Document and Entity Information
Document and Entity Information Document - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 22, 2016 | Jun. 30, 2015 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | Synchrony Financial | ||
Entity Central Index Key | 1,601,712 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 833,828,859 | ||
Entity Public Float | $ 4,231,311,700 |
Consolidated and Combined State
Consolidated and Combined Statements of Earnings - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Interest income: | |||
Interest and fees on loans (Note 4) | $ 13,179 | $ 12,216 | $ 11,295 |
Interest on investment securities | 49 | 26 | 18 |
Total interest income | 13,228 | 12,242 | 11,313 |
Interest expense: | |||
Interest on deposits | 607 | 470 | 374 |
Interest on third-party debt | 309 | 124 | 0 |
Interest on related party debt (Note 15) | 4 | 113 | 157 |
Total interest expense | 1,135 | 922 | 742 |
Net interest income | 12,093 | 11,320 | 10,571 |
Retailer share arrangements | (2,738) | (2,575) | (2,373) |
Net interest income, after retailer share arrangements | 9,355 | 8,745 | 8,198 |
Provision for loan losses (Note 4) | 2,952 | 2,917 | 3,072 |
Net interest income, after retailer share arrangements and provision for loan losses | 6,403 | 5,828 | 5,126 |
Other income: | |||
Interchange revenue | 505 | 389 | 324 |
Debt cancellation fees | 249 | 275 | 324 |
Loyalty programs | (419) | (281) | (213) |
Other | 57 | 102 | 65 |
Total other income | 392 | 485 | 500 |
Other expense: | |||
Employee costs | 1,042 | 866 | 698 |
Professional fees | 645 | 563 | 449 |
Marketing and business development | 433 | 460 | 269 |
Information processing | 297 | 212 | 193 |
Other | 847 | 826 | 875 |
Total other expense | 3,264 | 2,927 | 2,484 |
Earnings before benefit from income taxes | 3,531 | 3,386 | 3,142 |
Provision for income taxes (Note 14) | 1,317 | 1,277 | 1,163 |
Net earnings | $ 2,214 | $ 2,109 | $ 1,979 |
Earnings per share | |||
Basic (in usd per share) | $ 2.66 | $ 2.78 | $ 2.81 |
Diluted (in usd per share) | $ 2.65 | $ 2.78 | $ 2.81 |
Variable Interest Entity, Primary Beneficiary | |||
Interest expense: | |||
Interest on borrowings of consolidated securitization entities | $ 215 | $ 215 | $ 211 |
Consolidated and Combined Stat3
Consolidated and Combined Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 2,214 | $ 2,109 | $ 1,979 |
Other comprehensive income (loss) | |||
Investment securities | (10) | 9 | (10) |
Currency translation adjustments | (11) | (5) | (4) |
Other Comprehensive (Income) Loss, Pension and Other Postretirement Benefit Plans, Adjustment, Net of Tax, Portion Attributable to Parent | (10) | (1) | (1) |
Other comprehensive income (loss) | (31) | 3 | (15) |
Comprehensive income | $ 2,183 | $ 2,112 | $ 1,964 |
Consolidated and Combined Stat4
Consolidated and Combined Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | ||
Assets | ||||
Cash and equivalents | $ 12,325 | $ 11,828 | ||
Investment securities (Note 3) | 3,142 | 1,598 | ||
Loan receivables: (Notes 4 and 5) | [1],[2] | 68,290 | 61,286 | |
Less: Allowance for loan losses | (3,497) | (3,236) | ||
Loan receivables, net | 64,793 | 58,050 | ||
Loan receivables held for sale (Note 4) | 0 | 332 | ||
Goodwill (Note 6) | 949 | 949 | ||
Intangible assets, net (Note 6) | 701 | 519 | ||
Other assets | [3] | 2,225 | 2,431 | |
Total assets | 84,135 | 75,707 | ||
Deposits: (Note 7) | ||||
Interest-bearing deposit accounts | 43,295 | 34,847 | ||
Non-interest-bearing deposit accounts | 152 | 108 | ||
Total deposits | 43,447 | 34,955 | ||
Borrowings: (Notes 5 and 8) | ||||
Bank term loan | 4,151 | 8,245 | ||
Senior Notes | 6,590 | 3,593 | ||
Related party debt (Note 15) | 0 | 655 | [4] | |
Total borrowings | [4] | 24,344 | 27,460 | |
Accrued expenses and other liabilities | 3,740 | 2,814 | ||
Total liabilities | 71,531 | 65,229 | ||
Equity: | ||||
Common Stock, par share value $0.001 per share; 4,000,000,000 shares authorized, 833,828,340 and 833,764,589 shares issued and outstanding at December 31, 2015 and 2014, respectively | 1 | 1 | ||
Additional paid-in capital | 9,351 | 9,408 | ||
Retained earnings | 3,293 | 1,079 | ||
Accumulated other comprehensive income (loss): | ||||
Investment securities | (10) | 0 | ||
Currency translation adjustments | (19) | (8) | ||
Other | (12) | (2) | ||
Total equity | 12,604 | 10,478 | ||
Total liabilities and equity | 84,135 | 75,707 | ||
Restricted loans of consolidated securitization entities | ||||
Assets | ||||
Loan receivables: (Notes 4 and 5) | 25,464 | 26,951 | ||
Borrowings: (Notes 5 and 8) | ||||
Borrowings of consolidated securitization entities | [4] | 13,603 | 14,967 | |
Bank Term Loan | ||||
Borrowings: (Notes 5 and 8) | ||||
Bank term loan | [4] | 4,151 | 8,245 | |
Senior unsecured notes | ||||
Borrowings: (Notes 5 and 8) | ||||
Bank term loan | [4] | 6,590 | 3,593 | |
Unsecuritized Loans Held for Investment | ||||
Assets | ||||
Loan receivables: (Notes 4 and 5) | $ 42,826 | $ 34,335 | ||
[1] | At December 31, 2015 and 2014, loan receivables included deferred expense, net of deferred income, of $63 million and $46 million, respectively. | |||
[2] | Total loan receivables include $25.5 billion and $27.0 billion of restricted loans of consolidated securitization entities at December 31, 2015 and 2014, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | |||
[3] | Other assets include restricted cash and equivalents of $391 million and $1,104 million at December 31, 2015 and 2014, respectively. | |||
[4] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Consolidated and Combined Stat5
Consolidated and Combined Statements of Financial Position Statement (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Restricted cash and cash equivalents | $ 391 | $ 1,104 |
Common stock par value (in usd per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 4,000,000,000 | 4,000,000,000 |
Common stock shares issued | 833,828,340 | 833,764,589 |
Common stock shares outstanding | 833,828,340 | 833,764,589 |
Consolidated and Combined Stat6
Consolidated and Combined Statements of Changes in Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Parent's Net Investment | Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2012 | $ 4,582 | $ 4,580 | $ 2 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,979 | 1,979 | ||||
Other comprehensive income | (15) | (15) | ||||
Changes in Parent's net investment | (586) | (586) | ||||
Balance at Dec. 31, 2013 | 5,960 | 5,973 | (13) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 2,109 | 1,030 | $ 1,079 | |||
Other comprehensive income | 3 | 3 | ||||
Changes in Parent's net investment | (603) | (603) | ||||
Conversion of parent's net investment into common stock | 0 | $ 1 | $ 6,399 | (6,400) | ||
Conversion of parent's net investment into common stock (in shares) | 705,271,000 | |||||
Stock Issued During Period, Shares, New Issues | 128,494,000 | |||||
Stock Issued During Period, Value, New Issues | 2,842 | 2,842 | ||||
Stock-based compensation | 12 | 12 | ||||
Other | 155 | 155 | ||||
Balance at Dec. 31, 2014 | $ 10,478 | $ 1 | 9,408 | 0 | 1,079 | (10) |
Balance (in shares) at Dec. 31, 2014 | 833,764,589 | 833,765,000 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | $ 2,214 | $ 0 | 2,214 | |||
Other comprehensive income | (31) | (31) | ||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 63,000 | |||||
Stock-based compensation | 34 | |||||
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options | 34 | |||||
Other | (91) | (91) | ||||
Balance at Dec. 31, 2015 | $ 12,604 | $ 1 | $ 9,351 | $ 3,293 | $ (41) | |
Balance (in shares) at Dec. 31, 2015 | 833,828,340 | 833,828,000 |
Consolidated and Combined Stat7
Consolidated and Combined Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows - operating activities | |||
Net earnings | $ 2,214 | $ 2,109 | $ 1,979 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||
Provision for loan losses | 2,952 | 2,917 | 3,072 |
Deferred income taxes | (295) | (203) | (237) |
Depreciation and amortization | 174 | 131 | 104 |
(Increase) decrease in interest and fees receivable | (163) | 68 | (152) |
(Increase) decrease in other assets | 70 | 196 | 40 |
Increase (decrease) in accrued expenses and other liabilities | 803 | (172) | 810 |
All other operating activities | 429 | 294 | 63 |
Net Cash Provided by (Used in) Operating Activities | 6,184 | 5,340 | 5,679 |
Cash flows - investing activities | |||
Maturity and redemption of investment securities | 3,538 | 27 | 40 |
Purchases of investment securities | (5,102) | (1,376) | (100) |
Acquisition of loan receivables | (1,051) | 0 | (206) |
Net cash from principal business purchased | 0 | 0 | 6,393 |
Net (increase) decrease in restricted cash and equivalents | 713 | (1,028) | (20) |
Proceeds from sale of loan receivables | 392 | 1,510 | 289 |
Net (increase) decrease in loan receivables | (8,852) | (8,755) | (7,355) |
All other investing activities | (441) | (446) | (107) |
Net Cash Provided by (Used in) Investing Activities | (10,803) | (10,068) | (1,066) |
Borrowings of consolidated securitization entities | |||
Proceeds from issuance of securitized debt | 3,881 | 5,176 | 866 |
Maturities and repayment of securitized debt | (5,244) | (5,569) | (2,708) |
Third-party debt | |||
Proceeds from issuance of third-party debt | 2,995 | 12,343 | 0 |
Maturities and repayment of third-party debt | (4,094) | (505) | 0 |
Related party debt | |||
Proceeds from borrowings of related party debt | 0 | 1,615 | 0 |
Maturities and repayment of related party debt | (655) | (10,015) | (1,649) |
Net increase (decrease) in deposits | 8,273 | 9,088 | 481 |
Proceeds from initial public offering | 0 | 2,842 | 0 |
Net transfers (to) from Parent | 0 | (603) | (586) |
Net Cash Provided by (Used in) Financing Activities | 5,116 | 14,237 | (3,628) |
All other financing activities | (40) | (135) | (32) |
Increase in cash and equivalents | 497 | 9,509 | 985 |
Cash and equivalents at beginning of year | 11,828 | 2,319 | 1,334 |
Cash and equivalents at end of year | 12,325 | 11,828 | 2,319 |
Supplemental disclosure of cash flow information | |||
Cash paid during the year for interest | (1,040) | (839) | (729) |
Cash paid during the year for income taxes | $ (1,219) | $ (1,787) | $ (1,183) |
Business Description
Business Description | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | BUSINESS DESCRIPTION Synchrony Financial (the “Company”) provides a range of credit products through programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. The Company is a holding company for the legal entities that historically conducted General Electric Company’s (“GE”) North American retail finance business, including GE Capital Retail Bank. All of the assets and operations of that business were transferred to the Company prior to the completion of the Company’s initial public offering of its common stock (the “IPO”), which closed in 2014. In 2014, the Company also changed its name to Synchrony Financial and changed the name of GE Capital Retail Bank to Synchrony Bank (the “Bank”). References to the “Company”, “we”, “us” and “our” are to Synchrony Financial and its consolidated subsidiaries unless the context otherwise requires. GE Ownership and Exchange Offer The Company was previously an indirectly wholly-owned subsidiary of General Electric Capital Corporation (“GECC”) until the closing of the IPO in 2014, which reduced GECC's ownership of the Company to approximately 84.6% of our common stock. On October 14, 2015, we received approval from the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) to become a stand-alone savings and loan holding company, to retain control of the Bank and to retain control of our nonbank subsidiaries following the completion of GE’s offer to exchange shares of GE common stock for all of our shares of our common stock owned by GE (the “exchange offer”). On November 17, 2015, we announced the completion of the exchange offer and our separation from GE (the “Separation”). Following the Separation , GE no longer owns any of our outstanding common stock. See Note 13. Equity and Other Stock Related Information and Note 15. Related Party Transactions for additional information on the IPO and exchange offer. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated and combined financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our consolidated and combined financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of investment securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities. We conduct our operations within the United States and Canada. Substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at year-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. Consolidated Basis of Presentation The transfer of all of the assets of our business from GECC and its subsidiaries to the Company was completed in the second quarter of 2014. As a result, the Company’s financial statements have been prepared on a consolidated basis beginning June 30, 2014. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. In addition, all periods subsequent to June 30, 2014 are presented on a consolidated basis. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 5. Variable Interest Entities . We have reclassified certain prior-period amounts to conform to current-period presentation. Combined Basis of Presentation For all periods prior to June 30, 2014, the Company's financial statements were prepared on a combined basis. The combined financial statements combine all of our subsidiaries and certain accounts of GECC and its subsidiaries that were historically managed as part of our business. For all periods prior to the IPO, the Consolidated and Combined Statements of Earnings reflect intercompany expense allocations made to us by GE and GECC for certain corporate functions and for shared services provided by GE and GECC. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE and GECC based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See Note 15. Related Party Transactions for further information on expenses allocated by GE and GECC. The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had we operated as a separate, stand-alone entity during those periods. We believe that the consolidated and combined financial statements include all adjustments necessary for a fair presentation of the Company. Segment Reporting We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting , operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. Revenue activities are managed through three sales platforms (Retail Card, Payment Solutions and CareCredit). Those platforms are organized by the types of partners we work with to reach our customers, with success principally measured based on revenues, new accounts and other cardholder sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, loan losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole. Cash and Equivalents Debt securities, money market instruments and bank deposits with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. Cash and equivalents at December 31, 2015 and 2014 primarily included interest-earning deposits with the Federal Reserve Bank. Restricted Cash and Equivalents Restricted cash and equivalents represent cash and equivalents that are not available to us due to restrictions related to its use. For example, the Bank is required to maintain reserves against its deposit liabilities in the form of vault cash and/or balances with the Federal Reserve Bank. In addition, our securitization entities are required to fund segregated accounts that may only be used for certain purposes, including payment of interest and servicing fees and repayment of maturing debt. We include our restricted cash and equivalents in other assets in our Consolidated Statements of Financial Position. Investment Securities We report investments in debt and marketable equity securities at fair value. See Note 9. Fair Value Measurements for further information on fair value. Unrealized gains and losses on these investment securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. We regularly review investment securities for impairment using both quantitative and qualitative criteria. For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate other qualitative criteria to determine whether we do not expect to recover the amortized cost basis of the security, such as the financial health of and specific prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is also considered other-than-temporarily impaired and we recognize the entire difference between the security’s amortized cost basis and its fair value in earnings. For equity securities, we consider the length of time and magnitude of the amount that each security is in an unrealized loss position. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its fair value in earnings. Realized gains and losses are accounted for on the specific identification method. Loan Receivables Loan receivables primarily consist of open-end consumer revolving credit card accounts, closed-end consumer installment loans and open-end commercial revolving credit card accounts. Loan receivables are reported at the amounts due from customers, including unpaid interest and fees. Loan Receivables Held for Sale Loans purchased or originated with the intent to sell or as to which we do not have the ability and intent to hold for the foreseeable future are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. We continue to recognize interest and fees on these loans on the accrual basis. The fair value of loan receivables held for sale is determined on an aggregate homogeneous portfolio basis. If a loan is transferred from held for investment to held for sale, declines in fair value related to credit are recorded as a charge-off, which establishes a new cost basis for the loan. Further declines in fair value and recoveries up to the amortized cost and realized gains or losses are recorded as a component of other income in our Consolidated and Combined Statements of Earnings. Allowance for Loan Losses Losses on loan receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of probable losses takes into account our historical experience adjusted for current conditions with each product and customer type and our judgment concerning the probable effects of relevant observable data, trends and market factors. We evaluate each portfolio for impairment quarterly. For credit card receivables, our estimation process includes analysis of historical data, and there is a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the allowance. We use a migration analysis to estimate the likelihood that a loan will progress through the various stages of delinquency. The migration analysis considers uncollectible principal, interest and fees reflected in the loan receivables. We use other analyses to estimate losses incurred on non-delinquent accounts. The considerations in these analyses include past performance, risk management techniques applied to various accounts, historical behavior of different account vintages, current economic conditions, recent trends in delinquencies, bankruptcy filings, account collection management, policy changes, account seasoning, loan volume and amounts, payment rates, forecasting uncertainties, and a qualitative assessment of the adequacy of the allowance for losses, which compares this allowance for losses to projected net charge-offs over the next twelve months, in a manner consistent with regulatory guidance. We regularly review our collection experience (including delinquencies and net charge-offs) in determining our allowance for loan losses. We also consider our historical loss experience to date based on actual defaulted loans and overall portfolio indicators including delinquent and non-accrual loans, trends in loan volume and lending terms, credit policies and other observable environmental factors such as unemployment and home price indices. The underlying assumptions, estimates and assessments we use to provide for losses are updated periodically to reflect our view of current conditions and are subject to the regulatory examination process, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that we will experience credit losses that are different from our current estimates. Charge-offs are deducted from the allowance for losses when we judge the principal to be uncollectible and subsequent recoveries are added to the allowance generally at the time cash is received on a charged-off account. Delinquent receivables are those that are 30 days or more past due based on their contractual payments. Non-accrual loan receivables are those on which we have stopped accruing interest. We continue to accrue interest until the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days past due, with the exception of non-credit card accounts, for which we stop accruing interest in the period that the account becomes 90 days past due. Impaired loans represent loans for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the loan agreement and loans meeting the definition of a troubled debt restructuring (“TDR”). TDRs are those loans for which we have granted a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation. The same loan receivable may meet more than one of the definitions above. Accordingly, these categories are not mutually exclusive and it is possible for a particular loan to meet the definitions of a TDR, impaired loan and non-accrual loan and be included in each of these categories. The categorization of a particular loan also may not be indicative of the potential for loss. Loan Modifications and Restructurings Our loss mitigation strategy is intended to minimize economic loss and, at times, can result in rate reductions, principal forgiveness, extensions or other actions, which may cause the related loan to be classified as a TDR and also as impaired. We utilize short-term ( 3 to 12 months) or long-term ( 12 to 60 months) modification programs to borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. For our credit card customers, the short-term program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The long-term program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The long-term program does not normally provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. The loans that are modified typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The determination of whether these changes to the terms and conditions meet the TDR criteria includes our consideration of all relevant facts and circumstances. See Note 4. Loan Receivables and Allowance for Loan Losses for additional information on our loan modifications and restructurings. Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral less estimated selling costs. Data related to redefault experience is also considered in our overall reserve adequacy review. Once the loan has been modified, it returns to current status (re-aged) only after three consecutive minimum monthly payments are received post modification date, subject to a re-aging limitation of once a year, or twice in a five-year period in accordance with the Federal Financial Institutions Examination Council (“FFIEC”) guidelines on Uniform Retail Credit Classification and Account Management policy issued in June 2000. We believe that the allowance for loan losses would not be materially different had we not re-aged these accounts. Charge-Offs Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges, fees and third-party fraud losses from charge-offs. Charged-off and recovered accrued and unpaid finance charges and fees are included in interest and fees on loans while fraud losses are included in other expense. Charge-offs are recorded as a reduction to the allowance for loan losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for loan losses. Costs incurred to recover charged-off loans are recorded as collection expense and are included in other expense in our Consolidated and Combined Statements of Earnings. We charge-off unsecured closed-end consumer installment loans and loans secured by collateral when they are 120 days contractually past due and unsecured open-ended revolving loans when they are 180 days contractually past due. Unsecured consumer loans in bankruptcy are charged-off within 60 days of notification of filing by the bankruptcy court or within contractual charge-off periods, whichever occurs earlier. Credit card loans of deceased account holders are charged-off within 60 days of receipt of notification. Goodwill and Intangible Assets We do not amortize goodwill but test it at least annually for impairment at the reporting unit level pursuant to ASC 350, Intangibles—Goodwill and Other . A reporting unit is defined under GAAP as the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. Our single operating segment comprises a single reporting unit, based on the level at which segment management regularly reviews and measures the business operating results. Goodwill impairment risk is first assessed by performing a qualitative review of entity-specific, industry, market and general economic factors for our reporting unit. If potential goodwill impairment risk exists that indicates that it is more likely than not that the carrying value of our reporting unit exceeds its fair value, we apply a two-step quantitative test. The first step compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of our reporting unit’s net assets exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value. The qualitative assessment for each period presented in the consolidated and combined financial statements was performed without hindsight, assuming only factors and market conditions existing as of those dates, and resulted in no potential goodwill impairment risk for our reporting unit. Consequently, goodwill was not deemed to be impaired for any of the periods presented. Definite-lived intangible assets principally consist of customer-related assets including contract acquisition costs and purchased credit card relationships. These assets are amortized over their estimated useful lives and evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The evaluation compares the cash inflows expected to be generated from each intangible asset to its carrying value. If cash flows attributable to the intangible asset are less than the carrying value, the asset is considered impaired and written down to its estimated fair value. No impairments of definite-lived intangible assets have been recognized in the periods presented in the consolidated and combined financial statements. Revenue Recognition Interest and Fees on Loans We use the effective interest method to recognize income on loans. Interest on loans is comprised largely of interest and late fees on credit card and other loans. Interest income is recognized based upon the amount of loans outstanding and their contractual interest rate. Late fees are recognized when billable to the customer. We continue to accrue interest and fees on credit cards until the accounts are charged-off in the period the account becomes 180 days past due. For non-credit card loans, we stop accruing interest and fees when the account becomes 90 days past due. Previously recognized interest income that was accrued but not collected from the customer is reversed. Although we stop accruing interest in advance of payments, we recognize interest income as cash is collected when appropriate, provided the amount does not exceed that which would have been earned at the historical effective interest rate; otherwise, payments received are applied to reduce the principal balance of the loan. We resume accruing interest on non-credit card loans when the customer’s account is less than 90 days past due and collection of such amounts is probable. Interest accruals on modified loans that are not considered to be TDRs may return to current status (re-aged) only after receipt of at least three consecutive minimum monthly payments subject to a re-aging limitation of once a year , or twice in a five -year period. Direct loan origination costs on credit card loans are deferred and amortized on a straight-line basis over a one-year period, or the life of the loan for other loan receivables, and are included in interest and fees on loans in our Consolidated and Combined Statements of Earnings. See Note 4. Loan Receivables and Allowance for Loan Losses for further detail. Other loan fees including miscellaneous fees charged to borrowers are recognized net of waivers and charge-offs when the related transaction or service is provided, and are included in other income in our Consolidated and Combined Statements of Earnings. Promotional Financing Loans originated with promotional financing may include deferred interest financing (interest accrues during a promotional period and becomes payable if the full purchase amount is not paid off during the promotional period), no interest financing (no interest accrues during a promotional period but begins to accrue thereafter on any outstanding amounts at the end of the promotional period) and reduced interest financing (interest accrues monthly at a promotional interest rate during the promotional period). For deferred interest financing, we bill interest to the borrower, retroactive to the inception of the loan, if the loan is not repaid prior to the specified date. Income is recognized on such loans when it is billable. In almost all cases, our retail partner will pay an upfront fee or reimburse us to compensate us for all or part of the costs associated with providing the promotional financing. Upfront fees are deferred and accreted to income over the promotional period. Reimbursements are estimated and accrued as income over the promotional period. Purchased Loans Loans acquired by purchase are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the acquired loans. As a result, the allowance for losses is not carried over at acquisition. For loans acquired with evidence of credit deterioration, the excess of cash flows expected at acquisition over the initial acquisition cost is recognized into interest income over their remaining lives using the effective interest method. Subsequent decreases to the expected cash flows for these loans require us to evaluate the need for an allowance for credit losses. Subsequent improvements in expected cash flows are recognized into interest income prospectively. For other acquired loans, the excess of contractually required cash flows over the initial acquisition cost is recognized into interest income over the remaining lives using the effective interest method. Subsequent increases in incurred losses for these loans require us to evaluate the need for an allowance for credit losses. Our evaluation of the amount of future cash flows expected to be collected is performed in a similar manner as that used to determine our allowance for loan losses. Retailer Share Arrangements Most of our Retail Card program agreements and certain other program agreements contain retailer share arrangements that provide for payments to our partners if the economic performance of the program exceeds a contractually defined threshold. Although the share arrangements vary by partner, these arrangements are generally structured to measure the economic performance of the program, based typically on agreed upon program revenues (including interest income and certain other income) less agreed upon program expenses (including interest expense, provision for credit losses, retailer payments and operating expenses), and share portions of this amount above a negotiated threshold. These thresholds and the economic performance of a program are based on, among other things, agreed upon measures of program expenses. On a quarterly basis, we make a judgment as to whether it is probable that the performance threshold will be met under a particular retail partner’s retailer share arrangement. The current period’s estimated contribution to that ultimate expected payment is recorded as a liability. To the extent facts and circumstances change and the cumulative probable payment for prior months has changed, a cumulative adjustment is made to align the retailer share arrangement liability balance with the amount considered probable of being paid relating to past periods. Loyalty Programs Our loyalty programs are designed to generate increased purchase volume per customer while reinforcing the value of our credit cards and strengthening cardholder loyalty. These programs typically provide cardholders with rewards in the form of merchandise discounts that are earned by achieving a pre-set spending level on their private label credit card or Dual Card. Other programs provide cash back or reward points, which are redeemable for a variety of products or awards. These programs are primarily in our Retail Card platform. We establish a rewards liability based on points and merchandise discounts earned that are ultimately expected to be redeemed and the average cost per point at redemption. The rewards liability is included in accrued expenses and other liabilities in our Consolidated Statements of Financial Position. Cash rebates are earned based on a tiered percentage of purchase volume. As points and discounts are redeemed or cash rebates are issued, the rewards liability is relieved. The estimated cost of loyalty programs is classified as a reduction to other income in our Consolidated and Combined Statements of Earnings. Fraud Losses We experience third-party fraud losses from the unauthorized use of credit cards and when loans are obtained through fraudulent means. Fraud losses are included as a charge within other expense in our Consolidated and Combined Statements of Earnings, net of recoveries, when such losses are probable. Loans are charged off, as applicable, after the investigation period has completed. Income Taxes For periods up to and including the date of Separation, we are included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also file certain separate state and foreign income tax returns. For periods after the date of Separation, we will file separate consolidated U.S. federal and state income tax returns. The tax provision is presented on a separate company basis as if we were a separate filer for tax purposes for all periods presented. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated and combined financial statements in the period in which they occur. Our current obligations for taxes are settled with GE, or the relevant tax authority, as applicable, on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated and combined financial statements in the periods in which those settlements occur. We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using the provisions of the enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when the differences are expected to reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. We recognize accrued interest and penalties related to unrecognized tax benefits as interest expense and provision for income taxes, respectively. Fair Value Measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1— Quoted prices for identical instruments in active markets. Level 2— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3— Significant inputs to the valuation model are unobservable. We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we have risk management teams that review valuation, including independent price validation for certain instruments. We use non-binding broker quotes and third-party pricing services as our primary basis for valuation when there is limited or no relevant market activity for a specific instrument or for other instruments that share similar characteristics. We have not adjusted prices that we have obtained. The third-party brokers and third-party pricing services do not provide us access to their proprietary valuation models, inputs and assumptions. Accordingly, our risk management, treasury and/or finance personnel conduct reviews of these brokers and services, as applicable. In addition, we conduct internal reviews of pricing provided by our third-party pricing service for all investment securities on a quarterly basis to ensure reasonableness of valuations used in the consolidated and combined financial statements. These reviews are designed to identify prices that appear stale, those that have changed significantly from prior valuations and other anomalies that may indicate that a price may not be accurate. Based on the information available, |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | INVESTMENT SECURITIES All of our investment securities are classified as available-for-sale and are held to meet our liquidity objectives and to comply with the Community Reinvestment Act. Our investment securities consist of the following: December 31, 2015 December 31, 2014 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value Debt U.S. government and federal agency $ 2,768 $ — $ (7 ) $ 2,761 $ 1,252 $ — $ — $ 1,252 State and municipal 51 1 (3 ) 49 57 1 (1 ) 57 Residential mortgage-backed (a) 323 1 (7 ) 317 271 3 (3 ) 271 U.S. corporate debt — — — — 3 — — 3 Equity 15 — — 15 15 — — 15 Total $ 3,157 $ 2 $ (17 ) $ 3,142 $ 1,598 $ 4 $ (4 ) $ 1,598 _______________________ (a) At December 31, 2015 and 2014 , all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At December 31, 2015 Debt U.S. government and federal agency $ 2,611 $ (7 ) $ — $ — State and municipal 40 (3 ) — — Residential mortgage-backed 175 (3 ) 91 (4 ) Equity 1 — — — Total $ 2,827 $ (13 ) $ 91 $ (4 ) At December 31, 2014 Debt U.S. government and federal agency $ 700 $ — $ — $ — State and municipal — — 34 (1 ) Residential mortgage-backed 30 — 85 (3 ) Total $ 730 $ — $ 119 $ (4 ) We regularly review investment securities for impairment using both qualitative and quantitative criteria. We presently do not intend to sell our debt securities that are in an unrealized loss position and believe that it is not more likely than not that we will be required to sell these securities before recovery of our amortized cost. There were no other-than-temporary impairments recognized for the years ended December 31, 2015 , 2014 and 2013 . Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) Amortized Estimated At December 31, 2015 ($ in millions) cost fair value Due Within one year $ 1,218 $ 1,218 After one year through five years $ 1,550 $ 1,544 After five years through ten years $ — $ — After ten years $ 51 $ 48 We expect actual maturities to differ from contractual maturities because borrowers have the right to prepay certain obligations. There were no material realized gains or losses recognized for the years ended December 31, 2015 , 2014 and 2013 . Although we generally do not have the intent to sell any specific securities held at December 31, 2015 , in the ordinary course of managing our investment securities portfolio, we may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield, liquidity requirements and funding obligations. |
Loan Receivables and Allowance
Loan Receivables and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Loan Receivables and Allowance for Loan Losses | LOAN RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES At December 31 ($ in millions) 2015 2014 Credit cards $ 65,773 $ 58,880 Consumer installment loans 1,154 1,063 Commercial credit products 1,323 1,320 Other 40 23 Total loan receivables, before allowance for losses (a)(b) $ 68,290 $ 61,286 _______________________ (a) Total loan receivables include $25.5 billion and $27.0 billion of restricted loans of consolidated securitization entities at December 31, 2015 and 2014 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At December 31, 2015 and 2014 , loan receivables included deferred expense, net of deferred income, of $63 million and $46 million, respectively. Disposition of Loan Receivables During 2015 and 2014, we sold certain credit card portfolios associated with retail partners whose program agreements with us were not extended beyond their contractual expiration dates. We recognized a pre-tax gain of $20 million and $46 million related to the portfolio sales within other income in our Consolidated and Combined Statement of Earnings for the years ended December 31, 2015 and 2014, respectively. Allowance for Loan Losses ($ in millions) Balance at January 1, 2015 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2015 Credit cards $ 3,169 $ 2,880 $ (3,289 ) $ 660 $ 3,420 Consumer installment loans 22 25 (35 ) 14 26 Commercial credit products 45 46 (47 ) 6 50 Other — 1 — — 1 Total $ 3,236 $ 2,952 $ (3,371 ) $ 680 $ 3,497 ($ in millions) Balance at January 1, 2014 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2014 Credit cards $ 2,827 $ 2,858 $ (3,111 ) $ 595 $ 3,169 Consumer installment loans 19 20 (30 ) 13 22 Commercial credit products 46 39 (48 ) 8 45 Total $ 2,892 $ 2,917 $ (3,189 ) $ 616 $ 3,236 ($ in millions) Balance at January 1, 2013 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2013 Credit cards $ 2,174 $ 2,970 $ (2,847 ) $ 530 $ 2,827 Consumer installment loans 62 49 (111 ) 19 19 Commercial credit products 38 53 (53 ) 8 46 Total $ 2,274 $ 3,072 $ (3,011 ) $ 557 $ 2,892 Delinquent and Non-accrual Loans At December 31, 2015 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing (a) Credit cards $ 1,451 $ 1,257 $ 2,708 $ 1,257 $ — Consumer installment loans 16 3 19 — 3 Commercial credit products 32 13 45 13 — Total delinquent loans $ 1,499 $ 1,273 $ 2,772 $ 1,270 $ 3 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % At December 31, 2014 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing (a) Credit cards $ 1,331 $ 1,147 $ 2,478 $ 1,147 $ — Consumer installment loans 15 2 17 — 2 Commercial credit products 28 13 41 13 — Total delinquent loans $ 1,374 $ 1,162 $ 2,536 $ 1,160 $ 2 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % ______________________ (a) Percentages are calculated based on period-end balances. Impaired Loans and Troubled Debt Restructurings Most of our non-accrual loan receivables are smaller balance loans evaluated collectively, by portfolio, for impairment and therefore are outside the scope of the disclosure requirements for impaired loans. Accordingly, impaired loans represent restructured smaller balance homogeneous loans meeting the definition of a TDR. We use certain loan modification programs for borrowers experiencing financial difficulties. These loan modification programs include interest rate reductions and payment deferrals in excess of three months, which were not part of the terms of the original contract. We have both internal and external loan modification programs. The internal loan modification programs include both temporary and permanent programs. For our credit card customers, the temporary hardship program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months . The permanent workout program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The permanent program does not normally provide for the forgiveness of unpaid principal but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as consumer credit counseling agency programs. These loans typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The following table provides information on loans that entered a loan modification program during the periods presented: For the years ended December 31 ($ in millions) 2015 2014 Credit cards $ 499 $ 423 Consumer installment loans — — Commercial credit products 5 5 Total $ 504 $ 428 Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. Interest income from loans accounted for as TDRs is accounted for in the same manner as other accruing loans. The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. At December 31, 2015 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 756 $ (256 ) $ 500 $ 659 Consumer installment loans — — — — Commercial credit products 7 (3 ) 4 6 Total $ 763 $ (259 ) $ 504 $ 665 At December 31, 2014 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 716 $ (217 ) $ 499 $ 613 Consumer installment loans — — — — Commercial credit products 8 (3 ) 5 8 Total $ 724 $ (220 ) $ 504 $ 621 Financial Effects of TDRs As part of our loan modifications for borrowers experiencing financial difficulty, we may provide multiple concessions to minimize our economic loss and improve long-term loan performance and collectability. The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: Years ended December 31, 2015 2014 2013 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 49 $ 151 $ 727 $ 56 $ 140 $ 745 $ 79 $ 175 $ 890 Consumer installment loans — — — — — — 1 3 — Commercial credit products — 2 7 — 2 10 1 2 12 Total $ 49 $ 153 $ 734 $ 56 $ 142 $ 755 $ 81 $ 180 $ 902 Payment Defaults The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. Years ended December 31, 2015 2014 2013 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 28,126 $ 56 29,313 $ 60 30,640 $ 56 Consumer installment loans — — — — 98 3 Commercial credit products 95 1 159 1 42 — Total 28,221 $ 57 29,472 $ 61 30,780 $ 59 Credit Quality Indicators Our loan receivables portfolio includes both secured and unsecured loans. Secured loan receivables are largely comprised of consumer installment loans secured by equipment. Unsecured loan receivables are largely comprised of our open-ended consumer and commercial revolving credit card loans. As part of our credit risk management activities, on an ongoing basis, we assess overall credit quality by reviewing information related to the performance of a customer’s account with us, as well as information from credit bureaus, such as a Fair Isaac Corporation (“FICO”) or other credit scores, relating to the customer’s broader credit performance. FICO scores are generally obtained at origination of the account and are refreshed, at a minimum quarterly, but could be as often as weekly, to assist in predicting customer behavior. We categorize these credit scores into the following three credit score categories: (i) 661 or higher, which are considered the strongest credits; (ii) 601 to 660, considered moderate credit risk; and (iii) 600 or less, which are considered weaker credits. There are certain customer accounts for which a FICO score is not available where we use alternative sources to assess their credit and predict behavior. The following table provides the most recent FICO scores available for our customers at December 31, 2015 and 2014 , respectively, as a percentage of each class of loan receivable. The table below excludes 0.9% and 0.8% of our total loan receivables balance at December 31, 2015 and 2014 , respectively, which represents those customer accounts for which a FICO score is not available. At December 31 2015 2014 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 73.0 % 19.8 % 7.2 % 72.5 % 19.9 % 7.6 % Consumer installment loans 77.7 % 16.6 % 5.7 % 78.9 % 15.7 % 5.4 % Commercial credit products 86.8 % 8.7 % 4.5 % 86.5 % 8.6 % 4.8 % Unfunded Lending Commitments We manage the potential risk in credit commitments by limiting the total amount of credit, both by individual customer and in total, by monitoring the size and maturity of our portfolios and by applying the same credit standards for all of our credit products. Unused credit card lines available to our customers totaled approximately $ 322 billion and $ 297 billion at December 31, 2015 and 2014 , respectively. While these amounts represented the total available unused credit card lines, we have not experienced and do not anticipate that all of our customers will access their entire available line at any given point in time. Interest Income by Product The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: For the years ended December 31 ($ in millions) 2015 2014 2013 Credit cards $ 12,932 $ 11,967 $ 11,015 Consumer installment loans 104 99 129 Commercial credit products 142 149 150 Other 1 1 1 Total $ 13,179 $ 12,216 $ 11,295 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES We use VIEs to securitize loans and arrange asset-backed financing in the ordinary course of business. Investors in these entities only have recourse to the assets owned by the entity and not to our general credit. We do not have implicit support arrangements with any VIE and we did not provide non-contractual support for previously transferred loan receivables to any VIE in the years ended December 31, 2015 and 2014 . Our VIEs are able to accept new loan receivables and arrange new asset-backed financings, consistent with the requirements and limitations on such activities placed on the VIE by existing investors. Once an account has been designated to a VIE, the contractual arrangements we have require all existing and future loans originated under such account to be transferred to the VIE. The amount of loan receivables held by our VIEs in excess of the minimum amount required under the asset-backed financing arrangements with investors may be removed by us under random removal of accounts provisions. All loan receivables held by a VIE are subject to claims of third-party investors. In evaluating whether we have the power to direct the activities of a VIE that most significantly impact its economic performance, we consider the purpose for which the VIE was created, the importance of each of the activities in which it is engaged and our decision-making role, if any, in those activities that significantly determine the entity’s economic performance as compared to other economic interest holders. This evaluation requires consideration of all facts and circumstances relevant to decision-making that affects the entity’s future performance and the exercise of professional judgment in deciding which decision-making rights are most important. In determining whether we have the right to receive benefits or the obligation to absorb losses that could potentially be significant to a VIE, we evaluate all of our economic interests in the entity, regardless of form (debt, equity, management and servicing fees, and other contractual arrangements). This evaluation considers all relevant factors of the entity’s design, including: the entity’s capital structure, contractual rights to earnings or losses, subordination of our interests relative to those of other investors, as well as any other contractual arrangements that might exist that could have the potential to be economically significant. The evaluation of each of these factors in reaching a conclusion about the potential significance of our economic interests is a matter that requires the exercise of professional judgment. We consolidate our VIEs because we have the power to direct the activities that significantly affect the VIEs' economic performance, typically because of our role as either servicer or administrator for the VIEs. The power to direct exists because of our role in the design and conduct of the servicing of the VIEs’ assets as well as directing certain affairs of the VIEs, including determining whether and on what terms debt of the VIEs will be issued. The loan receivables in these entities have risks and characteristics similar to our other financing receivables and were underwritten to the same standard. Accordingly, the performance of these assets has been similar to our other comparable loan receivables; however, the blended performance of the pools of receivables in these entities reflects the eligibility criteria that we apply to determine which receivables are selected for transfer. Contractually, the cash flows from these financing receivables must first be used to pay third-party debt holders, as well as other expenses of the entity. Excess cash flows, if any, are available to us. The creditors of these entities have no claim on our other assets. The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. At December 31 ($ in millions) 2015 2014 Assets Loan receivables, net (a) $ 24,338 $ 25,645 Other assets (b) 141 1,134 Total $ 24,479 $ 26,779 Liabilities Borrowings $ 13,603 $ 14,967 Other liabilities 30 368 Total $ 13,633 $ 15,335 _______________________ (a) Includes $1.1 billion and $1.3 billion of related allowance for loan losses resulting in gross restricted loans of $25.5 billion and $27.0 billion at December 31, 2015 and 2014 , respectively. (b) Includes $118 million and $1.0 billion of segregated funds held by the VIEs at December 31, 2015 and 2014 , respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Consolidated Statements of Financial Position. The balances presented above are net of intercompany balances and transactions that are eliminated in our consolidated and combined financial statements. On December 2, 2015, we replaced GECC as the servicer for one of our VIEs for which we were the subservicer. We now provide servicing for all of our consolidated VIEs. Collections are required to be placed into segregated accounts owned by each VIE in amounts that meet contractually specified minimum levels. These segregated funds are invested in cash and cash equivalents and are restricted as to their use, principally to pay maturing principal and interest on debt and the related servicing fees. Collections above these minimum levels are remitted to us on a daily basis. Income (principally, interest and fees on loans) earned by our consolidated VIEs was $5.5 billion , $5.2 billion and $5.3 billion for the years ended December 31, 2015 , 2014 and 2013 , respectively. Related expenses consisted primarily of provision for loan losses of $940 million , $1.1 billion and $1.2 billion for the years ended December 31, 2015 , 2014 and 2013 , respectively, and interest expense of $215 million, $215 million and $211 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. These amounts do not include intercompany transactions, principally fees and interest, which are eliminated in our consolidated and combined financial statements. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill ($ in millions) 2015 2014 Balance at January 1 $ 949 $ 949 Acquisitions — — Balance at December 31 $ 949 $ 949 Intangible Assets Subject to Amortization 2015 2014 At December 31 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,045 $ (505 ) $ 540 $ 849 $ (405 ) $ 444 Capitalized software 253 (92 ) 161 120 (45 ) 75 Total $ 1,298 $ (597 ) $ 701 $ 969 $ (450 ) $ 519 During 2015 , we recorded additions to intangible assets subject to amortization of $329 million , primarily related to customer-related intangible assets, as well as capitalized software expenditures related to the build of our stand-alone information technology infrastructure. Customer-related intangible assets primarily relate to retail partner contract acquisitions and extensions, as well as purchased credit card relationships. During the year ended December 31, 2015 , we recorded additions to customer-related intangible assets subject to amortization of $196 million , primarily related to payments made to acquire and extend certain retail partner relationships. These additions had a weighted average amortizable life of 7 years . Amortization expense related to retail partner contracts was $84 million , $81 million and $60 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, and is included as a component of marketing and business development expense in our Consolidated and Combined Statements of Earnings. All other amortization expense was $63 million , $28 million and $23 million for the years ended December 31, 2015 , 2014 and 2013 , respectively, and is included as a component of other expense in our Consolidated and Combined Statements of Earnings. We estimate annual amortization expense for existing intangible assets over the next five calendar years to be as follows: ($ in millions) 2016 2017 2018 2019 2020 Amortization expense $ 158 $ 131 $ 120 $ 110 $ 89 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Deposits | DEPOSITS Deposits 2015 2014 At December 31 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 43,295 1.6 % $ 34,847 1.6 % Non-interest-bearing deposits 152 — 108 — Total deposits $ 43,447 $ 34,955 ___________________ (a) Based on interest expense for the years ended December 31, 2015 and 2014 and average deposits balances. At December 31, 2015 and 2014 , interest-bearing deposits included $11.9 billion and $9.4 billion , respectively, of direct deposit certificates of $100,000 or more. Of the total direct deposit certificates of $100,000 or more, $3.6 billion and $2.8 billion were direct deposit certificates of $250,000 or more at December 31, 2015 and 2014 , respectively. At December 31, 2015 , our interest-bearing time deposits maturing over the next five years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Deposits $ 12,151 $ 4,820 $ 2,126 $ 3,917 $ 2,815 $ 2,581 The above maturity table excludes $12.0 billion of demand deposits with no defined maturity. In addition, at December 31, 2015 , we had $2.9 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2017 and 2020. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Borrowings | BORROWINGS 2015 2014 At December 31 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2017 - 2020 1.3%-4.5% 1.9 % $ 6,396 $ 6,315 Floating securitized borrowings 2016 - 2019 0.8%-1.3% 1.0 % 7,207 8,652 Total borrowings of consolidated securitization entities 1.4 % 13,603 14,967 Bank term loan 2019 2.2 % 2.2 % 4,151 8,245 Senior unsecured notes: Fixed senior unsecured notes 2017 - 2025 1.8%-4.5% 3.4 % 6,340 3,593 Floating senior unsecured notes 2020 1.6 % 1.6 % 250 — Total senior unsecured notes 3.3 % 6,590 3,593 Related party debt N/A N/A N/A — 655 Total borrowings $ 24,344 $ 27,460 ___________________ (a) The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. Borrowings of Consolidated Securitization Entities We securitize credit card receivables as an additional source of funding. At December 31, 2015 , the maturities of the borrowings of our consolidated securitization entities over the next five years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Borrowings of consolidated securitization entities $ 842 $ 5,383 $ 4,815 $ 1,538 $ 1,025 $ — In addition, at December 31, 2015 , we had an aggregate of $6.1 billion of undrawn committed capacity under our securitization programs. Third-Party Debt Bank Term Loan On August 5, 2014, we entered into a new term loan facility (the “Bank Term Loan”) with third-party lenders that initially provided $8.0 billion principal amount of unsecured term loans maturing in 2019. The Bank Term Loan bears interest based upon, at our option, (i) a base rate plus a margin of 0.65% to 1.40% or (ii) a London Interbank Offered Rate (“LIBOR”) rate plus a margin of 1.65% to 2.40% , with the margin, in each case, based on our long-term senior unsecured non-credit-enhanced debt ratings or, if such rating has not been assigned to our debt by the applicable rating agency, a corporate credit rating. In August 2014, we prepaid $505 million of the Bank Term Loan, using a portion of the net proceeds from our issuance of senior unsecured notes. In October 2014, we amended the Bank Term Loan to, among other things, increase the amount of indebtedness that the Company may incur thereunder by $750 million , and this amount was borrowed in full. During the year ended December 31, 2015 , we prepaid $4.1 billion in the aggregate of the Bank Term Loan, which included the use of a portion of the net proceeds from the issuance of senior unsecured notes in February, July and December 2015. Subsequent to December 31, 2015 , we prepaid an additional $2.7 billion in the aggregate of the Bank Term Loan. The total indebtedness outstanding under the Bank Term Loan following the additional prepayments was $1.5 billion . Senior Unsecured Notes 2015 Issuances ($ in millions) : Issuance Date Principal Amount Maturity Interest Rate February 2, 2015 $ 750 2020 2.700 % February 2, 2015 250 2020 Floating rate (three-month LIBOR plus 1.23%) July 23, 2015 1,000 2025 4.500 % December 4, 2015 1,000 2019 2.600 % $ 3,000 The net proceeds from the above issuances were primarily used to prepay our indebtedness under the GECC Term Loan and Bank Term Loan. In addition, on August 11, 2014, we issued a total of $3.6 billion principal amount of senior unsecured notes, comprising $500 million aggregate principal amount of 1.875% senior notes due 2017, $1.1 billion aggregate principal amount of 3.000% senior notes due 2019, $750 million aggregate principal amount of 3.750% senior notes due 2021, and $1.25 billion aggregate principal amount of 4.250% senior notes due 2024. Related Party Debt In connection with the IPO in 2014, we entered into a new term loan facility (the “GECC Term Loan”) with GECC, which provided $1.5 billion principal amount of unsecured term loan maturing in 2019 of which $655 million remained outstanding at December 31, 2014, following prepayments in 2014 of $845 million . During the first quarter of 2015, we prepaid all of the remaining outstanding indebtedness under this agreement, and GECC no longer provides funding to our business. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies . The following tables present our assets and liabilities measured at fair value on a recurring basis. Included in the tables are debt and equity securities. Recurring Fair Value Measurements The following tables present our assets measured at fair value on a recurring basis. At December 31, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,761 $ — $ 2,761 State and municipal — — 49 49 Residential mortgage-backed — 317 — 317 Equity 15 — — 15 Total $ 15 $ 3,078 $ 49 $ 3,142 At December 31, 2014 ($ in millions) Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 1,252 $ — $ 1,252 State and municipal — — 57 57 Residential mortgage-backed — 271 — 271 US Corporate — — 3 3 Equity 15 — — 15 Total $ 15 $ 1,523 $ 60 $ 1,598 For the years ended December 31, 2015 and 2014 , there were no securities transferred between Level 1 and Level 2 or between Level 2 and Level 3. At December 31, 2015 and 2014 , we did not have any significant liabilities measured at fair value on a recurring basis. Our Level 3 recurring fair value measurements primarily relate to state and municipal debt instruments of $49 million and $57 million at December 31, 2015 and 2014 , respectively, which are valued using non-binding broker quotes or other third-party sources. For a description of our process to evaluate third-party pricing servicers, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies . Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the years ended December 31, 2015 and 2014 . Changes in Level 3 Instruments Years ended December 31, ($ in millions) 2015 2014 Balance at beginning of period $ 60 $ 46 Net realized/unrealized gains (losses) 1 7 Purchases — 11 Sales (6 ) — Settlements (6 ) (4 ) Balance at end of period $ 49 $ 60 Net change in unrealized gains (losses) relating to instruments still held at December 31 $ 1 $ 7 Non-Recurring Fair Value Measurements We hold certain assets that have been measured at fair value on a non-recurring basis at December 31, 2015 and 2014 . These assets are written down to fair value when they are impaired and are not subsequently adjusted to fair value unless further impairment occurs. The assets held by us that were measured at fair value on a non-recurring basis and the effects of the remeasurement to fair value were not material for all periods presented. The estimated fair value of loan receivables held for sale exceeded their amortized cost and accordingly a remeasurement to fair value was not required during the year ended December 31, 2014 . Financial Assets and Financial Liabilities Carried at Other than Fair Value Carrying Corresponding fair value amount At December 31, 2015 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 12,325 $ 12,325 $ 11,865 $ 460 $ — Other assets (b) $ 391 $ 391 $ 391 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 64,793 $ 71,386 $ — $ — $ 71,386 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 43,447 $ 43,840 $ — $ 43,840 $ — Borrowings of consolidated securitization entities $ 13,603 $ 13,562 $ — $ 7,566 $ 5,996 Bank term loan $ 4,151 $ 4,125 $ — $ — $ 4,125 Senior unsecured notes $ 6,590 $ 6,574 $ — $ 6,574 $ — Carrying Corresponding fair value amount At December 31, 2014 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 11,828 $ 11,828 $ 8,153 $ 3,675 $ — Other assets (b) $ 1,104 $ 1,104 $ 1,104 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 58,050 $ 64,113 $ — $ — $ 64,113 Loan receivables held for sale (c) $ 332 $ 351 $ — $ — $ 351 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 34,955 $ 35,442 $ — $ 35,442 $ — Borrowings of consolidated securitization entities $ 14,967 $ 14,985 $ — $ 7,912 $ 7,073 Bank term loan $ 8,245 $ 8,204 $ — $ — $ 8,204 Senior unsecured notes $ 3,593 $ 3,660 $ — $ 3,660 $ — Related party debt $ 655 $ 655 $ — $ — $ 655 _______________________ (a) For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequacy
Regulatory and Capital Adequacy | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Regulatory and Capital Adequacy | REGULATORY AND CAPITAL ADEQUACY As a savings and loan holding company, we are subject to regulation, supervision and examination by the Federal Reserve Board. The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the OCC, which is its primary regulator, and by the Consumer Financial Protection Bureau (“CFPB”). In addition, the Bank, as an insured depository institution, is supervised by the Federal Deposit Insurance Corporation. Following the approval from the Federal Reserve Board to become a stand-alone savings and loan holding company, the Company is now subject to the capital requirements as prescribed by Basel III capital rules and the requirements of the Dodd-Frank Act. Failure to meet minimum capital requirements can initiate certain mandatory and, possibly, additional discretionary actions by regulators that, if undertaken, could limit our business activities and have a material adverse effect on our consolidated financial statements. Under capital adequacy guidelines, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require us and the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). For Synchrony Financial to be a well-capitalized savings and loan holding company, Synchrony Bank must be well-capitalized and Synchrony Financial must not be subject to any written agreement, order, capital directive, or prompt corrective action directive issued by the Federal Reserve Board to meet and maintain a specific capital level for any capital measure. As of December 31, 2015, Synchrony Financial met all the requirements to be deemed well-capitalized. At December 31, 2015, we met all applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations. At December 31, 2015 and 2014 , the Bank also met all applicable requirements to be deemed well-capitalized pursuant to OCC regulations and for purposes of the Federal Deposit Insurance Act. The capital rules applicable to the Bank as of January 1, 2015, include new minimum and "well-capitalized" risk-based capital and leverage ratios, and redefine the definition of what constitutes "capital" for purposes of calculating these ratios. There are no conditions or events subsequent to December 31, 2015 that management believes have changed the Company’s or Bank’s capital category. The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows: Synchrony Financial At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio Total risk-based capital $ 12,533 18.1 % $ 5,550 8.0 % Tier 1 risk-based capital $ 11,633 16.8 % $ 4,162 6.0 % Tier 1 leverage $ 11,633 14.4 % $ 3,242 4.0 % Common equity Tier 1 Capital $ 11,633 16.8 % $ 3,122 4.5 % Synchrony Bank At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 8,443 16.6 % $ 4,071 8.0 % $ 5,089 10.0 % Tier 1 risk-based capital $ 7,781 15.3 % $ 3,053 6.0 % $ 4,071 8.0 % Tier 1 leverage $ 7,781 13.0 % $ 2,387 4.0 % $ 2,984 5.0 % Common equity Tier 1 Capital $ 7,781 15.3 % $ 2,290 4.5 % $ 3,308 6.5 % At December 31, 2014 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 7,100 17.1 % $ 3,322 8.0 % $ 4,152 10.0 % Tier 1 risk-based capital $ 6,559 15.8 % $ 1,661 4.0 % $ 2,491 6.0 % Tier 1 leverage $ 6,559 13.4 % $ 1,959 4.0 % $ 2,449 5.0 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at December 31, 2015 and are calculated based on Basel I capital rules at December 31, 2014. The Bank may pay dividends on its stock, with consent or non-objection from the OCC and the Federal Reserve Board, among other things, if its regulatory capital would not thereby be reduced below the amount then required by the applicable regulatory capital requirements. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS Following the Separation, our applicable employees ceased participating in GE benefit plans and began participating in employee benefit plans established and maintained by us. The following summarizes information related to the Synchrony benefit plans and our remaining obligations to GE related to certain of their plans. Savings Plan Our U.S. employees are eligible to participate in a qualified defined contribution savings plan that allows them to contribute a portion of their pay to the plan on a pre-tax basis. We make employer contributions to the plan equal to 3% of eligible compensation and make matching contributions of up to 4% of eligible compensation. We also provide certain additional contributions to the plan for employees who were participants in GE's pension plan at Separation. The expense incurred associated with this plan for the year ended December 31, 2015 was not material. Health and Welfare Benefits We provide health and welfare benefits to our employees, including health, dental, prescription drug and vision for which we are self-insured. The expense incurred associated with these benefits for the year ended December 31, 2015 was not material. GE Benefit Plans and Reimbursement Obligations Prior to Separation, our employees participated in various GE retirement and retiree health and life insurance benefit plans. Certain of these retirement benefits vested as a result of Separation. Under the terms of the Employee Matters Agreement between us and GE, GE will continue to pay for these benefits and we are obligated to reimburse them. The principal retirement benefits subject to this arrangement are fixed, life-time annuity payments. The estimated liability for our reimbursement obligations to GE for retiree benefits was $166 million at December 31, 2015 and is included in other liabilities in our Consolidated Statement of Financial Position. Expenses associated with our employees’ participation in these GE benefit plans prior to Separation were $157 million , $164 million and $124 million for the years ended December 31, 2015 , 2014 and 2013 , respectively. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the assumed conversion of all dilutive securities. The following table presents the calculation of basic and diluted earnings per share: Years ended December 31, (in millions, except per share data) 2015 2014 2013 Net earnings $ 2,214 $ 2,109 $ 1,979 Weighted average common shares outstanding, basic 833.8 757.4 705.3 Effect of dilutive securities 1.7 0.2 — Weighted average common shares outstanding, dilutive 835.5 757.6 705.3 Earnings per basic common share $ 2.66 $ 2.78 $ 2.81 Earnings per diluted common share $ 2.65 $ 2.78 $ 2.81 We have issued certain stock based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of approximately 1 million and 6 million shares related to these awards were considered anti-dilutive and therefore were excluded from the computation of diluted earnings per share for the years ended December 31, 2015 and 2014 , respectively. |
Equity and Other Stock Related
Equity and Other Stock Related Information | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Equity and Other Stock Related Information | EQUITY AND OTHER STOCK RELATED INFORMATION The IPO and Exchange Offer In July 2014, in preparation for the IPO, we completed a stock split pursuant to which each share held by the holder of our common stock was reclassified into 5,262.3512 shares. Following this stock split, we had approximately 705 million shares of common stock outstanding. The effects of the stock split have been reflected for all periods presented. On August 5, 2014, we closed the initial public offering of 125 million shares of our common stock at a price to the public of $23.00 per share and on September 3, 2014 we issued an additional 3.5 million shares of our common stock pursuant to to an option granted to the underwriters in the IPO (the “Underwriters' Option”). We received net proceeds from the initial public offering and the Underwriters' Option of approximately $2.8 billion . Following the initial public offering and the Underwriters' Option, GE owned approximately 84.6% of our common stock. On November 17, 2015, GE completed its offer to exchange shares of GE common stock for all of the remaining shares of our common stock that were owned by GE. Following the Separation, GE no longer owns any of our outstanding common stock. Synchrony Financial Incentive Programs We have established the Synchrony Financial 2014 Long-Term Incentive Plan, which we refer to as the “Incentive Plan.” The Incentive Plan permits us to issue stock-based, stock-denominated and other awards to officers, employees, consultants and non-employee directors providing services to the Company and our participating affiliates. Available awards under the Incentive Plan include stock options and stock appreciation rights (“SARs”), restricted stock and restricted stock units (“RSUs”), performance awards and other awards valued in whole or in part by reference to or otherwise based on our common stock (other stock-based awards), and dividend equivalents. A total of 16,605,417 shares of our common stock (including authorized and unissued shares) are available for granting awards under the Incentive Plan. In connection with the IPO, we issued a total of 3.3 million RSUs and 4.9 million stock options to certain employees. These RSUs and stock options will generally cliff vest four years from the award date provided that the employee has remained continuously employed by the Company through such vesting date. Subsequent to the IPO we issued additional RSUs and stock options in connection with annual grants. The RSUs and stock options issued in connection with the annual grants will generally vest 20% annually, starting with the first anniversary of the award date, provided that the employee has remained continuously employed by the Company through such vesting date. Each RSU is convertible into one share of Synchrony Financial common stock. The total compensation expense recorded for these awards was not material for all periods presented. At December 31, 2015, there were 4.4 million RSUs and 6.5 million stock options issued and outstanding and $108 million of total unrecognized compensation cost related to these awards, which is expected to be amortized over a weighted average period of 3.0 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Earnings before Provision for Income Taxes For the years ended December 31 ($ in millions) 2015 2014 2013 U.S. $ 3,513 $ 3,377 $ 3,124 Non-U.S. 18 9 18 Earnings before provision for income taxes $ 3,531 $ 3,386 $ 3,142 Provision for Income Taxes For the years ended December 31 ($ in millions) 2015 2014 2013 Current provision for income taxes U.S. Federal $ 1,443 $ 1,320 $ 1,280 U.S. state and local 158 153 115 Non-U.S. 11 7 5 Total current provision for income taxes 1,612 1,480 1,400 Deferred (benefit) provision for income taxes U.S. Federal (263 ) (181 ) (215 ) U.S. state and local (32 ) (23 ) (21 ) Non-U.S. — 1 (1 ) Deferred (benefit) provision for income taxes (295 ) (203 ) (237 ) Total provision for income taxes $ 1,317 $ 1,277 $ 1,163 Consistent with the provisions of ASC 740, Income Taxes , U.S. income taxes have not been provided on temporary differences related to investments in certain non-U.S. subsidiaries. These temporary differences are due to earnings that have been reinvested abroad for an indefinite period of time and other differences between the book basis and tax basis in the equity in our non-U.S. subsidiaries. The cumulative amounts of temporary differences with regard to which we have not provided U.S. income taxes were approximately $29 million and $23 million at December 31, 2015 and 2014 , respectively. Any U.S. tax liability associated with these temporary differences would not be material to the consolidated financial statements. Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax Rate For the years ended December 31 2015 2014 2013 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes, net of federal benefit 2.3 % 2.5 % 1.9 % All other, net — % 0.2 % 0.1 % Effective tax rate 37.3 % 37.7 % 37.0 % Deferred Taxes Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when such differences are expected to reverse. Significant Components of Our Net Deferred Income Taxes At December 31 ($ in millions) 2015 2014 Assets Allowance for loan losses $ 1,329 $ 1,221 Reward programs 106 72 Compensation and employee benefits 135 45 Net operating losses 12 12 Other assets 38 56 Total deferred income tax assets before valuation allowance 1,620 1,406 Valuation allowance (9 ) (10 ) Total deferred income tax assets $ 1,611 $ 1,396 Liabilities Original issue discount (a) $ (332 ) $ (519 ) Goodwill and identifiable intangibles (246 ) (259 ) Other liabilities (18 ) (15 ) Total deferred income tax liabilities (596 ) (793 ) Net deferred income tax assets $ 1,015 $ 603 _______________________ (a) Includes the deferred tax impact of an unrecognized tax benefit of $200 million at December 31, 2015 related to temporary items that are expected to reverse within the next twelve months. At December 31, 2015 and 2014, the Company had state income tax net operating losses of $482 million and $520 million , respectively. The deferred tax assets presented above, related to these net operating losses, are net of unrecognized tax benefits and have been reflected in the reconciliation of unrecognized tax benefits. The state net operating losses will begin to expire in 2025 with the majority of the loss expiring in 2034 if not utilized prior to that year. The Company believes that it is more likely than not that a portion of the state net operating losses will expire before being utilized. Therefore, we have recorded the above valuation allowances at December 31, 2015 and 2014, respectively, to reduce the deferred tax assets to the amounts more likely than not to be realized. Tax Sharing and Separation Agreement In connection with the IPO, we entered into a Tax Sharing and Separation Agreement (“TSSA”) which governs certain separation-related tax matters between the Company and GE following the IPO. The TSSA governs the allocation of responsibilities for the taxes of the GE group between GE and the Company. The TSSA also allocates rights, obligations and responsibilities in connection with certain administrative matters relating to the preparation of tax returns and control of tax audits and other proceedings relating to taxes. Under the TSSA, we generally are responsible for all taxes attributable to us or our operations for taxable periods following December 31, 2013. To the extent we file tax returns on a consolidated basis with GE, we will be required to make tax sharing payments to GE in amounts equal to our separate company tax liability. Our separate company tax liability will generally be equal to the amount of tax we would have paid had we been filing tax returns separately from GE, subject to certain adjustments, whether or not GE is actually required to pay such amounts to the taxing authorities. For taxable periods prior to January 1, 2014, GE is responsible for all income taxes imposed by the United States, Canada and Puerto Rico. Liabilities related to taxable periods prior to January 1, 2014 were settled with GE during the year ended December 31, 2014. We are responsible for all other taxes attributable to our business. Where required for certain tax items, we have retained the liability and recorded an indemnity receivable from GE in our Consolidated Statement of Financial Position. Unrecognized Tax Benefits Reconciliation of Unrecognized Tax Benefits ($ in millions) 2015 2014 Balance at January 1 $ 102 $ 202 Additions: Tax positions of the current year (a) 236 75 Tax positions of prior years 6 20 Reductions: Prior year tax positions (8 ) (194 ) Settlements with tax authorities (1 ) — Expiration of the statute of limitation (8 ) (1 ) Balance at December 31 $ 327 $ 102 Portion of balance that, if recognized, would impact the effective income tax rate $ 79 $ 68 _______________________ (a) Included in the increase in tax positions for the year ended December 31, 2015 is an unrecognized tax benefit of $207 million ( $200 million net of federal benefit) related to temporary items that are expected to reverse within the next twelve months. Included in the amount of unrecognized tax benefits are certain items that would not affect the effective tax rate if they were recognized in our Consolidated and Combined Statements of Earnings. These unrecognized items include uncertain tax positions that have offsetting amounts in other jurisdictions, unrecognized tax benefits that would be offset by a valuation allowance if they were recognized and unrecognized tax benefits that result from temporary differences. We expect approximately $200 million (net of federal benefit) of unrecognized tax benefits related to temporary differences to reverse within the next twelve months. Excluding that item, the amount of unrecognized tax benefits which may be resolved in the next twelve months is not expected to be material to our consolidated financial statements. Included in the reduction for prior year tax positions for the year ended December 31, 2014 is a non-cash settlement with GE of $194 million , related to taxable periods prior to January 1, 2014, in accordance with the TSSA. Principally as a result of this settlement, net of the associated U.S. federal income tax deduction and the related accrued interest, additional paid-in capital increased by $147 million during the year ended December 31, 2014. Additionally, there are unrecognized tax benefits of $22 million and $21 million for the years ended December 31, 2015 and 2014, respectively, that are included in the tabular reconciliation above but recorded in the Consolidated Statement of Financial Position as a reduction of the related deferred tax asset for net operating losses. Interest expense and penalties related to income tax liabilities recognized in our Consolidated and Combined Statements of Earnings were not material for all periods presented. The Company is under continuous examination by the Internal Revenue Service (“IRS”) and the tax authorities of various states as part of their audit of GE’s tax returns. The IRS is currently auditing the GE consolidated U.S. income tax returns for 2010 and 2011, as well as 2012 and 2013. In addition, certain issues and refund claims for previous years are still unresolved. We are under examination in various states going back to 2007 as part of the audit of GE’s tax returns. We believe that there are no issues or claims that are likely to significantly impact our results of operations, financial position or cash flows. We further believe that we have made adequate provision for all income tax uncertainties that could result from such examinations. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Following the Separation, GE no longer owns any of our outstanding common stock and is no longer a related party to us, and we will no longer consider our transactions with GE and GECC as related party transactions. The following table sets forth the direct costs, indirect costs and interest expenses related to services and funding provided by GE for the periods prior to the Separation, as indicated. ($ in millions) Years ended December 31, 2015 (c) 2014 2013 Direct costs (a) $ 261 $ 294 $ 207 Indirect costs (a) — 134 230 Interest expense (b) 4 113 157 Total expenses for services and funding provided by GECC $ 265 $ 541 $ 594 _______________________ (a) Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. (b) Included in interest expense in our Consolidated and Combined Statements of Earnings. (c) Represents expenses incurred through November 17, 2015, the date of Separation. Services Provided by GE Direct Costs Direct costs are costs associated with either services previously provided directly to us that were centralized at GE or services provided to us by third parties under contracts entered into by GE. These services included the provision of employee benefits and benefit administration; information technology services; telecommunication services; and other services, including leases for vehicles, equipment and facilities. GE allocated the costs associated with these services to us using established allocation methodologies. Under the Transitional Services Agreement (“TSA”) with GE, all of the costs billed to us by GE subsequent to the IPO are included as a component of direct costs and are at GE’s cost in accordance with historic allocation methodologies. Indirect Costs For periods prior to the IPO, GE and GECC allocated costs to us related to corporate overhead that directly or indirectly benefited our business. These assessments related to information technology, insurance coverage, tax services provided, executive incentive payments, advertising and branding and other functional support. These allocations were determined primarily using our percentage of GECC’s relevant expenses. Funding Provided by GECC GECC no longer provides funding to our business. During the first quarter of 2015, we prepaid all of the remaining outstanding indebtedness provided by the GECC Term Loan. See Note 8. Borrowings for additional information. Interest Expense For all periods subsequent to the IPO in 2014, interest expense represents interest accruing on the GECC Term Loan. For all other prior periods presented, interest expense represents interest cost assessed to us from GECC’s centralized treasury function based on fixed and floating interest rates, plus funding related costs that include charges for liquidity and other treasury costs. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Parent Company Financial Information | PARENT COMPANY FINANCIAL INFORMATION The following parent company financial statements for Synchrony Financial are provided in accordance with SEC rules, which requires such disclosure when restricted net assets of consolidated subsidiaries exceed 25% of consolidated net assets. At December 31, 2015 , restricted net assets of our subsidiaries were approximately $8.9 billion . Condensed Statements of Earnings For the years ended December 31 ($ in millions) 2015 2014 2013 Interest income: Interest income from subsidiaries $ 52 $ 85 $ 143 Interest on investment securities 7 1 — Total interest income 59 86 143 Interest expense: Interest on third-party debt 309 124 — Interest on related party debt 4 109 143 Total interest expense 313 233 143 Net interest income (254 ) (147 ) — Dividends from bank subsidiaries 708 885 1,400 Dividends from nonbank subsidiaries — 1,206 2,500 Other income 45 6 — Other expense (a) 74 417 26 Earnings before benefit from income taxes 425 1,533 3,874 Benefit from income taxes 95 215 7 Equity in undistributed net earnings of subsidiaries 1,694 361 (1,902 ) Net earnings $ 2,214 $ 2,109 $ 1,979 Comprehensive income $ 2,183 $ 2,112 $ 1,964 _____________ (a) Other expense for the year ended December 31, 2014, primarily included various intercompany charges that were eliminated in consolidation. Condensed Statements of Financial Position At December 31 ($ in millions) 2015 2014 Assets Cash and equivalents $ 5,301 $ 5,643 Investment securities 2,014 1,255 Investments in and amounts due from subsidiaries (a) 16,329 16,723 Goodwill 17 17 Other assets 334 148 Total assets $ 23,995 $ 23,786 Liabilities and Equity Amounts due to subsidiaries $ 211 $ 296 Bank term loan 4,151 8,245 Senior unsecured notes 6,590 3,593 Related party debt — 655 Accrued expenses and other liabilities 439 519 Total liabilities 11,391 13,308 Equity: Total equity 12,604 10,478 Total liabilities and equity $ 23,995 $ 23,786 _____________ (a) Includes investments in and amounts due from bank subsidiaries of $9.4 billion and $8.5 billion at December 31, 2015 and 2014 , respectively. Condensed Statements of Cash Flows For the years ended December 31 ($ in millions) 2015 2014 2013 Cash flows - operating activities Net earnings $ 2,214 $ 2,109 $ 1,979 Adjustments to reconcile net earnings to cash provided from operating activities Deferred income taxes 19 (36 ) — (Increase) decrease in other assets (133 ) 47 (8 ) Increase (decrease) in accrued expenses and other liabilities (257 ) 489 13 Equity in undistributed net earnings of subsidiaries (1,694 ) (361 ) 1,902 All other operating activities 181 (223 ) — Cash from operating activities 330 2,025 3,886 Cash flows - investing activities Net (increase) decrease in investments in and amounts due from subsidiaries 1,928 (1,030 ) (1,848 ) Maturity and redemption of investment securities 3,480 — — Purchases of investment securities (4,246 ) (1,256 ) — All other investing activities (6 ) (2 ) — Cash (used for) from investing activities 1,156 (2,288 ) (1,848 ) Cash flows - financing activities Third-party debt Proceeds from issuance of third-party debt 2,995 12,343 — Maturities and repayment of third-party debt (4,094 ) (505 ) — Related party debt Proceeds from issuance of related party debt — 1,615 — Maturities and repayment of related party debt (655 ) (9,820 ) (1,452 ) Proceeds from initial public offering — 2,842 — Net transfers to Parent — (603 ) (586 ) Increase (decrease) in amounts due to subsidiaries (56 ) 98 — All other financing activities (18 ) (64 ) — Cash (used for) from financing activities (1,828 ) 5,906 (2,038 ) Increase (decrease) in cash and equivalents (342 ) 5,643 — Cash and equivalents at beginning of year 5,643 — — Cash and equivalents at end of year $ 5,301 $ 5,643 $ — |
Legal Proceedings and Regulator
Legal Proceedings and Regulatory Matters | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Regulatory Matters | LEGAL PROCEEDINGS AND REGULATORY MATTERS In the normal course of business, from time to time, we have been named as a defendant in various legal proceedings, including arbitrations, class actions and other litigation, arising in connection with our business activities. Certain of the legal actions include claims for substantial compensatory and/or punitive damages, or claims for indeterminate amounts of damages. We are also involved, from time to time, in reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our business (collectively, “regulatory matters”), which could subject us to significant fines, penalties, obligations to change our business practices or other requirements resulting in increased expenses, diminished income and damage to our reputation. We contest liability and/or the amount of damages as appropriate in each pending matter. In accordance with applicable accounting guidance, we establish an accrued liability for legal and regulatory matters when those matters present loss contingencies which are both probable and reasonably estimable. Legal proceedings and regulatory matters are subject to many uncertain factors that generally cannot be predicted with assurance, and we may be exposed to losses in excess of any amounts accrued. For some matters, we are able to determine that an estimated loss, while not probable, is reasonably possible. For other matters, including those that have not yet progressed through discovery and/or where important factual information and legal issues are unresolved, we are unable to make such an estimate. We currently estimate that the reasonably possible losses for legal proceedings and regulatory matters, whether in excess of a related accrued liability or where there is no accrued liability, and for which we are able to estimate a possible loss, are immaterial. This represents management’s estimate of possible loss with respect to these matters and is based on currently available information. This estimate of possible loss does not represent our maximum loss exposure. The legal proceedings and regulatory matters underlying the estimate will change from time to time and actual results may vary significantly from current estimates. Our estimate of reasonably possible losses involves significant judgment, given the varying stages of the proceedings, the existence of numerous yet to be resolved issues, the breadth of the claims (often spanning multiple years), unspecified damages and/or the novelty of the legal issues presented. Based on our current knowledge, we do not believe that we are a party to any pending legal proceeding or regulatory matters that would have a material adverse effect on our consolidated and combined financial condition or liquidity. However, in light of the uncertainties involved in such matters, the ultimate outcome of a particular matter could be material to our operating results for a particular period depending on, among other factors, the size of the loss or liability imposed and the level of our earnings for that period, and could adversely affect our business and reputation. Below is a description of certain of our regulatory matters and legal proceedings. Regulatory Matters On December 10, 2013, we entered into a Consent Order with the CFPB relating to our CareCredit platform, which required us to pay up to $34.1 million to qualifying customers; provide additional training and monitoring of our CareCredit partners; include provisions in agreements with our CareCredit partners prohibiting charges for certain services not yet rendered; make changes to certain consumer disclosures, application procedures and procedures for resolution of customer complaints; and terminate CareCredit partners that have chargeback rates in excess of certain thresholds. Some of the business practice changes required by the Consent Order are similar to requirements in an Assurance of Discontinuance that we entered into with the Attorney General for the State of New York on June 3, 2013. The payments required by the Consent Order were completed in the second quarter of 2015. Our settlements with the CFPB and the New York State Attorney General do not preclude other regulators or state attorneys general from seeking additional monetary or injunctive relief with respect to CareCredit. On June 19, 2014, we entered into a Consent Order with the CFPB (the “2014 CFPB Consent Order”) related to the CFPB’s review of the Bank’s debt cancellation products and its marketing practices in its telesales channel related to those products. The 2014 CFPB Consent Order required us to refund $56 million to cardholders who enrolled in a debt cancellation product over the telephone from January 2010 to October 2012 ( $11 million of which was refunded prior to the 2014 CFPB Consent Order), pay civil money penalties of $3.5 million , and implement a compliance plan related to the sale of “add-on” products to the extent the Bank restarts telesales of such products (which were discontinued in October 2012). In the second quarter of 2015, we completed the consumer refunds. The 2014 CFPB Consent Order also resolved a separate CFPB investigation related to potential violations of the Equal Credit Opportunity Act as a result of the Bank’s omission of certain Spanish-speaking customers and customers residing in Puerto Rico from certain statement credit and settlement offers that were made to certain delinquent customers. The Bank identified this issue through an audit of its collection operations, reported it to the CFPB and initiated a remediation program. The CFPB referred the issue to the Department of Justice (the “DOJ”), which initiated a civil investigation. At the same time we entered into the 2014 CFPB Consent Order, we entered into a consent order with the DOJ (the “2014 DOJ Consent Order,” and together with the 2014 CFPB Consent Order, the “2014 Consent Orders”) to settle a complaint filed by the DOJ on June 19, 2014 in the United States District Court for the District of Utah that made similar allegations to those alleged in the 2014 CFPB Consent Order. The 2014 DOJ Consent Order was approved by the Court on June 26, 2014. The 2014 DOJ Consent Order is similar to the 2014 CFPB Consent Order and did not impose any additional requirements on us. The 2014 Consent Orders required us to complete our remediation program by providing additional payments, balance credits and balance waivers and to update our credit bureau reporting relating to the affected accounts. In the third quarter of 2015, we completed our consumer remediation program, which consisted of approximately $185 million of balance credits and waivers to previously charged-off accounts and approximately $15 million of other credits or payments. This remediation program included the $132 million of voluntary remediation completed prior to the 2014 Consent Orders. In addition to the consumer remediation, the 2014 Consent Orders required us to implement a fair lending compliance plan (including fair lending reviews, audits and training), which will, in part, be satisfied by our existing compliance processes. Although we do not believe that the 2014 Consent Orders themselves will have a material adverse effect on our results of operations going forward, we cannot be sure whether the settlements will have an adverse impact on our reputation or whether any similar actions will be brought by state attorneys general or others, all of which could have a material adverse effect on us. On October 30, 2014, the United States Trustee, which is part of the DOJ, filed an application in In re Nyree Belton , a Chapter 7 bankruptcy case pending in the U.S. Bankruptcy Court for the Southern District of New York for orders authorizing discovery of the Bank pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, related to an investigation of the Bank’s credit reporting. The discovery, which is ongoing, concerns allegations made in Belton et al. v. GE Capital Consumer Lending , a putative class action adversary proceeding pending in the same Bankruptcy Court. In the Belton adversary proceeding, which was filed on April 30, 2014, plaintiff alleges that the Bank violates the discharge injunction under Section 524(a)(2) of the Bankruptcy Code by attempting to collect discharged debts and by failing to update and correct credit information to credit reporting agencies to show that such debts are no longer due and owing because they have been discharged in bankruptcy. Plaintiff seeks declaratory judgment, injunctive relief and an unspecified amount of damages. On December 15, 2014, the Bankruptcy Court entered an order staying the adversary proceeding pending an appeal to the District Court of the Bankruptcy Court’s order denying the Bank’s motion to compel arbitration. On October 14, 2015, the District Court reversed the Bankruptcy Court and on November 4, 2015, the Bankruptcy Court granted the Bank’s motion to compel arbitration. On October 15, 2015, the Bank received a Civil Investigative Demand from the CFPB seeking information related to the Bank’s credit bureau reporting with respect to sold accounts. The information sought by the CFPB generally relates to the allegations made in Belton et al. v. GE Capital Consumer Lending . Other Matters The Bank is a defendant in three putative class actions alleging claims under the federal Telephone Consumer Protection Act (“TCPA”) as a result of phone calls made by the Bank. In each case, the complaints allege that the Bank placed calls to consumers by an automated telephone dialing system or using a pre-recorded message or automated voice without their consent and seek up to $1,500 for each violation. The amount of damages sought in the aggregate is unspecified. In two of the cases ( Abdeljalil and Hofer ), the plaintiffs assert that they received calls on their cellular telephones relating to accounts not belonging to them; in the third case ( Mintz ), the plaintiffs assert that the calls were made in connection with their account but that they had revoked consent to receive such calls. Abdeljalil et al. v. GE Capital Retail Bank was filed on August 22, 2012 in the U.S. District Court for the Southern District of California. On March 26, 2015, the Court entered an order granting class certification under Federal Rule of Civil Procedure 23(b)(3) (for damages) and denying class certification under Federal Rule of Civil Procedure 23(b)(2) (for injunctive relief). Hofer et al. v. Synchrony Bank was filed on November 4, 2014 in the U.S. District Court for the Eastern District of Missouri. In the first quarter of 2016, the Bank entered an agreement to resolve the Abdeljalil and Hofer actions on a class basis. Pursuant to the agreement, a stipulation dismissing the Hofer case was filed on February 11, 2016. Mintz et al v. Synchrony Bank was filed on December 28, 2015 in the U.S. District Court for the Eastern District of New York. In addition to the Abdeljalil, Hofer , and Mintz developments discussed above , the Bank has resolved five other putative class actions that made similar claims under the TCPA on an individual basis with the class representative. Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC was filed on January 17, 2014 in the U.S. District Court for the Middle District of Florida and dismissed on October 9, 2014. Fitzhenry v. Lowe’s Companies Inc. and GE Capital Retail Bank was filed on May 29, 2014 in the U.S. District Court for the District of South Carolina and dismissed on October 20, 2014. Cowan v. GE Capital Retail Bank was filed on May 14, 2014 in the U.S. District Court for the District of Connecticut and dismissed on July 8, 2015. Pittman et al. v. GE Capital d/b/a GE Capital Retail Bank was filed on July 29, 2014 in the U.S. District Court for the Northern District of Alabama and dismissed on August 20, 2015. Dubanoski et al. v. Wal-Mart Stores, Inc., for which the Bank indemnified the defendant, was filed on February 27, 2015 in the United States District Court for the Northern District of Illinois and dismissed on September 1, 2015. In addition to the TCPA class action lawsuits related to phone calls, Synchrony is a defendant in a putative class action lawsuit alleging claims under the TCPA relating to facsimiles. In Michael W. Kincaid, DDS et al. v. Synchrony Financial , plaintiff alleges that Synchrony violated the TCPA by sending fax advertisements without consent and without required notices, and seeks up to $1,500 for each violation. The amount of damages sought in the aggregate is unspecified. The complaint was filed in U.S. District Court for the Northern District of Illinois on January 20, 2016. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarterly Periods Ended ($ in millions) December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014 September 30, June 30, March 31, Interest income $ 3,509 $ 3,392 $ 3,177 $ 3,150 $ 3,260 $ 3,123 $ 2,926 $ 2,933 Interest expense 301 289 270 275 282 244 206 190 Net interest income 3,208 3,103 2,907 2,875 2,978 2,879 2,720 2,743 Earnings before provision for income taxes 868 919 861 883 853 879 764 890 Provision for income taxes 321 345 320 331 322 331 292 332 Net earnings $ 547 $ 574 $ 541 $ 552 $ 531 $ 548 $ 472 $ 558 Earnings per share Basic $ 0.66 $ 0.69 $ 0.65 $ 0.66 $ 0.64 $ 0.70 $ 0.67 $ 0.79 Diluted $ 0.65 $ 0.69 $ 0.65 $ 0.66 $ 0.64 $ 0.70 $ 0.67 $ 0.79 |
Basis of Presentation and Sum26
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated and combined financial statements were prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with U.S. GAAP requires us to make estimates based on assumptions about current, and for some estimates future, economic and market conditions (for example, unemployment, housing, interest rates and market liquidity) which affect reported amounts and related disclosures in our consolidated and combined financial statements. Although our current estimates contemplate current conditions and how we expect them to change in the future, as appropriate, it is reasonably possible that actual conditions could be different than anticipated in those estimates, which could materially affect our results of operations and financial position. Among other effects, such changes could result in incremental losses on loan receivables, future impairments of investment securities, goodwill and intangible assets, increases in reserves for contingencies, establishment of valuation allowances on deferred tax assets and increases in our tax liabilities. We conduct our operations within the United States and Canada. Substantially all of our revenues are from U.S. customers. The operating activities conducted by our non-U.S. affiliates use the local currency as their functional currency. The effects of translating the financial statements of these non-U.S. affiliates to U.S. dollars are included in equity. Asset and liability accounts are translated at year-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. |
Consolidated Basis of Presentation | Consolidated Basis of Presentation The transfer of all of the assets of our business from GECC and its subsidiaries to the Company was completed in the second quarter of 2014. As a result, the Company’s financial statements have been prepared on a consolidated basis beginning June 30, 2014. Under this basis of presentation, our financial statements consolidate all of our subsidiaries – i.e., entities in which we have a controlling financial interest, most often because we hold a majority voting interest. In addition, all periods subsequent to June 30, 2014 are presented on a consolidated basis. To determine if we hold a controlling financial interest in an entity, we first evaluate if we are required to apply the variable interest entity (“VIE”) model to the entity, otherwise the entity is evaluated under the voting interest model. Where we hold current or potential rights that give us the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (“power”) combined with a variable interest that gives us the right to receive potentially significant benefits or the obligation to absorb potentially significant losses (“significant economics”), we have a controlling financial interest in that VIE. Rights held by others to remove the party with power over the VIE are not considered unless one party can exercise those rights unilaterally. We consolidate certain securitization entities under the VIE model because we have both power and significant economics. See Note 5. Variable Interest Entities . We have reclassified certain prior-period amounts to conform to current-period presentation. Combined Basis of Presentation For all periods prior to June 30, 2014, the Company's financial statements were prepared on a combined basis. The combined financial statements combine all of our subsidiaries and certain accounts of GECC and its subsidiaries that were historically managed as part of our business. For all periods prior to the IPO, the Consolidated and Combined Statements of Earnings reflect intercompany expense allocations made to us by GE and GECC for certain corporate functions and for shared services provided by GE and GECC. Where possible, these allocations were made on a specific identification basis, and in other cases, these expenses were allocated by GE and GECC based on relative percentages of net operating costs or some other basis depending on the nature of the allocated cost. See Note 15. Related Party Transactions for further information on expenses allocated by GE and GECC. The historical financial results in the consolidated and combined financial statements presented may not be indicative of the results that would have been achieved had we operated as a separate, stand-alone entity during those periods. We believe that the consolidated and combined financial statements include all adjustments necessary for a fair presentation of the Company. |
Segment Reporting | Segment Reporting We conduct our operations through a single business segment. Substantially all of our interest and fees on loans and long-lived assets relate to our operations within the United States. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting , operating segments represent components of an enterprise for which separate financial information is available that is regularly evaluated by the chief operating decision maker in determining how to allocate resources and in assessing performance. The chief operating decision maker uses a variety of measures to assess the performance of the business as a whole, depending on the nature of the activity. Revenue activities are managed through three sales platforms (Retail Card, Payment Solutions and CareCredit). Those platforms are organized by the types of partners we work with to reach our customers, with success principally measured based on revenues, new accounts and other cardholder sales metrics. Detailed profitability information of the nature that could be used to allocate resources and assess the performance and operations for each sales platform individually, however, is not used by our chief operating decision maker. Expense activities, including funding costs, loan losses and operating expenses, are not measured for each platform but instead are managed for the Company as a whole. |
Cash and Equivalents | Cash and Equivalents Debt securities, money market instruments and bank deposits with original maturities of three months or less are included in cash equivalents unless designated as available-for-sale and classified as investment securities. Cash and equivalents at December 31, 2015 and 2014 primarily included interest-earning deposits with the Federal Reserve Bank. |
Restricted Cash and Equivalents | Restricted Cash and Equivalents Restricted cash and equivalents represent cash and equivalents that are not available to us due to restrictions related to its use. For example, the Bank is required to maintain reserves against its deposit liabilities in the form of vault cash and/or balances with the Federal Reserve Bank. In addition, our securitization entities are required to fund segregated accounts that may only be used for certain purposes, including payment of interest and servicing fees and repayment of maturing debt. We include our restricted cash and equivalents in other assets in our Consolidated Statements of Financial Position. |
Investment Securities | Investment Securities We report investments in debt and marketable equity securities at fair value. See Note 9. Fair Value Measurements for further information on fair value. Unrealized gains and losses on these investment securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. We regularly review investment securities for impairment using both quantitative and qualitative criteria. For debt securities, if we do not intend to sell the security or it is not more likely than not that we will be required to sell the security before recovery of our amortized cost, we evaluate other qualitative criteria to determine whether we do not expect to recover the amortized cost basis of the security, such as the financial health of and specific prospects for the issuer, including whether the issuer is in compliance with the terms and covenants of the security. We also evaluate quantitative criteria including determining whether there has been an adverse change in expected future cash flows. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its recoverable amount in earnings and the difference between the security’s recoverable amount and fair value in other comprehensive income. If we intend to sell the security or it is more likely than not we will be required to sell the security before recovery of its amortized cost basis, the security is also considered other-than-temporarily impaired and we recognize the entire difference between the security’s amortized cost basis and its fair value in earnings. For equity securities, we consider the length of time and magnitude of the amount that each security is in an unrealized loss position. If we do not expect to recover the entire amortized cost basis of the security, we consider the security to be other-than-temporarily impaired, and we record the difference between the security’s amortized cost basis and its fair value in earnings. Realized gains and losses are accounted for on the specific identification method. |
Loan Receivables | Loan Receivables Loan receivables primarily consist of open-end consumer revolving credit card accounts, closed-end consumer installment loans and open-end commercial revolving credit card accounts. Loan receivables are reported at the amounts due from customers, including unpaid interest and fees. |
Loan Receivables Held for Sale | Loan Receivables Held for Sale Loans purchased or originated with the intent to sell or as to which we do not have the ability and intent to hold for the foreseeable future are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. We continue to recognize interest and fees on these loans on the accrual basis. The fair value of loan receivables held for sale is determined on an aggregate homogeneous portfolio basis. If a loan is transferred from held for investment to held for sale, declines in fair value related to credit are recorded as a charge-off, which establishes a new cost basis for the loan. Further declines in fair value and recoveries up to the amortized cost and realized gains or losses are recorded as a component of other income in our Consolidated and Combined Statements of Earnings. |
Troubled Debt Restructuring | Our allowance for loan losses on TDRs is generally measured based on the difference between the recorded loan receivable and the present value of the expected future cash flows, discounted at the original effective interest rate of the loan. If the loan is collateral dependent, we measure impairment based upon the fair value of the underlying collateral less estimated selling costs. |
Allowance for Loan Losses | Allowance for Loan Losses Losses on loan receivables are recognized when they are incurred, which requires us to make our best estimate of probable losses inherent in the portfolio. The method for calculating the best estimate of probable losses takes into account our historical experience adjusted for current conditions with each product and customer type and our judgment concerning the probable effects of relevant observable data, trends and market factors. We evaluate each portfolio for impairment quarterly. For credit card receivables, our estimation process includes analysis of historical data, and there is a significant amount of judgment applied in selecting inputs and analyzing the results produced by the models to determine the allowance. We use a migration analysis to estimate the likelihood that a loan will progress through the various stages of delinquency. The migration analysis considers uncollectible principal, interest and fees reflected in the loan receivables. We use other analyses to estimate losses incurred on non-delinquent accounts. The considerations in these analyses include past performance, risk management techniques applied to various accounts, historical behavior of different account vintages, current economic conditions, recent trends in delinquencies, bankruptcy filings, account collection management, policy changes, account seasoning, loan volume and amounts, payment rates, forecasting uncertainties, and a qualitative assessment of the adequacy of the allowance for losses, which compares this allowance for losses to projected net charge-offs over the next twelve months, in a manner consistent with regulatory guidance. We regularly review our collection experience (including delinquencies and net charge-offs) in determining our allowance for loan losses. We also consider our historical loss experience to date based on actual defaulted loans and overall portfolio indicators including delinquent and non-accrual loans, trends in loan volume and lending terms, credit policies and other observable environmental factors such as unemployment and home price indices. The underlying assumptions, estimates and assessments we use to provide for losses are updated periodically to reflect our view of current conditions and are subject to the regulatory examination process, which can result in changes to our assumptions. Changes in such estimates can significantly affect the allowance and provision for losses. It is possible that we will experience credit losses that are different from our current estimates. Charge-offs are deducted from the allowance for losses when we judge the principal to be uncollectible and subsequent recoveries are added to the allowance generally at the time cash is received on a charged-off account. Delinquent receivables are those that are 30 days or more past due based on their contractual payments. Non-accrual loan receivables are those on which we have stopped accruing interest. We continue to accrue interest until the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days past due, with the exception of non-credit card accounts, for which we stop accruing interest in the period that the account becomes 90 days past due. Impaired loans represent loans for which it is probable that we will be unable to collect all amounts due according to the original contractual terms of the loan agreement and loans meeting the definition of a troubled debt restructuring (“TDR”). TDRs are those loans for which we have granted a concession to a borrower experiencing financial difficulties where we do not receive adequate compensation. The same loan receivable may meet more than one of the definitions above. Accordingly, these categories are not mutually exclusive and it is possible for a particular loan to meet the definitions of a TDR, impaired loan and non-accrual loan and be included in each of these categories. The categorization of a particular loan also may not be indicative of the potential for loss. Loan Modifications and Restructurings Our loss mitigation strategy is intended to minimize economic loss and, at times, can result in rate reductions, principal forgiveness, extensions or other actions, which may cause the related loan to be classified as a TDR and also as impaired. We utilize short-term ( 3 to 12 months) or long-term ( 12 to 60 months) modification programs to borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. For our credit card customers, the short-term program primarily consists of a reduced minimum payment and an interest rate reduction, both lasting for a period no longer than 12 months. The long-term program involves changing the structure of the loan to a fixed payment loan with a maturity no longer than 60 months and reducing the interest rate on the loan. The long-term program does not normally provide for the forgiveness of unpaid principal, but may allow for the reversal of certain unpaid interest or fee assessments. We also make loan modifications for customers who request financial assistance through external sources, such as a consumer credit counseling agency program. The loans that are modified typically receive a reduced interest rate but continue to be subject to the original minimum payment terms and do not normally include waiver of unpaid principal, interest or fees. The determination of whether these changes to the terms and conditions meet the TDR criteria includes our consideration of all relevant facts and circumstances. See Note 4. Loan Receivables and Allowance for Loan Losses for additional information on our loan modifications and restructurings. |
Charge-Offs | Charge-Offs Net charge-offs consist of the unpaid principal balance of loans held for investment that we determine are uncollectible, net of recovered amounts. We exclude accrued and unpaid finance charges, fees and third-party fraud losses from charge-offs. Charged-off and recovered accrued and unpaid finance charges and fees are included in interest and fees on loans while fraud losses are included in other expense. Charge-offs are recorded as a reduction to the allowance for loan losses and subsequent recoveries of previously charged-off amounts are credited to the allowance for loan losses. Costs incurred to recover charged-off loans are recorded as collection expense and are included in other expense in our Consolidated and Combined Statements of Earnings. We charge-off unsecured closed-end consumer installment loans and loans secured by collateral when they are 120 days contractually past due and unsecured open-ended revolving loans when they are 180 days contractually past due. Unsecured consumer loans in bankruptcy are charged-off within 60 days of notification of filing by the bankruptcy court or within contractual charge-off periods, whichever occurs earlier. Credit card loans of deceased account holders are charged-off within 60 days of receipt of notification. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets We do not amortize goodwill but test it at least annually for impairment at the reporting unit level pursuant to ASC 350, Intangibles—Goodwill and Other . A reporting unit is defined under GAAP as the operating segment, or one level below that operating segment (the component level) if discrete financial information is prepared and regularly reviewed by segment management. Our single operating segment comprises a single reporting unit, based on the level at which segment management regularly reviews and measures the business operating results. Goodwill impairment risk is first assessed by performing a qualitative review of entity-specific, industry, market and general economic factors for our reporting unit. If potential goodwill impairment risk exists that indicates that it is more likely than not that the carrying value of our reporting unit exceeds its fair value, we apply a two-step quantitative test. The first step compares the reporting unit’s estimated fair value with its carrying value. If the carrying value of our reporting unit’s net assets exceeds its fair value, the second step is applied to measure the difference between the carrying value and implied fair value of goodwill. If the carrying value of goodwill exceeds its implied fair value, the goodwill is considered impaired and reduced to its implied fair value. The qualitative assessment for each period presented in the consolidated and combined financial statements was performed without hindsight, assuming only factors and market conditions existing as of those dates, and resulted in no potential goodwill impairment risk for our reporting unit. Consequently, goodwill was not deemed to be impaired for any of the periods presented. Definite-lived intangible assets principally consist of customer-related assets including contract acquisition costs and purchased credit card relationships. These assets are amortized over their estimated useful lives and evaluated for impairment annually or whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. The evaluation compares the cash inflows expected to be generated from each intangible asset to its carrying value. If cash flows attributable to the intangible asset are less than the carrying value, the asset is considered impaired and written down to its estimated fair value. No impairments of definite-lived intangible assets have been recognized in the periods presented in the consolidated and combined financial statements. |
Revenue Recognition, Interest and Fees on Loans | Interest and Fees on Loans We use the effective interest method to recognize income on loans. Interest on loans is comprised largely of interest and late fees on credit card and other loans. Interest income is recognized based upon the amount of loans outstanding and their contractual interest rate. Late fees are recognized when billable to the customer. We continue to accrue interest and fees on credit cards until the accounts are charged-off in the period the account becomes 180 days past due. For non-credit card loans, we stop accruing interest and fees when the account becomes 90 days past due. Previously recognized interest income that was accrued but not collected from the customer is reversed. Although we stop accruing interest in advance of payments, we recognize interest income as cash is collected when appropriate, provided the amount does not exceed that which would have been earned at the historical effective interest rate; otherwise, payments received are applied to reduce the principal balance of the loan. We resume accruing interest on non-credit card loans when the customer’s account is less than 90 days past due and collection of such amounts is probable. Interest accruals on modified loans that are not considered to be TDRs may return to current status (re-aged) only after receipt of at least three consecutive minimum monthly payments subject to a re-aging limitation of once a year , or twice in a five -year period. Direct loan origination costs on credit card loans are deferred and amortized on a straight-line basis over a one-year period, or the life of the loan for other loan receivables, and are included in interest and fees on loans in our Consolidated and Combined Statements of Earnings. See Note 4. Loan Receivables and Allowance for Loan Losses for further detail. Other loan fees including miscellaneous fees charged to borrowers are recognized net of waivers and charge-offs when the related transaction or service is provided, and are included in other income in our Consolidated and Combined Statements of Earnings. |
Revenue Recognition, Promotional Financing | Promotional Financing Loans originated with promotional financing may include deferred interest financing (interest accrues during a promotional period and becomes payable if the full purchase amount is not paid off during the promotional period), no interest financing (no interest accrues during a promotional period but begins to accrue thereafter on any outstanding amounts at the end of the promotional period) and reduced interest financing (interest accrues monthly at a promotional interest rate during the promotional period). For deferred interest financing, we bill interest to the borrower, retroactive to the inception of the loan, if the loan is not repaid prior to the specified date. Income is recognized on such loans when it is billable. In almost all cases, our retail partner will pay an upfront fee or reimburse us to compensate us for all or part of the costs associated with providing the promotional financing. Upfront fees are deferred and accreted to income over the promotional period. Reimbursements are estimated and accrued as income over the promotional period. |
Revenue Recognition, Purchased Loans | Purchased Loans Loans acquired by purchase are recorded at fair value, which incorporates our estimate at the acquisition date of the credit losses over the remaining life of the acquired loans. As a result, the allowance for losses is not carried over at acquisition. For loans acquired with evidence of credit deterioration, the excess of cash flows expected at acquisition over the initial acquisition cost is recognized into interest income over their remaining lives using the effective interest method. Subsequent decreases to the expected cash flows for these loans require us to evaluate the need for an allowance for credit losses. Subsequent improvements in expected cash flows are recognized into interest income prospectively. For other acquired loans, the excess of contractually required cash flows over the initial acquisition cost is recognized into interest income over the remaining lives using the effective interest method. Subsequent increases in incurred losses for these loans require us to evaluate the need for an allowance for credit losses. Our evaluation of the amount of future cash flows expected to be collected is performed in a similar manner as that used to determine our allowance for loan losses. |
Revenue Recognition, Retailer Share Arrangements | Retailer Share Arrangements Most of our Retail Card program agreements and certain other program agreements contain retailer share arrangements that provide for payments to our partners if the economic performance of the program exceeds a contractually defined threshold. Although the share arrangements vary by partner, these arrangements are generally structured to measure the economic performance of the program, based typically on agreed upon program revenues (including interest income and certain other income) less agreed upon program expenses (including interest expense, provision for credit losses, retailer payments and operating expenses), and share portions of this amount above a negotiated threshold. These thresholds and the economic performance of a program are based on, among other things, agreed upon measures of program expenses. On a quarterly basis, we make a judgment as to whether it is probable that the performance threshold will be met under a particular retail partner’s retailer share arrangement. The current period’s estimated contribution to that ultimate expected payment is recorded as a liability. To the extent facts and circumstances change and the cumulative probable payment for prior months has changed, a cumulative adjustment is made to align the retailer share arrangement liability balance with the amount considered probable of being paid relating to past periods. |
Revenue Recognition, Loyalty Programs | Loyalty Programs Our loyalty programs are designed to generate increased purchase volume per customer while reinforcing the value of our credit cards and strengthening cardholder loyalty. These programs typically provide cardholders with rewards in the form of merchandise discounts that are earned by achieving a pre-set spending level on their private label credit card or Dual Card. Other programs provide cash back or reward points, which are redeemable for a variety of products or awards. These programs are primarily in our Retail Card platform. We establish a rewards liability based on points and merchandise discounts earned that are ultimately expected to be redeemed and the average cost per point at redemption. The rewards liability is included in accrued expenses and other liabilities in our Consolidated Statements of Financial Position. Cash rebates are earned based on a tiered percentage of purchase volume. As points and discounts are redeemed or cash rebates are issued, the rewards liability is relieved. The estimated cost of loyalty programs is classified as a reduction to other income in our Consolidated and Combined Statements of Earnings. |
Revenue Recognition, Fraud Losses | Fraud Losses We experience third-party fraud losses from the unauthorized use of credit cards and when loans are obtained through fraudulent means. Fraud losses are included as a charge within other expense in our Consolidated and Combined Statements of Earnings, net of recoveries, when such losses are probable. Loans are charged off, as applicable, after the investigation period has completed. |
Income Taxes | Income Taxes For periods up to and including the date of Separation, we are included in the consolidated U.S. federal and state income tax returns of GE, where applicable, but also file certain separate state and foreign income tax returns. For periods after the date of Separation, we will file separate consolidated U.S. federal and state income tax returns. The tax provision is presented on a separate company basis as if we were a separate filer for tax purposes for all periods presented. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated and combined financial statements in the period in which they occur. Our current obligations for taxes are settled with GE, or the relevant tax authority, as applicable, on an estimated basis and adjusted in later periods as appropriate and are reflected in our consolidated and combined financial statements in the periods in which those settlements occur. We recognize the current and deferred tax consequences of all transactions that have been recognized in the financial statements using the provisions of the enacted tax laws. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax laws and rates that will be in effect when the differences are expected to reverse. We record valuation allowances to reduce deferred tax assets to the amount that is more likely than not to be realized. We recognize accrued interest and penalties related to unrecognized tax benefits as interest expense and provision for income taxes, respectively. |
Fair Value Measurements | Fair Value Measurements For financial assets and liabilities measured at fair value on a recurring basis, fair value is the price we would receive to sell an asset or pay to transfer a liability in an orderly transaction with a market participant at the measurement date. In the absence of active markets for the identical assets or liabilities, such measurements involve developing assumptions based on market observable data and, in the absence of such data, internal information that is consistent with what market participants would use in a hypothetical transaction that occurs at the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. Preference is given to observable inputs. These two types of inputs create the following fair value hierarchy: Level 1— Quoted prices for identical instruments in active markets. Level 2— Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3— Significant inputs to the valuation model are unobservable. We maintain policies and procedures to value instruments using the best and most relevant data available. In addition, we have risk management teams that review valuation, including independent price validation for certain instruments. We use non-binding broker quotes and third-party pricing services as our primary basis for valuation when there is limited or no relevant market activity for a specific instrument or for other instruments that share similar characteristics. We have not adjusted prices that we have obtained. The third-party brokers and third-party pricing services do not provide us access to their proprietary valuation models, inputs and assumptions. Accordingly, our risk management, treasury and/or finance personnel conduct reviews of these brokers and services, as applicable. In addition, we conduct internal reviews of pricing provided by our third-party pricing service for all investment securities on a quarterly basis to ensure reasonableness of valuations used in the consolidated and combined financial statements. These reviews are designed to identify prices that appear stale, those that have changed significantly from prior valuations and other anomalies that may indicate that a price may not be accurate. Based on the information available, we believe that the fair values provided by the third-party pricing services are representative of prices that would be received to sell the assets at the measurement date (exit prices) and are classified appropriately in the hierarchy. Recurring Fair Value Measurements Our investments in debt and equity securities are measured at fair value every reporting period on a recurring basis. Non-Recurring Fair Value Measurements Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs. Financial Assets and Financial Liabilities Carried at Other than Fair Value The following is a description of the valuation techniques used to estimate the fair values of the financial assets and liabilities carried at other than fair value. Loan receivables, net In estimating the fair value for our loan receivables, we use a discounted future cash flow model. We use various unobservable inputs including estimated interest and fee income, payment rates, loss rates and discount rates (which consider current market interest rate data adjusted for credit risk and other factors) to estimate the fair values of loans. When collateral dependent, loan receivables may be valued using collateral values. Deposits For demand deposits with no defined maturity, carrying value approximates fair value due to the potentially liquid nature of these deposits. For fixed-maturity certificates of deposit, fair values are estimated by discounting expected future cash flows using market rates currently offered for deposits with similar remaining maturities. Borrowings The fair values of borrowings of consolidated securitization entities are based on valuation methodologies that utilize current market interest rate data, which are comparable to market quotes adjusted for our non-performance risk. Borrowings that are publicly traded securities are classified as level 2. Borrowings that are not publicly traded are classified as level 3. The fair values of the senior unsecured notes are based on secondary market trades and other observable inputs and are classified as level 2. The fair value of the Bank Term Loan is based on non-binding broker quotes and is classified as level 3. |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | Our investment securities consist of the following: December 31, 2015 December 31, 2014 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value Debt U.S. government and federal agency $ 2,768 $ — $ (7 ) $ 2,761 $ 1,252 $ — $ — $ 1,252 State and municipal 51 1 (3 ) 49 57 1 (1 ) 57 Residential mortgage-backed (a) 323 1 (7 ) 317 271 3 (3 ) 271 U.S. corporate debt — — — — 3 — — 3 Equity 15 — — 15 15 — — 15 Total $ 3,157 $ 2 $ (17 ) $ 3,142 $ 1,598 $ 4 $ (4 ) $ 1,598 _______________________ (a) At December 31, 2015 and 2014 , all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. |
Available-for-sale Securities, Continuous Loss Position, Fair Value | The following table presents the estimated fair values and gross unrealized losses of our available-for-sale investment securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At December 31, 2015 Debt U.S. government and federal agency $ 2,611 $ (7 ) $ — $ — State and municipal 40 (3 ) — — Residential mortgage-backed 175 (3 ) 91 (4 ) Equity 1 — — — Total $ 2,827 $ (13 ) $ 91 $ (4 ) At December 31, 2014 Debt U.S. government and federal agency $ 700 $ — $ — $ — State and municipal — — 34 (1 ) Residential mortgage-backed 30 — 85 (3 ) Total $ 730 $ — $ 119 $ (4 ) |
Investments Classified by Contractual Maturity Date | Contractual Maturities of Investments in Available-for-Sale Debt Securities (excluding residential mortgage-backed securities) Amortized Estimated At December 31, 2015 ($ in millions) cost fair value Due Within one year $ 1,218 $ 1,218 After one year through five years $ 1,550 $ 1,544 After five years through ten years $ — $ — After ten years $ 51 $ 48 |
Loan Receivables and Allowanc28
Loan Receivables and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | At December 31 ($ in millions) 2015 2014 Credit cards $ 65,773 $ 58,880 Consumer installment loans 1,154 1,063 Commercial credit products 1,323 1,320 Other 40 23 Total loan receivables, before allowance for losses (a)(b) $ 68,290 $ 61,286 _______________________ (a) Total loan receivables include $25.5 billion and $27.0 billion of restricted loans of consolidated securitization entities at December 31, 2015 and 2014 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At December 31, 2015 and 2014 , loan receivables included deferred expense, net of deferred income, of $63 million and $46 million, respectively. |
Allowance for Credit Losses on Financing Receivables | Allowance for Loan Losses ($ in millions) Balance at January 1, 2015 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2015 Credit cards $ 3,169 $ 2,880 $ (3,289 ) $ 660 $ 3,420 Consumer installment loans 22 25 (35 ) 14 26 Commercial credit products 45 46 (47 ) 6 50 Other — 1 — — 1 Total $ 3,236 $ 2,952 $ (3,371 ) $ 680 $ 3,497 ($ in millions) Balance at January 1, 2014 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2014 Credit cards $ 2,827 $ 2,858 $ (3,111 ) $ 595 $ 3,169 Consumer installment loans 19 20 (30 ) 13 22 Commercial credit products 46 39 (48 ) 8 45 Total $ 2,892 $ 2,917 $ (3,189 ) $ 616 $ 3,236 ($ in millions) Balance at January 1, 2013 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2013 Credit cards $ 2,174 $ 2,970 $ (2,847 ) $ 530 $ 2,827 Consumer installment loans 62 49 (111 ) 19 19 Commercial credit products 38 53 (53 ) 8 46 Total $ 2,274 $ 3,072 $ (3,011 ) $ 557 $ 2,892 |
Past Due Financing Receivables | Delinquent and Non-accrual Loans At December 31, 2015 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing (a) Credit cards $ 1,451 $ 1,257 $ 2,708 $ 1,257 $ — Consumer installment loans 16 3 19 — 3 Commercial credit products 32 13 45 13 — Total delinquent loans $ 1,499 $ 1,273 $ 2,772 $ 1,270 $ 3 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % At December 31, 2014 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing (a) Credit cards $ 1,331 $ 1,147 $ 2,478 $ 1,147 $ — Consumer installment loans 15 2 17 — 2 Commercial credit products 28 13 41 13 — Total delinquent loans $ 1,374 $ 1,162 $ 2,536 $ 1,160 $ 2 Percentage of total loan receivables (a) 2.2 % 1.9 % 4.1 % 1.9 % — % ______________________ (a) Percentages are calculated based on period-end balances |
Troubled Debt Restructurings on Financing Receivables | The following table provides information on loans that entered a loan modification program during the periods presented: For the years ended December 31 ($ in millions) 2015 2014 Credit cards $ 499 $ 423 Consumer installment loans — — Commercial credit products 5 5 Total $ 504 $ 428 |
Impaired Financing Receivables | The following table provides information about loans classified as TDRs and specific reserves. We do not evaluate credit card loans for impairment on an individual basis but instead estimate an allowance for loan losses on a collective basis. As a result, there are no impaired loans for which there is no allowance. At December 31, 2015 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 756 $ (256 ) $ 500 $ 659 Consumer installment loans — — — — Commercial credit products 7 (3 ) 4 6 Total $ 763 $ (259 ) $ 504 $ 665 At December 31, 2014 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 716 $ (217 ) $ 499 $ 613 Consumer installment loans — — — — Commercial credit products 8 (3 ) 5 8 Total $ 724 $ (220 ) $ 504 $ 621 |
Financial Effect of TDRs | The following table presents the types and financial effects of loans modified and accounted for as TDRs during the periods presented: Years ended December 31, 2015 2014 2013 ($ in millions) Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Interest income recognized during period when loans were impaired Interest income that would have been recorded with original terms Average recorded investment Credit cards $ 49 $ 151 $ 727 $ 56 $ 140 $ 745 $ 79 $ 175 $ 890 Consumer installment loans — — — — — — 1 3 — Commercial credit products — 2 7 — 2 10 1 2 12 Total $ 49 $ 153 $ 734 $ 56 $ 142 $ 755 $ 81 $ 180 $ 902 |
Troubled Debt Restructurings on Financing Receivables, Subsequent Default | The following table presents the type, number and amount of loans accounted for as TDRs that enrolled in a modification plan within the previous 12 months and experienced a payment default during the periods presented. A customer defaults from a modification program after two consecutive missed payments. Years ended December 31, 2015 2014 2013 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 28,126 $ 56 29,313 $ 60 30,640 $ 56 Consumer installment loans — — — — 98 3 Commercial credit products 95 1 159 1 42 — Total 28,221 $ 57 29,472 $ 61 30,780 $ 59 |
Financing Receivable Credit Quality Indicators | The following table provides the most recent FICO scores available for our customers at December 31, 2015 and 2014 , respectively, as a percentage of each class of loan receivable. The table below excludes 0.9% and 0.8% of our total loan receivables balance at December 31, 2015 and 2014 , respectively, which represents those customer accounts for which a FICO score is not available. At December 31 2015 2014 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 73.0 % 19.8 % 7.2 % 72.5 % 19.9 % 7.6 % Consumer installment loans 77.7 % 16.6 % 5.7 % 78.9 % 15.7 % 5.4 % Commercial credit products 86.8 % 8.7 % 4.5 % 86.5 % 8.6 % 4.8 % |
Interest Income and Interest Expense Disclosure | The following table provides additional information about our interest and fees on loans from our loan receivables, including held for sale: For the years ended December 31 ($ in millions) 2015 2014 2013 Credit cards $ 12,932 $ 11,967 $ 11,015 Consumer installment loans 104 99 129 Commercial credit products 142 149 150 Other 1 1 1 Total $ 13,179 $ 12,216 $ 11,295 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | The table below summarizes the assets and liabilities of our consolidated securitization VIEs described above. At December 31 ($ in millions) 2015 2014 Assets Loan receivables, net (a) $ 24,338 $ 25,645 Other assets (b) 141 1,134 Total $ 24,479 $ 26,779 Liabilities Borrowings $ 13,603 $ 14,967 Other liabilities 30 368 Total $ 13,633 $ 15,335 _______________________ (a) Includes $1.1 billion and $1.3 billion of related allowance for loan losses resulting in gross restricted loans of $25.5 billion and $27.0 billion at December 31, 2015 and 2014 , respectively. (b) Includes $118 million and $1.0 billion of segregated funds held by the VIEs at December 31, 2015 and 2014 , respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Consolidated Statements of Financial Position. |
Goodwill and Other Intangible30
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill ($ in millions) 2015 2014 Balance at January 1 $ 949 $ 949 Acquisitions — — Balance at December 31 $ 949 $ 949 |
Schedule of Finite-Lived Intangible Assets | Intangible Assets Subject to Amortization 2015 2014 At December 31 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,045 $ (505 ) $ 540 $ 849 $ (405 ) $ 444 Capitalized software 253 (92 ) 161 120 (45 ) 75 Total $ 1,298 $ (597 ) $ 701 $ 969 $ (450 ) $ 519 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | We estimate annual amortization expense for existing intangible assets over the next five calendar years to be as follows: ($ in millions) 2016 2017 2018 2019 2020 Amortization expense $ 158 $ 131 $ 120 $ 110 $ 89 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Schedule of Deposit Liabilities | Deposits 2015 2014 At December 31 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 43,295 1.6 % $ 34,847 1.6 % Non-interest-bearing deposits 152 — 108 — Total deposits $ 43,447 $ 34,955 ___________________ (a) Based on interest expense for the years ended December 31, 2015 and 2014 and average deposits balances. |
Schedule of Maturities of Deposit Liabilities | At December 31, 2015 , our interest-bearing time deposits maturing over the next five years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Deposits $ 12,151 $ 4,820 $ 2,126 $ 3,917 $ 2,815 $ 2,581 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Schedule of Debt | 2015 2014 At December 31 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2017 - 2020 1.3%-4.5% 1.9 % $ 6,396 $ 6,315 Floating securitized borrowings 2016 - 2019 0.8%-1.3% 1.0 % 7,207 8,652 Total borrowings of consolidated securitization entities 1.4 % 13,603 14,967 Bank term loan 2019 2.2 % 2.2 % 4,151 8,245 Senior unsecured notes: Fixed senior unsecured notes 2017 - 2025 1.8%-4.5% 3.4 % 6,340 3,593 Floating senior unsecured notes 2020 1.6 % 1.6 % 250 — Total senior unsecured notes 3.3 % 6,590 3,593 Related party debt N/A N/A N/A — 655 Total borrowings $ 24,344 $ 27,460 ___________________ (a) The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. 2015 Issuances ($ in millions) : Issuance Date Principal Amount Maturity Interest Rate February 2, 2015 $ 750 2020 2.700 % February 2, 2015 250 2020 Floating rate (three-month LIBOR plus 1.23%) July 23, 2015 1,000 2025 4.500 % December 4, 2015 1,000 2019 2.600 % $ 3,000 |
Schedule of Maturities of Long-term Debt | the maturities of the borrowings of our consolidated securitization entities over the next five years and thereafter were as follows: ($ in millions) 2016 2017 2018 2019 2020 Thereafter Borrowings of consolidated securitization entities $ 842 $ 5,383 $ 4,815 $ 1,538 $ 1,025 $ — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following tables present our assets measured at fair value on a recurring basis. At December 31, 2015 ($ in millions) Level 1 Level 2 Level 3 Total Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 2,761 $ — $ 2,761 State and municipal — — 49 49 Residential mortgage-backed — 317 — 317 Equity 15 — — 15 Total $ 15 $ 3,078 $ 49 $ 3,142 At December 31, 2014 ($ in millions) Assets Investment securities Debt U.S. Government and Federal Agency $ — $ 1,252 $ — $ 1,252 State and municipal — — 57 57 Residential mortgage-backed — 271 — 271 US Corporate — — 3 3 Equity 15 — — 15 Total $ 15 $ 1,523 $ 60 $ 1,598 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following table presents the changes in our Level 3 debt instruments that are measured on a recurring basis for the years ended December 31, 2015 and 2014 . Changes in Level 3 Instruments Years ended December 31, ($ in millions) 2015 2014 Balance at beginning of period $ 60 $ 46 Net realized/unrealized gains (losses) 1 7 Purchases — 11 Sales (6 ) — Settlements (6 ) (4 ) Balance at end of period $ 49 $ 60 Net change in unrealized gains (losses) relating to instruments still held at December 31 $ 1 $ 7 |
Fair Value, by Balance Sheet Grouping | Financial Assets and Financial Liabilities Carried at Other than Fair Value Carrying Corresponding fair value amount At December 31, 2015 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 12,325 $ 12,325 $ 11,865 $ 460 $ — Other assets (b) $ 391 $ 391 $ 391 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 64,793 $ 71,386 $ — $ — $ 71,386 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 43,447 $ 43,840 $ — $ 43,840 $ — Borrowings of consolidated securitization entities $ 13,603 $ 13,562 $ — $ 7,566 $ 5,996 Bank term loan $ 4,151 $ 4,125 $ — $ — $ 4,125 Senior unsecured notes $ 6,590 $ 6,574 $ — $ 6,574 $ — Carrying Corresponding fair value amount At December 31, 2014 ($ in millions) value Total Level 1 Level 2 Level 3 Financial Assets Financial assets for which carrying values equal or approximate fair value: Cash and equivalents (a) $ 11,828 $ 11,828 $ 8,153 $ 3,675 $ — Other assets (b) $ 1,104 $ 1,104 $ 1,104 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 58,050 $ 64,113 $ — $ — $ 64,113 Loan receivables held for sale (c) $ 332 $ 351 $ — $ — $ 351 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 34,955 $ 35,442 $ — $ 35,442 $ — Borrowings of consolidated securitization entities $ 14,967 $ 14,985 $ — $ 7,912 $ 7,073 Bank term loan $ 8,245 $ 8,204 $ — $ — $ 8,204 Senior unsecured notes $ 3,593 $ 3,660 $ — $ 3,660 $ — Related party debt $ 655 $ 655 $ — $ — $ 655 _______________________ (a) For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequa34
Regulatory and Capital Adequacy (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Banking and Thrift [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The actual capital amounts, ratios and the applicable required minimums of the Company and the Bank are as follows: Synchrony Financial At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio Total risk-based capital $ 12,533 18.1 % $ 5,550 8.0 % Tier 1 risk-based capital $ 11,633 16.8 % $ 4,162 6.0 % Tier 1 leverage $ 11,633 14.4 % $ 3,242 4.0 % Common equity Tier 1 Capital $ 11,633 16.8 % $ 3,122 4.5 % Synchrony Bank At December 31, 2015 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 8,443 16.6 % $ 4,071 8.0 % $ 5,089 10.0 % Tier 1 risk-based capital $ 7,781 15.3 % $ 3,053 6.0 % $ 4,071 8.0 % Tier 1 leverage $ 7,781 13.0 % $ 2,387 4.0 % $ 2,984 5.0 % Common equity Tier 1 Capital $ 7,781 15.3 % $ 2,290 4.5 % $ 3,308 6.5 % At December 31, 2014 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio Amount Ratio Total risk-based capital $ 7,100 17.1 % $ 3,322 8.0 % $ 4,152 10.0 % Tier 1 risk-based capital $ 6,559 15.8 % $ 1,661 4.0 % $ 2,491 6.0 % Tier 1 leverage $ 6,559 13.4 % $ 1,959 4.0 % $ 2,449 5.0 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at December 31, 2015 and are calculated based on Basel I capital rules at December 31, 2014. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings per share: Years ended December 31, (in millions, except per share data) 2015 2014 2013 Net earnings $ 2,214 $ 2,109 $ 1,979 Weighted average common shares outstanding, basic 833.8 757.4 705.3 Effect of dilutive securities 1.7 0.2 — Weighted average common shares outstanding, dilutive 835.5 757.6 705.3 Earnings per basic common share $ 2.66 $ 2.78 $ 2.81 Earnings per diluted common share $ 2.65 $ 2.78 $ 2.81 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Earnings before Provision for Income Taxes For the years ended December 31 ($ in millions) 2015 2014 2013 U.S. $ 3,513 $ 3,377 $ 3,124 Non-U.S. 18 9 18 Earnings before provision for income taxes $ 3,531 $ 3,386 $ 3,142 |
Schedule of Components of Income Tax Expense (Benefit) | Provision for Income Taxes For the years ended December 31 ($ in millions) 2015 2014 2013 Current provision for income taxes U.S. Federal $ 1,443 $ 1,320 $ 1,280 U.S. state and local 158 153 115 Non-U.S. 11 7 5 Total current provision for income taxes 1,612 1,480 1,400 Deferred (benefit) provision for income taxes U.S. Federal (263 ) (181 ) (215 ) U.S. state and local (32 ) (23 ) (21 ) Non-U.S. — 1 (1 ) Deferred (benefit) provision for income taxes (295 ) (203 ) (237 ) Total provision for income taxes $ 1,317 $ 1,277 $ 1,163 |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax Rate For the years ended December 31 2015 2014 2013 U.S. federal statutory income tax rate 35.0 % 35.0 % 35.0 % U.S. state and local income taxes, net of federal benefit 2.3 % 2.5 % 1.9 % All other, net — % 0.2 % 0.1 % Effective tax rate 37.3 % 37.7 % 37.0 % |
Schedule of Deferred Tax Assets and Liabilities | Significant Components of Our Net Deferred Income Taxes At December 31 ($ in millions) 2015 2014 Assets Allowance for loan losses $ 1,329 $ 1,221 Reward programs 106 72 Compensation and employee benefits 135 45 Net operating losses 12 12 Other assets 38 56 Total deferred income tax assets before valuation allowance 1,620 1,406 Valuation allowance (9 ) (10 ) Total deferred income tax assets $ 1,611 $ 1,396 Liabilities Original issue discount (a) $ (332 ) $ (519 ) Goodwill and identifiable intangibles (246 ) (259 ) Other liabilities (18 ) (15 ) Total deferred income tax liabilities (596 ) (793 ) Net deferred income tax assets $ 1,015 $ 603 _______________________ (a) Includes the deferred tax impact of an unrecognized tax benefit of $200 million at December 31, 2015 related to temporary items that are expected to reverse within the next twelve months. |
Summary of Unrecognized Tax Benefits | Reconciliation of Unrecognized Tax Benefits ($ in millions) 2015 2014 Balance at January 1 $ 102 $ 202 Additions: Tax positions of the current year (a) 236 75 Tax positions of prior years 6 20 Reductions: Prior year tax positions (8 ) (194 ) Settlements with tax authorities (1 ) — Expiration of the statute of limitation (8 ) (1 ) Balance at December 31 $ 327 $ 102 Portion of balance that, if recognized, would impact the effective income tax rate $ 79 $ 68 _______________________ (a) Included in the increase in tax positions for the year ended December 31, 2015 is an unrecognized tax benefit of $207 million ( $200 million net of federal benefit) related to temporary items that are expected to reverse within the next twelve months. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The following table sets forth the direct costs, indirect costs and interest expenses related to services and funding provided by GE for the periods prior to the Separation, as indicated. ($ in millions) Years ended December 31, 2015 (c) 2014 2013 Direct costs (a) $ 261 $ 294 $ 207 Indirect costs (a) — 134 230 Interest expense (b) 4 113 157 Total expenses for services and funding provided by GECC $ 265 $ 541 $ 594 _______________________ (a) Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. (b) Included in interest expense in our Consolidated and Combined Statements of Earnings. (c) Represents expenses incurred through November 17, 2015, the date of Separation. |
Parent Company Financial Info38
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Condensed Statements of Earnings | Condensed Statements of Earnings For the years ended December 31 ($ in millions) 2015 2014 2013 Interest income: Interest income from subsidiaries $ 52 $ 85 $ 143 Interest on investment securities 7 1 — Total interest income 59 86 143 Interest expense: Interest on third-party debt 309 124 — Interest on related party debt 4 109 143 Total interest expense 313 233 143 Net interest income (254 ) (147 ) — Dividends from bank subsidiaries 708 885 1,400 Dividends from nonbank subsidiaries — 1,206 2,500 Other income 45 6 — Other expense (a) 74 417 26 Earnings before benefit from income taxes 425 1,533 3,874 Benefit from income taxes 95 215 7 Equity in undistributed net earnings of subsidiaries 1,694 361 (1,902 ) Net earnings $ 2,214 $ 2,109 $ 1,979 Comprehensive income $ 2,183 $ 2,112 $ 1,964 _____________ (a) Other expense for the year ended December 31, 2014, primarily included various intercompany charges that were eliminated in consolidation. |
Condensed Statements of Financial Position | Condensed Statements of Financial Position At December 31 ($ in millions) 2015 2014 Assets Cash and equivalents $ 5,301 $ 5,643 Investment securities 2,014 1,255 Investments in and amounts due from subsidiaries (a) 16,329 16,723 Goodwill 17 17 Other assets 334 148 Total assets $ 23,995 $ 23,786 Liabilities and Equity Amounts due to subsidiaries $ 211 $ 296 Bank term loan 4,151 8,245 Senior unsecured notes 6,590 3,593 Related party debt — 655 Accrued expenses and other liabilities 439 519 Total liabilities 11,391 13,308 Equity: Total equity 12,604 10,478 Total liabilities and equity $ 23,995 $ 23,786 _____________ (a) Includes investments in and amounts due from bank subsidiaries of $9.4 billion and $8.5 billion at December 31, 2015 and 2014 , respectively. |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows For the years ended December 31 ($ in millions) 2015 2014 2013 Cash flows - operating activities Net earnings $ 2,214 $ 2,109 $ 1,979 Adjustments to reconcile net earnings to cash provided from operating activities Deferred income taxes 19 (36 ) — (Increase) decrease in other assets (133 ) 47 (8 ) Increase (decrease) in accrued expenses and other liabilities (257 ) 489 13 Equity in undistributed net earnings of subsidiaries (1,694 ) (361 ) 1,902 All other operating activities 181 (223 ) — Cash from operating activities 330 2,025 3,886 Cash flows - investing activities Net (increase) decrease in investments in and amounts due from subsidiaries 1,928 (1,030 ) (1,848 ) Maturity and redemption of investment securities 3,480 — — Purchases of investment securities (4,246 ) (1,256 ) — All other investing activities (6 ) (2 ) — Cash (used for) from investing activities 1,156 (2,288 ) (1,848 ) Cash flows - financing activities Third-party debt Proceeds from issuance of third-party debt 2,995 12,343 — Maturities and repayment of third-party debt (4,094 ) (505 ) — Related party debt Proceeds from issuance of related party debt — 1,615 — Maturities and repayment of related party debt (655 ) (9,820 ) (1,452 ) Proceeds from initial public offering — 2,842 — Net transfers to Parent — (603 ) (586 ) Increase (decrease) in amounts due to subsidiaries (56 ) 98 — All other financing activities (18 ) (64 ) — Cash (used for) from financing activities (1,828 ) 5,906 (2,038 ) Increase (decrease) in cash and equivalents (342 ) 5,643 — Cash and equivalents at beginning of year 5,643 — — Cash and equivalents at end of year $ 5,301 $ 5,643 $ — |
Selected Quarterly Financial 39
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Quarterly Periods Ended ($ in millions) December 31, 2015 September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014 September 30, June 30, March 31, Interest income $ 3,509 $ 3,392 $ 3,177 $ 3,150 $ 3,260 $ 3,123 $ 2,926 $ 2,933 Interest expense 301 289 270 275 282 244 206 190 Net interest income 3,208 3,103 2,907 2,875 2,978 2,879 2,720 2,743 Earnings before provision for income taxes 868 919 861 883 853 879 764 890 Provision for income taxes 321 345 320 331 322 331 292 332 Net earnings $ 547 $ 574 $ 541 $ 552 $ 531 $ 548 $ 472 $ 558 Earnings per share Basic $ 0.66 $ 0.69 $ 0.65 $ 0.66 $ 0.64 $ 0.70 $ 0.67 $ 0.79 Diluted $ 0.65 $ 0.69 $ 0.65 $ 0.66 $ 0.64 $ 0.70 $ 0.67 $ 0.79 |
Business Description (Details)
Business Description (Details) | Sep. 03, 2014 |
General Electric | |
Subsidiary, Sale of Stock [Line Items] | |
Percentage of ownership after transaction | 84.60% |
Basis of Presentation and Sum41
Basis of Presentation and Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2015segmentpaymentsales_platformreaging_limitation | |
Financing Receivable, Impaired [Line Items] | |
Number of sales platforms | sales_platform | 3 |
Threshold for defining delinquent receivables | 30 days |
Conditional threshold for defining non-accrual receivables | 180 days |
Conditional threshold for non-accrual status for non-credit card accounts | 90 days |
Number of consecutive monthly payments to maintain current status | payment | 3 |
Number of re-aging limitations in one year | 1 |
Number of re-aging limitations in five years | 2 |
Number of reportable segments | segment | 1 |
Unsecured Consumer and Secured by Collateral | |
Financing Receivable, Impaired [Line Items] | |
Period past due for charge-off | 120 days |
Unsecured Open-Ended Revolving | |
Financing Receivable, Impaired [Line Items] | |
Period past due for charge-off | 180 days |
Unsecured Consumer in Bankruptcy | |
Financing Receivable, Impaired [Line Items] | |
Period past due for charge-off | 60 days |
Credit cards | |
Financing Receivable, Impaired [Line Items] | |
Period past due for charge-off | 60 days |
Threshold for interest and fee accrual | 180 days |
Non-Credit Card Loan | |
Financing Receivable, Impaired [Line Items] | |
Threshold for interest and fee accrual | 90 days |
Maximum period past due for interest and fee accrual | 90 days |
Minimum | |
Financing Receivable, Impaired [Line Items] | |
Range of short-term modifications | 3 months |
Range of long-term modifications | 12 months |
Re-aging limitation period | 1 year |
Maximum | |
Financing Receivable, Impaired [Line Items] | |
Range of short-term modifications | 12 months |
Range of long-term modifications | 60 months |
Re-aging limitation period, long-term | 5 years |
Investment Securities - Schedul
Investment Securities - Schedule of Available for Sale Securities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Equity | |||
Amortized cost | $ 15 | $ 15 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | 15 | 15 | |
Total | |||
Amortized cost | 3,157 | 1,598 | |
Gross unrealized gains | 2 | 4 | |
Gross unrealized losses | (17) | (4) | |
Estimated fair value | 3,142 | 1,598 | |
U.S. government and federal agency | |||
Debt | |||
Amortized cost | 2,768 | 1,252 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | (7) | 0 | |
Estimated fair value | 2,761 | 1,252 | |
State and municipal | |||
Debt | |||
Amortized cost | 51 | 57 | |
Gross unrealized gains | 1 | 1 | |
Gross unrealized losses | (3) | (1) | |
Estimated fair value | 49 | 57 | |
Residential mortgage-backed | |||
Debt | |||
Amortized cost | [1] | 323 | 271 |
Gross unrealized gains | [1] | 1 | 3 |
Gross unrealized losses | [1] | (7) | (3) |
Estimated fair value | [1] | 317 | 271 |
U.S. corporate debt | |||
Debt | |||
Amortized cost | 0 | 3 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | $ 0 | $ 3 | |
[1] | At December 31, 2015 and 2014, all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. |
Investment Securities - Continu
Investment Securities - Continuous Unrealized Losses (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Other than temporary impairment | $ 0 | $ 0 | $ 0 |
Estimated fair value | |||
Less than 12 months | 2,827,000,000 | 730,000,000 | |
12 months or more | 91,000,000 | 119,000,000 | |
Gross unrealized losses | |||
Less than 12 months | (13,000,000) | 0 | |
12 months or more | (4,000,000) | (4,000,000) | |
State and municipal | |||
Estimated fair value | |||
Less than 12 months | 40,000,000 | 0 | |
12 months or more | 0 | 34,000,000 | |
Gross unrealized losses | |||
Less than 12 months | (3,000,000) | 0 | |
12 months or more | 0 | (1,000,000) | |
Residential mortgage-backed | |||
Estimated fair value | |||
Less than 12 months | 175,000,000 | 30,000,000 | |
12 months or more | 91,000,000 | 85,000,000 | |
Gross unrealized losses | |||
Less than 12 months | (3,000,000) | 0 | |
12 months or more | (4,000,000) | (3,000,000) | |
U.S. government and federal agency | |||
Estimated fair value | |||
Less than 12 months | 2,611,000,000 | 700,000,000 | |
12 months or more | 0 | 0 | |
Gross unrealized losses | |||
Less than 12 months | (7,000,000) | 0 | |
12 months or more | 0 | $ 0 | |
Equity | |||
Estimated fair value | |||
Less than 12 months | 1,000,000 | ||
12 months or more | 0 | ||
Gross unrealized losses | |||
Less than 12 months | 0 | ||
12 months or more | $ 0 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - US States and Political Subdivisions Debt Securities and US Government Corporations and Agencies Securities [Member] $ in Millions | Dec. 31, 2015USD ($) |
Amortized Cost | |
Within one year | $ 1,218 |
After one year through five years | 1,550 |
After five years through ten years | 0 |
After ten years | 51 |
Estimated Fair Value | |
Within one year | 1,218 |
After one year through five years | 1,544 |
After five years through ten years | 0 |
After ten years | $ 48 |
Loan Receivables and Allowanc45
Loan Receivables and Allowance for Loan Losses - Loan Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | [1],[2] | $ 68,290 | $ 61,286 |
Loan Receivables, Deferred Income | 63 | 46 | |
Variable Interest Entity, Primary Beneficiary | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 25,500 | 27,000 | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 65,773 | 58,880 | |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 1,154 | 1,063 | |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 1,323 | 1,320 | |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | $ 40 | $ 23 | |
[1] | At December 31, 2015 and 2014, loan receivables included deferred expense, net of deferred income, of $63 million and $46 million, respectively. | ||
[2] | Total loan receivables include $25.5 billion and $27.0 billion of restricted loans of consolidated securitization entities at December 31, 2015 and 2014, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. |
Loan Receivables and Allowanc46
Loan Receivables and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | $ 3,236 | $ 2,892 | $ 2,274 |
Provision charged to operations | 2,952 | 2,917 | 3,072 |
Gross charge-offs | (3,371) | (3,189) | (3,011) |
Recoveries | 680 | 616 | 557 |
Ending Balance | 3,497 | 3,236 | 2,892 |
Credit cards | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 3,169 | 2,827 | 2,174 |
Provision charged to operations | 2,880 | 2,858 | 2,970 |
Gross charge-offs | (3,289) | (3,111) | (2,847) |
Recoveries | 660 | 595 | 530 |
Ending Balance | 3,420 | 3,169 | 2,827 |
Consumer installment loans | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 22 | 19 | 62 |
Provision charged to operations | 25 | 20 | 49 |
Gross charge-offs | (35) | (30) | (111) |
Recoveries | 14 | 13 | 19 |
Ending Balance | 26 | 22 | 19 |
Commercial credit products | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 45 | 46 | 38 |
Provision charged to operations | 46 | 39 | 53 |
Gross charge-offs | (47) | (48) | (53) |
Recoveries | 6 | 8 | 8 |
Ending Balance | 50 | 45 | $ 46 |
Other | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 0 | ||
Provision charged to operations | 1 | ||
Gross charge-offs | 0 | ||
Recoveries | 0 | ||
Ending Balance | $ 1 | $ 0 |
Loan Receivables and Allowanc47
Loan Receivables and Allowance for Loan Losses - Delinquent and Non Accrual Status (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Past Due Amount | |||
Total past due | $ 2,772 | $ 2,536 | |
90 or more days delinquent and accruing | 1,270 | 1,160 | |
Total non-accruing | $ 3 | $ 2 | |
Financing Receivable, Percentage of Total Loan Receivables | |||
Percentage of Total Loan Receivables, 30-89 Days Past Due | [1] | 2.20% | 2.20% |
Percentage of Total Loan Receivables, Equal to Greater than 90 Days Past Due | [1] | 1.90% | 1.90% |
Percentage of Total Loan Receivables, Past Due | [1] | 4.10% | 4.10% |
Percentage of Total Loan Receivables, 90 Days Past Due and Still Accruing | [1] | 1.90% | 1.90% |
Percentage of Total Loan Receivables, Nonaccrual Status | [1] | 0.00% | 0.00% |
Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 2,708 | $ 2,478 | |
90 or more days delinquent and accruing | 1,257 | 1,147 | |
Total non-accruing | 0 | 0 | |
Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 19 | 17 | |
90 or more days delinquent and accruing | 0 | 0 | |
Total non-accruing | 3 | 2 | |
Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 45 | 41 | |
90 or more days delinquent and accruing | 13 | 13 | |
Total non-accruing | 0 | 0 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,499 | 1,374 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,451 | 1,331 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 16 | 15 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 32 | 28 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,273 | 1,162 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,257 | 1,147 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 3 | 2 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 13 | $ 13 | |
[1] | Percentages are calculated based on period-end balances |
Loan Receivables and Allowanc48
Loan Receivables and Allowance for Loan Losses - Loans Entered into a Loan Modification Program (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $ 504 | $ 428 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 499 | 423 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 0 | 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $ 5 | $ 5 |
Loan Receivables and Allowanc49
Loan Receivables and Allowance for Loan Losses - Classified as TDRs (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | $ 763 | $ 724 |
Related allowance | (259) | (220) |
Net recorded investment | 504 | 504 |
Unpaid principal balance | 665 | 621 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 756 | 716 |
Related allowance | (256) | (217) |
Net recorded investment | 500 | 499 |
Unpaid principal balance | 659 | 613 |
Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 0 | 0 |
Related allowance | 0 | 0 |
Net recorded investment | 0 | 0 |
Unpaid principal balance | 0 | 0 |
Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 7 | 8 |
Related allowance | (3) | (3) |
Net recorded investment | 4 | 5 |
Unpaid principal balance | $ 6 | $ 8 |
Loan Receivables and Allowanc50
Loan Receivables and Allowance for Loan Losses - Financial Effects of TDRs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | $ 49 | $ 56 | $ 81 |
Interest income that would have been recorded with original terms | 153 | 142 | 180 |
Average recorded investment | 734 | 755 | 902 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 49 | 56 | 79 |
Interest income that would have been recorded with original terms | 151 | 140 | 175 |
Average recorded investment | 727 | 745 | 890 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 0 | 0 | 1 |
Interest income that would have been recorded with original terms | 0 | 0 | 3 |
Average recorded investment | 0 | 0 | 0 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 0 | 0 | 1 |
Interest income that would have been recorded with original terms | 2 | 2 | 2 |
Average recorded investment | $ 7 | $ 10 | $ 12 |
Loan Receivables and Allowanc51
Loan Receivables and Allowance for Loan Losses - Payment Defaults (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015USD ($)account | Dec. 31, 2014USD ($)account | Dec. 31, 2013USD ($)account | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | account | 28,221 | 29,472 | 30,780 |
Loans defaulted | $ | $ 57 | $ 61 | $ 59 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | account | 28,126 | 29,313 | 30,640 |
Loans defaulted | $ | $ 56 | $ 60 | $ 56 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | account | 0 | 0 | 98 |
Loans defaulted | $ | $ 0 | $ 0 | $ 3 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | account | 95 | 159 | 42 |
Loans defaulted | $ | $ 1 | $ 1 | $ 0 |
Loan Receivables and Allowanc52
Loan Receivables and Allowance for Loan Losses - Credit Quality Indicators (Details) | Dec. 31, 2015 | Dec. 31, 2014 |
661 or higher | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 73.00% | 72.50% |
661 or higher | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 77.70% | 78.90% |
661 or higher | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 86.80% | 86.50% |
601 to 660 | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 19.80% | 19.90% |
601 to 660 | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 16.60% | 15.70% |
601 to 660 | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 8.70% | 8.60% |
600 or less | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 7.20% | 7.60% |
600 or less | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 5.70% | 5.40% |
600 or less | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 4.50% | 4.80% |
Loan Receivables and Allowanc53
Loan Receivables and Allowance for Loan Losses - Interest Income by Product (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 13,179 | $ 12,216 | $ 11,295 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 12,932 | 11,967 | 11,015 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 104 | 99 | 129 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 142 | 149 | 150 |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowanc54
Loan Receivables and Allowance for Loan Losses - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Maximum period for temporary modification program | 12 months | |
Maximum maturity period for loans in permanent modification program | 60 months | |
Percentage of loan receivable with no FICO score | 0.90% | 0.80% |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused line of credit | $ 322,000 | $ 297,000 |
Other income | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gain (loss) on sale of credit card portfolio | $ 20 | $ 46 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Variable Interest Entity [Line Items] | |||||
Loan receivables, net | $ 64,793 | $ 58,050 | |||
Other assets | [1] | 2,225 | 2,431 | ||
Total assets | 84,135 | 75,707 | |||
Total liabilities | 71,531 | 65,229 | |||
Allowance for loan losses | 3,497 | 3,236 | $ 2,892 | $ 2,274 | |
Loan receivable, before allowance for losses | [2],[3] | 68,290 | 61,286 | ||
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Loan receivables, net | [4] | 24,338 | 25,645 | ||
Other assets | [5] | 141 | 1,134 | ||
Total assets | 24,479 | 26,779 | |||
Borrowings | 13,603 | 14,967 | |||
Other liabilities | 30 | 368 | |||
Total liabilities | 13,633 | 15,335 | |||
Allowance for loan losses | 1,100 | 1,300 | |||
Loan receivable, before allowance for losses | 25,500 | 27,000 | |||
Other Assets | Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Restricted cash and cash equivalents | $ 118 | $ 1,000 | |||
[1] | Other assets include restricted cash and equivalents of $391 million and $1,104 million at December 31, 2015 and 2014, respectively. | ||||
[2] | At December 31, 2015 and 2014, loan receivables included deferred expense, net of deferred income, of $63 million and $46 million, respectively. | ||||
[3] | Total loan receivables include $25.5 billion and $27.0 billion of restricted loans of consolidated securitization entities at December 31, 2015 and 2014, respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. | ||||
[4] | Includes $1.1 billion and $1.3 billion of related allowance for loan losses resulting in gross restricted loans of $25.5 billion and $27.0 billion at December 31, 2015 and 2014, respectively. | ||||
[5] | Includes $118 million and $1.0 billion of segregated funds held by the VIEs at December 31, 2015 and 2014, respectively, which are classified as restricted cash and equivalents and included as a component of other assets in our Consolidated Statements of Financial Position. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Variable Interest Entity [Line Items] | |||
Interest and fees on loans | $ 13,179 | $ 12,216 | $ 11,295 |
Provision charged to operations | 2,952 | 2,917 | 3,072 |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Interest and fees on loans | 5,500 | 5,200 | 5,300 |
Provision charged to operations | 940 | 1,100 | 1,200 |
Interest on borrowings of consolidated securitization entities | $ 215 | $ 215 | $ 211 |
Goodwill and Other Intangible57
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets- Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 949 | $ 949 |
Acquisitions | 0 | 0 |
Ending balance | $ 949 | $ 949 |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,298 | $ 969 |
Accumulated amortization | (597) | (450) |
Net | 701 | 519 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,045 | 849 |
Accumulated amortization | (505) | (405) |
Net | 540 | 444 |
Capitalized software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 253 | 120 |
Accumulated amortization | (92) | (45) |
Net | $ 161 | $ 75 |
Goodwill and Other Intangible59
Goodwill and Other Intangible Assets Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 329 | ||
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 196 | ||
Weighted average useful life of finite-lived intangible assets acquired | 7 years | ||
Marketing Expense | Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 84 | $ 81 | $ 60 |
Other Expense | Finite-Lived Intangible Assets, Excluding Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 63 | $ 28 | $ 23 |
Goodwill and Other Intangible60
Goodwill and Other Intangible Assets- Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions | Dec. 31, 2015USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Amortization Expense, 2016 | $ 158 |
Amortization expense, 2017 | 131 |
Amortization expense, 2018 | 120 |
Amortization expense, 2019 | 110 |
Amortization expense, 2020 | $ 89 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Banking and Thrift [Abstract] | |||
Interest-bearing deposits, amount | $ 43,295 | $ 34,847 | |
Interest-bearing deposits, average rate | [1] | 1.60% | 1.60% |
Non-interest-bearing deposits, amount | $ 152 | $ 108 | |
Total deposits | $ 43,447 | $ 34,955 | |
[1] | Based on interest expense for the years ended December 31, 2015 and 2014 and average deposits balances. |
Deposits - Maturity Schedule (D
Deposits - Maturity Schedule (Details) $ in Millions | Dec. 31, 2015USD ($) |
Banking and Thrift [Abstract] | |
2,016 | $ 12,151 |
2,017 | 4,820 |
2,018 | 2,126 |
2,019 | 3,917 |
2,020 | 2,815 |
Thereafter | $ 2,581 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Billions | Dec. 31, 2015 | Dec. 31, 2014 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Interest-bearing deposits with certificates of $100,000 or more | $ 11.9 | $ 9.4 |
Interest-bearing deposits with certificates of $250,000 or more | 3.6 | $ 2.8 |
Program Arranger | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Broker network deposit sweeps | 2.9 | |
Demand deposits | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Demand deposits | $ 12 |
Borrowings - Borrowings Schedul
Borrowings - Borrowings Schedule (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | ||
Amount | ||||
Unsecured debt | $ 4,151 | $ 8,245 | ||
Related party debt | 0 | 655 | [1] | |
Total borrowings | [1] | 24,344 | 27,460 | |
Senior unsecured notes | ||||
Amount | ||||
Unsecured debt | [1] | $ 6,590 | 3,593 | |
Average rate | ||||
Weighted average interest rate | 3.30% | |||
Bank Term Loan | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 2.20% | |||
Amount | ||||
Unsecured debt | [1] | $ 4,151 | 8,245 | |
Average rate | ||||
Weighted average interest rate | 2.20% | |||
Fixed Senior Unsecured Notes | Senior unsecured notes | ||||
Amount | ||||
Unsecured debt | [1] | $ 6,340 | 3,593 | |
Average rate | ||||
Weighted average interest rate | 3.40% | |||
Floating Senior Secured Notes | Senior unsecured notes | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 1.60% | |||
Amount | ||||
Unsecured debt | [1] | $ 250 | 0 | |
Average rate | ||||
Weighted average interest rate | 1.60% | |||
Variable Interest Entity, Primary Beneficiary | ||||
Amount | ||||
Borrowings of consolidated securitization entities | [1] | $ 13,603 | 14,967 | |
Average rate | ||||
Weighted average interest rate | 1.40% | |||
Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | ||||
Amount | ||||
Borrowings of consolidated securitization entities | [1] | $ 6,396 | 6,315 | |
Average rate | ||||
Weighted average interest rate | 1.90% | |||
Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | ||||
Amount | ||||
Borrowings of consolidated securitization entities | [1] | $ 7,207 | $ 8,652 | |
Average rate | ||||
Weighted average interest rate | 1.00% | |||
Minimum | Fixed Senior Unsecured Notes | Senior unsecured notes | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 1.80% | |||
Minimum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 1.30% | |||
Minimum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 0.80% | |||
Maximum | Fixed Senior Unsecured Notes | Senior unsecured notes | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 4.50% | |||
Maximum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 4.50% | |||
Maximum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | ||||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | ||||
Stated interest rate | 1.30% | |||
[1] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Borrowings - Borrowings Maturit
Borrowings - Borrowings Maturity Schedule (Details) - Variable Interest Entity, Primary Beneficiary $ in Millions | Dec. 31, 2015USD ($) |
Variable Interest Entity [Line Items] | |
2,016 | $ 842 |
2,017 | 5,383 |
2,018 | 4,815 |
2,019 | 1,538 |
2,020 | 1,025 |
Thereafter | $ 0 |
Borrowings Borrowings - Senior
Borrowings Borrowings - Senior Unsecured (Details) - Senior unsecured notes - USD ($) | Feb. 02, 2015 | Dec. 31, 2015 | Dec. 04, 2015 | Dec. 01, 2015 | Jul. 23, 2015 | Aug. 11, 2014 |
Debt Instrument [Line Items] | ||||||
Principal amount | $ 3,000,000,000 | $ 3,600,000,000 | ||||
2.700% Senior Notes Due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 750,000,000 | |||||
Stated interest rate | 2.70% | |||||
Floating Rate Senior Notes Due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 250,000,000 | |||||
4.500% Senior Notes Due 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 1,000,000,000 | |||||
Stated interest rate | 4.50% | |||||
2.600% Senior Notes Due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 1,000,000,000 | |||||
Stated interest rate | 2.60% | |||||
LIBOR | Floating Rate Senior Notes Due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.23% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Aug. 11, 2014 | Aug. 05, 2014 | Oct. 31, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Feb. 25, 2016 | |
Debt Instrument [Line Items] | ||||||||||
Unsecured debt | $ 4,151,000,000 | $ 8,245,000,000 | ||||||||
Repayments of related party debt | 655,000,000 | 10,015,000,000 | $ 1,649,000,000 | |||||||
Bank Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of Credit Facility, Increase (Decrease), Net | $ 750,000,000 | |||||||||
Unsecured debt | [1] | $ 4,151,000,000 | 8,245,000,000 | |||||||
Stated interest rate | 2.20% | |||||||||
Unsecured Debt | Bank Term Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of third party debt | $ 505,000,000 | $ 4,100,000,000 | ||||||||
Principal amount | $ 8,000,000,000 | |||||||||
Unsecured Debt | Bank Term Loan | Subsequent Event [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayment of third party debt | $ 2,700,000,000 | |||||||||
Unsecured debt | $ 1,500,000,000 | |||||||||
Unsecured Debt | New GECC Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Repayments of related party debt | $ 655,000,000 | 845,000,000 | ||||||||
Senior unsecured notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | 3,600,000,000 | 3,000,000,000 | ||||||||
Unsecured debt | [1] | 6,590,000,000 | $ 3,593,000,000 | |||||||
Senior unsecured notes | 1.875% Senior Notes Due 2017 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 500,000,000 | |||||||||
Stated interest rate | 1.875% | |||||||||
Senior unsecured notes | 3% Senior Notes Due 2019 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 1,100,000,000 | |||||||||
Stated interest rate | 3.00% | |||||||||
Senior unsecured notes | 3.75% Percent Senior Notes Due 2021 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 750,000,000 | |||||||||
Stated interest rate | 3.75% | |||||||||
Senior unsecured notes | 4.25% Senior Notes Due 2024 | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 1,250,000,000 | |||||||||
Stated interest rate | 4.25% | |||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Undrawn secured borrowing commitments | $ 6,100,000,000 | |||||||||
General Electric Capital Corporation | Unsecured Debt | New GECC Term Loan Facility | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal amount | $ 1,500,000,000 | |||||||||
Minimum | Unsecured Debt | Bank Term Loan | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 0.65% | |||||||||
Minimum | Unsecured Debt | Bank Term Loan | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1.65% | |||||||||
Maximum | Unsecured Debt | Bank Term Loan | Base Rate [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 1.40% | |||||||||
Maximum | Unsecured Debt | Bank Term Loan | LIBOR | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Basis spread on variable rate | 2.40% | |||||||||
[1] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | $ 15 | $ 15 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 15 | 15 | |
Total | 3,142 | 1,598 | |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 15 | 15 | |
Total | 15 | 15 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 0 | 0 | |
Total | 3,078 | 1,523 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Equity securities | 0 | 0 | |
Total | 49 | 60 | |
U.S. Government and Federal Agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,761 | 1,252 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,761 | 1,252 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,761 | 1,252 | |
U.S. Government and Federal Agency | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 57 | |
State and municipal | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 57 | |
State and municipal | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
State and municipal | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 49 | 57 | |
Residential mortgage-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 317 | 271 |
Residential mortgage-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 317 | 271 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 317 | 271 | |
Residential mortgage-backed | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
U.S Corporate | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 0 | 3 | |
U.S Corporate | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 3 | ||
U.S Corporate | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | ||
U.S Corporate | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | ||
U.S Corporate | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 3 | ||
[1] | At December 31, 2015 and 2014, all of our residential mortgage-backed securities related to securities issued by government-sponsored entities and are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. All residential mortgage-backed securities are collateralized by U.S. mortgages. |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Level 3 Instruments (Details) - Level 3 - Fair Value, Measurements, Recurring - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning of period | $ 60 | $ 46 |
Net realized and unrealized gains (losses) | 1 | 7 |
Purchases | 0 | 11 |
Sales | (6) | 0 |
Settlements | (6) | (4) |
Balance at end of period | 49 | 60 |
Net change in unrealized gains (losses) relating to instruments still held at December 31 | $ 1 | $ 7 |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Asset and Liabilities Carried at Other than Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | $ 12,325 | $ 11,828 |
Other assets | [2] | 391 | 1,104 |
Loan receivables, net | [3] | 64,793 | 58,050 |
Loan receivables held for sale | [3] | 332 | |
Deposits | 43,447 | 34,955 | |
Related party debt | 655 | ||
Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 12,325 | 11,828 |
Other assets | [2] | 391 | 1,104 |
Loan receivables, net | [3] | 71,386 | 64,113 |
Loan receivables held for sale | [3] | 351 | |
Deposits | 43,840 | 35,442 | |
Related party debt | 655 | ||
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 11,865 | 8,153 |
Other assets | [2] | 391 | 1,104 |
Loan receivables, net | [3] | 0 | 0 |
Loan receivables held for sale | [3] | 0 | |
Deposits | 0 | 0 | |
Related party debt | 0 | ||
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 460 | 3,675 |
Other assets | [2] | 0 | 0 |
Loan receivables, net | [3] | 0 | 0 |
Loan receivables held for sale | [3] | 0 | |
Deposits | 43,840 | 35,442 | |
Related party debt | 0 | ||
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 0 | 0 |
Other assets | [2] | 0 | 0 |
Loan receivables, net | [3] | 71,386 | 64,113 |
Loan receivables held for sale | [3] | 351 | |
Deposits | 0 | 0 | |
Related party debt | 655 | ||
Variable Interest Entity, Primary Beneficiary | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 13,603 | 14,967 | |
Variable Interest Entity, Primary Beneficiary | Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 13,562 | 14,985 | |
Variable Interest Entity, Primary Beneficiary | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 0 | 0 | |
Variable Interest Entity, Primary Beneficiary | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 7,566 | 7,912 | |
Variable Interest Entity, Primary Beneficiary | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 5,996 | 7,073 | |
Bank Term Loan | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 4,151 | 8,245 | |
Bank Term Loan | Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 4,125 | 8,204 | |
Bank Term Loan | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 0 | 0 | |
Bank Term Loan | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 0 | 0 | |
Bank Term Loan | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 4,125 | 8,204 | |
Senior unsecured notes | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 6,590 | 3,593 | |
Senior unsecured notes | Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 6,574 | 3,660 | |
Senior unsecured notes | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 0 | 0 | |
Senior unsecured notes | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | 6,574 | 3,660 | |
Senior unsecured notes | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Debt instrument | $ 0 | $ 0 | |
[1] | For cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. Cash equivalents classified as Level 2 represent U.S. Government and Federal Agency debt securities with original maturities of three months or less. | ||
[2] | This balance relates to restricted cash and equivalents, which is included in other assets. | ||
[3] | Under certain retail partner program agreements, the expected sales proceeds related to the sale of their credit card portfolio may be limited to the amounts owed by our customers, which may be less than the fair value indicated above. |
Regulatory and Capital Adequa71
Regulatory and Capital Adequacy (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | |
Basel III [Member] | |||
Total risk-based capital | |||
Actual | $ 8,443 | ||
Actual (percent) | [1] | 16.60% | |
Minimum for capital adequacy purposes | $ 4,071 | ||
Minimum for capital adequacy purposes (percent) | 8.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 5,089 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 10.00% | ||
Tier 1 risk-based capital | |||
Actual | $ 7,781 | ||
Actual (percent) | [1] | 15.30% | |
Minimum for capital adequacy purposes | $ 3,053 | ||
Minimum for capital adequacy purposes (percent) | 6.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,071 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 8.00% | ||
Tier 1 leverage | |||
Actual | $ 7,781 | ||
Actual (percent) | [1] | 13.00% | |
Minimum for capital adequacy purposes | $ 2,387 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 2,984 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 5.00% | ||
Common equity Tier 1 Capital | |||
Actual | $ 7,781 | ||
Actual (percent) | [1] | 15.30% | |
Minimum for capital adequacy purposes | $ 2,290 | ||
Minimum for capital adequacy purposes (percent) | 4.50% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 3,308 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 6.50% | ||
Basel I [Member] | |||
Total risk-based capital | |||
Actual | $ 7,100 | ||
Actual (percent) | [1] | 17.10% | |
Minimum for capital adequacy purposes | $ 3,322 | ||
Minimum for capital adequacy purposes (percent) | 8.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,152 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 10.00% | ||
Tier 1 risk-based capital | |||
Actual | $ 6,559 | ||
Actual (percent) | [1] | 15.80% | |
Minimum for capital adequacy purposes | $ 1,661 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 2,491 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 6.00% | ||
Tier 1 leverage | |||
Actual | $ 6,559 | ||
Actual (percent) | [1] | 13.40% | |
Minimum for capital adequacy purposes | $ 1,959 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | ||
Minimum to be well-capitalized under prompt corrective action provisions | $ 2,449 | ||
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 5.00% | ||
Parent Company | Basel III [Member] | |||
Total risk-based capital | |||
Actual | $ 12,533 | ||
Actual (percent) | [1] | 18.10% | |
Minimum for capital adequacy purposes | $ 5,550 | ||
Minimum for capital adequacy purposes (percent) | 8.00% | ||
Tier 1 risk-based capital | |||
Actual | $ 11,633 | ||
Actual (percent) | [1] | 16.80% | |
Minimum for capital adequacy purposes | $ 4,162 | ||
Minimum for capital adequacy purposes (percent) | 6.00% | ||
Tier 1 leverage | |||
Actual | $ 11,633 | ||
Actual (percent) | [1] | 14.40% | |
Minimum for capital adequacy purposes | $ 3,242 | ||
Minimum for capital adequacy purposes (percent) | 4.00% | ||
Common equity Tier 1 Capital | |||
Actual | $ 11,633 | ||
Actual (percent) | [1] | 16.80% | |
Minimum for capital adequacy purposes | $ 3,122 | ||
Minimum for capital adequacy purposes (percent) | 4.50% | ||
[1] | Capital ratios are calculated based on the Basel III Standardized Approach rules, subject to applicable transition provisions, at December 31, 2015 and are calculated based on Basel I capital rules at December 31, 2014. |
Employee Benefit Plans- Narrati
Employee Benefit Plans- Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Maximum annual contributions per employee, percent | 3.00% | ||
Employer matching contribution of eligible compensation | 4.00% | ||
General Electric | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Net periodic benefit cost | $ 157 | $ 164 | $ 124 |
General Electric | Other Liabilities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Reimbursement obligations | $ 166 |
Earnings Per Share - Basic and
Earnings Per Share - Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | |||||||||||
Net earnings | $ 547 | $ 574 | $ 541 | $ 552 | $ 531 | $ 548 | $ 472 | $ 558 | $ 2,214 | $ 2,109 | $ 1,979 |
Weighted average common shares outstanding, basic (in shares) | 833.8 | 757.4 | 705.3 | ||||||||
Effect of dilutive securities (in shares) | 1.7 | 0.2 | 0 | ||||||||
Weighted average common shares outstanding, dilutive (in shares) | 835.5 | 757.6 | 705.3 | ||||||||
Earnings per basic common share (in usd per share) | $ 0.66 | $ 0.69 | $ 0.65 | $ 0.66 | $ 0.64 | $ 0.70 | $ 0.67 | $ 0.79 | $ 2.66 | $ 2.78 | $ 2.81 |
Earnings per diluted common share (in usd per share) | $ 0.65 | $ 0.69 | $ 0.65 | $ 0.66 | $ 0.64 | $ 0.70 | $ 0.67 | $ 0.79 | $ 2.65 | $ 2.78 | $ 2.81 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1 | 6 |
Equity and Other Stock Relate75
Equity and Other Stock Related Information Equity and Other Stock Related Information (Details) $ / shares in Units, $ in Millions | Sep. 03, 2014shares | Aug. 05, 2014USD ($)$ / sharesshares | Jul. 31, 2014 | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($) |
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock shares outstanding | 705,000,000 | 833,828,340 | 833,764,589 | |||
Proceeds from initial public offering | $ | $ 2,800 | $ 0 | $ 2,842 | $ 0 | ||
IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued in IPO | 125,000,000 | |||||
Price per share (in usd per share) | $ / shares | $ 23 | |||||
Over-Allotment Option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued in IPO | 3,500,000 | |||||
General Electric | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Percentage of ownership after transaction | 84.60% | |||||
Restricted Stock Units (RSUs) | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Conversion ratio to common stock | 1 | |||||
Restricted Stock Units (RSUs) | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Restricted stock units | 3,300,000 | |||||
Vesting period | 4 years | |||||
Employee Stock Option | IPO | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Stock options outstanding | 4,900,000 | |||||
Vesting period | 4 years | |||||
2014 annual grant | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares of common stock available for grant | 16,605,417 | |||||
Unrecognized compensation cost related to non-vested RSUs and Options | $ | $ 108 | |||||
Weighted average amortization period | 3 years | |||||
2014 annual grant | Restricted Stock Units (RSUs) | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Share-based compensation, annual vesting percentage | 20.00% | |||||
RSUs issued and outstanding (in shares) | 4,400,000 | |||||
2014 annual grant | Employee Stock Option | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Share-based compensation, annual vesting percentage | 20.00% | |||||
Stock options issued and outstanding | 6,500,000 | |||||
Common Stock | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Stock split, conversion ratio | 5,262.3512 | |||||
Common stock shares outstanding | 833,828,000 | 833,765,000 | ||||
Shares issued in IPO | 128,494,000 |
Income Taxes Income Taxes- Earn
Income Taxes Income Taxes- Earnings Before Income Tax Provision (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Before Provision For Income Taxes | |||||||||||
U.S. | $ 3,513 | $ 3,377 | $ 3,124 | ||||||||
Non-U.S. | 18 | 9 | 18 | ||||||||
Earnings before benefit from income taxes | $ 868 | $ 919 | $ 861 | $ 883 | $ 853 | $ 879 | $ 764 | $ 890 | $ 3,531 | $ 3,386 | $ 3,142 |
Income Taxes- Significant Compo
Income Taxes- Significant Components of Income Tax Provision (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current provision for income taxes | |||||||||||
U.S. Federal | $ 1,443 | $ 1,320 | $ 1,280 | ||||||||
U.S. state and local | 158 | 153 | 115 | ||||||||
Non-U.S. | 11 | 7 | 5 | ||||||||
Total current provision for income taxes | 1,612 | 1,480 | 1,400 | ||||||||
Deferred (benefit) provision for income taxes | |||||||||||
U.S. Federal | (263) | (181) | (215) | ||||||||
U.S. state and local | (32) | (23) | (21) | ||||||||
Non-U.S. | 0 | 1 | (1) | ||||||||
Deferred (benefit) provision for income taxes | (295) | (203) | (237) | ||||||||
Total provision for income taxes | $ 321 | $ 345 | $ 320 | $ 331 | $ 322 | $ 331 | $ 292 | $ 332 | $ 1,317 | $ 1,277 | $ 1,163 |
Income Taxes- Effective Income
Income Taxes- Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Effective Income Tax Rate Reconciliation | |||
U.S. federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
U.S. state and local income taxes, net of federal benefit | 2.30% | 2.50% | 1.90% |
All other, net | 0.00% | 0.20% | 0.10% |
Effective tax rate | 37.30% | 37.70% | 37.00% |
Income Taxes- Deferred Tax Asse
Income Taxes- Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits, temporary differences, net | $ 200 | |||
Assets | ||||
Allowance for loan losses | 1,329 | $ 1,221 | ||
Reward programs | 106 | 72 | ||
Compensation and employee benefits | 135 | 45 | ||
Net operating losses | 12 | 12 | ||
Other assets | 38 | 56 | ||
Total deferred income tax assets before valuation allowance | 1,620 | 1,406 | ||
Valuation allowance | (9) | (10) | ||
Total deferred income tax assets | 1,611 | 1,396 | ||
Liabilities | ||||
Original issue discount(a) | (332) | [1] | (519) | |
Goodwill and identifiable intangibles | (246) | (259) | ||
Other liabilities | (18) | (15) | ||
Total deferred income tax liabilities | (596) | (793) | ||
Net deferred income tax assets | 1,015 | 603 | ||
Unrecognized tax benefits | 327 | $ 102 | $ 202 | |
Domestic Tax Authority | ||||
Income Tax Contingency [Line Items] | ||||
Unrecognized tax benefits, temporary differences, net | $ 200 | |||
[1] | Includes the deferred tax impact of an unrecognized tax benefit of $200 million at December 31, 2015 related to temporary items that are expected to reverse within the next twelve months. |
Income Taxes- Narrative (Detail
Income Taxes- Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Operating Loss Carryforwards [Line Items] | |||
Temporary differences due to investments in non-U..S. subsidiaries | $ 29 | $ 23 | |
Unrecognized tax benefits | 327 | 102 | $ 202 |
State and Local Jurisdiction | |||
Operating Loss Carryforwards [Line Items] | |||
Operating Loss Carryforwards | 482 | 520 | |
Unrecognized tax benefits | $ 22 | $ 21 |
Income Taxes- Unrecognized Tax
Income Taxes- Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 102 | $ 202 | |
Additions: | |||
Tax positions of the current year(a) | 236 | [1] | 75 |
Tax positions of prior years | 6 | 20 | |
Reductions: | |||
Prior year tax positions | (8) | (194) | |
Settlements with tax authorities | (1) | 0 | |
Expiration of the statute of limitation | (8) | (1) | |
Ending balance | 327 | 102 | |
Portion of balance that, if recognized, would impact the effective income tax rate | 79 | $ 68 | |
Unrecognized tax benefits expected to reverse in the next twelve months, gross | 207 | ||
Unrecognized tax benefits, temporary differences, net | 200 | ||
Domestic Tax Authority | |||
Reductions: | |||
Unrecognized tax benefits, temporary differences, net | $ 200 | ||
[1] | Included in the increase in tax positions for the year ended December 31, 2015 is an unrecognized tax benefit of $207 million ($200 million net of federal benefit) related to temporary items that are expected to reverse within the next twelve months. |
Income Taxes- Unrecognized Ta82
Income Taxes- Unrecognized Tax Benefits Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits, temporary differences, net | $ 200 | ||
Tax positions of prior years | 6 | $ 20 | |
Unrecognized tax benefits | 327 | 102 | $ 202 |
State and Local Jurisdiction | |||
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits | 22 | 21 | |
Domestic Tax Authority | |||
Income Tax Contingency [Line Items] | |||
Unrecognized tax benefits, temporary differences, net | $ 200 | ||
General Electric Capital Corporation | |||
Income Tax Contingency [Line Items] | |||
Tax positions of prior years | 194 | ||
Increase in additional paid in capital related to TSSA | $ 147 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |||
Related Party Transaction [Line Items] | |||||
Interest expense | $ 4 | $ 113 | $ 157 | ||
General Electric and Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Total expenses for services and funding provided by GECC | 265 | [1] | 541 | 594 | |
Other Expense | Direct costs | General Electric and Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Non-interest expenses | [2] | 261 | [1] | 294 | 207 |
Other Expense | Indirect costs | General Electric and Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Non-interest expenses | [2] | 0 | [1] | 134 | 230 |
Interest Expense | General Electric and Subsidiaries | |||||
Related Party Transaction [Line Items] | |||||
Interest expense | [3] | $ 4 | [1] | $ 113 | $ 157 |
[1] | Represents expenses incurred through November 17, 2015, the date of Separation. | ||||
[2] | Direct and indirect costs are included in the other expense line items in our Consolidated and Combined Statements of Earnings. | ||||
[3] | Included in interest expense in our Consolidated and Combined Statements of Earnings. |
Parent Company Financial Info84
Parent Company Financial Information- Additional Information (Details) $ in Billions | Dec. 31, 2015USD ($) |
Subsidiaries | |
Condensed Financial Statements, Captions [Line Items] | |
Restricted Assets | $ 8.9 |
Parent Company Financial Info85
Parent Company Financial Information- Condensed Statements of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Interest on investment securities | $ 49 | $ 26 | $ 18 | ||||||||
Total interest income | $ 3,509 | $ 3,392 | $ 3,177 | $ 3,150 | $ 3,260 | $ 3,123 | $ 2,926 | $ 2,933 | 13,228 | 12,242 | 11,313 |
Interest on third-party debt | 309 | 124 | 0 | ||||||||
Interest on related party debt | 4 | 113 | 157 | ||||||||
Total interest expense | 301 | 289 | 270 | 275 | 282 | 244 | 206 | 190 | 1,135 | 922 | 742 |
Net interest income | 3,208 | 3,103 | 2,907 | 2,875 | 2,978 | 2,879 | 2,720 | 2,743 | 12,093 | 11,320 | 10,571 |
Other income | 57 | 102 | 65 | ||||||||
Earnings before benefit from income taxes | 868 | 919 | 861 | 883 | 853 | 879 | 764 | 890 | 3,531 | 3,386 | 3,142 |
Benefit from income taxes | (321) | (345) | (320) | (331) | (322) | (331) | (292) | (332) | (1,317) | (1,277) | (1,163) |
Net earnings | $ 547 | $ 574 | $ 541 | $ 552 | $ 531 | $ 548 | $ 472 | $ 558 | 2,214 | 2,109 | 1,979 |
Comprehensive income | 2,183 | 2,112 | 1,964 | ||||||||
Parent Company | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Interest income from subsidiaries | 52 | 85 | 143 | ||||||||
Interest on investment securities | 7 | 1 | 0 | ||||||||
Total interest income | 59 | 86 | 143 | ||||||||
Interest on third-party debt | 309 | 124 | 0 | ||||||||
Interest on related party debt | 4 | 109 | 143 | ||||||||
Total interest expense | 313 | 233 | 143 | ||||||||
Net interest income | (254) | (147) | 0 | ||||||||
Dividends from bank subsidiaries | 708 | 885 | 1,400 | ||||||||
Dividends from nonbank subsidiaries | 0 | 1,206 | 2,500 | ||||||||
Other income | 45 | 6 | 0 | ||||||||
Other expense | 74 | 417 | 26 | ||||||||
Earnings before benefit from income taxes | 425 | 1,533 | 3,874 | ||||||||
Benefit from income taxes | 95 | 215 | 7 | ||||||||
Equity in undistributed net earnings of subsidiaries | 1,694 | 361 | (1,902) | ||||||||
Net earnings | 2,214 | 2,109 | 1,979 | ||||||||
Comprehensive income | $ 2,183 | $ 2,112 | $ 1,964 |
Parent Company Financial Info86
Parent Company Financial Information- Condensed Statements of Financial Position (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Assets | ||||||
Cash and equivalents | $ 12,325 | $ 11,828 | $ 2,319 | $ 1,334 | ||
Investment securities | 3,142 | 1,598 | ||||
Goodwill | 949 | 949 | 949 | |||
Other assets | [1] | 2,225 | 2,431 | |||
Total assets | 84,135 | 75,707 | ||||
Liabilities and Equity | ||||||
Unsecured debt | 4,151 | 8,245 | ||||
Related party debt | 0 | 655 | [2] | |||
Accrued expenses and other liabilities | 3,740 | 2,814 | ||||
Total liabilities | 71,531 | 65,229 | ||||
Equity: | ||||||
Total equity | 12,604 | 10,478 | 5,960 | 4,582 | ||
Total liabilities and equity | 84,135 | 75,707 | ||||
Senior Notes | ||||||
Liabilities and Equity | ||||||
Unsecured debt | [2] | 6,590 | 3,593 | |||
Bank term loan | ||||||
Liabilities and Equity | ||||||
Unsecured debt | [2] | 4,151 | 8,245 | |||
Parent Company | ||||||
Assets | ||||||
Cash and equivalents | 5,301 | 5,643 | $ 0 | $ 0 | ||
Investment securities | 2,014 | 1,255 | ||||
Investments in amounts due from subsidiaries | [3] | 16,329 | 16,723 | |||
Goodwill | 17 | 17 | ||||
Other assets | 334 | 148 | ||||
Total assets | 23,995 | 23,786 | ||||
Liabilities and Equity | ||||||
Amounts due to subsidiaries | 211 | 296 | ||||
Related party debt | 0 | 655 | ||||
Accrued expenses and other liabilities | 439 | 519 | ||||
Total liabilities | 11,391 | 13,308 | ||||
Equity: | ||||||
Total equity | 12,604 | 10,478 | ||||
Total liabilities and equity | 23,995 | 23,786 | ||||
Parent Company | Senior Notes | ||||||
Liabilities and Equity | ||||||
Unsecured debt | 6,590 | 3,593 | ||||
Parent Company | Bank term loan | ||||||
Liabilities and Equity | ||||||
Bank term loan | $ 4,151 | $ 8,245 | ||||
[1] | Other assets include restricted cash and equivalents of $391 million and $1,104 million at December 31, 2015 and 2014, respectively. | |||||
[2] | The amounts presented for outstanding borrowings include unamortized debt premiums and discounts. | |||||
[3] | Includes investments in and amounts due from bank subsidiaries of $9.4 billion and $8.5 billion at December 31, 2015 and 2014, respectively. |
Parent Company Financial Info87
Parent Company Financial Information- Condensed Statements of Financial Position- Additional Information (Details) - USD ($) $ in Billions | Dec. 31, 2015 | Dec. 31, 2014 |
Parent Company | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Investment in amounts due from bank subsidiaries | $ 9.4 | $ 8.5 |
Parent Company Financial Info88
Parent Company Financial Information- Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions | Aug. 05, 2014 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows - operating activities | ||||||||||||
Net earnings | $ 547 | $ 574 | $ 541 | $ 552 | $ 531 | $ 548 | $ 472 | $ 558 | $ 2,214 | $ 2,109 | $ 1,979 | |
Adjustments to reconcile net earnings to cash provided from operating activities | ||||||||||||
Deferred income taxes | (295) | (203) | (237) | |||||||||
(Increase) decrease in other assets | 70 | 196 | 40 | |||||||||
Increase (decrease) in accrued expenses and other liabilities | 803 | (172) | 810 | |||||||||
All other operating activities | 429 | 294 | 63 | |||||||||
Cash flows - investing activities | ||||||||||||
Purchases of investment securities | (5,102) | (1,376) | (100) | |||||||||
All other investing activities | (441) | (446) | (107) | |||||||||
Cash flows - financing activities | ||||||||||||
Proceeds from issuance of third-party debt | 2,995 | 12,343 | 0 | |||||||||
Maturities and repayment of third-party debt | (4,094) | (505) | 0 | |||||||||
Proceeds from borrowings of related party debt | 0 | 1,615 | 0 | |||||||||
Maturities and repayment of related party debt | (655) | (10,015) | (1,649) | |||||||||
Proceeds from initial public offering | $ 2,800 | 0 | 2,842 | 0 | ||||||||
All other financing activites | (40) | (135) | (32) | |||||||||
Increase in cash and equivalents | 497 | 9,509 | 985 | |||||||||
Cash and equivalents at beginning of year | 11,828 | 2,319 | 11,828 | 2,319 | 1,334 | |||||||
Cash and equivalents at end of year | 12,325 | 11,828 | 12,325 | 11,828 | 2,319 | |||||||
Parent Company | ||||||||||||
Cash flows - operating activities | ||||||||||||
Net earnings | 2,214 | 2,109 | 1,979 | |||||||||
Adjustments to reconcile net earnings to cash provided from operating activities | ||||||||||||
Deferred income taxes | 19 | (36) | 0 | |||||||||
(Increase) decrease in other assets | (133) | 47 | (8) | |||||||||
Increase (decrease) in accrued expenses and other liabilities | (257) | 489 | 13 | |||||||||
Equity in undistributed net earnings of subsidiaries | (1,694) | (361) | 1,902 | |||||||||
All other operating activities | 181 | (223) | 0 | |||||||||
Cash from operating activities | 330 | 2,025 | 3,886 | |||||||||
Cash flows - investing activities | ||||||||||||
Net (increase) decrease in investments in and amounts due from subsidiaries | 1,928 | (1,030) | (1,848) | |||||||||
Maturity and redemption of investment securities | 3,480 | 0 | 0 | |||||||||
Purchases of investment securities | (4,246) | (1,256) | 0 | |||||||||
All other investing activities | (6) | (2) | 0 | |||||||||
Cash (used for) from investing activities | 1,156 | (2,288) | (1,848) | |||||||||
Cash flows - financing activities | ||||||||||||
Proceeds from issuance of third-party debt | 2,995 | 12,343 | 0 | |||||||||
Maturities and repayment of third-party debt | (4,094) | (505) | 0 | |||||||||
Proceeds from borrowings of related party debt | 0 | 1,615 | 0 | |||||||||
Maturities and repayment of related party debt | (655) | (9,820) | (1,452) | |||||||||
Proceeds from initial public offering | 0 | 2,842 | 0 | |||||||||
Net transfers to Parent | 0 | (603) | (586) | |||||||||
Increase (decrease) in amounts due to subsidiaries | (56) | 98 | 0 | |||||||||
All other financing activites | (18) | (64) | 0 | |||||||||
Cash (used for) from financing activities | (1,828) | 5,906 | (2,038) | |||||||||
Increase in cash and equivalents | (342) | 5,643 | 0 | |||||||||
Cash and equivalents at beginning of year | $ 5,643 | $ 0 | 5,643 | 0 | 0 | |||||||
Cash and equivalents at end of year | $ 5,301 | $ 5,643 | $ 5,301 | $ 5,643 | $ 0 |
Legal Proceedings and Regulat89
Legal Proceedings and Regulatory Matters (Details) | Jun. 19, 2014USD ($) | Jan. 17, 2014USD ($) | Dec. 31, 2015putative_class_action | Jun. 30, 2015USD ($) | Dec. 10, 2013USD ($) |
Loss Contingencies [Line Items] | |||||
Number of putative class actions | putative_class_action | 3 | ||||
Number of putative class actions resolved | putative_class_action | 5 | ||||
CareCredit CFPB Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Maximum amount of settlement | $ 34,100,000 | ||||
CareCredit CFPB Consent Order | Customer refund | |||||
Loss Contingencies [Line Items] | |||||
Amount of settlement | $ 56,000,000 | ||||
2014 CFPB Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Payment of Civil Money Penalties | 3,500,000 | ||||
Remediation amount refunded prior to settlement | $ 11,000,000 | ||||
2014 CFPB and DOJ Consent Order | |||||
Loss Contingencies [Line Items] | |||||
Amount of settlement that consists of balance credits and waivers to previously charged-off account | $ 185,000,000 | ||||
Other Credits or Payments | 15,000,000 | ||||
Remediation amount refunded prior to settlement | $ 132,000,000 | ||||
Travaglio et al. v. GE Capital Retail Bank and Allied Interstate LLC | |||||
Loss Contingencies [Line Items] | |||||
Damages sought per violation | $ 1,500 |
Selected Quarterly Financial 90
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 3,509 | $ 3,392 | $ 3,177 | $ 3,150 | $ 3,260 | $ 3,123 | $ 2,926 | $ 2,933 | $ 13,228 | $ 12,242 | $ 11,313 |
Interest expense | 301 | 289 | 270 | 275 | 282 | 244 | 206 | 190 | 1,135 | 922 | 742 |
Net interest income | 3,208 | 3,103 | 2,907 | 2,875 | 2,978 | 2,879 | 2,720 | 2,743 | 12,093 | 11,320 | 10,571 |
Earnings before benefit from income taxes | 868 | 919 | 861 | 883 | 853 | 879 | 764 | 890 | 3,531 | 3,386 | 3,142 |
Provision for income taxes | 321 | 345 | 320 | 331 | 322 | 331 | 292 | 332 | 1,317 | 1,277 | 1,163 |
Net earnings | $ 547 | $ 574 | $ 541 | $ 552 | $ 531 | $ 548 | $ 472 | $ 558 | $ 2,214 | $ 2,109 | $ 1,979 |
Earnings per share | |||||||||||
Basic (in usd per share) | $ 0.66 | $ 0.69 | $ 0.65 | $ 0.66 | $ 0.64 | $ 0.70 | $ 0.67 | $ 0.79 | $ 2.66 | $ 2.78 | $ 2.81 |
Diluted (in usd per share) | $ 0.65 | $ 0.69 | $ 0.65 | $ 0.66 | $ 0.64 | $ 0.70 | $ 0.67 | $ 0.79 | $ 2.65 | $ 2.78 | $ 2.81 |