Outstanding Loans and Leases and Allowance for Credit Losses

v3.24.3

Outstanding Loans and Leases and Allowance for Credit Losses	9 Months Ended
	Sep. 30, 2024
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, 2024 and December 31, 2023. 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, 2024 Consumer real estate             Residential mortgage $ 1,206  $ 262  $ 762  $ 2,230  $ 225,612  $ 227,842  Home equity 82  33  127  242  25,241  25,483  Credit card and other consumer Credit card 717  540  1,306  2,563  98,278  100,841  Direct/Indirect consumer (2) 298  103  97  498  105,197  105,695  Other consumer —  —  —  —  161  161  Total consumer 2,303  938  2,292  5,533  454,489  460,022  Consumer loans accounted for under the fair value option (3) $ 229  229  Total consumer loans and leases 2,303  938  2,292  5,533  454,489  229  460,251  Commercial U.S. commercial 415  330  461  1,206  378,357  379,563  Non-U.S. commercial 19  23  85  127  127,611  127,738  Commercial real estate (4) 511  138  1,209  1,858  66,562  68,420  Commercial lease financing 26  20  17  63  14,929  14,992  U.S. small business commercial 186  96  186  468  20,425  20,893  Total commercial 1,157  607  1,958  3,722  607,884  611,606  Commercial loans accounted for under the fair value option (3) 3,943  3,943  Total commercial loans and leases 1,157  607  1,958  3,722  607,884  3,943  615,549  Total loans and leases (5) $ 3,460  $ 1,545  $ 4,250  $ 9,255  $ 1,062,373  $ 4,172  $ 1,075,800  Percentage of outstandings 0.32  % 0.14  % 0.40  % 0.86  % 98.75  % 0.39  % 100.00  % (1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $179 million and nonperforming loans of $181 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $68 million and nonperforming loans of $93 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $215 million and nonperforming loans of $674 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $52 million of nonperforming loans. (2)Total outstandings primarily includes auto and specialty lending loans and leases of $54.9 billion, U.S. securities-based lending loans of $47.3 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 $63 million and home equity loans of $166 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.7 billion and non-U.S. commercial loans of $1.3 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 $61.8 billion and non-U.S. commercial real estate loans of $6.6 billion. (5)Total outstandings includes loans and leases pledged as collateral of $27.7 billion. The Corporation also pledged $302.5 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, 2023 Consumer real estate             Residential mortgage $ 1,177  $ 302  $ 829  $ 2,308  $ 226,095  $ 228,403  Home equity 90  38  161  289  25,238  25,527  Credit card and other consumer           Credit card 680  515  1,224  2,419  99,781    102,200  Direct/Indirect consumer (2) 306  99  91  496  102,972    103,468  Other consumer  —  —  —  —  124    124  Total consumer 2,253  954  2,305  5,512  454,210  459,722  Consumer loans accounted for under the fair value option (3) $ 243  243  Total consumer loans and leases 2,253  954  2,305  5,512  454,210  243  459,965  Commercial               U.S. commercial 477  96  225  798  358,133    358,931  Non-U.S. commercial 86  21  64  171  124,410    124,581  Commercial real estate (4) 247  133  505  885  71,993    72,878  Commercial lease financing 44  8  24  76  14,778    14,854  U.S. small business commercial 166  89  184  439  18,758    19,197  Total commercial 1,020  347  1,002  2,369  588,072    590,441  Commercial loans accounted for under the fair value option (3) 3,326  3,326  Total commercial loans and leases 1,020  347  1,002  2,369  588,072  3,326  593,767  Total loans and leases (5) $ 3,273  $ 1,301  $ 3,307  $ 7,881  $ 1,042,282  $ 3,569  $ 1,053,732  Percentage of outstandings 0.31  % 0.12  % 0.31  % 0.75  % 98.91  % 0.34  % 100.00  % (1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $198 million and nonperforming loans of $150 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $77 million and nonperforming loans of $102 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $252 million and nonperforming loans of $738 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $39 million of nonperforming loans. (2)Total outstandings primarily includes auto and specialty lending loans and leases of $53.9 billion, U.S. securities-based lending loans of $46.0 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 $66 million and home equity loans of $177 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.2 billion and non-U.S. commercial loans of $1.2 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 $66.8 billion and non-U.S. commercial real estate loans of $6.1 billion. (5)Total outstandings includes loans and leases pledged as collateral of $33.7 billion. The Corporation also pledged $246.0 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 $8.2 billion and $8.7 billion at September 30, 2024 and December 31, 2023, 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 Nonperforming loans were $5.6 billion and $5.5 billion at September 30, 2024 and December 31, 2023. Commercial nonperforming loans were $3.0 billion and $2.8 billion at September 30, 2024 and December 31, 2023 primarily driven by commercial real estate. Consumer nonperforming loans were $2.7 billion at both September 30, 2024 and December 31, 2023, primarily comprised of residential mortgage. The following table presents the Corporation’s nonperforming loans and leases and loans accruing past due 90 days or more at September 30, 2024 and December 31, 2023. 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 2023 Annual Report on Form 10-K. Credit Quality Nonperforming Loans and Leases Accruing Past Due 90 Days or More (Dollars in millions) September 30 2024 December 31 2023 September 30 2024 December 31 2023 Residential mortgage (1) $ 2,089  $ 2,114  $ 215  $ 252  With no related allowance (2) 1,930  1,974  —  —  Home equity (1) 413  450  —  —  With no related allowance (2) 346  375  —  —  Credit Card             n/a             n/a 1,306  1,224  Direct/indirect consumer 175  148  1  2  Total consumer 2,677  2,712  1,522  1,478  U.S. commercial 699  636  219  51  Non-U.S. commercial 85  175  12  4  Commercial real estate 2,124  1,927  206  32  Commercial lease financing 18  19  5  7  U.S. small business commercial 26  16  183  184  Total commercial 2,952  2,773  625  278  Total nonperforming loans $ 5,629  $ 5,485  $ 2,147  $ 1,756  Percentage of outstanding loans and leases 0.53  % 0.52  % 0.20  % 0.17  % (1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2024 and December 31, 2023 residential mortgage included $114 million and $156 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 $101 million and $96 million of loans on which interest was still accruing. (2)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 2023 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 and gross charge-offs for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at September 30, 2024. Residential Mortgage – Credit Quality Indicators By Vintage Term Loans by Origination Year (Dollars in millions) Total as of September 30,  2024 2024 2023 2022 2021 2020 Prior Residential Mortgage Refreshed LTV       Less than or equal to 90 percent $ 215,050  $ 12,861  $ 13,670  $ 37,299  $ 72,985  $ 33,129  $ 45,106  Greater than 90 percent but less than or equal to 100 percent 1,752  553  528  480  123  23  45  Greater than 100 percent 725  313  181  137  53  17  24  Fully-insured loans 10,315  440  201  312  3,220  2,634  3,508  Total Residential Mortgage $ 227,842  $ 14,167  $ 14,580  $ 38,228  $ 76,381  $ 35,803  $ 48,683  Residential Mortgage Refreshed FICO score Less than 620 $ 2,500  $ 125  $ 162  $ 470  $ 607  $ 418  $ 718  Greater than or equal to 620 and less than 680 4,657  222  364  894  1,175  704  1,298  Greater than or equal to 680 and less than 740 22,362  1,443  1,644  4,072  6,341  3,494  5,368  Greater than or equal to 740 188,008  11,937  12,209  32,480  65,038  28,553  37,791  Fully-insured loans 10,315  440  201  312  3,220  2,634  3,508  Total Residential Mortgage $ 227,842  $ 14,167  $ 14,580  $ 38,228  $ 76,381  $ 35,803  $ 48,683  Gross charge-offs for the nine months ended September 30, 2024 $ 18  $ —  $ 2  $ 4  $ 2  $ 1  $ 9  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, 2024 Home Equity Refreshed LTV       Less than or equal to 90 percent $ 25,399  $ 806  $ 21,078  $ 3,515  Greater than 90 percent but less than or equal to 100 percent 40  3  33  4  Greater than 100 percent 44  1  32  11  Total Home Equity $ 25,483  $ 810  $ 21,143  $ 3,530  Home Equity Refreshed FICO score Less than 620 $ 633  $ 71  $ 299  $ 263  Greater than or equal to 620 and less than 680 1,092  86  661  345  Greater than or equal to 680 and less than 740 4,290  168  3,300  822  Greater than or equal to 740 19,468  485  16,883  2,100  Total Home Equity $ 25,483  $ 810  $ 21,143  $ 3,530  Gross charge-offs for the nine months ended September 30, 2024 $ 16  $ 6  $ 5  $ 5  (1)Includes reverse mortgages of $510 million and home equity loans of $300 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, 2024 Revolving Loans 2024 2023 2022 2021 2020 Prior Total Credit Card as of September 30, 2024 Revolving Loans Revolving Loans Converted to Term Loans (1) Refreshed FICO score     Less than 620 $ 1,415  $ 11  $ 163  $ 424  $ 439  $ 265  $ 60  $ 53  $ 5,735  $ 5,384  $ 351  Greater than or equal to 620 and less than 680 2,336  9  522  757  582  314  79  73  11,452  11,133  319  Greater than or equal to 680 and less than 740 8,035  44  2,284  2,436  1,800  970  273  228  34,390  34,106  284  Greater than or equal to 740 43,274  68  14,338  12,466  8,701  4,664  1,613  1,424  49,264  49,201  63  Other internal credit    metrics (2,3) 50,635  50,133  114  53  98  64  36  137  —  —  —  Total credit card and other    consumer $ 105,695  $ 50,265  $ 17,421  $ 16,136  $ 11,620  $ 6,277  $ 2,061  $ 1,915  $ 100,841  $ 99,824  $ 1,017  Gross charge-offs for the nine    months ended September 30, 2024 $ 292  $ 4  $ 20  $ 107  $ 86  $ 40  $ 10  $ 25  $ 3,235  $ 3,103  $ 132  (1)Represents loans that were modified into term loans. (2)Other internal credit metrics may include delinquency status, geography or other factors. (3)Direct/indirect consumer includes $50.1 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 September 30, 2024. Commercial – Credit Quality Indicators By Vintage (1) Term Loans Amortized Cost Basis by Origination Year (Dollars in millions) Total as of September 30, 2024 2024 2023 2022 2021 2020 Prior Revolving Loans U.S. Commercial Risk ratings         Pass rated $ 366,116  $ 32,114  $ 36,286  $ 36,234  $ 22,318  $ 11,309  $ 35,902  $ 191,953  Reservable criticized 13,447  86  814  1,007  886  388  2,044  8,222  Total U.S. Commercial $ 379,563  $ 32,200  $ 37,100  $ 37,241  $ 23,204  $ 11,697  $ 37,946  $ 200,175  Gross charge-offs for the nine months ended    September 30, 2024 $ 327  $ 2  $ 111  $ 64  $ 14  $ 4  $ 16  $ 116  Non-U.S. Commercial Risk ratings Pass rated $ 125,663  $ 13,329  $ 16,902  $ 13,303  $ 12,712  $ 1,450  $ 7,643  $ 60,324  Reservable criticized 2,075  1  155  125  293  12  91  1,398  Total Non-U.S. Commercial $ 127,738  $ 13,330  $ 17,057  $ 13,428  $ 13,005  $ 1,462  $ 7,734  $ 61,722  Gross charge-offs for the nine months ended    September 30, 2024 $ 61  $ —  $ 41  $ 20  $ —  $ —  $ —  $ —  Commercial Real Estate Risk ratings Pass rated $ 58,554  $ 4,232  $ 4,891  $ 12,653  $ 10,197  $ 3,054  $ 13,604  $ 9,923  Reservable criticized 9,866  27  180  2,421  2,229  644  3,953  412  Total Commercial Real Estate $ 68,420  $ 4,259  $ 5,071  $ 15,074  $ 12,426  $ 3,698  $ 17,557  $ 10,335  Gross charge-offs for the nine months ended    September 30, 2024 $ 762  $ —  $ —  $ 57  $ 83  $ 62  $ 531  $ 29  Commercial Lease Financing Risk ratings Pass rated $ 14,748  $ 2,596  $ 3,823  $ 2,590  $ 2,072  $ 966  $ 2,701  $ —  Reservable criticized 244  7  53  61  38  23  62  —  Total Commercial Lease Financing $ 14,992  $ 2,603  $ 3,876  $ 2,651  $ 2,110  $ 989  $ 2,763  $ —  Gross charge-offs for the nine months ended    September 30, 2024 $ 2  $ —  $ —  $ —  $ 2  $ —  $ —  $ —  U.S. Small Business Commercial (2) Risk ratings Pass rated $ 9,562  $ 1,379  $ 1,920  $ 1,698  $ 1,354  $ 665  $ 2,108  $ 438  Reservable criticized 429  4  57  99  120  25  120  4  Total U.S. Small Business Commercial $ 9,991  $ 1,383  $ 1,977  $ 1,797  $ 1,474  $ 690  $ 2,228  $ 442  Gross charge-offs for the nine months ended    September 30, 2024 $ 22  $ —  $ —  $ 1  $ —  $ 5  $ 4  $ 12  Total $ 600,704  $ 53,775  $ 65,081  $ 70,191  $ 52,219  $ 18,536  $ 68,228  $ 272,674  Gross charge-offs for the nine months ended    September 30, 2024 $ 1,174  $ 2  $ 152  $ 142  $ 99  $ 71  $ 551  $ 157  (1)Excludes $3.9 billion of loans accounted for under the fair value option at September 30, 2024. (2)Excludes U.S. Small Business Card loans of $10.9 billion. Refreshed FICO scores for this portfolio are $667 million for less than 620; $1.2 billion for greater than or equal to 620 and less than 680; $3.0 billion for greater than or equal to 680 and less than 740; and $6.1 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $361 million. 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 year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at December 31, 2023. Residential Mortgage – Credit Quality Indicators By Vintage Term Loans by Origination Year (Dollars in millions) Total as of  December 31,  2023 2023 2022 2021 2020 2019 Prior Residential Mortgage Refreshed LTV Less than or equal to 90 percent $ 214,661  $ 15,224  $ 38,225  $ 76,229  $ 35,072  $ 17,432  $ 32,479  Greater than 90 percent but less than or equal to 100 percent 1,994  698  911  286  53  25  21  Greater than 100 percent 785  264  342  100  31  14  34  Fully-insured loans 10,963  540  350  3,415  2,834  847  2,977  Total Residential Mortgage $ 228,403  $ 16,726  $ 39,828  $ 80,030  $ 37,990  $ 18,318  $ 35,511  Residential Mortgage Refreshed FICO score Less than 620 $ 2,335  $ 115  $ 471  $ 589  $ 402  $ 136  $ 622  Greater than or equal to 620 and less than 680 4,671  359  919  1,235  777  296  1,085  Greater than or equal to 680 and less than 740 23,357  1,934  4,652  6,988  3,742  1,836  4,205  Greater than or equal to 740 187,077  13,778  33,436  67,803  30,235  15,203  26,622  Fully-insured loans 10,963  540  350  3,415  2,834  847  2,977  Total Residential Mortgage $ 228,403  $ 16,726  $ 39,828  $ 80,030  $ 37,990  $ 18,318  $ 35,511  Gross charge-offs for the year ended December 31, 2023 $ 67  $ —  $ 7  $ 12  $ 6  $ 2  $ 40  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, 2023 Home Equity Refreshed LTV Less than or equal to 90 percent $ 25,378  $ 1,051  $ 20,380  $ 3,947  Greater than 90 percent but less than or equal to 100 percent 61  17  35  9  Greater than 100 percent 88  35  36  17  Total Home Equity $ 25,527  $ 1,103  $ 20,451  $ 3,973  Home Equity Refreshed FICO score Less than 620 $ 654  $ 123  $ 253  $ 278  Greater than or equal to 620 and less than 680 1,107  118  589  400  Greater than or equal to 680 and less than 740 4,340  240  3,156  944  Greater than or equal to 740 19,426  622  16,453  2,351  Total Home Equity $ 25,527  $ 1,103  $ 20,451  $ 3,973  Gross charge-offs for the year ended December 31, 2023 $ 36  $ 4  $ 21  $ 11  (1)Includes reverse mortgages of $763 million and home equity loans of $340 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, 2023 Revolving Loans 2023 2022 2021 2020 2019 Prior Total Credit Card as of December 31, 2023 Revolving Loans Revolving Loans Converted to Term Loans (1) Refreshed FICO score Less than 620 $ 1,246  $ 11  $ 292  $ 428  $ 336  $ 85  $ 55  $ 39  $ 5,338  $ 5,030  $ 308  Greater than or equal to 620 and less than 680 2,506  11  937  799  501  121  73  64  11,623  11,345  278  Greater than or equal to 680 and less than 740 8,629  48  3,451  2,582  1,641  462  244  201  34,777  34,538  239  Greater than or equal to 740 41,656  74  16,761  11,802  7,643  2,707  1,417  1,252  50,462  50,410  52  Other internal credit    metrics (2, 3) 49,431  48,764  106  183  110  53  57  158  —  —  —  Total credit card and other    consumer $ 103,468  $ 48,908  $ 21,547  $ 15,794  $ 10,231  $ 3,428  $ 1,846  $ 1,714  $ 102,200  $ 101,323  $ 877  Gross charge-offs for the year    ended December 31, 2023 $ 233  $ 5  $ 32  $ 95  $ 53  $ 15  $ 10  $ 23  $ 3,133  $ 3,013  $ 120  (1)Represents loans that were modified into term loans. (2)Other internal credit metrics may include delinquency status, geography or other factors. (3)Direct/indirect consumer includes $48.8 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, 2023. Commercial – Credit Quality Indicators By Vintage (1) Term Loans Amortized Cost Basis by Origination Year (Dollars in millions) Total as of December 31, 2023 2023 2022 2021 2020 2019 Prior Revolving Loans U.S. Commercial Risk ratings         Pass rated $ 347,563  $ 41,842  $ 43,290  $ 27,738  $ 13,495  $ 11,772  $ 29,923  $ 179,503  Reservable criticized 11,368  278  1,316  708  363  537  1,342  6,824  Total U.S. Commercial $ 358,931  $ 42,120  $ 44,606  $ 28,446  $ 13,858  $ 12,309  $ 31,265  $ 186,327  Gross charge-offs for the year ended    December 31, 2023 $ 191  $ 5  $ 38  $ 29  $ 4  $ 2  $ 27  $ 86  Non-U.S. Commercial Risk ratings Pass rated $ 122,931  $ 17,053  $ 15,810  $ 15,256  $ 2,405  $ 2,950  $ 5,485  $ 63,972  Reservable criticized 1,650  50  184  294  90  158  74  800  Total Non-U.S. Commercial $ 124,581  $ 17,103  $ 15,994  $ 15,550  $ 2,495  $ 3,108  $ 5,559  $ 64,772  Gross charge-offs for the year ended    December 31, 2023 $ 37  $ —  $ —  $ 8  $ 7  $ 1  $ —  $ 21  Commercial Real Estate Risk ratings Pass rated $ 64,150  $ 4,877  $ 16,147  $ 11,810  $ 4,026  $ 7,286  $ 10,127  $ 9,877  Reservable criticized 8,728  134  749  1,728  782  2,132  2,794  409  Total Commercial Real Estate $ 72,878  $ 5,011  $ 16,896  $ 13,538  $ 4,808  $ 9,418  $ 12,921  $ 10,286  Gross charge-offs for the year ended    December 31, 2023 $ 254  $ 2  $ —  $ 4  $ —  $ 59  $ 189  $ —  Commercial Lease Financing Risk ratings Pass rated $ 14,688  $ 4,188  $ 3,077  $ 2,373  $ 1,349  $ 1,174  $ 2,527  $ —  Reservable criticized 166  9  22  46  16  32  41  —  Total Commercial Lease Financing $ 14,854  $ 4,197  $ 3,099  $ 2,419  $ 1,365  $ 1,206  $ 2,568  $ —  Gross charge-offs for the year ended    December 31, 2023 $ 2  $ —  $ —  $ 1  $ 1  $ —  $ —  $ —  U.S. Small Business Commercial (2) Risk ratings Pass rated $ 9,031  $ 1,886  $ 1,830  $ 1,550  $ 836  $ 721  $ 1,780  $ 428  Reservable criticized 384  6  64  95  40  63  113  3  Total U.S. Small Business Commercial $ 9,415  $ 1,892  $ 1,894  $ 1,645  $ 876  $ 784  $ 1,893  $ 431  Gross charge-offs for the year ended    December 31, 2023 $ 43  $ 1  $ 2  $ 2  $ 19  $ 3  $ 4  $ 12   Total $ 580,659  $ 70,323  $ 82,489  $ 61,598  $ 23,402  $ 26,825  $ 54,206  $ 261,816  Gross charge-offs for the year ended    December 31, 2023 $ 527  $ 8  $ 40  $ 44  $ 31  $ 65  $ 220  $ 119  (1) Excludes $3.3 billion of loans accounted for under the fair value option at December 31, 2023. (2) Excludes U.S. Small Business Card loans of $9.8 billion. Refreshed FICO scores for this portfolio are $530 million for less than 620; $1.1 billion for greater than or equal to 620 and less than 680; $2.7 billion for greater than or equal to 680 and less than 740; and $5.5 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $317 million. During the nine months ended September 30, 2024, commercial reservable criticized utilized exposure increased to $27.4 billion at September 30, 2024 from $23.3 billion (to 4.25 percent from 3.74 percent of total commercial reservable utilized exposure) at December 31, 2023, primarily driven by U.S. commercial and commercial real estate. Loan Modifications to Borrowers in Financial Difficulty As part of its credit risk management, the Corporation may modify a loan agreement with a borrower experiencing financial difficulties through a refinancing or restructuring of the borrower’s loan agreement (modification programs). Effective January 1, 2023, the Corporation adopted the new accounting standard on loan modifications. Accordingly, September 30, 2024 balances presented in payment status tables represent loans that were modified over the last 12 months, and September 30, 2023 balances presented in payment status tables represent loans that were modified during the first nine months of 2023. Consumer Real Estate The following modification programs are offered for consumer real estate loans to borrowers experiencing financial difficulties. Forbearance and Other Payment Plans: Forbearance plans generally consist of the Corporation suspending the borrower’s payments for a defined period, with those payments then due over a defined period of time or at the conclusion of the forbearance period. The aging status of a loan is generally frozen when it enters into a forbearance plan. If a borrower is unable to fulfill their obligations under the forbearance plans, they may be offered a trial offer or permanent modification. Trial Offer and Permanent Modifications: Trial offer for modification plans generally consist of the Corporation offering a borrower modified loan terms that reduce their contractual payments temporarily over a three-to-four-month trial period. If the customer successfully makes the modified payments during the trial period and formally accepts the modified terms, the modified loan terms become permanent. Some borrowers may enter into permanent modifications without a trial period. In a permanent modification, the borrower’s payment terms are typically modified in more than one manner, but generally include a term extension and an interest rate reduction. At times, the permanent modification may also include principal forgiveness and/or a deferral of past due principal and interest amounts to the end of the loan term. The combinations utilized are based on modifying the terms that give the borrower an improved ability to meet the contractual obligations. The term extensions granted for residential mortgage and home equity permanent modifications vary widely and can be up to 30 years, but most are in the range of 1 to 20 years. Principal forgiveness and payment deferrals were insignificant during the three and nine months ended September 30, 2024 and 2023. The table below provides the ending amortized cost of the Corporation’s modified consumer real estate loans for the three and nine months ended September 30, 2024 and 2023. Consumer Real Estate - Modifications to Borrowers in Financial Difficulty Forbearance and Other Payment Plans Permanent Modification Total As a % of Financing Receivables Forbearance and Other Payment Plans Permanent Modification Total As a % of Financing Receivables (Dollars in millions) Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Residential Loans $ 4  $ 48  $ 52  0.02  % $ 41  $ 161  $ 202  0.09  % Home Equity —  8  8  0.03  % —  26  26  0.10  % Total $ 4  $ 56  $ 60  0.02  % $ 41  $ 187  $ 228  0.09  % Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Residential Loans $ 270  $ 47  $ 317  0.14  % $ 437  $ 128  $ 565  0.25  % Home Equity 39  9  48  0.19  64  26  90  0.35  Total $ 309  $ 56  $ 365  0.14  $ 501  $ 154  $ 655  0.26  The table below presents the financial effect of modified consumer real estate loans. Financial Effect of Modified Consumer Real Estate Loans Three Months Ended September 30 Nine Months Ended September 30 2024 2023 2024 2023 Forbearance and Other Payment Plans Weighted-average duration Residential Mortgage 4 months 4 months 7 months 8 months Home Equity n/a 4 months n/a 9 months Permanent Modifications Weighted-average Term Extension Residential Mortgage 11.0 years 12.1 years 9.8 years 9.9 years Home Equity 17.7 years 17.2 years 17.5 years 16.2 years Weighted-average Interest Rate Reduction Residential Mortgage 1.23  % 1.31  % 1.29  % 1.50  % Home Equity 2.77  % 2.69  % 2.66  % 3.11  % n/a = not applicable For consumer real estate borrowers in financial difficulty that received a forbearance, trial or permanent modification, there were no commitments to lend additional funds at September 30, 2024 and 2023. The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of residential and home equity loans that had been modified within 12 months were insignificant. The table below provides aging information as of September 30, 2024 for consumer real estate loans that were modified over the last 12 months and as of September 30, 2023 for consumer real estate loans that were modified during the first nine months of 2023. Consumer Real Estate - Payment Status of Modifications to Borrowers in Financial Difficulty Current 30–89 Days Past Due 90+ Days Past Due Total (Dollars in millions) September 30, 2024 Residential mortgage $ 153  $ 52  $ 47  $ 252  Home equity 29  2  1  32  Total $ 182  $ 54  $ 48  $ 284  September 30, 2023 Residential mortgage $ 295  $ 114  $ 156  $ 565  Home equity 51  11  28  90  Total $ 346  $ 125  $ 184  $ 655  Consumer real estate foreclosed properties totaled $60 million and $83 million at September 30, 2024 and December 31, 2023. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at September 30, 2024 and December 31, 2023, was $482 million and $633 million. During the nine months ended September 30, 2024 and 2023, the Corporation reclassified $73 million and $86 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. Credit Card and Other Consumer Credit card and other consumer loans are primarily modified by placing the customer on a fixed payment plan with a significantly reduced fixed interest rate, with terms ranging from 6 months to 72 months, most of which had a 60-month term at September 30, 2024. In certain circumstances, the Corporation will forgive a portion of the outstanding balance if the borrower makes payments up to a set amount. The Corporation makes modifications directly with borrowers for loans held by the Corporation (internal programs) as well as through third-party renegotiation agencies that provide solutions to customers’ entire unsecured debt structures (external programs). The September 30, 2024 amortized cost of credit card and other consumer loans that were modified through these programs during the three and nine months ended September 30, 2024 was $202 million and $534 million compared to $196 million and $455 million for the same periods in 2023. These modifications represented 0.10 percent and 0.26 percent of outstanding credit card and other consumer loans for the three and nine months ended September 30, 2024 compared to 0.10 percent and 0.22 percent for the same periods in 2023. During the three and nine months ended September 30, 2024, the financial effect of modifications resulted in a weighted-average interest rate reduction of 19.13 percent and 19.29 percent compared to 19.40 percent and 19.02 percent for the same periods in 2023, and principal forgiveness of $30 million and $88 million compared to $16 million and $41 million for the same periods in 2023. The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of credit card and other consumer loans that had been modified within 12 months were insignificant. At September 30, 2024, modified credit card and other consumer loans to borrowers experiencing financial difficulty over the last 12 months totaled $665 million, of which $562 million were current, $58 million were 30-89 days past due, and $45 million were greater than 90 days past due. At September 30, 2023, modified credit card and other consumer loans to borrowers experiencing financial difficulty totaled $455 million, of which $370 million were current, $47 million were 30-89 days past due, and $38 million were greater than 90 days past due. Commercial Loans Modifications of loans to commercial borrowers experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing borrowers with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique, reflects the borrower’s individual circumstances and is designed to benefit the borrower while mitigating the Corporation’s risk exposure. Commercial modifications are primarily term extensions and payment forbearances. Payment forbearances involve the Corporation forbearing its contractual right to collect certain payments or payment in full (maturity forbearance) for a defined period of time. Reductions in interest rates and principal forgiveness occur infrequently for commercial borrowers. Principal forgiveness may occur in connection with foreclosure, short sales or other settlement agreements, leading to termination or sale of the loan. The table below provides the ending amortized cost of commercial loans modified during the three and nine months ended September 30, 2024 and 2023. Commercial Loans - Modifications to Borrowers in Financial Difficulty Term Extension Forbearances Interest Rate Reduction Total As a % of Financing Receivables Term Extension Forbearances Interest Rate Reduction Total As a % of Financing Receivables (Dollars in millions) Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 U.S. commercial $ 379 $ 47 $ — $ 426 0.11  % $ 1,114 $ 52 $ — $ 1,166 0.31  % Non-U.S. commercial — — — — —  13 — — 13 0.01  Commercial real estate 874 234 — 1,108 1.62  1,238 487 36 1,761 2.57  Total $ 1,253 $ 281 $ — $ 1,534 0.27  $ 2,365 $ 539 $ 36 $ 2,940 0.51  Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 U.S. commercial $ 431 $ 24 $ — $ 455 0.13  % $ 768 $ 33 $ — $ 801 0.22  % Non-U.S. commercial 130 — 24 154 0.12  162 — 24 186 0.15  Commercial real estate 599 219 — 818 1.12  1,069 287 — 1,356 1.85  Total $ 1,160 $ 243 $ 24 $ 1,427 0.26  $ 1,999 $ 320 $ 24 $ 2,343 0.42  Term extensions granted increased the weighted-average life of the impacted loans by 2.1 years and 1.8 years for the three and nine months ended September 30, 2024 compared to 1.8 years for the same periods in 2023. The weighted-average duration of loan payments deferred under the Corporation’s commercial loan forbearance program was 10 months and 11 months for the three and nine months ended September 30, 2024 compared to 8 months and 9 months for the same periods in 2023. The deferral period for loan payments can vary, but are mostly in the range of 8 months to 24 months. Modifications of loans to troubled borrowers for Commercial Lease Financing and U.S. Small Business Commercial were not significant during the three and nine months ended September 30, 2024 and 2023. The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of commercial loans that had been modified within 12 months were insignificant. The table below provides aging information as of September 30, 2024 for commercial loans that were modified over the last 12 months and as of September 30, 2023 for commercial loans that were modified during the nine months ended September 30, 2023. Commercial - Payment Status of Modified Loans to Borrowers in Financial Difficulty Current 30–89 Days Past Due 90+ Days Past Due Total (Dollars in millions) September 30, 2024 U.S. Commercial $ 1,193  $ 58  $ 31  $ 1,282 Non-U.S. Commercial 36  —  —  36 Commercial Real Estate 1,667  3  303  1,973 Total $ 2,896  $ 61  $ 334  $ 3,291 September 30, 2023 U.S. Commercial $ 766  $ 21  $ 14  $ 801 Non-U.S. Commercial 186  —  —  186 Commercial Real Estate 1,083  60  213  1,356 Total $ 2,035  $ 81  $ 227  $ 2,343 For the nine months ended September 30, 2024 and 2023, the Corporation had commitments to lend $1.2 billion and $871 million to commercial borrowers experiencing financial difficulty whose loans were modified during the period. Loans Held-for-sale The Corporation had LHFS of $10.4 billion and $6.0 billion at September 30, 2024 and December 31, 2023. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $21.7 billion and $10.8 billion for the nine months ended September 30, 2024 and 2023. Cash used for originations and purchases of LHFS totaled $26.3 billion and $11.5 billion for the nine months ended September 30, 2024 and 2023. Also included were non-cash net transfers into LHFS of $0 and $634 million during the nine months ended September 30, 2024 and 2023. Accrued Interest Receivable Accrued interest receivable for loans and leases and loans held-for-sale was $4.4 billion and $4.5 billion at September 30, 2024 and December 31, 2023 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, 2024, the Corporation reversed $213 million and $633 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 compared to $152 million and $409 million for the same periods in 2023. 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, 2024 and 2023, 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 2023 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 adequately be 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 2023 Annual Report on Form 10-K. The September 30, 2024 estimate for allowance for credit losses was based on various economic scenarios, including a baseline scenario derived from consensus estimates, an adverse scenario reflecting an extended moderate recession, a downside scenario reflecting continued inflation and interest rates with minimal rate cuts, a tail risk scenario similar to the severely adverse scenario used in stress testing and an upside scenario that considers the potential for improvement above the baseline scenario. The overall weighted economic outlook of the above scenarios has improved compared to the weighted economic outlook estimated as of December 31, 2023. The weighted economic outlook assumes that the U.S. average unemployment rate will be five percent by the fourth quarter of 2025 and will decrease to just below five percent by the fourth quarter of 2026. The weighted economic outlook assumes steady growth with U.S. real gross domestic product forecasted to grow at 1.4 percent and 1.9 percent year-over-year in the fourth quarters of 2025 and 2026. The allowance for credit losses decreased $200 million from December 31, 2023 to $14.4 billion at September 30, 2024. The change in the allowance for credit losses was comprised of a net decrease of $91 million in the allowance for loan and lease losses and a decrease of $109 million in the reserve for unfunded lending commitments. The decline in the allowance for credit losses was attributed to decreases in the commercial portfolio of $249 million and the consumer real estate portfolio of $101 million, partially offset by an increase in the credit card and other consumer portfolios of $150 million. The provision for credit losses increased $308 million to $1.5 billion, and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio. Outstanding loans and leases excluding loans accounted for under the fair value option increased $21.5 billion during the nine months ended September 30, 2024 primarily driven by commercial, which increased $21.2 billion due to broad-based growth. 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, 2024 Allowance for loan and lease losses, July 1 $ 347  $ 8,167  $ 4,724  $ 13,238  Loans and leases charged off (15) (1,256) (529) (1,800) Recoveries of loans and leases previously charged off 22  205  39  266  Net charge-offs 7  (1,051) (490) (1,534) Provision for loan and lease losses (45) 1,167  425  1,547  Other —  1  (1) —  Allowance for loan and lease losses, September 30 309  8,284  4,658  13,251  Reserve for unfunded lending commitments, July 1 55  —  1,049  1,104  Provision for unfunded lending commitments 3  —  (8) (5) Other —  —  1  1  Reserve for unfunded lending commitments, September 30 58  —  1,042  1,100  Allowance for credit losses, September 30 $ 367  $ 8,284  $ 5,700  $ 14,351  Three Months Ended September 30, 2023 Allowance for loan and lease losses, July 1 427  7,323  5,200  12,950  Loans and leases charged off (15) (994) (178) (1,187) Recoveries of loans and leases previously charged off 27  178  51  256  Net charge-offs 12  (816) (127) (931) Provision for loan and lease losses (28) 1,247  49  1,268  Other 1  1  (2) —  Allowance for loan and lease losses, September 30 412  7,755  5,120  13,287  Reserve for unfunded lending commitments, July 1 86  —  1,302  1,388  Provision for unfunded lending commitments (1) —  (33) (34) Other —  —  (1) (1) Reserve for unfunded lending commitments, September 30 85  —  1,268  1,353  Allowance for credit losses, September 30 $ 497  $ 7,755  $ 6,388  $ 14,640  (Dollars in millions) Nine Months Ended September 30, 2024 Allowance for loan and lease losses, January 1 $ 386  $ 8,134  $ 4,822  $ 13,342  Loans and leases charged off (34) (3,748) (1,535) (5,317) Recoveries of loans and leases previously charged off 65  586  101  752  Net charge-offs 31  (3,162) (1,434) (4,565) Provision for loan and lease losses (109) 3,311  1,277  4,479  Other 1  1  (7) (5) Allowance for loan and lease losses, September 30 309  8,284  4,658  13,251  Reserve for unfunded lending commitments, January 1 82  —  1,127  1,209  Provision for unfunded lending commitments (24) —  (86) (110) Other —  —  1  1  Reserve for unfunded lending commitments, September 30 58  —  1,042  1,100  Allowance for credit losses, September 30 $ 367  $ 8,284  $ 5,700  $ 14,351  Nine Months Ended September 30, 2023 Allowance for loan and lease losses, December 31 $ 420  $ 6,817  $ 5,445  $ 12,682  January 1, 2023 adoption of credit loss standard (67) (109) (67) (243) Allowance for loan and lease losses, January 1 353  6,708  5,378  12,439  Loans and leases charged off (44) (2,779) (544) (3,367) Recoveries of loans and leases previously charged off 81  565  114  760  Net charge-offs 37  (2,214) (430) (2,607) Provision for loan and lease losses 14  3,259  204  3,477  Other 8  2  (32) (22) Allowance for loan and lease losses, September 30 412  7,755  5,120  13,287  Reserve for unfunded lending commitments, January 1 94  —  1,446  1,540  Provision for unfunded lending commitments (9) —  (178) (187) Reserve for unfunded lending commitments, September 30 85  —  1,268  1,353  Allowance for credit losses, September 30 $ 497  $ 7,755  $ 6,388  $ 14,640