Quarterly report pursuant to Section 13 or 15(d)

Outstanding Loans and Leases (Tables)

v3.8.0.1
Outstanding Loans and Leases (Tables)
9 Months Ended
Sep. 30, 2017
Receivables [Abstract]  
Schedule of Loans and Leases Outstanding
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.
Schedule of Financing Receivables, Non Accrual Status
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
Financing Receivable Credit Quality Indicators
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.
(2) 
Excludes PCI loans.
(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.
(2) 
Excludes PCI loans.
(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.
Financing Receivable, Modifications [Line Items]  
Accretable Yield Activity
The table below shows activity for the accretable yield on PCI loans, which include the Countrywide Financial Corporation (Countrywide) portfolio and loans repurchased in connection with the 2013 settlement with FNMA. The amount of accretable yield is affected by changes in credit outlooks, including metrics such as default rates and loss severities, prepayment speeds, which can change the amount and period of time over which interest payments are expected to be received, and the interest rates on variable rate loans. The reclassifications from nonaccretable difference in the three and nine months ended September 30, 2017 were primarily due to an increase in the expected principal and interest cash flows due to lower default estimates.
 
 

 
 
Rollforward of Accretable Yield
 
 
 
 
 
 
(Dollars in millions)
Three Months Ended September 30, 2017
 
Nine Months Ended September 30, 2017
Accretable yield, beginning of period
$
3,288

 
$
3,805

Accretion
(147
)
 
(465
)
Disposals/transfers
(282
)
 
(521
)
Reclassifications from nonaccretable difference
80

 
120

Accretable yield, September 30, 2017
$
2,939

 
$
2,939

Consumer real estate  
Financing Receivable, Impaired [Line Items]  
Impaired Financing Receivables
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.
Financing Receivable, Modifications [Line Items]  
Troubled Debt Restructurings on Financing Receivables
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
 
 
 
 
 
 
 
Contractual interest rate reduction
15

 
20

 
178

 
143

Capitalization of past due amounts
12

 
4

 
47

 
27

Principal and/or interest forbearance
2

 
2

 
28

 
47

Other modifications (1)
1

 
45

 
45

 
72

Total modifications under proprietary programs
30

 
71

 
298

 
289

Trial modifications
329

 
490

 
605

 
853

Loans discharged in Chapter 7 bankruptcy (2)
58

 
84

 
163

 
199

Total modifications
$
435

 
$
668

 
$
1,148

 
$
1,494

(1) 
Includes other modifications such as term or payment extensions and repayment plans.
(2) 
Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.
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