| Loans and Allowance for Credit Losses | NOTE 4 Loans and Allowance for Credit Losses The composition of the loan portfolio, by class and underlying specific portfolio type, was as follows: June 30, 2024 December 31, 2023 (Dollars in Millions) Amount Percent of Total Amount Percent of Total Commercial Commercial $ 131,043 34.9 % $ 127,676 34.2 % Lease financing 4,205 1.1 4,205 1.1 Total commercial 135,248 36.0 131,881 35.3 Commercial Real Estate Commercial mortgages 40,844 10.9 41,934 11.2 Construction and development 11,043 2.9 11,521 3.1 Total commercial real estate 51,887 13.8 53,455 14.3 Residential Mortgages Residential mortgages 110,680 29.4 108,605 29.0 Home equity loans, first liens 6,467 1.7 6,925 1.9 Total residential mortgages 117,147 31.1 115,530 30.9 Credit Card 28,715 7.6 28,560 7.6 Other Retail Retail leasing 4,178 1.1 4,135 1.1 Home equity and second mortgages 13,180 3.5 13,056 3.5 Revolving credit 3,597 1.0 3,668 1.0 Installment 14,169 3.8 13,889 3.7 Automobile 8,012 2.1 9,661 2.6 Total other retail 43,136 11.5 44,409 11.9 Total loans $ 376,133 100.0 % $ 373,835 100.0 % The Company had loans of $125.5 billion at June 30, 2024, and $123.1 billion at December 31, 2023, pledged at the Federal Home Loan Bank, and loans of $83.2 billion at June 30, 2024, and $82.8 billion at December 31, 2023, pledged at the Federal Reserve Bank. Originated loans are reported at the principal amount outstanding, net of unearned interest and deferred fees and costs, and any partial charge-offs recorded. Purchased loans are recorded at fair value at the date of purchase. Net unearned interest and deferred fees and costs on originated loans and unamortized premiums and discounts on purchased loans amounted to $2.7 billion at June 30, 2024 and December 31, 2023. The Company evaluates purchased loans for more-than-insignificant deterioration at the date of purchase in accordance with applicable authoritative accounting guidance. Purchased loans that have experienced more-than-insignificant deterioration from origination are considered purchased credit deteriorated loans. All other purchased loans are considered non-purchased credit deteriorated loans. Allowance for Credit Losses The allowance for credit losses is established for current expected credit losses on the Company’s loan and lease portfolio, including unfunded credit commitments. The allowance considers expected losses for the remaining lives of the applicable assets, inclusive of expected recoveries. The allowance for credit losses is increased through provisions charged to earnings and reduced by net charge-offs. Management evaluates the appropriateness of the allowance for credit losses on a quarterly basis. Multiple economic scenarios are considered over a three-year reasonable and supportable forecast period, which includes increasing consideration of historical loss experience over years two and three. These economic scenarios are constructed with interrelated projections of multiple economic variables, and loss estimates are produced that consider the historical correlation of those economic variables with credit losses. After the forecast period, the Company fully reverts to long-term historical loss experience, adjusted for prepayments and characteristics of the current loan and lease portfolio, to estimate losses over the remaining life of the portfolio. The economic scenarios are updated at least quarterly and are designed to provide a range of reasonable estimates, from better to worse than current expectations. Scenarios are weighted based on the Company’s expectation of economic conditions for the foreseeable future and reflect significant judgment and consideration of economic forecast uncertainty. Final loss estimates also consider factors affecting credit losses not reflected in the scenarios, due to the unique aspects of current conditions and expectations. These factors may include, but are not limited to, loan servicing practices, regulatory guidance, and/or fiscal and monetary policy actions. The allowance recorded for credit losses utilizes forward-looking expected loss models to consider a variety of factors affecting lifetime credit losses. These factors include, but are not limited to, macroeconomic variables such as unemployment rates, real estate prices, gross domestic product levels, inflation, interest rates and corporate bonds spreads, as well as loan and borrower characteristics, such as internal risk ratings on commercial loans and consumer credit scores, delinquency status, collateral type and available valuation information, consideration of end-of-term losses on lease residuals, and the remaining term of the loan, adjusted for expected prepayments. For each loan portfolio, including those loans modified under various loan modification programs, model estimates are adjusted as necessary to consider any relevant changes in portfolio composition, lending policies, underwriting standards, risk management practices, economic conditions or other factors that would affect the accuracy of the model. Expected credit loss estimates also include consideration of expected cash recoveries on loans previously charged-off or expected recoveries on collateral dependent loans where recovery is expected through sale of the collateral at fair value less selling costs. Where loans do not exhibit similar risk characteristics, an individual analysis is performed to consider expected credit losses. The allowance recorded for individually evaluated loans greater than $5 million in the commercial lending segment is based on an analysis utilizing expected cash flows discounted using the original effective interest rate, the observable market price of the loan, or the fair value of the collateral, less selling costs, for collateral-dependent loans as appropriate. For smaller commercial loans collectively evaluated for impairment, historical loss experience is also incorporated into the allowance methodology applied to this category of loans. The Company’s methodology for determining the appropriate allowance for credit losses also considers the imprecision inherent in the methodologies used and allocated to the various loan portfolios. As a result, amounts determined under the methodologies described above are adjusted by management to consider the potential impact of other qualitative factors not captured in the quantitative model adjustments which include, but are not limited to, the following: model imprecision, imprecision in economic scenario assumptions, and emerging risks related to either changes in the environment that are affecting specific portfolios, or changes in portfolio concentrations over time that may affect model performance. The consideration of these items results in adjustments to allowance amounts included in the Company’s allowance for credit losses for each loan portfolio. The Company also assesses the credit risk associated with off-balance sheet loan commitments, letters of credit, investment securities and derivatives. Credit risk associated with derivatives is reflected in the fair values recorded for those positions. The liability for off-balance sheet credit exposure related to loan commitments and other credit guarantees is included in other liabilities. Because business processes and credit risks associated with unfunded credit commitments are essentially the same as for loans, the Company utilizes similar processes to estimate its liability for unfunded credit commitments. The results of the analysis are evaluated quarterly to confirm the estimates are appropriate for each specific loan portfolio, as well as the entire loan portfolio, as the entire allowance for credit losses is available for the entire loan portfolio. Activity in the allowance for credit losses by portfolio class was as follows: Three Months Ended June 30 Commercial Commercial Real Estate Residential Mortgages Credit Card Other Retail Total Loans 2024 Balance at beginning of period $ 2,159 $ 1,629 $ 843 $ 2,425 $ 848 $ 7,904 Add Provision for credit losses 164 3 (11) 388 24 568 Deduct Loans charged-off 180 38 3 358 73 652 Less recoveries of loans charged-off (37) (2) (7) (43) (25) (114) Net loan charge-offs (recoveries) 143 36 (4) 315 48 538 Balance at end of period $ 2,180 $ 1,596 $ 836 $ 2,498 $ 824 $ 7,934 2023 Balance at beginning of period $ 2,180 $ 1,359 $ 947 $ 2,112 $ 925 $ 7,523 Add Provision for credit losses 119 140 66 272 224 821 Deduct Loans charged-off 110 31 121 242 251 755 Less recoveries of loans charged-off (20) (5) (7) (43) (31) (106) Net loan charge-offs (recoveries) 90 26 114 199 220 649 Balance at end of period $ 2,209 $ 1,473 $ 899 $ 2,185 $ 929 $ 7,695 Six Months Ended June 30 Commercial Commercial Real Estate Residential Mortgages Credit Card Other Retail Total Loans 2024 Balance at beginning of period $ 2,119 $ 1,620 $ 827 $ 2,403 $ 870 $ 7,839 Add Provision for credit losses 320 33 5 706 57 1,121 Deduct Loans charged-off 319 72 7 695 154 1,247 Less recoveries of loans charged-off (60) (15) (11) (84) (51) (221) Net loan charge-offs (recoveries) 259 57 (4) 611 103 1,026 Balance at end of period $ 2,180 $ 1,596 $ 836 $ 2,498 $ 824 $ 7,934 2023 Balance at beginning of period $ 2,163 $ 1,325 $ 926 $ 2,020 $ 970 $ 7,404 Add Change in accounting principle (a) — — (31) (27) (4) (62) Allowance for acquired credit losses (b) — 127 — — — 127 Provision for credit losses 183 164 117 566 218 1,248 Deduct Loans charged-off 173 154 125 457 315 1,224 Less recoveries of loans charged-off (36) (11) (12) (83) (60) (202) Net loan charge-offs (recoveries) 137 143 113 374 255 1,022 Balance at end of period $ 2,209 $ 1,473 $ 899 $ 2,185 $ 929 $ 7,695 (a) Effective January 1, 2023, the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restructurings. (b) Represents allowance for acquired credit deteriorated and charged-off loans. The increase in the allowance for credit losses at June 30, 2024, compared with December 31, 2023, was primarily driven by credit migration in consumer and small business cards and portfolio growth. The following table provides a summary of loans charged-off by portfolio class and year of origination: Three Months Ended June 30 Commercial Commercial Residential Mortgages (b) Credit Card (c) Other Retail (d) Total Loans 2024 Originated in 2024 $ 3 $ 36 $ — $ — $ — $ 39 Originated in 2023 26 2 — — 11 39 Originated in 2022 66 — 1 — 14 81 Originated in 2021 7 — — — 10 17 Originated in 2020 2 — — — 5 7 Originated prior to 2020 11 — 2 — 8 21 Revolving 65 — — 358 25 448 Total charge-offs $ 180 $ 38 $ 3 $ 358 $ 73 $ 652 2023 Originated in 2023 $ 7 $ — $ — $ — $ 46 $ 53 Originated in 2022 34 — — — 89 123 Originated in 2021 4 17 5 — 46 72 Originated in 2020 6 — 8 — 19 33 Originated in 2019 2 — 15 — 13 30 Originated prior to 2019 17 14 93 — 5 129 Revolving 40 — — 242 5 287 Revolving converted to term — — — — 28 28 Total charge-offs $ 110 $ 31 $ 121 $ 242 $ 251 $ 755 Six Months Ended June 30 Commercial Commercial Real Estate (a) Residential Mortgages (b) Credit Card (c) Other Retail (d) Total Loans 2024 Originated in 2024 $ 3 $ 41 $ — $ — $ 2 $ 46 Originated in 2023 52 6 — — 21 79 Originated in 2022 84 24 1 — 28 137 Originated in 2021 15 — — — 21 36 Originated in 2020 6 — — — 13 19 Originated prior to 2020 21 1 6 — 19 47 Revolving 138 — — 695 50 883 Total charge-offs $ 319 $ 72 $ 7 $ 695 $ 154 $ 1,247 2023 Originated in 2023 $ 7 $ — $ — $ — $ 46 $ 53 Originated in 2022 40 88 — — 99 227 Originated in 2021 8 17 5 — 57 87 Originated in 2020 10 — 8 — 25 43 Originated in 2019 7 3 16 — 20 46 Originated prior to 2019 28 46 96 — 13 183 Revolving 73 — — 457 27 557 Revolving converted to term — — — — 28 28 Total charge-offs $ 173 $ 154 $ 125 $ 457 $ 315 $ 1,224 Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominantly all current year and near term loan origination years for gross charge-offs relate to existing loans that have had recent maturity date, pricing or commitment amount amendments. (a) Includes $91 million of charge-offs in the first quarter of 2023 related to uncollectible amounts on acquired loans. (b) Includes $117 million of charge-offs related to balance sheet repositioning and capital management actions taken in the second quarter of 2023. (c) Predominantly all credit card loans are considered revolving loans. Includes an immaterial amount of charge-offs related to revolving converted to term loans. (d) Includes $192 million of charge-offs related to balance sheet repositioning and capital management actions taken in the second quarter of 2023. Credit Quality The credit quality of the Company’s loan portfolios is assessed as a function of net credit losses, levels of nonperforming assets and delinquencies, and credit quality ratings as defined by the Company. For all loan portfolio classes, loans are considered past due based on the number of days delinquent except for monthly amortizing loans which are classified delinquent based upon the number of contractually required payments not made (for example, two missed payments is considered 30 days delinquent). When a loan is placed on nonaccrual status, unpaid accrued interest is reversed, reducing interest income in the current period. Commercial lending segment loans are generally placed on nonaccrual status when the collection of principal and interest has become 90 days past due or is otherwise considered doubtful. Commercial lending segment loans are generally fully charged down if unsecured by collateral or partially charged down to the fair value of the collateral securing the loan, less costs to sell, when the loan is placed on nonaccrual. Consumer lending segment loans are generally charged-off at a specific number of days or payments past due. Residential mortgages and other retail loans secured by 1-4 family properties are generally charged down to the fair value of the collateral securing the loan, less costs to sell, at 180 days past due. Residential mortgage loans and lines in a first lien position are placed on nonaccrual status in instances where a partial charge-off occurs unless the loan is well secured and in the process of collection. Residential mortgage loans and lines in a junior lien position secured by 1-4 family properties are placed on nonaccrual status at 120 days past due or when they are behind a first lien that has become 180 days or greater past due or placed on nonaccrual status. Any secured consumer lending segment loan whose borrower has had debt discharged through bankruptcy, for which the loan amount exceeds the fair value of the collateral, is charged down to the fair value of the related collateral and the remaining balance is placed on nonaccrual status. Credit card loans continue to accrue interest until the account is charged-off. Credit cards are charged-off at 180 days past due. Other retail loans not secured by 1-4 family properties are charged-off at 120 days past due, and revolving consumer lines are charged-off at 180 days past due. Similar to credit cards, other retail loans are generally not placed on nonaccrual status because of the relative short period of time to charge-off. Certain retail customers having financial difficulties may have the terms of their credit card and other loan agreements modified to require only principal payments and, as such, are reported as nonaccrual. For all loan classes, interest payments received on nonaccrual loans are generally recorded as a reduction to a loan’s carrying amount while a loan is on nonaccrual and are recognized as interest income upon payoff of the loan. However, interest income may be recognized for interest payments received if the remaining carrying amount of the loan is believed to be collectible. In certain circumstances, loans in any class may be restored to accrual status, such as when a loan has demonstrated sustained repayment performance or no amounts are past due and prospects for future payment are no longer in doubt, or when the loan becomes well secured and is in the process of collection. Loans where there has been a partial charge-off may be returned to accrual status if all principal and interest (including amounts previously charged-off) is expected to be collected and the loan is current. The following table provides a summary of loans by portfolio class, including the delinquency status of those that continue to accrue interest, and those that are nonperforming: Accruing (Dollars in Millions) Current 30-89 Days Past Due 90 Days or More Past Due Nonperforming (b) Total June 30, 2024 Commercial $ 134,317 $ 288 $ 87 $ 556 $ 135,248 Commercial real estate 50,897 22 9 959 51,887 Residential mortgages (a) 116,681 142 170 154 117,147 Credit card 27,957 384 374 — 28,715 Other retail 42,700 234 61 141 43,136 Total loans $ 372,552 $ 1,070 $ 701 $ 1,810 $ 376,133 December 31, 2023 Commercial $ 130,925 $ 464 $ 116 $ 376 $ 131,881 Commercial real estate 52,619 55 4 777 53,455 Residential mortgages (a) 115,067 169 136 158 115,530 Credit card 27,779 406 375 — 28,560 Other retail 43,926 278 67 138 44,409 Total loans $ 370,316 $ 1,372 $ 698 $ 1,449 $ 373,835 (a) At June 30, 2024, $561 million of loans 30–89 days past due and $1.7 billion of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current, compared with $595 million and $2.0 billion at December 31, 2023, respectively. (b) Substantially all nonperforming loans at June 30, 2024 and December 31, 2023, had an associated allowance for credit losses. The Company recognized interest income on nonperforming loans of $6 million and $3 million for the three months ended June 30, 2024 and 2023, respectively, and $11 million and $7 million for the six months ended June 30, 2024 and 2023, respectively . At June 30, 2024, the amount of foreclosed residential real estate held by the Company, and included in OREO, was $23 million, compared with $26 million at December 31, 2023. These amounts excluded $49 million and $47 million at June 30, 2024 and December 31, 2023, respectively, of foreclosed residential real estate related to mortgage loans whose payments are primarily insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. In addition, the amount of residential mortgage loans secured by residential real estate in the process of foreclosure at June 30, 2024 and December 31, 2023, was $605 million and $728 million, respectively, of which $379 million and $487 million, respectively, related to loans purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs. The Company classifies its loan portfolio classes using internal credit quality ratings on a quarterly basis. These ratings include pass, special mention and classified, and are an important part of the Company’s overall credit risk management process and evaluation of the allowance for credit losses. Loans with a pass rating represent those loans not classified on the Company’s rating scale for problem credits, as minimal credit risk has been identified. Special mention loans are those loans that have a potential weakness deserving management’s close attention. Classified loans are those loans where a well-defined weakness has been identified that may put full collection of contractual cash flows at risk. It is possible that others, given the same information, may reach different reasonable conclusions regarding the credit quality rating classification of specific loans. The following table provides a summary of loans by portfolio class and the Company’s internal credit quality rating: June 30, 2024 December 31, 2023 Criticized Criticized (Dollars in Millions) Pass Special Mention Classified (a) Total Criticized Total Pass Special Mention Classified (a) Total Criticized Total Commercial Originated in 2024 $ 27,054 $ 272 $ 496 $ 768 $ 27,822 $ — $ — $ — $ — $ — Originated in 2023 30,508 349 894 1,243 31,751 43,023 827 856 1,683 44,706 Originated in 2022 29,451 274 970 1,244 30,695 40,076 274 632 906 40,982 Originated in 2021 6,738 143 116 259 6,997 9,219 117 154 271 9,490 Originated in 2020 2,843 61 102 163 3,006 3,169 92 71 163 3,332 Originated prior to 2020 4,948 9 98 107 5,055 5,303 30 209 239 5,542 Revolving (b) 28,585 279 1,058 1,337 29,922 26,213 362 1,254 1,616 27,829 Total commercial 130,127 1,387 3,734 5,121 135,248 127,003 1,702 3,176 4,878 131,881 Commercial real estate Originated in 2024 4,385 194 912 1,106 5,491 — — — — — Originated in 2023 6,788 160 1,566 1,726 8,514 8,848 465 2,206 2,671 11,519 Originated in 2022 10,515 736 1,303 2,039 12,554 11,831 382 1,141 1,523 13,354 Originated in 2021 7,919 377 626 1,003 8,922 9,235 500 385 885 10,120 Originated in 2020 3,218 44 144 188 3,406 3,797 51 87 138 3,935 Originated prior to 2020 9,550 93 923 1,016 10,566 10,759 458 619 1,077 11,836 Revolving 2,365 11 58 69 2,434 2,613 6 70 76 2,689 Revolving converted to term — — — — — 2 — — — 2 Total commercial real estate 44,740 1,615 5,532 7,147 51,887 47,085 1,862 4,508 6,370 53,455 Residential mortgages (c) Originated in 2024 5,067 — 1 1 5,068 — — — — — Originated in 2023 9,343 — 9 9 9,352 9,734 — 5 5 9,739 Originated in 2022 28,891 — 24 24 28,915 29,146 — 17 17 29,163 Originated in 2021 35,541 — 25 25 35,566 36,365 — 16 16 36,381 Originated in 2020 14,245 — 12 12 14,257 14,773 — 9 9 14,782 Originated prior to 2020 23,731 — 258 258 23,989 25,202 — 262 262 25,464 Revolving — — — — — 1 — — — 1 Total residential mortgages 116,818 — 329 329 117,147 115,221 — 309 309 115,530 Credit card (d) 28,341 — 374 374 28,715 28,185 — 375 375 28,560 Other retail Originated in 2024 4,046 — 2 2 4,048 — — — — — Originated in 2023 4,554 — 6 6 4,560 5,184 — 4 4 5,188 Originated in 2022 4,830 — 11 11 4,841 5,607 — 12 12 5,619 Originated in 2021 8,396 — 14 14 8,410 10,398 — 15 15 10,413 Originated in 2020 3,434 — 7 7 3,441 4,541 — 9 9 4,550 Originated prior to 2020 3,339 2 16 18 3,357 4,008 — 20 20 4,028 Revolving 13,600 — 107 107 13,707 13,720 — 104 104 13,824 Revolving converted to term 725 — 47 47 772 735 — 52 52 787 Total other retail 42,924 2 210 212 43,136 44,193 — 216 216 44,409 Total loans $ 362,950 $ 3,004 $ 10,179 $ 13,183 $ 376,133 $ 361,687 $ 3,564 $ 8,584 $ 12,148 $ 373,835 Total outstanding commitments $ 764,699 $ 4,690 $ 12,170 $ 16,860 $ 781,559 $ 762,869 $ 5,053 $ 10,470 $ 15,523 $ 778,392 Note: Year of origination is based on the origination date of a loan, or for existing loans the date when the maturity date, pricing or commitment amount is amended. Predominately all current year and near term loan origination years for criticized loans relate to existing loans that have had recent maturity date, pricing or commitment amount amendments. (a) Classified rating on consumer loans primarily based on delinquency status. (b) Includes an immaterial amount of revolving converted to term loans. (c) At June 30, 2024, $1.7 billion of GNMA loans 90 days or more past due and $1.5 billion of modified GNMA loans whose repayments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs were classified with a pass rating, compared with $2.0 billion and $1.2 billion at December 31, 2023, respectively. (d) Predominately all credit card loans are considered revolving loans. Includes an immaterial amount of revolving converted to term loans. Loan Modifications In certain circumstances, the Company may modify the terms of a loan to maximize the collection of amounts due when a borrower is experiencing financial difficulties or is expected to experience difficulties in the near-term. The Company recognizes interest on modified loans if full collection of contractual principal and interest is expected. The effects of modifications on credit loss expectations, such as improved payment capacity, longer expected lives and other factors, are considered when measuring the allowance for credit losses. Modification performance, including redefault rates and how these compare to historical losses, are also considered. Modifications generally do not result in significant changes to the Company’s allowance for credit losses. The following table provides a summary of period-end balances of loans modified during the periods presented, by portfolio class and modification granted: Three Months Ended June 30 Interest Rate Reduction Payment Delay Term Extension Multiple Modifications (a) Total Modifications Percent of Class Total 2024 Commercial $ 23 $ — $ 253 $ — $ 276 .2 % Commercial real estate 78 — 391 7 476 .9 Residential mortgages (b) — 9 7 6 22 — Credit card 116 — — — 116 .4 Other retail 2 — 33 1 36 .1 Total loans, excluding loans purchased from GNMA mortgage pools 219 9 684 14 926 .2 Loans purchased from GNMA mortgage pools (b) — 474 109 122 705 .6 Total loans $ 219 $ 483 $ 793 $ 136 $ 1,631 .4 % 2023 Commercial $ 13 $ — $ 136 $ — $ 149 .1 % Commercial real estate — — 101 — 101 .2 Residential mortgages (b) — 79 6 4 89 .1 Credit card 91 — — — 91 .3 Other retail 2 14 39 1 56 .1 Total loans, excluding loans purchased from GNMA mortgage pools 106 93 282 5 486 .1 Loans purchased from GNMA mortgage pools (b) — 453 86 98 637 .6 Total loans $ 106 $ 546 $ 368 $ 103 $ 1,123 .3 % Six Months Ended June 30 Interest Rate Reduction Payment Delay Term Extension Multiple Modifications (a) Total Modifications Percent of Class Total 2024 Commercial $ 44 $ — $ 452 $ — $ 496 .4 % Commercial real estate 78 — 629 7 714 1.4 Residential mortgages (b) — 28 12 9 49 — Credit card 228 — — — 228 .8 Other retail 4 1 69 1 75 .2 Total loans, excluding loans purchased from GNMA mortgage pools 354 29 1,162 17 1,562 .4 Loans purchased from GNMA mortgage pools (b) 1 908 173 204 1,286 1.1 Total loans $ 355 $ 937 $ 1,335 $ 221 $ 2,848 .8 % 2023 Commercial $ 159 $ — $ 159 $ — $ 318 .2 % Commercial real estate — — 109 — 109 .2 Residential mortgages (b) — 202 15 16 233 .2 Credit card 174 — — — 174 .7 Other retail 4 18 81 3 106 .2 Total loans, excluding loans purchased from GNMA mortgage pools 337 220 364 19 940 .2 Loans purchased from GNMA mortgage pools (b) — 649 147 143 939 .8 Total loans $ 337 $ 869 $ 511 $ 162 $ 1,879 .5 % (a) Includes $111 million of total loans receiving a payment delay and term extension, $17 million of total loans receiving an interest rate reduction and term extension and $8 million of total loans receiving an interest rate reduction, payment delay and term extension for the three months ended June 30, 2024, compared with $100 million, $2 million and $1 million for the three months ended June 30, 2023, respectively. Includes $189 million of total loans receiving a payment delay and term extension, $20 million of total loans receiving an interest rate reduction and term extension and $12 million of total loans receiving an interest rate reduction, payment delay and term extension for the six months ended June 30, 2024, compared with $151 million, $5 million and $6 million for the six months ended June 30, 2023, respectively. (b) Percent of class total amounts expressed as a percent of total residential mortgage loan balances. Loan modifications included in the table above exclude trial period arrangements offered to customers and secured loans to consumer borrowers that have had debt discharged through bankruptcy where the borrower has not reaffirmed the debt during the periods presented. At June 30, 2024 the balance of loans modified in trial period arrangements was $43 million, while the balance of secured loans to consumer borrowers that have had debt discharged through bankruptcy was not material. The following table summarizes the effects of loan modifications made to borrowers on loans modified: Three Months Ended June 30 Weighted-Average Interest Rate Reduction Weighted-Average Months of Term Extension 2024 Commercial (a) 20.6 % 5 Commercial real estate 2.2 8 Residential mortgages .5 86 Credit card 16.3 — Other retail 7.6 5 Loans purchased from GNMA mortgage pools .5 119 2023 Commercial 21.3 % 8 Commercial real estate — 10 Residential mortgages 1.4 89 Credit card 16.4 — Other retail 8.6 108 Loans purchased from GNMA mortgage pools .7 87 Six Months Ended June 30 Weighted-Average Interest Rate Reduction Weighted-Average Months of Term Extension 2024 Commercial (a) 20.0 % 7 Commercial real estate 2.2 9 Residential mortgages .7 85 Credit card 16.3 — Other retail 8.4 4 Loans purchased from GNMA mortgage pools .5 116 2023 Commercial 3.3 % 7 Commercial real estate — 10 Residential mortgages 1.4 111 Credit card 16.2 — Other retail 7.3 134 Loans purchased from GNMA mortgage pools .7 79 Note: The weighted-average payment deferral for all portfolio classes was less than $1 million for the three and six months ended June 30, 2024 and 2023. Forbearance payments are required to be paid at the end of the original term loan. (a) The weighted-average interest rate reduction for commercial loans for the three and six months ended June 30, 2024, was primarily driven by commercial cards. For the commercial lending segment, modifications generally result in the Company working with borrowers on a case-by-case basis. Commercial and commercial real estate modifications generally include extensions of the maturity date and may be accompanied by an increase or decrease to the interest rate. In addition, the Company may work with the borrower in identifying other changes that mitigate loss to the Company, which may include additional collateral or guarantees to support the loan. To a lesser extent, the Company may provide an interest rate reduction. Modifications for the consumer lending segment are generally part of programs the Company has initiated. The Company modifies residential mortgage loans under Federal Housing Administration, United States Department of Veterans Affairs, or its own internal programs. Under these programs, the Company offers qualifying homeowners the opportunity to permanently modify their loan and achieve more affordable monthly payments. These modifications may include adjustments to interest rates, conversion of adjustable rates to fixed rates, extension of maturity dates or deferrals of payments, capitalization of accrued interest and/or outstanding advances, or in limited situations, partial forgiveness of loan principal. In some instances, participation in residential mortgage loan modification programs requires the customer to complete a short-term trial period. A permanent loan modification is contingent on the customer successfully completing the trial period arrangement, and the loan documents are not modified until that time. Credit card and other retail loan modifications are generally part of distinct modification programs providing customers experiencing financial difficulty with modifications whereby balances may be amortized up to 60 months, and generally include waiver of fees and reduced interest rates. Loans that receive a forbearance plan generally remain in default until they are no longer delinquent as the result of the payment of all past due amounts or the borrower receiving a term extension or modification. Therefore, loans only receiving forbearance plans are not included in the table below. The following table provides a summary of loan balances at June 30, 2024, which were modified during the prior twelve months, by portfolio class and delinquency status: (Dollars in Millions) Current 30-89 Days Past Due 90 Days or More Past Due Total Commercial $ 628 $ 17 $ 117 $ 762 Commercial real estate 847 — 419 1,266 Residential mortgages (a) 1,585 6 13 1,604 Credit card 293 64 34 391 Other retail 122 17 6 145 Total loans $ 3,475 $ 104 $ 589 $ 4,168 (a) At June 30, 2024, $462 million of loans 30-89 days past due and $196 million of loans 90 days or more past due purchased and that could be purchased from GNMA mortgage pools under delinquent loan repurchase options whose payments are insured by the Federal Housing Administration or guaranteed by the United States Department of Veterans Affairs, were classified as current. The following table provides a summary of loan balances at June 30, 2023, which were modified on or after January 1, 2023, the date the Company adopted accounting guidance which removed the separate recognition and measurement of troubled debt restruc |
