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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