Allowance for Credit Losses

6 Months Ended

Jun. 30, 2011

Allowance for Credit Losses [Abstract]

6. Allowance for Credit Losses

An analysis of the allowance for credit losses is presented in the following table:


	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010

	(in millions)

Balance at beginning of period	$	1,832		$	3,224		$	2,170		$	3,861
Provision for credit losses		285			456			391			667
Charge-offs		(499	)		(816	)		(1,034	)		(1,750	)
Recoveries		96			82			186			164
Other		-			4			1			8

Balance at end of period	$	1,714		$	2,950		$	1,714		$	2,950

The following tables summarize the changes in the allowance for credit losses by product and the related loan balance by product during the three and six months ended June 30, 2011 and 2010:


	Commercial												Consumer
				Business									Residential
				Banking									Mortgage,
	Construction			and Middle									Excl Home			Home			Private
	and Other			Market			Large			Other			Equity			Equity			Label			Credit			Auto			Other
	Real Estate			Enterprises			Corporate			Comm’l			Mortgages			Mortgages			Card			Card			Finance			Consumer			Total

	(in millions)

Three Months Ended June 30, 2011:
Allowance for credit losses – beginning of period	$	217		$	119		$	111		$	35		$	163		$	67		$	624		$	470		$	-		$	26		$	1,832
Provision charged to income		50			(7	)		(1	)		3			27			13			108			88			-			4			285
Charge offs		(39	)		(20	)		-			(6	)		(28	)		(18	)		(199	)		(179	)		-			(10	)		(499	)
Recoveries		1			4			-			1			2			-			51			33			-			4			96

Net charge offs		(38	)		(16	)		-			(5	)		(26	)		(18	)		(148	)		(146	)		-			(6	)		(403	)
Other		-			-			-			-			-			-			-			-			-			-			-

Allowance for credit losses – end of period	$	229		$	96		$	110		$	33		$	164		$	62		$	584		$	412		$	-		$	24		$	1,714

Ending balance: collectively evaluated for impairment	$	120		$	79		$	39		$	29		$	101		$	58		$	518		$	335		$	-		$	24		$	1,303
Ending balance: individually evaluated for impairment⁽¹⁾		109			17			71			4			63			4			66			75			-			-			409
Ending balance: loans acquired with deteriorated credit quality		-			-			-			-			-			-			-			2			-			-			2

Total allowance for credit losses	$	229		$	96		$	110		$	33		$	164		$	62		$	584		$	412		$	-		$	24		$	1,714

Loans:
Collectively evaluated for impairment	$	7,193		$	8,086		$	10,529		$	3,280		$	12,840		$	3,598		$	11,475		$	9,595		$	-		$	1,008		$	67,604
Individually evaluated for impairment		698			156			74			101			482			9			190			220			-			-			1,930
Loans carried at net realizable value		-			-			-			-			778			-			-			-			-			-			778
Loans acquired with deteriorated credit quality		-			-			-			-			-			-			-			25			-			-			25

Total loans	$	7,891		$	8,242		$	10,603		$	3,381		$	14,100		$	3,607		$	11,665		$	9,840		$	-		$	1,008		$	70,337

Three Months Ended June 30, 2010:
Allowance for credit losses – beginning of period	$	292		$	165		$	220		$	90		$	280		$	128		$	1,000		$	964		$	37		$	48		$	3,224
Provision charged to income		43			2			(40	)		4			10			6			198			215			10			8			456
Charge offs		(45	)		(22	)		(14	)		(9	)		(46	)		(30	)		(289	)		(331	)		(13	)		(17	)		(816	)
Recoveries		2			6			2			1			-			-			38			30			(1	)		4			82

Net charge offs		(43	)		(16	)		(12	)		(8	)		(46	)		(30	)		(251	)		(301	)		(14	)		(13	)		(734	)
Other		-			-			-			1			-			-			-			3			-			-			4

Allowance for credit losses – end of period	$	292		$	151		$	168		$	87		$	244		$	104		$	947		$	881		$	33		$	43		$	2,950

Ending balance: collectively evaluated for impairment	$	170		$	144		$	93		$	45		$	195		$	102		$	864		$	813		$	21		$	43		$	2,490
Ending balance: individually evaluated for impairment⁽¹⁾		97			31			75			43			49			2			83			62			12			-			454
Ending balance: loans acquired with deteriorated credit quality		-			-			-			-			-			-			-			6			-			-			6

Total allowance for credit losses	$	267		$	175		$	168		$	88		$	244		$	104		$	947		$	881		$	33		$	43		$	2,950

Loans:
Collectively evaluated for impairment	$	7,931		$	6,890		$	10,837		$	2,794		$	12,620		$	3,965		$	12,510		$	11,053		$	1,233		$	1,321		$	71,154
Individually evaluated for impairment		643			161			97			152			292			7			237			176			46			-			1,811
Loans carried at net realizable value		-			-			-			-			654			-			-			-			-			-			654
Loans acquired with deteriorated credit quality		-			-			-			-			-			-			-			42			-			-			42

Total loans	$	8,574		$	7,051		$	10,934		$	2,946		$	13,566		$	3,972		$	12,747		$	11,271		$	1,279		$	1,321		$	73,661


	Commercial												Consumer
				Business									Residential
				Banking									Mortgage,
	Construction			and Middle									Excl Home			Home			Private
	and Other			Market			Large			Other			Equity			Equity			Label			Credit			Auto			Other
	Real Estate			Enterprises			Corporate			Comm’l			Mortgages			Mortgages			Card			Card			Finance			Consumer			Total

													(in millions)

Six Months Ended June 30, 2011:
Allowance for credit losses – beginning of period	$	243		$	132		$	116		$	45		$	167		$	77		$	752		$	606		$	-		$	32		$	2,170
Provision charged to income		22			(9	)		(6	)		(3	)		48			23			159			149			-			8			391
Charge offs		(43	)		(33	)		-			(11	)		(54	)		(38	)		(424	)		(408	)		-			(23	)		(1,034	)
Recoveries		7			6			-			2			3			-			97			64			-			7			186

Net charge offs		(36	)		(27	)		-			(9	)		(51	)		(38	)		(327	)		(344	)		-			(16	)		(848	)
Other		-			-			-						-			-			-			1			-			-			1

Allowance for credit losses – end of period	$	229		$	96		$	110		$	33		$	164		$	62		$	584		$	412		$	-		$	24		$	1,714

Six Months Ended June 30, 2010:
Allowance for credit losses – beginning of period	$	303		$	184		$	301		$	150		$	347		$	185		$	1,184		$	1,106		$	36		$	65		$	3,861
Provision charged to income		45			5			(117	)		3			(9	)		(15	)		307			405			35			8			667
Charge offs		(61	)		(50	)		(18	)		(70	)		(95	)		(66	)		(624	)		(691	)		(37	)		(38	)		(1,750	)
Recoveries		5			12			2			2			1			-			80			55			(1	)		8			164

Net charge offs		(56	)		(38	)		(16	)		(68	)		(94	)		(66	)		(544	)		(636	)		(38	)		(30	)		(1,586	)
Other		-			-			-			2			-			-			-			6			-			-			8

Allowance for credit losses – end of period	$	292		$	151		$	168		$	87		$	244		$	104		$	947		$	881		$	33		$	43		$	2,950


⁽¹⁾		For consumer loans, these amounts represent TDR Loans for which we evaluate reserves using a discounted cash flow methodology. Each loan is individually identified as a TDR Loan and then grouped together with other TDR Loans with similar characteristics. The discounted cash flow analysis is then applied to these groups of TDR Loans.