| Changes in the 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, 2012 and 2011.
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Three Months Ended September 30, 2012 |
(Dollars in millions) |
Home Loans |
|
Credit Card
and Other
Consumer |
|
Commercial |
|
Total |
Allowance for loan and lease losses, July 1 |
$ |
19,964 |
|
|
$ |
7,024 |
|
|
$ |
3,300 |
|
|
$ |
30,288 |
|
Loans and leases charged off |
(2,480 |
) |
|
(1,721 |
) |
|
(492 |
) |
|
(4,693 |
) |
Recoveries of loans and leases previously charged off |
137 |
|
|
294 |
|
|
140 |
|
|
571 |
|
Net charge-offs |
(2,343 |
) |
|
(1,427 |
) |
|
(352 |
) |
|
(4,122 |
) |
Provision for loan and lease losses |
617 |
|
|
960 |
|
|
233 |
|
|
1,810 |
|
Write-off of home equity PCI loans |
(1,705 |
) |
|
— |
|
|
— |
|
|
(1,705 |
) |
Other (1)
|
1 |
|
|
(36 |
) |
|
(3 |
) |
|
(38 |
) |
Allowance for loan and lease losses, September 30 |
16,534 |
|
|
6,521 |
|
|
3,178 |
|
|
26,233 |
|
Reserve for unfunded lending commitments, July 1 |
— |
|
|
— |
|
|
574 |
|
|
574 |
|
Provision for unfunded lending commitments |
— |
|
|
— |
|
|
(36 |
) |
|
(36 |
) |
Other (2)
|
— |
|
|
— |
|
|
(20 |
) |
|
(20 |
) |
Reserve for unfunded lending commitments, September 30 |
— |
|
|
— |
|
|
518 |
|
|
518 |
|
Allowance for credit losses, September 30 |
$ |
16,534 |
|
|
$ |
6,521 |
|
|
$ |
3,696 |
|
|
$ |
26,751 |
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Three Months Ended September 30, 2011 |
Allowance for loan and lease losses, July 1 |
$ |
20,953 |
|
|
$ |
10,931 |
|
|
$ |
5,428 |
|
|
$ |
37,312 |
|
Loans and leases charged off |
(2,325 |
) |
|
(2,813 |
) |
|
(810 |
) |
|
(5,948 |
) |
Recoveries of loans and leases previously charged off |
220 |
|
|
443 |
|
|
199 |
|
|
862 |
|
Net charge-offs |
(2,105 |
) |
|
(2,370 |
) |
|
(611 |
) |
|
(5,086 |
) |
Provision for loan and lease losses |
1,958 |
|
|
1,508 |
|
|
8 |
|
|
3,474 |
|
Other (1)
|
(74 |
) |
|
(544 |
) |
|
— |
|
|
(618 |
) |
Allowance for loan and lease losses, September 30 |
20,732 |
|
|
9,525 |
|
|
4,825 |
|
|
35,082 |
|
Reserve for unfunded lending commitments, July 1 |
— |
|
|
— |
|
|
897 |
|
|
897 |
|
Provision for unfunded lending commitments |
— |
|
|
— |
|
|
(67 |
) |
|
(67 |
) |
Other (2)
|
— |
|
|
— |
|
|
(40 |
) |
|
(40 |
) |
Reserve for unfunded lending commitments, September 30 |
— |
|
|
— |
|
|
790 |
|
|
790 |
|
Allowance for credit losses, September 30 |
$ |
20,732 |
|
|
$ |
9,525 |
|
|
$ |
5,615 |
|
|
$ |
35,872 |
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Nine Months Ended September 30, 2012 |
Allowance for loan and lease losses, January 1 |
$ |
21,079 |
|
|
$ |
8,569 |
|
|
$ |
4,135 |
|
|
$ |
33,783 |
|
Loans and leases charged off |
(6,256 |
) |
|
(5,983 |
) |
|
(1,645 |
) |
|
(13,884 |
) |
Recoveries of loans and leases previously charged off |
400 |
|
|
1,131 |
|
|
549 |
|
|
2,080 |
|
Net charge-offs |
(5,856 |
) |
|
(4,852 |
) |
|
(1,096 |
) |
|
(11,804 |
) |
Provision for loan and lease losses |
3,061 |
|
|
2,893 |
|
|
153 |
|
|
6,107 |
|
Write-off of home equity PCI loans |
(1,705 |
) |
|
— |
|
|
— |
|
|
(1,705 |
) |
Other (1)
|
(45 |
) |
|
(89 |
) |
|
(14 |
) |
|
(148 |
) |
Allowance for loan and lease losses, September 30 |
16,534 |
|
|
6,521 |
|
|
3,178 |
|
|
26,233 |
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Reserve for unfunded lending commitments, January 1 |
— |
|
|
— |
|
|
714 |
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|
714 |
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Provision for unfunded lending commitments |
— |
|
|
— |
|
|
(142 |
) |
|
(142 |
) |
Other (2)
|
— |
|
|
— |
|
|
(54 |
) |
|
(54 |
) |
Reserve for unfunded lending commitments, September 30 |
— |
|
|
— |
|
|
518 |
|
|
518 |
|
Allowance for credit losses, September 30 |
$ |
16,534 |
|
|
$ |
6,521 |
|
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$ |
3,696 |
|
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$ |
26,751 |
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Nine Months Ended September 30, 2011 |
Allowance for loan and lease losses, January 1 |
$ |
19,252 |
|
|
$ |
15,463 |
|
|
$ |
7,170 |
|
|
$ |
41,885 |
|
Loans and leases charged off |
(7,187 |
) |
|
(9,789 |
) |
|
(2,475 |
) |
|
(19,451 |
) |
Recoveries of loans and leases previously charged off |
585 |
|
|
1,409 |
|
|
678 |
|
|
2,672 |
|
Net charge-offs |
(6,602 |
) |
|
(8,380 |
) |
|
(1,797 |
) |
|
(16,779 |
) |
Provision for loan and lease losses |
8,155 |
|
|
3,016 |
|
|
(521 |
) |
|
10,650 |
|
Other (1)
|
(73 |
) |
|
(574 |
) |
|
(27 |
) |
|
(674 |
) |
Allowance for loan and lease losses, September 30 |
20,732 |
|
|
9,525 |
|
|
4,825 |
|
|
35,082 |
|
Reserve for unfunded lending commitments, January 1 |
— |
|
|
— |
|
|
1,188 |
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|
1,188 |
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Provision for unfunded lending commitments |
— |
|
|
— |
|
|
(174 |
) |
|
(174 |
) |
Other (2)
|
— |
|
|
— |
|
|
(224 |
) |
|
(224 |
) |
Reserve for unfunded lending commitments, September 30 |
— |
|
|
— |
|
|
790 |
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|
790 |
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Allowance for credit losses, September 30 |
$ |
20,732 |
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$ |
9,525 |
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$ |
5,615 |
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$ |
35,872 |
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(1) |
Represents primarily the impact of portfolio sales, deconsolidations and foreign currency translation adjustments. |
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(2) |
Represents primarily accretion of the Merrill Lynch purchase accounting adjustment and the impact of funding previously unfunded positions. |
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| Carrying Value of Outstanding Loans and Leases |
The table below presents the allowance and the carrying value of outstanding loans and leases by portfolio segment at September 30, 2012 and December 31, 2011.
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Allowance and Carrying Value by Portfolio Segment |
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September 30, 2012 |
(Dollars in millions) |
Home Loans |
|
Credit Card
and Other
Consumer |
|
Commercial |
|
Total |
Impaired loans and troubled debt restructurings (1)
|
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Allowance for loan and lease losses (2)
|
$ |
1,689 |
|
|
$ |
1,423 |
|
|
$ |
391 |
|
|
$ |
3,503 |
|
Carrying value (3)
|
27,576 |
|
|
4,487 |
|
|
5,714 |
|
|
37,777 |
|
Allowance as a percentage of carrying value |
6.12 |
% |
|
31.71 |
% |
|
6.84 |
% |
|
9.27 |
% |
Loans collectively evaluated for impairment |
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Allowance for loan and lease losses |
$ |
7,764 |
|
|
$ |
5,098 |
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$ |
2,787 |
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$ |
15,649 |
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Carrying value (3, 4)
|
314,052 |
|
|
187,113 |
|
|
318,607 |
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|
819,772 |
|
Allowance as a percentage of carrying value (4)
|
2.47 |
% |
|
2.72 |
% |
|
0.87 |
% |
|
1.91 |
% |
Purchased credit-impaired loans |
|
|
|
|
|
|
|
Valuation allowance |
$ |
7,081 |
|
|
n/a |
|
|
n/a |
|
|
$ |
7,081 |
|
Carrying value gross of valuation allowance |
27,848 |
|
|
n/a |
|
|
n/a |
|
|
27,848 |
|
Valuation allowance as a percentage of carrying value |
25.43 |
% |
|
n/a |
|
|
n/a |
|
|
25.43 |
% |
Total |
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|
|
Allowance for loan and lease losses |
$ |
16,534 |
|
|
$ |
6,521 |
|
|
$ |
3,178 |
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$ |
26,233 |
|
Carrying value (3, 4)
|
369,476 |
|
|
191,600 |
|
|
324,321 |
|
|
885,397 |
|
Allowance as a percentage of carrying value (4)
|
4.47 |
% |
|
3.40 |
% |
|
0.98 |
% |
|
2.96 |
% |
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|
December 31, 2011 |
Impaired loans and troubled debt restructurings (1)
|
|
|
|
|
|
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|
Allowance for loan and lease losses (2)
|
$ |
1,946 |
|
|
$ |
2,410 |
|
|
$ |
545 |
|
|
$ |
4,901 |
|
Carrying value (3)
|
21,462 |
|
|
7,100 |
|
|
8,113 |
|
|
36,675 |
|
Allowance as a percentage of carrying value |
9.07 |
% |
|
33.94 |
% |
|
6.71 |
% |
|
13.36 |
% |
Loans collectively evaluated for impairment |
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|
Allowance for loan and lease losses |
$ |
10,674 |
|
|
$ |
6,159 |
|
|
$ |
3,590 |
|
|
$ |
20,423 |
|
Carrying value (3, 4)
|
344,821 |
|
|
202,010 |
|
|
302,089 |
|
|
848,920 |
|
Allowance as a percentage of carrying value (4)
|
3.10 |
% |
|
3.05 |
% |
|
1.19 |
% |
|
2.41 |
% |
Purchased credit-impaired loans |
|
|
|
|
|
|
|
Valuation allowance |
$ |
8,459 |
|
|
n/a |
|
|
n/a |
|
|
$ |
8,459 |
|
Carrying value gross of valuation allowance |
31,801 |
|
|
n/a |
|
|
n/a |
|
|
31,801 |
|
Valuation allowance as a percentage of carrying value |
26.60 |
% |
|
n/a |
|
|
n/a |
|
|
26.60 |
% |
Total |
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|
Allowance for loan and lease losses |
$ |
21,079 |
|
|
$ |
8,569 |
|
|
$ |
4,135 |
|
|
$ |
33,783 |
|
Carrying value (3, 4)
|
398,084 |
|
|
209,110 |
|
|
310,202 |
|
|
917,396 |
|
Allowance as a percentage of carrying value (4)
|
5.30 |
% |
|
4.10 |
% |
|
1.33 |
% |
|
3.68 |
% |
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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) |
Commercial impaired allowance for loan and lease losses includes $109 million and $172 million at September 30, 2012 and December 31, 2011 related to U.S. small business commercial renegotiated TDR loans.
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(3) |
Amounts are presented gross of the allowance for loan and lease losses. |
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(4) |
Outstanding loan and lease balances and ratios do not include loans accounted for under the fair value option of $7.6 billion and $8.8 billion at September 30, 2012 and December 31, 2011.
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n/a = not applicable
|