Asset Quality

12 Months Ended

Dec. 31, 2021

Credit Loss [Abstract]

Asset Quality

5. Asset Quality

ALLL

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 ("Basis of Presentation and Accounting Policies") under the heading "Allowance for Loan and Lease Losses" of this report.

The ALLL at December 31, 2021, represents our current estimate of lifetime credit losses inherent in the loan portfolio at that date. The changes in the ALLL by loan category for the periods indicated are as follows:

Twelve Months Ended December 31, 2021:

Dollars in millions	December 31, 2020		Provision			Charge-offs		Recoveries		December 31, 2021
Commercial and Industrial	$	678	$	(142)		$	(174)	$	83	$	445
Commercial real estate:
Real estate — commercial mortgage	327		(114)			(40)		9		182
Real estate — construction	47		(18)			—		—		29
Total commercial real estate loans	374		(132)			(40)		9		211
Commercial lease financing	47		(16)			(6)		7		32
Total commercial loans	1,099		(290)			(220)		99		688
Real estate — residential mortgage	102		(12)			2		3		95
Home equity loans	171		(57)			(9)		5		110
Consumer direct loans	128		(2)			(29)		8		105
Credit cards	87		(7)			(27)		8		61
Consumer indirect loans	39		(13)			(39)		15		2
Total consumer loans	527		(91)			(102)		39		373
Total ALLL — continuing operations	1,626		(381)		(a)	(322)		138		1,061
Discontinued operations	36		(6)			(4)		2		28
Total ALLL — including discontinued operations	$	1,662	$	(387)		$	(326)	$	140	$	1,089

(a)Excludes a credit related to reserves on lending-related commitments of $37 million.

Twelve Months Ended December 31, 2020:

Dollars in millions	December 31, 2019		Impact of ASC 326 Adoption		January 1, 2020		Provision			Charge-offs		Recoveries		December 31, 2020
Commercial and Industrial	$	551	$	(141)	$	410	$	585		$	(351)	$	34	$	678
Commercial real estate:
Real estate — commercial mortgage	143		16		159		184			(19)		3		327
Real estate — construction	22		(7)		15		32			—		—		47
Total commercial real estate loans	165		9		174		216			(19)		3		374
Commercial lease financing	35		8		43		38			(35)		1		47
Total commercial loans	751		(124)		627		839			(405)		38		1,099
Real estate — residential mortgage	7		77		84		19			(2)		1		102
Home equity loans	31		147		178		(3)			(11)		7		171
Consumer direct loans	34		63		97		61			(37)		7		128
Credit cards	47		35		82		36			(39)		8		87
Consumer indirect loans	30		6		36		13			(28)		18		39
Total consumer loans	149		328		477		126			(117)		41		527
Total ALLL — continuing operations	900		204		1,104		965		(a)	(522)		79		1,626
Discontinued operations	10		31		41		(5)			(5)		5		36
Total ALLL — including discontinued operations	$	910	$	235	$	1,145	$	960		$	(527)	$	84	$	1,662

(a)Excludes a credit related to reserves on lending-related commitments of $56 million.

Twelve Months Ended December 31, 2019

Dollars in millions	December 31, 2018		Provision			Charge-offs			Recoveries		December 31, 2019
Commercial and industrial	$	532	$	311		$	(319)		$	27	$	551
Real estate — commercial mortgage	142		7			(8)			2		143
Real estate — construction	33		(6)			(5)			—		22
Commercial lease financing	36		20			(26)			5		35
Total commercial loans	743		332			(358)			34		751
Real estate — residential mortgage	7		1			(3)			2		7
Home equity loans	35		7			(19)			8		31
Consumer direct loans	30		38			(41)			7		34
Credit cards	48		36			(44)			7		47
Consumer indirect loans	20		27			(34)			17		30
Total consumer loans	140		109			(141)			41		149
Total ALLL — continuing operations	883		441		(a)(b)	(499)		(b)	75		900
Discontinued operations	14		3			(12)			5		10
Total ALLL — including discontinued operations	$	897	$	444		$	(511)		$	80	$	910

(a)Excludes a provision related to reserves on lending-related commitments of $4 million.

(b)Includes the realization of a $139 million loss related to a previously disclosed fraud incident.

As described in Note 1 ("Basis of Presentation and Accounting Policies"), we estimate the ALLL using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. In our estimation of expected credit losses, we use a two year reasonable and supportable period across all products. Following this two year period in which supportable forecasts can be generated, for all modeled loan portfolios, we revert expected credit losses to a level that is consistent with our historical information by reverting the macroeconomic variables (model inputs) to their long run average. We revert to historical loss rates for less complex estimation methods for smaller portfolios. A 20 year fixed length look back period is used to calculate the long run average of the macroeconomic variables. A four quarter reversion period is used where the macroeconomic variables linearly revert to their long run average following the two year reasonable and supportable period.

We develop our reasonable and supportable forecasts using relevant data including, but not limited to, changes in economic output, unemployment rates, property values, and other factors associated with the credit losses on financial assets. Some macroeconomic variables apply to all portfolio segments, while others are more portfolio specific. The following table discloses key macroeconomic variables for each loan portfolio.

Segment	Portfolio	Key Macroeconomic Variables (a)
Commercial	Commercial and industrial	BBB corporate bond rate (spread), GDP, industrial production, and unemployment rate
	Commercial real estate	BBB corporate bond rate (spread), property and real estate price indices, and unemployment rate
	Commercial lease financing	BBB corporate bond rate (spread), GDP, and unemployment rate
Consumer	Real estate — residential mortgage	GDP, home price index, unemployment rate, and 30 year mortgage rate
	Home equity	Home price index, unemployment rate, and 30 year mortgage rate
	Consumer direct	Unemployment rate and U.S. household income
	Consumer indirect	New vehicle sales, used vehicle prices, and unemployment rate
	Credit cards	Unemployment rate and U.S. household income
	Discontinued operations	Unemployment rate

(a)Variables include all transformations and interactions with other risk drivers. Additionally, variables may have varying impacts at different points in the economic cycle.

In addition to macroeconomic drivers, portfolio attributes such as remaining term, outstanding balance, risk ratings, utilization, FICO, LTV, and delinquency also drive ALLL changes. Our ALLL models were designed to capture the correlation between economic and portfolio changes. As such, evaluating shifts in individual portfolio attributes and macroeconomic variables in isolation may not be indicative of past or future performance.

Economic Outlook

As of December 31, 2021, future economic growth is expected to be robust, moderating somewhat from the growth seen in 2021, while risks and uncertainties related to the pandemic continue. The disruptive impact on global supply chains and highly stimulative fiscal programs put in place to address the pandemic’s impact have led to higher than expected inflationary pressures. Expectations are for a tighter monetary policy by the Federal Reserve. Increased rates of infections from the Omicron variant have resulted in declines in consumer confidence. We utilized the Moody’s November 2021 Consensus forecast as our baseline forecast to estimate our expected credit losses as of December 31, 2021. We determined such forecast to be a reasonable view of the outlook for the economy given all available information at year end.

The baseline scenario continues to reflect moderate economic growth over the next two years in markets in which we operate. U.S. GDP growth continues at a 6.6% annualized rate in the fourth quarter of 2021 and slows to an annual rate of approximately 4% and 3% for 2022 and 2023, respectively. The national unemployment rate forecast is 4.5% in the fourth quarter of 2021, and is expected to decline to 3.8% by the fourth quarter of 2022 and remain fairly stable through the fourth quarter of 2023.

To the extent we identified credit risk considerations that were not captured by the third-party economic forecast, we addressed the risk through management’s qualitative adjustments to the ALLL.

Commercial Loan Portfolio

The commercial ALLL decreased by $411 million, or 37.4%, from December 31, 2020, through December 31, 2021, driven primarily by improvements in economic forecasts, but also by improvements in the asset quality of our portfolios as the economic recovery gained strength during the year.

The primary changes to the economic outlook included lower rates of unemployment, improved outlooks for GDP growth rates, industrial production levels and commercial real estate prices, which impacted all of our commercial portfolios. Improvements in portfolio related factors also contributed to lower ALLL levels as positive changes in our internal risk ratings reflected lower credit risk. The ALLL results reflect incremental credit risk considerations as a result of the economic uncertainty and related commercial borrower assistance programs, which are addressed through qualitative adjustments.

As of December 31, 2021, the ALLL does not include reserves for the $1.5 billion of outstanding PPP loans that are 100% guaranteed by the SBA. The portion of PPP loans that have been submitted to the SBA for forgiveness by our clients and have been partially or fully denied is not material.

Consumer Loan Portfolio

The consumer ALLL decreased $154 million, or 29.2%, from December 31, 2020, through December 31, 2021. The overall decrease in the allowance is driven by the continued economic recovery and strong portfolio performance, partially offset by growth in residential real estate.

The most meaningful changes to the economic forecast contributing to the reduction in reserves include improvement in the unemployment rate outlook, which impacts all consumer portfolios. In addition, the housing market and home price index outlook continue to display strength, which impacts the residential mortgage and home equity segments. As it relates to the decline in the ALLL due to portfolio factors, shifts are largely driven by attrition activity, targeted portfolio growth and overall strong credit performance. The ALLL results reflect incremental credit risk considerations as a result of the economic uncertainty and related borrower assistance programs, which are addressed through qualitative adjustments.

Credit Risk Profile

The prevalent risk characteristic for both commercial and consumer loans is the risk of loss arising from an obligor’s inability or failure to meet contractual payment or performance terms. Evaluation of this risk is stratified and monitored by the loan risk rating grades assigned for the commercial loan portfolios and the refreshed FICO score assigned for the consumer loan portfolios. The internal risk grades assigned to loans follow our definitions of Pass and Criticized, which are consistent with published definitions of regulatory risk classifications. Loans with a pass rating represent those loans not classified on our rating scale for problem credits, as minimal credit risk has been identified. Criticized loans are those loans that either have a potential weakness deserving management's close attention or have a well-defined weakness that may put full collection of contractual cash flows at risk. Borrower FICO scores provide information about the credit quality of our consumer loan portfolio as they provide an indication as to the likelihood that a debtor will repay its debts. The scores are obtained from a nationally recognized consumer rating agency and are presented in the tables below at the dates indicated.

Most extensions of credit are subject to loan scoring. Loan grades are assigned at the time of origination, verified by credit risk management, and periodically re-evaluated thereafter. This risk rating methodology blends our judgment with quantitative modeling. Commercial loans generally are assigned two internal risk ratings. The first rating reflects the probability that the borrower will default on an obligation; the second rating reflects expected recovery rates on the credit facility. Default probability is determined based on, among other factors, the financial strength of the borrower, an assessment of the borrower’s management, the borrower’s competitive position within its industry sector, and our view of industry risk in the context of the general economic outlook. Types of exposure, transaction structure, and collateral, including credit risk mitigants, affect the expected recovery assessment.

Commercial Credit Exposure

Credit Risk Profile by Creditworthiness Category and Vintage (a)

As of December 31, 2021	Term Loans												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Amortized Cost Basis by Origination Year and Internal Risk Rating
Dollars in millions	2021		2020		2019		2018		2017		Prior						Total
Commercial and Industrial
Risk Rating:
Pass	$	11,675	$	4,941	$	4,040	$	2,771	$	1,777	$	3,108	$	20,406	$	72	$	48,790
Criticized (Accruing)	64		71		115		175		200		121		784		14		1,544
Criticized (Nonaccruing)	1		1		21		10		19		15		122		2		191
Total commercial and industrial	11,740		5,013		4,176		2,956		1,996		3,244		21,312		88		50,525
Real estate — commercial mortgage
Risk Rating:
Pass	4,923		1,197		2,137		1,168		612		2,787		803		53		13,680
Criticized (Accruing)	15		22		70		62		109		206		35		1		520
Criticized (Nonaccruing)	—		1		1		5		—		31		6		—		44
Total real estate — commercial mortgage	4,938		1,220		2,208		1,235		721		3,024		844		54		14,244
Real estate — construction
Risk Rating:
Pass	495		565		530		223		92		32		2		—		1,939
Criticized (Accruing)	—		4		5		43		4		—		1		—		57
Criticized (Nonaccruing)	—		—		—		—				—		—		—		—
Total real estate — construction	495		569		535		266		96		32		3		—		1,996
Commercial lease financing
Risk Rating:
Pass	1,039		748		675		301		309		927		—		—		3,999
Criticized (Accruing)	—		6		29		13		13		7		—		—		68
Criticized (Nonaccruing)	—		—		1		1		1		1		—		—		4
Total commercial lease financing	1,039		754		705		315		323		935		—		—		4,071
Total commercial loans	$	18,212	$	7,556	$	7,624	$	4,772	$	3,136	$	7,235	$	22,159	$	142	$	70,836

(a)Accrued interest of $113 million, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

Consumer Credit Exposure

Credit Risk Profile by FICO Score and Vintage (a)

As of December 31, 2021	Term Loans												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
	Amortized Cost Basis by Origination Year and FICO Score
Dollars in millions	2021		2020		2019		2018		2017		Prior						Total
Real estate — residential mortgage
FICO Score:
750 and above	$	7,906	$	2,909	$	777	$	84	$	126	$	1,096	$	—	$	—	$	12,898
660 to 749	1,686		351		169		39		25		308		—		—		2,578
Less than 660	26		14		19		16		9		142		—		—		226
No Score	18		—		1		1		3		30		1		—		54
Total real estate — residential mortgage	9,636		3,274		966		140		163		1,576		1		—		15,756
Home equity loans
FICO Score:
750 and above	1,051		830		251		96		128		666		2,244		423		5,689
660 to 749	394		263		111		44		40		204		1,004		143		2,203
Less than 660	27		24		20		13		13		92		333		46		568
No Score	—		2		—		—		—		2		3		—		7
Total home equity loans	1,472		1,119		382		153		181		964		3,584		612		8,467
Consumer direct loans
FICO Score:
750 and above	1,799		1,129		517		65		17		129		109		—		3,765
660 to 749	612		295		174		46		10		45		212		—		1,394
Less than 660	45		33		27		11		3		12		60		—		191
No Score	68		40		29		17		10		21		218		—		403
Total consumer direct loans	2,524		1,497		747		139		40		207		599		—		5,753
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		500		—		500
660 to 749	—		—		—		—		—		—		387		—		387
Less than 660	—		—		—		—		—		—		84		—		84
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		972		—		972
Consumer indirect loans
FICO Score:
750 and above	5		—		—		—		—		30		—		—		35
660 to 749	—		—		—		—		—		26		—		—		26
Less than 660	—		—		—		—		—		9		—		—		9
No Score	—		—		—		—		—		—		—		—		—
Total consumer indirect loans	5		—		—		—		—		65		—		—		70
Total consumer loans	$	13,637	$	5,890	$	2,095	$	432	$	384	$	2,812	$	5,156	$	612	$	31,018

(a)Accrued interest of $85 million, presented in “Accrued income and other assets” on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in this table.

Nonperforming and Past Due Loans

Our policies for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans, and resuming accrual of interest for our commercial and consumer loan portfolios are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans”.

Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be reported as past due and nonperforming. For COVID-19 related loan modifications which occurred from March 1, 2020, through December 31, 2021, and met the loan modification criteria under either the CARES Act or the criteria specified by the regulatory agencies, we have elected to re-age to current status all commercial loans and consumer loans that are not secured by real-estate and freeze the delinquency status of consumer real estate secured loans as of the modification or forbearance grant date. At December 31, 2021, the portfolio loans and leases that have received a payment deferral or forbearance as part of our COVID-19 hardship relief programs totaled $75 million, of which $65 million of loan modifications and forbearances made under the criteria of either the CARES Act, banking regulator interagency guidance, or short-term forbearance policies were not reported as nonperforming.

The following aging analysis of past due and current loans as of December 31, 2021, and December 31, 2020, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a)

December 31, 2021	Current		30-59 Days Past Due (b)		60-89 Days Past Due (b)		90 and Greater Days Past Due (b)		Non-performing Loans		Total Past Due and Non-performing Loans		Total Loans (c)
Dollars in millions
LOAN TYPE
Commercial and industrial	$	50,226	$	19	$	49	$	40	$	191	$	299	$	50,525
Commercial real estate:
Commercial mortgage	14,174		10		9		7		44		70		14,244
Construction	1,978		—		17		1		—		18		1,996
Total commercial real estate loans	16,152		10		26		8		44		88		16,240
Commercial lease financing	4,061		6		—		—		4		10		4,071
Total commercial loans	$	70,439	$	35	$	75	$	48	$	239	$	397	$	70,836
Real estate — residential mortgage	$	15,669	$	7	$	3	$	5	$	72	$	87	$	15,756
Home equity loans	8,299		21		6		6		135		168		8,467
Consumer direct loans	5,736		8		2		3		4		17		5,753
Credit cards	956		4		3		6		3		16		972
Consumer indirect loans	68		1		—		—		1		2		70
Total consumer loans	$	30,728	$	41	$	14	$	20	$	215	$	290	$	31,018
Total loans	$	101,167	$	76	$	89	$	68	$	454	$	687	$	101,854

(a)Amounts in table represent amortized cost and exclude loans held for sale.

(b)Accrued interest of $198 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c)Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

December 31, 2020	Current		30-59 Days Past Due (b)		60-89 Days Past Due (b)		90 and Greater Days Past Due (b)		Non-performing Loans		Total Past Due and Non-performing Loans		Total Loans (c)
Dollars in millions
LOAN TYPE
Commercial and industrial	$	52,396	$	36	$	50	$	40	$	385	$	511	$	52,907
Commercial real estate:
Commercial mortgage	12,548		9		5		21		104		139		12,687
Construction	1,986		—		—		1		—		1		1,987
Total commercial real estate loans	14,534		9		5		22		104		140		14,674
Commercial lease financing	4,369		21		1		—		8		30		4,399
Total commercial loans	$	71,299	$	66	$	56	$	62	$	497	$	681	$	71,980
Real estate — residential mortgage	$	9,173	$	11	$	3	$	1	$	110	$	125	$	9,298
Home equity loans	9,143		34		20		9		154		217		9,360
Consumer direct loans	4,694		7		4		4		5		20		4,714
Credit cards	972		5		3		7		2		17		989
Consumer indirect loans	4,792		25		7		3		17		52		4,844
Total consumer loans	$	28,774	$	82	$	37	$	24	$	288	$	431	$	29,205
Total loans	$	100,073	$	148	$	93	$	86	$	785	$	1,112	$	101,185

(a)Amounts in table represent amortized cost and exclude loans held for sale.

(b)Accrued interest of $241 million presented in “Accrued income and other assets” on the Consolidated Balance Sheets is excluded from the amortized cost basis disclosed in this table.

(c)Net of unearned income, net of deferred fees and costs, and unamortized discounts and premiums.

At December 31, 2021, the carrying amount of our commercial nonperforming loans outstanding represented 62% of their original contractual amount owed, total nonperforming loans outstanding represented 73% of their original contractual amount owed, and nonperforming assets in total were carried at 80% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $17 million, $27 million, and $31 million for each of the twelve months ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $404 million at December 31, 2021.

Collateral-dependent Financial Assets

We classify financial assets as collateral-dependent when our borrower is experiencing financial difficulty, and we expect repayment to be provided substantially through the operation or sale of the collateral. Our commercial loans have collateral that includes cash, accounts receivable, inventory, commercial machinery, commercial properties, commercial real estate construction projects, and stock or ownership interests in the borrowing entity. When appropriate we also consider the enterprise value of the borrower as a repayment source for collateral-dependent loans. Our consumer loans have collateral that includes residential real estate, automobiles, boats, and RVs.

There were no significant changes in the extent to which collateral secures our collateral-dependent financial assets during 2021.

TDRs

We classify loan modifications as TDRs when a borrower is experiencing financial difficulties and we have granted a concession without commensurate financial, structural, or legal consideration. Our loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Under the CARES Act as well as banking regulator interagency guidance, certain loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic may not be required to be treated as TDRs under U.S. GAAP.  We elected to suspend TDR accounting for $65 million of COVID-19 related loan modifications as of December 31, 2021, as such loan modifications met the criteria under either the CARES Act, banking regulator interagency guidance or are a short-term forbearance. 

Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs were $15 million and $1 million at December 31, 2021, and December 31, 2020, respectively.

The consumer TDR other concession category in the table below primarily includes those borrowers’ debts that are discharged through Chapter 7 bankruptcy and have not been formally re-affirmed. At December 31, 2021, and December 31, 2020, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $104 million and $92 million, respectively.

The following table shows the post-modification outstanding recorded investment by concession type for our commercial and consumer accruing and nonaccruing TDRs that occurred during the periods indicated:

December 31,
Dollars in millions	2021		2020
Commercial loans:
Extension of Maturity Date	$	—	$	5
Payment or Covenant Modification/Deferment	7		59
Total	$	7	$	64
Consumer loans:
Interest rate reduction	$	7	$	41
Other	19		21
Total	$	26	$	62
Total TDRs	$	33	$	126

The following table summarizes the change in the post-modification outstanding recorded investment of our accruing and nonaccruing TDRs during the periods indicated:

December 31,
Dollars in millions	2021		2020
Balance at beginning of the period	$	363	$	347
Additions	103		173
Payments	(217)		(95)
Charge-offs	(29)		(62)
Balance at end of period	$	220	$	363

A further breakdown of TDRs included in nonperforming loans by loan category for the periods indicated are as follows:

	December 31, 2021					December 31, 2020
	Number   of Loans	Pre-modification   Outstanding   Recorded   Investment		Post-modification   Outstanding   Recorded   Investment		Number   of Loans	Pre-modification   Outstanding   Recorded   Investment		Post-modification   Outstanding   Recorded   Investment
Dollars in millions
LOAN TYPE
Nonperforming:
Commercial and industrial	36	$	30	$	14	66	$	136	$	92
Commercial real estate:
Real estate — commercial mortgage	3	50		25		7	62		50
Total commercial real estate loans	3	50		25		7	62		50
Total commercial loans	39	80		39		73	198		142
Real estate — residential mortgage	220	26		24		258	35		34
Home equity loans	531	36		31		630	41		37
Consumer direct loans	207	3		2		212	3		3
Credit cards	360	2		2		356	2		2
Consumer indirect loans	23	1		1		861	15		11
Total consumer loans	1,341	68		60		2,317	96		87
Total nonperforming TDRs	1,380	148		99		2,390	294		229
Prior-year accruing: (a)
Commercial and industrial	11	—		—		3	5		—
Commercial real estate:
Real estate — commercial mortgage	1	—		—		—	—		—
Total commercial loans	12	—		—		3	5		—
Real estate — residential mortgage	455	39		33		485	37		31
Home equity loans	1,628	97		75		1,781	106		83
Consumer direct loans	236	5		3		163	4		3
Credit cards	579	4		2		536	3		1
Consumer indirect loans	139	15		8		775	29		16
Total consumer loans	3,037	160		121		3,740	179		134
Total prior-year accruing TDRs	3,049	160		121		3,743	184		134
Total TDRs	4,429	$	308	$	220	6,133	$	478	$	363

(a)All TDRs that were restructured prior to January 1, 2021, and January 1, 2020, are fully accruing.

Commercial loan TDRs are considered defaulted when principal and interest payments are 90 days past due. Consumer loan TDRs are considered defaulted when principal and interest payments are more than 60 days past due. During 2021, there were seven commercial loan TDRs and 131 consumer loan TDRs with a combined recorded investment of $5 million that experienced payment defaults after modifications resulting in TDR status during 2020. During 2020, there were seven commercial loan TDRs and 212 consumer loan TDRs with a combined recorded investment of $10 million that experienced payment defaults after modifications resulting in TDR status during 2019.

Liability for Credit Losses on Off Balance Sheet Exposures

The liability for credit losses inherent in unfunded lending-related commitments, such as letters of credit and unfunded loan commitments, and certain financial guarantees is included in “accrued expense and other liabilities” on the balance sheet and is assessed a reserve under CECL.

Changes in the liability for credit losses on off balance sheet exposures are summarized as follows:

	Twelve Months Ended December 31,
Dollars in millions	2021		2020
Balance at the end of the prior period	$	197	$	68
Liability for credit losses on contingent guarantees at the end of the prior period	—		7
Cumulative effect from change in accounting principle (a), (b)	—		66
Balance at beginning of period	197		141
Provision (credit) for losses on off balance sheet exposures	(37)		56
Balance at end of period	$	160	$	197

(a)The cumulative effect from change in accounting principle relates to the January 1, 2020, adoption of ASU 2016-13.

(b)Excludes $4 million related to the provision for other financial assets.