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

9 Months Ended

Sep. 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 September 30, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	817	93	206	110	1,226
	Losses charged-off		(33)	(2)	(50)	-	(85)
	Recoveries of losses previously charged-off		3	3	11	-	17
	Provision for (benefit from) loan and lease losses		9	(4)	51	11	67
	Deconsolidation of a VIE^(a)		(19)	-	-	(1)	(20)
Balance, end of period		$	777	90	218	120	1,205
(a) Refer to Note 11 for further discussion on the deconsolidation of a VIE.

				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 (benefit from) loan and lease losses		44	-	38	(2)	80
Balance, end of period		$	854	96	207	115	1,272

				Residential
For the nine months ended September 30, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	831	96	214	112	1,253
	Losses charged-off		(119)	(12)	(156)	-	(287)
	Recoveries of losses previously charged-off		25	7	34	-	66
	Provision for (benefit from) loan and lease losses		59	(1)	126	9	193
	Deconsolidation of a VIE^(a)		(19)	-	-	(1)	(20)
Balance, end of period		$	777	90	218	120	1,205
(a) Refer to Note 11 for further discussion on the deconsolidation of a VIE.

				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

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, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	89	64	39	-	192
	Collectively evaluated for impairment		688	26	179	-	893
	Unallocated		-	-	-	120	120
Total ALLL		$	777	90	218	120	1,205
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	600	658	329	-	1,587
	Collectively evaluated for impairment		55,969	14,788	19,397	-	90,154
	Loans acquired with deteriorated credit quality		-	2	-	-	2
Total portfolio loans and leases		$	56,569	15,448	19,726	-	91,743

Includes $1 related to leveraged leases at September 30, 2017.
Excludes $140 of residential mortgage loans measured at fair value and includes $709 of leveraged leases, net of unearned income at September 30, 2017.

					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 had 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. Refer to Note 11 for further discussion on the deconsolidation of a VIE associated with these loans in the third quarter of 2017.

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, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,344	1,290	1,372	5	41,011
Commercial mortgage owner-occupied loans		3,202	69	90	-	3,361
Commercial mortgage nonowner-occupied loans		3,382	28	91	1	3,502
Commercial construction loans		4,645	7	-	-	4,652
Commercial leases		3,885	78	80	-	4,043
Total commercial loans and leases	$	53,458	1,472	1,633	6	56,569

			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:

		September 30, 2017		December 31, 2016
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	15,417	31	14,874	34
Home equity		7,069	74	7,622	73
Automobile loans		9,235	1	9,981	2
Credit card		2,141	27	2,209	28
Other consumer loans		1,179	-	680	-
Total residential mortgage and consumer loans	$	35,041	133	35,366	137

(a) Excludes $140 and $143 of residential mortgage loans measured at fair value at September 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 September 30, 2017 ($ in millions)			Leases^(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	40,877	31	103	134	41,011	3
	Commercial mortgage owner-occupied loans		3,335	4	22	26	3,361	-
	Commercial mortgage nonowner-occupied loans		3,496	-	6	6	3,502	-
	Commercial construction loans		4,652	-	-	-	4,652	-
	Commercial leases		4,042	-	1	1	4,043	-
Residential mortgage loans^(a)(b)			15,339	36	73	109	15,448	43
Consumer loans:
	Home equity		7,014	73	56	129	7,143	-
	Automobile loans		9,133	92	11	103	9,236	10
	Credit card		2,107	34	27	61	2,168	21
	Other consumer loans		1,176	3	-	3	1,179	-
Total portfolio loans and leases		$	91,171	273	299	572	91,743	77

Excludes $140 of residential mortgage loans measured at fair value at September 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 $274 as of September 30, 2017, of which $76 of these loans were 30-89 days past due and $173 were 90 days or more past due. The Bancorp recognized $1 and $4 of losses during the three and nine months ended September 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:
	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		679	1	-	1	680	-
Total portfolio loans and leases		$	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 $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.

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, 2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans:
	Commercial and industrial loans	$	412	352		80
	Commercial mortgage owner-occupied loans		17	14		8
	Commercial mortgage nonowner-occupied loans		3	2		1
Restructured residential mortgage loans			464	461		64
Restructured consumer loans:
	Home equity		180	179		25
	Automobile loans		9	9		1
	Credit card		46	46		13
Total impaired portfolio loans with a related ALLL		$	1,131	1,063		192
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	199	177		-
	Commercial mortgage owner-occupied loans		22	19		-
	Commercial mortgage nonowner-occupied loans		37	36		-
Restructured residential mortgage loans			217	197		-
Restructured consumer loans:
	Home equity		96	93		-
	Automobile loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	573	524		-
Total impaired portfolio loans		$	1,704	1,587	a^(a)	192

Includes $232, $646 and $283, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $214, $12 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at September 30, 2017.


			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:
	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:
	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 had 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. Refer to Note 11 for further discussion on the deconsolidation of a VIE associated with these loans in the third quarter of 2017.


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, 2017		September 30, 2017
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	581	4	611	6
	Commercial mortgage owner-occupied loans		50	-	55	-
	Commercial mortgage nonowner-occupied loans		40	-	69	1
	Commercial leases		1	-	2	-
Restructured residential mortgage loans			654	6	655	18
Restructured consumer loans:
	Home equity		275	3	285	9
	Automobile loans		11	-	12	-
	Credit card		48	1	49	3
Total average impaired portfolio loans and leases		$	1,660	14	1,738	37


			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:
	Home equity		318	3	330	9
	Automobile loans		16	-	18	-
	Credit card		55	1	57	4
Total average impaired loans and leases		$	1,973	16	1,963	45

(a) Excludes five restructured loans associated with a consolidated VIE in which the Bancorp had 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. Refer to Note 11 for further discussion on the deconsolidation of a VIE associated with these loans in the third quarter of 2017.

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)			2017	2016
Commercial loans and leases:
	Commercial and industrial loans	$	341	478
	Commercial mortgage owner-occupied loans		25	32	^(a)
	Commercial mortgage nonowner-occupied loans		6	9
	Commercial leases		1	4
Total nonaccrual portfolio commercial loans and leases			373	523
Residential mortgage loans			31	34
Consumer loans:
	Home equity		74	73
	Automobile loans		1	2
	Credit card		27	28
Total nonaccrual portfolio consumer loans			102	103
Total nonaccrual portfolio loans and leases^(b)(c)		$	506	660
OREO and other repossessed property			49	78	^a
Total nonperforming portfolio assets^(b)(c)		$	555	738

Excludes $19 of restructured nonaccrual loans at December 31, 2016 associated with a consolidated VIE in which the Bancorp had no continuing credit risk due to the risk being assumed by a third party. Refer to Note 11 for further discussion on the deconsolidation of a VIE associated with these loans in the third quarter of 2017.
Excludes $20 and $13 of nonaccrual loans held for sale at September 30, 2017 and December 31, 2016, respectively.
Includes $4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at both September 30, 2017 and December 31, 2016 and $1 of restructured nonaccrual government insured commercial loans at both September 30, 2017 and December 31, 2016.

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		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
September 30, 2017 ($ in millions)^(a)		During the Period^(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	17	$	73	(6)	-
	Commercial mortgage owner-occupied loans	1		-	-	-
	Commercial mortgage nonowner-occupied loans	1		-	-	-
Residential mortgage loans		247		35	1	-
Consumer loans:
	Home equity	38		2	-	-
	Automobile loans	28		-	-	-
	Credit card	2,021		10	2	-
Total portfolio loans		2,353	$	120	(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
		Number of Loans	in Loans and Leases		Increase	Charge-offs
		Modified in a TDR	Modified 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.

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, 2017 ($ in millions)^(a)		During the Period^(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	67	$	226	(4)	6
	Commercial mortgage owner-occupied loans	8		8	5	-
	Commercial mortgage nonowner-occupied loans	3		-	-	-
Residential mortgage loans		649		92	4	-
Consumer loans:
	Home equity	113		7	-	-
	Automobile loans	73		-	-	-
	Credit card	5,929		27	5	1
Total portfolio loans		6,842	$	360	10	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 and Leases		(Decrease)	Charge-offs
		Modified in a TDR	Modified 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.

Summary of Subsequent Defaults

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

		Number of		Recorded
September 30, 2017 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	3	$	1
	Commercial mortgage owner-occupied loans	1		-
Residential mortgage loans		49		7
Consumer loans:
	Home equity	2		-
	Credit card	417		2
Total portfolio loans		472	$	10

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

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

(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, 2017 and 2016 and were within twelve months of the restructuring date:

		Number of		Recorded
September 30, 2017 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	7	$	17
	Commercial mortgage owner-occupied loans	4		1
Residential mortgage loans		132		19
Consumer loans:
	Home equity	13		2
	Credit card	1,254		6
Total portfolio loans		1,410	$	45

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

		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.