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Credit Quality And Allowance For Credit Losses (Tables)
 9 Months Ended
Sep. 30, 2018
Credit Quality And Allowance For Credit Losses [Abstract]  
Aging Analysis Of Loans
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
 
Total 
Loans
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
74

 
$
50

 
$
25

 
$
149

 
$
149

 
$
30,591

 
$
30,889

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
—

 
—

 
—

 
—

 
—

 
2,780

 
2,780

Other business lines (b)
36

 
—

 
—

 
36

 
—

 
342

 
378

Total real estate construction
36

 
—

 
—

 
36

 
—

 
3,122

 
3,158

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
1

 
—

 
—

 
1

 
2

 
1,757

 
1,760

Other business lines (b)
31

 
6

 
3

 
40

 
20

 
7,199

 
7,259

Total commercial mortgage
32

 
6

 
3

 
41

 
22

 
8,956

 
9,019

Lease financing
—

 
—

 
—

 
—

 
2

 
469

 
471

International
—

 
—

 
—

 
—

 
4

 
1,086

 
1,090

Total business loans
142

 
56

 
28

 
226

 
177

 
44,224

 
44,627

Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
11

 
7

 
—

 
18

 
34

 
1,895

 
1,947

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
6

 
2

 
—

 
8

 
19

 
1,699

 
1,726

Other consumer
2

 
—

 
—

 
2

 
—

 
708

 
710

Total consumer
8

 
2

 
—

 
10

 
19

 
2,407

 
2,436

Total retail loans
19

 
9

 
—

 
28

 
53

 
4,302

 
4,383

Total loans
$
161

 
$
65

 
$
28

 
$
254

 
$
230

 
$
48,526

 
$
49,010

December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
79

 
$
134

 
$
12

 
$
225

 
$
309

 
$
30,526

 
$
31,060

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
3

 
—

 
—

 
3

 
—

 
2,627

 
2,630

Other business lines (b)
4

 
—

 
—

 
4

 
—

 
327

 
331

Total real estate construction
7

 
—

 
—

 
7

 
—

 
2,954

 
2,961

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
14

 
—

 
—

 
14

 
9

 
1,808

 
1,831

Other business lines (b)
27

 
6

 
22

 
55

 
22

 
7,251

 
7,328

Total commercial mortgage
41

 
6

 
22

 
69

 
31

 
9,059

 
9,159

Lease financing
—

 
—

 
—

 
—

 
4

 
464

 
468

International
13

 
—

 
—

 
13

 
6

 
964

 
983

Total business loans
140

 
140

 
34

 
314

 
350

 
43,967

 
44,631

Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
10

 
2

 
—

 
12

 
31

 
1,945

 
1,988

Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity
5

 
1

 
—

 
6

 
21

 
1,789

 
1,816

Other consumer
4

 
—

 
1

 
5

 
—

 
733

 
738

Total consumer
9

 
1

 
1

 
11

 
21

 
2,522

 
2,554

Total retail loans
19

 
3

 
1

 
23

 
52

 
4,467

 
4,542

Total loans
$
159

 
$
143

 
$
35

 
$
337

 
$
402

 
$
48,434

 
$
49,173

(a)
Primarily loans to real estate developers.
(b)
Primarily loans secured by owner-occupied real estate.
Loans By Credit Quality Indicator
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
September 30, 2018
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
29,628

 
$
580

 
$
532

 
$
149

 
$
30,889

Real estate construction:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
2,757

 
23

 
—

 
—

 
2,780

Other business lines (f)
370

 
8

 
—

 
—

 
378

Total real estate construction
3,127

 
31

 
—

 
—

 
3,158

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
1,698

 
15

 
45

 
2

 
1,760

Other business lines (f)
7,044

 
120

 
75

 
20

 
7,259

Total commercial mortgage
8,742

 
135

 
120

 
22

 
9,019

Lease financing
464

 
3

 
2

 
2

 
471

International
1,066

 
3

 
17

 
4

 
1,090

Total business loans
43,027

 
752

 
671

 
177

 
44,627

Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
1,906

 
7

 
—

 
34

 
1,947

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
1,698

 
—

 
9

 
19

 
1,726

Other consumer
709

 
1

 
—

 
—

 
710

Total consumer
2,407

 
1

 
9

 
19

 
2,436

Total retail loans
4,313

 
8

 
9

 
53

 
4,383

Total loans
$
47,340

 
$
760

 
$
680

 
$
230

 
$
49,010

December 31, 2017
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
29,263

 
$
591

 
$
897

 
$
309

 
$
31,060

Real estate construction:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
2,630

 
—

 
—

 
—

 
2,630

Other business lines (f)
327

 
4

 
—

 
—

 
331

Total real estate construction
2,957

 
4

 
—

 
—

 
2,961

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (e)
1,759

 
20

 
43

 
9

 
1,831

Other business lines (f)
7,099

 
115

 
92

 
22

 
7,328

Total commercial mortgage
8,858

 
135

 
135

 
31

 
9,159

Lease financing
440

 
23

 
1

 
4

 
468

International
946

 
11

 
20

 
6

 
983

Total business loans
42,464

 
764

 
1,053

 
350

 
44,631

Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
1,955

 
2

 
—

 
31

 
1,988

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
1,786

 
1

 
8

 
21

 
1,816

Other consumer
737

 
1

 
—

 
—

 
738

Total consumer
2,523

 
2

 
8

 
21

 
2,554

Total retail loans
4,478

 
4

 
8

 
52

 
4,542

Total loans
$
46,942

 
$
768

 
$
1,061

 
$
402

 
$
49,173

(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. This category is generally consistent with the "special mention" category as defined by regulatory authorities.
(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. 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 pages F-51 and F-52 in the Corporation's 2017 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.
Schedule Of Nonaccrual, Reduced-Rate Loans And Foreclosed Property
The following table summarizes nonperforming assets.
(in millions)
September 30, 2018
 
December 31, 2017
Nonaccrual loans
$
230

 
$
402

Reduced-rate loans (a)
9

 
8

Total nonperforming loans
239

 
410

Foreclosed property (b)
1

 
5

Total nonperforming assets
$
240

 
$
415

(a)
There were no reduced-rate business loans at both September 30, 2018 and December 31, 2017. Reduced-rate retail loans were $9 million at September 30, 2018 and $8 million at December 31, 2017.
(b)
Included $1 million and $4 million of foreclosed residential real estate properties at September 30, 2018 and December 31, 2017, respectively.
Changes In The Allowance For Loan Losses And Related Loan Amounts
The following table details the changes in the allowance for loan losses and related loan amounts.
 
2018
 
2017
(in millions)
Business Loans
 
Retail Loans
 
Total
 
Business Loans
 
Retail Loans
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
635

 
$
42

 
$
677

 
$
661

 
$
44

 
$
705

Loan charge-offs
(24
)
 
(1
)
 
(25
)
 
(36
)
 
(1
)
 
(37
)
Recoveries on loans previously charged-off
9

 
1

 
10

 
10

 
2

 
12

Net loan (charge-offs) recoveries
(15
)
 
—

 
(15
)
 
(26
)
 
1

 
(25
)
Provision for loan losses
(1
)
 
2

 
1

 
21

 
10

 
31

Foreign currency translation adjustment
1

 
—

 
1

 
1

 
—

 
1

Balance at end of period
$
620

 
$
44

 
$
664

 
$
657

 
$
55

 
$
712

 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
661

 
$
51

 
$
712

 
$
682

 
$
48

 
$
730

Loan charge-offs
(78
)
 
(4
)
 
(82
)
 
(115
)
 
(5
)
 
(120
)
Recoveries on loans previously charged-off
39

 
3

 
42

 
39

 
5

 
44

Net loan charge-offs
(39
)
 
(1
)
 
(40
)
 
(76
)
 
—

 
(76
)
Provision for loan losses
(2
)
 
(6
)
 
(8
)
 
50

 
7

 
57

Foreign currency translation adjustment
—

 
—

 
—

 
1

 
—

 
1

Balance at end of period
$
620

 
$
44

 
$
664

 
$
657

 
$
55

 
$
712

 
 
 
 
 
 
 
 
 
 
 
 
As a percentage of total loans
1.39
%
 
1.00
%
 
1.35
%
 
1.47
%
 
1.23
%
 
1.45
%
 
 
 
 
 
 
 
 
 
 
 
 
September 30
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
29

 
$
—

 
$
29

 
$
90

 
$
—

 
$
90

Collectively evaluated for impairment
591

 
44

 
635

 
567

 
55

 
622

Total allowance for loan losses
$
620

 
$
44

 
$
664

 
$
657

 
$
55

 
$
712

Loans:
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
269

 
$
34

 
$
303

 
$
501

 
$
37

 
$
538

Collectively evaluated for impairment
44,358

 
4,349

 
48,707

 
44,198

 
4,473

 
48,671

Total loans evaluated for impairment
$
44,627

 
$
4,383

 
$
49,010

 
$
44,699

 
$
4,510

 
$
49,209
Changes In the Allowance For Credit Losses On Lending-Related Commitments
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 September 30,
 
Nine Months Ended September 30,
(in millions)
2018
 
2017
 
2018
 
2017
Balance at beginning of period
$
34

 
$
48

 
$
42

 
$
41

Provision for credit losses on lending-related commitments
(1
)
 
(7
)
 
(9
)
 
—

Balance at end of period
$
33

 
$
41

 
$
33

 
$
41
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
September 30, 2018
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
66

 
$
137

 
$
203

 
$
263

 
$
27

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
38

 
1

 
39

 
49

 
—

Other business lines (b)
5

 
17

 
22

 
27

 
2

Total commercial mortgage
43

 
18

 
61

 
76

 
2

International
3

 
2

 
5

 
10

 
—

Total business loans
112

 
157

 
269

 
349

 
29

Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
13

 
8

 
21

 
22

 
—

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
12

 
—

 
12

 
14

 
—

Other consumer
1

 
—

 
1

 
2

 
—

Total consumer
13

 
—

 
13

 
16

 
—

Total retail loans (c)
26

 
8

 
34

 
38

 
—

Total individually evaluated impaired loans
$
138

 
$
165

 
$
303

 
$
387

 
$
29

December 31, 2017
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
Commercial
$
105

 
$
267

 
$
372

 
$
460

 
$
63

Commercial mortgage:
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
39

 
1

 
40

 
49

 
—

Other business lines (b)
3

 
22

 
25

 
29

 
3

Total commercial mortgage
42

 
23

 
65

 
78

 
3

International
—

 
6

 
6

 
17

 
1

Total business loans
147

 
296

 
443

 
555

 
67

Retail loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
14

 
8

 
22

 
22

 
—

Consumer:
 
 
 
 
 
 
 
 
 
Home equity
11

 
—

 
11

 
14

 
—

Other consumer
1

 
—

 
1

 
2

 
—

Total consumer
12

 
—

 
12

 
16

 
—

Total retail loans (c)
26

 
8

 
34

 
38

 
—

Total individually evaluated impaired loans
$
173

 
$
304

 
$
477

 
$
593

 
$
67

(a)
Primarily loans to real estate developers.
(b)
Primarily loans secured by owner-occupied real estate.
(c)
Individually evaluated retail loans generally have no related allowance for loan losses, primarily due to policy which results in direct write-downs of most restructured retail loans.
Average Individually Evaluated Impaired Loans And Related Interest Recognized
The following table presents information regarding average individually evaluated impaired loans and the related interest recognized as of September 30, 2018 and 2017. Interest income recognized for the period primarily related to performing restructured loans.
 
Individually Evaluated Impaired Loans
 
2018
 
2017
(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 September 30
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
Commercial
$
221

 
$
2

 
$
442

 
$
2

Commercial mortgage:
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
40

 
1

 
25

 
1

Other business lines (b)
24

 
—

 
32

 
—

Total commercial mortgage
64

 
1

 
57

 
1

International
5

 
—

 
6

 
—

Total business loans
290

 
3

 
505

 
3

Retail loans:
 
 
 
 
 
 
 
Residential mortgage
20

 
—

 
24

 
—

Consumer loans:
 
 
 
 
 
 
 
Home equity
11

 
—

 
12

 
—

Other consumer
1

 
—

 
3

 
—

Total consumer
12

 
—

 
15

 
—

Total retail loans
32

 
—

 
39

 
—

Total individually evaluated impaired loans
$
322

 
$
3

 
$
544

 
$
3

Nine Months Ended September 30
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
Commercial
$
282

 
$
4

 
$
470

 
$
6

Commercial mortgage:
 
 
 
 
 
 
 
Commercial Real Estate business line (a)
40

 
3

 
16

 
1

Other business lines (b)
24

 
—

 
33

 
—

Total commercial mortgage
64

 
3

 
49

 
1

International
5

 
—

 
9

 
—

Total business loans
351

 
7

 
528

 
7

Retail loans:
 
 
 
 
 
 
 
Residential mortgage
20

 
—

 
26

 
—

Consumer:
 
 
 
 
 
 
 
Home equity
11

 
—

 
13

 
—

Other consumer
1

 
—

 
3

 
—

Total consumer
12

 
—

 
16

 
—

Total retail loans
32

 
—

 
42

 
—

Total individually evaluated impaired loans
$
383

 
$
7

 
$
570

 
$
7

(a)
Primarily loans to real estate developers.
(b)
Primarily loans secured by owner-occupied real estate.
Troubled Debt Restructurings By Type Of Modification
The following table details the recorded balance at September 30, 2018 and 2017 of loans considered to be troubled debt restructurings (TDRs) that were restructured during the three- and nine-month periods ended September 30, 2018 and 2017, 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.
 
2018
 
2017
 
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 September 30
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
1

 
$
—

 
$
1

 
$
22

 
$
—

 
$
—

$
22

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (c)
—

 
—

 
—

 
36

 
—

 
—

36

Other business lines (d)
1

 
—

 
1

 
—

 
—

 
—

—

Total commercial mortgage
1

 
—

 
1

 
36

 
—

 
—

36

International
1

 
—

 
1

 
2

 
—

 
—

2

Total business loans
3

 
—

 
3

 
60

 
—

 
—

60

Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity (e)
—


2

 
2

 
1

 
—

 
—

1

Total loans
$
3

 
$
2

 
$
5

 
$
61

 
$
—

 
$
—

$
61

Nine Months Ended September 30
 
 
 
 
 
 
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial
$
32

 
$
—

 
$
32

 
$
95

 
$
—

 
$
31

$
126

Commercial mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial Real Estate business line (c)
—

 
—

 
—

 
36

 
—

 
—

36

Other business lines (d)
3

 
—

 
3

 
3

 
—

 
—

3

Total commercial mortgage
3

 
—

 
3

 
39

 
—

 
—

39

International
1

 
—

 
1

 
2

 
—

 
—

2

Total business loans
36

 
—

 
36

 
136

 
—

 
31

167

Retail loans:
 
 
 
 
 
 
 
 
 
 
 
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity (e)
—

 
3

 
3

 
1

 
2

 
—

3

Total loans
$
36

 
$
3

 
$
39

 
$
137

 
$
2

 
$
31

$
170

(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 generally fully charged off.
(c)
Primarily loans to real estate developers.
(d)
Primarily loans to 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.
Troubled Debt Restructuring Subsequent Default
The following table presents information regarding the recorded balance at September 30, 2018 and 2017 of loans modified by principal deferral and interest rate reduction during the twelve-month periods ended September 30, 2018 and 2017.
 
Principal Deferrals
Interest Rate Reductions
(in millions)
2018
 
2017
2018
 
2017
Balance at September 30,
 
 
 
 
 
 
Business loans:
 
 
 
 
 
 
Commercial
$
59

 
$
127

$
—

 
$
—

Commercial mortgage:
 
 
 
 
 
 
Commercial Real Estate business line (a)
—

 
37

—

 
—

Other business lines (b)
3

 
7

—

 
—

Total commercial mortgage
3

 
44

—

 
—

International
1

 
2

—

 
—

Total business loans
63

 
173

—

 
—

Retail loans:
 
 
 
 
 
 
Consumer:
 
 
 
 
 
 
Home equity (c)
1

 
1

3

 
2

Total principal deferrals
$
64

 
$
174

$
3

 
$
2

(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.