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


	September 30, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	95,876		32.2	%	$	97,315		32.7	%
Lease financing		5,137		1.8			5,556		1.9
Total commercial		101,013		34.0			102,871		34.6
Commercial Real Estate
Commercial mortgages		28,029		9.4			28,472		9.6
Construction and development		10,779		3.6			10,839		3.6
Total commercial real estate		38,808		13.0			39,311		13.2
Residential Mortgages
Residential mortgages		65,941		22.2			66,525		22.4
Home equity loans, first liens		9,013		3.0			9,630		3.2
Total residential mortgages		74,954		25.2			76,155		25.6
Credit Card		22,137		7.4			22,346		7.5
Other Retail
Retail leasing		7,505		2.5			8,150		2.7
Home equity and second mortgages		10,718		3.6			12,472		4.2
Revolving credit		2,682		.9			2,688		.9
Installment		16,166		5.5			13,823		4.6
Automobile		23,488		7.9			19,722		6.6
Student		137		–			169		.1
Total other retail		60,696		20.4			57,024		19.1
Total loans	$	297,608		100.0	%	$	297,707		100.0	%

The Company had loans of $89.8 billion at September 30, 2021, and $96.1 billion at December 31, 2020, pledged at the Federal Home Loan Bank, and loans of $73.1 billion at September 30, 2021, and $67.8 billion at December 31, 2020, pledged at the Federal Reserve Bank.

Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and costs, and any partial charge-offs recorded. Net unearned interest and deferred fees and costs amounted to $567 million at September 30, 2021 and $763 million at December 31, 2020. All purchased loans are recorded at fair value at the date of purchase. Beginning January 1, 2020, the Company evaluates purchased loans for more-than-insignificant deterioration at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered purchased credit deteriorated loans. All other purchased loans are considered

non-purchased

credit deteriorated loans.

Allowance for Credit Losses

Beginning January 1, 2020, the allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of uncertainties that exist. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions.

The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rate, real estate prices, gross domestic product levels and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency

status, collateral type and available valuation information, consideration of

end-of-term

losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that would affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously

charged-off

or expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate.

The allowance recorded for Troubled Debt Restructuring (“TDR”) loans in the consumer lending segment is determined on a homogenous pool basis utilizing expected cash flows discounted using the original effective interest rate of the pool. TDRs generally do not include loan modifications granted to customers resulting directly from the economic effects of the

COVID-19

pandemic, who were otherwise in current payment status. The expected cash flows on TDR loans consider subsequent payment defaults since modification, the borrower’s ability to pay under the restructured terms, and the timing and amount of payments. The allowance for collateral-dependent loans in the consumer lending segment is determined based on the fair value of the collateral less costs to sell. With respect to the commercial lending segment, TDRs may be collectively evaluated for impairment where observed performance history, including defaults, is a primary driver of the loss allocation. For commercial TDRs individually evaluated for impairment, attributes of the borrower are the primary factors in determining the allowance for credit losses. However, historical loss experience is also incorporated into the allowance methodology applied to this category of loans.

Beginning January 1, 2020, when a loan portfolio is purchased, the acquired loans are divided into those considered purchased with more than insignificant credit deterioration (“PCD”) and those not considered purchased with more than insignificant credit deterioration. An allowance is established for each population and considers product mix, risk characteristics of the portfolio, bankruptcy experience, delinquency status and refreshed LTV ratios when possible. The allowance established for purchased loans not considered PCD is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans. Any subsequent increases and decreases in the allowance related to purchased loans, regardless of PCD status, are recognized through provision expense, with charge-offs charged to the allowance. The Company did not have a material amount of PCD loans included in its loan portfolio at September 30, 2021.

The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above, are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio.

The Company also assesses the credit risk associated with

off-balance

sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for

off-balance

sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments.

Prior to January 1, 2020, the allowance for credit losses was established based on an incurred loss model. The allowance recorded for loans in the commercial lending segment was based on the migration analysis of commercial loans and actual loss experience. The allowance recorded for loans in the consumer lending segment was determined on a homogenous pool basis and primarily included consideration of delinquency status and historical losses. In addition to the amounts determined under the methodologies described above, management also considered the potential impact of qualitative factors.

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			Total Loans
2021
Balance at beginning of period		$1,838			$1,409			$478			$1,891			$ 994			$6,610
Add
Provision for credit losses		(75	)		(104	)		3			(23	)		36			(163	)
Deduct
Loans charged-off		40			14			3			154			55			266
Less recoveries of loans charged-off		(26	)		(1	)		(13	)		(43	)		(36	)		(119	)
Net loan charge-offs (recoveries)		14			13			(10	)		111			19			147
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
2020
Balance at beginning of period		$2,645			$1,269			$633			$2,156			$1,187			$7,890
Add
Provision for credit losses		20			263			(49	)		369			32			635
Deduct
Loans charged-off		193			89			4			236			89			611
Less recoveries of loans charged-off		(15	)		(6	)		(7	)		(35	)		(33	)		(96	)
Net loan charge-offs (recoveries)		178			83			(3	)		201			56			515
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010


Nine Months Ended September 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		(577	)		(246	)		(107	)		(195	)		(35	)		(1,160	)
Deduct
Loans charged-off		184			28			13			536			193			954
Less recoveries of loans charged-off		(87	)		(22	)		(38	)		(133	)		(124	)		(404	)
Net loan charge-offs (recoveries)		97			6			(25	)		403			69			550
Balance at end of period		$1,749			$1,292			$491			$1,757			$1,011			$6,300
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		988			875			179			988			335			3,365
Deduct
Loans charged-off		406			112			15			775			316			1,624
Less recoveries of loans charged-off		(43	)		(9	)		(20	)		(111	)		(96	)		(279	)
Net loan charge-offs (recoveries)		363			103			(5	)		664			220			1,345
Balance at end of period		$2,487			$1,449			$587			$2,324			$1,163			$8,010

(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.

The decrease in the allowance for credit losses from December 31, 2020 to September 30, 2021 primarily reflected factors affecting economic conditions during the first nine months of 2021, including the enactment of additional benefits from government stimulus programs and broad vaccine availability in the United States that has reduced the risks associated with

COVID-19,

contributing to an economic recovery and strong portfolio credit performance. Other factors considered include concerns around inflationary pressures, new virus variants, sustainability of asset values and borrower liquidity, along with the lack of a clear path to government funding.

Credit Quality

The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company.

For all loan portfolio classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of cont

actually required payments not made (for example, two missed payments is considered 30 days delinquent). When a loan is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period.

Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. Commercial lending segment loans are generally fully or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is placed on nonaccrual.

Consumer lending segment loans are generally

charged-off

at a specific number of days or payments past due. Residential mortgages and other retail loans secured by

1-4

family properties are generally charged down to the fair

value of the collateral securing the loan, less costs to sell, at 180 days past due. Residential mortgage loans and lines in a first lien position are placed on nonaccrual status in instances where a partial

charge-off

occurs unless the loan is well secured and in the process of collection. Residential mortgage loans and lines in a junior lien position secured by

1-4

family properties are placed on nonaccrual status at 120 days past due or when they are behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is

charged-off.

Credit cards are

charged-off

at 180 days past due. Other retail loans not secured by

1-4

family properties are

charged-off

at 120 days past due; and revolving consumer lines are

charged-off

at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to

charge-off.

Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual.

For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt; or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial

charge-off

may be returned to accrual status if all principal and interest (including amounts previously

charged-off)

is expected to be collected and the loan is current.

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
September 30, 2021
Commercial	$	100,595		$ 163		$ 39		$ 216		$101,013
Commercial real estate		38,459		32		21		296		38,808
Residential mortgages (a)		74,450		153		114		237		74,954
Credit card		21,807		183		147		–		22,137
Other retail		60,224		251		64		157		60,696
Total loans	$	295,535		$ 782		$385		$ 906		$297,608
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 September 30, 2021, $946 million of loans 30–89 days past due and $1.5 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 September 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 $9 million for the three months ended September 30, 2021 and 2020, respectively, and $11 million and $19 million for the nine months ended September 30, 2021 and 2020, respectively.

At September 30, 2021, the amount of foreclosed residential real estate held by the Company, and included in other real estate owned (“OREO”), was $17 million, compared with $23 million at December 31, 2020. These amounts excluded $19 million and $33 million at September 30, 2021 and December 31, 2020, respectively, of foreclosed residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure at September 30, 2021 and December 31, 2020, was $778 million and $1.0 billion, respectively, of which $620 million and $812 million, respectively, related to loans 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.

The Company classifies its loan portfolio classes using internal credit quality ratings on a quarterly basis. These ratings include pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those loans that have a potential weakness deserving management’s close attention. Classified loans are those loans where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans.

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:


	September 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		$ 32,826		$ 346		$ 277		$ 623		$ 33,449		$ –		$ –		$ –		$ –		$ –
Originated in 2020		17,202		637		252		889		18,091		34,557		1,335		1,753		3,088		37,645
Originated in 2019		11,851		198		63		261		12,112		17,867		269		349		618		18,485
Originated in 2018		6,853		77		51		128		6,981		12,349		351		176		527		12,876
Originated in 2017		3,213		14		53		67		3,280		5,257		117		270		387		5,644
Originated prior to 2017		3,373		30		40		70		3,443		4,954		128		115		243		5,197
Revolving		23,204		353		100		453		23,657		22,445		299		280		579		23,024
Total commercial		98,522		1,655		836		2,491		101,013		97,429		2,499		2,943		5,442		102,871

Commercial real estate
Originated in 2021		9,456		50		772		822		10,278		–		–		–		–		–
Originated in 2020		8,238		119		435		554		8,792		9,446		461		1,137		1,598		11,044
Originated in 2019		7,382		298		694		992		8,374		9,514		454		1,005		1,459		10,973
Originated in 2018		3,662		142		330		472		4,134		6,053		411		639		1,050		7,103
Originated in 2017		1,943		25		150		175		2,118		2,650		198		340		538		3,188
Originated prior to 2017		3,239		26		103		129		3,368		4,762		240		309		549		5,311
Revolving		1,556		1		187		188		1,744		1,445		9		238		247		1,692
Total commercial real estate		35,476		661		2,671		3,332		38,808		33,870		1,773		3,668		5,441		39,311

Residential mortgages (b)
Originated in 2021		21,045		–		–		–		21,045		–		–		–		–		–
Originated in 2020		18,043		1		5		6		18,049		23,262		1		3		4		23,266
Originated in 2019		8,508		1		18		19		8,527		13,969		1		17		18		13,987
Originated in 2018		3,492		–		21		21		3,513		5,670		1		22		23		5,693
Originated in 2017		4,494		–		21		21		4,515		6,918		1		24		25		6,943
Originated prior to 2017		19,002		–		302		302		19,304		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		74,585		2		367		369		74,954		75,741		6		408		414		76,155

Credit card (c)		21,990		–		147		147		22,137		22,149		–		197		197		22,346

Other retail
Originated in 2021		17,248		–		3		3		17,251		–		–		–		–		–
Originated in 2020		13,318		–		8		8		13,326		17,589		–		7		7		17,596
Originated in 2019		8,300		–		16		16		8,316		11,605		–		23		23		11,628
Originated in 2018		4,332		–		16		16		4,348		6,814		–		27		27		6,841
Originated in 2017		2,130		–		11		11		2,141		3,879		–		22		22		3,901
Originated prior to 2017		2,259		–		16		16		2,275		3,731		–		29		29		3,760
Revolving		12,400		–		123		123		12,523		12,647		–		110		110		12,757
Revolving converted to term		473		–		43		43		516		503		–		38		38		541
Total other retail		60,460		–		236		236		60,696		56,768		–		256		256		57,024
Total loans		$291,033		$2,318		$4,257		$ 6,575		$297,608		$285,957		$4,278		$7,472		$11,750		$297,707
Total outstanding commitments		$645,955		$4,606		$6,342		$10,948		$656,903		$627,606		$8,772		$9,374		$18,146		$645,752

Note:

Year of origination is based on the origination date of a loan, or for existing loans 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 September 30, 2021, $1.5 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.

Troubled Debt Restructurings

In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties

in the near-term. Concessionary modifications are classified as TDRs unless the modification results in only an insignificant delay in payments to be received. The Company recognizes interest on TDRs if the borrower complies with the revised terms and conditions as agreed upon with the Company and has demonstrated repayment performance at a level commensurate with the modified terms over several payment cycles, which is generally six months or greater. To the extent a previous restructuring was insignificant, the Company considers the cumulative effect of past restructurings related to the receivable when determining whether a current restructuring is a TDR.

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 September 30
Commercial		506		$ 46		$ 47		699		$ 262		$ 159
Commercial real estate		14		12		13		51		105		81
Residential mortgages		171		54		54		374		108		108
Credit card		6,656		38		38		4,699		27		27
Other retail		382		9		9		508		26		26
Total loans, excluding loans purchased from GNMA mortgage pools		7,729		159		161		6,331		528		401
Loans purchased from GNMA mortgage pools		802		113		118		735		106		105
Total loans		8,531		$ 272		$279		7,066		$ 634		$ 506
Nine Months Ended September 30
Commercial		1,736		$ 133		$120		2,837		$ 505		$ 375
Commercial real estate		100		136		125		116		165		141
Residential mortgages		867		299		298		585		142		142
Credit card		17,492		102		103		19,282		110		112
Other retail		2,175		64		58		1,537		50		48
Total loans, excluding loans purchased from GNMA mortgage pools		22,370		734		704		24,357		972		818
Loans purchased from GNMA mortgage pools		1,839		267		276		3,648		514		503
Total loans		24,209		$1,001		$980		28,005		$1,486		$1,321

Residential mortgages, home equity and second mortgages, and loans purchased from GNMA mortgage pools in the table above include trial period arrangements offered to customers during the periods presented. The post-modification balances for these loans reflect the current outstanding balance until a permanent modification is made. In addition, the post-modification balances typically include capitalization of unpaid accrued interest and/or fees under the various modification programs. At September 30, 2021, 5 residential mortgages, 2 home equity and second mortgage loans and 43 loans purchased from GNMA mortgage pools with outstanding balances of less than $1 million, less than $1 million and $5 million, respectively, were in a trial period and have estimated post-modification balances of less than $1 million, less than $1 million and $5 million, respectively, assuming permanent modification occurs at the end of the trial period.

The Company has implemented certain restructuring programs that may result in TDRs. However, many of the Company’s TDRs are also determined on a

case-by-case

basis in connection with ongoing loan collection processes.

For the commercial lending segment, modifications generally result in the Company working with borrowers on a

case-by-case

basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate, which may not be deemed a market interest rate. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may waive contractual principal. The Company classifies all of the above concessions as TDRs to the extent the Company determines that the borrower is experiencing financial difficulty.

Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments by providing loan concessions. These concessions may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In most instances, participation in residential mortgage loan restructuring programs requires the customer to complete a short-term trial period. A permanent loan modification is

contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. The Company reports loans in a trial period arrangement as TDRs and continues to report them as TDRs after the trial period.

Credit card and other retail loan TDRs are generally part of distinct restructuring programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates.

In addition, the Company considers secured loans to consumer borrowers that have debt discharged through bankruptcy where the borrower has not reaffirmed the debt to be TDRs.

Loan modifications or concessions granted to borrowers resulting directly from the effects of the

COVID-19

pandemic, who were otherwise in current payment status, are generally not considered to be TDRs.

As of September 30, 2021 and December 31, 2020, approximately

$3.0

billion and $10.1 billion, respectively, of loan modifications included on the Company’s consolidated balance sheet related to borrowers impacted by the COVID-19 pandemic, consisting primarily of payment deferrals.

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 September 30
Commercial		244		$ 5		305		$ 21
Commercial real estate		4		1		5		8
Residential mortgages		20		2		5		2
Credit card		2,069		12		1,363		8
Other retail		124		2		55		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,461		22		1,733		40
Loans purchased from GNMA mortgage pools		29		5		72		9
Total loans		2,490		$27		1,805		$ 49
Nine Months Ended September 30
Commercial		856		$29		922		$ 49
Commercial real estate		16		7		33		24
Residential mortgages		47		5		23		4
Credit card		5,638		32		5,169		27
Other retail		595		10		245		3
Total loans, excluding loans purchased from GNMA mortgage pools		7,152		83		6,392		107
Loans purchased from GNMA mortgage pools		102		15		427		57
Total loans		7,254		$98		6,819		$164

In addition to the defaults in the table above, the Company had a total of 10 and 45 residential mortgage loans, home equity and second mortgage loans and loans purchased from GNMA mortgage pools for the three months and nine months ended September 30, 2021, respectively, where borrowers did not successfully complete the trial period arrangement and, therefore, are no longer eligible for a permanent modification under the applicable modification program. These loans had aggregate outstanding balances of $1 million and $7 million for the three months and nine months ended September 30, 2021, respectively.

As of September 30, 2021, the Company had $158 million of commitments to lend additional funds to borrowers whose terms of their outstanding owed balances have been modified in TDRs.