Variable Interest Entities and Other Investments

12 Months Ended

Dec. 31, 2011

Variable Interest Entities Private Capital and Other Investments [Abstract]

Variable Interest Entities and Other Investments

Note 6—Variable Interest Entities and Other Investments

The Company is involved in various structures that are considered to be VIEs. Generally, a VIE is a corporation, partnership, trust or any other legal structure that has equity investors that: 1) do not have sufficient equity at risk for the entity to independently finance its activities; 2) lack the power to direct the activities that significantly impact the entity’s economic success; and/or 3) do not have an obligation to absorb the entity’s losses or the right to receive the entity’s returns. The Company’s investments in VIEs primarily consist of equity investments in low income housing credit (LIHC) structures and renewable energy projects, which are designed to generate a return primarily through the realization of federal tax credits, and private capital investments.

Consolidated VIEs

The Company is required to consolidate VIEs in which it is the primary beneficiary. The Company is determined to be the primary beneficiary of a VIE when it has the power to direct matters that most significantly impact the activities of the VIE and has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

At December 31, 2011, assets of $294 million and liabilities of $9 million were consolidated by the Company on its consolidated balance sheet related to two LIHC investment fund structures because the Company sponsors, manages and syndicates the funds. The assets are included in other assets as well as interest bearing deposits in banks, the liabilities are primarily included in long-term debt, and third-party investor interests are included in stockholder’s equity as noncontrolling interests. 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.

During 2011 and 2010, the Company recorded $24 million and $34 million of expenses related to its consolidated VIEs, respectively. These expenses are included in other noninterest expense on the Company’s consolidated statements of income.

Unconsolidated VIEs in which the Company has a Variable Interest

The following table presents the Company’s carrying amounts related to the unconsolidated VIEs and location on the consolidated balance sheet at December 31, 2011. 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.

	December 31, 2011
(Dollars in millions)	Total Assets		Total Liabilities		Maximum Exposure to Loss
LIHC investments	$	516	$	31	$	718
Renewable energy investments		291		—		291
Private capital investment		78		—		106
Total unconsolidated VIEs	$	885	$	31	$	1,115

Other Investments

The following table shows the balances of other investments as of December 31, 2011 and December 31, 2010.

	December 31,		December 31,
(Dollars in millions)	2011		2010
Renewable energy investments	$	291	$	300
Consolidated VIEs		285		283
LIHC investments – unguaranteed		353		316
LIHC investments – guaranteed		163		157
Private capital investment – cost basis		72		85
Private capital investment – equity basis		24		40
Total other investments	$	1,188	$	1,181

The Company evaluates these investments periodically for other-than-temporary impairment. For the year ended December 31, 2011, the Company recorded $4 million of impairment related to private capital cost basis investments. For further information on the Company’s private capital and other investments, see Note 1 to these consolidated financial statements.