Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 15, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | E TRADE FINANCIAL CORP | ||
Entity Central Index Key | 1,015,780 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 12.1 | ||
Entity Common Stock, Shares Outstanding | 246,312,066 |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue: | |||
Interest income | $ 2,009 | $ 1,571 | $ 1,233 |
Interest expense | (163) | (86) | (85) |
Net interest income | 1,846 | 1,485 | 1,148 |
Gains on securities and other, net | 53 | 28 | 42 |
Other revenue | 45 | 43 | 41 |
Total non-interest income | 1,027 | 881 | 793 |
Total net revenue | 2,873 | 2,366 | 1,941 |
Provision (benefit) for loan losses | (86) | (168) | (149) |
Non-interest expense: | |||
Compensation and benefits | 621 | 546 | 501 |
Advertising and market development | 200 | 166 | 131 |
Clearing and servicing | 126 | 124 | 105 |
Professional services | 96 | 99 | 97 |
Occupancy and equipment | 124 | 116 | 98 |
Communications | 116 | 121 | 87 |
Depreciation and amortization | 92 | 82 | 79 |
FDIC insurance premiums | 30 | 31 | 25 |
Amortization of other intangibles | 48 | 36 | 23 |
Restructuring and acquisition-related activities | 7 | 15 | 35 |
Losses on early extinguishment of debt | 4 | 58 | 0 |
Other non-interest expenses | 77 | 76 | 71 |
Total non-interest expense | 1,541 | 1,470 | 1,252 |
Income before income tax expense | 1,418 | 1,064 | 838 |
Income tax expense | 366 | 450 | 286 |
Net income | 1,052 | 614 | 552 |
Preferred stock dividends | 36 | 25 | 0 |
Net income available to common shareholders | $ 1,016 | $ 589 | $ 552 |
Basic earnings per common share (in dollars per share) | $ 3.90 | $ 2.16 | $ 1.99 |
Diluted earnings per common share (in dollars per share) | $ 3.88 | $ 2.15 | $ 1.98 |
Weighted average common shares outstanding: | |||
Basic (in thousands) | 260,600 | 273,190 | 277,789 |
Diluted (in thousands) | 261,669 | 274,352 | 279,048 |
Dividends declared per common share | $ 0.14 | $ 0 | $ 0 |
Commissions [Member] | |||
Non-interest Income | |||
Revenue | $ 498 | $ 441 | $ 442 |
Fees and service charges [Member] | |||
Non-interest Income | |||
Revenue | $ 431 | $ 369 | $ 268 |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Statement of Comprehensive Income [Abstract] | ||||||||||||
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | $ 1,052 | $ 614 | $ 552 | |
Available-for-sale securities: | ||||||||||||
Unrealized gains (losses), net | (203) | 137 | (5) | |||||||||
Reclassification into earnings, net | (31) | (24) | (33) | |||||||||
Transfer of held-to-maturity securities to available-for-sale securities(1) | 6 | [1] | 0 | 0 | ||||||||
Net change from available-for-sale securities | (228) | 113 | (38) | |||||||||
Foreign currency translation: | ||||||||||||
Reclassification of foreign currency translation gains | 0 | (2) | 0 | |||||||||
Other comprehensive income (loss) | (228) | 111 | (38) | |||||||||
Comprehensive income | 824 | 725 | 514 | |||||||||
Transfer of held-to-maturity securities to available-for-sale securities | 4,672 | 0 | 0 | |||||||||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | $ 7 | $ 0 | $ 0 | |||||||||
[1] | During the year ended December 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million , or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Cash and equivalents | $ 2,333 | $ 931 |
Cash segregated under federal or other regulations | 1,011 | 872 |
Available-for-sale securities | 23,153 | 20,679 |
Held-to-maturity securities (fair value of $21,491 and $23,719 at December 31, 2018 and 2017, respectively) | 21,884 | 23,839 |
Margin receivables | 9,560 | 9,071 |
Loans receivable, net (net of allowance for loan losses of $37 and $74 at December 31, 2018 and 2017, respectively) | 2,103 | 2,654 |
Receivables from brokers, dealers and clearing organizations | 760 | 1,178 |
Property and equipment, net | 281 | 253 |
Goodwill | 2,485 | 2,370 |
Other intangibles, net | 491 | 284 |
Other assets | 942 | 1,234 |
Total assets | 65,003 | 63,365 |
Liabilities: | ||
Deposits | 45,313 | 42,742 |
Customer payables | 10,117 | 9,449 |
Payables to brokers, dealers and clearing organizations | 948 | 1,542 |
Other borrowings | 0 | 910 |
Corporate debt | 1,409 | 991 |
Other liabilities | 654 | 800 |
Total liabilities | 58,441 | 56,434 |
Commitments and contingencies (see Note 21) | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value, 1,000,000 shares authorized, 403,000 shares issued and outstanding at both December 31, 2018 and 2017, respectively; aggregate liquidation preference of $700 at both December 31, 2018 and 2017, respectively | 689 | 689 |
Common stock, $0.01 par value, 400,000,000 shares authorized, 246,495,174 and 266,827,881 shares issued and outstanding at December 31, 2018 and 2017, respectively | 2 | 3 |
Additional paid-in-capital | 5,462 | 6,582 |
Retained earnings (accumulated deficit) | 684 | (317) |
Accumulated other comprehensive loss | (275) | (26) |
Total shareholders’ equity | 6,562 | 6,931 |
Total liabilities and shareholders’ equity | $ 65,003 | $ 63,365 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parentheticals) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
ASSETS | ||
Held-to-maturity securities, fair value | $ 21,491 | $ 23,719 |
Allowance for loan losses | $ 37 | $ 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) | 246,495,174 | 266,827,881 |
Common stock shares outstanding (in shares) | 246,495,174 | 266,827,881 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Preferred Class APreferred Stock | Preferred Class BPreferred Stock |
Balance, at Dec. 31, 2015 | $ 5,799 | $ 0 | $ 3 | $ 7,356 | $ (1,461) | $ (99) | ||
Balance, (in shares) at Dec. 31, 2015 | 291 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 552 | 552 | ||||||
Other comprehensive income (loss) | (38) | (38) | ||||||
Issuance of preferred stock | 394 | $ 394 | ||||||
Repurchases of common stock | (452) | (452) | ||||||
Repurchases of common stock, shares | (19) | |||||||
Share-based compensation | 30 | 30 | ||||||
Other common stock activity, shares | 2 | |||||||
Other common stock activity | (13) | (13) | ||||||
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 change | 3 | 3 | ||||||
Net income | 614 | 614 | ||||||
Other comprehensive income (loss) | 111 | 111 | ||||||
Issuance of preferred stock | 295 | $ 295 | ||||||
Preferred stock dividends | (25) | (25) | ||||||
Repurchases of common stock | (362) | (362) | ||||||
Repurchases of common stock, shares | (9) | |||||||
Share-based compensation | 41 | 41 | ||||||
Other common stock activity, shares | 2 | |||||||
Other common stock activity | (18) | (18) | ||||||
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 change | Hedge accounting adoption | 7 | (7) | ||||||
Cumulative effect of accounting change | Reclassification of tax effects due to federal tax reform | 14 | (14) | ||||||
Net income | 1,052 | 1,052 | ||||||
Other comprehensive income (loss) | (228) | (228) | ||||||
Common stock dividends | (36) | (36) | ||||||
Preferred stock dividends | (36) | (36) | ||||||
Repurchases of common stock | $ (1,140) | $ (1) | (1,139) | |||||
Repurchases of common stock, shares | (21.3) | (22) | ||||||
Share-based compensation | $ 46 | 46 | ||||||
Other common stock activity, shares | 1 | |||||||
Other common stock activity | (27) | (27) | ||||||
Balance, at Dec. 31, 2018 | $ 6,562 | $ 689 | $ 2 | $ 5,462 | $ 684 | $ (275) | ||
Balance, (in shares) at Dec. 31, 2018 | 246 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income | $ 1,052 | $ 614 | $ 552 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Provision (benefit) for loan losses | (86) | (168) | (149) |
Depreciation and amortization (including amortization and accretion on investment securities) | 244 | 262 | 239 |
Gains on securities and other, net | (53) | (28) | (42) |
Losses on early extinguishment of debt | 4 | 58 | 0 |
Share-based compensation | 46 | 41 | 30 |
Deferred tax expense | 339 | 450 | 275 |
Other | 18 | (7) | (5) |
Net effect of changes in assets and liabilities: | |||
Decrease (increase) in receivables from brokers, dealers and clearing organizations | 418 | (134) | (528) |
(Increase) decrease in margin receivables | (489) | (2,340) | 667 |
Decrease (increase) in other assets | 159 | (49) | (3) |
(Decrease) increase in payables to brokers, dealers and clearing organizations | (594) | 559 | (593) |
Increase in customer payables | 668 | 1,290 | 1,615 |
(Decrease) increase in other liabilities | (40) | 34 | (14) |
Net cash provided by operating activities | 1,686 | 582 | 2,044 |
Cash flows from investing activities: | |||
Purchases of available-for-sale securities | (8,386) | (9,819) | (6,705) |
Proceeds from sales of available-for-sale securities | 7,423 | 1,645 | 3,194 |
Proceeds from maturities of and principal payments on available-for-sale securities | 1,944 | 1,588 | 1,540 |
Purchases of held-to-maturity securities | (4,163) | (10,519) | (4,389) |
Proceeds from maturities of and principal payments on held-to-maturity securities | 2,395 | 2,556 | 2,068 |
Proceeds from sales of loans | 30 | 40 | 0 |
Decrease in loans receivable | 609 | 983 | 1,176 |
Capital expenditures for property and equipment | (112) | (102) | (75) |
Proceeds from sale of real estate owned and repossessed assets | 24 | 29 | 20 |
Acquisitions, net of cash acquired | (150) | 0 | (723) |
Net cash flow from derivative contracts | 221 | 66 | (109) |
Other | (25) | (43) | 4 |
Net cash used in investing activities | (190) | (13,576) | (3,999) |
Cash flows from financing activities: | |||
Increase in deposits | 1,781 | 11,060 | 2,237 |
Common stock dividends | (36) | 0 | 0 |
Preferred stock dividends | (36) | (25) | 0 |
Net decrease in securities sold under agreements to repurchase | 0 | 0 | (82) |
Net (decrease) increase in advances from FHLB | (500) | 500 | 0 |
Proceeds from issuance of senior notes | 420 | 999 | 0 |
Payments on senior notes | 0 | (1,049) | 0 |
Payments on trust preferred securities | (413) | 0 | 0 |
Proceeds from issuance of preferred stock | 0 | 300 | 400 |
Repurchases of common stock | (1,139) | (362) | (452) |
Other | (32) | (36) | (28) |
Net cash provided by financing activities | 45 | 11,387 | 2,075 |
Increase (decrease) in cash, cash equivalents and segregated cash | 1,541 | (1,607) | 120 |
Cash, cash equivalents and segregated cash, beginning of period | 1,803 | 3,410 | 3,290 |
Cash, cash equivalents and segregated cash, end of period | 3,344 | 1,803 | 3,410 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |||
Cash and equivalents, end of period | 2,333 | 931 | 1,950 |
Segregated cash, end of period | 1,011 | 872 | 1,460 |
Cash, cash equivalents and segregated cash, end of period | 3,344 | 1,803 | 3,410 |
Supplemental disclosures: | |||
Cash paid for interest | 157 | 126 | 77 |
Cash paid for income taxes, net of refunds | 11 | 8 | 6 |
Non-cash investing and financing activities: | |||
Transfers of loans held-for-investment to loans held-for-sale | 0 | 57 | 0 |
Transfers from loans to other real estate owned and repossessed assets | 15 | 27 | 34 |
Conversion of convertible debentures to common stock | 0 | 3 | 5 |
Transfer of available-for-sale securities to held-to-maturity securities | 1,161 | 0 | 492 |
Transfer of held-to-maturity securities to available-for-sale securities | $ 4,672 | $ 0 | $ 0 |
Organization, Basis of Presenta
Organization, Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 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 for traders, investors, stock plan administrators and participants, and RIAs. The Company also provides investor-focused banking products, primarily sweep deposits, to customers. The Company's most significant, wholly-owned subsidiaries are described below: • E*TRADE Securities is a registered broker-dealer that clears and settles customer transactions • E*TRADE Bank is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides other banking and cash management capabilities • E*TRADE Savings Bank, a subsidiary of E*TRADE Bank, is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides custody solutions for RIAs • E*TRADE Financial Corporate Services is a provider of software and services for managing equity compensation plans to our corporate clients • E*TRADE Futures is a registered non-clearing Futures Commission Merchant (FCM) that provides retail futures transaction capabilities for our customers • E*TRADE Capital Management is an RIA that provides investment advisory services for our customers Basis of Presentation 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. 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 a 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. There are no investments in which the Company represents the primary beneficiary of a VIE; therefore, there are no consolidated VIEs included 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 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 losses of $19 million , $14 million and $6 million for the years ended December 31, 2018 , 2017 and 2016, respectively. • 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 of $63 million and $251 million were reclassified at December 31, 2018 and 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. 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 including the allowance for loan losses, valuation and impairment of goodwill and acquired intangible assets and income taxes. Management also makes estimates in recognizing accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation and market data usage within communications expense. Management estimates reflect the liabilities deemed probable at the balance sheet date as determined as part of the Company's ongoing evaluations based on available information. Summary of Significant Accounting Policies Cash and Equivalents The Company considers all highly liquid investments with original or remaining maturities of three months or less at the time of purchase that are not segregated under federal or other regulations to be cash and equivalents. Cash and equivalents included $1.8 billion and $490 million at December 31, 2018 and 2017 , respectively, of overnight cash deposits, a portion of which the Company is required to maintain with the Federal Reserve Bank. Cash Segregated Under Federal or Other Regulations Certain cash balances that are segregated for the exclusive benefit of the Company’s brokerage and futures customers are included in the cash segregated under federal or other regulations line item. Investment Securities Available-for-Sale Securities Available-for-sale securities are composed principally of debt securities, primarily residential mortgage-backed securities and agency debt securities. Securities classified as available-for-sale are carried at fair value, with the unrealized gains and losses, after applicable hedge accounting adjustments, reflected as a component of accumulated other comprehensive loss, net of tax. Realized and unrealized gains or losses on available-for-sale debt securities are computed using the specific identification method. Interest earned on available-for-sale securities is included in interest income. Amortization or accretion of premiums and discounts on available-for-sale debt securities is also recognized in interest income using the effective interest method over the contractual life of the security and is adjusted to reflect actual prepayments. Gains or losses resulting from the sale of available-for-sale securities are recognized at the trade-date, based on the difference between the anticipated proceeds and the amortized cost of the specific securities sold. Realized gains and losses on available-for-sale debt and equity securities, with the exception of other-than-temporary impairment (OTTI) if applicable, are included in the gains on securities and other, net line item. Held-to-Maturity Securities Held-to-maturity securities consist of debt securities, primarily residential mortgage-backed securities and agency debt securities. Held-to-maturity securities are carried at amortized cost based on the Company’s intent and ability to hold these securities to maturity. Interest earned on held-to-maturity debt securities is included in interest income. Amortization or accretion of premiums and discounts is also recognized in interest income using the effective interest method over the contractual life of the security and is adjusted to reflect actual prepayments. Other-than-Temporary Impairment The Company evaluates impaired available-for-sale and held-to-maturity debt securities for OTTI on a quarterly basis. Impaired securities include available-for-sale securities that have an unrealized loss and held-to-maturity securities that have an unrecognized loss. There was no OTTI recognized for the periods presented. The Company considers OTTI for an available-for-sale or held-to-maturity debt security to have occurred if one of the following conditions are met: the Company intends to sell the impaired debt security; it is more likely than not that the Company will be required to sell the impaired debt security before recovery of the security’s amortized cost basis; or the Company does not expect to recover the entire amortized cost basis of the security. For impaired debt securities that the Company does not intend to sell and it is not more likely than not that the Company will be required to sell before recovery of the security’s amortized cost basis, the Company uses both qualitative and quantitative valuation measures to evaluate whether the Company expects to recover the entire amortized cost basis of the security. If the Company does not expect to recover the entire amortized cost basis of these securities then the Company will separate OTTI into two components: 1) the amount related to credit loss, recognized in earnings; and 2) the noncredit portion of OTTI, recognized through other comprehensive income. If the Company intends to sell an impaired debt security or if it is more likely than not that the Company will be required to sell the impaired debt security before recovery of the security’s amortized cost basis as of the reporting date, the Company will recognize OTTI in earnings equal to the entire difference between the security’s amortized cost basis and the security’s fair value. Margin Receivables Margin receivables represent credit extended to customers to finance their purchases of securities by borrowing against securities they own. Securities owned by customers are held as collateral for amounts due on the margin receivables, the value of which is not reflected in the consolidated balance sheet. The Company is permitted to sell or re-pledge securities held as collateral for amounts due on the margin receivables and to use the securities to enter into securities lending transactions, to collateralize borrowings or for delivery to counterparties to cover customer short positions. Revenues earned from the securities lending transactions are included in interest income and expenses incurred are included in interest expense. Loans Receivable and related Allowance for Loan Losses Loans Receivable, Net Loans receivable, net consists of real estate, consumer and securities-based lending loans that management has the intent and ability to hold for the foreseeable future or until maturity, also known as loans held-for-investment. Management reviews this assessment at each balance sheet date. Loans held-for-investment are carried at amortized cost adjusted for unamortized premiums or discounts on purchased loans, deferred fees or costs on originated loans, net charge-offs, and the allowance for loan losses. Premiums or discounts on purchased loans and deferred fees or costs on originated loans are recognized in interest income using the effective interest method over the contractual life of the loans and are adjusted for actual prepayments. The Company’s classes of loans are one- to four-family, home equity, consumer and securities-based lending. Impaired Loans The Company considers a loan to be impaired when it meets the definition of a TDR. Impaired loans exclude smaller-balance homogeneous loans that have not been modified as TDRs and are collectively evaluated for impairment. Delinquency status is the primary measure the Company uses to evaluate the performance of loans modified as TDRs. Troubled Debt Restructurings Loan modifications completed under the Company’s loss mitigation programs in which economic concessions were granted to borrowers experiencing financial difficulty are considered TDRs. TDRs also include loans that have been charged-off based on the estimated current value of the underlying property less estimated selling costs due to bankruptcy notification even if the loan has not been modified under the Company’s programs. Upon being classified as a TDR, such loan is categorized as an impaired loan and is considered impaired until maturity regardless of whether the borrower performs under the terms of the loan. The Company also processes minor modifications on a number of loans through traditional collections actions taken in the normal course of servicing delinquent accounts. Minor modifications resulting in an insignificant delay in the timing of payments are not considered economic concessions and therefore are not classified as TDRs. Impairment on loan modifications is measured on an individual loan level basis, generally using a discounted cash flow model. When certain characteristics of the modified loan cast substantial doubt on the borrower’s ability to repay the loan, the Company identifies the loan as collateral dependent and charges-off the amount of the modified loan balance in excess of the estimated current value of the underlying property less estimated selling costs. Collateral dependent TDRs are identified based on the terms of the modification, which includes assigning a higher level of risk to loans in which the LTV or CLTV is greater than 110% or 125% , respectively, a borrower’s credit score is less than 600 and certain types of modifications, such as interest-only payments. TDRs that are not identified as higher risk using this risk assessment process and for which impairment is measured using a discounted cash flow model, continue to be evaluated in the event that they become higher risk collateral dependent TDRs. Nonperforming Loans The Company classifies loans as nonperforming when they are no longer accruing interest, which includes loans that are 90 days and greater past due, TDRs that are on nonaccrual status for all classes of loans (including loans in bankruptcy) and certain junior liens that have a delinquent senior lien. Interest previously accrued, but not collected, is reversed against current income when a loan is placed on nonaccrual status. Interest payments received on nonperforming loans are recognized on a cash basis in interest income until it is doubtful that full payment will be collected, at which point payments are applied to principal. The recognition of deferred fees or costs on originated loans and premiums or discounts on purchased loans in interest income is discontinued for nonperforming loans. Nonperforming loans return to accrual status based on the following policy: • Nonperforming loans, excluding TDRs and certain junior liens that have a delinquent senior lien, return to accrual status when the loan becomes less than 90 days past due. • TDRs, excluding loans in bankruptcy, are classified as nonperforming loans at the time of modification. Such TDRs return to accrual status after six consecutive payments are made in accordance with the modified terms. Accruing TDRs that subsequently become delinquent will immediately return to nonaccrual status. • Bankruptcy loan TDRs are classified as nonperforming loans within 60 days of bankruptcy notification and remain on nonaccrual status regardless of the payment performance. Delinquent Loans Loans delinquent 180 days and greater have been written down to the estimated current value of the underlying property less estimated selling costs. Loans delinquent 90 to 179 days generally have not been written down to the estimated current value of the underlying property less estimated selling costs (unless they are in process of bankruptcy or are modifications for which there is substantial doubt as to the borrower’s ability to repay the loan), but present a risk of future charge-off. Additional charge-offs on loans delinquent 180 days and greater are possible if home prices decline beyond current estimates. The Company monitors loans in which a borrower’s current credit history casts doubt on their ability to repay a loan. Loans are classified as special mention when they are between 30 and 89 days past due. The trend in special mention loan balances is generally indicative of the expected trend for charge-offs in future periods, as these loans have a greater propensity to migrate into nonaccrual status and ultimately charge-off. One- to four-family loans are generally secured in a first lien position by real estate assets, reducing the potential loss when compared to an unsecured loan. Home equity loans are generally secured by real estate assets; however, the majority of these loans are secured in a second lien position, which substantially increases the potential loss when compared to a first lien position. Allowance for Loan Losses The allowance for loan losses is management’s estimate of probable losses inherent in the loan portfolio as of the balance sheet date. In determining the adequacy of the allowance, the Company performs ongoing evaluations of the loan portfolio and loss assumptions. Loan losses are recognized when, based on management's estimate, it is probable that a loss has been incurred. The property value for both one- to four-family and home equity loans is assessed when the loan has been delinquent for 180 days or when the Company has received bankruptcy notification, regardless of whether or not the property is in foreclosure, and the amount of the loan balance in excess of the estimated current value of the underlying property less estimated selling costs is recognized as a charge-off to the allowance for loan losses. Modified loans considered TDRs are charged off when they are identified as collateral dependent based on certain terms of the modification. Closed-end consumer loans are charged off when the loan has been 120 days delinquent or when it is determined that collection is not probable. Securities-based lending is collateralized by customers' brokerage holdings, including cash and marketable securities with liquid markets. Credit lines are over-collateralized, and the market value of the collateral is monitored on a daily basis. Committed lines may be reduced or collateral liquidated if the collateral is in danger of falling below specified levels. These collateralization policies and procedures mitigate the risk of potential losses on securities-based lending. Determining the adequacy of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan losses in future periods. For loans that are not TDRs, the Company establishes a general allowance and evaluates the adequacy of the allowance for loan losses by loan portfolio segment: one- to four-family, home equity, consumer and securities-based lending. For modified loans accounted for as TDRs that are valued using the discounted cash flow model, a specific allowance is established by forecasting losses, including economic concessions to borrowers, over the estimated remaining life of these loans. The estimate of the allowance for loan losses is based on a variety of quantitative and qualitative factors, including: • The composition and quality of the portfolio • Delinquency and default levels and trends • Charge-off assumptions and loss experience • The Company's historical loss mitigation experience • The condition of the real estate market and geographic concentrations within the loan portfolio • The interest rate climate • The overall availability of housing credit • General economic conditions, including the impact of weather-related events The allowance for loan losses is typically equal to management’s forecast of loan losses in the 18 months following 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 quantitative allowance methodology also includes the identification of higher risk mortgage loans and the period of loan losses captured within the general allowance includes the total probable loss over the remaining life of these loans. The general allowance for loan losses also 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 that may impact the level of credit losses. The Company utilizes a qualitative factor framework whereby, on a quarterly basis, the risk associated with the following three primary sets of factors are evaluated: external factors, internal factors, and portfolio specific factors. The uncertainty related to these factors may expand over time, temporarily increasing the qualitative component in advance of the more precise identification of these probable losses being captured within the quantitative component of the general allowance. Receivables from and Payables to Brokers, Dealers and Clearing Organizations Receivables from brokers, dealers and clearing organizations include deposits paid for securities borrowed, clearing deposits and net receivables arising from unsettled trades. Payables to brokers, dealers and clearing organizations include deposits received for securities loaned and net payables arising from unsettled trades. 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. Interest income and interest expense are recorded on an accrual basis. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded, as necessary. Property and Equipment, Net Property and equipment is carried at cost and depreciated on a straight-line basis over their estimated useful lives, generally three to seven years. Leasehold improvements are depreciated over the lesser of their estimated useful lives or lease terms. An impairment loss is recognized if the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The costs of internally developed software that qualify for capitalization are included in the property and equipment, net line item. For qualifying internal-use software costs, capitalization begins when the conceptual formulation, design and testing of possible software project alternatives are complete and management authorizes and commits to funding the project. The Company does not capitalize pilot projects and projects where it believes that future economic benefits are less than probable. Technology development costs incurred in the development and enhancement of software used in connection with services provided by the Company that do not otherwise qualify for capitalization treatment are expensed as incurred. Completed projects, as well as other purchased software, are carried at cost and are amortized on a straight-line basis over their estimated useful lives. The estimated useful life of internally developed software is four years . Goodwill and Other Intangibles, Net Goodwill is recognized as a result of business combinations and represents the excess of the purchase price over the fair value of net tangible assets and identifiable intangible assets. The Company evaluates goodwill for impairment on an annual basis as of November 30 and in interim periods when events or changes indicate the carrying value may not be recoverable. The Company has the option of performing a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its equity is less than the carrying value. If it is more likely than not that the fair value exceeds the carrying value, then no further testing is necessary; otherwise, the Company must perform a two-step quantitative assessment of goodwill. The Company may elect to bypass the qualitative assessment and proceed directly to performing a two-step quantitative assessment. For the year ended December 31, 2018, the Company elected to perform a quantitative goodwill impairment assessment as the Company elected to perform a qualitative analysis in 2017. There have been no impairments to the carrying value of the Company's goodwill during the periods presented. The Company currently does not have any intangible assets with indefinite lives other than goodwill. The Company evaluates intangible assets with finite lives for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company also evaluates the remaining useful lives of intangible assets with finite lives each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. Customer relationship intangibles are amortized on an accelerated basis, while technology is amortized on a straight-line basis. For additional information on goodwill and other intangibles, net, see Note 10—Goodwill and Other Intangibles, Net . Other Assets Real Estate Owned and Repossessed Assets Real estate owned and repossessed assets are included in the other assets line item in the consolidated balance sheet. Real estate owned represents real estate acquired through foreclosure and also includes those properties acquired through a deed in lieu of foreclosure or similar legal agreement. Both real estate owned and repossessed assets are carried at the lower of carrying value or fair value, less estimated selling costs. Equity Method, Cost Method and Other Investments 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, that are not required to be consolidated. These investments are reported in the other assets line item in the consolidated balance sheet. The Company recognizes a liability for all legally binding unfunded equity commitments to the investees in the other liabilities line item in the consolidated balance sheet. Under the equity method, the Company recognizes its share of the investee’s net income or loss in the gains on securities and other, net line item in the consolidated statement of income. The Company’s other investments include those accounted for using the proportional amortization method, whereby the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and the net investment performance is recognized in the consolidated statement of income as a component of income tax expense. The Company evaluates its equity and cost method investments for impairment when events or changes indicate the carrying value may not be recoverable. If the impairment is determined to be other-than-temporary, the Company will recognize an impairment loss in the gains on securities and other, net line item equal to the difference between the expected realizable value and the carrying value of the investment. The Company is a member of, and owns capital stock in, the FHLB system. As a condition of its membership in the FHLB, the Company is required to maintain a FHLB stock investment which totaled $20 million and $36 million at December 31, 2018 and 2017 , respectively. The Company accounts for its investment in FHLB stock as a cost method investment. Deposits and Customer Payables Deposits are primarily composed of sweep deposits held at bank subsidiaries, which represent uninvested cash balances in certain customer brokerage accounts. Customer payables primarily represent credit balances in customer brokerage accounts arising from deposits of funds and sales of securities and other funds pending completion of transactions. Customer payables primarily represent customer cash held by E*TRADE Securities. The Company pays interest on certain deposits and customer payables balances. Other Borrowings Other borrowings includes securities sold under agreements to repurchase, FHLB advances, and borrowings from lines of credit. Securities sold under agreements to repurchase the same or similar securities, also known as repurchase agreements, are collateralized by fixed- and variable-rate mortgage-backed securities or investment grade securities. Repurchase agreements are treated as secured borrowings for financial statement purposes and the obligations to repurchase securities sold are therefore reflected as liabilities in the consolidated balance sheet. The FHLB provides the Company with reserve credit capacity and authorizes advances based on the security of pledged home mortgages and other assets (principally securities that are obligations of, or guaranteed by, the US Government) provided the Company meets certain creditworthiness standards. Prior to 2008, E*TRADE Bank's parent company ETB Holdings, Inc. (ETB Holdings) raised capital through the formation of trusts, which sold TRUPs in the capital markets. During the year ended December 31, 2018, the Company fully redeemed all previously outstanding TRUPs. For additional information on other borrowings, see Note 13—Other Borrowings . Other Liabilities Other liabilities includes accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation and market data usage within communications expense. Management estimates reflect the probable liability as of the balance sheet date. In determining the adequacy of estimated liabilities, the Company performs ongoing evaluations based on available information. Net Revenue Net Interest Income Interest income is recognized as earned through holding interest-earning assets, such as available-for-sale and held-to-maturity securities, margin receivables, loans and cash, and from securities lending transactions. Interest income also includes the impact of the Company’s hedging activities related to interest-earning assets. Interest expense is recognized as incurred through holding interest-bearing liabilities, such as corporate debt, other borrowings, customer payables and deposits, and from securities lending transactions. Non-Interest Income The Company's significant accounting policies addressing non-interest income reflect the adoption of the new accounting standard, Revenue from Contracts with Customers, and all the related amendments effective January 1, 2018. The Company's adoption did not result in a change to the financial statements for the comparative periods. The core principle of the Company's policy for recognizing revenue from contracts with customers is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This core principle is achieved by applying the following steps: • Identify the contract with the customer • Identify each performance obligation in the contract, which represents a promise in a contract to transfer a distinct good or service to the customer and is the unit of account • Determine the transaction price • Allocate the transaction price to each distinct performance obligation • Recognize revenue when, or as, the performance obligation is satisfied Judgment is required to determine whether performance obligations are satisfied at a point in time or over time; how to allocate transaction prices where multiple performance obligations are identified; when to recognize revenue based on the appropriate measure of the Company’s progress under the contract; and whether constraints on variable consideration should be applied due to uncertain future events. Commissions 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, st |
Acquisition and Restructuring
Acquisition and Restructuring | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | NOTE 2—ACQUISITIONS AND RESTRUCTURING Brokerage Accounts Acquisition On November 6, 2018, the Company announced the completion of its acquisition of approximately one million retail brokerage accounts from Capital One for $109 million in cash. The acquisition introduced a significant number of retail customers to the Company's scalable platform and resulted in the assumption of $1.6 billion of customer payables and $127 million of customer margin balances. The Company recorded a customer relationships intangible asset of $114 million at acquisition, which includes the purchase price plus transaction costs. The fair value of the customer relationships intangible asset was determined using the multi-period excess earnings method, a discounted cash flow method, and the related asset is subject to amortization over an estimated useful life of 11 years . The intangible assets are deductible for tax purposes . Business Combination On April 9, 2018, the Company completed its acquisition of TCA for $275 million in cash. TCA is a leading provider of technology solutions and custody services to the RIA market. The acquisition is expected to benefit the Company by leveraging the E*TRADE brand to accelerate growth of the custody offering, and through the establishment of a referral program to address retail customers seeking services available through RIAs. The results of TCA's operations have been included in the Company's consolidated statement of income for the year ended December 31, 2018 from the date of acquisition. While we do not maintain discrete financial information for TCA, we estimate TCA's net revenue from April 9, 2018 through December 31, 2018 was approximately $60 million . Supplementary pro forma financial information related to the acquisition is not included because the impact to the Company's consolidated statement of income is not material. The following table summarizes the allocation of the purchase price to the net assets of TCA as of April 9, 2018 (dollars in millions): April 9, 2018 Purchase price $ 275 Fair value of net assets acquired 160 Goodwill $ 115 The following table summarizes the fair value of assets acquired and liabilities assumed at the date of acquisition (dollars in millions): April 9, 2018 Assets Cash and equivalents $ 239 Available-for-sale securities 554 Other intangibles 140 Other (1) 23 Total assets acquired 956 Liabilities Deposits 790 Other liabilities 6 Total liabilities assumed 796 Net assets acquired $ 160 (1) Includes balance sheet line items property and equipment, net and other assets. The goodwill of $115 million includes synergies expected to result from combining operations with TCA, coupling its custody platform with the Company's existing product offerings and leveraging customer relationships with RIAs. The goodwill is deductible for tax purposes. The Company recorded intangible assets of $140 million , which are subject to amortization over their estimated useful lives. The intangible assets are deductible for tax purposes . The fair value of the intangible assets was determined under the income approach. The following table summarizes the fair value and estimated useful lives of the intangible assets at the date of acquisition (dollars in millions): Estimated Fair Value Estimated Useful Life (In Years) Customer Relationships $ 119 22 Technology 20 5 Trade name 1 2 Total intangible assets $ 140 Restructuring and Acquisition-related Activities The following table shows the components of restructuring and acquisition-related activities expense (dollars in millions): Year Ended December 31, 2018 2017 2016 Restructuring activities $ 4 $ 12 $ 28 Acquisition-related costs 3 3 7 Total restructuring and acquisition-related activities $ 7 $ 15 $ 35 |
Net Revenue
Net Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
NET REVENUE DISCLOSURE | NOTE 3—NET REVENUE The following table presents the significant components of total net revenue (dollars in millions): Year Ended December 31, 2018 2017 2016 Net interest income $ 1,846 $ 1,485 $ 1,148 Commissions 498 441 442 Fees and service charges 431 369 268 Gains on securities and other, net 53 28 42 Other revenue 45 43 41 Total net revenue $ 2,873 $ 2,366 $ 1,941 Interest Income and Interest Expense The following table presents the significant components of interest income and interest expense (dollars in millions): Year Ended December 31, 2018 2017 2016 Interest income: Cash and equivalents $ 11 $ 9 $ 7 Cash segregated under federal or other regulations 15 12 6 Investment securities (1) 1,241 962 691 Margin receivables 491 320 249 Loans 128 157 191 Broker-related receivables and other 14 3 1 Subtotal interest income 1,900 1,463 1,145 Other interest revenue (2) 109 108 88 Total interest income 2,009 1,571 1,233 Interest expense: Deposits 51 4 3 Customer payables 22 5 5 Broker-related payables and other 10 — — Other borrowings 25 22 18 Corporate debt 46 48 54 Subtotal interest expense 154 79 80 Other interest expense (3) 9 7 5 Total interest expense 163 86 85 Net interest income $ 1,846 $ 1,485 $ 1,148 (1) For the year ended December 31, 2018 , includes $19 million of net fair value hedging adjustments. See Note 8—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): Year Ended December 31, 2018 2017 2016 Fees and service charges: Order flow revenue $ 174 $ 135 $ 96 Money market funds and sweep deposits revenue 71 92 50 Advisor management and custody fees 64 36 28 Mutual fund service fees 48 39 36 Foreign exchange revenue 25 26 21 Reorganization fees 14 16 16 Other fees and service charges 35 25 21 Total fees and service charges $ 431 $ 369 $ 268 |
Fair Value Disclosures
Fair Value Disclosures | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE 4—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 December 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. 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. 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 December 31, 2018 Loans receivable: One- to four-family Appraised value $ 594,700 $17,000 - $2,000,000 Home equity Appraised value $ 397,700 $73,000 - $1,060,000 Real estate owned Appraised value $ 329,500 $57,900 - $900,000 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 tables present the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total Fair Value December 31, 2018: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 22,162 $ — $ 22,162 Agency debentures — 839 — 839 Agency debt securities — 139 — 139 Municipal bonds — 12 — 12 Other — 1 — 1 Total available-for-sale securities — 23,153 — 23,153 Derivative assets (1) — 1 — 1 Publicly traded equity securities (2) 7 — — 7 Total assets measured at fair value on a recurring basis (3) $ 7 $ 23,154 $ — $ 23,161 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 17 $ 17 Home equity — — 6 6 Total loans receivable — — 23 23 Other assets: Real estate owned — — 10 10 Total assets measured at fair value on a nonrecurring basis (4) $ — $ — $ 33 $ 33 (1) All derivative assets were interest rate contracts at December 31, 2018 . Information related to derivative instruments is detailed in Note 8—Derivative Instruments and Hedging Activities . (2) Consists of investments in a mutual fund related to the CRA. At December 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 36% of the Company’s total assets at December 31, 2018 . (4) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at December 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 8—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 (gains) and losses recognized on assets measured at fair value on a nonrecurring basis (dollars in millions): Year Ended December 31, 2018 2017 2016 One- to four-family $ 3 $ 4 $ 4 Home equity (1 ) 5 12 Total losses on loans receivable measured at fair value $ 2 $ 9 $ 16 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. The Company had no transfers between levels during the periods presented. Fair Value of Financial Instruments Not Carried at Fair Value The following tables present 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): December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 2,333 $ 2,333 $ — $ — $ 2,333 Cash segregated under federal or other regulations $ 1,011 $ 1,011 $ — $ — $ 1,011 Held-to-maturity securities: Agency mortgage-backed securities $ 18,085 $ — $ 17,748 $ — $ 17,748 Agency debentures 1,824 — 1,808 — 1,808 Agency debt securities 1,975 — 1,935 — 1,935 Total held-to-maturity securities $ 21,884 $ — $ 21,491 $ — $ 21,491 Margin receivables (1) $ 9,560 $ 9,560 $ 9,560 Loans receivable, net: One- to four-family $ 1,069 $ — $ — $ 1,099 $ 1,099 Home equity 810 — — 825 825 Consumer 117 — — 115 115 Securities-based lending 107 — 107 — 107 Total loans receivable, net (2) $ 2,103 $ — $ 107 $ 2,039 $ 2,146 Receivables from brokers, dealers and clearing organizations (1) $ 760 $ — $ 760 $ — $ 760 Other assets (1)(3) $ 36 $ — $ 36 $ — $ 36 Liabilities Deposits $ 45,313 $ — $ 45,313 $ — $ 45,313 Customer payables $ 10,117 $ — $ 10,117 $ — $ 10,117 Payables to brokers, dealers and clearing organizations $ 948 $ — $ 948 $ — $ 948 Corporate debt $ 1,409 $ — $ 1,372 $ — $ 1,372 (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 $12.9 billion at December 31, 2018 . Of this amount, $2.3 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2018 . (2) The carrying value of loans receivable, net includes the allowance for loan losses of $37 million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2018 . (3) The $36 million in other assets at December 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 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 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 segregated under federal or other regulations, margin receivables, receivables from brokers, dealers and clearing organizations, other assets, customer payables and payables to brokers, dealers and clearing organizations —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. Fair value of securities-based lending is estimated to be carrying value consistent with the Company's valuation of margin receivables. 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 was estimated by discounting future cash flows at the yield implied by dealer pricing quotes. See Note 13—Other Borrowings and Note 14—Corporate Debt for additional information. 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 21—Commitments, Contingencies and Other Regulatory Matters |
Offsetting Assets and Liabiliti
Offsetting Assets and Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Offsetting Assets and Liabilities [Abstract] | |
Offsetting Assets and Liabilities [Text Block] | NOTE 5—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)(2) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount December 31, 2018 Assets: Deposits paid for securities borrowed (3) $ 176 $ — $ 176 $ (104 ) $ (61 ) $ 11 Derivative assets 1 — 1 — — 1 Total $ 177 $ — $ 177 $ (104 ) $ (61 ) $ 12 Liabilities: Deposits received for securities loaned (4) $ 887 $ — $ 887 $ (104 ) $ (700 ) $ 83 Total $ 887 $ — $ 887 $ (104 ) $ (700 ) $ 83 December 31, 2017 Assets: Deposits paid for securities borrowed (3) $ 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 lending program are reflected in other assets. Deposits received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheet. (2) Derivative assets are reflected in the other assets line item in the consolidated balance sheet. Derivative liabilities are reflected in the other liabilities line item in the consolidated balance sheet. (3) Included in the gross amounts of deposits paid for securities borrowed was $65 million and $347 million at December 31, 2018 and 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. (4) Included in the gross amounts of deposits received for securities loaned was $543 million and $821 million at December 31, 2018 and 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 $131 million of centrally cleared derivative contract assets and $9 million of centrally cleared derivative contract liabilities at December 31, 2017. See Note 8—Derivative Instruments and Hedging Activities for additional information. Also 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 collateral. 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 (centrally 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 preceding table as the contracts may not qualify as master netting agreements. See Note 8—Derivative Instruments and Hedging Activities |
Available-for-Sale and Held-to-
Available-for-Sale and Held-to-Maturity Securities | 12 Months Ended |
Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES | NOTE 6—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 December 31, 2018: Available-for-sale securities: (1) Agency mortgage-backed securities $ 22,140 $ 327 $ (305 ) $ 22,162 Agency debentures 833 13 (7 ) 839 Agency debt securities 140 1 (2 ) 139 Municipal bonds 12 — — 12 Other 1 — — 1 Total available-for-sale securities $ 23,126 $ 341 $ (314 ) $ 23,153 Held-to-maturity securities: (1) Agency mortgage-backed securities $ 18,085 $ 26 $ (363 ) $ 17,748 Agency debentures 1,824 — (16 ) 1,808 Agency debt securities 1,975 4 (44 ) 1,935 Total held-to-maturity securities $ 21,884 $ 30 $ (423 ) $ 21,491 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 year ended December 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 year ended December 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 16—Shareholders' Equity for information on the impact to accumulated other comprehensive income. (2) Consists of investments in a mutual fund related to the CRA. At December 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): December 31, 2018 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ 4 $ 4 Due within one to five years 864 853 Due within five to ten years 9,706 9,899 Due after ten years 12,552 12,397 Total available-for-sale debt securities $ 23,126 $ 23,153 Held-to-maturity debt securities: Due within one year $ 56 $ 56 Due within one to five years 2,062 2,045 Due within five to ten years 5,115 5,031 Due after ten years 14,651 14,359 Total held-to-maturity debt securities $ 21,884 $ 21,491 At December 31, 2018 and 2017 , the Company had pledged $6.3 billion and $5.5 billion , respectively, of held-to-maturity debt securities, and $151 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 December 31, 2018: Available-for-sale securities: Agency mortgage-backed securities $ 2,945 $ (34 ) $ 7,826 $ (271 ) $ 10,771 $ (305 ) Agency debentures 383 (1 ) 116 (6 ) 499 (7 ) Agency debt securities — — 30 (2 ) 30 (2 ) Municipal bonds — — 9 — 9 — Other 1 — — — 1 — Total temporarily impaired available-for-sale securities $ 3,329 $ (35 ) $ 7,981 $ (279 ) $ 11,310 $ (314 ) Held-to-maturity securities: Agency mortgage-backed securities $ 2,802 $ (31 ) $ 11,587 $ (332 ) $ 14,389 $ (363 ) Agency debentures 776 (2 ) 666 (14 ) 1,442 (16 ) Agency debt securities 97 (1 ) 1,487 (43 ) 1,584 (44 ) Total temporarily impaired held-to-maturity securities $ 3,675 $ (34 ) $ 13,740 $ (389 ) $ 17,415 $ (423 ) 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 December 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 December 31, 2018 . There were no impairment losses recognized in earnings on available-for-sale or held-to-maturity securities during the years ended December 31, 2018, 2017 and 2016. Gains on Securities and Other, Net The following table presents the components of gains on securities and other, net (dollars in millions): Year Ended December 31, 2018 2017 2016 Gains on available-for-sale securities (1) $ 98 $ 40 $ 54 Losses on available-for-sale securities (1) (54 ) — (1 ) Subtotal 44 40 53 Equity method investment income (loss) and other (2)(3) 9 (12 ) (11 ) Gains on securities and other, net $ 53 $ 28 $ 42 (1) In August 2018, the Company sold available-for-sale securities and reinvested the sale proceeds in agency-backed securities at current market rates. A subset of these securities had been purchased in lower interest rate environments and were in unrealized loss positions at the time of sale. As both the change in intent related to these securities and the sale of these securities occurred within the same reporting period, the Company presented the losses on the sale of these securities within the gains on securities and other, net line item. (2) Includes a $5 million gain on the sale of our Chicago Stock Exchange investment for the year ended December 31, 2018 . (3) Includes losses of $14 million and $6 million on hedge ineffectiveness for the years ended December 31, 2017 and 2016. 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 |
Loans Receivable, Net
Loans Receivable, Net | 12 Months Ended |
Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | |
LOANS RECEIVABLE, NET | NOTE 7—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 December 31, 2018 One- to four-family $ 958 $ 48 $ 9 $ 56 $ 1,071 $ 7 $ (9 ) $ 1,069 Home equity 774 25 13 24 836 — (26 ) 810 Consumer 117 1 — — 118 1 (2 ) 117 Securities-based lending (1) 107 — — — 107 — — 107 Total loans receivable $ 1,956 $ 74 $ 22 $ 80 $ 2,132 $ 8 $ (37 ) $ 2,103 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 173 3 — — 176 2 (4 ) 174 Securities-based lending (1) 12 — — — 12 — — 12 Total loans receivable $ 2,468 $ 98 $ 37 $ 114 $ 2,717 $ 11 $ (74 ) $ 2,654 (1) In 2017 we introduced E*TRADE Line of Credit, a securities-based lending product, where customers can borrow against the market value of their securities pledged as collateral. The unused credit line amount totaled $173 million and $35 million as of December 31, 2018 and 2017, respectively. 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 December 31, 2018 , the Company pledged $1.6 billion and $0.1 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 December 31, December 31, Current LTV/CLTV (1) 2018 2017 2018 2017 <=80% $ 823 $ 1,031 $ 454 $ 531 80%-100% 165 256 215 291 100%-120% 45 91 110 176 >120% 38 54 57 99 Total mortgage loans receivable $ 1,071 $ 1,432 $ 836 $ 1,097 Average estimated current LTV/CLTV (2) 66 % 70 % 80 % 84 % Average LTV/CLTV at loan origination (3) 70 % 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 December 31, December 31, Current FICO 2018 2017 2018 2017 >=720 $ 617 $ 805 $ 442 $ 548 719 - 700 89 138 78 106 699 - 680 80 105 70 93 679 - 660 66 78 56 79 659 - 620 79 122 80 103 <620 140 184 110 168 Total mortgage loans receivable $ 1,071 $ 1,432 $ 836 $ 1,097 One- to four-family loans include loans with an interest-only period, followed by an amortizing period. At December 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 December 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 12.8 and 11.8 years at December 31, 2018 and December 31, 2017 , respectively. Approximately 33% and 34% of the Company’s mortgage loans receivable were concentrated in California at December 31, 2018 and December 31, 2017, respectively. Approximately 10% and 9% of the Company's mortgage loans receivable were concentrated in New York at December 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 December 31, 2018 and December 31, 2017 . At December 31, 2018 , 24% and 19% 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 December 31, 2018 , 43% and 10% of the Company’s impaired mortgage loans were concentrated in California and New York, respectively. 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): December 31, 2018 2017 One- to four-family $ 139 $ 192 Home equity 71 98 Total nonperforming loans receivable $ 210 $ 290 At December 31, 2018 and 2017, the Company held $13 million and $26 million , respectively, of real estate owned that was acquired through foreclosure or through a deed in lieu of foreclosure or similar legal agreement. The Company held $51 million and $101 million of loans for which formal foreclosure proceedings were in process at December 31, 2018 and 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 Total (1) December 31, December 31, December 31, December 31, 2018 2017 2018 2017 2018 2017 2018 2017 General reserve: Quantitative component $ 4 $ 15 $ 6 $ 14 $ 2 $ 4 $ 12 $ 33 Qualitative component — 3 1 3 — — 1 6 Specific valuation allowance 5 6 19 29 — — 24 35 Total allowance for loan losses $ 9 $ 24 $ 26 $ 46 $ 2 $ 4 $ 37 $ 74 Allowance as a % of loans (2) 0.8 % 1.6 % 3.1 % 4.2 % 1.0 % 2.1 % 1.7 % 2.7 % (1) Securities-based lending was launched in 2017. These loans were fully collateralized by cash and securities with fair values in excess of borrowings at both December 31, 2018 and 2017, respectively. (2) 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): Year Ended December 31, 2018 One- to Four-Family Home Equity Consumer Total Allowance for loan losses, beginning of period $ 24 $ 46 $ 4 $ 74 Provision (benefit) for loan losses (22 ) (63 ) (1 ) (86 ) Charge-offs (1) — — (4 ) (4 ) Recoveries (2) 7 43 3 53 Net (charge-offs) recoveries 7 43 (1 ) 49 Allowance for loan losses, end of period (3) $ 9 $ 26 $ 2 $ 37 Year Ended December 31, 2017 One- to Home Consumer Total Allowance for loan losses, beginning of period $ 45 $ 171 $ 5 $ 221 Provision (benefit) for loan losses (29 ) (141 ) 2 (168 ) Charge-offs (1) — (7 ) (6 ) (13 ) Recoveries 8 23 3 34 Net (charge-offs) recoveries 8 16 (3 ) 21 Allowance for loan losses, end of period (3) $ 24 $ 46 $ 4 $ 74 Year Ended December 31, 2016 One- to Home Consumer Total Allowance for loan losses, beginning of period $ 40 $ 307 $ 6 $ 353 Provision (benefit) for loan losses (2 ) (148 ) 1 (149 ) Charge-offs (1 ) (17 ) (7 ) (25 ) Recoveries 8 29 5 42 Net (charge-offs) recoveries 7 12 (2 ) 17 Allowance for loan losses, end of period $ 45 $ 171 $ 5 $ 221 (1) Includes benefits resulting from recoveries of partial charge-offs due to principal paydowns or payoffs for the periods presented. The benefits included in the charge-offs line item exceeded other charge-offs for both one-to-four family and home equity loan portfolios during the year ended 2018 and for the one-to-four family loan portfolio during the year ended 2017. (2) Includes $15 million of recoveries recognized during the year ended December 31, 2018 related to the sale of previously charged-off home equity loans. (3) Securities-based lending was launched in 2017. These loans were fully collateralized by cash and securities with fair values in excess of borrowings at both December 31, 2018 and 2017, respectively. Total loans receivable designated as held-for-investment decreased $0.6 billion during the year ended December 31, 2018 . The allowance for loan losses was $37 million , or 1.7% of total loans receivable, as of December 31, 2018 compared to $74 million , or 2.7% of total loans receivable, as of December 31, 2017 . Net recoveries for the year ended December 31, 2018 were $49 million compared to $21 million in the same period in 2017 . The benefit for loan losses was $86 million for the year ended December 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 sales of charged-off loans and 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 December 31, December 31, 2018 2017 2018 2017 Collectively evaluated for impairment: One- to four-family $ 891 $ 1,228 $ 4 $ 18 Home equity 698 932 7 17 Consumer 119 178 2 4 Securities-based lending 107 12 — — Total collectively evaluated for impairment 1,815 2,350 13 39 Individually evaluated for impairment: One- to four-family 187 213 5 6 Home equity 138 165 19 29 Total individually evaluated for impairment 325 378 24 35 Total $ 2,140 $ 2,728 $ 37 $ 74 Impaired Loans—Troubled Debt Restructurings The Company considers a loan to be impaired when it meets the definition of a TDR. 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 (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) December 31, 2018 One- to four-family $ 87 $ 61 $ 12 $ 4 $ 23 $ 187 Home equity 90 23 8 5 12 138 Total $ 177 $ 84 $ 20 $ 9 $ 35 $ 325 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 $55 million and $121 million for one-to four-family and home equity loans, respectively, as of December 31, 2018 and $67 million and $144 million , respectively, as of December 31, 2017 . (4) Total recorded investment in TDRs at December 31, 2018 consisted of $253 million of loans modified as TDRs and $72 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 monthly average recorded investment and interest income recognized both on a cash and accrual basis for the Company's TDRs during the years ended December 31, 2018, 2017 and 2016 (dollars in millions): Average Recorded Investment Interest Income Recognized December 31, December 31, 2018 2017 2016 2018 2017 2016 One- to four-family $ 201 $ 221 $ 269 $ 9 $ 9 $ 11 Home equity 152 179 204 13 16 17 Total $ 353 $ 400 $ 473 $ 22 $ 25 $ 28 The following table presents detailed information related to the Company’s TDRs and specific valuation allowances (dollars in millions): December 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 $ 50 $ 5 $ 45 $ 54 $ 6 $ 48 Home equity $ 60 $ 19 $ 41 $ 83 $ 29 $ 54 Without a recorded allowance: (1) One- to four-family $ 137 $ — $ 137 $ 159 $ — $ 159 Home equity $ 78 $ — $ 78 $ 82 $ — $ 82 Total: One- to four-family $ 187 $ 5 $ 182 $ 213 $ 6 $ 207 Home equity $ 138 $ 19 $ 119 $ 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 Principal Forgiven Re-age/ Other with Other (1) Total December 31, 2018 One- to four-family 49 $ — $ 14 $ — $ 7 $ 21 Home equity 91 — 5 1 1 7 Total 140 $ — $ 19 $ 1 $ 8 $ 28 December 31, 2017 One- to four-family 40 $ — $ 13 $ 1 $ 4 $ 18 Home equity 294 — 12 1 9 22 Total 334 $ — $ 25 $ 2 $ 13 $ 40 December 31, 2016 One- to four-family 47 $ 1 $ 8 $ 2 $ 7 $ 18 Home equity 518 — 8 3 25 36 Total 565 $ 1 $ 16 $ 5 $ 32 $ 54 (1) |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 8—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES Presentation on the Consolidated Balance Sheet Hedging Instruments The Company utilizes fair value hedges to offset exposure to changes in value of certain fixed-rate assets. 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) December 31, 2018 Interest rate contracts: Fair value hedges $ 9,763 $ 1 $ — $ 1 Total derivatives designated as hedging instruments (4) $ 9,763 $ 1 $ — $ 1 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 December 31, 2018 and 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. By January 2018, both central clearing organizations had adopted similar rulebook amendments. As a result, for centrally cleared derivatives 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. 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 December 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. The consolidated balance sheet and the table above exclude the following as these contracts were executed through a central clearing organization and were settled by variation margin payments: • Derivative assets of $175 million and $6 million at December 31, 2018 and 2017, respectively • Derivative liabilities of $131 million and $18 million at December 31, 2018 and 2017, respectively Credit Risk As the majority of the derivatives that the Company utilizes in its hedging activities are subject to derivatives clearing agreements (cleared derivatives contracts), the credit risk associated with these cleared derivatives contracts is largely mitigated by the daily variation margin exchanged with counterparties. For other derivative contracts, the Company also monitors collateral requirements through credit support agreements, which reduce risk by permitting the netting of transactions with the same counterparty upon occurrence of certain events. During the year ended December 31, 2018 , the consideration of counterparty credit risk did not result in an adjustment to the valuation of the Company’s derivative instruments. Hedged Assets 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 December 31, 2018 Available-for-sale securities (3) $ 13,203 $ (10 ) $ (385 ) (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. (3) Includes the amortized cost basis of 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. As of December 31, 2018 , the amortized cost basis of this portfolio was $810 million , the amount of the designated hedged items was $192 million and the cumulative basis adjustments associated with these hedges was $6 million . Presentation on the Consolidated Statement of Income The following table presents the effects of fair value hedge accounting on the consolidated statement of income (dollars in millions): Interest Income Year Ended December 31, 2018 Total interest income $ 2,009 Effects of fair value hedging on total interest income (1)(2) Agency debentures: Amounts recognized as interest accruals on derivatives $ (3 ) Changes in fair value of hedged items (69 ) Changes in fair value of derivatives 68 Net loss on fair value hedging relationships - agency debentures (4 ) Agency mortgage backed securities: Amounts recognized as interest accruals on derivatives (15 ) Amortization of basis adjustments from discontinued hedges 24 Changes in fair value of hedged items (111 ) Changes in fair value of derivatives 93 Net loss on fair value hedging relationships - agency mortgage backed securities (9 ) Total net loss on fair value hedging relationships $ (13 ) (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. (2) Excludes interest on variation margin related to centrally cleared derivative contracts. 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 on the consolidated statement of income (dollars in millions): Year Ended December 31, 2017 2016 Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Agency debentures $ 1 $ (3 ) $ (2 ) $ 28 $ (32 ) $ (4 ) Agency mortgage-backed securities 36 (48 ) (12 ) 42 (44 ) (2 ) Total gains (losses) included in earnings $ 37 $ (51 ) $ (14 ) $ 70 $ (76 ) $ (6 ) (1) |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 9—PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following asset classes at December 31, 2018 and 2017 (dollars in millions): December 31, 2018 December 31, 2017 Gross Amount Accumulated Depreciation and Amortization Net Amount Gross Amount Accumulated Depreciation and Amortization Net Amount Software $ 416 $ (297 ) $ 119 $ 403 $ (289 ) $ 114 Equipment 147 (117 ) 30 132 (101 ) 31 Leasehold improvements 131 (95 ) 36 122 (98 ) 24 Buildings 72 (34 ) 38 72 (32 ) 40 Furniture and fixtures 13 (3 ) 10 7 (4 ) 3 Land 3 — 3 3 — 3 Construction in progress (1) 45 — 45 38 — 38 Total (2) $ 827 $ (546 ) $ 281 $ 777 $ (524 ) $ 253 (1) Construction in progress includes software in the process of development of $36 million and $22 million at December 31, 2018 and 2017 , respectively. (2) The Company executed a sale-leaseback transaction on its Alpharetta, Georgia office in 2014 and the transaction was accounted for as a financing as it did not qualify for leaseback accounting. The related assets continue to be included in the property and equipment, net line item on the consolidated balance sheet. Depreciation and amortization expense related to property and equipment was $92 million , $82 million and $79 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Software includes capitalized internally developed software costs, net, of $58 million , $53 million and $46 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. Amortization of completed and in-service software was $43 million , $36 million and $36 million for the years ended December 31, 2018 , 2017 and 2016 , respectively. The obligation for future minimum lease payments and minimum sublease proceeds to be received under the Alpharetta, Georgia lease is as follows (dollars in millions): Obligation for Minimum Lease Payments Minimum Sublease Proceeds Years ending December 31, 2019 $ 5 $ (3 ) 2020 5 (3 ) 2021 5 (3 ) 2022 5 (3 ) 2023 5 — Thereafter 4 — Total $ 29 $ (12 ) |
Goodwill and Other Intangibles,
Goodwill and Other Intangibles, Net | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES, NET | NOTE 10—GOODWILL AND OTHER INTANGIBLES, NET Goodwill At December 31, 2018 and 2017 , the Company had goodwill of $2.5 billion and $2.4 billion , respectively. There was a $115 million addition to the carrying value of the Company's goodwill during the year ended December 31, 2018 , which was recognized in connection with the TCA acquisition. For additional information, see Note 2—Acquisitions and Restructuring . There were no impairments to the carrying value of the Company’s goodwill during the years ended December 31, 2018 , 2017 and 2016 . At both December 31, 2018 and 2017 , goodwill was net of accumulated impairment losses of $243 million . Other Intangibles, Net At December 31, 2018 and 2017 , the Company had other intangible assets of $491 million and $284 million , respectively. There were $254 million in additions to other intangible assets during the year ended December 31, 2018, which were recognized in connection with the acquisition of retail brokerage accounts from Capital One and the TCA acquisition. For additional information, see Note 2—Acquisitions and Restructuring . The following table outlines the Company's other intangible assets with finite lives (dollars in millions): December 31, 2018 Weighted Average Weighted Average Remaining Useful Life (Years) Gross Amount Accumulated Amortization Net Amount Customer relationships 18 13 $ 786 $ (345 ) $ 441 Technology 6 5 68 (19 ) 49 Trade name 2 1 4 (3 ) 1 Total $ 858 $ (367 ) $ 491 December 31, 2017 Weighted Average Weighted Average Remaining Useful Life (Years) Gross Amount Accumulated Amortization Net Amount Customer relationships 18 10 $ 553 $ (309 ) $ 244 Technology 7 6 48 (9 ) 39 Trade name 2 1 3 (2 ) 1 Total $ 604 $ (320 ) $ 284 Assuming no future impairments of other intangibles or additional acquisitions or dispositions, the following table presents the Company's future annual amortization expense (dollars in millions): Years ending December 31, 2019 $ 60 2020 58 2021 57 2022 55 2023 49 Thereafter 212 Total future amortization expense $ 491 |
Receivables from and Payables t
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | 12 Months Ended |
Dec. 31, 2018 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Due to and from Broker-Dealers and Clearing Organizations Disclosure [Text Block] | NOTE 11—RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS Receivables from and payables to brokers, dealers and clearing organizations consist of the following (in millions): December 31, 2018 2017 Receivables: Securities borrowed $ 140 $ 740 Receivables from clearing organizations 555 376 Other 65 62 Total $ 760 $ 1,178 Payables: Securities loaned $ 887 $ 1,373 Payables to clearing organizations 11 123 Other 50 46 Total $ 948 $ 1,542 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Deposits [Abstract] | |
DEPOSITS | NOTE 12—DEPOSITS The following table presents the significant components of deposits (dollars in millions): December 31, 2018 2017 Sweep deposits $ 39,322 $ 37,734 Savings deposits 4,133 2,912 Other deposits (1) 1,858 2,096 Total deposits $ 45,313 $ 42,742 (1) Includes checking deposits, money market deposits and certificates of deposit. As of December 31, 2018 and 2017, the Company had $193 million and $207 million |
Other Borrowings
Other Borrowings | 12 Months Ended |
Dec. 31, 2018 | |
Other Borrowings Disclosure [Abstract] | |
OTHER BORROWINGS | NOTE 13—OTHER BORROWINGS The following table presents the significant components of other borrowings (dollars in millions): December 31, 2018 2017 FHLB advances $ — $ 500 Trust preferred securities — 410 Total other borrowings $ — $ 910 During the year ended December 31, 2018, the Company redeemed all of its outstanding TRUPs. In connection with the redemption, the Company recognized a loss on early extinguishment of debt of $4 million , consisting of the difference between the carrying value of the TRUPs redeemed, including unamortized debt issuance costs, and the total cash amount paid, including related fees and expenses. Net proceeds from the issuance of $420 million Senior Notes were used to redeem the TRUPs. See Note 14—Corporate Debt and Note 21—Commitments, Contingencies and Other Regulatory Matters . External Lines of Credit maintained at E*TRADE Securities E*TRADE Securities' external liquidity lines total approximately $1.3 billion as of December 31, 2018 and include the following: • A 364-day, $600 million senior unsecured committed revolving credit facility with a syndicate of banks, with a maturity date in June 2019 • Secured committed lines of credit with two unaffiliated banks, aggregating to $175 million , with maturity dates in June 2019 • Unsecured uncommitted lines of credit with three unaffiliated banks aggregating to $125 million , of which $50 million has a maturity date of June 2019 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 with which the Company was in compliance at December 31, 2018 . There were no outstanding balances for these lines at December 31, 2018 |
Corporate Debt
Corporate Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
CORPORATE DEBT | NOTE 14—CORPORATE DEBT The following table presents the significant components of corporate debt (dollars in millions): Face Value Discount Net December 31, 2018 Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (4 ) $ 596 3.80% Senior Notes, due 2027 400 (3 ) 397 4.50% Senior Notes, due 2028 420 (4 ) 416 Total corporate debt $ 1,420 $ (11 ) $ 1,409 December 31, 2017 Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (5 ) $ 595 3.80% Senior Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (9 ) $ 991 Issuance of Corporate Debt 2018 Issuances During the year ended December 31, 2018, the Company issued $420 million in aggregate principal amount of Senior Notes due 2028. The Senior Notes bear interest at an annual rate of 4.50% and will mature on June 20, 2028. The Senior Notes are our general unsecured senior obligations and rank equally in right of payment with all of our existing and future unsubordinated indebtedness. The Senior Notes effectively rank junior to our secured indebtedness, if any, to the extent of the collateral securing such indebtedness, and are structurally subordinated to all liabilities of our subsidiaries. The Senior Notes are not guaranteed by the subsidiaries. The Company used the proceeds from the issuance of the Senior Notes for the redemption of the TRUPs issued by ETB Holdings, a subsidiary of E*TRADE Financial. For additional information about TRUPs, see Note 13—Other Borrowings and Note 21—Commitments, Contingencies and Other Regulatory Matters . 2017 Issuances During the year ended December 31, 2017, the Company issued $1 billion in aggregate principal amount of Senior Notes in two tranches. The first tranche of $600 million aggregate principal amount of Senior Notes due 2022 bears interest at an annual rate of 2.95% and will mature on August 24, 2022. The second tranche of $400 million aggregate principal amount of Senior Notes due 2027 bears interest at an annual rate of 3.80% and will mature on August 24, 2027 (together with the first tranche, the “Notes”) . The Notes are the Company's general unsecured senior obligations and rank equally with the Company's other unsecured senior indebtedness. The Notes effectively rank junior to secured indebtedness, if any, to the extent of the collateral securing such indebtedness and all liabilities of the Company's subsidiaries. The Notes are not guaranteed by the subsidiaries. The net proceeds from the issuance of the Notes were used, along with existing corporate cash, to redeem all $540 million aggregate principal amount of the outstanding 5.375% Senior Notes due 2022 and all $460 million aggregate principal amount of the outstanding 4.625% Senior Notes due 2023, including associated redemption premiums, accrued interest, and related fees and expenses. In connection with the redemption, the Company recognized a loss on early extinguishment of debt of $58 million . Credit Facility In 2017, the Company entered into a $300 million unsecured committed revolving credit facility with certain lenders which will mature on June 23, 2020. 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 December 31, 2018 . At December 31, 2018 , there was no outstanding balance under this revolving credit facility. Ranking of Debt Seniority |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 15—INCOME TAXES The components of income tax expense for the years ended December 31, 2018 , 2017 and 2016 were as follows (dollars in millions): Year Ended December 31, 2018 2017 2016 Current income tax expense (benefit): State $ 13 $ (11 ) $ 3 Foreign — — 2 Total current 13 (11 ) 5 Deferred income tax expense (benefit): Federal 266 399 285 State 73 51 (10 ) Total deferred 339 450 275 Non-current income tax expense (1) 14 11 6 Income tax expense $ 366 $ 450 $ 286 (1) Non-current income tax expense primarily relates to amortization for investments in qualified affordable housing projects recognized under the proportional amortization method and uncertain tax positions. Income tax expense for the year ended December 31, 2018 reflects the impact of the TCJA, which was enacted on December 22, 2017 and resulted in remeasurement of certain deferred tax assets and liabilities during the year ended December 31, 2017 at the new statutory federal corporate income tax rate of 21% . Accordingly, the Company recognized $58 million of additional tax expense for the year ended December 31, 2017 . Unrecognized Tax Benefits The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2018 , 2017 , and 2016 (dollars in millions): Year Ended December 31, 2018 2017 2016 Unrecognized tax benefits, beginning of period $ 25 $ 28 $ 29 Additions based on tax positions related to prior years 3 1 1 Additions based on tax positions related to current year 9 11 4 Reductions based on tax positions related to prior years — (3 ) (3 ) Settlements with taxing authorities (2 ) (6 ) (1 ) Statute of limitations lapses (4 ) (6 ) (2 ) Unrecognized tax benefits, end of period $ 31 $ 25 $ 28 The unrecognized tax benefits increased $6 million to $31 million during the year ended December 31, 2018 . At December 31, 2018 , the Company had $25 million , net of federal benefits, of unrecognized tax benefits that, if recognized, would favorably impact the effective income tax rate in future periods. The following table summarizes the tax years that are either currently under examination or remain open under the statute of limitations and subject to examination by the major tax jurisdictions in which the Company operates: Jurisdiction Open Tax Years Hong Kong 2012-2018 United Kingdom 2016-2017 United States 2015-2018 Various states (1) 2013-2018 (1) Major state tax jurisdictions include California, Georgia, Illinois, New Jersey, New York and Virginia. It is reasonably possible that the Company's unrecognized tax benefits could be reduced by as much as $4 million within the next twelve months as a result of settlements of certain examinations or expiration of statutes of limitations. The Company accrues interest and penalties, if any, related to income tax matters in income tax expense. The Company has total reserves for interest and penalties of $3 million and $6 million as of December 31, 2018 and 2017 , respectively. Deferred Taxes and Valuation Allowances Deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement and tax return purposes. The temporary differences and tax carryforwards that created deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are summarized in the following table (dollars in millions): December 31, 2018 2017 Deferred tax assets: Net operating losses $ 162 $ 349 Reserves and allowances, net 105 155 Financial instrument valuations 54 35 Deferred compensation 34 34 Tax credits 69 68 Other 1 18 Total deferred tax assets 425 659 Valuation allowance (20 ) (23 ) Total deferred tax assets, net of valuation allowance 405 636 Deferred tax liabilities: Depreciation and amortization (413 ) (385 ) Other (2 ) — Total deferred tax liabilities (415 ) (385 ) Deferred tax assets (liabilities), net $ (10 ) $ 251 The Company had $221 million of gross federal net operating losses, or $46 million in deferred tax assets related to these losses, at December 31, 2018 . There is no valuation allowance recorded against federal net operating losses, which begin to expire in 2027. In addition, the Company had $2.3 billion of gross state net operating losses, or $114 million in deferred tax assets related to these losses, at December 31, 2018 . The $20 million valuation allowance relates to state net operating losses, which expire between 2019 and 2037. Deferred tax assets, net and deferred tax liabilities are recorded in the Other assets and Other liabilities line items respectively on the consolidated balance sheet. At December 31, 2018 , the Company has no undistributed earnings and profits in foreign subsidiaries. The following table provides a reconciliation of the beginning and ending amount of valuation allowance for the years ended December 31, 2018 , 2017 , and 2016 (dollars in millions): Year Ended December 31, 2018 2017 2016 Valuation allowance, beginning of period $ (23 ) $ (35 ) $ (82 ) Additions related to reduced federal benefit — (4 ) — Reductions related to the wind-down of foreign operations 2 14 — Reductions related to state valuation allowance release 1 2 47 Valuation allowance, end of period $ (20 ) $ (23 ) $ (35 ) The Company's valuation allowance decreased $3 million to $20 million and decreased $12 million to $23 million at December 31, 2018 and 2017, respectively. Effective January 1, 2016, the Company elected to treat its broker-dealers, E*TRADE Securities and E*TRADE Clearing, as single member LLCs for tax purposes. The election to be treated as single member LLCs and future taxable income projections will result in the utilization of certain state deferred tax assets, primarily state net operating losses, against which the Company had recorded valuation allowances. Accordingly, the Company recognized a tax benefit of $25 million for the year ended December 31, 2016. Effective Tax Rate The effective tax rate differed from the federal statutory rate as summarized in the following table for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 5.1 4.2 3.9 Difference between statutory rate and foreign effective tax rate — — 0.2 Tax exempt income — — (0.1 ) Disallowed executive compensation 0.2 0.1 0.2 Change in valuation allowances — (0.1 ) (5.5 ) Tax credits (0.1 ) (0.3 ) (0.7 ) Estimated reserve for uncertain tax positions 0.2 (0.3 ) 0.1 Deferred tax adjustments (0.5 ) (0.3 ) 1.3 Tax reform adjustments — 5.5 — Excess tax benefit on share-based compensation (0.6 ) (0.7 ) — Other 0.5 (0.9 ) (0.3 ) Effective tax rate 25.8 % 42.2 % 34.1 % |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 16—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 December 31, Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share 2018 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): Year Ended December 31, 2018 Year Ended December 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 7/26/2018 8/31/2018 9/17/2018 $ 29.38 12 8/2/2017 8/31/2017 9/15/2017 $ 29.38 12 Series B (1) 7/26/2018 8/31/2018 9/17/2018 $ 4,107.50 12 Total $ 36 $ 25 (1) Dividends are non-cumulative and payable semi-annually, if declared. On February 7, 2019, the Company's Board of Directors declared cash dividends of $29.38 per share on its Series A Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock and $2,650.00 per share (equivalent to $26.50 per depositary share) on its Series B Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock. The dividends are payable on March 15, 2019, to shareholders of record as of the close of business on February 28, 2019. Common Stock Dividend on Common Stock On October 17, 2018, the Company's Board of Directors declared a quarterly cash dividend of $0.14 per share, or $36 million , on the Company's outstanding shares of common stock. The dividend was paid on November 15, 2018, to shareholders of record as of the close of business on October 30, 2018. On January 23, 2019, the Company declared a cash dividend for the first quarter of $0.14 per share on our outstanding shares of common stock. The dividend of $35 million was paid on February 15, 2019, to shareholders of record as of the close of business on February 1, 2019. 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 2018, the Company completed this $1 billion share repurchase program with the repurchase of 11.0 million shares of common stock at an average price of $58.15 per share, or $638 million during the year. In October 2018, the Company announced that its Board of Directors authorized a new $1 billion share repurchase program. As of December 31, 2018, the Company had repurchased 10.3 million shares of common stock at an average price of $48.53 per share under the new program. In total, we utilized $1.1 billion to repurchase 21.3 million shares at an average price of $53.49 under these programs during the year ended December 31, 2018. The Company accounts for share repurchases retired after repurchase by allocating the excess repurchase price over par to additional paid-in-capital. Other Common Stock Activity Other common stock activity includes shares withheld to pay taxes for share-based compensation, exercises of stock options, and other activity. During the year ended December 31, 2017, it also includes a $3 million conversion of the Company's convertible debentures into 0.3 million shares of common stock. There were no conversions of convertible debentures during the year ended December 31, 2018 . 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 (203 ) Amounts reclassified from accumulated other comprehensive loss (31 ) Transfer of held-to-maturity securities to available-for-sale securities (2) 6 Net change (228 ) Cumulative effect of hedge accounting adoption (7 ) Reclassification of tax effects due to federal tax reform (14 ) Balance, December 31, 2018 (3) $ (275 ) (1) During the year ended December 31, 2018 , the accumulated other comprehensive loss activity was 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 year ended December 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 $22 million at December 31, 2018 of which $16 million is related to the transfer of available-for-sale securities to held-to-maturity securities during the year ended December 31, 2018. Available-for-Sale Securities Foreign Currency Translation Total Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) Other comprehensive income before reclassifications 137 — 137 Amounts reclassified from accumulated other comprehensive loss (24 ) (2 ) (26 ) Net change 113 (2 ) 111 Balance, December 31, 2017 $ (26 ) $ — $ (26 ) Available-for-Sale Foreign Total Balance, December 31, 2015 $ (101 ) $ 2 $ (99 ) Other comprehensive loss before reclassifications (5 ) — (5 ) Amounts reclassified from accumulated other comprehensive loss (33 ) — (33 ) Net change (38 ) — (38 ) Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) The following table presents other comprehensive income (loss) activity and the related tax effect (dollars in millions): Year Ended December 31, 2018 2017 2016 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive income (loss) Available-for-sale securities: Unrealized gains (losses), net $ (272 ) $ 69 $ (203 ) $ 213 $ (76 ) $ 137 $ (10 ) $ 5 $ (5 ) Reclassification into earnings, net (42 ) 11 (31 ) (39 ) 15 (24 ) (53 ) 20 (33 ) Transfer of held-to-maturity securities to available-for-sale securities 7 (1 ) 6 — — — — — — Net change from available-for-sale securities (307 ) 79 (228 ) 174 (61 ) 113 (63 ) 25 (38 ) Reclassification of foreign currency translation into earnings, net — — — (2 ) — (2 ) — — — Other comprehensive income (loss) $ (307 ) $ 79 $ (228 ) $ 172 $ (61 ) $ 111 $ (63 ) $ 25 $ (38 ) 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 Year Ended December 31, 2018 2017 2016 Available-for-sale securities: $ 45 $ 39 $ 53 Gains on securities and other, net (3 ) — — Interest income 42 39 53 Reclassification into earnings, before tax (11 ) (15 ) (20 ) Income tax expense $ 31 $ 24 $ 33 Reclassification into earnings, net Foreign currency translation: $ — $ 2 $ — Other non-interest expenses $ — $ 2 $ — Reclassification into earnings, net |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 17—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): Year Ended December 31, 2018 2017 2016 Net income $ 1,052 $ 614 $ 552 Less: Preferred stock dividends 36 25 — Net income available to common shareholders $ 1,016 $ 589 $ 552 Share data (in thousands): Basic weighted-average shares outstanding 260,600 273,190 277,789 Effect of weighted-average dilutive securities: Restricted stock and options (1) 1,053 1,076 872 Convertible debentures 16 86 387 Diluted weighted-average shares outstanding (2) 261,669 274,352 279,048 Basic earnings per common share $ 3.90 $ 2.16 $ 1.99 Diluted earnings per common share (2) $ 3.88 $ 2.15 $ 1.98 (1) Includes dilutive restricted stock units and awards, dividend equivalent units, employee stock purchase plan shares and stock options. (2) 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 year ended December 31, 2018 , 2017 |
Share-Based Compensation, Emplo
Share-Based Compensation, Employee Incentive and Retirement Plans | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARED-BASED COMPENSATION, EMPLOYEE INCENTIVE AND RETIREMENT PLANS | NOTE 18—SHARE-BASED COMPENSATION, EMPLOYEE INCENTIVE AND RETIREMENT PLANS Share-Based Compensation Plans In 2015, the Company adopted and the shareholders approved the 2015 Omnibus Incentive Plan (2015 Plan), which replaced the 2005 Stock Incentive Plan (2005 Plan). The 2015 Plan provides the Company the ability to grant equity awards to officers, directors, employees and consultants, including, but not limited to, nonqualified or incentive stock options, restricted stock awards, restricted stock units and deferred restricted stock units at a price based on the date of the grant approved by the Board. The Company typically issues new shares upon exercise of stock options and vesting of other equity awards. Under the 2015 Plan, the remaining unissued authorized shares of the 2005 Plan that are not subject to outstanding awards thereunder were authorized for issuance. Additionally, any shares that had been awarded but remained unissued under the 2005 Plan that were subsequently canceled, forfeited, or reacquired by the Company would be authorized for issuance under the 2015 Plan. As of December 31, 2018 , 8.0 million shares were available for grant under the 2015 Plan. The Company recognized $46 million , $41 million and $30 million in share-based compensation expense for the years ended December 31, 2018 , 2017 and 2016, respectively. Total unrecognized compensation expense related to non-vested restricted stock awards, restricted stock units, and performance share units was $48 million as of December 31, 2018. This cost is expected to be recognized over a weighted-average period of 1.4 years. Employee Stock Option Plans Through 2011, the Company issued options to directors and to certain of the Company's officers and employees. Options generally vest ratably over a two- to four-year period from the date of grant and expire within seven to ten years from the date of grant. Certain options provide for accelerated vesting upon a change of control. The Company measures compensation expense based on the exercise price which is equal to the fair value of the shares on the grant date. As of December 31, 2018 , there were less than 0.1 million options outstanding and no unrecognized compensation expense related to non-vested stock options. Restricted Stock Awards The Company issues restricted stock awards to directors. Restricted stock awards are issued at the fair value on the date of grant and vest one year from the date of issuance. At December 31, 2018 there were less than 0.1 million restricted stock awards outstanding. Restricted Stock and Performance Share Units The Company issues restricted stock units to certain of the Company's officers and employees. Each restricted stock unit can be converted into one share of the Company’s common stock upon vesting. These restricted stock units are issued at the fair value on the date of grant and vest ratably over the requisite service period, generally one to four years. Non-employee directors may also elect to defer all or a portion of their cash and equity compensation into deferred restricted stock units. Beginning in 2015, the Company also issued performance share units to certain of the Company’s officers. Each performance share unit can be converted into one share of the Company’s common stock upon vesting. Vesting of performance share units is contingent upon achievement of certain predefined performance targets over the performance period. These performance share units are issued at the fair value on the date of grant and vest over three successive one-year performance periods based upon the achievement of performance targets. A summary of restricted stock and performance stock unit activity is presented below (shares in thousands): Restricted Stock Units Performance Share Units Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 2,444 $ 29.02 181 $ 43.64 Granted (1) 903 50.14 169 44.21 Vested (1) (1,293 ) 28.07 (121 ) 34.97 Forfeited (67 ) 39.25 — — Outstanding at December 31, 2018 1,987 $ 39.87 229 $ 48.66 Expected to vest at December 31, 2018 1,902 $ 38.48 (1) The number of performance share units granted and vested includes the impact of the achievement of performance targets. The total fair value of restricted stock awards, restricted stock units and performance share units that vested was $76 million , $58 million and $48 million during the years ended December 31, 2018 , 2017 and 2016, respectively. On the date that the Company pays a common stock dividend, holders of restricted stock units, deferred restricted stock units and performance stock units are granted dividend equivalent units which are forfeitable and are subject to the same vesting terms as the stock units with respect to which they have been awarded. The amount of such dividend equivalent units are not material to the year ended December 31, 2018 and are included in the number of shares granted. Employee Incentive and Retirement Plans Employee Stock Purchase Plan In May 2018, the shareholders of the Company approved the 2018 Employee Stock Purchase Plan (2018 ESP Plan), and reserved 4.0 million shares of common stock for sale to employees at a price no less than 85% of the fair market value per share of the common stock on the purchase date. The Company currently offers six month enrollment periods at the end of which employees can purchase shares of the Company's common stock at a price equal to 95% of the closing market price on the date of purchase. The initial offering period began on September 1, 2018. No share-based compensation expense was recorded in connection with the 2018 ESP Plan as it was deemed non-compensatory. No shares were purchased under the plan during the year ended December 31, 2018 . 401(k) Plan The Company has a 401(k) salary deferral program for eligible employees who have met certain service requirements. The Company matches certain employee contributions; additional contributions to this plan are at the discretion of the Company. Total contribution expense under this plan was $19 million , $11 million and $11 million |
Regulatory Requirements
Regulatory Requirements | 12 Months Ended |
Dec. 31, 2018 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY REQUIREMENTS | NOTE 19—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 net capital equal to or in excess 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 December 31, 2018 and 2017, all of the Company’s broker-dealer and FCM subsidiaries met applicable 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 December 31, 2018: E*TRADE Securities (1) $ 209 $ 1,294 $ 1,085 E*TRADE Futures 1 26 25 International broker-dealer — 18 18 Total $ 210 $ 1,338 $ 1,128 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 $610 million to the parent company during the year ended December 31, 2018 and $250 million in February 2019. 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 or 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): December 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 $ 4,097 6.6 % $ 3,101 5.0 % $ 996 $ 4,386 7.4 % $ 2,976 5.0 % $ 1,410 Common Equity Tier 1 $ 3,408 31.1 % $ 713 6.5 % $ 2,695 $ 3,773 33.9 % $ 722 6.5 % $ 3,051 Tier 1 risk-based $ 4,097 37.3 % $ 877 8.0 % $ 3,220 $ 4,386 39.5 % $ 889 8.0 % $ 3,497 Total risk-based $ 4,143 37.8 % $ 1,097 10.0 % $ 3,046 $ 4,874 43.8 % $ 1,111 10.0 % $ 3,763 E*TRADE Bank (1)(2) Tier 1 leverage $ 3,484 7.1 % $ 2,461 5.0 % $ 1,023 $ 3,620 7.6 % $ 2,394 5.0 % $ 1,226 Common Equity Tier 1 $ 3,484 34.9 % $ 650 6.5 % $ 2,834 $ 3,620 35.7 % $ 660 6.5 % $ 2,960 Tier 1 risk-based $ 3,484 34.9 % $ 800 8.0 % $ 2,684 $ 3,620 35.7 % $ 812 8.0 % $ 2,808 Total risk-based $ 3,521 35.2 % $ 999 10.0 % $ 2,522 $ 3,694 36.4 % $ 1,015 10.0 % $ 2,679 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,456 26.6 % $ 273 5.0 % $ 1,183 $ 904 26.6 % $ 170 5.0 % $ 734 Common Equity Tier 1 $ 1,456 169.4 % $ 56 6.5 % $ 1,400 $ 904 111.1 % $ 53 6.5 % $ 851 Tier 1 risk-based $ 1,456 169.4 % $ 69 8.0 % $ 1,387 $ 904 111.1 % $ 65 8.0 % $ 839 Total risk-based $ 1,456 169.4 % $ 86 10.0 % $ 1,370 $ 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 risk-based capital ( 6.0% ), and Total risk-based capital ( 8.0% ). This requirement was effective beginning on January 1, 2016, and became fully phased-in during 2019. (2) E*TRADE Bank paid dividends of $540 million to the parent company during the year ended December 31, 2018 |
Lease Arrangements
Lease Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
LEASE ARRANGEMENTS | NOTE 20—LEASE ARRANGEMENTS The Company has non-cancelable operating leases for facilities through 2031. Future minimum lease payments and sublease proceeds under these leases with initial or remaining terms in excess of one year, including leases associated with restructuring activities, are as follows (dollars in millions): Operating Lease Commitments (1) Years ending December 31, 2019 $ 22 2020 30 2021 29 2022 26 2023 26 Thereafter 136 Total future minimum lease payments $ 269 Sublease proceeds (1 ) Net lease commitments $ 268 (1) Excludes minimum lease payments and sublease proceeds on the Alpharetta, Georgia lease, which is accounted for as a financing. Refer to Note 9—Property and Equipment, Net for additional information. Certain leases contain provisions for renewal options and rent escalations based on increases in certain costs incurred by the lessor. Rent expense, net of sublease income, was $28 million , $26 million and $24 million |
Commitments, Contingencies and
Commitments, Contingencies and Other Regulatory Matters | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND OTHER REGULATORY MATTERS | NOTE 21—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 Appeals, 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 Appeals, 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 parties entered a Stipulation by which all claims were withdrawn at no cost to the Company. The Stipulation was approved by the Court, and the matter is now closed. 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. On July 31, 2018, the Second Court of Appeals upheld the dismissal of the complaint. The class plaintiff did not appeal and the matter is now closed. 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 to the Second Court of Appeals on October 23, 2018. O n October 26, 2018, the Second Court of Appeals upheld the dismissal of the complaint. The class plaintiff did not appeal and the matter is now closed. On December 26, 2018, a draft FINRA Dispute Resolution Statement of Claim was received on behalf of an E*TRADE customer and the customer's limited liability company. The draft Statement of Claim alleges that E*TRADE Securities, E*TRADE Capital Management and John Does I-XII violated Section 10(b) of the Securities Exchange Act, committed common law fraud, breached fiduciary duties, breached contractual duties, failed to supervise, and were negligent in the maintenance of the LLC’s accounts. The claim relates to margin liquidations from the LLC's accounts in February 2018. No arbitration has yet been filed, but the Company intends to defend itself vigorously in this matter. 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, should 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 CFPB 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 $67 million in unfunded contingent investment commitments with respect to these investments at December 31, 2018 . At December 31, 2018 , the Company had $16 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, ETB Holdings raised capital through the formation of trusts, which sold TRUPs in the capital markets. The capital securities were required to 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 ETB Holdings. During the 30-year period prior to the redemption of the TRUPs, ETB Holdings guaranteed 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). During the year ended December 31, 2018, the Company redeemed its outstanding TRUPs. See Note 13—Other Borrowings and Note 14—Corporate Debt for further details |
Condensed Financial Information
Condensed Financial Information (Parent Only) | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) | NOTE 22—CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) CONDENSED STATEMENT OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2018 2017 2016 Dividends from subsidiaries (1) $ 1,150 $ 350 $ 858 Other revenues 410 377 328 Total net revenue 1,560 727 1,186 Total non-interest expense 575 611 501 Income before income tax expense and equity in income of consolidated subsidiaries 985 116 685 Income tax expense 149 75 456 Equity in undistributed income of subsidiaries 216 573 323 Net income (2) 1,052 614 552 Other comprehensive income (loss) (228 ) 111 (38 ) Comprehensive income $ 824 $ 725 $ 514 (1) Dividends from subsidiaries includes the gross amount of dividends received. (2) Net income available to common shareholders was $1.0 billion and $589 million for the years ended December 31, 2018 and 2017, respectively, and includes the impact of $36 million and $25 million of preferred stock dividends, respectively. CONDENSED BALANCE SHEET (In millions) December 31, 2018 2017 ASSETS Cash and equivalents $ 340 $ 493 Property and equipment, net 169 157 Investment in consolidated subsidiaries 7,722 7,268 Receivable from subsidiaries 24 59 Other assets 175 202 Total assets $ 8,430 $ 8,179 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Corporate debt $ 1,409 $ 991 Other liabilities 459 257 Total liabilities 1,868 1,248 Total shareholders’ equity 6,562 6,931 Total liabilities and shareholders’ equity $ 8,430 $ 8,179 CONDENSED STATEMENT OF CASH FLOWS (In millions) Year Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 1,052 $ 614 $ 552 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 55 51 48 Equity in undistributed income from subsidiaries (216 ) (573 ) (323 ) Losses on early extinguishment of debt — 58 — Other 292 213 585 Net cash provided by operating activities 1,183 363 862 Cash flows from investing activities: Capital expenditures for property and equipment (60 ) (59 ) (36 ) Cash contributions to subsidiaries (464 ) (61 ) (766 ) Other 2 6 16 Net cash used in investing activities (522 ) (114 ) (786 ) Cash flows from financing activities: Proceeds from issuance of senior notes 420 999 — Payments on senior notes — (1,049 ) — Proceeds from issuance of preferred stock — 300 400 Repurchases of common stock (1,139 ) (362 ) (452 ) Preferred stock dividends (36 ) (25 ) — Common stock dividends (36 ) — — Other (23 ) (35 ) (40 ) Net cash used in financing activities (814 ) (172 ) (92 ) (Decrease) increase in cash and equivalents (153 ) 77 (16 ) Cash and equivalents, beginning of period 493 416 432 Cash and equivalents, end of period $ 340 $ 493 $ 416 Parent Company Guarantees Guarantees are contingent commitments issued by the parent for the purpose of guaranteeing the financial obligations of a subsidiary to a third party. The financial obligations of the parent and the relevant subsidiary do not change by the existence of a parent guarantee. Rather, upon the occurrence of certain events, the guarantee shifts ultimate payment responsibility of an existing financial obligation from the relevant subsidiary to the parent company. During the year ended December 31, 2018, no claims had been made against the parent for payment under any guarantees and thus, no |
Quarterly Data (Unaudited)
Quarterly Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY DATA (Unaudited) | NOTE 23—QUARTERLY DATA (UNAUDITED) The information presented below reflects all adjustments, which, in the opinion of management, are of a normal and recurring nature necessary to present fairly the results of operations for the quarterly periods presented (dollars in millions, except per share amounts): 2018 2017 First Second Third Fourth First Second Third Fourth Total net revenue $ 708 $ 710 $ 720 $ 735 $ 553 $ 577 $ 599 $ 637 Net income $ 247 $ 250 $ 285 $ 270 $ 145 $ 193 $ 147 $ 129 Earnings per share: Basic $ 0.88 $ 0.95 $ 1.01 $ 1.07 $ 0.48 $ 0.70 $ 0.49 $ 0.48 Diluted $ 0.88 $ 0.95 $ 1.00 $ 1.06 $ 0.48 $ 0.70 $ 0.49 $ 0.48 Net income in the second quarter of 2017 included a $99 million pre-tax benefit for loan losses primarily resulting from refined default assumptions based on the sustained outperformance of converted mortgage loans that had been amortizing for 12 months or longer. Net income in the third quarter of 2017 included a $58 million pre-tax loss on early extinguishment of debt related to the refinancing of higher cost corporate debt. Net income in the fourth quarter of 2017 included $58 million of additional tax expense due to a remeasurement of certain deferred tax assets and liabilities as a result of |
Organization, Basis of Presen_2
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 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 for traders, investors, stock plan administrators and participants, and RIAs. The Company also provides investor-focused banking products, primarily sweep deposits, to customers. The Company's most significant, wholly-owned subsidiaries are described below: • E*TRADE Securities is a registered broker-dealer that clears and settles customer transactions • E*TRADE Bank is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides other banking and cash management capabilities • E*TRADE Savings Bank, a subsidiary of E*TRADE Bank, is a federally chartered savings bank that provides FDIC insurance on certain qualifying amounts of customer deposits and provides custody solutions for RIAs • E*TRADE Financial Corporate Services is a provider of software and services for managing equity compensation plans to our corporate clients • E*TRADE Futures is a registered non-clearing Futures Commission Merchant (FCM) that provides retail futures transaction capabilities for our customers • E*TRADE Capital Management is an RIA that provides investment advisory services for our customers |
Basis of Accounting | Basis of Presentation 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. 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 a 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. There are no investments in which the Company represents the primary beneficiary of a VIE; therefore, there are no consolidated VIEs included 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 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 losses of $19 million , $14 million and $6 million for the years ended December 31, 2018 , 2017 and 2016, respectively. • 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 of $63 million and $251 million were reclassified at December 31, 2018 and 2017 , respectively. • |
Use of Estimates | Use of EstimatesPreparing 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 including the allowance for loan losses, valuation and impairment of goodwill and acquired intangible assets and income taxes. Management also makes estimates in recognizing accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation and market data usage within communications expense. Management estimates reflect the liabilities deemed probable at the balance sheet date as determined as part of the Company's ongoing evaluations based on available information. |
Cash and equivalents (policy) | Cash and Equivalents The Company considers all highly liquid investments with original or remaining maturities of three months or less at the time of purchase that are not segregated under federal or other regulations to be cash and equivalents. Cash and equivalents included $1.8 billion and $490 million at December 31, 2018 and 2017 |
Cash required to be segregated under federal or other regulations (policy) | Cash Segregated Under Federal or Other RegulationsCertain cash balances that are segregated for the exclusive benefit of the Company’s brokerage and futures customers are included in the cash segregated under federal or other regulations line item. |
Marketable securities (policy) | Investment Securities Available-for-Sale Securities Available-for-sale securities are composed principally of debt securities, primarily residential mortgage-backed securities and agency debt securities. Securities classified as available-for-sale are carried at fair value, with the unrealized gains and losses, after applicable hedge accounting adjustments, reflected as a component of accumulated other comprehensive loss, net of tax. Realized and unrealized gains or losses on available-for-sale debt securities are computed using the specific identification method. Interest earned on available-for-sale securities is included in interest income. Amortization or accretion of premiums and discounts on available-for-sale debt securities is also recognized in interest income using the effective interest method over the contractual life of the security and is adjusted to reflect actual prepayments. Gains or losses resulting from the sale of available-for-sale securities are recognized at the trade-date, based on the difference between the anticipated proceeds and the amortized cost of the specific securities sold. Realized gains and losses on available-for-sale debt and equity securities, with the exception of other-than-temporary impairment (OTTI) if applicable, are included in the gains on securities and other, net line item. Held-to-Maturity Securities Held-to-maturity securities consist of debt securities, primarily residential mortgage-backed securities and agency debt securities. Held-to-maturity securities are carried at amortized cost based on the Company’s intent and ability to hold these securities to maturity. Interest earned on held-to-maturity debt securities is included in interest income. Amortization or accretion of premiums and discounts is also recognized in interest income using the effective interest method over the contractual life of the security and is adjusted to reflect actual prepayments. Other-than-Temporary Impairment The Company evaluates impaired available-for-sale and held-to-maturity debt securities for OTTI on a quarterly basis. Impaired securities include available-for-sale securities that have an unrealized loss and held-to-maturity securities that have an unrecognized loss. There was no OTTI recognized for the periods presented. The Company considers OTTI for an available-for-sale or held-to-maturity debt security to have occurred if one of the following conditions are met: the Company intends to sell the impaired debt security; it is more likely than not that the Company will be required to sell the impaired debt security before recovery of the security’s amortized cost basis; or the Company does not expect to recover the entire amortized cost basis of the security. For impaired debt securities that the Company does not intend to sell and it is not more likely than not that the Company will be required to sell before recovery of the security’s amortized cost basis, the Company uses both qualitative and quantitative valuation measures to evaluate whether the Company expects to recover the entire amortized cost basis of the security. If the Company does not expect to recover the entire amortized cost basis of these securities then the Company will separate OTTI into two components: 1) the amount related to credit loss, recognized in earnings; and 2) the noncredit portion of OTTI, recognized through other comprehensive income. |
Margin receivables (policy) | Margin ReceivablesMargin receivables represent credit extended to customers to finance their purchases of securities by borrowing against securities they own. Securities owned by customers are held as collateral for amounts due on the margin receivables, the value of which is not reflected in the consolidated balance sheet. The Company is permitted to sell or re-pledge securities held as collateral for amounts due on the margin receivables and to use the securities to enter into securities lending transactions, to collateralize borrowings or for delivery to counterparties to cover customer short positions. Revenues earned from the securities lending transactions are included in interest income and expenses incurred are included in interest expense. |
Loans receivable, net (policy) and Impaired loans (policy) | Loans Receivable, Net Loans receivable, net consists of real estate, consumer and securities-based lending loans that management has the intent and ability to hold for the foreseeable future or until maturity, also known as loans held-for-investment. Management reviews this assessment at each balance sheet date. Loans held-for-investment are carried at amortized cost adjusted for unamortized premiums or discounts on purchased loans, deferred fees or costs on originated loans, net charge-offs, and the allowance for loan losses. Premiums or discounts on purchased loans and deferred fees or costs on originated loans are recognized in interest income using the effective interest method over the contractual life of the loans and are adjusted for actual prepayments. The Company’s classes of loans are one- to four-family, home equity, consumer and securities-based lending. Impaired Loans |
TDRs (policy) | Troubled Debt Restructurings Loan modifications completed under the Company’s loss mitigation programs in which economic concessions were granted to borrowers experiencing financial difficulty are considered TDRs. TDRs also include loans that have been charged-off based on the estimated current value of the underlying property less estimated selling costs due to bankruptcy notification even if the loan has not been modified under the Company’s programs. Upon being classified as a TDR, such loan is categorized as an impaired loan and is considered impaired until maturity regardless of whether the borrower performs under the terms of the loan. The Company also processes minor modifications on a number of loans through traditional collections actions taken in the normal course of servicing delinquent accounts. Minor modifications resulting in an insignificant delay in the timing of payments are not considered economic concessions and therefore are not classified as TDRs. Impairment on loan modifications is measured on an individual loan level basis, generally using a discounted cash flow model. When certain characteristics of the modified loan cast substantial doubt on the borrower’s ability to repay the loan, the Company identifies the loan as collateral dependent and charges-off the amount of the modified loan balance in excess of the estimated current value of the underlying property less estimated selling costs. Collateral dependent TDRs are identified based on the terms of the modification, which includes assigning a higher level of risk to loans in which the LTV or CLTV is greater than 110% or 125% , respectively, a borrower’s credit score is less than 600 |
Nonperforming loans (policy) | Nonperforming Loans The Company classifies loans as nonperforming when they are no longer accruing interest, which includes loans that are 90 days and greater past due, TDRs that are on nonaccrual status for all classes of loans (including loans in bankruptcy) and certain junior liens that have a delinquent senior lien. Interest previously accrued, but not collected, is reversed against current income when a loan is placed on nonaccrual status. Interest payments received on nonperforming loans are recognized on a cash basis in interest income until it is doubtful that full payment will be collected, at which point payments are applied to principal. The recognition of deferred fees or costs on originated loans and premiums or discounts on purchased loans in interest income is discontinued for nonperforming loans. Nonperforming loans return to accrual status based on the following policy: • Nonperforming loans, excluding TDRs and certain junior liens that have a delinquent senior lien, return to accrual status when the loan becomes less than 90 days past due. • TDRs, excluding loans in bankruptcy, are classified as nonperforming loans at the time of modification. Such TDRs return to accrual status after six consecutive payments are made in accordance with the modified terms. Accruing TDRs that subsequently become delinquent will immediately return to nonaccrual status. • Bankruptcy loan TDRs are classified as nonperforming loans within 60 days of bankruptcy notification and remain on nonaccrual status regardless of the payment performance. Delinquent Loans Loans delinquent 180 days and greater have been written down to the estimated current value of the underlying property less estimated selling costs. Loans delinquent 90 to 179 days generally have not been written down to the estimated current value of the underlying property less estimated selling costs (unless they are in process of bankruptcy or are modifications for which there is substantial doubt as to the borrower’s ability to repay the loan), but present a risk of future charge-off. Additional charge-offs on loans delinquent 180 days and greater are possible if home prices decline beyond current estimates. |
Allowance for loan losses (policy) | Allowance for Loan Losses The allowance for loan losses is management’s estimate of probable losses inherent in the loan portfolio as of the balance sheet date. In determining the adequacy of the allowance, the Company performs ongoing evaluations of the loan portfolio and loss assumptions. Loan losses are recognized when, based on management's estimate, it is probable that a loss has been incurred. The property value for both one- to four-family and home equity loans is assessed when the loan has been delinquent for 180 days or when the Company has received bankruptcy notification, regardless of whether or not the property is in foreclosure, and the amount of the loan balance in excess of the estimated current value of the underlying property less estimated selling costs is recognized as a charge-off to the allowance for loan losses. Modified loans considered TDRs are charged off when they are identified as collateral dependent based on certain terms of the modification. Closed-end consumer loans are charged off when the loan has been 120 days delinquent or when it is determined that collection is not probable. Securities-based lending is collateralized by customers' brokerage holdings, including cash and marketable securities with liquid markets. Credit lines are over-collateralized, and the market value of the collateral is monitored on a daily basis. Committed lines may be reduced or collateral liquidated if the collateral is in danger of falling below specified levels. These collateralization policies and procedures mitigate the risk of potential losses on securities-based lending. Determining the adequacy of the allowance is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the loan portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan losses in future periods. For loans that are not TDRs, the Company establishes a general allowance and evaluates the adequacy of the allowance for loan losses by loan portfolio segment: one- to four-family, home equity, consumer and securities-based lending. For modified loans accounted for as TDRs that are valued using the discounted cash flow model, a specific allowance is established by forecasting losses, including economic concessions to borrowers, over the estimated remaining life of these loans. The estimate of the allowance for loan losses is based on a variety of quantitative and qualitative factors, including: • The composition and quality of the portfolio • Delinquency and default levels and trends • Charge-off assumptions and loss experience • The Company's historical loss mitigation experience • The condition of the real estate market and geographic concentrations within the loan portfolio • The interest rate climate • The overall availability of housing credit • General economic conditions, including the impact of weather-related events The allowance for loan losses is typically equal to management’s forecast of loan losses in the 18 months following 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 quantitative allowance methodology also includes the identification of higher risk mortgage loans and the period of loan losses captured within the general allowance includes the total probable loss over the remaining life of these loans. |
Receivables from and payables to brokers, dealers and clearing organizations (policy) | Receivables from and Payables to Brokers, Dealers and Clearing Organizations Receivables from brokers, dealers and clearing organizations include deposits paid for securities borrowed, clearing deposits and net receivables arising from unsettled trades. Payables to brokers, dealers and clearing organizations include deposits received for securities loaned and net payables arising from unsettled trades. |
Property and equipment, net (policy) | Property and Equipment, Net Property and equipment is carried at cost and depreciated on a straight-line basis over their estimated useful lives, generally three to seven years. Leasehold improvements are depreciated over the lesser of their estimated useful lives or lease terms. An impairment loss is recognized if the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The costs of internally developed software that qualify for capitalization are included in the property and equipment, net line item. For qualifying internal-use software costs, capitalization begins when the conceptual formulation, design and testing of possible software project alternatives are complete and management authorizes and commits to funding the project. The Company does not capitalize pilot projects and projects where it believes that future economic benefits are less than probable. Technology development costs incurred in the development and enhancement of software used in connection with services provided by the Company that do not otherwise qualify for capitalization treatment are expensed as incurred. Completed projects, as well as other purchased software, are carried at cost and are amortized on a straight-line basis over their estimated useful lives. The estimated useful life of internally developed software is four years |
Goodwill and other intangibles, net (policy) | Goodwill and Other Intangibles, Net Goodwill is recognized as a result of business combinations and represents the excess of the purchase price over the fair value of net tangible assets and identifiable intangible assets. The Company evaluates goodwill for impairment on an annual basis as of November 30 and in interim periods when events or changes indicate the carrying value may not be recoverable. The Company has the option of performing a qualitative assessment of goodwill to determine whether it is more likely than not that the fair value of its equity is less than the carrying value. If it is more likely than not that the fair value exceeds the carrying value, then no further testing is necessary; otherwise, the Company must perform a two-step quantitative assessment of goodwill. The Company may elect to bypass the qualitative assessment and proceed directly to performing a two-step quantitative assessment. For the year ended December 31, 2018, the Company elected to perform a quantitative goodwill impairment assessment as the Company elected to perform a qualitative analysis in 2017. There have been no impairments to the carrying value of the Company's goodwill during the periods presented. The Company currently does not have any intangible assets with indefinite lives other than goodwill. The Company evaluates intangible assets with finite lives for impairment on an annual basis or when events or changes indicate the carrying value may not be recoverable. The Company also evaluates the remaining useful lives of intangible assets with finite lives each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. Customer relationship intangibles are amortized on an accelerated basis, while technology is amortized on a straight-line basis. For additional information on goodwill and other intangibles, net, see Note 10—Goodwill and Other Intangibles, Net |
Real estate owned and repossessed assets (policy) | Real Estate Owned and Repossessed AssetsReal estate owned and repossessed assets are included in the other assets line item in the consolidated balance sheet. Real estate owned represents real estate acquired through foreclosure and also includes those properties acquired through a deed in lieu of foreclosure or similar legal agreement. Both real estate owned and repossessed assets are carried at the lower of carrying value or fair value, less estimated selling costs. |
Equity and cost method investments (policy) | Equity Method, Cost Method and Other Investments 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, that are not required to be consolidated. These investments are reported in the other assets line item in the consolidated balance sheet. The Company recognizes a liability for all legally binding unfunded equity commitments to the investees in the other liabilities line item in the consolidated balance sheet. Under the equity method, the Company recognizes its share of the investee’s net income or loss in the gains on securities and other, net line item in the consolidated statement of income. The Company’s other investments include those accounted for using the proportional amortization method, whereby the initial cost of the investment is amortized in proportion to the tax credits and other tax benefits received and the net investment performance is recognized in the consolidated statement of income as a component of income tax expense. The Company evaluates its equity and cost method investments for impairment when events or changes indicate the carrying value may not be recoverable. If the impairment is determined to be other-than-temporary, the Company will recognize an impairment loss in the gains on securities and other, net line item equal to the difference between the expected realizable value and the carrying value of the investment. The Company is a member of, and owns capital stock in, the FHLB system. As a condition of its membership in the FHLB, the Company is required to maintain a FHLB stock investment which totaled $20 million and $36 million at December 31, 2018 and 2017 |
Customer payables (policy) | Deposits and Customer PayablesDeposits are primarily composed of sweep deposits held at bank subsidiaries, which represent uninvested cash balances in certain customer brokerage accounts. Customer payables primarily represent credit balances in customer brokerage accounts arising from deposits of funds and sales of securities and other funds pending completion of transactions. Customer payables primarily represent customer cash held by E*TRADE Securities. The Company pays interest on certain deposits and customer payables balances. |
Other borrowings (policy) | Other Borrowings Other borrowings includes securities sold under agreements to repurchase, FHLB advances, and borrowings from lines of credit. Securities sold under agreements to repurchase the same or similar securities, also known as repurchase agreements, are collateralized by fixed- and variable-rate mortgage-backed securities or investment grade securities. Repurchase agreements are treated as secured borrowings for financial statement purposes and the obligations to repurchase securities sold are therefore reflected as liabilities in the consolidated balance sheet. The FHLB provides the Company with reserve credit capacity and authorizes advances based on the security of pledged home mortgages and other assets (principally securities that are obligations of, or guaranteed by, the US Government) provided the Company meets certain creditworthiness standards. Prior to 2008, E*TRADE Bank's parent company ETB Holdings, Inc. (ETB Holdings) raised capital through the formation of trusts, which sold TRUPs in the capital markets. During the year ended December 31, 2018, the Company fully redeemed all previously outstanding TRUPs. For additional information on other borrowings, see Note 13—Other Borrowings |
Other liabilities (policy) | Other LiabilitiesOther liabilities includes accrued operating expenses and other liabilities. These liabilities are impacted by estimates for litigation and regulatory matters as well as estimates related to general operating expenses, such as incentive compensation and market data usage within communications expense. Management estimates reflect the probable liability as of the balance sheet date. In determining the adequacy of estimated liabilities, the Company performs ongoing evaluations based on available information. |
Interest income (policy) | Net Interest Income Interest income is recognized as earned through holding interest-earning assets, such as available-for-sale and held-to-maturity securities, margin receivables, loans and cash, and from securities lending transactions. Interest income also includes the impact of the Company’s hedging activities related to interest-earning assets. Interest expense is recognized as incurred through holding interest-bearing liabilities, such as corporate debt, other borrowings, customer payables and deposits, and from securities lending transactions. |
Commissions (policy) | Commissions 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 the active trader pricing tiers. For certain trade types, such as options contracts, the total commission earned varies based on contract volume. Commissions from customer transactions are recognized on a trade-date basis as the performance obligation is satisfied when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. |
Revenue from contract with customer [Policy Text Block] | Non-Interest Income The Company's significant accounting policies addressing non-interest income reflect the adoption of the new accounting standard, Revenue from Contracts with Customers, and all the related amendments effective January 1, 2018. The Company's adoption did not result in a change to the financial statements for the comparative periods. The core principle of the Company's policy for recognizing revenue from contracts with customers is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. This core principle is achieved by applying the following steps: • Identify the contract with the customer • Identify each performance obligation in the contract, which represents a promise in a contract to transfer a distinct good or service to the customer and is the unit of account • Determine the transaction price • Allocate the transaction price to each distinct performance obligation • Recognize revenue when, or as, the performance obligation is satisfied |
Fees and service charges (policy) | Fees and Service Charges The following policies address the most significant components of the Company's fees and service charges revenue based on agreed upon negotiated prices within the contracts: • Order Flow Revenue is generated from market centers that accept trade orders from certain customer transactions. Order flow revenue is recognized on a trade-date basis when the Company has satisfied its performance obligation by routing a trade order to the exchange or market maker. • Money Market Funds and Sweep Deposits Revenue is driven by fees earned from off-balance sheet customer cash. The fees vary based on the average daily balance and the federal funds rate or LIBOR plus a negotiated spread. Revenue is recognized over time as the performance obligation is satisfied. • Advisor Management and Custody Fees vary based on a percentage of average customer assets under management or under custody. Revenue is recognized over time as the services are provided. • Mutual Fund Service Fees are asset-based fees received from the funds and vary based on the amount of customer assets invested in each fund. Revenue is recognized over time as the performance obligation to provide shareholder services is satisfied. |
Other revenues (policy) | Other RevenueOther revenue includes fees from stock plan administration software and services provided to the Company's corporate services clients. These fees are recognized as the performance obligations are satisfied. |
Share-based payments (policy) | Share-Based Payments The Company recognizes compensation expense at the grant date fair value of a share-based payment award over the requisite service period less estimated forfeitures. Estimated forfeitures are based on the Company's historical experience and revised as needed based on actual forfeitures. Compensation expense for performance share units is also adjusted based on the Company’s estimated outcome of meeting the performance conditions. Share-based compensation expense is included in the compensation and benefits line item for employees and in the professional services line item for nonemployee members of the board of directors. For additional information on share-based compensation, see Note 18—Share-Based Compensation, Employee Incentive and Retirement Plans |
Advertising and market development (policy) | Advertising and Market DevelopmentAdvertising and market development includes production and placement of advertisements as well as customer promotions. Advertising production costs are expensed when the initial advertisement is run. |
Income taxes (policy) | Income Taxes Income tax expense (benefit) includes (1) deferred tax expense (benefit), which generally represents the net change in the deferred tax asset or liability balance during the year plus any change in valuation allowances, and (2) current tax expense (benefit), which represents the amount of tax currently payable to or receivable from a taxing authority. Deferred income taxes are recorded when revenues and expenses are recognized in different periods for financial statement purposes than for tax purposes. Deferred tax asset or liability account balances are calculated at the balance sheet date using current tax laws and rates in effect. Valuation allowances for deferred tax assets are established if it is determined, based on evaluation of available evidence at the time the determination is made, that it is more likely than not that some or all of the deferred tax assets will not be realized. Uncertain tax positions are only recognized to the extent it is more likely than not that the uncertain tax position will be sustained upon examination. For uncertain tax positions, a tax benefit is recognized for cases in which it is more than fifty percent likely of being sustained on ultimate settlement. Interest and penalties, if any, related to income tax matters are accrued in the income tax expense line item in the period they are incurred or such changes are enacted. For additional information on income taxes, see Note 15—Income Taxes |
Earnings per share (policy) | Earnings Per Share Basic earnings per share is computed by dividing net income available to common shareholders by the weighted-average common shares outstanding for the period. The computation of diluted earnings per share includes the potential impact of additional common share issuances related to unvested share-based payments and other contracts to issue common stock. For additional information, see Note 17—Earnings per Share |
Comprehensive income (policy) | Comprehensive Income The Company’s comprehensive income includes net income, unrealized gains (losses) on available-for-sale debt securities, excluding the impact of fair value hedging relationships on these securities, and foreign currency translation gains (losses), net of reclassification adjustments and related tax. |
Derivative instruments and hedging activities (policy) | 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. Cash flows from derivative instruments in hedging relationships are classified in the same category on the consolidated statement of cash flows as the cash flows from the items being hedged. Cash flows related to variation margin payments are classified as operating cash flows. Accounting for derivatives differs depending on whether a derivative is designated as a hedge based on the applicable accounting guidance and, if designated as a hedge, the type of hedge designation. Derivative instruments designated in hedging relationships that mitigate the exposure to the variability in expected future cash flows or other forecasted transactions are considered cash flow hedges. Derivative instruments in hedging relationships that mitigate exposure to changes in the fair value of assets or liabilities are considered fair value hedges. In order to qualify for hedge accounting, the Company formally documents at inception all relationships between hedging instruments and hedged items and the risk management objective and strategy for each hedge transaction. All of the Company's derivative instruments were designated in fair value hedging relationships at December 31, 2018 and December 31, 2017. For each fair value hedge, both the gain or loss on the derivative, including interest 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, fair value hedging adjustments, previously referred to as hedge ineffectiveness, are included within net interest income. Prior period amounts have not been reclassified to current period presentation and continue to be reflected within gains on securities and other, net. The earnings impact of interest accruals on the derivatives are reflected in the interest income line item in the consolidated statement of income. The Company also recognizes certain contracts and commitments as derivatives if the characteristics of those contracts and commitments meet the definition of a derivative. For additional information on derivative instruments and hedging activities, see Note 8—Derivative Instruments and Hedging Activities |
Fair value (policy) | Fair Value 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. The Company determines the fair value for its financial instruments and for nonfinancial assets and nonfinancial liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. In addition, the Company determines the fair value for nonfinancial assets and nonfinancial liabilities on a nonrecurring basis as required during impairment testing or by other accounting guidance. For additional information on fair value, see Note 4 — |
New accounting pronouncements (policy) | Adoption of New Accounting Standards Revenue from Contracts with Customers In May 2014, the Financial Accounting Standards Board (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 components of net revenue, see Note 3—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 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 now classifies debt extinguishment costs within cash flows from financing activities. The Company reclassified cash flows for the years ended December 31, 2017 and 2016 as a result of this adoption, the most significant of which related to $49 million of debt extinguishment costs incurred for the year ended December 31, 2017. 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 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 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 impact the Company's accounting conclusions for the Trust Company of America (TCA) or Capital One acquisitions. 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. 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 8—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 used the portfolio approach to record a $14 million increase to retained earnings and a corresponding decrease to accumulated other comprehensive income. The amount of the reclassification related only to the change in the federal corporate tax rate. Changes to Disclosure Requirements for Fair Value Measurements In August 2018, the FASB amended the guidance on the disclosure requirements for fair value measurements as part of its disclosure effectiveness project. The amended guidance eliminates several disclosure requirements including the policies related to valuation processes for Level 3 fair value measurements, the timing of transfers between levels of the fair value hierarchy and the amount of and reasons for transfers between Level 1 and Level 2. The amended guidance adds an explicit disclosure requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods. Early adoption is permitted. The Company early adopted this guidance as of September 30, 2018 on a retrospective basis. 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 right-of-use (ROU) assets and lease liabilities on the balance sheet for the rights and obligations created by all qualifying leases. 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 became effective for interim and annual periods beginning on January 1, 2019. A modified retrospective transition approach is required, with certain practical expedients available. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company adopted the new standard on its effective date of January 1, 2019, and elected to use the effective date as the date of initial application. Therefore, restated financial information and the additional disclosures required under the new standard will not be provided for the comparative periods presented. The Company elected to apply the "package of practical expedients," which permits not reassessing prior conclusions on existing leases regarding lease identification, lease classification and initial direct costs. The Company also elected to not apply the use-of-hindsight practical expedient, and the practical expedient relating to land easements is not applicable. Adoption of the standard did not have a material impact on the Company’s results of operations or cash flows. The most significant effect of adoption was the recognition of right-of-use assets and lease liabilities for operating leases on the balance sheet. At adoption, the Company recognized lease liabilities of $211 million based on incremental borrowing rates as of December 31, 2018 , which includes leases and lease terms in effect as of the implementation date . The Company also recognized ROU assets of $193 million at adoption, which represents the measurement of the lease liabilities, lease payments made to lessors, net of lease incentives received, as well as initial direct costs incurred by the lessee. Effective January 1, 2019, ROU assets are included in the other assets line item and lease liabilities in the other liabilities line item on the consolidated balance sheet. The Company elected to apply the short-term lease recognition exemption for real estate leases with an initial term of 12 months or less and the practical expedient to not separate lease and non-lease components for all real estate leases. The Company has evaluated the new guidance, including considerations relating to disclosures and controls and the amended presentation and disclosures will be reflected in interim reporting beginning in the first quarter of 2019. 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 result in credit losses on impaired available-for-sale debt securities being recorded through an allowance for credit losses. 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'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. Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract In August 2018, the FASB amended the guidance on accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. The amended guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance will be effective for interim and annual periods beginning on January 1, 2020, and should be applied either retrospectively or prospectively. The Company is currently evaluating the impact of the new accounting guidance on the Company's financial condition, results of operations and cash flows. Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes |
Acquisition and Restructuring (
Acquisition and Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the allocation of the purchase price to the net assets of TCA as of April 9, 2018 (dollars in millions): April 9, 2018 Purchase price $ 275 Fair value of net assets acquired 160 Goodwill $ 115 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of assets acquired and liabilities assumed at the date of acquisition (dollars in millions): April 9, 2018 Assets Cash and equivalents $ 239 Available-for-sale securities 554 Other intangibles 140 Other (1) 23 Total assets acquired 956 Liabilities Deposits 790 Other liabilities 6 Total liabilities assumed 796 Net assets acquired $ 160 (1) |
Schedule of Acquired Finite-Lived Intangible Assets by Major Class | The following table summarizes the fair value and estimated useful lives of the intangible assets at the date of acquisition (dollars in millions): Estimated Fair Value Estimated Useful Life (In Years) Customer Relationships $ 119 22 Technology 20 5 Trade name 1 2 Total intangible assets $ 140 |
Restructuring and Related Costs | The following table shows the components of restructuring and acquisition-related activities expense (dollars in millions): Year Ended December 31, 2018 2017 2016 Restructuring activities $ 4 $ 12 $ 28 Acquisition-related costs 3 3 7 Total restructuring and acquisition-related activities $ 7 $ 15 $ 35 |
Net Revenue (Tables)
Net Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The following table presents the significant components of total net revenue (dollars in millions): Year Ended December 31, 2018 2017 2016 Net interest income $ 1,846 $ 1,485 $ 1,148 Commissions 498 441 442 Fees and service charges 431 369 268 Gains on securities and other, net 53 28 42 Other revenue 45 43 41 Total net revenue $ 2,873 $ 2,366 $ 1,941 Year Ended December 31, 2018 2017 2016 Fees and service charges: Order flow revenue $ 174 $ 135 $ 96 Money market funds and sweep deposits revenue 71 92 50 Advisor management and custody fees 64 36 28 Mutual fund service fees 48 39 36 Foreign exchange revenue 25 26 21 Reorganization fees 14 16 16 Other fees and service charges 35 25 21 Total fees and service charges $ 431 $ 369 $ 268 |
Interest Income and Interest Expense Disclosure | The following table presents the significant components of interest income and interest expense (dollars in millions): Year Ended December 31, 2018 2017 2016 Interest income: Cash and equivalents $ 11 $ 9 $ 7 Cash segregated under federal or other regulations 15 12 6 Investment securities (1) 1,241 962 691 Margin receivables 491 320 249 Loans 128 157 191 Broker-related receivables and other 14 3 1 Subtotal interest income 1,900 1,463 1,145 Other interest revenue (2) 109 108 88 Total interest income 2,009 1,571 1,233 Interest expense: Deposits 51 4 3 Customer payables 22 5 5 Broker-related payables and other 10 — — Other borrowings 25 22 18 Corporate debt 46 48 54 Subtotal interest expense 154 79 80 Other interest expense (3) 9 7 5 Total interest expense 163 86 85 Net interest income $ 1,846 $ 1,485 $ 1,148 (1) For the year ended December 31, 2018 , includes $19 million of net fair value hedging adjustments. See Note 8—Derivative Instruments and Hedging Activities for additional information. (2) Represents interest income on securities loaned. (3) Represents interest expense on securities borrowed. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 Loans receivable: One- to four-family Appraised value $ 594,700 $17,000 - $2,000,000 Home equity Appraised value $ 397,700 $73,000 - $1,060,000 Real estate owned Appraised value $ 329,500 $57,900 - $900,000 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 tables present the significant components of assets and liabilities measured at fair value (dollars in millions): Level 1 Level 2 Level 3 Total Fair Value December 31, 2018: Recurring fair value measurements: Assets Available-for-sale securities: Agency mortgage-backed securities $ — $ 22,162 $ — $ 22,162 Agency debentures — 839 — 839 Agency debt securities — 139 — 139 Municipal bonds — 12 — 12 Other — 1 — 1 Total available-for-sale securities — 23,153 — 23,153 Derivative assets (1) — 1 — 1 Publicly traded equity securities (2) 7 — — 7 Total assets measured at fair value on a recurring basis (3) $ 7 $ 23,154 $ — $ 23,161 Nonrecurring fair value measurements: Loans receivable, net: One- to four-family $ — $ — $ 17 $ 17 Home equity — — 6 6 Total loans receivable — — 23 23 Other assets: Real estate owned — — 10 10 Total assets measured at fair value on a nonrecurring basis (4) $ — $ — $ 33 $ 33 (1) All derivative assets were interest rate contracts at December 31, 2018 . Information related to derivative instruments is detailed in Note 8—Derivative Instruments and Hedging Activities . (2) Consists of investments in a mutual fund related to the CRA. At December 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 36% of the Company’s total assets at December 31, 2018 . (4) Represents the fair value of assets prior to deducting estimated selling costs that were carried on the consolidated balance sheet at December 31, 2018 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 8—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 |
Gains and Losses, Fair Value Measurements, Nonrecurring | The following table presents (gains) and losses recognized on assets measured at fair value on a nonrecurring basis (dollars in millions): Year Ended December 31, 2018 2017 2016 One- to four-family $ 3 $ 4 $ 4 Home equity (1 ) 5 12 Total losses on loans receivable measured at fair value $ 2 $ 9 $ 16 |
Fair Value, by Balance Sheet Grouping | The following tables present 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): December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 2,333 $ 2,333 $ — $ — $ 2,333 Cash segregated under federal or other regulations $ 1,011 $ 1,011 $ — $ — $ 1,011 Held-to-maturity securities: Agency mortgage-backed securities $ 18,085 $ — $ 17,748 $ — $ 17,748 Agency debentures 1,824 — 1,808 — 1,808 Agency debt securities 1,975 — 1,935 — 1,935 Total held-to-maturity securities $ 21,884 $ — $ 21,491 $ — $ 21,491 Margin receivables (1) $ 9,560 $ 9,560 $ 9,560 Loans receivable, net: One- to four-family $ 1,069 $ — $ — $ 1,099 $ 1,099 Home equity 810 — — 825 825 Consumer 117 — — 115 115 Securities-based lending 107 — 107 — 107 Total loans receivable, net (2) $ 2,103 $ — $ 107 $ 2,039 $ 2,146 Receivables from brokers, dealers and clearing organizations (1) $ 760 $ — $ 760 $ — $ 760 Other assets (1)(3) $ 36 $ — $ 36 $ — $ 36 Liabilities Deposits $ 45,313 $ — $ 45,313 $ — $ 45,313 Customer payables $ 10,117 $ — $ 10,117 $ — $ 10,117 Payables to brokers, dealers and clearing organizations $ 948 $ — $ 948 $ — $ 948 Corporate debt $ 1,409 $ — $ 1,372 $ — $ 1,372 (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 $12.9 billion at December 31, 2018 . Of this amount, $2.3 billion had been pledged or sold in connection with securities loaned and deposits with clearing organizations at December 31, 2018 . (2) The carrying value of loans receivable, net includes the allowance for loan losses of $37 million and loans that are recorded at fair value on a nonrecurring basis at December 31, 2018 . (3) The $36 million in other assets at December 31, 2018 December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash and equivalents $ 931 $ 931 $ — $ — $ 931 Cash 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 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 |
Offsetting Assets and Liabili_2
Offsetting Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 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)(2) Financial Instruments Collateral Received or Pledged (Including Cash) Net Amount December 31, 2018 Assets: Deposits paid for securities borrowed (3) $ 176 $ — $ 176 $ (104 ) $ (61 ) $ 11 Derivative assets 1 — 1 — — 1 Total $ 177 $ — $ 177 $ (104 ) $ (61 ) $ 12 Liabilities: Deposits received for securities loaned (4) $ 887 $ — $ 887 $ (104 ) $ (700 ) $ 83 Total $ 887 $ — $ 887 $ (104 ) $ (700 ) $ 83 December 31, 2017 Assets: Deposits paid for securities borrowed (3) $ 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 lending program are reflected in other assets. Deposits received for securities loaned are reflected in the payables to brokers, dealers and clearing organizations line item in the consolidated balance sheet. (2) Derivative assets are reflected in the other assets line item in the consolidated balance sheet. Derivative liabilities are reflected in the other liabilities line item in the consolidated balance sheet. (3) Included in the gross amounts of deposits paid for securities borrowed was $65 million and $347 million at December 31, 2018 and 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. (4) Included in the gross amounts of deposits received for securities loaned was $543 million and $821 million at December 31, 2018 and 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 $131 million of centrally cleared derivative contract assets and $9 million of centrally cleared derivative contract liabilities at December 31, 2017. See Note 8—Derivative Instruments and Hedging Activities for additional information. Also 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-t_2
Available-for-Sale and Held-to-Maturity Securities (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018: Available-for-sale securities: (1) Agency mortgage-backed securities $ 22,140 $ 327 $ (305 ) $ 22,162 Agency debentures 833 13 (7 ) 839 Agency debt securities 140 1 (2 ) 139 Municipal bonds 12 — — 12 Other 1 — — 1 Total available-for-sale securities $ 23,126 $ 341 $ (314 ) $ 23,153 Held-to-maturity securities: (1) Agency mortgage-backed securities $ 18,085 $ 26 $ (363 ) $ 17,748 Agency debentures 1,824 — (16 ) 1,808 Agency debt securities 1,975 4 (44 ) 1,935 Total held-to-maturity securities $ 21,884 $ 30 $ (423 ) $ 21,491 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 year ended December 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 year ended December 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 16—Shareholders' Equity for information on the impact to accumulated other comprehensive income. (2) Consists of investments in a mutual fund related to the CRA. At December 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): December 31, 2018 Amortized Cost Fair Value Available-for-sale debt securities: Due within one year $ 4 $ 4 Due within one to five years 864 853 Due within five to ten years 9,706 9,899 Due after ten years 12,552 12,397 Total available-for-sale debt securities $ 23,126 $ 23,153 Held-to-maturity debt securities: Due within one year $ 56 $ 56 Due within one to five years 2,062 2,045 Due within five to ten years 5,115 5,031 Due after ten years 14,651 14,359 Total held-to-maturity debt securities $ 21,884 $ 21,491 |
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 December 31, 2018: Available-for-sale securities: Agency mortgage-backed securities $ 2,945 $ (34 ) $ 7,826 $ (271 ) $ 10,771 $ (305 ) Agency debentures 383 (1 ) 116 (6 ) 499 (7 ) Agency debt securities — — 30 (2 ) 30 (2 ) Municipal bonds — — 9 — 9 — Other 1 — — — 1 — Total temporarily impaired available-for-sale securities $ 3,329 $ (35 ) $ 7,981 $ (279 ) $ 11,310 $ (314 ) Held-to-maturity securities: Agency mortgage-backed securities $ 2,802 $ (31 ) $ 11,587 $ (332 ) $ 14,389 $ (363 ) Agency debentures 776 (2 ) 666 (14 ) 1,442 (16 ) Agency debt securities 97 (1 ) 1,487 (43 ) 1,584 (44 ) Total temporarily impaired held-to-maturity securities $ 3,675 $ (34 ) $ 13,740 $ (389 ) $ 17,415 $ (423 ) 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): Year Ended December 31, 2018 2017 2016 Gains on available-for-sale securities (1) $ 98 $ 40 $ 54 Losses on available-for-sale securities (1) (54 ) — (1 ) Subtotal 44 40 53 Equity method investment income (loss) and other (2)(3) 9 (12 ) (11 ) Gains on securities and other, net $ 53 $ 28 $ 42 (1) In August 2018, the Company sold available-for-sale securities and reinvested the sale proceeds in agency-backed securities at current market rates. A subset of these securities had been purchased in lower interest rate environments and were in unrealized loss positions at the time of sale. As both the change in intent related to these securities and the sale of these securities occurred within the same reporting period, the Company presented the losses on the sale of these securities within the gains on securities and other, net line item. (2) Includes a $5 million gain on the sale of our Chicago Stock Exchange investment for the year ended December 31, 2018 . (3) Includes losses of $14 million and $6 million on hedge ineffectiveness for the years ended December 31, 2017 and 2016. 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 |
Loans Receivable, Net (Tables)
Loans Receivable, Net (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 One- to four-family $ 958 $ 48 $ 9 $ 56 $ 1,071 $ 7 $ (9 ) $ 1,069 Home equity 774 25 13 24 836 — (26 ) 810 Consumer 117 1 — — 118 1 (2 ) 117 Securities-based lending (1) 107 — — — 107 — — 107 Total loans receivable $ 1,956 $ 74 $ 22 $ 80 $ 2,132 $ 8 $ (37 ) $ 2,103 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 173 3 — — 176 2 (4 ) 174 Securities-based lending (1) 12 — — — 12 — — 12 Total loans receivable $ 2,468 $ 98 $ 37 $ 114 $ 2,717 $ 11 $ (74 ) $ 2,654 (1) In 2017 we introduced E*TRADE Line of Credit, a securities-based lending product, where customers can borrow against the market value of their securities pledged as collateral. The unused credit line amount totaled $173 million and $35 million |
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 December 31, December 31, Current LTV/CLTV (1) 2018 2017 2018 2017 <=80% $ 823 $ 1,031 $ 454 $ 531 80%-100% 165 256 215 291 100%-120% 45 91 110 176 >120% 38 54 57 99 Total mortgage loans receivable $ 1,071 $ 1,432 $ 836 $ 1,097 Average estimated current LTV/CLTV (2) 66 % 70 % 80 % 84 % Average LTV/CLTV at loan origination (3) 70 % 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 December 31, December 31, Current FICO 2018 2017 2018 2017 >=720 $ 617 $ 805 $ 442 $ 548 719 - 700 89 138 78 106 699 - 680 80 105 70 93 679 - 660 66 78 56 79 659 - 620 79 122 80 103 <620 140 184 110 168 Total mortgage loans receivable $ 1,071 $ 1,432 $ 836 $ 1,097 |
Loans by Delinquency Category and Non-Performing Loans | The following table presents nonperforming loans by loan portfolio (dollars in millions): December 31, 2018 2017 One- to four-family $ 139 $ 192 Home equity 71 98 Total nonperforming loans receivable $ 210 $ 290 |
Loans Receivable, Allowance for Loan Losses | The following table presents the allowance for loan losses by loan portfolio (dollars in millions): One- to Four-Family Home Equity Consumer Total (1) December 31, December 31, December 31, December 31, 2018 2017 2018 2017 2018 2017 2018 2017 General reserve: Quantitative component $ 4 $ 15 $ 6 $ 14 $ 2 $ 4 $ 12 $ 33 Qualitative component — 3 1 3 — — 1 6 Specific valuation allowance 5 6 19 29 — — 24 35 Total allowance for loan losses $ 9 $ 24 $ 26 $ 46 $ 2 $ 4 $ 37 $ 74 Allowance as a % of loans (2) 0.8 % 1.6 % 3.1 % 4.2 % 1.0 % 2.1 % 1.7 % 2.7 % (1) Securities-based lending was launched in 2017. These loans were fully collateralized by cash and securities with fair values in excess of borrowings at both December 31, 2018 and 2017, respectively. (2) Recorded Investment Allowance for Loan Losses December 31, December 31, 2018 2017 2018 2017 Collectively evaluated for impairment: One- to four-family $ 891 $ 1,228 $ 4 $ 18 Home equity 698 932 7 17 Consumer 119 178 2 4 Securities-based lending 107 12 — — Total collectively evaluated for impairment 1,815 2,350 13 39 Individually evaluated for impairment: One- to four-family 187 213 5 6 Home equity 138 165 19 29 Total individually evaluated for impairment 325 378 24 35 Total $ 2,140 $ 2,728 $ 37 $ 74 Year Ended December 31, 2018 One- to Four-Family Home Equity Consumer Total Allowance for loan losses, beginning of period $ 24 $ 46 $ 4 $ 74 Provision (benefit) for loan losses (22 ) (63 ) (1 ) (86 ) Charge-offs (1) — — (4 ) (4 ) Recoveries (2) 7 43 3 53 Net (charge-offs) recoveries 7 43 (1 ) 49 Allowance for loan losses, end of period (3) $ 9 $ 26 $ 2 $ 37 Year Ended December 31, 2017 One- to Home Consumer Total Allowance for loan losses, beginning of period $ 45 $ 171 $ 5 $ 221 Provision (benefit) for loan losses (29 ) (141 ) 2 (168 ) Charge-offs (1) — (7 ) (6 ) (13 ) Recoveries 8 23 3 34 Net (charge-offs) recoveries 8 16 (3 ) 21 Allowance for loan losses, end of period (3) $ 24 $ 46 $ 4 $ 74 Year Ended December 31, 2016 One- to Home Consumer Total Allowance for loan losses, beginning of period $ 40 $ 307 $ 6 $ 353 Provision (benefit) for loan losses (2 ) (148 ) 1 (149 ) Charge-offs (1 ) (17 ) (7 ) (25 ) Recoveries 8 29 5 42 Net (charge-offs) recoveries 7 12 (2 ) 17 Allowance for loan losses, end of period $ 45 $ 171 $ 5 $ 221 (1) Includes benefits resulting from recoveries of partial charge-offs due to principal paydowns or payoffs for the periods presented. The benefits included in the charge-offs line item exceeded other charge-offs for both one-to-four family and home equity loan portfolios during the year ended 2018 and for the one-to-four family loan portfolio during the year ended 2017. (2) Includes $15 million of recoveries recognized during the year ended December 31, 2018 related to the sale of previously charged-off home equity loans. (3) |
Impaired Financing Receivables | The following table presents detailed information related to the Company’s TDRs and specific valuation allowances (dollars in millions): December 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 $ 50 $ 5 $ 45 $ 54 $ 6 $ 48 Home equity $ 60 $ 19 $ 41 $ 83 $ 29 $ 54 Without a recorded allowance: (1) One- to four-family $ 137 $ — $ 137 $ 159 $ — $ 159 Home equity $ 78 $ — $ 78 $ 82 $ — $ 82 Total: One- to four-family $ 187 $ 5 $ 182 $ 213 $ 6 $ 207 Home equity $ 138 $ 19 $ 119 $ 165 $ 29 $ 136 (1) (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) December 31, 2018 One- to four-family $ 87 $ 61 $ 12 $ 4 $ 23 $ 187 Home equity 90 23 8 5 12 138 Total $ 177 $ 84 $ 20 $ 9 $ 35 $ 325 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 $55 million and $121 million for one-to four-family and home equity loans, respectively, as of December 31, 2018 and $67 million and $144 million , respectively, as of December 31, 2017 . (4) Total recorded investment in TDRs at December 31, 2018 consisted of $253 million of loans modified as TDRs and $72 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 monthly average recorded investment and interest income recognized both on a cash and accrual basis for the Company's TDRs during the years ended December 31, 2018, 2017 and 2016 (dollars in millions): Average Recorded Investment Interest Income Recognized December 31, December 31, 2018 2017 2016 2018 2017 2016 One- to four-family $ 201 $ 221 $ 269 $ 9 $ 9 $ 11 Home equity 152 179 204 13 16 17 Total $ 353 $ 400 $ 473 $ 22 $ 25 $ 28 |
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 Principal Forgiven Re-age/ Other with Other (1) Total December 31, 2018 One- to four-family 49 $ — $ 14 $ — $ 7 $ 21 Home equity 91 — 5 1 1 7 Total 140 $ — $ 19 $ 1 $ 8 $ 28 December 31, 2017 One- to four-family 40 $ — $ 13 $ 1 $ 4 $ 18 Home equity 294 — 12 1 9 22 Total 334 $ — $ 25 $ 2 $ 13 $ 40 December 31, 2016 One- to four-family 47 $ 1 $ 8 $ 2 $ 7 $ 18 Home equity 518 — 8 3 25 36 Total 565 $ 1 $ 16 $ 5 $ 32 $ 54 (1) |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) - Fair Value Hedging [Member] | 12 Months Ended |
Dec. 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) December 31, 2018 Interest rate contracts: Fair value hedges $ 9,763 $ 1 $ — $ 1 Total derivatives designated as hedging instruments (4) $ 9,763 $ 1 $ — $ 1 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) |
Cumulative Basis Adjustments Fair Value Hedges | 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 December 31, 2018 Available-for-sale securities (3) $ 13,203 $ (10 ) $ (385 ) (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. (3) Includes the amortized cost basis of 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. As of December 31, 2018 , the amortized cost basis of this portfolio was $810 million , the amount of the designated hedged items was $192 million and the cumulative basis adjustments associated with these hedges was $6 million |
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 (dollars in millions): Interest Income Year Ended December 31, 2018 Total interest income $ 2,009 Effects of fair value hedging on total interest income (1)(2) Agency debentures: Amounts recognized as interest accruals on derivatives $ (3 ) Changes in fair value of hedged items (69 ) Changes in fair value of derivatives 68 Net loss on fair value hedging relationships - agency debentures (4 ) Agency mortgage backed securities: Amounts recognized as interest accruals on derivatives (15 ) Amortization of basis adjustments from discontinued hedges 24 Changes in fair value of hedged items (111 ) Changes in fair value of derivatives 93 Net loss on fair value hedging relationships - agency mortgage backed securities (9 ) Total net loss on fair value hedging relationships $ (13 ) (1) Excludes interest income accruals on hedged items and amounts recognized upon the sale of securities attributable to fair value hedge accounting. (2) Excludes interest on variation margin related to centrally cleared derivative contracts. 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 on the consolidated statement of income (dollars in millions): Year Ended December 31, 2017 2016 Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Hedging Instrument Hedged Item Hedge Ineffectiveness (1) Agency debentures $ 1 $ (3 ) $ (2 ) $ 28 $ (32 ) $ (4 ) Agency mortgage-backed securities 36 (48 ) (12 ) 42 (44 ) (2 ) Total gains (losses) included in earnings $ 37 $ (51 ) $ (14 ) $ 70 $ (76 ) $ (6 ) (1) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment, net consisted of the following asset classes at December 31, 2018 and 2017 (dollars in millions): December 31, 2018 December 31, 2017 Gross Amount Accumulated Depreciation and Amortization Net Amount Gross Amount Accumulated Depreciation and Amortization Net Amount Software $ 416 $ (297 ) $ 119 $ 403 $ (289 ) $ 114 Equipment 147 (117 ) 30 132 (101 ) 31 Leasehold improvements 131 (95 ) 36 122 (98 ) 24 Buildings 72 (34 ) 38 72 (32 ) 40 Furniture and fixtures 13 (3 ) 10 7 (4 ) 3 Land 3 — 3 3 — 3 Construction in progress (1) 45 — 45 38 — 38 Total (2) $ 827 $ (546 ) $ 281 $ 777 $ (524 ) $ 253 (1) Construction in progress includes software in the process of development of $36 million and $22 million at December 31, 2018 and 2017 , respectively. (2) |
Schedule of Sale Leaseback Transactions | The obligation for future minimum lease payments and minimum sublease proceeds to be received under the Alpharetta, Georgia lease is as follows (dollars in millions): Obligation for Minimum Lease Payments Minimum Sublease Proceeds Years ending December 31, 2019 $ 5 $ (3 ) 2020 5 (3 ) 2021 5 (3 ) 2022 5 (3 ) 2023 5 — Thereafter 4 — Total $ 29 $ (12 ) |
Goodwill and Other Intangible_2
Goodwill and Other Intangibles, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The following table outlines the Company's other intangible assets with finite lives (dollars in millions): December 31, 2018 Weighted Average Weighted Average Remaining Useful Life (Years) Gross Amount Accumulated Amortization Net Amount Customer relationships 18 13 $ 786 $ (345 ) $ 441 Technology 6 5 68 (19 ) 49 Trade name 2 1 4 (3 ) 1 Total $ 858 $ (367 ) $ 491 December 31, 2017 Weighted Average Weighted Average Remaining Useful Life (Years) Gross Amount Accumulated Amortization Net Amount Customer relationships 18 10 $ 553 $ (309 ) $ 244 Technology 7 6 48 (9 ) 39 Trade name 2 1 3 (2 ) 1 Total $ 604 $ (320 ) $ 284 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Assuming no future impairments of other intangibles or additional acquisitions or dispositions, the following table presents the Company's future annual amortization expense (dollars in millions): Years ending December 31, 2019 $ 60 2020 58 2021 57 2022 55 2023 49 Thereafter 212 Total future amortization expense $ 491 |
Receivables from and Payables_2
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Due to and from Broker-Dealers and Clearing Organizations [Abstract] | |
Schedule of Due to (from) Broker-Dealers and Clearing Organizations [Table Text Block] | Receivables from and payables to brokers, dealers and clearing organizations consist of the following (in millions): December 31, 2018 2017 Receivables: Securities borrowed $ 140 $ 740 Receivables from clearing organizations 555 376 Other 65 62 Total $ 760 $ 1,178 Payables: Securities loaned $ 887 $ 1,373 Payables to clearing organizations 11 123 Other 50 46 Total $ 948 $ 1,542 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deposits [Abstract] | |
Deposit Liabilities, Type | The following table presents the significant components of deposits (dollars in millions): December 31, 2018 2017 Sweep deposits $ 39,322 $ 37,734 Savings deposits 4,133 2,912 Other deposits (1) 1,858 2,096 Total deposits $ 45,313 $ 42,742 (1) Includes checking deposits, money market deposits and certificates of deposit. As of December 31, 2018 and 2017, the Company had $193 million and $207 million |
Other Borrowings (Tables)
Other Borrowings (Tables) | 12 Months Ended |
Dec. 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): December 31, 2018 2017 FHLB advances $ — $ 500 Trust preferred securities — 410 Total other borrowings $ — $ 910 |
Corporate Debt (Tables)
Corporate Debt (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018 Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (4 ) $ 596 3.80% Senior Notes, due 2027 400 (3 ) 397 4.50% Senior Notes, due 2028 420 (4 ) 416 Total corporate debt $ 1,420 $ (11 ) $ 1,409 December 31, 2017 Interest-bearing notes: 2.95% Senior Notes, due 2022 $ 600 $ (5 ) $ 595 3.80% Senior Notes, due 2027 400 (4 ) 396 Total corporate debt $ 1,000 $ (9 ) $ 991 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The components of income tax expense for the years ended December 31, 2018 , 2017 and 2016 were as follows (dollars in millions): Year Ended December 31, 2018 2017 2016 Current income tax expense (benefit): State $ 13 $ (11 ) $ 3 Foreign — — 2 Total current 13 (11 ) 5 Deferred income tax expense (benefit): Federal 266 399 285 State 73 51 (10 ) Total deferred 339 450 275 Non-current income tax expense (1) 14 11 6 Income tax expense $ 366 $ 450 $ 286 (1) |
Schedule of Unrecognized Tax Benefits Roll Forward | The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2018 , 2017 , and 2016 (dollars in millions): Year Ended December 31, 2018 2017 2016 Unrecognized tax benefits, beginning of period $ 25 $ 28 $ 29 Additions based on tax positions related to prior years 3 1 1 Additions based on tax positions related to current year 9 11 4 Reductions based on tax positions related to prior years — (3 ) (3 ) Settlements with taxing authorities (2 ) (6 ) (1 ) Statute of limitations lapses (4 ) (6 ) (2 ) Unrecognized tax benefits, end of period $ 31 $ 25 $ 28 |
Summary of Income Tax Contingencies | The following table summarizes the tax years that are either currently under examination or remain open under the statute of limitations and subject to examination by the major tax jurisdictions in which the Company operates: Jurisdiction Open Tax Years Hong Kong 2012-2018 United Kingdom 2016-2017 United States 2015-2018 Various states (1) 2013-2018 |
Schedule of Deferred Tax Assets and Liabilities | The temporary differences and tax carryforwards that created deferred tax assets and deferred tax liabilities at December 31, 2018 and 2017 are summarized in the following table (dollars in millions): December 31, 2018 2017 Deferred tax assets: Net operating losses $ 162 $ 349 Reserves and allowances, net 105 155 Financial instrument valuations 54 35 Deferred compensation 34 34 Tax credits 69 68 Other 1 18 Total deferred tax assets 425 659 Valuation allowance (20 ) (23 ) Total deferred tax assets, net of valuation allowance 405 636 Deferred tax liabilities: Depreciation and amortization (413 ) (385 ) Other (2 ) — Total deferred tax liabilities (415 ) (385 ) Deferred tax assets (liabilities), net $ (10 ) $ 251 |
Summary of Valuation Allowance | The following table provides a reconciliation of the beginning and ending amount of valuation allowance for the years ended December 31, 2018 , 2017 , and 2016 (dollars in millions): Year Ended December 31, 2018 2017 2016 Valuation allowance, beginning of period $ (23 ) $ (35 ) $ (82 ) Additions related to reduced federal benefit — (4 ) — Reductions related to the wind-down of foreign operations 2 14 — Reductions related to state valuation allowance release 1 2 47 Valuation allowance, end of period $ (20 ) $ (23 ) $ (35 ) |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate differed from the federal statutory rate as summarized in the following table for the years ended December 31, 2018 , 2017 and 2016 : Year Ended December 31, 2018 2017 2016 Federal statutory tax rate 21.0 % 35.0 % 35.0 % State income taxes, net of federal tax benefit 5.1 4.2 3.9 Difference between statutory rate and foreign effective tax rate — — 0.2 Tax exempt income — — (0.1 ) Disallowed executive compensation 0.2 0.1 0.2 Change in valuation allowances — (0.1 ) (5.5 ) Tax credits (0.1 ) (0.3 ) (0.7 ) Estimated reserve for uncertain tax positions 0.2 (0.3 ) 0.1 Deferred tax adjustments (0.5 ) (0.3 ) 1.3 Tax reform adjustments — 5.5 — Excess tax benefit on share-based compensation (0.6 ) (0.7 ) — Other 0.5 (0.9 ) (0.3 ) Effective tax rate 25.8 % 42.2 % 34.1 % |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 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 December 31, Description Issuance Date Per Annum Dividend Rate Total Shares Outstanding Liquidation Preference per Share 2018 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): Year Ended December 31, 2018 Year Ended December 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 7/26/2018 8/31/2018 9/17/2018 $ 29.38 12 8/2/2017 8/31/2017 9/15/2017 $ 29.38 12 Series B (1) 7/26/2018 8/31/2018 9/17/2018 $ 4,107.50 12 Total $ 36 $ 25 (1) |
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 (203 ) Amounts reclassified from accumulated other comprehensive loss (31 ) Transfer of held-to-maturity securities to available-for-sale securities (2) 6 Net change (228 ) Cumulative effect of hedge accounting adoption (7 ) Reclassification of tax effects due to federal tax reform (14 ) Balance, December 31, 2018 (3) $ (275 ) (1) During the year ended December 31, 2018 , the accumulated other comprehensive loss activity was 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 year ended December 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 $22 million at December 31, 2018 of which $16 million is related to the transfer of available-for-sale securities to held-to-maturity securities during the year ended December 31, 2018. Available-for-Sale Securities Foreign Currency Translation Total Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) Other comprehensive income before reclassifications 137 — 137 Amounts reclassified from accumulated other comprehensive loss (24 ) (2 ) (26 ) Net change 113 (2 ) 111 Balance, December 31, 2017 $ (26 ) $ — $ (26 ) Available-for-Sale Foreign Total Balance, December 31, 2015 $ (101 ) $ 2 $ (99 ) Other comprehensive loss before reclassifications (5 ) — (5 ) Amounts reclassified from accumulated other comprehensive loss (33 ) — (33 ) Net change (38 ) — (38 ) Balance, December 31, 2016 $ (139 ) $ 2 $ (137 ) |
Components of Other Comprehensive Income (Loss) | The following table presents other comprehensive income (loss) activity and the related tax effect (dollars in millions): Year Ended December 31, 2018 2017 2016 Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Before Tax Tax Effect After Tax Other comprehensive income (loss) Available-for-sale securities: Unrealized gains (losses), net $ (272 ) $ 69 $ (203 ) $ 213 $ (76 ) $ 137 $ (10 ) $ 5 $ (5 ) Reclassification into earnings, net (42 ) 11 (31 ) (39 ) 15 (24 ) (53 ) 20 (33 ) Transfer of held-to-maturity securities to available-for-sale securities 7 (1 ) 6 — — — — — — Net change from available-for-sale securities (307 ) 79 (228 ) 174 (61 ) 113 (63 ) 25 (38 ) Reclassification of foreign currency translation into earnings, net — — — (2 ) — (2 ) — — — Other comprehensive income (loss) $ (307 ) $ 79 $ (228 ) $ 172 $ (61 ) $ 111 $ (63 ) $ 25 $ (38 ) |
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 Year Ended December 31, 2018 2017 2016 Available-for-sale securities: $ 45 $ 39 $ 53 Gains on securities and other, net (3 ) — — Interest income 42 39 53 Reclassification into earnings, before tax (11 ) (15 ) (20 ) Income tax expense $ 31 $ 24 $ 33 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) | 12 Months Ended |
Dec. 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): Year Ended December 31, 2018 2017 2016 Net income $ 1,052 $ 614 $ 552 Less: Preferred stock dividends 36 25 — Net income available to common shareholders $ 1,016 $ 589 $ 552 Share data (in thousands): Basic weighted-average shares outstanding 260,600 273,190 277,789 Effect of weighted-average dilutive securities: Restricted stock and options (1) 1,053 1,076 872 Convertible debentures 16 86 387 Diluted weighted-average shares outstanding (2) 261,669 274,352 279,048 Basic earnings per common share $ 3.90 $ 2.16 $ 1.99 Diluted earnings per common share (2) $ 3.88 $ 2.15 $ 1.98 (1) Includes dilutive restricted stock units and awards, dividend equivalent units, employee stock purchase plan shares and stock options. (2) 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 year ended December 31, 2018 , 2017 |
Share-Based Compensation, Emp_2
Share-Based Compensation, Employee Incentive and Retirement Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Arrangements by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest [Table Text Block] | A summary of restricted stock and performance stock unit activity is presented below (shares in thousands): Restricted Stock Units Performance Share Units Units Weighted Average Grant Date Fair Value Units Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 2,444 $ 29.02 181 $ 43.64 Granted (1) 903 50.14 169 44.21 Vested (1) (1,293 ) 28.07 (121 ) 34.97 Forfeited (67 ) 39.25 — — Outstanding at December 31, 2018 1,987 $ 39.87 229 $ 48.66 Expected to vest at December 31, 2018 1,902 $ 38.48 (1) |
Regulatory Requirements (Tables
Regulatory Requirements (Tables) | 12 Months Ended |
Dec. 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 December 31, 2018: E*TRADE Securities (1) $ 209 $ 1,294 $ 1,085 E*TRADE Futures 1 26 25 International broker-dealer — 18 18 Total $ 210 $ 1,338 $ 1,128 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 $610 million to the parent company during the year ended December 31, 2018 and $250 million |
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): December 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 $ 4,097 6.6 % $ 3,101 5.0 % $ 996 $ 4,386 7.4 % $ 2,976 5.0 % $ 1,410 Common Equity Tier 1 $ 3,408 31.1 % $ 713 6.5 % $ 2,695 $ 3,773 33.9 % $ 722 6.5 % $ 3,051 Tier 1 risk-based $ 4,097 37.3 % $ 877 8.0 % $ 3,220 $ 4,386 39.5 % $ 889 8.0 % $ 3,497 Total risk-based $ 4,143 37.8 % $ 1,097 10.0 % $ 3,046 $ 4,874 43.8 % $ 1,111 10.0 % $ 3,763 E*TRADE Bank (1)(2) Tier 1 leverage $ 3,484 7.1 % $ 2,461 5.0 % $ 1,023 $ 3,620 7.6 % $ 2,394 5.0 % $ 1,226 Common Equity Tier 1 $ 3,484 34.9 % $ 650 6.5 % $ 2,834 $ 3,620 35.7 % $ 660 6.5 % $ 2,960 Tier 1 risk-based $ 3,484 34.9 % $ 800 8.0 % $ 2,684 $ 3,620 35.7 % $ 812 8.0 % $ 2,808 Total risk-based $ 3,521 35.2 % $ 999 10.0 % $ 2,522 $ 3,694 36.4 % $ 1,015 10.0 % $ 2,679 E*TRADE Savings Bank (1) Tier 1 leverage $ 1,456 26.6 % $ 273 5.0 % $ 1,183 $ 904 26.6 % $ 170 5.0 % $ 734 Common Equity Tier 1 $ 1,456 169.4 % $ 56 6.5 % $ 1,400 $ 904 111.1 % $ 53 6.5 % $ 851 Tier 1 risk-based $ 1,456 169.4 % $ 69 8.0 % $ 1,387 $ 904 111.1 % $ 65 8.0 % $ 839 Total risk-based $ 1,456 169.4 % $ 86 10.0 % $ 1,370 $ 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 risk-based capital ( 6.0% ), and Total risk-based capital ( 8.0% ). This requirement was effective beginning on January 1, 2016, and became fully phased-in during 2019. (2) E*TRADE Bank paid dividends of $540 million to the parent company during the year ended December 31, 2018 |
Lease Arrangements (Tables)
Lease Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments and sublease proceeds under these leases with initial or remaining terms in excess of one year, including leases associated with restructuring activities, are as follows (dollars in millions): Operating Lease Commitments (1) Years ending December 31, 2019 $ 22 2020 30 2021 29 2022 26 2023 26 Thereafter 136 Total future minimum lease payments $ 269 Sublease proceeds (1 ) Net lease commitments $ 268 (1) |
Condensed Financial Informati_2
Condensed Financial Information (Parent Only) (Tables) - Parent Company [Member] | 12 Months Ended |
Dec. 31, 2018 | |
Condensed Financial Statements, Captions [Line Items] | |
Condensed Statement of Comprehensive Income | CONDENSED STATEMENT OF COMPREHENSIVE INCOME (In millions) Year Ended December 31, 2018 2017 2016 Dividends from subsidiaries (1) $ 1,150 $ 350 $ 858 Other revenues 410 377 328 Total net revenue 1,560 727 1,186 Total non-interest expense 575 611 501 Income before income tax expense and equity in income of consolidated subsidiaries 985 116 685 Income tax expense 149 75 456 Equity in undistributed income of subsidiaries 216 573 323 Net income (2) 1,052 614 552 Other comprehensive income (loss) (228 ) 111 (38 ) Comprehensive income $ 824 $ 725 $ 514 (1) Dividends from subsidiaries includes the gross amount of dividends received. (2) Net income available to common shareholders was $1.0 billion and $589 million for the years ended December 31, 2018 and 2017, respectively, and includes the impact of $36 million and $25 million |
Condensed Balance Sheet | CONDENSED BALANCE SHEET (In millions) December 31, 2018 2017 ASSETS Cash and equivalents $ 340 $ 493 Property and equipment, net 169 157 Investment in consolidated subsidiaries 7,722 7,268 Receivable from subsidiaries 24 59 Other assets 175 202 Total assets $ 8,430 $ 8,179 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities: Corporate debt $ 1,409 $ 991 Other liabilities 459 257 Total liabilities 1,868 1,248 Total shareholders’ equity 6,562 6,931 Total liabilities and shareholders’ equity $ 8,430 $ 8,179 |
Condensed Cash Flow Statement | CONDENSED STATEMENT OF CASH FLOWS (In millions) Year Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $ 1,052 $ 614 $ 552 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 55 51 48 Equity in undistributed income from subsidiaries (216 ) (573 ) (323 ) Losses on early extinguishment of debt — 58 — Other 292 213 585 Net cash provided by operating activities 1,183 363 862 Cash flows from investing activities: Capital expenditures for property and equipment (60 ) (59 ) (36 ) Cash contributions to subsidiaries (464 ) (61 ) (766 ) Other 2 6 16 Net cash used in investing activities (522 ) (114 ) (786 ) Cash flows from financing activities: Proceeds from issuance of senior notes 420 999 — Payments on senior notes — (1,049 ) — Proceeds from issuance of preferred stock — 300 400 Repurchases of common stock (1,139 ) (362 ) (452 ) Preferred stock dividends (36 ) (25 ) — Common stock dividends (36 ) — — Other (23 ) (35 ) (40 ) Net cash used in financing activities (814 ) (172 ) (92 ) (Decrease) increase in cash and equivalents (153 ) 77 (16 ) Cash and equivalents, beginning of period 493 416 432 Cash and equivalents, end of period $ 340 $ 493 $ 416 |
Quarterly Data (Unaudited) (Tab
Quarterly Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The information presented below reflects all adjustments, which, in the opinion of management, are of a normal and recurring nature necessary to present fairly the results of operations for the quarterly periods presented (dollars in millions, except per share amounts): 2018 2017 First Second Third Fourth First Second Third Fourth Total net revenue $ 708 $ 710 $ 720 $ 735 $ 553 $ 577 $ 599 $ 637 Net income $ 247 $ 250 $ 285 $ 270 $ 145 $ 193 $ 147 $ 129 Earnings per share: Basic $ 0.88 $ 0.95 $ 1.01 $ 1.07 $ 0.48 $ 0.70 $ 0.49 $ 0.48 Diluted $ 0.88 $ 0.95 $ 1.00 $ 1.06 $ 0.48 $ 0.70 $ 0.49 $ 0.48 |
Organization, Basis of Presen_3
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Gain (loss) on interest rate fair value hedge ineffectiveness | $ (19,000,000) | $ (14,000,000) | $ (6,000,000) |
Net deferred tax asset | 63,000,000 | 251,000,000 | |
Cash Equivalents [Abstract] | |||
Overnight cash, Federal Reserve | 1,800,000,000 | 490,000,000 | |
Investments, Debt and Equity Securities [Abstract] | |||
OTTI recognized for the period | $ 0 | 0 | 0 |
Loan and Lease Receivables, Impaired [Abstract] | |||
Percentage of loan to value for assigning higher level of risk | 110.00% | ||
Percentage of combined loan to value for assigning higher level of risk | 125.00% | ||
Credit score for assigning higher level of risk | 600 | ||
Loan and Lease Receivable, Nonperforming Loans [Abstract] | |||
Period past due loans are placed on nonaccrual status and classified as nonperforming | 90 days | ||
Period nonperforming loans return to accrual status | 90 days | ||
Number of consecutive payments for modified loans to be performing | 6 | ||
Period for bankruptcy loans to be classified as nonperforming | 60 days | ||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Period for delinquent loans to be written down | 180 days | ||
Period of forecasted losses for allowance for loan losses | 18 months | ||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Impairment of goodwill | $ 0 | 0 | $ 0 |
Equity Method, Cost Method and Other Investments [Abstract] | |||
Federal Home Loan Bank Stock | $ 20,000,000 | $ 36,000,000 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 7 years | ||
Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 4 years | ||
Consumer and other [Member] | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Period for delinquent loans to be written down | 120 days |
Organization, Basis of Presen_4
Organization, Basis of Presentation and Summary of Significant Accounting Policies (Details - Adoption of New Accounting Standards) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Losses on early extinguishment of debt | $ (58) | $ (4) | $ (58) | $ 0 | |
Cumulative effect of accounting change | 3 | ||||
Transfer of held-to-maturity securities to available-for-sale securities | 4,672 | 0 | 0 | ||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | $ 0 | ||
Operating Lease, Right-of-Use Asset | 193 | ||||
Operating Lease, Liability | 211 | ||||
Retained Earnings (Accumulated Deficit) | |||||
Cumulative effect of accounting change | 3 | ||||
Accounting Standards Update 2016-15 [Member] | |||||
Losses on early extinguishment of debt | $ 49 | ||||
Accounting Standards Update 2017-12 [Member] | |||||
Transfer of held-to-maturity securities to available-for-sale securities | 4,700 | ||||
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | ||||
Accounting Standards Update 2017-12 [Member] | Retained Earnings (Accumulated Deficit) | |||||
Cumulative effect of accounting change | 7 | ||||
Accounting Standards Update 2018-02 [Member] | Retained Earnings (Accumulated Deficit) | |||||
Cumulative effect of accounting change | $ 14 | $ 14 |
Acquisition and Restructuring_2
Acquisition and Restructuring (Details) number in Millions, $ in Millions | Nov. 06, 2018USD ($) | Apr. 09, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||
Customer payables | $ 10,117 | $ 9,449 | |||
Customer margin balances | 9,560 | 9,071 | |||
Goodwill acquired during period | 115 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||
Other intangibles | 254 | ||||
Restructuring and Related Activities [Abstract] | |||||
Restructuring activities | 4 | 12 | $ 28 | ||
Acquisition-related costs | 3 | 3 | 7 | ||
Total restructuring and acquisition-related activities | 7 | $ 15 | $ 35 | ||
Capital One [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, effective date of acquisition | Nov. 6, 2018 | ||||
Number of brokerage accounts acquired | 1,000,000 | ||||
Payments to acquire retail brokerage accounts | $ 109 | ||||
Customer payables | 1,600 | ||||
Customer margin balances | 127 | ||||
Capital One [Member] | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 114 | ||||
Estimated Useful Life (In Years) | 11 years | ||||
Trust Company Of America [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition, effective date of acquisition | Apr. 9, 2018 | ||||
Goodwill acquired during period | $ 115 | ||||
Payments to acquire businesses | 275 | ||||
Fair value of net assets acquired | 160 | ||||
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual | $ 60 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||||
Cash and equivalents | 239 | ||||
Available-for-sale securities | 554 | ||||
Other intangibles | 140 | ||||
Other | 23 | ||||
Total assets acquired | 956 | ||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||||
Deposit liabilities acquired | 790 | ||||
Other liabilities | 6 | ||||
Total Liabilities Assumed | 796 | ||||
Fair value of net assets acquired | 160 | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | 140 | ||||
Trust Company Of America [Member] | Customer relationships | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 119 | ||||
Estimated Useful Life (In Years) | 22 years | ||||
Trust Company Of America [Member] | Technology | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 20 | ||||
Estimated Useful Life (In Years) | 5 years | ||||
Trust Company Of America [Member] | Trade name | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Fair Value | $ 1 | ||||
Estimated Useful Life (In Years) | 2 years |
Net Revenue (Details - Total Re
Net Revenue (Details - Total Revenue) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue from Contract with Customer [Abstract] | |||||||||||
Net interest income | $ 1,846 | $ 1,485 | $ 1,148 | ||||||||
Gains on securities and other, net | 53 | 28 | 42 | ||||||||
Other revenue | 45 | 43 | 41 | ||||||||
Revenues | $ 735 | $ 720 | $ 710 | $ 708 | $ 637 | $ 599 | $ 577 | $ 553 | 2,873 | 2,366 | 1,941 |
Commissions [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | 498 | 441 | 442 | ||||||||
Fees and service charges [Member] | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 431 | $ 369 | $ 268 |
Net Revenue (Details - Interest
Net Revenue (Details - Interest Income and Interest Expense) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Interest income: | |||
Cash and equivalents | $ 11 | $ 9 | $ 7 |
Cash segregated under federal or other regulations | 15 | 12 | 6 |
Investment securities(1) | 1,241 | 962 | 691 |
Margin receivables | 491 | 320 | 249 |
Loans | 128 | 157 | 191 |
Broker-related receivables and other | 14 | 3 | 1 |
Subtotal interest income | 1,900 | 1,463 | 1,145 |
Other interest revenue(2) | 109 | 108 | 88 |
Total interest income | 2,009 | 1,571 | 1,233 |
Interest expense: | |||
Deposits | 51 | 4 | 3 |
Customer payables | 22 | 5 | 5 |
Broker-related payables and other | 10 | 0 | 0 |
Other borrowings | 25 | 22 | 18 |
Corporate debt | 46 | 48 | 54 |
Subtotal interest expense | 154 | 79 | 80 |
Interest Expense, Other | 9 | 7 | 5 |
Total interest expense | 163 | 86 | 85 |
Net interest income | 1,846 | 1,485 | 1,148 |
Gain (loss) on interest rate fair value hedge ineffectiveness | $ (19) | $ (14) | $ (6) |
Net Revenue (Details - Fees and
Net Revenue (Details - Fees and Service Charges) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Order flow revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 174 | $ 135 | $ 96 |
Money market funds and sweep deposits revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 71 | 92 | 50 |
Mutual fund service fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 48 | 39 | 36 |
Advisor management and custody fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 64 | 36 | 28 |
Foreign exchange revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 25 | 26 | 21 |
Reorganization fees [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 14 | 16 | 16 |
Other fees and service charges [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | 35 | 25 | 21 |
Fees and service charges [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from Contract with Customer, Excluding Assessed Tax | $ 431 | $ 369 | $ 268 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details - Inputs) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | $ 2,132,000,000 | $ 2,717,000,000 |
Real Estate Owned | 13,000,000 | 26,000,000 |
Weighted Average [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 329,500 | 355,200 |
Maximum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 900,000 | 2,000,000 |
Minimum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Real Estate Owned | 57,900 | 4,500 |
One- To Four-Family [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 1,071,000,000 | 1,432,000,000 |
One- To Four-Family [Member] | Weighted Average [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 594,700 | 520,700 |
One- To Four-Family [Member] | Maximum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 2,000,000 | 1,200,000 |
One- To Four-Family [Member] | Minimum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 17,000 | 60,000 |
Home Equity [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 836,000,000 | 1,097,000,000 |
Home Equity [Member] | Weighted Average [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 397,700 | 317,300 |
Home Equity [Member] | Maximum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | 1,060,000 | 2,066,000 |
Home Equity [Member] | Minimum [Member] | Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | Measurement Input, Appraised Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable | $ 73,000 | $ 38,000 |
Fair Value Disclosures (Detai_2
Fair Value Disclosures (Details - Recurring and Nonrecurring) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | $ 23,153,000 | $ 20,672,000 | |
Available-for-sale equity securities, fair value | 7,000 | ||
Available-for-sale securities | $ 23,153,000 | $ 20,679,000 | |
Assets measured at fair value on recurring basis percentage of total assets | 36.00% | 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 | |
Asset transfer into Level 3 | 0 | 0 | |
Asset transfer out of Level 3 | 0 | 0 | |
Liability transfer into Level 3 | 0 | 0 | |
Liability transfer out of Level 3 | 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 | 23,153,000 | $ 20,672,000 | |
Available-for-sale equity securities, fair value | 7,000 | ||
Available-for-sale securities | 20,679,000 | ||
Publicly traded equity securities | 7,000 | ||
US Treasuries | 300,000 | ||
Derivative assets | 1,000 | 131,000 | |
Total assets measured at fair value | 23,161,000 | 21,110,000 | |
Derivative liabilities | 14,000 | ||
Total liabilities measured at fair value | 14,000 | ||
Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 23,000 | 35,000 | |
Loans held-for-sale | 17,000 | ||
Real estate owned | 10,000 | 26,000 | |
Total assets measured at fair value | 33,000 | 78,000 | |
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 | 7,000 | ||
Available-for-sale securities | 7,000 | ||
Publicly traded equity securities | 7,000 | ||
US Treasuries | 300,000 | ||
Total assets measured at fair value | 7,000 | 307,000 | |
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 | 23,153,000 | 20,672,000 | |
Available-for-sale securities | 20,672,000 | ||
Derivative assets | 1,000 | 131,000 | |
Total assets measured at fair value | 23,154,000 | 20,803,000 | |
Derivative liabilities | 14,000 | ||
Total liabilities measured at fair value | 14,000 | ||
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 | 17,000 | ||
Total assets measured at fair value | 0 | 17,000 | |
Level 3 [Member] | Fair Value, Measurements, Nonrecurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Total loans receivable | 23,000 | 35,000 | |
Real estate owned | 10,000 | 26,000 | |
Total assets measured at fair value | 33,000 | 61,000 | |
Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 2,000 | 9,000 | $ 16,000 |
One- To Four-Family [Member] | Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | 3,000 | 4,000 | 4,000 |
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 | 17,000 | 22,000 | |
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 | 17,000 | 22,000 | |
Home Equity [Member] | Loans Receivable [Member] | |||
Gains Losses On Nonrecurring Fair Value Measurements [Abstract] | |||
(Gains) losses measured at fair value | (1,000) | 5,000 | $ 12,000 |
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 | 6,000 | 13,000 | |
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 | 6,000 | 13,000 | |
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 | 22,162,000 | 19,195,000 | |
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 | 22,162,000 | 19,195,000 | |
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 | 22,162,000 | 19,195,000 | |
Agency Debentures [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 839,000 | 966,000 | |
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 | 839,000 | 966,000 | |
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 | 839,000 | 966,000 | |
US Treasury Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 458,000 | ||
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 | 458,000 | ||
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 | 458,000 | ||
Agency Debt Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 139,000 | 33,000 | |
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 | 139,000 | 33,000 | |
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 | 139,000 | 33,000 | |
Municipal Bonds [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 12,000 | 20,000 | |
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 | 12,000 | 20,000 | |
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 | 12,000 | $ 20,000 | |
Other [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Available-for-sale debt securities, fair value | 1,000 | ||
Other [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 | 1,000 | ||
Other [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 | $ 1,000 |
Fair Value Disclosures (Detai_3
Fair Value Disclosures (Details - Level 3) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Level 3 recurring assets | $ 0 | $ 0 |
Level 3 recurring liabilities | $ 0 | $ 0 |
Fair Value Disclosures (Detai_4
Fair Value Disclosures (Details - FV of Financial Instruments) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | $ 2,333 | $ 931 | $ 1,950 | |
Cash segregated under federal or other regulations | 1,011 | 872 | 1,460 | |
Total held-to-maturity securities | 21,884 | 23,839 | ||
Total loans receivable, net | 2,103 | 2,654 | ||
Receivables from brokers, dealers and clearing organizations | 760 | 1,178 | ||
Deposits | 45,313 | 42,742 | ||
Payables to brokers, dealers and clearing organizations | 948 | 1,542 | ||
FHLB advances | 0 | 500 | ||
Trust preferred securities | 0 | 410 | ||
Other borrowings | 0 | 910 | ||
Allowance for loan losses | 37 | 74 | 221 | $ 353 |
Margin Receivables Detail [Abstract] | ||||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value | 12,900 | 12,800 | ||
Customer Securities for which Entity has Right to Sell or Repledge, Fair Value of Securities Sold or Repledged | 2,300 | 3,200 | ||
Securities borrowed under fully paid lending program | 36 | 18 | ||
Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 2,333 | 931 | ||
Cash segregated under federal or other regulations | 1,011 | 872 | ||
Total held-to-maturity securities | 21,884 | 23,839 | ||
Margin Receivables | 9,560 | 9,071 | ||
Total loans receivable, net | 2,103 | 2,654 | ||
Receivables from brokers, dealers and clearing organizations | 760 | 878 | ||
Other assets | 36 | 18 | ||
Deposits | 45,313 | 42,742 | ||
Customer Payables | 10,117 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 948 | 1,542 | ||
FHLB advances | 500 | |||
Trust preferred securities | 410 | |||
Other borrowings | 910 | |||
Corporate debt | 1,409 | 991 | ||
Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 2,333 | 931 | ||
Cash segregated under federal or other regulations | 1,011 | 872 | ||
Total held-to-maturity securities | 21,491 | 23,719 | ||
Margin Receivables | 9,560 | 9,071 | ||
Total loans receivable, net | 2,146 | 2,705 | ||
Receivables from brokers, dealers and clearing organizations | 760 | 878 | ||
Other assets | 36 | 18 | ||
Deposits | 45,313 | 42,741 | ||
Customer Payables | 10,117 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 948 | 1,542 | ||
FHLB advances | 500 | |||
Trust preferred securities | 379 | |||
Other borrowings | 879 | |||
Corporate debt | 1,372 | 992 | ||
One- To Four-Family [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,069 | 1,417 | ||
Allowance for loan losses | 9 | 24 | 45 | 40 |
One- To Four-Family [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,069 | 1,417 | ||
One- To Four-Family [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 1,099 | 1,463 | ||
Home Equity [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 810 | 1,051 | ||
Allowance for loan losses | 26 | 46 | 171 | 307 |
Home Equity [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 810 | 1,051 | ||
Home Equity [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 825 | 1,055 | ||
Consumer and other [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 117 | 174 | ||
Allowance for loan losses | 2 | 4 | $ 5 | $ 6 |
Consumer and other [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 117 | 186 | ||
Consumer and other [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 115 | 187 | ||
Securities-based lending [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 107 | 12 | ||
Allowance for loan losses | 0 | 0 | ||
Securities-based lending [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 107 | |||
Securities-based lending [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 107 | |||
Agency mortgage-backed securities [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 18,085 | 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 | 18,085 | 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 | 17,748 | 20,404 | ||
Agency Debentures [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,824 | 710 | ||
Agency Debentures [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,824 | 710 | ||
Agency Debentures [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,808 | 708 | ||
Agency Debt Securities [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,975 | 2,615 | ||
Agency Debt Securities [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,975 | 2,615 | ||
Agency Debt Securities [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 1,935 | 2,595 | ||
Other [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | |||
Other [Member] | Carrying Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | |||
Other [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 12 | |||
Level 1 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Cash and equivalents | 2,333 | 931 | ||
Cash segregated under federal or other regulations | 1,011 | 872 | ||
Level 2 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 21,491 | 23,707 | ||
Margin Receivables | 9,560 | 9,071 | ||
Total loans receivable, net | 107 | |||
Receivables from brokers, dealers and clearing organizations | 760 | 878 | ||
Other assets | 36 | 18 | ||
Deposits | 45,313 | 42,741 | ||
Customer Payables | 10,117 | 9,449 | ||
Payables to brokers, dealers and clearing organizations | 948 | 1,542 | ||
FHLB advances | 500 | |||
Other borrowings | 500 | |||
Corporate debt | 1,372 | 992 | ||
Level 2 [Member] | Securities-based lending [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total loans receivable, net | 107 | |||
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 | 17,748 | 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 | 1,808 | 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 | 1,935 | 2,595 | ||
Level 3 [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | 0 | 12 | ||
Total loans receivable, net | 2,039 | 2,705 | ||
Trust preferred securities | 379 | |||
Other borrowings | 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 | 1,099 | 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 | 825 | 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 | $ 115 | 187 | ||
Level 3 [Member] | Other [Member] | Fair Value [Member] | ||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||
Total held-to-maturity securities | $ 12 |
Offsetting Assets and Liabili_3
Offsetting Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Offsetting Assets [Abstract] | ||
Securities Borrowed, Gross | $ 176,000,000 | $ 759,000,000 |
Securities Borrowed, Liability | 0 | 0 |
Securities Borrowed | 176,000,000 | 759,000,000 |
Securities Borrowed, Financial Instruments, Not Offset | (104,000,000) | (251,000,000) |
Securities Borrowed, Collateral Received, Not Offset | (61,000,000) | (483,000,000) |
Securities Borrowed, Net | 11,000,000 | 25,000,000 |
Derivative Asset, Fair Value, Gross Asset | 1,000,000 | |
Derivative Asset, Fair Value, Gross Liability | 0 | |
Derivative Asset | 1,000,000 | |
Derivative Asset, Financial Instruments, Not Offset | 0 | |
Derivative Asset, Collateral Received, Not Offset | 0 | |
Derivative Asset, Net | 1,000,000 | |
Total Offsetting Assets, Gross | 177,000,000 | 759,000,000 |
Total Offsetting Assets, Liability | 0 | 0 |
Total Offsetting Assets | 177,000,000 | 759,000,000 |
Total Offsetting Assets, Financial Instruments Not Offset | (104,000,000) | (251,000,000) |
Total Offsetting Assets, Collateral Received, Not Offset | (61,000,000) | (483,000,000) |
Total Offsetting Assets, Net | 12,000,000 | 25,000,000 |
Offsetting Liabilities [Abstract] | ||
Securities Loaned, Gross | 887,000,000 | 1,373,000,000 |
Securities Loaned, Asset | 0 | 0 |
Securities Loaned | 887,000,000 | 1,373,000,000 |
Securities Loaned, Financial Instruments, Not Offset | (104,000,000) | (251,000,000) |
Securities Loaned, Collateral Pledged, Not Offset | (700,000,000) | (1,004,000,000) |
Securities Loaned, Net | 83,000,000 | 118,000,000 |
Derivative Liability, Fair Value, Gross Liability | 5,000,000 | |
Derivative Liability, Fair Value, Gross Asset | 0 | |
Derivative Liability | 5,000,000 | |
Derivative Liability, Financial Instruments, Not Offset | 0 | |
Derivative Liability, Collateral Pledged, Not offset | (5,000,000) | |
Derivative Liability, Net | 0 | |
Total Offsetting Liabilities, Gross | 887,000,000 | 1,378,000,000 |
Total Offsetting Liabilities, Asset | 0 | 0 |
Total Offsetting Liabilities | 887,000,000 | 1,378,000,000 |
Total Offsetting Liabilities, Financial Instruments Not Offset | (104,000,000) | (251,000,000) |
Total Offsetting Liabilities, Collateral Pledged, Not Offset | (700,000,000) | (1,009,000,000) |
Total Offsetting Liabilities, Net | 83,000,000 | 118,000,000 |
Offsetting Footnotes [Abstract] | ||
Securities Borrowed, Transacted Through Clearing Company | 65,000,000 | 347,000,000 |
Securities Loaned, Transacted Through Clearing Company | 543,000,000 | 821,000,000 |
Derivative Asset, Not Subject to Master Netting Arrangement | 0 | 131,000,000 |
Derivative Liability, Not Subject to Master Netting Arrangement | $ 0 | 9,000,000 |
Interest Payable Excluded From Gross Amounts of Derivatives | $ 2,000,000 |
Available-for-Sale Securities (
Available-for-Sale Securities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Securities, Available-for-sale [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 | $ 23,153 | 20,679 | |
Available-for-sale debt securities, amortized cost basis | 23,126 | 20,840 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 341 | 96 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (314) | (264) | |
Available-for-sale debt securities, fair value | 23,153 | 20,672 | |
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 | ||
Transfer of held-to-maturity securities to available-for-sale securities | 4,672 | 0 | $ 0 |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | 0 |
Transfer of available-for-sale securities to held-to-maturity | 1,161 | 0 | $ 492 |
Agency mortgage-backed securities [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 22,140 | 19,395 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 327 | 47 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (305) | (247) | |
Available-for-sale debt securities, fair value | 22,162 | 19,195 | |
Agency Debentures [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 833 | 939 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 13 | 39 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (7) | (12) | |
Available-for-sale debt securities, fair value | 839 | 966 | |
US Treasury Securities [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 452 | ||
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 10 | ||
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (4) | ||
Available-for-sale debt securities, fair value | 458 | ||
Agency Debt Securities [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 140 | 34 | |
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 1 | 0 | |
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | (2) | (1) | |
Available-for-sale debt securities, fair value | 139 | 33 | |
Municipal Bonds [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 12 | 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 | 12 | $ 20 | |
Other [Member] | |||
Debt Securities, Available-for-sale [Line Items] | |||
Available-for-sale debt securities, amortized cost basis | 1 | ||
Available-for-sale debt securities, accumulated gross unrealized gain, before tax | 0 | ||
Available-for-sale debt securities, accumulated gross unrealized loss, before tax | 0 | ||
Available-for-sale debt securities, fair value | $ 1 |
Held-to-Maturity Securities (De
Held-to-Maturity Securities (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | $ 21,884 | $ 23,839 |
Held-to-maturity securities, gross unrecognized gains | 30 | 110 |
Held-to-maturity securities, gross unrecognized losses | (423) | (230) |
Held-to-maturity securities, fair value | 21,491 | 23,719 |
Agency mortgage-backed securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 18,085 | 20,502 |
Held-to-maturity securities, gross unrecognized gains | 26 | 95 |
Held-to-maturity securities, gross unrecognized losses | (363) | (193) |
Held-to-maturity securities, fair value | 17,748 | 20,404 |
Agency Debentures [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 1,824 | 710 |
Held-to-maturity securities, gross unrecognized gains | 0 | 0 |
Held-to-maturity securities, gross unrecognized losses | (16) | (2) |
Held-to-maturity securities, fair value | 1,808 | 708 |
Agency Debt Securities [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 1,975 | 2,615 |
Held-to-maturity securities, gross unrecognized gains | 4 | 15 |
Held-to-maturity securities, gross unrecognized losses | (44) | (35) |
Held-to-maturity securities, fair value | $ 1,935 | 2,595 |
Other [Member] | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Held-to-maturity securities, amortized cost | 12 | |
Held-to-maturity securities, fair value | $ 12 |
Available-for-Sale and Held-t_3
Available-for-Sale and Held-to-Maturity Securities (Details - Maturity) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Available-for-Sale Securities, Debt Maturities [Abstract] | ||
Available-for-sale securities, due within one year, amortized cost | $ 4 | |
Available-for-sale securities, due within one to five years, amortized cost | 864 | |
Available-for-sale securities, due within five to ten years, amortized cost | 9,706 | |
Available-for-sale securities, due after ten years, amortized cost | 12,552 | |
Available-for-sale debt securities, amortized cost basis | 23,126 | $ 20,840 |
Available-for-sale securities, due within one year, fair value | 4 | |
Available-for-sale securities, due within one to five years, fair value | 853 | |
Available-for-sale securities, due within five to ten years, fair value | 9,899 | |
Available-for-sale securities, due after ten years, fair value | 12,397 | |
Available-for-sale securities, fair value | 23,153 | 20,672 |
Held-to-Maturity Securities, Debt Maturities [Abstract] | ||
Held-to-maturity securities, due within one year, amortized cost | 56 | |
Held-to-maturity securities, due within one to five years, amortized cost | 2,062 | |
Held-to-maturity securities, due within five to ten years, amortized cost | 5,115 | |
Held-to-maturity securities, due after ten years, amortized cost | 14,651 | |
Held-to-maturity securities, amortized cost | 21,884 | 23,839 |
Held-to-maturity securities, due within one year, fair value | 56 | |
Held-to-maturity securities, due within one to five years, fair value | 2,045 | |
Held-to-maturity securities, due within five to ten years, fair value | 5,031 | |
Held-to-maturity securities, due after ten years, fair value | 14,359 | |
Held-to-maturity securities, fair value | 21,491 | 23,719 |
Collateral Pledged [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Held-to-maturity debt securities pledged as collateral | 6,300 | 5,500 |
Available-for-sale debt securities pledged as collateral | $ 151 | $ 352 |
Available-for-Sale and Held-t_4
Available-for-Sale and Held-to-Maturity Securities (Details - OTTI) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | $ 3,329 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 7,981 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 11,310 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (35) | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (279) | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (314) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 4,654 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 8,492 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 13,146 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (23) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (241) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (264) | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 3,675 | 10,952 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 13,740 | 6,260 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 17,415 | 17,212 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (34) | (83) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (389) | (147) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (423) | (230) |
Agency mortgage-backed securities [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 2,945 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 7,826 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 10,771 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (34) | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (271) | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (305) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 4,638 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 8,027 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 12,665 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (23) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (224) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (247) | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 2,802 | 9,982 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 11,587 | 4,906 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 14,389 | 14,888 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (31) | (78) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (332) | (115) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (363) | (193) |
Agency Debentures [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 383 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 116 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 499 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (1) | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (6) | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (7) | |
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 | 283 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 283 | |
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 | (12) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (12) | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 776 | 597 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 666 | 9 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 1,442 | 606 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (2) | (2) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (14) | 0 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (16) | (2) |
US Treasury Securities [Member] | ||
Debt Securities, Available-for-sale [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] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 0 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 30 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 30 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (2) | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | (2) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 9 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | 24 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 33 | |
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 | (1) | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | (1) | |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Fair Value | 97 | 373 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Fair Value | 1,487 | 1,345 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Fair Value | 1,584 | 1,718 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | (1) | (3) |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | (43) | (32) |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss | (44) | (35) |
Municipal Bonds [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 0 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 9 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 9 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | 0 | |
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 | 11 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | 11 | |
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 | |
Other [Member] | ||
Debt Securities, Available-for-sale [Line Items] | ||
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months | 1 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer | 0 | |
Debt Securities, Available-for-sale, Unrealized Loss Position | 1 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | 0 | |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss | $ 0 | |
Equity Securities [Member] | ||
Debt Securities, Available-for-sale [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 |
Available-for-Sale and Held-t_5
Available-for-Sale and Held-to-Maturity Securities (Details - Other) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |||
Net impairment | $ 0 | $ 0 | $ 0 |
Components of gains (losses) on securities and other, net | |||
Gains on available-for-sale securities(1) | 98,000,000 | 40,000,000 | 54,000,000 |
Losses on available-for-sale securities(1) | (54,000,000) | 0 | (1,000,000) |
Subtotal | 44,000,000 | 40,000,000 | 53,000,000 |
Equity method investment income (loss) and other(2)(3) | 9,000,000 | (12,000,000) | (11,000,000) |
Gains on securities and other, net | 53,000,000 | 28,000,000 | 42,000,000 |
Equity Method Investment, Realized Gain (Loss) on Disposal | 5,000,000 | ||
Gain (loss) on interest rate fair value hedge ineffectiveness | $ (19,000,000) | $ (14,000,000) | $ (6,000,000) |
Loans Receivable, Net (Details
Loans Receivable, Net (Details - Aging) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | $ 1,956 | $ 2,468 | ||
Total loans receivable | 2,132 | 2,717 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 8 | 11 | ||
Loans and Leases Receivable, Allowance | (37) | (74) | $ (221) | $ (353) |
Total loans receivable, net | 2,103 | 2,654 | ||
Loans Receivable, Net [Abstract] | ||||
Carrying value of loans transferred to held-for-sale | 17 | |||
Loans Pledged Federal Home Loan Bank | 1,600 | 2,200 | ||
Loans Pledged Federal Reserve Bank | 100 | 200 | ||
Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 74 | 98 | ||
Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 22 | 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 | 80 | 114 | ||
E TRADE Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Unused Commitments to Extend Credit | 173 | 35 | ||
One- To Four-Family [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 958 | 1,269 | ||
Total loans receivable | 1,071 | 1,432 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 7 | 9 | ||
Loans and Leases Receivable, Allowance | (9) | (24) | (45) | (40) |
Total loans receivable, net | 1,069 | 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 | 48 | 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 | 9 | 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 | 56 | 82 | ||
Home Equity [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 774 | 1,014 | ||
Total loans receivable | 836 | 1,097 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 0 | 0 | ||
Loans and Leases Receivable, Allowance | (26) | (46) | (171) | (307) |
Total loans receivable, net | 810 | 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 | 25 | 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 | 13 | 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 | 24 | 32 | ||
Consumer and other [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 117 | 173 | ||
Total loans receivable | 118 | 176 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 1 | 2 | ||
Loans and Leases Receivable, Allowance | (2) | (4) | $ (5) | $ (6) |
Total loans receivable, net | 117 | 174 | ||
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 | 1 | 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 | 0 | 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 | ||
Securities-based lending [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Loans receivable, Current | 107 | 12 | ||
Total loans receivable | 107 | 12 | ||
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums | 0 | 0 | ||
Loans and Leases Receivable, Allowance | 0 | 0 | ||
Total loans receivable, net | 107 | 12 | ||
Securities-based lending [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 | ||
Securities-based lending [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||
Financing Receivable, Recorded Investment, Past Due | 0 | 0 | ||
Securities-based lending [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 (Detail_2
Loans Receivable, Net (Details - Credit Quality) $ in Millions | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Credit Quality Indicators [Line Items] | ||
Average Age, Financing Receivable | 12 years 9 months 18 days | 11 years 9 months 18 days |
Greater Than 10% of Loans States Other than California and New York, 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 | $ 1,071 | $ 1,432 |
Average estimated current LTV/CLTV | 66.00% | 70.00% |
Average LTV/CLTV at loan origination | 70.00% | 71.00% |
One- To Four-Family [Member] | FICO Score, Greater than 720 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | $ 617 | $ 805 |
One- To Four-Family [Member] | FICO Score, 719 to 700 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 89 | 138 |
One- To Four-Family [Member] | FICO Score, 699 to 680 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 80 | 105 |
One- To Four-Family [Member] | FICO Score, 679 to 660 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 66 | 78 |
One- To Four-Family [Member] | FICO Score, 659 to 620 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 79 | 122 |
One- To Four-Family [Member] | FICO Score, Less than 620 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 140 | 184 |
One- To Four-Family [Member] | LTV Less than 80 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 823 | 1,031 |
One- To Four-Family [Member] | LTV 80 to 100 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 165 | 256 |
One- To Four-Family [Member] | LTV 100 to 120 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 45 | 91 |
One- To Four-Family [Member] | LTV Greater than 120 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 38 | 54 |
Home Equity [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | $ 836 | $ 1,097 |
Average estimated current LTV/CLTV | 80.00% | 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 | $ 442 | $ 548 |
Home Equity [Member] | FICO Score, 719 to 700 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 78 | 106 |
Home Equity [Member] | FICO Score, 699 to 680 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 70 | 93 |
Home Equity [Member] | FICO Score, 679 to 660 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 56 | 79 |
Home Equity [Member] | FICO Score, 659 to 620 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 80 | 103 |
Home Equity [Member] | FICO Score, Less than 620 [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 110 | 168 |
Home Equity [Member] | LTV Less than 80 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 454 | 531 |
Home Equity [Member] | LTV 80 to 100 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 215 | 291 |
Home Equity [Member] | LTV 100 to 120 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | 110 | 176 |
Home Equity [Member] | LTV Greater than 120 Percent [Member] | ||
Credit Quality Indicators [Line Items] | ||
Total mortgage loans receivable | $ 57 | $ 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% |
One- To Four-Family and Home Equity Benchmark [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | ||
Credit Quality Indicators [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 9.00% |
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 | 24.00% | |
Past due mortgage loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | ||
Credit Quality Indicators [Line Items] | ||
Concentration Risk, Percentage | 19.00% | |
Impaired mortgage loans [Member] | Financing Receivables, State, Risk [Member] | CALIFORNIA | ||
Credit Quality Indicators [Line Items] | ||
Concentration Risk, Percentage | 43.00% | |
Impaired mortgage loans [Member] | Financing Receivables, State, Risk [Member] | NEW YORK | ||
Credit Quality Indicators [Line Items] | ||
Concentration Risk, Percentage | 10.00% |
Loans Receivable, Net (Detail_3
Loans Receivable, Net (Details - Nonperforming Loans) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Other Real Estate, Foreclosed Assets, and Repossessed Assets [Abstract] | ||
Real Estate Acquired Through Foreclosure | $ 13 | $ 26 |
Mortgage Loans in Process of Foreclosure, Amount | 51 | 101 |
Nonperforming Financial Instruments [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | 210 | 290 |
Nonperforming Financial Instruments [Member] | One- To Four-Family [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | 139 | 192 |
Nonperforming Financial Instruments [Member] | Home Equity [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Financing Receivable, Recorded Investment, Nonaccrual Status | $ 71 | $ 98 |
Loans Receivable, Net (Detail_4
Loans Receivable, Net (Details - Allowance Qualitative and Quantitative Components) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 12 | $ 33 | ||
Qualitative component | 1 | 6 | ||
Specific valuation allowance | 24 | 35 | ||
Total allowance for loan losses | $ 37 | $ 74 | $ 221 | $ 353 |
Allowance as a % of loans receivable(2) | 1.70% | 2.70% | ||
One- To Four-Family [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 4 | $ 15 | ||
Qualitative component | 0 | 3 | ||
Specific valuation allowance | 5 | 6 | ||
Total allowance for loan losses | $ 9 | $ 24 | 45 | 40 |
Allowance as a % of loans receivable(2) | 0.80% | 1.60% | ||
Home Equity [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 6 | $ 14 | ||
Qualitative component | 1 | 3 | ||
Specific valuation allowance | 19 | 29 | ||
Total allowance for loan losses | $ 26 | $ 46 | 171 | 307 |
Allowance as a % of loans receivable(2) | 3.10% | 4.20% | ||
Consumer and other [Member] | ||||
Financing Receivable, Modifications [Line Items] | ||||
Quantitative component | $ 2 | $ 4 | ||
Qualitative component | 0 | 0 | ||
Specific valuation allowance | 0 | 0 | ||
Total allowance for loan losses | $ 2 | $ 4 | $ 5 | $ 6 |
Allowance as a % of loans receivable(2) | 1.00% | 2.10% |
Loans Receivable, Net (Detail_5
Loans Receivable, Net (Details - Allowance) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Allowance for loan losses, beginning of period | $ 74 | $ 221 | $ 353 | |
Provision (benefit) for loan losses | $ (99) | (86) | (168) | (149) |
Charge-offs | (4) | (13) | (25) | |
Recoveries | 53 | 34 | 42 | |
Net (charge-offs) recoveries | 49 | 21 | 17 | |
Allowance for loan losses, end of period | 37 | 74 | 221 | |
Provision (benefit) for loan losses | $ (99) | $ (86) | $ (168) | (149) |
Allowance as a percentage of total loans receivable | 1.70% | 2.70% | ||
Recovery from the sale of previously charged-off loans | $ 15 | |||
One- To Four-Family [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Allowance for loan losses, beginning of period | 24 | $ 45 | 40 | |
Provision (benefit) for loan losses | (22) | (29) | (2) | |
Charge-offs | 0 | 0 | (1) | |
Recoveries | 7 | 8 | 8 | |
Net (charge-offs) recoveries | 7 | 8 | 7 | |
Allowance for loan losses, end of period | 9 | 24 | 45 | |
Provision (benefit) for loan losses | $ (22) | $ (29) | (2) | |
Allowance as a percentage of total loans receivable | 0.80% | 1.60% | ||
Home Equity [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Allowance for loan losses, beginning of period | $ 46 | $ 171 | 307 | |
Provision (benefit) for loan losses | (63) | (141) | (148) | |
Charge-offs | 0 | (7) | (17) | |
Recoveries | 43 | 23 | 29 | |
Net (charge-offs) recoveries | 43 | 16 | 12 | |
Allowance for loan losses, end of period | 26 | 46 | 171 | |
Provision (benefit) for loan losses | $ (63) | $ (141) | (148) | |
Allowance as a percentage of total loans receivable | 3.10% | 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 | 6 | |
Provision (benefit) for loan losses | (1) | 2 | 1 | |
Charge-offs | (4) | (6) | (7) | |
Recoveries | 3 | 3 | 5 | |
Net (charge-offs) recoveries | (1) | (3) | (2) | |
Allowance for loan losses, end of period | 2 | 4 | 5 | |
Provision (benefit) for loan losses | $ (1) | $ 2 | $ 1 | |
Allowance as a percentage of total loans receivable | 1.00% | 2.10% | ||
Held-for-investment [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Increase (Decrease) in Finance Receivables | $ (600) |
Loans Receivable, Net (Detail_6
Loans Receivable, Net (Details - Allowance Evaluation for Impairment) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | $ 1,815 | $ 2,350 | ||
Loans individually evaluated for impairment, recorded investment | 325 | 378 | ||
Total recorded investment in loans receivable | 2,140 | 2,728 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 13 | 39 | ||
Loans individually evaluated for impairment, allowance for loan losses | 24 | 35 | ||
Allowance for loan losses | 37 | 74 | $ 221 | $ 353 |
One- To Four-Family [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 891 | 1,228 | ||
Loans individually evaluated for impairment, recorded investment | 187 | 213 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 4 | 18 | ||
Loans individually evaluated for impairment, allowance for loan losses | 5 | 6 | ||
Allowance for loan losses | 9 | 24 | 45 | 40 |
Home Equity [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 698 | 932 | ||
Loans individually evaluated for impairment, recorded investment | 138 | 165 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 7 | 17 | ||
Loans individually evaluated for impairment, allowance for loan losses | 19 | 29 | ||
Allowance for loan losses | 26 | 46 | 171 | 307 |
Consumer and other [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 119 | 178 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 2 | 4 | ||
Allowance for loan losses | 2 | 4 | $ 5 | $ 6 |
Securities-based lending [Member] | ||||
Financing Receivable, Allowance for Credit Losses, Additional Information [Line Items] | ||||
Loans collectively evaluated for impairment, recorded investment | 107 | 12 | ||
Loans collectively evaluated for impairment, allowance for loan losses | 0 | 0 | ||
Allowance for loan losses | $ 0 | $ 0 |
Loans Receivable, Net (Detail_7
Loans Receivable, Net (Details - TDRs Accrual and Nonaccrual) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | $ 325 | $ 378 |
Financing Receivable, Troubled Debt Restructurings, Modifications, Total1 | 253 | 285 |
Financing Receivable, Troubled Debt Restructurings, Bankruptcy Notifications | 72 | 93 |
Performing Financial Instruments [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 177 | 187 |
Nonperforming Financial Instruments [Member] | FinancingReceivablesNonAccrualCurrent [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 84 | 108 |
Nonperforming Financial Instruments [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 20 | 23 |
Nonperforming Financial Instruments [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 9 | 9 |
Nonperforming Financial Instruments [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 35 | 51 |
One- To Four-Family [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 187 | 213 |
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down | 55 | 67 |
One- To Four-Family [Member] | Performing Financial Instruments [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 87 | 83 |
One- To Four-Family [Member] | Nonperforming Financial Instruments [Member] | FinancingReceivablesNonAccrualCurrent [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 61 | 74 |
One- To Four-Family [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 12 | 13 |
One- To Four-Family [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 4 | 5 |
One- To Four-Family [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 23 | 38 |
Home Equity [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 138 | 165 |
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down | 121 | 144 |
Home Equity [Member] | Performing Financial Instruments [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 90 | 104 |
Home Equity [Member] | Nonperforming Financial Instruments [Member] | FinancingReceivablesNonAccrualCurrent [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 23 | 34 |
Home Equity [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, 30 To 89 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 8 | 10 |
Home Equity [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, 90 To 179 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | 5 | 4 |
Home Equity [Member] | Nonperforming Financial Instruments [Member] | Financing Receivables, Equal to Greater than 180 Days Past Due [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment in TDRs | $ 12 | $ 13 |
Loans Receivable, Net (Detail_8
Loans Receivable, Net (Details - TDRs Average Investment and Income) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Financing Receivable, Impaired [Line Items] | |||
TDRs, Average Recorded Investment | $ 353 | $ 400 | $ 473 |
TDRs, Interest Income Recognized | 22 | 25 | 28 |
One- To Four-Family [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
TDRs, Average Recorded Investment | 201 | 221 | 269 |
TDRs, Interest Income Recognized | 9 | 9 | 11 |
Home Equity [Member] | |||
Financing Receivable, Impaired [Line Items] | |||
TDRs, Average Recorded Investment | 152 | 179 | 204 |
TDRs, Interest Income Recognized | $ 13 | $ 16 | $ 17 |
Loans Receivable, Net (Detail_9
Loans Receivable, Net (Details - TDRs Specific Valuation Allowance) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Impaired Financing Receivable With And With No Related Allowance [Line Items] | ||
Specific valuation allowance | $ 24 | $ 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 | 50 | 54 |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 137 | 159 |
Impaired Financing Receivable, Recorded Investment | 187 | 213 |
Specific valuation allowance | 5 | 6 |
Impaired Financing Receivable, with Related Allowance, Net Investment | 45 | 48 |
Impaired Financing Receivable, with No Related Allowance, Net Investment | 137 | 159 |
Impaired Financing Receivables, Net Investment, Total | 182 | 207 |
Home Equity [Member] | ||
Impaired Financing Receivable With And With No Related Allowance [Line Items] | ||
Impaired Financing Receivable, With Related Allowance, Recorded Investment | 60 | 83 |
Impaired Financing Receivable, with No Related Allowance, Recorded Investment | 78 | 82 |
Impaired Financing Receivable, Recorded Investment | 138 | 165 |
Specific valuation allowance | 19 | 29 |
Impaired Financing Receivable, with Related Allowance, Net Investment | 41 | 54 |
Impaired Financing Receivable, with No Related Allowance, Net Investment | 78 | 82 |
Impaired Financing Receivables, Net Investment, Total | $ 119 | $ 136 |
Loans Receivable, Net (Detai_10
Loans Receivable, Net (Details - Modifications Types and Financial Impact) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | Dec. 31, 2016USD ($)loan | |
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Number of Contracts | loan | 140 | 334 | 565 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 28 | $ 40 | $ 54 |
Re-Age Extension or Interest Capitalization with Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 19 | 25 | 16 |
Other with Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 1 | 2 | 5 |
Other without Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 8 | 13 | 32 |
Principal Forgiveness [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 1 |
One- To Four-Family [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Number of Contracts | loan | 49 | 40 | 47 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 21 | $ 18 | $ 18 |
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 | 14 | 13 | 8 |
One- To Four-Family [Member] | Other with Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 0 | 1 | 2 |
One- To Four-Family [Member] | Other without Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 7 | 4 | 7 |
One- To Four-Family [Member] | Principal Forgiveness [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 1 |
Home Equity [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Number of Contracts | loan | 91 | 294 | 518 |
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 7 | $ 22 | $ 36 |
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 | 5 | 12 | 8 |
Home Equity [Member] | Other with Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 1 | 1 | 3 |
Home Equity [Member] | Other without Interest Rate Reduction [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | 1 | 9 | 25 |
Home Equity [Member] | Principal Forgiveness [Member] | |||
Financing Receivable, Modifications [Line Items] | |||
Financing Receivable, Modifications, Post-Modification Recorded Investment | $ 0 | $ 0 | $ 0 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities (Details - Fair Value of Derivatives) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative, Collateral [Abstract] | ||
Derivative Asset, Fair Value, Amount Offset Against Collateral | $ 175,000,000 | $ 6,000,000 |
Derivative Liability, Fair Value, Amount Offset Against Collateral | 131,000,000 | 18,000,000 |
Derivative Asset, Not Subject to Master Netting Arrangement | 0 | 131,000,000 |
Derivative Liability, Not Subject to Master Netting Arrangement | 0 | 9,000,000 |
Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 9,763,000,000 | 8,609,000,000 |
Derivative Asset | 1,000,000 | 131,000,000 |
Derivative liability | 0 | (14,000,000) |
Derivative Asset (Liability), Net | 1,000,000 | 117,000,000 |
Fair Value Hedging [Member] | Interest Rate Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Notional Amount | 9,763,000,000 | 8,609,000,000 |
Derivative Asset | 1,000,000 | 131,000,000 |
Derivative liability | 0 | (14,000,000) |
Derivative Asset (Liability), Net | $ 1,000,000 | $ 117,000,000 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities (Details - Cumulative Basis Adjustments) $ in Millions | Dec. 31, 2018USD ($) |
Summary of Dervative Instruments By Hedge Designation [Abstract] | |
Carrying Amount of Hedged Assets | $ 13,203 |
Cumulative amount of basis adjustment included in total carrying amount of fair value hedges | (10) |
Cumulative amount of basis adjustment included in carrying amount of discontinued fair value hedges | (385) |
Closed Portfolio and Beneficial Interest Last of Layer Amortized Cost [Abstract] | |
Prepayable Financial Asset Closed Portfolio, Last-of-Layer, Amortized Cost | 810 |
Amount Representing Hedged Items Designated as Last-of-Layer | 192 |
Basis Adjustment Associated with Hedged Items Designated as Last-of-Layer | $ 6 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities (Details - Fair Value Hedge) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total interest income | $ 2,009 | $ 1,571 | $ 1,233 |
Changes in fair value of hedged item | (51) | (76) | |
Changes in fair value of derivatives | 37 | 70 | |
Interest Income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Total interest income | 2,009 | ||
Net loss on fair value hedging relationships | (13) | ||
Agency Debentures [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Changes in fair value of hedged item | (3) | (32) | |
Changes in fair value of derivatives | 1 | 28 | |
Agency Debentures [Member] | Interest Income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amounts recognized as interest settlements on derivatives | (3) | ||
Changes in fair value of hedged item | (69) | ||
Changes in fair value of derivatives | 68 | ||
Net loss on fair value hedging relationships | (4) | ||
Agency mortgage-backed securities [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Changes in fair value of hedged item | (48) | (44) | |
Changes in fair value of derivatives | $ 36 | $ 42 | |
Agency mortgage-backed securities [Member] | Interest Income [Member] | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amounts recognized as interest settlements on derivatives | (15) | ||
Amortization of basis adjustment | 24 | ||
Changes in fair value of hedged item | (111) | ||
Changes in fair value of derivatives | 93 | ||
Net loss on fair value hedging relationships | $ (9) |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities (Details - Hedge Ineffectiveness) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Fair Value Hedge, Hedging Instrument | $ 37 | $ 70 | |
Fair Value Hedge, Hedged Item | (51) | (76) | |
Gain (loss) on interest rate fair value hedge ineffectiveness | $ (19) | (14) | (6) |
Agency Debentures [Member] | |||
Derivative [Line Items] | |||
Fair Value Hedge, Hedging Instrument | 1 | 28 | |
Fair Value Hedge, Hedged Item | (3) | (32) | |
Gain (loss) on interest rate fair value hedge ineffectiveness | (2) | (4) | |
Agency mortgage-backed securities [Member] | |||
Derivative [Line Items] | |||
Fair Value Hedge, Hedging Instrument | 36 | 42 | |
Fair Value Hedge, Hedged Item | (48) | (44) | |
Gain (loss) on interest rate fair value hedge ineffectiveness | $ (12) | $ (2) |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Gross Amount | $ 827 | $ 777 | |
Accumulated Depreciation and Amortization | (546) | (524) | |
Net Amount | 281 | 253 | |
Depreciation and amortization | 92 | 82 | $ 79 |
Minimum Lease Payments, Sale Leaseback Transactions, Fiscal Year Maturity [Abstract] | |||
Minimum Lease Payments, Sale Leaseback Transactions, Next Twelve Months | 5 | ||
Minimum Lease Payments, Sale Leaseback Transactions, within Two Years | 5 | ||
Minimum Lease Payments, Sale Leaseback Transactions, within Three Years | 5 | ||
Minimum Lease Payments, Sale Leaseback Transactions, within Four Years | 5 | ||
Minimum Lease Payments, Sale Leaseback Transactions, within Five Years | 5 | ||
Minimum Lease Payments, Sale Leaseback Transactions, Thereafter | 4 | ||
Minimum Lease Payments, Sale Leaseback Transactions | 29 | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, Fiscal Year Maturity [Abstract] | |||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, Next Twelve Months | (3) | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Two Years | (3) | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Three Years | (3) | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Four Years | (3) | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, within Five Years | 0 | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions, Thereafter | 0 | ||
Future Minimum Sublease Rentals, Sale Leaseback Transactions | (12) | ||
Software and Software Development Costs [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 416 | 403 | |
Accumulated Depreciation and Amortization | (297) | (289) | |
Net Amount | 119 | 114 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 131 | 122 | |
Accumulated Depreciation and Amortization | (95) | (98) | |
Net Amount | 36 | 24 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 147 | 132 | |
Accumulated Depreciation and Amortization | (117) | (101) | |
Net Amount | 30 | 31 | |
Building [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 72 | 72 | |
Accumulated Depreciation and Amortization | (34) | (32) | |
Net Amount | 38 | 40 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 13 | 7 | |
Accumulated Depreciation and Amortization | (3) | (4) | |
Net Amount | 10 | 3 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 3 | 3 | |
Accumulated Depreciation and Amortization | 0 | 0 | |
Net Amount | 3 | 3 | |
Construction in Progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Gross Amount | 45 | 38 | |
Accumulated Depreciation and Amortization | 0 | 0 | |
Net Amount | 45 | 38 | |
Capitalized software, balance | $ 36 | 22 | |
Software Development [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 4 years | ||
Capitalized internally developed software costs | $ 58 | 53 | 46 |
Depreciation and amortization | $ 43 | $ 36 | $ 36 |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years |
Goodwill and Other Intangible_3
Goodwill and Other Intangibles, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill acquired during period | $ 115,000,000 | ||
Impairment of goodwill | 0 | $ 0 | $ 0 |
Goodwill | 2,485,000,000 | 2,370,000,000 | |
Accumulated impairment loss | 243,000,000 | 243,000,000 | |
Other intangible assets | 491,000,000 | 284,000,000 | |
Identifiable intangible assets acquired | 254,000,000 | ||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Amount | 858,000,000 | 604,000,000 | |
Accumulated Amortization | (367,000,000) | (320,000,000) | |
Finite-Lived Intangible Assets, Net | 491,000,000 | 284,000,000 | |
Customer relationships | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Other intangible assets | $ 441,000,000 | $ 244,000,000 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Original Useful Life | 18 years | 18 years | |
Weighted Average Remaining Useful Life | 13 years | 10 years | |
Gross Amount | $ 786,000,000 | $ 553,000,000 | |
Accumulated Amortization | (345,000,000) | (309,000,000) | |
Finite-Lived Intangible Assets, Net | 441,000,000 | 244,000,000 | |
Technology | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Other intangible assets | $ 49,000,000 | $ 39,000,000 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Original Useful Life | 6 years | 7 years | |
Weighted Average Remaining Useful Life | 5 years | 6 years | |
Gross Amount | $ 68,000,000 | $ 48,000,000 | |
Accumulated Amortization | (19,000,000) | (9,000,000) | |
Finite-Lived Intangible Assets, Net | 49,000,000 | 39,000,000 | |
Trade name | |||
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Other intangible assets | $ 1,000,000 | $ 1,000,000 | |
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Original Useful Life | 2 years | 2 years | |
Weighted Average Remaining Useful Life | 1 year | 1 year | |
Gross Amount | $ 4,000,000 | $ 3,000,000 | |
Accumulated Amortization | (3,000,000) | (2,000,000) | |
Finite-Lived Intangible Assets, Net | $ 1,000,000 | $ 1,000,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangibles, Net (Details - Future Amortization of Other Intangible, Net) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 60 | |
2,020 | 58 | |
2,021 | 57 | |
2,022 | 55 | |
2,023 | 49 | |
Thereafter | 212 | |
Finite-Lived Intangible Assets, Net | $ 491 | $ 284 |
Receivables from and Payables_3
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Receivables from Brokers-Dealers and Clearing Organizations [Abstract] | ||
Securities Borrowed | $ 140 | $ 740 |
Receivables from Clearing Organizations | 555 | 376 |
Other | 65 | 62 |
Receivables from brokers, dealers and clearing organizations | 760 | 1,178 |
Payables to Broker-Dealers and Clearing Organizations [Abstract] | ||
Securities Loaned | 887 | 1,373 |
Payables to Clearing Organizations | 11 | 123 |
Other | 50 | 46 |
Payables to brokers, dealers and clearing organizations | $ 948 | $ 1,542 |
Deposits (Details)
Deposits (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits By Type [Abstract] | ||
Sweep deposits | $ 39,322 | $ 37,734 |
Savings deposits | 4,133 | 2,912 |
Other deposits(1) | 1,858 | 2,096 |
Total deposits | 45,313 | 42,742 |
Deposits Textuals [Abstract] | ||
Non-interest-bearing deposits | $ 193 | $ 207 |
Other Borrowings (Details)
Other Borrowings (Details) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||||
FHLB advances | $ 0 | $ 500 | ||
Trust preferred securities | 0 | 410 | ||
Total other borrowings | 0 | 910 | ||
Redemption of Trust Preferred Securities | 413 | 0 | $ 0 | |
Losses on early extinguishment of debt | $ 58 | 4 | 58 | $ 0 |
Issuance of debt | 420 | |||
E TRADE Securities [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 1,300 | |||
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 2019 [Member] | E TRADE Securities [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 600 | |||
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 2019 [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 2019 [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 | 12 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||||
Total corporate debt | $ 1,409 | $ 991 | ||
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||||
Losses on early extinguishment of debt | $ (58) | (4) | (58) | $ 0 |
Corporate Debt Securities [Member] | ||||
Debt Instrument [Line Items] | ||||
Face Value | 1,420 | 1,000 | ||
Unamortized discount | (11) | (9) | ||
Total corporate debt | 1,409 | 991 | ||
SeniorNotesInterestBearingFourAndSixTwoFivePercent [Member] | Corporate Debt Securities [Member] | ||||
Debt Instrument [Line Items] | ||||
Face Value | $ 460 | |||
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||||
Debt instrument maturity year | 2,023 | |||
Debt instrument, interest rate, stated percentage | 4.625% | |||
SeniorNotesInterestBearingFiveandThreeSecenFivePercentMember [Member] | Corporate Debt Securities [Member] | ||||
Debt Instrument [Line Items] | ||||
Face Value | $ 540 | |||
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||||
Debt instrument maturity year | 2,022 | |||
Debt instrument, interest rate, stated percentage | 5.375% | |||
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 | (3) | (4) | ||
Total corporate debt | $ 397 | $ 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% | ||
Senior Notes Interest Bearing Four And Five Percent [Member] | ||||
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||||
Debt Instrument, maturity date | Jun. 20, 2028 | |||
Senior Notes Interest Bearing Four And Five Percent [Member] | Corporate Debt Securities [Member] | ||||
Debt Instrument [Line Items] | ||||
Face Value | $ 420 | |||
Unamortized discount | (4) | |||
Total corporate debt | $ 416 | |||
Debt Instrument Interest Rate Stated Percentage [Abstract] | ||||
Debt instrument maturity year | 2,028 | |||
Debt instrument, interest rate, stated percentage | 4.50% | |||
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 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax expense (benefit): | |||||
State | $ 13 | $ (11) | $ 3 | ||
Foreign | 0 | 0 | 2 | ||
Total current | 13 | (11) | 5 | ||
Deferred income tax expense (benefit): | |||||
Federal | 266 | 399 | 285 | ||
State | 73 | 51 | (10) | ||
Total deferred | 339 | 450 | 275 | ||
Non-current tax expense (benefit) | 14 | 11 | 6 | ||
Income tax expense (benefit) | $ 366 | 450 | 286 | ||
Federal statutory tax rate related to federal tax reform law | 21.00% | ||||
Additional tax expense related to the federal tax reform law | $ 58 | 58 | |||
Unrecognized Tax Benefits | $ 25 | $ 31 | $ 25 | $ 28 | $ 29 |
Income Taxes (Details - Unrecog
Income Taxes (Details - Unrecognized Tax Benefits) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 6 | ||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 25 | ||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 4 | ||
Income Tax Examination, Penalties and Interest Accrued | 3 | $ 6 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits | 25 | 28 | $ 29 |
Additions based on tax positions related to prior years | 3 | 1 | 1 |
Additions based on tax positions related to current year | 9 | 11 | 4 |
Reductions based on tax positions related to prior years | 0 | (3) | (3) |
Settlements with taxing authorities | (2) | (6) | (1) |
Statute of limitations lapses | (4) | (6) | (2) |
Unrecognized tax benefits | $ 31 | $ 25 | $ 28 |
HONG KONG | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,012 | ||
HONG KONG | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,018 | ||
UNITED KINGDOM | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,016 | ||
UNITED KINGDOM | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,017 | ||
UNITED STATES | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,015 | ||
UNITED STATES | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,018 | ||
Various States | Earliest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,013 | ||
Various States | Latest Tax Year | |||
Income Tax Contingency [Line Items] | |||
Open Tax Year | 2,018 |
Income Taxes (Details - Deferre
Income Taxes (Details - Deferred Taxes and Valuation Allowance) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred Taxes and Valuation Allowance Text [Line Items] | ||||
Deferred tax asset related to net operating losses | $ 162 | $ 349 | ||
Undistributed earnings of foreign subsidiaries | 0 | |||
Valuation allowance | (20) | (23) | $ (35) | $ (82) |
Valuation allowance, deferred tax asset, increase (decrease), amount | (3) | (12) | ||
Income tax expense (benefit) due to change in tax status | (25) | |||
Deferred tax assets: | ||||
Deferred tax asset related to net operating losses | 162 | 349 | ||
Reserves and allowances, net | 105 | 155 | ||
Financial instruments valuations | 54 | 35 | ||
Deferred compensation | 34 | 34 | ||
Tax credits | 69 | 68 | ||
Other | 1 | 18 | ||
Total deferred tax assets | 425 | 659 | ||
Valuation allowance | (20) | (23) | $ (35) | $ (82) |
Total deferred tax assets, net of valuation allowance | 405 | 636 | ||
Deferred tax liabilities: | ||||
Depreciation and amortization | (413) | (385) | ||
Other | (2) | 0 | ||
Total deferred tax liabilities | (415) | (385) | ||
Net deferred tax asset | $ 251 | |||
Net deferred tax liabilities | (10) | |||
Federal Jurisdiction [Member] | ||||
Deferred Taxes and Valuation Allowance Text [Line Items] | ||||
Operating Loss Carryforwards | 221 | |||
Deferred tax asset related to net operating losses | 46 | |||
Valuation allowance | 0 | |||
Deferred tax assets: | ||||
Deferred tax asset related to net operating losses | 46 | |||
Valuation allowance | 0 | |||
State and Local Jurisdiction | ||||
Deferred Taxes and Valuation Allowance Text [Line Items] | ||||
Operating Loss Carryforwards | 2,300 | |||
Deferred tax asset related to net operating losses | 114 | |||
Valuation allowance recorded against net operating losses | 20 | |||
Deferred tax assets: | ||||
Deferred tax asset related to net operating losses | $ 114 | |||
Earliest Tax Year | State and Local Jurisdiction | ||||
Deferred Taxes and Valuation Allowance Text [Line Items] | ||||
Operating loss carryforwards, expiration date | Dec. 31, 2019 | |||
Latest Tax Year | State and Local Jurisdiction | ||||
Deferred Taxes and Valuation Allowance Text [Line Items] | ||||
Operating loss carryforwards, expiration date | Dec. 31, 2037 |
Income Taxes (Details - Valuati
Income Taxes (Details - Valuation Allowance Rollforward) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance, beginning of period | $ (23) | $ (35) | $ (82) |
Additions related to tax reform (reduced federal benefit) | 0 | (4) | 0 |
Reductions related to the wind-down of foreign operations | 2 | 14 | 0 |
Reductions (additions) related to state valuation allowance release | 1 | 2 | 47 |
Valuation allowance, end of period | $ (20) | $ (23) | $ (35) |
Income Taxes (Details - Effecti
Income Taxes (Details - Effective Tax Rate) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Federal statutory rate | 21.00% | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 5.10% | 4.20% | 3.90% |
Difference between statutory rate and foreign effective tax rate | 0.00% | 0.00% | 0.20% |
Tax exempt income | 0.00% | 0.00% | (0.10%) |
Disallowed executive compensation | 0.20% | 0.10% | 0.20% |
Change in valuation allowances | 0.00% | (0.10%) | (5.50%) |
Effective Income Tax Rate Reconciliation, Percentage Tax Credits | (0.10%) | (0.30%) | (0.70%) |
Effective Income Tax Rate Reconciliation, Tax Contingency, Percent | 0.20% | (0.30%) | 0.10% |
Deferred tax adjustments | (0.50%) | (0.30%) | 1.30% |
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Percent | 0.00% | 5.50% | 0.00% |
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Share-based Compensation Cost, Percent | (0.60%) | (0.70%) | 0.00% |
Other | 0.50% | (0.90%) | (0.30%) |
Effective tax rate | 25.80% | 42.20% | 34.10% |
Shareholders Equity (Details -
Shareholders Equity (Details - Stock) - USD ($) $ / shares in Units, $ in Millions | Feb. 07, 2019 | Jan. 23, 2019 | Oct. 17, 2018 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2018 | Jul. 20, 2017 |
Class of Stock [Line Items] | ||||||||||||
Preferred stock, shares outstanding | 403,000 | 403,000 | 403,000 | 403,000 | ||||||||
Preferred stock, amount outstanding | $ 689 | $ 689 | $ 689 | $ 689 | ||||||||
Preferred stock dividend declared | $ 36 | $ 25 | ||||||||||
Common stock dividend declared, per share | $ 0.14 | $ 0 | $ 0 | |||||||||
Common stock dividends | $ 36 | |||||||||||
Share Repurchases | ||||||||||||
Repurchases of common stock, shares | 21,300,000 | |||||||||||
Average repurchase price | $ 53.49 | |||||||||||
Repurchases of common stock, amount | $ 1,140 | $ 362 | $ 452 | |||||||||
Common Stock | ||||||||||||
Share Repurchases | ||||||||||||
Repurchases of common stock, shares | 22,000,000 | 9,000,000 | 19,000,000 | |||||||||
Repurchases of common stock, amount | $ 1 | |||||||||||
Debt Conversion [Line Items] | ||||||||||||
Debt Conversion, Original Debt, Amount | $ 0 | $ 3 | ||||||||||
Debt conversion, converted instrument, shares issued | 300,000 | |||||||||||
Common Stock | 2017 Plan [Member] | ||||||||||||
Share Repurchases | ||||||||||||
Repurchases of stock, authorized amount | $ 1,000 | |||||||||||
Repurchases of common stock, shares | 11,000,000 | |||||||||||
Average repurchase price | $ 58.15 | |||||||||||
Repurchases of common stock, amount | $ 638 | |||||||||||
Common Stock | 2018 Plan [Member] | ||||||||||||
Share Repurchases | ||||||||||||
Repurchases of stock, authorized amount | $ 1,000 | |||||||||||
Repurchases of common stock, shares | 10,300,000 | |||||||||||
Average repurchase price | $ 48.53 | |||||||||||
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 | 400,000 | ||||||||||
Preferred stock, liquidation preference per share | $ 1,000 | $ 1,000 | ||||||||||
Preferred stock, amount outstanding | $ 394 | $ 394 | $ 394 | $ 394 | ||||||||
Dividends payable, date declared | Jul. 26, 2018 | Feb. 8, 2018 | Aug. 2, 2017 | Feb. 2, 2017 | ||||||||
Dividend payable, date of record | Aug. 31, 2018 | Feb. 28, 2018 | Aug. 31, 2017 | Feb. 28, 2017 | ||||||||
Dividends payable, date to be paid | Sep. 17, 2018 | Mar. 15, 2018 | Sep. 15, 2017 | Mar. 15, 2017 | ||||||||
Preferred stock dividend declared, per share | $ 29.38 | $ 29.38 | $ 29.38 | $ 32.64 | ||||||||
Preferred stock dividend declared | $ 12 | $ 12 | $ 12 | $ 13 | ||||||||
Series A Preferred Stock [Member] | LIBOR [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, basis spread on variable rate | 4.435% | 4.435% | ||||||||||
Series A Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||
Dividends payable, date declared | Feb. 7, 2019 | |||||||||||
Dividend payable, date of record | Feb. 28, 2019 | |||||||||||
Dividends payable, date to be paid | Mar. 15, 2019 | |||||||||||
Preferred stock dividend declared, per share | $ 29.38 | |||||||||||
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 | 3,000 | ||||||||||
Preferred stock, liquidation preference per share | $ 100,000 | $ 100,000 | ||||||||||
Preferred stock, amount outstanding | $ 295 | $ 295 | $ 295 | $ 295 | ||||||||
Dividends payable, date declared | Jul. 26, 2018 | |||||||||||
Dividend payable, date of record | Aug. 31, 2018 | |||||||||||
Dividends payable, date to be paid | Sep. 17, 2018 | |||||||||||
Preferred stock dividend declared, per share | $ 4,107.50 | |||||||||||
Preferred stock dividend declared | $ 12 | |||||||||||
Series B Preferred Stock [Member] | LIBOR [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Preferred stock, basis spread on variable rate | 3.16% | 3.16% | ||||||||||
Series B Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||
Dividends payable, date declared | Feb. 7, 2019 | |||||||||||
Dividend payable, date of record | Feb. 28, 2019 | |||||||||||
Dividends payable, date to be paid | Mar. 15, 2019 | |||||||||||
Preferred stock dividend declared, per share | $ 2,650 | |||||||||||
Preferred stock dividend declared, per depositary share | $ 26.50 | |||||||||||
Common Stock | ||||||||||||
Dividends payable, date declared | Oct. 17, 2018 | |||||||||||
Dividend payable, date of record | Oct. 30, 2018 | |||||||||||
Dividends payable, date to be paid | Nov. 15, 2018 | |||||||||||
Common stock dividend declared, per share | $ 0.14 | |||||||||||
Common stock dividends | $ 36 | |||||||||||
Common Stock | Subsequent Event [Member] | ||||||||||||
Dividends payable, date declared | Jan. 23, 2019 | |||||||||||
Dividend payable, date of record | Feb. 1, 2019 | |||||||||||
Dividends payable, date to be paid | Feb. 15, 2019 | |||||||||||
Common stock dividend declared, per share | $ 0.14 | |||||||||||
Common stock dividends | $ 35 |
Shareholders' Equity (Details -
Shareholders' Equity (Details - Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, | $ (26) | $ (137) | $ (99) | |
Other comprehensive income (loss), before reclassifications | 137 | (5) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (26) | (33) | ||
Transfer of held-to-maturity securities to available-for-sale securities | 6 | [1] | 0 | 0 |
Other comprehensive income (loss) | (228) | 111 | (38) | |
Cumulative effect of accounting change | 3 | |||
Ending balance, | (275) | (26) | (137) | |
Transfer of held-to-maturity securities to available-for-sale securities | 4,672 | 0 | 0 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | 0 | |
Transfer of held-to-maturity securities to available-for-sale securities | 6 | [1] | 0 | 0 |
Unamortized unrealized pre-tax losses related to transfer of available-for-sale securities to held-to-maturity | 22 | |||
Unamortized unrealized pre-tax losses related to available-for-sale securities transferred to held-to-maturity in 2018. | 16 | |||
Hedge accounting adoption | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Transfer of held-to-maturity securities to available-for-sale securities | 4,700 | |||
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) | (101) | |
Other comprehensive income (loss), before reclassifications | (203) | 137 | (5) | |
Amounts reclassified from accumulated other comprehensive income (loss) | (31) | (24) | (33) | |
Transfer of held-to-maturity securities to available-for-sale securities | 6 | |||
Other comprehensive income (loss) | (228) | 113 | (38) | |
Reclassification of tax effects due to federal tax reform | (14) | |||
Ending balance, | (275) | (26) | (139) | |
Transfer of held-to-maturity securities to available-for-sale securities | 6 | |||
Available-for-sale securities | Hedge accounting adoption | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Cumulative effect of accounting change | (7) | |||
Foreign currency translation | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance, | $ 0 | 2 | 2 | |
Other comprehensive income (loss), before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (2) | 0 | ||
Other comprehensive income (loss) | (2) | 0 | ||
Ending balance, | $ 0 | $ 2 | ||
[1] | During the year ended December 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million , or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies |
Shareholders' Equity (Details_2
Shareholders' Equity (Details - Other Comprehensive Income Activity) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Available-for-sale securities, before tax | ||||
Unrealized gains (losses), before tax | $ (272) | $ 213 | $ (10) | |
Reclassification into earnings, before tax | (42) | (39) | (53) | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, before tax | 7 | 0 | 0 | |
Net change from available-for-sale securities, before tax | (307) | 174 | (63) | |
Foreign currency translation, before tax | ||||
Reclassification into earnings, before tax | 0 | (2) | 0 | |
Available-for-sale securities, tax effect | ||||
Unrealized gains (losses), tax effect | 69 | (76) | 5 | |
Reclassification into earnings, tax effect | 11 | 15 | 20 | |
Other comprehensive income, transfers from held-to-maturity to available-for-sale securities, tax effect | (1) | 0 | 0 | |
Net change from available-for-sale securities, tax effect | 79 | (61) | 25 | |
Foreign currency translation, tax effect | ||||
Reclassification into earnings, tax effect | 0 | 0 | 0 | |
Available-for-sale securities, after tax | ||||
Unrealized gains (losses), after tax | (203) | 137 | (5) | |
Reclassification into earnings, after tax | (31) | (24) | (33) | |
Transfer of held-to-maturity securities to available-for-sale securities | 6 | [1] | 0 | 0 |
Net change from available-for-sale securities | (228) | 113 | (38) | |
Foreign currency translation, after tax | ||||
Reclassification into earnings, after tax | 0 | (2) | 0 | |
Other comprehensive income (loss), before tax | (307) | 172 | (63) | |
Other comprehensive income (loss), tax effect | 79 | (61) | 25 | |
Other comprehensive income (loss) | $ (228) | $ 111 | $ (38) | |
[1] | During the year ended December 31, 2018, securities with a carrying value of $4.7 billion and related unrealized pre-tax gain of $7 million , or $6 million net of tax, were transferred from held-to-maturity securities to available-for-sale securities as part of a one-time transition election for early adopting the new derivatives and hedge accounting guidance. See Note 1—Organization, Basis of Presentation and Summary of Significant Accounting Policies |
Shareholders' Equity (Details_3
Shareholders' Equity (Details - Reclassification Out Of Accumulated Other Comprehensive Loss) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Interest income | $ 2,009 | $ 1,571 | $ 1,233 | ||||||||
Reclassification into earnings, net | 1,418 | 1,064 | 838 | ||||||||
Income tax (expense) benefit | (366) | (450) | (286) | ||||||||
Other Non-interest expense | (77) | (76) | (71) | ||||||||
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | 1,052 | 614 | 552 |
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 | 45 | 39 | 53 | ||||||||
Interest income | (3) | 0 | 0 | ||||||||
Reclassification into earnings, net | 42 | 39 | 53 | ||||||||
Income tax (expense) benefit | (11) | (15) | (20) | ||||||||
Net income | 31 | 24 | 33 | ||||||||
Foreign currency translation | Reclassification out of Accumulated Other Comprehensive Income (Loss) | |||||||||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||||
Other Non-interest expense | 0 | 2 | 0 | ||||||||
Net income | $ 0 | $ 2 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | $ 1,052 | $ 614 | $ 552 |
Preferred stock dividends | 36 | 25 | 0 | ||||||||
Net income available to common shareholders | $ 1,016 | $ 589 | $ 552 | ||||||||
Share data (in thousands): | |||||||||||
Basic weighted-average shares outstanding | 260,600 | 273,190 | 277,789 | ||||||||
Effect of weighted-average dilutive securities: | |||||||||||
Restricted stock and options(1) | 1,053 | 1,076 | 872 | ||||||||
Convertible debentures | 16 | 86 | 387 | ||||||||
Diluted weighted-average shares outstanding(2) | 261,669 | 274,352 | 279,048 | ||||||||
Basic earnings per common share (in dollars per share) | $ 1.07 | $ 1.01 | $ 0.95 | $ 0.88 | $ 0.48 | $ 0.49 | $ 0.70 | $ 0.48 | $ 3.90 | $ 2.16 | $ 1.99 |
Diluted earnings per common share (in dollars per share) | $ 1.06 | $ 1 | $ 0.95 | $ 0.88 | $ 0.48 | $ 0.49 | $ 0.70 | $ 0.48 | $ 3.88 | $ 2.15 | $ 1.98 |
Share-Based Compensation, Emp_3
Share-Based Compensation, Employee Incentive and Retirement Plans (Details) - USD ($) $ / shares in Units, $ in Millions | May 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ 46 | $ 41 | $ 30 | |
Options outstanding, number | 100,000 | |||
Unrecognized compensation expense related to non-vested share-based awards, other than options | $ 48 | |||
Total fair value of vested share-based awards, other than options | 76 | 58 | 48 | |
Contribution expense under 401(k) Plan | 19 | $ 11 | $ 11 | |
Employee Stock Option [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense related to non-vested stock options | $ 0 | |||
Employee Stock Option [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 2 years | |||
Expiration period | 7 years | |||
Employee Stock Option [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Expiration period | 10 years | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at December 31, 2018, shares | 100,000 | |||
Restricted Stock Units (RSUs) [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year 4 months 24 days | |||
Conversion of stock, shares issued | 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at December 31, 2017, shares | 2,444,000 | |||
Granted, shares | 903,000 | |||
Released (vested), shares | (1,293,000) | |||
Canceled/forfeited, shares | (67,000) | |||
Outstanding at December 31, 2018, shares | 1,987,000 | 2,444,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Outstanding at December 31, 2017, weighted average | $ 29.02 | |||
Granted, weighted average | 50.14 | |||
Released (vested), weighted average | 28.07 | |||
Canceled/forfeited, weighted average | 39.25 | |||
Outstanding at December 31, 2018, weighted average | $ 39.87 | $ 29.02 | ||
Restricted Stock Units (RSUs) [Member] | Expected to vest [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at December 31, 2018, shares | 1,902,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Outstanding at December 31, 2018, weighted average | $ 38.48 | |||
Restricted Stock Units (RSUs) [Member] | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Restricted Stock Units (RSUs) [Member] | Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years | |||
Performance Shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Conversion of stock, shares issued | 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||||
Outstanding at December 31, 2017, shares | 181,000 | |||
Granted, shares | 169,000 | |||
Released (vested), shares | (121,000) | |||
Canceled/forfeited, shares | 0 | |||
Outstanding at December 31, 2018, shares | 229,000 | 181,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Outstanding at December 31, 2017, weighted average | $ 43.64 | |||
Granted, weighted average | 44.21 | |||
Released (vested), weighted average | 34.97 | |||
Canceled/forfeited, weighted average | 0 | |||
Outstanding at December 31, 2018, weighted average | $ 48.66 | $ 43.64 | ||
Performance Shares [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Performance Shares [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Performance Shares [Member] | Share-based Compensation Award, Tranche One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
A2015Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares available for grant | 8,000,000 | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, shares authorized under ESPP | 4,000,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 95.00% | |||
Allocated share-based compensation expense | $ 0 | |||
Shares purchased under the plan | 0 | |||
Employee Stock Purchase Plan | Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 85.00% |
Regulatory Requirements (Detail
Regulatory Requirements (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Feb. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Minimum percentage of net capital required for broker dealer subsidiary aggregate indebtedness | 6.67% | ||
Required Net Capital | $ 210,000,000 | $ 215,000,000 | |
Net Capital | 1,338,000,000 | 1,251,000,000 | |
Excess Net Capital | 1,128,000,000 | 1,036,000,000 | |
E TRADE Securities [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Net capital requirement under alternative method | $ 250,000 | ||
Minimum percentage of aggregate debit balances to calculate net capital | 2.00% | ||
Required Net Capital | $ 209,000,000 | 211,000,000 | |
Net Capital | 1,294,000,000 | 1,213,000,000 | |
Excess Net Capital | 1,085,000,000 | 1,002,000,000 | |
Dividends from subsidiaries paid to parent company | 610,000,000 | ||
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 | 18,000,000 | 19,000,000 | |
Excess Net Capital | 18,000,000 | $ 19,000,000 | |
E TRADE Bank [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Dividends from subsidiaries paid to parent company | $ 540,000,000 | ||
Subsequent Event [Member] | E TRADE Securities [Member] | |||
Broker Dealer Subsidiaries Net Capital [Line Items] | |||
Dividends from subsidiaries paid to parent company | $ 250,000,000 |
Regulatory Requirements - Bank
Regulatory Requirements - Bank Capital Requirements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
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 | $ 4,097 | $ 4,386 | |
Tier 1 Leverage Capital to Average Assets | 6.60% | 7.40% | |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 3,101 | $ 2,976 | |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% | |
Excess Tier 1 Leverage Capital | $ 996 | $ 1,410 | |
Common equity Tier I capital [Abstract] | |||
Common Equity Tier 1 Capital | $ 3,408 | $ 3,773 | |
Common Equity Tier 1 Capital to Risk Weighted Assets | 31.10% | 33.90% | |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 713 | $ 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 | $ 2,695 | $ 3,051 | |
Tier I risk based capital [Abstract] | |||
Tier One Risk Based Capital | $ 4,097 | $ 4,386 | |
Tier One Risk Based Capital to Risk Weighted Assets | 37.30% | 39.50% | |
Tier One Risk Based Capital Required to be Well Capitalized | $ 877 | $ 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 | $ 3,220 | $ 3,497 | |
Total risk-based capital [Abstract] | |||
Capital | $ 4,143 | $ 4,874 | |
Capital to Risk Weighted Assets | 37.80% | 43.80% | |
Capital Required to be Well Capitalized | $ 1,097 | $ 1,111 | |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% | |
Excess capital | $ 3,046 | $ 3,763 | |
Dividends from subsidiaries paid to parent company | 1,150 | 350 | $ 858 |
E TRADE Bank [Member] | |||
Tier I leverage [Abstract] | |||
Tier 1 Leverage Capital | $ 3,484 | $ 3,620 | |
Tier 1 Leverage Capital to Average Assets | 7.10% | 7.60% | |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 2,461 | $ 2,394 | |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% | |
Excess Tier 1 Leverage Capital | $ 1,023 | $ 1,226 | |
Common equity Tier I capital [Abstract] | |||
Common Equity Tier 1 Capital | $ 3,484 | $ 3,620 | |
Common Equity Tier 1 Capital to Risk Weighted Assets | 34.90% | 35.70% | |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 650 | $ 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 | $ 2,834 | $ 2,960 | |
Tier I risk based capital [Abstract] | |||
Tier One Risk Based Capital | $ 3,484 | $ 3,620 | |
Tier One Risk Based Capital to Risk Weighted Assets | 34.90% | 35.70% | |
Tier One Risk Based Capital Required to be Well Capitalized | $ 800 | $ 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 | $ 2,684 | $ 2,808 | |
Total risk-based capital [Abstract] | |||
Capital | $ 3,521 | $ 3,694 | |
Capital to Risk Weighted Assets | 35.20% | 36.40% | |
Capital Required to be Well Capitalized | $ 999 | $ 1,015 | |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% | |
Excess capital | $ 2,522 | $ 2,679 | |
Dividends from subsidiaries paid to parent company | 540 | ||
E TRADE Savings Bank | |||
Tier I leverage [Abstract] | |||
Tier 1 Leverage Capital | $ 1,456 | $ 904 | |
Tier 1 Leverage Capital to Average Assets | 26.60% | 26.60% | |
Tier 1 Leverage Capital Required to be Well Capitalized | $ 273 | $ 170 | |
Tier 1 Leverage Capital Required to be Well Capitalized to Average Assets | 5.00% | 5.00% | |
Excess Tier 1 Leverage Capital | $ 1,183 | $ 734 | |
Common equity Tier I capital [Abstract] | |||
Common Equity Tier 1 Capital | $ 1,456 | $ 904 | |
Common Equity Tier 1 Capital to Risk Weighted Assets | 169.40% | 111.10% | |
Common Equity Tier 1 Capital Required To Be Well Capitalized | $ 56 | $ 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 | $ 1,400 | $ 851 | |
Tier I risk based capital [Abstract] | |||
Tier One Risk Based Capital | $ 1,456 | $ 904 | |
Tier One Risk Based Capital to Risk Weighted Assets | 169.40% | 111.10% | |
Tier One Risk Based Capital Required to be Well Capitalized | $ 69 | $ 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 | $ 1,387 | $ 839 | |
Total risk-based capital [Abstract] | |||
Capital | $ 1,456 | $ 905 | |
Capital to Risk Weighted Assets | 169.40% | 111.20% | |
Capital Required to be Well Capitalized | $ 86 | $ 81 | |
Capital Required to be Well Capitalized to Risk Weighted Assets | 10.00% | 10.00% | |
Excess capital | $ 1,370 | $ 824 |
Lease Arrangements (Details)
Lease Arrangements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Lease Arrangements Textuals [Abstract] | |||
Lease Expiration Date | Dec. 31, 2031 | ||
Operating leases, rent expense, net | $ 28 | $ 26 | $ 24 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 22 | ||
Operating Leases, Future Minimum Payments, Due in Two Years | 30 | ||
Operating Leases, Future Minimum Payments, Due in Three Years | 29 | ||
Operating Leases, Future Minimum Payments, Due in Four Years | 26 | ||
Operating Leases, Future Minimum Payments, Due in Five Years | 26 | ||
Operating Leases, Future Minimum Payments, Due Thereafter | 136 | ||
Operating Leases, Future Minimum Payments Due | 269 | ||
Sublease proceeds | (1) | ||
Net lease commitments | $ 268 |
Commitments, Contingencies an_2
Commitments, Contingencies and Other Regulatory Matters (Details) $ in Millions | May 16, 2011 | Dec. 31, 2018USD ($)$ / CapitalSecurity | Dec. 31, 2003USD ($) |
Loss Contingencies [Line Items] | |||
Commitments to fund partnerships | $ 67 | ||
Time deposit maturities, next rolling twelve months | $ 16 | ||
Trust preferred securities contractual time period | 30 years | ||
Liquidation amount per trust preferred security | $ / CapitalSecurity | 1,000 | ||
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 |
Condensed Financial Informati_3
Condensed Financial Information (Parent Only) (Details - Condensed Statement of Comprehensive Income) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Other revenue | $ 45 | $ 43 | $ 41 | ||||||||
Total net revenue | $ 735 | $ 720 | $ 710 | $ 708 | $ 637 | $ 599 | $ 577 | $ 553 | 2,873 | 2,366 | 1,941 |
Total non-interest expense | 1,541 | 1,470 | 1,252 | ||||||||
Income before income tax expense (benefit) and equity in income (loss) of consolidated subsidiaries | 1,418 | 1,064 | 838 | ||||||||
Income tax expense (benefit) | 366 | 450 | 286 | ||||||||
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | 1,052 | 614 | 552 |
Other comprehensive (loss) income | (228) | 111 | (38) | ||||||||
Comprehensive income | 824 | 725 | 514 | ||||||||
Net income available to common shareholders | 1,016 | 589 | 552 | ||||||||
Preferred stock dividends | 36 | 25 | 0 | ||||||||
Parent Company [Member] | |||||||||||
Condensed Financial Statements, Captions [Line Items] | |||||||||||
Dividends from subsidiaries(1) | 1,150 | 350 | 858 | ||||||||
Other revenue | 410 | 377 | 328 | ||||||||
Total net revenue | 1,560 | 727 | 1,186 | ||||||||
Total non-interest expense | 575 | 611 | 501 | ||||||||
Income before income tax expense (benefit) and equity in income (loss) of consolidated subsidiaries | 985 | 116 | 685 | ||||||||
Income tax expense (benefit) | 149 | 75 | 456 | ||||||||
Equity in undistributed income (loss) of subsidiaries | 216 | 573 | 323 | ||||||||
Net income | 1,052 | 614 | 552 | ||||||||
Other comprehensive (loss) income | (228) | 111 | (38) | ||||||||
Comprehensive income | 824 | 725 | $ 514 | ||||||||
Net income available to common shareholders | 1,000 | 589 | |||||||||
Preferred stock dividends | $ 36 | $ 25 |
Condensed Financial Informati_4
Condensed Financial Information (Parent Only) (Details - Condensed Balance Sheet) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and equivalents | $ 2,333 | $ 931 | $ 1,950 | |
Property and equipment, net | 281 | 253 | ||
Other assets | 942 | 1,234 | ||
Assets | 65,003 | 63,365 | ||
Corporate debt | 1,409 | 991 | ||
Other liabilities | 654 | 800 | ||
Total liabilities | 58,441 | 56,434 | ||
Total shareholders’ equity | 6,562 | 6,931 | 6,272 | $ 5,799 |
Total liabilities and shareholders’ equity | 65,003 | 63,365 | ||
Parent Company [Member] | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Cash and equivalents | 340 | 493 | $ 416 | $ 432 |
Property and equipment, net | 169 | 157 | ||
Investment in consolidated subsidiaries | 7,722 | 7,268 | ||
Receivable from subsidiaries | 24 | 59 | ||
Other assets | 175 | 202 | ||
Assets | 8,430 | 8,179 | ||
Corporate debt | 1,409 | 991 | ||
Other liabilities | 459 | 257 | ||
Total liabilities | 1,868 | 1,248 | ||
Total shareholders’ equity | 6,562 | 6,931 | ||
Total liabilities and shareholders’ equity | $ 8,430 | $ 8,179 |
Condensed Financial Informati_5
Condensed Financial Information (Parent Only) (Details - Condensed Statement of Cash Flows) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Condensed Financial Statements, Captions [Line Items] | ||||||||||||
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | $ 1,052 | $ 614 | $ 552 | |
Depreciation and amortization | 244 | 262 | 239 | |||||||||
Equity in undistributed (income) loss from subsidiaries | 9 | (12) | (11) | |||||||||
Losses on early extinguishment of debt | $ 58 | 4 | 58 | 0 | ||||||||
Other | 18 | (7) | (5) | |||||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | 1,686 | 582 | 2,044 | |||||||||
Capital expenditures for property and equipment | (112) | (102) | (75) | |||||||||
Other | 25 | 43 | (4) | |||||||||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (190) | (13,576) | (3,999) | |||||||||
Proceeds from issuance of senior notes | 420 | 999 | 0 | |||||||||
Payments on senior notes | 0 | (1,049) | 0 | |||||||||
Proceeds from issuance of preferred stock | 0 | 300 | 400 | |||||||||
Repurchases of common stock | (1,139) | (362) | (452) | |||||||||
Preferred stock dividends | (36) | (25) | 0 | |||||||||
Common stock dividends | (36) | 0 | 0 | |||||||||
Other | (32) | (36) | (28) | |||||||||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | 45 | 11,387 | 2,075 | |||||||||
Cash and equivalents | 2,333 | 931 | 2,333 | 931 | 1,950 | |||||||
Parent Company [Member] | ||||||||||||
Condensed Financial Statements, Captions [Line Items] | ||||||||||||
Net income | 1,052 | 614 | 552 | |||||||||
Depreciation and amortization | 55 | 51 | 48 | |||||||||
Equity in undistributed (income) loss from subsidiaries | (216) | (573) | (323) | |||||||||
Losses on early extinguishment of debt | 0 | 58 | 0 | |||||||||
Other | 292 | 213 | 585 | |||||||||
Net Cash Provided by (Used in) Operating Activities, Continuing Operations | 1,183 | 363 | 862 | |||||||||
Capital expenditures for property and equipment | (60) | (59) | (36) | |||||||||
Cash contributions to subsidiaries | (464) | (61) | (766) | |||||||||
Other | 2 | 6 | 16 | |||||||||
Net Cash Provided by (Used in) Investing Activities, Continuing Operations | (522) | (114) | (786) | |||||||||
Proceeds from issuance of senior notes | 420 | 999 | 0 | |||||||||
Payments on senior notes | 0 | (1,049) | 0 | |||||||||
Proceeds from issuance of preferred stock | 0 | 300 | 400 | |||||||||
Repurchases of common stock | (1,139) | (362) | (452) | |||||||||
Preferred stock dividends | (36) | (25) | 0 | |||||||||
Common stock dividends | (36) | 0 | 0 | |||||||||
Other | (23) | (35) | (40) | |||||||||
Net Cash Provided by (Used in) Financing Activities, Continuing Operations | (814) | (172) | (92) | |||||||||
Cash and Cash Equivalents, Period Increase (Decrease) | (153) | 77 | (16) | |||||||||
Cash and equivalents | $ 340 | $ 493 | $ 340 | $ 493 | $ 416 | $ 432 |
Condensed Financial Informati_6
Condensed Financial Information (Parent Only) (Details - Guarantees) | Dec. 31, 2018USD ($) |
Parent Company [Member] | Foreign Exchange Guarantee [Member] | |
Condensed Financial Information Parent Company Guarantees [Line Items] | |
Guarantor obligations, current carrying value | $ 0 |
Quarterly Data (Unaudited) (Det
Quarterly Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total net revenue | $ 735 | $ 720 | $ 710 | $ 708 | $ 637 | $ 599 | $ 577 | $ 553 | $ 2,873 | $ 2,366 | $ 1,941 |
Net income | $ 270 | $ 285 | $ 250 | $ 247 | $ 129 | $ 147 | $ 193 | $ 145 | $ 1,052 | $ 614 | $ 552 |
Earnings per share: | |||||||||||
Basic (in dollars per share) | $ 1.07 | $ 1.01 | $ 0.95 | $ 0.88 | $ 0.48 | $ 0.49 | $ 0.70 | $ 0.48 | $ 3.90 | $ 2.16 | $ 1.99 |
Diluted (in dollars per share) | $ 1.06 | $ 1 | $ 0.95 | $ 0.88 | $ 0.48 | $ 0.49 | $ 0.70 | $ 0.48 | $ 3.88 | $ 2.15 | $ 1.98 |
Provision (benefit) for loan losses | $ (99) | $ (86) | $ (168) | $ (149) | |||||||
Losses on early extinguishment of debt | $ (58) | $ (4) | (58) | $ 0 | |||||||
Additional tax expense related to the federal tax reform law | $ 58 | $ 58 |