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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2020

The composition of the loan portfolio, disaggregated by class and underlying specific portfolio type, was as follows:


	March 31, 2020					December 31, 2019
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	120,670		37.9	%	$	98,168		33.2	%
Lease financing		5,647		1.8			5,695		1.9
Total commercial		126,317		39.7			103,863		35.1
Commercial Real Estate
Commercial mortgages		30,124		9.5			29,404		9.9
Construction and development		10,856		3.4			10,342		3.5
Total commercial real estate		40,980		12.9			39,746		13.4
Residential Mortgages
Residential mortgages		60,708		19.1			59,865		20.2
Home equity loans, first liens		10,467		3.3			10,721		3.6
Total residential mortgages		71,175		22.4			70,586		23.8
Credit Card		22,781		7.1			24,789		8.4
Other Retail
Retail leasing		8,495		2.7			8,490		2.9
Home equity and second mortgages		14,836		4.6			15,036		5.1
Revolving credit		2,786		.9			2,899		1.0
Installment		11,540		3.6			11,038		3.7
Automobile		19,189		6.0			19,435		6.5
Student		206		.1			220		.1
Total other retail		57,052		17.9			57,118		19.3
Total loans	$	318,305		100.0	%	$	296,102		100.0	%

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
Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	4,491
Add
Change in accounting principle (a)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		452			162			10			246			123			993
Deduct
Loans charged-off		88			—			8			274			121			491
Less recoveries of loans charged-off		(14	)		(2	)		(7	)		(40	)		(35	)		(98	)
Net loans charged-off		74			(2	)		1			234			86			393
Balance at March 31, 2020	$	2,240		$	841		$	412		$	2,012		$	1,085		$	6,590
Balance at December 31, 2018	$	1,454		$	800		$	455		$	1,102		$	630		$	4,441
Add
Provision for credit losses		64			12			(7	)		238			70			377
Deduct
Loans charged-off		111			1			8			257			96			473

Less recoveries of loans charged-off		(38	)		(1	)		(5	)		(32	)		(30	)		(106	)
Net loans charged-off		73			–			3			225			66			367
Balance at March 31, 2019	$	1,445		$	812		$	445		$	1,115		$	634		$	4,451

(a)	Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

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 (b)		Total
March 31, 2020
Commercial	$	125,576	$	352	$	80	$	309	$	126,317
Commercial real estate		40,795		82		2		101		40,980
Residential mortgages (a)		70,660		164		108		243		71,175
Credit card		22,194		293		294		–		22,781
Other retail		56,408		387		95		162		57,052
Total loans	$	315,633	$	1,278	$	579	$	815	$	318,305
December 31, 2019
Commercial	$	103,273	$	307	$	79	$	204	$	103,863
Commercial real estate		39,627		34		3		82		39,746
Residential mortgages (a)		70,071		154		120		241		70,586
Credit card		24,162		321		306		–		24,789
Other retail		56,463		393		97		165		57,118
Total loans	$	293,596	$	1,209	$	605	$	692	$	296,102

(a)

At March 31, 2020, $396 million of loans 30–89 days past due and $1.6 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 $428 million and $1.7 billion at December 31, 2019, respectively.

(b)	Substantially all nonperforming loans at March 31, 2020 and December 31, 2019, had an associated allowance for credit losses. The Company recognized $4 million and $5 million of interest income on nonperforming loans for the three months ended March 31, 2020 and 2019, 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:


	March 31, 2020										December 31, 2019
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2020	$	13,238	$	392	$	85	$	477	$	13,715	$	–	$	–	$	–	$	–	$	–
Originated in 2019		35,323		846		275		1,121		36,444		33,550		174		222		396		33,946
Originated in 2018		23,843		991		369		1,360		25,203		21,394		420		136		556		21,950
Originated in 2017		10,983		318		192		510		11,493		10,464		165		97		262		10,726
Originated in 2016		5,236		85		37		122		5,358		4,984		10		37		47		5,031
Originated prior to 2016		4,745		148		125		273		5,018		5,151		86		96		182		5,333
Revolving		27,904		911		271		1,182		29,086		26,307		292		278		570		26,877
Total commercial		121,272		3,691		1,354		5,045		126,317		101,850		1,147		866		2,013		103,863

Commercial real estate
Originated in 2020		2,824		339		20		359		3,183		–		–		–		–		–
Originated in 2019		12,058		705		208		913		12,971		12,976		108		108		216		13,192
Originated in 2018		8,367		705		100		805		9,172		9,455		71		56		127		9,582
Originated in 2017		4,721		568		98		666		5,387		5,863		99		64		163		6,026
Originated in 2016		3,242		215		74		289		3,531		3,706		117		60		177		3,883
Originated prior to 2016		4,314		189		134		323		4,637		4,907		78		101		179		5,086
Revolving		2,072		23		4		27		2,099		1,965		11		1		12		1,977
Total commercial real estate		37,598		2,744		638		3,382		40,980		38,872		484		390		874		39,746

Residential mortgages (b)
Originated in 2020		5,108		–		–		–		5,108		–		–		–		–		–
Originated in 2019		17,909		–		3		3		17,912		18,819		2		1		3		18,822
Originated in 2018		8,211		–		11		11		8,222		9,204		–		11		11		9,215
Originated in 2017		8,961		–		17		17		8,978		9,605		–		21		21		9,626
Originated in 2016		10,779		–		29		29		10,808		11,378		–		29		29		11,407
Originated prior to 2016		19,821		–		326		326		20,147		21,168		–		348		348		21,516
Total residential mortgages		70,789		–		386		386		71,175		70,174		2		410		412		70,586

Credit card (c)		22,487		–		294		294		22,781		24,483		–		306		306		24,789

Other retail
Originated in 2020		4,172		–		1		1		4,173		–		–		–		–		–
Originated in 2019		14,747		–		14		14		14,761		15,907		–		11		11		15,918
Originated in 2018		9,308		–		24		24		9,332		10,131		–		23		23		10,154
Originated in 2017		6,836		–		26		26		6,862		7,907		–		28		28		7,935
Originated in 2016		3,096		–		16		16		3,112		3,679		–		20		20		3,699
Originated prior to 2016		2,866		–		22		22		2,888		3,274		–		28		28		3,302
Revolving		15,336		8		125		133		15,469		15,509		10		138		148		15,657
Revolving converted to term		442		–		33		33		455		418		–		35		35		453
Total other retail		56,783		8		261		269		57,052		56,825		10		283		293		57,118
Total loans	$	308,929	$	6,443	$	2,933	$	9,376	$	318,305	$	292,204	$	1,643	$	2,255	$	3,898	$	296,102
Total outstanding commitments	$	623,649	$	8,604	$	3,560	$	12,164	$	635,813	$	619,224	$	2,451	$	2,873	$	5,324	$	624,548

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

(b)

At March 31, 2020, $1.6 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 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.

(c)	All credit card loans are considered revolving loans.

Summary of Loans Modified as TDRs

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


	2020						2019
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		999	$	99	$	101		913	$	36	$	29
Commercial real estate		27		21		21		20		47		46
Residential mortgages		90		10		10		96		14		13
Credit card		8,415		46		47		9,648		50		51
Other retail		655		15		14		573		11		10
Total loans, excluding loans purchased from GNMA mortgage pools		10,186		191		193		11,250		158		149
Loans purchased from GNMA mortgage pools		1,904		266		260		1,538		203		195
Total loans		12,090	$	457	$	453		12,788	$	361	$	344

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:


	2020				2019
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		287	$	20		234	$	5
Commercial real estate		16		10		8		6
Residential mortgages		13		1		96		10
Credit card		2,070		10		2,054		9
Other retail		108		1		147		7
Total loans, excluding loans purchased from GNMA mortgage pools		2,494		42		2,539		37
Loans purchased from GNMA mortgage pools		304		41		124		17
Total loans		2,798	$	83		2,663	$	54