Loans and Allowance for Credit Losses (Tables)

12 Months Ended

Dec. 31, 2022

The composition of the loan portfolio at December 31, disaggregated by class and underlying specific portfolio type, was as follows:


(Dollars in Millions)	2022		2021

Commercial
Commercial	$	131,128	$	106,912
Lease financing		4,562		5,111

Total commercial		135,690		112,023

Commercial Real Estate
Commercial mortgages		43,765		28,757
Construction and development		11,722		10,296

Total commercial real estate		55,487		39,053

Residential Mortgages
Residential mortgages		107,858		67,546
Home equity loans, first liens		7,987		8,947

Total residential mortgages		115,845		76,493

Credit Card		26,295		22,500

Other Retail
Retail leasing		5,519		7,256
Home equity and second mortgages		12,863		10,446
Revolving credit		3,983		2,750
Installment		14,592		16,641
Automobile		17,939		24,866

Total other retail		54,896		61,959

Total loans	$	388,213	$	312,028

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, 2021	$	1,849		$	1,123		$	565		$	1,673		$	945		$	6,155
Add
Allowance for acquired credit losses (a)		163			87			36			45			5			336
Provision for credit losses (b)		378			152			302			826			319			1,977
Deduct
Loans charged-off (c)		319			54			13			696			418			1,500
Less recoveries of loans charged-off		(92	)		(17	)		(36	)		(172	)		(120	)		(437	)

Net loan charge-offs (recoveries)		227			37			(23	)		524			298			1,063
Other Changes		–			–			–			–			(1	)		(1	)

Balance at December 31, 2022	$	2,163		$	1,325		$	926		$	2,020		$	970		$	7,404

Balance at December 31, 2020	$	2,423		$	1,544		$	573		$	2,355		$	1,115		$	8,010
Add
Provision for credit losses		(471	)		(419	)		(40	)		(170	)		(73	)		(1,173	)
Deduct
Loans charged-off		222			29			18			686			253			1,208
Less recoveries of loans charged-off		(119	)		(27	)		(50	)		(174	)		(156	)		(526	)

Net loan charge-offs (recoveries)		103			2			(32	)		512			97			682

Balance at December 31, 2021	$	1,849		$	1,123		$	565		$	1,673		$	945		$	6,155

Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	4,491
Add
Change in accounting principle (d)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		1,074			1,054			158			1,184			336			3,806
Deduct
Loans charged-off		575			210			19			975			401			2,180
Less recoveries of loans charged-off		(62	)		(23	)		(31	)		(146	)		(132	)		(394	)

Net loan charge-offs (recoveries)		513			187			(12	)		829			269			1,786

Balance at December 31, 2020	$	2,423		$	1,544		$	573		$	2,355		$	1,115		$	8,010

(a)	Represents allowance for purchased credit deteriorated and charged-off loans acquired from MUB.

(b)	Includes $662 million of provision for credit losses related to the acquisition of MUB.

(c)	Includes $179 million of total charge-offs primarily on loans previously charged-off by MUB, which were written up upon acquisition to unpaid principal balance as required by purchase accounting.

(d)	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

December 31, 2022
Commercial	$	135,077	$	350	$	94	$	169	$	135,690
Commercial real estate		55,057		87		5		338		55,487
Residential mortgages (a)		115,224		201		95		325		115,845
Credit card		25,780		283		231		1		26,295
Other retail		54,382		309		66		139		54,896

Total loans	$	385,520	$	1,230	$	491	$	972	$	388,213

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 December 31, 2022, $647 million of loans 30–89 days past due and $2.2 billion of loans 90 days or more past due purchased and 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 December 31, 2022 and 2021, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $19 million and $16 million for the years ended December 31, 2022 and 2021, respectively, compared to what would have been recognized at the original contracual terms of the loans of $34 million for both periods.

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:


	December 31, 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	$	61,229	$	245	$	315	$	560	$	61,789	$	–	$	–	$	–	$	–	$	–
Originated in 2021		26,411		159		78		237		26,648		51,155		387		287		674		51,829
Originated in 2020		7,049		68		138		206		7,255		14,091		304		133		437		14,528
Originated in 2019		3,962		51		210		261		4,223		10,159		151		54		205		10,364
Originated in 2018		2,119		31		32		63		2,182		5,122		3		36		39		5,161
Originated prior to 2018		6,867		33		97		130		6,997		4,923		30		81		111		5,034
Revolving (b)		25,888		344		364		708		26,596		24,722		268		117		385		25,107
Total commercial		133,525		931		1,234		2,165		135,690		110,172		1,143		708		1,851		112,023
Commercial real estate
Originated in 2022		14,527		206		519		725		15,252		–		–		–		–		–
Originated in 2021		13,565		171		99		270		13,835		13,364		6		990		996		14,360
Originated in 2020		6,489		97		117		214		6,703		7,459		198		263		461		7,920
Originated in 2019		6,991		251		304		555		7,546		6,368		251		610		861		7,229
Originated in 2018		3,550		88		501		589		4,139		2,996		29		229		258		3,254
Originated prior to 2018		6,089		50		374		424		6,513		4,473		55		224		279		4,752
Revolving		1,489		–		10		10		1,499		1,494		1		43		44		1,538
Total commercial real estate		52,700		863		1,924		2,787		55,487		36,154		540		2,359		2,899		39,053
Residential mortgages (c)
Originated in 2022		28,452		–		–		–		28,452		–		–		–		–		–
Originated in 2021		39,527		–		7		7		39,534		29,882		–		3		3		29,885
Originated in 2020		16,556		–		8		8		16,564		15,948		1		8		9		15,957
Originated in 2019		7,222		–		18		18		7,240		6,938		–		36		36		6,974
Originated in 2018		2,934		–		26		26		2,960		2,889		–		30		30		2,919
Originated prior to 2018		20,724		–		371		371		21,095		20,415		–		342		342		20,757
Revolving		–		–		–		–		–		1		–		–		–		1
Total residential mortgages		115,415		–		430		430		115,845		76,073		1		419		420		76,493
Credit card (d)		26,063		–		232		232		26,295		22,335		–		165		165		22,500
Other retail
Originated in 2022		9,563		–		6		6		9,569		–		–		–		–		–
Originated in 2021		15,352		–		12		12		15,364		22,455		–		6		6		22,461
Originated in 2020		7,828		–		11		11		7,839		12,071		–		9		9		12,080
Originated in 2019		3,418		–		13		13		3,431		7,223		–		17		17		7,240
Originated in 2018		1,421		–		9		9		1,430		3,285		–		14		14		3,299
Originated prior to 2018		2,268		–		22		22		2,290		3,699		–		24		24		3,723
Revolving		14,029		–		98		98		14,127		12,532		–		112		112		12,644
Revolving converted to term		800		–		46		46		846		472		–		40		40		512
Total other retail		54,679		–		217		217		54,896		61,737		–		222		222		61,959
Total loans	$	382,382	$	1,794	$	4,037	$	5,831	$	388,213	$	306,471	$	1,684	$	3,873	$	5,557	$	312,028
Total outstanding commitments	$	772,804	$	2,825	$	5,041	$	7,866	$	780,670	$	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 December 31, 2022, $2.2 billion of GNMA loans 90 days or more past due and $1.0 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 $1.5 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 years ended December 31, by portfolio class:


(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance

2022
Commercial		2,259	$	148	$	134
Commercial real estate		75		50		47
Residential mortgages		1,699		475		476
Credit card		44,470		243		246
Other retail		2,514		89		85

Total loans, excluding loans purchased from GNMA mortgage pools		51,017		1,005		988
Loans purchased from GNMA mortgage pools		1,640		226		230

Total loans		52,657	$	1,231	$	1,218

2021
Commercial		2,156	$	140	$	127
Commercial real estate		112		193		179
Residential mortgages		977		329		328
Credit card		25,297		144		146
Other retail		2,576		74		67

Total loans, excluding loans purchased from GNMA mortgage pools		31,118		880		847
Loans purchased from GNMA mortgage pools		2,311		334		346

Total loans		33,429	$	1,214	$	1,193

2020
Commercial		3,423	$	628	$	493
Commercial real estate		149		262		218
Residential mortgages		1,176		402		401
Credit card		23,549		135		136
Other retail		4,027		117		114

Total loans, excluding loans purchased from GNMA mortgage pools		32,324		1,544		1,362
Loans purchased from GNMA mortgage pools		4,630		667		659

Total loans		36,954	$	2,211	$	2,021

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 years ended December 31, that were modified as TDRs within 12 months previous to default:


(Dollars in Millions)	Number of Loans		Amount Defaulted

2022
Commercial		767	$	24
Commercial real estate		20		11
Residential mortgages		235		28
Credit card		7,904		42
Other retail		307		5

Total loans, excluding loans purchased from GNMA mortgage pools		9,233		110
Loans purchased from GNMA mortgage pools		282		59

Total loans		9,515	$	169

2021
Commercial		1,084	$	32
Commercial real estate		16		7
Residential mortgages		81		9
Credit card		7,700		43
Other retail		714		11

Total loans, excluding loans purchased from GNMA mortgage pools		9,595		102
Loans purchased from GNMA mortgage pools		176		26

Total loans		9,771	$	128

2020
Commercial		1,148	$	80
Commercial real estate		50		30
Residential mortgages		38		5
Credit card		6,688		35
Other retail		307		4

Total loans, excluding loans purchased from GNMA mortgage pools		8,231		154
Loans purchased from GNMA mortgage pools		498		66

Total loans		8,729	$	220