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ALLOWANCE FOR CREDIT LOSSES, NONACCRUING LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK | 3 Months Ended
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Mar. 31, 2021
Receivables [Abstract] |
ALLOWANCE FOR CREDIT LOSSES, NONACCRUING LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK | NOTE 4 - ALLOWANCE FOR CREDIT LOSSES, NONACCRUING LOANS AND LEASES, 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 allowance for unfunded lending commitments (collectively the ACL). See Note 5 in the Company’s 2020 Form 10-K for a detailed discussion of the ACL reserve methodology and estimation techniques as of December 31, 2020. There were no significant changes to the ACL reserve methodology in the three months ended March 31, 2021. The following table presents a summary of changes in the ALLL and the allowance for unfunded lending commitments for the three months ended March 31, 2021:
|  |  | Three Months Ended March 31, 2021
(in millions) |  |  |  |  | Commercial | Retail | Total
Allowance for loan and lease losses, beginning of period |  |  |  |  | $1,233 |  | $1,210 |  | $2,443 |
Charge-offs |  |  |  |  | (134) |  | (93) |  | (227) |
Recoveries |  |  |  |  | 30 |  | 39 |  | 69 |
Net charge-offs |  |  |  |  | (104) |  | (54) |  | (158) |
Provision charged to income |  |  |  |  | 17 |  | (108) |  | (91) |
Allowance for loan and lease losses, end of period |  |  |  |  | $1,146 |  | $1,048 |  | $2,194 |
Allowance for unfunded lending commitments, beginning of period |  |  |  |  | $186 |  | $41 |  | $227 |
Provision for unfunded lending commitments |  |  |  |  | (21) |  | (28) |  | (49) |
Allowance for unfunded lending commitments, end of period |  |  |  |  | $165 |  | $13 |  | $178 |
The difference in ACL as of March 31, 2021 as compared to December 31, 2020 was due to higher net charge-offs of $158 million, as detailed below, coupled with a negative provision for credit losses for $140 million. This reflected strong credit performance across the retail and commercial loan portfolios, and improvement in the macroeconomic outlook. Overall, an ending ACL balance of $2.4 billion at March 31, 2021 compared to $2.7 billion at December 31, 2020. The increase in commercial net charge-offs of $60 million in the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 was driven by higher charge-offs in finance and insurance, including one large charge-off related to a financial sponsor, and CRE. Retail net charge-offs were down $39 million in the three months ended March 31, 2021 as compared to the three months ended March 31, 2020 as a result of government stimulus and forbearance programs. To determine the ACL as of March, 31, 2021, Citizens utilized an economic forecast that generally reflects real GDP growth of approximately 3.2% over 2021, returning to fourth quarter 2019 real GDP levels by the last quarter of 2021. The forecast also projects the unemployment rate to be in the range of 6.3% to 7.0% throughout 2021. Overall, this forecast reflects an improved macroeconomic outlook as compared to December 31, 2020. In addition to judgment applied at the commercial portfolio as a whole, Citizens 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 CRE retail and hospitality and casual dining. Accrued interest receivable on loans and leases is excluded from asset balances used to calculate the ACL. 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 three months ended March 31, 2021 was $1 million and $6 million for commercial and retail, respectively. For the three months ended March 31, 2020, these reversals were $1 million and $5 million for commercial and retail, respectively. The following table presents a summary of changes in the ALLL and the allowance for unfunded lending commitments for the three months ended March 31, 2020:
|  |  | Three Months Ended March 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 |  |  |  |  | (47) |  | (127) |  | (174) |
Recoveries |  |  |  |  | 3 |  | 34 |  | 37 |
Net charge-offs |  |  |  |  | (44) |  | (93) |  | (137) |
Provision charged to income |  |  |  |  | 298 |  | 305 |  | 603 |
Allowance for loan and lease losses, end of period |  |  |  |  | $752 |  | $1,419 |  | $2,171 |
Allowance for unfunded lending commitments, beginning of period |  |  |  |  | $44 |  | $— |  | $44 |
Cumulative effect of change in accounting principle |  |  |  |  | (3) |  | 1 |  | (2) |
Allowance for unfunded lending commitments, beginning of period, adjusted |  |  |  |  | 41 |  | 1 |  | 42 |
Provision for unfunded lending commitments |  |  |  |  | (3) |  | — |  | (3) |
Allowance for unfunded lending commitments, end of period |  |  |  |  | $38 |  | $1 |  | $39 |
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 loans and leases, 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 and leases 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. The following table presents the amortized cost basis of commercial loans and leases, by vintage date and regulatory classification rating, as of March 31, 2021:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior to 2017 |  | Within the Revolving Period | Converted to Term |  | Total
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | $3,000 |  |  | $7,178 |  |  | $5,699 |  |  | $3,995 |  |  | $2,206 |  |  | $3,384 |  |  | $15,134 |  | $326 |  |  | $40,922 |
Special Mention | — |  |  | 41 |  |  | 221 |  |  | 241 |  |  | 86 |  |  | 244 |  |  | 415 |  | 34 |  |  | 1,282 |
Substandard | 22 |  |  | 101 |  |  | 294 |  |  | 256 |  |  | 124 |  |  | 177 |  |  | 612 |  | 23 |  |  | 1,609 |
Doubtful | — |  |  | 65 |  |  | 11 |  |  | 31 |  |  | 28 |  |  | 35 |  |  | 72 |  | 3 |  |  | 245 |
Total commercial and industrial | 3,022 |  |  | 7,385 |  |  | 6,225 |  |  | 4,523 |  |  | 2,444 |  |  | 3,840 |  |  | 16,233 |  | 386 |  |  | 44,058 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 253 |  |  | 2,411 |  |  | 3,815 |  |  | 3,212 |  |  | 1,206 |  |  | 1,794 |  |  | 940 |  | — |  |  | 13,631 |
Special Mention | — |  |  | 9 |  |  | 131 |  |  | 72 |  |  | 178 |  |  | 99 |  |  | — |  | — |  |  | 489 |
Substandard | 46 |  |  | 116 |  |  | 58 |  |  | 58 |  |  | 49 |  |  | 81 |  |  | — |  | — |  |  | 408 |
Doubtful | — |  |  | 16 |  |  | — |  |  | 7 |  |  | — |  |  | 2 |  |  | — |  | — |  |  | 25 |
Total commercial real estate | 299 |  |  | 2,552 |  |  | 4,004 |  |  | 3,349 |  |  | 1,433 |  |  | 1,976 |  |  | 940 |  | — |  |  | 14,553 |
Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 94 |  |  | 401 |  |  | 240 |  |  | 225 |  |  | 116 |  |  | 675 |  |  | — |  | — |  |  | 1,751 |
Special Mention | — |  |  | 3 |  |  | 4 |  |  | 2 |  |  | 6 |  |  | 19 |  |  | — |  | — |  |  | 34 |
Substandard | — |  |  | 13 |  |  | 2 |  |  | 1 |  |  | — |  |  | — |  |  | — |  | — |  |  | 16 |
Doubtful | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 1 |
Total leases | 94 |  |  | 417 |  |  | 246 |  |  | 228 |  |  | 122 |  |  | 695 |  |  | — |  | — |  |  | 1,802 |
Total commercial loans and leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | 3,347 |  |  | 9,990 |  |  | 9,754 |  |  | 7,432 |  |  | 3,528 |  |  | 5,853 |  |  | 16,074 |  | 326 |  |  | 56,304 |
Special Mention | — |  |  | 53 |  |  | 356 |  |  | 315 |  |  | 270 |  |  | 362 |  |  | 415 |  | 34 |  |  | 1,805 |
Substandard | 68 |  |  | 230 |  |  | 354 |  |  | 315 |  |  | 173 |  |  | 258 |  |  | 612 |  | 23 |  |  | 2,033 |
Doubtful | — |  |  | 81 |  |  | 11 |  |  | 38 |  |  | 28 |  |  | 38 |  |  | 72 |  | 3 |  |  | 271 |
Total commercial | $3,415 |  |  | $10,354 |  |  | $10,475 |  |  | $8,100 |  |  | $3,999 |  |  | $6,511 |  |  | $17,173 |  | $386 |  |  | $60,413 |
(1) Includes $5.1 billion of PPP loans designated as pass that are fully guaranteed by the SBA originating in 2021 and 2020. 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 loans and leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 $4.2 billion 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, as of March 31, 2021:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior to 2017 |  | Within the Revolving Period | Converted to Term |  | Total
Residential mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | $307 |  |  | $3,088 |  |  | $1,756 |  |  | $556 |  |  | $1,014 |  |  | $3,023 |  |  | $— |  | $— |  |  | $9,744 |
740-799 | 729 |  |  | 2,369 |  |  | 944 |  |  | 337 |  |  | 446 |  |  | 1,442 |  |  | — |  | — |  |  | 6,267 |
680-739 | 175 |  |  | 699 |  |  | 331 |  |  | 140 |  |  | 157 |  |  | 681 |  |  | — |  | — |  |  | 2,183 |
620-679 | 14 |  |  | 96 |  |  | 93 |  |  | 46 |  |  | 65 |  |  | 306 |  |  | — |  | — |  |  | 620 |
<620 | 2 |  |  | 25 |  |  | 28 |  |  | 40 |  |  | 53 |  |  | 224 |  |  | — |  | — |  |  | 372 |
No FICO available(1) | 2 |  |  | 2 |  |  | 1 |  |  | — |  |  | — |  |  | 11 |  |  | — |  | — |  |  | 16 |
Total residential mortgages | 1,229 |  |  | 6,279 |  |  | 3,153 |  |  | 1,119 |  |  | 1,735 |  |  | 5,687 |  |  | — |  | — |  |  | 19,202 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | — |  |  | 3 |  |  | 7 |  |  | 8 |  |  | 6 |  |  | 192 |  |  | 4,288 |  | 335 |  |  | 4,839 |
740-799 | — |  |  | 1 |  |  | 5 |  |  | 6 |  |  | 6 |  |  | 170 |  |  | 3,167 |  | 317 |  |  | 3,672 |
680-739 | — |  |  | 1 |  |  | 6 |  |  | 11 |  |  | 16 |  |  | 175 |  |  | 1,610 |  | 270 |  |  | 2,089 |
620-679 | — |  |  | 3 |  |  | 13 |  |  | 20 |  |  | 23 |  |  | 144 |  |  | 363 |  | 189 |  |  | 755 |
<620 | — |  |  | 5 |  |  | 21 |  |  | 33 |  |  | 26 |  |  | 124 |  |  | 87 |  | 203 |  |  | 499 |
No FICO available(1) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
Total home equity | — |  |  | 13 |  |  | 52 |  |  | 78 |  |  | 77 |  |  | 805 |  |  | 9,515 |  | 1,314 |  |  | 11,854 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 370 |  |  | 997 |  |  | 749 |  |  | 378 |  |  | 265 |  |  | 168 |  |  | — |  | — |  |  | 2,927 |
740-799 | 495 |  |  | 1,426 |  |  | 906 |  |  | 460 |  |  | 288 |  |  | 169 |  |  | — |  | — |  |  | 3,744 |
680-739 | 441 |  |  | 1,253 |  |  | 781 |  |  | 396 |  |  | 232 |  |  | 136 |  |  | — |  | — |  |  | 3,239 |
620-679 | 188 |  |  | 616 |  |  | 421 |  |  | 220 |  |  | 131 |  |  | 86 |  |  | — |  | — |  |  | 1,662 |
<620 | 18 |  |  | 159 |  |  | 218 |  |  | 168 |  |  | 117 |  |  | 87 |  |  | — |  | — |  |  | 767 |
No FICO available(1) | 2 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | — |  | — |  |  | 5 |
Total automobile | 1,514 |  |  | 4,452 |  |  | 3,075 |  |  | 1,622 |  |  | 1,033 |  |  | 648 |  |  | — |  | — |  |  | 12,344 |
Education |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 347 |  |  | 1,781 |  |  | 1,169 |  |  | 713 |  |  | 647 |  |  | 1,151 |  |  | — |  | — |  |  | 5,808 |
740-799 | 399 |  |  | 1,883 |  |  | 971 |  |  | 528 |  |  | 370 |  |  | 638 |  |  | — |  | — |  |  | 4,789 |
680-739 | 98 |  |  | 560 |  |  | 326 |  |  | 187 |  |  | 136 |  |  | 312 |  |  | — |  | — |  |  | 1,619 |
620-679 | 5 |  |  | 55 |  |  | 50 |  |  | 41 |  |  | 34 |  |  | 125 |  |  | — |  | — |  |  | 310 |
<620 | — |  |  | 5 |  |  | 12 |  |  | 15 |  |  | 12 |  |  | 62 |  |  | — |  | — |  |  | 106 |
No FICO available(1) | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57 |  |  | — |  | — |  |  | 59 |
Total education | 851 |  |  | 4,284 |  |  | 2,528 |  |  | 1,484 |  |  | 1,199 |  |  | 2,345 |  |  | — |  | — |  |  | 12,691 |
Other retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 63 |  |  | 394 |  |  | 269 |  |  | 117 |  |  | 56 |  |  | 49 |  |  | 303 |  | — |  |  | 1,251 |
740-799 | 95 |  |  | 546 |  |  | 359 |  |  | 151 |  |  | 68 |  |  | 42 |  |  | 592 |  | 2 |  |  | 1,855 |
680-739 | 87 |  |  | 431 |  |  | 245 |  |  | 102 |  |  | 45 |  |  | 22 |  |  | 531 |  | 5 |  |  | 1,468 |
620-679 | 56 |  |  | 229 |  |  | 88 |  |  | 36 |  |  | 13 |  |  | 7 |  |  | 170 |  | 6 |  |  | 605 |
<620 | 4 |  |  | 46 |  |  | 35 |  |  | 20 |  |  | 7 |  |  | 4 |  |  | 74 |  | 8 |  |  | 198 |
No FICO available(1) | 24 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 279 |  | 2 |  |  | 314 |
Total other retail | 329 |  |  | 1,655 |  |  | 996 |  |  | 426 |  |  | 189 |  |  | 124 |  |  | 1,949 |  | 23 |  |  | 5,691 |
Retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 1,087 |  |  | 6,263 |  |  | 3,950 |  |  | 1,772 |  |  | 1,988 |  |  | 4,583 |  |  | 4,591 |  | 335 |  |  | 24,569 |
740-799 | 1,718 |  |  | 6,225 |  |  | 3,185 |  |  | 1,482 |  |  | 1,178 |  |  | 2,461 |  |  | 3,759 |  | 319 |  |  | 20,327 |
680-739 | 801 |  |  | 2,944 |  |  | 1,689 |  |  | 836 |  |  | 586 |  |  | 1,326 |  |  | 2,141 |  | 275 |  |  | 10,598 |
620-679 | 263 |  |  | 999 |  |  | 665 |  |  | 363 |  |  | 266 |  |  | 668 |  |  | 533 |  | 195 |  |  | 3,952 |
<620 | 24 |  |  | 240 |  |  | 314 |  |  | 276 |  |  | 215 |  |  | 501 |  |  | 161 |  | 211 |  |  | 1,942 |
No FICO available(1) | 30 |  |  | 12 |  |  | 1 |  |  | — |  |  | — |  |  | 70 |  |  | 279 |  | 2 |  |  | 394 |
Total retail | $3,923 |  |  | $16,683 |  |  | $9,804 |  |  | $4,729 |  |  | $4,233 |  |  | $9,609 |  |  | $11,464 |  | $1,337 |  |  | $61,782 |
(1) Represents loans for which an updated FICO score was unavailable (e.g., due to recent profile changes). The following table presents the amortized cost basis of retail loans, by vintage date and FICO scores, 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 |
No FICO available(1) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | — |
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 The following table presents nonaccrual loans and leases and loans accruing and 90 days or more past due:
| As of March 31, 2021 |  | As of December 31, 2020
(in millions) | Nonaccrual loans and leases | 90+ days past due and accruing | Nonaccrual with no related ACL |  | Nonaccrual loans and leases | 90+ days past due and accruing | Nonaccrual with no related ACL
Commercial and industrial | $281 |  | $3 |  | $56 |  |  | $280 |  | $20 |  | $56 |
Commercial real estate | 100 |  | 9 |  | 37 |  |  | 176 |  | — |  | 2 |
Leases | 1 |  | — |  | — |  |  | 2 |  | 1 |  | — |
Total commercial | 382 |  | 12 |  | 93 |  |  | 458 |  | 21 |  | 58 |
Residential mortgages | 237 |  | 23 |  | 178 |  |  | 167 |  | 30 |  | 96 |
Home equity | 269 |  | — |  | 202 |  |  | 276 |  | — |  | 207 |
Automobile | 70 |  | — |  | 33 |  |  | 72 |  | — |  | 17 |
Education | 22 |  | 2 |  | 2 |  |  | 18 |  | 2 |  | 2 |
Other retail | 28 |  | 9 |  | 2 |  |  | 28 |  | 9 |  | — |
Total retail | 626 |  | 34 |  | 417 |  |  | 561 |  | 41 |  | 322 |
Total loans and leases | $1,008 |  | $46 |  | $510 |  |  | $1,019 |  | $62 |  | $380 |
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:
| March 31, 2021 |  | December 31, 2020
| 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 | $43,768 |  | $178 |  | $20 |  | $92 |  | $44,058 |  |  | $43,817 |  | $223 |  | $16 |  | $117 |  | $44,173 |
Commercial real estate | 14,440 |  | 60 |  | 36 |  | 17 |  | 14,553 |  |  | 14,531 |  | 1 |  | 85 |  | 35 |  | 14,652 |
Leases | 1,798 |  | 2 |  | — |  | 2 |  | 1,802 |  |  | 1,956 |  | 9 |  | — |  | 3 |  | 1,968 |
Total commercial | 60,006 |  | 240 |  | 56 |  | 111 |  | 60,413 |  |  | 60,304 |  | 233 |  | 101 |  | 155 |  | 60,793 |
Residential mortgages | 18,951 |  | 55 |  | 11 |  | 185 |  | 19,202 |  |  | 19,291 |  | 59 |  | 21 |  | 168 |  | 19,539 |
Home equity | 11,599 |  | 46 |  | 19 |  | 190 |  | 11,854 |  |  | 11,848 |  | 61 |  | 28 |  | 212 |  | 12,149 |
Automobile | 12,176 |  | 117 |  | 41 |  | 10 |  | 12,344 |  |  | 11,901 |  | 170 |  | 65 |  | 17 |  | 12,153 |
Education | 12,638 |  | 29 |  | 13 |  | 11 |  | 12,691 |  |  | 12,255 |  | 33 |  | 13 |  | 7 |  | 12,308 |
Other retail | 5,602 |  | 31 |  | 24 |  | 34 |  | 5,691 |  |  | 6,047 |  | 38 |  | 29 |  | 34 |  | 6,148 |
Total retail loans | 60,966 |  | 278 |  | 108 |  | 430 |  | 61,782 |  |  | 61,342 |  | 361 |  | 156 |  | 438 |  | 62,297 |
Total | $120,972 |  | $518 |  | $164 |  | $541 |  | $122,195 |  |  | $121,646 |  | $594 |  | $257 |  | $593 |  | $123,090 |
At March 31, 2021 and December 31, 2020, the Company had collateral-dependent residential mortgage and home equity loans totaling $613 million and $552 million, respectively. At March 31, 2021 and December 31, 2020, the Company had collateral-dependent commercial loans totaling $110 million and $206 million, respectively. The amortized cost basis of mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings were in process was $112 million and $119 million as of March 31, 2021 and December 31, 2020, respectively. Troubled Debt Restructurings The following table summarizes TDRs by portfolio segment and total unfunded commitments:
(in millions) | March 31, 2021 |  | December 31, 2020
Commercial | $367 |  |  | $257 |
Retail | 714 |  |  | 718 |
Unfunded commitments related to TDRs | 167 |  |  | 49 |
The following tables below summarize how loans were modified during the three months ended March 31, 2021 and March 31, 2020. The reported balances represent the post-modification outstanding amortized cost basis and can include loans that became TDRs during the period and were paid off in full, charged off, or sold prior to period end. Pre-modification balances for modified loans approximate the post-modification balances shown.
| Three Months Ended March 31, 2021
| Primary Modification Types
| Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3)
(dollars in millions) | Number of Contracts | Amortized Cost |  | Number of Contracts | Amortized Cost |  | Number of Contracts | Amortized Cost
Commercial and industrial | — |  | $— |  |  | 3 |  | $3 |  |  | 4 |  | $— |
Commercial real estate | — |  | — |  |  | — |  | — |  |  | — |  | — |
Total commercial loans | — |  | — |  |  | 3 |  | 3 |  |  | 4 |  | — |
Residential mortgages | 20 |  | 4 |  |  | 9 |  | 6 |  |  | 13 |  | 3 |
Home equity | 34 |  | 2 |  |  | 41 |  | 5 |  |  | 72 |  | 4 |
Automobile | 21 |  | — |  |  | 52 |  | — |  |  | 596 |  | 8 |
Education | — |  | — |  |  | — |  | — |  |  | 147 |  | 4 |
Other retail | 556 |  | 3 |  |  | — |  | — |  |  | 74 |  | 1 |
Total retail loans | 631 |  | 9 |  |  | 102 |  | 11 |  |  | 902 |  | 20 |
Total | 631 |  | $9 |  |  | 105 |  | $14 |  |  | 906 |  | $20 |
| Three Months Ended March 31, 2020
| Primary Modification Types
| Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3)
(dollars in millions) | Number of Contracts | Amortized Cost |  | Number of Contracts | Amortized Cost |  | Number of Contracts | Amortized Cost
Commercial and industrial | — |  | $— |  |  | 2 |  | $— |  |  | 17 |  | $41 |
Commercial real estate | — |  | — |  |  | — |  | — |  |  | — |  | — |
Total commercial loans | — |  | — |  |  | 2 |  | — |  |  | 17 |  | 41 |
Residential mortgages | 38 |  | 6 |  |  | 37 |  | 7 |  |  | 21 |  | 4 |
Home equity | 46 |  | 4 |  |  | 6 |  | — |  |  | 71 |  | 4 |
Automobile | 47 |  | 1 |  |  | — |  | — |  |  | 183 |  | 2 |
Education | — |  | — |  |  | — |  | — |  |  | 91 |  | 2 |
Other retail | 861 |  | 4 |  |  | — |  | — |  |  | 112 |  | 1 |
Total retail loans | 992 |  | 15 |  |  | 43 |  | 7 |  |  | 478 |  | 13 |
Total | 992 |  | $15 |  |  | 45 |  | $7 |  |  | 495 |  | $54 |
(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 three months ended March 31, 2021 and 2020 was $0 million and $4 million, respectively. Charge-offs may also be recorded on TDRs. Citizens recorded $2 million of charge-offs related to TDRs for each of the three months ended March 31, 2021 and 2020. 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 March 31, 2021 and 2020. For commercial loans, the amortized cost basis of TDRs that defaulted within 12 months of their modification date was $22 million and $13 million in the three months ended March 31, 2021 and 2020, respectively. For retail loans, there were $15 million and $11 million of loans which defaulted within 12 months of their restructuring date for the three months ended March 31, 2021 and 2020, respectively. Concentrations of Credit Risk 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 March 31, 2021 and December 31, 2020, 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 residential mortgages, and loans with low introductory rates. The following tables present balances of loans with these characteristics:
| March 31, 2021
(in millions) | Residential Mortgages |  |  | Home Equity | Other Retail |  | Total
High loan-to-value | $224 |  |  |  | $41 |  | $— |  |  | $265 |
Interest-only | 2,936 |  |  |  | — |  | — |  |  | 2,936 |
Low introductory rate | — |  |  |  | — |  | 145 |  |  | 145 |
Multiple characteristics and other | 2 |  |  |  | — |  | — |  |  | 2 |
Total | $3,162 |  |  |  | $41 |  | $145 |  |  | $3,348 |
| December 31, 2020
(in millions) | Residential Mortgages |  |  | Home Equity | Other Retail |  | Total
High loan-to-value | $289 |  |  |  | $64 |  | $— |  |  | $353 |
Interest-only | 2,801 |  |  |  | — |  | — |  |  | 2,801 |
Low introductory rate | — |  |  |  | — |  | 170 |  |  | 170 |
Total | $3,090 |  |  |  | $64 |  | $170 |  |  | $3,324 |

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