Asset Quality (Tables)

9 Months Ended

Sep. 30, 2017

The following tables display the delinquency status of our loans and our nonperforming assets at September 30, 2017 and December 31, 2016, respectively.

Table 34: Analysis of Loan Portfolio (a)



	Accruing
Dollars in millions	Current or Less Than 30 Days Past Due			30-59 Days Past Due			60-89 Days Past Due			90 Days Or More Past Due			Total Past Due (b)				Nonperforming Loans			Fair Value Option Nonaccrual Loans (c)			Purchased Impaired Loans			Total Loans (d)
September 30, 2017
Commercial Lending
Commercial	$	110,765		$	44		$	28		$	47		$	119			$	419					$	14		$	111,317
Commercial real estate	29,323			8			13						21				128						44			29,516
Equipment lease financing	7,684			4			3						7				3									7,694
Total commercial lending	147,772			56			44			47			147				550						58			148,527
Consumer Lending
Home equity	26,959			74			31						105				814						933			28,811
Residential real estate	13,788			135			71			418			624			(b)	423			$	200		1,566			16,601
Credit card	5,267			40			25			38			103				5									5,375
Other consumer
Automobile	12,580			71			16			5			92				71									12,743
Education and other	8,694			110			68			170			348			(b)	10									9,052
Total consumer lending	67,288			430			211			631			1,272				1,323			200			2,499			72,582
Total	$	215,060		$	486		$	255		$	678		$	1,419			$	1,873		$	200		$	2,557		$	221,109
Percentage of total loans	97.26		%	.22		%	.12		%	.31		%	.64		%		.85		%	.09		%	1.16		%	100.00		%
December 31, 2016
Commercial Lending
Commercial	$	100,710		$	81		$	20		$	39		$	140			$	496					$	18		$	101,364
Commercial real estate	28,769			5			2						7				143						91			29,010
Equipment lease financing	7,535			29			1						30				16									7,581
Total commercial lending	137,014			115			23			39			177				655						109			137,955
Consumer Lending
Home equity	27,820			64			30						94				914						1,121			29,949
Residential real estate	12,425			159			68			500			727			(b)	501			$	219		1,726			15,598
Credit card	5,187			33			21			37			91				4									5,282
Other consumer
Automobile	12,257			51			12			5			68				55									12,380
Education and other	9,235			140			78			201			419			(b)	15									9,669
Total consumer lending	66,924			447			209			743			1,399				1,489			219			2,847			72,878
Total	$	203,938		$	562		$	232		$	782		$	1,576			$	2,144		$	219		$	2,956		$	210,833
Percentage of total loans	96.73		%	.27		%	.11		%	.37		%	.75		%		1.02		%	.10		%	1.40		%	100.00		%


(a)	Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment in a loan includes the unpaid principal balance plus accrued interest and net accounting adjustments, less any charge-offs. Recorded investment does not include any associated valuation allowance.

(b)

Past due loan amounts exclude purchased impaired loans, even if contractually past due (or if we do not expect to receive payment in full based on the original contractual terms), as we are currently accreting interest income over the expected life of the loans. Past due loan amounts include government insured or guaranteed Residential real estate mortgages totaling $.5 billion and $.6 billion and Education and other consumer loans totaling $.3 billion and $.4 billion at September 30, 2017 and December 31, 2016, respectively.


(c)	Consumer loans accounted for under the fair value option for which we do not expect to collect substantially all principal and interest are subject to nonaccrual accounting and classification upon meeting any of our nonaccrual policies. Given that these loans are not accounted for at amortized cost, these loans have been excluded from the nonperforming loan population.


(d)	Net of unearned income, net deferred loan fees, unamortized discounts & premiums and purchase discounts & premiums totaling $1.2 billion and $1.3 billion at September 30, 2017 and December 31, 2016, respectively.

Nonperforming Assets

Table 35: Nonperforming Assets



Dollars in millions	September 30 2017			December 31 2016
Nonperforming loans
Total commercial lending	$	550		$	655
Total consumer lending (a)	1,323			1,489
Total nonperforming loans (b)	1,873			2,144
OREO, foreclosed and other assets	194			230
Total nonperforming assets	$	2,067		$	2,374
Nonperforming loans to total loans	.85		%	1.02		%
Nonperforming assets to total loans, OREO, foreclosed and other assets	.93		%	1.12		%
Nonperforming assets to total assets	.55		%	.65		%


(a)	Excludes most consumer loans and lines of credit, not secured by residential real estate, which are charged off after 120 to 180 days past due and are not placed on nonperforming status.


(b)	The recorded investment of loans collateralized by residential real estate property that are in process of foreclosure was $.3 billion at September 30, 2017 and $.4 billion at December 31, 2016, which included $.2 billion of loans that are government insured/guaranteed.

Commercial Lending Asset Quality Indicators

Table 36: Commercial Lending Asset Quality Indicators (a)



			Criticized Commercial Loans
In millions	Pass Rated		Special Mention (b)		Substandard (c)		Doubtful (d)		Total Loans
September 30, 2017
Commercial	$	106,168	$	1,741	$	3,340	$	68	$	111,317
Commercial real estate	28,874		168		457		17		29,516
Equipment lease financing	7,515		89		87		3		7,694
Total commercial lending	$	142,557	$	1,998	$	3,884	$	88	$	148,527
December 31, 2016
Commercial	$	96,231	$	1,612	$	3,449	$	72	$	101,364
Commercial real estate	28,561		98		327		24		29,010
Equipment lease financing	7,395		89		91		6		7,581
Total commercial lending	$	132,187	$	1,799	$	3,867	$	102	$	137,955

(a)

Loans are classified as “Pass”, “Special Mention”, “Substandard” and “Doubtful” based on the Regulatory Classification definitions. We use probability of default (PD) and loss given default (LGD) to rate commercial loans and apply a split rating classification to certain loans meeting threshold criteria. By assigning a split classification, a loan’s exposure amount may be split into more than one classification category in this table.


(b)	Special Mention rated loans have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects at some future date. These loans do not expose us to sufficient risk to warrant a more adverse classification at the reporting date.


(c)	Substandard rated loans have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected.


(d)	Doubtful rated loans possess all the inherent weaknesses of a Substandard loan with the additional characteristics that the weakness makes collection or liquidation in full improbable due to existing facts, conditions and values.

Home Equity and Residential Real Estate Asset Quality Indicators

Table 37: Asset Quality Indicators for Home Equity and Residential Real Estate Loans – Excluding Purchased Impaired and Government Insured or Guaranteed Loans (a)



	Home Equity				Residential Real Estate		Total
September 30, 2017 - in millions	1st Liens		2nd Liens		Residential Real Estate		Total
Current estimated LTV ratios
Greater than or equal to 125% and updated FICO scores:
Greater than 660	$	131	$	432	$	141	$	704
Less than or equal to 660 (b)	20		69		42		131
Missing FICO	1		5		2		8
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 660	337		958		306		1,601
Less than or equal to 660 (b)	55		160		78		293
Missing FICO	3		10		7		20
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 660	379		995		358		1,732
Less than or equal to 660	61		144		63		268
Missing FICO	2		8		5		15
Less than 90% and updated FICO scores:
Greater than 660	14,066		7,958		12,656		34,680
Less than or equal to 660	1,227		761		542		2,530
Missing FICO	42		55		90		187
Total home equity and residential real estate loans	$	16,324	$	11,555	$	14,290	$	42,169



December 31, 2016 - in millions	Home Equity				Residential Real Estate		Total
December 31, 2016 - in millions	1st Liens		2nd Liens		Residential Real Estate		Total
Current estimated LTV ratios
Greater than or equal to 125% and updated FICO scores:
Greater than 660	$	161	$	629	$	174	$	964
Less than or equal to 660 (b)	32		110		35		177
Missing FICO	1		9		2		12
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 660	394		1,190		345		1,929
Less than or equal to 660 (b)	66		211		76		353
Missing FICO	3		10		7		20
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 660	453		1,100		463		2,016
Less than or equal to 660	77		171		78		326
Missing FICO	1		8		6		15
Less than 90% and updated FICO scores:
Greater than 660	14,047		7,913		11,153		33,113
Less than or equal to 660	1,323		822		586		2,731
Missing FICO	42		55		102		199
Missing LTV and updated FICO scores:
Greater than 660					1		1
Total home equity and residential real estate loans	$	16,600	$	12,228	$	13,028	$	41,856


(a)	Amounts shown represent recorded investment.

(b)

Higher risk loans are defined as loans with both an updated FICO score of less than or equal to 660 and an updated LTV greater than or equal to 100%. The following states had the highest percentage of higher risk loans at September 30, 2017: New Jersey 17%, Pennsylvania 12%, Illinois 12%, Ohio 9%, Maryland 8%, Florida 7%, Michigan 5% and North Carolina 4%. The remainder of the states had lower than 4% of the higher risk loans individually, and collectively they represent approximately 26% of the higher risk loans. The following states had the highest percentage of higher risk loans at December 31, 2016: New Jersey 16%, Pennsylvania 14%, Illinois 12%, Ohio 10%, Florida 7%, Maryland 6%, Michigan 4% and North Carolina 4%. The remainder of the states had lower than 4% of the high risk loans individually, and collectively they represent approximately 27% of the higher risk loans.

Credit Card and Other Consumer Loan Classes Asset Quality Indicators

Table 38: Credit Card and Other Consumer Loan Classes Asset Quality Indicators



	Credit Card				Other Consumer (a)
Dollars in millions	Amount		% of Total Loans Using FICO Credit Metric		Amount		% of Total Loans Using FICO Credit Metric
September 30, 2017
FICO score greater than 719	$	3,248	60	%	$	10,446	64	%
650 to 719	1,510		28	%	4,204		26	%
620 to 649	232		4	%	596		4	%
Less than 620	247		5	%	652		4	%
No FICO score available or required (b)	138		3	%	354		2	%
Total loans using FICO credit metric	5,375		100	%	16,252		100	%
Consumer loans using other internal credit metrics (a)					5,543
Total loan balance	$	5,375			$	21,795
Weighted-average updated FICO score (b)			735				743
December 31, 2016
FICO score greater than 719	$	3,244	61	%	$	10,247	65	%
650 to 719	1,466		28	%	3,873		25	%
620 to 649	215		4	%	552		3	%
Less than 620	229		4	%	632		4	%
No FICO score available or required (b)	128		3	%	489		3	%
Total loans using FICO credit metric	5,282		100	%	15,793		100	%
Consumer loans using other internal credit metrics (a)					6,256
Total loan balance	$	5,282			$	22,049
Weighted-average updated FICO score (b)			736				744

(a)

We use updated FICO scores as an asset quality indicator for non-government guaranteed or insured education loans, automobile loans and other secured and unsecured lines and loans. We use internal credit metrics, such as delinquency status, geography or other factors, as an asset quality indicator for government guaranteed or insured education loans and consumer loans to high net worth individuals, as internal credit metrics are more relevant than FICO scores for these types of loans.

(b)

Credit card loans and other consumer loans with no FICO score available or required generally refers to new accounts issued to borrowers with limited credit history, accounts for which we cannot obtain an updated FICO score (e.g., recent profile changes), cards issued with a business name and/or cards secured by collateral. Management proactively assesses the risk and size of this loan portfolio and, when necessary, takes actions to mitigate the credit risk. Weighted-average updated FICO score excludes accounts with no FICO score available or required.

Financial Impact and TDRs by Concession Type

Table 39: Financial Impact and TDRs by Concession Type (a)



			Pre-TDR Recorded Investment (b)		Post-TDR Recorded Investment (c)
During the three months ended September 30, 2017 Dollars in millions	Number of Loans		Pre-TDR Recorded Investment (b)		Principal Forgiveness		Rate Reduction		Other		Total
Total commercial lending		25	$	44	$	14			$	30	$	44
Total consumer lending		2,965	52				$	36	15		51
Total TDRs		2,990	$	96	$	14	$	36	$	45	$	95
During the three months ended September 30, 2016 Dollars in millions
Total commercial lending		37	$	108			$	1	$	96	$	97
Total consumer lending		2,800	62				37		22		59
Total TDRs		2,837	$	170			$	38	$	118	$	156



			Pre-TDR Recorded Investment (b)		Post-TDR Recorded Investment (c)
During the nine months ended September 30, 2017 Dollars in millions	Number of Loans		Pre-TDR Recorded Investment (b)		Principal Forgiveness		Rate Reduction		Other		Total
Total commercial lending		107	$	256	$	18	6		$	191	$	215
Total consumer lending		8,839	179				$	116	62		178
Total TDRs		8,946	$	435	$	18	$	122	$	253	$	393
During the nine months ended September 30, 2016 Dollars in millions
Total commercial lending		109	$	480			$	53	$	379	$	432
Total consumer lending		8,435	187				119		58		177
Total TDRs		8,544	$	667			$	172	$	437	$	609


(a)	Impact of partial charge-offs at TDR date are included in this table.


(b)	Represents the recorded investment of the loans as of the quarter end prior to TDR designation, and excludes immaterial amounts of accrued interest receivable.


(c)	Represents the recorded investment of the TDRs as of the end of the quarter in which the TDR occurs, and excludes immaterial amounts of accrued interest receivable.

Impaired Loans

Table 40: Impaired Loans



In millions	Unpaid Principal Balance		Recorded Investment		Associated Allowance		Average Recorded Investment (a)
September 30, 2017
Impaired loans with an associated allowance
Total commercial lending	$	711	$	389	$	93	$	435
Total consumer lending	1,028		982		194		1,086
Total impaired loans with an associated allowance	$	1,739	$	1,371	$	287	$	1,521
Impaired loans without an associated allowance
Total commercial lending	$	443	$	329			$	321
Total consumer lending	1,080		691				651
Total impaired loans without an associated allowance	$	1,523	$	1,020			$	972
Total impaired loans	$	3,262	$	2,391	$	287	$	2,493
December 31, 2016
Impaired loans with an associated allowance
Total commercial lending	$	742	$	477	$	105	$	497
Total consumer lending	1,237		1,185		226		1,255
Total impaired loans with an associated allowance	$	1,979	$	1,662	$	331	$	1,752
Impaired loans without an associated allowance
Total commercial lending	$	447	$	322			$	365
Total consumer lending	982		608				604
Total impaired loans without an associated allowance	$	1,429	$	930			$	969
Total impaired loans	$	3,408	$	2,592	$	331	$	2,721


(a)	Average recorded investment is for the nine months ended September 30, 2017 and the year ended December 31, 2016, respectively.