Loans and leases and the allowance for credit losses

9 Months Ended

Sep. 30, 2024

Loans and leases and the allowance for credit losses

A summary of current, past due and nonaccrual loans as of September 30, 2024 and December 31, 2023 follows:


(Dollars in millions)	Current		30-89 Days Past Due		Accruing Loans Past Due 90 Days or More		Nonaccrual		Total
September 30, 2024
Commercial and industrial	$	59,926	$	265	$	11	$	810	$	61,012
Real estate:
Commercial (a)	21,560		231		2		578		22,371
Residential builder and developer	981		9		—		2		992
Other commercial construction	5,123		113		—		84		5,320
Residential (b)	21,042		667		268		219		22,196
Residential — limited documentation	737		29		—		57		823
Consumer:
Home equity lines and loans	4,464		30		—		82		4,576
Recreational finance	11,621		90		—		28		11,739
Automobile	4,680		52		—		11		4,743
Other	2,066		20		7		55		2,148
Total	$	132,200	$	1,506	$	288	$	1,926	$	135,920

December 31, 2023
Commercial and industrial	$	56,091	$	238	$	11	$	670	$	57,010
Real estate:
Commercial (a)	24,072		311		25		869		25,277
Residential builder and developer	1,065		5		—		3		1,073
Other commercial construction	6,322		159		1		171		6,653
Residential (b)	21,080		763		295		215		22,353
Residential — limited documentation	825		31		—		55		911
Consumer:
Home equity lines and loans	4,528		40		—		81		4,649
Recreational finance	9,935		87		—		36		10,058
Automobile	3,918		60		—		14		3,992
Other	2,003		30		7		52		2,092
Total	$	129,839	$	1,724	$	339	$	2,166	$	134,068

_______________________________________________________________

(a)Commercial real estate loans held for sale were $716 million at September 30, 2024 and $189 million at December 31, 2023.

(b)One-to-four family residential mortgage loans held for sale were $242 million at September 30, 2024 and $190 million at December 31, 2023.

Credit quality indicators

The Company utilizes a loan grading system to differentiate risk amongst its commercial and industrial loans and commercial real estate loans. Loans with a lower expectation of default are assigned one of ten possible “pass” loan grades and are generally ascribed lower loss factors when determining the allowance for credit losses. Loans with an elevated level of credit risk are designated as “criticized” and are ascribed a higher loss factor when determining the allowance for credit losses. Criticized loans may be designated as “nonaccrual” if the Company no longer expects to collect all amounts according to the contractual terms of the loan agreement or the loan is delinquent 90 days or more.

Line of business personnel in different geographic locations with support from and review by the Company’s credit risk personnel review and reassign loan grades based on their detailed knowledge of individual borrowers and their judgment of the impact on such borrowers resulting from changing conditions in their respective regions. Factors considered in assigning loan grades include borrower-specific information related to expected future cash flows and operating results, collateral values, geographic location, financial condition and performance, payment status, and other information. The Company’s policy is that at least annually, updated financial information be obtained from commercial borrowers associated with pass grade loans and additional analysis performed. On a quarterly basis, the Company’s credit personnel review criticized commercial and industrial loans and commercial real estate loans greater than $5 million to determine the appropriateness of the assigned loan grade, including whether the loan should be reported as accruing or nonaccruing.

The following table summarizes the loan grades applied at September 30, 2024 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans and gross charge-offs for those types of loans for the three-month and nine-month periods ended September 30, 2024 by origination year.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2024		2023		2022		2021		2020		Prior
Commercial and industrial:
Pass	$	6,885	$	7,018	$	6,491	$	3,825	$	1,802	$	5,440	$	25,290	$	78	$	56,829
Criticized accrual	128		400		419		218		122		641		1,408		37		3,373
Criticized nonaccrual	7		56		82		46		67		274		260		18		810
Total commercial and industrial	$	7,020	$	7,474	$	6,992	$	4,089	$	1,991	$	6,355	$	26,958	$	133	$	61,012
Gross charge-offs three months ended September 30, 2024	$	3	$	10	$	25	$	4	$	2	$	8	$	12	$	—	$	64
Gross charge-offs nine months ended September 30, 2024	$	4	$	24	$	44	$	19	$	12	$	22	$	95	$	—	$	220
Real estate:
Commercial:
Pass	$	1,003	$	1,648	$	1,296	$	1,190	$	1,861	$	10,308	$	383	$	—	$	17,689
Criticized accrual	5		308		752		323		648		2,044		24		—		4,104
Criticized nonaccrual	—		1		51		32		36		457		1		—		578
Total commercial real estate	$	1,008	$	1,957	$	2,099	$	1,545	$	2,545	$	12,809	$	408	$	—	$	22,371
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	24	$	—	$	—	$	24
Gross charge-offs nine months ended September 30, 2024	$	—	$	4	$	—	$	—	$	5	$	67	$	—	$	—	$	76
Residential builder and developer:
Pass	$	333	$	323	$	78	$	19	$	4	$	11	$	101	$	—	$	869
Criticized accrual	9		43		46		6		—		16		1		—		121
Criticized nonaccrual	—		—		—		1		—		1		—		—		2
Total residential builder and developer	$	342	$	366	$	124	$	26	$	4	$	28	$	102	$	—	$	992
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross charge-offs nine months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	—	$	2
Other commercial construction:
Pass	$	68	$	1,290	$	1,213	$	283	$	161	$	339	$	46	$	—	$	3,400
Criticized accrual	19		87		673		454		311		284		8		—		1,836
Criticized nonaccrual	—		—		5		9		49		21		—		—		84
Total other commercial construction	$	87	$	1,377	$	1,891	$	746	$	521	$	644	$	54	$	—	$	5,320
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross charge-offs nine months ended September 30, 2024	$	—	$	—	$	2	$	—	$	—	$	10	$	2	$	—	$	14

The Company considers repayment performance a significant indicator of credit quality for its residential real estate loan and consumer loan portfolios. A summary of loans in accrual and nonaccrual status at September 30, 2024 for the various classes of the Company’s residential real estate loans and consumer loans and gross charge-offs for those types of loans for the three-month and nine-month periods ended September 30, 2024 by origination year follows:


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2024		2023		2022		2021		2020		Prior
Residential:
Current	$	1,550	$	1,415	$	4,481	$	3,559	$	2,427	$	7,510	$	100	$	—	$	21,042
30-89 days past due	17		10		114		76		35		415		—		—		667
Accruing loans past due 90 days or more	—		8		29		29		18		184		—		—		268
Nonaccrual	—		2		27		15		3		169		3		—		219
Total residential	$	1,567	$	1,435	$	4,651	$	3,679	$	2,483	$	8,278	$	103	$	—	$	22,196
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Gross charge-offs nine months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	4	$	—	$	—	$	4
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	737	$	—	$	—	$	737
30-89 days past due	—		—		—		—		—		29		—		—		29
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		57		—		—		57
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	823	$	—	$	—	$	823
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Gross charge-offs nine months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	—	$	2	$	2	$	95	$	3,038	$	1,327	$	4,464
30-89 days past due	—		—		—		—		—		2		—		28		30
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		3		—		79		82
Total home equity lines and loans	$	—	$	—	$	—	$	2	$	2	$	100	$	3,038	$	1,434	$	4,576
Gross charge-offs three months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	1	$	1
Gross charge-offs nine months ended September 30, 2024	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3	$	3
Recreational finance:
Current	$	3,153	$	2,219	$	2,026	$	1,609	$	1,102	$	1,512	$	—	$	—	$	11,621
30-89 days past due	8		17		14		16		14		21		—		—		90
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	1		5		5		5		4		8		—		—		28
Total recreational finance	$	3,162	$	2,241	$	2,045	$	1,630	$	1,120	$	1,541	$	—	$	—	$	11,739
Gross charge-offs three months ended September 30, 2024	$	3	$	5	$	6	$	4	$	4	$	6	$	—	$	—	$	28
Gross charge-offs nine months ended September 30, 2024	$	4	$	12	$	17	$	14	$	11	$	18	$	—	$	—	$	76
Automobile:
Current	$	1,875	$	856	$	826	$	729	$	267	$	127	$	—	$	—	$	4,680
30-89 days past due	7		11		13		11		5		5		—		—		52
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	1		2		2		3		1		2		—		—		11
Total automobile	$	1,883	$	869	$	841	$	743	$	273	$	134	$	—	$	—	$	4,743
Gross charge-offs three months ended September 30, 2024	$	1	$	2	$	2	$	1	$	1	$	—	$	—	$	—	$	7
Gross charge-offs nine months ended September 30, 2024	$	1	$	6	$	6	$	5	$	2	$	2	$	—	$	—	$	22
Other:
Current	$	205	$	168	$	121	$	81	$	18	$	20	$	1,452	$	1	$	2,066
30-89 days past due	3		2		2		1		—		—		11		1		20
Accruing loans past due 90 days or more	—		—		—		—		—		—		7		—		7
Nonaccrual	2		1		1		—		—		—		51		—		55
Total other	$	210	$	171	$	124	$	82	$	18	$	20	$	1,521	$	2	$	2,148
Gross charge-offs three months ended September 30, 2024	$	5	$	3	$	2	$	1	$	—	$	—	$	18	$	—	$	29
Gross charge-offs nine months ended September 30, 2024	$	10	$	9	$	7	$	4	$	1	$	2	$	47	$	—	$	80
Total loans and leases at September 30, 2024	$	15,279	$	15,890	$	18,767	$	12,542	$	8,957	$	30,732	$	32,184	$	1,569	$	135,920
Total gross charge-offs for the three months ended September 30, 2024	$	12	$	20	$	35	$	10	$	7	$	39	$	30	$	1	$	154
Total gross charge-offs for the nine months ended September 30, 2024	$	19	$	55	$	76	$	42	$	31	$	127	$	144	$	3	$	497

The following table summarizes the loan grades applied at December 31, 2023 to the various classes of the Company’s commercial and industrial loans and commercial real estate loans by origination year.


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans
(Dollars in millions)	2023		2022		2021		2020		2019		Prior						Total
Commercial and industrial:
Pass	$	8,689	$	8,087	$	4,800	$	2,248	$	2,169	$	4,843	$	22,345	$	70	$	53,251
Criticized accrual	292		279		277		142		127		481		1,460		31		3,089
Criticized nonaccrual	29		68		56		75		36		150		243		13		670
Total commercial and industrial	$	9,010	$	8,434	$	5,133	$	2,465	$	2,332	$	5,474	$	24,048	$	114	$	57,010
Real estate:
Commercial:
Pass	$	2,048	$	1,742	$	1,367	$	2,011	$	3,059	$	8,491	$	440	$	—	$	19,158
Criticized accrual	227		891		465		456		966		2,238		7		—		5,250
Criticized nonaccrual	—		46		3		113		93		611		3		—		869
Total commercial real estate	$	2,275	$	2,679	$	1,835	$	2,580	$	4,118	$	11,340	$	450	$	—	$	25,277
Residential builder and developer:
Pass	$	530	$	252	$	41	$	6	$	2	$	12	$	116	$	—	$	959
Criticized accrual	1		18		30		—		59		—		3		—		111
Criticized nonaccrual	—		—		3		—		—		—		—		—		3
Total residential builder and developer	$	531	$	270	$	74	$	6	$	61	$	12	$	119	$	—	$	1,073
Other commercial construction:
Pass	$	813	$	1,366	$	651	$	373	$	646	$	187	$	30	$	—	$	4,066
Criticized accrual	53		391		390		691		565		326		—		—		2,416
Criticized nonaccrual	—		14		10		46		50		49		2		—		171
Total other commercial construction	$	866	$	1,771	$	1,051	$	1,110	$	1,261	$	562	$	32	$	—	$	6,653

A summary of loans in accrual and nonaccrual status at December 31, 2023 for the various classes of the Company’s residential real estate loans and consumer loans by origination year follows:


	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans		Total
(Dollars in millions)	2023		2022		2021		2020		2019		Prior
Residential:
Current	$	1,726	$	4,709	$	3,732	$	2,543	$	1,215	$	7,060	$	95	$	—	$	21,080
30-89 days past due	18		120		88		52		28		457		—		—		763
Accruing loans past due 90 days or more	1		30		28		17		14		205		—		—		295
Nonaccrual	1		17		10		3		4		179		1		—		215
Total residential	$	1,746	$	4,876	$	3,858	$	2,615	$	1,261	$	7,901	$	96	$	—	$	22,353
Residential - limited documentation:
Current	$	—	$	—	$	—	$	—	$	—	$	825	$	—	$	—	$	825
30-89 days past due	—		—		—		—		—		31		—		—		31
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		55		—		—		55
Total residential - limited documentation	$	—	$	—	$	—	$	—	$	—	$	911	$	—	$	—	$	911
Consumer:
Home equity lines and loans:
Current	$	—	$	—	$	2	$	2	$	13	$	98	$	3,022	$	1,391	$	4,528
30-89 days past due	—		—		—		—		—		3		—		37		40
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	—		—		—		—		—		5		3		73		81
Total home equity lines and loans	$	—	$	—	$	2	$	2	$	13	$	106	$	3,025	$	1,501	$	4,649
Recreational finance:
Current	$	2,653	$	2,338	$	1,857	$	1,286	$	781	$	1,020	$	—	$	—	$	9,935
30-89 days past due	11		16		19		14		11		16		—		—		87
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	3		5		8		6		5		9		—		—		36
Total recreational finance	$	2,667	$	2,359	$	1,884	$	1,306	$	797	$	1,045	$	—	$	—	$	10,058
Automobile:
Current	$	1,063	$	1,096	$	1,047	$	427	$	198	$	87	$	—	$	—	$	3,918
30-89 days past due	8		15		17		9		6		5		—		—		60
Accruing loans past due 90 days or more	—		—		—		—		—		—		—		—		—
Nonaccrual	2		3		3		2		2		2		—		—		14
Total automobile	$	1,073	$	1,114	$	1,067	$	438	$	206	$	94	$	—	$	—	$	3,992
Other:
Current	$	250	$	176	$	118	$	33	$	13	$	18	$	1,392	$	3	$	2,003
30-89 days past due	3		3		2		—		—		1		20		1		30
Accruing loans past due 90 days or more	—		—		—		—		—		—		7		—		7
Nonaccrual	2		1		1		—		—		—		48		—		52
Total other	$	255	$	180	$	121	$	33	$	13	$	19	$	1,467	$	4	$	2,092
Total loans and leases at December 31, 2023	$	18,423	$	21,683	$	15,025	$	10,555	$	10,062	$	27,464	$	29,237	$	1,619	$	134,068

Allowance for credit losses

For purposes of determining the level of the allowance for credit losses, the Company evaluates its loan and lease portfolio by type. Changes in the allowance for credit losses for the three months ended September 30, 2024 and 2023 were as follows:


	Commercial and Industrial		Real Estate
(Dollars in millions)			Commercial		Residential		Consumer		Total
Three Months Ended September 30, 2024
Beginning balance	$	790	$	658	$	110	$	646	$	2,204
Provision for credit losses	52		1		(5)		72		120
Net charge-offs:
Charge-offs	(64)		(24)		(1)		(65)		(154)
Recoveries	14		4		1		15		34
Net charge-offs	(50)		(20)		—		(50)		(120)
Ending balance	$	792	$	639	$	105	$	668	$	2,204

Three Months Ended September 30, 2023
Beginning balance	$	583	$	694	$	118	$	603	$	1,998
Provision for credit losses	40		79		(3)		34		150
Net charge-offs:
Charge-offs	(26)		(52)		(1)		(43)		(122)
Recoveries	7		5		—		14		26
Net charge-offs	(19)		(47)		(1)		(29)		(96)
Ending balance	$	604	$	726	$	114	$	608	$	2,052

Changes in the allowance for credit losses for the nine months ended September 30, 2024 and 2023 were as follows:


	Commercial and Industrial		Real Estate
(Dollars in millions)			Commercial		Residential		Consumer		Total
Nine Months Ended September 30, 2024
Beginning balance	$	620	$	764	$	116	$	629	$	2,129
Provision for credit losses	365		(60)		(11)		176		470
Net charge-offs:
Charge-offs	(220)		(92)		(4)		(181)		(497)
Recoveries	27		27		4		44		102
Net charge-offs	(193)		(65)		—		(137)		(395)
Ending balance	$	792	$	639	$	105	$	668	$	2,204

Nine Months Ended September 30, 2023
Beginning balance	$	568	$	611	$	115	$	631	$	1,925

Provision for credit losses	73		287		(1)		61		420
Net charge-offs:
Charge-offs	(70)		(180)		(4)		(125)		(379)
Recoveries	33		8		4		41		86
Net charge-offs	(37)		(172)		—		(84)		(293)
Ending balance	$	604	$	726	$	114	$	608	$	2,052

Despite the allocation in the preceding tables, the allowance for credit losses is general in nature and is available to absorb losses from any loan or lease type. In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. The Company utilizes statistically developed models to project principal balances over the remaining contractual lives of the loan portfolios and to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators, including loan grade and borrower repayment performance, can inform the models, which have been statistically developed based on historical correlations of credit losses with prevailing economic metrics, including unemployment, GDP and real estate prices. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. At each of September 30, 2024 and December 31, 2023, the Company utilized a reasonable and supportable forecast period of two years. Subsequent to this forecast period the Company reverted, ratably over a one-year period, to historical loss experience to inform its estimate of losses for the remaining contractual life of each portfolio.

The Company also estimates losses attributable to specific troubled credits identified through both normal and targeted credit review processes. The amounts of specific loss components in the Company’s loan and lease portfolios are determined through a loan-by-loan analysis of larger balance commercial and industrial loans and commercial real estate loans that are in nonaccrual status. Such loss estimates are typically based on expected future cash flows, collateral values and other factors that may impact the borrower’s ability to pay. To the extent that those loans are collateral-dependent, they are evaluated based on the fair value of the loan’s collateral as estimated at or near the financial statement date. As the quality of a loan deteriorates to the point of designating the loan as “criticized,” the process of obtaining updated collateral valuation information is usually initiated, unless it is not considered warranted given factors such as the relative size of the loan, the characteristics of the collateral or the age of the last valuation. In those cases where current appraisals may not yet be available, prior appraisals are utilized with adjustments, as deemed necessary, for estimates of subsequent declines in values as determined by line of business and/or loan workout personnel. Those adjustments are reviewed and assessed for reasonableness by the Company’s credit risk personnel. Accordingly, for real estate collateral securing larger nonaccrual commercial and industrial loans and commercial real estate loans, estimated collateral values are based on current appraisals and estimates of value. For non-real estate loans, collateral is assigned a discounted estimated liquidation value and, depending on the nature of the collateral, is verified through field exams or other procedures. In assessing collateral, real estate and non-real estate values are reduced by an estimate of selling costs.

For residential real estate loans, including home equity loans and lines of credit, the excess of the loan balance over the net realizable value of the property collateralizing the loan is charged-off when the loan becomes 150 days delinquent. That charge-off is based on recent indications of value from external parties that are generally obtained shortly after a loan becomes nonaccrual. Loans to consumers that file for bankruptcy are generally charged-off to estimated net collateral value shortly after the Company is notified of such filings. When evaluating individual home equity loans and lines of credit for charge-off and for purposes of estimating losses in determining the allowance for credit losses, the Company gives consideration to the required repayment of any first lien positions related to collateral property. Other consumer loans are generally charged-off when the loans are 91 to 180 days past due, depending on whether the loan is collateralized and the status of repossession activities with respect to such collateral.

Changes in the amount of the allowance for credit losses reflect the outcome of the procedures described herein, including the impact of changes in macroeconomic forecasts as compared with previous forecasts, as well as the impact of portfolio concentrations, imprecision in economic forecasts, geopolitical conditions and other risk factors that might influence the loss estimation process.

The Company’s reserve for off-balance sheet credit exposures was not material at September 30, 2024 and December 31, 2023.

Information with respect to loans and leases that were considered nonaccrual at the beginning and end of the reporting period and the interest income recognized on such loans for the three-month and nine-month periods ended September 30, 2024 and 2023 follows:


	Amortized Cost with Allowance		Amortized Cost without Allowance		Total		Amortized Cost				Interest Income Recognized
(Dollars in millions)	September 30, 2024						June 30, 2024		January 1, 2024		Three Months Ended September 30, 2024		Nine Months Ended September 30, 2024
Commercial and industrial	$	610	$	200	$	810	$	805	$	670	$	5	$	14
Real estate:
Commercial	348		230		578		707		869		5		31
Residential builder and developer	2		—		2		2		3		1		1
Other commercial construction	21		63		84		77		171		—		3
Residential	113		106		219		205		215		4		10
Residential — limited documentation	22		35		57		55		55		—		1
Consumer:
Home equity lines and loans	39		43		82		79		81		2		4
Recreational finance	17		11		28		25		36		—		—
Automobile	8		3		11		11		14		—		—
Other	55		—		55		58		52		—		—
Total	$	1,235	$	691	$	1,926	$	2,024	$	2,166	$	17	$	64


(Dollars in millions)	September 30, 2023						June 30, 2023		January 1, 2023		Three Months Ended September 30, 2023		Nine Months Ended September 30, 2023
Commercial and industrial	$	366	$	300	$	666	$	607	$	504	$	7	$	13
Real estate:
Commercial	417		638		1,055		1,192		1,240		9		18
Residential builder and developer	3		—		3		1		1		—		—
Other commercial construction	4		132		136		146		125		—		2
Residential	91		150		241		239		272		3		12
Residential — limited documentation	22		40		62		67		78		1		1
Consumer:
Home equity lines and loans	48		30		78		77		85		2		6
Recreational finance	21		10		31		32		45		—		—
Automobile	12		4		16		22		40		—		—
Other	54		—		54		53		49		—		—
Total	$	1,038	$	1,304	$	2,342	$	2,436	$	2,439	$	22	$	52

Loan modifications

During the normal course of business, the Company modifies loans to maximize recovery efforts from borrowers experiencing financial difficulty. Such loan modifications typically include extensions of maturity dates but may also include other modified terms. Those modified loans may be considered nonaccrual if the Company does not expect to collect the contractual cash flows owed under the loan agreement. The tables that follow summarize the Company’s loan modification activities to borrowers experiencing financial difficulty for the three-month and nine-month periods ended September 30, 2024 and 2023:


	Amortized cost at September 30, 2024
(Dollars in millions)	Term Extension		Other (a)		Combination of Modification Types (b)		Total (c) (d)		Percent of Total Loan Class
Three Months Ended September 30, 2024
Commercial and industrial	$	92	$	23	$	2	$	117	.19	%
Real estate:
Commercial	163		1		—		164		.73
Residential builder and developer	2		—		—		2		.17
Other commercial construction	2		—		—		2		.03
Residential	34		4		4		42		.19
Residential — limited documentation	2		1		—		3		.41
Consumer:
Home equity lines and loans	—		—		—		—		—
Recreational finance	—		—		—		—		—
Automobile	—		—		—		—		—
Other	—		—		—		—		—
Total	$	295	$	29	$	6	$	330	.24	%

Nine Months Ended September 30, 2024
Commercial and industrial	$	190	$	78	$	2	$	270	.44	%
Real estate:
Commercial	420		1		4		425		1.90
Residential builder and developer	13		—		—		13		1.27
Other commercial construction	139		—		—		139		2.62
Residential	123		10		6		139		.63
Residential — limited documentation	5		2		—		7		.86
Consumer:
Home equity lines and loans	1		—		1		2		.04
Recreational finance	1		—		—		1		.01
Automobile	—		—		—		—		—
Other	—		—		—		—		—
Total	$	892	$	91	$	13	$	996	.73	%

_______________________________________________________________

(a)Predominantly payment deferrals.

(b)Predominantly term extensions combined with interest rate reductions.

(c)Includes approximately $33 million and $117 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and nine-month periods ended September 30, 2024, respectively.

(d)Excludes unfunded commitments to extend credit totaling $8 million and $43 million for the three-month and nine-month periods ended September 30, 2024, respectively.


	Amortized cost at September 30, 2023
(Dollars in millions)	Term Extension		Other (a)		Combination of Modification Types (b)		Total (c) (d)		Percent of Total Loan Class

Three Months Ended September 30, 2023
Commercial and industrial	$	40	$	—	$	1	$	41	.07	%
Real estate:
Commercial	272		—		6		278		1.07
Residential builder and developer	—		—		—		—		—
Other commercial construction	216		—		—		216		3.20
Residential	47		7		1		55		.24
Residential — limited documentation	1		1		—		2		.18
Consumer:
Home equity lines and loans	—		—		—		—		—
Recreational finance	—		—		—		—		—
Automobile	—		—		—		—		—
Other	—		—		—		—		—
Total	$	576	$	8	$	8	$	592	.45	%



Nine Months Ended September 30, 2023
Commercial and industrial	$	115	$	10	$	2	$	127	.23	%
Real estate:
Commercial	409		—		14		423		1.63
Residential builder and developer	70		1		—		71		6.42
Other commercial construction	432		—		8		440		6.54
Residential	104		17		4		125		.56
Residential — limited documentation	6		4		1		11		1.11
Consumer:
Home equity lines and loans	1		—		—		1		.02
Recreational finance	—		—		—		—		—
Automobile	—		—		—		—		—
Other	—		—		—		—		—
Total	$	1,137	$	32	$	29	$	1,198	.91	%

_______________________________________________________________

(a)Predominantly payment deferrals.

(b)Predominantly term extensions combined with interest rate reductions.

(c)Includes approximately $45 million and $92 million of loans guaranteed by government-related entities (predominantly first lien residential mortgage loans) for the three-month and nine-month periods ended September 30, 2023, respectively.

(d)Excludes unfunded commitments to extend credit totaling $62 million and $138 million for the three-month and nine-month periods ended September 30, 2023, respectively.

The financial effects of the modifications for the three-month and nine-month periods ended September 30, 2024 include an increase in the weighted-average remaining term for commercial and industrial loans of 1.3 years and 1.0 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 0.6 years and 0.8 years, respectively, and for residential real estate loans of 9.1 years and 9.9 years, respectively.

The financial effects of the modifications for the three-month and nine-month periods ended September 30, 2023 include an increase in the weighted-average remaining term for commercial and industrial loans of 1.3 years and 1.2 years, respectively, for commercial real estate loans, inclusive of residential builder and development loans and other commercial construction loans, of 1.3 years and 1.2 years, respectively, and for residential real estate loans of 11.5 years and 10.1 years, respectively.

Modified loans to borrowers experiencing financial difficulty are subject to the allowance for credit losses methodology described herein, including the use of models to inform credit loss estimates and, to the extent larger balance commercial and industrial loans and commercial real estate loans are in nonaccrual status, a loan-by-loan analysis of expected credit losses on those individual loans. The following table summarizes the payment status, at September 30, 2024, of loans that were modified during the twelve-month period ended September 30, 2024.


	Payment status at September 30, 2024 (amortized cost)
(Dollars in millions)	Current		30-89 Days Past Due		Past Due 90 Days or More (a)		Total
Twelve Months Ended September 30, 2024
Commercial and industrial	$	308	$	5	$	4	$	317
Real estate:
Commercial	422		84		9		515
Residential builder and developer	13		1		—		14
Other commercial construction	141		74		—		215
Residential (b)	93		45		37		175
Residential — limited documentation	6		2		—		8
Consumer:
Home equity lines and loans	2		—		—		2
Recreational finance	1		—		—		1
Automobile	—		—		—		—
Other	—		—		—		—
Total	$	986	$	211	$	50	$	1,247

_______________________________________________________________

(a) Predominantly loan modifications with term extensions.

(b)Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $39 million and as past due 90 days or more of $34 million.

The following table summarizes the payment status, at September 30, 2023, of loans that were modified during the nine-month period ended September 30, 2023.


	Payment status at September 30, 2023 (amortized cost)
(Dollars in millions)	Current		30-89 Days Past Due		Past Due 90 Days or More (a)		Total
Nine Months Ended September 30, 2023
Commercial and industrial	$	109	$	4	$	14	$	127
Real estate:
Commercial	406		17		—		423
Residential builder and developer	71		—		—		71
Other commercial construction	440		—		—		440
Residential (b)	79		34		12		125
Residential — limited documentation	8		1		2		11
Consumer:
Home equity lines and loans	1		—		—		1
Recreational finance	—		—		—		—
Automobile	—		—		—		—
Other	—		—		—		—
Total	$	1,114	$	56	$	28	$	1,198

___________________________________________________________

(a) Predominantly loan modifications with term extensions.

(b)Includes loans guaranteed by government-related entities classified as 30 to 89 days past due of $28 million and as past due 90 days or more of $11 million.

The amount of foreclosed property held by the Company, predominantly consisting of residential real estate, was $37 million and $39 million at September 30, 2024 and December 31, 2023, respectively. There were $166 million and $170 million at September 30, 2024 and December 31, 2023, respectively, of loans secured by residential real estate that were in the process of foreclosure. Of all loans in the process of foreclosure at September 30, 2024, approximately 35% were government guaranteed.

At September 30, 2024, approximately $19.9 billion of commercial and industrial loans, including leases, $15.5 billion of commercial real estate loans, $18.5 billion of one-to-four family residential real estate loans, $2.7 billion of home equity loans and lines of credit and $12.7 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the FRB of New York. At December 31, 2023, approximately $13.4 billion of commercial and industrial loans, including leases, $16.4 billion of commercial real estate loans, $18.8 billion of one-to-four family residential real estate loans, $2.6 billion of home equity loans and lines of credit and $11.0 billion of other consumer loans were pledged to secure outstanding borrowings and available lines of credit from the FHLB and the FRB of New York as described in note 5.