ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2019

The allowance for credit losses addresses credit losses inherent in the existing loan and lease portfolio and is presented as a reserve against loans and leases on the Consolidated Balance Sheets. Loan and lease losses are charged off against the allowance for credit losses, with recoveries of amounts previously charged off credited to the allowance for credit losses. Provisions for credit losses are charged to operations based on management’s periodic evaluation of the appropriate level of the allowance for credit losses. Following is a summary of changes in the allowance for credit losses, by loan and lease class:

TABLE 5.1



(in millions)	Balance at Beginning of Period		Charge- Offs			Recoveries		Net Charge- Offs			Provision for Credit Losses			Balance at End of Period
Three Months Ended September 30, 2019
Commercial real estate	$	61	$	(1	)	$	—	$	(1	)	$	(2	)	$	58
Commercial and industrial	52		(3		)	1		(2		)	7			57
Commercial leases	9		—			—		—			1			10
Other	1		—			—		—			1			2
Total commercial loans and leases	123		(4		)	1		(3		)	7			127
Direct installment	13		—			—		—			(1		)	12
Residential mortgages	20		—			—		—			3			23
Indirect installment	18		(3		)	1		(2		)	2			18
Consumer lines of credit	9		—			—		—			—			9
Total consumer loans	60		(3		)	1		(2		)	4			62
Total allowance on originated loans and leases	183		(7		)	2		(5		)	11			189
Purchased credit-impaired loans	1		—			—		—			—			1
Other acquired loans	4		(2		)	1		(1		)	1			4
Total allowance on acquired loans	5		(2		)	1		(1		)	1			5
Total allowance for credit losses	$	188	$	(9	)	$	3	$	(6	)	$	12		$	194
Nine Months Ended September 30, 2019
Commercial real estate	$	55	$	(3	)	$	1	$	(2	)	$	5		$	58
Commercial and industrial	49		(7		)	3		(4		)	12			57
Commercial leases	8		—			—		—			2			10
Other	2		(2		)	—		(2		)	2			2
Total commercial loans and leases	114		(12		)	4		(8		)	21			127
Direct installment	14		(1		)	—		(1		)	(1		)	12
Residential mortgages	20		(1		)	—		(1		)	4			23
Indirect installment	15		(8		)	3		(5		)	8			18
Consumer lines of credit	10		(1		)	—		(1		)	—			9
Total consumer loans	59		(11		)	3		(8		)	11			62
Total allowance on originated loans and leases	173		(23		)	7		(16		)	32			189
Purchased credit-impaired loans	1		—			—		—			—			1
Other loans acquired in a business combination	6		(9		)	2		(7		)	5			4
Total allowance on loans acquired in a business combination	7		(9		)	2		(7		)	5			5
Total allowance for credit losses	$	180	$	(32	)	$	9	$	(23	)	$	37		$	194



(in millions)	Balance at Beginning of Period		Charge- Offs			Recoveries		Net Charge- Offs			Provision for Credit Losses		Balance at End of Period
Three Months Ended September 30, 2018
Commercial real estate	$	50	$	(1	)	$	1	$	—		$	4	$	54
Commercial and industrial	54		(2		)	—		(2		)	1		53
Commercial leases	7		—			—		—			—		7
Other	2		(1		)	—		(1		)	1		2
Total commercial loans and leases	113		(4		)	1		(3		)	6		116
Direct installment	21		(10		)	—		(10		)	3		14
Residential mortgages	15		—			—		—			3		18
Indirect installment	14		(2		)	1		(1		)	2		15
Consumer lines of credit	10		(1		)	—		(1		)	1		10
Total consumer loans	60		(13		)	1		(12		)	9		57
Total allowance on originated loans and leases	173		(17		)	2		(15		)	15		173
Purchased credit-impaired loans	1		—			—		—			—		1
Other acquired loans	3		(1		)	1		—			1		4
Total allowance on acquired loans	4		(1		)	1		—			1		5
Total allowance for credit losses	$	177	$	(18	)	$	3	$	(15	)	$	16	$	178
Nine Months Ended September 30, 2018
Commercial real estate	$	50	$	(5	)	$	1	$	(4	)	$	8	$	54
Commercial and industrial	52		(14		)	2		(12		)	13		53
Commercial leases	5		—			—		—			2		7
Other	2		(4		)	1		(3		)	3		2
Total commercial loans and leases	109		(23		)	4		(19		)	26		116
Direct installment	21		(16		)	1		(15		)	8		14
Residential mortgages	16		—			—		—			2		18
Indirect installment	12		(7		)	3		(4		)	7		15
Consumer lines of credit	10		(2		)	—		(2		)	2		10
Total consumer loans	59		(25		)	4		(21		)	19		57
Total allowance on originated loans and leases	168		(48		)	8		(40		)	45		173
Purchased credit-impaired loans	1		—			—		—			—		1
Other loans acquired in a business combination	6		(5		)	2		(3		)	1		4
Total allowance on loans acquired in a business combination	7		(5		)	2		(3		)	1		5
Total allowance for credit losses	$	175	$	(53	)	$	10	$	(43	)	$	46	$	178

Following is a summary of the individual and collective allowance for credit losses and corresponding loan and lease balances by class:

TABLE 5.2



	Allowance				Loans and Leases Outstanding
(in millions)	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans and Leases		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
September 30, 2019
Commercial real estate	$	1	$	57	$	6,864	$	12	$	6,852
Commercial and industrial	5		52		4,925		12		4,913
Commercial leases	—		10		417		—		417
Other	—		2		35		—		35
Total commercial loans and leases	6		121		12,241		24		12,217
Direct installment	—		12		1,692		—		1,692
Residential mortgages	—		23		2,891		—		2,891
Indirect installment	—		18		1,949		—		1,949
Consumer lines of credit	—		9		1,099		—		1,099
Total consumer loans	—		62		7,631		—		7,631
Total	$	6	$	183	$	19,872	$	24	$	19,848
December 31, 2018
Commercial real estate	$	—	$	55	$	6,171	$	7	$	6,164
Commercial and industrial	4		49		4,140		11		4,129
Commercial leases	—		9		373		—		373
Other	—		2		46		—		46
Total commercial loans and leases	4		115		10,730		18		10,712
Direct installment	—		14		1,668		—		1,668
Residential mortgages	—		19		2,612		—		2,612
Indirect installment	—		15		1,933		—		1,933
Consumer lines of credit	—		10		1,119		—		1,119
Total consumer loans	—		58		7,332		—		7,332
Total	$	4	$	173	$	18,062	$	18	$	18,044

The above table excludes loans acquired in a business combination that were pooled into groups of loans for evaluating impairment.