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Loans, Leases, and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

LOANS, LEASES, AND ALLOWANCE FOR CREDIT LOSSES

Loans, Leases, and Loans Held for Sale

Loans and leases are summarized as follows according to major portfolio segment and specific loan class:


(In millions)	September 30, 2021		December 31, 2020

Loans held for sale	$	67	$	81
Commercial:
Commercial and industrial	$	13,230	$	13,444
PPP	3,080		5,572
Leasing	293		320
Owner-occupied	8,446		8,185
Municipal	3,400		2,951
Total commercial	28,449		30,472
Commercial real estate:
Construction and land development	2,843		2,345
Term	9,310		9,759
Total commercial real estate	12,153		12,104
Consumer:
Home equity credit line	2,834		2,745
1-4 family residential	6,140		6,969
Construction and other consumer real estate	584		630
Bankcard and other revolving plans	395		432
Other	123		124
Total consumer	10,076		10,900

Total loans and leases	$	50,678	$	53,476

Loans and leases are presented at their amortized cost basis, which includes net unamortized purchase premiums, discounts, and deferred loan fees and costs totaling $117 million and $149 million at September 30, 2021 and December 31, 2020, respectively. Amortized cost basis does not include accrued interest receivables of $175 million and $200 million at September 30, 2021 and December 31, 2020, respectively. These receivables are presented in the Consolidated Balance Sheet within the “Other Assets” line item.

Municipal loans generally include loans to state and local governments (“municipalities”) with the debt service being repaid from general funds or pledged revenues of the municipal entity, or to private commercial entities or 501(c)(3) not-for-profit entities utilizing a pass-through municipal entity to achieve favorable tax treatment.

Land acquisition and development loans included in the construction and land development loan portfolio were $146 million at September 30, 2021 and $156 million at December 31, 2020.

Loans with a carrying value of $27.5 billion at September 30, 2021 and $24.7 billion at December 31, 2020 have been pledged at the Federal Reserve and the FHLB of Des Moines as collateral for potential borrowings.

We sold loans totaling $384 million and $1.2 billion for the three and nine months ended September 30, 2021 and $463 million and $1.4 billion for the three and nine months ended September 30, 2020, respectively, that were classified as loans held for sale. The sold loans were derecognized from the balance sheet. Loans classified as loans held for sale primarily consist of conforming residential mortgages and the guaranteed portion of SBA loans that are primarily sold to U.S. government agencies or participated to third parties. They do not consist of loans from the SBA's Paycheck Protection Program. At times, we have continuing involvement in the sold loans in the form of servicing rights or guarantees. Amounts added to loans held for sale during these same periods were $387 million and $1.2 billion for the three and nine months ended September 30, 2021 and $480 million and $1.4 billion for the

three and nine months ended September 30, 2020, respectively. See Note 5 for further information regarding guaranteed securities.

The principal balance of sold loans for which we retain servicing was approximately $3.1 billion at September 30, 2021, and $2.7 billion at December 31, 2020. The total income from loans sold, excluding servicing, was $12 million and $30 million for the three and nine months ended September 30, 2021, and $18 million and $44 million for the three and nine months ended September 30, 2020, respectively.

Allowance for Credit Losses

The allowance for credit losses (“ACL”), which consists of the allowance for loan and lease losses (“ALLL”) and the reserve for unfunded lending commitments (“RULC”), represents our estimate of current expected credit losses related to the loan and lease portfolio and unfunded lending commitments as of the balance sheet date. For additional information regarding our policies and methodologies used to estimate the ACL, see Note 6 of our 2020 Form 10-K.

The ACL for AFS and HTM debt securities is estimated separately from loans. For HTM securities, the ACL is estimated consistent with the approach for loans carried at amortized cost. See Note 5 for further discussion of our estimate of expected credit losses on AFS securities and disclosures related to AFS and HTM securities.

Changes in the ACL are summarized as follows:


	Three Months Ended September 30, 2021
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses


Balance at beginning of period	$	321	$	111	$	103	$	535
Provision for loan losses	(25)		(10)		(10)		(45)
Gross loan and lease charge-offs	4		—		4		8
Recoveries	7		—		2		9
Net loan and lease charge-offs (recoveries)	(3)		—		2		(1)
Balance at end of period	$	299	$	101	$	91	$	491
Reserve for unfunded lending commitments


Balance at beginning of period	$	21	$	10	$	8	$	39
Provision for unfunded lending commitments	(2)		—		1		(1)
Balance at end of period	$	19	$	10	$	9	$	38
Total allowance for credit losses at end of period
Allowance for loan losses	$	299	$	101	$	91	$	491
Reserve for unfunded lending commitments	19		10		9		38
Total allowance for credit losses	$	318	$	111	$	100	$	529


	Nine Months Ended September 30, 2021
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses


Balance at beginning of period	$	464	$	171	$	142	$	777
Provision for loan losses	(162)		(70)		(49)		(281)
Gross loan and lease charge-offs	27		—		10		37
Recoveries	24		—		8		32
Net loan and lease charge-offs (recoveries)	3		—		2		5
Balance at end of period	$	299	$	101	$	91	$	491
Reserve for unfunded lending commitments


Balance at beginning of period	$	30	$	20	$	8	$	58
Provision for unfunded lending commitments	(11)		(10)		1		(20)
Balance at end of period	$	19	$	10	$	9	$	38
Total allowance for credit losses at end of period
Allowance for loan losses	$	299	$	101	$	91	$	491
Reserve for unfunded lending commitments	19		10		9		38
Total allowance for credit losses	$	318	$	111	$	100	$	529


	Three Months Ended September 30, 2020
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses


Balance at beginning of period	$	571	$	144	$	145	$	860
Provision for loan losses	41		6		(2)		45
Gross loan and lease charge-offs	54		1		3		58
Recoveries	4		—		2		6
Net loan and lease charge-offs (recoveries)	50		1		1		52
Balance at end of period	$	562	$	149	$	142	$	853
Reserve for unfunded lending commitments


Balance at beginning of period	$	27	$	20	$	7	$	54
Provision for unfunded lending commitments	14		(4)		—		10
Balance at end of period	$	41	$	16	$	7	$	64
Total allowance for credit losses at end of period
Allowance for loan losses	$	562	$	149	$	142	$	853
Reserve for unfunded lending commitments	41		16		7		64
Total allowance for credit losses	$	603	$	165	$	149	$	917


	Nine Months Ended September 30, 2020
(In millions)	Commercial		Commercial real estate		Consumer		Total
Allowance for loan losses


Balance at beginning of period	$	282	$	69	$	146	$	497
Provision for loan losses	364		81		1		446
Gross loan and lease charge-offs	95		1		11		107
Recoveries	11		—		6		17
Net loan and lease charge-offs (recoveries)	84		1		5		90
Balance at end of period	$	562	$	149	$	142	$	853
Reserve for unfunded lending commitments


Balance at beginning of period	$	11	$	12	$	6	$	29
Provision for unfunded lending commitments	30		4		1		35
Balance at end of period	$	41	$	16	$	7	$	64
Total allowance for credit losses at end of period
Allowance for loan losses	$	562	$	149	$	142	$	853
Reserve for unfunded lending commitments	41		16		7		64
Total allowance for credit losses	$	603	$	165	$	149	$	917

Nonaccrual Loans

Loans are generally placed on nonaccrual status when payment in full of principal and interest is not expected, or the loan is 90 days or more past due as to principal or interest, unless the loan is both well-secured and in the process of collection. Factors we consider in determining whether a loan is placed on nonaccrual include delinquency status, collateral-value, borrower or guarantor financial statement information, bankruptcy status, and other information which would indicate that the full and timely collection of interest and principal is uncertain.

A nonaccrual loan may be returned to accrual status when (1) all delinquent interest and principal become current in accordance with the terms of the loan agreement, (2) the loan, if secured, is well-secured, (3) the borrower has paid according to the contractual terms for a minimum of six months, and (4) an analysis of the borrower indicates a reasonable assurance of the borrower's ability and willingness to maintain payments.

The amortized cost basis of loans on nonaccrual status is summarized as follows:


	September 30, 2021
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance


Commercial:
Commercial and industrial	$	27	$	130	$	157	$	30


Owner-occupied	41		26		67		3

Total commercial	68		156		224		33
Commercial real estate:

Term	11		14		25		1
Total commercial real estate	11		14		25		1
Consumer:
Home equity credit line	5		10		15		3
1-4 family residential	12		46		58		6

Bankcard and other revolving plans	—		1		1		—

Total consumer loans	17		57		74		9
Total	$	96	$	227	$	323	$	43


	December 31, 2020
	Amortized cost basis				Total amortized cost basis
(In millions)	with no allowance		with allowance				Related allowance



Commercial:
Commercial and industrial	$	73	$	67	$	140	$	22


Owner-occupied	38		38		76		4

Total commercial	111		105		216		26
Commercial real estate:

Term	12		19		31		3
Total commercial real estate	12		19		31		3
Consumer:
Home equity credit line	2		14		16		3
1-4 family residential	14		89		103		9

Bankcard and other revolving plans	—		1		1		1

Total consumer loans	16		104		120		13
Total	$	139	$	228	$	367	$	42

For accruing loans, interest is accrued and interest payments are recognized into interest income according to the contractual loan agreement. For nonaccruing loans, the accrual of interest is discontinued, any uncollected or accrued interest is reversed or written-off from interest income in a timely manner (generally within one month), and any payments received on these loans are not recognized into interest income, but are applied as a reduction to the principal outstanding. For the three and nine months ended September 30, 2021 and 2020, there was no interest income recognized on a cash basis during the period the loans were on nonaccrual.

The amount of accrued interest receivables written-off by reversing interest income during the period is summarized by loan portfolio segment as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2021		2020		2021		2020

Commercial	$	3	$	5	$	11	$	13
Commercial real estate	1		1		1		2
Consumer	—		—		—		—
Total	$	4	$	6	$	12	$	15

Past Due Loans

Closed-end loans with payments scheduled monthly are reported as past due when the borrower is in arrears for two or more monthly payments. Similarly, open-end credits, such as bankcard and other revolving credit plans, are reported as past due when the minimum payment has not been made for two or more billing cycles. Other multi-payment obligations (i.e., quarterly, semi-annual, etc.), single payment, and demand notes, are reported as past due when either principal or interest is due and unpaid for a period of 30 days or more.

Past due loans (accruing and nonaccruing) are summarized as follows:


	September 30, 2021
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	13,191	$	16	$	23	$	39	$	13,230	$	2	$	133
PPP	3,078		2		—		2		3,080		—		—
Leasing	293		—		—		—		293		—		—
Owner-occupied	8,362		66		18		84		8,446		2		49
Municipal	3,400		—		—		—		3,400		—		—
Total commercial	28,324		84		41		125		28,449		4		182
Commercial real estate:
Construction and land development	2,824		19		—		19		2,843		—		—
Term	9,288		7		15		22		9,310		—		7
Total commercial real estate	12,112		26		15		41		12,153		—		7
Consumer:
Home equity credit line	2,828		2		4		6		2,834		—		10
1-4 family residential	6,103		8		29		37		6,140		—		27
Construction and other consumer real estate	584		—		—		—		584		—		—
Bankcard and other revolving plans	391		3		1		4		395		—		1
Other	122		1		—		1		123		—		—
Total consumer loans	10,028		14		34		48		10,076		—		38
Total	$	50,464	$	124	$	90	$	214	$	50,678	$	4	$	227


	December 31, 2020
(In millions)	Current		30-89 days past due		90+ days past due		Total past due		Total loans		Accruing loans 90+ days past due		Nonaccrual loans that are current 1

Commercial:
Commercial and industrial	$	13,388	$	26	$	30	$	56	$	13,444	$	2	$	109
PPP	5,572		—		—		—		5,572		—		—
Leasing	320		—		—		—		320		—		1
Owner-occupied	8,129		34		22		56		8,185		—		48
Municipal	2,951		—		—		—		2,951		—		—
Total commercial	30,360		60		52		112		30,472		2		158
Commercial real estate:
Construction and land development	2,341		—		4		4		2,345		4		—
Term	9,692		57		10		67		9,759		4		13
Total commercial real estate	12,033		57		14		71		12,104		8		13
Consumer:
Home equity credit line	2,733		8		4		12		2,745		—		9
1-4 family residential	6,891		12		66		78		6,969		—		33
Construction and other consumer real estate	630		—		—		—		630				—
Bankcard and other revolving plans	428		2		2		4		432		2		1
Other	123		1		—		1		124		—		—
Total consumer loans	10,805		23		72		95		10,900		2		43
Total	$	53,198	$	140	$	138	$	278	$	53,476	$	12	$	214

1 Represents nonaccrual loans that are not past due more than 30 days; however, full payment of principal and interest is still not expected.

Credit Quality Indicators

In addition to the nonaccrual and past due criteria, we also analyze loans using loan risk-grading systems, which vary based on the size and type of credit risk exposure. The internal risk grades we assign to loans are classified using the following definitions of Pass, Special Mention, Substandard, and Doubtful, which are consistent with published definitions of regulatory risk classifications.

•Pass – A Pass asset is higher-quality and does not fit any of the other categories described below. The likelihood of loss is considered low.

•Special Mention – A Special Mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in our credit position at some future date.

•Substandard – A Substandard asset is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have well-defined weaknesses and are characterized by the distinct possibility that we may sustain some loss if deficiencies are not corrected.

•Doubtful – A Doubtful asset has all the weaknesses inherent in a Substandard asset with the added characteristics that the weaknesses make collection or liquidation in full highly questionable and improbable.

The balance of loans classified as Doubtful was less than $1 million at September 30, 2021 and was $4 million at December 31, 2020.

We generally assign internal risk grades to commercial and CRE loans with commitments greater than $1 million based on financial and statistical models, individual credit analysis, and loan officer experience and judgment. For these larger loans, we assign one of multiple risk grades within the Pass classification or one of the risk classifications described previously. We review and confirm our internal risk grades quarterly, or as soon as we identify information that affects the credit risk of the loan.

For consumer loans and certain small commercial and CRE loans with commitments less than or equal to $1 million, we generally assign internal risk grades similar to those described previously based on automated rules that depend on refreshed credit scores, payment performance, and other risk indicators. These are generally assigned either a Pass or Substandard grade and are reviewed as we identify information that might warrant a grade change.

The following schedule presents the amortized cost basis of loans and leases categorized by year of origination and risk classification as monitored by management. The year of origination is generally represented by the year the loan was either originated or the year in which the loan was renewed or restructured.


	September 30, 2021
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2021		2020		2019		2018		2017		Prior						Total loans
Commercial:
Commercial and industrial
Pass	$	1,804	$	1,419	$	1,377	$	855	$	354	$	277	$	6,018	$	182	$	12,286
Special Mention	6		15		37		15		30		4		172		1		280
Accruing Substandard	20		36		109		82		31		77		150		2		507
Nonaccrual	3		11		4		3		4		26		87		19		157
Total commercial and industrial	1,833		1,481		1,527		955		419		384		6,427		204		13,230
PPP
Pass	1,950		1,130		—		—		—		—		—		—		3,080


Nonaccrual	—		—		—		—		—		—		—		—		—
Total PPP	1,950		1,130		—		—		—		—		—		—		3,080
Leasing
Pass	16		52		73		69		46		22		—		—		278
Special Mention	—		1		6		1		1		—		—		—		9
Accruing Substandard	—		—		—		—		—		6		—		—		6
Nonaccrual	—		—		—		—		—		—		—		—		—
Total leasing	16		53		79		70		47		28		—		—		293
Owner-occupied
Pass	1,591		1,504		1,052		914		743		1,858		135		68		7,865
Special Mention	9		18		28		45		21		59		3		6		189
Accruing Substandard	67		23		42		48		29		101		14		1		325
Nonaccrual	—		6		13		15		10		21		2		—		67
Total owner-occupied	1,667		1,551		1,135		1,022		803		2,039		154		75		8,446
Municipal
Pass	858		979		606		290		365		249		3		—		3,350
Special Mention	10		—		—		—		—		26		—		—		36
Accruing Substandard	—		9		—		—		—		5		—		—		14
Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal	868		988		606		290		365		280		3		—		3,400
Total commercial	6,334		5,203		3,347		2,337		1,634		2,731		6,584		279		28,449
Commercial real estate:
Construction and land development
Pass	449		765		723		124		43		2		637		60		2,803
Special Mention	—		—		1		—		—		—		—		—		1
Accruing Substandard	12		—		27		—		—		—		—		—		39
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development	461		765		751		124		43		2		637		60		2,843
Term
Pass	1,636		1,964		1,595		1,121		590		1,561		194		195		8,856
Special Mention	65		21		32		73		12		31		—		3		237
Accruing Substandard	8		9		25		59		16		73		—		2		192
Nonaccrual	—		1		5		—		—		—		19		—		25
Total term	1,709		1,995		1,657		1,253		618		1,665		213		200		9,310
Total commercial real estate	2,170		2,760		2,408		1,377		661		1,667		850		260		12,153


	September 30, 2021
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2021		2020		2019		2018		2017		Prior						Total loans














Consumer:
Home equity credit line
Pass	—		—		—		—		—		—		2,715		100		2,815
Special Mention	—		—		—		—		—		—		1		—		1
Accruing Substandard	—		—		—		—		—		—		3		—		3
Nonaccrual	—		—		—		—		—		—		8		7		15
Total home equity credit line	—		—		—		—		—		—		2,727		107		2,834
1-4 family residential
Pass	969		1,076		791		553		762		1,929		—		—		6,080
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		2		—		—		2
Nonaccrual	—		3		5		3		12		35		—		—		58
Total 1-4 family residential	969		1,079		796		556		774		1,966		—		—		6,140
Construction and other consumer real estate
Pass	162		273		104		31		5		8		—		—		583
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		1		—		—		—		—		—		—		1
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	162		274		104		31		5		8		—		—		584
Bankcard and other revolving plans
Pass	—		—		—		—		—		—		390		3		393
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		1		—		1
Nonaccrual	—		—		—		—		—		—		1		—		1
Total bankcard and other revolving plans	—		—		—		—		—		—		392		3		395
Other consumer
Pass	56		26		20		12		6		3		—		—		123
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	56		26		20		12		6		3		—		—		123
Total consumer	1,187		1,379		920		599		785		1,977		3,119		110		10,076
Total loans	$	9,691	$	9,342	$	6,675	$	4,313	$	3,080	$	6,375	$	10,553	$	649	$	50,678


	December 31, 2020
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2020		2019		2018		2017		2016		Prior						Total loans
Commercial:
Commercial and industrial
Pass	$	2,585	$	2,743	$	1,903	$	829	$	296	$	228	$	3,298	$	109	$	11,991
Special Mention	79		152		183		98		4		43		110		1		670
Accruing Substandard	123		157		129		44		26		17		141		6		643
Nonaccrual	57		2		10		8		2		15		36		10		140
Total commercial and industrial	2,844		3,054		2,225		979		328		303		3,585		126		13,444
PPP
Pass	5,572		—		—		—		—		—		—		—		5,572



Total PPP	5,572		—		—		—		—		—		—		—		5,572
Leasing
Pass	87		121		44		34		14		5		—		—		305
Special Mention	1		—		2		1		—		6		—		—		10
Accruing Substandard	2		1		1		1		—		—		—		—		5
Nonaccrual	—		—		—		—		—		—		—		—		—
Total leasing	90		122		47		36		14		11		—		—		320
Owner-occupied
Pass	1,588		1,205		1,167		895		585		1,806		161		11		7,418
Special Mention	72		65		60		60		51		41		9		3		361
Accruing Substandard	28		64		61		37		35		98		6		1		330
Nonaccrual	8		11		15		11		6		23		2		—		76
Total owner-occupied	1,696		1,345		1,303		1,003		677		1,968		178		15		8,185
Municipal
Pass	1,031		827		359		419		68		227		3		—		2,934
Special Mention	—		—		—		—		—		8		—		—		8
Accruing Substandard	—		—		—		—		—		9		—		—		9
Nonaccrual	—		—		—		—		—		—		—		—		—
Total municipal	1,031		827		359		419		68		244		3		—		2,951
Total commercial	11,233		5,348		3,934		2,437		1,087		2,526		3,766		141		30,472
Commercial real estate:
Construction and land development
Pass	558		933		267		41		1		6		423		3		2,232
Special Mention	24		43		11		—		—		—		5		—		83
Accruing Substandard	—		30		—		—		—		—		—		—		30
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and land development	582		1,006		278		41		1		6		428		3		2,345
Term
Pass	2,524		1,858		1,639		761		778		1,291		73		20		8,944
Special Mention	110		89		177		42		23		85		—		5		531
Accruing Substandard	41		34		96		30		18		34		—		—		253
Nonaccrual	3		5		—		2		1		20		—		—		31
Total term	2,678		1,986		1,912		835		820		1,430		73		25		9,759
Total commercial real estate	3,260		2,992		2,190		876		821		1,436		501		28		12,104


	December 31, 2020
	Term loans												Revolving loans amortized cost basis		Revolving loans converted to term loans amortized cost basis
	Amortized cost basis by year of origination
(In millions)	2020		2019		2018		2017		2016		Prior						Total loans














Consumer:
Home equity credit line
Pass	—		—		—		—		—		—		2,606		115		2,721
Special Mention	—		—		—		—		—		—		2		—		2
Accruing Substandard	—		—		—		—		—		—		6		—		6
Nonaccrual	—		—		—		—		—		—		11		5		16
Total home equity credit line	—		—		—		—		—		—		2,625		120		2,745
1-4 family residential
Pass	1,185		1,017		833		1,081		1,174		1,570		—		—		6,860
Special Mention	—		—		—		—		—		2		—		—		2
Accruing Substandard	—		—		1		—		2		1		—		—		4
Nonaccrual	2		12		7		19		15		48		—		—		103
Total 1-4 family residential	1,187		1,029		841		1,100		1,191		1,621		—		—		6,969
Construction and other consumer real estate
Pass	200		296		106		16		1		11		—		—		630
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total construction and other consumer real estate	200		296		106		16		1		11		—		—		630
Bankcard and other revolving plans
Pass	—		—		—		—		—		—		426		2		428
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		3		—		3
Nonaccrual	—		—		—		—		—		—		—		1		1
Total bankcard and other revolving plans	—		—		—		—		—		—		429		3		432
Other consumer
Pass	51		35		22		10		4		2		—		—		124
Special Mention	—		—		—		—		—		—		—		—		—
Accruing Substandard	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		—		—		—		—
Total other consumer	51		35		22		10		4		2		—		—		124
Total consumer	1,438		1,360		969		1,126		1,196		1,634		3,054		123		10,900
Total loans	$	15,931	$	9,700	$	7,093	$	4,439	$	3,104	$	5,596	$	7,321	$	292	$	53,476

Modified and Restructured Loans

Loans may be modified in the normal course of business for competitive reasons or to strengthen our collateral position. Loan modifications and restructurings may also occur when the borrower experiences financial difficulty and needs temporary or permanent relief from the original contractual terms of the loan. Loans that have been modified to accommodate a borrower who is experiencing financial difficulties, and for which we have granted a concession that we would not otherwise consider, are considered troubled debt restructurings (“TDRs”). For further discussion of our policies and processes regarding TDRs, see Note 6 of our 2020 Form 10-K.

Information on TDRs, including the amortized cost on an accruing and nonaccruing basis by loan class and modification type is summarized in the following schedules:


	September 30, 2021
	Amortized cost resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total
Accruing
Commercial:
Commercial and industrial	$	2	$	—	$	—	$	—	$	—	$	15	$	17
Owner-occupied	5		4		—		8		15		46		78

Total commercial	7		4		—		8		15		61		95
Commercial real estate:
Construction and land development	—		—		—		—		—		—		—
Term	1		26		—		27		41		8		103
Total commercial real estate	1		26		—		27		41		8		103
Consumer:
Home equity credit line	—		1		6		—		—		2		9
1-4 family residential	5		1		3		—		1		14		24


Total consumer loans	5		2		9		—		1		16		33
Total accruing	13		32		9		35		57		85		231
Nonaccruing
Commercial:
Commercial and industrial	17		1		—		2		7		42		69
Owner-occupied	5		—		—		3		—		17		25

Total commercial	22		1		—		5		7		59		94
Commercial real estate:

Term	2		—		—		12		4		3		21
Total commercial real estate	2		—		—		12		4		3		21
Consumer:
Home equity credit line	—		—		1		—		—		—		1
1-4 family residential	—		1		1		—		—		3		5


Total consumer loans	—		1		2		—		—		3		6
Total nonaccruing	24		2		2		17		11		65		121
Total	$	37	$	34	$	11	$	52	$	68	$	150	$	352

1 Includes TDRs that resulted from other modification types including, but not limited to, a legal judgment awarded on different terms, a bankruptcy plan confirmed on different terms, a settlement that includes the delivery of collateral in exchange for debt reduction, etc.

2 Includes TDRs that resulted from a combination of any of the previous modification types.


	December 31, 2020
	Amortized cost resulting from the following modification types:
(In millions)	Interest rate below market		Maturity or term extension		Principal forgiveness		Payment deferral		Other 1		Multiple modification types 2		Total
Accruing
Commercial:
Commercial and industrial	$	—	$	—	$	—	$	—	$	3	$	4	$	7
Owner-occupied	5		1		—		4		4		8		22
Total commercial	5		1		—		4		7		12		29
Commercial real estate:

Term	1		—		—		16		94		23		134
Total commercial real estate	1		—		—		16		94		23		134
Consumer:
Home equity credit line	—		1		7		—		—		2		10
1-4 family residential	4		1		3		—		2		15		25


Total consumer loans	4		2		10		—		2		17		35
Total accruing	10		3		10		20		103		52		198
Nonaccruing
Commercial:
Commercial and industrial	—		—		—		3		10		52		65
Owner-occupied	5		—		—		3		—		10		18

Total commercial	5		—		—		6		10		62		83
Commercial real estate:

Term	2		—		—		13		3		2		20
Total commercial real estate	2		—		—		13		3		2		20
Consumer:
Home equity credit line	—		—		2		—		—		—		2
1-4 family residential	1		1		—		—		—		6		8


Total consumer loans	1		1		2		—		—		6		10
Total nonaccruing	8		1		2		19		13		70		113
Total	$	18	$	4	$	12	$	39	$	116	$	122	$	311

2 Includes TDRs that resulted from a combination of any of the previous modification types.

Unfunded lending commitments on TDRs totaled $15 million and $3 million at September 30, 2021 and December 31, 2020, respectively.

The total amortized cost of all TDRs in which interest rates were modified below market was $91 million at September 30, 2021 and $76 million at December 31, 2020. These loans are included in the previous schedule in the columns for interest rate below market and multiple modification types.

The net financial impact on interest income due to interest rate modifications below market for accruing TDRs for the three and nine months ended September 30, 2021 and 2020 was not significant.

On an ongoing basis, we monitor the performance of all TDRs according to their restructured terms. Subsequent payment default is defined in terms of delinquency, when principal or interest payments are past due 90 days or more for commercial loans, or 60 days or more for consumer loans.

The amortized cost of accruing and nonaccruing TDRs that had a payment default during the three and nine months ended September 30, 2021, which were still in default at period end, and were within 12 months or less of being modified as TDRs was approximately $2 million and $5 million, respectively, and $3 million and $6 million for the three and nine months ended September 30, 2020, respectively.

Collateral-Dependent Loans

As discussed previously, when a loan is individually evaluated for expected credit losses, we estimate a specific reserve for the loan based on the projected present value of the loan’s future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or the fair value of the loan’s underlying collateral.

Select information on loans for which the repayment is expected to be provided substantially through the operation or sale of the underlying collateral and the borrower is experiencing financial difficulties, including the type of collateral and the extent to which the collateral secures the loans, is summarized as follows:


	September 30, 2021
(Dollar amounts in millions)	Amortized cost		Major types of collateral	Weighted average LTV 1
Commercial:
Commercial and industrial	$	13	Single family residential, Agriculture	36%

Owner-occupied	10		Office building	43%


Commercial real estate:

Term	7		Multi-family, Hotel/Motel, Retail	41%

Consumer:
Home equity credit line	5		Single family residential	37%
1-4 family residential	2		Single family residential	51%

Total	$	37

1 The fair value is based on the most recent appraisal or other collateral evaluation.


	December 31, 2020
(Dollar amounts in millions)	Amortized cost		Major types of collateral	Weighted average LTV 1
Commercial:
Commercial and industrial	$	20	Single family residential, Agriculture	55%

Owner-occupied	10		Office Building	47%


Commercial real estate:

Term	12		Multi-family, Hotel/Motel, Retail	58%

Consumer:
Home equity credit line	3		Single family residential	34%
1-4 family residential	2		Single family residential	60%




Total	$	47

1 The fair value is based on the most recent appraisal or other collateral evaluation.

Foreclosed Residential Real Estate

At September 30, 2021 and December 31, 2020, we did not have any foreclosed residential real estate property. The amortized cost basis of consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure was $9 million and $10 million for the same periods, respectively.