| Credit Quality And Allowance For Credit Losses |
CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES The following table presents an aging analysis of the recorded balance of loans. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loans Past Due and Still Accruing | | | | | | | (in millions) | 30-59 Days | | 60-89 Days | | 90 Days or More | | Total | | Nonaccrual Loans | | Current Loans (c) | | Total Loans | June 30, 2014 | | | | | | | | | | | | | | Business loans: | | | | | | | | | | | | | | Commercial | $ | 12 |
| | $ | 26 |
| | $ | — |
| | $ | 38 |
| | $ | 72 |
| | $ | 30,876 |
| | $ | 30,986 |
| Real estate construction: | | | | | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | — |
| | — |
| | — |
| | 18 |
| | 1,583 |
| | 1,601 |
| Other business lines (b) | 25 |
| | — |
| | — |
| | 25 |
| | 1 |
| | 312 |
| | 338 |
| Total real estate construction | 25 |
| | — |
| | — |
| | 25 |
| | 19 |
| | 1,895 |
| | 1,939 |
| Commercial mortgage: | | | | | | | | | | | | | | Commercial Real Estate business line (a) | 5 |
| | 2 |
| | — |
| | 7 |
| | 57 |
| | 1,712 |
| | 1,776 |
| Other business lines (b) | 19 |
| | 8 |
| | 5 |
| | 32 |
| | 99 |
| | 6,840 |
| | 6,971 |
| Total commercial mortgage | 24 |
| | 10 |
| | 5 |
| | 39 |
| | 156 |
| | 8,552 |
| | 8,747 |
| Lease financing | — |
| | — |
| | — |
| | — |
| | — |
| | 822 |
| | 822 |
| International | — |
| | — |
| | 1 |
| | 1 |
| | — |
| | 1,351 |
| | 1,352 |
| Total business loans | 61 |
| | 36 |
| | 6 |
| | 103 |
| | 247 |
| | 43,496 |
| | 43,846 |
| Retail loans: | | | | | | | | | | | | | | Residential mortgage | 9 |
| | 2 |
| | — |
| | 11 |
| | 45 |
| | 1,719 |
| | 1,775 |
| Consumer: | | | | | | | | | | | | | | Home equity | 7 |
| | 2 |
| | 1 |
| | 10 |
| | 32 |
| | 1,532 |
| | 1,574 |
| Other consumer | 1 |
| | — |
| | — |
| | 1 |
| | 2 |
| | 684 |
| | 687 |
| Total consumer | 8 |
| | 2 |
| | 1 |
| | 11 |
| | 34 |
| | 2,216 |
| | 2,261 |
| Total retail loans | 17 |
| | 4 |
| | 1 |
| | 22 |
| | 79 |
| | 3,935 |
| | 4,036 |
| Total loans | $ | 78 |
| | $ | 40 |
| | $ | 7 |
| | $ | 125 |
| | $ | 326 |
| | $ | 47,431 |
| | $ | 47,882 |
| December 31, 2013 | | | | | | | | | | | | | | Business loans: | | | | | | | | | | | | | | Commercial | $ | 36 |
| | $ | 17 |
| | $ | 4 |
| | $ | 57 |
| | $ | 81 |
| | $ | 28,677 |
| | $ | 28,815 |
| Real estate construction: | | | | | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | — |
| | — |
| | — |
| | 20 |
| | 1,427 |
| | 1,447 |
| Other business lines (b) | — |
| | — |
| | — |
| | — |
| | 1 |
| | 314 |
| | 315 |
| Total real estate construction | — |
| | — |
| | — |
| | — |
| | 21 |
| | 1,741 |
| | 1,762 |
| Commercial mortgage: | | | | | | | | | | | | | | Commercial Real Estate business line (a) | 9 |
| | 1 |
| | — |
| | 10 |
| | 51 |
| | 1,617 |
| | 1,678 |
| Other business lines (b) | 27 |
| | 6 |
| | 4 |
| | 37 |
| | 105 |
| | 6,967 |
| | 7,109 |
| Total commercial mortgage | 36 |
| | 7 |
| | 4 |
| | 47 |
| | 156 |
| | 8,584 |
| | 8,787 |
| Lease financing | — |
| | — |
| | — |
| | — |
| | — |
| | 845 |
| | 845 |
| International | — |
| | — |
| | 3 |
| | 3 |
| | 4 |
| | 1,320 |
| | 1,327 |
| Total business loans | 72 |
| | 24 |
| | 11 |
| | 107 |
| | 262 |
| | 41,167 |
| | 41,536 |
| Retail loans: | | | | | | | | | | | | | | Residential mortgage | 15 |
| | 3 |
| | — |
| | 18 |
| | 53 |
| | 1,626 |
| | 1,697 |
| Consumer: | | | | | | | | | | | | | | Home equity | 6 |
| | 2 |
| | — |
| | 8 |
| | 33 |
| | 1,476 |
| | 1,517 |
| Other consumer | 4 |
| | 1 |
| | 5 |
| | 10 |
| | 2 |
| | 708 |
| | 720 |
| Total consumer | 10 |
| | 3 |
| | 5 |
| | 18 |
| | 35 |
| | 2,184 |
| | 2,237 |
| Total retail loans | 25 |
| | 6 |
| | 5 |
| | 36 |
| | 88 |
| | 3,810 |
| | 3,934 |
| Total loans | $ | 97 |
| | $ | 30 |
| | $ | 16 |
| | $ | 143 |
| | $ | 350 |
| | $ | 44,977 |
| | $ | 45,470 |
|
| | (a) | Primarily loans to real estate developers. |
| | (b) | Primarily loans secured by owner-occupied real estate. |
| | (c) | Included purchased credit-impaired (PCI) loans with a total carrying value of $3 million at June 30, 2014 and $5 million at December 31, 2013. |
The following table presents loans by credit quality indicator, based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics. | | | | | | | | | | | | | | | | | | | | | | Internally Assigned Rating | | | (in millions) | Pass (a) | | Special Mention (b) | | Substandard (c) | | Nonaccrual (d) | | Total | June 30, 2014 | | | | | | | | | | Business loans: | | | | | | | | | | Commercial | $ | 29,547 |
| | $ | 600 |
| | $ | 767 |
| | $ | 72 |
| | $ | 30,986 |
| Real estate construction: | | | | | | | | | | Commercial Real Estate business line (e) | 1,560 |
| | 23 |
| | — |
| | 18 |
| | 1,601 |
| Other business lines (f) | 337 |
| | — |
| | — |
| | 1 |
| | 338 |
| Total real estate construction | 1,897 |
| | 23 |
| | — |
| | 19 |
| | 1,939 |
| Commercial mortgage: | | | | | | | | | | Commercial Real Estate business line (e) | 1,609 |
| | 63 |
| | 47 |
| | 57 |
| | 1,776 |
| Other business lines (f) | 6,555 |
| | 129 |
| | 188 |
| | 99 |
| | 6,971 |
| Total commercial mortgage | 8,164 |
| | 192 |
| | 235 |
| | 156 |
| | 8,747 |
| Lease financing | 818 |
| | 2 |
| | 2 |
| | — |
| | 822 |
| International | 1,334 |
| | 9 |
| | 9 |
| | — |
| | 1,352 |
| Total business loans | 41,760 |
| | 826 |
| | 1,013 |
| | 247 |
| | 43,846 |
| Retail loans: | | | | | | | | | | Residential mortgage | 1,721 |
| | 3 |
| | 6 |
| | 45 |
| | 1,775 |
| Consumer: | | | | | | | | | | Home equity | 1,532 |
| | 3 |
| | 7 |
| | 32 |
| | 1,574 |
| Other consumer | 681 |
| | 3 |
| | 1 |
| | 2 |
| | 687 |
| Total consumer | 2,213 |
| | 6 |
| | 8 |
| | 34 |
| | 2,261 |
| Total retail loans | 3,934 |
| | 9 |
| | 14 |
| | 79 |
| | 4,036 |
| Total loans | $ | 45,694 |
| | $ | 835 |
| | $ | 1,027 |
| | $ | 326 |
| | $ | 47,882 |
| December 31, 2013 | | | | | | | | | | Business loans: | | | | | | | | | | Commercial | $ | 27,470 |
| | $ | 590 |
| | $ | 674 |
| | $ | 81 |
| | $ | 28,815 |
| Real estate construction: | | | | | | | | | | Commercial Real Estate business line (e) | 1,399 |
| | 13 |
| | 15 |
| | 20 |
| | 1,447 |
| Other business lines (f) | 314 |
| | — |
| | — |
| | 1 |
| | 315 |
| Total real estate construction | 1,713 |
| | 13 |
| | 15 |
| | 21 |
| | 1,762 |
| Commercial mortgage: | | | | | | | | | | Commercial Real Estate business line (e) | 1,474 |
| | 92 |
| | 61 |
| | 51 |
| | 1,678 |
| Other business lines (f) | 6,596 |
| | 145 |
| | 263 |
| | 105 |
| | 7,109 |
| Total commercial mortgage | 8,070 |
| | 237 |
| | 324 |
| | 156 |
| | 8,787 |
| Lease financing | 841 |
| | 3 |
| | 1 |
| | — |
| | 845 |
| International | 1,298 |
| | 7 |
| | 18 |
| | 4 |
| | 1,327 |
| Total business loans | 39,392 |
| | 850 |
| | 1,032 |
| | 262 |
| | 41,536 |
| Retail loans: | | | | | | | | | | Residential mortgage | 1,635 |
| | 3 |
| | 6 |
| | 53 |
| | 1,697 |
| Consumer: | | | | | | | | | | Home equity | 1,475 |
| | 4 |
| | 5 |
| | 33 |
| | 1,517 |
| Other consumer | 708 |
| | 3 |
| | 7 |
| | 2 |
| | 720 |
| Total consumer | 2,183 |
| | 7 |
| | 12 |
| | 35 |
| | 2,237 |
| Total retail loans | 3,818 |
| | 10 |
| | 18 |
| | 88 |
| | 3,934 |
| Total loans | $ | 43,210 |
| | $ | 860 |
| | $ | 1,050 |
| | $ | 350 |
| | $ | 45,470 |
|
| | (a) | Includes all loans not included in the categories of special mention, substandard or nonaccrual. |
| | (b) | Special mention loans are accruing loans that have potential credit weaknesses that deserve management’s close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. |
| | (c) | Substandard loans are accruing loans that have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. PCI loans are included in the substandard category. This category is generally consistent with the "substandard" category as defined by regulatory authorities. |
| | (d) | Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information regarding nonaccrual loans, refer to the Nonperforming Assets subheading in Note 1 - Basis of Presentation and Accounting Policies - on page F-58 in the Corporation's 2013 Annual Report. A significant majority of nonaccrual loans are generally consistent with the "substandard" category and the remainder are generally consistent with the "doubtful" category as defined by regulatory authorities. |
| | (e) | Primarily loans to real estate developers. |
| | (f) | Primarily loans secured by owner-occupied real estate. |
The following table summarizes nonperforming assets. | | | | | | | | | (in millions) | June 30, 2014 | | December 31, 2013 | Nonaccrual loans | $ | 326 |
| | $ | 350 |
| Reduced-rate loans (a) | 21 |
| | 24 |
| Total nonperforming loans | 347 |
| | 374 |
| Foreclosed property | 13 |
| | 9 |
| Total nonperforming assets | $ | 360 |
| | $ | 383 |
|
| | (a) | Reduced-rate business loans totaled $4 million at both June 30, 2014 and December 31, 2013, and reduced-rate retail loans totaled $17 million and $20 million at June 30, 2014 and December 31, 2013, respectively. |
Allowance for Credit Losses The following table details the changes in the allowance for loan losses and related loan amounts. | | | | | | | | | | | | | | | | | | | | | | | | | | 2014 | | 2013 | (in millions) | Business Loans | | Retail Loans | | Total | | Business Loans | | Retail Loans | | Total | Three Months Ended June 30 | | | | | | | | | | | | Allowance for loan losses: | | | | | | | | | | | | Balance at beginning of period | $ | 530 |
| | $ | 64 |
| | $ | 594 |
| | $ | 544 |
| | $ | 73 |
| | $ | 617 |
| Loan charge-offs | (24 | ) | | (4 | ) | | (28 | ) | | (30 | ) | | (5 | ) | | (35 | ) | Recoveries on loans previously charged-off | 15 |
| | 4 |
| | 19 |
| | 15 |
| | 3 |
| | 18 |
| Net loan charge-offs | (9 | ) | | — |
| | (9 | ) | | (15 | ) | | (2 | ) | | (17 | ) | Provision for loan losses | 7 |
| | (1 | ) | | 6 |
| | 13 |
| | — |
| | 13 |
| Balance at end of period | $ | 528 |
| | $ | 63 |
| | $ | 591 |
| | $ | 542 |
| | $ | 71 |
| | $ | 613 |
| | | | | | | | | | | | | Six Months Ended June 30 | | | | | | | | | | | | Allowance for loan losses: | | | | | | | | | | | | Balance at beginning of period | $ | 531 |
| | $ | 67 |
| | $ | 598 |
| | $ | 552 |
| | $ | 77 |
| | $ | 629 |
| Loan charge-offs | (51 | ) | | (7 | ) | | (58 | ) | | (64 | ) | | (9 | ) | | (73 | ) | Recoveries on loans previously charged-off | 31 |
| | 6 |
| | 37 |
| | 27 |
| | 5 |
| | 32 |
| Net loan charge-offs | (20 | ) | | (1 | ) | | (21 | ) | | (37 | ) | | (4 | ) | | (41 | ) | Provision for loan losses | 17 |
| | (3 | ) | | 14 |
| | 27 |
| | (2 | ) | | 25 |
| Balance at end of period | $ | 528 |
| | $ | 63 |
| | $ | 591 |
| | $ | 542 |
| | $ | 71 |
| | $ | 613 |
| | | | | | | | | | | | | As a percentage of total loans | 1.21 | % | | 1.55 | % | | 1.23 | % | | 1.30 | % | | 1.91 | % | | 1.35 | % | | | | | | | | | | | | | June 30 | | | | | | | | | | | | Allowance for loan losses: | | | | | | | | | | | | Individually evaluated for impairment | $ | 39 |
| | $ | — |
| | $ | 39 |
| | $ | 56 |
| | $ | — |
| | $ | 56 |
| Collectively evaluated for impairment | 489 |
| | 63 |
| | 552 |
| | 486 |
| | 71 |
| | 557 |
| Total allowance for loan losses | $ | 528 |
| | $ | 63 |
| | $ | 591 |
| | $ | 542 |
| | $ | 71 |
| | $ | 613 |
| Loans: | | | | | | | | | | | | Individually evaluated for impairment | $ | 215 |
| | $ | 45 |
| | $ | 260 |
| | $ | 314 |
| | $ | 42 |
| | $ | 356 |
| Collectively evaluated for impairment | 43,631 |
| | 3,988 |
| | 47,619 |
| | 41,390 |
| | 3,688 |
| | 45,078 |
| PCI loans (a) | — |
| | 3 |
| | 3 |
| | 20 |
| | 5 |
| | 25 |
| Total loans evaluated for impairment | $ | 43,846 |
| | $ | 4,036 |
| | $ | 47,882 |
| | $ | 41,724 |
| | $ | 3,735 |
| | $ | 45,459 |
|
(a) No allowance for loan losses was required for PCI loans at June 30, 2014 and 2013. Changes in the allowance for credit losses on lending-related commitments, included in "accrued expenses and other liabilities" on the consolidated balance sheets, are summarized in the following table. | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | (in millions) | 2014 | | 2013 | | 2014 | | 2013 | Balance at beginning of period | $ | 37 |
| | $ | 36 |
| | $ | 36 |
| | $ | 32 |
| Provision for credit losses on lending-related commitments | 5 |
| | — |
| | 6 |
| | 4 |
| Balance at end of period | $ | 42 |
| | $ | 36 |
| | $ | 42 |
| | $ | 36 |
|
Individually Evaluated Impaired Loans The following table presents additional information regarding individually evaluated impaired loans. | | | | | | | | | | | | | | | | | | | | | | Recorded Investment In: | | | | | (in millions) | Impaired Loans with No Related Allowance | | Impaired Loans with Related Allowance | | Total Impaired Loans | | Unpaid Principal Balance | | Related Allowance for Loan Losses | June 30, 2014 | | | | | | | | | | Business loans: | | | | | | | | | | Commercial | $ | 3 |
| | $ | 58 |
| | $ | 61 |
| | $ | 92 |
| | $ | 11 |
| Real estate construction: | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | 18 |
| | 18 |
| | 21 |
| | 2 |
| Other business lines (b) | — |
| | — |
| | — |
| | 1 |
| | — |
| Total real estate construction | — |
| | 18 |
| | 18 |
| | 22 |
| | 2 |
| Commercial mortgage: | | | | | | | | | | Commercial Real Estate business line (a) | 7 |
| | 55 |
| | 62 |
| | 106 |
| | 12 |
| Other business lines (b) | 2 |
| | 70 |
| | 72 |
| | 96 |
| | 14 |
| Total commercial mortgage | 9 |
| | 125 |
| | 134 |
| | 202 |
| | 26 |
| International | 2 |
| | — |
| | 2 |
| | 2 |
| | — |
| Total business loans | 14 |
| | 201 |
| | 215 |
| | 318 |
| | 39 |
| Retail loans: | | | | | | | | | | Residential mortgage | 30 |
| | — |
| | 30 |
| | 35 |
| | — |
| Consumer: | | | | | | | | | | Home equity | 10 |
| | — |
| | 10 |
| | 15 |
| | — |
| Other consumer | 5 |
| | — |
| | 5 |
| | 5 |
| | — |
| Total consumer | 15 |
| | — |
| | 15 |
| | 20 |
| | — |
| Total retail loans (c) | 45 |
| | — |
| | 45 |
| | 55 |
| | — |
| Total individually evaluated impaired loans | $ | 59 |
| | $ | 201 |
| | $ | 260 |
| | $ | 373 |
| | $ | 39 |
| December 31, 2013 | | | | | | | | | | Business loans: | | | | | | | | | | Commercial | $ | 10 |
| | $ | 64 |
| | $ | 74 |
| | $ | 121 |
| | $ | 26 |
| Real estate construction: | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | 20 |
| | 20 |
| | 24 |
| | 3 |
| Other business lines (b) | — |
| | 1 |
| | 1 |
| | 1 |
| | — |
| Total real estate construction | — |
| | 21 |
| | 21 |
| | 25 |
| | 3 |
| Commercial mortgage: | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | 60 |
| | 60 |
| | 104 |
| | 12 |
| Other business lines (b) | 1 |
| | 63 |
| | 64 |
| | 90 |
| | 15 |
| Total commercial mortgage | 1 |
| | 123 |
| | 124 |
| | 194 |
| | 27 |
| International | — |
| | 4 |
| | 4 |
| | 4 |
| | 1 |
| Total business loans | 11 |
| | 212 |
| | 223 |
| | 344 |
| | 57 |
| Retail loans: | | | | | | | | | | Residential mortgage | 35 |
| | — |
| | 35 |
| | 42 |
| | — |
| Consumer: | | | | | | | | | | Home equity | 12 |
| | — |
| | 12 |
| | 17 |
| | — |
| Other consumer | 4 |
| | — |
| | 4 |
| | 12 |
| | — |
| Total consumer | 16 |
| | — |
| | 16 |
| | 29 |
| | — |
| Total retail loans (c) | 51 |
| | — |
| | 51 |
| | 71 |
| | — |
| Total individually evaluated impaired loans | $ | 62 |
| | $ | 212 |
| | $ | 274 |
| | $ | 415 |
| | $ | 57 |
|
| | (a) | Primarily loans to real estate developers. |
| | (b) | Primarily loans secured by owner-occupied real estate. |
| | (c) | Individually evaluated retail loans had no related allowance for loan losses, primarily due to policy changes which resulted in direct write-downs of restructured retail loans. |
The following table presents information regarding average individually evaluated impaired loans and the related interest recognized. Interest income recognized for the period primarily related to reduced-rate loans. | | | | | | | | | | | | | | | | | | Individually Evaluated Impaired Loans | | 2014 | | 2013 | (in millions) | Average Balance for the Period | | Interest Income Recognized for the Period | | Average Balance for the Period | | Interest Income Recognized for the Period | Three Months Ended June 30 | | | | | | | | Business loans: | | | | | | | | Commercial | $ | 56 |
| | $ | — |
| | $ | 103 |
| | $ | 1 |
| Real estate construction: | | | | | | | | Commercial Real Estate business line (a) | 17 |
| | — |
| | 26 |
| | — |
| Commercial mortgage: | | | | | | | | Commercial Real Estate business line (a) | 63 |
| | — |
| | 87 |
| | — |
| Other business lines (b) | 71 |
| | 1 |
| | 119 |
| | 1 |
| Total commercial mortgage | 134 |
| | 1 |
| | 206 |
| | 1 |
| International | 2 |
| | — |
| | — |
| | — |
| Total business loans | 209 |
| | 1 |
| | 335 |
| | 2 |
| Retail loans: | | | | | | | | Residential mortgage | 31 |
| | — |
| | 33 |
| | — |
| Consumer loans: | | | | | | | | Home equity | 12 |
| | — |
| | 5 |
| | — |
| Other consumer | 4 |
| | — |
| | 4 |
| | — |
| Total consumer | 16 |
| | — |
| | 9 |
| | — |
| Total retail loans | 47 |
| | — |
| | 42 |
| | — |
| Total individually evaluated impaired loans | $ | 256 |
| | $ | 1 |
| | $ | 377 |
| | $ | 2 |
| Six Months Ended June 30 | | | | | | | | Business loans: | | | | | | | | Commercial | $ | 62 |
| | $ | — |
| | $ | 108 |
| | $ | 2 |
| Real estate construction: | | | | | | | | Commercial Real Estate business line (a) | 18 |
| | — |
| | 26 |
| | — |
| Commercial mortgage: | | | | | | | | Commercial Real Estate business line (a) | 62 |
| | — |
| | 91 |
| | — |
| Other business lines (b) | 70 |
| | 2 |
| | 120 |
| | 1 |
| Total commercial mortgage | 132 |
| | 2 |
| | 211 |
| | 1 |
| Lease financing | — |
| | — |
| | 1 |
| | — |
| International | 2 |
| | — |
| | — |
| | — |
| Total business loans | 214 |
| | 2 |
| | 346 |
| | 3 |
| Retail loans: | | | | | | | | Residential mortgage | 32 |
| | — |
| | 35 |
| | — |
| Consumer: | | | | | | | | Home equity | 12 |
| | — |
| | 6 |
| | — |
| Other consumer | 4 |
| | — |
| | 4 |
| | — |
| Total consumer | 16 |
| | — |
| | 10 |
| | — |
| Total retail loans | 48 |
| | — |
| | 45 |
| | — |
| Total individually evaluated impaired loans | $ | 262 |
| | $ | 2 |
| | $ | 391 |
| | $ | 3 |
|
| | (a) | Primarily loans to real estate developers. |
| | (b) | Primarily loans secured by owner-occupied real estate. |
Troubled Debt Restructurings The following tables detail the recorded balance at June 30, 2014 and 2013 of loans considered to be TDRs that were restructured during the three- and six-month periods ended June 30, 2014 and 2013, by type of modification. In cases of loans with more than one type of modification, the loans were categorized based on the most significant modification. | | | | | | | | | | | | | | | | | | | | | | | | | | | 2014 | | 2013 | | Type of Modification | | | Type of Modification | | (in millions) | Principal Deferrals (a) | Interest Rate Reductions | Total Modifications | | Principal Deferrals (a) | Interest Rate Reductions | AB Note Restructures (b) | Total Modifications | Three Months Ended June 30 | | | | | | | | | | | Business loans: | | | | | | | | | | | Commercial | $ | — |
| | $ | — |
| $ | — |
| | $ | 4 |
| | $ | — |
| $ | 9 |
| $ | 13 |
| Commercial mortgage: | | | | | | | | | | | Commercial Real Estate business line (c) | — |
| | — |
| — |
| | 5 |
| | — |
| — |
| 5 |
| Other business lines (d) | — |
| | — |
| — |
| | 5 |
| | — |
| — |
| 5 |
| Total commercial mortgage | — |
| | — |
| — |
| | 10 |
| | — |
| — |
| 10 |
| Total business loans | — |
| | — |
| — |
| | 14 |
| | — |
| 9 |
| 23 |
| Retail loans: | | | | | | | | | | | Residential mortgage | — |
| | — |
| — |
| | 1 |
| (e) | 1 |
| — |
| 2 |
| Consumer: | | | | | | | | | | | Home equity | — |
|
| 1 |
| 1 |
| | 1 |
| (e) | 1 |
| — |
| 2 |
| Total retail loans | — |
| | 1 |
| 1 |
| | 2 |
| | 2 |
| — |
| 4 |
| Total loans | $ | — |
| | $ | 1 |
| $ | 1 |
| | $ | 16 |
| | $ | 2 |
| $ | 9 |
| $ | 27 |
| Six Months Ended June 30 | | | | | | | | | | | Business loans: | | | | | | | | | | | Commercial | $ | 1 |
| | $ | — |
| $ | 1 |
| | $ | 11 |
| | $ | — |
| $ | 9 |
| $ | 20 |
| Commercial mortgage: | | | | | | | | | | | Commercial Real Estate business line (c) | — |
| | — |
| — |
| | 21 |
| | — |
| — |
| 21 |
| Other business lines (d) | 8 |
| | — |
| 8 |
| | 11 |
| | — |
| 10 |
| 21 |
| Total commercial mortgage | 8 |
| | — |
| 8 |
| | 32 |
| | — |
| 10 |
| 42 |
| International | 1 |
| | — |
| 1 |
| | — |
| | — |
| — |
| — |
| Total business loans | 10 |
| | — |
| 10 |
| | 43 |
| | — |
| 19 |
| 62 |
| Retail loans: | | | | | | | | | | | Residential mortgage | — |
| | — |
| — |
| | 1 |
| (e) | 1 |
| — |
| 2 |
| Consumer: | | | | | | | | | | | Home equity | — |
| | 2 |
| 2 |
| | 2 |
| (e) | 1 |
| — |
| 3 |
| Other consumer | — |
| | — |
| — |
| | 1 |
| (e) | — |
| — |
| 1 |
| Total consumer | — |
| | 2 |
| 2 |
| | 3 |
| | 1 |
| — |
| 4 |
| Total retail loans | — |
| | 2 |
| 2 |
|
| 4 |
| | 2 |
| — |
| 6 |
| Total loans | $ | 10 |
| | $ | 2 |
| $ | 12 |
| | $ | 47 |
| | $ | 2 |
| $ | 19 |
| $ | 68 |
|
| | (a) | Primarily represents loan balances where terms were extended 90 days or more at or above contractual interest rates. |
| | (b) | Loan restructurings whereby the original loan is restructured into two notes: an "A" note, which generally reflects the portion of the modified loan which is expected to be collected; and a "B" note, which is either fully charged off or exchanged for an equity interest. |
| | (c) | Primarily loans to real estate developers. |
| | (d) | Primarily loans secured by owner-occupied real estate. |
| | (e) | Includes bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt. |
At June 30, 2014 and December 31, 2013, commitments to lend additional funds to borrowers whose terms have been modified in TDRs totaled zero and $4 million, respectively. The majority of the modifications considered to be TDRs that occurred during the six months ended June 30, 2014 and 2013 were principal deferrals. The Corporation charges interest on principal balances outstanding during deferral periods. Additionally, none of the modifications involved forgiveness of principal. As a result, the current and future financial effects of the recorded balance of loans considered to be TDRs that were restructured during the six months ended June 30, 2014 and 2013 were insignificant. On an ongoing basis, the Corporation monitors the performance of modified loans to their restructured terms. In the event of a subsequent default, the allowance for loan losses continues to be reassessed on the basis of an individual evaluation of the loan. The following table presents information regarding the recorded balance at June 30, 2014 and 2013 of loans modified by principal deferral during the twelve months ended June 30, 2014 and 2013, and those principal deferrals which experienced a subsequent default during the three- and six-month periods ended June 30, 2014 and 2013. For principal deferrals, incremental deterioration in the credit quality of the loan, represented by a downgrade in the risk rating of the loan, for example, due to missed interest payments or a reduction of collateral value, is considered a subsequent default. | | | | | | | | | | | | | | | | | | | | | | | | 2014 | | 2013 | (in millions) | Balance at June 30 | Subsequent Default in the Three Months Ended June 30 | Subsequent Default in the Six Months Ended June 30 | | Balance at June 30 | Subsequent Default in the Three Months Ended June 30 | Subsequent Default in the Six Months Ended June 30 | Principal deferrals: | | | | | | | | | | Business loans: | | | | | | | | | | Commercial | $ | 12 |
| | $ | — |
| $ | 2 |
| | $ | 14 |
| | $ | 11 |
| $ | 12 |
| Real estate construction: | | | | | | | | | | Commercial Real Estate business line (a) | — |
| | — |
| — |
| | 1 |
| | — |
| — |
| Commercial mortgage: | | | | | | | | | | Commercial Real Estate business line (a) | 17 |
| | — |
| — |
| | 27 |
| | — |
| 16 |
| Other business lines (b) | 11 |
| | — |
| — |
| | 19 |
| | 4 |
| 7 |
| Total commercial mortgage | 28 |
| | — |
| — |
| | 46 |
| | 4 |
| 23 |
| International | 1 |
| | — |
| — |
| | — |
| | — |
| — |
| Total business loans | 41 |
| | — |
| 2 |
| | 61 |
| | 15 |
| 35 |
| Retail loans: | | | | | | | | | | Residential mortgage | 2 |
| (c) | — |
| — |
| | 5 |
| (c) | — |
| — |
| Consumer: | | | | | | | | | | Home equity | 4 |
| (c) | — |
| — |
| | 5 |
| (c) | — |
| — |
| Other consumer | 1 |
| (c) | — |
| — |
| | 2 |
| (c) | — |
| — |
| Total consumer | 5 |
| | — |
| — |
| | 7 |
| | — |
| — |
| Total retail loans | 7 |
| | — |
| — |
| | 12 |
| | — |
| — |
| Total principal deferrals | $ | 48 |
| | $ | — |
| $ | 2 |
| | $ | 73 |
| | $ | 15 |
| $ | 35 |
|
| | (a) | Primarily loans to real estate developers. |
| | (b) | Primarily loans secured by owner-occupied real estate. |
| | (c) | Includes bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt. |
During the twelve months ended June 30, 2014 and 2013, loans with a carrying value of $5 million and $2 million, respectively, were modified by interest rate reduction. During the twelve months ended June 30, 2013, loans with a carrying value of $38 million were restructured into two notes (AB note restructures). For reduced-rate loans and AB note restructures, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due. There were no subsequent payment defaults of reduced-rate loans or AB note restructures during the three- and six-month periods ended June 30, 2014 and 2013. Purchased Credit-Impaired Loans Acquired loans are initially recorded at fair value with no carryover of any allowance for loan losses. Loans acquired with evidence of credit quality deterioration at acquisition for which it was probable that the Corporation would not be able to collect all contractual amounts due were accounted for as PCI loans. The Corporation aggregated the acquired PCI loans into pools of loans based on common risk characteristics. No allowance for loan losses was required on the acquired PCI loan pools at both June 30, 2014 and December 31, 2013. The carrying amount of acquired PCI loans included in the consolidated balance sheet and the related outstanding balance at June 30, 2014 and December 31, 2013 were as follows. | | | | | | | | | (in millions) | June 30, 2014 | | December 31, 2013 | Acquired PCI loans: | | | | Carrying amount | $ | 3 |
| | $ | 5 |
| Outstanding balance (principal and unpaid interest) | 18 |
| | 46 |
|
Changes in the accretable yield for acquired PCI loans for the three- and six-month periods ended June 30, 2014 and 2013 were as follows. | | | | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | (in millions) | 2014 | | 2013 | | 2014 | | 2013 | Balance at beginning of period | $ | 11 |
| | $ | 12 |
| | $ | 15 |
| | $ | 16 |
| Reclassifications from nonaccretable | 4 |
| | — |
| | 9 |
| | — |
| Accretion | (9 | ) | | (2 | ) | | (18 | ) | | (6 | ) | Balance at end of period | $ | 6 |
| | $ | 10 |
| | $ | 6 |
| | $ | 10 |
|
|