Investment Securities (Tables)

12 Months Ended

Dec. 31, 2014

Investments, Debt and Equity Securities [Abstract]

Investment Securities

 TABLE 13    INVESTMENT SECURITIES

	Available-for-Sale									Held-to-Maturity
At December 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	$	121	$	122		.1		3.27	%	$	80	$	81		.4		1.36	%
Maturing after one year through five years		1,886		1,890		3.3		1.73			1,097		1,101		3.7		1.42
Maturing after five years through ten years		514		519		7.5		2.90			1,483		1,475		7.6		2.21
Maturing after ten years		101		101		18.3		1.39			57		57		10.6		1.74
Total	$	2,622	$	2,632		4.6		2.02	%	$	2,717	$	2,714		5.9		1.86	%
Mortgage-Backed Securities(a)
Maturing in one year or less	$	970	$	973		.7		1.39	%	$	320	$	320		.7		1.29	%
Maturing after one year through five years		36,671		36,984		3.9		1.87			37,598		37,737		3.7		2.00
Maturing after five years through ten years		7,104		7,162		5.9		1.73			4,079		4,100		5.8		1.31
Maturing after ten years		695		698		11.9		1.24			208		207		11.5		1.13
Total	$	45,440	$	45,817		4.2		1.83	%	$	42,205	$	42,364		3.9		1.93	%
Asset-Backed Securities(a)
Maturing in one year or less	$	–	$	–		–		–	%	$	–	$	1		.5		.79	%
Maturing after one year through five years		269		278		3.3		1.82			7		10		2.4		.88
Maturing after five years through ten years		356		363		6.8		1.94			6		6		6.4		.83
Maturing after ten years		–		–		–		–			–		7		15.3		.90
Total	$	625	$	641		5.3		1.89	%	$	13	$	24		4.3		.85	%
Obligations of State and Political Subdivisions(b)(c)
Maturing in one year or less	$	904	$	920		.5		6.62	%	$	1	$	1		.5		10.19	%
Maturing after one year through five years		4,087		4,317		2.1		6.72			1		1		2.9		8.35
Maturing after five years through ten years		519		528		7.0		4.54			1		1		7.2		8.05
Maturing after ten years		94		103		14.4		7.37			6		6		11.2		2.51
Total	$	5,604	$	5,868		2.5		6.51	%	$	9	$	9		9.0		4.37	%
Other Debt Securities
Maturing in one year or less	$	6	$	6		.2		1.01	%	$	–	$	–		–		–	%
Maturing after one year through five years		–		–		–		–			9		9		2.2		1.44
Maturing after five years through ten years		–		–		–		–			21		20		5.8		.97
Maturing after ten years		690		614		18.5		2.47			–		–		–		–
Total	$	696	$	620		18.3		2.45	%	$	30	$	29		4.8		1.11	%
Other Investments	$	445	$	491		13.6		2.21	%	$	–	$	–		–		–	%
Total investment securities(d)	$	55,432	$	56,069		4.3		2.32	%	$	44,974	$	45,140		4.0		1.92	%

(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.

	2014					2013
At December 31 (Dollars in Millions)	Amortized Cost		Percent of Total			Amortized Cost		Percent of Total
U.S. Treasury and agencies	$	5,339		5.3	%	$	4,222		5.3	%
Mortgage-backed securities		87,645		87.3			68,236		85.3
Asset-backed securities		638		.6			652		.8
Obligations of state and political subdivisions		5,613		5.6			5,685		7.1
Other debt securities and investments		1,171		1.2			1,184		1.5
Total investment securities	$	100,406		100.0	%	$	79,979		100.0	%

Investment Securities Held to Maturity

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 at December 31 were as follows:

	2014											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	$	2,717	$	15	$	–	$	(18	)	$	2,714	$	3,114	$	5	$	–		$	(79	)	$	3,040
Mortgage-backed securities
Residential
Agency		42,204		335		–		(176	)		42,363		35,671		187		–			(665	)		35,193
Non-agency non-prime (d)		1		–		–		–			1		1		–		–			–			1
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		7		–		–			7		–		9		–			–			9
Other		13		4		–		–			17		16		4		(1	)		(1	)		18
Obligations of state and political subdivisions		9		1		–		(1	)		9		12		–		–			–			12
Obligations of foreign governments		9		–		–		–			9		7		–		–			–			7
Other debt securities		21		–		–		(1	)		20		99		–		–			(11	)		88
Total held-to-maturity	$	44,974	$	362	$	–	$	(196	)	$	45,140	$	38,920	$	205	$	(1	)	$	(756	)	$	38,368

(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.

Investment Securities 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 at December 31 were as follows:

	2014												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
Available-for-sale (b)
U.S. Treasury and agencies	$	2,622	$	14	$	–		$	(4	)	$	2,632	$	1,108	$	4	$	–		$	(67	)	$	1,045
Mortgage-backed securities
Residential
Agency		44,668		593		–			(244	)		45,017		31,633		449		–			(529	)		31,553
Non-agency
Prime (c)		399		9		(2	)		(1	)		405		486		4		(8	)		(4	)		478
Non-prime (d)		261		20		(1	)		–			280		297		5		(5	)		–			297
Commercial agency		112		3		–			–			115		148		4		–			–			152
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		18		4		–			–			22		20		4		–			–			24
Other		607		13		–			(1	)		619		616		13		–			–			629
Obligations of state and political subdivisions		5,604		265		–			(1	)		5,868		5,673		116		–			(51	)		5,738
Obligations of foreign governments		6		–		–			–			6		6		–		–			–			6
Corporate debt securities		690		3		–			(79	)		614		734		–		–			(94	)		640
Perpetual preferred securities		200		27		–			(10	)		217		205		24		–			(17	)		212
Other investments		245		29		–			–			274		133		28		–			–			161
Total available-for-sale	$	55,432	$	980	$	(3	)	$	(340	)	$	56,069	$	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.

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:

Year Ended December 31 (Dollars in Millions)	2014		2013		2012
Taxable	$	1,634	$	1,375	$	1,515
Non-taxable		232		256		277
Total interest income from investment securities	$	1,866	$	1,631	$	1,792

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:

Year Ended December 31 (Dollars in Millions)	2014		2013		2012
Realized gains	$	11	$	23	$	158
Realized losses		–		–		(99	)
Net realized gains (losses)	$	11	$	23	$	59
Income tax (benefit) on net realized gains (losses)	$	4	$	9	$	23

Summary of Other-than-Temporary Impairment by Investment Category

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

	2014								2013								2012
Year Ended December 31 (Dollars in Millions)	Losses Recorded in Earnings			Other Gains (Losses)(c)		Total			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	$	–		$	(6	)	$	2	$	(4	)	$	(12	)	$	(9	)	$	(21	)
Non-prime(b)		(2	)		–		(2	)		(8	)		6		(2	)		(33	)		21			(12	)
Commercial non-agency		–			–		–			–			–		–			(1	)		(1	)		(2	)
Other asset-backed securities		–			–		–			–			–		–			(1	)		1			–
Perpetual preferred securities		(5	)		–		(5	)		–			–		–			(27	)		–			(27	)
Total available-for-sale	$	(8	)	$	1	$	(7	)	$	(14	)	$	8	$	(6	)	$	(74	)	$	12		$	(62	)

(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.

Significant Assumption Ranges for Available-for-Sale Non-Agency Mortgage-Backed Securities Determined to be 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 2014:

	Prime(a)									Non-Prime(b)
	Minimum			Maximum			Average			Minimum			Maximum			Average
Estimated lifetime prepayment rates		7	%		20	%		16	%		1	%		10	%		5	%
Lifetime probability of default rates		3			7			4			6			14			9
Lifetime loss severity rates		15			60			47			40			75			56

(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.

Changes in Credit Losses on Debt Securities Excluding Perpetual Preferred Securities

Changes in the credit losses on debt securities (excluding perpetual preferred securities) are summarized as follows:

Year Ended December 31 (Dollars in Millions)	2014			2013			2012
Balance at beginning of period	$	116		$	134		$	298
Additions to Credit Losses Due to Other-than-temporary Impairments
Credit losses on securities not previously considered other-than-temporarily impaired		–			–			6
Decreases in expected cash flows on securities for which other-than-temporary impairment was previously recognized		3			14			41
Total other-than-temporary impairment on debt securities		3			14			47
Other Changes in Credit Losses
Increases in expected cash flows		(5	)		(2	)		(15	)
Realized losses(a)		(13	)		(23	)		(39	)
Credit losses on security sales and securities expected to be sold		–			(7	)		(157	)
Balance at end of period	$	101		$	116		$	134

(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.

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

At December 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 December 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	$	184	$	(1	)	$	986	$	(17	)	$	1,170	$	(18	)
Residential agency mortgage-backed securities		5,276		(19	)		7,283		(157	)		12,559		(176	)
Other asset-backed securities		–		–			6		–			6		–
Obligations of state and political subdivisions		2		(1	)		–		–			2		(1	)
Other debt securities		–		–			20		(1	)		20		(1	)
Total held-to-maturity	$	5,462	$	(21	)	$	8,295	$	(175	)	$	13,757	$	(196	)
Available-for-sale
U.S. Treasury and agencies	$	100	$	–		$	741	$	(4	)	$	841	$	(4	)
Mortgage-backed securities
Residential
Agency		4,913		(31	)		8,203		(213	)		13,116		(244	)
Non-agency(a)
Prime(b)		106		(1	)		70		(2	)		176		(3	)
Non-prime(c)		17		–			21		(1	)		38		(1	)
Other asset-backed securities		4		–			23		(1	)		27		(1	)
Obligations of state and political subdivisions		53		(1	)		104		–			157		(1	)
Obligations of foreign governments		6		–			–		–			6		–
Corporate debt securities		–		–			429		(79	)		429		(79	)
Perpetual preferred securities		–		–			74		(10	)		74		(10	)
Total available-for-sale	$	5,199	$	(33	)	$	9,665	$	(310	)	$	14,864	$	(343	)

(a) The Company has $4 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.