Allowance for Credit Losses

9 Months Ended

Sep. 30, 2011

Allowance for Credit Losses

NOTE 4 - ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses consists of the ALLL and the reserve for unfunded commitments. Activity in the allowance for credit losses is summarized in the table below:

	Three Months Ended September 30						Nine Months Ended September 30
(Dollars in millions)	2011			2010			2011			2010
Balance at beginning of period		$2,795			$3,216			$3,032			$3,235
Provision for loan losses	348			620			1,194			2,199
Benefit for unfunded commitments	(1		)	(5		)	(8		)	(60		)
Loan charge-offs	(536		)	(725		)	(1,714		)	(2,355		)
Loan recoveries	44			35			146			122
Balance at end of period		$2,650			$3,141			$2,650			$3,141
Components:
ALLL		$2,600			$3,086
Unfunded commitments reserve1	50			55
Allowance for credit losses		$2,650			$3,141

¹The unfunded commitments reserve is separately recorded in other liabilities in the Consolidated Balance Sheets.

Activity in the ALLL by segment is presented in the tables below:

	Three Months Ended September 30, 2011
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$1,200			$1,395			$149			$2,744
Provision for loan losses	86			236			26			348
Loan charge-offs	(214		)	(282		)	(40		)	(536		)
Loan recoveries	29			3			12			44
Balance at end of period		$1,101			$1,352			$147			$2,600
	Three Months Ended September 30, 2010
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$1,447			$1,538			$171			$3,156
Provision for loan losses	186			392			42			620
Loan charge-offs	(251		)	(433		)	(41		)	(725		)
Loan recoveries	20			5			10			35
Balance at end of period		$1,402			$1,502			$182			$3,086

	Nine Months Ended September 30, 2011
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$1,303			$1,498			$173			$2,974
Provision for loan losses	318			810			66			1,194
Loan charge-offs	(619		)	(970		)	(125		)	(1,714		)
Loan recoveries	99			14			33			146
Balance at end of period		$1,101			$1,352			$147			$2,600
	Nine Months Ended September 30, 2010
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$1,353			$1,592			$175			$3,120
Provision for loan losses	671			1,406			122			2,199
Loan charge-offs	(694		)	(1,511		)	(150		)	(2,355		)
Loan recoveries	72			15			35			122
Balance at end of period		$1,402			$1,502			$182			$3,086

As further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, the ALLL is composed of specific allowances for certain nonaccrual loans and TDRs and general allowances grouped into loan pools based on similar characteristics. No allowance is required for loans carried at fair value. Additionally, the Company does not record an allowance for loan products that are guaranteed by government agencies, as there is nominal risk of principal loss. The Company’s LHFI portfolio and related ALLL at September 30, 2011 and December 31, 2010, respectively, is shown in the tables below:

	As of September 30, 2011
	Commercial				Residential				Consumer				Total
(Dollars in millions)	Carrying Value		Associated ALLL		Carrying Value		Associated ALLL		Carrying Value		Associated ALLL		Carrying Value		Associated ALLL
Individually evaluated		$711		$79		$3,183		$398		$12		$2		$3,906		$479
Collectively evaluated	53,991		1,022		41,360		954		17,766		145		113,117		2,121
Total evaluated	54,702		1,101		44,543		1,352		17,778		147		117,023		2,600
LHFI at fair value	3		—		449		—		—		—		452		—
Total LHFI		$54,705		$1,101		$44,992		$1,352		$17,778		$147		$117,475		$2,600
	As of December 31, 2010
	Commercial				Residential				Consumer				Total
(Dollars in millions)	Carrying Value		Associated ALLL		Carrying Value		Associated ALLL		Carrying Value		Associated ALLL		Carrying Value		Associated ALLL
Individually evaluated		$906		$175		$3,166		$428		$11		$2		$4,083		$605
Collectively evaluated	52,578		1,128		42,867		1,070		15,955		171		111,400		2,369
Total evaluated	53,484		1,303		46,033		1,498		15,966		173		115,483		2,974
LHFI at fair value	4		—		488		—		—		—		492		—
Total LHFI		$53,488		$1,303		$46,521		$1,498		$15,966		$173		$115,975		$2,974