Loans and ACL

12 Months Ended

Dec. 31, 2019

The following tables present loans and leases HFI by aging category. Guaranteed loans are not placed on nonaccrual status regardless of delinquency because collection of principal and interest is reasonably assured by the government.


	Accruing
December 31, 2019 (Dollars in millions)	Current		30-89 Days Past Due		90 Days Or More Past Due		Nonperforming		Total
Commercial:
Commercial and industrial	$	129,873	$	94	$	1	$	212	$	130,180
CRE	26,817		5		—		10		26,832
Commercial construction	6,204		1		—		—		6,205
Lease financing	6,112		2		—		8		6,122
Consumer:
Residential mortgage	50,975		498		543		55		52,071
Residential home equity and direct	26,846		122		9		67		27,044
Indirect auto	23,771		560		11		100		24,442
Indirect other	11,011		85		2		2		11,100
Student	5,905		650		188		—		6,743
Credit card	5,541		56		22		—		5,619
PCI	2,126		140		1,218		—		3,484
Total	$	295,181	$	2,213	$	1,994	$	454	$	299,842

	Accruing
December 31, 2018 (Dollars in millions)	Current		30-89 Days Past Due		90 Days Or More Past Due		Nonperforming		Total
Commercial:
Commercial and industrial	$	61,701	$	34	$	—	$	200	$	61,935
CRE	16,741		4		—		63		16,808
Commercial construction	4,249		1		—		2		4,252
Lease financing	2,014		1		—		3		2,018
Consumer:
Residential mortgage	30,413		456		405		119		31,393
Residential home equity and direct	11,651		63		8		53		11,775
Indirect auto	10,804		390		6		82		11,282
Indirect other	6,097		46		—		—		6,143

Credit card	2,902		26		13		—		2,941
PCI	413		23		30		—		466
Total	$	146,985	$	1,044	$	462	$	522	$	149,013

The Company has undertaken a number of strategic actions to enhance the credit quality and interest-rate sensitivity of its loan and lease portfolio. During the third quarter of 2019, management sold a $4.3 billion residential mortgage loan portfolio. This sale was followed by a number of balance sheet restructuring actions taken in the fourth quarter of 2019, including the transfer of:

•$2.5 billion of residential mortgage loans to LHFS,

•$356 million of commercial loans to LHFS as a result of a decision to exit a business, and

•$381 million of mortgage, consumer and commercial loans to LHFS related to the forthcoming branch divestiture arising from the Merger.

The following table presents the carrying amount of loans by risk rating and performing status. Student loans are excluded as there is nominal risk of credit loss due to government guarantees or other credit enhancements. PCI loans were excluded because their related ALLL is determined by loan pool performance and revolving credit loans were excluded as the loans are charged-off rather than reclassifying these loans to nonperforming:


	December 31, 2019														December 31, 2018
(Dollars in millions)	Commercial & Industrial		CRE		Commercial Construction		Lease Financing		Commercial & Industrial		CRE		Commercial Construction		Lease Financing


Commercial:
Pass	$	127,229	$	26,393	$	6,037	$	6,039	$	60,655	$	16,509	$	4,203	$	2,012
Special mention	1,264		145		37		19		216		45		16		—
Substandard-performing	1,475		284		131		56		864		191		31		3
Nonperforming	212		10		—		8		200		63		2		3
Total	$	130,180	$	26,832	$	6,205	$	6,122	$	61,935	$	16,808	$	4,252	$	2,018

	December 31, 2019														December 31, 2018
	Residential Mortgage		Residential home equity and direct		Indirect auto		Indirect Other		Residential Mortgage		Residential home equity and direct		Indirect auto		Indirect Other
Consumer:
Performing	$	52,016	$	26,977	$	24,342	11,098		$	31,274	$	11,722	$	11,200	$	6,143
Nonperforming	55		67		100		2		119		53		82		—
Total	$	52,071	$	27,044	24,442		$	11,100	$	31,393	$	11,775	$	11,282	$	6,143

ACL

The following tables present activity in the ACL:













































(Dollars in millions)	Balance at Jan 1, 2017		Charge-Offs		Recoveries		Provision (Benefit)		Assumed in the Merger		Balance at Dec 31, 2017
Commercial:
Commercial and industrial	$	530	$	(95)	$	36	$	51	$	—	$	522
CRE	120		(7)		8		(3)		—		118
Commercial construction	25		(3)		8		12				42
Lease financing	7		(5)		2		5		—		9
Consumer:
Residential mortgage	227		(47)		2		27		—		209
Residential home equity and direct	111		(69)		27		44		—		113
Indirect auto	273		(350)		44		329		—		296
Indirect other	54		(52)		16		34		—		52

Credit card	98		(68)		17		54		—		101
PCI	44		(1)		—		(15)		—		28
ALLL	1,489		(697)		160		538		—		1,490
RUFC	110		—		—		9		—		119
ACL	$	1,599	$	(697)	$	160	$	547	$	—	$	1,609


(Dollars in millions)	Balance at Jan 1, 2018		Charge-Offs		Recoveries		Provision (Benefit)		Assumed in the Merger		Balance at Dec 31, 2018
Commercial:
Commercial and industrial	$	522	$	(92)	$	39	$	77	$	—	$	546
CRE	118		(10)		3		31		—		142
Commercial construction	42		(3)		5		4				48
Lease financing	9		(4)		1		5		—		11
Consumer:
Residential mortgage	209		(21)		2		42		—		232
Residential home equity and direct	113		(79)		25		45		—		104
Indirect auto	296		(342)		49		295		—		298
Indirect other	52		(49)		13		42		—		58

Credit card	101		(76)		17		68		—		110
PCI	28		(2)		—		(17)		—		9
ALLL	1,490		(678)		154		592		—		1,558
RUFC	119		—		—		(26)		—		93
ACL	$	1,609	$	(678)	$	154	$	566	$	—	$	1,651

(Dollars in millions)	Balance at Jan 1, 2019		Charge-Offs		Recoveries		Provision (Benefit)		Assumed in the Merger		Balance at Dec 31, 2019
Commercial:
Commercial and industrial	$	546	$	(90)	$	25	$	79	$	—	$	560
CRE	142		(33)		5		36		—		150
Commercial construction	48		—		3		1				52
Lease financing	11		(11)		1		9		—		10
Consumer:
Residential mortgage	232		(21)		2		(37)		—		176
Residential home equity and direct	104		(93)		30		66		—		107
Indirect auto	298		(370)		52		324		—		304
Indirect other	58		(62)		17		47				60

Credit card	110		(109)		20		101		—		122
PCI	9		—		—		(1)		—		8
ALLL	1,558		(789)		155		625		—		1,549
RUFC	93		—		—		(10)		257		340
ACL	$	1,651	$	(789)	$	155	$	615	$	257	$	1,889

The following table provides a summary of loans that are collectively evaluated for impairment:


	December 31, 2019						December 31, 2018
(Dollars in millions)	Recorded Investment		Related ALLL		Recorded Investment		Related ALLL


Commercial:
Commercial and industrial	$	129,889	$	540	$	61,629	$	521
CRE	26,803		148		16,714		134
Commercial construction	6,167		45		4,246		47
Lease financing	6,113		10		2,015		11
Consumer:
Residential mortgage	51,452		134		30,539		164
Residential home equity and direct	26,983		102		11,707		99
Indirect auto	24,084		240		10,962		242
Indirect other	11,095		59		6,137		57
Student	6,743		—		—		—
Credit card	5,588		110		2,914		99
PCI	3,484		8		466		9
Total	$	298,401	$	1,396	$	147,329	$	1,383

The following tables set forth certain information regarding impaired loans, excluding PCI and LHFS, that were individually evaluated for impairment. These tables exclude guaranteed student loans and guaranteed residential mortgages for which there was nominal risk of principal loss due to the government guarantee or other credit enhancements.



	UPB		Recorded Investment								Related ALLL		Average Recorded Investment		Interest Income Recognized
As of / For The Year Ended December 31, 2019 (Dollars in millions)					Without an ALLL			With an ALLL
Commercial:
Commercial and industrial	$	339	$	124		$	167		$	20	$	298	$	6
CRE	29		3			26			2		71		1
Commercial construction	39		—			38			7		5		—
Lease financing	18		7			2			—		2		—
Consumer:
Residential mortgage	650		92			527			42		799		34
Residential home equity and direct	76		24			37			5		65		3
Indirect auto	367		9			349			64		334		53
Indirect other	5		—			5			1		4		—

Credit card	31		—			31			12		28		1
Total	$	1,554	$	259		$	1,182		$	153	$	1,606	$	98

	UPB		Recorded Investment								Related ALLL		Average Recorded Investment		Interest Income Recognized
As of / For The Year Ended December 31, 2018 (Dollars in millions)					Without an ALLL			With an ALLL
Commercial:
Commercial and industrial	$	318	$	95		$	211		$	25	$	343	$	6
CRE	96		28			66			8		87		2
Commercial construction	6		1			5			1		10		—
Lease financing	3		—			3			—		6		—
Consumer:
Residential mortgage	904		122			732			68		841		34
Residential home equity and direct	87		26			42			6		72		4
Indirect auto	329		5			315			56		301		46
Indirect other	6		1			5			1		5		—

Credit card	27		—			27			10		29		1
Total	$	1,776	$	278		$	1,406		$	175	$	1,694	$	93

TDRs

The following table presents a summary of TDRs, all of which are considered impaired:



December 31, (Dollars in millions)	2019		2018
Performing TDRs:
Commercial:
Commercial and industrial	$	47	$	65
CRE	6		8
Commercial construction	37		2

Consumer:
Residential mortgage	470		656
Residential home equity and direct	51		56
Indirect auto	333		299
Indirect other	5		6

Credit card	31		27
Total performing TDRs	980		1,119
Nonperforming TDRs (also included in NPL disclosures)	82		176
Total TDRs	$	1,062	$	1,295
ALLL attributable to TDRs	$	132	$	146

The primary reason loan modifications were classified as TDRs is summarized below. Balances represent the recorded investment at the end of the quarter in which the modification was made. Rate modifications consist of TDRs made with below market interest rates, including those that also have modifications of loan structures.




















	2019												2018										2017
Year Ended December 31, (Dollars in millions)	Type of Modification								ALLL Impact		Type of Modification						ALLL Impact			Type of Modification				ALLL Impact
			Rate			Structure					Rate		Structure						Rate			Structure
Newly designated TDRs:
Commercial:
Commercial and industrial	$	56		$	11		$	2	$	74	$	62	$	—	$	79	$	101		$	3
CRE	1			1			—		31		2		—		6		8			—
Commercial construction	36			—			5		1		1		—		8		2			1

Consumer:
Residential mortgage	296			27			13		250		30		16		357		46			25
Residential home equity and direct	8			3			—		8		2		—		10		3			—
Indirect auto	209			8			25		191		4		22		188		6			21
Indirect other	4			—			—		4		—		—		4		—			—

Credit card	24			—			5		18		—		4		19		—			4
Re-modification of previously designated TDRs	53			23			—		120		15		—		176		44			—

Charge-offs and forgiveness of principal and interest for TDRs were immaterial for all periods presented.

The pre-default balance for modifications that had been classified as TDRs during the previous 12 months that experienced a payment default was $78 million, $76 million and $104 million for the years ended December 31, 2019, 2018 and 2017, respectively. Payment default is defined as movement of the TDR to nonperforming status, foreclosure or charge-off, whichever occurs first.

NPLs and Foreclosed Property

The following table presents a summary of nonperforming assets and residential mortgage loans in the process of foreclosure:



December 31, (Dollars in millions)	2019		2018
Nonperforming loans and leases HFI	$	454	$	522
Nonperforming LHFS	107		—
Foreclosed real estate	82		35
Other foreclosed property	41		28
Total nonperforming assets	$	684	$	585

Residential mortgage loans in the process of foreclosure	$	409	$	253

Unearned Income, Discounts and Net Deferred Loan Fees and Costs

The following table presents additional information about loans and leases:



December 31, (Dollars in millions)	2019		2018
Unearned income, discounts and net deferred loan fees and costs, excluding PCI	$	4,069	$	(52)

PCI

The following table presents a summary of PCI loans arising from the Merger:


(Dollars in millions)	December 6, 2019
Contractually required payments including interest	$	4,418
Less: nonaccretable difference	(670)
Cash flows expected to be collected	3,748
Less: accretable yield	(521)
Fair value of acquired PCI loans	$	3,227

The following table presents a rollforward of the accretable yield and additional information on PCI loans:


(Dollars in millions)
Accretable yield balance at January 1, 2019	$	298
Merger with SunTrust	521
Accretion	(100)
Reclassification (to) from nonaccretable difference	27
Accretable yield balance at December 31, 2019	$	746

Unpaid principal balance at December 31, 2019	$	4,044