
(In millions)	September 30, 2019		December 31, 2018

Loans held for sale	$	141	$	93
Commercial:
Commercial and industrial	$	14,846	$	14,513
Leasing	332		327
Owner-occupied	7,924		7,661
Municipal	2,185		1,661
Total commercial	25,287		24,162
Commercial real estate:
Construction and land development	2,347		2,186
Term	9,469		8,939
Total commercial real estate	11,816		11,125
Consumer:
Home equity credit line	2,930		2,937
1-4 family residential	7,506		7,176
Construction and other consumer real estate	637		643
Bankcard and other revolving plans	494		491
Other	165		180
Total consumer	11,732		11,427

Total loans ¹	$	48,835	$	46,714

Municipal loans generally include loans to state and local governments (“municipalities”) with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.

classified as loans held for sale. The sold loans were derecognized from the balance sheet. Loans classified as loans held for sale primarily consist of conforming residential mortgages and the guaranteed portion of Small Business Administration (“SBA”) loans. The loans are mainly sold to U.S. government agencies or participated to third parties. At times, we have continuing involvement in the transferred loans in the form of servicing rights or a guarantee from the respective issuer. Amounts added to loans held for sale during these same periods were $316 million and $579 million for the three and nine months ended September 30, 2019 and $184 million and $584 million for the three and nine months ended September 30, 2018, respectively. See Note 5 for further information regarding guaranteed securities.

The principal balance of sold loans for which we retain servicing was approximately $1.6 billion at September 30, 2019 and $2.2 billion at December 31, 2018. Income from loans sold, excluding servicing, was $8 million and $13 million for the three and nine months ended September 30, 2019 and $3 million and $10 million for the three and nine months ended September 30, 2018, respectively.

The allowance for credit losses (“ACL”) consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”). The ALLL represents our estimate of probable and estimable losses inherent in the loan and lease portfolio as of the balance sheet date. We also estimate a reserve for potential losses associated with off-balance sheet commitments, including standby letters of credit. We determine the RULC using the same procedures and methodologies that we use for the ALLL.


	Three Months Ended September 30, 2019
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses
Balance at beginning of period	$	338	$	114	$	51	$	503

Provision for loan losses	9		(6)		5		8
Deductions:
Gross loan and lease charge-offs	6		—		5		11
Recoveries	7		1		2		10
Net loan and lease charge-offs (recoveries)	(1)		(1)		3		1
Balance at end of period	$	348	$	109	$	53	$	510
Reserve for unfunded lending commitments
Balance at beginning of period	$	41	$	19	$	—	$	60
Provision for unfunded lending commitments	—		2		—		2
Balance at end of period	$	41	$	21	$	—	$	62
Total allowance for credit losses at end of period
Allowance for loan losses	$	348	$	109	$	53	$	510
Reserve for unfunded lending commitments	41		21		—		62
Total allowance for credit losses	$	389	$	130	$	53	$	572


	Nine Months Ended September 30, 2019
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses
Balance at beginning of period	$	331	$	110	$	54	$	495

Provision for loan losses	31		(4)		3		30
Deductions:
Gross loan and lease charge-offs	33		1		12		46
Recoveries	19		4		8		31
Net loan and lease charge-offs (recoveries)	14		(3)		4		15
Balance at end of period	$	348	$	109	$	53	$	510
Reserve for unfunded lending commitments
Balance at beginning of period	$	40	$	17	$	—	$	57
Provision for unfunded lending commitments	1		4		—		5
Balance at end of period	$	41	$	21	$	—	$	62
Total allowance for credit losses at end of period
Allowance for loan losses	$	348	$	109	$	53	$	510
Reserve for unfunded lending commitments	41		21		—		62
Total allowance for credit losses	$	389	$	130	$	53	$	572


	Three Months Ended September 30, 2018
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses
Balance at beginning of period	$	321	$	122	$	47	$	490

Provision for loan losses	(11)		(5)		5		(11)

Gross loan and lease charge-offs	8		5		4		17
Recoveries	12		3		3		18
Net loan and lease charge-offs (recoveries)	(4)		2		1		(1)
Balance at end of period	$	314	$	115	$	51	$	480
Reserve for unfunded lending commitments
Balance at beginning of period	$	43	$	15	$	—	$	58
Provision for unfunded lending commitments	(1)		1		—		—
Balance at end of period	$	42	$	16	$	—	$	58
Total allowance for credit losses at end of period
Allowance for loan losses	$	314	$	115	$	51	$	480
Reserve for unfunded lending commitments	42		16		—		58
Total allowance for credit losses	$	356	$	131	$	51	$	538


	Nine Months Ended September 30, 2018
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses
Balance at beginning of period	$	371	$	103	$	44	$	518

Provision for loan losses	(69)		9		14		(46)

Gross loan and lease charge-offs	38		5		13		56
Recoveries	50		8		6		64
Net loan and lease charge-offs (recoveries)	(12)		(3)		7		(8)
Balance at end of period	$	314	$	115	$	51	$	480
Reserve for unfunded lending commitments
Balance at beginning of period	$	48	$	10	$	—	$	58
Provision for unfunded lending commitments	(6)		6		—		—
Balance at end of period	$	42	$	16	$	—	$	58
Total allowance for credit losses at end of period
Allowance for loan losses	$	314	$	115	$	51	$	480
Reserve for unfunded lending commitments	42		16		—		58
Total allowance for credit losses	$	356	$	131	$	51	$	538


	September 30, 2019
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	10	$	1	$	3	$	14
Collectively evaluated for impairment	338		108		50		496

Total	$	348	$	109	$	53	$	510
Outstanding loan balances:
Individually evaluated for impairment	$	159	$	45	$	64	$	268
Collectively evaluated for impairment	25,128		11,771		11,668		48,567

Total	$	25,287	$	11,816	$	11,732	$	48,835


	December 31, 2018
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	6	$	1	$	2	$	9
Collectively evaluated for impairment	325		109		52		486

Total	$	331	$	110	$	54	$	495
Outstanding loan balances:
Individually evaluated for impairment	$	164	$	55	$	72	$	291
Collectively evaluated for impairment	23,998		11,070		11,355		46,423

Total	$	24,162	$	11,125	$	11,427	$	46,714

Loans are generally placed on nonaccrual status when payment in full of principal and interest is not expected, or the loan is 90 days or more past due as to principal or interest, unless the loan is both well secured and in the process of collection. For further discussion of our policies and processes regarding nonaccrual and past due loans, see Note 6 of our 2018 Annual Report on Form 10-K.


(In millions)	September 30, 2019		December 31, 2018

Loans held for sale	$	—	$	6
Commercial:
Commercial and industrial	$	97	$	82
Leasing	1		2
Owner-occupied	49		67
Municipal	—		1
Total commercial	147		152
Commercial real estate:

Term	29		38
Total commercial real estate	29		38
Consumer:
Home equity credit line	12		13
1-4 family residential	44		42
Construction and other consumer real estate	1		—
Bankcard and other revolving plans	—		1

Total consumer loans	57		56
Total	$	233	$	246


	September 30, 2019
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current ¹

Loans held for sale	$	141	$	—	$	—	$	—	$	141	$	—	$	—
Commercial:
Commercial and industrial	$	14,766	$	44	$	36	$	80	$	14,846	$	5	$	53
Leasing	331		1		—		1		332		—		—
Owner-occupied	7,875		33		16		49		7,924		—		29
Municipal	2,185		—		—		—		2,185		—		—
Total commercial	25,157		78		52		130		25,287		5		82
Commercial real estate:
Construction and land development	2,346		1		—		1		2,347		—		—
Term	9,456		7		6		13		9,469		—		23
Total commercial real estate	11,802		8		6		14		11,816		—		23
Consumer:
Home equity credit line	2,921		6		3		9		2,930		—		6
1-4 family residential	7,467		13		26		39		7,506		—		13
Construction and other consumer real estate	637		—		—		—		637		—		1
Bankcard and other revolving plans	490		3		1		4		494		1		—
Other	164		1		—		1		165		—		—
Total consumer loans	11,679		23		30		53		11,732		1		20
Total	$	48,638	$	109	$	88	$	197	$	48,835	$	6	$	125


	December 31, 2018
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current ¹

Loans held for sale	$	89	$	—	$	4	$	4	$	93	$	—	$	2
Commercial:
Commercial and industrial	$	14,445	$	37	$	31	$	68	$	14,513	$	4	$	46
Leasing	325		1		1		2		327		—		1
Owner-occupied	7,621		23		17		40		7,661		3		48
Municipal	1,661		—		—		—		1,661		—		1
Total commercial	24,052		61		49		110		24,162		7		96
Commercial real estate:
Construction and land development	2,185		1		—		1		2,186		—		—
Term	8,924		4		11		15		8,939		1		26
Total commercial real estate	11,109		5		11		16		11,125		1		26
Consumer:
Home equity credit line	2,927		4		6		10		2,937		—		4
1-4 family residential	7,143		15		18		33		7,176		—		19
Construction and other consumer real estate	642		1		—		1		643		—		—
Bankcard and other revolving plans	487		2		2		4		491		2		—
Other	179		1		—		1		180		—		—
Total consumer loans	11,378		23		26		49		11,427		2		23
Total	$	46,539	$	89	$	86	$	175	$	46,714	$	10	$	145

In addition to the past due and nonaccrual criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades assigned to loans follow our definitions of Pass, Special Mention, Sub-standard, and Doubtful, which are consistent with published definitions of regulatory risk classifications. For further discussion of our policies and processes regarding credit quality indicators and internal loan risk-grading, see Note 6 of our 2018 Annual Report on Form 10-K.


	September 30, 2019
(In millions)	Pass		Special Mention		Sub- standard		Doubtful		Total loans		Total allowance
Commercial:
Commercial and industrial	$	14,054	$	351	$	441	$	—	$	14,846
Leasing	312		18		2		—		332
Owner-occupied	7,627		85		212		—		7,924
Municipal	2,159		22		4		—		2,185
Total commercial	24,152		476		659		—		25,287		$	348
Commercial real estate:
Construction and land development	2,313		32		2		—		2,347
Term	9,353		48		66		2		9,469
Total commercial real estate	11,666		80		68		2		11,816		109
Consumer:
Home equity credit line	2,914		—		16		—		2,930
1-4 family residential	7,457		—		49		—		7,506
Construction and other consumer real estate	635		—		2		—		637
Bankcard and other revolving plans	491		—		3		—		494
Other	165		—		—		—		165
Total consumer loans	11,662		—		70		—		11,732		53
Total	$	47,480	$	556	$	797	$	2	$	48,835	$	510


	December 31, 2018
(In millions)	Pass		Special Mention		Sub- standard		Doubtful		Total loans		Total allowance
Commercial:
Commercial and industrial	$	13,891	$	322	$	300	$	—	$	14,513
Leasing	313		10		4		—		327
Owner-occupied	7,369		72		220		—		7,661
Municipal	1,632		2		27		—		1,661
Total commercial	23,205		406		551		—		24,162		$	331
Commercial real estate:
Construction and land development	2,174		11		1		—		2,186
Term	8,853		10		76		—		8,939
Total commercial real estate	11,027		21		77		—		11,125		110
Consumer:
Home equity credit line	2,920		—		17		—		2,937
1-4 family residential	7,129		—		47		—		7,176
Construction and other consumer real estate	641		—		2		—		643
Bankcard and other revolving plans	488		—		3		—		491
Other	179		—		1		—		180
Total consumer loans	11,357		—		70		—		11,427		54
Total	$	45,589	$	427	$	698	$	—	$	46,714	$	495

Loans are considered impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due in accordance with the contractual terms of the loan agreement, including scheduled interest payments. Payments received on impaired loans that are accruing are recognized in interest income, according to the contractual loan agreement. Payments received on impaired loans that are on nonaccrual are not

recognized in interest income, but are applied as a reduction to the principal outstanding. The amount of interest income recognized on a cash basis during the time the loans were impaired within the three months ended September 30, 2019 and 2018 was not significant. For additional information regarding our policies and methodologies used to evaluate impaired loans, see Note 6 of our 2018 Annual Report on Form 10-K.


	September 30, 2019
(In millions)	Unpaid principal balance		Recorded investment								Total recorded investment		Related allowance
							with no allowance			with allowance

Commercial:
Commercial and industrial	$	132	$	36	$	68		$	104		$	9
Owner-occupied	44		25		16			41			1
Municipal	—		—		—			—			—
Total commercial	176		61		84			145			10
Commercial real estate:
Construction and land development	—		—		—			—			—
Term	35		26		5			31			—
Total commercial real estate	35		26		5			31			—
Consumer:
Home equity credit line	15		11		3			14			1
1-4 family residential	58		27		23			50			2
Construction and other consumer real estate	1		—		—			—			—


Total consumer loans	74		38		26			64			3
Total	$	285	$	125	$	115		$	240		$	13


	December 31, 2018
(In millions)	Unpaid principal balance		Recorded investment								Total recorded investment		Related allowance
							with no allowance			with allowance

Commercial:
Commercial and industrial	$	112	$	52	$	36		$	88		$	4
Owner-occupied	67		31		29			60			2
Municipal	1		1		—			1			—
Total commercial	180		84		65			149			6
Commercial real estate:
Construction and land development	1		—		—			—			—
Term	44		37		3			40			—
Total commercial real estate	45		37		3			40			—
Consumer:
Home equity credit line	15		12		2			14			—
1-4 family residential	69		32		25			57			2
Construction and other consumer real estate	1		1		—			1			—


Total consumer loans	85		45		27			72			2
Total	$	310	$	166	$	95		$	261		$	8


	Three Months Ended September 30, 2019						Nine Months Ended September 30, 2019
(In millions)	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized


Commercial:
Commercial and industrial	$	112	$	—	$	90	$	2
Owner-occupied	58		—		56		—
Municipal	—		—		—		—
Total commercial	170		—		146		2
Commercial real estate:
Construction and land development	—		—		—		—
Term	27		—		29		—
Total commercial real estate	27		—		29		—
Consumer:
Home equity credit line	14		—		13		—
1-4 family residential	53		—		52		—
Construction and other consumer real estate	2		—		2		—


Total consumer loans	69		—		67		—
Total	$	266	$	—	$	242	$	2


	Three Months Ended September 30, 2018						Nine Months Ended September 30, 2018
(In millions)	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized


Commercial:
Commercial and industrial	$	124	$	—	$	108	$	—
Owner-occupied	51		—		46		8
Municipal	1		—		1		—
Total commercial	176		—		155		8
Commercial real estate:
Construction and land development	1		—		1		—
Term	49		—		50		1
Total commercial real estate	50		—		51		1
Consumer:
Home equity credit line	14		—		13		—
1-4 family residential	58		—		53		—
Construction and other consumer real estate	1		—		1		—


Total consumer loans	73		—		67		—
Total	$	299	$	—	$	273	$	9

Loans may be modified in the normal course of business for competitive reasons or to strengthen the Bank’s position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which the Bank has granted a concession that it would not otherwise consider, are considered troubled debt restructurings (“TDRs”). For further discussion of our policies and processes regarding TDRs, see Note 6 of our 2018 Annual Report on Form 10-K.


	September 30, 2019
	Recorded investment resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other¹		Multiple modification types²		Total
Accruing
Commercial:
Commercial and industrial	$	2	$	2	$	—	$	—	$	11	$	7	$	22
Owner-occupied	4		2		—		—		4		7		17

Total commercial	6		4		—		—		15		14		39
Commercial real estate:

Term	—		2		—		1		—		4		7
Total commercial real estate	—		2		—		1		—		4		7
Consumer:
Home equity credit line	—		2		8		—		—		2		12
1-4 family residential	1		1		5		—		1		24		32
Construction and other consumer real estate	—		—		—		—		—		—		—

Total consumer loans	1		3		13		—		1		26		44
Total accruing	7		9		13		1		16		44		90
Nonaccruing
Commercial:
Commercial and industrial	—		5		—		22		—		25		52
Owner-occupied	6		1		—		—		1		4		12
Municipal	—		—		—		—		—		—		—
Total commercial	6		6		—		22		1		29		64
Commercial real estate:

Term	1		—		—		—		4		13		18
Total commercial real estate	1		—		—		—		4		13		18
Consumer:
Home equity credit line	—		—		2		—		—		—		2
1-4 family residential	—		—		1		—		1		6		8


Total consumer loans	—		—		3		—		1		6		10
Total nonaccruing	7		6		3		22		6		48		92
Total	$	14	$	15	$	16	$	23	$	22	$	92	$	182

¹Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.


	December 31, 2018
	Recorded investment resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other¹		Multiple modification types²		Total
Accruing
Commercial:
Commercial and industrial	$	2	$	4	$	—	$	—	$	15	$	7	$	28
Owner-occupied	3		2		—		—		2		14		21
Total commercial	5		6		—		—		17		21		49
Commercial real estate:

Term	2		2		—		1		—		6		11
Total commercial real estate	2		2		—		1		—		6		11
Consumer:
Home equity credit line	—		1		8		—		—		3		12
1-4 family residential	1		2		6		1		1		28		39
Construction and other consumer real estate	—		—		—		—		—		1		1

Total consumer loans	1		3		14		1		1		32		52
Total accruing	8		11		14		2		18		59		112
Nonaccruing
Commercial:
Commercial and industrial	1		6		—		1		10		27		45
Owner-occupied	6		—		—		1		2		5		14
Municipal	—		—		—		—		—		1		1
Total commercial	7		6		—		2		12		33		60
Commercial real estate:

Term	3		—		—		2		14		1		20
Total commercial real estate	3		—		—		2		14		1		20
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		—		1		—		1		7		9


Total consumer loans	—		—		2		—		1		7		10
Total nonaccruing	10		6		2		4		27		41		90
Total	$	18	$	17	$	16	$	6	$	45	$	100	$	202

The total recorded investment of all TDRs in which interest rates were modified below market was $80 million at September 30, 2019 and $88 million at December 31, 2018. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.

On an ongoing basis, we monitor the performance of all TDRs according to their restructured terms. Subsequent payment default is defined in terms of delinquency, when principal or interest payments are past due 90 days or more for commercial loans, or 60 days or more for consumer loans.


	Three Months Ended September 30, 2019										Nine Months Ended September 30, 2019
(In millions)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial:
Commercial and industrial	$	—	$	1	$	1	$	—	$	2	$	2
Owner-occupied	—		—		—		—		1		1
Total commercial	—		1		1		—		3		3
Commercial real estate:

Term	—		—		—		—		—		—
Total commercial real estate	—		—		—		—		—		—





Total	$	—	$	1	$	1	$	—	$	3	$	3


	Three Months Ended September 30, 2018										Nine Months Ended September 30, 2018
(In millions)	Accruing		Nonaccruing		Total		Accruing		Nonaccruing		Total
Commercial:
Commercial and industrial	$	—	$	1	$	1	$	—	$	5	$	5
Owner-occupied	—		—		—		—		1		1
Total commercial	—		1		1		—		6		6
Commercial real estate:

Term	2		—		2		2		—		2
Total commercial real estate	2		—		2		2		—		2





Total	$	2	$	1	$	3	$	2	$	6	$	8

At September 30, 2019, the amount of foreclosed residential real estate property held by the Bank was less than $1 million and approximately $2 million at December 31, 2018. The recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was $11 million and $10 million for the same periods, respectively.

Credit risk is the possibility of loss from the failure of a borrower, guarantor, or another obligor to fully perform under the terms of a credit-related contract. We perform an ongoing analysis of our loan portfolio to evaluate whether there is any significant exposure to any concentrations of credit risk. See Note 6 of our 2018 Annual Report on Form 10-K for further discussion of our evaluation of credit risk concentrations. See also Note 7 of our 2018 Annual Report on Form 10-K for a discussion of counterparty risk associated with the Bank’s derivative transactions.