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Fair Values of Assets and Liabilities (Tables)
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
Valuation Assumption Ranges for MSRs
The following table shows the significant valuation assumption ranges for MSRs at March 31, 2022:
 
     Minimum     Maximum     Weighted-
Average (a)		  
Expected prepayment
     7 %      12 %      9 % 
Option adjusted spread
     5       11       6  
 
(a)
Determined based on the relative fair value of the related mortgage loans serviced.
Valuation Assumption Ranges for Derivative Commitments
The following table shows the significant valuation assumption ranges for the Company’s derivative commitments to purchase and originate mortgage loans at March 31, 2022:
 
     Minimum     Maximum     Weighted-
Average (a)		  
Expected loan close rate
     6 %      100 %      82 % 
Inherent MSR value (basis points per loan)
     38       207       110  
 
(a)
Determined based on the relative fair value of the related mortgage loans.
Balances of Assets and Liabilities Measured at Fair Value on Recurring Basis
 
(Dollars in Millions)   Level 1      Level 2      Level 3      Netting     Total  
March 31, 2022
                                           
Available-for-sale
securities
                                           
U.S. Treasury and agencies
   $ 20,924      $ 5,426      $ –      $ –     $ 26,350  
Mortgage-backed securities
                                           
Residential agency
     –        78,992        –        –       78,992  
Commercial agency
     –        7,963        –        –       7,963  
Asset-backed securities
     –        –        7        –       7  
Obligations of state and political subdivisions
     –        10,273        1        –       10,274  
Other
     –        7        –        –       7  
Total
available-for-sale
     20,924        102,661        8        –       123,593  
Mortgage loans held for sale
     –        2,203        –        –       2,203  
Mortgage servicing rights
     –        –        3,432        –       3,432  
Derivative assets
     5        3,385        910        (2,313 )      1,987  
Other assets
     256        1,589        –        –       1,845  
Total
   $ 21,185      $ 109,838      $ 4,350      $ (2,313 )    $ 133,060  
Derivative liabilities
   $ –      $ 3,127      $ 1,921      $ (2,084 )    $ 2,964  
Short-term borrowings and other liabilities (a)
     215        1,429        –        –       1,644  
Total
   $ 215      $ 4,556      $ 1,921      $ (2,084 )    $ 4,608  
December 31, 2021
                                           
Available-for-sale
securities
                                           
U.S. Treasury and agencies
   $ 30,917      $ 5,692      $ –      $ –     $ 36,609  
Mortgage-backed securities
                                           
Residential agenc
y
     –        77,079        –        –       77,079  
Commercial agency
     –        8,485        –        –       8,485  
Asset-backed securities
     –        59        7        –       66  
Obligations of state and political subdivisions
     –        10,716        1        –       10,717  
Other
     –        7        –        –       7  
Total
available-for-sale
     30,917        102,038        8        –       132,963  
Mortgage loans held for sale
     –        6,623        –        –       6,623  
Mortgage servicing rights
     –        –        2,953        –       2,953  
Derivative assets
     8        2,490        1,389        (1,609 )      2,278  
Other assets
     278        1,921        –        –       2,199  
Total
   $ 31,203      $ 113,072      $ 4,350      $ (1,609 )    $ 147,016  
Derivative liabilities
   $ –      $ 2,308      $ 590      $ (1,589 )    $ 1,309  
Short-term borrowings and other liabilities (a)
     209        1,837        –        –       2,046  
Total
   $ 209      $ 4,145      $ 590      $ (1,589 )    $ 3,355  
 
Note:
Excluded from the table above are equity investments without readily determinable fair values. The Company has elected to carry these investments at historical cost, adjusted for impairment and any changes resulting from observable price changes for identical or similar investments of the issuer. The aggregate carrying amount of these equity investments was $80 million and $79 million at March 31, 2022 and December 31, 2021, respectively. The Company has not recorded impairments or adjustments for observable price changes on these equity investments during the first three months of 2022 and 2021, or on a cumulative basis.
(a)
Primarily represents the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
Changes in Fair Value for All Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)
The following table presents the changes in fair value for all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31:
 
(Dollars in Millions)
 
Beginning
of Period
Balance
 
 
Net Gains
(Losses)
Included in
Net Income
 
 
Purchases
 
 
Sales
 
 
Issuances
 
 
Settlements
 
 
End
of Period
Balance
 
 
Net Change
in Unrealized
Gains (Losses)
Relating to
Assets and
Liabilities
Held at End
of Period
 
2022
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
      
Available-for-sale
securities
 
      
 
      
 
      
 
      
 
      
 
      
 
      
 
      
Asset-backed securities
   $ 7  
 
 $ –     $ –     $ –     $ –     $ –     $ 7     $ –  
Obligations of state and political subdivisions
     1  
 
   –       –       –       –       –       1       –  
Total
available-for-sale
     8  
 
   –       –       –       –       –       8       –  
Mortgage servicing rights
     2,953  
 
   238   (a)      3       1       237  (c)      –       3,432       238   (a) 
Net derivative assets and liabilities
     799  
 
   (1,867 ) (b)      11       (1 )      –     $ 47       (1,011 )      (1,697 ) (d) 
   
 
                  
2021
        
 
                                                      
Available-for-sale
securities
        
 
                                                      
Asset-backed securities
   $ 7  
 
 $ –     $ –     $ –     $ –     $ –     $ 7     $ –  
Obligations of state and political subdivisions
     1  
 
   –       –       –       –       –       1       –  
Total
available-for-sale
     8  
 
   –       –       –       –       –       8       –  
Mortgage servicing rights
     2,210  
 
   242   (a)      16       –       319  (c)      –       2,787       242  (a) 
Net derivative assets and liabilities
     2,326  
 
   (935 ) (e)      2       –       –       (237 )      1,156       (900 ) (f) 
 
(a)
Included in mortgage banking revenue.
(b)
Approximately $(83) million, $(1.8) billion and $(1) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(c)
Represents MSRs capitalized during the period.
(d)
Approximately $(24) million, $(1.7) billion and $(1) million included in mortgage banking revenue, commercial products revenue and other noninterest income, respectively.
(e)
Approximately $60 million included in mortgage banking revenue and $(995) million included in commercial products revenue.
(f)
Approximately $78 million included in mortgage banking revenue and $(978) million included in commercial products revenue.
Adjusted Carrying Values for Assets Measured at Fair Value on Nonrecurring Basis
The following table summarizes the balances as of the measurement date of assets measured at fair value on a nonrecurring basis, and still held as of the reporting date:
 
    March 31, 2022      December 31, 2021  
(Dollars in Millions)   Level 1      Level 2      Level 3      Total      Level 1      Level 2      Level 3      Total  
                 
Loans (a)
   $  –      $ –      $ 28      $ 28      $ –      $ –      $ 59      $ 59  
                 
Other assets (b)
     –        –        3        3        –        –        77        77  
 
(a)
Represents the carrying value of loans for which adjustments were based on the fair value of the collateral, excluding loans fully
charged-off.
(b)
Primarily represents the fair value of foreclosed properties that were measured at fair value based on an appraisal or broker price opinion of the collateral subsequent to their initial acquisition.     
Losses Recognized Related to Nonrecurring Fair Value Measurements of Individual Assets or Portfolios
The following table summarizes losses recognized related to nonrecurring fair value measurements of individual assets or portfolios for the three months ended March 31:
 
(Dollars in Millions)       2022          2021  
     
Loans (a)
   $ 11      $ 31  
     
Other assets (b)
     1        1  
 
(a)
Represents write-downs of loans which were based on the fair value of the collateral, excluding loans fully
charged-off.
(b)
Primarily represents related losses of foreclosed properties that were measured at fair value subsequent to their initial acquisition.
Differences Between Aggregate Fair Value Carrying Amount of MLHFS for which Fair Value Option has been Elected and Aggregate Unpaid Principal Amount Contractually Obligated to Receive at Maturity
The following table summarizes the differences between the aggregate fair value carrying amount of MLHFS for which the fair value option has been elected and the aggregate unpaid principal amount that the Company is contractually obligated to receive at maturity:
 
 
 
March 31, 2022
 
  
  
 
  
December 31, 2021
 
(Dollars in Millions)
 
Fair
Value
Carrying
Amount
 
  
Aggregate
Unpaid
Principal
 
  
Carrying
Amount Over
(Under) Unpaid
Principal
 
  
  
 
  
Fair
Value
Carrying
Amount
 
  
Aggregate
Unpaid
Principal
 
  
Carrying
Amount Over
(Under) Unpaid
Principal
 
Total loans
   $ 2,203      $ 2,200      $ 3         
 
    $ 6,623      $ 6,453      $ 170  
Nonaccrual loans
     1        1        –                 1        1        –  
Loans 90 days or more past due
     2        2        –                 2        2        –  
Estimated Fair Values of Financial Instruments
The following section summarizes the estimated fair value for financial instruments accounted for at amortized cost as of March 31, 2022 and December 31, 2021. In accordance with disclosure guidance related to fair values of financial instruments, the Company did not include assets and liabilities that are not financial instruments, such as the value of goodwill, long-term relationships with deposit, credit card, merchant processing and trust customers, other purchased intangibles, premises and equipment, deferred taxes and other liabilities. Additionally, in accordance with the disclosure guidance, receivables and payables due in one year or less, insurance contracts, equity investments not accounted for at fair value, and deposits with no defined or contractual maturities are excluded.
The estimated fair values of the Company’s financial instruments are shown in the table below:
 
 
 
March 31, 2022
 
  
December 31, 2021
 
 
 
Carrying
Amount
 
 
  
 
  
Fair Value
 
 
  
 
  
Carrying
Amount
 
 
  
 
  
Fair Value
 
(Dollars in Millions)
 
  
 
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
 
  
 
 
  
 
  
Level 1
 
  
Level 2
 
  
Level 3
 
  
Total
 
Financial Assets
                                                                                                                 
Cash and due from banks
   $ 44,303              $ 44,303      $ –      $ –      $ 44,303              $ 28,905              $ 28,905      $ –      $ –      $ 28,905  
Federal funds sold and securities purchased under resale agreements
     513                –        513        –        513                359                –        359        –        359  
Investment securities
held-to-maturity
     43,654                –        40,572        –        40,572                41,858                –        41,812        –        41,812  
Loans held for sale (a)
     1,118                –        –        1,118        1,118                1,152                –        –        1,152        1,152  
Loans
     313,270                –        –        311,120        311,120                306,304                –        –        312,724        312,724  
Other (b)
     1,941                –        1,129        812        1,941                1,521                –        630        891        1,521  
Financial Liabilities
                                                                                                                 
Time deposits
     24,304                –        23,952        –        23,952                22,665                –        22,644        –        22,644  
Short-term borrowings (c)
     19,398                –        19,140        –        19,140                9,750                –        9,646        –        9,646  
Long-term debt
     32,931                –        32,228        –        32,228                32,125                –        32,547        –        32,547  
Other (d)
     3,797                –        1,151        2,646        3,797                3,862                –        1,170        2,692        3,862  

(a)
Excludes mortgages held for sale for which the fair value option under applicable accounting guidance was elected.
(b)
Includes investments in Federal Reserve Bank and Federal Home Loan Bank stock and
tax-advantaged
investments.
(c)
Excludes the Company’s obligation on securities sold short required to be accounted for at fair value per applicable accounting guidance.
(d)
Includes operating lease liabilities and liabilities related to
tax-advantaged
investments.