Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2016

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, 2016					December 31, 2015
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	87,179		32.4	%	$	83,116		31.9	%
Lease financing		5,335		2.0			5,286		2.0
Total commercial		92,514		34.4			88,402		33.9
Commercial Real Estate
Commercial mortgages		32,129		12.0			31,773		12.2
Construction and development		11,161		4.1			10,364		3.9
Total commercial real estate		43,290		16.1			42,137		16.1
Residential Mortgages
Residential mortgages		42,534		15.8			40,425		15.5
Home equity loans, first liens		13,370		5.0			13,071		5.0
Total residential mortgages		55,904		20.8			53,496		20.5
Credit Card		20,571		7.7			21,012		8.1
Other Retail
Retail leasing		5,512		2.1			5,232		2.0
Home equity and second mortgages		16,481		6.1			16,384		6.3
Revolving credit		3,225		1.2			3,354		1.3
Installment		7,567		2.8			7,030		2.7
Automobile		16,799		6.3			16,587		6.3
Student		2,424		.9			2,619		1.0
Total other retail		52,008		19.4			51,206		19.6
Total loans, excluding covered loans		264,287		98.4			256,253		98.2
Covered Loans		4,234		1.6			4,596		1.8
Total loans	$	268,521		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 June 30,						Six Months Ended June 30,
(Dollars in Millions)	2016			2015			2016			2015
Balance at beginning of period	$	1,013		$	1,187		$	957		$	1,309
Accretion		(103	)		(100	)		(195	)		(198	)
Disposals		(33	)		(43	)		(54	)		(70	)
Reclassifications from nonaccretable difference (a)		14			32			183			37
Other		–			–			–			(2	)
Balance at end of period	$	891		$	1,076		$	891		$	1,076

(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 June 30, (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
2016
Balance at beginning of period	$	1,441		$	734		$	556		$	875		$	678		$	4,284		$	36		$	4,320
Add
Provision for credit losses		111			14			5			179			16			325			2			327
Deduct
Loans charged off		107			7			25			189			79			407			–			407
Less recoveries of loans charged off		(28	)		(7	)		(8	)		(19	)		(28	)		(90	)		–			(90	)
Net loans charged off		79			–			17			170			51			317			–			317
Other changes (a)		–			–			–			–			–			–			(1	)		(1	)
Balance at end of period	$	1,473		$	748		$	544		$	884		$	643		$	4,292		$	37		$	4,329
2015
Balance at beginning of period	$	1,200		$	721		$	764		$	871		$	738		$	4,294		$	57		$	4,351
Add
Provision for credit losses		22			15			6			171			65			279			2			281
Deduct
Loans charged off		65			9			41			190			75			380			–			380
Less recoveries of loans charged off		(23	)		(8	)		(8	)		(21	)		(24	)		(84	)		–			(84	)
Net loans charged off		42			1			33			169			51			296			–			296
Other changes (a)		–			–			–			–			–			–			(10	)		(10	)
Balance at end of period	$	1,180		$	735		$	737		$	873		$	752		$	4,277		$	49		$	4,326

(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
2016
Balance at beginning of period	$	1,287		$	724		$	631		$	883		$	743		$	4,268		$	38		$	4,306
Add
Provision for credit losses		348			19			(51	)		336			5			657			–			657
Deduct
Loans charged off		218			10			48			377			159			812			–			812
Less recoveries of loans charged off		(56	)		(15	)		(12	)		(43	)		(54	)		(180	)		–			(180	)
Net loans charged off		162			(5	)		36			334			105			632			–			632
Other changes (a)		–			–			–			(1	)		–			(1	)		(1	)		(2	)
Balance at end of period	$	1,473		$	748		$	544		$	884		$	643		$	4,292		$	37		$	4,329
2015
Balance at beginning of period	$	1,146		$	726		$	787		$	880		$	771		$	4,310		$	65		$	4,375
Add
Provision for credit losses		120			(8	)		18			325			88			543			2			545
Deduct
Loans charged off		139			14			82			372			156			763			–			763
Less recoveries of loans charged off		(54	)		(31	)		(14	)		(40	)		(49	)		(188	)		–			(188	)
Net loans charged off		85			(17	)		68			332			107			575			–			575
Other changes (a)		(1	)		–			–			–			–			(1	)		(18	)		(19	)
Balance at end of period	$	1,180		$	735		$	737		$	873		$	752		$	4,277		$	49		$	4,326

(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, 2016 Related to
Loans individually evaluated for impairment (a)	$	56	$	2	$	–	$	–	$	–	$	58	$	–	$	58
TDRs collectively evaluated for impairment		5		2		206		58		28		299		1		300
Other loans collectively evaluated for impairment		1,412		733		338		826		615		3,924		–		3,924
Loans acquired with deteriorated credit quality		–		11		–		–		–		11		36		47
Total allowance for credit losses	$	1,473	$	748	$	544	$	884	$	643	$	4,292	$	37	$	4,329
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
June 30, 2016
Loans individually evaluated for impairment (a)	$	639	$	29	$	–	$	–	$	–	$	668	$	–	$	668
TDRs collectively evaluated for impairment		153		189		3,766		211		193		4,512		35		4,547
Other loans collectively evaluated for impairment		91,715		42,803		52,137		20,360		51,815		258,830		1,811		260,641
Loans acquired with deteriorated credit quality		7		269		1		–		–		277		2,388		2,665
Total loans	$	92,514	$	43,290	$	55,904	$	20,571	$	52,008	$	264,287	$	4,234	$	268,521
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
June 30, 2016
Commercial	$	91,775	$	203	$	47	$	489	$	92,514
Commercial real estate		43,125		49		13		103		43,290
Residential mortgages (a)		54,968		159		149		628		55,904
Credit card		20,129		236		201		5		20,571
Other retail		51,570		213		68		157		52,008
Total loans, excluding covered loans		261,567		860		478		1,382		264,287
Covered loans		3,927		54		246		7		4,234
Total loans	$	265,494	$	914	$	724	$	1,389	$	268,521
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 June 30, 2016, $295 million of loans 30–89 days past due and $2.5 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
June 30, 2016
Commercial (b)	$	88,383	$	1,766	$	2,365	$	4,131	$	92,514
Commercial real estate		42,121		452		717		1,169		43,290
Residential mortgages (c)		55,063		4		837		841		55,904
Credit card		20,365		–		206		206		20,571
Other retail		51,741		4		263		267		52,008
Total loans, excluding covered loans		257,673		2,226		4,388		6,614		264,287
Covered loans		4,155		–		79		79		4,234
Total loans	$	261,828	$	2,226	$	4,467	$	6,693	$	268,521
Total outstanding commitments	$	552,444	$	5,227	$	5,970	$	11,197	$	563,641
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 June 30, 2016, $1.5 billion of energy loans ($3.7 billion of total outstanding commitments) had a special mention or classified rating, compared with $1.1 billion of energy loans ($1.9 billion of total outstanding commitments) at December 31, 2015.

(c) At June 30, 2016, $2.5 billion of GNMA loans 90 days or more past due and $1.6 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
June 30, 2016
Commercial	$	865	$	1,416	$	63	$	604
Commercial real estate		288		745		4		1
Residential mortgages		2,400		3,005		173		–
Credit card		211		211		58		–
Other retail		294		472		30		4
Total loans, excluding GNMA and covered loans		4,058		5,849		328		609
Loans purchased from GNMA mortgage pools		1,572		1,572		34		–
Covered loans		37		41		1		1
Total	$	5,667	$	7,462	$	363	$	610
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 June 30, 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
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended June 30
Commercial	$	842	$	3	$	335	$	4
Commercial real estate		302		3		445		7
Residential mortgages		2,452		31		2,688		33
Credit card		212		1		222		1
Other retail		297		3		342		3
Total loans, excluding GNMA and covered loans		4,105		41		4,032		48
Loans purchased from GNMA mortgage pools		1,696		23		2,119		25
Covered loans		38		1		42		–
Total	$	5,839	$	65	$	6,193	$	73
Six Months Ended June 30
Commercial	$	756	$	4	$	323	$	6
Commercial real estate		314		6		497		10
Residential mortgages		2,496		63		2,696		66
Credit card		211		2		228		3
Other retail		301		6		348		7
Total loans, excluding GNMA and covered loans		4,078		81		4,092		92
Loans purchased from GNMA mortgage pools		1,782		48		2,160		50
Covered loans		38		1		42		–
Total	$	5,898	$	130	$	6,294	$	142

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
(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		495	$	332	$	237		430	$	93	$	98
Commercial real estate		20		10		10		29		27		26
Residential mortgages		214		16		17		1,065		135		134
Credit card		6,654		33		32		6,352		32		32
Other retail		467		7		8		662		12		12
Total loans, excluding GNMA and covered loans		7,850		398		304		8,538		299		302
Loans purchased from GNMA mortgage pools		1,501		140		142		1,950		242		241
Covered loans		17		3		3		8		3		3
Total loans		9,368	$	541	$	449		10,496	$	544	$	546
Six Months Ended June 30
Commercial		1,096	$	492	$	398		789	$	116	$	121
Commercial real estate		44		17		17		54		40		39
Residential mortgages		492		48		49		1,439		186		185
Credit card		14,642		71		71		12,689		65		65
Other retail		1,076		18		19		1,284		23		23
Total loans, excluding GNMA and covered loans		17,350		646		554		16,255		430		433
Loans purchased from GNMA mortgage pools		4,369		453		453		3,974		488		486
Covered loans		20		3		3		9		3		3
Total loans		21,739	$	1,102	$	1,010		20,238	$	921	$	922

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
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended June 30
Commercial		141	$	9		149	$	17
Commercial real estate		5		1		3		1
Residential mortgages		27		4		80		12
Credit card		1,632		7		1,443		7
Other retail		88		3		237		4
Total loans, excluding GNMA and covered loans		1,893		24		1,912		41
Loans purchased from GNMA mortgage pools		28		4		170		22
Covered loans		1		–		–		–
Total loans		1,922	$	28		2,082	$	63
Six Months Ended June 30
Commercial		253	$	11		313	$	19
Commercial real estate		15		6		8		3
Residential mortgages		58		9		186		25
Credit card		3,205		14		3,021		15
Other retail		166		4		368		7
Total loans, excluding GNMA and covered loans		3,697		44		3,896		69
Loans purchased from GNMA mortgage pools		54		7		368		48
Covered loans		1		–		–		–
Total loans		3,752	$	51		4,264	$	117

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, 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	$	2,388	$	560	$	–	$	2,948	$	2,502	$	615	$	–	$	3,117
Other retail loans		–		366		–		366		–		447		–		447
Losses reimbursable by the FDIC (a)		–		–		388		388		–		–		517		517
Unamortized changes in FDIC asset (b)		–		–		532		532		–		–		515		515
Covered loans		2,388		926		920		4,234		2,502		1,062		1,032		4,596
Foreclosed real estate		–		–		34		34		–		–		32		32
Total covered assets	$	2,388	$	926	$	954	$	4,268	$	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.