NOTE 9—DEPOSITS AND BORROWINGS

Deposits

Our deposits, which are our largest source of funding for our assets 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.

We had $211.3 billion and $191.9 billion in interest-bearing deposits as of December 31, 2016 and 2015, respectively. Time deposits issued by domestic offices totaled $19.8 billion and $12.2 billion as of December 31, 2016 and 2015, respectively. Of these deposits, the amount of domestic time deposits with a denomination of $100,000 or more was $2.9 billion and $1.9 billion as of December 31, 2016 and 2015, respectively. Deposits issued by foreign offices totaled $480 million and $843 million as of December 31, 2016 and 2015, respectively.

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 increased to $18.8 billion as of December 31, 2016, from $16.2 billion as of December 31, 2015. During 2016, approximately $6.3 billion of new debt was issued to third-party investors from our credit card loan securitization trust offset by $3.5 billion of maturities and paydowns.

Senior and Subordinated Notes

As of December 31, 2016, we had $23.4 billion of senior and subordinated notes outstanding, inclusive of fair value hedging adjustments of $280 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 2016, we issued $4.4 billion of long-term senior and subordinated debt comprised of $655 million of floating-rate notes and $3.8 billion of fixed-rate notes. During 2016, $2.7 billion of senior and subordinated notes were matured or redeemed. See “Note 10—Derivative Instruments and Hedging Activities” for information about our fair value hedging activities.

FHLB Advances and Other

We 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 $1.9 billion and $2.1 billion as of December 31, 2016 and 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. Outstanding FHLB advances totaled $17.2 billion and $20.1 billion as of December 31, 2016 and 2015, respectively, substantially all of which represented long-term advances generally callable on either a one-month or a three-month basis.

We have access to short-term borrowings through the Federal Reserve. Our membership with the Federal Reserve is secured by our investment in Federal Reserve stock, totaling $1.2 billion as of both December 31, 2016 and 2015. On an annual basis, we process immaterial overnight test trades to ensure continued system functionality and borrowing capabilities. We did not access the Federal Reserve Discount Window for funding during 2016 or 2015.

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 December 31, 2016 and 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 9.1: Components of Deposits, Short-Term Borrowings and Long-Term Debt



(Dollars in millions)	December 31, 2016		December 31, 2015
Deposits:
Non-interest-bearing deposits	$	25,502	$	25,847
Interest-bearing deposits	211,266		191,874
Total deposits	$	236,768	$	217,721
Short-term borrowings:
Federal funds purchased and securities loaned or sold under agreements to repurchase	$	992	$	981
Total short-term borrowings	$	992	$	981



	December 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⁾	2017 - 2025	0.74 - 5.75%	1.61%	$	18,826	$	16,166
Senior and subordinated notes:⁽¹⁾
Fixed unsecured senior debt	2017 - 2025	1.20 - 6.75	2.65	17,546		16,559
Floating unsecured senior debt	2018 - 2019	1.56 - 2.06	1.73	1,353		1,198
Total unsecured senior debt			2.58	18,899		17,757
Fixed unsecured subordinated debt	2019 - 2026	3.38 - 8.80	4.09	4,532		4,080
Total senior and subordinated notes				23,431		21,837
Other long-term borrowings:
FHLB advances	2017 - 2025	0.45 - 6.41	0.64	17,179		20,098
Capital lease obligations	2017 - 2035	3.09 - 12.86	4.17	32		33
Total other long-term borrowings				17,211		20,131
Total long-term debt				$	59,468	$	58,134
Total short-term borrowings and long-term debt				$	60,460	$	59,115

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

Interest-bearing time deposits, securitized debt obligations and other debt as of December 31, 2016 mature as follows:

Table 9.2: Maturity Profile of Borrowings and Debt



(Dollars in millions)	2017		2018		2019		2020		2021		Thereafter		Total
Interest-bearing time deposits⁽¹⁾	$	6,543	$	5,095	$	2,740	$	3,268	$	1,928	$	250	$	19,824
Securitized debt obligations	7,233		2,366		5,637		1,562		1,698		330		18,826
Federal funds purchased and securities loaned or sold sold under agreements to repurchase	992		0		0		0		0		0		992
Senior and subordinated notes	2,814		4,684		5,701		0		3,474		6,758		23,431
Other borrowings	19		10		1,252		1,001		5,651		9,278		17,211
Total	$	17,601	$	12,155	$	15,330	$	5,831	$	12,751	$	16,616	$	80,284

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⁽¹⁾	Includes only those interest bearing deposits which have a contractual maturity date.

Components of Interest Expense

The following table displays interest expense attributable to short-term borrowings and long-term debt for the years ended December 31, 2016, 2015 and 2014:

Table 9.3: Components of Interest Expense on Short-Term Borrowings and Long-Term Debt



	Year Ended December 31,
(Dollars in millions)	2016		2015		2014
Short-term borrowings:
Federal funds purchased and securities loaned or sold under agreements to repurchase	$	2	$	1	$	2
FHLB advances	0		9		19
Total short-term borrowings	2		10		21
Long-term debt:
Securitized debt obligations⁽¹⁾	216		151		145
Senior and subordinated notes⁽¹⁾	476		330		299
Other long-term borrowings	111		43		26
Total long-term debt	803		524		470
Total interest expense on short-term borrowings and long-term debt	$	805	$	534	$	491

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