Quarterly report pursuant to Section 13 or 15(d)

Fair Value Option (Tables)

v2.4.1.9
Fair Value Option (Tables)
3 Months Ended
Mar. 31, 2015
Fair Value Option [Abstract]  
Schedule of Fair Value Option Elections
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 the three months ended March 31, 2015 and 2014. Of the changes in fair value for LHFS, consumer and commercial loans, and loans reported as trading account assets, gains of $39 million, losses of $28 million and gains of $8 million were attributable to changes in borrower-specific credit risk for the three months ended March 31, 2015, respectively, compared to gains of $27 million, gains of $36 million and $0 for the same period in 2014.

Gains (Losses) Relating to Assets and Liabilities Accounted for Under the Fair Value Option
 
Three Months Ended March 31, 2015
(Dollars in millions)
Trading
Account
Profits
(Losses)
 
Mortgage
Banking
Income
(Loss)
 
Other
Income
(Loss)
 
Total
Federal funds sold and securities borrowed or purchased under agreements to resell
$
(64
)
 
$

 
$

 
$
(64
)
Loans reported as trading account assets
(101
)
 

 

 
(101
)
Trading inventory – other (1)
(14
)
 

 

 
(14
)
Consumer and commercial loans
35

 

 
(83
)
 
(48
)
Loans held-for-sale (2)
(47
)
 
192

 
63

 
208

Other assets

 

 
8

 
8

Long-term deposits
(4
)
 

 
(5
)
 
(9
)
Federal funds purchased and securities loaned or sold under agreements to repurchase
54

 

 

 
54

Unfunded loan commitments

 

 
118

 
118

Short-term borrowings
(1
)
 

 

 
(1
)
Long-term debt (3)
253

 

 
65

 
318

Total
$
111

 
$
192

 
$
166

 
$
469

 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2014
Federal funds sold and securities borrowed or purchased under agreements to resell
$
(20
)
 
$

 
$

 
$
(20
)
Loans reported as trading account assets
34

 

 

 
34

Trading inventory – other (1)
(168
)
 

 

 
(168
)
Consumer and commercial loans
5

 

 
52

 
57

Loans held-for-sale (2)
(1
)
 
155

 
40

 
194

Other assets

 

 
(2
)
 
(2
)
Long-term deposits
13

 

 
(9
)
 
4

Federal funds purchased and securities loaned or sold under agreements to repurchase
(2
)
 

 

 
(2
)
Unfunded loan commitments

 

 
9

 
9

Short-term borrowings
36

 

 

 
36

Long-term debt (3)
(368
)
 

 
197

 
(171
)
Total
$
(471
)
 
$
155

 
$
287

 
$
(29
)
(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.
 
 
 
 
 
 
 
 
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 March 31, 2015 and December 31, 2014.

Fair Value Option Elections
 
March 31, 2015
 
December 31, 2014
(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
$
60,451

 
$
60,142

 
$
309

 
$
62,182

 
$
61,902

 
$
280

Loans reported as trading account assets (1)
4,190

 
8,028

 
(3,838
)
 
4,607

 
8,487

 
(3,880
)
Trading inventory – other
6,869

 
n/a

 
n/a

 
6,865

 
n/a

 
n/a

Consumer and commercial loans
8,466

 
8,605

 
(139
)
 
8,681

 
8,925

 
(244
)
Loans held-for-sale
7,690

 
8,027

 
(337
)
 
6,801

 
6,920

 
(119
)
Other assets
256

 
270

 
(14
)
 
253

 
270

 
(17
)
Long-term deposits
1,275

 
1,154

 
121

 
1,469

 
1,361

 
108

Federal funds purchased and securities loaned or sold under agreements to repurchase
27,129

 
27,503

 
(374
)
 
35,357

 
35,332

 
25

Unfunded loan commitments
329

 
n/a

 
n/a

 
405

 
n/a

 
n/a

Short-term borrowings
2,893

 
2,893

 

 
2,697

 
2,697

 

Long-term debt (2)
32,875

 
32,224

 
651

 
36,404

 
35,815

 
589

(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 $31.8 billion and contractual principal outstanding of $31.0 billion at March 31, 2015 compared to $35.3 billion and $34.6 billion at December 31, 2014.
n/a = not applicable