LOANS AND LEASES

The Company’s loans and leases are disclosed in portfolio segments and classes. The Company’s loan and lease portfolio segments are commercial and retail. The classes of loans and leases are: commercial, commercial real estate, leases, residential mortgages, home equity loans, home equity lines of credit, home equity loans serviced by others, home equity lines of credit serviced by others, automobile, student, credit cards and other retail. The Company’s SBO portfolio consists of purchased home equity loans and lines that were originally serviced by others, which the Company now services a portion of internally. A summary of the loans and leases portfolio is presented below:



	December 31,
(in millions)	2016		2015
Commercial		$37,274		$33,264
Commercial real estate	10,624		8,971
Leases	3,753		3,979
Total commercial	51,651		46,214
Residential mortgages	15,115		13,318
Home equity loans	1,858		2,557
Home equity lines of credit	14,100		14,674
Home equity loans serviced by others	750		986
Home equity lines of credit serviced by others	219		389
Automobile	13,938		13,828
Student	6,610		4,359
Credit cards	1,691		1,634
Other retail	1,737		1,083
Total retail	56,018		52,828
Total loans and leases ^{(1) (2)}		$107,669		$99,042

⁽¹⁾ Excluded from the table above are loans held for sale totaling $625 million and $365 million as of December 31, 2016 and 2015, respectively.

⁽²⁾Mortgage loans serviced for others by the Company’s subsidiaries are not included above, and amounted to $17.3 billion and $17.6 billion at December 31, 2016 and 2015, respectively.

During the year ended December 31, 2016, the Company purchased $1.2 billion of student loans, $695 million of automobile loans and $539 million of residential mortgages. During the year ended December 31, 2015, the Company purchased $957 million of student loans, $1.3 billion of automobile loans and $1.1 billion of residential mortgages.

During the year ended December 31, 2016, the Company sold $310 million of TDRs, including $255 million of residential mortgages and $55 million of home equity loans, which resulted in a pre-tax gain of $72 million reported in other income on the Consolidated Statements of Operations. Additionally, during the year ended December 31, 2016, the Company sold $444 million of residential mortgage loans and $147 million of commercial loans. During the year ended December 31, 2015, the Company sold $273 million of residential mortgage loans, $401 million of commercial loans and $41 million of credit card balances.

Loans held for sale at fair value totaled $583 million and $325 million at December 31, 2016 and 2015, respectively, and consisted of residential mortgages originated for sale of $504 million and loans in the commercial trading portfolio of $79 million as of December 31, 2016. As of December 31, 2015, residential mortgages originated for sale were $268 million and loans in the commercial trading portfolio totaled $57 million. Other loans held for sale totaled $42 million and $40 million as of December 31, 2016 and 2015, respectively, and consisted of commercial loan syndications.

Loans pledged as collateral for FHLB borrowed funds, primarily residential mortgages and home equity loans, totaled $24.0 billion and $23.2 billion at December 31, 2016 and 2015, respectively. This collateral consists primarily of residential mortgages and home equity loans. Loans pledged as collateral to support the contingent ability to borrow at the FRB discount window, if necessary, totaled $16.8 billion and $15.9 billion at December 31, 2016 and 2015, respectively.

The Company is engaged in the leasing of equipment for commercial use, with primary lease concentrations to Fortune 1000 companies for large capital equipment acquisitions. A lessee is evaluated from a credit perspective using the same underwriting standards and procedures as for a loan borrower. A lessee is expected to make rental payments based on its cash flows and the viability of its balance sheet. Leases are usually not evaluated as collateral-based transactions, and therefore the lessee’s overall financial strength is the most important credit evaluation factor.

A summary of the investment in leases, before the ALLL, is presented below:



	December 31,
(in millions)	2016		2015
Direct financing leases		$3,670		$3,898
Leveraged leases	83		81
Total leases		$3,753		$3,979

The components of the investment in leases, before the ALLL, are presented below:



	December 31,
(in millions)	2016			2015
Total future minimum lease rentals		$2,922			$3,195
Estimated residual value of leased equipment (non-guaranteed)	1,166			1,157
Initial direct costs	20			22
Unearned income on minimum lease rentals and estimated residual value of leased equipment	(355		)	(395		)
Total leases		$3,753			$3,979

The future minimum lease rentals on direct financing and leveraged leases at December 31, 2016 are presented below:



Year	(in millions)
2017		$647
2018	610
2019	532
2020	401
2021	274
Thereafter	458
Total		$2,922

There was no investment credit recognized in income during the years ended December 31, 2016, 2015 and 2014.