NOTE 5 - 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 June 30						Six Months Ended June 30
(Dollars in millions)	2013			2012			2013			2012
Balance at beginning of period		$2,205			$2,400			$2,219			$2,505
Provision for loan losses	152			302			356			615
(Benefit)/provision for unfunded commitments	(6		)	(2		)	2			2
Loan charge-offs	(233		)	(397		)	(506		)	(860		)
Loan recoveries	54			47			101			88
Balance at end of period		$2,172			$2,350			$2,172			$2,350

Components:
ALLL		$2,125			$2,300
Unfunded commitments reserve¹	47			50
Allowance for credit losses		$2,172			$2,350

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 June 30, 2013
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$921			$1,087			$144			$2,152
Provision for loan losses	42			78			32			152
Loan charge-offs	(64		)	(143		)	(26		)	(233		)
Loan recoveries	20			24			10			54
Balance at end of period		$919			$1,046			$160			$2,125

	Three Months Ended June 30, 2012
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$901			$1,315			$132			$2,348
Provision for loan losses	49			230			23			302
Loan charge-offs	(94		)	(274		)	(29		)	(397		)
Loan recoveries	31			6			10			47
Balance at end of period		$887			$1,277			$136			$2,300

	Six Months Ended June 30, 2013
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$902			$1,131			$141			$2,174
Provision for loan losses	106			190			60			356
Loan charge-offs	(124		)	(321		)	(61		)	(506		)
Loan recoveries	35			46			20			101
Balance at end of period		$919			$1,046			$160			$2,125

	Six Months Ended June 30, 2012
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$964			$1,354			$139			$2,457
Provision for loan losses	87			488			40			615
Loan charge-offs	(220		)	(576		)	(64		)	(860		)
Loan recoveries	56			11			21			88
Balance at end of period		$887			$1,277			$136			$2,300

As discussed in Note 1, “Significant Accounting Policies,” to the Company's 2012 Annual Report on Form 10−K, 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:



	June 30, 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		$208		$18		$2,851		$347		$103		$9		$3,162		$374
Collectively evaluated	59,837		901		39,090		699		19,603		151		118,530		1,751
Total evaluated	60,045		919		41,941		1,046		19,706		160		121,692		2,125
LHFI at fair value	—		—		339		—		—		—		339		—
Total LHFI		$60,045		$919		$42,280		$1,046		$19,706		$160		$122,031		$2,125

	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