |  | 348 |  |  | 349 |  |  | 2,648 |  |  | 1,189 |  |  | 0 |  |  | 3,837 |
Criticized nonperforming |  | 13 |  |  | 53 |  |  | 30 |  |  | 18 |  |  | 123 |  |  | 68 |  |  | 305 |  |  | 31 |  |  | 0 |  |  | 336 |
Total commercial and industrial |  | 7,275 |  |  | 12,694 |  |  | 7,679 |  |  | 3,821 |  |  | 2,830 |  |  | 5,534 |  |  | 39,833 |  |  | 16,042 |  |  | 167 |  |  | 56,042 |
Total commercial banking |  | $ | 10,556 |  |  | $ | 18,879 |  |  | $ | 11,282 |  |  | $ | 5,124 |  |  | $ | 5,444 |  |  | $ | 10,271 |  |  | $ | 61,556 |  |  | $ | 28,740 |  |  | $ | 192 |  |  | $ | 90,488 |
|  | December 31, 2022
|  | Term Loans by Vintage Year |  |  |  |  |  |
(Dollars in millions) |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Total Term Loans |  | Revolving Loans |  | Revolving Loans Converted to Term |  | Total
Internal risk rating:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | $ | 5,860 |  |  | $ | 4,807 |  |  | $ | 1,676 |  |  | $ | 2,879 |  |  | $ | 1,927 |  |  | $ | 3,474 |  |  | $ | 20,623 |  |  | $ | 13,254 |  |  | $ | 25 |  |  | $ | 33,902 |
Criticized performing |  | 359 |  |  | 487 |  |  | 212 |  |  | 535 |  |  | 378 |  |  | 1,196 |  |  | 3,167 |  |  | 113 |  |  | 0 |  |  | 3,280 |
Criticized nonperforming |  | 1 |  |  | 22 |  |  | 0 |  |  | 94 |  |  | 19 |  |  | 135 |  |  | 271 |  |  | 0 |  |  | 0 |  |  | 271 |
Total commercial and multifamily real estate |  | 6,220 |  |  | 5,316 |  |  | 1,888 |  |  | 3,508 |  |  | 2,324 |  |  | 4,805 |  |  | 24,061 |  |  | 13,367 |  |  | 25 |  |  | 37,453 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncriticized |  | 13,485 |  |  | 7,993 |  |  | 4,466 |  |  | 3,420 |  |  | 1,797 |  |  | 5,349 |  |  | 36,510 |  |  | 17,187 |  |  | 21 |  |  | 53,718 |
Criticized performing |  | 482 |  |  | 686 |  |  | 216 |  |  | 336 |  |  | 228 |  |  | 163 |  |  | 2,111 |  |  | 964 |  |  | 0 |  |  | 3,075 |
Criticized nonperforming |  | 30 |  |  | 29 |  |  | 0 |  |  | 156 |  |  | 82 |  |  | 57 |  |  | 354 |  |  | 76 |  |  | 0 |  |  | 430 |
Total commercial and industrial |  | 13,997 |  |  | 8,708 |  |  | 4,682 |  |  | 3,912 |  |  | 2,107 |  |  | 5,569 |  |  | 38,975 |  |  | 18,227 |  |  | 21 |  |  | 57,223 |
Total commercial banking |  | $ | 20,217 |  |  | $ | 14,024 |  |  | $ | 6,570 |  |  | $ | 7,420 |  |  | $ | 4,431 |  |  | $ | 10,374 |  |  | $ | 63,036 |  |  | $ | 31,594 |  |  | $ | 46 |  |  | $ | 94,676 |
__________ (1)Criticized exposures correspond to the “Special Mention,” “Substandard” and “Doubtful” asset categories defined by bank regulatory authorities. Financial Difficulty Modifications to Borrowers As part of our loss mitigation efforts, we may provide short-term (one to twelve months) or long-term (greater than twelve months) modifications to a borrower experiencing financial difficulty to improve long-term collectability of the loan and to avoid the need for repossession or foreclosure of collateral. We consider the impact of all loan modifications when estimating the credit quality of our loan portfolio and establishing allowance levels. For our Commercial Banking customers, loan modifications are also considered in the assignment of an internal risk rating. On January 1, 2023, we adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures using the modified retrospective adoption method. The ASU eliminates the accounting guidance for TDRs and enhances disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. The types of modifications we offer borrowers experiencing financial difficulty did not change as a result of ASU 2022-02. Under this new accounting guidance, FDMs are accumulated and the performance of each loan that received a FDM is reported on a rolling twelve month basis. For the reporting period ended December 31, 2023, FDMs and the related borrower performance information pertain to FDMs which occurred in the year ended December 31, 2023. For additional information on FDMs, see “Note 1—Summary of Significant Accounting Policies.” For the reporting periods prior to adoption of ASU 2022-02, our previous TDR disclosures are included below in the “Troubled Debt Restructurings” section. For additional information on loan modifications classified as a TDR prior to January 1, 2023, see “Note 1—Summary of Significant Accounting Policies.” FDM disclosures are not directly comparable to the prior period TDR disclosures due to differences in the respective accounting guidance and disclosure requirements. The following table presents the major modification types, amortized cost amounts for each modification type and financial effects for all FDMs undertaken during for the year ended December 31, 2023. Table 3.6: Financial Difficulty Modifications to Borrowers
|  | Year Ended December 31, 2023
|  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |
(Dollars in millions) |  | Domestic Card |  | International Card Businesses |  | Total Credit Card |  | Auto |  | Retail Banking |  | Total Consumer Banking |  | Commercial and Multifamily Real Estate |  | Commercial and Industrial |  | Total Commercial Banking |  | Total
Interest rate reduction |  | $ | 590 |  |  | $ | 97 |  |  | $ | 687 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | $ | 687 |
Term extension |  | — |  |  | — |  |  | — |  |  | $ | 65 |  |  | $ | 6 |  |  | $ | 71 |  |  | $ | 463 |  |  | $ | 436 |  |  | $ | 899 |  |  | 970 |
Principal balance reduction |  | — |  |  | — |  |  | — |  |  | 21 |  |  | — |  |  | 21 |  |  | — |  |  | — |  |  | — |  |  | 21 |
Principal balance reduction and term extension |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |  |  | 11 |
Interest rate reduction and term extension |  | 12 |  |  | — |  |  | 12 |  |  | 672 |  |  | 1 |  |  | 673 |  |  | — |  |  | 26 |  |  | 26 |  |  | 711 |
Other(1) |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 3 |  |  | 7 |  |  | 2 |  |  | 451 |  |  | 453 |  |  | 460 |
Total loans modified |  | $ | 602 |  |  | $ | 97 |  |  | $ | 699 |  |  | $ | 762 |  |  | $ | 10 |  |  | $ | 772 |  |  | $ | 465 |  |  | $ | 924 |  |  | $ | 1,389 |  |  | $ | 2,860 |
% of total class of receivables |  | 0.41 | % |  | 1.41 | % |  | 0.45 | % |  | 1.03 | % |  | 0.74 | % |  | 1.02 | % |  | 1.35 | % |  | 1.65 | % |  | 1.54 | % |  | 0.89 | %
__________ (1)Consumer Banking and Commercial Banking consists of modifications other than interest rate reduction, term extension, or principal balance reduction. Table 3.7: Financial Effects of Financial Difficulty Modifications to Borrowers
|  | Year Ended December 31, 2023
|  | Credit Card |  | Consumer Banking |  | Commercial Banking |  |
(Dollars in millions) |  | Domestic Card |  | International Card Businesses |  |  |  | Auto |  | Retail Banking |  |  |  | Commercial and Multifamily Real Estate |  | Commercial and Industrial |  |  |  |
Weighted-average interest rate reduction |  | 19.32% |  | 27.10% |  |  |  | 8.72% |  | 2.00% |  |  |  | — |  | 0.25% |  |  |  |
Payment delay duration (in months) |  | 12 |  | — |  |  |  | 5.93 |  | 10.35 |  |  |  | 13.38 |  | 6.79 |  |  |  |
Principal balance reduction |  | — |  | — |  |  |  | $1 |  | — |  |  |  | $20 |  | $3 |  |  |  |
Performance of Financial Difficulty Modifications to Borrowers We monitor loan performance trends, including FDMs, to assess and manage our exposure to credit risk. See “Note 1—Summary of Significant Accounting Policies” for additional information on how the allowance for modified loans is calculated for each portfolio segment. The following table presents FDMs over a rolling 12 month period by delinquency status as of December 31, 2023. Table 3.8 Delinquency Status of Loan Modifications to Borrowers Experiencing Financial Difficulty(1)
|  | December 31, 2023
|  |  |  | Delinquent Loans |  |
(Dollars in millions) |  | Current |  | 30-59 Days |  | 60-89 Days |  | > 90 Days |  | Total Delinquent Loans |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 384 |  |  | $ | 81 |  |  | $ | 46 |  |  | $ | 91 |  |  | $ | 218 |  |  | $ | 602 |
International card businesses |  | 49 |  |  | 9 |  |  | 9 |  |  | 30 |  |  | 48 |  |  | 97 |
Total credit card |  | 433 |  |  | 90 |  |  | 55 |  |  | 121 |  |  | 266 |  |  | 699 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 548 |  |  | 107 |  |  | 76 |  |  | 31 |  |  | 214 |  |  | 762 |
Retail banking |  | 10 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 10 |
Total consumer banking |  | 558 |  |  | 107 |  |  | 76 |  |  | 31 |  |  | 214 |  |  | 772 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 426 |  |  | 0 |  |  | 0 |  |  | 39 |  |  | 39 |  |  | 465 |
Commercial and industrial |  | 820 |  |  | 0 |  |  | 0 |  |  | 104 |  |  | 104 |  |  | 924 |
Total commercial banking |  | 1,246 |  |  | 0 |  |  | 0 |  |  | 143 |  |  | 143 |  |  | 1,389 |
Total |  | $ | 2,237 |  |  | $ | 197 |  |  | $ | 131 |  |  | $ | 295 |  |  | $ | 623 |  |  | $ | 2,860 |
__________ (1)Commitments to lend additional funds on FDMs totaled $109 million as of December 31, 2023. Subsequent Defaults of Financial Difficulty Modifications to Borrowers FDMs may subsequently enter default. A default occurs if a FDM is either 90 days or more delinquent, has been charged off, or has been reclassified from accrual to nonaccrual status. Loans that entered a modification program in any stage of delinquency are included in the aging table above. Loans that entered a modification program while in default are not considered to have subsequently defaulted for purposes of this disclosure. The allowance for any FDMs that have subsequently defaulted is measured using the same methodology as the allowance for loans held for investment. See “Note 1—Summary of Significant Accounting Policies” for additional information. The following table presents FDMs that entered subsequent default for the year ended December 31, 2023. Table 3.9 Subsequent Defaults of Financial Difficulty Modifications to Borrowers
|  | Year Ended December 31, 2023
(Dollars in millions) |  | Interest Rate Reduction |  | Term Extension |  |  |  | Interest Rate Reduction and Term Extension |  |  |  | Total Loans
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 89 |  |  | $ | 0 |  |  |  |  | $ | 1 |  |  |  |  | $ | 90 |
International card businesses |  | 20 |  |  | 0 |  |  |  |  | 0 |  |  |  |  | 20 |
Total credit card |  | 109 |  |  | 0 |  |  |  |  | 1 |  |  |  |  | 110 |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 0 |  |  | 15 |  |  |  |  | 235 |  |  |  |  | 250 |
Total consumer banking |  | 0 |  |  | 15 |  |  |  |  | 235 |  |  |  |  | 250 |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 0 |  |  | 46 |  |  |  |  | 0 |  |  |  |  | 46 |
Commercial and industrial |  | 0 |  |  | 51 |  |  |  |  | 0 |  |  |  |  | 51 |
Total commercial banking |  | 0 |  |  | 97 |  |  |  |  | 0 |  |  |  |  | 97 |
Total |  | $ | 109 |  |  | $ | 112 |  |  |  |  | $ | 236 |  |  |  |  | $ | 457 |
Troubled Debt Restructurings We adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures on January 1, 2023, and elected the modified retrospective adoption method. The ASU eliminates the accounting guidance for TDRs, and establishes disclosure requirements, to be applied prospectively, for loans with FDMs. The following tables present the major modification types, amortized cost amounts and financial effects of loans modified in a TDR during the years ended December 31, 2022 and 2021. Table 3.10: Troubled Debt Restructurings(1)
|  |  |  | Year Ended December 31, 2022 |  |  |  |
|  |  |  | Reduced Interest Rate |  | Term Extension |  |
(Dollars in millions) |  | Total Loans Modified(2) |  | % of TDR Activity(3) |  | Average Rate Reduction |  | % of TDR Activity(3) |  | Average Term Extension (Months) |  |  |  |
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 306 |  | 100% |  | 16.54% |  | N/A |  | N/A |  |  |  |
International card businesses |  | 127 |  | 100 |  | 27.42 |  | N/A |  | N/A |  |  |  |
Total credit card |  | 433 |  | 100 |  | 19.73 |  | N/A |  | N/A |  |  |  |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 1,070 |  | 57 |  | 8.53 |  | 97% |  | 4 |  |  |  |
Retail banking |  | 7 |  | N/A |  | N/A |  | 92 |  | 13 |  |  |  |
Total consumer banking |  | 1,077 |  | 57 |  | 8.53 |  | 97 |  | 4 |  |  |  |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 385 |  | 8 |  | 0.28 |  | 84 |  | 13 |  |  |  |
Commercial and industrial |  | 357 |  | N/A |  | N/A |  | 64 |  | 13 |  |  |  |
Total commercial banking |  | 742 |  | 4 |  | 0.28 |  | 74 |  | 13 |  |  |  |
Total |  | $ | 2,252 |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Year Ended December 31, 2021
|  |  |  | Reduced Interest Rate |  | Term Extension |  | Balance Reduction
(Dollars in millions) |  | Total Loans Modified(2) |  | % of TDR Activity(3) |  | Average Rate Reduction |  | % of TDR Activity(3) |  | Average Term Extension (Months) |  | % of TDR Activity(3) |  | Gross Balance Reduction
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  | $ | 154 |  | 100% |  | 15.90% |  | N/A |  | N/A |  | N/A |  | N/A
International card businesses |  | 123 |  | 100 |  | 27.70 |  | N/A |  | N/A |  | N/A |  | N/A
Total credit card |  | 277 |  | 100 |  | 21.15 |  | N/A |  | N/A |  | N/A |  | N/A
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  | 371 |  | 43 |  | 8.72 |  | 93% |  | 4 |  | 0% |  | $ | 1
Retail banking |  | 3 |  | 13 |  | 2.94 |  | 30 |  | 42 |  | N/A |  | N/A
Total consumer banking |  | 374 |  | 42 |  | 8.70 |  | 93 |  | 4 |  | 0 |  | 1
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  | 49 |  | 21 |  | 1.19 |  | 85 |  | 11 |  | N/A |  | N/A
Commercial and industrial |  | 112 |  | N/A |  | N/A |  | 30 |  | 6 |  | N/A |  | N/A
Total commercial banking |  | 161 |  | 6 |  | 1.19 |  | 46 |  | 9 |  | N/A |  | N/A
Total |  | $ | 812 |  |  |  |  |  |  |  |  |  |  |  |
__________ (1)Commitments to lend additional funds on loans modified in TDRs totaled $219 million and $168 million as of December 31, 2022 and 2021, respectively. (2)Represents the amortized cost of total loans modified in TDRs at the end of the period in which they were modified. As not every modification type is included in the table above, the total percentage of TDR activity may not add up to 100%. Some loans may receive more than one type of modification. (3)Due to multiple modification types granted to some troubled borrowers, percentages may total more than 100% for certain loan types. Subsequent Defaults of Completed TDR Modifications The following table presents the type, number and amortized cost of loans modified in a TDR that experienced a default during the period and had completed a modification event in the twelve months prior to the default. A default occurs if the loan is either 90 days or more delinquent, has been charged off as of the end of the period presented or has been reclassified from accrual to nonaccrual status. Table 3.11: TDR—Subsequent Defaults
|  |  |  |  |  | Year Ended December 31, |  |  |  |
|  |  |  |  |  | 2022 |  | 2021 |  |
(Dollars in millions) |  |  |  |  |  | Number of Contracts |  | Amount |  | Number of Contracts |  | Amount |  |  |  |
Credit Card: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Domestic credit card |  |  |  |  |  | 37,029 |  |  | $ | 75 |  |  | 18,694 |  |  | $ | 35 |  |  |  |  |
International card businesses |  |  |  |  |  | 74,432 |  |  | 79 |  |  | 58,914 |  |  | 87 |  |  |  |  |
Total credit card |  |  |  |  |  | 111,461 |  |  | 154 |  |  | 77,608 |  |  | 122 |  |  |  |  |
Consumer Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Auto |  |  |  |  |  | 16,100 |  |  | 285 |  |  | 8,847 |  |  | 136 |  |  |  |  |
Retail banking |  |  |  |  |  | 1 |  |  | 1 |  |  | 9 |  |  | 0 |  |  |  |  |
Total consumer banking |  |  |  |  |  | 16,101 |  |  | 286 |  |  | 8,856 |  |  | 136 |  |  |  |  |
Commercial Banking: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily real estate |  |  |  |  |  | 2 |  |  | 27 |  |  | 1 |  |  | 50 |  |  |  |  |
Commercial and industrial |  |  |  |  |  | 5 |  |  | 56 |  |  | 7 |  |  | 120 |  |  |  |  |
Total commercial banking |  |  |  |  |  | 7 |  |  | 83 |  |  | 8 |  |  | 170 |  |  |  |  |
Total |  |  |  |  |  | 127,569 |  |  | $ | 523 |  |  | 86,472 |  |  | $ | 428 |  |  |  |  |
Loans Pledged We pledged loan collateral of $7.4 billion and $9.8 billion to secure a portion of our FHLB borrowing capacity of $32.1 billion and $19.9 billion as of December 31, 2023 and 2022, respectively. We also pledged loan collateral of $78.3 billion and $34.1 billion to secure our Federal Reserve Discount Window borrowing capacity of $41.4 billion and $19.7 billion as of December 31, 2023 and 2022, respectively. In addition to loans pledged, we have securitized a portion of our credit card and auto loan portfolios. See “Note 5—Variable Interest Entities and Securitizations” for additional information. Loans Held for Sale Our total loans held for sale was $854 million and $203 million as of December 31, 2023 and 2022, respectively. We originated for sale $4.4 billion, $8.6 billion and $9.1 billion of commercial multifamily real estate loans in 2023, 2022 and 2021, respectively, and typically retain servicing rights upon the sale of these loans. Revolving Loans Converted to Term Loans For the years ended December 31, 2023 and 2022, we converted $617 million and $441 million of revolving loans to term loans, respectively, primarily in our domestic credit card and commercial banking loan portfolios.

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