Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 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:

	September 30, 2014					December 31, 2013
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	73,600		30.0	%	$	64,762		27.5	%
Lease financing		5,278		2.1			5,271		2.3
Total commercial		78,878		32.1			70,033		29.8
Commercial Real Estate
Commercial mortgages		31,802		13.0			32,183		13.7
Construction and development		9,107		3.7			7,702		3.3
Total commercial real estate		40,909		16.7			39,885		17.0
Residential Mortgages
Residential mortgages		38,858		15.8			37,545		15.9
Home equity loans, first liens		13,099		5.3			13,611		5.8
Total residential mortgages		51,957		21.1			51,156		21.7
Credit Card		17,858		7.3			18,021		7.7
Other Retail
Retail leasing		5,999		2.5			5,929		2.5
Home equity and second mortgages		15,769		6.4			15,442		6.6
Revolving credit		3,242		1.3			3,276		1.4
Installment		6,173		2.5			5,709		2.4
Automobile		14,517		5.9			13,743		5.8
Student		3,235		1.3			3,579		1.5
Total other retail		48,935		19.9			47,678		20.2
Total loans, excluding covered loans		238,537		97.1			226,773		96.4
Covered Loans		7,054		2.9			8,462		3.6
Total loans	$	245,591		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 September 30,						Nine Months Ended September 30,
(Dollars in Millions)	2014			2013			2014			2013
Balance at beginning of period	$	1,487		$	1,802		$	1,655		$	1,709
Accretion		(105	)		(119	)		(336	)		(380	)
Disposals		(34	)		(51	)		(103	)		(120	)
Reclassifications from nonaccretable difference (a)		38			119			172			177
Other (b)		–			–			(2	)		365
Balance at end of period	$	1,386		$	1,751		$	1,386		$	1,751

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

(b) The amount for the nine months ended September 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 56 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 by Portfolio Type

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

Three Months Ended September 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	$	1,111		$	725		$	848		$	874		$	779		$	4,337		$	112		$	4,449
Add
Provision for credit losses		83			(6	)		(13	)		162			84			310			1			311
Deduct
Loans charged off		80			10			48			174			96			408			2			410
Less recoveries of loans charged off		(22	)		(6	)		(6	)		(16	)		(23	)		(73	)		(1	)		(74	)
Net loans charged off		58			4			42			158			73			335			1			336
Other changes (a)		–			–			–			–			–			–			(10	)		(10	)
Balance at end of period	$	1,136		$	715		$	793		$	878		$	790		$	4,312		$	102		$	4,414
2013
Balance at beginning of period	$	1,023		$	777		$	921		$	874		$	838		$	4,433		$	179		$	4,612
Add
Provision for credit losses		19			(22	)		70			151			84			302			(4	)		298
Deduct
Loans charged off		65			17			62			175			122			441			9			450
Less recoveries of loans charged off		(54	)		(23	)		(5	)		(15	)		(24	)		(121	)		(1	)		(122	)
Net loans charged off		11			(6	)		57			160			98			320			8			328
Other changes (a)		–			–			–			–			–			–			(4	)		(4	)
Balance at end of period	$	1,031		$	761		$	934		$	865		$	824		$	4,415		$	163		$	4,578

(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.

Nine Months Ended September 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 beginnng of period	$	1,075		$	776		$	875		$	884		$	781		$	4,391		$	146		$	4,537
Add
Provision for credit losses		210			(64	)		74			495			227			942			(1	)		941
Deduct
Loans charged off		219			27			171			546			291			1,254			10			1,264
Less recoveries of loans charged off		(70	)		(30	)		(15	)		(48	)		(73	)		(236	)		(2	)		(238	)
Net loans charged off		149			(3	)		156			498			218			1,018			8			1,026
Other changes (a)		–			–			–			(3	)		–			(3	)		(35	)		(38	)
Balance at end of period	$	1,136		$	715		$	793		$	878		$	790		$	4,312		$	102		$	4,414
2013
Balance at beginnng of period	$	1,051		$	857		$	935		$	863		$	848		$	4,554		$	179		$	4,733
Add
Provision for credit losses		64			(100	)		222			495			305			986			77			1,063
Deduct
Loans charged off		184			76			243			559			412			1,474			31			1,505
Less recoveries of loans charged off		(100	)		(80	)		(20	)		(66	)		(83	)		(349	)		(3	)		(352	)
Net loans charged off		84			(4	)		223			493			329			1,125			28			1,153
Other changes (a)		–			–			–			–			–			–			(65	)		(65	)
Balance at end of period	$	1,031		$	761		$	934		$	865		$	824		$	4,415		$	163		$	4,578

(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 September 30, 2014 Related to
Loans individually evaluated for impairment (a)	$	10	$	6	$	–	$	–	$	–	$	16	$	–	$	16
TDRs collectively evaluated for impairment		13		15		308		64		44		444		3		447
Other loans collectively evaluated for impairment		1,113		662		485		814		746		3,820		2		3,822
Loans acquired with deteriorated credit quality		–		32		–		–		–		32		97		129
Total allowance for credit losses	$	1,136	$	715	$	793	$	878	$	790	$	4,312	$	102	$	4,414
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
September 30, 2014
Loans individually evaluated for impairment (a)	$	237	$	158	$	–	$	–	$	–	$	395	$	52	$	447
TDRs collectively evaluated for impairment		129		273		4,916		256		248		5,822		74		5,896
Other loans collectively evaluated for impairment		78,511		40,368		47,041		17,602		48,687		232,209		3,615		235,824
Loans acquired with deteriorated credit quality		1		110		–		–		–		111		3,313		3,424
Total loans	$	78,878	$	40,909	$	51,957	$	17,858	$	48,935	$	238,537	$	7,054	$	245,591
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, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming

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
September 30, 2014
Commercial	$	78,453	$	215	$	37	$	173	$	78,878
Commercial real estate		40,606		50		12		241		40,909
Residential mortgages (a)		50,662		243		211		841		51,957
Credit card		17,403		219		196		40		17,858
Other retail		48,453		222		76		184		48,935
Total loans, excluding covered loans		235,577		949		532		1,479		238,537
Covered loans		6,434		102		430		88		7,054
Total loans	$	242,011	$	1,051	$	962	$	1,567	$	245,591
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 September 30, 2014, $422 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
September 30, 2014
Commercial	$	76,688	$	1,396	$	794	$	2,190	$	78,878
Commercial real estate		39,591		474		844		1,318		40,909
Residential mortgages (b)		50,817		8		1,132		1,140		51,957
Credit card		17,622		–		236		236		17,858
Other retail		48,569		18		348		366		48,935
Total loans, excluding covered loans		233,287		1,896		3,354		5,250		238,537
Covered loans		6,852		3		199		202		7,054
Total loans	$	240,139	$	1,899	$	3,553	$	5,452	$	245,591
Total outstanding commitments	$	494,015	$	2,990	$	4,201	$	7,191	$	501,206
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 September 30, 2014, $3.1 billion of GNMA loans 90 days or more past due and $2.5 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
September 30, 2014
Commercial	$	408	$	848	$	27	$	135
Commercial real estate		525		1,037		30		14
Residential mortgages		2,740		3,678		261		–
Credit card		256		256		64		–
Other retail		368		413		47		4
Total impaired loans, excluding GNMA and covered loans		4,297		6,232		429		153
Loans purchased from GNMA mortgage pools		2,478		2,478		51		–
Covered loans		295		607		20		1
Total	$	7,070	$	9,317	$	500	$	154
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 September 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 September 30
Commercial	$	425	$	4	$	380	$	5
Commercial real estate		541		4		819		6
Residential mortgages		2,740		33		2,765		32
Credit card		264		1		347		3
Other retail		373		5		417		7
Total impaired loans, excluding GNMA and covered loans		4,343		47		4,728		53
Loans purchased from GNMA mortgage pools		2,647		29		1,883		22
Covered loans		335		5		519		6
Total	$	7,325	$	81	$	7,130	$	81
Nine Months Ended September 30
Commercial	$	430	$	8	$	384	$	24
Commercial real estate		598		17		950		27
Residential mortgages		2,744		105		2,744		99
Credit card		281		7		380		12
Other retail		381		13		431		19
Total impaired loans, excluding GNMA and covered loans		4,434		150		4,889		181
Loans purchased from GNMA mortgage pools		2,691		95		1,869		68
Covered loans		389		15		588		21
Total	$	7,514	$	260	$	7,346	$	270

Summary of 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 September 30
Commercial		448	$	28	$	26		551	$	62	$	60
Commercial real estate		27		14		13		48		76		73
Residential mortgages		525		71		70		338		42		42
Credit card		6,708		35		36		6,447		39		38
Other retail		810		18		18		847		21		21
Total loans, excluding GNMA and covered loans		8,518		166		163		8,231		240		234
Loans purchased from GNMA mortgage pools		2,273		278		278		2,315		300		284
Covered loans		18		3		3		38		19		11
Total loans		10,809	$	447	$	444		10,584	$	559	$	529
Nine Months Ended September 30
Commercial		1,633	$	181	$	169		1,962	$	150	$	140
Commercial real estate		54		33		28		147		193		186
Residential mortgages		1,732		232		231		1,575		214		210
Credit card		20,040		111		112		20,147		122		122
Other retail		2,246		52		52		3,519		86		85
Total loans, excluding GNMA and covered loans		25,705		609		592		27,350		765		743
Loans purchased from GNMA mortgage pools		7,198		816		803		6,450		822		782
Covered loans		38		14		13		109		85		64
Total loans		32,941	$	1,439	$	1,408		33,909	$	1,672	$	1,589

Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted

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 September 30
Commercial		161	$	34		143	$	37
Commercial real estate		4		–		30		18
Residential mortgages		147		22		303		41
Credit card		1,665		9		1,485		8
Other retail		146		5		278		10
Total loans, excluding GNMA and covered loans		2,123		70		2,239		114
Loans purchased from GNMA mortgage pools		366		41		492		69
Covered loans		4		1		24		25
Total loans		2,493	$	112		2,755	$	208
Nine Months Ended September 30
Commercial		456	$	42		483	$	42
Commercial real estate		16		10		72		90
Residential mortgages		424		61		673		100
Credit card		4,586		25		5,109		29
Other retail		489		15		1,164		53
Total loans, excluding GNMA and covered loans		5,971		153		7,501		314
Loans purchased from GNMA mortgage pools		542		63		4,795		615
Covered loans		14		5		49		37
Total loans		6,527	$	221		12,345	$	966

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:

	September 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	$	–	$	21	$	–	$	21	$	–	$	32	$	–	$	32
Commercial real estate loans		464		1,093		–		1,557		738		1,494		–		2,232
Residential mortgage loans		2,849		774		–		3,623		3,037		890		–		3,927
Credit card loans		–		4		–		4		–		5		–		5
Other retail loans		–		605		–		605		–		666		–		666
Losses reimbursable by the FDIC (a)		–		–		737		737		–		–		798		798
Unamortized changes in FDIC asset (b)		–		–		507		507		–		–		802		802
Covered loans		3,313		2,497		1,244		7,054		3,775		3,087		1,600		8,462
Foreclosed real estate		–		–		72		72		–		–		97		97
Total covered assets	$	3,313	$	2,497	$	1,316	$	7,126	$	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.