Loans and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2024

The composition of the loan portfolio, by class and underlying specific portfolio type, was as follows:


	June 30, 2024				December 31, 2023
(Dollars in Millions)	Amount		Percent of Total		Amount		Percent of Total
Commercial
Commercial	$	131,043	34.9	%	$	127,676	34.2	%
Lease financing	4,205		1.1		4,205		1.1
Total commercial	135,248		36.0		131,881		35.3
Commercial Real Estate
Commercial mortgages	40,844		10.9		41,934		11.2
Construction and development	11,043		2.9		11,521		3.1
Total commercial real estate	51,887		13.8		53,455		14.3
Residential Mortgages
Residential mortgages	110,680		29.4		108,605		29.0
Home equity loans, first liens	6,467		1.7		6,925		1.9
Total residential mortgages	117,147		31.1		115,530		30.9
Credit Card	28,715		7.6		28,560		7.6
Other Retail
Retail leasing	4,178		1.1		4,135		1.1
Home equity and second mortgages	13,180		3.5		13,056		3.5
Revolving credit	3,597		1.0		3,668		1.0
Installment	14,169		3.8		13,889		3.7
Automobile	8,012		2.1		9,661		2.6
Total other retail	43,136		11.5		44,409		11.9
Total loans	$	376,133	100.0	%	$	373,835	100.0	%

Activity in Allowance for Credit Losses by Portfolio Class

Activity in the allowance for credit losses by portfolio class was as follows:


Three Months Ended June 30 (Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
2024
Balance at beginning of period	$	2,159	$	1,629	$	843	$	2,425	$	848	$	7,904
Add


Provision for credit losses	164		3		(11)		388		24		568
Deduct
Loans charged-off	180		38		3		358		73		652
Less recoveries of loans charged-off	(37)		(2)		(7)		(43)		(25)		(114)
Net loan charge-offs (recoveries)	143		36		(4)		315		48		538
Balance at end of period	$	2,180	$	1,596	$	836	$	2,498	$	824	$	7,934
2023
Balance at beginning of period	$	2,180	$	1,359	$	947	$	2,112	$	925	$	7,523
Add


Provision for credit losses	119		140		66		272		224		821
Deduct
Loans charged-off	110		31		121		242		251		755
Less recoveries of loans charged-off	(20)		(5)		(7)		(43)		(31)		(106)
Net loan charge-offs (recoveries)	90		26		114		199		220		649
Balance at end of period	$	2,209	$	1,473	$	899	$	2,185	$	929	$	7,695
Six Months Ended June 30 (Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
2024
Balance at beginning of period	$	2,119	$	1,620	$	827	$	2,403	$	870	$	7,839
Add


Provision for credit losses	320		33		5		706		57		1,121
Deduct
Loans charged-off	319		72		7		695		154		1,247
Less recoveries of loans charged-off	(60)		(15)		(11)		(84)		(51)		(221)
Net loan charge-offs (recoveries)	259		57		(4)		611		103		1,026
Balance at end of period	$	2,180	$	1,596	$	836	$	2,498	$	824	$	7,934
2023
Balance at beginning of period	$	2,163	$	1,325	$	926	$	2,020	$	970	$	7,404
Add
Change in accounting principle(a)	—		—		(31)		(27)		(4)		(62)
Allowance for acquired credit losses(b)	—		127		—		—		—		127
Provision for credit losses	183		164		117		566		218		1,248
Deduct
Loans charged-off	173		154		125		457		315		1,224
Less recoveries of loans charged-off	(36)		(11)		(12)		(83)		(60)		(202)
Net loan charge-offs (recoveries)	137		143		113		374		255		1,022
Balance at end of period	$	2,209	$	1,473	$	899	$	2,185	$	929	$	7,695

(a)Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings.

(b)Represents allowance for acquired credit deteriorated and charged-off loans.

Credit Quality Indicators

The following table provides a summary of loans charged-off by portfolio class and year of origination:


Three Months Ended June 30 (Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages(b)		Credit Card(c)		Other Retail(d)		Total Loans
2024
Originated in 2024	$	3	$	36	$	—	$	—	$	—	$	39
Originated in 2023	26		2		—		—		11		39
Originated in 2022	66		—		1		—		14		81
Originated in 2021	7		—		—		—		10		17
Originated in 2020	2		—		—		—		5		7
Originated prior to 2020	11		—		2		—		8		21
Revolving	65		—		—		358		25		448

Total charge-offs	$	180	$	38	$	3	$	358	$	73	$	652

2023
Originated in 2023	$	7	$	—	$	—	$	—	$	46	$	53
Originated in 2022	34		—		—		—		89		123
Originated in 2021	4		17		5		—		46		72
Originated in 2020	6		—		8		—		19		33
Originated in 2019	2		—		15		—		13		30
Originated prior to 2019	17		14		93		—		5		129
Revolving	40		—		—		242		5		287
Revolving converted to term	—		—		—		—		28		28
Total charge-offs	$	110	$	31	$	121	$	242	$	251	$	755
Six Months Ended June 30 (Dollars in Millions)	Commercial		Commercial Real Estate(a)		Residential Mortgages(b)		Credit Card(c)		Other Retail(d)		Total Loans
2024
Originated in 2024	$	3	$	41	$	—	$	—	$	2	$	46
Originated in 2023	52		6		—		—		21		79
Originated in 2022	84		24		1		—		28		137
Originated in 2021	15		—		—		—		21		36
Originated in 2020	6		—		—		—		13		19
Originated prior to 2020	21		1		6		—		19		47
Revolving	138		—		—		695		50		883

Total charge-offs	$	319	$	72	$	7	$	695	$	154	$	1,247

2023
Originated in 2023	$	7	$	—	$	—	$	—	$	46	$	53
Originated in 2022	40		88		—		—		99		227
Originated in 2021	8		17		5		—		57		87
Originated in 2020	10		—		8		—		25		43
Originated in 2019	7		3		16		—		20		46
Originated prior to 2019	28		46		96		—		13		183
Revolving	73		—		—		457		27		557
Revolving converted to term	—		—		—		—		28		28
Total charge-offs	$	173	$	154	$	125	$	457	$	315	$	1,224

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominantly all current year and near term loan origination years for gross charge-offs relate to existing loans that have had recent maturity date, pricing or commitment amount amendments.

(a)Includes $91 million of charge-offs in the first quarter of 2023 related to uncollectible amounts on acquired loans.

(b)Includes $117 million of charge-offs related to balance sheet repositioning and capital management actions taken in the second quarter of 2023.

(c)Predominantly all credit card loans are considered revolving loans. Includes an immaterial amount of charge-offs related to revolving converted to term loans.

(d)Includes $192 million of charge-offs related to balance sheet repositioning and capital management actions taken in the second quarter of 2023.

The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating:


	June 30, 2024										December 31, 2023
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified(a)		Total Criticized		Total		Pass		Special Mention		Classified(a)		Total Criticized		Total
Commercial
Originated in 2024	$	27,054	$	272	$	496	$	768	$	27,822	$	—	$	—	$	—	$	—	$	—
Originated in 2023	30,508		349		894		1,243		31,751		43,023		827		856		1,683		44,706
Originated in 2022	29,451		274		970		1,244		30,695		40,076		274		632		906		40,982
Originated in 2021	6,738		143		116		259		6,997		9,219		117		154		271		9,490
Originated in 2020	2,843		61		102		163		3,006		3,169		92		71		163		3,332
Originated prior to 2020	4,948		9		98		107		5,055		5,303		30		209		239		5,542
Revolving(b)	28,585		279		1,058		1,337		29,922		26,213		362		1,254		1,616		27,829
Total commercial	130,127		1,387		3,734		5,121		135,248		127,003		1,702		3,176		4,878		131,881
Commercial real estate
Originated in 2024	4,385		194		912		1,106		5,491		—		—		—		—		—
Originated in 2023	6,788		160		1,566		1,726		8,514		8,848		465		2,206		2,671		11,519
Originated in 2022	10,515		736		1,303		2,039		12,554		11,831		382		1,141		1,523		13,354
Originated in 2021	7,919		377		626		1,003		8,922		9,235		500		385		885		10,120
Originated in 2020	3,218		44		144		188		3,406		3,797		51		87		138		3,935
Originated prior to 2020	9,550		93		923		1,016		10,566		10,759		458		619		1,077		11,836
Revolving	2,365		11		58		69		2,434		2,613		6		70		76		2,689
Revolving converted to term	—		—		—		—		—		2		—		—		—		2
Total commercial real estate	44,740		1,615		5,532		7,147		51,887		47,085		1,862		4,508		6,370		53,455
Residential mortgages(c)
Originated in 2024	5,067		—		1		1		5,068		—		—		—		—		—
Originated in 2023	9,343		—		9		9		9,352		9,734		—		5		5		9,739
Originated in 2022	28,891		—		24		24		28,915		29,146		—		17		17		29,163
Originated in 2021	35,541		—		25		25		35,566		36,365		—		16		16		36,381
Originated in 2020	14,245		—		12		12		14,257		14,773		—		9		9		14,782
Originated prior to 2020	23,731		—		258		258		23,989		25,202		—		262		262		25,464
Revolving	—		—		—		—		—		1		—		—		—		1
Total residential mortgages	116,818		—		329		329		117,147		115,221		—		309		309		115,530
Credit card(d)	28,341		—		374		374		28,715		28,185		—		375		375		28,560
Other retail
Originated in 2024	4,046		—		2		2		4,048		—		—		—		—		—
Originated in 2023	4,554		—		6		6		4,560		5,184		—		4		4		5,188
Originated in 2022	4,830		—		11		11		4,841		5,607		—		12		12		5,619
Originated in 2021	8,396		—		14		14		8,410		10,398		—		15		15		10,413
Originated in 2020	3,434		—		7		7		3,441		4,541		—		9		9		4,550
Originated prior to 2020	3,339		2		16		18		3,357		4,008		—		20		20		4,028
Revolving	13,600		—		107		107		13,707		13,720		—		104		104		13,824
Revolving converted to term	725		—		47		47		772		735		—		52		52		787
Total other retail	42,924		2		210		212		43,136		44,193		—		216		216		44,409
Total loans	$	362,950	$	3,004	$	10,179	$	13,183	$	376,133	$	361,687	$	3,564	$	8,584	$	12,148	$	373,835
Total outstanding commitments	$	764,699	$	4,690	$	12,170	$	16,860	$	781,559	$	762,869	$	5,053	$	10,470	$	15,523	$	778,392

Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominately all current year and near term loan origination years for criticized loans relate to existing loans that have had recent maturity date, pricing or commitment amount amendments.

(a)Classified rating on consumer loans primarily based on delinquency status.

(b)Includes an immaterial amount of revolving converted to term loans.

(c)At June 30, 2024, $1.7 billion of GNMA loans 90 days or more past due and $1.5 billion of modified GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.0 billion and $1.2 billion at December 31, 2023, respectively.

(d)Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term loans.

Loans by Portfolio Class, Including Delinquency Status

The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming:


	Accruing
(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Nonperforming(b)		Total
June 30, 2024
Commercial	$	134,317	$	288	$	87	$	556	$	135,248
Commercial real estate	50,897		22		9		959		51,887
Residential mortgages(a)	116,681		142		170		154		117,147
Credit card	27,957		384		374		—		28,715
Other retail	42,700		234		61		141		43,136
Total loans	$	372,552	$	1,070	$	701	$	1,810	$	376,133
December 31, 2023
Commercial	$	130,925	$	464	$	116	$	376	$	131,881
Commercial real estate	52,619		55		4		777		53,455
Residential mortgages(a)	115,067		169		136		158		115,530
Credit card	27,779		406		375		—		28,560
Other retail	43,926		278		67		138		44,409
Total loans	$	370,316	$	1,372	$	698	$	1,449	$	373,835

(a)At June 30, 2024, $561 million of loans 30–89 days past due and $1.7 billion of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $595 million and $2.0 billion at December 31, 2023, respectively.

(b)Substantially all nonperforming loans at June 30, 2024 and December 31, 2023, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $6 million and $3 million for the three months ended June 30, 2024 and 2023, respectively, and $11 million and $7 million for the six months ended June 30, 2024 and 2023, respectively .

Loans Modified

The following table provides a summary of period-end balances of loans modified during the periods presented, by portfolio class and modification granted:


Three Months Ended June 30 (Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)		Total Modifications		Percent of Class Total
2024
Commercial	$	23	$	—	$	253	$	—	$	276	.2	%
Commercial real estate	78		—		391		7		476		.9
Residential mortgages(b)	—		9		7		6		22		—
Credit card	116		—		—		—		116		.4
Other retail	2		—		33		1		36		.1
Total loans, excluding loans purchased from GNMA mortgage pools	219		9		684		14		926		.2
Loans purchased from GNMA mortgage pools(b)	—		474		109		122		705		.6
Total loans	$	219	$	483	$	793	$	136	$	1,631	.4	%
2023
Commercial	$	13	$	—	$	136	$	—	$	149	.1	%
Commercial real estate	—		—		101		—		101		.2
Residential mortgages(b)	—		79		6		4		89		.1
Credit card	91		—		—		—		91		.3
Other retail	2		14		39		1		56		.1
Total loans, excluding loans purchased from GNMA mortgage pools	106		93		282		5		486		.1
Loans purchased from GNMA mortgage pools(b)	—		453		86		98		637		.6
Total loans	$	106	$	546	$	368	$	103	$	1,123	.3	%
Six Months Ended June 30 (Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)		Total Modifications		Percent of Class Total
2024
Commercial	$	44	$	—	$	452	$	—	$	496	.4	%
Commercial real estate	78		—		629		7		714		1.4
Residential mortgages(b)	—		28		12		9		49		—
Credit card	228		—		—		—		228		.8
Other retail	4		1		69		1		75		.2
Total loans, excluding loans purchased from GNMA mortgage pools	354		29		1,162		17		1,562		.4
Loans purchased from GNMA mortgage pools(b)	1		908		173		204		1,286		1.1
Total loans	$	355	$	937	$	1,335	$	221	$	2,848	.8	%
2023
Commercial	$	159	$	—	$	159	$	—	$	318	.2	%
Commercial real estate	—		—		109		—		109		.2
Residential mortgages(b)	—		202		15		16		233		.2
Credit card	174		—		—		—		174		.7
Other retail	4		18		81		3		106		.2
Total loans, excluding loans purchased from GNMA mortgage pools	337		220		364		19		940		.2
Loans purchased from GNMA mortgage pools(b)	—		649		147		143		939		.8
Total loans	$	337	$	869	$	511	$	162	$	1,879	.5	%

(a)Includes $111 million of total loans receiving a payment delay and term extension, $17 million of total loans receiving an interest rate reduction and term extension and $8 million of total loans receiving an interest rate reduction, payment delay and term extension for the three months ended June 30, 2024, compared with $100 million, $2 million and $1 million for the three months ended June 30, 2023, respectively. Includes $189 million of total loans receiving a payment delay and term extension, $20 million of total loans receiving an interest rate reduction and term extension and $12 million of total loans receiving an interest rate reduction, payment delay and term extension for the six months ended June 30, 2024, compared with $151 million, $5 million and $6 million for the six months ended June 30, 2023, respectively.

(b)Percent of class total amounts expressed as a percent of total residential mortgage loan balances.

The following table summarizes the effects of loan modifications made to borrowers on loans modified:


Three Months Ended June 30	Weighted-Average Interest Rate Reduction		Weighted-Average Months of Term Extension
2024
Commercial(a)	20.6	%	5
Commercial real estate	2.2		8
Residential mortgages	.5		86
Credit card	16.3		—
Other retail	7.6		5
Loans purchased from GNMA mortgage pools	.5		119
2023
Commercial	21.3	%	8
Commercial real estate	—		10
Residential mortgages	1.4		89
Credit card	16.4		—
Other retail	8.6		108
Loans purchased from GNMA mortgage pools	.7		87
Six Months Ended June 30	Weighted-Average Interest Rate Reduction		Weighted-Average Months of Term Extension
2024
Commercial(a)	20.0	%	7
Commercial real estate	2.2		9
Residential mortgages	.7		85
Credit card	16.3		—
Other retail	8.4		4
Loans purchased from GNMA mortgage pools	.5		116
2023
Commercial	3.3	%	7
Commercial real estate	—		10
Residential mortgages	1.4		111
Credit card	16.2		—
Other retail	7.3		134
Loans purchased from GNMA mortgage pools	.7		79

Note: The weighted-average payment deferral for all portfolio classes was less than $1 million for the three and six months ended June 30, 2024 and 2023. Forbearance payments are required to be paid at the end of the original term loan.

(a)The weighted-average interest rate reduction for commercial loans for the three and six months ended June 30, 2024, was primarily driven by commercial cards.

Loans Modified by Delinquency Status

The following table provides a summary of loan balances at June 30, 2024, which were modified during the prior twelve months, by portfolio class and delinquency status:


(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Total
Commercial	$	628	$	17	$	117	$	762
Commercial real estate	847		—		419		1,266
Residential mortgages(a)	1,585		6		13		1,604
Credit card	293		64		34		391
Other retail	122		17		6		145
Total loans	$	3,475	$	104	$	589	$	4,168

(a)At June 30, 2024, $462 million of loans 30-89 days past due and $196 million of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current.

The following table provides a summary of loan balances at June 30, 2023, which were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings, through June 30, 2023, by portfolio class and delinquency status:


(Dollars in Millions)	Current		30-89 Days Past Due		90 Days or More Past Due		Total
Commercial	$	287	$	7	$	24	$	318
Commercial real estate	43		—		66		109
Residential mortgages(a)	668		11		13		692
Credit card	125		34		15		174
Other retail	68		3		4		75
Total loans	$	1,191	$	55	$	122	$	1,368

(a)At June 30, 2023, $95 million of loans 30-89 days past due and $20 million of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current.

Loans Modified During the year that Defaulted

The following table provides a summary of loans that defaulted (fully or partially charged-off or became 90 days or more past due) that were modified within twelve months prior to default:


(Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)
Three Months Ended June 30, 2024
Commercial	$	7	$	—	$	—	$	—
Commercial real estate	—		—		24		—
Residential mortgages	—		9		1		1
Credit card	30		—		—		—
Other retail	1		—		5		—
Total loans, excluding loans purchased from GNMA mortgage pools	38		9		30		1
Loans purchased from GNMA mortgage pools	—		58		24		29
Total loans	$	38	$	67	$	54	$	30
Six Months Ended June 30, 2024
Commercial	$	13	$	—	$	—	$	—
Commercial real estate	—		—		24		—
Residential mortgages	—		13		4		3
Credit card	59		—		—		—
Other retail	1		1		10		—
Total loans, excluding loans purchased from GNMA mortgage pools	73		14		38		3
Loans purchased from GNMA mortgage pools	—		96		43		57
Total loans	$	73	$	110	$	81	$	60

(a)Includes $29 million of total loans receiving a payment delay and term extension and $1 million of total loans receiving an interest rate reduction and term extension for the three months ended June 30, 2024. Includes $58 million of total loans receiving a payment delay and term extension, $1 million of total loans receiving an interest rate reduction and term extension and $1 million of total loans receiving an interest rate reduction, payment delay and term extension for the six months ended June 30, 2024.

The following table provides a summary of loans that defaulted (fully or partially charged-off or became 90 days or more past due) that were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings, through June 30, 2023:


(Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)
Three Months Ended June 30, 2023
Commercial	$	1	$	—	$	—	$	—
Residential mortgages	—		1		—		1
Credit card	5		—		—		—
Other retail	—		2		1		—
Total loans, excluding loans purchased from GNMA mortgage pools	6		3		1		1
Loans purchased from GNMA mortgage pools	—		6		1		2
Total loans	$	6	$	9	$	2	$	3
Six Months Ended June 30, 2023
Commercial	$	1	$	—	$	—	$	—
Residential mortgages	—		1		—		1
Credit card	5		—		—		—
Other retail	—		2		1		—
Total loans, excluding loans purchased from GNMA mortgage pools	6		3		1		1
Loans purchased from GNMA mortgage pools	—		6		1		2
Total loans	$	6	$	9	$	2	$	3

(a) Includes $2 million of total loans receiving a payment delay and term extension and $1 million of total loans receiving an interest rate reduction, payment delay and term extension for the three and six months ended June 30, 2023.