Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2020

Summary of Derivative Instruments [Abstract]

Schedule of Derivative Amounts

Selected information with respect to notional amounts and recorded gross fair values at December 31, 2020, and 2019, and the related gain (loss) of derivative instruments for the years then ended is summarized as follows:

	December 31, 2020						December 31, 2019
	Notional amount		Fair value				Notional amount		Fair value
(In millions)			Other assets		Other liabilities				Other assets		Other liabilities
Derivatives designated as hedging instruments:
Cash flow hedges of floating-rate assets:
Purchased interest rate floors	$	—	$	—	$	—	$	—	$	—	$	—
Receive-fixed interest rate swaps	3,150		—		—		3,588		—		—
Fair value hedges:
Debt hedges: Receive-fixed interest rate swaps	500		—		—		1,500		—		—
Asset hedges: Pay-fixed interest rate swaps	383		3		—		—		—		—
Total derivatives designated as hedging instruments	4,033		3		—		5,088		—		—
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives 1, 2	5,986		390		2		4,409		146		5
Offsetting interest rate derivatives 2	5,986		3		409		4,422		5		157
Other interest rate derivatives	1,649		20		3		726		3		1
Foreign exchange derivatives	223		4		4		385		4		4
Total derivatives not designated as hedging instruments	13,844		417		418		9,942		158		167
Total derivatives	$	17,877	$	420	$	418	$	15,030	$	158	$	167

1 Customer-facing interest rate derivative fair values include an $18 million and $11 million net credit valuation adjustment as of December 31, 2020, and December 31, 2019, respectively. These adjustments are required to reflect both our nonperformance risk and that of the respective counterparty.

2 The fair value amounts for these derivatives do not include the settlement amounts for those trades that are cleared. Once the settlement amounts with the clearing houses are included the derivative fair values would be the following:

	December 31, 2020				December 31, 2019
(In millions)	Other assets		Other liabilities		Other assets		Other liabilities
Customer-facing interest rate derivatives	$	390	$	2	$	146	$	5
Offsetting interest rate derivatives	1		29		—		9

Schedule of Derivative Gains (Losses) Deferred in OCI or Recognized in Earnings

The amount of derivative gains (losses) from cash flow and fair value hedges that was deferred in AOCI or recognized in earnings is summarized as follows:

	Year Ended December 31, 2020
(In millions)	Effective portion of derivative gain/(loss) deferred in AOCI		Excluded components deferred in AOCI (amortization approach)		Amount of gain/(loss) reclassified from AOCI into income		Interest on fair value hedges		Hedge ineffectiveness / AOCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors	$	—	$	—	$	11	$	—	$	—
Interest rate swaps	101		—		36		—		—
Fair value hedges of liabilities:
Receive-fixed interest rate swaps	—		—		—		6		—
Basis amortization on terminated hedges 2, 3	—		—		—		13		—
Fair value hedges of assets:
Pay-fixed interest rate swaps	—		—		—		(1)		—
Basis amortization on terminated hedges 2, 3	—		—		—		—		—
Total derivatives designated as hedging instruments	$	101	$	—	$	47	$	18	$	—

	Year Ended December 31, 2019
(In millions)	Effective portion of derivative gain/(loss) deferred in AOCI		Excluded components deferred in AOCI (amortization approach)		Amount of gain/(loss) reclassified from AOCI into income		Interest on fair value hedges		Hedge ineffectiveness / AOCI reclass due to missed forecast
Cash flow hedges of floating-rate assets: 1
Purchased interest rate floors	$	—	$	27	$	3	$	—	$	—
Interest rate swaps	47		—		(7)		—		—
Fair value hedges of liabilities:
Receive-fixed interest rate swaps	—		—		—		3		—
Basis amortization on terminated hedges 2, 3	—		—		—		—		—
Fair value hedges of assets:
Pay-fixed interest rate swaps	—		—		—		—		—
Basis amortization on terminated hedges 2, 3	—		—		—		—		—
Total derivatives designated as hedging instruments	$	47	$	27	$	(4)	$	3	$	—

Note: These schedules are not intended to present at any given time our long/short position with respect to our derivative contracts.

1 Amounts recognized in OCI and reclassified from AOCI represent the effective portion of the derivative gain (loss). For the 12 months following December 31, 2020, we estimate that $61 million will be reclassified from AOCI into interest income.

2 Adjustment to interest expense resulting from the amortization of the debt basis adjustment on fixed-rate debt previously hedged by terminated receive-fixed interest rate.

3The cumulative unamortized basis adjustment from previously terminated or redesignated fair value hedges as of December 31, 2020, is $12 million and $7 million of terminated fair value debt and asset hedges, respectively. The amortization of the cumulative unamortized basis adjustment from asset hedges is not shown in the schedules because it is not significant.

Schedule of Gains (Losses) Recognized From Derivatives Not Designated As Accounting Hedges

The amount of derivative gains (losses) recognized from derivatives not designated in accounting hedges is as follows:

	Noninterest (Other) Income/(Expense)
(In millions)	2020		2019
Derivatives not designated as hedging instruments:
Customer-facing interest rate derivatives	$	324	$	146
Offsetting interest rate derivatives	(300)		(129)
Other interest rate derivatives	8		—
Foreign exchange derivatives	21		23
Total derivatives not designated as hedging instruments	$	53	$	40

Schedule of Fair Value Hedges

The following schedule presents derivatives used in fair value hedge accounting relationships, as well as pre-tax gains/(losses) recorded on such derivatives and the related hedged items for the periods presented.

	Gain/(loss) recorded in income
	Twelve Months Ended December 31, 2020						Twelve Months Ended December 31, 2019
(In millions)	Derivatives 2		Hedged items		Total income statement impact		Derivatives 2		Hedged items		Total income statement impact
Debt: Receive-fixed interest rate swaps 1,2	$	63	$	(63)	$	—	$	5	$	(5)	$	—
Assets: Pay-fixed interest rate swaps 1,2	28		(28)		—		—		—		—

1 Consists of hedges of benchmark interest rate risk of fixed-rate long-term debt and fixed-rate AFS securities. Gains and losses were recorded in net interest expense or income consistent with the hedged items.

2 The income/expense for derivatives does not reflect interest income/expense from periodic accruals and payments (which are reported above) to be consistent with the presentation of the gains/ (losses) on the hedged items.

Schedule of Hedged Item Included in Long-Term Debt

The following schedule provides selected information regarding the long-term debt in the statement of financial position in which the hedged item is included.

	Par value of hedged assets/(liabilities)				Carrying amount of the hedged assets/(liabilities)				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged assets/(liabilities)
(In millions)	2020		2019		2020		2019		2020		2019
Long-term fixed-rate debt1,2	$	(500)	$	(1,500)	$	(537)	$	(1,510)	$	(37)	$	(10)
Fixed-rate AFS securities1,2	383		—		362		—		(21)		—

1 Carrying amounts displayed above exclude issuance and purchase discounts or premiums and unamortized issuance/acquisition costs.

2 The carrying amount of the hedged items shown above (long-term fixed-rate debt and fixed-rate AFS securities) excludes amounts related to terminated fair value hedges.