Bank of America Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Outstanding Loans and Leases

Outstanding Loans and Leases

3 Months Ended

Mar. 31, 2019

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 March 31, 2019 and December 31, 2018.




	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⁾			Loans Accounted for Under the Fair Value Option			Total Outstandings
(Dollars in millions)	March 31, 2019
Consumer real estate
Core portfolio
Residential mortgage	$	1,068		$	225		$	734		$	2,027		$	196,497					$	198,524
Home equity	163			81			348			592			38,114						38,706
Non-core portfolio
Residential mortgage	622			242			1,864			2,728			10,771						13,499
Home equity	126			58			270			454			7,081						7,535
Credit card and other consumer
U.S. credit card	546			381			1,005			1,932			91,077						93,009
Direct/Indirect consumer ⁽⁴⁾	267			76			33			376			89,172						89,548
Other consumer ⁽⁵⁾	—			—			—			—			152						152
Total consumer	2,792			1,063			4,254			8,109			432,864						440,973
Consumer loans accounted for under the fair value option ⁽⁶⁾																$	668		668
Total consumer loans and leases	2,792			1,063			4,254			8,109			432,864			668			441,641
Commercial
U.S. commercial	515			180			356			1,051			299,348						300,399
Non-U.S. commercial	11			2			—			13			101,016						101,029
Commercial real estate ⁽⁷⁾	15			—			10			25			61,190						61,215
Commercial lease financing	256			34			21			311			20,885						21,196
U.S. small business commercial	88			49			99			236			14,380						14,616
Total commercial	885			265			486			1,636			496,819						498,455
Commercial loans accounted for under the fair value option ⁽⁶⁾																5,519			5,519
Total commercial loans and leases	885			265			486			1,636			496,819			5,519			503,974
Total loans and leases ⁽⁸⁾	$	3,677		$	1,328		$	4,740		$	9,745		$	929,683		$	6,187		$	945,615
Percentage of outstandings	0.39		%	0.14		%	0.50		%	1.03		%	98.32		%	0.65		%	100.00		%


⁽¹⁾	Consumer real estate loans 30-59 days past due includes fully-insured loans of $575 million and nonperforming loans of $188 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $221 million and nonperforming loans of $134 million.


⁽²⁾	Consumer real estate includes fully-insured loans of $1.6 billion.


⁽³⁾	Consumer real estate includes $1.8 billion and direct/indirect consumer includes $51 million of nonperforming loans.


⁽⁴⁾	Total outstandings includes auto and specialty lending loans and leases of $49.9 billion, unsecured consumer lending loans of $355 million, U.S. securities-based lending loans of $35.8 billion, non-U.S. consumer loans of $2.8 billion and other consumer loans of $697 million.


⁽⁵⁾	Substantially all of other consumer is consumer overdrafts.

⁽⁶⁾

Consumer loans accounted for under the fair value option includes residential mortgage loans of $315 million and home equity loans of $353 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.8 billion and non-U.S. commercial loans of $2.7 billion. For additional information, see Note 15 – Fair Value Measurements and Note 16 – Fair Value Option.


⁽⁷⁾	Total outstandings includes U.S. commercial real estate loans of $56.8 billion and non-U.S. commercial real estate loans of $4.4 billion.


⁽⁸⁾	Total outstandings includes loans and leases pledged as collateral of $25.4 billion. The Corporation also pledged $164.4 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank (FHLB).




	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⁾			Loans Accounted for Under the Fair Value Option			Total Outstandings
(Dollars in millions)	December 31, 2018
Consumer real estate
Core portfolio
Residential mortgage	$	1,188		$	249		$	793		$	2,230		$	191,465					$	193,695
Home equity	200			85			387			672			39,338						40,010
Non-core portfolio
Residential mortgage	757			309			2,201			3,267			11,595						14,862
Home equity	139			69			339			547			7,729						8,276
Credit card and other consumer
U.S. credit card	577			418			994			1,989			96,349						98,338
Direct/Indirect consumer ⁽⁴⁾	317			90			40			447			90,719						91,166
Other consumer ⁽⁵⁾	—			—			—			—			202						202
Total consumer	3,178			1,220			4,754			9,152			437,397						446,549
Consumer loans accounted for under the fair value option ⁽⁶⁾																$	682		682
Total consumer loans and leases	3,178			1,220			4,754			9,152			437,397			682			447,231
Commercial
U.S. commercial	594			232			573			1,399			297,878						299,277
Non-U.S. commercial	1			49			—			50			98,726						98,776
Commercial real estate ⁽⁷⁾	29			16			14			59			60,786						60,845
Commercial lease financing	124			114			37			275			22,259						22,534
U.S. small business commercial	83			54			96			233			14,332						14,565
Total commercial	831			465			720			2,016			493,981						495,997
Commercial loans accounted for under the fair value option ⁽⁶⁾																3,667			3,667
Total commercial loans and leases	831			465			720			2,016			493,981			3,667			499,664
Total loans and leases ⁽⁸⁾	$	4,009		$	1,685		$	5,474		$	11,168		$	931,378		$	4,349		$	946,895
Percentage of outstandings	0.42		%	0.18		%	0.58		%	1.18		%	98.36		%	0.46		%	100.00		%


⁽¹⁾	Consumer real estate loans 30-59 days past due includes fully-insured loans of $637 million and nonperforming loans of $217 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $269 million and nonperforming loans of $146 million.


⁽²⁾	Consumer real estate includes fully-insured loans of $1.9 billion.


⁽³⁾	Consumer real estate includes $1.8 billion and direct/indirect consumer includes $53 million of nonperforming loans.


⁽⁴⁾	Total outstandings includes auto and specialty lending loans and leases of $50.1 billion, unsecured consumer lending loans of $383 million, U.S. securities-based lending loans of $37.0 billion, non-U.S. consumer loans of $2.9 billion and other consumer loans of $746 million.


⁽⁵⁾	Substantially all of other consumer is consumer overdrafts.

⁽⁶⁾

Consumer loans accounted for under the fair value option includes residential mortgage loans of $336 million and home equity loans of $346 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.5 billion and non-U.S. commercial loans of $1.1 billion. For additional information, see Note 15 – Fair Value Measurements and Note 16 – Fair Value Option.


⁽⁷⁾	Total outstandings includes U.S. commercial real estate loans of $56.6 billion and non-U.S. commercial real estate loans of $4.2 billion.


⁽⁸⁾	Total outstandings includes loans and leases pledged as collateral of $36.7 billion. The Corporation also pledged $166.1 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and FHLB.

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. All other loans are generally characterized as non-core loans and represent runoff portfolios.

The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $6.3 billion and $6.1 billion at March 31, 2019 and December 31, 2018, 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.

During the three months ended March 31, 2019 and 2018, the Corporation sold $950 million and $825 million of consumer real estate 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 March 31, 2019 and December 31, 2018, $197 million and $221 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 troubled debt restructurings (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 March 31, 2019, nonperforming loans discharged in Chapter 7 bankruptcy with no change in repayment terms were $173 million of which $94 million were current on their contractual payments, while $65 million were 90 days or more past due. Of the contractually current nonperforming loans, 60 percent were discharged in Chapter 7 bankruptcy over 12 months ago, and 52 percent were discharged 24 months or more ago.

The table below presents the Corporation’s nonperforming loans and leases including nonperforming TDRs, and loans accruing past due 90 days or more at March 31, 2019 and December 31, 2018. 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 2018 Annual Report on Form 10-K.




Credit Quality

	Nonperforming Loans and Leases				Accruing Past Due 90 Days or More
(Dollars in millions)	March 31 2019		December 31 2018		March 31 2019		December 31 2018
Consumer real estate
Core portfolio
Residential mortgage ⁽¹⁾	$	976	$	1,010	$	233	$	274
Home equity	906		955		—		—
Non-core portfolio
Residential mortgage⁽¹⁾	797		883		1,360		1,610
Home equity	845		938		—		—
Credit card and other consumer
U.S. credit card	n/a		n/a		1,005		994
Direct/Indirect consumer	54		56		31		38
Total consumer	3,578		3,842		2,629		2,916
Commercial
U.S. commercial	870		794		46		197
Non-U.S. commercial	80		80		—		—
Commercial real estate	213		156		—		4
Commercial lease financing	52		18		13		29
U.S. small business commercial	57		54		91		84
Total commercial	1,272		1,102		150		314
Total loans and leases	$	4,850	$	4,944	$	2,779	$	3,230

⁽¹⁾

Residential mortgage loans in the core and non-core portfolios accruing past due 90 days or more are fully-insured loans. At March 31, 2019 and December 31, 2018, residential mortgage includes $1.2 billion and $1.4 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 $391 million and $498 million of loans on which interest is still accruing.

n/a = not applicableCredit 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. For more information on the portfolio segments and their related credit quality indicators, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases to the

Consolidated Financial Statements of the Corporation’s 2018 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 March 31, 2019 and December 31, 2018.




Consumer Real Estate – Credit Quality Indicators ⁽¹⁾

	Core Residential Mortgage		Non-core Residential Mortgage		Core Home Equity		Non-core Home Equity		Core Residential Mortgage		Non-core Residential Mortgage		Core Home Equity		Non-core Home Equity
(Dollars in millions)	March 31, 2019								December 31, 2018
Refreshed LTV
Less than or equal to 90 percent	$	178,424	$	9,388	$	38,003	$	6,001	$	173,911	$	10,272	$	39,246	$	6,478
Greater than 90 percent but less than or equal to 100 percent	2,676		473		319		613		2,349		533		354		715
Greater than 100 percent	931		497		384		921		817		545		410		1,083
Fully-insured loans ⁽²⁾	16,493		3,141						16,618		3,512
Total consumer real estate	$	198,524	$	13,499	$	38,706	$	7,535	$	193,695	$	14,862	$	40,010	$	8,276
Refreshed FICO score
Less than 620	$	2,079	$	1,635	$	1,040	$	1,351	$	2,125	$	1,974	$	1,064	$	1,503
Greater than or equal to 620 and less than 680	4,634		1,483		1,945		1,560		4,538		1,719		2,008		1,720
Greater than or equal to 680 and less than 740	23,770		2,777		6,695		1,978		23,841		3,042		7,008		2,188
Greater than or equal to 740	151,548		4,463		29,026		2,646		146,573		4,615		29,930		2,865
Fully-insured loans ⁽²⁾	16,493		3,141						16,618		3,512
Total consumer real estate	$	198,524	$	13,499	$	38,706	$	7,535	$	193,695	$	14,862	$	40,010	$	8,276


⁽¹⁾	Excludes $668 million and $682 million of loans accounted for under the fair value option at March 31, 2019 and December 31, 2018.


⁽²⁾	Credit quality indicators are not reported for fully-insured loans as principal repayment is insured.




Credit Card and Other Consumer – Credit Quality Indicators

	U.S. Credit Card		Direct/Indirect Consumer		Other Consumer		U.S. Credit Card		Direct/Indirect Consumer		Other Consumer
(Dollars in millions)	March 31, 2019						December 31, 2018
Refreshed FICO score
Less than 620	$	4,936	$	1,630			$	5,016	$	1,719
Greater than or equal to 620 and less than 680	11,919		2,945				12,415		3,124
Greater than or equal to 680 and less than 740	34,085		8,634				35,781		8,921
Greater than or equal to 740	42,069		37,038				45,126		36,709
Other internal credit metrics ^{(1, 2)}			39,301		$	152			40,693		$	202
Total credit card and other consumer	$	93,009	$	89,548	$	152	$	98,338	$	91,166	$	202


⁽¹⁾	Other internal credit metrics may include delinquency status, geography or other factors.


⁽²⁾	Direct/indirect consumer includes $38.6 billion and $39.9 billion of securities-based lending which is overcollateralized and therefore has minimal credit risk at March 31, 2019 and December 31, 2018.




Commercial – Credit Quality Indicators ⁽¹⁾

	U.S. Commercial		Non-U.S. Commercial		Commercial Real Estate		Commercial Lease Financing		U.S. Small Business Commercial ⁽²⁾
(Dollars in millions)	March 31, 2019
Risk ratings
Pass rated	$	292,401	$	100,015	$	60,257	$	20,797	$	249
Reservable criticized	7,998		1,014		958		399		27
Refreshed FICO score ⁽³⁾
Less than 620									277
Greater than or equal to 620 and less than 680									695
Greater than or equal to 680 and less than 740									2,081
Greater than or equal to 740									4,382
Other internal credit metrics ^{(3, 4)}									6,905
Total commercial	$	300,399	$	101,029	$	61,215	$	21,196	$	14,616

	December 31, 2018
Risk ratings
Pass rated	$	291,918	$	97,916	$	59,910	$	22,168	$	389
Reservable criticized	7,359		860		935		366		29
Refreshed FICO score ⁽³⁾
Less than 620									264
Greater than or equal to 620 and less than 680									684
Greater than or equal to 680 and less than 740									2,072
Greater than or equal to 740									4,254
Other internal credit metrics ^{(3, 4)}									6,873
Total commercial	$	299,277	$	98,776	$	60,845	$	22,534	$	14,565


⁽¹⁾	Excludes $5.5 billion and $3.7 billion of loans accounted for under the fair value option at March 31, 2019 and December 31, 2018.

⁽²⁾

At March 31, 2019 and December 31, 2018, U.S. small business commercial includes $726 million and $731 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 both March 31, 2019 and December 31, 2018, 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.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. For additional information, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases to the Consolidated Financial Statements of the Corporation’s 2018 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. 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 5 – Outstanding Loans and Leases to the Consolidated Financial Statements of the Corporation’s 2018 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 $813 million were included in TDRs at March 31, 2019, of which $173 million were classified as nonperforming and $326 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 March 31, 2019 and December 31, 2018, remaining commitments to lend additional funds to debtors whose terms have been modified in a consumer real estate TDR were not significant. Consumer real estate foreclosed properties totaled $236 million and $244 million at March 31, 2019 and December 31, 2018. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at March 31, 2019 was $2.2 billion. During the three months ended March 31, 2019 and 2018, the Corporation reclassified $164 million and $168 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. The reclassifications represent non-cash investing activities and, accordingly, are not reflected in the Consolidated Statement of Cash Flows.

The following table provides the unpaid principal balance, carrying value and related allowance at March 31, 2019 and December 31, 2018, and the average carrying value and interest

income recognized for the three months ended March 31, 2019 and 2018 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

	Unpaid Principal Balance		Carrying Value		Related Allowance		Unpaid Principal Balance		Carrying Value		Related Allowance
(Dollars in millions)	March 31, 2019						December 31, 2018
With no recorded allowance
Residential mortgage	$	5,087	$	4,033	$	—	$	5,396	$	4,268	$	—
Home equity	2,892		1,582		—		2,948		1,599		—
With an allowance recorded
Residential mortgage	$	1,777	$	1,739	$	95	$	1,977	$	1,929	$	114
Home equity	750		704		114		812		760		144
Total
Residential mortgage	$	6,864	$	5,772	$	95	$	7,373	$	6,197	$	114
Home equity	3,642		2,286		114		3,760		2,359		144

					Average Carrying Value		Interest Income Recognized ⁽¹⁾		Average Carrying Value		Interest Income Recognized ⁽¹⁾
					Three Months Ended March 31
					2019				2018
With no recorded allowance
Residential mortgage					$	4,171	$	45	$	6,462	$	65
Home equity					1,593		25		1,961		27
With an allowance recorded
Residential mortgage					$	1,848	$	18	$	2,705	$	25
Home equity					737		6		892		6
Total
Residential mortgage					$	6,019	$	63	$	9,167	$	90
Home equity					2,330		31		2,853		33


⁽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 March 31, 2019 and 2018 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of consumer real estate loans that were modified in TDRs during the three months ended March 31, 2019 and 2018. 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 March 31, 2019 and 2018

	Unpaid Principal Balance		Carrying Value		Pre-Modification Interest Rate		Post-Modification Interest Rate ⁽¹⁾
(Dollars in millions)	March 31, 2019
Residential mortgage	$	135	$	112	4.19	%	4.27	%
Home equity	63		48		5.23		4.86
Total	$	198	$	160	4.52		4.46

	March 31, 2018
Residential mortgage	$	407	$	358	4.39	%	4.36	%
Home equity	207		161		4.37		4.37
Total	$	614	$	519	4.39		4.36


⁽¹⁾	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.

The table below presents the March 31, 2019 and 2018 carrying value for consumer real estate loans that were modified in a TDR during the three months ended March 31, 2019 and 2018, by type of modification.




Consumer Real Estate – Modification Programs

	TDRs Entered into During the
	Three Months Ended March 31
(Dollars in millions)	2019		2018
Modifications under government programs ⁽¹⁾	$	3	$	13
Modifications under proprietary programs ⁽¹⁾	26		200
Loans discharged in Chapter 7 bankruptcy ⁽²⁾	28		64
Trial modifications	103		242
Total modifications	$	160	$	519


⁽¹⁾	Includes other modifications such as term or payment extensions and repayment plans. During the three months ended March 31, 2018, this included $168 million of modifications that met the definition of a TDR related to the 2017 hurricanes. These modifications had been written down to their net realizable value less costs to sell or were fully insured as of March 31, 2018.


⁽²⁾	Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.

The table below presents the carrying value of consumer real estate loans that entered into payment default during the three months ended March 31, 2019 and 2018 that were modified in a TDR during the 12 months preceding payment default. A payment default for consumer real estate TDRs is recognized when a borrower has missed three monthly payments (not necessarily consecutively) since modification.




Consumer Real Estate – TDRs Entering Payment Default that were Modified During the Preceding 12 Months

	Three Months Ended March 31
(Dollars in millions)	2019		2018
Modifications under government programs	$	7	$	13
Modifications under proprietary programs	29		31
Loans discharged in Chapter 7 bankruptcy ⁽¹⁾	9		23
Trial modifications ⁽²⁾	16		45
Total modifications	$	61	$	112


⁽¹⁾	Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.

⁽²⁾

Includes trial modification offers to which the customer did not respond.Credit Card and Other Consumer

Impaired loans within the Credit Card and Other Consumer portfolio segment consist entirely of loans that have been modified in TDRs. The Corporation seeks to assist customers that are experiencing financial difficulty by modifying loans while ensuring compliance with federal and local laws and guidelines. Credit card and other consumer loan modifications generally involve reducing the interest rate on the account, placing the customer on a fixed payment plan not exceeding 60 months and canceling the customer’s available line of credit, all of which are considered TDRs. The Corporation makes loan modifications directly with borrowers for debt held only by the Corporation (internal programs).

Additionally, the Corporation makes loan modifications for borrowers working with third-party renegotiation agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The Corporation classifies other secured consumer loans that have been discharged in Chapter 7 bankruptcy as TDRs which are written down to collateral value and placed on nonaccrual status no later than the time of discharge.

The table below provides the unpaid principal balance, carrying value and related allowance at March 31, 2019 and December 31, 2018 and the average carrying value for the three months ended March 31, 2019 and 2018 for TDRs within the Credit Card and Other Consumer portfolio segment.




Impaired Loans – Credit Card and Other Consumer

	Unpaid Principal Balance		Carrying Value ⁽¹⁾		Related Allowance		Unpaid Principal Balance		Carrying Value ⁽¹⁾		Related Allowance		Average Carrying Value ⁽²⁾
	Unpaid Principal Balance		Carrying Value ⁽¹⁾		Related Allowance		Unpaid Principal Balance		Carrying Value ⁽¹⁾		Related Allowance		Three Months Ended March 31
(Dollars in millions)	March 31, 2019						December 31, 2018						2019		2018
With no recorded allowance
Direct/Indirect consumer	$	74	$	34	$	—	$	72	$	33	$	—	$	34	$	27
With an allowance recorded
U.S. credit card	$	554	$	566	$	155	$	522	$	533	$	154	$	547	$	465
Direct/Indirect consumer	—		—		—		—		—		—		—		1
Total
U.S. credit card	$	554	$	566	$	155	$	522	$	533	$	154	$	547	$	465
Direct/Indirect consumer	74		34		—		72		33		—		34		28


⁽¹⁾	Includes accrued interest and fees.


⁽²⁾	The related interest income recognized, which included 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 was considered collectible, was not significant for the three months ended March 31, 2019 and 2018.

The table below provides information on the Corporation’s primary modification programs for the Credit Card and Other Consumer TDR portfolio at March 31, 2019 and December 31, 2018.




Credit Card and Other Consumer – TDRs by Program Type

	U.S. Credit Card						Direct/Indirect Consumer						Total TDRs by Program Type
(Dollars in millions)	March 31 2019			December 31 2018			March 31 2019			December 31 2018			March 31 2019			December 31 2018
Internal programs	$	285		$	259		$	—		$	—		$	285		$	259
External programs	281			273			—			—			281			273
Other	—			1			34			33			34			34
Total	$	566		$	533		$	34		$	33		$	600		$	566
Percent of balances current or less than 30 days past due	85		%	85		%	85		%	81		%	85		%	85		%

The table below provides information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the March 31, 2019 and 2018 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during the three months ended March 31, 2019 and 2018.




Credit Card and Other Consumer – TDRs Entered into During the Three Months Ended March 31, 2019 and 2018

	Unpaid Principal Balance		Carrying Value ⁽¹⁾		Pre-Modification Interest Rate		Post-Modification Interest Rate
(Dollars in millions)	March 31, 2019
U.S. credit card	$	98	$	105	19.86	%	5.21	%
Direct/Indirect consumer	18		10		4.96		4.96
Total	$	116	$	115	18.56		5.19

	March 31, 2018
U.S. credit card	$	74	$	80	18.83	%	5.20	%
Direct/Indirect consumer	17		10		4.98		4.67
Total	$	91	$	90	17.24		5.14


⁽¹⁾	Includes accrued interest and fees.

Credit card and other consumer loans are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows in the calculation of the allowance for loan and lease losses for impaired credit card and other consumer loans. Based on historical experience, the Corporation estimates that 14 percent of new U.S. credit card TDRs and 15 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification.Commercial Loans

Impaired commercial loans include nonperforming loans and leases and TDRs (both performing and nonperforming). For more information on impaired commercial loans, see Note 5 – Outstanding Loans and Leases to the Consolidated Financial

Statements of the Corporation’s 2018 Annual Report on Form 10-K.

At March 31, 2019 and December 31, 2018, remaining commitments to lend additional funds to debtors whose terms have been modified in a commercial loan TDR were $347 million and $297 million.

The table below provides information on impaired loans in the Commercial loan portfolio segment including the unpaid principal balance, carrying value and related allowance at March 31, 2019 and December 31, 2018, and the average carrying value for the three months ended March 31, 2019 and 2018. Certain impaired commercial loans do not have a related allowance because the valuation of these impaired loans exceeded the carrying value, which is net of previously recorded charge-offs.




Impaired Loans – Commercial

	Unpaid Principal Balance		Carrying Value		Related Allowance		Unpaid Principal Balance		Carrying Value		Related Allowance		Average Carrying Value ⁽¹⁾
	Unpaid Principal Balance		Carrying Value		Related Allowance		Unpaid Principal Balance		Carrying Value		Related Allowance		Three Months Ended March 31
(Dollars in millions)	March 31, 2019						December 31, 2018						2019		2018
With no recorded allowance
U.S. commercial	$	761	$	750	$	—	$	638	$	616	$	—	$	683	$	672
Non-U.S. commercial	93		93		—		93		93		—		93		62
Commercial real estate	226		226		—		—		—		—		113		69
Commercial lease financing	—		—		—		—		—		—		—		6
With an allowance recorded
U.S. commercial	$	1,466	$	1,245	$	122	$	1,437	$	1,270	$	121	$	1,258	$	1,105
Non-U.S. commercial	254		240		37		155		149		30		195		445
Commercial real estate	156		79		6		247		162		16		121		36
Commercial lease financing	90		87		13		71		71		—		79		11
U.S. small business commercial ⁽²⁾	85		76		29		83		72		29		74		75
Total
U.S. commercial	$	2,227	$	1,995	$	122	$	2,075	$	1,886	$	121	$	1,941	$	1,777
Non-U.S. commercial	347		333		37		248		242		30		288		507
Commercial real estate	382		305		6		247		162		16		234		105
Commercial lease financing	90		87		13		71		71		—		79		17
U.S. small business commercial ⁽²⁾	85		76		29		83		72		29		74		75


⁽¹⁾	The related interest income recognized, which included 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 was considered collectible, was not significant for the three months ended March 31, 2019 and 2018.


⁽²⁾	Includes U.S. small business commercial renegotiated TDR loans and related allowance.

The table below presents the March 31, 2019 and 2018 unpaid principal balance and carrying value of commercial loans that were modified as TDRs during the three months ended March 31, 2019 and 2018. The table below includes 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.




Commercial – TDRs Entered into During the Three Months Ended March 31, 2019 and 2018

	Unpaid Principal Balance		Carrying Value
(Dollars in millions)	March 31, 2019
U.S. commercial	$	480	$	459
Non-U.S. commercial	103		103
Commercial real estate	198		198
Commercial lease financing	3		3
U.S. small business commercial ⁽¹⁾	4		4
Total	$	788	$	767

	March 31, 2018
U.S. commercial	$	618	$	550
Non-U.S. commercial	331		331
Commercial lease financing	2		1
U.S. small business commercial ⁽¹⁾	3		3
Total	$	954	$	885


⁽¹⁾	U.S. small business commercial TDRs are comprised of renegotiated small business card loans.

A commercial TDR is generally deemed to be in payment default when the loan is 90 days or more past due, including delinquencies that were not resolved as part of the modification. U.S. small business commercial TDRs are deemed to be in payment default during the quarter in which a borrower misses the second of two consecutive payments. Payment defaults are one of the factors considered when projecting future cash flows, along with observable market prices or fair value of collateral when measuring the allowance for loan and lease losses. TDRs that were in payment default had a carrying value of $116 million and $139 million for U.S. commercial, $3 million and $18 million for commercial real estate and $3 million and $4 million for commercial lease financing at March 31, 2019 and 2018.

Loans Held-for-sale

The Corporation had LHFS of $6.3 billion and $10.4 billion at March 31, 2019 and December 31, 2018. For the three months ended March 31, 2019 and 2018, cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $7.9 billion and $9.8 billion, and cash used for originations and purchases of LHFS totaled $3.6 billion and $5.7 billion.