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

The allowance for credit losses consists of the ALLL and the reserve for unfunded commitments. It 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” to the Company’s audited Consolidated Financial Statements in the Annual Report on Form 10-K for the year ended December 31, 2016, for a detailed discussion of the ALLL reserve methodology 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. There were no 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.

A summary of changes in the allowance for credit losses is presented below:



	Three Months Ended June 30, 2017									Six Months Ended June 30, 2017
(in millions)	Commercial			Retail			Total			Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period		$653			$571			$1,224			$663			$573			$1,236
Charge-offs	(24		)	(104		)	(128		)	(48		)	(213		)	(261		)
Recoveries	10			43			53			15			84			99
Net charge-offs	(14		)	(61		)	(75		)	(33		)	(129		)	(162		)
Provision (credited) charged to income	(25		)	95			70			(16		)	161			145
Allowance for loan and lease losses, end of period	614			605			1,219			614			605			1,219
Reserve for unfunded lending commitments, beginning of period	93			—			93			72			—			72
Provision for unfunded lending commitments	—			—			—			21			—			21
Reserve for unfunded lending commitments as of period end	93			—			93			93			—			93
Total allowance for credit losses as of period end		$707			$605			$1,312			$707			$605			$1,312



	Three Months Ended June 30, 2016									Six Months Ended June 30, 2016
(in millions)	Commercial			Retail			Total			Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period		$633			$591			$1,224			$596			$620			$1,216
Charge-offs	(7		)	(106		)	(113		)	(20		)	(219		)	(239		)
Recoveries	5			43			48			9			82			91
Net charge-offs	(2		)	(63		)	(65		)	(11		)	(137		)	(148		)
Provision charged to income	45			42			87			91			87			178
Allowance for loan and lease losses, end of period	676			570			1,246			676			570			1,246
Reserve for unfunded lending commitments, beginning of period	58			—			58			58			—			58
Provision for unfunded lending commitments	3			—			3			3			—			3
Reserve for unfunded lending commitments as of period end	61			—			61			61			—			61
Total allowance for credit losses as of period end		$737			$570			$1,307			$737			$570			$1,307

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



	June 30, 2017						December 31, 2016
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$491		$804		$1,295		$424		$799		$1,223
Formula-based evaluation	51,397		56,354		107,751		51,227		55,219		106,446
Total		$51,888		$57,158		$109,046		$51,651		$56,018		$107,669

A summary of the allowance for credit losses by evaluation method is presented below:



	June 30, 2017						December 31, 2016
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$42		$43		$85		$63		$43		$106
Formula-based evaluation	665		562		1,227		672		530		1,202
Allowance for credit losses		$707		$605		$1,312		$735		$573		$1,308

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 or potential weakness that indicate an increased probability of future loss. “Criticized” loans are grouped into three categories, “special mention,” “substandard” and “doubtful.” Special mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the Company’s credit position at some future date. Substandard loans are inadequately protected loans; these loans have well-defined weaknesses that could hinder normal repayment or collection of the debt. Doubtful loans have the same weaknesses as substandard, with the added characteristics that the possibility of loss is high and collection of the full amount of the loan is improbable. 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 commercial loans and leases based on regulatory classification ratings is presented below:



	June 30, 2017
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$35,259		$1,169		$622		$279		$37,329
Commercial real estate	10,678		444		53		38		11,213
Leases	3,215		107		24		—		3,346
Total		$49,152		$1,720		$699		$317		$51,888



	December 31, 2016
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$35,010		$1,015		$1,027		$222		$37,274
Commercial real estate	10,146		370		58		50		10,624
Leases	3,583		52		103		15		3,753
Total		$48,739		$1,437		$1,188		$287		$51,651

The recorded investment in classes of retail loans, categorized by delinquency status is presented below:



	June 30, 2017
			Days Past Due
(in millions)	Current		1-29		30-59		60-89		90 or More		Total
Residential mortgages		$15,820		$99		$35		$10		$118		$16,082
Home equity loans	1,430		96		12		5		63		1,606
Home equity lines of credit	13,071		366		52		22		185		13,696
Home equity loans serviced by others	582		35		9		5		16		647
Home equity lines of credit serviced by others	135		22		3		1		21		182
Automobile	12,199		991		172		42		45		13,449
Education	7,537		117		18		10		38		7,720
Credit cards	1,636		43		10		7		15		1,711
Other retail	1,982		55		13		8		7		2,065
Total		$54,392		$1,824		$324		$110		$508		$57,158



	December 31, 2016
			Days Past Due
(in millions)	Current		1-29		30-59		60-89		90 or More		Total
Residential mortgages		$14,807		$108		$53		$12		$135		$15,115
Home equity loans	1,628		127		23		7		73		1,858
Home equity lines of credit	13,432		396		57		20		195		14,100
Home equity loans serviced by others	673		41		14		5		17		750
Home equity lines of credit serviced by others	158		25		3		2		31		219
Automobile	12,509		1,177		172		38		42		13,938
Education	6,379		151		24		13		43		6,610
Credit cards	1,611		43		12		9		16		1,691
Other retail	1,676		45		8		4		4		1,737
Total		$52,873		$2,113		$366		$110		$556		$56,018

Nonperforming Assets

The following table presents nonperforming loans and leases and loans accruing and 90 days or more past due:



	Nonperforming				Accruing and 90 days or more past due
(in millions)	June 30, 2017		December 31, 2016		June 30, 2017		December 31, 2016
Commercial		$376		$322		$4		$2
Commercial real estate	38		50		—		—
Leases	—		15		—		—
Total commercial	414		387		4		2
Residential mortgages⁽¹⁾	135		144		12		18
Home equity loans	81		98		—		—
Home equity lines of credit	235		243		—		—
Home equity loans serviced by others	27		32		—		—
Home equity lines of credit serviced by others	25		33		—		—
Automobile	55		50		—		—
Education	35		38		3		5
Credit card	15		16		—		—
Other retail	3		4		5		1
Total retail	611		658		20		24
Total		$1,025		$1,045		$24		$26

⁽¹⁾ Nonperforming balances exclude first lien residential mortgage loans that are 100% guaranteed by the Federal Housing Administration. These loans, which are accruing and 90 days or more past due, totaled $12 million and $18 million as of June 30, 2017 and December 31, 2016, respectively. Nonperforming balances also exclude guaranteed residential mortgage loans sold to GNMA for which the Company has the right, but not the obligation, to repurchase. These loans totaled $28 million and $32 million as of June 30, 2017 and December 31, 2016, respectively. These loans are consolidated on the Company’s Consolidated Balance Sheets.

Other nonperforming assets consist primarily of other real estate owned and are presented in other assets on the Consolidated Balance Sheets. A summary of other nonperforming assets is presented below:



(in millions)	June 30, 2017		December 31, 2016
Nonperforming assets, net of valuation allowance:
Commercial		$—		$—
Retail	37		49
Nonperforming assets, net of valuation allowance		$37		$49

A summary of key performance indicators is presented below:



	June 30, 2017		December 31, 2016
Nonperforming commercial loans and leases as a percentage of total loans and leases	0.38	%	0.36	%
Nonperforming retail loans as a percentage of total loans and leases	0.56		0.61
Total nonperforming loans and leases as a percentage of total loans and leases	0.94	%	0.97	%

Nonperforming commercial assets as a percentage of total assets	0.26	%	0.26	%
Nonperforming retail assets as a percentage of total assets	0.44		0.47
Total nonperforming assets as a percentage of total assets	0.70	%	0.73	%

The recorded investment in mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings are in process was $173 million and $177 million as of June 30, 2017 and December 31, 2016, respectively.

An analysis of the age of both accruing and nonaccruing loan and lease past due amounts is presented below:



	June 30, 2017								December 31, 2016
	Days Past Due								Days Past Due
(in millions)	30-59		60-89		90 or More		Total		30-59		60-89		90 or More		Total
Commercial		$9		$6		$380		$395		$36		$4		$324		$364
Commercial real estate	3		5		38		46		1		2		50		53
Leases	—		—		—		—		1		—		15		16
Total commercial	12		11		418		441		38		6		389		433
Residential mortgages	35		10		118		163		53		12		135		200
Home equity loans	12		5		63		80		23		7		73		103
Home equity lines of credit	52		22		185		259		57		20		195		272
Home equity loans serviced by others	9		5		16		30		14		5		17		36
Home equity lines of credit serviced by others	3		1		21		25		3		2		31		36
Automobile	172		42		45		259		172		38		42		252
Education	18		10		38		66		24		13		43		80
Credit cards	10		7		15		32		12		9		16		37
Other retail	13		8		7		28		8		4		4		16
Total retail	324		110		508		942		366		110		556		1,032
Total		$336		$121		$926		$1,383		$404		$116		$945		$1,465

Impaired loans include nonaccruing larger balance commercial loans (greater than $3 million carrying value) and commercial and retail TDRs (excluding loans held for sale). A summary of impaired loans by class is presented below:



	June 30, 2017
(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		$216		$31		$237		$527		$453
Commercial real estate	35		11		3		39		38
Total commercial	251		42		240		566		491
Residential mortgages	46		3		142		247		188
Home equity loans	49		5		91		187		140
Home equity lines of credit	24		2		186		259		210
Home equity loans serviced by others	37		3		17		64		54
Home equity lines of credit serviced by others	4		—		5		13		9
Automobile	4		—		18		27		22
Education	146		22		—		146		146
Credit cards	25		7		—		26		25
Other retail	9		1		1		12		10
Total retail	344		43		460		981		804
Total		$595		$85		$700		$1,547		$1,295



	December 31, 2016
(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		$247		$55		$134		$431		$381
Commercial real estate	39		8		4		44		43
Total commercial	286		63		138		475		424
Residential mortgages	37		2		141		235		178
Home equity loans	51		3		94		191		145
Home equity lines of credit	23		1		173		240		196
Home equity loans serviced by others	41		4		19		70		60
Home equity lines of credit serviced by others	2		—		7		13		9
Automobile	4		—		15		25		19
Education	154		25		1		155		155
Credit cards	26		6		—		26		26
Other retail	10		2		1		13		11
Total retail	348		43		451		968		799
Total		$634		$106		$589		$1,443		$1,223

Additional information on impaired loans is presented below:



	Three Months Ended June 30,
	2017				2016
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$1		$431		$2		$324
Commercial real estate	—		38		—		58
Total commercial	1		469		2		382
Residential mortgages	2		182		1		160
Home equity loans	1		141		1		158
Home equity lines of credit	1		203		2		184
Home equity loans serviced by others	1		54		1		66
Home equity lines of credit serviced by others	—		9		—		10
Automobile	—		20		—		15
Education	2		146		2		161
Credit cards	1		25		1		26
Other retail	—		10		—		13
Total retail	8		790		8		793
Total		$9		$1,259		$10		$1,175



	Six Months Ended June 30,
	2017				2016
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$2		$414		$3		$248
Commercial real estate	—		41		—		61
Total commercial	2		455		3		309
Residential mortgages	3		178		2		156
Home equity loans	3		140		3		154
Home equity lines of credit	3		197		3		182
Home equity loans serviced by others	2		54		2		67
Home equity lines of credit serviced by others	—		9		—		9
Automobile	—		18		—		14
Education	4		146		4		160
Credit cards	1		24		1		26
Other retail	—		10		—		13
Total retail	16		776		15		781
Total		$18		$1,231		$18		$1,090

Troubled Debt Restructurings

In situations where, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession for other than an insignificant time period to the borrower that it would not otherwise consider, the related loan is classified as a TDR. 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, 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 less costs to sell, to the loan’s recorded investment. Any excess of recorded investment over the present value of expected future cash flows or collateral value is included in the ALLL. 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. For Retail TDR accounts where the expected value of cash flows is utilized, any recorded investment in excess of the present value of expected cash flows is recognized by creating or increasing the ALLL. For Retail TDR accounts assessed based on the fair value of collateral, any portion of the loan’s recorded investment in excess of the collateral value is charged off at the time of modification or at the time of subsequent and regularly recurring valuations.

Commercial TDRs were $136 million and $120 million at June 30, 2017 and December 31, 2016, respectively. Retail TDRs totaled $804 million and $799 million at June 30, 2017 and December 31, 2016, respectively. Unfunded commitments tied to TDRs were $45 million and $42 million at June 30, 2017 and December 31, 2016, respectively.

The table below summarizes how loans were modified during the three months ended June 30, 2017, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances can include loans that became TDRs during the three months ended June 30, 2017 and were paid off in full, charged off, or sold prior to June 30, 2017.



	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	2		$—		$—	11		$13		$13
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	2	—		—		11	13		13
Residential mortgages	25	4		3		25	5		5
Home equity loans	22	1		2		—	—		—
Home equity lines of credit	14	—		—		67	9		9
Home equity loans serviced by others	5	—		—		—	—		—
Home equity lines of credit serviced by others	2	—		—		—	—		—
Automobile	25	—		—		7	—		—
Education	—	—		—		—	—		—
Credit cards	624	4		4		—	—		—
Other retail	—	—		—		—	—		—
Total retail	717	9		9		99	14		14
Total	719		$9		$9	110		$27		$27



	Primary Modification Types
	Other ⁽³⁾
(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	4		$32		$31		$1			$—
Commercial real estate	—	—		—		—			—
Leases	—	—		—		—			—
Total commercial	4	32		31		1			—
Residential mortgages	44	6		6		—			—
Home equity loans	42	2		2		—			—
Home equity lines of credit	112	8		7		—			—
Home equity loans serviced by others	16	—		—		—			—
Home equity lines of credit serviced by others	2	—		—		—			—
Automobile	349	6		6		—			1
Education	7	1		1		1			—
Credit cards	—	—		—		1			—
Other retail	2	—		—		(1		)	—
Total retail	574	23		22		1			1
Total	578		$55		$53		$2			$1

⁽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⁾ Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forgiveness, and capitalizing arrearages. 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 table below summarizes how loans were modified during the three months ended June 30, 2016, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances can include loans that became TDRs during the three months ended June 30, 2016 and were paid off in full, charged off, or sold prior to June 30, 2016.



	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	3		$—		$—	28		$4		$4
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	3	—		—		28	4		4
Residential mortgages	3	1		1		10	2		2
Home equity loans	15	1		1		21	2		2
Home equity lines of credit	6	—		—		8	1		1
Home equity loans serviced by others	3	—		—		—	—		—
Home equity lines of credit serviced by others	2	—		—		3	1		1
Automobile	30	—		—		3	—		—
Education	—	—		—		—	—		—
Credit cards	552	3		3		—	—		—
Other retail	1	—		—		—	—		—
Total retail	612	5		5		45	6		6
Total	615		$5		$5	73		$10		$10



	Primary Modification Types
	Other ⁽³⁾
(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	4		$20		$21		$—			$—
Commercial real estate	—	—		—		—			—
Leases	—	—		—		—			—
Total commercial	4	20		21		—			—
Residential mortgages	67	7		7		—			—
Home equity loans	94	5		5		(1		)	—
Home equity lines of credit	92	6		6		—			—
Home equity loans serviced by others	16	—		—		—			—
Home equity lines of credit serviced by others	5	1		—		—			—
Automobile	348	7		6		—			1
Education	111	2		2		1			—
Credit cards	—	—		—		1			—
Other retail	5	—		—		—			—
Total retail	738	28		26		1			1
Total	742		$48		$47		$1			$1

⁽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).

The table below summarizes how loans were modified during the six months ended June 30, 2017, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances can include loans that became TDRs during the six months ended June 30, 2017 and were paid off in full, charged off, or sold prior to June 30, 2017.



	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	4		$1		$1	18		$14		$14
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	4	1		1		18	14		14
Residential mortgages	43	5		5		36	8		8
Home equity loans	43	2		3		1	—		—
Home equity lines of credit	30	1		1		118	15		15
Home equity loans serviced by others	11	1		1		—	—		—
Home equity lines of credit serviced by others	3	—		—		2	—		—
Automobile	65	1		1		15	—		—
Education	—	—		—		—	—		—
Credit cards	1,189	7		7		—	—		—
Other retail	1	—		—		—	—		—
Total retail	1,385	17		18		172	23		23
Total	1,389		$18		$19	190		$37		$37



	Primary Modification Types
	Other ⁽³⁾
(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	4		$32		$31		$1			$—
Commercial real estate	—	—		—		—			—
Leases	1	4		4		—			—
Total commercial	5	36		35		1			—
Residential mortgages	92	10		10		—			—
Home equity loans	144	8		8		—			—
Home equity lines of credit	187	14		13		—			—
Home equity loans serviced by others	30	1		1		—			—
Home equity lines of credit serviced by others	13	1		1		—			—
Automobile	625	11		10		—			2
Education	22	2		2		1			—
Credit cards	—	—		—		2			—
Other retail	3	—		—		(1		)	—
Total retail	1,116	47		45		2			2
Total	1,121		$83		$80		$3			$2

⁽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).

The table below summarizes how loans were modified during the six months ended June 30, 2016, the charge-offs related to the modifications, and the impact on the ALLL. The reported balances can include loans that became TDRs during the six months ended June 30, 2016 and were paid off in full, charged off, or sold prior to June 30, 2016.



	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	8		$1		$1	54		$8		$8
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	8	1		1		54	8		8
Residential mortgages	25	4		4		16	3		3
Home equity loans	29	2		2		37	4		4
Home equity lines of credit	13	1		1		27	3		3
Home equity loans serviced by others	6	—		—		—	—		—
Home equity lines of credit serviced by others	2	—		—		4	1		1
Automobile	51	1		1		8	—		—
Education	—	—		—		—	—		—
Credit cards	1,081	6		6		—	—		—
Other retail	1	—		—		—	—		—
Total retail	1,208	14		14		92	11		11
Total	1,216		$15		$15	146		$19		$19



	Primary Modification Types
	Other ⁽³⁾
(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	9		$41		$41		($1	)		$—
Commercial real estate	—	—		—		—			—
Leases	—	—		—		—			—
Total commercial	9	41		41		(1		)	—
Residential mortgages	131	15		15		—			—
Home equity loans	181	11		11		(1		)	—
Home equity lines of credit	124	8		8		—			—
Home equity loans serviced by others	34	1		1		—			—
Home equity lines of credit serviced by others	13	1		—		—			—
Automobile	539	10		9		—			1
Education	297	6		6		2			—
Credit cards	—	—		—		1			—
Other retail	8	—		—		—			—
Total retail	1,327	52		50		2			1
Total	1,336		$93		$91		$1			$1

⁽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).

The table below summarizes TDRs that defaulted during the three and six months ended June 30, 2017 and 2016, respectively, within 12 months of their modification date. For purposes of this table, a payment default refers to a loan that becomes 90 days or more past due 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 June 30, 2017 and 2016, respectively. 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.



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
(dollars in millions)	Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted		Number of Contracts	Balance Defaulted
Commercial	4		$1	8		$3	5		$1	11		$3
Commercial real estate	—	—		1	—		1	4		1	—
Total commercial	4	1		9	3		6	5		12	3
Residential mortgages	41	4		35	4		86	10		89	12
Home equity loans	14	1		32	2		23	1		50	3
Home equity lines of credit	65	4		20	1		100	7		45	4
Home equity loans serviced by others	9	—		11	—		10	—		21	1
Home equity lines of credit serviced by others	1	—		6	—		4	—		11	—
Automobile	27	1		22	1		61	1		37	1
Education	9	—		18	1		16	—		31	1
Credit cards	102	1		85	—		228	2		206	1
Other retail	—	—		—	—		2	—		—	—
Total retail	268	11		229	9		530	21		490	23
Total	272		$12	238		$12	536		$26	502		$26

Concentrations of Credit Risk

Most of the Company’s lending 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 June 30, 2017 and December 31, 2016, the Company had a significant amount of loans collateralized by residential and commercial real estate. There were no significant concentration risks within the commercial loan or retail loan portfolios. 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 tables present balances of loans with these characteristics:



	June 30, 2017
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Education		Total
High loan-to-value		$484		$370		$366		$—		$—		$1,220
Interest only/negative amortization	1,705		—		—		—		1		1,706
Low introductory rate	—		—		—		142		—		142
Multiple characteristics and other	3		—		—		—		—		3
Total		$2,192		$370		$366		$142		$1		$3,071



	December 31, 2016
(in millions)	Residential Mortgages		Home Equity Loans and Lines of Credit		Home Equity Products Serviced by Others		Credit Cards		Education		Total
High loan-to-value		$566		$550		$476		$—		$—		$1,592
Interest only/negative amortization	1,582		—		—		—		1		1,583
Low introductory rate	—		—		—		112		—		112
Multiple characteristics and other	3		—		—		—		—		3
Total		$2,151		$550		$476		$112		$1		$3,290