Acquisition, Divestiture, and Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Components of Income (Loss) from Discontinued Operations, Net of Taxes for Education Lending Business

The components of “income (loss) from discontinued operations, net of taxes” for the education lending business are as follows:

	Three months ended June 30,					Six months ended June 30,
in millions	2017			2016		2017		2016
Net interest income	$	6		$	7	$	11	$	14
Provision for credit losses	—			—		3		2
Net interest income after provision for credit losses	6			7		8		12
Noninterest income	1			2		3		3
Noninterest expense	(1		)	4		3		9
Income (loss) before income taxes	8			5		8		6
Income taxes	3			2		3		2
Income (loss) from discontinued operations, net of taxes (a)	5			$	3	$	5	$	4

(a) Includes after-tax charges of $7 million and $6 million for the three-month periods ended June 30, 2017, and June 30, 2016, respectively, and $13 million and $12 million for the six-month periods ended June 30, 2017, and June 30, 2016, respectively, determined by applying a matched funds transfer pricing methodology to the liabilities assumed necessary to support the discontinued operations.

Components of Assets of Education Lending Business

The discontinued assets of our education lending business included on the balance sheet are as follows. There were no discontinued liabilities for the periods presented below.

in millions	June 30, 2017		December 31, 2016
Held-to-maturity securities	$	1	$	1
Portfolio loans at fair value	2		3
Loans, net of unearned income (a)	1,434		1,562
Less: Allowance for loan and lease losses	21		24
Net loans	1,415		1,541
Accrued income and other assets	27		28
Total assets	$	1,443	$	1,570

(a) At June 30, 2017, and December 31, 2016, unearned income was less than $1 million.

Quantitative Information about Level 3 Fair Value Measurements

The following table shows the significant unobservable inputs used to measure the fair value of the portfolio loans accounted for at fair value as of June 30, 2017, and December 31, 2016:

June 30, 2017	Fair Value of Level 3 Assets and Liabilities		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Portfolio loans accounted for at fair value	$	2	Market approach	Indicative bids	84.50-104.00%

December 31, 2016	Fair Value of Level 3 Assets and Liabilities		Valuation Technique	Significant Unobservable Input	Range (Weighted-Average)
dollars in millions
Portfolio loans accounted for at fair value	$	3	Market approach	Indicative bids	84.50-104.00%

Principal and Fair Value Amounts for Portfolio Loans at Carrying Value, and Portfolio Loans at Fair Value

The following table shows the principal and fair value amounts for our portfolio loans at carrying value at June 30, 2017, and December 31, 2016. Our policies for determining past due loans, placing loans on nonaccrual, applying payments on nonaccrual loans, and resuming accrual of interest are disclosed in Note 1 (“Summary of Significant Accounting Policies”) under the heading “Nonperforming Loans” beginning on page 108 of our 2016 Form 10-K.

	June 30, 2017			December 31, 2016
in millions	Principal		Fair Value	Principal		Fair Value
Portfolio loans at carrying value
Accruing loans past due 90 days or more	$	17	N/A	$	22	N/A
Loans placed on nonaccrual status	6		N/A	5		N/A

Portfolio Loans at Fair Value and Related Contractual Amounts

The following table shows the portfolio loans at fair value and their related contractual amounts as of June 30, 2017, and December 31, 2016.

	June 30, 2017				December 31, 2016
in millions	Contractual Amount		Fair Value		Contractual Amount		Fair Value
ASSETS
Portfolio loans	$	3	$	2	$	3	$	3

Consolidated Assets at Fair Value on Recurring Basis

The following tables present the assets of the portfolio loans measured at fair value on a recurring basis at June 30, 2017, and December 31, 2016.

June 30, 2017
in millions	Level 1	Level 2	Level 3		Total
ASSETS MEASURED ON A RECURRING BASIS
Portfolio loans	—	—	$	2	$	2
Total assets on a recurring basis at fair value	—	—	$	2	$	2

December 31, 2016
in millions	Level 1	Level 2	Level 3		Total
ASSETS MEASURED ON A RECURRING BASIS
Portfolio loans	—	—	$	3	$	3
Total assets on a recurring basis at fair value	—	—	$	3	$	3

Change in Fair Values of Level 3 Portfolio Loans Held for Sale, Portfolio Loans, and Consolidated Education Loan Securitization Trusts

The following table shows the change in the fair values of the Level 3 portfolio loans held for sale, portfolio loans, and consolidated education loan securitization trusts for the six-month periods ended June 30, 2017, and June 30, 2016.

in millions		Portfolio Student Loans
Balance at December 31, 2016		$	3
Settlements		(1		)
Balance at June 30, 2017	(a)	$	2
Balance at March 31, 2017		$	3
Settlements		(1		)
Balance at June 30, 2017	(a)	$	2
Balance at December 31, 2015		$	4
Settlements		(1		)
Balance at June 30, 2016	(a)	$	3
Balance at March 31, 2016		$	3
Settlements		—
Balance at June 30, 2016	(a)	$	3

(a) There were no purchases, sales, issuances, gains (losses) recognized in earnings, transfers into Level 3, or transfers out of Level 3 for the six-month period ended June 30, 2017. There were no purchases, sales, issuances, gains (losses) recognized in earnings, transfers into Level 3, or transfers out of Level 3 for the three- and six-month periods ended June 30, 2016.

Components of Assets from Discontinued Operations

The discontinued assets of Austin included on the balance sheet are as follows. There were no discontinued liabilities for the periods presented below.

in millions	June 30, 2017		December 31, 2016
Cash and due from banks	$	15	$	15
Total assets	$	15	$	15

Combined Results of Discontinued Operations

The combined results of the discontinued operations are as follows:

	Three months ended June 30,					Six months ended June 30,
in millions	2017			2016		2017		2016
Net interest income	$	6		$	7	$	11	$	14
Provision for credit losses	—			—		3		2
Net interest income after provision for credit losses	6			7		8		12
Noninterest income	1			2		3		3
Noninterest expense	(1		)	4		3		9
Income (loss) before income taxes	8			5		8		6
Income taxes	3			2		3		2
Income (loss) from discontinued operations, net of taxes (a)	5			$	3	$	5	$	4

(a) Includes after-tax charges of $7 million and $6 million for the three-month periods ended June 30, 2017, and June 30, 2016, respectively, and $13 million and $12 million for the six-month periods ended June 30, 2017, and June 30, 2016, respectively, determined by applying a matched funds transfer pricing methodology to the liabilities assumed necessary to support the discontinued operations.

Combined Assets of Discontinued Operations

The combined assets of the discontinued operations are as follows. There were no discontinued liabilities for the periods presented below.

in millions	June 30, 2017		December 31, 2016
Cash and due from banks	$	15	$	15
Held-to-maturity securities	1		1
Portfolio loans at fair value	2		3
Loans, net of unearned income (a)	1,434		1,562
Less: Allowance for loan and lease losses	21		24
Net loans	1,415		1,541
Accrued income and other assets	27		28
Total assets	$	1,458	$	1,585

(a) At June 30, 2017, and December 31, 2016, unearned income was less than $1 million.