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Credit Quality And Allowance For Credit Losses
 3 Months Ended
Mar. 31, 2023
Credit Loss [Abstract]  
Credit Quality And Allowance For Credit Losses CREDIT QUALITY AND ALLOWANCE FOR CREDIT LOSSES
The following table presents an aging analysis of the amortized cost basis of loans.
Loans Past Due and Still Accruing   
(in millions)30-59
Days		60-89 
Days		90 Days
or More		TotalNonaccrual
Loans		Current
Loans		Total 
Loans
March 31, 2023
Business loans:
Commercial$20 $19 $9 $48 $134 $31,448 $31,630 
Real estate construction:
Commercial Real Estate business line (a)— — — — — 2,946 2,946 
Other business lines (b)— — — — 3 618 621 
Total real estate construction— — — — 3 3,564 3,567 
Commercial mortgage:
Commercial Real Estate business line (a)46 20 — 66 1 4,796 4,863 
Other business lines (b)30 1 11 42 23 8,664 8,729 
Total commercial mortgage76 21 11 108 24 13,460 13,592 
Lease financing5 — — 5 — 761 766 
International8 — — 8 3 1,222 1,233 
Total business loans109 40 20 169 164 50,455 50,788 
Retail loans:
Residential mortgage6 1 — 7 39 1,776 1,822 
Consumer:
Home equity4 2 — 6 18 1,760 1,784 
Other consumer5 1 — 6 — 526 532 
Total consumer9 3 — 12 18 2,286 2,316 
Total retail loans15 4 — 19 57 4,062 4,138 
Total loans$124 $44 $20 $188 $221 $54,517 $54,926 
December 31, 2022
Business loans:
Commercial$238 $13 $20 $271 $142 $30,496 $30,909 
Real estate construction:
Commercial Real Estate business line (a)— — — — — 2,505 2,505 
Other business lines (b)2 — — 2 3 595 600 
Total real estate construction2 — — 2 3 3,100 3,105 
Commercial mortgage:
Commercial Real Estate business line (a)— 6 — 6 1 4,674 4,681 
Other business lines (b)64 5 3 72 22 8,531 8,625 
Total commercial mortgage64 11 3 78 23 13,205 13,306 
Lease financing6 — — 6 — 754 760 
International— 9 — 9 3 1,185 1,197 
Total business loans310 33 23 366 171 48,740 49,277 
Retail loans:
Residential mortgage22 — — 22 53 1,739 1,814 
Consumer:
Home equity4 3 — 7 15 1,754 1,776 
Other consumer5 1 — 6 1 528 535 
Total consumer9 4 — 13 16 2,282 2,311 
Total retail loans31 4 — 35 69 4,021 4,125 
Total loans$341 $37 $23 $401 $240 $52,761 $53,402 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.
The following table presents loans by credit quality indicator (CQI) and vintage year. CQI is based on internal risk ratings assigned to each business loan at the time of approval and subjected to subsequent reviews, generally at least annually, and to pools of retail loans with similar risk characteristics. Vintage year is the year of origination or major modification.
March 31, 2023
Vintage Year
(in millions)20232022202120202019PriorRevolversRevolvers Converted to TermTotal
Business loans:
Commercial:
    Pass (a)$934 $3,690 $3,346 $818 $858 $1,470 $19,089 $10 $30,215 
    Criticized (b)— 105 295 57 110 117 730 1 1,415 
Total commercial934 3,795 3,641 875 968 1,587 19,819 11 31,630 
Commercial gross charge-offs— — — 1 1 9 — — 11 
Real estate construction
    Pass (a)57 1,064 1,316 588 151 119 243 — 3,538 
    Criticized (b)— 26 — 3 — — — — 29 
Total real estate construction57 1,090 1,316 591 151 119 243 — 3,567 
Real estate construction gross charge-offs— — — — — — — — — 
Commercial mortgage
    Pass (a)570 3,388 2,424 1,797 1,275 2,979 810 — 13,243 
    Criticized (b)— 52 17 14 110 155 1 — 349 
Total commercial mortgage570 3,440 2,441 1,811 1,385 3,134 811 — 13,592 
Commercial mortgage gross charge-offs— — — — — — — — — 
Lease financing
    Pass (a)68 289 126 61 43 151 — — 738 
    Criticized (b)— 9 3 2 8 6 — — 28 
Total lease financing68 298 129 63 51 157 — — 766 
Lease financing gross charge-offs— — — — — — — — — 
International
    Pass (a)275 142 124 45 76 22 515 — 1,199 
    Criticized (b)7 4 — 2 — 12 9 — 34 
Total international282 146 124 47 76 34 524 — 1,233 
International gross charge-offs— — — — — — — — — 
Total business loans1,911 8,769 7,651 3,387 2,631 5,031 21,397 11 50,788 
Retail loans:
Residential mortgage
    Pass (a)53 314 391 475 136 414 — — 1,783 
    Criticized (b)1 2 1 — 2 33 — — 39 
Total residential mortgage54 316 392 475 138 447 — — 1,822 
Residential mortgage gross charge-offs— — — — — — — — — 
Consumer:
Home equity
    Pass (a)— — — — — 8 1,717 38 1,763 
    Criticized (b)— — — — — — 18 3 21 
Total home equity— — — — — 8 1,735 41 1,784 
Home equity gross charge-offs— — — — — — 1 — 1 
Other consumer
    Pass (a)6 48 36 50 7 10 372 — 529 
    Criticized (b)— — — — 2 — 1 — 3 
Total other consumer6 48 36 50 9 10 373 — 532 
Other consumer gross charge-offs— — — — — — — — — 
Total consumer6 48 36 50 9 18 2,108 41 2,316 
Total retail loans60 364 428 525 147 465 2,108 41 4,138 
Total loans$1,971 $9,133 $8,079 $3,912 $2,778 $5,496 $23,505 $52 $54,926 
Table continues on the following page.
December 31, 2022
Vintage Year
20222021202020192018PriorRevolversRevolvers Converted to TermTotal
Business loans:
Commercial:
    Pass (a)$3,946 $3,509 $917 $1,041 $598 $1,030 $18,604 $9 $29,654 
    Criticized (b)75 274 81 69 45 78 632 1 1,255 
Total commercial4,021 3,783 998 1,110 643 1,108 19,236 10 30,909 
Real estate construction:
    Pass (a)836 1,134 633 162 102 28 207 — 3,102 
    Criticized (b)— — 3 — — — — — 3 
Total real estate construction836 1,134 636 162 102 28 207 — 3,105 
Commercial mortgage:
    Pass (a)3,349 2,501 1,825 1,394 1,050 2,182 838 — 13,139 
    Criticized (b)7 5 7 32 31 75 10 — 167 
Total commercial mortgage3,356 2,506 1,832 1,426 1,081 2,257 848 — 13,306 
Lease financing
    Pass (a)316 140 64 47 37 130 — — 734 
    Criticized (b)10 — 2 8 5 1 — — 26 
Total lease financing326 140 66 55 42 131 — — 760 
International
    Pass (a)317 161 55 88 19 14 498 — 1,152 
    Criticized (b)12 — 3 — 3 10 17 — 45 
Total international 329 161 58 88 22 24 515 — 1,197 
Total business loans8,868 7,724 3,590 2,841 1,890 3,548 20,806 10 49,277 
Retail loans:
Residential mortgage
    Pass (a)327 398 480 133 68 355 — — 1,761 
    Criticized (b)4 — — 9 1 39 — — 53 
Total residential mortgage331 398 480 142 69 394 — — 1,814 
Consumer:
Home equity
    Pass (a)— — — — — 9 1,708 40 1,757 
    Criticized (b)— — — — — — 17 2 19 
Total home equity— — — — — 9 1,725 42 1,776 
Other consumer
    Pass (a)69 38 50 8 1 10 355 — 531 
    Criticized (b)— — — 1 — — 3 — 4 
Total other consumer69 38 50 9 1 10 358 — 535 
Total consumer69 38 50 9 1 19 2,083 42 2,311 
Total retail loans400 436 530 151 70 413 2,083 42 4,125 
Total loans$9,268 $8,160 $4,120 $2,992 $1,960 $3,961 $22,889 $52 $53,402 
(a)Includes all loans not included in the categories of special mention, substandard or nonaccrual.
(b)Includes loans with an internal rating of special mention, substandard loans for which the accrual of interest has not been discontinued and nonaccrual loans. Special mention loans have potential credit weaknesses that deserve management’s close attention, such as loans to borrowers who may be experiencing financial difficulties that may result in deterioration of repayment prospects from the borrower at some future date. Accruing substandard loans have a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans are also distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. Nonaccrual loans are loans for which the accrual of interest has been discontinued. For further information regarding nonaccrual loans, refer to the Nonperforming Assets subheading in Note 1 - Basis of Presentation and Accounting Policies on page F-49 in the Corporation's 2022 Annual Report. These categories are generally consistent with the "special mention" and "substandard" categories as defined by regulatory authorities. A minority of nonaccrual loans are consistent with the "doubtful" category.

Loan interest receivable totaled $296 million and $261 million at March 31, 2023 and December 31, 2022, respectively, and was included in accrued income and other assets on the Consolidated Balance Sheets.
Allowance for Credit Losses
The following table details the changes in the allowance for credit losses.
 20232022
(in millions)Business LoansRetail LoansTotalBusiness LoansRetail LoansTotal
Three Months Ended March 31
Balance at beginning of period:
Allowance for loan losses$541 $69 $610 $531 $57 $588 
Allowance for credit losses on lending-related commitments40 11 51 24 6 30 
Allowance for credit losses581 80 661 555 63 618 
Loan charge-offs(11)(1)(12)(17)(1)(18)
Recoveries on loans previously charged-off13 1 14 9 1 10 
Net loan recoveries (charge-offs)2 — 2 (8)— (8)
Provision for credit losses:
Provision for loan losses27 2 29 (30)4 (26)
Provision for credit losses on lending-related commitments(1)2 1 9 6 15 
Provision for credit losses26 4 30 (21)10 (11)
Balance at end of period:
Allowance for loan losses570 71 641 493 61 554 
Allowance for credit losses on lending-related commitments39 13 52 33 12 45 
Allowance for credit losses$609 $84 $693 $526 $73 $599 
Allowance for loan losses as a percentage of total loans1.12 %1.71 %1.17 %1.08 %1.61 %1.12 %
Allowance for credit losses as a percentage of total loans1.20 2.04 1.26 1.15 1.92 1.21 
Nonaccrual Loans
The following table presents additional information regarding nonaccrual loans. Interest income of $4 million was recognized on nonaccrual loans for the three months ended March 31, 2023, compared to $2 million at March 31, 2022.
(in millions)Nonaccrual
Loans with
No Related
Allowance		Nonaccrual
Loans with
Related
Allowance		Total
Nonaccrual
Loans
March 31, 2023
Business loans:
Commercial$79 $55 $134 
Real estate construction:
Other business lines (a)— 3 3 
Commercial mortgage:
Commercial Real Estate business line (b)— 1 1 
Other business lines (a)2 21 23 
Total commercial mortgage2 22 24 
International3 — 3 
Total business loans84 80 164 
Retail loans:
Residential mortgage36 3 39 
Consumer:
Home equity18 — 18 
Total retail loans54 3 57 
Total nonaccrual loans$138 $83 $221 
December 31, 2022
Business loans:
Commercial$64 $78 $142 
Real estate construction:
Other business lines (a)— 3 3 
Commercial mortgage:
Commercial Real Estate business line (b)— 1 1 
Other business lines (a)4 18 22 
Total commercial mortgage4 19 23 
International3 — 3 
Total business loans71 100 171 
Retail loans:
Residential mortgage53 — 53 
Consumer:
Home equity15 — 15 
Other consumer1 — 1 
Total consumer16 — 16 
Total retail loans69 — 69 
Total nonaccrual loans$140 $100 $240 
(a)Primarily loans secured by owner-occupied real estate.
(b)Primarily loans to real estate developers.

Foreclosed Properties
Foreclosed properties were insignificant at both March 31, 2023 and December 31, 2022. Retail loans secured by residential real estate properties in process of foreclosure included in nonaccrual loans were insignificant at both March 31, 2023 and December 31, 2022.
Loan Modifications Made to Borrowers Experiencing Financial Difficulty
Effective January 1, 2023, the Corporation adopted the provisions of ASU 2022-02, which eliminated the accounting for TDRs while expanding loan modification and vintage disclosure requirements. Please see Note 1 to the consolidated financial statements for further information.
The following table displays the amortized cost basis at March 31, 2023 of loan modifications made to borrowers experiencing financial difficulty that were restructured during the three months ended March 31, 2023 by type of modification.
(in millions)Term Extension (a)Other (b)TotalPercent of Total Class
For the Three Months Ended March 31, 2023
Business loans:
Commercial$7 $1 $8 0.02 %
Commercial mortgage:
Commercial Real Estate business line (c)1 5 6 0.11 
Other business lines (d)1 — 1 0.02 
Total commercial mortgage2 5 7 0.05 
Total business loans$9 $6 $15 0.03 %
Retail loans:
Consumer:
Other consumer$1 $— $1 0.10 
Total consumer1 — 1 0.04 
Total retail loans1 — 1 0.02 
Total loans$10 $6 $16 0.03 %
(a)Represents loan balances where terms were extended by more than an insignificant time period, typically more than 180 days, at or above contractual interest rates.
(b)Relates to FDMs where more than one type of modification was made. For the three months ended March 31, 2023, this primarily related to modifications where the interest rate was reduced and the term was extended.
(c)Primarily loans to real estate developers.
(d)Primarily loans secured by owner-occupied real estate.
No modifications involved forgiveness of principal. There were no commitments to lend additional funds to borrowers experiencing financial difficulty whose terms have been restructured at March 31, 2023.
The following table summarizes the financial impacts of loan modifications made to specific loans during the three months ended March 31, 2023.
Weighted-Average Interest Rate ReductionWeighted-Average Term Extension
(in months)
For the Three Months Ended March 31, 2023
Business loans:
Commercial(0.25)%17.9
Commercial mortgage:
Commercial Real Estate business line (a)(0.27)21.2
Other business lines (b)— 7.4
Total commercial mortgage(0.27)18.4
Total business loans(0.27)%18.2
Retail loans:
Consumer:
Other consumer— 10.0
Total consumer— 10.0
Total retail loans— 10.0
Total loans(0.27)%17.9 
(a)Primarily loans to real estate developers.
(b)Primarily loans secured by owner-occupied real estate.
On an ongoing basis, the Corporation monitors the performance of modified loans related to their restructured terms. Loans restructured during the three months ended March 31, 2023 were current under modified terms at March 31, 2023. Nonperforming restructured loans are classified as nonaccrual loans and are individually evaluated in the allowance for loan losses.
For restructured loans, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due or classified into nonaccrual status during the reporting period. Of the loans restructured during the three-month period ended March 31, 2023 (since adoption of ASU 2022-02), there were no subsequent defaults.
Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02
The following table details the amortized cost basis at March 31, 2022 of loans considered to be TDRs that were restructured during the three months ended March 31, 2022, by type of modification. In cases of loans with more than one type of modification, the loans were categorized based on the most significant modification.
(in millions)Principal Deferrals (a)
Three Months Ended March 31, 2022
Commercial$21 
Consumer:
Home equity (b)2 
Total loans$23 
(a)Primarily represents loan balances where terms were extended by more than an insignificant time period, typically more than 180 days, at or above contractual interest rates. Also includes commercial loans restructured in bankruptcy.
(b)Includes bankruptcy loans for which the court has discharged the borrower's obligation and the borrower has not reaffirmed the debt.
The Corporation charged interest on principal balances outstanding during deferral periods. Additionally, none of the modifications involved forgiveness of principal. There were no significant commitments to lend additional funds to borrowers whose terms had been modified in TDRs at December 31, 2022.
For principal deferrals, incremental deterioration in the credit quality of the loan, represented by a downgrade in the risk rating of the loan, for example, due to missed interest payments or a reduction of collateral value, was considered a subsequent default. For interest rate reductions, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due. Of the TDRs modified during the twelve-month period ended March 31, 2022, there were no subsequent defaults of principal deferrals or interest rate reductions in the three-month period ended March 31, 2022.