Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Allowance for Credit Losses and Liability for Off-balance Sheet Credit Exposures

The following table summarizes our allowance for credit losses and the liability for off-balance sheet credit exposures:


	September 30, 2020		January 1, 2020		December 31, 2019
	(in millions)
Allowance for credit losses:
Loans	$	1,084	$	467	$	637
Securities held-to-maturity⁽¹⁾	2		2		—
Other financial assets measured at amortized cost⁽²⁾	3		3		—
Securities available-for-sale⁽¹⁾	2		3		—
Total allowance for credit losses	$	1,091	$	475	$	637

Liability for off-balance sheet credit exposures	$	225	$	158	$	104

⁽¹⁾See Note 4, "Securities," for additional information regarding the allowance for credit losses associated with our security portfolios.

⁽²⁾Primarily includes accrued interest receivables and customer acceptances.

Summary of Changes in the Allowance for Credit Losses and the Related Loan Balance by Product

The following table summarizes the changes in the allowance for credit losses on loans by product or line of business during the three and nine months ended September 30, 2020 and 2019:


	Commercial Loans														Consumer Loans
	Real Estate, including Construction		Business and Corporate Banking		Global Banking		Other Comm'l		Residential Mortgages		Home Equity Mortgages		Credit Cards		Other Consumer		Total Loans
	(in millions)
Three Months Ended September 30, 2020
Allowance for credit losses – beginning of period	$	120	$	434	$	424	$	5	$	(19)	$	16	$	190	$	22	$	1,192
Provision charged (credited) to income	43		(36)		(103)		3		12		(1)		(2)		9		(75)
Charge-offs	(12)		(2)		(1)		—		(1)		(1)		(23)		(4)		(44)
Recoveries	—		5		—		—		3		1		2		—		11
Net (charge-offs) recoveries	(12)		3		(1)		—		2		—		(21)		(4)		(33)

Allowance for credit losses – end of period	$	151	$	401	$	320	$	8	$	(5)	$	15	$	167	$	27	$	1,084

Three Months Ended September 30, 2019
Allowance for credit losses – beginning of period	$	149	$	251	$	110	$	9	$	11	$	7	$	71	$	5	$	613
Provision charged (credited) to income	27		32		1		—		(1)		(1)		34		2		94
Charge-offs	—		(18)		—		—		(1)		(1)		(17)		—		(37)
Recoveries	—		2		—		—		2		1		1		—		6
Net (charge-offs) recoveries	—		(16)		—		—		1		—		(16)		—		(31)

Allowance for credit losses – end of period	$	176	$	267	$	111	$	9	$	11	$	6	$	89	$	7	$	676

Nine Months Ended September 30, 2020
Allowance for credit losses – beginning of period	$	153	$	239	$	106	$	9	$	12	$	6	$	105	$	7	$	637
Cumulative effect adjustment to initially apply new accounting guidance for measuring credit losses	(112)		(60)		51		(5)		(86)		7		32		3		(170)
Allowance for credit losses – beginning of period, adjusted	41		179		157		4		(74)		13		137		10		467
Provision charged (credited) to income	122		283		183		3		62		1		96		24		774
Charge-offs	(12)		(69)		(20)		—		(1)		(3)		(71)		(8)		(184)
Recoveries	—		8		—		1		8		4		5		1		27
Net (charge-offs) recoveries	(12)		(61)		(20)		1		7		1		(66)		(7)		(157)

Allowance for credit losses – end of period	$	151	$	401	$	320	$	8	$	(5)	$	15	$	167	$	27	$	1,084

Nine Months Ended September 30, 2019
Allowance for credit losses – beginning of period	$	116	$	219	$	108	$	15	$	13	$	7	$	58	$	5	$	541
Provision charged (credited) to income	60		67		6		(6)		(1)		(1)		69		4		198
Charge-offs	—		(22)		(3)		—		(8)		(3)		(42)		(3)		(81)
Recoveries	—		3		—		—		7		3		4		1		18
Net (charge-offs) recoveries	—		(19)		(3)		—		(1)		—		(38)		(2)		(63)

Allowance for credit losses – end of period	$	176	$	267	$	111	$	9	$	11	$	6	$	89	$	7	$	676

Summary of Changes in the Liability for Off-balance Sheet Credit Exposures

The following table summarizes the changes in the liability for off-balance sheet credit exposures during the three and nine months ended September 30, 2020 and 2019:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2020		2019		2020		2019
	(in millions)
Balance at beginning of period	$	253	$	90	$	104	$	96
Cumulative effect adjustment to initially apply new accounting guidance for measuring credit losses	—		—		54		—
Balance at beginning of period, adjusted	253		90		158		96
Provision charged (credited) to income	(28)		(1)		67		(7)
Balance at end of period	$	225	$	89	$	225	$	89

Summary of Accrued Interest Receivables

The following table summarizes accrued interest receivables associated with financial assets carried at amortized cost and securities available-for-sale along with the related allowance for credit losses, which are reported net in other assets on the consolidated balance sheet. These accrued interest receivables are excluded from the amortized cost basis disclosures presented elsewhere in these financial statements, including Note 4, "Securities," and Note 5, "Loans."


	September 30, 2020
	(in millions)
Accrued interest receivables:
Loans	$	152
Securities held-to-maturity	26
Other financial assets measured at amortized cost	1
Securities available-for-sale	104
Total accrued interest receivables	283
Allowance for credit losses	2
Accrued interest receivables, net	$	281