NOTE 7 - ALLOWANCE FOR CREDIT LOSSES

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



	Year Ended December 31
(Dollars in millions)	2017			2016			2015
Balance, beginning of period		$1,776			$1,815			$1,991
Provision for loan losses	397			440			156
Provision for unfunded commitments	12			4			9
Loan charge-offs	(491		)	(591		)	(470		)
Loan recoveries	124			108			129
Other ¹	(4		)	—			—
Balance, end of period		$1,814			$1,776			$1,815

Components:
ALLL		$1,735			$1,709			$1,752
Unfunded commitments reserve ²	79			67			63
Allowance for credit losses		$1,814			$1,776			$1,815

¹Related to loans disposed in connection with the sale of PAC. For additional information regarding the sale of PAC, see Note 2, "Acquisitions/Dispositions."

²The unfunded commitments reserve is recorded in Other liabilities in the Consolidated Balance Sheets.

Activity in the ALLL by loan segment is presented in the following tables:



	Year Ended December 31, 2017
(Dollars in millions)	Commercial Loans			Consumer Loans			Total
Balance, beginning of period		$1,124			$585			$1,709
Provision for loan losses	108			289			397
Loan charge-offs	(167		)	(324		)	(491		)
Loan recoveries	40			84			124
Other ¹	(4		)	—			(4		)
Balance, end of period		$1,101			$634			$1,735

	Year Ended December 31, 2016
(Dollars in millions)	Commercial Loans			Consumer Loans			Total
Balance, beginning of period		$1,047			$705			$1,752
Provision for loan losses	329			111			440
Loan charge-offs	(287		)	(304		)	(591		)
Loan recoveries	35			73			108
Balance, end of period		$1,124			$585			$1,709

¹ Related to loans disposed in connection with the sale of PAC. For additional information regarding the sale of PAC, see Note 2, "Acquisitions/Dispositions."

As discussed in Note 1, “Significant Accounting Policies,” the ALLL is composed of both specific allowances for certain nonaccrual loans and TDRs, and general allowances for groups of loans with similar risk characteristics. No allowance is required for loans measured at fair value. Additionally, the Company records an immaterial allowance for loan products that are insured by federal agencies or guaranteed by GSEs, as there is nominal risk of principal loss.

The Company’s LHFI portfolio and related ALLL is presented in the following tables:



	December 31, 2017
	Commercial Loans				Consumer Loans				Total
(Dollars in millions)	Carrying Value		Related ALLL		Carrying Value		Related ALLL		Carrying Value		Related ALLL
LHFI evaluated for impairment:
Individually evaluated		$173		$21		$2,648		$183		$2,821		$204
Collectively evaluated	75,304		1,080		64,860		451		140,164		1,531
Total evaluated	75,477		1,101		67,508		634		142,985		1,735
LHFI measured at fair value	—		—		196		—		196		—
Total LHFI		$75,477		$1,101		$67,704		$634		$143,181		$1,735



	December 31, 2016
	Commercial Loans				Consumer Loans				Total
(Dollars in millions)	Carrying Value		Related ALLL		Carrying Value		Related ALLL		Carrying Value		Related ALLL
LHFI evaluated for impairment:
Individually evaluated		$382		$33		$2,686		$222		$3,068		$255
Collectively evaluated	77,842		1,091		62,166		363		140,008		1,454
Total evaluated	78,224		1,124		64,852		585		143,076		1,709
LHFI measured at fair value	—		—		222		—		222		—
Total LHFI		$78,224		$1,124		$65,074		$585		$143,298		$1,709