Discover 2015 Annual Report Download - page 126

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The following table provides information on loans that entered a loan modification program during the period
(dollars in millions):
For the Years Ended December 31,
2015 2014 2013
Number of
Accounts Balances Number of Accounts Balances Number of Accounts Balances
Accounts that entered a loan modification program during
the period
Credit card loans
Internal programs ....................................................... 52,850 $ 339 48,041 $ 316 40,653 $ 256
External programs ...................................................... 30,629 $ 154 32,443 $ 169 35,020 $ 189
Personal loans ................................................................ 4,243 $ 50 3,528 $ 42 2,178 $ 27
Private student loans ....................................................... 1,362 $ 20 1,453 $ 21 877 $ 17
The following table presents the carrying value of loans that experienced a payment default during the period
that had been modified in a troubled debt restructuring during the 15 months preceding the end of each period (dollars
in millions):
For the Years Ended December 31,
2015 2014 2013
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Number
of
Accounts
Aggregated
Outstanding
Balances
Upon
Default
Troubled debt restructurings that subsequently defaulted
Credit card loans
Internal programs(1)(2) .................................................. 11,273 $ 69 10,195 $ 62 9,186 $ 57
External programs(1)(2) ................................................. 7,026 $ 27 7,363 $ 30 8,481 $ 36
Personal loans(2) ............................................................. 644 $ 7 433 $ 5 284 $ 3
Private student loans(3) ..................................................... 1,103 $ 16 1,155 $ 18 628 $ 12
(1) The outstanding balance upon default is the loan balance at the end of the month prior to default. Terms revert back to the pre-modification terms for customers who
default from a temporary program and charging privileges remain revoked in most cases.
(2) A customer defaults from a modification program after two consecutive missed payments.
(3) Student loan defaults have been defined as loans that are 60 or more days delinquent.
Of the account balances that defaulted as shown above for the years ended December 31, 2015, 2014 and
2013, approximately 40%, 35% and 40%, respectively, of the total balances were charged off at the end of the month
in which they defaulted. For accounts that have defaulted from a loan modification program and have not been
subsequently charged off, the balances are included in the allowance for loan loss analysis discussed above under "—
Allowance for Loan Losses."
Purchased Credit-Impaired Loans
Purchased loans with evidence of credit deterioration since origination for which it is probable that not all
contractually required payments will be collected are considered impaired at acquisition and are reported as PCI loans.
The private student loans acquired in the SLC transaction as well as the additional acquired private student loan
portfolio comprise the Company’s only PCI loans at December 31, 2015 and 2014. Total PCI student loans had an
outstanding balance of $3.3 billion and $3.9 billion, including accrued interest, and a related carrying amount of $3.1
billion and $3.7 billion, as of December 31, 2015 and 2014, respectively.