ALLOWANCE FOR LOAN AND LEASE LOSSES

9 Months Ended

Sep. 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”). Collectively, these are referred to as the “Day 2 Provision for Credit Losses.” 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 September 30, 2024								Three Months Ended September 30, 2023
	Commercial		Consumer		SVB		Total		Commercial		Consumer		SVB		Total
Balance at beginning of period	$	1,103	$	153	$	444	$	1,700	$	968	$	173	$	496	$	1,637



Provision (benefit) for loan and lease losses	78		—		45		123		166		(10)		56		212
Charge-offs	(116)		(8)		(53)		(177)		(83)		(7)		(109)		(199)
Recoveries	11		5		16		32		13		4		6		23
Balance at end of period	$	1,076	$	150	$	452	$	1,678	$	1,064	$	160	$	449	$	1,673

The moderate decrease in the ALLL at September 30, 2024 compared to June 30, 2024 was primarily due to changes in credit quality and lower loan balances, partially offset by changes in the macroeconomic forecast, higher specific reserves, and the estimate related to Hurricane Helene.


dollars in millions	Nine Months Ended September 30, 2024								Nine Months Ended September 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	203		(5)		113		311		396		(9)		65		452
Total provision (benefit) for loan and lease losses	203		(5)		113		311		435		34		445		914
Charge-offs	(287)		(21)		(156)		(464)		(207)		(21)		(209)		(437)
Recoveries	34		10		40		84		33		11		10		54
Balance at end of period	$	1,076	$	150	$	452	$	1,678	$	1,064	$	160	$	449	$	1,673

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

Provision for Credit Losses


dollars in millions	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Day 2 Provision for Loan and Lease Losses	$	—	$	—	$	—	$	462
Provision for loan and lease losses	123		212		311		452
Total provision for loan and lease losses	123		212		311		914
Day 2 Provision for Off-balance Sheet Credit Exposure	—		—		—		254
Benefit from off-balance sheet credit exposure	(6)		(17)		(35)		(42)
Total (benefit) provision for off-balance sheet credit exposure	(6)		(17)		(35)		212
(Benefit) provision for investment securities available for sale credit losses	—		(3)		—		—
Provision for credit losses	$	117	$	192	$	276	$	1,126