ALLOWANCE FOR LOAN AND LEASE LOSSES

6 Months Ended

Jun. 30, 2024

NOTE 5 — ALLOWANCE FOR LOAN AND LEASE LOSSES

The ALLL is reported as a separate line item on the Consolidated Balance Sheets, while the reserve for off-balance sheet credit exposure is included in other liabilities, presented in Note 13—Other Liabilities. The provision or benefit for credit losses related to (i) loans and leases (ii) off-balance sheet credit exposure, and (iii) investment securities available for sale is reported in the Consolidated Statements of Income as provision or benefit for credit losses.

SVBB Acquisition

The initial ALLL for PCD loans and leases acquired in the SVBB Acquisition (the “Initial PCD ALLL”) was established through a PCD gross-up and there was no corresponding increase to the provision for credit losses. The initial ALLL for Non-PCD loans and leases acquired in the SVBB Acquisition was established through a corresponding increase to the provision for credit losses (the “day 2 provision for loan and lease losses”). The initial reserve for off-balance sheet credit exposure acquired in the SVBB Acquisition was established through a corresponding increase to the provision for off-balance sheet credit exposure (the “day 2 provision for off-balance sheet credit exposure”). The accounting policy for loans and off-balance sheet credit exposure acquired in a business combination is further discussed in Note 1—Significant Accounting Policies and Basis of Presentation in the Notes to the Consolidated Financial Statements included in our 2023 Form 10-K.

The ALLL activity for loans and leases is summarized in the following table.

Allowance for Loan and Lease Losses


dollars in millions	Three Months Ended June 30, 2024								Three Months Ended June 30, 2023
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	1,120	$	155	$	462	$	1,737	$	860	$	178	$	567	$	1,605
Initial PCD ALLL	—		—		—		—		4		—		16		20
Day 2 (benefit) provision for loan and lease losses	—		—		—		—		(11)		11		—		—
Provision (benefit) for loan and lease losses	66		1		28		95		173		(13)		9		169
Total provision (benefit) for loan and lease losses	66		1		28		95		162		(2)		9		169
Charge-offs	(96)		(6)		(57)		(159)		(70)		(6)		(100)		(176)
Recoveries	13		3		11		27		12		3		4		19
Balance at end of period	$	1,103	$	153	$	444	$	1,700	$	968	$	173	$	496	$	1,637


dollars in millions	Six Months Ended June 30, 2024								Six Months Ended June 30, 2023
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	1,126	$	166	$	455	$	1,747	$	789	$	133	$	—	$	922
Initial PCD ALLL	—		—		—		—		14		3		203		220
Day 2 provision for loan and lease losses	—		—		—		—		39		43		380		462
Provision (benefit) for loan and lease losses	125		(5)		68		188		230		1		9		240
Total provision (benefit) for loan and lease losses	125		(5)		68		188		269		44		389		702
Charge-offs	(171)		(13)		(103)		(287)		(124)		(14)		(100)		(238)
Recoveries	23		5		24		52		20		7		4		31
Balance at end of period	$	1,103	$	153	$	444	$	1,700	$	968	$	173	$	496	$	1,637

The following table presents the components of the provision for credit losses:

Provision for Credit Losses


dollars in millions	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Day 2 provision for loan and lease losses	$	—	$	—	$	—	$	462
Provision for loan and lease losses	95		169		188		240
Total provision for loan and lease losses	95		169		188		702
Day 2 provision for off-balance sheet credit exposure	—		—		—		254
Benefit from off-balance sheet credit exposure	—		(17)		(29)		(25)
Total (benefit) provision for off-balance sheet credit exposure	—		(17)		(29)		229
(Benefit) provision for investment securities available for sale credit losses	—		(1)		—		3
Provision for credit losses	$	95	$	151	$	159	$	934