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Credit Quality and the Allowance for Loan and Lease Losses

12 Months Ended

Dec. 31, 2015

Credit Quality and the Allowance for Loan and Leases Losses

Credit Quality and the Allowance for Loan and Lease Losses

6. CREDIT QUALITY AND THE ALLOWANCE FOR LOAN AND LEASE LOSSES

The Bancorp disaggregates ALLL balances and transactions in the ALLL by portfolio segment. Credit quality related disclosures for loans and leases are further disaggregated by class.

Allowance for Loan and Lease Losses

The following tables summarize transactions in the ALLL by portfolio segment for the years ended December 31:

				Residential
2015 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	875	104	237	106	1,322
	Losses charged-off		(298)	(28)	(216)	-	(542)
	Recoveries of losses previously charged-off		37	11	48	-	96
	Provision for loan and lease losses		226	13	148	9	396
Balance, end of period		$	840	100	217	115	1,272

				Residential
2014 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	1,058	189	225	110	1,582
	Losses charged-off		(299)	(139)	(241)	-	(679)
	Recoveries of losses previously charged-off		38	13	53	-	104
	Provision for loan and lease losses		78	41	200	(4)	315
Balance, end of period		$	875	104	237	106	1,322

				Residential
2013 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	1,236	229	278	111	1,854
	Losses charged-off		(284)	(70)	(283)	-	(637)
	Recoveries of losses previously charged-off		64	10	62	-	136
	Provision for loan and lease losses		42	20	168	(1)	229
Balance, end of period		$	1,058	189	225	110	1,582


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

					Residential
As of December 31, 2015 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	119	a^(c)	67	49	-	235
	Collectively evaluated for impairment		721		33	168	-	922
	Unallocated		-		-	-	115	115
Total ALLL		$	840		100	217	115	1,272
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	815	a^(c)	630	424	-	1,869
	Collectively evaluated for impairment		55,341		12,917	22,286	-	90,544
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	56,156		13,549	22,710	-	92,415

Includes $5 related to leveraged leases at December 31, 2015.
Excludes $167 of residential mortgage loans measured at fair value and includes $801 of leveraged leases, net of unearned income, at December 31, 2015.
Includes five restructured loans at December 31, 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 $27 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	a^(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	a^(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.

CREDIT RISK PROFILE

Commercial Portfolio Segment

For purposes of monitoring the credit quality and risk characteristics of its commercial portfolio segment, the Bancorp disaggregates the segment into the following classes: commercial and industrial, commercial mortgage owner-occupied, commercial mortgage nonowner-occupied, commercial construction and commercial leases.

To facilitate the monitoring of credit quality within the commercial portfolio segment, and for purposes of analyzing historical loss rates used in the determination of the ALLL for the commercial portfolio segment, the Bancorp utilizes the following categories of credit grades: pass, special mention, substandard, doubtful and loss. The five categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter.

Pass ratings, which are assigned to those borrowers that do not have identified potential or well defined weaknesses and for which there is a high likelihood of orderly repayment, are updated at least annually based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter.

The Bancorp assigns a special mention rating to loans and leases that have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the loan or lease or the Bancorp's credit position.

The Bancorp assigns a substandard rating to loans and leases that are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged. Substandard loans and leases have well defined weaknesses or weaknesses that could jeopardize the orderly repayment of the debt. Loans and leases in this grade also are characterized by the distinct possibility that the Bancorp will sustain some loss if the deficiencies noted are not addressed and corrected.

The Bancorp assigns a doubtful rating to loans and leases that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.

Loans and leases classified as loss are considered uncollectible and are charged-off in the period in which they are determined to be uncollectible. Because loans and leases in this category are fully charged-off, they are not included in the following tables.

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

			Special
As of December 31, 2015 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,756	1,633	1,742	-	42,131
Commercial mortgage owner-occupied loans		3,344	124	191	-	3,659
Commercial mortgage nonowner-occupied loans		3,105	63	130	-	3,298
Commercial construction loans		3,201	4	9	-	3,214
Commercial leases		3,724	93	37	-	3,854
Total commercial loans and leases	$	52,130	1,917	2,109	-	56,156


			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

Residential Mortgage and Consumer Portfolio Segments

For purposes of monitoring the credit quality and risk characteristics of its consumer portfolio segment, the Bancorp disaggregates the segment into the following classes: home equity, automobile loans, credit card and other consumer loans and leases. The Bancorp's residential mortgage portfolio segment is also a separate class.

The Bancorp considers repayment performance as the best indicator of credit quality for residential mortgage and consumer loans, which includes both the delinquency status and performing versus nonperforming status of the loans. The delinquency status of all residential mortgage and consumer loans is presented by class in the age analysis section while the performing versus nonperforming status is presented in the following table. Refer to the nonaccrual loans and leases section of Note 1 for additional delinquency and nonperforming information.


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 December 31:

		2015		2014
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	13,498	51	12,204	77
Home equity		8,222	79	8,793	93
Automobile loans		11,491	2	12,036	1
Credit card		2,226	33	2,360	41
Other consumer loans and leases		657	-	418	-
Total residential mortgage and consumer loans and leases^(a)	$	36,094	165	35,811	212

Excludes $167 and $108 of loans measured at fair value at December 31, 2015 and 2014, respectively.

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:

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2015 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,996	55	80	135	42,131	7
	Commercial mortgage owner-occupied loans		3,610	15	34	49	3,659	-
	Commercial mortgage nonowner-occupied loans		3,262	9	27	36	3,298	-
	Commercial construction loans		3,214	-	-	-	3,214	-
	Commercial leases		3,850	3	1	4	3,854	-
Residential mortgage loans^(a)(b)			13,420	37	92	129	13,549	40
Consumer loans and leases:
	Home equity		8,158	82	61	143	8,301	-
	Automobile loans		11,407	75	11	86	11,493	10
	Credit card		2,207	29	23	52	2,259	18
	Other consumer loans and leases		656	1	-	1	657	-
Total portfolio loans and leases^(a)		$	91,780	306	329	635	92,415	75

Excludes $167 of residential mortgage loans measured at fair value at December 31, 2015.
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, 2015, $102 of these loans were 30-89 days past due and $335 were 90 days or more past due. The Bancorp recognized $8 of losses during the year ended December 31, 2015 due to claim denials and curtailments associated with these insured or guaranteed loans.
Includes accrual and nonaccrual loans and leases.


			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2014 ($ in millions)			Leases^(c)	Days^(c)	or More^(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 at December 31, 2014.
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, 2014, $99 of these loans were 30-89 days past due and $373 were 90 days or more past due. The Bancorp recognized $14 of losses during the year ended December 31, 2014 due to claim denials and curtailments associated with these insured or guaranteed loans.
Includes accrual and nonaccrual loans and leases.

Impaired Portfolio Loans and Leases

Larger commercial loans and leases included within aggregate borrower relationship balances exceeding $1 million that exhibit probable or observed credit weaknesses are subject to individual review for impairment. The Bancorp also performs an individual review on loans and leases that are restructured in a TDR. The Bancorp considers the current value of collateral, credit quality of any guarantees, the loan structure and other factors when evaluating whether an individual loan or lease is impaired. Other factors may include the geography and industry of the borrower, size and financial condition of the borrower, cash flow and leverage of the borrower and the Bancorp's evaluation of the borrower's management. Smaller-balance homogenous loans or leases that are collectively evaluated for impairment are not included in the following tables.


The following tables summarize the Bancorp’s impaired portfolio loans and leases, by class, that were subject to individual review, which includes all portfolio loans and leases restructured in a TDR as of December 31:

			Unpaid
			Principal	Recorded
2015 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	412	346		84
	Commercial mortgage owner-occupied loans^(b)		28	21		5
	Commercial mortgage nonowner-occupied loans		75	64		12
	Commercial construction loans		4	4		2
	Commercial leases		3	3		1
Restructured residential mortgage loans			450	444		67
Restructured consumer loans and leases:
	Home equity		226	225		32
	Automobile loans		17	16		2
	Credit card		61	61		15
Total impaired portfolio loans and leases with a related ALLL		$	1,276	1,184		220
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	228	182		-
	Commercial mortgage owner-occupied loans		54	51		-
	Commercial mortgage nonowner-occupied loans		126	111		-
	Commercial construction loans		9	5		-
	Commercial leases		1	1		-
Restructured residential mortgage loans			210	186		-
Restructured consumer loans and leases:
	Home equity		122	119		-
	Automobile loans		3	3		-
Total impaired portfolio loans and leases with no related ALLL			753	658		-
Total impaired portfolio loans and leases		$	2,029	1,842	a^(a)	220

Includes $491, $607 and $372, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $203, $23 and $52, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2015.
Excludes five restructured loans at December 31, 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 $27, a recorded investment of $27 and an ALLL of $15.


			Unpaid
			Principal	Recorded
2014 ($ 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 portfolio 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 portfolio loans and leases with no related ALLL			1,027	945		-
Total impaired portfolio loans and leases		$	2,457	2,233	a^(a)	295

Includes $869, $485 and $420, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $214, $33 and $63, respectively, of commercial, residential mortgage and consumer portfolio 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 ALLL of $10.


The following table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class, for the years ended December 31:

			2015		2014			2013
			Average	Interest	Average	Interest		Average	Interest
			Recorded	Income	Recorded	Income		Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized		Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	663	21	786		25	517		16
	Commercial mortgage owner-occupied loans^(a)		92	2	149		4	146		4
	Commercial mortgage nonowner-occupied loans		224	7	268		8	321		8
	Commercial construction loans		41	1	92		2	108		4
	Commercial leases		5	-	13		-	11		-
Restructured residential mortgage loans			586	23	1,273		54	1,311		53
Restructured consumer loans and leases:
	Home equity		361	13	394		20	429		23
	Automobile loans		22	1	24		1	29		1
	Credit card		68	6	62		5	68		4
	Other consumer loans and leases		-	-	-		-	2		-
Total average impaired portfolio loans and leases		$	2,062	74	3,061		119	2,942		113

Excludes five restructured 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 $27 for the year ended December 31, 2015 and $28 for both of the years ended December 31, 2014 and 2013. An immaterial amount of interest income was recognized during the years ended December 31, 2015, 2014 and 2013.

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 presents the Bancorp’s nonperforming loans and leases, by class, and OREO and other repossessed property as of December 31:

($ in millions)			2015	2014
Commercial loans and leases:
	Commercial and industrial loans	$	259	228
	Commercial mortgage owner-occupied loans^(a)		46	78
	Commercial mortgage nonowner-occupied loans		35	57
	Commercial leases		1	4
Total nonaccrual portfolio commercial loans and leases			341	367
Residential mortgage loans			51	77
Consumer loans and leases:
	Home equity		79	93
	Automobile loans		2	1
	Credit card		33	41
Total nonaccrual portfolio consumer loans and leases			114	135
Total nonaccrual portfolio loans and leases^(b)(c)		$	506	579
OREO and other repossessed property^(d)			141	165
Total nonperforming portfolio assets^(b)(c)(d)		$	647	744

Excludes $20 and $21 of restructured nonaccrual loans at December 31, 2015 and 2014, respectively, associated with a consolidated VIE in which the Bancorp has no continuing credit risk due the risk being assumed by a third party.
Excludes $12 and $39 of nonaccrual loans held for sale at December 31, 2015 and 2014, respectively.
Includes $6 and $9 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at December 31, 2015 and 2014, respectively, and $2 and $4 of restructured nonaccrual government insured commercial loans at December 31, 2015 and 2014, respectively.
Excludes $14 and $71 of OREO related to government insured loans at December 31, 2015 and 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 were reclassified to other receivables rather than OREO upon foreclosure. At December 31, 2015, the Bancorp had $44 of government guaranteed loans classified as other receivables. Refer to Note 1 for further information on the adoption of this amended guidance.

The Bancorp's recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction was $303 million as of December 31, 2015.

Troubled Debt Restructurings

If a borrower is experiencing financial difficulty, the Bancorp may consider, in certain circumstances, modifying the terms of their loan to maximize collection of amounts due. Within each of the Bancorp's loan classes, TDRs typically involve either a reduction of the stated interest rate of the loan, an extension of the loan's maturity date with a stated rate lower than the current market rate for a new loan with similar risk, or in limited circumstances, a reduction of the principal balance of the loan or the loan's accrued interest. Modifying the terms of a loan may result in an increase or decrease to the ALLL depending upon the terms modified, the method used to measure the ALLL for a loan prior to modification, and whether any charge-offs were recorded on the loan before or at the time of modification. Refer to the ALLL section of Note 1 for information on the Bancorp's ALLL methodology. Upon modification of a loan, the Bancorp measures the related impairment as the difference between the estimated future cash flows expected to be collected on the modified loan, discounted at the original effective yield of the loan, and the carrying value of the loan. The resulting measurement may result in the need for minimal or no valuation allowance because it is probable that all cash flows will be collected under the modified terms of the loan. In addition, if the stated interest rate was increased in a TDR, the cash flows on the modified loan, using the pre-modification interest rate as the discount rate, often exceed the recorded investment of the loan. Conversely, upon a modification that reduces the stated interest rate on a loan, the Bancorp recognizes an impairment loss as an increase to the ALLL. If a TDR involves a reduction of the principal balance of the loan or the loan's accrued interest, that amount is charged-off to the ALLL.

As of December 31, 2015, the Bancorp had $39 million and $23 million in line of credit and letter of credit commitments, respectively, compared to $63 million and $26 million in line of credit and letter of credit commitments as of December 31, 2014, respectively, to lend additional funds to borrowers whose terms have been modified in a TDR.


The following tables provide a summary of loans by class modified in a TDR by the Bancorp during the years ended December 31:

			Recorded investment		Increase
		Number of loans	in loans modified		(Decrease)	Charge-offs
		modified in a TDR	in a TDR		to ALLL upon	recognized upon
2015 ($ in millions)^(a)		during the year^(b)	during the year		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	77	$	146	7	3
	Commercial mortgage owner-occupied loans	18		16	(2)	-
	Commercial mortgage nonowner-occupied loans	12		7	(1)	-
Residential mortgage loans		1,089		155	8	-
Consumer loans and leases:
	Home equity	267		16	(1)	-
	Automobile loans	440		7	1	-
	Credit card	12,569		62	11	7
Total portfolio loans and leases		14,472	$	409	23	10

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
2014 ($ in millions)^(a)		during the year^(b)	during the year		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	128	$	230	12	6
	Commercial mortgage owner-occupied loans	32		54	(1)	-
	Commercial mortgage nonowner-occupied loans	28		30	(3)	2
Residential mortgage loans		1,093		160	8	-
Consumer loans and leases:
	Home equity	284		12	-	-
	Automobile loans	608		10	1	-
	Credit card	8,929		52	10	-
Total portfolio loans and leases		11,102	$	548	27	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
2013 ($ in millions)^(a)		during the year^(b)	during the year		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	146	$	604	39	44
	Commercial mortgage owner-occupied loans^(c)	65		19	(2)	-
	Commercial mortgage nonowner-occupied loans	59		72	(7)	-
	Commercial construction loans	4		34	(2)	-
	Commercial leases	1		2	(5)	-
Residential mortgage loans		1,620		249	28	-
Consumer loans and leases:
	Home equity	695		37	(1)	-
	Automobile loans	499		14	1	-
	Credit card	8,202		50	7	-
Total portfolio loans and leases		11,291	$	1,081	58	44

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.
Excludes five loans modified in a TDR during the year ended December 31, 2013 associated with a consolidated VIE in which the Bancorp has no continuing credit risk due to the risk being assumed by a third party. The TDR had a recorded investment of $29 at modification, the ALLL increased $7 upon modification and a charge-off of $2 was recognized upon modification.

The Bancorp considers TDRs that become 90 days or more past due under the modified terms as subsequently defaulted. For commercial loans not subject to individual review for impairment, loss rates that are applied for purposes of determining the ALLL include historical losses associated with subsequent defaults on loans previously modified in a TDR. For consumer loans, the Bancorp performs a qualitative assessment of the adequacy of the consumer ALLL by comparing the consumer ALLL to forecasted consumer losses over the projected loss emergence period (the forecasted losses include the impact of subsequent defaults of consumer TDRs). When a residential mortgage, home equity, automobile or other consumer loan that has been modified in a TDR subsequently defaults, the present value of expected cash flows used in the measurement of the potential impairment loss is generally limited to the expected net proceeds from the sale of the loan's underlying collateral and any resulting impairment loss is reflected as a charge-off or an increase in ALLL. The Bancorp recognizes ALLL for the entire balance of the credit card loans modified in a TDR that subsequently default.


The following tables provide a summary of TDRs that subsequently defaulted during the years ended December 31, 2015, 2014 and 2013 that was within twelve months of the restructuring date:

		Number of		Recorded
December 31, 2015 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	7	$	11
	Commercial mortgage owner-occupied loans	3		1
Residential mortgage loans		156		21
Consumer loans and leases:
	Home equity	15		1
	Automobile loans	8		-
	Credit card	1,935		8
Total portfolio loans and leases		2,124	$	42

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


		Number of		Recorded
December 31, 2014 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	11	$	36
	Commercial mortgage owner-occupied loans	3		4
	Commercial mortgage nonowner-occupied loans	2		1
Residential mortgage loans		235		32
Consumer loans and leases:
	Home equity	30		2
	Automobile loans	6		-
	Credit card	2,059		12
Total portfolio loans and leases		2,346	$	87

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


		Number of		Recorded
December 31, 2013 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	6	$	11
	Commercial mortgage owner-occupied loans	7		1
Residential mortgage loans		375		58
Consumer loans and leases:
	Home equity	65		4
	Automobile loans	4		-
	Credit card	1,768		11
Total portfolio loans and leases		2,225	$	85

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