ALLOWANCE FOR LOAN AND LEASE LOSSES

12 Months Ended

Dec. 31, 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 14—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.

The Initial PCD ALLL for the SVBB Acquisition and the CIT Merger 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 ALLL 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 Loan and Lease Losses”).

The initial reserve for off-balance sheet credit exposure acquired in the SVBB Acquisition and the CIT Merger were 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 ALLL activity for loans and leases is summarized in the following table:

Allowance for Loan and Lease Losses


dollars in millions	Year Ended December 31, 2024								Year Ended December 31, 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 for loan and lease losses	298		8		163		469		651		2		50		703
Total provision for loan and lease losses	298		8		163		469		690		45		430		1,165
Charge-offs	(407)		(30)		(220)		(657)		(414)		(28)		(196)		(638)
Recoveries	46		14		57		117		47		13		18		78
Balance at end of period	$	1,063	$	158	$	455	$	1,676	$	1,126	$	166	$	455	$	1,747


dollars in millions	Year Ended December 31, 2022
	Commercial		Consumer		SVB		Total
Balance at beginning of period	$	80	$	98	$	—	$	178
Initial PCD ALLL	258		14		—		272
Day 2 Provision for Loan and Lease Losses	432		22		—		454
Provision (benefit) for loan and lease losses	101		(4)		—		97
Total provision for loan and lease losses	533		18		—		551
Charge-offs	(126)		(20)		—		(146)
Recoveries	44		23		—		67
Balance at end of period	$	789	$	133	$	—	$	922

The decrease in the ALLL at December 31, 2024 compared to December 31, 2023 was mainly due to changes in loan mix, improvements in the macroeconomic forecast, and decreases in specific reserves for individually evaluated loans. The mix shift was mostly within SVB loans and reflected increases in the global fund banking portfolio, which has a lower loss rate relative to the rest of our portfolios, and decreases in the investor dependent portfolios, which have higher loss rates. These decreases were partially offset by increases related to loan growth and a $20 million loan loss reserve for Helene.

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

Provision for Credit Losses


dollars in millions	Year Ended December 31,
		2024		2023		2022
Day 2 Provision for Loan and Lease Losses		$	—	$	462	$	454
Provision for loan and lease losses		469		703		97
Total provision for loan and lease losses		469		1,165		551
Day 2 Provision for Off-Balance Sheet Credit Exposure		—		254		59
(Benefit) provision from off-balance sheet credit exposure		(38)		(44)		35
Total (benefit) provision for off-balance sheet credit exposure		(38)		210		94

Provision for credit losses		$	431	$	1,375	$	645