Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2013

Receivables [Abstract]

Composition of Loan Portfolio

The composition of the loan portfolio, disaggregated by class and underlying specific portfolio type, was as follows:

	March 31, 2013					December 31, 2012
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	60,988		27.3	%	$	60,742		27.2	%
Lease financing		5,335		2.4			5,481		2.5
Total commercial		66,323		29.7			66,223		29.7
Commercial Real Estate
Commercial mortgages		31,155		13.9			31,005		13.9
Construction and development		6,245		2.8			5,948		2.6
Total commercial real estate		37,400		16.7			36,953		16.5
Residential Mortgages
Residential mortgages		33,779		15.1			32,648		14.6
Home equity loans, first liens		12,205		5.5			11,370		5.1
Total residential mortgages		45,984		20.6			44,018		19.7
Credit Card		16,229		7.3			17,115		7.7
Other Retail
Retail leasing		5,526		2.5			5,419		2.4
Home equity and second mortgages		16,131		7.2			16,726		7.5
Revolving credit		3,206		1.4			3,332		1.5
Installment		5,450		2.4			5,463		2.4
Automobile		12,474		5.6			12,593		5.6
Student		3,893		1.8			4,179		1.9
Total other retail		46,680		20.9			47,712		21.3
Total loans, excluding covered loans		212,616		95.2			212,021		94.9
Covered Loans		10,735		4.8			11,308		5.1
Total loans	$	223,351		100.0	%	$	223,329		100.0	%

Changes in Accretable Balance for Purchased Impaired Loans

Changes in the accretable balance for purchased impaired loans were as follows:

Three Months Ended March 31 (Dollars in Millions)	2013			2012
Balance at beginning of period	$	1,709		$	2,619
Purchases		—			13
Accretion		(136	)		(115	)
Disposals		(38	)		(42	)
Reclassifications (to)/from nonaccretable difference (a)		10			132
Other (b)		376			(2	)
Balance at end of period	$	1,921		$	2,605

(a) Primarily relates to changes in expected credit performance.

(b) The amount in first quarter 2013 primarily represents the reclassification of unamortized decreases in the FDIC asset (which are now presented as a separate component within the covered assets table on page 49), partially offset by the impact of changes in expectations about retaining covered single-family loans beyond the term of the indemnification agreements.

Activity in Allowance for Credit Losses

Activity in the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
Balance at December 31, 2011	$	1,010		$	1,154		$	927		$	992		$	831		$	4,914		$	100		$	5,014
Add
Provision for credit losses		105			(46	)		112			178			124			473			8			481
Deduct
Loans charged off		113			83			116			201			167			680			1			681
Less recoveries of loans charged off		(27	)		(12	)		(4	)		(32	)		(35	)		(110	)		–			(110	)
Net loans charged off		86			71			112			169			132			570			1			571
Net change for credit losses to be reimbursed by the FDIC		–			–			–			–			–			–			(5	)		(5	)
Balance at March 31, 2012	$	1,029		$	1,037		$	927		$	1,001		$	823		$	4,817		$	102		$	4,919
Balance at December 31, 2012	$	1,051		$	857		$	935		$	863		$	848		$	4,554		$	179		$	4,733
Add
Provision for credit losses		(4	)		(40	)		83			192			132			363			40			403
Deduct
Loans charged off		56			43			100			193			156			548			1			549
Less recoveries of loans charged off		(21	)		(24	)		(8	)		(33	)		(30	)		(116	)		–			(116	)
Net loans charged off		35			19			92			160			126			432			1			433
Net change for credit losses to be reimbursed by the FDIC		–			–			–			–			–			–			5			5
Balance at March 31, 2013	$	1,012		$	798		$	926		$	895		$	854		$	4,485		$	223		$	4,708

Additional Detail of Allowance for Credit Losses and Related Loan Balances by Portfolio Type

Additional detail of the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans, Excluding Covered Loans		Covered Loans		Total Loans
Allowance Balance at March 31, 2013 Related to
Loans individually evaluated for impairment (a)	$	5	$	21	$	–	$	–	$	–	$	26	$	–	$	26
TDRs collectively evaluated for impairment		25		25		407		132		110		699		4		703
Other loans collectively evaluated for impairment		982		741		519		763		744		3,749		22		3,771
Loans acquired with deteriorated credit quality		–		11		–		–		–		11		197		208
Total allowance for credit losses	$	1,012	$	798	$	926	$	895	$	854	$	4,485	$	223	$	4,708
Allowance Balance at December 31, 2012 Related to
Loans individually evaluated for impairment (a)	$	10	$	30	$	–	$	–	$	–	$	40	$	–	$	40
TDRs collectively evaluated for impairment		28		29		446		153		97		753		1		754
Other loans collectively evaluated for impairment		1,013		791		489		710		751		3,754		17		3,771
Loans acquired with deteriorated credit quality		–		7		–		–		–		7		161		168
Total allowance for credit losses	$	1,051	$	857	$	935	$	863	$	848	$	4,554	$	179	$	4,733

(a) Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs.

Additional detail of loan balances by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans, Excluding Covered Loans		Covered Loans (b)		Total Loans
March 31, 2013
Loans individually evaluated for impairment (a)	$	145	$	484	$	–	$	–	$	–	$	629	$	62	$	691
TDRs collectively evaluated for impairment		184		400		4,282		393		310		5,569		102		5,671
Other loans collectively evaluated for impairment		65,991		36,427		41,696		15,836		46,370		206,320		6,119		212,439
Loans acquired with deteriorated credit quality		3		89		6		–		–		98		4,452		4,550
Total loans	$	66,323	$	37,400	$	45,984	$	16,229	$	46,680	$	212,616	$	10,735	$	223,351
December 31, 2012
Loans individually evaluated for impairment (a)	$	171	$	510	$	–	$	–	$	–	$	681	$	48	$	729
TDRs collectively evaluated for impairment		185		391		4,199		442		313		5,530		145		5,675
Other loans collectively evaluated for impairment		65,863		35,952		39,813		16,673		47,399		205,700		5,814		211,514
Loans acquired with deteriorated credit quality		4		100		6		–		–		110		5,301		5,411
Total loans	$	66,223	$	36,953	$	44,018	$	17,115	$	47,712	$	212,021	$	11,308	$	223,329

(a) Represents loans greater than $5 million classified as nonperforming or TDRs.

(b) Includes expected reimbursements from the FDIC under loss sharing agreements.

Summary of Loans by Portfolio Type

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:

	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming		Total
March 31, 2013
Commercial	$	65,995	$	164	$	63	$	101	$	66,323
Commercial real estate		36,801		84		8		507		37,400
Residential mortgages (a)		44,740		322		249		673		45,984
Credit card		15,696		202		204		127		16,229
Other retail		46,128		239		85		228		46,680
Total loans, excluding covered loans		209,360		1,011		609		1,636		212,616
Covered loans		9,776		194		556		209		10,735
Total loans	$	219,136	$	1,205	$	1,165	$	1,845	$	223,351
December 31, 2012
Commercial	$	65,701	$	341	$	58	$	123	$	66,223
Commercial real estate		36,241		158		8		546		36,953
Residential mortgages (a)		42,728		348		281		661		44,018
Credit card		16,525		227		217		146		17,115
Other retail		47,109		290		96		217		47,712
Total loans, excluding covered loans		208,304		1,364		660		1,693		212,021
Covered loans		9,900		359		663		386		11,308
Total loans	$	218,204	$	1,723	$	1,323	$	2,079	$	223,329

(a) At March 31, 2013, $398 million of loans 30 – 89 days past due and $3.4 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, were classified as current, compared with $441 million and $3.2 billion at December 31, 2012, respectively.

Summary of Loans by Portfolio Type and Company's Internal Credit Quality Rating

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:

			Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total
March 31, 2013
Commercial	$	64,167	$	1,005	$	1,151	$	2,156	$	66,323
Commercial real estate		34,832		626		1,942		2,568		37,400
Residential mortgages (b)		44,887		12		1,085		1,097		45,984
Credit card		15,898		–		331		331		16,229
Other retail		46,257		35		388		423		46,680
Total loans, excluding covered loans		206,041		1,678		4,897		6,575		212,616
Covered loans		10,320		61		354		415		10,735
Total loans	$	216,361	$	1,739	$	5,251	$	6,990	$	223,351
Total outstanding commitments	$	442,045	$	3,181	$	6,133	$	9,314	$	451,359
December 31, 2012
Commercial	$	63,906	$	1,114	$	1,203	$	2,317	$	66,223
Commercial real estate		34,096		621		2,236		2,857		36,953
Residential mortgages (b)		42,897		18		1,103		1,121		44,018
Credit card		16,752		–		363		363		17,115
Other retail		47,294		36		382		418		47,712
Total loans, excluding covered loans		204,945		1,789		5,287		7,076		212,021
Covered loans		10,786		61		461		522		11,308
Total loans	$	215,731	$	1,850	$	5,748	$	7,598	$	223,329
Total outstanding commitments	$	442,047	$	3,231	$	6,563	$	9,794	$	451,841

(a) Classified rating on consumer loans primarily based on delinquency status.

(b) At March 31, 2013, $3.4 billion of GNMA loans 90 days or more past due and $2.4 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs were classified with a pass rating, compared with $3.2 billion and $2.4 billion at December 31, 2012, respectively.

Summary of Impaired Loans by Portfolio Class

A summary of impaired loans by portfolio class was as follows:

(Dollars in Millions)	Period-end Recorded Investment (a)		Unpaid Principal Balance		Valuation Allowance		Commitments to Lend Additional Funds
March 31, 2013
Commercial	$	377	$	1,108	$	32	$	34
Commercial real estate		1,033		2,015		56		11
Residential mortgages		2,708		3,344		385		–
Credit card		393		393		132		–
Other retail		443		512		114		3
Total impaired loans, excluding GNMA and covered loans		4,954		7,372		719		48
Loans purchased from GNMA mortgage pools		1,909		1,909		32		–
Covered loans		594		1,447		23		9
Total	$	7,457	$	10,728	$	774	$	57
December 31, 2012
Commercial	$	404	$	1,200	$	40	$	39
Commercial real estate		1,077		2,251		70		4
Residential mortgages		2,748		3,341		415		–
Credit card		442		442		153		–
Other retail		443		486		101		3
Total impaired loans, excluding GNMA and covered loans		5,114		7,720		779		46
Loans purchased from GNMA mortgage pools		1,778		1,778		39		–
Covered loans		767		1,584		20		12
Total	$	7,659	$	11,082	$	838	$	58

(a) Substantially all loans classified as impaired at March 31, 2013 and December 31, 2012, had an associated allowance for credit losses.

Additional Information on Impaired Loans

Additional information on impaired loans follows:

	2013				2012
Three Months Ended March 31 (Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	391	$	10	$	569	$	3
Commercial real estate		1,055		11		1,524		7
Residential mortgages		2,728		34		2,638		26
Credit card		418		4		548		8
Other retail		443		6		180		2
Total impaired loans, excluding GNMA and covered loans		5,035		65		5,459		46
Loans purchased from GNMA mortgage pools		1,844		23		1,277		15
Covered loans		681		7		1,178		2
Total	$	7,560	$	95	$	7,914	$	63

Loans Modified as TDRs

The following table provides a summary of loans modified as TDRs during the periods presented, by portfolio class:

	2013						2012
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance		Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Commercial		815	$	34	$	33		1,279	$	91	$	72
Commercial real estate		63		80		78		111		204		197
Residential mortgages		807		110		105		621		111		107
Credit card		7,818		48		48		14,218		80		80
Other retail		1,865		49		49		988		15		15
Total loans, excluding GNMA and covered loans		11,368		321		313		17,217		501		471
Loans purchased from GNMA mortgage pools		1,256		177		182		1,400		179		187
Covered loans		50		53		41		43		140		137
Total loans		12,674	$	551	$	536		18,660	$	820	$	795

Loans Modified as TDRs have Subsequently been Fully or Partially Charged-Off

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) during the periods presented that were modified as TDRs within 12 months previous to default:

	2013				2012
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		168	$	2		241	$	21
Commercial real estate		19		28		54		92
Residential mortgages		183		31		64		12
Credit card		1,986		11		2,526		15
Other retail		517		28		184		3
Total loans, excluding GNMA and covered loans		2,873		100		3,069		143
Loans purchased from GNMA mortgage pools		3,822		478		221		33
Covered loans		10		3		34		60
Total loans		6,705	$	581		3,324	$	236

Carrying Amount of Covered Assets

The carrying amount of the covered assets consisted of purchased impaired loans, purchased nonimpaired loans and other assets as shown in the following table:

	March 31, 2013								December 31, 2012
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total
Commercial loans	$	–	$	126	$	–	$	126	$	–	$	143	$	–	$	143
Commercial real estate loans		1,214		2,206		–		3,420		1,323		2,695		–		4,018
Residential mortgage loans		3,238		1,055		–		4,293		3,978		1,109		–		5,087
Credit card loans		–		5		–		5		–		5		–		5
Other retail loans		–		744		–		744		–		775		–		775
Losses reimbursable by the FDIC (a)		–		–		1,298		1,298		–		–		1,280		1,280
Unamortized changes in FDIC asset (b)		–		–		849		849		–		–		–		–
Covered loans		4,452		4,136		2,147		10,735		5,301		4,727		1,280		11,308
Foreclosed real estate		–		–		168		168		–		–		197		197
Total covered assets	$	4,452	$	4,136	$	2,315	$	10,903	$	5,301	$	4,727	$	1,477	$	11,505

(a) Relates to loss sharing agreements with remaining terms from 2 to 7 years.

(b) Represents decreases in losses expected to be reimbursed by the FDIC as a result of decreases in expected losses on the covered loans. These amounts are amortized as a reduction in interest income on covered loans over the shorter of the expected life of the respective covered loans or the remaining contractual term of the indemnification agreements. These amounts were presented within the separate loan categories prior to January 1, 2013.