Fair Values of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Valuation Assumption Ranges for Level 3 Available-for-Sale Investment Securities

The following table shows the significant valuation assumption ranges for Level 3 available-for-sale investment securities at December 31, 2013:

	Minimum			Maximum			Average
Residential Prime Non-Agency Mortgage-Backed Securities (a)
Estimated lifetime prepayment rates		6	%		20	%		13	%
Lifetime probability of default rates		–			7			4
Lifetime loss severity rates		25			65			42
Discount margin		2			5			4
Residential Non-Prime Non-Agency Mortgage-Backed Securities (b)
Estimated lifetime prepayment rates		2	%		10	%		6	%
Lifetime probability of default rates		4			12			8
Lifetime loss severity rates		15			70			54
Discount margin		1			6			3
Other Asset-Backed Securities
Estimated lifetime prepayment rates		6	%		6	%		6	%
Lifetime probability of default rates		5			5			5
Lifetime loss severity rates		40			40			40
Discount margin		7			7			7

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

(b) Includes all securities not meeting the conditions to be designated as prime.

Valuation Assumption Ranges for MSRs

The following table shows the significant valuation assumption ranges for MSRs at December 31, 2013:

	Minimum			Maximum			Average
Expected prepayment		10	%		21	%		11	%
Discount rate		10			13			10

Valuation Assumption Ranges for Derivative Commitments

The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to sell, purchase and originate mortgage loans at December 31, 2013:

	Minimum			Maximum			Average
Expected loan close rate		43	%		100	%		80	%
Inherent MSR value (basis points per loan)		48			221			124

Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:

(Dollars in Millions)	Level 1		Level 2		Level 3		Netting			Total
December 31, 2013
Available-for-sale securities
U.S. Treasury and agencies	$	7	$	1,038	$	–	$	–		$	1,045
Mortgage-backed securities
Residential
Agency		–		31,553		–		–			31,553
Non-agency
Prime (a)		–		–		478		–			478
Non-prime (b)		–		–		297		–			297
Commercial
Agency		–		152		–		–			152
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		24		–		–			24
Other		–		566		63		–			629
Obligations of state and political subdivisions		–		5,738		–		–			5,738
Obligations of foreign governments		–		6		–		–			6
Corporate debt securities		–		631		9		–			640
Perpetual preferred securities		–		212		–		–			212
Other investments		141		20		–		–			161
Total available-for-sale		148		39,940		847		–			40,935
Mortgage loans held for sale		–		3,263		–		–			3,263
Mortgage servicing rights		–		–		2,680		–			2,680
Derivative assets		–		889		515		(599	)		805
Other assets		143		588		–		–			731
Total	$	291	$	44,680	$	4,042	$	(599	)	$	48,414
Derivative liabilities	$	–	$	1,647	$	70	$	(1,192	)	$	525
Short-term borrowings (c)		112		551		–		–			663
Total	$	112	$	2,198	$	70	$	(1,192	)	$	1,188
December 31, 2012
Available-for-sale securities
U.S. Treasury and agencies	$	491	$	735	$	–	$	–		$	1,226
Mortgage-backed securities
Residential
Agency		–		29,495		–		–			29,495
Non-agency
Prime (a)		–		–		624		–			624
Non-prime (b)		–		–		355		–			355
Commercial
Agency		–		193		–		–			193
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		42		–		–			42
Other		–		577		15		–			592
Obligations of state and political subdivisions		–		6,455		–		–			6,455
Obligations of foreign governments		–		6		–		–			6
Corporate debt securities		–		722		9		–			731
Perpetual preferred securities		–		218		–		–			218
Other investments		187		15		–		–			202
Total available-for-sale		678		38,458		1,003		–			40,139
Mortgage loans held for sale		–		7,957		–		–			7,957
Mortgage servicing rights		–		–		1,700		–			1,700
Derivative assets		–		572		1,234		(418	)		1,388
Other assets		94		386		–		–			480
Total	$	772	$	47,373	$	3,937	$	(418	)	$	51,664
Derivative liabilities	$	–	$	2,128	$	55	$	(1,549	)	$	634
Short-term borrowings (c)		50		351		–		–			401
Total	$	50	$	2,479	$	55	$	(1,549	)	$	1,035

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

(b) Includes all securities not meeting the conditions to be designated as prime.

(c) Represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.

Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31:

(Dollars in Millions)	Beginning of Period Balance		Net Gains (Losses) Included in Net Income			Net Gains (Losses) Included in Other Comprehensive Income (Loss)			Purchases		Sales			Principal Payments			Issuances			Settlements			End of Period Balance		Net Change in Unrealized Gains (Losses) Relating to Assets and Liabilities Still Held at End of Period
2013
Available-for-sale securities
Mortgage-backed securities
Residential non-agency
Prime (a)	$	624	$	(6	)	$	8		$	–	$	–		$	(148	)	$	–		$	–		$	478	$	9
Non-prime (b)		355		(13	)		17			–		(20	)		(42	)		–			–			297		17
Asset-backed securities
Other		15		3			1			51		–			(7	)		–			–			63		–
Corporate debt securities		9		–			–			–		–			–			–			–			9		–
Total available-for-sale		1,003		(16	)(c)		26	(f)		51		(20	)		(197	)		–			–			847		26
Mortgage servicing rights		1,700		203	(d)		–			8		–			–			769	(g)		–			2,680		203	(d)
Net derivative assets and liabilities		1,179		(18	)(e)		–			1		(5	)		–			–			(712	)		445		(321	)(h)
2012
Available-for-sale securities
Mortgage-backed securities
Residential non-agency
Prime (a)	$	803	$	(10	)	$	91		$	–	$	(109	)	$	(151	)	$	–		$	–		$	624	$	65
Non-prime (b)		802		(24	)		228			–		(562	)		(89	)		–			–			355		80
Commercial non-agency		42		1			–			–		(38	)		(5	)		–			–			–		–
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		120		13			(8	)		–		(104	)		(21	)		–			–			–		–
Other		117		7			–			3		(93	)		(19	)		–			–			15		2
Corporate debt securities		9		–			–			–		–			–			–			–			9		–
Total available-for-sale		1,893		(13	)(i)		311	(f)		3		(906	)		(285	)		–			–			1,003		147
Mortgage servicing rights		1,519		(818	)(d)		–			42		–			–			957	(g)		–			1,700		(818	)(d)
Net derivative assets and liabilities		1,228		2,398	(j)		–			3		(5	)		–			–			(2,445	)		1,179		150	(k)
2011
Available-for-sale securities
Mortgage-backed securities
Residential non-agency
Prime (a)	$	1,103	$	6		$	4		$	–	$	(115	)	$	(195	)	$	–		$	–		$	803	$	(4	)
Non-prime (b)		947		(7	)		1			–		(13	)		(126	)		–			–			802		1
Commercial non-agency		50		3			(3	)		–		(4	)		(4	)		–			–			42		(2	)
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		135		13			5			–		–			(33	)		–			–			120		5
Other		133		10			(7	)		5		–			(24	)		–			–			117		(7	)
Corporate debt securities		9		–			–			–		–			–			–			–			9		–
Total available-for-sale		2,377		25	(l)		–	(f)		5		(132	)		(382	)		–			–			1,893		(7	)
Mortgage servicing rights		1,837		(972	)(d)		–			35		–			–			619	(g)		–			1,519		(972	)(d)
Net derivative assets and liabilities		851		1,550	(m)		–			1		(8	)		–			–			(1,166	)		1,228		442	(n)

(a) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads).

(b) Includes all securities not meeting the conditions to be designated as prime.

(c) Approximately $(14) million included in securities gains (losses) and $(2) million included in interest income.

(d) Included in mortgage banking revenue.

(e) Approximately $(149) million included in other noninterest income and $131 million included in mortgage banking revenue.

(f) Included in changes in unrealized gains and losses on securities available-for-sale.

(g) Represents MSRs capitalized during the period.

(h) Approximately $(340) million included in other noninterest income and $19 million included in mortgage banking revenue.

(i) Approximately $(47) million included in securities gains (losses) and $34 million included in interest income.

(j) Approximately $359 million included in other noninterest income and $2.0 billion included in mortgage banking revenue.

(k) Approximately $(109) million included in other noninterest income and $259 million included in mortgage banking revenue.

(l) Approximately $(31) million included in securities gains (losses) and $56 million included in interest income.

(m) Approximately $716 million included in other noninterest income and $834 million included in mortgage banking revenue.

(n) Approximately $262 million included in other noninterest income and $180 million included in mortgage banking revenue.

Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis

The following table summarizes the balances of assets measured at fair value on a nonrecurring basis as of December 31:

	2013								2012
(Dollars in Millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Loans (a)	$	–	$	–	$	128	$	128	$	–	$	–	$	140	$	140
Other assets (b)		–		–		150		150		–		–		194		194

(a) Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.

Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios

The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios for the years ended December 31:

(Dollars in Millions)	2013		2012		2011
Loans (a)	$	83	$	68	$	177
Other assets (b)		96		160		316

(a) Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully charged-off.

(b) Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.

Differences Between Aggregate Fair Value, Carrying Amount of MLHFS and Aggregate Unpaid Principal Amount

The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity as of December 31:

	2013							2012
(Dollars in Millions)	Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal			Fair Value Carrying Amount		Aggregate Unpaid Principal		Carrying Amount Over (Under) Unpaid Principal
Total loans	$	3,263	$	3,195	$	68		$	7,957	$	7,588	$	369
Nonaccrual loans		9		14		(5	)		8		13		(5	)
Loans 90 days or more past due		–		–		–			2		3		(1	)

Estimated Fair Values of Financial Instruments

The estimated fair values of the Company’s financial instruments as of December 31, are shown in the table below:

	2013										2012
	Carrying Amount		Fair Value								Carrying Amount		Fair Value
(Dollars in Millions)			Level 1		Level 2		Level 3		Total				Level 1		Level 2		Level 3		Total
Financial Assets
Cash and due from banks	$	8,477	$	8,477	$	–	$	–	$	8,477	$	8,252	$	8,252	$	–	$	–	$	8,252
Federal funds sold and securities purchased under resale agreements		163		–		163		–		163		437		–		437		–		437
Investment securities held-to-maturity		38,920		2,589		35,678		101		38,368		34,389		2,984		31,845		123		34,952
Loans held for sale (a)		5		–		–		5		5		19		–		–		19		19
Loans (b)		230,857		–		–		231,480		231,480		218,765		–		–		220,354		220,354
Other financial instruments		2,422		–		1,080		1,362		2,442		7,367		–		1,228		6,157		7,385
Financial Liabilities
Deposits		262,123		–		262,200		–		262,200		249,183		–		249,594		–		249,594
Short-term borrowings (c)		26,945		–		26,863		–		26,863		25,901		–		25,917		–		25,917
Long-term debt		20,049		–		20,391		–		20,391		25,516		–		26,205		–		26,205

(a) Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.

(b) Excludes loans measured at fair value on a nonrecurring basis.

(c) Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.