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Fair Values of Assets and Liabilities (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Valuation Assumption Ranges for MSRs
The following table shows the significant valuation assumption ranges for MSRs at September 30, 2023:
 
     Minimum     Maximum     Weighted-
Average (a)		  
Expected prepayment
     6 %      16 %      8 % 
Option adjusted spread
     4       11       5  
 
(a)
Determined based on the relative fair value of the related mortgage loans serviced.
Valuation Assumption Ranges for Derivative Commitments
The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at September 30, 2023:
 
     Minimum     Maximum     Weighted-
Average (a)		  
Expected loan close rate
     35 %      100 %      79 % 
Inherent MSR value (basis points per loan)
     58       194       118  
 
(a)
Determined based on the relative fair value of the related mortgage loans.
Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis
The following table summarizes the balances of assets and liabilities measured at fair value on a recurring basis:
 

(Dollars in Millions)
 
Level 1
 
  
Level 2
 
  
Level 3
 
  
Netting
 
 
Total
 
September 30, 2023
                                           
Available-for-sale
securities
                                           
U.S. Treasury and agencies
   $ 14,112      $ 4,595      $ —      $ —     $ 18,707  
Mortgage-backed securities
                                           
Residential agency
     —        25,614        —        —       25,614  
Commercial
                                           
Agency
     —        6,942        —        —       6,942  
Non-agency
     —        6        —        —       6  
Asset-backed securities
     —        6,868        —        —       6,868  
Obligations of state and political subdivisions
     —        9,066        —        —       9,066  
Other
     —        4        —        —       4  
Total
available-for-sale
     14,112        53,095        —        —       67,207  
Mortgage loans held for sale
     —        2,263        —        —       2,263  
Mortgage servicing rights
     —        —        3,582        —       3,582  
Derivative assets
     4        6,253        1,380        (4,515 )     3,122  
Other assets
     406        2,006        —        —       2,412  
Total
   $ 14,522      $ 63,617      $ 4,962      $ (4,515 )   $ 78,586  
Time deposits
   $ —      $ 444      $ —      $ —     $ 444  
Derivative liabilities
     —        6,685        5,136        (4,307 )     7,514  
Short-term borrowings and other liabilities (a)
     309        1,644        —        —       1,953  
Total
   $ 309      $ 8,773      $ 5,136      $ (4,307 )   $ 9,911  
December 31, 2022
                                           
Available-for-sale
securities
                                           
U.S. Treasury and agencies
   $ 13,723      $ 8,310      $ —      $ —     $ 22,033  
Mortgage-backed securities
                                           
Residential agency
     —        29,271        —        —       29,271  
Commercial
                                           
Agency
     —        7,145        —        —       7,145  
Non-agency
     —        7        —        —       7  
Asset-backed securities
     —        4,323        —        —       4,323  
Obligations of state and political subdivisions
     —        10,124        1        —       10,125  
Other
     —        6        —        —       6  
Total
available-for-sale
     13,723        59,186        1        —       72,910  
Mortgage loans held for sale
     —        1,849        —        —       1,849  
Mortgage servicing rights
     —        —        3,755        —       3,755  
Derivative assets
     9        6,608        1,255        (5,427 )      2,445  
Other assets
     248        1,756        —        —       2,004  
Total
   $ 13,980      $ 69,399      $ 5,011      $ (5,427 )    $ 82,963  
Derivative liabilities
   $ 4      $ 6,241      $ 4,454      $ (4,551 )    $ 6,148  
Short-term borrowings and other liabilities (a)
     125        1,564        —        —       1,689  
Total
   $ 129      $ 7,805      $ 4,454      $ (4,551 )    $ 7,837  
 
Note:
Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $132 million and $104 million at September 30, 2023 and December 31, 2022, respectively. The Company recorded a $5 million impairment on these equity investments during the first nine months ended 2023, and the cumulative impairment on these equity investments is $5 million. The Company has not recorded adjustments for observable price changes on these equity investments during the first nine months of 2023, or on a cumulative basis.
(a)
Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30:
 
(Dollars in Millions)   Beginning
of Period
Balance		     Net Gains
(Losses)
Included in
Net Income		     Net Gains
(Losses)
Included in
Other
Comprehensive
Income (Loss)		     Purchases     Sales     Principal
Payments		     Issuances     Settlements     End
of Period
Balance		     Net Change
in Unrealized
Gains (Losses)
Relating to
Assets and
Liabilities
Held at End
of Period		  
2023
                    
Mortgage servicing rights
   $ 3,633     $ 134
 
 
(a) 		   $ —     $ 1     $ (292 )    $ —     $ 106  (c)    $ —     $ 3,582     $ 134  (a) 
Net derivative assets and liabilities
     (3,419 )      (1,315 ) (b)      —       25       (9 )      —       —       962       (3,756 )      (693 ) (d) 
2022
                    
Available-for-sale
 
securities
                    
Obligations of state and political subdivisions
   $ 1     $ —     $ —     $ —     $ —     $ —     $ —     $ —     $ 1     $ —  
Total
 
available-for-sale
     1       —       —       —       —       —       —       —       1       —  
Mortgage servicing rights
     3,707       27  
 
(a) 		     —       1       —       —       134  (c)      —       3,869       27  (a) 
Net derivative assets and liabilities
     (2,175 )      (2,398 ) (e)      —       259       (29 )      —       11       456       (3,876 )      (1,978 ) (f) 
 
(a)
Included in mortgage banking revenue.
(b)
Approximately $35 million, $(1.4) billion and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(c)
Represents MSRs capitalized during the period.
(d)
Approximately $11 million, $(705) million and $1 million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(e)
Approximately $(95) million, $(2.1) billion and $(154) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(f)
Approximately $(78) million, $(1.7) billion and $(154) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30:
 
(Dollars in Millions)   Beginning
of Period
Balance		     Net Gains
(Losses)
Included in
Net Income		     Net Gains
(Losses)
Included in
Other
Comprehensive
Income (Loss)		     Purchases     Sales     Principal
Payments		     Issuances     Settlements     End
of Period
Balance		     Net Change
in Unrealized
Gains (Losses)
Relating to
Assets and
Liabilities
Held at End
of Period		  
2023
                    
Available-for-sale
 
securities
                    
Obligations of state and political subdivisions
   $ 1     $ —     $ —     $ —     $ —     $ (1 )    $ —     $ —     $ —     $ —  
Total
 
available-for-sale
     1       —       —       —       —       (1 )      —       —       —       —  
Mortgage servicing rights
     3,755       (37 ) (a)      —       3       (440)       —       301  (c)      —       3,582       (37 ) (a) 
Net derivative assets and liabilities
     (3,199 )      (3,558 ) (b)      —       430       (28)       —       —       2,599       (3,756 )      (1,925 ) (d) 
2022
                    
Available-for-sale
 
securities
                    
Asset-backed securities
   $ 7     $ —     $ (3 )    $ —     $ (4 )    $ —     $ —     $ —     $ —     $ —  
Obligations of state and political subdivisions
     1       —       —       —       —       —       —       —       1       —  
Total
 
available-for-sale
     8       —       (3 )      —       (4 )      —       —       —       1       —  
Mortgage servicing rights
     2,953       435
 
 
(a) 		     —       7       1       —       473  (c)      —       3,869       435
 
 (a) 
Net derivative assets and liabilities
     799       (5,759 ) (e)      —       351       (30 )      —       11       752       (3,876 )      (4,240 ) (f) 
 
(a)
Included in mortgage banking revenue.
(b)
Approximately $133 million and $(3.7) billion included in mortgage banking revenue and commercial products revenue, respectively.
(c)
Represents MSRs capitalized during the period.
(d)
Approximately $11 million and $(1.9) billion included in mortgage banking revenue and commercial products revenue, respectively.
(e)
Approximately $(198) million, $(5.4) billion and $(154) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(f)
Approximately $(78) million, $(4.0) billion and $(154) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis
The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of the reporting date:
 
    September 30, 2023      December 31, 2022  
(Dollars in Millions)   Level 1      Level 2      Level 3      Total      Level 1      Level 2      Level 3      Total  
                 
Loans (a)
   $ —      $ —      $ 173      $ 173      $ —      $ —      $ 97      $ 97  
                 
Other assets (b)
     —        —        24        24        —        —        21        21  
 
(a)
Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully
charged-off.
(b)
Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.
Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios
The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios:
 
    Three Months Ended
September 30		      Nine Months Ended
September 30		  
(Dollars in Millions)   2023      2022      2023      2022  
Loans (a)
   $ 71      $ 2      $ 281      $ 35  
         
Other assets (b)
     1        1        2        12  
 
(a)
Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully
charged-off.
(b)
Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.
Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity
The following table summarizes the differences between the aggregate fair value carrying amount of the assets and liabilities for which the fair value option has been elected and the aggregate remaining contractual principal balance outstanding:
 
    September 30, 2023             December 31, 2022  
(Dollars in Millions)   Fair
Value
Carrying
Amount		      Contractual
Principal
Outstanding		      Carrying
Amount Over
(Under) Contractual
Principal Outstanding		             Fair
Value
Carrying
Amount		      Contractual
Principal
Outstanding		      Carrying
Amount Over
(Under) Contractual
Principal Outstanding		  
Total loans (a)
   $ 2,263      $ 2,266      $ (3 )       
 
    $ 1,849      $ 1,848      $ 1  
Time deposits
     444        445        (1 )  
 
 
 
      —        —        —  
 
(a)
Includes nonaccrual loans
of
 $
1
 million
 ca
rri
ed at
fair value
with
 contractual principal outstanding
 of $1 million
at September 30, 2023 and $1 million
 car
ried at
 fair value
with contractual principal outstanding
of $1 million
at December 31, 2022
.
I
ncludes
loans 90 days or more past due of
 $3 million
carried at fair value with contractual principal outstanding 
of
 $3 million at September 30, 2023 and $1 million
carried at fair value with contractual principal outstanding of $1 million at December 31, 2022. 
Estimated Fair Values of Financial Instruments
The estimated fair values of the Company’s financial instruments are shown in the table below:
 
    September 30, 2023     December 31, 2022  
   
Carrying
Amount
            Fair Value           
Carrying
Amount
            Fair Value  
(Dollars in Millions)           Level 1      Level 2      Level 3      Total                    Level 1      Level 2      Level 3      Total  
Financial Assets
                  
 
                
Cash and due from banks
   $ 64,354        $ 64,354      $ —      $ —      $ 64,354    
 
   $ 53,542        $ 53,542      $ —      $ —      $ 53,542  
Federal funds sold and securities purchased under resale agreements
     1,847          —        1,847        —        1,847    
 
     356          —        356        —        356  
Investment securities
held-to-maturity
     85,342          1,283        69,076        —        70,359    
 
     88,740          1,293        76,581        —        77,874  
Loans held for sale (a)
     73          —        —        73        73    
 
     351          —        —        351        351  
Loans
     368,016          —        —        356,814        356,814    
 
     381,277          —        —        368,874        368,874  
Other (b)
     2,369          —        1,710        659        2,369    
 
     2,962          —        2,224        738        2,962  
Financial Liabilities
                  
 
                
Time deposits (c)
     53,100          —        52,934        —        52,934    
 
     32,946          —        32,338        —        32,338  
Short-term borrowings (d)
     19,947          —        19,612        —        19,612    
 
     29,527          —        29,145        —        29,145  
Long-term debt
     43,074          —        40,377        —        40,377    
 
     39,829          —        37,622        —        37,622  
Other (d)
     5,196    
 
 
 
      —        1,314        3,882        5,196    
 
 
 
     5,137    
 
 
 
      —        1,500        3,637        5,137  
 
(a)
Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.
(b)
Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and
tax-advantaged
investments.
(c)
Excludes time deposits for which the fair value option under applicable accounting guidance was elected.
(d)
Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
(d)
Includes operating lease liabilities and liabilities related to
tax-advantaged
investments.