Credit Quality and the Allowance for Loan and Lease Losses

6 Months Ended

Jun. 30, 2016

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:

				Residential
For the three months ended June 30, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	867	98	214	116	1,295
	Losses charged-off		(51)	(5)	(49)	-	(105)
	Recoveries of losses previously charged-off		5	3	10	-	18
	Provision for loan and lease losses		52	2	36	1	91
Balance, end of period		$	873	98	211	117	1,299

				Residential
For the three months ended June 30, 2015 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	852	103	241	104	1,300
	Losses charged-off		(54)	(8)	(50)	-	(112)
	Recoveries of losses previously charged-off		9	3	14	-	26
	Provision for loan and lease losses		48	6	26	(1)	79
Balance, end of period		$	855	104	231	103	1,293

				Residential
For the six months ended June 30, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	840	100	217	115	1,272
	Losses charged-off		(112)	(10)	(100)	-	(222)
	Recoveries of losses previously charged-off		11	5	23	-	39
	Provision for loan and lease losses		134	3	71	2	210
Balance, end of period		$	873	98	211	117	1,299

				Residential
For the six months ended June 30, 2015 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	875	104	237	106	1,322
	Losses charged-off		(102)	(17)	(108)	-	(227)
	Recoveries of losses previously charged-off		18	6	26	-	50
	Provision for loan and lease losses		64	11	76	(3)	148
Balance, end of period		$	855	104	231	103	1,293

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

					Residential
As of June 30, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	97	^(c)	67	46	-	210
	Collectively evaluated for impairment		776		31	165	-	972
	Unallocated		-		-	-	117	117
Total ALLL		$	873		98	211	117	1,299
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	1,011	^(c)	649	399	-	2,059
	Collectively evaluated for impairment		57,106		13,501	21,086	-	91,693
	Loans acquired with deteriorated credit quality		-		3	-	-	3
Total portfolio loans and leases		$	58,117		14,153	21,485	-	93,755

Includes $3 related to leveraged leases at June 30, 2016.
Excludes $154 of residential mortgage loans measured at fair value, and includes $818 of leveraged leases, net of unearned income at June 30, 2016.
Includes five restructured loans at June 30, 2016 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 $18.


					Residential
As of December 31, 2015 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	119	^(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	^(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.

CREDIT RISK PROFILE

Commercial Portfolio Segment

For purposes of analyzing historical loss rates used in the determination of the ALLL and 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 June 30, 2016 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,995	1,588	1,975	-	43,558
Commercial mortgage owner-occupied loans		3,263	102	157	-	3,522
Commercial mortgage nonowner-occupied loans		3,220	30	103	-	3,353
Commercial construction loans		3,705	1	-	-	3,706
Commercial leases		3,894	50	34	-	3,978
Total commercial loans and leases	$	54,077	1,771	2,269	-	58,117

			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

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 in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2015 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:

		June 30, 2016		December 31, 2015
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	14,110	43	13,498	51
Home equity		7,909	79	8,222	79
Automobile loans		10,669	2	11,491	2
Credit card		2,142	30	2,226	33
Other consumer loans and leases		654	-	657	-
Total residential mortgage and consumer loans and leases^(a)	$	35,484	154	36,094	165

(a) Excludes $154 and $167 of loans measured at fair value at June 30, 2016 and December 31, 2015, 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 June 30, 2016 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	43,415	43	100	143	43,558	2
	Commercial mortgage owner-occupied loans		3,488	9	25	34	3,522	-
	Commercial mortgage nonowner-occupied loans		3,331	-	22	22	3,353	-
	Commercial construction loans		3,706	-	-	-	3,706	-
	Commercial leases		3,975	-	3	3	3,978	-
Residential mortgage loans^(a)(b)			14,039	33	81	114	14,153	38
Consumer loans and leases:
	Home equity		7,862	68	58	126	7,988	-
	Automobile loans		10,595	67	9	76	10,671	7
	Credit card		2,124	25	23	48	2,172	18
	Other consumer loans and leases		653	1	-	1	654	-
Total portfolio loans and leases^(a)		$	93,188	246	321	567	93,755	65

Excludes $154 of residential mortgage loans measured at fair value at June 30, 2016.
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 June 30, 2016, $108 of these loans were 30-89 days past due and $284 were 90 days or more past due. The Bancorp recognized $1 and $3 of losses during the three and six months ended June 30, 2016, respectively, 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, 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 $2 and $4 of losses during the three and six months ended June 30, 2015, respectively, 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:

			Unpaid
			Principal	Recorded
As of June 30, 2016 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	442	360		73
	Commercial mortgage owner-occupied loans^(b)		25	17		2
	Commercial mortgage nonowner-occupied loans		62	54		4
Restructured residential mortgage loans			458	445		67
Restructured consumer loans and leases:
	Home equity		216	215		32
	Automobile loans		15	15		2
	Credit card		56	56		12
Total impaired portfolio loans and leases with a related ALLL		$	1,274	1,162		192
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	472	403		-
	Commercial mortgage owner-occupied loans		52	47		-
	Commercial mortgage nonowner-occupied loans		109	96		-
	Commercial leases		7	7		-
Restructured residential mortgage loans			218	204		-
Restructured consumer loans and leases:
	Home equity		114	111		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	975	870		-
Total impaired portfolio loans and leases		$	2,249	2,032	a^(a)	192

Includes $431, $633 and $349, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $242, $16 and $50, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at June 30, 2016.
Excludes five restructured loans at June 30, 2016 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 $18.


			Unpaid
			Principal	Recorded
As of December 31, 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.


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

			For the three months ended		For the six months ended
			June 30, 2016		June 30, 2016
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	762	2	684	4
	Commercial mortgage owner-occupied loans^(a)		68	-	69	1
	Commercial mortgage nonowner-occupied loans		152	1	160	3
	Commercial construction loans		2	-	4	-
	Commercial leases		6	-	5	-
Restructured residential mortgage loans			651	6	644	12
Restructured consumer loans and leases:
	Home equity		329	3	336	6
	Automobile loans		18	-	18	-
	Credit card		57	1	58	3
Total average impaired portfolio loans and leases		$	2,045	13	1,978	29

(a) 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 and an immaterial amount of interest income recognized for both the three and six months ended June 30, 2016.


			For the three months ended			For the six months ended
			June 30, 2015			June 30, 2015
			Average	Interest		Average	Interest
			Recorded	Income		Recorded	Income
($ in millions)			Investment	Recognized		Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	731	6	$	741	12
	Commercial mortgage owner-occupied loans^(a)		98	-		103	1
	Commercial mortgage nonowner-occupied loans		222	2		244	3
	Commercial construction loans		61	-		62	1
	Commercial leases		7	-		6	-
Restructured residential mortgage loans			579	6		563	11
Restructured consumer loans and leases:
	Home equity		363	3		370	7
	Automobile loans		22	-		23	-
	Credit card		69	1		72	3
Total average impaired loans and leases		$	2,152	18	$	2,184	38

(a) 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 $28 and an immaterial amount of interest income recognized for both the three and six months ended June 30, 2015.


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 nonaccrual loans and leases, by class, and OREO and other repossessed property as of:

			June 30,	December 31,
($ in millions)			2016	2015
Commercial loans and leases:
	Commercial and industrial loans	$	467	259
	Commercial mortgage owner-occupied loans^(a)		41	46
	Commercial mortgage nonowner-occupied loans		27	35
	Commercial leases		4	1
Total nonaccrual portfolio commercial loans and leases			539	341
Residential mortgage loans			43	51
Consumer loans and leases:
	Home equity		79	79
	Automobile loans		2	2
	Credit card		30	33
Total nonaccrual portfolio consumer loans and leases			111	114
Total nonaccrual portfolio loans and leases^(b)(c)		$	693	506
OREO and other repossessed property			112	141	a
Total nonperforming portfolio assets^(b)(c)		$	805	647

Excludes $20 of restructured nonaccrual loans at both June 30, 2016 and 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.
Excludes $20 and $12 of nonaccrual loans held for sale at June 30, 2016 and December 31, 2015, respectively.
Includes $4 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at June 30, 2016 and December 31, 2015, respectively, and $1 and $2 of restructured nonaccrual government insured commercial loans at June 30, 2016 and December 31, 2015, respectively.

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 $264 million and $303 million as of June 30, 2016 and December 31, 2015, respectively.

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 in the Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2015 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 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 June 30, 2016, the Bancorp had $87 million and $58 million in line of credit and letter of credit commitments, respectively, compared to $39 million and $23 million in line of credit and letter of credit commitments as of December 31, 2015, 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 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
June 30, 2016 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	20	$	61	11	-
	Commercial mortgage owner-occupied loans	3		2	-	-
	Commercial mortgage nonowner-occupied loans	2		5	1	-
Residential mortgage loans		262		37	2	-
Consumer loans:
	Home equity	62		2	-	-
	Automobile loans	58		1	-	-
	Credit card	2,262		11	2	1
Total portfolio loans		2,669	$	119	16	1

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
June 30, 2015 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	27	$	70	7	-
	Commercial mortgage owner-occupied loans	6		7	(1)	-
	Commercial mortgage nonowner-occupied loans	5		4	-	-
Residential mortgage loans		254		35	3	-
Consumer loans:
	Home equity	67		3	(1)	-
	Automobile loans	128		2	-	-
	Credit card	2,981		15	3	3
Total portfolio loans		3,468	$	136	11	3

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 six 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
June 30, 2016 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	44	$	117	9	-
	Commercial mortgage owner-occupied loans	10		8	(2)	-
	Commercial mortgage nonowner-occupied loans	4		5	1	-
Residential mortgage loans		505		73	4	-
Consumer loans:
	Home equity	126		7	-	-
	Automobile loans	136		2	-	-
	Credit card	4,854		23	4	2
Total portfolio loans		5,679	$	235	16	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
June 30, 2015 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	48	$	88	-	3
	Commercial mortgage owner-occupied loans	13		15	(2)	-
	Commercial mortgage nonowner-occupied loans	11		7	-	-
Residential mortgage loans		554		77	4	-
Consumer loans:
	Home equity	143		7	(1)	-
	Automobile loans	259		4	-	-
	Credit card	6,648		34	7	3
Total portfolio loans		7,676	$	232	8	6

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 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 three months ended June 30, 2016 and 2015 and were within twelve months of the restructuring date:

		Number of		Recorded
June 30, 2016 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	3
	Commercial mortgage nonowner-occupied loans	1		-
Residential mortgage loans		33		5
Consumer loans:
	Home equity	2		-
	Credit card	351		1
Total portfolio loans		389	$	9

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

		Number of		Recorded
June 30, 2015 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	4	$	7
Residential mortgage loans		30		4
Consumer loans:
	Home equity	3		-
	Automobile loans	4		-
	Credit card	557		3
Total portfolio loans		598	$	14

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

The following tables provide a summary of TDRs that subsequently defaulted during the six months ended June 30, 2016 and 2015 and were within twelve months of the restructuring date:

		Number of		Recorded
June 30, 2016 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	3	$	3
	Commercial mortgage nonowner-occupied loans	2		-
Residential mortgage loans		86		12
Consumer loans:
	Home equity	8		1
	Credit card	774		3
Total portfolio loans		873	$	19

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

		Number of		Recorded
June 30, 2015 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	4	$	7
Residential mortgage loans		70		9
Consumer loans:
	Home equity	8		-
	Automobile loans	8		-
	Credit card	1,145		6
Total portfolio loans		1,235	$	22

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