Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2016

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, 2016					December 31, 2015
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	85,986		32.5	%	$	83,116		31.9	%
Lease financing		5,291		2.0			5,286		2.0
Total commercial		91,277		34.5			88,402		33.9
Commercial Real Estate
Commercial mortgages		31,936		12.1			31,773		12.2
Construction and development		10,807		4.1			10,364		3.9
Total commercial real estate		42,743		16.2			42,137		16.1
Residential Mortgages
Residential mortgages		41,742		15.8			40,425		15.5
Home equity loans, first liens		13,213		5.0			13,071		5.0
Total residential mortgages		54,955		20.8			53,496		20.5
Credit Card		19,957		7.5			21,012		8.1
Other Retail
Retail leasing		5,268		2.0			5,232		2.0
Home equity and second mortgages		16,332		6.2			16,384		6.3
Revolving credit		3,220		1.2			3,354		1.3
Installment		7,162		2.7			7,030		2.7
Automobile		16,657		6.3			16,587		6.3
Student		2,522		.9			2,619		1.0
Total other retail		51,161		19.3			51,206		19.6
Total loans, excluding covered loans		260,093		98.3			256,253		98.2
Covered Loans		4,429		1.7			4,596		1.8
Total loans	$	264,522		100.0	%	$	260,849		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)	2016			2015
Balance at beginning of period	$	957		$	1,309
Accretion		(92	)		(98	)
Disposals		(21	)		(27	)
Reclassifications from nonaccretable difference (a)		169			5
Other		–			(2	)
Balance at end of period	$	1,013		$	1,187

(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:

(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, 2015	$	1,287		$	724		$	631		$	883		$	743		$	4,268		$	38		$	4,306
Add
Provision for credit losses		237			5			(56	)		157			(11	)		332			(2	)		330
Deduct
Loans charged off		111			3			23			188			80			405			–			405
Less recoveries of loans charged off		(28	)		(8	)		(4	)		(24	)		(26	)		(90	)		–			(90	)
Net loans charged off		83			(5	)		19			164			54			315			–			315
Other changes (a)		–			–			–			(1	)		–			(1	)		–			(1	)
Balance at March 31, 2016	$	1,441		$	734		$	556		$	875		$	678		$	4,284		$	36		$	4,320
Balance at December 31, 2014	$	1,146		$	726		$	787		$	880		$	771		$	4,310		$	65		$	4,375
Add
Provision for credit losses		98			(23	)		12			154			23			264			–			264
Deduct
Loans charged off		74			5			41			182			81			383			–			383
Less recoveries of loans charged off		(31	)		(23	)		(6	)		(19	)		(25	)		(104	)		–			(104	)
Net loans charged off		43			(18	)		35			163			56			279			–			279
Other changes (a)		(1	)		–			–			–			–			(1	)		(8	)		(9	)
Balance at March 31, 2015	$	1,200		$	721		$	764		$	871		$	738		$	4,294		$	57		$	4,351

(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 March 31, 2016 Related to
Loans individually evaluated for impairment (a)	$	45	$	1	$	–	$	–	$	–	$	46	$	–	$	46
TDRs collectively evaluated for impairment		6		1		221		57		32		317		1		318
Other loans collectively evaluated for impairment		1,390		720		335		818		646		3,909		1		3,910
Loans acquired with deteriorated credit quality		–		12		–		–		–		12		34		46
Total allowance for credit losses	$	1,441	$	734	$	556	$	875	$	678	$	4,284	$	36	$	4,320
Allowance Balance at December 31, 2015 Related to
Loans individually evaluated for impairment (a)	$	11	$	2	$	–	$	–	$	–	$	13	$	–	$	13
TDRs collectively evaluated for impairment		10		7		236		57		33		343		2		345
Other loans collectively evaluated for impairment		1,266		703		395		826		710		3,900		–		3,900
Loans acquired with deteriorated credit quality		–		12		–		–		–		12		36		48
Total allowance for credit losses	$	1,287	$	724	$	631	$	883	$	743	$	4,268	$	38	$	4,306

(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, 2016
Loans individually evaluated for impairment (a)	$	616	$	28	$	13	$	–	$	–	$	657	$	–	$	657
TDRs collectively evaluated for impairment		155		220		4,093		212		204		4,884		35		4,919
Other loans collectively evaluated for impairment		90,505		42,205		50,848		19,745		50,957		254,260		1,941		256,201
Loans acquired with deteriorated credit quality		1		290		1		–		–		292		2,453		2,745
Total loans	$	91,277	$	42,743	$	54,955	$	19,957	$	51,161	$	260,093	$	4,429	$	264,522
December 31, 2015
Loans individually evaluated for impairment (a)	$	336	$	41	$	13	$	–	$	–	$	390	$	–	$	390
TDRs collectively evaluated for impairment		138		235		4,241		210		211		5,035		35		5,070
Other loans collectively evaluated for impairment		87,927		41,566		49,241		20,802		50,995		250,531		2,059		252,590
Loans acquired with deteriorated credit quality		1		295		1		–		–		297		2,502		2,799
Total loans	$	88,402	$	42,137	$	53,496	$	21,012	$	51,206	$	256,253	$	4,596	$	260,849

(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
March 31, 2016
Commercial	$	90,561	$	195	$	48	$	473	$	91,277
Commercial real estate		42,541		82		16		104		42,743
Residential mortgages (a)		53,975		134		169		677		54,955
Credit card		19,511		219		220		7		19,957
Other retail		50,734		195		75		157		51,161
Total loans, excluding covered loans		257,322		825		528		1,418		260,093
Covered loans		4,086		60		276		7		4,429
Total loans	$	261,408	$	885	$	804	$	1,425	$	264,522
December 31, 2015
Commercial	$	87,863	$	317	$	48	$	174	$	88,402
Commercial real estate		41,907		89		14		127		42,137
Residential mortgages (a)		52,438		170		176		712		53,496
Credit card		20,532		243		228		9		21,012
Other retail		50,745		224		75		162		51,206
Total loans, excluding covered loans		253,485		1,043		541		1,184		256,253
Covered loans		4,236		62		290		8		4,596
Total loans	$	257,721	$	1,105	$	831	$	1,192	$	260,849

(a) At March 31, 2016, $271 million of loans 30–89 days past due and $2.8 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 $320 million and $2.9 billion at December 31, 2015, 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, 2016
Commercial (b)	$	87,044	$	1,495	$	2,738	$	4,233	$	91,277
Commercial real estate		41,665		356		722		1,078		42,743
Residential mortgages (c)		54,037		1		917		918		54,955
Credit card		19,731		–		226		226		19,957
Other retail		50,872		6		283		289		51,161
Total loans, excluding covered loans		253,349		1,858		4,886		6,744		260,093
Covered loans		4,344		–		85		85		4,429
Total loans	$	257,693	$	1,858	$	4,971	$	6,829	$	264,522
Total outstanding commitments	$	544,957	$	4,551	$	6,849	$	11,400	$	556,357
December 31, 2015
Commercial (b)	$	85,206	$	1,629	$	1,567	$	3,196	$	88,402
Commercial real estate		41,079		365		693		1,058		42,137
Residential mortgages (c)		52,548		2		946		948		53,496
Credit card		20,775		–		237		237		21,012
Other retail		50,899		6		301		307		51,206
Total loans, excluding covered loans		250,507		2,002		3,744		5,746		256,253
Covered loans		4,507		–		89		89		4,596
Total loans	$	255,014	$	2,002	$	3,833	$	5,835	$	260,849
Total outstanding commitments	$	539,614	$	3,945	$	4,845	$	8,790	$	548,404

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

(b) At March 31, 2016, $1.8 billion of loans ($4.2 billion of total outstanding commitments) to customers in energy-related businesses had a special mention or classified rating, compared with $1.1 billion of loans ($1.9 billion of total outstanding commitments) at December 31, 2015.

(c) At March 31, 2016, $2.8 billion of GNMA loans 90 days or more past due and $1.8 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 $2.9 billion and $1.9 billion at December 31, 2015, 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
March 31, 2016
Commercial	$	820	$	1,365	$	51	$	376
Commercial real estate		316		784		3		5
Residential mortgages		2,504		3,141		188		–
Credit card		212		212		57		–
Other retail		301		493		34		3
Total loans, excluding GNMA and covered loans		4,153		5,995		333		384
Loans purchased from GNMA mortgage pools		1,820		1,820		34		–
Covered loans		38		45		1		1
Total	$	6,011	$	7,860	$	368	$	385
December 31, 2015
Commercial	$	520	$	1,110	$	25	$	154
Commercial real estate		336		847		11		1
Residential mortgages		2,575		3,248		199		–
Credit card		210		210		57		–
Other retail		309		503		35		4
Total loans, excluding GNMA and covered loans		3,950		5,918		327		159
Loans purchased from GNMA mortgage pools		1,913		1,913		40		–
Covered loans		39		48		2		1
Total	$	5,902	$	7,879	$	369	$	160

(a) Substantially all loans classified as impaired at March 31, 2016 and December 31, 2015, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans follows:

	2016				2015
Three Months Ended March 31, (Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	670	$	1	$	311	$	2
Commercial real estate		326		3		550		3
Residential mortgages		2,539		32		2,703		33
Credit card		211		1		233		2
Other retail		305		3		355		4
Total loans, excluding GNMA and covered loans		4,051		40		4,152		44
Loans purchased from GNMA mortgage pools		1,867		25		2,201		25
Covered loans		39		–		42		–
Total	$	5,957	$	65	$	6,395	$	69

Summary of Loans Modified as TDRs

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

	2016						2015
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		601	$	160	$	161		359	$	23	$	23
Commercial real estate		24		7		7		25		13		13
Residential mortgages		278		32		32		374		51		51
Credit card		7,988		38		39		6,337		33		33
Other retail		609		11		11		622		11		11
Total loans, excluding GNMA and covered loans		9,500		248		250		7,717		131		131
Loans purchased from GNMA mortgage pools		2,868		313		311		2,024		246		245
Covered loans		3		–		–		1		–		–
Total loans		12,371	$	561	$	561		9,742	$	377	$	376

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:

	2016				2015
Three Months Ended March 31, (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		112	$	2		164	$	2
Commercial real estate		10		5		5		2
Residential mortgages		31		5		106		13
Credit card		1,573		7		1,578		8
Other retail		78		1		131		3
Total loans, excluding GNMA and covered loans		1,804		20		1,984		28
Loans purchased from GNMA mortgage pools		26		3		198		26
Covered loans		–		–		–		–
Total loans		1,830	$	23		2,182	$	54

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, 2016								December 31, 2015
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total
Residential mortgage loans	$	2,453	$	583	$	–	$	3,036	$	2,502	$	615	$	–	$	3,117
Other retail loans		–		416		–		416		–		447		–		447
Losses reimbursable by the FDIC (a)		–		–		394		394		–		–		517		517
Unamortized changes in FDIC asset (b)		–		–		583		583		–		–		515		515
Covered loans		2,453		999		977		4,429		2,502		1,062		1,032		4,596
Foreclosed real estate		–		–		33		33		–		–		32		32
Total covered assets	$	2,453	$	999	$	1,010	$	4,462	$	2,502	$	1,062	$	1,064	$	4,628

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