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

9 Months Ended

Sep. 30, 2015

Credit Quality and the Allowance for Loan and Leases Losses


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

For the three months ended September 30, 2015				Residential
($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	855	104	231	103	1,293
	Losses charged-off		(149)	(6)	(54)	-	(209)
	Recoveries of losses previously charged-off		7	3	11	-	21
	Provision for (benefit from) loan and lease losses		115	(3)	33	11	156
Balance, end of period		$	828	98	221	114	1,261

For the three months ended September 30, 2014				Residential
($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	961	174	221	102	1,458
	Losses charged-off		(72)	(12)	(62)	-	(146)
	Recoveries of losses previously charged-off		17	3	11	-	31
	Provision for (benefit from) loan and lease losses		7	(1)	68	(3)	71
Balance, end of period		$	913	164	238	99	1,414

For the nine months ended September 30, 2015				Residential
($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	875	104	237	106	1,322
	Losses charged-off		(251)	(23)	(163)	-	(437)
	Recoveries of losses previously charged-off		24	9	38	-	71
	Provision for loan and lease losses		180	8	109	8	305
Balance, end of period		$	828	98	221	114	1,261

For the nine months ended September 30, 2014				Residential
($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	1,058	189	225	110	1,582
	Losses charged-off		(236)	(41)	(187)	-	(464)
	Recoveries of losses previously charged-off		31	10	39	-	80
	Provision for loan and lease losses		60	6	161	(11)	216
Balance, end of period		$	913	164	238	99	1,414

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:

					Residential
As of September 30, 2015 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	101	i^(c)	65	50	-	216
	Collectively evaluated for impairment		727		33	171	-	931
	Unallocated		-		-	-	114	114
Total ALLL		$	828		98	221	114	1,261
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	895	i^(c)	613	436	-	1,944
	Collectively evaluated for impairment		56,113		12,604	22,738	-	91,455
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	57,008		13,219	23,174	-	93,401

Includes $5 related to leveraged leases at September 30, 2015.
Excludes $173 of residential mortgage loans measured at fair value, and includes $854 of leveraged leases, net of unearned income at September 30, 2015.
Includes five restructured loans at September 30, 2015 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $28 and an ALLL of $15.


					Residential
As of December 31, 2014 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	179	i^(c)	65	61	-	305
	Collectively evaluated for impairment		696		39	176	-	911
	Unallocated		-		-	-	106	106
Total ALLL		$	875		104	237	106	1,322
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	1,260	i^(c)	518	483	-	2,261
	Collectively evaluated for impairment		52,693		11,761	23,259	-	87,713
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	53,953		12,281	23,742	-	89,976

Includes $6 related to leveraged leases at December 31, 2014.
Excludes $108 of residential mortgage loans measured at fair value, and includes $874 of leveraged leases, net of unearned income at December 31, 2014.
Includes five restructured loans at December 31, 2014 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with a recorded investment of $28 and an ALLL of $10.

Loan and leases balances by credit quality indicator


The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:

			Special
As of September 30, 2015 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,860	1,376	1,712	-	42,948
Commercial mortgage owner-occupied loans		3,427	121	211	-	3,759
Commercial mortgage nonowner-occupied loans		3,076	48	178	-	3,302
Commercial construction loans		3,083	-	12	6	3,101
Commercial leases		3,790	68	40	-	3,898
Total commercial loans and leases	$	53,236	1,613	2,153	6	57,008


			Special
As of December 31, 2014 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,013	1,352	1,400	-	40,765
Commercial mortgage owner-occupied loans		3,430	137	267	-	3,834
Commercial mortgage nonowner-occupied loans		3,198	76	284	7	3,565
Commercial construction loans		1,966	65	38	-	2,069
Commercial leases		3,678	9	33	-	3,720
Total commercial loans and leases	$	50,285	1,639	2,022	7	53,953


The following table presents a summary of the Bancorp’s residential mortgage and consumer portfolio segments, by class, disaggregated into performing versus nonperforming status as of:

		September 30, 2015		December 31, 2014
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	13,164	55	12,204	77
Home equity		8,345	82	8,793	93
Automobile loans		11,824	2	12,036	1
Credit card		2,196	33	2,360	41
Other consumer loans and leases		692	-	418	-
Total residential mortgage and consumer loans and leases^(a)	$	36,221	172	35,811	212

Excludes $173 and $108 of loans measured at fair value at September 30, 2015 and December 31, 2014, respectively.

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


Age Analysis of Past Due Loans and Leases
The following tables summarize the Bancorp’s recorded investment in portfolio loans and leases by age and class:

				Past Due
			Current		90 Days			90 Days Past
As of September 30, 2015			Loans and	30-89	and	Total	Total Loans	Due and Still
($ in millions)			Leases^(c)	Days^(c)	Greater^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	42,862	26	60	86	42,948	3
	Commercial mortgage owner-occupied loans		3,711	10	38	48	3,759	-
	Commercial mortgage nonowner-occupied loans		3,262	19	21	40	3,302	2
	Commercial construction loans		3,101	-	-	-	3,101	-
	Commercial leases		3,896	-	2	2	3,898	-
Residential mortgage loans^{(a) (b)}			13,092	33	94	127	13,219	40
Consumer loans and leases:
	Home equity		8,287	76	64	140	8,427	-
	Automobile loans		11,751	64	11	75	11,826	8
	Credit card		2,178	28	23	51	2,229	17
	Other consumer loans and leases		690	2	-	2	692	-
Total portfolio loans and leases^(a)		$	92,830	258	313	571	93,401	70

Excludes $173 of residential mortgage loans measured at fair value.
Information for current residential mortgage loans includes loans whose repayments are insured by the FHA or guaranteed by the VA. As of September 30, 2015, $99 of these loans were 30-89 days past due and $337 were 90 days or more past due. The Bancorp recognized $2 and $6 of losses during the three and nine months ended September 30, 2015, respectively, due to claim denials and curtailments associated with these insured or guaranteed loans.
Includes accrual and nonaccrual loans and leases.


				Past Due
			Current		90 Days			90 Days Past
As of December 31, 2014			Loans and	30-89	and	Total	Total Loans	Due and Still
($ in millions)			Leases^(c)	Days^(c)	Greater^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	40,651	29	85	114	40,765	-
	Commercial mortgage owner-occupied loans		3,774	7	53	60	3,834	-
	Commercial mortgage nonowner-occupied loans		3,537	11	17	28	3,565	-
	Commercial construction loans		2,069	-	-	-	2,069	-
	Commercial leases		3,717	3	-	3	3,720	-
Residential mortgage loans^{(a) (b)}			12,109	38	134	172	12,281	56
Consumer loans and leases:
	Home equity		8,710	100	76	176	8,886	-
	Automobile loans		11,953	74	10	84	12,037	8
	Credit card		2,335	34	32	66	2,401	23
	Other consumer loans and leases		417	1	-	1	418	-
Total portfolio loans and leases^(a)		$	89,272	297	407	704	89,976	87

Excludes $108 of residential mortgage loans measured at fair value.
Information for current residential mortgage loans includes loans whose repayments are insured by the FHA or guaranteed by the VA. As of December 31, 2014, $99 of these loans were 30-89 days past due and $373 were 90 days or more past due. The Bancorp recognized $2 and $9 of losses during the three and nine months ended September 30, 2014, respectively, due to claim denials and curtailments associated with these insured or guaranteed loans.
Includes accrual and nonaccrual loans and leases.

Summarizes the Bancorp's Recorded Investment in Impaired Loans and Related Allowance by Class


The following tables summarize the Bancorp’s impaired loans and leases (by class) that were subject to individual review, which includes all loans and leases restructured in a TDR:

			Unpaid
As of September 30, 2015			Principal	Recorded
($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	457	308		64
	Commercial mortgage owner-occupied loans^(b)		48	38		9
	Commercial mortgage nonowner-occupied loans		79	68		11
	Commercial construction loans		9	6		-
	Commercial leases		2	2		2
Restructured residential mortgage loans			434	428		65
Restructured consumer loans and leases:
	Home equity		232	232		34
	Automobile loans		18	18		2
	Credit card		62	62		14
Total impaired loans and leases with a related ALLL		$	1,341	1,162		201
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	310	253		-
	Commercial mortgage owner-occupied loans		45	43		-
	Commercial mortgage nonowner-occupied loans		164	145		-
	Commercial construction loans		4	3		-
	Commercial leases		1	1		-
Restructured residential mortgage loans			210	185		-
Restructured consumer loans and leases:
	Home equity		124	121		-
	Automobile loans		3	3		-
Total impaired loans and leases with no related ALLL		$	861	754		-
Total impaired loans and leases		$	2,202	1,916	a^(a)	201

Includes $571, $589 and $384, respectively, of commercial, residential mortgage and consumer TDRs on accrual status and $177, $24 and $52, respectively, of commercial, residential mortgage and consumer TDRs on nonaccrual status at September 30, 2015.
Excludes five restructured loans at September 30, 2015 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $28, a recorded investment of $28, and an allowance of $15.


			Unpaid
As of December 31, 2014			Principal	Recorded
($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	598	486		149
	Commercial mortgage owner-occupied loans^(b)		54	46		14
	Commercial mortgage nonowner-occupied loans		69	57		4
	Commercial construction loans		18	15		-
	Commercial leases		3	3		2
Restructured residential mortgage loans			388	383		65
Restructured consumer loans and leases:
	Home equity		203	201		42
	Automobile loans		19	19		3
	Credit card		78	78		16
Total impaired loans and leases with a related ALLL		$	1,430	1,288		295
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	311	276		-
	Commercial mortgage owner-occupied loans		72	68		-
	Commercial mortgage nonowner-occupied loans		251	231		-
	Commercial construction loans		48	48		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			155	135		-
Restructured consumer loans and leases:
	Home equity		183	180		-
	Automobile loans		5	5		-
Total impaired loans and leases with no related ALLL		$	1,027	945		-
Total impaired loans and leases		$	2,457	2,233	a^(a)	295

Includes $869, $485 and $420, respectively, of commercial, residential mortgage and consumer TDRs on accrual status and $214, $33 and $63, respectively, of commercial, residential mortgage and consumer TDRs on nonaccrual status at December 31, 2014.
Excludes five restructured loans at December 31, 2014 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an unpaid principal balance of $28, a recorded investment of $28, and an allowance of $10.


The following tables summarize the Bancorp’s average impaired loans and leases by class and interest income by class:

			For the three months ended		For the nine months ended
			September 30, 2015		September 30, 2015
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	635	5	696	17
	Commercial mortgage owner-occupied loans^(a)		84	-	98	1
	Commercial mortgage nonowner-occupied loans		210	2	236	5
	Commercial construction loans		35	-	49	1
	Commercial leases		6	-	6	-
Restructured residential mortgage loans			611	6	576	17
Restructured consumer loans and leases:
	Home equity		355	3	366	10
	Automobile loans		21	-	23	-
	Credit card		65	1	70	4
Total average impaired loans and leases		$	2,022	17	2,120	55

Excludes five restructured nonaccrual loans associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $28 and an immaterial amount of interest income recognized for the three months and nine months ended September 30, 2015.


			For the three months ended					For the nine months ended
			September 30, 2014					September 30, 2014
			Average		Interest			Average		Interest
			Recorded		Income			Recorded		Income
($ in millions)			Investment		Recognized			Investment		Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	785		6		$	787		18
	Commercial mortgage owner-occupied loans^(a)		137		1			149		3
	Commercial mortgage nonowner-occupied loans		261		2			264		6
	Commercial construction loans		84		1			100		2
	Commercial leases		10		-			15		-
Restructured residential mortgage loans			1,252		14			1,286		41
Restructured consumer loans and leases:
	Home equity		392		5			398		16
	Automobile loans		23		1			24		1
	Credit card		62		1			58		3
Total average impaired loans and leases			$	3,006		31		$	3,081		90

Excludes five restructured nonaccrual loans associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party, with an average recorded investment of $28 and an immaterial amount of interest income recognized for the three and nine months ended September 30, 2014.

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


Nonperforming Assets
Nonperforming assets include nonaccrual loans and leases for which ultimate collectability of the full amount of the principal and/or interest is uncertain; restructured commercial and credit card loans which have not yet met the requirements to be classified as a performing asset; restructured consumer loans which are 90 days past due based on the restructured terms unless the loan is both well-secured and in the process of collection; and certain other assets, including OREO and other repossessed property. The following table summarizes the Bancorp’s nonperforming loans and leases, by class, as of:

			September 30,	December 31,
($ in millions)			2015	2014
Commercial loans and leases:
	Commercial and industrial loans	$	167	228
	Commercial mortgage owner-occupied loans^(a)		53	78
	Commercial mortgage nonowner-occupied loans		57	57
	Commercial construction loans		6	-
	Commercial leases		3	4
Total nonperforming commercial loans and leases		$	286	367
Residential mortgage loans			55	77
Consumer loans and leases:
	Home equity		82	93
	Automobile loans		2	1
	Credit card		33	41
Total nonperforming consumer loans and leases		$	117	135
Total nonperforming loans and leases^{(b) (c)}		$	458	579
OREO and other repossessed property^(d)		$	148	165	a

Excludes $21 of restructured nonaccrual loans at both September 30, 2015 and December 31, 2014 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party.
Excludes $2 and $39 of nonaccrual loans held for sale at September 30, 2015 and December 31, 2014, respectively.
Includes $8 and $9 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at September 30, 2015 and December 31, 2014, respectively, and $4 of restructured nonaccrual government insured commercial loans at both September 30, 2015 and December 31, 2014.
Excludes $18 and $71 of OREO related to government insured loans at September 30, 2015 and December 31, 2014, respectively. The Bancorp has historically excluded government guaranteed loans classified in OREO from its nonperforming asset disclosures. Upon the prospective adoption on January 1, 2015 of ASU 2014-14 “Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure,” government guaranteed loans meeting certain criteria will be reclassified to other receivables rather than OREO upon foreclosure. At September 30, 2015, the Bancorp had $40 of government guaranteed loans classified as other receivables. Refer to Note 3 for further information on the adoption of this amended guidance.

Summary of Loans Modified in a TDR


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

			Recorded investment
		Number of loans	in loans modified		Increase	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
September 30, 2015 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	15	$	17	7	-
	Commercial mortgage owner-occupied loans	1		-	-	-
Residential mortgage loans		301		44	3	-
Consumer loans and leases:
	Home equity	60		4	-	-
	Automobile loans	98		2	-	-
	Credit card	3,076		15	3	2
Total portfolio loans and leases		3,551	$	82	13	2

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
Represents number of loans post-modification and excludes loans previously modified in a TDR.


			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
September 30, 2014 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	17	$	35	10	-
	Commercial mortgage owner-occupied loans	5		2	-	-
	Commercial mortgage nonowner-occupied loans	8		4	(1)	-
Residential mortgage loans		240		35	2	-
Consumer loans and leases:
	Home equity	106		5	-	-
	Automobile loans	172		3	-	-
	Credit card	1,670		11	2	-
Total portfolio loans and leases		2,218	$	95	13	-

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
Represents number of loans post-modification and excludes loans previously modified in a TDR.


The following tables provide a summary of loans modified in a TDR by the Bancorp during the nine months ended:

			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
September 30, 2015 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	63	$	105	7	3
	Commercial mortgage owner-occupied loans	14		15	(2)	-
	Commercial mortgage nonowner-occupied loans	11		7	-	-
Residential mortgage loans		855		121	7	-
Consumer loans and leases:
	Home equity	203		11	(1)	-
	Automobile loans	357		6	-	-
	Credit card	9,724		49	10	5
Total portfolio loans and leases		11,227	$	314	21	8

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
Represents number of loans post-modification and excludes loans previously modified in a TDR.


			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
September 30, 2014 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	83	$	154	12	-
	Commercial mortgage owner-occupied loans	25		53	(1)	-
	Commercial mortgage nonowner-occupied loans	19		11	(2)	-
Residential mortgage loans		812		119	7	-
Consumer loans and leases:
	Home equity	212		9	-	-
	Automobile loans	431		7	-	-
	Credit card	5,334		34	6	-
Total portfolio loans and leases		6,916	$	387	22	-

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.
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 subsequent defaults of TDRs that occurred during the three months ended September 30, 2015 and 2014 and within 12 months of the restructuring date:

		Number of		Recorded
September 30, 2015 ($ in millions)^(a)		Contracts		Investment
Residential mortgage loans		31	$	5
Consumer loans and leases:
	Home equity	4		-
	Credit card	140		-
Total portfolio loans and leases		175	$	5

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.


		Number of		Recorded
September 30, 2014 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial mortgage owner-occupied loans	1	$	1
	Commercial mortgage nonowner-occupied loans	2		1
Residential mortgage loans		100		12
Consumer loans and leases:
	Home equity	4		-
	Automobile loans	2		-
	Credit card	385		2
Total portfolio loans and leases		494	$	16

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.


The following tables provide a summary of subsequent defaults that occurred during the nine months ended September 30, 2015 and 2014 and within 12 months of the restructuring date:

		Number of		Recorded
September 30, 2015 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	4	$	7
Residential mortgage loans		101		14
Consumer loans and leases:
	Home equity	12		1
	Automobile loans	8		-
	Credit card	1,285		6
Total portfolio loans and leases		1,410	$	28

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.


		Number of		Recorded
September 30, 2014 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	9	$	20
	Commercial mortgage owner-occupied loans	3		4
	Commercial mortgage nonowner-occupied loans	2		1
Residential mortgage loans		181		24
Consumer loans and leases:
	Home equity	24		1
	Automobile loans	6		-
	Credit card	1,255		8
Total portfolio loans and leases		1,480	$	58

Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality.