Commitments, Contingent Liabilities and Guarantees (Tables)

9 Months Ended

Sep. 30, 2017

Commitments, Contingent Liabilities and Guarantees

Summary of Significant Commitments

Commitments
The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of:
		September 30,	December 31,
($ in millions)		2017	2016
Commitments to extend credit	$	66,606	67,909
Letters of credit		2,401	2,583
Forward contracts related to residential mortgage loans held for sale		2,297	1,823
Noncancelable operating lease obligations		580	576
Purchase obligations		103	57
Capital commitments for private equity investments		52	59
Capital expenditures		35	29
Capital lease obligations		15	19

Credit Risk Associated With Commitments

Risk ratings under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2017	2016
Pass	$	65,638	66,802
Special mention		331	338
Substandard		637	753
Doubtful		-	16
Total commitments to extend credit	$	66,606	67,909

Standby and Commercial Letters of Credit, Conditional Commitments Issued to Guarantee the Performance of a Customer to a Third Party

Standby and commercial letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party and expire as summarized in the following table as of September 30, 2017:
($ in millions)
Less than 1 year(a)	$	1,198
1 - 5 years(a)		1,155
Over 5 years		48
Total letters of credit	$	2,401

(a) Includes $12 and $2 issued on behalf of commercial customers to facilitate trade payments in U.S. dollars and foreign currencies which expire less than 1 year and between 1 - 5 years, respectively.

Credit Risk associated with Letters of Credit

Risk ratings under this risk rating system are summarized in the following table as of:
		September 30,	December 31,
($ in millions)		2017	2016
Pass	$	2,044	2,134
Special mention		89	98
Substandard		162	290
Doubtful		106	61
Total letters of credit	$	2,401	2,583

Activity in Reserve for Representation and Warranty Provisions

The following table summarizes activity in the reserve for representation and warranty provisions:
		For the three months ended		For the nine months ended
		September 30,		September 30,
($ in millions)		2017	2016	2017	2016
Balance, beginning of period	$	11	21	13	25
Net reductions to the reserve		(1)	(3)	(3)	(7)
Losses charged against the reserve		-	-	-	-
Balance, end of period	$	10	18	10	18

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following tables provide a rollforward of unresolved claims by claimant type for the nine months ended:
	GSE			Private Label
September 30, 2017 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	13	$	2	-	$	-
New demands	86		12	-		-
Loan paydowns/payoffs	(2)		-	-		-
Resolved demands	(90)		(13)	-		-
Balance, end of period	7	$	1	-	$	-

	GSE			Private Label
September 30, 2016 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	16	$	4	2	$	-
New demands	253		18	4		-
Loan paydowns/payoffs	(8)		(1)	-		-
Resolved demands	(203)		(14)	(6)		-
Balance, end of period	58	$	7	-	$	-

Visa Funding and Bancorp Cash Payments

After the Bancorp’s sale of the Class B Shares, Visa has funded additional amounts into the litigation escrow account which have resulted in further dilutive adjustments to the conversion of Class B Shares into Class A Shares, and along with other terms of the total return swap, required the Bancorp to make cash payments in varying amounts to the swap counterparty as follows:

		Visa	Bancorp Cash
Period ($ in millions)		Funding Amount	Payment Amount
Q2 2010	$	500	20
Q4 2010		800	35
Q2 2011		400	19
Q1 2012		1,565	75
Q3 2012		150	6
Q3 2014		450	18	i