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Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2019

The composition of the loan portfolio, disaggregated by class and underl

ing specific portfolio type, was as follows:


	September 30, 2019					December 31, 2018
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	99,067		33.6	%	$	96,849		33.8	%
Lease financing		5,587		1.9			5,595		1.9
Total commercial		104,654		35.5			102,444		35.7
Commercial Real Estate
Commercial mortgages		28,664		9.7			28,596		10.0
Construction and development		10,604		3.6			10,943		3.8
Total commercial real estate		39,268		13.3			39,539		13.8
Residential Mortgages
Residential mortgages		58,465		19.9			53,034		18.5
Home equity loans, first liens		10,913		3.7			12,000		4.2
Total residential mortgages		69,378		23.6			65,034		22.7
Credit Card		23,890		8.1			23,363		8.1
Other Retail
Retail leasing		8,463		2.9			8,546		3.0
Home equity and second mortgages		15,453		5.2			16,122		5.6
Revolving credit		2,889		1.0			3,088		1.1
Installment		10,827		3.7			9,676		3.4
Automobile		19,583		6.6			18,719		6.5
Student		233		.1			279		.1
Total other retail		57,448		19.5			56,430		19.7
Total loans	$	294,638		100.0	%	$	286,810		100.0	%

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			Covered Loans			Total Loans
2019
Balance at beginning of period	$	1,464		$	794		$	438		$	1,132		$	638		$	–		$	4,466
Add
Provision for credit losses		101			3			(10	)		212			61			–			367
Deduct
Loans charged-off		91			7			8			248			97			–			451

Less recoveries of loans charged-off		(16	)		(1	)		(11	)		(37	)		(34	)		–			(99	)
Net loans charged-off		75			6			(3	)		211			63			–			352
Balance at end of period	$	1,490		$	791		$	431		$	1,133		$	636		$	–		$	4,481
2018
Balance at beginning of period	$	1,391		$	812		$	436		$	1,082		$	667		$	23		$	4,411
Add
Provision for credit losses		88			(12	)		8			221			41			(3	)		343
Deduct
Loans charged-off		88			1			12			231			96			–			428

Less recoveries of loans charged-off		(22	)		(10	)		(8	)		(25	)		(35	)		–			(100	)
Net loans charged-off		66			(9	)		4			206			61			–			328
Balance at end of period	$	1,413		$	809		$	440		$	1,097		$	647		$	20		$	4,426


Nine Months Ended September 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Covered Loans			Total Loans
2019
Balance at beginning of period	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Add
Provision for credit losses		243			(2	)		(20	)		694			194			–			1,109
Deduct
Loans charged-off		300			11			27			767			283			–			1,388

Less recoveries of loans charged-off		(93	)		(4	)		(23	)		(104	)		(95	)		–			(319	)
Net loans charged-off		207			7			4			663			188			–			1,069
Balance at end of period	$	1,490		$	791		$	431		$	1,133		$	636		$	–		$	4,481
2018
Balance at beginning of period	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417
Add
Provision for credit losses		225			(34	)		6			668			156			(10	)		1,011
Deduct
Loans charged-off		265			6			37			727			283			–			1,318

Less recoveries of loans charged-off		(81	)		(18	)		(22	)		(100	)		(96	)		–			(317	)
Net loans charged-off		184			(12	)		15			627			187			–			1,001
Other changes (a)		–			–			–			–			–			(1	)		(1	)
Balance at end of period	$	1,413		$	809		$	440		$	1,097		$	647		$	20		$	4,426

(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
Allowance Balance at September 30, 2019 Related to
Loans individually evaluated for impairment (a)	$	19	$	3	$	–	$	–	$	–	$	22
TDRs collectively evaluated for impairment		20		4		107		80		12		223
Other loans collectively evaluated for impairment		1,451		784		309		1,053		624		4,221
Loans acquired with deteriorated credit quality		–		–		15		–		–		15
Total allowance for credit losses	$	1,490	$	791	$	431	$	1,133	$	636	$	4,481
Allowance Balance at December 31, 2018 Related to
Loans individually evaluated for impairment (a)	$	16	$	8	$	–	$	–	$	–	$	24
TDRs collectively evaluated for impairment		15		3		126		69		12		225
Other loans collectively evaluated for impairment		1,423		788		314		1,033		618		4,176
Loans acquired with deteriorated credit quality		–		1		15		–		–		16
Total allowance for credit losses	$	1,454	$	800	$	455	$	1,102	$	630	$	4,441

(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
September 30, 2019
Loans individually evaluated for impairment (a)	$	340	$	40	$	–	$	–	$	–	$	380
TDRs collectively evaluated for impairment		178		142		3,168		262		190		3,940
Other loans collectively evaluated for impairment		104,136		39,052		65,950		23,628		57,258		290,024
Loans acquired with deteriorated credit quality		–		34		260		–		–		294
Total loans	$	104,654	$	39,268	$	69,378	$	23,890	$	57,448	$	294,638
December 31, 2018
Loans individually evaluated for impairment (a)	$	262	$	86	$	–	$	–	$	–	$	348
TDRs collectively evaluated for impairment		151		129		3,252		245		183		3,960
Other loans collectively evaluated for impairment		102,031		39,297		61,465		23,118		56,247		282,158
Loans acquired with deteriorated credit quality		–		27		317		–		–		344
Total loans	$	102,444	$	39,539	$	65,034	$	23,363	$	56,430	$	286,810

(a)	Represents loans greater than $5 million classified as nonperforming or TDRs.

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, 2019
Commercial	$	103,782	$	450	$	103	$	319	$	104,654
Commercial real estate		39,126		51		2		89		39,268
Residential mortgages (a)		68,845		167		115		251		69,378
Credit card		23,296		316		278		—		23,890
Other retail		56,785		391		102		170		57,448
Total loans	$	291,834	$	1,375	$	600	$	829	$	294,638
December 31, 2018
Commercial	$	101,844	$	322	$	69	$	209	$	102,444
Commercial real estate		39,354		70		—		115		39,539
Residential mortgages (a)		64,443		181		114		296		65,034
Credit card		22,746		324		293		—		23,363
Other retail		55,722		403		108		197		56,430
Total loans	$	284,109	$	1,300	$	584	$	817	$	286,810

(a)

At September 30, 2019, $391 million of loans 30–89 days past due and $1.7 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 $430 million and $1.7 billion at December 31, 2018, 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, 2019
Commercial	$	102,543	$	1,022	$	1,089	$	2,111	$	104,654
Commercial real estate		38,287		625		356		981		39,268
Residential mortgages (b)		68,960		3		415		418		69,378
Credit card		23,612		–		278		278		23,890
Other retail		57,142		12		294		306		57,448
Total loans	$	290,544	$	1,662	$	2,432	$	4,094	$	294,638
Total outstanding commitments	$	614,479	$	2,297	$	3,076	$	5,373	$	619,852
December 31, 2018
Commercial	$	100,014	$	1,149	$	1,281	$	2,430	$	102,444
Commercial real estate		38,473		584		482		1,066		39,539
Residential mortgages (b)		64,570		1		463		464		65,034
Credit card		23,070		–		293		293		23,363
Other retail		56,101		6		323		329		56,430
Total loans	$	282,228	$	1,740	$	2,842	$	4,582	$	286,810
Total outstanding commitments	$	600,407	$	2,801	$	3,448	$	6,249	$	606,656

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

(b)

At September 30, 2019, $1.7 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 $1.7 billion and $1.6 billion at December 31, 2018, 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, 2019
Commercial	$	583	$	1,183	$	41	$	197
Commercial real estate		234		587		8		–
Residential mortgages		1,573		1,891		74		–
Credit card		262		262		80		–
Other retail		322		412		14		2
Total loans, excluding loans purchased from GNMA mortgage pools		2,974		4,335		217		199
Loans purchased from GNMA mortgage pools		1,690		1,690		34		–
Total	$	4,664	$	6,025	$	251	$	199
December 31, 2018
Commercial	$	467	$	1,006	$	32	$	106
Commercial real estate		279		511		12		2
Residential mortgages		1,709		1,879		86		–
Credit card		245		245		69		–
Other retail		335		418		14		5
Total loans, excluding loans purchased from GNMA mortgage pools		3,035		4,059		213		113
Loans purchased from GNMA mortgage pools		1,639		1,639		41		–
Total	$	4,674	$	5,698	$	254	$	113

(a)	Substantially all loans classified as impaired at September 30, 2019 and December 31, 2018, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans

follows:


	2019				2018
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended September 30
Commercial	$	552	$	4	$	470	$	3
Commercial real estate		232		3		279		4
Residential mortgages		1,597		23		1,779		18
Credit card		260		–		236		1
Other retail		319		3		309		4
Covered Loans		–		–		23		–
Total loans, excluding loans purchased from GNMA mortgage pools		2,960		33		3,096		30
Loans purchased from GNMA mortgage pools		1,644		18		1,666		12
Total	$	4,604	$	51	$	4,762	$	42
Nine Months Ended September 30
Commercial	$	516	$	7	$	510	$	5
Commercial real estate		251		8		263		8
Residential mortgages		1,649		70		1,846		57
Credit card		255		–		234		3
Other retail		323		9		304		12
Covered Loans		–		–		33		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,994		94		3,190		86
Loans purchased from GNMA mortgage pools		1,613		52		1,635		36
Total	$	4,607	$	146	$	4,825	$	122

Summary of Loans Modified as TDRs

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

class:


	2019						2018
(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		886	$	116	$	100		700	$	42	$	33
Commercial real estate		32		23		23		38		123		125
Residential mortgages		117		17		15		144		19		17
Credit card		8,429		46		46		8,450		42		43
Other retail		814		20		19		763		17		16
Covered Loans		–		–		–		3		1		1
Total loans, excluding loans purchased from GNMA mortgage pools		10,278		222		203		10,098		244		235
Loans purchased from GNMA mortgage pools		1,524		211		203		1,649		216		211
Total loans		11,802	$	433	$	406		11,747	$	460	$	446
Nine Months Ended September 30
Commercial		2,622	$	242	$	215		2,047	$	255	$	234
Commercial real estate		76		95		93		97		154		155
Residential mortgages		318		43		41		397		56		53
Credit card		26,018		140		141		24,457		122		124
Other retail		2,029		44		42		1,857		45		43
Covered Loans		–		–		–		3		1		1
Total loans, excluding loans purchased from GNMA mortgage pools		31,063		564		532		28,858		633		610
Loans purchased from GNMA mortgage pools		4,617		629		606		4,785		631		619
Total loans		35,680	$	1,193	$	1,138		33,643	$	1,264	$	1,229

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:


	2019				2018
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		263	$	9		207	$	51
Commercial real estate		8		7		10		2
Residential mortgages		13		1		34		4
Credit card		2,025		10		1,924		9
Other retail		72		1		93		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,381		28		2,268		67
Loans purchased from GNMA mortgage pools		263		33		380		50
Total loans		2,644	$	61		2,648	$	117
Nine Months Ended September 30
Commercial		749	$	18		623	$	63
Commercial real estate		23		17		26		8
Residential mortgages		124		14		148		15
Credit card		6,001		29		5,893		26
Other retail		299		9		240		3
Covered loans		–		–		1		–
Total loans, excluding loans purchased from GNMA mortgage pools		7,196		87		6,931		115
Loans purchased from GNMA mortgage pools		697		93		1,129		148
Total loans		7,893	$	180		8,060	$	263