Capital One 2015 Annual Report Download - page 179

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
160 Capital One Financial Corporation (COF)
Components of Allowance for Loan and Lease Losses by Impairment Methodology
The table below presents the components of our allowance for loan and lease losses, by portfolio segment and impairment
methodology, and the recorded investment of the related loans as of December 31, 2015 and 2014.
Table 6.2: Components of Allowance for Loan and Lease Losses by Impairment Methodology
December 31, 2015
(Dollars in millions)
Credit
Card
Consumer
Banking
Commercial
Banking Other Total
Allowance for loan and lease losses:
Collectively evaluated(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,445 $ 778 $ 517 $ 4 $ 4,744
Asset-specific(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 54 86 0 349
Acquired Loans(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 36 1 0 37
Total allowance for loan and lease losses(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,654 $ 868 $ 604 $ 4 $ 5,130
Loans held for investment:
Collectively evaluated(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,459 $ 51,113 $ 61,424 $ 88 $ 208,084
Asset-specific(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 666 699 884 0 2,249
Acquired Loans(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 18,560 958 0 19,518
Total loans held for investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 96,125 $ 70,372 $ 63,266 $ 88 $ 229,851
Allowance as a percentage of period-end loans held for investment . . . . . . . . . . . . . . . . . . . . 3.80% 1.23% 0.95% 4.94% 2.23%
December 31, 2014
(Dollars in millions)
Credit
Card
Consumer
Banking
Commercial
Banking Other Total
Allowance for loan and lease losses:
Collectively evaluated(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,985 $ 710 $ 356 $ 5 $ 4,056
Asset-specific(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 42 39 0 300
Acquired Loans(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 27 0 0 27
Total allowance for loan and lease losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,204 $ 779 $ 395 $ 5 $ 4,383
Loans held for investment:
Collectively evaluated(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,161 $ 47,507 $ 50,328 $ 111 $ 183,107
Asset-specific(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 692 647 370 0 1,709
Acquired Loans(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 23,285 192 0 23,500
Total loans held for investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,876 $ 71,439 $ 50,890 $ 111 $ 208,316
Allowance as a percentage of period-end loans held for investment . . . . . . . . . . . . . . . . . . . . 3.73% 1.09% 0.78% 4.68% 2.10%
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(1) The component of the allowance for loan and lease losses for credit card and other consumer loans that we collectively evaluate for impairment is based on
a statistical calculation supplemented by management judgment and interpretation. The component of the allowance for loan and lease losses for commercial
loans, which we collectively evaluate for impairment, is based on historical loss experience for loans with similar characteristics and consideration of credit
quality supplemented by management judgment and interpretation.
(2) The asset-specific component of the allowance for loan and lease losses for smaller-balance impaired loans is calculated on a pool basis using historical loss
experience for the respective class of assets. The asset-specific component of the allowance for loan and lease losses for larger-balance commercial loans is
individually calculated for each loan.
(3) Includes an allowance build of $39 million related to loans purchased in the GE Healthcare acquisition.
(4) The Acquired Loans component of the allowance for loan and lease losses is accounted for based on expected cash flows. See “Note 1—Summary of
Significant Accounting Policies” for details on these loans.