Credit Quality And Allowance For Credit Losses (Tables)

6 Months Ended

Jun. 30, 2021

Credit Quality And Allowance For Credit Losses [Abstract]

The following table presents an aging analysis of the amortized cost basis 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 (a)		Total Loans
June 30, 2021
Business loans:
Commercial	$	65	$	8	$	4	$	77	$	221	$	29,909	$	30,207
Real estate construction:
Commercial Real Estate business line (b)	—		—		—		—		—		2,707		2,707
Other business lines (c)	—		—		4		4		4		457		465
Total real estate construction	—		—		4		4		4		3,164		3,172
Commercial mortgage:
Commercial Real Estate business line (b)	28		—		—		28		2		3,530		3,560
Other business lines (c)	23		8		10		41		29		7,704		7,774
Total commercial mortgage	51		8		10		69		31		11,234		11,334
Lease financing	40		—		—		40		—		549		589
International	—		—		—		—		—		1,036		1,036
Total business loans	156		16		18		190		256		45,892		46,338

Retail loans:
Residential mortgage	7		6		2		15		41		1,751		1,807
Consumer:
Home equity	2		—		—		2		14		1,532		1,548
Other consumer	1		7		7		15		—		520		535
Total consumer	3		7		7		17		14		2,052		2,083
Total retail loans	10		13		9		32		55		3,803		3,890
Total loans	$	166	$	29	$	27	$	222	$	311	$	49,695	$	50,228
December 31, 2020
Business loans:
Commercial	$	62	$	115	$	33	$	210	$	252	$	32,291	$	32,753
Real estate construction:
Commercial Real Estate business line (b)	31		—		—		31		—		3,626		3,657
Other business lines (c)	9		—		—		9		1		415		425
Total real estate construction	40		—		—		40		1		4,041		4,082
Commercial mortgage:
Commercial Real Estate business line (b)	51		1		—		52		3		2,218		2,273
Other business lines (c)	48		40		5		93		26		7,520		7,639
Total commercial mortgage	99		41		5		145		29		9,738		9,912
Lease financing	14		—		1		15		1		578		594
International	—		—		—		—		—		926		926
Total business loans	215		156		39		410		283		47,574		48,267

Retail loans:
Residential mortgage	11		4		—		15		47		1,768		1,830
Consumer:
Home equity	7		1		—		8		17		1,563		1,588
Other consumer	10		—		6		16		—		590		606
Total consumer	17		1		6		24		17		2,153		2,194
Total retail loans	28		5		6		39		64		3,921		4,024
Total loans	$	243	$	161	$	45	$	449	$	347	$	51,495	$	52,291

(a)Includes $45 million and $141 million of loans with deferred payments not considered past due in accordance with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) at June 30, 2021 and December 31, 2020, respectively.

(b)Primarily loans to real estate developers.

(c)Primarily loans secured by owner-occupied real estate.

Loans By Credit Quality Indicator and Vintage Year

The following table presents loans by credit quality indicator (CQI) and vintage year. CQI is 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. Vintage year is the year of origination or major modification.


	June 30, 2021
	Vintage Year
(in millions)	2021			2020			2019		2018		2017		Prior		Revolvers		Revolvers Converted to Term		Total
Business loans:
Commercial:
Pass (a)	$	3,319	(b)	$	3,819	(b)	$	1,876	$	1,278	$	823	$	969	$	16,582	$	14	$	28,680


Criticized (c)	55			81			205		136		64		160		824		2		1,527

Total commercial	3,374			3,900			2,081		1,414		887		1,129		17,406		16		30,207
Real estate construction
Pass (a)	142			728			1,152		557		294		80		149		—		3,102


Criticized (c)	—			3			30		17		8		9		3		—		70

Total real estate construction	142			731			1,182		574		302		89		152		—		3,172
Commercial mortgage
Pass (a)	1,064			2,088			1,611		1,636		1,206		2,848		474		—		10,927


Criticized (c)	3			48			63		36		32		210		15		—		407

Total commercial mortgage	1,067			2,136			1,674		1,672		1,238		3,058		489		—		11,334
Lease financing
Pass (a)	55			100			108		58		46		186		—		—		553


Criticized (c)	—			2			22		10		1		1		—		—		36

Total lease financing	55			102			130		68		47		187		—		—		589
International
Pass (a)	199			145			143		48		6		54		385		—		980


Criticized (c)	20			14			3		1		4		9		5		—		56

Total international	219			159			146		49		10		63		390		—		1,036
Total business loans	4,857			7,028			5,213		3,777		2,484		4,526		18,437		16		46,338
Retail loans:
Residential mortgage
Pass (a)	219			636			197		96		131		481		—		—		1,760


Criticized (c)	6			1			2		3		7		28		—		—		47

Total residential mortgage	225			637			199		99		138		509		—		—		1,807
Consumer:
Home equity
Pass (a)	—			—			—		—		—		14		1,464		53		1,531


Criticized (c)	—			—			—		—		—		—		11		6		17

Total home equity	—			—			—		—		—		14		1,475		59		1,548
Other consumer
Pass (a)	50			81			18		9		1		34		326		—		519


Criticized (c)	—			—			—		1		—		7		8		—		16

Total other consumer	50			81			18		10		1		41		334		—		535
Total consumer	50			81			18		10		1		55		1,809		59		2,083
Total retail loans	275			718			217		109		139		564		1,809		59		3,890
Total loans	$	5,132		$	7,746		$	5,430	$	3,886	$	2,623	$	5,090	$	20,246	$	75	$	50,228


Table continues on the following page.


	December 31, 2020
	Vintage Year
	2020			2019		2018		2017		2016		Prior		Revolvers		Revolvers Converted to Term		Total
Business loans:
Commercial:
Pass (a)	$	5,991	(b)	$	2,316	$	1,563	$	1,051	$	429	$	755	$	18,416	$	17	$	30,538



Criticized (c)	30			281		191		116		64		166		1,365		2		2,215
Total commercial	6,021			2,597		1,754		1,167		493		921		19,781		19		32,753
Real estate construction:
Pass (a)	433			1,080		1,244		631		335		141		171		—		4,035



Criticized (c)	3			28		5		8		—		1		2		—		47
Total real estate construction	436			1,108		1,249		639		335		142		173		—		4,082
Commercial mortgage:
Pass (a)	2,053			1,559		1,146		1,120		818		2,272		431		—		9,399



Criticized (c)	47			130		42		45		41		193		15		—		513
Total commercial mortgage	2,100			1,689		1,188		1,165		859		2,465		446		—		9,912
Lease financing
Pass (a)	109			122		71		50		14		201		—		—		567



Criticized (c)	2			17		5		2		1		—		—		—		27
Total lease financing	111			139		76		52		15		201		—		—		594
International
Pass (a)	274			161		103		11		3		64		245		—		861



Criticized (c)	13			8		18		4		7		2		13		—		65
Total international	287			169		121		15		10		66		258		—		926
Total business loans	8,955			5,702		4,388		3,038		1,712		3,795		20,658		19		48,267
Retail loans:
Residential mortgage
Pass (a)	639			230		119		197		196		398		—		—		1,779



Criticized (c)	7			2		2		6		2		32		—		—		51
Total residential mortgage	646			232		121		203		198		430		—		—		1,830
Consumer:
Home equity
Pass (a)	—			—		—		—		—		15		1,489		63		1,567



Criticized (c)	—			—		—		—		—		1		13		7		21
Total home equity	—			—		—		—		—		16		1,502		70		1,588
Other consumer
Pass (a)	113			23		12		2		3		41		404		—		598



Criticized (c)	—			—		2		—		—		—		6		—		8
Total other consumer	113			23		14		2		3		41		410		—		606
Total consumer	113			23		14		2		3		57		1,912		70		2,194
Total retail loans	759			255		135		205		201		487		1,912		70		4,024
Total loans	$	9,714		$	5,957	$	4,523	$	3,243	$	1,913	$	4,282	$	22,570	$	89	$	52,291

(a)Includes all loans not included in the categories of special mention, substandard or nonaccrual.

(b)Includes Small Business Administration Paycheck Protection Program (PPP) loans of $1.0 billion and $1.8 billion in 2021 and 2020, respectively, at June 30, 2021, and PPP loans of $3.5 billion in 2020 at December 31, 2020.

(c)Includes loans with an internal rating of special mention, substandard loans for which the accrual of interest has not been discontinued and nonaccrual loans. Special mention loans 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. Accruing substandard loans 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 are also distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. 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-59 in the Corporation's 2020 Annual Report. These categories are generally consistent with the "special mention" and "substandard" categories as defined by regulatory authorities. A minority of nonaccrual loans are consistent with the "doubtful" category.

Changes In The Allowance For Loan Losses

The following table details the changes in the allowance for credit losses.


	2021									2020
(in millions)	Business Loans			Retail Loans			Total			Business Loans			Retail Loans			Total
Three Months Ended June 30
Balance at beginning of period:

Allowance for loan losses	$	709		$	68		$	777		$	861		$	55		$	916
Allowance for credit losses on lending-related commitments	22			8			30			52			10			62
Allowance for credit losses	731			76			807			913			65			978

Loan charge-offs	(7)			(1)			(8)			(56)			(1)			(57)
Recoveries on loans previously charged-off	19			—			19			6			1			7
Net loan charge-offs	12			(1)			11			(50)			—			(50)
Provision for credit losses:
Provision for loan losses	(132)			(4)			(136)			132			9			141
Provision for credit losses on lending-related commitments	2			(1)			1			(2)			(1)			(3)
Provision for credit losses	(130)			(5)			(135)			130			8			138

Balance at end of period:
Allowance for loan losses	589			63			652			943			64			1,007
Allowance for credit losses on lending-related commitments	24			7			31			50			9			59
Allowance for credit losses	$	613		$	70		$	683		$	993		$	73		$	1,066
Six Months Ended June 30
Balance at beginning of period
Allowance for loan losses	$	895		$	53		$	948		$	601		$	36		$	637
Allowance for credit losses on lending-related commitments	35			9			44			28			3			31
Allowance for credit losses	930			62			992			629			39			668
Cumulative effect of change in accounting principle	—			—			—			(42)			25			(17)
Loan charge-offs	(22)			(2)			(24)			(143)			(3)			(146)
Recoveries on loans previously charged-off	31			1			32			11			1			12
Net loan charge-offs	9			(1)			8			(132)			(2)			(134)
Provision for credit losses:
Provision for loan losses	(315)			11			(304)			516			5			521
Provision for credit losses on lending-related commitments	(11)			(2)			(13)			22			6			28
Provision for credit losses	(326)			9			(317)			538			11			549

Balance at end of period:
Allowance for loan losses	589			63			652			943			64			1,007
Allowance for credit losses on lending-related commitments	24			7			31			50			9			59
Allowance for credit losses	$	613		$	70		$	683		$	993		$	73		$	1,066
Allowance for loan losses as a percentage of total loans	1.27		%	1.63		%	1.30		%	1.91		%	1.59		%	1.88		%
Allowance for loan losses as a percentage of total loans excluding PPP loans	1.35			n/a			1.37			2.07			n/a			2.03
Allowance for credit losses as a percentage of total loans	1.32			1.80			1.36			2.01			1.82			1.99
Allowance for credit losses as a percentage of total loans excluding PPP loans	1.41			n/a			1.44			2.18			n/a			2.15

n/a - not applicable

Nonaccrual Loans

The following table presents additional information regarding nonaccrual loans. No interest income was recognized on nonaccrual loans for the three- and six-month periods ended June 30, 2021 and 2020.


(in millions)	Nonaccrual Loans with No Related Allowance		Nonaccrual Loans with Related Allowance		Total Nonaccrual Loans
June 30, 2021
Business loans:
Commercial	$	42	$	179	$	221
Real estate construction:

Other business lines (a)	—		4		4

Commercial mortgage:
Commercial Real Estate business line (b)	1		1		2
Other business lines (a)	6		23		29
Total commercial mortgage	7		24		31


Total business loans	49		207		256
Retail loans:
Residential mortgage	41		—		41
Consumer:
Home equity	14		—		14


Total retail loans	55		—		55
Total nonaccrual loans	$	104	$	207	$	311
December 31, 2020
Business loans:
Commercial	$	57	$	195	$	252
Real estate construction:

Other business lines (a)	—		1		1

Commercial mortgage:
Commercial Real Estate business line (b)	1		2		3
Other business lines (a)	5		21		26
Total commercial mortgage	6		23		29
Lease financing	—		1		1
Total business loans	63		220		283
Retail loans:
Residential mortgage	47		—		47
Consumer:
Home equity	17		—		17

Total retail loans	64		—		64
Total nonaccrual loans	$	127	$	220	$	347

(a)Primarily loans secured by owner-occupied real estate.

(b)Primarily loans to real estate developers.

Troubled Debt Restructurings By Type Of Modification

The following table details the amortized cost basis at June 30, 2021 and 2020 of loans considered to be TDRs that were restructured during the three- and six-month periods ended June 30, 2021 and 2020, 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.


	2021		2020
	Type of Modification
(in millions)	Interest Rate Reductions		Principal Deferrals (a)
Three Months Ended June 30,














Retail loans:
Residential mortgage	$	6	$	—
Consumer:
Home equity (b)	1		—



Total loans	$	7	$	—
Six Months Ended June 30,
Business loans:
Commercial	$	—	$	16




Commercial mortgage:

Other business lines (c)	—		1



Total business loans	—		17
Retail loans:
Residential mortgage	6		—
Consumer:
Home equity (b)	1		—



Total loans	$	7	$	17

(a)Primarily represents loan balances where terms were extended by more than an insignificant time period, typically more than 180 days, at or above contractual interest rates. Also includes commercial loans restructured in bankruptcy.

(b)Includes bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt.

(c)Primarily loans secured by owner-occupied real estate.