Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2023

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:

	March 31, 2023						December 31, 2022
	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	$	—	$	—	$	17,400	$	—	$	9
Pay fixed/receive floating swaps		13,564		—		—		5,542		—		—
Cash flow hedges
Interest rate contracts
Receive fixed/pay floating swaps		18,800		—		—		14,300		—		—
Net investment hedges
Foreign exchange forward contracts		784		—		9		778		—		—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		8,120		29		15		3,546		10		18
Sell		6,891		12		32		7,522		20		38
Options
Purchased		14,109		344		—		11,434		346		—
Written		10,295		20		159		7,849		7		148
Receive fixed/pay floating swaps		8,504		1		—		9,215		—		3
Pay fixed/receive floating swaps		9,190		—		—		9,616		—		—
Foreign exchange forward contracts		1,124		2		7		962		2		6
Equity contracts		361		6		7		361		—		10
Credit contracts		375		1		—		330		—		—
Other (a)		2,140		12		158		1,908		11		190
Total	$	111,657	$	427	$	387	$	90,763	$	396	$	422

(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 $157 million at March 31, 2023, respectively, compared to $1.8 billion and $190 million at December 31, 2022, respectively. In addition, includes short-term underwriting purchase and sale commitments with total notional values of $250 million at March 31, 2023, and $13 million at December 31, 2022.

Summary of Customer-Related Derivative Positions of Company

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

	March 31, 2023						December 31, 2022
	Notional Value		Fair Value				Notional Value		Fair Value
(Dollars in Millions)			Assets		Liabilities				Assets		Liabilities
Interest rate contracts
Receive fixed/pay floating swaps	$	314,593	$	576	$	4,527	$	301,690	$	309	$	5,689
Pay fixed/receive floating swaps		325,360		2,005		329		316,133		2,323		206
Other (a)		53,267		3		32		40,261		3		16
Options
Purchased		113,374		1,551		9		103,489		1,794		5
Written		111,689		12		1,545		99,923		6		1,779
Futures
Buy		417		—		—		3,623		—		4
Sell		—		—		—		2,376		8		—
Foreign exchange rate contracts
Forwards, spots and swaps		129,301		2,638		2,196		134,666		3,010		2,548
Options
Purchased		1,211		28		—		954		22		—
Written		1,211		—		28		954		—		22
Credit contracts		11,066		1		8		10,765		1		8
Total	$	1,061,489	$	6,814	$	8,674	$	1,014,834	$	7,476	$	10,277

(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) for the three months ended March 31:

	Gains (Losses) Recognized in Other Comprehensive Income (Loss)						Gains (Losses) Reclassified from Other Comprehensive Income (Loss) into Earnings
(Dollars in Millions)	2023			2022			2023			2022
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	151		$	—		$	(6	)	$	(8	)
Net investment hedges
Foreign exchange forward contracts		(3	)		(1	)		—			—
Non-derivative debt instruments		(18	)		20			—			—

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 for the three months ended March 31:

	Interest Income						Interest Expense
(Dollars in Millions)	2023			2022			2023			2022
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	$	6,964		$	3,418		$	2,330		$	245
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		(178	)		517			(114	)		72
Hedged items		174			(518	)		114			(71	)
Cash flow hedges
Interest rate contract derivatives		—			—			7			11

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $7 million and $11 million into earnings during the three months ended March 31, 2023 and 2022, respectively, as a result of realized cash flows on discontinued cash flow hedges. 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)	March 31, 2023		December 31, 2022		March 31, 2023			December 31, 2022
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities	$	13,065	$	4,937	$	(365	)	$	(552	)
Long-term debt		16,644		17,190		(61	)		(142	)

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(379) million and $366 million, respectively, at March 31, 2023, compared with $(392) million and $399 million at December 31, 2022, 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 for the three months ended March 31:

	Location of Gains (Losses) Recognized in Earnings
(Dollars in Millions)			2023			2022
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	7		$	223
Purchased and written options		Mortgage banking revenue		(2	)		(47	)
Swaps		Mortgage banking revenue		58			(204	)
Foreign exchange forward contracts		Other noninterest income		(5	)		(3	)
Equity contracts		Compensation expense		(3	)		(2	)
Other		Other noninterest income		(2	)		(1	)
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		52			17
Purchased and written options		Commercial products revenue		—			4
Futures		Commercial products revenue		(1	)		16
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		28			15
Credit contracts		Commercial products revenue		—			5