Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Forecasted Key Macroeconomic Variables Used in Estimating Lifetime ECL

The following table presents the forecasted key macroeconomic variables in our Central scenarios used for estimating lifetime ECL at June 30, 2023, March 31, 2023 and December 31, 2022:


	For the Quarter Ended
	December 31, 2023		June 30, 2024		December 31, 2024
Unemployment rate (quarterly average):
Forecast at June 30, 2023	4.3	%	4.6	%	4.6	%
Forecast at March 31, 2023	4.3		4.6		4.5
Forecast at December 31, 2022	4.5		4.5		4.4
GDP growth rate (year-over-year):
Forecast at June 30, 2023	0.2		0.6		1.6
Forecast at March 31, 2023	0.0		1.0		1.7
Forecast at December 31, 2022	0.3		1.4		1.9

As part of our updates to the economic scenarios, during the six months ended June 30, 2023, we also increased our commercial allowance for credit losses for risk factors associated with large loan exposures.

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:


	June 30, 2023		December 31, 2022
	(in millions)
Allowance for credit losses:
Loans	$	605	$	584
Securities held-to-maturity(1)	—		—
Other financial assets measured at amortized cost(2)	—		—
Securities available-for-sale(1)	—		—
Total allowance for credit losses	$	605	$	584

Liability for off-balance sheet credit exposures	$	143	$	117

(1)See Note 5, "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 by Product Line

The following table summarizes the changes in the allowance for credit losses on loans by product or line of business during the three and six months ended June 30, 2023 and 2022:


	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 June 30, 2023
Allowance for credit losses – beginning of period	$	172	$	264	$	132	$	1	$	(2)	$	3	$	15	$	3	$	588
Provision charged (credited) to income	(26)		31		19		—		(12)		4		1		1		18
Charge-offs	—		(1)		—		—		(1)		—		(2)		(1)		(5)
Recoveries	—		1		—		—		2		—		1		—		4
Net (charge-offs) recoveries	—		—		—		—		1		—		(1)		(1)		(1)

Allowance for credit losses – end of period	$	146	$	295	$	151	$	1	$	(13)	$	7	$	15	$	3	$	605

Three Months Ended June 30, 2022
Allowance for credit losses – beginning of period	$	122	$	197	$	120	$	2	$	5	$	6	$	15	$	—	$	467
Provision charged (credited) to income	40		22		(2)		(1)		(1)		1		5		(1)		63
Charge-offs	—		(1)		—		—		—		—		—		—		(1)
Recoveries	—		—		—		—		2		—		2		1		5
Net (charge-offs) recoveries	—		(1)		—		—		2		—		2		1		4

Allowance for credit losses – end of period	$	162	$	218	$	118	$	1	$	6	$	7	$	22	$	—	$	534


	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)
Six Months Ended June 30, 2023
Allowance for credit losses – beginning of period	$	200	$	230	$	120	$	1	$	11	$	2	$	16	$	4	$	584


Provision charged (credited) to income	(54)		69		31		—		(22)		5		1		—		30
Charge-offs	—		(6)		—		—		(4)		(1)		(4)		(1)		(16)
Recoveries	—		2		—		—		2		1		2		—		7
Net (charge-offs) recoveries	—		(4)		—		—		(2)		—		(2)		(1)		(9)

Allowance for credit losses – end of period	$	146	$	295	$	151	$	1	$	(13)	$	7	$	15	$	3	$	605

Six Months Ended June 30, 2022
Allowance for credit losses – beginning of period	$	73	$	243	$	100	$	4	$	8	$	5	$	14	$	—	$	447


Provision charged (credited) to income	89		(18)		27		(3)		(5)		1		4		(1)		94
Charge-offs	—		(9)		(9)		—		(1)		(1)		—		—		(20)
Recoveries	—		2		—		—		4		2		4		1		13
Net (charge-offs) recoveries	—		(7)		(9)		—		3		1		4		1		(7)

Allowance for credit losses – end of period	$	162	$	218	$	118	$	1	$	6	$	7	$	22	$	—	$	534

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 six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in millions)
Balance at beginning of period	$	125	$	84	$	117	$	103


Provision charged (credited) to income	18		5		26		(14)
Balance at end of period	$	143	$	89	$	143	$	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 5, "Securities," and Note 6, "Loans."


	June 30, 2023		December 31, 2022
	(in millions)
Accrued interest receivables:
Loans	$	238	$	227
Securities held-to-maturity	45		20
Other financial assets measured at amortized cost	11		11
Securities available-for-sale	82		82
Total accrued interest receivables	376		340
Allowance for credit losses	—		—
Accrued interest receivables, net	$	376	$	340