Quarterly report pursuant to Section 13 or 15(d)

ALLOWANCE FOR CREDIT LOSSES

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ALLOWANCE FOR CREDIT LOSSES
 9 Months Ended
Sep. 30, 2024
Credit Loss [Abstract]  
ALLOWANCE FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES
Allowance for Credit Losses - Roll-forward
The following tables present ACL activity by portfolio segment.
(dollar amounts in millions) Commercial Consumer Total
Three months ended September 30, 2024
ALLL balance, beginning of period $ 1,587  $ 717  $ 2,304 
Loan and lease charge-offs (74) (55) (129)
Recoveries of loans and leases previously charged-off 20  16  36 
Provision (benefit) for loan and lease losses (35) 59  24 
ALLL balance, end of period $ 1,498  $ 737  $ 2,235 
AULC balance, beginning of period $ 64  $ 55  $ 119 
Provision for unfunded lending commitments 76  6  82 
AULC balance, end of period $ 140  $ 61  $ 201 
ACL balance, end of period $ 1,638  $ 798  $ 2,436 
Three months ended September 30, 2023
ALLL balance, beginning of period $ 1,483  $ 694  $ 2,177 
Loan and lease charge-offs (85) (46) (131)
Recoveries of loans and leases previously charged-off 40  18  58 
Provision for loan and lease losses 66  38  104 
ALLL balance, end of period $ 1,504  $ 704  $ 2,208 
AULC balance, beginning of period $ 78  $ 87  $ 165 
Provision (benefit) for unfunded lending commitments (2) (3) (5)
AULC balance, end of period $ 76  $ 84  $ 160 
ACL balance, end of period $ 1,580  $ 788  $ 2,368 
(dollar amounts in millions) Commercial Consumer Total
Nine months ended September 30, 2024
ALLL balance, beginning of period $ 1,563  $ 692  $ 2,255 
Loan and lease charge-offs (243) (159) (402)
Recoveries of loans and leases previously charged-off 77  50  127 
Provision for loan and lease losses 101  154  255 
ALLL balance, end of period $ 1,498  $ 737  $ 2,235 
AULC balance, beginning of period $ 66  $ 79  $ 145 
Provision (benefit) for unfunded lending commitments 74  (18) 56 
AULC balance, end of period $ 140  $ 61  $ 201 
ACL balance, end of period $ 1,638  $ 798  $ 2,436 
Nine months ended September 30, 2023
ALLL balance, beginning of period $ 1,424  $ 697  $ 2,121 
Loan and lease charge-offs (190) (132) (322)
Recoveries of loans and leases previously charged-off 89  54  143 
Provision for loan and lease losses 181  85  266 
ALLL balance, end of period $ 1,504  $ 704  $ 2,208 
AULC balance, beginning of period $ 71  $ 79  $ 150 
Provision for unfunded lending commitments 5  5  10 
AULC balance, end of period $ 76  $ 84  $ 160 
ACL balance, end of period $ 1,580  $ 788  $ 2,368 
At September 30, 2024, the ACL was $2.4 billion, an increase of $36 million driven by loan and lease portfolio growth compared to December 31, 2023. The commercial ACL was $1.6 billion at both September 30, 2024 and December 31, 2023. The consumer ACL was $798 million at September 30, 2024 and $771 million at December 31, 2023.
The baseline economic scenario used in the September 30, 2024 ACL determination projected the Federal Reserve to have entered into a cycle of rate cuts, with regular cuts forecast throughout the remainder of 2024 through 2026 until reaching a federal funds rate of 3% by 2027. Inflation is forecasted to approach the Federal Reserve’s target level of 2% by the end of 2024. Unemployment is projected to have peaked at 4.2% in the third quarter of 2024. Marginal improvement is expected with unemployment returning to 4.0% by 2026.
The economic scenarios used included elevated levels of uncertainty including the impact of specific challenges in the commercial real estate Industry, recent inflation levels, the U.S. labor market, the expected path of interest rate changes by the Federal Reserve, and the impact of significant conflicts on-going around the world. Given the uncertainty associated with key economic scenario assumptions, the September 30, 2024 ACL included a general reserve that consists of various risk profile components to address uncertainty not measured within the quantitative transaction reserve.