XML 25 R12.htm IDEA: XBRL DOCUMENT v3.24.3
Outstanding Loans and Leases and Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
Outstanding Loans and Leases and Allowance for Credit Losses Outstanding Loans and Leases and Allowance for Credit Losses
The following tables present total outstanding loans and leases and an aging analysis for the Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2024 and December 31, 2023.
30-59 Days
 Past Due (1)
60-89 Days
 Past Due (1)
90 Days or
More
Past Due (1)
Total Past
Due 30 Days
or More
Total
 Current or
 Less Than
 30 Days
 Past Due (1)
Loans
 Accounted
 for Under
 the Fair
 Value
 Option		Total
Outstandings
(Dollars in millions)September 30, 2024
Consumer real estate      
Residential mortgage$1,206 $262 $762 $2,230 $225,612 $227,842 
Home equity82 33 127 242 25,241 25,483 
Credit card and other consumer
Credit card717 540 1,306 2,563 98,278 100,841 
Direct/Indirect consumer (2)
298 103 97 498 105,197 105,695 
Other consumer— — — — 161 161 
Total consumer2,303 938 2,292 5,533 454,489 460,022 
Consumer loans accounted for under the fair value option (3)
$229 229 
Total consumer loans and leases2,303 938 2,292 5,533 454,489 229 460,251 
Commercial
U.S. commercial415 330 461 1,206 378,357 379,563 
Non-U.S. commercial19 23 85 127 127,611 127,738 
Commercial real estate (4)
511 138 1,209 1,858 66,562 68,420 
Commercial lease financing26 20 17 63 14,929 14,992 
U.S. small business commercial186 96 186 468 20,425 20,893 
Total commercial1,157 607 1,958 3,722 607,884 611,606 
Commercial loans accounted for under the fair value option (3)
3,943 3,943 
Total commercial loans and leases1,157 607 1,958 3,722 607,884 3,943 615,549 
Total loans and leases (5)
$3,460 $1,545 $4,250 $9,255 $1,062,373 $4,172 $1,075,800 
Percentage of outstandings 0.32 %0.14 %0.40 %0.86 %98.75 %0.39 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $179 million and nonperforming loans of $181 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $68 million and nonperforming loans of $93 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $215 million and nonperforming loans of $674 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $52 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $54.9 billion, U.S. securities-based lending loans of $47.3 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $63 million and home equity loans of $166 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.7 billion and non-U.S. commercial loans of $1.3 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $61.8 billion and non-U.S. commercial real estate loans of $6.6 billion.
(5)Total outstandings includes loans and leases pledged as collateral of $27.7 billion. The Corporation also pledged $302.5 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
30-59 Days
Past Due (1)
60-89 Days
 Past Due (1)
90 Days or
More
Past Due (1)
Total Past
Due 30 Days
or More
Total
Current or
Less Than
30 Days
Past Due (1)
Loans
Accounted
for Under
the Fair
Value Option		Total Outstandings
(Dollars in millions)December 31, 2023
Consumer real estate      
Residential mortgage$1,177 $302 $829 $2,308 $226,095 $228,403 
Home equity90 38 161 289 25,238 25,527 
Credit card and other consumer     
Credit card680 515 1,224 2,419 99,781  102,200 
Direct/Indirect consumer (2)
306 99 91 496 102,972  103,468 
Other consumer — — — — 124  124 
Total consumer2,253 954 2,305 5,512 454,210 459,722 
Consumer loans accounted for under the fair value option (3)
$243 243 
Total consumer loans and leases2,253 954 2,305 5,512 454,210 243 459,965 
Commercial       
U.S. commercial477 96 225 798 358,133  358,931 
Non-U.S. commercial86 21 64 171 124,410  124,581 
Commercial real estate (4)
247 133 505 885 71,993  72,878 
Commercial lease financing44 8 24 76 14,778  14,854 
U.S. small business commercial166 89 184 439 18,758  19,197 
Total commercial1,020 347 1,002 2,369 588,072  590,441 
Commercial loans accounted for under the fair value option (3)
3,326 3,326 
Total commercial loans and leases
1,020 347 1,002 2,369 588,072 3,326 593,767 
Total loans and leases (5)
$3,273 $1,301 $3,307 $7,881 $1,042,282 $3,569 $1,053,732 
Percentage of outstandings 0.31 %0.12 %0.31 %0.75 %98.91 %0.34 %100.00 %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $198 million and nonperforming loans of $150 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $77 million and nonperforming loans of $102 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $252 million and nonperforming loans of $738 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $39 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $53.9 billion, U.S. securities-based lending loans of $46.0 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $66 million and home equity loans of $177 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.2 billion and non-U.S. commercial loans of $1.2 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $66.8 billion and non-U.S. commercial real estate loans of $6.1 billion.
(5)Total outstandings includes loans and leases pledged as collateral of $33.7 billion. The Corporation also pledged $246.0 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $8.2 billion and $8.7 billion at September 30, 2024 and December 31, 2023, providing full credit protection on residential mortgage loans that become severely delinquent. All of these loans are individually insured, and therefore the Corporation does not record an allowance for credit losses related to these loans.
Nonperforming Loans and Leases
Nonperforming loans were $5.6 billion and $5.5 billion at September 30, 2024 and December 31, 2023. Commercial nonperforming loans were $3.0 billion and $2.8 billion at September 30, 2024 and December 31, 2023 primarily driven by commercial real estate. Consumer nonperforming loans were
$2.7 billion at both September 30, 2024 and December 31, 2023, primarily comprised of residential mortgage.
The following table presents the Corporation’s nonperforming loans and leases and loans accruing past due 90 days or more at September 30, 2024 and December 31, 2023. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Credit Quality
Nonperforming Loans
and Leases		Accruing Past Due
90 Days or More
(Dollars in millions)September 30 2024December 31 2023September 30 2024December 31 2023
Residential mortgage (1)
$2,089 $2,114 $215 $252 
With no related allowance (2)
1,930 1,974 — — 
Home equity (1)
413 450 — — 
With no related allowance (2)
346 375 — — 
Credit Card            n/a            n/a1,306 1,224 
Direct/indirect consumer175 148 1 2 
Total consumer2,677 2,712 1,522 1,478 
U.S. commercial699 636 219 51 
Non-U.S. commercial85 175 12 4 
Commercial real estate2,124 1,927 206 32 
Commercial lease financing18 19 5 7 
U.S. small business commercial26 16 183 184 
Total commercial2,952 2,773 625 278 
Total nonperforming loans$5,629 $5,485 $2,147 $1,756 
Percentage of outstanding loans and leases
0.53 %0.52 %0.20 %0.17 %
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2024 and December 31, 2023 residential mortgage included $114 million and $156 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $101 million and $96 million of loans on which interest was still accruing.
(2)Primarily relates to loans for which the estimated fair value of the underlying collateral less any costs to sell is greater than the amortized cost of the loans as of the reporting date.
n/a = not applicable
Credit Quality Indicators
The Corporation monitors credit quality within its Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments based on primary credit quality indicators. For more information on the portfolio segments, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. Within the Consumer Real Estate portfolio segment, the primary credit quality indicators are refreshed loan-to-value (LTV) and refreshed Fair Isaac Corporation (FICO) score. Refreshed LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan, refreshed quarterly. Home equity loans are evaluated using combined loan-to-value (CLTV), which measures the carrying value of the Corporation’s loan and available line of credit combined with any outstanding senior liens against the property as a percentage of the value of the property securing the loan, refreshed quarterly. FICO score measures the creditworthiness of the borrower based on the financial obligations of the borrower and the borrower’s credit history. FICO scores are typically refreshed quarterly or more frequently. Certain borrowers (e.g., borrowers that have had debts discharged in a bankruptcy proceeding) may not have their FICO scores updated.
FICO scores are also a primary credit quality indicator for the Credit Card and Other Consumer portfolio segment and the business card portfolio within U.S. small business commercial. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. The term reservable criticized refers to those commercial loans that are internally classified or listed by the Corporation as Special Mention, Substandard or Doubtful, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not considered reservable criticized. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans.
The following tables present certain credit quality indicators and gross charge-offs for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at September 30, 2024.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of September 30,
 2024		20242023202220212020Prior
Residential Mortgage
Refreshed LTV
   
Less than or equal to 90 percent$215,050 $12,861 $13,670 $37,299 $72,985 $33,129 $45,106 
Greater than 90 percent but less than or equal to 100 percent
1,752 553 528 480 123 23 45 
Greater than 100 percent
725 313 181 137 53 17 24 
Fully-insured loans
10,315 440 201 312 3,220 2,634 3,508 
Total Residential Mortgage$227,842 $14,167 $14,580 $38,228 $76,381 $35,803 $48,683 
Residential Mortgage
Refreshed FICO score
Less than 620$2,500 $125 $162 $470 $607 $418 $718 
Greater than or equal to 620 and less than 680
4,657 222 364 894 1,175 704 1,298 
Greater than or equal to 680 and less than 740
22,362 1,443 1,644 4,072 6,341 3,494 5,368 
Greater than or equal to 740
188,008 11,937 12,209 32,480 65,038 28,553 37,791 
Fully-insured loans
10,315 440 201 312 3,220 2,634 3,508 
Total Residential Mortgage$227,842 $14,167 $14,580 $38,228 $76,381 $35,803 $48,683 
Gross charge-offs for the nine months ended September 30, 2024$18 $— $2 $4 $2 $1 $9 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving LoansRevolving Loans Converted to Term Loans
(Dollars in millions)September 30, 2024
Home Equity
Refreshed LTV
   
Less than or equal to 90 percent$25,399 $806 $21,078 $3,515 
Greater than 90 percent but less than or equal to 100 percent
40 3 33 4 
Greater than 100 percent
44 1 32 11 
Total Home Equity$25,483 $810 $21,143 $3,530 
Home Equity
Refreshed FICO score
Less than 620$633 $71 $299 $263 
Greater than or equal to 620 and less than 680
1,092 86 661 345 
Greater than or equal to 680 and less than 740
4,290 168 3,300 822 
Greater than or equal to 740
19,468 485 16,883 2,100 
Total Home Equity$25,483 $810 $21,143 $3,530 
Gross charge-offs for the nine months ended September 30, 2024$16 $6 $5 $5 
(1)Includes reverse mortgages of $510 million and home equity loans of $300 million, which are no longer originated.
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination YearCredit Card
(Dollars in millions)Total Direct/
Indirect as of September 30,
2024		Revolving Loans20242023202220212020PriorTotal Credit Card as of September 30,
2024		Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score  
Less than 620$1,415 $11 $163 $424 $439 $265 $60 $53 $5,735 $5,384 $351 
Greater than or equal to 620 and less than 6802,336 9 522 757 582 314 79 73 11,452 11,133 319 
Greater than or equal to 680 and less than 740
8,035 44 2,284 2,436 1,800 970 273 228 34,390 34,106 284 
Greater than or equal to 74043,274 68 14,338 12,466 8,701 4,664 1,613 1,424 49,264 49,201 63 
Other internal credit
   metrics (2,3)
50,635 50,133 114 53 98 64 36 137 — — — 
Total credit card and other
   consumer		$105,695 $50,265 $17,421 $16,136 $11,620 $6,277 $2,061 $1,915 $100,841 $99,824 $1,017 
Gross charge-offs for the nine
   months ended September 30, 2024		$292 $4 $20 $107 $86 $40 $10 $25 $3,235 $3,103 $132 
(1)Represents loans that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $50.1 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at September 30, 2024.
Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of
September 30,
2024		20242023202220212020PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$366,116 $32,114 $36,286 $36,234 $22,318 $11,309 $35,902 $191,953 
Reservable criticized13,447 86 814 1,007 886 388 2,044 8,222 
Total U.S. Commercial
$379,563 $32,200 $37,100 $37,241 $23,204 $11,697 $37,946 $200,175 
Gross charge-offs for the nine months ended
   September 30, 2024		$327 $2 $111 $64 $14 $4 $16 $116 
Non-U.S. Commercial
Risk ratings
Pass rated$125,663 $13,329 $16,902 $13,303 $12,712 $1,450 $7,643 $60,324 
Reservable criticized2,075 1 155 125 293 12 91 1,398 
Total Non-U.S. Commercial
$127,738 $13,330 $17,057 $13,428 $13,005 $1,462 $7,734 $61,722 
Gross charge-offs for the nine months ended
   September 30, 2024		$61 $— $41 $20 $— $— $— $— 
Commercial Real Estate
Risk ratings
Pass rated$58,554 $4,232 $4,891 $12,653 $10,197 $3,054 $13,604 $9,923 
Reservable criticized9,866 27 180 2,421 2,229 644 3,953 412 
Total Commercial Real Estate
$68,420 $4,259 $5,071 $15,074 $12,426 $3,698 $17,557 $10,335 
Gross charge-offs for the nine months ended
   September 30, 2024		$762 $— $— $57 $83 $62 $531 $29 
Commercial Lease Financing
Risk ratings
Pass rated$14,748 $2,596 $3,823 $2,590 $2,072 $966 $2,701 $— 
Reservable criticized244 7 53 61 38 23 62 — 
Total Commercial Lease Financing
$14,992 $2,603 $3,876 $2,651 $2,110 $989 $2,763 $— 
Gross charge-offs for the nine months ended
   September 30, 2024		$2 $— $— $— $2 $— $— $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$9,562 $1,379 $1,920 $1,698 $1,354 $665 $2,108 $438 
Reservable criticized429 4 57 99 120 25 120 4 
Total U.S. Small Business Commercial
$9,991 $1,383 $1,977 $1,797 $1,474 $690 $2,228 $442 
Gross charge-offs for the nine months ended
   September 30, 2024		$22 $— $— $1 $— $5 $4 $12 
Total$600,704 $53,775 $65,081 $70,191 $52,219 $18,536 $68,228 $272,674 
Gross charge-offs for the nine months ended
   September 30, 2024		$1,174 $2 $152 $142 $99 $71 $551 $157 
(1)Excludes $3.9 billion of loans accounted for under the fair value option at September 30, 2024.
(2)Excludes U.S. Small Business Card loans of $10.9 billion. Refreshed FICO scores for this portfolio are $667 million for less than 620; $1.2 billion for greater than or equal to 620 and less than 680; $3.0 billion for greater than or equal to 680 and less than 740; and $6.1 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $361 million.
The following tables present certain credit quality indicators for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at December 31, 2023.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)Total as of
 December 31,
 2023		20232022202120202019Prior
Residential Mortgage
Refreshed LTV
Less than or equal to 90 percent$214,661 $15,224 $38,225 $76,229 $35,072 $17,432 $32,479 
Greater than 90 percent but less than or equal to 100 percent
1,994 698 911 286 53 25 21 
Greater than 100 percent
785 264 342 100 31 14 34 
Fully-insured loans
10,963 540 350 3,415 2,834 847 2,977 
Total Residential Mortgage$228,403 $16,726 $39,828 $80,030 $37,990 $18,318 $35,511 
Residential Mortgage
Refreshed FICO score
Less than 620$2,335 $115 $471 $589 $402 $136 $622 
Greater than or equal to 620 and less than 680
4,671 359 919 1,235 777 296 1,085 
Greater than or equal to 680 and less than 740
23,357 1,934 4,652 6,988 3,742 1,836 4,205 
Greater than or equal to 740187,077 13,778 33,436 67,803 30,235 15,203 26,622 
Fully-insured loans
10,963 540 350 3,415 2,834 847 2,977 
Total Residential Mortgage$228,403 $16,726 $39,828 $80,030 $37,990 $18,318 $35,511 
Gross charge-offs for the year ended December 31, 2023$67 $— $7 $12 $6 $2 $40 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving LoansRevolving Loans Converted to Term Loans
(Dollars in millions)December 31, 2023
Home Equity
Refreshed LTV
Less than or equal to 90 percent$25,378 $1,051 $20,380 $3,947 
Greater than 90 percent but less than or equal to 100 percent
61 17 35 9 
Greater than 100 percent
88 35 36 17 
Total Home Equity$25,527 $1,103 $20,451 $3,973 
Home Equity
Refreshed FICO score
Less than 620$654 $123 $253 $278 
Greater than or equal to 620 and less than 680
1,107 118 589 400 
Greater than or equal to 680 and less than 740
4,340 240 3,156 944 
Greater than or equal to 740
19,426 622 16,453 2,351 
Total Home Equity$25,527 $1,103 $20,451 $3,973 
Gross charge-offs for the year ended December 31, 2023$36 $4 $21 $11 
(1)Includes reverse mortgages of $763 million and home equity loans of $340 million, which are no longer originated.
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination YearCredit Card
(Dollars in millions)Total Direct/Indirect as of December 31, 2023Revolving Loans20232022202120202019PriorTotal Credit Card as of December 31, 2023Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score
Less than 620$1,246 $11 $292 $428 $336 $85 $55 $39 $5,338 $5,030 $308 
Greater than or equal to 620 and less than 680
2,506 11 937 799 501 121 73 64 11,623 11,345 278 
Greater than or equal to 680 and less than 740
8,629 48 3,451 2,582 1,641 462 244 201 34,777 34,538 239 
Greater than or equal to 74041,656 74 16,761 11,802 7,643 2,707 1,417 1,252 50,462 50,410 52 
Other internal credit
   metrics (2, 3)
49,431 48,764 106 183 110 53 57 158 — — — 
Total credit card and other
   consumer		$103,468 $48,908 $21,547 $15,794 $10,231 $3,428 $1,846 $1,714 $102,200 $101,323 $877 
Gross charge-offs for the year
   ended December 31, 2023		$233 $5 $32 $95 $53 $15 $10 $23 $3,133 $3,013 $120 
(1)Represents loans that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $48.8 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at December 31, 2023.
Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)Total as of December 31, 202320232022202120202019PriorRevolving Loans
U.S. Commercial
Risk ratings    
Pass rated$347,563 $41,842 $43,290 $27,738 $13,495 $11,772 $29,923 $179,503 
Reservable criticized11,368 278 1,316 708 363 537 1,342 6,824 
Total U.S. Commercial
$358,931 $42,120 $44,606 $28,446 $13,858 $12,309 $31,265 $186,327 
Gross charge-offs for the year ended
   December 31, 2023		$191 $5 $38 $29 $4 $2 $27 $86 
Non-U.S. Commercial
Risk ratings
Pass rated$122,931 $17,053 $15,810 $15,256 $2,405 $2,950 $5,485 $63,972 
Reservable criticized1,650 50 184 294 90 158 74 800 
Total Non-U.S. Commercial
$124,581 $17,103 $15,994 $15,550 $2,495 $3,108 $5,559 $64,772 
Gross charge-offs for the year ended
   December 31, 2023		$37 $— $— $8 $7 $1 $— $21 
Commercial Real Estate
Risk ratings
Pass rated$64,150 $4,877 $16,147 $11,810 $4,026 $7,286 $10,127 $9,877 
Reservable criticized8,728 134 749 1,728 782 2,132 2,794 409 
Total Commercial Real Estate
$72,878 $5,011 $16,896 $13,538 $4,808 $9,418 $12,921 $10,286 
Gross charge-offs for the year ended
   December 31, 2023		$254 $2 $— $4 $— $59 $189 $— 
Commercial Lease Financing
Risk ratings
Pass rated$14,688 $4,188 $3,077 $2,373 $1,349 $1,174 $2,527 $— 
Reservable criticized166 9 22 46 16 32 41 — 
Total Commercial Lease Financing
$14,854 $4,197 $3,099 $2,419 $1,365 $1,206 $2,568 $— 
Gross charge-offs for the year ended
   December 31, 2023		$2 $— $— $1 $1 $— $— $— 
U.S. Small Business Commercial (2)
Risk ratings
Pass rated$9,031 $1,886 $1,830 $1,550 $836 $721 $1,780 $428 
Reservable criticized384 6 64 95 40 63 113 3 
Total U.S. Small Business Commercial
$9,415 $1,892 $1,894 $1,645 $876 $784 $1,893 $431 
Gross charge-offs for the year ended
   December 31, 2023		$43 $1 $2 $2 $19 $3 $4 $12 
 Total $580,659 $70,323 $82,489 $61,598 $23,402 $26,825 $54,206 $261,816 
Gross charge-offs for the year ended
   December 31, 2023		$527 $8 $40 $44 $31 $65 $220 $119 
(1) Excludes $3.3 billion of loans accounted for under the fair value option at December 31, 2023.
(2) Excludes U.S. Small Business Card loans of $9.8 billion. Refreshed FICO scores for this portfolio are $530 million for less than 620; $1.1 billion for greater than or equal to 620 and less than 680; $2.7 billion for greater than or equal to 680 and less than 740; and $5.5 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $317 million.
During the nine months ended September 30, 2024, commercial reservable criticized utilized exposure increased to $27.4 billion at September 30, 2024 from $23.3 billion (to 4.25 percent from 3.74 percent of total commercial reservable utilized exposure) at December 31, 2023, primarily driven by U.S. commercial and commercial real estate.
Loan Modifications to Borrowers in Financial Difficulty
As part of its credit risk management, the Corporation may modify a loan agreement with a borrower experiencing financial difficulties through a refinancing or restructuring of the borrower’s loan agreement (modification programs). Effective January 1, 2023, the Corporation adopted the new accounting standard on loan modifications. Accordingly, September 30, 2024 balances presented in payment status tables represent loans that were modified over the last 12 months, and September 30, 2023 balances presented in payment status tables represent loans that were modified during the first nine months of 2023.
Consumer Real Estate
The following modification programs are offered for consumer real estate loans to borrowers experiencing financial difficulties.
Forbearance and Other Payment Plans: Forbearance plans generally consist of the Corporation suspending the borrower’s payments for a defined period, with those payments then due over a defined period of time or at the conclusion of the forbearance period. The aging status of a loan is generally
frozen when it enters into a forbearance plan. If a borrower is unable to fulfill their obligations under the forbearance plans, they may be offered a trial offer or permanent modification.
Trial Offer and Permanent Modifications: Trial offer for modification plans generally consist of the Corporation offering a borrower modified loan terms that reduce their contractual payments temporarily over a three-to-four-month trial period. If the customer successfully makes the modified payments during the trial period and formally accepts the modified terms, the modified loan terms become permanent. Some borrowers may enter into permanent modifications without a trial period. In a permanent modification, the borrower’s payment terms are typically modified in more than one manner, but generally include a term extension and an interest rate reduction. At times, the permanent modification may also include principal forgiveness and/or a deferral of past due principal and interest amounts to the end of the loan term. The combinations utilized are based on modifying the terms that give the borrower an improved ability to meet the contractual obligations. The term extensions granted for residential mortgage and home equity permanent modifications vary widely and can be up to 30 years, but most are in the range of 1 to 20 years. Principal forgiveness and payment deferrals were insignificant during the three and nine months ended September 30, 2024 and 2023.
The table below provides the ending amortized cost of the Corporation’s modified consumer real estate loans for the three and nine months ended September 30, 2024 and 2023.
Consumer Real Estate - Modifications to Borrowers in Financial Difficulty
Forbearance and Other Payment PlansPermanent ModificationTotalAs a % of Financing ReceivablesForbearance and Other Payment PlansPermanent ModificationTotalAs a % of Financing Receivables
(Dollars in millions)
Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
Residential Loans$4 $48 $52 0.02 %$41 $161 $202 0.09 %
Home Equity— 8 8 0.03 %— 26 26 0.10 %
Total$4 $56 $60 0.02 %$41 $187 $228 0.09 %
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
Residential Loans$270 $47 $317 0.14 %$437 $128 $565 0.25 %
Home Equity39 9 48 0.19 64 26 90 0.35 
Total$309 $56 $365 0.14 $501 $154 $655 0.26 
The table below presents the financial effect of modified consumer real estate loans.
Financial Effect of Modified Consumer Real Estate Loans
Three Months Ended September 30Nine Months Ended September 30
2024202320242023
Forbearance and Other Payment Plans
Weighted-average duration
Residential Mortgage4 months4 months7 months8 months
Home Equity
n/a
4 months
n/a
9 months
Permanent Modifications
Weighted-average Term Extension
Residential Mortgage11.0 years12.1 years9.8 years9.9 years
Home Equity17.7 years17.2 years17.5 years16.2 years
Weighted-average Interest Rate Reduction
Residential Mortgage1.23 %1.31 %1.29 %1.50 %
Home Equity2.77 %2.69 %2.66 %3.11 %
n/a = not applicable
For consumer real estate borrowers in financial difficulty that received a forbearance, trial or permanent modification, there were no commitments to lend additional funds at September 30, 2024 and 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023,
defaults of residential and home equity loans that had been modified within 12 months were insignificant. The table below provides aging information as of September 30, 2024 for consumer real estate loans that were modified over the last 12 months and as of September 30, 2023 for consumer real estate loans that were modified during the first nine months of 2023.
Consumer Real Estate - Payment Status of Modifications to Borrowers in Financial Difficulty
Current
30–89 Days
Past Due
90+ Days
Past Due
Total
(Dollars in millions)September 30, 2024
Residential mortgage$153 $52 $47 $252 
Home equity29 2 1 32 
Total$182 $54 $48 $284 
September 30, 2023
Residential mortgage$295 $114 $156 $565 
Home equity51 11 28 90 
Total$346 $125 $184 $655 
Consumer real estate foreclosed properties totaled $60 million and $83 million at September 30, 2024 and December 31, 2023. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at September 30, 2024 and December 31, 2023, was $482 million and $633 million. During the nine months ended September 30, 2024 and 2023, the Corporation reclassified $73 million and $86 million of consumer real estate loans to foreclosed properties or, for properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans), to other assets. The reclassifications represent non-cash investing activities and, accordingly, are not reflected in the Consolidated Statement of Cash Flows.
Credit Card and Other Consumer
Credit card and other consumer loans are primarily modified by placing the customer on a fixed payment plan with a significantly reduced fixed interest rate, with terms ranging from 6 months to 72 months, most of which had a 60-month term at September 30, 2024. In certain circumstances, the Corporation will forgive a portion of the outstanding balance if the borrower makes payments up to a set amount. The Corporation makes modifications directly with borrowers for loans held by the Corporation (internal programs) as well as through third-party renegotiation agencies that provide solutions to customers’
entire unsecured debt structures (external programs). The September 30, 2024 amortized cost of credit card and other consumer loans that were modified through these programs during the three and nine months ended September 30, 2024 was $202 million and $534 million compared to $196 million and $455 million for the same periods in 2023. These modifications represented 0.10 percent and 0.26 percent of outstanding credit card and other consumer loans for the three and nine months ended September 30, 2024 compared to 0.10 percent and 0.22 percent for the same periods in 2023. During the three and nine months ended September 30, 2024, the financial effect of modifications resulted in a weighted-average interest rate reduction of 19.13 percent and 19.29 percent compared to 19.40 percent and 19.02 percent for the same periods in 2023, and principal forgiveness of $30 million and $88 million compared to $16 million and $41 million for the same periods in 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of credit card and other consumer loans that had been modified within 12 months were insignificant. At September 30, 2024, modified credit card and other consumer loans to borrowers experiencing financial difficulty over the last 12 months totaled $665 million, of which $562 million were current, $58 million were 30-89 days past due, and $45 million
were greater than 90 days past due. At September 30, 2023, modified credit card and other consumer loans to borrowers experiencing financial difficulty totaled $455 million, of which $370 million were current, $47 million were 30-89 days past due, and $38 million were greater than 90 days past due.
Commercial Loans
Modifications of loans to commercial borrowers experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing borrowers with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique, reflects the borrower’s
individual circumstances and is designed to benefit the borrower while mitigating the Corporation’s risk exposure. Commercial modifications are primarily term extensions and payment forbearances. Payment forbearances involve the Corporation forbearing its contractual right to collect certain payments or payment in full (maturity forbearance) for a defined period of time. Reductions in interest rates and principal forgiveness occur infrequently for commercial borrowers. Principal forgiveness may occur in connection with foreclosure, short sales or other settlement agreements, leading to termination or sale of the loan. The table below provides the ending amortized cost of commercial loans modified during the three and nine months ended September 30, 2024 and 2023.
Commercial Loans - Modifications to Borrowers in Financial Difficulty
Term ExtensionForbearancesInterest Rate ReductionTotalAs a % of Financing ReceivablesTerm ExtensionForbearancesInterest Rate
Reduction		TotalAs a % of Financing Receivables
(Dollars in millions)Three Months Ended September 30, 2024Nine Months Ended September 30, 2024
U.S. commercial$379$47$—$4260.11 %$1,114$52$—$1,1660.31 %
Non-U.S. commercial————— 13——130.01 
Commercial real estate874234—1,1081.62 1,238487361,7612.57 
Total$1,253$281$—$1,5340.27 $2,365$539$36$2,9400.51 
Three Months Ended September 30, 2023Nine Months Ended September 30, 2023
U.S. commercial$431$24$—$4550.13 %$768$33$—$8010.22 %
Non-U.S. commercial130—241540.12 162—241860.15 
Commercial real estate599219—8181.12 1,069287—1,3561.85 
Total$1,160$243$24$1,4270.26 $1,999$320$24$2,3430.42 
Term extensions granted increased the weighted-average life of the impacted loans by 2.1 years and 1.8 years for the three and nine months ended September 30, 2024 compared to 1.8 years for the same periods in 2023. The weighted-average duration of loan payments deferred under the Corporation’s commercial loan forbearance program was 10 months and 11 months for the three and nine months ended September 30, 2024 compared to 8 months and 9 months for the same periods in 2023. The deferral period for loan payments can vary, but are mostly in the range of 8 months to 24 months. Modifications of loans to troubled borrowers for Commercial Lease Financing and U.S. Small Business Commercial were not significant during the three and nine months ended September 30, 2024 and 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of commercial loans that had been modified within 12 months were insignificant. The table below provides aging information as of September 30, 2024 for commercial loans that were modified over the last 12 months and as of September 30, 2023 for commercial loans that were modified during the nine months ended September 30, 2023.
Commercial - Payment Status of Modified Loans to Borrowers in Financial Difficulty
Current
30–89 Days
Past Due
90+ Days
Past Due
Total
(Dollars in millions)September 30, 2024
U.S. Commercial$1,193 $58 $31 $1,282
Non-U.S. Commercial36 — — 36
Commercial Real Estate1,667 3 303 1,973
Total$2,896 $61 $334 $3,291
September 30, 2023
U.S. Commercial$766 $21 $14 $801
Non-U.S. Commercial186 — — 186
Commercial Real Estate1,083 60 213 1,356
Total$2,035 $81 $227 $2,343
For the nine months ended September 30, 2024 and 2023, the Corporation had commitments to lend $1.2 billion and $871 million to commercial borrowers experiencing financial difficulty whose loans were modified during the period.
Loans Held-for-sale
The Corporation had LHFS of $10.4 billion and $6.0 billion at September 30, 2024 and December 31, 2023. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $21.7 billion and $10.8 billion for the nine months ended September 30, 2024 and 2023. Cash used for originations and purchases of LHFS totaled $26.3 billion and $11.5 billion for the nine months ended September 30, 2024 and 2023. Also included were non-cash net transfers into LHFS of $0 and $634 million during the nine months ended September 30, 2024 and 2023.
Accrued Interest Receivable
Accrued interest receivable for loans and leases and loans held-for-sale was $4.4 billion and $4.5 billion at September 30, 2024 and December 31, 2023 and is reported in customer and other receivables on the Consolidated Balance Sheet.
Outstanding credit card loan balances include unpaid principal, interest and fees. Credit card loans are not classified as nonperforming but are charged off no later than the end of the month in which the account becomes 180 days past due, within 60 days after receipt of notification of death or bankruptcy, or upon confirmation of fraud. During the three and nine months ended September 30, 2024, the Corporation reversed $213 million and $633 million of interest and fee income against the income statement line item in which it was originally recorded upon charge-off of the principal balance of the loan compared to $152 million and $409 million for the same periods in 2023.
For the outstanding residential mortgage, home equity, direct/indirect consumer and commercial loan balances classified as nonperforming during the three and nine months ended September 30, 2024 and 2023, interest and fee income reversed at the time the loans were classified as nonperforming was not significant. For more information on the Corporation's nonperforming loan policies, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K
Allowance for Credit Losses
The allowance for credit losses is estimated using quantitative and qualitative methods that consider a variety of factors, such as historical loss experience, the current credit quality of the portfolio and an economic outlook over the life of the loan. Qualitative reserves cover losses that are expected but, in the Corporation's assessment, may not adequately be reflected in the quantitative methods or the economic assumptions. The Corporation incorporates forward-looking information through the use of several macroeconomic scenarios in determining the weighted economic outlook over the forecasted life of the assets. These scenarios include key macroeconomic variables such as gross domestic product, unemployment rate, real
estate prices and corporate bond spreads. The scenarios that are chosen each quarter and the weighting given to each scenario depend on a variety of factors including recent economic events, leading economic indicators, internal and third-party economist views, and industry trends. For more information on the Corporation's credit loss accounting policies including the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The September 30, 2024 estimate for allowance for credit losses was based on various economic scenarios, including a baseline scenario derived from consensus estimates, an adverse scenario reflecting an extended moderate recession, a downside scenario reflecting continued inflation and interest rates with minimal rate cuts, a tail risk scenario similar to the severely adverse scenario used in stress testing and an upside scenario that considers the potential for improvement above the baseline scenario. The overall weighted economic outlook of the above scenarios has improved compared to the weighted economic outlook estimated as of December 31, 2023. The weighted economic outlook assumes that the U.S. average unemployment rate will be five percent by the fourth quarter of 2025 and will decrease to just below five percent by the fourth quarter of 2026. The weighted economic outlook assumes steady growth with U.S. real gross domestic product forecasted to grow at 1.4 percent and 1.9 percent year-over-year in the fourth quarters of 2025 and 2026.
The allowance for credit losses decreased $200 million from December 31, 2023 to $14.4 billion at September 30, 2024. The change in the allowance for credit losses was comprised of a net decrease of $91 million in the allowance for loan and lease losses and a decrease of $109 million in the reserve for unfunded lending commitments. The decline in the allowance for credit losses was attributed to decreases in the commercial portfolio of $249 million and the consumer real estate portfolio of $101 million, partially offset by an increase in the credit card and other consumer portfolios of $150 million. The provision for credit losses increased $308 million to $1.5 billion, and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio.
Outstanding loans and leases excluding loans accounted for under the fair value option increased $21.5 billion during the nine months ended September 30, 2024 primarily driven by commercial, which increased $21.2 billion due to broad-based growth.
The changes in the allowance for credit losses, including net charge-offs and provision for loan and lease losses, are detailed in the following table.
Consumer
Real Estate		Credit Card and
 Other Consumer		CommercialTotal
(Dollars in millions)Three Months Ended September 30, 2024
Allowance for loan and lease losses, July 1$347 $8,167 $4,724 $13,238 
Loans and leases charged off(15)(1,256)(529)(1,800)
Recoveries of loans and leases previously charged off22 205 39 266 
Net charge-offs7 (1,051)(490)(1,534)
Provision for loan and lease losses(45)1,167 425 1,547 
Other — 1 (1)— 
Allowance for loan and lease losses, September 30
309 8,284 4,658 13,251 
Reserve for unfunded lending commitments, July 155 — 1,049 1,104 
Provision for unfunded lending commitments3 — (8)(5)
Other— — 1 1 
Reserve for unfunded lending commitments, September 30
58 — 1,042 1,100 
Allowance for credit losses, September 30
$367 $8,284 $5,700 $14,351 
Three Months Ended September 30, 2023
Allowance for loan and lease losses, July 1427 7,323 5,200 12,950 
Loans and leases charged off(15)(994)(178)(1,187)
Recoveries of loans and leases previously charged off27 178 51 256 
Net charge-offs12 (816)(127)(931)
Provision for loan and lease losses(28)1,247 49 1,268 
Other1 1 (2)— 
Allowance for loan and lease losses, September 30
412 7,755 5,120 13,287 
Reserve for unfunded lending commitments, July 186 — 1,302 1,388 
Provision for unfunded lending commitments(1)— (33)(34)
Other— — (1)(1)
Reserve for unfunded lending commitments, September 30
85 — 1,268 1,353 
Allowance for credit losses, September 30
$497 $7,755 $6,388 $14,640 
(Dollars in millions)Nine Months Ended September 30, 2024
Allowance for loan and lease losses, January 1$386 $8,134 $4,822 $13,342 
Loans and leases charged off(34)(3,748)(1,535)(5,317)
Recoveries of loans and leases previously charged off65 586 101 752 
Net charge-offs31 (3,162)(1,434)(4,565)
Provision for loan and lease losses(109)3,311 1,277 4,479 
Other1 1 (7)(5)
Allowance for loan and lease losses, September 30
309 8,284 4,658 13,251 
Reserve for unfunded lending commitments, January 182 — 1,127 1,209 
Provision for unfunded lending commitments(24)— (86)(110)
Other— — 1 1 
Reserve for unfunded lending commitments, September 30
58 — 1,042 1,100 
Allowance for credit losses, September 30
$367 $8,284 $5,700 $14,351 
Nine Months Ended September 30, 2023
Allowance for loan and lease losses, December 31$420 $6,817 $5,445 $12,682 
January 1, 2023 adoption of credit loss standard(67)(109)(67)(243)
Allowance for loan and lease losses, January 1353 6,708 5,378 12,439 
Loans and leases charged off(44)(2,779)(544)(3,367)
Recoveries of loans and leases previously charged off81 565 114 760 
Net charge-offs37 (2,214)(430)(2,607)
Provision for loan and lease losses14 3,259 204 3,477 
Other8 2 (32)(22)
Allowance for loan and lease losses, September 30
412 7,755 5,120 13,287 
Reserve for unfunded lending commitments, January 194 — 1,446 1,540 
Provision for unfunded lending commitments(9)— (178)(187)
Reserve for unfunded lending commitments, September 30
85 — 1,268 1,353 
Allowance for credit losses, September 30
$497 $7,755 $6,388 $14,640