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 September 30, 2017									Nine Months Ended September 30, 2017
(in millions)	Commercial			Retail			Total			Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period		$614			$605			$1,219			$663			$573			$1,236
Charge-offs	(12		)	(108		)	(120		)	(60		)	(321		)	(381		)
Recoveries	12			43			55			27			127			154
Net charge-offs	—			(65		)	(65		)	(33		)	(194		)	(227		)
Provision charged to income	24			46			70			8			207			215
Allowance for loan and lease losses, end of period	638			586			1,224			638			586			1,224
Reserve for unfunded lending commitments, beginning of period	93			—			93			72			—			72
Provision for unfunded lending commitments	2			—			2			23			—			23
Reserve for unfunded lending commitments, end of period	95			—			95			95			—			95
Total allowance for credit losses, end of period		$733			$586			$1,319			$733			$586			$1,319



	Three Months Ended September 30, 2016									Nine Months Ended September 30, 2016
(in millions)	Commercial			Retail			Total			Commercial			Retail			Total
Allowance for loan and lease losses, beginning of period		$676			$570			$1,246			$596			$620			$1,216
Charge-offs	(33		)	(112		)	(145		)	(53		)	(331		)	(384		)
Recoveries	14			48			62			23			130			153
Net charge-offs	(19		)	(64		)	(83		)	(30		)	(201		)	(231		)
Provision (credited) charged to income	(2		)	79			77			89			166			255
Allowance for loan and lease losses, end of period	655			585			1,240			655			585			1,240
Reserve for unfunded lending commitments, beginning of period	61			—			61			58			—			58
Provision for unfunded lending commitments	9			—			9			12			—			12
Reserve for unfunded lending commitments, end of period	70			—			70			70			—			70
Total allowance for credit losses, end of period		$725			$585			$1,310			$725			$585			$1,310

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



	September 30, 2017						December 31, 2016
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$444		$759		$1,203		$424		$799		$1,223
Formula-based evaluation	51,937		57,011		108,948		51,227		55,219		106,446
Total		$52,381		$57,770		$110,151		$51,651		$56,018		$107,669

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



	September 30, 2017						December 31, 2016
(in millions)	Commercial		Retail		Total		Commercial		Retail		Total
Individually evaluated		$46		$35		$81		$63		$43		$106
Formula-based evaluation	687		551		1,238		672		530		1,202
Allowance for credit losses		$733		$586		$1,319		$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:



	September 30, 2017
			Criticized
(in millions)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial		$35,309		$1,368		$770		$259		$37,706
Commercial real estate	10,737		514		146		29		11,426
Leases	3,155		73		21		—		3,249
Total		$49,201		$1,955		$937		$288		$52,381



	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:



	September 30, 2017
			Days Past Due
(in millions)	Current		1-29		30-59		60-89		90 or More		Total
Residential mortgages		$16,323		$141		$31		$10		$114		$16,619
Home equity loans	1,306		101		14		6		56		1,483
Home equity lines of credit	12,874		419		54		23		185		13,555
Home equity loans serviced by others	538		32		9		4		16		599
Home equity lines of credit serviced by others	125		20		3		1		17		166
Automobile	11,917		1,087		197		54		56		13,311
Education	7,803		135		23		12		41		8,014
Credit cards	1,673		47		11		8		15		1,754
Other retail	2,170		60		17		12		10		2,269
Total		$54,729		$2,042		$359		$130		$510		$57,770



	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)	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Commercial		$297		$322		$5		$2
Commercial real estate	28		50		2		—
Leases	—		15		—		—
Total commercial	325		387		7		2
Residential mortgages⁽¹⁾	124		144		15		18
Home equity loans	76		98		—		—
Home equity lines of credit	236		243		—		—
Home equity loans serviced by others	26		32		—		—
Home equity lines of credit serviced by others	21		33		—		—
Automobile	66		50		—		—
Education	38		38		3		5
Credit card	15		16		—		—
Other retail	5		4		5		1
Total retail	607		658		23		24
Total		$932		$1,045		$30		$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 $15 million and $18 million as of September 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 September 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)	September 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:



	September 30, 2017		December 31, 2016
Nonperforming commercial loans and leases as a percentage of total loans and leases	0.30	%	0.36	%
Nonperforming retail loans as a percentage of total loans and leases	0.55		0.61
Total nonperforming loans and leases as a percentage of total loans and leases	0.85	%	0.97	%

Nonperforming commercial assets as a percentage of total assets	0.21	%	0.26	%
Nonperforming retail assets as a percentage of total assets	0.43		0.47
Total nonperforming assets as a percentage of total assets	0.64	%	0.73	%

The recorded investment in mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings are in process was $179 million and $177 million as of September 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:



	September 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		$39		$5		$302		$346		$36		$4		$324		$364
Commercial real estate	4		2		30		36		1		2		50		53
Leases	5		—		—		5		1		—		15		16
Total commercial	48		7		332		387		38		6		389		433
Residential mortgages	31		10		114		155		53		12		135		200
Home equity loans	14		6		56		76		23		7		73		103
Home equity lines of credit	54		23		185		262		57		20		195		272
Home equity loans serviced by others	9		4		16		29		14		5		17		36
Home equity lines of credit serviced by others	3		1		17		21		3		2		31		36
Automobile	197		54		56		307		172		38		42		252
Education	23		12		41		76		24		13		43		80
Credit cards	11		8		15		34		12		9		16		37
Other retail	17		12		10		39		8		4		4		16
Total retail	359		130		510		999		366		110		556		1,032
Total		$407		$137		$842		$1,386		$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:



	September 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		$231		$45		$185		$491		$416
Commercial real estate	24		1		4		39		28
Total commercial	255		46		189		530		444
Residential mortgages	23		2		117		185		140
Home equity loans	42		4		83		167		125
Home equity lines of credit	16		1		181		242		197
Home equity loans serviced by others	31		2		19		60		50
Home equity lines of credit serviced by others	3		—		6		13		9
Automobile	4		—		19		30		23
Education	159		18		20		179		179
Credit cards	25		7		1		26		26
Other retail	5		1		5		11		10
Total retail	308		35		451		913		759
Total		$563		$81		$640		$1,443		$1,203



	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 September 30,
	2017				2016
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$1		$391		$1		$340
Commercial real estate	—		33		—		40
Total commercial	1		424		1		380
Residential mortgages	—		137		1		169
Home equity loans	1		125		2		153
Home equity lines of credit	2		192		2		192
Home equity loans serviced by others	—		51		1		64
Home equity lines of credit serviced by others	—		9		—		9
Automobile	—		21		—		17
Education	3		178		1		159
Credit cards	—		25		—		25
Other retail	—		10		1		12
Total retail	6		748		8		800
Total		$7		$1,172		$9		$1,180



	Nine Months Ended September 30,
	2017				2016
(in millions)	Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment
Commercial		$3		$402		$4		$277
Commercial real estate	—		39		—		53
Total commercial	3		441		4		330
Residential mortgages	3		128		3		161
Home equity loans	4		124		5		151
Home equity lines of credit	5		178		5		182
Home equity loans serviced by others	2		51		3		64
Home equity lines of credit serviced by others	—		9		—		9
Automobile	—		18		—		14
Education	7		178		5		157
Credit cards	1		23		1		25
Other retail	—		10		1		13
Total retail	22		719		23		776
Total		$25		$1,160		$27		$1,106

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 less costs to sell is charged off at the time of modification or at the time of subsequent and regularly recurring valuations.

Commercial TDRs were $153 million and $120 million at September 30, 2017 and December 31, 2016, respectively. Retail TDRs totaled $759 million and $799 million at September 30, 2017 and December 31, 2016, respectively. Unfunded commitments tied to TDRs were $52 million and $42 million at September 30, 2017 and December 31, 2016, respectively.

The table below summarizes how loans were modified during the three months ended September 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 September 30, 2017 and were paid off in full, charged off, or sold prior to September 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	3		$1		$1	17		$8		$7
Commercial real estate	—	—		—		1	—		—
Leases	—	—		—		—	—		—
Total commercial	3	1		1		18	8		7
Residential mortgages	13	1		2		15	1		2
Home equity loans	25	2		1		—	—		—
Home equity lines of credit	11	1		1		86	11		11
Home equity loans serviced by others	3	—		—		—	—		—
Home equity lines of credit serviced by others	—	—		—		—	—		—
Automobile	28	1		1		8	—		—
Education	—	—		—		—	—		—
Credit cards	661	3		3		—	—		—
Other retail	—	—		—		—	—		—
Total retail	741	8		8		109	12		13
Total	744		$9		$9	127		$20		$20



	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	7		$28		$30		$—			$—
Commercial real estate	1	—		—		—			—
Leases	—	—		—		—			—
Total commercial	8	28		30		—			—
Residential mortgages	38	3		3		(1		)	—
Home equity loans	49	3		3		—			—
Home equity lines of credit	110	6		7		—			1
Home equity loans serviced by others	11	1		—		—			—
Home equity lines of credit serviced by others	8	1		—		—			—
Automobile	392	7		6		—			1
Education	67	2		2		—			—
Credit cards	—	—		—		1			—
Other retail	2	—		—		—			—
Total retail	677	23		21		—			2
Total	685		$51		$51		$—			$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).

⁽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 September 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 September 30, 2016 and were paid off in full, charged off, or sold prior to September 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		$—		$—	8		$1		$1
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	3	—		—		8	1		1
Residential mortgages	28	3		3		33	6		5
Home equity loans	36	2		2		2	—		1
Home equity lines of credit	20	1		2		56	6		6
Home equity loans serviced by others	7	1		1		—	—		—
Home equity lines of credit serviced by others	2	—		—		1	—		—
Automobile	26	1		1		6	—		—
Education	—	—		—		—	—		—
Credit cards	544	3		3		—	—		—
Other retail	2	—		—		—	—		—
Total retail	665	11		12		98	12		12
Total	668		$11		$12	106		$13		$13



	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		$6		$5		$4		$—
Commercial real estate	—	—		—		—		—
Leases	—	—		—		—		—
Total commercial	4	6		5		4		—
Residential mortgages	55	5		5		—		—
Home equity loans	52	3		3		—		—
Home equity lines of credit	94	8		7		—		1
Home equity loans serviced by others	17	1		1		—		—
Home equity lines of credit serviced by others	6	—		1		—		—
Automobile	264	5		5		—		—
Education	108	2		2		1		—
Credit cards	—	—		—		1		—
Other retail	3	—		—		—		—
Total retail	599	24		24		2		1
Total	603		$30		$29		$6		$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 nine months ended September 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 nine months ended September 30, 2017 and were paid off in full, charged off, or sold prior to September 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	7		$2		$2	35		$22		$21
Commercial real estate	—	—		—		1	—		—
Leases	—	—		—		—	—		—
Total commercial	7	2		2		36	22		21
Residential mortgages	56	6		7		50	9		10
Home equity loans	68	4		4		1	—		—
Home equity lines of credit	41	2		2		204	26		26
Home equity loans serviced by others	14	1		1		—	—		—
Home equity lines of credit serviced by others	3	—		—		2	—		—
Automobile	93	2		2		23	—		—
Education	—	—		—		—	—		—
Credit cards	1,850	10		10		—	—		—
Other retail	1	—		—		—	—		—
Total retail	2,126	25		26		280	35		36
Total	2,133		$27		$28	316		$57		$57



	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	12		$64		$65		$1			$—
Commercial real estate	1	—		—		—			—
Leases	—	—		—		—			—
Total commercial	13	64		65		1			—
Residential mortgages	122	13		13		(1		)	—
Home equity loans	192	11		11		—			—
Home equity lines of credit	295	20		20		—			1
Home equity loans serviced by others	41	2		1		—			—
Home equity lines of credit serviced by others	21	2		1		—			—
Automobile	1,017	18		16		—			3
Education	235	4		4		1			—
Credit cards	—	—		—		3			—
Other retail	5	—		—		(1		)	—
Total retail	1,928	70		66		2			4
Total	1,941		$134		$131		$3			$4

⁽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 nine months ended September 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 nine months ended September 30, 2016 and were paid off in full, charged off, or sold prior to September 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	11		$1		$1	62		$9		$9
Commercial real estate	—	—		—		—	—		—
Leases	—	—		—		—	—		—
Total commercial	11	1		1		62	9		9
Residential mortgages	53	7		7		49	9		8
Home equity loans	65	4		4		39	4		5
Home equity lines of credit	33	2		3		83	9		9
Home equity loans serviced by others	13	1		1		—	—		—
Home equity lines of credit serviced by others	4	—		—		5	1		1
Automobile	77	2		2		14	—		—
Education	—	—		—		—	—		—
Credit cards	1,625	9		9		—	—		—
Other retail	3	—		—		—	—		—
Total retail	1,873	25		26		190	23		23
Total	1,884		$26		$27	252		$32		$32



	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	13		$47		$46		$3			$—
Commercial real estate	—	—		—		—			—
Leases	—	—		—		—			—
Total commercial	13	47		46		3			—
Residential mortgages	186	20		20		—			—
Home equity loans	233	14		14		(1		)	—
Home equity lines of credit	218	16		15		—			1
Home equity loans serviced by others	51	2		2		—			—
Home equity lines of credit serviced by others	19	1		1		—			—
Automobile	803	15		14		—			1
Education	405	8		8		3			—
Credit cards	—	—		—		2			—
Other retail	11	—		—		—			—
Total retail	1,926	76		74		4			2
Total	1,939		$123		$120		$7			$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 TDRs that defaulted within 12 months of their modification date during the three and nine months ended September 30, 2017 and 2016, respectively. 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 September 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 September 30,						Nine Months Ended September 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	2		$4	5		$1	7		$5	16		$4
Commercial real estate	—	—		—	—		1	4		1	—
Total commercial	2	4		5	1		8	9		17	4
Residential mortgages	35	5		57	7		121	15		146	19
Home equity loans	12	—		14	—		35	1		39	3
Home equity lines of credit	55	4		48	4		152	11		93	8
Home equity loans serviced by others	6	—		7	—		16	—		28	1
Home equity lines of credit serviced by others	4	—		3	—		8	—		14	—
Automobile	42	—		43	—		103	1		80	1
Education	5	1		15	—		41	1		46	1
Credit cards	116	—		117	1		344	2		323	2
Other retail	2	—		2	—		4	—		2	—
Total retail	277	10		306	12		824	31		771	35
Total	279		$14	311		$13	832		$40	788		$39

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 September 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:



	September 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		$436		$260		$319		$—		$—		$1,015
Interest only/negative amortization	1,738		—		—		—		1		1,739
Low introductory rate	—		—		—		165		—		165
Multiple characteristics and other	2		—		—		—		—		2
Total		$2,176		$260		$319		$165		$1		$2,921



	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