ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK

The ALLL is increased through a provision for credit losses that is charged to earnings, based on the Company’s quarterly evaluation of the loan portfolio, and is reduced by net charge-offs and the ALLL associated with sold loans. See Note 1 “Significant Accounting Policies” for a detailed discussion of ALLL methodologies and estimation techniques.

On a quarterly basis, the Company reviews and refines its estimate of the allowance for credit losses, taking into consideration changes in portfolio size and composition, historical loss experience, internal risk ratings, current economic conditions, industry performance trends and other pertinent information.

During 2013, the Company modified the way that it establishes the ALLL. The ALLL is reviewed separately for commercial and retail loan portfolios, and the ALLL for each includes an adjustment for qualitative reserves that includes certain risks, factors and events that might not be measured in the statistical analysis. As a result of this change, the unallocated reserve was absorbed into the separately measured commercial and retail qualitative reserves.

Additionally, during December 2013, the Company revised and extended its incurred loss period for certain residential mortgages. This change reflects management's recognition that incurred but unrealized losses emerge differently during various points of an economic/business cycle. Incurred Loss Periods (“ILPs”) are not static and move over time based on several factors. As economies expand and contract, access to credit, jobs, and liquidity moves directionally with the economy. ILPs will be longer in stronger economic times, when borrowers have the financial ability to withstand adversity and the ILPs will be shorter in an adverse economic environment, when the borrower has less financial flexibility. Since the current economy has not been as strong as the economy during the 2002-2006 time period, we believe that ILPs will not be as long, but rather directional to our history. Since overall Company reserves are deemed adequate, there was no need to increase the reserve but rather reallocate some of the general reserves to cover the $96 million incurred loss period increase.

There were no other material changes in assumptions or estimation techniques compared with prior periods that impacted the determination of the current period’s ALLL and the reserve for unfunded lending commitments.

The following is a summary of changes in the allowance for credit losses:



	Year Ended December 31, 2014
(in millions)	Commercial			Retail			Total
Allowance for loan and lease losses as of January 1, 2014		$498			$723			$1,221
Charge-offs	(43		)	(450		)	(493		)
Recoveries	58			112			170
Net recoveries (charge-offs)	15			(338		)	(323		)
Provision charged to income	31			266			297
Allowance for loan and lease losses as of December 31, 2014	544			651			1,195
Reserve for unfunded lending commitments as of January 1, 2014	39			—			39
Provision for unfunded lending commitments	22			—			22
Reserve for unfunded lending commitments as of December 31, 2014	61			—			61
Total allowance for credit losses as of December 31, 2014		$605			$651			$1,256



	Year Ended December 31, 2013
(in millions)	Commercial			Retail			Unallocated			Total
Allowance for loan and lease losses as of January 1, 2013		$509			$657			$89			$1,255
Charge-offs	(108		)	(595		)	—			(703		)
Recoveries	87			115			—			202
Net charge-offs	(21		)	(480		)	—			(501		)
Sales/Other	(6		)	(6		)	(1		)	(13		)
Provision charged to income	(19		)	396			103			480
Transfer of unallocated reserve to qualitative reserve	35			60			(95		)	—
Loss emergence period change	—			96			(96		)	—
Allowance for loan and lease losses as of December 31, 2013	498			723			—			1,221
Reserve for unfunded lending commitments as of January 1, 2013	40			—			—			40
Credit for unfunded lending commitments	(1		)	—			—			(1		)
Reserve for unfunded lending commitments as of December 31, 2013	39			—			—			39
Total allowance for credit losses as of December 31, 2013		$537			$723			$—			$1,260



	Year Ended December 31, 2012
(in millions)	Commercial			Retail			Unallocated			Total
Allowance for loan and lease losses as of January 1, 2012		$691			$816			$191			$1,698
Charge-offs	(257		)	(853		)	—			(1,110		)
Recoveries	113			122			—			235
Net charge-offs	(144		)	(731		)	—			(875		)
Sales/Other	(2		)	—			—			(2		)
Provision charged to income	(36		)	572			(102		)	434
Allowance for loan and lease losses as of December 31, 2012	509			657			89			1,255
Reserve for unfunded lending commitments as of January 1, 2012	61			—			—			61
Credit for unfunded lending commitments	(21		)	—			—			(21		)
Reserve for unfunded lending commitments as of December 31, 2012	40			—			—			40
Total allowance for credit losses as of December 31, 2012		$549			$657			$89			$1,295

The recorded investment in loans and leases based on the Company’s evaluation methodology is as follows:



	December 31, 2014						December 31, 2013
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$205		$1,208		$1,413		$239		$1,200		$1,439
Formula-based evaluation	43,021		48,976		91,997		39,156		45,264		84,420
Total		$43,226		$50,184		$93,410		$39,395		$46,464		$85,859

The following is a summary of the allowance for credit losses by evaluation method:



	December 31, 2014						December 31, 2013
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$20		$109		$129		$23		$108		$131
Formula-based evaluation	585		542		1,127		514		615		1,129
Allowance for credit losses		$605		$651		$1,256		$537		$723		$1,260

For commercial loans and leases, the Company utilizes regulatory classification ratings to monitor credit quality. Loans with a “pass” rating are those that the Company believes will be fully repaid in accordance with the contractual loan terms. Commercial loans and leases that are “criticized” are those that have some weakness that indicates an increased probability of future loss. For retail loans, the Company primarily uses the loan’s payment and delinquency status to monitor credit quality. The further a loan is past due, the greater the likelihood of future credit loss. These credit quality indicators for both commercial and retail loans are continually updated and monitored.

The recorded investment in classes of commercial loans and leases based on regulatory classification ratings is as follows:



	December 31, 2014
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$30,022		$876		$427		$106		$31,431
Commercial real estate	7,354		329		61		65		7,809
Leases	3,924		12		50		—		3,986
Total		$41,300		$1,217		$538		$171		$43,226



	December 31, 2013
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$27,433		$588		$541		$105		$28,667
Commercial real estate	6,366		339		116		127		6,948
Leases	3,679		40		61		—		3,780
Total		$37,478		$967		$718		$232		$39,395

The recorded investment in classes of retail loans, categorized by delinquency status is as follows:



	December 31, 2014
(in millions)	Current		1-29 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$11,352		$114		$97		$269		$11,832
Home equity loans	2,997		222		60		145		3,424
Home equity lines of credit	14,705		447		73		198		15,423
Home equity loans serviced by others ⁽¹⁾	1,101		78		26		23		1,228
Home equity lines of credit serviced by others ⁽¹⁾	455		66		10		19		550
Automobile	11,839		758		93		16		12,706
Student	2,106		108		25		17		2,256
Credit cards	1,615		39		22		17		1,693
Other retail	985		65		18		4		1,072
Total		$47,155		$1,897		$424		$708		$50,184

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.



	December 31, 2013
(in millions)	Current		1-29 Days Past Due		30-89 Days Past Due		90 Days or More Past Due		Total
Residential mortgages		$9,236		$114		$115		$261		$9,726
Home equity loans	3,808		257		68		168		4,301
Home equity lines of credit	14,868		490		76		233		15,667
Home equity loans serviced by others ⁽¹⁾	1,340		84		32		36		1,492
Home equity lines of credit serviced by others ⁽¹⁾	561		83		11		24		679
Automobile	8,863		481		44		9		9,397
Student	2,012		118		45		33		2,208
Credit cards	1,581		67		22		21		1,691
Other retail	1,205		69		22		7		1,303
Total		$43,474		$1,763		$435		$792		$46,464

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Nonperforming Assets

A summary of nonperforming loans and leases by class is as follows:



	December 31, 2014						December 31, 2013
(in millions)	Nonaccruing		Accruing and 90 Days or More Delinquent		Total Nonperforming Loans and Leases		Nonaccruing		Accruing and 90 Days or More Delinquent		Total Nonperforming Loans and Leases
Commercial		$113		$1		$114		$96		$—		$96
Commercial real estate	50		—		50		169		—		169
Leases	—		—		—		—		—		—
Total commercial	163		1		164		265		—		265
Residential mortgages	345		—		345		382		—		382
Home equity loans	203		—		203		266		—		266
Home equity lines of credit	257		—		257		333		—		333
Home equity loans serviced by others ⁽¹⁾	47		—		47		59		—		59
Home equity lines of credit serviced by others ⁽¹⁾	25		—		25		30		—		30
Automobile	21		—		21		16		—		16
Student	11		6		17		3		31		34
Credit cards	16		1		17		19		2		21
Other retail	5		—		5		10		—		10
Total retail	930		7		937		1,118		33		1,151
Total		$1,093		$8		$1,101		$1,383		$33		$1,416

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

A summary of other nonperforming assets is as follows:



	December 31,
(in millions)	2014		2013
Nonperforming assets, net of valuation allowance:
Commercial		$3		$10
Retail	39		40
Nonperforming assets, net of valuation allowance		$42		$50

Nonperforming assets consists primarily of other real estate owned and is presented in other assets on the Consolidated Balance Sheets.

A summary of key performance indicators is as follows:



	December 31,
	2014		2013
Nonperforming commercial loans and leases as a percentage of total loans and leases	0.18	%	0.31	%
Nonperforming retail loans as a percentage of total loans and leases	1.00		1.34
Total nonperforming loans and leases as a percentage of total loans and leases	1.18		1.65

Nonperforming commercial assets as a percentage of total assets	0.13		0.23
Nonperforming retail assets as a percentage of total assets	0.73		0.97
Total nonperforming assets as a percentage of total assets	0.86	%	1.20	%

The following is an analysis of the age of the past due amounts (accruing and nonaccruing):



	December 31, 2014						December 31, 2013
(in millions)	30-89 Days Past Due		90 Days or More Past Due		Total Past Due		30-89 Days Past Due		90 Days or More Past Due		Total Past Due
Commercial		$57		$114		$171		$61		$96		$157
Commercial real estate	26		50		76		34		169		203
Leases	3		—		3		24		—		24
Total commercial	86		164		250		119		265		384
Residential mortgages	97		269		366		115		261		376
Home equity loans	60		145		205		68		168		236
Home equity lines of credit	73		198		271		76		233		309
Home equity loans serviced by others ⁽¹⁾	26		23		49		32		36		68
Home equity lines of credit serviced by others ⁽¹⁾	10		19		29		11		24		35
Automobile	93		16		109		44		9		53
Student	25		17		42		45		33		78
Credit cards	22		17		39		22		21		43
Other retail	18		4		22		22		7		29
Total retail	424		708		1,132		435		792		1,227
Total		$510		$872		$1,382		$554		$1,057		$1,611

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Impaired loans include: (1) nonaccruing larger balance commercial loans (greater than $3 million carrying value); and (2) commercial and retail TDRs. The following is a summary of impaired loan information by class:



	December 31, 2014
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$124		$19		$36		$178		$160
Commercial real estate	7		1		38		62		45
Total commercial	131		20		74		240		205
Residential mortgages	157		18		288		605		445
Home equity loans	129		11		141		335		270
Home equity lines of credit	75		3		86		193		161
Home equity loans serviced by others ⁽¹⁾	75		9		16		102		91
Home equity lines of credit serviced by others ⁽¹⁾	4		1		7		14		11
Automobile	2		1		9		16		11
Student	167		48		—		167		167
Credit cards	32		13		—		32		32
Other retail	17		5		3		23		20
Total retail	658		109		550		1,487		1,208
Total		$789		$129		$624		$1,727		$1,413

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.



	December 31, 2013
(in millions)	Impaired Loans With a Related Allowance		Allowance on Impaired Loans		Impaired Loans Without a Related Allowance		Unpaid Contractual Balance		Total Recorded Investment in Impaired Loans
Commercial		$86		$15		$33		$214		$119
Commercial real estate	76		8		44		221		120
Total commercial	162		23		77		435		239
Residential mortgages	174		42		267		588		441
Home equity loans	104		17		143		301		247
Home equity lines of credit	77		—		87		192		164
Home equity loans serviced by others ⁽¹⁾	86		10		14		110		100
Home equity lines of credit serviced by others ⁽¹⁾	5		1		7		15		12
Automobile	2		—		8		15		10
Student	159		21		—		159		159
Credit cards	42		14		—		42		42
Other retail	21		3		4		28		25
Total retail	670		108		530		1,450		1,200
Total		$832		$131		$607		$1,885		$1,439

⁽¹⁾The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Additional information on impaired loans is as follows:



	For the Year Ended December 31,
	2014				2013				2012
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$9		$198		$1		$157		$1		$276
Commercial real estate	2		98		1		149		1		310
Total commercial	11		296		2		306		2		586
Residential mortgages	14		429		7		419		4		236
Home equity loans	8		246		5		228		2		200
Home equity lines of credit	4		149		2		90		—		38
Home equity loans serviced by others ⁽¹⁾	5		91		5		102		6		118
Home equity lines of credit serviced by others ⁽¹⁾	—		11		—		12		—		9
Automobile	—		7		—		8		—		5
Student	8		153		7		140		—		11
Credit cards	2		31		3		41		—		—
Other retail	1		21		1		25		1		28
Total retail	42		1,138		30		1,065		13		645
Total		$53		$1,434		$32		$1,371		$15		$1,231

⁽¹⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

Troubled Debt Restructurings

A loan modification is identified as a TDR when the Company or a bankruptcy court grants the borrower a concession the Company would not otherwise make in response to the borrower’s financial difficulties. TDRs typically result from the Company's loss mitigation efforts and are undertaken in order to improve the likelihood of recovery and continuity of the relationship. The Company's loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower's financial needs. Concessions granted in TDRs for all classes of loans may include lowering the interest rate, forgiving a portion of principal, extending the loan term, lowering scheduled payments for a specified period of time, principal forbearance, or capitalizing past due amounts. A rate increase can be a concession if the increased rate is lower than a market rate for debt with risk similar to that of the restructured loan. TDRs for commercial loans and leases may also involve creating a multiple note structure, accepting non-cash assets, accepting an equity interest, or receiving a performance-based fee. In some cases a TDR may involve multiple concessions. The financial effects of TDRs for all loan classes may include lower income (either due to a lower interest rate or a delay in the timing of cash flows), larger loan loss provisions, and accelerated charge-offs if the modification renders the loan collateral-dependent. In some cases interest income throughout the term of the loan may increase if, for example, the loan is extended or the interest rate is increased as a result of the restructuring.

Because TDRs are impaired loans, the Company measures impairment by comparing the present value of expected future cash flows, or when appropriate, the fair value of collateral, to the loan’s recorded investment. Any excess of recorded investment over the present value of expected future cash flows or collateral value is recognized by creating a valuation allowance or increasing an existing valuation allowance. Any portion of the loan’s recorded investment the Company does not expect to collect as a result of the modification is charged off at the time of modification.

Commercial TDRs were $176 million and $167 million on December 31, 2014 and 2013, respectively. Retail TDRs totaled $1.2 billion on December 31, 2014 and 2013. Commitments to lend additional funds to debtors owing receivables which were TDRs were $53 million and $52 million on December 31, 2014 and 2013, respectively.

The following table summarizes how loans were modified during the year ended December 31, 2014, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2014, and were paid off in full, charged off, or sold prior to December 31, 2014.



	Primary Modification Types
	Interest Rate Reduction ⁽¹⁾					Maturity Extension ⁽²⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	25		$8		$7	131		$21		$22
Commercial real estate	9	1		2		15	3		2
Total commercial	34	9		9		146	24		24
Residential mortgages	126	17		17		40	6		5
Home equity loans	125	8		9		85	5		6
Home equity lines of credit	7	—		—		276	17		16
Home equity loans serviced by others ⁽³⁾	42	2		2		—	—		—
Home equity lines of credit serviced by others ⁽³⁾	4	—		—		1	—		—
Automobile	75	1		1		18	—		—
Credit cards	2,165	12		12		—	—		—
Other retail	3	—		—		—	—		—
Total retail	2,547	40		41		420	28		27
Total	2,581		$49		$50	566		$52		$51



	Primary Modification Types
	Other ⁽⁴⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	27		$52		$74		$3			$—
Commercial real estate	1	7		7		—			3
Total commercial	28	59		81		3			3
Residential mortgages	393	47		46		(4		)	1
Home equity loans	1,046	63		62		(1		)	2
Home equity lines of credit	356	25		21		—			5
Home equity loans serviced by others ⁽³⁾	138	5		5		(1		)	—
Home equity lines of credit serviced by others ⁽³⁾	39	2		2		—			—
Automobile	1,039	17		13		—			5
Student	1,675	31		31		5			—
Other retail	57	2		1		(1		)	—
Total retail	4,743	192		181		(2		)	13
Total	4,771		$251		$262		$1			$16

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁴⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forbearance, capitalizing arrearages, and principal forgiveness. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification.

The following table summarizes how loans were modified during the year ended December 31, 2013, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2013, and were paid off in full, charged off, or sold prior to December 31, 2013.



	Primary Modification Types
	Interest Rate Reduction ⁽¹⁾					Maturity Extension ⁽²⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	126		$13		$13	134		$18		$18
Commercial real estate	11	7		7		3	1		1
Total commercial	137	20		20		137	19		19
Residential mortgages	200	32		33		46	5		6
Home equity loans	196	15		16		94	6		6
Home equity lines of credit	18	1		1		2,081	80		70
Home equity loans serviced by others ⁽³⁾	31	2		2		5	—		—
Home equity lines of credit serviced by others ⁽³⁾	3	—		—		1	—		—
Automobile	238	2		2		2	—		—
Credit cards	2,729	15		15		—	—		—
Other retail	21	—		—		—	—		—
Total retail	3,436	67		69		2,229	91		82
Total	3,573		$87		$89	2,366		$110		$101



	Primary Modification Types
	Other ⁽⁴⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	6		$1		$1		$—			$1
Commercial real estate	1	—		—		(2		)	—
Total commercial	7	1		1		(2		)	1
Residential mortgages	430	64		63		5			2
Home equity loans	995	57		51		2			5
Home equity lines of credit	771	53		46		—			16
Home equity loans serviced by others ⁽³⁾	269	12		10		—			3
Home equity lines of credit serviced by others ⁽³⁾	43	2		1		—			1
Automobile	1,323	13		10		—			3
Student	2,620	48		47		—			—
Other retail	148	3		3		—			1
Total retail	6,599	252		231		7			31
Total	6,606		$253		$232		$5			$32

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

The following table summarizes how loans were modified during the year ended December 31, 2012, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances include loans that became TDRs during 2012, and were paid off in full, charged off, or sold prior to December 31, 2012.



	Primary Modification Types
	Interest Rate Reduction ⁽¹⁾					Maturity Extension ⁽²⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Commercial	18		$13		$13	108		$25		$24
Commercial real estate	4	9		9		6	14		13
Total commercial	22	22		22		114	39		37
Residential mortgages	346	77		80		36	4		5
Home equity loans	218	18		19		48	4		5
Home equity lines of credit	1	—		—		109	6		6
Home equity loans serviced by others ⁽³⁾	41	2		2		7	1		—
Home equity lines of credit serviced by others⁽³⁾	3	—		—		—	—		—
Credit cards	2,965	17		16		—	—		—
Total retail	3,574	114		117		200	15		16
Total	3,596		$136		$139	314		$54		$53



	Primary Modification Types
	Other ⁽⁴⁾
(dollars in millions)	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Net Change⁽⁵⁾ to ALLL Resulting from Modification			Charge-offs Resulting from Modification
Commercial	180		$43		$46		($29	)		$14
Commercial real estate	16	72		74		(26		)	2
Total commercial	196	115		120		(55		)	16
Residential mortgages	2,331	203		195		(4		)	9
Home equity loans	2,336	130		117		(2		)	14
Home equity lines of credit	1,554	92		72		—			20
Home equity loans serviced by others ⁽³⁾	1,192	50		37		(8		)	13
Home equity lines of credit serviced by others ⁽³⁾	322	17		13		—			4
Automobile	2,938	19		14		(4		)	4
Student	7,557	139		138		3			—
Credit cards	—	—		—		2			—
Other retail	263	6		3		—			4
Total retail	18,493	656		589		(13		)	68
Total	18,689		$771		$709		($68	)		$84

⁽¹⁾ Includes modifications that consist of multiple concessions, one of which is an interest rate reduction.

⁽²⁾ Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction).

⁽³⁾ The Company's SBO portfolio consists of home equity loans and lines that were originally serviced by others. The Company now services a portion of this portfolio internally.

⁽⁵⁾ Retail data is estimated for certain loan classes.

The table below summarizes TDRs that defaulted during the years ended December 31, 2014, 2013 and 2012 within 12 months of their modification date. For purposes of this table, a payment default is defined as being past due 90 days or more under the modified terms. Amounts represent the loan's recorded investment at the time of payment default. Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to December 31, 2014 and 2013. If a TDR of any loan type becomes 90 days past due after being modified, the loan is written down to the fair value of collateral less cost to sell. The amount written off is charged to the ALLL.



	For the Year Ended December 31,
	2014			2013			2012
(dollars in millions)	Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted
Commercial	37		$12	18		$1	4		$3
Commercial real estate	3	1		3	1		1	5
Total commercial	40	13		21	2		5	8
Residential mortgages	301	35		526	60		208	35
Home equity loans	329	24		740	43		318	31
Home equity lines of credit	229	12		394	21		187	15
Home equity loans serviced by others ⁽¹⁾	60	2		187	3		194	14
Home equity lines of credit serviced by others ⁽¹⁾	20	—		42	2		14	1
Automobile	112	1		208	1		143	1
Student	355	7		885	17		—	—
Credit cards	579	3		548	3		628	4
Other retail	12	—		33	1		8	—
Total retail	1,997	84		3,563	151		1,700	101
Total	2,037		$97	3,584		$153	1,705		$109

⁽¹⁾ The Company's SBO portfolio consists of loans that were originally serviced by others. The Company now services a portion of this portfolio internally.

Concentrations of Credit Risk

Most of the Company's business activity is with customers located in the New England, Mid-Atlantic and Midwest regions. Generally, loans are collateralized by assets including real estate, inventory, accounts receivable, other personal property and investment securities. As of December 31, 2014 and 2013, the Company had a significant amount of loans collateralized by residential and commercial real estate. There are no significant concentrations in particular industries within the commercial loan portfolio. Exposure to credit losses arising from lending transactions may fluctuate with fair values of collateral supporting loans, which may not perform according to contractual agreements. The Company's policy is to collateralize loans to the extent necessary; however, unsecured loans are also granted on the basis of the financial strength of the applicant and the facts surrounding the transaction.

Certain loan products, including residential mortgages, home equity loans and lines of credit, and credit cards, have contractual features that may increase credit exposure to the Company in the event of an increase in interest rates or a decline in housing values. These products include loans that exceed 90% of the value of the underlying collateral (high LTV loans), interest-only and negative amortization residential mortgages, and loans with low introductory rates. Certain loans have more than one of these characteristics.

The following table presents balances of loans with these characteristics:



	December 31, 2014
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products serviced by others		Credit Cards		Total
High loan-to-value		$773		$1,743		$1,025		$—		$3,541
Interest only/negative amortization	894		—		—		—		894
Low introductory rate	—		—		—		98		98
Multiple characteristics and other	24		—		—		—		24
Total		$1,691		$1,743		$1,025		$98		$4,557



	December 31, 2013
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products serviced by others		Credit Cards		Total
High loan-to-value		$1,054		$2,798		$1,581		$—		$5,433
Interest only/negative amortization	882		—		—		—		882
Low introductory rate	—		—		—		119		119
Multiple characteristics and other	96		—		—		—		96
Total		$2,032		$2,798		$1,581		$119		$6,530