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Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters Of Credit
 12 Months Ended
Dec. 31, 2014
Allowance For Loan And Lease Losses [Abstract]  
Allowances for Loan and Lease Losses and Unfunded Loan Commitments and Letters Of Credit

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

Allowance for Loan and Lease Losses

We maintain the ALLL 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 develop and document the ALLL under separate methodologies for each of these segments as discussed in Note 1 Accounting Policies. A rollforward of the ALLL and associated loan data is presented below.

Table 73: Rollforward of Allowance for Loan and Lease Losses and Associated Loan Data
CommercialConsumer
In millionsLendingLendingTotal
December 31, 2014
Allowance for Loan and Lease Losses
January 1 $1,547 $2,062 $3,609
Charge-offs (360)(661)(1,021)
Recoveries 305 185 490
Net charge-offs (55)(476)(531)
Provision for credit losses 100 173 273
Net change in allowance for unfunded loan commitments and letters of credit (18) 1 (17)
Other(3)(3)
December 31$1,571 $1,760 $3,331
TDRs individually evaluated for impairment $62 $324 $386
Other loans individually evaluated for impairment77 77
Loans collectively evaluated for impairment 1,353 643 1,996
Purchased impaired loans 79 793 872
December 31$1,571 $1,760 $3,331
Loan Portfolio
TDRs individually evaluated for impairment (a)$542 $2,041 $2,583
Other loans individually evaluated for impairment 309 309
Loans collectively evaluated for impairment (b) 127,207 68,826 196,033
Fair value option loans (c)1,034 1,034
Purchased impaired loans 310 4,548 4,858
December 31$128,368 $76,449 $204,817
Portfolio segment ALLL as a percentage of total ALLL47 %53 %100 %
Ratio of the allowance for loan and lease losses to total loans 1.22 % 2.30 % 1.63 %
December 31, 2013
Allowance for Loan and Lease Losses
January 1 $1,774 $2,262 $4,036
Charge-offs (d) (606)(982)(1,588)
Recoveries 357 154 511
Net charge-offs (249)(828)(1,077)
Provision for credit losses 36 607 643
Net change in allowance for unfunded loan commitments and letters of credit(13)21 8
Other(1)(1)
December 31$1,547 $2,062 $3,609
TDRs individually evaluated for impairment $24 $446 $470
Other loans individually evaluated for impairment155 155
Loans collectively evaluated for impairment 1,235 745 1,980
Purchased impaired loans 133 871 1,004
December 31$1,547 $2,062 $3,609
Loan Portfolio
TDRs individually evaluated for impairment (a) $578 $2,161 $2,739
Other loans individually evaluated for impairment649 649
Loans collectively evaluated for impairment (b) 115,245 69,724 184,969
Fair value option loans (c)1,150 1,150
Purchased impaired loans 673 5,433 6,106
December 31$117,145 $78,468 $195,613
Portfolio segment ALLL as a percentage of total ALLL43 %57 %100 %
Ratio of the allowance for loan and lease losses to total loans 1.32 % 2.63 % 1.84 %

Table 73: Rollforward of Allowance for Loan and Lease Losses and Associated Loan Data
(continued from previous page)
CommercialConsumer
In millionsLendingLendingTotal
December 31, 2012
Allowance for Loan and Lease Losses
January 1 $1,995 $2,352 $4,347
Charge-offs (804)(1,066)(1,870)
Recoveries 445 136 581
Net charge-offs (359)(930)(1,289)
Provision for credit losses 138 849 987
Net change in allowance for unfunded loan commitments and letters of credit(1)(9)(10)
Other 1 1
December 31$1,774 $2,262 $4,036
TDRs individually evaluated for impairment $40 $547 $587
Other loans individually evaluated for impairment253 253
Loans collectively evaluated for impairment 1,242 857 2,099
Purchased impaired loans 239 858 1,097
December 31$1,774 $2,262 $4,036
Loan Portfolio
TDRs individually evaluated for impairment (a) $541 $2,318 $2,859
Other loans individually evaluated for impairment1,057 1,057
Loans collectively evaluated for impairment 106,095 68,014 174,109
Fair value option loans (c)425 425
Purchased impaired loans 1,249 6,157 7,406
December 31$108,942 $76,914 $185,856
Portfolio segment ALLL as a percentage of total ALLL44 %56 %100 %
Ratio of the allowance for loan and lease losses to total loans 1.63 % 2.94 % 2.17 %
(a)TDRs individually evaluated for impairment exclude TDRs that were subsequently accounted for as held for sale loans, but continue to be disclosed as TDRs.
(b)Includes $195 million of loans collectively evaluated for impairment based upon collateral values and written down to the respective collateral value less costs to sell at December 31, 2014. Accordingly, there is no allowance recorded for these loans. The comparative amount as of December 31, 2013 was $252 million.
(c)Loans accounted for under the fair value option are not evaluated for impairment as these loans are accounted for at fair value. Accordingly there is no allowance recorded on these loans.
(d)Pursuant to alignment with interagency guidance on practices for loans and lines of credit related to consumer lending in the first quarter of 2013, additional charge-offs of $134 million were taken.

Net interest income less the provision for credit losses was $8.3 billion for 2014 compared with $8.5 billion for 2013 and $8.7 billion for 2012.

Allowance for Unfunded Loan Commitments and Letters of Credit

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 as of the balance sheet date as discussed in Note 1 Accounting Policies. A rollforward of the allowance is presented below.

Table 74: Rollforward of Allowance for Unfunded Loan Commitments and Letters of Credit
In millions201420132012
January 1$ 242 $ 250 $ 240
Net change in allowance for unfunded loan commitments and letters of credit 17 (8) 10
December 31$ 259 $ 242 $ 250