Outstanding Loans and Leases and Allowance for Credit Losses

v3.21.2

Outstanding Loans and Leases and Allowance for Credit Losses	9 Months Ended
	Sep. 30, 2021
Receivables [Abstract]
Outstanding Loans and Leases and Allowance for Credit Losses	Outstanding Loans and Leases and Allowance for Credit Losses 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, 2021 and December 31, 2020. 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) September 30, 2021 Consumer real estate             Residential mortgage $ 1,010  $ 276  $ 1,504  $ 2,790  $ 214,150  $ 216,940  Home equity 132  69  366  567  28,433  29,000  Credit card and other consumer Credit card 286  198  450  934  75,935  76,869  Direct/Indirect consumer (2) 119  31  16  166  99,679  99,845  Other consumer —  —  —  —  202  202  Total consumer 1,547  574  2,336  4,457  418,399  422,856  Consumer loans accounted for under the fair value option (3)           $ 616  616  Total consumer loans and leases 1,547  574  2,336  4,457  418,399  616  423,472  Commercial U.S. commercial 640  234  238  1,112  294,815  295,927  Non-U.S. commercial 77  48  130  255  102,595  102,850  Commercial real estate (4) 138  —  208  346  60,377  60,723  Commercial lease financing 32  33  15  80  14,964  15,044  U.S. small business commercial (5) 70  43  66  179  22,591  22,770  Total commercial 957  358  657  1,972  495,342  497,314  Commercial loans accounted for under the fair value option (3)           6,950  6,950  Total commercial loans and leases 957  358  657  1,972  495,342  6,950  504,264  Total loans and leases (6) $ 2,504  $ 932  $ 2,993  $ 6,429  $ 913,741  $ 7,566  $ 927,736  Percentage of outstandings 0.27  % 0.10  % 0.32  % 0.69  % 98.49  % 0.82  % 100.00  % (1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $185 million and nonperforming loans of $116 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $97 million and nonperforming loans of $102 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $648 million. Consumer real estate loans current or less than 30 days past due includes $1.5 billion and direct/indirect consumer includes $29 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 to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. (2)Total outstandings primarily includes auto and specialty lending loans and leases of $47.2 billion, U.S. securities-based lending loans of $48.7 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 $241 million and home equity loans of $375 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $4.5 billion and non-U.S. commercial loans of $2.4 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option. (4)Total outstandings includes U.S. commercial real estate loans of $56.6 billion and non-U.S. commercial real estate loans of $4.1 billion. (5)Includes Paycheck Protection Program loans. (6)Total outstandings includes loans and leases pledged as collateral of $12.8 billion. The Corporation also pledged $150.2 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, 2020 Consumer real estate             Residential mortgage $ 1,430  $ 297  $ 1,699  $ 3,426  $ 220,129  $ 223,555  Home equity 154  78  345  577  33,734  34,311  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 to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. (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 14 – Fair Value Measurements and Note 15 – 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 Paycheck Protection Program 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. The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $10.3 billion and $9.0 billion at September 30, 2021 and December 31, 2020, 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 Commercial nonperforming loans decreased to $1.7 billion at September 30, 2021 from $2.2 billion at December 31, 2020. Consumer nonperforming loans increased to $3.0 billion at September 30, 2021 from $2.7 billion at December 31, 2020 driven by consumer real estate deferral activity. The following table presents the Corporation’s nonperforming loans and leases including nonperforming troubled debt restructurings (TDRs), and loans accruing past due 90 days or more at September 30, 2021 and December 31, 2020. 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 2020 Annual Report on Form 10-K. Credit Quality Nonperforming Loans and Leases Accruing Past Due 90 Days or More (1) (Dollars in millions) September 30 2021 December 31 2020 September 30 2021 December 31 2020 Residential mortgage (2) $ 2,296  $ 2,005  $ 648  $ 762  With no related allowance (3) 1,984  1,378  —  —  Home equity (2) 676  649  —  —  With no related allowance (3) 419  347  —  —  Credit Card n/a n/a 450  903  Direct/indirect consumer 45  71  8  33  Total consumer 3,017  2,725  1,106  1,698  U.S. commercial 909  1,243  84  228  Non-U.S. commercial 272  418  60  10  Commercial real estate 414  404  5  6  Commercial lease financing 70  87  11  25  U.S. small business commercial 32  75  64  115  Total commercial 1,697  2,227  224  384  Total nonperforming loans $ 4,714  $ 4,952  $ 1,330  $ 2,082  Percentage of outstanding loans and leases 0.51 % 0.54  % 0.14 % 0.23  % (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 to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. (2)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2021 and December 31, 2020 residential mortgage includes $466 million and $537 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $182 million and $225 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 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. For more information on the portfolio segments, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. Within the Consumer Real Estate portfolio segment, the primary credit quality indicators are refreshed loan-to-value (LTV) and refreshed Fair Isaac Corporation (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. Home equity loans are evaluated using combined loan-to-value (CLTV), which measures the carrying value of the Corporation’s loan and available line of credit combined with any outstanding senior liens against the property 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. Certain borrowers (e.g., borrowers that have had debts discharged in a bankruptcy proceeding) may not have their FICO scores updated. FICO scores are also a primary credit quality indicator for the Credit Card and Other Consumer portfolio segment and the business card portfolio within U.S. small business commercial. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. The term reservable criticized refers to those commercial loans that are internally classified or listed by the Corporation as Special Mention, Substandard or Doubtful, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not considered reservable criticized. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans. 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 September 30, 2021, 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 September 30,  2021 2021 2020 2019 2018 2017 Prior Total Residential Mortgage Refreshed LTV       Less than or equal to 90 percent $ 201,127  $ 66,702  $ 48,549  $ 26,414  $ 8,448  $ 12,487  $ 38,527  Greater than 90 percent but less than or equal to 100 percent 2,388  1,327  704  169  31  24  133  Greater than 100 percent 801  451  155  57  16  14  108  Fully-insured loans 12,624  2,945  3,698  1,370  253  259  4,099  Total Residential Mortgage $ 216,940  $ 71,425  $ 53,106  $ 28,010  $ 8,748  $ 12,784  $ 42,867  Total Residential Mortgage Refreshed FICO score Less than 620 $ 2,499  $ 517  $ 480  $ 151  $ 123  $ 124  $ 1,104  Greater than or equal to 620 and less than 680 4,932  1,057  1,162  525  318  310  1,560  Greater than or equal to 680 and less than 740 23,689  6,536  5,973  2,935  1,225  1,563  5,457  Greater than or equal to 740 173,196  60,370  41,793  23,029  6,829  10,528  30,647  Fully-insured loans 12,624  2,945  3,698  1,370  253  259  4,099  Total Residential Mortgage $ 216,940  $ 71,425  $ 53,106  $ 28,010  $ 8,748  $ 12,784  $ 42,867  Home Equity - Credit Quality Indicators Total Home Equity Loans and Reverse Mortgages (1) Revolving Loans Revolving Loans Converted to Term Loans (Dollars in millions) September 30, 2021 Total Home Equity Refreshed LTV       Less than or equal to 90 percent $ 28,529  $ 1,789  $ 19,526  $ 7,214  Greater than 90 percent but less than or equal to 100 percent 192  83  47  62  Greater than 100 percent 279  105  70  104  Total Home Equity $ 29,000  $ 1,977  $ 19,643  $ 7,380  Total Home Equity Refreshed FICO score Less than 620 $ 930  $ 240  $ 214  $ 476  Greater than or equal to 620 and less than 680 1,483  230  497  756  Greater than or equal to 680 and less than 740 4,807  487  2,509  1,811  Greater than or equal to 740 21,780  1,020  16,423  4,337  Total Home Equity $ 29,000  $ 1,977  $ 19,643  $ 7,380  (1)Includes reverse mortgages of $1.3 billion and home equity loans of $646 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 September 30,  2021 Revolving Loans 2021 2020 2019 2018 2017 Prior Total Credit Card as of September 30,  2021 Revolving Loans Revolving Loans Converted to Term Loans (1) Refreshed FICO score     Less than 620 $ 677  $ 14  $ 117  $ 110  $ 139  $ 95  $ 122  $ 80  $ 2,846  $ 2,686  $ 160  Greater than or equal to 620 and less than 680 2,194  15  890  464  355  173  165  132  8,665  8,460  205  Greater than or equal to 680 and less than 740 8,083  63  3,544  1,869  1,290  565  390  362  26,939  26,740  199  Greater than or equal to 740 36,456  97  12,248  9,572  7,425  3,284  1,940  1,890  38,419  38,370  49  Other internal credit    metrics (2,3) 52,435  51,699  283  67  91  84  61  150  —  —  —  Total credit card and other    consumer $ 99,845  $ 51,888  $ 17,082  $ 12,082  $ 9,300  $ 4,201  $ 2,678  $ 2,614  $ 76,869  $ 76,256  $ 613  (1)Represents TDRs that were modified into term loans. (2)Other internal credit metrics may include delinquency status, geography or other factors. (3)Direct/indirect consumer includes $51.7 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 September 30, 2021. Commercial – Credit Quality Indicators By Vintage (1, 2) Term Loans Amortized Cost Basis by Origination Year (Dollars in millions) Total as of September 30,  2021 2021 2020 2019 2018 2017 Prior Revolving Loans U.S. Commercial Risk ratings         Pass rated $ 284,704  $ 39,184  $ 24,933  $ 25,500  $ 11,900  $ 11,207  $ 23,764  $ 148,216  Reservable criticized 11,223  461  1,082  1,491  1,730  583  1,191  4,685  Total U.S. Commercial $ 295,927  $ 39,645  $ 26,015  $ 26,991  $ 13,630  $ 11,790  $ 24,955  $ 152,901  Non-U.S. Commercial Risk ratings Pass rated $ 100,057  $ 17,768  $ 10,213  $ 7,795  $ 4,775  $ 3,633  $ 3,000  $ 52,873  Reservable criticized 2,793  188  341  616  378  200  285  785  Total Non-U.S. Commercial $ 102,850  $ 17,956  $ 10,554  $ 8,411  $ 5,153  $ 3,833  $ 3,285  $ 53,658  Commercial Real Estate Risk ratings Pass rated $ 52,861  $ 8,993  $ 7,653  $ 12,445  $ 7,021  $ 3,742  $ 7,669  $ 5,338  Reservable criticized 7,862  209  993  1,972  1,856  996  1,339  497  Total Commercial Real Estate $ 60,723  $ 9,202  $ 8,646  $ 14,417  $ 8,877  $ 4,738  $ 9,008  $ 5,835  Commercial Lease Financing Risk ratings Pass rated $ 14,640  $ 1,515  $ 2,641  $ 2,921  $ 2,203  $ 2,020  $ 3,340  $ —  Reservable criticized 404  27  11  96  71  52  147  —  Total Commercial Lease Financing $ 15,044  $ 1,542  $ 2,652  $ 3,017  $ 2,274  $ 2,072  $ 3,487  $ —  U.S. Small Business Commercial (3) Risk ratings Pass rated $ 15,149  $ 6,414  $ 4,524  $ 1,101  $ 800  $ 665  $ 1,504  $ 141  Reservable criticized 546  7  32  111  99  78  216  3  Total U.S. Small Business Commercial $ 15,695  $ 6,421  $ 4,556  $ 1,212  $ 899  $ 743  $ 1,720  $ 144   Total $ 490,239  $ 74,766  $ 52,423  $ 54,048  $ 30,833  $ 23,176  $ 42,455  $ 212,538  (1) Excludes $7.0 billion of loans accounted for under the fair value option at September 30, 2021. (2)     Includes $18 million of loans that converted from revolving to term loans. (3)     Excludes U.S. Small Business Card loans of $7.1 billion. Refreshed FICO scores for this portfolio are $188 million for less than 620; $572 million for greater than or equal to 620 and less than 680; $1.8 billion for greater than or equal to 680 and less than 740; and $4.5 billion greater than or equal to 740. 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 (1) 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 (2, 3) 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)Represents TDRs that were modified into term loans. (2)Other internal credit metrics may include delinquency status, geography or other factors. (3)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. 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 $ 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. During the nine months ended September 30, 2021, commercial credit quality showed signs of stabilization as the economy continued to recover. Commercial reservable criticized utilized exposure decreased to $24.1 billion at September 30, 2021 from $38.7 billion (to 4.53 percent from 7.31 percent of total commercial reservable utilized exposure) at December 31, 2020, which was broad-based across industries. Troubled Debt Restructurings The Corporation has been entering into loan modifications with borrowers in response to the pandemic, most of which are not classified as TDRs and therefore are not included in the following discussion. For more information on the criteria for classifying loans as TDRs, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K.  Consumer Real Estate Modifications of consumer real estate loans are classified as TDRs when the borrower is experiencing financial difficulties and a concession has been granted. Concessions may include reductions in interest rates, capitalization of past due amounts, principal and/or interest forbearance, payment extensions, principal and/or interest forgiveness, or combinations thereof. Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers under both government and proprietary programs. Trial modifications generally represent a three- to four-month period during which the borrower makes monthly payments under the anticipated modified payment terms. Upon successful completion of the trial period, the Corporation and the borrower enter into a permanent modification. Binding trial modifications are classified as TDRs when the trial offer is made and continue to be classified as TDRs regardless of whether the borrower enters into a permanent modification. Consumer real estate loans of $323 million that have been discharged in Chapter 7 bankruptcy with no change in repayment terms and not reaffirmed by the borrower were included in TDRs at September 30, 2021, of which $95 million were classified as nonperforming and $57 million were loans fully insured. Consumer real estate TDRs are measured primarily based on the net present value of the estimated cash flows discounted at the loan’s original effective interest rate. If the carrying value of a TDR exceeds this amount, a specific allowance is recorded as a component of the allowance for loan and lease losses. Alternatively, consumer real estate TDRs that are considered to be dependent solely on the collateral for repayment (e.g., due to the lack of income verification) are measured based on the estimated fair value of the collateral, and a charge-off is recorded if the carrying value exceeds the fair value of the collateral. Consumer real estate loans that reach 180 days past due prior to modification are charged off to their net realizable value, less costs to sell, before they are modified as TDRs in accordance with established policy. Subsequent declines in the fair value of the collateral after a loan has reached 180 days past due are recorded as charge-offs. Fully-insured loans are protected against principal loss, and therefore, the Corporation does not record an allowance for loan and lease losses on the outstanding principal balance, even after they have been modified in a TDR. At September 30, 2021 and December 31, 2020, 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 $87 million and $123 million at September 30, 2021 and December 31, 2020. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at September 30, 2021 was $1.1 billion. During the nine months ended September 30, 2021, the Corporation reclassified $33 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 table below presents the September 30, 2021 and 2020 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 and nine months ended September 30, 2021 and 2020. 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 and Nine Months Ended September 30, 2021 and 2020 Unpaid Principal Balance Carrying Value Pre-Modification Interest Rate Post-Modification Interest Rate (1) Unpaid Principal Balance Carrying Value Pre-Modification Interest Rate Post-Modification Interest Rate (1) (Dollars in millions) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Residential mortgage $ 451  $ 399  3.52  % 3.49  % $ 832  $ 742  3.49  % 3.44  % Home equity 61  45  3.51  3.51  97  73  3.56  3.58  Total $ 512  $ 444  3.52  3.49  $ 929  $ 815  3.50  3.46  Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Residential mortgage $ 103  $ 88  4.06  % 3.99  % $ 294  $ 244  4.07  % 3.90  % Home equity 12  10  4.25  4.08  56  45  3.85  3.73  Total $ 115  $ 98  4.08  4.00  $ 350  $ 289  4.03  3.87  (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 September 30, 2021 and 2020 carrying value for consumer real estate loans that were modified in a TDR during the three and nine months ended September 30, 2021 and 2020, 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) 2021 2020 2021 2020 Modifications under government programs $ —  $ —  $ 4  $ 8  Modifications under proprietary programs 417  50  740  136  Loans discharged in Chapter 7 bankruptcy (1) 9  15  29  44  Trial modifications 18  33  42  101  Total modifications $ 444  $ 98  $ 815  $ 289  (1)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 and nine months ended September 30, 2021 and 2020 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 September 30 Nine Months Ended September 30 (Dollars in millions) 2021 2020 2021 2020 Modifications under government programs $ 1  $ 6  $ 3  $ 14  Modifications under proprietary programs 35  8  80  27  Loans discharged in Chapter 7 bankruptcy (1) 1  4  6  15  Trial modifications (2) 3  15  15  45  Total modifications $ 40  $ 33  $ 104  $ 101  (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 The Corporation seeks to assist customers who 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 information on the Corporation’s Credit Card and Other Consumer TDR portfolio including the September 30, 2021 and 2020 unpaid principal balance, carrying value, and average pre- and post-modification interest rates of loans that were modified in TDRs during the three and nine months ended September 30, 2021 and 2020. Credit Card and Other Consumer – TDRs Entered into During the Three and Nine Months Ended September 30, 2021 and 2020   Unpaid Principal Balance Carrying Value (1) Pre-Modification Interest Rate Post-Modification Interest Rate Unpaid Principal Balance Carrying Value (1) Pre-Modification Interest Rate Post-Modification Interest Rate (Dollars in millions) Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Credit card $ 66  $ 71  18.48  % 3.71  % $ 189  $ 200  18.47  % 4.26 % Direct/Indirect consumer 4  2  5.20  5.20  13  8  5.53  5.53  Total $ 70  $ 73  18.06  3.76  $ 202  $ 208  17.99  4.31  Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Credit card $ 71  $ 77  18.19  % 6.86  % $ 203  $ 214  18.06  % 5.82  % Direct/Indirect consumer 35  29  6.02  6.02  50  37  5.87  5.87  Total $ 106  $ 106  14.85  6.63  $ 253  $ 251  16.29  5.83  (1)Includes accrued interest and fees. The table below presents the September 30, 2021 and 2020 carrying value for Credit Card and Other Consumer loans that were modified in a TDR during the three and nine months ended September 30, 2021 and 2020, by program type. Credit Card and Other Consumer – TDRs by Program Type TDRs Entered into During the Three Months Ended September 30 TDRs Entered into During the Nine Months Ended September 30 (Dollars in millions) 2021 2020 2021 2020 Internal programs $ 60  $ 80  $ 166  $ 178  External programs 11  19  37  59  Other 2  7  5  14  Total $ 73  $ 106  $ 208  $ 251  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 credit card and other consumer. Based on historical experience, the Corporation estimates that 10 percent of new credit card TDRs and 16 percent of new direct/indirect consumer TDRs may be in payment default within 12 months after modification. Commercial Loans Modifications of loans to commercial borrowers that are experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing the borrower with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique and reflects the individual circumstances of the borrower. Modifications that result in a TDR may include extensions of maturity at a concessionary (below market) rate of interest, payment forbearances or other actions designed to benefit the borrower while mitigating the Corporation’s risk exposure. Reductions in interest rates are rare. Instead, the interest rates are typically increased, although the increased rate may not represent a market rate of interest. Infrequently, concessions may also include principal forgiveness in connection with foreclosure, short sale or other settlement agreements leading to termination or sale of the loan. At the time of restructuring, the loans are remeasured to reflect the impact, if any, on projected cash flows resulting from the modified terms. If a portion of the loan is deemed to be uncollectible, a charge-off may be recorded at the time of restructuring. Alternatively, a charge-off may have already been recorded in a previous period such that no charge-off is required at the time of modification. During the three and nine months ended September 30, 2021, the carrying value of the Corporation’s commercial loans that were modified as TDRs was $213 million and $1.1 billion compared to $588 million and $1.5 billion for the same periods in 2020. At September 30, 2021 and December 31, 2020, the Corporation had commitments to lend $272 million and $402 million to commercial borrowers whose loans are classified as TDRs. The balance of commercial TDRs in payment default was $168 million and $218 million at September 30, 2021 and December 31, 2020. Loans Held-for-sale The Corporation had LHFS of $9.4 billion and $9.2 billion at September 30, 2021 and December 31, 2020. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $27.0 billion and $16.1 billion for the nine months ended September 30, 2021 and 2020. Cash used for originations and purchases of LHFS totaled approximately $27.0 billion and $11.1 billion for the nine months ended September 30, 2021 and 2020. Accrued Interest Receivable Accrued interest receivable for loans and leases and loans held-for-sale at September 30, 2021 and December 31, 2020 was $2.2 billion and $2.4 billion and is reported in customer and other receivables on the Consolidated Balance Sheet. Outstanding credit card loan balances include unpaid principal, interest and fees. Credit card loans are not classified as nonperforming but are charged off no later than the end of the month in which the account becomes 180 days past due, within 60 days after receipt of notification of death or bankruptcy, or upon confirmation of fraud. During the three and nine months ended September 30, 2021, the Corporation reversed $87 million and $369 million of interest and fee income against the income statement line item in which it was originally recorded upon charge-off of the principal balance of the loan. For the outstanding residential mortgage, home equity, direct/indirect consumer and commercial loan balances classified as nonperforming during the three and nine months ended September 30, 2021, interest and fee income reversed at the time the loans were classified as nonperforming was not significant. For more information on the Corporation's nonperforming loan policies, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. Allowance for Credit Losses The allowance for credit losses is estimated using quantitative and qualitative methods that consider a variety of factors, such as historical loss experience, the current credit quality of the portfolio and an economic outlook over the life of the loan. Qualitative reserves cover losses that are expected but, in the Corporation's assessment, may not be adequately reflected in the quantitative methods or the economic assumptions. The Corporation incorporates forward-looking information through the use of several macroeconomic scenarios in determining the weighted economic outlook over the forecasted life of the assets. These scenarios include key macroeconomic variables such as gross domestic product, unemployment rate, real estate prices and corporate bond spreads. The scenarios that are chosen each quarter and the weighting given to each scenario depend on a variety of factors including recent economic events, leading economic indicators, internal and third-party economist views, and industry trends. For more information on the Corporation's credit loss accounting policies including the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2020 Annual Report on Form 10-K. The September 30, 2021 estimate for allowance for credit losses was based on various economic outlooks that included consensus estimates, a downside scenario that assumed a significantly longer period until economic recovery, a tail risk scenario similar to the severely adverse scenario used in stress testing, a scenario to account for inflationary risk and higher interest rates and an upside scenario to consider the potential for improvement in the consensus outlooks. The weighted economic outlook assumes that the U.S. unemployment rate will be just above five percent by the fourth quarters of 2022 and 2023, which includes the impacts of the downside scenarios noted above. Additionally, in this economic outlook, U.S. gross domestic product is forecasted to grow at 1.8 percent and 1.9 percent year-over-year in the fourth quarters of 2022 and 2023. The allowance for credit losses considered the impact of enacted government stimulus measures and continued to factor in the uncertainty resulting from the unprecedented nature of the current health crisis and risks that may prevent a full economic recovery. While there has been improvement across the economy, the Corporation continues to factor into its allowance for credit losses an estimated impact from higher-risk segments that included leveraged loans and industries such as travel and entertainment, which have been adversely impacted by the effects of the pandemic. The allowance for credit losses at September 30, 2021 was $14.7 billion, a decrease of $6.0 billion compared to December 31, 2020. The decrease in the allowance for credit losses was primarily driven by improvements in the macroeconomic outlook and credit quality. The change in the allowance for credit losses was comprised of a net decrease of $5.6 billion in the allowance for loan and lease losses and a $340 million decrease in the reserve for unfunded lending commitments. The decrease in the allowance for credit losses was attributed to $342 million in the consumer real estate portfolio, $2.6 billion in the credit card and other consumer portfolio, and $3.1 billion in the commercial portfolio. Similarly, the provision for credit losses improved $2.0 billion to a benefit of $624 million and $15.4 billion to a benefit of $4.1 billion for the three and nine months ended September 30, 2021 compared to the same periods in 2020. The benefit in the three-month period was primarily due to credit quality improvements. The benefit in the nine-month period was primarily driven by improvements in the macroeconomic outlook and credit quality. Outstanding loans and leases excluding loans accounted for under the fair value option decreased $1.0 billion in the nine months ended September 30, 2021 driven by consumer loans, which decreased $5.2 billion primarily due to a decline in consumer real estate due to prepayments in a low rate environment. However, outstanding commercial loans and leases, excluding small business, increased $17.9 billion during the nine months ended September 30, 2021, primarily driven by Global Markets. The changes in the allowance for credit losses, including net charge-offs and provision for loan and lease losses, are detailed in the following table. Consumer Real Estate Credit Card and  Other Consumer Commercial Total (Dollars in millions) Three Months Ended September 30, 2021 Allowance for loan and lease losses, July 1 $ 597  $ 6,835  $ 6,663  $ 14,095  Loans and leases charged off (15) (626) (165) (806) Recoveries of loans and leases previously charged off 56  256  31  343  Net charge-offs 41  (370) (134) (463) Provision for loan and lease losses (85) 175  (565) (475) Other 2  (1) (3) (2) Allowance for loan and lease losses, September 30 555  6,639  5,961  13,155  Reserve for unfunded lending commitments, July 1 107  —  1,580  1,687  Provision for unfunded lending commitments (9) —  (140) (149) Reserve for unfunded lending commitments, September 30 98  —  1,440  1,538  Allowance for credit losses, September 30 $ 653  $ 6,639  $ 7,401  $ 14,693  Three Months Ended September 30, 2020 Allowance for loan and lease losses, July 1 $ 833  $ 10,122  $ 8,434  $ 19,389  Loans and leases charged off (13) (810) (470) (1,293) Recoveries of loans and leases previously charged off 39  220  62  321  Net charge-offs 26  (590) (408) (972) Provision for loan and lease losses (6) 304  882  1,180  Other 2  —  (3) (1) Allowance for loan and lease losses, September 30 855  9,836  8,905  19,596  Reserve for unfunded lending commitments, July 1 141  —  1,561  1,702  Provision for unfunded lending commitments (3) —  212  209  Other —  —  (1) (1) Reserve for unfunded lending commitments, September 30 138  —  1,772  1,910  Allowance for credit losses, September 30 $ 993  $ 9,836  $ 10,677  $ 21,506  (Dollars in millions) Nine Months Ended September 30, 2021 Allowance for loan and lease losses, January 1 $ 858  $ 9,213  $ 8,731  $ 18,802  Loans and leases charged off (60) (2,402) (591) (3,053) Recoveries of loans and leases previously charged off 170  757  245  1,172  Net charge-offs 110  (1,645) (346) (1,881) Provision for loan and lease losses (414) (929) (2,423) (3,766) Other 1  —  (1) —  Allowance for loan and lease losses, September 30 555  6,639  5,961  13,155  Reserve for unfunded lending commitments, January 1 137  —  1,741  1,878  Provision for unfunded lending commitments (39) —  (300) (339) Other —  —  (1) (1) Reserve for unfunded lending commitments, September 30 98  —  1,440  1,538  Allowance for credit losses, September 30 $ 653  $ 6,639  $ 7,401  $ 14,693  Nine Months Ended September 30, 2020 Allowance for loan and lease losses, January 1 $ 440  $ 7,430  $ 4,488  $ 12,358  Loans and leases charged off (75) (2,916) (1,199) (4,190) Recoveries of loans and leases previously charged off 147  674  129  950  Net charge-offs 72  (2,242) (1,070) (3,240) Provision for loan and lease losses 336  4,648  5,496  10,480  Other 7  —  (9) (2) Allowance for loan and lease losses, September 30 855  9,836  8,905  19,596  Reserve for unfunded lending commitments, January 1 119  —  1,004  1,123  Provision for unfunded lending commitments 19  —  768  787  Reserve for unfunded lending commitments, September 30 138  —  1,772  1,910  Allowance for credit losses, September 30 $ 993  $ 9,836  $ 10,677  $ 21,506