Investment Securities (Tables)

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Investment Securities

 Table 4    Investment Securities

	Available-for-Sale									Held-to-Maturity
At September 30, 2017 (Dollars in Millions)	Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)			Amortized Cost		Fair Value		Weighted- Average Maturity in Years		Weighted- Average Yield (e)
U.S. Treasury and Agencies
Maturing in one year or less	$	5,188	$	5,177		.5		.82	%	$	–	$	–		–		–	%
Maturing after one year through five years		13,124		13,066		3.1		1.51			1,546		1,548		3.5		1.80
Maturing after five years through ten years		3,851		3,825		5.5		1.86			3,647		3,590		6.2		1.81
Maturing after ten years		–		–		–		–			–		–		–		–
Total	$	22,163	$	22,068		2.9		1.41	%	$	5,193	$	5,138		5.4		1.81	%
Mortgage-Backed Securities (a)
Maturing in one year or less	$	99	$	101		.6		4.27	%	$	129	$	129		.5		3.08	%
Maturing after one year through five years		17,946		17,889		4.4		2.03			23,627		23,525		3.8		2.07
Maturing after five years through ten years		19,291		19,149		5.9		2.11			14,745		14,635		5.7		2.21
Maturing after ten years		2,416		2,422		12.9		2.26			287		288		12.4		2.21
Total	$	39,752	$	39,561		5.6		2.09	%	$	38,788	$	38,577		4.6		2.13	%
Asset-Backed Securities (a)
Maturing in one year or less	$	–	$	–		–		–	%	$	–	$	1		.5		1.88	%
Maturing after one year through five years		333		338		3.8		.95			5		6		3.2		1.91
Maturing after five years through ten years		85		87		5.3		2.92			2		2		6.1		2.02
Maturing after ten years		–		–		–		–			–		3		16.6		1.85
Total	$	418	$	425		4.1		1.35	%	$	7	$	12		3.9		1.94	%
Obligations of State and Political Subdivisions (b) (c)
Maturing in one year or less	$	367	$	369		.2		7.37	%	$	–	$	–		–		–	%
Maturing after one year through five years		580		608		3.2		6.04			1		1		3.3		8.15
Maturing after five years through ten years		3,519		3,548		8.7		5.41			5		6		8.3		2.77
Maturing after ten years		1,215		1,156		19.9		4.94			–		–		–		–
Total	$	5,681	$	5,681		10.0		5.50	%	$	6	$	7		7.8		3.32	%
Other Debt Securities
Maturing in one year or less	$	–	$	–		–		–	%	$	2	$	2		–		1.68	%
Maturing after one year through five years		–		–		–		–			22		22		2.8		2.09
Maturing after five years through ten years		–		–		–		–			–		–		–		–
Maturing after ten years		–		–		–		–			–		–		–		–
Total	$	–	$	–		–		–	%	$	24	$	24		2.6		2.05	%
Other Investments	$	27	$	37		–		.01	%	$	–	$	–		–		–	%
Total investment securities (d)	$	68,041	$	67,772		5.1		2.15	%	$	44,018	$	43,758		4.7		2.09	%

(a) Information related to asset and mortgage-backed securities included above is presented based upon weighted-average maturities anticipating future prepayments.

(b) Information related to obligations of state and political subdivisions is presented based upon yield to first optional call date if the security is purchased at a premium, yield to maturity if purchased at par or a discount.

(c) Maturity calculations for obligations of state and political subdivisions are based on the first optional call date for securities with a fair value above par and contractual maturity for securities with a fair value equal to or below par.

(d) The weighted-average maturity of the available-for-sale investment securities was 5.1 years at December 31, 2016, with a corresponding weighted-average yield of 2.06 percent. The weighted-average maturity of the held-to-maturity investment securities was 4.6 years at December 31, 2016, with a corresponding weighted-average yield of 1.93 percent.

(e) Weighted-average yields for obligations of state and political subdivisions are presented on a fully-taxable equivalent basis under a federal income tax rate of 35 percent. Yields on available-for-sale and held-to-maturity investment securities are computed based on amortized cost balances, excluding any premiums or discounts recorded related to the transfer of investment securities at fair value from available-for-sale to held-to-maturity. Weighted-average yield and maturity calculations exclude equity securities that have no stated yield or maturity.

	September 30, 2017					December 31, 2016
(Dollars in Millions)	Amortized Cost		Percent of Total			Amortized Cost		Percent of Total
U.S. Treasury and agencies	$	27,356		24.4	%	$	22,560		20.5	%
Mortgage-backed securities		78,540		70.1			81,698		74.3
Asset-backed securities		425		.4			483		.4
Obligations of state and political subdivisions		5,687		5.1			5,173		4.7
Other debt securities and investments		51		–			62		.1
Total investment securities	$	112,059		100.0	%	$	109,976		100.0	%

Investment Securities Available-for-Sale

The amortized cost, other-than-temporary impairment recorded in other comprehensive income (loss), gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale investment securities were as follows:

	September 30, 2017											December 31, 2016
					Unrealized Losses											Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary (e)		Other (f)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary (e)			Other (f)			Fair Value
Available-for-sale (b)
U.S. Treasury and agencies	$	22,163	$	25	$	–	$	(120	)	$	22,068	$	17,314	$	11	$	–		$	(198	)	$	17,127
Mortgage-backed securities
Residential
Agency		39,744		197		–		(388	)		39,553		43,558		225		–			(645	)		43,138
Non-agency
Prime (c)		–		–		–		–			–		240		6		(3	)		(1	)		242
Non-prime (d)		–		–		–		–			–		178		20		(3	)		–			195
Commercial agency		8		–		–		–			8		15		–		–			–			15
Other asset-backed securities		418		7		–		–			425		475		8		–			–			483
Obligations of state and political subdivisions		5,681		88		–		(88	)		5,681		5,167		55		–			(183	)		5,039
Corporate debt securities		–		–		–		–			–		11		–		–			(2	)		9
Other investments		27		10		–		–			37		27		9		–			–			36
Total available-for-sale	$	68,041	$	327	$	–	$	(596	)	$	67,772	$	66,985	$	334	$	(6	)	$	(1,029	)	$	66,284

(a) Held-to-maturity investment securities are carried at historical cost or at fair value at the time of transfer from the available-for-sale to held-to-maturity category, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment.

(b) Available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

(c) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads). When the Company determines the designation, prime securities typically have a weighted-average credit score of 725 or higher and a loan-to-value of 80 percent or lower; however, other pool characteristics may result in designations that deviate from these credit score and loan-to-value thresholds.

(d) Includes all securities not meeting the conditions to be designated as prime.

(e) Represents impairment not related to credit for those investment securities that have been determined to be other-than-temporarily impaired.

(f) Represents unrealized losses on investment securities that have not been determined to be other-than-temporarily impaired.

Investment Securities Held-to-Maturity

 The amortized cost, other-than-temporary impairment recorded in other comprehensive income (loss), gross unrealized holding gains and losses, and fair value of held-to-maturity and available-for-sale investment securities were as follows:

	September 30, 2017											December 31, 2016
					Unrealized Losses											Unrealized Losses
(Dollars in Millions)	Amortized Cost		Unrealized Gains		Other-than- Temporary (e)		Other (f)			Fair Value		Amortized Cost		Unrealized Gains		Other-than- Temporary (e)		Other (f)			Fair Value
Held-to-maturity (a)
U.S. Treasury and agencies	$	5,193	$	17	$	–	$	(72	)	$	5,138	$	5,246	$	12	$	–	$	(132	)	$	5,126
Mortgage-backed securities
Residential
Agency		38,787		101		–		(312	)		38,576		37,706		85		–		(529	)		37,262
Non-agency non-prime (d)		1		–		–		–			1		1		–		–		–			1
Asset-backed securities
Collateralized debt obligations/Collateralized loan obligations		–		3		–		–			3		–		5		–		–			5
Other		7		2		–		–			9		8		3		–		–			11
Obligations of state and political subdivisions		6		1		–		–			7		6		1		–		–			7
Obligations of foreign governments		9		–		–		–			9		9		–		–		–			9
Other debt securities		15		–		–		–			15		15		–		–		(1	)		14
Total held-to-maturity	$	44,018	$	124	$	–	$	(384	)	$	43,758	$	42,991	$	106	$	–	$	(662	)	$	42,435

(a) Held-to-maturity investment securities are carried at historical cost or at fair value at the time of transfer from the available-for-sale to held-to-maturity category, adjusted for amortization of premiums and accretion of discounts and credit-related other-than-temporary impairment.

(b) Available-for-sale investment securities are carried at fair value with unrealized net gains or losses reported within accumulated other comprehensive income (loss) in shareholders’ equity.

(c) Prime securities are those designated as such by the issuer at origination. When an issuer designation is unavailable, the Company determines at acquisition date the categorization based on asset pool characteristics (such as weighted-average credit score, loan-to-value, loan type, prevalence of low documentation loans) and deal performance (such as pool delinquencies and security market spreads). When the Company determines the designation, prime securities typically have a weighted-average credit score of 725 or higher and a loan-to-value of 80 percent or lower; however, other pool characteristics may result in designations that deviate from these credit score and loan-to-value thresholds.

(d) Includes all securities not meeting the conditions to be designated as prime.

(e) Represents impairment not related to credit for those investment securities that have been determined to be other-than-temporarily impaired.

(f) Represents unrealized losses on investment securities that have not been determined to be other-than-temporarily impaired.

Amount of Interest Income from Taxable and Non-Taxable Investment Securities

The following table provides information about the amount of interest income from taxable and non-taxable investment securities:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in Millions)	2017		2016		2017		2016
Taxable	$	523	$	467	$	1,513	$	1,403
Non-taxable		45		48		140		152
Total interest income from investment securities	$	568	$	515	$	1,653	$	1,555

Amount of Gross Gains and Losses Realized through Sales of Available-for-Sale Investment Securities

The following table provides information about the amount of gross gains and losses realized through the sales of available-for-sale investment securities:
	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in Millions)	2017		2016		2017			2016
Realized gains	$	9	$	12	$	65		$	31
Realized losses		–		–		(18	)		(12	)
Net realized gains (losses)	$	9	$	12	$	47		$	19
Income tax (benefit) on net realized gains (losses)	$	3	$	4	$	18		$	7

Gross Unrealized Losses and Fair Value of Company's Investment Securities

The following table shows the gross unrealized losses and fair value of the Company’s investment securities with unrealized losses, aggregated by investment category and length of time the individual investment securities have been in continuous unrealized loss positions, at September 30, 2017:

	Less Than 12 Months					12 Months or Greater					Total
(Dollars in Millions)	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Held-to-maturity
U.S. Treasury and agencies	$	2,886	$	(62	)	$	241	$	(10	)	$	3,127	$	(72	)
Residential agency mortgage-backed securities		19,913		(237	)		3,989		(75	)		23,902		(312	)
Other asset-backed securities		–		–			5		–			5		–
Other debt securities		15		–			–		–			15		–
Total held-to-maturity	$	22,814	$	(299	)	$	4,235	$	(85	)	$	27,049	$	(384	)
Available-for-sale
U.S. Treasury and agencies	$	15,241	$	(98	)	$	1,389	$	(22	)	$	16,630	$	(120	)
Residential agency mortgage-backed securities		19,025		(281	)		7,914		(107	)		26,939		(388	)
Commercial agency mortgage-backed securities		6		–			–		–			6		–
Obligations of state and political subdivisions		1,857		(35	)		627		(53	)		2,484		(88	)
Other investments		1		–			–		–			1		–
Total available-for-sale	$	36,130	$	(414	)	$	9,930	$	(182	)	$	46,060	$	(596	)