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Fair Value Measures (Tables)
 9 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
Financial Instruments Carried at Fair Value
The following tables present assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022, and that were included in the Company’s Consolidated Statements of Condition at those dates:

September 30, 2023
(in millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Netting AdjustmentsTotal Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates$— $1,164 $— $— $1,164 
GSE CMOs$— $4,351 $— $— $4,351 
Private Label CMOs$— $142 $32 $— $174 
Total mortgage-related debt securities$— $5,657 $32 $— $5,689 
Other Debt Securities Available for Sale:
U. S. Treasury obligations$195 $— $— $— $195 
GSE debentures$— $1,659 $— $— $1,659 
Asset-backed securities$— $313 $— $— $313 
Municipal bonds$— $6 $— $— $6 
Corporate bonds$— $737 $— $— $737 
Foreign notes$— $33 $— $— $33 
Capital trust notes$— $91 $— $— $91 
Total other debt securities$195 $2,839 $— $— $3,034 
Total debt securities available for sale$195 $8,496 $32 $— $8,723 
Equity securities:
Mutual funds and common stock$— $13 $— $— $13 
Total equity securities$— $13 $— $— $13 
Total securities$195 $8,509 $32 $— $8,736 
Loans held-for-sale
Residential first mortgage loans$— $1,148 $— $— $1,148 
Acquisition, development, and construction$— $168 $— $— $168 
Commercial and industrial loans$— $— $9 $— $— $9 
Derivative assets
Interest rate swaps and swaptions$— $140 $— $— $140 
Futures$— $1 $— $— $1 
Rate lock commitments (fallout-adjusted)$— $— $6 $— $6 
Mortgage-backed securities forwards$— $37 $— $— $37 
Mortgage servicing rights$— $— $1,135 $— $1,135 
Total assets at fair value$195 $10,012 $1,173 $— $11,380 
Derivative liabilities
Mortgage-backed securities forwards$— $16 $— $— $16 
Interest rate swaps and swaptions$— $79 $— $— $79 
Rate lock commitments (fallout-adjusted)$— $— $12 $— $12 
Total liabilities at fair value$— $95 $12 $— $107 
December 31, 2022
(in millions)Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other Observable Inputs
(Level 2)		Significant Unobservable Inputs
(Level 3)		Netting AdjustmentsTotal Fair Value
Assets:
Mortgage-related Debt Securities Available for Sale:
GSE certificates$— $1,297 $— $— $1,297 
GSE CMOs—3,301——3,301
Private Label CMOs—191——191
Total mortgage-related debt securities$— $4,789 $— $— $4,789 
Other Debt Securities Available for Sale:
U. S. Treasury obligations$1,487 $— $— $— $1,487 
GSE debentures—1,398——1,398
Asset-backed securities—361——361
Municipal bonds—30——30
Corporate bonds—885——885
Foreign notes—20——20
Capital trust notes—90——90
Total other debt securities$1,487 $2,784 $— $— $4,271 
Total debt securities available for sale$1,487 $7,573 $— $— $9,060 
Equity securities:
Mutual funds and common stock—14——14
Total equity securities—14——14
Total securities$1,487 $7,587 $— $— $9,074 
Loans held-for-sale
Residential first mortgage loans$— $1,115 $— $— $1,115 
Derivative assets
Interest rate swaps and swaptions— 182 — — 182 
Futures— 2 — — 2 
Rate lock commitments (fallout-adjusted)— — 9 — 9 
Mortgage-backed securities forwards— 36 — — 36 
Mortgage servicing rights— — 1,033 — 1,033 
Total assets at fair value$1,487 $8,922 $1,042 $— $11,451 
Derivative liabilities
Mortgage-backed securities forwards— 61 — — 61 
Interest rate swaps and swaptions— 65 — — 65 
Rate lock commitments (fallout-adjusted)— — 10 — 10 
Total liabilities at fair value$— $126 $10 $— $136 
Roll Forward of Financial Instruments
The following tables include a roll forward of the Consolidated Statements of Condition amounts (including the change in fair value) for financial instruments classified by us within Level 3 of the valuation hierarchy:

(dollars in millions)Balance at Beginning of YearTotal Gains / (Losses) Recorded in Earnings (1)Purchases / OriginationsSalesSettlementTransfers In (Out)Balance at End of Year
Three Months Ended September 30, 2023
Assets
Mortgage servicing rights (1)
$1,031 $37 $67 $— — — $1,135 
Private Label CMOs
— — — — — 32 32 
Rate lock commitments (net) (1)(2)
— (42)30 — — 6 (6)
Totals$1,031 $(5)$97 $— $— $38 $1,161 
Nine Months Ended September 30, 2023
Assets
Mortgage servicing rights (1)
$1,033 $5 $148 $(51)— — $1,135 
Private Label CMOs
— — — — — 32 32 
Rate lock commitments (net) (1)(2)
(1)(70)90 — — (25)(6)
Totals$1,032 $(65)$238 $(51)$— $7 $1,161 
(1)We utilized swaptions, futures, forward agency and loan sales and interest rate swaps to manage the risk associated with mortgage servicing rights and rate lock commitments. Gains and losses for individual lines do not reflect the effect of our risk management activities related to such Level 3 instruments.
(2)Rate lock commitments are reported on a fallout-adjusted basis. Transfers out of Level 3 represent the settlement value of the commitments that are transferred to LHFS, which are classified as Level 2 assets.
Quantitative Information about Recurring Level 3 Fair Value Financial Instruments
The following tables present the quantitative information about recurring Level 3 fair value financial instruments and the fair value measurements as of September 30, 2023:

Fair ValueValuation Technique
Unobservable Input (1)
Range
(Weighted Average)
(dollars in millions)
Assets
Mortgage servicing rights
$1,135 Discounted cash flowsOption adjusted spread
5.2% - 21.7% 5.6%
Constant prepayment rate
—% - 10.0% 7.3%
Weighted average cost to service per loan
$65 - $90 $69
Private Label CMOs
$32 Discounted cash flowsConstant default rates
0.10% - 0.30%
Weighted average life
8.2 - 11.9
Rate lock commitments (net)$(6)Consensus pricingOrigination pull-through rate71.10%
(1)Unobservable inputs were weighted by their relative fair value of the instruments.
Assets Measured at Fair Value on a Nonrecurring Basis The following tables present assets that were measured at fair value on a non-recurring basis as of September 30, 2023 and December 31, 2022, and that were included in the Company’s Consolidated Statements of Condition at those dates:
Fair Value Measurements at September 30, 2023 Using
(in millions)Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total Fair Value
Certain impaired loans (2)$162 $162 
Other assets(1)
$46 $46 
Total$— $— $208 $208 
(1)Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity securities without readily determinable fair values. These equity securities are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
(2)Represents the fair value of impaired loans, based on the value of the collateral.

Fair Value Measurements at December 31, 2022 Using
(in millions)Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)Total Fair Value
Certain impaired loans (2)
$— $— $28 $28 
Other assets (1)
— — 41 41 
Total$— $— $69 $69 
(1)Represents the fair value of repossessed assets, based on the appraised value of the collateral subsequent to its initial classification as repossessed assets and equity securities without readily determinable fair values. These equity securities are classified as Level 3 due to the infrequency of the observable prices and/or the restrictions on the shares.
(2)Represents the fair value of impaired loans, based on the value of the collateral.
Carrying Amount and Estimated Fair Value of Financial Instruments
The following tables summarize the carrying values, estimated fair values, and fair value measurement levels of financial instruments that were not carried at fair value on the Company’s Consolidated Statements of Condition at September 30, 2023 and December 31, 2022:

September 30, 2023
Fair Value Measurement Using
(in millions)Carrying ValueEstimated Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents$6,929 $6,929 $6,929 $— $— 
FHLB and FRB stock (1)
1,110 1,110 — 1,110 — 
Loans and leases held for investment, net83,376 80,331 — — 80,331 
Financial Liabilities:
Deposits$82,675 $82,494 $65,365 
(2)
$17,129 
(3)
$— 
Borrowed funds14,585 14,317 — 14,317 — 
(1)Carrying value and estimated fair value are at cost.
(2)Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.
(3)Certificates of deposit.

December 31, 2022
Fair Value Measurement Using
(in millions)Carrying ValueEstimated Fair ValueQuoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial Assets:
Cash and cash equivalents$2,032 $2,032 $2,032 $— $— 
FHLB and FRB stock (1)
1,2671,267— 1,267— 
Loans and leases held for investment, net68,60865,673— — 65,673
Financial Liabilities:
Deposits$58,721 $58,479 $46,211 
(2)
$12,268 
(3)
$— 
Borrowed funds21,33221,231— 21,231— 
(1)Carrying value and estimated fair value are at cost.
(2)Interest-bearing checking and money market accounts, savings accounts, and non-interest-bearing accounts.
(3)Certificates of deposit.
Changes in Fair Value Included in Earnings - Fair Value Option
The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected:
For the Three Months ended September 30,For the Nine Months Ended September 30,
(dollars in millions)20232023
Assets
Loans held-for-sale$— $— 
Net gain on loan sales$(25)$4 
Differences Between Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance Outstanding - Fair Value Option
The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected:

September 30, 2023
(dollars in millions)Unpaid Principal BalanceFair ValueFair Value Over / (Under) UPB
Assets:
Nonaccrual loans:
Loans held-for-sale$2 $2 $— 
Loans held-for-investment— — — 
Total non-accrual loans$2 $2 $— 
Other performing loans:
Loans held-for-sale$1,310 $1,316 $6 
Total other performing loans$1,310 $1,316 $6 
Total loans:
Loans held-for-sale$1,312 $1,318 $6 
Total loans$1,312 $1,318 $6 

December 31, 2022
(dollars in millions)Unpaid Principal BalanceFair ValueFair Value Over / (Under) UPB
Assets:
Other performing loans:
Loans held-for-sale1,0951,11520
Total other performing loans$1,095 $1,115 $20 
Total loans:
Loans held-for-sale1,0951,11520
Total loans$1,095 $1,115 $20