NOTE 5 – SECURITIES AVAILABLE FOR SALE

Securities Portfolio Composition



	March 31, 2017
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$5,488		$5		$71		$5,422
Federal agency securities	297		6		1		302
U.S. states and political subdivisions	319		7		4		322
MBS - agency	23,791		291		287		23,795
MBS - non-agency residential	68		3		—		71
MBS - non-agency commercial	539		1		6		534
ABS	7		2		—		9
Corporate and other debt securities	34		—		—		34
Other equity securities ¹	638		1		1		638
Total securities AFS		$31,181		$316		$370		$31,127

	December 31, 2016
(Dollars in millions)	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
U.S. Treasury securities		$5,486		$5		$86		$5,405
Federal agency securities	310		5		2		313
U.S. states and political subdivisions	279		5		5		279
MBS - agency	23,642		313		293		23,662
MBS - non-agency residential	71		3		—		74
MBS - non-agency commercial	257		—		5		252
ABS	8		2		—		10
Corporate and other debt securities	34		1		—		35
Other equity securities ¹	642		1		1		642
Total securities AFS		$30,729		$335		$392		$30,672

¹ At March 31, 2017, the fair value of other equity securities was comprised of the following: $111 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $119 million of mutual fund investments, and $6 million of other.

At December 31, 2016, the fair value of other equity securities was comprised of the following: $132 million of FHLB of Atlanta stock, $402 million of Federal Reserve Bank of Atlanta stock, $102 million of mutual fund investments, and $6 million of other.

The following table presents interest and dividends on securities AFS:



	Three Months Ended March 31
(Dollars in millions)	2017		2016
Taxable interest		$180		$159
Tax-exempt interest	2		1
Dividends	5		3
Total interest and dividends on securities AFS		$187		$163

Securities AFS pledged to secure public deposits, repurchase agreements, trusts, certain derivative agreements, and other funds had a fair value of $3.3 billion and $2.0 billion at March 31, 2017 and December 31, 2016, respectively.

The following table presents the amortized cost, fair value, and weighted average yield of investments in debt securities AFS at March 31, 2017, 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		$—			$2,345			$3,143			$—			$5,488
Federal agency securities	110			82			7			98			297
U.S. states and political subdivisions	9			32			117			161			319
MBS - agency	1,709			7,000			14,287			795			23,791
MBS - non-agency residential	—			68			—			—			68
MBS - non-agency commercial	20			12			492			15			539
ABS	—			7			—			—			7
Corporate and other debt securities	15			19			—			—			34
Total debt securities AFS		$1,863			$9,565			$18,046			$1,069			$30,543
Fair Value:
U.S. Treasury securities		$—			$2,334			$3,088			$—			$5,422
Federal agency securities	112			85			7			98			302
U.S. states and political subdivisions	9			33			122			158			322
MBS - agency	1,802			7,119			14,088			786			23,795
MBS - non-agency residential	—			71			—			—			71
MBS - non-agency commercial	20			12			486			16			534
ABS	—			9			—			—			9
Corporate and other debt securities	15			19			—			—			34
Total debt securities AFS		$1,958			$9,682			$17,791			$1,058			$30,489
Weighted average yield ¹	3.16		%	2.32		%	2.60		%	2.98		%	2.56		%

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 March 31, 2017, 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," to the Company's 2016 Annual Report on Form 10-K.

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



	March 31, 2017
	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		$4,108		$71		$—		$—		$4,108		$71
Federal agency securities	94		1		3		—		97		1
U.S. states and political subdivisions	147		4		—		—		147		4
MBS - agency	14,445		280		500		7		14,945		287
MBS - non-agency commercial	325		6		—		—		325		6
ABS	—		—		5		—		5		—
Corporate and other debt securities	11		—		—		—		11		—
Other equity securities	—		—		4		1		4		1
Total temporarily impaired securities AFS	19,130		362		512		8		19,642		370
OTTI securities AFS ¹:
MBS - non-agency residential	—		—		16		—		16		—
ABS	—		—		1		—		1		—
Total OTTI securities AFS	—		—		17		—		17		—
Total impaired securities AFS		$19,130		$362		$529		$8		$19,659		$370

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.



	December 31, 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:
U.S. Treasury securities		$4,380		$86		$—		$—		$4,380		$86
Federal agency securities	96		2		3		—		99		2
U.S. states and political subdivisions	149		5		—		—		149		5
MBS - agency	14,622		285		451		8		15,073		293
MBS - non-agency commercial	184		5		—		—		184		5
ABS	—		—		5		—		5		—
Corporate and other debt securities	12		—		—		—		12		—
Other equity securities	—		—		4		1		4		1
Total temporarily impaired securities AFS	19,443		383		463		9		19,906		392
OTTI securities AFS ¹:
MBS - non-agency residential	16		—		—		—		16		—
ABS	—		—		1		—		1		—
Total OTTI securities AFS	16		—		1		—		17		—
Total impaired securities AFS		$19,459		$383		$464		$9		$19,923		$392

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 March 31, 2017, temporarily impaired securities AFS that have been in an unrealized loss position for twelve months or longer included agency MBS, federal agency securities, one ABS collateralized by 2004 vintage home equity loans, and one equity security. 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 Company continues to receive timely distributions on the temporarily impaired ABS and equity security, and the ABS 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. For both the three months ended March 31, 2017 and 2016, there were no gross realized gains, gross realized losses, or OTTI credit losses recognized in earnings.

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," to the Company's 2016 Annual Report on Form 10-K for additional information regarding the Company's policy on securities AFS and related impairments.

The Company seeks 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 both the three months ended March 31, 2017 and 2016, there were no credit impairment losses recognized on securities AFS held at the end of the period. The accumulated balance of OTTI credit losses recognized in earnings on securities AFS held at period end was $22 million at March 31, 2017 and $24 million at March 31, 2016. 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.