Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2017

Receivables [Abstract]

Composition of Loan Portfolio

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

	September 30, 2017					December 31, 2016
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	91,449		32.8	%	$	87,928		32.2	%
Lease financing		5,479		2.0			5,458		2.0
Total commercial		96,928		34.8			93,386		34.2
Commercial Real Estate
Commercial mortgages		29,902		10.7			31,592		11.6
Construction and development		11,528		4.1			11,506		4.2
Total commercial real estate		41,430		14.8			43,098		15.8
Residential Mortgages
Residential mortgages		46,107		16.6			43,632		16.0
Home equity loans, first liens		13,210		4.7			13,642		5.0
Total residential mortgages		59,317		21.3			57,274		21.0
Credit Card		20,923		7.5			21,749		7.9
Other Retail
Retail leasing		7,923		2.8			6,316		2.3
Home equity and second mortgages		16,308		5.9			16,369		6.0
Revolving credit		3,225		1.2			3,282		1.2
Installment		8,900		3.2			8,087		3.0
Automobile		18,530		6.6			17,571		6.4
Student		1,973		.7			2,239		.8
Total other retail		56,859		20.4			53,864		19.7
Total loans, excluding covered loans		275,457		98.8			269,371		98.6
Covered Loans		3,262		1.2			3,836		1.4
Total loans	$	278,719		100.0	%	$	273,207		100.0	%

Changes in Accretable Balance for Purchased Impaired Loans

Changes in the accretable balance for purchased impaired loans were as follows:

	Three Months Ended September 30,						Nine Months Ended         September 30,
(Dollars in Millions)	2017			2016			2017			2016
Balance at beginning of period	$	546		$	891		$	698		$	957
Accretion		(107	)		(102	)		(286	)		(297	)
Disposals		(17	)		(23	)		(68	)		(77	)
Reclassifications from nonaccretable difference (a)		47			31			130			214
Other		(3	)		–			(8	)		–
Balance at end of period	$	466		$	797		$	466		$	797

(a) Primarily relates to changes in expected credit performance.

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, Excluding Covered Loans			Covered Loans			Total Loans
2017
Balance at beginning of period	$	1,395		$	856		$	455		$	990		$	648		$	4,344		$	33		$	4,377
Add
Provision for credit losses		71			(12	)		2			216			84			361			(1	)		360
Deduct
Loans charged-off		115			2			16			214			86			433			–			433
Less recoveries of loans charged-off		(32	)		(9	)		(9	)		(27	)		(26	)		(103	)		–			(103	)
Net loans charged-off		83			(7	)		7			187			60			330			–			330
Other changes (a)		–			–			–			–			–			–			–			–
Balance at end of period	$	1,383		$	851		$	450		$	1,019		$	672		$	4,375		$	32		$	4,407
2016
Balance at beginning of period	$	1,473		$	748		$	544		$	884		$	643		$	4,292		$	37		$	4,329
Add
Provision for credit losses		90			34			(12	)		178			37			327			(2	)		325
Deduct
Loans charged-off		104			9			19			182			84			398			–			398
Less recoveries of loans charged-off		(17	)		(8	)		(7	)		(21	)		(30	)		(83	)		–			(83	)
Net loans charged-off		87			1			12			161			54			315			–			315
Other changes (a)		–			–			–			–			–			–			(1	)		(1	)
Balance at end of period	$	1,476		$	781		$	520		$	901		$	626		$	4,304		$	34		$	4,338

(a) Includes net changes in credit losses to be reimbursed by the FDIC and reductions in the allowance for covered loans where the reversal of a previously recorded allowance was offset by an associated decrease in the indemnification asset, and the impact of any loan sales.

Nine Months Ended September 30, (Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Total Loans, Excluding Covered Loans			Covered Loans			Total Loans
2017
Balance at beginning of period	$	1,450		$	812		$	510		$	934		$	617		$	4,323		$	34		$	4,357
Add
Provision for credit losses		169			21			(33	)		666			234			1,057			(2	)		1,055
Deduct
Loans charged-off		315			7			49			653			263			1,287			–			1,287
Less recoveries of loans charged-off		(79	)		(25	)		(22	)		(72	)		(84	)		(282	)		–			(282	)
Net loans charged-off		236			(18	)		27			581			179			1,005			–			1,005
Other changes (a)		–			–			–			–			–			–			–			–
Balance at end of period	$	1,383		$	851		$	450		$	1,019		$	672		$	4,375		$	32		$	4,407
2016
Balance at beginning of period	$	1,287		$	724		$	631		$	883		$	743		$	4,268		$	38		$	4,306
Add
Provision for credit losses		438			53			(63	)		514			42			984			(2	)		982
Deduct
Loans charged-off		322			19			67			559			243			1,210			–			1,210
Less recoveries of loans charged-off		(73	)		(23	)		(19	)		(64	)		(84	)		(263	)		–			(263	)
Net loans charged-off		249			(4	)		48			495			159			947			–			947
Other changes (a)		–			–			–			(1	)		–			(1	)		(2	)		(3	)
Balance at end of period	$	1,476		$	781		$	520		$	901		$	626		$	4,304		$	34		$	4,338

(a) Includes net changes in credit losses to be reimbursed by the FDIC and reductions in the allowance for covered loans where the reversal of a previously recorded allowance was offset by an associated decrease in the indemnification asset, and the impact of any loan sales.

Additional Detail of Allowance for Credit Losses and Related Loan Balances by Portfolio Class

Additional detail of the allowance for credit losses by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans, Excluding Covered Loans		Covered Loans		Total Loans
Allowance Balance at September 30, 2017 Related to
Loans individually evaluated for impairment (a)	$	25	$	2	$	–	$	–	$	–	$	27	$	–	$	27
TDRs collectively evaluated for impairment		12		4		139		62		16		233		1		234
Other loans collectively evaluated for impairment		1,346		840		311		957		656		4,110		–		4,110
Loans acquired with deteriorated credit quality		–		5		–		–		–		5		31		36
Total allowance for credit losses	$	1,383	$	851	$	450	$	1,019	$	672	$	4,375	$	32	$	4,407
Allowance Balance at December 31, 2016 Related to
Loans individually evaluated for impairment (a)	$	50	$	4	$	–	$	–	$	–	$	54	$	–	$	54
TDRs collectively evaluated for impairment		12		4		180		65		20		281		1		282
Other loans collectively evaluated for impairment		1,388		798		330		869		597		3,982		–		3,982
Loans acquired with deteriorated credit quality		–		6		–		–		–		6		33		39
Total allowance for credit losses	$	1,450	$	812	$	510	$	934	$	617	$	4,323	$	34	$	4,357

(a) Represents the allowance for credit losses related to loans greater than $5 million classified as nonperforming or TDRs.

Additional detail of loan balances by portfolio class was as follows:

(Dollars in Millions)	Commercial		Commercial Real Estate		Residential Mortgages		Credit Card		Other Retail		Total Loans, Excluding Covered Loans		Covered Loans (b)		Total Loans
September 30, 2017
Loans individually evaluated for impairment (a)	$	386	$	44	$	–	$	–	$	–	$	430	$	–	$	430
TDRs collectively evaluated for impairment		138		143		3,509		231		185		4,206		33		4,239
Other loans collectively evaluated for impairment		96,404		41,166		55,807		20,692		56,673		270,742		1,177		271,919
Loans acquired with deteriorated credit quality		–		77		1		–		1		79		2,052		2,131
Total loans	$	96,928	$	41,430	$	59,317	$	20,923	$	56,859	$	275,457	$	3,262	$	278,719
December 31, 2016
Loans individually evaluated for impairment (a)	$	623	$	70	$	–	$	–	$	–	$	693	$	–	$	693
TDRs collectively evaluated for impairment		145		146		3,678		222		173		4,364		35		4,399
Other loans collectively evaluated for impairment		92,611		42,751		53,595		21,527		53,691		264,175		1,553		265,728
Loans acquired with deteriorated credit quality		7		131		1		–		–		139		2,248		2,387
Total loans	$	93,386	$	43,098	$	57,274	$	21,749	$	53,864	$	269,371	$	3,836	$	273,207

(a) Represents loans greater than $5 million classified as nonperforming or TDRs.

(b) Includes expected reimbursements from the FDIC under loss sharing agreements.

Summary of Loans by Portfolio Class, Including Delinquency Status of those that Continue to Accrue Interest and are Nonperforming

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		Total
September 30, 2017
Commercial	$	96,389	$	218	$	52	$	269	$	96,928
Commercial real estate		41,242		62		4		122		41,430
Residential mortgages (a)		58,581		155		107		474		59,317
Credit card		20,375		296		251		1		20,923
Other retail		56,282		331		83		163		56,859
Total loans, excluding covered loans		272,869		1,062		497		1,029		275,457
Covered loans		3,056		48		152		6		3,262
Total loans	$	275,925	$	1,110	$	649	$	1,035	$	278,719
December 31, 2016
Commercial	$	92,588	$	263	$	52	$	483	$	93,386
Commercial real estate		42,922		44		8		124		43,098
Residential mortgages (a)		56,372		151		156		595		57,274
Credit card		21,209		284		253		3		21,749
Other retail		53,340		284		83		157		53,864
Total loans, excluding covered loans		266,431		1,026		552		1,362		269,371
Covered loans		3,563		55		212		6		3,836
Total loans	$	269,994	$	1,081	$	764	$	1,368	$	273,207

(a) At September 30, 2017, $297 million of loans 30–89 days past due and $1.8 billion of loans 90 days or more past due purchased from Government National Mortgage Association (“GNMA”) mortgage pools 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 $273 million and $2.5 billion at December 31, 2016, respectively.

Summary of Loans by Portfolio Class and Company's Internal Credit Quality Rating

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

			Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total
September 30, 2017
Commercial (b)	$	94,127	$	1,328	$	1,473	$	2,801	$	96,928
Commercial real estate		39,998		640		792		1,432		41,430
Residential mortgages (c)		58,671		3		643		646		59,317
Credit card		20,671		–		252		252		20,923
Other retail		56,567		5		287		292		56,859
Total loans, excluding covered loans		270,034		1,976		3,447		5,423		275,457
Covered loans		3,209		–		53		53		3,262
Total loans	$	273,243	$	1,976	$	3,500	$	5,476	$	278,719
Total outstanding commitments	$	579,628	$	3,232	$	4,684	$	7,916	$	587,544
December 31, 2016
Commercial (b)	$	89,739	$	1,721	$	1,926	$	3,647	$	93,386
Commercial real estate		41,634		663		801		1,464		43,098
Residential mortgages (c)		56,457		10		807		817		57,274
Credit card		21,493		–		256		256		21,749
Other retail		53,576		6		282		288		53,864
Total loans, excluding covered loans		262,899		2,400		4,072		6,472		269,371
Covered loans		3,766		–		70		70		3,836
Total loans	$	266,665	$	2,400	$	4,142	$	6,542	$	273,207
Total outstanding commitments	$	562,704	$	4,920	$	5,629	$	10,549	$	573,253

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

(b) At September 30, 2017, $611 million of energy loans ($1.3 billion of total outstanding commitments) had a special mention or classified rating, compared with $1.2 billion of energy loans ($2.8 billion of total outstanding commitments) at December 31, 2016.

(c) At September 30, 2017, $1.8 billion of GNMA loans 90 days or more past due and $1.6 billion of restructured 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 $2.5 billion and $1.6 billion at December 31, 2016, respectively.

Summary of Impaired Loans, which Include Nonaccrual and TDR Loans, by Portfolio Class

A summary of impaired loans, which include all nonaccrual and TDR loans, by portfolio class was as follows:

(Dollars in Millions)	Period-end Recorded Investment (a)		Unpaid Principal Balance		Valuation Allowance		Commitments to Lend Additional Funds
September 30, 2017
Commercial	$	592	$	1,040	$	39	$	168
Commercial real estate		263		545		11		–
Residential mortgages		2,064		2,471		121		1
Credit card		231		231		62		–
Other retail		298		508		19		4
Total loans, excluding GNMA and covered loans		3,448		4,795		252		173
Loans purchased from GNMA mortgage pools		1,571		1,571		20		–
Covered loans		35		43		1		–
Total	$	5,054	$	6,409	$	273	$	173
December 31, 2016
Commercial	$	849	$	1,364	$	68	$	284
Commercial real estate		293		697		10		–
Residential mortgages		2,274		2,847		153		–
Credit card		222		222		64		–
Other retail		281		456		22		4
Total loans, excluding GNMA and covered loans		3,919		5,586		317		288
Loans purchased from GNMA mortgage pools		1,574		1,574		28		–
Covered loans		36		42		1		1
Total	$	5,529	$	7,202	$	346	$	289

(a) Substantially all loans classified as impaired at September 30, 2017 and December 31, 2016, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans follows:

	2017				2016
(Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Three Months Ended September 30
Commercial	$	624	$	3	$	845	$	2
Commercial real estate		272		2		334		6
Residential mortgages		2,111		25		2,381		30
Credit card		231		1		214		1
Other retail		288		4		287		3
Total loans, excluding GNMA and covered loans		3,526		35		4,061		42
Loans purchased from GNMA mortgage pools		1,672		17		1,458		23
Covered loans		38		–		38		–
Total	$	5,236	$	52	$	5,557	$	65
Nine Months Ended September 30
Commercial	$	720	$	5	$	786	$	6
Commercial real estate		274		7		321		12
Residential mortgages		2,178		82		2,457		93
Credit card		229		3		212		3
Other retail		282		11		296		9
Total loans, excluding GNMA and covered loans		3,683		108		4,072		123
Loans purchased from GNMA mortgage pools		1,688		54		1,674		71
Covered loans		37		–		38		1
Total	$	5,408	$	162	$	5,784	$	195

Summary of Loans Modified as TDRs

The following table provides a summary of loans modified as TDRs during the periods presented by portfolio class:

	2017						2016
(Dollars in Millions)	Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance		Number of Loans		Pre-Modification Outstanding Loan Balance		Post-Modification Outstanding Loan Balance
Three Months Ended September 30
Commercial		616	$	40	$	27		638	$	200	$	169
Commercial real estate		29		18		16		26		225		223
Residential mortgages		141		15		16		700		81		87
Credit card		8,106		38		38		8,051		38		40
Other retail		1,949		39		32		593		9		9
Total loans, excluding GNMA and covered loans		10,841		150		129		10,008		553		528
Loans purchased from GNMA mortgage pools		1,340		169		171		2,609		317		308
Covered loans		3		–		–		15		3		3
Total loans		12,184	$	319	$	300		12,632	$	873	$	839
Nine Months Ended September 30
Commercial		2,117	$	239	$	195		1,734	$	692	$	567
Commercial real estate		93		56		55		70		242		240
Residential mortgages		641		72		73		1,192		129		136
Credit card		25,657		123		124		22,693		109		111
Other retail		3,210		65		55		1,669		27		28
Total loans, excluding GNMA and covered loans		31,718		555		502		27,358		1,199		1,082
Loans purchased from GNMA mortgage pools		5,312		697		686		6,978		770		761
Covered loans		10		2		2		35		6		6
Total loans		37,040	$	1,254	$	1,190		34,371	$	1,975	$	1,849

Summary of Loans Modified as TDRs in the Past Twelve Months that have Subsequently Defaulted

The following table provides a summary of TDR loans that defaulted (fully or partially charged-off or became 90 days or more past due) during the periods presented that were modified as TDRs within 12 months previous to default:

	2017				2016
(Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Three Months Ended September 30
Commercial		200	$	25		121	$	4
Commercial real estate		10		3		6		3
Residential mortgages		84		7		43		4
Credit card		2,076		9		1,617		7
Other retail		89		1		103		1
Total loans, excluding GNMA and covered loans		2,459		45		1,890		19
Loans purchased from GNMA mortgage pools		354		46		39		5
Covered loans		1		–		2		1
Total loans		2,814	$	91		1,931	$	25
Nine Months Ended September 30
Commercial		555	$	49		374	$	15
Commercial real estate		28		6		21		9
Residential mortgages		251		26		101		13
Credit card		6,107		26		4,822		21
Other retail		320		4		269		5
Total loans, excluding GNMA and covered loans		7,261		111		5,587		63
Loans purchased from GNMA mortgage pools		711		95		93		12
Covered loans		2		–		3		1
Total loans		7,974	$	206		5,683	$	76

Carrying Amount of Covered Assets

The carrying amount of the covered assets consisted of purchased impaired loans, purchased nonimpaired loans and other assets as shown in the following table:

	September 30, 2017								December 31, 2016
(Dollars in Millions)	Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total		Purchased Impaired Loans		Purchased Nonimpaired Loans		Other		Total
Residential mortgage loans	$	2,052	$	422	$	–	$	2,474	$	2,248	$	506	$	–	$	2,754
Other retail loans		–		173		–		173		–		278		–		278
Losses reimbursable by the FDIC (a)		–		–		320		320		–		–		381		381
Unamortized changes in FDIC asset (b)		–		–		295		295		–		–		423		423
Covered loans		2,052		595		615		3,262		2,248		784		804		3,836
Foreclosed real estate		–		–		26		26		–		–		26		26
Total covered assets	$	2,052	$	595	$	641	$	3,288	$	2,248	$	784	$	830	$	3,862

(a) Relates to loss sharing agreements with remaining terms up to two years.

(b) Represents decreases in expected reimbursements by the FDIC as a result of decreases in expected losses on the covered loans. These amounts are amortized as a reduction in interest income on covered loans over the shorter of the expected life of the respective covered loans or the remaining contractual term of the indemnification agreements.