Investment Securities (Tables)

3 Months Ended

Mar. 31, 2014

Investments Debt And Equity Securities [Abstract]

Investment Securities

	Available-for-Sale									Held-to-Maturity
At March 31, 2014 (Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)			Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	30	$	30		.4		4.53	%	$	650	$	651		.2		.96	%
Maturing after one year through five years		31		32		2.4		3.12			80		81		1.2		1.36
Maturing after five years through ten years		842		804		8.5		2.83			1,195		1,137		8.3		2.09
Maturing after ten years		201		196		16.4		2.19			59		59		11.1		1.75
Total	$	1,104	$	1,062		9.6		2.77	%	$	1,984	$	1,928		5.4		1.68	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	298	$	302		.6		2.34	%	$	12	$	12		.7		2.17	%
Maturing after one year through five years		17,414		17,414		3.8		2.07			24,023		23,908		3.6		2.26
Maturing after five years through ten years		16,918		16,980		5.9		1.80			13,819		13,655		5.6		1.62
Maturing after ten years		1,692		1,694		13.2		1.20			740		752		12.1		1.24
Total	$	36,322	$	36,390		5.2		1.91	%	$	38,594	$	38,327		4.5		2.02	%
Asset-Backed Securities (a)
Maturing in one year or less	$	–	$	–		–		–	%	$	–	$	–		.1		.38	%
Maturing after one year through five years		272		283		3.9		1.54			11		14		3.6		.81
Maturing after five years through ten years		362		369		7.5		2.45			3		3		6.5		.92
Maturing after ten years		–		–		17.3		2.45			1		9		10.0		.97
Total	$	634	$	652		6.0		2.06	%	$	15	$	26		4.5		.84	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	146	$	149		.6		6.43	%	$	1	$	1		.7		10.39	%
Maturing after one year through five years		4,614		4,769		2.5		6.79			2		2		2.6		8.36
Maturing after five years through ten years		576		577		6.7		5.15			1		1		7.9		8.03
Maturing after ten years		96		90		22.6		5.77			7		7		11.9		2.65
Total	$	5,432	$	5,585		3.2		6.59	%	$	11	$	11		9.1		4.78	%
Other Debt Securities
Maturing in one year or less	$	51	$	51		.2		5.71	%	$	6	$	6		.2		1.60	%
Maturing after one year through five years		–		–		–		–			78		78		2.5		1.12
Maturing after five years through ten years		–		–		–		–			24		13		6.6		.98
Maturing after ten years		690		625		19.2		2.47			–		–		–		–
Total	$	741	$	676		17.9		2.69	%	$	108	$	97		3.3		1.12	%
Other Investments	$	356	$	396		17.8		2.74	%	$	–	$	–		–		–	%
Total investment securities (d)	$	44,589	$	44,761		5.4		2.52	%	$	40,712	$	40,389		4.5		2.00	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities anticipating future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, yield to maturity if purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and contractual maturity for securities with a fair value equal to or below par.

(d) The weighted-average maturity of the available-for-sale investment securities was 6.0 years at December 31, 2013, with a corresponding weighted-average yield of 2.64 percent. The weighted-average maturity of the held-to-maturity investment securities was 4.5 years at December 31, 2013, with a corresponding weighted-average yield of 2.00 percent.

(e) Average yields are presented on a fully-taxable equivalent basis under a tax rate of 35 percent. Yields on available-for-sale and held-to-maturity investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity. Average yield and maturity calculations exclude equity securities that have no stated yield or maturity.

	March 31, 2014					December 31, 2013
(Dollars in Millions)	Amortized Cost		Percent of Total			Amortized Cost		Percent of Total
U.S. Treasury and agencies	$	3,088		3.6	%	$	4,222		5.3	%
Mortgage-backed securities		74,916		87.8			68,236		85.3
Asset-backed securities		649		.8			652		.8
Obligations of state and political subdivisions		5,443		6.4			5,685		7.1
Other debt securities and investments		1,205		1.4			1,184		1.5
Total investment securities	$	85,301		100.0	%	$	79,979		100.0	%

Investment Securities Held to Maturity and Available for Sale

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 investment securities were as follows:

	March 31, 2014												December 31, 2013
					Unrealized Losses												Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary(e)			Other (f)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary(e)			Other (f)			Fair Value
Held-to-maturity (a)
U.S. Treasury and agencies	$	1,984	$	3	$	–		$	(59	)	$	1,928	$	3,114	$	5	$	–		$	(79	)	$	3,040
Mortgage-backed securities
Residential
Agency		38,593		209		–			(476	)		38,326		35,671		187		–			(665	)		35,193
Non-agency non-prime (d)		1		–		–			–			1		1		–		–			–			1
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		9		–			–			9		–		9		–			–			9
Other		15		4		(1	)		(1	)		17		16		4		(1	)		(1	)		18
Obligations of state and political subdivisions		11		–		–			–			11		12		–		–			–			12
Obligations of foreign governments		9		–		–			–			9		7		–		–			–			7
Other debt securities		99		–		–			(11	)		88		99		–		–			(11	)		88
Total held-to-maturity	$	40,712	$	225	$	(1	)	$	(547	)	$	40,389	$	38,920	$	205	$	(1	)	$	(756	)	$	38,368
Available-for-sale (b)
U.S. Treasury and agencies	$	1,104	$	4	$	–		$	(46	)	$	1,062	$	1,108	$	4	$	–		$	(67	)	$	1,045
Mortgage-backed securities
Residential
Agency		35,426		498		–			(440	)		35,484		31,633		449		–			(529	)		31,553
Non-agency
Prime (c)		466		7		(5	)		(3	)		465		486		4		(8	)		(4	)		478
Non-prime (d)		290		10		(3	)		–			297		297		5		(5	)		–			297
Commercial agency		140		4		–			–			144		148		4		–			–			152
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		19		5		–			–			24		20		4		–			–			24
Other		615		13		–			–			628		616		13		–			–			629
Obligations of state and political subdivisions		5,432		174		–			(21	)		5,585		5,673		116		–			(51	)		5,738
Obligations of foreign governments		6		–		–			–			6		6		–		–			–			6
Corporate debt securities		735		–		–			(65	)		670		734		–		–			(94	)		640
Perpetual preferred securities		205		26		–			(13	)		218		205		24		–			(17	)		212
Other investments		151		27		–			–			178		133		28		–			–			161
Total available-for-sale	$	44,589	$	768	$	(8	)	$	(588	)	$	44,761	$	41,059	$	651	$	(13	)	$	(762	)	$	40,935

(a) Held-to-maturity investment securities are carried at historical cost or at fair value at the time of transfer from the available-for-sale to held-to-maturity category, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment.

(b) Available-for-sale investment 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 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). When the Company determines the designation, prime securities typically have a weighted average credit score of 725 or higher and a loan-to-value of 80 percent or lower; however, other pool characteristics may result in designations that deviate from these credit score and loan-to-value thresholds.

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

(e) Represents impairment not related to credit for those investment securities that have been determined to be other-than-temporarily impaired.

(f) Represents unrealized losses on investment securities that have not been determined to be other-than-temporarily impaired.

Summary of Information about Amount of Interest Income from Taxable and Non-Taxable Investment Securities

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

Three Months Ended March 31 (Dollars in Millions)	2014		2013
Taxable	$	381	$	344
Non-taxable		60		66
Total interest income from investment securities	$	441	$	410

Summary of Information about Amount of Gross Gains and Losses Realized through Sales of Available-for-sale Investment Securities

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 March 31 (Dollars in Millions)	2014		2013
Realized gains	$	5	$	12
Realized losses		–		–
Net realized gains (losses)	$	5	$	12
Income tax (benefit) on net realized gains (losses)	$	2	$	5

Summary of Other-than-Temporary Impairment by Investment Category

The following table summarizes other-than-temporary impairment by investment category:

	2014						2013
Three Months Ended March 31 (Dollars in Millions)	Losses Recorded in Earnings		Other Gains (Losses) (c)		Total		Losses Recorded in Earnings			Other Gains (Losses) (c)		Total
Available-for-sale
Mortgage-backed securities
Non-agency residential
Prime (a)	$	–	$	–	$	–	$	(1	)	$	1	$	–
Non-prime (b)		–		–		–		(6	)		5		(1	)
Total available-for-sale	$	–	$	–	$	–	$	(7	)	$	6	$	(1	)

(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) Losses represent the non-credit portion of other-than-temporary impairment recorded in other comprehensive income (loss) for investment securities determined to be other-than-temporarily impaired during the period. Gains represent recoveries in the fair value of securities that had non-credit other-than-temporary impairment during the period.

Summary of Ranges used in Valuation of Non-Agency Mortgage-Backed Securities Other than Temporarily Impaired

The following table includes the ranges for significant assumptions used for those available-for-sale non-agency mortgage-backed securities determined to be other-than-temporarily impaired during the three months ended March 31, 2014:

	Prime (a)
	Minimum			Maximum			Average
Estimated lifetime prepayment rates		20	%		20	%		20	%
Lifetime probability of default rates		5			5			5
Lifetime loss severity rates		45			45			45

(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).

Changes in Credit Losses on Debt Securities

Changes in the credit losses on debt securities are summarized as follows:

Three Months Ended March 31 (Dollars in Millions)	2014			2013
Balance at beginning of period	$	116		$	134
Additions to Credit Losses Due to Other-than-temporary Impairments
Decreases in expected cash flows on securities for which other-than-temporary impairment was previously recognized		–			7
Total other-than-temporary impairment on debt securities		–			7
Other Changes in Credit Losses
Increases in expected cash flows		(2	)		–
Realized losses (a)		(3	)		(8	)
Balance at end of period	$	111		$	133

(a) Primarily represents principal losses allocated to mortgage and asset-backed securities in the Company’s portfolio under the terms of the securitization transaction documents.

Schedule of Gross Unrealized Losses and Fair Value of Company's Investment Securities with Unrealized Losses

At March 31, 2014, 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 investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at March 31, 2014:

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Held-to-maturity
U.S. Treasury and agencies	$	1,012	$	(59	)	$	–	$	–		$	1,012	$	(59	)
Residential agency mortgage-backed securities		22,447		(432	)		1,202		(44	)		23,649		(476	)
Other asset-backed securities		–		–			10		(2	)		10		(2	)
Obligations of state and political subdivisions		3		–			–		–			3		–
Other debt securities		–		–			12		(11	)		12		(11	)
Total held-to-maturity	$	23,462	$	(491	)	$	1,224	$	(57	)	$	24,686	$	(548	)
Available-for-sale
U.S. Treasury and agencies	$	845	$	(41	)	$	95	$	(5	)	$	940	$	(46	)
Mortgage-backed securities
Residential
Agency		14,566		(323	)		2,580		(117	)		17,146		(440	)
Non-agency (a)
Prime (b)		47		(1	)		175		(7	)		222		(8	)
Non-prime (c)		33		–			44		(3	)		77		(3	)
Other asset-backed securities		23		–			3		–			26		–
Obligations of state and political subdivisions		441		(17	)		81		(4	)		522		(21	)
Obligations of foreign governments		6		–			–		–			6		–
Corporate debt securities		50		–			442		(65	)		492		(65	)
Perpetual preferred securities		–		–			120		(13	)		120		(13	)
Total available-for-sale	$	16,011	$	(382	)	$	3,540	$	(214	)	$	19,551	$	(596	)

(a) The Company has $11 million of unrealized losses on residential non-agency mortgage-backed securities. Credit-related other-than-temporary impairment on these securities may occur if there is further deterioration in the underlying collateral pool performance. Borrower defaults may increase if economic conditions worsen. Additionally, deterioration in home prices may increase the severity of projected losses.

(b) 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).

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