Annual report pursuant to Section 13 and 15(d)

Fair Value Option (Tables)

v3.10.0.1
Fair Value Option (Tables)
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Schedule of Fair Value Option Elections The table below provides information about the fair value carrying amount and the contractual principal outstanding of assets and liabilities accounted for under the fair value option at December 31, 2018 and 2017.
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Option Elections
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
December 31, 2017
(Dollars in millions)
Fair Value Carrying Amount
 
Contractual Principal Outstanding
 
Fair Value Carrying Amount Less Unpaid Principal
 
Fair Value Carrying Amount
 
Contractual Principal Outstanding
 
Fair Value Carrying Amount Less Unpaid Principal
Federal funds sold and securities borrowed or purchased under agreements to resell
$
56,399

 
$
56,376

 
$
23

 
$
52,906

 
$
52,907

 
$
(1
)
Loans reported as trading account assets (1)
6,195

 
13,088

 
(6,893
)
 
5,735

 
11,804

 
(6,069
)
Trading inventory – other
13,778

 
n/a

 
n/a

 
12,027

 
n/a

 
n/a

Consumer and commercial loans
4,349

 
4,399

 
(50
)
 
5,710

 
5,744

 
(34
)
Loans held-for-sale (1)
2,942

 
4,749

 
(1,807
)
 
2,156

 
3,717

 
(1,561
)
Other assets
3

 
n/a

 
n/a

 
3

 
n/a

 
n/a

Long-term deposits
492

 
454

 
38

 
449

 
421

 
28

Federal funds purchased and securities loaned or sold under agreements to repurchase
28,875

 
28,881

 
(6
)
 
36,182

 
36,187

 
(5
)
Short-term borrowings
1,648

 
1,648

 

 
1,494

 
1,494

 

Unfunded loan commitments
169

 
n/a

 
n/a

 
120

 
n/a

 
n/a

Long-term debt (2)
27,637

 
29,147

 
(1,510
)
 
31,786

 
31,512

 
274


(1) 
A significant portion of the loans reported as trading account assets and LHFS are distressed loans that were purchased at a deep discount to par, and the remainder are loans with a fair value near contractual principal outstanding.
(2) 
Includes structured liabilities with a fair value of $27.3 billion and $31.4 billion, and contractual principal outstanding of $28.8 billion and $31.1 billion at December 31, 2018 and 2017.
n/a = not applicable
The following tables provide information about where changes in the fair value of assets and liabilities accounted for under the fair value option are included in the Consolidated Statement of Income for 2018, 2017 and 2016.
 
 
 
 
 
 
Gains (Losses) Relating to Assets and Liabilities Accounted for Under the Fair Value Option
 
 
 
 
 
 
 
Trading Account Profits
 
Other
Income
 
Total
(Dollars in millions)
2018
Loans reported as trading account assets (1)
$
8

 
$

 
$
8

Trading inventory – other (2)
1,750

 

 
1,750

Consumer and commercial loans (1)
(422
)
 
(53
)
 
(475
)
Loans held-for-sale (1, 3)
1

 
24

 
25

Unfunded loan commitments

 
(49
)
 
(49
)
Long-term debt (4, 5)
2,157

 
(93
)
 
2,064

Other (6)
8

 
18

 
26

Total
$
3,502


$
(153
)

$
3,349

 
 
 
 
 
 
 
2017
Loans reported as trading account assets (1)
$
318

 
$

 
$
318

Trading inventory – other (2)
3,821

 

 
3,821

Consumer and commercial loans (1)
(9
)
 
35

 
26

Loans held-for-sale (1, 3)

 
298

 
298

Unfunded loan commitments

 
36

 
36

Long-term debt (4, 5)
(1,044
)
 
(146
)
 
(1,190
)
Other (6)
(93
)
 
13

 
(80
)
Total
$
2,993

 
$
236

 
$
3,229

 
 
 
 
 
 
 
2016
Loans reported as trading account assets (1)
$
301

 
$

 
$
301

Trading inventory – other (2)
57

 

 
57

Consumer and commercial loans (1)
49

 
(37
)
 
12

Loans held-for-sale (1, 3)
11

 
524

 
535

Unfunded loan commitments

 
487

 
487

Long-term debt (4, 5)
(489
)
 
(97
)
 
(586
)
Other (6)
(85
)
 
53

 
(32
)
Total
$
(156
)
 
$
930

 
$
774


(1) Gains (losses) related to borrower-specific credit risk were not significant.
(2) 
The gains in trading account profits are primarily offset by losses on trading liabilities that hedge these assets.
(3) 
Includes the value of IRLCs on funded loans, including those sold during the period.
(4) 
The majority of the net gains (losses) in trading account profits relate to the embedded derivatives in structured liabilities and are offset by gains (losses) on derivatives and securities that hedge these liabilities.
(5) 
For the cumulative impact of changes in the Corporation’s own credit spreads and the amount recognized in accumulated OCI, see . For more information on how the Corporation’s own credit spread is determined, see .
(6) 
Includes gains (losses) on federal funds sold and securities borrowed or purchased under agreements to resell, other assets, long-term deposits, federal funds purchased and securities loaned or sold under agreements to repurchase and short-term borrowings.