Annual report pursuant to Section 13 and 15(d)

Outstanding Loans and Leases and Allowance for Credit Losses (Tables)

v3.20.4
Outstanding Loans and Leases and Allowance for Credit Losses (Tables)
12 Months Ended
Dec. 31, 2020
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 December 31, 2020 and 2019.
30-59 Days Past Due (1)
60-89 Days Past Due (1)
90 Days or
More
Past Due (1)
Total Past
Due 30 Days
or More
Total Current or Less Than 30 Days Past Due (1)
Loans Accounted for Under the Fair Value Option Total
Outstandings
(Dollars in millions) December 31, 2020
Consumer real estate            
Core portfolio
Residential mortgage
$ 1,157  $ 175  $ 786  $ 2,118  $ 213,155  $ 215,273 
Home equity 126  61  269  456  29,872  30,328 
Non-core portfolio
Residential mortgage 273  122  913  1,308  6,974  8,282 
Home equity 28  17  76  121  3,862  3,983 
Credit card and other consumer
Credit card 445  341  903  1,689  77,019  78,708 
Direct/Indirect consumer (2)
209  67  37  313  91,050  91,363 
Other consumer         124  124 
Total consumer 2,238  783  2,984  6,005  422,056  428,061 
Consumer loans accounted for under the fair value option (3)
          $ 735  735 
Total consumer loans and leases 2,238  783  2,984  6,005  422,056  735  428,796 
Commercial
U.S. commercial 561  214  512  1,287  287,441  288,728 
Non-U.S. commercial 61  44  11  116  90,344  90,460 
Commercial real estate (4)
128  113  226  467  59,897  60,364 
Commercial lease financing 86  20  57  163  16,935  17,098 
U.S. small business commercial (5)
84  56  123  263  36,206  36,469 
Total commercial 920  447  929  2,296  490,823  493,119 
Commercial loans accounted for under the fair value option (3)
          5,946  5,946 
Total commercial loans and leases 920  447  929  2,296  490,823  5,946  499,065 
Total loans and leases (6)
$ 3,158  $ 1,230  $ 3,913  $ 8,301  $ 912,879  $ 6,681  $ 927,861 
Percentage of outstandings 0.34  % 0.13  % 0.42  % 0.89  % 98.39  % 0.72  % 100.00  %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $225 million and nonperforming loans of $126 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $103 million and nonperforming loans of $95 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $762 million. Consumer real estate loans current or less than 30 days past due includes $1.2 billion and direct/indirect consumer includes $66 million of nonperforming loans. For information on the Corporation's interest accrual policies and delinquency status for loan modifications related to the pandemic, see Note 1 – Summary of Significant Accounting Principles.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $46.4 billion, U.S. securities-based lending loans of $41.1 billion and non-U.S. consumer loans of $3.0 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $298 million and home equity loans of $437 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.9 billion and non-U.S. commercial loans of $3.0 billion. For more information, see Note 20 – Fair Value Measurements and Note 21 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $57.2 billion and non-U.S. commercial real estate loans of $3.2 billion.
(5)Includes PPP loans.
(6)Total outstandings includes loans and leases pledged as collateral of $15.5 billion. The Corporation also pledged $153.1 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
30-59 Days
Past Due
(1)
60-89 Days Past Due (1)
90 Days or
More
Past Due
(1)
Total Past
Due 30 Days
or More
Total
Current or
Less Than
30 Days
Past Due (1)
Loans
Accounted
for Under
the Fair
Value Option
Total Outstandings
(Dollars in millions) December 31, 2019
Consumer real estate            
Core portfolio
Residential mortgage $ 1,378  $ 261  $ 565  $ 2,204  $ 223,566    $ 225,770 
Home equity 135  70  198  403  34,823    35,226 
Non-core portfolio              
Residential mortgage 458  209  1,263  1,930  8,469    10,399 
Home equity 34  16  72  122  4,860    4,982 
Credit card and other consumer              
Credit card 564  429  1,042  2,035  95,573    97,608 
Direct/Indirect consumer (2)
297  85  35  417  90,581    90,998 
Other consumer  —  —  —  —  192    192 
Total consumer 2,866  1,070  3,175  7,111  458,064  465,175 
Consumer loans accounted for under the fair value option (3)
$ 594  594 
Total consumer loans and leases 2,866  1,070  3,175  7,111  458,064  594  465,769 
Commercial              
U.S. commercial 788  279  371  1,438  305,610    307,048 
Non-U.S. commercial 35  23  66  104,900    104,966 
Commercial real estate (4)
144  19  119  282  62,407    62,689 
Commercial lease financing 100  56  39  195  19,685    19,880 
U.S. small business commercial 119  56  107  282  15,051    15,333 
Total commercial 1,186  433  644  2,263  507,653    509,916 
Commercial loans accounted for under the fair value option (3)
7,741  7,741 
Total commercial loans and leases
1,186  433  644  2,263  507,653  7,741  517,657 
Total loans and leases (5)
$ 4,052  $ 1,503  $ 3,819  $ 9,374  $ 965,717  $ 8,335  $ 983,426 
Percentage of outstandings 0.41  % 0.15  % 0.39  % 0.95  % 98.20  % 0.85  % 100.00  %
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $517 million and nonperforming loans of $139 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $206 million and nonperforming loans of $114 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $1.1 billion. Consumer real estate loans current or less than 30 days past due includes $856 million and direct/indirect consumer includes $45 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $50.4 billion, U.S. securities-based lending loans of $36.7 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $257 million and home equity loans of $337 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $4.7 billion and non-U.S. commercial loans of $3.1 billion. For more information, see Note 20 – Fair Value Measurements and Note 21 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $59.0 billion and non-U.S. commercial real estate loans of $3.7 billion.
(5)Total outstandings includes loans and leases pledged as collateral of $25.9 billion. The Corporation also pledged $168.2 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
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 December 31, 2020 and 2019. Nonperforming 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 information on the Corporation's interest accrual policies, delinquency status for loan modifications related to the pandemic and the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles.
Credit Quality
Nonperforming Loans
and Leases
Accruing Past Due
90 Days or More (1)
December 31
(Dollars in millions) 2020 2019 2020 2019
Residential mortgage (2)
$ 2,005  $ 1,470  $ 762  $ 1,088 
With no related allowance (3)
1,378  n/a   — 
Home equity (2)
649  536    — 
With no related allowance (3)
347  n/a   — 
Credit Card n/a n/a 903  1,042 
Direct/indirect consumer 71  47  33  33 
Total consumer 2,725  2,053  1,698  2,163 
U.S. commercial 1,243  1,094  228  106 
Non-U.S. commercial 418  43  10 
Commercial real estate 404  280  6  19 
Commercial lease financing 87  32  25  20 
U.S. small business commercial 75  50  115  97 
Total commercial 2,227  1,499  384  250 
Total nonperforming loans $ 4,952  $ 3,552  $ 2,082  $ 2,413 
Percentage of outstanding loans and leases
0.54  % 0.36  % 0.23  % 0.25  %
(1)For information on the Corporation's interest accrual policies and delinquency status for loan modifications related to the pandemic, see Note 1 – Summary of Significant Accounting Principles.
(2)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At December 31, 2020 and 2019 residential mortgage includes $537 million and $740 million of loans on which interest had been curtailed by the FHA, and therefore were no longer accruing interest, although principal was still insured, and $225 million and $348 million of loans on which interest was still accruing.
(3)Primarily relates to loans for which the estimated fair value of the underlying collateral less any costs to sell is greater than the amortized cost of the loans as of the reporting date.
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 and year of origination for term loan balances at December 31, 2020, including revolving loans that converted to term loans without an additional credit decision after origination or through a TDR.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions) Total as of December 31, 2020 2020 2019 2018 2017 2016 Prior
Total Residential Mortgage
Refreshed LTV
     
Less than or equal to 90 percent $ 207,389  $ 68,907  $ 43,771  $ 14,658  $ 21,589  $ 22,967  $ 35,497 
Greater than 90 percent but less than or equal to 100 percent
3,138  1,970  684  128  70  96  190 
Greater than 100 percent
1,210  702  174  47  39  37  211 
Fully-insured loans
11,818  3,826  2,014  370  342  1,970  3,296 
Total Residential Mortgage $ 223,555  $ 75,405  $ 46,643  $ 15,203  $ 22,040  $ 25,070  $ 39,194 
Total Residential Mortgage
Refreshed FICO score
Less than 620 $ 2,717  $ 823  $ 177  $ 139  $ 170  $ 150  $ 1,258 
Greater than or equal to 620 and less than 680
5,462  1,804  666  468  385  368  1,771 
Greater than or equal to 680 and less than 740
25,349  8,533  4,679  1,972  2,427  2,307  5,431 
Greater than or equal to 740
178,209  60,419  39,107  12,254  18,716  20,275  27,438 
Fully-insured loans
11,818  3,826  2,014  370  342  1,970  3,296 
Total Residential Mortgage $ 223,555  $ 75,405  $ 46,643  $ 15,203  $ 22,040  $ 25,070  $ 39,194 
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving Loans Revolving Loans Converted to Term Loans
(Dollars in millions) December 31, 2020
Total Home Equity
Refreshed LTV
     
Less than or equal to 90 percent $ 33,447  $ 1,919  $ 22,639  $ 8,889 
Greater than 90 percent but less than or equal to 100 percent
351  126  94  131 
Greater than 100 percent
513  172  118  223 
Total Home Equity $ 34,311  $ 2,217  $ 22,851  $ 9,243 
Total Home Equity
Refreshed FICO score
Less than 620 $ 1,082  $ 250  $ 244  $ 588 
Greater than or equal to 620 and less than 680
1,798  263  568  967 
Greater than or equal to 680 and less than 740
5,762  556  2,905  2,301 
Greater than or equal to 740
25,669  1,148  19,134  5,387 
Total Home Equity $ 34,311  $ 2,217  $ 22,851  $ 9,243 
(1)Includes reverse mortgages of $1.3 billion and home equity loans of $885 million which are no longer originated.
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination Year Credit Card
(Dollars in millions) Total Direct/Indirect as of December 31, 2020 Revolving Loans 2020 2019 2018 2017 2016 Prior Total Credit Card as of December 31, 2020 Revolving Loans
Revolving Loans Converted to Term Loans (3)
Refreshed FICO score    
Less than 620 $ 959  $ 19  $ 111  $ 200  $ 175  $ 243  $ 148  $ 63  $ 4,018  $ 3,832  $ 186 
Greater than or equal to 620 and less than 680
2,143  20  653  559  329  301  176  105  9,419  9,201  218 
Greater than or equal to 680 and less than 740
7,431  80  2,848  2,015  1,033  739  400  316  27,585  27,392  193 
Greater than or equal to 740 36,064  120  12,540  10,588  5,869  3,495  1,781  1,671  37,686  37,642  44 
Other internal credit
   metrics (1, 2)
44,766  44,098  74  115  84  67  52  276    —  — 
Total credit card and other
consumer
$ 91,363  $ 44,337  $ 16,226  $ 13,477  $ 7,490  $ 4,845  $ 2,557  $ 2,431  $ 78,708  $ 78,067  $ 641 
(1)Other internal credit metrics may include delinquency status, geography or other factors.
(2)Direct/indirect consumer includes $44.1 billion of securities-based lending which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at December 31, 2020.
(3)Represents TDRs that were modified into term loans.
Commercial – Credit Quality Indicators By Vintage (1, 2)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions) Total as of December 31, 2020 2020 2019 2018 2017 2016 Prior Revolving Loans
U.S. Commercial
Risk ratings        
Pass rated $ 268,812  $ 33,456  $ 33,305  $ 17,363  $ 14,102  $ 7,420  $ 21,784  $ 141,382 
Reservable criticized 19,916  2,524  2,542  2,689  854  698  1,402  9,207 
Total U.S. Commercial
$ 288,728  $ 35,980  $ 35,847  $ 20,052  $ 14,956  $ 8,118  $ 23,186  $ 150,589 
Non-U.S. Commercial
Risk ratings
Pass rated $ 85,914  $ 16,301  $ 11,396  $ 7,451  $ 5,037  $ 1,674  $ 2,194  $ 41,861 
Reservable criticized 4,546  914  572  492  436  138  259  1,735 
Total Non-U.S. Commercial
$ 90,460  $ 17,215  $ 11,968  $ 7,943  $ 5,473  $ 1,812  $ 2,453  $ 43,596 
Commercial Real Estate
Risk ratings
Pass rated $ 50,260  $ 8,429  $ 14,126  $ 8,228  $ 4,599  $ 3,299  $ 6,542  $ 5,037 
Reservable criticized 10,104  933  2,558  2,115  1,582  606  1,436  874 
Total Commercial Real Estate
$ 60,364  $ 9,362  $ 16,684  $ 10,343  $ 6,181  $ 3,905  $ 7,978  $ 5,911 
Commercial Lease Financing
Risk ratings
Pass rated $ 16,384  $ 3,083  $ 3,242  $ 2,956  $ 2,532  $ 1,703  $ 2,868  $ — 
Reservable criticized 714  117  117  132  81  88  179  — 
Total Commercial Lease Financing
$ 17,098  $ 3,200  $ 3,359  $ 3,088  $ 2,613  $ 1,791  $ 3,047  $ — 
U.S. Small Business Commercial (3)
Risk ratings
Pass rated $ 28,786  $ 24,539  $ 1,121  $ 837  $ 735  $ 527  $ 855  $ 172 
Reservable criticized 1,148  76  239  210  175  113  322  13 
Total U.S. Small Business Commercial
$ 29,934  $ 24,615  $ 1,360  $ 1,047  $ 910  $ 640  $ 1,177  $ 185 
 Total (1, 2)
$ 486,584  $ 90,372  $ 69,218  $ 42,473  $ 30,133  $ 16,266  $ 37,841  $ 200,281 
(1) Excludes $5.9 billion of loans accounted for under the fair value option at December 31, 2020.
(2)     Includes $58 million of loans that converted from revolving to term loans.
(3)     Excludes U.S. Small Business Card loans of $6.5 billion. Refreshed FICO scores for this portfolio are $265 million for less than 620; $582 million for greater than or equal to 620 and less than 680; $1.7 billion for greater than or equal to 680 and less than 740; and $3.9 billion greater than or equal to 740.
Troubled Debt Restructurings on Financing Receivables The table below presents the December 31, 2020, 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 2020, 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 2020, 2019 and 2018 (1)
Unpaid Principal Balance Carrying
Value
Pre-Modification Interest Rate
Post-Modification Interest Rate (2)
(Dollars in millions) December 31, 2020
Residential mortgage $ 732  $ 646  3.66  % 3.59  %
Home equity 87  69  3.67  3.61 
Total $ 819  $ 715  3.66  3.59 
December 31, 2019
Residential mortgage $ 464  $ 377  4.19  % 4.13  %
Home equity 141  101  5.04  4.31 
Total $ 605  $ 478  4.39  4.17 
December 31, 2018
Residential mortgage $ 774  $ 641  4.33  % 4.21  %
Home equity 489  358  4.46  3.74 
Total $ 1,263  $ 999  4.38  4.03 
(1)For more information on the Corporation's loan modification programs offered in response to the pandemic, most of which are not TDRs, see Note 1 – Summary of Significant Accounting Principles.
(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.
The table below presents the December 31, 2020, 2019 and 2018 carrying value for consumer real estate loans that were modified in a TDR during 2020, 2019 and 2018, by type of modification.
Consumer Real Estate – Modification Programs (1)
TDRs Entered into During
(Dollars in millions) 2020 2019 2018
Modifications under government programs $ 13  $ 35  $ 61 
Modifications under proprietary programs 570  174  523 
Loans discharged in Chapter 7 bankruptcy (2)
53  68  130 
Trial modifications 79  201  285 
Total modifications $ 715  $ 478  $ 999 
(1)For more information on the Corporation's loan modification programs offered in response to the pandemic, most of which are not TDRs, see Note 1 – Summary of Significant Accounting Principles.
(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 2020, 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 (1)
(Dollars in millions) 2020 2019 2018
Modifications under government programs $ 16  $ 26  $ 39 
Modifications under proprietary programs 51  88  158 
Loans discharged in Chapter 7 bankruptcy (2)
19  30  64 
Trial modifications (3)
54  57  107 
Total modifications $ 140  $ 201  $ 368 
(1)For more information on the Corporation's loan modification programs offered in response to the pandemic, most of which are not TDRs, see Note 1 – Summary of Significant Accounting Principles.
(2)Includes loans discharged in Chapter 7 bankruptcy with no change in repayment terms that are classified as TDRs.
(3)Includes trial modification offers to which the customer did not respond.
The table below provides information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the December 31, 2020, 2019 and 2018 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during 2020, 2019 and 2018.
Credit Card and Other Consumer – TDRs Entered into During 2020, 2019 and 2018 (1)
  Unpaid Principal Balance
Carrying
Value
(2)
Pre-Modification Interest Rate Post-Modification Interest Rate
(Dollars in millions) December 31, 2020
Credit card $ 269  $ 277  18.16  % 5.63  %
Direct/Indirect consumer 52  37  5.83  5.83 
Total $ 321  $ 314  16.70  5.65 
December 31, 2019
Credit card $ 340  $ 355  19.18  % 5.35  %
Direct/Indirect consumer 40  21  5.23  5.21 
Total $ 380  $ 376  18.42  5.34 
December 31, 2018
Credit card $ 278  $ 292  19.49  % 5.24  %
Direct/Indirect consumer 42  23  5.10  4.95 
Total $ 320  $ 315  18.45  5.22 
(1)For more information on the Corporation's loan modification programs offered in response to the pandemic, most of which are not TDRs, see Note 1 – Summary of Significant Accounting Principles.
(2)Includes accrued interest and fees.
The table below presents the December 31, 2020, 2019 and 2018 carrying value for Credit Card and Other Consumer loans that were modified in a TDR during 2020, 2019 and 2018, by program type.
Credit Card and Other Consumer – TDRs by Program Type at December 31 (1)
(Dollars in millions)
2020 2019 2018
Internal programs $ 225  $ 247  $ 199 
External programs
73  108  93 
Other
16  21  23 
Total $ 314  $ 376  $ 315 
(1)Includes accrued interest and fees. For more information on the Corporation's loan modification programs offered in response to the pandemic, most of which are not TDRs, see Note 1 – Summary of Significant Accounting Principles.
Changes in the Allowance for Credit Losses
The changes in the allowance for credit losses, including net charge-offs and provision for loan and lease losses, are detailed in the table below.
Consumer
Real Estate
Credit Card and
Other Consumer
Commercial Total
(Dollars in millions) 2020
Allowance for loan and lease losses, January 1 $ 440  $ 7,430  $ 4,488  $ 12,358 
Loans and leases charged off (98) (3,646) (1,675) (5,419)
Recoveries of loans and leases previously charged off 201  891  206  1,298 
Net charge-offs 103  (2,755) (1,469) (4,121)
Provision for loan and lease losses 307  4,538  5,720  10,565 
Other (1)
8    (8)  
Allowance for loan and lease losses, December 31
858  9,213  8,731  18,802 
Reserve for unfunded lending commitments, January 1 119    1,004  1,123 
Provision for unfunded lending commitments 18    737  755 
Reserve for unfunded lending commitments, December 31
137    1,741  1,878 
Allowance for credit losses, December 31
$ 995  $ 9,213  $ 10,472  $ 20,680 
2019
Allowance for loan and lease losses, January 1 $ 928  $ 3,874  $ 4,799  $ 9,601 
Loans and leases charged off (522) (4,302) (822) (5,646)
Recoveries of loans and leases previously charged off 927  911  160  1,998 
Net charge-offs 405  (3,391) (662) (3,648)
Provision for loan and lease losses (680) 3,512  742  3,574 
Other (1)
(107) (5) (111)
Allowance for loan and lease losses, December 31
546  3,996  4,874  9,416 
Reserve for unfunded lending commitments, January 1 —  —  797  797 
Provision for unfunded lending commitments —  —  16  16 
Reserve for unfunded lending commitments, December 31
—  —  813  813 
Allowance for credit losses, December 31
$ 546  $ 3,996  $ 5,687  $ 10,229 
2018
Allowance for loan and lease losses, January 1 $ 1,720  $ 3,663  $ 5,010  $ 10,393 
Loans and leases charged off (690) (4,037) (675) (5,402)
Recoveries of loans and leases previously charged off 664  823  152  1,639 
Net charge-offs (26) (3,214) (523) (3,763)
Provision for loan and lease losses (492) 3,441  313  3,262 
Other (1)
(274) (16) (1) (291)
Allowance for loan and lease losses, December 31 928  3,874  4,799  9,601 
Reserve for unfunded lending commitments, January 1 —  —  777  777 
Provision for unfunded lending commitments —  —  20  20 
Reserve for unfunded lending commitments, December 31 —  —  797  797 
Allowance for credit losses, December 31 $ 928  $ 3,874  $ 5,596  $ 10,398 
(1)Primarily represents write-offs of purchased credit-impaired loans in 2019, and the net impact of portfolio sales, transfers to held-for-sale and transfers to foreclosed properties.