Loans and asset quality (Tables)

3 Months Ended

Mar. 31, 2020

Schedule of Loan Portfolio and Industry Concentrations of Credit Risk

The table below provides the details of our loan portfolio and industry concentrations of credit risk at March 31, 2020 and Dec. 31, 2019.



Loans	March 31, 2020		Dec. 31, 2019
(in millions)
Domestic:
Commercial	$	3,010	$	1,442
Commercial real estate	6,429		5,575
Financial institutions	6,231		4,852
Lease financings	472		537
Wealth management loans and mortgages	16,128		16,050
Other residential mortgages	472		494
Overdrafts	1,851		524
Other	1,168		1,167
Margin loans	11,733		11,907
Total domestic	47,494		42,548
Foreign:
Commercial	425		347
Commercial real estate	22		7
Financial institutions	7,985		7,626
Lease financings	582		576
Wealth management loans and mortgages	131		140
Other (primarily overdrafts)	4,347		2,230
Margin loans	1,382		1,479
Total foreign	14,874		12,405
Total loans (a)	$	62,368	$	54,953

(a)

Net of unearned income of $301 million at March 31, 2020 and $313 million at Dec. 31, 2019 primarily related to domestic and foreign lease financings.

Summary of Transactions in the Allowance for Credit Losses

Activity in the allowance for credit losses on loans and lending-related commitments is presented below.



Allowance for credit losses activity for the quarter ended March 31, 2020											Wealth management loans and mortgages				Other residential mortgages
(in millions)	Commercial			Commercial real estate		Financial institutions			Lease financings		Wealth management loans and mortgages				Other residential mortgages			Foreign			(a)	Total
Balance at Dec. 31, 2019	$	60		$	76	$	20		$	3	$	20			$	13		$	24			$	216
Impact of adopting ASU 2016-13	(43		)	14		(6		)	—		(12		)		2			(24		)		(69		)
Balance at Jan. 1, 2020	17			90		14			3		8				15			—				147
Charge-offs	—			—		—			—		—				—			—				—
Recoveries	—			—		—			—		—				—			—				—
Net (charge-offs) recoveries	—			—		—			—		—				—			—				—
Provision	9			118		4			10		1				(1		)	—				141
Ending balance (b)	$	26		$	208	$	18		$	13	$	9			$	14		$	—			$	288
Allowance for:
Loan losses	$	13		$	83	$	10		$	13	$	7			$	14		$	—			$	140
Lending-related commitments	13			125		8			—		2				—			—				148
Individually evaluated for impairment:
Loan balance	$	—		$	—	$	—		$	—	$	18		(c)	$	—		$	—			$	18
Allowance for loan losses	—			—		—			—		—				—			—				—


(a)	The allowance related to the foreign exposure has been reclassified to financial institutions ($10 million), commercial ($10 million) and lease financings ($4 million).


(b)	Includes $12 million of allowance for credit losses related to foreign loans, primarily financial institutions.


(c)	Includes collateral dependent loans of $18 million with $26 million of collateral at fair value.



Allowance for credit losses activity for the quarter ended Dec. 31, 2019												Wealth management loans and mortgages		Other residential mortgages
(in millions)	Commercial			Commercial real estate			Financial institutions			Lease financings		Wealth management loans and mortgages		Other residential mortgages			All other			Foreign			Total
Beginning balance	$	61		$	77		$	21		$	3	$	20	$	14		$	—		$	28		$	224
Charge-offs	—			—			—			—		—		(1		)	—			—			(1		)
Recoveries	—			—			—			—		—		1			—			—			1
Net (charge-offs) recoveries	—			—			—			—		—		—			—			—			—
Provision	(1		)	(1		)	(1		)	—		—		(1		)	—			(4		)	(8		)
Ending balance	$	60		$	76		$	20		$	3	$	20	$	13		$	—		$	24		$	216
Allowance for:
Loan losses	$	11		$	57		$	5		$	3	$	18	$	13		$	—		$	15		$	122
Lending-related commitments	49			19			15			—		2		—			—			9			94
Individually evaluated for impairment:
Loan balance	$	—		$	—		$	—		$	—	$	15	$	—		$	—		$	—		$	15
Allowance for loan losses	—			—			—			—		—		—			—			—			—
Collectively evaluated for impairment:
Loan balance	$	1,442		$	5,575		$	4,852		$	537	$	16,035	$	494		$	13,598	(a)	$	12,405		$	54,938
Allowance for loan losses	11			57			5			3		18		13			—			15			122


(a)	Includes $524 million of domestic overdrafts, $11,907 million of margin loans and $1,167 million of other loans at Dec. 31, 2019.



Allowance for credit losses activity for the quarter ended March 31, 2019												Wealth management loans and mortgages		Other residential mortgages			All other			Foreign			Total
(in millions)	Commercial			Commercial real estate			Financial institutions		Lease financings			Wealth management loans and mortgages		Other residential mortgages			All other			Foreign			Total
Beginning balance	$	81		$	75		$	22	$	5		$	21	$	16		$	—		$	32		$	252
Charge-offs	(11		)	—			—		—			—		—			—			—			(11		)
Recoveries	—			—			—		—			—		—			—			—			—
Net recoveries	(11		)	—			—		—			—		—			—			—			(11		)
Provision	12			(1		)	1		(1		)	—		(1		)	—			(3		)	7
Ending balance	$	82		$	74		$	23	$	4		$	21	$	15		$	—		$	29		$	248
Allowance for:
Loan losses	$	24		$	56		$	10	$	4		$	18	$	15		$	—		$	19		$	146
Lending-related commitments	58			18			13		—			3		—			—			10			102
Individually evaluated for impairment:
Loan balance	$	96		$	—		$	—	$	—		$	4	$	—		$	—		$	—		$	100
Allowance for loan losses	10			—			—		—			—		—			—			—			10
Collectively evaluated for impairment:
Loan balance	$	1,626		$	4,921		$	4,652	$	653		$	15,724	$	574		$	13,913	(a)	$	11,324		$	53,387
Allowance for loan losses	14			56			10		4			18		15			—			19			136

(a)

Includes $654 million of domestic overdrafts, $12,107 million of margin loans and $1,152 million of other loans at March 31, 2019.

Distribution of Nonperforming Assets

The table below presents our nonperforming assets.



Nonperforming assets	March 31, 2020						Dec. 31, 2019
	Recorded investment
	With an allowance		Without an allowance
(in millions)					Total
Nonperforming loans:
Other residential mortgages	$	60	$	—	$	60	$	62
Wealth management loans and mortgages	9		18		27		24
Total nonperforming loans	69		18		87		86
Other assets owned	1		—		1		3
Total nonperforming assets	$	70	$	18	$	88	$	89

Information about Past Due Loans

The table below presents our past due loans.



Past due loans and still accruing interest	March 31, 2020								Dec. 31, 2019
	Days past due						Total past due		Days past due						Total past due
(in millions)	30-59		60-89		≥90		Total past due		30-59		60-89		≥90		Total past due
Financial institutions	$	—	$	—	$	—	$	—	$	1	$	30	$	—	$	31
Wealth management loans and mortgages	77		1		—		78		22		5		—		27
Commercial real estate	—		—		—		—		6		12		—		18
Other residential mortgages	9		1		—		10		8		3		—		11
Total past due loans	$	86	$	2	$	—	$	88	$	37	$	50	$	—	$	87

Credit Profile of Loan Portfolio by Origination

The table below provides information about the credit profile of the loan portfolio by the period of origination.



Credit profile of the loan portfolio													March 31, 2020
													Revolving loans
	Originated, at amortized cost												Amortized cost		Converted to term loans - Amortized cost				Accrued interest receivable
(in millions)	1Q20		2019		2018		2017		2016		Prior to 2016						Total (a)
Commercial:
Investment grade	$	20	$	286	$	107	$	600	$	57	$	—	$	1,994	$	—	$	3,064
Non-investment grade	41		72		12		—		6		—		240		—		371
Total commercial	61		358		119		600		63		—		2,234		—		3,435		$	4
Commercial real estate:
Investment grade	414		1,412		1,047		624		636		640		586		—		$	5,359
Non-investment grade	15		136		213		106		313		48		232		29		1,092
Total commercial real estate	429		1,548		1,260		730		949		688		818		29		6,451		11
Financial institutions:
Investment grade	49		270		133		125		14		189		11,429		—		$	12,209
Non-investment grade	15		8		—		—		—		—		1,984		—		2,007
Total financial institutions	64		278		133		125		14		189		13,413		—		14,216		26
Wealth management loans and mortgages:
Investment grade	3		83		12		178		58		94		7,049		—		$	7,477
Non-investment grade	—		—		—		—		—		—		132		—		132
Wealth management mortgages	208		1,139		752		1,438		1,833		3,239		41		—		8,650
Total wealth management loans and mortgages	211		1,222		764		1,616		1,891		3,333		7,222		—		16,259		38
Lease financings	—		21		23		72		34		904		—		—		1,054		—
Other residential mortgages	—		—		—		—		—		472		—		—		472		2
Other loans	5		—		—		—		—		—		1,214		—		1,219		1
Margin loans	2,260		1,300		—		—		—		—		9,555		—		13,115		12
Total loans	$	3,030	$	4,727	$	2,299	$	3,143	$	2,951	$	5,586	$	34,456	$	29	$	56,221	$	94

(a)

Excludes overdrafts of $6,147 million. Overdrafts occur on a daily basis primarily in the custody and securities clearance business and are generally repaid within two business days.