Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2014

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, 2014					December 31, 2013
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	68,556		28.8	%	$	64,762		27.5	%
Lease financing		5,145		2.1			5,271		2.3
Total commercial		73,701		30.9			70,033		29.8
Commercial Real Estate
Commercial mortgages		31,878		13.4			32,183		13.7
Construction and development		8,253		3.4			7,702		3.3
Total commercial real estate		40,131		16.8			39,885		17.0
Residential Mortgages
Residential mortgages		38,316		16.1			37,545		15.9
Home equity loans, first liens		13,392		5.6			13,611		5.8
Total residential mortgages		51,708		21.7			51,156		21.7
Credit Card		17,129		7.2			18,021		7.7
Other Retail
Retail leasing		6,009		2.5			5,929		2.5
Home equity and second mortgages		15,261		6.4			15,442		6.6
Revolving credit		3,187		1.3			3,276		1.4
Installment		5,751		2.4			5,709		2.4
Automobile		13,933		5.9			13,743		5.8
Student		3,466		1.5			3,579		1.5
Total other retail		47,607		20.0			47,678		20.2
Total loans, excluding covered loans		230,276		96.6			226,773		96.4
Covered Loans		8,099		3.4			8,462		3.6
Total loans	$	238,375		100.0	%	$	235,235		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)	2014			2013
Balance at beginning of period	$	1,655		$	1,709
Accretion		(111	)		(136	)
Disposals		(40	)		(38	)
Reclassifications from nonaccretable difference (a)		81			10
Other (b)		(1	)		376
Balance at end of period	$	1,584		$	1,921

(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 presented as a separate component within the covered assets table on page 52 beginning in 2013), 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, 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
Other changes (a)		–			–			–			–			–			–			5			5
Balance at March 31, 2013	$	1,012		$	798		$	926		$	895		$	854		$	4,485		$	223		$	4,708
Balance at December 31, 2013	$	1,075		$	776		$	875		$	884		$	781		$	4,391		$	146		$	4,537
Add
Provision for credit losses		52			(37	)		44			170			80			309			(3	)		306
Deduct
Loans charged off		63			8			61			184			100			416			6			422
Less recoveries of loans charged off		(27	)		(11	)		(4	)		(14	)		(24	)		(80	)		(1	)		(81	)
Net loans charged off		36			(3	)		57			170			76			336			5			341
Other changes (a)		–			–			–			–			–			–			(5	)		(5	)
Balance at March 31, 2014	$	1,091		$	742		$	862		$	884		$	785		$	4,364		$	133		$	4,497

(a) Includes net changes in credit losses to be reimbursed by the FDIC and 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 March 31, 2014 Related to
Loans individually evaluated for impairment (a)	$	19	$	12	$	–	$	–	$	–	$	31	$	–	$	31
TDRs collectively evaluated for impairment		15		20		333		77		51		496		4		500
Other loans collectively evaluated for impairment		1,057		674		529		807		734		3,801		1		3,802
Loans acquired with deteriorated credit quality		–		36		–		–		–		36		128		164
Total allowance for credit losses	$	1,091	$	742	$	862	$	884	$	785	$	4,364	$	133	$	4,497
Allowance Balance at December 31, 2013 Related to
Loans individually evaluated for impairment (a)	$	15	$	17	$	–	$	–	$	–	$	32	$	–	$	32
TDRs collectively evaluated for impairment		19		26		329		87		55		516		4		520
Other loans collectively evaluated for impairment		1,041		700		546		797		726		3,810		5		3,815
Loans acquired with deteriorated credit quality		–		33		–		–		–		33		137		170
Total allowance for credit losses	$	1,075	$	776	$	875	$	884	$	781	$	4,391	$	146	$	4,537

(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, 2014
Loans individually evaluated for impairment (a)	$	282	$	214	$	–	$	–	$	–	$	496	$	82	$	578
TDRs collectively evaluated for impairment		136		327		5,142		289		263		6,157		92		6,249
Other loans collectively evaluated for impairment		73,281		39,452		46,565		16,840		47,344		223,482		4,288		227,770
Loans acquired with deteriorated credit quality		2		138		1		–		–		141		3,637		3,778
Total loans	$	73,701	$	40,131	$	51,708	$	17,129	$	47,607	$	230,276	$	8,099	$	238,375
December 31, 2013
Loans individually evaluated for impairment (a)	$	197	$	237	$	–	$	–	$	–	$	434	$	62	$	496
TDRs collectively evaluated for impairment		155		358		5,064		310		269		6,156		87		6,243
Other loans collectively evaluated for impairment		69,680		39,129		46,090		17,711		47,409		220,019		4,538		224,557
Loans acquired with deteriorated credit quality		1		161		2		–		–		164		3,775		3,939
Total loans	$	70,033	$	39,885	$	51,156	$	18,021	$	47,678	$	226,773	$	8,462	$	235,235

(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
March 31, 2014
Commercial	$	73,257	$	210	$	46	$	188	$	73,701
Commercial real estate		39,780		58		24		269		40,131
Residential mortgages (a)		50,294		306		331		777		51,708
Credit card		16,653		203		208		65		17,129
Other retail		47,131		202		86		188		47,607
Total loans, excluding covered loans		227,115		979		695		1,487		230,276
Covered loans		7,339		156		472		132		8,099
Total loans	$	234,454	$	1,135	$	1,167	$	1,619	$	238,375
December 31, 2013
Commercial	$	69,587	$	257	$	55	$	134	$	70,033
Commercial real estate		39,459		94		29		303		39,885
Residential mortgages (a)		49,695		358		333		770		51,156
Credit card		17,507		226		210		78		18,021
Other retail		47,156		245		86		191		47,678
Total loans, excluding covered loans		223,404		1,180		713		1,476		226,773
Covered loans		7,693		166		476		127		8,462
Total loans	$	231,097	$	1,346	$	1,189	$	1,603	$	235,235

(a) At March 31, 2014, $417 million of loans 30–89 days past due and $3.6 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 $440 million and $3.7 billion at December 31, 2013, 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, 2014
Commercial	$	71,544	$	1,111	$	1,046	$	2,157	$	73,701
Commercial real estate		38,520		538		1,073		1,611		40,131
Residential mortgages (b)		50,521		4		1,183		1,187		51,708
Credit card		16,856		–		273		273		17,129
Other retail		47,228		24		355		379		47,607
Total loans, excluding covered loans		224,669		1,677		3,930		5,607		230,276
Covered loans		7,812		6		281		287		8,099
Total loans	$	232,481	$	1,683	$	4,211	$	5,894	$	238,375
Total outstanding commitments	$	476,506	$	2,871	$	5,086	$	7,957	$	484,463
December 31, 2013
Commercial	$	68,075	$	1,013	$	945	$	1,958	$	70,033
Commercial real estate		38,113		616		1,156		1,772		39,885
Residential mortgages (b)		50,152		5		999		1,004		51,156
Credit card		17,733		–		288		288		18,021
Other retail		47,313		27		338		365		47,678
Total loans, excluding covered loans		221,386		1,661		3,726		5,387		226,773
Covered loans		8,160		18		284		302		8,462
Total loans	$	229,546	$	1,679	$	4,010	$	5,689	$	235,235
Total outstanding commitments	$	470,046	$	2,939	$	4,812	$	7,751	$	477,797

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

(b) At March 31, 2014, $3.6 billion of GNMA loans 90 days or more past due and $2.7 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 $3.7 billion and $2.6 billion at December 31, 2013, 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, 2014
Commercial	$	452	$	879	$	35	$	37
Commercial real estate		628		1,218		39		49
Residential mortgages		2,739		3,645		297		–
Credit card		289		289		77		–
Other retail		385		433		55		4
Total impaired loans, excluding GNMA and covered loans		4,493		6,464		503		90
Loans purchased from GNMA mortgage pools		2,716		2,716		40		–
Covered loans		419		920		22		3
Total	$	7,628	$	10,100	$	565	$	93
December 31, 2013
Commercial	$	382	$	804	$	36	$	54
Commercial real estate		693		1,322		51		40
Residential mortgages		2,767		3,492		308		–
Credit card		310		310		87		–
Other retail		391		593		59		14
Total impaired loans, excluding GNMA and covered loans		4,543		6,521		541		108
Loans purchased from GNMA mortgage pools		2,607		2,607		28		–
Covered loans		452		1,008		30		4
Total	$	7,602	$	10,136	$	599	$	112

(a) Substantially all loans classified as impaired at March 31, 2014 and December 31, 2013, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income

Additional information on impaired loans follows:

	2014				2013
Three Months Ended March 31 (Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	417	$	2	$	391	$	10
Commercial real estate		660		9		1,055		11
Residential mortgages		2,753		35		2,728		34
Credit card		300		3		418		4
Other retail		388		4		443		6
Total impaired loans, excluding GNMA and covered loans		4,518		53		5,035		65
Loans purchased from GNMA mortgage pools		2,662		33		1,844		23
Covered loans		435		5		681		7
Total	$	7,615	$	91	$	7,560	$	95

Loans Modified as TDRs

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

	2014						2013
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		619	$	79	$	77		815	$	34	$	33
Commercial real estate		15		11		8		63		80		78
Residential mortgages		528		70		70		807		110		105
Credit card		6,816		40		40		7,818		48		48
Other retail		787		21		20		1,865		49		49
Total loans, excluding GNMA and covered loans		8,765		221		215		11,368		321		313
Loans purchased from GNMA mortgage pools		2,563		257		246		1,256		177		182
Covered loans		13		9		8		50		53		41
Total loans		11,341	$	487	$	469		12,674	$	551	$	536

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:

	2014				2013
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		145	$	5		168	$	2
Commercial real estate		6		7		19		28
Residential mortgages		148		22		183		31
Credit card		1,461		8		1,986		11
Other retail		185		6		517		28
Total loans, excluding GNMA and covered loans		1,945		48		2,873		100
Loans purchased from GNMA mortgage pools		71		10		3,822		478
Covered loans		8		3		10		3
Total loans		2,024	$	61		6,705	$	581

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, 2014								December 31, 2013
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total
Commercial loans	$	–	$	28	$	–	$	28	$	–	$	32	$	–	$	32
Commercial real estate loans		649		1,450		–		2,099		738		1,494		–		2,232
Residential mortgage loans		2,988		855		–		3,843		3,037		890		–		3,927
Credit card loans		–		5		–		5		–		5		–		5
Other retail loans		–		644		–		644		–		666		–		666
Losses reimbursable by the FDIC (a)		–		–		772		772		–		–		798		798
Unamortized changes in FDIC asset (b)		–		–		708		708		–		–		802		802
Covered loans		3,637		2,982		1,480		8,099		3,775		3,087		1,600		8,462
Foreclosed real estate		–		–		73		73		–		–		97		97
Total covered assets	$	3,637	$	2,982	$	1,553	$	8,172	$	3,775	$	3,087	$	1,697	$	8,559

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

(b) Represents decreases in expected reimbursements 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.