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LOANS AND LEASES
 3 Months Ended
Mar. 31, 2022
Receivables [Abstract]  
LOANS AND LEASES LOANS AND LEASES
Accrued interest receivable on loans and leases, which totaled $54.9 million at March 31, 2022 and $48.9 million at December 31, 2021, is excluded from the estimate of credit losses and assessed separately in other assets in the Consolidated Balance Sheets for both periods and not included in the following tables.
Loans and Leases by Portfolio Segment
Following is a summary of total loans and leases, net of unearned income:
TABLE 5.1
(in millions)March 31, 2022December 31, 2021
Commercial real estate$10,746 $9,899 
Commercial and industrial6,220 5,977 
Commercial leases471 495 
Other144 94 
Total commercial loans and leases17,581 16,465 
Direct installment2,568 2,376 
Residential mortgages4,188 3,654 
Indirect installment1,216 1,227 
Consumer lines of credit1,286 1,246 
Total consumer loans9,258 8,503 
Total loans and leases, net of unearned income$26,839 $24,968 
The remaining accretable discount included in the amortized cost of acquired loans was $37.1 million and $30.0 million at March 31, 2022 and December 31, 2021, respectively, which includes the $10 million established for Howard at the time of acquisition.

The loans and leases portfolio categories are comprised of the following types of loans, where in each case the LGD is dependent on the nature and value of the respective collateral:

•Commercial real estate includes both owner-occupied and non-owner-occupied loans secured by commercial properties where operational cash flows on owner-occupied properties or rents received by our borrowers from their tenant(s) on both a property and global basis are the primary default risk drivers, including rents paid by stand-alone business customers for owner-occupied properties;
•Commercial and industrial includes loans to businesses that are not secured by real estate where the borrower's leverage and cash flows from operations are the primary default risk drivers, except for PPP loans that are 100% guaranteed by the SBA, which provides a reduced risk of loss to us on these loans. PPP loans are included in the commercial and industrial category and comprise $179.6 million and $336.6 million of this category's outstanding balance at March 31, 2022 and December 31, 2021, respectively;
•Commercial leases consist of leases for new or used equipment where the borrower's cash flow from operations is the primary default risk driver;
•Other is comprised primarily of credit cards and mezzanine loans where the borrower's cash flow from operations is the primary default risk driver;
•Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans where the primary default risk driver is the borrower's employment status and income;
•Residential mortgages consist of conventional and jumbo mortgage loans for 1-4 family properties where the primary default risk driver is the borrower's employment status and income;
•Indirect installment is comprised of loans originated by approved third parties and underwritten by us, primarily automobile loans where the primary default risk driver is the borrower's employment status and income; and
•Consumer lines of credit include home equity lines of credit and consumer lines of credit that are either unsecured or secured by collateral other than home equity where the primary default risk driver is the borrower's employment status and income.
The loans and leases portfolio consists principally of loans to individuals and small- and medium-sized businesses within our primary market in seven states and the District of Columbia. Our primary market coverage spans several major metropolitan areas including: Pittsburgh, Pennsylvania; Baltimore, Maryland; Cleveland, Ohio; Washington, D.C.; Charlotte, Raleigh, Durham and the Piedmont Triad (Winston-Salem, Greensboro and High Point) in North Carolina; and Charleston, South Carolina.
The following table shows occupancy information relating to commercial real estate loans:
TABLE 5.2
(dollars in millions)March 31,
2022		December 31,
2021
Commercial real estate:
Percent owner-occupied29.3 %28.8 %
Percent non-owner-occupied70.7 71.2 

Credit Quality
We monitor the credit quality of our loan portfolio using several performance measures based on payment activity and borrower performance. We use an internal risk rating assigned to a commercial loan or lease at origination, summarized below.
TABLE 5.3
Rating CategoryDefinition
Passin general, the condition of the borrower and the performance of the loan is satisfactory or better
Special Mentionin general, the condition of the borrower has deteriorated, requiring an increased level of monitoring
Substandardin general, the condition of the borrower has significantly deteriorated and the performance of the loan could further deteriorate if deficiencies are not corrected
Doubtfulin general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable
The use of these internally assigned credit quality categories within the commercial loan and lease portfolio permits our use of transition matrices to establish a basis which is then impacted by quantitative inputs from our econometric model forecasts over the R&S period. Our internal credit risk grading system is based on past experiences with similarly graded loans and leases and conforms to regulatory categories. In general, loan and lease risk ratings within each category are reviewed on an ongoing basis according to our policy for each class of loans and leases. Each quarter, we analyze the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the commercial loan and lease portfolio. Loans and leases within the Pass credit category or that migrate toward the Pass credit category generally have a lower risk of loss compared to loans and leases that migrate toward the Substandard or Doubtful credit categories. Accordingly, we apply higher risk factors to Substandard and Doubtful credit categories.
The following tables summarize the designated loan rating category by loan class including term loans on an amortized cost basis by origination year:
TABLE 5.4
March 31, 202220222021202020192018PriorRevolving Loans Amortized Cost BasisTotal
(in millions)
COMMERCIAL
Commercial Real Estate:
Risk Rating:
   Pass$423 $2,123 $1,813 $1,480 $839 $2,937 $196 $9,811 
   Special Mention— 44 24 93 101 306 1 569 
   Substandard— — 16 43 54 244 9 366 
Total commercial real estate423 2,167 1,853 1,616 994 3,487 206 10,746 
Commercial and Industrial:
Risk Rating:
   Pass426 1,444 823 697 390 475 1,576 5,831 
   Special Mention1 7 16 18 28 101 32 203 
   Substandard— 8 11 14 26 62 65 186 
Total commercial and industrial427 1,459 850 729 444 638 1,673 6,220 
Commercial Leases:
Risk Rating:
   Pass22 165 98 48 40 90 — 463 
   Special Mention— 1 — — — — — 1 
   Substandard— — 2 2 — 3 — 7 
Total commercial leases22 166 100 50 40 93 — 471 
Other Commercial:
Risk Rating:
   Pass57 — — — — 15 72 144 
Total other commercial57 — — — — 15 72 144 
Total commercial loans and leases929 3,792 2,803 2,395 1,478 4,233 1,951 17,581 
CONSUMER
Direct Installment:
   Current265 983 523 197 112 475 — 2,555 
   Past due— — 1 1 1 10 — 13 
Total direct installment265 983 524 198 113 485 — 2,568 
Residential Mortgages:
   Current237 1,470 929 418 152 935 — 4,141 
   Past due— 4 4 2 3 34 — 47 
Total residential mortgages237 1,474 933 420 155 969 — 4,188 
Indirect Installment:
   Current127 478 235 137 149 78 — 1,204 
   Past due— 5 2 2 1 2 — 12 
Total indirect installment127 483 237 139 150 80 — 1,216 
Consumer Lines of Credit:
   Current32 20 2 4 5 133 1,075 1,271 
   Past due— — — — — 13 2 15 
Total consumer lines of credit32 20 2 4 5 146 1,077 1,286 
Total consumer loans661 2,960 1,696 761 423 1,680 1,077 9,258 
Total loans and leases$1,590 $6,752 $4,499 $3,156 $1,901 $5,913 $3,028 $26,839 
December 31, 202120212020201920182017PriorRevolving Loans Amortized Cost BasisTotal
(in millions)
COMMERCIAL
Commercial Real Estate:
Risk Rating:
   Pass$1,878 $1,782 $1,503 $830 $743 $2,171 $183 $9,090 
   Special Mention15 21 89 105 107 175 9 521 
   Substandard— 15 28 45 45 152 3 288 
Total commercial real estate1,893 1,818 1,620 980 895 2,498 195 9,899 
Commercial and Industrial:
Risk Rating:
   Pass1,663 833 731 386 184 296 1,509 5,602 
   Special Mention8 12 18 7 37 42 52 176 
   Substandard1 4 14 57 42 17 64 199 
Total commercial and industrial1,672 849 763 450 263 355 1,625 5,977 
Commercial Leases:
Risk Rating:
   Pass182 109 98 53 39 1 — 482 
   Special Mention— 1 — 2 3 1 — 7 
   Substandard— 2 3 1 — — — 6 
Total commercial leases182 112 101 56 42 2 — 495 
Other Commercial:
Risk Rating:
   Pass39 — — — — 3 52 94 
Total other commercial39 — — — — 3 52 94 
Total commercial loans and leases3,786 2,779 2,484 1,486 1,200 2,858 1,872 16,465 
CONSUMER
Direct Installment:
   Current978 538 215 125 96 412 — 2,364 
   Past due— — 1 1 — 10 — 12 
Total direct installment978 538 216 126 96 422 — 2,376 
Residential Mortgages:
   Current1,280 932 392 152 212 652 — 3,620 
   Past due1 1 1 3 3 25 — 34 
Total residential mortgages1,281 933 393 155 215 677 — 3,654 
Indirect Installment:
   Current516 262 157 178 64 35 — 1,212 
   Past due6 3 2 2 1 1 — 15 
Total indirect installment522 265 159 180 65 36 — 1,227 
Consumer Lines of Credit:
   Current20 3 4 5 3 127 1,072 1,234 
   Past due— — — — — 10 2 12 
Total consumer lines of credit20 3 4 5 3 137 1,074 1,246 
Total consumer loans2,801 1,739 772 466 379 1,272 1,074 8,503 
Total loans and leases$6,587 $4,518 $3,256 $1,952 $1,579 $4,130 $2,946 $24,968 
We use delinquency transition matrices within the consumer and other loan classes to establish the basis for the R&S forecast portion of the credit risk. Each month, management analyzes payment and volume activity, Fair Isaac Corporation (FICO) scores and Debt-to-Income (DTI) scores and other external factors such as unemployment, to determine how consumer loans are performing.
Non-Performing and Past Due
The following tables provide an analysis of the aging of loans by class.
TABLE 5.5
(in millions)30-89 Days
Past Due
> 90 Days
Past Due
and Still
Accruing
Non-
Accrual		Total
Past Due		CurrentTotal
Loans and
Leases		Non-accrual with No ACL
March 31, 2022
Commercial real estate$16 $— $53 $69 $10,677 $10,746 $26 
Commercial and industrial6 — 12 18 6,202 6,220 1 
Commercial leases— — 1 1 470 471 — 
Other2 — 1 3 141 144 — 
Total commercial loans and leases24 — 67 91 17,490 17,581 27 
Direct installment6 — 7 13 2,555 2,568 — 
Residential mortgages21 6 20 47 4,141 4,188 — 
Indirect installment10 — 2 12 1,204 1,216 — 
Consumer lines of credit7 2 6 15 1,271 1,286 — 
Total consumer loans44 8 35 87 9,171 9,258 — 
Total loans and leases$68 $8 $102 $178 $26,661 $26,839 $27 

(in millions)30-89 Days
Past Due
> 90 Days
Past Due
and Still
Accruing
Non-
Accrual		Total
Past Due 		CurrentTotal
Loans and
Leases		Non-accrual with No ACL
December 31, 2021
Commercial real estate$11 $— $48 $59 $9,840 $9,899 $20 
Commercial and industrial4 — 15 19 5,958 5,977 4 
Commercial leases1 — 1 2 493 495 — 
Other— — — — 94 94 — 
Total commercial loans and leases16 — 64 80 16,385 16,465 24 
Direct installment5 — 7 12 2,364 2,376 — 
Residential mortgages20 4 10 34 3,620 3,654 — 
Indirect installment12 1 2 15 1,212 1,227 — 
Consumer lines of credit6 1 5 12 1,234 1,246 — 
Total consumer loans43 6 24 73 8,430 8,503 — 
Total loans and leases$59 $6 $88 $153 $24,815 $24,968 $24 
Following is a summary of non-performing assets:
TABLE 5.6
(dollars in millions)March 31,
2022		December 31,
2021
Non-accrual loans$102 $88 
Total non-performing loans
102 88 
Other real estate owned 8 8 
Total non-performing assets
$110 $96 
Asset quality ratios:
Non-performing loans / total loans and leases
0.38 %0.35 %
Non-performing assets + 90 days past due / total loans and leases + OREO
0.44 0.41 
The carrying value of residential-secured consumer OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure amounted to $1.4 million at March 31, 2022 and $1.6 million at December 31, 2021. The recorded investment of residential-secured consumer OREO for which formal foreclosure proceedings are in process at March 31, 2022 and December 31, 2021 totaled $9.1 million and $4.3 million, respectively. During 2020 and 2021, we extended the residential mortgage foreclosure moratorium beyond the requirements for government-backed loans under the CARES Act to all residential mortgage loan customers.
Approximately $67.3 million of commercial loans are collateral dependent at March 31, 2022. Repayment is expected to be substantially through the operation or sale of the collateral on the loan. These loans are primarily secured by business assets or commercial real estate.

Troubled Debt Restructurings
TDRs are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from loss mitigation activities and could include the extension of a maturity date, interest rate reduction, principal forgiveness, deferral or decrease in payments for a period of time and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral.
Following is a summary of the composition of total TDRs:
TABLE 5.7
(in millions)March 31,
2022		December 31,
2021
Accruing$60 $60 
Non-accrual32 32 
Total TDRs$92 $92 

TDRs that are accruing and performing include loans that met the criteria for non-accrual of interest prior to restructuring for which we can reasonably estimate the timing and amount of the expected cash flows on such loans and for which we expect to fully collect the new carrying value of the loans. During the three months ended March 31, 2022, we returned to accruing status $2.5 million in restructured residential mortgage loans that have consistently met their modified obligations for more than six months. TDRs that are on non-accrual are not placed on accruing status until all delinquent principal and interest have been paid and the ultimate collectability of the remaining principal and interest is reasonably assured. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses which are factored into the ACL.
Commercial loans over $1.0 million whose terms have been modified in a TDR are generally placed on non-accrual, individually analyzed and measured based on the fair value of the underlying collateral. Our ACL includes specific reserves for commercial TDRs of $1.5 million at March 31, 2022, compared to $1.5 million at December 31, 2021, and pooled reserves for individual loans of $1.3 million and $1.5 million for those same periods, respectively, based on loan segment LGD. Upon
default, the amount of the recorded investment in the TDR in excess of the fair value of the collateral, less estimated selling costs, is generally considered a confirmed loss and is charged-off against the ACL.
All other classes of loans whose terms have been modified in a TDR are pooled and measured based on the loan segment LGD. Our ACL included pooled reserves for these classes of loans of $3.5 million for March 31, 2022 and $3.9 million for December 31, 2021. Upon default of an individual loan, our charge-off policy is followed for that class of loan.

Following is a summary of TDR loans, by class, for loans that were modified during the periods indicated:
TABLE 5.8
Three Months Ended March 31, 2022
(dollars in millions)Number
of
Contracts		Pre-
Modification
Outstanding
Recorded
Investment		Post-
Modification
Outstanding
Recorded
Investment
Commercial real estate2 $— $— 
Total commercial loans2 — — 
Direct installment13 — — 
Residential mortgages5 1 1 
Consumer lines of credit3 — — 
Total consumer loans21 1 1 
Total23 $1 $1 

 Three Months Ended March 31, 2021
(dollars in millions)Number
of
Contracts		Pre-
Modification
Outstanding
Recorded
Investment		Post-
Modification
Outstanding
Recorded
Investment
Commercial real estate11 $17 $17 
Commercial and industrial1 — — 
Total commercial loans12 17 17 
Direct installment10 — — 
Residential mortgages2 1 1 
Consumer lines of credit10 1 1 
Total consumer loans22 2 2 
Total34 $19 $19 
Following is a summary of TDRs, by class, for which there was a payment default, excluding loans that have been paid off and/or sold. Default occurs when a loan is 90 days or more past due and is within 12 months of restructuring.
TABLE 5.9
 Three Months Ended
March 31, 2022
(dollars in millions)Number of
Contracts		Recorded
Investment
Commercial real estate3 $— 
Total commercial loans3 — 
Direct installment1 — 
Residential mortgages1 — 
Total consumer loans2 — 
Total5 $— 

 Three Months Ended
March 31, 2021
(dollars in millions)Number of
Contracts		Recorded
Investment
Commercial and industrial1 $— 
Total commercial loans1 — 
Residential mortgages1 — 
Total consumer loans1 — 
Total2 $—