Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 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:

	June 30, 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	$	19,650	$	—	$	3	$	17,400	$	—	$	9
Pay fixed/receive floating swaps		16,514		—		—		5,542		—		—
Cash flow hedges
Interest rate contracts
Receive fixed/pay floating swaps		26,700		—		—		14,300		—		—
Net investment hedges
Foreign exchange forward contracts		824		—		4		778		—		—
Other economic hedges
Interest rate contracts
Futures and forwards
Buy		4,943		4		8		3,546		10		18
Sell		5,966		25		5		7,522		20		38
Options
Purchased		8,815		249		—		11,434		346		—
Written		6,451		19		129		7,849		7		148
Receive fixed/pay floating swaps		5,105		—		—		9,215		—		3
Pay fixed/receive floating swaps		5,117		—		—		9,616		—		—
Foreign exchange forward contracts		687		1		2		962		2		6
Equity contracts		207		2		1		361		—		10
Credit contracts		625		1		—		330		—		—
Other (a)		2,273		11		146		1,908		11		190
Total	$	103,877	$	312	$	298	$	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 $2.0 billion and $146 million at June 30, 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 $192 million at June 30, 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:

	June 30, 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	$	626,975	$	287	$	6,063	$	301,690	$	309	$	5,689
Pay fixed/receive floating swaps		618,184		2,358		217		316,133		2,323		206
Other (a)		83,116		21		55		40,261		3		16
Options
Purchased		116,596		1,837		1		103,489		1,794		5
Written		113,163		1		1,831		99,923		6		1,779
Futures
Buy		—		—		—		3,623		—		4
Sell		—		—		—		2,376		8		—
Foreign exchange rate contracts
Forwards, spots and swaps		128,711		2,508		2,107		134,666		3,010		2,548
Options
Purchased		1,027		27		—		954		22		—
Written		1,027		—		27		954		—		22
Commodity contracts
Swaps		378		8		7		—		—		—
Options
Purchased		894		36		35		—		—		—
Credit contracts		13,581		1		8		10,765		1		8
Total	$	1,703,652	$	7,084	$	10,351	$	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):

	Three Months Ended June 30											Six Months Ended June 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)	2023			2022		2023			2022			2023			2022		2023			2022
Asset and Liability Management Positions
Cash flow hedges
Interest rate contracts	$	(345	)	$	73	$	(8	)	$	(8	)	$	(194	)	$	73	$	(14	)	$	(16	)
Net investment hedges
Foreign exchange forward contracts		(6	)		27		—			—			(9	)		26		—			—
Non-derivative debt instruments		1			63		—			—			(17	)		83		—			—

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 June 30												Six Months Ended June 30
	Interest Income						Interest Expense						Interest Income						Interest Expense
(Dollars in Millions)	2023			2022			2023			2022			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	$	7,526		$	3,825		$	3,111		$	390		$	14,490		$	7,243		$	5,441		$	635
Asset and Liability Management Positions
Fair value hedges
Interest rate contract derivatives		334			(186	)		243			(38	)		156			331			129			34
Hedged items		(332	)		187			(241	)		36			(158	)		(331	)		(127	)		(35	)
Cash flow hedges
Interest rate contract derivatives		—			—			11			10			—			—			18			21

Note: The Company does not exclude components from effectiveness testing for fair value and cash flow hedges. The Company reclassified losses of $11 million and $18 million into earnings during the three and six months ended June 30, 2023, respectively, as a result of realized cash flows on discontinued cash flow hedges, compared with $10 million and $21 million during the three and six months ended June 30, 2022, 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)	June 30, 2023		December 31, 2022		June 30, 2023			December 31, 2022
Line Item in the Consolidated Balance Sheet
Available-for-sale investment securities (b)	$	10,541	$	4,937	$	(695	)	$	(552	)
Long-term debt		16,431		17,190		(335	)		(142	)

(a) The cumulative hedging adjustment related to discontinued hedging relationships on available-for-sale investment securities and long-term debt was $(377) million and $333 million, respectively, at June 30, 2023, compared with $(392) million and $399 million at December 31, 2022, respectively.

(b) Includes amounts related to available-for-sale investment securities currently designated as the hedged item in a fair value hedge using the portfolio layer method. At June 30, 2023, the amortized cost of the closed portfolios used in these hedging relationships was $119 million, of which $50 million was designated as hedged. At June 30, 2023, the cumulative amount of basis adjustments associated with these hedging relationships was $(1 ) million.

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 June 30						Six Months Ended June 30
(Dollars in Millions)			2023			2022			2023			2022
Asset and Liability Management Positions
Other economic hedges
Interest rate contracts
Futures and forwards		Mortgage banking revenue	$	31		$	74		$	38		$	297
Purchased and written options		Mortgage banking revenue		17			6			15			(41	)
Swaps		Mortgage banking revenue/Other noninterest income		(38	)		(247	)		20			(451	)
Foreign exchange forward contracts		Other noninterest income		(8	)		4			(13	)		1
Equity contracts		Compensation expense		—			(1	)		(3	)		(3	)
Other		Other noninterest income		1			1			(1	)		—
Customer-Related Positions
Interest rate contracts
Swaps		Commercial products revenue		58			3			95			47
Purchased and written options		Commercial products revenue		(1	)		—			—			4
Futures		Commercial products revenue		—			8			(1	)		24
Foreign exchange rate contracts
Forwards, spots and swaps		Commercial products revenue		44			20			99			35
Purchased and written options		Commercial products revenue		—			1			—			1
Commodity contracts
Swaps		Commercial products revenue		2			—			2			—
Credit contracts		Commercial products revenue		(1	)		17			(1	)		22