Recent Accounting Pronouncements and Developments (Policies)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Recent Accounting Pronouncements and Developments

There have been no significant changes to recent accounting pronouncements and developments and their potential impact to our financial statements or operations. For more information, see Note 2 of our 2020 Form 10-K.

Allowance for Credit Losses

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: