Loans and asset quality (Tables)
|
3 Months Ended |
Mar. 31, 2017 |
Receivables [Abstract] |
|
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 March 31, 2017 and Dec. 31, 2016.
| | | | | | | | Loans | March 31, 2017 |
| Dec. 31, 2016 |
| (in millions) | Domestic: | | | Financial institutions | $ | 5,387 |
| $ | 6,342 |
| Commercial | 2,543 |
| 2,286 |
| Wealth management loans and mortgages | 15,909 |
| 15,555 |
| Commercial real estate | 4,698 |
| 4,639 |
| Lease financings | 846 |
| 989 |
| Other residential mortgages | 817 |
| 854 |
| Overdrafts | 673 |
| 1,055 |
| Other | 1,119 |
| 1,202 |
| Margin loans | 16,081 |
| 17,503 |
| Total domestic | 48,073 |
| 50,425 |
| Foreign: | | | Financial institutions | 7,954 |
| 8,347 |
| Commercial | 347 |
| 331 |
| Wealth management loans and mortgages | 114 |
| 99 |
| Commercial real estate | 19 |
| 15 |
| Lease financings | 739 |
| 736 |
| Other (primarily overdrafts) | 3,554 |
| 4,418 |
| Margin loans | 68 |
| 87 |
| Total foreign | 12,795 |
| 14,033 |
| Total loans (a) | $ | 60,868 |
| $ | 64,458 |
|
| | (a) | Net of unearned income of $511 million at March 31, 2017 and $527 million at Dec. 31, 2016 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 quarter ended March 31, 2017 | Wealth management loans and mortgages |
| Other residential mortgages |
| | | | | (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| All Other |
| | Foreign |
| Total |
| Beginning balance | $ | 82 |
| $ | 73 |
| $ | 26 |
| $ | 13 |
| $ | 23 |
| $ | 28 |
| $ | — |
| | $ | 36 |
| $ | 281 |
| Charge-offs | — |
| — |
| — |
| — |
| — |
| (1 | ) | — |
| | — |
| (1 | ) | Recoveries | — |
| — |
| — |
| — |
| — |
| 1 |
| — |
| | — |
| 1 |
| Net recoveries | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | — |
| — |
| Provision | — |
| — |
| (3 | ) | (3 | ) | 3 |
| (3 | ) | — |
| | 1 |
| (5 | ) | Ending balance | $ | 82 |
| $ | 73 |
| $ | 23 |
| $ | 10 |
| $ | 26 |
| $ | 25 |
| $ | — |
| | $ | 37 |
| $ | 276 |
| Allowance for: | | | | | | | | | | | Loan losses | $ | 24 |
| $ | 54 |
| $ | 5 |
| $ | 10 |
| $ | 22 |
| $ | 25 |
| $ | — |
| | $ | 24 |
| $ | 164 |
| Lending-related commitments | 58 |
| 19 |
| 18 |
| — |
| 4 |
| — |
| — |
| | 13 |
| 112 |
| Individually evaluated for impairment: | | | | | | | | | | | Loan balance | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | 5 |
| $ | — |
| $ | — |
| | $ | — |
| $ | 5 |
| Allowance for loan losses | — |
| — |
| — |
| — |
| 3 |
| — |
| — |
| | — |
| 3 |
| Collectively evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 2,543 |
| $ | 4,698 |
| $ | 5,387 |
| $ | 846 |
| $ | 15,904 |
| $ | 817 |
| $ | 17,873 |
| (a) | $ | 12,795 |
| $ | 60,863 |
| Allowance for loan losses | 24 |
| 54 |
| 5 |
| 10 |
| 19 |
| 25 |
| — |
| | 24 |
| 161 |
|
| | (a) | Includes $673 million of domestic overdrafts, $16,081 million of margin loans and $1,119 million of other loans at March 31, 2017. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Allowance for credit losses activity for the quarter ended Dec. 31, 2016 | Wealth management loans and mortgages |
| Other residential mortgages |
| | | | | (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| All Other |
| | Foreign |
| Total |
| Beginning balance | $ | 91 |
| $ | 63 |
| $ | 29 |
| $ | 14 |
| $ | 18 |
| $ | 28 |
| $ | — |
| | $ | 31 |
| $ | 274 |
| Charge-offs | — |
| — |
| — |
| — |
| — |
| (1 | ) | — |
| | — |
| (1 | ) | Recoveries | — |
| — |
| — |
| — |
| — |
| 1 |
| — |
| | — |
| 1 |
| Net recoveries | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | — |
| — |
| Provision | (9 | ) | 10 |
| (3 | ) | (1 | ) | 5 |
| — |
| — |
| | 5 |
| 7 |
| 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 quarter ended March 31, 2016 | Wealth management loans and mortgages |
| Other residential mortgages |
| All Other |
| | Foreign |
| Total |
| (in millions) | Commercial |
| Commercial real estate |
| Financial institutions |
| Lease financings |
| | Beginning balance | $ | 82 |
| $ | 59 |
| $ | 31 |
| $ | 15 |
| $ | 19 |
| $ | 34 |
| $ | — |
| | $ | 35 |
| $ | 275 |
| Charge-offs | — |
| — |
| — |
| — |
| — |
| — |
| — |
| | — |
| — |
| Recoveries | — |
| — |
| — |
| — |
| — |
| 2 |
| — |
| | — |
| 2 |
| Net recoveries | — |
| — |
| — |
| — |
| — |
| 2 |
| — |
| | — |
| 2 |
| Provision | 6 |
| 3 |
| 1 |
| 1 |
| (1 | ) | (4 | ) | — |
| | 4 |
| 10 |
| Ending balance | $ | 88 |
| $ | 62 |
| $ | 32 |
| $ | 16 |
| $ | 18 |
| $ | 32 |
| $ | — |
| | $ | 39 |
| $ | 287 |
| Allowance for: | | | | | | | | | | | Loan losses | $ | 25 |
| $ | 40 |
| $ | 11 |
| $ | 16 |
| $ | 15 |
| $ | 32 |
| $ | — |
| | $ | 23 |
| $ | 162 |
| Lending-related commitments | 63 |
| 22 |
| 21 |
| — |
| 3 |
| — |
| — |
| | 16 |
| 125 |
| Individually evaluated for impairment: | | | | | | | | | | | Loan balance | $ | — |
| $ | 2 |
| $ | 171 |
| $ | 5 |
| $ | 8 |
| $ | — |
| $ | — |
| | $ | — |
| $ | 186 |
| Allowance for loan losses | — |
| 1 |
| — |
| 2 |
| 1 |
| — |
| — |
| | — |
| 4 |
| Collectively evaluated for impairment: | | | | | | | | | | | Loan balance | $ | 2,130 |
| $ | 3,927 |
| $ | 5,415 |
| $ | 973 |
| $ | 13,874 |
| $ | 993 |
| $ | 20,697 |
| (a) | $ | 13,044 |
| $ | 61,053 |
| Allowance for loan losses | 25 |
| 39 |
| 11 |
| 14 |
| 14 |
| 32 |
| — |
| | 23 |
| 158 |
|
| | (a) | Includes $917 million of domestic overdrafts, $18,674 million of margin loans and $1,106 million of other loans at March 31, 2016. |
|
Distribution of Nonperforming Assets |
The table below presents the distribution of our nonperforming assets.
| | | | | | | | | | Nonperforming assets (in millions) | March 31, 2017 |
| Dec. 31, 2016 |
| | | Nonperforming loans: | | | | Other residential mortgages | $ | 88 |
| $ | 91 |
| | Wealth management loans and mortgages | 10 |
| 8 |
| | Lease financings | — |
| 4 |
| | Total nonperforming loans | 98 |
| 103 |
| | Other assets owned | 9 |
| 4 |
| | Total nonperforming assets | $ | 107 |
| $ | 107 |
|
|
Schedule of Lost Interest Income |
The table below presents the amount of lost interest income.
| | | | | | | | | | | Lost interest | | | | (in millions) | 1Q17 |
| 4Q16 |
| 1Q16 |
| Amount by which interest income recognized on nonperforming loans exceeded reversals | $ | — |
| $ | — |
| $ | — |
| Amount by which interest income would have increased if nonperforming loans at period end had been performing for the entire period | $ | 1 |
| $ | 1 |
| $ | 1 |
|
|
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 | Quarter ended | | March 31, 2017 | | Dec. 31, 2016 | | March 31, 2016 | (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 real estate | $ | — |
| $ | — |
| | $ | — |
| $ | — |
| | $ | 1 |
| $ | — |
| Wealth management loans and mortgages | 3 |
| — |
| | 2 |
| — |
| | 6 |
| — |
| Lease financings | 2 |
| — |
| | 4 |
| — |
| | 2 |
| — |
| Total impaired loans with an allowance | 5 |
| — |
| | 6 |
| — |
| | 9 |
| — |
| Impaired loans without an allowance: | | | | | | | | | Commercial real estate | — |
| — |
| | — |
| — |
| | 1 |
| — |
| Financial institutions | — |
| — |
| | — |
| — |
| | 171 |
| — |
| Wealth management loans and mortgages | 2 |
| — |
| | 3 |
| — |
| | 2 |
| — |
| Total impaired loans without an allowance (a) | 2 |
| — |
| | 3 |
| — |
| | 174 |
| — |
| Total impaired loans | $ | 7 |
| $ | — |
| | $ | 9 |
| $ | — |
| | $ | 183 |
| $ | — |
|
| | (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 | March 31, 2017 | | Dec. 31, 2016 | (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 |
| $ | — |
| | $ | — |
| $ | 3 |
| $ | — |
| Wealth management loans and mortgages | 3 |
| 3 |
| 3 |
| | 3 |
| 3 |
| 3 |
| Lease financings | — |
| — |
| — |
| | 4 |
| 4 |
| 2 |
| Total impaired loans with an allowance | 3 |
| 6 |
| 3 |
| | 7 |
| 10 |
| 5 |
| Impaired loans without an allowance: | | | | | | | | Wealth management loans and mortgages | 2 |
| 2 |
| N/A |
| | 2 |
| 2 |
| N/A |
| Total impaired loans without an allowance (b) | 2 |
| 2 |
| N/A |
| | 2 |
| 2 |
| N/A |
| Total impaired loans (c) | $ | 5 |
| $ | 8 |
| $ | 3 |
| | $ | 9 |
| $ | 12 |
| $ | 5 |
|
| | (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 of impaired loans in amounts individually less than $1 million at both March 31, 2017 and Dec. 31, 2016, respectively. The allowance for loan loss associated with these loans totaled less than $1 million at both March 31, 2017 and Dec. 31, 2016, respectively. |
|
Information about Past Due Loans |
The table below sets forth information about our past due loans.
| | | | | | | | | | | | | | | | | | | | | | | | | | | Past due loans and still accruing interest | March 31, 2017 | | Dec. 31, 2016 | | Days past due | Total past due |
| | Days past due | Total past due |
| (in millions) | 30-59 |
| 60-89 |
| >90 |
| 30-59 |
| 60-89 |
| >90 |
| Wealth management loans and mortgages | $ | 25 |
| $ | 3 |
| $ | — |
| $ | 28 |
| | $ | 21 |
| $ | 2 |
| $ | — |
| $ | 23 |
| Commercial real estate | 21 |
| — |
| — |
| 21 |
| | 78 |
| — |
| — |
| 78 |
| Other residential mortgages | 13 |
| 2 |
| 4 |
| 19 |
| | 20 |
| 6 |
| 7 |
| 33 |
| Financial institutions | — |
| — |
| — |
| — |
| | 1 |
| 27 |
| — |
| 28 |
| Total past due loans | $ | 59 |
| $ | 5 |
| $ | 4 |
| $ | 68 |
|
| $ | 120 |
| $ | 35 |
| $ | 7 |
| $ | 162 |
|
|
Troubled Debt Restructurings |
The following table presents TDRs that occurred in the first quarter of 2017, fourth quarter of 2016 and first quarter of 2016.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TDRs | 1Q17 | | 4Q16 | | 1Q16 | | | Outstanding recorded investment | | | Outstanding recorded investment | | | Outstanding recorded investment | (dollars in millions) | Number of contracts |
| Pre-modification | | Post-modification | | | Number of contracts |
| Pre-modification | | Post-modification | | | Number of contracts |
| Pre-modification | | Post-modification | | Other residential mortgages | 6 |
| | $ | 2 |
| | $ | 2 |
| | 17 |
| | $ | 3 |
| | $ | 4 |
| | 13 |
| | $ | 3 |
| | $ | 3 |
| Wealth management loans and mortgages | 1 |
| | 4 |
| | 4 |
| | — |
| | — |
| | — |
| | 2 |
| | — |
| | — |
| Total TDRs | 7 |
| | $ | 6 |
| | $ | 6 |
| | 17 |
| | $ | 3 |
| | $ | 4 |
| | 15 |
| | $ | 3 |
| | $ | 3 |
|
|
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 | March 31, 2017 |
| Dec. 31, 2016 |
| | March 31, 2017 |
| Dec. 31, 2016 |
| | March 31, 2017 |
| Dec. 31, 2016 |
| (in millions) | | | Investment grade | $ | 2,697 |
| $ | 2,397 |
| | $ | 3,903 |
| $ | 3,823 |
| | $ | 10,255 |
| $ | 11,459 |
| Non-investment grade | 193 |
| 220 |
| | 814 |
| 831 |
| | 3,086 |
| 3,230 |
| Total | $ | 2,890 |
| $ | 2,617 |
| | $ | 4,717 |
| $ | 4,654 |
| | $ | 13,341 |
| $ | 14,689 |
|
|
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) | March 31, 2017 |
| Dec. 31, 2016 |
| Wealth management loans: | | | Investment grade | $ | 7,300 |
| $ | 7,127 |
| Non-investment grade | 155 |
| 260 |
| Wealth management mortgages | 8,568 |
| 8,267 |
| Total | $ | 16,023 |
| $ | 15,654 |
|
|