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Credit Quality and the Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2022

Allowance for Loan and Lease Losses

The following tables summarize transactions in the ALLL by portfolio segment:


For the three months ended March 31, 2022 ($ in millions)	Commercial		Residential Mortgage	Consumer	Total
Balance, beginning of period	$	1,102	235	555	1,892
Losses charged off(a)	(11)		(1)	(52)	(64)
Recoveries of losses previously charged off(a)	3		2	25	30
Provision for loan and lease losses	16		3	31	50
Balance, end of period	$	1,110	239	559	1,908

(a)The Bancorp recorded $8 in both losses charged off and recoveries of losses previously charged off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.


For the three months ended March 31, 2021 ($ in millions)	Commercial		Residential Mortgage	Consumer	Total
Balance, beginning of period	$	1,456	294	703	2,453
Losses charged off(a)	(35)		(1)	(73)	(109)
Recoveries of losses previously charged off(a)	7		1	30	38
Benefit from loan and lease losses	(99)		(47)	(28)	(174)
Balance, end of period	$	1,329	247	632	2,208

(a)The Bancorp recorded $10 in both losses charged off and recoveries of losses previously charged off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment

The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:


As of March 31, 2022 ($ in millions)	Commercial		Residential Mortgage	Consumer	Total
ALLL:(a)
Individually evaluated	$	82	47	44	173
Collectively evaluated	1,028		192	515	1,735
Total ALLL	$	1,110	239	559	1,908
Portfolio loans and leases:(b)
Individually evaluated	$	572	549	321	1,442
Collectively evaluated	72,366		16,450	25,462	114,278
Total portfolio loans and leases	$	72,938	16,999	25,783	115,720

(a)Includes $2 related to commercial leveraged leases at March 31, 2022.

(b)Excludes $145 of residential mortgage loans measured at fair value and includes $262 of commercial leveraged leases, net of unearned income at March 31, 2022.


As of December 31, 2021 ($ in millions)	Commercial		Residential Mortgage	Consumer	Total
ALLL:(a)
Individually evaluated	$	77	46	41	164
Collectively evaluated	1,025		189	514	1,728
Total ALLL	$	1,102	235	555	1,892
Portfolio loans and leases:(b)
Individually evaluated	$	579	460	313	1,352
Collectively evaluated	69,689		15,783	25,072	110,544

Total portfolio loans and leases	$	70,268	16,243	25,385	111,896

(a)Includes $2 related to commercial leveraged leases at December 31, 2021.

(b)Excludes $154 of residential mortgage loans measured at fair value and includes $285 of commercial leveraged leases, net of unearned income at December 31, 2021.

Loan and Leases Balances by Credit Quality Indicator

The following tables present the amortized cost basis of the Bancorp’s commercial portfolio segment, by class and vintage, disaggregated by credit risk grade:


As of March 31, 2022 ($ in millions)	Term Loans and Leases by Origination Year							Revolving Loans	Revolving Loans Converted to Term Loans
	2022		2021	2020	2019	2018	Prior			Total
Commercial and industrial loans:
Pass	$	1,270	4,635	1,823	1,038	491	897	40,918	—	51,072
Special mention	—		41	18	12	8	18	631	—	728
Substandard	14		40	56	26	50	209	1,714	—	2,109
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial and industrial loans	$	1,284	4,716	1,897	1,076	549	1,124	43,263	—	53,909
Commercial mortgage owner-occupied loans:
Pass	$	443	997	652	347	263	441	1,339	—	4,482
Special mention	6		36	33	45	12	5	64	—	201
Substandard	4		4	47	40	22	69	107	—	293
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial mortgage owner- occupied loans	$	453	1,037	732	432	297	515	1,510	—	4,976
Commercial mortgage nonowner-occupied loans:
Pass	$	481	572	653	578	269	371	1,985	—	4,909
Special mention	5		89	—	7	3	15	116	—	235
Substandard	44		144	41	4	3	10	328	—	574
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial mortgage nonowner-occupied loans	$	530	805	694	589	275	396	2,429	—	5,718
Commercial construction loans:
Pass	$	—	25	98	14	36	9	4,707	—	4,889
Special mention	—		—	—	—	—	—	198	—	198
Substandard	—		10	—	—	—	—	323	—	333
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial construction loans	—		35	98	14	36	9	5,228	—	5,420
Commercial leases:
Pass	$	102	891	401	270	216	970	—	—	2,850
Special mention	—		4	3	5	8	6	—	—	26
Substandard	—		6	2	7	9	15	—	—	39
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial leases	$	102	901	406	282	233	991	—	—	2,915
Total commercial loans and leases:
Pass	$	2,296	7,120	3,627	2,247	1,275	2,688	48,949	—	68,202
Special mention	11		170	54	69	31	44	1,009	—	1,388
Substandard	62		204	146	77	84	303	2,472	—	3,348
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial loans and leases	$	2,369	7,494	3,827	2,393	1,390	3,035	52,430	—	72,938


As of December 31, 2021 ($ in millions)	Term Loans and Leases by Origination Year							Revolving Loans	Revolving Loans Converted to Term Loans
	2021		2020	2019	2018	2017	Prior			Total
Commercial and industrial loans:
Pass	$	4,266	2,291	1,198	552	356	752	39,486	—	48,901
Special mention	37		22	12	29	22	5	665	—	792
Substandard	19		52	36	69	52	115	1,623	—	1,966
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial and industrial loans	$	4,322	2,365	1,246	650	430	872	41,774	—	51,659
Commercial mortgage owner-occupied loans:
Pass	$	1,082	804	471	296	183	331	1,141	—	4,308
Special mention	—		31	46	17	2	40	69	—	205
Substandard	22		38	3	12	3	27	91	—	196
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial mortgage owner-occupied loans	$	1,104	873	520	325	188	398	1,301	—	4,709
Commercial mortgage nonowner-occupied loans:
Pass	$	635	733	595	284	141	302	1,977	—	4,667
Special mention	89		12	11	5	7	9	162	—	295
Substandard	160		78	4	3	9	3	388	—	645
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial mortgage nonowner-occupied loans	$	884	823	610	292	157	314	2,527	—	5,607
Commercial construction loans:
Pass	$	50	69	11	37	—	9	4,488	—	4,664
Special mention	—		39	—	—	—	—	193	—	232
Substandard	17		—	—	—	—	—	328	—	345
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial construction loans	$	67	108	11	37	—	9	5,009	—	5,241
Commercial leases:
Pass	$	1,019	436	284	231	233	776	—	—	2,979
Special mention	4		4	5	9	—	8	—	—	30
Substandard	7		3	8	10	13	2	—	—	43
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial leases	$	1,030	443	297	250	246	786	—	—	3,052
Total commercial loans and leases:
Pass	$	7,052	4,333	2,559	1,400	913	2,170	47,092	—	65,519
Special mention	130		108	74	60	31	62	1,089	—	1,554
Substandard	225		171	51	94	77	147	2,430	—	3,195
Doubtful	—		—	—	—	—	—	—	—	—
Total commercial loans and leases	$	7,407	4,612	2,684	1,554	1,021	2,379	50,611	—	70,268

The following tables present the amortized cost basis of the Bancorp’s residential mortgage and consumer portfolio segments, by class and vintage, disaggregated by both age and performing versus nonperforming status:


As of March 31, 2022 ($ in millions)	Term Loans by Origination Year							Revolving Loans	Revolving Loans Converted to Term Loans
	2022		2021	2020	2019	2018	Prior			Total
Residential mortgage loans:
Performing:
Current(a)	$	1,124	5,773	3,255	1,203	413	5,116	—	—	16,884
30-89 days past due	—		—	1	1	1	12	—	—	15
90 days or more past due	—		—	1	—	1	10	—	—	12
Total performing	1,124		5,773	3,257	1,204	415	5,138	—	—	16,911
Nonperforming	—		1	2	2	3	80	—	—	88
Total residential mortgage loans(b)	$	1,124	5,774	3,259	1,206	418	5,218	—	—	16,999
Home equity:
Performing:
Current	$	—	2	5	12	16	106	3,657	15	3,813
30-89 days past due	—		—	—	—	—	3	22	—	25
90 days or more past due	—		—	—	—	—	1	—	—	1
Total performing	—		2	5	12	16	110	3,679	15	3,839
Nonperforming	—		—	—	—	—	10	66	1	77
Total home equity	$	—	2	5	12	16	120	3,745	16	3,916
Indirect secured consumer loans:
Performing:
Current	$	2,591	7,860	3,715	1,901	741	477	—	—	17,285
30-89 days past due	4		32	25	24	14	9	—	—	108
90 days or more past due	—		3	2	2	1	1	—	—	9
Total performing	2,595		7,895	3,742	1,927	756	487	—	—	17,402
Nonperforming	—		1	9	5	4	3	—	—	22
Total indirect secured consumer loans	$	2,595	7,896	3,751	1,932	760	490	—	—	17,424
Credit card:
Performing:
Current	$	—	—	—	—	—	—	1,636	—	1,636
30-89 days past due	—		—	—	—	—	—	17	—	17
90 days or more past due	—		—	—	—	—	—	14	—	14
Total performing	—		—	—	—	—	—	1,667	—	1,667
Nonperforming	—		—	—	—	—	—	23	—	23
Total credit card	$	—	—	—	—	—	—	1,690	—	1,690
Other consumer loans:
Performing:
Current	$	122	642	465	238	153	135	974	10	2,739
30-89 days past due	—		3	2	2	2	1	2	—	12
90 days or more past due	—		—	—	1	—	—	—	—	1
Total performing	122		645	467	241	155	136	976	10	2,752
Nonperforming	—		—	—	—	—	—	1	—	1
Total other consumer loans	$	122	645	467	241	155	136	977	10	2,753
Total residential mortgage and consumer loans:
Performing:
Current	$	3,837	14,277	7,440	3,354	1,323	5,834	6,267	25	42,357
30-89 days past due	4		35	28	27	17	25	41	—	177
90 days or more past due	—		3	3	3	2	12	14	—	37
Total performing	3,841		14,315	7,471	3,384	1,342	5,871	6,322	25	42,571
Nonperforming	—		2	11	7	7	93	90	1	211
Total residential mortgage and consumer loans(b)	$	3,841	14,317	7,482	3,391	1,349	5,964	6,412	26	42,782

(a)Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of March 31, 2022, $64 of these loans were 30-89 days past due and $172 were 90 days or more past due. The Bancorp recognized $1 of losses during the three months ended March 31, 2022 due to claim denials and curtailments associated with these insured or guaranteed loans.

(b)Excludes $145 of residential mortgage loans measured at fair value at March 31, 2022.


As of December 31, 2021 ($ in millions)	Term Loans by Origination Year							Revolving Loans	Revolving Loans Converted to Term Loans
	2021		2020	2019	2018	2017	Prior			Total
Residential mortgage loans:
Performing:
Current(a)	$	5,886	3,309	1,294	418	954	4,261	—	—	16,122
30-89 days past due	1		1	1	1	1	13	—	—	18
90 days or more past due	—		2	4	3	9	52	—	—	70
Total performing	5,887		3,312	1,299	422	964	4,326	—	—	16,210
Nonperforming	—		—	1	—	2	30	—	—	33
Total residential mortgage loans(b)	$	5,887	3,312	1,300	422	966	4,356	—	—	16,243
Home equity:
Performing:
Current	$	2	6	13	18	2	113	3,815	12	3,981
30-89 days past due	—		—	—	—	—	3	22	—	25
90 days or more past due	—		—	—	—	—	1	—	—	1
Total performing	2		6	13	18	2	117	3,837	12	4,007
Nonperforming	—		—	—	—	—	9	67	1	77
Total home equity	$	2	6	13	18	2	126	3,904	13	4,084
Indirect secured consumer loans:
Performing:
Current	$	8,732	4,206	2,221	902	389	194	—	—	16,644
30-89 days past due	26		24	25	17	8	3	—	—	103
90 days or more past due	2		2	2	2	1	—	—	—	9
Total performing	8,760		4,232	2,248	921	398	197	—	—	16,756
Nonperforming	—		12	5	5	3	2	—	—	27
Total indirect secured consumer loans	$	8,760	4,244	2,253	926	401	199	—	—	16,783
Credit card:
Performing:
Current	$	—	—	—	—	—	—	1,710	—	1,710
30-89 days past due	—		—	—	—	—	—	18	—	18
90 days or more past due	—		—	—	—	—	—	15	—	15
Total performing	—		—	—	—	—	—	1,743	—	1,743
Nonperforming	—		—	—	—	—	—	23	—	23
Total credit card	$	—	—	—	—	—	—	1,766	—	1,766
Other consumer loans:
Performing:
Current	$	692	530	275	174	105	47	913	—	2,736
30-89 days past due	3		2	3	2	1	—	2	1	14
90 days or more past due	—		—	1	—	—	—	—	—	1
Total performing	695		532	279	176	106	47	915	1	2,751
Nonperforming	—		—	—	—	—	—	1	—	1
Total other consumer loans	$	695	532	279	176	106	47	916	1	2,752
Total residential mortgage and consumer loans:
Performing:
Current	$	15,312	8,051	3,803	1,512	1,450	4,615	6,438	12	41,193
30-89 days past due	30		27	29	20	10	19	42	1	178
90 days or more past due	2		4	7	5	10	53	15	—	96
Total performing	15,344		8,082	3,839	1,537	1,470	4,687	6,495	13	41,467
Nonperforming	—		12	6	5	5	41	91	1	161
Total residential mortgage and consumer loans(b)	$	15,344	8,094	3,845	1,542	1,475	4,728	6,586	14	41,628

(a)Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2021, $49 of these loans were 30-89 days past due and $139 were 90 days or more past due. The Bancorp recognized $1 of losses during the three months ended March 31, 2021 due to claim denials and curtailments associated with these insured or guaranteed loans.

(b)Excludes $154 of residential mortgage loans measured at fair value at December 31, 2021.

Summary by Age and Class of the Recorded Investment in Delinquencies Included in the Bancorp's Portfolio of Loans and Leases

The following tables summarize the Bancorp’s amortized cost basis in portfolio commercial loans and leases, by age and class:


	Current Loans and Leases(a)		Past Due			Total Loans and Leases	90 Days Past Due and Still Accruing
As of March 31, 2022 ($ in millions)			30-89 Days(a)	90 Days or More(a)	Total Past Due
Commercial loans and leases:
Commercial and industrial loans(b)	$	53,789	86	34	120	53,909	9
Commercial mortgage owner-occupied loans	4,968		5	3	8	4,976	1
Commercial mortgage nonowner-occupied loans	5,710		5	3	8	5,718	1
Commercial construction loans	5,411		9	—	9	5,420	—
Commercial leases	2,905		7	3	10	2,915	—
Total portfolio commercial loans and leases	$	72,783	112	43	155	72,938	11

(a)Includes accrual and nonaccrual loans and leases.

(b)Includes loans related to the SBA’s Paycheck Protection Program of which $5 were 30-89 days past due and $2 were 90 days or more past due.


	Current Loans and Leases(a)		Past Due			Total Loans and Leases	90 Days Past Due and Still Accruing
As of December 31, 2021 ($ in millions)			30-89 Days(a)	90 Days or More(a)	Total Past Due
Commercial loans and leases:
Commercial and industrial loans(b)	$	51,549	61	49	110	51,659	17
Commercial mortgage owner-occupied loans	4,701		4	4	8	4,709	1
Commercial mortgage nonowner-occupied loans	5,606		—	1	1	5,607	—
Commercial construction loans	5,241		—	—	—	5,241	1
Commercial leases	3,035		16	1	17	3,052	—
Total portfolio commercial loans and leases	$	70,132	81	55	136	70,268	19

(a)Includes accrual and nonaccrual loans and leases.

(b)Includes loans related to the SBA’s Paycheck Protection Program, of which $20 were 30-89 days past due and $6 were 90 days or more past due.

Summary of the Amortized Cost Basis of the Bancorp's Collateral Dependent Loans

The following table presents the amortized cost basis of the Bancorp’s collateral-dependent loans and leases, by portfolio class, as of:


($ in millions)	March 31, 2022		December 31, 2021
Commercial loans and leases:
Commercial and industrial loans	$	470	467
Commercial mortgage owner-occupied loans	15		22
Commercial mortgage nonowner-occupied loans	28		31
Commercial construction loans	56		56
Commercial leases	3		3
Total commercial loans and leases	$	572	579
Residential mortgage loans	57		60
Consumer loans:
Home equity	54		58
Indirect secured consumer loans	7		8

Total consumer loans	$	61	66
Total portfolio loans and leases	$	690	705

Summary of the Bancorp's Nonperforming Loans and Leases by Class

The following table presents the amortized cost basis of the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of:


	March 31, 2022				December 31, 2021
($ in millions)	With an ALLL		No Related ALLL	Total	With an ALLL	No Related ALLL	Total
Commercial loans and leases:
Commercial and industrial loans	$	167	105	272	151	128	279
Commercial mortgage owner-occupied loans	8		12	20	10	13	23
Commercial mortgage nonowner-occupied loans	22		—	22	22	3	25
Commercial construction loans	6		—	6	6	—	6
Commercial leases	3		—	3	3	1	4
Total nonaccrual portfolio commercial loans and leases	$	206	117	323	192	145	337
Residential mortgage loans	45		43	88	14	19	33
Consumer loans:
Home equity	55		22	77	53	24	77
Indirect secured consumer loans	17		5	22	21	6	27
Credit card	23		—	23	23	—	23
Other consumer loans	1		—	1	1	—	1
Total nonaccrual portfolio consumer loans	$	96	27	123	98	30	128
Total nonaccrual portfolio loans and leases(a)(b)	$	347	187	534	304	194	498
OREO and other repossessed property	—		32	32	—	29	29
Total nonperforming portfolio assets(a)(b)	$	347	219	566	304	223	527

(a)Excludes $4 and $15 of nonaccrual loans held for sale as of March 31, 2022 and December 31, 2021, respectively.

(b)Includes $20 and $26 of nonaccrual government insured commercial loans whose repayments are insured by the SBA as of March 31, 2022 and December 31, 2021, respectively, of which $11 are restructured nonaccrual government insured commercial loans as of both March 31, 2022 and December 31, 2021.

Summary of Loans Modified in a TDR

The following tables provide a summary of portfolio loans, by class, modified in a TDR by the Bancorp during the three months ended:


March 31, 2022 ($ in millions)	Number of Loans Modified in a TDR During the Period(a)	Amortized Cost Basis of Loans Modified in a TDR During the Period		Increase (Decrease) to ALLL Upon Modification	Charge-offs Recognized Upon Modification
Commercial loans:
Commercial and industrial loans	30	$	91	13	—
Commercial mortgage owner-occupied loans	5	4		(1)	—

Residential mortgage loans	260	42		3	—
Consumer loans:
Home equity	52	7		(1)	—
Indirect secured consumer loans	1,274	27		—	—
Credit card	1,121	6		2	—
Total portfolio loans	2,742	$	177	16	—

(a)Represents number of loans post-modification and excludes loans previously modified in a TDR.


March 31, 2021 ($ in millions)	Number of Loans Modified in a TDR During the Period(a)	Amortized Cost Basis in Loans Modified in a TDR During the Period		Increase (Decrease) to ALLL Upon Modification	Charge-offs Recognized Upon Modification
Commercial loans:
Commercial and industrial loans	19	$	6	1	—
Commercial mortgage owner-occupied loans	1	4		—	—
Commercial mortgage nonowner-occupied loans	3	25		—	—

Residential mortgage loans	178	36		1	—
Consumer loans:
Home equity	58	3		(1)	—
Indirect secured consumer loans	1,743	43		1	—
Credit card	1,795	10		3	—
Total portfolio loans	3,797	$	127	5	—

(a)Represents number of loans post-modification and excludes loans previously modified in a TDR.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended March 31, 2022 and 2021 and were within 12 months of the restructuring date:


March 31, 2022 ($ in millions)(a)	Number of Contracts	Amortized Cost
Commercial loans:
Commercial and industrial loans	6	$	—


Residential mortgage loans	29	3
Consumer loans:
Home equity	10	1
Indirect secured consumer loans	25	—
Credit card	105	1
Total portfolio loans	175	$	5

(a)Excludes all loans held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.


March 31, 2021 ($ in millions)(a)	Number of Contracts	Amortized Cost
Commercial loans:
Commercial mortgage nonowner-occupied loans	1	$	25
Residential mortgage loans	35	4
Consumer loans:
Home equity	12	1
Indirect secured consumer loans	26	1
Credit card	23	—
Total portfolio loans	97	$	31

(a)Excludes all loans held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.