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Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2021

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


	June 30, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	98,232		33.1	%	$	97,315		32.7	%
Lease financing		5,289		1.8			5,556		1.9
Total commercial		103,521		34.9			102,871		34.6
Commercial Real Estate
Commercial mortgages		28,017		9.5			28,472		9.6
Construction and development		10,753		3.6			10,839		3.6
Total commercial real estate		38,770		13.1			39,311		13.2
Residential Mortgages
Residential mortgages		64,168		21.6			66,525		22.4
Home equity loans, first liens		9,198		3.1			9,630		3.2
Total residential mortgages		73,366		24.7			76,155		25.6
Credit Card		21,816		7.3			22,346		7.5
Other Retail
Retail leasing		7,799		2.6			8,150		2.7
Home equity and second mortgages		11,163		3.8			12,472		4.2
Revolving credit		2,628		.9			2,688		.9
Installment		15,632		5.3			13,823		4.6
Automobile		22,070		7.4			19,722		6.6
Student		147		–			169		.1
Total other retail		59,439		20.0			57,024		19.1
Total loans	$	296,912		100.0	%	$	297,707		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 June 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$1,932			$1,532			$539			$1,952			$1,005			$6,960
Add
Provision for credit losses		(67	)		(123	)		(71	)		87			4			(170	)
Deduct
Loans charged-off		58			4			5			192			55			314
Less recoveries of loans charged-off		(31	)		(4	)		(15	)		(44	)		(40	)		(134	)
Net loan charge-offs (recoveries)		27			–			(10	)		148			15			180
Balance at end of period		$1,838			$1,409			$478			$1,891			$ 994			$6,610
2020
Balance at beginning of period		$2,240			$ 841			$412			$2,012			$1,085			$6,590
Add
Provision for credit losses		516			450			218			373			180			1,737
Deduct
Loans charged-off		125			23			3			265			106			522
Less recoveries of loans charged-off		(14	)		(1	)		(6	)		(36	)		(28	)		(85	)
Net loan charge-offs (recoveries)		111			22			(3	)		229			78			437
Balance at end of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890


Six Months Ended June 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2021
Balance at beginning of period		$2,423			$1,544			$573			$2,355			$1,115			$8,010
Add
Provision for credit losses		(502	)		(142	)		(110	)		(172	)		(71	)		(997	)
Deduct
Loans charged-off		144			14			10			382			138			688
Less recoveries of loans charged-off		(61	)		(21	)		(25	)		(90	)		(88	)		(285	)
Net loan charge-offs (recoveries)		83			(7	)		(15	)		292			50			403
Balance at end of period		$1,838			$1,409			$478			$1,891			$ 994			$6,610
2020
Balance at beginning of period		$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		968			612			228			619			303			2,730
Deduct
Loans charged-off		213			23			11			539			227			1,013
Less recoveries of loans charged-off		(28	)		(3	)		(13	)		(76	)		(63	)		(183	)
Net loan charge-offs (recoveries)		185			20			(2	)		463			164			830
Balance at end of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890

(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
June 30, 2021
Commercial	$	103,019		$ 171		$ 40		$ 291		$103,521
Commercial real estate		38,423		32		3		312		38,770
Residential mortgages (a)		72,830		174		118		244		73,366
Credit card		21,506		157		153		–		21,816
Other retail		59,003		203		62		171		59,439
Total loans	$	294,781		$ 737		$376		$1,018		$296,912
December 31, 2020
Commercial	$	102,127		$ 314		$ 55		$ 375		$102,871
Commercial real estate		38,676		183		2		450		39,311
Residential mortgages (a)		75,529		244		137		245		76,155
Credit card		21,918		231		197		–		22,346
Other retail		56,466		318		86		154		57,024
Total loans	$	294,716		$1,290		$477		$1,224		$297,707

(a)

At June 30, 2021, $1.3 billion 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 $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b)

Substantially all nonperforming loans at June 30, 2021 and December 31, 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $4 million and $6 million for the three months ended June 30, 2021 and 2020, respectively, and $7 million and $10 million for the six months ended June 30, 2021 and 2020, 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:


	June 30, 2021										December 31, 2020
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2021		$23,974		$ 453		$ 205		$ 658		$ 24,632		$ –		$ –		$ –		$ –		$ –
Originated in 2020		22,215		981		547		1,528		23,743		34,557		1,335		1,753		3,088		37,645
Originated in 2019		13,662		245		72		317		13,979		17,867		269		349		618		18,485
Originated in 2018		9,217		145		92		237		9,454		12,349		351		176		527		12,876
Originated in 2017		3,874		14		63		77		3,951		5,257		117		270		387		5,644
Originated prior to 2017		3,544		78		56		134		3,678		4,954		128		115		243		5,197
Revolving		23,809		90		185		275		24,084		22,445		299		280		579		23,024
Total commercial		100,295		2,006		1,220		3,226		103,521		97,429		2,499		2,943		5,442		102,871

Commercial real estate
Originated in 2021		5,911		74		693		767		6,678		–		–		–		–		–
Originated in 2020		8,917		167		532		699		9,616		9,446		461		1,137		1,598		11,044
Originated in 2019		8,148		444		790		1,234		9,382		9,514		454		1,005		1,459		10,973
Originated in 2018		4,211		275		431		706		4,917		6,053		411		639		1,050		7,103
Originated in 2017		2,150		94		254		348		2,498		2,650		198		340		538		3,188
Originated prior to 2017		3,763		80		110		190		3,953		4,762		240		309		549		5,311
Revolving		1,515		6		205		211		1,726		1,445		9		238		247		1,692
Total commercial real estate		34,615		1,140		3,015		4,155		38,770		33,870		1,773		3,668		5,441		39,311

Residential mortgages (b)
Originated in 2021		11,717		–		–		–		11,717		–		–		–		–		–
Originated in 2020		20,412		–		5		5		20,417		23,262		1		3		4		23,266
Originated in 2019		10,173		1		18		19		10,192		13,969		1		17		18		13,987
Originated in 2018		4,149		1		22		23		4,172		5,670		1		22		23		5,693
Originated in 2017		5,224		–		19		19		5,243		6,918		1		24		25		6,943
Originated prior to 2017		21,305		3		316		319		21,624		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		72,981		5		380		385		73,366		75,741		6		408		414		76,155

Credit card (c)		21,663		–		153		153		21,816		22,149		–		197		197		22,346

Other retail
Originated in 2021		12,435		–		2		2		12,437		–		–		–		–		–
Originated in 2020		14,505		–		7		7		14,512		17,589		–		7		7		17,596
Originated in 2019		9,163		–		16		16		9,179		11,605		–		23		23		11,628
Originated in 2018		4,844		–		18		18		4,862		6,814		–		27		27		6,841
Originated in 2017		2,509		–		12		12		2,521		3,879		–		22		22		3,901
Originated prior to 2017		2,632		–		17		17		2,649		3,731		–		29		29		3,760
Revolving		12,618		–		131		131		12,749		12,647		–		110		110		12,757
Revolving converted to term		485		–		45		45		530		503		–		38		38		541
Total other retail		59,191		–		248		248		59,439		56,768		–		256		256		57,024
Total loans		$288,745		$3,151		$5,016		$ 8,167		$296,912		$285,957		$4,278		$7,472		$11,750		$297,707
Total outstanding commitments		$636,535		$6,624		$7,069		$13,693		$650,228		$627,606		$8,772		$9,374		$18,146		$645,752

Note:

Year of origination is based on the origination date of a loan or the date when the maturity date, pricing or commitment amount is amended.

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

(b)

At June 30, 2021, $1.7 billion of GNMA loans 90 days or more past due and $1.2 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 $1.8 billion and $1.4 billion at December 31, 2020, 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 for the periods presented by portfolio class:


	2021						2020
(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		526		$ 12		$ 13		1,139		$144		$115
Commercial real estate		30		38		41		38		39		39
Residential mortgages		360		141		140		121		24		24
Credit card		5,050		31		31		6,168		37		38
Other retail		468		18		17		374		9		8
Total loans, excluding loans purchased from GNMA mortgage pools		6,434		240		242		7,840		253		224
Loans purchased from GNMA mortgage pools		478		67		69		1,009		142		138
Total loans		6,912		$307		$311		8,849		$395		$362
Six Months Ended June 30
Commercial		1,230		$ 87		$ 73		2,138		$243		$216
Commercial real estate		86		124		112		65		60		60
Residential mortgages		696		245		244		211		34		34
Credit card		10,836		64		65		14,583		83		85
Other retail		1,793		55		49		1,029		24		22
Total loans, excluding loans purchased from GNMA mortgage pools		14,641		575		543		18,026		444		417
Loans purchased from GNMA mortgage pools		1,037		154		158		2,913		408		398
Total loans		15,678		$729		$701		20,939		$852		$815

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) for the periods presented, that were modified as TDRs within 12 months previous to default:


	2021				2020
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended June 30
Commercial		327		$ 8		330		$ 8
Commercial real estate		5		1		12		6
Residential mortgages		12		1		5		1
Credit card		1,805		11		1,736		9
Other retail		191		3		82		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,340		24		2,165		25
Loans purchased from GNMA mortgage pools		43		6		51		7
Total loans		2,383		$30		2,216		$ 32
Six Months Ended June 30
Commercial		612		$24		617		$ 28
Commercial real estate		12		6		28		16
Residential mortgages		27		3		18		2
Credit card		3,569		20		3,806		19
Other retail		471		8		190		2
Total loans, excluding loans purchased from GNMA mortgage pools		4,691		61		4,659		67
Loans purchased from GNMA mortgage pools		73		10		355		48
Total loans		4,764		$71		5,014		$115