Loans and Allowance for Loan Losses

The following table provides the outstanding balances of loans held for investment at March 31, 2019 and December 31, 2018.



(Dollars in millions)	March 31, 2019			December 31, 2018
Loans held for investment:
Commercial and industrial	$	25,303		$	24,919
Commercial mortgage	15,299			15,354
Construction	1,691			1,613
Lease financing	1,322			1,249
Total commercial portfolio	43,615			43,135
Residential mortgage	38,439			38,439
Home equity and other consumer loans	5,533			4,933
Total consumer portfolio	43,972			43,372
Total loans held for investment⁽¹⁾	87,587			86,507
Allowance for loan losses	(516		)	(474		)
Loans held for investment, net	$	87,071		$	86,033


(1)	Includes $343 million and $340 million at March 31, 2019 and December 31, 2018, respectively, for net unamortized (discounts) and premiums and deferred (fees) and costs.

Allowance for Loan Losses

The following tables provide a reconciliation of changes in the allowance for loan losses by portfolio segment.




	For the Three Months Ended March 31, 2019
(Dollars in millions)	Commercial			Consumer			Unallocated		Total
Allowance for loan losses, beginning of period	$	359		$	110		$	5	$	474
(Reversal of) provision for loan losses	32			27			—		59
Loans charged-off	(11		)	(17		)	—		(28		)
Recoveries of loans previously charged-off	9			2			—		11
Allowance for loan losses, end of period	$	389		$	122		$	5	$	516




	For the Three Months Ended March 31, 2018
(Dollars in millions)	Commercial			Consumer			Unallocated			Total
Allowance for loan losses, beginning of period	$	360		$	86		$	30		$	476
(Reversal of) provision for loan losses	14			6			(25		)	(5		)
Loans charged-off	(6		)	(10		)	—			(16		)
Recoveries of loans previously charged-off	3			2			—			5
Allowance for loan losses, end of period	$	371		$	84		$	5		$	460

The following tables show the allowance for loan losses and related loan balances by portfolio segment as of March 31, 2019 and December 31, 2018.



	March 31, 2019
(Dollars in millions)	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	109	$	13	$	—	$	122
Collectively evaluated for impairment	280		109		5		394
Total allowance for loan losses	$	389	$	122	$	5	$	516

Loans held for investment:
Individually evaluated for impairment	$	654	$	274	$	—	$	928
Collectively evaluated for impairment	42,961		43,698		—		86,659
Total loans held for investment	$	43,615	$	43,972	$	—	$	87,587



	December 31, 2018
(Dollars in millions)	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	62	$	13	$	—	$	75
Collectively evaluated for impairment	297		97		5		399
Total allowance for loan losses	$	359	$	110	$	5	$	474

Loans held for investment:
Individually evaluated for impairment	$	450	$	280	$	—	$	730
Collectively evaluated for impairment	42,685		43,092		—		85,777
Total loans held for investment	$	43,135	$	43,372	$	—	$	86,507

Nonaccrual and Past Due Loans

The following table presents nonaccrual loans as of March 31, 2019 and December 31, 2018.



(Dollars in millions)	March 31, 2019		December 31, 2018
Commercial and industrial	$	478	$	269
Commercial mortgage	12		12
Total commercial portfolio	490		281
Residential mortgage	124		121
Home equity and other consumer loans	20		19
Total consumer portfolio	144		140
Total nonaccrual loans	$	634	$	421
Troubled debt restructured loans that continue to accrue interest	$	296	$	299
Troubled debt restructured nonaccrual loans (included in total nonaccrual loans above)	$	163	$	136

The following tables show the aging of the balance of loans held for investment by class as of March 31, 2019 and December 31, 2018.



	March 31, 2019
	Aging Analysis of Loans
(Dollars in millions)	Current		30 to 89 Days Past Due		90 Days or More Past Due		Total Past Due		Total
Commercial and industrial	$	26,381	$	220	$	24	$	244	$	26,625
Commercial mortgage	15,273		22		4		26		15,299
Construction	1,685		5		1		6		1,691
Total commercial portfolio	43,339		247		29		276		43,615
Residential mortgage	38,256		141		42		183		38,439
Home equity and other consumer loans	5,491		29		13		42		5,533
Total consumer portfolio	43,747		170		55		225		43,972
Total loans held for investment	$	87,086	$	417	$	84	$	501	$	87,587



	December 31, 2018
	Aging Analysis of Loans
(Dollars in millions)	Current		30 to 89 Days Past Due		90 Days or More Past Due		Total Past Due		Total
Commercial and industrial	$	26,114	$	18	$	36	$	54	$	26,168
Commercial mortgage	15,333		17		4		21		15,354
Construction	1,593		20		—		20		1,613
Total commercial portfolio	43,040		55		40		95		43,135
Residential mortgage	38,218		175		46		221		38,439
Home equity and other consumer loans	4,893		28		12		40		4,933
Total consumer portfolio	43,111		203		58		261		43,372
Total loans held for investment	$	86,151	$	258	$	98	$	356	$	86,507

Loans 90 days or more past due and still accruing interest totaled $13 million at March 31, 2019 and $23 million at December 31, 2018.

Credit Quality Indicators

Management analyzes the Company's loan portfolios by applying specific monitoring policies and procedures that vary according to the relative risk profile and other characteristics within the various loan portfolios. Loans within the commercial portfolio segment are classified as either pass or criticized. Criticized credits are those that have regulatory risk ratings of special mention, substandard or doubtful; classified credits are those that have regulatory risk ratings of substandard or doubtful. Special mention credits are potentially weak, as the borrower has begun to exhibit deteriorating trends, which, if not corrected, may jeopardize repayment of the loan and result in further downgrade. Substandard credits have well-defined weaknesses, which, if not corrected, could jeopardize the full satisfaction of the debt. A credit classified as doubtful has critical weaknesses that make full collection improbable on the basis of currently existing facts and conditions.

The following tables summarize the loans in the commercial portfolio segment monitored for credit quality based on regulatory risk ratings.



	March 31, 2019
			Criticized
(Dollars in millions)	Pass		Special Mention		Classified		Total
Commercial and industrial	$	25,339	$	569	$	717	$	26,625
Commercial mortgage	15,018		121		160		15,299
Construction	1,518		111		62		1,691
Total commercial portfolio	$	41,875	$	801	$	939	$	43,615



	December 31, 2018
			Criticized
(Dollars in millions)	Pass		Special Mention		Classified		Total
Commercial and industrial	$	25,191	$	355	$	622	$	26,168
Commercial mortgage	15,138		105		111		15,354
Construction	1,542		8		63		1,613
Total commercial portfolio	$	41,871	$	468	$	796	$	43,135

The Company monitors the credit quality of its consumer portfolio segment based primarily on payment status. The following tables summarize the loans in the consumer portfolio segment, which exclude $5 million and $6 million of loans covered by FDIC loss share agreements, at March 31, 2019 and December 31, 2018, respectively.



	March 31, 2019
(Dollars in millions)	Accrual		Nonaccrual		Total
Residential mortgage	$	38,312	$	124	$	38,436
Home equity and other consumer loans	5,511		20		5,531
Total consumer portfolio	$	43,823	$	144	$	43,967



	December 31, 2018
(Dollars in millions)	Accrual		Nonaccrual		Total
Residential mortgage	$	38,314	$	121	$	38,435
Home equity and other consumer loans	4,912		19		4,931
Total consumer portfolio	$	43,226	$	140	$	43,366

The Company also monitors the credit quality for substantially all of its consumer portfolio segment using credit scores provided by FICO and refreshed LTV ratios. FICO credit scores are refreshed at least quarterly to monitor the quality of the portfolio. Refreshed LTV measures the principal balance of the loan as a percentage of the estimated current value of the property securing the loan. Home equity loans are evaluated using combined LTV, which measures the principal balance of the combined loans that have liens against the property (including unused credit lines for home equity products) as a percentage of the estimated current value of the property securing the loans. The LTV ratios are refreshed on a quarterly basis, using the most recent home pricing index data available for the property location.

The following tables summarize the loans in the consumer portfolio segment based on refreshed FICO scores and refreshed LTV ratios at March 31, 2019 and December 31, 2018. These tables exclude loans covered by FDIC loss share agreements, as discussed above. The amounts presented reflect unpaid principal balances less partial charge-offs.



	March 31, 2019
	FICO scores
(Dollars in millions)	720 and Above			Below 720			No FICO Available⁽¹⁾			Total
Residential mortgage	$	31,693		$	5,950		$	403		$	38,046
Home equity and other consumer loans	3,711			1,712			53			5,476
Total consumer portfolio	$	35,404		$	7,662		$	456		$	43,522
Percentage of total	81		%	18		%	1		%	100		%


(1)	Represents loans for which management was not able to obtain an updated FICO score (e.g., due to recent profile changes).



	December 31, 2018
	FICO scores
(Dollars in millions)	720 and Above			Below 720			No FICO Available⁽¹⁾			Total
Residential mortgage	$	31,589		$	6,022		$	434		$	38,045
Home equity and other consumer loans	3,349			1,448			52			4,849
Total consumer portfolio	$	34,938		$	7,470		$	486		$	42,894
Percentage of total	82		%	17		%	1		%	100		%


(1)	Represents loans for which management was not able to obtain an updated FICO score (e.g., due to recent profile changes).



	March 31, 2019
	LTV ratios
(Dollars in millions)	Less than or Equal to 80 Percent			Greater than 80 and Less than 100 Percent			Greater than or Equal to 100 Percent			No LTV Available⁽¹⁾			Total
Residential mortgage	$	35,859		$	2,106		$	8		$	73		$	38,046
Home equity loans	1,914			239			13			24			2,190
Total consumer portfolio	$	37,773		$	2,345		$	21		$	97		$	40,236
Percentage of total	94		%	6		%	—		%	—		%	100		%


(1)	Represents loans for which management was not able to obtain refreshed property values.



	December 31, 2018
	LTV ratios
(Dollars in millions)	Less than or Equal to 80 Percent			Greater than 80 and Less than 100 Percent			Greater than or Equal to 100 Percent			No LTV Available⁽¹⁾			Total
Residential mortgage	$	36,604		$	1,361		$	4		$	75		$	38,044
Home equity loans	1,966			221			12			24			2,223
Total consumer portfolio	$	38,570		$	1,582		$	16		$	99		$	40,267
Percentage of total	96		%	4		%	—		%	—		%	100		%


(1)	Represents loans for which management was not able to obtain refreshed property values.

Troubled Debt Restructurings

The following table provides a summary of the Company’s recorded investment in TDRs as of March 31, 2019 and December 31, 2018. The summary includes those TDRs that are on nonaccrual status and those that continue to accrue interest. The Company had $45 million and $49 million in commitments to lend additional funds to borrowers with loan modifications classified as TDRs as of March 31, 2019 and December 31, 2018, respectively.



(Dollars in millions)	March 31, 2019		December 31, 2018
Commercial and industrial	$	137	$	109
Commercial mortgage	47		46
Construction	62		63
Total commercial portfolio	246		218
Residential mortgage	192		196
Home equity and other consumer loans	21		21
Total consumer portfolio	213		217
Total restructured loans	$	459	$	435

For the first quarter of 2019, TDR modifications in the commercial portfolio segment were substantially composed of interest rate changes, maturity extensions, forbearance, conversions from revolving lines of credit to term loans, or some combination thereof. In the consumer portfolio segment, modifications were substantially composed of maturity extensions. There were no charge-offs related to TDR modifications for the three months ended March 31, 2019 and March 31, 2018. For the commercial and consumer portfolio segments, the allowance for loan losses for TDRs was measured on an individual loan basis or in pools with similar risk characteristics.

The following tables provide the pre- and post-modification outstanding recorded investment amounts of TDRs as of the date of the restructuring that occurred during the three months ended March 31, 2019 and 2018.



	For the Three Months Ended March 31, 2019
(Dollars in millions)	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾
Commercial and industrial	$	41	$	41
Commercial mortgage	2		2
Total commercial portfolio	43		43
Residential mortgage	4		4
Home equity and other consumer loans	1		1
Total consumer portfolio	5		5
Total	$	48	$	48


(1)	Represents the recorded investment in the loan immediately prior to the restructuring event.


(2)	Represents the recorded investment in the loan immediately following the restructuring event. It includes the effect of paydowns that were required as part of the restructuring terms.




	For the Three Months Ended March 31, 2018
(Dollars in millions)	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾
Commercial and industrial	$	14	$	14
Total commercial portfolio	14		14
Residential mortgage	1		1
Total consumer portfolio	1		1
Total	$	15	$	15


(1)	Represents the recorded investment in the loan immediately prior to the restructuring event.


(2)	Represents the recorded investment in the loan immediately following the restructuring event. It includes the effect of paydowns that were required as part of the restructuring terms.

The following tables provide the recorded investment amounts of TDRs at the date of default, for which there was a payment default during the three months ended March 31, 2019, and where the default occurred within the first twelve months after modification into a TDR. A payment default is defined as the loan being 60 days or more past due. There were no such defaults during the three months ended March 31, 2018.



(Dollars in millions)	For the Three Months Ended March 31, 2019
Commercial and industrial	$	—
Commercial mortgage	1
Total commercial portfolio	1
Residential mortgage	$	—
Home equity and other consumer loans	—
Total consumer portfolio	—
Total	$	1

For loans in the consumer portfolio in which impairment is measured using the present value of expected future cash flows discounted at the loan’s effective interest rate, historical payment defaults and the propensity to redefault are some of the factors considered when determining the allowance for loan losses.

Loan Impairment

Loans that are individually evaluated for impairment include larger nonaccruing loans within the commercial and industrial, construction, and commercial mortgage loan portfolios and loans modified in a TDR. The Company records an impairment allowance when the value of an impaired loan is less than the recorded investment in the loan.

The following tables show information about impaired loans by class as of March 31, 2019 and December 31, 2018.



	March 31, 2019
	Recorded Investment								Unpaid Principal Balance
(Dollars in millions)	With an Allowance		Without an Allowance		Total		Allowance for Impaired Loans		With an Allowance		Without an Allowance
Commercial and industrial	$	511	$	17	$	528	$	108	$	578	$	50
Commercial mortgage	22		42		64		1		22		42
Construction	—		62		62		—		—		62
Total commercial portfolio	533		121		654		109		600		154
Residential mortgage	170		71		241		12		179		85
Home equity and other consumer loans	22		11		33		1		22		20
Total consumer portfolio	192		82		274		13		201		105
Total	$	725	$	203	$	928	$	122	$	801	$	259



	December 31, 2018
	Recorded Investment								Unpaid Principal Balance
(Dollars in millions)	With an Allowance		Without an Allowance		Total		Allowance for Impaired Loans		With an Allowance		Without an Allowance
Commercial and industrial	$	299	$	22	$	321	$	61	$	372	$	39
Commercial mortgage	25		41		66		1		25		41
Construction	—		63		63		—		—		63
Total commercial portfolio	324		126		450		62		397		143
Residential mortgage	175		71		246		12		184		85
Home equity and other consumer loans	22		12		34		1		22		21
Total consumer portfolio	197		83		280		13		206		106
Total	$	521	$	209	$	730	$	75	$	603	$	249

The following table presents the average recorded investment in impaired loans and the amount of interest income recognized for impaired loans during the three months ended March 31, 2019 and 2018 for the commercial and consumer loans portfolio segments.



	For the Three Months Ended March 31,
	2019				2018
(Dollars in millions)	Average Recorded Investment		Recognized Interest Income		Average Recorded Investment		Recognized Interest Income
Commercial and industrial	$	430	$	3	$	293	$	2
Commercial mortgage	65		2		37		10
Construction	62		1		128		2
Total commercial portfolio	557		6		458		14
Residential mortgage	244		3		272		4
Home equity and other consumer loans	33		2		41		1
Total consumer portfolio	277		5		313		5
Total	$	834	$	11	$	771	$	19

The following table presents loan transfers from held to investment to held for sale and proceeds from

sales of loans during the three months ended March 31, 2019 and 2018 for the commercial and consumer loans portfolio segments.



	For the Three Months Ended March 31,
	2019				2018
(Dollars in millions)	Transfer of loans from held for investment to held for sale, net		Proceeds from Sale		Transfer of loans from held for investment to held for sale, net			Proceeds from Sale
Commercial portfolio	$	71	$	121	$	(91	)	$	240
Consumer portfolio	—		—		—			—
Total	$	71	$	121	$	(91	)	$	240