Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2022

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


	June 30, 2022					December 31, 2021
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	121,130		36.4	%	$	106,912		34.3	%
Lease financing		4,853		1.5			5,111		1.6
Total commercial		125,983		37.9			112,023		35.9
Commercial Real Estate
Commercial mortgages		29,864		9.0			28,757		9.2
Construction and development		9,889		3.0			10,296		3.3
Total commercial real estate		39,753		12.0			39,053		12.5
Residential Mortgages
Residential mortgages		73,522		22.1			67,546		21.6
Home equity loans, first liens		8,592		2.6			8,947		2.9
Total residential mortgages		82,114		24.7			76,493		24.5
Credit Card		23,697		7.1			22,500		7.2
Other Retail
Retail leasing		6,490		2.0			7,256		2.3
Home equity and second mortgages		10,973		3.3			10,446		3.4
Revolving credit		2,764		.8			2,750		.9
Installment		16,656		5.0			16,514		5.3
Automobile		23,830		7.2			24,866		8.0
Student		109		–			127		–
Total other retail		60,822		18.3			61,959		19.9
Total loans	$	332,369		100.0	%	$	312,028		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
2022
Balance at beginning of period		$1,836			$1,074			$600			$1,639			$ 956			$6,105
Add
Provision for credit losses		90			(95	)		49			225			42			311
Deduct
Loans charged-off		53			9			2			162			50			276
Less recoveries of loans charged-off		(23	)		(3	)		(11	)		(44	)		(34	)		(115	)
Net loan charge-offs (recoveries)		30			6			(9	)		118			16			161
Balance at end of period		$1,896			$ 973			$658			$1,746			$ 982			$6,255
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


Six Months Ended June 30 (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans
2022
Balance at beginning of period		$1,849			$1,123			$565			$1,673			$ 945			$6,155
Add
Provision for credit losses		109			(149	)		78			303			82			423
Deduct
Loans charged-off		108			10			7			320			111			556
Less recoveries of loans charged-off		(46	)		(9	)		(22	)		(90	)		(66	)		(233	)
Net loan charge-offs (recoveries)		62			1			(15	)		230			45			323
Balance at end of period		$1,896			$ 973			$658			$1,746			$ 982			$6,255
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

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, 2022
Commercial	$	125,490		$ 254		$ 91		$148		$125,983
Commercial real estate		39,519		24		4		206		39,753
Residential mortgages (a)		81,689		100		102		223		82,114
Credit card		23,333		200		164		–		23,697
Other retail		60,376		236		62		148		60,822
Total loans	$	330,407		$ 814		$423		$725		$332,369
December 31, 2021
Commercial	$	111,270		$ 530		$49		$174		$112,023
Commercial real estate		38,678		80		11		284		39,053
Residential mortgages (a)		75,962		124		181		226		76,493
Credit card		22,142		193		165		–		22,500
Other retail		61,468		275		66		150		61,959
Total loans	$	309,520		$1,202		$472		$834		$312,028

(a)

At June 30, 2022, $

642

million of loans 30–89 days past due and $

1.7

billion of loans 90 days or more past due purchased

and loans that could be purchased

from Government National Mortgage Association (“GNMA”) mortgage pools

under delinquent loan repurchase options

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 $

791

million and $

1.5

billion at December 31, 2021, respectively.

(b)

Substantially all nonperforming loans at June 30, 2022 and December 31, 2021, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $

million and $

million for the three months ended June 30, 2022 and 2021, respectively, and $

million and $

million for the six months ended June 30, 2022 and 2021, 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, 2022										December 31, 2021
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2022		$ 32,672		$ 52		$ 142		$ 194		$ 32,866		$ –		$ –		$ –		$ –		$ –
Originated in 2021		40,532		298		110		408		40,940		51,155		387		287		674		51,829
Originated in 2020		9,809		11		292		303		10,112		14,091		304		133		437		14,528
Originated in 2019		6,624		6		61		67		6,691		10,159		151		54		205		10,364
Originated in 2018		3,313		3		20		23		3,336		5,122		3		36		39		5,161
Originated prior to 2018		3,902		18		38		56		3,958		4,923		30		81		111		5,034
Revolving (b)		27,628		277		175		452		28,080		24,722		268		117		385		25,107
Total commercial		124,480		665		838		1,503		125,983		110,172		1,143		708		1,851		112,023

Commercial real estate
Originated in 2022		6,689		148		449		597		7,286		–		–		–		–		–
Originated in 2021		11,992		63		452		515		12,507		13,364		6		990		996		14,360
Originated in 2020		6,570		16		181		197		6,767		7,459		198		263		461		7,920
Originated in 2019		5,009		140		340		480		5,489		6,368		251		610		861		7,229
Originated in 2018		2,348		29		211		240		2,588		2,996		29		229		258		3,254
Originated prior to 2018		3,438		19		143		162		3,600		4,473		55		224		279		4,752
Revolving		1,511		–		5		5		1,516		1,494		1		43		44		1,538
Total commercial real estate		37,557		415		1,781		2,196		39,753		36,154		540		2,359		2,899		39,053

Residential mortgages (c)
Originated in 2022		12,396		–		–		–		12,396		–		–		–		–		–
Originated in 2021		29,446		–		3		3		29,449		29,882		–		3		3		29,885
Originated in 2020		14,384		–		10		10		14,394		15,948		1		8		9		15,957
Originated in 2019		5,834		–		24		24		5,858		6,938		–		36		36		6,974
Originated in 2018		2,383		–		18		18		2,401		2,889		–		30		30		2,919
Originated prior to 2018		17,328		–		288		288		17,616		20,415		–		342		342		20,757
Revolving		–		–		–		–		–		1		–		–		–		1
Total residential mortgages		81,771		–		343		343		82,114		76,073		1		419		420		76,493

Credit card (d)		23,532		–		165		165		23,697		22,335		–		165		165		22,500

Other retail
Originated in 2022		7,650		–		1		1		7,651		–		–		–		–		–
Originated in 2021		18,825		–		8		8		18,833		22,455		–		6		6		22,461
Originated in 2020		9,981		–		10		10		9,991		12,071		–		9		9		12,080
Originated in 2019		5,476		–		13		13		5,489		7,223		–		17		17		7,240
Originated in 2018		2,204		–		10		10		2,214		3,285		–		14		14		3,299
Originated prior to 2018		2,626		–		18		18		2,644		3,699		–		24		24		3,723
Revolving		13,381		–		113		113		13,494		12,532		–		112		112		12,644
Revolving converted to term		464		–		42		42		506		472		–		40		40		512
Total other retail		60,607		–		215		215		60,822		61,737		–		222		222		61,959
Total loans		$327,947		$1,080		$3,342		$4,422		$332,369		$306,471		$1,684		$3,873		$5,557		$312,028
Total outstanding commitments		$702,561		$2,021		$4,851		$6,872		$709,433		$662,363		$3,372		$5,684		$9,056		$671,419

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)	Includes an immaterial amount of revolving converted to term loans.

(c)

At June 30, 2022, $1.7 billion of GNMA loans 90 days or more past due and $965 million 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 $1.5 billion and $1.1 billion at December 31, 2021, respectively.

(d)	Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term 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:


	2022						2021
(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		506		$ 50		$ 41		526		$ 12		$ 13
Commercial real estate		28		11		9		30		38		41
Residential mortgages		366		106		106		360		141		140
Credit card		8,696		48		49		5,050		31		31
Other retail		756		24		20		468		18		17
Total loans, excluding loans purchased from GNMA mortgage pools		10,352		239		225		6,434		240		242
Loans purchased from GNMA mortgage pools		353		47		50		478		67		69
Total loans		10,705		$ 286		$275		6,912		$ 307		$ 311

Six Months Ended June 30
Commercial		1,015		$ 88		$ 73		1,230		$ 87		$ 73
Commercial real estate		37		22		19		86		124		112
Residential mortgages		1,206		334		332		696		245		244
Credit card		18,035		98		99		10,836		64		65
Other retail		1,484		61		57		1,793		55		49
Total loans, excluding loans purchased from GNMA mortgage pools		21,777		603		580		14,641		575		543
Loans purchased from GNMA mortgage pools		743		102		105		1,037		154		158
Total loans		22,520		$ 705		$685		15,678		$ 729		$ 701

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:


	2022				2021
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended June 30
Commercial		175		$ 3		327		$ 8
Commercial real estate		2		1		5		1
Residential mortgages		79		7		12		1
Credit card		1,727		9		1,805		11
Other retail		60		1		191		3
Total loans, excluding loans purchased from GNMA mortgage pools		2,043		21		2,340		24
Loans purchased from GNMA mortgage pools		120		17		43		6
Total loans		2,163		$38		2,383		$ 30

Six Months Ended June 30
Commercial		389		$ 6		612		$ 24
Commercial real estate		5		2		12		6
Residential mortgages		113		10		27		3
Credit card		3,361		18		3,569		20
Other retail		143		2		471		8
Total loans, excluding loans purchased from GNMA mortgage pools		4,011		38		4,691		61
Loans purchased from GNMA mortgage pools		169		25		73		10
Total loans		4,180		$63		4,764		$ 71