Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Assets And Liabilities Recorded At Fair Value On A Recurring Basis

The following tables present the recorded amount of assets and liabilities measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013.



(in millions)	Total		Level 1		Level 2		Level 3
June 30, 2014
Trading securities:
Deferred compensation plan assets	$	96	$	96	$	—	$	—
Equity and other non-debt securities	2		2		—		—
Residential mortgage-backed securities (a)	3		—		3		—
State and municipal securities	1		—		1		—
Corporate debt securities	1		—		1		—
Total trading securities	103		98		5		—
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities	65		65		—		—
Residential mortgage-backed securities (a)	9,141		—		9,141		—
State and municipal securities	23		—		—		23		(b)
Corporate debt securities	55		—		54		1		(b)
Equity and other non-debt securities	250		132		—		118		(b)
Total investment securities available-for-sale	9,534		197		9,195		142
Derivative assets:
Interest rate contracts	344		—		344		—
Energy derivative contracts	153		—		153		—
Foreign exchange contracts	20		—		20		—
Warrants	4		—		—		4
Total derivative assets	521		—		517		4
Total assets at fair value	$	10,158	$	295	$	9,717	$	146
Derivative liabilities:
Interest rate contracts	$	115	$	—	$	115	$	—
Energy derivative contracts	151		—		151		—
Foreign exchange contracts	20		—		20		—
Other	2		—		—		2
Total derivative liabilities	288		—		286		2
Deferred compensation plan liabilities	96		96		—		—
Total liabilities at fair value	$	384	$	96	$	286	$	2


(a)	Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.


(b)	Auction-rate securities.



(in millions)	Total		Level 1		Level 2		Level 3
December 31, 2013
Trading securities:
Deferred compensation plan assets	$	96	$	96	$	—	$	—
Equity and other non-debt securities	7		7		—		—
Residential mortgage-backed securities (a)	2		—		2		—
State and municipal securities	3		—		3		—
Total trading securities	108		103		5		—
Investment securities available-for-sale:
U.S. Treasury and other U.S. government agency securities	45		45		—		—
Residential mortgage-backed securities (a)	8,926		—		8,926		—
State and municipal securities	22		—		—		22		(b)
Corporate debt securities	56		—		55		1		(b)
Equity and other non-debt securities	258		122		—		136		(b)
Total investment securities available-for-sale	9,307		167		8,981		159
Derivative assets:
Interest rate contracts	380		—		380		—
Energy derivative contracts	105		—		105		—
Foreign exchange contracts	15		—		15		—
Warrants	3		—		—		3
Total derivative assets	503		—		500		3
Total assets at fair value	$	9,918	$	270	$	9,486	$	162
Derivative liabilities:
Interest rate contracts	$	133	$	—	$	133	$	—
Energy derivative contracts	102		—		102		—
Foreign exchange contracts	14		—		14		—
Other	2		—		—		2
Total derivative liabilities	251		—		249		2
Deferred compensation plan liabilities	96		96		—		—
Total liabilities at fair value	$	347	$	96	$	249	$	2


(a)	Residential mortgage-backed securities issued and/or guaranteed by U.S. government agencies or U.S. government-sponsored enterprises.


(b)	Auction-rate securities.

Changes In Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following table summarizes the changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three- and six-month periods ended June 30, 2014 and 2013.



			Net Realized/Unrealized Gains (Losses) (Pretax)

	Balance at Beginning of Period		Recorded in Earnings							Recorded in Other Comprehensive Income							Balance at End of Period

(in millions)			Realized			Unrealized								Sales
Three Months Ended June 30, 2014
Investment securities available-for-sale:
State and municipal securities (a)	$	23	$	—		$	—			$	—			$	—		$	23
Corporate debt securities (a)	1		—			—				—				—			1
Equity and other non-debt securities (a)	118		—			—				1			(b)	(1		)	118
Total investment securities available-for-sale	142		—			—				1			(b)	(1		)	142
Derivative assets:
Warrants	3		4		(d)	—				—				(3		)	4
Derivative liabilities:
Other	2		—			—				—				—			2
Three Months Ended June 30, 2013
Investment securities available-for-sale:
State and municipal securities (a)	$	23	$	—		$	—			$	2		(b)	$	—		$	25
Corporate debt securities (a)	1		—			—				—				—			1
Equity and other non-debt securities (a)	153		—			—				(7		)	(b)	—			146
Total investment securities available-for-sale	177		—			—				(5		)	(b)	—			172
Derivative assets:
Warrants	3		—			1			(d)	—				(1		)	3
Derivative liabilities:
Other	1		—			(2		)	(c)	—				—			3
Six Months Ended June 30, 2014
Investment securities available-for-sale:
State and municipal securities (a)	$	22	$	—		$	—			$	1		(b)	$	—		$	23
Corporate debt securities (a)	1		—			—				—				—			1
Equity and other non-debt securities (a)	136		1		(c)	—				6			(b)	(25		)	118
Total investment securities available-for-sale	159		1		(c)	—				7			(b)	(25		)	142
Derivative assets:
Warrants	3		4		(d)	1			(d)	—				(4		)	4
Derivative liabilities:
Other	2		—			—				—				—			2
Six Months Ended June 30, 2013
Investment securities available-for-sale:
State and municipal securities (a)	$	23	$	—		$	—			$	2		(b)	$	—		$	25
Corporate debt securities (a)	1		—			—				—				—			1
Equity and other non-debt securities (a)	156		—			—				(6		)	(b)	(4		)	146
Total investment securities available-for-sale	180		—			—				(4		)	(b)	(4		)	172
Derivative assets:
Warrants	3		1		(d)	1			(d)	—				(2		)	3
Derivative liabilities:
Other	1		—			(2		)	(c)	—				—			3


(a)	Auction-rate securities.


(b)	Recorded in "net unrealized gains (losses) on investment securities available-for-sale" in other comprehensive income.


(c)	Realized and unrealized gains and losses due to changes in fair value recorded in "net securities gains" on the consolidated statements of comprehensive income.


(d)	Realized and unrealized gains and losses due to changes in fair value recorded in "other noninterest income" on the consolidated statements of comprehensive income.

Assets And Liabilities Recorded At Fair Value On A Nonrecurring Basis

All assets recorded at fair value on a nonrecurring basis were classified as Level 3 at June 30, 2014 and December 31, 2013 and are presented in the following table. No liabilities were recorded at fair value on a nonrecurring basis at June 30, 2014 and December 31, 2013.



(in millions)	Level 3
June 30, 2014
Loans:
Commercial	$	10
Real estate construction	17
Commercial mortgage	68
Total loans	95
Nonmarketable equity securities	1
Other real estate	1
Total assets at fair value	$	97
December 31, 2013
Loans:
Commercial	$	43
Real estate construction	20
Commercial mortgage	61
International	4
Total loans	128
Nonmarketable equity securities	2
Other real estate	5
Total assets at fair value	$	135

Quantitative Information About Level 3 Measurements

The following table presents quantitative information related to the significant unobservable inputs utilized in the Corporation's Level 3 recurring fair value measurement as of June 30, 2014 and December 31, 2013. The Corporation's Level 3 recurring fair value measurements include auction-rate securities where fair value is determined using an income approach based on a discounted cash flow model. The inputs in the table below reflect management's expectation of continued illiquidity in the secondary auction-rate securities market due to a lack of market activity for the issuers remaining in the portfolio, a lack of market incentives for issuer redemptions, and the expectation for a continuing low interest rate environment. The June 30, 2014 workout periods reflect management's view that short-term interest rates could begin to rise in 2015.



			Discounted Cash Flow Model
			Unobservable Input
	Fair Value (in millions)		Discount Rate	Workout Period (in years)
June 30, 2014
State and municipal securities (a)	$	23	3% - 10%	1 - 3.5
Equity and other non-debt securities (a)	118		4% - 8%	1 - 2.5
December 31, 2013
State and municipal securities (a)	$	22	5% - 10%	3 - 4
Equity and other non-debt securities (a)	136		5% - 8%	2 - 3


(a)	Auction-rate securities.

Estimated Fair Values Of Financial Instruments Not Recorded At Fair Value In Their Entirety On A Recurring Basis

The carrying amount and estimated fair value of financial instruments not recorded at fair value in their entirety on a recurring basis on the Corporation’s consolidated balance sheets are as follows:



	Carrying Amount			Estimated Fair Value
(in millions)				Total			Level 1		Level 2		Level 3
June 30, 2014
Assets
Cash and due from banks	$	1,226		$	1,226		$	1,226	$	—	$	—
Interest-bearing deposits with banks	2,668			2,668			2,668		—		—
Loans held-for-sale	6			6			—		6		—
Total loans, net of allowance for loan losses (a)	47,291			47,236			—		—		47,236
Customers’ liability on acceptances outstanding	10			10			10		—		—
Nonmarketable equity securities (b)	12			19			—		—		19
Restricted equity investments	92			92			92		—		—
Liabilities
Demand deposits (noninterest-bearing)	24,774			24,774			—		24,774		—
Interest-bearing deposits	24,434			24,434			—		24,434		—
Customer certificates of deposit	4,962			4,955			—		4,955		—
Total deposits	54,170			54,163			—		54,163		—
Short-term borrowings	176			176			176		—		—
Acceptances outstanding	10			10			10		—		—
Medium- and long-term debt	2,620			2,593			—		2,593		—
Credit-related financial instruments	(94		)	(94		)	—		—		(94		)
December 31, 2013
Assets
Cash and due from banks	$	1,140		$	1,140		$	1,140	$	—	$	—
Interest-bearing deposits with banks	5,311			5,311			5,311		—		—
Loans held-for-sale	4			4			—		4		—
Total loans, net of allowance for loan losses (a)	44,872			44,801			—		—		44,801
Customers’ liability on acceptances outstanding	11			11			11		—		—
Nonmarketable equity securities (b)	12			19			—		—		19
Restricted equity investments	133			133			133		—		—
Liabilities
Demand deposits (noninterest-bearing)	23,875			23,875			—		23,875		—
Interest-bearing deposits	24,354			24,354			—		24,354		—
Customer certificates of deposit	5,063			5,055			—		5,055		—
Total deposits	53,292			53,284			—		53,284		—
Short-term borrowings	253			253			253		—		—
Acceptances outstanding	11			11			11		—		—
Medium- and long-term debt	3,543			3,540			—		3,540		—
Credit-related financial instruments	(88		)	(88		)	—		—		(88		)


(a)	Included $95 million and $128 million of impaired loans recorded at fair value on a nonrecurring basis at June 30, 2014 and December 31, 2013, respectively.


(b)	Included $1 million and $2 million of nonmarketable equity securities recorded at fair value on a nonrecurring basis at June 30, 2014 and December 31, 2013, respectively.

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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