Asset Quality

3 Months Ended

Mar. 31, 2022

Credit Loss [Abstract]

Asset Quality

4. Asset Quality

ALLL

We estimate the appropriate level of the ALLL on at least a quarterly basis. The methodology is described in Note 1 ("Summary of Significant Accounting Policies") under the heading "Allowance for Loan and Lease Losses" beginning on page 109 of our 2021 Form 10-K.

The ALLL at March 31, 2022, 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:

Three months ended March 31, 2022:

Dollars in millions	December 31, 2021		Provision			Charge-offs		Recoveries		March 31, 2022
Commercial and Industrial	$	445	$	63		$	(30)	$	11	$	489
Commercial real estate:
Real estate — commercial mortgage	182		(7)			(4)		1		172
Real estate — construction	29		(4)			—		—		25
Total commercial real estate loans	211		(11)			(4)		1		197
Commercial lease financing	32		1			(2)		—		31
Total commercial loans	688		53			(36)		12		717
Real estate — residential mortgage	95		12			1		—		108
Home equity loans	110		(6)			(1)		1		104
Consumer direct loans	105		11			(7)		2		111
Credit cards	61		7			(7)		2		63
Consumer indirect loans	2		—			(1)		1		2
Total consumer loans	373		24			(15)		6		388
Total ALLL — continuing operations	1,061		77		(a)	(51)		18		1,105
Discontinued operations	28		1			(2)		—		27
Total ALLL — including discontinued operations	$	1,089	$	78		$	(53)	$	18	$	1,132

(a)Excludes a provision for losses on lending-related commitments of $6 million.

Three months ended March 31, 2021:

Dollars in millions	December 31, 2020		Provision			Charge-offs		Recoveries		March 31, 2021
Commercial and Industrial	$	678	$	(17)		$	(73)	$	8	$	596
Commercial real estate:
Real estate — commercial mortgage	327		(37)			(35)		1		256
Real estate — construction	47		(2)			—		—		45
Total commercial real estate loans	374		(39)			(35)		1		301
Commercial lease financing	47		(4)			(4)		1		40
Total commercial loans	1,099		(60)			(112)		10		937
Real estate — residential mortgage	102		(3)			—		1		100
Home equity loans	171		(13)			(2)		1		157
Consumer direct loans	128		4			(8)		2		126
Credit cards	87		(3)			(6)		2		80
Consumer indirect loans	39		1			(7)		5		38
Total consumer loans	527		(14)			(23)		11		501
Total ALLL — continuing operations	1,626		(74)		(a)	(135)		21		1,438
Discontinued operations	36		(3)			(1)		1		33
Total ALLL — including discontinued operations	$	1,662	$	(77)		$	(136)	$	22	$	1,471

(a)Excludes a credit for losses on lending-related commitments of $19 million.

As described in Note 1 ("Summary of Significant Accounting Policies"), under the heading “Allowance for Loan and Lease Losses” beginning on page 109 of our 2021 Form 10-K, 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 March 31, 2022, economic growth is expected to be healthy, but the Russian-Ukrainian conflict has provided additional stress on global supply chains, adding uncertainty to the outlook and stress to existing inflationary pressures. Inflation in the United States is at high levels; monetary policy is projected to become more restrictive, which is expected to reduce inflation throughout the remainder of 2022. Employment levels continue to be very strong, with unemployment rates expected to remain at relatively low levels. We utilized the Moody’s February 2022 Consensus forecast as our baseline forecast to estimate our expected credit losses as of March 31, 2022. We determined such forecast to be a reasonable view of the outlook for the economy given all available information at quarter end.

The baseline scenario continues to reflect moderate economic growth over the next two years in markets in which we operate. U.S. GDP continues to grow, albeit at a slower pace, at a 0.5% annualized rate in the first quarter of 2022 and at an annual rate of approximately 4% and 3% for 2022 and 2023, respectively. The national unemployment rate forecast is 3.9% in the first quarter of 2022, and is expected to decline to 3.6% by the fourth quarter of 2022 and continue at that level through the fourth quarter of 2023.

We recognize the baseline forecast may not fully capture the increased economic uncertainty emerging as of quarter-end, specifically due to the Russia/Ukraine conflict and monetary policy pressures. These considerations were addressed through qualitative adjustments.

As a result of the current economic uncertainty, our future loss estimates may vary considerably from our March 31, 2022, assumptions.

Commercial Loan Portfolio

The ALLL from continuing operations for the commercial segment increased by $29 million, or 4.2%, from December 31, 2021. The overall increase in the allowance is driven by loan growth, and economic uncertainties (geopolitical and monetary policy), offset by reductions in COVID-related reserves.

The primary changes to the outlook are due to Russia/Ukraine crisis, as well as the associated risk around the global supply chain and inflation. Improvements in real estate price indices led to a reduction in reserve for our commercial real estate portfolio.

As of March 31, 2022, there was an immaterial ALLL associated with $886 million of outstanding PPP loans. This ALLL relates to a small number of loans denied by the SBA for forgiveness.

Consumer Loan Portfolio

The ALLL from continuing operations for the consumer segment increased by $15 million, or 4.0%, from December 31, 2021. The overall increase in the allowance is driven by higher uncertainty in the economic outlook, in addition to loan growth.

The most meaningful changes in the economic outlook contributing to the increase in reserves are the ongoing conflict in Ukraine and US inflationary/monetary policy pressures. The potential incremental risk associated with these economic factors is largely considered through qualitative reserve adjustments. As it relates to the changes in the ALLL due to portfolio factors, shifts are largely driven by targeted growth in the consumer real estate and Laurel Road student lending portfolios.

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 grading or 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 March 31, 2022	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	2022		2021		2020		2019		2018		Prior						Total
Commercial and Industrial
Risk Rating:
Pass	$	1,952	$	11,488	$	4,372	$	3,497	$	2,515	$	4,511	$	22,623	$	117	$	51,075
Criticized (Accruing)	—		34		111		116		173		294		803		23		1,554
Criticized (Nonaccruing)	—		1		3		15		9		31		126		1		186
Total commercial and industrial	1,952		11,523		4,486		3,628		2,697		4,836		23,552		141		52,815
Real estate — commercial mortgage
Risk Rating:
Pass	1,474		4,805		1,153		2,045		994		3,185		850		59		14,565
Criticized (Accruing)	—		18		20		87		71		290		33		—		519
Criticized (Nonaccruing)	—		—		1		1		5		29		3		1		40
Total real estate — commercial mortgage	1,474		4,823		1,174		2,133		1,070		3,504		886		60		15,124
Real estate — construction
Risk Rating:
Pass	144		472		602		476		209		112		1		3		2,019
Criticized (Accruing)	—		—		4		7		31		4		—		—		46
Criticized (Nonaccruing)	—		—		—		—		—		—		—		—		—
Total real estate — construction	144		472		606		483		240		116		1		3		2,065
Commercial lease financing
Risk Rating:
Pass	159		985		693		619		262		1,131		—		—		3,849
Criticized (Accruing)	—		—		11		23		15		15		—		—		64
Criticized (Nonaccruing)	—		—		—		1		1		1		—		—		3
Total commercial lease financing	159		985		704		643		278		1,147				—		3,916
Total commercial loans	$	3,729	$	17,803	$	6,970	$	6,887	$	4,285	$	9,603	$	24,439	$	204	$	73,920

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 $117 million and $113 million as of March 31, 2022, and December 31, 2021, respectively, presented in Other Assets on the Consolidated Balance Sheets, was excluded from the amortized cost basis disclosed in these tables.

Consumer Credit Exposure

Credit Risk Profile by FICO Score and Vintage (a)

As of March 31, 2022	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	2022		2021		2020		2019		2018		Prior						Total
Real estate — residential mortgage
FICO Score:
750 and above	$	1,351	$	8,320	$	2,802	$	705	$	74	$	1,135	$	—	$	—	$	14,387
660 to 749	437		1,235		299		140		32		302		—		—		2,445
Less than 660	12		35		16		18		16		149		—		—		246
No Score	50		19		—		1		1		31		1		—		103
Total real estate — residential mortgage	1,850		9,609		3,117		864		123		1,617		1		—		17,181
Home equity loans
FICO Score:
750 and above	96		1,073		797		233		87		731		2,209		404		5,630
660 to 749	40		356		239		97		39		221		940		135		2,067
Less than 660	3		29		26		20		12		100		320		44		554
No Score	—		—		2		—		—		2		3		—		7
Total home equity loans	139		1,458		1,064		350		138		1,054		3,472		583		8,258
Consumer direct loans
FICO Score:
750 and above	741		1,706		1,004		456		57		131		105		—		4,200
660 to 749	220		536		262		151		39		50		203		—		1,461
Less than 660	7		53		32		25		9		13		55		—		194
No Score	22		57		34		26		14		30		211		—		394
Total consumer direct loans	990		2,352		1,332		658		119		224		574		—		6,249
Credit cards
FICO Score:
750 and above	—		—		—		—		—		—		467		—		467
660 to 749	—		—		—		—		—		—		376		—		376
Less than 660	—		—		—		—		—		—		86		—		86
No Score	—		—		—		—		—		—		1		—		1
Total credit cards	—		—		—		—		—		—		930		—		930
Consumer indirect loans
FICO Score:
750 and above	—		3		—		—		—		28		—		—		31
660 to 749	—		—		—		—		—		21		—		—		21
Less than 660	—		—		—		—		—		10		—		—		10
No Score	—		—		—		—		—		—		—		—		—
Total consumer indirect loans	—		3		—		—		—		59		—		—		62
Total consumer loans	$	2,979	$	13,422	$	5,513	$	1,872	$	380	$	2,954	$	4,977	$	583	$	32,680

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 $75 million and $85 million as of March 31, 2022 and December 31, 2021, respectively, presented in 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” beginning on page 108 of our 2021 Form 10-K.

The following aging analysis of past due and current loans as of March 31, 2022, and December 31, 2021, provides further information regarding Key’s credit exposure.

Aging Analysis of Loan Portfolio(a)

March 31, 2022	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	$	52,537	$	23	$	31	$	38	$	186	$	278	$	52,815
Commercial real estate:
Commercial mortgage	15,072		4		5		3		40		52		15,124
Construction	2,064		1		—		—		—		1		2,065
Total commercial real estate loans	17,136		5		5		3		40		53		17,189
Commercial lease financing	3,908		4		1		—		3		8		3,916
Total commercial loans	$	73,581	$	32	$	37	$	41	$	229	$	339	$	73,920
Real estate — residential mortgage	$	17,098	$	7	$	2	$	1	$	73	$	83	$	17,181
Home equity loans	8,102		18		6		3		129		156		8,258
Consumer direct loans	6,229		8		4		4		4		20		6,249
Credit cards	914		4		3		6		3		16		930
Consumer indirect loans	60		1		—		—		1		2		62
Total consumer loans	$	32,403	$	38	$	15	$	14	$	210	$	277	$	32,680
Total loans	$	105,984	$	70	$	52	$	55	$	439	$	616	$	106,600

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

(b)Accrued interest of $193 million presented in 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, 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 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 March 31, 2022, the approximate 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 81% of their original contractual amount owed.

Nonperforming loans reduced expected interest income by $5 million for the three months ended March 31, 2022, and $7 million for the three months ended March 31, 2021.

The amortized cost basis of nonperforming loans on nonaccrual status for which there is no related allowance for credit losses was $301 million at March 31, 2022.

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, enterprise value, 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 the three months ended March 31, 2022.

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.

Commitments outstanding to lend additional funds to borrowers whose loan terms have been modified in TDRs were $1 million and $15 million at March 31, 2022, and December 31, 2021, 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 March 31, 2022, and December 31, 2021, the recorded investment of consumer residential mortgage loans in the process of foreclosure was approximately $126 million and $104 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:

	Three Months Ended March 31,
Dollars in millions	2022		2021
Commercial loans:
Extension of Maturity Date	$	—	$	41
Payment or Covenant Modification/Deferment	1		10
Bankruptcy Plan Modification	—		—
Increase in new commitment or new money	—		—
Total	$	1	$	51
Consumer loans:
Interest rate reduction	$	1	$	2
Other	9		4
Total	$	10	$	6
Total TDRs	$	11	$	57

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

	Three Months Ended March 31,
Dollars in millions	2022		2021
Balance at beginning of the period	$	220	$	363
Additions	11		59
Payments	(12)		(21)
Charge-offs	—		(25)
Balance at end of period	$	219	$	376

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

	March 31, 2022					December 31, 2021
	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	37	$	25	$	14	36	$	30	$	14
Commercial real estate:
Commercial mortgage	4	50		23		3	50		25
Total commercial real estate loans	4	50		23		3	50		25
Total commercial loans	41	75		37		39	80		39
Real estate — residential mortgage	223	27		25		220	26		24
Home equity loans	514	35		31		531	36		31
Consumer direct loans	208	2		2		207	3		2
Credit cards	332	2		2		360	2		2
Consumer indirect loans	22	2		1		23	1		1
Total consumer loans	1,299	68		61		1,341	68		60
Total nonperforming TDRs	1,340	143		98		1,380	148		99
Prior-year accruing:(a)
Commercial and industrial	13	—		—		11	—		—
Commercial real estate
Commercial mortgage	1	—		—		1	—		—
Total commercial real estate loans	1	—		—		1	—		—
Total commercial loans	14	—		—		12	—		—
Real estate — residential mortgage	463	41		35		455	39		33
Home equity loans	1,615	97		75		1,628	97		75
Consumer direct loans	226	4		3		236	5		3
Credit cards	599	4		2		579	4		2
Consumer indirect loans	128	14		7		139	15		8
Total consumer loans	3,031	160		122		3,037	160		121
Total prior-year accruing TDRs	3,045	160		121		3,049	160		121
Total TDRs	4,385	$	303	$	219	4,429	$	308	$	220

(a)All TDRs that were restructured prior to January 1, 2022, and January 1, 2021, 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 the three months ended March 31, 2022, there were four commercial loan TDRs and 38 consumer loan TDRs with a combined recorded investment of $8 million that experienced payment defaults after modifications resulting in TDR status during 2021. During the three months ended March 31, 2021, there were two commercial loan TDRs and 36 consumer loan TDRs with a combined recorded investment of $1 million that experienced payment defaults after modifications resulting in TDR status during 2020.

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.

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

	Three months ended March 31,
Dollars in millions	2022		2021
Balance at beginning of period	$	160	$	197
Provision (credit) for losses on off balance sheet exposures	6		(19)
Balance at end of period	$	166	$	178