NOTE 6 - 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)	2014			2013			2014			2013
Balance at beginning of period		$2,086			$2,205			$2,094			$2,219
Provision for loan losses	76			152			182			356
(Benefit)/provision for unfunded commitments	(3		)	(6		)	(7		)	2
Loan charge-offs	(158		)	(233		)	(309		)	(506		)
Loan recoveries	45			54			86			101
Balance at end of period		$2,046			$2,172			$2,046			$2,172

Components:
ALLL								$2,003			$2,125
Unfunded commitments reserve¹							43			47
Allowance for credit losses								$2,046			$2,172

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

Activity in the ALLL by loan segment for the three months ended June 30, 2014 and 2013 is presented in the tables below:



	Three Months Ended June 30, 2014
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$966			$910			$164			$2,040
Provision for loan losses	18			32			26			76
Loan charge-offs	(38		)	(90		)	(30		)	(158		)
Loan recoveries	12			23			10			45
Balance at end of period		$958			$875			$170			$2,003

	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

	Six Months Ended June 30, 2014
(Dollars in millions)	Commercial			Residential			Consumer			Total
Balance at beginning of period		$946			$930			$168			$2,044
Provision for loan losses	57			80			45			182
Loan charge-offs	(71		)	(175		)	(63		)	(309		)
Loan recoveries	26			40			20			86
Balance at end of period		$958			$875			$170			$2,003

	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

As discussed in Note 1, “Significant Accounting Policies,” to the Company's 2013 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, 2014
	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		$139		$4		$2,723		$349		$121		$8		$2,983		$361
Collectively evaluated	68,399		954		36,846		526		21,224		162		126,469		1,642
Total evaluated	68,538		958		39,569		875		21,345		170		129,452		2,003
LHFI at fair value	—		—		292		—		—		—		292		—
Total LHFI		$68,538		$958		$39,861		$875		$21,345		$170		$129,744		$2,003



	December 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		$171		$10		$2,878		$345		$110		$8		$3,159		$363
Collectively evaluated	64,139		936		40,010		585		20,267		160		124,416		1,681
Total evaluated	64,310		946		42,888		930		20,377		168		127,575		2,044
LHFI at fair value	—		—		302		—		—		—		302		—
Total LHFI		$64,310		$946		$43,190		$930		$20,377		$168		$127,877		$2,044