Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2017

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, 2017					December 31, 2016
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	88,883		32.5	%	$	87,928		32.2	%
Lease financing		5,608		2.0			5,458		2.0
Total commercial		94,491		34.5			93,386		34.2
Commercial Real Estate
Commercial mortgages		31,046		11.4			31,592		11.6
Construction and development		11,786		4.3			11,506		4.2
Total commercial real estate		42,832		15.7			43,098		15.8
Residential Mortgages
Residential mortgages		44,667		16.3			43,632		16.0
Home equity loans, first liens		13,599		5.0			13,642		5.0
Total residential mortgages		58,266		21.3			57,274		21.0
Credit Card		20,387		7.5			21,749		7.9
Other Retail
Retail leasing		6,793		2.5			6,316		2.3
Home equity and second mortgages		16,163		5.9			16,369		6.0
Revolving credit		3,164		1.1			3,282		1.2
Installment		8,179		3.0			8,087		3.0
Automobile		17,522		6.4			17,571		6.4
Student		2,145		.8			2,239		.8
Total other retail		53,966		19.7			53,864		19.7
Total loans, excluding covered loans		269,942		98.7			269,371		98.6
Covered Loans		3,635		1.3			3,836		1.4
Total loans	$	273,577		100.0	%	$	273,207		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)	2017			2016
Balance at beginning of period	$	698		$	957
Accretion		(90	)		(92	)
Disposals		(23	)		(21	)
Reclassifications from nonaccretable difference (a)		53			169
Other		(1	)		–
Balance at end of period	$	637		$	1,013

(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:

(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, 2016	$	1,450		$	812		$	510		$	934		$	617		$	4,323		$	34		$	4,357
Add
Provision for credit losses		54			28			(13	)		211			65			345			–			345
Deduct
Loans charged-off		96			3			17			212			89			417			–			417
Less recoveries of loans charged-off		(21	)		(5	)		(5	)		(22	)		(29	)		(82	)		–			(82	)
Net loans charged-off		75			(2	)		12			190			60			335			–			335
Other changes (a)		–			–			–			–			–			–			(1	)		(1	)
Balance at March 31, 2017	$	1,429		$	842		$	485		$	955		$	622		$	4,333		$	33		$	4,366
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

(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 March 31, 2017 Related to
Loans individually evaluated for impairment (a)	$	50	$	4	$	–	$	–	$	–	$	54	$	–	$	54
TDRs collectively evaluated for impairment		17		3		162		65		17		264		1		265
Other loans collectively evaluated for impairment		1,362		830		323		890		605		4,010		–		4,010
Loans acquired with deteriorated credit quality		–		5		–		–		–		5		32		37
Total allowance for credit losses	$	1,429	$	842	$	485	$	955	$	622	$	4,333	$	33	$	4,366
Allowance Balance at December 31, 2016 Related to
Loans individually evaluated for impairment (a)	$	50	$	4	$	–	$	–	$	–	$	54	$	–	$	54
TDRs collectively evaluated for impairment		12		4		180		65		20		281		1		282
Other loans collectively evaluated for impairment		1,388		798		330		869		597		3,982		–		3,982
Loans acquired with deteriorated credit quality		–		6		–		–		–		6		33		39
Total allowance for credit losses	$	1,450	$	812	$	510	$	934	$	617	$	4,323	$	34	$	4,357

(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, 2017
Loans individually evaluated for impairment (a)	$	534	$	62	$	–	$	–	$	–	$	596	$	–	$	596
TDRs collectively evaluated for impairment		170		131		3,749		229		169		4,448		34		4,482
Other loans collectively evaluated for impairment		93,780		42,523		54,516		20,158		53,796		264,773		1,421		266,194
Loans acquired with deteriorated credit quality		7		116		1		–		1		125		2,180		2,305
Total loans	$	94,491	$	42,832	$	58,266	$	20,387	$	53,966	$	269,942	$	3,635	$	273,577
December 31, 2016
Loans individually evaluated for impairment (a)	$	623	$	70	$	–	$	–	$	–	$	693	$	–	$	693
TDRs collectively evaluated for impairment		145		146		3,678		222		173		4,364		35		4,399
Other loans collectively evaluated for impairment		92,611		42,751		53,595		21,527		53,691		264,175		1,553		265,728
Loans acquired with deteriorated credit quality		7		131		1		–		–		139		2,248		2,387
Total loans	$	93,386	$	43,098	$	57,274	$	21,749	$	53,864	$	269,371	$	3,836	$	273,207

(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
March 31, 2017
Commercial	$	93,784	$	216	$	52	$	439	$	94,491
Commercial real estate		42,653		65		4		110		42,832
Residential mortgages (a)		57,429		120		142		575		58,266
Credit card		19,882		252		251		2		20,387
Other retail		53,486		248		75		157		53,966
Total loans, excluding covered loans		267,234		901		524		1,283		269,942
Covered loans		3,389		45		194		7		3,635
Total loans	$	270,623	$	946	$	718	$	1,290	$	273,577
December 31, 2016
Commercial	$	92,588	$	263	$	52	$	483	$	93,386
Commercial real estate		42,922		44		8		124		43,098
Residential mortgages (a)		56,372		151		156		595		57,274
Credit card		21,209		284		253		3		21,749
Other retail		53,340		284		83		157		53,864
Total loans, excluding covered loans		266,431		1,026		552		1,362		269,371
Covered loans		3,563		55		212		6		3,836
Total loans	$	269,994	$	1,081	$	764	$	1,368	$	273,207

(a) At March 31, 2017, $221 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 United States Department of Veterans Affairs, were classified as current, compared with $273 million and $2.5 billion at December 31, 2016, 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
March 31, 2017
Commercial (b)	$	90,899	$	1,820	$	1,772	$	3,592	$	94,491
Commercial real estate		41,371		698		763		1,461		42,832
Residential mortgages (c)		57,486		4		776		780		58,266
Credit card		20,134		–		253		253		20,387
Other retail		53,690		2		274		276		53,966
Total loans, excluding covered loans		263,580		2,524		3,838		6,362		269,942
Covered loans		3,569		–		66		66		3,635
Total loans	$	267,149	$	2,524	$	3,904	$	6,428	$	273,577
Total outstanding commitments	$	566,122	$	5,215	$	5,392	$	10,607	$	576,729
December 31, 2016
Commercial (b)	$	89,739	$	1,721	$	1,926	$	3,647	$	93,386
Commercial real estate		41,634		663		801		1,464		43,098
Residential mortgages (c)		56,457		10		807		817		57,274
Credit card		21,493		–		256		256		21,749
Other retail		53,576		6		282		288		53,864
Total loans, excluding covered loans		262,899		2,400		4,072		6,472		269,371
Covered loans		3,766		–		70		70		3,836
Total loans	$	266,665	$	2,400	$	4,142	$	6,542	$	273,207
Total outstanding commitments	$	562,704	$	4,920	$	5,629	$	10,549	$	573,253

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

(b) At March 31, 2017, $1.0 billion of energy loans ($2.8 billion of total outstanding commitments) had a special mention or classified rating, compared with $1.2 billion of energy loans ($2.8 billion of total outstanding commitments) at December 31, 2016.

(c) At March 31, 2017, $2.4 billion of GNMA loans 90 days or more past due and $1.7 billion of restructured GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.5 billion and $1.6 billion at December 31, 2016, 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, 2017
Commercial	$	784	$	1,168	$	69	$	365
Commercial real estate		263		624		9		–
Residential mortgages		2,206		2,700		129		–
Credit card		229		229		65		–
Other retail		279		455		19		3
Total loans, excluding GNMA and covered loans		3,761		5,176		291		368
Loans purchased from GNMA mortgage pools		1,717		1,717		34		–
Covered loans		36		43		1		1
Total	$	5,514	$	6,936	$	326	$	369
December 31, 2016
Commercial	$	849	$	1,364	$	68	$	284
Commercial real estate		293		697		10		–
Residential mortgages		2,274		2,847		153		–
Credit card		222		222		64		–
Other retail		281		456		22		4
Total loans, excluding GNMA and covered loans		3,919		5,586		317		288
Loans purchased from GNMA mortgage pools		1,574		1,574		28		–
Covered loans		36		42		1		1
Total	$	5,529	$	7,202	$	346	$	289

(a) Substantially all loans classified as impaired at March 31, 2017 and December 31, 2016, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans follows:

	2017				2016
Three Months Ended March 31, (Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	817	$	1	$	670	$	1
Commercial real estate		278		2		326		3
Residential mortgages		2,240		29		2,539		32
Credit card		225		1		211		1
Other retail		280		4		305		3
Total loans, excluding GNMA and covered loans		3,840		37		4,051		40
Loans purchased from GNMA mortgage pools		1,646		18		1,867		25
Covered loans		36		–		39		–
Total	$	5,522	$	55	$	5,957	$	65

Summary of Loans Modified as TDRs

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

	2017						2016
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		830	$	137	$	128		601	$	160	$	161
Commercial real estate		23		9		8		24		7		7
Residential mortgages		356		40		41		278		32		32
Credit card		9,405		45		46		7,988		38		39
Other retail		622		11		9		609		11		11
Total loans, excluding GNMA and covered loans		11,236		242		232		9,500		248		250
Loans purchased from GNMA mortgage pools		2,929		387		378		2,868		313		311
Covered loans		4		1		1		3		–		–
Total loans		14,169	$	630	$	611		12,371	$	561	$	561

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:

	2017				2016
Three Months Ended March 31, (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		173	$	8		112	$	2
Commercial real estate		8		2		10		5
Residential mortgages		72		9		31		5
Credit card		2,047		9		1,573		7
Other retail		129		2		78		1
Total loans, excluding GNMA and covered loans		2,429		30		1,804		20
Loans purchased from GNMA mortgage pools		218		30		26		3
Covered loans		–		–		–		–
Total loans		2,647	$	60		1,830	$	23

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, 2017								December 31, 2016
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total
Residential mortgage loans	$	2,180	$	475	$	–	$	2,655	$	2,248	$	506	$	–	$	2,754
Other retail loans		–		238		–		238		–		278		–		278
Losses reimbursable by the FDIC (a)		–		–		338		338		–		–		381		381
Unamortized changes in FDIC asset (b)		–		–		404		404		–		–		423		423
Covered loans		2,180		713		742		3,635		2,248		784		804		3,836
Foreclosed real estate		–		–		22		22		–		–		26		26
Total covered assets	$	2,180	$	713	$	764	$	3,657	$	2,248	$	784	$	830	$	3,862

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