Credit Quality And Allowance For Credit Losses (Tables)

9 Months Ended

Sep. 30, 2021

Credit Quality And Allowance For Credit Losses [Abstract]

Aging Analysis Of Loans

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
September 30, 2021
Business loans:
Commercial	$	51	$	6	$	3	$	60	$	200	$	28,095	$	28,355
Real estate construction:
Commercial Real Estate business line (b)	17		—		—		17		—		2,471		2,488
Other business lines (c)	—		6		3		9		6		507		522
Total real estate construction	17		6		3		26		6		2,978		3,010
Commercial mortgage:
Commercial Real Estate business line (b)	7		—		—		7		2		3,404		3,413
Other business lines (c)	34		11		1		46		28		7,728		7,802
Total commercial mortgage	41		11		1		53		30		11,132		11,215
Lease financing	6		—		—		6		—		563		569
International	9		1		1		11		8		1,112		1,131
Total business loans	124		24		8		156		244		43,880		44,280
Retail loans:
Residential mortgage	12		1		—		13		35		1,765		1,813
Consumer:
Home equity	7		1		—		8		12		1,537		1,557
Other consumer	—		—		4		4		—		541		545
Total consumer	7		1		4		12		12		2,078		2,102
Total retail loans	19		2		4		25		47		3,843		3,915
Total loans	$	143	$	26	$	12	$	181	$	291	$	47,723	$	48,195
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 $35 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 September 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.

	September 30, 2021
	Vintage Year
(in millions)	2021			2020			2019		2018		2017		Prior		Revolvers		Revolvers Converted to Term		Total
Business loans:
Commercial:
Pass (a)	$	3,891	(b)	$	2,149	(b)	$	1,670	$	1,122	$	779	$	863	$	16,606	$	12	$	27,092
Criticized (c)	67			102			138		93		33		143		685		2		1,263
Total commercial	3,958			2,251			1,808		1,215		812		1,006		17,291		14		28,355
Real estate construction
Pass (a)	262			899			977		425		189		35		157		—		2,944
Criticized (c)	—			3			30		14		8		8		3		—		66
Total real estate construction	262			902			1,007		439		197		43		160		—		3,010
Commercial mortgage
Pass (a)	1,655			2,003			1,504		1,547		1,135		2,588		445		—		10,877
Criticized (c)	11			44			66		30		27		151		9		—		338
Total commercial mortgage	1,666			2,047			1,570		1,577		1,162		2,739		454		—		11,215
Lease financing
Pass (a)	62			93			103		54		40		183		—		—		535
Criticized (c)	—			2			21		9		1		1		—		—		34
Total lease financing	62			95			124		63		41		184		—		—		569
International
Pass (a)	281			135			154		31		4		16		448		—		1,069
Criticized (c)	20			13			3		8		4		8		6		—		62
Total international	301			148			157		39		8		24		454		—		1,131
Total business loans	6,249			5,443			4,666		3,333		2,220		3,996		18,359		14		44,280
Retail loans:
Residential mortgage
Pass (a)	363			577			187		85		122		443		—		—		1,777
Criticized (c)	1			—			1		2		7		25		—		—		36
Total residential mortgage	364			577			188		87		129		468		—		—		1,813
Consumer:
Home equity
Pass (a)	—			—			—		—		—		13		1,477		52		1,542
Criticized (c)	—			—			—		—		—		—		10		5		15
Total home equity	—			—			—		—		—		13		1,487		57		1,557
Other consumer
Pass (a)	68			72			17		9		1		33		341		—		541
Criticized (c)	—			—			—		—		—		—		4		—		4
Total other consumer	68			72			17		9		1		33		345		—		545
Total consumer	68			72			17		9		1		46		1,832		57		2,102
Total retail loans	432			649			205		96		130		514		1,832		57		3,915
Total loans	$	6,681		$	6,092		$	4,871	$	3,429	$	2,350	$	4,510	$	20,191	$	71	$	48,195
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 $627 million and $393 million in 2021 and 2020, respectively, at September 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 September 30
Balance at beginning 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
Loan charge-offs	(26)			—			(26)			(53)			—			(53)
Recoveries on loans previously charged-off	22			2			24			18			2			20
Net loan (charge-offs) recoveries	(4)			2			(2)			(35)			2			(33)
Provision for credit losses:
Provision for loan losses	(31)			(10)			(41)			15			(11)			4
Provision for credit losses on lending-related commitments	—			(1)			(1)			1			—			1
Provision for credit losses	(31)			(11)			(42)			16			(11)			5
Balance at end of period:
Allowance for loan losses	554			55			609			923			55			978
Allowance for credit losses on lending-related commitments	24			6			30			51			9			60
Allowance for credit losses	$	578		$	61		$	639		$	974		$	64		$	1,038
Nine Months Ended September 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	(48)			(2)			(50)			(196)			(3)			(199)
Recoveries on loans previously charged-off	53			3			56			29			3			32
Net loan recoveries (charge-offs)	5			1			6			(167)			—			(167)
Provision for credit losses:
Provision for loan losses	(346)			1			(345)			531			(6)			525
Provision for credit losses on lending-related commitments	(11)			(3)			(14)			23			6			29
Provision for credit losses	(357)			(2)			(359)			554			—			554
Balance at end of period:
Allowance for loan losses	554			55			609			923			55			978
Allowance for credit losses on lending-related commitments	24			6			30			51			9			60
Allowance for credit losses	$	578		$	61		$	639		$	974		$	64		$	1,038
Allowance for loan losses as a percentage of total loans	1.25		%	1.42		%	1.26		%	1.91		%	1.35		%	1.87		%
Allowance for loan losses as a percentage of total loans excluding PPP loans	1.28			n/a			1.29			2.07			n/a			2.01
Allowance for credit losses as a percentage of total loans	1.30			1.57			1.33			2.02			1.57			1.98
Allowance for credit losses as a percentage of total loans excluding PPP loans	1.34			n/a			1.35			2.19			n/a			2.14

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 nine-month periods ended September 30, 2021 and 2020.

(in millions)	Nonaccrual Loans with No Related Allowance		Nonaccrual Loans with Related Allowance		Total Nonaccrual Loans
September 30, 2021
Business loans:
Commercial	$	20	$	180	$	200
Real estate construction:
Other business lines (a)	—		6		6
Commercial mortgage:
Commercial Real Estate business line (b)	1		1		2
Other business lines (a)	6		22		28
Total commercial mortgage	7		23		30
International	—		8		8
Total business loans	27		217		244
Retail loans:
Residential mortgage	35		—		35
Consumer:
Home equity	12		—		12
Total retail loans	47		—		47
Total nonaccrual loans	$	74	$	217	$	291
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 September 30, 2021 and 2020 of loans considered to be TDRs that were restructured during the three- and nine-month periods ended September 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						Type of Modification
(in millions)	Principal Deferrals (a)		Interest Rate Reductions		Total Modifications		Principal Deferrals (a)		Interest Rate Reductions		Total Modifications
Three Months Ended September 30,
Commercial	$	—	$	—	$	—	$	11	$	—	$	11
Commercial mortgage:
Other business lines (b)	—		—		—		1		—		1
Total business loans	—		—		—		12		—		12
Retail loans:
Consumer:
Home equity (c)	—		—		—		—		1		1
Total retail loans	—		—		—		—		1		1
Total loans	$	—	$	—	$	—	$	12	$	1	$	13
Nine Months Ended September 30,
Business loans:
Commercial	$	—	$	—	$	—	$	26	$	—	$	26
Commercial mortgage:
Other business lines (b)	—		—		—		2		—		2
Total business loans	—		—		—		28		—		28
Retail loans:
Consumer:
Home equity (c)	—		1		1		—		1		1
Total retail loans	—		1		1		—		1		1
Total loans	$	—	$	1	$	1	$	28	$	1	$	29

(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)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.