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

9 Months Ended

Sep. 30, 2016

Credit Quality and the Allowance for Loan and Leases Losses


Allowance for Loan and Lease Losses
The following tables summarize transactions in the ALLL by portfolio segment:

				Residential
For the three months ended September 30, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	873	98	211	117	1,299
	Losses charged-off		(81)	(4)	(52)	-	(137)
	Recoveries of losses previously charged-off		18	2	10	-	30
	Provision for loan and lease losses		44	-	38	(2)	80
Balance, end of period		$	854	96	207	115	1,272

				Residential
For the three months ended September 30, 2015 ($ 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

				Residential
For the nine months ended September 30, 2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	840	100	217	115	1,272
	Losses charged-off		(192)	(14)	(153)	-	(359)
	Recoveries of losses previously charged-off		29	7	34	-	70
	Provision for loan and lease losses		177	3	109	-	289
Balance, end of period		$	854	96	207	115	1,272

				Residential
For the nine months ended September 30, 2015 ($ 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

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, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	96	^(c)	68	43	-	207
	Collectively evaluated for impairment		758		28	164	-	950
	Unallocated		-		-	-	115	115
Total ALLL		$	854		96	207	115	1,272
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	906	^(c)	651	384	-	1,941
	Collectively evaluated for impairment		56,577		13,840	20,641	-	91,058
	Loans acquired with deteriorated credit quality		-		3	-	-	3
Total portfolio loans and leases		$	57,483		14,494	21,025	-	93,002

Includes $2 related to leveraged leases at September 30, 2016.
Excludes $149 of residential mortgage loans measured at fair value, and includes $725 of leveraged leases, net of unearned income at September 30, 2016.
Includes five restructured loans at September 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.

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, 2016 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,592	1,471	1,664	-	42,727
Commercial mortgage owner-occupied loans		3,269	74	134	-	3,477
Commercial mortgage nonowner-occupied loans		3,266	25	88	-	3,379
Commercial construction loans		3,900	5	-	-	3,905
Commercial leases		3,914	43	38	-	3,995
Total commercial loans and leases	$	53,941	1,618	1,924	-	57,483

			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

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, 2016		December 31, 2015
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	14,462	32	13,498	51
Home equity		7,786	78	8,222	79
Automobile loans		10,347	2	11,491	2
Credit card		2,140	29	2,226	33
Other consumer loans and leases		643	-	657	-
Total residential mortgage and consumer loans and leases^(a)	$	35,378	141	36,094	165

(a) Excludes $149 and $167 of loans measured at fair value at September 30, 2016 and December 31, 2015, 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:

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of September 30, 2016 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	42,587	31	109	140	42,727	7
	Commercial mortgage owner-occupied loans		3,442	7	28	35	3,477	-
	Commercial mortgage nonowner-occupied loans		3,371	1	7	8	3,379	-
	Commercial construction loans		3,905	-	-	-	3,905	-
	Commercial leases		3,993	-	2	2	3,995	-
Residential mortgage loans^(a)(b)			14,388	32	74	106	14,494	43
Consumer loans and leases:
	Home equity		7,740	65	59	124	7,864	-
	Automobile loans		10,266	72	11	83	10,349	8
	Credit card		2,121	27	21	48	2,169	18
	Other consumer loans and leases		642	1	-	1	643	-
Total portfolio loans and leases^(a)		$	92,455	236	311	547	93,002	76

Excludes $149 of residential mortgage loans measured at fair value at September 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 September 30, 2016, $112 of these loans were 30-89 days past due and $287 were 90 days or more past due. The Bancorp recognized $2 and $5 of losses during the three and nine months ended September 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 $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.

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

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 September 30, 2016 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	433	375		74
	Commercial mortgage owner-occupied loans^(b)		22	13		2
	Commercial mortgage nonowner-occupied loans		13	11		2
Restructured residential mortgage loans			474	470		68
Restructured consumer loans and leases:
	Home equity		210	210		30
	Automobile loans		14	14		1
	Credit card		54	54		12
Total impaired portfolio loans and leases with a related ALLL		$	1,220	1,147		189
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	382	311		-
	Commercial mortgage owner-occupied loans		49	46		-
	Commercial mortgage nonowner-occupied loans		132	117		-
	Commercial leases		6	6		-
Restructured residential mortgage loans			202	181		-
Restructured consumer loans and leases:
	Home equity		108	104		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	882	767		-
Total impaired portfolio loans and leases		$	2,102	1,914	a^(a)	189

Includes $408, $638 and $334, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $194, $13 and $50, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at September 30, 2016.
Excludes five restructured loans at September 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 $327, 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 nine months ended
			September 30, 2016		September 30, 2016
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	725	4	685	8
	Commercial mortgage owner-occupied loans^(a)		62	-	66	1
	Commercial mortgage nonowner-occupied loans		139	2	152	4
	Commercial construction loans		-	-	3	-
	Commercial leases		7	-	6	-
Restructured residential mortgage loans			651	6	646	19
Restructured consumer loans and leases:
	Home equity		318	3	330	9
	Automobile loans		16	-	18	-
	Credit card		55	1	57	4
Total average impaired portfolio loans and leases		$	1,973	16	1,963	45

(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 nine months ended September 30, 2016.


			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

(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 nine months ended September 30, 2015.

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

			September 30,		December 31,
($ in millions)			2016		2015
Commercial loans and leases:
	Commercial and industrial loans	$	409	^(a)	259
	Commercial mortgage owner-occupied loans^(b)		38		46
	Commercial mortgage nonowner-occupied loans		10		35
	Commercial leases		3		1
Total nonaccrual portfolio commercial loans and leases			460	^(a)	341
Residential mortgage loans			32		51
Consumer loans and leases:
	Home equity		78		79
	Automobile loans		2		2
	Credit card		29		33
Total nonaccrual portfolio consumer loans and leases			109		114
Total nonaccrual portfolio loans and leases^(c)(d)		$	601	^(a)	506
OREO and other repossessed property			97		141	a
Total nonperforming portfolio assets^(c)(d)		$	698	^(a)	647

Nonaccrual portfolio loans and leases at September 30, 2016 were adjusted by $15 to reflect the identification of certain commercial and industrial loans as nonaccrual after the Bancorp’s Form 8-K was filed on October 20, 2016.
Excludes $20 of restructured nonaccrual loans at both September 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 $100 and $12 of nonaccrual loans held for sale at September 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 September 30, 2016 and December 31, 2015, respectively, and $1 and $2 of restructured nonaccrual government insured commercial loans at September 30, 2016 and December 31, 2015, respectively.

Summary of Loans Modified in a TDR

The following tables provide a summary of loans and leases, 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, 2016 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	12	$	41	10	-
	Commercial mortgage owner-occupied loans	1		1	-	-
	Commercial leases	5		16	-	-
Residential mortgage loans		240		38	2	-
Consumer loans:
	Home equity	57		5	-	-
	Automobile loans	52		1	-	-
	Credit card	2,320		10	2	1
Total portfolio loans and leases		2,687	$	112	14	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
		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:
	Commercial and industrial loans	15	$	17	7	-
	Commercial mortgage owner-occupied loans	1		-	-	-
Residential mortgage loans		301		44	3	-
Consumer loans:
	Home equity	60		4	-	-
	Automobile loans	98		2	-	-
	Credit card	3,076		15	3	2
Total portfolio loans		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.

The following tables provide a summary of loans and leases, by class, 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, 2016 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	56	$	158	19	-
	Commercial mortgage owner-occupied loans	11		9	(2)	-
	Commercial mortgage nonowner-occupied loans	4		5	1	-
	Commercial leases	5		16	-	-
Residential mortgage loans		745		111	6	-
Consumer loans:
	Home equity	183		12	-	-
	Automobile loans	188		3	-	-
	Credit card	7,174		33	6	3
Total portfolio loans and leases		8,366	$	347	30	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.

			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:
	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:
	Home equity	203		11	(1)	-
	Automobile loans	357		6	-	-
	Credit card	9,724		49	10	5
Total portfolio loans		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.

Summary of Subsequent Defaults

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

		Number of		Recorded
September 30, 2016 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	1	$	1
	Commercial leases	2		1
Residential mortgage loans		41		6
Consumer loans:
	Home equity	3		-
	Credit card	458		2
Total portfolio loans and leases		505	$	10

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

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

(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 nine months ended September 30, 2016 and 2015 and were within twelve months of the restructuring date:

		Number of		Recorded
September 30, 2016 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	4	$	4
	Commercial mortgage nonowner-occupied loans	2		-
	Commercial leases	2		1
Residential mortgage loans		127		18
Consumer loans:
	Home equity	11		1
	Credit card	1,232		5
Total portfolio loans and leases		1,378	$	29

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

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

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