Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | E TRADE FINANCIAL CORP | |
Entity Central Index Key | 1,015,780 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 263,909,776 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Interest income | $ 468 | $ 341 |
Interest expense | (23) | (22) |
Net interest income | 445 | 319 |
Commissions | 137 | 127 |
Fees and service charges | 105 | 86 |
Gains on securities and other, net | 10 | 10 |
Other revenue | 11 | 11 |
Total non-interest income | 263 | 234 |
Total net revenue | 708 | 553 |
Provision (benefit) for loan losses | (21) | (14) |
Non-interest expense: | ||
Compensation and benefits | 152 | 136 |
Advertising and market development | 60 | 43 |
Clearing and servicing | 36 | 32 |
Professional services | 22 | 22 |
Occupancy and equipment | 30 | 27 |
Communications | 31 | 25 |
Depreciation and amortization | 22 | 20 |
FDIC insurance premiums | 9 | 8 |
Amortization of other intangibles | 10 | 9 |
Restructuring and acquisition-related activities | 0 | 4 |
Other non-interest expenses | 23 | 16 |
Total non-interest expense | 395 | 342 |
Income before income tax expense | 334 | 225 |
Income tax expense | 87 | 80 |
Net income | 247 | 145 |
Preferred stock dividends | 12 | 13 |
Net income available to common shareholders | $ 235 | $ 132 |
Basic earnings per common share (in dollars per share) | $ 0.88 | $ 0.48 |
Diluted earnings per common share (in dollars per share) | $ 0.88 | $ 0.48 |
Shares used in computation of per common share data: | ||
Basic (in thousands) | 266,558 | 274,876 |
Diluted (in thousands) | 267,699 | 276,277 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 247 | $ 145 | |
Available-for-sale securities: | |||
Unrealized gains (losses), net | (128) | 46 | |
Reclassification into earnings, net | (7) | (5) | |
Transfer of held-to-maturity securities to available-for-sale securities(1) | 6 | [1] | 0 |
Net change from available-for-sale securities | (129) | 41 | |
Foreign currency translation: | |||
Reclassification of foreign currency translation gains | 0 | (2) | |
Other comprehensive income (loss) | (129) | 39 | |
Comprehensive income | 118 | 184 | |
Held-to-maturity securities, transferred security, at carrying value | 4,672 | 0 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | $ 7 | $ 0 | |
[1] | During the three months ended March 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million, or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and equivalents | $ 498 | $ 931 |
Cash required to be segregated under federal or other regulations | 472 | 872 |
Available-for-sale securities | 24,835 | 20,679 |
Held-to-maturity securities (fair value of $20,224 and $23,719 at March 31, 2018 and December 31, 2017, respectively) | 20,657 | 23,839 |
Margin receivables | 10,515 | 9,071 |
Loans receivable, net (net of allowance for loan losses of $58 and $74 at March 31, 2018 and December 31, 2017, respectively) | 2,506 | 2,654 |
Receivables from brokers, dealers and clearing organizations | 735 | 1,178 |
Property and equipment, net | 251 | 253 |
Goodwill | 2,370 | 2,370 |
Other intangibles, net | 275 | 284 |
Other assets | 1,073 | 1,234 |
Total assets | 64,187 | 63,365 |
Liabilities: | ||
Deposits | 42,902 | 42,742 |
Customer payables | 8,947 | 9,449 |
Payables to brokers, dealers and clearing organizations | 2,892 | 1,542 |
Other borrowings | 910 | 910 |
Corporate debt | 992 | 991 |
Other liabilities | 655 | 800 |
Total liabilities | 57,298 | 56,434 |
Commitments and contingencies (see Note 14) | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, 403,000 shares issued and outstanding at both March 31, 2018 and December 31, 2017; aggregate liquidation preference of $700 at both March 31, 2018 and December 31, 2017 | 689 | 689 |
Common stock, $0.01 par value, 400,000,000 shares authorized, 264,792,847 and 266,827,881 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively | 3 | 3 |
Additional paid-in-capital | 6,434 | 6,582 |
Accumulated deficit | (61) | (317) |
Accumulated other comprehensive loss | (176) | (26) |
Total shareholders’ equity | 6,889 | 6,931 |
Total liabilities and shareholders’ equity | $ 64,187 | $ 63,365 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEET (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Held-to-maturity securities, fair value | $ 20,224 | $ 23,719 |
Allowance for loan losses | $ 58 | $ 74 |
Shareholders’ equity: | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 403,000 | 403,000 |
Preferred stock, shares outstanding (in shares) | 403,000 | 403,000 |
Preferred Stock, Liquidation Preference, Value | $ 700 | $ 700 |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized (in shares) | 400,000,000 | 400,000,000 |
Common stock shares issued (in shares) | 264,792,847 | 266,827,881 |
Common stock shares outstanding (in shares) | 264,792,847 | 266,827,881 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance, at Dec. 31, 2016 | $ 6,272 | $ 394 | $ 3 | $ 6,921 | $ (909) | $ (137) |
Balance, (in shares) at Dec. 31, 2016 | 274 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting adoption | 3 | 3 | ||||
Net income | 145 | 145 | ||||
Other comprehensive income (loss) | 39 | 39 | ||||
Conversion of convertible debentures | 3 | 3 | ||||
Preferred stock dividends | (13) | (13) | ||||
Issuance of common stock for share-based compensation, net of shares withheld to pay taxes | (15) | (15) | ||||
Issuance of common stock for share-based compensation, net of shares withheld to pay taxes, shares | 1 | |||||
Share-based compensation | 10 | 10 | ||||
Balance, at Mar. 31, 2017 | 6,444 | 394 | $ 3 | 6,919 | (774) | (98) |
Balance, (in shares) at Mar. 31, 2017 | 275 | |||||
Balance, at Dec. 31, 2017 | 6,931 | 689 | $ 3 | 6,582 | (317) | (26) |
Balance, (in shares) at Dec. 31, 2017 | 267 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Cumulative effect of accounting adoption | Hedge accounting adoption | 7 | (7) | ||||
Reclassification of tax effects due to federal tax reform | 14 | (14) | ||||
Net income | 247 | 247 | ||||
Other comprehensive income (loss) | (129) | (129) | ||||
Conversion of convertible debentures | 0 | |||||
Preferred stock dividends | (12) | (12) | ||||
Repurchases of common stock | $ (140) | $ (140) | (140) | |||
Repurchases of common stock, shares | (2.7) | (3) | ||||
Issuance of common stock for share-based compensation, net of shares withheld to pay taxes | $ (18) | (18) | ||||
Issuance of common stock for share-based compensation, net of shares withheld to pay taxes, shares | 1 | |||||
Share-based compensation | 10 | 10 | ||||
Balance, at Mar. 31, 2018 | $ 6,889 | $ 689 | $ 3 | $ 6,434 | $ (61) | $ (176) |
Balance, (in shares) at Mar. 31, 2018 | 265 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 247 | $ 145 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (benefit) for loan losses | (21) | (14) |
Depreciation and amortization (including discount amortization and accretion) | 65 | 61 |
Gains on securities and other, net | (10) | (10) |
Share-based compensation | 10 | 10 |
Deferred tax expense | 78 | 81 |
Other | 1 | (4) |
Net effect of changes in assets and liabilities: | ||
Decrease (increase) in receivables from brokers, dealers and clearing organizations | 443 | (354) |
Increase in margin receivables | (1,444) | (175) |
Decrease in other assets | 367 | 13 |
Increase in payables to brokers, dealers and clearing organizations | 1,350 | 305 |
(Decrease) increase in customer payables | (502) | 767 |
Decrease in other liabilities | (38) | (44) |
Net cash provided by operating activities | 546 | 781 |
Cash flows from investing activities: | ||
Purchases of available-for-sale securities | (2,282) | (4,426) |
Proceeds from sales of available-for-sale securities | 797 | 248 |
Proceeds from maturities of and principal payments on available-for-sale securities | 459 | 336 |
Purchases of held-to-maturity securities | (1,109) | (3,963) |
Proceeds from maturities of and principal payments on held-to-maturity securities | 593 | 513 |
Proceeds from sale of loans | 15 | 0 |
Decrease in loans receivable | 163 | 273 |
Capital expenditures for property and equipment | (21) | (23) |
Proceeds from sale of real estate owned and repossessed assets | 9 | 8 |
Net cash flow from derivative contracts | 10 | 42 |
Other | (4) | 2 |
Net cash used in investing activities | (1,370) | (6,990) |
Cash flows from financing activities: | ||
Increase in deposits | 160 | 5,702 |
Preferred stock dividends | (12) | (13) |
Advances from FHLB | 1,550 | 0 |
Payments on advances from FHLB | (1,550) | 0 |
Repurchases of common stock | (140) | 0 |
Other | (17) | (16) |
Net cash (used in) provided by financing activities | (9) | 5,673 |
Decrease in cash, cash equivalents and segregated cash | (833) | (536) |
Cash, cash equivalents and segregated cash, beginning of period | 1,803 | 3,410 |
Cash, cash equivalents and segregated cash, end of period | 970 | 2,874 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||
Cash and equivalents, end of period | 498 | 998 |
Segregated cash, end of period | 472 | 1,876 |
Cash, cash equivalents and segregated cash, end of period | 970 | 2,874 |
Supplemental disclosures: | ||
Cash paid for interest | 30 | 20 |
Cash paid for income taxes, net of refunds | 4 | 1 |
Non-cash investing and financing activities: | ||
Transfers from loans to other real estate owned and repossessed assets | 6 | 6 |
Conversion of convertible debentures to common stock | 0 | 3 |
Transfer of available-for-sale securities to held-to-maturity securities | 1,161 | 0 |
Transfer of held-to-maturity securities to available-for-sale securities | $ 4,672 | $ 0 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization E*TRADE Financial Corporation is a financial services company that provides brokerage and related products and services primarily to individual retail investors under the brand "E*TRADE Financial." The Company also provides investor-focused banking products, primarily sweep deposits, to retail investors. Basis of Presentation The condensed consolidated financial statements, also referred to herein as the consolidated financial statements, include the accounts of the Company and its majority-owned subsidiaries as determined under the voting interest model. Entities in which the Company has the ability to exercise significant influence but in which the Company does not possess control are generally accounted for by the equity method. Entities in which the Company does not have the ability to exercise significant influence are generally carried at cost, or, to the extent that a readily determinable fair value is available, at fair value through net income. The Company also evaluates its initial and continuing involvement with certain entities to determine if the Company is required to consolidate the entities under the variable interest entity (VIE) model. This evaluation is based on a qualitative assessment of whether the Company is the primary beneficiary of the VIE, which requires the Company to possess both: 1) the power to direct the activities that most significantly impact the economic performance of the VIE; and 2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The consolidated financial statements do not include any consolidated VIEs for all periods presented. The Company's consolidated financial statements are prepared in accordance with GAAP. Intercompany accounts and transactions are eliminated in consolidation. These consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Beginning January 1, 2018, the Company updated the presentation of the consolidated financial statements as follows: • On the consolidated balance sheet, deferred tax assets, net has been reclassified to other assets. The prior period has been reclassified to conform to the current period presentation. Deferred tax assets, net were $218 million and $251 million at March 31, 2018 and December 31, 2017, respectively. • On the consolidated balance sheet, publicly traded equity securities are presented within other assets as a result of the adoption of amended accounting guidance. The prior period has not been reclassified as the amended accounting guidance was adopted on a modified retrospective basis. Accordingly, publicly traded equity securities for the prior period are presented within available-for-sale securities. • On the consolidated statement of income, fair value hedging adjustments, previously referred to as hedge ineffectiveness, are included within net interest income as a result of the adoption of new accounting guidance. Prior period amounts have not been reclassified to current period presentation and continue to be reflected within gains on securities and other, net. Fair value hedging adjustments were expenses of $3 million and $1 million for the three months ended March 31, 2018 and March 31, 2017, respectively. Use of Estimates Preparing the Company's consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the periods presented. Actual results could differ from management’s estimates. Certain significant accounting policies are critical because they are based on estimates and assumptions that require complex and subjective judgments by management. Changes in these estimates or assumptions could materially impact the Company’s financial condition and results of operations. Material estimates in which management believes changes could reasonably occur include: allowance for loan losses, valuation of goodwill and acquired intangible assets and estimates of effective tax rates, deferred taxes and valuation allowance. Adoption of New Accounting Standards Revenue from Contracts with Customers In May 2014, the FASB amended the guidance on revenue from contracts with customers. The new standard outlines a single comprehensive model for entities to apply in accounting for revenue arising from contracts with customers. The Company's accounting for net interest income was not impacted by the new standard. The FASB issued supplemental amendments to the new standard to clarify certain guidance and to provide narrow scope improvements and practical expedients during 2016. The amended guidance became effective on January 1, 2018 and the Company adopted the guidance on a modified retrospective basis. This adoption did not have a material impact on the Company’s financial condition, results of operations or cash flows as the satisfaction of performance obligations under the new guidance is materially consistent with the Company's previous revenue recognition policies. Similarly, the amended guidance did not have a material impact on the recognition of costs incurred to obtain new contracts. For additional information on the Company's adoption of the amended guidance, see Note 2—Net Revenue . Classification and Measurement of Financial Instruments In January 2016, the FASB amended the accounting and disclosure guidance on the classification and measurement of financial instruments. Relevant changes in the amended guidance include the requirement that equity investments, excluding those accounted for under the equity method of accounting or those resulting in consolidation of the investee, be measured at fair value in the consolidated balance sheet with changes in fair value recognized in net income. The amended guidance became effective on January 1, 2018, and was applied on a modified retrospective basis. The adoption did not have a material impact on the Company’s financial condition, results of operations or cash flows as debt securities represent the majority of the Company's investment portfolio. Beginning January 1, 2018, publicly traded equity securities are presented within other assets on the consolidated balance sheet. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB amended the guidance on the presentation and classification of certain cash receipts and cash payments in the consolidated statement of cash flows to eliminate current diversity in practice. The new guidance became effective on January 1, 2018, and the retrospective transition method has been applied to each period presented. Among other changes, the Company will classify debt extinguishment costs within cash flows from financing activities. Classification of Restricted Cash In November 2016, the FASB amended the guidance on the presentation and classification of changes in restricted cash in the consolidated statement of cash flows to eliminate current diversity in practice. The amended guidance requires the consolidated statement of cash flows to explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The new guidance became effective on January 1, 2018 and has been applied using a retrospective transition method to each period presented. The Company concluded that cash required to be segregated under federal or other regulations is considered restricted cash and the segregated cash activity is now presented on the consolidated statement of cash flows. Clarifying the Definition of a Business In January 2017, the FASB amended the guidance to clarify the definition of a business in order to assist companies in the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance, which became effective on January 1, 2018, did not change the Company's accounting conclusions for the TCA acquisition and is not expected to impact the Company's accounting conclusions for the acquisition of brokerage accounts from Capital One. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB amended the guidance to update the recognition and presentation of hedging relationships. Among other changes, the new guidance eases hedge documentation requirements and allows additional types of hedge accounting strategies. The Company early adopted this guidance beginning January 1, 2018. The Company applied the guidance on a modified retrospective basis, which resulted in a $7 million cumulative-effect adjustment to increase retained earnings and to decrease accumulated other comprehensive income. In addition, the guidance provided a one-time transition election to transfer certain debt securities from held-to-maturity to available-for-sale. The Company transferred agency mortgage-backed and agency debt securities with a fair value of $4.7 billion , and recognized a net pre-tax gain of $7 million within other comprehensive income. For additional information on the Company's adoption of the amended guidance, see Note 7—Derivative Instruments and Hedging Activities . Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB amended the guidance to address certain income tax effects in accumulated other comprehensive income resulting from the federal tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within accumulated other comprehensive income to retained earnings in the period in which the effect of the tax reform is recorded. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods. Early adoption is permitted. The Company adopted the amended guidance in the first quarter of 2018 and recorded a $14 million increase to retained earnings and a corresponding decrease to accumulated other comprehensive income. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB amended the guidance on the amortization period for certain callable debt securities held at a premium. The amended guidance shortens the amortization period for these securities by requiring the premium to be amortized to the earliest call date. The guidance does not amend the accounting for securities held at a discount. The Company early adopted this guidance beginning January 1, 2018; however, a cumulative-effect adjustment to retained earnings was not required upon adoption as the Company did not hold any callable debt securities at a premium as of January 1, 2018. New Accounting Standards Not Yet Adopted Accounting for Leases In February 2016, the FASB amended the guidance on accounting for leases. The new standard requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all qualifying leases with terms of more than twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee remains substantially unchanged and depends on classification as a finance or operating lease. The new standard also requires quantitative and qualitative disclosures that provide information about the amounts related to leasing arrangements recorded in the consolidated financial statements. The new guidance will be effective for interim and annual periods beginning on January 1, 2019, and is required to be applied on a modified retrospective basis to the earliest period presented, which includes practical expedient options in certain circumstances. The Company is in the process of evaluating the new accounting guidance, which includes the assessment of whether certain executory contracts contain embedded leases. The Company has 30 regional financial centers and 8 corporate locations which are leased. The right of use asset and corresponding lease liability for these leases will be recognized on the Company's balance sheet upon adoption. Accounting for Credit Losses In June 2016, the FASB amended the accounting guidance on accounting for credit losses. The amended guidance requires measurement of all expected credit losses for financial instruments, including loans and debt securities, and other commitments to extend credit held at the reporting date. For financial assets measured at amortized cost, factors such as historical experience, current conditions, and reasonable and supportable forecasts will be used to estimate expected credit losses. The amended guidance will also change the manner in which credit losses are recognized on debt securities classified as available-for-sale. The new guidance will be effective for interim and annual periods beginning January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the new accounting guidance on the Company's financial condition, results of operations and cash flows. The Company does not expect the amended accounting guidance to have as significant of an impact as it could have if the Company were originating or purchasing mortgage loans. The Company's evaluation contemplates the recent performance of the run-off legacy mortgage and consumer loan portfolio and the credit profile of the current investment securities portfolio; however, the impact of the new guidance will depend on the current and expected macroeconomic conditions and the nature and characteristics of financial assets held by the Company on the date of adoption. Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company will still have the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The guidance will be effective for interim and annual periods beginning January 1, 2020, and must be applied prospectively. Early adoption is permitted. |
Net Revenue
Net Revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenues [Abstract] | |
NET REVENUE DISCLOSURE | NOTE 2—NET REVENUE The following table presents the significant components of total net revenue (dollars in millions): Three Months Ended March 31, 2018 2017 Net interest income $ 445 $ 319 Commissions 137 127 Fees and service charges 105 86 Gains on securities and other, net 10 10 Other revenue 11 11 Total net revenue $ 708 $ 553 Interest Income and Interest Expense The following table presents the significant components of interest income and interest expense (dollars in millions): Three Months Ended March 31, 2018 2017 Interest income: Cash and equivalents $ 3 $ 2 Cash required to be segregated under federal or other regulations 3 3 Investment securities (1) 290 205 Margin receivables 103 66 Loans 33 43 Broker-related receivables and other 4 — Subtotal interest income 436 319 Other interest revenue (2) 32 22 Total interest income 468 341 Interest expense: Deposits (2 ) (1 ) Customer payables (1 ) (1 ) Broker-related payables and other (1 ) — Other borrowings (7 ) (5 ) Corporate debt (9 ) (14 ) Subtotal interest expense (20 ) (21 ) Other interest expense (3) (3 ) (1 ) Total interest expense (23 ) (22 ) Net interest income $ 445 $ 319 (1) For the three months ended March 31, 2018 , includes $3 million of net fair value hedging adjustments. See Note 7- Derivative Instruments and Hedging Activities for additional information. (2) Represents interest income on securities loaned. (3) Represents interest expense on securities borrowed. Fees and Service Charges The following table presents the significant components of fees and service charges revenue (dollars in millions): Three Months Ended March 31, 2018 2017 Fees and service charges: Order flow revenue $ 47 $ 31 Money market funds and sweep deposits revenue 17 22 Mutual fund service fees 11 9 Advisor management fees 11 8 Foreign exchange revenue 8 8 Reorganization fees 3 3 Other fees and service charges 8 5 Total fees and service charges $ 105 $ 86 Revenue from Contracts with Customers On January 1, 2018, the Company adopted the new accounting standard, Revenue from Contracts with Customers, and all the related amendments using the modified retrospective method. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue recognition standard. The transaction price in a contract is allocated to each distinct performance obligation and is recognized as revenue when, or as, the performance obligation is satisfied. Commissions Revenue Commissions are derived from the Company's customers and are impacted by DARTs, average commission per trade and the number of trading days. Commission rates differ by trade type (e.g., equities, derivatives, stock plan and mutual funds) and are also impacted by lower pricing for customers that qualify for active trader pricing. For certain trade types, such as options contracts, the total commission earned varies based on contract volume. Commissions from securities transactions are recognized on a trade-date basis. Order Flow Revenue Order flow revenue is generated from market centers that accept trade orders from customer securities transactions. Order flow revenue is recognized on a trade-date basis when the Company has satisfied its performance obligation to the market center. Money Market Funds and Sweep Deposits Revenue Money market funds and sweep deposits revenue is driven by fees earned from off-balance sheet customer cash. This revenue is typically based on the average daily balance and the federal funds rate or LIBOR plus a negotiated spread. Other Revenue is recognized on other components of fees and service charges when or as the performance obligations are satisfied. Mutual fund service fees are asset-based fees that are driven by the amount of customer assets invested in each fund. Advisor management fees are generally earned based on a percentage of customer assets under management. Fees from software and services for managing equity compensation plans are recognized as the performance obligations are satisfied and are presented within other revenue on the consolidated statement of income. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 3—FAIR VALUE DISCLOSURES Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company may use various valuation approaches, including market, income and/or cost approaches. The fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Fair value is a market-based measure considered from the perspective of a market participant. Accordingly, even when market assumptions are not readily available, the Company’s own assumptions reflect those that market participants would use in pricing the asset or liability at the measurement date. The fair value measurement accounting guidance describes the following three levels used to classify fair value measurements: • Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities that are accessible by the Company • Level 2 - quoted prices for similar assets and liabilities in an active market, quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3 - unobservable inputs that are significant to the fair value of the assets or liabilities The availability of observable inputs can vary and in certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to a fair value measurement requires judgment and consideration of factors specific to the asset or liability. Recurring Fair Value Measurement Techniques Mortgage-backed Securities The Company’s mortgage-backed securities portfolio is comprised of agency mortgage-backed securities which are guaranteed by US government sponsored enterprises and federal agencies. The fair value of agency mortgage-backed securities was determined using a market approach with quoted market prices, recent transactions and spread data for identical or similar instruments. Agency mortgage-backed securities were categorized in Level 2 of the fair value hierarchy. Other Debt Securities The Company's fair value level classification of US Treasuries is based on the original maturity dates of the securities and whether the securities are the most recent issuances of a given maturity. US Treasuries with original maturities less than one year are classified as Level 1. US Treasuries with original maturities greater than one year are classified as Level 1 if they represent the most recent issuance of a given maturity; otherwise, these securities are classified as Level 2. The fair value measurements of agency debentures and agency debt securities were determined using market and income approaches along with the Company’s own trading activities for identical or similar instruments and were categorized in Level 2 of the fair value hierarchy. All of the Company’s municipal bonds were rated investment grade at March 31, 2018 . These securities were valued using a market approach with pricing service valuations corroborated by recent market transactions for identical or similar bonds. Municipal bonds and corporate bonds were categorized in Level 2 of the fair value hierarchy. Publicly Traded Equity Securities The fair value measurements of the Company's publicly traded equity securities were classified as Level 1 of the fair value hierarchy as they were based on quoted prices in active markets. Derivative Instruments Interest rate swaps were valued with an income approach using pricing models that are commonly used by the financial services industry. The market observable inputs used in the pricing models include the swap curve and overnight indexed swap basis from a financial data provider. The Company does not consider these models to involve significant judgment on the part of management, and the Company corroborated the fair value measurements with counterparty valuations. The Company’s derivative instruments were categorized in Level 2 of the fair value hierarchy. The consideration of credit risk, the Company’s or the counterparty’s, did not result in an adjustment to the valuation of its derivative instruments in the periods presented. Nonrecurring Fair Value Measurement Techniques Certain other assets are recorded at fair value on a nonrecurring basis: 1) one- to four-family and home equity loans in which the amount of the loan balance in excess of the estimated current value of the underlying property less estimated selling costs has been charged-off; and 2) real estate owned that is carried at the lower of the property’s carrying value or fair value less estimated selling costs. The Company evaluates and reviews assets that have been subject to fair value measurement requirements on a quarterly basis in accordance with policies and procedures that were designed to be in compliance with guidance from the Company’s regulators. These policies and procedures govern the frequency of the review, the use of acceptable valuation methods, and the consideration of estimated selling costs. Loans Receivable Loans that have been delinquent for 180 days or that are in bankruptcy and certain TDR loan modifications are charged-off based on the estimated current value of the underlying property less estimated selling costs. Property valuations for these one- to four-family and home equity loans are based on the most recent "as is" property valuation data available, which may include appraisals, broker price opinions, automated valuation models or updated values using home price indices. These property valuations are updated on a monthly, quarterly or semi-annual basis depending on the type of valuation initially used. If the valuation data obtained is significantly different from the valuation previously received, the Company reviews additional property valuation data to corroborate or update the valuation. If the value of the underlying property has declined, an additional charge-off is recorded. If the value of the underlying property has increased, previously charged-off amounts are not reversed. Recoveries of previously charged-off amounts are recognized within the allowance for loan losses when received. Real Estate Owned Property valuations for real estate owned are based on the lowest value of the most recent property valuation data available, which may include appraisals, listing prices or approved offer prices. Nonrecurring fair value measurements on one- to four-family loans, home equity loans and real estate owned were classified as Level 3 of the fair value hierarchy as the valuations included unobservable inputs that were significant to the fair value. The following table presents additional information about significant unobservable inputs used in the valuation of assets measured at fair value on a nonrecurring basis that were categorized in Level 3 of the fair value hierarchy: Unobservable Inputs Average Range March 31, 2018 Loans receivable: One- to four-family Appraised value $ 714,300 $250,000 - $1,750,000 Home equity Appraised value $ 274,400 $65,000 - $550,000 Real estate owned Appraised value $ 280,300 $31,500 - $750,000 December 31, 2017 Loans receivable: One- to four-family Appraised value $ 520,700 $60,000 - $1,200,000 Home equity Appraised value $ 317,300 $38,000 - $2,066,000 Real estate owned Appraised value $ 355,200 $4,500 - $2,000,000 Recurring and Nonrecurring Fair Value Measurements The following table presents the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total Fair Value March 31, 2018: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 23,418 $ — $ 23,418 Agency debentures — 869 — 869 US Treasuries — 439 — 439 Agency debt securities — 90 — 90 Municipal bonds — 19 — 19 Total available-for-sale securities — 24,835 — 24,835 Other assets: Derivative assets (1) — 4 — 4 Publicly traded equity securities (2) 7 — — 7 Total assets measured at fair value on a recurring basis (3) $ 7 $ 24,839 $ — $ 24,846 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 10 $ 10 Home equity — — 2 2 Total loans receivable — — 12 12 Other assets: Real estate owned — — 13 13 Total assets measured at fair value on a nonrecurring basis (4) $ — $ — $ 25 $ 25 (1) All derivative assets and liabilities were interest rate contracts at March 31, 2018 . Information related to derivative instruments is detailed in Note 7—Derivative Instruments and Hedging Activities . (2) Consists of investments in a mutual fund related to the Community Reinvestment Act. At March 31, 2018 these equity securities are included in other assets on the consolidated balance sheet as a result of the adoption of amended accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. (3) Assets measured at fair value on a recurring basis represented 39% of the Company’s total assets at March 31, 2018 . (4) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at March 31, 2018 , and for which a fair value measurement was recorded during the period. Level 1 Level 2 Level 3 Total Fair Value December 31, 2017: Recurring fair value measurements: Assets Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ — $ 19,195 $ — $ 19,195 Agency debentures — 966 — 966 US Treasuries — 458 — 458 Agency debt securities — 33 — 33 Municipal bonds — 20 — 20 Total debt securities — 20,672 — 20,672 Publicly traded equity securities 7 — — 7 Total available-for-sale securities 7 20,672 — 20,679 Receivables from brokers, dealers and clearing organizations: US Treasuries 300 — — 300 Other assets: Derivative assets (1) — 131 — 131 Total assets measured at fair value on a recurring basis (2) $ 307 $ 20,803 $ — $ 21,110 Liabilities Other liabilities: Derivative liabilities (1) $ — $ 14 $ — $ 14 Total liabilities measured at fair value on a recurring basis (2) $ — $ 14 $ — $ 14 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 22 $ 22 Home equity — — 13 13 Total loans receivable — — 35 35 Other assets: Loans held-for-sale — 17 — 17 Real estate owned — — 26 26 Total assets measured at fair value on a nonrecurring basis (3) $ — $ 17 $ 61 $ 78 (1) All derivative assets and liabilities were interest rate contracts at December 31, 2017 . Information related to derivative instruments is detailed in Note 7—Derivative Instruments and Hedging Activities . (2) Assets and liabilities measured at fair value on a recurring basis represented 33% and less than 1% of the Company’s total assets and total liabilities, respectively, at December 31, 2017 . (3) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at December 31, 2017 , and for which a fair value measurement was recorded during the period. The following table presents losses recognized on assets measured at fair value on a nonrecurring basis (dollars in millions): Three Months Ended March 31, 2018 2017 One- to four-family $ 1 $ 1 Home equity — 1 Total losses on loans receivable measured at fair value $ 1 $ 2 Losses on real estate owned measured at fair value $ — $ 1 Transfers Between Levels 1, 2 and 3 For assets and liabilities measured at fair value on a recurring basis, the Company’s transfers between levels of the fair value hierarchy are deemed to have occurred at the beginning of the reporting period on a quarterly basis. The Company had no transfers between levels during the three months ended March 31, 2018 and 2017 . Recurring Fair Value Measurements Categorized within Level 3 For the periods presented, no assets or liabilities measured at fair value on a recurring basis were categorized within Level 3 of the fair value hierarchy. Fair Value of Financial Instruments Not Carried at Fair Value The following table presents the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not carried at fair value on the consolidated balance sheet (dollars in millions): March 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 498 $ 498 $ — $ — $ 498 Cash required to be segregated under federal or other regulations $ 472 $ 472 $ — $ — $ 472 Held-to-maturity securities: Agency mortgage-backed securities $ 17,482 $ — $ 17,120 $ — $ 17,120 Agency debentures 987 — 968 — 968 Agency debt securities 2,176 — 2,124 — 2,124 Other 12 — — 12 12 Total held-to-maturity securities $ 20,657 $ — $ 20,212 $ 12 $ 20,224 Margin receivables (1) $ 10,515 $ — $ 10,515 $ — $ 10,515 Loans receivable, net: One- to four-family $ 1,327 $ — $ — $ 1,391 $ 1,391 Home equity 991 — — 1,002 1,002 Consumer and other 188 — — 186 186 Total loans receivable, net (2) $ 2,506 $ — $ — $ 2,579 $ 2,579 Receivables from brokers, dealers and clearing organizations (1) $ 735 $ — $ 735 $ — $ 735 Other assets (1)(3) $ 21 $ — $ 21 $ — $ 21 Liabilities Deposits $ 42,902 $ — $ 42,901 $ — $ 42,901 Customer payables $ 8,947 $ — $ 8,947 $ — $ 8,947 Payables to brokers, dealers and clearing organizations $ 2,892 $ — $ 2,892 $ — $ 2,892 Other borrowings: FHLB advances $ 500 $ — $ 500 $ — $ 500 Trust preferred securities $ 410 $ — $ — $ 392 $ 392 Total other borrowings $ 910 $ — $ 500 $ 392 $ 892 Corporate debt $ 992 $ — $ 971 $ — $ 971 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $14.1 billion at March 31, 2018. Of this amount, $5.5 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at March 31, 2018. (2) The carrying value of loans receivable, net includes the allowance for loan losses of $58 million and loans that are recorded at fair value on a nonrecurring basis at March 31, 2018 . (3) The $21 million in other assets at March 31, 2018 represents securities borrowing from customers under the fully paid lending program. December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 931 $ 931 $ — $ — $ 931 Cash required to be segregated under federal or other regulations $ 872 $ 872 $ — $ — $ 872 Held-to-maturity securities: Agency mortgage-backed securities $ 20,502 $ — $ 20,404 $ — $ 20,404 Agency debentures 710 — 708 — 708 Agency debt securities 2,615 — 2,595 — 2,595 Other 12 — — 12 12 Total held-to-maturity securities $ 23,839 $ — $ 23,707 $ 12 $ 23,719 Margin receivables (1) $ 9,071 $ — $ 9,071 $ — $ 9,071 Loans receivable, net: One- to four-family $ 1,417 $ — $ — $ 1,463 $ 1,463 Home equity 1,051 — — 1,055 1,055 Consumer and other 186 — — 187 187 Total loans receivable, net (2) $ 2,654 $ — $ — $ 2,705 $ 2,705 Receivables from brokers, dealers and clearing organizations (1) $ 878 $ — $ 878 $ — $ 878 Other assets (1)(3) $ 18 $ — $ 18 $ — $ 18 Liabilities Deposits $ 42,742 $ — $ 42,741 $ — $ 42,741 Customer Payables $ 9,449 $ — $ 9,449 $ — $ 9,449 Payables to brokers, dealers and clearing organizations $ 1,542 $ — $ 1,542 $ — $ 1,542 Other borrowings: FHLB advances $ 500 $ — $ 500 $ — $ 500 Trust preferred securities $ 410 $ — $ — $ 379 $ 379 Total other borrowings $ 910 $ — $ 500 $ 379 $ 879 Corporate debt $ 991 $ — $ 992 $ — $ 992 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, where the Company is permitted to sell or re-pledge the securities, was $12.8 billion at December 31, 2017. Of this amount, $3.2 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2017. (2) The carrying value of loans receivable, net includes the allowance for loan losses of $74 million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2017 . (3) The $18 million in other assets at December 31, 2017 represents securities borrowing from customers under the fully paid lending program. The fair value measurement techniques for financial instruments not carried at fair value on the consolidated balance sheet are summarized as follows: Cash and equivalents, cash required to be segregated under federal or other regulations, margin receivables, receivables from brokers, dealers and clearing organizations, customer payables, payables to brokers, dealers and clearing organizations and other assets —Due to their short term nature, fair value is estimated to be carrying value. Held-to-maturity securities —Fair value of held-to-maturity securities is determined in a manner consistent with the pricing of available-for-sale securities described above. Loans receivable, net —Fair value is estimated using a discounted cash flow model. Loans are differentiated based on their individual portfolio characteristics, such as product classification, loan category and pricing features. Assumptions for expected losses, prepayments, cash flows and discount rates are adjusted to reflect the individual characteristics of the loans, such as credit risk, coupon, lien position, and payment characteristics, as well as the secondary market conditions for these types of loans. Although the market for one- to four-family and home equity loan portfolios has improved, given the lack of observability of valuation inputs, these fair value measurements cannot be determined with precision and changes in the underlying assumptions used, including discount rates, could significantly affect the results of current or future fair value estimates. In addition, the amount that would be realized in a forced liquidation, an actual sale or immediate settlement could be lower than both the carrying value and the estimated fair value of the portfolio. Deposits —Fair value of certificates of deposit is estimated using a discounted cash flow model. For the remainder of deposits, fair value is the amount payable on demand at the reporting date. FHLB advances —Fair value for FHLB advances was determined by discounting future cash flows using discount factors derived from current observable rates implied for other similar instruments with similar remaining maturities. Trust preferred securities —Fair value is estimated by discounting future cash flows at the yield implied by dealer pricing quotes. Corporate debt —Fair value is estimated using dealer pricing quotes. Fair Value of Commitments and Contingencies In the normal course of business, the Company makes various commitments to extend credit and incur contingent liabilities that are not reflected in the consolidated balance sheet. Changes in the economy or interest rates may influence the impact that these commitments and contingencies have on the Company in the future. The Company does not estimate the fair value of those commitments. Information related to such commitments and contingent liabilities is included in Note 14—Commitments, Contingencies and Other Regulatory Matters . |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting Assets and Liabilities [Abstract] | |
Offsetting Assets and Liabilities [Text Block] | NOTE 4—OFFSETTING ASSETS AND LIABILITIES For financial statement purposes, the Company does not offset derivative instruments or securities borrowing and securities lending transactions. These activities are generally transacted under master agreements that are widely used by counterparties and that may allow for net settlements of payments in the normal course, as well as offsetting of all contracts with a given counterparty in the event of bankruptcy or default of one of the two parties to the transaction. The following table presents information about the Company's derivative instruments, securities borrowing and securities lending transactions which are transacted under master agreements to enable the users of the Company’s consolidated financial statements to evaluate the potential effect of rights of set-off between these recognized assets and liabilities (dollars in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet (1) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount March 31, 2018 Assets: Deposits paid for securities borrowed (2) $ 215 $ — $ 215 $ (174 ) $ (31 ) $ 10 Derivative assets (3) 4 — 4 — (2 ) 2 Total $ 219 $ — $ 219 $ (174 ) $ (33 ) $ 12 Liabilities: Deposits received for securities loaned (4) $ 2,840 $ — $ 2,840 $ (174 ) $ (2,531 ) $ 135 Total $ 2,840 $ — $ 2,840 $ (174 ) $ (2,531 ) $ 135 December 31, 2017 Assets: Deposits paid for securities borrowed (2) $ 759 $ — $ 759 $ (251 ) $ (483 ) $ 25 Total $ 759 $ — $ 759 $ (251 ) $ (483 ) $ 25 Liabilities: Deposits received for securities loaned (4) $ 1,373 $ — $ 1,373 $ (251 ) $ (1,004 ) $ 118 Derivative liabilities (5)(6) 5 — 5 — (5 ) — Total $ 1,378 $ — $ 1,378 $ (251 ) $ (1,009 ) $ 118 (1) The vast majority of the net amount of deposits paid for securities borrowed are reflected in the receivables from brokers, dealers and clearing organizations line item while the deposits paid for securities borrowed under the fully paid program are reflected in other assets. Derivative assets are reflected in the other assets line item in the consolidated balance sheet. Net amount of deposits received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheet. Derivative liabilities are reflected in the other liabilities line item in the consolidated balance sheet. (2) Included in the gross amounts of deposits paid for securities borrowed was $67 million and $347 million at March 31, 2018 and December 31, 2017 , respectively, transacted through a program with a clearing organization, which guarantees the return of cash to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (3) Collateral received included cash at March 31, 2018 . (4) Included in the gross amounts of deposits received for securities loaned was $2 billion and $821 million at March 31, 2018 and December 31, 2017 , respectively, transacted through a program with a clearing organization, which guarantees the return of securities to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (5) Excludes net accrued interest payable of $2 million at December 31, 2017 . (6) Collateral pledged included held-to-maturity securities at amortized cost at December 31, 2017 . Securities Lending Transactions Deposits paid for securities borrowed and deposits received for securities loaned are recorded at the amount of cash collateral advanced or received. Securities borrowing transactions require the Company to deposit cash with the lender whereas securities lending transactions result in the Company receiving collateral in the form of cash, with both requiring cash in an amount generally in excess of the market value of the securities. These transactions have overnight or continuous remaining contractual maturities. Securities lending transactions expose the Company to counterparty credit risk and market risk. To manage the counterparty risk, the Company maintains internal standards for approving counterparties, reviews and analyzes the credit rating of each counterparty, and monitors its positions with each counterparty on an ongoing basis. In addition, for certain of the Company's securities lending transactions, the Company uses a program with a clearing organization that guarantees the return of securities. The Company monitors the market value of the securities borrowed and loaned using collateral arrangements that require additional collateral to be obtained from or excess collateral to be returned to the counterparties based on changes in market value, to maintain specified collateral levels. Derivative Transactions Certain types of derivatives that the Company utilizes in its hedging activities are subject to derivatives clearing agreements (cleared derivatives contracts). These cleared derivatives contracts enable clearing by a derivatives clearing organization through a clearing member. Under the contracts, the clearing member typically has a one-way right to offset all contracts in the event of the Company's default or bankruptcy. Collateral exchanged under these contracts is not included in the table above as the contracts may not qualify as master netting agreements. See Note 7—Derivative Instruments and Hedging Activities for additional information. |
Available-for-Sale and Held-to-
Available-for-Sale and Held-to-Maturity Securities | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES | NOTE 5—AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities (dollars in millions): Amortized Cost Gross Unrealized / Unrecognized Gains Gross Unrealized / Unrecognized Losses Fair Value March 31, 2018: Available-for-sale securities: (1) Agency mortgage-backed securities $ 23,781 $ 113 $ (476 ) $ 23,418 Agency debentures 854 24 (9 ) 869 US Treasuries 407 32 — 439 Agency debt securities 91 — (1 ) 90 Municipal bonds 19 — — 19 Total available-for-sale securities $ 25,152 $ 169 $ (486 ) $ 24,835 Held-to-maturity securities: (1) Agency mortgage-backed securities $ 17,482 $ 24 $ (386 ) $ 17,120 Agency debentures 987 — (19 ) 968 Agency debt securities 2,176 5 (57 ) 2,124 Other 12 — — 12 Total held-to-maturity securities $ 20,657 $ 29 $ (462 ) $ 20,224 December 31, 2017: Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ 19,395 $ 47 $ (247 ) $ 19,195 Agency debentures 939 39 (12 ) 966 US Treasuries 452 10 (4 ) 458 Agency debt securities 34 — (1 ) 33 Municipal bonds 20 — — 20 Total debt securities 20,840 96 (264 ) 20,672 Publicly traded equity securities (2) 7 — — 7 Total available-for-sale securities $ 20,847 $ 96 $ (264 ) $ 20,679 Held-to-maturity securities: Agency mortgage-backed securities $ 20,502 $ 95 $ (193 ) $ 20,404 Agency debentures 710 — (2 ) 708 Agency debt securities 2,615 15 (35 ) 2,595 Other 12 — — 12 Total held-to-maturity securities $ 23,839 $ 110 $ (230 ) $ 23,719 (1) Securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million were transferred from held-to-maturity securities to available-for-sale securities during the three months ended March 31, 2018, as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. Securities with a fair value of $1.2 billion were transferred from available-for-sale securities to held-to-maturity securities during the three months ended March 31, 2018 pursuant to an evaluation of our investment strategy and an assessment by management about our intent and ability to hold those particular securities until maturity. See Note 11—Shareholders' Equity for information on the impact to accumulated other comprehensive income. (2) Consists of investments in a mutual fund related to the Community Reinvestment Act. At March 31, 2018 these equity securities are included in other assets on the consolidated balance sheet as a result of the adoption of amended accounting guidance related to the classification and measurement of financial instruments. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. Contractual Maturities The following table presents the contractual maturities of all available-for-sale and held-to-maturity debt securities (dollars in millions): March 31, 2018 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ — $ — Due within one to five years 998 978 Due within five to ten years 10,117 10,031 Due after ten years 14,037 13,826 Total available-for-sale debt securities $ 25,152 $ 24,835 Held-to-maturity debt securities: Due within one year $ 135 $ 135 Due within one to five years 1,509 1,491 Due within five to ten years 5,053 4,936 Due after ten years 13,960 13,662 Total held-to-maturity debt securities $ 20,657 $ 20,224 At March 31, 2018 and December 31, 2017 , the Company had pledged $4.8 billion and $5.5 billion , respectively, of held-to-maturity debt securities, and $470 million and $352 million , respectively, of available-for-sale securities, as collateral for FHLB advances, derivatives and other purposes. Investments with Unrealized or Unrecognized Losses The following table presents the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position (dollars in millions): Less than 12 Months 12 Months or More Total Fair Value Unrealized / Unrecognized Losses Fair Value Unrealized / Unrecognized Losses Fair Value Unrealized / Unrecognized Losses March 31, 2018: Available-for-sale securities: Agency mortgage-backed securities $ 7,269 $ (118 ) $ 8,661 $ (358 ) $ 15,930 $ (476 ) Agency debentures 202 (2 ) 115 (7 ) 317 (9 ) Agency debt securities 48 — 22 (1 ) 70 (1 ) Municipal bonds — — 10 — 10 — Total temporarily impaired available-for-sale securities $ 7,519 $ (120 ) $ 8,808 $ (366 ) $ 16,327 $ (486 ) Held-to-maturity securities: Agency mortgage-backed securities $ 10,988 $ (234 ) $ 3,836 $ (152 ) $ 14,824 $ (386 ) Agency debentures 817 (16 ) 151 (3 ) 968 (19 ) Agency debt securities 582 (10 ) 1,206 (47 ) 1,788 (57 ) Total temporarily impaired held-to-maturity securities $ 12,387 $ (260 ) $ 5,193 $ (202 ) $ 17,580 $ (462 ) December 31, 2017: Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ 4,638 $ (23 ) $ 8,027 $ (224 ) $ 12,665 $ (247 ) Agency debentures — — 283 (12 ) 283 (12 ) US Treasuries — — 147 (4 ) 147 (4 ) Agency debt securities 9 — 24 (1 ) 33 (1 ) Municipal bonds — — 11 — 11 — Publicly traded equity securities 7 — — — 7 — Total temporarily impaired available-for-sale securities $ 4,654 $ (23 ) $ 8,492 $ (241 ) $ 13,146 $ (264 ) Held-to-maturity securities: Agency mortgage-backed securities $ 9,982 $ (78 ) $ 4,906 $ (115 ) $ 14,888 $ (193 ) Agency debentures 597 (2 ) 9 — 606 (2 ) Agency debt securities 373 (3 ) 1,345 (32 ) 1,718 (35 ) Total temporarily impaired held-to-maturity securities $ 10,952 $ (83 ) $ 6,260 $ (147 ) $ 17,212 $ (230 ) The Company does not believe that any individual unrealized loss in the available-for-sale portfolio or unrecognized loss in the held-to-maturity portfolio as of March 31, 2018 represents a credit loss. The Company does not intend to sell the debt securities in an unrealized or unrecognized loss position as of the balance sheet date and it is not more likely than not that the Company will be required to sell the debt securities before the anticipated recovery of its remaining amortized cost of the debt securities in an unrealized or unrecognized loss position at March 31, 2018 . There were no impairment losses recognized in earnings on available-for-sale or held-to-maturity securities during the three months ended March 31, 2018 and 2017. Gains on Securities and Other, Net The following table presents the components of gains on securities and other, net (dollars in millions): Three Months Ended March 31, 2018 2017 Gains on available-for-sale securities $ 11 $ 8 Equity method investment income (loss) and other (1) (1 ) 2 Gains on securities and other, net $ 10 $ 10 (1) Includes a loss of $1 million on hedge ineffectiveness for the three months ended March 31, 2017. Beginning January 1, 2018 fair value hedging adjustments are recognized within net interest income. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Loans Receivable, Net
Loans Receivable, Net | 3 Months Ended |
Mar. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOANS RECEIVABLE, NET | NOTE 6—LOANS RECEIVABLE, NET The following table presents loans receivable disaggregated by delinquency status (dollars in millions): Days Past Due Current 30-89 90-179 180+ Total Unamortized premiums, net Allowance for loans losses Loans Receivable, Net March 31, 2018 One- to four-family $ 1,192 $ 57 $ 17 $ 73 $ 1,339 $ 8 $ (20 ) $ 1,327 Home equity 947 34 15 30 1,026 — (35 ) 991 Consumer and other 186 2 1 — 189 2 (3 ) 188 Total loans receivable $ 2,325 $ 93 $ 33 $ 103 $ 2,554 $ 10 $ (58 ) $ 2,506 December 31, 2017 One- to four-family $ 1,269 $ 59 $ 22 $ 82 $ 1,432 $ 9 $ (24 ) $ 1,417 Home equity 1,014 36 15 32 1,097 — (46 ) 1,051 Consumer and other 185 3 — — 188 2 (4 ) 186 Total loans receivable $ 2,468 $ 98 $ 37 $ 114 $ 2,717 $ 11 $ (74 ) $ 2,654 At December 31, 2017 , the Company had loans with a carrying value of $17 million classified as held for sale. These loans were presented within other assets as of December 31, 2017 and were sold during the three months ended March 31, 2018 . At March 31, 2018 , the Company pledged $2.1 billion and $0.2 billion of loans as collateral to the FHLB and Federal Reserve Bank of Richmond, respectively. At December 31, 2017 , the Company pledged $2.2 billion and $0.2 billion of loans as collateral to the FHLB and Federal Reserve Bank of Richmond, respectively. Credit Quality and Concentrations of Credit Risk The Company tracks and reviews factors to predict and monitor credit risk in its mortgage loan portfolio on an ongoing basis. The following tables present the distribution of the Company’s mortgage loan portfolios by credit quality indicator (dollars in millions): One- to Four-Family Home Equity Current LTV/CLTV (1) March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 <=80% $ 978 $ 1,031 $ 509 $ 531 80%-100% 221 256 273 291 100%-120% 91 91 158 176 >120% 49 54 86 99 Total mortgage loans receivable $ 1,339 $ 1,432 $ 1,026 $ 1,097 Average estimated current LTV/CLTV (2) 69 % 70 % 83 % 84 % Average LTV/CLTV at loan origination (3) 71 % 71 % 82 % 81 % (1) Current CLTV calculations for home equity loans are based on the maximum available line for HELOCs and outstanding principal balance for HEILs. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property value estimates are updated on a quarterly basis. (2) The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for HELOCs, divided by the estimated current value of the underlying property. (3) Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans, HEILs and the maximum available line for HELOCs. One- to Four-Family Home Equity Current FICO March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 >=720 $ 749 $ 805 $ 509 $ 548 719 - 700 126 138 98 106 699 - 680 105 105 89 93 679 - 660 76 78 72 79 659 - 620 111 122 102 103 <620 172 184 156 168 Total mortgage loans receivable $ 1,339 $ 1,432 $ 1,026 $ 1,097 One- to four-family loans include loans with an interest-only period, followed by an amortizing period. At March 31, 2018 , nearly 100% of these loans were amortizing. The home equity loan portfolio consists of HEILs and HELOCs. HEILs are primarily fully amortizing loans that do not offer the option of an interest-only payment. The majority of HELOCs had an interest only draw period at origination and converted to amortizing loans at the end of the draw period. At March 31, 2018 , nearly 100% of the HELOC portfolio had converted from the interest-only draw period. The weighted average age of our mortgage and consumer loans receivable was 12.1 years and 11.8 years at March 31, 2018 and December 31, 2017 , respectively. Approximately 33% and 34% of the Company’s mortgage loans receivable were concentrated in California at March 31, 2018 and December 31, 2017 , respectively. No other state had concentrations of mortgage loans that represented 10% or more of the Company’s mortgage loans receivable at March 31, 2018 and December 31, 2017 . At March 31, 2018 , 29% and 17% of the Company’s past-due mortgage loans were concentrated in California and New York, respectively. No other state had concentrations of past-due mortgage loans that represented 10% or more of the Company's past-due mortgage loans. At March 31, 2018 , 44% of the Company’s impaired mortgage loans were concentrated in California. No other state had concentrations of impaired mortgage loans that represented 10% or more of the Company's impaired mortgage loans. Nonperforming Loans The Company classifies loans as nonperforming when they are no longer accruing interest. The following table presents nonperforming loans by loan portfolio (dollars in millions): March 31, 2018 December 31, 2017 One- to four-family $ 179 $ 192 Home equity 90 98 Consumer and other 1 — Total nonperforming loans receivable $ 270 $ 290 At March 31, 2018 and December 31, 2017 , the Company held $22 million and $26 million , respectively, of real estate owned that were acquired through foreclosure or through a deed in lieu of foreclosure or similar legal agreement. The Company held $86 million and $101 million of loans for which formal foreclosure proceedings were in process at March 31, 2018 and December 31, 2017 , respectively. Allowance for Loan Losses The allowance for loan losses is management’s estimate of probable losses inherent in the loan portfolio at the balance sheet date, as well as the forecasted losses, including economic concessions to borrowers, over the estimated remaining life of loans modified as TDRs. The general allowance for loan losses includes a qualitative component to account for a variety of factors that present additional uncertainty that may not be fully considered in the quantitative loss model but are factors we believe may impact the level of credit losses. The following table presents the allowance for loan losses by loan portfolio (dollars in millions): One- to Four-Family Home Equity Consumer and other Total March 31, December 31, 2017 March 31, December 31, 2017 March 31, December 31, March 31, December 31, 2017 General reserve: Quantitative component $ 11 $ 15 $ 5 $ 14 $ 3 $ 4 $ 19 $ 33 Qualitative component 3 3 2 3 — — 5 6 Specific valuation allowance 6 6 28 29 — — 34 35 Total allowance for loan losses $ 20 $ 24 $ 35 $ 46 $ 3 $ 4 $ 58 $ 74 Allowance as a % of loans (1) 1.5 % 1.6 % 3.4 % 4.2 % 1.8 % 2.1 % 2.3 % 2.7 % (1) Allowance as a percentage of loans receivable is calculated based on the gross loans receivable including net unamortized premiums for each respective category. The following table presents a roll forward by loan portfolio of the allowance for loan losses (dollars in millions): Three Months Ended March 31, 2018 One- to Four-Family Home Equity Consumer and other Total Allowance for loan losses, beginning of period $ 24 $ 46 $ 4 $ 74 Provision (benefit) for loan losses (5 ) (16 ) — (21 ) Charge-offs — — (1 ) (1 ) Recoveries 1 5 — 6 Net (charge-offs) recoveries 1 5 (1 ) 5 Allowance for loan losses, end of period $ 20 $ 35 $ 3 $ 58 Three Months Ended March 31, 2017 One- to Four-Family Home Equity Consumer and other Total Allowance for loan losses, beginning of period $ 45 $ 171 $ 5 $ 221 Provision (benefit) for loan losses — (15 ) 1 (14 ) Charge-offs — — (2 ) (2 ) Recoveries 1 6 1 8 Net (charge-offs) recoveries 1 6 (1 ) 6 Allowance for loan losses, end of period $ 46 $ 162 $ 5 $ 213 Total loans receivable designated as held-for-investment decreased $148 million during the three months ended March 31, 2018 . The allowance for loan losses was $58 million , or 2.3% of total loans receivable, as of March 31, 2018 compared to $74 million , or 2.7% of total loans receivable, as of December 31, 2017 . Net recoveries for the three months ended March 31, 2018 were $5 million compared to $6 million in the same period in 2017 . The benefit for loan losses was $21 million for the three months ended March 31, 2018 . The timing and magnitude of the provision (benefit) for loan losses is affected by many factors that could result in variability. These benefits reflected better than expected performance of our portfolio as well as recoveries in excess of prior expectations, including recoveries of previous charge-offs that were not included in our loss estimates. The following table presents the total recorded investment in loans receivable and allowance for loan losses by loans that have been collectively evaluated for impairment and those that have been individually evaluated for impairment by loan portfolio (dollars in millions): Recorded Investment Allowance for Loan Losses March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Collectively evaluated for impairment: One- to four-family $ 1,140 $ 1,228 $ 14 $ 18 Home equity 867 932 7 17 Consumer and other 191 190 3 4 Total collectively evaluated for impairment 2,198 2,350 24 39 Individually evaluated for impairment: One- to four-family 207 213 6 6 Home equity 159 165 28 29 Total individually evaluated for impairment 366 378 34 35 Total $ 2,564 $ 2,728 $ 58 $ 74 Impaired Loans—Troubled Debt Restructurings Delinquency status is the primary measure the Company uses to evaluate the performance of loans modified as TDRs. The Company classifies loans as nonperforming when they are no longer accruing interest. The recorded investment in loans modified as TDRs includes the charge-offs related to certain loans that were written down to estimated current value of the underlying property less estimated selling costs. The following table presents a summary of the Company’s recorded investment in TDRs that were on accrual and nonaccrual status, further disaggregated by delinquency status, in addition to the recorded investment in TDRs (dollars in millions): Nonaccrual TDRs Accrual TDRs (1) Current (2) 30-89 Days Delinquent 90-179 Days Delinquent 180+ Days Delinquent Total Recorded Investment in TDRs (3)(4) March 31, 2018 One- to four-family $ 83 $ 74 $ 15 $ 5 $ 30 $ 207 Home equity 100 30 9 6 14 159 Total $ 183 $ 104 $ 24 $ 11 $ 44 $ 366 December 31, 2017 One- to four-family $ 83 $ 74 $ 13 $ 5 $ 38 $ 213 Home equity 104 34 10 4 13 165 Total $ 187 $ 108 $ 23 $ 9 $ 51 $ 378 (1) Represents loans modified as TDRs that are current and have made six or more consecutive payments. (2) Represents loans modified as TDRs that are current but have not yet made six consecutive payments, bankruptcy loans and certain junior lien TDRs that have a delinquent senior lien. (3) Total recorded investment in TDRs includes premium (discount), as applicable, and is net of charge-offs, which were $65 million and $140 million for one-to four-family and home equity loans, respectively, as of March 31, 2018 and $67 million and $144 million , respectively, as of December 31, 2017 . (4) Total recorded investment in TDRs at March 31, 2018 consisted of $277 million of loans modified as TDRs and $89 million of loans that have been charged off due to bankruptcy notification. Total recorded investment in TDRs at December 31, 2017 consisted of $285 million of loans modified as TDRs and $93 million of loans that have been charged off due to bankruptcy notification. The following table presents the average recorded investment and interest income recognized both on a cash and accrual basis for the Company’s TDRs (dollars in millions): Average Recorded Investment Interest Income Recognized Three Months Ended March 31, Three Months Ended March 31, 2018 2017 2018 2017 One- to four-family $ 210 $ 241 $ 2 $ 3 Home equity 165 192 4 4 Total $ 375 $ 433 $ 6 $ 7 The following table presents detailed information related to the Company’s TDRs and specific valuation allowances (dollars in millions): March 31, 2018 December 31, 2017 Recorded Investment in TDRs Specific Valuation Allowance Net Investment in TDRs Recorded Investment in TDRs Specific Valuation Allowance Net Investment in TDRs With a recorded allowance: One- to four-family $ 54 $ 6 $ 48 $ 54 $ 6 $ 48 Home equity $ 83 $ 28 $ 55 $ 83 $ 29 $ 54 Without a recorded allowance: (1) One- to four-family $ 153 $ — $ 153 $ 159 $ — $ 159 Home equity $ 76 $ — $ 76 $ 82 $ — $ 82 Total: One- to four-family $ 207 $ 6 $ 201 $ 213 $ 6 $ 207 Home equity $ 159 $ 28 $ 131 $ 165 $ 29 $ 136 (1) Represents loans where the discounted cash flow analysis or collateral value is equal to or exceeds the recorded investment in the loan. The following table presents the number of loans and post-modification balances immediately after being modified by major class (dollars in millions): Interest Rate Reduction Number of Loans Re-age/ Extension/ Interest Capitalization Other with Interest Rate Reduction Other (1) Total March 31, 2018 One- to four-family 16 $ 6 $ — $ 2 $ 8 Home equity 44 2 — — 2 Total 60 $ 8 $ — $ 2 $ 10 March 31, 2017 One- to four-family 8 $ 2 $ — $ — $ 2 Home equity 161 3 — 8 11 Total 169 $ 5 $ — $ 8 $ 13 (1) Amounts represent loans whose terms were modified in a manner that did not result in an interest rate reduction, including re-aged loans, extensions, and loans with capitalized interest. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 7—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company enters into derivative transactions primarily to protect against interest rate risk on the value of certain assets. Each derivative instrument is recorded on the consolidated balance sheet at fair value as a freestanding asset or liability. The following table presents a summary of the fair value of derivatives as reported in the consolidated balance sheet (dollars in millions): Fair Value Notional Asset (1) Liability (2) Net (3) March 31, 2018 Interest rate contracts: Fair value hedges $ 10,086 $ 4 $ — $ 4 Total derivatives designated as hedging instruments (4) $ 10,086 $ 4 $ — $ 4 December 31, 2017 Interest rate contracts: Fair value hedges $ 8,609 $ 131 $ (14 ) $ 117 Total derivatives designated as hedging instruments (4) $ 8,609 $ 131 $ (14 ) $ 117 (1) Reflected in the other assets line item on the consolidated balance sheet. (2) Reflected in the other liabilities line item on the consolidated balance sheet. (3) Represents net fair value of derivative instruments for disclosure purposes only. (4) All derivatives were designated as hedging instruments at March 31, 2018 and December 31, 2017 . In January 2017, one of the two central clearing organizations through which the Company executes certain of its derivative contracts amended its rulebooks to legally characterize variation margin payments as settlements of the derivatives' exposure rather than collateral against the exposure. In January 2018, the other central clearing organization made similar rulebook amendments. For these contracts, amounts exchanged with counterparties are reflected as a reduction of the related derivative assets or liabilities, including accrued interest, on the consolidated balance sheet. Accordingly, the consolidated balance sheet and the table above exclude derivative assets of $381 million and $6 million at March 31, 2018 and December 31, 2017, respectively, and derivative liabilities of $13 million and $18 million at March 31, 2018 and December 31, 2017, respectively, that were executed through a central clearing organization and were settled by variation margin payments. The Company therefore had no centrally cleared derivative contract assets or liabilities reflected on the consolidated balance sheet as a result of the rulebook changes as of March 31, 2018 . At December 31, 2017 , the Company had $131 million and $9 million of centrally cleared derivative contract assets and liabilities, respectively, reflected on the consolidated balance sheet. Fair Value Hedges The Company utilizes fair value hedges to offset exposure to changes in value of certain fixed-rate assets. All of the Company's derivative instruments were designated in fair value hedging relationships at March 31, 2018 and December 31, 2017. For each fair value hedge, both the gain or loss on the derivative, including periodic cash settlement accruals, as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in earnings. Hedge accounting is discontinued for fair value hedges if a derivative instrument is sold, terminated or otherwise de-designated. If fair value hedge accounting is discontinued, the previously hedged item is no longer adjusted for changes in fair value through the consolidated statement of income and the cumulative net gain or loss on the hedged item is amortized to net interest income using the effective interest method over the expected remaining life of the hedged item. Beginning January 1, 2018, the net earnings impact of a fair hedge that is not perfectly effective is recognized in the interest income line item in the consolidated statement of income. Prior to January 1, 2018, the net earnings impact due to changes in fair value of the derivative and the hedged item, which was previously referred to as ineffectiveness, is reflected in the gains on securities and other, net line item in the consolidated statement of income. The earnings impact of periodic cash settlements accruals on the derivative is reflected in the interest income line item in the consolidated statement of income. The following table presents the effects of fair value hedge accounting on the consolidated statement of income for the three months ended March 31, 2018 (dollars in millions): Interest Income Total interest income $ 468 Effects of fair value hedging on total interest income (1) Agency debentures: Amounts recognized as interest settlements on derivatives (2 ) Changes in fair value of hedged items (50 ) Changes in fair value of derivatives 49 Net loss on fair value hedging relationships - agency debentures (3 ) Agency mortgage backed securities: Amounts recognized as interest settlements on derivatives (13 ) Amortization of basis adjustments from discontinued hedges 2 Changes in fair value of hedged items (231 ) Changes in fair value of derivatives 229 Net loss on fair value hedging relationships - agency mortgage backed securities (13 ) Total net loss on fair value hedging relationships $ (16 ) (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. The following table presents the changes in fair value of interest rate derivative contracts designated as fair value hedges and related hedged items as reflected in the consolidated statement of income for the three months ended March 31, 2017 (dollars in millions): Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Agency debentures $ 11 $ (11 ) $ — Agency mortgage-backed securities 13 (14 ) (1 ) Total gains (losses) included in earnings $ 24 $ (25 ) $ (1 ) (1) Reflected in the gains on securities and other, net line item on the consolidated statement of income. The following table presents the cumulative basis adjustments related to the carrying amount of hedged assets in fair value hedging relationships (dollars in millions): Cumulative Amount of Fair Value Hedging Basis Adjustment Included in Carrying Amount of Hedged Assets (2) Carrying Amount of Hedged Assets (1) Total Discontinued March 31, 2018 Available-for-sale securities $ 12,090 $ (320 ) $ (215 ) (1) The carrying amount includes the impact of basis adjustments on active fair value hedges and the impact of basis adjustments from previously discontinued fair value hedges. (2) Represents the increase (decrease) to the carrying amount of hedged assets. The discontinued portion of the cumulative amount of fair value hedging basis adjustments is amortized into net interest income using the effective interest method over the expected remaining life of the hedged items. The following table presents the hedging relationships designated under the last-of-layer method (dollars in millions): Carrying Amount of Hedged Assets (1) Amount Representing Hedged Items Designated as Last-of-Layer Basis Adjustment Associated with Hedged Items Designated as Last-of-Layer (2) March 31, 2018 Fair value hedges under last-of-layer Hedged item (3) $ 910 $ 440 $ 1 (1) The carrying amount includes the impact of basis adjustments on active fair value hedges. (2) Represents the increase (decrease) to the carrying amount of hedged assets. (3) Represents closed portfolios of prepayable securities designated in hedging relationships in which the hedged item is the last layer of principal expected to be remaining throughout the hedge term. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2018 | |
Deposits [Abstract] | |
DEPOSITS | NOTE 8—DEPOSITS The following table presents the significant components of deposits (dollars in millions): Amount Weighted-Average Rate March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Sweep deposits $ 37,927 $ 37,734 0.07 % 0.01 % Savings deposits 2,797 2,912 0.01 % 0.01 % Other deposits (1) 2,178 2,096 0.02 % 0.03 % Total deposits $ 42,902 $ 42,742 0.07 % 0.01 % (1) Includes checking deposits, money market deposits and certificates of deposit. As of March 31, 2018 and December 31, 2017 , the Company had $214 million and $207 million in non-interest bearing deposits, respectively. |
Other Borrowings
Other Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Other Borrowings Disclosure [Abstract] | |
OTHER BORROWINGS | NOTE 9—OTHER BORROWINGS The following table presents the significant components of other borrowings (dollars in millions): March 31, 2018 December 31, 2017 FHLB advances $ 500 $ 500 Trust preferred securities (1) 410 410 Total other borrowings $ 910 $ 910 (1) Trust preferred securities begin maturing in 2031. External Lines of Credit maintained at E*TRADE Securities E*TRADE Securities' external liquidity lines total approximately $1.1 billion as of March 31, 2018 and include the following: • A 364-day, $450 million senior unsecured committed revolving credit facility with a syndicate of banks, with a maturity date of June 2018 • Secured committed lines of credit with two unaffiliated banks, aggregating to $175 million , with a maturity date of June 2018 • Unsecured uncommitted lines of credit with three unaffiliated banks aggregating to $125 million , of which $50 million has a maturity date of June 2018 and the remaining line has no maturity date • Secured uncommitted lines of credit with several unaffiliated banks aggregating to $375 million with no maturity date The revolving credit facility contains maintenance covenants related to E*TRADE Securities' minimum consolidated tangible net worth and regulatory net capital ratio. There were no outstanding balances for these lines at March 31, 2018 . |
Corporate Debt
Corporate Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
CORPORATE DEBT | NOTE 10—CORPORATE DEBT The following table presents the significant components of corporate debt (dollars in millions): Face Value Discount Net March 31, 2018 Interest-bearing notes: 2.95% Notes, due 2022 $ 600 $ (4 ) $ 596 3.80% Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (8 ) $ 992 December 31, 2017 Interest-bearing notes: 2.95% Notes, due 2022 $ 600 $ (5 ) $ 595 3.80% Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (9 ) $ 991 Credit Facility In 2017, the Company entered into an unsecured committed revolving credit facility with certain lenders, which replaced the previous secured committed revolving credit facility entered into in 2014 and increased the Company's total borrowing capacity under the facility to $300 million . The Company has the ability to borrow against the credit facility for working capital and general corporate purposes. The credit facility has terms which include financial maintenance covenants, with which the Company was in compliance at March 31, 2018 . The unsecured committed revolving credit facility will mature on June 23, 2020. At March 31, 2018 , there was no outstanding balance under this revolving credit facility. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 11—SHAREHOLDERS' EQUITY Preferred Stock The following table presents the preferred stock outstanding (in millions except total shares outstanding and per share data): Carrying Value at Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share March 31, 2018 December 31, 2017 Series A Fixed-to-Floating Rate Non-Cumulative 8/25/2016 5.875% to, but excluding, 9/15/2026; 3-mo LIBOR + 4.435% thereafter 400,000 $ 1,000 $ 394 $ 394 Series B Fixed-to-Floating Rate Non-Cumulative 12/6/2017 5.30% to, but excluding, 3/15/2023; 3-mo LIBOR + 3.16% thereafter 3,000 $ 100,000 295 295 Total 403,000 $ 689 $ 689 The following table presents the cash dividend paid on preferred stock (in millions except per share data): Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/8/2018 2/28/2018 3/15/2018 $ 29.38 $ 12 2/2/2017 2/28/2017 3/15/2017 $ 32.64 $ 13 (1) Dividends are non-cumulative and payable semi-annually. Share Repurchases On July 20, 2017, the Company announced that its Board of Directors authorized the repurchase of up to $1 billion of shares of its common stock. During the three months ended March 31, 2018 , the Company repurchased 2.7 million shares of common stock at an average price of $52.12 for a total of $140 million . As of March 31, 2018 , the Company had repurchased a total of $502 million , or 11.2 million shares of common stock under this program. As of March 31, 2018 , $498 million remained available for additional repurchases. As of April 30, 2018 , the Company has subsequently repurchased an additional 0.9 million shares of common stock at an average price of $60.01 . The Company accounts for share repurchases retired after repurchase by allocating the excess repurchase price over par to additional paid-in-capital. Accumulated Other Comprehensive Loss The following tables present after-tax changes in each component of accumulated other comprehensive loss (dollars in millions): Total (1) Balance, December 31, 2017 $ (26 ) Other comprehensive loss before reclassifications (128 ) Amounts reclassified from accumulated other comprehensive loss (7 ) Transfer of held-to-maturity securities to available-for-sale securities (2) 6 Net change (129 ) Cumulative effect of hedge accounting adoption (7 ) Reclassification of tax effects due to federal tax reform (14 ) Balance, March 31, 2018 (3) $ (176 ) (1) During the three month ended March 31, 2018, the accumulated other comprehensive loss activity related to available-for-sale securities. (2) Securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million , or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities during the three months ended March 31, 2018, as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. (3) Includes unamortized unrealized pre-tax losses of $24 million at March 31, 2018 of which $18 million is related to the transfer of available-for-sale securities to held-to-maturity securities during the three months ended March 31, 2018. Available-for-Sale Securities Foreign Currency Translation Total Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) Other comprehensive income before reclassifications 46 — 46 Amounts reclassified from accumulated other comprehensive loss (5 ) (2 ) (7 ) Net change 41 (2 ) 39 Balance, March 31, 2017 $ (98 ) $ — $ (98 ) The following table presents other comprehensive income (loss) activity and the related tax effect (dollars in millions): Three Months Ended March 31, 2018 2017 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive income (loss) Available-for-sale securities: Unrealized gains (losses), net $ (172 ) $ 44 $ (128 ) $ 76 $ (30 ) $ 46 Reclassification into earnings, net (10 ) 3 (7 ) (8 ) 3 (5 ) Transfer of held-to-maturity securities to available-for-sale securities 7 (1 ) 6 — — — Net change from available-for-sale securities (175 ) 46 (129 ) 68 (27 ) 41 Reclassification of foreign currency translation gains — — — (2 ) — (2 ) Other comprehensive income (loss) $ (175 ) $ 46 $ (129 ) $ 66 $ (27 ) $ 39 The following table presents the consolidated statement of income line items impacted by reclassifications out of accumulated other comprehensive loss (dollars in millions): Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Items in the Consolidated Statement of Income Three Months Ended March 31, 2018 2017 Available-for-sale securities: $ 11 $ 8 Gains on securities and other, net (1 ) — Interest income 10 8 Reclassification into earnings, before tax (3 ) (3 ) Income tax expense $ 7 $ 5 Reclassification into earnings, net Foreign currency translation: $ — $ 2 Other non-interest expenses $ — $ 2 Reclassification into earnings, net |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 12—EARNINGS PER SHARE The following table presents a reconciliation of basic and diluted earnings per common share (in millions, except share data and per share amounts): Three Months Ended March 31, 2018 2017 Net income $ 247 $ 145 Preferred stock dividends 12 13 Net income available to common shareholders $ 235 $ 132 Share data (in thousands): Basic weighted-average shares outstanding 266,558 274,876 Effect of weighted-average dilutive securities: Restricted stock and options 1,124 1,109 Convertible debentures 17 292 Diluted weighted-average shares outstanding (1) 267,699 276,277 Basic earnings per common share $ 0.88 $ 0.48 Diluted earnings per common share (1) $ 0.88 $ 0.48 (1) The amount of certain restricted stock and options excluded from the calculations of diluted earnings per share due to the anti-dilutive effect was not material for the three months ended March 31, 2018 and 2017. |
Regulatory Requirements
Regulatory Requirements | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY REQUIREMENTS | NOTE 13—REGULATORY REQUIREMENTS Broker-Dealer and FCM Capital Requirements The Company's US broker-dealer, E*TRADE Securities, is subject to the Uniform Net Capital Rule under the Securities Exchange Act of 1934 administered by the SEC and FINRA, which requires the maintenance of minimum net capital. The minimum net capital requirements can be met under either the Aggregate Indebtedness method or the Alternative method. Under the Aggregate Indebtedness method, a broker-dealer is required to maintain minimum net capital of the greater of 6 2/3% of its aggregate indebtedness, as defined, or a minimum dollar amount. E*TRADE Securities has elected the Alternative method, under which it is required to maintain net capital equal to the greater of $250,000 or 2% of aggregate debit balances arising from customer transactions. The Company’s international broker-dealer subsidiary is subject to capital requirements determined by its respective regulator. The Company's FCM, E*TRADE Futures, is subject to CFTC net capital requirements, including the maintenance of adjusted net capital equal to or in excess of the greater of (1) $1,000,000 , (2) the FCM's risk-based capital requirement, computed as 8% of the total risk margin requirements for all positions carried in customer and non-customer accounts, or (3) the amount of adjusted net capital required by the NFA. At March 31, 2018 and December 31, 2017 , all of the Company’s broker-dealer and FCM subsidiaries met minimum net capital requirements. The following table presents a summary of the minimum net capital requirements and excess capital for the Company’s broker-dealer and FCM subsidiaries (dollars in millions): Required Net Capital Net Capital Excess Net Capital March 31, 2018: E*TRADE Securities (1) $ 240 $ 1,283 $ 1,043 E*TRADE Futures 1 26 25 International broker-dealer — 19 19 Total $ 241 $ 1,328 $ 1,087 December 31, 2017: E*TRADE Securities $ 211 $ 1,213 $ 1,002 E*TRADE Futures 4 19 15 International broker-dealer — 19 19 Total $ 215 $ 1,251 $ 1,036 (1) E*TRADE Securities paid dividends of $125 million to the parent company during the three months ended March 31, 2018 and $100 million in May 2018. Bank Capital Requirements E*TRADE Financial and its bank subsidiaries, E*TRADE Bank and E*TRADE Savings Bank, are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can trigger certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial condition and results of operations of these entities. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, these entities must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, the Company's bank subsidiaries may not pay dividends to the parent company without the non-objection, or in certain cases the approval, of their regulators, and any loans by the bank subsidiaries to the parent company and its other non-bank subsidiaries are subject to various quantitative, arm’s length, collateralization and other requirements. The capital amounts and classifications of these entities are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require these entities to meet minimum Tier 1 leverage, common equity Tier 1 capital, Tier 1 risk-based capital and total risk-based capital ratios. Events beyond management's control, such as deterioration in credit markets, could adversely affect future earnings and their ability to meet future capital requirements. E*TRADE Financial, E*TRADE Bank and E*TRADE Savings Bank were categorized as "well capitalized" under the regulatory framework for prompt corrective action for the periods presented in the following table (dollars in millions): March 31, 2018 December 31, 2017 Actual Well Capitalized Minimum Capital Excess Capital Actual Well Capitalized Minimum Capital Excess Capital Amount Ratio Amount Ratio Amount Amount Ratio Amount Ratio Amount E*TRADE Financial (1) Tier 1 leverage $ 4,493 7.3 % $ 3,096 5.0 % $ 1,397 $ 4,386 7.4 % $ 2,976 5.0 % $ 1,410 Common equity Tier 1 capital $ 3,804 35.0 % $ 706 6.5 % $ 3,098 $ 3,773 33.9 % $ 722 6.5 % $ 3,051 Tier 1 risk-based capital $ 4,493 41.4 % $ 868 8.0 % $ 3,625 $ 4,386 39.5 % $ 889 8.0 % $ 3,497 Total risk-based capital $ 4,965 45.7 % $ 1,086 10.0 % $ 3,879 $ 4,874 43.8 % $ 1,111 10.0 % $ 3,763 E*TRADE Bank (1) Tier 1 leverage $ 3,793 7.6 % $ 2,498 5.0 % $ 1,295 $ 3,620 7.6 % $ 2,394 5.0 % $ 1,226 Common equity Tier 1 capital $ 3,793 37.4 % $ 659 6.5 % $ 3,134 $ 3,620 35.7 % $ 660 6.5 % $ 2,960 Tier 1 risk-based capital $ 3,793 37.4 % $ 811 8.0 % $ 2,982 $ 3,620 35.7 % $ 812 8.0 % $ 2,808 Total risk-based capital $ 3,851 38.0 % $ 1,013 10.0 % $ 2,838 $ 3,694 36.4 % $ 1,015 10.0 % $ 2,679 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,522 30.4 % $ 250 5.0 % $ 1,272 $ 904 26.6 % $ 170 5.0 % $ 734 Common equity Tier 1 capital $ 1,522 145.6 % $ 68 6.5 % $ 1,454 $ 904 111.1 % $ 53 6.5 % $ 851 Tier 1 risk-based capital $ 1,522 145.6 % $ 84 8.0 % $ 1,438 $ 904 111.1 % $ 65 8.0 % $ 839 Total risk-based capital $ 1,522 145.6 % $ 105 10.0 % $ 1,417 $ 905 111.2 % $ 81 10.0 % $ 824 (1) Basel III includes a capital conservation buffer that limits a banking organization’s ability to make capital distributions and discretionary bonus payments to executive officers if a banking organization fails to maintain a Common Equity Tier 1 capital conservation buffer of more than 2.5% , on a fully phased-in basis, of total risk-weighted assets above each of the following minimum risk-based capital ratio requirements: Common Equity Tier 1 capital ( 4.5% ), Tier 1 ( 6.0% ), and total risk-based capital ( 8.0% ). This requirement was effective beginning on January 1, 2016, and will be fully phased-in by 2019. See Part I. Item 1. Business—Regulation in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information. |
Commitments, Contingencies and
Commitments, Contingencies and Other Regulatory Matters | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS | NOTE 14—COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS The Company reviews its lawsuits, regulatory inquiries and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. The Company establishes an accrual for losses at management's best estimate when it assesses that it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company monitors these matters for developments that would affect the likelihood of a loss and the accrued amount, if any, and adjusts the amount as appropriate. Litigation Matters On October 27, 2000, Ajaxo, Inc. (Ajaxo) filed a complaint in the Superior Court for the State of California, County of Santa Clara. Ajaxo sought damages and certain non-monetary relief for the Company’s alleged breach of a non-disclosure agreement with Ajaxo pertaining to certain wireless technology that Ajaxo offered the Company as well as damages and other relief against the Company for their alleged misappropriation of Ajaxo’s trade secrets. Following a jury trial, a judgment was entered in 2003 in favor of Ajaxo against the Company for $1 million for breach of the Ajaxo non-disclosure agreement. The trial court subsequently denied Ajaxo’s requests for additional damages and relief following which Ajaxo appealed. Although the Company paid Ajaxo the full amount due on the above-described judgment, the case was remanded back to the trial court by the California Court of Appeal, and on May 30, 2008, a jury returned a verdict in favor of the Company denying all claims raised and demands for damages against the Company. After various appeals the case was again remanded back to the trial court. Following the third trial in this matter, in a Judgment and Statement of Decision filed September 16, 2015, the Court denied all claims for royalties by Ajaxo. Ajaxo’s post-trial motions were denied. Ajaxo has appealed to the Court of Appeal, Sixth District. The Company will continue to defend itself vigorously in this matter. On May 16, 2011, Droplets Inc., the holder of two patents pertaining to user interface servers, filed a complaint in the US District Court for the Eastern District of Texas against E*TRADE Financial Corporation, E*TRADE Securities, E*TRADE Bank and multiple other unaffiliated financial services firms. The plaintiff contends that the defendants engaged in patent infringement under federal law and seeks unspecified damages and an injunction against future infringements, plus royalties, costs, interest and attorneys’ fees. On March 28, 2012, a change of venue was granted and the case was transferred to the United States District Court for the Southern District of New York. The Company's motion for summary judgment on the grounds of non-infringement was granted by the US District Court in a Decision and Order dated March 9, 2015. All remaining claims are stayed pending resolution of issues on Droplet's remaining patents under review by the Patent Trial and Appeal Board (PTAB). After a hearing, the PTAB deemed Droplets’ putative '115 patent to be “unpatentable” on June 23, 2016. In a separate proceeding, the PTAB has also separately deemed Droplets’ putative '838 patent to be “unpatentable.” Droplets appealed to the Circuit Court of Appeals for the District of Columbia. The decision of the PTAB was affirmed on April 19, 2018. The Company will continue to defend itself vigorously in this matter. On March 26, 2015, a putative class action was filed in the US District Court for the Northern District of California by Ty Rayner, on behalf of himself and all others similarly situated, naming E*TRADE Financial Corporation and E*TRADE Securities as defendants. The complaint alleges that E*TRADE breached a fiduciary duty and unjustly enriched itself in connection with the routing of its customers’ orders to various market-makers and exchanges. The plaintiff seeks unspecified damages, declaratory relief, restitution, disgorgement of payments received by the Company, and attorneys’ fees. On April 2, 2017, the District Court dismissed the complaint in Rayner. The plaintiffs in Rayner appealed and the oral argument was heard by the Second Court of Appeals on December 7, 2017. The Company will continue to defend itself vigorously in these matters. On July 23, 2016, a putative class action was filed in the US District Court for the Southern District of New York by Craig L. Schwab, on behalf of himself and others similarly situated, naming E*TRADE Financial Corporation, E*TRADE Securities, and former Company executives as defendants. The complaint alleges that E*TRADE violated federal securities laws in connection with the routing of its customers’ orders to various market-makers and exchanges. The plaintiff seeks unspecified damages, declaratory relief, restitution, disgorgement of payments received by the Company, and attorneys’ fees. By stipulation both matters are now venued in the Southern District of New York. On July 10, 2017 the Court dismissed the Schwab claims without prejudice. The plaintiff in Schwab filed a third amended complaint on August 9, 2017, which E*TRADE moved to dismiss. On January 22, 2018, the Court dismissed all claims with prejudice. Plaintiffs have appealed. The Company will continue to defend itself vigorously in these matters. In addition to the matters described above, the Company is subject to various legal proceedings and claims that arise in the normal course of business. In each pending matter, the Company contests liability or the amount of claimed damages. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases where claimants seek substantial or indeterminate damages, or where investigation or discovery have yet to be completed, the Company is unable to estimate a range of reasonably possible losses on its remaining outstanding legal proceedings; however, the Company believes any losses, both individually or in the aggregate, would not be reasonably likely to have a material adverse effect on the consolidated financial condition or results of operations of the Company. An unfavorable outcome in any matter could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, even if the ultimate outcomes are resolved in the Company’s favor, the defense of such litigation could entail considerable cost or the diversion of the efforts of management, either of which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. Regulatory Matters The securities, futures, foreign currency and banking industries are subject to extensive regulation under federal, state and applicable international laws. From time to time, the Company has been threatened with or named as a defendant in lawsuits, arbitrations and administrative claims involving securities, banking and other matters. The Company is also subject to periodic regulatory examinations and inspections. Compliance and trading problems that are reported to regulators, such as the SEC, FINRA, NASDAQ, CFTC, NFA, FDIC, Federal Reserve Bank of Richmond, OCC, or the Consumer Financial Protection Bureau by dissatisfied customers or others are investigated by such regulators, and may, if pursued, result in formal claims being filed against the Company by customers or disciplinary action being taken against the Company or its employees by regulators. Any such claims or disciplinary actions that are decided against the Company could have a material impact on the financial results of the Company or any of its subsidiaries. Insurance The Company maintains insurance coverage that management believes is reasonable and prudent. The principal insurance coverage it maintains covers commercial general liability; property damage; hardware/software damage; cyber liability; directors and officers; employment practices liability; certain criminal acts against the Company; and errors and omissions. The Company believes that such insurance coverage is adequate for the purpose of its business. The Company’s ability to maintain this level of insurance coverage in the future, however, is subject to the availability of affordable insurance in the marketplace. Commitments In the normal course of business, the Company makes various commitments to extend credit and incur contingent liabilities that are not reflected in the consolidated balance sheet. Significant changes in the economy or interest rates may influence the impact that these commitments and contingencies have on the Company in the future. The Company’s equity method, cost method and other investments are generally limited liability investments in partnerships, companies and other similar entities, including tax credit partnerships and community development entities, which are not required to be consolidated. The Company had $95 million in unfunded commitments with respect to these investments at March 31, 2018 . At March 31, 2018 , the Company had $19 million of certificates of deposit scheduled to mature in less than one year. Guarantees In prior periods when the Company sold loans, the Company provided guarantees to investors purchasing mortgage loans, which are considered standard representations and warranties within the mortgage industry. The primary guarantees are that: the mortgage and the mortgage note have been duly executed and each is the legal, valid and binding obligation of the Company, enforceable in accordance with its terms; the mortgage has been duly acknowledged and recorded and is valid; and the mortgage and the mortgage note are not subject to any right of rescission, set-off, counterclaim or defense, including, without limitation, the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been asserted with respect thereto. The Company is responsible for the guarantees on loans sold. If these claims prove to be untrue, the investor can require the Company to repurchase the loan and return all loan purchase and servicing release premiums. Management does not believe the potential liability exposure will have a material impact on the Company’s results of operations, cash flows or financial condition due to the nature of the standard representations and warranties, which have resulted in a minimal amount of loan repurchases. Prior to 2008, ETBH raised capital through the formation of trusts, which sold TRUPs in the capital markets. The capital securities must be redeemed in whole at the due date, which is generally 30 years after issuance. Each trust issued TRUPs at par, with a liquidation amount of $1,000 per capital security. The trusts used the proceeds from the sale of issuances to purchase subordinated debentures issued by ETBH. During the 30-year period prior to the redemption of the TRUPs, ETBH guarantees the accrued and unpaid distributions on these securities, as well as the redemption price of the securities and certain costs that may be incurred in liquidating, terminating or dissolving the trusts (all of which would otherwise be payable by the trusts). At March 31, 2018 , management estimated that the maximum potential liability under this arrangement, including the current carrying value of the trusts, was equal to $416 million or the total face value of these securities plus accrued interest payable, which may be unpaid at the termination of the trust arrangement. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15—SUBSEQUENT EVENT Acquisition of Trust Company of America On April 9, 2018, the Company completed its previously announced acquisition of TCA for total consideration of $275 million in cash. TCA is a leading provider of technology solutions and custody services to the independent RIA market. The acquisition is expected to benefit the Company as the RIA portion of our industry is growing and the Company expects to leverage the E*TRADE brand to accelerate growth. The Company also expects this acquisition to help bolster the Company's ability to retain customers in need of specialized customer service engagement. The operating results of the Company for the three months ended March 31, 2018 do not include the operating results related to TCA as the acquisition did not close until April 9, 2018. The initial accounting for the TCA acquisition has not been completed as of issuance date of these financial statements because the fair value measurement of assets acquired, liabilities assumed and goodwill has not yet been finalized. The Company expects to finalize the valuation and complete the purchase price allocation as soon as practicable but no later than one year from the acquisition date. |
Organization, Basis of Presen23
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization E*TRADE Financial Corporation is a financial services company that provides brokerage and related products and services primarily to individual retail investors under the brand "E*TRADE Financial." The Company also provides investor-focused banking products, primarily sweep deposits, to retail investors. |
Basis of Accounting | Basis of Presentation The condensed consolidated financial statements, also referred to herein as the consolidated financial statements, include the accounts of the Company and its majority-owned subsidiaries as determined under the voting interest model. Entities in which the Company has the ability to exercise significant influence but in which the Company does not possess control are generally accounted for by the equity method. Entities in which the Company does not have the ability to exercise significant influence are generally carried at cost, or, to the extent that a readily determinable fair value is available, at fair value through net income. The Company also evaluates its initial and continuing involvement with certain entities to determine if the Company is required to consolidate the entities under the variable interest entity (VIE) model. This evaluation is based on a qualitative assessment of whether the Company is the primary beneficiary of the VIE, which requires the Company to possess both: 1) the power to direct the activities that most significantly impact the economic performance of the VIE; and 2) the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. The consolidated financial statements do not include any consolidated VIEs for all periods presented. The Company's consolidated financial statements are prepared in accordance with GAAP. Intercompany accounts and transactions are eliminated in consolidation. These consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Beginning January 1, 2018, the Company updated the presentation of the consolidated financial statements as follows: • On the consolidated balance sheet, deferred tax assets, net has been reclassified to other assets. The prior period has been reclassified to conform to the current period presentation. Deferred tax assets, net were $218 million and $251 million at March 31, 2018 and December 31, 2017, respectively. • On the consolidated balance sheet, publicly traded equity securities are presented within other assets as a result of the adoption of amended accounting guidance. The prior period has not been reclassified as the amended accounting guidance was adopted on a modified retrospective basis. Accordingly, publicly traded equity securities for the prior period are presented within available-for-sale securities. • On the consolidated statement of income, fair value hedging adjustments, previously referred to as hedge ineffectiveness, are included within net interest income as a result of the adoption of new accounting guidance. Prior period amounts have not been reclassified to current period presentation and continue to be reflected within gains on securities and other, net. Fair value hedging adjustments were expenses of $3 million and $1 million for the three months ended March 31, 2018 and March 31, 2017, respectively. |
Use of Estimates | Use of Estimates Preparing the Company's consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes for the periods presented. Actual results could differ from management’s estimates. Certain significant accounting policies are critical because they are based on estimates and assumptions that require complex and subjective judgments by management. Changes in these estimates or assumptions could materially impact the Company’s financial condition and results of operations. Material estimates in which management believes changes could reasonably occur include: allowance for loan losses, valuation of goodwill and acquired intangible assets and estimates of effective tax rates, deferred taxes and valuation allowance. |
New accounting pronouncements (policy) | Adoption of New Accounting Standards Revenue from Contracts with Customers In May 2014, the FASB amended the guidance on revenue from contracts with customers. The new standard outlines a single comprehensive model for entities to apply in accounting for revenue arising from contracts with customers. The Company's accounting for net interest income was not impacted by the new standard. The FASB issued supplemental amendments to the new standard to clarify certain guidance and to provide narrow scope improvements and practical expedients during 2016. The amended guidance became effective on January 1, 2018 and the Company adopted the guidance on a modified retrospective basis. This adoption did not have a material impact on the Company’s financial condition, results of operations or cash flows as the satisfaction of performance obligations under the new guidance is materially consistent with the Company's previous revenue recognition policies. Similarly, the amended guidance did not have a material impact on the recognition of costs incurred to obtain new contracts. For additional information on the Company's adoption of the amended guidance, see Note 2—Net Revenue . Classification and Measurement of Financial Instruments In January 2016, the FASB amended the accounting and disclosure guidance on the classification and measurement of financial instruments. Relevant changes in the amended guidance include the requirement that equity investments, excluding those accounted for under the equity method of accounting or those resulting in consolidation of the investee, be measured at fair value in the consolidated balance sheet with changes in fair value recognized in net income. The amended guidance became effective on January 1, 2018, and was applied on a modified retrospective basis. The adoption did not have a material impact on the Company’s financial condition, results of operations or cash flows as debt securities represent the majority of the Company's investment portfolio. Beginning January 1, 2018, publicly traded equity securities are presented within other assets on the consolidated balance sheet. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB amended the guidance on the presentation and classification of certain cash receipts and cash payments in the consolidated statement of cash flows to eliminate current diversity in practice. The new guidance became effective on January 1, 2018, and the retrospective transition method has been applied to each period presented. Among other changes, the Company will classify debt extinguishment costs within cash flows from financing activities. Classification of Restricted Cash In November 2016, the FASB amended the guidance on the presentation and classification of changes in restricted cash in the consolidated statement of cash flows to eliminate current diversity in practice. The amended guidance requires the consolidated statement of cash flows to explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash and restricted cash equivalents. The new guidance became effective on January 1, 2018 and has been applied using a retrospective transition method to each period presented. The Company concluded that cash required to be segregated under federal or other regulations is considered restricted cash and the segregated cash activity is now presented on the consolidated statement of cash flows. Clarifying the Definition of a Business In January 2017, the FASB amended the guidance to clarify the definition of a business in order to assist companies in the evaluation of whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The guidance, which became effective on January 1, 2018, did not change the Company's accounting conclusions for the TCA acquisition and is not expected to impact the Company's accounting conclusions for the acquisition of brokerage accounts from Capital One. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB amended the guidance to update the recognition and presentation of hedging relationships. Among other changes, the new guidance eases hedge documentation requirements and allows additional types of hedge accounting strategies. The Company early adopted this guidance beginning January 1, 2018. The Company applied the guidance on a modified retrospective basis, which resulted in a $7 million cumulative-effect adjustment to increase retained earnings and to decrease accumulated other comprehensive income. In addition, the guidance provided a one-time transition election to transfer certain debt securities from held-to-maturity to available-for-sale. The Company transferred agency mortgage-backed and agency debt securities with a fair value of $4.7 billion , and recognized a net pre-tax gain of $7 million within other comprehensive income. For additional information on the Company's adoption of the amended guidance, see Note 7—Derivative Instruments and Hedging Activities . Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In February 2018, the FASB amended the guidance to address certain income tax effects in accumulated other comprehensive income resulting from the federal tax reform enacted in 2017. The amended guidance provides an option to reclassify tax effects within accumulated other comprehensive income to retained earnings in the period in which the effect of the tax reform is recorded. The amendments are effective for fiscal years beginning after December 15, 2018, including interim periods. Early adoption is permitted. The Company adopted the amended guidance in the first quarter of 2018 and recorded a $14 million increase to retained earnings and a corresponding decrease to accumulated other comprehensive income. Premium Amortization on Purchased Callable Debt Securities In March 2017, the FASB amended the guidance on the amortization period for certain callable debt securities held at a premium. The amended guidance shortens the amortization period for these securities by requiring the premium to be amortized to the earliest call date. The guidance does not amend the accounting for securities held at a discount. The Company early adopted this guidance beginning January 1, 2018; however, a cumulative-effect adjustment to retained earnings was not required upon adoption as the Company did not hold any callable debt securities at a premium as of January 1, 2018. New Accounting Standards Not Yet Adopted Accounting for Leases In February 2016, the FASB amended the guidance on accounting for leases. The new standard requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all qualifying leases with terms of more than twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee remains substantially unchanged and depends on classification as a finance or operating lease. The new standard also requires quantitative and qualitative disclosures that provide information about the amounts related to leasing arrangements recorded in the consolidated financial statements. The new guidance will be effective for interim and annual periods beginning on January 1, 2019, and is required to be applied on a modified retrospective basis to the earliest period presented, which includes practical expedient options in certain circumstances. The Company is in the process of evaluating the new accounting guidance, which includes the assessment of whether certain executory contracts contain embedded leases. The Company has 30 regional financial centers and 8 corporate locations which are leased. The right of use asset and corresponding lease liability for these leases will be recognized on the Company's balance sheet upon adoption. Accounting for Credit Losses In June 2016, the FASB amended the accounting guidance on accounting for credit losses. The amended guidance requires measurement of all expected credit losses for financial instruments, including loans and debt securities, and other commitments to extend credit held at the reporting date. For financial assets measured at amortized cost, factors such as historical experience, current conditions, and reasonable and supportable forecasts will be used to estimate expected credit losses. The amended guidance will also change the manner in which credit losses are recognized on debt securities classified as available-for-sale. The new guidance will be effective for interim and annual periods beginning January 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the new accounting guidance on the Company's financial condition, results of operations and cash flows. The Company does not expect the amended accounting guidance to have as significant of an impact as it could have if the Company were originating or purchasing mortgage loans. The Company's evaluation contemplates the recent performance of the run-off legacy mortgage and consumer loan portfolio and the credit profile of the current investment securities portfolio; however, the impact of the new guidance will depend on the current and expected macroeconomic conditions and the nature and characteristics of financial assets held by the Company on the date of adoption. Simplifying the Test for Goodwill Impairment In January 2017, the FASB amended the guidance to simplify the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. The amended guidance requires the Company to perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized at the amount by which the carrying amount exceeds the fair value of the reporting unit; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Income tax effects resulting from any tax deductible goodwill should be considered when measuring the goodwill impairment loss, if applicable. The Company will still have the option to perform a qualitative assessment to conclude whether it is more likely than not that the carrying amount of the Company exceeds its fair value. The guidance will be effective for interim and annual periods beginning January 1, 2020, and must be applied prospectively. Early adoption is permitted. |
Net Revenue (Tables)
Net Revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenues [Abstract] | |
Interest Income and Interest Expense Disclosure | The following table presents the significant components of interest income and interest expense (dollars in millions): Three Months Ended March 31, 2018 2017 Interest income: Cash and equivalents $ 3 $ 2 Cash required to be segregated under federal or other regulations 3 3 Investment securities (1) 290 205 Margin receivables 103 66 Loans 33 43 Broker-related receivables and other 4 — Subtotal interest income 436 319 Other interest revenue (2) 32 22 Total interest income 468 341 Interest expense: Deposits (2 ) (1 ) Customer payables (1 ) (1 ) Broker-related payables and other (1 ) — Other borrowings (7 ) (5 ) Corporate debt (9 ) (14 ) Subtotal interest expense (20 ) (21 ) Other interest expense (3) (3 ) (1 ) Total interest expense (23 ) (22 ) Net interest income $ 445 $ 319 (1) For the three months ended March 31, 2018 , includes $3 million of net fair value hedging adjustments. See Note 7- Derivative Instruments and Hedging Activities for additional information. (2) Represents interest income on securities loaned. (3) Represents interest expense on securities borrowed. |
Disaggregation of Revenue [Table Text Block] | The following table presents the significant components of fees and service charges revenue (dollars in millions): Three Months Ended March 31, 2018 2017 Fees and service charges: Order flow revenue $ 47 $ 31 Money market funds and sweep deposits revenue 17 22 Mutual fund service fees 11 9 Advisor management fees 11 8 Foreign exchange revenue 8 8 Reorganization fees 3 3 Other fees and service charges 8 5 Total fees and service charges $ 105 $ 86 The following table presents the significant components of total net revenue (dollars in millions): Three Months Ended March 31, 2018 2017 Net interest income $ 445 $ 319 Commissions 137 127 Fees and service charges 105 86 Gains on securities and other, net 10 10 Other revenue 11 11 Total net revenue $ 708 $ 553 |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Inputs, Assets, Quantitative Information | The following table presents additional information about significant unobservable inputs used in the valuation of assets measured at fair value on a nonrecurring basis that were categorized in Level 3 of the fair value hierarchy: Unobservable Inputs Average Range March 31, 2018 Loans receivable: One- to four-family Appraised value $ 714,300 $250,000 - $1,750,000 Home equity Appraised value $ 274,400 $65,000 - $550,000 Real estate owned Appraised value $ 280,300 $31,500 - $750,000 December 31, 2017 Loans receivable: One- to four-family Appraised value $ 520,700 $60,000 - $1,200,000 Home equity Appraised value $ 317,300 $38,000 - $2,066,000 Real estate owned Appraised value $ 355,200 $4,500 - $2,000,000 |
Fair Value Measurements, Recurring and Nonrecurring | The following table presents the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total Fair Value March 31, 2018: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 23,418 $ — $ 23,418 Agency debentures — 869 — 869 US Treasuries — 439 — 439 Agency debt securities — 90 — 90 Municipal bonds — 19 — 19 Total available-for-sale securities — 24,835 — 24,835 Other assets: Derivative assets (1) — 4 — 4 Publicly traded equity securities (2) 7 — — 7 Total assets measured at fair value on a recurring basis (3) $ 7 $ 24,839 $ — $ 24,846 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 10 $ 10 Home equity — — 2 2 Total loans receivable — — 12 12 Other assets: Real estate owned — — 13 13 Total assets measured at fair value on a nonrecurring basis (4) $ — $ — $ 25 $ 25 (1) All derivative assets and liabilities were interest rate contracts at March 31, 2018 . Information related to derivative instruments is detailed in Note 7—Derivative Instruments and Hedging Activities . (2) Consists of investments in a mutual fund related to the Community Reinvestment Act. At March 31, 2018 these equity securities are included in other assets on the consolidated balance sheet as a result of the adoption of amended accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. (3) Assets measured at fair value on a recurring basis represented 39% of the Company’s total assets at March 31, 2018 . (4) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at March 31, 2018 , and for which a fair value measurement was recorded during the period. Level 1 Level 2 Level 3 Total Fair Value December 31, 2017: Recurring fair value measurements: Assets Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ — $ 19,195 $ — $ 19,195 Agency debentures — 966 — 966 US Treasuries — 458 — 458 Agency debt securities — 33 — 33 Municipal bonds — 20 — 20 Total debt securities — 20,672 — 20,672 Publicly traded equity securities 7 — — 7 Total available-for-sale securities 7 20,672 — 20,679 Receivables from brokers, dealers and clearing organizations: US Treasuries 300 — — 300 Other assets: Derivative assets (1) — 131 — 131 Total assets measured at fair value on a recurring basis (2) $ 307 $ 20,803 $ — $ 21,110 Liabilities Other liabilities: Derivative liabilities (1) $ — $ 14 $ — $ 14 Total liabilities measured at fair value on a recurring basis (2) $ — $ 14 $ — $ 14 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 22 $ 22 Home equity — — 13 13 Total loans receivable — — 35 35 Other assets: Loans held-for-sale — 17 — 17 Real estate owned — — 26 26 Total assets measured at fair value on a nonrecurring basis (3) $ — $ 17 $ 61 $ 78 (1) All derivative assets and liabilities were interest rate contracts at December 31, 2017 . Information related to derivative instruments is detailed in Note 7—Derivative Instruments and Hedging Activities . (2) Assets and liabilities measured at fair value on a recurring basis represented 33% and less than 1% of the Company’s total assets and total liabilities, respectively, at December 31, 2017 . (3) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at December 31, 2017 , and for which a fair value measurement was recorded during the period. |
Gains and Losses, Fair Value Measurements, Nonrecurring | The following table presents losses recognized on assets measured at fair value on a nonrecurring basis (dollars in millions): Three Months Ended March 31, 2018 2017 One- to four-family $ 1 $ 1 Home equity — 1 Total losses on loans receivable measured at fair value $ 1 $ 2 Losses on real estate owned measured at fair value $ — $ 1 |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not carried at fair value on the consolidated balance sheet (dollars in millions): March 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 498 $ 498 $ — $ — $ 498 Cash required to be segregated under federal or other regulations $ 472 $ 472 $ — $ — $ 472 Held-to-maturity securities: Agency mortgage-backed securities $ 17,482 $ — $ 17,120 $ — $ 17,120 Agency debentures 987 — 968 — 968 Agency debt securities 2,176 — 2,124 — 2,124 Other 12 — — 12 12 Total held-to-maturity securities $ 20,657 $ — $ 20,212 $ 12 $ 20,224 Margin receivables (1) $ 10,515 $ — $ 10,515 $ — $ 10,515 Loans receivable, net: One- to four-family $ 1,327 $ — $ — $ 1,391 $ 1,391 Home equity 991 — — 1,002 1,002 Consumer and other 188 — — 186 186 Total loans receivable, net (2) $ 2,506 $ — $ — $ 2,579 $ 2,579 Receivables from brokers, dealers and clearing organizations (1) $ 735 $ — $ 735 $ — $ 735 Other assets (1)(3) $ 21 $ — $ 21 $ — $ 21 Liabilities Deposits $ 42,902 $ — $ 42,901 $ — $ 42,901 Customer payables $ 8,947 $ — $ 8,947 $ — $ 8,947 Payables to brokers, dealers and clearing organizations $ 2,892 $ — $ 2,892 $ — $ 2,892 Other borrowings: FHLB advances $ 500 $ — $ 500 $ — $ 500 Trust preferred securities $ 410 $ — $ — $ 392 $ 392 Total other borrowings $ 910 $ — $ 500 $ 392 $ 892 Corporate debt $ 992 $ — $ 971 $ — $ 971 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, including the fully paid lending program, where the Company is permitted to sell or re-pledge the securities, was $14.1 billion at March 31, 2018. Of this amount, $5.5 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at March 31, 2018. (2) The carrying value of loans receivable, net includes the allowance for loan losses of $58 million and loans that are recorded at fair value on a nonrecurring basis at March 31, 2018 . (3) The $21 million in other assets at March 31, 2018 represents securities borrowing from customers under the fully paid lending program. December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 931 $ 931 $ — $ — $ 931 Cash required to be segregated under federal or other regulations $ 872 $ 872 $ — $ — $ 872 Held-to-maturity securities: Agency mortgage-backed securities $ 20,502 $ — $ 20,404 $ — $ 20,404 Agency debentures 710 — 708 — 708 Agency debt securities 2,615 — 2,595 — 2,595 Other 12 — — 12 12 Total held-to-maturity securities $ 23,839 $ — $ 23,707 $ 12 $ 23,719 Margin receivables (1) $ 9,071 $ — $ 9,071 $ — $ 9,071 Loans receivable, net: One- to four-family $ 1,417 $ — $ — $ 1,463 $ 1,463 Home equity 1,051 — — 1,055 1,055 Consumer and other 186 — — 187 187 Total loans receivable, net (2) $ 2,654 $ — $ — $ 2,705 $ 2,705 Receivables from brokers, dealers and clearing organizations (1) $ 878 $ — $ 878 $ — $ 878 Other assets (1)(3) $ 18 $ — $ 18 $ — $ 18 Liabilities Deposits $ 42,742 $ — $ 42,741 $ — $ 42,741 Customer Payables $ 9,449 $ — $ 9,449 $ — $ 9,449 Payables to brokers, dealers and clearing organizations $ 1,542 $ — $ 1,542 $ — $ 1,542 Other borrowings: FHLB advances $ 500 $ — $ 500 $ — $ 500 Trust preferred securities $ 410 $ — $ — $ 379 $ 379 Total other borrowings $ 910 $ — $ 500 $ 379 $ 879 Corporate debt $ 991 $ — $ 992 $ — $ 992 (1) The fair value of securities that the Company received as collateral in connection with margin receivables and securities borrowing activities, where the Company is permitted to sell or re-pledge the securities, was $12.8 billion at December 31, 2017. Of this amount, $3.2 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2017. (2) The carrying value of loans receivable, net includes the allowance for loan losses of $74 million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2017 . (3) The $18 million in other assets at December 31, 2017 represents securities borrowing from customers under the fully paid lending program. |
Offsetting Assets and Liabili26
Offsetting Assets and Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Offsetting Assets and Liabilities [Abstract] | |
Offsetting Assets and Liabilities [Table Text Block] | The following table presents information about the Company's derivative instruments, securities borrowing and securities lending transactions which are transacted under master agreements to enable the users of the Company’s consolidated financial statements to evaluate the potential effect of rights of set-off between these recognized assets and liabilities (dollars in millions): Gross Amounts Not Offset in the Consolidated Balance Sheet Gross Amounts of Recognized Assets and Liabilities Gross Amounts Offset in the Consolidated Balance Sheet Net Amounts Presented in the Consolidated Balance Sheet (1) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount March 31, 2018 Assets: Deposits paid for securities borrowed (2) $ 215 $ — $ 215 $ (174 ) $ (31 ) $ 10 Derivative assets (3) 4 — 4 — (2 ) 2 Total $ 219 $ — $ 219 $ (174 ) $ (33 ) $ 12 Liabilities: Deposits received for securities loaned (4) $ 2,840 $ — $ 2,840 $ (174 ) $ (2,531 ) $ 135 Total $ 2,840 $ — $ 2,840 $ (174 ) $ (2,531 ) $ 135 December 31, 2017 Assets: Deposits paid for securities borrowed (2) $ 759 $ — $ 759 $ (251 ) $ (483 ) $ 25 Total $ 759 $ — $ 759 $ (251 ) $ (483 ) $ 25 Liabilities: Deposits received for securities loaned (4) $ 1,373 $ — $ 1,373 $ (251 ) $ (1,004 ) $ 118 Derivative liabilities (5)(6) 5 — 5 — (5 ) — Total $ 1,378 $ — $ 1,378 $ (251 ) $ (1,009 ) $ 118 (1) The vast majority of the net amount of deposits paid for securities borrowed are reflected in the receivables from brokers, dealers and clearing organizations line item while the deposits paid for securities borrowed under the fully paid program are reflected in other assets. Derivative assets are reflected in the other assets line item in the consolidated balance sheet. Net amount of deposits received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheet. Derivative liabilities are reflected in the other liabilities line item in the consolidated balance sheet. (2) Included in the gross amounts of deposits paid for securities borrowed was $67 million and $347 million at March 31, 2018 and December 31, 2017 , respectively, transacted through a program with a clearing organization, which guarantees the return of cash to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (3) Collateral received included cash at March 31, 2018 . (4) Included in the gross amounts of deposits received for securities loaned was $2 billion and $821 million at March 31, 2018 and December 31, 2017 , respectively, transacted through a program with a clearing organization, which guarantees the return of securities to the Company. For presentation purposes, these amounts presented are based on the counterparties under the Company’s master securities loan agreements. (5) Excludes net accrued interest payable of $2 million at December 31, 2017 . (6) Collateral pledged included held-to-maturity securities at amortized cost at December 31, 2017 . |
Available-for-Sale and Held-t27
Available-for-Sale and Held-to-Maturity Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments Securities | The following table presents the amortized cost and fair value of available-for-sale and held-to-maturity securities (dollars in millions): Amortized Cost Gross Unrealized / Unrecognized Gains Gross Unrealized / Unrecognized Losses Fair Value March 31, 2018: Available-for-sale securities: (1) Agency mortgage-backed securities $ 23,781 $ 113 $ (476 ) $ 23,418 Agency debentures 854 24 (9 ) 869 US Treasuries 407 32 — 439 Agency debt securities 91 — (1 ) 90 Municipal bonds 19 — — 19 Total available-for-sale securities $ 25,152 $ 169 $ (486 ) $ 24,835 Held-to-maturity securities: (1) Agency mortgage-backed securities $ 17,482 $ 24 $ (386 ) $ 17,120 Agency debentures 987 — (19 ) 968 Agency debt securities 2,176 5 (57 ) 2,124 Other 12 — — 12 Total held-to-maturity securities $ 20,657 $ 29 $ (462 ) $ 20,224 December 31, 2017: Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ 19,395 $ 47 $ (247 ) $ 19,195 Agency debentures 939 39 (12 ) 966 US Treasuries 452 10 (4 ) 458 Agency debt securities 34 — (1 ) 33 Municipal bonds 20 — — 20 Total debt securities 20,840 96 (264 ) 20,672 Publicly traded equity securities (2) 7 — — 7 Total available-for-sale securities $ 20,847 $ 96 $ (264 ) $ 20,679 Held-to-maturity securities: Agency mortgage-backed securities $ 20,502 $ 95 $ (193 ) $ 20,404 Agency debentures 710 — (2 ) 708 Agency debt securities 2,615 15 (35 ) 2,595 Other 12 — — 12 Total held-to-maturity securities $ 23,839 $ 110 $ (230 ) $ 23,719 (1) Securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million were transferred from held-to-maturity securities to available-for-sale securities during the three months ended March 31, 2018, as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. Securities with a fair value of $1.2 billion were transferred from available-for-sale securities to held-to-maturity securities during the three months ended March 31, 2018 pursuant to an evaluation of our investment strategy and an assessment by management about our intent and ability to hold those particular securities until maturity. See Note 11—Shareholders' Equity for information on the impact to accumulated other comprehensive income. (2) Consists of investments in a mutual fund related to the Community Reinvestment Act. At March 31, 2018 these equity securities are included in other assets on the consolidated balance sheet as a result of the adoption of amended accounting guidance related to the classification and measurement of financial instruments. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Investments Classified by Contractual Maturity Date | The following table presents the contractual maturities of all available-for-sale and held-to-maturity debt securities (dollars in millions): March 31, 2018 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ — $ — Due within one to five years 998 978 Due within five to ten years 10,117 10,031 Due after ten years 14,037 13,826 Total available-for-sale debt securities $ 25,152 $ 24,835 Held-to-maturity debt securities: Due within one year $ 135 $ 135 Due within one to five years 1,509 1,491 Due within five to ten years 5,053 4,936 Due after ten years 13,960 13,662 Total held-to-maturity debt securities $ 20,657 $ 20,224 |
Schedule of Unrealized Loss on Investments | The following table presents the fair value and unrealized or unrecognized losses on available-for-sale and held-to-maturity securities, and the length of time that individual securities have been in a continuous unrealized or unrecognized loss position (dollars in millions): Less than 12 Months 12 Months or More Total Fair Value Unrealized / Unrecognized Losses Fair Value Unrealized / Unrecognized Losses Fair Value Unrealized / Unrecognized Losses March 31, 2018: Available-for-sale securities: Agency mortgage-backed securities $ 7,269 $ (118 ) $ 8,661 $ (358 ) $ 15,930 $ (476 ) Agency debentures 202 (2 ) 115 (7 ) 317 (9 ) Agency debt securities 48 — 22 (1 ) 70 (1 ) Municipal bonds — — 10 — 10 — Total temporarily impaired available-for-sale securities $ 7,519 $ (120 ) $ 8,808 $ (366 ) $ 16,327 $ (486 ) Held-to-maturity securities: Agency mortgage-backed securities $ 10,988 $ (234 ) $ 3,836 $ (152 ) $ 14,824 $ (386 ) Agency debentures 817 (16 ) 151 (3 ) 968 (19 ) Agency debt securities 582 (10 ) 1,206 (47 ) 1,788 (57 ) Total temporarily impaired held-to-maturity securities $ 12,387 $ (260 ) $ 5,193 $ (202 ) $ 17,580 $ (462 ) December 31, 2017: Available-for-sale securities: Debt securities: Agency mortgage-backed securities $ 4,638 $ (23 ) $ 8,027 $ (224 ) $ 12,665 $ (247 ) Agency debentures — — 283 (12 ) 283 (12 ) US Treasuries — — 147 (4 ) 147 (4 ) Agency debt securities 9 — 24 (1 ) 33 (1 ) Municipal bonds — — 11 — 11 — Publicly traded equity securities 7 — — — 7 — Total temporarily impaired available-for-sale securities $ 4,654 $ (23 ) $ 8,492 $ (241 ) $ 13,146 $ (264 ) Held-to-maturity securities: Agency mortgage-backed securities $ 9,982 $ (78 ) $ 4,906 $ (115 ) $ 14,888 $ (193 ) Agency debentures 597 (2 ) 9 — 606 (2 ) Agency debt securities 373 (3 ) 1,345 (32 ) 1,718 (35 ) Total temporarily impaired held-to-maturity securities $ 10,952 $ (83 ) $ 6,260 $ (147 ) $ 17,212 $ (230 ) |
Gains on Securities and Other, Net | The following table presents the components of gains on securities and other, net (dollars in millions): Three Months Ended March 31, 2018 2017 Gains on available-for-sale securities $ 11 $ 8 Equity method investment income (loss) and other (1) (1 ) 2 Gains on securities and other, net $ 10 $ 10 (1) Includes a loss of $1 million on hedge ineffectiveness for the three months ended March 31, 2017. Beginning January 1, 2018 fair value hedging adjustments are recognized within net interest income. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Loans Receivable, Net (Tables)
Loans Receivable, Net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Total Loans Receivable, Net | The following table presents loans receivable disaggregated by delinquency status (dollars in millions): Days Past Due Current 30-89 90-179 180+ Total Unamortized premiums, net Allowance for loans losses Loans Receivable, Net March 31, 2018 One- to four-family $ 1,192 $ 57 $ 17 $ 73 $ 1,339 $ 8 $ (20 ) $ 1,327 Home equity 947 34 15 30 1,026 — (35 ) 991 Consumer and other 186 2 1 — 189 2 (3 ) 188 Total loans receivable $ 2,325 $ 93 $ 33 $ 103 $ 2,554 $ 10 $ (58 ) $ 2,506 December 31, 2017 One- to four-family $ 1,269 $ 59 $ 22 $ 82 $ 1,432 $ 9 $ (24 ) $ 1,417 Home equity 1,014 36 15 32 1,097 — (46 ) 1,051 Consumer and other 185 3 — — 188 2 (4 ) 186 Total loans receivable $ 2,468 $ 98 $ 37 $ 114 $ 2,717 $ 11 $ (74 ) $ 2,654 |
Credit Quality Indicators for Loan Portfolio | The following tables present the distribution of the Company’s mortgage loan portfolios by credit quality indicator (dollars in millions): One- to Four-Family Home Equity Current LTV/CLTV (1) March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 <=80% $ 978 $ 1,031 $ 509 $ 531 80%-100% 221 256 273 291 100%-120% 91 91 158 176 >120% 49 54 86 99 Total mortgage loans receivable $ 1,339 $ 1,432 $ 1,026 $ 1,097 Average estimated current LTV/CLTV (2) 69 % 70 % 83 % 84 % Average LTV/CLTV at loan origination (3) 71 % 71 % 82 % 81 % (1) Current CLTV calculations for home equity loans are based on the maximum available line for HELOCs and outstanding principal balance for HEILs. For home equity loans in the second lien position, the original balance of the first lien loan at origination date and updated valuations on the property underlying the loan are used to calculate CLTV. Current property value estimates are updated on a quarterly basis. (2) The average estimated current LTV/CLTV ratio reflects the outstanding balance at the balance sheet date and the maximum available line for HELOCs, divided by the estimated current value of the underlying property. (3) Average LTV/CLTV at loan origination calculations are based on LTV/CLTV at time of purchase for one- to four-family purchased loans, HEILs and the maximum available line for HELOCs. One- to Four-Family Home Equity Current FICO March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 >=720 $ 749 $ 805 $ 509 $ 548 719 - 700 126 138 98 106 699 - 680 105 105 89 93 679 - 660 76 78 72 79 659 - 620 111 122 102 103 <620 172 184 156 168 Total mortgage loans receivable $ 1,339 $ 1,432 $ 1,026 $ 1,097 |
Loans by Delinquency Category and Non-Performing Loans | The following table presents nonperforming loans by loan portfolio (dollars in millions): March 31, 2018 December 31, 2017 One- to four-family $ 179 $ 192 Home equity 90 98 Consumer and other 1 — Total nonperforming loans receivable $ 270 $ 290 |
Loans Receivable, Allowance for Loan Losses | The following table presents a roll forward by loan portfolio of the allowance for loan losses (dollars in millions): Three Months Ended March 31, 2018 One- to Four-Family Home Equity Consumer and other Total Allowance for loan losses, beginning of period $ 24 $ 46 $ 4 $ 74 Provision (benefit) for loan losses (5 ) (16 ) — (21 ) Charge-offs — — (1 ) (1 ) Recoveries 1 5 — 6 Net (charge-offs) recoveries 1 5 (1 ) 5 Allowance for loan losses, end of period $ 20 $ 35 $ 3 $ 58 Three Months Ended March 31, 2017 One- to Four-Family Home Equity Consumer and other Total Allowance for loan losses, beginning of period $ 45 $ 171 $ 5 $ 221 Provision (benefit) for loan losses — (15 ) 1 (14 ) Charge-offs — — (2 ) (2 ) Recoveries 1 6 1 8 Net (charge-offs) recoveries 1 6 (1 ) 6 Allowance for loan losses, end of period $ 46 $ 162 $ 5 $ 213 The following table presents the allowance for loan losses by loan portfolio (dollars in millions): One- to Four-Family Home Equity Consumer and other Total March 31, December 31, 2017 March 31, December 31, 2017 March 31, December 31, March 31, December 31, 2017 General reserve: Quantitative component $ 11 $ 15 $ 5 $ 14 $ 3 $ 4 $ 19 $ 33 Qualitative component 3 3 2 3 — — 5 6 Specific valuation allowance 6 6 28 29 — — 34 35 Total allowance for loan losses $ 20 $ 24 $ 35 $ 46 $ 3 $ 4 $ 58 $ 74 Allowance as a % of loans (1) 1.5 % 1.6 % 3.4 % 4.2 % 1.8 % 2.1 % 2.3 % 2.7 % (1) Allowance as a percentage of loans receivable is calculated based on the gross loans receivable including net unamortized premiums for each respective category. The following table presents the total recorded investment in loans receivable and allowance for loan losses by loans that have been collectively evaluated for impairment and those that have been individually evaluated for impairment by loan portfolio (dollars in millions): Recorded Investment Allowance for Loan Losses March 31, December 31, March 31, December 31, 2018 2017 2018 2017 Collectively evaluated for impairment: One- to four-family $ 1,140 $ 1,228 $ 14 $ 18 Home equity 867 932 7 17 Consumer and other 191 190 3 4 Total collectively evaluated for impairment 2,198 2,350 24 39 Individually evaluated for impairment: One- to four-family 207 213 6 6 Home equity 159 165 28 29 Total individually evaluated for impairment 366 378 34 35 Total $ 2,564 $ 2,728 $ 58 $ 74 |
Impaired Financing Receivables | The following table presents a summary of the Company’s recorded investment in TDRs that were on accrual and nonaccrual status, further disaggregated by delinquency status, in addition to the recorded investment in TDRs (dollars in millions): Nonaccrual TDRs Accrual TDRs (1) Current (2) 30-89 Days Delinquent 90-179 Days Delinquent 180+ Days Delinquent Total Recorded Investment in TDRs (3)(4) March 31, 2018 One- to four-family $ 83 $ 74 $ 15 $ 5 $ 30 $ 207 Home equity 100 30 9 6 14 159 Total $ 183 $ 104 $ 24 $ 11 $ 44 $ 366 December 31, 2017 One- to four-family $ 83 $ 74 $ 13 $ 5 $ 38 $ 213 Home equity 104 34 10 4 13 165 Total $ 187 $ 108 $ 23 $ 9 $ 51 $ 378 (1) Represents loans modified as TDRs that are current and have made six or more consecutive payments. (2) Represents loans modified as TDRs that are current but have not yet made six consecutive payments, bankruptcy loans and certain junior lien TDRs that have a delinquent senior lien. (3) Total recorded investment in TDRs includes premium (discount), as applicable, and is net of charge-offs, which were $65 million and $140 million for one-to four-family and home equity loans, respectively, as of March 31, 2018 and $67 million and $144 million , respectively, as of December 31, 2017 . (4) Total recorded investment in TDRs at March 31, 2018 consisted of $277 million of loans modified as TDRs and $89 million of loans that have been charged off due to bankruptcy notification. Total recorded investment in TDRs at December 31, 2017 consisted of $285 million of loans modified as TDRs and $93 million of loans that have been charged off due to bankruptcy notification. The following table presents the average recorded investment and interest income recognized both on a cash and accrual basis for the Company’s TDRs (dollars in millions): Average Recorded Investment Interest Income Recognized Three Months Ended March 31, Three Months Ended March 31, 2018 2017 2018 2017 One- to four-family $ 210 $ 241 $ 2 $ 3 Home equity 165 192 4 4 Total $ 375 $ 433 $ 6 $ 7 The following table presents detailed information related to the Company’s TDRs and specific valuation allowances (dollars in millions): March 31, 2018 December 31, 2017 Recorded Investment in TDRs Specific Valuation Allowance Net Investment in TDRs Recorded Investment in TDRs Specific Valuation Allowance Net Investment in TDRs With a recorded allowance: One- to four-family $ 54 $ 6 $ 48 $ 54 $ 6 $ 48 Home equity $ 83 $ 28 $ 55 $ 83 $ 29 $ 54 Without a recorded allowance: (1) One- to four-family $ 153 $ — $ 153 $ 159 $ — $ 159 Home equity $ 76 $ — $ 76 $ 82 $ — $ 82 Total: One- to four-family $ 207 $ 6 $ 201 $ 213 $ 6 $ 207 Home equity $ 159 $ 28 $ 131 $ 165 $ 29 $ 136 (1) Represents loans where the discounted cash flow analysis or collateral value is equal to or exceeds the recorded investment in the loan. |
Troubled Debt Restructurings - Modifications | The following table presents the number of loans and post-modification balances immediately after being modified by major class (dollars in millions): Interest Rate Reduction Number of Loans Re-age/ Extension/ Interest Capitalization Other with Interest Rate Reduction Other (1) Total March 31, 2018 One- to four-family 16 $ 6 $ — $ 2 $ 8 Home equity 44 2 — — 2 Total 60 $ 8 $ — $ 2 $ 10 March 31, 2017 One- to four-family 8 $ 2 $ — $ — $ 2 Home equity 161 3 — 8 11 Total 169 $ 5 $ — $ 8 $ 13 (1) Amounts represent loans whose terms were modified in a manner that did not result in an interest rate reduction, including re-aged loans, extensions, and loans with capitalized interest. |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) - Fair Value Hedging [Member] | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Schedule of Fair Value Amounts of Derivatives Designated as Hedging Instruments | The following table presents a summary of the fair value of derivatives as reported in the consolidated balance sheet (dollars in millions): Fair Value Notional Asset (1) Liability (2) Net (3) March 31, 2018 Interest rate contracts: Fair value hedges $ 10,086 $ 4 $ — $ 4 Total derivatives designated as hedging instruments (4) $ 10,086 $ 4 $ — $ 4 December 31, 2017 Interest rate contracts: Fair value hedges $ 8,609 $ 131 $ (14 ) $ 117 Total derivatives designated as hedging instruments (4) $ 8,609 $ 131 $ (14 ) $ 117 (1) Reflected in the other assets line item on the consolidated balance sheet. (2) Reflected in the other liabilities line item on the consolidated balance sheet. (3) Represents net fair value of derivative instruments for disclosure purposes only. (4) All derivatives were designated as hedging instruments at March 31, 2018 and December 31, 2017 |
Schedule of Effect of Derivatives designated as Fair Value Hedges and Related Hedged Items | The following table presents the effects of fair value hedge accounting on the consolidated statement of income for the three months ended March 31, 2018 (dollars in millions): Interest Income Total interest income $ 468 Effects of fair value hedging on total interest income (1) Agency debentures: Amounts recognized as interest settlements on derivatives (2 ) Changes in fair value of hedged items (50 ) Changes in fair value of derivatives 49 Net loss on fair value hedging relationships - agency debentures (3 ) Agency mortgage backed securities: Amounts recognized as interest settlements on derivatives (13 ) Amortization of basis adjustments from discontinued hedges 2 Changes in fair value of hedged items (231 ) Changes in fair value of derivatives 229 Net loss on fair value hedging relationships - agency mortgage backed securities (13 ) Total net loss on fair value hedging relationships $ (16 ) (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. The following table presents the changes in fair value of interest rate derivative contracts designated as fair value hedges and related hedged items as reflected in the consolidated statement of income for the three months ended March 31, 2017 (dollars in millions): Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Agency debentures $ 11 $ (11 ) $ — Agency mortgage-backed securities 13 (14 ) (1 ) Total gains (losses) included in earnings $ 24 $ (25 ) $ (1 ) (1) Reflected in the gains on securities and other, net line item on the consolidated statement of income. |
CumulativeBasisAdjustmentsFairValueHedges [Table Text Block] | The following table presents the cumulative basis adjustments related to the carrying amount of hedged assets in fair value hedging relationships (dollars in millions): Cumulative Amount of Fair Value Hedging Basis Adjustment Included in Carrying Amount of Hedged Assets (2) Carrying Amount of Hedged Assets (1) Total Discontinued March 31, 2018 Available-for-sale securities $ 12,090 $ (320 ) $ (215 ) (1) The carrying amount includes the impact of basis adjustments on active fair value hedges and the impact of basis adjustments from previously discontinued fair value hedges. |
HedgingRelationshipsDesignatedUnderLastOfLayer [Table Text Block] | The following table presents the hedging relationships designated under the last-of-layer method (dollars in millions): Carrying Amount of Hedged Assets (1) Amount Representing Hedged Items Designated as Last-of-Layer Basis Adjustment Associated with Hedged Items Designated as Last-of-Layer (2) March 31, 2018 Fair value hedges under last-of-layer Hedged item (3) $ 910 $ 440 $ 1 (1) The carrying amount includes the impact of basis adjustments on active fair value hedges. (2) Represents the increase (decrease) to the carrying amount of hedged assets. (3) Represents closed portfolios of prepayable securities designated in hedging relationships in which the hedged item is the last layer of principal expected to be remaining throughout the hedge term. |
Deposits (Tables)
Deposits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Deposits [Abstract] | |
Deposit Liabilities, Type | The following table presents the significant components of deposits (dollars in millions): Amount Weighted-Average Rate March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Sweep deposits $ 37,927 $ 37,734 0.07 % 0.01 % Savings deposits 2,797 2,912 0.01 % 0.01 % Other deposits (1) 2,178 2,096 0.02 % 0.03 % Total deposits $ 42,902 $ 42,742 0.07 % 0.01 % (1) Includes checking deposits, money market deposits and certificates of deposit. As of March 31, 2018 and December 31, 2017 , the Company had $214 million and $207 million in non-interest bearing deposits, respectively. |
Other Borrowings (Tables)
Other Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Borrowings Disclosure [Abstract] | |
Schedule of Maturities Summary of Other Borrowings | The following table presents the significant components of other borrowings (dollars in millions): March 31, 2018 December 31, 2017 FHLB advances $ 500 $ 500 Trust preferred securities (1) 410 410 Total other borrowings $ 910 $ 910 (1) Trust preferred securities begin maturing in 2031. |
Corporate Debt (Tables)
Corporate Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Corporate Debt Instruments | The following table presents the significant components of corporate debt (dollars in millions): Face Value Discount Net March 31, 2018 Interest-bearing notes: 2.95% Notes, due 2022 $ 600 $ (4 ) $ 596 3.80% Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (8 ) $ 992 December 31, 2017 Interest-bearing notes: 2.95% Notes, due 2022 $ 600 $ (5 ) $ 595 3.80% Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (9 ) $ 991 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Stock by Class | The following table presents the preferred stock outstanding (in millions except total shares outstanding and per share data): Carrying Value at Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share March 31, 2018 December 31, 2017 Series A Fixed-to-Floating Rate Non-Cumulative 8/25/2016 5.875% to, but excluding, 9/15/2026; 3-mo LIBOR + 4.435% thereafter 400,000 $ 1,000 $ 394 $ 394 Series B Fixed-to-Floating Rate Non-Cumulative 12/6/2017 5.30% to, but excluding, 3/15/2023; 3-mo LIBOR + 3.16% thereafter 3,000 $ 100,000 295 295 Total 403,000 $ 689 $ 689 |
Dividends Declared and Paid | The following table presents the cash dividend paid on preferred stock (in millions except per share data): Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Declaration Date Record Date Payment Date Dividend per Share Dividend Paid Series A (1) 2/8/2018 2/28/2018 3/15/2018 $ 29.38 $ 12 2/2/2017 2/28/2017 3/15/2017 $ 32.64 $ 13 (1) Dividends are non-cumulative and payable semi-annually. |
Schedule of Accumulated Other Comprehensive Loss | The following tables present after-tax changes in each component of accumulated other comprehensive loss (dollars in millions): Total (1) Balance, December 31, 2017 $ (26 ) Other comprehensive loss before reclassifications (128 ) Amounts reclassified from accumulated other comprehensive loss (7 ) Transfer of held-to-maturity securities to available-for-sale securities (2) 6 Net change (129 ) Cumulative effect of hedge accounting adoption (7 ) Reclassification of tax effects due to federal tax reform (14 ) Balance, March 31, 2018 (3) $ (176 ) (1) During the three month ended March 31, 2018, the accumulated other comprehensive loss activity related to available-for-sale securities. (2) Securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million , or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities during the three months ended March 31, 2018, as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. (3) Includes unamortized unrealized pre-tax losses of $24 million at March 31, 2018 of which $18 million is related to the transfer of available-for-sale securities to held-to-maturity securities during the three months ended March 31, 2018. Available-for-Sale Securities Foreign Currency Translation Total Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) Other comprehensive income before reclassifications 46 — 46 Amounts reclassified from accumulated other comprehensive loss (5 ) (2 ) (7 ) Net change 41 (2 ) 39 Balance, March 31, 2017 $ (98 ) $ — $ (98 ) |
Components of Other Comprehensive Income (Loss) | The following table presents other comprehensive income (loss) activity and the related tax effect (dollars in millions): Three Months Ended March 31, 2018 2017 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive income (loss) Available-for-sale securities: Unrealized gains (losses), net $ (172 ) $ 44 $ (128 ) $ 76 $ (30 ) $ 46 Reclassification into earnings, net (10 ) 3 (7 ) (8 ) 3 (5 ) Transfer of held-to-maturity securities to available-for-sale securities 7 (1 ) 6 — — — Net change from available-for-sale securities (175 ) 46 (129 ) 68 (27 ) 41 Reclassification of foreign currency translation gains — — — (2 ) — (2 ) Other comprehensive income (loss) $ (175 ) $ 46 $ (129 ) $ 66 $ (27 ) $ 39 |
Reclassification out of Accumulated Other Comprehensive Loss | The following table presents the consolidated statement of income line items impacted by reclassifications out of accumulated other comprehensive loss (dollars in millions): Accumulated Other Comprehensive Loss Components Amounts Reclassified from Accumulated Other Comprehensive Loss Affected Line Items in the Consolidated Statement of Income Three Months Ended March 31, 2018 2017 Available-for-sale securities: $ 11 $ 8 Gains on securities and other, net (1 ) — Interest income 10 8 Reclassification into earnings, before tax (3 ) (3 ) Income tax expense $ 7 $ 5 Reclassification into earnings, net Foreign currency translation: $ — $ 2 Other non-interest expenses $ — $ 2 Reclassification into earnings, net |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following table presents a reconciliation of basic and diluted earnings per common share (in millions, except share data and per share amounts): Three Months Ended March 31, 2018 2017 Net income $ 247 $ 145 Preferred stock dividends 12 13 Net income available to common shareholders $ 235 $ 132 Share data (in thousands): Basic weighted-average shares outstanding 266,558 274,876 Effect of weighted-average dilutive securities: Restricted stock and options 1,124 1,109 Convertible debentures 17 292 Diluted weighted-average shares outstanding (1) 267,699 276,277 Basic earnings per common share $ 0.88 $ 0.48 Diluted earnings per common share (1) $ 0.88 $ 0.48 (1) The amount of certain restricted stock and options excluded from the calculations of diluted earnings per share due to the anti-dilutive effect was not material for the three months ended March 31, 2018 and 2017. |
Regulatory Requirements (Tables
Regulatory Requirements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Schedule Of Subsidiary Compliance With Regulatory Capital Requirements | The following table presents a summary of the minimum net capital requirements and excess capital for the Company’s broker-dealer and FCM subsidiaries (dollars in millions): Required Net Capital Net Capital Excess Net Capital March 31, 2018: E*TRADE Securities (1) $ 240 $ 1,283 $ 1,043 E*TRADE Futures 1 26 25 International broker-dealer — 19 19 Total $ 241 $ 1,328 $ 1,087 December 31, 2017: E*TRADE Securities $ 211 $ 1,213 $ 1,002 E*TRADE Futures 4 19 15 International broker-dealer — 19 19 Total $ 215 $ 1,251 $ 1,036 (1) E*TRADE Securities paid dividends of $125 million to the parent company during the three months ended March 31, 2018 and $100 million in May 2018. |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | E*TRADE Financial, E*TRADE Bank and E*TRADE Savings Bank were categorized as "well capitalized" under the regulatory framework for prompt corrective action for the periods presented in the following table (dollars in millions): March 31, 2018 December 31, 2017 Actual Well Capitalized Minimum Capital Excess Capital Actual Well Capitalized Minimum Capital Excess Capital Amount Ratio Amount Ratio Amount Amount Ratio Amount Ratio Amount E*TRADE Financial (1) Tier 1 leverage $ 4,493 7.3 % $ 3,096 5.0 % $ 1,397 $ 4,386 7.4 % $ 2,976 5.0 % $ 1,410 Common equity Tier 1 capital $ 3,804 35.0 % $ 706 6.5 % $ 3,098 $ 3,773 33.9 % $ 722 6.5 % $ 3,051 Tier 1 risk-based capital $ 4,493 41.4 % $ 868 8.0 % $ 3,625 $ 4,386 39.5 % $ 889 8.0 % $ 3,497 Total risk-based capital $ 4,965 45.7 % $ 1,086 10.0 % $ 3,879 $ 4,874 43.8 % $ 1,111 10.0 % $ 3,763 E*TRADE Bank (1) Tier 1 leverage $ 3,793 7.6 % $ 2,498 5.0 % $ 1,295 $ 3,620 7.6 % $ 2,394 5.0 % $ 1,226 Common equity Tier 1 capital $ 3,793 37.4 % $ 659 6.5 % $ 3,134 $ 3,620 35.7 % $ 660 6.5 % $ 2,960 Tier 1 risk-based capital $ 3,793 37.4 % $ 811 8.0 % $ 2,982 $ 3,620 35.7 % $ 812 8.0 % $ 2,808 Total risk-based capital $ 3,851 38.0 % $ 1,013 10.0 % $ 2,838 $ 3,694 36.4 % $ 1,015 10.0 % $ 2,679 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,522 30.4 % $ 250 5.0 % $ 1,272 $ 904 26.6 % $ 170 5.0 % $ 734 Common equity Tier 1 capital $ 1,522 145.6 % $ 68 6.5 % $ 1,454 $ 904 111.1 % $ 53 6.5 % $ 851 Tier 1 risk-based capital $ 1,522 145.6 % $ 84 8.0 % $ 1,438 $ 904 111.1 % $ 65 8.0 % $ 839 Total risk-based capital $ 1,522 145.6 % $ 105 10.0 % $ 1,417 $ 905 111.2 % $ 81 10.0 % $ 824 (1) Basel III includes a capital conservation buffer that limits a banking organization’s ability to make capital distributions and discretionary bonus payments to executive officers if a banking organization fails to maintain a Common Equity Tier 1 capital conservation buffer of more than 2.5% , on a fully phased-in basis, of total risk-weighted assets above each of the following minimum risk-based capital ratio requirements: Common Equity Tier 1 capital ( 4.5% ), Tier 1 ( 6.0% ), and total risk-based capital ( 8.0% ). This requirement was effective beginning on January 1, 2016, and will be fully phased-in by 2019. See Part I. Item 1. Business—Regulation in our Annual Report on Form 10-K for the year ended December 31, 2017 for additional information. |
Organization, Basis of Presen36
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Basis of Presentation [Abstract] | |||
Deferred tax assets, net | $ 218 | $ 251 | |
Gain (Loss) on Interest Rate Fair Value Hedge Adjustment | (3) | $ (1) | |
Cumulative effect of accounting adoption | 3 | ||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | $ 7 | 0 | |
Prospective Adoption of New Accounting Pronouncements [Abstract] | |||
Number of regional branches | 30 | ||
Number of corporate locations | 8 | ||
Retained Earnings | |||
Cumulative effect of accounting adoption | $ 3 | ||
Reclassification of tax effects due to federal tax reform | $ 14 | ||
Hedge accounting adoption | |||
Fair value of agency securities transferred | 4,700 | ||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | ||
Hedge accounting adoption | Retained Earnings | |||
Cumulative effect of accounting adoption | $ 7 |
Net Revenue Net Revenue (Detail
Net Revenue Net Revenue (Details - Total Revenue) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 708 | $ 553 |
Net interest income [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 445 | 319 |
Commissions [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 137 | 127 |
Fees and service charges [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 105 | 86 |
Gains on securities and other net [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10 | 10 |
Other revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 11 | $ 11 |
Net Revenue (Details - Interest
Net Revenue (Details - Interest Income and Interest Expense) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest income: | ||
Cash and equivalents | $ 3 | $ 2 |
Cash required to be segregated under federal or other regulations | 3 | 3 |
Investment securities(1) | 290 | 205 |
Margin receivables | 103 | 66 |
Loans | 33 | 43 |
Broker-related receivables and other | 4 | 0 |
Subtotal interest income | 436 | 319 |
Other interest revenue(2) | 32 | 22 |
Total interest income | 468 | 341 |
Interest expense: | ||
Deposits | (2) | (1) |
Customer payables | (1) | (1) |
Broker-related payables and other | (1) | 0 |
Other borrowings | (7) | (5) |
Corporate debt | (9) | (14) |
Subtotal interest expense | (20) | (21) |
Other interest expense(3) | (3) | (1) |
Total interest expense | (23) | (22) |
Net interest income | 445 | 319 |
Gain (Loss) on Interest Rate Fair Value Hedge Adjustment | $ (3) | $ (1) |
Net Revenue Net Revenue (Deta39
Net Revenue Net Revenue (Details - Fees and Service Charges) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | $ 105 | $ 86 |
Order flow revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 47 | 31 |
Money market funds and sweep deposits revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 17 | 22 |
Mutual fund service fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 11 | 9 |
Advisor management fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 11 | 8 |
Foreign exchange revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 8 | 8 |
Reorganization fees [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | 3 | 3 |
Other fees and service charges [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total fees and service charges | $ 8 | $ 5 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details - Inputs) - Level 3 [Member] - Fair Value, Measurements, Nonrecurring [Member] - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Loans Receivable [Member] | One- To Four-Family [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | $ 714,300 | $ 520,700 |
Loans Receivable [Member] | One- To Four-Family [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 1,750,000 | 1,200,000 |
Loans Receivable [Member] | One- To Four-Family [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 250,000 | 60,000 |
Loans Receivable [Member] | Home Equity [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 274,400 | 317,300 |
Loans Receivable [Member] | Home Equity [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 550,000 | 2,066,000 |
Loans Receivable [Member] | Home Equity [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 65,000 | 38,000 |
Real Estate Owned [Member] | Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 280,300 | 355,200 |
Real Estate Owned [Member] | Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | 750,000 | 2,000,000 |
Real Estate Owned [Member] | Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Appraised Value | $ 31,500 | $ 4,500 |
Fair Value Disclosures (Detai41
Fair Value Disclosures (Details - Recurring and Nonrecurring) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | $ 24,835 | ||
Available-for-sale securities | $ 24,835 | $ 20,679 | |
Assets measured at fair value on recurring basis percentage of total assets | 39.00% | 33.00% | |
Fair Value, Transfers Between Level 1 and Level 2 and Level 3, Description and Policy (Textuals) [Abstract] | |||
Fair value, assets, Level 1 to Level 2 transfers, amount | $ 0 | $ 0 | |
Fair value, assets, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 2 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 2 to Level 1 transfers, amount | 0 | 0 | |
Fair value, assets, Level 1 to Level 3 transfers, amount | 0 | 0 | |
Fair value, assets, Level 3 to Level 1 transfers, amount | 0 | 0 | |
Fair value, assets, Level 2 to Level 3 transfers, amount | 0 | 0 | |
Fair value, assets, Level 3 to Level 2 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 1 to Level 3 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 3 to Level 1 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 2 to Level 3 transfers, amount | 0 | 0 | |
Fair value, liabilities, Level 3 to Level 2 transfers, amount | 0 | $ 0 | |
Less than [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Liabilities measured at fair value on recurring basis percentage of total liabilities | 1.00% | ||
Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 24,835 | $ 20,672 | |
Available-for-sale equity securities, fair value | 7 | ||
Available-for-sale securities | 20,679 | ||
Publicly traded equity securities | 7 | ||
US Treasuries | 300 | ||
Derivative assets | 4 | 131 | |
Total assets measured at fair value | 24,846 | 21,110 | |
Derivative liabilities | 14 | ||
Total liabilities measured at fair value | 14 | ||
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 12 | 35 | |
Loans held-for-sale | 17 | ||
Real estate owned | 13 | 26 | |
Total assets measured at fair value | 25 | 78 | |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale equity securities, fair value | 7 | ||
Available-for-sale securities | 7 | ||
Publicly traded equity securities | 7 | ||
US Treasuries | 300 | ||
Total assets measured at fair value | 7 | 307 | |
Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 24,835 | 20,672 | |
Available-for-sale securities | 20,672 | ||
Derivative assets | 4 | 131 | |
Total assets measured at fair value | 24,839 | 20,803 | |
Derivative liabilities | 14 | ||
Total liabilities measured at fair value | 14 | ||
Level 2 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Loans held-for-sale | 17 | ||
Total assets measured at fair value | 0 | 17 | |
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 12 | 35 | |
Real estate owned | 13 | 26 | |
Total assets measured at fair value | 25 | 61 | |
Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 1 | $ 2 | |
Real Estate Owned [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 0 | 1 | |
One- To Four-Family [Member] | Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 1 | 1 | |
One- To Four-Family [Member] | Loans Receivable [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 10 | 22 | |
One- To Four-Family [Member] | Loans Receivable [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 10 | 22 | |
Home Equity [Member] | Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 0 | $ 1 | |
Home Equity [Member] | Loans Receivable [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 2 | 13 | |
Home Equity [Member] | Loans Receivable [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 2 | 13 | |
Agency mortgage-backed securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 23,418 | 19,195 | |
Agency mortgage-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 23,418 | 19,195 | |
Agency mortgage-backed securities [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 23,418 | 19,195 | |
Agency Debentures [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 869 | 966 | |
Agency Debentures [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 869 | 966 | |
Agency Debentures [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 869 | 966 | |
US Treasury Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 439 | 458 | |
US Treasury Securities [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 439 | 458 | |
US Treasury Securities [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 439 | 458 | |
Agency Debt Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 90 | 33 | |
Agency Debt Securities [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 90 | 33 | |
Agency Debt Securities [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 90 | 33 | |
Municipal Bonds [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 19 | 20 | |
Municipal Bonds [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 19 | 20 | |
Municipal Bonds [Member] | Level 2 [Member] | Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | $ 19 | $ 20 |
Fair Value Disclosures (Detai42
Fair Value Disclosures (Details - Level 3) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Level 3 recurring assets | $ 0 | $ 0 |
Level 3 recurring liabilities | $ 0 | $ 0 |
Fair Value Disclosures (Detai43
Fair Value Disclosures (Details - FV of Financial Instruments) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | $ 498 | $ 931 | $ 998 | |
Cash required to be segregated under federal or other regulations | 472 | 872 | 1,876 | |
Total held-to-maturity securities | 20,657 | 23,839 | ||
Margin Receivables | 10,515 | 9,071 | ||
Total loans receivable, net | 2,506 | 2,654 | ||
Receivables from brokers, dealers and clearing organizations | 735 | 1,178 | ||
Deposits | 42,902 | 42,742 | ||
Customer Payables | 8,947 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 2,892 | 1,542 | ||
FHLB advances | 500 | 500 | ||
Trust preferred securities | 410 | 410 | ||
Other borrowings | 910 | 910 | ||
Allowance for loan losses | 58 | 74 | 213 | $ 221 |
Corporate debt | 992 | 991 | ||
Securities borrowed under fully paid lending program | 21 | |||
Margin Receivables Detail [Abstract] | ||||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value | 14,100 | 12,800 | ||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value of Securities Sold or Repledged | 5,500 | 3,200 | ||
Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 498 | 931 | ||
Cash required to be segregated under federal or other regulations | 472 | 872 | ||
Total held-to-maturity securities | 20,657 | 23,839 | ||
Margin Receivables | 10,515 | 9,071 | ||
Total loans receivable, net | 2,506 | 2,654 | ||
Receivables from brokers, dealers and clearing organizations | 735 | 878 | ||
Other assets | 21 | 18 | ||
Deposits | 42,902 | 42,742 | ||
Customer Payables | 8,947 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 2,892 | 1,542 | ||
FHLB advances | 500 | 500 | ||
Trust preferred securities | 410 | 410 | ||
Other borrowings | 910 | 910 | ||
Corporate debt | 992 | 991 | ||
Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 498 | 931 | ||
Cash required to be segregated under federal or other regulations | 472 | 872 | ||
Total held-to-maturity securities | 20,224 | 23,719 | ||
Margin Receivables | 10,515 | 9,071 | ||
Total loans receivable, net | 2,579 | 2,705 | ||
Receivables from brokers, dealers and clearing organizations | 735 | 878 | ||
Other assets | 21 | 18 | ||
Deposits | 42,901 | 42,741 | ||
Customer Payables | 8,947 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 2,892 | 1,542 | ||
FHLB advances | 500 | 500 | ||
Trust preferred securities | 392 | 379 | ||
Other borrowings | 892 | 879 | ||
Corporate debt | 971 | 992 | ||
One- To Four-Family [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,327 | 1,417 | ||
Allowance for loan losses | 20 | 24 | 46 | 45 |
One- To Four-Family [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,327 | 1,417 | ||
One- To Four-Family [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,391 | 1,463 | ||
Home Equity [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 991 | 1,051 | ||
Allowance for loan losses | 35 | 46 | 162 | 171 |
Home Equity [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 991 | 1,051 | ||
Home Equity [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,002 | 1,055 | ||
Consumer and other [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 188 | 186 | ||
Allowance for loan losses | 3 | 4 | $ 5 | $ 5 |
Consumer and other [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 188 | 186 | ||
Consumer and other [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 186 | 187 | ||
Agency mortgage-backed securities [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 17,482 | 20,502 | ||
Agency mortgage-backed securities [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 17,482 | 20,502 | ||
Agency mortgage-backed securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 17,120 | 20,404 | ||
Agency Debentures [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 987 | 710 | ||
Agency Debentures [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 987 | 710 | ||
Agency Debentures [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 968 | 708 | ||
Agency Debt Securities [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 2,176 | 2,615 | ||
Agency Debt Securities [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 2,176 | 2,615 | ||
Agency Debt Securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 2,124 | 2,595 | ||
Other Non-Agency Debt Securities [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | 12 | ||
Other Non-Agency Debt Securities [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | 12 | ||
Other Non-Agency Debt Securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | 12 | ||
Level 1 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 498 | 931 | ||
Cash required to be segregated under federal or other regulations | 472 | 872 | ||
Level 2 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 20,212 | 23,707 | ||
Margin Receivables | 10,515 | 9,071 | ||
Receivables from brokers, dealers and clearing organizations | 735 | 878 | ||
Other assets | 21 | 18 | ||
Deposits | 42,901 | 42,741 | ||
Customer Payables | 8,947 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 2,892 | 1,542 | ||
FHLB advances | 500 | 500 | ||
Other borrowings | 500 | 500 | ||
Corporate debt | 971 | 992 | ||
Level 2 [Member] | Agency mortgage-backed securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 17,120 | 20,404 | ||
Level 2 [Member] | Agency Debentures [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 968 | 708 | ||
Level 2 [Member] | Agency Debt Securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 2,124 | 2,595 | ||
Level 3 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | 12 | ||
Total loans receivable, net | 2,579 | 2,705 | ||
Trust preferred securities | 392 | 379 | ||
Other borrowings | 392 | 379 | ||
Level 3 [Member] | One- To Four-Family [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,391 | 1,463 | ||
Level 3 [Member] | Home Equity [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,002 | 1,055 | ||
Level 3 [Member] | Consumer and other [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 186 | 187 | ||
Level 3 [Member] | Other Non-Agency Debt Securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | $ 12 | $ 12 |
Offsetting Assets and Liabili44
Offsetting Assets and Liabilities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Offsetting Footnotes [Abstract] | ||
Securities Borrowed, Transacted Through Clearing Company | $ 67 | $ 347 |
Securities Loaned, Transacted Through Clearing Company | 2,000 | 821 |
Interest Payable Excluded From Gross Amounts of Derivatives | 2 | |
Derivative Asset, Fair Value, Amount Offset Against Collateral | 381 | 6 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 13 | 18 |
Offsetting Assets [Abstract] | ||
Securities Borrowed, Gross | 215 | 759 |
Securities Borrowed, Liability | 0 | 0 |
Securities Borrowed | 215 | 759 |
Securities Borrowed, Financial Instruments, Not Offset | (174) | (251) |
Securities Borrowed, Collateral Received | (31) | (483) |
Securities Borrowed, Amount Offset Against Collateral | 10 | 25 |
Derivative Asset, Fair Value, Gross Asset | 4 | |
Derivative Asset, Fair Value, Gross Liability | 0 | |
Derivative Asset, Fair Value, Amount Not Offset Against Collateral | 4 | |
Derivative Asset, Financial Instruments, Not Offset | 0 | |
Derivative Asset, Collateral Received | 2 | |
Derivative Asset, Fair Value, Offset Against Collateral, Net of Not Subject to Master Netting Arrangement, Policy Election | 2 | |
(Total Offsetting Assets) Securities Borrowed, Gross | 219 | 759 |
(Total Offsetting Assets) Securities Borrowed, Liability | 0 | 0 |
(Total Offsetting Assets) Securities Borrowed | 219 | 759 |
(Total Offsetting Assets) Securities Borrowed, Financial Instruments Not Offset | (174) | (251) |
(Total Offsetting Assets) Securities Borrowed, Collateral Received | (33) | (483) |
(Total Offsetting Assets) Securities Borrowed Net | 12 | 25 |
Offsetting Liabilities [Abstract] | ||
Securities Loaned, Gross | 2,840 | 1,373 |
Securities Loaned, Asset | 0 | 0 |
Securities Loaned | 2,840 | 1,373 |
Securities Loaned, Financial Instruments, Not Offset | (174) | (251) |
Securities Loaned, Collateral Pledged | (2,531) | (1,004) |
Securities Loaned, Amount Offset Against Collateral | 135 | 118 |
Derivative Liability, Fair Value, Gross Liability | 5 | |
Derivative Liability, Fair Value, Gross Asset | 0 | |
Derivative Liability | 5 | |
Derivative Liability, Financial Instruments, Not Offset | 0 | |
Derivative Liability, Collateral Pledged | (5) | |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 0 | |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Gross | 2,840 | 1,378 |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Asset | 0 | 0 |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned | 2,840 | 1,378 |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Financial Instruments Not Offset | (174) | (251) |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Collateral Pledged | (2,531) | (1,009) |
Derivative Liability, Securities Sold under Agreements to Resell, Securities Loaned, Amount Offset Against Collateral | $ 135 | $ 118 |
Available-for-Sale Securities (
Available-for-Sale Securities (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale securities, debt and equity securities, amortized cost basis | $ 20,847 | ||
Available-for-sale securities, debt and equity securities, accumulated gross unrealized gain, before tax | 96 | ||
Available-for-sale securities, debt and equity securities, accumulated gross unrealized loss, before tax | (264) | ||
Available-for-sale securities, debt and equity securities, fair value | $ 24,835 | 20,679 | |
Available-for-sale debt securities, amortized cost basis | 25,152 | ||
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 169 | ||
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (486) | ||
Available-for-sale debt securities, fair value | 24,835 | ||
Held-to-maturity securities, transferred security, at carrying value | 4,672 | $ 0 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | |
Transfer of available-for-sale securities to held-to-maturity | 1,161 | $ 0 | |
Debt Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 20,840 | ||
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 96 | ||
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (264) | ||
Available-for-sale debt securities, fair value | 20,672 | ||
Agency mortgage-backed securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 23,781 | 19,395 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 113 | 47 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (476) | (247) | |
Available-for-sale debt securities, fair value | 23,418 | 19,195 | |
Agency Debentures [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 854 | 939 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 24 | 39 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (9) | (12) | |
Available-for-sale debt securities, fair value | 869 | 966 | |
US Treasury Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 407 | 452 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 32 | 10 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | 0 | (4) | |
Available-for-sale debt securities, fair value | 439 | 458 | |
Agency Debt Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 91 | 34 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 0 | 0 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (1) | (1) | |
Available-for-sale debt securities, fair value | 90 | 33 | |
Municipal Bonds [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 19 | 20 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 0 | 0 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | 0 | 0 | |
Available-for-sale debt securities, fair value | $ 19 | 20 | |
Equity Securities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Available-for-sale equity securities, amortized cost basis | 7 | ||
Available-for-sale equity securities, accumulated gross unrealized gain, before tax | 0 | ||
Available-for-sale equity securities, accumulated gross unrealized loss, before tax | 0 | ||
Available-for-sale equity securities, fair value | $ 7 |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | $ 20,657 | $ 23,839 |
Held-to-maturity securities, gross unrecognized gains | 29 | 110 |
Held-to-maturity securities, gross unrecognized losses | (462) | (230) |
Held-to-maturity securities, fair value | 20,224 | 23,719 |
Agency mortgage-backed securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 17,482 | 20,502 |
Held-to-maturity securities, gross unrecognized gains | 24 | 95 |
Held-to-maturity securities, gross unrecognized losses | (386) | (193) |
Held-to-maturity securities, fair value | 17,120 | 20,404 |
Agency Debentures [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 987 | 710 |
Held-to-maturity securities, gross unrecognized gains | 0 | 0 |
Held-to-maturity securities, gross unrecognized losses | (19) | (2) |
Held-to-maturity securities, fair value | 968 | 708 |
Agency Debt Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 2,176 | 2,615 |
Held-to-maturity securities, gross unrecognized gains | 5 | 15 |
Held-to-maturity securities, gross unrecognized losses | (57) | (35) |
Held-to-maturity securities, fair value | 2,124 | 2,595 |
Other Non-Agency Debt Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 12 | 12 |
Held-to-maturity securities, fair value | $ 12 | $ 12 |
Available-for-Sale and Held-t47
Available-for-Sale and Held-to-Maturity Securities (Details - Maturity) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Available-for-Sale Securities, Debt Maturities [Abstract] | ||
Available-for-sale securities, due within one year, amortized cost | $ 0 | |
Available-for-sale securities, due within one to five years, amortized cost | 998 | |
Available-for-sale securities, due within five to ten years, amortized cost | 10,117 | |
Available-for-sale securities, due after ten years, amortized cost | 14,037 | |
Available-for-sale debt securities, amortized cost basis | 25,152 | |
Available-for-sale securities, due within one year, fair value | 0 | |
Available-for-sale securities, due within one to five years, fair value | 978 | |
Available-for-sale securities, due within five to ten years, fair value | 10,031 | |
Available-for-sale securities, due after ten years, fair value | 13,826 | |
Available-for-sale securities, fair value | 24,835 | |
Held-to-Maturity Securities, Debt Maturities [Abstract] | ||
Held-to-maturity securities, due within one year, amortized cost | 135 | |
Held-to-maturity securities, due within one to five years, amortized cost | 1,509 | |
Held-to-maturity securities, due within five to ten years, amortized cost | 5,053 | |
Held-to-maturity securities, due after ten years, amortized cost | 13,960 | |
Held-to-maturity securities, amortized cost | 20,657 | $ 23,839 |
Held-to-maturity securities, due within one year, fair value | 135 | |
Held-to-maturity securities, due within one to five years, fair value | 1,491 | |
Held-to-maturity securities, due within five to ten years, fair value | 4,936 | |
Held-to-maturity securities, due after ten years, fair value | 13,662 | |
Held-to-maturity securities, fair value | 20,224 | 23,719 |
Available-for-Sale Securities Pledged As Collateral (Textuals) [Abstract] | ||
Available-for-sale debt securities pledged as collateral | 470 | 352 |
Held-to-Maturity Securities Pledged As Collateral (Textuals) [Abstract] | ||
Held-to-maturity debt securities pledged as collateral | $ 4,800 | $ 5,500 |
Available-for-Sale and Held-t48
Available-for-Sale and Held-to-Maturity Securities (Details - OTTI) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 7,519 | $ 4,654 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 8,808 | 8,492 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 16,327 | 13,146 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (120) | (23) |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (366) | (241) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (486) | (264) |
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 12,387 | 10,952 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 5,193 | 6,260 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 17,580 | 17,212 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (260) | (83) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (202) | (147) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss | (462) | (230) |
Agency mortgage-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 7,269 | 4,638 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 8,661 | 8,027 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 15,930 | 12,665 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (118) | (23) |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (358) | (224) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (476) | (247) |
Agency Debentures [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 202 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 115 | 283 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 317 | 283 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (2) | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (7) | (12) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (9) | (12) |
US Treasury Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 147 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 147 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (4) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (4) | |
Agency Debt Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 48 | 9 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 22 | 24 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 70 | 33 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (1) | (1) |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (1) | (1) |
Municipal Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 10 | 11 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 10 | 11 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 0 | 0 |
Equity Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 7 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 7 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 0 | |
Agency mortgage-backed securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 10,988 | 9,982 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 3,836 | 4,906 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 14,824 | 14,888 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (234) | (78) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (152) | (115) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss | (386) | (193) |
Agency Debentures [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 817 | 597 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 151 | 9 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 968 | 606 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (16) | (2) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (3) | 0 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss | (19) | (2) |
Agency Debt Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 582 | 373 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 1,206 | 1,345 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | 1,788 | 1,718 |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (10) | (3) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (47) | (32) |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ (57) | $ (35) |
Available-for-Sale and Held-t49
Available-for-Sale and Held-to-Maturity Securities (Details - Other) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | ||
Net impairment | $ 0 | $ 0 |
Components of gains (losses) on securities and other, net | ||
Gains on available-for-sale securities | 11 | 8 |
Equity method investment income (loss) and other(1) | (1) | 2 |
Gains on securities and other, net | 10 | 10 |
Gain (Loss) on Interest Rate Fair Value Hedge Ineffectiveness | $ (3) | $ (1) |
Loans Receivable, Net (Details
Loans Receivable, Net (Details - Aging) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | $ 2,325 | $ 2,468 | ||
Total loans receivable | 2,554 | 2,717 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 10 | 11 | ||
Loans and Leases Receivable, Allowance | (58) | (74) | $ (213) | $ (221) |
Total loans receivable, net | 2,506 | 2,654 | ||
Loans Receivable, Net [Abstract] | ||||
Carrying value of loans transferred to held-for-sale | 17 | |||
Loans Pledged Federal Home Loan Bank | 2,100 | 2,200 | ||
Loans Pledged Federal Reserve Bank | 200 | 200 | ||
Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 93 | 98 | ||
Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 33 | 37 | ||
Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 103 | 114 | ||
One- To Four-Family [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 1,192 | 1,269 | ||
Total loans receivable | 1,339 | 1,432 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 8 | 9 | ||
Loans and Leases Receivable, Allowance | (20) | (24) | (46) | (45) |
Total loans receivable, net | 1,327 | 1,417 | ||
One- To Four-Family [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 57 | 59 | ||
One- To Four-Family [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 17 | 22 | ||
One- To Four-Family [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 73 | 82 | ||
Home Equity [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 947 | 1,014 | ||
Total loans receivable | 1,026 | 1,097 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 0 | 0 | ||
Loans and Leases Receivable, Allowance | (35) | (46) | (162) | (171) |
Total loans receivable, net | 991 | 1,051 | ||
Home Equity [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 34 | 36 | ||
Home Equity [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 15 | 15 | ||
Home Equity [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 30 | 32 | ||
Consumer and other [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 186 | 185 | ||
Total loans receivable | 189 | 188 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 2 | 2 | ||
Loans and Leases Receivable, Allowance | (3) | (4) | $ (5) | $ (5) |
Total loans receivable, net | 188 | 186 | ||
Consumer and other [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 2 | 3 | ||
Consumer and other [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 1 | 0 | ||
Consumer and other [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | $ 0 | $ 0 |
Loans Receivable, Net (Detail51
Loans Receivable, Net (Details - Credit Quality) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | |
Credit Quality Indicators [Line Items] | |||
Average Age, Financing Receivable | 12 years 1 month 6 days | 11 years 9 months 18 days | |
Greater Than 10% of Loans, States Other than California, Count | 0 | 0 | |
Greater Than 10% of Past Due Loans, States Other than California and New York, Count | 0 | ||
Greater Than 10% of Impaired Loans, States Other than California and New York, Count | 0 | ||
One- To Four-Family [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | $ 1,339 | $ 1,432 | |
Average estimated current LTV/CLTV | 69.00% | 70.00% | |
Average LTV/CLTV at loan origination | 71.00% | 71.00% | |
One- To Four-Family [Member] | FICO Score, Greater than 720 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | $ 749 | $ 805 | |
One- To Four-Family [Member] | FICO Score, 719 to 700 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 126 | 138 | |
One- To Four-Family [Member] | FICO Score, 699 to 680 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 105 | 105 | |
One- To Four-Family [Member] | FICO Score, 679 to 660 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 76 | 78 | |
One- To Four-Family [Member] | FICO Score, 659 to 620 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 111 | 122 | |
One- To Four-Family [Member] | FICO Score, Less than 620 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 172 | 184 | |
One- To Four-Family [Member] | LTV Less than 80 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 978 | 1,031 | |
One- To Four-Family [Member] | LTV 80 to 100 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 221 | 256 | |
One- To Four-Family [Member] | LTV 100 to 120 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 91 | 91 | |
One- To Four-Family [Member] | LTV Greater than 120 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 49 | 54 | |
Home Equity [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | $ 1,026 | $ 1,097 | |
Average estimated current LTV/CLTV | 83.00% | 84.00% | |
Average LTV/CLTV at loan origination | 82.00% | 81.00% | |
Home Equity [Member] | FICO Score, Greater than 720 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | $ 509 | $ 548 | |
Home Equity [Member] | FICO Score, 719 to 700 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 98 | 106 | |
Home Equity [Member] | FICO Score, 699 to 680 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 89 | 93 | |
Home Equity [Member] | FICO Score, 679 to 660 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 72 | 79 | |
Home Equity [Member] | FICO Score, 659 to 620 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 102 | 103 | |
Home Equity [Member] | FICO Score, Less than 620 [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 156 | 168 | |
Home Equity [Member] | LTV Less than 80 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 509 | 531 | |
Home Equity [Member] | LTV 80 to 100 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 273 | 291 | |
Home Equity [Member] | LTV 100 to 120 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | 158 | 176 | |
Home Equity [Member] | LTV Greater than 120 Percent [Member] | |||
Credit Quality Indicators [Line Items] | |||
Total mortgage loans receivable | $ 86 | $ 99 | |
One- To Four-Family and Home Equity Benchmark [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 33.00% | 34.00% | |
Home Equity Line of Credit Benchmark [Member] | Interest only, Already Amortizing | Maximum [Member] | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 100.00% | ||
One- To Four-Family Benchmark [Member] | Interest only, Already Amortizing | Maximum [Member] | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 100.00% | ||
Past due mortgage loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 29.00% | ||
Past due mortgage loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 17.00% | ||
Impaired mortgage loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | |||
Credit Quality Indicators [Line Items] | |||
Concentration Risk, Percentage | 44.00% |
Loans Receivable, Net (Detail52
Loans Receivable, Net (Details - Nonperforming Loans) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | ||
Real Estate Acquired Through Foreclosure | $ 22 | $ 26 |
Mortgage Loans in Process of Foreclosure, Amount | 86 | 101 |
Nonperforming Financial Instruments [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | 270 | 290 |
Nonperforming Financial Instruments [Member] | One- To Four-Family [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | 179 | 192 |
Nonperforming Financial Instruments [Member] | Home Equity [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | 90 | 98 |
Nonperforming Financial Instruments [Member] | Consumer and other [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | $ 1 | $ 0 |
Loans Receivable, Net (Detail53
Loans Receivable, Net (Details - Allowance Qualitative and Quantitative Components) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 19 | $ 33 | ||
Qualitative component | 5 | 6 | ||
Specific valuation allowance | 34 | 35 | ||
Total allowance for loan losses | $ 58 | $ 74 | $ 213 | $ 221 |
Allowance as a % of loans receivable(1) | 2.30% | 2.70% | ||
One- To Four-Family [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 11 | $ 15 | ||
Qualitative component | 3 | 3 | ||
Specific valuation allowance | 6 | 6 | ||
Total allowance for loan losses | $ 20 | $ 24 | 46 | 45 |
Allowance as a % of loans receivable(1) | 1.50% | 1.60% | ||
Home Equity [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 5 | $ 14 | ||
Qualitative component | 2 | 3 | ||
Specific valuation allowance | 28 | 29 | ||
Total allowance for loan losses | $ 35 | $ 46 | 162 | 171 |
Allowance as a % of loans receivable(1) | 3.40% | 4.20% | ||
Consumer and other [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 3 | $ 4 | ||
Qualitative component | 0 | 0 | ||
Specific valuation allowance | 0 | 0 | ||
Total allowance for loan losses | $ 3 | $ 4 | $ 5 | $ 5 |
Allowance as a % of loans receivable(1) | 1.80% | 2.10% |
Loans Receivable, Net (Detail54
Loans Receivable, Net (Details - Allowance) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | $ 74 | $ 221 | |
Provision (benefit) for loan losses | (21) | (14) | |
Charge-offs | (1) | (2) | |
Recoveries | 6 | 8 | |
Net (charge-offs) recoveries | 5 | 6 | |
Allowance for loan losses, end of period | 58 | 213 | |
Provision (benefit) for loan losses | $ (21) | (14) | |
Allowance as a percentage of total loans receivable | 2.30% | 2.70% | |
One- To Four-Family [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | $ 24 | 45 | |
Provision (benefit) for loan losses | (5) | 0 | |
Charge-offs | 0 | 0 | |
Recoveries | 1 | 1 | |
Net (charge-offs) recoveries | 1 | 1 | |
Allowance for loan losses, end of period | 20 | 46 | |
Provision (benefit) for loan losses | $ (5) | 0 | |
Allowance as a percentage of total loans receivable | 1.50% | 1.60% | |
Home Equity [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | $ 46 | 171 | |
Provision (benefit) for loan losses | (16) | (15) | |
Charge-offs | 0 | 0 | |
Recoveries | 5 | 6 | |
Net (charge-offs) recoveries | 5 | 6 | |
Allowance for loan losses, end of period | 35 | 162 | |
Provision (benefit) for loan losses | $ (16) | (15) | |
Allowance as a percentage of total loans receivable | 3.40% | 4.20% | |
Consumer and other [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Allowance for loan losses, beginning of period | $ 4 | 5 | |
Provision (benefit) for loan losses | 0 | 1 | |
Charge-offs | (1) | (2) | |
Recoveries | 0 | 1 | |
Net (charge-offs) recoveries | (1) | (1) | |
Allowance for loan losses, end of period | 3 | 5 | |
Provision (benefit) for loan losses | $ 0 | $ 1 | |
Allowance as a percentage of total loans receivable | 1.80% | 2.10% | |
Held-for-investment [Member] | |||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | |||
Increase (Decrease) in Finance Receivables | $ (148) |
Loans Receivable, Net (Detail55
Loans Receivable, Net (Details - Allowance Evaluation for Impairment) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | $ 2,198 | $ 2,350 | ||
Loans individually evaluated for impairment, recorded investment | 366 | 378 | ||
Total recorded investment in loans receivable | 2,564 | 2,728 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 24 | 39 | ||
Loans individually evaluated for impairment, allowance for loan losses | 34 | 35 | ||
Allowance for loan losses | 58 | 74 | $ 213 | $ 221 |
One- To Four-Family [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 1,140 | 1,228 | ||
Loans individually evaluated for impairment, recorded investment | 207 | 213 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 14 | 18 | ||
Loans individually evaluated for impairment, allowance for loan losses | 6 | 6 | ||
Allowance for loan losses | 20 | 24 | 46 | 45 |
Home Equity [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 867 | 932 | ||
Loans individually evaluated for impairment, recorded investment | 159 | 165 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 7 | 17 | ||
Loans individually evaluated for impairment, allowance for loan losses | 28 | 29 | ||
Allowance for loan losses | 35 | 46 | 162 | 171 |
Consumer and other [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 191 | 190 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 3 | 4 | ||
Allowance for loan losses | $ 3 | $ 4 | $ 5 | $ 5 |
Loans Receivable, Net (Detail56
Loans Receivable, Net (Details - TDRs Accrual and Nonaccrual) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment in TDRs | $ 366 | $ 378 | |
Financing Receivable, Troubled Debt Restructurings, Modifications, Total1 | 277 | 285 | |
Financing Receivable, Troubled Debt Restructurings, Bankruptcy Notifications | 89 | 93 | |
Performing Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Accrual TDRs | 183 | 187 | |
Nonperforming Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Nonaccrual TDRs, Current | 104 | 108 | |
Nonaccrual TDRs, 30-89 Days Delinquent | 24 | 23 | |
Nonaccrual TDRs, 90-179 Days Delinquent | 11 | 9 | |
Nonaccrual TDRs, 180 Plus Days Delinquent | 44 | 51 | |
One- To Four-Family [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment in TDRs | 207 | 213 | |
Charge offs included in recorded investment modified as TDRs | 65 | $ 67 | |
One- To Four-Family [Member] | Performing Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Accrual TDRs | 83 | 83 | |
One- To Four-Family [Member] | Nonperforming Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Nonaccrual TDRs, Current | 74 | 74 | |
Nonaccrual TDRs, 30-89 Days Delinquent | 15 | 13 | |
Nonaccrual TDRs, 90-179 Days Delinquent | 5 | 5 | |
Nonaccrual TDRs, 180 Plus Days Delinquent | 30 | 38 | |
Home Equity [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment in TDRs | 159 | 165 | |
Charge offs included in recorded investment modified as TDRs | 140 | $ 144 | |
Home Equity [Member] | Performing Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Accrual TDRs | 100 | 104 | |
Home Equity [Member] | Nonperforming Financial Instruments [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
Nonaccrual TDRs, Current | 30 | 34 | |
Nonaccrual TDRs, 30-89 Days Delinquent | 9 | 10 | |
Nonaccrual TDRs, 90-179 Days Delinquent | 6 | 4 | |
Nonaccrual TDRs, 180 Plus Days Delinquent | $ 14 | $ 13 |
Loans Receivable, Net (Detail57
Loans Receivable, Net (Details - TDRs Average Investment and Income) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
TDRs, Average Recorded Investment | $ 375 | $ 433 |
TDRs, Interest Income Recognized | 6 | 7 |
One- To Four-Family [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
TDRs, Average Recorded Investment | 210 | 241 |
TDRs, Interest Income Recognized | 2 | 3 |
Home Equity [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
TDRs, Average Recorded Investment | 165 | 192 |
TDRs, Interest Income Recognized | $ 4 | $ 4 |
Loans Receivable, Net (Detail58
Loans Receivable, Net (Details - TDRs Specific Valuation Allowance) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Impaired Financing Receivable With And With No Related Allowance [Line Items] | ||
Recorded Investment in TDRs | $ 366 | $ 378 |
Specific valuation allowance | 34 | 35 |
One- To Four-Family [Member] | ||
Impaired Financing Receivable With And With No Related Allowance [Line Items] | ||
Impaired Financing Receivable, With Related Allowance, Recorded Investment | 54 | 54 |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 153 | 159 |
Recorded Investment in TDRs | 207 | 213 |
Specific valuation allowance | 6 | 6 |
Impaired Financing Receivable, with Related Allowance, Net Investment | 48 | 48 |
Impaired Financing Receivable, with No Related Allowance, Net Investment | 153 | 159 |
Impaired Financing Receivables, Net Investment, Total | 201 | 207 |
Home Equity [Member] | ||
Impaired Financing Receivable With And With No Related Allowance [Line Items] | ||
Impaired Financing Receivable, With Related Allowance, Recorded Investment | 83 | 83 |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 76 | 82 |
Recorded Investment in TDRs | 159 | 165 |
Specific valuation allowance | 28 | 29 |
Impaired Financing Receivable, with Related Allowance, Net Investment | 55 | 54 |
Impaired Financing Receivable, with No Related Allowance, Net Investment | 76 | 82 |
Impaired Financing Receivables, Net Investment, Total | $ 131 | $ 136 |
Loans Receivable, Net (Detail59
Loans Receivable, Net (Details - Modifications Types and Financial Impact) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)loan | Mar. 31, 2017USD ($)loan | |
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 60 | 169 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 10 | $ 13 |
Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 8 | 5 |
Other with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 0 | 0 |
Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 2 | $ 8 |
One- To Four-Family [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 16 | 8 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 8 | $ 2 |
One- To Four-Family [Member] | Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 6 | 2 |
One- To Four-Family [Member] | Other with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 0 | 0 |
One- To Four-Family [Member] | Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 2 | $ 0 |
Home Equity [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Number of Contracts | loan | 44 | 161 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 2 | $ 11 |
Home Equity [Member] | Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 2 | 3 |
Home Equity [Member] | Other with Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 0 | 0 |
Home Equity [Member] | Other without Interest Rate Reduction [Member] | ||
Financing Receivable, Modifications [Line Items] | ||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 8 |
Derivative Instruments and He60
Derivative Instruments and Hedging Activities (Details - Fair Value of Derivatives) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Derivative, Collateral [Abstract] | ||
Derivative Asset, Fair Value, Amount Offset Against Collateral | $ 381 | $ 6 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 13 | 18 |
Derivative Asset, Not Subject to Master Netting Arrangement | 0 | 131 |
Derivative Liability, Not Subject to Master Netting Arrangement | 0 | 9 |
Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 10,086 | 8,609 |
Derivative Asset | 4 | 131 |
Derivative liability | 0 | (14) |
Derivative Asset (Liability), Net | 4 | 117 |
Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 10,086 | 8,609 |
Derivative Asset | 4 | 131 |
Derivative liability | 0 | (14) |
Derivative Asset (Liability), Net | $ 4 | $ 117 |
Derivative Instruments and He61
Derivative Instruments and Hedging Activities (Details - Fair Value Hedge) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest income | $ 708 | $ 553 |
Changes in fair value of hedged item | (25) | |
Changes in fair value of derivatives | 24 | |
Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total interest income | 468 | |
Net loss on fair value hedging relationships | (16) | |
Agency Debentures [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Changes in fair value of hedged item | (11) | |
Changes in fair value of derivatives | 11 | |
Agency Debentures [Member] | Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts recognized as interest settlements on derivatives | (2) | |
Changes in fair value of hedged item | (50) | |
Changes in fair value of derivatives | 49 | |
Net loss on fair value hedging relationships | (3) | |
Agency mortgage-backed securities [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Changes in fair value of hedged item | (14) | |
Changes in fair value of derivatives | $ 13 | |
Agency mortgage-backed securities [Member] | Interest Income [Member] | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amounts recognized as interest settlements on derivatives | (13) | |
Amortization of basis adjustment | 2 | |
Changes in fair value of hedged item | (231) | |
Changes in fair value of derivatives | 229 | |
Net loss on fair value hedging relationships | $ (13) |
Derivative Instruments and He62
Derivative Instruments and Hedging Activities (Details - Hedge Ineffectiveness) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivative [Line Items] | ||
Fair Value Hedge, Hedging Instrument | $ 24 | |
Fair Value Hedge, Hedged Item | (25) | |
Fair Value Hedge, Hedge Ineffectiveness | $ (3) | (1) |
Summary of Dervative Instruments By Hedge Designation [Abstract] | ||
Carrying Amount of Hedged Assets | 12,090 | |
Cumulative amount of basis adjustment included in total carrying amount of fair value hedges | (320) | |
Cumulative amount of basis adjustment included in carrying amount of discontinued fair value hedges | (215) | |
Closed Portfolio and Beneficial Interest Last of Layer Amortized Cost [Abstract] | ||
Amortized Cost Basis of Closed Portfolio Last-of-Layer | 910 | |
Amount Representing Hedged Items Designated as Last-of-Layer | 440 | |
Basis Adjustment Associated with Hedged Items Designated as Last-of-Layer | $ 1 | |
Agency Debentures [Member] | ||
Derivative [Line Items] | ||
Fair Value Hedge, Hedging Instrument | 11 | |
Fair Value Hedge, Hedged Item | (11) | |
Fair Value Hedge, Hedge Ineffectiveness | 0 | |
Agency mortgage-backed securities [Member] | ||
Derivative [Line Items] | ||
Fair Value Hedge, Hedging Instrument | 13 | |
Fair Value Hedge, Hedged Item | (14) | |
Fair Value Hedge, Hedge Ineffectiveness | $ (1) |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Deposits By Type [Abstract] | ||
Sweep deposits | $ 37,927 | $ 37,734 |
Savings deposits | 2,797 | 2,912 |
Other deposits(1) | 2,178 | 2,096 |
Total deposits | $ 42,902 | $ 42,742 |
Deposits, Weighted Average Rates [Abstract] | ||
Sweep deposits, weighted-average rate | 0.07% | 0.01% |
Savings deposits, weighted-average rate | 0.01% | 0.01% |
Other deposits, weighted-average rate | 0.02% | 0.03% |
Total deposits, weighted-average rate | 0.07% | 0.01% |
Deposits Textuals [Abstract] | ||
Non-interest-bearing deposits | $ 214 | $ 207 |
Other Borrowings (Details)
Other Borrowings (Details) $ in Millions | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | ||
FHLB advances | $ 500 | $ 500 |
Trust preferred securities | 410 | 410 |
Corporate debt | 992 | 991 |
Total other borrowings | 910 | $ 910 |
E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 1,100 | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 300 | |
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | |
Revolving Credit Facility [Member] | Revolving credit facility maturing June 2018 [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 450 | |
Secured Committed Line of Credit [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Lines of Credit. Number of Creditors | 2 | |
Secured Committed Line of Credit [Member] | Line Of Credit Maturing June 2018 [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 175 | |
Unsecured Uncommitted Line of Credit [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Lines of Credit. Number of Creditors | 3 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 125 | |
Unsecured Uncommitted Line of Credit [Member] | Line Of Credit Maturing June 2018 [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 50 | |
Secured Uncommitted Line of Credit [Member] | E TRADE Securities [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 375 |
Corporate Debt (Details)
Corporate Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 1,000 | $ 1,000 |
Unamortized discount | (8) | (9) |
Total corporate debt | 992 | 991 |
Senior Notes Interest Bearing Two And Nine Five Percent [Member] | Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | 600 | 600 |
Unamortized discount | (4) | (5) |
Total corporate debt | $ 596 | $ 595 |
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||
Debt instrument maturity year | 2,022 | 2,022 |
Debt instrument, interest rate, stated percentage | 2.95% | 2.95% |
Senior Notes Interest Bearing Three And Eight Percent [Member] | Corporate Debt Securities [Member] | ||
Debt Instrument [Line Items] | ||
Face Value | $ 400 | $ 400 |
Unamortized discount | (4) | (4) |
Total corporate debt | $ 396 | $ 396 |
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||
Debt instrument maturity year | 2,027 | 2,027 |
Debt instrument, interest rate, stated percentage | 3.80% | 3.80% |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 300 | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 | |
Line of Credit Facility, Expiration Date | Jun. 23, 2020 |
Shareholders Equity (Details -
Shareholders Equity (Details - Stock) - USD ($) $ / shares in Units, $ in Millions | Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jul. 20, 2017 |
Class of Stock [Line Items] | |||||
Preferred stock, shares outstanding | 403,000 | 403,000 | |||
Preferred stock, amount outstanding | $ 689 | $ 689 | |||
Preferred stock dividend declared | $ 12 | $ 13 | |||
Share Repurchases | |||||
Repurchases of common stock, shares | 2,700,000 | ||||
Repurchases of common stock, amount | $ 140 | ||||
Common Stock | |||||
Share Repurchases | |||||
Repurchases of stock, authorized amount | $ 1,000 | ||||
Repurchases of common stock, shares | 3,000,000 | ||||
Repurchases of common stock, amount | $ 140 | ||||
Average repurchase price | $ 52.12 | ||||
Repurchase of stock, aggregate amount | $ 502 | ||||
Repurchase of stock, aggregate shares | 11,200,000 | ||||
Repurchases of stock, remaining authorized amount | $ 498 | ||||
Common Stock | Subsequent Event [Member] | |||||
Share Repurchases | |||||
Repurchases of common stock, shares | 900,000 | ||||
Average repurchase price | $ 60.01 | ||||
Series A Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, dividend rate, percentage | 5.875% | ||||
Preferred stock, date of change in dividend rate from fixed to floating | Sep. 15, 2026 | ||||
Preferred stock, shares outstanding | 400,000 | ||||
Preferred stock, liquidation preference per share | $ 1,000 | ||||
Preferred stock, amount outstanding | $ 394 | 394 | |||
Dividends Payable, Date Declared | Feb. 8, 2018 | Feb. 2, 2017 | |||
Preferred stock holders of record, date of record | Feb. 28, 2018 | Feb. 28, 2017 | |||
Preferred stock dividends, date to be paid | Mar. 15, 2018 | Mar. 15, 2017 | |||
Preferred stock dividend declared, per share | $ 29.38 | $ 32.64 | |||
Preferred stock dividend declared | $ 12 | $ 13 | |||
Series A Preferred Stock [Member] | LIBOR [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, basis spread on variable rate | 4.435% | ||||
Series B Preferred Stock [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, dividend rate, percentage | 5.30% | ||||
Preferred stock, date of change in dividend rate from fixed to floating | Mar. 15, 2023 | ||||
Preferred stock, shares outstanding | 3,000 | ||||
Preferred stock, liquidation preference per share | $ 100,000 | ||||
Preferred stock, amount outstanding | $ 295 | $ 295 | |||
Series B Preferred Stock [Member] | LIBOR [Member] | |||||
Class of Stock [Line Items] | |||||
Preferred stock, basis spread on variable rate | 3.16% |
Shareholders' Equity (Details -
Shareholders' Equity (Details - Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, | $ (26) | $ (137) | |
Other comprehensive income (loss), before reclassifications | 46 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (7) | ||
Reclassification of held-to-maturity securities to available-for-sale securities | 6 | [1] | 0 |
Other comprehensive income (loss) | (129) | 39 | |
Cumulative effect of accounting adoption | 3 | ||
Ending balance, | (176) | (98) | |
Unamortized unrealized pre-tax losses related to transfer of available-for-sale securities to held-to-maturity | 24 | ||
Unamortized unrealized pre-tax losses related to transfer of available-for-sale securities to held-to-maturity during the period | 18 | ||
Held-to-maturity securities, transferred security, at carrying value | 4,672 | 0 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | |
Hedge accounting adoption | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | ||
Available-for-sale securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, | (26) | (139) | |
Other comprehensive income (loss), before reclassifications | (128) | 46 | |
Amounts reclassified from accumulated other comprehensive income (loss) | (7) | (5) | |
Reclassification of held-to-maturity securities to available-for-sale securities | 6 | ||
Other comprehensive income (loss) | (129) | 41 | |
Reclassification of tax effects due to federal tax reform | (14) | ||
Ending balance, | (176) | (98) | |
Available-for-sale securities | Hedge accounting adoption | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Cumulative effect of accounting adoption | $ (7) | ||
Foreign currency translation | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance, | 2 | ||
Other comprehensive income (loss), before reclassifications | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | ||
Other comprehensive income (loss) | (2) | ||
Ending balance, | $ 0 | ||
[1] | During the three months ended March 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million, or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Shareholders' Equity (Details68
Shareholders' Equity (Details - Other Comprehensive Income Activity) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Available-for-sale securities, before tax | |||
Unrealized gains (losses), before tax | $ (172) | $ 76 | |
Reclassification into earnings, before tax | (10) | (8) | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | |
Net change from available-for-sale securities, before tax | (175) | 68 | |
Foreign currency translation, before tax | |||
Reclassification into earnings, before tax | 0 | (2) | |
Available-for-sale securities, tax effect | |||
Unrealized gains (losses), tax effect | 44 | (30) | |
Reclassification into earnings, tax effect | 3 | 3 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, tax effect | (1) | 0 | |
Net change from available-for-sale securities, tax effect | 46 | (27) | |
Foreign currency translation, tax effect | |||
Reclassification into earnings, tax effect | 0 | 0 | |
Available-for-sale securities, after tax | |||
Unrealized gains (losses), after tax | (128) | 46 | |
Reclassification into earnings, after tax | (7) | (5) | |
Reclassification of held-to-maturity securities to available-for-sale securities | 6 | [1] | 0 |
Net change from available-for-sale securities | (129) | 41 | |
Foreign currency translation, after tax | |||
Reclassification into earnings, after tax | 0 | (2) | |
Other comprehensive income (loss), before tax | (175) | 66 | |
Other comprehensive income (loss), tax effect | 46 | (27) | |
Other comprehensive income (loss) | $ (129) | $ 39 | |
[1] | During the three months ended March 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million, or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies for additional information. |
Shareholders' Equity (Details69
Shareholders' Equity (Details - Reclassification Out Of Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Gains on securities and other, net | $ 10 | $ 10 |
Interest income | 468 | 341 |
Income tax (expense) benefit | (87) | (80) |
Reclassification into earnings, net | 334 | 225 |
Other Noninterest Expense | (23) | (16) |
Net income | 247 | 145 |
Available-for-sale securities | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Gains on securities and other, net | 11 | 8 |
Interest income | (1) | 0 |
Income tax (expense) benefit | (3) | (3) |
Reclassification into earnings, net | 10 | 8 |
Net income | 7 | 5 |
Foreign currency translation | Reclassification out of Accumulated Other Comprehensive Income (Loss) | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other Noninterest Expense | 0 | 2 |
Net income | $ 0 | $ 2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income | $ 247 | $ 145 |
Preferred stock dividends | 12 | 13 |
Net income available to common shareholders | $ 235 | $ 132 |
Share data (in thousands): | ||
Basic weighted-average shares outstanding | 266,558 | 274,876 |
Effect of weighted-average dilutive securities: | ||
Restricted stock and options | 1,124 | 1,109 |
Convertible debentures | 17 | 292 |
Diluted weighted-average shares outstanding(1) | 267,699 | 276,277 |
Basic earnings per common share (in dollars per share) | $ 0.88 | $ 0.48 |
Diluted earnings per common share (in dollars per share) | $ 0.88 | $ 0.48 |
Regulatory Requirements (Detail
Regulatory Requirements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
May 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Required Net Capital | $ 241,000,000 | $ 215,000,000 | |
Net Capital | 1,328,000,000 | 1,251,000,000 | |
Excess Net Capital | 1,087,000,000 | 1,036,000,000 | |
E TRADE Securities [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Dividends from subsidiaries paid to parent company | 125,000,000 | ||
Net capital requirement under alternative method | $ 250,000 | ||
Minimum percentage of aggregate debit balances to calculate net capital | 2.00% | ||
Required Net Capital | $ 240,000,000 | 211,000,000 | |
Net Capital | 1,283,000,000 | 1,213,000,000 | |
Excess Net Capital | 1,043,000,000 | 1,002,000,000 | |
E TRADE Futures [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Net capital requirement under CFTC regulations | $ 1,000,000 | ||
Minimum percentage of total risk margin requirements to calculate net capital | 8.00% | ||
Required Net Capital | $ 1,000,000 | 4,000,000 | |
Net Capital | 26,000,000 | 19,000,000 | |
Excess Net Capital | 25,000,000 | 15,000,000 | |
International broker-dealer [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Required Net Capital | 0 | 0 | |
Net Capital | 19,000,000 | 19,000,000 | |
Excess Net Capital | $ 19,000,000 | $ 19,000,000 | |
Subsequent Event [Member] | E TRADE Securities [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Dividends from subsidiaries paid to parent company | $ 100,000,000 |
Regulatory Requirements - Bank
Regulatory Requirements - Bank Capital Requirements (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Total risk-based capital [Abstract] | ||
Minimum percentage of Common Equity Tier 1 capital conservation buffer | 2.50% | |
Minimum [Member] | Capital conservation buffer [Member] | ||
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 4.50% | |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 6.00% | |
Total risk-based capital [Abstract] | ||
Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | |
Parent Company [Member] | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 4,493 | $ 4,386 |
Tier 1 Leverage Capital to Average Assets | 7.30% | 7.40% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 3,096 | $ 2,976 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,397 | $ 1,410 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 3,804 | $ 3,773 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 35.00% | 33.90% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 706 | $ 722 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 3,098 | $ 3,051 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 4,493 | $ 4,386 |
Tier One Risk Based Capital to Risk Weighted Assets | 41.40% | 39.50% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 868 | $ 889 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 3,625 | $ 3,497 |
Total risk-based capital [Abstract] | ||
Capital | $ 4,965 | $ 4,874 |
Capital to Risk Weighted Assets | 45.70% | 43.80% |
Capital Required to be Well Capitalized | $ 1,086 | $ 1,111 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 3,879 | $ 3,763 |
E TRADE Bank [Member] | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 3,793 | $ 3,620 |
Tier 1 Leverage Capital to Average Assets | 7.60% | 7.60% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 2,498 | $ 2,394 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,295 | $ 1,226 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 3,793 | $ 3,620 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 37.40% | 35.70% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 659 | $ 660 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 3,134 | $ 2,960 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 3,793 | $ 3,620 |
Tier One Risk Based Capital to Risk Weighted Assets | 37.40% | 35.70% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 811 | $ 812 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 2,982 | $ 2,808 |
Total risk-based capital [Abstract] | ||
Capital | $ 3,851 | $ 3,694 |
Capital to Risk Weighted Assets | 38.00% | 36.40% |
Capital Required to be Well Capitalized | $ 1,013 | $ 1,015 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 2,838 | $ 2,679 |
E TRADE Savings Bank | ||
Tier I leverage [Abstract] | ||
Tier 1 Leverage Capital | $ 1,522 | $ 904 |
Tier 1 Leverage Capital to Average Assets | 30.40% | 26.60% |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 250 | $ 170 |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% |
Excess Tier 1 Leverage Capital | $ 1,272 | $ 734 |
Common equity Tier I capital [Abstract] | ||
Common Equity Tier 1 Capital | $ 1,522 | $ 904 |
Common Equity Tier 1 Capital to Risk Weighted Assets | 145.60% | 111.10% |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 68 | $ 53 |
Common Equity Tier 1 Capital Required To Be Well Capitalized To Risk Weighted Assets | 6.50% | 6.50% |
Excess Common Equity Tier 1 Capital To Be Well Capitalized | $ 1,454 | $ 851 |
Tier I risk based capital [Abstract] | ||
Tier One Risk Based Capital | $ 1,522 | $ 904 |
Tier One Risk Based Capital to Risk Weighted Assets | 145.60% | 111.10% |
Tier One Risk Based Capital Required to be Well Capitalized | $ 84 | $ 65 |
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets | 8.00% | 8.00% |
Excess Tier One Risk Based Capital to be Well Capitalized | $ 1,438 | $ 839 |
Total risk-based capital [Abstract] | ||
Capital | $ 1,522 | $ 905 |
Capital to Risk Weighted Assets | 145.60% | 111.20% |
Capital Required to be Well Capitalized | $ 105 | $ 81 |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% |
Excess capital | $ 1,417 | $ 824 |
Commitments, Contingencies an73
Commitments, Contingencies and Other Regulatory Matters (Details) $ in Millions | May 16, 2011 | Mar. 31, 2018USD ($)$ / CapitalSecurity | Dec. 31, 2003USD ($) |
Loss Contingencies [Line Items] | |||
Commitments to fund partnerships | $ 95 | ||
Time deposit maturities, next rolling twelve months | $ 19 | ||
Trust preferred securities contractual time period | 30 years | ||
Liquidation amount per trust preferred security | $ / CapitalSecurity | 1,000 | ||
Estimated maximum potential liability trust preferred securities | $ 416 | ||
Axajo Complaint [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Damages Awarded, Value | $ 1 | ||
Droplets Inc Complaint [Member] | |||
Loss Contingencies [Line Items] | |||
Loss Contingency, Patents Allegedly Infringed, Number | 2 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Apr. 09, 2018USD ($) |
Subsequent Event [Member] | Trust Company of America, Inc. | |
Subsequent Event [Line Items] | |
Payments to Acquire Businesses, Gross | $ 275 |