Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017					December 31, 2016
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	91,212		32.9	%	$	87,928		32.2	%
Lease financing		5,624		2.0			5,458		2.0
Total commercial		96,836		34.9			93,386		34.2
Commercial Real Estate
Commercial mortgages		30,198		10.9			31,592		11.6
Construction and development		11,710		4.2			11,506		4.2
Total commercial real estate		41,908		15.1			43,098		15.8
Residential Mortgages
Residential mortgages		45,412		16.4			43,632		16.0
Home equity loans, first liens		13,384		4.8			13,642		5.0
Total residential mortgages		58,796		21.2			57,274		21.0
Credit Card		20,861		7.6			21,749		7.9
Other Retail
Retail leasing		7,569		2.7			6,316		2.3
Home equity and second mortgages		16,310		5.9			16,369		6.0
Revolving credit		3,209		1.2			3,282		1.2
Installment		8,602		3.1			8,087		3.0
Automobile		17,695		6.4			17,571		6.4
Student		2,060		.7			2,239		.8
Total other retail		55,445		20.0			53,864		19.7
Total loans, excluding covered loans		273,846		98.8			269,371		98.6
Covered Loans		3,437		1.2			3,836		1.4
Total loans	$	277,283		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 June 30,						Six Months Ended June 30,
(Dollars in Millions)	2017			2016			2017			2016
Balance at beginning of period	$	637		$	1,013		$	698		$	957
Accretion		(89	)		(103	)		(179	)		(195	)
Disposals		(28	)		(33	)		(51	)		(54	)
Reclassifications from nonaccretable difference (a)		30			14			83			183
Other		(4	)		–			(5	)		–
Balance at end of period	$	546		$	891		$	546		$	891

(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 June 30, (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
2017
Balance at beginning of period	$	1,429		$	842		$	485		$	955		$	622		$	4,333		$	33		$	4,366
Add
Provision for credit losses		44			5			(22	)		239			85			351			(1	)		350
Deduct
Loans charged-off		104			2			16			227			88			437			–			437
Less recoveries of loans charged-off		(26	)		(11	)		(8	)		(23	)		(29	)		(97	)		–			(97	)
Net loans charged-off		78			(9	)		8			204			59			340			–			340
Other changes (a)		–			–			–			–			–			–			1			1
Balance at end of period	$	1,395		$	856		$	455		$	990		$	648		$	4,344		$	33		$	4,377
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

(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
2017
Balance at beginning of period	$	1,450		$	812		$	510		$	934		$	617		$	4,323		$	34		$	4,357
Add
Provision for credit losses		98			33			(35	)		450			150			696			(1	)		695
Deduct
Loans charged-off		200			5			33			439			177			854			–			854
Less recoveries of loans charged-off		(47	)		(16	)		(13	)		(45	)		(58	)		(179	)		–			(179	)
Net loans charged-off		153			(11	)		20			394			119			675			–			675
Other changes (a)		–			–			–			–			–			–			–			–
Balance at end of period	$	1,395		$	856		$	455		$	990		$	648		$	4,344		$	33		$	4,377
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

(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 June 30, 2017 Related to
Loans individually evaluated for impairment (a)	$	33	$	3	$	–	$	–	$	–	$	36	$	–	$	36
TDRs collectively evaluated for impairment		14		4		151		64		20		253		1		254
Other loans collectively evaluated for impairment		1,348		844		304		926		628		4,050		–		4,050
Loans acquired with deteriorated credit quality		–		5		–		–		–		5		32		37
Total allowance for credit losses	$	1,395	$	856	$	455	$	990	$	648	$	4,344	$	33	$	4,377
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
June 30, 2017
Loans individually evaluated for impairment (a)	$	421	$	62	$	–	$	–	$	–	$	483	$	–	$	483
TDRs collectively evaluated for impairment		166		146		3,780		230		168		4,490		33		4,523
Other loans collectively evaluated for impairment		96,249		41,622		55,016		20,631		55,276		268,794		1,290		270,084
Loans acquired with deteriorated credit quality		–		78		–		–		1		79		2,114		2,193
Total loans	$	96,836	$	41,908	$	58,796	$	20,861	$	55,445	$	273,846	$	3,437	$	277,283
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
June 30, 2017
Commercial	$	96,205	$	258	$	51	$	322	$	96,836
Commercial real estate		41,753		34		2		119		41,908
Residential mortgages (a)		58,022		126		118		530		58,796
Credit card		20,377		254		229		1		20,861
Other retail		54,935		275		77		158		55,445
Total loans, excluding covered loans		271,292		947		477		1,130		273,846
Covered loans		3,214		49		162		12		3,437
Total loans	$	274,506	$	996	$	639	$	1,142	$	277,283
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 June 30, 2017, $240 million of loans 30–89 days past due and $2.1 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
June 30, 2017
Commercial (b)	$	93,770	$	1,455	$	1,611	$	3,066	$	96,836
Commercial real estate		40,404		650		854		1,504		41,908
Residential mortgages (c)		58,101		3		692		695		58,796
Credit card		20,630		–		231		231		20,861
Other retail		55,160		10		275		285		55,445
Total loans, excluding covered loans		268,065		2,118		3,663		5,781		273,846
Covered loans		3,376		–		61		61		3,437
Total loans	$	271,441	$	2,118	$	3,724	$	5,842	$	277,283
Total outstanding commitments	$	569,478	$	3,588	$	5,044	$	8,632	$	578,110
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 June 30, 2017, $784 million of energy loans ($1.7 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 June 30, 2017, $2.1 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 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
June 30, 2017
Commercial	$	656	$	1,133	$	50	$	250
Commercial real estate		281		581		11		1
Residential mortgages		2,158		2,587		127		1
Credit card		230		230		64		–
Other retail		278		474		21		3
Total loans, excluding GNMA and covered loans		3,603		5,005		273		255
Loans purchased from GNMA mortgage pools		1,774		1,774		25		–
Covered loans		41		46		1		–
Total	$	5,418	$	6,825	$	299	$	255
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 June 30, 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
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended June 30
Commercial	$	720	$	1	$	842	$	3
Commercial real estate		272		3		302		3
Residential mortgages		2,182		28		2,452		31
Credit card		229		1		212		1
Other retail		279		3		297		3
Total loans, excluding GNMA and covered loans		3,682		36		4,105		41
Loans purchased from GNMA mortgage pools		1,746		19		1,696		23
Covered loans		38		–		38		1
Total	$	5,466	$	55	$	5,839	$	65
Six Months Ended June 30
Commercial	$	769	$	2	$	756	$	4
Commercial real estate		275		5		314		6
Residential mortgages		2,211		57		2,496		63
Credit card		227		2		211		2
Other retail		279		7		301		6
Total loans, excluding GNMA and covered loans		3,761		73		4,078		81
Loans purchased from GNMA mortgage pools		1,696		37		1,782		48
Covered loans		37		–		38		1
Total	$	5,494	$	110	$	5,898	$	130

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
(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		671	$	62	$	40		495	$	332	$	237
Commercial real estate		41		29		31		20		10		10
Residential mortgages		144		17		16		214		16		17
Credit card		8,146		40		40		6,654		33		32
Other retail		639		15		14		467		7		8
Total loans, excluding GNMA and covered loans		9,641		163		141		7,850		398		304
Loans purchased from GNMA mortgage pools		1,043		141		137		1,501		140		142
Covered loans		3		1		1		17		3		3
Total loans		10,687	$	305	$	279		9,368	$	541	$	449
Six Months Ended June 30
Commercial		1,501	$	199	$	168		1,096	$	492	$	398
Commercial real estate		64		38		39		44		17		17
Residential mortgages		500		57		57		492		48		49
Credit card		17,551		85		86		14,642		71		71
Other retail		1,261		26		23		1,076		18		19
Total loans, excluding GNMA and covered loans		20,877		405		373		17,350		646		554
Loans purchased from GNMA mortgage pools		3,972		528		515		4,369		453		453
Covered loans		7		2		2		20		3		3
Total loans		24,856	$	935	$	890		21,739	$	1,102	$	1,010

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
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended June 30
Commercial		182	$	16		141	$	9
Commercial real estate		10		1		5		1
Residential mortgages		95		10		27		4
Credit card		1,984		8		1,632		7
Other retail		102		1		88		3
Total loans, excluding GNMA and covered loans		2,373		36		1,893		24
Loans purchased from GNMA mortgage pools		139		19		28		4
Covered loans		1		–		1		–
Total loans		2,513	$	55		1,922	$	28
Six Months Ended June 30
Commercial		355	$	24		253	$	11
Commercial real estate		18		3		15		6
Residential mortgages		167		19		58		9
Credit card		4,031		17		3,205		14
Other retail		231		3		166		4
Total loans, excluding GNMA and covered loans		4,802		66		3,697		44
Loans purchased from GNMA mortgage pools		357		49		54		7
Covered loans		1		–		1		–
Total loans		5,160	$	115		3,752	$	51

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, 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	$	2,114	$	446	$	–	$	2,560	$	2,248	$	506	$	–	$	2,754
Other retail loans		–		203		–		203		–		278		–		278
Losses reimbursable by the FDIC (a)		–		–		326		326		–		–		381		381
Unamortized changes in FDIC asset (b)		–		–		348		348		–		–		423		423
Covered loans		2,114		649		674		3,437		2,248		784		804		3,836
Foreclosed real estate		–		–		25		25		–		–		26		26
Total covered assets	$	2,114	$	649	$	699	$	3,462	$	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.