Commitments, Contingent Liabilities and Guarantees (Tables)

12 Months Ended

Dec. 31, 2019

Commitments, Contingent Liabilities and Guarantees

Summary of Significant Commitments

The Bancorp has certain commitments to make future payments under contracts. The following table reflects a summary of significant commitments as of December 31:

($ in millions)	2019		2018
Commitments to extend credit	$	75,696		70,415
Letters of credit		2,137		2,041
Forward contracts related to residential mortgage loans held for sale		2,901		926
Purchase obligations		113		126
Capital commitments for private equity investments		75		32
Capital expenditures		84		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 December 31:

($ in millions)	2019		2018
Pass	$	74,654		69,928
Special mention		633		271
Substandard		408		216
Doubtful		1		-
Total commitments to extend credit	$	75,696		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 December 31, 2019:

($ in millions)
Less than 1 year(a)	$	1,022
1 - 5 years(a)		1,110
Over 5 years		5
Total letters of credit	$	2,137

(a) Includes $2 and $2 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 letters of credit under this risk rating system are summarized in the following table as of December 31:

($ in millions)	2019		2018
Pass	$	2,005		1,905
Special mention		20		10
Substandard		111		126
Doubtful		1		-
Total letters of credit	$	2,137		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 years ended December 31:

($ in millions)	2019		2018
Balance, beginning of period	$	6		9
Net reductions to the reserve		-		(3)
Balance, end of period	$	6		6

Schedule of Liability for Unpaid Claims and Claims Adjustment Expense

The following tables provide a rollforward of unresolved claims by claimant type for the years ended December 31:

	GSE					Private Label
2019 ($ in millions)	Units			Dollars		Units			Dollars
Balance, beginning of period		9		$	1		1		$	-
New demands		258			45		8			1
Loan paydowns/payoffs		(3	)		-		-			-
Resolved demands		(237	)		(40)		(8	)		(1)
Balance, end of period		27		$	6		1		$	-
	GSE					Private Label
2018 ($ in millions)	Units			Dollars		Units			Dollars
Balance, beginning of period		6		$	1		1		$	-
New demands		121			19		-			-
Resolved demands		(118	)		(19)		-			-
Balance, end of period		9		$	1		1		$	-

Visa Funding and Bancorp Cash Payments

After the Bancorp’s sale of the Class B Shares, Visa has 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:

Period ($ in millions)	Visa Funding Amount		Bancorp Cash                 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
Q3 2019		300	12