Allowance for Credit Losses

6 Months Ended

Jun. 30, 2011

Allowance for Credit Losses

Note 4 - 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:

		2011		2011		2011		2011
	Three Months Ended          June 30				Six Months Ended          June 30
(Dollars in millions)	2011		2010		2011		2010
Balance at beginning of period		$2,908		$3,276		$3,032		$3,235
Provision for loan losses		395		702		846		1,579
Benefit for unfunded commitments		(3)		(40)		(7)		(55)
Loan charge-offs		(563)		(768)		(1,178)		(1,630)
Loan recoveries		58		46		102		87
Balance at end of period		$2,795		$3,216		$2,795		$3,216
Components:
ALLL		$2,744		$3,156
Unfunded commitments reserve1		51		60
Allowance for credit losses		$2,795		$3,216

¹The unfunded commitments reserve is separately 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, 2011
(Dollars in millions)	Commercial		Residential		Consumer		Total
Balance at beginning of period		$1,255		$1,440		$159		$2,854
Provision for loan losses		124		252		19		395
Loan charge-offs		(220)		(303)		(40)		(563)
Loan recoveries		41		6		11		58
Balance at end of period		$1,200		$1,395		$149		$2,744
	Three Months Ended June 30, 2010
(Dollars in millions)	Commercial		Residential		Consumer		Total
Balance at beginning of period		$1,399		$1,590		$187		$3,176
Provision for loan losses		270		413		19		702
Loan charge-offs		(251)		(470)		(47)		(768)
Loan recoveries		29		5		12		46
Balance at end of period		$1,447		$1,538		$171		$3,156

	Six Months Ended June 30, 2011
(Dollars in millions)	Commercial		Residential		Consumer		Total
Balance at beginning of period		$1,303		$1,498		$173		$2,974
Provision for loan losses		232		574		40		846
Loan charge-offs		(405)		(688)		(85)		(1,178)
Loan recoveries		70		11		21		102
Balance at end of period		$1,200		$1,395		$149		$2,744
	Six Months Ended June 30, 2010
(Dollars in millions)	Commercial		Residential		Consumer		Total
Balance at beginning of period		$1,353		$1,592		$175		$3,120
Provision for loan losses		485		1,014		80		1,579
Loan charge-offs		(443)		(1,078)		(109)		(1,630)
Loan recoveries		52		10		25		87
Balance at end of period		$1,447		$1,538		$171		$3,156

As further discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, the ALLL is composed of 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 does not record an 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 at June 30, 2011 and December 31, 2010, respectively, is shown in the tables below:

		00000000		00000000		00000000		00000000		00000000		00000000		00000000		00000000
	As of June 30, 2011
	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		$737		$165		$3,164		$397		$13		$2		$3,914		$564
Collectively evaluated		52,628		1,035		41,415		998		16,507		147		110,550		2,180
Total evaluated		53,365		1,200		44,579		1,395		16,520		149		114,464		2,744
LHFI at fair value		4		-		445		-		-		-		449		-
Total LHFI		$53,369		$1,200		$45,024		$1,395		$16,520		$149		$114,913		$2,744
	As of December 31, 2010
	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		$906		$175		$3,166		$428		$11		$2		$4,083		$605
Collectively evaluated		52,578		1,128		42,867		1,070		15,955		171		111,400		2,369
Total evaluated		53,484		1,303		46,033		1,498		15,966		173		115,483		2,974
LHFI at fair value		4		-		488		-		-		-		492		-
Total LHFI		$53,488		$1,303		$46,521		$1,498		$15,966		$173		$115,975		$2,974