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

3 Months Ended

Mar. 31, 2019

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 March 31, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	645	81	267	110	1,103
	Losses charged-off^(a)		(20)	(2)	(86)	-	(108)
	Recoveries of losses previously charged-off^(a)		3	1	27	-	31
	Provision for (benefit from) loan and lease losses		26	(1)	62	2	89
Balance, end of period		$	654	79	270	112	1,115
(a) For the three months ended March 31, 2019, the Bancorp recorded $11 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 March 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
Balance, beginning of period		$	753	89	234	120	1,196
	Losses charged-off		(35)	(4)	(64)	-	(103)
	Recoveries of losses previously charged-off		6	1	15	-	22
	Provision for (benefit from) loan and lease losses		(11)	3	37	(6)	23
Balance, end of period		$	713	89	222	114	1,138

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 March 31, 2019 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	62	60	38	-	160
	Collectively evaluated for impairment		592	19	232	-	843
	Unallocated		-	-	-	112	112
Total ALLL		$	654	79	270	112	1,115
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	346	734	272	-	1,352
	Collectively evaluated for impairment		70,659	15,768	21,050	-	107,477
	Purchased credit impaired		683	119	21	-	823
Total portfolio loans and leases		$	71,688	16,621	21,343	-	109,652

Includes $1 related to leveraged leases at March 31, 2019.
Excludes $190 of residential mortgage loans measured at fair value and includes $571 of leveraged leases, net of unearned income at March 31, 2019.

				Residential
As of December 31, 2018 ($ in millions)			Commercial	Mortgage	Consumer	Unallocated	Total
ALLL:^(a)
	Individually evaluated for impairment	$	42	61	38	-	141
	Collectively evaluated for impairment		603	20	229	-	852
	Unallocated		-	-	-	110	110
Total ALLL		$	645	81	267	110	1,103
Portfolio loans and leases:^(b)
	Individually evaluated for impairment	$	277	736	278	-	1,291
	Collectively evaluated for impairment		59,294	14,589	19,912	-	93,795
Total portfolio loans and leases		$	59,571	15,325	20,190	-	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.

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 March 31, 2019 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	49,621	995	1,209	37	51,862
Commercial mortgage owner-occupied loans		4,133	71	208	-	4,412
Commercial mortgage nonowner-occupied loans		5,924	102	248	-	6,274
Commercial construction loans		5,186	36	9	-	5,231
Commercial leases		3,809	38	62	-	3,909
Total commercial loans and leases	$	68,673	1,242	1,736	37	71,688

			Special
As of December 31, 2018 ($ in millions)		Pass	Mention	Substandard	Doubtful	Total
Commercial and industrial loans	$	42,695	779	853	13	44,340
Commercial mortgage owner-occupied loans		3,122	23	139	-	3,284
Commercial mortgage nonowner-occupied loans		3,632	27	31	-	3,690
Commercial construction loans		4,657	-	-	-	4,657
Commercial leases		3,475	72	53	-	3,600
Total commercial loans and leases	$	57,581	901	1,076	13	59,571

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:

		March 31, 2019		December 31, 2018
($ in millions)		Performing	Nonperforming	Performing	Nonperforming
Residential mortgage loans^(a)	$	16,596	25	15,303	22
Home equity		6,355	80	6,332	70
Indirect secured consumer loans		10,028	3	8,975	1
Credit card		2,361	27	2,444	26
Other consumer loans		2,487	2	2,341	1
Total residential mortgage and consumer loans^(a)	$	37,827	137	35,395	120

(a) Excludes $190 and $179 of residential mortgage loans measured at fair value at March 31, 2019 and December 31, 2018, 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 March 31, 2019 ($ in millions)			Leases^(b)(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	51,737	53	72	125	51,862	15
	Commercial mortgage owner-occupied loans		4,384	16	12	28	4,412	8
	Commercial mortgage nonowner-occupied loans		6,256	3	15	18	6,274	12
	Commercial construction loans		5,230	1	-	1	5,231	-
	Commercial leases		3,904	5	-	5	3,909	-
Residential mortgage loans^(a)			16,512	36	73	109	16,621	48
Consumer loans:
	Home equity		6,300	78	57	135	6,435	1
	Indirect secured consumer loans		9,907	110	14	124	10,031	9
	Credit card		2,301	44	43	87	2,388	38
	Other consumer loans		2,468	18	3	21	2,489	1
Total portfolio loans and leases^(a)		$	108,999	364	289	653	109,652	132 ^(d)

Excludes $190 of residential mortgage loans measured at fair value at March 31, 2019.
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 March 31, 2019, $97 of these loans were 30-89 days past due and $262 were 90 days or more past due. The Bancorp recognized an immaterial amount of losses during the three months ended March 31, 2019 due to claim denials and curtailments associated with these insured or guaranteed loans.
Includes accrual and nonaccrual loans and leases.
Total portfolio loans and leases 90 days past due and still accruing reflect a decrease of $4 million which occurred after the Bancorp’s Form 8-K was filed on April 23, 2019.

			Current	Past Due				90 Days Past
			Loans and	30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2018 ($ in millions)			Leases^(b)(c)	Days^(c)	or More^(c)	Past Due	and Leases	Accruing
Commercial loans and leases:
	Commercial and industrial loans	$	44,213	32	95	127	44,340	4
	Commercial mortgage owner-occupied loans		3,277	1	6	7	3,284	2
	Commercial mortgage nonowner-occupied loans		3,688	1	1	2	3,690	-
	Commercial construction loans		4,657	-	-	-	4,657	-
	Commercial leases		3,597	1	2	3	3,600	-
Residential mortgage loans^(a)			15,227	37	61	98	15,325	38
Consumer loans:
	Home equity		6,280	71	51	122	6,402	-
	Indirect secured consumer loans		8,844	119	13	132	8,976	12
	Credit card		2,381	47	42	89	2,470	37
	Other consumer loans		2,323	17	2	19	2,342	-
Total portfolio loans and leases^(a)		$	94,487	326	273	599	95,086	93

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 $2 of losses during the three months ended March 31, 2018, 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 March 31, 2019 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	246	206		53
	Commercial mortgage owner-occupied loans		9	9		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		25	24		8
Restructured residential mortgage loans			457	454		60
Restructured consumer loans:
	Home equity		144	143		23
	Indirect secured consumer loans		5	5		1
	Credit card		46	44		14
Total impaired portfolio loans and leases with a related ALLL		$	934	886		160
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	84	77		-
	Commercial mortgage owner-occupied loans		18	18		-
	Commercial mortgage nonowner-occupied loans		11	11		-
Restructured residential mortgage loans			297	280		-
Restructured consumer loans:
	Home equity		80	79		-
	Indirect secured consumer loans		2	1		-
Total impaired portfolio loans with no related ALLL		$	492	466		-
Total impaired portfolio loans and leases		$	1,426	1,352	^(a)	160

Includes $59, $724 and $226, respectively, of commercial, residential mortgage and consumer portfolio TDRs on accrual status and $159, $10 and $46, respectively, of commercial, residential mortgage and consumer portfolio TDRs on nonaccrual status at March 31, 2019.


			Unpaid
			Principal	Recorded
As of December 31, 2018 ($ in millions)			Balance	Investment		ALLL
With a related ALLL:
Commercial loans and leases:
	Commercial and industrial loans	$	156	107		34
	Commercial mortgage owner-occupied loans		2	2		1
	Commercial mortgage nonowner-occupied loans		2	1		-
	Commercial leases		23	22		7
Restructured residential mortgage loans			465	462		61
Restructured consumer loans:
	Home equity		146	145		22
	Indirect secured consumer loans		5	4		1
	Credit card		47	44		15
Total impaired portfolio loans and leases with a related ALLL		$	846	787		141
With no related ALLL:
Commercial loans:
	Commercial and industrial loans	$	137	125		-
	Commercial mortgage owner-occupied loans		9	9		-
	Commercial mortgage nonowner-occupied loans		11	11		-
Restructured residential mortgage loans			292	274		-
Restructured consumer loans:
	Home equity		85	83		-
	Indirect secured consumer loans		2	2		-
Total impaired portfolio loans with no related ALLL		$	536	504		-
Total impaired portfolio loans and leases		$	1,382	1,291	a^(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.

The following table summarizes the Bancorp’s average impaired portfolio loans and leases, by class, and interest income, by class:

			For the three months ended		For the three months ended
			March 31, 2019		March 31, 2018
			Average	Interest	Average	Interest
			Recorded	Income	Recorded	Income
($ in millions)			Investment	Recognized	Investment	Recognized
Commercial loans and leases:
	Commercial and industrial loans	$	258	2	497	5
	Commercial mortgage owner-occupied loans		19	-	22	-
	Commercial mortgage nonowner-occupied loans		13	-	34	-
	Commercial leases		23	1	6	-
Restructured residential mortgage loans			734	7	665	6
Restructured consumer loans:
	Home equity		224	3	258	3
	Indirect secured consumer loans		6	-	9	-
	Credit card		44	1	48	1
Total average impaired portfolio loans and leases		$	1,321	14	1,539	15

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:

			March 31,	December 31,
($ in millions)			2019	2018
Commercial loans and leases:
	Commercial and industrial loans	$	260	193
	Commercial mortgage owner-occupied loans		28	11
	Commercial mortgage nonowner-occupied loans		3	2
	Commercial leases		22	22
Total nonaccrual portfolio commercial loans and leases			313	228
Residential mortgage loans			25	22
Consumer loans:
	Home equity		80	69
	Indirect secured consumer loans		3	1
	Credit card		27	27
	Other consumer loans		2	1
Total nonaccrual portfolio consumer loans			112	98
Total nonaccrual portfolio loans and leases^(a)(b)		$	450	348
OREO and other repossessed property			48	47
Total nonperforming portfolio assets^(a)(b)		$	498	395

Excludes $14 and $16 of nonaccrual loans held for sale at March 31, 2019 and December 31, 2018, respectively.
Includes $11 and $6 of nonaccrual government insured commercial loans whose repayments are insured by the SBA at March 31, 2019 and December 31, 2018, respectively, of which $6 and $2 are restructured nonaccrual government insured commercial loans at March 31, 2019 and December 31, 2018, 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
March 31, 2019 ($ in millions)^(a)		During the Period^(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	13	$	34	(5)	-
	Commercial mortgage owner-occupied loans	3		4	-	-
Residential mortgage loans		136		18	-	-
Consumer loans:
	Home equity	21		1	-	-
	Indirect secured consumer loans	29		-	-	-
	Credit card	1,409		8	2	1
Total portfolio loans		1,611	$	65	(3)	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 Modified		Increase	Charge-offs
		Modified in a TDR	in a TDR		to ALLL Upon	Recognized Upon
March 31, 2018 ($ in millions)^(a)		During the Period^(b)	During the Period		Modification	Modification
Commercial loans:
	Commercial and industrial loans	12	$	72	13	-
	Commercial mortgage owner-occupied loans	2		-	-	-
Residential mortgage loans		247		33	1	-
Consumer loans:
	Home equity	25		2	-	-
	Indirect secured consumer loans	20		-	-	-
	Credit card	1,965		10	2	-
Total portfolio loans		2,271	$	117	16	-

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 March 31, 2019 and 2018 and were within 12 months of the restructuring date:

		Number of		Recorded
March 31, 2019 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	2	$	16
Residential mortgage loans		76		12
Consumer loans:
	Home equity	4		-
	Credit card	283		2
Total portfolio loans		365	$	30

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

		Number of		Recorded
March 31, 2018 ($ in millions)^(a)		Contracts		Investment
Commercial loans:
	Commercial and industrial loans	1	$	1
	Commercial mortgage owner-occupied loans	2		-
Residential mortgage loans		48		7
Consumer loans:
	Home equity	2		-
	Credit card	242		1
Total portfolio loans		295	$	9

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