SECURITIES (Tables)

6 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

The following table presents the major components of securities at amortized cost and fair value:



	June 30, 2017									December 31, 2016
(in millions)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Securities Available for Sale
U.S. Treasury and other		$12		$—		$—			$12		$30		$—		$—			$30
State and political subdivisions	7		—		—			7		8		—		—			8
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	19,001		79		(203		)	18,877		19,231		78		(264		)	19,045
Other/non-agency	363		7		(9		)	361		427		2		(28		)	401
Total mortgage-backed securities	19,364		86		(212		)	19,238		19,658		80		(292		)	19,446
Total debt securities available for sale	19,383		86		(212		)	19,257		19,696		80		(292		)	19,484
Marketable equity securities	—		—		—			—		5		—		—			5
Other equity securities	—		—		—			—		12		—		—			12
Total equity securities available for sale	—		—		—			—		17		—		—			17
Total securities available for sale		$19,383		$86		($212	)		$19,257		$19,713		$80		($292	)		$19,501
Securities Held to Maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities		$4,080		$20		($28	)		$4,072		$4,126		$12		($44	)		$4,094
Other/non-agency	887		27		—			914		945		19		—			964
Total securities held to maturity		$4,967		$47		($28	)		$4,986		$5,071		$31		($44	)		$5,058
Other Investment Securities, at Fair Value
Money market mutual fund		$92		$—		$—			$92		$91		$—		$—			$91
Other investments	5		—		—			5		5		—		—			5
Total other investment securities, at fair value		$97		$—		$—			$97		$96		$—		$—			$96
Other Investment Securities, at Cost
Federal Reserve Bank stock		$463		$—		$—			$463		$463		$—		$—			$463
Federal Home Loan Bank stock	324		—		—			324		479		—		—			479
Other equity securities	7		—		—			7		—		—		—			—
Total other investment securities, at cost		$794		$—		$—			$794		$942		$—		$—			$942

Schedule of unrealized loss on investments

The following tables present securities whose fair values are below carrying values, segregated by those that have been in a continuous unrealized loss position for less than twelve months and those that have been in a continuous unrealized loss position for twelve months or longer:



	June 30, 2017
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
State and political subdivisions	—		$—		$—		—		$—		$—		—		$—		$—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	301	13,613		(219		)	24	423		(12		)	325	14,036		(231		)
Other/non-agency	—	—		—			12	154		(9		)	12	154		(9		)
Total mortgage-backed securities	301	13,613		(219		)	36	577		(21		)	337	14,190		(240		)
Total	301		$13,613		($219	)	36		$577		($21	)	337		$14,190		($240	)



	December 31, 2016
	Less than 12 Months						12 Months or Longer						Total
(dollars in millions)	Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses			Number of Issues	Fair Value		Gross Unrealized Losses
State and political subdivisions	1		$8		$—		—		$—		$—		1		$8		$—
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	323	15,387		(292		)	25	461		(16		)	348	15,848		(308		)
Other/non-agency	4	8		—			20	302		(28		)	24	310		(28		)
Total mortgage-backed securities	327	15,395		(292		)	45	763		(44		)	372	16,158		(336		)
Total	328		$15,403		($292	)	45		$763		($44	)	373		$16,166		($336	)

Schedule of credit losses recognized in earnings

The following table presents the cumulative credit-related losses recognized in earnings on debt securities held by the Company:



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2017		2016		2017			2016
Cumulative balance at beginning of period		$75		$66		$75			$66
Credit impairments recognized in earnings on securities that have been previously impaired	4		7		5			8
Reductions due to increases in cash flow expectations on impaired securities⁽¹⁾	—		—		(1		)	(1		)
Cumulative balance at end of period		$79		$73		$79			$73

⁽¹⁾Reported in interest income from investment securities on the Consolidated Statements of Operations.

Schedule of investments classified by maturity date

The amortized cost and fair value of debt securities by contractual maturity are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without incurring penalties.



	June 30, 2017
	Distribution of Maturities
(in millions)	1 Year or Less		1-5 Years		5-10 Years		After 10 Years		Total
Amortized Cost:
Debt securities available for sale
U.S. Treasury and other		$12		$—		$—		$—		$12
State and political subdivisions	—		—		—		7		7
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	1		173		1,109		17,718		19,001
Other/non-agency	—		26		2		335		363
Total debt securities available for sale	13		199		1,111		18,060		19,383
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,080		4,080
Other/non-agency	—		—		—		887		887
Total debt securities held to maturity	—		—		—		4,967		4,967
Total amortized cost of debt securities		$13		$199		$1,111		$23,027		$24,350

Fair Value:
Debt securities available for sale
U.S. Treasury and other		$12		$—		$—		$—		$12
State and political subdivisions	—		—		—		7		7
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	1		173		1,125		17,578		18,877
Other/non-agency	—		27		2		332		361
Total debt securities available for sale	13		200		1,127		17,917		19,257
Debt securities held to maturity
Mortgage-backed securities:
Federal agencies and U.S. government sponsored entities	—		—		—		4,072		4,072
Other/non-agency	—		—		—		914		914
Total debt securities held to maturity	—		—		—		4,986		4,986
Total fair value of debt securities		$13		$200		$1,127		$22,903		$24,243

Schedule of income recognized on investment securities

Realized gains and losses on securities are presented below:



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2017		2016		2017		2016
Gains on sale of debt securities		$3		$4		$7		$13
Losses on sale of debt securities	—		—		—		—
Debt securities gains, net		$3		$4		$7		$13
Equity securities gains		$1		$—		$1		$—

Schedule of financial instruments owned and pledged as collateral

The amortized cost and fair value of securities pledged are presented below:



	June 30, 2017				December 31, 2016
(in millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Pledged against repurchase agreements		$432		$430		$631		$620
Pledged against FHLB borrowed funds	894		921		953		972
Pledged against derivatives, to qualify for fiduciary powers, and to secure public and other deposits as required by law	4,052		4,022		3,575		3,563

- Definition

Tabular disclosure of the realized and unrealized gains and losses reported in the statement of income which have resulted from the sale and holding of marketable securities, respectively, as well as the sale or disposal of cost method investments. Such amounts would include realized gains and losses on the sale or disposal of trading, available-for-sale, and held-to-maturity securities, unrealized gains and losses on trading securities, unrealized gains and losses on available-for-sale and held-to-maturity securities transferred to the trading securities category, realized gains and losses on the sale or disposal of cost method investments, and losses recognized for other than temporary impairments (OTTI) of such investments.

+ References + Details