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 by loan segment is presented in the following tables:



	Three Months Ended September 30, 2018									Nine Months Ended September 30, 2018
(Dollars in millions)	Commercial			Consumer			Total			Commercial			Consumer			Total
ALLL, beginning of period		$1,068			$582			$1,650			$1,101			$634			$1,735
Provision for loan losses	36			25			61			37			91			128
Loan charge-offs	(51		)	(71		)	(122		)	(95		)	(234		)	(329		)
Loan recoveries	9			25			34			19			70			89
ALLL, end of period	1,062			561			1,623			1,062			561			1,623

Unfunded commitments reserve, beginning of period ¹	72			—			72			79			—			79
Benefit for unfunded commitments	—			—			—			(7		)	—			(7		)
Unfunded commitments reserve, end of period ¹	72			—			72			72			—			72

Allowance for credit losses, end of period		$1,134			$561			$1,695			$1,134			$561			$1,695

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



	Three Months Ended September 30, 2017									Nine Months Ended September 30, 2017
(Dollars in millions)	Commercial			Consumer			Total			Commercial			Consumer			Total
ALLL, beginning of period		$1,140			$591			$1,731			$1,124			$585			$1,709
Provision for loan losses	5			114			119			89			235			324
Loan charge-offs	(33		)	(76		)	(109		)	(122		)	(235		)	(357		)
Loan recoveries	11			20			31			32			64			96
ALLL, end of period	1,123			649			1,772			1,123			649			1,772

Unfunded commitments reserve, beginning of period ¹	72			—			72			67			—			67
Provision for unfunded commitments	1			—			1			6			—			6
Unfunded commitments reserve, end of period ¹	73			—			73			73			—			73

Allowance for credit losses, end of period		$1,196			$649			$1,845			$1,196			$649			$1,845

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

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 are presented in the following tables:



	September 30, 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		$238		$28		$2,509		$164		$2,747		$192
Collectively evaluated	77,720		1,034		66,580		397		144,300		1,431
Total evaluated	77,958		1,062		69,089		561		147,047		1,623
LHFI measured at fair value	—		—		168		—		168		—
Total LHFI		$77,958		$1,062		$69,257		$561		$147,215		$1,623



	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