ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2025

The following table presents ACL activity by portfolio segment.


(dollar amounts in millions)	Commercial		Consumer		Total
Three months ended September 30, 2025
ALLL balance, beginning of period	$	1,548	$	783	$	2,331

Loan and lease charge-offs	(80)		(57)		(137)
Recoveries of loans and leases previously charged-off	44		18		62
Provision for loan and lease losses	56		62		118


ALLL balance, end of period	$	1,568	$	806	$	2,374
AULC balance, beginning of period	$	124	$	60	$	184

Provision for unfunded lending commitments	1		3		4


AULC balance, end of period	$	125	$	63	$	188
ACL balance, end of period	$	1,693	$	869	$	2,562
Three months ended September 30, 2024
ALLL balance, beginning of period	$	1,587	$	717	$	2,304

Loan and lease charge-offs	(74)		(55)		(129)
Recoveries of loans and leases previously charged-off	20		16		36
Provision (benefit) for loan and lease losses	(35)		59		24


ALLL balance, end of period	$	1,498	$	737	$	2,235
AULC balance, beginning of period	$	64	$	55	$	119

Provision for unfunded lending commitments	76		6		82


AULC balance, end of period	$	140	$	61	$	201
ACL balance, end of period	$	1,638	$	798	$	2,436
Nine months ended September 30, 2025
ALLL balance, beginning of period	$	1,484	$	760	$	2,244
Loan and lease charge-offs	(210)		(171)		(381)
Recoveries of loans and leases previously charged-off	99		55		154
Provision for loan and lease losses	195		162		357
ALLL balance, end of period	$	1,568	$	806	$	2,374
AULC balance, beginning of period	$	144	$	58	$	202
Provision (benefit) for unfunded lending commitments	(19)		5		(14)
AULC balance, end of period	$	125	$	63	$	188
ACL balance, end of period	$	1,693	$	869	$	2,562
Nine months ended September 30, 2024
ALLL balance, beginning of period	$	1,563	$	692	$	2,255
Loan and lease charge-offs	(243)		(159)		(402)
Recoveries of loans and leases previously charged-off	77		50		127
Provision for loan and lease losses	101		154		255
ALLL balance, end of period	$	1,498	$	737	$	2,235
AULC balance, beginning of period	$	66	$	79	$	145
Provision (benefit) for unfunded lending commitments	74		(18)		56
AULC balance, end of period	$	140	$	61	$	201
ACL balance, end of period	$	1,638	$	798	$	2,436

At September 30, 2025, the ACL was $2.6 billion, a $116 million increase compared to December 31, 2024. The increase in the ACL was driven by loan and lease growth, partially offset by a modest reduction in overall coverage ratios. The ACL coverage ratio at September 30, 2025 is reflective of the current macroeconomic forecast and changes in various risk profiles intended to capture uncertainty not addressed within the quantitative reserve.

The commercial ACL was $1.7 billion at September 30, 2025, a $65 million increase compared to December 31, 2024, with the increase primarily due to loan growth, partially offset by a modest reduction in overall coverage ratios. The consumer ACL was $869 million at September 30, 2025, a $51 million increase compared to December 31, 2024, with the increase primarily due to loan growth.

The baseline economic scenario used in the September 30, 2025 ACL determination assumes continued tariff uncertainty, but reflects marginal improved performance of the U.S. economy in the near term with minimal change in the overall outlook. In this scenario, the unemployment rate is expected to end 2025 at 4.4%, with peak unemployment of 4.8% through the end of 2026. The Federal Reserve restarted rate cuts in the third quarter of 2025 and is expected to continue with future rate cuts until reaching a federal funds rate of 3% by the end of 2026. The inflation outlook deteriorates slightly as the impacts of tariffs and other trade policies are expected to cascade through the economy, with near-term inflation expected to rise further above the Federal Reserve’s 2% target until the rate begins to decline in the second half of 2026 but still remaining above target. GDP growth, while positive, has slowed to a current level of approximately 1% and is forecasted to remain below 2% through the end of 2026.

The economic scenarios used included elevated levels of economic uncertainty, such as the impact of specific challenges in the commercial real estate industry, recent inflation levels, the impacts of U.S. trade policies, the U.S. labor market, the expected path of interest rate changes by the Federal Reserve, and the impact of significant conflicts on-going around the world. Given the uncertainty associated with key economic scenario assumptions, the September 30, 2025 ACL included a general reserve that consists of various risk profile components to address uncertainty not measured within the quantitative transaction reserve.