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Derivative Instruments (Tables)
9 Months Ended
Sep. 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:
 
    September 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
  $ 9,550      $      $     
 
   $ 17,400      $      $ 9  
Pay fixed/receive floating swaps
    19,264                   
 
     5,542                
Cash flow hedges
          
 
        
Interest rate contracts
          
 
        
Receive fixed/pay floating swaps
    23,700                   
 
     14,300                
Net investment hedges
          
 
        
Foreign exchange forward contracts
    824        5        1     
 
     778                
Other economic hedges
          
 
        
Interest rate contracts
          
 
        
Futures and forwards
          
 
        
Buy
    2,945        4        15     
 
     3,546        10        18  
Sell
    4,851        26        7     
 
     7,522        20        38  
Options
          
 
        
Purchased
    7,385        329            
 
     11,434        346         
Written
    3,707        12        100     
 
     7,849        7        148  
Receive fixed/pay floating swaps
    5,055               1     
 
     9,215               3  
Pay fixed/receive floating swaps
    4,595                   
 
     9,616                
Foreign exchange forward contracts
    622        2        1     
 
     962        2        6  
Equity contracts
    209               7     
 
     361               10  
Credit contracts
    1,425                   
 
     330                
Other (a)
    2,767        11        121     
 
     1,908        11        190  
Total
  $ 86,899      $  389      $  253     
 
 
 
   $ 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 $119 million at September 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 $671 million at September 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:
 
    September 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
  $ 354,783      $ 146      $ 7,358     
 
   $ 301,690      $ 309      $ 5,689  
Pay fixed/receive floating swaps
    326,646        2,763        116     
 
     316,133        2,323        206  
Other (a)
    82,379        13        50     
 
     40,261        3        16  
Options
          
 
        
Purchased
    112,927        1,583            
 
     103,489        1,794        5  
Written
    107,595        1        1,622     
 
     99,923        6        1,779  
Futures
          
 
        
Buy
                      
 
     3,623               4  
Sell
                      
 
     2,376        8         
Foreign exchange rate contracts
          
 
        
Forwards, spots and swaps
    114,004        2,523        2,202     
 
     134,666        3,010        2,548  
Options
          
 
        
Purchased
    806        29            
 
     954        22         
Written
    806               29     
 
     954               22  
Commodity contracts
          
 
        
Swaps
    2,063        61        56     
 
                    
Options
          
 
        
Purchased
    2,811        128        128     
 
                    
Credit contracts
    13,769        1        7     
 
     10,765        1        8  
Total
  $ 1,118,589      $ 7,248      $ 11,568     
 
 
 
   $ 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 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)   2023     2022     2023     2022             2023     2022     2023     2022  
Asset and Liability Management Positions
                                     
 
                                
Cash flow hedges
                                     
 
                                
Interest rate contracts
  $ (259   $ (173   $ (20   $ (6      
 
   $ (453   $ (100   $ (34   $ (22
Net investment hedges
                                     
 
                                
Foreign exchange forward contracts
    15       37                    
 
     6       63              
Non-derivative
debt instruments
    24       56                
 
 
 
     7       139              
 
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)
 
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
  $ 7,754     $ 4,728     $ 3,518     $ 901        
 
   $ 22,244     $ 11,971     $ 8,959     $ 1,536  
                   
Asset and Liability Management Positions
                                     
 
                                
Fair value hedges
                                     
 
                                
Interest rate contract derivatives
    428       180       (359     457        
 
     584       511       (230     491  
Hedged items
    (431     (179     359       (460      
 
     (589     (510     232       (495
Cash flow hedges
                                     
 
                                
Interest rate contract derivatives
    (21 )           7       8    
 
 
 
     (21 )           25       29  
 
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 $25 million into earnings during the three and nine months ended September 30, 2023, respectively, as a result of realized cash flows on discontinued cash flow hedges, compared with $8 million and $29 million during the three and nine months ended September 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)   September 30, 2023      December 31, 2022              September 30, 2023     December 31, 2022  
Line Item in the Consolidated Balance Sheet
                       
 
                
Available-for-sale
investment securities (b)
  $ 10,222      $ 4,937         
 
   $ (1,017   $ (552
Long-term debt
    9,176        17,190     
 
 
 
     (327     (142
 
(a)
The cumulative hedging adjustment related to discontinued hedging relationships on
available-for-sale
investment securities and long-term debt was $(362) million and $(18) million, respectively, at September 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 September 30, 2023, the amortized cost of the closed portfolios used in these hedging relationships was $5.8 billion, of which $5.1 billion was designated as hedged. At September 30, 2023, the cumulative amount of basis adjustments associated with these hedging relationships was $(95) 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
September 30
             Nine Months Ended 
September 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      $ 18     $ 142        
 
   $ 56     $ 439  
Purchased and written options
     Mortgage banking revenue        74       (28      
 
     89       (69
Swaps
     Mortgage banking revenue/Other noninterest
income/Interest
e
xpense
 
 
     (241     (118      
 
     (221     (569
Foreign exchange forward contracts
     Other noninterest income        8       12        
 
     (5     13  
Equity contracts
     Compensation expense        (1     (1      
 
     (4     (4
Credit contracts
    
Commer
c
ial
products revenu
e
       3              
 
     3        
Other
     Other noninterest income        1       (154      
 
           (154
Customer-Related Positions
                               
 
                
Interest rate contracts
                               
 
                
Swaps
     Commercial products revenue        103       26        
 
     198       73  
Purchased and written options
     Commercial products revenue        7       6        
 
     7       10  
Futures
     Commercial products revenue              7        
 
     (1     31  
Foreign exchange rate contracts
                               
 
                
Forwards, spots and swaps
     Commercial products revenue        19       40        
 
     118       75  
Purchased and written options
     Commercial products revenue                     
 
           1  
Commodity contracts
                               
 
                
Swaps
     Commercial products revenue        3              
 
     5        
Credit contracts
     Commercial products revenue              (1  
 
 
 
     (1 )     21