Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Asset and Liability Management Derivative Positions of Company

The following table summarizes the asset and liability management derivative positions of the Company:

	September 30, 2022						December 31, 2021
	Notional Value		Fair Value				Notional Value		Fair Value
(Dollars in Millions)			Assets		Liabilities				Assets		Liabilities
Fair value hedges
Interest rate contracts
Receive fixed/pay floating swaps	$	17,400	$	—	$	—	$	12,350	$	—	$	—
Pay fixed/receive floating swaps		3,820		—		—		16,650		—		—
Cash flow hedges
Interest rate contracts
Receive fixed/pay floating swaps		10,800		—		24		—		—		—
Net investment hedges
Foreign exchange forward contracts		782		25		—		793		—		4
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		7,211		42		160		9,322		10		16
Sell		16,777		341		102		29,348		25		27
Options
Purchased		11,350		357		2		18,570		256		—
Written		9,443		4		127		9,662		52		231
Receive fixed/pay floating swaps		10,570		—		1		9,653		—		—
Pay fixed/receive floating swaps		12,154		—		—		7,033		—		—
Foreign exchange forward contracts		665		9		4		735		2		6
Equity contracts		181		—		14		209		5		—
Other (a)		2,289		13		188		1,792		—		125
Total	$	103,442	$	791	$	622	$	116,117	$	350	$	409

(a) Includes derivative liability swap agreements related to the sale of a portion of the Company’s Class B common and preferred shares of Visa Inc. The Visa swap agreements had a total notional value and fair value of $1.8 billion and $186 million at September 30, 2022, respectively, compared to $1.8 billion and $125 million at December 31, 2021, respectively. In addition, includes short-term underwriting purchase and sale commitments with total notional values of $465 million at September 30, 2022, and $8 million at December 31, 2021.

Summary of Customer-Related Derivative Positions of Company

The following table summarizes the customer-related derivative positions of the Company:

	September 30, 2022						December 31, 2021
	Notional Value		Fair Value				Notional Value		Fair Value
(Dollars in Millions)			Assets		Liabilities				Assets		Liabilities
Interest rate contracts
Receive fixed/pay floating swaps	$	225,353	$	303	$	5,251	$	178,701	$	2,007	$	438
Pay fixed/receive floating swaps		211,261		2,219		131		174,176		134		670
Other (a)		23,258		1		4		16,267		1		2
Options
Purchased		98,660		1,648		—		89,679		194		36
Written		95,636		—		1,640		85,211		36		176
Futures
Buy		736		—		—		3,607		—		—
Sell		2,085		—		—		3,941		—		—
Foreign exchange rate contracts
Forwards, spots and swaps		96,952		3,883		3,874		89,321		1,145		1,143
Options
Purchased		746		54		—		805		19		—
Written		746		—		54		805		—		19
Credit contracts		9,068		2		7		9,331		1		5
Total	$	764,501	$	8,110	$	10,961	$	651,844	$	3,537	$	2,489

(a) Primarily represents floating rate interest rate swaps that pay based on differentials between specified interest rate indexes.

Summary of Effective Portion of Gains (Losses) Recognized in Other Comprehensive Income (Loss) and Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings

The table below shows the effective portion of the gains (losses) recognized in other comprehensive income (loss) and the gains (losses) reclassified from other comprehensive income (loss) into earnings (net-of-tax):

	Three Months Ended September 30											Nine Months Ended September 30
	Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings						Gains (Losses) Recognized in Other Comprehensive Income (Loss)					Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2022			2021		2022			2021			2022			2021		2022			2021
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	(173	)	$	6	$	(6	)	$	(6	)	$	(100	)	$	91	$	(22	)	$	(3	)
Net investment hedges
Foreign exchange forward contracts		37			17		—			—			63			16		—			—
Non-derivative debt instruments		56			27		—			—			139			61		—			—

Note: The Company does not exclude components from effectiveness testing for cash flow and net investment hedges.

Summary of Effect of Fair Value and Cash Flow Hedge Accounting Included in Interest Expense on Consolidated Statement of Income

The table below shows the effect of fair value and cash flow hedge accounting on the Consolidated Statement of Income:

	Three Months Ended September 30												Nine Months Ended September 30
	Interest Income						Interest Expense						Interest Income						Interest Expense
(Dollars in Millions)	2022			2021			2022			2021			2022			2021			2022			2021
Total amount of income and expense line items presented in the Consolidated Statement of Income in which the effects of fair value or cash flow hedges are recorded	$	4,728		$	3,409		$	901		$	238		$	11,971		$	10,132		$	1,536		$	761
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		180			45			457			112			511			14			491			185
Hedged items		(179	)		(45	)		(460	)		(113	)		(510	)		(15	)		(495	)		(185	)
Cash flow hedges
Interest rate contract derivatives		—			—			8			8			—			—			29			4

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $8 million and $29 million into earnings during the three and nine months ended September 30, 2022, respectively, as a result of realized cash flows on discontinued cash flow hedges, compared with $13 million and $40 million during the three and nine months ended September 30, 2021, respectively. No amounts were reclassified into earnings on discontinued cash flow hedges because it is probable the original hedged forecasted cash flows will not occur.

Summary of Cumulative Hedging Adjustments and the Carrying Amount of Assets and Liabilities Designated in Fair Value Hedges

The table below shows cumulative hedging adjustments and the carrying amount of assets and liabilities designated in fair value hedges:

	Carrying Amount of the Hedged Assets and Liabilities				Cumulative Hedging Adjustment (a)
(Dollars in Millions)	September 30, 2022		December 31, 2021		September 30, 2022			December 31, 2021
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities	$	2,902	$	16,445	$	(937	)	$	(26	)
Long-term debt		16,831		12,278		(116	)		585

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(406) million and $434 million, respectively, at September 30, 2022, compared with $(6) million and $640 million at December 31, 2021, respectively.

Summary of Gains (Losses) Recognized in Earnings for Other Economic Hedges and Customer-Related Positions

The table below shows the gains (losses) recognized in earnings for other economic hedges and the customer-related positions:

	Location of Gains (Losses) Recognized in Earnings		Three Months Ended September 30						Nine Months Ended September 30
(Dollars in Millions)			2022			2021			2022			2021
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	142		$	101		$	439		$	432
Purchased and written options		Mortgage banking revenue		(28	)		171			(69	)		436
Swaps		Mortgage banking revenue		(118	)		(39	)		(569	)		(236	)
Foreign exchange forward contracts		Other noninterest income		12			9			13			(1	)
Equity contracts		Compensation expense		(1	)		1			(4	)		6
Other		Other noninterest income		(154	)		2			(154	)		3
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		26			26			73			78
Purchased and written options		Commercial products revenue		6			(1	)		10			(4	)
Futures		Commercial products revenue		7			—			31			—
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		40			23			75			69
Purchased and written options		Commercial products revenue		—			1			1			1
Credit contracts		Commercial products revenue		(1	)		(1	)		21			(3	)