NOTE 8—DEPOSITS AND BORROWINGS

Deposits

Our deposits, which are our largest source of funding for our asset and operations, consist of non-interest bearing and interest-bearing deposits, which include checking accounts, money market deposit accounts, negotiable order of withdrawals, savings deposits and time deposits.

Securitized and Unsecured Debt Obligations

In addition to our deposits, which serve as our primary funding source, we use a variety of other funding sources including short-term borrowings, the issuance of senior and subordinated notes and other borrowings, and securitization transactions. In addition, we utilize FHLB advances, which are secured by certain portions of our loan and investment securities portfolios, for our funding needs. The securitized debt obligations are separately presented on our consolidated balance sheets as they represent obligations of consolidated securitization trusts, while federal funds purchased and securities loaned or sold under agreements to repurchase, senior and subordinated notes and other borrowings, including FHLB advances, are included in other debt on our consolidated balance sheets.

Securitized Debt Obligations

Our outstanding borrowings due to securitization investors decreased to $14.9 billion as of March 31, 2016, from $16.2 billion as of December 31, 2015, primarily driven by $1.3 billion of maturities.

Senior and Subordinated Notes

As of March 31, 2016, we had $21.7 billion of senior and subordinated notes outstanding, inclusive of fair value hedging adjustments of $237 million. As of December 31, 2015, we had $21.8 billion of senior and subordinated notes outstanding, inclusive of fair value hedging adjustments of $134 million. During the first quarter of 2016, $500 million of outstanding unsecured notes were retired. See “Note 9—Derivative Instruments and Hedging Activities” for information about our fair value hedging activities.

FHLB Advances and Other

In addition to the issuance capacity under the registration statement, we also have access to funding through the FHLB system and the Federal Reserve Discount Window. Our FHLB and Federal Reserve memberships require us to hold FHLB and Federal Reserve stock which totaled $1.8 billion and $2.1 billion as of March 31, 2016 and December 31, 2015, respectively, and are included in other assets on our consolidated balance sheets.

Our FHLB advances and lines of credit are secured by our investment securities, residential home loans, multifamily real estate loans, commercial real estate loans and HELOCs. The outstanding FHLB advances totaled $12.9 billion and $20.1 billion as of March 31, 2016 and December 31, 2015, respectively, substantially all of which represented long-term advances generally callable on either a one-month or a three-month basis. We did not access the Federal Reserve Discount Window for funding during 2015 or the first quarter of 2016.

Composition of Deposits, Short-Term Borrowings and Long-Term Debt

The table below summarizes the components of our deposits, short-term borrowings and long-term debt as of March 31, 2016 and December 31, 2015. Our total short-term borrowings consist of federal funds purchased and securities loaned or sold under agreements to repurchase and other short-term borrowings with an original contractual maturity of one year or less. Our long-term debt consists of borrowings with an original contractual maturity of greater than one year. The amounts presented for outstanding borrowings include unamortized debt premiums and discounts, net of debt issuance costs and fair value hedge accounting adjustments.

Table 8.1: Components of Deposits, Short-Term Borrowings and Long-Term Debt



(Dollars in millions)	March 31, 2016		December 31, 2015
Deposits:
Non-interest bearing deposits	$	25,182	$	25,847
Interest-bearing deposits	196,597		191,874
Total deposits	$	221,779	$	217,721
Short-term borrowings:
Federal funds purchased and securities loaned or sold under agreements to repurchase	$	917	$	981
Total short-term borrowings	$	917	$	981



	March 31, 2016
(Dollars in millions)	Maturity Dates	Interest Rates	Weighted- Average Interest Rate	Outstanding Amount		December 31, 2015
Long-term debt:
Securitized debt obligations⁽¹⁾	2016 - 2025	0.48 - 5.75%	1.48%	$	14,913	$	16,166
Senior and subordinated notes:⁽¹⁾
Fixed unsecured senior debt	2016 - 2025	1.15 - 6.75	2.72	16,837		16,559
Floating unsecured senior debt	2018 - 2018	1.30 - 1.77	1.50	699		1,198
Total unsecured senior debt			2.67	17,536		17,757
Fixed unsecured subordinated debt	2016 - 2025	3.38 - 8.80	4.70	4,200		4,080
Total senior and subordinated notes				21,736		21,837
Other long-term borrowings:
FHLB advances	2016 - 2025	0.39 - 6.41	0.50	12,898		20,098
Capital lease obligations	2016 - 2035	3.09 - 12.86	4.17	33		33
Total other long-term borrowings				12,931		20,131
Total long-term debt				$	49,580	$	58,134
Total short-term borrowings and long-term debt				$	50,497	$	59,115

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⁽¹⁾	Outstanding amount includes any fair value hedge accounting adjustments.

Components of Interest Expense

The following table displays interest expense attributable to short-term borrowings and long-term debt for the three months ended March 31, 2016 and 2015:

Table 8.2: Components of Interest Expense on Short-Term Borrowings and Long-Term Debt



	Three Months Ended March 31,
(Dollars in millions)	2016		2015
Short-term borrowings:
Federal funds purchased and securities loaned or sold under agreements to repurchase	$	1	$	0
FHLB advances	0		8
Total short-term borrowings	1		8
Long-term debt:
Securitized debt obligations⁽¹⁾	48		33
Senior and subordinated notes⁽¹⁾	106		79
Other long-term borrowings	23		7
Total long-term debt	177		119
Total interest expense on short-term borrowings and long-term debt	$	178	$	127

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⁽¹⁾	Interest expense includes the impact from hedge accounting.