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Loans

3 Months Ended

Mar. 31, 2020

NOTE 3 Loans

Loan Portfolio

Our loan portfolio consists of two portfolio segments – Commercial Lending and Consumer Lending. Each of these segments comprises multiple loan classes. Classes are characterized by similarities in risk attributes and the manner in which we monitor and assess credit risk.



Commercial Lending		Consumer Lending
Commercial Lending		Consumer Lending
• Commercial		• Home equity
• Commercial real estate		• Residential real estate
• Equipment lease financing		• Automobile
		• Credit card
		• Education
		• Other consumer

See Note 1 Accounting Policies for additional information on our loan related policies.

Credit Quality

We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk within the loan portfolio based on our defined loan classes. In doing so, we use several credit quality indicators, including trends in delinquency rates, nonperforming status, analysis of PD and LGD ratings, updated credit scores, and originated and updated LTV ratios.

The measurement of delinquency status is based on the contractual terms of each loan. Loans that are 30 days or more past due in terms of payment are considered delinquent. With the adoption of the CECL standard, accruing loans past due as of March 31, 2020 include purchased credit deteriorated loans, while amounts as of December 31, 2019 excluded purchased impaired loans. See Note 1 Accounting Policies for additional information related to the adoption of this standard, including the discontinuation of purchased impaired loan accounting.

The following table presents the composition and delinquency status of our loan portfolio at March 31, 2020 and December 31, 2019.

Table 40: Analysis of Loan Portfolio



	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)			Total Loans (d)(e)			Accrued Interest Receivable (f)
March 31, 2020 (a)
Commercial Lending
Commercial	$	148,467		$	97		$	22		$	51		$	170			$	494					$	149,131		$	268
Commercial real estate	28,495			6			1						7				42						28,544			68
Equipment lease financing	6,987			42			2						44				30						7,061
Total commercial lending	183,949			145			25			51			221				566						184,736			336
Consumer Lending
Home equity	24,311			65			28						93				617			$	60		25,081			118
Residential real estate	20,934			173			82			300			555			(b)	292			469			22,250			59
Automobile	16,795			177			49			19			245				154						17,194			64
Credit card	6,956			59			37			70			166				10						7,132
Education	3,081			52			30			84			166			(b)							3,247			134
Other consumer	4,961			17			10			10			37				5						5,003			14
Total consumer lending	77,038			543			236			483			1,262				1,078			529			79,907			389
Total	$	260,987		$	688		$	261		$	534		$	1,483			$	1,644		$	529		$	264,643		$	725
Percentage of total loans	98.62		%	.26		%	.10		%	.20		%	.56		%		.62		%	.20		%	100.00		%


(a)	Amounts in table represent loans held for investment and do not include any associated valuation allowance.


(b)	Past due loan amounts include purchased credit deteriorated loans totaling $.1 billion and government insured or guaranteed Residential real estate loans and Education loans totaling $.4 billion and $.2 billion, respectively, at March 31, 2020.


(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, unamortized deferred fees and costs on originated loans, and premiums or discounts on purchased loans totaling $1.3 billion at March 31, 2020.


(e)	Collateral dependent loans totaled $1.1 billion at March 31, 2020. The majority of these loans are within the Home equity and Residential real estate loan classes and are secured by consumer real estate.


(f)	The accrued interest associated with our loan portfolio is included in Other assets on the Consolidated Balance Sheet.



	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 (h)				Nonperforming Loans			Fair Value Option Nonaccrual Loans (i)			Purchased Impaired Loans			Total Loans (j)
December 31, 2019 (g)
Commercial Lending
Commercial	$	124,695		$	102		$	30		$	85		$	217			$	425								$	125,337
Commercial real estate	28,061			4			1						5				44									28,110
Equipment lease financing	7,069			49			5						54				32									7,155
Total commercial lending	159,825			155			36			85			276				501									160,602
Consumer Lending
Home equity	23,791			58			24						82				669						$	543		25,085
Residential real estate	19,640			140			69			315			524			(h)	315			$	166		1,176			21,821
Automobile	16,376			178			47			18			243				135									16,754
Credit card	7,133			60			37			67			164				11									7,308
Education	3,156			55			34			91			180			(h)										3,336
Other consumer	4,898			15			11			9			35				4									4,937
Total consumer lending	74,994			506			222			500			1,228				1,134			166			1,719			79,241
Total	$	234,819		$	661		$	258		$	585		$	1,504			$	1,635		$	166		$	1,719		$	239,843
Percentage of total loans	97.90		%	.28		%	.11		%	.24		%	.63		%		.68		%	.07		%	.72		%	100.00		%


(g)	Amounts in table represent recorded investment and exclude loans held for sale. Recorded investment does not include any associated valuation allowance.

(h)

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 accreted interest income over the expected life of the loans. Past due loan amounts include government insured or guaranteed Residential real estate loans totaling $.4 billion and Education loans totaling $.2 billion at December 31, 2019.


(i)	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.


(j)	Net of unearned income, unamortized deferred fees and costs on originated loans, and premiums or discounts on purchased loans totaling $1.1 billion at December 31, 2019.

At March 31, 2020, we pledged $16.6 billion of commercial loans to the Federal Reserve Bank and $69.3 billion of residential real estate and other loans to the Federal Home Loan Bank as collateral for the ability to borrow, if necessary. The comparable amounts at December 31, 2019 were $16.9 billion and $68.0 billion, respectively. Amounts pledged reflect the unpaid principal balances.

Nonperforming Assets

Nonperforming assets include nonperforming loans and leases, OREO and foreclosed assets. Nonperforming loans are those loans accounted for at amortized cost whose credit quality has deteriorated to the extent that full collection of contractual principal and interest is not probable. Interest income is not recognized on these loans. Loans accounted for under the fair value option are reported as performing loans. However, when nonaccrual criteria is met, interest income is not recognized on these loans. Additionally, certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest are not reported as nonperforming loans and continue to accrue interest.

With the adoption of the CECL standard, nonperforming loans as of March 31, 2020 include purchased credit deteriorated loans. Amounts as of December 31, 2019 excluded purchased impaired loans as we were accreting interest income over the expected life of the loans. See Note 1 Accounting Policies for additional information related to the adoption of this standard and our nonperforming loan and lease policies.

The following table presents our nonperforming assets as of March 31, 2020 and December 31, 2019, respectively.

Table 41: Nonperforming Assets



Dollars in millions	March 31 2020			December 31 2019
Nonperforming loans
Total commercial lending	$	566		$	501
Total consumer lending (a)	1,078			1,134
Total nonperforming loans (b)	1,644			1,635
OREO and foreclosed assets	111			117
Total nonperforming assets	$	1,755		$	1,752
Nonperforming loans to total loans	.62		%	.68		%
Nonperforming assets to total loans, OREO and foreclosed assets	.66		%	.73		%
Nonperforming assets to total assets	.39		%	.43		%


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


(b)	Nonperforming loans for which there is no related ACL totaled $.3 billion at March 31, 2020.

Nonperforming loans also include certain loans whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. In accordance with applicable accounting guidance, these loans are considered TDRs. See Note 1 Accounting Policies and the TDR section of this Note 3 for additional information on TDRs.

Total nonperforming loans in Table 41 include TDRs of $.7 billion and $.9 billion at March 31, 2020 and December 31, 2019, respectively. TDRs that are performing, including consumer credit card TDR loans, totaled $.8 billion at both March 31, 2020 and December 31, 2019 and are excluded from nonperforming loans.

Additional Credit Quality Indicators by Loan Class

Commercial Loan Class

For commercial loans, we monitor the performance of the borrower in a disciplined and regular manner based upon the level of credit risk inherent in the loan. To evaluate the level of credit risk, we assign an internal risk rating reflecting the borrower’s PD and LGD. This two-dimensional credit risk rating methodology provides granularity in the risk monitoring process. These ratings are reviewed and updated, generally at least once per year. For small balance homogeneous pools of commercial loans, mortgages and leases, we apply scoring techniques to assist in determining the PD. Further, on a periodic basis, we update our LGD estimates associated with each rating grade based upon historical data. The combination of the PD and LGD ratings assigned to commercial loans, capturing both the combination of expectations of default and loss severity in event of default, reflects the relative estimated likelihood of loss at the reporting date. In general, loans with lower PD and LGD tend to have less likelihood of loss compared to loans with higher PD and LGD. The loss amount also considers an estimate of exposure at date of default, which we also periodically update based upon historical data.

Based upon the amount of the lending arrangement and our risk rating assessment, we follow a formal schedule of written periodic review. Quarterly, we conduct formal reviews of a market’s or business unit’s loan portfolio, focusing on those loans which we perceive to be of higher risk, based upon PDs and LGDs, or loans for which credit quality is weakening. If circumstances warrant, it is our practice to review any customer obligation and its level of credit risk more frequently. We attempt to proactively manage our loans by using various procedures that are customized to the risk of a given loan, including ongoing outreach, contact, and assessment of obligor financial conditions, collateral inspection and appraisal.

Commercial Real Estate Loan Class

We manage credit risk associated with our commercial real estate projects and commercial mortgages similar to commercial loans by analyzing PD and LGD. Additionally, risks associated with commercial real estate projects and commercial mortgage activities tend to be correlated to the loan structure and collateral location, project progress and business environment. As a result, these attributes are also monitored and utilized in assessing credit risk.

As with the commercial class, a formal schedule of periodic review is also performed to assess market/geographic risk and business unit/industry risk. Often as a result of these overviews, more in-depth reviews and increased scrutiny are placed on areas of higher risk, including adverse changes in risk ratings, deteriorating operating trends, and/or areas that concern management. These reviews are designed to assess risk and take actions to mitigate our exposure to such risks.

Equipment Lease Financing Loan Class

We manage credit risk associated with our equipment lease financing loan class similar to commercial loans by analyzing PD and LGD.

Based upon the dollar amount of the lease and the level of credit risk, we follow a formal schedule of periodic review. Generally, this occurs quarterly, although we have established practices to review such credit risk more frequently if circumstances warrant. Our review process entails analysis of the following factors: equipment value/residual value, exposure levels, jurisdiction risk, industry risk, guarantor requirements, and regulatory compliance as applicable.

Table 42: Commercial Lending Credit Quality Indicators (a)



	Amortized Cost Basis by Origination Year
March 31, 2020 - Dollars in millions	Three Months Ended March 31, 2020			2019			2018			2017			2016			Prior			Revolving Loans			Revolving Loans Converted to Term			Total Loans
Commercial
Pass Rated	$	7,250		$	18,695		$	11,957		$	7,943		$	5,399		$	11,807		$	78,664		$	61		$	141,776
Criticized	16			373			580			435			307			530			5,098			16			7,355
Total commercial	7,266			19,068			12,537			8,378			5,706			12,337			83,762			77			149,131
% of total commercial	4.8		%	12.8		%	8.4		%	5.6		%	3.8		%	8.3		%	56.2		%	.1		%	100.0		%
Commercial real estate
Pass Rated	898			6,812			4,221			3,766			2,973			8,908			203						27,781
Criticized	6			63			27			49			173			359			86						763
Total commercial real estate	904			6,875			4,248			3,815			3,146			9,267			289						28,544
% of total commercial real estate	3.2		%	24.0		%	14.9		%	13.4		%	11.0		%	32.5		%	1.0		%				100.0		%
Equipment lease financing
Pass Rated	334			1,438			1,252			1,038			680			2,059									6,801
Criticized	4			74			88			44			27			23									260
Total equipment lease financing	338			1,512			1,340			1,082			707			2,082									7,061
% of total equipment lease financing	4.8		%	21.4		%	19.0		%	15.3		%	10.0		%	29.5		%							100.0		%
Total commercial lending	$	8,508		$	27,455		$	18,125		$	13,275		$	9,559		$	23,686		$	84,051		$	77		$	184,736
% of total commercial lending	4.6		%	14.9		%	9.8		%	7.2		%	5.2		%	12.8		%	45.5		%	—			100.0		%



December 31, 2019 - Dollars in millions	Pass Rated		Criticized		Total Loans
Commercial	$	119,761	$	5,576	$	125,337
Commercial real estate	27,424		686		28,110
Equipment lease financing	6,891		264		7,155
Total commercial lending	$	154,076	$	6,526	$	160,602


(a)	Loans in our commercial lending portfolio are classified as Pass Rated or Criticized based on the regulatory definitions, which are driven by the PD and LGD ratings that we assign. The Criticized classification includes loans that were rated special mention, substandard or doubtful as of March 31, 2020 and December 31, 2019.

Home Equity and Residential Real Estate Loan Classes

We use several credit quality indicators, including delinquency information, nonperforming loan information, updated credit scores, originated and updated LTV ratios to monitor and manage credit risk within the home equity and residential real estate loan classes. A summary of credit quality indicators follows:

Delinquency/Delinquency Rates: We monitor trending of delinquency/delinquency rates for home equity and residential real estate loans. See Table 40 for additional information.

Nonperforming Loans: We monitor trending of nonperforming loans for home equity and residential real estate loans. See Table 40 for additional information.

Credit Scores: We use a national third-party provider to update FICO credit scores for home equity and residential real estate loans at least quarterly. The updated scores are incorporated into a series of credit management reports, which are utilized to monitor the risk in the loan classes.

LTV (inclusive of combined loan-to-value (CLTV) for first and subordinate lien positions): At least annually, we update the property values of real estate collateral and calculate an updated LTV ratio. For open-end credit lines secured by real estate in regions experiencing significant declines in property values, more frequent valuations may occur. We examine LTV migration and stratify LTV into categories to monitor the risk in the loan classes.

We use a combination of original LTV and updated LTV for internal risk management and reporting purposes (e.g., line management, loss mitigation strategies). In addition to the fact that estimated property values by their nature are estimates, given certain data

limitations it is important to note that updated LTVs may be based upon management’s assumptions (i.e., if an updated LTV is not provided by the third-party service provider, HPI changes will be incorporated in arriving at management’s estimate of updated LTV).

Updated LTV is estimated using modeled property values. The related estimates and inputs are based upon an approach that uses a combination of third-party automated valuation models, broker price opinions, HPI indices, property location, internal and external balance information, origination data and management assumptions. We generally utilize origination lien balances provided by a third-party, where applicable, which do not include an amortization assumption when calculating updated LTV. Accordingly, the results of the calculations do not represent actual appraised loan level collateral or updated LTV based upon lien balances held by others, and as such, are necessarily imprecise and subject to change as we refine our methodology.

The following table presents credit quality indicators for the home equity and residential real estate loan classes.

Table 43: Home Equity and Residential Real Estate Loans Credit Quality Indicators



	Amortized Cost Basis by Origination Year
March 31, 2020 – Dollars in millions	Three months ended March 31, 2020			2019			2018			2017			2016			Prior			Revolving Loans			Revolving Loans Converted to Term			Total Loans
Home Equity
Current estimated LTV ratios																									.
Greater than or equal to 100%				$	18		$	27		$	30		$	18		$	144		$	722		$	389		$	1,348
Greater than or equal to 90% to less than 100%				45			37			20			15			87			684			263			1,151
Less than 90%	$	785		2,584			761			1,041			875			4,880			8,502			3,154			22,582
Total home equity	$	785		$	2,647		$	825		$	1,091		$	908		$	5,111		$	9,908		$	3,806		$	25,081
Updated FICO scores
Greater than 660	$	773		$	2,521		$	761		$	1,026		$	856		$	4,609		$	9,339		$	2,871		$	22,756
Less than or equal to 660	12			126			64			64			51			493			555			842			2,207
No FICO score available										1			1			9			14			93			118
Total home equity	$	785		$	2,647		$	825		$	1,091		$	908		$	5,111		$	9,908		$	3,806		$	25,081
% of total home equity	3.1		%	10.6		%	3.3		%	4.3		%	3.6		%	20.4		%	39.5		%	15.2		%	100.0		%
Residential Real Estate
Current estimated LTV ratios
Greater than or equal to 100%				$	3		$	58		$	74		$	68		$	241								$	444
Greater than or equal to 90% to less than 100%	$	4		27			61			64			50			155									361
Less than 90%	1,757			6,236			1,867			2,752			2,697			5,556									20,865
Government insured or guaranteed loans				9			13			17			25			516									580
Total residential real estate	$	1,761		$	6,275		$	1,999		$	2,907		$	2,840		$	6,468								$	22,250
Updated FICO scores
Greater than 660	$	1,757		$	6,198		$	1,945		$	2,844		$	2,732		$	5,166								$	20,642
Less than or equal to 660	2			65			41			41			79			693									921
No FICO score available	2			3						5			4			93									107
Government insured or guaranteed loans				9			13			17			25			516									580
Total residential real estate	$	1,761		$	6,275		$	1,999		$	2,907		$	2,840		$	6,468								$	22,250
% of total residential real estate	7.9		%	28.1		%	9.0		%	13.1		%	12.8		%	29.1		%							100.0		%



	Home equity		Residential real estate
December 31, 2019 - Dollars in millions	Home equity		Residential real estate
Current estimated LTV ratios
Greater than or equal to 125%	$	366	$	112
Greater than or equal to 100% to less than 125%	877		221
Greater than or equal to 90% to less than 100%	1,047		340
Less than 90%	22,068		19,305
No LTV ratio available	184		83
Government insured or guaranteed loans			584
Purchased impaired loans	543		1,176
Total loans	$	25,085	$	21,821
Updated FICO Scores
Greater than 660	$	22,245	$	19,341
Less than or equal to 660	2,019		569
No FICO score available	278		151
Government insured or guaranteed loans			584
Purchased impaired loans	543		1,176
Total loans	$	25,085	$	21,821

Automobile, Credit Card, Education and Other Consumer Loan Classes

We monitor a variety of credit quality information in the management of these consumer loan classes. For all loan types, we generally use a combination of internal loan parameters as well as an updated FICO score. We use FICO scores as a primary credit quality indicator for automobile and credit card loans, as well as non-government guaranteed or non-insured education loans and other secured and unsecured lines and loans. Internal credit metrics, such as delinquency status, are heavily relied upon as credit quality indicators 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.

Along with the monitoring of delinquency trends and losses for each class, FICO credit score updates are obtained at least quarterly along with a variety of credit bureau attributes. Loans with high FICO scores tend to have a lower likelihood of loss. Conversely, loans with low FICO scores tend to have a higher likelihood of loss.

The following table presents credit quality indicators for the automobile, credit card, education and other consumer loan classes.

Table 44: Credit Quality Indicators for Automobile, Credit Card, Education and Other Consumer Loan Classes



	Amortized Cost Basis by Origination Year
March 31, 2020 – Dollars in millions	Three months ended March 31, 2020			2019			2018			2017			2016			Prior			Revolving Loans			Revolving Loans Converted to Term			Total Loans
Automobile
FICO score greater than 719	$	1,586		$	4,090		$	1,955		$	1,164		$	725		$	275								$	9,795
650 to 719	320			2,112			1,225			571			256			105									4,589
620 to 649	14			525			306			122			47			21									1,035
Less than 620	8			673			633			283			119			59									1,775
Total automobile	$	1,928		$	7,400		$	4,119		$	2,140		$	1,147		$	460								$	17,194
% of total automobile	11.2		%	43.0		%	24.0		%	12.4		%	6.7		%	2.7		%							100.0		%
Credit card
FICO score greater than 719																			$	3,564		$	10		$	3,574
650 to 719																			2,370			27			2,397
620 to 649																			442			12			454
Less than 620																			547			49			596
No FICO score available or required (a)																			108			3			111
Total credit card																			$	7,031		$	101		$	7,132
% total credit card																			98.6		%	1.4		%	100.0		%
Education
FICO score greater than 719	$	7		$	89		$	121		$	94		$	78		$	703								$	1,092
650 to 719	2			14			19			12			9			124									180
620 to 649				1			2			1			1			20									25
Less than 620				1			1			1			1			24									28
No FICO score available or required (a)	3			11			7			6			1			1									29
Total loans using FICO credit metric	12			116			150			114			90			872									1,354
Other internal credit metrics	11			59												1,823									1,893
Total education	$	23		$	175		$	150		$	114		$	90		$	2,695								$	3,247
% total education	.7		%	5.4		%	4.6		%	3.5		%	2.8		%	83.0		%							100.0		%
Other consumer
FICO score greater than 719	$	218		$	623		$	219		$	71		$	25		$	90		$	230		$	1		$	1,477
650 to 719	126			349			158			40			13			26			162			1			875
620 to 649	17			56			29			6			2			4			26						140
Less than 620	5			45			37			12			4			9			44			1			157
No FICO score available or required (a)	1															2			6						9
Total loans using FICO credit metric	367			1,073			443			129			44			131			468			3			2,658
Other internal credit metrics	14			74			49			34			65			88			2,018			3			2,345
Total other consumer	$	381		$	1,147		$	492		$	163		$	109		$	219		$	2,486		$	6		$	5,003
% total other consumer	7.6		%	22.9		%	9.8		%	3.3		%	2.2		%	4.4		%	49.7		%	.1		%	100.0		%




Dollars in millions	Automobile		Credit Card		Education		Other Consumer
December 31, 2019
FICO score greater than 719	$	9,232	$	3,867	$	1,139	$	1,421
650 to 719	4,577		2,326		197		843
620 to 649	1,001		419		25		132
Less than 620	1,603		544		27		143
No FICO score available or required (a)	341		152		15		27
Total loans using FICO credit metric	16,754		7,308		1,403		2,566
Consumer loans using other internal credit metrics					1,933		2,371
Total loans	$	16,754	$	7,308	$	3,336	$	4,937
Weighted-average updated FICO score (b)	726		724		773		727

(a)

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 category and, when necessary, takes actions to mitigate the credit risk.


(b)	Weighted-average updated FICO score excludes accounts with no FICO score available or required.

Troubled Debt Restructurings (TDRs)

A TDR is a loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulty. Loans that have been restructured for COVID-19 related hardships and meet certain criteria under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) are not categorized as TDRs. TDRs result from our loss mitigation activities, and include rate reductions, principal forgiveness, postponement/reduction of scheduled amortization, and extensions, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. Additionally, TDRs also result from borrowers that have been discharged from personal liability through Chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to us. In those situations where principal is forgiven, the amount of such principal forgiveness is immediately charged off.

Potential incremental losses or recoveries on TDRs have been factored into the ACL estimates for each loan class under the methodologies described in Note 1 Accounting Policies. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is ultimately repaid in full, the collateral is foreclosed upon, or it is fully charged off.

Table 45 quantifies the number of loans that were classified as TDRs as well as the change in the loans’ amortized cost basis as a result of becoming a TDR during the three months ended March 31, 2020. Amounts for the three months ended March 31, 2019 represent recorded investment. Additionally, the table provides information about the types of TDR concessions. See Note 3 Asset Quality in our 2019 Form 10-K for additional discussion of TDRs.

Table 45: Financial Impact and TDRs by Concession Type



			Pre-TDR Amortized Cost Basis (b)		Post-TDR Amortized Cost Basis (c)
During the three months ended March 31, 2020 Dollars in millions (a)	Number of Loans		Pre-TDR Amortized Cost Basis (b)		Principal Forgiveness		Rate Reduction		Other		Total
Total commercial lending		13	$	62	$	6			$	37	$	43
Total consumer lending		3,567	36				$	22	10		32
Total TDRs		3,580	$	98	$	6	$	22	$	47	$	75

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

(b) Represents the amortized cost basis of the loans as of the quarter end prior to TDR designation.



			Pre-TDR Recorded Investment (e)		Post-TDR Recorded Investment (f)
During the three months ended March 31, 2019 Dollars in millions (d)	Number of Loans		Pre-TDR Recorded Investment (e)		Principal Forgiveness	Rate Reduction		Other		Total
Total commercial lending		22	$	105				$	109	$	109
Total consumer lending		3,814	42			$	24	16		40
Total TDRs		3,836	$	147		$	24	$	125	$	149

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

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

(f) 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.

After a loan is determined to be a TDR, we continue to track its performance under its most recent restructured terms. We consider a TDR to have subsequently defaulted when it becomes 60 days past due after the most recent date the loan was restructured. The amortized cost basis of loans that were both (i) classified as TDRs or were subsequently modified during each 12-month period preceding January 1, 2020 and January 1, 2019, respectively, and (ii) subsequently defaulted during the three months ended March 31, 2020 and March 31, 2019 totaled $29 million and $18 million respectively. The comparable amount reflects recorded investment.

Allowance for Credit Losses

Allowance for Credit Losses - Loans and Leases

We maintain the ACL for loans and leases at levels that we believe to be appropriate to absorb expected credit losses incurred in the portfolios as of the balance sheet date. See Note 1 Accounting Policies for a discussion of the methodologies used to determine this allowance. A rollforward of the ACL for loans and leases follows.

Table 46: Rollforward of Allowance for Credit Losses - Loans and Leases



At or for the three months ended March 31, 2020 Dollars in millions	Commercial Lending			Consumer Lending			Total
ACL - loans and leases
December 31, 2019 (a)	$	1,812		$	930		$	2,742
Adoption of ASU 2016-13 (b)	(304		)	767			463
January 1, 2020	$	1,508		$	1,697		$	3,205
Charge-offs	(83		)	(221		)	(304		)
Recoveries	24			68			92
Net (charge-offs)	(59		)	(153		)	(212		)
Provision for credit losses (c)	531			421			952
Other	(1		)				(1		)
March 31, 2020	$	1,979		$	1,965		$	3,944
Portfolio segment ACL as a percentage of total ACL for loans and leases	50		%	50		%	100		%
Ratio of ACL for loans and leases to total loans	1.07		%	2.46		%	1.49		%

(a) Amounts as of December 31, 2019 represent the ALLL.

(b) Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020 and our transition from an incurred loss methodology for our reserves to an expected credit loss methodology.

(c) The Provision for credit losses on the Consolidated Income Statement includes $952 million related to loans and leases, $9 million related to other financial assets and a recapture of credit losses for unfunded lending related commitments totaling $47 million for the three months ended March 31, 2020. See Table 47 for additional information related to our unfunded lending related commitments.

Allowance for Credit Losses - Unfunded Lending Related Commitments

We maintain the ACL for unfunded lending related commitments at a level we believe is appropriate as of the balance sheet date to absorb expected credit losses on these exposures. See Note 1 Accounting Policies for additional information. A rollforward of this allowance follows.

Table 47: Rollforward of Allowance for Credit Losses - Unfunded Lending Related Commitments



At or for the three months ended March 31, 2020 Dollars in millions	Commercial Lending			Consumer Lending			Total
ACL - unfunded lending related commitments
December 31, 2019 (a)	$	316		$	2		$	318
Adoption of ASU 2016-13 (b)	53			126			179
January 1, 2020	369			128			497
Provision for (recapture of ) credit losses	(25		)	(22		)	(47		)
March 31, 2020	$	344		$	106		$	450
Portfolio segment ACL as a percentage of total ACL for unfunded lending related commitments	76		%	24		%	100		%

(a) Amounts at December 31, 2019 represent the allowance for unfunded loan commitments and letters of credit.

See Note 8 Commitments for additional information about the underlying commitments related to this allowance.

The following graph presents an analysis of changes impacting our ACL for the three months ended March 31, 2020.

Table 48: Analysis of Changes in the Allowance for Credit Losses (a)

In millions

(a) Excludes allowances for investment securities and other financial assets.

(b) Portfolio changes represent the impact of increases/decreases in loan balances, age and mix due to new originations/purchases, as well as credit quality and net charge-off activity.

The increase in the ACL as of March 31, 2020 was primarily attributable to the significant economic impact of COVID-19 along with loan growth in the commercial lending portfolio, reflecting higher utilization.

Allowance for Loan and Lease Losses

Prior to January 1, 2020, we maintained our ALLL at levels we believed to be appropriate to absorb estimated probable credit losses incurred in the portfolios as of the balance sheet date. We used the two main portfolio segments - Commercial Lending and Consumer Lending, and developed and documented the ALLL under separate methodologies for each of these portfolio segments. See Note 1 Accounting Policies in our 2019 Form 10-K for a description of the accounting policies for ALLL.

A rollforward of the ALLL and associated loan data follows:

Table 49: Rollforward of Allowance for Loan and Lease Losses and Associated Loan Data



At or for the three months ended March 31, 2019 Dollars in millions	Commercial Lending			Consumer Lending			Total
Allowance for loan and lease losses
January 1, 2019	$	1,663		$	966		$	2,629
Charge-offs	(31		)	(184		)	(215		)
Recoveries	19			60			79
Net (charge-offs)	(12		)	(124		)	(136		)
Provision for credit losses	80			109			189
Net decrease in allowance for unfunded loan commitments and letters of credit	5			1			6
Other				4			4
March 31, 2019	$	1,736		$	956		$	2,692
TDRs individually evaluated for impairment	$	27		$	130		$	157
Other loans individually evaluated for impairment	60						60
Loans collectively evaluated for impairment	1,649			551			2,200
Purchased impaired loans				275			275
March 31, 2019	$	1,736		$	956		$	2,692
Loan portfolio
TDRs individually evaluated for impairment	$	456		$	1,412		$	1,868
Other loans individually evaluated for impairment	190						190
Loans collectively evaluated for impairment	157,796			69,732			227,528
Fair value option loans (a)				758			758
Purchased impaired loans				1,949			1,949
March 31, 2019	$	158,442		$	73,851		$	232,293
Portfolio segment ALLL as a percentage of total ALLL	64		%	36		%	100		%
Ratio of ALLL to total loans	1.10		%	1.29		%	1.16		%

(a) Loans accounted for under the fair value option were not evaluated for impairment as these loans are accounted for at fair value. Accordingly, there was no allowance recorded on those loans.