Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2013

Receivables [Abstract]

Composition of Loan Portfolio

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

	June 30, 2013					December 31, 2012
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	62,910		27.6	%	$	60,742		27.2	%
Lease financing		5,275		2.3			5,481		2.5
Total commercial		68,185		29.9			66,223		29.7
Commercial Real Estate
Commercial mortgages		31,630		13.9			31,005		13.9
Construction and development		6,668		2.9			5,948		2.6
Total commercial real estate		38,298		16.8			36,953		16.5
Residential Mortgages
Residential mortgages		34,651		15.2			32,648		14.6
Home equity loans, first liens		13,102		5.7			11,370		5.1
Total residential mortgages		47,753		20.9			44,018		19.7
Credit Card		16,649		7.3			17,115		7.7
Other Retail
Retail leasing		5,802		2.6			5,419		2.4
Home equity and second mortgages		15,816		6.9			16,726		7.5
Revolving credit		3,260		1.4			3,332		1.5
Installment		5,635		2.5			5,463		2.4
Automobile		12,807		5.6			12,593		5.6
Student		3,785		1.7			4,179		1.9
Total other retail		47,105		20.7			47,712		21.3
Total loans, excluding covered loans		217,990		95.6			212,021		94.9
Covered Loans		9,985		4.4			11,308		5.1
Total loans	$	227,975		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 June 30,						Six Months Ended June 30,
(Dollars in Millions)	2013			2012			2013			2012
Balance at beginning of period	$	1,921		$	2,605		$	1,709		$	2,619
Purchases		–			–			–			13
Accretion		(125	)		(113	)		(261	)		(228	)
Disposals		(31	)		(56	)		(69	)		(98	)
Reclassifications (to)/from nonaccretable difference (a)		48			1			58			133
Other (b)		(11	)		(6	)		365			(8	)
Balance at end of period	$	1,802		$	2,431		$	1,802		$	2,431

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

(b) The amount for the six months ended June 30, 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 55), 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:

Three Months Ended June 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
2013
Balance at beginning of period	$	1,012		$	798		$	926		$	895		$	854		$	4,485		$	223		$	4,708
Add
Provision for credit losses		49			(38	)		69			152			89			321			41			362
Deduct
Loans charged off		63			16			81			191			134			485			21			506
Less recoveries of loans charged off		(25	)		(33	)		(7	)		(18	)		(29	)		(112	)		(2	)		(114	)
Net loans charged off		38			(17	)		74			173			105			373			19			392
Other changes (a)		—			—			—			—			—			—			(66	)		(66	)
Balance at end of period	$	1,023		$	777		$	921		$	874		$	838		$	4,433		$	179		$	4,612
2012
Balance at beginning of period	$	1,029		$	1,037		$	927		$	1,001		$	823		$	4,817		$	102		$	4,919
Add
Provision for credit losses		79			(43	)		121			165			122			444			26			470
Deduct
Loans charged off		93			76			114			198			149			630			1			631
Less recoveries of loans charged off		(22	)		(23	)		(5	)		(28	)		(32	)		(110	)		(1	)		(111	)
Net loans charged off		71			53			109			170			117			520			–			520
Other changes (a)		–			–			–			–			–			–			(5	)		(5	)
Balance at end of period	$	1,037		$	941		$	939		$	996		$	828		$	4,741		$	123		$	4,864

(a) Represents net changes in credit losses to be reimbursed by the FDIC and for the three months ended June 30, 2013, reductions in the allowance for covered loans where the reversal of a previously recorded allowance was offset by an associated decrease in the indemnification asset.

Six Months Ended June 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
2013
Balance at beginning of period	$	1,051		$	857		$	935		$	863		$	848		$	4,554		$	179		$	4,733
Add
Provision for credit losses		45			(78	)		152			344			221			684			81			765
Deduct
Loans charged off		119			59			181			384			290			1,033			22			1,055
Less recoveries of loans charged off		(46	)		(57	)		(15	)		(51	)		(59	)		(228	)		(2	)		(230	)
Net loans charged off		73			2			166			333			231			805			20			825
Other changes (a)		—			—			—			—			—			—			(61	)		(61	)
Balance at end of period	$	1,023		$	777		$	921		$	874		$	838		$	4,433		$	179		$	4,612
2012
Balance at beginning of period	$	1,010		$	1,154		$	927		$	992		$	831		$	4,914		$	100		$	5,014
Add
Provision for credit losses		184			(89	)		233			343			246			917			34			951
Deduct
Loans charged off		206			159			230			399			316			1,310			2			1,312
Less recoveries of loans charged off		(49	)		(35	)		(9	)		(60	)		(67	)		(220	)		(1	)		(221	)
Net loans charged off		157			124			221			339			249			1,090			1			1,091
Other changes (a)		–			–			–			–			–			–			(10	)		(10	)
Balance at end of period	$	1,037		$	941		$	939		$	996		$	828		$	4,741		$	123		$	4,864

(a) Represents net changes in credit losses to be reimbursed by the FDIC and for the six months ended June 30, 2013, reductions in the allowance for covered loans where the reversal of a previously recorded allowance was offset by an associated decrease in the indemnification asset.

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 June 30, 2013 Related to
Loans individually evaluated for impairment (a)	$	8	$	14	$	–	$	–	$	–	$	22	$	–	$	22
TDRs collectively evaluated for impairment		24		23		398		114		101		660		5		665
Other loans collectively evaluated for impairment		991		729		523		760		737		3,740		8		3,748
Loans acquired with deteriorated credit quality		–		11		–		–		–		11		166		177
Total allowance for credit losses	$	1,023	$	777	$	921	$	874	$	838	$	4,433	$	179	$	4,612
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
June 30, 2013
Loans individually evaluated for impairment (a)	$	155	$	413	$	–	$	–	$	–	$	568	$	37	$	605
TDRs collectively evaluated for impairment		186		376		4,317		358		291		5,528		109		5,637
Other loans collectively evaluated for impairment		67,841		37,424		43,431		16,291		46,814		211,801		5,540		217,341
Loans acquired with deteriorated credit quality		3		85		5		–		–		93		4,299		4,392
Total loans	$	68,185	$	38,298	$	47,753	$	16,649	$	47,105	$	217,990	$	9,985	$	227,975
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 and Delinquency Status

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
June 30, 2013
Commercial	$	67,836	$	184	$	60	$	105	$	68,185
Commercial real estate		37,775		89		10		424		38,298
Residential mortgages (a)		46,446		371		251		685		47,753
Credit card		16,163		194		183		109		16,649
Other retail		46,564		243		76		222		47,105
Total loans, excluding covered loans		214,784		1,081		580		1,545		217,990
Covered loans		9,097		181		539		168		9,985
Total loans	$	223,881	$	1,262	$	1,119	$	1,713	$	227,975
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 June 30, 2013, $411 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
June 30, 2013
Commercial	$	66,109	$	1,046	$	1,030	$	2,076	$	68,185
Commercial real estate		36,030		562		1,706		2,268		38,298
Residential mortgages (b)		46,674		15		1,064		1,079		47,753
Credit card		16,356		–		293		293		16,649
Other retail		46,696		35		374		409		47,105
Total loans, excluding covered loans		211,865		1,658		4,467		6,125		217,990
Covered loans		9,619		42		324		366		9,985
Total loans	$	221,484	$	1,700	$	4,791	$	6,491	$	227,975
Total outstanding commitments	$	451,299	$	2,939	$	5,434	$	8,373	$	459,672
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 June 30, 2013, $3.4 billion of GNMA loans 90 days or more past due and $1.9 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
June 30, 2013
Commercial	$	384	$	1,030	$	41	$	24
Commercial real estate		918		1,832		46		10
Residential mortgages		2,769		3,424		374		3
Credit card		358		358		114		–
Other retail		427		461		106		4
Total impaired loans, excluding GNMA and covered loans		4,856		7,105		681		41
Loans purchased from GNMA mortgage pools		1,851		1,851		32		–
Covered loans		534		1.183		25		8
Total	$	7,241	$	10,139	$	738	$	49
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 June 30, 2013 and December 31, 2012, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income

Additional information on impaired loans follows:

	2013				2012
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three months ended June 30
Commercial	$	381	$	9	$	506	$	2
Commercial real estate		975		10		1,338		10
Residential mortgages		2,738		33		2,687		30
Credit card		376		5		543		8
Other retail		435		6		244		2
Total impaired loans, excluding GNMA and covered loans		4,905		63		5,318		52
Loans purchased from GNMA mortgage pools		1,880		23		1,320		16
Covered loans		564		8		1,065		11
Total	$	7,349	$	94	$	7,703	$	79
Six months ended June 30
Commercial	$	386	$	19	$	538	$	5
Commercial real estate		1,015		21		1,431		17
Residential mortgages		2,733		67		2,663		56
Credit card		397		9		546		16
Other retail		439		12		212		4
Total impaired loans, excluding GNMA and covered loans		4,970		128		5,390		98
Loans purchased from GNMA mortgage pools		1,862		46		1,299		31
Covered loans		623		15		1,121		13
Total	$	7,455	$	189	$	7,810	$	142

Loans Modified as TDRs

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

	2013						2012
(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
Three months ended June 30
Commercial		596	$	54	$	47		1,048	$	70	$	65
Commercial real estate		36		37		35		71		121		113
Residential mortgages		430		62		63		450		74		74
Credit card		5,882		35		36		10,685		57		56
Other retail		807		16		15		809		20		20
Total loans, excluding GNMA and covered loans		7,751		204		196		13,063		342		328
Loans purchased from GNMA mortgage pools		2,879		345		316		2,177		277		311
Covered loans		21		13		12		50		57		51
Total loans		10,651	$	562	$	524		15,290	$	676	$	690
Six months ended June 30
Commercial		1,411	$	88	$	80		2,327	$	161	$	137
Commercial real estate		99		117		113		182		325		310
Residential mortgages		1,237		172		168		1,071		185		181
Credit card		13,700		83		84		24,903		137		136
Other retail		2,672		65		64		1,797		35		35
Total loans, excluding GNMA and covered loans		19,119		525		509		30,280		843		799
Loans purchased from GNMA mortgage pools		4,135		522		498		3,577		456		498
Covered loans		71		66		53		93		197		188
Total loans		23,325	$	1,113	$	1,060		33,950	$	1,496	$	1,485

Schedule of Loans Modified as TDRs that have Subsequently been Fully or Partially Charged-Off or Became 90 Days or More Past Due

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
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three months ended June 30
Commercial		172	$	3		216	$	10
Commercial real estate		23		44		29		72
Residential mortgages		187		28		247		22
Credit card		1,638		10		2,390		13
Other retail		369		15		158		1
Total loans, excluding GNMA and covered loans		2,389		100		3,040		118
Loans purchased from GNMA mortgage pools		481		68		262		39
Covered loans		15		9		7		27
Total loans		2,885	$	177		3,309	$	184
Six months ended June 30
Commercial		340	$	5		457	$	31
Commercial real estate		42		72		83		164
Residential mortgages		370		59		311		34
Credit card		3,624		21		4,916		28
Other retail		886		43		342		4
Total loans, excluding GNMA and covered loans		5,262		200		6,109		261
Loans purchased from GNMA mortgage pools		4,303		546		483		72
Covered loans		25		12		41		87
Total loans		9,590	$	758		6,633	$	420

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:

	June 30, 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	$	–	$	124	$	–	$	124	$	–	$	143	$	–	$	143
Commercial real estate loans		1,095		1,915		–		3,010		1,323		2,695		–		4,018
Residential mortgage loans		3,204		995		–		4,199		3,978		1,109		–		5,087
Credit card loans		–		5		–		5		–		5		–		5
Other retail loans		–		718		–		718		–		775		–		775
Losses reimbursable by the FDIC (a)		–		–		1,185		1,185		–		–		1,280		1,280
Unamortized changes in FDIC asset (b)		–		–		744		744		–		–		–		–
Covered loans		4,299		3,757		1,929		9,985		5,301		4,727		1,280		11,308
Foreclosed real estate		–		–		187		187		–		–		197		197
Total covered assets	$	4,299	$	3,757	$	2,116	$	10,172	$	5,301	$	4,727	$	1,477	$	11,505

(a) Relates to loss sharing agreements with remaining terms up to six 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.