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 for the three months ended March 31:



(Dollars in millions)	2013			2012
Balance at beginning of period		$2,219			$2,505
Provision for loan losses	204			313
Provision for unfunded commitments	8			4
Loan charge-offs	(273		)	(463		)
Loan recoveries	47			41
Balance at end of period		$2,205			$2,400
Components:
ALLL		$2,152			$2,348
Unfunded commitments reserve¹	53			52
Allowance for credit losses		$2,205			$2,400

¹The unfunded commitments reserve is recorded 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, 2013
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$902			$1,131			$141			$2,174
Provision for loan losses	64			112			28			204
Loan charge-offs	(60		)	(178		)	(35		)	(273		)
Loan recoveries	15			22			10			47
Balance at end of period		$921			$1,087			$144			$2,152

	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

As discussed in Note 1, “Significant Accounting Policies,” to the Company's Annual Report on Form 10−K for the year ended December 31, 2012, 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 records an immaterial 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:



	March 31, 2013
	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		$133		$3		$2,845		$349		$93		$9		$3,071		$361
Collectively evaluated	59,105		918		39,076		738		19,192		135		117,373		1,791
Total evaluated	59,238		921		41,921		1,087		19,285		144		120,444		2,152
LHFI at fair value	—		—		360		—		—		—		360		—
Total LHFI		$59,238		$921		$42,281		$1,087		$19,285		$144		$120,804		$2,152

	December 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		$138		$7		$2,859		$348		$81		$9		$3,078		$364
Collectively evaluated	58,750		895		39,961		783		19,302		132		118,013		1,810
Total evaluated	58,888		902		42,820		1,131		19,383		141		121,091		2,174
LHFI at fair value	—		—		379		—		—		—		379		—
Total LHFI		$58,888		$902		$43,199		$1,131		$19,383		$141		$121,470		$2,174