| Allowance for Credit Losses |
Allowance for Credit Losses
The table below summarizes the changes in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2018 and 2017.
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Consumer
Real Estate (1)
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Credit Card and Other Consumer |
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Commercial |
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Total
Allowance |
(Dollars in millions) |
Three Months Ended September 30, 2018 |
Allowance for loan and lease losses, July 1 |
$ |
1,366 |
|
|
$ |
3,774 |
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$ |
4,910 |
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$ |
10,050 |
|
Loans and leases charged off |
(155 |
) |
|
(992 |
) |
|
(189 |
) |
|
(1,336 |
) |
Recoveries of loans and leases previously charged off |
163 |
|
|
208 |
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|
33 |
|
|
404 |
|
Net charge-offs |
8 |
|
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(784 |
) |
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(156 |
) |
|
(932 |
) |
Write-offs of PCI loans (2)
|
(95 |
) |
|
— |
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— |
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|
(95 |
) |
Provision for loan and lease losses (3)
|
(119 |
) |
|
829 |
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|
1 |
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|
711 |
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Other (4)
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(2 |
) |
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3 |
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(1 |
) |
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— |
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Allowance for loan and lease losses, September 30 |
1,158 |
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|
3,822 |
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4,754 |
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9,734 |
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Reserve for unfunded lending commitments, July 1 |
— |
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— |
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787 |
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|
787 |
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Provision for unfunded lending commitments |
— |
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— |
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5 |
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5 |
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Reserve for unfunded lending commitments, September 30 |
— |
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— |
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|
792 |
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|
792 |
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Allowance for credit losses, September 30 |
$ |
1,158 |
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$ |
3,822 |
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$ |
5,546 |
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$ |
10,526 |
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Three Months Ended September 30, 2017 |
Allowance for loan and lease losses, July 1 |
$ |
2,309 |
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$ |
3,386 |
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$ |
5,180 |
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$ |
10,875 |
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Loans and leases charged off |
(231 |
) |
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(919 |
) |
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(212 |
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(1,362 |
) |
Recoveries of loans and leases previously charged off |
230 |
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|
189 |
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|
43 |
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|
462 |
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Net charge-offs |
(1 |
) |
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(730 |
) |
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(169 |
) |
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(900 |
) |
Write-offs of PCI loans (2)
|
(73 |
) |
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— |
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— |
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(73 |
) |
Provision for loan and lease losses (3)
|
(204 |
) |
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934 |
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|
99 |
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|
829 |
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Other (4)
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1 |
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(40 |
) |
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1 |
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(38 |
) |
Allowance for loan and lease losses, September 30 |
2,032 |
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3,550 |
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5,111 |
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10,693 |
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Reserve for unfunded lending commitments, July 1 |
— |
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— |
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757 |
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757 |
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Provision for unfunded lending commitments |
— |
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— |
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5 |
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5 |
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Reserve for unfunded lending commitments, September 30 |
— |
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— |
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762 |
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|
762 |
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Allowance for credit losses, September 30 |
$ |
2,032 |
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$ |
3,550 |
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$ |
5,873 |
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$ |
11,455 |
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Nine Months Ended September 30, 2018 |
Allowance for loan and lease losses, January 1 |
$ |
1,720 |
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$ |
3,663 |
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$ |
5,010 |
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$ |
10,393 |
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Loans and leases charged off |
(466 |
) |
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(3,031 |
) |
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(513 |
) |
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(4,010 |
) |
Recoveries of loans and leases previously charged off |
440 |
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|
621 |
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|
110 |
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1,171 |
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Net charge-offs |
(26 |
) |
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(2,410 |
) |
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(403 |
) |
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(2,839 |
) |
Write-offs of PCI loans (2)
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(166 |
) |
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— |
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— |
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(166 |
) |
Provision for loan and lease losses (3)
|
(368 |
) |
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2,583 |
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147 |
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2,362 |
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Other (4)
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(2 |
) |
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(14 |
) |
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— |
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(16 |
) |
Allowance for loan and lease losses, September 30 |
1,158 |
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3,822 |
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4,754 |
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9,734 |
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Reserve for unfunded lending commitments, January 1 |
— |
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— |
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|
777 |
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|
777 |
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Provision for unfunded lending commitments |
— |
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— |
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15 |
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15 |
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Reserve for unfunded lending commitments, September 30 |
— |
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— |
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792 |
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|
792 |
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Allowance for credit losses, September 30 |
$ |
1,158 |
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$ |
3,822 |
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$ |
5,546 |
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$ |
10,526 |
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Nine Months Ended September 30, 2017 |
Allowance for loan and lease losses, January 1 |
$ |
2,750 |
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$ |
3,229 |
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$ |
5,258 |
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$ |
11,237 |
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Loans and leases charged off |
(633 |
) |
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(2,819 |
) |
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(570 |
) |
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(4,022 |
) |
Recoveries of loans and leases previously charged off |
520 |
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|
623 |
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|
137 |
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1,280 |
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Net charge-offs |
(113 |
) |
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(2,196 |
) |
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(433 |
) |
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(2,742 |
) |
Write-offs of PCI loans (2)
|
(161 |
) |
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— |
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— |
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(161 |
) |
Provision for loan and lease losses (3)
|
(445 |
) |
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2,553 |
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287 |
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2,395 |
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Other (4)
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1 |
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(36 |
) |
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(1 |
) |
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(36 |
) |
Allowance for loan and lease losses, September 30 |
2,032 |
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3,550 |
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5,111 |
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10,693 |
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Reserve for unfunded lending commitments, January 1 and September 30 |
— |
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— |
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|
762 |
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|
762 |
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Allowance for credit losses, September 30 |
$ |
2,032 |
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$ |
3,550 |
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$ |
5,873 |
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$ |
11,455 |
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(1) |
Includes valuation allowance associated with the PCI loan portfolio. |
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(2) |
Includes write-offs associated with the sale of PCI loans of $71 million and $88 million during the three and nine months ended September 30, 2018 compared to $45 million and $80 million for the same periods in 2017.
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(3) |
Includes provision expense associated with the PCI loan portfolio of $53 million and $28 million during the three and nine months ended September 30, 2018 compared to $12 million and $56 million for the same periods in 2017.
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(4) |
Primarily represents the net impact of portfolio sales, consolidations and deconsolidations, foreign currency translation adjustments, transfers to held for sale and certain other reclassifications. |
The table below presents the allowance and the carrying value of outstanding loans and leases by portfolio segment at September 30, 2018 and December 31, 2017.
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Allowance and Carrying Value by Portfolio Segment |
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Consumer
Real Estate |
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Credit Card and Other Consumer |
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Commercial |
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Total |
(Dollars in millions) |
September 30, 2018 |
Impaired loans and troubled debt restructurings (1)
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Allowance for loan and lease losses |
$ |
299 |
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$ |
143 |
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$ |
165 |
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$ |
607 |
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Carrying value (2)
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9,675 |
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|
541 |
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2,194 |
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|
12,410 |
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Allowance as a percentage of carrying value |
3.09 |
% |
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26.43 |
% |
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7.52 |
% |
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4.89 |
% |
Loans collectively evaluated for impairment |
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Allowance for loan and lease losses |
$ |
709 |
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$ |
3,679 |
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$ |
4,589 |
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$ |
8,977 |
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Carrying value (2, 3)
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242,594 |
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185,829 |
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476,085 |
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904,508 |
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Allowance as a percentage of carrying value (3)
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0.29 |
% |
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1.98 |
% |
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0.96 |
% |
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0.99 |
% |
Purchased credit-impaired loans |
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Valuation allowance |
$ |
150 |
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n/a |
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n/a |
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$ |
150 |
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Carrying value gross of valuation allowance |
7,152 |
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n/a |
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n/a |
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7,152 |
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Valuation allowance as a percentage of carrying value |
2.10 |
% |
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n/a |
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n/a |
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2.10 |
% |
Total |
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Allowance for loan and lease losses |
$ |
1,158 |
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$ |
3,822 |
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$ |
4,754 |
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$ |
9,734 |
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Carrying value (2, 3)
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259,421 |
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186,370 |
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|
478,279 |
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|
924,070 |
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Allowance as a percentage of carrying value (3)
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0.45 |
% |
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2.05 |
% |
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0.99 |
% |
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1.05 |
% |
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December 31, 2017 |
Impaired loans and troubled debt restructurings (1)
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Allowance for loan and lease losses |
$ |
348 |
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$ |
125 |
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$ |
190 |
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$ |
663 |
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Carrying value (2)
|
12,554 |
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|
490 |
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|
2,407 |
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|
15,451 |
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Allowance as a percentage of carrying value |
2.77 |
% |
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25.51 |
% |
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7.89 |
% |
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4.29 |
% |
Loans collectively evaluated for impairment |
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Allowance for loan and lease losses |
$ |
1,083 |
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$ |
3,538 |
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$ |
4,820 |
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$ |
9,441 |
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Carrying value (2, 3)
|
238,284 |
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|
192,303 |
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|
474,284 |
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|
904,871 |
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Allowance as a percentage of carrying value (3)
|
0.45 |
% |
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1.84 |
% |
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1.02 |
% |
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1.04 |
% |
Purchased credit-impaired loans |
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Valuation allowance |
$ |
289 |
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n/a |
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n/a |
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$ |
289 |
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Carrying value gross of valuation allowance |
10,717 |
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n/a |
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n/a |
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|
10,717 |
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Valuation allowance as a percentage of carrying value |
2.70 |
% |
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n/a |
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n/a |
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2.70 |
% |
Total |
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Allowance for loan and lease losses |
$ |
1,720 |
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$ |
3,663 |
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$ |
5,010 |
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$ |
10,393 |
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Carrying value (2, 3)
|
261,555 |
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|
192,793 |
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|
476,691 |
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|
931,039 |
|
Allowance as a percentage of carrying value (3)
|
0.66 |
% |
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1.90 |
% |
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1.05 |
% |
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1.12 |
% |
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(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. |
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(2) |
Amounts are presented gross of the allowance for loan and lease losses. |
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(3) |
Outstanding loan and lease balances and ratios do not include loans accounted for under the fair value option of $5.7 billion at both September 30, 2018 and December 31, 2017.
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n/a = not applicable
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