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Variable Interest Entities
 6 Months Ended
Jun. 30, 2014
Variable Interest Entities  
Variable Interest Entities

 

Note 6—Variable Interest Entities

        In the normal course of business, the Company has certain financial interests in entities which have been determined to be variable interest entities (VIEs). Generally, a VIE is a corporation, partnership, trust or other legal structure where the equity investors do not have substantive voting rights, an obligation to absorb the entity's losses or the right to receive the entity's returns, or the ability to direct the significant activities of the entity. The following discusses the Company's consolidated and unconsolidated VIEs.

Consolidated VIEs

        The following tables present the assets and liabilities of consolidated VIEs recorded on the Company's consolidated balance sheet at June 30, 2014.

 
   June 30, 2014  
 
   Consolidated Assets    
    
    
  
 
   Consolidated Liabilities  
 
   Interest
Bearing
Deposits in
Banks		   Loans
Held for
Investment,
net		    
    
  
(Dollars in millions)   Other
Assets		   Total
Assets		   Long-Term
Debt		   Other
Liabilities		   Total
Liabilities		  

Low-income housing credit investments

   $ 9   $ —   $ 251   $ 260   $ 4   $ —   $ 4  

Leasing investments

     5     712     101     818     —     83     83  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total consolidated VIEs

   $ 14   $ 712   $ 352   $ 1,078   $ 4   $ 83   $ 87  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                               

  • Low-Income Housing Credit (LIHC) Investments

        The Company sponsors, manages and syndicates two LIHC investment fund structures. These investments are designed to generate a return primarily through the realization of U.S. federal tax credits and deductions. The Company is considered a primary beneficiary and has consolidated these investments because the Company has the power to direct activities that most significantly impact the funds' economic performances and also has the obligation to absorb losses of the funds that could potentially be significant to the funds. Neither creditors nor equity investors in the LIHC investments have any recourse to the general credit of the Company, and the Company's creditors do not have any recourse to the assets of the consolidated LIHC investments.

  • Leasing Investments

        The Company has leasing investments primarily in the wind, rail and coal industries. The Company is considered the primary beneficiary and has consolidated these investments because the Company has the power to direct the activities of these entities that significantly impact the entities' economic performances. The Company also has the right to receive potentially significant benefits or the obligation to absorb potentially significant losses of these entities.

Unconsolidated VIEs

        The following table presents the Company's carrying amounts related to the unconsolidated VIEs and location on the consolidated balance sheets at June 30, 2014. The table also presents the Company's maximum exposure to loss resulting from its involvement with these VIEs. The maximum exposure to loss represents the carrying amount of the Company's involvement plus any legally binding unfunded commitments in the unlikely event that all of the assets in the VIEs become worthless.

 
   June 30, 2014  
 
   Unconsolidated Assets   Unconsolidated
Liabilities		    
  
(Dollars in millions)   Securities
Available
for Sale		   Loans
Held for
Investment		   Other
Assets		   Total
Assets		   Other
Liabilities		   Total
Liabilities		   Maximum
Exposure to
Loss		  

LIHC investments

   $ 26   $ 132   $ 1,053   $ 1,211   $ 398   $ 398   $ 1,211  

Leasing investments

     —     44     838     882     —     —     898  

Other investments

     —     21     27     48     —     —     50  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Total unconsolidated VIEs

   $ 26   $ 197   $ 1,918   $ 2,141   $ 398   $ 398   $ 2,159  
                               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
                               

  • LIHC Investments

        The Company makes investments in partnerships and funds formed by third parties. The primary purpose of the partnerships and funds is to invest in low-income housing units and distribute tax credits and tax benefits associated with the underlying properties to investors. The Company is a limited partner investor and is allocated tax credits and deductions, but has no voting or other rights to direct the activities of the funds, and therefore is not considered the primary beneficiary and does not consolidate these investments.

  • Leasing Investments

        The unconsolidated VIEs related to leasing investments are primarily renewable energy investments. Through its subsidiaries, the Company makes equity investments in LLCs established by a third party sponsor. The LLCs are created to operate and manage wind, solar, hydroelectric and cogeneration power plant projects. Power generated by the projects is sold to third parties through long-term purchase power agreements. As a limited investor member, the Company is allocated production tax credits and taxable income or losses associated with the projects. The Company has no voting or other rights to direct the activities of the LLCs, and therefore is not considered the primary beneficiary and does not consolidate these entities.

  • Other Investments

        The Company has direct equity investments in structures formed by third parties. The Company has no voting or other rights to direct the activities of the investments that would most significantly impact the entities' performance, and therefore is not considered the primary beneficiary and does not consolidate these entities.