Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2015

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, 2015					December 31, 2014
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	80,313		31.5	%	$	74,996		30.2	%
Lease financing		5,226		2.1			5,381		2.2
Total commercial		85,539		33.6			80,377		32.4
Commercial Real Estate
Commercial mortgages		32,089		12.6			33,360		13.5
Construction and development		10,389		4.1			9,435		3.8
Total commercial real estate		42,478		16.7			42,795		17.3
Residential Mortgages
Residential mortgages		39,341		15.4			38,598		15.6
Home equity loans, first liens		13,008		5.1			13,021		5.2
Total residential mortgages		52,349		20.5			51,619		20.8
Credit Card		18,583		7.3			18,515		7.5
Other Retail
Retail leasing		5,387		2.1			5,871		2.4
Home equity and second mortgages		16,188		6.3			15,916		6.4
Revolving credit		3,334		1.3			3,309		1.3
Installment		6,949		2.7			6,242		2.5
Automobile		16,484		6.5			14,822		6.0
Student		2,709		1.1			3,104		1.3
Total other retail		51,051		20.0			49,264		19.9
Total loans, excluding covered loans		250,000		98.1			242,570		97.9
Covered Loans		4,791		1.9			5,281		2.1
Total loans	$	254,791		100.0	%	$	247,851		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)	2015			2014			2015			2014
Balance at beginning of period	$	1,076		$	1,487		$	1,309		$	1,655
Accretion		(91	)		(105	)		(289	)		(336	)
Disposals		(32	)		(34	)		(102	)		(103	)
Reclassifications from nonaccretable difference (a)		120			38			157			172
Other		1			–			(1	)		(2	)
Balance at end of period	$	1,074		$	1,386		$	1,074		$	1,386

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

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
2015
Balance at beginning of period	$	1,180		$	735		$	737		$	873		$	752		$	4,277		$	49		$	4,326
Add
Provision for credit losses		114			(10	)		(24	)		156			46			282			–			282
Deduct
Loans charged off		91			2			31			171			77			372			–			372
Less recoveries of loans charged off		(20	)		(13	)		(6	)		(18	)		(23	)		(80	)		–			(80	)
Net loans charged off		71			(11	)		25			153			54			292			–			292
Other changes (a)		–			–			–			–			–			–			(10	)		(10	)
Balance at end of period	$	1,223		$	736		$	688		$	876		$	744		$	4,267		$	39		$	4,306
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

(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
2015
Balance at beginning of period	$	1,146		$	726		$	787		$	880		$	771		$	4,310		$	65		$	4,375
Add
Provision for credit losses		234			(18	)		(6	)		481			134			825			2			827
Deduct
Loans charged off		230			16			113			543			233			1,135			–			1,135
Less recoveries of loans charged off		(74	)		(44	)		(20	)		(58	)		(72	)		(268	)		–			(268	)
Net loans charged off		156			(28	)		93			485			161			867			–			867
Other changes (a)		(1	)		–			–			–			–			(1	)		(28	)		(29	)
Balance at end of period	$	1,223		$	736		$	688		$	876		$	744		$	4,267		$	39		$	4,306
2014
Balance at beginning 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

(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, 2015 Related to
Loans individually evaluated for impairment (a)	$	8	$	1	$	–	$	–	$	–	$	9	$	–	$	9
TDRs collectively evaluated for impairment		8		11		280		56		36		391		2		393
Other loans collectively evaluated for impairment		1,207		710		408		820		708		3,853		1		3,854
Loans acquired with deteriorated credit quality		–		14		–		–		–		14		36		50
Total allowance for credit losses	$	1,223	$	736	$	688	$	876	$	744	$	4,267	$	39	$	4,306
Allowance Balance at December 31, 2014 Related to
Loans individually evaluated for impairment (a)	$	5	$	4	$	–	$	–	$	–	$	9	$	–	$	9
TDRs collectively evaluated for impairment		12		12		319		61		41		445		4		449
Other loans collectively evaluated for impairment		1,129		678		468		819		730		3,824		1		3,825
Loans acquired with deteriorated credit quality		–		32		–		–		–		32		60		92
Total allowance for credit losses	$	1,146	$	726	$	787	$	880	$	771	$	4,310	$	65	$	4,375

(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, 2015
Loans individually evaluated for impairment (a)	$	267	$	42	$	13	$	–	$	–	$	322	$	–	$	322
TDRs collectively evaluated for impairment		136		250		4,387		214		219		5,206		35		5,241
Other loans collectively evaluated for impairment		85,135		41,873		47,948		18,369		50,832		244,157		2,176		246,333
Loans acquired with deteriorated credit quality		1		313		1		–		–		315		2,580		2,895
Total loans	$	85,539	$	42,478	$	52,349	$	18,583	$	51,051	$	250,000	$	4,791	$	254,791
December 31, 2014
Loans individually evaluated for impairment (a)	$	159	$	128	$	12	$	–	$	–	$	299	$	–	$	299
TDRs collectively evaluated for impairment		124		393		4,653		240		237		5,647		34		5,681
Other loans collectively evaluated for impairment		80,093		41,744		46,953		18,275		49,027		236,092		2,463		238,555
Loans acquired with deteriorated credit quality		1		530		1		–		–		532		2,784		3,316
Total loans	$	80,377	$	42,795	$	51,619	$	18,515	$	49,264	$	242,570	$	5,281	$	247,851

(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, 2015
Commercial	$	85,119	$	207	$	44	$	169	$	85,539
Commercial real estate		42,252		62		20		144		42,478
Residential mortgages (a)		51,262		181		171		735		52,349
Credit card		18,132		235		204		12		18,583
Other retail		50,607		202		71		171		51,051
Total loans, excluding covered loans		247,372		887		510		1,231		250,000
Covered loans		4,404		61		315		11		4,791
Total loans	$	251,776	$	948	$	825	$	1,242	$	254,791
December 31, 2014
Commercial	$	79,977	$	247	$	41	$	112	$	80,377
Commercial real estate		42,406		110		20		259		42,795
Residential mortgages (a)		50,330		221		204		864		51,619
Credit card		18,046		229		210		30		18,515
Other retail		48,764		238		75		187		49,264
Total loans, excluding covered loans		239,523		1,045		550		1,452		242,570
Covered loans		4,804		68		395		14		5,281
Total loans	$	244,327	$	1,113	$	945	$	1,466	$	247,851

(a) At September 30, 2015, $337 million of loans 30–89 days past due and $2.9 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 $431 million and $3.1 billion at December 31, 2014, 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, 2015
Commercial (b)	$	82,468	$	1,803	$	1,268	$	3,071	$	85,539
Commercial real estate		41,411		324		743		1,067		42,478
Residential mortgages (c)		51,375		7		967		974		52,349
Credit card		18,367		–		216		216		18,583
Other retail		50,749		5		297		302		51,051
Total loans, excluding covered loans		244,370		2,139		3,491		5,630		250,000
Covered loans		4,696		–		95		95		4,791
Total loans	$	249,066	$	2,139	$	3,586	$	5,725	$	254,791
Total outstanding commitments	$	523,370	$	3,820	$	4,229	$	8,049	$	531,419
December 31, 2014
Commercial (b)	$	78,409	$	1,204	$	764	$	1,968	$	80,377
Commercial real estate		41,322		451		1,022		1,473		42,795
Residential mortgages (c)		50,479		5		1,135		1,140		51,619
Credit card		18,275		–		240		240		18,515
Other retail		48,932		20		312		332		49,264
Total loans, excluding covered loans		237,417		1,680		3,473		5,153		242,570
Covered loans		5,164		–		117		117		5,281
Total loans	$	242,581	$	1,680	$	3,590	$	5,270	$	247,851
Total outstanding commitments	$	501,535	$	2,964	$	4,179	$	7,143	$	508,678

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

(b) At September 30, 2015, $917 million of loans to customers in energy-related businesses had a special mention or classified rating, compared with $122 million at December 31, 2014.

(c) At September 30, 2015, $2.9 billion of GNMA loans 90 days or more past due and $2.0 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 $3.1 billion and $2.2 billion at December 31, 2014, respectively.

Summary of Impaired Loans, which Include Nonaccrual and TDR Loans, by Portfolio Class

A summary of impaired loans, which include all nonaccrual and TDR 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, 2015
Commercial	$	439	$	1,002	$	19	$	100
Commercial real estate		362		921		16		2
Residential mortgages		2,638		3,345		239		–
Credit card		214		214		56		–
Other retail		324		523		39		4
Total impaired loans, excluding GNMA and covered loans		3,977		6,005		369		106
Loans purchased from GNMA mortgage pools		2,000		2,000		44		–
Covered loans		42		46		2		1
Total	$	6,019	$	8,051	$	415	$	107
December 31, 2014
Commercial	$	329	$	769	$	21	$	51
Commercial real estate		624		1,250		23		18
Residential mortgages		2,730		3,495		273		–
Credit card		240		240		61		–
Other retail		361		570		44		4
Total impaired loans, excluding GNMA and covered loans		4,284		6,324		422		73
Loans purchased from GNMA mortgage pools		2,244		2,244		50		–
Covered loans		43		55		4		1
Total	$	6,571	$	8,623	$	476	$	74

(a) Substantially all loans classified as impaired at September 30, 2015 and December 31, 2014, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income

Additional information on impaired loans follows:

	2015				2014
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended September 30
Commercial	$	408	$	3	$	425	$	4
Commercial real estate		388		3		541		4
Residential mortgages		2,669		31		2,740		33
Credit card		216		1		264		1
Other retail		329		3		373		5
Total impaired loans, excluding GNMA and covered loans		4,010		41		4,343		47
Loans purchased from GNMA mortgage pools		2,040		24		2,647		29
Covered loans		42		–		335		5
Total	$	6,092	$	65	$	7,325	$	81
Nine Months Ended September 30
Commercial	$	351	$	9	$	430	$	8
Commercial real estate		461		13		598		17
Residential mortgages		2,687		97		2,744		105
Credit card		224		4		281		7
Other retail		342		10		381		13
Total impaired loans, excluding GNMA and covered loans		4,065		133		4,434		150
Loans purchased from GNMA mortgage pools		2,120		74		2,691		95
Covered loans		42		–		389		15
Total	$	6,227	$	207	$	7,514	$	260

Summary of Loans Modified as TDRs

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

	2015						2014
(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		381	$	111	$	102		448	$	28	$	26
Commercial real estate		35		24		23		27		14		13
Residential mortgages		381		48		47		525		71		70
Credit card		7,289		35		36		6,708		35		36
Other retail		690		19		19		810		18		18
Total loans, excluding GNMA and covered loans		8,776		237		227		8,518		166		163
Loans purchased from GNMA mortgage pools		1,986		244		245		2,273		278		278
Covered loans		4		1		1		18		3		3
Total loans		10,766	$	482	$	473		10,809	$	447	$	444
Nine Months Ended September 30
Commercial		1,170	$	227	$	223		1,633	$	181	$	169
Commercial real estate		89		64		62		54		33		28
Residential mortgages		1,820		234		232		1,732		232		231
Credit card		19,978		100		101		20,040		111		112
Other retail		1,974		42		42		2,246		52		52
Total loans, excluding GNMA and covered loans		25,031		667		660		25,705		609		592
Loans purchased from GNMA mortgage pools		5,960		732		731		7,198		816		803
Covered loans		13		4		4		38		14		13
Total loans		31,004	$	1,403	$	1,395		32,941	$	1,439	$	1,408

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:

	2015				2014
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		95	$	1		161	$	34
Commercial real estate		5		5		4		–
Residential mortgages		42		5		147		22
Credit card		1,576		7		1,665		9
Other retail		123		2		146		5
Total loans, excluding GNMA and covered loans		1,841		20		2,123		70
Loans purchased from GNMA mortgage pools		143		16		366		41
Covered loans		4		1		4		1
Total loans		1,988	$	37		2,493	$	112
Nine Months Ended September 30
Commercial		408	$	20		456	$	42
Commercial real estate		13		8		16		10
Residential mortgages		228		30		424		61
Credit card		4,597		22		4,586		25
Other retail		491		9		489		15
Total loans, excluding GNMA and covered loans		5,737		89		5,971		153
Loans purchased from GNMA mortgage pools		511		64		542		63
Covered loans		4		1		14		5
Total loans		6,252	$	154		6,527	$	221

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, 2015								December 31, 2014
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other Assets		Total
Residential mortgage loans	$	2,580	$	644	$	–	$	3,224	$	2,784	$	738	$	–	$	3,522
Other retail loans		–		486		–		486		–		584		–		584
Losses reimbursable by the FDIC (a)		–		–		696		696		–		–		717		717
Unamortized changes in FDIC asset (b)		–		–		385		385		–		–		458		458
Covered loans		2,580		1,130		1,081		4,791		2,784		1,322		1,175		5,281
Foreclosed real estate		–		–		31		31		–		–		37		37
Total covered assets	$	2,580	$	1,130	$	1,112	$	4,822	$	2,784	$	1,322	$	1,212	$	5,318

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