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 March 31
(Dollars in millions)	2012			2011
Balance at beginning of period		$2,505			$3,032
Provision for loan losses	313			451
Provision/(benefit) for unfunded commitments	4			(4		)
Loan charge-offs	(463		)	(615		)
Loan recoveries	41			44
Balance at end of period		$2,400			$2,908
Components:
ALLL		$2,348			$2,854
Unfunded commitments reserve¹	52			54
Allowance for credit losses		$2,400			$2,908

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

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



	Three Months Ended March 31, 2012
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$964			$1,354			$139			$2,457
Provision for loan losses	38			258			17			313
Loan charge-offs	(126		)	(302		)	(35		)	(463		)
Loan recoveries	25			5			11			41
Balance at end of period		$901			$1,315			$132			$2,348

	Three Months Ended March 31, 2011
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$1,303			$1,498			$173			$2,974
Provision for loan losses	108			322			21			451
Loan charge-offs	(185		)	(385		)	(45		)	(615		)
Loan recoveries	29			5			10			44
Balance at end of period		$1,255			$1,440			$159			$2,854

As discussed in Note 1, “Significant Accounting Policies,” to the Company's Annual Report on Form 10-K for the year ended December 31, 2011, the ALLL is composed of both 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 is shown in the tables below:



	As of March 31, 2012
	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		$321		$16		$3,052		$376		$38		$8		$3,411		$400
Collectively evaluated	55,862		885		43,033		939		19,972		124		118,867		1,948
Total evaluated	56,183		901		46,085		1,315		20,010		132		122,278		2,348
LHFI at fair value	2		—		411		—		—		—		413		—
Total LHFI		$56,185		$901		$46,496		$1,315		$20,010		$132		$122,691		$2,348

	As of December 31, 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		$412		$34		$3,141		$405		$39		$9		$3,592		$448
Collectively evaluated	55,458		930		43,088		949		19,924		130		118,470		2,009
Total evaluated	55,870		964		46,229		1,354		19,963		139		122,062		2,457
LHFI at fair value	2		—		431		—		—		—		433		—
Total LHFI		$55,872		$964		$46,660		$1,354		$19,963		$139		$122,495		$2,457