Loans, Leases, and Allowance For Credit Losses

12 Months Ended

Dec. 31, 2022

Receivables [Abstract]

LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

Loans, Leases, and Loans Held for Sale

Loans and leases are summarized as follows according to major portfolio segment and specific class:

	December 31,
(In millions)	2022		2021
Loans held for sale	$	8	$	83
Commercial:
Commercial and industrial	$	16,180	$	13,867
PPP	197		1,855
Leasing	386		327
Owner-occupied	9,371		8,733
Municipal	4,361		3,658
Total commercial	30,495		28,440
Commercial real estate:
Construction and land development	2,513		2,757
Term	10,226		9,441
Total commercial real estate	12,739		12,198
Consumer:
Home equity credit line	3,377		3,016
1-4 family residential	7,286		6,050
Construction and other consumer real estate	1,161		638
Bankcard and other revolving plans	471		396
Other	124		113
Total consumer	12,419		10,213
Total loans and leases	$	55,653	$	50,851

Loans and leases are measured and presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $49 million and $83 million at December 31, 2022, and December 31, 2021, respectively. Amortized cost basis does not include accrued interest receivables of $247 million and $161 million at December 31, 2022, and December 31, 2021, respectively. These receivables are presented on the consolidated balance sheet within the “Other assets” line item.

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.

Land acquisition and development loans included in the construction and land development loan portfolio were $262 million at December 31, 2022 and $160 million at December 31, 2021.

Loans with a carrying value of approximately $27.6 billion at December 31, 2022, and $26.8 billion at December 31, 2021, have been pledged at the Federal Reserve and the Federal Home Loan Bank (“FHLB”) of Des Moines as collateral for current and potential borrowings.

We sold loans totaling $0.7 billion in 2022, $1.7 billion in 2021, and $1.8 billion in 2020, that were classified as loans held for sale. Loans classified as loans held for sale primarily consist of conforming residential mortgages and the guaranteed portion of SBA loans that are primarily sold to U.S. government agencies or participated to third-parties. They do not include loans from the SBA’s Paycheck Protection Program (“PPP”). Occasionally, we have continuing involvement in the sold loans in the form of servicing rights or guarantees. Amounts added to loans held for sale during these same periods were $0.7 billion, $1.7 billion, and $1.8 billion, respectively. See Note 5 for further information regarding guaranteed securities.

The principal balance of sold loans for which we have retained servicing was approximately $3.5 billion at December 31, 2022, and $3.3 billion at December 31, 2021. Income from loans sold, excluding servicing, was $14 million in 2022, $34 million in 2021, and $54 million in 2020.

Allowance for Credit Losses

The ACL, which consists of the ALLL and the RULC, represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. The ACL for AFS and HTM debt securities is estimated separately from loans. For HTM securities, the ACL is assessed consistent with the approach for loans carried at amortized cost. See Note 5 for further discussion on our assessment of expected credit losses on AFS securities and disclosures related to AFS and HTM securities.

The ACL reflects our best estimate of credit losses and is calculated using the loan’s amortized cost basis (principal balance, net of unamortized premiums, discounts, and deferred fees and costs). We do not estimate the ACL for accrued interest receivables because we reverse or write-off uncollectible accrued interest receivable balances in a timely manner, generally within one month.

The methodologies we use to estimate the ACL depend upon the type of loan, the age and contractual term of the loan, expected payments (both contractual and assumed prepayments), credit quality indicators, economic forecasts, and the evaluation method (whether individually or collectively evaluated). Loan extensions or renewals are not considered in the ACL unless they are included in the original or modified loan contract and are not unconditionally cancellable, or we reasonably expect a related modification to result in a TDR.

Losses are charged to the ACL when recognized. Generally, commercial and commercial real estate (“CRE”) loans are charged off or charged down when they are determined to be uncollectible in whole or in part, or when 180 days past due, unless the loan is well-secured and in process of collection. Consumer loans are either charged off or charged down to net realizable value no later than the month in which they become 180 days past due. Closed-end consumer loans that are not secured by residential real estate are either charged off or charged down to net realizable value no later than the month in which they become 120 days past due.

We establish the amount of the ACL by analyzing the portfolio at least quarterly, and we adjust the provision for loan losses and unfunded lending commitments to ensure the ACL is at an appropriate level at the balance sheet date. The ACL is determined based on our review of loans that have similar risk characteristics, which are evaluated on a collective basis, as well as loans that do not have similar risk characteristics, which are evaluated on an individual basis.

For commercial and CRE loans with commitments greater than $1 million, we assign internal risk grades using a comprehensive loan grading system based on financial and statistical models, individual credit analysis, and loan officer experience and judgment. The credit quality indicators described subsequently are based on this grading system. Estimated credit losses on all loan segments, including consumer and small commercial and CRE loans with commitments less than or equal to $1 million that are evaluated on a collective basis, are derived from statistical analyses of our historical default and loss experience since January 2008.

We estimate current expected credit losses for each loan, which includes considerations of historical credit loss experience, current conditions, and reasonable and supportable forecasts about the future. We use the following two types of credit loss estimation models:

•Econometric loss models, which rely on statistical analyses of our historical loss experience dependent upon economic factors and other loan-level characteristics. Statistically relevant economic factors vary depending upon the type of loan, but include variables such as unemployment, real estate price indices, energy prices, GDP, etc. The models use multiple economic scenarios that reflect optimistic, baseline, and stressed economic conditions. The results derived using these economic scenarios are probability-weighted to produce the credit loss estimate.

•Loss models that are based on our long-term average historical credit loss experience since 2008, which rely on statistical analyses of our historical loss experience dependent upon loan-level characteristics.

Credit loss estimates for the first 12 months of a loan’s remaining life are derived using econometric loss models. Over a subsequent 12-month reversion period, we blend the estimated credit losses from the two models on a straight-line basis. For the remaining life of the loan, the estimated credit losses are derived from the long-term average historical credit loss models.

For loans that do not share risk characteristics with other loans, we estimate lifetime expected credit losses on an individual basis. These include nonaccrual loans with a balance greater than $1 million; TDR loans, including TDRs that subsequently default; a loan no longer reported as a TDR; or a loan where we reasonably expect it to become a TDR. When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on either the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

When we base the specific reserve on the fair value of the loan’s underlying collateral, we generally charge-off the portion of the balance that is greater than fair value. For these loans, subsequent to the charge-off, if the fair value of the loan’s underlying collateral increases according to an updated appraisal, we establish a negative reserve up to the lesser of the amount of the charge-off or the updated fair value.

The methodologies described previously generally rely on historical loss information to help determine our quantitative portion of the ACL. However, we also consider other qualitative and environmental factors related to current conditions and reasonable and supportable forecasts that may indicate current expected credit losses may differ from the historical information reflected in our quantitative models. Thus, after applying historical loss experience, as described above, we review the quantitative portion of ACL for each segment using qualitative criteria, and we use those criteria to determine our qualitative estimate. We monitor various risk factors that influence our judgment regarding the level of the ACL across the portfolio segments. These factors primarily include:

•Actual and expected changes in international, national, regional, and local economic and business conditions and developments;

•The volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

•Lending policies and procedures, including changes in underwriting standards and practices for collection, charge-off, and recovery;

•The experience, ability, and depth of lending management and other relevant staff;

•The nature and volume of the portfolio;

•The quality of the credit review function;

•The existence, growth, and effect of any concentration of credit;

•The effect of other external factors such as regulatory, legal, and technological environments; fiscal and monetary actions; competition; and events such as natural disasters and pandemics.

The magnitude of the impact of these factors on our qualitative assessment of the ACL changes from quarter to quarter according to changes made by management in its assessment of these factors, the extent these factors are already reflected in quantitative loss estimates, and the extent changes in these factors diverge from one to another. Management may adjust the probability weights mentioned previously to reflect management’s assessments of current conditions and reasonable and supportable forecasts. We also consider the uncertainty and imprecision inherent in the estimation process when evaluating the ACL.

Off-balance Sheet Credit Exposures

As previously mentioned, we estimate current expected credit losses for off-balance sheet loan commitments, including letters of credit that are not unconditionally cancellable. This estimate uses the same procedures and methodologies described previously for loans and is calculated by taking the difference between the estimated current expected credit loss and the funded balance, if greater than zero.

Changes in the Allowance for Credit Losses

Changes in the ACL are summarized as follows:

	December 31, 2022
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan and lease losses
Balance at beginning of year	$	311	$	107	$	95	$	513
Provision for loan losses	29		49		23		101
Gross loan and lease charge-offs	72		—		10		82
Recoveries	32		—		11		43
Net loan and lease charge-offs (recoveries)	40		—		(1)		39
Balance at end of year	$	300	$	156	$	119	$	575
Reserve for unfunded lending commitments
Balance at beginning of year	$	19	$	11	$	10	$	40
Provision for unfunded lending commitments	(3)		22		2		21
Balance at end of year	$	16	$	33	$	12	$	61
Total allowance for credit losses
Allowance for loan and lease losses	$	300	$	156	$	119	$	575
Reserve for unfunded lending commitments	16		33		12		61
Total allowance for credit losses	$	316	$	189	$	131	$	636

	December 31, 2021
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan and lease losses
Balance at beginning of year	$	464	$	171	$	142	$	777
Provision for loan losses	(147)		(67)		(44)		(258)
Gross loan and lease charge-offs	35		—		13		48
Recoveries	29		3		10		42
Net loan and lease charge-offs (recoveries)	6		(3)		3		6
Balance at end of year	$	311	$	107	$	95	$	513
Reserve for unfunded lending commitments
Balance at beginning of year	$	30	$	20	$	8	$	58
Provision for unfunded lending commitments	(11)		(9)		2		(18)
Balance at end of year	$	19	$	11	$	10	$	40
Total allowance for credit losses
Allowance for loan and lease losses	$	311	$	107	$	95	$	513
Reserve for unfunded lending commitments	19		11		10		40
Total allowance for credit losses	$	330	$	118	$	105	$	553

Nonaccrual Loans

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. Factors we consider in determining whether a loan is placed on nonaccrual include delinquency status, collateral-value, borrower or guarantor financial statement information, bankruptcy status, and other information which would indicate that the full and timely collection of interest and principal is uncertain.

A nonaccrual loan may be returned to accrual status when (1) all delinquent interest and principal become current in accordance with the terms of the loan agreement; (2) the loan, if secured, is well-secured; (3) the borrower has paid according to the contractual terms for a minimum of six months; and (4) an analysis of the borrower indicates a

reasonable assurance of the borrower's ability and willingness to maintain payments. The amortized cost basis of loans on nonaccrual status is summarized as follows:

	December 31, 2022
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance
Commercial:
Commercial and industrial	$	4	$	52	$	56	$	26
PPP	4		3		7		1
Owner-occupied	13		11		24		1
Total commercial	21		66		87		28
Commercial real estate:
Term	—		14		14		2
Total commercial real estate	—		14		14		2
Consumer:
Home equity credit line	1		10		11		2
1-4 family residential	9		28		37		3
Total consumer loans	10		38		48		5
Total	$	31	$	118	$	149	$	35

	December 31, 2021
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance
Commercial:
Commercial and industrial	$	30	$	94	$	124	$	34
SBA PPP	2		1		3		—
Owner-occupied	37		20		57		3
Total commercial	69		115		184		37
Commercial real estate:
Term	6		14		20		3
Total commercial real estate	6		14		20		3
Consumer:
Home equity credit line	4		10		14		2
1-4 family residential	9		43		52		5
Bankcard and other revolving plans	—		1		1		1
Total consumer loans	13		54		67		8
Total	$	88	$	183	$	271	$	48

For accruing loans, interest is accrued and interest payments are recognized into interest income according to the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, any uncollected or accrued interest is reversed from interest income in a timely manner (generally within one month), and any payments received on these loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. When the collectibility of the amortized cost basis for a nonaccrual loan is no longer in doubt, then interest payments may be recognized in interest income on a cash basis. For 2022 and 2021, there was no interest income recognized on a cash basis during the period the loans were on nonaccrual.

The amount of accrued interest receivables reversed from interest income during the periods presented is summarized by loan portfolio segment as follows:

	Twelve Months Ended December 31,
(In millions)	2022		2021		2020
Commercial	$	12	$	15	$	16
Commercial real estate	1		2		2
Consumer	—		—		1
Total	$	13	$	17	$	19

Past Due Loans

Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

Past-due loans (accruing and nonaccruing) are summarized as follows:

	December 31, 2022
(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 current1
Commercial:
Commercial and industrial	$	16,148	$	18	$	14	$	32	$	16,180	$	2	$	44
PPP	183		6		8		14		197		2		1
Leasing	386		—		—		—		386		—		—
Owner-occupied	9,344		20		7		27		9,371		1		15
Municipal	4,361		—		—		—		4,361		—		—
Total commercial	30,422		44		29		73		30,495		5		60
Commercial real estate:
Construction and land development	2,511		2		—		2		2,513		—		—
Term	10,179		37		10		47		10,226		—		4
Total commercial real estate	12,690		39		10		49		12,739		—		4
Consumer:
Home equity credit line	3,369		5		3		8		3,377		—		6
1-4 family residential	7,258		9		19		28		7,286		—		16
Construction and other consumer real estate	1,161		—		—		—		1,161				—
Bankcard and other revolving plans	467		3		1		4		471		1		—
Other	124		—		—		—		124		—		—
Total consumer loans	12,379		17		23		40		12,419		1		22
Total	$	55,491	$	100	$	62	$	162	$	55,653	$	6	$	86

	December 31, 2021
(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 current1
Commercial:
Commercial and industrial	$	13,822	$	17	$	28	$	45	$	13,867	$	2	$	91
PPP	1,813		35		7		42		1,855		5		—
Leasing	327		—		—		—		327		—		—
Owner-occupied	8,712		7		14		21		8,733		—		42
Municipal	3,658		—		—		—		3,658		—		—
Total commercial	28,332		59		49		108		28,440		7		133
Commercial real estate:
Construction and land development	2,757		—		—		—		2,757		—		—
Term	9,426		10		5		15		9,441		—		15
Total commercial real estate	12,183		10		5		15		12,198		—		15
Consumer:
Home equity credit line	3,008		4		4		8		3,016		—		10
1-4 family residential	6,018		6		26		32		6,050		—		24
Construction and other consumer real estate	638		—		—		—		638		—		—
Bankcard and other revolving plans	393		2		1		3		396		1		—
Other	112		1		—		1		113		—		—
Total consumer loans	10,169		13		31		44		10,213		1		34
Total	$	50,684	$	82	$	85	$	167	$	50,851	$	8	$	182

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is not expected.

Credit Quality Indicators

In addition to the nonaccrual and past due 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, Substandard, and Doubtful, which are consistent with published definitions of regulatory risk classifications.

Definitions of Pass, Special Mention, Substandard, and Doubtful are summarized as follows:

•Pass — A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.

•Special Mention — A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date.

•Substandard — A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.

•Doubtful — A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.

There were no loans classified as Doubtful at both December 31, 2022, and December 31, 2021.

For commercial and CRE loans with commitments greater than $1 million, we assign one of multiple grades within the Pass classification or one of the risk classifications described previously. We confirm our internal risk-grades quarterly, or as soon as we identify information that affects the credit risk of the loan.

For consumer loans and for commercial and CRE loans with commitments less than or equal to $1 million, we generally assign internal risk-grades similar to those described previously based on automated rules that depend on refreshed credit scores, payment performance, and other risk indicators. These are generally assigned either a Pass, Special Mention, or Substandard grade, and are reviewed as we identify information that might warrant a grade change.

The amortized cost basis of loans and leases categorized by year of origination and by credit quality classifications as monitored by management are summarized as follows:

	December 31, 2022
	Term Loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2022		2021		2020		2019		2018		Prior						Total loans
Commercial:
Commercial and industrial
Pass	$	3,363	$	1,799	$	864	$	876	$	293	$	264	$	8,054	$	182	$	15,695
Special Mention	1		2		10		52		1		2		50		—		118
Accruing Substandard	26		7		17		78		30		67		84		2		311
Nonaccrual	—		6		—		11		1		2		32		4		56
Total commercial and industrial	3,390		1,814		891		1,017		325		335		8,220		188		16,180
PPP
Pass	—		75		115		—		—		—		—		—		190
Nonaccrual	—		2		5		—		—		—		—		—		7
Total PPP	—		77		120		—		—		—		—		—		197
Leasing
Pass	160		71		47		66		18		19		—		—		381
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		5		—		—		5
Nonaccrual	—		—		—		—		—		—		—		—		—
Total leasing	160		71		47		66		18		24		—		—		386
Owner-occupied
Pass	2,157		2,285		1,143		874		654		1,679		187		74		9,053
Special Mention	1		15		5		8		3		16		1		—		49
Accruing Substandard	16		33		48		20		55		64		9		—		245
Nonaccrual	1		1		2		4		5		10		1		—		24
Total owner-occupied	2,175		2,334		1,198		906		717		1,769		198		74		9,371
Municipal
Pass	1,230		1,220		816		441		168		437		8		—		4,320
Special Mention	32		6		—		—		—		—		—		—		38
Accruing Substandard	—		—		—		—		—		3		—		—		3
Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal	1,262		1,226		816		441		168		440		8		—		4,361
Total commercial	6,987		5,522		3,072		2,430		1,228		2,568		8,426		262		30,495
Commercial real estate:
Construction and land development
Pass	548		671		455		81		2		2		617		96		2,472
Special Mention	1		1		—		—		—		—		—		—		2
Accruing Substandard	17		—		—		22		—		—		—		—		39
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development	566		672		455		103		2		2		617		96		2,513
Term
Pass	2,861		2,107		1,686		1,012		666		1,229		276		112		9,949
Special Mention	39		21		11		—		4		1		—		—		76
Accruing Substandard	42		2		34		21		53		35		—		—		187
Nonaccrual	—		—		—		4		1		9		—		—		14
Total term	2,942		2,130		1,731		1,037		724		1,274		276		112		10,226
Total commercial real estate	3,508		2,802		2,186		1,140		726		1,276		893		208		12,739

	December 31, 2022
	Term Loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2022		2021		2020		2019		2018		Prior						Total loans
Consumer:
Home equity credit line
Pass	—		—		—		—		—		—		3,265		98		3,363
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		3		—		3
Nonaccrual	—		—		—		—		—		—		8		3		11
Total home equity credit line	—		—		—		—		—		—		3,276		101		3,377
1-4 family residential
Pass	1,913		1,503		1,024		638		381		1,788		—		—		7,247
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		2		—		—		2
Nonaccrual	—		2		2		4		3		26		—		—		37
Total 1-4 family residential	1,913		1,505		1,026		642		384		1,816		—		—		7,286
Construction and other consumer real estate
Pass	583		485		64		19		5		5		—		—		1,161
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	583		485		64		19		5		5		—		—		1,161
Bankcard and other revolving plans
Pass	—		—		—		—		—		—		468		2		470
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		1		—		1
Nonaccrual	—		—		—		—		—		—		—		—		—
Total bankcard and other revolving plans	—		—		—		—		—		—		469		2		471
Other consumer
Pass	68		30		12		8		4		2		—		—		124
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	68		30		12		8		4		2		—		—		124
Total consumer	2,564		2,020		1,102		669		393		1,823		3,745		103		12,419
Total loans	$	13,059	$	10,344	$	6,360	$	4,239	$	2,347	$	5,667	$	13,064	$	573	$	55,653

	December 31, 2021
	Term Loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2021		2020		2019		2018		2017		Prior						Total loans
Commercial:
Commercial and industrial
Pass	$	2,561	$	1,309	$	1,179	$	748	$	354	$	239	$	6,594	$	121	$	13,105
Special Mention	4		17		9		12		1		3		128		1		175
Accruing Substandard	28		22		99		53		31		65		162		3		463
Nonaccrual	14		10		6		3		1		21		51		18		124
Total commercial and industrial	2,607		1,358		1,293		816		387		328		6,935		143		13,867
PPP
Pass	1,317		535		—		—		—		—		—		—		1,852
Nonaccrual	—		3		—		—		—		—		—		—		3
Total PPP	1,317		538		—		—		—		—		—		—		1,855
Leasing
Pass	46		74		70		64		42		19		—		—		315
Special Mention	—		1		4		1		1		—		—		—		7
Accruing Substandard	—		—		—		—		—		5		—		—		5
Nonaccrual	—		—		—		—		—		—		—		—		—
Total leasing	46		75		74		65		43		24		—		—		327
Owner-occupied
Pass	2,420		1,366		1,028		868		695		1,663		177		69		8,286
Special Mention	10		13		19		32		18		50		3		3		148
Accruing Substandard	14		24		41		47		24		79		13		—		242
Nonaccrual	—		4		14		9		9		20		1		—		57
Total owner-occupied	2,444		1,407		1,102		956		746		1,812		194		72		8,733
Municipal
Pass	1,303		963		553		250		327		220		3		—		3,619
Special Mention	—		—		—		—		—		25		—		—		25
Accruing Substandard	—		9		—		—		—		5		—		—		14
Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal	1,303		972		553		250		327		250		3		—		3,658
Total commercial	7,717		4,350		3,022		2,087		1,503		2,414		7,132		215		28,440
Commercial real estate:
Construction and land development
Pass	640		736		515		94		24		2		650		64		2,725
Special Mention	—		—		1		—		—		—		—		—		1
Accruing Substandard	—		3		28		—		—		—		—		—		31
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development	640		739		544		94		24		2		650		64		2,757
Term
Pass	2,407		1,765		1,491		1,066		529		1,401		239		179		9,077
Special Mention	22		39		10		17		8		25		—		4		125
Accruing Substandard	9		9		44		77		14		64		—		2		219
Nonaccrual	—		1		5		1		—		13		—		—		20
Total term	2,438		1,814		1,550		1,161		551		1,503		239		185		9,441
Total commercial real estate	3,078		2,553		2,094		1,255		575		1,505		889		249		12,198

	December 31, 2021
	Term Loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2021		2020		2019		2018		2017		Prior						Total loans
Consumer:
Home equity credit line
Pass	—		—		—		—		—		—		2,903		96		2,999
Special Mention	—		—		—		—		—		—		1		—		1
Accruing Substandard	—		—		—		—		—		—		2		—		2
Nonaccrual	—		—		—		—		—		—		7		7		14
Total home equity credit line	—		—		—		—		—		—		2,913		103		3,016
1-4 family residential
Pass	1,391		1,021		728		484		681		1,691		—		—		5,996
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		1		—		—		1		—		—		2
Nonaccrual	—		3		3		3		9		34		—		—		52
Total 1-4 family residential	1,391		1,024		732		487		690		1,726		—		—		6,050
Construction and other consumer real estate
Pass	295		232		73		27		4		7		—		—		638
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	295		232		73		27		4		7		—		—		638
Bankcard and other revolving plans
Pass	—		—		—		—		—		—		391		3		394
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		1		—		1
Nonaccrual	—		—		—		—		—		—		1		—		1
Total bankcard and other revolving plans	—		—		—		—		—		—		393		3		396
Other consumer
Pass	58		23		17		9		4		2		—		—		113
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	58		23		17		9		4		2		—		—		113
Total consumer	1,744		1,279		822		523		698		1,735		3,306		106		10,213
Total loans	$	12,539	$	8,182	$	5,938	$	3,865	$	2,776	$	5,654	$	11,327	$	570	$	50,851

Modified and Restructured Loans

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral 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 we have granted a concession that we would not otherwise consider, are reported as TDRs.

We consider many factors in determining whether to agree to a loan modification involving concessions, and we seek a solution that will both minimize potential loss to us and attempt to help the borrower. We evaluate

borrowers’ current and forecasted future cash flows, their ability and willingness to make current contractual or proposed modified payments, the value of the underlying collateral (if applicable), the possibility of obtaining additional security or guarantees, and the potential costs related to a repossession or foreclosure and the subsequent sale of the collateral.

TDRs are classified as either accrual or nonaccrual loans. A loan on nonaccrual and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure for a minimum of six months, and there is evidence that such payments can and are likely to continue as agreed. Performance prior to the restructuring, or significant events that coincide with the restructuring, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual at the time of restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan. A TDR loan that specifies an interest rate that, at the time of the restructuring, is greater than or equal to the rate we are willing to accept for a new loan with comparable risk may not be reported as a TDR in the calendar years subsequent to the restructuring if it is in compliance with its modified terms.

Loan modifications provided to borrowers experiencing financial difficulties exclusively related to the COVID-19 pandemic, in which we provide certain short-term modifications or payment deferrals, are not classified as TDRs. The TDRs disclosed subsequently do not include these loan modifications. Other loan modifications above and beyond these short-term modifications or payment deferrals were assessed for TDR classification.

Information on TDRs, including their amortized cost on an accruing and nonaccruing basis by loan class, and by modification type, is summarized in the following schedules:

	December 31, 2022
	Amortized cost basis 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	$	1	$	12	$	—	$	—	$	9	$	28	$	50
Owner-occupied	—		1		—		2		13		12		28
Municipal	—		—		—		—		—		—		—
Total commercial	1		13		—		2		22		40		78
Commercial real estate:
Construction and land development	—		—		—		—		—		8		8
Term	1		27		—		27		28		1		84
Total commercial real estate	1		27		—		27		28		9		92
Consumer:
Home equity credit line	—		1		4		—		—		1		6
1-4 family residential	2		1		2		—		1		15		21
Total consumer loans	2		2		6		—		1		16		27
Total accruing	$	4	$	42	$	6	$	29	$	51	$	65	$	197
Nonaccruing
Commercial:
Commercial and industrial	$	—	$	—	$	—	$	3	$	9	$	3	$	15
Owner-occupied	4		—		—		—		—		4		8
Total commercial	4		—		—		3		9		7		23
Commercial real estate:
Term	—		10		—		—		—		—		10
Total commercial real estate	—		10		—		—		—		—		10
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		1		—		—		1		2		4
Total consumer loans	—		1		1		—		1		2		5
Total nonaccruing	4		11		1		3		10		9		38
Total	$	8	$	53	$	7	$	32	$	61	$	74	$	235

1 Includes 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.

2 Includes TDRs that resulted from a combination of any of the previous modification types.

	December 31, 2021
	Amortized cost basis 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	$	19	$	1	$	—	$	—	$	4	$	7	$	31
Owner-occupied	5		4		—		8		14		12		43
Municipal	—		10		—		—		—		—		10
Total commercial	24		15		—		8		18		19		84
Commercial real estate:
Term	1		29		—		27		41		8		106
Total commercial real estate	1		29		—		27		41		8		106
Consumer:
Home equity credit line	—		1		5		—		—		2		8
1-4 family residential	5		1		2		—		1		14		23
Total consumer loans	5		2		7		—		1		16		31
Total accruing	$	30	$	46	$	7	$	35	$	60	$	43	$	221
Nonaccruing
Commercial:
Commercial and industrial	$	1	$	4	$	—	$	2	$	8	$	49	$	64
Owner-occupied	5		—		—		2		—		13		20
Total commercial	6		4		—		4		8		62		84
Commercial real estate:
Term	—		—		—		11		2		3		16
Total commercial real estate	—		—		—		11		2		3		16
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		1		—		—		3		—		4
Total consumer loans	—		1		1		—		3		—		5
Total nonaccruing	6		5		1		15		13		65		105
Total	$	36	$	51	$	8	$	50	$	73	$	108	$	326

1 Includes 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.

2 Includes TDRs that resulted from a combination of any of the previous modification types.

Unfunded lending commitments on TDRs totaled $7 million and $10 million at December 31, 2022 and December 31, 2021, respectively.

The total amortized cost of all TDRs in which interest rates were modified below market was $63 million at December 31, 2022, and $100 million at December 31, 2021. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.

The net financial impact on interest income due to interest rate modifications below market for accruing TDRs for the years ended December 31, 2022 and 2021 was not significant.

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.

The amortized cost of accruing and nonaccruing TDRs that had a payment default during the year ended December 31, 2022 and December 31, 2021, which were still in default at period end, and were within 12 months or less of being modified as TDRs was approximately $10 million and $3 million, respectively.

Collateral-dependent Loans

When a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

Select information on loans for which the repayment is expected to be provided substantially through the operation or sale of the underlying collateral and the borrower is experiencing financial difficulties, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:

	December 31, 2022
(In millions)	Amortized Cost		Major Types of Collateral	Weighted Average LTV1
Commercial:
Owner-occupied	$	2	Land, Warehouse	29%
Commercial real estate:
Term	1		Multi-family	55%
Consumer:
Home equity credit line	1		Single family residential	13%
1-4 family residential	3		Single family residential	41%
Total	$	7

	December 31, 2021
(In millions)	Amortized Cost		Major Types of Collateral	Weighted Average LTV1
Commercial:
Commercial and industrial	$	27	Corporate assets, Single family residential	55%
Owner-occupied	11		Office building	40%
Commercial real estate:
Term	2		Multi-family, Retail	28%
Consumer:
Home equity credit line	5		Single family residential	45%
1-4 family residential	2		Single family residential	35%
Total	$	47

1 The fair value is based on the most recent appraisal or other collateral evaluation.

Foreclosed Residential Real Estate

At December 31, 2022, and December 31, 2021, we did not have any foreclosed residential real estate property. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was $10 million for both periods.