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Loans and Related Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

Loan Portfolio

Our loan portfolio consists of two portfolio segments – Commercial and Consumer. 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						Consumer

• Commercial and industrial						• Residential real estate
• Commercial real estate						• Home equity
• 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. Loan delinquencies include government insured or guaranteed loans and loans accounted for under the fair value option.

Table 40 presents the composition and delinquency status of our loan portfolio at March 31, 2023 and December 31, 2022. We manage credit risk based on the risk profile of the borrower, repayment sources, underlying collateral and other support given current events, economic conditions and expectations. We refine our practices to meet the changing environment resulting from rising inflation levels, labor-related supply chain pressures, higher interest rates, and structural and secular changes fostered by the pandemic. To mitigate losses and enhance customer support, we offer loan modifications and collection programs to assist our customers. Under the CARES Act credit reporting rules, certain loans modified due to COVID-19 related hardships are not being reported as past due as of March 31, 2023 and December 31, 2022 based on the contractual terms of the loan, even where borrowers may not be making payments on their loans during the modification period.

Table 40: Analysis of Loan Portfolio (a) (b)


	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 (c)				Nonperforming Loans			Fair Value Option Nonaccrual Loans (d)			Total Loans (e)(f)
March 31, 2023
Commercial
Commercial and industrial	$	182,175		$	119		$	21		$	134		$	274			$	548					$	182,997
Commercial real estate	35,628			25			1						26				337						35,991
Equipment lease financing	6,380			33			5						38				6						6,424
Total commercial	224,183			177			27			134			338				891						225,412
Consumer
Residential real estate	44,558			245			98			178			521			(c)	432			$	556		46,067
Home equity	25,537			48			18						66				523			77			26,203
Automobile	14,676			79			18			5			102				145						14,923
Credit card	6,795			48			35			74			157				9						6,961
Education	2,019			35			21			56			112			(c)							2,131
Other consumer	4,738			13			8			9			30				10						4,778
Total consumer	98,323			468			198			322			988				1,119			633			101,063
Total	$	322,506		$	645		$	225		$	456		$	1,326			$	2,010		$	633		$	326,475
Percentage of total loans	98.78		%	0.20		%	0.07		%	0.14		%	0.41		%		0.62		%	0.19		%	100.00		%
December 31, 2022
Commercial
Commercial and industrial	$	181,223		$	169		$	27		$	137		$	333			$	663					$	182,219
Commercial real estate	36,104			19			4						23				189						36,316
Equipment lease financing	6,484			20			4						24				6						6,514
Total commercial	223,811			208			35			137			380				858						225,049
Consumer
Residential real estate	44,306			281			112			199			592			(c)	424			$	567		45,889
Home equity	25,305			53			20						73				526			79			25,983
Automobile	14,543			106			25			7			138				155						14,836
Credit card	6,906			50			35			70			155				8						7,069
Education	2,058			34			22			59			115			(c)							2,173
Other consumer	4,975			15			12			10			37				14						5,026
Total consumer	98,093			539			226			345			1,110				1,127			646			100,976
Total	$	321,904		$	747		$	261		$	482		$	1,490			$	1,985		$	646		$	326,025
Percentage of total loans	98.73		%	0.23		%	0.08		%	0.15		%	0.46		%		0.61		%	0.20		%	100.00		%

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

(b)The accrued interest associated with our loan portfolio totaled $1.3 billion and $1.2 billion at March 31, 2023 and December 31, 2022, respectively. These amounts are included in Other assets on the Consolidated Balance Sheet.

(c)Past due loan amounts include government insured or guaranteed Residential real estate loans and Education loans totaling $0.3 billion and $0.1 billion at both March 31, 2023 and December 31, 2022, respectively.

(d)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 policy criteria. Given that these loans are not accounted for at amortized cost, these loans have been excluded from the nonperforming loan population.

(e)Includes unearned income, unamortized deferred fees and costs on originated loans and premiums or discounts on purchased loans totaling $0.8 billion and $0.9 billion at March 31, 2023 and December 31, 2022, respectively.

(f)Collateral dependent loans totaled $1.2 billion and $1.3 billion at March 31, 2023 and December 31, 2022, respectively.

At March 31, 2023, we pledged $27.8 billion of commercial and other loans to the Federal Reserve Bank and $94.0 billion of residential real estate and other loans to the FHLB as collateral for the ability to borrow, if necessary. The comparable amounts at December 31, 2022 were $28.1 billion and $90.4 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. See Note 1 Accounting Policies for additional information on our nonperforming loan and lease policies.

The following table presents our nonperforming assets as of March 31, 2023 and December 31, 2022, respectively:

Table 41: Nonperforming Assets


Dollars in millions	March 31, 2023			December 31, 2022
Nonperforming loans (a)
Commercial	$	891		$	858
Consumer (b)	1,119			1,127
Total nonperforming loans (c)	2,010			1,985
OREO and foreclosed assets	38			34
Total nonperforming assets	$	2,048		$	2,019
Nonperforming loans to total loans	0.62		%	0.61		%
Nonperforming assets to total loans, OREO and foreclosed assets	0.63		%	0.62		%
Nonperforming assets to total assets	0.36		%	0.36		%

(a)In connection with the adoption of ASU 2022-02, nonperforming loans as of March 31, 2023 include certain loans where terms were modified as a result of a borrower’s financial difficulty. Prior period amounts included nonperforming TDRs, for which accounting guidance was eliminated effective January 1, 2023. See Note 1 Accounting Policies and the Loan Modifications to Borrowers Experiencing Financial Difficulty section of this Note 3 for more information on our adoption of this ASU.

(b)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.

(c)Nonperforming loans for which there is no related ALLL totaled $0.6 billion at March 31, 2023 and primarily include loans with a fair value of collateral that exceeds the amortized cost basis. The comparable amount at December 31, 2022 was $0.7 billion.

Additional Credit Quality Indicators by Loan Class

Commercial Loan Classes

See Note 4 Loans and Related Allowance for Credit Losses in our 2022 Form 10-K for additional information related to these loan classes, including discussion around the credit quality indicators that we use to monitor and manage the credit risk associated with each loan class.

The following table presents credit quality indicators for our commercial loan classes:

Table 42: Commercial Credit Quality Indicators (a) (b)


	Term Loans by Origination Year
March 31, 2023 In millions	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total
Commercial and industrial
Pass Rated	$	7,365	$	37,110	$	10,730	$	7,134	$	5,534	$	16,109	$	91,552	$	67	$	175,601
Criticized	31		1,541		422		375		246		843		3,908		30		7,396
Total commercial and industrial loans	$	7,396	$	38,651	$	11,152	$	7,509	$	5,780	$	16,952	$	95,460	$	97	$	182,997
Gross charge-offs (c)	$	5	$	4	$	22	$	4			$	9	$	55	5		$	104
Commercial real estate
Pass Rated	$	672	$	9,321	$	4,043	$	2,993	$	5,477	$	9,602	$	350			$	32,458
Criticized			280		98		322		653		2,177		3				3,533
Total commercial real estate loans	$	672	$	9,601	$	4,141	$	3,315	$	6,130	$	11,779	$	353			$	35,991
Gross charge-offs									$	12							$	12
Equipment lease financing
Pass Rated	$	325	$	1,751	$	909	$	887	$	619	$	1,732					$	6,223
Criticized	8		60		41		41		29		22						201
Total equipment lease financing loans	$	333	$	1,811	$	950	$	928	$	648	$	1,754					$	6,424
Gross charge-offs					$	1	$	3									$	4
Total commercial loans	$	8,401	$	50,063	$	16,243	$	11,752	$	12,558	$	30,485	$	95,813	$	97	$	225,412
Total commercial gross charge-offs	$	5	$	4	$	23	$	7	$	12	$	9	$	55	5		$	120


	Term Loans by Origination Year
December 31, 2022 In millions	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Commercial and industrial
Pass Rated	$	41,685	$	12,493	$	8,134	$	6,261	$	4,209	$	13,165	$	89,384	$	69	$	175,400
Criticized	1,259		423		277		299		297		551		3,682		31		6,819
Total commercial and industrial	42,944		12,916		8,411		6,560		4,506		13,716		93,066		100		182,219
Commercial real estate
Pass Rated	8,835		4,153		3,266		5,511		3,005		7,454		450				32,674
Criticized	348		37		322		758		807		1,367		3				3,642
Total commercial real estate	9,183		4,190		3,588		6,269		3,812		8,821		453				36,316
Equipment lease financing
Pass Rated	1,797		962		942		670		410		1,495						6,276
Criticized	60		55		56		39		17		11						238
Total equipment lease financing	1,857		1,017		998		709		427		1,506						6,514
Total commercial	$	53,984	$	18,123	$	12,997	$	13,538	$	8,745	$	24,043	$	93,519	$	100	$	225,049

(a)Loans in our commercial 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, 2023 and December 31, 2022.

(b)Gross charge-offs are presented on a year-to-date basis, as of the reporting date.

(c)Gross charge-offs for the 2023 origination year include deposit overdrafts.

Consumer Loan Classes

associated with each loan class.

Residential Real Estate and Home Equity

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

Table 43: Credit Quality Indicators for Residential Real Estate and Home Equity Loan Classes (a)


	Term Loans by Origination Year
March 31, 2023 In millions	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total
Residential real estate
Current estimated LTV ratios
Greater than 100%	$	4	$	41	$	98	$	36	$	11	$	46					$	236
Greater than or equal to 80% to 100%	388		4,433		1,469		295		95		134						6,814
Less than 80%	804		5,983		14,606		6,818		2,273		7,780						38,264
No LTV available	43				23						3						69
Government insured or guaranteed loans	1		13		17		70		39		544						684
Total residential real estate loans	$	1,240	$	10,470	$	16,213	$	7,219	$	2,418	$	8,507					$	46,067
Updated FICO scores
Greater than or equal to 780	$	520	$	7,179	$	12,230	$	5,078	$	1,533	$	4,291					$	30,831
720 to 779	556		2,656		2,957		1,364		511		1,651						9,695
660 to 719	87		541		768		404		182		868						2,850
Less than 660	9		64		133		121		91		807						1,225
No FICO score available	67		17		108		182		62		346						782
Government insured or guaranteed loans	1		13		17		70		39		544						684
Total residential real estate loans	$	1,240	$	10,470	$	16,213	$	7,219	$	2,418	$	8,507					$	46,067
Gross charge-offs							$	1			$	2					$	3
Home equity
Current estimated LTV ratios
Greater than 100%					$	3	$	15	$	8	$	17	$	303	$	217	$	563
Greater than or equal to 80% to 100%					6		55		27		35		1,185		1,892		3,200
Less than 80%					167		2,020		928		2,976		7,227		9,122		22,440
Total home equity loans					$	176	$	2,090	$	963	$	3,028	$	8,715	$	11,231	$	26,203
Updated FICO scores
Greater than or equal to 780					$	109	$	1,297	$	520	$	1,839	$	4,941	$	5,823	$	14,529
720 to 779					44		523		254		603		2,237		2,996		6,657
660 to 719					18		205		130		316		1,160		1,615		3,444
Less than 660					5		62		58		261		364		734		1,484
No FICO score available							3		1		9		13		63		89
Total home equity loans					$	176	$	2,090	$	963	$	3,028	$	8,715	$	11,231	$	26,203
Gross charge-offs											$	2			$	4	$	6


(Continued from previous page)	Term Loans by Origination Year
December 31, 2022 In millions	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Residential real estate
Current estimated LTV ratios
Greater than 100%	$	4	$	52	$	20	$	10	$	4	$	41					$	131
Greater than or equal to 80% to 100%	1,185		678		232		84		24		92						2,295
Less than 80%	9,396		15,844		7,074		2,346		822		7,220						42,702
No LTV available			61				3				4						68
Government insured or guaranteed loans	9		15		66		39		28		536						693
Total residential real estate	$	10,594	$	16,650	$	7,392	$	2,482	$	878	$	7,893					$	45,889
Updated FICO scores
Greater than or equal to 780	$	6,825	$	12,596	$	5,276	$	1,623	$	463	$	4,027					$	30,810
720 to 779	3,172		3,024		1,369		476		180		1,457						9,678
660 to 719	514		744		378		189		98		796						2,719
Less than 660	63		108		110		88		71		740						1,180
No FICO score available	11		163		193		67		38		337						809
Government insured or guaranteed loans	9		15		66		39		28		536						693
Total residential real estate	$	10,594	$	16,650	$	7,392	$	2,482	$	878	$	7,893					$	45,889
Home equity
Current estimated LTV ratios
Greater than 100%			$	4	$	14	$	9	$	2	$	15	$	268	$	137	$	449
Greater than or equal to 80% to 100%			4		51		27		4		31		854		1,149		2,120
Less than 80%			172		2,078		961		285		2,851		7,780		9,287		23,414
Total home equity			$	180	$	2,143	$	997	$	291	$	2,897	$	8,902	$	10,573	$	25,983
Updated FICO scores
Greater than or equal to 780			$	110	$	1,357	$	554	$	155	$	1,791	$	5,093	$	5,545	$	14,605
720 to 779			47		515		248		64		567		2,305		2,843		6,589
660 to 719			19		211		140		42		288		1,146		1,449		3,295
Less than 660			4		57		54		29		242		342		671		1,399
No FICO score available					3		1		1		9		16		65		95
Total home equity			$	180	$	2,143	$	997	$	291	$	2,897	$	8,902	$	10,573	$	25,983

(a)Gross charge-offs are presented on a year-to-date basis, as of the reporting date.

Automobile, Credit Card, Education and Other Consumer

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

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


	Term Loans by Origination Year
March 31, 2023 In millions	2023		2022		2021		2020		2019		Prior		Revolving Loans		Revolving Loans Converted to Term		Total
Automobile
Updated FICO scores
Greater than or equal to 780	$	971	$	1,982	$	1,953	$	800	$	634	$	234					$	6,574
720 to 779	474		1,647		1,176		491		457		218						4,463
660 to 719	212		890		600		303		340		186						2,531
Less than 660	15		259		293		214		330		244						1,355

Total automobile loans	$	1,672	$	4,778	$	4,022	$	1,808	$	1,761	$	882					$	14,923
Gross charge-offs			$	5	$	6	$	5	$	10	$	7					$	33
Credit card
Updated FICO scores
Greater than or equal to 780													$	1,876	$	1	$	1,877
720 to 779													1,913		5		1,918
660 to 719													1,985		13		1,998
Less than 660													1,021		35		1,056
No FICO score available or required (b)													109		3		112
Total credit card loans													$	6,904	$	57	$	6,961
Gross charge-offs													$	67	$	7	$	74
Education
Updated FICO scores
Greater than or equal to 780	$	2	$	87	$	51	$	46	$	57	$	385					$	628
720 to 779	9		55		27		23		29		161						304
660 to 719	7		19		8		8		9		65						116
Less than 660	2		2		1		1		2		25						33
No FICO score available or required (b)	5		8		6		5		2		1						27
Total loans using FICO credit metric	25		171		93		83		99		637						1,108
Other internal credit metrics											1,023						1,023
Total education loans	$	25	$	171	$	93	$	83	$	99	$	1,660					$	2,131
Gross charge-offs									$	1	$	3					$	4
Other consumer
Updated FICO scores
Greater than or equal to 780	$	57	$	203	$	78	$	41	$	34	$	24	$	41	$	2	$	480
720 to 779	93		263		101		53		47		25		82		2		666
660 to 719	62		191		96		56		51		27		90		2		575
Less than 660			48		45		33		34		20		44		2		226

Total loans using FICO credit metric	212		705		320		183		166		96		257		8		1,947
Other internal credit metrics	6		126		36		36		75		29		2,502		21		2,831
Total other consumer loans	$	218	$	831	$	356	$	219	$	241	$	125	$	2,759	$	29	$	4,778
Gross charge-offs (c)	$	16	$	3	$	5	$	4	$	6	$	4	$	4			$	42


(Continued from previous page)	Term Loans by Origination Year
December 31, 2022 In millions	2022		2021		2020		2019		2018		Prior		Revolving Loans		Revolving Loans Converted to Term		Total Loans
Updated FICO Scores
Automobile
Greater than or equal to 780	$	2,390	$	2,162	$	922	$	760	$	241	$	75					$	6,550
720 to 779	1,702		1,312		561		538		222		69						4,404
660 to 719	854		660		341		401		187		56						2,499
Less than 660	193		290		230		368		228		74						1,383
Total automobile	$	5,139	$	4,424	$	2,054	$	2,067	$	878	$	274					$	14,836
Credit card
Greater than or equal to 780													$	1,954	$	2	$	1,956
720 to 779													1,994		6		2,000
660 to 719													1,957		13		1,970
Less than 660													1,001		35		1,036
No FICO score available or required (b)													104		3		107
Total credit card													$	7,010	$	59	$	7,069
Education
Greater than or equal to 780	$	42	$	53	$	48	$	61	$	51	$	357					$	612
720 to 779	39		27		24		30		24		143						287
660 to 719	21		8		8		9		8		59						113
Less than 660	4		1		1		2		2		24						34
No FICO score available or required (b)	20		8		7		3				1						39
Education loans using FICO credit metric	126		97		88		105		85		584						1,085
Other internal credit metrics											1,088						1,088
Total education	$	126	$	97	$	88	$	105	$	85	$	1,672					$	2,173
Other consumer
Greater than or equal to 780	$	224	$	97	$	53	$	46	$	14	$	18	$	47	$	2	$	501
720 to 779	302		122		68		62		20		15		89		2		680
660 to 719	229		110		68		66		28		8		95		2		606
Less than 660	32		48		37		40		20		6		44		2		229
Other consumer loans using FICO credit metric	787		377		226		214		82		47		275		8		2,016
Other internal credit metrics	125		43		40		34		7		29		2,720		12		3,010
Total other consumer	$	912	$	420	$	266	$	248	$	89	$	76	$	2,995	$	20	$	5,026

(a)Gross charge-offs are presented on a year-to-date basis, as of the reporting date.

(b)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.

(c)Gross charge-offs for the 2023 origination year include deposit overdrafts.

Loan Modifications to Borrowers Experiencing Financial Difficulty

On January 1, 2023, we adopted ASU 2022-02, which eliminates the accounting guidance for TDRs and enhances the disclosure requirements for certain loan modifications when a borrower is experiencing financial difficulty.

We modify loans to borrowers experiencing financial difficulty as a result of our loss mitigation activities. A variety of solutions are offered to borrowers, including loan modifications that may result in principal forgiveness, interest rate reductions, term extensions, payment delays, or combinations thereof.

•Principal forgiveness includes principal and accrued interest forgiveness.

•Interest rate reductions include modifications where the interest rate is reduced and interest is deferred.

•Term extensions extend the original contractual maturity date of the loan.

•Payment delays consist of modifications where we expect to collect contractual amounts due, but that result in a delay in the receipt of payments specified under the original loan terms. We generally consider payment delays to be insignificant when the delay is three months or less.

•We also offer repayment plans for some of our credit card and unsecured line of credit products, which provide for a reduced payment and interest rate for a specific period of time.

•Additionally, modifications to borrowers experiencing financial difficulty also result from borrowers that have been discharged from personal liability through Chapter 7 bankruptcy and have not formally reaffirmed their obligations to us, and those that enter into trial modifications.

Loan modifications granted to borrowers experiencing financial difficulty exclude loans held for sale and loans accounted for under the fair value option. Government insured or guaranteed loans, commercial loans with an appraised value of collateral that exceeds the loan value, and loans with guarantor support are evaluated for inclusion in our disclosed population of loan modifications granted to borrowers experiencing financial difficulty, if the loan has been modified in the current period. Refer to Note 1 Accounting Policies for additional information around our adoption of ASU 2022-02.

The following table presents the amortized cost basis, as of March 31, 2023, of loans modified to borrowers experiencing financial difficulty during the three months ended March 31, 2023:

Table 45: Loan Modifications Granted to Borrowers Experiencing Financial Difficulty (a)


Three months ended March 31, 2023 Dollars in millions	Principal Forgiveness		Term Extension		Payment Delay		Repayment Plan		Interest Rate Reduction and Term Extension		Other (b)		Total		% of Loan Class
Commercial
Commercial and industrial	$	1	$	198	$	20					$	5	$	224	0.12	%
Commercial real estate			273										273		0.76	%

Total commercial	1		471		20						5		497		0.22	%
Consumer
Residential real estate					46				$	2	1		49		0.11	%
Home equity					1				2		2		5		0.02	%

Credit card							$	13					13		0.19	%
Education			58										58		2.72	%
Other consumer							1						1		0.02	%
Total consumer			58		47		14		4		3		126		0.12	%
Total	$	1	$	529	$	67	$	14	$	4	$	8	$	623	0.19	%

(a)At March 31, 2023, there were $0.1 billion of unfunded lending related commitments associated with loan modifications to borrowers experiencing financial difficulty.

(b)Includes loans where we have received notification that a borrower has filed for Chapter 7 bankruptcy relief, but specific instructions as to the terms of the relief have not been formally ruled upon by the court. Amounts also include trial modifications.

Table 46 presents the financial effect of the loan modifications made to borrowers experiencing financial difficulty during the three months ended March 31, 2023:

Table 46: Financial Effect of Modifications to Borrowers Experiencing Financial Difficulty (a)


Three months ended March 31, 2023 Dollars in millions	Total Principal Forgiveness		Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (in Months)	Weighted-Average Payment Delay (in Months)
Commercial
Commercial and industrial	$	2			5	2
Commercial real estate					13

Consumer
Residential real estate			1.71	%	145	8
Home equity			0.77	%	51	6


Education					27

(a)Excludes the financial effects of modifications for loans that were paid off, charged-off or otherwise liquidated as of period end.

Repayment plans are excluded from Table 46. The terms of these programs, which are offered for certain credit card and unsecured line of credit products, are as follows:

•Short-term programs are granted for periods of 6 and 12 months. These programs are structurally similar such that the interest rate is reduced to a standard rate of 4.99% and the minimum payment percentage is adjusted to 1.90% of the outstanding balance. At the end of the 6 or 12 months, the borrower is returned to the original contractual interest rate and minimum payment amount specified in the original lending agreement.

•Fully-amortized repayment plans are also granted, the most common of which being a 60-month program. In this program, we convert the borrower’s drawn and unpaid balances into a fully-amortized repayment plan consisting of an interest rate of 4.99% and a minimum payment amount of 1.90%. This fully-amortized program is designed in a manner that allows the drawn and unpaid amounts to be recaptured at the end of the 60 months.

After we modify a loan, we continue to track its performance under its most recent modified terms. The following table presents the performance, as of March 31, 2023, of loans that have been modified as a result of a borrower’s financial difficulty during the three months ended March 31, 2023:

Table 47: Delinquency Status of Loans Modified to Borrowers Experiencing Financial Difficulty (a) (b)


Three months ended March 31, 2023 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
Commercial
Commercial and industrial	$	218	$	5	$	1	$		$	224
Commercial real estate	273								273

Total commercial	491		5		1				497
Consumer
Residential real estate	24		10		2		13		49
Home equity	4						1		5

Credit card	7		2		2		2		13
Education	54		2				2		58
Other consumer	1								1
Total consumer	90		14		4		18		126
Total	$	581	$	19	$	5	$	18	$	623

(a)Represents amortized cost basis.

(b)Amounts include nonaccrual loans that were current or less than 30 days past due of $49 million and $18 million for the commercial and consumer portfolios, respectively. Nonaccrual amounts included in the table above that were 30 or more days delinquent totaled $5 million and $23 million for the commercial and consumer portfolios, respectively.

We generally consider loan modifications to borrowers experiencing financial difficulty to have subsequently defaulted when they become 60 days past due after the most recent date the loan was modified. Loans that were both (i) modified due to a financial difficulty during the period, and (ii) subsequently defaulted during the three months ended March 31, 2023 were not material.

Troubled Debt Restructuring Disclosures Prior to the Adoption of ASU 2022-02

Table 48 quantifies the number of loans that were classified as TDRs as well as the change in the loans’ balance as a result of becoming a TDR during the three months ended March 31, 2022. Additionally, the table provides information about the types of TDR concession. See Note 1 Accounting Policies and Note 4 Loans and Related Allowance for Credit Losses in our 2022 Form 10-K for additional discussion of TDRs.

Table 48: Financial Impact and TDRs by Concession Type (a)


			Pre-TDR Amortized Cost Basis (b)		Post-TDR Amortized Cost Basis (c)
Three months ended March 31 Dollars in millions	Number of Loans				Principal Forgiveness	Rate Reduction		Other		Total
2022
Commercial		12	$	53				$	46	$	46
Consumer		2,895	36			$	26	7		33
Total TDRs		2,907	$	89		$	26	$	53	$	79

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

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

After a loan was determined to be a TDR, we continued to track its performance under its most recent restructured terms. We considered a TDR to have subsequently defaulted when it became 60 days past due after the most recent date the loan was restructured. Loans that were both (i) classified as TDRs within the last twelve months from the balance sheet date, and (ii) subsequently defaulted during the three months ended March 31, 2022 totaled $9 million.

Allowance for Credit Losses

We maintain the ACL related to loans at levels that we believe to be appropriate to absorb expected credit losses 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 related to loans follows:

Table 49: Rollforward of Allowance for Credit Losses


	Three months ended March 31
	2023						2022
In millions	Commercial		Consumer		Total			Commercial		Consumer		Total
Allowance for loan and lease losses
Beginning balance	$	3,114	$	1,627	$	4,741		$	3,185	$	1,683	$	4,868
Adoption of ASU 2022-02 (a)			(35)		(35)
Beginning balance, adjusted	3,114		1,592		4,706			3,185		1,683		4,868
Charge-offs	(120)		(162)		(282)			(52)		(199)		(251)
Recoveries	25		62		87			34		80		114
Net (charge-offs)	(95)		(100)		(195)			(18)		(119)		(137)
Provision for (recapture of) credit losses	25		204		229			(163)		(9)		(172)
Other	2		(1)		1			(1)				(1)
Ending balance	$	3,046	$	1,695	$	4,741		$	3,003	$	1,555	$	4,558
Allowance for unfunded lending related commitments (b)
Beginning balance	$	613	$	81	$	694		$	564	$	98	$	662
Provision for (recapture of) credit losses	(53)		31		(22)			23		(46)		(23)
Ending balance	$	560	$	112	$	672		$	587	$	52	$	639
Allowance for credit losses at March 31 (c)	$	3,606	$	1,807	$	5,413		$	3,590	$	1,607	$	5,197

(a)Represents the impact of adopting ASU 2022-02 on January 1, 2023. As a result of adoption, we eliminated the accounting guidance for TDRs, including the use of a discounted cash flow approach to measure the allowance for TDRs.

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

(c)Represents the ALLL plus allowance for unfunded lending related commitments and excludes allowances for investment securities and other financial assets, which together totaled $205 million and $158 million at March 31, 2023 and 2022, respectively.

The ACL related to loans totaled $5.4 billion at both March 31, 2023 and December 31, 2022. During the three months ended March 31, 2023, reserves reflected our updated economic assumptions and changes in portfolio composition and quality.