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

6 Months Ended

Jun. 30, 2017

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 June 30, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	826	96	204	112	1,238
	Losses charged-off		(41)	(4)	(50)	-	(95)
	Recoveries of losses previously charged-off		17	2	12	-	31
	Provision for (benefit from) loan and lease losses		15	(1)	40	(2)	52
Balance, end of period		$	817	93	206	110	1,226

				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 six months ended June 30, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	831	96	214	112	1,253
	Losses charged-off		(86)	(10)	(106)	-	(202)
	Recoveries of losses previously charged-off		21	3	25	-	49
	Provision for (benefit from) loan and lease losses		51	4	73	(2)	126
Balance, end of period		$	817	93	206	110	1,226

				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

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 June 30, 2017 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	118	^(c)	66	40	-	224
	Collectively evaluated for impairment		699		27	166	-	892
	Unallocated		-		-	-	110	110
Total ALLL		$	817		93	206	110	1,226
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	760	^(c)	652	339	-	1,751
	Collectively evaluated for impairment		55,545		14,664	19,342	-	89,551
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	56,305		15,318	19,681	-	91,304

Includes $2 related to leveraged leases at June 30, 2017.
Excludes $142 of residential mortgage loans measured at fair value and includes $706 of leveraged leases, net of unearned income at June 30, 2017.
Includes five restructured loans at June 30, 2017 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 $26 and an ALLL of $18.

					Residential
As of December 31, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	118	^(c)	68	44	-	230
	Collectively evaluated for impairment		713		28	170	-	911
	Unallocated		-		-	-	112	112
Total ALLL		$	831		96	214	112	1,253
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	904	^(c)	652	371	-	1,927
	Collectively evaluated for impairment		55,548		14,253	20,224	-	90,025
	Loans acquired with deteriorated credit quality		-		3	-	-	3
Total portfolio loans and leases		$	56,452		14,908	20,595	-	91,955

Includes $2 related to leveraged leases at December 31, 2016.
Excludes $143 of residential mortgage loans measured at fair value and includes $701 of leveraged leases, net of unearned income at December 31, 2016.
Includes five restructured loans at December 31, 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 $26 and an ALLL of $18.

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 June 30, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,281	1,151	1,460	22	40,914
Commercial mortgage owner-occupied loans		3,207	76	102	-	3,385
Commercial mortgage nonowner-occupied loans		3,358	31	94	-	3,483
Commercial construction loans		4,320	46	-	-	4,366
Commercial leases		4,041	85	31	-	4,157
Total commercial loans and leases	$	53,207	1,389	1,687	22	56,305

			Special
As of December 31, 2016 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,844	1,204	1,604	24	41,676
Commercial mortgage owner-occupied loans		3,168	72	117	3	3,360
Commercial mortgage nonowner-occupied loans		3,466	4	69	-	3,539
Commercial construction loans		3,902	1	-	-	3,903
Commercial leases		3,894	54	26	-	3,974
Total commercial loans and leases	$	53,274	1,335	1,816	27	56,452

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, 2017		December 31, 2016
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	15,286	32	14,874	34
Home equity		7,231	70	7,622	73
Automobile loans		9,317	1	9,981	2
Credit card		2,091	26	2,209	28
Other consumer loans and leases		945	-	680	-
Total residential mortgage and consumer loans and leases^(a)	$	34,870	129	35,366	137

(a) Excludes $142 and $143 of loans measured at fair value at June 30, 2017 and December 31, 2016, 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 June 30, 2017 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	40,761	48	105	153	40,914	3
	Commercial mortgage owner-occupied loans		3,366	4	15	19	3,385	-
	Commercial mortgage nonowner-occupied loans		3,468	9	6	15	3,483	-
	Commercial construction loans		4,366	-	-	-	4,366	-
	Commercial leases		4,154	-	3	3	4,157	-
Residential mortgage loans^(a)(b)			15,213	27	78	105	15,318	45
Consumer loans and leases:
	Home equity		7,183	66	52	118	7,301	-
	Automobile loans		9,245	64	9	73	9,318	7
	Credit card		2,065	28	24	52	2,117	20
	Other consumer loans and leases		943	2	-	2	945	-
Total portfolio loans and leases^(a)		$	90,764	248	292	540	91,304	75

Excludes $142 of residential mortgage loans measured at fair value at June 30, 2017.
Information includes advances made pursuant to servicing agreements for GNMA mortgage pools whose repayments are insured by the FHA or guaranteed by the VA. These advances were $280 as of June 30, 2017, of which $79 of these loans were 30-89 days past due and $179 were 90 days or more past due. The Bancorp recognized $1 and $3 of losses during the three and six months ended June 30, 2017, 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, 2016 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,495	87	94	181	41,676	4
	Commercial mortgage owner-occupied loans		3,332	6	22	28	3,360	-
	Commercial mortgage nonowner-occupied loans		3,530	2	7	9	3,539	-
	Commercial construction loans		3,902	1	-	1	3,903	-
	Commercial leases		3,972	-	2	2	3,974	-
Residential mortgage loans^(a)(b)			14,790	37	81	118	14,908	49
Consumer loans and leases:
	Home equity		7,570	68	57	125	7,695	-
	Automobile loans		9,886	85	12	97	9,983	9
	Credit card		2,183	28	26	54	2,237	22
	Other consumer loans and leases		679	1	-	1	680	-
Total portfolio loans and leases^(a)		$	91,339	315	301	616	91,955	84

Excludes $143 of residential mortgage loans measured at fair value at December 31, 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. These advances were $312 as of December 31, 2016, of which $110 of these loans were 30-89 days past due and $202 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.

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 June 30, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	450	394		90
	Commercial mortgage owner-occupied loans^(b)		21	15		9
	Commercial mortgage nonowner-occupied loans		4	3		1
Restructured residential mortgage loans			462	459		66
Restructured consumer loans and leases:
	Home equity		188	187		27
	Automobile loans		9	9		1
	Credit card		47	47		12
Total impaired portfolio loans and leases with a related ALLL		$	1,181	1,114		206
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	276	255		-
	Commercial mortgage owner-occupied loans		30	25		-
	Commercial mortgage nonowner-occupied loans		39	39		-
	Commercial leases		3	3		-
Restructured residential mortgage loans			213	193		-
Restructured consumer loans and leases:
	Home equity		97	94		-
	Automobile loans		2	2		-
Total impaired portfolio loans and leases with no related ALLL		$	660	611		-
Total impaired portfolio loans and leases		$	1,841	1,725	a^(a)	206

Includes $224, $639 and $294, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $244, $13 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at June 30, 2017.
Excludes five restructured loans at June 30, 2017 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 $26, a recorded investment of $26 and an ALLL of $18, respectively.


			Unpaid
			Principal	Recorded
As of December 31, 2016 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	440	414		94
	Commercial mortgage owner-occupied loans^(b)		24	16		5
	Commercial mortgage nonowner-occupied loans		7	6		1
	Commercial leases		2	2		-
Restructured residential mortgage loans			471	465		68
Restructured consumer loans and leases:
	Home equity		202	201		30
	Automobile loans		12	12		2
	Credit card		52	52		12
Total impaired portfolio loans and leases with a related ALLL		$	1,210	1,168		212
With no related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	394	320		-
	Commercial mortgage owner-occupied loans		36	35		-
	Commercial mortgage nonowner-occupied loans		93	83		-
	Commercial leases		2	2		-
Restructured residential mortgage loans			207	187		-
Restructured consumer loans and leases:
	Home equity		107	104		-
	Automobile loans		3	2		-
Total impaired portfolio loans and leases with no related ALLL		$	842	733		-
Total impaired portfolio loans and leases		$	2,052	1,901	a^(a)	212

Includes $322, $635 and $323, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $192, $17 and $48, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2016.
Excludes five restructured loans at December 31, 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 $26, a recorded investment of $26 and an ALLL of $18.


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, 2017		June 30, 2017
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	635	1	668	2
	Commercial mortgage owner-occupied loans^(a)		38	-	42	-
	Commercial mortgage nonowner-occupied loans		66	-	73	1
	Commercial leases		2	-	3	-
Restructured residential mortgage loans			654	6	653	12
Restructured consumer loans and leases:
	Home equity		287	3	293	6
	Automobile loans		12	-	13	-
	Credit card		49	1	51	2
Total average impaired portfolio loans and leases		$	1,743	11	1,796	23

(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 $26 and an immaterial amount of interest income recognized for both the three and six months ended June 30, 2017


			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 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.

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:

			June 30,	December 31,
($ in millions)			2017	2016
Commercial loans and leases:
	Commercial and industrial loans	$	447	478
	Commercial mortgage owner-occupied loans^(a)		27	32
	Commercial mortgage nonowner-occupied loans		8	9
	Commercial leases		3	4
Total nonaccrual portfolio commercial loans and leases			485	523
Residential mortgage loans			32	34
Consumer loans and leases:
	Home equity		70	73
	Automobile loans		1	2
	Credit card		26	28
Total nonaccrual portfolio consumer loans and leases			97	103
Total nonaccrual portfolio loans and leases^(b)(c)		$	614	660
OREO and other repossessed property			48	78	a
Total nonperforming portfolio assets^(b)(c)		$	662	738

Excludes $19 of restructured nonaccrual loans at both June 30, 2017 and December 31, 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.
Excludes $8 and $13 of nonaccrual loans held for sale at June 30, 2017 and December 31, 2016, respectively.
Includes $4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at both June 30, 2017 and December 31, 2016 and $1 of restructured nonaccrual government insured commercial loans at both June 30, 2017 and December 31, 2016.

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
June 30, 2017 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans:
	Commercial and industrial loans	17	$	56	1	4
	Commercial mortgage owner-occupied loans	2		6	5	-
	Commercial mortgage nonowner-occupied loans	1		-	-	-
Residential mortgage loans		199		28	1	-
Consumer loans:
	Home equity	44		3	-	-
	Automobile loans	15		-	-	-
	Credit card	2,152		10	2	1
Total portfolio loans		2,430	$	103	9	5

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
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.

The following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the six 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, 2017 ($ in millions)^(a)		during the period^(b)	during the period		modification	modification
Commercial loans and leases:
	Commercial and industrial loans	50	$	153	2	6
	Commercial mortgage owner-occupied loans	7		8	5	-
	Commercial mortgage nonowner-occupied loans	2		-	-	-
Residential mortgage loans		402		57	3	-
Consumer loans:
	Home equity	75		5	-	-
	Automobile loans	45		-	-	-
	Credit card	3,908		17	3	1
Total portfolio loans and leases		4,489	$	240	13	7

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, 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.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended June 30, 2017 and 2016 and were within twelve months of the restructuring date:

		Number of		Recorded
June 30, 2017 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	15
	Commercial mortgage owner-occupied loans	3		1
Residential mortgage loans		26		3
Consumer loans:
	Home equity	6		1
	Credit card	387		2
Total portfolio loans		424	$	22

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

		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.

The following tables provide a summary of TDRs that subsequently defaulted during the six months ended June 30, 2017 and 2016 and were within twelve months of the restructuring date:

		Number of		Recorded
June 30, 2017 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	4	$	16
	Commercial mortgage owner-occupied loans	3		1
Residential mortgage loans		83		12
Consumer loans:
	Home equity	11		2
	Credit card	837		4
Total portfolio loans and leases		938	$	35

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

		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.