NOTE 4 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	June 30, 2015
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$2,905		$16		$8		$2,913
Federal agency securities	466		13		2		477
U.S. states and political subdivisions	178		6		—		184
MBS - agency	22,431		461		159		22,733
MBS - private	110		2		—		112
ABS	15		2		—		17
Corporate and other debt securities	35		2		—		37
Other equity securities ¹	639		1		—		640
Total securities AFS		$26,779		$503		$169		$27,113

	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

¹ At June 30, 2015, the fair value of other equity securities was comprised of the following: $174 million in FHLB of Atlanta stock, $402 million in Federal Reserve Bank of Atlanta stock, $58 million in mutual fund investments, and $6 million of other. At December 31, 2014, the fair value of 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 June 30				Six Months Ended June 30
(Dollars in millions)	2015		2014		2015		2014
Taxable interest		$126		$138		$254		$279
Tax-exempt interest	2		2		4		5
Dividends	9		9		19		18
Total interest and dividends		$137		$149		$277		$302

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 June 30, 2015 and December 31, 2014, respectively.

The amortized cost and fair value of investments in debt securities AFS at June 30, 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			$1,717			$988			$—			$2,905
Federal agency securities	80			209			42			135			466
U.S. states and political subdivisions	42			20			101			15			178
MBS - agency	2,664			12,267			3,348			4,152			22,431
MBS - private	—			110			—			—			110
ABS	13			1			1			—			15
Corporate and other debt securities	3			32			—			—			35
Total debt securities AFS		$3,002			$14,356			$4,480			$4,302			$26,140

Fair Value:
U.S. Treasury securities		$202			$1,725			$986			$—			$2,913
Federal agency securities	80			219			44			134			477
U.S. states and political subdivisions	42			21			105			16			184
MBS - agency	2,819			12,511			3,322			4,081			22,733
MBS - private	—			112			—			—			112
ABS	13			3			1			—			17
Corporate and other debt securities	3			34			—			—			37
Total debt securities AFS		$3,159			$14,625			$4,458			$4,231			$26,473
Weighted average yield ¹	2.19		%	2.29		%	2.66		%	2.77		%	2.40		%

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

Securities AFS in an Unrealized Loss Position

The Company held certain investment securities AFS 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 June 30, 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 reviewed its portfolio for OTTI in accordance with the accounting policies described in the Company's 2014 Annual Report on Form 10-K and the amount of OTTI was deemed not material at June 30, 2015 or December 31, 2014. The following tables show securities AFS in an unrealized loss position at period end.



	June 30, 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 AFS:
U.S. Treasury securities		$1,034		$8		$—		$—		$1,034		$8
Federal agency securities	76		1		45		1		121		2
MBS - agency	10,172		116		1,048		43		11,220		159
ABS	—		—		11		—		11		—
Total temporarily impaired securities AFS	11,282		125		1,104		44		12,386		169
OTTI securities AFS ¹:
MBS - private	64		—		—		—		64		—
Total OTTI securities AFS	64		—		—		—		64		—
Total impaired securities AFS		$11,346		$125		$1,104		$44		$12,450		$169



	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 AFS:
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 AFS	2,517		7		5,057		79		7,574		86
OTTI securities AFS ¹:
MBS - private	69		1		—		—		69		1
Total OTTI securities AFS	69		1		—		—		69		1
Total impaired securities AFS		$2,586		$8		$5,057		$79		$7,643		$87

¹Includes OTTI securities AFS 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 June 30, 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 June 30, 2015 were due to market interest rates being higher than the securities' stated yields. 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. Any unrealized losses related to credit impairment on these securities are determined through estimated cash flow analyses and are recorded in earnings.

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

Net securities gains/(losses) are comprised of gross realized gains, gross realized losses, and OTTI credit losses recognized in earnings. Gross realized gains of $14 million were recognized for both the three and six months ended June 30, 2015. Gross realized losses were immaterial for both the three and six months ended June 30, 2015, and there were no OTTI losses recognized in earnings for either period. For the three and six months ended June 30, 2014, gross realized gains and losses, as well as OTTI losses recognized in earnings were immaterial.

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.

During the three and six months ended June 30, 2015, there was no credit impairment recognized on securities AFS still held at the end of each period. The securities that gave rise to credit impairments recognized during the three and six months ended June 30, 2014, consisted of one private MBS with a fair value of approximately $19 million at June 30, 2014. The accumulated balance of credit losses recognized in earnings on securities AFS held at period end was $25 million at both June 30, 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.