Loans and asset quality (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Loan Portfolio and Industry Concentrations of Credit Risk

The table below provides the details of our loan portfolio and industry concentrations of credit risk at Dec. 31, 2016 and Dec. 31, 2015.



Loans	Dec. 31,
(in millions)	2016		2015
Domestic:
Financial institutions	$	6,342	$	6,640
Commercial	2,286		2,115
Wealth management loans and mortgages	15,555		13,247
Commercial real estate	4,639		3,899
Lease financings	989		1,007
Other residential mortgages	854		1,055
Overdrafts	1,055		911
Other	1,202		1,137
Margin loans	17,503		19,340
Total domestic	50,425		49,351
Foreign:
Financial institutions	8,347		9,259
Commercial	331		227
Wealth management loans and mortgages	99		100
Commercial real estate	15		46
Lease financings	736		850
Other (primarily overdrafts)	4,418		3,637
Margin loans	87		233
Total foreign	14,033		14,352
Total loans (a)	$	64,458	$	63,703


(a)	Net of unearned income of $527 million at Dec. 31, 2016 and $674 million at Dec. 31, 2015 primarily on domestic and foreign lease financings.

Summary of Transactions in the Allowance for Credit Losses

Transactions in the allowance for credit losses are summarized as follows:



Allowance for credit losses activity for the year ended Dec. 31, 2016											Wealth management loans and mortgages		Other residential mortgages
(in millions)	Commercial		Commercial real estate		Financial institutions			Lease financings			Wealth management loans and mortgages		Other residential mortgages			All Other			Foreign		Total
Beginning balance	$	82	$	59	$	31		$	15		$	19	$	34		$	—		$	35	$	275
Charge-offs	—		—		—			—			—		(2		)	—			—		(2		)
Recoveries	—		—		13			—			—		5			—			1		19
Net recoveries	—		—		13			—			—		3			—			1		17
Provision	—		14		(18		)	(2		)	4		(9		)	—			—		(11		)
Ending balance	$	82	$	73	$	26		$	13		$	23	$	28		$	—		$	36	$	281
Allowance for:
Loan losses	$	25	$	52	$	8		$	13		$	19	$	28		$	—		$	24	$	169
Lending-related commitments	57		21		18			—			4		—			—			12		112
Individually evaluated for impairment:
Loan balance	$	—	$	—	$	—		$	4		$	5	$	—		$	—		$	—	$	9
Allowance for loan losses	—		—		—			2			3		—			—			—		5
Collectively evaluated for impairment:
Loan balance	$	2,286	$	4,639	$	6,342		$	985		$	15,550	$	854		$	19,760	(a)	$	14,033	$	64,449
Allowance for loan losses	25		52		8			11			16		28			—			24		164


(a)	Includes $1,055 million of domestic overdrafts, $17,503 million of margin loans and $1,202 million of other loans at Dec. 31, 2016.



Allowance for credit losses activity for the year ended Dec. 31, 2015											Wealth management loans and mortgages			Other residential mortgages
(in millions)	Commercial		Commercial real estate		Financial institutions			Lease financings			Wealth management loans and mortgages			Other residential mortgages			All Other			Foreign			Total
Beginning balance	$	60	$	50	$	31		$	32		$	22		$	41		$	—		$	44		$	280
Charge-offs	—		—		(170		)	—			—			(2		)	—			—			(172		)
Recoveries	—		—		1			—			—			6			—			—			7
Net (charge-offs) recoveries	—		—		(169		)	—			—			4			—			—			(165		)
Provision	22		9		169			(17		)	(3		)	(11		)	—			(9		)	160
Ending balance	$	82	$	59	$	31		$	15		$	19		$	34		$	—		$	35		$	275
Allowance for:
Loan losses	$	24	$	37	$	9		$	15		$	15		$	34		$	—		$	23		$	157
Lending-related commitments	58		22		22			—			4			—			—			12			118
Individually evaluated for impairment:
Loan balance	$	—	$	1	$	171		$	—		$	8		$	—		$	—		$	—		$	180
Allowance for loan losses	—		1		—			—			1			—			—			—			2
Collectively evaluated for impairment:
Loan balance	$	2,115	$	3,496	$	6,469		$	1,007		$	13,239		$	1,035		$	21,388	(a)	$	14,352		$	63,101
Allowance for loan losses	24		36		9			15			14			34			—			23			155


(a)	Includes $911 million of domestic overdrafts, $19,340 million of margin loans and $1,137 million of other loans at Dec. 31, 2015.



Allowance for credit losses activity for the year ended Dec. 31, 2014													Wealth management loans and mortgages			Other residential mortgages			All Other			Foreign			Total
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings			Wealth management loans and mortgages			Other residential mortgages			All Other			Foreign			Total
Beginning balance	$	83		$	41		$	49		$	37		$	24		$	54		$	—		$	56		$	344
Charge-offs	(12		)	(2		)	—			—			(1		)	(2		)	—			(3		)	(20		)
Recoveries	1			—			1			—			—			2			—			—			4
Net (charge-offs) recoveries	(11		)	(2		)	1			—			(1		)	—			—			(3		)	(16		)
Provision	(12		)	11			(19		)	(5		)	(1		)	(13		)	—			(9		)	(48		)
Ending balance	$	60		$	50		$	31		$	32		$	22		$	41		$	—		$	44		$	280
Allowance for:
Loan losses	$	17		$	32		$	17		$	32		$	17		$	41		$	—		$	35		$	191
Lending-related commitments	43			18			14			—			5			—			—			9			89
Individually evaluated for impairment:
Loan balance	$	—		$	—		$	—		$	—		$	8		$	—		$	—		$	—		$	8
Allowance for loan losses	—			—			—			—			1			—			—			—			1
Collectively evaluated for impairment:
Loan balance	$	1,390		$	2,503		$	5,603		$	1,282		$	11,087		$	1,222		$	22,495	(a)	$	13,521		$	59,103
Allowance for loan losses	17			32			17			32			16			41			—			35			190


(a)	Includes $1,348 million of domestic overdrafts, $20,034 million of margin loans and $1,113 million of other loans at Dec. 31, 2014.

Distribution of Nonperforming Assets

The table below presents the distribution of our nonperforming assets.



Nonperforming assets (in millions)	Dec. 31,
	2016		2015
Nonperforming loans:
Other residential mortgages	$	91	$	102
Wealth management loans and mortgages	8		11
Lease financings	4		—
Commercial real estate	—		2
Financial institutions	—		171
Total nonperforming loans	103		286
Other assets owned	4		6
Total nonperforming assets	$	107	$	292

Schedule of Lost Interest Income

The table below presents the amount of lost interest income.



Lost interest
(in millions)	2016		2015		2014
Amount by which interest income recognized on nonperforming loans exceeded reversals
Total	$	—	$	—	$	1
Foreign	—		—		—
Amount by which interest income would have increased if nonperforming loans at year-end had been performing for the entire year
Total	$	6	$	6	$	7
Foreign	—		—		—

Information about Impaired Loans

The tables below provide information about our impaired loans. We use the discounted cash flow method as the primary method for valuing impaired loans.



Impaired loans	2016				2015				2014
(in millions)	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
Impaired loans with an allowance:
Commercial	$	—	$	—	$	—	$	—	$	11	$	—
Commercial real estate	1		—		1		—		2		—
Wealth management loans and mortgages	5		—		6		—		8		—
Lease financings	3		—		—		—		—		—
Foreign	—		—		—		—		3		—
Total impaired loans with an allowance	9		—		7		—		24		—
Impaired loans without an allowance:
Commercial real estate	1		—		—		—		1		—
Financial institutions	102		—		—		—		—		—
Wealth management loans and mortgages	2		—		2		—		2		—
Total impaired loans without an allowance (a)	105		—		2		—		3		—
Total impaired loans	$	114	$	—	$	9	$	—	$	27	$	—


(a)	When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.



Impaired loans	Dec. 31, 2016						Dec. 31, 2015
(in millions)	Recorded investment		Unpaid principal balance		Related allowance (a)		Recorded investment		Unpaid principal balance		Related allowance (a)
Impaired loans with an allowance:
Commercial real estate	$	—	$	3	$	—	$	1	$	3	$	1
Wealth management loans and mortgages	3		3		3		6		7		1
Lease financings	4		4		2		—		—		—
Total impaired loans with an allowance	7		10		5		7		10		2
Impaired loans without an allowance:
Financial institutions	—		—		N/A		171		312		N/A
Wealth management loans and mortgages	2		2		N/A		2		2		N/A
Total impaired loans without an allowance (b)	2		2		N/A		173		314		N/A
Total impaired loans (c)	$	9	$	12	$	5	$	180	$	324	$	2


(a)	The allowance for impaired loans is included in the allowance for loan losses.


(b)	When the discounted cash flows, collateral value or market price equals or exceeds the carrying value of the loan, then the loan does not require an allowance under the accounting standard related to impaired loans.


(c)	Excludes an aggregate of less than $1 million and $2 million of impaired loans in amounts individually less than $1 million at Dec. 31, 2016 and Dec. 31, 2015, respectively. The allowance for loan loss associated with these loans totaled less than $1 million at both Dec. 31, 2016 and Dec. 31, 2015, respectively.

Information about Past Due Loans

The table below sets forth information about our past due loans.



Past due loans and still accruing interest	Dec. 31, 2016								Dec. 31, 2015
	Days past due						Total past due		Days past due						Total past due
(in millions)	30-59		60-89		>90		Total past due		30-59		60-89		>90		Total past due
Commercial real estate	$	78	$	—	$	—	$	78	$	57	$	11	$	—	$	68
Other residential mortgages	20		6		7		33		22		5		4		31
Financial institutions	1		27		—		28		—		—		—		—
Wealth management loans and mortgages	21		2		—		23		69		2		1		72
Total past due loans	$	120	$	35	$	7	$	162	$	148	$	18	$	5	$	171

Troubled Debt Restructurings

The following table presents TDRs that occurred in 2016 and 2015.



TDRs	2016							2015
		Outstanding recorded investment							Outstanding recorded investment
(dollars in millions)	Number of contracts	Pre-modification			Post-modification			Number of contracts	Pre-modification			Post-modification
Other residential mortgages	70		$	14		$	16	68		$	13		$	16
Wealth management loans and mortgages	2		—			—		4		—			—
Total TDRs	72		$	14		$	16	72		$	13		$	16

Credit Quality Indicators - Commercial Portfolio - Credit Risk Profile by Creditworthiness Category

The following tables set forth information about credit quality indicators.

Commercial loan portfolio



Commercial loan portfolio – Credit risk profile by creditworthiness category	Commercial				Commercial real estate				Financial institutions
	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2016		Dec. 31, 2015
(in millions)	Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2016		Dec. 31, 2015		Dec. 31, 2016		Dec. 31, 2015
Investment grade	$	2,397	$	2,026	$	3,823	$	2,678	$	11,459	$	13,965
Non-investment grade	220		316		831		1,267		3,230		1,934
Total	$	2,617	$	2,342	$	4,654	$	3,945	$	14,689	$	15,899

Credit Quality Indicators - Wealth Management Loans and Mortgages - Credit Risk Profile by Internally Assigned Grade

Wealth management loans and mortgages



Wealth management loans and mortgages – Credit risk profile by internally assigned grade
(in millions)	Dec. 31, 2016		Dec. 31, 2015
Wealth management loans:
Investment grade	$	7,127	$	6,529
Non-investment grade	260		171
Wealth management mortgages	8,267		6,647
Total	$	15,654	$	13,347