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ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK | 12 Months Ended
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Dec. 31, 2020
Receivables [Abstract] |
ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK | NOTE 5 - ALLOWANCE FOR CREDIT LOSSES, NONPERFORMING ASSETS, AND CONCENTRATIONS OF CREDIT RISK Allowance for Credit Losses Management’s estimate of expected credit losses in the Company’s loan and lease portfolios is recorded in the ALLL and the reserve for unfunded lending commitments (collectively the ACL). Through December 31, 2019 the ACL reserve was management’s best estimate of incurred probable losses in the Company’s loan and lease portfolios based on reviews of certain individual loans and leases, analyzing changes in the composition, size and delinquency of the portfolio, reviewing previous loss experience and considering current and anticipated economic factors. The Company’s methodology for determining the qualitative component through December 31, 2019 included a statistical analysis of prior charge-off rates and an assessment of factors affecting the determination of incurred losses in the loan and lease portfolio. Such factors included trends in economic conditions, loan growth, back testing results, credit underwriting policy exceptions, regulatory and audit findings, and peer comparisons. Upon adoption of CECL effective January 1, 2020, the Company’s ACL reserve methodology changed to estimate expected credit losses over the contractual life of loans and leases. The ACL is maintained at a level the Company believes to be appropriate to absorb expected lifetime credit losses over the contractual life of the loan and lease portfolios and on the unfunded lending commitments. The determination of the ACL is based on periodic evaluation of the loan and lease portfolios and unfunded lending commitments that are not unconditionally cancellable considering a number of relevant underlying factors, including key assumptions and evaluation of quantitative and qualitative information. Key assumptions used in the ACL measurement process include the use of a two-year reasonable and supportable economic forecast period followed by a one-year reversion period to historical credit loss information. The evaluation of quantitative and qualitative information is performed through assessments of groups of assets that share similar risk characteristics and certain individual loans and leases that do not share similar risk characteristics with the collective group. Loans are grouped generally by product type (e.g., commercial and industrial, commercial real estate, residential mortgage, etc.), and significant loan portfolios are assessed for credit losses using econometric models. The quantitative evaluation of the adequacy of the ACL utilizes a single economic forecast as its foundation, and is primarily based on econometric models that use known or estimated data as of the balance sheet date and forecasted data over the reasonable and supportable period. Known and estimated data include current PD, LGD and EAD (for commercial), timing and amount of expected draws (for unfunded lending commitments), FICO, LTV, term and time on books (for retail loans), mix and level of loan balances, delinquency levels, assigned risk ratings, previous loss experience, current business conditions, amounts and timing of expected future cash flows, and factors particular to a specific commercial credit such as competition, business and management performance. Forward-looking economic assumptions include real gross domestic product, unemployment rate, interest rate curve, and changes in collateral values. This data is aggregated to estimate expected credit losses over the contractual life of the loans and leases, adjusted for expected prepayments. In highly volatile economic environments historical information, such as commercial customer financial statements or consumer credit ratings, may not be as important to estimating future expected losses as forecasted inputs to the models. The ACL may also be affected materially by a variety of qualitative factors that the Company considers to reflect current judgment of various events and risks that are not measured in the statistical procedures including uncertainty related to the economic forecasts used in the modeled credit loss estimates, loan growth, back testing results, credit underwriting policy exceptions, regulatory and audit findings, and peer comparisons. The qualitative allowance is further informed for certain industry sectors or loan classes by alternative scenarios to support the period-end ACL balance. The measurement process results in specific or pooled allowances for loans, leases and unfunded lending commitments, and qualitative allowances that are judgmentally determined and applied across the portfolio. There are certain loan portfolios that may not need an econometric model to enable the Company to calculate management’s best estimate of the expected credit losses. Less data intensive, non-modeled approaches to estimating losses are considered more efficient and practical for portfolios that have lower levels of outstanding balances (e.g., runoff or closed portfolios, new products or products that are not significant to the Company’s overall credit risk exposure). Loans and leases that do not share similar risk characteristics are individually assessed for expected credit losses. Nonaccruing commercial and industrial, and commercial real estate loans with an outstanding balance of $5 million or greater and all commercial and industrial, and commercial real estate TDRs (regardless of size) are assessed on an individual loan level basis. Generally, the measurement of ACL on individual loans and leases is the present value of its future cash flows or the fair value of its underlying collateral, if the loan or lease is collateral dependent. Loans that are deemed to be collateral dependent are written down to the fair value, less costs to sell, if sale of the collateral is expected as of the evaluation date and are reassessed each subsequent period to determine if a change to the ACL is required. Subsequent evaluations may result in an increase or decrease to the ACL, based on a corresponding change in the fair value of the collateral during the period. Any subsequent decrease to the ACL (because of an increase to the collateral-dependent loan’s fair value) is limited to the total amount previously written off for that loan. For retail TDRs that are not collateral dependent, the ACL is developed using the present value of expected future cash flows compared to the amortized cost basis in the loans. Expected re-default factors are considered in this analysis. Retail TDRs that are deemed collateral dependent are written down to fair market value less cost to sell. Expected recoveries are considered in management’s estimate of the ACL and may result in a negative adjustment (i.e., reduction) to the ACL balance. A loan is collateral dependent if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty as of the evaluation date. Generally, repayment would be expected to be provided substantially by the sale or continued operation of the underlying collateral if cash flows to repay the loan from all other available sources (including guarantors) are expected to be no more than nominal. If repayment is dependent only on the operation of the collateral, the fair value of the collateral would not be adjusted for estimated costs to sell. If a loan is considered collateral dependent, the ACL is calculated as the difference between the fair value of collateral (adjusted for the costs to sell if the sale of the collateral is expected) and the amortized cost basis as of the evaluation date. It is possible to have a negative ACL for a collateral dependent loan if the fair value of the collateral increases in a subsequent reporting period. The negative ACL cannot exceed the total amount previously charged off. Accrued interest receivable on loans and leases is excluded from asset balances used to calculate the ACL. All accrued and uncollected interest is immediately reversed against interest income when a loan or lease is placed on nonaccrual status. Uncollectible interest is written off timely in accordance with regulatory guidelines. Generally, loans and leases are placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection is insufficient to warrant further accrual. Residential mortgages are placed on nonaccrual status when contractually past due 120 days or more, or sooner if deemed collateral dependent, unless guaranteed by the Federal Housing Administration. Residential mortgages that received extended forbearance and were subsequently modified as a result of COVID-19 will be placed on nonaccrual sooner than those that were not on extended forbearance, and will return to accrual status only following a sustained period of repayment performance. Loans in COVID-19 pandemic-related forbearance programs continue to accrue interest during the forbearance period; a reserve is established for interest income expected to be uncollectible following forbearance. Accrued interest reversed against interest income for the year ended December 31, 2020 was $8 million and $19 million for commercial and retail, respectively. The Company estimates expected credit losses associated with off-balance sheet financial instruments such as standby letters of credit, financial guarantees and unfunded loan commitments that are not unconditionally cancellable. Off-balance sheet financial instruments are subject to individual reviews and are analyzed and segregated by risk according to the Company’s internal risk rating scale. These risk classifications, in conjunction with historical loss experience, current and future economic conditions, timing and amount of expected draws, and performance trends within specific portfolio segments, result in the estimate of the reserve for unfunded lending commitments. The Company does not recognize a reserve for future draws from credit lines that are unconditionally cancellable (e.g., credit cards). The ALLL and the reserve for unfunded lending commitments are reported on the Consolidated Balance Sheets in the allowance for loan and lease losses and in other liabilities, respectively. Provision for credit losses related to the loan and lease portfolios and the unfunded lending commitments are reported in the Consolidated Statements of Operations as provision for credit losses. Loan Charge-Offs Commercial loans are charged off when available information indicates that a loan or portion thereof is determined to be uncollectible, including situations where a loan is determined to be both impaired and collateral-dependent. The determination of whether to recognize a charge-off involves many factors, including the prioritization of the Company’s claim in bankruptcy, expectations of the workout/restructuring of the loan and valuation of the borrower’s equity or the loan collateral. A loan is considered to be collateral-dependent when repayment of the loan is expected to be provided solely by the underlying collateral, rather than by cash flows from the borrower’s operations, income or other resources. Retail loans are generally fully charged-off or written down to the net realizable value of the underlying collateral, with an offset to the ALLL, upon reaching specified stages of delinquency in accordance with standards established by the FFIEC. Residential real estate loans, credit card loans and unsecured open end loans are generally charged off in the month in which the account becomes 180 days past due. Auto loans, education loans and unsecured closed end loans are generally charged off in the month in which the account becomes 120 days past due. Certain retail loans will be charged off or charged down to their net realizable value earlier than the FFIEC charge-off standards in the following circumstances: •Loans modified in a TDR that are determined to be collateral-dependent. •Residential real estate loans that received extended forbearance and were subsequently modified as a result of COVID-19 •Loans to borrowers who have experienced an event (e.g., bankruptcy) that suggests a loss is either known or highly certain. ◦Residential real estate and auto loans are charged down to the net realizable value within 60 days of receiving notification of the bankruptcy filing, or when the loan becomes 60 days past due if repayment is likely to occur. ◦Credit card loans are fully charged off within 60 days of receiving notification of the bankruptcy filing or other event. ◦Education loans are generally charged off when the loan becomes 60 days past due after receiving notification of a bankruptcy. •Auto loans are written down to net realizable value upon repossession of the collateral. The following table present a summary of changes in the ACL for the year ended December 31, 2020:
| Year Ended December 31, 2020
(in millions) | Commercial | Retail | Total
Allowance for loan and lease losses, beginning of period | $674 |  | $578 |  | $1,252 |
Cumulative effect of change in accounting principle | (176) |  | 629 |  | 453 |
Allowance for loan and lease losses, beginning of period, adjusted | 498 |  | 1,207 |  | 1,705 |
Charge-offs | (437) |  | (406) |  | (843) |
Recoveries | 12 |  | 138 |  | 150 |
Net charge-offs | (425) |  | (268) |  | (693) |
Provision charged to income | 1,160 |  | 271 |  | 1,431 |
Allowance for loan and lease losses, end of period | 1,233 |  | 1,210 |  | 2,443 |
Reserve for unfunded lending commitments, beginning of period | 44 |  | — |  | 44 |
Cumulative effect of change in accounting principle | (3) |  | 1 |  | (2) |
Reserve for unfunded lending commitments, beginning of period, adjusted | 41 |  | 1 |  | 42 |
Provision for unfunded lending commitments | 145 |  | 40 |  | 185 |
Reserve for unfunded lending commitments, end of period | 186 |  | 41 |  | 227 |
Total allowance for credit losses, end of period | $1,419 |  | $1,251 |  | $2,670 |
The following table provides additional detail on the cumulative effect of change in accounting principle on the ACL and related coverage ratios:
| December 31, 2019 |  | January 1, 2020 |  | December 31, 2020
(in millions) | Amortized Cost Basis | ACL Balance | Coverage |  | Impact of Adoption of CECL | ACL Balance | Coverage |  | Amortized Cost Basis | ACL Balance | Coverage
Commercial and industrial(1) | $41,479 |  | $575 |  | 1.4 | % |  | ($199) |  | $376 |  | 0.9 | % |  | $44,173 |  | $895 |  | 2.0 | %
Commercial real estate | 13,522 |  | 124 |  | 0.9 |  |  | (57) |  | 67 |  | 0.5 |  |  | 14,652 |  | 472 |  | 3.2 |
Leases | 2,537 |  | 19 |  | 0.7 |  |  | 77 |  | 96 |  | 3.8 |  |  | 1,968 |  | 52 |  | 2.6 |
Total commercial | 57,538 |  | 718 |  | 1.2 |  |  | (179) |  | 539 |  | 0.9 |  |  | 60,793 |  | 1,419 |  | 2.3 |
Residential | 19,083 |  | 35 |  | 0.2 |  |  | 95 |  | 130 |  | 0.7 |  |  | 19,539 |  | 141 |  | 0.7 |
Home equity | 13,154 |  | 83 |  | 0.6 |  |  | 73 |  | 156 |  | 1.2 |  |  | 12,149 |  | 150 |  | 1.2 |
Automobile | 12,120 |  | 123 |  | 1.0 |  |  | 83 |  | 206 |  | 1.7 |  |  | 12,153 |  | 200 |  | 1.6 |
Education | 10,347 |  | 116 |  | 1.1 |  |  | 298 |  | 414 |  | 4.0 |  |  | 12,308 |  | 386 |  | 3.1 |
Other retail | 6,846 |  | 221 |  | 3.2 |  |  | 81 |  | 302 |  | 4.4 |  |  | 6,148 |  | 374 |  | 6.1 |
Total retail | 61,550 |  | 578 |  | 0.9 |  |  | 630 |  | 1,208 |  | 2.0 |  |  | 62,297 |  | 1,251 |  | 2.0 |
Total loans and leases | $119,088 |  | $1,296 |  | 1.1 | % |  | $451 |  | $1,747 |  | 1.5 | % |  | $123,090 |  | $2,670 |  | 2.2 | %
(1) The commercial coverage ratio includes a 21 basis point reduction associated with PPP loans as of December 31, 2020. The difference in ACL as of December 31, 2020 as compared to December 31, 2019 continues to be driven by the COVID-19 pandemic, associated lockdowns and the resulting economic impacts from March to December 31, 2020, as well as the Company’s adoption of CECL on January 1, 2020. Citizens added $451 million in ACL upon adoption of CECL, and has since added an additional $923 million in the year ended December 31, 2020, resulting in an ending ACL balance of $2.7 billion. The increase in commercial net charge-offs in the year ended December 31, 2020 compared to the year ended December 31, 2019 was driven by charge-offs in the retail real estate, metals and mining, energy and related, and casual dining industry sectors. Retail net charge-offs in the year ended December 31, 2020 reflected the benefit of forbearance and stimulus activity stemming from the COVID-19 pandemic and associated lockdowns. To determine the ACL as of December 31, 2020, we utilized an economic scenario that generally reflects real GDP growth of approximately 4% over 2021, returning to fourth quarter 2019 real GDP levels by the last quarter of 2021. The scenario also projects the unemployment rate to be in the range of approximately 7% to 7.5% throughout 2021. While the macroeconomic forecast was slightly improved relative to the third quarter 2020 forecast, we continued to apply management judgment to adjust the modeled reserves in the commercial industry sectors most impacted by the COVID-19 pandemic and associated lockdowns, including retail and hospitality, casual dining, retail trade, price-sensitive energy and related, and educational services, as well as in certain retail products. The following tables present a summary of changes in the ACL for the year ended December 31, 2019 and 2018:
| Year Ended December 31, 2019
(in millions) | Commercial | Retail | Total
Allowance for loan and lease losses, beginning of period | $690 |  | $552 |  | $1,242 |
Charge-offs | (140) |  | (475) |  | (615) |
Recoveries | 24 |  | 161 |  | 185 |
Net charge-offs | (116) |  | (314) |  | (430) |
Provision charged to income | 100 |  | 340 |  | 440 |
Allowance for loan and lease losses, end of period | 674 |  | 578 |  | 1,252 |
Reserve for unfunded lending commitments, beginning of period | 91 |  | — |  | 91 |
Provision for unfunded lending commitments | (47) |  | — |  | (47) |
Reserve for unfunded lending commitments, end of period | 44 |  | — |  | 44 |
Total allowance for credit losses, end of period | $718 |  | $578 |  | $1,296 |
| Year Ended December 31, 2018
(in millions) | Commercial | Retail | Total
Allowance for loan and lease losses, beginning of period | $685 |  | $551 |  | $1,236 |
Charge-offs | (52) |  | (442) |  | (494) |
Recoveries | 19 |  | 158 |  | 177 |
Net charge-offs | (33) |  | (284) |  | (317) |
Provision charged to income(1) | 38 |  | 285 |  | 323 |
Allowance for loan and lease losses, end of period | 690 |  | 552 |  | 1,242 |
Reserve for unfunded lending commitments, beginning of period | 88 |  | — |  | 88 |
Provision for unfunded lending commitments | 3 |  | — |  | 3 |
Reserve for unfunded lending commitments, end of period | 91 |  | — |  | 91 |
Total allowance for credit losses, end of period | $781 |  | $552 |  | $1,333 |
Credit Quality Indicators Loan and lease portfolio segments and classes, excluding LHFS, are presented by credit quality indicator and vintage year. Citizens defines the vintage date for the purpose of this disclosure as the date of the most recent credit decision. In general, renewals are categorized as new credit decisions and reflect the renewal date as the vintage date. Loans modified in a TDR are considered to be a continuation of the original loan and vintage date corresponds with the initial loan origination date. For commercial, Citizens utilizes regulatory classification ratings to monitor credit quality. Regulatory classification ratings are assigned at loan origination and are periodically re-evaluated by Citizens utilizing a risk-based approach, or at any time management becomes aware of information affecting the borrowers' ability to fulfill their obligations. Both quantitative and qualitative factors are considered in this review process. Loans with a “pass” rating are those that the Company believes will be fully repaid in accordance with the contractual loan terms. Commercial loans that are “criticized” are those that have some weakness or potential weakness that indicate an increased probability of future loss. “Criticized” loans are grouped into three categories, “special mention,” “substandard” and “doubtful.” Special mention loans have potential weaknesses that, if left uncorrected, may result in deterioration of the Company’s credit position at some future date. Substandard loans are inadequately protected loans; these loans have well-defined weaknesses that could hinder normal repayment or collection of the debt. Doubtful loans have the same weaknesses as substandard, with the added characteristics that the possibility of loss is high and collection of the full amount of the loan is improbable. Additional credit quality information is discussed below for each loan class. For commercial and industrial loans, Citizens monitors the performance of the borrower in a disciplined and regular manner based upon the level of credit risk inherent in the loan. To evaluate the level of credit risk, management assigns an internal risk rating reflecting the borrower’s PD and LGD. This two-dimensional credit risk rating methodology provides granularity in the risk monitoring process. These ratings are generally reviewed at least annually. The combination of the PD and LGD ratings assigned to commercial and industrial loans, capturing both the combination of expectations of default and loss severity in the event of default, reflects credit quality characteristics as of the reporting date and are used as inputs into the loss forecasting process. Based upon the amount of the lending arrangement and risk rating assessment, management periodically reviews each loan, prioritizing those loans which are perceived to be of higher risk, based upon PDs and LGDs, or loans for which credit quality is weakening (e.g., payment delinquency). Citizens proactively manages loans by using various procedures that are customized to the risk of a given loan, including ongoing outreach to the borrower, assessment of the borrower’s financial conditions and appraisal of the collateral. Credit risk associated with commercial real estate projects and commercial mortgages are managed similar to commercial and industrial loans by evaluating PD and LGD. Risks associated with commercial real estate activities tend to be correlated to the loan structure and collateral location, project progress and business environment. As a result, these attributes are also monitored and utilized in assessing credit risk. As with the commercial and industrial loan class, periodic reviews are also performed to assess market/geographic risk and business unit/industry risk, which may result in increased scrutiny on loans that are perceived to be of higher risk, had adverse changes in risk ratings and/or areas that concern management. These reviews are designed to assess risk and facilitate actions to mitigate such risks. Citizens manages credit risk associated with financing leases similar to commercial and industrial loans by analyzing PD and LGD. Reviews are generally performed annually based upon the dollar amount of the lease and the level of credit risk, and may be more more frequent if circumstances warrant. The review process includes analysis of the following factors: equipment value/residual value, exposure levels, jurisdiction risk, industry risk, guarantor requirements, and regulatory compliance as applicable. Commercial loans with renewal terms in the original contract are recognized as current year originations upon renewal unless the loan automatically renewed with no new credit decision. Citizens generally reserves the right to not renew the loan or lease until current underwriting has been completed and approved. The following table presents the amortized cost basis of commercial loans and leases, by vintage date and regulatory classification rating, as of December 31, 2020:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior to 2016 |  | Within the Revolving Period | Converted to Term |  | Total
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | $8,036 |  |  | $5,730 |  |  | $4,180 |  |  | $2,174 |  |  | $1,157 |  |  | $1,980 |  |  | $17,281 |  | $340 |  |  | $40,878 |
Special Mention | 34 |  |  | 264 |  |  | 163 |  |  | 84 |  |  | 60 |  |  | 173 |  |  | 771 |  | 34 |  |  | 1,583 |
Substandard | 91 |  |  | 195 |  |  | 248 |  |  | 100 |  |  | 81 |  |  | 127 |  |  | 600 |  | 22 |  |  | 1,464 |
Doubtful | 65 |  |  | 10 |  |  | 34 |  |  | 38 |  |  | 3 |  |  | 31 |  |  | 63 |  | 4 |  |  | 248 |
Total commercial and industrial | 8,226 |  |  | 6,199 |  |  | 4,625 |  |  | 2,396 |  |  | 1,301 |  |  | 2,311 |  |  | 18,715 |  | 400 |  |  | 44,173 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 1,848 |  |  | 2,836 |  |  | 2,810 |  |  | 1,106 |  |  | 566 |  |  | 919 |  |  | 3,271 |  | — |  |  | 13,356 |
Special Mention | 19 |  |  | 130 |  |  | 121 |  |  | 92 |  |  | 94 |  |  | 48 |  |  | 300 |  | — |  |  | 804 |
Substandard | 116 |  |  | 2 |  |  | 65 |  |  | 5 |  |  | 53 |  |  | 26 |  |  | 149 |  | — |  |  | 416 |
Doubtful | 16 |  |  | 26 |  |  | 8 |  |  | — |  |  | — |  |  | 2 |  |  | 24 |  | — |  |  | 76 |
Total commercial real estate | 1,999 |  |  | 2,994 |  |  | 3,004 |  |  | 1,203 |  |  | 713 |  |  | 995 |  |  | 3,744 |  | — |  |  | 14,652 |
Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 455 |  |  | 246 |  |  | 229 |  |  | 139 |  |  | 180 |  |  | 673 |  |  | — |  | — |  |  | 1,922 |
Special Mention | 3 |  |  | 4 |  |  | 2 |  |  | 4 |  |  | 2 |  |  | 18 |  |  | — |  | — |  |  | 33 |
Substandard | — |  |  | 2 |  |  | 2 |  |  | 4 |  |  | 4 |  |  | — |  |  | — |  | — |  |  | 12 |
Doubtful | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 1 |
Total leases | 458 |  |  | 252 |  |  | 233 |  |  | 147 |  |  | 186 |  |  | 692 |  |  | — |  | — |  |  | 1,968 |
Total commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | 10,339 |  |  | 8,812 |  |  | 7,219 |  |  | 3,419 |  |  | 1,903 |  |  | 3,572 |  |  | 20,552 |  | 340 |  |  | 56,156 |
Special Mention | 56 |  |  | 398 |  |  | 286 |  |  | 180 |  |  | 156 |  |  | 239 |  |  | 1,071 |  | 34 |  |  | 2,420 |
Substandard | 207 |  |  | 199 |  |  | 315 |  |  | 109 |  |  | 138 |  |  | 153 |  |  | 749 |  | 22 |  |  | 1,892 |
Doubtful | 81 |  |  | 36 |  |  | 42 |  |  | 38 |  |  | 3 |  |  | 34 |  |  | 87 |  | 4 |  |  | 325 |
Total commercial | $10,683 |  |  | $9,445 |  |  | $7,862 |  |  | $3,746 |  |  | $2,200 |  |  | $3,998 |  |  | $22,459 |  | $400 |  |  | $60,793 |
(1) Includes PPP loans designated as pass that are fully guaranteed by the SBA originating in 2020. For retail loans, Citizens utilizes credit scores provided by FICO and the loan’s payment and delinquency status to monitor credit quality. Management believes FICO credit scores are considered the strongest indicator of credit losses over the contractual life of the loan as the scores are based on current and historical national industry-wide consumer level credit performance data, and assist management in predicting the borrower’s future payment performance. The following table presents the amortized cost basis of retail loans, by vintage date and FICO scores that are generally refreshed quarterly, as of December 31, 2020:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior to 2016 |  | Within the Revolving Period | Converted to Term |  | Total
Residential mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | $2,687 |  |  | $1,885 |  |  | $638 |  |  | $1,129 |  |  | $1,615 |  |  | $1,755 |  |  | $— |  | $— |  |  | $9,709 |
740-799 | 2,931 |  |  | 1,133 |  |  | 398 |  |  | 527 |  |  | 743 |  |  | 904 |  |  | — |  | — |  |  | 6,636 |
680-739 | 784 |  |  | 351 |  |  | 162 |  |  | 172 |  |  | 295 |  |  | 458 |  |  | — |  | — |  |  | 2,222 |
620-679 | 97 |  |  | 94 |  |  | 44 |  |  | 56 |  |  | 66 |  |  | 223 |  |  | — |  | — |  |  | 580 |
<620 | 12 |  |  | 28 |  |  | 35 |  |  | 58 |  |  | 50 |  |  | 185 |  |  | — |  | — |  |  | 368 |
No FICO available(1) | 1 |  |  | 2 |  |  | 1 |  |  | 5 |  |  | 1 |  |  | 14 |  |  | — |  | — |  |  | 24 |
Total residential mortgages | 6,512 |  |  | 3,493 |  |  | 1,278 |  |  | 1,947 |  |  | 2,770 |  |  | 3,539 |  |  | — |  | — |  |  | 19,539 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 2 |  |  | 8 |  |  | 10 |  |  | 7 |  |  | 5 |  |  | 216 |  |  | 4,319 |  | 344 |  |  | 4,911 |
740-799 | 2 |  |  | 6 |  |  | 7 |  |  | 6 |  |  | 5 |  |  | 180 |  |  | 3,234 |  | 331 |  |  | 3,771 |
680-739 | 1 |  |  | 6 |  |  | 10 |  |  | 15 |  |  | 8 |  |  | 179 |  |  | 1,632 |  | 284 |  |  | 2,135 |
620-679 | — |  |  | 10 |  |  | 18 |  |  | 21 |  |  | 14 |  |  | 136 |  |  | 402 |  | 195 |  |  | 796 |
<620 | 1 |  |  | 17 |  |  | 30 |  |  | 29 |  |  | 18 |  |  | 122 |  |  | 105 |  | 214 |  |  | 536 |
Total home equity | 6 |  |  | 47 |  |  | 75 |  |  | 78 |  |  | 50 |  |  | 833 |  |  | 9,692 |  | 1,368 |  |  | 12,149 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 1,056 |  |  | 812 |  |  | 424 |  |  | 312 |  |  | 169 |  |  | 62 |  |  | — |  | — |  |  | 2,835 |
740-799 | 1,514 |  |  | 1,022 |  |  | 531 |  |  | 344 |  |  | 172 |  |  | 59 |  |  | — |  | — |  |  | 3,642 |
680-739 | 1,347 |  |  | 889 |  |  | 461 |  |  | 282 |  |  | 138 |  |  | 47 |  |  | — |  | — |  |  | 3,164 |
620-679 | 669 |  |  | 484 |  |  | 259 |  |  | 157 |  |  | 84 |  |  | 32 |  |  | — |  | — |  |  | 1,685 |
<620 | 140 |  |  | 242 |  |  | 189 |  |  | 137 |  |  | 79 |  |  | 34 |  |  | — |  | — |  |  | 821 |
No FICO available(1) | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | — |  | — |  |  | 6 |
Total automobile | 4,728 |  |  | 3,449 |  |  | 1,864 |  |  | 1,232 |  |  | 642 |  |  | 238 |  |  | — |  | — |  |  | 12,153 |
Education |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 1,817 |  |  | 1,363 |  |  | 849 |  |  | 781 |  |  | 578 |  |  | 777 |  |  | — |  | — |  |  | 6,165 |
740-799 | 1,797 |  |  | 1,009 |  |  | 541 |  |  | 387 |  |  | 251 |  |  | 423 |  |  | — |  | — |  |  | 4,408 |
680-739 | 450 |  |  | 294 |  |  | 173 |  |  | 127 |  |  | 90 |  |  | 221 |  |  | — |  | — |  |  | 1,355 |
620-679 | 26 |  |  | 35 |  |  | 33 |  |  | 28 |  |  | 25 |  |  | 95 |  |  | — |  | — |  |  | 242 |
<620 | 2 |  |  | 5 |  |  | 10 |  |  | 10 |  |  | 8 |  |  | 41 |  |  | — |  | — |  |  | 76 |
No FICO available(1) | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 60 |  |  | — |  | — |  |  | 62 |
Total education | 4,094 |  |  | 2,706 |  |  | 1,606 |  |  | 1,333 |  |  | 952 |  |  | 1,617 |  |  | — |  | — |  |  | 12,308 |
Other retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 461 |  |  | 380 |  |  | 163 |  |  | 77 |  |  | 15 |  |  | 44 |  |  | 341 |  | — |  |  | 1,481 |
740-799 | 620 |  |  | 460 |  |  | 184 |  |  | 81 |  |  | 19 |  |  | 31 |  |  | 638 |  | 2 |  |  | 2,035 |
680-739 | 495 |  |  | 302 |  |  | 111 |  |  | 48 |  |  | 10 |  |  | 13 |  |  | 561 |  | 5 |  |  | 1,545 |
620-679 | 248 |  |  | 104 |  |  | 37 |  |  | 14 |  |  | 3 |  |  | 5 |  |  | 174 |  | 7 |  |  | 592 |
<620 | 24 |  |  | 30 |  |  | 17 |  |  | 6 |  |  | 1 |  |  | 3 |  |  | 77 |  | 8 |  |  | 166 |
No FICO available(1) | 54 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 272 |  | 2 |  |  | 329 |
Total other retail | 1,902 |  |  | 1,277 |  |  | 512 |  |  | 226 |  |  | 48 |  |  | 96 |  |  | 2,063 |  | 24 |  |  | 6,148 |
Retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 6,023 |  |  | 4,448 |  |  | 2,084 |  |  | 2,306 |  |  | 2,382 |  |  | 2,854 |  |  | 4,660 |  | 344 |  |  | 25,101 |
740-799 | 6,864 |  |  | 3,630 |  |  | 1,661 |  |  | 1,345 |  |  | 1,190 |  |  | 1,597 |  |  | 3,872 |  | 333 |  |  | 20,492 |
680-739 | 3,077 |  |  | 1,842 |  |  | 917 |  |  | 644 |  |  | 541 |  |  | 918 |  |  | 2,193 |  | 289 |  |  | 10,421 |
620-679 | 1,040 |  |  | 727 |  |  | 391 |  |  | 276 |  |  | 192 |  |  | 491 |  |  | 576 |  | 202 |  |  | 3,895 |
<620 | 179 |  |  | 322 |  |  | 281 |  |  | 240 |  |  | 156 |  |  | 385 |  |  | 182 |  | 222 |  |  | 1,967 |
No FICO available(1) | 59 |  |  | 3 |  |  | 1 |  |  | 5 |  |  | 1 |  |  | 78 |  |  | 272 |  | 2 |  |  | 421 |
Total retail | $17,242 |  |  | $10,972 |  |  | $5,335 |  |  | $4,816 |  |  | $4,462 |  |  | $6,323 |  |  | $11,755 |  | $1,392 |  |  | $62,297 |
(1) Represents loans for which an updated FICO score was unavailable (e.g., due to recent profile changes). Nonaccrual and Past Due Assets Nonaccrual loans and leases are those on which accrual of interest has been suspended. Loans (other than certain retail loans insured by U.S. government agencies) are placed on nonaccrual status when full payment of principal and interest is in doubt, unless the loan is both well secured and in the process of collection. When the Company places a loan on nonaccrual status, the accrued unpaid interest receivable is reversed against interest income and amortization of any net deferred fees is suspended. Interest collections on nonaccruing loans and leases for which the ultimate collectability of principal is uncertain are generally applied to first reduce the carrying value of the asset. Otherwise, interest income may be recognized to the extent of the cash received. A loan or lease may be returned to accrual status if (i) principal and interest payments have been brought current, and the Company expects repayment of the remaining contractual principal and interest, (ii) the loan or lease has otherwise become well-secured and in the process of collection, or (iii) the borrower has been making regularly scheduled payments in full for the prior six months and the Company is reasonably assured that the loan or lease will be brought fully current within a reasonable period. Commercial and industrial loans, commercial real estate loans, and leases are generally placed on nonaccrual status when contractually past due 90 days or more, or earlier if management believes that the probability of collection is insufficient to warrant further accrual. Some of these loans and leases may remain on accrual status when contractually past due 90 days or more if management considers the loan collectible. Residential mortgages are generally placed on nonaccrual status when past due 120 days, or sooner if determined to be collateral-dependent, unless repayment of the loan is guaranteed by the Federal Housing Administration. Credit card balances are placed on nonaccrual status when past due 90 days or more and are restored to accruing status if they subsequently become less than 90 days past due. All other retail loans are generally placed on nonaccrual status when past due 90 days or more, or earlier if management believes that the probability of collection is insufficient to warrant further accrual. Loans less than 90 days past due may be placed on nonaccrual status upon the death of the borrower, fraud or bankruptcy. Nonaccrual and Past Due Assets The following table presents nonaccrual loans and leases and loans accruing and 90 days or more past due:
| As of December 31, 2020 |  | As of December 31, 2019
(in millions) | Nonaccrual loans and leases | 90+ days past due and accruing | Nonaccrual with no related ACL |  | Nonaccrual loans and leases
Commercial and industrial | $280 |  | $20 |  | $56 |  |  | $240 |
Commercial real estate | 176 |  | — |  | 2 |  |  | 2 |
Leases | 2 |  | 1 |  | — |  |  | 3 |
Total commercial | 458 |  | 21 |  | 58 |  |  | 245 |
Residential mortgages | 167 |  | 30 |  | 96 |  |  | 93 |
Home equity | 276 |  | — |  | 207 |  |  | 246 |
Automobile | 72 |  | — |  | 17 |  |  | 67 |
Education | 18 |  | 2 |  | 2 |  |  | 18 |
Other retail | 28 |  | 9 |  | — |  |  | 34 |
Total retail | 561 |  | 41 |  | 322 |  |  | 458 |
Total loans and leases | $1,019 |  | $62 |  | $380 |  |  | $703 |
Interest income is generally not recognized for loans and leases that are on nonaccrual status. The Company reverses accrued interest receivable with a charge to interest income upon classifying the loan or lease as nonaccrual. The following table presents an analysis of the age of both accruing and nonaccruing loan and lease past due amounts:
| December 31, 2020 |  | December 31, 2019
| Days Past Due |  | Days Past Due
(in millions) | Current-29 | 30-59 | 60-89 | 90 or More | Total |  | Current-29 | 30-59 | 60-89 | 90 or More | Total
Commercial and industrial | $43,817 |  | $223 |  | $16 |  | $117 |  | $44,173 |  |  | $41,340 |  | $45 |  | $27 |  | $67 |  | $41,479 |
Commercial real estate | 14,531 |  | 1 |  | 85 |  | 35 |  | 14,652 |  |  | 13,520 |  | 1 |  | 1 |  | — |  | 13,522 |
Leases | 1,956 |  | 9 |  | — |  | 3 |  | 1,968 |  |  | 2,498 |  | 37 |  | — |  | 2 |  | 2,537 |
Total commercial | 60,304 |  | 233 |  | 101 |  | 155 |  | 60,793 |  |  | 57,358 |  | 83 |  | 28 |  | 69 |  | 57,538 |
Residential mortgages | 19,291 |  | 59 |  | 21 |  | 168 |  | 19,539 |  |  | 18,947 |  | 35 |  | 17 |  | 84 |  | 19,083 |
Home equity | 11,848 |  | 61 |  | 28 |  | 212 |  | 12,149 |  |  | 12,834 |  | 91 |  | 40 |  | 189 |  | 13,154 |
Automobile | 11,901 |  | 170 |  | 65 |  | 17 |  | 12,153 |  |  | 11,788 |  | 227 |  | 81 |  | 24 |  | 12,120 |
Education | 12,255 |  | 33 |  | 13 |  | 7 |  | 12,308 |  |  | 10,290 |  | 30 |  | 15 |  | 12 |  | 10,347 |
Other retail | 6,047 |  | 38 |  | 29 |  | 34 |  | 6,148 |  |  | 6,729 |  | 45 |  | 31 |  | 41 |  | 6,846 |
Total retail | 61,342 |  | 361 |  | 156 |  | 438 |  | 62,297 |  |  | 60,588 |  | 428 |  | 184 |  | 350 |  | 61,550 |
Total | $121,646 |  | $594 |  | $257 |  | $593 |  | $123,090 |  |  | $117,946 |  | $511 |  | $212 |  | $419 |  | $119,088 |
The Company estimates expected credit losses based on the fair value of collateral for collateralized loans that management believes will not be paid under the terms of the original loan contract. These loans are considered to be collateral dependent, and the estimated credit loss is calculated as the difference between the loan’s amortized cost basis and the fair value of the collateral as of each evaluation date. Collateral values for residential mortgage and home equity loans are based on refreshed valuations which are updated at least every 90 days less estimated costs to sell. At December 31, 2020 and 2019, the Company had collateral-dependent residential mortgage and home equity loans totaling $552 million and $227 million, respectively. For collateral-dependent commercial loans, the ACL is individually assessed based on the fair value of the collateral. Various types of collateral are used, including real estate, inventory, equipment, accounts receivable, securities and cash, among others. For commercial real estate loans, collateral values are generally based on appraisals which are updated based on management judgment under the specific circumstances on a case-by-case basis. At December 31, 2020 and 2019, the Company had collateral-dependent commercial loans totaling $206 million and $85 million, respectively. The amortized cost basis of mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings were in-process was $119 million and $152 million as of December 31, 2020 and 2019, respectively. Troubled Debt Restructurings In situations where, for economic or legal reasons related to the borrower’s financial difficulties, the Company grants a concession to the borrower that it would not otherwise consider, the related loan is classified as a TDR. TDRs typically result from the Company’s loss mitigation efforts and are undertaken in order to improve the likelihood of recovery and continuity of the relationship with the borrower. The Company’s loan modifications are handled on a case-by-case basis and are negotiated to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. Concessions granted in TDRs for all classes of loans may include lowering the interest rate, forgiving a portion of principal, extending the loan term, lowering scheduled payments for a specified period of time, waiving or delaying a scheduled payment of principal or interest for other than an insignificant time period, or capitalizing past due amounts. A rate increase can be a concession if the increased rate is lower than a market rate for debt with risk similar to that of the restructured loan. TDRs for commercial loans may also involve creating a multiple note structure, accepting non-cash assets, accepting an equity interest, or receiving a performance-based fee. In some cases, a TDR may involve multiple concessions. The financial effects of TDRs for all loan classes may include lower income (either due to a lower interest rate or a delay in the timing of cash flows), larger loan loss provisions, and accelerated charge-offs if the modification renders the loan collateral-dependent. In some cases, interest income throughout the term of the loan may increase if, for example, the loan is extended or the interest rate is increased as a result of the restructuring. Retail and commercial loans whose contractual terms have been modified in a TDR and are current at the time of restructuring may remain on accrual status if there is demonstrated performance prior to the restructuring and payment in full under the restructured terms is expected. Retail loans that were discharged in bankruptcy and not reaffirmed by the borrower are deemed to be collateral-dependent TDRs and are generally charged off to the fair value of the collateral, less cost to sell, and less amounts recoverable under a government guarantee (if any). Cash receipts on nonaccruing impaired loans, including nonaccruing loans involved in TDRs, are generally applied to reduce the unpaid principal balance. Certain TDRs that are current in payment status are classified as nonaccrual in accordance with regulatory guidance. Income on these loans may be recognized on a cash basis if management believes that the remaining book value of the loan is realizable. Nonaccruing TDRs that meet the guidelines above for accrual status can be returned to accruing if supported by a well-documented evaluation of the borrowers’ financial condition, and if they have been current for at least six months. Because TDRs are impaired loans, Citizens measures impairment by comparing the present value of expected future cash flows, or when appropriate, the fair value of collateral less costs to sell, to the loan’s amortized cost basis. Any excess of amortized cost basis over the present value of expected future cash flows or collateral value is included in the ALLL. Any portion of the loan’s amortized cost basis the Company does not expect to collect as a result of the modification is charged off at the time of modification. For retail TDR accounts where the expected value of cash flows is utilized, any recorded investment in excess of the present value of expected cash flows is recognized by increasing the ALLL. For retail TDR accounts assessed based on the fair value of collateral, any portion of the loan’s recorded investment in excess of the collateral value less costs to sell is charged off at the time of modification or at the time of subsequent and regularly recurring valuations. In 2020, Citizens implemented various retail and commercial loan modification programs to provide borrowers relief from the economic impacts of COVID-19. The CARES Act and bank regulatory agencies provided guidance stating certain loan modifications to borrowers experiencing financial distress as a result of COVID-19 may not be accounted for as TDRs under U.S. GAAP. In accordance with the CARES Act, Citizens elected to not apply TDR classification to any COVID-19 related loan modification performed after March 1, 2020 for borrowers who were current as of December 31, 2019 or the date of their loan modification. In addition, for loans modified in response to the COVID-19 pandemic and associated lockdowns that were not eligible for relief from TDR classification under the CARES Act, the Company elected to apply the guidance issued by the bank regulatory agencies. Under this guidance, loans with up to six months of deferred principal and interest to borrowers who were current as of March 1, 2020 or the date of their loan modification are not classified as TDRs. For loan modifications that include a payment deferral and are not TDRs, the borrower’s past due and nonaccrual status will not be impacted during the deferral period. Interest income will continue to be recognized over the contractual life of the loan. The following table summarizes TDRs by class and total unfunded commitments:
| December 31,
(in millions) | 2020 |  | 2019
Commercial | $257 |  |  | $297 |
Retail | 718 |  |  | 667 |
Unfunded commitments related to TDRs | 49 |  |  | 42 |
The following tables summarize how loans were modified during the years ended December 31, 2020, 2019 and 2018. The reported balances represent the post-modification outstanding recorded investment and can include loans that became TDRs during the period and were paid off in full, charged off, or sold prior to period end.
| December 31, 2020
| Primary Modification Types
| Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3)
(dollars in millions) | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment
Commercial and industrial | 1 |  | $— |  |  | 25 |  | $107 |  |  | 44 |  | $325 |
Commercial real estate | — |  | — |  |  | 1 |  | 7 |  |  | — |  | — |
Total commercial | 1 |  | — |  |  | 26 |  | 114 |  |  | 44 |  | 325 |
Residential mortgages | 210 |  | 39 |  |  | 190 |  | 34 |  |  | 73 |  | 13 |
Home equity | 143 |  | 12 |  |  | 151 |  | 12 |  |  | 429 |  | 23 |
Automobile | 129 |  | 2 |  |  | 104 |  | 1 |  |  | 3,003 |  | 47 |
Education | — |  | — |  |  | — |  | — |  |  | 465 |  | 10 |
Other retail | 2,311 |  | 10 |  |  | — |  | — |  |  | 280 |  | 2 |
Total retail | 2,793 |  | 63 |  |  | 445 |  | 47 |  |  | 4,250 |  | 95 |
Total | 2,794 |  | $63 |  |  | 471 |  | $161 |  |  | 4,294 |  | $420 |
| December 31, 2019
| Primary Modification Types
| Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3)
(dollars in millions) | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment
Commercial and industrial | 3 |  | $— |  |  | 26 |  | $5 |  |  | 56 |  | $210 |
Commercial real estate | — |  | — |  |  | 1 |  | — |  |  | — |  | — |
Total commercial | 3 |  | — |  |  | 27 |  | 5 |  |  | 56 |  | 210 |
Residential mortgages | 60 |  | 12 |  |  | 62 |  | 10 |  |  | 120 |  | 17 |
Home equity | 196 |  | 20 |  |  | 72 |  | 11 |  |  | 454 |  | 26 |
Automobile | 160 |  | 3 |  |  | 21 |  | — |  |  | 1,250 |  | 17 |
Education | — |  | — |  |  | — |  | — |  |  | 272 |  | 7 |
Other retail | 3,259 |  | 18 |  |  | — |  | — |  |  | 480 |  | 2 |
Total retail | 3,675 |  | 53 |  |  | 155 |  | 21 |  |  | 2,576 |  | 69 |
Total | 3,678 |  | $53 |  |  | 182 |  | $26 |  |  | 2,632 |  | $279 |
| December 31, 2018
| Primary Modification Types
| Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3)
(dollars in millions) | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment |  | Number of Contracts | Recorded Investment
Commercial and industrial | 7 |  | $1 |  |  | 49 |  | $22 |  |  | 53 |  | $200 |
Commercial real estate | — |  | — |  |  | 3 |  | 31 |  |  | 2 |  | 31 |
Total commercial | 7 |  | 1 |  |  | 52 |  | 53 |  |  | 55 |  | 231 |
Residential mortgages | 35 |  | 4 |  |  | 61 |  | 8 |  |  | 142 |  | 17 |
Home equity | 128 |  | 11 |  |  | 180 |  | 26 |  |  | 584 |  | 36 |
Automobile | 158 |  | 3 |  |  | 46 |  | 1 |  |  | 1,189 |  | 17 |
Education | — |  | — |  |  | — |  | — |  |  | 355 |  | 7 |
Other retail | 2,313 |  | 13 |  |  | — |  | — |  |  | 9 |  | — |
Total retail | 2,634 |  | 31 |  |  | 287 |  | 35 |  |  | 2,279 |  | 77 |
Total | 2,641 |  | $32 |  |  | 339 |  | $88 |  |  | 2,334 |  | $308 |
(1) Includes modifications that consist of multiple concessions, one of which is an interest rate reduction. (2) Includes modifications that consist of multiple concessions, one of which is a maturity extension (unless one of the other concessions was an interest rate reduction). (3) Includes modifications other than interest rate reductions or maturity extensions, such as lowering scheduled payments for a specified period of time, principal forgiveness, and capitalizing arrearages. Also included are the following: deferrals, trial modifications, certain bankruptcies, loans in forbearance and prepayment plans. Modifications can include the deferral of accrued interest resulting in post modification balances being higher than pre-modification. The net change to ALLL resulting from modifications of loans for the years ended December 31, 2020, 2019 and 2018 was $12 million, $9 million and $3 million, respectively. Charge-offs may also be recorded on TDRs. Citizens recorded charge-offs resulting from the modification of loans of $51 million, $7 million and $5 million for the years ended December 31, 2020, 2019 and 2018, respectively. A payment default refers to a loan that becomes 90 days or more past due under the modified terms. Loan data includes loans meeting the criteria that were paid off in full, charged off, or sold prior to December 31, 2020, 2019 and 2018. For commercial loans, recorded investment in TDRs that defaulted within 12 months of their modification date for the years ended December 31, 2020, 2019 and 2018 were $54 million, $1 million and $63 million, respectively. For retail loans, there were $46 million, $37 million and $40 million of loans which defaulted within 12 months of their restructuring date for the years ended December 31, 2020, 2019 and 2018, respectively. Concentrations of Credit Risk As of December 31, 2020, under the Company’s COVID-19-related forbearance and other customer accommodation programs that are guided by the CARES Act as well as banking regulator interagency guidance, Citizens deferred payments on approximately $1.4 billion, or 2.3%, of the retail portfolio, approximately $343 million, or 0.6%, of the commercial portfolio, including approximately $53 million, or 1.0%, of the small business portfolio. The vast majority of these deferrals are not classified as TDRs. Most of the Company’s lending activity is with customers located in the New England, Mid-Atlantic and Midwest regions. Generally, loans are collateralized by assets including real estate, inventory, accounts receivable, other personal property and investment securities. As of December 31, 2020 and 2019, Citizens had a significant amount of loans collateralized by residential and commercial real estate. There were no significant concentration risks within the commercial loan or retail loan portfolios. Exposure to credit losses arising from lending transactions may fluctuate with fair values of collateral supporting loans, which may not perform according to contractual agreements. The Company’s policy is to collateralize loans to the extent necessary; however, unsecured loans are also granted on the basis of the financial strength of the applicant and the facts surrounding the transaction. Certain loan products, including residential mortgages, home equity loans and lines of credit, and credit cards, have contractual features that may increase credit exposure to the Company in the event of an increase in interest rates or a decline in housing values. These products include loans that exceed 90% of the value of the underlying collateral (high LTV loans), interest-only and negative amortization residential mortgages, and loans with low introductory rates. Certain loans have more than one of these characteristics. The following tables present balances of loans with these characteristics:
| December 31, 2020
(in millions) | Residential Mortgages |  |  | Home Equity | Other Retail |  | Total
High loan-to-value | $289 |  |  |  | $64 |  | $— |  |  | $353 |
Interest only/negative amortization | 2,801 |  |  |  | — |  | — |  |  | 2,801 |
Low introductory rate | — |  |  |  | — |  | 170 |  |  | 170 |
Total | $3,090 |  |  |  | $64 |  | $170 |  |  | $3,324 |
| December 31, 2019
(in millions) | Residential Mortgages |  |  | Home Equity | Other Retail |  | Total
High loan-to-value | $402 |  |  |  | $151 |  | $— |  |  | $553 |
Interest only/negative amortization | 2,043 |  |  |  | — |  | — |  |  | 2,043 |
Low introductory rate | — |  |  |  | — |  | 235 |  |  | 235 |
Total | $2,445 |  |  |  | $151 |  | $235 |  |  | $2,831 |

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