Commitments, Contingent Liabilities and Guarantees (Tables)

6 Months Ended

Jun. 30, 2019

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:
		June 30,	December 31,
($ in millions)		2019	2018
Commitments to extend credit	$	77,612	70,415
Letters of credit		2,212	2,041
Forward contracts related to residential mortgage loans held for sale		1,541	926
Purchase obligations		108	126
Capital commitments for private equity investments		79	32
Capital expenditures		73	45

Credit Risk Associated With Commitments

Risk ratings of outstanding commitments to extend credit under this risk rating system are summarized in the following table as of:
		June 30,	December 31,
($ in millions)		2019	2018
Pass	$	76,761	69,928
Special mention		463	271
Substandard		388	216
Total commitments to extend credit	$	77,612	70,415

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 June 30, 2019:
($ in millions)
Less than 1 year(a)	$	1,205
1 - 5 years(a)		1,004
Over 5 years		3
Total letters of credit	$	2,212

(a) Includes $9 and $5 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 of outstanding letters of credit under this risk rating system are summarized in the following table as of:
		June 30,	December 31,
($ in millions)		2019	2018
Pass	$	2,058	1,905
Special mention		19	10
Substandard		135	126
Total letters of credit	$	2,212	2,041

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 six months ended
		June 30,		June 30,
($ in millions)		2019	2018	2019	2018
Balance, beginning of period	$	8	8	6	9
Net reductions to the reserve		(1)	(1)	1	(2)
Balance, end of period	$	7	7	7	7

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following tables provide a rollforward of unresolved claims by claimant type for the six months ended:
	GSE			Private Label
June 30, 2019 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	9	$	1	1	$	-
New demands	160		27	1		-
Loan paydowns/payoffs	(3)		-	-		-
Resolved demands	(139)		(23)	(2)		-
Balance, end of period	27	$	5	-	$	-

	GSE			Private Label
June 30, 2018 ($ in millions)	Units		Dollars	Units		Dollars
Balance, beginning of period	6	$	1	1	$	-
New demands	62		11	-		-
Resolved demands	(54)		(9)	-		-
Balance, end of period	14	$	3	1	$	-

Visa Funding and Bancorp Cash Payments

After the Bancorp’s sale of the Class B Shares, Visa 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
Q2 2018		600	26	i