Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2014

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, 2014					December 31, 2013
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	72,286		29.7	%	$	64,762		27.5	%
Lease financing		5,168		2.1			5,271		2.3
Total commercial		77,454		31.8			70,033		29.8
Commercial Real Estate
Commercial mortgages		32,125		13.2			32,183		13.7
Construction and development		8,672		3.5			7,702		3.3
Total commercial real estate		40,797		16.7			39,885		17.0
Residential Mortgages
Residential mortgages		38,747		15.9			37,545		15.9
Home equity loans, first liens		13,218		5.4			13,611		5.8
Total residential mortgages		51,965		21.3			51,156		21.7
Credit Card		17,642		7.2			18,021		7.7
Other Retail
Retail leasing		6,001		2.5			5,929		2.5
Home equity and second mortgages		15,668		6.4			15,442		6.6
Revolving credit		3,216		1.3			3,276		1.4
Installment		5,978		2.4			5,709		2.4
Automobile		14,353		5.9			13,743		5.8
Student		3,352		1.4			3,579		1.5
Total other retail		48,568		19.9			47,678		20.2
Total loans, excluding covered loans		236,426		96.9			226,773		96.4
Covered Loans		7,448		3.1			8,462		3.6
Total loans	$	243,874		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 June 30,						Six Months Ended June 30,
(Dollars in Millions)	2014			2013			2014			2013
Balance at beginning of period	$	1,584		$	1,921		$	1,655		$	1,709
Accretion		(120	)		(125	)		(231	)		(261	)
Disposals		(29	)		(31	)		(69	)		(69	)
Reclassifications from nonaccretable difference (a)		53			48			134			58
Other (b)		(1	)		(11	)		(2	)		365
Balance at end of period	$	1,487		$	1,802		$	1,487		$	1,802

(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 presented as a separate component within the covered assets table on page 55 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:

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
2014
Balance at beginning of period	$	1,091		$	742		$	862		$	884		$	785		$	4,364		$	133		$	4,497
Add
Provision for credit losses		75			(21	)		43			163			63			323			1			324
Deduct
Loans charged off		76			9			62			188			95			430			2			432
Less recoveries of loans charged off		(21	)		(13	)		(5	)		(18	)		(26	)		(83	)		–			(83	)
Net loans charged off		55			(4	)		57			170			69			347			2			349
Other changes (a)		–			–			–			(3	)		–			(3	)		(20	)		(23	)
Balance at end of period	$	1,111		$	725		$	848		$	874		$	779		$	4,337		$	112		$	4,449
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

(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, and the impact of any loan sales.

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
2014
Balance at beginning of period	$	1,075		$	776		$	875		$	884		$	781		$	4,391		$	146		$	4,537
Add
Provision for credit losses		127			(58	)		87			333			143			632			(2	)		630
Deduct
Loans charged off		139			17			123			372			195			846			8			854
Less recoveries of loans charged off		(48	)		(24	)		(9	)		(32	)		(50	)		(163	)		(1	)		(164	)
Net loans charged off		91			(7	)		114			340			145			683			7			690
Other changes (a)		–			–			–			(3	)		–			(3	)		(25	)		(28	)
Balance at end of period	$	1,111		$	725		$	848		$	874		$	779		$	4,337		$	112		$	4,449
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

(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, and the impact of any loan sales.

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, 2014 Related to
Loans individually evaluated for impairment (a)	$	19	$	7	$	–	$	–	$	–	$	26	$	–	$	26
TDRs collectively evaluated for impairment		15		17		326		69		52		479		3		482
Other loans collectively evaluated for impairment		1,077		669		522		805		727		3,800		4		3,804
Loans acquired with deteriorated credit quality		–		32		–		–		–		32		105		137
Total allowance for credit losses	$	1,111	$	725	$	848	$	874	$	779	$	4,337	$	112	$	4,449
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
June 30, 2014
Loans individually evaluated for impairment (a)	$	273	$	159	$	–	$	–	$	–	$	432	$	70	$	502
TDRs collectively evaluated for impairment		133		301		5,260		272		252		6,218		82		6,300
Other loans collectively evaluated for impairment		77,047		40,206		46,704		17,370		48,316		229,643		3,833		233,476
Loans acquired with deteriorated credit quality		1		131		1		–		–		133		3,463		3,596
Total loans	$	77,454	$	40,797	$	51,965	$	17,642	$	48,568	$	236,426	$	7,448	$	243,874
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
June 30, 2014
Commercial	$	77,018	$	202	$	44	$	190	$	77,454
Commercial real estate		40,489		56		26		226		40,797
Residential mortgages (a)		50,643		251		253		818		51,965
Credit card		17,204		199		187		52		17,642
Other retail		48,093		213		71		191		48,568
Total loans, excluding covered loans		233,447		921		581		1,477		236,426
Covered loans		6,781		91		457		119		7,448
Total loans	$	240,228	$	1,012	$	1,038	$	1,596	$	243,874
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 June 30, 2014, $407 million of loans 30–89 days past due and $3.1 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
June 30, 2014
Commercial	$	75,426	$	1,044	$	984	$	2,028	$	77,454
Commercial real estate		39,313		547		937		1,484		40,797
Residential mortgages (b)		50,801		7		1,157		1,164		51,965
Credit card		17,403		–		239		239		17,642
Other retail		48,210		18		340		358		48,568
Total loans, excluding covered loans		231,153		1,616		3,657		5,273		236,426
Covered loans		7,210		3		235		238		7,448
Total loans	$	238,363	$	1,619	$	3,892	$	5,511	$	243,874
Total outstanding commitments	$	488,159	$	2,949	$	4,606	$	7,555	$	495,714
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 June 30, 2014, $3.1 billion of GNMA loans 90 days or more past due and $2.8 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
June 30, 2014
Commercial	$	442	$	883	$	36	$	102
Commercial real estate		556		1,113		30		24
Residential mortgages		2,740		3,670		276		–
Credit card		272		272		69		–
Other retail		378		410		56		4
Total impaired loans, excluding GNMA and covered loans		4,388		6,348		467		130
Loans purchased from GNMA mortgage pools		2,816		2,816		54		–
Covered loans		375		810		20		1
Total	$	7,579	$	9,974	$	541	$	131
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 June 30, 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
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended June 30
Commercial	$	447	$	2	$	381	$	9
Commercial real estate		592		4		975		10
Residential mortgages		2,739		37		2,738		33
Credit card		281		3		376		5
Other retail		381		4		435		6
Total impaired loans, excluding GNMA and covered loans		4,440		50		4,905		63
Loans purchased from GNMA mortgage pools		2,766		33		1,880		23
Covered loans		397		5		564		8
Total	$	7,603	$	88	$	7,349	$	94
Six Months Ended June 30
Commercial	$	432	$	4	$	386	$	19
Commercial real estate		626		13		1,015		21
Residential mortgages		2,746		72		2,733		67
Credit card		290		6		397		9
Other retail		385		8		439		12
Total impaired loans, excluding GNMA and covered loans		4,479		103		4,970		128
Loans purchased from GNMA mortgage pools		2,714		66		1,862		46
Covered loans		416		10		623		15
Total	$	7,609	$	179	$	7,455	$	189

Loans Modified as TDRs

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

	2014						2013
(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		566	$	74	$	66		596	$	54	$	47
Commercial real estate		12		8		7		36		37		35
Residential mortgages		679		91		91		430		62		63
Credit card		6,516		36		36		5,882		35		36
Other retail		649		13		14		807		16		15
Total loans, excluding GNMA and covered loans		8,422		222		214		7,751		204		196
Loans purchased from GNMA mortgage pools		2,362		281		279		2,879		345		316
Covered loans		7		2		2		21		13		12
Total loans		10,791	$	505	$	495		10,651	$	562	$	524
Six Months Ended June 30
Commercial		1,185	$	153	$	143		1,411	$	88	$	80
Commercial real estate		27		19		15		99		117		113
Residential mortgages		1,207		161		161		1,237		172		168
Credit card		13,332		76		76		13,700		83		84
Other retail		1,436		34		34		2,672		65		64
Total loans, excluding GNMA and covered loans		17,187		443		429		19,119		525		509
Loans purchased from GNMA mortgage pools		4,925		538		525		4,135		522		498
Covered loans		20		11		10		71		66		53
Total loans		22,132	$	992	$	964		23,325	$	1,113	$	1,060

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
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended June 30
Commercial		150	$	3		172	$	3
Commercial real estate		6		3		23		44
Residential mortgages		129		17		187		28
Credit card		1,460		8		1,638		10
Other retail		158		4		369		15
Total loans, excluding GNMA and covered loans		1,903		35		2,389		100
Loans purchased from GNMA mortgage pools		105		12		481		68
Covered loans		2		1		15		9
Total loans		2,010	$	48		2,885	$	177
Six Months Ended June 30
Commercial		295	$	8		340	$	5
Commercial real estate		12		10		42		72
Residential mortgages		277		39		370		59
Credit card		2,921		16		3,624		21
Other retail		343		10		886		43
Total loans, excluding GNMA and covered loans		3,848		83		5,262		200
Loans purchased from GNMA mortgage pools		176		22		4,303		546
Covered loans		10		4		25		12
Total loans		4,034	$	109		9,590	$	758

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, 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	$	–	$	27	$	–	$	27	$	–	$	32	$	–	$	32
Commercial real estate loans		533		1,206		–		1,739		738		1,494		–		2,232
Residential mortgage loans		2,930		811		–		3,741		3,037		890		–		3,927
Credit card loans		–		5		–		5		–		5		–		5
Other retail loans		–		627		–		627		–		666		–		666
Losses reimbursable by the FDIC (a)		–		–		731		731		–		–		798		798
Unamortized changes in FDIC asset (b)		–		–		578		578		–		–		802		802
Covered loans		3,463		2,676		1,309		7,448		3,775		3,087		1,600		8,462
Foreclosed real estate		–		–		58		58		–		–		97		97
Total covered assets	$	3,463	$	2,676	$	1,367	$	7,506	$	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.