Cover page
Cover page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 07, 2020 | Jun. 30, 2019 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36560 | ||
Entity Registrant Name | SYNCHRONY FINANCIAL | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 51-0483352 | ||
Entity Address, Address Line One | 777 Long Ridge Road | ||
Entity Address, City or Town | Stamford, | ||
Entity Address, State or Province | CT | ||
Entity Address, Postal Zip Code | 06902 | ||
City Area Code | 203 | ||
Local Phone Number | 585-2400 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 23,206,326,259 | ||
Entity Common Stock, Shares Outstanding | 613,476,835 | ||
Documents Incorporated by Reference | The definitive proxy statement relating to the registrant’s Annual Meeting of Stockholders, to be held May 21, 2020, is incorporated by reference into Part III to the extent described therein. | ||
Entity Central Index Key | 0001601712 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Common Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Common stock, par value $0.001 per share | ||
Trading Symbol | SYF | ||
Security Exchange Name | NYSE | ||
Series A Preferred Stock | |||
Entity Information [Line Items] | |||
Title of 12(b) Security | Depositary Shares Each Representing a 1/40th Interest in a Share of 5.625% Fixed Rate Non-Cumulative Perpetual Preferred Stock, Series A | ||
Trading Symbol | SYFPrA | ||
Security Exchange Name | NYSE |
Consolidated Statements of Earn
Consolidated Statements of Earnings - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest income: | |||
Interest and fees on loans (Note 4) | $ 18,705 | $ 17,644 | $ 16,219 |
Interest and Dividend Income, Cash and Securities, Operating | 385 | 344 | 188 |
Total interest income | 19,090 | 17,988 | 16,407 |
Interest expense: | |||
Interest on deposits | 1,566 | 1,186 | 848 |
Interest on senior unsecured notes | 367 | 340 | 280 |
Total interest expense | 2,291 | 1,870 | 1,391 |
Net interest income | 16,799 | 16,118 | 15,016 |
Retailer share arrangements | (3,858) | (3,099) | (2,937) |
Provision for loan losses (Note 4) | 4,180 | 5,545 | 5,296 |
Net interest income, after retailer share arrangements and provision for loan losses | 8,761 | 7,474 | 6,783 |
Other income: | |||
Interchange revenue | 748 | 710 | 653 |
Debt cancellation fees | 265 | 267 | 272 |
Loyalty programs | (743) | (751) | (704) |
Other | 101 | 39 | 67 |
Total other income | 371 | 265 | 288 |
Other expense: | |||
Employee costs | 1,455 | 1,427 | 1,304 |
Professional fees | 867 | 806 | 629 |
Marketing and business development | 549 | 528 | 498 |
Information processing | 485 | 426 | 373 |
Other | 889 | 908 | 943 |
Total other expense | 4,245 | 4,095 | 3,747 |
Earnings before benefit from income taxes | 4,887 | 3,644 | 3,324 |
Provision for income taxes (Note 14) | 1,140 | 854 | 1,389 |
Net earnings | 3,747 | 2,790 | 1,935 |
Net earnings available to common stockholders | $ 3,747 | $ 2,790 | $ 1,935 |
Earnings per share | |||
Basic (in usd per share) | $ 5.59 | $ 3.76 | $ 2.43 |
Diluted (in usd per share) | $ 5.56 | $ 3.74 | $ 2.42 |
Variable Interest Entity, Primary Beneficiary | |||
Interest income: | |||
Interest and fees on loans (Note 4) | $ 5,200 | $ 5,000 | $ 4,200 |
Interest expense: | |||
Interest on borrowings of consolidated securitization entities | 358 | 344 | 263 |
Provision for loan losses (Note 4) | $ 1,100 | $ 1,500 | $ 1,300 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net earnings | $ 3,747 | $ 2,790 | $ 1,935 |
Other comprehensive income (loss) | |||
Debt securities | 36 | (13) | (1) |
Currency translation adjustments | 4 | (8) | 3 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Tax and Reclassification Adjustment, Attributable to Parent | (23) | 23 | (13) |
Other comprehensive income (loss) | 17 | 2 | (11) |
Comprehensive income | $ 3,764 | $ 2,792 | $ 1,924 |
Consolidated Statements of Fina
Consolidated Statements of Financial Position - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Assets | |||
Cash and equivalents | $ 12,147 | $ 9,396 | |
Debt securities (Note 3) | 5,911 | 6,062 | |
Loan receivables: (Notes 4 and 5) | [1],[2] | 87,215 | 93,139 |
Less: Allowance for loan losses | (5,602) | (6,427) | |
Loan receivables, net | 81,613 | 86,712 | |
Loan receivables held for sale (Note 4) | 725 | 0 | |
Goodwill (Note 6) | 1,078 | 1,024 | |
Intangible assets, net (Note 6) | 1,265 | 1,137 | |
Other assets | 2,087 | 2,461 | |
Total assets | 104,826 | 106,792 | |
Deposits: (Note 7) | |||
Interest-bearing deposit accounts | 64,877 | 63,738 | |
Non-interest-bearing deposit accounts | 277 | 281 | |
Total deposits | 65,154 | 64,019 | |
Borrowings: (Notes 5 and 8) | |||
Senior unsecured notes | 9,454 | 9,557 | |
Total borrowings | 19,866 | 23,996 | |
Accrued expenses and other liabilities | 4,718 | 4,099 | |
Total liabilities | 89,738 | 92,114 | |
Equity: | |||
Preferred stock, par share value $0.001 per share; 750,000 shares authorized; 750,000 shares issued and outstanding at December 31, 2019 and aggregate liquidation preference of $750 at December 31, 2019 | [3] | 734 | 0 |
Common stock, par share value $0.001 per share; 4,000,000,000 shares authorized; 833,984,684 shares issued at both December 31, 2019 and 2018; 615,925,168 and 718,758,598 shares outstanding at December 31, 2019 and 2018, respectively | 1 | 1 | |
Additional paid-in capital | 9,537 | 9,482 | |
Retained earnings | 12,117 | 8,986 | |
Accumulated other comprehensive income (loss): | |||
Debt securities | (1) | (32) | |
Currency translation adjustments | (24) | (25) | |
Employee benefit plans | (33) | (5) | |
Treasury stock, at cost; 218,059,516 and 115,226,086 shares at December 31, 2019 and 2018, respectively | (7,243) | (3,729) | |
Total equity | 15,088 | 14,678 | |
Total liabilities and equity | 104,826 | 106,792 | |
Restricted loans of consolidated securitization entities | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | 28,817 | 28,170 | |
Less: Allowance for loan losses | (1,600) | (1,700) | |
Loan receivables, net | [4] | 27,217 | 26,454 |
Other assets | [5] | 68 | 813 |
Total assets | 27,285 | 27,267 | |
Borrowings: (Notes 5 and 8) | |||
Borrowings of consolidated securitization entities | [6] | 10,412 | 14,439 |
Total liabilities | 10,444 | 14,475 | |
Unsecuritized Loans Held for Investment | |||
Assets | |||
Loan receivables: (Notes 4 and 5) | $ 58,398 | $ 64,969 | |
[1] | At December 31, 2019 and 2018 , loan receivables included deferred costs, net of deferred income, of $140 million and $105 million , respectively. | ||
[2] | Total loan receivables include $28.8 billion and $28.2 billion of restricted loans of consolidated securitization entities at December 31, 2019 and 2018 , respectively. See Note 5. Variable Interest Entities | ||
[3] | Issued as depositary shares, each representing a 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 at a fixed rate, in each case when, as and if declared by the Board of Directors. | ||
[4] | Includes $1.6 billion and $1.7 billion of related allowance for loan losses resulting in gross restricted loans of $28.8 billion and $28.2 billion at December 31, 2019 and 2018 , respectively. | ||
[5] | Includes $62 million and $803 million of segregated funds held by the VIEs at December 31, 2019 and 2018 | ||
[6] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Position Statement (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 750,000 | |
Preferred Stock, Shares Issued | 750,000 | |
Preferred Stock, Shares Outstanding | 750,000 | |
Preferred Stock, Liquidation Preference, Value | $ 750 | |
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 | 833,984,684 | 833,984,684 |
Common stock shares outstanding | 615,925,168 | 718,758,598 |
Treasury Stock, Shares | 218,059,516 | 115,226,086 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock |
Preferred Stock, Shares Issued | 0 | ||||||
Common Stock, Shares, Issued | 833,985,000 | ||||||
Common Stock, Dividends, Per Share, Declared | $ 0.56 | ||||||
Balance at Dec. 31, 2016 | $ 14,196 | $ 0 | $ 1 | $ 9,393 | $ 5,330 | $ (53) | $ (475) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 1,935 | 1,935 | |||||
Other comprehensive income | (11) | (11) | |||||
Purchases of treasury stock | (1,497) | (1,497) | |||||
Stock-based compensation (in shares) | 0 | ||||||
Stock-based compensation, adjustments to additional paid in capital | 57 | 52 | |||||
Treasury Stock Reissued at Lower than Repurchase Price | (10) | ||||||
Treasury Stock Reissued During Period, Value | 15 | ||||||
Dividends - common stock ($0.86 per share) | (446) | (446) | |||||
Balance at Dec. 31, 2017 | $ 14,234 | $ 0 | $ 1 | 9,445 | 6,809 | (64) | (1,957) |
Preferred Stock, Shares Issued | 0 | ||||||
Common Stock, Shares, Issued | 833,985,000 | ||||||
Common Stock, Dividends, Per Share, Declared | $ 0.72 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 2,790 | 2,790 | |||||
Other comprehensive income | 2 | 2 | |||||
Purchases of treasury stock | (1,868) | (1,868) | |||||
Stock-based compensation (in shares) | 0 | ||||||
Stock-based compensation, adjustments to additional paid in capital | 51 | 37 | |||||
Treasury Stock Reissued at Lower than Repurchase Price | (82) | ||||||
Treasury Stock Reissued During Period, Value | 96 | ||||||
Dividends - common stock ($0.86 per share) | (534) | (534) | |||||
Stockholders' Equity, Other | 3 | 3 | |||||
Balance at Dec. 31, 2018 | $ 14,678 | $ 0 | $ 1 | 9,482 | 8,986 | (62) | (3,729) |
Preferred Stock, Shares Issued | 0 | ||||||
Common Stock, Shares, Issued | 833,984,684 | 833,985,000 | |||||
Common Stock, Dividends, Per Share, Declared | $ 0.86 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 3,747 | 3,747 | |||||
Other comprehensive income | 17 | 17 | |||||
Stock Issued During Period, Shares, New Issues | 750,000 | ||||||
Stock Issued During Period, Value, New Issues | 734 | $ 734 | 0 | ||||
Purchases of treasury stock | (3,618) | (3,618) | |||||
Stock-based compensation (in shares) | 0 | ||||||
Stock-based compensation, adjustments to additional paid in capital | 111 | 55 | |||||
Treasury Stock Reissued at Lower than Repurchase Price | (48) | ||||||
Treasury Stock Reissued During Period, Value | 104 | ||||||
Dividends - common stock ($0.86 per share) | (581) | (581) | |||||
Stockholders' Equity, Other | 0 | 13 | (13) | ||||
Balance at Dec. 31, 2019 | $ 15,088 | $ 734 | $ 1 | $ 9,537 | $ 12,117 | $ (58) | $ (7,243) |
Preferred Stock, Shares Issued | 750,000 | 750,000 | |||||
Common Stock, Shares, Issued | 833,984,684 | 833,985,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Cash flows - operating activities | |||
Net earnings | $ 3,747 | $ 2,790 | $ 1,935 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||
Provision for loan losses | 4,180 | 5,545 | 5,296 |
Deferred income taxes | 23 | (53) | 385 |
Depreciation and amortization | 367 | 302 | 254 |
(Increase) decrease in interest and fees receivable | (391) | (280) | (298) |
(Increase) decrease in other assets | 93 | 81 | 144 |
Increase (decrease) in accrued expenses and other liabilities | 363 | 356 | 210 |
All other operating activities | 608 | 601 | 649 |
Cash provided from (used for) operating activities | 8,990 | 9,342 | 8,575 |
Cash flows - investing activities | |||
Maturity and sales of debt securities | 8,085 | 5,668 | 3,762 |
Purchases of debt securities | (7,856) | (7,271) | (3,159) |
Acquisition of loan receivables | (72) | (8,183) | (433) |
Proceeds from Sale of Loans Receivable | 8,203 | 0 | 0 |
Net (increase) decrease in loan receivables, including held for sale | (8,033) | (8,448) | (9,238) |
All other investing activities | (588) | (802) | (474) |
Cash provided from (used for) investing activities | (261) | (19,036) | (9,542) |
Borrowings of consolidated securitization entities | |||
Proceeds from issuance of securitized debt | 3,345 | 5,093 | 4,311 |
Maturities and repayment of securitized debt | (7,377) | (3,157) | (4,210) |
Senior unsecured notes | |||
Proceeds from issuance of senior unsecured notes | 1,985 | 1,244 | 1,732 |
Maturities and repayment of senior unsecured notes | (2,100) | 0 | (1,200) |
Proceeds from Issuance of Preferred Stock and Preference Stock | 734 | 0 | 0 |
Net increase (decrease) in deposits | 1,117 | 7,509 | 4,431 |
Purchases of treasury stock | (3,618) | (1,868) | (1,497) |
Dividends paid on common stock | (581) | (534) | (446) |
All other financing activities | 37 | (34) | (5) |
Cash provided from (used for) financing activities | (6,458) | 8,253 | 3,116 |
Increase (decrease) in cash and equivalents, including restricted amounts | 2,271 | (1,441) | 2,149 |
Cash and equivalents, including restricted amounts, at beginning of year | 10,376 | 11,817 | 9,668 |
Cash and equivalents | 12,147 | 9,396 | 11,602 |
Restricted cash and equivalents included in other assets | 500 | 980 | 215 |
Total cash and equivalents, including restricted amounts, at end of year | 12,647 | 10,376 | 11,817 |
Cash and equivalents | |||
Cash paid during the year for interest | (2,272) | (1,815) | (1,350) |
Cash paid during the year for income taxes | $ (1,017) | $ (772) | $ (754) |
Business Description
Business Description | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description | BUSINESS DESCRIPTION Synchrony Financial (the “Company”) provides a range of credit products through financing programs it has established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers. We primarily offer private label, Dual Card and general purpose co-branded credit cards, promotional financing and installment lending, and FDIC-insured savings products through 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. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
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 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 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 debt 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 primarily 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 period-end exchange rates, while revenues and expenses are translated at average rates for the respective periods. Consolidated Basis of Presentation The Company’s financial statements have been prepared on a consolidated basis. 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. 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 . New Accounting Standards Newly Adopted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU requires lessees to recognize most leases on their balance sheet. Leases which were identified as capital leases are now identified as financing leases under the new guidance but otherwise their accounting treatment remains relatively unchanged. Leases previously identified as operating leases remain in that category under the new standard, but both a right-of-use asset and a liability for remaining lease payments are recognized on our statement of financial position. We adopted this guidance retrospectively in the current year as of January 1, 2019, which did not have a material impact on the consolidated financial statements. Recently Issued But Not Yet Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which is effective for the Company on January 1, 2020. This ASU replaces the existing incurred loss impairment guidance with a new impairment model known as the Current Expected Credit Loss ("CECL") model, which is based on expected credit losses. This standard is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2019, with early adoption permitted for annual and interim periods for fiscal years beginning after December 15, 2018. We plan to adopt the standard on its effective date, which for us is January 1, 2020. Upon adoption, the amendments in this standard will be recognized on a modified-retrospective basis through a cumulative-effect adjustment to retained earnings. Following the adoption date, upon origination of a loan, the estimate of expected credit losses, and any subsequent changes to our estimates of total expected losses for our loan receivables, will be recorded through provision for loan losses in our Consolidated Statement of Earnings. The adoption of this standard will also require us to update our accounting policy for the allowance for loan losses. Under the CECL model, losses on loan receivables will be recognized upon origination of the loan, based on expected credit losses for the life of the loan balance. Expected credit loss estimates will involve modeling loss projections attributable to existing loan balances, considering historical experience, current conditions and future expectations for homogeneous pools of loans over the reasonable and supportable forecast period. Our approach will also consider qualitative adjustments. Subsequent to the reasonable and supportable forecast period, we will revert to mean historical loss information for the remaining life of the loan. We will periodically reassess key assumptions based on any differences in underwriting standards, portfolio mix, and other relevant data shifts. While we have determined our estimation models and methodology, and have developed our internal processes and systems, we continue to finalize our estimate of the impact of adoption, the execution of controls, and the evaluation of the impact to our financial statement disclosures. Based on our current stage of implementation, we estimate the adoption will result in an increase of approximately $3.0 billion , or 54% , to the Company’s allowance for loan losses. We also expect an increase in deferred tax assets and a decrease in the Company's regulatory capital amounts and ratios as a result of adoption. The regulatory capital effects will be phased-in over three years as permitted by the federal banking agencies . 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 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 and equivalents unless designated as available-for-sale and classified as investment securities. Cash and equivalents at December 31, 2019 primarily included cash and due from banks of $1.2 billion and interest-bearing deposits in other banks of $9.6 billion and other short-term investments of $1.3 billion . Cash and equivalents at December 31, 2018 primarily included cash and due from banks of $1.1 billion and interest-bearing deposits in other banks of $8.3 billion . 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. Changes in fair value on debt securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. Changes in fair value on equity securities are included in earnings starting in 2018. 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 debt 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 debt 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. 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, deferred income and costs. Loan Receivables Held for Sale Loans purchased or originated with the intent to sell are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. Loans initially classified as held for investment are transferred to loan receivables held for sale and recorded at the lower of amortized cost or fair value once a decision has been made to sell the loans. 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 Statements of Earnings. Acquired Loans To determine the fair value of loans at acquisition, we estimate expected cash flows and discount those cash flows using an observable market rate of interest, when available, adjusted for factors that a market participant would consider in determining fair value. In determining fair value, expected cash flows are adjusted to include prepayment, default rate, and loss severity estimates. The difference between the fair value and the amount contractually due is recorded as a loan discount or premium at acquisition. 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. 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 use long-term modification programs for borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. 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 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 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 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 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 material impairments of definite-lived intangible assets have been recognized in the periods presented in the consolidated financial statements. Revenue Recognition Interest and Fees on Loans We use the effective interest method to recognize income on loans. Interest and fees 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 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 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 an 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 purchase credit impaired loans, the excess of cash flows expected at acquisition over the initial acquisition cost is recognized into interest income over their estimated 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 subject to our allowance for loan losses methodology described above under “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. We also provide other economic benefits to our partners such as royalties on purchase volume or payments for new accounts, in some cases instead of retailer share arrangements (for example, on our co-branded credit cards). 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 statement credit or cash back rewards. Other programs include rewards points, which are redeemable for a variety of products or awards, or merchandise discounts that are earned by achieving a pre-set spending level on their private label credit card, Dual Card or general purpose co-branded credit card. 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 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 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 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. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated financial statements in the period they occur. 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. In making decisions regarding our ability to realize tax assets, we evaluate all positive and negative evidence, including projected future taxable income, taxable income in carryback periods, expected reversal of deferred tax liabilities and the implementation of available tax planning strategies. We recognize the financial statement impact of uncertain income tax positions when we conclude that it is more likely than not, based on the technical merits of a position, that the position will be sustained upon examination. In certain situations, we establish a liability that represents the difference between a tax position taken (or expected to be taken) on an income tax return and the amount of taxes recognized in our financial statements. The liability associated with the unrecognized tax benefits is adjusted periodically when new information becomes available. We recognize accrued interest and penalties related to unrecognized tax benefits as interest expense and provision for income taxes, respectively, in our Consolidated Statements of Earnings. Fair Value Measurements Fair value is the |
Debt Securities
Debt Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | DEBT SECURITIES All of our debt securities are classified as available-for-sale and are held to meet our liquidity objectives or to comply with the Community Reinvestment Act. Our debt securities consist of the following: December 31, 2019 December 31, 2018 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value U.S. government and federal agency $ 2,468 $ 1 $ — $ 2,469 $ 2,889 $ — $ (1 ) $ 2,888 State and municipal 46 1 (2 ) 45 50 — (2 ) 48 Residential mortgage-backed (a) 1,029 6 (9 ) 1,026 1,180 1 (42 ) 1,139 Asset-backed (b) 2,368 3 — 2,371 1,988 — (3 ) 1,985 U.S. corporate debt — — — — 2 — — 2 Total $ 5,911 $ 11 $ (11 ) $ 5,911 $ 6,109 $ 1 $ (48 ) $ 6,062 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At December 31, 2019 and 2018 , $351 million and $313 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. (b) All of our asset-backed securities are collateralized by credit card loans. The following table presents the estimated fair values and gross unrealized losses of our available-for-sale debt securities: In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At December 31, 2019 U.S. government and federal agency $ — $ — $ — $ — State and municipal — — 24 (2 ) Residential mortgage-backed 76 — 618 (9 ) Asset-backed 202 — — — Total $ 278 $ — $ 642 $ (11 ) At December 31, 2018 U.S. government and federal agency $ 2,838 $ (1 ) $ — $ — State and municipal 23 (1 ) 8 (1 ) Residential mortgage-backed 102 — 933 (42 ) Asset-backed 1,665 (2 ) 114 (1 ) Total $ 4,628 $ (4 ) $ 1,055 $ (44 ) We regularly review debt 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 on our debt securities for the years ended December 31, 2019 , 2018 and 2017 . Contractual Maturities of Investments in Available-for-Sale Debt Securities Amortized Estimated Weighted At December 31, 2019 ($ in millions) cost fair value Average yield (a) Due Within one year $ 4,322 $ 4,325 1.9 % After one year through five years $ 515 $ 516 2.1 % After five years through ten years $ 144 $ 147 3.2 % After ten years $ 930 $ 923 2.9 % ______________________ (a) Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. 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, 2019 , 2018 and 2017 . Although we generally do not have the intent to sell any specific securities held at December 31, 2019 |
Loan Receivables and Allowance
Loan Receivables and Allowance for Loan Losses | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loan Receivables and Allowance for Loan Losses | LOAN RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES At December 31 ($ in millions) 2019 2018 Credit cards $ 84,606 $ 89,994 Consumer installment loans 1,347 1,845 Commercial credit products 1,223 1,260 Other 39 40 Total loan receivables, before allowance for losses (a)(b) $ 87,215 $ 93,139 _______________________ (a) Total loan receivables include $28.8 billion and $28.2 billion of restricted loans of consolidated securitization entities at December 31, 2019 and 2018 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At December 31, 2019 and 2018 , loan receivables included deferred costs, net of deferred income, of $140 million and $105 million , respectively. Disposition of Loan Receivables In October 2019, we completed our sale and conversion of $8.2 billion of loan receivables associated with our Retail Card program agreement with Walmart. In addition, loan receivables associated with our Payment Solutions program agreement with Yamaha are included in loan receivables held for sale in our Consolidated Statement of Financial Position at December 31, 2019. We subsequently completed the sale of this portfolio in January 2020. Allowance for Loan Losses ($ in millions) Balance at January 1, 2019 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2019 Credit cards $ 6,327 $ 4,083 $ (5,907 ) $ 1,003 $ 5,506 Consumer installment loans 44 51 (66 ) 17 46 Commercial credit products 55 45 (58 ) 7 49 Other 1 1 (1 ) — 1 Total $ 6,427 $ 4,180 $ (6,032 ) $ 1,027 $ 5,602 ($ in millions) Balance at January 1, 2018 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2018 Credit cards $ 5,483 $ 5,448 $ (5,435 ) $ 831 $ 6,327 Consumer installment loans 40 45 (56 ) 15 44 Commercial credit products 50 52 (53 ) 6 55 Other 1 — — — 1 Total $ 5,574 $ 5,545 $ (5,544 ) $ 852 $ 6,427 ($ in millions) Balance at January 1, 2017 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2017 Credit cards $ 4,254 $ 5,200 $ (4,883 ) $ 912 $ 5,483 Consumer installment loans 37 41 (52 ) 14 40 Commercial credit products 52 55 (63 ) 6 50 Other 1 — — — 1 Total $ 4,344 $ 5,296 $ (4,998 ) $ 932 $ 5,574 Delinquent and Non-accrual Loans At December 31, 2019 ($ 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 $ 1,936 $ 1,852 $ 3,788 $ 1,850 $ — Consumer installment loans 21 7 28 — 7 Commercial credit products 40 18 58 18 — Total delinquent loans $ 1,997 $ 1,877 $ 3,874 $ 1,868 $ 7 Percentage of total loan receivables 2.3 % 2.2 % 4.4 % 2.1 % — % At December 31, 2018 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 2,229 $ 2,113 $ 4,342 $ 2,099 $ — Consumer installment loans 28 5 33 — 5 Commercial credit products 38 17 55 17 — Total delinquent loans $ 2,295 $ 2,135 $ 4,430 $ 2,116 $ 5 Percentage of total loan receivables 2.5 % 2.3 % 4.8 % 2.3 % 0.1 % _______________________ (a) Excludes PCI loan receivables. 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. We use long-term modification programs for borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. 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 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) 2019 2018 Credit cards $ 849 $ 886 Consumer installment loans — — Commercial credit products 3 3 Total $ 852 $ 889 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, 2019 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,146 $ (550 ) $ 596 $ 1,019 Consumer installment loans — — — — Commercial credit products 4 (2 ) 2 4 Total $ 1,150 $ (552 ) $ 598 $ 1,023 At December 31, 2018 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,203 $ (546 ) $ 657 $ 1,086 Consumer installment loans — — — — Commercial credit products 4 (2 ) 2 4 Total $ 1,207 $ (548 ) $ 659 $ 1,090 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, 2019 2018 2017 ($ 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 $ 45 $ 268 $ 1,111 $ 49 $ 266 $ 1,112 $ 48 $ 220 $ 960 Consumer installment loans — — — — — — — — — Commercial credit products — 1 4 — 1 5 — 2 5 Total $ 45 $ 269 $ 1,115 $ 49 $ 267 $ 1,117 $ 48 $ 222 $ 965 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 from the applicable balance sheet date and experienced a payment default and charged-off during the periods presented. Years ended December 31, 2019 2018 2017 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 39,233 $ 98 38,976 $ 91 40,316 $ 90 Consumer installment loans — — — — — — Commercial credit products 114 1 76 1 110 1 Total 39,347 $ 99 39,052 $ 92 40,426 $ 91 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. Credit scores are 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, 2019 and 2018 , respectively, as a percentage of each class of loan receivable. The table below excludes 0.3% and 0.5% of our total loan receivables balance at each of December 31, 2019 and 2018 , respectively, which represents those customer accounts for which a FICO score is not available. At December 31 2019 2018 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 74 % 18 % 8 % 74 % 18 % 8 % Consumer installment loans 76 % 17 % 7 % 80 % 14 % 6 % Commercial credit products 90 % 5 % 5 % 90 % 5 % 5 % 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 $ 419 billion and $ 418 billion at December 31, 2019 and 2018 , 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, including merchant discounts, from our loan receivables, including held for sale: For the years ended December 31 ($ in millions) 2019 2018 2017 Credit cards $ 18,384 $ 17,342 $ 15,941 Consumer installment loans 182 156 137 Commercial credit products 137 144 139 Other 2 2 2 Total $ 18,705 $ 17,644 $ 16,219 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES We use VIEs to securitize loan receivables 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, 2019 and 2018 . 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 loan receivables 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 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 VIEs where 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, and 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) 2019 2018 Assets Loan receivables, net (a) $ 27,217 $ 26,454 Other assets (b) 68 813 Total $ 27,285 $ 27,267 Liabilities Borrowings $ 10,412 $ 14,439 Other liabilities 32 36 Total $ 10,444 $ 14,475 _______________________ (a) Includes $1.6 billion and $1.7 billion of related allowance for loan losses resulting in gross restricted loans of $28.8 billion and $28.2 billion at December 31, 2019 and 2018 , respectively. (b) Includes $62 million and $803 million of segregated funds held by the VIEs at December 31, 2019 and 2018 , 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 financial statements. We 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 $5.2 billion , $5.0 billion and $4.2 billion for the years ended December 31, 2019 , 2018 and 2017 , respectively. Related expenses consisted primarily of provision for loan losses of $1.1 billion , $1.5 billion and $1.3 billion for the years ended December 31, 2019 , 2018 and 2017 , respectively, and interest expense of $358 million , $344 million and $263 million for the years ended December 31, 2019 , 2018 and 2017 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill ($ in millions) 2019 2018 Balance at January 1 $ 1,024 $ 991 Acquisitions 54 33 Balance at December 31 $ 1,078 $ 1,024 Intangible Assets Subject to Amortization 2019 2018 At December 31 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,749 $ (952 ) $ 797 $ 1,630 $ (803 ) $ 827 Capitalized software and other 861 (393 ) 468 562 (252 ) 310 Total $ 2,610 $ (1,345 ) $ 1,265 $ 2,192 $ (1,055 ) $ 1,137 During the year ended December 31, 2019 , we recorded additions to intangible assets subject to amortization of $436 million , primarily related to capitalized software expenditures, as well as customer-related intangible assets. Customer-related intangible assets primarily relate to retail partner contract acquisitions and extensions, as well as purchased credit card relationships. During the years ended December 31, 2019 and 2018 , we recorded additions to customer-related intangible assets subject to amortization of $130 million and $406 million , respectively, primarily related to payments made to acquire and extend certain retail partner relationships. These additions had a weighted average amortizable life of 7 years and 9 years , respectively. Amortization expense related to retail partner contracts was $133 million , $125 million and $112 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, and is included as a component of marketing and business development expense in our Consolidated Statements of Earnings. All other amortization expense was $168 million , $115 million and $84 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, and is included as a component of other expense in our Consolidated Statements of Earnings. We estimate annual amortization expense for existing intangible assets over the next five calendar years to be as follows: ($ in millions) 2020 2021 2022 2023 2024 Amortization expense $ 290 $ 240 $ 194 $ 154 $ 119 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Deposits | DEPOSITS Deposits 2019 2018 At December 31 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 64,877 2.4 % $ 63,738 2.0 % Non-interest-bearing deposits 277 — 281 — Total deposits $ 65,154 $ 64,019 ___________________ (a) Based on interest expense for the years ended December 31, 2019 and 2018 and average deposits balances. At December 31, 2019 and 2018 , interest-bearing deposits included $8.5 billion and $7.1 billion , respectively, of certificates of deposit that exceeded applicable FDIC insurance limits, which are generally $250,000 per depositor. At December 31, 2019 , our interest-bearing time deposits maturing over the next five years and thereafter were as follows: ($ in millions) 2020 2021 2022 2023 2024 Thereafter Deposits $ 28,780 $ 5,866 $ 3,093 $ 1,346 $ 2,277 $ 356 The above maturity table excludes $19.4 billion of demand deposits with no defined maturity, of which $18.3 billion are savings accounts. In addition, at December 31, 2019 , we had $3.8 billion of broker network deposit sweeps procured through a program arranger who channels brokerage account deposits to us that are also excluded from the above maturity table. Unless extended, the contracts associated with these broker network deposit sweeps will terminate between 2021 and 2025 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Borrowings | BORROWINGS 2019 2018 At December 31 ($ in millions) Maturity date Interest Rate Weighted average interest rate Outstanding Amount (a) Outstanding Amount (a) Borrowings of consolidated securitization entities: Fixed securitized borrowings 2020 - 2023 1.93% - 3.87% 2.71 % $ 7,512 $ 8,664 Floating securitized borrowings 2020 - 2022 2.33% - 2.65% 2.48 % 2,900 5,775 Total borrowings of consolidated securitization entities 2.64 % 10,412 14,439 Senior unsecured notes: Synchrony Financial senior unsecured notes: Fixed senior unsecured notes 2020 - 2029 2.70% - 5.15% 3.94 % 7,211 7,318 Floating senior unsecured notes 2020 3.13 % 3.13 % 250 250 Synchrony Bank senior unsecured notes: Fixed senior unsecured notes 2021 - 2022 3.00% - 3.65% 3.33 % 1,493 1,490 Floating senior unsecured notes 2020 2.59 % 2.59 % 500 499 Total senior unsecured notes 3.75 % 9,454 9,557 Total borrowings $ 19,866 $ 23,996 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. Debt Maturities The following table summarizes the maturities of the principal amount of our borrowings of consolidated securitization entities and senior unsecured notes over the next five years and thereafter: ($ in millions) 2020 2021 2022 2023 2024 Thereafter Borrowings $ 4,208 $ 5,659 $ 4,350 $ 708 $ 1,850 $ 3,150 Senior Unsecured Notes 2019 Issuances ($ in millions) : Synchrony Financial Issuance Date Principal Amount Maturity Interest Rate March 2019 $ 600 2024 4.375 % March 2019 $ 650 2029 5.150 % July 2019 $ 750 2022 2.850 % Credit Facilities As additional sources of liquidity, we have undrawn committed capacity under certain credit facilities, primarily related to our securitization programs. At December 31, 2019 , we had an aggregate of $5.6 billion of undrawn committed capacity under our securitization financings, subject to customary borrowing conditions, from private lenders under our securitization programs, and an aggregate of $0.5 billion of undrawn committed capacity under our unsecured revolving credit facility with private lenders. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS For a description of how we estimate fair value, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies . The following tables present our assets and liabilities measured at fair value on a recurring basis. Recurring Fair Value Measurements At December 31, 2019 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ — $ 2,469 $ — $ 2,469 State and municipal — — 45 45 Residential mortgage-backed — 1,026 — 1,026 Asset-backed — 2,371 — 2,371 Other assets (b) 15 — 21 36 Total $ 15 $ 5,866 $ 66 $ 5,947 Liabilities Contingent consideration — — 13 13 Total $ — $ — $ 13 $ 13 At December 31, 2018 ($ in millions) Assets Debt securities U.S. government and federal agency $ — $ 2,888 $ — $ 2,888 State and municipal — — 48 48 Residential mortgage-backed — 1,139 — 1,139 Asset-backed — 1,985 — 1,985 U.S. corporate debt — — 2 2 Other assets (b) 15 — 13 28 Total $ 15 $ 6,012 $ 63 $ 6,090 Liabilities Contingent consideration — — 26 26 Total $ — $ — $ 26 $ 26 _______________________ (a) For the years ended December 31, 2019 and 2018 , there were no securities transferred between levels. (b) Other assets primarily relate to equity investments measured at fair value. Level 3 Fair Value Measurements Our Level 3 recurring fair value measurements primarily relate to state and municipal debt instruments, which are valued using non-binding broker quotes or other third-party sources, CRA investments, which are valued using net asset values, as well as contingent consideration obligations. The fair value of our contingent consideration obligations was estimated by applying the income approach based upon significant Level 3 inputs not observable in the market. The range of potential future payments of contingent consideration at December 31, 2019 was between zero and $129 million . The higher end of this range would be payable in the event the future revenues of certain acquired businesses meet all of the required targets during the respective earnout term. For a description of our process to evaluate third-party pricing servicers, see Note 2. Basis of Presentation and Summary of Significant Accounting Policies . Our state and municipal debt securities are classified as available-for-sale with changes in fair value included in accumulated other comprehensive income. The changes in our Level 3 assets and liabilities that are measured on a recurring basis for the years ended December 31, 2019 and 2018 were not material. Financial Assets and Financial Liabilities Carried at Other than Fair Value Carrying Corresponding fair value amount At December 31, 2019 ($ 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) $ 12,147 $ 12,147 $ 10,799 $ 1,348 $ — Other assets (a)(b) $ 500 $ 500 $ 500 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 81,613 $ 90,941 $ — $ — $ 90,941 Loan receivables held for sale (c) $ 725 $ 726 $ — $ — $ 726 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 65,154 $ 65,544 $ — $ 65,544 $ — Borrowings of consolidated securitization entities $ 10,412 $ 10,513 $ — $ 7,613 $ 2,900 Senior unsecured notes $ 9,454 $ 9,924 $ — $ 9,924 $ — Carrying Corresponding fair value amount At December 31, 2018 ($ 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) $ 9,396 $ 9,396 $ 9,396 $ — $ — Other assets (a)(b) $ 980 $ 980 $ 980 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 86,712 $ 95,305 $ — $ — $ 95,305 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 64,019 $ 63,942 $ — $ 63,942 $ — Borrowings of consolidated securitization entities $ 14,439 $ 14,400 $ — $ 8,626 $ 5,774 Senior unsecured notes $ 9,557 $ 9,062 $ — $ 9,062 $ — _______________________ (a) For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) |
Regulatory and Capital Adequacy
Regulatory and Capital Adequacy | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Regulatory and Capital Adequacy | REGULATORY AND CAPITAL ADEQUACY As a savings and loan holding company and a financial holding company, we are subject to regulation, supervision and examination by the Federal Reserve Board and subject to the capital requirements as prescribed by Basel III capital rules and the requirements of the Dodd-Frank Act. The Bank is a federally chartered savings association. As such, the Bank is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency of the U.S. Treasury (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. 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 table below) 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, the 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. At December 31, 2019 and 2018 , Synchrony Financial met all applicable requirements to be deemed well-capitalized pursuant to Federal Reserve Board regulations. At December 31, 2019 and 2018 , 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. There are no conditions or events subsequent to December 31, 2019 that management believes have changed the Company’s or the 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, 2019 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,211 16.3 % $ 6,984 8.0 % Tier 1 risk-based capital $ 13,064 15.0 % $ 5,238 6.0 % Tier 1 leverage $ 13,064 12.6 % $ 4,161 4.0 % Common equity Tier 1 capital $ 12,330 14.1 % $ 3,929 4.5 % At December 31, 2018 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,013 15.3 % $ 7,339 8.0 % Tier 1 risk-based capital $ 12,801 14.0 % $ 5,505 6.0 % Tier 1 leverage $ 12,801 12.3 % $ 4,157 4.0 % Common equity Tier 1 capital $ 12,801 14.0 % $ 4,128 4.5 % Synchrony Bank At December 31, 2019 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 11,911 15.6 % $ 6,094 8.0 % $ 7,618 10.0 % Tier 1 risk-based capital $ 10,907 14.3 % $ 4,571 6.0 % $ 6,094 8.0 % Tier 1 leverage $ 10,907 11.9 % $ 3,671 4.0 % $ 4,589 5.0 % Common equity Tier 1 capital $ 10,907 14.3 % $ 3,428 4.5 % $ 4,952 6.5 % At December 31, 2018 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 12,258 15.4 % $ 6,348 8.0 % $ 7,934 10.0 % Tier 1 risk-based capital $ 11,207 14.1 % $ 4,761 6.0 % $ 6,348 8.0 % Tier 1 leverage $ 11,207 12.4 % $ 3,612 4.0 % $ 4,515 5.0 % Common equity Tier 1 capital $ 11,207 14.1 % $ 3,570 4.5 % $ 5,157 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules. (b) At December 31, 2019 and 2018, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points and 1.875 percentage points, respectively, to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS 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 the time of Synchrony's separation from GE in November 2015 (the “Separation”). The expenses incurred associated with this plan were $69 million , $74 million and $76 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. 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 expenses incurred associated with these benefits were $119 million , $117 million and $103 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. 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 $210 million and $176 million at December 31, 2019 and 2018 , respectively, and is included in other liabilities in our Consolidated Statement of Financial Position. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per common 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 common share reflects the assumed conversion of all dilutive securities. The following table presents the calculation of basic and diluted earnings per common share: Years ended December 31, (in millions, except per share data) 2019 2018 2017 Net earnings available to common stockholders $ 3,747 $ 2,790 $ 1,935 Weighted average common shares outstanding, basic 670.2 742.3 795.6 Effect of dilutive securities 3.3 4.6 4.1 Weighted average common shares outstanding, dilutive 673.5 746.9 799.7 Earnings per basic common share $ 5.59 $ 3.76 $ 2.43 Earnings per diluted common share $ 5.56 $ 3.74 $ 2.42 We have issued certain stock-based awards under the Synchrony Financial 2014 Long-Term Incentive Plan. A total of 3 million , 4 million and 3 million shares for the years ended December 31, 2019 , 2018 and 2017 |
Equity and Other Stock Related
Equity and Other Stock Related Information | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Equity and Other Stock Related Information | EQUITY AND OTHER STOCK RELATED INFORMATION Preferred Stock The following table summarizes the Company's preferred stock issued and outstanding as of December 31, 2019 and 2018. Series Issuance Date Redeemable by Issuer Beginning Per Annum Dividend Rate Liquidation Preference per Share Total Shares Outstanding December 31, 2019 December 31, 2018 ($ in millions, except per share data) Series A (a) November 14, 2019 November 15, 2024 5.625% $1,000 750,000 $ 734 $ — $ 734 $ — _______________________ (a) Issued as depositary shares, each representing a 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 at a fixed rate, in each case when, as and if declared by the Board of Directors. Dividends and Share Repurchases During the year ended December 31, 2019 , 2018 and 2017 , we declared and paid cash dividends of $0.86 , $0.72 and $0.56 per share of common stock, or $581 million , $534 million and $446 million , respectively. In the fourth quarter of 2019, we issued depositary shares representing $750 million of non-cumulative perpetual preferred stock, with dividends payable quarterly beginning in February 2020. In 2019, we completed our 2018 share repurchase program and on May 9, 2019, the Board of Directors approved a share repurchase program of up to $4.0 billion of our outstanding shares of common stock through June 30, 2020. During the year ended December 31, 2019 , the Company repurchased an aggregate of 106.0 million shares of our common stock for $3.6 billion under both programs. We made and expect to continue to make share repurchases subject to market conditions and other factors, including legal and regulatory restrictions and required approvals. 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, 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 43.6 million shares of our common stock (including authorized and unissued shares) are available for granting awards under the Incentive Plan. Our annual grants of RSUs and stock options generally vest over 3 to 5 year terms on either an annual pro rata proportional basis, starting with the first anniversary of the award date, or at the end of the term of the award on a cliff basis, 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, 2019 , there were 5.1 million RSUs unvested and 7.1 million stock options issued and outstanding and $99 million of total unrecognized compensation cost related to these awards, which is expected to be amortized over a weighted average period of 2.3 years. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Earnings before Provision for Income Taxes For the years ended December 31 ($ in millions) 2019 2018 2017 U.S. $ 4,870 $ 3,628 $ 3,334 Non-U.S. 17 16 (10 ) Earnings before provision for income taxes $ 4,887 $ 3,644 $ 3,324 Provision for Income Taxes For the years ended December 31 ($ in millions) 2019 2018 2017 Current provision for income taxes U.S. Federal $ 949 $ 775 $ 900 U.S. state and local 167 115 92 Non-U.S. 1 17 12 Total current provision for income taxes 1,117 907 1,004 Deferred provision (benefit) for income taxes U.S. Federal 19 (55 ) 367 U.S. state and local 2 (7 ) 20 Non-U.S. 2 9 (2 ) Deferred provision (benefit) for income taxes 23 (53 ) 385 Total provision for income taxes $ 1,140 $ 854 $ 1,389 Tax Reform On December 22, 2017, the Tax Act was signed into law. The Tax Act significantly revised the U.S. income tax laws, which impacted our year ended December 31, 2017, including lowering the corporate income tax rate from 35% to 21% effective January 1, 2018. We recognized additional discrete tax expense of $160 million for the year ended December 31, 2017, primarily due to the remeasurement of our net deferred tax asset following enactment of the Tax Act. Reconciliation of Our Effective Tax Rate to the U.S. Federal Statutory Income Tax Rate For the years ended December 31 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % U.S. state and local income taxes, net of federal benefit 2.7 2.4 2.2 Tax Act enactment — — 4.8 All other, net (0.4 ) — (0.2 ) Effective tax rate 23.3 % 23.4 % 41.8 % Significant Components of Our Net Deferred Income Taxes At December 31 ($ in millions) 2019 2018 Assets Allowance for loan losses $ 1,399 $ 1,588 Compensation and employee benefits 106 110 Other assets 151 113 Total deferred income tax assets before valuation allowance 1,656 1,811 Valuation allowance — — Total deferred income tax assets $ 1,656 $ 1,811 Liabilities Original issue discount $ (998 ) $ (1,198 ) Goodwill and identifiable intangibles (198 ) (187 ) Other liabilities (194 ) (133 ) Total deferred income tax liabilities (1,390 ) (1,518 ) Net deferred income tax assets $ 266 $ 293 Tax Sharing and Separation Agreement In connection with our initial public offering in August 2014 (“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. Under the TSSA, we generally are responsible for all taxes attributable to us or our operations for taxable periods following December 31, 2013. For periods prior to Separation, we filed tax returns on a consolidated basis with GE and are 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. For federal income tax purposes, the IRS is currently auditing GE's consolidated U.S. income tax returns for 2014 and 2015. Additionally, we are under examination in various states going back to 2012. For periods after separation, we file tax returns on a stand-alone basis and are under examination in various states. Unrecognized Tax Benefits Reconciliation of Unrecognized Tax Benefits ($ in millions) 2019 2018 Balance at January 1 $ 251 $ 255 Additions: Tax positions of the current year 83 85 Tax positions of prior years 5 3 Reductions: Prior year tax positions (59 ) (64 ) Settlements with tax authorities (2 ) (3 ) Expiration of the statute of limitation (23 ) (25 ) Balance at December 31 $ 255 $ 251 Portion of balance that, if recognized, would impact the effective income tax rate $ 172 $ 164 The amount of unrecognized tax benefits that is reasonably possible to be resolved in the next twelve months is expected to be $79 million , of which, $28 million , if recognized, would reduce the company’s tax expense and effective tax rate. Included in the $79 million of unrecognized benefits are certain temporary differences that would not affect the effective tax rate if they were recognized in the Consolidated Statement of Earnings. Additionally, there are unrecognized tax benefits of $26 million and $29 million for the years ended December 31, 2019 and 2018 , 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. 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. |
Parent Company Financial Inform
Parent Company Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Parent Company Financial Information | PARENT COMPANY FINANCIAL INFORMATION The following tables present parent company financial statements for Synchrony Financial. At December 31, 2019 , restricted net assets of our subsidiaries were $12.4 billion . Condensed Statements of Earnings For the years ended December 31 ($ in millions) 2019 2018 2017 Interest income: Interest income from subsidiaries $ 207 $ 220 $ 125 Interest on cash and debt securities 12 20 23 Total interest income 219 240 148 Interest expense: Interest on senior unsecured notes 300 287 268 Total interest expense 300 287 268 Net interest income (expense) (81 ) (47 ) (120 ) Dividends from bank subsidiaries 3,900 950 1,040 Dividends from nonbank subsidiaries 309 318 1,133 Other income 144 115 91 Other expense 162 120 115 Earnings before benefit from income taxes 4,110 1,216 2,029 Benefit from income taxes (19 ) (8 ) (89 ) Equity in undistributed net earnings of subsidiaries (382 ) 1,566 (183 ) Net earnings $ 3,747 $ 2,790 $ 1,935 Comprehensive income $ 3,764 $ 2,792 $ 1,924 Condensed Statements of Financial Position At December 31 ($ in millions) 2019 2018 Assets Cash and equivalents $ 4,491 $ 3,356 Debt securities 502 869 Investments in and amounts due from subsidiaries (a) 18,196 18,566 Goodwill 17 17 Other assets 89 89 Total assets $ 23,295 $ 22,897 Liabilities and Equity Amounts due to subsidiaries $ 220 $ 184 Senior unsecured notes 7,461 7,568 Accrued expenses and other liabilities 526 467 Total liabilities 8,207 8,219 Equity: Total equity 15,088 14,678 Total liabilities and equity $ 23,295 $ 22,897 _____________ (a) Includes investments in and amounts due from bank subsidiaries of $12.9 billion and $13.1 billion at December 31, 2019 and 2018 , respectively. Condensed Statements of Cash Flows For the years ended December 31 ($ in millions) 2019 2018 2017 Cash flows - operating activities Net earnings $ 3,747 $ 2,790 $ 1,935 Adjustments to reconcile net earnings to cash provided from operating activities Deferred income taxes (1 ) 8 (43 ) (Increase) decrease in other assets 14 106 18 Increase (decrease) in accrued expenses and other liabilities (15 ) 6 (38 ) Equity in undistributed net earnings of subsidiaries 382 (1,566 ) 183 All other operating activities 38 66 53 Cash provided from (used for) operating activities 4,165 1,410 2,108 Cash flows - investing activities Net (increase) decrease in investments in and amounts due from subsidiaries 210 1,687 (947 ) Maturity and sales of debt securities 972 1,493 1,914 Purchases of debt securities (597 ) (681 ) (1,402 ) All other investing activities (100 ) (94 ) (45 ) Cash provided from (used for) investing activities 485 2,405 (480 ) Cash flows - financing activities Senior unsecured notes Proceeds from issuance of senior unsecured notes 1,985 — 991 Maturities and repayment of senior unsecured notes (2,100 ) — (1,200 ) Proceeds from issuance of preferred stock 734 — — Purchases of treasury stock (3,618 ) (1,868 ) (1,497 ) Dividends paid on common stock (581 ) (534 ) (446 ) Increase (decrease) in amounts due to subsidiaries 28 (4 ) 27 All other financing activities 37 (28 ) (2 ) Cash provided from (used for) financing activities (3,515 ) (2,434 ) (2,127 ) Increase (decrease) in cash and equivalents 1,135 1,381 (499 ) Cash and equivalents at beginning of year 3,356 1,975 2,474 Cash and equivalents at end of year $ 4,491 $ 3,356 $ 1,975 |
Legal Proceedings and Regulator
Legal Proceedings and Regulatory Matters | 12 Months Ended |
Dec. 31, 2019 | |
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 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 October 30, 2014, the United States Trustee, which is part of the Department of Justice, 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 March 4, 2019, on plaintiff’s motion for reconsideration, the District Court vacated its decision reversing the Bankruptcy Court and affirmed the Bankruptcy Court’s decision denying the Bank’s motion to compel arbitration. On May 9, 2017, the Bank received a Civil Investigative Demand from the CFPB seeking information related to the marketing and servicing of deferred interest promotions. Other Matters The Bank or the Company is, or has been, defending a number of putative class actions alleging claims under the federal Telephone Consumer Protection Act as a result of phone calls made by the Bank. The complaints generally have alleged that the Bank or the Company 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, without specifying an aggregate amount. Campbell et al. v. Synchrony Bank was filed on January 25, 2017 in the U.S. District Court for the Northern District of New York. The original complaint named only J.C. Penney Company, Inc. and J.C. Penney Corporation, Inc. as the defendants but was amended on April 7, 2017 to replace those defendants with the Bank. Neal et al. v. Wal-Mart Stores, Inc. and Synchrony Bank , for which the Bank is indemnifying Wal-Mart, was filed on January 17, 2017 in the U.S. District Court for the Western District of North Carolina. The original complaint named only Wal-Mart Stores, Inc. as a defendant but was amended on March 30, 2017 to add Synchrony Bank as an additional defendant. Mott et al. v. Synchrony Bank was filed on February 2, 2018 in the U.S. District Court for the Middle District of Florida. On November 2, 2018, a putative class action lawsuit, Retail Wholesale Department Store Union Local 338 Retirement Fund v. Synchrony Financial, et al. , was filed in the U.S. District Court for the District of Connecticut, naming as defendants the Company and two of its officers. The lawsuit asserts violations of the Exchange Act for allegedly making materially misleading statements and/or omitting material information concerning the Company’s underwriting practices and private-label card business, and was filed on behalf of a putative class of persons who purchased or otherwise acquired the Company’s common stock between October 21, 2016 and November 1, 2018. The complaint seeks an award of unspecified compensatory damages, costs and expenses. On February 5, 2019, the court appointed Stichting Depositary APG Developed Markets Equity Pool as lead plaintiff for the putative class. On April 5, 2019, an amended complaint was filed, asserting a new claim for violations of the Securities Act in connection with statements in the offering materials for the Company’s December 1, 2017 note offering. The Securities Act claims are filed on behalf of persons who purchased or otherwise acquired Company bonds in or traceable to the December 1, 2017 note offering between December 1, 2017 and November 1, 2018. The amended complaint names as additional defendants two additional Company officers, the Company’s board of directors, and the underwriters of the December 1, 2017 note offering. The amended complaint is captioned Stichting Depositary APG Developed Markets Equity Pool and Stichting Depositary APG Fixed Income Credit Pool v. Synchrony Financial et al. On January 28, 2019, a purported shareholder derivative action, Gilbert v. Keane, et al. , was filed in the U.S. District Court for the District of Connecticut against the Company as a nominal defendant, and certain of the Company’s officers and directors. The lawsuit alleges breach of fiduciary duty claims based on the allegations raised by the plaintiff in the Stichting Depositar APG class action, unjust enrichment, waste of corporate assets, and that the defendants made materially misleading statements and/or omitted material information in violation of the Exchange Act. The complaint seeks a declaration that the defendants breached and/or aided and abetted the breach of their fiduciary duties to the Company, unspecified monetary damages with interest, restitution, a direction that the defendants take all necessary actions to reform and improve corporate governance and internal procedures, and attorneys’ and experts’ fees. On March 11, 2019, a second purported shareholder derivative action, Aldridge v. Keane, et al. , was filed in the U.S. District Court for the District of Connecticut. The allegations in the Aldridge complaint are substantially similar to those in the Gilbert complaint. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Information (Unaudited) | SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarterly Periods Ended ($ in millions) December 31, 2019 September 30, June 30, March 31, December 31, 2018 September 30, June 30, March 31, Interest income $ 4,585 $ 4,981 $ 4,738 $ 4,786 $ 4,876 $ 4,694 $ 4,174 $ 4,244 Interest expense 556 592 583 560 543 488 437 402 Net interest income 4,029 4,389 4,155 4,226 4,333 4,206 3,737 3,842 Earnings before provision for income taxes 921 1,375 1,129 1,462 1,012 893 892 847 Provision for income taxes 190 319 276 355 229 222 196 207 Net earnings $ 731 $ 1,056 $ 853 $ 1,107 $ 783 $ 671 $ 696 $ 640 Earnings per share Basic $ 1.15 $ 1.60 $ 1.25 $ 1.57 $ 1.09 $ 0.91 $ 0.93 $ 0.84 Diluted $ 1.15 $ 1.60 $ 1.24 $ 1.56 $ 1.09 $ 0.91 $ 0.92 $ 0.83 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated 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 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 debt 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 primarily 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 period-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 Company’s financial statements have been prepared on a consolidated basis. 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. 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 . |
New Accounting Pronouncements | New Accounting Standards Newly Adopted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The ASU requires lessees to recognize most leases on their balance sheet. Leases which were identified as capital leases are now identified as financing leases under the new guidance but otherwise their accounting treatment remains relatively unchanged. Leases previously identified as operating leases remain in that category under the new standard, but both a right-of-use asset and a liability for remaining lease payments are recognized on our statement of financial position. We adopted this guidance retrospectively in the current year as of January 1, 2019, which did not have a material impact on the consolidated financial statements. Recently Issued But Not Yet Adopted Accounting Standards In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments, which is effective for the Company on January 1, 2020. This ASU replaces the existing incurred loss impairment guidance with a new impairment model known as the Current Expected Credit Loss ("CECL") model, which is based on expected credit losses. This standard is effective for annual and interim reporting periods for fiscal years beginning after December 15, 2019, with early adoption permitted for annual and interim periods for fiscal years beginning after December 15, 2018. We plan to adopt the standard on its effective date, which for us is January 1, 2020. Upon adoption, the amendments in this standard will be recognized on a modified-retrospective basis through a cumulative-effect adjustment to retained earnings. Following the adoption date, upon origination of a loan, the estimate of expected credit losses, and any subsequent changes to our estimates of total expected losses for our loan receivables, will be recorded through provision for loan losses in our Consolidated Statement of Earnings. The adoption of this standard will also require us to update our accounting policy for the allowance for loan losses. Under the CECL model, losses on loan receivables will be recognized upon origination of the loan, based on expected credit losses for the life of the loan balance. Expected credit loss estimates will involve modeling loss projections attributable to existing loan balances, considering historical experience, current conditions and future expectations for homogeneous pools of loans over the reasonable and supportable forecast period. Our approach will also consider qualitative adjustments. Subsequent to the reasonable and supportable forecast period, we will revert to mean historical loss information for the remaining life of the loan. We will periodically reassess key assumptions based on any differences in underwriting standards, portfolio mix, and other relevant data shifts. While we have determined our estimation models and methodology, and have developed our internal processes and systems, we continue to finalize our estimate of the impact of adoption, the execution of controls, and the evaluation of the impact to our financial statement disclosures. Based on our current stage of implementation, we estimate the adoption will result in an increase of approximately $3.0 billion , or 54% , to the Company’s allowance for loan losses. We also expect an increase in deferred tax assets and a decrease in the Company's regulatory capital amounts and ratios as a result of adoption. The regulatory capital effects will be phased-in over three years as permitted by the federal banking agencies . |
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 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 and equivalents unless designated as available-for-sale and classified as investment securities. Cash and equivalents at December 31, 2019 primarily included cash and due from banks of $1.2 billion and interest-bearing deposits in other banks of $9.6 billion and other short-term investments of $1.3 billion . Cash and equivalents at December 31, 2018 primarily included cash and due from banks of $1.1 billion and interest-bearing deposits in other banks of $8.3 billion . |
Restricted Cash and Equivalents | Restricted Cash and Equivalents |
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. Changes in fair value on debt securities, which are classified as available-for-sale, are included in equity, net of applicable taxes. Changes in fair value on equity securities are included in earnings starting in 2018. 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 debt 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 debt 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. |
Loan Receivables | Loan Receivables |
Loan Receivables Held for Sale | Loan Receivables Held for Sale Loans purchased or originated with the intent to sell are classified as loan receivables held for sale and recorded at the lower of amortized cost or fair value. Loans initially classified as held for investment are transferred to loan receivables held for sale and recorded at the lower of amortized cost or fair value once a decision has been made to sell the loans. 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. |
Acquired Loans | Acquired Loans |
Troubled Debt Restructuring | 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 use long-term modification programs for borrowers experiencing financial difficulty as a loss mitigation strategy to improve long-term collectability of the loans that are classified as TDRs. 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. |
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. 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. |
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 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 |
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 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. |
Revenue Recognition, Interest and Fees on Loans | Interest and Fees on Loans We use the effective interest method to recognize income on loans. Interest and fees 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 Statements of Earnings. See Note 4. Loan Receivables and Allowance for Loan Losses for further detail. |
Revenue Recognition, Promotional Financing | Promotional Financing |
Revenue Recognition, Purchased Loans | Purchased Loans |
Revenue Recognition, Retailer Share Arrangements | Retailer Share Arrangements |
Revenue Recognition, Loyalty Programs | Loyalty Programs |
Revenue Recognition, Fraud Losses | Fraud Losses |
Income Taxes | Income Taxes 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. The effects of tax adjustments and settlements from taxing authorities are presented in our consolidated financial statements in the period they occur. 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. In making decisions regarding our ability to realize tax assets, we evaluate all positive and negative evidence, including projected future taxable income, taxable income in carryback periods, expected reversal of deferred tax liabilities and the implementation of available tax planning strategies. |
Fair Value Measurements | Fair Value Measurements 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 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 valuations, 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 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 brokers and 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 certain equity securities, as well as certain contingent consideration obligations 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 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. |
Debt Securities (Tables)
Debt Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Available-for-sale Securities Reconciliation | December 31, 2019 December 31, 2018 Gross Gross Gross Gross Amortized unrealized unrealized Estimated Amortized unrealized unrealized Estimated ($ in millions) cost gains losses fair value cost gains losses fair value U.S. government and federal agency $ 2,468 $ 1 $ — $ 2,469 $ 2,889 $ — $ (1 ) $ 2,888 State and municipal 46 1 (2 ) 45 50 — (2 ) 48 Residential mortgage-backed (a) 1,029 6 (9 ) 1,026 1,180 1 (42 ) 1,139 Asset-backed (b) 2,368 3 — 2,371 1,988 — (3 ) 1,985 U.S. corporate debt — — — — 2 — — 2 Total $ 5,911 $ 11 $ (11 ) $ 5,911 $ 6,109 $ 1 $ (48 ) $ 6,062 _______________________ (a) All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At December 31, 2019 and 2018 , $351 million and $313 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. (b) All of our asset-backed securities are collateralized by credit card loans. |
Available-for-sale Securities, Continuous Loss Position, Fair Value | In loss position for Less than 12 months 12 months or more Gross Gross Estimated unrealized Estimated unrealized ($ in millions) fair value losses fair value losses At December 31, 2019 U.S. government and federal agency $ — $ — $ — $ — State and municipal — — 24 (2 ) Residential mortgage-backed 76 — 618 (9 ) Asset-backed 202 — — — Total $ 278 $ — $ 642 $ (11 ) At December 31, 2018 U.S. government and federal agency $ 2,838 $ (1 ) $ — $ — State and municipal 23 (1 ) 8 (1 ) Residential mortgage-backed 102 — 933 (42 ) Asset-backed 1,665 (2 ) 114 (1 ) Total $ 4,628 $ (4 ) $ 1,055 $ (44 ) |
Investments Classified by Contractual Maturity Date | Contractual Maturities of Investments in Available-for-Sale Debt Securities Amortized Estimated Weighted At December 31, 2019 ($ in millions) cost fair value Average yield (a) Due Within one year $ 4,322 $ 4,325 1.9 % After one year through five years $ 515 $ 516 2.1 % After five years through ten years $ 144 $ 147 3.2 % After ten years $ 930 $ 923 2.9 % ______________________ (a) Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. |
Loan Receivables and Allowanc_2
Loan Receivables and Allowance for Loan Losses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Schedule of Accounts, Notes, Loans and Financing Receivable | At December 31 ($ in millions) 2019 2018 Credit cards $ 84,606 $ 89,994 Consumer installment loans 1,347 1,845 Commercial credit products 1,223 1,260 Other 39 40 Total loan receivables, before allowance for losses (a)(b) $ 87,215 $ 93,139 _______________________ (a) Total loan receivables include $28.8 billion and $28.2 billion of restricted loans of consolidated securitization entities at December 31, 2019 and 2018 , respectively. See Note 5. Variable Interest Entities for further information on these restricted loans. (b) At December 31, 2019 and 2018 , loan receivables included deferred costs, net of deferred income, of $140 million and $105 million , respectively. |
Allowance for Credit Losses on Financing Receivables | Allowance for Loan Losses ($ in millions) Balance at January 1, 2019 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2019 Credit cards $ 6,327 $ 4,083 $ (5,907 ) $ 1,003 $ 5,506 Consumer installment loans 44 51 (66 ) 17 46 Commercial credit products 55 45 (58 ) 7 49 Other 1 1 (1 ) — 1 Total $ 6,427 $ 4,180 $ (6,032 ) $ 1,027 $ 5,602 ($ in millions) Balance at January 1, 2018 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2018 Credit cards $ 5,483 $ 5,448 $ (5,435 ) $ 831 $ 6,327 Consumer installment loans 40 45 (56 ) 15 44 Commercial credit products 50 52 (53 ) 6 55 Other 1 — — — 1 Total $ 5,574 $ 5,545 $ (5,544 ) $ 852 $ 6,427 ($ in millions) Balance at January 1, 2017 Provision charged to operations Gross charge-offs Recoveries Balance at December 31, 2017 Credit cards $ 4,254 $ 5,200 $ (4,883 ) $ 912 $ 5,483 Consumer installment loans 37 41 (52 ) 14 40 Commercial credit products 52 55 (63 ) 6 50 Other 1 — — — 1 Total $ 4,344 $ 5,296 $ (4,998 ) $ 932 $ 5,574 |
Past Due Financing Receivables | Delinquent and Non-accrual Loans At December 31, 2019 ($ 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 $ 1,936 $ 1,852 $ 3,788 $ 1,850 $ — Consumer installment loans 21 7 28 — 7 Commercial credit products 40 18 58 18 — Total delinquent loans $ 1,997 $ 1,877 $ 3,874 $ 1,868 $ 7 Percentage of total loan receivables 2.3 % 2.2 % 4.4 % 2.1 % — % At December 31, 2018 ($ in millions) 30-89 days delinquent 90 or more days delinquent Total past due 90 or more days delinquent and accruing Total non-accruing Credit cards $ 2,229 $ 2,113 $ 4,342 $ 2,099 $ — Consumer installment loans 28 5 33 — 5 Commercial credit products 38 17 55 17 — Total delinquent loans $ 2,295 $ 2,135 $ 4,430 $ 2,116 $ 5 Percentage of total loan receivables 2.5 % 2.3 % 4.8 % 2.3 % 0.1 % _______________________ (a) Excludes PCI loan receivables. |
Troubled Debt Restructurings on Financing Receivables | For the years ended December 31 ($ in millions) 2019 2018 Credit cards $ 849 $ 886 Consumer installment loans — — Commercial credit products 3 3 Total $ 852 $ 889 |
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, 2019 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,146 $ (550 ) $ 596 $ 1,019 Consumer installment loans — — — — Commercial credit products 4 (2 ) 2 4 Total $ 1,150 $ (552 ) $ 598 $ 1,023 At December 31, 2018 ($ in millions) Total recorded investment Related allowance Net recorded investment Unpaid principal balance Credit cards $ 1,203 $ (546 ) $ 657 $ 1,086 Consumer installment loans — — — — Commercial credit products 4 (2 ) 2 4 Total $ 1,207 $ (548 ) $ 659 $ 1,090 |
Financial Effect of TDRs | Years ended December 31, 2019 2018 2017 ($ 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 $ 45 $ 268 $ 1,111 $ 49 $ 266 $ 1,112 $ 48 $ 220 $ 960 Consumer installment loans — — — — — — — — — Commercial credit products — 1 4 — 1 5 — 2 5 Total $ 45 $ 269 $ 1,115 $ 49 $ 267 $ 1,117 $ 48 $ 222 $ 965 |
Troubled Debt Restructurings on Financing Receivables, Subsequent Default | Years ended December 31, 2019 2018 2017 ($ in millions) Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Accounts defaulted Loans defaulted Credit cards 39,233 $ 98 38,976 $ 91 40,316 $ 90 Consumer installment loans — — — — — — Commercial credit products 114 1 76 1 110 1 Total 39,347 $ 99 39,052 $ 92 40,426 $ 91 |
Financing Receivable Credit Quality Indicators | At December 31 2019 2018 661 or 601 to 600 or 661 or 601 to 600 or higher 660 less higher 660 less Credit cards 74 % 18 % 8 % 74 % 18 % 8 % Consumer installment loans 76 % 17 % 7 % 80 % 14 % 6 % Commercial credit products 90 % 5 % 5 % 90 % 5 % 5 % |
Interest Income and Interest Expense Disclosure | For the years ended December 31 ($ in millions) 2019 2018 2017 Credit cards $ 18,384 $ 17,342 $ 15,941 Consumer installment loans 182 156 137 Commercial credit products 137 144 139 Other 2 2 2 Total $ 18,705 $ 17,644 $ 16,219 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Variable Interest Entities [Abstract] | |
Schedule of Variable Interest Entities | VIEs described above. At December 31 ($ in millions) 2019 2018 Assets Loan receivables, net (a) $ 27,217 $ 26,454 Other assets (b) 68 813 Total $ 27,285 $ 27,267 Liabilities Borrowings $ 10,412 $ 14,439 Other liabilities 32 36 Total $ 10,444 $ 14,475 _______________________ (a) Includes $1.6 billion and $1.7 billion of related allowance for loan losses resulting in gross restricted loans of $28.8 billion and $28.2 billion at December 31, 2019 and 2018 , respectively. (b) Includes $62 million and $803 million of segregated funds held by the VIEs at December 31, 2019 and 2018 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill ($ in millions) 2019 2018 Balance at January 1 $ 1,024 $ 991 Acquisitions 54 33 Balance at December 31 $ 1,078 $ 1,024 |
Schedule of Finite-Lived Intangible Assets | Intangible Assets Subject to Amortization 2019 2018 At December 31 ($ in millions) Gross carrying amount Accumulated amortization Net Gross carrying amount Accumulated amortization Net Customer-related $ 1,749 $ (952 ) $ 797 $ 1,630 $ (803 ) $ 827 Capitalized software and other 861 (393 ) 468 562 (252 ) 310 Total $ 2,610 $ (1,345 ) $ 1,265 $ 2,192 $ (1,055 ) $ 1,137 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | ($ in millions) 2020 2021 2022 2023 2024 Amortization expense $ 290 $ 240 $ 194 $ 154 $ 119 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Schedule of Deposit Liabilities | Deposits 2019 2018 At December 31 ($ in millions) Amount Average rate (a) Amount Average rate (a) Interest-bearing deposits $ 64,877 2.4 % $ 63,738 2.0 % Non-interest-bearing deposits 277 — 281 — Total deposits $ 65,154 $ 64,019 ___________________ (a) Based on interest expense for the years ended December 31, 2019 and 2018 |
Schedule of Maturities of Deposit Liabilities | At December 31, 2019 , our interest-bearing time deposits maturing over the next five years and thereafter were as follows: ($ in millions) 2020 2021 2022 2023 2024 Thereafter Deposits $ 28,780 $ 5,866 $ 3,093 $ 1,346 $ 2,277 $ 356 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Schedule of Debt | 2019 Issuances ($ in millions) : Synchrony Financial Issuance Date Principal Amount Maturity Interest Rate March 2019 $ 600 2024 4.375 % March 2019 $ 650 2029 5.150 % July 2019 $ 750 2022 2.850 % 2019 2018 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 2020 - 2023 1.93% - 3.87% 2.71 % $ 7,512 $ 8,664 Floating securitized borrowings 2020 - 2022 2.33% - 2.65% 2.48 % 2,900 5,775 Total borrowings of consolidated securitization entities 2.64 % 10,412 14,439 Senior unsecured notes: Synchrony Financial senior unsecured notes: Fixed senior unsecured notes 2020 - 2029 2.70% - 5.15% 3.94 % 7,211 7,318 Floating senior unsecured notes 2020 3.13 % 3.13 % 250 250 Synchrony Bank senior unsecured notes: Fixed senior unsecured notes 2021 - 2022 3.00% - 3.65% 3.33 % 1,493 1,490 Floating senior unsecured notes 2020 2.59 % 2.59 % 500 499 Total senior unsecured notes 3.75 % 9,454 9,557 Total borrowings $ 19,866 $ 23,996 ___________________ (a) The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Schedule of Maturities of Long-term Debt | ($ in millions) 2020 2021 2022 2023 2024 Thereafter Borrowings $ 4,208 $ 5,659 $ 4,350 $ 708 $ 1,850 $ 3,150 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | At December 31, 2019 ($ in millions) Level 1 Level 2 Level 3 Total (a) Assets Debt securities U.S. government and federal agency $ — $ 2,469 $ — $ 2,469 State and municipal — — 45 45 Residential mortgage-backed — 1,026 — 1,026 Asset-backed — 2,371 — 2,371 Other assets (b) 15 — 21 36 Total $ 15 $ 5,866 $ 66 $ 5,947 Liabilities Contingent consideration — — 13 13 Total $ — $ — $ 13 $ 13 At December 31, 2018 ($ in millions) Assets Debt securities U.S. government and federal agency $ — $ 2,888 $ — $ 2,888 State and municipal — — 48 48 Residential mortgage-backed — 1,139 — 1,139 Asset-backed — 1,985 — 1,985 U.S. corporate debt — — 2 2 Other assets (b) 15 — 13 28 Total $ 15 $ 6,012 $ 63 $ 6,090 Liabilities Contingent consideration — — 26 26 Total $ — $ — $ 26 $ 26 _______________________ (a) For the years ended December 31, 2019 and 2018 , there were no securities transferred between levels. (b) Other assets primarily relate to equity investments measured at fair value. |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The changes in our Level 3 assets and liabilities that are measured on a recurring basis for the years ended December 31, 2019 and 2018 were not material. |
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, 2019 ($ 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) $ 12,147 $ 12,147 $ 10,799 $ 1,348 $ — Other assets (a)(b) $ 500 $ 500 $ 500 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 81,613 $ 90,941 $ — $ — $ 90,941 Loan receivables held for sale (c) $ 725 $ 726 $ — $ — $ 726 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 65,154 $ 65,544 $ — $ 65,544 $ — Borrowings of consolidated securitization entities $ 10,412 $ 10,513 $ — $ 7,613 $ 2,900 Senior unsecured notes $ 9,454 $ 9,924 $ — $ 9,924 $ — Carrying Corresponding fair value amount At December 31, 2018 ($ 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) $ 9,396 $ 9,396 $ 9,396 $ — $ — Other assets (a)(b) $ 980 $ 980 $ 980 $ — $ — Financial assets carried at other than fair value: Loan receivables, net (c) $ 86,712 $ 95,305 $ — $ — $ 95,305 Financial Liabilities Financial liabilities carried at other than fair value: Deposits $ 64,019 $ 63,942 $ — $ 63,942 $ — Borrowings of consolidated securitization entities $ 14,439 $ 14,400 $ — $ 8,626 $ 5,774 Senior unsecured notes $ 9,557 $ 9,062 $ — $ 9,062 $ — _______________________ (a) For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. (b) This balance relates to restricted cash and equivalents, which is included in other assets. (c) |
Regulatory and Capital Adequa_2
Regulatory and Capital Adequacy (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | of the Company and the Bank are as follows: Synchrony Financial At December 31, 2019 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,211 16.3 % $ 6,984 8.0 % Tier 1 risk-based capital $ 13,064 15.0 % $ 5,238 6.0 % Tier 1 leverage $ 13,064 12.6 % $ 4,161 4.0 % Common equity Tier 1 capital $ 12,330 14.1 % $ 3,929 4.5 % At December 31, 2018 ($ in millions) Actual Minimum for capital adequacy purposes Amount Ratio (a) Amount Ratio (b) Total risk-based capital $ 14,013 15.3 % $ 7,339 8.0 % Tier 1 risk-based capital $ 12,801 14.0 % $ 5,505 6.0 % Tier 1 leverage $ 12,801 12.3 % $ 4,157 4.0 % Common equity Tier 1 capital $ 12,801 14.0 % $ 4,128 4.5 % Synchrony Bank At December 31, 2019 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 11,911 15.6 % $ 6,094 8.0 % $ 7,618 10.0 % Tier 1 risk-based capital $ 10,907 14.3 % $ 4,571 6.0 % $ 6,094 8.0 % Tier 1 leverage $ 10,907 11.9 % $ 3,671 4.0 % $ 4,589 5.0 % Common equity Tier 1 capital $ 10,907 14.3 % $ 3,428 4.5 % $ 4,952 6.5 % At December 31, 2018 ($ in millions) Actual Minimum for capital adequacy purposes Minimum to be well-capitalized under prompt corrective action provisions Amount Ratio (a) Amount Ratio (b) Amount Ratio Total risk-based capital $ 12,258 15.4 % $ 6,348 8.0 % $ 7,934 10.0 % Tier 1 risk-based capital $ 11,207 14.1 % $ 4,761 6.0 % $ 6,348 8.0 % Tier 1 leverage $ 11,207 12.4 % $ 3,612 4.0 % $ 4,515 5.0 % Common equity Tier 1 capital $ 11,207 14.1 % $ 3,570 4.5 % $ 5,157 6.5 % _______________________ (a) Capital ratios are calculated based on the Basel III Standardized Approach rules. (b) At December 31, 2019 and 2018, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points and 1.875 percentage points, respectively, to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted earnings per common share: Years ended December 31, (in millions, except per share data) 2019 2018 2017 Net earnings available to common stockholders $ 3,747 $ 2,790 $ 1,935 Weighted average common shares outstanding, basic 670.2 742.3 795.6 Effect of dilutive securities 3.3 4.6 4.1 Weighted average common shares outstanding, dilutive 673.5 746.9 799.7 Earnings per basic common share $ 5.59 $ 3.76 $ 2.43 Earnings per diluted common share $ 5.56 $ 3.74 $ 2.42 |
Equity and Other Stock Relate_2
Equity and Other Stock Related Information Equity and Other Stock Related Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Series A Preferred Stock | |
Class of Stock [Line Items] | |
Schedule of Stock by Class [Table Text Block] | Series Issuance Date Redeemable by Issuer Beginning Per Annum Dividend Rate Liquidation Preference per Share Total Shares Outstanding December 31, 2019 December 31, 2018 ($ in millions, except per share data) Series A (a) November 14, 2019 November 15, 2024 5.625% $1,000 750,000 $ 734 $ — $ 734 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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) 2019 2018 2017 U.S. $ 4,870 $ 3,628 $ 3,334 Non-U.S. 17 16 (10 ) Earnings before provision for income taxes $ 4,887 $ 3,644 $ 3,324 |
Schedule of Components of Income Tax Expense (Benefit) | Provision for Income Taxes For the years ended December 31 ($ in millions) 2019 2018 2017 Current provision for income taxes U.S. Federal $ 949 $ 775 $ 900 U.S. state and local 167 115 92 Non-U.S. 1 17 12 Total current provision for income taxes 1,117 907 1,004 Deferred provision (benefit) for income taxes U.S. Federal 19 (55 ) 367 U.S. state and local 2 (7 ) 20 Non-U.S. 2 9 (2 ) Deferred provision (benefit) for income taxes 23 (53 ) 385 Total provision for income taxes $ 1,140 $ 854 $ 1,389 |
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 2019 2018 2017 U.S. federal statutory income tax rate 21.0 % 21.0 % 35.0 % U.S. state and local income taxes, net of federal benefit 2.7 2.4 2.2 Tax Act enactment — — 4.8 All other, net (0.4 ) — (0.2 ) Effective tax rate 23.3 % 23.4 % 41.8 % |
Schedule of Deferred Tax Assets and Liabilities | Significant Components of Our Net Deferred Income Taxes At December 31 ($ in millions) 2019 2018 Assets Allowance for loan losses $ 1,399 $ 1,588 Compensation and employee benefits 106 110 Other assets 151 113 Total deferred income tax assets before valuation allowance 1,656 1,811 Valuation allowance — — Total deferred income tax assets $ 1,656 $ 1,811 Liabilities Original issue discount $ (998 ) $ (1,198 ) Goodwill and identifiable intangibles (198 ) (187 ) Other liabilities (194 ) (133 ) Total deferred income tax liabilities (1,390 ) (1,518 ) Net deferred income tax assets $ 266 $ 293 |
Summary of Unrecognized Tax Benefits | Reconciliation of Unrecognized Tax Benefits ($ in millions) 2019 2018 Balance at January 1 $ 251 $ 255 Additions: Tax positions of the current year 83 85 Tax positions of prior years 5 3 Reductions: Prior year tax positions (59 ) (64 ) Settlements with tax authorities (2 ) (3 ) Expiration of the statute of limitation (23 ) (25 ) Balance at December 31 $ 255 $ 251 Portion of balance that, if recognized, would impact the effective income tax rate $ 172 $ 164 |
Parent Company Financial Info_2
Parent Company Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Statements of Earnings | Condensed Statements of Earnings For the years ended December 31 ($ in millions) 2019 2018 2017 Interest income: Interest income from subsidiaries $ 207 $ 220 $ 125 Interest on cash and debt securities 12 20 23 Total interest income 219 240 148 Interest expense: Interest on senior unsecured notes 300 287 268 Total interest expense 300 287 268 Net interest income (expense) (81 ) (47 ) (120 ) Dividends from bank subsidiaries 3,900 950 1,040 Dividends from nonbank subsidiaries 309 318 1,133 Other income 144 115 91 Other expense 162 120 115 Earnings before benefit from income taxes 4,110 1,216 2,029 Benefit from income taxes (19 ) (8 ) (89 ) Equity in undistributed net earnings of subsidiaries (382 ) 1,566 (183 ) Net earnings $ 3,747 $ 2,790 $ 1,935 Comprehensive income $ 3,764 $ 2,792 $ 1,924 |
Condensed Statements of Financial Position | Condensed Statements of Financial Position At December 31 ($ in millions) 2019 2018 Assets Cash and equivalents $ 4,491 $ 3,356 Debt securities 502 869 Investments in and amounts due from subsidiaries (a) 18,196 18,566 Goodwill 17 17 Other assets 89 89 Total assets $ 23,295 $ 22,897 Liabilities and Equity Amounts due to subsidiaries $ 220 $ 184 Senior unsecured notes 7,461 7,568 Accrued expenses and other liabilities 526 467 Total liabilities 8,207 8,219 Equity: Total equity 15,088 14,678 Total liabilities and equity $ 23,295 $ 22,897 _____________ (a) Includes investments in and amounts due from bank subsidiaries of $12.9 billion and $13.1 billion at December 31, 2019 and 2018 , respectively. |
Condensed Statements of Cash Flows | Condensed Statements of Cash Flows For the years ended December 31 ($ in millions) 2019 2018 2017 Cash flows - operating activities Net earnings $ 3,747 $ 2,790 $ 1,935 Adjustments to reconcile net earnings to cash provided from operating activities Deferred income taxes (1 ) 8 (43 ) (Increase) decrease in other assets 14 106 18 Increase (decrease) in accrued expenses and other liabilities (15 ) 6 (38 ) Equity in undistributed net earnings of subsidiaries 382 (1,566 ) 183 All other operating activities 38 66 53 Cash provided from (used for) operating activities 4,165 1,410 2,108 Cash flows - investing activities Net (increase) decrease in investments in and amounts due from subsidiaries 210 1,687 (947 ) Maturity and sales of debt securities 972 1,493 1,914 Purchases of debt securities (597 ) (681 ) (1,402 ) All other investing activities (100 ) (94 ) (45 ) Cash provided from (used for) investing activities 485 2,405 (480 ) Cash flows - financing activities Senior unsecured notes Proceeds from issuance of senior unsecured notes 1,985 — 991 Maturities and repayment of senior unsecured notes (2,100 ) — (1,200 ) Proceeds from issuance of preferred stock 734 — — Purchases of treasury stock (3,618 ) (1,868 ) (1,497 ) Dividends paid on common stock (581 ) (534 ) (446 ) Increase (decrease) in amounts due to subsidiaries 28 (4 ) 27 All other financing activities 37 (28 ) (2 ) Cash provided from (used for) financing activities (3,515 ) (2,434 ) (2,127 ) Increase (decrease) in cash and equivalents 1,135 1,381 (499 ) Cash and equivalents at beginning of year 3,356 1,975 2,474 Cash and equivalents at end of year $ 4,491 $ 3,356 $ 1,975 |
Selected Quarterly Financial _2
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Quarterly Periods Ended ($ in millions) December 31, 2019 September 30, June 30, March 31, December 31, 2018 September 30, June 30, March 31, Interest income $ 4,585 $ 4,981 $ 4,738 $ 4,786 $ 4,876 $ 4,694 $ 4,174 $ 4,244 Interest expense 556 592 583 560 543 488 437 402 Net interest income 4,029 4,389 4,155 4,226 4,333 4,206 3,737 3,842 Earnings before provision for income taxes 921 1,375 1,129 1,462 1,012 893 892 847 Provision for income taxes 190 319 276 355 229 222 196 207 Net earnings $ 731 $ 1,056 $ 853 $ 1,107 $ 783 $ 671 $ 696 $ 640 Earnings per share Basic $ 1.15 $ 1.60 $ 1.25 $ 1.57 $ 1.09 $ 0.91 $ 0.93 $ 0.84 Diluted $ 1.15 $ 1.60 $ 1.24 $ 1.56 $ 1.09 $ 0.91 $ 0.92 $ 0.83 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2019sales_platform | |
Accounting Policies [Abstract] | |
Number of sales platforms | 3 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Cash and Equivalents (Details) - USD ($) $ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash and due from banks | $ 1.2 | $ 1.1 |
Interest-bearing deposits in other banks | 9.6 | $ 8.3 |
Other short-term investments | $ 1.3 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Billions | 12 Months Ended | |
Dec. 31, 2019segmentpaymentreaging_limitation | Jan. 01, 2020USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
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 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Period past due for charge-off | 120 days | |
Unsecured Open-Ended Revolving | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Period past due for charge-off | 180 days | |
Unsecured Consumer in Bankruptcy | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Period past due for charge-off | 60 days | |
Credit card loans for deceased account holders | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Period past due for charge-off | 60 days | |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Threshold for interest and fee accrual | 180 days | |
Non-Credit Card Loan | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Threshold for interest and fee accrual | 90 days | |
Maximum period past due for interest and fee accrual | 90 days | |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Re-aging limitation period | 1 year | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Range of long-term modifications | 60 months | |
Re-aging limitation period, long-term | 5 years | |
Subsequent Event [Member] | Current Expected Credit Loss (CECL) [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Increase in Allowance for Loan Losses, Amount | $ | $ 3 | |
Increase in Allowance for Loan Losses, Percent | 54.00% |
Debt Securities - Schedule of A
Debt Securities - Schedule of Available for Sale Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Total | |||
Amortized cost | $ 5,911 | $ 6,109 | |
Gross unrealized gains | 11 | 1 | |
Gross unrealized losses | (11) | (48) | |
Estimated fair value | 5,911 | 6,062 | |
U.S. government and federal agency | |||
Debt | |||
Amortized cost | 2,468 | 2,889 | |
Gross unrealized gains | 1 | 0 | |
Gross unrealized losses | 0 | (1) | |
Estimated fair value | 2,469 | 2,888 | |
State and municipal | |||
Debt | |||
Amortized cost | 46 | 50 | |
Gross unrealized gains | 1 | 0 | |
Gross unrealized losses | (2) | (2) | |
Estimated fair value | 45 | 48 | |
Residential mortgage-backed | |||
Debt Securities, Available-for-sale [Line Items] | |||
Residential Mortgage Backed Securities pledged as collateral to the Federal Reserve | 351 | 313 | |
Debt | |||
Amortized cost | [1] | 1,029 | 1,180 |
Gross unrealized gains | [1] | 6 | 1 |
Gross unrealized losses | [1] | (9) | (42) |
Estimated fair value | [1] | 1,026 | 1,139 |
Asset-backed | |||
Debt | |||
Amortized cost | [2] | 2,368 | 1,988 |
Gross unrealized gains | [2] | 3 | 0 |
Gross unrealized losses | [2] | 0 | (3) |
Estimated fair value | [2] | 2,371 | 1,985 |
U.S. corporate debt | |||
Debt | |||
Amortized cost | 0 | 2 | |
Gross unrealized gains | 0 | 0 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | $ 0 | $ 2 | |
[1] | All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At December 31, 2019 and 2018 , $351 million and $313 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. | ||
[2] | All of our asset-backed securities are collateralized by credit card loans. |
Debt Securities - Continuous Un
Debt Securities - Continuous Unrealized Losses (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Estimated fair value | ||
Less than 12 months | $ 278 | $ 4,628 |
12 months or more | 642 | 1,055 |
Gross unrealized losses | ||
Less than 12 months | 0 | (4) |
12 months or more | (11) | (44) |
U.S. government and federal agency | ||
Estimated fair value | ||
Less than 12 months | 0 | 2,838 |
12 months or more | 0 | 0 |
Gross unrealized losses | ||
Less than 12 months | 0 | (1) |
12 months or more | 0 | 0 |
State and municipal | ||
Estimated fair value | ||
Less than 12 months | 0 | 23 |
12 months or more | 24 | 8 |
Gross unrealized losses | ||
Less than 12 months | 0 | (1) |
12 months or more | (2) | (1) |
Residential mortgage-backed | ||
Estimated fair value | ||
Less than 12 months | 76 | 102 |
12 months or more | 618 | 933 |
Gross unrealized losses | ||
Less than 12 months | 0 | 0 |
12 months or more | (9) | (42) |
Asset-backed | ||
Estimated fair value | ||
Less than 12 months | 202 | 1,665 |
12 months or more | 0 | 114 |
Gross unrealized losses | ||
Less than 12 months | 0 | (2) |
12 months or more | $ 0 | $ (1) |
Debt Securities - Contractual M
Debt Securities - Contractual Maturities (Details) $ in Millions | Dec. 31, 2019USD ($) | |
Amortized Cost | ||
Within one year | $ 4,322 | |
After one year through five years | 515 | |
After five years through ten years | 144 | |
After ten years | 930 | |
Estimated Fair Value | ||
Within one year | 4,325 | |
After one year through five years | 516 | |
After five years through ten years | 147 | |
After ten years | $ 923 | |
Weighted Average Yield | ||
Within one year | 1.90% | [1] |
After one year through five years | 2.10% | [1] |
After five years through ten years | 3.20% | [1] |
After ten years | 2.90% | [1] |
[1] | Weighted average yield is calculated based on the amortized cost of each security. In calculating yield, no adjustment has been made with respect to any tax-exempt obligations. |
Debt Securities - Narrative (De
Debt Securities - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |||
Other than temporary impairment | $ 0 | $ 0 | $ 0 |
Loan Receivables and Allowanc_3
Loan Receivables and Allowance for Loan Losses - Loan Receivables (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | [1],[2] | $ 87,215 | $ 93,139 |
Loan Receivables, Deferred Income | 140 | 105 | |
Total recorded investment | 1,150 | 1,207 | |
Impaired Financing Receivable, Related Allowance | 552 | 548 | |
Unpaid principal balance | 1,023 | 1,090 | |
Variable Interest Entity, Primary Beneficiary | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 28,817 | 28,170 | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 84,606 | 89,994 | |
Total recorded investment | 1,146 | 1,203 | |
Impaired Financing Receivable, Related Allowance | 550 | 546 | |
Unpaid principal balance | 1,019 | 1,086 | |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 1,347 | 1,845 | |
Total recorded investment | 0 | 0 | |
Impaired Financing Receivable, Related Allowance | 0 | 0 | |
Unpaid principal balance | 0 | 0 | |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | 1,223 | 1,260 | |
Total recorded investment | 4 | 4 | |
Impaired Financing Receivable, Related Allowance | 2 | 2 | |
Unpaid principal balance | 4 | 4 | |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loan receivables: (Notes 4 and 5) | $ 39 | $ 40 | |
[1] | At December 31, 2019 and 2018 , loan receivables included deferred costs, net of deferred income, of $140 million and $105 million , respectively. | ||
[2] | Total loan receivables include $28.8 billion and $28.2 billion of restricted loans of consolidated securitization entities at December 31, 2019 and 2018 , respectively. See Note 5. Variable Interest Entities |
Loan Receivables and Allowanc_4
Loan Receivables and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | $ 6,427 | $ 5,574 | $ 4,344 |
Provision charged to operations | 4,180 | 5,545 | 5,296 |
Gross charge-offs | (6,032) | (5,544) | (4,998) |
Recoveries | 1,027 | 852 | 932 |
Ending Balance | 5,602 | 6,427 | 5,574 |
Credit cards | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 6,327 | 5,483 | 4,254 |
Provision charged to operations | 4,083 | 5,448 | 5,200 |
Gross charge-offs | (5,907) | (5,435) | (4,883) |
Recoveries | 1,003 | 831 | 912 |
Ending Balance | 5,506 | 6,327 | 5,483 |
Consumer installment loans | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 44 | 40 | 37 |
Provision charged to operations | 51 | 45 | 41 |
Gross charge-offs | (66) | (56) | (52) |
Recoveries | 17 | 15 | 14 |
Ending Balance | 46 | 44 | 40 |
Commercial credit products | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 55 | 50 | 52 |
Provision charged to operations | 45 | 52 | 55 |
Gross charge-offs | (58) | (53) | (63) |
Recoveries | 7 | 6 | 6 |
Ending Balance | 49 | 55 | 50 |
Other | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning Balance | 1 | 1 | 1 |
Provision charged to operations | 1 | 0 | 0 |
Gross charge-offs | (1) | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Ending Balance | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowanc_5
Loan Receivables and Allowance for Loan Losses - Delinquent and Non Accrual Status (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Financing Receivable, Past Due Amount | |||
Total past due | $ 3,874 | $ 4,430 | |
90 or more days delinquent and accruing | 1,868 | 2,116 | |
Total non-accruing | $ 7 | [1] | $ 5 |
Financing Receivable, Percentage of Total Loan Receivables | |||
Percentage of Total Loan Receivables, 30-89 Days Past Due | 2.30% | 2.50% | |
Percentage of Total Loan Receivables, Equal to Greater than 90 Days Past Due | 2.20% | 2.30% | |
Percentage of Total Loan Receivables, Past Due | 4.40% | 4.80% | |
Percentage of Total Loan Receivables, 90 Days Past Due and Still Accruing | 2.10% | 2.30% | |
Percentage of Total Loan Receivables, Nonaccrual Status | 0.00% | [1] | 0.10% |
Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 3,788 | $ 4,342 | |
90 or more days delinquent and accruing | 1,850 | 2,099 | |
Total non-accruing | 0 | [1] | 0 |
Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 28 | 33 | |
90 or more days delinquent and accruing | 0 | 0 | |
Total non-accruing | 7 | [1] | 5 |
Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 58 | 55 | |
90 or more days delinquent and accruing | 18 | 17 | |
Total non-accruing | 0 | [1] | 0 |
Financing Receivables, 30 to 89 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,997 | 2,295 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,936 | 2,229 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 21 | 28 | |
Financing Receivables, 30 to 89 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | 40 | 38 | |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,877 | 2,135 | |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Credit cards | |||
Financing Receivable, Past Due Amount | |||
Total past due | 1,852 | 2,113 | |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Consumer installment loans | |||
Financing Receivable, Past Due Amount | |||
Total past due | 7 | 5 | |
Financial Asset, Equal to or Greater than 90 Days Past Due [Member] | Commercial credit products | |||
Financing Receivable, Past Due Amount | |||
Total past due | $ 18 | $ 17 | |
[1] | Excludes PCI loan receivables. |
Loan Receivables and Allowanc_6
Loan Receivables and Allowance for Loan Losses - Loans Entered into a Loan Modification Program (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | $ 852 | $ 889 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total loans entered into a modification program | 849 | 886 |
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 | $ 3 | $ 3 |
Loan Receivables and Allowanc_7
Loan Receivables and Allowance for Loan Losses - Classified as TDRs (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | $ 1,150 | $ 1,207 |
Related allowance | (552) | (548) |
Net recorded investment | 598 | 659 |
Unpaid principal balance | 1,023 | 1,090 |
Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total recorded investment | 1,146 | 1,203 |
Related allowance | (550) | (546) |
Net recorded investment | 596 | 657 |
Unpaid principal balance | 1,019 | 1,086 |
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 | 4 | 4 |
Related allowance | (2) | (2) |
Net recorded investment | 2 | 2 |
Unpaid principal balance | $ 4 | $ 4 |
Loan Receivables and Allowanc_8
Loan Receivables and Allowance for Loan Losses - Financial Effects of TDRs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | $ 45 | $ 49 | $ 48 |
Interest income that would have been recorded with original terms | 269 | 267 | 222 |
Average recorded investment | 1,115 | 1,117 | 965 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 45 | 49 | 48 |
Interest income that would have been recorded with original terms | 268 | 266 | 220 |
Average recorded investment | 1,111 | 1,112 | 960 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest income recognized during period when loans were impaired | 0 | 0 | 0 |
Interest income that would have been recorded with original terms | 0 | 0 | 0 |
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 | 0 |
Interest income that would have been recorded with original terms | 1 | 1 | 2 |
Average recorded investment | $ 4 | $ 5 | $ 5 |
Loan Receivables and Allowanc_9
Loan Receivables and Allowance for Loan Losses - Payment Defaults (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)contract | Dec. 31, 2018USD ($)contract | Dec. 31, 2017USD ($)contract | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | contract | 39,347 | 39,052 | 40,426 |
Loans defaulted | $ | $ 99 | $ 92 | $ 91 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | contract | 39,233 | 38,976 | 40,316 |
Loans defaulted | $ | $ 98 | $ 91 | $ 90 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | contract | 0 | 0 | 0 |
Loans defaulted | $ | $ 0 | $ 0 | $ 0 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts defaulted | contract | 114 | 76 | 110 |
Loans defaulted | $ | $ 1 | $ 1 | $ 1 |
Loan Receivables and Allowan_10
Loan Receivables and Allowance for Loan Losses - Credit Quality Indicators (Details) | Dec. 31, 2019 | Dec. 31, 2018 |
661 or higher | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 74.00% | 74.00% |
661 or higher | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 76.00% | 80.00% |
661 or higher | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 90.00% | 90.00% |
601 to 660 | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 18.00% | 18.00% |
601 to 660 | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 17.00% | 14.00% |
601 to 660 | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 5.00% | 5.00% |
600 or less | Credit cards | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 8.00% | 8.00% |
600 or less | Consumer installment loans | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 7.00% | 6.00% |
600 or less | Commercial credit products | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage of class of loan receivable | 5.00% | 5.00% |
Loan Receivables and Allowan_11
Loan Receivables and Allowance for Loan Losses - Interest Income by Product (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 18,705 | $ 17,644 | $ 16,219 |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 18,384 | 17,342 | 15,941 |
Consumer installment loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 182 | 156 | 137 |
Commercial credit products | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | 137 | 144 | 139 |
Other | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Interest and fees on loans | $ 2 | $ 2 | $ 2 |
Loan Receivables and Allowan_12
Loan Receivables and Allowance for Loan Losses - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from Sale of Loans Receivable | $ 8,203 | $ 0 | $ 0 |
Maximum maturity period for loans in permanent modification program | 60 months | ||
Percentage of loan receivable with no FICO score | 0.30% | 0.50% | |
Credit cards | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unused Commitments to Extend Credit | $ 419,000 | $ 418,000 | |
Walmart [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Proceeds from Sale of Loans Receivable | $ 8,200 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Variable Interest Entity [Line Items] | |||||
Loan receivables, net | $ 81,613 | $ 86,712 | |||
Other assets | 2,087 | 2,461 | |||
Total assets | 104,826 | 106,792 | |||
Total liabilities | 89,738 | 92,114 | |||
Allowance for loan losses | 5,602 | 6,427 | $ 5,574 | $ 4,344 | |
Loan receivable, before allowance for losses | [1],[2] | 87,215 | 93,139 | ||
Interest and fees on loans (Note 4) | 18,705 | 17,644 | 16,219 | ||
Provision for loan losses (Note 4) | 4,180 | 5,545 | 5,296 | ||
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Interest on borrowings of consolidated securitization entities | 358 | 344 | 263 | ||
Loan receivables, net | [3] | 27,217 | 26,454 | ||
Other assets | [4] | 68 | 813 | ||
Total assets | 27,285 | 27,267 | |||
Borrowings | [5] | 10,412 | 14,439 | ||
Other liabilities | 32 | 36 | |||
Total liabilities | 10,444 | 14,475 | |||
Allowance for loan losses | 1,600 | 1,700 | |||
Loan receivable, before allowance for losses | 28,817 | 28,170 | |||
Interest and fees on loans (Note 4) | 5,200 | 5,000 | 4,200 | ||
Provision for loan losses (Note 4) | 1,100 | 1,500 | $ 1,300 | ||
Other Assets | Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Restricted cash and cash equivalents | $ 62 | $ 803 | |||
[1] | At December 31, 2019 and 2018 , loan receivables included deferred costs, net of deferred income, of $140 million and $105 million , respectively. | ||||
[2] | Total loan receivables include $28.8 billion and $28.2 billion of restricted loans of consolidated securitization entities at December 31, 2019 and 2018 , respectively. See Note 5. Variable Interest Entities | ||||
[3] | Includes $1.6 billion and $1.7 billion of related allowance for loan losses resulting in gross restricted loans of $28.8 billion and $28.2 billion at December 31, 2019 and 2018 , respectively. | ||||
[4] | Includes $62 million and $803 million of segregated funds held by the VIEs at December 31, 2019 and 2018 | ||||
[5] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||
Interest and fees on loans | $ 18,705 | $ 17,644 | $ 16,219 |
Provision charged to operations | 4,180 | 5,545 | 5,296 |
Variable Interest Entity, Primary Beneficiary | |||
Variable Interest Entity [Line Items] | |||
Interest and fees on loans | 5,200 | 5,000 | 4,200 |
Provision charged to operations | 1,100 | 1,500 | 1,300 |
Interest on borrowings of consolidated securitization entities | $ 358 | $ 344 | $ 263 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets- Schedule of Goodwill (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 1,024 | $ 991 |
Acquisitions | 54 | 33 |
Ending balance | $ 1,078 | $ 1,024 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,610 | $ 2,192 |
Accumulated amortization | (1,345) | (1,055) |
Net | 1,265 | 1,137 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 1,749 | 1,630 |
Accumulated amortization | (952) | (803) |
Net | 797 | 827 |
Capitalized software and other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 861 | 562 |
Accumulated amortization | (393) | (252) |
Net | $ 468 | $ 310 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 436 | ||
Customer-related | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired | $ 130 | $ 406 | |
Weighted average useful life of finite-lived intangible assets acquired | 7 years | 9 years | |
Marketing Expense | Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 133 | $ 125 | $ 112 |
Other Expense | Finite-Lived Intangible Assets, Excluding Retail Partner Contracts | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 168 | $ 115 | $ 84 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets- Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Millions | Dec. 31, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Amortization expense, 2020 | $ 290 |
Amortization expense, 2021 | 240 |
Amortization expense, 2022 | 194 |
Amortization expense, 2023 | 154 |
Amortization expense, 2024 | $ 119 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Banking and Thrift [Abstract] | |||
Interest-bearing deposits, amount | $ 64,877 | $ 63,738 | |
Average Rate Domestic Deposits | [1] | 2.40% | 2.00% |
Non-interest-bearing deposits, amount | $ 277 | $ 281 | |
Total deposits | $ 65,154 | $ 64,019 | |
[1] | Based on interest expense for the years ended December 31, 2019 and 2018 |
Deposits - Maturity Schedule (D
Deposits - Maturity Schedule (Details) $ in Millions | Dec. 31, 2019USD ($) |
Banking and Thrift [Abstract] | |
2019 | $ 28,780 |
2020 | 5,866 |
2021 | 3,093 |
2022 | 1,346 |
2023 | 2,277 |
Thereafter | $ 356 |
Deposits - Narrative (Details)
Deposits - Narrative (Details) - USD ($) $ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Compliance with Banking Regulations [Line Items] | ||
Deposits, Savings Deposits | $ 18.3 | |
Time Deposits, at or Above FDIC Insurance Limit | 8.5 | $ 7.1 |
Program Arranger | ||
Compliance with Banking Regulations [Line Items] | ||
Broker network deposit sweeps | 3.8 | |
Demand deposits | ||
Compliance with Banking Regulations [Line Items] | ||
Demand deposits with no defined maturity | $ 19.4 |
Borrowings - Borrowings Schedul
Borrowings - Borrowings Schedule (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Amount | |||
Total borrowings | [1] | $ 19,866 | $ 23,996 |
Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 9,454 | 9,557 |
Average rate | |||
Weighted average interest rate | 3.75% | ||
Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 7,211 | 7,318 |
Average rate | |||
Weighted average interest rate | 3.94% | ||
Floating Senior Secured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 3.13% | ||
Amount | |||
Unsecured debt | [1] | $ 250 | 250 |
Average rate | |||
Weighted average interest rate | 3.13% | ||
Variable Interest Entity, Primary Beneficiary | |||
Amount | |||
Borrowings of consolidated securitization entities | [1] | $ 10,412 | 14,439 |
Average rate | |||
Weighted average interest rate | 2.64% | ||
Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Amount | |||
Borrowings of consolidated securitization entities | [1] | $ 7,512 | 8,664 |
Average rate | |||
Weighted average interest rate | 2.71% | ||
Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Amount | |||
Borrowings of consolidated securitization entities | [1] | $ 2,900 | 5,775 |
Average rate | |||
Weighted average interest rate | 2.48% | ||
Minimum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 2.70% | ||
Minimum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 1.93% | ||
Minimum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 2.33% | ||
Maximum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 5.15% | ||
Maximum | Variable Interest Entity, Primary Beneficiary | Fixed Securitized Borrowings | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 3.87% | ||
Maximum | Variable Interest Entity, Primary Beneficiary | Floating Securitized Borrowings | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 2.65% | ||
Subsidiaries [Member] | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Amount | |||
Unsecured debt | [1] | $ 1,493 | 1,490 |
Average rate | |||
Weighted average interest rate | 3.33% | ||
Subsidiaries [Member] | Floating Senior Secured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 2.59% | ||
Amount | |||
Unsecured debt | [1] | $ 500 | $ 499 |
Average rate | |||
Weighted average interest rate | 2.59% | ||
Subsidiaries [Member] | Minimum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 3.00% | ||
Subsidiaries [Member] | Maximum | Fixed Senior Unsecured Notes | Senior unsecured notes | |||
Debt Instrument, Interest Rate, Stated Percentage [Abstract] | |||
Stated interest rate | 3.65% | ||
[1] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. |
Borrowings - Borrowings Maturit
Borrowings - Borrowings Maturity Schedule (Details) $ in Millions | Dec. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | |
2020 | $ 4,208 |
2021 | 5,659 |
2022 | 4,350 |
2023 | 708 |
2024 | 1,850 |
Thereafter | $ 3,150 |
Borrowings Borrowings - Senior
Borrowings Borrowings - Senior Unsecured (Details) - Subsidiaries [Member] - Senior unsecured notes - USD ($) $ in Millions | Jul. 25, 2019 | Mar. 19, 2019 |
Fixed Rate Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 600 | |
Stated interest rate | 4.375% | |
Fixed Rate Senior Notes Due 2029 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 650 | |
Stated interest rate | 5.15% | |
Fixed Rate Senior Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 750 | |
Stated interest rate | 2.85% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) $ in Billions | Dec. 31, 2019USD ($) |
Variable Interest Entity, Primary Beneficiary | |
Debt Instrument [Line Items] | |
LIne of Credit Facility, Remaining Borrowing Capacity | $ 5.6 |
Revolving Credit Facility [Member] | Unsecured Debt | |
Debt Instrument [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 0.5 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring Fair Value Measurements (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [1],[2] | $ 36 | $ 28 |
Total | [1] | 5,947 | 6,090 |
Business Combination, Contingent Consideration, Liability | [1] | 13 | 26 |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | [1] | 13 | 26 |
Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 15 | 15 |
Total | 15 | 15 | |
Business Combination, Contingent Consideration, Liability | 0 | 0 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 0 | 0 |
Total | 5,866 | 6,012 | |
Business Combination, Contingent Consideration, Liability | 0 | 0 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 0 | 0 | |
Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other assets | [2] | 21 | 13 |
Total | 66 | 63 | |
Business Combination, Contingent Consideration, Liability | 13 | 26 | |
Financial and Nonfinancial Liabilities, Fair Value Disclosure | 13 | 26 | |
U.S. Government and federal agency | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,469 | 2,888 | |
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 | [1] | 2,469 | 2,888 |
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 | 2,469 | 2,888 | |
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 | 45 | 48 | |
State and municipal | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 45 | 48 |
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 | 45 | 48 | |
Residential mortgage-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [3] | 1,026 | 1,139 |
Residential mortgage-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 1,026 | 1,139 |
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 | 1,026 | 1,139 | |
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 | |
Asset-backed | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [4] | 2,371 | 1,985 |
Asset-backed | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 2,371 | 1,985 |
Asset-backed | Fair Value, Measurements, Recurring | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 0 | 0 | |
Asset-backed | Fair Value, Measurements, Recurring | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | 2,371 | 1,985 | |
Asset-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 debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 0 | 2 | |
U.S. corporate debt | Fair Value, Measurements, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | [1] | 2 | |
U.S. corporate debt | 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 debt | 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 debt | Fair Value, Measurements, Recurring | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt securities | $ 2 | ||
[1] | For the years ended December 31, 2019 and 2018 , there were no securities transferred between levels. | ||
[2] | Other assets primarily relate to equity investments measured at fair value. | ||
[3] | All of our residential mortgage-backed securities have been issued by government-sponsored entities and are collateralized by U.S. mortgages. At December 31, 2019 and 2018 , $351 million and $313 million of residential mortgage-backed securities, respectively, are pledged by the Bank as collateral to the Federal Reserve to secure Federal Reserve Discount Window advances. | ||
[4] | All of our asset-backed securities are collateralized by credit card loans. |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Level 3 Instruments (Details) $ in Millions | Dec. 31, 2019USD ($) |
Revenue milestone minimum amount [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low | $ 0 |
Revenue milestone maximum amount [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High | $ 129 |
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, 2019 | Dec. 31, 2018 | |
Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | $ 12,147 | $ 9,396 |
Other assets | [1],[2] | 500 | 980 |
Loan receivables, net | [3] | 81,613 | 86,712 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 725 | |
Deposits | 65,154 | 64,019 | |
Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 12,147 | 9,396 |
Other assets | [1],[2] | 500 | 980 |
Loan receivables, net | [3] | 90,941 | 95,305 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 726 | |
Deposits | 65,544 | 63,942 | |
Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 10,799 | 9,396 |
Other assets | [1],[2] | 500 | 980 |
Loan receivables, net | [3] | 0 | 0 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 0 | |
Deposits | 0 | 0 | |
Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 1,348 | 0 |
Other assets | [1],[2] | 0 | 0 |
Loan receivables, net | [3] | 0 | 0 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 0 | |
Deposits | 65,544 | 63,942 | |
Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cash and equivalents | [1] | 0 | 0 |
Other assets | [1],[2] | 0 | 0 |
Loan receivables, net | [3] | 90,941 | 95,305 |
Loans Held-for-sale, Fair Value Disclosure | [3] | 726 | |
Deposits | 0 | 0 | |
Variable Interest Entity, Primary Beneficiary | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 10,412 | 14,439 | |
Variable Interest Entity, Primary Beneficiary | Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 10,513 | 14,400 | |
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 | 7,613 | 8,626 | |
Variable Interest Entity, Primary Beneficiary | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Borrowings of consolidated securitization entities | 2,900 | 5,774 | |
Senior unsecured notes | Carrying Value | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior unsecured notes | 9,454 | 9,557 | |
Senior unsecured notes | Total | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior unsecured notes | 9,924 | 9,062 | |
Senior unsecured notes | Level 1 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior unsecured notes | 0 | 0 | |
Senior unsecured notes | Level 2 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior unsecured notes | 9,924 | 9,062 | |
Senior unsecured notes | Level 3 | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior unsecured notes | $ 0 | $ 0 | |
[1] | For cash and equivalents and restricted cash and equivalents, carrying value approximates fair value due to the liquid nature and short maturity of these instruments. | ||
[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 in the event of a 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 Adequa_3
Regulatory and Capital Adequacy (Details) - Basel III [Member] - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | |||
Capital conservation buffer | 2.50% | 1.875% | |
Total risk-based capital | |||
Actual | $ 14,211 | $ 14,013 | |
Actual (percent) | [1] | 16.30% | 15.30% |
Minimum for capital adequacy purposes | $ 6,984 | $ 7,339 | |
Minimum for capital adequacy purposes (percent) | [2] | 8.00% | 8.00% |
Tier 1 risk-based capital | |||
Actual | $ 13,064 | $ 12,801 | |
Actual (percent) | [1] | 15.00% | 14.00% |
Minimum for capital adequacy purposes | $ 5,238 | $ 5,505 | |
Minimum for capital adequacy purposes (percent) | [2] | 6.00% | 6.00% |
Tier 1 leverage | |||
Actual | $ 13,064 | $ 12,801 | |
Actual (percent) | [1] | 12.60% | 12.30% |
Minimum for capital adequacy purposes | $ 4,161 | $ 4,157 | |
Minimum for capital adequacy purposes (percent) | [2] | 4.00% | 4.00% |
Common equity Tier 1 capital | |||
Actual | $ 12,330 | $ 12,801 | |
Actual (percent) | [1] | 14.10% | 14.00% |
Minimum for capital adequacy purposes | $ 3,929 | $ 4,128 | |
Minimum for capital adequacy purposes (percent) | [2] | 4.50% | 4.50% |
Subsidiaries [Member] | |||
Total risk-based capital | |||
Actual | $ 11,911 | $ 12,258 | |
Actual (percent) | [1] | 15.60% | 15.40% |
Minimum for capital adequacy purposes | $ 6,094 | $ 6,348 | |
Minimum for capital adequacy purposes (percent) | [2] | 8.00% | 8.00% |
Minimum to be well-capitalized under prompt corrective action provisions | $ 7,618 | $ 7,934 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 10.00% | 10.00% | |
Tier 1 risk-based capital | |||
Actual | $ 10,907 | $ 11,207 | |
Actual (percent) | [1] | 14.30% | 14.10% |
Minimum for capital adequacy purposes | $ 4,571 | $ 4,761 | |
Minimum for capital adequacy purposes (percent) | [2] | 6.00% | 6.00% |
Minimum to be well-capitalized under prompt corrective action provisions | $ 6,094 | $ 6,348 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 8.00% | 8.00% | |
Tier 1 leverage | |||
Actual | $ 10,907 | $ 11,207 | |
Actual (percent) | [1] | 11.90% | 12.40% |
Minimum for capital adequacy purposes | $ 3,671 | $ 3,612 | |
Minimum for capital adequacy purposes (percent) | [2] | 4.00% | 4.00% |
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,589 | $ 4,515 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 5.00% | 5.00% | |
Common equity Tier 1 capital | |||
Actual | $ 10,907 | $ 11,207 | |
Actual (percent) | [1] | 14.30% | 14.10% |
Minimum for capital adequacy purposes | $ 3,428 | $ 3,570 | |
Minimum for capital adequacy purposes (percent) | [2] | 4.50% | 4.50% |
Minimum to be well-capitalized under prompt corrective action provisions | $ 4,952 | $ 5,157 | |
Minimum to be well-capitalized under prompt corrective action provisions (percent) | 6.50% | 6.50% | |
[1] | Capital ratios are calculated based on the Basel III Standardized Approach rules. | ||
[2] | At December 31, 2019 and 2018, Synchrony Financial and the Bank also must maintain a capital conservation buffer of common equity Tier 1 capital in excess of minimum risk-based capital ratios by at least 2.5 percentage points and 1.875 percentage points, respectively, to avoid limits on capital distributions and certain discretionary bonus payments to executive officers and similar employees. |
Employee Benefit Plans- Narrati
Employee Benefit Plans- Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Employer contribution, percent of eligible compensation | 3.00% | ||
Employer matching contribution of eligible compensation | 4.00% | ||
Defined Contribution Plan, Cost | $ 69 | $ 74 | $ 76 |
Other Labor-related Expenses | 119 | 117 | $ 103 |
General Electric | Other Liabilities | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Reimbursement obligations | $ 210 | $ 176 |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net earnings | $ 731 | $ 1,056 | $ 853 | $ 1,107 | $ 783 | $ 671 | $ 696 | $ 640 | $ 3,747 | $ 2,790 | $ 1,935 |
Weighted average common shares outstanding, basic (in shares) | 670.2 | 742.3 | 795.6 | ||||||||
Effect of dilutive securities (in shares) | 3.3 | 4.6 | 4.1 | ||||||||
Weighted average common shares outstanding, dilutive (in shares) | 673.5 | 746.9 | 799.7 | ||||||||
Earnings per basic common share (in usd per share) | $ 1.15 | $ 1.60 | $ 1.25 | $ 1.57 | $ 1.09 | $ 0.91 | $ 0.93 | $ 0.84 | $ 5.59 | $ 3.76 | $ 2.43 |
Earnings per diluted common share (in usd per share) | $ 1.15 | $ 1.60 | $ 1.24 | $ 1.56 | $ 1.09 | $ 0.91 | $ 0.92 | $ 0.83 | $ 5.56 | $ 3.74 | $ 2.42 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount | 3 | 4 | 3 |
Equity and Other Stock Relate_3
Equity and Other Stock Related Information Equity and Other Stock Related Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | May 09, 2019 | ||
Subsidiary, Sale of Stock [Line Items] | |||||
Preferred Stock, Shares Outstanding | 750,000 | ||||
Preferred Stock, Value, Issued | [1] | $ 734 | $ 0 | ||
Common Stock, Dividends, Per Share, Declared | $ 0.86 | $ 0.72 | $ 0.56 | ||
Dividends, Common Stock, Cash | $ 581 | $ 534 | $ 446 | ||
Preferred Stock, Value, Issued | $ 750 | ||||
Treasury Stock, Shares, Acquired | 106,000,000 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 3,618 | 1,868 | $ 1,497 | ||
Restricted Stock Units (RSUs) | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Conversion ratio to common stock | 1 | ||||
2014 Long-Term Incentive Plan [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares of common stock available for grant | 43,600,000 | ||||
Unrecognized compensation cost related to non-vested RSUs and Options | $ 99 | ||||
Weighted average amortization period | 2 years 3 months 18 days | ||||
2014 Long-Term Incentive Plan [Member] | Restricted Stock Units (RSUs) | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
RSUs issued and outstanding (in shares) | 5,100,000 | ||||
2014 Long-Term Incentive Plan [Member] | Restricted Stock Units (RSUs) | Minimum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | ||||
2014 Long-Term Incentive Plan [Member] | Restricted Stock Units (RSUs) | Maximum | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 5 years | ||||
2014 Long-Term Incentive Plan [Member] | Employee Stock Option | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock options issued and outstanding | 7,100,000 | ||||
Share Repurchase Program Through June 30, 2020 [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $ 4,000 | ||||
Series A Preferred Stock | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Preferred Stock, Dividend Rate, Percentage | [1] | 5.625% | |||
Preferred Stock, Redemption Price Per Share | [1] | $ 1,000 | |||
Preferred Stock, Shares Outstanding | [1] | 750,000 | |||
Preferred Stock, Value, Issued | [1] | $ 734 | $ 0 | ||
Preferred Stock, Value, Issued | $ 750 | ||||
[1] | Issued as depositary shares, each representing a 1/40th interest in a share of the corresponding series of non-cumulative perpetual preferred stock. Dividends are payable quarterly on February 15, May 15, August 15 and November 15 at a fixed rate, in each case when, as and if declared by the Board of Directors. |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Before Provision For Income Taxes | |||||||||||
U.S. | $ 4,870 | $ 3,628 | $ 3,334 | ||||||||
Non-U.S. | 17 | 16 | (10) | ||||||||
Earnings before benefit from income taxes | $ 921 | $ 1,375 | $ 1,129 | $ 1,462 | $ 1,012 | $ 893 | $ 892 | $ 847 | $ 4,887 | $ 3,644 | $ 3,324 |
Income Taxes- Significant Compo
Income Taxes- Significant Components of Income Tax Provision (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current provision for income taxes | |||||||||||
U.S. Federal | $ 949 | $ 775 | $ 900 | ||||||||
U.S. state and local | 167 | 115 | 92 | ||||||||
Non-U.S. | 1 | 17 | 12 | ||||||||
Total current provision for income taxes | 1,117 | 907 | 1,004 | ||||||||
Deferred provision (benefit) for income taxes | |||||||||||
U.S. Federal | 19 | (55) | 367 | ||||||||
U.S. state and local | 2 | (7) | 20 | ||||||||
Non-U.S. | 2 | 9 | (2) | ||||||||
Deferred provision (benefit) for income taxes | 23 | (53) | 385 | ||||||||
Total provision for income taxes | $ 190 | $ 319 | $ 276 | $ 355 | $ 229 | $ 222 | $ 196 | $ 207 | $ 1,140 | $ 854 | $ 1,389 |
Income Taxes- Effective Income
Income Taxes- Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation | |||
U.S. federal statutory income tax rate | 21.00% | 21.00% | 35.00% |
U.S. state and local income taxes, net of federal benefit | 2.70% | 2.40% | 2.20% |
Tax Act enactment | 0.00% | 0.00% | 4.80% |
All other, net | (0.40%) | 0.00% | (0.20%) |
Effective tax rate | 23.30% | 23.40% | 41.80% |
Income Taxes- Deferred Tax Asse
Income Taxes- Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Allowance for loan losses | $ 1,399 | $ 1,588 |
Compensation and employee benefits | 106 | 110 |
Other assets | 151 | 113 |
Total deferred income tax assets before valuation allowance | 1,656 | 1,811 |
Valuation allowance | 0 | 0 |
Total deferred income tax assets | 1,656 | 1,811 |
Liabilities | ||
Original issue discount | (998) | (1,198) |
Goodwill and identifiable intangibles | (198) | (187) |
Other liabilities | (194) | (133) |
Total deferred income tax liabilities | (1,390) | (1,518) |
Net deferred income tax assets | $ 266 | $ 293 |
Income Taxes- Narrative (Detail
Income Taxes- Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2017 | |
Unrecognized Tax Benefits [Line Items] | |||
Tax Cuts and Jobs Act, Change in Tax Rate, Income Tax Expense (Benefit) | $ 160 | ||
Decrease in unrecognized tax benefits is reasonably possible | $ 79 | ||
Unrecognized tax benefits that would impact effective tax rate | 28 | ||
Unrecognized tax benefits | 251 | 255 | $ 255 |
State and Local Jurisdiction | |||
Unrecognized Tax Benefits [Line Items] | |||
Unrecognized tax benefits | $ 29 | $ 26 |
Income Taxes- Unrecognized Tax
Income Taxes- Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 251 | $ 255 |
Additions: | ||
Tax positions of the current year | 83 | 85 |
Tax positions of prior years | 5 | 3 |
Reductions: | ||
Prior year tax positions | (59) | (64) |
Settlements with tax authorities | (2) | (3) |
Expiration of the statute of limitation | (23) | (25) |
Ending balance | 255 | 251 |
Portion of balance that, if recognized, would impact the effective income tax rate | $ 172 | $ 164 |
Parent Company Financial Info_3
Parent Company Financial Information- Additional Information (Details) $ in Billions | Dec. 31, 2019USD ($) |
Subsidiaries | |
Condensed Financial Statements, Captions [Line Items] | |
Restricted Assets | $ 12.4 |
Parent Company Financial Info_4
Parent Company Financial Information- Condensed Statements of Earnings (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements, Captions [Line Items] | |||||||||||
Interest and Dividend Income, Cash and Securities, Operating | $ 385 | $ 344 | $ 188 | ||||||||
Total interest income | $ 4,585 | $ 4,981 | $ 4,738 | $ 4,786 | $ 4,876 | $ 4,694 | $ 4,174 | $ 4,244 | 19,090 | 17,988 | 16,407 |
Interest on senior unsecured notes | 367 | 340 | 280 | ||||||||
Total interest expense | 556 | 592 | 583 | 560 | 543 | 488 | 437 | 402 | 2,291 | 1,870 | 1,391 |
Net interest income | 4,029 | 4,389 | 4,155 | 4,226 | 4,333 | 4,206 | 3,737 | 3,842 | 16,799 | 16,118 | 15,016 |
Other income | 101 | 39 | 67 | ||||||||
Earnings before benefit from income taxes | 921 | 1,375 | 1,129 | 1,462 | 1,012 | 893 | 892 | 847 | 4,887 | 3,644 | 3,324 |
Provision for income taxes (Note 14) | 190 | 319 | 276 | 355 | 229 | 222 | 196 | 207 | 1,140 | 854 | 1,389 |
Net earnings | $ 731 | $ 1,056 | $ 853 | $ 1,107 | $ 783 | $ 671 | $ 696 | $ 640 | 3,747 | 2,790 | 1,935 |
Comprehensive income | 3,764 | 2,792 | 1,924 | ||||||||
Parent Company | |||||||||||
Condensed Income Statements, Captions [Line Items] | |||||||||||
Interest income from subsidiaries | 207 | 220 | 125 | ||||||||
Interest and Dividend Income, Cash and Securities, Operating | 12 | 20 | 23 | ||||||||
Total interest income | 219 | 240 | 148 | ||||||||
Interest on senior unsecured notes | 300 | 287 | 268 | ||||||||
Total interest expense | 300 | 287 | 268 | ||||||||
Net interest income | (81) | (47) | (120) | ||||||||
Dividends from bank subsidiaries | 3,900 | 950 | 1,040 | ||||||||
Dividends from nonbank subsidiaries | 309 | 318 | 1,133 | ||||||||
Other income | 144 | 115 | 91 | ||||||||
Other expense | 162 | 120 | 115 | ||||||||
Earnings before benefit from income taxes | 4,110 | 1,216 | 2,029 | ||||||||
Provision for income taxes (Note 14) | (19) | (8) | (89) | ||||||||
Equity in undistributed net earnings of subsidiaries | (382) | 1,566 | (183) | ||||||||
Net earnings | 3,747 | 2,790 | 1,935 | ||||||||
Comprehensive income | $ 3,764 | $ 2,792 | $ 1,924 |
Parent Company Financial Info_5
Parent Company Financial Information- Condensed Statements of Financial Position (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Assets | |||||
Cash and equivalents | $ 12,147 | $ 9,396 | $ 11,602 | ||
Investment securities | 5,911 | 6,062 | |||
Goodwill | 1,078 | 1,024 | 991 | ||
Other assets | 2,087 | 2,461 | |||
Total assets | 104,826 | 106,792 | |||
Liabilities and Equity | |||||
Accrued expenses and other liabilities | 4,718 | 4,099 | |||
Total liabilities | 89,738 | 92,114 | |||
Equity: | |||||
Total equity | 15,088 | 14,678 | $ 14,234 | $ 14,196 | |
Total liabilities and equity | 104,826 | 106,792 | |||
Senior Notes | |||||
Liabilities and Equity | |||||
Unsecured debt | [1] | 9,454 | 9,557 | ||
Parent Company | |||||
Assets | |||||
Cash and equivalents | 4,491 | 3,356 | |||
Investment securities | 502 | 869 | |||
Investments in amounts due from subsidiaries | [2] | 18,196 | 18,566 | ||
Goodwill | 17 | 17 | |||
Other assets | 89 | 89 | |||
Total assets | 23,295 | 22,897 | |||
Liabilities and Equity | |||||
Amounts due to subsidiaries | 220 | 184 | |||
Accrued expenses and other liabilities | 526 | 467 | |||
Total liabilities | 8,207 | 8,219 | |||
Equity: | |||||
Total equity | 15,088 | 14,678 | |||
Total liabilities and equity | 23,295 | 22,897 | |||
Parent Company | Senior Notes | |||||
Liabilities and Equity | |||||
Unsecured debt | $ 7,461 | $ 7,568 | |||
[1] | The amounts presented above for outstanding borrowings include unamortized debt premiums, discounts and issuance costs. | ||||
[2] | Includes investments in and amounts due from bank subsidiaries of $12.9 billion and $13.1 billion at December 31, 2019 and 2018 , respectively. |
Parent Company Financial Info_6
Parent Company Financial Information- Condensed Statements of Financial Position- Additional Information (Details) - USD ($) $ in Billions | Dec. 31, 2019 | Dec. 31, 2018 |
Parent Company | ||
Condensed Balance Sheet Statements, Captions [Line Items] | ||
Investment in amounts due from bank subsidiaries | $ 12.9 | $ 13.1 |
Parent Company Financial Info_7
Parent Company Financial Information- Condensed Statements of Cash Flows (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows - operating activities | |||||||||||
Net earnings | $ 731 | $ 1,056 | $ 853 | $ 1,107 | $ 783 | $ 671 | $ 696 | $ 640 | $ 3,747 | $ 2,790 | $ 1,935 |
Adjustments to reconcile net earnings to cash provided from operating activities | |||||||||||
Deferred income taxes | 23 | (53) | 385 | ||||||||
(Increase) decrease in other assets | 93 | 81 | 144 | ||||||||
Increase (decrease) in accrued expenses and other liabilities | 363 | 356 | 210 | ||||||||
All other operating activities | 608 | 601 | 649 | ||||||||
Cash provided from (used for) operating activities | 8,990 | 9,342 | 8,575 | ||||||||
Cash flows - investing activities | |||||||||||
Purchases of debt securities | (7,856) | (7,271) | (3,159) | ||||||||
All other investing activities | (588) | (802) | (474) | ||||||||
Cash provided from (used for) investing activities | (261) | (19,036) | (9,542) | ||||||||
Cash flows - financing activities | |||||||||||
Proceeds from issuance of senior unsecured notes | 1,985 | 1,244 | 1,732 | ||||||||
Maturities and repayment of senior unsecured notes | (2,100) | 0 | (1,200) | ||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | 734 | 0 | 0 | ||||||||
Purchases of treasury stock | (3,618) | (1,868) | (1,497) | ||||||||
Dividends paid on common stock | (581) | (534) | (446) | ||||||||
All other financing activites | 37 | (34) | (5) | ||||||||
Cash provided from (used for) financing activities | (6,458) | 8,253 | 3,116 | ||||||||
Increase (decrease) in cash and equivalents, including restricted amounts | 2,271 | (1,441) | 2,149 | ||||||||
Cash and equivalents, including restricted amounts, at beginning of year | 10,376 | 11,817 | 10,376 | 11,817 | 9,668 | ||||||
Total cash and equivalents, including restricted amounts, at end of year | 12,647 | 10,376 | 12,647 | 10,376 | 11,817 | ||||||
Parent Company | |||||||||||
Cash flows - operating activities | |||||||||||
Net earnings | 3,747 | 2,790 | 1,935 | ||||||||
Adjustments to reconcile net earnings to cash provided from operating activities | |||||||||||
Deferred income taxes | (1) | 8 | (43) | ||||||||
(Increase) decrease in other assets | 14 | 106 | 18 | ||||||||
Increase (decrease) in accrued expenses and other liabilities | (15) | 6 | (38) | ||||||||
Equity in undistributed net earnings of subsidiaries | 382 | (1,566) | 183 | ||||||||
All other operating activities | 38 | 66 | 53 | ||||||||
Cash provided from (used for) operating activities | 4,165 | 1,410 | 2,108 | ||||||||
Cash flows - investing activities | |||||||||||
Net (increase) decrease in investments in and amounts due from subsidiaries | 210 | 1,687 | (947) | ||||||||
Maturity and sales of debt securities | 972 | 1,493 | 1,914 | ||||||||
Purchases of debt securities | (597) | (681) | (1,402) | ||||||||
All other investing activities | (100) | (94) | (45) | ||||||||
Cash provided from (used for) investing activities | 485 | 2,405 | (480) | ||||||||
Cash flows - financing activities | |||||||||||
Proceeds from issuance of senior unsecured notes | 1,985 | 0 | 991 | ||||||||
Maturities and repayment of senior unsecured notes | (2,100) | 0 | (1,200) | ||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | 734 | 0 | 0 | ||||||||
Purchases of treasury stock | (3,618) | (1,868) | (1,497) | ||||||||
Dividends paid on common stock | (581) | (534) | (446) | ||||||||
Increase (decrease) in amounts due to subsidiaries | 28 | (4) | 27 | ||||||||
All other financing activites | 37 | (28) | (2) | ||||||||
Cash provided from (used for) financing activities | (3,515) | (2,434) | (2,127) | ||||||||
Increase (decrease) in cash and equivalents, including restricted amounts | 1,135 | 1,381 | (499) | ||||||||
Cash and equivalents, including restricted amounts, at beginning of year | $ 3,356 | $ 1,975 | 3,356 | 1,975 | 2,474 | ||||||
Total cash and equivalents, including restricted amounts, at end of year | $ 4,491 | $ 3,356 | $ 4,491 | $ 3,356 | $ 1,975 |
Selected Quarterly Financial _3
Selected Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 4,585 | $ 4,981 | $ 4,738 | $ 4,786 | $ 4,876 | $ 4,694 | $ 4,174 | $ 4,244 | $ 19,090 | $ 17,988 | $ 16,407 |
Total interest expense | 556 | 592 | 583 | 560 | 543 | 488 | 437 | 402 | 2,291 | 1,870 | 1,391 |
Net interest income | 4,029 | 4,389 | 4,155 | 4,226 | 4,333 | 4,206 | 3,737 | 3,842 | 16,799 | 16,118 | 15,016 |
Earnings before benefit from income taxes | 921 | 1,375 | 1,129 | 1,462 | 1,012 | 893 | 892 | 847 | 4,887 | 3,644 | 3,324 |
Provision for income taxes | 190 | 319 | 276 | 355 | 229 | 222 | 196 | 207 | 1,140 | 854 | 1,389 |
Net earnings | $ 731 | $ 1,056 | $ 853 | $ 1,107 | $ 783 | $ 671 | $ 696 | $ 640 | $ 3,747 | $ 2,790 | $ 1,935 |
Earnings per share | |||||||||||
Basic (in usd per share) | $ 1.15 | $ 1.60 | $ 1.25 | $ 1.57 | $ 1.09 | $ 0.91 | $ 0.93 | $ 0.84 | $ 5.59 | $ 3.76 | $ 2.43 |
Diluted (in usd per share) | $ 1.15 | $ 1.60 | $ 1.24 | $ 1.56 | $ 1.09 | $ 0.91 | $ 0.92 | $ 0.83 | $ 5.56 | $ 3.74 | $ 2.42 |