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:



	Three Months Ended March 31
(Dollars in millions)	2018			2017
Balance, beginning of period		$1,814			$1,776
Provision for loan losses	38			117
Provision for unfunded commitments	(10		)	2
Loan charge-offs	(106		)	(146		)
Loan recoveries	27			34
Balance, end of period		$1,763			$1,783

Components:
ALLL		$1,694			$1,714
Unfunded commitments reserve ¹	69			69
Allowance for credit losses		$1,763			$1,783

¹The 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:



	Three Months Ended March 31, 2018
(Dollars in millions)	Commercial Loans			Consumer Loans			Total
Balance, beginning of period		$1,101			$634			$1,735
Provision for loan losses	(16		)	54			38
Loan charge-offs	(23		)	(83		)	(106		)
Loan recoveries	6			21			27
Balance, end of period		$1,068			$626			$1,694

	Three Months Ended March 31, 2017
(Dollars in millions)	Commercial Loans			Consumer Loans			Total
Balance, beginning of period		$1,124			$585			$1,709
Provision for loan losses	46			71			117
Loan charge-offs	(63		)	(83		)	(146		)
Loan recoveries	13			21			34
Balance, end of period		$1,120			$594			$1,714

As discussed in Note 1, “Significant Accounting Policies,” to the Company's 2017 Annual Report on Form 10-K, 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:



	March 31, 2018
	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		$211		$22		$2,601		$174		$2,812		$196
Collectively evaluated	75,113		1,046		64,505		452		139,618		1,498
Total evaluated	75,324		1,068		67,106		626		142,430		1,694
LHFI measured at fair value	—		—		188		—		188		—
Total LHFI		$75,324		$1,068		$67,294		$626		$142,618		$1,694



	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