NOTE 4 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	March 31, 2015
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$2,110		$35		$—		$2,145
Federal agency securities	461		16		1		476
U.S. states and political subdivisions	183		9		—		192
MBS - agency	22,366		614		28		22,952
MBS - private	118		2		1		119
ABS	19		2		—		21
Corporate and other debt securities	37		2		—		39
Other equity securities ¹	815		2		—		817
Total securities AFS		$26,109		$682		$30		$26,761

	December 31, 2014
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$1,913		$9		$1		$1,921
Federal agency securities	471		15		2		484
U.S. states and political subdivisions	200		9		—		209
MBS - agency	22,573		558		83		23,048
MBS - private	122		2		1		123
ABS	19		2		—		21
Corporate and other debt securities	38		3		—		41
Other equity securities ¹	921		2		—		923
Total securities AFS		$26,257		$600		$87		$26,770

¹At March 31, 2015, the fair value of other equity securities was comprised of the following: $207 million in FHLB of Atlanta stock, $402 million in Federal Reserve Bank of Atlanta stock, $201 million in mutual fund investments, and $7 million of other. At December 31, 2014, other equity securities was comprised of the following: $376 million in FHLB of Atlanta stock, $402 million in Federal Reserve Bank of Atlanta stock, $138 million in mutual fund investments, and $7 million of other.

The following table presents interest and dividends on securities AFS:



	Three Months Ended March 31
(Dollars in millions)	2015		2014
Taxable interest		$128		$141
Tax-exempt interest	2		3
Dividends	10		9
Total interest and dividends		$140		$153

Securities AFS pledged to secure public deposits, repurchase agreements, trusts, and other funds had a fair value of $3.1 billion and $2.6 billion at March 31, 2015 and December 31, 2014, respectively.

The amortized cost and fair value of investments in debt securities at March 31, 2015, by estimated average life, are shown below. Receipt of cash flows may differ from estimated average lives and contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.



	Distribution of Maturities
(Dollars in millions)	1 Year or Less			1-5 Years			5-10 Years			After 10 Years			Total
Amortized Cost:
U.S. Treasury securities		$200			$1,315			$595			$—			$2,110
Federal agency securities	87			205			36			133			461
U.S. states and political subdivisions	38			27			102			16			183
MBS - agency	2,524			12,008			4,168			3,666			22,366
MBS - private	—			118			—			—			118
ABS	15			3			1			—			19
Corporate and other debt securities	5			32			—			—			37
Total debt securities		$2,869			$13,708			$4,902			$3,815			$25,294
Fair Value:
U.S. Treasury securities		$203			$1,335			$607			$—			$2,145
Federal agency securities	88			215			38			135			476
U.S. states and political subdivisions	38			28			109			17			192
MBS - agency	2,679			12,343			4,249			3,681			22,952
MBS - private	—			119			—			—			119
ABS	14			5			2			—			21
Corporate and other debt securities	5			34			—			—			39
Total debt securities		$3,027			$14,079			$5,005			$3,833			$25,944
Weighted average yield ¹	1.67		%	2.26		%	2.69		%	2.81		%	2.43		%

¹Average yields are based on amortized cost and presented on an FTE basis.

Securities in an Unrealized Loss Position

The Company held certain investment securities where amortized cost exceeded fair market value, resulting in unrealized loss positions. Market changes in interest rates and credit spreads may result in temporary unrealized losses as the market price of securities fluctuates. At March 31, 2015, the Company did not intend to sell these securities nor was it more-likely-than-not that the Company would be required to sell these securities before their anticipated recovery or maturity. The Company has reviewed its portfolio for OTTI in accordance with the accounting policies described in the Company's 2014 Annual

Report on Form 10-K.



	March 31, 2015
	Less than twelve months				Twelve months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses ²		Fair Value		Unrealized Losses ²		Fair Value		Unrealized Losses ²
Temporarily impaired securities:
Federal agency securities		$47		$—		$52		$1		$99		$1
MBS - agency	2,339		9		1,175		19		3,514		28
ABS	—		—		14		—		14		—
Total temporarily impaired securities	2,386		9		1,241		20		3,627		29
OTTI securities ¹:
MBS - private	67		1		—		—		67		1
Total OTTI securities	67		1		—		—		67		1
Total impaired securities		$2,453		$10		$1,241		$20		$3,694		$30



	December 31, 2014
	Less than twelve months				Twelve months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses ²		Fair Value		Unrealized Losses ²		Fair Value		Unrealized Losses ²
Temporarily impaired securities:
U.S. Treasury securities		$150		$1		$—		$—		$150		$1
Federal agency securities	20		—		132		2		152		2
MBS - agency	2,347		6		4,911		77		7,258		83
ABS	—		—		14		—		14		—
Total temporarily impaired securities	2,517		7		5,057		79		7,574		86
OTTI securities ¹:
MBS - private	69		1		—		—		69		1
Total OTTI securities	69		1		—		—		69		1
Total impaired securities		$2,586		$8		$5,057		$79		$7,643		$87

¹Includes OTTI securities for which credit losses have been recorded in earnings in current or prior periods.

²Unrealized losses less than $0.5 million are shown as zero.

At March 31, 2015, unrealized losses on securities that have been in a temporarily impaired position for longer than twelve months included agency MBS, federal agency securities, and one ABS collateralized by 2004 vintage home equity loans. Unrealized losses on federal agency securities and agency MBS securities at March 31, 2015 were due to market interest rates being higher than the securities' stated yield. The ABS continues to receive timely principal and interest payments, and is evaluated quarterly for credit impairment. Cash flow analysis shows that the underlying collateral can withstand highly stressed loss assumptions without incurring a credit loss.

The portion of unrealized losses on OTTI securities that relates to factors other than credit is recorded in AOCI. Losses related to credit impairment on these securities are determined through estimated cash flow analyses and have been recorded in earnings in current or prior periods.

Realized Gains and Losses and Other-than-Temporarily Impaired Securities

Net securities losses are comprised of gross realized gains, gross realized losses, and OTTI losses recognized in earnings. For both the three months ended March 31, 2015 and 2014, gross realized gains and losses were immaterial and there were no OTTI losses recognized in earnings.

Credit impairment that is determined through the use of models is estimated using cash flows on security specific collateral and the transaction structure. Future expected credit losses are determined by using various assumptions, the most significant of which include default rates, prepayment rates, and loss severities. If, based on this analysis, the security is in an unrealized loss position and the Company does not expect to recover the entire amortized cost basis of the security, the expected cash flows are then discounted at the security’s initial effective interest rate to arrive at a present value amount. OTTI credit losses reflect the difference between the present value of cash flows expected to be collected and the amortized cost basis of these securities.

The Company continues to reduce existing exposure on OTTI securities primarily through paydowns. In certain instances, the amount of impairment losses recognized in earnings includes credit losses on debt securities that exceeds the total unrealized losses, and as a result, the securities may have unrealized gains in AOCI relating to factors other than credit. Subsequent credit losses may be recorded on securities without a corresponding further decline in fair value when there has been a decline in expected cash flows.

During the three months ended March 31, 2015 and 2014, there was no credit impairment recognized on securities AFS still held at the end of each period. The accumulated balance of credit losses recognized in earnings on securities AFS held at period end for which a portion of OTTI was recognized in OCI was $25 million at both March 31, 2015 and 2014, all of which was recognized in prior periods. Subsequent credit losses may be recorded on securities without a corresponding further decline in fair value when there has been a decline in expected cash flows.