Outstanding Loans and Leases |
Outstanding Loans and Leases
The following tables present total outstanding loans and leases and an aging analysis for the Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2017 and December 31, 2016.
During the second quarter of 2017, the Corporation sold its non-U.S. consumer credit card business. This business, which at December 31, 2016 included $9.2 billion of non-U.S. credit card loans and the related allowance for loan and lease losses of $243 million, was presented in assets of business held for sale on the Consolidated Balance Sheet. In this Note, all applicable amounts for December 31, 2016 include these balances, unless otherwise noted. For additional information, see Note 1 – Summary of Significant Accounting Principles.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2017 |
(Dollars in millions) |
30-59 Days Past Due (1)
|
|
60-89 Days Past Due (1)
|
|
90 Days or More
Past Due (2)
|
|
Total Past Due 30 Days
or More
|
|
Total Current or Less Than 30 Days Past Due (3)
|
|
Purchased Credit-impaired (4)
|
|
Loans Accounted for Under the Fair Value Option |
|
Total
Outstandings
|
Consumer real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
$ |
1,583 |
|
|
$ |
306 |
|
|
$ |
986 |
|
|
$ |
2,875 |
|
|
$ |
167,782 |
|
|
|
|
|
|
$ |
170,657 |
|
Home equity |
246 |
|
|
111 |
|
|
435 |
|
|
792 |
|
|
44,585 |
|
|
|
|
|
|
45,377 |
|
Non-core portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage (5)
|
1,144 |
|
|
540 |
|
|
3,728 |
|
|
5,412 |
|
|
14,978 |
|
|
$ |
8,399 |
|
|
|
|
28,789 |
|
Home equity |
269 |
|
|
131 |
|
|
613 |
|
|
1,013 |
|
|
10,449 |
|
|
2,913 |
|
|
|
|
14,375 |
|
Credit card and other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. credit card |
492 |
|
|
355 |
|
|
810 |
|
|
1,657 |
|
|
90,945 |
|
|
|
|
|
|
92,602 |
|
Direct/Indirect consumer (6)
|
273 |
|
|
82 |
|
|
33 |
|
|
388 |
|
|
93,003 |
|
|
|
|
|
|
93,391 |
|
Other consumer (7)
|
7 |
|
|
1 |
|
|
1 |
|
|
9 |
|
|
2,415 |
|
|
|
|
|
|
2,424 |
|
Total consumer |
4,014 |
|
|
1,526 |
|
|
6,606 |
|
|
12,146 |
|
|
424,157 |
|
|
11,312 |
|
|
|
|
447,615 |
|
Consumer loans accounted for under the fair value option (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
978 |
|
|
978 |
|
Total consumer loans and leases |
4,014 |
|
|
1,526 |
|
|
6,606 |
|
|
12,146 |
|
|
424,157 |
|
|
11,312 |
|
|
978 |
|
|
448,593 |
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. commercial |
459 |
|
|
176 |
|
|
349 |
|
|
984 |
|
|
281,693 |
|
|
|
|
|
|
282,677 |
|
Commercial real estate (9)
|
13 |
|
|
2 |
|
|
51 |
|
|
66 |
|
|
59,562 |
|
|
|
|
|
|
59,628 |
|
Commercial lease financing |
39 |
|
|
56 |
|
|
45 |
|
|
140 |
|
|
21,273 |
|
|
|
|
|
|
21,413 |
|
Non-U.S. commercial |
9 |
|
|
14 |
|
|
— |
|
|
23 |
|
|
95,873 |
|
|
|
|
|
|
95,896 |
|
U.S. small business commercial |
63 |
|
|
38 |
|
|
80 |
|
|
181 |
|
|
13,422 |
|
|
|
|
|
|
13,603 |
|
Total commercial |
583 |
|
|
286 |
|
|
525 |
|
|
1,394 |
|
|
471,823 |
|
|
|
|
|
|
473,217 |
|
Commercial loans accounted for under the fair value option (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,307 |
|
|
5,307 |
|
Total commercial loans and leases |
583 |
|
|
286 |
|
|
525 |
|
|
1,394 |
|
|
471,823 |
|
|
|
|
5,307 |
|
|
478,524 |
|
Total loans and leases (10)
|
$ |
4,597 |
|
|
$ |
1,812 |
|
|
$ |
7,131 |
|
|
$ |
13,540 |
|
|
$ |
895,980 |
|
|
$ |
11,312 |
|
|
$ |
6,285 |
|
|
$ |
927,117 |
|
Percentage of outstandings |
0.50 |
% |
|
0.19 |
% |
|
0.77 |
% |
|
1.46 |
% |
|
96.64 |
% |
|
1.22 |
% |
|
0.68 |
% |
|
100.00 |
% |
|
|
(1) |
Consumer real estate loans 30-59 days past due includes fully-insured loans of $905 million and nonperforming loans of $282 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $443 million and nonperforming loans of $201 million.
|
|
|
(2) |
Consumer real estate includes fully-insured loans of $3.4 billion.
|
|
|
(3) |
Consumer real estate includes $2.3 billion and direct/indirect consumer includes $39 million of nonperforming loans.
|
|
|
(4) |
Purchased credit-impaired (PCI) loan amounts are shown gross of the valuation allowance. |
|
|
(5) |
Total outstandings includes pay option loans of $1.5 billion. The Corporation no longer originates this product.
|
|
|
(6) |
Total outstandings includes auto and specialty lending loans of $50.0 billion, unsecured consumer lending loans of $484 million, U.S. securities-based lending loans of $39.3 billion, non-U.S. consumer loans of $2.9 billion and other consumer loans of $682 million.
|
|
|
(7) |
Total outstandings includes consumer leases of $2.3 billion and consumer overdrafts of $160 million.
|
|
|
(8) |
Consumer loans accounted for under the fair value option were residential mortgage loans of $615 million and home equity loans of $363 million. Commercial loans accounted for under the fair value option were U.S. commercial loans of $2.8 billion and non-U.S. commercial loans of $2.5 billion. For additional information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
|
|
|
(9) |
Total outstandings includes U.S. commercial real estate loans of $55.5 billion and non-U.S. commercial real estate loans of $4.2 billion.
|
|
|
(10) |
The Corporation pledged $152.9 billion of loans to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank (FHLB). This amount is not included in the parenthetical disclosure of loans and leases pledged as collateral on the Consolidated Balance Sheet as there were no related outstanding borrowings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
(Dollars in millions) |
30-59 Days Past Due (1)
|
|
60-89 Days Past Due (1)
|
|
90 Days or More Past Due (2)
|
|
Total Past Due 30 Days or More |
|
Total
Current or
Less Than
30 Days
Past Due (3)
|
|
Purchased Credit-impaired (4)
|
|
Loans
Accounted
for Under
the Fair
Value Option
|
|
Total Outstandings |
Consumer real estate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
$ |
1,340 |
|
|
$ |
425 |
|
|
$ |
1,213 |
|
|
$ |
2,978 |
|
|
$ |
153,519 |
|
|
|
|
|
|
|
|
$ |
156,497 |
|
Home equity |
239 |
|
|
105 |
|
|
451 |
|
|
795 |
|
|
48,578 |
|
|
|
|
|
|
|
|
49,373 |
|
Non-core portfolio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage (5)
|
1,338 |
|
|
674 |
|
|
5,343 |
|
|
7,355 |
|
|
17,818 |
|
|
$ |
10,127 |
|
|
|
|
|
35,300 |
|
Home equity |
260 |
|
|
136 |
|
|
832 |
|
|
1,228 |
|
|
12,231 |
|
|
3,611 |
|
|
|
|
|
17,070 |
|
Credit card and other consumer |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. credit card |
472 |
|
|
341 |
|
|
782 |
|
|
1,595 |
|
|
90,683 |
|
|
|
|
|
|
|
92,278 |
|
Non-U.S. credit card |
37 |
|
|
27 |
|
|
66 |
|
|
130 |
|
|
9,084 |
|
|
|
|
|
|
|
9,214 |
|
Direct/Indirect consumer (6)
|
272 |
|
|
79 |
|
|
34 |
|
|
385 |
|
|
93,704 |
|
|
|
|
|
|
|
94,089 |
|
Other consumer (7)
|
26 |
|
|
8 |
|
|
6 |
|
|
40 |
|
|
2,459 |
|
|
|
|
|
|
|
2,499 |
|
Total consumer |
3,984 |
|
|
1,795 |
|
|
8,727 |
|
|
14,506 |
|
|
428,076 |
|
|
13,738 |
|
|
|
|
456,320 |
|
Consumer loans accounted for under the fair value option (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,051 |
|
|
1,051 |
|
Total consumer loans and leases |
3,984 |
|
|
1,795 |
|
|
8,727 |
|
|
14,506 |
|
|
428,076 |
|
|
13,738 |
|
|
1,051 |
|
|
457,371 |
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. commercial |
952 |
|
|
263 |
|
|
400 |
|
|
1,615 |
|
|
268,757 |
|
|
|
|
|
|
|
270,372 |
|
Commercial real estate (9)
|
20 |
|
|
10 |
|
|
56 |
|
|
86 |
|
|
57,269 |
|
|
|
|
|
|
|
57,355 |
|
Commercial lease financing |
167 |
|
|
21 |
|
|
27 |
|
|
215 |
|
|
22,160 |
|
|
|
|
|
|
|
22,375 |
|
Non-U.S. commercial |
348 |
|
|
4 |
|
|
5 |
|
|
357 |
|
|
89,040 |
|
|
|
|
|
|
|
89,397 |
|
U.S. small business commercial |
96 |
|
|
49 |
|
|
84 |
|
|
229 |
|
|
12,764 |
|
|
|
|
|
|
|
12,993 |
|
Total commercial |
1,583 |
|
|
347 |
|
|
572 |
|
|
2,502 |
|
|
449,990 |
|
|
|
|
|
|
|
452,492 |
|
Commercial loans accounted for under the fair value option (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
6,034 |
|
|
6,034 |
|
Total commercial loans and leases |
1,583 |
|
|
347 |
|
|
572 |
|
|
2,502 |
|
|
449,990 |
|
|
|
|
6,034 |
|
|
458,526 |
|
Total consumer and commercial loans and leases (10)
|
$ |
5,567 |
|
|
$ |
2,142 |
|
|
$ |
9,299 |
|
|
$ |
17,008 |
|
|
$ |
878,066 |
|
|
$ |
13,738 |
|
|
$ |
7,085 |
|
|
$ |
915,897 |
|
Less: Loans of business held for sale (10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(9,214 |
) |
Total loans and leases (11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
906,683 |
|
Percentage of outstandings (10)
|
0.61 |
% |
|
0.23 |
% |
|
1.02 |
% |
|
1.86 |
% |
|
95.87 |
% |
|
1.50 |
% |
|
0.77 |
% |
|
100.00 |
% |
|
|
(1) |
Consumer real estate loans 30-59 days past due includes fully-insured loans of $1.1 billion and nonperforming loans of $266 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $547 million and nonperforming loans of $216 million.
|
|
|
(2) |
Consumer real estate includes fully-insured loans of $4.8 billion.
|
|
|
(3) |
Consumer real estate includes $2.5 billion and direct/indirect consumer includes $27 million of nonperforming loans.
|
|
|
(4) |
PCI loan amounts are shown gross of the valuation allowance. |
|
|
(5) |
Total outstandings includes pay option loans of $1.8 billion. The Corporation no longer originates this product.
|
|
|
(6) |
Total outstandings includes auto and specialty lending loans of $48.9 billion, unsecured consumer lending loans of $585 million, U.S. securities-based lending loans of $40.1 billion, non-U.S. consumer loans of $3.0 billion, student loans of $497 million and other consumer loans of $1.1 billion.
|
|
|
(7) |
Total outstandings includes consumer finance loans of $465 million, consumer leases of $1.9 billion and consumer overdrafts of $157 million.
|
|
|
(8) |
Consumer loans accounted for under the fair value option were residential mortgage loans of $710 million and home equity loans of $341 million. Commercial loans accounted for under the fair value option were U.S. commercial loans of $2.9 billion and non-U.S. commercial loans of $3.1 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
|
|
|
(9) |
Total outstandings includes U.S. commercial real estate loans of $54.3 billion and non-U.S. commercial real estate loans of $3.1 billion.
|
|
|
(10) |
Includes non-U.S. credit card loans, which were included in assets of business held for sale on the Consolidated Balance Sheet. |
|
|
(11) |
The Corporation pledged $143.1 billion of loans to secure potential borrowing capacity with the Federal Reserve Bank and FHLB. This amount is not included in the parenthetical disclosure of loans and leases pledged as collateral on the Consolidated Balance Sheet as there were no related outstanding borrowings.
|
The Corporation categorizes consumer real estate loans as core and non-core based on loan and customer characteristics such as origination date, product type, LTV, FICO score and delinquency status consistent with its current consumer and mortgage servicing strategy. Generally, loans that were originated after January 1, 2010, qualified under government-sponsored enterprise (GSE) underwriting guidelines, or otherwise met the Corporation's underwriting guidelines in place in 2015 are characterized as core loans. Loans held in legacy private-label securitizations, government-insured loans originated prior to 2010, loan products no longer originated, and loans originated prior to 2010 and classified as nonperforming or modified in a troubled debt restructuring (TDR) prior to 2016 are generally characterized as non-core loans, and are principally run-off portfolios.
The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $6.5 billion and $6.4 billion at September 30, 2017 and December 31, 2016, providing full credit protection on residential mortgage loans that become severely delinquent. All of these loans are individually insured and therefore the Corporation does not record an allowance for credit losses related to these loans.
Nonperforming Loans and Leases
The Corporation classifies junior-lien home equity loans as nonperforming when the first-lien loan becomes 90 days past due even if the junior-lien loan is performing. At September 30, 2017 and December 31, 2016, $336 million and $428 million of such junior-lien home equity loans were included in nonperforming loans.
The Corporation classifies consumer real estate loans that have been discharged in Chapter 7 bankruptcy and not reaffirmed by the borrower as TDRs, irrespective of payment history or delinquency status, even if the repayment terms for the loan have not been otherwise modified. The Corporation continues to have a lien on the underlying collateral. At September 30, 2017, nonperforming loans discharged in Chapter 7 bankruptcy with no change in repayment terms were $379 million of which $224 million were current on their contractual payments, while $127 million were 90 days or more past due. Of the contractually current nonperforming loans, approximately 78 percent were discharged in Chapter 7 bankruptcy over 12 months ago, and approximately 68 percent were discharged 24 months or more ago.
During the three and nine months ended September 30, 2017, the Corporation sold nonperforming and other delinquent consumer real estate loans with a carrying value of $700 million and $1.2 billion, including $538 million and $742 million of PCI loans, compared to $360 million and $1.8 billion, including $111 million and $435 million of PCI loans, for the same periods in 2016. The Corporation recorded net recoveries of $88 million and $102 million related to these sales for the three and nine months ended September 30, 2017 compared to net recoveries of $6 million and net charge-offs of $39 million for the same periods in 2016. Gains related to these sales of $38 million and $50 million were recorded in other income in the Consolidated Statement of Income for the three and nine months ended September 30, 2017 compared to gains of $19 million and $63 million for the same periods in 2016. During the nine months ended September 30, 2017, the Corporation transferred nonperforming loans with a net carrying value of $198 million to held-for-sale, which have been subsequently sold during the nine-month period. There were no transfers of nonperforming loans to held-for-sale for the same period in 2016.
The table below presents the Corporation’s nonperforming loans and leases including nonperforming TDRs, and loans accruing past due 90 days or more at September 30, 2017 and December 31, 2016. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation's 2016 Annual Report on Form 10-K.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Quality |
|
|
|
|
|
|
|
|
|
|
|
Nonperforming Loans and Leases |
|
Accruing Past Due
90 Days or More
|
(Dollars in millions) |
September 30 2017 |
|
December 31 2016 |
|
September 30 2017 |
|
December 31 2016 |
Consumer real estate |
|
|
|
|
|
|
|
|
|
|
|
Core portfolio |
|
|
|
|
|
|
|
Residential mortgage (1)
|
$ |
1,076 |
|
|
$ |
1,274 |
|
|
$ |
396 |
|
|
$ |
486 |
|
Home equity |
1,046 |
|
|
969 |
|
|
— |
|
|
— |
|
Non-core portfolio |
|
|
|
|
|
|
|
|
|
|
Residential mortgage (1)
|
1,442 |
|
|
1,782 |
|
|
2,976 |
|
|
4,307 |
|
Home equity |
1,645 |
|
|
1,949 |
|
|
— |
|
|
— |
|
Credit card and other consumer |
|
|
|
|
|
|
|
|
|
U.S. credit card |
n/a |
|
|
n/a |
|
|
810 |
|
|
782 |
|
Non-U.S. credit card |
n/a |
|
|
n/a |
|
|
— |
|
|
66 |
|
Direct/Indirect consumer |
43 |
|
|
28 |
|
|
31 |
|
|
34 |
|
Other consumer |
— |
|
|
2 |
|
|
1 |
|
|
4 |
|
Total consumer |
5,252 |
|
|
6,004 |
|
|
4,214 |
|
|
5,679 |
|
Commercial |
|
|
|
|
|
|
|
|
|
|
|
U.S. commercial |
863 |
|
|
1,256 |
|
|
82 |
|
|
106 |
|
Commercial real estate |
130 |
|
|
72 |
|
|
— |
|
|
7 |
|
Commercial lease financing |
26 |
|
|
36 |
|
|
38 |
|
|
19 |
|
Non-U.S. commercial |
244 |
|
|
279 |
|
|
— |
|
|
5 |
|
U.S. small business commercial |
55 |
|
|
60 |
|
|
68 |
|
|
71 |
|
Total commercial |
1,318 |
|
|
1,703 |
|
|
188 |
|
|
208 |
|
Total loans and leases |
$ |
6,570 |
|
|
$ |
7,707 |
|
|
$ |
4,402 |
|
|
$ |
5,887 |
|
|
|
(1) |
Residential mortgage loans in the core and non-core portfolios accruing past due 90 days or more are fully-insured loans. At September 30, 2017 and December 31, 2016, residential mortgage includes $2.3 billion and $3.0 billion of loans on which interest has been curtailed by the Federal Housing Administration (FHA), and therefore are no longer accruing interest, although principal is still insured, and $1.1 billion and $1.8 billion of loans on which interest is still accruing.
|
n/a = not applicable
Credit Quality Indicators
The Corporation monitors credit quality within its Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments based on primary credit quality indicators. Within the consumer portfolio segments, the primary credit quality indicators are refreshed LTV and refreshed FICO score. Refreshed LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan, refreshed quarterly. FICO score measures the creditworthiness of the borrower based on the financial obligations of the borrower and the borrower’s credit history. FICO scores are typically refreshed quarterly or more frequently. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans. For more information on the portfolio segments and credit quality indicators, see Note 1 – Summary of Significant Accounting Principles and Note 4 – Outstanding Loans and Leases to the Consolidated Financial Statements of the Corporation's 2016 Annual Report on Form 10-K.
The following tables present certain credit quality indicators for the Corporation’s Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2017 and December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Real Estate – Credit Quality Indicators (1)
|
|
September 30, 2017 |
(Dollars in millions) |
Core Residential
Mortgage (2)
|
|
Non-core Residential Mortgage (2)
|
|
Residential Mortgage PCI (3)
|
|
Core Home Equity (2)
|
|
Non-core Home Equity (2)
|
|
Home
Equity PCI
|
Refreshed LTV (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than or equal to 90 percent |
$ |
146,679 |
|
|
$ |
12,603 |
|
|
$ |
7,095 |
|
|
$ |
43,942 |
|
|
$ |
8,128 |
|
|
$ |
1,881 |
|
Greater than 90 percent but less than or equal to 100 percent |
3,288 |
|
|
1,016 |
|
|
624 |
|
|
660 |
|
|
1,211 |
|
|
420 |
|
Greater than 100 percent |
1,444 |
|
|
1,231 |
|
|
680 |
|
|
775 |
|
|
2,123 |
|
|
612 |
|
Fully-insured loans (5)
|
19,246 |
|
|
5,540 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total consumer real estate |
$ |
170,657 |
|
|
$ |
20,390 |
|
|
$ |
8,399 |
|
|
$ |
45,377 |
|
|
$ |
11,462 |
|
|
$ |
2,913 |
|
Refreshed FICO score |
|
|
|
|
|
|
|
|
|
|
|
Less than 620 |
$ |
2,285 |
|
|
$ |
2,560 |
|
|
$ |
2,102 |
|
|
$ |
1,192 |
|
|
$ |
2,268 |
|
|
$ |
470 |
|
Greater than or equal to 620 and less than 680 |
4,652 |
|
|
2,260 |
|
|
1,740 |
|
|
2,416 |
|
|
2,506 |
|
|
495 |
|
Greater than or equal to 680 and less than 740 |
22,153 |
|
|
3,720 |
|
|
2,446 |
|
|
8,484 |
|
|
2,860 |
|
|
862 |
|
Greater than or equal to 740 |
122,321 |
|
|
6,310 |
|
|
2,111 |
|
|
33,285 |
|
|
3,828 |
|
|
1,086 |
|
Fully-insured loans (5)
|
19,246 |
|
|
5,540 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total consumer real estate |
$ |
170,657 |
|
|
$ |
20,390 |
|
|
$ |
8,399 |
|
|
$ |
45,377 |
|
|
$ |
11,462 |
|
|
$ |
2,913 |
|
|
|
(1) |
Excludes $978 million of loans accounted for under the fair value option.
|
|
|
(3) |
Includes $1.3 billion of pay option loans. The Corporation no longer originates this product.
|
|
|
(4) |
Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance. |
|
|
(5) |
Credit quality indicators are not reported for fully-insured loans as principal repayment is insured. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Card and Other Consumer – Credit Quality Indicators |
|
September 30, 2017 |
(Dollars in millions) |
U.S. Credit
Card
|
|
Direct/Indirect
Consumer
|
|
Other
Consumer
|
Refreshed FICO score |
|
|
|
|
|
|
|
|
Less than 620 |
$ |
4,612 |
|
|
$ |
1,578 |
|
|
$ |
42 |
|
Greater than or equal to 620 and less than 680 |
12,195 |
|
|
2,003 |
|
|
125 |
|
Greater than or equal to 680 and less than 740 |
34,796 |
|
|
12,161 |
|
|
364 |
|
Greater than or equal to 740 |
40,999 |
|
|
34,731 |
|
|
1,730 |
|
Other internal credit metrics (1, 2)
|
— |
|
|
42,918 |
|
|
163 |
|
Total credit card and other consumer |
$ |
92,602 |
|
|
$ |
93,391 |
|
|
$ |
2,424 |
|
|
|
(1) |
Other internal credit metrics may include delinquency status, geography or other factors. |
|
|
(2) |
Direct/indirect consumer includes $42.2 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial – Credit Quality Indicators (1)
|
|
September 30, 2017 |
(Dollars in millions) |
U.S.
Commercial
|
|
Commercial
Real Estate
|
|
Commercial Lease
Financing
|
|
Non-U.S.
Commercial
|
|
U.S. Small Business
Commercial (2)
|
Risk ratings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass rated |
$ |
273,670 |
|
|
$ |
59,001 |
|
|
$ |
20,763 |
|
|
$ |
93,498 |
|
|
$ |
354 |
|
Reservable criticized |
9,007 |
|
|
627 |
|
|
650 |
|
|
2,398 |
|
|
50 |
|
Refreshed FICO score (3)
|
|
|
|
|
|
|
|
|
|
|
Less than 620 |
|
|
|
|
|
|
|
|
|
|
|
|
224 |
|
Greater than or equal to 620 and less than 680 |
|
|
|
|
|
|
|
|
615 |
|
Greater than or equal to 680 and less than 740 |
|
|
|
|
|
|
|
|
1,842 |
|
Greater than or equal to 740 |
|
|
|
|
|
|
|
|
3,683 |
|
Other internal credit metrics (3, 4)
|
|
|
|
|
|
|
|
|
6,835 |
|
Total commercial |
$ |
282,677 |
|
|
$ |
59,628 |
|
|
$ |
21,413 |
|
|
$ |
95,896 |
|
|
$ |
13,603 |
|
|
|
(1) |
Excludes $5.3 billion of loans accounted for under the fair value option.
|
|
|
(2) |
U.S. small business commercial includes $825 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At September 30, 2017, 99 percent of the balances where internal credit metrics are used was current or less than 30 days past due.
|
|
|
(3) |
Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio. |
|
|
(4) |
Other internal credit metrics may include delinquency status, application scores, geography or other factors. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Real Estate – Credit Quality Indicators (1)
|
|
December 31, 2016 |
(Dollars in millions) |
Core Residential
Mortgage (2)
|
|
Non-core Residential Mortgage (2)
|
|
Residential Mortgage PCI (3)
|
|
Core Home Equity (2)
|
|
Non-core Home Equity (2)
|
|
Home
Equity PCI
|
Refreshed LTV (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than or equal to 90 percent |
$ |
129,737 |
|
|
$ |
14,280 |
|
|
$ |
7,811 |
|
|
$ |
47,171 |
|
|
$ |
8,480 |
|
|
$ |
1,942 |
|
Greater than 90 percent but less than or equal to 100 percent |
3,634 |
|
|
1,446 |
|
|
1,021 |
|
|
1,006 |
|
|
1,668 |
|
|
630 |
|
Greater than 100 percent |
1,872 |
|
|
1,972 |
|
|
1,295 |
|
|
1,196 |
|
|
3,311 |
|
|
1,039 |
|
Fully-insured loans (5)
|
21,254 |
|
|
7,475 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total consumer real estate |
$ |
156,497 |
|
|
$ |
25,173 |
|
|
$ |
10,127 |
|
|
$ |
49,373 |
|
|
$ |
13,459 |
|
|
$ |
3,611 |
|
Refreshed FICO score |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 620 |
$ |
2,479 |
|
|
$ |
3,198 |
|
|
$ |
2,741 |
|
|
$ |
1,254 |
|
|
$ |
2,692 |
|
|
$ |
559 |
|
Greater than or equal to 620 and less than 680 |
5,094 |
|
|
2,807 |
|
|
2,241 |
|
|
2,853 |
|
|
3,094 |
|
|
636 |
|
Greater than or equal to 680 and less than 740 |
22,629 |
|
|
4,512 |
|
|
2,916 |
|
|
10,069 |
|
|
3,176 |
|
|
1,069 |
|
Greater than or equal to 740 |
105,041 |
|
|
7,181 |
|
|
2,229 |
|
|
35,197 |
|
|
4,497 |
|
|
1,347 |
|
Fully-insured loans (5)
|
21,254 |
|
|
7,475 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total consumer real estate |
$ |
156,497 |
|
|
$ |
25,173 |
|
|
$ |
10,127 |
|
|
$ |
49,373 |
|
|
$ |
13,459 |
|
|
$ |
3,611 |
|
|
|
(1) |
Excludes $1.1 billion of loans accounted for under the fair value option.
|
|
|
(3) |
Includes $1.6 billion of pay option loans. The Corporation no longer originates this product.
|
|
|
(4) |
Refreshed LTV percentages for PCI loans are calculated using the carrying value net of the related valuation allowance. |
|
|
(5) |
Credit quality indicators are not reported for fully-insured loans as principal repayment is insured. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit Card and Other Consumer – Credit Quality Indicators |
|
December 31, 2016 |
(Dollars in millions) |
U.S. Credit
Card
|
|
Non-U.S.
Credit Card
|
|
Direct/Indirect
Consumer
|
|
Other
Consumer (1)
|
Refreshed FICO score |
|
|
|
|
|
|
|
|
|
|
|
Less than 620 |
$ |
4,431 |
|
|
$ |
— |
|
|
$ |
1,478 |
|
|
$ |
187 |
|
Greater than or equal to 620 and less than 680 |
12,364 |
|
|
— |
|
|
2,070 |
|
|
222 |
|
Greater than or equal to 680 and less than 740 |
34,828 |
|
|
— |
|
|
12,491 |
|
|
404 |
|
Greater than or equal to 740 |
40,655 |
|
|
— |
|
|
33,420 |
|
|
1,525 |
|
Other internal credit metrics (2, 3, 4)
|
— |
|
|
9,214 |
|
|
44,630 |
|
|
161 |
|
Total credit card and other consumer |
$ |
92,278 |
|
|
$ |
9,214 |
|
|
$ |
94,089 |
|
|
$ |
2,499 |
|
|
|
(1) |
At December 31, 2016, 19 percent of the other consumer portfolio was associated with portfolios from certain consumer finance businesses that the Corporation previously exited.
|
|
|
(2) |
Other internal credit metrics may include delinquency status, geography or other factors. |
|
|
(3) |
Direct/indirect consumer includes $43.1 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk and $499 million of loans the Corporation no longer originates, primarily student loans.
|
|
|
(4) |
Non-U.S. credit card represents the U.K. credit card portfolio which was evaluated using internal credit metrics, including delinquency status. At December 31, 2016, 98 percent of this portfolio was current or less than 30 days past due, one percent was 30-89 days past due and one percent was 90 days or more past due.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial – Credit Quality Indicators (1)
|
|
December 31, 2016 |
(Dollars in millions) |
U.S.
Commercial
|
|
Commercial
Real Estate
|
|
Commercial Lease
Financing
|
|
Non-U.S.
Commercial
|
|
U.S. Small Business
Commercial (2)
|
Risk ratings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass rated |
$ |
261,214 |
|
|
$ |
56,957 |
|
|
$ |
21,565 |
|
|
$ |
85,689 |
|
|
$ |
453 |
|
Reservable criticized |
9,158 |
|
|
398 |
|
|
810 |
|
|
3,708 |
|
|
71 |
|
Refreshed FICO score (3)
|
|
|
|
|
|
|
|
|
|
Less than 620 |
|
|
|
|
|
|
|
|
200 |
|
Greater than or equal to 620 and less than 680 |
|
|
|
|
|
|
|
|
591 |
|
Greater than or equal to 680 and less than 740 |
|
|
|
|
|
|
|
|
1,741 |
|
Greater than or equal to 740 |
|
|
|
|
|
|
|
|
3,264 |
|
Other internal credit metrics (3, 4)
|
|
|
|
|
|
|
|
|
6,673 |
|
Total commercial |
$ |
270,372 |
|
|
$ |
57,355 |
|
|
$ |
22,375 |
|
|
$ |
89,397 |
|
|
$ |
12,993 |
|
|
|
(1) |
Excludes $6.0 billion of loans accounted for under the fair value option.
|
|
|
(2) |
U.S. small business commercial includes $755 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2016, 98 percent of the balances where internal credit metrics are used was current or less than 30 days past due.
|
|
|
(3) |
Refreshed FICO score and other internal credit metrics are applicable only to the U.S. small business commercial portfolio. |
|
|
(4) |
Other internal credit metrics may include delinquency status, application scores, geography or other factors. |
Impaired Loans and Troubled Debt Restructurings
A loan is considered impaired when, based on current information, it is probable that the Corporation will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. Impaired loans include nonperforming commercial loans and all consumer and commercial TDRs. Impaired loans exclude nonperforming consumer loans and nonperforming commercial leases unless they are classified as TDRs. Loans accounted for under the fair value option are also excluded. PCI loans are excluded and reported separately on page 97. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation's 2016 Annual Report on Form 10-K.
Consumer Real Estate
Impaired consumer real estate loans within the Consumer Real Estate portfolio segment consist entirely of TDRs. Excluding PCI loans, most modifications of consumer real estate loans meet the definition of TDRs when a binding offer is extended to a borrower. For more information on impaired consumer real estate loans, see Note 4 – Outstanding Loans and Leases to the Consolidated Financial Statements of the Corporation's 2016 Annual Report on Form 10-K.
Consumer real estate loans that have been discharged in Chapter 7 bankruptcy with no change in repayment terms and not reaffirmed by the borrower of $1.2 billion were included in TDRs at September 30, 2017, of which $379 million were classified as nonperforming and $442 million were loans fully-insured by the
FHA. For more information on loans discharged in Chapter 7 bankruptcy, see Nonperforming Loans and Leases in this Note.
At both September 30, 2017 and December 31, 2016, remaining commitments to lend additional funds to debtors whose terms have been modified in a consumer real estate TDR were immaterial. Consumer real estate foreclosed properties totaled $259 million and $363 million at September 30, 2017 and December 31, 2016. The carrying value of consumer real estate loans, including fully-insured and PCI loans, for which formal foreclosure proceedings were in process at September 30, 2017 was $3.7 billion. During the three and nine months ended September 30, 2017, the Corporation reclassified $198 million and $624 million of consumer real estate loans to foreclosed properties or, for properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans), to other assets. This compared to reclassifications of $326 million and $1.1 billion for the same periods in 2016. The reclassifications represent non-cash investing activities and, accordingly, are not reflected in the Consolidated Statement of Cash Flows.
The table below provides the unpaid principal balance, carrying value and related allowance at September 30, 2017 and December 31, 2016, and the average carrying value and interest income recognized for the three and nine months ended September 30, 2017 and 2016 for impaired loans in the Corporation’s Consumer Real Estate portfolio segment. Certain impaired consumer real estate loans do not have a related allowance as the current valuation of these impaired loans exceeded the carrying value, which is net of previously recorded charge-offs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impaired Loans – Consumer Real Estate |
|
|
|
|
|
|
|
September 30, 2017 |
|
December 31, 2016 |
(Dollars in millions) |
|
|
|
|
Unpaid Principal
Balance
|
|
Carrying
Value
|
|
Related
Allowance
|
|
Unpaid Principal
Balance
|
|
Carrying
Value
|
|
Related
Allowance
|
With no recorded allowance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
|
|
|
|
$ |
9,212 |
|
|
$ |
7,172 |
|
|
$ |
— |
|
|
$ |
11,151 |
|
|
$ |
8,695 |
|
|
$ |
— |
|
Home equity |
|
|
|
|
3,644 |
|
|
1,962 |
|
|
— |
|
|
3,704 |
|
|
1,953 |
|
|
— |
|
With an allowance recorded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
|
|
|
|
$ |
3,167 |
|
|
$ |
3,079 |
|
|
$ |
188 |
|
|
$ |
4,041 |
|
|
$ |
3,936 |
|
|
$ |
219 |
|
Home equity |
|
|
|
|
990 |
|
|
909 |
|
|
181 |
|
|
910 |
|
|
824 |
|
|
137 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
|
|
|
|
$ |
12,379 |
|
|
$ |
10,251 |
|
|
$ |
188 |
|
|
$ |
15,192 |
|
|
$ |
12,631 |
|
|
$ |
219 |
|
Home equity |
|
|
|
|
4,634 |
|
|
2,871 |
|
|
181 |
|
|
4,614 |
|
|
2,777 |
|
|
137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Average Carrying Value |
|
Interest Income Recognized (1)
|
|
Average Carrying Value |
|
Interest Income Recognized (1)
|
|
Average Carrying Value |
|
Interest Income Recognized (1)
|
|
Average Carrying Value |
|
Interest Income Recognized (1)
|
With no recorded allowance |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
$ |
7,498 |
|
|
$ |
77 |
|
|
$ |
9,673 |
|
|
$ |
83 |
|
|
$ |
7,964 |
|
|
$ |
237 |
|
|
$ |
10,523 |
|
|
$ |
277 |
|
Home equity |
2,000 |
|
|
27 |
|
|
1,964 |
|
|
37 |
|
|
2,001 |
|
|
82 |
|
|
1,883 |
|
|
67 |
|
With an allowance recorded |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
$ |
3,254 |
|
|
$ |
29 |
|
|
$ |
4,676 |
|
|
$ |
36 |
|
|
$ |
3,565 |
|
|
$ |
97 |
|
|
$ |
5,371 |
|
|
$ |
133 |
|
Home equity |
873 |
|
|
6 |
|
|
822 |
|
|
7 |
|
|
850 |
|
|
18 |
|
|
863 |
|
|
18 |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
$ |
10,752 |
|
|
$ |
106 |
|
|
$ |
14,349 |
|
|
$ |
119 |
|
|
$ |
11,529 |
|
|
$ |
334 |
|
|
$ |
15,894 |
|
|
$ |
410 |
|
Home equity |
2,873 |
|
|
33 |
|
|
2,786 |
|
|
44 |
|
|
2,851 |
|
|
100 |
|
|
2,746 |
|
|
85 |
|
|
|
(1) |
Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. |
The table below presents the September 30, 2017 and 2016 unpaid principal balance, carrying value, and average pre- and post-modification interest rates on consumer real estate loans that were modified in TDRs during the three and nine months ended September 30, 2017 and 2016, and net charge-offs recorded during the period in which the modification occurred. The following Consumer Real Estate portfolio segment tables include loans that were initially classified as TDRs during the period and also loans that had previously been classified as TDRs and were modified again during the period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Real Estate – TDRs Entered into During the Three Months Ended September 30, 2017 and 2016 (1)
|
|
|
|
September 30, 2017 |
|
Three Months Ended September 30, 2017 |
(Dollars in millions) |
Unpaid Principal Balance |
|
Carrying
Value
|
|
Pre-Modification Interest Rate |
|
Post-Modification Interest Rate (2)
|
|
Net
Charge-offs (3)
|
Residential mortgage |
$ |
294 |
|
|
$ |
263 |
|
|
4.42 |
% |
|
4.33 |
% |
|
$ |
2 |
|
Home equity |
212 |
|
|
172 |
|
|
4.01 |
|
|
3.96 |
|
|
15 |
|
Total |
$ |
506 |
|
|
$ |
435 |
|
|
4.25 |
|
|
4.17 |
|
|
$ |
17 |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 |
|
Three Months Ended September 30, 2016 |
Residential mortgage |
$ |
487 |
|
|
$ |
445 |
|
|
4.83 |
% |
|
4.51 |
% |
|
$ |
4 |
|
Home equity |
292 |
|
|
223 |
|
|
4.95 |
|
|
3.41 |
|
|
17 |
|
Total |
$ |
779 |
|
|
$ |
668 |
|
|
4.87 |
|
|
4.10 |
|
|
$ |
21 |
|
|
|
|
|
|
|
|
|
|
|
Consumer Real Estate – TDRs Entered into During the Nine Months Ended September 30, 2017 and 2016 (1)
|
|
|
|
September 30, 2017 |
|
Nine Months Ended September 30, 2017 |
Residential mortgage |
$ |
738 |
|
|
$ |
657 |
|
|
4.49 |
% |
|
4.25 |
% |
|
$ |
5 |
|
Home equity |
630 |
|
|
491 |
|
|
4.16 |
|
|
3.52 |
|
|
32 |
|
Total |
$ |
1,368 |
|
|
$ |
1,148 |
|
|
4.33 |
|
|
3.90 |
|
|
$ |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016 |
|
Nine Months Ended September 30, 2016 |
Residential mortgage |
$ |
1,039 |
|
|
$ |
942 |
|
|
4.77 |
% |
|
4.29 |
% |
|
$ |
9 |
|
Home equity |
718 |
|
|
552 |
|
|
4.03 |
|
|
2.87 |
|
|
43 |
|
Total |
$ |
1,757 |
|
|
$ |
1,494 |
|
|
4.47 |
|
|
3.71 |
|
|
$ |
52 |
|
|
|
(1) |
During the three and nine months ended September 30, 2017, there was no forgiveness of principal related to residential mortgage loans in connection with TDRs compared to $1 million and $12 million for the same periods in 2016.
|
|
|
(2) |
The post-modification interest rate reflects the interest rate applicable only to permanently completed modifications, which exclude loans that are in a trial modification period. |
|
|
(3) |
Net charge-offs include amounts recorded on loans modified during the period that are no longer held by the Corporation at September 30, 2017 and 2016 due to sales and other dispositions.
|
The table below presents the September 30, 2017 and 2016 carrying value for consumer real estate loans that were modified in a TDR during the three and nine months ended September 30, 2017 and 2016 by type of modification.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Real Estate – Modification Programs |
|
|
|
|
|
|
|
|
TDRs Entered into During the |
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
(Dollars in millions) |
2017 |
|
2016 |
|
2017 |
|
2016 |
Modifications under government programs |
|
|
|
|
|
|
|
Contractual interest rate reduction |
$ |
10 |
|
|
$ |
18 |
|
|
$ |
56 |
|
|
$ |
121 |
|
Principal and/or interest forbearance |
1 |
|
|
2 |
|
|
4 |
|
|
11 |
|
Other modifications (1)
|
7 |
|
|
3 |
|
|
22 |
|
|
21 |
|
Total modifications under government programs |
18 |
|
|
23 |
|
|
82 |
|
|
153 |
|
Modifications under proprietary programs |
|
|
|
|
|
|
| |