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Loans and Leases
 6 Months Ended
Jun. 30, 2022
Receivables [Abstract]  
Loans and Leases LOANS AND LEASES
The following tables as of June 30, 2022 include loan and lease balances acquired in the CIT Merger, which were recorded at fair value on the Merger Date. Refer to Note 2 — Business Combinations for further information. Refer to Note 1 — Accounting Policies and Basis of Presentation for updates to our accounting policies related to loans.

Unless otherwise noted, loans held for sale are not included in the following tables. Leases in the following tables include finance leases, but exclude operating lease equipment.

Loans by Class
dollars in millionsJune 30, 2022December 31, 2021
Commercial
Commercial construction$2,783 $1,238 
Owner occupied commercial mortgage13,795 12,099 
Non-owner occupied commercial mortgage9,167 3,041 
Commercial and industrial23,554 5,937 
Leases2,178 271 
Total commercial51,477 22,586 
Consumer
Residential mortgage12,441 6,088 
Revolving mortgage1,893 1,818 
Consumer auto1,338 1,332 
Consumer other586 548 
Total consumer16,258 9,786 
Total loans and leases$67,735 $32,372 

At June 30, 2022 and December 31, 2021, accrued interest receivable on loans included in other assets was $142 million and $87 million, respectively, and was excluded from the estimate of credit losses.

The following table presents selected components of the amortized cost of loans.

Components of Amortized Cost
dollars in millionsJune 30, 2022December 31, 2021
Deferred fees, including unearned fees and unamortized costs on non-PCD loans$48$32
Net unamortized discount on purchased loans
Non-PCD$77$11
PCD6129 
Total net unamortized discount$138$40
The aging of the outstanding loans and leases, by class, at June 30, 2022 and December 31, 2021 is provided in the tables below. Loans and leases less than 30 days past due are considered current, as various grace periods allow borrowers to make payments within a stated period after the due date and still remain in compliance with the respective agreement.

Loans and Leases - Delinquency Status
June 30, 2022
dollars in millions30-59 Days
Past Due		60-89 Days
Past Due		90 Days or
Greater		Total
Past Due		CurrentTotal
Commercial
Commercial construction$1 $— $19 $20 $2,763 $2,783 
Owner occupied commercial mortgage24 3 27 54 13,741 13,795 
Non-owner occupied commercial mortgage7 9 18 34 9,133 9,167 
Commercial and industrial73 26 46 145 23,409 23,554 
Leases37 21 14 72 2,106 2,178 
Total commercial142 59 124 325 51,152 51,477 
Consumer
Residential mortgage67 11 87 165 12,276 12,441 
Revolving mortgage8 3 8 19 1,874 1,893 
Consumer auto7 1 1 9 1,329 1,338 
Consumer other3 1 1 5 581 586 
Total consumer85 16 97 198 16,060 16,258 
Total loans and leases$227 $75 $221 $523 $67,212 $67,735 
December 31, 2021
dollars in millions30-59 Days
Past Due		60-89 Days
Past Due		90 Days or
Greater		Total
Past Due		CurrentTotal
Commercial
Commercial construction$1 $— $2 $3 $1,235 $1,238 
Owner occupied commercial mortgage21 1 9 31 12,068 12,099 
Non-owner occupied commercial mortgage3 — 2 5 3,036 3,041 
Commercial and industrial8 3 5 16 5,921 5,937 
Leases— 1 1 2 269 271 
Total commercial33 5 19 57 22,529 22,586 
Consumer
Residential mortgage24 6 23 53 6,035 6,088 
Revolving mortgage6 2 6 14 1,804 1,818 
Consumer auto6 1 1 8 1,324 1,332 
Consumer other2 2 1 5 543 548 
Total consumer38 11 31 80 9,706 9,786 
Total loans and leases$71 $16 $50 $137 $32,235 $32,372 
The amortized cost, by class, of loans and leases on non-accrual status, and loans and leases greater than 90 days past due and still accruing at June 30, 2022 and December 31, 2021 are presented below.

Loans on Non-Accrual Status (1) (2)
June 30, 2022December 31, 2021
dollars in millionsNon-Accrual LoansLoans >
90 Days and
Accruing		Non-Accrual LoansLoans >
90 Days and
Accruing
Commercial
Commercial construction$21 $19 $4 $— 
Owner occupied commercial mortgage42 6 18 5 
Non-owner occupied commercial mortgage120 — 5 — 
Commercial and industrial202 24 15 1 
Leases28 6 3 — 
Total commercial413 55 45 6 
Consumer
Residential mortgage77 44 54 — 
Revolving mortgage19 — 18 — 
Consumer auto3 — 3 — 
Consumer other1 1 1 1 
Total consumer100 45 76 1 
Total loans and leases$513 $100 $121 $7 
(1)Accrued interest that was reversed when the loan went to non-accrual status was $2 million for the six months ended June 30, 2022.
(2)Non-accrual loans for which there was no related ACL totaled $51 million at June 30, 2022 and $15 million at December 31, 2021.

Other real estate owned (“OREO”) and repossessed assets were $45 million as of June 30, 2022 and $40 million as of December 31, 2021.

Credit quality indicators
Loans and leases are monitored for credit quality on a recurring basis. Commercial loans and leases and consumer loans have different credit quality indicators as a result of the unique characteristics of the loan classes being evaluated. The credit quality indicators for Non-PCD commercial loans and leases are developed through a review of individual borrowers on an ongoing basis. Commercial loans are evaluated periodically with more frequent evaluations done on criticized loans. The indicators as of the date presented are based on the most recent assessment performed and are defined below:

Pass – A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.

Special mention – A special mention asset has potential weaknesses which deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.

Substandard – A substandard asset is inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.

Doubtful – An asset classified as doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently existing facts, conditions and values.

Loss – Assets classified as loss are considered uncollectible and of such little value it is inappropriate to be carried as an asset. This classification is not necessarily equivalent to any potential for recovery or salvage value, but rather it is not appropriate to defer a full charge-off even though partial recovery may be affected in the future.
Ungraded – Ungraded loans represent loans not included in the individual credit grading process due to their relatively small balances or borrower type. The majority of ungraded loans at June 30, 2022 and December 31, 2021, relate to business credit cards. Business credit card loans are subject to automatic charge-off when they become 120 days past due in the same manner as unsecured consumer lines of credit.

The credit quality indicator for consumer loans is based on delinquency status of the borrower as of the date presented. As the borrower becomes more delinquent, the likelihood of loss increases. An exemption is applied to government guaranteed loans as the principal repayments are insured by the Federal Housing Administration (“FHA”) and U.S. Department of Veterans Affairs and thus remain on accrual status regardless of delinquency status.

The following table summarizes the commercial loans disaggregated by year of origination and by risk rating. The consumer loan delinquency status by year of origination is also presented below. The tables reflect the amortized cost of the loans and include PCD loans.

Commercial Loans - Risk Classifications by Class
June 30, 2022
Risk Classification:Term Loans by Origination YearRevolving Converted to Term Loans
dollars in millions202220212020201920182017 & PriorRevolvingTotal
Commercial construction
Pass$509 $816 $696 $421 $64 $84 $58 $— $2,648 
Special Mention2 — 28 — 28 — — — 58 
Substandard2 — — 56 11 5 — — 74 
Doubtful— — — 3 — — — — 3 
Ungraded— — — — — — — — — 
Total commercial construction513 816 724 480 103 89 58 — 2,783 
Owner occupied commercial mortgage
Pass1,451 3,275 3,116 1,986 1,125 2,211 158 — 13,322 
Special Mention4 6 31 34 18 71 4 — 168 
Substandard3 24 38 50 68 117 4 — 304 
Doubtful— — — — — 1 — — 1 
Ungraded— — — — — — — — — 
Total owner occupied commercial mortgage1,458 3,305 3,185 2,070 1,211 2,400 166 — 13,795 
Non-owner occupied commercial mortgage
Pass1,131 1,706 1,819 1,648 832 1,212 43 — 8,391 
Special Mention— 1 41 115 3 11 1 — 172 
Substandard4 15 17 321 58 173 — — 588 
Doubtful— — — 5 — 11 — — 16 
Ungraded— — — — — — — — — 
Total non-owner occupied commercial mortgage1,135 1,722 1,877 2,089 893 1,407 44 — 9,167 
Commercial and industrial
Pass5,002 4,980 2,506 2,041 1,167 1,210 4,966 48 21,920 
Special Mention49 81 103 82 78 47 18 — 458 
Substandard51 68 132 149 157 193 274 1 1,025 
Doubtful— 4 1 1 11 30 12 — 59 
Ungraded— — — — — — 92 — 92 
Total commercial and industrial5,102 5,133 2,742 2,273 1,413 1,480 5,362 49 23,554 
Leases
Pass343 583 521 309 136 127 — — 2,019 
Special Mention8 17 18 11 7 1 — — 62 
Substandard11 28 22 16 10 2 — — 89 
Doubtful1 2 2 2 1 — — — 8 
Ungraded— — — — — — — — — 
Total leases363 630 563 338 154 130 — — 2,178 
Total commercial$8,571 $11,606 $9,091 $7,250 $3,774 $5,506 $5,630 $49 $51,477 
Consumer Loans - Delinquency Status by Class
June 30, 2022
Days Past Due:Term Loans by Origination YearRevolving Converted to Term Loans
dollars in millions202220212020201920182017 & PriorRevolvingTotal
Residential mortgage
Current$1,988 $3,784 $2,219 $877 $455 $2,934 $19 $— $12,276 
30-59 days5 6 3 4 6 43 — — 67 
60-89 days— — 1 1 — 9 — — 11 
90 days or greater— 1 1 3 37 45 — — 87 
Total residential mortgage1,993 3,791 2,224 885 498 3,031 19 — 12,441 
Revolving mortgage
Current— — — — — — 1,742 132 1,874 
30-59 days— — — — — — 5 3 8 
60-89 days— — — — — — 1 2 3 
90 days or greater— — — — — — 1 7 8 
Total revolving mortgage— — — — — — 1,749 144 1,893 
Consumer auto
Current301 484 271 148 85 40 — — 1,329 
30-59 days— 2 2 1 1 1 — — 7 
60-89 days— — 1 — — — — — 1 
90 days or greater— 1 — — — — — — 1 
Total consumer auto301 487 274 149 86 41 — — 1,338 
Consumer other
Current86 102 17 8 22 9 337 — 581 
30-59 days— — — — — — 3 — 3 
60-89 days— — — — — — 1 — 1 
90 days or greater— — — — — — 1 — 1 
Total consumer other86 102 17 8 22 9 342 — 586 
Total consumer$2,380 $4,380 $2,515 $1,042 $606 $3,081 $2,110 $144 $16,258 
 
The following tables represent current credit quality indicators by origination year as of December 31, 2021.

Commercial Loans - Risk Classifications by Class
December 31, 2021
Risk Classification:Term Loans by Origination YearRevolving Converted to Term Loans
dollars in millions202120202019201820172016 & PriorRevolvingTotal
Commercial construction
Pass$540 $400 $189 $29 $48 $11 $10 $— $1,227 
Special Mention— — — — — 1 — — 1 
Substandard2 — 1 2 4 1 — — 10 
Doubtful— — — — — — — — — 
Ungraded— — — — — — — — — 
Total commercial construction542 400 190 31 52 13 10 — 1,238 
Owner occupied commercial mortgage
Pass3,045 3,022 1,873 1,194 963 1,572 125 — 11,794 
Special Mention3 35 37 22 13 33 5 — 148 
Substandard31 16 18 12 18 56 6 — 157 
Doubtful— — — — — — — — — 
Ungraded— — — — — — — — — 
Total owner occupied commercial mortgage3,079 3,073 1,928 1,228 994 1,661 136 — 12,099 
Non-owner occupied commercial mortgage
Pass644 737 578 263 266 412 37 — 2,937 
Special Mention1 — — 3 3 10 — — 17 
Substandard9 11 24 12 7 22 1 — 86 
Doubtful— — — — 1 — — — 1 
Ungraded— — — — — — — — — 
Total non-owner occupied commercial mortgage654 748 602 278 277 444 38 — 3,041 
Commercial and industrial
Pass2,107 1,018 599 257 149 281 1,342 5 5,758 
Special Mention9 7 20 2 4 5 5 — 52 
Substandard20 7 3 4 2 2 16 1 55 
Doubtful— — — — — — — — — 
Ungraded— — — — — — 72 — 72 
Total commercial and industrial2,136 1,032 622 263 155 288 1,435 6 5,937 
Leases
Pass93 68 38 42 17 8 — — 266 
Special Mention— 1 — — — — — — 1 
Substandard2 1 — 1 — — — — 4 
Doubtful— — — — — — — — — 
Ungraded— — — — — — — — — 
Total leases95 70 38 43 17 8 — — 271 
Total commercial$6,506 $5,323 $3,380 $1,843 $1,495 $2,414 $1,619 $6 $22,586 

 
Consumer Loans - Delinquency Status by Class
December 31, 2021
Days Past Due:Term Loans by Origination YearRevolving Converted to Term Loans
dollars in millions202120202019201820172016 & PriorRevolvingTotal
Residential mortgage
Current$2,139 $1,663 $627 $368 $349 $867 $22 $— $6,035 
30-59 days2 3 2 2 1 14 — — 24 
60-89 days— — — 1 1 4 — — 6 
90 days or greater1 1 1 2 1 17 — — 23 
Total residential mortgage2,142 1,667 630 373 352 902 22 — 6,088 
Revolving mortgage
Current— — — — — — 1,678 126 1,804 
30-59 days— — — — — — 4 2 6 
60-89 days— — — — — — — 2 2 
90 days or greater— — — — — — 2 4 6 
Total revolving mortgage— — — — — — 1,684 134 1,818 
Consumer auto
Current597 343 198 119 48 19 — — 1,324 
30-59 days1 2 1 1 — 1 — — 6 
60-89 days— — — — — 1 — — 1 
90 days or greater— — — — — 1 — — 1 
Total consumer auto598 345 199 120 48 22 — — 1,332 
Consumer other
Current131 24 11 4 2 29 342 — 543 
30-59 days— — — — — — 2 — 2 
60-89 days1 — — — — — 1 — 2 
90 days or greater— — — — — — 1 — 1 
Total consumer other132 24 11 4 2 29 346 — 548 
Total consumer$2,872 $2,036 $840 $497 $402 $953 $2,052 $134 $9,786 

Purchased loans and leases
The following table summarizes PCD loans and leases that BancShares acquired in the CIT Merger.

PCD Loans and Leases - CIT Merger
dollars in millionsTotal PCD from CIT Merger
UPB$3,550 
Initial PCD ACL(272)
Fair value discount, net of the PCD Gross-Up(45)
Purchase price$3,233 

The recorded fair values of Non-PCD loans acquired in the CIT Merger as of the acquisition date was $29.5 billion, resulting in a PAA discount of $61 million.

Troubled Debt Restructuring
As part of BancShares’ ongoing risk-management practices, BancShares attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Extensions and modifications are made in accordance with internal policies and guidelines to conform to regulatory guidance. BancShares accounts for certain loan modifications or restructurings as troubled debt restructurings (“TDRs”). In general, a modification or restructuring of a loan is considered a TDR if, for economic or legal reasons related to a borrower’s financial difficulties, a concession is granted to the borrower that creditors would not otherwise consider. BancShares may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if is probable that a borrower may default in the foreseeable future. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty.
Concessions may relate to the contractual interest rate, maturity date, payment structure or other actions. The assessments of whether a borrower is experiencing (or is likely to experience) financial difficulty, and whether a concession has been granted, are subjective in nature and management’s judgment is required when determining whether a modification is classified as a TDR. In accordance with regulatory guidance discussed below, certain loan modifications that might ordinarily have qualified as TDRs were not accounted for as TDRs.

The Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (the “Interagency Statement”) was published by banking regulators in April 2020 to clarify expectations around loan modifications and the determination of TDRs for borrowers experiencing COVID-19-related financial difficulty. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) and Interagency Statement offer some practical expedients for evaluating whether loan modifications that occur in response to the COVID-19 pandemic are TDRs. Any loan modification that meets these practical expedients would not automatically be considered a TDR because the borrower is presumed not to be experiencing financial difficulty at the time of the loan modification. BancShares applied this regulatory guidance during its TDR identification process through January 1, 2022 for short-term loan forbearance agreements as a result of COVID-19 and in most cases did not record these as TDRs.

Modified loans that meet the definition of a TDR are subject to BancShares’ individually reviewed loans policy.

The following table presents amortized cost of TDRs.

TDRs
June 30, 2022
dollars in millionsAccruingNon-AccruingTotal
Commercial
Commercial construction$2 $1 $3 
Owner occupied commercial mortgage50 8 58 
Non-owner occupied commercial mortgage28 2 30 
Commercial and industrial25 13 38 
Leases— 1 1 
Total commercial105 25 130 
Consumer
Residential mortgage28 19 47 
Revolving mortgage18 5 23 
Consumer auto2 — 2 
Consumer other1 — 1 
Total consumer49 24 73 
Total TDRs$154 $49 $203 

December 31, 2021
dollars in millionsAccruingNon-AccruingTotal
Commercial
Commercial construction$2 $— $2 
Owner occupied commercial mortgage57 8 65 
Non-owner occupied commercial mortgage26 3 29 
Commercial and industrial12 9 21 
Leases— 1 1 
Total commercial97 21 118 
Consumer
Residential mortgage29 18 47 
Revolving mortgage17 7 24 
Consumer auto2 — 2 
Consumer other1 — 1 
     Total consumer49 25 74 
Total TDRs$146 $46 $192 
The following table summarizes the loan restructurings during the three and six months ended June 30, 2022 and 2021 that were designated as TDRs. BancShares defines payment default as movement of the TDR to non-accrual status, which is generally 90 days past due, foreclosure or charge-off, whichever occurs first.

Restructurings
Three Months Ended June 30,
20222021
dollars in millions (except for number of loans)Number of LoansAmortized Cost at Period EndNumber of LoansAmortized Cost at Period End
Loans and leases
Interest only6 $6 4 $3 
Loan term extension41 4 41 4 
Below market rates25 3 37 8 
Discharge from bankruptcy18 2 39 7 
Total90 $15 121 $22 
Six Months Ended June 30,
20222021
Number of LoansAmortized Cost at Period EndNumber of LoansAmortized Cost at Period End
Loans and leases
Interest only8 $6 10 $10 
Loan term extension76 23 66 8 
Below market rates45 5 90 16 
Discharge from bankruptcy42 4 84 10 
Total171 $38 250 $44 

There were $1 million and $0.4 million of commitments to lend additional funds to borrowers whose loan terms have been modified in TDRs as of June 30, 2022 and December 31, 2021, respectively.

After a loan is determined to be a TDR, BancShares continues to track its performance under its most recent restructured terms. TDRs that subsequently defaulted during the three and six months ended June 30, 2022 and 2021, and were classified as TDRs during the applicable 12-month period preceding June 30, 2022 and 2021 were as follows:

TDR Defaults
Three Months Ended June 30,
dollars in millions20222021
TDR Defaults$1 $1 
Six Months Ended June 30,
20222021
TDR Defaults$3 $5 
Loans Pledged

The following table provides information regarding loans pledged as collateral for borrowing capacity through the FHLB of Atlanta and the Federal Reserve Bank (“FRB”) as of June 30, 2022 and December 31, 2021:

Loans Pledged
dollars in millionsJune 30, 2022December 31, 2021
FHLB of Atlanta
Lendable collateral value of pledged non-PCD loans$14,097 $9,564 
Less: Advances1,785 645 
Less: Letters of Credit750 — 
Available borrowing capacity$11,562 $8,919 
Pledged non-PCD loans (contractual balance)$20,680 $14,507 
FRB
Lendable collateral value of pledged non-PCD loans$4,190 $3,951 
Less: Advances— — 
Available borrowing capacity$4,190 $3,951 
Pledged non-PCD loans (contractual balance)$5,089 $4,806