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Investment Securities
6 Months Ended
Jun. 30, 2011
Investment Securities [Abstract]  
Investment Securities

Note 4    Investment Securities
 
The amortized cost, other-than-temporary impairment recorded in other comprehensive income (loss), gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale securities were as follows:
 
                                                                               
    June 30, 2011       December 31, 2010  
                Unrealized Losses                         Unrealized Losses        
    Amortized
    Unrealized
    Other-than-
        Fair
      Amortized
    Unrealized
    Other-than-
        Fair
 
(Dollars in Millions)   Cost     Gains     Temporary   Other     Value       Cost     Gains     Temporary   Other     Value  
Held-to-maturity (a)
                                                                             
U.S. Treasury and agencies
  $ 2,363     $ 21     $   $     $ 2,384       $ 165     $     $   $ (1 )   $ 164  
Mortgage-backed securities
                                                                             
Residential
                                                                             
Agency
    10,635       162           (4 )     10,793         847                 (4 )     843  
Non-agency
                                                                             
Non-prime
    2                       2         3                       3  
Commercial
                                                                             
Non-agency
    5                 (3 )     2         10                 (5 )     5  
Asset-backed securities
                                                                             
Collateralized debt obligations/Collaterized loan obligations
    94       15           (9 )     100         157       13           (18 )     152  
Other
    25       1           (7 )     19         127             (1)     (7 )     119  
Obligations of state and political subdivisions
    24       1           (1 )     24         27       1           (1 )     27  
Obligations of foreign governments
    7                       7         7                       7  
Other debt securities
    125                 (25 )     100         126                 (27 )     99  
                                                                               
Total held-to-maturity
  $ 13,280     $ 200     $   $ (49 )   $ 13,431       $ 1,469     $ 14     $ (1)   $ (63 )   $ 1,419  
                                                                               
Available-for-sale (b)
                                                                             
U.S. Treasury and agencies
  $ 1,870     $ 7     $   $ (4 )   $ 1,873       $ 2,559     $ 6     $   $ (28 )   $ 2,537  
Mortgage-backed securities
                                                                             
Residential
                                                                             
Agency
    38,217       901           (46 )     39,072         37,144       718           (159 )     37,703  
Non-agency
                                                                             
Prime (c)
    985       8       (51)     (46 )     896         1,216       12       (86)     (39 )     1,103  
Non-prime
    1,108       21       (198)     (36 )     895         1,193       15       (243)     (18 )     947  
Commercial
                                                                             
Agency
    154       4                 158         194       5           (2 )     197  
Non-agency
    48       3           (1 )     50         47       3                 50  
Asset-backed securities
                                                                             
Collateralized debt obligations/Collaterized loan obligations
    194       37       (2)     (2 )     227         204       23       (2)     (1 )     224  
Other
    699       25       (3)     (9 )     712         709       23       (3)     (9 )     720  
Obligations of state and political subdivisions
    6,809       38           (165 )     6,682         6,835       3           (421 )     6,417  
Obligations of foreign governments
    6                       6         6                       6  
Corporate debt securities
    1,109       1           (88 )     1,022         1,109                 (151 )     958  
Perpetual preferred securities
    455       56           (36 )     475         456       41           (49 )     448  
Other investments
    216       15                 231         183       17           (1 )     199  
                                                                               
Total available-for-sale
  $ 51,870     $ 1,116     $ (254)   $ (433 )   $ 52,299       $ 51,855     $ 866     $ (334)   $ (878 )   $ 51,509  
                                                                               
 
(a) Held-to-maturity securities are carried at historical cost adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment.
(b) Available-for-sale securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.
(c) Prime securities are those designated as such by the issuer or those with underlying asset characteristics and/or credit enhancements consistent with securities designated as prime.
The weighted-average maturity of the available-for-sale investment securities was 7.4 years at both June 30, 2011, and December 31, 2010. The corresponding weighted-average yields were 3.33 percent and 3.41 percent, respectively. The weighted-average maturity of the held-to-maturity investment securities was 5.2 years at June 30, 2011, and 6.3 years at December 31, 2010. The corresponding weighted-average yields were 2.26 percent and 2.07 percent, respectively.
For amortized cost, fair value and yield by maturity date of held-to-maturity and available-for-sale securities outstanding at June 30, 2011, refer to Table 4 included in Management’s Discussion and Analysis which is incorporated by reference into these Notes to Consolidated Financial Statements.
Securities carried at $22.7 billion at June 30, 2011, and $28.0 billion at December 31, 2010, were pledged to secure public, private and trust deposits, repurchase agreements and for other purposes required by law. Included in these amounts were securities sold under agreements to repurchase where the buyer/lender has the right to sell or pledge the securities and which were collateralized by securities with a carrying amount of $7.2 billion at June 30, 2011, and $9.3 billion at December 31, 2010.
 
The following table provides information about the amount of interest income from taxable and non-taxable investment securities:
 
                                   
    Three Months Ended
      Six Months Ended
 
    June 30,       June 30,  
(Dollars in Millions)   2011     2010       2011     2010  
Taxable
  $ 382     $ 317       $ 733     $ 650  
Non-taxable
    77       77         154       154  
                                   
Total interest income from investment securities
  $ 459     $ 394       $ 887     $ 804  
                                   
 
The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:
 
                                   
    Three Months Ended
      Six Months Ended
 
    June 30,       June 30,  
(Dollars in Millions)   2011     2010       2011     2010  
Realized gains
  $ 1     $   –       $ 2     $ 12  
Realized losses
                         
                                   
Net realized gains (losses)
  $ 1     $       $ 2     $ 12  
                                   
Income tax (benefit) on realized gains (losses)
  $ 1     $       $ 1     $ 4  
                                   
In 2007, the Company purchased certain structured investment securities (“SIVs”) from certain money market funds managed by an affiliate of the Company. Subsequent to the initial purchase, the Company exchanged its interest in the SIVs for a pro-rata portion of the underlying investment securities according to the applicable restructuring agreements. The SIVs and the investment securities received are collectively referred to as “SIV-related securities.”
 
Some of the SIV-related securities evidenced credit deterioration at the time of acquisition by the Company. Investment securities with evidence of credit deterioration at acquisition had an unpaid principal balance and fair value of $443 million and $168 million, respectively, at June 30, 2011, and $485 million and $173 million, respectively, at December 31, 2010. Changes in the accretable balance for these securities were as follows:
 
                                   
    Three Months Ended
      Six Months Ended
 
    June 30,       June 30,  
(Dollars in Millions)   2011     2010       2011     2010  
Balance at beginning of period
  $ 126     $ 319       $ 139     $ 292  
Accretion
    (4 )     (8 )       (9 )     (15 )
Other (a)
    (5 )     (9 )       (13 )     25  
                                   
Balance at end of period
  $ 117     $ 302       $ 117     $ 302  
                                   
(a) Primarily represents changes in projected future cash flows on certain investment securities.
The Company conducts a regular assessment of its investment securities with unrealized losses to determine whether securities are other-than-temporarily impaired considering, among other factors, the nature of the securities, credit ratings or financial condition of the issuer, the extent and duration of the unrealized loss, expected cash flows of underlying collateral, market conditions and whether the Company intends to sell or it is more likely than not the Company will be required to sell the securities.
 
The following tables summarize other-than-temporary impairment by investment category:
 
                                                   
    2011       2010  
    Losses
                  Losses
             
Three Months Ended June 30
  Recorded in
    Other Gains
            Recorded in
    Other Gains
       
(Dollars in Millions)   Earnings     (Losses)     Total       Earnings     (Losses)     Total  
Held-to-maturity
                                                 
Asset-backed securities
                                                 
Other
  $     $     $       $     $     $  
                                                   
Total held-to-maturity
  $     $     $       $     $     $  
                                                   
Available-for-sale
                                                 
Mortgage-backed securities
                                                 
Non-agency residential
                                                 
Prime (a)
  $ (1 )   $ (4 )   $ (5 )     $ (1 )   $ (1 )   $ (2 )
Non-prime
    (7 )     (6 )     (13 )       (11 )     (11 )     (22 )
Asset-backed securities
                                                 
Collateralized debt obligations/Collaterized loan obligations
                        (4 )           (4 )
Other
    (1 )           (1 )       (5 )     3       (2 )
Other debt securities
                                     
                                                   
Total available-for-sale
  $ (9 )   $ (10 )   $ (19 )     $ (21 )   $ (9 )   $ (30 )
                                                   
(a) Prime securities are those designated as such by the issuer or those with underlying asset characteristics and/or credit enhancements consistent with securities designated as prime.
 
                                                   
    2011       2010  
    Losses
                  Losses
             
Six Months Ended June 30
  Recorded in
    Other Gains
            Recorded in
    Other Gains
       
(Dollars in Millions)   Earnings     (Losses)     Total       Earnings     (Losses)     Total  
Held-to-maturity
                                                 
Asset-backed securities
                                                 
Other
  $     $     $       $ (2 )   $     $ (2 )
                                                   
Total held-to-maturity
  $     $     $       $ (2 )   $     $ (2 )
                                                   
Available-for-sale
                                                 
Mortgage-backed securities
                                                 
Non-agency residential
                                                 
Prime (a)
  $ (2 )   $ (3 )   $ (5 )     $ (3 )   $ (10 )   $ (13 )
Non-prime
    (12 )     (12 )     (24 )       (46 )     (43 )     (89 )
Asset-backed securities
                                                 
Collateralized debt obligations/Collaterized loan obligations
                        (5 )           (5 )
Other
    (1 )           (1 )       (10 )     2       (8 )
Other debt securities
                        (1 )     1        
                                                   
Total available-for-sale
  $ (15 )   $ (15 )   $ (30 )     $ (65 )   $ (50 )   $ (115 )
                                                   
(a) Prime securities are those designated as such by the issuer or those with underlying asset characteristics and/or credit enhancements consistent with securities designated as prime.
 
The Company determined the other-than-temporary impairment recorded in earnings for securities by estimating the future cash flows of each individual security, using market information where available, and discounting the cash flows at the original effective rate of the security. Other-than-temporary impairment recorded in other comprehensive income (loss) was measured as the difference between that discounted amount and the fair value of each security. The following table includes the ranges for principal assumptions used for those available-for-sale non-agency mortgage-backed securities determined to be other-than-temporarily impaired:
 
                                                   
    Prime       Non-Prime  
    Minimum     Maximum     Average       Minimum     Maximum     Average  
June 30, 2011
                                                 
Estimated lifetime prepayment rates
    10 %     15 %     13 %       1 %     11 %     7 %
Lifetime probability of default rates
          3       2         1       20       8  
Lifetime loss severity rates
    30       50       36         10       70       51  
December 31, 2010
                                                 
Estimated lifetime prepayment rates
    4 %     14 %     13 %       1 %     12 %     6 %
Lifetime probability of default rates
    3       9       3         1       20       8  
Lifetime loss severity rates
    40       55       41         37       71       55  
                                                   
Changes in the credit losses on non-agency mortgage-backed securities, including SIV-related securities, and other debt securities are summarized as follows:
                                   
    Three Months Ended
      Six Months Ended
 
    June 30,       June 30,  
(Dollars in Millions)   2011     2010       2011     2010  
Balance at beginning of period
  $ 339     $ 391       $ 358     $ 335  
Credit losses on securities not previously considered other-than-temporarily impaired
    1       2         2       15  
Decreases in expected cash flows on securities for which other-than-temporary impairment was previously recognized
    8       19         13       52  
Increases in expected cash flows
    (10 )     (12 )       (17 )     (13 )
Realized losses
    (19 )     (18 )       (36 )     (25 )
Credit losses on security sales and securities expected to be sold
                  (1 )      
Other
                        18  
                                   
Balance at end of period
  $ 319     $ 382       $ 319     $ 382  
                                   
 
At June 30, 2011, certain investment securities had a fair value below amortized cost. The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and length of time the individual securities have been in continuous unrealized loss positions, at June 30, 2011:
 
                                                     
    Less Than 12 Months       12 Months or Greater       Total  
    Fair
    Unrealized
      Fair
    Unrealized
      Fair
    Unrealized
 
(Dollars in Millions)   Value     Losses       Value     Losses       Value     Losses  
Held-to-maturity
                                                   
U.S. Treasury and agencies
  $ 104     $       $     $       $ 104     $  
Mortgage-backed securities
                                                   
Residential
                                                   
Agency
    1,427       (4 )                     1,427       (4 )
Non-agency
                                                   
Non-prime
                  2               2        
Commercial
                                                   
Non-agency
                  3       (3 )       3       (3 )
Asset-backed securities
                                                   
Collateralized debt obligations/Collaterized loan obligations
    1       (1 )       41       (8 )       42       (9 )
Other
                  15       (7 )       15       (7 )
Obligations of state and political subdivisions
                  9       (1 )       9       (1 )
Other debt securities
                  99       (25 )       99       (25 )
                                                     
Total held-to-maturity
  $ 1,532     $ (5 )     $ 169     $ (44 )     $ 1,701     $ (49 )
                                                     
Available-for-sale
                                                   
U.S. Treasury and agencies
  $ 685     $ (4 )     $     $       $ 685     $ (4 )
Mortgage-backed securities
                                                   
Residential
                                                   
Agency
    7,170       (46 )       54               7,224       (46 )
Non-agency
                                                   
Prime (a)
    97       (4 )       726       (93 )       823       (97 )
Non-prime
    56       (6 )       722       (228 )       778       (234 )
Commercial
                                                   
Agency
    14                             14        
Non-agency
    4               1       (1 )       5       (1 )
Asset-backed securities
                                                   
Collateralized debt obligations/Collaterized loan obligations
    11       (3 )       7       (1 )       18       (4 )
Other
    61       (1 )       76       (11 )       137       (12 )
Obligations of state and political subdivisions
    3,177       (66 )       1,214       (99 )       4,391       (165 )
Corporate debt securities
    205       (2 )       691       (86 )       896       (88 )
Perpetual preferred securities
    73       (1 )       262       (35 )       335       (36 )
Other investments
    1               3               4        
                                                     
Total available-for-sale
  $ 11,554     $ (133 )     $ 3,756     $ (554 )     $ 15,310     $ (687 )
                                                     
(a) Prime securities are those designated as such by the issuer or those with underlying asset characteristics and/or credit enhanacements consistent with securities designated as prime.
The Company does not consider these unrealized losses to be credit-related. These unrealized losses primarily relate to changes in interest rates and market spreads subsequent to purchase. A substantial portion of securities that have unrealized losses are either corporate debt, obligations of state and political subdivisions or mortgage-backed securities issued with high investment grade credit ratings. In general, the issuers of the investment securities are contractually prohibited from prepayment at less than par, and the Company did not pay significant purchase premiums for these securities. At June 30, 2011, the Company had no plans to sell securities with unrealized losses, and believes it is more likely than not it would not be required to sell such securities before recovery of their amortized cost.