Annual report pursuant to Section 13 and 15(d)

Allowance for Credit Losses (Tables)

v3.8.0.1
Allowance for Credit Losses (Tables)
12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Changes in the Allowance for Credit Losses
The table below summarizes the changes in the allowance for credit losses by portfolio segment for 2017, 2016 and 2015.
 
 
 
 
 
 
 
 
 
Consumer
Real Estate (1)
 
Credit Card and Other Consumer
 
Commercial
 
Total
Allowance
(Dollars in millions)
2017
Allowance for loan and lease losses, January 1
$
2,750

 
$
3,229

 
$
5,258

 
$
11,237

Loans and leases charged off
(770
)
 
(3,774
)
 
(1,075
)
 
(5,619
)
Recoveries of loans and leases previously charged off
657

 
809

 
174

 
1,640

Net charge-offs (2)
(113
)
 
(2,965
)
 
(901
)
 
(3,979
)
Write-offs of PCI loans (3)
(207
)
 

 

 
(207
)
Provision for loan and lease losses (4)
(710
)
 
3,437

 
654

 
3,381

Other (5)

 
(38
)
 
(1
)
 
(39
)
Allowance for loan and lease losses, December 31 
1,720

 
3,663

 
5,010

 
10,393

Reserve for unfunded lending commitments, January 1

 

 
762

 
762

Provision for unfunded lending commitments

 

 
15

 
15

Reserve for unfunded lending commitments, December 31

 

 
777

 
777

Allowance for credit losses, December 31 
$
1,720

 
$
3,663

 
$
5,787

 
$
11,170

 
2016
Allowance for loan and lease losses, January 1
$
3,914

 
$
3,471

 
$
4,849

 
$
12,234

Loans and leases charged off
(1,155
)
 
(3,553
)
 
(740
)
 
(5,448
)
Recoveries of loans and leases previously charged off
619

 
770

 
238

 
1,627

Net charge-offs (2)
(536
)
 
(2,783
)
 
(502
)
 
(3,821
)
Write-offs of PCI loans (3)
(340
)
 

 

 
(340
)
Provision for loan and lease losses (4)
(258
)
 
2,826

 
1,013

 
3,581

Other (5)
(30
)
 
(42
)
 
(102
)
 
(174
)
Total allowance for loan and lease losses, December 31
2,750

 
3,472

 
5,258

 
11,480

Less: Allowance included in assets of business held for sale (6)

 
(243
)
 

 
(243
)
Allowance for loan and lease losses, December 31
2,750

 
3,229

 
5,258

 
11,237

Reserve for unfunded lending commitments, January 1

 

 
646

 
646

Provision for unfunded lending commitments

 

 
16

 
16

Other (5)

 

 
100

 
100

Reserve for unfunded lending commitments, December 31

 

 
762

 
762

Allowance for credit losses, December 31
$
2,750

 
$
3,229

 
$
6,020

 
$
11,999

 
2015
Allowance for loan and lease losses, January 1
$
5,935

 
$
4,047

 
$
4,437

 
$
14,419

Loans and leases charged off
(1,841
)
 
(3,620
)
 
(644
)
 
(6,105
)
Recoveries of loans and leases previously charged off
732

 
813

 
222

 
1,767

Net charge-offs
(1,109
)
 
(2,807
)
 
(422
)
 
(4,338
)
Write-offs of PCI loans (3)
(808
)
 

 

 
(808
)
Provision for loan and lease losses (4)
(70
)
 
2,278

 
835

 
3,043

Other (5)
(34
)
 
(47
)
 
(1
)
 
(82
)
Allowance for loan and lease losses, December 31
3,914

 
3,471

 
4,849

 
12,234

Reserve for unfunded lending commitments, January 1

 

 
528

 
528

Provision for unfunded lending commitments

 

 
118

 
118

Reserve for unfunded lending commitments, December 31

 

 
646

 
646

Allowance for credit losses, December 31
$
3,914

 
$
3,471

 
$
5,495

 
$
12,880

(1) 
Includes valuation allowance associated with the PCI loan portfolio.
(2) 
Includes net charge-offs related to the non-U.S. credit card loan portfolio, which was included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016. In 2017, the Corporation sold its non-U.S. consumer credit card business.
(3) 
Includes write-offs of $87 million, $60 million and $234 million associated with the sale of PCI loans in 2017, 2016 and 2015, respectively.
(4) 
Includes provision expense of $76 million and a benefit of $45 million and $40 million associated with the PCI loan portfolio in 2017, 2016 and 2015, respectively.
(5) 
Primarily represents the net impact of portfolio sales, consolidations and deconsolidations, foreign currency translation adjustments, transfers to held-for-sale and certain other reclassifications.
(6) 
Represents allowance for loan and lease losses related to the non-U.S. credit card loan portfolio, which was sold in 2017.
The table below presents the allowance and the carrying value of outstanding loans and leases by portfolio segment at December 31, 2017 and 2016.
 
 
 
 
 
 
 
 
Allowance and Carrying Value by Portfolio Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consumer
Real Estate
 
Credit Card and Other Consumer
 
Commercial
 
Total
(Dollars in millions)
December 31, 2017
Impaired loans and troubled debt restructurings (1)
 

 
 

 
 

 
 

Allowance for loan and lease losses (2)
$
348

 
$
125

 
$
190

 
$
663

Carrying value (3)
12,554

 
490

 
2,407

 
15,451

Allowance as a percentage of carrying value
2.77
%
 
25.51
%
 
7.89
%
 
4.29
%
Loans collectively evaluated for impairment
 

 
 

 
 

 
 

Allowance for loan and lease losses
$
1,083

 
$
3,538

 
$
4,820

 
$
9,441

Carrying value (3, 4)
238,284

 
192,303

 
474,284

 
904,871

Allowance as a percentage of carrying value (4)
0.45
%
 
1.84
%
 
1.02
%
 
1.04
%
Purchased credit-impaired loans
 

 
 
 
 

 
 

Valuation allowance
$
289

 
n/a

 
n/a

 
$
289

Carrying value gross of valuation allowance
10,717

 
n/a

 
n/a

 
10,717

Valuation allowance as a percentage of carrying value
2.70
%
 
n/a

 
n/a

 
2.70
%
Total
 

 
 

 
 

 
 

Allowance for loan and lease losses
$
1,720

 
$
3,663

 
$
5,010

 
$
10,393

Carrying value (3, 4)
261,555

 
192,793

 
476,691

 
931,039

Allowance as a percentage of carrying value (4)
0.66
%
 
1.90
%
 
1.05
%
 
1.12
%
 
December 31, 2016
Impaired loans and troubled debt restructurings (1)
 

 
 

 
 

 
 

Allowance for loan and lease losses (2)
$
356

 
$
189

 
$
273

 
$
818

Carrying value (3)
15,408

 
610

 
3,202

 
19,220

Allowance as a percentage of carrying value
2.31
%
 
30.98
%
 
8.53
%
 
4.26
%
Loans collectively evaluated for impairment
 

 
 

 
 

 
 
Allowance for loan and lease losses
$
1,975

 
$
3,283

 
$
4,985

 
$
10,243

Carrying value (3, 4)
229,094

 
197,470

 
449,290

 
875,854

Allowance as a percentage of carrying value (4)
0.86
%
 
1.66
%
 
1.11
%
 
1.17
%
Purchased credit-impaired loans
 

 
 
 
 

 
 
Valuation allowance
$
419

 
n/a

 
n/a

 
$
419

Carrying value gross of valuation allowance
13,738

 
n/a

 
n/a

 
13,738

Valuation allowance as a percentage of carrying value
3.05
%
 
n/a

 
n/a

 
3.05
%
Less: Assets of business held for sale (5)
 
 
 
 
 
 
 
Allowance for loan and lease losses (6)
n/a

 
$
(243
)
 
n/a

 
$
(243
)
Carrying value (3)
n/a

 
(9,214
)
 
n/a

 
(9,214
)
Total
 

 
 

 
 

 
 
Allowance for loan and lease losses
$
2,750

 
$
3,229

 
$
5,258

 
$
11,237

Carrying value (3, 4)
258,240

 
188,866

 
452,492

 
899,598

Allowance as a percentage of carrying value (4)
1.06
%
 
1.71
%
 
1.16
%
 
1.25
%
(1) 
Impaired loans include nonperforming commercial loans and all TDRs, including both commercial and consumer TDRs. Impaired loans exclude nonperforming consumer loans unless they are TDRs, and all consumer and commercial loans accounted for under the fair value option.
(2) 
Allowance for loan and lease losses includes $27 million related to impaired U.S. small business commercial at both December 31, 2017 and 2016.
(3) 
Amounts are presented gross of the allowance for loan and lease losses.
(4) 
Outstanding loan and lease balances and ratios do not include loans accounted for under the fair value option of $5.7 billion and $7.1 billion at December 31, 2017 and 2016.
(5) 
Represents allowance for loan and lease losses and loans related to the non-U.S. credit card loan portfolio, which was included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016. In 2017, the Corporation sold its non-U.S. consumer credit card business.
(6) 
Includes $61 million of allowance for loan and lease losses related to impaired loans and TDRs and $182 million related to loans collectively evaluated for impairment at December 31, 2016.
n/a = not applicable