XML 55 R40.htm IDEA: XBRL DOCUMENT v3.3.1.900
Fair Value Measurement and Fair Value of Financial Instruments (Tables)
12 Months Ended
Dec. 31, 2015
Fair Value Disclosures [Abstract]  
Financial Assets and Financial Liabilities Measured at Fair Value on Recurring Basis
The following tables present financial assets and financial liabilities measured at fair value on a recurring basis as of December 31, 2015 and 2014, by major category and by valuation hierarchy level.
 
 
December 31, 2015
(Dollars in millions)
 
Level 1
 
Level 2
 
Level 3
 
Netting
Adjustment (1)
 
Fair Value
Assets
 
 

 
 

 
 

 
 

 
 

Trading account assets:
 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$

 
$
37

 
$

 
$

 
$
37

U.S. government-sponsored agency securities
 

 
106

 

 

 
106

State and municipal securities
 

 
3

 

 

 
3

Commercial Paper
 

 
25

 

 

 
25

Interest rate derivative contracts
 

 
998

 
4

 
(163
)
 
839

Commodity derivative contracts
 

 
408

 
1

 
(384
)
 
25

Foreign exchange derivative contracts
 
1

 
115

 
1

 
(70
)
 
47

Equity derivative contracts
 

 

 
222

 
(217
)
 
5

Total trading account assets
 
1

 
1,692

 
228

 
(834
)
 
1,087

Securities available for sale:
 
 

 
 

 
 

 
 

 
 

U.S. Treasury
 

 
594

 

 

 
594

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

U.S. government and government-sponsored agencies
 

 
7,201

 

 

 
7,201

Privately issued
 

 
151

 

 

 
151

Privately issued - commercial mortgage-backed securities
 

 
1,546

 

 

 
1,546

Collateralized loan obligations
 

 
3,233

 

 

 
3,233

Other
 

 
7

 

 

 
7

Other debt securities:
 
 
 
 
 
 
 
 
 
 

Direct bank purchase bonds
 

 

 
1,572

 

 
1,572

Other
 

 
1

 
31

 

 
32

Equity securities
 
8

 

 

 

 
8

Total securities available for sale
 
8

 
12,733

 
1,603

 

 
14,344

Other assets:
 
 

 
 

 
 

 
 

 
 

Interest rate hedging contracts
 

 
73

 

 
(71
)
 
2

Other derivative contracts
 

 
4

 
1

 
(4
)
 
1

Total other assets
 

 
77

 
1

 
(75
)
 
3

Total assets
 
$
9

 
$
14,502

 
$
1,832

 
$
(909
)
 
$
15,434

Percentage of total
 
%
 
94
%
 
12
%
 
(6
)%
 
100
%
Percentage of total Company assets
 
%
 
12
%
 
2
%
 
(1
)%
 
13
%
Liabilities
 
 

 
 

 
 

 
 

 
 

Trading account liabilities:
 
 

 
 

 
 

 
 

 
 

Interest rate derivative contracts
 
$
1

 
$
947

 
$

 
$
(775
)
 
$
173

Commodity derivative contracts
 

 
368

 
1

 
(61
)
 
308

Foreign exchange derivative contracts
 
1

 
91

 
1

 
(22
)
 
71

Equity derivative contracts
 

 

 
221

 

 
221

Securities sold, not yet purchased
 

 
23

 

 

 
23

Total trading account liabilities
 
2

 
1,429

 
223

 
(858
)
 
796

Other liabilities:
 
 

 
 

 
 

 
 

 
 

FDIC clawback liability
 

 

 
112

 

 
112

Interest rate hedging contracts
 

 
14

 

 
(14
)
 

Other derivative contracts
 

 

 
2

 

 
2

Total other liabilities
 

 
14

 
114

 
(14
)
 
114

Total liabilities
 
$
2

 
$
1,443

 
$
337

 
$
(872
)
 
$
910

Percentage of total
 
%
 
159
%
 
37
%
 
(96
)%
 
100
%
Percentage of total Company liabilities
 
%
 
1
%
 
%
 
(1
)%
 
%
 
 

(1)
Amounts represent the impact of legally enforceable master netting agreements between the same counterparties that allow the Company to net settle all contracts.
 
 
December 31, 2014
(Dollars in millions)
 
Level 1
 
Level 2
 
Level 3
 
Netting
Adjustment (1)
 
Fair Value
Assets
 
 

 
 

 
 

 
 

 
 

Trading account assets:
 
 

 
 

 
 

 
 

 
 

U.S. Treasury securities
 
$

 
$
69

 
$

 
$

 
$
69

U.S. government-sponsored agency securities
 

 
125

 

 

 
125

State and municipal securities
 

 
10

 

 

 
10

Interest rate derivative contracts
 

 
928

 
5

 
(172
)
 
761

Commodity derivative contracts
 

 
417

 
5

 
(392
)
 
30

Foreign exchange derivative contracts
 
1

 
104

 
1

 
(63
)
 
43

Equity derivative contracts
 

 

 
300

 
(224
)
 
76

Total trading account assets
 
1

 
1,653

 
311

 
(851
)
 
1,114

Securities available for sale:
 
 

 
 

 
 

 
 

 
 

U.S. government-sponsored agency securities
 

 

 

 

 

Residential mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 

U.S government and government-sponsored agencies
 

 
7,560

 

 

 
7,560

Privately issued
 

 
168

 

 

 
168

Privately issued - commercial mortgage-backed securities
 

 
1,691

 

 

 
1,691

Collateralized loan obligations
 

 
2,494

 

 

 
2,494

Other
 

 
9

 

 

 
9

Other debt securities:
 
 
 
 
 
 
 
 
 
 

Direct bank purchase bonds
 

 

 
1,741

 

 
1,741

Other
 

 
3

 
49

 

 
52

Equity securities
 
9

 

 

 

 
9

Total securities available for sale
 
9

 
11,925

 
1,790

 

 
13,724

Other assets:
 
 

 
 

 
 

 
 

 
 

Interest rate hedging contracts
 

 
36

 

 
(36
)
 

Other derivative contracts
 

 

 
2

 

 
2

Total other assets
 

 
36

 
2

 
(36
)
 
2

Total assets
 
$
10

 
$
13,614

 
$
2,103

 
$
(887
)
 
$
14,840

Percentage of total
 
%
 
92
%
 
14
%
 
(6
)%
 
100
%
Percentage of total Company assets
 
%
 
12
%
 
2
%
 
(1
)%
 
13
%
Liabilities
 
 

 
 

 
 

 
 

 
 

Trading account liabilities:
 
 

 
 

 
 

 
 

 
 

Interest rate derivative contracts
 
$
1

 
$
829

 
$

 
$
(667
)
 
$
163

Commodity derivative contracts
 

 
403

 
5

 
(93
)
 
315

Foreign exchange derivative contracts
 
1

 
78

 
1

 
(24
)
 
56

Equity derivative contracts
 

 

 
299

 

 
299

Securities sold, not yet purchased
 

 
61

 

 

 
61

Total trading account liabilities
 
2

 
1,371

 
305

 
(784
)
 
894

Other liabilities:
 
 

 
 

 
 

 
 

 
 

FDIC clawback liability
 

 

 
105

 

 
105

Interest rate hedging contracts
 

 
4

 

 
(3
)
 
1

Other derivative contracts
 

 
1

 
2

 

 
3

Total other liabilities
 

 
5

 
107

 
(3
)
 
109

Total liabilities
 
$
2

 
$
1,376

 
$
412

 
$
(787
)
 
$
1,003

Percentage of total
 
%
 
137
%
 
41
%
 
(78
)%
 
100
%
Percentage of total Company liabilities
 
%
 
1
%
 
%
 
(1
)%
 
%
 
 
(1)
Amounts represent the impact of legally enforceable master netting agreements between the same counterparties that allow the Company to net settle all contracts.
Fair Value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation
The following tables present a reconciliation of the assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2015 and 2014. Level 3 available for sale securities at December 31, 2015 primarily consist of direct bank purchase bonds. The Company's policy is to recognize transfers in and out of Level 1, 2 and 3 as of the end of a reporting period.
 
 
For the Year Ended
 
 
December 31, 2015
(Dollars in millions)
 
Trading
Assets
 
Securities
Available for
Sale
 
Other
Assets
 
Trading
Liabilities
 
Other
Liabilities
Asset (liability) balance, beginning of period
 
$
311

  
$
1,790

  
$
2

 
$
(305
)
 
$
(107
)
Total gains (losses) (realized/unrealized):
 
 
  
 
  
 
 
 
 
 
Included in income before taxes
 
(29
)
 

  
(1
)
 
27

 
(7
)
Included in other comprehensive income
 

 
1

 

 

 

Purchases/additions
 
2

  
148

  

 

 

Sales
 

 

 

 
(2
)
 

Settlements
 
(56
)
 
(324
)
 

 
57

 

Transfers in (out) of level 3
 

 
(12
)
 

 

 

Asset (liability) balance, end of period
 
$
228

 
$
1,603

 
$
1

 
$
(223
)
 
$
(114
)
Changes in unrealized gains (losses) included in income before taxes for assets and liabilities still held at end of period
 
$
(29
)
 
$

 
$
(1
)
 
$
27

 
$
(7
)
 
 
For the Year Ended
 
 
December 31, 2014
(Dollars in millions)
 
Trading
Assets
 
Securities
Available for
Sale
 
Other
Assets
 
Trading
Liabilities
 
Other
Liabilities
Asset (liability) balance, beginning of period
 
$
271

  
$
2,018

  
$
1

 
$
(264
)
 
$
(99
)
Total gains (losses) (realized/unrealized):
 
 
  
 
  
 
 
 
 
 
Included in income before taxes
 
61

 

  
1

 
(61
)
 
(8
)
Included in other comprehensive income
 

 
29

 

 

 

Purchases/additions
 
4

  
197

  

 

 

Sales
 

 

 

 
(5
)
 

Settlements
 
(25
)
 
(454
)
 

 
25

 

Asset (liability) balance, end of period
 
$
311

 
$
1,790

 
$
2

 
$
(305
)
 
$
(107
)
Changes in unrealized gains (losses) included in income before taxes for assets and liabilities still held at end of period
 
$
61

 
$

 
$
1

 
$
(61
)
 
$
(8
)
Significant Unobservable Inputs Level 3 Assets and Liabilities
The following table presents information about significant unobservable inputs related to the Company's significant Level 3 assets and liabilities at December 31, 2015.
 
 
December 31, 2015
(Dollars in millions)
 
Level 3
Fair Value
 
Valuation Technique
 
Significant Unobservable
Input(s)
 
Range of Inputs
 
Weighted
Average
Securities available for sale:
 
 

 
 
 
 
 
 
 
 

Direct bank purchase bonds
 
$
1,572

 
Return on equity
 
Market-required return on capital
 
8.0 - 10.0
%
9.9
%
 
 
 

 
 
 
Probability of default
 
0.0 - 25.0
%
0.5
%
 
 
 

 
 
 
Loss severity
 
10.0 - 60.0
%
30.6
%
Other liabilities:
 
 

 
 
 
 
 
 
 
 
FDIC clawback liability
 
$
112

 
Discounted cash flow
 
Probability of default
 
0.1 - 100.0
%
53.1
%
 
 
 

 
 
 
Loss severity
 
0.0 - 100.0
%
43.5
%
Financial Assets Measured at Fair Value on Nonrecurring Basis
Certain assets may be measured at fair value on a nonrecurring basis. These assets are subject to fair value adjustments that result from the application of the lower of cost or fair value accounting or write-downs of individual assets. For assets measured at fair value on a nonrecurring basis during the years ended December 31, 2015 and 2014 that were still held on the consolidated balance sheet as of the respective periods ended, the following tables present the fair value of such assets by the level of valuation assumptions used to determine each fair value adjustment.
 
 
December 31, 2015
 
Gain (Loss) For the Year Ended December 31, 2015
(Dollars in millions)
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
Loans:
 
 

 
 

 
 

 
 

 
 

Loans held for sale
 
$
18

 
$

 
$

 
$
18

 
$
(3
)
Impaired loans
 
154

 

 

 
154

 
(95
)
Premises and equipment
 

 

 

 

 
(6
)
Other assets:
 
 
 
 

 
 

 
 

 
 

OREO
 
6

 

 

 
6

 
(2
)
Private equity investments
 
7

 

 

 
7

 
(5
)
Intangible assets
 
2

 

 

 
2

 
(4
)
Total
 
$
187

 
$

 
$

 
$
187

 
$
(115
)

 
 
December 31, 2014
 
Gain (Loss) For the Year Ended December 31, 2014
(Dollars in millions)
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
 
Loans:
 
 

 
 

 
 

 
 

 
 

Impaired loans
 
$
109

 
$

 
$

 
$
109

 
$
(37
)
Other assets:
 
 
 
 

 
 

 
 

 
 

OREO
 
15

 

 

 
15

 
(6
)
Total
 
$
124

 
$

 
$

 
$
124

 
$
(43
)
Carrying Amount and Estimated Fair Value of Financial Instruments
The tables below present the carrying amount and estimated fair value of certain financial instruments, classified by valuation hierarchy level as of December 31, 2015 and 2014.
 
 
December 31, 2015
(Dollars in millions)
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
4,529

 
$
4,529

 
$
4,529

 
$

 
$

Securities held to maturity
 
10,158

 
10,207

 

 
10,207

 

Loans held for investment (1)
 
76,150

 
77,640

 

 

 
77,640

Other assets
 
16

 
17

 

 

 
17

Liabilities
 
 

 
 
 
 

 
 

 
 

Deposits
 
$
84,340

 
$
84,375

 
$

 
$
84,375

 
$

Commercial paper and other short-term borrowings
 
1,038

 
1,038

 

 
1,038

 

Long-term debt
 
12,349

 
12,351

 

 
12,351

 

Off-Balance Sheet Instruments
 
 

 
 

 
 

 
 

 
 

Commitments to extend credit and standby and commercial letters of credit
 
$
243

 
$
243

 
$

 
$

 
$
243

 
 
(1)
Excludes lease financing. The carrying amount is net of the allowance for loan and lease losses.
 
 
December 31, 2014
(Dollars in millions)
 
Carrying
Amount
 
Fair
Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 

 
 

 
 

 
 

 
 

Cash and cash equivalents
 
$
5,751

 
$
5,751

 
$
5,751

 
$

 
$

Securities held to maturity
 
8,291

 
8,412

 

 
8,412

 

Loans held for investment (1)
 
75,475

 
77,324

 

 

 
77,324

Other assets
 
59

 
11

 

 

 
11

Liabilities
 
 

 
 
 
 

 
 

 
 

Deposits
 
$
86,004

 
$
86,076

 
$

 
$
86,076

 
$

Commercial paper and other short-term borrowings
 
2,704

 
2,704

 

 
2,704

 

Long-term debt
 
6,972

 
7,073

 

 
7,073

 

Off-Balance Sheet Instruments
 
 

 
 

 
 

 
 

 
 

Commitments to extend credit and standby and commercial letters of credit
 
$
269

 
$
269

 
$

 
$

 
$
269

 
 
(1)
Excludes lease financing. The carrying amount is net of the allowance for loan and lease losses.