Loans and Allowance for Credit Losses | Note 5: Loans and Allowance for Credit Losses Table 5.1 presents total loans outstanding by portfolio segment and class of financing receivable. Outstanding balances include a total net reduction of $3.9 billion and $4.4 billion at June 30, 2017 , and December 31, 2016 , respectively, for unearned income, net deferred loan fees, and unamortized discounts and premiums. Table 5.1: Loans Outstanding (in millions) Jun 30, Dec 31, Commercial: Commercial and industrial $ 331,113 330,840 Real estate mortgage 130,277 132,491 Real estate construction 25,337 23,916 Lease financing 19,174 19,289 Total commercial 505,901 506,536 Consumer: Real estate 1-4 family first mortgage 276,566 275,579 Real estate 1-4 family junior lien mortgage 42,747 46,237 Credit card 35,305 36,700 Automobile 57,958 62,286 Other revolving credit and installment 38,946 40,266 Total consumer 451,522 461,068 Total loans $ 957,423 967,604 Our foreign loans are reported by respective class of financing receivable in the table above. Substantially all of our foreign loan portfolio is commercial loans. Loans are classified as foreign primarily based on whether the borrower’s primary address is outside of the United States. Table 5.2 presents total commercial foreign loans outstanding by class of financing receivable. Table 5.2: Commercial Foreign Loans Outstanding (in millions) Jun 30, Dec 31, Commercial foreign loans: Commercial and industrial $ 57,825 55,396 Real estate mortgage 8,359 8,541 Real estate construction 585 375 Lease financing 1,092 972 Total commercial foreign loans $ 67,861 65,284 Loan Purchases, Sales, and Transfers Table 5.3 summarizes the proceeds paid or received for purchases and sales of loans and transfers from loans held for investment to mortgages/loans held for sale at lower of cost or fair value. This loan activity also includes participating interests, whereby we receive or transfer a portion of a loan. The table excludes PCI loans and loans for which we have elected the fair value option, including loans originated for sale because their loan activity normally does not impact the allowance for credit losses. Table 5.3: Loan Purchases, Sales, and Transfers 2017 2016 (in millions) Commercial Consumer (1) Total Commercial (2) Consumer (1) Total Quarter ended June 30, Purchases $ 810 — 810 2,607 — 2,607 Sales (1,052 ) (84 ) (1,136 ) (385 ) (407 ) (792 ) Transfers to MHFS/LHFS (179 ) (1 ) (180 ) (69 ) (1 ) (70 ) Six months ended June 30, Purchases $ 1,969 2 1,971 27,253 — 27,253 Sales (1,339 ) (146 ) (1,485 ) (608 ) (679 ) (1,287 ) Transfers to MHFS/LHFS (658 ) (1 ) (659 ) (101 ) (4 ) (105 ) (1) Excludes activity in government insured/guaranteed real estate 1-4 family first mortgage loans. As servicer, we are able to buy delinquent insured/guaranteed loans out of the Government National Mortgage Association (GNMA) pools, and manage and/or resell them in accordance with applicable requirements. These loans are predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Accordingly, these loans have limited impact on the allowance for loan losses. (2) Purchases include loans and capital leases from the 2016 GE Capital business acquisitions. Commitments to Lend A commitment to lend is a legally binding agreement to lend funds to a customer, usually at a stated interest rate, if funded, and for specific purposes and time periods. We generally require a fee to extend such commitments. Certain commitments are subject to loan agreements with covenants regarding the financial performance of the customer or borrowing base formulas on an ongoing basis that must be met before we are required to fund the commitment. We may reduce or cancel consumer commitments, including home equity lines and credit card lines, in accordance with the contracts and applicable law. We may, as a representative for other lenders, advance funds or provide for the issuance of letters of credit under syndicated loan or letter of credit agreements. Any advances are generally repaid in less than a week and would normally require default of both the customer and another lender to expose us to loss. These temporary advance arrangements totaled approximately $76 billion and $77 billion at June 30, 2017 and December 31, 2016 , respectively. We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At June 30, 2017 , and December 31, 2016 , we had $1.3 billion and $1.1 billion , respectively, of outstanding issued commercial letters of credit. We also originate multipurpose lending commitments under which borrowers have the option to draw on the facility for different purposes in one of several forms, including a standby letter of credit. See Note 10 (Guarantees, Pledged Assets and Collateral) for additional information on standby letters of credit. When we make commitments, we are exposed to credit risk. The maximum credit risk for these commitments will generally be lower than the contractual amount because a significant portion of these commitments is expected to expire without being used by the customer. In addition, we manage the potential risk in commitments to lend by limiting the total amount of commitments, both by individual customer and in total, by monitoring the size and maturity structure of these commitments and by applying the same credit standards for these commitments as for all of our credit activities. For loans and commitments to lend, we generally require collateral or a guarantee. We may require various types of collateral, including commercial and consumer real estate, automobiles, other short-term liquid assets such as accounts receivable or inventory and long-lived assets, such as equipment and other business assets. Collateral requirements for each loan or commitment may vary based on the loan product and our assessment of a customer’s credit risk according to the specific credit underwriting, including credit terms and structure. The contractual amount of our unfunded credit commitments, including unissued standby and commercial letters of credit, is summarized by portfolio segment and class of financing receivable in Table 5.4 . The table excludes the issued standby and commercial letters of credit and temporary advance arrangements described above. Table 5.4: Unfunded Credit Commitments (in millions) Jun 30, Dec 31, Commercial: Commercial and industrial $ 319,058 319,662 Real estate mortgage 7,601 7,833 Real estate construction 16,728 18,840 Lease financing 11 16 Total commercial 343,398 346,351 Consumer: Real estate 1-4 family first mortgage 35,685 33,498 Real estate 1-4 family junior lien mortgage 40,044 41,431 Credit card 106,329 101,895 Other revolving credit and installment 27,541 28,349 Total consumer 209,599 205,173 Total unfunded credit commitments $ 552,997 551,524 Allowance for Credit Losses Table 5.5 presents the allowance for credit losses, which consists of the allowance for loan losses and the allowance for unfunded credit commitments. Table 5.5: Allowance for Credit Losses Quarter ended June 30, Six months ended June 30, (in millions) 2017 2016 2017 2016 Balance, beginning of period $ 12,287 12,668 12,540 12,512 Provision for credit losses 555 1,074 1,160 2,160 Interest income on certain impaired loans (1) (46 ) (51 ) (94 ) (99 ) Loan charge-offs: Commercial: Commercial and industrial (161 ) (437 ) (414 ) (786 ) Real estate mortgage (8 ) (3 ) (13 ) (6 ) Real estate construction — (1 ) — (1 ) Lease financing (13 ) (17 ) (20 ) (21 ) Total commercial (182 ) (458 ) (447 ) (814 ) Consumer: Real estate 1-4 family first mortgage (55 ) (123 ) (124 ) (260 ) Real estate 1-4 family junior lien mortgage (62 ) (133 ) (155 ) (266 ) Credit card (379 ) (320 ) (746 ) (634 ) Automobile (212 ) (176 ) (467 ) (387 ) Other revolving credit and installment (185 ) (163 ) (374 ) (338 ) Total consumer (893 ) (915 ) (1,866 ) (1,885 ) Total loan charge-offs (1,075 ) (1,373 ) (2,313 ) (2,699 ) Loan recoveries: Commercial: Commercial and industrial 83 69 165 145 Real estate mortgage 14 23 44 55 Real estate construction 4 4 12 12 Lease financing 6 5 8 8 Total commercial 107 101 229 220 Consumer: Real estate 1-4 family first mortgage 71 109 133 198 Real estate 1-4 family junior lien mortgage 66 71 136 130 Credit card 59 50 117 102 Automobile 86 86 174 170 Other revolving credit and installment 31 32 64 69 Total consumer 313 348 624 669 Total loan recoveries 420 449 853 889 Net loan charge-offs (655 ) (924 ) (1,460 ) (1,810 ) Other 5 (18 ) — (14 ) Balance, end of period $ 12,146 12,749 12,146 12,749 Components: Allowance for loan losses $ 11,073 11,664 11,073 11,664 Allowance for unfunded credit commitments 1,073 1,085 1,073 1,085 Allowance for credit losses $ 12,146 12,749 12,146 12,749 Net loan charge-offs (annualized) as a percentage of average total loans 0.27 % 0.39 0.31 0.39 Allowance for loan losses as a percentage of total loans 1.16 1.22 1.16 1.22 Allowance for credit losses as a percentage of total loans 1.27 1.33 1.27 1.33 (1) Certain impaired loans with an allowance calculated by discounting expected cash flows using the loan’s effective interest rate over the remaining life of the loan recognize changes in allowance attributable to the passage of time as interest income. Table 5.6 summarizes the activity in the allowance for credit losses by our commercial and consumer portfolio segments. Table 5.6: Allowance Activity by Portfolio Segment 2017 2016 (in millions) Commercial Consumer Total Commercial Consumer Total Quarter ended June 30, Balance, beginning of period $ 7,142 5,145 12,287 7,348 5,320 12,668 Provision (reversal of provision) for credit losses (97 ) 652 555 478 596 1,074 Interest income on certain impaired loans (14 ) (32 ) (46 ) (10 ) (41 ) (51 ) Loan charge-offs (182 ) (893 ) (1,075 ) (458 ) (915 ) (1,373 ) Loan recoveries 107 313 420 101 348 449 Net loan charge-offs (75 ) (580 ) (655 ) (357 ) (567 ) (924 ) Other 5 — 5 (18 ) — (18 ) Balance, end of period $ 6,961 5,185 12,146 7,441 5,308 12,749 Six months ended June 30, Balance, beginning of period $ 7,394 5,146 12,540 6,872 5,640 12,512 Provision (reversal of provision) for credit losses (186 ) 1,346 1,160 1,192 968 2,160 Interest income on certain impaired loans (29 ) (65 ) (94 ) (15 ) (84 ) (99 ) Loan charge-offs (447 ) (1,866 ) (2,313 ) (814 ) (1,885 ) (2,699 ) Loan recoveries 229 624 853 220 669 889 Net loan charge-offs (218 ) (1,242 ) (1,460 ) (594 ) (1,216 ) (1,810 ) Other — — — (14 ) — (14 ) Balance, end of period $ 6,961 5,185 12,146 7,441 5,308 12,749 Table 5.7 disaggregates our allowance for credit losses and recorded investment in loans by impairment methodology. Table 5.7: Allowance by Impairment Methodology Allowance for credit losses Recorded investment in loans (in millions) Commercial Consumer Total Commercial Consumer Total June 30, 2017 Collectively evaluated (1) $ 6,131 3,844 9,975 500,942 421,646 922,588 Individually evaluated (2) 830 1,341 2,171 4,696 15,866 20,562 PCI (3) — — — 263 14,010 14,273 Total $ 6,961 5,185 12,146 505,901 451,522 957,423 December 31, 2016 Collectively evaluated (1) $ 6,392 3,553 9,945 500,487 428,009 928,496 Individually evaluated (2) 1,000 1,593 2,593 5,372 17,005 22,377 PCI (3) 2 — 2 677 16,054 16,731 Total $ 7,394 5,146 12,540 506,536 461,068 967,604 (1) Represents loans collectively evaluated for impairment in accordance with Accounting Standards Codification (ASC) 450-20, Loss Contingencies (formerly FAS 5), and pursuant to amendments by ASU 2010-20 regarding allowance for non-impaired loans. (2) Represents loans individually evaluated for impairment in accordance with ASC 310-10, Receivables (formerly FAS 114), and pursuant to amendments by ASU 2010-20 regarding allowance for impaired loans. (3) Represents the allowance and related loan carrying value determined in accordance with ASC 310-30 , Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality (formerly SOP 03-3) and pursuant to amendments by ASU 2010-20 regarding allowance for PCI loans. Credit Quality We monitor credit quality by evaluating various attributes and utilize such information in our evaluation of the appropriateness of the allowance for credit losses. The following sections provide the credit quality indicators we most closely monitor. The credit quality indicators are generally based on information as of our financial statement date, with the exception of updated Fair Isaac Corporation (FICO) scores and updated loan-to-value (LTV)/combined LTV (CLTV). We obtain FICO scores at loan origination and the scores are generally updated at least quarterly, except in limited circumstances, including compliance with the Fair Credit Reporting Act (FCRA). Generally, the LTV and CLTV indicators are updated in the second month of each quarter, with updates no older than March 31, 2017 . See the “Purchased Credit-Impaired Loans” section in this Note for credit quality information on our PCI portfolio. COMMERCIAL CREDIT QUALITY INDICATORS In addition to monitoring commercial loan concentration risk, we manage a consistent process for assessing commercial loan credit quality. Generally, commercial loans are subject to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to Pass and Criticized categories. The Criticized category includes Special Mention, Substandard, and Doubtful categories which are defined by bank regulatory agencies. Table 5.8 provides a breakdown of outstanding commercial loans by risk category. Of the $19.0 billion in criticized commercial and industrial loans and $5.2 billion in criticized commercial real estate (CRE) loans at June 30, 2017 , $2.6 billion and $664 million , respectively, have been placed on nonaccrual status and written down to net realizable collateral value. Table 5.8: Commercial Loans by Risk Category (in millions) Commercial and industrial Real estate mortgage Real estate construction Lease financing Total June 30, 2017 By risk category: Pass $ 311,963 125,283 25,013 17,970 480,229 Criticized 19,019 4,875 311 1,204 25,409 Total commercial loans (excluding PCI) 330,982 130,158 25,324 19,174 505,638 Total commercial PCI loans (carrying value) 131 119 13 — 263 Total commercial loans $ 331,113 130,277 25,337 19,174 505,901 December 31, 2016 By risk category: Pass $ 308,166 126,793 23,408 17,899 476,266 Criticized 22,437 5,315 451 1,390 29,593 Total commercial loans (excluding PCI) 330,603 132,108 23,859 19,289 505,859 Total commercial PCI loans (carrying value) 237 383 57 — 677 Total commercial loans $ 330,840 132,491 23,916 19,289 506,536 Table 5.9 provides past due information for commercial loans, which we monitor as part of our credit risk management practices. Table 5.9: Commercial Loans by Delinquency Status (in millions) Commercial and industrial Real estate mortgage Real estate construction Lease financing Total June 30, 2017 By delinquency status: Current-29 days past due (DPD) and still accruing $ 327,614 129,360 25,148 18,970 501,092 30-89 DPD and still accruing 694 166 132 115 1,107 90+ DPD and still accruing 42 2 10 — 54 Nonaccrual loans 2,632 630 34 89 3,385 Total commercial loans (excluding PCI) 330,982 130,158 25,324 19,174 505,638 Total commercial PCI loans (carrying value) 131 119 13 — 263 Total commercial loans $ 331,113 130,277 25,337 19,174 505,901 December 31, 2016 By delinquency status: Current-29 DPD and still accruing $ 326,765 131,165 23,776 19,042 500,748 30-89 DPD and still accruing 594 222 40 132 988 90+ DPD and still accruing 28 36 — — 64 Nonaccrual loans 3,216 685 43 115 4,059 Total commercial loans (excluding PCI) 330,603 132,108 23,859 19,289 505,859 Total commercial PCI loans (carrying value) 237 383 57 — 677 Total commercial loans $ 330,840 132,491 23,916 19,289 506,536 CONSUMER CREDIT QUALITY INDICATORS We have various classes of consumer loans that present unique risks. Loan delinquency, FICO credit scores and LTV for loan types are common credit quality indicators that we monitor and utilize in our evaluation of the appropriateness of the allowance for credit losses for the consumer portfolio segment. Many of our loss estimation techniques used for the allowance for credit losses rely on delinquency-based models; therefore, delinquency is an important indicator of credit quality and the establishment of our allowance for credit losses. Table 5.10 provides the outstanding balances of our consumer portfolio by delinquency status. Table 5.10: Consumer Loans by Delinquency Status (in millions) Real estate 1-4 family first mortgage Real estate 1-4 family junior lien mortgage Credit card Automobile Other revolving credit and installment Total June 30, 2017 By delinquency status: Current-29 DPD $ 244,862 41,866 34,455 56,470 38,591 416,244 30-59 DPD 1,607 273 254 1,085 130 3,349 60-89 DPD 637 151 185 298 88 1,359 90-119 DPD 269 81 142 100 79 671 120-179 DPD 245 90 268 5 30 638 180+ DPD 1,378 255 1 — 28 1,662 Government insured/guaranteed loans (1) 13,589 — — — — 13,589 Total consumer loans (excluding PCI) 262,587 42,716 35,305 57,958 38,946 437,512 Total consumer PCI loans (carrying value) 13,979 31 — — — 14,010 Total consumer loans $ 276,566 42,747 35,305 57,958 38,946 451,522 December 31, 2016 By delinquency status: Current-29 DPD $ 239,061 45,238 35,773 60,572 39,833 420,477 30-59 DPD 1,904 296 275 1,262 177 3,914 60-89 DPD 700 160 200 330 111 1,501 90-119 DPD 307 102 169 116 93 787 120-179 DPD 323 108 279 5 30 745 180+ DPD 1,661 297 4 1 22 1,985 Government insured/guaranteed loans (1) 15,605 — — — — 15,605 Total consumer loans (excluding PCI) 259,561 46,201 36,700 62,286 40,266 445,014 Total consumer PCI loans (carrying value) 16,018 36 — — — 16,054 Total consumer loans $ 275,579 46,237 36,700 62,286 40,266 461,068 (1) Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA. Loans insured/guaranteed by the FHA/VA and 90+ DPD totaled $8.5 billion at June 30, 2017 , compared with $10.1 billion at December 31, 2016 . Of the $3.0 billion of consumer loans not government insured/guaranteed that are 90 days or more past due at June 30, 2017 , $789 million was accruing, compared with $3.5 billion past due and $908 million accruing at December 31, 2016 . Real estate 1-4 family first mortgage loans 180 days or more past due totaled $1.4 billion , or 0.5% of total first mortgages (excluding PCI), at June 30, 2017 , compared with $1.7 billion , or 0.6% , at December 31, 2016 . Table 5.11 provides a breakdown of our consumer portfolio by FICO. The June 30, 2017 FICO scores for real estate 1-4 family first and junior lien mortgages reflect a new FICO score version we adopted in first quarter 2017 to monitor and manage those portfolios. In general the impact for us is a shift to higher scores, particularly to the 800+ level, as the new FICO score version utilizes a more refined approach that better distinguishes borrower credit risk. Most of the scored consumer portfolio has an updated FICO of 680 and above, reflecting a strong current borrower credit profile. FICO is not available for certain loan types, or may not be required if we deem it unnecessary due to strong collateral and other borrower attributes. Substantially all loans not requiring a FICO score are securities-based loans originated through retail brokerage, and totaled $8.2 billion at June 30, 2017 , and $8.0 billion at December 31, 2016 . Table 5.11: Consumer Loans by FICO (in millions) Real estate 1-4 family first mortgage (1) Real estate 1-4 family junior lien mortgage (1) Credit card Automobile Other revolving credit and installment (1) Total June 30, 2017 By FICO: < 600 $ 5,767 1,949 3,282 9,716 892 21,606 600-639 3,917 1,422 2,932 6,468 945 15,684 640-679 7,322 2,689 5,399 8,741 2,068 26,219 680-719 15,579 5,269 7,195 9,676 3,743 41,462 720-759 28,480 6,756 7,544 8,282 5,307 56,369 760-799 54,249 7,792 6,018 6,739 6,481 81,279 800+ 127,929 16,015 2,889 8,098 8,744 163,675 No FICO available 5,755 824 46 238 2,608 9,471 FICO not required — — — — 8,158 8,158 Government insured/guaranteed loans (2) 13,589 — — — — 13,589 Total consumer loans (excluding PCI) 262,587 42,716 35,305 57,958 38,946 437,512 Total consumer PCI loans (carrying value) 13,979 31 — — — 14,010 Total consumer loans $ 276,566 42,747 35,305 57,958 38,946 451,522 December 31, 2016 By FICO: < 600 $ 6,720 2,591 3,475 9,934 976 23,696 600-639 5,400 1,917 3,109 6,705 1,056 18,187 640-679 10,975 3,747 5,678 10,204 2,333 32,937 680-719 23,300 6,432 7,382 11,233 4,302 52,649 720-759 38,832 9,413 7,632 8,769 5,869 70,515 760-799 103,608 14,929 6,191 8,164 8,348 141,240 800+ 49,508 6,391 2,868 6,856 6,434 72,057 No FICO available 5,613 781 365 421 2,906 10,086 FICO not required — — — — 8,042 8,042 Government insured/guaranteed loans (2) 15,605 — — — — 15,605 Total consumer loans (excluding PCI) 259,561 46,201 36,700 62,286 40,266 445,014 Total consumer PCI loans (carrying value) 16,018 36 — — — 16,054 Total consumer loans $ 275,579 46,237 36,700 62,286 40,266 461,068 (1) The June 30, 2017 , amounts reflect updated FICO score version implemented in first quarter 2017. (2) Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA. LTV refers to the ratio comparing the loan’s unpaid principal balance to the property’s collateral value. CLTV refers to the combination of first mortgage and junior lien mortgage (including unused line amounts for credit line products) ratios. LTVs and CLTVs are updated quarterly using a cascade approach which first uses values provided by automated valuation models (AVMs) for the property. If an AVM is not available, then the value is estimated using the original appraised value adjusted by the change in Home Price Index (HPI) for the property location. If an HPI is not available, the original appraised value is used. The HPI value is normally the only method considered for high value properties, generally with an original value of $1 million or more, as the AVM values have proven less accurate for these properties. Table 5.12 shows the most updated LTV and CLTV distribution of the real estate 1-4 family first and junior lien mortgage loan portfolios. We consider the trends in residential real estate markets as we monitor credit risk and establish our allowance for credit losses. In the event of a default, any loss should be limited to the portion of the loan amount in excess of the net realizable value of the underlying real estate collateral value. Certain loans do not have an LTV or CLTV due to industry data availability and portfolios acquired from or serviced by other institutions. Table 5.12: Consumer Loans by LTV/CLTV June 30, 2017 December 31, 2016 (in millions) Real estate 1-4 family first mortgage by LTV Real estate 1-4 family junior lien mortgage by CLTV Total Real estate 1-4 family first mortgage by LTV Real estate 1-4 family junior lien mortgage by CLTV Total By LTV/CLTV: 0-60% $ 124,277 15,923 140,200 121,430 16,464 137,894 60.01-80% 104,027 13,974 118,001 101,726 15,262 116,988 80.01-100% 16,229 7,827 24,056 15,795 8,765 24,560 100.01-120% (1) 2,334 3,158 5,492 2,644 3,589 6,233 > 120% (1) 981 1,359 2,340 1,066 1,613 2,679 No LTV/CLTV available 1,150 475 1,625 1,295 508 1,803 Government insured/guaranteed loans (2) 13,589 — 13,589 15,605 — 15,605 Total consumer loans (excluding PCI) 262,587 42,716 305,303 259,561 46,201 305,762 Total consumer PCI loans (carrying value) 13,979 31 14,010 16,018 36 16,054 Total consumer loans $ 276,566 42,747 319,313 275,579 46,237 321,816 (1) Reflects total loan balances with LTV/CLTV amounts in excess of 100%. In the event of default, the loss content would generally be limited to only the amount in excess of 100% LTV/CLTV. (2) Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA. NONACCRUAL LOANS Table 5.13 provides loans on nonaccrual status. PCI loans are excluded from this table because they continue to earn interest from accretable yield, independent of performance in accordance with their contractual terms. Table 5.13: Nonaccrual Loans (in millions) Jun 30, Dec 31, Commercial: Commercial and industrial $ 2,632 3,216 Real estate mortgage 630 685 Real estate construction 34 43 Lease financing 89 115 Total commercial 3,385 4,059 Consumer: Real estate 1-4 family first mortgage (1) 4,413 4,962 Real estate 1-4 family junior lien mortgage 1,095 1,206 Automobile 104 106 Other revolving credit and installment 59 51 Total consumer 5,671 6,325 Total nonaccrual loans (excluding PCI) $ 9,056 10,384 (1) Includes MHFS of $140 million and $149 million at June 30, 2017 , and December 31, 2016 , respectively. LOANS IN PROCESS OF FORECLOSURE Our recorded investment in consumer mortgage loans collateralized by residential real estate property that are in process of foreclosure was $7.0 billion and $8.1 billion at June 30, 2017 and December 31, 2016 , respectively, which included $4.1 billion and $4.8 billion , respectively, of loans that are government insured/guaranteed. We commence the foreclosure process on consumer real estate loans when a borrower becomes 120 days delinquent in accordance with Consumer Finance Protection Bureau Guidelines. Foreclosure procedures and timelines vary depending on whether the property address resides in a judicial or non-judicial state. Judicial states require the foreclosure to be processed through the state’s courts while non-judicial states are processed without court intervention. Foreclosure timelines vary according to state law. LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING Certain loans 90 days or more past due as to interest or principal are still accruing, because they are (1) well-secured and in the process of collection or (2) real estate 1-4 family mortgage loans or consumer loans exempt under regulatory rules from being classified as nonaccrual until later delinquency, usually 120 days past due. PCI loans of $1.5 billion at June 30, 2017 , and $2.0 billion at December 31, 2016 , are not included in these past due and still accruing loans even when they are 90 days or more contractually past due. These PCI loans are considered to be accruing because they continue to earn interest from accretable yield, independent of performance in accordance with their contractual terms. Table 5.14 shows non-PCI loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed. Table 5.14: Loans 90 Days or More Past Due and Still Accruing (in millions) Jun 30, 2017 Dec 31, 2016 Total (excluding PCI): $ 9,716 11,858 Less: FHA insured/guaranteed by the VA (1)(2) 8,873 10,883 Less: Student loans guaranteed under the Federal Family Education Loan Program (FFELP) (3) — 3 Total, not government insured/guaranteed $ 843 972 By segment and class, not government insured/guaranteed: Commercial: Commercial and industrial $ 42 28 Real estate mortgage 2 36 Real estate construction 10 — Total commercial 54 64 Consumer: Real estate 1-4 family first mortgage (2) 145 175 Real estate 1-4 family junior lien mortgage (2) 44 56 Credit card 411 452 Automobile 91 112 Other revolving credit and installment 98 113 Total consumer 789 908 Total, not government insured/guaranteed $ 843 972 (1) Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA. (2) Includes mortgages held for sale 90 days or more past due and still accruing. (3) Represents loans whose repayments are largely guaranteed by agencies on behalf of the U.S. Department of Education under the FFELP. All remaining student loans guaranteed under the FFELP were sold as of March 31, 2017. IMPAIRED LOANS Table 5.15 summarizes key information for impaired loans. Our impaired loans predominantly include loans on nonaccrual status in the commercial portfolio segment and loans modified in a TDR, whether on accrual or nonaccrual status. These impaired loans generally have estimated losses which are included in the allowance for credit losses. We have impaired loans with no allowance for credit losses when loss content has been previously recognized through charge-offs and we do not anticipate additional charge-offs or losses, or certain loans are currently performing in accordance with their terms and for which no loss has been estimated. Impaired loans exclude PCI loans. Table 5.15 includes trial modifications that totaled $215 million at June 30, 2017 , and $299 million at December 31, 2016 . For additional information on our impaired loans and allowance for credit losses, see Note 1 (Summary of Significant Accounting Policies) in our 2016 Form 10-K. Table 5.15: Impaired Loans Summary Recorded investment (in millions) Unpaid principal balance (1) Impaired loans Impaired loans with related allowance for credit losses Related allowance for credit losses June 30, 2017 Commercial: Commercial and industrial $ 4,401 3,205 2,901 558 Real estate mortgage 1,654 1,337 1,325 238 Real estate construction 105 62 62 11 Lease financing 126 92 92 23 Total commercial 6,286 4,696 4,380 830 Consumer: Real estate 1-4 family first mortgage 15,256 13,299 8,677 905 Real estate 1-4 family junior lien mortgage 2,273 2,043 1,557 295 Credit card 317 316 316 113 Automobile 152 85 31 4 Other revolving credit and installment 129 123 113 24 Total consumer (2) 18,127 15,866 10,694 1,341 Total impaired loans (excluding PCI) $ 24,413 20,562 15,074 2,171 December 31, 2016 Commercial: Commercial and industrial $ 5,058 3,742 3,418 675 Real estate mortgage 1,777 1,418 1,396 280 Real estate construction 167 93 93 22 Lease financing 146 119 119 23 Total commercial 7,148 5,372 5,026 1,000 Consumer: Real estate 1-4 family first mortgage 16,438 14,362 9,475 1,117 Real estate 1-4 family junior lien mortgage 2,399 2,156 1,681 350 Credit card 300 300 300 104 Automobile 153 85 31 5 Other revolving credit and installment 109 102 91 17 Total consumer (2) 19,399 17,005 11,578 1,593 Total impaired loans (excluding PCI) $ 26,547 22,377 16,604 2,593 (1) Excludes the unpaid principal balance for loans that have been fully charged off or otherwise have zero recorded investment. (2) Includes the recorded investment of $1.4 billion and $1.5 billion at June 30, 2017 and December 31, 2016 , respectively, of government insured/guaranteed loans that are predominantly insured by the FHA or guaranteed by the VA and generally do not have an allowance. Impaired loans may also have limited, if any, allowance when the recorded investment of the loan approximates estimated net realizable value as a result of charge-offs prior to a TDR modification. Commitments to lend additional funds on loans whose terms have been modified in a TDR amounted to $747 million and $403 million at June 30, 2017 and December 31, 2016 , respectively. Table 5.16 provides the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans by portfolio segment and class. Table 5.16: Average Recorded Investment in Impaired Loans Quarter ended June 30, Six months ended June 30, 2017 2016 2017 2016 (in millions) Average recorded investment Recognized interest income Average recorded investment Recognized interest income Average recorded investment Recognized interest income Average recorded investment Recognized interest income Commercial: Commercial and industrial $ 3,390 36 3,803 21 3,457 69 3,146 40 Real estate mortgage 1,371 24 1,695 34 1,397 51 1,730 66 Real estate construction 66 2 116 3 75 3 122 5 Lease financing 98 — 93 — 110 — 79 — Total commercial 4,925 62 5,707 58 5,039 123 5,077 111 Consumer: Real estate 1-4 family first mortgage 13,602 185 16,278 211 13,866 375 16,595 432 Real estate 1-4 family junior lien mortgage 2,075 31 2,325 33 2,103 62 2,354 67 Credit card 313 9 293 8 308 17 295 17 Automobile 83 3 94 3 83 6 98 6 Other revolving credit and installment 114 2 84 2 110 4 80 3 Total consumer 16,187 230 19,074 257 16,470 464 19,422 525 Total impaired loans (excluding PCI) $ 21,112 292 24,781 315 21,509 587 24,499 636 Interest income: Cash basis of accounting $ 77 92 155 187 Other (1) 215 223 432 449 Total interest income $ 292 315 587 636 (1) Includes interest recognized on accruing TDRs, interest recognized related to certain impaired loans which have an allowance calculated using discounting, and amortization of purchase accounting adjustments related to certain impaired loans. TROUBLED DEBT RESTRUCTURINGS (TDRs) When, for economic or legal reasons related to a borrower’s financial difficulties, we grant a concession for other than an insignificant period of time to a borrower that we would not otherwise consider, the related loa |