Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 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:

	September 30, 2016					December 31, 2015
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	87,851		32.4	%	$	83,116		31.9	%
Lease financing		5,350		2.0			5,286		2.0
Total commercial		93,201		34.4			88,402		33.9
Commercial Real Estate
Commercial mortgages		31,916		11.8			31,773		12.2
Construction and development		11,552		4.2			10,364		3.9
Total commercial real estate		43,468		16.0			42,137		16.1
Residential Mortgages
Residential mortgages		42,846		15.8			40,425		15.5
Home equity loans, first liens		13,383		4.9			13,071		5.0
Total residential mortgages		56,229		20.7			53,496		20.5
Credit Card		20,706		7.6			21,012		8.1
Other Retail
Retail leasing		6,076		2.2			5,232		2.0
Home equity and second mortgages		16,467		6.1			16,384		6.3
Revolving credit		3,247		1.2			3,354		1.3
Installment		7,983		2.9			7,030		2.7
Automobile		17,559		6.5			16,587		6.3
Student		2,332		.9			2,619		1.0
Total other retail		53,664		19.8			51,206		19.6
Total loans, excluding covered loans		267,268		98.5			256,253		98.2
Covered Loans		4,021		1.5			4,596		1.8
Total loans	$	271,289		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 September 30,						Nine Months Ended September 30,
(Dollars in Millions)	2016			2015			2016			2015
Balance at beginning of period	$	891		$	1,076		$	957		$	1,309
Accretion		(102	)		(91	)		(297	)		(289	)
Disposals		(23	)		(32	)		(77	)		(102	)
Reclassifications from nonaccretable difference (a)		31			120			214			157
Other		–			1			–			(1	)
Balance at end of period	$	797		$	1,074		$	797		$	1,074

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

Activity in Allowance for Credit Losses by Portfolio Class

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
2016
Balance at beginning of period	$	1,473		$	748		$	544		$	884		$	643		$	4,292		$	37		$	4,329
Add
Provision for credit losses		90			34			(12	)		178			37			327			(2	)		325
Deduct
Loans charged off		104			9			19			182			84			398			–			398
Less recoveries of loans charged off		(17	)		(8	)		(7	)		(21	)		(30	)		(83	)		–			(83	)
Net loans charged off		87			1			12			161			54			315			–			315
Other changes (a)		–			–			–			–			–			–			(1	)		(1	)
Balance at end of period	$	1,476		$	781		$	520		$	901		$	626		$	4,304		$	34		$	4,338
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

(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
2016
Balance at beginning of period	$	1,287		$	724		$	631		$	883		$	743		$	4,268		$	38		$	4,306
Add
Provision for credit losses		438			53			(63	)		514			42			984			(2	)		982
Deduct
Loans charged off		322			19			67			559			243			1,210			–			1,210
Less recoveries of loans charged off		(73	)		(23	)		(19	)		(64	)		(84	)		(263	)		–			(263	)
Net loans charged off		249			(4	)		48			495			159			947			–			947
Other changes (a)		–			–			–			(1	)		–			(1	)		(2	)		(3	)
Balance at end of period	$	1,476		$	781		$	520		$	901		$	626		$	4,304		$	34		$	4,338
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

(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 Class

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, 2016 Related to
Loans individually evaluated for impairment (a)	$	56	$	2	$	–	$	–	$	–	$	58	$	–	$	58
TDRs collectively evaluated for impairment		10		4		195		62		28		299		1		300
Other loans collectively evaluated for impairment		1,410		765		325		839		598		3,937		–		3,937
Loans acquired with deteriorated credit quality		–		10		–		–		–		10		33		43
Total allowance for credit losses	$	1,476	$	781	$	520	$	901	$	626	$	4,304	$	34	$	4,338
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
September 30, 2016
Loans individually evaluated for impairment (a)	$	600	$	37	$	–	$	–	$	–	$	637	$	–	$	637
TDRs collectively evaluated for impairment		145		165		3,519		217		178		4,224		37		4,261
Other loans collectively evaluated for impairment		92,449		43,016		52,710		20,489		53,486		262,150		1,662		263,812
Loans acquired with deteriorated credit quality		7		250		–		–		–		257		2,322		2,579
Total loans	$	93,201	$	43,468	$	56,229	$	20,706	$	53,664	$	267,268	$	4,021	$	271,289
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 Class, 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, 2016
Commercial	$	92,414	$	221	$	49	$	517	$	93,201
Commercial real estate		43,320		36		7		105		43,468
Residential mortgages (a)		55,310		146		159		614		56,229
Credit card		20,209		264		229		4		20,706
Other retail		53,183		254		74		153		53,664
Total loans, excluding covered loans		264,436		921		518		1,393		267,268
Covered loans		3,729		55		230		7		4,021
Total loans	$	268,165	$	976	$	748	$	1,400	$	271,289
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 September 30, 2016, $307 million of loans 30–89 days past due and $2.4 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 Class 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, 2016
Commercial (b)	$	89,289	$	1,702	$	2,210	$	3,912	$	93,201
Commercial real estate		42,204		512		752		1,264		43,468
Residential mortgages (c)		55,394		6		829		835		56,229
Credit card		20,474		–		232		232		20,706
Other retail		53,387		5		272		277		53,664
Total loans, excluding covered loans		260,748		2,225		4,295		6,520		267,268
Covered loans		3,946		–		75		75		4,021
Total loans	$	264,694	$	2,225	$	4,370	$	6,595	$	271,289
Total outstanding commitments	$	557,554	$	4,805	$	5,927	$	10,732	$	568,286
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 September 30, 2016, $1.4 billion of energy loans ($3.2 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 September 30, 2016, $2.4 billion of GNMA loans 90 days or more past due and $1.3 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
September 30, 2016
Commercial	$	825	$	1,354	$	68	$	378
Commercial real estate		379		790		8		1
Residential mortgages		2,363		2,952		165		–
Credit card		217		217		62		–
Other retail		281		457		30		3
Total loans, excluding GNMA and covered loans		4,065		5,770		333		382
Loans purchased from GNMA mortgage pools		1,344		1,344		31		–
Covered loans		38		43		1		1
Total	$	5,447	$	7,157	$	365	$	383
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 September 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 September 30
Commercial	$	845	$	2	$	408	$	3
Commercial real estate		334		6		388		3
Residential mortgages		2,381		30		2,669		31
Credit card		214		1		216		1
Other retail		287		3		329		3
Total loans, excluding GNMA and covered loans		4,061		42		4,010		41
Loans purchased from GNMA mortgage pools		1,458		23		2,040		24
Covered loans		38		–		42		–
Total	$	5,557	$	65	$	6,092	$	65
Nine Months Ended September 30
Commercial	$	786	$	6	$	351	$	9
Commercial real estate		321		12		461		13
Residential mortgages		2,457		93		2,687		97
Credit card		212		3		224		4
Other retail		296		9		342		10
Total loans, excluding GNMA and covered loans		4,072		123		4,065		133
Loans purchased from GNMA mortgage pools		1,674		71		2,120		74
Covered loans		38		1		42		–
Total	$	5,784	$	195	$	6,227	$	207

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 September 30
Commercial		638	$	200	$	169		381	$	111	$	102
Commercial real estate		26		225		223		35		24		23
Residential mortgages		700		81		87		381		48		47
Credit card		8,051		38		40		7,289		35		36
Other retail		593		9		9		690		19		19
Total loans, excluding GNMA and covered loans		10,008		553		528		8,776		237		227
Loans purchased from GNMA mortgage pools		2,609		317		308		1,986		244		245
Covered loans		15		3		3		4		1		1
Total loans		12,632	$	873	$	839		10,766	$	482	$	473
Nine Months Ended September 30
Commercial		1,734	$	692	$	567		1,170	$	227	$	223
Commercial real estate		70		242		240		89		64		62
Residential mortgages		1,192		129		136		1,820		234		232
Credit card		22,693		109		111		19,978		100		101
Other retail		1,669		27		28		1,974		42		42
Total loans, excluding GNMA and covered loans		27,358		1,199		1,082		25,031		667		660
Loans purchased from GNMA mortgage pools		6,978		770		761		5,960		732		731
Covered loans		35		6		6		13		4		4
Total loans		34,371	$	1,975	$	1,849		31,004	$	1,403	$	1,395

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 September 30
Commercial		121	$	4		95	$	1
Commercial real estate		6		3		5		5
Residential mortgages		43		4		42		5
Credit card		1,617		7		1,576		7
Other retail		103		1		123		2
Total loans, excluding GNMA and covered loans		1,890		19		1,841		20
Loans purchased from GNMA mortgage pools		39		5		143		16
Covered loans		2		1		4		1
Total loans		1,931	$	25		1,988	$	37
Nine Months Ended September 30
Commercial		374	$	15		408	$	20
Commercial real estate		21		9		13		8
Residential mortgages		101		13		228		30
Credit card		4,822		21		4,597		22
Other retail		269		5		491		9
Total loans, excluding GNMA and covered loans		5,587		63		5,737		89
Loans purchased from GNMA mortgage pools		93		12		511		64
Covered loans		3		1		4		1
Total loans		5,683	$	76		6,252	$	154

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, 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	$	2,322	$	534	$	–	$	2,856	$	2,502	$	615	$	–	$	3,117
Other retail loans		–		319		–		319		–		447		–		447
Losses reimbursable by the FDIC (a)		–		–		375		375		–		–		517		517
Unamortized changes in FDIC asset (b)		–		–		471		471		–		–		515		515
Covered loans		2,322		853		846		4,021		2,502		1,062		1,032		4,596
Foreclosed real estate		–		–		28		28		–		–		32		32
Total covered assets	$	2,322	$	853	$	874	$	4,049	$	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.