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

3 Months Ended

Mar. 31, 2020

The following tables summarize transactions in the ALLL by portfolio segment:


For the three months ended March 31, 2020 ($ in millions)		Commercial		Residential Mortgage		Consumer		Unallocated		Total
Balance, beginning of period	$		710		73		298		121		1,202
Impact of adoption of ASU 2016-13 (a)			160		196		408		(121)		643
Losses charged-off (b)			(61)		(2)		(96)		-		(159)
Recoveries of losses previously charged-off (b)			4		1		32		-		37
Provision for (benefit from) loan and lease losses			500		(8)		133		-		625
Balance, end of period	$		1,313		260		775		-		2,348

(a)	Includes $31, $1 and $1 in Commercial, Residential Mortgage and Consumer, respectively, related to the initial recognition of an ALLL on PCD loans.

(b)	The Bancorp recorded $13 i n both losses charged-off and recoveries of losses previously charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.


For the three months ended March 31, 2019 ($ in millions)		Commercial		Residential 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)	The Bancorp recorded $11 in both losses charged-off and recoveries of losses previously charged-off related to customer defaults on point-of-sale consumer loans for which the Bancorp obtained recoveries under third-party credit enhancements.

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:


As of March 31, 2020 ($ in millions)		Commercial		Residential Mortgage		Consumer		Total
ALLL: (a)
Individually evaluated	$		118		77		60		255
Collectively evaluated			1,195		183		715		2,093
Total ALLL	$		1,313		260		775		2,348
Portfolio loans and leases: (b)
Individually evaluated	$		547		813		296		1,656
Collectively evaluated			76,989		15,674		23,025		115,688
Purchased credit deteriorated			459		29		20		508
Total portfolio loans and leases	$		77,995		16,516		23,341		117,852

(a)	Includes $4 related to leveraged leases at March 31, 2020.

(b)	Excludes $185 of residential mortgage loans measured at fair value and includes $379 of leveraged leases, net of unearned income at March 31, 2020.


As of December 31, 2019 ($ in millions)		Commercial		Residential Mortgage		Consumer		Unallocated		Total
ALLL: (a)
Individually evaluated for impairment	$		82		55		33		-		170
Collectively evaluated for impairment			628		18		265		-		911
Unallocated			-		-		-		121		121
Total ALLL	$		710		73		298		121		1,202
Portfolio loans and leases: (b)
Individually evaluated for impairment	$		413		814		302		-		1,529
Collectively evaluated for impairment			69,047		15,690		22,558		-		107,295
Purchased credit impaired			498		37		16		-		551
Total portfolio loans and leases	$		69,958		16,541		22,876		-		109,375

(a)	Includes $1 related to leveraged leases at December 31, 2019.

(b)	Excludes $183 of residential mor tgage loans measured at fair value and includes $429 of leveraged leases, net of unearned income at December 31, 2019.

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 and vintage:
		Term Loans and Leases Amortized Cost Basis by Origination Year												Revolving Loans Amortized		Revolving Loans Converted to Term Loans Amortized Cost
As of March 31, 2020 ($ in millions)		2020		2019		2018		2017		2016		Prior		Cost Basis		Basis		Total
Commercial and industrial loans:
Pass	$		987		3,217		1,832		1,302		754		1,128		44,212		-		53,432
Special mention			28		89		188		63		42		8		2,631		-		3,049
Substandard			11		53		89		78		58		70		1,385		-		1,744
Doubtful			-		-		-		-		-		-		25		-		25
Total commercial and industrial loans	$		1,026		3,359		2,109		1,443		854		1,206		48,253		-		58,250
Commercial mortgage owner-occupied loans:
Pass	$		297		903		624		474		322		730		1,052		-		4,402
Special mention			3		28		43		30		13		17		48		-		182
Substandard			16		64		38		39		13		46		85		-		301
Doubtful			-		-		-		-		-		-		-		-		-
Total commercial mortgage owner-occupied loans	$		316		995		705		543		348		793		1,185		-		4,885
Commercial mortgage nonowner-occupied loans:
Pass	$		229		1,266		735		357		330		591		2,372		-		5,880
Special mention			4		9		17		13		18		6		151		-		218
Substandard			9		27		2		11		-		43		85		-		177
Doubtful			-		-		-		-		-		-		-		-		-
Total commercial mortgage nonowner-occupied loans	$		242		1,302		754		381		348		640		2,608		-		6,275
Commercial construction loans:
Pass	$		9		90		28		-		10		29		5,075		-		5,241
Special mention			-		4		-		-		-		-		172		-		176
Substandard			-		-		-		-		-		4		41		-		45
Doubtful			-		-		-		-		-		-		-		-		-
Total commercial construction loans	$		9		94		28		-		10		33		5,288		-		5,462
Commercial leases:
Pass	$		22		174		429		486		403		1,438		-		-		2,952
Special mention			-		1		17		34		11		36		-		-		99
Substandard			-		3		7		18		12		32		-		-		72
Doubtful			-		-		-		-		-		-		-		-		-
Total commercial leases	$		22		178		453		538		426		1,506		-		-		3,123
Total commercial loans and leases	$		1,615		5,928		4,049		2,905		1,986		4,178		57,334		-		77,995

The following tables summarize the credit risk profile of the Bancorp’s commercial portfolio segment, by class:


As of December 31, 2019 ($ in millions)		Pass		Special Mention		Substandard		Doubtful		Total
Commercial and industrial loans	$		47,671		1,423		1,406		42		50,542
Commercial mortgage owner-occupied loans			4,421		162		293		4		4,880
Commercial mortgage nonowner-occupied loans			5,866		135		82		-		6,083
Commercial construction loans			4,963		52		75		-		5,090
Commercial leases			3,222		53		88		-		3,363
Total commercial loans and leases	$		66,143		1,825		1,944		46		69,958

The following table presents a summary of the Bancorp’s residential mortgage and consumer portfolio segments, by class and vintage, disaggregated by both age and performing versus nonperforming status as of:


		Term Loans Amortized Cost Basis by Origination Year							Revolving Loans Amortized	Revolving Loans Converted to Term Loans Amortized Cost
As of March 31, 2020 ($ in millions)			2020	2019	2018	2017	2016	Prior	Cost Basis	Basis	Total
Residential mortgage loans:
Performing:
Current (a)	$		693	2,748	1,333	2,332	3,088	6,170	-	-	16,364
30-89 days past due			-	2	1	1	3	18	-	-	25
90 days or more past due			-	-	1	5	5	43	-	-	54
Total performing			693	2,750	1,335	2,338	3,096	6,231	-	-	16,443
Nonperforming			-	-	-	1	3	69	-	-	73
Total residential mortgage loans (b)	$		693	2,750	1,335	2,339	3,099	6,300	-	-	16,516
Home equity:
Performing:
Current	$		7	33	40	4	1	157	5,573	9	5,824
30-89 days past due			-	-	-	-	-	4	45	-	49
90 days or more past due			-	-	-	-	-	-	-	-	-
Total performing			7	33	40	4	1	161	5,618	9	5,873
Nonperforming			-	-	-	-	-	11	79	-	90
Total home equity	$		7	33	40	4	1	172	5,697	9	5,963
Indirect secured consumer loans:
Performing:
Current	$		1,816	5,124	2,401	1,343	677	529	-	-	11,890
30-89 days past due			2	45	43	26	13	12	-	-	141
90 days or more past due			-	2	3	3	1	2	-	-	11
Total performing			1,818	5,171	2,447	1,372	691	543	-	-	12,042
Nonperforming			-	1	1	2	2	2	-	-	8
Total indirect secured consumer loans	$		1,818	5,172	2,448	1,374	693	545	-	-	12,050
Credit card:
Performing:
Current	$		-	-	-	-	-	-	2,305	-	2,305
30-89 days past due			-	-	-	-	-	-	41	-	41
90 days or more past due			-	-	-	-	-	-	42	-	42
Total performing			-	-	-	-	-	-	2,388	-	2,388
Nonperforming			-	-	-	-	-	-	29	-	29
Total credit card	$		-	-	-	-	-	-	2,417	-	2,417
Other consumer loans:
Performing:
Current	$		328	864	616	253	47	71	707	-	2,886
30-89 days past due			-	6	7	4	1	1	3	-	22
90 days or more past due			-	1	-	-	-	-	-	-	1
Total performing			328	871	623	257	48	72	710	-	2,909
Nonperforming			-	-	-	-	-	-	2	-	2
Total other consumer loans	$		328	871	623	257	48	72	712	-	2,911
Total consumer loans (b)	$		2,846	8,826	4,446	3,974	3,841	7,089	8,826	9	39,857

(a)

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, 2020, $79 of these loans were

30-89

days past due and $269 were 90 days or more past due. The Bancorp recognized $1 of losses during the three months ended March 31, 2020 due to claim denials and curtailments associated with these insured or guaranteed loans.

(b)	Excludes $185 of residential mort gage loans measured at fair value at March 31, 2020.

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, 2019 ($ in millions)	Performing		Nonperforming
Residential mortgage loans (a)	$	16,450		91
Home equity		5,989		94
Indirect secured consumer loans		11,531		7
Credit card		2,505		27
Other consumer loans		2,721		2
Total residential mortgage and consumer loans (a)	$	39,196		221

(a)	Excludes $183 of residential mortgage loans measured at fair value at December 31, 2019.

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 Commercial Loans and Leases

The following tables summarize the Bancorp’s amortized cost basis in portfolio commercial 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, 2020 ($ in millions)		Leases (a)		Days (a)	or More (a)	Past Due	and Leases	Accruing
Commercial loans and leases:
Commercial and industrial loans	$	57,996		120	134	254	58,250	13
Commercial mortgage owner-occupied loans		4,846		16	23	39	4,885	7
Commercial mortgage nonowner-occupied loans		6,255		6	14	20	6,275	13
Commercial construction loans		5,457		4	1	5	5,462	-
Commercial leases		3,084		14	25	39	3,123	10
Total portfolio commercial loans and leases	$	77,638		160	197	357	77,995	43

(a)	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, 2019 ($ in millions)		Leases (a)		Days (a)		or More (a)		Past Due		and Leases		Accruing
Commercial loans and leases:
Commercial and industrial loans	$		50,305		133		104		237		50,542		11
Commercial mortgage owner-occupied loans			4,853		4		23		27		4,880		9
Commercial mortgage nonowner-occupied loans			6,072		5		6		11		6,083		6
Commercial construction loans			5,089		1		-		1		5,090		-
Commercial leases			3,338		11		14		25		3,363		-
Total portfolio commercial loans and leases	$		69,657		154		147		301		69,958		26

(a)	Includes accrual and nonaccrual loans and leases.

Age Analysis of Past Due Consumer Loans

The following tables summarize the Bancorp’s amortized cost basis in portfolio consumer loans, by age and class:


		Current	Past Due					90 Days Past
		Loans and		30-89	90 Days	Total	Total Loans	Due and Still
As of December 31, 2019 ($ in millions)		Leases (b)(c)		Days (c)	or More (c)	Past Due	and Leases	Accruing
Residential mortgage loans (a)		16,372		27	142	169	16,541	50
Consumer loans:
Home equity		5,965		61	57	118	6,083	1
Indirect secured consumer loans		11,389		132	17	149	11,538	10
Credit card		2,434		50	48	98	2,532	42
Other consumer loans		2,702		18	3	21	2,723	1
Total portfolio consumer loans (a)	$	38,862		288	267	555	39,417	104

(a)	Excludes $183 of residential mortgage loans measured at fair value at December 31, 2019.

(b)

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, 2019, $94 of these loans were

30-89

days past due and $261 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.

(c)	Includes accrual and nonaccrua l loans and leases.

Summary of the amortized cost basis of the Bancorp's collateral dependent loans

The following table presents the amortized cost basis of the Bancorp’s collateral dependent loans, by portfolio class:


As of March 31, 2020 ($ in millions)		Amortized Cost Basis
Commercial loans and leases:
Commercial and industrial loans	$		392
Commercial mortgage owner-occupied loans			43
Commercial mortgage nonowner-occupied loans			88
Commercial construction loans			1
Commercial leases			19
Total commercial loans and leases			543
Residential mortgage loans			112
Consumer loans:
Home equity			54
Other consumer loans			1
Total consumer loans			55
Total loans and leases	$		710

Summary of the Bancorp's Nonperforming Loans and Leases by Class

The following table presents the amortized cost basis of the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property:


As of March 31, 2020 ($ in millions)								For the three months ended March 31, 2020
		With an ALLL		No Related ALLL		Total		Interest Income Recognized
Commercial loans and leases:
Commercial and industrial loans	$		225		108		333		1
Commercial mortgage owner-occupied loans			17		15		32		-
Commercial mortgage nonowner-occupied loans			60		-		60		-
Commercial construction loans			1		-		1		-
Commercial leases			17		2		19		1
Total nonaccrual portfolio commercial loans and leases			320		125		445		2
Residential mortgage loans			28		45		73		8
Consumer loans:
Home equity			73		17		90		3
Indirect secured consumer loans			8		-		8		-
Credit card			29		-		29		1
Other consumer loans			2		-		2		-
Total nonaccrual portfolio consumer loans			112		17		129		4
Total nonaccrual portfolio loans and leases (a)(b)	$		460		187		647		14
OREO and other repossessed property			-		62		62		-
Total nonperforming portfolio assets (a)(b)	$		460		249		709		14

(a)	Excludes $1 of nonaccrual loans and leases held for sale.

(b)	Includes $21 of nonaccrual government insured commercial loans whose repayments are insured by the SBA of which $12 are restructured nonaccrual government insured commercial loans.

The following table presents the Bancorp’s nonaccrual loans and leases, by class, and OREO and other repossessed property as of:


($ in millions)	December 31, 2019
Commercial loans and leases:
Commercial and industrial loans	$	338
Commercial mortgage owner-occupied loans		29
Commercial mortgage nonowner-occupied loans		1
Commercial construction loans		1
Commercial leases		28
Total nonaccrual portfolio commercial loans and leases		397
Residential mortgage loans		91
Consumer loans:
Home equity		94
Indirect secured consumer loans		7
Credit card		27
Other consumer loans		2
Total nonaccrual portfolio consumer loans		130
Total nonaccrual portfolio loans and leases (a)(b)	$	618
OREO and other repossessed property		62
Total nonperforming portfolio assets (a)(b)	$	680

(a)	Excludes $7 of nonaccrual loans and leases held for sale.

(b)	Includes $16 of nona ccrual government insured commercial loans whose repayments are insured by the SBA of which $11 are restructured nonaccrual government insured commercial loans.

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:


March 31, 2020 ($ in millions) (a)	Number of Loans Modified in a TDR During the Period (b)		Amortized Cost Basis of Loans Modified in a TDR During the Period		Increase (Decrease) to ALLL Upon Modification		Charge-offs Recognized Upon Modification
Commercial loans:
Commercial and industrial loans		30		$ 69		10		-
Commercial mortgage owner-occupied loans		11		7		-		-
Commercial mortgage nonowner-occupied loans		3		8		-		-
Commercial construction		1		-		-		-
Residential mortgage loans		184		24		-		-
Consumer loans:
Home equity		21		2		(1)		-
Indirect secured consumer loans		22		-		-		-
Credit card		1,884		10		4		-
Total portfolio loans		2,156		$ 120		13		-

(a)	Excludes all loans and leases held for sale.

(b)	Represents number of loans post-modification and excludes loans previously modified in a TDR.


March 31, 2019 ($ in millions) (a)	Number of Loans Modified in a TDR During the Period (b)		Recorded Investment in Loans Modified in a TDR During the Period		(Decrease) Increase to ALLL Upon Modification		Charge-offs Recognized Upon 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

(a)	Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.

(b)	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, 2020 and 2019 and were within 12 months of the restructuring date:


March 31, 2020 ($ in millions) (a)	Number of Contracts			Amortized Cost
Commercial loans:
Commercial mortgage owner-occupied loans		2	$		1
Commercial mortgage nonowner-occupied loans		1			5
Residential mortgage loans		47			6
Consumer loans:
Home equity		1			-
Indirect secured consumer loans		3			-
Credit card		201			1
Total portfolio loans		255	$		13

(a)	Excludes all loans and leases held for sale and loans acquired with deteriorated credit quality which were accounted for within a pool.


March 31, 2019 ($ in millions) (a)	Number of Contracts			Recorded 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 which were accounted for within a pool.

COVID-19 Hardship Relief Programs

Receivables [Line Items]

Summary of Portfolio Loans, by Class, that Received Payment Deferrals or Forbearances

The following table provides a summary of

port

olio

loans, by class, that received payment deferrals or forbearances as part of the Bancorp’s

COVID-19

pandemic hardship relief programs during the three months ended:


	Number of Loans		Principal Balance of Loans		Balances of Accounts that were Past Due Prior to Placement into Programs
March 31, 2020 ($ in millions)	Placed into Programs		Placed into Programs		30-89 Days		90 Days or More
Commercial loans:
Commercial and industrial loans		402	$	40		-		-
Commercial mortgage owner-occupied loans		1		-		-		-
Commercial mortgage nonowner-occupied loans		69		32		-		-
Residential mortgage loans		1,592		361		32		35
Consumer loans:
Home equity		240		22		-		-
Indirect secured consumer loans		5,384		114		-		-
Credit card		4,673		28		3		1
Other consumer loans		2,353		30		1		-
Total portfolio loans		14,714	$	627		36		36