Allowance for Loan and Lease Losses

12 Months Ended

Dec. 31, 2023

NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES

The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities, presented in Note 15—Other Liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale is reported in the Consolidated Statements of Income as provision or benefit for credit losses.

The Initial PCD ALLL for the SVBB Acquisition and the CIT Merger were established through a PCD Gross-Up and there were no corresponding increases to the provision for credit losses. The PCD Gross-Ups are discussed further in Note 1—Significant Accounting Policies and Basis of Presentation.

The initial ALLL for Non-PCD loans and leases acquired in the SVBB Acquisition and the CIT Merger were established through corresponding increases to the provision for credit losses (the “day 2 provision for loan and lease losses”).

The initial reserve for off-balance sheet credit exposure acquired in the SVBB Acquisition and the CIT Merger were established through a corresponding increase to the provision for off-balance sheet credit exposure (the “day 2 provision for off-balance sheet credit exposure”).

The ALLL activity for loans and leases is summarized in the following table.

Allowance for Loan and Lease Losses


dollars in millions	Year Ended December 31, 2023								Year Ended December 31, 2022
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	789	$	133	$	—	$	922	$	80	$	98	$	—	$	178
Initial PCD ALLL	—		—		220		220		258		14		—		272
Day 2 provision for loan and lease losses	—		—		462		462		432		22		—		454
Provision (benefit) for loan and lease losses	541		27		135		703		101		(4)		—		97
Total provision for loan and lease losses	541		27		597		1,165		533		18		—		551
Charge-offs	(328)		(28)		(282)		(638)		(126)		(20)		—		(146)
Recoveries	44		14		20		78		44		23		—		67
Balance at end of period	$	1,046	$	146	$	555	$	1,747	$	789	$	133	$	—	$	922

									Year Ended December 31, 2021
									Commercial		Consumer		SVB		Total
Balance at beginning of period									$	92	$	133	$	—	$	225
Benefit for loan and lease losses									(7)		(30)		—		(37)
Charge-offs									(18)		(18)		—		(36)
Recoveries									13		13		—		26
Balance at end of period									$	80	$	98	$	—	$	178

The following table presents the components of the provision for credit losses:

Provision for Credit Losses


dollars in millions	Year Ended December 31,
	2023		2022		2021
Day 2 provision for loan and lease losses	$	462	$	454	$	—
Provision (benefit) for loan and lease losses	703		97		(37)
Total provision (benefit) for loan and lease losses	1,165		551		(37)
Day 2 provision for off-balance sheet credit exposure	254		59		—
(Benefit) provision for off-balance sheet credit exposure	(44)		35		—
Total provision for off-balance sheet credit exposure	210		94		—
Benefit for investment securities available for sale credit losses	—		—		—
Provision (benefit) for credit losses	$	1,375	$	645	$	(37)