Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2019

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


	March 31, 2019					December 31, 2018
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	97,552		33.9	%	$	96,849		33.8	%
Lease financing		5,517		1.9			5,595		2.0
Total commercial		103,069		35.8			102,444		35.7
Commercial Real Estate
Commercial mortgages		28,416		9.9			28,596		10.0
Construction and development		11,005		3.8			10,943		3.8
Total commercial real estate		39,421		13.7			39,539		13.9
Residential Mortgages
Residential mortgages		54,552		18.9			53,034		18.5
Home equity loans, first liens		11,691		4.1			12,000		4.2
Total residential mortgages		66,243		23.0			65,034		22.7
Credit Card		22,268		7.8			23,363		8.1
Other Retail
Retail leasing		8,612		3.0			8,546		3.0
Home equity and second mortgages		15,883		5.5			16,122		5.6
Revolving credit		2,934		1.0			3,088		1.1
Installment		10,030		3.5			9,676		3.4
Automobile		18,976		6.6			18,719		6.5
Student		263		.1			279		.1
Total other retail		56,698		19.7			56,430		19.7
Total loans	$	287,699		100.0	%	$	286,810		100.0	%

Activity in Allowance for Credit Losses by Portfolio Class

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


(Dollars in Millions)	Commercial			Commercial Real Estate			Residential Mortgages			Credit Card			Other Retail			Covered Loans			Total Loans
Balance at December 31, 2018	$	1,454		$	800		$	455		$	1,102		$	630		$	–		$	4,441
Add
Provision for credit losses		64			12			(7	)		238			70			–			377
Deduct
Loans charged-off		111			1			8			257			96			–			473

Less recoveries of loans charged-off		(38	)		(1	)		(5	)		(32	)		(30	)		–			(106	)
Net loans charged-off		73			–			3			225			66			–			367
Balance at March 31, 2019	$	1,445		$	812		$	445		$	1,115		$	634		$	–		$	4,451

Balance at December 31, 2017	$	1,372		$	831		$	449		$	1,056		$	678		$	31		$	4,417
Add
Provision for credit losses		74			(8	)		1			219			60			(5	)		341
Deduct
Loans charged-off		94			3			13			248			95			–			453

Less recoveries of loans charged-off		(34	)		(6	)		(6	)		(37	)		(29	)		–			(112	)
Net loans charged-off		60			(3	)		7			211			66			–			341
Balance at March 31, 2018	$	1,386		$	826		$	443		$	1,064		$	672		$	26		$	4,417

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
Allowance Balance at March 31, 2019 Related to
Loans individually evaluated for impairment (a)	$	31	$	2	$	–	$	–	$	–	$	33
TDRs collectively evaluated for impairment		18		4		117		74		12		225
Other loans collectively evaluated for impairment		1,396		806		313		1,041		622		4,178
Loans acquired with deteriorated credit quality		–		–		15		–		–		15
Total allowance for credit losses	$	1,445	$	812	$	445	$	1,115	$	634	$	4,451
Allowance Balance at December 31, 2018 Related to
Loans individually evaluated for impairment (a)	$	16	$	8	$	–	$	–	$	–	$	24
TDRs collectively evaluated for impairment		15		3		126		69		12		225
Other loans collectively evaluated for impairment		1,423		788		314		1,033		618		4,176
Loans acquired with deteriorated credit quality		–		1		15		–		–		16
Total allowance for credit losses	$	1,454	$	800	$	455	$	1,102	$	630	$	4,441

(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
March 31, 2019
Loans individually evaluated for impairment (a)	$	284	$	76	$	–	$	–	$	–	$	360
TDRs collectively evaluated for impairment		160		143		3,158		254		190		3,905
Other loans collectively evaluated for impairment		102,625		39,171		62,785		22,014		56,508		283,103
Loans acquired with deteriorated credit quality		–		31		300		–		–		331
Total loans	$	103,069	$	39,421	$	66,243	$	22,268	$	56,698	$	287,699
December 31, 2018
Loans individually evaluated for impairment (a)	$	262	$	86	$	–	$	–	$	–	$	348
TDRs collectively evaluated for impairment		151		129		3,252		245		183		3,960
Other loans collectively evaluated for impairment		102,031		39,297		61,465		23,118		56,247		282,158
Loans acquired with deteriorated credit quality		–		27		317		–		–		344
Total loans	$	102,444	$	39,539	$	65,034	$	23,363	$	56,430	$	286,810

(a)

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

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
March 31, 2019
Commercial	$	102,125	$	596	$	77	$	271	$	103,069
Commercial real estate		39,248		43		3		127		39,421
Residential mortgages (a)		65,666		168		122		287		66,243
Credit card		21,690		290		288		–		22,268
Other retail		56,045		375		105		173		56,698
Total loans	$	284,774	$	1,472	$	595	$	858	$	287,699

December 31, 2018
Commercial	$	101,844	$	322	$	69	$	209	$	102,444
Commercial real estate		39,354		70		–		115		39,539
Residential mortgages (a)		64,443		181		114		296		65,034
Credit card		22,746		324		293		–		23,363
Other retail		55,722		403		108		197		56,430
Total loans	$	284,109	$	1,300	$	584	$	817	$	286,810

(a)

At March 31, 2019, $418 million of loans 30–89 days past due and $1.7 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 $430 million and $1.7 billion at December 31, 2018, 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
March 31, 2019
Commercial	$	100,888	$	969	$	1,212	$	2,181	$	103,069
Commercial real estate		38,368		532		521		1,053		39,421
Residential mortgages (b)		65,779		–		464		464		66,243
Credit card		21,980		–		288		288		22,268
Other retail		56,385		6		307		313		56,698
Total loans	$	283,400	$	1,507	$	2,792	$	4,299	$	287,699
Total outstanding commitments	$	607,486	$	2,191	$	3,405	$	5,596	$	613,082

December 31, 2018
Commercial	$	100,014	$	1,149	$	1,281	$	2,430	$	102,444
Commercial real estate		38,473		584		482		1,066		39,539
Residential mortgages (b)		64,570		1		463		464		65,034
Credit card		23,070		–		293		293		23,363
Other retail		56,101		6		323		329		56,430
Total loans	$	282,228	$	1,740	$	2,842	$	4,582	$	286,810
Total outstanding commitments	$	600,407	$	2,801	$	3,448	$	6,249	$	606,656

(a)

Classified rating on consumer loans primarily based on delinquency status.

(b)

At March 31, 2019, $1.7 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 $1.7 billion and $1.6 billion at December 31, 2018, 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
March 31, 2019
Commercial	$	502	$	1,096	$	50	$	136
Commercial real estate		266		619		7		–
Residential mortgages		1,684		1,843		82		–
Credit card		254		254		74		–
Other retail		325		400		15		3
Total loans, excluding loans purchased from GNMA mortgage pools		3,031		4,212		228		139
Loans purchased from GNMA mortgage pools		1,578		1,578		36		–
Total	$	4,609	$	5,790	$	264	$	139
December 31, 2018
Commercial	$	467	$	1,006	$	32	$	106
Commercial real estate		279		511		12		2
Residential mortgages		1,709		1,879		86		–
Credit card		245		245		69		–
Other retail		335		418		14		5
Total loans, excluding loans purchased from GNMA mortgage pools		3,035		4,059		213		113
Loans purchased from GNMA mortgage pools		1,639		1,639		41		–
Total	$	4,674	$	5,698	$	254	$	113

(a)

Substantially all loans classified as impaired at March 31, 2019 and December 31, 2018, had an associated allowance for credit losses.

Impaired Loans Average Recorded Investment and Interest Income Recognized

Additional information on impaired loans follows:


	2019				2018
Three Months Ended March 31 (Dollars in Millions)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial	$	485	$	1	$	545	$	1
Commercial real estate		273		2		267		2
Residential mortgages		1,697		24		1,914		20
Credit card		249		–		232		1
Other retail		330		3		300		4
Covered Loans		–		–		38		–
Total loans, excluding loans purchased from GNMA mortgage pools		3,034		30		3,296		28
Loans purchased from GNMA mortgage pools		1,609		17		1,624		12
Total	$	4,643	$	47	$	4,920	$	40

Summary of Loans Modified as TDRs

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


	2019						2018
Three Months Ended March 31 (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
Commercial		913	$	36	$	29		623	$	81	$	75
Commercial real estate		20		47		46		29		16		16
Residential mortgages		96		14		13		148		17		16
Credit card		9,648		50		51		8,546		43		43
Other retail		573		11		10		559		11		10
Total loans, excluding loans purchased from GNMA mortgage pools		11,250		158		149		9,905		168		160
Loans purchased from GNMA mortgage pools		1,538		203		195		888		117		113
Total loans		12,788	$	361	$	344		10,793	$	285	$	273

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:


	2019				2018
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		234	$	5		239	$	9
Commercial real estate		8		6		8		4
Residential mortgages		96		10		56		4
Credit card		2,054		9		2,036		9
Other retail		147		7		77		1
Covered loans		–		–		1		–
Total loans, excluding loans purchased from GNMA mortgage pools		2,539		37		2,417		27
Loans purchased from GNMA mortgage pools		124		17		232		31
Total loans		2,663	$	54		2,649	$	58