Annual report pursuant to Section 13 and 15(d)

Fair Value Option (Tables)

v2.4.1.9
Fair Value Option (Tables)
 12 Months Ended
Dec. 31, 2014
Fair Value Option [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, 2014 and 2013.
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value Option Elections
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31
 
2014
 
2013
(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
Loans reported as trading account assets (1)
$
4,607

 
$
8,487

 
$
(3,880
)
 
$
2,406

 
$
4,541

 
$
(2,135
)
Trading inventory – other
6,865

 
n/a

 
n/a

 
5,475

 
n/a

 
n/a

Consumer and commercial loans
8,681

 
8,925

 
(244
)
 
10,042

 
10,423

 
(381
)
Loans held-for-sale
6,801

 
6,920

 
(119
)
 
6,656

 
6,996

 
(340
)
Securities financing agreements
97,539

 
97,234

 
305

 
95,156

 
94,890

 
266

Other assets
253

 
270

 
(17
)
 
278

 
270

 
8

Long-term deposits
1,469

 
1,361

 
108

 
1,899

 
1,797

 
102

Unfunded loan commitments
405

 
n/a

 
n/a

 
354

 
n/a

 
n/a

Short-term borrowings
2,697

 
2,697

 
—

 
1,520

 
1,520

 
—

Long-term debt (2)
36,404

 
35,815

 
589

 
47,035

 
46,669

 
366


(1) 
A significant portion of the loans reported as trading account assets are distressed loans which trade and 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 $35.3 billion and contractual principal outstanding of $34.6 billion at December 31, 2014 compared to $40.7 billion and $39.7 billion at December 31, 2013.
n/a = not applicable
The table below provides 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 2014, 2013 and 2012.
 
 
 
 
 
 
 
 
Gains (Losses) Relating to Assets and Liabilities Accounted for Under the Fair Value Option
 
 
 
 
 
 
 
 
 
2014
(Dollars in millions)
Trading Account Profits (Losses)
 
Mortgage Banking Income
(Loss)
 
Other
Income
(Loss)
 
Total
Loans reported as trading account assets
$
(87
)
 
$
—

 
$
—

 
$
(87
)
Trading inventory – other (1)
1,091

 
—

 
—

 
1,091

Consumer and commercial loans
(24
)
 
—

 
69

 
45

Loans held-for-sale (2)
(56
)
 
798

 
83

 
825

Securities financing agreements
(110
)
 
—

 
—

 
(110
)
Long-term deposits
23

 
—

 
(26
)
 
(3
)
Unfunded loan commitments
—

 
—

 
(64
)
 
(64
)
Short-term borrowings
52

 
—

 
—

 
52

Long-term debt (3)
239

 
—

 
407

 
646

Total
$
1,128

 
$
798

 
$
469

 
$
2,395

 
 
 
 
 
 
 
 
 
2013
Loans reported as trading account assets
$
83

 
$
—

 
$
—

 
$
83

Trading inventory – other (1)
1,355

 
—

 
—

 
1,355

Consumer and commercial loans
(28
)
 
(38
)
 
240

 
174

Loans held-for-sale (2)
7

 
966

 
75

 
1,048

Securities financing agreements
(80
)
 
—

 
—

 
(80
)
Other assets
—

 
—

 
(77
)
 
(77
)
Long-term deposits
30

 
—

 
84

 
114

Asset-backed secured financings
—

 
(91
)
 
—

 
(91
)
Unfunded loan commitments
—

 
—

 
180

 
180

Short-term borrowings
(70
)
 
—

 
—

 
(70
)
Long-term debt (3)
(602
)
 
—

 
(649
)
 
(1,251
)
Total
$
695

 
$
837

 
$
(147
)
 
$
1,385

 
 
 
 
 
 
 
 
 
2012
Loans reported as trading account assets
$
232

 
$
—

 
$
—

 
$
232

Trading inventory – other (1)
659

 
—

 
—

 
659

Consumer and commercial loans
17

 
—

 
542

 
559

Loans held-for-sale (2)
75

 
3,048

 
190

 
3,313

Securities financing agreements
(90
)
 
—

 
—

 
(90
)
Other assets
—

 
—

 
12

 
12

Long-term deposits
—

 
—

 
29

 
29

Asset-backed secured financings
—

 
(180
)
 
—

 
(180
)
Unfunded loan commitments
—

 
—

 
704

 
704

Short-term borrowings
1

 
—

 
—

 
1

Long-term debt (3)
(1,888
)
 
—

 
(5,107
)
 
(6,995
)
Total
$
(994
)
 
$
2,868

 
$
(3,630
)
 
$
(1,756
)

(1)  
The gains (losses) in trading account profits (losses) are primarily offset by gains (losses) on trading liabilities that hedge these assets.
(2) 
Includes the value of interest rate lock commitments on loans funded, including those sold during the period.
(3) 
The majority of the net gains (losses) in trading account profits (losses) relate to the embedded derivative in structured liabilities and are offset by gains (losses) on derivatives and securities that hedge these liabilities. The net gains (losses) in other income (loss) relate to the impact on structured liabilities of changes in the Corporation’s credit spreads.