
$ in millions	Amortized Cost		Fair Value		Held For Sale		Total
As of September 2023
Loan Type
Corporate	$	34,191	$	871	$	1,753	$	36,815
Commercial real estate	24,382		551		739		25,672
Residential real estate	19,924		4,028		1		23,953
Securities-based	15,053		–		–		15,053
Other collateralized	54,175		850		621		55,646
Consumer:
Installment	272		–		6,103		6,375
Credit cards	17,885		–		–		17,885
Other	1,332		148		273		1,753
Total loans, gross	167,214		6,448		9,490		183,152
Allowance for loan losses	(4,895)		–		–		(4,895)
Total loans	$	162,319	$	6,448	$	9,490	$	178,257

As of December 2022
Loan Type
Corporate	$	36,822	$	996	$	2,317	$	40,135
Commercial real estate	26,222		1,146		1,511		28,879
Residential real estate	18,523		4,511		1		23,035
Securities-based	16,671		–		–		16,671
Other collateralized	50,473		716		513		51,702
Consumer:
Installment	6,326		–		–		6,326
Credit cards	15,820		–		–		15,820
Other	1,723		286		252		2,261
Total loans, gross	172,580		7,655		4,594		184,829
Allowance for loan losses	(5,543)		–		–		(5,543)
Total loans	$	167,037	$	7,655	$	4,594	$	179,286

•Substantially all loans had floating interest rates as of both September 2023 and December 2022.

The following is a description of the loan types in the table above:

•Corporate. Corporate loans includes term loans, revolving lines of credit, letter of credit facilities and bridge loans, and are principally used for operating and general corporate purposes, or in connection with acquisitions. Corporate loans are secured (typically by a senior lien on the assets of the borrower) or unsecured, depending on the loan purpose, the risk profile of the borrower and other factors.

•Commercial Real Estate. Commercial real estate loans includes originated loans that are directly or indirectly secured by hotels, retail stores, multifamily housing complexes and commercial and industrial properties. Commercial real estate loans also includes loans extended to clients who warehouse assets that are directly or indirectly backed by commercial real estate. In addition, commercial real estate includes loans purchased by the firm.

•Residential Real Estate. Residential real estate loans primarily includes loans extended to wealth management clients and to clients who warehouse assets that are directly or indirectly secured by residential real estate. In addition, residential real estate includes loans purchased by the firm.

•Securities-Based. Securities-based loans includes loans that are secured by stocks, bonds, mutual funds, and exchange-traded funds. These loans are primarily extended to the firm's wealth management clients and used for purposes other than purchasing, carrying or trading margin stocks. Securities-based loans require borrowers to post additional collateral based on changes in the underlying collateral's fair value.

•Other Collateralized. Other collateralized loans includes loans that are backed by specific collateral (other than securities and real estate). Such loans are extended to clients who warehouse assets that are directly or indirectly secured by corporate loans, consumer loans and other assets. Other collateralized loans also includes loans to investment funds (managed by third parties) that are collateralized by capital commitments of the funds' investors or assets held by the fund, as well as other secured loans extended to the firm's wealth management clients.

•Installment. Installment loans are unsecured loans originated by the firm.

•Credit Cards. Credit card loans are loans made pursuant to revolving lines of credit issued to consumers by the firm.

•Other. Other loans includes unsecured loans extended to wealth management clients and unsecured consumer and credit card loans purchased by the firm.

See Note 4 for an overview of the firm’s fair value measurement policies, valuation techniques and significant inputs used to determine the fair value of loans, and Note 5 for information about loans within the fair value hierarchy.

Credit Quality

Risk Assessment. The firm’s risk assessment process includes evaluating the credit quality of its loans by the firm’s independent risk oversight and control function. For corporate loans and a majority of securities-based, real estate, other collateralized and other loans, the firm performs credit analyses which incorporate initial and ongoing evaluations of the capacity and willingness of a borrower to meet its financial obligations. These credit evaluations are performed on an annual basis or more frequently if deemed necessary as a result of events or changes in circumstances. The firm determines an internal credit rating for the borrower by considering the results of the credit evaluations and assumptions with respect to the nature of and outlook for the borrower’s industry and the economic environment. Beginning in the first quarter of 2023, the firm also takes into consideration collateral received or other credit support arrangements when determining an internal credit rating on collateralized loans, as management believes that this methodology better reflects the credit quality of the underlying loans. In the table below, prior period amounts have been conformed to reflect the current methodology. The impact to December 2022 was an increase in loans classified as investment-grade and a decrease in loans classified as non-investment-grade of $25.0 billion in real estate (warehouse loans) and other collateralized loans. For consumer loans and for loans that are not assigned an internal credit rating, the firm reviews certain key metrics, including, but not limited to, the Fair Isaac Corporation (FICO) credit scores, delinquency status, collateral value and other risk factors.

The table below presents gross loans by an internally determined public rating agency equivalent or other credit metrics and the concentration of secured and unsecured loans.


$ in millions	Investment-Grade			Non-Investment- Grade			Other Metrics/Unrated			Total
As of September 2023
Accounting Method
Amortized cost	$	88,225		$	54,179		$	24,810		$	167,214
Fair value	1,850			2,441			2,157			6,448
Held for sale	635			2,624			6,231			9,490
Total	$	90,710		$	59,244		$	33,198		$	183,152
Loan Type
Corporate	$	8,296		$	28,397		$	122		$	36,815
Real estate:
Commercial	12,183			13,480			9			25,672
Residential	13,271			5,075			5,607			23,953
Securities-based	11,397			635			3,021			15,053
Other collateralized	44,634			10,932			80			55,646
Consumer:
Installment	–			–			6,375			6,375
Credit cards	–			–			17,885			17,885
Other	929			725			99			1,753
Total	$	90,710		$	59,244		$	33,198		$	183,152

Secured	92		%	90		%	26		%	79		%
Unsecured	8		%	10		%	74		%	21		%
Total	100		%	100		%	100		%	100		%
As of December 2022
Accounting Method
Amortized cost	$	88,497		$	55,122		$	28,961		$	172,580
Fair value	2,116			2,968			2,571			7,655
Held for sale	557			3,991			46			4,594
Total	$	91,170		$	62,081		$	31,578		$	184,829
Loan Type
Corporate	$	10,200		$	29,935		$	–		$	40,135
Real estate:
Commercial	11,922			16,822			135			28,879
Residential	11,994			5,670			5,371			23,035
Securities-based	12,901			764			3,006			16,671
Other collateralized	43,093			8,291			318			51,702
Consumer:
Installment	–			–			6,326			6,326
Credit cards	–			–			15,820			15,820
Other	1,060			599			602			2,261
Total	$	91,170		$	62,081		$	31,578		$	184,829

Secured	89		%	90		%	27		%	79		%
Unsecured	11		%	10		%	73		%	21		%
Total	100		%	100		%	100		%	100		%

In the table above:

•Substantially all residential real estate, securities-based, other collateralized and other loans included in the other metrics/unrated category consists of loans where the firm uses other key metrics to assess the borrower’s credit quality, such as loan-to-value ratio, delinquency status, collateral value, expected cash flows, FICO credit score (which measures a borrower’s creditworthiness by considering factors such as payment and credit history) and other risk factors.

•For installment and credit card loans included in the other metrics/unrated category, the evaluation of credit quality incorporates the borrower’s FICO credit score. FICO credit scores are periodically refreshed by the firm to assess the updated creditworthiness of the borrower. See “Vintage” below for information about installment and credit card loans by FICO credit scores.

The firm also assigns a regulatory risk rating to its loans based on the definitions provided by the U.S. federal bank regulatory agencies. Total loans included 91% of loans as of September 2023 and 93% of loans as of December 2022 that were rated pass/non-criticized.

Vintage. The tables below present gross loans accounted for at amortized cost (excluding installment and credit card loans) by an internally determined public rating agency equivalent or other credit metrics and origination year for term loans.


	As of September 2023
$ in millions	Investment- Grade			Non-Investment- Grade			Other Metrics/ Unrated			Total
2023	$	569		$	1,080		$	–		$	1,649
2022	1,577			3,265			–			4,842
2021	1,191			4,531			–			5,722
2020	338			2,439			–			2,777
2019	161			2,328			–			2,489
2018 or earlier	445			2,788			–			3,233
Revolving	3,656			9,823			–			13,479
Corporate	7,937			26,254			–			34,191
2023	458			698			–			1,156
2022	1,254			3,131			–			4,385
2021	1,292			2,867			–			4,159
2020	356			1,262			–			1,618
2019	370			910			–			1,280
2018 or earlier	924			775			–			1,699
Revolving	7,296			2,789			–			10,085
Commercial real estate	11,950			12,432			–			24,382
2023	740			422			598			1,760
2022	841			757			1,254			2,852
2021	834			916			1,305			3,055
2020	4			22			83			109
2019	7			–			91			98
2018 or earlier	–			59			220			279
Revolving	9,894			1,877			–			11,771
Residential real estate	12,320			4,053			3,551			19,924
2023	8			–			–			8
2022	5			–			–			5
2019	6			–			–			6
2018 or earlier	–			291			–			291
Revolving	11,378			344			3,021			14,743
Securities-based	11,397			635			3,021			15,053
2023	4,723			1,629			–			6,352
2022	2,109			423			10			2,542
2021	2,678			1,400			22			4,100
2020	1,367			621			32			2,020
2019	635			74			10			719
2018 or earlier	485			251			–			736
Revolving	31,740			5,966			–			37,706
Other collateralized	43,737			10,364			74			54,175
2023	55			15			–			70
2022	56			12			–			68
2021	17			70			–			87
2020	–			234			–			234
2019	–			4						4
2018 or earlier	–			–			7			7
Revolving	756			106			–			862
Other	884			441			7			1,332
Total	$	88,225		$	54,179		$	6,653		$	149,057
Percentage of total	59		%	36		%	5		%	100		%


	As of December 2022
$ in millions	Investment- Grade			Non-Investment- Grade			Other Metrics/ Unrated			Total
2022	$	2,607		$	4,042		$	2		$	6,651
2021	1,669			4,273			–			5,942
2020	684			2,595			–			3,279
2019	209			2,779			–			2,988
2018	759			1,911			–			2,670
2017 or earlier	508			2,329			–			2,837
Revolving	3,709			8,746			–			12,455
Corporate	10,145			26,675			2			36,822
2022	805			3,900			2			4,707
2021	771			3,460			–			4,231
2020	407			1,740			–			2,147
2019	480			1,267			–			1,747
2018	212			469			–			681
2017 or earlier	1,238			797			11			2,046
Revolving	7,660			3,003			–			10,663
Commercial real estate	11,573			14,636			13			26,222
2022	1,493			833			1,307			3,633
2021	1,263			888			1,357			3,508
2020	8			6			89			103
2019	7			–			99			106
2018	10			50			138			198
2017 or earlier	31			10			142			183
Revolving	8,065			2,727			–			10,792
Residential real estate	10,877			4,514			3,132			18,523
2022	5			–			–			5



2018	1			–			–			1
2017 or earlier	–			291			–			291
Revolving	12,895			473			3,006			16,374
Securities-based	12,901			764			3,006			16,671
2022	4,556			751			113			5,420
2021	3,339			1,098			146			4,583
2020	1,871			701			36			2,608
2019	523			79			12			614
2018	545			108			6			659
2017 or earlier	487			108			–			595
Revolving	30,669			5,323			2			35,994
Other collateralized	41,990			8,168			315			50,473
2022	44			105			–			149
2021	17			162			–			179
2020	–			29			262			291
2019	–			10			–			10

2017 or earlier	–			–			5			5
Revolving	950			59			80			1,089
Other	1,011			365			347			1,723
Total	$	88,497		$	55,122		$	6,815		$	150,434
Percentage of total	59		%	37		%	4		%	100		%

In the tables above, revolving loans which converted to term loans were $1.23 billion as of September 2023 and $725 million as of December 2022, and primarily included other collateralized loans.

The table below presents gross installment loans accounted for at amortized cost by refreshed FICO credit scores and origination year and gross credit card loans by refreshed FICO credit scores.


$ in millions	Greater than or equal to 660			Less than 660			Total
As of September 2023
2023	$	82		$	10		$	92
2022	140			25			165
2021 or earlier	12			3			15



Installment	234			38			272
Credit cards	11,680			6,205			17,885
Total	$	11,914		$	6,243		$	18,157

Percentage of total:
Installment	86		%	14		%	100		%
Credit cards	65		%	35		%	100		%
Total	66		%	34		%	100		%

As of December 2022
2022	$	4,349		$	242		$	4,591
2021	1,080			109			1,189
2020	251			23			274
2019	160			23			183
2018	70			13			83
2017 or earlier	5			1			6
Installment	5,915			411			6,326
Credit cards	10,762			5,058			15,820
Total	$	16,677		$	5,469		$	22,146

Percentage of total:
Installment	94		%	6		%	100		%
Credit cards	68		%	32		%	100		%
Total	75		%	25		%	100		%

In the table above, credit card loans consist of revolving lines of credit.

Credit Concentrations. The table below presents the concentration of gross loans by region.


$ in millions	Carrying Value		Americas		EMEA		Asia		Total
As of September 2023
Corporate	$	36,815	62	%	30	%	8	%	100	%
Commercial real estate	25,672		83	%	14	%	3	%	100	%
Residential real estate	23,953		96	%	3	%	1	%	100	%
Securities-based	15,053		80	%	19	%	1	%	100	%
Other collateralized	55,646		84	%	14	%	2	%	100	%
Consumer:
Installment	6,375		100	%	–		–		100	%
Credit cards	17,885		100	%	–		–		100	%
Other	1,753		91	%	9	%	–		100	%
Total	$	183,152	83	%	14	%	3	%	100	%
As of December 2022
Corporate	$	40,135	57	%	34	%	9	%	100	%
Commercial real estate	28,879		79	%	16	%	5	%	100	%
Residential real estate	23,035		96	%	3	%	1	%	100	%
Securities-based	16,671		83	%	15	%	2	%	100	%
Other collateralized	51,702		86	%	12	%	2	%	100	%
Consumer:
Installment	6,326		100	%	–		–		100	%
Credit cards	15,820		100	%	–		–		100	%
Other	2,261		89	%	11	%	–		100	%
Total	$	184,829	81	%	15	%	4	%	100	%

In the table above:

•EMEA represents Europe, Middle East and Africa.

•The top five industry concentrations for corporate loans as of September 2023 were 26% for technology, media & telecommunications, 17% for diversified industrials, 12% for real estate, 10% for consumer & retail and 10% for healthcare.

•The top five industry concentrations for corporate loans as of December 2022 were 26% for technology, media & telecommunications, 18% for diversified industrials, 11% for real estate, 10% for healthcare and 10% for consumer & retail.

Nonaccrual, Past Due and Modified Loans. Loans accounted for at amortized cost (other than credit card loans) are placed on nonaccrual status when it is probable that the firm will not collect all principal and interest due under the contractual terms, regardless of the delinquency status or if a loan is past due for 90 days or more, unless the loan is both well collateralized and in the process of collection. At that time, all accrued but uncollected interest is reversed against interest income and interest subsequently collected is recognized on a cash basis to the extent the loan balance is deemed collectible. Otherwise, all cash received is used to reduce the outstanding loan balance. A loan is considered past due when a principal or interest payment has not been made according to its contractual terms. Credit card loans are not placed on nonaccrual status and accrue interest until the loan is paid in full or is charged off.

The table below presents information about past due loans.


$ in millions	30-89 days		90 days or more		Total
As of September 2023
Corporate	$	–	$	80	$	80
Commercial real estate	295		543		838
Residential real estate	1		5		6
Securities-based	1		–		1
Other collateralized	33		63		96
Consumer:
Installment	8		6		14
Credit cards	423		424		847
Other	7		11		18
Total	$	768	$	1,132	$	1,900
Total divided by gross loans at amortized cost					1.1		%

As of December 2022
Corporate	$	–	$	92	$	92
Commercial real estate	47		362		409
Residential real estate	4		6		10
Securities-based	1		–		1
Other collateralized	10		5		15
Consumer:
Installment	46		17		63
Credit cards	291		265		556
Other	17		5		22
Total	$	416	$	752	$	1,168
Total divided by gross loans at amortized cost					0.7		%

The table below presents information about nonaccrual loans.



	As of
	September			December
$ in millions	2023			2022
Corporate	$	1,614		$	1,432
Commercial real estate	1,913			1,079
Residential real estate	19			93

Other collateralized	814			65
Other	20			–
Installment	4			41
Total	$	4,384		$	2,710
Total divided by gross loans at amortized cost	2.6		%	1.6		%

In the table above:

•Nonaccrual loans included $993 million as of September 2023 and $483 million as of December 2022 of loans that were 30 days or more past due.

•Loans that were 90 days or more past due and still accruing were not material as of both September 2023 and December 2022.

•Allowance for loan losses as a percentage of total nonaccrual loans was 111.7% as of September 2023 and 204.5% as of December 2022.

In certain circumstances, the firm may modify the original terms of a loan agreement by granting a concession to a borrower experiencing financial difficulty, typically in the form of a modification of loan covenants, but may also include forbearance of interest or principal, payment extensions or interest rate reductions. These modifications, to the extent significant, were considered TDRs as of December 2022. In January 2023, the firm adopted ASU No. 2022-02, which eliminated the recognition and measurement guidance for TDRs and requires enhanced disclosures for certain loan modifications. As of December 2022, loans modified in a TDR were $231 million and commitments related to such loans were not material. Substantially all of such loans modified in a TDR were related to corporate and commercial real estate loans. During both the three and nine months ended September 2023, the firm provided loan modifications (in the form of term extensions) to borrowers experiencing financial difficulty. As of September 2023, the carrying value of loans modified during the three months ended September 2023 was $172 million and the carrying value of loans modified during the nine months ended September 2023 was $755 million. Lending commitments related to such loans were not material and such loan modifications were primarily related to corporate and commercial real estate loans. The impact of these modifications was not material for either the three or nine months ended September 2023. During the nine months ended September 2023, the firm charged-off approximately $100 million of loans that had defaulted after being modified. Substantially all of the remaining modified loans were performing in accordance with the modified contractual terms as of September 2023.

Allowance for Credit Losses

The firm’s allowance for credit losses consists of the allowance for losses on loans and lending commitments accounted for at amortized cost. Loans and lending commitments accounted for at fair value or accounted for at the lower of cost or fair value are not subject to an allowance for credit losses.

To determine the allowance for credit losses, the firm classifies its loans and lending commitments accounted for at amortized cost into wholesale and consumer portfolios. These portfolios represent the level at which the firm has developed and documented its methodology to determine the allowance for credit losses. The allowance for credit losses is measured on a collective basis for loans that exhibit similar risk characteristics using a modeled approach and on an asset-specific basis for loans that do not share similar risk characteristics.

The allowance for credit losses takes into account the weighted average of a range of forecasts of future economic conditions over the expected life of the loan and lending commitments. The expected life of each loan or lending commitment is determined based on the contractual term adjusted for extension options or demand features, or is modeled in the case of revolving credit card loans. The forecasts include baseline, favorable and adverse economic scenarios over a three-year period. For loans with expected lives beyond three years, the model reverts to historical loss information based on a non-linear modeled approach. The forecasted economic scenarios consider a number of risk factors relevant to the wholesale and consumer portfolios described below. The firm applies judgment in weighing individual scenarios each quarter based on a variety of factors, including the firm’s internally derived economic outlook, market consensus, recent macroeconomic conditions and industry trends.

The allowance for credit losses also includes qualitative components which allow management to reflect the uncertain nature of economic forecasting, capture uncertainty regarding model inputs, and account for model imprecision and concentration risk.

Management’s estimate of credit losses entails judgment about the expected life of the loan and loan collectability at the reporting dates, and there are uncertainties inherent in those judgments. The allowance for credit losses is subject to a governance process that involves review and approval by senior management within the firm’s independent risk oversight and control functions. Personnel within the firm’s independent risk oversight and control functions are responsible for forecasting the economic variables that underlie the economic scenarios that are used in the modeling of expected credit losses. While management uses the best information available to determine this estimate, future adjustments to the allowance may be necessary based on, among other things, changes in the economic environment or variances between actual results and the original assumptions used.

The table below presents gross loans and lending commitments accounted for at amortized cost by portfolio.


	As of
	September 2023				December 2022
$ in millions	Loans		Lending Commitments		Loans		Lending Commitments
Wholesale
Corporate	$	34,191	$	142,270	$	36,822	$	137,149
Commercial real estate	24,382		3,286		26,222		3,692
Residential real estate	19,924		1,889		18,523		3,089
Securities-based	15,053		815		16,671		508
Other collateralized	54,175		15,411		50,473		13,209
Other	1,332		883		1,723		944
Consumer
Installment	272		1		6,326		1,882
Credit cards	17,885		68,394		15,820		62,216
Total	$	167,214	$	232,949	$	172,580	$	222,689

In the table above, wholesale loans included $4.38 billion as of September 2023 and $2.67 billion as of December 2022 of nonaccrual loans for which the allowance for credit losses was measured on an asset-specific basis. The allowance for credit losses on these loans was $708 million as of September 2023 and $535 million as of December 2022. These loans included $922 million as of September 2023 and $384 million as of December 2022 of loans which did not require a reserve as the loan was deemed to be recoverable.

See Note 18 for further information about lending commitments.

The following is a description of the methodology used to calculate the allowance for credit losses:

Wholesale. The allowance for credit losses for wholesale loans and lending commitments that exhibit similar risk characteristics is measured using a modeled approach. These models determine the probability of default and loss given default based on various risk factors, including internal credit ratings, industry default and loss data, expected life, macroeconomic indicators, the borrower’s capacity to meet its financial obligations, the borrower’s country of risk and industry, loan seniority and collateral type. For lending commitments, the methodology also considers the probability of drawdowns or funding. In addition, for loans backed by real estate, risk factors include the loan-to-value ratio, debt service ratio and home price index. The most significant inputs to the forecast model for wholesale loans and lending commitments include unemployment rates, GDP, credit spreads, commercial and industrial delinquency rates, short- and long-term interest rates, and oil prices.

The allowance for loan losses for wholesale loans that do not share similar risk characteristics, such as nonaccrual loans, is calculated using the present value of expected future cash flows discounted at the loan’s effective rate, the observable market price of the loan or the fair value of the collateral.

Wholesale loans are charged off against the allowance for loan losses when deemed to be uncollectible.

Consumer. The allowance for credit losses for consumer loans that exhibit similar risk characteristics is calculated using a modeled approach which classifies consumer loans into pools based on borrower-related and exposure-related characteristics that differentiate a pool’s risk characteristics from other pools. The factors considered in determining a pool are generally consistent with the risk characteristics used for internal credit risk measurement and management and include key metrics, such as FICO credit scores, delinquency status, loan vintage and macroeconomic indicators. The most significant inputs to the forecast model for consumer loans include unemployment rates and delinquency rates. The expected life of revolving credit card loans is determined by modeling expected future draws and the timing and amount of repayments allocated to the funded balance. The firm also recognizes an allowance for credit losses on commitments to acquire loans. However, no allowance for credit losses is recognized on credit card lending commitments as they are cancellable by the firm.

Installment loans are charged off when they are 120 days past due. Credit card loans are charged off when they are 180 days past due.

Allowance for Credit Losses Rollforward

The table below presents information about the allowance for credit losses.


$ in millions	Wholesale			Consumer			Total
Three Months Ended September 2023
Allowance for loan losses
Beginning balance	$	2,497		$	2,735		$	5,232
Charge-offs	(166)			(302)			(468)
Recoveries	9			26			35
Net (charge-offs)/recoveries	(157)			(276)			(433)
Provision	149			(37)			112
Other	(16)			–			(16)
Ending balance	$	2,473		$	2,422		$	4,895

Allowance ratio	1.7		%	13.3		%	2.9		%
Net charge-off ratio	0.4		%	5.1		%	1.0		%
Allowance for losses on lending commitments
Beginning balance	$	729		$	48		$	777
Provision	(57)			(48)			(105)
Other	(2)			–			(2)
Ending balance	$	670		$	–		$	670

Three Months Ended September 2022
Allowance for loan losses
Beginning balance	$	2,458		$	2,104		$	4,562
Charge-offs	(65)			(150)			(215)
Recoveries	22			21			43
Net (charge-offs)/recoveries	(43)			(129)			(172)
Provision	78			403			481
Other	(25)			–			(25)
Ending balance	$	2,468		$	2,378		$	4,846

Allowance ratio	1.7		%	12.6		%	2.9		%
Net charge-off ratio	0.1		%	2.9		%	0.4		%
Allowance for losses on lending commitments
Beginning balance	$	702		$	3		$	705
Provision	(10)			44			34

Ending balance	$	692		$	47		$	739

Nine Months Ended September 2023
Allowance for loan losses
Beginning balance	$	2,562		$	2,981		$	5,543
Charge-offs	(350)			(893)			(1,243)
Recoveries	32			76			108
Net (charge-offs)/recoveries	(318)			(817)			(1,135)
Provision	293			258			551
Other	(64)			–			(64)
Ending balance	$	2,473		$	2,422		$	4,895

Allowance ratio	1.7		%	13.3		%	2.9		%
Net charge-off ratio	0.3		%	5.1		%	0.9		%
Allowance for losses on lending commitments
Beginning balance	$	711		$	63		$	774
Provision	(37)			(63)			(100)
Other	(4)			–			(4)
Ending balance	$	670		$	–		$	670

Nine Months Ended September 2022
Allowance for loan losses
Beginning balance	$	2,135		$	1,438		$	3,573
Charge-offs	(237)			(348)			(585)
Recoveries	48			62			110
Net (charge-offs)/recoveries	(189)			(286)			(475)
Provision	551			1,226			1,777
Other	(29)			–			(29)
Ending balance	$	2,468		$	2,378		$	4,846

Allowance ratio	1.7		%	12.6		%	2.9		%
Net charge-off ratio	0.2		%	2.5		%	0.4		%
Allowance for losses on lending commitments
Beginning balance	$	589		$	187		$	776
Provision	106			(140)			(34)
Other	(3)			–			(3)
Ending balance	$	692		$	47		$	739

In the table above:

•The allowance ratio is calculated by dividing the allowance for loan losses by gross loans accounted for at amortized cost.

•The net charge-off ratio is calculated by dividing annualized net (charge-offs)/recoveries by average gross loans accounted for at amortized cost.

Forecast Model Inputs as of September 2023

When modeling expected credit losses, the firm employs a weighted, multi-scenario forecast, which includes baseline, adverse and favorable economic scenarios. As of September 2023, this multi-scenario forecast was weighted towards the baseline and adverse economic scenarios.

The table below presents the forecasted U.S. unemployment and U.S. GDP growth rates used in the baseline economic scenario of the forecast model.


As of September 2023
U.S. unemployment rate
Forecast for the quarter ended:
December 2023	3.9	%
June 2024	4.3	%
December 2024	4.3	%

Growth in U.S. GDP
Forecast for the year:
2023	2.1	%
2024	1.2	%
2025	1.7	%

The adverse economic scenario of the forecast model reflects a global recession in the fourth quarter of 2023 through the third quarter of 2024, resulting in an economic contraction and rising unemployment rates. In this scenario, the U.S. unemployment rate peaks at approximately 7.4% during the fourth quarter of 2024 and the maximum decline in the quarterly U.S. GDP relative to the third quarter of 2023 is approximately 2.7%, which occurs during the third quarter of 2024.

In the table above:

•U.S. unemployment rate represents the rate forecasted as of the respective quarter-end.

•Growth in U.S. GDP represents the year-over-year growth rate forecasted for the respective years.

•While the U.S. unemployment and U.S. GDP growth rates are significant inputs to the forecast model, the model contemplates a variety of other inputs across a range of scenarios to provide a forecast of future economic conditions. Given the complex nature of the forecasting process, no single economic variable can be viewed in isolation and independently of other inputs.

Three Months Ended September 2023. The allowance for credit losses decreased by $444 million during the three months ended September 2023, reflecting a net release related to the GreenSky loan portfolio (including a reserve reduction of $637 million related to the transfer of the portfolio to held for sale) and lower modeled expected credit losses relating to the wholesale portfolio due to increased stability in the macroeconomic environment, partially offset by asset specific provisions in the wholesale portfolio and seasoning of the credit card portfolio.