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ALLOWANCE FOR CREDIT LOSSES, NONACCRUAL LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK | 3 Months Ended
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Mar. 31, 2022
Receivables [Abstract] |
ALLOWANCE FOR CREDIT LOSSES, NONACCRUAL LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK | NOTE 5 - ALLOWANCE FOR CREDIT LOSSES, NONACCRUAL LOANS AND LEASES, AND CONCENTRATIONS OF CREDIT RISK Allowance for Credit Losses Recorded in the ACL is management’s estimate of expected credit losses in the Company’s loan and lease portfolios. See Note 6 in the Company’s 2021 Form 10-K for a detailed discussion of the ACL reserve methodology and estimation techniques as of December 31, 2021. There were no significant changes to the ACL reserve methodology during the three months ended March 31, 2022. The following table presents a summary of changes in the ACL for the three months ended March 31, 2022:
|  |  | Three Months Ended March 31, 2022
(in millions) |  |  |  |  | Commercial | Retail | Total
Allowance for loan and lease losses, beginning of period |  |  |  |  | $821 |  | $937 |  | $1,758 |
Charge-offs |  |  |  |  | (14) |  | (87) |  | (101) |
Recoveries |  |  |  |  | 3 |  | 39 |  | 42 |
Net charge-offs |  |  |  |  | (11) |  | (48) |  | (59) |
Provision expense (benefit) for loans and leases |  |  |  |  | (32) |  | 53 |  | 21 |
Allowance for loan and lease losses, end of period |  |  |  |  | 778 |  | 942 |  | 1,720 |
Allowance for unfunded lending commitments, beginning of period |  |  |  |  | 153 |  | 23 |  | 176 |
Provision expense (benefit) for unfunded lending commitments |  |  |  |  | (6) |  | (12) |  | (18) |
Allowance for unfunded lending commitments, end of period |  |  |  |  | 147 |  | 11 |  | 158 |
Total allowance for credit losses, end of period |  |  |  |  | $925 |  | $953 |  | $1,878 |
During the three months ended March 31, 2022 net charge-offs of $59 million and a credit provision of $3 million resulted in a reduction of $56 million to the ACL. The $3 million credit provision includes the “double count” of the $24 million day-one CECL provision expense tied to the HSBC transaction. The decrease in commercial net charge-offs of $93 million for the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 reflects the strong economic growth that began in the fourth quarter of 2020 and continued solid credit performance. Retail net charge-offs were down $6 million in the three months ended March 31, 2022 as compared to the three months ended March 31, 2021 as consumers continue to benefit from the fiscal support provided during the pandemic, the rapid growth in jobs, and elevated residential mortgage and auto loan collateral values. To determine the ACL as of March 31, 2022, the Company utilized an economic forecast that generally reflects real GDP growth on an annual average basis of 2.5% and an average unemployment rate of 5.2% in 2022. This forecast reflects a positive overall macroeconomic outlook, generally in-line with December 31, 2021, which reflected real GDP growth on an annual average basis of 2.8% and an average unemployment rate of 6% in 2022. While the U.S. economy has remained strong, uncertainty remains. The Company continues to utilize a qualitative allowance framework to reassess and adjust ACL reserve levels. Macroeconomic forecast risk, driven by uncertainty around and volatility of key macroeconomic variables, is one of the primary factors influencing the qualitative reserve. The Company’s March 2022 qualitative consideration for macroeconomic risk reflects the strength of the overall economy weighed against the headwinds of tightening monetary and fiscal policies, impacts of elevated inflation, including the gap between wage gains and inflation rate, labor shortages, continuing supply-chain challenges, and possible consequences from Russia’s invasion of Ukraine. The Company expects the combination of these items to likely create volatility in key macroeconomic variables. While COVID has reemerged in certain areas of the world, the impact to the US economy has been limited to date given vaccination rates and material reductions in hospitalizations and deaths, reductions in consumer concerns about the pandemic, and a strong labor market with over 11 million open jobs as of February 2022. The following table presents a summary of changes in the ACL 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 expense (benefit) for loans and leases |  |  |  |  | 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 expense (benefit) for unfunded lending commitments |  |  |  |  | (21) |  | (28) |  | (49) |
Allowance for unfunded lending commitments, end of period |  |  |  |  | 165 |  | 13 |  | 178 |
Total allowance for credit losses, end of period |  |  |  |  | $1,311 |  | $1,061 |  | $2,372 |
Credit Quality Indicators The Company presents loan and lease portfolio segments and classes 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 a continuation of the original loan and vintage date corresponds with the most recent credit decision. For commercial loans and leases, Citizens utilizes regulatory classification ratings to monitor credit quality. The assignment of regulatory classification ratings occurs at loan origination and are periodically re-evaluated by Citizens utilizing a risk-based approach, including any time management becomes aware of information affecting the borrowers' ability to fulfill their obligations. The review process considers both quantitative and qualitative factors. Loans with a “pass” rating are those that the Company believes will fully repay in accordance with the contractual loan terms. Commercial loans and leases identified as “criticized” have some weakness or potential weakness that indicate an increased probability of future loss. Citizens groups “criticized” loans 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 characteristic 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, 2022:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior to 2018 |  | Within the Revolving Period | Converted to Term |  | Total
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $1,944 |  |  | $9,819 |  |  | $3,007 |  |  | $2,908 |  |  | $2,094 |  |  | $2,975 |  |  | $20,729 |  | $118 |  |  | $43,594 |
Special Mention | 1 |  |  | 74 |  |  | 58 |  |  | 107 |  |  | 105 |  |  | 114 |  |  | 385 |  | 1 |  |  | 845 |
Substandard | — |  |  | 89 |  |  | 89 |  |  | 222 |  |  | 78 |  |  | 195 |  |  | 419 |  | 17 |  |  | 1,109 |
Doubtful | 7 |  |  | 12 |  |  | 19 |  |  | 4 |  |  | 10 |  |  | 25 |  |  | 96 |  | 3 |  |  | 176 |
Total commercial and industrial | 1,952 |  |  | 9,994 |  |  | 3,173 |  |  | 3,241 |  |  | 2,287 |  |  | 3,309 |  |  | 21,629 |  | 139 |  |  | 45,724 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 784 |  |  | 2,667 |  |  | 2,420 |  |  | 2,889 |  |  | 1,465 |  |  | 1,587 |  |  | 1,458 |  | 3 |  |  | 13,273 |
Special Mention | — |  |  | 54 |  |  | 48 |  |  | 228 |  |  | 93 |  |  | 79 |  |  | 10 |  | — |  |  | 512 |
Substandard | — |  |  | 1 |  |  | — |  |  | 84 |  |  | 243 |  |  | 141 |  |  | 3 |  | — |  |  | 472 |
Doubtful | — |  |  | 1 |  |  | 9 |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 11 |
Total commercial real estate | 784 |  |  | 2,723 |  |  | 2,477 |  |  | 3,201 |  |  | 1,801 |  |  | 1,808 |  |  | 1,471 |  | 3 |  |  | 14,268 |
Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 68 |  |  | 406 |  |  | 275 |  |  | 126 |  |  | 141 |  |  | 493 |  |  | — |  | — |  |  | 1,509 |
Special Mention | — |  |  | 2 |  |  | 2 |  |  | — |  |  | 3 |  |  | 1 |  |  | — |  | — |  |  | 8 |
Substandard | — |  |  | 1 |  |  | 3 |  |  | 5 |  |  | 2 |  |  | — |  |  | — |  | — |  |  | 11 |
Doubtful | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 1 |
Total leases | 68 |  |  | 409 |  |  | 280 |  |  | 131 |  |  | 146 |  |  | 495 |  |  | — |  | — |  |  | 1,529 |
Total commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | 2,796 |  |  | 12,892 |  |  | 5,702 |  |  | 5,923 |  |  | 3,700 |  |  | 5,055 |  |  | 22,187 |  | 121 |  |  | 58,376 |
Special Mention | 1 |  |  | 130 |  |  | 108 |  |  | 335 |  |  | 201 |  |  | 194 |  |  | 395 |  | 1 |  |  | 1,365 |
Substandard | — |  |  | 91 |  |  | 92 |  |  | 311 |  |  | 323 |  |  | 336 |  |  | 422 |  | 17 |  |  | 1,592 |
Doubtful | 7 |  |  | 13 |  |  | 28 |  |  | 4 |  |  | 10 |  |  | 27 |  |  | 96 |  | 3 |  |  | 188 |
Total commercial | $2,804 |  |  | $13,126 |  |  | $5,930 |  |  | $6,573 |  |  | $4,234 |  |  | $5,612 |  |  | $23,100 |  | $142 |  |  | $61,521 |
The following table presents the amortized cost basis of commercial loans and leases, by vintage date and regulatory classification rating, as of December 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 | $10,218 |  |  | $3,336 |  |  | $3,599 |  |  | $2,284 |  |  | $1,426 |  |  | $1,863 |  |  | $19,406 |  | $122 |  |  | $42,254 |
Special Mention | 47 |  |  | 71 |  |  | 155 |  |  | 114 |  |  | 41 |  |  | 64 |  |  | 316 |  | 1 |  |  | 809 |
Substandard | 97 |  |  | 112 |  |  | 215 |  |  | 81 |  |  | 50 |  |  | 201 |  |  | 521 |  | 17 |  |  | 1,294 |
Doubtful | 1 |  |  | 9 |  |  | 9 |  |  | 22 |  |  | 10 |  |  | 16 |  |  | 74 |  | 2 |  |  | 143 |
Total commercial and industrial | 10,363 |  |  | 3,528 |  |  | 3,978 |  |  | 2,501 |  |  | 1,527 |  |  | 2,144 |  |  | 20,317 |  | 142 |  |  | 44,500 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 2,766 |  |  | 2,417 |  |  | 3,181 |  |  | 1,756 |  |  | 626 |  |  | 1,119 |  |  | 1,451 |  | 3 |  |  | 13,319 |
Special Mention | 45 |  |  | 42 |  |  | 113 |  |  | 100 |  |  | 27 |  |  | 79 |  |  | — |  | — |  |  | 406 |
Substandard | 27 |  |  | — |  |  | 88 |  |  | 267 |  |  | 78 |  |  | 59 |  |  | 9 |  | — |  |  | 528 |
Doubtful | 1 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 11 |
Total commercial real estate | 2,839 |  |  | 2,468 |  |  | 3,382 |  |  | 2,123 |  |  | 731 |  |  | 1,258 |  |  | 1,460 |  | 3 |  |  | 14,264 |
Leases |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 447 |  |  | 262 |  |  | 134 |  |  | 144 |  |  | 66 |  |  | 459 |  |  | — |  | — |  |  | 1,512 |
Special Mention | 10 |  |  | 15 |  |  | — |  |  | 5 |  |  | 3 |  |  | 16 |  |  | — |  | — |  |  | 49 |
Substandard | 1 |  |  | 16 |  |  | 5 |  |  | 2 |  |  | — |  |  | — |  |  | — |  | — |  |  | 24 |
Doubtful | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  | — |  |  | 1 |
Total leases | 458 |  |  | 293 |  |  | 139 |  |  | 151 |  |  | 69 |  |  | 476 |  |  | — |  | — |  |  | 1,586 |
Total commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass(1) | 13,431 |  |  | 6,015 |  |  | 6,914 |  |  | 4,184 |  |  | 2,118 |  |  | 3,441 |  |  | 20,857 |  | 125 |  |  | 57,085 |
Special Mention | 102 |  |  | 128 |  |  | 268 |  |  | 219 |  |  | 71 |  |  | 159 |  |  | 316 |  | 1 |  |  | 1,264 |
Substandard | 125 |  |  | 128 |  |  | 308 |  |  | 350 |  |  | 128 |  |  | 260 |  |  | 530 |  | 17 |  |  | 1,846 |
Doubtful | 2 |  |  | 18 |  |  | 9 |  |  | 22 |  |  | 10 |  |  | 18 |  |  | 74 |  | 2 |  |  | 155 |
Total commercial | $13,660 |  |  | $6,289 |  |  | $7,499 |  |  | $4,775 |  |  | $2,327 |  |  | $3,878 |  |  | $21,777 |  | $145 |  |  | $60,350 |
For retail loans, Citizens utilizes FICO credit scores and the loan’s payment and delinquency status to monitor credit quality. Management believes FICO scores are the strongest indicator of credit losses over the contractual life of the loan and assist management in predicting the borrower’s future payment performance. Scores are based on current and historical national industry-wide consumer level credit performance data. The following table presents the amortized cost basis of retail loans, by vintage date and FICO scores, as of March 31, 2022:
| Term Loans by Origination Year |  | Revolving Loans |  |
(in millions) | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior to 2018 |  | Within the Revolving Period | Converted to Term |  | Total
Residential mortgages |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | $351 |  |  | $3,332 |  |  | $3,066 |  |  | $1,184 |  |  | $322 |  |  | $2,868 |  |  | $— |  | $— |  |  | $11,123 |
740-799 | 866 |  |  | 3,423 |  |  | 1,690 |  |  | 673 |  |  | 240 |  |  | 1,429 |  |  | — |  | — |  |  | 8,321 |
680-739 | 192 |  |  | 968 |  |  | 540 |  |  | 275 |  |  | 145 |  |  | 800 |  |  | — |  | — |  |  | 2,920 |
620-679 | 18 |  |  | 127 |  |  | 114 |  |  | 170 |  |  | 93 |  |  | 399 |  |  | — |  | — |  |  | 921 |
<620 | — |  |  | 45 |  |  | 82 |  |  | 171 |  |  | 158 |  |  | 435 |  |  | — |  | — |  |  | 891 |
No FICO available(1) | — |  |  | 5 |  |  | 3 |  |  | 4 |  |  | 5 |  |  | 18 |  |  | — |  | — |  |  | 35 |
Total residential mortgages | 1,427 |  |  | 7,900 |  |  | 5,495 |  |  | 2,477 |  |  | 963 |  |  | 5,949 |  |  | — |  | — |  |  | 24,211 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | — |  |  | 1 |  |  | 1 |  |  | 4 |  |  | 5 |  |  | 122 |  |  | 4,492 |  | 310 |  |  | 4,935 |
740-799 | — |  |  | — |  |  | 1 |  |  | 4 |  |  | 6 |  |  | 110 |  |  | 3,564 |  | 296 |  |  | 3,981 |
680-739 | — |  |  | — |  |  | 1 |  |  | 8 |  |  | 13 |  |  | 140 |  |  | 1,774 |  | 258 |  |  | 2,194 |
620-679 | — |  |  | — |  |  | 2 |  |  | 9 |  |  | 19 |  |  | 118 |  |  | 399 |  | 168 |  |  | 715 |
<620 | — |  |  | — |  |  | 2 |  |  | 16 |  |  | 20 |  |  | 103 |  |  | 114 |  | 184 |  |  | 439 |
Total home equity | — |  |  | 1 |  |  | 7 |  |  | 41 |  |  | 63 |  |  | 593 |  |  | 10,343 |  | 1,216 |  |  | 12,264 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 369 |  |  | 1,662 |  |  | 780 |  |  | 481 |  |  | 210 |  |  | 154 |  |  | — |  | — |  |  | 3,656 |
740-799 | 487 |  |  | 2,203 |  |  | 915 |  |  | 531 |  |  | 238 |  |  | 157 |  |  | — |  | — |  |  | 4,531 |
680-739 | 423 |  |  | 1,751 |  |  | 701 |  |  | 414 |  |  | 190 |  |  | 124 |  |  | — |  | — |  |  | 3,603 |
620-679 | 223 |  |  | 919 |  |  | 317 |  |  | 218 |  |  | 109 |  |  | 77 |  |  | — |  | — |  |  | 1,863 |
<620 | 32 |  |  | 291 |  |  | 149 |  |  | 145 |  |  | 91 |  |  | 75 |  |  | — |  | — |  |  | 783 |
No FICO available(1) | 2 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | 3 |
Total automobile | 1,536 |  |  | 6,827 |  |  | 2,862 |  |  | 1,789 |  |  | 838 |  |  | 587 |  |  | — |  | — |  |  | 14,439 |
Education |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 213 |  |  | 1,641 |  |  | 1,687 |  |  | 792 |  |  | 479 |  |  | 1,261 |  |  | — |  | — |  |  | 6,073 |
740-799 | 311 |  |  | 1,600 |  |  | 1,391 |  |  | 587 |  |  | 325 |  |  | 739 |  |  | — |  | — |  |  | 4,953 |
680-739 | 161 |  |  | 513 |  |  | 425 |  |  | 209 |  |  | 126 |  |  | 354 |  |  | — |  | — |  |  | 1,788 |
620-679 | 10 |  |  | 73 |  |  | 64 |  |  | 41 |  |  | 30 |  |  | 121 |  |  | — |  | — |  |  | 339 |
<620 | 1 |  |  | 9 |  |  | 14 |  |  | 12 |  |  | 12 |  |  | 52 |  |  | — |  | — |  |  | 100 |
No FICO available(1) | 2 |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 50 |  |  | — |  | — |  |  | 53 |
Total education | 698 |  |  | 3,837 |  |  | 3,581 |  |  | 1,641 |  |  | 972 |  |  | 2,577 |  |  | — |  | — |  |  | 13,306 |
Other retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 42 |  |  | 229 |  |  | 184 |  |  | 102 |  |  | 52 |  |  | 51 |  |  | 414 |  | — |  |  | 1,074 |
740-799 | 62 |  |  | 294 |  |  | 245 |  |  | 140 |  |  | 66 |  |  | 49 |  |  | 813 |  | 2 |  |  | 1,671 |
680-739 | 54 |  |  | 225 |  |  | 202 |  |  | 103 |  |  | 45 |  |  | 28 |  |  | 810 |  | 4 |  |  | 1,471 |
620-679 | 37 |  |  | 129 |  |  | 99 |  |  | 36 |  |  | 16 |  |  | 9 |  |  | 349 |  | 5 |  |  | 680 |
<620 | 5 |  |  | 38 |  |  | 36 |  |  | 15 |  |  | 8 |  |  | 4 |  |  | 129 |  | 6 |  |  | 241 |
No FICO available(1) | 37 |  |  | 3 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | 381 |  | 1 |  |  | 427 |
Total other retail | 237 |  |  | 918 |  |  | 771 |  |  | 396 |  |  | 187 |  |  | 141 |  |  | 2,896 |  | 18 |  |  | 5,564 |
Total retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 975 |  |  | 6,865 |  |  | 5,718 |  |  | 2,563 |  |  | 1,068 |  |  | 4,456 |  |  | 4,906 |  | 310 |  |  | 26,861 |
740-799 | 1,726 |  |  | 7,520 |  |  | 4,242 |  |  | 1,935 |  |  | 875 |  |  | 2,484 |  |  | 4,377 |  | 298 |  |  | 23,457 |
680-739 | 830 |  |  | 3,457 |  |  | 1,869 |  |  | 1,009 |  |  | 519 |  |  | 1,446 |  |  | 2,584 |  | 262 |  |  | 11,976 |
620-679 | 288 |  |  | 1,248 |  |  | 596 |  |  | 474 |  |  | 267 |  |  | 724 |  |  | 748 |  | 173 |  |  | 4,518 |
<620 | 38 |  |  | 383 |  |  | 283 |  |  | 359 |  |  | 289 |  |  | 669 |  |  | 243 |  | 190 |  |  | 2,454 |
No FICO available(1) | 41 |  |  | 10 |  |  | 8 |  |  | 4 |  |  | 5 |  |  | 68 |  |  | 381 |  | 1 |  |  | 518 |
Total retail | $3,898 |  |  | $19,483 |  |  | $12,716 |  |  | $6,344 |  |  | $3,023 |  |  | $9,847 |  |  | $13,239 |  | $1,234 |  |  | $69,784 |
(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, 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+ | $2,431 |  |  | $3,017 |  |  | $1,230 |  |  | $342 |  |  | $672 |  |  | $2,139 |  |  | $— |  | $— |  |  | $9,831 |
740-799 | 4,015 |  |  | 1,876 |  |  | 746 |  |  | 246 |  |  | 360 |  |  | 1,086 |  |  | — |  | — |  |  | 8,329 |
680-739 | 1,116 |  |  | 572 |  |  | 335 |  |  | 152 |  |  | 172 |  |  | 585 |  |  | — |  | — |  |  | 2,932 |
620-679 | 111 |  |  | 130 |  |  | 161 |  |  | 93 |  |  | 107 |  |  | 276 |  |  | — |  | — |  |  | 878 |
<620 | 24 |  |  | 66 |  |  | 164 |  |  | 162 |  |  | 157 |  |  | 257 |  |  | — |  | — |  |  | 830 |
No FICO available(1) | 3 |  |  | 8 |  |  | 1 |  |  | — |  |  | — |  |  | 10 |  |  | — |  | — |  |  | 22 |
Total residential mortgages | 7,700 |  |  | 5,669 |  |  | 2,637 |  |  | 995 |  |  | 1,468 |  |  | 4,353 |  |  | — |  | — |  |  | 22,822 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | — |  |  | 2 |  |  | 5 |  |  | 5 |  |  | 3 |  |  | 134 |  |  | 4,394 |  | 281 |  |  | 4,824 |
740-799 | — |  |  | 1 |  |  | 4 |  |  | 5 |  |  | 7 |  |  | 122 |  |  | 3,514 |  | 278 |  |  | 3,931 |
680-739 | — |  |  | 1 |  |  | 7 |  |  | 14 |  |  | 16 |  |  | 134 |  |  | 1,738 |  | 243 |  |  | 2,153 |
620-679 | — |  |  | 3 |  |  | 11 |  |  | 19 |  |  | 17 |  |  | 112 |  |  | 363 |  | 167 |  |  | 692 |
<620 | — |  |  | 2 |  |  | 16 |  |  | 23 |  |  | 20 |  |  | 87 |  |  | 91 |  | 176 |  |  | 415 |
Total home equity | — |  |  | 9 |  |  | 43 |  |  | 66 |  |  | 63 |  |  | 589 |  |  | 10,100 |  | 1,145 |  |  | 12,015 |
Automobile |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 1,887 |  |  | 829 |  |  | 538 |  |  | 244 |  |  | 148 |  |  | 57 |  |  | — |  | — |  |  | 3,703 |
740-799 | 2,418 |  |  | 1,051 |  |  | 615 |  |  | 288 |  |  | 156 |  |  | 58 |  |  | — |  | — |  |  | 4,586 |
680-739 | 1,968 |  |  | 827 |  |  | 500 |  |  | 234 |  |  | 123 |  |  | 48 |  |  | — |  | — |  |  | 3,700 |
620-679 | 1,029 |  |  | 378 |  |  | 257 |  |  | 131 |  |  | 72 |  |  | 32 |  |  | — |  | — |  |  | 1,899 |
<620 | 164 |  |  | 142 |  |  | 155 |  |  | 103 |  |  | 62 |  |  | 32 |  |  | — |  | — |  |  | 658 |
No FICO available(1) | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — |  |  | 3 |
Total automobile | 7,469 |  |  | 3,227 |  |  | 2,065 |  |  | 1,000 |  |  | 561 |  |  | 227 |  |  | — |  | — |  |  | 14,549 |
Education |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 1,361 |  |  | 1,771 |  |  | 840 |  |  | 514 |  |  | 470 |  |  | 880 |  |  | — |  | — |  |  | 5,836 |
740-799 | 1,555 |  |  | 1,577 |  |  | 672 |  |  | 371 |  |  | 275 |  |  | 514 |  |  | — |  | — |  |  | 4,964 |
680-739 | 512 |  |  | 474 |  |  | 229 |  |  | 140 |  |  | 107 |  |  | 262 |  |  | — |  | — |  |  | 1,724 |
620-679 | 50 |  |  | 66 |  |  | 45 |  |  | 34 |  |  | 28 |  |  | 99 |  |  | — |  | — |  |  | 322 |
<620 | 5 |  |  | 11 |  |  | 12 |  |  | 12 |  |  | 10 |  |  | 45 |  |  | — |  | — |  |  | 95 |
No FICO available(1) | 4 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 52 |  |  | — |  | — |  |  | 56 |
Total education | 3,487 |  |  | 3,899 |  |  | 1,798 |  |  | 1,071 |  |  | 890 |  |  | 1,852 |  |  | — |  | — |  |  | 12,997 |
Other retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 233 |  |  | 214 |  |  | 122 |  |  | 65 |  |  | 30 |  |  | 29 |  |  | 386 |  | — |  |  | 1,079 |
740-799 | 323 |  |  | 296 |  |  | 173 |  |  | 84 |  |  | 38 |  |  | 26 |  |  | 764 |  | 2 |  |  | 1,706 |
680-739 | 246 |  |  | 240 |  |  | 122 |  |  | 56 |  |  | 23 |  |  | 12 |  |  | 709 |  | 5 |  |  | 1,413 |
620-679 | 149 |  |  | 119 |  |  | 43 |  |  | 19 |  |  | 7 |  |  | 4 |  |  | 299 |  | 5 |  |  | 645 |
<620 | 32 |  |  | 37 |  |  | 17 |  |  | 10 |  |  | 3 |  |  | 2 |  |  | 100 |  | 6 |  |  | 207 |
No FICO available(1) | 44 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 330 |  | 1 |  |  | 380 |
Total other retail | 1,027 |  |  | 911 |  |  | 477 |  |  | 234 |  |  | 101 |  |  | 73 |  |  | 2,588 |  | 19 |  |  | 5,430 |
Total retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
800+ | 5,912 |  |  | 5,833 |  |  | 2,735 |  |  | 1,170 |  |  | 1,323 |  |  | 3,239 |  |  | 4,780 |  | 281 |  |  | 25,273 |
740-799 | 8,311 |  |  | 4,801 |  |  | 2,210 |  |  | 994 |  |  | 836 |  |  | 1,806 |  |  | 4,278 |  | 280 |  |  | 23,516 |
680-739 | 3,842 |  |  | 2,114 |  |  | 1,193 |  |  | 596 |  |  | 441 |  |  | 1,041 |  |  | 2,447 |  | 248 |  |  | 11,922 |
620-679 | 1,339 |  |  | 696 |  |  | 517 |  |  | 296 |  |  | 231 |  |  | 523 |  |  | 662 |  | 172 |  |  | 4,436 |
<620 | 225 |  |  | 258 |  |  | 364 |  |  | 310 |  |  | 252 |  |  | 423 |  |  | 191 |  | 182 |  |  | 2,205 |
No FICO available(1) | 54 |  |  | 13 |  |  | 1 |  |  | — |  |  | — |  |  | 62 |  |  | 330 |  | 1 |  |  | 461 |
Total retail | $19,683 |  |  | $13,715 |  |  | $7,020 |  |  | $3,366 |  |  | $3,083 |  |  | $7,094 |  |  | $12,688 |  | $1,164 |  |  | $67,813 |
(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 tables present an aging analysis of accruing loans and leases, and nonaccrual loans and leases:
| March 31, 2022
|  | Days Past Due and Accruing |  |  |
(in millions) | Current | 30-59 | 60-89 | 90+ | Nonaccrual | Total | Nonaccrual with no related ACL
Commercial and industrial | $45,477 |  | $18 |  | $16 |  | $13 |  | $200 |  | $45,724 |  | $31 |
Commercial real estate | 14,256 |  | — |  | 1 |  | — |  | 11 |  | 14,268 |  | 1 |
Leases | 1,478 |  | 45 |  | — |  | 5 |  | 1 |  | 1,529 |  | — |
Total commercial | 61,211 |  | 63 |  | 17 |  | 18 |  | 212 |  | 61,521 |  | 32 |
Residential mortgages(1) | 23,077 |  | 57 |  | 42 |  | 792 |  | 243 |  | 24,211 |  | 179 |
Home equity | 11,969 |  | 42 |  | 14 |  | — |  | 239 |  | 12,264 |  | 188 |
Automobile | 14,236 |  | 120 |  | 31 |  | — |  | 52 |  | 14,439 |  | 10 |
Education | 13,244 |  | 26 |  | 11 |  | 2 |  | 23 |  | 13,306 |  | 3 |
Other retail | 5,447 |  | 61 |  | 22 |  | 14 |  | 20 |  | 5,564 |  | 1 |
Total retail | 67,973 |  | 306 |  | 120 |  | 808 |  | 577 |  | 69,784 |  | 381 |
Total | $129,184 |  | $369 |  | $137 |  | $826 |  | $789 |  | $131,305 |  | $413 |
| December 31, 2021
|  | Days Past Due and Accruing |  |  |
(in millions) | Current | 30-59 | 60-89 | 90+ | Nonaccrual | Total | Nonaccrual with no related ACL
Commercial and industrial | $44,247 |  | $47 |  | $26 |  | $9 |  | $171 |  | $44,500 |  | $36 |
Commercial real estate | 14,247 |  | 6 |  | — |  | — |  | 11 |  | 14,264 |  | 1 |
Leases | 1,570 |  | 14 |  | 1 |  | — |  | 1 |  | 1,586 |  | — |
Total commercial | 60,064 |  | 67 |  | 27 |  | 9 |  | 183 |  | 60,350 |  | 37 |
Residential mortgages(1) | 21,918 |  | 102 |  | 52 |  | 549 |  | 201 |  | 22,822 |  | 137 |
Home equity | 11,745 |  | 38 |  | 12 |  | — |  | 220 |  | 12,015 |  | 186 |
Automobile | 14,324 |  | 131 |  | 39 |  | — |  | 55 |  | 14,549 |  | 22 |
Education | 12,926 |  | 34 |  | 13 |  | 1 |  | 23 |  | 12,997 |  | 2 |
Other retail | 5,331 |  | 40 |  | 23 |  | 16 |  | 20 |  | 5,430 |  | 2 |
Total retail | 66,244 |  | 345 |  | 139 |  | 566 |  | 519 |  | 67,813 |  | 349 |
Total | $126,308 |  | $412 |  | $166 |  | $575 |  | $702 |  | $128,163 |  | $386 |
(1) 90+ days past due and accruing includes $792 million and $544 million of loans fully or partially guaranteed by the FHA, VA, and USDA at March 31, 2022 and December 31, 2021, respectively. 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. At March 31, 2022 and December 31, 2021, the Company had collateral-dependent residential mortgage and home equity loans totaling $579 million and $542 million, respectively. At March 31, 2022 and December 31, 2021, the Company had collateral-dependent commercial loans totaling $21 million and $103 million, respectively. The amortized cost basis of mortgage loans collateralized by residential real estate for which formal foreclosure proceedings were in process was $189 million and $142 million as of March 31, 2022 and December 31, 2021, respectively. Troubled Debt Restructurings The following tables summarize loans modified during the three months ended March 31, 2022 and 2021. The balances represent the post-modification outstanding amortized cost basis and may include loans that became TDRs during the period and were subsequently 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, 2022
|  |  |  | Amortized Cost Basis
(dollars in millions) | Number of Contracts |  |  | Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3) | Total
Commercial and industrial | 10 |  |  |  | $— |  |  |  | $24 |  |  |  | $7 |  |  | $31 |
Total commercial | 10 |  |  |  | — |  |  |  | 24 |  |  |  | 7 |  |  | 31 |
Residential mortgages | 1,181 |  |  |  | 22 |  |  |  | 14 |  |  |  | 214 |  |  | 250 |
Home equity | 178 |  |  |  | 2 |  |  |  | — |  |  |  | 9 |  |  | 11 |
Automobile | 165 |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  | 2 |
Education | 143 |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  | 6 |
Other retail | 521 |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  | 2 |
Total retail | 2,188 |  |  |  | 27 |  |  |  | 14 |  |  |  | 230 |  |  | 271 |
Total | 2,198 |  |  |  | $27 |  |  |  | $38 |  |  |  | $237 |  |  | $302 |
|  |  |  | Three Months Ended March 31, 2021
|  |  |  | Amortized Cost Basis
(dollars in millions) | Number of Contracts |  |  | Interest Rate Reduction(1) |  | Maturity Extension(2) |  | Other(3) | Total
Commercial and industrial | 7 |  |  |  | $— |  |  |  | $3 |  |  |  | $— |  |  | $3 |
Total commercial | 7 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  | 3 |
Residential mortgages | 42 |  |  |  | 4 |  |  |  | 6 |  |  |  | 3 |  |  | 13 |
Home equity | 147 |  |  |  | 2 |  |  |  | 5 |  |  |  | 4 |  |  | 11 |
Automobile | 669 |  |  |  | — |  |  |  | — |  |  |  | 8 |  |  | 8 |
Education | 147 |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  | 4 |
Other retail | 630 |  |  |  | 3 |  |  |  | — |  |  |  | 1 |  |  | 4 |
Total retail | 1,635 |  |  |  | 9 |  |  |  | 11 |  |  |  | 20 |  |  | 40 |
Total | 1,642 |  |  |  | $9 |  |  |  | $14 |  |  |  | $20 |  |  | $43 |
(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. Modified TDRs resulted in charge-offs of $1 million and $2 million for the three months ended March 31, 2022 and 2021, respectively. Unfunded commitments related to TDRs were $76 million and $56 million at March 31, 2022 and December 31, 2021, respectively. The following table provides a summary of TDRs that defaulted (became 90 days or more past due) within 12 months of their modification date:
|  |  | Three Months Ended March 31,
(dollars in millions) |  |  |  |  | 2022 |  | 2021
Commercial TDRs |  |  |  |  | $— |  |  | $22 |
Retail TDRs(1) |  |  |  |  | 15 |  |  | 15 |
Total |  |  |  |  | $15 |  |  | $37 |
(1) Includes $10 million and $2 million of loans fully or partially government guaranteed by the FHA, VA, and USDA for the three months ended March 31, 2022 and 2021, 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, 2022 and December 31, 2021, Citizens had a significant amount of loans collateralized by residential and commercial real estate. There were no significant concentration risks within the commercial 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 facts surrounding the transaction.

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