Credit Quality and the Allowance for Loan and Lease Losses

12 Months Ended

Dec. 31, 2017

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 for the years ended December 31:

				Residential
2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	831	96	214	112	1,253
	Losses charged-off		(154)	(15)	(212)	-	(381)
	Recoveries of losses previously charged-off		29	8	46	-	83
	Provision for loan and lease losses		66	-	186	9	261
	Deconsolidation of a VIE^(a)		(19)	-	-	(1)	(20)
Balance, end of period		$	753	89	234	120	1,196
(a) Refer to Note 11 for further discussion on the deconsolidation of a VIE.

				Residential
2016 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	840	100	217	115	1,272
	Losses charged-off		(232)	(19)	(205)	-	(456)
	Recoveries of losses previously charged-off		42	9	43	-	94
	Provision for loan and lease losses		181	6	159	(3)	343
Balance, end of period		$	831	96	214	112	1,253

				Residential
2015 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	875	104	237	106	1,322
	Losses charged-off		(298)	(28)	(216)	-	(542)
	Recoveries of losses previously charged-off		37	11	48	-	96
	Provision for loan and lease losses		226	13	148	9	396
Balance, end of period		$	840	100	217	115	1,272

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

					Residential
As of December 31, 2017 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	94	a	64	42	-	200
	Collectively evaluated for impairment		659		25	192	-	876
	Unallocated		-		-	-	120	120
Total ALLL		$	753		89	234	120	1,196
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	560	a	665	320	-	1,545
	Collectively evaluated for impairment		55,835		14,787	19,664	-	90,286
	Loans acquired with deteriorated credit quality		-		2	-	-	2
Total portfolio loans and leases		$	56,395		15,454	19,984	-	91,833

Includes $1 related to leveraged leases at December 31, 2017.
Excludes $137 of residential mortgage loans measured at fair value, and includes $674 of leveraged leases, net of unearned income, at December 31, 2017.

					Residential
As of December 31, 2016 ($ in millions)			Commercial		Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	118 ^(c)	a	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)	a	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.

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 December 31, 2017 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	38,813	1,115	1,235	7	41,170
Commercial mortgage owner-occupied loans		3,207	75	80	-	3,362
Commercial mortgage nonowner-occupied loans		3,117	28	97	-	3,242
Commercial construction loans		4,553	-	-	-	4,553
Commercial leases		3,922	72	74	-	4,068
Total commercial loans and leases	$	53,612	1,290	1,486	7	56,395

			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

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 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 December 31:

		2017		2016
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	15,424	30	14,874	34
Home equity		6,940	74	7,622	73
Automobile loans		9,111	1	9,981	2
Credit card		2,273	26	2,209	28
Other consumer loans		1,559	-	680	-
Total residential mortgage and consumer loans^(a)	$	35,307	131	35,366	137

(a) Excludes $137 and $143 of residential mortgage loans measured at fair value at December 31, 2017 and 2016, 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 December 31, 2017 ($ in millions)			Leases^(b)(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,027	42	101	143	41,170	3
	Commercial mortgage owner-occupied loans		3,351	3	8	11	3,362	-
	Commercial mortgage nonowner-occupied loans		3,235	-	7	7	3,242	-
	Commercial construction loans		4,552	1	-	1	4,553	-
	Commercial leases		4,065	3	-	3	4,068	-
Residential mortgage loans^(a)			15,301	66	87	153	15,454	57
Consumer loans:
	Home equity		6,888	70	56	126	7,014	-
	Automobile loans		8,992	107	13	120	9,112	10
	Credit card		2,230	36	33	69	2,299	27
	Other consumer loans		1,554	5	-	5	1,559	-
Total portfolio loans and leases^(a)		$	91,195	333	305	638	91,833	97

Excludes $137 of residential mortgage loans measured at fair value at December 31, 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. As of December 31, 2017, $95 of these loans were 30-89 days past due and $290 were 90 days or more past due. The Bancorp recognized $5 of losses during the year ended December 31, 2017 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^(b)(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)			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^(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. As of December 31, 2016, $110 of these loans were 30-89 days past due and $312 were 90 days or more past due. The Bancorp recognized $6 of losses during the year ended December 31, 2016 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 as of December 31:

			Unpaid
			Principal	Recorded
2017 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	433	358		87
	Commercial mortgage owner-occupied loans		16	14		7
	Commercial mortgage nonowner-occupied loans		4	3		-
	Commercial leases		4	4		-
Restructured residential mortgage loans			469	465		64
Restructured consumer loans:
	Home equity		172	172		27
	Automobile loans		8	7		1
	Credit card		52	45		14
Total impaired portfolio loans and leases with a related ALLL		$	1,158	1,068		200
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	151	131		-
	Commercial mortgage owner-occupied loans		18	15		-
	Commercial mortgage nonowner-occupied loans		35	35		-
Restructured residential mortgage loans			218	200		-
Restructured consumer loans:
	Home equity		97	94		-
	Automobile loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	521	477		-
Total impaired portfolio loans and leases		$	1,679	1,545	^(a)	200

Includes $249, $652 and $275, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $150, $13 and $45, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2017.

			Unpaid
			Principal	Recorded
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 table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class, for the years ended December 31:

			2017		2016			2015
			Average	Interest	Average	Interest		Average	Interest
			Recorded	Income	Recorded	Income		Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized		Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	579	10	691		10	663		21
	Commercial mortgage owner-occupied loans^(a)		35	-	63		1	92		2
	Commercial mortgage nonowner-occupied loans		61	1	139		5	224		7
	Commercial construction loans		-	-	3		-	41		1
	Commercial leases		3	-	5		-	5		-
Restructured residential mortgage loans			657	25	647		25	586		23
Restructured consumer loans:
	Home equity		281	12	325		12	361		13
	Automobile loans		11	-	17		-	22		1
	Credit card		50	4	56		5	68		6
Total average impaired portfolio loans and leases		$	1,677	52	1,946		58	2,062		74

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 $13, $26 and $27 for the years ended December 31, 2017, 2016, and 2015, respectively. An immaterial amount of interest income was recognized during the years ended December 31, 2017, 2016, and 2015. Refer to Note 11 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.

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 December 31:

($ in millions)			2017	2016
Commercial loans and leases:
	Commercial and industrial loans	$	276	478
	Commercial mortgage owner-occupied loans^(c)		19	32
	Commercial mortgage nonowner-occupied loans		7	9
	Commercial leases		4	4
Total nonaccrual portfolio commercial loans and leases			306	523
Residential mortgage loans			30	34
Consumer loans:
	Home equity		74	73
	Automobile loans		1	2
	Credit card		26	28
Total nonaccrual portfolio consumer loans			101	103
Total nonaccrual portfolio loans and leases^(a)(b)		$	437	660
OREO and other repossessed property			52	78
Total nonperforming portfolio assets^(a)(b)		$	489	738

Excludes $6 and $13 of nonaccrual loans and leases held for sale at December 31, 2017 and 2016, respectively.
Includes $3 and $4 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at December 31, 2017 and 2016, respectively, of which $3 and $1 are restructured nonaccrual government insured commercial loans at December 31, 2017 and 2016, respectively.

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 the risk being assumed by a third party. Refer to Note 11 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarte

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 $235 million and $260 million as of December 31, 2017 and 2016, 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 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.

The Bancorp had commitments to lend additional funds to borrowers whose terms have been modified in a TDR, consisting of line of credit and letter of credit commitments of $53 million and $78 million, respectively, as of December 31, 2017 compared with $82 million and $57 million, respectively, as of December 31, 2016.

The following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the years ended December 31:

			Recorded Investment		Increase
		Number of Loans	in Loans Modified		(Decrease)	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
2017 ($ in millions)^(a)		During the Year^(b)	During the Year		Modification	Modification
Commercial loans and leases:
	Commercial and industrial loans	75	$	237	(5)	6
	Commercial mortgage owner-occupied loans	9		8	5	-
	Commercial mortgage nonowner-occupied loans	4		-	-	-
	Commercial leases	1		4	-	-
Residential mortgage loans		830		116	5	-
Consumer loans:
	Home equity	150		10	-	-
	Automobile loans	102		-	-	-
	Credit card	8,085		38	8	1
Total portfolio loans and leases		9,256	$	413	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
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
2016 ($ in millions)^(a)		During the Year^(b)	During the Year		Modification	Modification
Commercial loans and leases:
	Commercial and industrial loans	74	$	183	14	-
	Commercial mortgage owner-occupied loans	12		11	-	-
	Commercial mortgage nonowner-occupied loans	4		5	2	-
	Commercial leases	5		16	-	-
Residential mortgage loans		924		137	8	-
Consumer loans:
	Home equity	219		15	-	-
	Automobile loans	221		3	-	-
	Credit card	9,519		43	8	4
Total portfolio loans and leases		10,978	$	413	32	4

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
2015 ($ in millions)^(a)		During the Year^(b)	During the Year		Modification	Modification
Commercial loans:
	Commercial and industrial loans	77	$	146	7	3
	Commercial mortgage owner-occupied loans	18		16	(2)	-
	Commercial mortgage nonowner-occupied loans	12		7	(1)	-
Residential mortgage loans		1,089		155	8	-
Consumer loans:
	Home equity	267		16	(1)	-
	Automobile loans	440		7	1	-
	Credit card	12,569		62	11	7
Total portfolio loans		14,472	$	409	23	10

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 years ended December 31, 2017, 2016 and 2015 and were within twelve months of the restructuring date:

		Number of		Recorded
December 31, 2017 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	7	$	17
	Commercial mortgage owner-occupied loans	4		1
Residential mortgage loans		172		24
Consumer loans:
	Home equity	16		2
	Credit card	1,633		8
Total portfolio loans		1,832	$	52

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

		Number of		Recorded
December 31, 2016 ($ in millions)^(a)		Contracts		Investment
Commercial loans and leases:
	Commercial and industrial loans	8	$	5
	Commercial mortgage owner-occupied loans	2		-
	Commercial leases	2		1
Residential mortgage loans		172		25
Consumer loans:
	Home equity	17		1
	Automobile loans	2		-
	Credit card	1,715		7
Total portfolio loans and leases		1,918	$	39

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

		Number of		Recorded
December 31, 2015 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	7	$	11
	Commercial mortgage owner-occupied loans	3		1
Residential mortgage loans		156		21
Consumer loans:
	Home equity	15		1
	Automobile loans	8		-
	Credit card	1,935		8
Total portfolio loans		2,124	$	42

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