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Loans and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2020

The following table provides the outstanding balances of loans held for investment at June 30, 2020 and December 31, 2019.



(Dollars in millions)	June 30, 2020			December 31, 2019
Loans held for investment:
Commercial and industrial	$	29,464		$	26,338
Commercial mortgage	16,683			16,895
Construction	1,712			1,511
Lease financing	1,027			1,001
Total commercial portfolio	48,886			45,745
Residential mortgage and home equity⁽¹⁾	33,794			38,018
Other consumer⁽²⁾	3,855			4,450
Total consumer portfolio	37,649			42,468
Total loans held for investment⁽³⁾	86,535			88,213
Allowance for loan losses	(1,452		)	(538		)
Loans held for investment, net	$	85,083		$	87,675


(1)	Includes home equity loans of $1,874 million and $2,049 million at June 30, 2020 and December 31, 2019, respectively.


(2)	Other consumer loans substantially include unsecured consumer loans and consumer credit cards.


(3)	Includes $199 million and $320 million at June 30, 2020 and December 31, 2019, respectively, for net unamortized (discounts) and premiums and deferred (fees) and costs.

Reconciliation of Changes in Allowance for Loan Losses by Portfolio Segment

collectively-assessed modeling methodology. The following tables provide a reconciliation of changes in the allowance for loan losses by portfolio segment.



	For the Three Months Ended June 30, 2020
(Dollars in millions)	Commercial			Consumer			Unallocated		Total
Allowance for loan losses, beginning of period	$	679		$	473		$	—	$	1,152
(Reversal of) provision for loan losses	264			89			—		353
Loans charged-off	(14		)	(45		)	—		(59		)
Recoveries of loans previously charged-off	3			3			—		6
Allowance for loan losses, end of period	$	932		$	520		$	—	$	1,452




	For the Three Months Ended June 30, 2019
(Dollars in millions)	Commercial			Consumer			Unallocated			Total
Allowance for loan losses, beginning of period	$	389		$	122		$	5		$	516
(Reversal of) provision for loan losses	20			51			(5		)	66
Loans charged-off	(14		)	(21		)	—			(35		)
Recoveries of loans previously charged-off	12			3			—			15
Allowance for loan losses, end of period	$	407		$	155		$	—		$	562




	For the Six Months Ended June 30, 2020
(Dollars in millions)	Commercial			Consumer			Unallocated		Total
Allowance for loan losses, beginning of period	$	354		$	184		$	—	$	538
Cumulative effect adjustment from adoption of ASC 326 ⁽¹⁾	76			153			—		229
Allowance for loan losses, beginning of period, adjusted for adoption of ASC 326 ⁽¹⁾	430			337			—		767
(Reversal of) provision for loan losses	538			263			—		801
Loans charged-off	(46		)	(86		)	—		(132		)
Recoveries of loans previously charged-off	10			6			—		16
Allowance for loan losses, end of period	$	932		$	520		$	—	$	1,452


(1)	For further information see Note 1 to t

Allowance for Loan Losses and Related Loan Balances by Portfolio Segment

The following table shows the allowance for loan losses and related loan balances by portfolio segment as of December 31, 2019.



	December 31, 2019
(Dollars in millions)	Commercial		Consumer		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	43	$	12	$	—	$	55
Collectively evaluated for impairment	311		172		—		483
Total allowance for loan losses	$	354	$	184	$	—	$	538

Loans held for investment:
Individually evaluated for impairment	$	436	$	246	$	—	$	682
Collectively evaluated for impairment	45,309		42,222		—		87,531
Total loans held for investment	$	45,745	$	42,468	$	—	$	88,213

Summary of Nonaccrual Loans

The following table presents nonaccrual loans as of June 30, 2020 and December 31, 2019. The nonaccrual loans all have related allowance for credit losses accrued as of June 30, 2020.



(Dollars in millions)	June 30, 2020		December 31, 2019
Commercial and industrial	$	222	$	175
Commercial mortgage	147		15
Construction	45		—
Total commercial portfolio	414		190
Residential mortgage and home equity	206		137
Other consumer	1		1
Total consumer portfolio	207		138
Total nonaccrual loans	$	621	$	328
Troubled debt restructured loans that continue to accrue interest	$	317	$	392
Troubled debt restructured nonaccrual loans (included in total nonaccrual loans above)	$	253	$	171

Aging of Balance of Loans Held for Investment

The following tables show the aging of the balance of loans held for investment by class as of June 30, 2020 and December 31, 2019.



	June 30, 2020
	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	$	30,259	$	155	$	76	$	231	$	30,490
Commercial mortgage	16,487		179		17		196		16,683
Construction	1,706		7		—		7		1,713
Total commercial portfolio	48,452		341		93		434		48,886
Residential mortgage and home equity	33,463		251		80		331		33,794
Other consumer	3,820		19		16		35		3,855
Total consumer portfolio	37,283		270		96		366		37,649
Total loans held for investment	$	85,735	$	611	$	189	$	800	$	86,535



	December 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	$	27,241	$	37	$	61	$	98	$	27,339
Commercial mortgage	16,858		34		3		37		16,895
Construction	1,511		—		—		—		1,511
Total commercial portfolio	45,610		71		64		135		45,745
Residential mortgage and home equity	37,788		179		51		230		38,018
Other consumer	4,400		33		17		50		4,450
Total consumer portfolio	42,188		212		68		280		42,468
Total loans held for investment	$	87,798	$	283	$	132	$	415	$	88,213

The following table presents the loans that are 90 days or more past due, but are not on nonaccrual status by loan class.



(Dollars in millions)	June 30, 2020		December 31, 2019
Commercial and industrial	$	36	$	3
Commercial mortgage	14		—
Total commercial portfolio	50		3
Residential mortgage and home equity	9		—
Other consumer	15		17
Total consumer portfolio	24		17
Total loans that are 90 days or more past due and still accruing	$	74	$	20

Loans in Commercial Portfolio Segment Monitored for Credit Quality Based on Regulatory Risk Ratings

The following tables summarize the loans in the consumer portfolio segment based on refreshed FICO scores and refreshed LTV ratios at June 30, 2020 and December 31, 2019. The December 31, 2019 amounts presented reflect unpaid principal balances less partial charge-offs.



FICO Scores	June 30, 2020
	Non-Revolving Loans by Origination Year																		Revolving Loans			Total
(Dollars in millions)	2020			2019			2018			2017			2016			Prior			Revolving Loans			Total
Residential mortgage and home equity:
720 and Above	$	1,407		$	4,628		$	3,157		$	6,037		$	5,613		$	6,352		$	931		$	28,125
Below 720	205			726			626			1,088			831			1,511			240			5,227
No FICO Available⁽¹⁾	17			18			13			53			41			287			13			442
Total	1,629			5,372			3,796			7,178			6,485			8,150			1,184			33,794
Other consumer loans:
720 and Above	347			1,329			423			33			5			6			118			2,261
Below 720	177			928			280			21			4			4			153			1,567
No FICO Available⁽¹⁾	—			—			—			—			—			25			2			27
Total	524			2,257			703			54			9			35			273			3,855
Total consumer portfolio	$	2,153		$	7,629		$	4,499		$	7,232		$	6,494		$	8,185		$	1,457		$	37,649
Percentage of total	6		%	20		%	12		%	19		%	17		%	22		%	4		%	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, 2019
	FICO scores
(Dollars in millions)	720 and Above			Below 720			No FICO Available⁽¹⁾			Total
Residential mortgage and home equity	$	31,441		$	5,742		$	454		$	37,637
Other consumer	2,567			1,841			3			4,411
Total consumer portfolio	$	34,008		$	7,583		$	457		$	42,048
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).

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



	June 30, 2020
	Non-Revolving Loans at Amortized Cost by Origination Year																		Revolving Loans			Total
(Dollars in millions)	2020			2019			2018			2017			2016			Prior
Commercial and industrial:
Pass	$	4,124		$	2,389		$	1,886		$	1,275		$	821		$	1,608		$	15,074		$	27,177
Criticized:
Special Mention	24			280			198			71			8			171			656			1,408
Classified	50			36			75			40			1			70			607			879
Total	4,198			2,705			2,159			1,386			830			1,849			16,337			29,464
Commercial mortgage:
Pass	911			3,766			3,101			1,868			1,696			4,036			73			15,451
Criticized:
Special Mention	10			124			349			31			111			163			15			803
Classified	—			7			10			4			5			403			—			429
Total	921			3,897			3,460			1,903			1,812			4,602			88			16,683
Construction:
Pass	124			730			345			255			35			—			14			1,503
Criticized:
Special Mention	—			5			98			3			8			25			8			147
Classified	—			4			45			13			—			—			—			62
Total	124			739			488			271			43			25			22			1,712
Lease financing:
Pass	152			257			1			—			50			464			—			924
Criticized:
Special Mention	—			12			—			—			—			91			—			103
Classified	—			—			—			—			—			—			—			—
Total	152			269			1			—			50			555			—			1,027
Total commercial portfolio	$	5,395		$	7,610		$	6,108		$	3,560		$	2,735		$	7,031		$	16,447		$	48,886
Percentage of total	11		%	16		%	12		%	7		%	6		%	14		%	34		%	100		%

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



	June 30, 2020
	Non-Revolving Loans at Amortized Cost by Origination Year																		Revolving Loans			Total
(Dollars in millions)	2020			2019			2018			2017			2016			Prior
Commercial and industrial:
Pass	$	4,124		$	2,389		$	1,886		$	1,275		$	821		$	1,608		$	15,074		$	27,177
Criticized:
Special Mention	24			280			198			71			8			171			656			1,408
Classified	50			36			75			40			1			70			607			879
Total	4,198			2,705			2,159			1,386			830			1,849			16,337			29,464
Commercial mortgage:
Pass	911			3,766			3,101			1,868			1,696			4,036			73			15,451
Criticized:
Special Mention	10			124			349			31			111			163			15			803
Classified	—			7			10			4			5			403			—			429
Total	921			3,897			3,460			1,903			1,812			4,602			88			16,683
Construction:
Pass	124			730			345			255			35			—			14			1,503
Criticized:
Special Mention	—			5			98			3			8			25			8			147
Classified	—			4			45			13			—			—			—			62
Total	124			739			488			271			43			25			22			1,712
Lease financing:
Pass	152			257			1			—			50			464			—			924
Criticized:
Special Mention	—			12			—			—			—			91			—			103
Classified	—			—			—			—			—			—			—			—
Total	152			269			1			—			50			555			—			1,027
Total commercial portfolio	$	5,395		$	7,610		$	6,108		$	3,560		$	2,735		$	7,031		$	16,447		$	48,886
Percentage of total	11		%	16		%	12		%	7		%	6		%	14		%	34		%	100		%



	December 31, 2019
			Criticized
(Dollars in millions)	Pass		Special Mention		Classified		Total
Commercial and industrial	$	26,210	$	636	$	493	$	27,339
Commercial mortgage	16,569		114		212		16,895
Construction	1,399		50		62		1,511
Total commercial portfolio	$	44,178	$	800	$	767	$	45,745

Loans in Consumer Portfolio an Purchased credit-impaired loans

The following tables summarize the loans in the consumer portfolio segment, which exclude $3 million of loans covered by FDIC loss share agreements at December 31, 2019.



Payment Status	June 30, 2020
	Non-Revolving Loans at Amortized Cost by Origination Year																		Revolving Loans			Total
(Dollars in millions)	2020			2019			2018			2017			2016			Prior			Revolving Loans			Total
Residential mortgage and home equity:
Accrual	$	1,629		$	5,369		$	3,791		$	7,170		$	6,477		$	7,972		$	1,180		$	33,588
Nonaccrual	—			3			5			8			8			178			4			206
Total	1,629			5,372			3,796			7,178			6,485			8,150			1,184			33,794
Other consumer:
Accrual	524			2,257			703			54			9			34			273			3,854
Nonaccrual	—			—			—			—			—			1			—			1
Total	524			2,257			703			54			9			35			273			3,855
Total consumer portfolio	$	2,153		$	7,629		$	4,499		$	7,232		$	6,494		$	8,185		$	1,457		$	37,649
Percentage of total	6		%	20		%	12		%	19		%	17		%	22		%	4		%	100		%



	December 31, 2019
(Dollars in millions)	Accrual		Nonaccrual		Total
Residential mortgage and home equity	$	37,878	$	137	$	38,015
Other consumer	4,449		1		4,450
Total consumer portfolio	$	42,327	$	138	$	42,465

Loans in Consumer Portfolio Segment Based on Refreshed FICO Scores and Refreshed LTV ratios



LTV Ratios	June 30, 2020
	Non-Revolving Loans by Origination Year																		Revolving Loans			Total
(Dollars in millions)	2020			2019			2018			2017			2016			Prior			Revolving Loans			Total
Residential mortgage and home equity:
80% or below	$	1,613		$	5,125		$	3,593		$	7,125		$	6,476		$	8,077		$	1,067		$	33,076
80% to 100%	15			247			201			52			8			37			112			672
100% or more	—			—			—			—			—			6			—			6
No LTV Available⁽¹⁾	1			—			2			1			1			30			5			40
Total	1,629			5,372			3,796			7,178			6,485			8,150			1,184			33,794
Total consumer portfolio	$	1,629		$	5,372		$	3,796		$	7,178		$	6,485		$	8,150		$	1,184		$	33,794
Percentage of total	5		%	16		%	11		%	21		%	19		%	24		%	4		%	100		%


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



	December 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 and home equity	$	35,893		$	1,689		$	12		$	43		$	37,637
Total consumer portfolio	$	35,893		$	1,689		$	12		$	43		$	37,637
Percentage of total	95		%	5		%	—		%	—		%	100		%


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

Summary of Troubled Debt Restructurings

The following table provides a summary of the Company’s recorded investment in TDRs as of June 30, 2020 and December 31, 2019. The summary includes those TDRs that are on nonaccrual status and those that continue to accrue interest. The Company had $36 million and $61 million in commitments to lend additional funds to borrowers with loan modifications classified as TDRs as of June 30, 2020 and December 31, 2019, respectively.



(Dollars in millions)	June 30, 2020		December 31, 2019
Commercial and industrial	$	147	$	140
Commercial mortgage	170		168
Construction	52		62
Total commercial portfolio	369		370
Residential mortgage and home equity	200		192
Other consumer	1		1
Total consumer portfolio	201		193
Total restructured loans	$	570	$	563

Pre- and Post-Modification Outstanding Recorded Investment Amounts of Troubled Debt Restructurings

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 and six months ended June 30, 2020 and 2019.



	For the Three Months Ended June 30, 2020				For the Six Months Ended June 30, 2020
(Dollars in millions)	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾		Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾
Commercial and industrial	$	98	$	98	$	101	$	101
Commercial mortgage	3		3		3		3
Total commercial portfolio	101		101		104		104
Residential mortgage and home equity	23		23		24		24
Total consumer portfolio	23		23		24		24
Total	$	124	$	124	$	128	$	128


(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 June 30, 2019				For the Six Months Ended June 30, 2019
(Dollars in millions)	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾		Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽²⁾
Commercial and industrial	$	62	$	62	$	103	$	103
Commercial mortgage	60		59		62		61
Total commercial portfolio	122		121		165		164
Residential mortgage and home equity	1		1		6		6
Total consumer portfolio	1		1		6		6
Total	$	123	$	122	$	171	$	170


(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.

Recorded Investment Amounts of Troubled Debt Restructurings

ecorded investment amounts of TDRs at the date of default, for which there was a payment default during the three and six months ended June 30, 2020 and 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.



(Dollars in millions)	For the Three Months Ended June 30, 2020		For the Six Months Ended June 30, 2020
Commercial and industrial	$	28	$	28
Total commercial portfolio	28		28
Total	$	28	$	28



(Dollars in millions)	For the Three Months Ended June 30, 2019		For the Six Months Ended June 30, 2019
Commercial and industrial	$	40	$	40
Commercial mortgage	—		1
Total commercial portfolio	40		41
Total	$	40	$	41

For loans in the consumer portfolio in which allowance for loan losses 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.

Average Investment in Impaired Loans and Interest Income Recognized for Impaired Loans