NOTE 4 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	June 30, 2016
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$4,273		$168		$—		$4,441
Federal agency securities	361		11		—		372
U.S. states and political subdivisions	164		11		—		175
MBS - agency	22,800		727		3		23,524
MBS - non-agency residential	82		1		—		83
ABS	9		2		—		11
Corporate and other debt securities	35		1		—		36
Other equity securities ¹	694		1		1		694
Total securities AFS		$28,418		$922		$4		$29,336

	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 - non-agency residential	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

¹ At June 30, 2016, the fair value of other equity securities was comprised of the following: $202 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $84 million of mutual fund investments, and $6 million of other.

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.

The following table presents interest and dividends on securities AFS:



	Three Months Ended June 30				Six Months Ended June 30
(Dollars in millions)	2016		2015		2016		2015
Taxable interest		$156		$126		$315		$254
Tax-exempt interest	2		2		3		4
Dividends	3		9		6		19
Total interest and dividends on securities AFS		$161		$137		$324		$277

Securities AFS pledged to secure public deposits, repurchase agreements, trusts, and other funds had a fair value of $4.6 billion and $3.2 billion at June 30, 2016 and December 31, 2015, respectively.

The following table presents the amortized cost, fair value, and weighted average yield of investments in debt securities AFS at June 30, 2016, 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		$—			$1,646			$2,627			$—			$4,273
Federal agency securities	145			91			13			112			361
U.S. states and political subdivisions	26			16			89			33			164
MBS - agency	2,174			9,671			10,498			457			22,800
MBS - non-agency residential	—			82			—			—			82
ABS	1			8			—			—			9
Corporate and other debt securities	—			35			—			—			35
Total debt securities AFS		$2,346			$11,549			$13,227			$602			$27,724
Fair Value:
U.S. Treasury securities		$—			$1,685			$2,756			$—			$4,441
Federal agency securities	146			98			13			115			372
U.S. states and political subdivisions	26			17			98			34			175
MBS - agency	2,285			10,009			10,761			469			23,524
MBS - non-agency residential	—			83			—			—			83
ABS	1			10			—			—			11
Corporate and other debt securities	—			36			—			—			36
Total debt securities AFS		$2,458			$11,938			$13,628			$618			$28,642
Weighted average yield ¹	2.50		%	2.40		%	2.56		%	3.04		%	2.50		%

¹Weighted average yields are based on amortized cost.

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 June 30, 2016, 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," of the Company's 2015 Annual Report on Form 10-K.

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



	June 30, 2016
	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		$—		$—		$3		$—		$3		$—
MBS - agency	438		1		398		2		836		3
ABS	—		—		6		—		6		—
Other equity securities	4		1		—		—		4		1
Total temporarily impaired securities AFS	442		2		407		2		849		4
OTTI securities AFS ¹:
MBS - non-agency residential	48		—		—		—		48		—
ABS	1		—		—		—		1		—
Total OTTI securities AFS	49		—		—		—		49		—
Total impaired securities AFS		$491		$2		$407		$2		$898		$4



	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

¹OTTI securities AFS are impaired securities for which OTTI credit losses have been previously recognized in earnings.

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

At June 30, 2016, 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. 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

Net securities gains/(losses) are comprised of gross realized gains, gross realized losses, and OTTI credit losses recognized in earnings. Gross realized gains were $4 million for both the three and six months ended June 30, 2016. Gross realized losses were immaterial and there were no OTTI credit losses recognized in earnings for both the three and six months ended June 30, 2016. Gross realized gains were $14 million for both the three and six months ended June 30, 2015. Gross realized losses were immaterial and there were no OTTI losses recognized in earnings for both the three and six months ended June 30, 2015.

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," in the Company's 2015 Annual Report on Form 10-K 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 three and six months ended June 30, 2016 and 2015, there were no credit impairment losses recognized on securities AFS held at the end of each period. The accumulated balance of OTTI credit losses recognized in earnings on securities AFS held at period end was $24 million at June 30, 2016 and $25 million at June 30, 2015. 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.