Loans and Leases

6 Months Ended

Jun. 30, 2016

5. Loans and Leases

The Bancorp diversifies its loan and lease portfolio by offering a variety of loan and lease products with various payment terms and rate structures. Lending activities are generally concentrated within those states in which the Bancorp has banking centers and are primarily located in the Midwestern and Southeastern regions of the United States. The Bancorp’s commercial loan portfolio consists of lending to various industry types. Management periodically reviews the performance of its loan and lease products to evaluate whether they are performing within acceptable interest rate and credit risk levels and changes are made to underwriting policies and procedures as needed. The Bancorp maintains an allowance to absorb loan and lease losses inherent in the portfolio. For further information on credit quality and the ALLL, refer to Note 6.

The following table provides a summary of commercial loans and leases classified by primary purpose and consumer loans and leases classified based upon product or collateral as of:

			June 30,	December 31,
($ in millions)			2016	2015
Loans held for sale:
	Commercial and industrial loans	$	17	20
	Commercial mortgage loans		8	34
	Residential mortgage loans		852	708
	Home equity		-	35
	Automobile loans		-	4
	Credit card		-	101
	Other consumer loans and leases		-	1
Total loans held for sale		$	877	903
Portfolio loans and leases:
	Commercial and industrial loans	$	43,558	42,131
	Commercial mortgage loans		6,875	6,957
	Commercial construction loans		3,706	3,214
	Commercial leases		3,978	3,854
Total commercial loans and leases		$	58,117	56,156
	Residential mortgage loans		14,307	13,716
	Home equity		7,988	8,301
	Automobile loans		10,671	11,493
	Credit card		2,172	2,259
	Other consumer loans and leases		654	657
Total consumer loans and leases		$	35,792	36,426
Total portfolio loans and leases		$	93,909	92,582

Total portfolio loans and leases are recorded net of unearned income, which totaled $587 million as of June 30, 2016 and $624 million as of December 31, 2015. Additionally, portfolio loans and leases are recorded net of unamortized premiums and discounts, deferred loan fees and costs and fair value adjustments (associated with acquired loans or loans designated at fair value upon origination) which totaled a net premium of $227 million and $220 million as of June 30, 2016 and December 31, 2015, respectively.

The Bancorp’s FHLB and FRB advances are generally secured by loans. The Bancorp had loans of $12.7 billion and $11.9 billion at June 30, 2016 and December 31, 2015, respectively, pledged at the FHLB, and loans of $33.2 billion and $33.7 billion at June 30, 2016 and December 31, 2015, respectively, pledged at the FRB.

The following table presents a summary of the total loans and leases owned by the Bancorp as of:

		June 30,	December 31,	June 30,	December 31,
		2016	2015	2016	2015
				90 Days Past Due
($ in millions)		Carrying Value		and Still Accruing
Commercial and industrial loans	$	43,575	42,151	2	7
Commercial mortgage loans		6,883	6,991	-	-
Commercial construction loans		3,706	3,214	-	-
Commercial leases		3,978	3,854	-	-
Residential mortgage loans		15,159	14,424	38	40
Home equity		7,988	8,336	-	-
Automobile loans		10,671	11,497	7	10
Credit card		2,172	2,360	18	18
Other consumer loans and leases		654	658	-	-
Total loans and leases	$	94,786	93,485	65	75
Less: Loans held for sale		877	903
Total portfolio loans and leases	$	93,909	92,582

The following table presents a summary of net charge-offs (recoveries):

		For the three months ended		For the six months ended
		June 30,		June 30,
($ in millions)		2016	2015	2016	2015
Commercial and industrial loans	$	39	34	86	72
Commercial mortgage loans		6	11	13	12
Commercial construction loans		-	-	(1)	-
Commercial leases		1	-	3	-
Residential mortgage loans		2	5	5	11
Home equity		6	9	13	22
Automobile loans		8	4	16	12
Credit card		21	21	41	42
Other consumer loans and leases		4	2	7	6
Total net charge-offs	$	87	86	183	177