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Asset Quality

12 Months Ended

Dec. 31, 2011

5. Asset Quality

We manage our exposure to credit risk by closely monitoring loan performance trends and general economic conditions. A key indicator of the potential for future credit losses is the level of nonperforming assets and past due loans.

Our nonperforming assets and past due loans were as follows:


December 31,
in millions	2011		2010

Total nonperforming loans	$	727	$	1,068
Nonperforming loans held for sale		46		106
OREO		65		129
Other nonperforming assets		21		35
Total nonperforming assets	$	859	$	1,338


Restructured loans included in nonperforming loans^(a)	$	191	$	202
Restructured loans with a specifically allocated allowance ^(b)		50		57
Specifically allocated allowance for restructured loans ^(c)		10		18
Accruing loans past due 90 days or more	$	164	$	239
Accruing loans past due 30 through 89 days		441		476

(a)

A loan is “restructured” (i.e., troubled debt restructurings), for reasons related to the borrower’s financial difficulties, and we grant a concession that we would not otherwise have considered. To improve the collectability of the loan, typical concessions include reducing the interest rate, extending the maturity date or reducing the principal balance.

(b)	Included in impaired loans with a specifically allocated allowance.

(c)	Included in specifically allocated allowance for impaired loans.

At December 31, 2011, the approximate carrying amount of our commercial nonperforming loans outstanding represented 62% of their original contractual amount, total nonperforming loans outstanding represented 70% of their original contractual amount owed, and nonperforming assets in total were carried at 65% of their original contractual amount.

At December 31, 2011, our twenty largest nonperforming loans totaled $237 million, representing 33% of total loans on nonperforming status from continuing operations. At December 31, 2010, the twenty largest nonperforming loans totaled $306 million in nonperforming loans representing 29% of total loans on nonperforming status.

At December 31, 2011, we did not have any significant commitments to lend additional funds to borrowers with loans on nonperforming status. The amount by which nonperforming loans and loans held for sale, reduced expected interest income was $31 million for the year ended December 31, 2011, and $22 million for the year ended December 31, 2010.

The following tables set forth a further breakdown of impaired loans, evaluated for specific reserves, as of December 31, 2011 and 2010:


December 31, 2011 in millions	Recorded Investment		^(a)	Unpaid Principal Balance		^(b)	Specific Allowance		Average Recorded Investment
With no related allowance recorded:
Commercial, financial and agricultural	$	88		$	195			—	$	75
Commercial real estate:
Commercial mortgage		100			240			—		131
Construction		30			113			—		98
Total commercial real estate loans		130			353			—		229
Commercial lease financing		—			—			—		—
Total commercial loans with no related allowance recorded		218			548			—		304

With an allowance recorded:
Commercial, financial and agricultural		62			70		$	26		75
Commercial real estate:
Commercial mortgage		96			115			21		91
Construction		12			18			4		29
Total commercial real estate loans		108			133			25		120
Commercial lease financing		—			—			—		6
Total commercial loans with an allowance recorded		170			203			51		201
Total	$	388		$	751		$	51	$	505

(a)

The Recorded Investment in impaired loans represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our consolidated balance sheet.

(b)	The Unpaid Principal Balance represents the customer’s legal obligation to us.


December 31, 2010 in millions	Recorded Investment		^(a)	Unpaid Principal Balance		^(b)	Specific Allowance		Average Recorded Investment
With no related allowance recorded:
Commercial, financial and agricultural	$	61		$	133			—	$	66
Commercial real estate:
Commercial mortgage		162			310			—		166
Construction		166			404			—		219
Total commercial real estate loans		328			714			—		385
Commercial lease financing		—			—			—		—
Total commercial loans		389			847			—		451

Real estate — residential mortgage		—			—			—		2
Total loans with no related allowance recorded		389			847			—		453

With an allowance recorded:
Commercial, financial and agricultural		89			133		$	26		237
Commercial real estate:
Commercial mortgage		86			130			18		237
Construction		45			85			7		184
Total commercial real estate loans		131			215			25		421
Commercial lease financing		12			18			7		17
Total commercial loans		232			366			58		675

Real estate — residential mortgage		—			—			—		3
Consumer other:
Other		—			—			—		3
Total consumer — indirect loans		—			—			—		3
Total loans with an allowance recorded		232			366			58		681

Total	$	621		$	1,213		$	58	$	1,134

(a)

The Recorded Investement in impaired loans represents the face amount of the loan increased or decreased by applicable accrued interest, net deferred loan fees and costs, unamortized premium or discount, and reflects direct charge-offs. This amount is a component of total loans on our consolidated balance sheet.

(b)	The Unpaid Principal Balance represents the customer’s legal obligation to us.

For the years ended December 31, 2011 and 2010, interest income recognized on the outstanding balances of accruing impaired loans totaled $4 million and $6 million, respectively.

At December 31, 2011, aggregate restructured loans (accrual, nonaccrual, and held-for-sale loans) totaled $276 million, while at December 31, 2010, total restructured loans totaled $297 million. Although we added $182 million in restructured loans during the last 12 months, aggregate restructured loans decreased as a result of $203 million in payments and charge-offs.

A further breakdown of restructured loans (TDRs) included in nonperforming loans by loan category as of

December 31, 2011, follows:


December 31, 2011 dollars in millions	Number of loans		Pre-modification Outstanding Recorded Investment		Post-modification Outstanding Recorded Investment
LOAN TYPE
Nonperforming:
Commercial, financial and agricultural		13	$	71	$	39
Commercial real estate:
Real estate — commercial mortgage		15		120		91
Real estate — construction		5		24		11
Total commercial real estate loans		20		144		102
Commercial lease financing		147		18		7
Total commercial loans		180		233		148
Real estate — residential mortgage		90		12		11
Home equity:
Key Community Bank		41		5		5
Other		40		1		1
Total home equity loans		81		6		6
Consumer other — Key Community Bank		7		—		—
Consumer other:
Marine		57		27		26
Other		22		—		—
Total consumer other		79		27		26
Total consumer loans		257		45		43
Total nonperforming TDRs		437		278		191

Prior-year accruing:^(a)
Commercial, financial and agricultural		1		8		4
Commercial real estate:
Real estate — commercial mortgage		3		31		22
Real estate — construction		3		39		19
Total commercial real estate loans		6		70		41
Commercial lease financing		159		17		13
Total commercial loans		166		95		58
Real estate — residential mortgage		54		6		6
Home equity:
Key Community Bank		62		6		6
Other		71		3		2
Total home equity loans		133		9		8
Consumer other — Key Community Bank		14		—		—
Consumer other:
Marine		102		12		11
Other		31		2		2
Total consumer other		133		14		13
Total consumer loans		334		29		27
Total prior-year accruing TDRs		500		124		85
Total TDRs		937	$	402	$	276

(a)	All TDRs that were restructured prior to January 1, 2011 and are fully accruing.

We classify loan modifications as TDRs when a borrower is experiencing financial difficulties and we have granted a concession to the borrower. All commercial loan TDRs, regardless of size, are evaluated for impairment individually to determine the probable loss content and are assigned a specific loan allowance if the ALLL deems it appropriate. Consumer loan TDRs are assigned a loss rate that reflects the current assessment of that category of consumer loans to determine the appropriate allowance level. The financial effects of TDRs are reflected in the components that comprise the allowance for loan and lease losses in either the amount of charge-offs or loan loss provision and ultimate allowance level. There were no significant payment defaults during calendar year 2011 relating to loans that were designated as TDRs during calendar year 2010.

Our loan modifications are handled on a case by case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet our client’s financial needs. A majority of our concessions granted to borrowers are in the form of interest rate reductions. Other concession types include forgiveness of principal and other modifications of loan terms. Consumer loan concessions include Home Affordable Modification Program (“HAMP”) loans that have successfully completed the required trial period under HAMP and were permanently modified. HAMP loans that were in a trial period of approximately $4 million at December 31, 2011 were not material to our TDR or Non Performing Loan totals, and therefore have not been included in our December 31, 2011 TDR amounts.

The following table shows the concession types for our commercial accruing and nonaccruing TDRs.


December 31, dollars in millions	2011			2010
Interest rate reduction	$	177		$	188
Forgiveness of principal		23			38
Other modification of loan terms		8			14
Total	$	208		$	240

Total commercial and consumer TDRs	$	276		$	297
Total commercial TDRs to total commercial loans		.60	%		.70	%
Total commercial TDRs to total loans		.42			.48
Total commercial loans	$	34,782		$	34,520
Total loans		49,575			50,107

Our policies for our commercial and consumer loan portfolios for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans and resuming accrual of interest are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans.”

At December 31, 2011, approximately $48.2 billion, or 97%, of our total loans are current compared to $48.3 billion or 96% at December 31, 2010. At December 31, 2011 total past due loans and nonperforming loans of $1.3 billion represent approximately 3% of total loans compared to $1.8 billion, or 4% of total loans, at December 31, 2010.

The following aging analysis as of December 31, 2011 and 2010, of past due and current loans provides further information regarding Key’s credit exposure.


December 31, 2011 in millions	Current		30-59 Days Past Due		60-89 Days Past Due		90 and Greater Days Past Due		Nonperforming Loans		Total Past Due and Nonperforming Loans		Total Loans
LOAN TYPE
Commercial, financial and agricultural	$	19,136	$	25	$	17	$	12	$	188	$	242	$	19,378
Commercial real estate:
Commercial mortgage		7,680		57		18		64		218		357		8,037
Construction		1,225		6		1		26		54		87		1,312
Total commercial real estate loans		8,905		63		19		90		272		444		9,349

Commercial lease financing		5,920		71		21		16		27		135		6,055
Total commercial loans	$	33,961	$	159	$	57	$	118	$	487	$	821	$	34,782


Real estate — residential mortgage	$	1,816	$	21	$	13	$	9	$	87	$	130	$	1,946
Home equity:
Key Community Bank		9,004		64		34		19		108		225		9,229
Other		497		14		8		4		12		38		535
Total home equity loans		9,501		78		42		23		120		263		9,764

Consumer other — Key Community Bank		1,168		9		6		8		1		24		1,192
Consumer other:
Marine		1,678		37		15		5		31		88		1,766
Other		119		2		2		1		1		6		125
Total consumer other		1,797		39		17		6		32		94		1,891
Total consumer loans	$	14,282	$	147	$	78	$	46	$	240	$	511	$	14,793


Total loans	$	48,243	$	306	$	135	$	164	$	727	$	1,332	$	49,575


December 31, 2010 in millions	Current		30-59 Days Past Due		60-89 Days Past Due		90 and Greater Days Past Due		Nonperforming Loans		Total Past Due and Nonperforming Loans		Total Loans
LOAN TYPE
Commercial, financial and agricultural	$	16,049	$	35	$	22	$	93	$	242	$	392	$	16,441
Commercial real estate:
Commercial mortgage		9,158		33		16		40		255		344		9,502
Construction		1,796		27		4		38		241		310		2,106
Total commercial real estate loans		10,954		60		20		78		496		654		11,608

Commercial lease financing		6,316		64		17		10		64		155		6,471
Total commercial loans	$	33,319	$	159	$	59	$	181	$	802	$	1,201	$	34,520


Real estate — residential mortgage	$	1,698	$	25	$	12	$	11	$	98	$	146	$	1,844
Home equity:
Key Community Bank		9,282		69		37		24		102		232		9,514
Other		615		17		10		6		18		51		666
Total home equity loans		9,897		86		47		30		120		283		10,180

Consumer other — Key Community Bank		1,139		9		6		9		4		28		1,167
Consumer other:
Marine		2,117		48		20		7		42		117		2,234
Other		154		3		2		1		2		8		162
Total consumer other		2,271		51		22		8		44		125		2,396
Total consumer loans	$	15,005	$	171	$	87	$	58	$	266	$	582	$	15,587


Total loans	$	48,324	$	330	$	146	$	239	$	1,068	$	1,783	$	50,107

The risk characteristic prevalent to both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the assigned loan risk rating grades for the commercial loan portfolios and the regulatory risk ratings assigned for the consumer loan portfolios. This risk rating stratification assists in the determination of the ALLL. Loan grades are assigned at the time of origination, verified by credit risk management and periodically reevaluated thereafter.

Most extensions of credit are subject to loan grading or scoring. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector and our view of industry risk within the context of the general economic outlook. Types of exposure, transaction structure and collateral, including credit risk mitigants, affect the expected recovery assessment.

Credit quality indicators for loans are updated on an ongoing basis. Bond rating classifications are indicative of the credit quality of our commercial loan portfolios and are determined by converting our internally assigned risk rating grades to bond rating categories. Payment activity and the regulatory classifications of pass, special mention and substandard are indicators of the credit quality of our consumer loan portfolios.

Credit quality indicators for our commercial and consumer loan portfolios based on bond rating, regulatory classification and payment activity as of December 31, 2011 and 2010, are as follows:

Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category^(a)


December 31, in millions
	Commercial, financial and agricultural				RE — Commercial				RE — Construction				Commercial Lease				Total
RATING ^(b)		2011		2010		2011		2010		2011		2010		2011		2010		2011		2010
AAA — AA	$	121	$	99	$	3	$	2	$	3		—	$	650	$	658	$	777	$	759
A		885		704		61		85		3	$	4		1,159		1,245		2,108		2,038
BBB — BB		16,347		12,386		6,061		6,125		784		829		3,812		3,796		27,004		23,136
B		803		1,282		622		1,349		185		383		252		395		1,862		3,409
CCC — C		1,222		1,970		1,290		1,941		337		890		182		377		3,031		5,178
Total	$	19,378	$	16,441	$	8,037	$	9,502	$	1,312	$	2,106	$	6,055	$	6,471	$	34,782	$	34,520

(a)	Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

(b)	Our bond rating to internal loan grade conversion system is as follows: AAA - AA = 1, A = 2, BBB - BB = 3 - 13, B = 14 - 16, and CCC - C = 17 - 20.

Consumer Credit Exposure

Credit Risk Profile by Regulatory Classifications^(a)


December 31, in millions
	Residential —Prime
GRADE		2011		2010
Pass	$	11,471	$	11,765
Special Mention		—		—
Substandard		239		259
Total	$	11,710	$	12,024

Credit Risk Profile Based on Payment Activity^(a)


December 31, in millions	Consumer — Key Community Bank				Consumer — Marine				Consumer — Other				Total
December 31, in millions		2011		2010		2011		2010		2011		2010		2011		2010
Performing	$	1,191	$	1,163	$	1,735	$	2,192	$	124	$	160	$	3,050	$	3,515
Nonperforming		1		4		31		42		1		2		33		48
Total	$	1,192	$	1,167	$	1,766	$	2,234	$	125	$	162	$	3,083	$	3,563

(a)	Credit quality indicators are updated on an ongoing basis and reflect credit quality information as of the dates indicated.

We estimate the appropriate level of the allowance for loan and lease losses on at least a quarterly basis. The methodology is described in Note 1 (“Summary of Significant Accounting Policies”) under the headings “Allowance for Loan and Lease Losses.” We apply historical loss rates to existing loans with similar risk characteristics as noted in the credit quality indicator table above; and exercise judgment to assess the impact of factors such as changes in economic conditions, changes in credit policies or underwriting standards, and changes in the level of credit risk associated with specific industries and markets. For all commercial TDRs, regardless of size, as well as impaired commercial loans with an outstanding balance greater than $2.5 million, we conduct further analysis to determine the probable loss content and assign a specific allowance to the loan if deemed appropriate. We estimate the extent of impairment by comparing the carrying amount of the loan with the estimated present value of its future cash flows, the fair value of its underlying collateral or the loan’s observable market price. A specific allowance also may be assigned — even when sources of repayment appear sufficient — if we remain uncertain about whether the loan will be repaid in full. The allowance for loan and lease losses at December 31, 2011, represents our best estimate of the probable credit losses inherent in the loan portfolio at that date.

While quantitative modeling factors such as default probability and expected recovery rates are constantly changing as the financial strength of the borrower and overall economic conditions change, there have been no changes to the accounting policies or methodology we used to estimate the allowance for loan and lease losses.

Commercial loans generally are charged off in full or charged down to the fair value of the underlying collateral when the borrower’s payment is 180 days past due. Our charge-off policy for most consumer loans is similar but takes effect when payments are 120 days past due. Home equity and residential mortgage loans generally are charged down to the fair value of the underlying collateral when payment is 180 days past due.

At December 31, 2011, the allowance for loan and lease losses was $1.0 billion, or 2.03% of loans compared to $1.6 billion, or 3.20% of loans, at December 31, 2010. At December 31, 2011, the allowance for loan and lease losses was 138.10% of nonperforming loans compared to 150.19% at December 31, 2010.

A summary of the allowance for loan and lease losses at the end of the past three years is presented in the table below:


Year ended December 31,
in millions	2011			2010			2009
Balance at beginning of period — continuing operations	$	1,604		$	2,534		$	1,629
Charge-offs		(715	)		(1,822	)		(2,396	)
Recoveries		174			252			139
Net loans charged off		(541	)		(1,570	)		(2,257	)
Provision for loan and lease losses from continuing operations		(60	)		638			3,159
Foreign currency translation adjustment		1			2			3
Balance at end of period — continuing operations	$	1,004		$	1,604		$	2,534

The changes in the ALLL by loan category for the periods indicated are as follows:


	December 31,										December 31,
in millions	2010		Provision			Charge-offs			Recoveries		2011
Commercial, financial and agricultural	$	485	$	(32	)	$	(169	)	$	50	$	334
Real estate — commercial mortgage		416		(41	)		(113	)		10		272
Real estate — construction		145		(26	)		(83	)		27		63
Commercial lease financing		175		(80	)		(42	)		25		78
Total commercial loans		1,221		(179	)		(407	)		112		747
Real estate — residential mortgage		49		14			(29	)		3		37
Home equity:
Key Community Bank		120		72			(100	)		11		103
Other		57		13			(45	)		4		29
Total home equity loans		177		85			(145	)		15		132
Consumer other — Key Community Bank		57		21			(45	)		8		41
Consumer other:
Marine		89		5			(80	)		32		46
Other		11		(5	)		(9	)		4		1
Total consumer other:		100		—			(89	)		36		47
Total consumer loans		383		120			(308	)		62		257
Total ALLL — continuing operations		1,604		(59	)^(a)		(715	)		174		1,004
Discontinued operations		114		113			(138	)		15		104
Total ALLL — including discontinued operations	$	1,718	$	54		$	(853	)	$	189	$	1,108

(a)	Includes $1 million of foreign currency translation adjustment.


	December 31,										December 31,
in millions	2009		Provision			Charge-offs			Recoveries		2010
Commercial, financial and agricultural	$	796	$	167		$	(565	)	$	87	$	485
Real estate — commercial mortgage		578		168			(360	)		30		416
Real estate — construction		418		63			(380	)		44		145
Commercial lease financing		280		(42	)		(88	)		25		175
Total commercial loans		2,072		356			(1,393	)		186		1,221
Real estate — residential mortgage		30		53			(36	)		2		49
Home equity:
Key Community Bank		130		106			(123	)		7		120
Other		78		38			(62	)		3		57
Total home equity loans		208		144			(185	)		10		177
Consumer other — Key Community Bank		73		41			(64	)		7		57
Consumer other:
Marine		140		35			(129	)		43		89
Other		11		11			(15	)		4		11
Total consumer other:		151		46			(144	)		47		100
Total consumer loans		462		284			(429	)		66		383
Total ALLL — continuing operations		2,534		640	^(a)		(1,822	)		252		1,604
Discontinued operations		157		78			(129	)		8		114
Total ALLL — including discontinued operations	$	2,691	$	718		$	(1,951	)	$	260	$	1,718

(a)	Includes $2 million of foreign currency translation adjustment.

Our allowance for loan and lease losses decreased by $600 million, or 37%, since 2010. This contraction was associated with the improvement in credit quality of our loan portfolios, which has trended more favorably the past four quarters. Our asset quality metrics showed continued improvement, and therefore, have resulted in favorable risk rating migration and a reduction in our general allowance. Our general allowance encompasses the application of historical loss rates to our existing loans with similar risk characteristics and an assessment of factors such as changes in economic conditions and changes in credit policies or underwriting standards. Our delinquency trends improved throughout most of 2010 and into 2011. We attribute this improvement to a more moderate level of lending activity, more favorable conditions in the capital markets, improvement in client income statements and continued run off in our exit loan portfolio.

For continuing operations, the loans outstanding individually evaluated for impairment totaled $388 million, with a corresponding allowance of $51 million at December 31, 2011. Loans outstanding collectively evaluated for impairment totaled $49.2 billion, with a corresponding allowance of $953 million at December 31, 2011.

A breakdown of the individual and collective allowance for loan and lease losses and the corresponding loan balances as of December 31, 2011 follows:


	Allowance^(a)				Outstanding^(a)
December 31, 2011 in millions	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	26	$	308	$	19,378	$	150	$	19,228
Commercial real estate:
Commercial mortgage		21		251		8,037		196		7,841
Construction		4		59		1,312		42		1,270
Total commercial real estate loans		25		310		9,349		238		9,111
Commercial lease financing		—		78		6,055		—		6,055
Total commercial loans		51		696		34,782		388		34,394
Real estate — residential mortgage		—		37		1,946		—		1,946
Home equity:
Key Community Bank		—		103		9,229		—		9,229
Other		—		29		535		—		535
Total home equity loans		—		132		9,764		—		9,764
Consumer other — Key Community Bank		—		41		1,192		—		1,192
Consumer other:
Marine		—		46		1,766		—		1,766
Other		—		1		125		—		125
Total consumer other		—		47		1,891		—		1,891
Total consumer loans		—		257		14,793		—		14,793
Total ALLL — continuing operations		51		953		49,575		388		49,187
Discontinued operations		—		104		5,812		—		5,812
Total ALLL — including discontinued operations	$	51	$	1,057	$	55,387	$	388	$	54,999

(a)	There were no loans acquired with deteriorated credit quality at December 31, 2011.

A breakdown of the individual and collective allowance for loan and lease losses and the corresponding loan balances as of December 31, 2010 follows:


	Allowance^(a)				Outstanding^(a)
December 31, 2010 in millions	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Loans		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	26	$	459	$	16,441	$	150	$	16,291
Commercial real estate:
Commercial mortgage		18		398		9,502		248		9,254
Construction		7		138		2,106		211		1,895
Total commercial real estate loans		25		536		11,608		459		11,149
Commercial lease financing		7		168		6,471		12		6,459
Total commercial loans		58		1,163		34,520		621		33,899
Real estate — residential mortgage		—		49		1,844		—		1,844
Home equity:
Key Community Bank		—		120		9,514		—		9,514
Other		—		57		666		—		666
Total home equity loans		—		177		10,180		—		10,180
Consumer other — Key Community Bank		—		57		1,167		—		1,167
Consumer other:
Marine		—		89		2,234		—		2,234
Other		—		11		162		—		162
Total consumer other		—		100		2,396		—		2,396
Total consumer loans		—		383		15,587		—		15,587
Total ALLL — continuing operations		58		1,546		50,107		621		49,486
Discontinued operations		—		114		6,451		—		6,451
Total ALLL — including discontinued operations	$	58	$	1,660	$	56,558	$	621	$	55,937

(a)	There were no loans acquired with deteriorated credit quality at December 31, 2010.

The liability for credit losses inherent in lending-related commitments, such as letters of credit and unfunded loan commitments, is included in “accrued expense and other liabilities” on the balance sheet. We establish the amount of this reserve by considering both historical trends and current market conditions quarterly, or more often if deemed necessary. Our liability for credit losses on lending-related commitments has decreased by $28 million since 2010 to $45 million at December 31, 2011. When combined with our allowance for loan and lease losses, our total allowance for credit losses represented 2.12% of loans at December 31, 2011, compared to 3.35% at December 31, 2010.

Changes in the liability for credit losses on lending-related commitments are summarized as follows:


in millions	2011			2010			2009
Balance at beginning of year	$	73		$	121		$	54
Provision (credit) for losses on lending-related commitments		(28	)		(48	)		67
Balance at end of year	$	45		$	73		$	121