Allowance for Credit Losses

6 Months Ended

Jun. 30, 2023

ALLOWANCE FOR CREDIT LOSSES

The ACL for loans and leases is reported in the allowance for credit losses on the Consolidated Balance Sheets, while the ACL for unfunded commitments is reported in other liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) unfunded commitments and (iii) investment securities available for sale is reported in the Consolidated Statements of Income as provision or benefit for credit losses.

The initial ACL for PCD loans and leases acquired in the SVBB Acquisition and the CIT Merger (the “Initial PCD ACL”) were established through a PCD Gross-Up and there were no corresponding increases to the provision for credit losses. The PCD Gross-Ups are discussed further in Note 1 — Significant Accounting Policies and Basis of Presentation. The initial ACL for Non-PCD loans and leases acquired in the SVBB Acquisition and the CIT Merger were established through corresponding increases to the provision for credit losses (the “day 2 provision for loans and leases”). The initial ACL for unfunded commitments acquired in the SVBB Acquisition and the CIT Merger were established through a corresponding increase to the provision for unfunded commitments (the “day 2 provision for unfunded commitments”).

The ACL activity for loans and leases, unfunded commitments and investment securities is summarized in the following tables.

ACL for Loans and Leases


dollars in millions	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	800	$	143	$	662	$	1,605	$	789	$	133	$	—	$	922
Initial PCD ACL	—		—		20		20		—		—		220		220
Day 2 provision for loans and leases	—		—		—		—		—		—		462		462
Provision (benefit) for credit losses - loans and leases	172		16		(19)		169		230		29		(19)		240
Total provision (benefit) for credit losses- loans and leases	172		16		(19)		169		230		29		443		702
Charge-offs	(69)		(6)		(101)		(176)		(124)		(13)		(101)		(238)
Recoveries	12		3		4		19		20		7		4		31

Balance at June 30, 2023	$	915	$	156	$	566	$	1,637	$	915	$	156	$	566	$	1,637

	Three Months Ended June 30, 2022								Six Months Ended June 30, 2022
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	743	$	105	$	—	$	848	$	80	$	98	$	—	$	178
Initial PCD ACL	(12)		—		—		(12)		258		14		—		272
Day 2 provision for loans and leases	—		—		—		—		432		22		—		454
Provision (benefit) for credit losses - loans and leases	33		3		—		36		10		(27)		—		(17)
Total provision (benefit) for credit losses- loans and leases	33		3		—		36		442		(5)		—		437
Charge-offs	(36)		(5)		—		(41)		(64)		(10)		—		(74)
Recoveries	12		7		—		19		24		13		—		37
Balance at June 30, 2022	$	740	$	110	$	—	$	850	$	740	$	110	$	—	$	850

ACL for Unfunded Commitments


dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Beginning balance	$	352	$	75	$	106	$	12
Day 2 provision for unfunded commitments	—		—		254		59
(Benefit) provision for unfunded commitments	(17)		6		(25)		10
Total (benefit) provision for credit losses - unfunded commitments	(17)		6		229		69
Ending balance	$	335	$	81	$	335	$	81

ACL for Investment Securities


dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Beginning balance	$	4	$	—	$	—	$	—
(Benefit) provision for credit losses - investment securities available for sale	(1)		—		3		—
Ending balance	$	3	$	—	$	3	$	—