Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Nov. 02, 2015 | |
Document Information [Line Items] | ||
Entity Registrant Name | SPRINGLEAF FINANCE CORP | |
Entity Central Index Key | 25,598 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 10,160,020 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Assets | |||
Cash and cash equivalents | $ 2,756 | $ 749 | |
Investment securities | 1,742 | 2,922 | |
Net finance receivables: | |||
Personal loans (includes loans of consolidated VIEs of $2.1 billion in 2015 and $1.9 billion in 2014) | 3,990 | 3,800 | |
SpringCastle Portfolio (includes loans of consolidated VIEs of $1.7 billion in 2015 and $2.0 billion in 2014) | 1,667 | 1,979 | |
Real estate loans | 547 | 625 | |
Retail sales finance | 27 | 48 | |
Net finance receivables | 6,231 | 6,452 | |
Allowance for finance receivable losses (includes allowance of consolidated VIEs of $131 million in 2015 and $72 million in 2014) | (191) | (174) | |
Net finance receivables, less allowance for finance receivable losses | 6,040 | 6,278 | |
Finance receivables held for sale | 797 | 205 | |
Note receivable from parent | 322 | 251 | |
Restricted cash and cash equivalents (includes restricted cash and cash equivalents of consolidated VIEs of $256 million in 2015 and $210 million in 2014) | 270 | 218 | |
Other assets | 455 | 474 | |
Total assets | 12,382 | 11,097 | |
Liabilities and Shareholder's Equity | |||
Long-term debt (includes debt of consolidated VIEs of $4.8 billion in 2015 and $3.6 billion in 2014) | 9,555 | [1] | 8,356 |
Insurance claims and policyholder liabilities | 467 | 446 | |
Deferred and accrued taxes | 146 | 159 | |
Other liabilities | 287 | 255 | |
Total liabilities | $ 10,455 | $ 9,216 | |
Commitments and contingent liabilities | |||
Shareholder's equity: | |||
Common stock, par value $.50 per share; 25,000,000 shares authorized, 10,160,020 shares issued and outstanding at September 30, 2015 and December 31, 2014 | $ 5 | $ 5 | |
Additional paid-in capital | 756 | 740 | |
Accumulated other comprehensive income (loss) | (11) | 3 | |
Retained earnings | 1,331 | 1,321 | |
Springleaf Finance Corporation shareholder’s equity | 2,081 | 2,069 | |
Non-controlling interests | (154) | (188) | |
Total shareholder’s equity | 1,927 | 1,881 | |
Total liabilities and shareholder’s equity | $ 12,382 | $ 11,097 | |
[1] | The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | ||
Personal loans | $ 3,990 | $ 3,800 | ||
SpringCastle Portfolio | 1,667 | 1,979 | ||
Allowance for finance receivable losses | 191 | 174 | ||
Finance receivables held for sale | 797 | 205 | ||
Restricted cash and cash equivalents | 270 | 218 | ||
Long-term debt | $ 9,555 | [1] | $ 8,356 | |
Common Stock, par value (dollars per share) | $ 0.50 | $ 0.50 | ||
Common Stock, shares authorized | 25,000,000 | 25,000,000 | ||
Common shares, shares issued | 10,160,020 | 10,160,020 | ||
Common shares, shares outstanding | 10,160,020 | 10,160,020 | ||
Consolidated VIEs | ||||
Personal loans | $ 2,100 | $ 1,900 | ||
SpringCastle Portfolio | 1,700 | 2,000 | ||
Allowance for finance receivable losses | 131 | 72 | ||
Finance receivables held for sale | 484 | 0 | ||
Restricted cash and cash equivalents | 256 | 210 | ||
Long-term debt | [2] | $ 4,771 | $ 3,630 | |
[1] | The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. | |||
[2] | As a result of our early adoption of ASU 2015-03 in June of 2015, we reclassified $14 million of debt issuance costs related to our long-term debt associated with our securitizations as of December 31, 2014, from other assets to long-term debt. |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Finance charges | $ 419 | $ 385 | $ 1,221 | $ 1,172 |
Finance receivables held for sale originated as held for investment | 4 | 47 | 13 | 54 |
Total interest income | 423 | 432 | 1,234 | 1,226 |
Interest expense | 171 | 172 | 500 | 526 |
Net interest income | 252 | 260 | 734 | 700 |
Provision for finance receivable losses | 82 | 93 | 247 | 274 |
Net interest income after provision for finance receivable losses | 170 | 167 | 487 | 426 |
Other revenues: | ||||
Insurance | 40 | 44 | 116 | 125 |
Investment | 11 | 12 | 43 | 32 |
Net loss on repurchases and repayments of debt | 0 | 0 | 0 | (7) |
Net gain on fair value adjustments on debt | 0 | 1 | 0 | 1 |
Net gain on sales of real estate loans and related trust assets | 0 | 617 | 0 | 707 |
Other | 4 | (11) | 8 | (3) |
Total other revenues | 55 | 663 | 167 | 855 |
Operating expenses: | ||||
Salaries and benefits | 86 | 85 | 264 | 249 |
Other operating expenses | 79 | 77 | 220 | 179 |
Insurance losses and loss adjustment expenses | 17 | 20 | 53 | 57 |
Total other expenses | 182 | 182 | 537 | 485 |
Income before provision for income taxes | 43 | 648 | 117 | 796 |
Provision for income taxes | 7 | 219 | 14 | 276 |
Net income | 36 | 429 | 103 | 520 |
Net income attributable to non-controlling interests | 31 | 23 | 93 | 23 |
Net income attributable to Springleaf Finance Corporation | $ 5 | $ 406 | $ 10 | $ 497 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 36 | $ 429 | $ 103 | $ 520 |
Net unrealized gains on: | ||||
Net unrealized gains (losses) on non-credit impaired investment securities | (3) | (4) | (8) | 15 |
Net unrealized gains on: | ||||
Net unrealized (gains) losses on non-credit impaired investment securities | 1 | 2 | 3 | (5) |
Other comprehensive income (loss), net of tax, before reclassification adjustments | (2) | (2) | (5) | 10 |
Reclassification adjustments included in net income: | ||||
Net realized gains on investment securities | (4) | (3) | (14) | (6) |
Income tax effect: | ||||
Net realized gains on investment securities | 2 | 1 | 5 | 2 |
Reclassification adjustments included in net income, net of tax | (2) | (2) | (9) | (4) |
Other comprehensive income (loss), net of tax | (4) | (4) | (14) | 6 |
Comprehensive income | 32 | 425 | 89 | 526 |
Comprehensive income attributable to non-controlling interests | 31 | 23 | 93 | 23 |
Comprehensive income (loss) attributable to Springleaf Finance Corporation | $ 1 | $ 402 | $ (4) | $ 503 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Springleaf Finance Corporation Shareholder’s Equity | Non-controlling Interests |
Beginning Balance at Dec. 31, 2013 | $ 1,328 | $ 5 | $ 422 | $ 28 | $ 873 | $ 1,328 | |
Common shares issued and outstanding | |||||||
Non-cash incentive compensation from Initial Stockholder | 0 | ||||||
Capital contributions from parent | 22 | 22 | 22 | ||||
Capital Contribution Of Capital Stock From Wholly Owned Subsidiary | 690 | 295 | 295 | $ 395 | |||
Share-based compensation expense, net of forfeitures | 1 | 1 | 1 | ||||
Distributions declared to joint venture partners | (9) | (9) | |||||
Available-for-sale securities | 6 | 6 | 6 | ||||
Net income | 520 | 497 | 497 | 23 | |||
Ending Balance at Sep. 30, 2014 | 2,558 | 5 | 740 | 34 | 1,370 | 2,149 | 409 |
Beginning Balance at Dec. 31, 2014 | 1,881 | 5 | 740 | 3 | 1,321 | 2,069 | (188) |
Common shares issued and outstanding | |||||||
Non-cash incentive compensation from Initial Stockholder | 15 | 15 | 15 | ||||
Share-based compensation expense, net of forfeitures | 1 | 1 | 1 | ||||
Distributions declared to joint venture partners | (59) | (59) | |||||
Available-for-sale securities | (14) | (14) | (14) | ||||
Net income | 103 | 10 | 10 | 93 | |||
Ending Balance at Sep. 30, 2015 | $ 1,927 | $ 5 | $ 756 | $ (11) | $ 1,331 | $ 2,081 | $ (154) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net income | $ 103 | $ 520 |
Reconciling adjustments: | ||
Provision for finance receivable losses | 247 | 274 |
Depreciation and amortization | 64 | 31 |
Deferred income tax charge (benefit) | (10) | 14 |
Non-cash incentive compensation from Initial Stockholder | 15 | 0 |
Net gain on fair value adjustments on debt | 0 | (1) |
Net gain on sales of real estate loans and related trust assets | 0 | (707) |
Net charge-offs on finance receivables held for sale | 0 | 11 |
Net loss on repurchases and repayments of debt | 0 | 7 |
Share-based compensation expense, net of forfeitures | 1 | 1 |
Other | (13) | 0 |
Cash flows due to changes in: | ||
Other assets and other liabilities | 23 | 62 |
Insurance claims and policyholder liabilities | 22 | 36 |
Taxes receivable and payable | (29) | (66) |
Accrued interest and finance charges | 0 | (11) |
Restricted cash and cash equivalents not reinvested | 0 | (3) |
Other, net | (1) | 0 |
Net cash provided by operating activities | 422 | 168 |
Cash flows from investing activities | ||
Finance receivables originated or purchased, net of deferred origination costs | (2,377) | (1,841) |
Principal collections on finance receivables | 1,825 | 1,908 |
Cash advances on intercompany notes receivables | (147) | 0 |
Principal collections on intercompany notes receivables | 77 | 0 |
Sales and principal collections on finance receivables held for sale originated as held for investment | 88 | 3,427 |
Available-for-sale investment securities purchased | (382) | (261) |
Trading investment securities purchased | (1,457) | (1,065) |
Available-for-sale investment securities called, sold, and matured | 408 | 209 |
Trading investment securities called, sold, and matured | 2,563 | 18 |
Change in restricted cash and cash equivalents | (46) | 5 |
Proceeds from sale of real estate owned | 12 | 51 |
Other, net | 1 | 4 |
Net cash provided by investing activities | 565 | 2,455 |
Cash flows from financing activities | ||
Proceeds from issuance of long-term debt, net of commissions | 1,929 | 672 |
Repayment of long-term debt | (850) | (1,764) |
Distributions to joint venture partners | (59) | (9) |
Capital contributions from parent | 0 | 22 |
Net cash provided by (used for) financing activities | 1,020 | (1,079) |
Net change in cash and cash equivalents | 2,007 | 1,544 |
Cash and cash equivalents at beginning of period | 749 | 375 |
Cash and cash equivalents at end of period | 2,756 | 1,919 |
Supplemental non-cash activities | ||
Transfer of finance receivables to real estate owned | 8 | 46 |
Transfer of finance receivables held for investment to finance receivables held for sale (prior to deducting allowance for finance receivable losses) | 608 | 6,810 |
Springleaf Finance, Inc. contribution of consolidated assets from Springleaf Acquisition Corporation’s capital stock to Springleaf Finance Corporation | 0 | 2,342 |
Springleaf Finance, Inc. contribution of consolidated liabilities from Springleaf Acquisition Corporation’s capital stock to Springleaf Finance Corporation | 0 | 1,652 |
Unsettled investment security purchases and sales | $ 40 | $ (28) |
Business and Basis of Presentat
Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Business and Basis of Presentation | Business and Basis of Presentation Springleaf Finance Corporation (“SFC” or, collectively with its subsidiaries, whether directly or indirectly owned, “Springleaf,” the “Company,” “we,” “us,” or “our”) is a wholly owned subsidiary of Springleaf Finance, Inc. (“SFI”). SFI is a wholly owned subsidiary of Springleaf Holdings, Inc. (“SHI”). At September 30, 2015 , Springleaf Financial Holdings, LLC (the “Initial Stockholder”) owned approximately 58% of SHI’s common stock. The Initial Stockholder is owned primarily by a private equity fund managed by an affiliate of Fortress Investment Group LLC (“Fortress”) and AIG Capital Corporation, a subsidiary of American International Group, Inc. (“AIG”). At September 30, 2015 , the economic interests of Fortress and AIG were 55% and 3% , respectively. SFC is a financial services holding company with subsidiaries engaged in the consumer finance and insurance businesses. BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we own a 47% equity interest), and variable interest entities (“VIEs”) in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“ 2014 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting. To conform to the 2015 presentation, we reclassified certain prior period items as a result of our early adoption of accounting standards update (“ASU”) 2015-03, Interest - Imputation of Interest (“ASU 2015-03”). See Note 3 for further information on the adoption of this ASU. Prior Period Revisions During the fourth quarter of 2014, we discovered that our personal loans and loans included in the SpringCastle Portfolio deemed to be troubled debt restructured (“TDR”) finance receivables were previously incorrectly excluded in the related disclosures of our finance receivables and allowance for finance receivable losses. The applicable prior period amounts have been corrected in Notes 4 and 5 in this report. During the fourth quarter of 2014, we discovered that our restricted cash and cash equivalents were overstated and other assets were understated by $15 million in our condensed consolidated balance sheets at September 30, 2014, as we incorrectly included escrow advances on our real estate loans held for sale in cash and cash equivalents. This error also resulted in our cash flows due to a decrease in restricted cash and cash equivalents not reinvested to be overstated and cash flows due to an increase in other assets and other liabilities to be overstated within the operating activities section of our condensed consolidated statements of cash flows for the nine months ended September 30, 2014. The affected amounts for the 2014 period have been corrected in our condensed consolidated statements of cash flows in this report. This classification error was not material to any previously issued financial statements. During the second quarter of 2015, we discovered that we had not charged-off certain bankrupt accounts in our SpringCastle Portfolio and we identified an error in the calculation of the allowance for our TDR personal loans. As a result of these findings, we recorded an out-of-period adjustment in the second quarter of 2015, which increased provision for finance receivable losses by $8 million and decreased provision for income taxes by $3 million . During the second quarter of 2015, we identified incorrect allocations of our total assets disclosure within the segment footnote. We have evaluated the impact of these errors and concluded that they were not material to any previously issued financial statements, however, we have corrected the previously disclosed periods in Note 16 of this report. We will also correct the prior period segment disclosures presented in our applicable quarterly and annual reports as follows: (dollars in millions) Consumer Real Other Assets * March 31, 2015 $ 5,070 $ 3,613 $ 1,832 December 31, 2014 4,462 3,666 555 September 30, 2014 4,651 3,720 705 June 30, 2014 4,406 6,561 1,058 December 31, 2013 4,200 8,512 611 * The revised amounts do not reflect the retrospective reclassifications of our debt issuance costs previously recorded in other assets to long-term debt, as a result of our early adoption of ASU 2015-03. During the third quarter of 2015, we discovered that our cash equivalents in certificates of deposit and commercial paper, which totaled $165 million at December 31, 2014, were incorrectly presented as a Level 1 investment, instead of a Level 2 investment in our disclosure of the fair value hierarchy of our financial instruments in our 2014 Annual Report on Form 10-K. The affected fair value amount has been corrected in Note 17 of this report. This presentation error was not material to any previously issued financial statements. |
Significant Transactions
Significant Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Significant Transactions [Abstract] | |
Significant Transactions | Significant Transactions SHI’S PENDING ACQUISITION OF ONEMAIN FINANCIAL On March 2, 2015, SHI entered into a Stock Purchase Agreement with CitiFinancial Credit Company to acquire OneMain Financial Holdings, LLC (formerly OneMain Financial Holdings, Inc.) (“OneMain”), for an aggregate purchase price of $4.25 billion , which we refer to in this report as the “Proposed Acquisition”. There can be no assurance that the Proposed Acquisition will close, or, if it does, when the actual closing will occur. SHI continues to evaluate its plans regarding the integration of OneMain with its remaining businesses including us. SHI’S EQUITY OFFERING On May 4, 2015 , SHI completed an offering of 27,864,525 shares of its common stock, consisting of 19,417,476 shares of common stock offered by SHI and 8,447,049 shares of common stock offered by the Initial Stockholder. SHI’s net proceeds from this sale were approximately $976 million , after deducting the underwriting discounts and commissions and additional offering-related expenses totaling $24 million . SHI intends to use the net proceeds of the offering, together with cash on hand, the proceeds from the sale of investment securities, and other funding options, to fund the Proposed Acquisition and/or for general corporate purposes, which may include debt repurchases and repayments, capital expenditures and other possible acquisitions. In connection with SHI’s initial public offering in October 2013, certain executives of Springleaf received a grant of incentive units in the Initial Stockholder. These incentive units are subject to their continued employment with the Company and provide benefits (in the form of distributions) in the event the Initial Stockholder makes distributions to one or more of its members that exceed certain specified amounts. In connection with the sale of SHI’s common stock by the Initial Stockholder, certain of the specified thresholds were satisfied. In accordance with Accounting Standards Codification Topic 710, Compensation-General, we recorded non-cash incentive compensation expense of $15 million in the second quarter of 2015 related to the incentive units. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Troubled Debt Restructurings In January of 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure , which clarifies when an in substance repossession or foreclosure occurs — that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The amendments in this ASU became effective prospectively for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. Debt Issuance Costs In April of 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest , which simplifies the presentation of debt issuance costs. Under this standard, debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of that note. The ASU also clarifies that discount, premium or debt issuance costs shall not be classified as a deferred charge or deferred credit. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued and must be applied retrospectively. We elected to early adopt this ASU as of June 30, 2015 and applied this ASU retrospectively. On June 30, 2015, we reclassified $32 million of debt issuance costs previously recorded in other assets to long-term debt. After retrospectively applying this new ASU, we also reclassified $29 million of debt issuance costs as of December 31, 2014 from other assets to long-term debt in our condensed consolidated balance sheet. We continue to report fees paid to access our conduit facilities in other assets. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. In August of 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest , to clarify that debt issuance costs associated with line-of-credit arrangements are to be deferred and amortized over the term of the arrangement. The amendment also acknowledged absence of authoritative guidance within previously issued ASU 2015-03 for debt issuance costs related to line-of-credit arrangements. The ASU is effective immediately. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements, as we were already in compliance with these amendments. Push Down Accounting In May of 2015, the FASB issued ASU 2015-08, Business Combinations-Pushdown Accounting , to remove Securities and Exchange Commission (the “SEC”) staff guidance on pushdown accounting from the Accounting Standards Codification. The SEC staff had previously rescinded its guidance with the issuance of Staff Accounting Bulletin No. 115 when the FASB issued its own pushdown accounting guidance in November 2014. The ASU is effective immediately. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. Plan Accounting In July of 2015, the FASB issued ASU 2015-12, Plan Accounting , to simplify certain aspects of employee benefit plan (“EBP”) accounting while satisfying the needs of users of financial statements, including plan participants. The new guidance simplifies the measurement of fully benefit-responsive investment contracts and disclosures about plan investments. It also allows an EBP with a fiscal year end that doesn’t coincide with the end of a calendar month to choose a simpler way of measuring its investments and investment-related accounts. The ASU is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We elected to early adopt this ASU as of September 30, 2015. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements, as we were already in compliance with these amendments. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a consistent revenue accounting model across industries. In August of 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , to defer the effective date of the new revenue recognition standard by one year, which would result in the ASU becoming effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Many of our revenue sources are not within the scope of this new standard, and we are evaluating whether the adoption of this ASU for those revenue sources that are in scope will have a material effect on our consolidated financial statements. Consolidation In February of 2015, the FASB issued ASU 2015-02, Consolidation - Amendments to the Consolidation Analysis , which amends the current consolidation guidance and ends the deferral granted to reporting entities with variable interests in investment companies from applying certain prior amendments to the VIE guidance. This ASU is applicable to entities across all industries, particularly those that use limited partnerships as well as entities in any industry that outsource decision making or have historically applied related party tiebreaker in their consolidation analysis and disclosures. The standard is effective for public business entities for annual periods beginning after December 15, 2015. Early adoption is allowed, including in any interim period. We are currently evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Cloud Computing Software In April of 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other Internal-Use Software , to provide guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We evaluated the potential impact of adopting this ASU and concluded that it will not have a material effect on our consolidated financial statements. Fair Value Measurement Disclosures In May of 2015, the FASB issued ASU 2015-07, Fair Value Measurement , to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We have a few investments for which fair value is measured using the net asset value per share practical expedient. However, application of this ASU will not have a material effect on our consolidated financial statements. Short-Duration Insurance Contracts Disclosures In May of 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts , to address enhanced disclosure requirements for insurers relating to short-duration insurance contract claims and unpaid claims liability rollforward for long and short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. We are currently evaluating the potential impact of adopting the ASU on our consolidated financial statements. Technical Corrections and Improvements In June of 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements , to correct differences between original guidance and the Codification, clarify the guidance, correct references and make minor improvements affecting a variety of topics. While most of the amendments are not expected to have a significant effect on practice, some of them could change practice for some entities. The amendments to transition guidance are effective for fiscal years beginning after December 15, 2015; all other changes are effective upon issuance of this ASU. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. Business Combination Adjustments In September of 2015, the FASB issued ASU 2015-16, Business Combinations , to eliminate the requirement to restate prior period financial statements for measurement period adjustments. This update requires the cumulative impact of a measurement period adjustment, including the impact on prior periods, to be recognized in the reporting period in which the adjustment is identified. The ASU is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures. |
Finance Receivables
Finance Receivables | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Our finance receivable types include personal loans, the SpringCastle Portfolio, real estate loans, and retail sales finance as defined below: • Personal loans — are secured by consumer goods, automobiles, or other personal property or are unsecured, typically non-revolving with a fixed-rate and a fixed, original term of two to five years . At September 30, 2015 , $2.2 billion of personal loans, or 56% , were secured by collateral consisting of titled personal property (such as automobiles) and $1.8 billion , or 44% , were secured by consumer household goods or other items of personal property or were unsecured. • SpringCastle Portfolio — are loans acquired by an indirect subsidiary of SHI through a joint venture in which SFC currently owns a 47% equity interest (the “SpringCastle Portfolio”). These loans include unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests). The SpringCastle Portfolio includes both closed-end accounts and open-end lines of credit. These loans are in a liquidating status and vary in substance and form from our originated loans. • Real estate loans — are secured by first or second mortgages on residential real estate, generally have maximum original terms of 360 months , and are considered non-conforming. At September 30, 2015 , $209 million of real estate loans, or 38% , were secured by first mortgages and $338 million , or 62% , were secured by second mortgages. Real estate loans may be closed-end accounts or open-end home equity lines of credit and are primarily fixed-rate products. Since we ceased real estate lending in January of 2012, our real estate loans are in a liquidating status. • Retail sales finance — include retail sales contracts and revolving retail accounts. Retail sales contracts are closed-end accounts that represent a single purchase transaction. Revolving retail accounts are open-end accounts that can be used for financing repeated purchases from the same merchant. Retail sales contracts are secured by the personal property designated in the contract and generally have maximum original terms of 60 months . Revolving retail accounts are secured by the goods purchased and generally require minimum monthly payments based on the amount financed calculated after the most recent purchase or outstanding balances. Our retail sales finance portfolio is also in a liquidating status. Components of net finance receivables by type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Gross receivables * $ 4,694 $ 1,635 $ 543 $ 30 $ 6,902 Unearned finance charges and points and fees (802 ) — — (3 ) (805 ) Accrued finance charges 56 32 4 — 92 Deferred origination costs 42 — — — 42 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Gross receivables * $ 4,462 $ 1,941 $ 621 $ 52 $ 7,076 Unearned finance charges and points and fees (764 ) — (1 ) (5 ) (770 ) Accrued finance charges 58 38 5 1 102 Deferred origination costs 44 — — — 44 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 * Gross receivables are defined as follows: • finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its fair value; • finance receivables originated subsequent to the Fortress Acquisition (as defined in the Purchased Credit Impaired Finance Receivables section located in this Note) — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and • purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts. Included in the table above are finance receivables associated with securitizations that remain on our balance sheet. At September 30, 2015 and December 31, 2014 , the carrying values of these finance receivables totaled $2.1 billion and $1.9 billion , respectively, for our personal loans and $1.7 billion and $2.0 billion , respectively, for our SpringCastle Portfolio loans. Unused lines of credit extended to customers by the Company were as follows: (dollars in millions) September 30, December 31, Personal loans $ 2 $ 1 SpringCastle Portfolio 366 354 Real estate loans 31 31 Total $ 399 $ 386 Unused lines of credit on our personal loans can be suspended if one of the following occurs: (1) the value of the collateral declines significantly; (2) we believe the borrower will be unable to fulfill the repayment obligations; or (3) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on our real estate loans and the SpringCastle Portfolio secured by subordinate residential real estate mortgages can be suspended if one of the following occurs: (1) the value of the real estate declines significantly below the property’s initial appraised value; (2) we believe the borrower will be unable to fulfill the repayment obligations because of a material change in the borrower’s financial circumstances; or (3) any other default by the borrower of any material obligation under the agreement occurs. Unused lines of credit on home equity lines of credit, including the SpringCastle Portfolio secured by subordinate residential real estate mortgages, can be terminated for delinquency. Unused lines of credit on the unsecured loans of the SpringCastle Portfolio can be terminated at our discretion. CREDIT QUALITY INDICATORS We consider the delinquency status and nonperforming status of the finance receivable as our credit quality indicators. We accrue finance charges on revolving retail finance receivables up to the date of charge-off at 180 days past due. Our revolving retail finance receivables that were more than 90 days past due and still accruing finance charges at September 30, 2015 and at December 31, 2014 were immaterial . Our personal loans, SpringCastle Portfolio, and real estate loans do not have finance receivables that were more than 90 days past due and still accruing finance charges. Delinquent Finance Receivables We consider the delinquency status of the finance receivable as our primary credit quality indicator. We monitor delinquency trends to manage our exposure to credit risk. We consider finance receivables 60 days or more past due as delinquent and consider the likelihood of collection to decrease at such time. The following is a summary of net finance receivables by type and by days delinquent: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Net finance receivables: 60-89 days past due $ 47 $ 24 $ 16 $ 1 $ 88 90-119 days past due 36 15 4 — 55 120-149 days past due 29 11 3 — 43 150-179 days past due 23 9 2 — 34 180 days or more past due 2 1 12 — 15 Total delinquent finance receivables 137 60 37 1 235 Current 3,784 1,562 497 25 5,868 30-59 days past due 69 45 13 1 128 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Net finance receivables: 60-89 days past due $ 36 $ 31 $ 12 $ 1 $ 80 90-119 days past due 30 19 9 — 58 120-149 days past due 24 16 5 1 46 150-179 days past due 21 14 4 — 39 180 days or more past due 2 2 12 — 16 Total delinquent finance receivables 113 82 42 2 239 Current 3,632 1,839 565 45 6,081 30-59 days past due 55 58 18 1 132 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 Nonperforming Finance Receivables We also monitor finance receivable performance trends to evaluate the potential risk of future credit losses. At 90 days or more past due, we consider our finance receivables to be nonperforming. Once the finance receivables are considered as nonperforming, we consider them to be at increased risk for credit loss. Our performing and nonperforming net finance receivables by type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Retail Total September 30, 2015 Performing $ 3,900 $ 1,631 $ 526 $ 27 $ 6,084 Nonperforming 90 36 21 — 147 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Performing $ 3,723 $ 1,928 $ 595 $ 47 $ 6,293 Nonperforming 77 51 30 1 159 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 PURCHASED CREDIT IMPAIRED FINANCE RECEIVABLES In connection with SFI’s capital contribution of its wholly owned subsidiary, Springleaf Acquisition Corporation (“SAC”), to SFC on July 31, 2014 (the “SAC Capital Contribution”), SFC owns a 47% equity interest in the SpringCastle Portfolio (the “SCP Loans”), certain of which were determined to be credit impaired when SAC acquired the SCP Loans on April 1, 2013. As a result of the significance of the ownership interest acquired by FCFI Acquisition LLC, an affiliate of Fortress (the “Fortress Acquisition”), we revalued our assets and liabilities based on their fair value at the date of the Fortress Acquisition, November 30, 2010, in accordance with business combination standards (“push-down accounting”) and adjusted the carrying value of our finance receivables (the “FA Loans”) to their fair value. We report the carrying amount of our purchased credit impaired finance receivables in net finance receivables, less allowance for finance receivable losses or in finance receivables held for sale as discussed below. At September 30, 2015 and December 31, 2014 , finance receivables held for sale totaled $797 million and $205 million , respectively. See Note 6 for further information on our finance receivables held for sale, which consist of certain of our personal loans and non-core real estate loans. Finance receivables held for sale include purchased credit impaired finance receivables as well as TDR finance receivables. Therefore, we are presenting the financial information for our purchased credit impaired finance receivables and TDR finance receivables combined for finance receivables held for investment and finance receivables held for sale in the tables below. Information regarding our purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans * Total September 30, 2015 Carrying amount, net of allowance $ 251 $ 86 $ 337 Outstanding balance 515 139 654 Allowance for purchased credit impaired finance receivable losses — 5 5 December 31, 2014 Carrying amount, net of allowance $ 340 $ 93 $ 433 Outstanding balance 628 151 779 Allowance for purchased credit impaired finance receivable losses — 5 5 * Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) FA Loans September 30, 2015 Carrying amount, net of allowance $ 62 Outstanding balance 91 December 31, 2014 Carrying amount, net of allowance $ 68 Outstanding balance 99 The allowance for purchased credit impaired finance receivable losses at September 30, 2015 and December 31, 2014 , reflected the net carrying value of the purchased credit impaired FA Loans being higher than the present value of the expected cash flows. Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans Total Three Months Ended September 30, 2015 Balance at beginning of period $ 474 $ 13 $ 487 Accretion (a) (20 ) (3 ) (23 ) Disposals of finance receivables (b) (7 ) — (7 ) Balance at end of period $ 447 $ 10 $ 457 Three Months Ended September 30, 2014 Balance at beginning of period $ — $ 623 $ 623 Accretable yield for SpringCastle Portfolio contributed to SFC 260 — 260 Accretion (a) (11 ) (20 ) (31 ) Transfers due to finance receivables sold — (559 ) (559 ) Disposals of finance receivables (b) (3 ) (4 ) (7 ) Balance at end of period $ 246 $ 40 $ 286 Nine Months Ended September 30, 2015 Balance at beginning of period $ 541 $ 19 $ 560 Accretion (a) (66 ) (8 ) (74 ) Disposals of finance receivables (b) (28 ) (1 ) (29 ) Balance at end of period $ 447 $ 10 $ 457 Nine Months Ended September 30, 2014 Balance at beginning of period $ — $ 767 $ 767 Accretable yield for SpringCastle Portfolio contributed to SFC 260 — 260 Accretion (a) (11 ) (75 ) (86 ) Transfers due to finance receivables sold — (637 ) (637 ) Disposals of finance receivables (b) (3 ) (15 ) (18 ) Balance at end of period $ 246 $ 40 $ 286 (a) Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accretion $ 2 $ 11 $ 5 $ 11 (b) Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period. TROUBLED DEBT RESTRUCTURED FINANCE RECEIVABLES Information regarding TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total September 30, 2015 TDR gross finance receivables (b) $ 30 $ 14 $ 199 $ 243 TDR net finance receivables 29 12 200 241 Allowance for TDR finance receivable losses 7 4 30 41 December 31, 2014 TDR gross finance receivables (b) $ 22 $ 11 $ 196 $ 229 TDR net finance receivables 22 10 196 228 Allowance for TDR finance receivable losses 1 3 32 36 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total September 30, 2015 TDR gross finance receivables $ 2 $ 92 $ 94 TDR net finance receivables 2 92 94 December 31, 2014 TDR gross finance receivables $ — $ 91 $ 91 TDR net finance receivables — 91 91 (b) As defined earlier in this Note. We have no commitments to lend additional funds on our TDR finance receivables. TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Loans (a) Total Three Months Ended September 30, 2015 TDR average net receivables $ 30 $ 12 $ 199 $ 241 TDR finance charges recognized — 1 2 3 Three Months Ended September 30, 2014 TDR average net receivables (b) $ 17 $ 8 $ 797 $ 822 TDR finance charges recognized — — 10 10 Nine Months Ended September 30, 2015 TDR average net receivables $ 28 $ 12 $ 197 $ 237 TDR finance charges recognized 2 1 8 11 Nine Months Ended September 30, 2014 TDR average net receivables (b) $ 15 $ 8 $ 1,187 $ 1,210 TDR finance charges recognized 1 — 45 46 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR average net receivables $ 92 TDR finance charges recognized 2 Three Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 Nine Months Ended September 30, 2015 TDR average net receivables $ 91 TDR finance charges recognized 4 Nine Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 (b) TDR SpringCastle Portfolio loans average net receivables for the three and nine months ended September 30, 2014 reflect a two-month average since the SAC Capital Contribution occurred on July 31, 2014. Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables $ 8 $ 1 $ 6 $ 15 Post-modification TDR net finance receivables: Rate reduction $ 3 $ 1 $ 3 $ 7 Other (b) 3 — 2 5 Total post-modification TDR net finance receivables $ 6 $ 1 $ 5 $ 12 Number of TDR accounts 1,545 142 95 1,782 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ 5 $ 2 $ 28 $ 35 Post-modification TDR net finance receivables: Rate reduction $ 3 $ 2 $ 26 $ 31 Other (b) 2 — 4 6 Total post-modification TDR net finance receivables $ 5 $ 2 $ 30 $ 37 Number of TDR accounts 1,125 246 403 1,774 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables $ 24 $ 5 $ 16 $ 45 Post-modification TDR net finance receivables: Rate reduction $ 11 $ 5 $ 12 $ 28 Other (b) 9 — 4 13 Total post-modification TDR net finance receivables $ 20 $ 5 $ 16 $ 41 Number of TDR accounts 4,860 550 272 5,682 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ 11 $ 2 $ 209 $ 222 Post-modification TDR net finance receivables: Rate reduction $ 7 $ 2 $ 154 $ 163 Other (b) 4 — 45 49 Total post-modification TDR net finance receivables $ 11 $ 2 $ 199 $ 212 Number of TDR accounts 2,678 246 2,290 5,214 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 1 $ 1 Post-modification TDR net finance receivables * $ — $ 2 $ 2 Number of TDR accounts 50 33 83 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 4 $ 4 Post-modification TDR net finance receivables * $ — $ 5 $ 5 Number of TDR accounts 50 77 127 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 * Pre-modification and post-modification TDR personal loans held for sale for the three and nine months ended September 30, 2015 were less than $ 1 million and, therefore, are not quantified in the table above. (b) “Other” modifications include extension of term and forgiveness of principal or interest. Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Three Months Ended September 30, 2015 TDR net finance receivables (b) (c) $ 1 $ — $ 1 $ 2 Number of TDR accounts 342 26 9 377 Three Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 2 $ 2 Number of TDR accounts 42 11 54 107 Nine Months Ended September 30, 2015 TDR net finance receivables (b) $ 3 $ 1 $ 2 $ 6 Number of TDR accounts 855 122 35 1,012 Nine Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 31 $ 31 Number of TDR accounts 74 11 488 573 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR net finance receivables * $ — Number of TDR accounts 1 Three Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 Nine Months Ended September 30, 2015 TDR net finance receivables $ 1 Number of TDR accounts 14 Nine Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 * TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. (b) Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. (c) TDR personal loans and SpringCastle Portfolio loans for the three and nine months ended September 30, 2014 and TDR SpringCastle Portfolio loans for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. |
Allowance for Finance Receivabl
Allowance for Finance Receivable Losses | 9 Months Ended |
Sep. 30, 2015 | |
Loans and Leases Receivable, Allowance [Abstract] | |
Allowance for Finance Receivable Losses | Changes in the allowance for finance receivable losses by finance receivable type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Consolidated Total Three Months Ended September 30, 2015 Balance at beginning of period $ 139 $ 3 $ 35 $ 1 $ 178 Provision for finance receivable losses 60 20 2 — 82 Charge-offs (57 ) (22 ) (4 ) — (83 ) Recoveries 10 3 2 — 15 Reduction in the carrying value of personal loans transferred to finance receivables held for sale (a) (1 ) — — — (1 ) Balance at end of period $ 151 $ 4 $ 35 $ 1 $ 191 Three Months Ended September 30, 2014 Balance at beginning of period $ 106 $ — $ 259 $ 1 $ 366 Provision for finance receivable losses 58 18 16 1 93 Charge-offs (48 ) (20 ) (13 ) (1 ) (82 ) Recoveries 7 2 — — 9 Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (b) — — (225 ) — (225 ) Allowance for SpringCastle Portfolio contributed to SFC — 1 — — 1 Balance at end of period $ 123 $ 1 $ 37 $ 1 $ 162 Nine Months Ended September 30, 2015 Balance at beginning of period $ 130 $ 3 $ 40 $ 1 $ 174 Provision for finance receivable losses 170 70 6 1 247 Charge-offs (176 ) (78 ) (15 ) (2 ) (271 ) Recoveries 28 9 4 1 42 Reduction in the carrying value of personal loans transferred to finance receivables held for sale (a) (1 ) — — — (1 ) Balance at end of period $ 151 $ 4 $ 35 $ 1 $ 191 Nine Months Ended September 30, 2014 Balance at beginning of period $ 94 $ — $ 236 $ 2 $ 332 Provision for finance receivable losses 150 18 103 3 274 Charge-offs (139 ) (20 ) (67 ) (4 ) (230 ) Recoveries (c) 18 2 5 — 25 Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (b) — — (240 ) — (240 ) Allowance for SpringCastle Portfolio contributed to SFC — 1 — — 1 Balance at end of period $ 123 $ 1 $ 37 $ 1 $ 162 (a) During the three and nine months ended September 30, 2015 , we reduced the carrying value of certain personal loans to $608 million as a result of the transfer of these finance receivables from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. (b) During the three and nine months ended September 30, 2014 , we reduced the carrying value of certain real estate loans to $5.3 billion and $6.6 billion , respectively, as a result of the transfer of these loans from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. (c) Recoveries during the nine months ended September 30, 2014 included $2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March of 2014. Included in the allowance for finance receivable losses are allowances associated with securitizations that totaled $131 million at September 30, 2015 and $72 million at December 31, 2014 . See Note 11 for further discussion regarding our securitization transactions. The carrying value charged-off for purchased credit impaired loans was as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Charged-off against provision for finance receivable losses: SCP Loans $ 4 $ 5 $ 17 $ 5 FA Loans gross charge-offs * — 2 1 15 * Represents additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status. The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Allowance for finance receivable losses for finance receivables: Collectively evaluated for impairment $ 144 $ — $ — $ 1 $ 145 Acquired with deteriorated credit quality (purchased credit impaired finance receivables) — — 5 — 5 Individually evaluated for impairment (TDR finance receivables) 7 4 30 — 41 Total $ 151 $ 4 $ 35 $ 1 $ 191 Finance receivables: Collectively evaluated for impairment $ 3,963 $ 1,404 $ 410 $ 27 $ 5,804 Purchased credit impaired finance receivables — 251 29 — 280 TDR finance receivables 27 12 108 — 147 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Allowance for finance receivable losses for finance receivables: Collectively evaluated for impairment $ 129 $ — $ 3 $ 1 $ 133 Purchased credit impaired finance receivables — — 5 — 5 TDR finance receivables 1 3 32 — 36 Total $ 130 $ 3 $ 40 $ 1 $ 174 Finance receivables: Collectively evaluated for impairment $ 3,778 $ 1,629 $ 490 $ 48 $ 5,945 Purchased credit impaired finance receivables — 340 30 — 370 TDR finance receivables 22 10 105 — 137 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 |
Finance Receivables Held for Sa
Finance Receivables Held for Sale | 9 Months Ended |
Sep. 30, 2015 | |
Receivables Held-for-sale [Abstract] | |
Finance Receivables Held for Sale | Finance Receivables Held for Sale We report finance receivables held for sale of $797 million at September 30, 2015 and $205 million at December 31, 2014 , which are carried at the lower of cost or fair value. At September 30, 2015 and December 31, 2014 , the fair value of our finance receivables held for sale exceeded the cost. We used the aggregate basis to determine the lower of cost or fair value of the finance receivables held for sale. We also separately present the interest income on our finance receivables held for sale as interest income on finance receivables held for sale originated as held for investment on our condensed consolidated statements of operations, which totaled $4 million and $13 million for the three and nine months ended September 30, 2015 , respectively, compared to $47 million and $54 million for the three and nine months ended September 30, 2014 , respectively. On September 30, 2015 , we transferred $608 million of personal loans (after deducting allowance for finance receivable losses) from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. During the three and nine months ended September 30, 2014 , we transferred real estate loans totaling $5.3 billion and $6.6 billion , respectively, (after deducting allowance for finance receivable losses) from held for investment to held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. During the three and nine months ended September 30, 2014 , we sold the finance receivables held for sale totaling $4.7 billion and $6.0 billion , respectively, and recorded net gains of $617 million and $707 million , respectively. At September 30, 2015, these real estate loans held for sale totaled $189 million . |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities AVAILABLE-FOR-SALE SECURITIES Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows: (dollars in millions) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value September 30, 2015 Fixed maturity available-for-sale securities: Bonds: U.S. government and government sponsored entities $ 69 $ — $ (1 ) $ 68 Obligations of states, municipalities, and political subdivisions 83 1 — 84 Corporate debt 248 3 (6 ) 245 Mortgage-backed, asset-backed, and collateralized: Residential mortgage-backed securities (“RMBS”) 79 — — 79 Commercial mortgage-backed securities (“CMBS”) 39 — — 39 Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) 32 — — 32 Total bonds 550 4 (7 ) 547 Preferred stock 16 — — 16 Other long-term investments 1 — — 1 Total (a) $ 567 $ 4 $ (7 ) $ 564 December 31, 2014 Fixed maturity available-for-sale securities: Bonds: U.S. government and government sponsored entities $ 61 $ 3 $ — $ 64 Obligations of states, municipalities, and political subdivisions 99 3 — 102 Certificates of deposit and commercial paper (b) 1 — — 1 Corporate debt 256 12 (1 ) 267 Mortgage-backed, asset-backed, and collateralized: RMBS 71 2 — 73 CMBS 25 — (1 ) 24 CDO/ABS 61 — — 61 Total bonds 574 20 (2 ) 592 Preferred stock 7 — — 7 Other long-term investments 1 — — 1 Total (a) $ 582 $ 20 $ (2 ) $ 600 (a) Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at September 30, 2015 and December 31, 2014 , which is classified as a restricted investment and carried at cost. (b) Includes certificates of deposit pledged as collateral, totaling $2 million at December 31, 2014, primarily to support bank lines of credit. As of September 30, 2015 and December 31, 2014 , we had no available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss. Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows: Less Than 12 Months 12 Months or Longer Total (dollars in millions) Fair Value Unrealized Losses * Fair Value Unrealized Losses * Fair Value Unrealized Losses September 30, 2015 Bonds: U.S. government and government sponsored entities $ 51 $ (1 ) $ — $ — $ 51 $ (1 ) Obligations of states, municipalities, and political subdivisions 15 — 11 — 26 — Corporate debt 107 (6 ) 14 — 121 (6 ) RMBS 8 — — — 8 — CMBS 19 — 7 — 26 — CDO/ABS 16 — — — 16 — Total bonds 216 (7 ) 32 — 248 (7 ) Preferred stock 6 — — — 6 — Other long-term investments 1 — — — 1 — Total $ 223 $ (7 ) $ 32 $ — $ 255 $ (7 ) December 31, 2014 Bonds: U.S. government and government sponsored entities $ — $ — $ 1 $ — $ 1 $ — Obligations of states, municipalities, and political subdivisions 27 — 1 — 28 — Corporate debt 36 (1 ) 6 — 42 (1 ) RMBS 9 — — — 9 — CMBS 16 (1 ) 2 — 18 (1 ) CDO/ABS 46 — — — 46 — Total bonds 134 (2 ) 10 — 144 (2 ) Preferred stock 6 — — — 6 — Total $ 140 $ (2 ) $ 10 $ — $ 150 $ (2 ) * Unrealized losses on certain available-for-sale securities were less than $1 million and, therefore, are not quantified in the table above. We continue to monitor unrealized loss positions for potential impairments. During the three and nine months ended September 30, 2015 and 2014 , we did not recognize any other-than-temporary impairment credit loss write-downs to investment revenues. During the three and nine months ended September 30, 2015 and 2014 , there were no additions or reductions in the cumulative amount of credit losses (recognized in earnings) on other-than-temporarily impaired available-for-sale securities. The fair values of available-for-sale securities sold or redeemed and the resulting realized gains, realized losses, and net realized gains were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Fair value $ 168 $ 105 $ 372 $ 203 Realized gains $ 4 $ 5 $ 15 $ 7 Realized losses — — (1 ) — Net realized gains $ 4 $ 5 $ 14 $ 7 Contractual maturities of fixed-maturity available-for-sale securities at September 30, 2015 were as follows: (dollars in millions) Fair Value Amortized Cost Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: Due in 1 year or less $ 72 $ 72 Due after 1 year through 5 years 150 150 Due after 5 years through 10 years 57 57 Due after 10 years 118 121 Mortgage-backed, asset-backed, and collateralized securities 150 150 Total $ 547 $ 550 Actual maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations. We may sell investment securities before maturity to achieve corporate requirements and investment strategies. The fair value of bonds on deposit with insurance regulatory authorities totaled $11 million and $12 million at September 30, 2015 and December 31, 2014 , respectively. TRADING SECURITIES The fair value of trading securities by type was as follows: (dollars in millions) September 30, December 31, Fixed maturity trading securities: Bonds: U.S. government and government sponsored entities $ 783 $ 302 Obligations of states, municipalities, and political subdivisions — 14 Certificates of deposit and commercial paper — 238 Non-U.S. government and government sponsored entities — 20 Corporate debt 196 1,056 Mortgage-backed, asset-backed, and collateralized: RMBS 2 35 CMBS 45 149 CDO/ABS 151 507 Total $ 1,177 $ 2,321 The net unrealized and realized gains (losses) on our trading securities, which we report in investment revenues, were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net unrealized gains (losses) on trading securities held at period end $ (1 ) $ (2 ) $ 3 $ (1 ) Net realized losses on trading securities sold or redeemed (1 ) — (2 ) — Total $ (2 ) $ (2 ) $ 1 $ (1 ) |
Transactions with Affiliates of
Transactions with Affiliates of Fortress or AIG | 9 Months Ended |
Sep. 30, 2015 | |
Affiliates of Fortress or AIG | |
Transactions with Affiliates of Fortress or AIG | |
Transactions with Affiliates of Fortress or AIG | Transactions with Affiliates of Fortress or AIG SUBSERVICING AGREEMENT Nationstar Mortgage LLC (“Nationstar”) subservices the real estate loans of certain direct and indirect subsidiaries (collectively, the “Owners”). Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The Owners paid Nationstar subservicing fees of less than $1 million for the three months ended September 30, 2015 , and $1 million for the nine months ended September 30, 2015 , compared to $1 million and $5 million for the three and nine months ended September 30, 2014 , respectively. As a result of the sales of our real estate loans during 2014 (some of which were serviced by Nationstar) and the sale of certain mortgage servicing rights in 2014, our exposure to these affiliated services is reduced. INVESTMENT MANAGEMENT AGREEMENT Logan Circle Partners, L.P. (“Logan Circle”) provides investment management services for our investments. Logan Circle is a wholly owned subsidiary of Fortress. Costs and fees incurred for these investment management services were under $1 million for the three months ended September 30, 2015 and 2014 , and $1 million for the nine months ended September 30, 2015 and 2014 . REINSURANCE AGREEMENTS Merit Life Insurance Co. (“Merit”), our wholly owned subsidiary, enters into reinsurance agreements with subsidiaries of AIG, for reinsurance of various group annuity, credit life, and credit accident and health insurance where Merit reinsures the risk of loss. The reserves for this business fluctuate over time and, in some instances, are subject to recapture by the insurer. Reserves recorded by Merit for reinsurance agreements with subsidiaries of AIG totaled $43 million and $44 million at September 30, 2015 and December 31, 2014 , respectively. INSURANCE COVERAGE We hold various insurance policies with AIG subsidiaries covering liabilities of directors and officers, errors and omissions, lawyers, employment practices, fiduciary, and fidelity bond. Premium expenses on these policies were under $ 1 million for the three months ended September 30, 2015 and 2014 and $1 million for the nine months ended September 30, 2015 and 2014 . JOINT VENTURE Certain subsidiaries of New Residential Investment Corp. (“NRZ”), own a 30% equity interest in the joint venture that acquired the SpringCastle Portfolio, in which we own a 47% equity interest. NRZ is managed by an affiliate of Fortress. THIRD STREET DISPOSITION On March 6, 2014, we entered into an agreement to sell, subject to certain closing conditions, all of our interest in the mortgage-backed retained certificates related to a securitization transaction completed in 2009 to Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPFS”). Concurrently, NRZ and MLPFS entered into an agreement pursuant to which NRZ agreed to purchase approximately 75% of these retained certificates. NRZ is managed by an affiliate of Fortress. MSR SALE SFC and MorEquity, Inc. (“MorEquity”), a wholly owned subsidiary, entered into an agreement, dated and effective August 1, 2014, to sell the servicing rights of the mortgage loans primarily underlying the mortgage securitizations completed during 2011 through 2013 to Nationstar for a purchase price of $39 million (the “MSR Sale”). From the closing of the MSR Sale on August 29, 2014, until the servicing transfer on September 30, 2014, we continued to service certain loans on behalf of Nationstar under an interim servicing agreement. At December 31, 2014, the receivable from Nationstar for our interim servicing fees totaled $1 million . In May of 2015, Nationstar paid off the remaining balance of $1 million of this receivable. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Parties other than Affiliates of Fortress or AIG | |
Related Party Transactions | |
Related Party Transactions | Related Party Transactions AFFILIATE LENDING Note Receivable from Parent SFC’s note receivable from parent is payable in full on May 31, 2022, and SFC may demand payment at any time prior to May 31, 2022; however, SFC does not anticipate the need for additional liquidity during 2015 and does not expect to demand payment from SFI in 2015. The note receivable from parent totaled $322 million at September 30, 2015 and $251 million at December 31, 2014 . Interest receivable on this note totaled $2 million at September 30, 2015 and was less than $1 million at December 31, 2014 . The interest rate for the unpaid principal balance is the lender’s cost of funds rate. Interest revenue on the note receivable from SFI totaled $5 million and $11 million , for the three and nine months ended September 30, 2015 , respectively, compared to $1 million and $4 million for the three and nine months ended September 30, 2014 , respectively. Receivables from Parent and Affiliates At September 30, 2015 and December 31, 2014 , receivables from parent and affiliates totaled $7 million and $12 million , respectively. SFC had a receivable from Second Street Funding Corporation, a subsidiary of SFI, for income taxes payable under current and prior tax sharing agreements, which totaled $ 4 million at September 30, 2015 and $4 million at December 31, 2014 . Receivables from parent and affiliates also included interest receivable on SFC’s note receivable from SFI previously discussed in this Note. Receivables from parent and affiliates at September 30, 2015 and December 31, 2014 are presented net of a payable to SFI of $9 million and $43 million , respectively. Excluding this payable, receivables from parent and affiliates totaled $16 million at September 30, 2015 and $54 million at December 31, 2014 . Payables to Parent and Affiliates At September 30, 2015 and December 31, 2014 , payables to parent and affiliates totaled $19 million and $48 million , respectively. SFC’s payable to parent totaled $2 million and $17 million at September 30, 2015 and December 31, 2014 , respectively, primarily due to payments made by SFI for the benefit of SFC. At September 30, 2015 and December 31, 2014 , Springleaf Finance Management Corporation (“SFMC”), a subsidiary of SFC, had net payables of $15 million and $19 million , respectively, to Springleaf General Services Corporation (“SGSC”), a subsidiary of SFI, related to the intercompany agreements further discussed below in this Note. At September 30, 2015 and December 31, 2014 , SFMC also had a payable of $1 million to Springleaf Consumer Loan, Inc. for internet lending referral fees charged to the branch network. SFI provided funding for SAC’s operations through an intercompany demand note, not to exceed $2.5 million . The note was payable in full on December 31, 2022, and was prepayable in whole or in part at any time without premium or penalty. The annual interest rate for the principal balance was the lender’s cost plus 25 basis points. At December 31, 2014 , the note payable to SFI totaled $1 million and was reported in other liabilities. On September 1, 2015, SAC repaid the note in full plus accrued interest. Interest expense on the note payable to SFI for the three and nine months ended September 30, 2015 and 2014 was immaterial. SFI provides servicing of the SpringCastle Portfolio through a master servicing agreement with SpringCastle Holdings, LLC. At September 30, 2015 and December 31, 2014 , SpringCastle Holdings LLC’s payable to SFI totaled $4 million and $10 million , respectively. CAPITAL CONTRIBUTIONS On July 31, 2014, SFI made a capital contribution to SFC, consisting of 100 shares of the common stock, par value of $0.01 per share, of SAC representing all of the issued and outstanding shares of capital stock of SAC. During January and July of 2014, SFC received capital contributions from SFI of $11 million to satisfy interest payments required by SFC’s debenture due in January and July of 2014, respectively. INTERCOMPANY AGREEMENTS On December 24, 2012, SGSC, a subsidiary of SFI, entered into the following intercompany agreements with SFMC, a subsidiary of SFC, and with certain other subsidiaries of SFI (collectively, the “Recipients”). SFMC’s net payable to SGSC relating to these agreements totaled $15 million at September 30, 2015 and $ 19 million at December 31, 2014 . Services Agreement SGSC provides the following services to the Recipients: management and administrative services; financial, accounting, treasury, tax, and audit services; facilities support services; capital funding services; legal services; human resources services (including payroll); centralized collections and lending support services; insurance, risk management, and marketing services; and information technology services. The fees payable by each Recipient to SGSC is equal to 100% of the allocated cost of providing the services to such Recipient. SGSC allocates its cost of providing these services among the Recipients and any of the companies to which it provides similar services based on an allocation method defined in the agreement. During the three and nine months ended September 30, 2015 , SFMC recorded $55 million and $156 million , respectively, of service fee expenses, which are included in other operating expenses, compared to $65 million and $160 million for the three and nine months ended September 30, 2014 . License Agreement The license agreement provides for use by SGSC of SFMC’s information technology systems and software and other related equipment. The monthly license fee payable by SGSC for its use of the information technology systems and software is 100% of the actual costs incurred by SFMC plus a 7.00% margin. The fee payable by SGSC for its use of the related equipment is 100% of the actual costs incurred by SFMC. During the three and nine months ended September 30, 2015 , SFMC recorded $1 million and $4 million , respectively, of license fees, which are included as a contra expense to other operating expenses, compared to $1 million and $4 million for the three and nine months ended September 30, 2014 . Building Lease The building lease agreement provides that SFMC will lease six of its buildings to SGSC for an annual rental amount of $4 million , plus additional rental amounts to cover other sums and charges, including real estate taxes, water charges, and sewer rents. During the three and nine months ended September 30, 2015 , SFMC recorded $1 million and $3 million , respectively, of rent charged to SGSC, which are included as a contra expense to other operating expenses, compared to $1 million and $3 million for the three and nine months ended September 30, 2014 . |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Principal maturities of long-term debt (excluding projected securitization repayments by period) by type of debt at September 30, 2015 were as follows: (dollars in millions) Medium Term Notes Securitizations Junior Subordinated Debt Total Interest rates (a) 5.25%-8.25% 1.87%-6.82% 6.00 % Fourth quarter 2015 $ 750 $ — $ — $ 750 First quarter 2016 — — — — Second quarter 2016 — — — — Third quarter 2016 375 — — 375 Remainder of 2016 — — — — 2017 1,902 — — 1,902 2018 — — — — 2019 700 — — 700 2020-2067 1,250 — 350 1,600 Securitizations (b) — 4,784 — 4,784 Total principal maturities $ 4,977 $ 4,784 $ 350 $ 10,111 Total carrying amount (c) $ 4,613 $ 4,771 $ 171 $ 9,555 Debt issuance costs (d) $ (13 ) $ (17 ) $ — $ (30 ) (a) The interest rates shown are the range of contractual rates in effect at September 30, 2015 . (b) Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 11 for further information on our long-term debt associated with securitizations. (c) The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. (d) As a result of our early adoption of ASU 2015-03 in June of 2015, we report debt issuance costs as a direct deduction from long-term debt. GUARANTY AGREEMENTS On December 3, 2014, SHI entered into an Indenture and First Supplemental Indenture pursuant to which it agreed to fully and unconditionally guarantee the payments of principal, premium (if any) and interest on $700 million of 5.25% of Senior Notes due 2019. As of September 30, 2015 , approximately $700 million aggregate principal amount of senior notes were outstanding. On December 30, 2013, SHI entered into Guaranty Agreements whereby it agreed to fully and unconditionally guarantee the payments of principal, premium (if any), and interest on approximately $5.2 billion aggregate principal amount of senior notes on a senior basis and $350 million aggregate principal amount of a junior subordinated debenture (collectively, the “notes”) on a junior subordinated basis issued by SFC. The notes consist of the following: 8.25% Senior Notes due 2023; 7.75% Senior Notes due 2021; 6.00% Senior Notes due 2020; a 60 -year junior subordinated debenture; and all senior notes outstanding on December 30, 2013, issued pursuant to the Indenture dated as of May 1, 1999 (the “1999 Indenture”), between SFC and Wilmington Trust, National Association (the successor trustee to Citibank N.A.). The 60 -year junior subordinated debenture underlies the trust preferred securities sold by a trust sponsored by SFC. On December 30, 2013, SHI entered into a Trust Guaranty Agreement whereby it agreed to fully and unconditionally guarantee the related payment obligations under the trust preferred securities. As of September 30, 2015 , approximately $5.0 billion aggregate principal amount of senior notes, including $3.0 billion aggregate principal amount of senior notes under the 1999 Indenture, and $350 million aggregate principal amount of a junior subordinated debenture were outstanding. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entities | |
Variable Interest Entities | Variable Interest Entities As part of our overall funding strategy and as part of our efforts to support our liquidity from sources other than our traditional capital market sources, we have transferred certain finance receivables to VIEs for securitization transactions. Since these transactions involve securitization trusts required to be consolidated, the securitized assets and related liabilities are included in our condensed consolidated financial statements and are accounted for as secured borrowings. As a result of the 2014 sales of the Company’s beneficial interests in the mortgage-backed retained certificates related to its previous mortgage securitization transactions, we deconsolidated the underlying real estate loans and previously issued securitized interests which were reported in long-term debt. CONSOLIDATED VIES We evaluated the securitization trusts and determined that these entities are VIEs of which we are the primary beneficiary, and, therefore, we consolidated such entities. We are deemed to be the primary beneficiaries of these VIEs because we have the ability to direct the activities of each VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses and the right to receive benefits that are potentially significant to the VIE. Such ability stems from SFC’s and/or its affiliates’ contractual right to service the securitized finance receivables. Our retained subordinated notes and residual interest trust certificates expose us to potentially significant losses and potentially significant returns. The asset-backed securities issued by the securitization trusts are supported by the expected cash flows from the underlying securitized finance receivables. Cash inflows from these finance receivables are distributed to investors and service providers in accordance with each transaction’s contractual priority of payments (“waterfall”) and, as such, most of these inflows must be directed first to service and repay each trust’s senior notes or certificates held principally by third-party investors. The holders of the asset-backed securities have no recourse to the Company if the cash flows from the underlying qualified securitized assets are not sufficient to pay all principal and interest on the asset-backed securities. After these senior obligations are extinguished, substantially all cash inflows will be directed to the subordinated notes until fully repaid and, thereafter, to the residual interest that we own in each securitization trust. We retain interests in these securitization transactions, including residual interests in each securitization trust and, in some cases, subordinated securities issued by the VIEs. We retain credit risk in the securitizations through our ownership of the residual interest in each securitization trust, and, in some cases, ownership of the most subordinated class of asset-backed securities, which are the first to absorb credit losses on the securitized assets. We expect that any credit losses in the pools of securitized assets will likely be limited to our subordinated and residual retained interests. We have no obligation to repurchase or replace qualified securitized assets that subsequently become delinquent or are otherwise in default. The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows: (dollars in millions) September 30, December 31, Assets Finance receivables: Personal loans $ 2,096 $ 1,853 SpringCastle Portfolio 1,667 1,979 Allowance for finance receivable losses 131 72 Finance receivables held for sale 484 — Restricted cash and cash equivalents 256 210 Liabilities Long-term debt * $ 4,771 $ 3,630 * As a result of our early adoption of ASU 2015-03 in June of 2015, we reclassified $14 million of debt issuance costs related to our long-term debt associated with our securitizations as of December 31, 2014 , from other assets to long-term debt. Amendment to Sumner Brook 2013-VFN1 Securitization On January 16, 2015, we amended the note purchase agreement with Sumner Brook Funding Trust 2013-VFN1 to extend the two -year revolving period ending December of 2015 to a three -year revolving period ending January of 2018. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in August of 2024. The maximum principal balance of variable funding notes that can be issued remained at $350 million . At September 30, 2015 , no amounts were drawn under the notes. 2015-A Securitization On February 26, 2015, we completed a private term securitization transaction in which a wholly owned special purpose vehicle sold $1.2 billion of notes issued by Springleaf Funding Trust 2015-A at a 3.58% weighted average yield. The notes are backed by personal loans acquired from subsidiaries of SFC. We sold the asset-backed notes for $1.2 billion , after the price discount but before expenses and a $12 million interest reserve requirement. Sale of SpringCastle 2014-A Notes On March 9, 2015, SAC agreed to sell $232 million and $131 million principal amount of the previously retained Class C and Class D SpringCastle 2014-A Notes, respectively, to an unaffiliated third party at a premium to the principal balance. The sale was completed on March 16, 2015. Amendments to Whitford Brook 2014-VFN1 Securitization On March 24, 2015, we amended the sale and servicing agreement relating to the Whitford Brook Funding Trust 2014-VFN1 (the “Whitford Brook 2014-VFN1 Trust”) to remove the requirement for a $100 million minimum balance drawn under the variable funding notes, which are to be backed by personal loans acquired from subsidiaries of SFC from time to time. On March 25, 2015, we paid down the note balance of $100 million . On June 3, 2015, we amended the note purchase agreement relating to the Whitford Brook 2014-VFN1 Trust to reduce the $300 million maximum principal balance to $250 million . On July 15, 2015, we drew $100 million under the notes, which remained drawn as of September 30, 2015 . 2015-B Securitization On April 7, 2015, we completed a private term securitization transaction in which a wholly owned special purpose vehicle sold $314 million of notes issued by Springleaf Funding Trust 2015-B at a 3.84% weighted average yield. The notes are backed by personal loans acquired from subsidiaries of SFC. We sold the asset-backed notes for $314 million , after the price discount but before expenses and a $3 million interest reserve requirement. Amendment to Springleaf 2013-VFN1 Securitization On May 20, 2015, we amended the note purchase agreement with Springleaf Funding Trust 2013-VFN1 to, among other things, extend the original two -year revolving period ending October of 2015 to a two -year revolving period ending April of 2017, which may be extended for up to one additional year, subject to satisfaction of customary conditions precedent. During the revolving period, the notes can be paid down in whole or in part and then redrawn. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in May of 2020. The maximum amount that can be drawn under the notes remained at $350 million . At September 30, 2015 , no amounts were drawn under the notes. Mill River 2015-VFN1 Securitization On May 27, 2015, we established a private securitization facility in which Mill River Funding Trust 2015-VFN1, a wholly owned special purpose vehicle, issued variable funding notes with a maximum principal balance of $400 million to be backed by personal loans acquired from subsidiaries of SFC from time to time. No amounts were funded at closing, but may be funded from time to time over a three -year revolving period, subject to the satisfaction of customary conditions precedent. During the revolving period, the notes can be paid down in whole or in part and then redrawn. Following the revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying personal loans and will be due and payable in full in June of 2021. At September 30, 2015 , no amounts were drawn under the notes. Second Avenue Funding LLC Securitization On June 3, 2015, we established a private securitization facility in which Second Avenue Funding LLC, a wholly owned special purpose vehicle, issued variable funding notes with a maximum principal balance of $250 million to be backed by auto loans acquired from subsidiaries of SFC. No amounts were funded at closing, but may be funded from time to time over a three-year revolving period, subject to the satisfaction of customary conditions precedent. During the revolving period, the notes can be paid down in whole or in part and then redrawn. Following the three -year revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying auto loans and will be due and payable in full in June of 2019. At September 30, 2015 , no amounts were drawn under the notes. First Avenue Funding LLC Securitization On June 10, 2015, we established a private securitization facility in which First Avenue Funding LLC (“First Avenue”), a wholly owned special purpose vehicle, issued variable funding notes with a maximum principal balance of $250 million to be backed by auto loans acquired from subsidiaries of SFC. No amounts were funded at closing, but may be funded from time to time over a two -year revolving period, subject to the satisfaction of customary conditions precedent. On September 9, 2015, First Avenue amended the facility to extend the revolving period until September 10, 2017. During the revolving period, the notes can be paid down in whole or in part and then redrawn. Following the two-year revolving period, the principal amount of the notes, if any, will be reduced as cash payments are received on the underlying auto loans and will be due and payable in full twelve months following the maturity of the last auto loan held by First Avenue. At September 30, 2015 , no amounts were drawn under the notes. VIE Interest Expense Other than our retained subordinate and residual interests in the remaining consolidated securitization trusts, we are under no obligation, either contractually or implicitly, to provide financial support to these entities. Consolidated interest expense related to our VIEs for the three and nine months ended September 30, 2015 totaled $49 million and $136 million , respectively, compared to $43 million and $130 million for the three and nine months ended September 30, 2014 , respectively. DECONSOLIDATED VIES As a result of the sales of the mortgage-backed retained certificates during 2014, we deconsolidated the securitization trusts holding the underlying real estate loans and previously issued securitized interests which were reported in long-term debt. The total carrying value of these real estate loans as of the sale dates was $5.1 billion . During 2014, we established a reserve for sales recourse obligations of $6 million related to these sales. At September 30, 2015 , this reserve totaled $6 million . We had no repurchase activity associated with these sales as of September 30, 2015 . See Note 14 for further information on the total reserve for sales recourse obligations relating to the real estate loan sales, including the sales of the mortgage-backed retained certificates. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) Changes in accumulated other comprehensive income (loss) were as follows: (dollars in millions) Unrealized Gains Investment Securities Retirement Plan Liabilities Adjustments Foreign Currency Translation Adjustments Total Accumulated Other Comprehensive Income (Loss) Three Months Ended September 30, 2015 Balance at beginning of period $ 2 $ (13 ) $ 4 $ (7 ) Other comprehensive loss before reclassifications (2 ) — — (2 ) Reclassification adjustments from accumulated other comprehensive income (loss) (2 ) — — (2 ) Balance at end of period $ (2 ) $ (13 ) $ 4 $ (11 ) Three Months Ended September 30, 2014 Balance at beginning of period $ 14 $ 20 $ 4 $ 38 Other comprehensive loss before reclassifications (2 ) — — (2 ) Reclassification adjustments from accumulated other comprehensive income (2 ) — — (2 ) Balance at end of period $ 10 $ 20 $ 4 $ 34 Nine Months Ended September 30, 2015 Balance at beginning of period $ 12 $ (13 ) $ 4 $ 3 Other comprehensive loss before reclassifications (5 ) — — (5 ) Reclassification adjustments from accumulated other comprehensive income (loss) (9 ) — — (9 ) Balance at end of period $ (2 ) $ (13 ) $ 4 $ (11 ) Nine Months Ended September 30, 2014 Balance at beginning of period $ 4 $ 20 $ 4 $ 28 Other comprehensive income before reclassifications 10 — — 10 Reclassification adjustments from accumulated other comprehensive income (4 ) — — (4 ) Balance at end of period $ 10 $ 20 $ 4 $ 34 Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Unrealized gains on investment securities: Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes $ 4 $ 3 $ 14 $ 6 Income tax effect (2 ) (1 ) (5 ) (2 ) Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes $ 2 $ 2 $ 9 $ 4 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes At September 30, 2015 , we had a net deferred tax liability of $138 million , compared to $156 million at December 31, 2014 . The decrease in the net deferred tax liability was primarily due to purchase accounting for debt writedown. This decrease was partially offset by a change in our tax accounting method for the valuation of certain assets, which was approved by the Internal Revenue Service (the “IRS”) in August of 2015. The impact to our uncertain tax positions was immaterial. The effective tax rate for the nine months ended September 30, 2015 was 12.1% compared to 34.7% for the same period in 2014 . The effective tax rates for the nine months ended September 30, 2015 and 2014 differed from the federal statutory rates primarily due to the effect of the non-controlling interest in our joint venture. We are currently under examination of our U.S. Federal tax return for the year 2013 by the IRS. Management believes it has adequately provided for taxes for such year. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies LEGAL CONTINGENCIES In the normal course of business, the Company has been named, from time to time, as a defendant in various legal actions, including arbitrations, class actions and other litigation arising in connection with its activities. Some of the actual or threatened legal actions include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. While we will continue to identify certain legal actions where we believe a material loss to be reasonably possible and reasonably estimable, there can be no assurance that material losses will not be incurred from claims that we have not yet been notified of or are not yet determined to be probable or reasonably possible and reasonably estimable. We contest liability and/or the amount of damages, as appropriate, in each pending matter. Where available information indicates that it is probable that a liability had been incurred at the date of the condensed consolidated financial statements and we can reasonably estimate the amount of that loss, we accrue the estimated loss by a charge to income. In many actions, however, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the amount of any loss. In addition, even where loss is reasonably possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is not always possible to reasonably estimate the size of the possible loss or range of loss. For certain legal actions, we cannot reasonably estimate such losses, particularly for actions that are in their early stages of development or where plaintiffs seek substantial or indeterminate damages. Numerous issues may need to be resolved, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the actions in question, before a loss or additional loss or range of loss or additional loss can be reasonably estimated for any given action. For certain other legal actions, we can estimate reasonably possible losses, additional losses, ranges of loss or ranges of additional loss in excess of amounts accrued, but do not believe, based on current knowledge and after consultation with counsel, that such losses will have a material adverse effect on our condensed consolidated financial statements as a whole. SALES RECOURSE OBLIGATIONS During 2014, we established a reserve for sales recourse obligations of $22 million related to the real estate loan sales. At September 30, 2015 , our reserve for sales recourse obligations totaled $18 million , of which $18 million related to the real estate loan sales in 2014. We had no repurchase activity during the three months ended September 30, 2015 . We repurchased 13 loans totaling $1 million for the nine months ended September 30, 2015 associated with the real estate loan sales in 2014. There was no repurchase activity associated with the real estate loan sales in 2014 during the three and nine months ended September 30, 2014 . We repurchased 4 loans totaling $1 million during the three months ended September 30, 2014 and 9 loans totaling $2 million during the nine months ended September 30, 2014 associated with other prior sales of finance receivables because these loans were reaching the defined delinquency limits or had breached the contractual representations and warranties under the loan sale agreements. At September 30, 2015 , there were no material recourse requests that management believes will not be covered by the reserve. The activity in our reserve for sales recourse obligations associated with the real estate loan sales during 2014 and other prior sales of finance receivables was as follows: Three Months Ended Nine Months Ended (dollars in millions) 2015 2014 2015 2014 Balance at beginning of period $ 18 $ 5 $ 24 $ 5 Recourse losses — — (5 ) — Provision for recourse obligations, net of recoveries * — 8 (1 ) 8 Balance at end of period $ 18 $ 13 $ 18 $ 13 * Reflects the elimination of the reserve associated with other prior sales of finance receivables. It is inherently difficult to determine whether any recourse losses are probable or even reasonably possible or to estimate the amounts of any losses. In addition, even where recourse losses are reasonably possible or exposure to such losses exists in excess of the liability already accrued, it is not always possible to reasonably estimate the size of the possible recourse losses or range of losses. PAYMENT PROTECTION INSURANCE Our United Kingdom subsidiary provides payments of compensation to its customers who have made claims concerning Payment Protection Insurance (“PPI”) policies sold in the normal course of business by insurance intermediaries. On April 20, 2011, the High Court in the United Kingdom handed down judgment supporting the Financial Services Authority (now known as the Financial Conduct Authority) (“FCA”) guidelines on the treatment of PPI complaints. In addition, the FCA issued a guidance consultation paper in March of 2012 on the PPI customer contact letters. As a result, we have concluded that there are certain circumstances where customer contact and/or redress is appropriate; therefore, this activity is ongoing. The total reserves related to the estimated PPI claims were $8 million at September 30, 2015 and $14 million at December 31, 2014 . We do not believe that any additional losses related to PPI claims in excess of the amounts accrued will have a material adverse effect on our condensed consolidated financial statements as a whole. |
Benefit Plans
Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Benefit Plans | Benefit Plans The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Pension Components of net periodic benefit cost: Interest cost $ 4 $ 3 $ 12 $ 11 Expected return on assets (5 ) (4 ) (14 ) (12 ) Net periodic benefit cost $ (1 ) $ (1 ) $ (2 ) $ (1 ) The components of net periodic benefit cost with respect to our post retirement plan were less than $1 million for the three and nine months ended September 30, 2015 and 2014 and, therefore, were not included in the table above. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our segments coincide with how our businesses are managed. At September 30, 2015 , our three segments include: • Consumer and Insurance; • Acquisitions and Servicing; and • Real Estate. When we initially defined our operating segments in early 2013, we presented Consumer and Insurance as two distinct reporting segments. However, over the course of 2013 and into 2014, management has shifted its strategy for the Insurance segment toward organic growth primarily as an ancillary product complementing our consumer lending activities and has been increasingly viewing and managing the Insurance segment together with Consumer. As a result of the changes in strategy and the way that management views the insurance business of the Company, we began presenting them as one segment, effective December 31, 2014 . To conform to the new segment alignment, we have revised our prior period segment disclosures. The Acquisitions and Servicing segment was added effective July 31, 2014, as a result of the SAC Capital Contribution on July 31, 2014. Management considers Consumer and Insurance, and Acquisitions and Servicing as our “Core Consumer Operations” and Real Estate as our “Non-Core Portfolio.” Our segments are managed as follows: Core Consumer Operations • Consumer and Insurance — We originate and service personal loans (secured and unsecured) through two business divisions: branch operations and centralized operations and offer credit insurance (life insurance, accident and health insurance, and involuntary unemployment insurance), non-credit insurance, and ancillary products, such as warranty protection. Branch operations primarily conduct business in 27 states, which are our core operating states. Our centralized operations underwrite and process certain loan applications that we receive from our branch operations or through an internet portal. If the applicant is located near an existing branch (“in footprint”), our centralized operations make the credit decision regarding the application and then request, but do not require, the customer to visit a nearby branch for closing, funding and servicing. If the applicant is not located near a branch (“out of footprint”), our centralized operations originate the loan. • Acquisitions and Servicing — We service the SpringCastle Portfolio that was acquired by an indirect subsidiary of SHI through a joint venture in which SFC currently owns a 47% equity interest. The SpringCastle Portfolio consists of unsecured loans and loans secured by subordinate residential real estate mortgages (which we service as unsecured loans due to the fact that the liens are subordinated to superior ranking security interests) and includes both closed-end accounts and open-end lines of credit. These loans vary in form and substance from our typical branch serviced loans and are in a liquidating status. Non-Core Portfolio • Real Estate — We service and hold real estate loans secured by first or second mortgages on residential real estate. Real estate loans previously originated through our branch offices or previously acquired or originated through centralized distribution channels are serviced by: (i) MorEquity and subserviced by Nationstar; (ii) Select Portfolio Servicing, Inc.; or (iii) our centralized operations. Investment funds managed by affiliates of Fortress indirectly own a majority interest in Nationstar. The remaining components (which we refer to as “Other”) consist of our other non-core, non-originating legacy operations, which are isolated by geographic market and/or distribution channel from our Core Consumer Operations and our Non-Core Portfolio. These operations include: (i) our legacy operations in 14 states where we have also ceased branch-based personal lending; (ii) our liquidating retail sales finance portfolio (including our retail sales finance accounts from our dedicated auto finance operation); (iii) our lending operations in Puerto Rico and the U.S. Virgin Islands; and (iv) the operations of our United Kingdom subsidiary. Due to the nature of the Fortress Acquisition, we applied push-down accounting. However, we report the operating results of our Core Consumer Operations, Non-Core Portfolio, and Other using the same accounting basis that we employed prior to the Fortress Acquisition, which we refer to as “historical accounting basis,” to provide a consistent basis for both management and other interested third parties to better understand the operating results of these segments. The historical accounting basis (which is a basis of accounting other than U.S. GAAP) also provides better comparability of the operating results of these segments to our competitors and other companies in the financial services industry. The historical accounting basis is not applicable to the Acquisitions and Servicing segment since this segment resulted from the SAC Capital Contribution subsequent to the Fortress Acquisition. The “Push-down Accounting Adjustments” column in the following tables primarily consists of: • the accretion or amortization of the valuation adjustments on the applicable revalued assets and liabilities; • the difference in finance charges on our purchased credit impaired finance receivables compared to the finance charges on these finance receivables on a historical accounting basis; • the elimination of accretion or amortization of historical based discounts, premiums, and other deferred costs on our finance receivables and long-term debt; • the difference in provision for finance receivable losses required based upon the differences in historical accounting basis and push-down accounting basis of the finance receivables; • the acceleration of the accretion of the net discount or amortization of the net premium applied to long-term debt that we repurchase or repay; • the reversal of the remaining unaccreted push-down accounting basis for net finance receivables, less allowance for finance receivable losses established at the date of the Fortress Acquisition on finance receivables held for sale that we sold; and • the difference in the fair value of long-term debt based upon the differences between historical accounting basis where certain long-term debt components are marked-to-market on a recurring basis, and push-down accounting basis where long-term debt is no longer marked-to-market on a recurring basis. The following tables present information about the Company’s segments as well as reconciliations to the condensed consolidated financial statement amounts. (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Other Push-down Consolidated Three Months Ended Interest income $ 289 $ 113 $ 17 $ 1 $ 3 $ 423 Interest expense 43 22 58 16 32 171 Provision for finance receivable losses 62 19 (4 ) — 5 82 Net interest income (loss) after provision for finance receivable losses 184 72 (37 ) (15 ) (34 ) 170 Other revenues 55 — (2 ) 4 (2 ) 55 Other expenses 157 14 8 2 1 182 Income (loss) before provision for (benefit from) income taxes 82 58 (47 ) (13 ) (37 ) 43 Income before provision for income taxes attributable to non-controlling interests — 31 — — — 31 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 82 $ 27 $ (47 ) $ (13 ) $ (37 ) $ 12 (dollars in millions) Consumer and Insurance Acquisitions Real Other Push-down Consolidated Three Months Ended Interest income $ 234 $ 84 $ 94 $ 4 $ 16 $ 432 Interest expense 39 12 83 2 36 172 Provision for finance receivable losses 55 18 37 2 (19 ) 93 Net interest income (loss) after provision for finance receivable losses 140 54 (26 ) — (1 ) 167 Other revenues 60 1 284 1 317 663 Other expenses 131 12 36 3 — 182 Income (loss) before provision for (benefit from) income taxes 69 43 222 (2 ) 316 648 Income before provision for income taxes attributable to non-controlling interests — 23 — — — 23 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 69 $ 20 $ 222 $ (2 ) $ 316 $ 625 (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Estate Other Eliminations Push-down Accounting Adjustments Consolidated Total At or for the Nine Months Ended Interest income $ 810 $ 356 $ 52 $ 6 $ — $ 10 $ 1,234 Interest expense 119 67 177 48 (5 ) 94 500 Provision for finance receivable losses 170 69 (7 ) 1 — 14 247 Net interest income (loss) after provision for finance receivable losses 521 220 (118 ) (43 ) 5 (98 ) 487 Other revenues 161 5 4 10 (5 ) (8 ) 167 Other expenses 448 45 24 17 — 3 537 Income (loss) before provision for (benefit from) income taxes 234 180 (138 ) (50 ) — (109 ) 117 Income before provision for income taxes attributable to non-controlling interests — 93 — — — — 93 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 234 $ 87 $ (138 ) $ (50 ) $ — $ (109 ) $ 24 Assets $ 5,628 $ 1,751 $ 3,551 $ 1,471 $ — $ (19 ) $ 12,382 (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Estate Other Push-down Accounting Adjustments Consolidated Total At or for the Nine Months Ended Interest income $ 663 $ 84 $ 382 $ 13 $ 84 $ 1,226 Interest expense 121 12 287 6 100 526 Provision for finance receivable losses 148 18 119 7 (18 ) 274 Net interest income (loss) after provision for finance receivable losses 394 54 (24 ) — 2 426 Other revenues 167 1 196 5 486 855 Other expenses 380 12 77 14 2 485 Income (loss) before provision for (benefit from) income taxes 181 43 95 (9 ) 486 796 Income before provision for income taxes attributable to non-controlling interests — 23 — — — 23 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 181 $ 20 $ 95 $ (9 ) $ 486 $ 773 Assets (a) (b) $ 4,626 $ 2,239 $ 3,720 $ 705 $ 16 $ 11,306 (a) As a result of our early adoption of ASU 2015-03, we reclassified $29 million of debt issuance costs from other assets to long-term debt as of September 30, 2014. (b) See Note 1 for further information on the correction of this prior period disclosure. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of a financial instrument is the amount that would be expected to be received if an asset were to be sold or the amount that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The degree of judgment used in measuring the fair value of financial instruments generally correlates with the level of pricing observability. Financial instruments with quoted prices in active markets generally have more pricing observability and less judgment is used in measuring fair value. Conversely, financial instruments traded in other-than-active markets or that do not have quoted prices have less observability and are measured at fair value using valuation models or other pricing techniques that require more judgment. An other-than-active market is one in which there are few transactions, the prices are not current, price quotations vary substantially either over time or among market makers, or little information is released publicly for the asset or liability being valued. Pricing observability is affected by a number of factors, including the type of financial instrument, whether the financial instrument is listed on an exchange or traded over-the-counter or is new to the market and not yet established, the characteristics specific to the transaction, and general market conditions. The following table summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values: Fair Value Measurements Using Total Total (dollars in millions) Level 1 Level 2 Level 3 September 30, 2015 Assets Cash and cash equivalents $ 2,461 $ 295 $ — $ 2,756 $ 2,756 Investment securities — 1,730 12 1,742 1,742 Net finance receivables, less allowance for finance receivable losses — — 6,667 6,667 6,040 Finance receivables held for sale — — 802 802 797 Note receivable from parent — 322 — 322 322 Restricted cash and cash equivalents 270 — — 270 270 Other assets: Commercial mortgage loans — — 71 71 71 Escrow advance receivable — — 10 10 10 Receivables from parent and affiliates — 7 — 7 7 Receivables related to sales of real estate loans and related trust assets — 3 — 3 9 Liabilities Long-term debt $ — $ 10,212 $ — $ 10,212 $ 9,555 Payables to parent and affiliates — 19 — 19 19 December 31, 2014 Assets Cash and cash equivalents $ 584 $ 165 $ — $ 749 $ 749 Investment securities — 2,913 9 2,922 2,922 Net finance receivables, less allowance for finance receivable losses — — 6,949 6,949 6,278 Finance receivables held for sale — — 209 209 205 Note receivable from parent — 251 — 251 251 Restricted cash and cash equivalents 218 — — 218 218 Other assets: Commercial mortgage loans — — 78 78 85 Escrow advance receivable — — 8 8 8 Receivables from parent and affiliates — 12 — 12 12 Receivables related to sales of real estate loans and related trust assets — 67 — 67 79 Liabilities Long-term debt $ — $ 9,182 $ — $ 9,182 $ 8,356 Payables to parent and affiliates — 48 — 48 48 FAIR VALUE MEASUREMENTS — RECURRING BASIS The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value: Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 September 30, 2015 Assets Cash equivalents in mutual funds $ 750 $ — $ — $ 750 Cash equivalents in certificates of deposit and commercial paper — 295 — 295 Investment securities: Available-for-sale securities: Bonds: U.S. government and government sponsored entities — 68 — 68 Obligations of states, municipalities, and political subdivisions — 84 — 84 Corporate debt — 245 — 245 RMBS — 79 — 79 CMBS — 39 — 39 CDO/ABS — 32 — 32 Total bonds — 547 — 547 Preferred stock — 6 10 16 Other long-term investments (a) — — 1 1 Total available-for-sale securities (b) — 553 11 564 Trading securities: Bonds: U.S. government and government sponsored entities — 783 — 783 Corporate debt — 196 — 196 RMBS — 2 — 2 CMBS — 45 — 45 CDO/ABS — 151 — 151 Total trading securities — 1,177 — 1,177 Total investment securities — 1,730 11 1,741 Restricted cash in mutual funds 252 — — 252 Total $ 1,002 $ 2,025 $ 11 $ 3,038 Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 December 31, 2014 Assets Cash equivalents in mutual funds $ 236 $ — $ — $ 236 Cash equivalents in certificates of deposit and commercial paper — 165 — 165 Investment securities: Available-for-sale securities: Bonds: U.S. government and government sponsored entities — 64 — 64 Obligations of states, municipalities, and political subdivisions — 102 — 102 Certificates of deposit and commercial paper — 1 — 1 Corporate debt — 263 4 267 RMBS — 73 — 73 CMBS — 21 3 24 CDO/ABS — 61 — 61 Total bonds — 585 7 592 Preferred stock — 7 — 7 Other long-term investments (a) — — 1 1 Total available-for-sale securities (b) — 592 8 600 Trading securities: Bonds: U.S. government and government sponsored entities — 302 — 302 Obligations of states, municipalities, and political subdivisions — 14 — 14 Certificates of deposit and commercial paper — 238 — 238 Non-U.S. government and government sponsored entities — 20 — 20 Corporate debt — 1,056 — 1,056 RMBS — 35 — 35 CMBS — 149 — 149 CDO/ABS — 507 — 507 Total trading securities — 2,321 — 2,321 Total investment securities — 2,913 8 2,921 Restricted cash in mutual funds 207 — — 207 Total $ 443 $ 3,078 $ 8 $ 3,529 (a) Other long-term investments excludes an immaterial interest in a limited partnership that we account for using the equity method. (b) Common stocks not carried at fair value totaled $1 million at September 30, 2015 and December 31, 2014 and, therefore, have been excluded from the table above. We had no transfers between Level 1 and Level 2 during the three and nine months ended September 30, 2015 . The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the three months ended September 30, 2015 : Net gains (losses) included in: Purchases, sales, issues, settlements * Transfers into Transfers Balance Balance at beginning of period Other revenues Other comprehensive income (loss) (dollars in millions) Three Months Ended Investment securities: Available-for-sale securities: Preferred stock $ — $ — $ — $ 10 $ — $ — $ 10 Other long-term investments 1 — — — — — 1 Total $ 1 $ — $ — $ 10 $ — $ — $ 11 * “Purchases, sales, issues, and settlements” column consisted only of purchases. The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the three months ended September 30, 2014 : Net gains (losses) included in: Purchases, Transfers into Transfers Balance Balance at beginning of period Other Other (dollars in millions) Three Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 5 $ — $ — $ — $ — $ — $ 5 Other long-term investments 1 — — — — — 1 Total available-for-sale securities 6 — — — — — 6 Trading securities: Bonds: CDO/ABS 6 — — — — — 6 Total $ 12 $ — $ — $ — $ — $ — $ 12 The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2015 : Net gains (losses) included in: Purchases, sales, issues, settlements (a) Transfers into Transfers Balance Balance at Other Other (dollars in millions) Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 4 $ — $ — $ (4 ) $ — $ — $ — CMBS 3 — — — — (3 ) — Total bonds 7 — — (4 ) — (3 ) — Preferred stock — — — 10 — — 10 Other long-term investments 1 — — — — — 1 Total $ 8 $ — $ — $ 6 $ — $ (3 ) $ 11 (a) The detail of purchases and settlements is presented in the table below: (dollars in millions) Purchases Settlements Total Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ — $ (4 ) $ (4 ) Preferred stock 10 — 10 Total $ 10 $ (4 ) $ 6 (b) During the nine months ended September 30, 2015 , we transferred CMBS securities totaling $3 million out of Level 3 primarily related to the greater observability of pricing inputs. The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2014 : Net gains (losses) included in: Purchases, sales, issues, settlements (a) Transfers into Level 3 (b) Transfers out of Level 3 (c) Balance at end of period Balance at beginning of period Other revenues Other comprehensive income (loss) (dollars in millions) Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 13 $ — $ — $ (8 ) $ — $ — $ 5 CDO/ABS 1 — — — — (1 ) — Total bonds 14 — — (8 ) — (1 ) 5 Other long-term investments 1 — — — — — 1 Total available-for-sale securities 15 — — (8 ) — (1 ) 6 Trading securities: Bonds: RMBS — — — — 1 (1 ) — CDO/ABS 7 — — — — (1 ) 6 Total trading securities 7 — — — 1 (2 ) 6 Total $ 22 $ — $ — $ (8 ) $ 1 $ (3 ) $ 12 (a) “Purchases, sales, issues, and settlements” column consisted only of settlements. (b) During the nine months ended September 30, 2014 , we transferred $1 million of RMBS securities into Level 3 primarily related to the re-evaluated observability of pricing inputs. (c) During the nine months ended September 30, 2014 , we transferred RMBS and CDO/ABS securities totaling $3 million out of Level 3 primarily related to the re-evaluated observability of pricing inputs. We used observable and/or unobservable inputs to determine the fair value of positions that we have classified within the Level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the Level 3 category presented in the Level 3 tables above may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. The unobservable inputs and quantitative data used in our Level 3 valuations for our investment securities were developed and used in models created by our third-party valuation service providers, which values were used by us for fair value disclosure purposes without adjustment. We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs for other long-term investments. As a result, the weighted average ranges of the inputs for these investment securities are not applicable in the following table. Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs is reasonably available to us at September 30, 2015 and December 31, 2014 is as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input September 30, 2015 December 31, 2014 Corporate debt Discounted cash flows Yield — 1.05% (a) RMBS Discounted cash flows Spread 743 bps (a) 736 bps (a) (b) CMBS Discounted cash flows Spread — 139 bps (a) (b) Other long-term investments Discounted cash flows and indicative valuations Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity N/A (c) N/A (c) Preferred stock Market approach Historical cost N/A (c) N/A (c) (a) At September 30, 2015 and December 31, 2014, RMBS consisted of one bond, which was less than $1 million . At December 31, 2014, corporate debt and CMBS also consisted of one bond. (b) During the first quarter of 2015, we identified that we incorrectly disclosed the weighted average ranges of our RMBS bond and CMBS bond as of December 31, 2014. The weighted average ranges of these bonds at December 31, 2014 have been corrected in the table above. (c) Not applicable. The fair values of the assets using significant unobservable inputs are sensitive and can be impacted by significant increases or decreases in any of those inputs. Level 3 broker-priced instruments, including RMBS (except for the one bond previously noted), CMBS (except for the one bond previously noted), and CDO/ABS, are excluded from the table above because the unobservable inputs are not reasonably available to us. Our RMBS, CMBS, and CDO/ABS securities have unobservable inputs that are reliant on and sensitive to the quality of their underlying collateral. The inputs, although not identical, have similar characteristics and interrelationships. Generally a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment speeds. An improvement in the workout criteria related to the restructured debt and/or debt covenants of the underlying collateral may lead to an improvement in the cash flows and have an inverse impact on other inputs, specifically a reduction in the amount of discount applied for marketability and liquidity, making the structured bonds more attractive to market participants. FAIR VALUE MEASUREMENTS — NON-RECURRING BASIS We measure the fair value of certain assets on a non-recurring basis when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows: Fair Value Measurements Using * (dollars in millions) Level 1 Level 2 Level 3 Total September 30, 2015 Assets Real estate owned $ — $ — $ 12 $ 12 Commercial mortgage loans — — 8 8 Total $ — $ — $ 20 $ 20 December 31, 2014 Assets Real estate owned $ — $ — $ 19 $ 19 Commercial mortgage loans — — 11 11 Total $ — $ — $ 30 $ 30 * The fair value information presented in the table above is as of the date the fair value adjustment was recorded. Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Assets Real estate owned $ 1 $ 3 $ 3 $ 13 Commercial mortgage loans — (1 ) (2 ) (2 ) Total $ 1 $ 2 $ 1 $ 11 In accordance with the authoritative guidance for the accounting for the impairment of long-lived assets, we wrote down certain real estate owned reported in our Real Estate segment to their fair value less cost to sell for the three and nine months ended September 30, 2015 and 2014 and recorded the writedowns in other revenues — other. The fair values of real estate owned disclosed in the table above are unadjusted for transaction costs as required by the authoritative guidance for fair value measurements. The amounts of real estate owned recorded in other assets are net of transaction costs as required by the authoritative guidance for accounting for the impairment of long-lived assets. In accordance with the authoritative guidance for the accounting for the impairment of commercial mortgage loans, we recorded allowance adjustments on certain impaired commercial mortgage loans reported in our Consumer and Insurance segment to record their fair value for the three and nine months ended September 30, 2015 and 2014 and recorded the net impairments in investment revenues. The inputs and quantitative data used in our Level 3 valuations for our real estate owned and commercial mortgage loans are unobservable primarily due to the unique nature of specific real estate assets. Therefore, we used independent third-party providers, familiar with local markets, to determine the values used for fair value disclosures without adjustment. We applied the third-party exception which allows us to omit certain quantitative disclosures about unobservable inputs. As a result, the weighted average ranges of the inputs are not applicable in the following table. Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at September 30, 2015 and December 31, 2014 is as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input September 30, 2015 December 31, 2014 Real estate owned Market approach Third-party valuation N/A* N/A* Commercial mortgage loans Market approach Income approach Cost approach Local market conditions Nature of investment Comparable property sales Operating performance N/A* N/A* * Not applicable. FAIR VALUE MEASUREMENTS — VALUATION METHODOLOGIES AND ASSUMPTIONS We use the following methods and assumptions to estimate fair value. Cash and Cash Equivalents The carrying amount of cash and cash equivalents, including cash and cash equivalents in certificates of deposit and commercial paper, approximates fair value. Mutual Funds The fair value of mutual funds is based on quoted market prices of the underlying shares held in the mutual funds. Investment Securities We utilize third-party valuation service providers to measure the fair value of our investment securities, which are classified as available-for-sale or as trading and consist primarily of bonds. Whenever available, we obtain quoted prices in active markets for identical assets at the balance sheet date to measure investment securities at fair value. We generally obtain market price data from exchange or dealer markets. We estimate the fair value of fixed maturity investment securities not traded in active markets by referring to traded securities with similar attributes, using dealer quotations and a matrix pricing methodology, or discounted cash flow analyses. This methodology considers such factors as the issuer’s industry, the security’s rating and tenor, its coupon rate, its position in the capital structure of the issuer, yield curves, credit curves, composite ratings, bid-ask spreads prepayment rates and other relevant factors. For fixed maturity investment securities that are not traded in active markets or that are subject to transfer restrictions, we adjust the valuations to reflect illiquidity and/or non-transferability. Such adjustments are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. We classify investment securities that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value as trading securities at fair value. The fair value of certificates of deposit and commercial paper having maturity dates greater than three months is based on the amortized cost, which is assumed to approximate fair value. Finance Receivables The fair value of net finance receivables, less allowance for finance receivable losses, both non-impaired and purchased credit impaired, are determined using discounted cash flow methodologies. The application of these methodologies requires us to make certain judgments and estimates based on our perception of market participant views related to the economic and competitive environment, the characteristics of our finance receivables, and other similar factors. The most significant judgments and estimates made relate to prepayment speeds, default rates, loss severity, and discount rates. The degree of judgment and estimation applied is significant in light of the current capital markets and, more broadly, economic environments. Therefore, the fair value of our finance receivables could not be determined with precision and may not be realized in an actual sale. Additionally, there may be inherent weaknesses in the valuation methodologies we employed, and changes in the underlying assumptions used could significantly affect the results of current or future values. Finance Receivables Held for Sale We determined the fair value of finance receivables held for sale that were originated as held for investment based on negotiations with prospective purchasers (if any) or by using projected cash flows discounted at the weighted-average interest rates offered by us in the market for similar finance receivables. We based cash flows on contractual payment terms adjusted for estimates of prepayments and credit related losses. Restricted Cash and Cash Equivalents The carrying amount of restricted cash and cash equivalents approximates fair value. Note Receivable from Parent The carrying amount of the note receivable from parent approximates the fair value because the note is payable on a demand basis prior to its due date on May 31, 2022 and the interest rate on this note adjusts with changing market interest rates. Commercial Mortgage Loans Given the short remaining average life of the portfolio, the carrying amount of commercial mortgage loans approximates fair value. The carrying amount includes an estimate for credit related losses which is based on independent third-party valuations. Real Estate Owned We initially based our estimate of the fair value on independent third-party valuations at the time we took title to real estate owned. Subsequent changes in fair value are based upon independent third-party valuations obtained periodically to estimate a price that would be received in a then current transaction to sell the asset. Escrow Advance Receivable The carrying amount of escrow advance receivable approximates fair value. Receivables from Parent and Affiliates The carrying amount of receivables from parent and affiliates approximates fair value. Receivables Related to Sales of Real Estate Loans and Related Trust Assets The carrying amount of receivables related to sales of real estate loans and related trust assets less estimated forfeitures, which are reflected in other liabilities, approximates fair value. Long-term Debt We either receive fair value measurements of our long-term debt from market participants and pricing services or we estimate the fair values of long-term debt using projected cash flows discounted at each balance sheet date’s market-observable implicit-credit spread rates for our long-term debt. We record at fair value long-term debt issuances that are deemed to incorporate an embedded derivative and for which it is impracticable for us to isolate and/or value the derivative. At September 30, 2015 , we had no debt carried at fair value under the fair value option. Payables to Parent and Affiliates The fair value of payable to parent and affiliates approximates the carrying value due to its short-term nature. |
Business and Basis of Present25
Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION We prepared our condensed consolidated financial statements using generally accepted accounting principles in the United States of America (“U.S. GAAP”). These statements are unaudited. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by U.S. GAAP. The statements include the accounts of SFC, its subsidiaries (all of which are wholly owned, except for certain subsidiaries associated with a joint venture in which we own a 47% equity interest), and variable interest entities (“VIEs”) in which we hold a controlling financial interest and for which we are considered to be the primary beneficiary as of the financial statement date. We eliminated all material intercompany accounts and transactions. We made judgments, estimates, and assumptions that affect amounts reported in our condensed consolidated financial statements and disclosures of contingent assets and liabilities. In management’s opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for a fair statement of results. Ultimate results could differ from our estimates. We evaluated the effects of and the need to disclose events that occurred subsequent to the balance sheet date. These statements should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (“ 2014 Annual Report on Form 10-K”). We follow the same significant accounting policies for our interim reporting. |
Recent Accounting Pronounceme26
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Recent Accounting Pronouncements [Abstract] | |
New Accounting Pronouncements | ACCOUNTING PRONOUNCEMENTS RECENTLY ADOPTED Troubled Debt Restructurings In January of 2014, the Financial Accounting Standards Board (the “FASB”) issued ASU 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure , which clarifies when an in substance repossession or foreclosure occurs — that is, when a creditor should be considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan such that the loan receivable should be derecognized and the real estate property recognized. The ASU requires a creditor to reclassify a collateralized consumer mortgage loan to real estate property upon obtaining legal title to the real estate collateral, or the borrower voluntarily conveying all interest in the real estate property to the lender to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The amendments in this ASU became effective prospectively for the Company for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. Debt Issuance Costs In April of 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest , which simplifies the presentation of debt issuance costs. Under this standard, debt issuance costs related to a note shall be reported in the balance sheet as a direct reduction from the face amount of that note. The ASU also clarifies that discount, premium or debt issuance costs shall not be classified as a deferred charge or deferred credit. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted for financial statements that have not been previously issued and must be applied retrospectively. We elected to early adopt this ASU as of June 30, 2015 and applied this ASU retrospectively. On June 30, 2015, we reclassified $32 million of debt issuance costs previously recorded in other assets to long-term debt. After retrospectively applying this new ASU, we also reclassified $29 million of debt issuance costs as of December 31, 2014 from other assets to long-term debt in our condensed consolidated balance sheet. We continue to report fees paid to access our conduit facilities in other assets. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. In August of 2015, the FASB issued ASU 2015-15, Interest - Imputation of Interest , to clarify that debt issuance costs associated with line-of-credit arrangements are to be deferred and amortized over the term of the arrangement. The amendment also acknowledged absence of authoritative guidance within previously issued ASU 2015-03 for debt issuance costs related to line-of-credit arrangements. The ASU is effective immediately. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements, as we were already in compliance with these amendments. Push Down Accounting In May of 2015, the FASB issued ASU 2015-08, Business Combinations-Pushdown Accounting , to remove Securities and Exchange Commission (the “SEC”) staff guidance on pushdown accounting from the Accounting Standards Codification. The SEC staff had previously rescinded its guidance with the issuance of Staff Accounting Bulletin No. 115 when the FASB issued its own pushdown accounting guidance in November 2014. The ASU is effective immediately. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements. Plan Accounting In July of 2015, the FASB issued ASU 2015-12, Plan Accounting , to simplify certain aspects of employee benefit plan (“EBP”) accounting while satisfying the needs of users of financial statements, including plan participants. The new guidance simplifies the measurement of fully benefit-responsive investment contracts and disclosures about plan investments. It also allows an EBP with a fiscal year end that doesn’t coincide with the end of a calendar month to choose a simpler way of measuring its investments and investment-related accounts. The ASU is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We elected to early adopt this ASU as of September 30, 2015. The adoption of this ASU did not have a material effect on our condensed consolidated financial statements, as we were already in compliance with these amendments. ACCOUNTING PRONOUNCEMENTS TO BE ADOPTED Revenue Recognition In May of 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which provides a consistent revenue accounting model across industries. In August of 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers - Deferral of the Effective Date , to defer the effective date of the new revenue recognition standard by one year, which would result in the ASU becoming effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Many of our revenue sources are not within the scope of this new standard, and we are evaluating whether the adoption of this ASU for those revenue sources that are in scope will have a material effect on our consolidated financial statements. Consolidation In February of 2015, the FASB issued ASU 2015-02, Consolidation - Amendments to the Consolidation Analysis , which amends the current consolidation guidance and ends the deferral granted to reporting entities with variable interests in investment companies from applying certain prior amendments to the VIE guidance. This ASU is applicable to entities across all industries, particularly those that use limited partnerships as well as entities in any industry that outsource decision making or have historically applied related party tiebreaker in their consolidation analysis and disclosures. The standard is effective for public business entities for annual periods beginning after December 15, 2015. Early adoption is allowed, including in any interim period. We are currently evaluating whether the adoption of this ASU will have a material effect on our consolidated financial statements. Cloud Computing Software In April of 2015, the FASB issued ASU 2015-05, Intangibles-Goodwill and Other Internal-Use Software , to provide guidance on a customer’s accounting for fees paid in a cloud computing arrangement (“CCA”). Under the new standard, customers will apply the same criteria as vendors to determine whether a CCA contains a software license or is solely a service contract. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We evaluated the potential impact of adopting this ASU and concluded that it will not have a material effect on our consolidated financial statements. Fair Value Measurement Disclosures In May of 2015, the FASB issued ASU 2015-07, Fair Value Measurement , to remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We have a few investments for which fair value is measured using the net asset value per share practical expedient. However, application of this ASU will not have a material effect on our consolidated financial statements. Short-Duration Insurance Contracts Disclosures In May of 2015, the FASB issued ASU 2015-09, Disclosures about Short-Duration Contracts , to address enhanced disclosure requirements for insurers relating to short-duration insurance contract claims and unpaid claims liability rollforward for long and short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. The ASU is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. We are currently evaluating the potential impact of adopting the ASU on our consolidated financial statements. Technical Corrections and Improvements In June of 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements , to correct differences between original guidance and the Codification, clarify the guidance, correct references and make minor improvements affecting a variety of topics. While most of the amendments are not expected to have a significant effect on practice, some of them could change practice for some entities. The amendments to transition guidance are effective for fiscal years beginning after December 15, 2015; all other changes are effective upon issuance of this ASU. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. Business Combination Adjustments In September of 2015, the FASB issued ASU 2015-16, Business Combinations , to eliminate the requirement to restate prior period financial statements for measurement period adjustments. This update requires the cumulative impact of a measurement period adjustment, including the impact on prior periods, to be recognized in the reporting period in which the adjustment is identified. The ASU is effective for fiscal years beginning after December 15, 2015. Early adoption is permitted. We are currently evaluating the potential impact of this ASU on our consolidated financial statements. We do not believe that any other recently issued, but not yet effective, accounting pronouncements, if adopted, would have a material impact on our consolidated financial statements or disclosures. |
Business and Basis of Present27
Business and Basis of Presentation Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of revised condensed consolidated financial statements | We will also correct the prior period segment disclosures presented in our applicable quarterly and annual reports as follows: (dollars in millions) Consumer Real Other Assets * March 31, 2015 $ 5,070 $ 3,613 $ 1,832 December 31, 2014 4,462 3,666 555 September 30, 2014 4,651 3,720 705 June 30, 2014 4,406 6,561 1,058 December 31, 2013 4,200 8,512 611 * The revised amounts do not reflect the retrospective reclassifications of our debt issuance costs previously recorded in other assets to long-term debt, as a result of our early adoption of ASU 2015-03. |
Finance Receivables (Tables)
Finance Receivables (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financing Receivable, Impaired [Line Items] | |
Schedule of components of net finance receivables by type | Components of net finance receivables by type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Gross receivables * $ 4,694 $ 1,635 $ 543 $ 30 $ 6,902 Unearned finance charges and points and fees (802 ) — — (3 ) (805 ) Accrued finance charges 56 32 4 — 92 Deferred origination costs 42 — — — 42 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Gross receivables * $ 4,462 $ 1,941 $ 621 $ 52 $ 7,076 Unearned finance charges and points and fees (764 ) — (1 ) (5 ) (770 ) Accrued finance charges 58 38 5 1 102 Deferred origination costs 44 — — — 44 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 * Gross receivables are defined as follows: • finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its fair value; • finance receivables originated subsequent to the Fortress Acquisition (as defined in the Purchased Credit Impaired Finance Receivables section located in this Note) — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and • purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts. |
Schedule of unused credit lines extended to customers by the Company | Unused lines of credit extended to customers by the Company were as follows: (dollars in millions) September 30, December 31, Personal loans $ 2 $ 1 SpringCastle Portfolio 366 354 Real estate loans 31 31 Total $ 399 $ 386 |
Summary of net finance receivables by type and by days delinquent | The following is a summary of net finance receivables by type and by days delinquent: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Net finance receivables: 60-89 days past due $ 47 $ 24 $ 16 $ 1 $ 88 90-119 days past due 36 15 4 — 55 120-149 days past due 29 11 3 — 43 150-179 days past due 23 9 2 — 34 180 days or more past due 2 1 12 — 15 Total delinquent finance receivables 137 60 37 1 235 Current 3,784 1,562 497 25 5,868 30-59 days past due 69 45 13 1 128 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Net finance receivables: 60-89 days past due $ 36 $ 31 $ 12 $ 1 $ 80 90-119 days past due 30 19 9 — 58 120-149 days past due 24 16 5 1 46 150-179 days past due 21 14 4 — 39 180 days or more past due 2 2 12 — 16 Total delinquent finance receivables 113 82 42 2 239 Current 3,632 1,839 565 45 6,081 30-59 days past due 55 58 18 1 132 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 |
Schedule of performing and nonperforming net finance receivables by type | Our performing and nonperforming net finance receivables by type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Retail Total September 30, 2015 Performing $ 3,900 $ 1,631 $ 526 $ 27 $ 6,084 Nonperforming 90 36 21 — 147 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Performing $ 3,723 $ 1,928 $ 595 $ 47 $ 6,293 Nonperforming 77 51 30 1 159 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 |
Schedule of information regarding purchased credit impaired finance receivables | Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) FA Loans September 30, 2015 Carrying amount, net of allowance $ 62 Outstanding balance 91 December 31, 2014 Carrying amount, net of allowance $ 68 Outstanding balance 99 Information regarding our purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans * Total September 30, 2015 Carrying amount, net of allowance $ 251 $ 86 $ 337 Outstanding balance 515 139 654 Allowance for purchased credit impaired finance receivable losses — 5 5 December 31, 2014 Carrying amount, net of allowance $ 340 $ 93 $ 433 Outstanding balance 628 151 779 Allowance for purchased credit impaired finance receivable losses — 5 5 * Purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) FA Loans September 30, 2015 Carrying amount, net of allowance $ 62 Outstanding balance 91 December 31, 2014 Carrying amount, net of allowance $ 68 Outstanding balance 99 |
Schedule of changes in accretable yield for purchased credit impaired finance receivables | Changes in accretable yield for purchased credit impaired finance receivables held for investment and held for sale were as follows: (dollars in millions) SCP Loans FA Loans Total Three Months Ended September 30, 2015 Balance at beginning of period $ 474 $ 13 $ 487 Accretion (a) (20 ) (3 ) (23 ) Disposals of finance receivables (b) (7 ) — (7 ) Balance at end of period $ 447 $ 10 $ 457 Three Months Ended September 30, 2014 Balance at beginning of period $ — $ 623 $ 623 Accretable yield for SpringCastle Portfolio contributed to SFC 260 — 260 Accretion (a) (11 ) (20 ) (31 ) Transfers due to finance receivables sold — (559 ) (559 ) Disposals of finance receivables (b) (3 ) (4 ) (7 ) Balance at end of period $ 246 $ 40 $ 286 Nine Months Ended September 30, 2015 Balance at beginning of period $ 541 $ 19 $ 560 Accretion (a) (66 ) (8 ) (74 ) Disposals of finance receivables (b) (28 ) (1 ) (29 ) Balance at end of period $ 447 $ 10 $ 457 Nine Months Ended September 30, 2014 Balance at beginning of period $ — $ 767 $ 767 Accretable yield for SpringCastle Portfolio contributed to SFC 260 — 260 Accretion (a) (11 ) (75 ) (86 ) Transfers due to finance receivables sold — (637 ) (637 ) Disposals of finance receivables (b) (3 ) (15 ) (18 ) Balance at end of period $ 246 $ 40 $ 286 (a) Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accretion $ 2 $ 11 $ 5 $ 11 (b) Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period. Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accretion $ 2 $ 11 $ 5 $ 11 |
Schedule of information regarding troubled debt restructured ("TDR") finance receivables | (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Three Months Ended September 30, 2015 TDR net finance receivables (b) (c) $ 1 $ — $ 1 $ 2 Number of TDR accounts 342 26 9 377 Three Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 2 $ 2 Number of TDR accounts 42 11 54 107 Nine Months Ended September 30, 2015 TDR net finance receivables (b) $ 3 $ 1 $ 2 $ 6 Number of TDR accounts 855 122 35 1,012 Nine Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 31 $ 31 Number of TDR accounts 74 11 488 573 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR net finance receivables * $ — Number of TDR accounts 1 Three Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 Nine Months Ended September 30, 2015 TDR net finance receivables $ 1 Number of TDR accounts 14 Nine Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 * TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. (b) Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. (c) TDR personal loans and SpringCastle Portfolio loans for the three and nine months ended September 30, 2014 and TDR SpringCastle Portfolio loans for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR average net receivables $ 92 TDR finance charges recognized 2 Three Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 Nine Months Ended September 30, 2015 TDR average net receivables $ 91 TDR finance charges recognized 4 Nine Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total September 30, 2015 TDR gross finance receivables $ 2 $ 92 $ 94 TDR net finance receivables 2 92 94 December 31, 2014 TDR gross finance receivables $ — $ 91 $ 91 TDR net finance receivables — 91 91 ) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 1 $ 1 Post-modification TDR net finance receivables * $ — $ 2 $ 2 Number of TDR accounts 50 33 83 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 4 $ 4 Post-modification TDR net finance receivables * $ — $ 5 $ 5 Number of TDR accounts 50 77 127 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 * Pre-modification and post-modification TDR personal loans held for sale for the three and nine months ended September 30, 2015 were less than $ 1 million and, therefore, are not quantified in the table above TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR net finance receivables * $ — Number of TDR accounts 1 Three Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 Nine Months Ended September 30, 2015 TDR net finance receivables $ 1 Number of TDR accounts 14 Nine Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 * TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. Information regarding TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total September 30, 2015 TDR gross finance receivables (b) $ 30 $ 14 $ 199 $ 243 TDR net finance receivables 29 12 200 241 Allowance for TDR finance receivable losses 7 4 30 41 December 31, 2014 TDR gross finance receivables (b) $ 22 $ 11 $ 196 $ 229 TDR net finance receivables 22 10 196 228 Allowance for TDR finance receivable losses 1 3 32 36 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total September 30, 2015 TDR gross finance receivables $ 2 $ 92 $ 94 TDR net finance receivables 2 92 94 December 31, 2014 TDR gross finance receivables $ — $ 91 $ 91 TDR net finance receivables — 91 91 (b) As defined earlier in this Note. |
Schedule of TDR average net receivables and finance charges recognized on TDR finance receivables | TDR average net receivables held for investment and held for sale and finance charges recognized on TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans SpringCastle Portfolio Real Estate Loans (a) Total Three Months Ended September 30, 2015 TDR average net receivables $ 30 $ 12 $ 199 $ 241 TDR finance charges recognized — 1 2 3 Three Months Ended September 30, 2014 TDR average net receivables (b) $ 17 $ 8 $ 797 $ 822 TDR finance charges recognized — — 10 10 Nine Months Ended September 30, 2015 TDR average net receivables $ 28 $ 12 $ 197 $ 237 TDR finance charges recognized 2 1 8 11 Nine Months Ended September 30, 2014 TDR average net receivables (b) $ 15 $ 8 $ 1,187 $ 1,210 TDR finance charges recognized 1 — 45 46 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR average net receivables $ 92 TDR finance charges recognized 2 Three Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 Nine Months Ended September 30, 2015 TDR average net receivables $ 91 TDR finance charges recognized 4 Nine Months Ended September 30, 2014 TDR average net receivables $ 413 TDR finance charges recognized 3 (b) TDR SpringCastle Portfolio loans average net receivables for the three and nine months ended September 30, 2014 reflect a two-month average since the SAC Capital Contribution occurred on July 31, 2014. |
Schedule of information regarding new volume of the TDR finance receivables | Information regarding the new volume of the TDR finance receivables held for investment and held for sale were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables $ 8 $ 1 $ 6 $ 15 Post-modification TDR net finance receivables: Rate reduction $ 3 $ 1 $ 3 $ 7 Other (b) 3 — 2 5 Total post-modification TDR net finance receivables $ 6 $ 1 $ 5 $ 12 Number of TDR accounts 1,545 142 95 1,782 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ 5 $ 2 $ 28 $ 35 Post-modification TDR net finance receivables: Rate reduction $ 3 $ 2 $ 26 $ 31 Other (b) 2 — 4 6 Total post-modification TDR net finance receivables $ 5 $ 2 $ 30 $ 37 Number of TDR accounts 1,125 246 403 1,774 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables $ 24 $ 5 $ 16 $ 45 Post-modification TDR net finance receivables: Rate reduction $ 11 $ 5 $ 12 $ 28 Other (b) 9 — 4 13 Total post-modification TDR net finance receivables $ 20 $ 5 $ 16 $ 41 Number of TDR accounts 4,860 550 272 5,682 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ 11 $ 2 $ 209 $ 222 Post-modification TDR net finance receivables: Rate reduction $ 7 $ 2 $ 154 $ 163 Other (b) 4 — 45 49 Total post-modification TDR net finance receivables $ 11 $ 2 $ 199 $ 212 Number of TDR accounts 2,678 246 2,290 5,214 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Personal Loans Real Estate Loans Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 1 $ 1 Post-modification TDR net finance receivables * $ — $ 2 $ 2 Number of TDR accounts 50 33 83 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $ — $ 4 $ 4 Post-modification TDR net finance receivables * $ — $ 5 $ 5 Number of TDR accounts 50 77 127 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $ — $ 6 $ 6 Post-modification TDR net finance receivables $ — $ 7 $ 7 Number of TDR accounts — 89 89 * Pre-modification and post-modification TDR personal loans held for sale for the three and nine months ended September 30, 2015 were less than $ 1 million and, therefore, are not quantified in the table above. |
Schedule of net finance receivables that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause TDR finance receivables to be considered nonperforming | Net finance receivables held for investment and held for sale that were modified as TDR finance receivables within the previous 12 months and for which there was a default during the period to cause the TDR finance receivables to be considered nonperforming (90 days or more past due) were as follows: (dollars in millions) Personal Loans (a) SpringCastle Portfolio Real Estate Total Three Months Ended September 30, 2015 TDR net finance receivables (b) (c) $ 1 $ — $ 1 $ 2 Number of TDR accounts 342 26 9 377 Three Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 2 $ 2 Number of TDR accounts 42 11 54 107 Nine Months Ended September 30, 2015 TDR net finance receivables (b) $ 3 $ 1 $ 2 $ 6 Number of TDR accounts 855 122 35 1,012 Nine Months Ended September 30, 2014 TDR net finance receivables (b) (c) $ — $ — $ 31 $ 31 Number of TDR accounts 74 11 488 573 (a) TDR finance receivables held for sale included in the table above were as follows: (dollars in millions) Real Estate Loans Three Months Ended September 30, 2015 TDR net finance receivables * $ — Number of TDR accounts 1 Three Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 Nine Months Ended September 30, 2015 TDR net finance receivables $ 1 Number of TDR accounts 14 Nine Months Ended September 30, 2014 TDR net finance receivables $ 2 Number of TDR accounts 30 * TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. (b) Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. (c) TDR personal loans and SpringCastle Portfolio loans for the three and nine months ended September 30, 2014 and TDR SpringCastle Portfolio loans for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. |
Allowance for Finance Receiva29
Allowance for Finance Receivable Losses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Loans and Leases Receivable, Allowance [Abstract] | |
Schedule of changes in the allowance for finance receivable losses by finance receivable type | Changes in the allowance for finance receivable losses by finance receivable type were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Consolidated Total Three Months Ended September 30, 2015 Balance at beginning of period $ 139 $ 3 $ 35 $ 1 $ 178 Provision for finance receivable losses 60 20 2 — 82 Charge-offs (57 ) (22 ) (4 ) — (83 ) Recoveries 10 3 2 — 15 Reduction in the carrying value of personal loans transferred to finance receivables held for sale (a) (1 ) — — — (1 ) Balance at end of period $ 151 $ 4 $ 35 $ 1 $ 191 Three Months Ended September 30, 2014 Balance at beginning of period $ 106 $ — $ 259 $ 1 $ 366 Provision for finance receivable losses 58 18 16 1 93 Charge-offs (48 ) (20 ) (13 ) (1 ) (82 ) Recoveries 7 2 — — 9 Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (b) — — (225 ) — (225 ) Allowance for SpringCastle Portfolio contributed to SFC — 1 — — 1 Balance at end of period $ 123 $ 1 $ 37 $ 1 $ 162 Nine Months Ended September 30, 2015 Balance at beginning of period $ 130 $ 3 $ 40 $ 1 $ 174 Provision for finance receivable losses 170 70 6 1 247 Charge-offs (176 ) (78 ) (15 ) (2 ) (271 ) Recoveries 28 9 4 1 42 Reduction in the carrying value of personal loans transferred to finance receivables held for sale (a) (1 ) — — — (1 ) Balance at end of period $ 151 $ 4 $ 35 $ 1 $ 191 Nine Months Ended September 30, 2014 Balance at beginning of period $ 94 $ — $ 236 $ 2 $ 332 Provision for finance receivable losses 150 18 103 3 274 Charge-offs (139 ) (20 ) (67 ) (4 ) (230 ) Recoveries (c) 18 2 5 — 25 Reduction in the carrying value of real estate loans transferred to finance receivables held for sale (b) — — (240 ) — (240 ) Allowance for SpringCastle Portfolio contributed to SFC — 1 — — 1 Balance at end of period $ 123 $ 1 $ 37 $ 1 $ 162 (a) During the three and nine months ended September 30, 2015 , we reduced the carrying value of certain personal loans to $608 million as a result of the transfer of these finance receivables from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. (b) During the three and nine months ended September 30, 2014 , we reduced the carrying value of certain real estate loans to $5.3 billion and $6.6 billion , respectively, as a result of the transfer of these loans from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. (c) Recoveries during the nine months ended September 30, 2014 included $2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March of 2014. |
Schedule of carrying value charged-off for purchased credit impaired loans | The carrying value charged-off for purchased credit impaired loans was as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Charged-off against provision for finance receivable losses: SCP Loans $ 4 $ 5 $ 17 $ 5 FA Loans gross charge-offs * — 2 1 15 * Represents additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status. |
Schedule of allowance for finance receivable losses and net finance receivables by type and by impairment method | The allowance for finance receivable losses and net finance receivables by type and by impairment method were as follows: (dollars in millions) Personal SpringCastle Portfolio Real Estate Loans Retail Total September 30, 2015 Allowance for finance receivable losses for finance receivables: Collectively evaluated for impairment $ 144 $ — $ — $ 1 $ 145 Acquired with deteriorated credit quality (purchased credit impaired finance receivables) — — 5 — 5 Individually evaluated for impairment (TDR finance receivables) 7 4 30 — 41 Total $ 151 $ 4 $ 35 $ 1 $ 191 Finance receivables: Collectively evaluated for impairment $ 3,963 $ 1,404 $ 410 $ 27 $ 5,804 Purchased credit impaired finance receivables — 251 29 — 280 TDR finance receivables 27 12 108 — 147 Total $ 3,990 $ 1,667 $ 547 $ 27 $ 6,231 December 31, 2014 Allowance for finance receivable losses for finance receivables: Collectively evaluated for impairment $ 129 $ — $ 3 $ 1 $ 133 Purchased credit impaired finance receivables — — 5 — 5 TDR finance receivables 1 3 32 — 36 Total $ 130 $ 3 $ 40 $ 1 $ 174 Finance receivables: Collectively evaluated for impairment $ 3,778 $ 1,629 $ 490 $ 48 $ 5,945 Purchased credit impaired finance receivables — 340 30 — 370 TDR finance receivables 22 10 105 — 137 Total $ 3,800 $ 1,979 $ 625 $ 48 $ 6,452 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investment securities | |
Schedule of the cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type | Cost/amortized cost, unrealized gains and losses, and fair value of available-for-sale securities by type were as follows: (dollars in millions) Cost/ Amortized Cost Unrealized Gains Unrealized Losses Fair Value September 30, 2015 Fixed maturity available-for-sale securities: Bonds: U.S. government and government sponsored entities $ 69 $ — $ (1 ) $ 68 Obligations of states, municipalities, and political subdivisions 83 1 — 84 Corporate debt 248 3 (6 ) 245 Mortgage-backed, asset-backed, and collateralized: Residential mortgage-backed securities (“RMBS”) 79 — — 79 Commercial mortgage-backed securities (“CMBS”) 39 — — 39 Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) 32 — — 32 Total bonds 550 4 (7 ) 547 Preferred stock 16 — — 16 Other long-term investments 1 — — 1 Total (a) $ 567 $ 4 $ (7 ) $ 564 December 31, 2014 Fixed maturity available-for-sale securities: Bonds: U.S. government and government sponsored entities $ 61 $ 3 $ — $ 64 Obligations of states, municipalities, and political subdivisions 99 3 — 102 Certificates of deposit and commercial paper (b) 1 — — 1 Corporate debt 256 12 (1 ) 267 Mortgage-backed, asset-backed, and collateralized: RMBS 71 2 — 73 CMBS 25 — (1 ) 24 CDO/ABS 61 — — 61 Total bonds 574 20 (2 ) 592 Preferred stock 7 — — 7 Other long-term investments 1 — — 1 Total (a) $ 582 $ 20 $ (2 ) $ 600 (a) Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at September 30, 2015 and December 31, 2014 , which is classified as a restricted investment and carried at cost. (b) Includes certificates of deposit pledged as collateral, totaling $2 million at December 31, 2014, primarily to support bank lines of credit. |
Schedule of fair value and unrealized losses on investment securities by type and length of time in a continuous unrealized loss position | Fair value and unrealized losses on available-for-sale securities by type and length of time in a continuous unrealized loss position were as follows: Less Than 12 Months 12 Months or Longer Total (dollars in millions) Fair Value Unrealized Losses * Fair Value Unrealized Losses * Fair Value Unrealized Losses September 30, 2015 Bonds: U.S. government and government sponsored entities $ 51 $ (1 ) $ — $ — $ 51 $ (1 ) Obligations of states, municipalities, and political subdivisions 15 — 11 — 26 — Corporate debt 107 (6 ) 14 — 121 (6 ) RMBS 8 — — — 8 — CMBS 19 — 7 — 26 — CDO/ABS 16 — — — 16 — Total bonds 216 (7 ) 32 — 248 (7 ) Preferred stock 6 — — — 6 — Other long-term investments 1 — — — 1 — Total $ 223 $ (7 ) $ 32 $ — $ 255 $ (7 ) December 31, 2014 Bonds: U.S. government and government sponsored entities $ — $ — $ 1 $ — $ 1 $ — Obligations of states, municipalities, and political subdivisions 27 — 1 — 28 — Corporate debt 36 (1 ) 6 — 42 (1 ) RMBS 9 — — — 9 — CMBS 16 (1 ) 2 — 18 (1 ) CDO/ABS 46 — — — 46 — Total bonds 134 (2 ) 10 — 144 (2 ) Preferred stock 6 — — — 6 — Total $ 140 $ (2 ) $ 10 $ — $ 150 $ (2 ) * Unrealized losses on certain available-for-sale securities were less than $1 million and, therefore, are not quantified in the table above. |
Schedule of contractual maturities of fixed-maturity available-for-sale securities | Contractual maturities of fixed-maturity available-for-sale securities at September 30, 2015 were as follows: (dollars in millions) Fair Value Amortized Cost Fixed maturities, excluding mortgage-backed, asset-backed, and collateralized securities: Due in 1 year or less $ 72 $ 72 Due after 1 year through 5 years 150 150 Due after 5 years through 10 years 57 57 Due after 10 years 118 121 Mortgage-backed, asset-backed, and collateralized securities 150 150 Total $ 547 $ 550 |
Schedule of fair value of trading securities by type | The fair value of trading securities by type was as follows: (dollars in millions) September 30, December 31, Fixed maturity trading securities: Bonds: U.S. government and government sponsored entities $ 783 $ 302 Obligations of states, municipalities, and political subdivisions — 14 Certificates of deposit and commercial paper — 238 Non-U.S. government and government sponsored entities — 20 Corporate debt 196 1,056 Mortgage-backed, asset-backed, and collateralized: RMBS 2 35 CMBS 45 149 CDO/ABS 151 507 Total $ 1,177 $ 2,321 |
Available-for-sale securities | |
Investment securities | |
Schedule of realized gains, realized losses, and net realized gains due to sale or redemption of fair values of available-for-sale securities | The fair values of available-for-sale securities sold or redeemed and the resulting realized gains, realized losses, and net realized gains were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Fair value $ 168 $ 105 $ 372 $ 203 Realized gains $ 4 $ 5 $ 15 $ 7 Realized losses — — (1 ) — Net realized gains $ 4 $ 5 $ 14 $ 7 |
Trading securities | |
Investment securities | |
Schedule of net unrealized and realized gains (losses) on trading securities | The net unrealized and realized gains (losses) on our trading securities, which we report in investment revenues, were as follows: (dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Net unrealized gains (losses) on trading securities held at period end $ (1 ) $ (2 ) $ 3 $ (1 ) Net realized losses on trading securities sold or redeemed (1 ) — (2 ) — Total $ (2 ) $ (2 ) $ 1 $ (1 ) |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of principal maturities of long-term debt by type of debt | Principal maturities of long-term debt (excluding projected securitization repayments by period) by type of debt at September 30, 2015 were as follows: (dollars in millions) Medium Term Notes Securitizations Junior Subordinated Debt Total Interest rates (a) 5.25%-8.25% 1.87%-6.82% 6.00 % Fourth quarter 2015 $ 750 $ — $ — $ 750 First quarter 2016 — — — — Second quarter 2016 — — — — Third quarter 2016 375 — — 375 Remainder of 2016 — — — — 2017 1,902 — — 1,902 2018 — — — — 2019 700 — — 700 2020-2067 1,250 — 350 1,600 Securitizations (b) — 4,784 — 4,784 Total principal maturities $ 4,977 $ 4,784 $ 350 $ 10,111 Total carrying amount (c) $ 4,613 $ 4,771 $ 171 $ 9,555 Debt issuance costs (d) $ (13 ) $ (17 ) $ — $ (30 ) (a) The interest rates shown are the range of contractual rates in effect at September 30, 2015 . (b) Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 11 for further information on our long-term debt associated with securitizations. (c) The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. (d) As a result of our early adoption of ASU 2015-03 in June of 2015, we report debt issuance costs as a direct deduction from long-term debt. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Variable Interest Entities | |
Schedule of carrying amounts of consolidated VIE assets and liabilities associated with securitization trusts | The carrying amounts of consolidated VIE assets and liabilities associated with our securitization trusts were as follows: (dollars in millions) September 30, December 31, Assets Finance receivables: Personal loans $ 2,096 $ 1,853 SpringCastle Portfolio 1,667 1,979 Allowance for finance receivable losses 131 72 Finance receivables held for sale 484 — Restricted cash and cash equivalents 256 210 Liabilities Long-term debt * $ 4,771 $ 3,630 * As a result of our early adoption of ASU 2015-03 in June of 2015, we reclassified $14 million of debt issuance costs related to our long-term debt associated with our securitizations as of December 31, 2014 , from other assets to long-term debt. |
Accumulated Other Comprehensi33
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of changes in accumulated other comprehensive income | Changes in accumulated other comprehensive income (loss) were as follows: (dollars in millions) Unrealized Gains Investment Securities Retirement Plan Liabilities Adjustments Foreign Currency Translation Adjustments Total Accumulated Other Comprehensive Income (Loss) Three Months Ended September 30, 2015 Balance at beginning of period $ 2 $ (13 ) $ 4 $ (7 ) Other comprehensive loss before reclassifications (2 ) — — (2 ) Reclassification adjustments from accumulated other comprehensive income (loss) (2 ) — — (2 ) Balance at end of period $ (2 ) $ (13 ) $ 4 $ (11 ) Three Months Ended September 30, 2014 Balance at beginning of period $ 14 $ 20 $ 4 $ 38 Other comprehensive loss before reclassifications (2 ) — — (2 ) Reclassification adjustments from accumulated other comprehensive income (2 ) — — (2 ) Balance at end of period $ 10 $ 20 $ 4 $ 34 Nine Months Ended September 30, 2015 Balance at beginning of period $ 12 $ (13 ) $ 4 $ 3 Other comprehensive loss before reclassifications (5 ) — — (5 ) Reclassification adjustments from accumulated other comprehensive income (loss) (9 ) — — (9 ) Balance at end of period $ (2 ) $ (13 ) $ 4 $ (11 ) Nine Months Ended September 30, 2014 Balance at beginning of period $ 4 $ 20 $ 4 $ 28 Other comprehensive income before reclassifications 10 — — 10 Reclassification adjustments from accumulated other comprehensive income (4 ) — — (4 ) Balance at end of period $ 10 $ 20 $ 4 $ 34 |
Schedule of reclassification adjustments from accumulated other comprehensive income | Reclassification adjustments from accumulated other comprehensive income (loss) to the applicable line item on our condensed consolidated statements of operations were as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Unrealized gains on investment securities: Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes $ 4 $ 3 $ 14 $ 6 Income tax effect (2 ) (1 ) (5 ) (2 ) Reclassification from accumulated other comprehensive income (loss) to investment revenues, net of taxes $ 2 $ 2 $ 9 $ 4 |
Contingencies (Tables)
Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Finance Receivables Activity in Reserve for Sales Recourse Obligations | The activity in our reserve for sales recourse obligations associated with the real estate loan sales during 2014 and other prior sales of finance receivables was as follows: Three Months Ended Nine Months Ended (dollars in millions) 2015 2014 2015 2014 Balance at beginning of period $ 18 $ 5 $ 24 $ 5 Recourse losses — — (5 ) — Provision for recourse obligations, net of recoveries * — 8 (1 ) 8 Balance at end of period $ 18 $ 13 $ 18 $ 13 * Reflects the elimination of the reserve associated with other prior sales of finance receivables. |
Benefit Plans (Tables)
Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Schedule of components of net periodic benefit cost | The following table presents the components of net periodic benefit cost with respect to our defined benefit pension plans: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Pension Components of net periodic benefit cost: Interest cost $ 4 $ 3 $ 12 $ 11 Expected return on assets (5 ) (4 ) (14 ) (12 ) Net periodic benefit cost $ (1 ) $ (1 ) $ (2 ) $ (1 ) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of information about the Company's segments as well as reconciliations to condensed consolidated financial statement amounts | The following tables present information about the Company’s segments as well as reconciliations to the condensed consolidated financial statement amounts. (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Other Push-down Consolidated Three Months Ended Interest income $ 289 $ 113 $ 17 $ 1 $ 3 $ 423 Interest expense 43 22 58 16 32 171 Provision for finance receivable losses 62 19 (4 ) — 5 82 Net interest income (loss) after provision for finance receivable losses 184 72 (37 ) (15 ) (34 ) 170 Other revenues 55 — (2 ) 4 (2 ) 55 Other expenses 157 14 8 2 1 182 Income (loss) before provision for (benefit from) income taxes 82 58 (47 ) (13 ) (37 ) 43 Income before provision for income taxes attributable to non-controlling interests — 31 — — — 31 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 82 $ 27 $ (47 ) $ (13 ) $ (37 ) $ 12 (dollars in millions) Consumer and Insurance Acquisitions Real Other Push-down Consolidated Three Months Ended Interest income $ 234 $ 84 $ 94 $ 4 $ 16 $ 432 Interest expense 39 12 83 2 36 172 Provision for finance receivable losses 55 18 37 2 (19 ) 93 Net interest income (loss) after provision for finance receivable losses 140 54 (26 ) — (1 ) 167 Other revenues 60 1 284 1 317 663 Other expenses 131 12 36 3 — 182 Income (loss) before provision for (benefit from) income taxes 69 43 222 (2 ) 316 648 Income before provision for income taxes attributable to non-controlling interests — 23 — — — 23 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 69 $ 20 $ 222 $ (2 ) $ 316 $ 625 (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Estate Other Eliminations Push-down Accounting Adjustments Consolidated Total At or for the Nine Months Ended Interest income $ 810 $ 356 $ 52 $ 6 $ — $ 10 $ 1,234 Interest expense 119 67 177 48 (5 ) 94 500 Provision for finance receivable losses 170 69 (7 ) 1 — 14 247 Net interest income (loss) after provision for finance receivable losses 521 220 (118 ) (43 ) 5 (98 ) 487 Other revenues 161 5 4 10 (5 ) (8 ) 167 Other expenses 448 45 24 17 — 3 537 Income (loss) before provision for (benefit from) income taxes 234 180 (138 ) (50 ) — (109 ) 117 Income before provision for income taxes attributable to non-controlling interests — 93 — — — — 93 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 234 $ 87 $ (138 ) $ (50 ) $ — $ (109 ) $ 24 Assets $ 5,628 $ 1,751 $ 3,551 $ 1,471 $ — $ (19 ) $ 12,382 (dollars in millions) Consumer and Insurance Acquisitions and Servicing Real Estate Other Push-down Accounting Adjustments Consolidated Total At or for the Nine Months Ended Interest income $ 663 $ 84 $ 382 $ 13 $ 84 $ 1,226 Interest expense 121 12 287 6 100 526 Provision for finance receivable losses 148 18 119 7 (18 ) 274 Net interest income (loss) after provision for finance receivable losses 394 54 (24 ) — 2 426 Other revenues 167 1 196 5 486 855 Other expenses 380 12 77 14 2 485 Income (loss) before provision for (benefit from) income taxes 181 43 95 (9 ) 486 796 Income before provision for income taxes attributable to non-controlling interests — 23 — — — 23 Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation $ 181 $ 20 $ 95 $ (9 ) $ 486 $ 773 Assets (a) (b) $ 4,626 $ 2,239 $ 3,720 $ 705 $ 16 $ 11,306 (a) As a result of our early adoption of ASU 2015-03, we reclassified $29 million of debt issuance costs from other assets to long-term debt as of September 30, 2014. (b) See Note 1 for further information on the correction of this prior period disclosure. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Detail of Purchases, Sales, Issuances, and Settlements [Table Text Block] [Table Text Block] | The detail of purchases and settlements is presented in the table below: (dollars in millions) Purchases Settlements Total Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ — $ (4 ) $ (4 ) Preferred stock 10 — 10 Total $ 10 $ (4 ) $ 6 |
Schedule of fair values and carrying values of financial instruments and fair value hierarchy based on the level of inputs utilized to determine such fair value | The following table summarizes the fair values and carrying values of our financial instruments and indicates the fair value hierarchy based on the level of inputs we utilized to determine such fair values: Fair Value Measurements Using Total Total (dollars in millions) Level 1 Level 2 Level 3 September 30, 2015 Assets Cash and cash equivalents $ 2,461 $ 295 $ — $ 2,756 $ 2,756 Investment securities — 1,730 12 1,742 1,742 Net finance receivables, less allowance for finance receivable losses — — 6,667 6,667 6,040 Finance receivables held for sale — — 802 802 797 Note receivable from parent — 322 — 322 322 Restricted cash and cash equivalents 270 — — 270 270 Other assets: Commercial mortgage loans — — 71 71 71 Escrow advance receivable — — 10 10 10 Receivables from parent and affiliates — 7 — 7 7 Receivables related to sales of real estate loans and related trust assets — 3 — 3 9 Liabilities Long-term debt $ — $ 10,212 $ — $ 10,212 $ 9,555 Payables to parent and affiliates — 19 — 19 19 December 31, 2014 Assets Cash and cash equivalents $ 584 $ 165 $ — $ 749 $ 749 Investment securities — 2,913 9 2,922 2,922 Net finance receivables, less allowance for finance receivable losses — — 6,949 6,949 6,278 Finance receivables held for sale — — 209 209 205 Note receivable from parent — 251 — 251 251 Restricted cash and cash equivalents 218 — — 218 218 Other assets: Commercial mortgage loans — — 78 78 85 Escrow advance receivable — — 8 8 8 Receivables from parent and affiliates — 12 — 12 12 Receivables related to sales of real estate loans and related trust assets — 67 — 67 79 Liabilities Long-term debt $ — $ 9,182 $ — $ 9,182 $ 8,356 Payables to parent and affiliates — 48 — 48 48 |
Schedule of information about assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy based on the levels of inputs utilized to determine such fair value | The following tables present information about our assets measured at fair value on a recurring basis and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value: Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 September 30, 2015 Assets Cash equivalents in mutual funds $ 750 $ — $ — $ 750 Cash equivalents in certificates of deposit and commercial paper — 295 — 295 Investment securities: Available-for-sale securities: Bonds: U.S. government and government sponsored entities — 68 — 68 Obligations of states, municipalities, and political subdivisions — 84 — 84 Corporate debt — 245 — 245 RMBS — 79 — 79 CMBS — 39 — 39 CDO/ABS — 32 — 32 Total bonds — 547 — 547 Preferred stock — 6 10 16 Other long-term investments (a) — — 1 1 Total available-for-sale securities (b) — 553 11 564 Trading securities: Bonds: U.S. government and government sponsored entities — 783 — 783 Corporate debt — 196 — 196 RMBS — 2 — 2 CMBS — 45 — 45 CDO/ABS — 151 — 151 Total trading securities — 1,177 — 1,177 Total investment securities — 1,730 11 1,741 Restricted cash in mutual funds 252 — — 252 Total $ 1,002 $ 2,025 $ 11 $ 3,038 Fair Value Measurements Using Total Carried At Fair Value (dollars in millions) Level 1 Level 2 Level 3 December 31, 2014 Assets Cash equivalents in mutual funds $ 236 $ — $ — $ 236 Cash equivalents in certificates of deposit and commercial paper — 165 — 165 Investment securities: Available-for-sale securities: Bonds: U.S. government and government sponsored entities — 64 — 64 Obligations of states, municipalities, and political subdivisions — 102 — 102 Certificates of deposit and commercial paper — 1 — 1 Corporate debt — 263 4 267 RMBS — 73 — 73 CMBS — 21 3 24 CDO/ABS — 61 — 61 Total bonds — 585 7 592 Preferred stock — 7 — 7 Other long-term investments (a) — — 1 1 Total available-for-sale securities (b) — 592 8 600 Trading securities: Bonds: U.S. government and government sponsored entities — 302 — 302 Obligations of states, municipalities, and political subdivisions — 14 — 14 Certificates of deposit and commercial paper — 238 — 238 Non-U.S. government and government sponsored entities — 20 — 20 Corporate debt — 1,056 — 1,056 RMBS — 35 — 35 CMBS — 149 — 149 CDO/ABS — 507 — 507 Total trading securities — 2,321 — 2,321 Total investment securities — 2,913 8 2,921 Restricted cash in mutual funds 207 — — 207 Total $ 443 $ 3,078 $ 8 $ 3,529 (a) Other long-term investments excludes an immaterial interest in a limited partnership that we account for using the equity method. (b) Common stocks not carried at fair value totaled $1 million at September 30, 2015 and December 31, 2014 and, therefore, have been excluded from the table above. |
Schedule of changes in Level 3 assets and liabilities measured at fair value on a recurring basis | The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the three months ended September 30, 2015 : Net gains (losses) included in: Purchases, sales, issues, settlements * Transfers into Transfers Balance Balance at beginning of period Other revenues Other comprehensive income (loss) (dollars in millions) Three Months Ended Investment securities: Available-for-sale securities: Preferred stock $ — $ — $ — $ 10 $ — $ — $ 10 Other long-term investments 1 — — — — — 1 Total $ 1 $ — $ — $ 10 $ — $ — $ 11 * “Purchases, sales, issues, and settlements” column consisted only of purchases. The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the three months ended September 30, 2014 : Net gains (losses) included in: Purchases, Transfers into Transfers Balance Balance at beginning of period Other Other (dollars in millions) Three Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 5 $ — $ — $ — $ — $ — $ 5 Other long-term investments 1 — — — — — 1 Total available-for-sale securities 6 — — — — — 6 Trading securities: Bonds: CDO/ABS 6 — — — — — 6 Total $ 12 $ — $ — $ — $ — $ — $ 12 The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2015 : Net gains (losses) included in: Purchases, sales, issues, settlements (a) Transfers into Transfers Balance Balance at Other Other (dollars in millions) Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 4 $ — $ — $ (4 ) $ — $ — $ — CMBS 3 — — — — (3 ) — Total bonds 7 — — (4 ) — (3 ) — Preferred stock — — — 10 — — 10 Other long-term investments 1 — — — — — 1 Total $ 8 $ — $ — $ 6 $ — $ (3 ) $ 11 (a) The detail of purchases and settlements is presented in the table below: (dollars in millions) Purchases Settlements Total Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ — $ (4 ) $ (4 ) Preferred stock 10 — 10 Total $ 10 $ (4 ) $ 6 (b) During the nine months ended September 30, 2015 , we transferred CMBS securities totaling $3 million out of Level 3 primarily related to the greater observability of pricing inputs. The following table presents changes in Level 3 assets measured at fair value on a recurring basis for the nine months ended September 30, 2014 : Net gains (losses) included in: Purchases, sales, issues, settlements (a) Transfers into Level 3 (b) Transfers out of Level 3 (c) Balance at end of period Balance at beginning of period Other revenues Other comprehensive income (loss) (dollars in millions) Nine Months Ended Investment securities: Available-for-sale securities: Bonds: Corporate debt $ 13 $ — $ — $ (8 ) $ — $ — $ 5 CDO/ABS 1 — — — — (1 ) — Total bonds 14 — — (8 ) — (1 ) 5 Other long-term investments 1 — — — — — 1 Total available-for-sale securities 15 — — (8 ) — (1 ) 6 Trading securities: Bonds: RMBS — — — — 1 (1 ) — CDO/ABS 7 — — — — (1 ) 6 Total trading securities 7 — — — 1 (2 ) 6 Total $ 22 $ — $ — $ (8 ) $ 1 $ (3 ) $ 12 (a) “Purchases, sales, issues, and settlements” column consisted only of settlements. (b) During the nine months ended September 30, 2014 , we transferred $1 million of RMBS securities into Level 3 primarily related to the re-evaluated observability of pricing inputs. (c) During the nine months ended September 30, 2014 , we transferred RMBS and CDO/ABS securities totaling $3 million out of Level 3 primarily related to the re-evaluated observability of pricing inputs. |
Quantitative information about Level 3 inputs for assets measured on a recurring basis | Quantitative information about Level 3 inputs for our assets measured at fair value on a recurring basis for which information about the unobservable inputs is reasonably available to us at September 30, 2015 and December 31, 2014 is as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input September 30, 2015 December 31, 2014 Corporate debt Discounted cash flows Yield — 1.05% (a) RMBS Discounted cash flows Spread 743 bps (a) 736 bps (a) (b) CMBS Discounted cash flows Spread — 139 bps (a) (b) Other long-term investments Discounted cash flows and indicative valuations Historical costs Nature of investment Local market conditions Comparables Operating performance Recent financing activity N/A (c) N/A (c) Preferred stock Market approach Historical cost N/A (c) N/A (c) (a) At September 30, 2015 and December 31, 2014, RMBS consisted of one bond, which was less than $1 million . At December 31, 2014, corporate debt and CMBS also consisted of one bond. (b) During the first quarter of 2015, we identified that we incorrectly disclosed the weighted average ranges of our RMBS bond and CMBS bond as of December 31, 2014. The weighted average ranges of these bonds at December 31, 2014 have been corrected in the table above. (c) Not applicable. |
Schedule of assets measured at fair value on a non-recurring basis on which impairment charges were recorded | Assets measured at fair value on a non-recurring basis on which we recorded impairment charges were as follows: Fair Value Measurements Using * (dollars in millions) Level 1 Level 2 Level 3 Total September 30, 2015 Assets Real estate owned $ — $ — $ 12 $ 12 Commercial mortgage loans — — 8 8 Total $ — $ — $ 20 $ 20 December 31, 2014 Assets Real estate owned $ — $ — $ 19 $ 19 Commercial mortgage loans — — 11 11 Total $ — $ — $ 30 $ 30 * The fair value information presented in the table above is as of the date the fair value adjustment was recorded. |
Schedule of net impairment charges recorded on assets measured at fair value on a non-recurring basis | Net impairment charges recorded on assets measured at fair value on a non-recurring basis were as follows: (dollars in millions) Three Months Ended Nine Months Ended 2015 2014 2015 2014 Assets Real estate owned $ 1 $ 3 $ 3 $ 13 Commercial mortgage loans — (1 ) (2 ) (2 ) Total $ 1 $ 2 $ 1 $ 11 |
Quantitative information about Level 3 inputs for assets measured on a nonrecurring basis | Quantitative information about Level 3 inputs for our assets measured at fair value on a non-recurring basis at September 30, 2015 and December 31, 2014 is as follows: Range (Weighted Average) Valuation Technique(s) Unobservable Input September 30, 2015 December 31, 2014 Real estate owned Market approach Third-party valuation N/A* N/A* Commercial mortgage loans Market approach Income approach Cost approach Local market conditions Nature of investment Comparable property sales Operating performance N/A* N/A* * Not applicable. |
Business and Basis of Present38
Business and Basis of Presentation (Details) | Sep. 30, 2015 |
Related Party Transactions | |
Ownership percentage in joint venture | 47.00% |
Corporate Joint Venture | |
Related Party Transactions | |
Ownership percentage in joint venture | 47.00% |
Majority Shareholder | |
Related Party Transactions | |
Percent of common stock held by related party | 58.00% |
Affiliates of Fortress or AIG | |
Related Party Transactions | |
Percent of common stock held by related party | 55.00% |
Subsidiaries of American International Group Inc | |
Related Party Transactions | |
Percent of common stock held by related party | 3.00% |
Business and Basis of Present39
Business and Basis of Presentation Prior Period Revisions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||||
Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | ||||
Prior period revisions | ||||||||||||
Provision for finance receivable losses | $ 82 | $ 93 | $ 247 | $ 274 | ||||||||
Provision for income taxes | 7 | 219 | 14 | 276 | ||||||||
Assets | 12,382 | 11,306 | [1],[2] | 12,382 | 11,306 | [1],[2] | $ 11,097 | |||||
Other | ||||||||||||
Prior period revisions | ||||||||||||
Provision for finance receivable losses | 0 | 2 | 1 | 7 | ||||||||
Assets | 1,471 | 705 | [1],[2] | 1,471 | 705 | [1],[2] | ||||||
Consumer and Insurance | Operating segments | ||||||||||||
Prior period revisions | ||||||||||||
Provision for finance receivable losses | 62 | 55 | 170 | 148 | ||||||||
Assets | 5,628 | 4,626 | [1],[2] | 5,628 | 4,626 | [1],[2] | ||||||
Real Estate | Operating segments | ||||||||||||
Prior period revisions | ||||||||||||
Provision for finance receivable losses | (4) | 37 | (7) | 119 | ||||||||
Assets | $ 3,551 | 3,720 | [1],[2] | $ 3,551 | 3,720 | [1],[2] | ||||||
Adjustments | ||||||||||||
Prior period revisions | ||||||||||||
Cash and cash equivalents | 165 | |||||||||||
Provision for finance receivable losses | $ 8 | |||||||||||
Provision for income taxes | $ (3) | |||||||||||
Adjustments | Other | ||||||||||||
Prior period revisions | ||||||||||||
Assets | [3] | 705 | 705 | $ 1,832 | 555 | $ 1,058 | $ 611 | |||||
Adjustments | Real Estate Loans Held for Sale | ||||||||||||
Prior period revisions | ||||||||||||
Escrow Liability | 15 | |||||||||||
Adjustments | Consumer and Insurance | Operating segments | ||||||||||||
Prior period revisions | ||||||||||||
Assets | [3] | 4,651 | 4,651 | 5,070 | 4,462 | 4,406 | 4,200 | |||||
Adjustments | Real Estate | Operating segments | ||||||||||||
Prior period revisions | ||||||||||||
Assets | [3] | $ 3,720 | $ 3,720 | $ 3,613 | $ 3,666 | $ 6,561 | $ 8,512 | |||||
[1] | As a result of our early adoption of ASU 2015-03, we reclassified $29 million of debt issuance costs from other assets to long-term debt as of September 30, 2014. | |||||||||||
[2] | See Note 1 for further information on the correction of this prior period disclosure. | |||||||||||
[3] | The revised amounts do not reflect the retrospective reclassifications of our debt issuance costs previously recorded in other assets to long-term debt, as a result of our early adoption of ASU 2015-03. |
Significant Transactions OneMai
Significant Transactions OneMain Financial Pending Acquisition (Details) $ in Millions | Mar. 02, 2015USD ($) |
OneMain Financial Holdings, Inc. | |
Business Acquisition [Line Items] | |
Aggregate purchase price | $ 4,250 |
Significant Transactions Equity
Significant Transactions Equity offering (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | May. 04, 2015 | |
Redeemable Noncontrolling Interest [Line Items] | ||||
Common stock offering, shares | 27,864,525 | |||
Proceeds from sale of common stock | $ 976 | |||
Secondary offering related expenses | $ 24 | |||
Non-cash incentive compensation from Initial Stockholder | $ 15 | $ 15 | $ 0 | |
Springleaf Holding Inc. | ||||
Redeemable Noncontrolling Interest [Line Items] | ||||
Common stock offering, shares | 19,417,476 | |||
Affiliates of Fortress or AIG | ||||
Redeemable Noncontrolling Interest [Line Items] | ||||
Common stock offering, shares | 8,447,049 |
Recent Accounting Pronounceme42
Recent Accounting Pronouncements - Debt Issuance Costs (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Other assets | $ 455 | $ 474 | |||
Long-term debt | $ 9,555 | [1] | 8,356 | ||
New Accounting Pronouncement, Early Adoption, Effect | |||||
New Accounting Pronouncement, Early Adoption [Line Items] | |||||
Other assets | $ 32 | $ 29 | |||
Long-term debt | $ 29 | ||||
[1] | The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. |
Finance Receivables Narrative (
Finance Receivables Narrative (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2014 | |
Finance Receivables | ||
Ownership percentage in joint venture | 47.00% | |
Net finance receivables | $ 6,231,000,000 | $ 6,452,000,000 |
Loans receivable held for sale | 797,000,000 | 205,000,000 |
Commitments to lend additional funds | 0 | |
Consolidated VIEs | ||
Finance Receivables | ||
Loans receivable held for sale | 484,000,000 | 0 |
Personal loans | ||
Finance Receivables | ||
Net finance receivables | 3,990,000,000 | 3,800,000,000 |
Loans receivable held for sale | 608,000,000 | |
Personal loans | Consumer Loan Securitizations | Consolidated VIEs | ||
Finance Receivables | ||
Net finance receivables | 2,096,000,000 | 1,853,000,000 |
Real estate loans | ||
Finance Receivables | ||
Net finance receivables | 547,000,000 | 625,000,000 |
SpringCastle Portfolio | ||
Finance Receivables | ||
Net finance receivables | 1,667,000,000 | 1,979,000,000 |
SpringCastle Portfolio | Mortgage Loan Securitizations | Consolidated VIEs | ||
Finance Receivables | ||
Net finance receivables | 1,667,000,000 | 1,979,000,000 |
Retail Sales Finance | ||
Finance Receivables | ||
Net finance receivables | $ 27,000,000 | $ 48,000,000 |
Revolving Retail | ||
Finance Receivables | ||
Accrual of finance charges, past due period | 180 days | |
Real estate loans secured by first mortgages | ||
Finance Receivables | ||
Net finance receivables, percent of finance receivables outstanding | 38.00% | |
Real estate loans secured by first mortgages | Real estate loans | ||
Finance Receivables | ||
Net finance receivables | $ 209,000,000 | |
Real estate loans secured by second mortgages | ||
Finance Receivables | ||
Net finance receivables, percent of finance receivables outstanding | 62.00% | |
Real estate loans secured by second mortgages | Real estate loans | ||
Finance Receivables | ||
Net finance receivables | $ 338,000,000 | |
Corporate Joint Venture | ||
Finance Receivables | ||
Ownership percentage in joint venture | 47.00% | |
Minimum | Personal loans | ||
Finance Receivables | ||
Finance receivables original term | 2 years | |
Maximum | Personal loans | ||
Finance Receivables | ||
Finance receivables original term | 5 years | |
Maximum | Real estate loans | ||
Finance Receivables | ||
Finance receivables original term | 360 months | |
Maximum | Retail Sales Finance | ||
Finance Receivables | ||
Finance receivables original term | 60 months | |
Titled personal property | Personal loans | ||
Finance Receivables | ||
Collateral for secured borrowings | $ 2,200,000,000 | |
Collateral for secured borrowings, percent of finance receivables | 56.00% | |
Consumer household goods or other items of personal property | Personal loans | ||
Finance Receivables | ||
Collateral for secured borrowings | $ 1,800,000,000 | |
Collateral for secured borrowings, percent of finance receivables | 44.00% |
Finance Receivables (Details 2)
Finance Receivables (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Finance Receivables | |||||
Gross receivables | [1] | $ 6,902 | $ 7,076 | ||
Unearned finance charges and points and fees | (805) | (770) | |||
Accrued finance charges | 92 | 102 | |||
Deferred origination costs | 42 | 44 | |||
Net finance receivables | 6,231 | 6,452 | |||
Personal loans | |||||
Finance Receivables | |||||
Pre-modification TDR net finance receivables | $ 1 | ||||
Gross receivables | [1] | 4,694 | 4,462 | ||
Unearned finance charges and points and fees | (802) | (764) | |||
Accrued finance charges | 56 | 58 | |||
Deferred origination costs | 42 | 44 | |||
Net finance receivables | 3,990 | 3,800 | |||
SpringCastle Portfolio | |||||
Finance Receivables | |||||
Pre-modification TDR net finance receivables | 1 | $ 1 | $ 1 | ||
Gross receivables | [1] | 1,635 | 1,941 | ||
Unearned finance charges and points and fees | 0 | 0 | |||
Accrued finance charges | 32 | 38 | |||
Deferred origination costs | 0 | 0 | |||
Net finance receivables | 1,667 | 1,979 | |||
Real estate loans | |||||
Finance Receivables | |||||
Gross receivables | [1] | 543 | 621 | ||
Unearned finance charges and points and fees | 0 | (1) | |||
Accrued finance charges | 4 | 5 | |||
Deferred origination costs | 0 | 0 | |||
Net finance receivables | 547 | 625 | |||
Retail Sales Finance | |||||
Finance Receivables | |||||
Gross receivables | [1] | 30 | 52 | ||
Unearned finance charges and points and fees | (3) | (5) | |||
Accrued finance charges | 0 | 1 | |||
Deferred origination costs | 0 | 0 | |||
Net finance receivables | 27 | $ 48 | |||
Consumer Loan Held for sale [Member] | |||||
Finance Receivables | |||||
Pre-modification TDR net finance receivables | $ 1 | ||||
[1] | Gross receivables are defined as follows:•finance receivables purchased as a performing receivable — gross finance receivables equal the unpaid principal balance (“UPB”) for interest bearing accounts and the gross remaining contractual payments for precompute accounts; additionally, the remaining unearned discount, net of premium established at the time of purchase, is included in both interest bearing and precompute accounts to reflect the finance receivable balance at its fair value;•finance receivables originated subsequent to the Fortress Acquisition (as defined in the Purchased Credit Impaired Finance Receivables section located in this Note) — gross finance receivables equal the UPB for interest bearing accounts and the gross remaining contractual payments for precompute accounts; and•purchased credit impaired finance receivables — gross finance receivables equal the remaining estimated cash flows less the current balance of accretable yield on the purchased credit impaired accounts. |
Finance Receivables (Details 3)
Finance Receivables (Details 3) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Finance Receivables | ||
Unused credit lines | $ 399 | $ 386 |
Personal loans | ||
Finance Receivables | ||
Unused credit lines | 2 | 1 |
SpringCastle Portfolio | ||
Finance Receivables | ||
Unused credit lines | 366 | 354 |
Real estate loans | ||
Finance Receivables | ||
Unused credit lines | $ 31 | $ 31 |
Finance Receivables (Details 4)
Finance Receivables (Details 4) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Net finance receivables: | ||
Net finance receivables | $ 6,231 | $ 6,452 |
Total delinquent finance receivables | 235 | 239 |
Current | 5,868 | 6,081 |
Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 3,990 | 3,800 |
Total delinquent finance receivables | 137 | 113 |
Current | 3,784 | 3,632 |
SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 1,667 | 1,979 |
Total delinquent finance receivables | 60 | 82 |
Current | 1,562 | 1,839 |
Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 547 | 625 |
Total delinquent finance receivables | 37 | 42 |
Current | 497 | 565 |
Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 27 | 48 |
Total delinquent finance receivables | 1 | 2 |
Current | 25 | 45 |
60-89 days past due | ||
Net finance receivables: | ||
Net finance receivables | 88 | 80 |
60-89 days past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 47 | 36 |
60-89 days past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 24 | 31 |
60-89 days past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 16 | 12 |
60-89 days past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 1 | 1 |
90-119 days past due | ||
Net finance receivables: | ||
Net finance receivables | 55 | 58 |
90-119 days past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 36 | 30 |
90-119 days past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 15 | 19 |
90-119 days past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 4 | 9 |
90-119 days past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
120-149 days past due | ||
Net finance receivables: | ||
Net finance receivables | 43 | 46 |
120-149 days past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 29 | 24 |
120-149 days past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 11 | 16 |
120-149 days past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 3 | 5 |
120-149 days past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 0 | 1 |
150-179 days past due | ||
Net finance receivables: | ||
Net finance receivables | 34 | 39 |
150-179 days past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 23 | 21 |
150-179 days past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 9 | 14 |
150-179 days past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 2 | 4 |
150-179 days past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
180 days or more past due | ||
Net finance receivables: | ||
Net finance receivables | 15 | 16 |
180 days or more past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 2 | 2 |
180 days or more past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 1 | 2 |
180 days or more past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 12 | 12 |
180 days or more past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | 0 | 0 |
30-59 days past due | ||
Net finance receivables: | ||
Net finance receivables | 128 | 132 |
30-59 days past due | Personal loans | ||
Net finance receivables: | ||
Net finance receivables | 69 | 55 |
30-59 days past due | SpringCastle Portfolio | ||
Net finance receivables: | ||
Net finance receivables | 45 | 58 |
30-59 days past due | Real estate loans | ||
Net finance receivables: | ||
Net finance receivables | 13 | 18 |
30-59 days past due | Retail Sales Finance | ||
Net finance receivables: | ||
Net finance receivables | $ 1 | $ 1 |
Finance Receivables (Details 5)
Finance Receivables (Details 5) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | $ 6,231 | $ 6,452 |
Personal loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 3,990 | 3,800 |
SpringCastle Portfolio | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 1,667 | 1,979 |
Real estate loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 547 | 625 |
Retail Sales Finance | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 27 | 48 |
Performing | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 6,084 | 6,293 |
Performing | Personal loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 3,900 | 3,723 |
Performing | SpringCastle Portfolio | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 1,631 | 1,928 |
Performing | Real estate loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 526 | 595 |
Performing | Retail Sales Finance | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 27 | 47 |
Nonperforming | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 147 | 159 |
Nonperforming | Personal loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 90 | 77 |
Nonperforming | SpringCastle Portfolio | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 36 | 51 |
Nonperforming | Real estate loans | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | 21 | 30 |
Nonperforming | Retail Sales Finance | ||
Performing and nonperforming net finance receivables by type | ||
Net finance receivables due | $ 0 | $ 1 |
Finance Receivables (Details 6)
Finance Receivables (Details 6) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Finance Receivables | |||
Carrying amount, net of allowance | $ 337 | $ 433 | |
Outstanding balance | 654 | 779 | |
Allowance for purchased credit impaired finance receivable losses | 5 | 5 | |
SpringCastle Portfolio | |||
Finance Receivables | |||
Carrying amount, net of allowance | 251 | 340 | |
Outstanding balance | 515 | 628 | |
Allowance for purchased credit impaired finance receivable losses | 0 | 0 | |
Affiliates of Fortress or AIG | |||
Finance Receivables | |||
Carrying amount, net of allowance | [1] | 86 | 93 |
Outstanding balance | [1] | 139 | 151 |
Allowance for purchased credit impaired finance receivable losses | [1] | 5 | 5 |
Carrying amount, net of allowance, held for sale | 62 | 68 | |
Outstanding balance, held for sale | $ 91 | $ 99 | |
[1] | Purchased credit impaired FA Loans held for sale included in the table above were as follows:(dollars in millions) FA Loans September 30, 2015 Carrying amount, net of allowance $62Outstanding balance 91 December 31, 2014 Carrying amount, net of allowance $68Outstanding balance 99 |
Finance Receivables (Details 7)
Finance Receivables (Details 7) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Changes in accretable yield for purchased credit impaired finance receivables | |||||
Balance at beginning of period | $ 487 | $ 623 | $ 560 | $ 767 | |
Accretable yield for SpringCastle Portfolio contributed to SFC | 260 | 260 | |||
Accretion | [1] | (23) | (31) | (74) | (86) |
Transfers due to finance receivables sold | (559) | (637) | |||
Disposals of finance receivables | [2] | (7) | (7) | (29) | (18) |
Balance at end of period | 457 | 286 | 457 | 286 | |
SpringCastle Portfolio | |||||
Changes in accretable yield for purchased credit impaired finance receivables | |||||
Balance at beginning of period | 474 | 0 | 541 | 0 | |
Accretable yield for SpringCastle Portfolio contributed to SFC | 260 | 260 | |||
Accretion | [1] | (20) | (11) | (66) | (11) |
Transfers due to finance receivables sold | 0 | 0 | |||
Disposals of finance receivables | [2] | (7) | (3) | (28) | (3) |
Balance at end of period | 447 | 246 | 447 | 246 | |
Affiliates of Fortress or AIG | |||||
Changes in accretable yield for purchased credit impaired finance receivables | |||||
Balance at beginning of period | 13 | 623 | 19 | 767 | |
Accretable yield for SpringCastle Portfolio contributed to SFC | 0 | ||||
Accretion | [1] | (3) | (20) | (8) | (75) |
Transfers due to finance receivables sold | (559) | (637) | |||
Disposals of finance receivables | [2] | 0 | (4) | (1) | (15) |
Balance at end of period | 10 | 40 | 10 | 40 | |
Finance Receivables Originated | |||||
Changes in accretable yield for purchased credit impaired finance receivables | |||||
Accretion on purchased credit impaired finance receivables held for sale | $ 2 | $ 11 | $ 5 | $ 11 | |
[1] | Accretion on our purchased credit impaired FA Loans held for sale included in the table above were as follows:(dollars in millions) Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 Accretion $2 $11 $5 $11 | ||||
[2] | Disposals of finance receivables represent finance charges forfeited due to purchased credit impaired finance receivables charged off during the period. |
Finance Receivables (Details 8)
Finance Receivables (Details 8) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | |
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | [1] | $ 243 | $ 229 |
TDR net finance receivables | 241 | 228 | |
Allowance for TDR finance receivable losses | 41 | 36 | |
TDR net finance receivables | 147 | 137 | |
Personal loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | [1],[2] | 30 | 22 |
TDR net finance receivables | [2] | 29 | 22 |
Allowance for TDR finance receivable losses | [2] | 7 | 1 |
SpringCastle Portfolio | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | [1] | 14 | 11 |
TDR net finance receivables | 12 | 10 | |
Allowance for TDR finance receivable losses | 4 | 3 | |
Real estate loans | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | [1],[2] | 199 | 196 |
TDR net finance receivables | [2] | 200 | 196 |
Allowance for TDR finance receivable losses | [2] | 30 | 32 |
Consumer Loan Held for sale [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | 2 | 0 | |
TDR net finance receivables | 2 | 0 | |
Real Estate Loans Held for Sale | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | 92 | 91 | |
TDR net finance receivables | 92 | 91 | |
Total Held for Sale | |||
Financing Receivable, Modifications [Line Items] | |||
TDR gross finance receivables | 94 | 91 | |
TDR net finance receivables | $ 94 | $ 91 | |
[1] | As defined earlier in this Note. | ||
[2] | TDR finance receivables held for sale included in the table above were as follows:(dollars in millions) Personal Loans Real EstateLoans Total September 30, 2015 TDR gross finance receivables $2 $92 $94TDR net finance receivables 2 92 94 December 31, 2014 TDR gross finance receivables $— $91 $91TDR net finance receivables — 91 91 |
Finance Receivables (Details 9)
Finance Receivables (Details 9) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||
TDR average net receivables and finance charges recognized on TDR finance receivables | |||||||
TDR average net receivables | $ 241 | $ 822 | [1] | $ 237 | $ 1,210 | [1] | |
TDR finance charges recognized | 3 | 10 | 11 | 46 | |||
Personal Loans | |||||||
TDR average net receivables and finance charges recognized on TDR finance receivables | |||||||
TDR average net receivables | 30 | 17 | [1] | 28 | 15 | [1] | |
TDR finance charges recognized | 0 | 0 | 2 | 1 | |||
SpringCastle Portfolio | |||||||
TDR average net receivables and finance charges recognized on TDR finance receivables | |||||||
TDR average net receivables | 12 | 8 | [1] | 12 | 8 | [1] | |
TDR finance charges recognized | 1 | 0 | 1 | 0 | |||
Real estate loans | |||||||
TDR average net receivables and finance charges recognized on TDR finance receivables | |||||||
TDR average net receivables | [2] | 199 | 797 | [1] | 197 | 1,187 | [1] |
TDR finance charges recognized | [2] | 2 | 10 | 8 | 45 | ||
Real estate loans | Real Estate Loans Held for Sale | |||||||
TDR average net receivables and finance charges recognized on TDR finance receivables | |||||||
TDR average net receivables | 92 | 413 | 91 | 413 | |||
TDR finance charges recognized | $ 2 | $ 3 | $ 4 | $ 3 | |||
[1] | (b)TDR SpringCastle Portfolio loans average net receivables for the three and nine months ended September 30, 2014 reflect a two-month average since the SAC Capital Contribution occurred on July 31, 2014. | ||||||
[2] | TDR finance receivables held for sale included in the table above were as follows:(dollars in millions) Real EstateLoans Three Months Ended September 30, 2015 TDR average net receivables $92TDR finance charges recognized 2 Three Months Ended September 30, 2014 TDR average net receivables $413TDR finance charges recognized 3 Nine Months Ended September 30, 2015 TDR average net receivables $91TDR finance charges recognized 4 Nine Months Ended September 30, 2014 TDR average net receivables $413TDR finance charges recognized 3 |
Finance Receivables (Details 10
Finance Receivables (Details 10) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015USD ($)account | Sep. 30, 2014USD ($)account | Sep. 30, 2015USD ($)account | Sep. 30, 2014USD ($)account | ||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $ 15 | $ 35 | $ 45 | $ 222 | |||
Rate reduction | 7 | 31 | 28 | 163 | |||
Other (b) | [1] | 5 | 6 | 13 | 49 | ||
Post-modification TDR net finance receivables: | $ 12 | $ 37 | $ 41 | $ 212 | |||
Number of TDR accounts | account | 1,782 | 1,774 | 5,682 | 5,214 | |||
Personal loans | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | [2] | $ 8 | $ 5 | $ 24 | $ 11 | ||
Rate reduction | [2] | 3 | 3 | 11 | 7 | ||
Other (b) | [1],[2] | 3 | 2 | 9 | 4 | ||
Post-modification TDR net finance receivables: | [2] | $ 6 | $ 5 | $ 20 | $ 11 | ||
Number of TDR accounts | account | [2] | 1,545 | 1,125 | 4,860 | 2,678 | ||
SpringCastle Portfolio | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $ 1 | $ 2 | $ 5 | $ 2 | |||
Rate reduction | 1 | 2 | 5 | 2 | |||
Other (b) | [1] | 0 | 0 | 0 | 0 | ||
Post-modification TDR net finance receivables: | $ 1 | $ 2 | $ 5 | $ 2 | |||
Number of TDR accounts | account | 142 | 246 | 550 | 246 | |||
Real estate loans | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | [2] | $ 6 | $ 28 | $ 16 | $ 209 | ||
Rate reduction | [2] | 3 | 26 | 12 | 154 | ||
Other (b) | [1],[2] | 2 | 4 | 4 | 45 | ||
Post-modification TDR net finance receivables: | [2] | $ 5 | $ 30 | $ 16 | $ 199 | ||
Number of TDR accounts | account | [2] | 95 | 403 | 272 | 2,290 | ||
Consumer Loan Held for sale [Member] | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $ 0 | [3] | $ 0 | $ 0 | [3] | $ 0 | |
Pre-modification TDR net finance receivables | 1 | ||||||
Post-modification TDR net finance receivables: | $ 0 | [3] | $ 0 | $ 0 | [3] | $ 0 | |
Number of TDR accounts | account | 50 | 0 | 50 | 0 | |||
Real Estate Loans Held for Sale | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $ 1 | [3] | $ 6 | $ 4 | [3] | $ 6 | |
Post-modification TDR net finance receivables: | $ 2 | [3] | $ 7 | $ 5 | [3] | $ 7 | |
Number of TDR accounts | account | 33 | 89 | 77 | 89 | |||
Total Held for Sale | |||||||
Financing Receivable, Modifications [Line Items] | |||||||
Financing Receivable, Modifications, Pre-Modification Recorded Investment | $ 1 | [3] | $ 6 | $ 4 | [3] | $ 6 | |
Post-modification TDR net finance receivables: | $ 2 | [3] | $ 7 | $ 5 | [3] | $ 7 | |
Number of TDR accounts | account | 83 | 89 | 127 | 89 | |||
[1] | (b)“Other” modifications include extension of term and forgiveness of principal or interest. | ||||||
[2] | TDR finance receivables held for sale included in the table above were as follows:(dollars in millions) Personal Loans Real EstateLoans Total Three Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $— $1 $1Post-modification TDR net finance receivables * $— $2 $2Number of TDR accounts 50 33 83 Three Months Ended September 30, 2014 Pre-modification TDR net finance receivables $— $6 $6Post-modification TDR net finance receivables $— $7 $7Number of TDR accounts — 89 89 Nine Months Ended September 30, 2015 Pre-modification TDR net finance receivables * $— $4 $4Post-modification TDR net finance receivables * $— $5 $5Number of TDR accounts 50 77 127 Nine Months Ended September 30, 2014 Pre-modification TDR net finance receivables $— $6 $6Post-modification TDR net finance receivables $— $7 $7Number of TDR accounts — 89 89 *Pre-modification and post-modification TDR personal loans held for sale for the three and nine months ended September 30, 2015 were less than $1 million and, therefore, are not quantified in the table above. | ||||||
[3] | Pre-modification and post-modification TDR personal loans held for sale for the three and nine months ended September 30, 2015 were less than $1 million and, therefore, are not quantified in the table above. |
Finance Receivables (Details 11
Finance Receivables (Details 11) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2015USD ($)account | Sep. 30, 2014USD ($)account | Sep. 30, 2015USD ($)account | Sep. 30, 2014USD ($)account | ||||||
Financing Receivable, Modifications [Line Items] | |||||||||
TDR net finance receivables | [1] | $ 2 | [2] | $ 2 | [2] | $ 6 | $ 31 | [2] | |
Number of TDR accounts | account | 377 | 107 | 1,012 | 573 | |||||
Personal loans | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
TDR net finance receivables | [1],[3] | $ 1 | [2] | $ 0 | [2] | $ 3 | $ 0 | [2] | |
Number of TDR accounts | account | 342 | [1] | 42 | [3] | 855 | [3] | 74 | [3] | |
SpringCastle Portfolio | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
TDR net finance receivables | [1] | $ 0 | [2] | $ 0 | [2] | $ 1 | $ 0 | [2] | |
Number of TDR accounts | account | 26 | 11 | 122 | 11 | |||||
Real estate loans | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
TDR net finance receivables | [1] | $ 1 | [2],[3] | $ 2 | [2] | $ 2 | [3] | $ 31 | [2],[3] |
Number of TDR accounts | account | [3] | 9 | 54 | 35 | 488 | ||||
Real Estate Loans Held for Sale | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
TDR net finance receivables | $ 0 | [4] | $ 2 | $ 1 | $ 2 | ||||
Number of TDR accounts | account | 1 | 30 | 14 | 30 | |||||
Real Estate Loans Held for Sale | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
Pre-modification TDR net finance receivables | $ 1 | ||||||||
SpringCastle Portfolio | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
Pre-modification TDR net finance receivables | $ 1 | $ 1 | $ 1 | ||||||
Personal loans | |||||||||
Financing Receivable, Modifications [Line Items] | |||||||||
Pre-modification TDR net finance receivables | $ 1 | ||||||||
[1] | Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted. | ||||||||
[2] | TDR personal loans and SpringCastle Portfolio loans for the three and nine months ended September 30, 2014 and TDR SpringCastle Portfolio loans for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. | ||||||||
[3] | (a)TDR finance receivables held for sale included in the table above were as follows:(dollars in millions) Real EstateLoans Three Months Ended September 30, 2015 TDR net finance receivables * $—Number of TDR accounts 1 Three Months Ended September 30, 2014 TDR net finance receivables $2Number of TDR accounts 30 Nine Months Ended September 30, 2015 TDR net finance receivables $1Number of TDR accounts 14 Nine Months Ended September 30, 2014 TDR net finance receivables $2Number of TDR accounts 30 *TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. | ||||||||
[4] | TDR real estate loans held for sale for the three months ended September 30, 2015 that defaulted during the previous 12 month period were less than $1 million and, therefore, are not quantified in the combined table above. |
Allowance for Finance Receiva54
Allowance for Finance Receivable Losses (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | $ 178 | $ 366 | $ 174 | $ 332 | |||||
Provision for finance receivable losses | 82 | 93 | 247 | 274 | |||||
Charge-offs | (83) | (82) | (271) | (230) | |||||
Recoveries | 15 | 9 | 42 | 25 | [1] | ||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale | (1) | [2] | (225) | [3] | (1) | [2] | (240) | [3] | |
Allowance for SpringCastle Portfolio contributed to SFC | 1 | 1 | |||||||
Balance at end of period | 191 | 162 | 191 | 162 | |||||
Carrying value of finance receivables transferred from held for investment to held for sale | 5,300 | 6,600 | |||||||
Carrying amount charged-off for purchased credit impaired loans | |||||||||
Net charge-offs on finance receivables held for sale | 0 | 11 | |||||||
Consolidated VIEs | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | 72 | ||||||||
Balance at end of period | 131 | 131 | |||||||
Real Estate Loan | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Carrying value of finance receivables transferred from held for investment to held for sale | 5,300 | 6,600 | |||||||
Personal loans | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | 139 | 106 | 130 | 94 | |||||
Provision for finance receivable losses | 60 | 58 | 170 | 150 | |||||
Charge-offs | (57) | (48) | (176) | (139) | |||||
Recoveries | 10 | 7 | 28 | 18 | [1] | ||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale | (1) | [2] | 0 | [3] | (1) | [2] | 0 | [3] | |
Allowance for SpringCastle Portfolio contributed to SFC | 0 | 0 | |||||||
Balance at end of period | 151 | 123 | 151 | 123 | |||||
Carrying value of finance receivables transferred from held for investment to held for sale | 608 | 608 | |||||||
SpringCastle Portfolio | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | 3 | 0 | 3 | 0 | |||||
Provision for finance receivable losses | 20 | 18 | 70 | 18 | |||||
Charge-offs | (22) | (20) | (78) | (20) | |||||
Recoveries | 3 | 2 | 9 | 2 | [1] | ||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale | 0 | [2] | 0 | [3] | 0 | [2] | 0 | [3] | |
Allowance for SpringCastle Portfolio contributed to SFC | 1 | 1 | |||||||
Balance at end of period | 4 | 1 | 4 | 1 | |||||
Carrying amount charged-off for purchased credit impaired loans | |||||||||
Net charge-offs on finance receivables held for sale | 4 | 5 | 17 | 5 | |||||
Real Estate | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | 35 | 259 | 40 | 236 | |||||
Provision for finance receivable losses | 2 | 16 | 6 | 103 | |||||
Charge-offs | (4) | (13) | (15) | (67) | |||||
Recoveries | 2 | 4 | 5 | [1] | |||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale | 0 | [2] | (225) | [3] | 0 | [2] | (240) | [3] | |
Allowance for SpringCastle Portfolio contributed to SFC | 0 | 0 | |||||||
Balance at end of period | 35 | 37 | 35 | 37 | |||||
Recoveries resulting from sale of previously charged-off finance receivables and settlement of claims | 2 | ||||||||
Retail Sales Finance | |||||||||
Changes in the allowance for finance receivable losses by finance receivable type | |||||||||
Balance at beginning of period | 1 | 1 | 1 | 2 | |||||
Provision for finance receivable losses | 0 | 1 | 1 | 3 | |||||
Charge-offs | 0 | (1) | (2) | (4) | |||||
Recoveries | 0 | 0 | 1 | 0 | [1] | ||||
Reduction in the carrying value of real estate loans transferred to finance receivables held for sale | 0 | [2] | 0 | [3] | 0 | [2] | 0 | [3] | |
Allowance for SpringCastle Portfolio contributed to SFC | 0 | 0 | |||||||
Balance at end of period | 1 | 1 | 1 | 1 | |||||
Affiliates of Fortress or AIG | |||||||||
Carrying amount charged-off for purchased credit impaired loans | |||||||||
Net charge-offs on finance receivables held for sale | [4] | $ 0 | $ 2 | $ 1 | $ 15 | ||||
[1] | Recoveries during the nine months ended September 30, 2014 included $2 million of real estate loan recoveries resulting from a sale of previously charged-off real estate loans in March of 2014. | ||||||||
[2] | During the three and nine months ended September 30, 2015, we reduced the carrying value of certain personal loans to $608 million as a result of the transfer of these finance receivables from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. | ||||||||
[3] | During the three and nine months ended September 30, 2014, we reduced the carrying value of certain real estate loans to $5.3 billion and $6.6 billion, respectively, as a result of the transfer of these loans from finance receivables held for investment to finance receivables held for sale due to management’s intent to no longer hold these finance receivables for the foreseeable future. | ||||||||
[4] | Represents additional impairment recognized, subsequent to the establishment of the pools of purchased credit impaired loans, related to loans that have been foreclosed and transferred to real estate owned status. |
Allowance for Finance Receiva55
Allowance for Finance Receivable Losses (Details 2) - USD ($) $ in Millions | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Allowance for finance receivable losses for finance receivables: | ||||||
Collectively evaluated for impairment | $ 145 | $ 133 | ||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 191 | $ 178 | 174 | $ 162 | $ 366 | $ 332 |
Individually evaluated for impairment (TDR finance receivables) | 41 | 36 | ||||
Allowance for finance receivable losses | 191 | 178 | 174 | 162 | 366 | 332 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 5,804 | 5,945 | ||||
Purchased credit impaired finance receivables | 6,231 | 6,452 | ||||
TDR finance receivables | 147 | 137 | ||||
Net finance receivables | 6,231 | 6,452 | ||||
Personal loans | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Collectively evaluated for impairment | 144 | 129 | ||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 151 | 139 | 130 | 123 | 106 | 94 |
Individually evaluated for impairment (TDR finance receivables) | 7 | 1 | ||||
Allowance for finance receivable losses | 151 | 139 | 130 | 123 | 106 | 94 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 3,963 | 3,778 | ||||
Purchased credit impaired finance receivables | 3,990 | 3,800 | ||||
TDR finance receivables | 27 | 22 | ||||
Net finance receivables | 3,990 | 3,800 | ||||
SpringCastle Portfolio | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Collectively evaluated for impairment | 0 | 0 | ||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 4 | 3 | 3 | 1 | 0 | 0 |
Individually evaluated for impairment (TDR finance receivables) | 4 | 3 | ||||
Allowance for finance receivable losses | 4 | 3 | 3 | 1 | 0 | 0 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 1,404 | 1,629 | ||||
Purchased credit impaired finance receivables | 1,667 | 1,979 | ||||
TDR finance receivables | 12 | 10 | ||||
Net finance receivables | 1,667 | 1,979 | ||||
Real estate loans | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Collectively evaluated for impairment | 0 | 3 | ||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 35 | 35 | 40 | 37 | 259 | 236 |
Individually evaluated for impairment (TDR finance receivables) | 30 | 32 | ||||
Allowance for finance receivable losses | 35 | 35 | 40 | 37 | 259 | 236 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 410 | 490 | ||||
Purchased credit impaired finance receivables | 547 | 625 | ||||
TDR finance receivables | 108 | 105 | ||||
Net finance receivables | 547 | 625 | ||||
Retail Sales Finance | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Collectively evaluated for impairment | 1 | 1 | ||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 1 | 1 | 1 | 1 | 1 | 2 |
Individually evaluated for impairment (TDR finance receivables) | 0 | 0 | ||||
Allowance for finance receivable losses | 1 | $ 1 | 1 | $ 1 | $ 1 | $ 2 |
Finance receivables: | ||||||
Collectively evaluated for impairment | 27 | 48 | ||||
Purchased credit impaired finance receivables | 27 | 48 | ||||
TDR finance receivables | 0 | 0 | ||||
Net finance receivables | 27 | 48 | ||||
Receivables Acquired with Deteriorated Credit Quality | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 5 | 5 | ||||
Allowance for finance receivable losses | 5 | 5 | ||||
Finance receivables: | ||||||
Purchased credit impaired finance receivables | 280 | 370 | ||||
Net finance receivables | 280 | 370 | ||||
Receivables Acquired with Deteriorated Credit Quality | Personal loans | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 0 | 0 | ||||
Allowance for finance receivable losses | 0 | 0 | ||||
Finance receivables: | ||||||
Purchased credit impaired finance receivables | 0 | 0 | ||||
Net finance receivables | 0 | 0 | ||||
Receivables Acquired with Deteriorated Credit Quality | SpringCastle Portfolio | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 0 | 0 | ||||
Allowance for finance receivable losses | 0 | 0 | ||||
Finance receivables: | ||||||
Purchased credit impaired finance receivables | 251 | 340 | ||||
Net finance receivables | 251 | 340 | ||||
Receivables Acquired with Deteriorated Credit Quality | Real estate loans | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 5 | 5 | ||||
Allowance for finance receivable losses | 5 | 5 | ||||
Finance receivables: | ||||||
Purchased credit impaired finance receivables | 29 | 30 | ||||
Net finance receivables | 29 | 30 | ||||
Receivables Acquired with Deteriorated Credit Quality | Retail Sales Finance | ||||||
Allowance for finance receivable losses for finance receivables: | ||||||
Acquired with deteriorated credit quality (purchased credit impaired finance receivables) | 0 | 0 | ||||
Allowance for finance receivable losses | 0 | 0 | ||||
Finance receivables: | ||||||
Purchased credit impaired finance receivables | 0 | 0 | ||||
Net finance receivables | $ 0 | $ 0 |
Finance Receivables Held for 56
Finance Receivables Held for Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Finance Receivables | |||||
Loans receivable held for sale | $ 797 | $ 797 | $ 205 | ||
Finance receivables held for sale originated as held for investment | 4 | $ 47 | 13 | $ 54 | |
Carrying value of finance receivables transferred from held for investment to held for sale | 5,300 | 6,600 | |||
Amount of loans sold | 4,700 | 6,000 | |||
Net gain on sales of real estate loans and related trust assets | 0 | 617 | 0 | 707 | |
Personal loans | |||||
Finance Receivables | |||||
Loans receivable held for sale | 608 | 608 | |||
Carrying value of finance receivables transferred from held for investment to held for sale | 608 | 608 | |||
Real Estate Loan | |||||
Finance Receivables | |||||
Loans receivable held for sale | $ 189 | $ 189 | |||
Carrying value of finance receivables transferred from held for investment to held for sale | $ 5,300 | $ 6,600 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Additions, No Previous Impairment | $ 0 | $ 0 | $ 0 | $ 0 | ||
Cost/ Amortized Cost | [1] | 567,000,000 | 567,000,000 | $ 582,000,000 | ||
Unrealized Gains | [1] | 4,000,000 | 4,000,000 | 20,000,000 | ||
Unrealized Losses | [1] | (7,000,000) | (7,000,000) | (2,000,000) | ||
Fair Value | [1] | 564,000,000 | 564,000,000 | 600,000,000 | ||
Interest in a limited partnership | 1,000,000 | 1,000,000 | 1,000,000 | |||
Available-for-sale Securities Pledged as Collateral | 2,000,000 | |||||
Bonds | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 550,000,000 | 550,000,000 | 574,000,000 | |||
Unrealized Gains | 4,000,000 | 4,000,000 | 20,000,000 | |||
Unrealized Losses | (7,000,000) | (7,000,000) | (2,000,000) | |||
Fair Value | 547,000,000 | 547,000,000 | 592,000,000 | |||
U.S. government and government sponsored entities | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 69,000,000 | 69,000,000 | 61,000,000 | |||
Unrealized Gains | 0 | 0 | 3,000,000 | |||
Unrealized Losses | (1,000,000) | (1,000,000) | 0 | |||
Fair Value | 68,000,000 | 68,000,000 | 64,000,000 | |||
Obligations of states, municipalities, and political subdivisions | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 83,000,000 | 83,000,000 | 99,000,000 | |||
Unrealized Gains | 1,000,000 | 1,000,000 | 3,000,000 | |||
Unrealized Losses | 0 | 0 | 0 | |||
Fair Value | 84,000,000 | 84,000,000 | 102,000,000 | |||
Certificates of deposit and commercial paper | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | [2] | 1,000,000 | ||||
Unrealized Gains | [2] | 0 | ||||
Unrealized Losses | [2] | 0 | ||||
Fair Value | [2] | 1,000,000 | ||||
Corporate debt | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 248,000,000 | 248,000,000 | 256,000,000 | |||
Unrealized Gains | 3,000,000 | 3,000,000 | 12,000,000 | |||
Unrealized Losses | (6,000,000) | (6,000,000) | (1,000,000) | |||
Fair Value | 245,000,000 | 245,000,000 | 267,000,000 | |||
Residential mortgage-backed securities (“RMBS”) | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 79,000,000 | 79,000,000 | 71,000,000 | |||
Unrealized Gains | 0 | 0 | 2,000,000 | |||
Unrealized Losses | 0 | 0 | 0 | |||
Fair Value | 79,000,000 | 79,000,000 | 73,000,000 | |||
Commercial mortgage-backed securities (“CMBS”) | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 39,000,000 | 39,000,000 | 25,000,000 | |||
Unrealized Gains | 0 | 0 | 0 | |||
Unrealized Losses | 0 | 0 | (1,000,000) | |||
Fair Value | 39,000,000 | 39,000,000 | 24,000,000 | |||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 32,000,000 | 32,000,000 | 61,000,000 | |||
Unrealized Gains | 0 | 0 | 0 | |||
Unrealized Losses | 0 | 0 | 0 | |||
Fair Value | 32,000,000 | 32,000,000 | 61,000,000 | |||
Preferred stock | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 16,000,000 | 16,000,000 | 7,000,000 | |||
Unrealized Gains | 0 | 0 | 0 | |||
Unrealized Losses | 0 | 0 | 0 | |||
Fair Value | 16,000,000 | 16,000,000 | 7,000,000 | |||
Other long-term investments | ||||||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Cost/ Amortized Cost | 1,000,000 | 1,000,000 | 1,000,000 | |||
Unrealized Gains | 0 | 0 | 0 | |||
Unrealized Losses | 0 | 0 | 0 | |||
Fair Value | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||
[1] | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at September 30, 2015 and December 31, 2014, which is classified as a restricted investment and carried at cost. | |||||
[2] | Includes certificates of deposit pledged as collateral, totaling $2 million at December 31, 2014, primarily to support bank lines of credit. |
Investment Securities (Details
Investment Securities (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||||
Other than Temporary Impairment Losses, Investments | $ 0 | $ 0 | $ 0 | $ 0 | ||
minimum disclosure of Unrealized losses on certain available-for-sale securities | 1,000,000 | |||||
Fair Value | ||||||
Less Than 12 Months | 223,000,000 | 223,000,000 | $ 140,000,000 | |||
12 Months or Longer | 32,000,000 | 32,000,000 | 10,000,000 | |||
Total | 255,000,000 | 255,000,000 | 150,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | (7,000,000) | (7,000,000) | (2,000,000) | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | (7,000,000) | (7,000,000) | (2,000,000) | |||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Additions, No Previous Impairment | 0 | 0 | 0 | 0 | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Reductions, Securities Sold | 0 | $ 0 | 0 | $ 0 | ||
Bonds | ||||||
Fair Value | ||||||
Less Than 12 Months | 216,000,000 | 216,000,000 | 134,000,000 | |||
12 Months or Longer | 32,000,000 | 32,000,000 | 10,000,000 | |||
Total | 248,000,000 | 248,000,000 | 144,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | (7,000,000) | (7,000,000) | (2,000,000) | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | (7,000,000) | (7,000,000) | (2,000,000) | |||
U.S. government and government sponsored entities | ||||||
Fair Value | ||||||
Less Than 12 Months | 51,000,000 | 51,000,000 | 0 | |||
12 Months or Longer | 0 | 0 | 1,000,000 | |||
Total | 51,000,000 | 51,000,000 | 1,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | (1,000,000) | (1,000,000) | 0 | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | (1,000,000) | (1,000,000) | 0 | |||
Obligations of states, municipalities, and political subdivisions | ||||||
Fair Value | ||||||
Less Than 12 Months | 15,000,000 | 15,000,000 | 27,000,000 | |||
12 Months or Longer | 11,000,000 | 11,000,000 | 1,000,000 | |||
Total | 26,000,000 | 26,000,000 | 28,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | 0 | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | 0 | 0 | 0 | |||
Corporate debt | ||||||
Fair Value | ||||||
Less Than 12 Months | 107,000,000 | 107,000,000 | 36,000,000 | |||
12 Months or Longer | 14,000,000 | 14,000,000 | 6,000,000 | |||
Total | 121,000,000 | 121,000,000 | 42,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | (6,000,000) | (6,000,000) | (1,000,000) | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | (6,000,000) | (6,000,000) | (1,000,000) | |||
Residential mortgage-backed securities (“RMBS”) | ||||||
Fair Value | ||||||
Less Than 12 Months | 8,000,000 | 8,000,000 | 9,000,000 | |||
12 Months or Longer | 0 | 0 | 0 | |||
Total | 8,000,000 | 8,000,000 | 9,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | 0 | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | 0 | 0 | 0 | |||
Commercial mortgage-backed securities (“CMBS”) | ||||||
Fair Value | ||||||
Less Than 12 Months | 19,000,000 | 19,000,000 | 16,000,000 | |||
12 Months or Longer | 7,000,000 | 7,000,000 | 2,000,000 | |||
Total | 26,000,000 | 26,000,000 | 18,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | (1,000,000) | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | 0 | 0 | (1,000,000) | |||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||||
Fair Value | ||||||
Less Than 12 Months | 16,000,000 | 16,000,000 | 46,000,000 | |||
12 Months or Longer | 0 | 0 | 0 | |||
Total | 16,000,000 | 16,000,000 | 46,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | 0 | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | 0 | 0 | 0 | |||
Preferred stock | ||||||
Fair Value | ||||||
Less Than 12 Months | 6,000,000 | 6,000,000 | 6,000,000 | |||
12 Months or Longer | 0 | 0 | 0 | |||
Total | 6,000,000 | 6,000,000 | 6,000,000 | |||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | 0 | ||
12 Months or Longer | [1] | 0 | 0 | 0 | ||
Total | 0 | 0 | $ 0 | |||
Other long-term investments | ||||||
Fair Value | ||||||
Less Than 12 Months | 1,000,000 | 1,000,000 | ||||
12 Months or Longer | 0 | 0 | ||||
Total | 1,000,000 | 1,000,000 | ||||
Unrealized Losses | ||||||
Less Than 12 Months | [1] | 0 | 0 | |||
12 Months or Longer | [1] | 0 | 0 | |||
Total | $ 0 | $ 0 | ||||
[1] | Unrealized losses on certain available-for-sale securities were less than $1 million and, therefore, are not quantified in the table above. |
Investment Securities (Detail59
Investment Securities (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Available-for-sale securities sold or redeemed | ||||
Fair value | $ 168 | $ 105 | $ 372 | $ 203 |
Realized gains | 4 | 5 | 15 | 7 |
Realized losses | 0 | 0 | (1) | 0 |
Net realized gains | $ 4 | $ 5 | $ 14 | $ 7 |
Investment Securities (Detail60
Investment Securities (Details 4) $ in Millions | Sep. 30, 2015USD ($) |
Fair Value | |
Due in 1 year or less | $ 72 |
Due after 1 year through 5 years | 150 |
Due after 5 years through 10 years | 57 |
Due after 10 years | 118 |
Mortgage-backed, asset-backed, and collateralized securities | 150 |
Total | 547 |
Amortized Cost | |
Due in 1 year or less | 72 |
Due after 1 year through 5 years | 150 |
Due after 5 years through 10 years | 57 |
Due after 10 years | 121 |
Mortgage-backed, asset-backed, and collateralized securities | 150 |
Total | $ 550 |
Investment Securities (Detail61
Investment Securities (Details 5) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Trading securities | |||||
Trading securities | $ 1,177 | $ 1,177 | $ 2,321 | ||
Net unrealized and realized gains (losses) on trading securities | |||||
Net unrealized gains (losses) on trading securities held at period end | (1) | $ (2) | 3 | $ (1) | |
Net realized losses on trading securities sold or redeemed | (1) | 0 | (2) | 0 | |
Total | (2) | $ (2) | 1 | $ (1) | |
U.S. government and government sponsored entities | |||||
Trading securities | |||||
Trading securities | 783 | 783 | 302 | ||
Obligations of states, municipalities, and political subdivisions | |||||
Trading securities | |||||
Trading securities | 0 | 0 | 14 | ||
Certificates of deposit and commercial paper | |||||
Trading securities | |||||
Trading securities | 0 | 0 | 238 | ||
Non-U.S. government and government sponsored entities | |||||
Trading securities | |||||
Trading securities | 0 | 0 | 20 | ||
Corporate debt | |||||
Trading securities | |||||
Trading securities | 196 | 196 | 1,056 | ||
Residential mortgage-backed securities (“RMBS”) | |||||
Trading securities | |||||
Trading securities | 2 | 2 | 35 | ||
Commercial mortgage-backed securities (“CMBS”) | |||||
Trading securities | |||||
Trading securities | 45 | 45 | 149 | ||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | |||||
Trading securities | |||||
Trading securities | $ 151 | $ 151 | $ 507 |
Investment Securities Narrative
Investment Securities Narrative (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities with other-than-temporary impairments recognized in accumulated other comprehensive income or loss | $ 0 | $ 0 | |
Available-for-sale securities | [1] | 564,000,000 | 600,000,000 |
Insurance Regulatory Authorities Bonds on Deposit | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities | $ 11,000,000 | $ 12,000,000 | |
[1] | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at September 30, 2015 and December 31, 2014, which is classified as a restricted investment and carried at cost. |
Transactions with Affiliates 63
Transactions with Affiliates of Fortress or AIG (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | May. 31, 2015 | Dec. 31, 2014 | Aug. 01, 2014 | Mar. 06, 2014 | |
Transactions with Affiliates of Fortress or AIG | ||||||||
Ownership percentage in joint venture | 47.00% | 47.00% | ||||||
Price agreed on for sale of interest in securitized assets | $ 39 | |||||||
NRZ Consumer LLC | Spring Castle Acquisition | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Ownership percentage | 30.00% | 30.00% | ||||||
Affiliated Entity | Nationstar Mortgage LLC | Servicing Agreement | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Receivable from Nationstar | $ 1 | |||||||
Nationstar accounts receivable balance | $ 1 | |||||||
Affiliated Entity | Logan Circle Partners L.P. | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Costs and fees incurred for the investment management services | $ 1 | $ 1 | $ 1 | $ 1 | ||||
Premium expense on insurance policies | 1 | 1 | 1 | 1 | ||||
Affiliated Entity | Merit | Subsidiaries of American International Group Inc | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Reserves for reinsurance agreements | 43 | 43 | $ 44 | |||||
Affiliated Entity | 2009-1 Trust | MLPFS | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Percentage of interest concurrently agreed to be sold by counterparty to related party | 75.00% | |||||||
Nationstar Mortgage LLC | Owners | ||||||||
Transactions with Affiliates of Fortress or AIG | ||||||||
Subservicing fees | $ 1 | $ 1 | $ 1 | $ 5 |
Related Party Transactions (Det
Related Party Transactions (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)building | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Jul. 31, 2014USD ($)$ / sharesshares | Jan. 31, 2014USD ($) | |
Related Party Transactions | |||||||
Note receivable from SFI | $ 322 | $ 322 | $ 251 | ||||
Receivables from parent and affiliates | 7 | $ 7 | 12 | ||||
Percentage of allocated cost of service | 100.00% | ||||||
Affiliated Entity | |||||||
Related Party Transactions | |||||||
Payable due to SFI | 19 | $ 19 | 48 | ||||
Affiliated Entity | Spring Castle Holdings LLC | Services Agreement | |||||||
Related Party Transactions | |||||||
Payables to parent and affiliates | 4 | 4 | 10 | ||||
Affiliated Entity | Spring leaf General Services Corporation | Springleaf Finance Management Corporation | Intercompany Agreements | |||||||
Related Party Transactions | |||||||
Net payables | 15 | $ 15 | 19 | ||||
Affiliated Entity | Spring leaf General Services Corporation | Springleaf Finance Management Corporation | Services Agreement | |||||||
Related Party Transactions | |||||||
Percentage of allocated cost of service | 100.00% | ||||||
Service fee expenses | 55 | $ 65 | $ 156 | $ 160 | |||
Affiliated Entity | Spring leaf General Services Corporation | Springleaf Finance Management Corporation | License Agreement | |||||||
Related Party Transactions | |||||||
Margin on the systems and software (as a percent) | 7.00% | ||||||
Percentage of actual cost incurred | 100.00% | ||||||
License fees | 1 | 1 | $ 4 | 4 | |||
Affiliated Entity | Spring leaf General Services Corporation | Springleaf Finance Management Corporation | Building Lease | |||||||
Related Party Transactions | |||||||
Number of buildings leased | building | 6 | ||||||
Annual rental fees | $ 4 | ||||||
Rent charged | 1 | 1 | 3 | 3 | |||
Affiliated Entity | SFI | |||||||
Related Party Transactions | |||||||
Note receivable from SFI | 322 | 322 | 251 | ||||
Interest receivable on note | 2 | 2 | 1 | ||||
Interest revenue on note receivable | 5 | $ 1 | 11 | $ 4 | |||
Capital Contribution of Common Stock, Shares | shares | 100 | ||||||
Capital contributions received to satisfy interest payments | $ 11 | $ 11 | |||||
Partners' Capital, Distribution Amount Per Share | $ / shares | $ 0.01 | ||||||
Affiliated Entity | Springleaf Finance Management Corporation | |||||||
Related Party Transactions | |||||||
Payable due to SFI | 1 | 1 | 1 | ||||
Affiliated Entity | Intercompany Demand Note Due 31 December 2022 | SFI | SAC | |||||||
Related Party Transactions | |||||||
Face amount of each issuance of debt | $ 2.5 | $ 2.5 | 1 | ||||
Interest rates (as a percent) | 25.00% | 25.00% | |||||
Subsidiary of Common Parent | Second Street Funding Corporation | |||||||
Related Party Transactions | |||||||
Current tax receivable | $ 4 | $ 4 | 4 | ||||
Parent | |||||||
Related Party Transactions | |||||||
Payables to parent and affiliates | 9 | 9 | 43 | ||||
Payable due to SFI | 2 | 2 | 17 | ||||
Majority Shareholder | |||||||
Related Party Transactions | |||||||
Receivables from parent and affiliates | $ 16 | $ 16 | $ 54 |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) | Dec. 30, 2013 | Dec. 30, 2013 | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 03, 2014 | ||
Principal maturities of long-term debt by type of debt | |||||||
Fourth quarter 2015 | $ 750,000,000 | ||||||
First quarter 2016 | 0 | ||||||
Second quarter 2016 | 0 | ||||||
Third quarter 2016 | 375,000,000 | ||||||
Remainder of 2016 | 0 | ||||||
2,017 | 1,902,000,000 | ||||||
2,018 | 0 | ||||||
2,019 | 700,000,000 | ||||||
2020-2067 | 1,600,000,000 | ||||||
Securitizations | [1] | 4,784,000,000 | |||||
Total principal maturities | 10,111,000,000 | ||||||
Long-term debt | $ 9,555,000,000 | [2] | $ 8,356,000,000 | ||||
Medium Term Notes | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Contractual interest rate, minimum (as a percent) | [3] | 5.25% | |||||
Contractual interest rate, maximum (as a percent) | [3] | 8.25% | |||||
Fourth quarter 2015 | $ 750,000,000 | ||||||
First quarter 2016 | 0 | ||||||
Second quarter 2016 | 0 | ||||||
Third quarter 2016 | 375,000,000 | ||||||
Remainder of 2016 | 0 | ||||||
2,017 | 1,902,000,000 | ||||||
2,018 | 0 | ||||||
2,019 | 700,000,000 | ||||||
2020-2067 | 1,250,000,000 | ||||||
Securitizations | [1] | 0 | |||||
Total principal maturities | 4,977,000,000 | ||||||
Long-term debt | [2] | $ 4,613,000,000 | |||||
Securitizations | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Contractual interest rate, minimum (as a percent) | [3] | 1.87% | |||||
Contractual interest rate, maximum (as a percent) | [3] | 6.82% | |||||
Fourth quarter 2015 | $ 0 | ||||||
First quarter 2016 | 0 | ||||||
Second quarter 2016 | 0 | ||||||
Third quarter 2016 | 0 | ||||||
Remainder of 2016 | 0 | ||||||
2,017 | 0 | ||||||
2,018 | 0 | ||||||
2,019 | 0 | ||||||
2020-2067 | 0 | ||||||
Securitizations | [1] | 4,784,000,000 | |||||
Total principal maturities | 4,784,000,000 | ||||||
Long-term debt | [2] | $ 4,771,000,000 | |||||
Junior Subordinated Debt | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Interest rates (as a percent) | [3] | 6.00% | |||||
Fourth quarter 2015 | $ 0 | ||||||
First quarter 2016 | 0 | ||||||
Second quarter 2016 | 0 | ||||||
Third quarter 2016 | 0 | ||||||
Remainder of 2016 | 0 | ||||||
2,017 | 0 | ||||||
2,018 | 0 | ||||||
2,019 | 0 | ||||||
2020-2067 | 350,000,000 | ||||||
Securitizations | [1] | 0 | |||||
Total principal maturities | 350,000,000 | ||||||
Long-term debt | [2] | 171,000,000 | |||||
Guaranty Agreements | Junior Subordinated Debt | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Face amount of each issuance of debt | $ 350,000,000 | $ 350,000,000 | 350,000,000 | ||||
Term of debt | 60 years | 60 years | |||||
Guaranty Agreements | Senior debt | Parent Company | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Interest rates (as a percent) | 5.25% | ||||||
Face amount of each issuance of debt | 700,000,000 | $ 700,000,000 | |||||
Guaranty Agreements | Senior debt | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Face amount of each issuance of debt | $ 5,200,000,000 | $ 5,200,000,000 | 5,000,000,000 | ||||
Guaranty Agreements | 8.250% Senior Notes due 2023 | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Interest rates (as a percent) | 8.25% | 8.25% | |||||
Guaranty Agreements | 7.750% Senior Notes due 2021 | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Interest rates (as a percent) | 7.75% | 7.75% | |||||
Guaranty Agreements | 6.00% Senior Notes due 2020 | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Interest rates (as a percent) | 6.00% | 6.00% | |||||
Guaranty Agreements | Senior Notes 1999 Indenture | Springleaf Holding Inc. | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Face amount of each issuance of debt | 3,000,000,000 | ||||||
New Accounting Pronouncement, Early Adoption, Effect | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Long-term debt | $ 29,000,000 | ||||||
Debt Issuance Cost | [4] | (30,000,000) | |||||
New Accounting Pronouncement, Early Adoption, Effect | Medium Term Notes | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Debt Issuance Cost | [4] | (13,000,000) | |||||
New Accounting Pronouncement, Early Adoption, Effect | Securitizations | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Debt Issuance Cost | [4] | (17,000,000) | |||||
New Accounting Pronouncement, Early Adoption, Effect | Junior Subordinated Debt | |||||||
Principal maturities of long-term debt by type of debt | |||||||
Debt Issuance Cost | [4] | $ 0 | |||||
[1] | Securitizations are not included in above maturities by period due to their variable monthly repayments. See Note 11 for further information on our long-term debt associated with securitizations. | ||||||
[2] | The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. | ||||||
[3] | The interest rates shown are the range of contractual rates in effect at September 30, 2015. | ||||||
[4] | As a result of our early adoption of ASU 2015-03 in June of 2015, we report debt issuance costs as a direct deduction from long-term debt. |
Variable Interest Entities (Det
Variable Interest Entities (Details) | Jun. 30, 2015USD ($) | Jun. 10, 2015USD ($) | Jun. 03, 2015USD ($) | May. 27, 2015USD ($) | May. 20, 2015USD ($) | May. 19, 2015 | Apr. 07, 2015USD ($) | Feb. 26, 2015USD ($) | Jan. 16, 2015USD ($) | Jan. 15, 2015 | Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($)loan | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($)loan | Dec. 31, 2014USD ($) | Mar. 25, 2015USD ($) | Mar. 24, 2015USD ($) | Mar. 09, 2015USD ($) | Jun. 30, 2014USD ($) | Mar. 24, 2014USD ($) | Dec. 31, 2013USD ($) | |||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | $ 6,231,000,000 | $ 6,231,000,000 | $ 6,452,000,000 | |||||||||||||||||||||
Allowance for finance receivable losses | $ 178,000,000 | 191,000,000 | $ 162,000,000 | 191,000,000 | $ 162,000,000 | 174,000,000 | $ 366,000,000 | $ 332,000,000 | ||||||||||||||||
Finance receivables held for sale | 797,000,000 | 797,000,000 | 205,000,000 | |||||||||||||||||||||
Restricted cash and cash equivalents | 270,000,000 | 270,000,000 | 218,000,000 | |||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Long-term debt | 9,555,000,000 | [1] | 9,555,000,000 | [1] | 8,356,000,000 | |||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Other assets | 455,000,000 | 455,000,000 | 474,000,000 | |||||||||||||||||||||
Long-term Debt, Gross | 10,111,000,000 | 10,111,000,000 | ||||||||||||||||||||||
Interest expense | $ 171,000,000 | $ 172,000,000 | 500,000,000 | $ 526,000,000 | ||||||||||||||||||||
Real estate loans sold, reserve for sales recourse obligations | 22,000,000 | |||||||||||||||||||||||
Financing Receivable Loans Reaching Defined Delinquency Limits Repurchased under Loan Sale Agreement Number | loan | 0 | 4 | 9 | |||||||||||||||||||||
Personal loans | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | $ 3,990,000,000 | 3,990,000,000 | 3,800,000,000 | |||||||||||||||||||||
Allowance for finance receivable losses | 139,000,000 | 151,000,000 | $ 123,000,000 | 151,000,000 | $ 123,000,000 | 130,000,000 | 106,000,000 | 94,000,000 | ||||||||||||||||
Finance receivables held for sale | 608,000,000 | 608,000,000 | ||||||||||||||||||||||
SpringCastle Portfolio | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | 1,667,000,000 | 1,667,000,000 | 1,979,000,000 | |||||||||||||||||||||
Allowance for finance receivable losses | 3,000,000 | 4,000,000 | 1,000,000 | 4,000,000 | 1,000,000 | 3,000,000 | 0 | 0 | ||||||||||||||||
Real Estate | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | 547,000,000 | 547,000,000 | 625,000,000 | |||||||||||||||||||||
Allowance for finance receivable losses | 35,000,000 | 35,000,000 | 37,000,000 | 35,000,000 | 37,000,000 | 40,000,000 | $ 259,000,000 | $ 236,000,000 | ||||||||||||||||
Mortgage Loan Securitizations | Real Estate | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Real estate loans sold, reserve for sales recourse obligations | $ 6,000,000 | 6,000,000 | ||||||||||||||||||||||
Financing Receivable Loans Reaching Defined Delinquency Limits Repurchased under Loan Sale Agreement Number | 0 | |||||||||||||||||||||||
SpringCastle 2014-A Notes, Class C | SAC | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Long-term Debt, Gross | $ 232,000,000 | |||||||||||||||||||||||
SpringCastle 2014-A Notes, Class D | SAC | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Long-term Debt, Gross | $ 131,000,000 | |||||||||||||||||||||||
Consolidated VIEs | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Allowance for finance receivable losses | 131,000,000 | $ 131,000,000 | 72,000,000 | |||||||||||||||||||||
Finance receivables held for sale | 484,000,000 | 484,000,000 | 0 | |||||||||||||||||||||
Restricted cash and cash equivalents | 256,000,000 | 256,000,000 | 210,000,000 | |||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Long-term debt | [2] | 4,771,000,000 | 4,771,000,000 | 3,630,000,000 | ||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Interest expense | 49,000,000 | 43,000,000 | 136,000,000 | 130,000,000 | ||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Sumner Brook Funding Trust 2013 VFN1 | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Funding period | 3 years | 2 years | ||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 350,000,000 | |||||||||||||||||||||||
Amounts funded at closing | 0 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 0 | 0 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Springleaf Funding Trust 2013 BAC | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Funding period | 2 years | 2 years | ||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 350,000,000 | |||||||||||||||||||||||
Amounts funded at closing | 0 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 0 | 0 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Mill River 2015 VFN1 | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Funding period | 3 years | |||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 400,000,000 | |||||||||||||||||||||||
Amounts funded at closing | 0 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 0 | 0 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Second Avenue funding, LLC securitization | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Funding period | 3 years | |||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 250,000,000 | |||||||||||||||||||||||
Amounts funded at closing | 0 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 0 | 0 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | First Avenue Funding LLC 2015 | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Funding period | 2 years | |||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 250,000,000 | |||||||||||||||||||||||
Amounts funded at closing | 0 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 0 | 0 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Personal loans | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | 2,096,000,000 | 2,096,000,000 | 1,853,000,000 | |||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Personal loans | Springleaf Funding Trust 2015-A | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Amount of notes sold under private securitization | $ 1,200,000,000 | |||||||||||||||||||||||
Weighted average yield (as a percent) | 3.58% | |||||||||||||||||||||||
Proceeds from notes sold under securitization transactions | $ 1,200,000,000 | |||||||||||||||||||||||
Interest reserve requirement on notes sold under securitization | $ 12,000,000 | |||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Personal loans | Whitford Brook 2014-VFN1 Securitization | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Maximum amount of notes that may be issued under private securitization facility | $ 250,000,000 | $ 300,000,000 | $ 300,000,000 | |||||||||||||||||||||
Required minimum balance | $ 100,000,000 | |||||||||||||||||||||||
Amount paid under securitization | $ 100,000,000 | |||||||||||||||||||||||
Amount Outstanding under Securitization Transaction | 100,000,000 | 100,000,000 | ||||||||||||||||||||||
Consolidated VIEs | Consumer Loan Securitizations | Personal loans | Springleaf Funding Trust 2015 B | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Amount of notes sold under private securitization | $ 314,000,000 | |||||||||||||||||||||||
Weighted average yield (as a percent) | 3.84% | |||||||||||||||||||||||
Proceeds from notes sold under securitization transactions | $ 314,000,000 | |||||||||||||||||||||||
Interest reserve requirement on notes sold under securitization | $ 3,000,000 | |||||||||||||||||||||||
Consolidated VIEs | Mortgage Loan Securitizations | SpringCastle Portfolio | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Purchased credit impaired finance receivables | 1,667,000,000 | 1,667,000,000 | 1,979,000,000 | |||||||||||||||||||||
Consolidated VIEs | Mortgage Loan Securitizations | Real Estate | ||||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Amount of loans sold | 5,100,000,000 | |||||||||||||||||||||||
New Accounting Pronouncement, Early Adoption, Effect | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Long-term debt | 29,000,000 | |||||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Other assets | $ 32,000,000 | $ 29,000,000 | $ 29,000,000 | |||||||||||||||||||||
New Accounting Pronouncement, Early Adoption, Effect | Consolidated VIEs | ||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Long-term debt | 0 | 0 | $ 14,000,000 | |||||||||||||||||||||
Variable Interest Entities, other information | ||||||||||||||||||||||||
Other assets | $ 0 | $ 0 | ||||||||||||||||||||||
[1] | The net carrying amount of our long-term debt associated with certain securitizations that were either (1) issued at a premium or discount or (2) revalued at a premium or discount based on its fair value at the time of the Fortress Acquisition or (3) recorded at fair value on a recurring basis in circumstances when the embedded derivative within the securitization structure cannot be separately accounted for at fair value. | |||||||||||||||||||||||
[2] | As a result of our early adoption of ASU 2015-03 in June of 2015, we reclassified $14 million of debt issuance costs related to our long-term debt associated with our securitizations as of December 31, 2014, from other assets to long-term debt. |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | $ (7) | $ 38 | $ 3 | $ 28 |
Other comprehensive loss before reclassifications | (2) | (2) | (5) | 10 |
Reclassification adjustments from accumulated other comprehensive income (loss) | (2) | (2) | (9) | (4) |
Balance at end of period | (11) | 34 | (11) | 34 |
Unrealized Gains Investment Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 2 | 14 | 12 | 4 |
Other comprehensive loss before reclassifications | (2) | (2) | (5) | 10 |
Reclassification adjustments from accumulated other comprehensive income (loss) | (2) | (2) | (9) | (4) |
Balance at end of period | (2) | 10 | (2) | 10 |
Retirement Plan Liabilities Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | (13) | 20 | (13) | 20 |
Balance at end of period | (13) | 20 | (13) | 20 |
Foreign Currency Translation Adjustments | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at beginning of period | 4 | 4 | 4 | 4 |
Other comprehensive loss before reclassifications | 0 | 0 | 0 | 0 |
Balance at end of period | $ 4 | $ 4 | $ 4 | $ 4 |
Accumulated Other Comprehensi68
Accumulated Other Comprehensive Income (Details 2) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Reclassification adjustments from accumulated other comprehensive income | ||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | $ 11 | $ 12 | $ 43 | $ 32 |
Income tax effect | (7) | (219) | (14) | (276) |
Net income | 36 | 429 | 103 | 520 |
Unrealized Gains Investment Securities | Reclassification adjustments | ||||
Reclassification adjustments from accumulated other comprehensive income | ||||
Reclassification from accumulated other comprehensive income (loss) to investment revenues, before taxes | 4 | 3 | 14 | 6 |
Income tax effect | 2 | 1 | 5 | 2 |
Net income | $ 2 | $ 2 | $ 9 | $ 4 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Net deferred tax liabilities | $ 138 | $ 156 | |
Effective income tax rate (as a percent) | 12.10% | 34.70% |
Contingencies - Narrative (Deta
Contingencies - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015USD ($)loanrequest | Sep. 30, 2014USD ($)loan | Sep. 30, 2015USD ($)loanrequest | Sep. 30, 2014USD ($)loan | Dec. 31, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) | |
Finance Receivables | ||||||||
Real estate loans sold, reserve for sales recourse obligations | $ 22 | |||||||
Finance receivables reserve for sales recourse obligations | $ 18 | $ 13 | $ 18 | $ 13 | 24 | $ 18 | $ 5 | $ 5 |
Repurchased loans | $ 1 | $ 2 | ||||||
Number of unresolved recourse requests | request | 0 | 0 | ||||||
Financing Receivable Loans Reaching Defined Delinquency Limits Repurchased under Loan Sale Agreement Number | loan | 0 | 4 | 9 | |||||
Estimated PPI claims reserve | $ 8 | $ 8 | $ 14 | |||||
Real Estate Loan | ||||||||
Finance Receivables | ||||||||
Finance receivables reserve for sales recourse obligations | $ 18 | 18 | ||||||
Repurchased loans | $ 1 | |||||||
Financing Receivable Loans Reaching Defined Delinquency Limits Repurchased under Loan Sale Agreement Number | loan | 0 | 13 | 0 |
Contingencies - Sales Recourse
Contingencies - Sales Recourse Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | ||
Finance Receivables Reserve for Sales Recourse Obligations [Roll Forward] | |||||
Finance receivables reserve for sales recourse obligations, beginning balance | $ 18 | $ 5 | $ 24 | $ 5 | |
Recourse losses | 0 | 0 | (5) | 0 | |
Provision for recourse obligations, net of recoveries | [1] | 0 | 8 | (1) | 8 |
Finance receivables reserve for sales recourse obligations, ending balance | $ 18 | $ 13 | $ 18 | $ 13 | |
[1] | Reflects the elimination of the reserve associated with other prior sales of finance receivables. |
Benefit Plans (Details)
Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pension | ||||
Components of net periodic benefit cost: | ||||
Interest cost | $ 4 | $ 3 | $ 12 | $ 11 |
Expected return on assets | (5) | (4) | (14) | (12) |
Net periodic benefit cost | (1) | (1) | (2) | (1) |
Other Postretirement Benefit Plan | ||||
Components of net periodic benefit cost: | ||||
Net periodic benefit cost | $ 1 | $ 1 | $ 1 | $ 1 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |||
Segment Reporting Information [Line Items] | ||||||||
Interest income | $ 423 | $ 432 | $ 1,234 | $ 1,226 | ||||
Interest expense | 171 | 172 | 500 | 526 | ||||
Provision for finance receivable losses | 82 | 93 | 247 | 274 | ||||
Net interest income after provision for finance receivable losses | 170 | 167 | 487 | 426 | ||||
Other revenues | 55 | 663 | 167 | 855 | ||||
Other expenses | 182 | 182 | 537 | 485 | ||||
Income before provision for income taxes | 43 | 648 | 117 | 796 | ||||
Income before provision for income taxes attributable to non-controlling interests | 31 | 23 | 93 | 23 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 12 | 625 | 24 | 773 | ||||
Assets | 12,382 | 11,306 | [1],[2] | 12,382 | 11,306 | [1],[2] | $ 11,097 | |
Other assets | 455 | 455 | $ 474 | |||||
New Accounting Pronouncement, Early Adoption, Effect | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Other assets | 29 | 29 | $ 32 | |||||
Operating segments | Consumer and Insurance | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 289 | 234 | 810 | 663 | ||||
Interest expense | 43 | 39 | 119 | 121 | ||||
Provision for finance receivable losses | 62 | 55 | 170 | 148 | ||||
Net interest income after provision for finance receivable losses | 184 | 140 | 521 | 394 | ||||
Other revenues | 55 | 60 | 161 | 167 | ||||
Other expenses | 157 | 131 | 448 | 380 | ||||
Income before provision for income taxes | 82 | 69 | 234 | 181 | ||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 82 | 69 | 234 | 181 | ||||
Assets | 5,628 | 4,626 | [1],[2] | 5,628 | 4,626 | [1],[2] | ||
Operating segments | Acquisitions and Servicing | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 113 | 84 | 356 | 84 | ||||
Interest expense | 22 | 12 | 67 | 12 | ||||
Provision for finance receivable losses | 19 | 18 | 69 | 18 | ||||
Net interest income after provision for finance receivable losses | 72 | 54 | 220 | 54 | ||||
Other revenues | 0 | 1 | 5 | 1 | ||||
Other expenses | 14 | 12 | 45 | 12 | ||||
Income before provision for income taxes | 58 | 43 | 180 | 43 | ||||
Income before provision for income taxes attributable to non-controlling interests | 31 | 23 | 93 | 23 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 27 | 20 | 87 | 20 | ||||
Assets | 1,751 | 2,239 | [1],[2] | 1,751 | 2,239 | [1],[2] | ||
Operating segments | Real estate loans | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 17 | 94 | 52 | 382 | ||||
Interest expense | 58 | 83 | 177 | 287 | ||||
Provision for finance receivable losses | (4) | 37 | (7) | 119 | ||||
Net interest income after provision for finance receivable losses | (37) | (26) | (118) | (24) | ||||
Other revenues | (2) | 284 | 4 | 196 | ||||
Other expenses | 8 | 36 | 24 | 77 | ||||
Income before provision for income taxes | (47) | 222 | (138) | 95 | ||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | (47) | 222 | (138) | 95 | ||||
Assets | 3,551 | 3,720 | [1],[2] | 3,551 | 3,720 | [1],[2] | ||
Other | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 1 | 4 | 6 | 13 | ||||
Interest expense | 16 | 2 | 48 | 6 | ||||
Provision for finance receivable losses | 0 | 2 | 1 | 7 | ||||
Net interest income after provision for finance receivable losses | (15) | 0 | (43) | 0 | ||||
Other revenues | 4 | 1 | 10 | 5 | ||||
Other expenses | 2 | 3 | 17 | 14 | ||||
Income before provision for income taxes | (13) | (2) | (50) | (9) | ||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | (13) | (2) | (50) | (9) | ||||
Assets | 1,471 | 705 | [1],[2] | 1,471 | 705 | [1],[2] | ||
Eliminations | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 0 | |||||||
Interest expense | (5) | |||||||
Provision for finance receivable losses | 0 | |||||||
Net interest income after provision for finance receivable losses | 5 | |||||||
Other revenues | (5) | |||||||
Other expenses | 0 | |||||||
Income before provision for income taxes | 0 | |||||||
Income before provision for income taxes attributable to non-controlling interests | 0 | |||||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | 0 | |||||||
Assets | 0 | 0 | ||||||
Push-down Accounting Adjustments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Interest income | 3 | 16 | 10 | 84 | ||||
Interest expense | 32 | 36 | 94 | 100 | ||||
Provision for finance receivable losses | 5 | (19) | 14 | (18) | ||||
Net interest income after provision for finance receivable losses | (34) | (1) | (98) | 2 | ||||
Other revenues | (2) | 317 | (8) | 486 | ||||
Other expenses | 1 | 0 | 3 | 2 | ||||
Income before provision for income taxes | (37) | 316 | (109) | 486 | ||||
Income before provision for income taxes attributable to non-controlling interests | 0 | 0 | 0 | 0 | ||||
Income (loss) before provision for (benefit from) income taxes attributable to Springleaf Finance Corporation | (37) | 316 | (109) | 486 | ||||
Assets | $ (19) | $ 16 | [1],[2] | $ (19) | $ 16 | [1],[2] | ||
[1] | As a result of our early adoption of ASU 2015-03, we reclassified $29 million of debt issuance costs from other assets to long-term debt as of September 30, 2014. | |||||||
[2] | See Note 1 for further information on the correction of this prior period disclosure. |
Segment Information Narrative (
Segment Information Narrative (Details) | 9 Months Ended |
Sep. 30, 2015statedivisionsegment | |
Segment Reporting Information [Line Items] | |
Number of Reportable Segments | segment | 3 |
Ownership percentage in joint venture | 47.00% |
Other | |
Segment Reporting Information [Line Items] | |
Number of States with Legacy Operations where Branch Based Personal Lending Ceased | 14 |
Corporate Joint Venture | |
Segment Reporting Information [Line Items] | |
Ownership percentage in joint venture | 47.00% |
Consumer and Insurance Segment | |
Segment Reporting Information [Line Items] | |
Number of Operating Segments | division | 2 |
Consumer and Insurance | |
Segment Reporting Information [Line Items] | |
Number of States in which Entity Operates | 27 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Note receivable from parent | $ 322 | $ 251 |
Restricted cash and cash equivalents | 270 | 218 |
Other assets: | ||
Receivables from parent and affiliates | 7 | 12 |
Fair Value Measurements Using Level 1 | ||
Assets | ||
Cash and cash equivalents | 2,461 | 584 |
Restricted cash and cash equivalents | 270 | 218 |
Fair Value Measurements Using Level 2 | ||
Assets | ||
Cash and cash equivalents | 295 | 165 |
Investment securities | 1,730 | 2,913 |
Note receivable from parent | 322 | 251 |
Other assets: | ||
Receivables from parent and affiliates | 7 | 12 |
Receivables related to sales of real estate loans and related trust assets | 3 | 67 |
Liabilities | ||
Long-term debt | 10,212 | 9,182 |
Payables to parent and affiliates | 19 | 48 |
Fair Value Measurements Using Level 3 | ||
Assets | ||
Investment securities | 12 | 9 |
Net finance receivables, less allowance for finance receivable losses | 6,667 | 6,949 |
Finance receivables held for sale | 802 | 209 |
Other assets: | ||
Commercial mortgage loans | 71 | 78 |
Escrow advance receivable | 10 | 8 |
Total Fair Value | ||
Assets | ||
Cash and cash equivalents | 2,756 | 749 |
Investment securities | 1,742 | 2,922 |
Net finance receivables, less allowance for finance receivable losses | 6,667 | 6,949 |
Finance receivables held for sale | 802 | 209 |
Note receivable from parent | 322 | 251 |
Restricted cash and cash equivalents | 270 | 218 |
Other assets: | ||
Commercial mortgage loans | 71 | 78 |
Escrow advance receivable | 10 | 8 |
Receivables from parent and affiliates | 7 | 12 |
Receivables related to sales of real estate loans and related trust assets | 3 | 67 |
Liabilities | ||
Long-term debt | 10,212 | 9,182 |
Payables to parent and affiliates | 19 | 48 |
Total Carrying Value | ||
Assets | ||
Cash and cash equivalents | 2,756 | 749 |
Investment securities | 1,742 | 2,922 |
Net finance receivables, less allowance for finance receivable losses | 6,040 | 6,278 |
Finance receivables held for sale | 797 | 205 |
Note receivable from parent | 322 | 251 |
Restricted cash and cash equivalents | 270 | 218 |
Other assets: | ||
Commercial mortgage loans | 71 | 85 |
Escrow advance receivable | 10 | 8 |
Receivables from parent and affiliates | 7 | 12 |
Receivables related to sales of real estate loans and related trust assets | 9 | 79 |
Liabilities | ||
Long-term debt | 9,555 | 8,356 |
Payables to parent and affiliates | $ 19 | $ 48 |
Fair Value Measurements (Deta76
Fair Value Measurements (Details 2) | Sep. 30, 2015USD ($)bond | Dec. 31, 2014USD ($)bond | ||
Assets | ||||
Available-for-sale securities | [1] | $ 564,000,000 | $ 600,000,000 | |
Trading securities | 1,177,000,000 | 2,321,000,000 | ||
Total investment securities | 1,742,000,000 | 2,922,000,000 | ||
Transfer from Level 1 Assets to Level 2 | 0 | |||
Transfer from Level 2 Assets to Level 1 | 0 | |||
Transfer from Level 1 Liabilities to Level 2 | 0 | |||
Transfers from Level 2 Liabilities to Level 1 | 0 | |||
U.S. government and government sponsored entities | ||||
Assets | ||||
Available-for-sale securities | 68,000,000 | 64,000,000 | ||
Trading securities | 783,000,000 | 302,000,000 | ||
Obligations of states, municipalities, and political subdivisions | ||||
Assets | ||||
Available-for-sale securities | 84,000,000 | 102,000,000 | ||
Trading securities | 0 | 14,000,000 | ||
Certificates of deposit and commercial paper | ||||
Assets | ||||
Available-for-sale securities | [2] | 1,000,000 | ||
Trading securities | 0 | 238,000,000 | ||
Corporate debt | ||||
Assets | ||||
Available-for-sale securities | 245,000,000 | 267,000,000 | ||
Trading securities | 196,000,000 | 1,056,000,000 | ||
Residential mortgage-backed securities (“RMBS”) | ||||
Assets | ||||
Available-for-sale securities | 79,000,000 | 73,000,000 | ||
Trading securities | 2,000,000 | 35,000,000 | ||
Commercial mortgage-backed securities (“CMBS”) | ||||
Assets | ||||
Available-for-sale securities | 39,000,000 | 24,000,000 | ||
Trading securities | 45,000,000 | 149,000,000 | ||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||
Assets | ||||
Available-for-sale securities | 32,000,000 | 61,000,000 | ||
Trading securities | 151,000,000 | 507,000,000 | ||
Bonds | ||||
Assets | ||||
Available-for-sale securities | 547,000,000 | 592,000,000 | ||
Preferred stock | ||||
Assets | ||||
Available-for-sale securities | 16,000,000 | 7,000,000 | ||
Other long-term investments | ||||
Assets | ||||
Available-for-sale securities | 1,000,000 | 1,000,000 | ||
Total Carried At Fair Value | ||||
Assets | ||||
Cash and cash equivalents | 2,756,000,000 | 749,000,000 | ||
Not carried at fair value | Common Stock | ||||
Assets | ||||
Available-for-sale securities | 1,000,000 | 1,000,000 | ||
Fair Value Measurements Using Level 1 | ||||
Assets | ||||
Cash and cash equivalents | 2,461,000,000 | 584,000,000 | ||
Fair Value Measurements Using Level 2 | ||||
Assets | ||||
Cash and cash equivalents | 295,000,000 | 165,000,000 | ||
Recurring basis | Total Carried At Fair Value | ||||
Assets | ||||
Cash equivalents in mutual funds | 750,000,000 | 236,000,000 | ||
Cash and cash equivalents | 295,000,000 | 165,000,000 | ||
Available-for-sale securities | [3] | 564,000,000 | 600,000,000 | |
Trading securities | 1,177,000,000 | 2,321,000,000 | ||
Total investment securities | 1,741,000,000 | 2,921,000,000 | ||
Restricted cash in mutual funds | 252,000,000 | 207,000,000 | ||
Total | 3,038,000,000 | 3,529,000,000 | ||
Recurring basis | Total Carried At Fair Value | U.S. government and government sponsored entities | ||||
Assets | ||||
Available-for-sale securities | 68,000,000 | 64,000,000 | ||
Trading securities | 783,000,000 | 302,000,000 | ||
Recurring basis | Total Carried At Fair Value | Obligations of states, municipalities, and political subdivisions | ||||
Assets | ||||
Available-for-sale securities | 84,000,000 | 102,000,000 | ||
Trading securities | 14,000,000 | |||
Recurring basis | Total Carried At Fair Value | Non-U.S. government and government sponsored entities | ||||
Assets | ||||
Trading securities | 20,000,000 | |||
Recurring basis | Total Carried At Fair Value | Corporate debt | ||||
Assets | ||||
Available-for-sale securities | 245,000,000 | 267,000,000 | ||
Trading securities | 196,000,000 | 1,056,000,000 | ||
Recurring basis | Total Carried At Fair Value | Residential mortgage-backed securities (“RMBS”) | ||||
Assets | ||||
Available-for-sale securities | 79,000,000 | 73,000,000 | ||
Trading securities | 2,000,000 | 35,000,000 | ||
Recurring basis | Total Carried At Fair Value | Commercial mortgage-backed securities (“CMBS”) | ||||
Assets | ||||
Available-for-sale securities | 39,000,000 | 24,000,000 | ||
Trading securities | 45,000,000 | 149,000,000 | ||
Recurring basis | Total Carried At Fair Value | Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||
Assets | ||||
Available-for-sale securities | 32,000,000 | 61,000,000 | ||
Trading securities | 151,000,000 | 507,000,000 | ||
Recurring basis | Total Carried At Fair Value | Bonds | ||||
Assets | ||||
Available-for-sale securities | 547,000,000 | 592,000,000 | ||
Recurring basis | Total Carried At Fair Value | Preferred stock | ||||
Assets | ||||
Available-for-sale securities | 16,000,000 | 7,000,000 | ||
Recurring basis | Total Carried At Fair Value | Other long-term investments | ||||
Assets | ||||
Available-for-sale securities | 1,000,000 | 1,000,000 | [4] | |
Recurring basis | Fair Value Measurements Using Level 1 | ||||
Assets | ||||
Cash equivalents in mutual funds | 750,000,000 | 236,000,000 | ||
Total investment securities | 0 | |||
Restricted cash in mutual funds | 252,000,000 | 207,000,000 | ||
Total | 1,002,000,000 | 443,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | ||||
Assets | ||||
Cash equivalents in mutual funds | 0 | |||
Cash and cash equivalents | 295,000,000 | 165,000,000 | ||
Available-for-sale securities | [3] | 553,000,000 | 592,000,000 | |
Trading securities | 1,177,000,000 | 2,321,000,000 | ||
Total investment securities | 1,730,000,000 | 2,913,000,000 | ||
Restricted cash in mutual funds | 0 | |||
Total | 2,025,000,000 | 3,078,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | U.S. government and government sponsored entities | ||||
Assets | ||||
Available-for-sale securities | 68,000,000 | 64,000,000 | ||
Trading securities | 783,000,000 | 302,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Obligations of states, municipalities, and political subdivisions | ||||
Assets | ||||
Available-for-sale securities | 84,000,000 | 102,000,000 | ||
Trading securities | 14,000,000 | |||
Recurring basis | Fair Value Measurements Using Level 2 | Non-U.S. government and government sponsored entities | ||||
Assets | ||||
Trading securities | 20,000,000 | |||
Recurring basis | Fair Value Measurements Using Level 2 | Corporate debt | ||||
Assets | ||||
Available-for-sale securities | 245,000,000 | 263,000,000 | ||
Trading securities | 196,000,000 | 1,056,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Residential mortgage-backed securities (“RMBS”) | ||||
Assets | ||||
Available-for-sale securities | 79,000,000 | 73,000,000 | ||
Trading securities | 2,000,000 | 35,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Commercial mortgage-backed securities (“CMBS”) | ||||
Assets | ||||
Available-for-sale securities | 39,000,000 | 21,000,000 | ||
Trading securities | 45,000,000 | 149,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||
Assets | ||||
Available-for-sale securities | 32,000,000 | 61,000,000 | ||
Trading securities | 151,000,000 | 507,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Bonds | ||||
Assets | ||||
Available-for-sale securities | 547,000,000 | 585,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 2 | Preferred stock | ||||
Assets | ||||
Available-for-sale securities | 6,000,000 | 7,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 3 | ||||
Assets | ||||
Cash equivalents in mutual funds | 0 | |||
Available-for-sale securities | [3] | 11,000,000 | 8,000,000 | |
Trading securities | 0 | 0 | ||
Total investment securities | 11,000,000 | 8,000,000 | ||
Restricted cash in mutual funds | 0 | |||
Total | 11,000,000 | 8,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 3 | Corporate debt | ||||
Assets | ||||
Available-for-sale securities | 0 | 4,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 3 | Residential mortgage-backed securities (“RMBS”) | ||||
Assets | ||||
Available-for-sale securities | 0 | 0 | ||
Trading securities | 0 | |||
Recurring basis | Fair Value Measurements Using Level 3 | Commercial mortgage-backed securities (“CMBS”) | ||||
Assets | ||||
Available-for-sale securities | 0 | 3,000,000 | ||
Trading securities | 0 | |||
Recurring basis | Fair Value Measurements Using Level 3 | Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | ||||
Assets | ||||
Trading securities | 0 | |||
Recurring basis | Fair Value Measurements Using Level 3 | Bonds | ||||
Assets | ||||
Available-for-sale securities | 0 | 7,000,000 | ||
Recurring basis | Fair Value Measurements Using Level 3 | Preferred stock | ||||
Assets | ||||
Available-for-sale securities | 10,000,000 | |||
Recurring basis | Fair Value Measurements Using Level 3 | Other long-term investments | ||||
Assets | ||||
Available-for-sale securities | [4] | $ 1,000,000 | 1,000,000 | |
Cash Equivalents [Member] | Recurring basis | Total Carried At Fair Value | ||||
Assets | ||||
Trading securities | 238,000,000 | |||
Cash Equivalents [Member] | Recurring basis | Total Carried At Fair Value | Certificates of deposit and commercial paper | ||||
Assets | ||||
Available-for-sale securities | 1,000,000 | |||
Cash Equivalents [Member] | Recurring basis | Fair Value Measurements Using Level 2 | ||||
Assets | ||||
Trading securities | 238,000,000 | |||
Cash Equivalents [Member] | Recurring basis | Fair Value Measurements Using Level 2 | Certificates of deposit and commercial paper | ||||
Assets | ||||
Available-for-sale securities | $ 1,000,000 | |||
Discounted Cash Flow Valuation Technique [Member] | Residential mortgage-backed securities (“RMBS”) | Recurring basis | Fair Value Measurements Using Level 3 | ||||
Assets | ||||
Number of bonds | bond | 1 | 1 | ||
Debt Instrument, Fair Value Disclosure | $ 1,000,000 | $ 1,000,000 | ||
Discounted Cash Flow Valuation Technique [Member] | Mortgage Loan Securitizations | Recurring basis | Fair Value Measurements Using Level 3 | ||||
Assets | ||||
Number of bonds | bond | 1 | |||
Discounted Cash Flow Valuation Technique [Member] | Corporate debt | Recurring basis | Fair Value Measurements Using Level 3 | ||||
Assets | ||||
Number of bonds | bond | 1 | |||
[1] | Excludes an immaterial interest in a limited partnership that we account for using the equity method and Federal Home Loan Bank common stock of $1 million at September 30, 2015 and December 31, 2014, which is classified as a restricted investment and carried at cost. | |||
[2] | Includes certificates of deposit pledged as collateral, totaling $2 million at December 31, 2014, primarily to support bank lines of credit. | |||
[3] | Common stocks not carried at fair value totaled $1 million at September 30, 2015 and December 31, 2014 and, therefore, have been excluded from the table above. | |||
[4] | Other long-term investments excludes an immaterial interest in a limited partnership that we account for using the equity method. |
Fair Value Measurements (Deta77
Fair Value Measurements (Details 3) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |||||
Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | $ 1 | $ 6 | $ 15 | |||||
Net gains (losses) included in: Other revenues | 0 | 0 | 0 | |||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | 0 | |||||
Purchases, sales, issues, settlements | 10 | 0 | (8) | [1] | ||||
Transfers into Level 3 | 0 | 0 | ||||||
Transfers out of Level 3 | 0 | 0 | (1) | [2] | ||||
Balance at end of period | 11 | 6 | $ 11 | 6 | ||||
Trading securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 7 | |||||||
Net gains (losses) included in: Other revenues | 0 | |||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | |||||||
Purchases, sales, issues, settlements | [1] | 0 | ||||||
Transfers into Level 3 | [3] | 1 | ||||||
Transfers out of Level 3 | [2] | (2) | ||||||
Balance at end of period | 6 | 6 | ||||||
Investment securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 12 | 8 | 22 | |||||
Net gains (losses) included in: Other revenues | 0 | 0 | 0 | |||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | 0 | |||||
Purchases, sales, issues, settlements | 0 | 6 | [4] | (8) | [1] | |||
Transfers into Level 3 | 0 | 0 | ||||||
Transfers out of Level 3 | 0 | (3) | [5] | (3) | [2] | |||
Balance at end of period | 11 | 12 | 11 | 12 | ||||
Purchases | 10 | |||||||
Settlements | (4) | |||||||
Bonds | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 7 | 14 | ||||||
Net gains (losses) included in: Other revenues | 0 | 0 | ||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | ||||||
Purchases, sales, issues, settlements | (4) | [4] | (8) | [1] | ||||
Transfers into Level 3 | 0 | 0 | ||||||
Transfers out of Level 3 | (3) | [5] | (1) | [2] | ||||
Balance at end of period | 0 | 5 | 0 | 5 | ||||
Corporate debt | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 5 | 4 | 13 | |||||
Net gains (losses) included in: Other revenues | 0 | 0 | 0 | |||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | 0 | |||||
Purchases, sales, issues, settlements | 0 | (4) | [4] | (8) | [1] | |||
Transfers into Level 3 | 0 | 0 | 0 | |||||
Transfers out of Level 3 | 0 | 0 | 0 | [2] | ||||
Balance at end of period | 0 | 5 | 0 | 5 | ||||
Purchases | 0 | |||||||
Settlements | (4) | |||||||
Residential mortgage-backed securities (“RMBS”) | Trading securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 0 | |||||||
Net gains (losses) included in: Other revenues | 0 | |||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | |||||||
Purchases, sales, issues, settlements | [1] | 0 | ||||||
Transfers into Level 3 | [3] | 1 | ||||||
Transfers out of Level 3 | [2] | (1) | ||||||
Balance at end of period | 0 | 0 | ||||||
Commercial mortgage-backed securities (“CMBS”) | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 3 | |||||||
Net gains (losses) included in: Other revenues | 0 | |||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | |||||||
Purchases, sales, issues, settlements | 0 | |||||||
Transfers into Level 3 | 0 | |||||||
Transfers out of Level 3 | [5] | (3) | ||||||
Balance at end of period | 0 | 0 | ||||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 1 | |||||||
Net gains (losses) included in: Other revenues | 0 | |||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | |||||||
Purchases, sales, issues, settlements | [1] | 0 | ||||||
Transfers into Level 3 | 0 | |||||||
Transfers out of Level 3 | [2] | (1) | ||||||
Balance at end of period | 0 | 0 | ||||||
Collateralized debt obligations (“CDO”)/Asset-backed securities (“ABS”) | Trading securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 6 | 7 | ||||||
Net gains (losses) included in: Other revenues | 0 | 0 | ||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | ||||||
Purchases, sales, issues, settlements | 0 | 0 | [1] | |||||
Transfers into Level 3 | 0 | 0 | [3] | |||||
Transfers out of Level 3 | 0 | (1) | [2] | |||||
Balance at end of period | 6 | 6 | ||||||
Preferred stock | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 0 | 0 | ||||||
Net gains (losses) included in: Other revenues | 0 | 0 | ||||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | ||||||
Purchases, sales, issues, settlements | 10 | [6] | 10 | [4] | ||||
Transfers into Level 3 | 0 | 0 | ||||||
Transfers out of Level 3 | 0 | 0 | ||||||
Balance at end of period | 10 | 10 | ||||||
Purchases | 10 | |||||||
Settlements | 0 | |||||||
Other long-term investments | Available-for-sale securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Balance at beginning of period | 1 | 1 | 1 | 1 | ||||
Net gains (losses) included in: Other revenues | 0 | 0 | 0 | 0 | ||||
Net gains (losses) included in: Other comprehensive income (loss) | 0 | 0 | 0 | 0 | ||||
Purchases, sales, issues, settlements | 0 | 0 | 0 | [4] | 0 | [1] | ||
Transfers into Level 3 | 0 | 0 | 0 | 0 | ||||
Transfers out of Level 3 | 0 | 0 | 0 | 0 | [2] | |||
Balance at end of period | $ 1 | $ 1 | $ 1 | 1 | ||||
Residential mortgage-backed securities (“RMBS”) | Investment securities | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||||
Transfers into Level 3 | [3] | $ 1 | ||||||
[1] | “Purchases, sales, issues, and settlements” column consisted only of settlements. | |||||||
[2] | During the nine months ended September 30, 2014, we transferred RMBS and CDO/ABS securities totaling $3 million out of Level 3 primarily related to the re-evaluated observability of pricing inputs. | |||||||
[3] | During the nine months ended September 30, 2014, we transferred $1 million of RMBS securities into Level 3 primarily related to the re-evaluated observability of pricing inputs. | |||||||
[4] | The detail of purchases and settlements is presented in the table below:(dollars in millions) Purchases Settlements Total Nine Months Ended September 30, 2015 Investment securities: Available-for-sale securities: Bonds: Corporate debt $— $(4) $(4)Preferred stock 10 — 10Total $10 $(4) $6 | |||||||
[5] | During the nine months ended September 30, 2015, we transferred CMBS securities totaling $3 million out of Level 3 primarily related to the greater observability of pricing inputs. | |||||||
[6] | Net gains (losses) included in: Purchases, sales, issues, settlements * Transfers intoLevel 3 Transfersout ofLevel 3 Balanceat end ofperiod Balance at beginningof period Other revenues Other comprehensiveincome (loss) (dollars in millions) Three Months Ended September 30, 2015 Investment securities: Available-for-sale securities: Preferred stock $— $— $— $10 $— $— $10Other long-term investments 1 — — — — — 1Total $1 $— $— $10 $— $— $11 *“Purchases, sales, issues, and settlements” column consisted only of purchases. |
Fair Value Measurements (Deta78
Fair Value Measurements (Details 4) - Level 3 - Recurring - Discounted cash flows - bond | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | |||
Corporate debt | ||||
Unobservable Input | ||||
Yield (as a percent) | [1] | 0.00% | 1.05% | |
Number of bonds | 1 | |||
Residential mortgage-backed securities (“RMBS”) | ||||
Unobservable Input | ||||
Spread (as a percent) | [2] | 7.43% | 7.36% | [3] |
Number of bonds | 1 | 1 | ||
Commercial mortgage-backed securities (“CMBS”) | ||||
Unobservable Input | ||||
Spread (as a percent) | [2],[3] | 1.39% | ||
Mortgage Loan Securitizations | ||||
Unobservable Input | ||||
Number of bonds | 1 | |||
[1] | Not applicable. | |||
[2] | At September 30, 2015 and December 31, 2014, RMBS consisted of one bond, which was less than $1 million. At December 31, 2014, corporate debt and CMBS also consisted of one bond. | |||
[3] | During the first quarter of 2015, we identified that we incorrectly disclosed the weighted average ranges of our RMBS bond and CMBS bond as of December 31, 2014. The weighted average ranges of these bonds at December 31, 2014 have been corrected in the table above. |
Fair Value Measurements (Deta79
Fair Value Measurements (Details 5) - Non-recurring basis - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Assets measured at fair value on a non-recurring basis | ||||||
Assets at fair value | [1] | $ 20 | $ 20 | $ 30 | ||
Total impairment charges | 1 | $ 2 | 1 | $ 11 | ||
Real estate owned | ||||||
Assets measured at fair value on a non-recurring basis | ||||||
Impairment of Real Estate | 1 | 3 | 3 | 13 | ||
Assets at fair value | [1] | 12 | 12 | 19 | ||
Commercial mortgage loans | ||||||
Assets measured at fair value on a non-recurring basis | ||||||
Impairment of Real Estate | 0 | $ (1) | (2) | $ (2) | ||
Assets at fair value | [1] | 8 | 8 | 11 | ||
Level 3 | ||||||
Assets measured at fair value on a non-recurring basis | ||||||
Assets at fair value | [1] | 20 | 20 | 30 | ||
Level 3 | Real estate owned | ||||||
Assets measured at fair value on a non-recurring basis | ||||||
Assets at fair value | [1] | 12 | 12 | 19 | ||
Level 3 | Commercial mortgage loans | ||||||
Assets measured at fair value on a non-recurring basis | ||||||
Assets at fair value | [1] | $ 8 | $ 8 | $ 11 | ||
[1] | The fair value information presented in the table above is as of the date the fair value adjustment was recorded. |