NOTE 4 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	September 30, 2015
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$3,020		$45		$—		$3,065
Federal agency securities	408		13		1		420
U.S. states and political subdivisions	167		7		—		174
MBS - agency	22,452		511		58		22,905
MBS - private	100		2		—		102
ABS	13		2		—		15
Corporate and other debt securities	36		2		—		38
Other equity securities ¹	551		1		1		551
Total securities AFS		$26,747		$583		$60		$27,270

	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 September 30, 2015, the fair value of other equity securities was comprised of the following: $32 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $111 million of 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 of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $138 million of mutual fund investments, and $7 million of other.

The following table presents interest and dividends on securities AFS:



	Three Months Ended September 30				Nine Months Ended September 30
(Dollars in millions)	2015		2014		2015		2014
Taxable interest		$143		$142		$397		$421
Tax-exempt interest	2		2		5		8
Dividends	8		9		28		27
Total interest and dividends		$153		$153		$430		$456

Securities AFS pledged to secure public deposits, repurchase agreements, trusts, and other funds had a fair value of $2.9 billion and $2.6 billion at September 30, 2015 and December 31, 2014, respectively.

The amortized cost and fair value of investments in debt securities AFS at September 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		$25			$921			$2,074			$—			$3,020
Federal agency securities	159			109			14			126			408
U.S. states and political subdivisions	38			13			101			15			167
MBS - agency	2,462			11,098			3,756			5,136			22,452
MBS - private	3			89			8			—			100
ABS	—			12			1			—			13
Corporate and other debt securities	—			36			—			—			36
Total debt securities AFS		$2,687			$12,278			$5,954			$5,277			$26,196

Fair Value:
U.S. Treasury securities		$25			$931			$2,109			$—			$3,065
Federal agency securities	163			116			14			127			420
U.S. states and political subdivisions	39			13			106			16			174
MBS - agency	2,605			11,391			3,772			5,137			22,905
MBS - private	3			91			8			—			102
ABS	—			13			2			—			15
Corporate and other debt securities	—			38			—			—			38
Total debt securities AFS		$2,835			$12,593			$6,011			$5,280			$26,719
Weighted average yield ¹	2.35		%	2.41		%	2.57		%	2.80		%	2.52		%

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 September 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. The following tables show securities AFS in an unrealized loss position at period end.



	September 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:
Federal agency securities		$33		$—		$35		$1		$68		$1
MBS - agency	3,996		35		982		23		4,978		58
ABS	—		—		9		—		9		—
Other equity securities	4		1		—		—		4		1
Total temporarily impaired securities AFS	4,033		36		1,026		24		5,059		60
OTTI securities AFS ¹:
Total OTTI securities AFS	—		—		—		—		—		—
Total impaired securities AFS		$4,033		$36		$1,026		$24		$5,059		$60



	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 presented as zero within the table.

At September 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 September 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 $11 million and $25 million were recognized for the three and nine months ended September 30, 2015, respectively. Gross realized losses of $3 million were recognized for both the three and nine months ended September 30, 2015, and OTTI losses recognized in earnings were immaterial for both periods. For both the three and nine months ended September 30, 2014, gross realized gains of $3 million were recognized. Gross realized losses of $12 million and $13 million were recognized for the three and nine months ended September 30, 2014, respectively, and OTTI losses recognized in earnings were immaterial for the nine months ended September 30, 2014.

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, a 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 nine months ended September 30, 2015, credit impairment recognized on securities AFS still held at the end of each period was immaterial, all of which related to one private MBS with a fair value of approximately $22 million at September 30, 2015. Securities that gave rise to credit impairments recognized during the nine months ended September 30, 2014, consisted of one private MBS with a fair value of approximately $19 million at September 30, 2014. The accumulated balance of credit losses recognized in earnings on securities AFS held at period end was $25 million at both September 30, 2015 and 2014. 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.