Note 5 Asset Quality and Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit

We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk. Trends in delinquency rates are a key indicator, among other considerations, of credit risk within the loan portfolios. The measurement of delinquency status is based on the contractual terms of each loan. Loans that are 30 days or more past due in terms of payment are considered delinquent. Loan delinquencies exclude loans held for sale and purchased impaired loans.

The level of nonperforming assets represents another key indicator of the potential for future credit losses. Nonperforming assets include nonperforming loans, TDRs, and other real estate owned (OREO) and foreclosed assets, but exclude government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans. See Note 6 Purchased Impaired Loans for further information.

See Note 1 Accounting Policies for additional delinquency, nonperforming, and charge-off information.

The following tables display the delinquency status of our loans and our nonperforming assets at September 30, 2011 and December 31, 2010.

Age Analysis of Past Due Accruing Loans

			Accruing
			Current or Less											90 Days
			Than 30 Days				30-59 Days			60-89 Days				Or More				Total Past			Nonperforming				Purchased				Total
In millions			Past Due				Past Due			Past Due				Past Due				Due (a)			Loans				Impaired				Loans
September 30, 2011
	Commercial			$	60,843		$	163			$	54			$	34		$	251			$	994		$	162		$	62,250
	Commercial real estate				14,071			84				25				13			122				1,425			795			16,413
	Equipment lease financing				6,141			9				4				2			15				30						6,186
	Residential real estate (b)				8,128			319				191				2,135			2,645				722			3,160			14,655
	Home equity				29,387			177				101				206			484				484			2,808			33,163
	Credit card				3,668			39				26				45			110				7						3,785
	Other consumer (c)				17,367			216				143				333			692				30			2			18,091
		Total		$	139,605		$	1,007			$	544			$	2,768		$	4,319			$	3,692		$	6,927		$	154,543
	Percentage of total loans				90.34	%		.65	%			.35	%			1.79	%		2.79	%			2.39	%		4.48	%		100.00	%
December 31, 2010
	Commercial			$	53,273		$	251			$	92			$	59		$	402			$	1,253		$	249		$	55,177
	Commercial real estate				14,713			128				62				43			233				1,835			1,153			17,934
	Equipment lease financing				6,276			37				2				1			40				77						6,393
	Residential real estate (b)				9,150			331				225				2,121			2,677				818			3,354			15,999
	Home equity				30,334			159				91				174			424				448			3,020			34,226
	Credit card				3,765			46				32				77			155										3,920
	Other consumer (c)				16,312			260				101				234			595				35			4			16,946
		Total		$	133,823		$	1,212			$	605			$	2,709		$	4,526			$	4,466		$	7,780		$	150,595
	Percentage of total loans				88.86	%		.81	%			.40	%			1.80	%		3.01	%			2.97	%		5.16	%		100.00	%
(a)		Past due loan amounts exclude purchased impaired loans as they are considered current loans due to the accretion of interest income.
(b)		Past due loan amounts at September 30, 2011, include government insured or guaranteed residential real estate mortgages, totaling $.1 billion for 30 to 59 days past due, $.1
		billion for 60 to 89 days past due and $2.0 billion for 90 days or more past due. Past due loan amounts at December 31, 2010, include government insured or guaranteed
		residential real estate mortgages, totaling $.1 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $2.0 billion for 90 days or more past due.
(c)		Past due loan amounts at September 30, 2011, include government insured or guaranteed other consumer loans, totaling $.2 billion for 30 to 59 days past due, $.1 billion for
		60 to 89 days past due and $.3 billion for 90 days or more past due. Past due loan amounts at December 31, 2010, include government insured or guaranteed other consumer
		loans, totaling $.2 billion for 30 to 59 days past due, $.1 billion for 60 to 89 days past due and $.2 billion for 90 days or more past due.

Nonperforming Assets

Dollars in millions				September 30, 2011				December 31, 2010
Nonperforming loans
	Commercial				$	994			$	1,253
	Commercial real estate					1,425				1,835
	Equipment lease financing					30				77
			TOTAL COMMERCIAL LENDING			2,449				3,165
	Consumer (a)
		Home equity				484				448
		Residential real estate (b)				722				818
		Credit card (c)				7
		Other consumer				30				35
			TOTAL CONSUMER LENDING			1,243				1,301
Total nonperforming loans (d)						3,692				4,466
OREO and foreclosed assets
	Other real estate owned (OREO) (e)					553				589
	Foreclosed and other assets					53				68
			TOTAL FORECLOSED AND OTHER ASSETS			606				657
Total nonperforming assets					$	4,298			$	5,123
Nonperforming loans to total loans						2.39	%			2.97	%
Nonperforming assets to total loans, OREO and foreclosed assets						2.77				3.39
Nonperforming assets to total assets						1.59				1.94
(a)	Excludes most consumer loans and lines of credit, not secured by residential real estate, which are charged off after 120 to 180 days past due and are not placed
	on nonperforming status.
(b)	Effective in 2011, nonperforming residential real estate excludes loans of $68 million accounted for under the fair value option as of September 30, 2011. The comparable balance at December 31, 2010 was not material.
(c)	Effective in the second quarter 2011, the commercial nonaccrual policy was applied to certain small business credit card balances. This change resulted in loans being placed on nonaccrual status when they become 90 days or more past due, rather than being excluded and charged off at 180 days past due.
(d)	Nonperforming loans do not include government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans.
(e)	Other real estate owned excludes $256 million and $178 million at September 30, 2011, and December 31, 2010, respectively, related to serviced loans insured by the Federal
	Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).

Nonperforming loans also include loans whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. In accordance with applicable accounting guidance, these loans are considered TDRs. See Note 1 Accounting Policies and the TDR section of this Note 5 for additional information. Consumer government insured or guaranteed loans, held for sale loans, loans accounted for under the fair value option and pooled purchased impaired loans are not classified as TDRs and totaled $1.4 billion at September 30, 2011.

Total nonperforming loans in the nonperforming assets table above include TDRs of $1.1 billion at September 30, 2011 and $784 million at December 31, 2010. TDRs returned to performing (accruing) status totaled $780 million and $543 million at September 30, 2011 and December 31, 2010, respectively, and are excluded from nonperforming loans. These loans have demonstrated a period of at least six months of consecutive performance under the restructured terms. At September 30, 2011 and December 31, 2010, remaining commitments to lend additional funds to debtors in a commercial or consumer TDR were immaterial.

We have two overall portfolio segments – Commercial Lending and Consumer Lending. Each of these two segments is comprised of one or more loan classes. Classes are characterized by similarities in initial measurement, risk attributes and the manner in which we monitor and assess credit risk. The commercial segment is comprised of the commercial, commercial real estate, equipment lease financing, and commercial purchased impaired loan classes. The consumer segment is comprised of the residential real estate, home equity, credit card, other consumer, and consumer purchased impaired loan classes. Asset quality indicators for each of these loan classes are discussed in more detail below.

For commercial loans, we monitor the performance of the borrower in a disciplined and regular manner based upon the level of credit risk inherent in the loan. To evaluate the level of credit risk, we assign an internal risk rating reflecting the borrower's PD and LGD. This two-dimensional credit risk rating methodology provides risk granularity in the monitoring process on an ongoing basis. We adjust our risk-rating process through updates based on actual experience. The combination of the PD and LGD ratings assigned to a commercial loan, capturing both the combination of expectations of default and loss severity, reflects the relative estimated likelihood of loss for that loan at the reporting date. Loans with low PD and LGD have the lowest likelihood of loss. Conversely, loans with high PD and LGD have the highest likelihood of loss.

Based upon the amount of the lending arrangement and of the credit risk described above, we follow a formal schedule of periodic review. Generally, for higher risk loans this occurs on a quarterly basis, although we have established practices to review such credit risk more frequently, if circumstances warrant.

We manage credit risk associated with our commercial real estate projects and commercial mortgage activities similar to commercial loans by analyzing PD and LGD. However, due to the nature of the collateral, for commercial real estate projects and commercial mortgages, the LGDs tend to be significantly lower than those seen in the commercial class. Additionally, risks connected with commercial real estate projects and commercial mortgage activities tend to be correlated to the loan structure and collateral location, project progress and business environment. As a result, these attributes are also monitored and utilized in assessing credit risk.

As with the commercial class, a formal schedule of periodic review is performed to assess geographic, product and loan type concentrations, in addition to industry risk and market and economic concerns. Often as a result of these overviews, more in-depth reviews and increased scrutiny is placed on areas of higher risk, adverse changes in risk ratings, deteriorating operating trends, and/or areas that concern management. The goal of these reviews is to assess risk and take actions to mitigate our exposure to such risks.

Similar to the other classes of loans within Commercial Lending, loans within the equipment lease financing class undergo a rigorous underwriting process. During this process, a PD and LGD are assigned based on the credit risk.

Based upon the dollar amount of the lease and of the level of credit risk, we follow a formal schedule of periodic review. Generally, this occurs on a quarterly basis, although we have established practices to review such credit risk more frequently, if circumstances warrant. Our review process entails analysis of the following factors: equipment value/residual value, exposure levels, jurisdiction risk, industry risk, guarantor requirements, and regulatory compliance.

The credit impacts of purchased impaired loans are primarily determined through the estimation of expected cash flows. Commercial cash flow estimates are influenced by a number of credit related items, which include but are not limited to: changes in estimated collateral value, receipt of additional collateral, secondary trading prices, circumstances of possible and/or ongoing liquidation, capital availability, business operations and payment patterns.

We attempt to proactively manage these factors by using various procedures that are customized to the risk of a given loan. These procedures include a review by our Special Asset Committee (SAC), ongoing outreach, contact, and assessment of obligor financial conditions, collateral inspection and appraisal.

Commercial Lending Asset Quality Indicators
					Criticized Commercial Loans
				Pass		Special								Total
In millions				Rated (a)	Mention (b)		Substandard (c)			Doubtful (d)				Loans
September 30, 2011
	Commercial		$	56,815	$	1,712		$	3,279		$	282	$	62,088
	Commercial real estate			11,179		913			3,189			337		15,618
	Equipment lease financing			5,945		65			163			13		6,186
	Purchased impaired loans			109		37			603			208		957
		Total commercial lending (e)	$	74,048	$	2,727		$	7,234		$	840	$	84,849
December 31, 2010
	Commercial		$	48,556	$	1,926		$	3,883		$	563	$	54,928
	Commercial real estate			11,014		1,289			3,914			564		16,781
	Equipment lease financing			6,121		64			162			46		6,393
	Purchased impaired loans			106		35			883			378		1,402
		Total commercial lending (e)	$	65,797	$	3,314		$	8,842		$	1,551	$	79,504
(a)	Pass Rated loans include loans not classified as "Special Mention", "Substandard", or "Doubtful".
(b)	Special Mention rated loans have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration
	of repayment prospects at some future date. These loans do not expose us to sufficient risk to warrant adverse classification at this time.
(c)	Substandard rated loans have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of debt. They are characterized by the distinct possibility
	that we will sustain some loss if the deficiencies are not corrected.
(d)	Doubtful rated loans possess all the inherent weaknesses of a Substandard loan with the additional characteristics that the weakness makes collection or liquidation in full
	improbable due to existing facts, conditions, and values.
(e)	Loans are included above based on their contractual terms as "Pass", "Special Mention", "Substandard" or "Doubtful".

We use several credit quality indicators, including credit scores, LTV ratios, delinquency rates, loan types and geography, to monitor and manage credit risk within the residential real estate and home equity classes. We evaluate mortgage loan performance by source originators and loan servicers. A summary of asset quality indicators follows:

Credit Scores: We use a national third-party provider to update FICO credit scores for residential real estate and home equity loans on at least an annual basis. The updated scores are incorporated into a series of credit monitoring reports and the statistical models that estimate the individual loan risk values.

LTV: We regularly update the property values of real estate collateral and calculate a LTV ratio. This ratio updates our statistical models that estimate individual and class/segment level risk. The LTV ratio tends to indicate potential loss on a given loan and the borrower's likelihood to make payment according to the contractual obligations.

At least annually, we obtain updated property valuations on the real estate secured loans. For open credit lines secured by real estate or facilities in regions experiencing significant declines in property values, more frequent valuations may occur. The property values are monitored to determine LTV migration and those LTV migrations are stratified within various markets. We continue to enhance our capabilities in this area, which may result in more frequent valuations and analysis.

Delinquency Rates: We monitor levels of delinquency rates for residential real estate and home equity loans.

Geography: Geographic concentrations are monitored to evaluate and manage exposures. Loan purchase programs are sensitive to, and focused within, certain regions to manage geographic exposures and associated risks.

A combination of FICO scores, LTV ratios and geographic location assigned to residential real estate and home equity loans are used to estimate the likelihood of loss for that loan at the reporting date. Loans with higher FICO scores and lower LTVs tend to have the lower likelihood of loss. Conversely, loans with lower FICO scores, higher LTVs, and in certain geographic locations tend to have a higher likelihood of loss. Certain geographic distribution information of our higher risk real estate secured portfolio is presented in the footnotes to the table below.

Consumer Higher Risk Real Estate Secured Asset Quality Indicators

				Higher Risk Loans (a)					All Other Loans				Home Equity and Residential Real Estate Loans
						% of Total					% of Total
Dollars in millions			Amount			Loans		Amount			Loans				Amount
September 30, 2011
	Home equity (b)			$	961	3	%		$	32,202	97	%		$	33,163
	Residential real estate (c)				553	4	%			14,102	96	%			14,655
		Total (d)		$	1,514	3	%		$	46,304	97	%		$	47,818
December 31, 2010
	Home equity (b)			$	1,203	4	%		$	33,023	96	%		$	34,226
	Residential real estate (c)				671	4	%			15,328	96	%			15,999
		Total (d)		$	1,874	4	%		$	48,351	96	%		$	50,225
(a)	Higher risk loans are defined as loans with both a recent FICO credit score of less than or equal to 660 and a LTV ratio greater than or equal to 90%. Higher risk loans
	exclude loans held for sale and government insured or guaranteed loans.
(b)	Within the higher risk home equity class at September 30, 2011, approximately 13% were in some stage of delinquency and 8% were in late stage (90+ days) delinquency status.
	The majority of the September 30, 2011 balance related to higher risk home equity loans is geographically distributed throughout the following areas: Pennsylvania 30%,
	Ohio 14%, New Jersey 11%, Illinois 7%, and Michigan 6%. All other states, none of which comprise more than 4%, make up the remainder of the balance.
	At December 31, 2010, approximately 10% were in some stage of delinquency and 6% were in late stage (90+ days) delinquency status. The majority of the December 31,
	2010 balance related to higher risk home equity loans is geographically distributed throughout the following areas: Pennsylvania 28%, Ohio 13%, New Jersey 11%, Illinois
	7%, Michigan 6%, and Kentucky 5%. All other states, none of which comprise more than 4% make up the remainder of the balance.
(c)	Within the higher risk residential real estate class at September 30, 2011, approximately 41% were in some stage of delinquency and 31% were in late stage (90+ days)
	delinquency status. The majority of the September 30, 2011 balance related to higher risk residential real estate loans is geographically distributed throughout the following
	areas: California 22%, Illinois 13%, Florida 10%, Maryland 7%, Pennsylvania 5%, and Ohio 5%. All other states, none of which comprise more than 4%, make up the remainder of
	the balance. At December 31, 2010, approximately 49% were in some stage of delinquency and 38% were in late stage (90+ days) delinquency status. The majority of the
	December 31, 2010 balance related to higher risk residential real estate loans is geographically distributed throughout the following areas: California 23%, Florida 11%,
	Illinois 11%, and Maryland 8%. All other states, none of which comprise more than 5%, make up the remainder of the balance.
(d)	Total loans include purchased impaired loans of $6.0 billion at September 30, 2011 and $6.4 billion at December 31, 2010.

In addition to the higher risk asset quality indicators above, we regularly monitor the portions of the real estate secured portfolio where LTVs are greater than 100%. The following table presents these balances, as well as the percentage of the applicable home equity or residential real estate loan classes.

We monitor a variety of asset quality information in the management of the credit card and other consumer loan classes. Other consumer loan classes include education, automobile, and other secured and unsecured lines and loans. Along with the trending of delinquencies and losses for each class, FICO credit score updates are obtained at least annually, as well as a variety of credit bureau attributes.

The combination of FICO scores and delinquency status are used to estimate the likelihood of loss for consumer exposure at the reporting date. Loans with high FICO scores tend to have a lower likelihood of loss. Conversely, loans with low FICO scores tend to have a higher likelihood of loss.

Estimates of the expected cash flows primarily determine the credit impacts of consumer purchased impaired loans. Consumer cash flow estimates are influenced by a number of credit related items, which include, but are not limited to, estimated real estate values, payment patterns, FICO scores, economic environment, LTV ratios and the date of origination. These key factors are monitored regularly to help ensure that concentrations of risk are mitigated and cash flows are maximized.

Credit Card and Other Consumer Loan Classes Asset Quality Indicators

		Credit Card (a)				Other Consumer (b)
				% of Total Loans				% of Total Loans
				Using FICO				Using FICO
Dollars in millions			Amount	Credit Metric			Amount	Credit Metric
September 30, 2011
	FICO score greater than 719	$	1,929	51	%	$	5,284	62	%
	650 to 719		1,079	28			2,079	24
	620 to 649		186	5			325	4
	Less than 620		297	8			470	6
	No FICO score available or required (c)		294	8			337	4
Total loans using FICO credit metric			3,785	100	%		8,495	100	%
	Consumer loans using other internal credit metrics (b)						9,596
Total loan balance		$	3,785			$	18,091
Weighted-average current FICO score (d)				721				735
December 31, 2010
	FICO score greater than 719	$	1,895	48	%	$	4,135	58	%
	650 to 719		1,149	29			1,984	28
	620 to 649		183	5			295	4
	Less than 620		424	11			652	9
	No FICO score available or required (c)		269	7			81	1
Total loans using FICO credit metric			3,920	100	%		7,147	100	%
	Consumer loans using other internal credit metrics (b)						9,799
Total loan balance		$	3,920			$	16,946
Weighted-average current FICO score (d)				709				713
(a)	At September 30, 2011, we had $47 million of credit card loans that are higher risk (i.e., loans with both FICO scores less than 660 and in late stage (90+ days) delinquency
	status). The majority of the September 30, 2011 balance related to higher risk credit card loans is geographically distributed throughout the following areas: Ohio 20%,
	Pennsylvania 14%, Michigan 14%, Illinois 8%, and Indiana 7%. All other states, none of which comprise more than 6%, make up the remainder of the balance. At December
	31, 2010, we had $70 million of credit card loans that are higher risk. The majority of the December 31, 2010 balance related to higher risk credit card loans is geographically
	distributed throughout the following areas: Ohio 20%, Michigan 14%, Pennsylvania 14%, Illinois 8%, and Indiana 7%. All other states, none of which comprise
	more than 5%, make up the remainder of the balance.
(b)	Other consumer loans for which FICO scores are used as an asset quality indicator include non-government guaranteed or insured education loans, automobile loans
	and other secured and unsecured lines and loans. Other consumer loans for which other internal credit metrics are used as an asset quality indicator include primarily
	government guaranteed or insured education loans, as well as consumer loans to high net worth individuals. Other internal credit metrics may include delinquency status,
	geography or other factors.
(c)	Credit card loans and other consumer loans with no FICO score available or required refers to new accounts issued to borrowers with limited credit history, accounts for
	which we cannot obtain an updated FICO (e.g., recent profile changes), cards issued with a business name, and/or cards secured by collateral. Management proactively
	assesses the risk and size of this loan portfolio and, when necessary, takes actions to mitigate the credit risk.
(d)	Weighted-average current FICO score excludes accounts with no FICO score available or required.

A TDR is a loan whose terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from our loss mitigation activities and include rate reductions, principal forgiveness, postponement/reduction of scheduled amortization, and extensions, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. In those situations where principal is forgiven, the amount of such principal forgiveness is immediately charged off.

Some TDRs may not ultimately result in the full collection of principal and interest, as restructured, and result in potential incremental losses. These potential incremental losses have been factored into our overall ALLL estimate. The level of any subsequent defaults will likely be affected by future economic conditions. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is ultimately repaid in full, the collateral is foreclosed upon, or it is fully charged off. We held specific reserves in the ALLL of $539 million and $509 million at September 30, 2011, and December 31, 2010, respectively, for the total TDR portfolio.

Summary of Troubled Debt Restructurings

			Sept. 30		Dec. 31
In millions			2011		2010
Total consumer lending		$	1,751	$	1,422
Total commercial lending			396		236
	Total TDRs	$	2,147	$	1,658
Nonperforming		$	1,062	$	784
Accruing (a)			780		543
Credit card (b)			305		331
	Total TDRs	$	2,147	$	1,658
(a)	Accruing loans have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans.
(b)	Includes credit cards and certain small business and consumer credit agreements whose terms have been restructured and are TDRs. However, since our policy is to exempt these loans from being placed on nonaccrual status as permitted by regulatory guidance as generally these loans are directly charged off in the period that they become 180 days past due, these loans are excluded from nonperforming loans.

The table below quantifies the number of loans that were classified as TDRs during the three months ended and nine months ended September 30, 2011. The change in the recorded investments as a result of the TDR is also provided below. The disclosed pre-TDR recorded investment column represents the recorded investment of the loans as of the quarter end prior to the TDR designation. The disclosed post-TDR recorded investment column represents the recorded investment of the TDRs as of the quarter end the TDR occurs. Both recorded investment columns exclude immaterial amounts of accrued interest receivable.

Financial Impact of TDRs (a)

Three months ended September 30, 2011				Pre-TDR Recorded		Post-TDR Recorded
Dollars in millions		Number of Loans			Investment	Investment
Commercial lending
	Commercial		168	$	45	$	38
	Commercial real estate		16		88		70
	Equipment lease financing (b)		2
TOTAL COMMERCIAL LENDING			186		133		108
Consumer lending
	Home equity		817		64		63
	Residential real estate		399		116		112
	Credit card		4,305		30		30
	Other consumer		129		3		3
TOTAL CONSUMER LENDING			5,650		213		208
	Total TDRs		5,836	$	346	$	316
Nine months ended September 30, 2011				Pre-TDR Recorded		Post-TDR Recorded
Dollars in millions		Number of Loans			Investment	Investment
Commercial lending
	Commercial		486	$	101	$	82
	Commercial real estate		57		233		198
	Equipment lease financing (b)		2
TOTAL COMMERCIAL LENDING			545		334		280
Consumer lending
	Home equity		3,259		264		263
	Residential real estate		1,298		316		293
	Credit card		15,943		105		105
	Other consumer		303		8		8
TOTAL CONSUMER LENDING			20,803		693		669
	Total TDRs		21,348	$	1,027	$	949
(a)	Impact of partial charge offs at TDR date are included in this table.
(b)	Pre-TDR and Post-TDR amounts each total less than $1 million.

TDRs may result in charge-offs and interest income not being recognized. There was 1 loan charged off totaling approximately $1 million and 3 loans charged off totaling approximately $5 million related to commercial and commercial real estate, respectively, for the three months ended September 30, 2011, as well as 10 loans charged off totaling approximately $25 million and 14 loans charged off totaling approximately $19 million related to commercial and commercial real estate, respectively, for the nine months ended September 30, 2011. For home equity, 104 loans and approximately $5 million in recorded investment were charged off during the three months ended September 30, 2011, while 173 loans and approximately $10 million in recorded investment were charged off during the nine months ended September 30, 2011. Within credit card, there were 102 loans and approximately $1 million in recorded investment charged off during the three months ended September 30, 2011, and 1,223 loans and approximately $9 million in recorded investment charged off during the nine months ended September 30, 2011. Charge offs related to residential real estate and other consumer were immaterial for both periods.

A financial effect of rate reduction TDRs is interest income not recognized. Interest income not recognized that otherwise would have been earned in the three months ended and nine months ended September 30, 2011 related to both commercial TDRs and consumer TDRs is not material.

The table below provides additional TDR information. The Principal Forgiveness category includes principal forgiveness and accrued interest forgiveness. These types of TDRs result in a write down of the recorded investment and a charge-off if such action has not already taken place. The Rate Reduction TDRs category includes reduced interest rate and interest deferral. The TDRs within this category would result in reductions to future interest income. The Other TDR category primarily includes postponement/reduction of scheduled amortization, as well as contractual extensions.

In some cases, there have been multiple concessions granted on one loan. When there have been multiple concessions granted, the principal forgiveness TDR was prioritized for purposes of determining the inclusion in the table below. For example, if there is principal forgiveness in conjunction with lower interest rate and postponement of amortization, the type of concession will be reported as Principal Forgiveness. Second in priority would be rate reduction. For example, if there is an interest rate reduction in conjunction with postponement of amortization, the type of concession will be reported as a Rate Reduction.

TDRs by Type
		Post-TDR Recorded Investment
Three months ended September 30, 2011
Dollars in millions			Principal Forgiveness		Rate Reduction			Other	Total
Commercial lending
	Commercial		$	1	$	14	$	23	$	38
	Commercial real estate			29		26		15		70
TOTAL COMMERCIAL LENDING (a)				30		40		38		108
Consumer lending
	Home equity					52		11		63
	Residential real estate					70		42		112
	Credit card					30				30
	Other consumer							3		3
TOTAL CONSUMER LENDING						152		56		208
	Total TDRs		$	30	$	192	$	94	$	316

		Post-TDR Recorded Investment
Nine months ended September 30, 2011
Dollars in millions			Principal Forgiveness		Rate Reduction			Other	Total
Commercial lending
	Commercial		$	11	$	24	$	47	$	82
	Commercial real estate			64		97		37		198
TOTAL COMMERCIAL LENDING (a)				75		121		84		280
Consumer lending
	Home equity					240		23		263
	Residential real estate					210		83		293
	Credit card					105				105
	Other consumer					1		7		8
TOTAL CONSUMER LENDING						556		113		669
	Total TDRs		$	75	$	677	$	197	$	949
(a)	Excludes less than $1 million of Equipment lease financing in Other TDRs.

After a loan is determined to be a TDR, we continue to track its performance under its restructured terms. In the table below, we consider a TDR to have subsequently defaulted when it becomes 60 days past due after the date the loan was restructured. The following table presents the recorded investment of loans that were classified as TDRs during the preceding 12-month period and experienced a payment default during the three and/or nine months ended September 30, 2011.

TDRs which have Subsequently Defaulted

Three months ended September 30, 2011
Dollars in millions		Number of Contracts		Recorded Investment
Commercial lending
	Commercial		20	$	16
	Commercial real estate		10		60
TOTAL COMMERCIAL LENDING			30		76
Consumer lending
	Home equity		291		23
	Residential real estate		141		32
	Credit card		26,473		19
	Other consumer (a)		14
TOTAL CONSUMER LENDING			26,919		74
	Total TDRs		26,949	$	150
Nine months ended September 30, 2011
Dollars in millions		Number of Contracts		Recorded Investment
Commercial lending
	Commercial		30	$	39
	Commercial real estate		29		111
TOTAL COMMERCIAL LENDING			59		150
Consumer lending
	Home equity		884		66
	Residential real estate		246		60
	Credit card		37,852		27
	Other consumer (a)		17
TOTAL CONSUMER LENDING			38,999		153
	Total TDRs		39,058	$	303
(a)	Excludes less than $1 million of recorded investment.

The impact to the ALLL for commercial loan TDRs is the effect of moving to the specific reserve methodology from the general reserve methodology for those loans that were not already put on nonaccrual status. There is an impact to the ALLL as a result of the concession made, which generally results in the expectation of fewer future cash flows. The decline in expected cash flows, as well as the application of a present value discount rate, when compared to the recorded investment, results in a charge-off or increased ALLL. Subsequent defaults of commercial loan TDRs do not have a significant impact on the ALLL as these TDRs are individually evaluated under the specific reserve methodology.

For consumer TDRs the ALLL is calculated using a discounted cash flow model, which leverages subsequent default, prepayment, and severity rate assumptions based upon historically observed data. Similar to the commercial loan specific reserve methodology, the reduced expected cash flows resulting from the concessions granted impact the consumer ALLL. The decline in expected cash flows, as well as the application of a present value discount rate, when compared to the recorded investment, results in a charge-off or increased ALLL.

Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters of Credit

We maintain the ALLL and the Allowance for Unfunded Loan Commitments and Letters of Credit at levels that we believe to be appropriate to absorb estimated probable credit losses incurred in the portfolios as of the balance sheet date. We use the two main portfolio segments – Commercial Lending and Consumer Lending – and we develop and document the ALLL under separate methodologies for each of these segments as further discussed and presented below.

For all loans, except purchased impaired loans, the ALLL is the sum of three components: (1) asset specific/individual impaired reserves, (2) quantitative (formulaic or pooled) reserves, and (3) qualitative (judgmental) reserves. See Note 6 Purchased Impaired Loans for additional ALLL information. While we make allocations to specific loans and pools of loans, the total reserve is available for all loan and lease losses. Although quantitative modeling factors as discussed below are constantly changing as the financial strength of the borrower and overall economic conditions change, there were no significant changes to our ALLL methodology during the first nine months of 2011.

Commercial nonperforming loans and all TDRs are considered impaired and are allocated a specific reserve. See Note 1 Accounting Policies for additional information.

The estimates of the quantitative component of ALLL for incurred losses within the commercial lending portfolio segment are determined through a statistical loss model utilizing PD, LGD, and EAD. Based upon loan risk ratings we assign PDs and LGDs. Each of these statistical parameters is determined based on historical data and observable factors including those pertaining to specific borrowers that have proven to be statistically significant in the estimation of incurred losses. PD is influenced by such factors as liquidity, industry, obligor financial structure, access to capital, and cash flow. LGD is influenced by collateral type, LTV, and guarantees by related parties.

Quantitative estimates within the consumer lending portfolio segment are calculated using a roll-rate model based on statistical relationships, calculated from historical data that estimate the movement of loan outstandings through the various stages of delinquency and ultimately charge-off. In general, the estimated rates at which loan outstandings roll from one stage of delinquency to another are dependent on various factors such as FICO scores, LTV ratios, the current economic environment, and geography.

While our reserve methodologies strive to reflect all relevant risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between estimates and actual outcomes. We provide additional reserves that are designed to provide coverage for losses attributable to such risks. The ALLL also includes factors which may not be directly measured in the determination of specific or pooled reserves. Such qualitative factors include:

Rollforward of Allowance for Loan and Lease Losses and Associated Loan Data

				Commercial			Consumer
In millions				Lending			Lending				Total
September 30, 2011
	ALLOWANCE FOR LOAN AND LEASE LOSSES
		January 1		$	2,567		$	2,320		$	4,887
		Charge-offs			(959)			(823)			(1,782)
		Recoveries			358			112			470
			Net charge-offs		(601)			(711)			(1,312)
		Provision for credit losses			268			694			962
		Net change in allowance for unfunded loan commitments and letters of credit			(13)			(16)			(29)
		Other			(1)						(1)
			September 30	$	2,220		$	2,287		$	4,507
		TDRs individually evaluated for impairment		$	28		$	511		$	539
		Other loans individually evaluated for impairment			583						583
		Loans collectively evaluated for impairment			1,366			1,033			2,399
		Purchased impaired loans			243			743			986
			September 30	$	2,220		$	2,287		$	4,507
	LOAN PORTFOLIO
		TDRs individually evaluated for impairment		$	396		$	1,751		$	2,147
		Other loans individually evaluated for impairment			2,076						2,076
		Loans collectively evaluated for impairment			81,420			61,973			143,393
		Purchased impaired loans			957			5,970			6,927
			September 30	$	84,849		$	69,694		$	154,543
	Segment ALLL as a percentage of total ALLL				49.26	%		50.74	%		100.00	%
	Ratio of the allowance for loan and lease losses to total loans				2.62	%		3.28	%		2.92	%
September 30, 2010
	ALLOWANCE FOR LOAN AND LEASE LOSSES
		January 1		$	3,345		$	1,727		$	5,072
		Charge-offs			(1,476)			(1,092)			(2,568)
		Recoveries			318			105			423
			Net charge-offs		(1,158)			(987)			(2,145)
		Provision for credit losses			660			1,400			2,060
		Adoption of ASU 2009-17, Consolidations						141			141
		Net change in allowance for unfunded loan commitments and letters of credit			103						103
			September 30	$	2,950		$	2,281		$	5,231
		TDRs individually evaluated for impairment		$	16		$	425		$	441
		Other loans individually evaluated for impairment			959						959
		Loans collectively evaluated for impairment			1,627			1,298			2,925
		Purchased impaired loans			348			558			906
			September 30	$	2,950		$	2,281		$	5,231
	LOAN PORTFOLIO
		TDRs individually evaluated for impairment		$	108		$	1,226		$	1,334
		Other loans individually evaluated for impairment			3,446						3,446
		Loans collectively evaluated for impairment			73,574			63,643			137,217
		Purchased impaired loans			1,559			6,571			8,130
			September 30	$	78,687		$	71,440		$	150,127
	Segment ALLL as a percentage of total ALLL				56.39	%		43.61	%		100.00	%
	Ratio of the allowance for loan and lease losses to total loans				3.75	%		3.19	%		3.48	%

Impaired loans include commercial nonperforming loans and consumer and commercial TDRs, regardless of nonperforming status. Excluded from impaired loans are nonperforming leases, loans held for sale, smaller balance homogeneous type loans and purchased impaired loans. See Note 6 Purchased Impaired Loans for additional information. Nonperforming equipment lease financing loans of $30 million and $77 million at September 30, 2011, and December 31, 2010, respectively, are excluded from impaired loans pursuant to authoritative lease accounting guidance. We did not recognize any interest income on impaired loans that have not returned to performing status, while they were impaired during the nine months ended September 30, 2011 and September 30, 2010. The following table provides further detail on impaired loans individually evaluated for reserves and the associated ALLL. Certain commercial impaired loans do not have a related allowance as the valuation of these impaired loans exceeded the recorded investment.

Impaired Loans

			Unpaid							Average
			Principal		Recorded		Associated			Recorded
In millions			Balance		Investment (a)		Allowance (b)			Investment (a)
September 30, 2011
	Impaired loans with an associated allowance
		Commercial	$	1,264	$	872		$	274	$	1,027
		Commercial real estate		1,504		1,032			337		1,298
		Residential real estate		823		694			172		578
		Home equity		755		741			266		687
		Credit card		272		272			68		287
		Other consumer		44		44			5		37
	Total impaired loans with an associated allowance		$	4,662	$	3,655		$	1,122	$	3,914
	Impaired loans without an associated allowance
		Commercial	$	368	$	128				$	99
		Commercial real estate		674		440					431
	Total impaired loans without an associated allowance		$	1,042	$	568				$	530
	Total impaired loans		$	5,704	$	4,223		$	1,122	$	4,444
December 31, 2010
	Impaired loans with an associated allowance
		Commercial	$	1,769	$	1,178		$	410	$	1,533
		Commercial real estate		1,927		1,446			449		1,732
		Residential real estate		521		465			122		309
		Home equity		622		622			207		448
		Credit card		301		301			149		275
		Other consumer		34		34			7		30
	Total impaired loans with an associated allowance		$	5,174	$	4,046		$	1,344	$	4,327
	Impaired loans without an associated allowance
		Commercial	$	87	$	75				$	90
		Commercial real estate		525		389					320
	Total impaired loans without an associated allowance		$	612	$	464				$	410
	Total impaired loans		$	5,786	$	4,510		$	1,344	$	4,737
(a)	Recorded investment in a loan includes the unpaid principal balance plus accrued interest and net accounting adjustments, less any charge-offs. Recorded investment does not
	include any associated valuation allowance. Average recorded investment is for the nine months ended September 30, 2011, and year ended December 31, 2010.
(b)	Associated allowance amounts include $539 million and $509 million for TDRs at September 30, 2011, and December 31, 2010, respectively.

We maintain the allowance for unfunded loan commitments and letters of credit at a level we believe is appropriate to absorb estimated probable credit losses on these unfunded credit facilities. See Note 1 Accounting Policies for additional information.