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Loans and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2021

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


	March 31, 2021					December 31, 2020
(Dollars in Millions)	Amount		Percent of Total			Amount		Percent of Total
Commercial
Commercial	$	98,847		33.6	%	$	97,315		32.7	%
Lease financing		5,311		1.8			5,556		1.9
Total commercial		104,158		35.4			102,871		34.6
Commercial Real Estate
Commercial mortgages		27,649		9.4			28,472		9.6
Construction and development		10,783		3.6			10,839		3.6
Total commercial real estate		38,432		13.0			39,311		13.2
Residential Mortgages
Residential mortgages		64,238		21.8			66,525		22.4
Home equity loans, first liens		9,386		3.2			9,630		3.2
Total residential mortgages		73,624		25.0			76,155		25.6
Credit Card		20,872		7.1			22,346		7.5
Other Retail
Retail leasing		7,880		2.7			8,150		2.7
Home equity and second mortgages		11,679		4.0			12,472		4.2
Revolving credit		2,536		.9			2,688		.9
Installment		14,562		4.9			13,823		4.6
Automobile		20,527		7.0			19,722		6.6
Student		157		–			169		.1
Total other retail		57,341		19.5			57,024		19.1
Total loans	$	294,427		100.0	%	$	297,707		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			Total Loans
Balance at December 31, 2020	$	2,423		$	1,544		$	573		$	2,355		$	1,115		$	8,010
Add
Provision for credit losses		(435	)		(19	)		(39	)		(259	)		(75	)		(827	)
Deduct
Loans charged-off		86			10			5			190			83			374
Less recoveries of loans charged-off		(30	)		(17	)		(10	)		(46	)		(48	)		(151	)
Net loan charge-offs (recoveries )		56			(7	)		(5	)		144			35			223
Balance at March 31, 2021	$	1,932		$	1,532		$	539		$	1,952		$	1,005		$	6,960
Balance at December 31, 2019	$	1,484		$	799		$	433		$	1,128		$	647		$	4,491
Add
Change in accounting principle (a)		378			(122	)		(30	)		872			401			1,499
Provision for credit losses		452			162			10			246			123			993
Deduct
Loans charged-off		88			–			8			274			121			491
Less recoveries of loans charged-off		(14	)		(2	)		(7	)		(40	)		(35	)		(98	)
Net loan charge-offs (recoveries )		74			(2	)		1			234			86			393
Balance at March 31, 2020	$	2,240		$	841		$	412		$	2,012		$	1,085		$	6,590

(a)	Effective January 1, 2020, the Company adopted accounting guidance which changed impairment recognition of financial instruments to a model that is based on expected losses rather than incurred losses.

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 (b)		Total
March 31, 2021
Commercial	$	103,557	$	193	$	61	$	347	$	104,158
Commercial real estate		37,953		119		4		356		38,432
Residential mortgages (a)		73,024		204		143		253		73,624
Credit card		20,486		188		198		–		20,872
Other retail		56,878		221		70		172		57,341
Total loans	$	291,898	$	925	$	476	$	1,128	$	294,427
December 31, 2020
Commercial	$	102,127	$	314	$	55	$	375	$	102,871
Commercial real estate		38,676		183		2		450		39,311
Residential mortgages (a)		75,529		244		137		245		76,155
Credit card		21,918		231		197		–		22,346
Other retail		56,466		318		86		154		57,024
Total loans	$	294,716	$	1,290	$	477	$	1,224	$	297,707

(a)

At March 31, 2021, $1.5 billion 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 $1.4 billion and $1.8 billion at December 31, 2020, respectively.

(b)	Substantially all nonperforming loans at March 31, 2021 and December 31, 2020, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $3 million and $5 million for the three months ended March 31, 2021 and 2020, 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:


	March 31, 2021										December 31, 2020
			Criticized										Criticized
(Dollars in Millions)	Pass		Special Mention		Classified (a)		Total Criticized		Total		Pass		Special Mention		Classified (a)		Total Criticized		Total
Commercial
Originated in 2021	$	12,604	$	313	$	218	$	531	$	13,135	$	–	$	–	$	–	$	–	$	–
Originated in 2020		28,890		1,003		1,302		2,305		31,195		34,557		1,335		1,753		3,088		37,645
Originated in 2019		15,710		351		223		574		16,284		17,867		269		349		618		18,485
Originated in 2018		10,909		372		151		523		11,432		12,349		351		176		527		12,876
Originated in 2017		4,658		81		181		262		4,920		5,257		117		270		387		5,644
Originated prior to 2017		4,133		168		73		241		4,374		4,954		128		115		243		5,197
Revolving		22,377		206		235		441		22,818		22,445		299		280		579		23,024
Total commercial		99,281		2,494		2,383		4,877		104,158		97,429		2,499		2,943		5,442		102,871

Commercial real estate
Originated in 2021		2,368		39		408		447		2,815		–		–		–		–		–
Originated in 2020		8,889		336		901		1,237		10,126		9,446		461		1,137		1,598		11,044
Originated in 2019		8,788		450		947		1,397		10,185		9,514		454		1,005		1,459		10,973
Originated in 2018		5,296		373		499		872		6,168		6,053		411		639		1,050		7,103
Originated in 2017		2,375		141		350		491		2,866		2,650		198		340		538		3,188
Originated prior to 2017		4,272		151		161		312		4,584		4,762		240		309		549		5,311
Revolving		1,457		5		226		231		1,688		1,445		9		238		247		1,692
Total commercial real estate		33,445		1,495		3,492		4,987		38,432		33,870		1,773		3,668		5,441		39,311

Residential mortgages (b)
Originated in 2021		4,208		–		–		–		4,208		–		–		–		–		–
Originated in 2020		22,053		–		5		5		22,058		23,262		1		3		4		23,266
Originated in 2019		12,084		1		23		24		12,108		13,969		1		17		18		13,987
Originated in 2018		4,989		1		25		26		5,015		5,670		1		22		23		5,693
Originated in 2017		6,091		1		22		23		6,114		6,918		1		24		25		6,943
Originated prior to 2017		23,782		3		335		338		24,120		25,921		2		342		344		26,265
Revolving		1		–		–		–		1		1		–		–		–		1
Total residential mortgages		73,208		6		410		416		73,624		75,741		6		408		414		76,155

Credit card (c)		20,674		–		198		198		20,872		22,149		–		197		197		22,346

Other retail
Originated in 2021		5,690		–		1		1		5,691		–		–		–		–		–
Originated in 2020		15,954		–		6		6		15,960		17,589		–		7		7		17,596
Originated in 2019		10,351		–		16		16		10,367		11,605		–		23		23		11,628
Originated in 2018		5,822		–		20		20		5,842		6,814		–		27		27		6,841
Originated in 2017		3,106		–		14		14		3,120		3,879		–		22		22		3,901
Originated prior to 2017		3,134		–		18		18		3,152		3,731		–		29		29		3,760
Revolving		12,536		–		135		135		12,671		12,647		–		110		110		12,757
Revolving converted to term		495		–		43		43		538		503		–		38		38		541
Total other retail		57,088		–		253		253		57,341		56,768		–		256		256		57,024
Total loans	$	283,696	$	3,995	$	6,736	$	10,731	$	294,427	$	285,957	$	4,278	$	7,472	$	11,750	$	297,707
Total outstanding commitments	$	629,280	$	8,140	$	9,239	$	17,379	$	646,659	$	627,606	$	8,772	$	9,374	$	18,146	$	645,752

Note:

Year of origination is based on the origination date of a loan or the date when the maturity date, pricing or commitment amount is amended.

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

(b)

At March 31, 2021, $1.7 billion of GNMA loans 90 days or more past due and $1.3 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 $1.8 billion and $1.4 billion at December 31, 2020, respectively.

(c)	All credit card loans are considered revolving loans.

Summary of Loans Modified as TDRs

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


	2021						2020
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		704	$	75	$	60		999	$	99	$	101
Commercial real estate		56		86		71		27		21		21
Residential mortgages		336		104		104		90		10		10
Credit card		5,786		33		34		8,415		46		47
Other retail		1,325		37		32		655		15		14
Total loans, excluding loans purchased from GNMA mortgage pools		8,207		335		301		10,186		191		193
Loans purchased from GNMA mortgage pools		559		87		89		1,904		266		260
Total loans		8,766	$	422	$	390		12,090	$	457	$	453

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) for the periods presented, that were modified as TDRs within 12 months previous to default:


	2021				2020
Three Months Ended March 31 (Dollars in Millions)	Number of Loans		Amount Defaulted		Number of Loans		Amount Defaulted
Commercial		285	$	16		287	$	20
Commercial real estate		7		5		16		10
Residential mortgages		15		2		13		1
Credit card		1,764		9		2,070		10
Other retail		280		5		108		1
Total loans, excluding loans purchased from GNMA mortgage pools		2,351		37		2,494		42
Loans purchased from GNMA mortgage pools		30		4		304		41
Total loans		2,381	$	41		2,798	$	83