Loans and Allowance for Credit Losses | Note 6: Loans and Allowance for Credit Losses Table 6.1 presents total loans outstanding by portfolio segment and class of financing receivable. Outstanding balances include a total net reduction of $3.2 billion and $3.9 billion at March 31, 2018 , and December 31, 2017 , respectively, for unearned income, net deferred loan fees, and unamortized discounts and premiums. Table 6.1: Loans Outstanding (in millions) Mar 31, Dec 31, Commercial: Commercial and industrial $ 334,678 333,125 Real estate mortgage 125,543 126,599 Real estate construction 23,882 24,279 Lease financing 19,293 19,385 Total commercial 503,396 503,388 Consumer: Real estate 1-4 family first mortgage 282,658 284,054 Real estate 1-4 family junior lien mortgage 37,920 39,713 Credit card 36,103 37,976 Automobile 49,554 53,371 Other revolving credit and installment 37,677 38,268 Total consumer 443,912 453,382 Total loans $ 947,308 956,770 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 6.2 presents total commercial foreign loans outstanding by class of financing receivable. Table 6.2: Commercial Foreign Loans Outstanding (in millions) Mar 31, Dec 31, Commercial foreign loans: Commercial and industrial $ 59,696 60,106 Real estate mortgage 8,082 8,033 Real estate construction 668 655 Lease financing 1,077 1,126 Total commercial foreign loans $ 69,523 69,920 Loan Purchases, Sales, and Transfers Table 6.3 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 6.3: Loan Purchases, Sales, and Transfers 2018 2017 (in millions) Commercial Consumer (1) Total Commercial Consumer (1) Total Quarter ended March 31, Purchases $ 256 — 256 1,159 2 1,161 Sales (460 ) — (460 ) (287 ) (62 ) (349 ) Transfers to MHFS/LHFS (420 ) (1,553 ) (1,973 ) (479 ) — (479 ) (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. 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 $89 billion and $85 billion at March 31, 2018 and December 31, 2017 , respectively. We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At March 31, 2018 , and December 31, 2017 , we had $1.1 billion and $982 million , 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 12 (Guarantees, Pledged Assets and Collateral, and Other Commitments) 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 6.4 . The table excludes the issued standby and commercial letters of credit and temporary advance arrangements described above. Table 6.4: Unfunded Credit Commitments (in millions) Mar 31, Dec 31, Commercial: Commercial and industrial $ 325,091 326,626 Real estate mortgage 7,233 7,485 Real estate construction 15,612 16,621 Lease financing — — Total commercial 347,936 350,732 Consumer: Real estate 1-4 family first mortgage 32,220 29,876 Real estate 1-4 family junior lien mortgage 38,817 38,897 Credit card 111,427 108,465 Other revolving credit and installment 27,635 27,541 Total consumer 210,099 204,779 Total unfunded credit commitments $ 558,035 555,511 Allowance for Credit Losses Table 6.5 presents the allowance for credit losses, which consists of the allowance for loan losses and the allowance for unfunded credit commitments. Table 6.5: Allowance for Credit Losses Quarter ended March 31, (in millions) 2018 2017 Balance, beginning of period $ 11,960 12,540 Provision for credit losses 191 605 Interest income on certain impaired loans (1) (43 ) (48 ) Loan charge-offs: Commercial: Commercial and industrial (164 ) (253 ) Real estate mortgage (2 ) (5 ) Real estate construction — — Lease financing (17 ) (7 ) Total commercial (183 ) (265 ) Consumer: Real estate 1-4 family first mortgage (41 ) (69 ) Real estate 1-4 family junior lien mortgage (47 ) (93 ) Credit card (405 ) (367 ) Automobile (300 ) (255 ) Other revolving credit and installment (180 ) (189 ) Total consumer (973 ) (973 ) Total loan charge-offs (1,156 ) (1,238 ) Loan recoveries: Commercial: Commercial and industrial 79 82 Real estate mortgage 17 30 Real estate construction 4 8 Lease financing 5 2 Total commercial 105 122 Consumer: Real estate 1-4 family first mortgage 59 62 Real estate 1-4 family junior lien mortgage 55 70 Credit card 73 58 Automobile 92 88 Other revolving credit and installment 31 33 Total consumer 310 311 Total loan recoveries 415 433 Net loan charge-offs (741 ) (805 ) Other (54 ) (5 ) Balance, end of period $ 11,313 12,287 Components: Allowance for loan losses $ 10,373 11,168 Allowance for unfunded credit commitments 940 1,119 Allowance for credit losses $ 11,313 12,287 Net loan charge-offs (annualized) as a percentage of average total loans 0.32 % 0.34 Allowance for loan losses as a percentage of total loans 1.10 1.17 Allowance for credit losses as a percentage of total loans 1.19 1.28 (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 6.6 summarizes the activity in the allowance for credit losses by our commercial and consumer portfolio segments. Table 6.6: Allowance Activity by Portfolio Segment 2018 2017 (in millions) Commercial Consumer Total Commercial Consumer Total Quarter ended March 31, Balance, beginning of period $ 6,632 5,328 11,960 7,394 5,146 12,540 Provision (reversal of provision) for credit losses 169 22 191 (89 ) 694 605 Interest income on certain impaired loans (11 ) (32 ) (43 ) (15 ) (33 ) (48 ) Loan charge-offs (183 ) (973 ) (1,156 ) (265 ) (973 ) (1,238 ) Loan recoveries 105 310 415 122 311 433 Net loan charge-offs (78 ) (663 ) (741 ) (143 ) (662 ) (805 ) Other (4 ) (50 ) (54 ) (5 ) — (5 ) Balance, end of period $ 6,708 4,605 11,313 7,142 5,145 12,287 Table 6.7 disaggregates our allowance for credit losses and recorded investment in loans by impairment methodology. Table 6.7: Allowance by Impairment Methodology Allowance for credit losses Recorded investment in loans (in millions) Commercial Consumer Total Commercial Consumer Total March 31, 2018 Collectively evaluated (1) $ 6,029 3,580 9,609 499,578 418,877 918,455 Individually evaluated (2) 669 1,025 1,694 3,743 14,401 18,144 PCI (3) 10 — 10 75 10,634 10,709 Total $ 6,708 4,605 11,313 503,396 443,912 947,308 December 31, 2017 Collectively evaluated (1) $ 5,927 4,143 10,070 499,342 425,919 925,261 Individually evaluated (2) 705 1,185 1,890 3,960 14,714 18,674 PCI (3) — — — 86 12,749 12,835 Total $ 6,632 5,328 11,960 503,388 453,382 956,770 (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 December 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 6.8 provides a breakdown of outstanding commercial loans by risk category. Of the $16.3 billion in criticized commercial and industrial loans and $4.6 billion in criticized commercial real estate (CRE) loans at March 31, 2018 , $1.5 billion and $800 million , respectively, have been placed on nonaccrual status and written down to net realizable collateral value. Table 6.8: Commercial Loans by Risk Category (in millions) Commercial and industrial Real estate mortgage Real estate construction Lease financing Total March 31, 2018 By risk category: Pass $ 318,334 121,151 23,647 18,120 481,252 Criticized 16,269 4,392 235 1,173 22,069 Total commercial loans (excluding PCI) 334,603 125,543 23,882 19,293 503,321 Total commercial PCI loans (carrying value) 75 — — — 75 Total commercial loans $ 334,678 125,543 23,882 19,293 503,396 December 31, 2017 By risk category: Pass $ 316,431 122,312 23,981 18,162 480,886 Criticized 16,608 4,287 298 1,223 22,416 Total commercial loans (excluding PCI) 333,039 126,599 24,279 19,385 503,302 Total commercial PCI loans (carrying value) 86 — — — 86 Total commercial loans $ 333,125 126,599 24,279 19,385 503,388 Table 6.9 provides past due information for commercial loans, which we monitor as part of our credit risk management practices. Table 6.9: Commercial Loans by Delinquency Status (in millions) Commercial and industrial Real estate mortgage Real estate construction Lease financing Total March 31, 2018 By delinquency status: Current-29 days past due (DPD) and still accruing $ 332,432 124,148 23,706 19,077 499,363 30-89 DPD and still accruing 615 617 130 123 1,485 90+ DPD and still accruing 40 23 1 — 64 Nonaccrual loans 1,516 755 45 93 2,409 Total commercial loans (excluding PCI) 334,603 125,543 23,882 19,293 503,321 Total commercial PCI loans (carrying value) 75 — — — 75 Total commercial loans $ 334,678 125,543 23,882 19,293 503,396 December 31, 2017 By delinquency status: Current-29 DPD and still accruing $ 330,319 125,642 24,107 19,148 499,216 30-89 DPD and still accruing 795 306 135 161 1,397 90+ DPD and still accruing 26 23 — — 49 Nonaccrual loans 1,899 628 37 76 2,640 Total commercial loans (excluding PCI) 333,039 126,599 24,279 19,385 503,302 Total commercial PCI loans (carrying value) 86 — — — 86 Total commercial loans $ 333,125 126,599 24,279 19,385 503,388 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 6.10 provides the outstanding balances of our consumer portfolio by delinquency status. Table 6.10: 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 March 31, 2018 By delinquency status: Current-29 DPD $ 253,542 37,046 35,198 48,136 37,320 411,242 30-59 DPD 1,449 273 244 991 135 3,092 60-89 DPD 589 141 188 306 84 1,308 90-119 DPD 290 93 167 116 78 744 120-179 DPD 279 104 304 4 27 718 180+ DPD 1,105 238 2 1 33 1,379 Government insured/guaranteed loans (1) 14,795 — — — — 14,795 Total consumer loans (excluding PCI) 272,049 37,895 36,103 49,554 37,677 433,278 Total consumer PCI loans (carrying value) 10,609 25 — — — 10,634 Total consumer loans $ 282,658 37,920 36,103 49,554 37,677 443,912 December 31, 2017 By delinquency status: Current-29 DPD $ 251,786 38,746 36,996 51,445 37,885 416,858 30-59 DPD 1,893 336 287 1,385 155 4,056 60-89 DPD 742 163 201 392 93 1,591 90-119 DPD 369 103 192 146 80 890 120-179 DPD 308 95 298 3 30 734 180+ DPD 1,091 243 2 — 25 1,361 Government insured/guaranteed loans (1) 15,143 — — — — 15,143 Total consumer loans (excluding PCI) 271,332 39,686 37,976 53,371 38,268 440,633 Total consumer PCI loans (carrying value) 12,722 27 — — — 12,749 Total consumer loans $ 284,054 39,713 37,976 53,371 38,268 453,382 (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 $9.4 billion at March 31, 2018 , compared with $10.5 billion at December 31, 2017 . Of the $2.8 billion of consumer loans not government insured/guaranteed that are 90 days or more past due at March 31, 2018 , $903 million was accruing, compared with $3.0 billion past due and $1.0 billion accruing at December 31, 2017 . Real estate 1-4 family first mortgage loans 180 days or more past due totaled $1.1 billion , or 0.4% of total first mortgages (excluding PCI), at both March 31, 2018 and December 31, 2017 . Table 6.11 provides a breakdown of our consumer portfolio by FICO. 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 $8.7 billion at March 31, 2018 , and $8.5 billion at December 31, 2017 . Table 6.11: 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 Total March 31, 2018 By FICO: < 600 $ 4,674 1,601 3,407 8,546 828 19,056 600-639 3,405 1,223 2,915 5,161 862 13,566 640-679 6,717 2,274 5,352 6,936 1,906 23,185 680-719 14,313 4,604 7,304 8,049 3,397 37,667 720-759 27,119 6,007 7,808 7,215 4,947 53,096 760-799 54,227 6,918 6,065 6,036 6,223 79,469 800+ 141,351 14,506 2,922 7,399 8,252 174,430 No FICO available 5,448 762 330 212 2,525 9,277 FICO not required — — — — 8,737 8,737 Government insured/guaranteed loans (1) 14,795 — — — — 14,795 Total consumer loans (excluding PCI) 272,049 37,895 36,103 49,554 37,677 433,278 Total consumer PCI loans (carrying value) 10,609 25 — — — 10,634 Total consumer loans $ 282,658 37,920 36,103 49,554 37,677 443,912 December 31, 2017 By FICO: < 600 $ 5,145 1,768 3,525 8,858 863 20,159 600-639 3,487 1,253 3,101 5,615 904 14,360 640-679 6,789 2,387 5,690 7,696 1,959 24,521 680-719 14,977 4,797 7,628 8,825 3,582 39,809 720-759 27,926 6,246 8,097 7,806 5,089 55,164 760-799 55,590 7,323 6,372 6,468 6,257 82,010 800+ 136,729 15,144 2,994 7,845 8,455 171,167 No FICO available 5,546 768 569 258 2,648 9,789 FICO not required — — — — 8,511 8,511 Government insured/guaranteed loans (1) 15,143 — — — — 15,143 Total consumer loans (excluding PCI) 271,332 39,686 37,976 53,371 38,268 440,633 Total consumer PCI loans (carrying value) 12,722 27 — — — 12,749 Total consumer loans $ 284,054 39,713 37,976 53,371 38,268 453,382 (1) 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 6.12 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 6.12: Consumer Loans by LTV/CLTV March 31, 2018 December 31, 2017 (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% $ 135,883 15,854 151,737 133,902 16,301 150,203 60.01-80% 103,368 12,274 115,642 104,639 12,918 117,557 80.01-100% 14,297 6,179 20,476 13,924 6,580 20,504 100.01-120% (1) 1,757 2,245 4,002 1,868 2,427 4,295 > 120% (1) 715 902 1,617 783 1,008 1,791 No LTV/CLTV available 1,234 441 1,675 1,073 452 1,525 Government insured/guaranteed loans (2) 14,795 — 14,795 15,143 — 15,143 Total consumer loans (excluding PCI) 272,049 37,895 309,944 271,332 39,686 311,018 Total consumer PCI loans (carrying value) 10,609 25 10,634 12,722 27 12,749 Total consumer loans $ 282,658 37,920 320,578 284,054 39,713 323,767 (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 6.13 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 6.13: Nonaccrual Loans (in millions) Mar 31, Dec 31, Commercial: Commercial and industrial $ 1,516 1,899 Real estate mortgage 755 628 Real estate construction 45 37 Lease financing 93 76 Total commercial 2,409 2,640 Consumer: Real estate 1-4 family first mortgage (1) 4,053 4,122 Real estate 1-4 family junior lien mortgage 1,087 1,086 Automobile 117 130 Other revolving credit and installment 53 58 Total consumer 5,310 5,396 Total nonaccrual loans (excluding PCI) $ 7,719 8,036 (1) Includes MHFS of $137 million and $136 million at March 31, 2018 , and December 31, 2017 , 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 $5.9 billion and $6.3 billion at March 31, 2018 and December 31, 2017 , respectively, which included $3.9 billion and $4.0 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 $1.0 billion at March 31, 2018 , and $1.4 billion at December 31, 2017 , 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 6.14 shows non-PCI loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed. Table 6.14: Loans 90 Days or More Past Due and Still Accruing (in millions) Mar 31, 2018 Dec 31, 2017 Total (excluding PCI): $ 10,753 11,997 Less: FHA insured/guaranteed by the VA (1)(2) 9,786 10,934 Total, not government insured/guaranteed $ 967 1,063 By segment and class, not government insured/guaranteed: Commercial: Commercial and industrial $ 40 26 Real estate mortgage 23 23 Real estate construction 1 — Total commercial 64 49 Consumer: Real estate 1-4 family first mortgage (2) 164 219 Real estate 1-4 family junior lien mortgage (2) 48 60 Credit card 473 492 Automobile 113 143 Other revolving credit and installment 105 100 Total consumer 903 1,014 Total, not government insured/guaranteed $ 967 1,063 (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. IMPAIRED LOANS Table 6.15 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 6.15 includes trial modifications that totaled $198 million at March 31, 2018 , and $194 million at December 31, 2017 . For additional information on our impaired loans and allowance for credit losses, see Note 1 (Summary of Significant Accounting Policies) in our 2017 Form 10-K. Table 6.15: 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 March 31, 2018 Commercial: Commercial and industrial $ 3,182 2,231 1,978 432 Real estate mortgage 1,554 1,307 1,281 196 Real estate construction 105 61 54 8 Lease financing 177 144 144 33 Total commercial 5,018 3,743 3,457 669 Consumer: Real estate 1-4 family first mortgage 13,692 11,934 4,888 618 Real estate 1-4 family junior lien mortgage 2,072 1,860 1,352 230 Credit card 386 386 386 139 Automobile 153 83 34 5 Other revolving credit and installment 146 138 127 33 Total consumer (2) 16,449 14,401 6,787 1,025 Total impaired loans (excluding PCI) $ 21,467 18,144 10,244 1,694 December 31, 2017 Commercial: Commercial and industrial $ 3,577 2,568 2,310 462 Real estate mortgage 1,502 1,239 1,207 211 Real estate construction 95 54 45 9 Lease financing 132 99 89 23 Total commercial 5,306 3,960 3,651 705 Consumer: Real estate 1-4 family first mortgage 14,020 12,225 6,060 770 Real estate 1-4 family junior lien mortgage 2,135 1,918 1,421 245 Credit card 356 356 356 136 Automobile 157 87 34 5 Other revolving credit and installment 136 128 117 29 Total consumer (2) 16,804 14,714 7,988 1,185 Total impaired loans (excluding PCI) $ 22,110 18,674 11,639 1,890 (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 at both March 31, 2018 and December 31, 2017 , 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 $559 million and $579 million at March 31, 2018 and December 31, 2017 , respectively. Table 6.16 provides the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans by portfolio segment and class. Table 6.16: Average Recorded Investment in Impaired Loans Quarter ended March 31, 2018 2017 (in millions) Average recorded investment Recognized interest income Average recorded investment Recognized interest income Commercial: Commercial and industrial $ 2,404 36 3,675 33 Real estate mortgage 1,244 28 1,394 27 Real estate construction 58 1 84 1 Lease financing 129 — 119 — Total commercial 3,835 65 5,272 61 Consumer: Real estate 1-4 family first mortgage 12,073 172 14,132 190 Real estate 1-4 family junior lien mortgage 1,889 29 2,131 31 Credit card 370 10 302 8 Automobile 85 3 83 3 Other revolving credit and installment 133 2 106 2 Total consumer 14,550 216 16,754 234 Total impaired loans (excluding PCI) $ 18,385 281 22,026 295 Interest income: Cash basis of accounting $ 81 78 Other (1) 200 217 Total interest income $ 281 295 (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 loan is classified as a TDR, the balance of which totaled $17.1 billion and $17.8 billion at March 31, 2018 and December 31, 2017 , respectively. We do not consider loan resolutions such as foreclosure or short sale to be a TDR. We may require some consumer borrowers experiencing financial difficulty to make trial payments generally for a period of three to four months, according to the terms of a planned permanent modification, to determine if they can perform according to those terms. These arrangements represent trial modifications, which we classify and account for as TDRs. While loans are in trial payment programs, their original terms are not considered modified and they continue to advance through delinquency status and accrue interest according to their original terms. Table 6.17 summarizes our TDR modifications for the periods presented by primary modification type and includes the financial effects of these modifications. For those loans that modify more than once, the table reflects each modification that occurred during the period. Loans that both modify and pay off within the period, as well as changes in recorded investment during the period for loans modified in prior periods, are not included in the table. Table 6.17: TDR Modifications Primary modification type (1) Financial effects of modifications (in millions) Principal (2) Interest rate reduction Other concessions (3) Total Charge- offs (4) Weighted average interest rate reduction Recorded investment related to interest rate reduction (5) Quarter ended March 31, 2018 Commercial: Commercial and industrial $ — 9 488 497 6 1.07 % $ 9 Real estate mortgage — 6 98 104 — 1.24 6 Real estate construction — — 3 3 — — — Lease financing — — 39 39 — — — Total commercial — 15 628 643 6 1.15 15 Consumer: Real estate 1-4 family first mortgage 46 10 306 362 1 2.40 35 Real estate 1-4 family junior lien mortgage 1 8 28 37 1 2.22 9 Credit card — 86 — 86 — 11.32 86 Automobile 1 4 14 19 9 6.48 4 Other revolving credit and installment — 15 2 17 — 7.94 15 Trial modifications (6) — — 15 15 — — — Total consumer 48 123 365 536 11 8.20 149 Total $ 48 138 993 1,179 17 7.55 % $ 164 Quarter ended March 31, 2017 Commercial: Commercial and industrial $ — 6 928 934 65 0.82 % $ 6 Real estate mortgage — 14 181 195 — 1.00 14 Real estate construction — — 3 3 — 2.00 — Lease financing — — 3 3 — — — Total commercial — 20 1,115 1,135 65 0.95 20 Consumer: Real estate 1-4 family first mortgage 74 72 291 437 |