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Credit Quality and the Allowance for Loan and Lease Losses (Tables)
 12 Months Ended
Dec. 31, 2018
Credit Quality and the Allowance for Loan and Leases Losses  
Summary of Transactions in the ALLL
The following tables summarize transactions in the ALLL by portfolio segment for the years ended December 31:
Residential
2018 ($ in millions)CommercialMortgageConsumerUnallocatedTotal
Balance, beginning of period$753892341201,196
Losses charged-off(a)(157)(13)(280)-(450)
Recoveries of losses previously charged-off(a)25689-120
Provision for (benefit from) loan and lease losses24(1)224(10)237
Balance, end of period$645812671101,103
(a) For the year ended December 31, 2018, the Bancorp recorded $29 in both losses charged-off and recoveries of losses charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.
Residential
2017 ($ in millions)CommercialMortgageConsumerUnallocatedTotal
Balance, beginning of period$831962141121,253
Losses charged-off(154)(15)(212)-(381)
Recoveries of losses previously charged-off29846-83
Provision for loan and lease losses66-1869261
Deconsolidation of a VIE(a)(19)--(1)(20)
Balance, end of period$753892341201,196
(a) Refer to Note 10 for further discussion on the deconsolidation of a VIE.
Residential
2016 ($ in millions)CommercialMortgageConsumerUnallocatedTotal
Balance, beginning of period$8401002171151,272
Losses charged-off(232)(19)(205)-(456)
Recoveries of losses previously charged-off42943-94
Provision for (benefit from) loan and lease losses1816159(3)343
Balance, end of period$831962141121,253
Summary of the ALLL and Related Loans and Leases Classified by Portfolio Segment
The following tables provide a summary of the ALLL and related loans and leases classified by portfolio segment:
Residential
As of December 31, 2018 ($ in millions)CommercialMortgageConsumerUnallocatedTotal
ALLL:(a)
Individually evaluated for impairment$42a6138-141
Collectively evaluated for impairment60320229-852
Unallocated---110110
Total ALLL$645812671101,103
Portfolio loans and leases:(b)
Individually evaluated for impairment$277a736278-1,291
Collectively evaluated for impairment59,29414,58919,912-93,795
Total portfolio loans and leases$59,57115,32520,190-95,086

  • Includes $1 related to leveraged leases at December 31, 2018.
  • Excludes $179 of residential mortgage loans measured at fair value and includes $624 of leveraged leases, net of unearned income, at December 31, 2018.

Residential
As of December 31, 2017 ($ in millions)Commercial MortgageConsumerUnallocatedTotal
ALLL:(a)
Individually evaluated for impairment$94a6442-200
Collectively evaluated for impairment65925192-876
Unallocated---120120
Total ALLL$753892341201,196
Portfolio loans and leases:(b)
Individually evaluated for impairment$560a665320-1,545
Collectively evaluated for impairment55,83514,78719,664-90,286
Loans acquired with deteriorated credit quality-2--2
Total portfolio loans and leases$56,39515,45419,984-91,833

  • Includes $1 related to leveraged leases at December 31, 2017.
  • Excludes $137 of residential mortgage loans measured at fair value and includes $674 of leveraged leases, net of unearned income at December 31, 2017.
Loan and leases balances by credit quality indicator
The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:
Special
As of December 31, 2018 ($ in millions)PassMentionSubstandardDoubtfulTotal
Commercial and industrial loans$42,6957798531344,340
Commercial mortgage owner-occupied loans3,12223139-3,284
Commercial mortgage nonowner-occupied loans 3,6322731-3,690
Commercial construction loans4,657---4,657
Commercial leases3,4757253-3,600
Total commercial loans and leases$57,5819011,0761359,571

Special
As of December 31, 2017 ($ in millions)PassMentionSubstandardDoubtfulTotal
Commercial and industrial loans$38,8131,1151,235741,170
Commercial mortgage owner-occupied loans3,2077580-3,362
Commercial mortgage nonowner-occupied loans 3,1172897-3,242
Commercial construction loans4,553---4,553
Commercial leases3,9227274-4,068
Total commercial loans and leases$53,6121,2901,486756,395

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 December 31:
20182017
($ in millions)PerformingNonperformingPerformingNonperforming
Residential mortgage loans(a)$15,3032215,42430
Home equity6,332706,94074
Automobile loans8,97519,1111
Credit card2,444262,27326
Other consumer loans2,34111,559-
Total residential mortgage and consumer loans(a)$35,39512035,307131

(a) Excludes $179 and $137 of residential mortgage loans measured at fair value at December 31, 2018 and 2017, respectively.
Summary by Age and Class of the Recorded Investment in Delinquencies Included in the Bancorp's Portfolio of Loans and Leases
The following tables summarize the Bancorp’s recorded investment in portfolio loans and leases, by age and class:
CurrentPast Due90 Days Past
Loans and 30-89 90 Days Total Total LoansDue and Still
As of December 31, 2018 ($ in millions)Leases(b)(c)Days(c)or More(c)Past Dueand LeasesAccruing
Commercial loans and leases:
Commercial and industrial loans $44,213329512744,3404
Commercial mortgage owner-occupied loans3,2771673,2842
Commercial mortgage nonowner-occupied loans3,6881123,690-
Commercial construction loans4,657---4,657-
Commercial leases3,5971233,600-
Residential mortgage loans(a)15,22737619815,32538
Consumer loans:
Home equity6,28071511226,402-
Automobile loans8,844119131328,97612
Credit card2,3814742892,47037
Other consumer loans2,323172192,342-
Total portfolio loans and leases(a)$94,48732627359995,08693

  • Excludes $179 of residential mortgage loans measured at fair value at December 31, 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 December 31, 2018, $90 of these loans were 30-89 days past due and $195 were 90 days or more past due. The Bancorp recognized $5 of losses during the year ended December 31, 2018 due to claim denials and curtailments associated with these insured or guaranteed loans.
  • Includes accrual and nonaccrual loans and leases.

CurrentPast Due90 Days Past
Loans and 30-8990 Days Total Total LoansDue and Still
As of December 31, 2017 ($ in millions)Leases(b)(c)Days(c)or More(c)Past Dueand LeasesAccruing
Commercial loans and leases:
Commercial and industrial loans $41,0274210114341,1703
Commercial mortgage owner-occupied loans3,35138113,362-
Commercial mortgage nonowner-occupied loans3,235-773,242-
Commercial construction loans4,5521-14,553-
Commercial leases4,0653-34,068-
Residential mortgage loans(a)15,301668715315,45457
Consumer loans:
Home equity6,88870561267,014-
Automobile loans8,992107131209,11210
Credit card2,2303633692,29927
Other consumer loans1,5545-51,559-
Total portfolio loans and leases(a)$91,19533330563891,83397

  • 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 $5 of losses during the year ended December 31, 2017 due to claim denials and curtailments associated with these insured or guaranteed loans.
  • Includes accrual and nonaccrual loans and leases.
Summarizes the Bancorp's Recorded Investment in Impaired Loans and Related Allowance by Class
The following tables summarize the Bancorp’s impaired portfolio loans and leases, by class, that were subject to individual review, which includes all portfolio loans and leases restructured in a TDR as of December 31:
Unpaid
PrincipalRecorded
2018 ($ in millions)BalanceInvestmentALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans $15610734
Commercial mortgage owner-occupied loans221
Commercial mortgage nonowner-occupied loans21-
Commercial leases23227
Restructured residential mortgage loans46546261
Restructured consumer loans:
Home equity14614522
Automobile loans541
Credit card474415
Total impaired portfolio loans and leases with a related ALLL$846787141
With no related ALLL:
Commercial loans:
Commercial and industrial loans $137125-
Commercial mortgage owner-occupied loans99-
Commercial mortgage nonowner-occupied loans1111-
Restructured residential mortgage loans292274-
Restructured consumer loans:
Home equity8583-
Automobile loans22-
Total impaired portfolio loans with no related ALLL$536504-
Total impaired portfolio loans and leases$1,3821,291(a)141

Includes $60, $724 and $237, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $147, $12 and $41, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at December 31, 2018.

Unpaid
PrincipalRecorded
2017 ($ in millions)BalanceInvestmentALLL
With a related ALLL:
Commercial loans and leases:
Commercial and industrial loans $43335887
Commercial mortgage owner-occupied loans16147
Commercial mortgage nonowner-occupied loans43-
Commercial leases44-
Restructured residential mortgage loans46946564
Restructured consumer loans:
Home equity17217227
Automobile loans871
Credit card524514
Total impaired portfolio loans and leases with a related ALLL$1,1581,068200
With no related ALLL:
Commercial loans and leases:
Commercial and industrial loans $151131-
Commercial mortgage owner-occupied loans1815-
Commercial mortgage nonowner-occupied loans3535-
Restructured residential mortgage loans218200-
Restructured consumer loans:
Home equity9794-
Automobile loans22-
Total impaired portfolio loans and leases with no related ALLL$521477-
Total impaired portfolio loans and leases$1,6791,545a(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 table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class, for the years ended December 31:
201820172016
AverageInterestAverageInterestAverageInterest
RecordedIncomeRecordedIncomeRecordedIncome
($ in millions)InvestmentRecognizedInvestmentRecognizedInvestmentRecognized
Commercial loans and leases:
Commercial and industrial loans $373155791069110
Commercial mortgage owner-occupied loans(a)15-35-631
Commercial mortgage nonowner-occupied loans24-6111395
Commercial construction loans----3-
Commercial leases18-3-5-
Restructured residential mortgage loans743286572564725
Restructured consumer loans:
Home equity244122811232512
Automobile loans8-11-17-
Credit card445504565
Total average impaired portfolio loans and leases$1,469601,677521,94658

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 and $26 for the years ended December 31, 2017 and 2016, respectively. An immaterial amount of interest income was recognized during both the years ended December 31, 2017 and 2016. Refer to Note 10 for further discussion on the deconsolidation of the VIE associated with these loans in the third quarter of 2017.
Summary of the Bancorp's Nonperforming Loans and Leases by Class
The following table presents the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of December 31:
($ in millions)20182017
Commercial loans and leases:
Commercial and industrial loans $193276
Commercial mortgage owner-occupied loans1119
Commercial mortgage nonowner-occupied loans27
Commercial leases224
Total nonaccrual portfolio commercial loans and leases228306
Residential mortgage loans2230
Consumer loans:
Home equity6974
Automobile loans11
Credit card2726
Other consumer loans1-
Total nonaccrual portfolio consumer loans98101
Total nonaccrual portfolio loans and leases(a)(b)$348437
OREO and other repossessed property4752
Total nonperforming portfolio assets(a)(b)$395489

  • Excludes $16 and $6 of nonaccrual loans and leases held for sale at December 31, 2018 and 2017, respectively.
  • Includes $6 and $3 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at December 31, 2018 and 2017, respectively, of which $2 and $3 are restructured nonaccrual government insured commercial loans at December 31, 2018 and 2017, respectively.
Summary of Loans Modified in a TDR
The following tables provide a summary of loans and leases, by class, modified in a TDR by the Bancorp during the years ended December 31:
Recorded InvestmentIncrease
Number of Loansin Loans Modified(Decrease)Charge-offs
Modified in a TDRin a TDR to ALLL UponRecognized Upon
2018 ($ in millions)(a)During the Year(b)During the YearModificationModification
Commercial loans and leases:
Commercial and industrial loans 54$20017
Commercial mortgage owner-occupied loans63(1)-
Commercial mortgage nonowner-occupied loans3---
Residential mortgage loans1,1281684-
Consumer loans:
Home equity1117--
Automobile loans84---
Credit card7,4833792
Total portfolio loans and leases8,869$415139

  • 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 InvestmentIncrease (Decrease)
Number of Loansin Loans ModifiedCharge-offs
Modified in a TDRin a TDR to ALLL UponRecognized Upon
2017 ($ in millions)(a)During the Year(b)During the YearModificationModification
Commercial loans and leases:
Commercial and industrial loans 75$237(5)6
Commercial mortgage owner-occupied loans985-
Commercial mortgage nonowner-occupied loans4---
Commercial leases14--
Residential mortgage loans8301165-
Consumer loans:
Home equity15010--
Automobile loans102---
Credit card8,0853881
Total portfolio loans and leases9,256$413137

  • 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 Loansin Loans ModifiedIncreaseCharge-offs
Modified in a TDRin a TDR to ALLL UponRecognized Upon
2016 ($ in millions)(a)During the Year(b)During the YearModificationModification
Commercial loans and leases:
Commercial and industrial loans 74$18314-
Commercial mortgage owner-occupied loans1211--
Commercial mortgage nonowner-occupied loans452-
Commercial leases516--
Residential mortgage loans9241378-
Consumer loans:
Home equity21915--
Automobile loans2213--
Credit card9,5194384
Total portfolio loans and leases10,978$413324

  • 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 years ended December 31, 2018, 2017 and 2016 and were within twelve months of the restructuring date:
Number ofRecorded
December 31, 2018 ($ in millions)(a)ContractsInvestment
Commercial loans and leases:
Commercial and industrial loans 8$61
Commercial mortgage owner-occupied loans2-
Residential mortgage loans22535
Consumer loans:
Home equity10-
Credit card6554
Total portfolio loans and leases900$100

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

Number ofRecorded
December 31, 2017 ($ in millions)(a)ContractsInvestment
Commercial loans and leases:
Commercial and industrial loans 7$17
Commercial mortgage owner-occupied loans41
Residential mortgage loans17224
Consumer loans:
Home equity162
Credit card1,6338
Total portfolio loans and leases1,832$52

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

Number ofRecorded
December 31, 2016 ($ in millions)(a)ContractsInvestment
Commercial loans and leases:
Commercial and industrial loans 8$5
Commercial mortgage owner-occupied loans2-
Commercial leases21
Residential mortgage loans17225
Consumer loans:
Home equity171
Automobile loans2-
Credit card1,7157
Total portfolio loans and leases1,918$39

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