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

6 Months Ended

Jun. 30, 2018

Credit Quality and the Allowance for Loan and Leases Losses

Summary of Transactions in the ALLL

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, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	713	89	222	114	1,138
	Losses charged-off(a)		(54)	(4)	(60)	-	(118)
	Recoveries of losses previously charged-off(a)		5	2	17	-	24
	Provision for (benefit from) loan and lease losses		(10)	(1)	50	(6)	33
Balance, end of period		$	654	86	229	108	1,077
(a) For the three months ended June 30, 2018, the Bancorp recorded $6 in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the three months ended June 30, 2017 ($ 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 six months ended June 30, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off(a)		(87)	(7)	(128)	-	(222)
	Recoveries of losses previously charged-off(a)		11	3	33	-	47
	Provision for (benefit from) loan and lease losses		(23)	1	90	(12)	56
Balance, end of period		$	654	86	229	108	1,077
(a) For the six months ended June 30, 2018, the Bancorp recorded $10 in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
				Residential
For the six months ended June 30, 2017 ($ 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

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, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	75	65	38	-	178
	Collectively evaluated for impairment		579	21	191	-	791
	Unallocated		-	-	-	108	108
Total ALLL		$	654	86	229	108	1,077
Portfolio loans and leases:(b)
	Individually evaluated for impairment	$	400	788	297	-	1,485
	Collectively evaluated for impairment		56,103	14,690	19,492	-	90,285
Total portfolio loans and leases		$	56,503	15,478	19,789	-	91,770

• Includes $1 related to leveraged leases at June 30, 2018.
• Excludes $162of residential mortgage loans measured at fair value and includes $650of leveraged leases, net of unearned income at June 30, 2018.

				Residential
As of December 31, 2017 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:(a)
	Individually evaluated for impairment	$	94	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	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.

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, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	39,601	899	885	18	41,403
Commercial mortgage owner-occupied loans		3,217	40	134	-	3,391
Commercial mortgage nonowner-occupied loans		3,200	21	13	-	3,234
Commercial construction loans		4,652	35	-	-	4,687
Commercial leases		3,649	54	85	-	3,788
Total commercial loans and leases	$	54,319	1,049	1,117	18	56,503

			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

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, 2018		December 31, 2017
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans(a)	$	15,450	28	15,424	30
Home equity		6,528	71	6,940	74
Automobile loans		8,933	5	9,111	1
Credit card		2,243	27	2,273	26
Other consumer loans		1,981	1	1,559	-
Total residential mortgage and consumer loans	$	35,135	132	35,307	131

(a) Excludes $162and $137 of residential mortgage loans measured at fair value at June 30, 2018 and December 31, 2017, 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, 2018 ($ in millions)			Leases(b)(c)	Days(c)	or More(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	41,281	19	103	122	41,403	4
	Commercial mortgage owner-occupied loans		3,384	1	6	7	3,391	-
	Commercial mortgage nonowner-occupied loans		3,228	3	3	6	3,234	-
	Commercial construction loans		4,687	-	-	-	4,687	-
	Commercial leases		3,784	-	4	4	3,788	-
Residential mortgage loans(a)			15,382	24	72	96	15,478	44
Consumer loans:
	Home equity		6,482	66	51	117	6,599	-
	Automobile loans		8,840	84	14	98	8,938	10
	Credit card		2,198	36	36	72	2,270	31
	Other consumer loans		1,972	8	2	10	1,982	-
Total portfolio loans and leases		$	91,238	241	291	532	91,770	89

• Excludes $162 of residential mortgage loans measured at fair value at June 30, 2018.
• 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 June 30, 2018, $71of these loans were 30-89 days past due and $237 were 90 days or more past due. The Bancorp recognized $1and $3of lossesduring the three and six months ended June 30, 2018due 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, 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		$	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, $95of these loans were 30-89 days past due and $290 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.

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, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	248	204		63
	Commercial mortgage owner-occupied loans		4	3		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		29	29		11
Restructured residential mortgage loans			497	494		65
Restructured consumer loans:
	Home equity		158	157		22
	Automobile loans		6	6		1
	Credit card		48	45		15
Total impaired portfolio loans and leases with a related ALLL		$	992	939		178
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	147	124		-
	Commercial mortgage owner-occupied loans		15	12		-
	Commercial mortgage nonowner-occupied loans		28	27		-
Restructured residential mortgage loans			314	294		-
Restructured consumer loans:
	Home equity		90	87		-
	Automobile loans		3	2		-
Total impaired portfolio loans with no related ALLL		$	597	546		-
Total impaired portfolio loans and leases		$	1,589	1,485	(a)	178

Includes $104, $773 and $251, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $173, $15 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at June 30, 2018.

			Unpaid
			Principal	Recorded
As of December 31, 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(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.

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, 2018		June 30, 2018
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	417	5	439	10
	Commercial mortgage owner-occupied loans		16	-	20	-
	Commercial mortgage nonowner-occupied loans		29	-	32	-
	Commercial leases		18	-	14	-
Restructured residential mortgage loans			799	8	732	14
Restructured consumer loans:
	Home equity		248	3	253	6
	Automobile loans		8	-	9	-
	Credit card		46	1	47	2
Total average impaired portfolio loans and leases		$	1,581	17	1,546	32

			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:
	Home equity		287	3	293	6
	Automobile loans		12	-	13	-
	Credit card		49	1	51	2
Total average impaired loans and leases		$	1,743	11	1,796	23

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 $26for both the three and six months ended June 30, 2017. An immaterial amount of interest income was recognized during the six months ended June 30, 2017. Refer to Note 9 for further discussion on the deconsolidation of the 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:
			June 30,	December 31,
($ in millions)			2018	2017
Commercial loans and leases:
	Commercial and industrial loans	$	263	276
	Commercial mortgage owner-occupied loans		10	19
	Commercial mortgage nonowner-occupied loans		3	7
	Commercial leases		29	4
Total nonaccrual portfolio commercial loans and leases			305	306
Residential mortgage loans			28	30
Consumer loans:
	Home equity		71	74
	Automobile loans		5	1
	Credit card		27	26
	Other consumer loans		1	-
Total nonaccrual portfolio consumer loans			104	101
Total nonaccrual portfolio loans and leases(a)(b)		$	437	437
OREO and other repossessed property			43	52
Total nonperforming portfolio assets(a)(b)		$	480	489

• Excludes $23and $6 of nonaccrual loans held for sale at June 30, 2018 and December 31, 2017, respectively.
• Includes $4and $3of nonaccrual government insured commercial loans whose repayments are insured by the SBA at June 30, 2018 and December 31, 2017, respectively, of which $2 and $3are restructured nonaccrual government insured commercial loans at June 30, 2018and December 31, 2017, 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		(Decrease)
		Number of Loans	in Loans Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
June 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	13	$	64	(4)	-
Residential mortgage loans		537		91	2	-
Consumer loans:
	Home equity	29		2	-	-
	Automobile loans	19		-	-	-
	Credit card	1,675		9	2	1
Total portfolio loans		2,273	$	166	-	1

• Excludes all loans and leasesheld 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, 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.

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		Increase
		Number of Loans	in Loans Modified		(Decrease)	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
June 30, 2018 ($ in millions)(a)		During the Period(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	25	$	135	9	-
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		784		124	3	-
Consumer loans:
	Home equity	54		4	-	-
	Automobile loans	39		-	-	-
	Credit card	3,640		19	4	1
Total portfolio loans		4,544	$	282	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.

			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
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.

Summary of Subsequent Defaults

The following tables provide a summary of TDRs that subsequently defaulted during the three months ended June 30, 2018 and 2017 and were within twelve months of the restructuring date:
		Number of		Recorded
June 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	28
Residential mortgage loans		62		13
Consumer loans:
	Credit card	137		1
Total portfolio loans		201	$	42

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

		Number of		Recorded
June 30, 2017 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	15
	Commercial mortgage nonowner-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.

The following tables provide a summary of TDRs that subsequently defaulted during the six months ended June 30, 2018 and 2017 and were within twelve months of the restructuring date:
		Number of		Recorded
June 30, 2018 ($ in millions)(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	3	$	29
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		110		20
Consumer loans:
	Home equity	2		-
	Credit card	379		2
Total portfolio loans		496	$	51

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

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

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