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Asset Quality
3 Months Ended
Mar. 31, 2016
Asset Quality [Abstract]  
Asset Quality

Note 3 Asset Quality

We closely monitor economic conditions and loan performance trends to manage and evaluate our exposure to credit risk. Trends in delinquency rates may be 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, purchased impaired loans, nonperforming loans and loans accounted for under the fair value option which are on nonaccrual status, but include government insured or guaranteed loans and accruing loans accounted for under the fair value option.

Nonperforming assets include nonperforming loans and leases, OREO and foreclosed assets, and nonperforming TDRs. Nonperforming loans are those loans accounted for at amortized cost whose credit quality has deteriorated to the extent that full collection of contractual principal and interest is not probable. Interest income is not recognized on these loans. Loans accounted for under the fair value option are reported as performing loans as these loans are accounted for at fair value. However, when nonaccrual criteria is met, interest income is not recognized on these loans. Additionally, certain government insured or guaranteed loans for which we expect to collect substantially all principal and interest are not reported as nonperforming loans and continue to accrue interest. Purchased impaired loans are excluded from nonperforming loans as we are currently accreting interest income over the expected life of the loans. See Note 4 Purchased 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 March 31, 2016 and December 31, 2015, respectively.

Table 46: Analysis of Loan Portfolio (a)
Accruing
Current or Less30-5960-89 90 DaysTotal Fair Value OptionPurchasedTotal
Than 30 Days DaysDaysOr MorePastNonperformingNonaccrualImpairedLoans
Dollars in millionsPast DuePast DuePast DuePast DueDue (b)LoansLoans (c)Loans (d) (e)
March 31, 2016
Commercial Lending
Commercial$98,593$85$18$39$142 $552$29$99,316
Commercial real estate27,943617 16012028,230
Equipment lease financing7,5432121 207,584
Total commercial lending134,0791121939170732149135,130
Consumer Lending
Home equity29,0795727849571,33831,458
Residential real estate (f)11,32213961506706 536$2151,89314,672
Credit card 4,66825173274 44,746
Other consumer (g) 20,96417385205463 5221,479
Total consumer lending66,0333941907431,3271,5492153,23172,355
Total $200,112$506$209$782$1,497$2,281$215$3,380$207,485
Percentage of total loans96.45%.24%.10%.38%.72%1.10%.10%1.63%100.00%
December 31, 2015
Commercial Lending
Commercial$98,075$69$32$45$146 $351$36$98,608
Commercial real estate27,13410414 18713327,468
Equipment lease financing7,44019221 77,468
Total commercial lending132,649983845181545169133,544
Consumer Lending
Home equity 29,6566330939771,40732,133
Residential real estate (f)10,91814265566773 549$2251,94614,411
Credit card4,77928193380 34,862
Other consumer (g) 21,18118096237513 5221,746
Total consumer lending66,5344132108361,4591,5812253,35373,152
Total $199,183$511$248$881$1,640$2,126$225$3,522$206,696
Percentage of total loans96.36%.25%.12%.43%.80%1.03%.11%1.70%100.00%
(a)Amounts in table represent recorded investment and exclude loans held for sale. 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.
(b)Past due loan amounts exclude purchased impaired loans, even if contractually past due (or if we do not expect to receive payment in full based on the original contractual terms), as we are currently accreting interest income over the expected life of the loans.
(c)Consumer loans accounted for under the fair value option for which we do not expect to collect substantially all principal and interest are subject to nonaccrual accounting and classification upon meeting any of our nonaccrual policies. Given that these loans are not accounted for at amortized cost, these loans have been excluded from the nonperforming loan population.
(d)Net of unearned income, net deferred loan fees, unamortized discounts and premiums, and purchase discounts and premiums totaling $1.4 billion at both March 31, 2016 and December 31, 2015.
(e)Future accretable yield related to purchased impaired loans is not included in the analysis of loan portfolio.
(f)Past due loan amounts at March 31, 2016 include government insured or guaranteed Residential real estate mortgages totaling $62 million for 30 to 59 days past due, $44 million for 60 to 89 days past due and $483 million for 90 days or more past due. Past due loan amounts at December 31, 2015 include government insured or guaranteed Residential real estate mortgages totaling $56 million for 30 to 59 days past due, $45 million for 60 to 89 days past due and $545 million for 90 days or more past due.
(g)Past due loan amounts at March 31, 2016 include government insured or guaranteed Other consumer loans totaling $116 million for 30 to 59 days past due, $64 million for 60 to 89 days past due and $193 million for 90 days or more past due. Past due loan amounts at December 31, 2015 include government insured or guaranteed Other consumer loans totaling $116 million for 30 to 59 days past due, $75 million for 60 to 89 days past due and $220 million for 90 days or more past due.

In the normal course of business, we originate or purchase loan products with contractual characteristics that, when concentrated, may increase our exposure as a holder of those loan products. Possible product features that may create a concentration of credit risk would include a high original or updated LTV ratio, terms that may expose the borrower to future increases in repayments above increases in market interest rates, and interest-only loans, among others. We also originate home equity and residential real estate loans that are concentrated in our primary geographic markets.

We originate interest-only loans to commercial borrowers. Such credit arrangements are usually designed to match borrower cash flow expectations (e.g., working capital lines, revolvers). These products are standard in the financial services industry and product features are considered during the underwriting process to mitigate the increased risk that the interest-only feature may result in borrowers not being able to make interest and principal payments when due. We do not believe that these product features create a concentration of credit risk.

At March 31, 2016, we pledged $21.3 billion of commercial loans to the Federal Reserve Bank (FRB) and $56.9 billion of residential real estate and other loans to the Federal Home Loan Bank (FHLB) as collateral for the contingent ability to borrow, if necessary. The comparable amounts at December 31, 2015 were $20.2 billion and $56.4 billion, respectively.

Table 47: Nonperforming Assets
March 31December 31
Dollars in millions20162015
Nonperforming loans
Total commercial lending$732$545
Total consumer lending (a)1,5491,581
Total nonperforming loans (b) (c)2,2812,126
OREO and foreclosed assets
Other real estate owned (OREO)259279
Foreclosed and other assets1220
Total OREO and foreclosed assets 271299
Total nonperforming assets$2,552$2,425
Nonperforming loans to total loans1.10%1.03%
Nonperforming assets to total loans, OREO and foreclosed assets1.231.17
Nonperforming assets to total assets.71.68
(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)Nonperforming loans exclude certain government insured or guaranteed loans, loans held for sale, loans accounted for under the fair value option and purchased impaired loans.
(c)The recorded investment of loans collateralized by residential real estate property that are in process of foreclosure was $.5 billion and $.6 billion at March 31, 2016 and December 31, 2015, both included $.3 billion of loans that are government insured/guaranteed.

Nonperforming loans also include certain 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 within this Note.

Total nonperforming loans in the nonperforming assets table above include TDRs of $1.2 billion at March 31, 2016 and $1.1 billion at December 31, 2015. TDRs that are performing, including consumer credit card TDR loans, totaled $1.2 billion at both March 31, 2016 and December 31, 2015, and are excluded from nonperforming loans. Nonperforming TDRs are returned to accrual and classified as performing after demonstrating a period of at least six months of consecutive performance under the restructured terms. Loans where borrowers have been discharged from personal liability through Chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to PNC and loans to borrowers not currently obligated to make both principal and interest payments under the restructured terms are not returned to accrual status.

Additional Asset Quality Indicators

We have two overall portfolio segments – Commercial Lending and Consumer Lending. Each of these two segments is comprised of multiple 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 Lending segment is comprised of the commercial, commercial real estate, equipment lease financing, and commercial purchased impaired loan classes. The Consumer Lending segment is comprised of the home equity, residential real estate, credit card, other consumer, and consumer purchased impaired loan classes.

Commercial Lending Asset Classes

Commercial Loan Class

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 granularity in the risk monitoring process on an ongoing basis. These ratings are reviewed and updated, generally at least once per year. Additionally, no less frequently than on an annual basis, we review PD rates related to each rating grade based upon internal historical data. These rates are updated as needed and augmented by market data as deemed necessary. For small balance homogenous pools of commercial loans, mortgages and leases, we apply statistical modeling to assist in determining the probability of default within these pools. Further, on a periodic basis, we update our LGD estimates associated with each rating grade based upon historical data. The combination of the PD and LGD ratings assigned to a commercial loan, capturing both the combination of expectations of default and loss severity in event of default, reflects the relative estimated likelihood of loss for that loan at the reporting date. In general, loans with better PD and LGD tend to have a lower likelihood of loss compared to loans with worse PD and LGD. The loss amount also considers an estimate of exposure at date of default, which we also periodically update based upon historical data.

Based upon the amount of the lending arrangement and our risk rating assessment, we follow a formal schedule of written periodic review. Quarterly, we conduct formal reviews of a market's or business unit's entire loan portfolio, focusing on those loans which we perceive to be of higher risk, based upon PDs and LGDs, or loans for which credit quality is weakening. If circumstances warrant, it is our practice to review any customer obligation and its level of credit risk more frequently. We attempt to proactively manage our loans by using various procedures that are customized to the risk of a given loan, including ongoing outreach, contact, and assessment of obligor financial conditions, collateral inspection and appraisal.

Commercial Real Estate Loan Class

We manage credit risk associated with our commercial real estate projects and commercial mortgage activities similar to commercial loans by analyzing PD and LGD. 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 also performed to assess market/geographic risk and business unit/industry risk. Often as a result of these overviews, more in-depth reviews and increased scrutiny are placed on areas of higher risk, including adverse changes in risk ratings, deteriorating operating trends, and/or areas that concern management. These reviews are designed to assess risk and take actions to mitigate our exposure to such risks.

Equipment Lease Financing Loan Class

We manage credit risk associated with our equipment lease financing loan class similar to commercial loans by analyzing PD and LGD.

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 quarterly, 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.

Commercial Purchased Impaired Loan Class

Estimates of the expected cash flows primarily determine the valuation of commercial purchased impaired loans. Commercial cash flow estimates are influenced by a number of credit related items, which include but are not limited to: 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.

See Note 4 Purchased Loans for additional information.

Table 48: Commercial Lending Asset Quality Indicators (a)(b)
Criticized Commercial Loans
PassSpecialTotal
In millionsRated Mention (c)Substandard (d)Doubtful (e)Loans
March 31, 2016
Commercial $93,617$1,837$3,680$153$99,287
Commercial real estate 27,57191441728,110
Equipment lease financing 7,24510023187,584
Purchased impaired loans 23 210024 149
Total commercial lending $128,456$2,030$4,452$192$135,130
December 31, 2015
Commercial $93,364$2,029$3,089$90$98,572
Commercial real estate 26,729120481527,335
Equipment lease financing 7,2308715017,468
Purchased impaired loans 61576 169
Total commercial lending $127,323$2,242$3,877$102$133,544
(a)Based upon PDs and LGDs. We apply a split rating classification to certain loans meeting threshold criteria. By assigning a split classification, a loan's exposure amount may be split into more than one classification category in the above table.
(b)Loans are included above based on the Regulatory Classification definitions of "Pass", "Special Mention", "Substandard" and "Doubtful".
(c)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 a more adverse classification at this time.
(d)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.
(e)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.

Consumer Lending Asset Classes

Home Equity and Residential Real Estate Loan Classes

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

Delinquency/Delinquency Rates: We monitor trending of delinquency/delinquency rates for home equity and residential real estate loans. See the Asset Quality section of this Note 3 for additional information.

Nonperforming Loans: We monitor trending of nonperforming loans for home equity and residential real estate loans. See the Asset Quality section of this Note 3 for additional information.

Credit Scores: We use a national third-party provider to update FICO credit scores for home equity loans and lines of credit and residential real estate loans at least quarterly. The updated scores are incorporated into a series of credit management reports, which are utilized to monitor the risk in the loan classes.

LTV (inclusive of combined loan-to-value (CLTV) for first and subordinate lien positions): At least annually, we update the property values of real estate collateral and calculate an updated LTV ratio. For open-end credit lines secured by real estate in regions experiencing significant declines in property values, more frequent valuations may occur. We examine LTV migration and stratify LTV into categories to monitor the risk in the loan classes.

Historically, we used, and we continue to use, a combination of original LTV and updated LTV for internal risk management and reporting purposes (e.g., line management, loss mitigation strategies). In addition to the fact that estimated property values by their nature are estimates, given certain data limitations it is important to note that updated LTVs may be based upon management’s assumptions (e.g., if an updated LTV is not provided by the third-party service provider, home price index (HPI) changes will be incorporated in arriving at management’s estimate of updated LTV).

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 updated FICO scores, originated and updated LTV ratios and geographic location assigned to home equity loans and lines of credit and residential real estate loans is used to monitor the risk in the loan classes. Loans with higher FICO scores and lower LTVs tend to have a lower level of risk. Conversely, loans with lower FICO scores, higher LTVs, and in certain geographic locations tend to have a higher level of risk.

Consumer Purchased Impaired Loan Class

Estimates of the expected cash flows primarily determine the valuation 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, updated FICO scores, the current economic environment, updated LTV ratios and the date of origination. These key factors are monitored to help ensure that concentrations of risk are managed and cash flows are maximized.

See Note 4 Purchased Loans for additional information.

Table 49: Home Equity and Residential Real Estate Balances
March 31December 31
In millions20162015
Home equity and residential real estate loans - excluding purchased impaired loans (a)$42,007$42,268
Home equity and residential real estate loans - purchased impaired loans (b)3,5373,684
Government insured or guaranteed residential real estate mortgages (a)892923
Difference between outstanding balance and recorded investment in purchased impaired loans (306)(331)
Total home equity and residential real estate loans (a)$46,130$46,544
(a)Represents recorded investment.
(b)Represents outstanding balance.

Table 50: Home Equity and Residential Real Estate Asset Quality Indicators – Excluding Purchased Impaired Loans (a) (b)
Home Equity Residential Real Estate
March 31, 2016 - in millions1st Liens 2nd Liens Total
Current estimated LTV ratios (c)
Greater than or equal to 125% and updated FICO scores:
Greater than 660$238$917$275$1,430
Less than or equal to 660 (d) (e)4117362276
Missing FICO16310
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 6606261,6685542,848
Less than or equal to 660 (d) (e)8728698471
Missing FICO34613
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 6606821,4495962,727
Less than or equal to 660 9421781392
Missing FICO13913
Less than 90% and updated FICO scores:
Greater than 66013,7627,6389,51530,915
Less than or equal to 6601,2888885842,760
Missing FICO3316103152
Total home equity and residential real estate loans$16,856$13,265$11,886$42,007

Home Equity Residential Real Estate
December 31, 2015 - in millions 1st Liens 2nd Liens Total
Current estimated LTV ratios (c)
Greater than or equal to 125% and updated FICO scores:
Greater than 660$283$960$284$1,527
Less than or equal to 660 (d) (e)4018968297
Missing FICO18514
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 6606461,7335642,943
Less than or equal to 660 (d) (e)92302102496
Missing FICO34815
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 6606981,4926152,805
Less than or equal to 660 8822694408
Missing FICO131014
Less than 90% and updated FICO scores:
Greater than 66013,8957,8089,11730,820
Less than or equal to 6601,2829235702,775
Missing FICO3118105154
Total home equity and residential real estate loans$17,060$13,666$11,542$42,268
(a)Excludes purchased impaired loans of approximately $3.2 billion and $3.4 billion in recorded investment, certain government insured or guaranteed residential real estate mortgages of approximately $.9 billion and $.9 billion, and loans held for sale at March 31, 2016 and December 31, 2015, respectively. See the Home Equity and Residential Real Estate Asset Quality Indicators - Purchased Impaired Loans table below for additional information on purchased impaired loans.
(b)Amounts shown represent recorded investment.
(c)Based upon updated LTV (inclusive of combined loan-to-value (CLTV) for first and subordinate lien positions). Updated LTV is estimated using modeled property values. These ratios are updated at least semi-annually. The related estimates and inputs are based upon an approach that uses a combination of third-party automated valuation models (AVMs), broker price opinions (BPOs), HPI indices, property location, internal and external balance information, origination data and management assumptions. We generally utilize origination lien balances provided by a third-party, where applicable, which do not include an amortization assumption when calculating updated LTV. Accordingly, the results of these calculations do not represent actual appraised loan level collateral or updated LTV based upon lien balances held by others, and as such, are necessarily imprecise and subject to change as we enhance our methodology.
(d)Higher risk loans are defined as loans with both an updated FICO score of less than or equal to 660 and an updated LTV greater than or equal to 100%.
(e)The following states had the highest percentage of higher risk loans at March 31, 2016: New Jersey 15%, Pennsylvania 13%, Illinois 12%, Ohio 11%, Florida 7%, Maryland 6% and Michigan 5%. The remainder of the states had lower than 4% of the higher risk loans individually, and collectively they represent approximately 31% of the higher risk loans. The following states had the highest percentage of higher risk loans at December 31, 2015: New Jersey 14%, Pennsylvania 12%, Illinois 11%, Ohio 11%, Florida 7%, Maryland 7% and Michigan 5%. The remainder of the states had lower than 4% of the high risk loans individually, and collectively they represent approximately 33% of the higher risk loans.

Table 51: Home Equity and Residential Real Estate Asset Quality Indicators – Purchased Impaired Loans (a)
Home Equity (b) (c)Residential Real Estate (b) (c)
March 31, 2016 - in millions 1st Liens 2nd Liens Total
Current estimated LTV ratios (d)
Greater than or equal to 125% and updated FICO scores:
Greater than 660$6$157$179$342
Less than or equal to 660 57173149
Missing FICO6410
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 6609311167487
Less than or equal to 660 10132115257
Missing FICO8715
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 6609161120290
Less than or equal to 660 67270148
Missing FICO437
Less than 90% and updated FICO scores:
Greater than 6601153356171,067
Less than or equal to 66087176443706
Missing FICO1123043
Missing LTV and updated FICO scores:
Greater than 66011112
Less than or equal to 66044
Total home equity and residential real estate loans$249$1,445$1,843$3,537

Home Equity (b) (c ) Residential Real Estate (b) (c)
December 31, 2015 - in millions 1st Liens 2nd Liens Total
Current estimated LTV ratios (d)
Greater than or equal to 125% and updated FICO scores:
Greater than 660$6$164$147$317
Less than or equal to 660 67976161
Missing FICO7512
Greater than or equal to 100% to less than 125% and updated FICO scores:
Greater than 66012331186529
Less than or equal to 660 9145118272
Missing FICO8715
Greater than or equal to 90% to less than 100% and updated FICO scores:
Greater than 66010167133310
Less than or equal to 660 67568149
Missing FICO437
Less than 90% and updated FICO scores:
Greater than 6601063456651,116
Less than or equal to 66091182455728
Missing FICO1133145
Missing LTV and updated FICO scores:
Greater than 66011415
Less than or equal to 660167
Missing FICO11
Total home equity and residential real estate loans$249$1,520$1,915$3,684
(a)Amounts shown represent outstanding balance. See Note 4 Purchased Loans for additional information.
(b)For the estimate of cash flows utilized in our purchased impaired loan accounting, other assumptions and estimates are made, including amortization of first lien balances, pre-payment rates, etc., which are not reflected in this table.
(c)The following states had the highest percentage of purchased impaired loans at March 31, 2016: California 16%, Florida 14%, Illinois 11%, Ohio 9%, North Carolina 7%, and Michigan 5%. The remainder of the states had lower than a 4% concentration of purchased impaired loans individually, and collectively they represent approximately 38% of the purchased impaired portfolio. The following states had the highest percentage of purchased impaired loans at December 31, 2015: California 16%, Florida 14%, Illinois 11%, Ohio 9%, North Carolina 7% and Michigan 5%. The remainder of the states had lower than a 4% concentration of purchased impaired loans individually, and collectively they represent approximately 38% of the purchased impaired portfolio.
(d)Based upon updated LTV (inclusive of combined loan-to-value (CLTV) for first and subordinate lien positions). Updated LTV is estimated using modeled property values. These ratios are updated at least semi-annually. The related estimates and inputs are based upon an approach that uses a combination of third-party automated valuation models (AVMs), broker price opinions (BPOs), HPI indices, property location, internal and external balance information, origination data and management assumptions. We generally utilize origination lien balances provided by a third-party, where applicable, which do not include an amortization assumption when calculating updated LTV. Accordingly, the results of these calculations do not represent actual appraised loan level collateral or updated LTV based upon lien balances held by others, and as such, are necessarily imprecise and subject to change as we enhance our methodology.

Credit Card and Other Consumer 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 generally obtained monthly, as well as a variety of credit bureau attributes. 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.

Table 52: Credit Card and Other Consumer Loan Classes Asset Quality Indicators
Credit Card (a)Other Consumer (b)
% of Total Loans% of Total Loans
Using FICOUsing FICO
Dollars in millionsAmountCredit MetricAmountCredit Metric
March 31, 2016
FICO score greater than 719$2,84560%$9,42465%
650 to 7191,333283,58425
620 to 64919945374
Less than 62021956254
No FICO score available or required (c)15033882
Total loans using FICO credit metric4,746100%14,558100%
Consumer loans using other internal credit metrics (b)6,921
Total loan balance$4,746$21,479
Weighted-average updated FICO score (d) 734744
December 31, 2015
FICO score greater than 719$2,93660%$9,37165%
650 to 7191,346283,53424
620 to 64920245234
Less than 62022756044
No FICO score available or required (c)15135013
Total loans using FICO credit metric4,862100%14,533100%
Consumer loans using other internal credit metrics (b)7,213
Total loan balance$4,862$21,746
Weighted-average updated FICO score (d) 734744
(a)At March 31, 2016, we had $33 million of credit card loans that are higher risk (i.e., loans with both updated FICO scores less than 660 and in late stage (90+ days) delinquency status). The majority of the March 31, 2016 balance related to higher risk credit card loans was geographically distributed throughout the following areas: Ohio 16%, Pennsylvania 16%, New Jersey 8%, Michigan 7%, Florida 7%, Illinois 6%, Indiana 5%, Maryland 5%, North Carolina 4%, and Kentucky 4%. All other states had less than 3% individually and make up the remainder of the balance. At December 31, 2015, we had $34 million of credit card loans that are higher risk. The majority of the December 31, 2015 balance related to higher risk credit card loans was geographically distributed throughout the following areas: Ohio 17%, Pennsylvania 15%, Michigan 8%, New Jersey 8%, Florida 7%, Illinois 6%, Indiana 6%, Maryland 4% and North Carolina 4%. All other states had less than 4% individually and make up the remainder of the balance.
(b)Other consumer loans for which updated 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 generally refers to new accounts issued to borrowers with limited credit history, accounts for which we cannot obtain an updated FICO score (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 updated FICO score excludes accounts with no FICO score available or required.

Troubled Debt Restructurings (TDRs)
Table 53: Summary of Troubled Debt Restructurings
March 31December 31
In millions20162015
Total commercial lending $500$434
Total consumer lending1,8911,917
Total TDRs$2,391$2,351
Nonperforming $1,172$1,119
Accruing (a)1,2191,232
Total TDRs$2,391$2,351
(a)Accruing loans include consumer credit card loans and loans that have demonstrated a period of at least six months of performance under the restructured terms and are excluded from nonperforming loans. Loans where borrowers have been discharged from personal liability through Chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to PNC and loans to borrowers not currently obligated to make both principal and interest payments under the restructured terms are not returned to accrual status.

We held specific reserves in the ALLL of $.3 billion at both March 31, 2016 and December 31, 2015, respectively, for the total TDR portfolio.

Table 54 quantifies the number of loans that were classified as TDRs as well as the change in the loans’ recorded investment as a result of becoming a TDR during the three months ended March 31, 2016 and March 31, 2015, respectively. Additionally, the table provides information about the types of TDR concessions. See Note 3 Asset Quality in our 2015 Form 10-K for additional discussion of TDR concessions.

Table 54: Financial Impact and TDRs by Concession Type (a)
Pre-TDRPost-TDR Recorded Investment (c)
During the three months ended March 31, 2016NumberRecordedPrincipalRate
Dollars in millionsof LoansInvestment (b)Forgiveness (d)Reduction (e)Other (f)Total
Total commercial lending42$168$10$142$152
Total consumer lending2,96568442064
Total TDRs3,007$236$54$162$216
During the three months ended March 31, 2015
Dollars in millions
Total commercial lending38$63$1$2$50$53
Total consumer lending 2,73871422567
Total TDRs2,776$134$1$44$75$120
(a)Impact of partial charge-offs at TDR date are included in this table.
(b)Represents the recorded investment of the loans as of the quarter end prior to TDR designation, and excludes immaterial amounts of accrued interest receivable.
(c)Represents the recorded investment of the TDRs as of the end of the quarter in which the TDR occurs, and excludes immaterial amounts of accrued interest receivable.
(d)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.
(e)Includes reduced interest rate and interest deferral. The TDRs within this category result in reductions to future interest income.
(f)Primarily includes consumer borrowers that have been discharged from personal liability through Chapter 7 bankruptcy and have not formally reaffirmed their loan obligations to PNC, as well as postponement/reduction of scheduled amortization and contractual extensions for both consumer and commercial borrowers.

After a loan is determined to be a TDR, we continue to track its performance under its most recent restructured terms. We consider a TDR to have subsequently defaulted when it becomes 60 days past due after the most recent date the loan was restructured. The recorded investment of loans that were both (i) classified as TDRs or were subsequently modified during each 12-month period preceding January 1, 2016 and January 1, 2015, respectively, and (ii) subsequently defaulted during the three months ended March 31, 2016 and March 31, 2015 totaled $27 million and $23 million, respectively.

See Note 3 Asset Quality in our 2015 Form 10-K for additional discussion on TDRs.

Impaired Loans

Impaired loans include commercial nonperforming loans and consumer and commercial TDRs, regardless of nonperforming status. TDRs that were previously recorded at amortized cost and are now classified and accounted for as held for sale are also included. Excluded from impaired loans are nonperforming leases, loans accounted for as held for sale other than the TDRs described in the preceding sentence, loans accounted for under the fair value option, smaller balance homogeneous type loans and purchased impaired loans. See Note 4 Purchased Loans for additional information. Nonperforming equipment lease financing loans of $20 million and $7 million at March 31, 2016 and December 31, 2015, 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 three months ended March 31, 2016 and March 31, 2015. The following table provides further detail on impaired loans individually evaluated for impairment and the associated ALLL. Certain commercial and consumer impaired loans do not have a related ALLL as the valuation of these impaired loans exceeded the recorded investment.

Table 55: Impaired Loans
UnpaidAverage
PrincipalRecordedAssociatedRecorded
In millionsBalanceInvestmentAllowance (a) Investment (b)
March 31, 2016
Impaired loans with an associated allowance
Commercial $468$359$134$348
Commercial real estate 21810530117
Home equity 1,036929205920
Residential real estate 27426432264
Credit card 10710623107
Other consumer 31 24 1 25
Total impaired loans with an associated allowance$2,134$1,787$425$1,781
Impaired loans without an associated allowance
Commercial $416$316$217
Commercial real estate 210156157
Home equity 409179192
Residential real estate 495381389
Other consumer 2488
Total impaired loans without an associated allowance$1,554$1,040$963
Total impaired loans$3,688$2,827$425$2,744
December 31, 2015
Impaired loans with an associated allowance
Commercial $442$337$84$306
Commercial real estate 25413035197
Home equity978909216965
Residential real estate 27226435359
Credit card 10810824118
Other consumer 31 26 1 32
Total impaired loans with an associated allowance$2,085$1,774$395$1,977
Impaired loans without an associated allowance
Commercial $201$118$87
Commercial real estate 206158168
Home equity 464206158
Residential real estate 512396346
Other consumer 2488
Total impaired loans without an associated allowance$1,407$886$767
Total impaired loans $3,492$2,660$395$2,744
(a)Associated allowance amounts include $.3 billion for TDRs at both March 31, 2016 and December 31, 2015.
(b)Average recorded investment is for the three months ended March 31, 2016 and the year ended December 31, 2015, respectively.