Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2024

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


	September 30, 2024				December 31, 2023
(Dollars in Millions)	Amount		Percent of Total		Amount		Percent of Total
Commercial
Commercial	$	129,434	34.6	%	$	127,676	34.2	%
Lease financing	4,204		1.1		4,205		1.1
Total commercial	133,638		35.7		131,881		35.3
Commercial Real Estate
Commercial mortgages	39,602		10.6		41,934		11.2
Construction and development	11,017		2.9		11,521		3.1
Total commercial real estate	50,619		13.5		53,455		14.3
Residential Mortgages
Residential mortgages	111,790		29.9		108,605		29.0
Home equity loans, first liens	6,244		1.6		6,925		1.9
Total residential mortgages	118,034		31.5		115,530		30.9
Credit Card	29,037		7.8		28,560		7.6
Other Retail
Retail leasing	4,038		1.1		4,135		1.1
Home equity and second mortgages	13,364		3.6		13,056		3.5
Revolving credit	3,644		1.0		3,668		1.0
Installment	14,482		3.9		13,889		3.7
Automobile	7,308		1.9		9,661		2.6
Total other retail	42,836		11.5		44,409		11.9
Total loans	$	374,164	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 September 30 (Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans
2024
Balance at beginning of period	$	2,180	$	1,596	$	836	$	2,498	$	824	$	7,934
Add


Provision for credit losses	155		49		(36)		349		40		557
Deduct
Loans charged-off	165		80		3		347		74		669
Less recoveries of loans charged-off	(18)		(10)		(6)		(48)		(23)		(105)
Net loan charge-offs (recoveries)	147		70		(3)		299		51		564
Balance at end of period	$	2,188	$	1,575	$	803	$	2,548	$	813	$	7,927
2023
Balance at beginning of period	$	2,209	$	1,473	$	899	$	2,185	$	929	$	7,695
Add


Provision for credit losses	(14)		266		(49)		285		27		515
Deduct
Loans charged-off	110		51		1		259		87		508
Less recoveries of loans charged-off	(18)		(2)		(4)		(39)		(25)		(88)
Net loan charge-offs (recoveries)	92		49		(3)		220		62		420
Balance at end of period	$	2,103	$	1,690	$	853	$	2,250	$	894	$	7,790
Nine Months Ended September 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	475		82		(31)		1,055		97		1,678
Deduct
Loans charged-off	484		152		10		1,042		228		1,916
Less recoveries of loans charged-off	(78)		(25)		(17)		(132)		(74)		(326)
Net loan charge-offs (recoveries)	406		127		(7)		910		154		1,590
Balance at end of period	$	2,188	$	1,575	$	803	$	2,548	$	813	$	7,927
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	169		430		68		851		245		1,763
Deduct
Loans charged-off	283		205		126		716		402		1,732
Less recoveries of loans charged-off	(54)		(13)		(16)		(122)		(85)		(290)
Net loan charge-offs (recoveries)	229		192		110		594		317		1,442
Balance at end of period	$	2,103	$	1,690	$	853	$	2,250	$	894	$	7,790

(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 September 30 (Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card(c)		Other Retail		Total Loans
2024
Originated in 2024	$	10	$	39	$	—	$	—	$	4	$	53
Originated in 2023	16		15		—		—		13		44
Originated in 2022	48		23		1		—		11		83
Originated in 2021	8		—		—		—		9		17
Originated in 2020	3		1		—		—		4		8
Originated prior to 2020	10		2		2		—		6		20
Revolving	70		—		—		347		27		444

Total charge-offs	$	165	$	80	$	3	$	347	$	74	$	669

2023
Originated in 2023	$	22	$	20	$	—	$	—	$	5	$	47
Originated in 2022	11		—		—		—		17		28
Originated in 2021	17		27		—		—		13		57
Originated in 2020	4		—		—		—		6		10
Originated in 2019	4		—		—		—		6		10
Originated prior to 2019	10		4		1		—		13		28
Revolving	42		—		—		259		27		328

Total charge-offs	$	110	$	51	$	1	$	259	$	87	$	508
Nine Months Ended September 30 (Dollars in Millions)	Commercial		Commercial Real Estate(a)		Residential Mortgages(b)		Credit Card(c)		Other Retail(d)		Total Loans
2024
Originated in 2024	$	13	$	80	$	—	$	—	$	6	$	99
Originated in 2023	68		21		—		—		34		123
Originated in 2022	132		47		2		—		39		220
Originated in 2021	23		—		—		—		30		53
Originated in 2020	9		1		—		—		17		27
Originated prior to 2020	31		3		8		—		25		67
Revolving	208		—		—		1,042		77		1,327

Total charge-offs	$	484	$	152	$	10	$	1,042	$	228	$	1,916

2023
Originated in 2023	$	29	$	20	$	—	$	—	$	51	$	100
Originated in 2022	51		88		—		—		116		255
Originated in 2021	25		44		5		—		70		144
Originated in 2020	14		—		8		—		31		53
Originated in 2019	11		3		16		—		26		56
Originated prior to 2019	38		50		97		—		26		211
Revolving	115		—		—		716		54		885
Revolving converted to term	—		—		—		—		28		28
Total charge-offs	$	283	$	205	$	126	$	716	$	402	$	1,732

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:


	September 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	$	39,799	$	636	$	806	$	1,442	$	41,241	$	—	$	—	$	—	$	—	$	—
Originated in 2023	23,359		276		671		947		24,306		43,023		827		856		1,683		44,706
Originated in 2022	23,723		169		697		866		24,589		40,076		274		632		906		40,982
Originated in 2021	5,918		129		100		229		6,147		9,219		117		154		271		9,490
Originated in 2020	2,962		63		77		140		3,102		3,169		92		71		163		3,332
Originated prior to 2020	4,417		13		86		99		4,516		5,303		30		209		239		5,542
Revolving(b)	28,497		263		977		1,240		29,737		26,213		362		1,254		1,616		27,829
Total commercial	128,675		1,549		3,414		4,963		133,638		127,003		1,702		3,176		4,878		131,881
Commercial real estate
Originated in 2024	7,190		260		1,416		1,676		8,866		—		—		—		—		—
Originated in 2023	5,466		102		1,291		1,393		6,859		8,848		465		2,206		2,671		11,519
Originated in 2022	9,964		688		1,339		2,027		11,991		11,831		382		1,141		1,523		13,354
Originated in 2021	7,182		183		505		688		7,870		9,235		500		385		885		10,120
Originated in 2020	3,081		43		119		162		3,243		3,797		51		87		138		3,935
Originated prior to 2020	8,775		124		691		815		9,590		10,759		458		619		1,077		11,836
Revolving	2,144		—		54		54		2,198		2,613		6		70		76		2,689
Revolving converted to term	2		—		—		—		2		2		—		—		—		2
Total commercial real estate	43,804		1,400		5,415		6,815		50,619		47,085		1,862		4,508		6,370		53,455
Residential mortgages(c)
Originated in 2024	7,590		—		1		1		7,591		—		—		—		—		—
Originated in 2023	9,115		—		10		10		9,125		9,734		—		5		5		9,739
Originated in 2022	28,756		—		30		30		28,786		29,146		—		17		17		29,163
Originated in 2021	35,150		—		29		29		35,179		36,365		—		16		16		36,381
Originated in 2020	13,978		—		16		16		13,994		14,773		—		9		9		14,782
Originated prior to 2020	23,105		—		254		254		23,359		25,202		—		262		262		25,464
Revolving	—		—		—		—		—		1		—		—		—		1
Total residential mortgages	117,694		—		340		340		118,034		115,221		—		309		309		115,530
Credit card(d)	28,641		—		396		396		29,037		28,185		—		375		375		28,560
Other retail
Originated in 2024	6,021		—		3		3		6,024		—		—		—		—		—
Originated in 2023	4,251		—		8		8		4,259		5,184		—		4		4		5,188
Originated in 2022	4,455		—		12		12		4,467		5,607		—		12		12		5,619
Originated in 2021	7,415		—		16		16		7,431		10,398		—		15		15		10,413
Originated in 2020	3,031		—		5		5		3,036		4,541		—		9		9		4,550
Originated prior to 2020	3,059		—		16		16		3,075		4,008		—		20		20		4,028
Revolving	13,663		—		112		112		13,775		13,720		—		104		104		13,824
Revolving converted to term	725		—		44		44		769		735		—		52		52		787
Total other retail	42,620		—		216		216		42,836		44,193		—		216		216		44,409
Total loans	$	361,434	$	2,949	$	9,781	$	12,730	$	374,164	$	361,687	$	3,564	$	8,584	$	12,148	$	373,835
Total outstanding commitments	$	770,528	$	4,499	$	11,828	$	16,327	$	786,855	$	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 September 30, 2024, $2.0 billion of GNMA loans 90 days or more past due and $1.4 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
September 30, 2024
Commercial	$	132,626	$	335	$	92	$	585	$	133,638
Commercial real estate	49,604		81		9		925		50,619
Residential mortgages(a)	117,530		171		179		154		118,034
Credit card	28,215		426		396		—		29,037
Other retail	42,407		222		62		145		42,836
Total loans	$	370,382	$	1,235	$	738	$	1,809	$	374,164
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 September 30, 2024, $607 million of loans 30–89 days past due and $2.0 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 September 30, 2024 and December 31, 2023, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $5 million for both the three months ended September 30, 2024 and 2023, respectively, and $16 million and $12 million for the nine months ended September 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 September 30 (Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)		Total Modifications		Percent of Class Total
2024
Commercial	$	26	$	—	$	292	$	—	$	318	.2	%
Commercial real estate	—		—		401		27		428		.8
Residential mortgages(b)	—		21		3		7		31		—
Credit card	133		2		—		—		135		.5
Other retail	2		—		36		2		40		.1
Total loans, excluding loans purchased from GNMA mortgage pools	161		23		732		36		952		.3
Loans purchased from GNMA mortgage pools(b)	—		391		96		101		588		.5
Total loans	$	161	$	414	$	828	$	137	$	1,540	.4	%
2023
Commercial	$	16	$	—	$	98	$	—	$	114	.1	%
Commercial real estate	—		—		426		9		435		.8
Residential mortgages(b)	—		58		6		1		65		.1
Credit card	117		—		—		—		117		.4
Other retail	2		12		39		—		53		.1
Total loans, excluding loans purchased from GNMA mortgage pools	135		70		569		10		784		.2
Loans purchased from GNMA mortgage pools(b)	—		455		75		127		657		.6
Total loans	$	135	$	525	$	644	$	137	$	1,441	.4	%
Nine Months Ended September 30 (Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)		Total Modifications		Percent of Class Total
2024
Commercial	$	63	$	—	$	603	$	—	$	666	.5	%
Commercial real estate	49		—		761		27		837		1.7
Residential mortgages(b)	—		46		15		16		77		.1
Credit card	330		2		—		—		332		1.1
Other retail	6		2		98		3		109		.3
Total loans, excluding loans purchased from GNMA mortgage pools	448		50		1,477		46		2,021		.5
Loans purchased from GNMA mortgage pools(b)	1		1,101		257		281		1,640		1.4
Total loans	$	449	$	1,151	$	1,734	$	327	$	3,661	1.0	%
2023
Commercial	$	36	$	—	$	213	$	—	$	249	.2	%
Commercial real estate	—		—		527		9		536		1.0
Residential mortgages(b)	—		221		21		17		259		.2
Credit card	268		1		—		—		269		1.0
Other retail	6		20		113		2		141		.3
Total loans, excluding loans purchased from GNMA mortgage pools	310		242		874		28		1,454		.4
Loans purchased from GNMA mortgage pools(b)	—		1,020		211		261		1,492		1.3
Total loans	$	310	$	1,262	$	1,085	$	289	$	2,946	.8	%

(a)Includes $85 million of total loans receiving a payment delay and term extension, $44 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 September 30, 2024, compared with $126 million, $9 million and $2 million for the three months ended September 30, 2023, respectively. Includes $251 million of total loans receiving a payment delay and term extension, $56 million of total loans receiving an interest rate reduction and term extension and $20 million of total loans receiving an interest rate reduction, payment delay and term extension for the nine months ended September 30, 2024, compared with $268 million, $14 million and $7 million for the nine months ended September 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 September 30	Weighted-Average Interest Rate Reduction		Weighted-Average Months of Term Extension
2024
Commercial(a)	20.5	%	9
Commercial real estate	4.4		12
Residential mortgages	1.1		92
Credit card	16.2		—
Other retail	6.4		5
Loans purchased from GNMA mortgage pools	.4		109
2023
Commercial(a)	21.5	%	13
Commercial real estate	—		11
Residential mortgages	.9		99
Credit card	15.4		—
Other retail	9.1		2
Loans purchased from GNMA mortgage pools	.5		121
Nine Months Ended September 30	Weighted-Average Interest Rate Reduction		Weighted-Average Months of Term Extension
2024
Commercial(a)	20.2	%	9
Commercial real estate	3.1		12
Residential mortgages	.9		88
Credit card	16.3		—
Other retail	7.7		5
Loans purchased from GNMA mortgage pools	.5		113
2023
Commercial(a)	21.0	%	10
Commercial real estate	—		10
Residential mortgages	1.3		109
Credit card	15.1		—
Other retail	7.8		4
Loans purchased from GNMA mortgage pools	.6		98

Note: The weighted-average payment deferral for all portfolio classes was less than $1 million for the three and nine months ended September 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 was primarily driven by commercial cards.

Loans Modified by Delinquency Status

The following table provides a summary of loan balances at September 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	$	556	$	55	$	159	$	770
Commercial real estate	752		2		455		1,209
Residential mortgages(a)	1,487		4		10		1,501
Credit card	298		70		37		405
Other retail	120		17		5		142
Total loans	$	3,213	$	148	$	666	$	4,027

(a)At September 30, 2024, $430 million of loans 30-89 days past due and $265 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 September 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 September 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	$	223	$	11	$	14	$	248
Commercial real estate	347		1		189		537
Residential mortgages(a)	1,089		15		14		1,118
Credit card	192		54		22		268
Other retail	106		15		7		128
Total loans	$	1,957	$	96	$	246	$	2,299

(a)At September 30, 2023, $263 million of loans 30-89 days past due and $64 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 September 30, 2024
Commercial	$	8	$	—	$	13	$	—
Commercial real estate	—		—		180		—
Residential mortgages	—		2		—		1
Credit card	33		—		—		—
Other retail	1		—		5		—
Total loans, excluding loans purchased from GNMA mortgage pools	42		2		198		1
Loans purchased from GNMA mortgage pools	—		97		50		54
Total loans	$	42	$	99	$	248	$	55
Nine Months Ended September 30, 2024
Commercial	$	20	$	—	$	13	$	—
Commercial real estate	—		—		204		—
Residential mortgages	—		12		3		4
Credit card	92		—		—		—
Other retail	2		1		15		—
Total loans, excluding loans purchased from GNMA mortgage pools	114		13		235		4
Loans purchased from GNMA mortgage pools	—		154		80		94
Total loans	$	114	$	167	$	315	$	98

(a)Includes $49 million of total loans receiving a payment delay and term extension, $5 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 three months ended September 30, 2024. Includes $91 million of total loans receiving a payment delay and term extension, $6 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 nine months ended September 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 September 30, 2023:


(Dollars in Millions)	Interest Rate Reduction		Payment Delay		Term Extension		Multiple Modifications(a)
Three Months Ended September 30, 2023
Commercial	$	2	$	—	$	—	$	—
Residential mortgages	—		4		1		—
Credit card	10		—		—		—
Other retail	—		—		4		—
Total loans, excluding loans purchased from GNMA mortgage pools	12		4		5		—
Loans purchased from GNMA mortgage pools	—		20		9		6
Total loans	$	12	$	24	$	14	$	6
Nine Months Ended September 30, 2023
Commercial	$	3	$	—	$	—	$	—
Residential mortgages	—		5		1		1
Credit card	15		—		—		—
Other retail	—		—		5		—
Total loans, excluding loans purchased from GNMA mortgage pools	18		5		6		1
Loans purchased from GNMA mortgage pools	—		23		10		7
Total loans	$	18	$	28	$	16	$	8

(a) Represents loans receiving a payment delay and term extension for the three months ended September 30, 2023. Includes $7 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 nine months ended September 30, 2023.