NOTE 5 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	December 31, 2015
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$3,460		$3		$14		$3,449
Federal agency securities	402		10		1		411
U.S. states and political subdivisions	156		8		—		164
MBS - agency	22,877		397		150		23,124
MBS - private	92		2		—		94
ABS	11		2		1		12
Corporate and other debt securities	37		1		—		38
Other equity securities ¹	533		1		1		533
Total securities AFS		$27,568		$424		$167		$27,825

	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 December 31, 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, $93 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:



	Year Ended December 31
(Dollars in millions)	2015		2014		2013
Taxable interest		$552		$565		$537
Tax-exempt interest	6		10		10
Dividends	35		38		32
Total interest and dividends		$593		$613		$579

Securities AFS pledged to secure public deposits, repurchase agreements, trusts, and other funds had a fair value of $3.2 billion and $2.6 billion at December 31, 2015 and 2014, respectively.

The following table presents the amortized cost, fair value, and weighted average yield of investments in debt securities AFS at December 31, 2015, by remaining contractual maturity, with the exception of MBS and ABS, which are based on estimated average life. Receipt of cash flows may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.



	Distribution of Remaining Maturities
(Dollars in millions)	Due in 1 Year or Less			Due After 1 Year through 5 Years			Due After 5 Years through 10 Years			Due After 10 Years			Total
Amortized Cost:
U.S. Treasury securities		$—			$1,271			$2,189			$—			$3,460
Federal agency securities	163			105			13			121			402
U.S. states and political subdivisions	35			6			101			14			156
MBS - agency	2,383			9,134			6,997			4,363			22,877
MBS - private	—			92			—			—			92
ABS	9			—			1			1			11
Corporate and other debt securities	—			37			—			—			37
Total debt securities AFS		$2,590			$10,645			$9,301			$4,499			$27,035
Fair Value:
U.S. Treasury securities		$—			$1,265			$2,184			$—			$3,449
Federal agency securities	165			111			13			122			411
U.S. states and political subdivisions	35			7			107			15			164
MBS - agency	2,513			9,286			6,979			4,346			23,124
MBS - private	—			94			—			—			94
ABS	11			—			—			1			12
Corporate and other debt securities	—			38			—			—			38
Total debt securities AFS		$2,724			$10,801			$9,283			$4,484			$27,292
Weighted average yield ¹	2.38		%	2.40		%	2.66		%	2.90		%	2.57		%

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

Securities AFS in an Unrealized Loss Position

The Company held certain investment securities AFS where amortized cost exceeded fair value, resulting in unrealized loss positions. Market changes in interest rates and credit spreads may result in temporary unrealized losses as the market prices of securities fluctuate. At December 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 reviewed its portfolio for OTTI in accordance with the accounting policies described in Note 1, "Significant Accounting Policies."

Securities AFS in an unrealized loss position at period end are presented in the following tables.



	December 31, 2015
	Less than twelve months				Twelve months or longer				Total
(Dollars in millions)	Fair Value		Unrealized Losses ²		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses ²
Temporarily impaired securities AFS:
U.S. Treasury securities		$2,169		$14		$—		$—		$2,169		$14
Federal agency securities	75		—		34		1		109		1
MBS - agency	11,434		114		958		36		12,392		150
ABS	—		—		7		1		7		1
Other equity securities	3		1		—		—		3		1
Total temporarily impaired securities AFS	13,681		129		999		38		14,680		167
OTTI securities AFS ¹:
ABS	1		—		—		—		1		—
Total OTTI securities AFS	1		—		—		—		1		—
Total impaired securities AFS		$13,682		$129		$999		$38		$14,681		$167



	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

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

²Unrealized losses less than $0.5 million are presented as zero within the table.

At December 31, 2015, temporarily impaired securities AFS that have been in an unrealized loss position for twelve months or longer included agency MBS, federal agency securities, and one ABS collateralized by 2004 vintage home equity loans. Unrealized losses on these temporarily impaired agency MBS and federal agency securities were due to market interest rates being higher than the securities' stated coupon rates. The temporarily impaired ABS continues to receive timely principal and interest payments, and is evaluated quarterly for credit impairment. Unrealized losses on securities AFS that relate to factors other than credit are recorded in AOCI, net of tax.

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



	Year Ended December 31
(Dollars in millions)	2015			2014			2013
Gross realized gains		$25			$28			$39
Gross realized losses	(3		)	(42		)	(36		)
OTTI credit losses recognized in earnings	(1		)	(1		)	(1		)
Net securities gains/(losses)		$21			($15	)		$2

Securities AFS in an unrealized loss position are evaluated quarterly for other-than-temporary credit impairment, which is determined using cash flow analyses that take into account security specific collateral and transaction structure. Future expected credit losses are determined 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. Credit losses on the OTTI security are recognized in earnings and reflect the difference between the present value of cash flows expected to be collected and the amortized cost basis of the security. See Note 1, "Significant Accounting Policies," for additional information regarding the Company's policy on securities AFS and related impairments.

The Company continues to reduce existing exposure on OTTI securities primarily through paydowns. In certain instances, the amount of credit losses recognized in earnings on a debt security exceeds the total unrealized losses on the security, which may result in unrealized gains relating to factors other than credit recorded in AOCI, net of tax.

During the years ended December 31, 2015, 2014, and 2013, credit impairment losses recognized on securities AFS held at the end of each period were immaterial. The accumulated balance of OTTI credit losses recognized in earnings on securities AFS held at period end was $25 million for each of the years ended December 31, 2015, 2014, and 2013. 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.

The following table presents a summary of the significant inputs used in determining the measurement of OTTI credit losses recognized in earnings for private MBS and ABS for the year ended December 31:



	2015 ¹	2014 ¹	2013
Default rate	9%	2%	2 - 9%
Prepayment rate	13%	16%	7 - 21%
Loss severity	56%	46%	46 - 74%

¹During the year ended December 31, 2015, all OTTI credit losses recognized in earnings related to one private MBS security with a fair value of $20 million at December 31, 2015. During the year ended December 31, 2014, OTTI credit losses recognized in earnings related to one private MBS security with a fair value of $16 million at December 31, 2014.

Assumption ranges represent the lowest and highest lifetime average estimates of each security for which credit losses were recognized in earnings. Ranges may vary from period to period as the securities for which credit losses are recognized vary. Additionally, severity may vary widely when losses are few and large.