Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | FLAGSTAR BANCORP INC | |
Entity Central Index Key | 1,033,012 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 57,181,536 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash | $ 88 | $ 84 |
Interest-earning deposits | 145 | 74 |
Total cash and cash equivalents | 233 | 158 |
Investment securities available-for-sale | 1,637 | 1,480 |
Investment securities held-to-maturity | 977 | 1,093 |
Loans held-for-sale ($4,907 and $3,145 measured at fair value, respectively) | 4,939 | 3,177 |
Loans held-for-investment ($13 and $72 measured at fair value, respectively) | 7,203 | 6,065 |
Loans with government guarantees | 253 | 365 |
Less: allowance for loan losses | (140) | (142) |
Total loans held-for-investment and loans with government guarantees, net | 7,316 | 6,288 |
Mortgage servicing rights | 246 | 335 |
Net deferred tax asset | 248 | 286 |
Federal Home Loan Bank stock | 264 | 180 |
Premises and equipment, net | 314 | 275 |
Other assets | 706 | 781 |
Total assets | 16,880 | 14,053 |
Liabilities and Stockholders’ Equity | ||
Noninterest bearing deposits | 2,272 | 2,077 |
Interest bearing deposits | 6,889 | 6,723 |
Total deposits | 9,161 | 8,800 |
Short-term Federal Home Loan Bank advances | 4,065 | 1,780 |
Long-term Federal Home Loan Bank advances | 1,300 | 1,200 |
Other long-term debt | 493 | 493 |
Representation and warranty reserve | 16 | 27 |
Other liabilities ($60 and $60 measured at fair value, respectively) | 394 | 417 |
Total liabilities | 15,429 | 12,717 |
Stockholders’ Equity | ||
Common stock $0.01 par value, 80,000,000 and 70,000,000 shares authorized; 57,181,536 and 56,824,802 shares issued and outstanding, respectively | 1 | 1 |
Additional paid in capital | 1,511 | 1,503 |
Accumulated other comprehensive loss | (8) | (7) |
Accumulated deficit | (53) | (161) |
Total stockholders’ equity | 1,451 | 1,336 |
Total liabilities and stockholders’ equity | $ 16,880 | $ 14,053 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Loans held-for-sale, fair value | $ 3,145 | |
Loans held-for-investment, fair value | $ 13 | 72 |
Liabilities and Stockholders’ Equity | ||
Other liabilities, fair value | $ 60 | $ 60 |
Stockholders' Equity | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 80,000,000 | 70,000,000 |
Common stock, shares issued (in shares) | 57,181,536 | 56,824,802 |
Common stock, shares outstanding (in shares) | 57,181,536 | 56,824,802 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Interest Income | ||||
Loans | $ 120 | $ 90 | $ 319 | $ 256 |
Investment securities | 20 | 16 | 59 | 50 |
Interest-earning deposits and other | 0 | 0 | 1 | 0 |
Total interest income | 140 | 106 | 379 | 306 |
Interest Expense | ||||
Deposits | 13 | 12 | 37 | 34 |
Short-term Federal Home Loan Bank advances and other | 11 | 1 | 23 | 4 |
Long-term Federal Home Loan Bank advances | 6 | 7 | 17 | 22 |
Other long-term debt | 7 | 6 | 19 | 10 |
Total interest expense | 37 | 26 | 96 | 70 |
Net interest income | 103 | 80 | 283 | 236 |
Provision (benefit) for loan losses | 2 | 7 | 4 | (9) |
Net interest income after provision (benefit) for loan losses | 101 | 73 | 279 | 245 |
Noninterest Income | ||||
Net gain on loan sales | 75 | 94 | 189 | 259 |
Loan fees and charges | 23 | 22 | 58 | 56 |
Deposit fees and charges | 5 | 5 | 14 | 17 |
Loan administration income | 5 | 4 | 16 | 14 |
Net return (loss) on mortgage servicing rights | 6 | (11) | 26 | (21) |
Representation and warranty benefit | 4 | 6 | 11 | 12 |
Other noninterest income | 12 | 36 | 32 | 52 |
Total noninterest income | 130 | 156 | 346 | 389 |
Noninterest Expense | ||||
Compensation and benefits | 76 | 69 | 219 | 203 |
Commissions | 23 | 16 | 49 | 40 |
Occupancy and equipment | 28 | 21 | 75 | 64 |
Loan processing expense | 15 | 13 | 41 | 40 |
Legal and professional expense | 7 | 5 | 22 | 20 |
Other noninterest expense | 22 | 18 | 59 | 51 |
Total noninterest expense | 171 | 142 | 465 | 418 |
Income before income taxes | 60 | 87 | 160 | 216 |
Provision for income taxes | 20 | 30 | 52 | 73 |
Net income | $ 40 | $ 57 | $ 108 | $ 143 |
Net income per share | ||||
Basic (in dollars per share) | $ 0.71 | $ 0.98 | $ 1.90 | $ 2.21 |
Diluted (in dollars per share) | $ 0.70 | $ 0.96 | $ 1.86 | $ 2.16 |
Weighted average shares outstanding | ||||
Basic (in shares) | 57,162,025 | 56,580,238 | 57,062,696 | 56,556,188 |
Diluted (in shares) | 58,186,593 | 57,933,806 | 58,133,296 | 57,727,262 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 40 | $ 57 | $ 108 | $ 143 |
Other comprehensive income (loss), net of tax | ||||
Investment securities | 1 | (4) | 3 | 12 |
Derivatives and hedging activities | 0 | 3 | (4) | (34) |
Other comprehensive income (loss), net of tax | 1 | (1) | (1) | (22) |
Comprehensive income | $ 41 | $ 56 | $ 107 | $ 121 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Preferred Stock | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) |
Beginning balance at Dec. 31, 2015 | $ 1,529 | $ 267 | $ 1 | $ 1,486 | $ 2 | $ (227) |
Beginning balance, shares at Dec. 31, 2015 | 266,657 | 56,483,258 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 143 | 143 | ||||
Total other comprehensive income (loss) | (22) | (22) | ||||
Preferred stock redemption, value | (267) | $ (267) | ||||
Preferred stock redemption, shares | (266,657) | |||||
Dividends on preferred stock | (105) | (105) | ||||
Stock-based compensation, value | 8 | 8 | ||||
Stock-based compensation, shares | 114,013 | |||||
Ending balance at Sep. 30, 2016 | 1,286 | $ 0 | $ 1 | 1,494 | (20) | (189) |
Ending balance, shares at Sep. 30, 2016 | 0 | 56,597,271 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 57 | |||||
Total other comprehensive income (loss) | (1) | |||||
Ending balance at Sep. 30, 2016 | 1,286 | $ 0 | $ 1 | 1,494 | (20) | (189) |
Ending balance, shares at Sep. 30, 2016 | 0 | 56,597,271 | ||||
Beginning balance at Dec. 31, 2016 | 1,336 | $ 0 | $ 1 | 1,503 | (7) | (161) |
Beginning balance, shares at Dec. 31, 2016 | 0 | 56,824,802 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 108 | 108 | ||||
Total other comprehensive income (loss) | (1) | (1) | ||||
Shares issued from Employee Stock Purchase Plan (shares) | 19,897 | |||||
Stock-based compensation, value | 4 | 4 | ||||
Stock-based compensation, shares | 182,524 | |||||
Warrant exercise | 4 | 4 | ||||
Warrant exercise, shares | 154,313 | |||||
Ending balance at Sep. 30, 2017 | 1,451 | $ 0 | $ 1 | 1,511 | (8) | (53) |
Ending balance, shares at Sep. 30, 2017 | 0 | 57,181,536 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 40 | |||||
Total other comprehensive income (loss) | 1 | |||||
Ending balance at Sep. 30, 2017 | $ 1,451 | $ 0 | $ 1 | $ 1,511 | $ (8) | $ (53) |
Ending balance, shares at Sep. 30, 2017 | 0 | 57,181,536 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities | ||
Net cash used in operating activities | $ (19,239,000,000) | $ (10,128,000,000) |
Investing Activities | ||
Proceeds from sale of AFS securities including loans that have been securitized | 17,949,000,000 | 10,876,000,000 |
Collection of principal on investment securities AFS | 158,000,000 | 116,000,000 |
Purchase of investment securities AFS and other | (593,000,000) | (203,000,000) |
Collection of principal on investment securities HTM | 116,000,000 | 126,000,000 |
Purchase of investment securities HTM and other | 0 | (15,000,000) |
Proceeds received from the sale of LHFI | 78,000,000 | 228,000,000 |
Net Origination, purchase, and principal repayments of LHFI | (1,231,000,000) | (1,297,000,000) |
Purchase of bank owned life insurance | (50,000,000) | (85,000,000) |
Net purchase of FHLB stock | (84,000,000) | (2,000,000) |
Acquisition of premises and equipment, net of proceeds | (74,000,000) | (44,000,000) |
Proceeds from the sale of MSRs | 252,000,000 | 35,000,000 |
Other, net | 4,000,000 | 14,000,000 |
Net cash provided by investing activities | 16,525,000,000 | 9,749,000,000 |
Financing Activities | ||
Net change in deposit accounts | 361,000,000 | 1,436,000,000 |
Net change in short term FHLB borrowings and other short term debt | 2,285,000,000 | (1,211,000,000) |
Proceeds from long term FHLB advances | 150,000,000 | 395,000,000 |
Repayment of long term FHLB advances | (50,000,000) | 0 |
Net receipt of payments of loans serviced for others | 24,000,000 | 91,000,000 |
Preferred stock dividends | 0 | (105,000,000) |
Redemption of preferred stock | 0 | (267,000,000) |
Net receipt of escrow payments | 19,000,000 | 6,000,000 |
Net cash provided by financing activities | 2,789,000,000 | 345,000,000 |
Net increase (decrease) in cash and cash equivalents | 75,000,000 | (34,000,000) |
Beginning cash and cash equivalents | 158,000,000 | 208,000,000 |
Ending cash and cash equivalents | 233,000,000 | 174,000,000 |
Supplemental disclosure of cash flow information | ||
Non-cash reclassification of loans originated LHFI to LHFS | 106,000,000 | 1,331,000,000 |
Non-cash reclassification of LHFS to AFS securities | 17,657,000,000 | 10,588,000,000 |
MSRs resulting from sale or securitization of loans | 178,000,000 | 173,000,000 |
Operating section supplemental disclosures | ||
Cash proceeds from sales of LHFS | 5,547,000,000 | 14,097,000,000 |
Origination, premium paid and purchase of LHFS, net of principal repayments | $ (24,518,000,000) | $ (23,826,000,000) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements of Flagstar Bancorp, Inc. ("Flagstar," or the "Company"), including its wholly owned principal subsidiary, Flagstar Bank, FSB (the "Bank"), have been prepared using U.S. GAAP for interim financial statements. Where we say "we," "us," "our," the "Company," "Bancorp" or "Flagstar," we usually mean Flagstar Bancorp, Inc. However, in some cases, a reference to "we," "us," "our," the "Company" or "Flagstar" will include the Bank. These consolidated financial statements do not include all of the information and footnotes required by GAAP for a full year presentation and certain disclosures have been condensed or omitted in accordance with rules and regulations of the SEC. These interim financial statements are unaudited and include, in our opinion, all adjustments necessary for a fair statement of the results for the periods indicated, which are not necessarily indicative of results which may be expected for the full year. These consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 , which is available on our website, at flagstar.com, and on the SEC website, at sec.gov. Certain prior period amounts have been reclassified to conform to the current period presentation. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The following table presents our investment securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Dollars in millions) September 30, 2017 Available-for-sale securities Agency - Commercial $ 755 $ 1 $ (6 ) $ 750 Agency - Residential 818 2 (11 ) 809 Municipal obligations 44 — — 44 Corporate debt obligations 33 1 — 34 Total available-for-sale securities (1) $ 1,650 $ 4 $ (17 ) $ 1,637 Held-to-maturity securities Agency - Commercial $ 542 $ 1 $ (5 ) $ 538 Agency - Residential 435 — (2 ) 433 Total held-to-maturity securities (1) $ 977 $ 1 $ (7 ) $ 971 December 31, 2016 Available-for-sale securities Agency - Commercial $ 551 $ 2 $ (5 ) $ 548 Agency - Residential 913 1 (16 ) 898 Municipal obligations 34 — — 34 Total available-for-sale securities (1) $ 1,498 $ 3 $ (21 ) $ 1,480 Held-to-maturity securities Agency - Commercial $ 595 $ — $ (6 ) $ 589 Agency - Residential 498 1 (4 ) 495 Total held-to-maturity securities (1) $ 1,093 $ 1 $ (10 ) $ 1,084 (1) There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10 percent of stockholders’ equity at September 30, 2017 or December 31, 2016 . We evaluate AFS and HTM investment securities for other than temporary impairment on a quarterly basis. An OTTI is considered to have occurred when the fair value of a debt security is below its amortized costs and we (1) have the intent to sell the security, (2) will more likely than not be required to sell the security before recovery of its amortized cost, or (3) do not expect to recover the entire amortized cost basis of the security. Investments that have an OTTI are written down through a charge to earnings for the amount representing the credit loss on the security. Gains and losses related to all other factors are recognized in other comprehensive income (loss). During the three and nine months ended September 30, 2017 and September 30, 2016 , we had no OTTI losses. Available-for-sale securities Securities available-for-sale are carried at fair value, with unrealized gains and losses, to the extent they are temporary in nature, and are reported as a component of other comprehensive income. We purchased $300 million and $600 million of AFS securities, which included U.S. government sponsored agency MBS, corporate debt obligations, and municipal obligations, during the three and nine months ended September 30, 2017 , respectively. We purchased $136 million and $203 million of AFS securities, which included U.S. government sponsored agencies comprised of MBS and municipal obligations, during the three and nine months ended September 30, 2016 , respectively. Gains on sales of AFS securities are reported in other noninterest income in the Consolidated Statements of Operations. We sold $227 million and $289 million of AFS securities during the three and nine months ended September 30, 2017 , respectively, which did not include those AFS securities related to mortgage loans that had been securitized for sale in the normal course of business. These sales resulted in a realized gain of $2 million and $3 million during the three and nine months ended September 30, 2017 , respectively. During the three and nine months ended September 30, 2016 , there were $115 million and $290 million , respectively, in sales of AFS securities, which did not include those related to mortgage loans that had been securitized for sale in the normal course of business. These sales resulted in a realized gain of $3 million and $4 million during the three and nine months ended September 30, 2016 , respectively. Held-to-maturity securities Investment securities HTM are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the interest method. Unrealized losses are not recorded to the extent they are temporary in nature. There were no purchases of HTM securities during the three and nine months ended September 30, 2017 . During the three and nine months ended September 30, 2016 , we purchased zero and $15 million of HTM securities, respectively. There were no sales of HTM securities during the three and nine months ended September 30, 2017 and September 30, 2016 . The following table summarizes, by duration, the unrealized loss positions on investment securities: Unrealized Loss Position with Duration 12 Months and Over Unrealized Loss Position with Duration Under 12 Months Fair Value Number of Securities Unrealized Loss Fair Value Number of Securities Unrealized Loss (Dollars in millions) September 30, 2017 Available-for-sale securities Agency - Commercial $ 34 3 $ (1 ) $ 582 40 $ (5 ) Agency - Residential 98 10 (3 ) 501 40 (8 ) Municipal obligations 1 1 — 21 8 — Corporate debt obligations — — — 3 1 — Held-to-maturity securities Agency - Commercial $ 16 2 $ — $ 395 26 $ (5 ) Agency - Residential 16 2 — 319 40 (2 ) December 31, 2016 Available-for-sale securities Agency - Commercial $ 6 1 $ — $ 345 29 $ (5 ) Agency - Residential — — — 748 55 (16 ) Municipal obligations — — — 17 8 — Held-to-maturity securities Agency - Commercial $ — — $ — $ 528 34 $ (6 ) Agency - Residential — — — 385 43 (4 ) The following table presents amortized cost and estimated fair value of securities by contractual maturity: Investment Securities Available-for-Sale Investment Securities Held-to-maturity Amortized Cost Fair Value Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in millions) September 30, 2017 Due after one year through five years $ 17 $ 17 3.37 % $ — $ — — % Due after five years through 10 years 44 45 4.83 % 61 61 2.50 % Due after 10 years 1,589 1,575 2.34 % 916 910 2.43 % Total $ 1,650 $ 1,637 $ 977 $ 971 We pledge investment securities, primarily agency collateralized and municipal taxable mortgage obligations, to collateralize lines of credit and/or borrowings. At September 30, 2017 , we had pledged investment securities of $1.3 billion compared to $879 million at December 31, 2016 . |
Loans Held-for-Sale
Loans Held-for-Sale | 9 Months Ended |
Sep. 30, 2017 | |
Receivables Held-for-sale [Abstract] | |
Loans Held-for-Sale | Loans Held-for-Sale The majority of our mortgage loans originated as LHFS are sold into the secondary market by securitizing the loans into agency mortgage backed securities, through retail mortgage-backed securitizations or on a whole loan basis. At September 30, 2017 and December 31, 2016 , LHFS totaled $4.9 billion and $3.2 billion , respectively. For the three and nine months ended September 30, 2017 , we had net gains on loan sales associated with LHFS of $75 million and $189 million , respectively. During the three and nine months ended September 30, 2016 , excluding the gains from the sale of mortgage loans transferred from loans held-for-investment, we had $94 million and $244 million , respectively, of net gains on loan sales associated with LHFS. At both September 30, 2017 and December 31, 2016 , $32 million of LHFS were recorded at lower of cost or fair value. The remainder of the loans in the portfolio are recorded at fair value as we have elected the fair value option for such loans. |
Loans Held-for-Investment
Loans Held-for-Investment | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment The following table presents our loans held-for-investment: September 30, 2017 December 31, 2016 (Dollars in millions) Consumer loans Residential first mortgage $ 2,665 $ 2,327 Home equity 496 443 Other 26 28 Total consumer loans 3,187 2,798 Commercial loans Commercial real estate (1) 1,760 1,261 Commercial and industrial 1,097 769 Warehouse lending 1,159 1,237 Total commercial loans 4,016 3,267 Total loans held-for-investment $ 7,203 $ 6,065 (1) Includes $270 million and $245 million of owner occupied commercial real estate loans at September 30, 2017 and December 31, 2016 , respectively. During the nine months ended September 30, 2017 , we sold performing and nonperforming consumer loans with UPB of $103 million , of which $25 million were nonperforming. Upon a change in our intent, the loans were transferred to LHFS and subsequently sold resulting in a gain of $1 million during the nine months ended September 30, 2017 , which is recorded in net gain on loan sales on the Consolidated Statements of Operations. During the nine months ended September 30, 2016 , we sold performing and nonperforming consumer loans with UPB totaling $1.3 billion , of which $110 million were nonperforming. Upon a change in our intent, the loans were transferred to LHFS and subsequently sold resulting in a net gain on sale of $12 million , during the nine months ended September 30, 2016 , which is recorded in net gain on loan sales on the Consolidated Statements of Operations. During the nine months ended September 30, 2017 , we purchased residential first mortgage loans with a UPB of $6 million and HELOC loans with a UPB of $100 million . A premium of $4 million was associated with these loan purchases. During the nine months ended September 30, 2016 , we purchased jumbo residential first mortgage loans with a UPB of $150 million and a premium of $1 million . We have pledged certain LHFI, LHFS, and loans with government guarantees to collateralize lines of credit and/or borrowings with the FHLB of Indianapolis and the FRB of Chicago. At September 30, 2017 and December 31, 2016 , we had pledged loans of $7.7 billion and $5.3 billion , respectively. Allowance for Loan Losses We determine the estimate of the ALLL on at least a quarterly basis. Refer to Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies to the consolidated financial statements in the Annual Report on Form 10-K for the year ended December 31, 2016 for a description of the methodology. The ALLL, other than for loans that have been identified for individual evaluation for impairment, is determined on a loan pool basis by grouping loan types with common risk characteristics to determine our best estimate of incurred losses. The following table presents changes in ALLL, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) Three Months Ended September 30, 2017 Beginning balance ALLL $ 56 $ 19 $ 1 $ 37 $ 21 $ 6 $ 140 Charge-offs (2) (1 ) (2 ) — — — — (3 ) Recoveries — 1 — — — — 1 Provision (benefit) (3 ) 2 — 5 (2 ) — 2 Ending balance ALLL $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 Three Months Ended September 30, 2016 Beginning balance ALLL $ 81 $ 30 $ 1 $ 19 $ 11 $ 8 $ 150 Charge-offs (2) (7 ) (1 ) (1 ) — — — (9 ) Recoveries — 1 1 — — — 2 Provision (benefit)(3) (4 ) (5 ) — 6 3 — — Ending balance ALLL $ 70 $ 25 $ 1 $ 25 $ 14 $ 8 $ 143 Nine Months Ended September 30, 2017 Beginning balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Charge-offs (2) (6 ) (3 ) (1 ) — — — (10 ) Recoveries 1 2 1 — — — 4 Provision (benefit) (8 ) (3 ) — 14 2 (1 ) 4 Ending balance ALLL $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 Nine Months Ended September 30, 2016 Beginning balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 Charge-offs (2) (26 ) (4 ) (3 ) — — — (33 ) Recoveries 1 2 2 — — — 5 Provision (benefit)(3) (21 ) (5 ) — 7 1 2 (16 ) Ending balance ALLL $ 70 $ 25 $ 1 $ 25 $ 14 $ 8 $ 143 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of zero related to the transfer and subsequent sale of loans during the three months ended September 30, 2017 and September 30, 2016 , respectively, and $1 million and $8 million during the nine months ended September 30, 2017 and September 30, 2016 , respectively. Also includes charge-offs related to loans with government guarantees of $1 million and $6 million during the three months ended September 30, 2017 and September 30, 2016 , respectively, and $3 million and $13 million during the nine months ended September 30, 2017 and September 30, 2016 , respectively. (3) Does not include $7 million provision for loan losses recorded in the Consolidated Statements of Operations to reserve for repossessed loans with government guarantees during the three and nine months ended September 30, 2016 . The following table sets forth the method of evaluation, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) September 30, 2017 Loans held-for-investment (2) Individually evaluated $ 35 $ 29 $ — $ 1 $ — $ — $ 65 Collectively evaluated 2,621 463 26 1,759 1,097 1,159 7,125 Total loans $ 2,656 $ 492 $ 26 $ 1,760 $ 1,097 $ 1,159 $ 7,190 Allowance for loan losses (2) Individually evaluated $ 6 $ 9 $ — $ — $ — $ — $ 15 Collectively evaluated 46 11 1 42 19 6 125 Total allowance for loan losses $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 December 31, 2016 Loans held-for-investment (2) Individually evaluated $ 46 $ 29 $ — $ — $ — $ — $ 75 Collectively evaluated 2,274 349 28 1,261 769 1,237 5,918 Total loans $ 2,320 $ 378 $ 28 $ 1,261 $ 769 $ 1,237 $ 5,993 Allowance for loan losses (2) Individually evaluated $ 5 $ 8 $ — $ — $ — $ — $ 13 Collectively evaluated 60 16 1 28 17 7 129 Total allowance for loan losses $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 (1) Includes allowance related to loans with government guarantees. (2) Excludes loans carried under the fair value option. Loans are considered to be past due when any payment of principal or interest is 30 days past the scheduled payment date. While it is the goal of management to collect on loans, we attempt to work out a satisfactory repayment schedule or modification with past due borrowers and will undertake foreclosure proceedings if the delinquency is not satisfactorily resolved. Our practices regarding past due loans are designed to both assist borrowers in meeting their contractual obligations and minimize losses incurred by the Bank. We cease the accrual of interest on all classes of consumer and commercial loans upon the earlier of, becoming 90 days past due, or when doubt exists as to the ultimate collection of principal or interest (classified as nonaccrual or nonperforming loans). When a loan is placed on nonaccrual status, the accrued interest income is reversed and the loan may only return to accrual status when principal and interest become current and are anticipated to be fully collectible. Interest income is recognized on nonaccrual loans using a cash basis method. Interest that would have been accrued on impaired loans totaled zero and $1 million during the three and nine months ended September 30, 2017 , respectively, and $1 million and $2 million during the three and nine months ended September 30, 2016 , respectively. At September 30, 2017 and December 31, 2016 , we had no loans 90 days past due and still accruing interest. The following table sets forth the LHFI aging analysis of past due and current loans: 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due (1) Total Past Due Current Total LHFI (Dollars in millions) September 30, 2017 Consumer loans Residential first mortgage $ 3 $ 1 $ 24 $ 28 $ 2,637 $ 2,665 Home equity 1 — 6 7 489 496 Other — — — — 26 26 Total consumer loans 4 1 30 35 3,152 3,187 Commercial loans Commercial real estate — — 1 1 1,759 1,760 Commercial and industrial — — — — 1,097 1,097 Warehouse lending — — — — 1,159 1,159 Total commercial loans — — 1 1 4,015 4,016 Total loans (2) $ 4 $ 1 $ 31 $ 36 $ 7,167 $ 7,203 December 31, 2016 Consumer loans Residential first mortgage $ 6 $ — $ 29 $ 35 $ 2,292 $ 2,327 Home equity 1 2 11 14 429 443 Other 1 — — 1 27 28 Total consumer loans 8 2 40 50 2,748 2,798 Commercial loans Commercial real estate — — — — 1,261 1,261 Commercial and industrial — — — — 769 769 Warehouse lending — — — — 1,237 1,237 Total commercial loans — — — — 3,267 3,267 Total loans (2) $ 8 $ 2 $ 40 $ 50 $ 6,015 $ 6,065 (1) Includes less than 90 day past due performing loans which are deemed nonaccrual. Interest is not being accrued on these loans. (2) Includes $4 million and $13 million of loans 90 days or greater past due, accounted for under the fair value option at September 30, 2017 and December 31, 2016 , respectively. Troubled Debt Restructurings We may modify certain loans in both our consumer and commercial loan portfolios to retain customers or to maximize collection of the outstanding loan balance. We have programs designed to assist borrowers by extending payment dates or reducing the borrower's contractual payments. All loan modifications are made on a case-by-case basis. Our standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analysis, and collateral valuations. TDRs result in those instances in which a borrower demonstrates financial difficulty and for which a concession has been granted, which includes reductions of interest rate, extensions of amortization period, principal and/or interest forgiveness and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. These loans are classified as nonperforming TDRs if the loan was nonperforming prior to the restructuring, or based upon the results of a contemporaneous credit evaluation. Such loans will continue on nonaccrual status until the borrower has established a willingness and ability to make the restructured payments for at least six months, after which they will be classified as performing TDRs and begin to accrue interest. Performing and nonperforming TDRs remain impaired as interest and principal will not be received in accordance with the original contractual terms of the loan agreement. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, but may give rise to potential incremental losses. We measure impairments using a discounted cash flow method for performing TDRs and measure impairment based on collateral values for nonperforming TDRs. The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) September 30, 2017 Consumer loans (1) Residential first mortgage $ 20 $ 11 $ 31 Home equity 26 4 30 Total TDRs (2) $ 46 $ 15 $ 61 December 31, 2016 Consumer loans (1) Residential first mortgage $ 22 $ 11 $ 33 Home equity 45 7 52 Total TDRs (2) $ 67 $ 18 $ 85 (1) The ALLL on consumer TDR loans totaled $12 million and $9 million at September 30, 2017 and December 31, 2016 , respectively. (2) Includes $3 million and $25 million of TDR loans accounted for under the fair value option at September 30, 2017 and December 31, 2016 , respectively. The following table provides a summary of newly modified TDRs: New TDRs Number of Accounts Pre-Modification Unpaid Principal Balance Post-Modification Unpaid Principal Balance (1) Increase in Allowance at Modification (Dollars in millions) Three Months Ended September 30, 2017 Residential first mortgages 9 $ 3 $ 3 $ — Home equity (2) 37 2 2 1 Other consumer — — — — Total TDR loans 46 $ 5 $ 5 $ 1 Three Months Ended September 30, 2016 Residential first mortgages 1 $ — $ — $ — Home equity (2)(3) 17 1 1 — Total TDR loans 18 $ 1 $ 1 $ — Nine Months Ended September 30, 2017 Residential first mortgages 17 $ 4 $ 4 $ — Home equity (2) 71 5 5 2 Other consumer 1 — — — Total TDR loans 89 $ 9 $ 9 $ 2 Nine Months Ended September 30, 2016 Residential first mortgages 17 $ 3 $ 4 $ — Home equity (2)(3) 128 8 7 — Commercial and industrial 1 2 1 — Total TDR loans 146 $ 13 $ 12 $ — (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification unpaid principal balance reflects write downs. (3) Includes loans carried at the fair value option. There was one residential first mortgage loan with a UPB of less than $1 million that was modified in the previous 12 months, which has subsequently defaulted during the three and nine months ended September 30, 2017 as compared to three home equity loans with a UPB of less than $1 million for each class which subsequently defaulted during the three months ended September 30, 2016 and one residential first mortgage loan and seven home equity loans with a UPB of less than $1 million for each class which subsequently defaulted during the nine months ended September 30, 2016 . There was no increase or decrease in the allowance associated with these TDRs at subsequent default. All TDR classes within the consumer and commercial portfolios are considered subsequently defaulted when greater than 90 days past due. Subsequent default is defined as a payment re-defaulted within 12 months of the restructuring date. Impaired Loans The following table presents individually evaluated impaired loans and the associated allowance: September 30, 2017 December 31, 2016 Recorded Investment Net Unpaid Principal Balance Related Allowance Recorded Investment Net Unpaid Principal Balance Related Allowance (Dollars in millions) With no related allowance recorded Consumer loans Residential first mortgage $ 15 $ 15 $ — $ 6 $ 6 $ — Total consumer loans with no related allowance recorded $ 15 $ 15 $ — $ 6 $ 6 $ — With an allowance recorded Consumer loans Residential first mortgage $ 20 $ 20 $ 6 $ 40 $ 40 $ 5 Home equity 28 29 9 29 29 8 Commercial loans Commercial real estate 1 1 — — — — Total consumer loans with an allowance recorded $ 49 $ 50 $ 15 $ 69 $ 69 $ 13 Total Impaired loans Residential first mortgage $ 35 $ 35 $ 6 $ 46 $ 46 $ 5 Home equity 28 29 9 29 29 8 Commercial real estate 1 1 — — — — Total impaired loans $ 64 $ 65 $ 15 $ 75 $ 75 $ 13 The following table presents average impaired loans and the interest income recognized: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (Dollars in millions) Consumer loans Residential first mortgage $ 37 $ 1 $ 43 $ — $ 39 $ 1 $ 55 $ 1 Home equity 28 — 30 — 28 1 31 1 Commercial loans Commercial real estate 1 — — — — — — — Commercial and industrial — — 1 — — — 2 — Total impaired loans $ 66 $ 1 $ 74 $ — $ 67 $ 2 $ 88 $ 2 Credit Quality We utilize an internal risk rating system which is applied to all consumer and commercial loans. Descriptions of our internal risk ratings as they relate to credit quality follow the ratings used by the U.S. bank regulatory agencies as listed below. Pass. Pass assets are not impaired nor do they have any known deficiencies that could impact the quality of the asset. Watch. Watch assets are defined as pass rated assets that exhibit elevated risk characteristics or other factors that deserve management’s close attention and increased monitoring. However, the asset does not exhibit a potential or well-defined weakness that would warrant a downgrade to criticized or adverse classification. Special mention. Assets identified as special mention possess credit deficiencies or potential weaknesses deserving management's close attention. Special mention assets have a potential weakness or pose an unwarranted financial risk that, if not corrected, could weaken the assets and increase risk in the future. Special mention assets are criticized, but do not expose an institution to sufficient risk to warrant adverse classification. Substandard . Assets identified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the full collection or liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. For home equity loans and other consumer loans, we evaluate credit quality based on the aging and status of payment activity and any other known credit characteristics that call into question full repayment of the asset. Nonperforming loans are classified as either substandard, doubtful or loss. Doubtful . An asset classified as doubtful has all the weaknesses inherent in one classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. A doubtful asset has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral, and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Because of high probability of loss, non-accrual accounting treatment is required for doubtful assets. Loss. An asset classified as loss is considered uncollectible and of such little value that the continuance as a bankable asset is not warranted. This classification does not mean that an asset has absolutely no recovery or salvage value, but, rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. Commercial Loans Management conducts periodic examinations which serve as an independent verification of the accuracy of the ratings assigned. Loan grades are based on different factors within the borrowing relationship: entity sales, debt service coverage, debt/total net worth, liquidity, balance sheet and income statement trends, management experience, business stability, financing structure, and financial reporting requirements. The underlying collateral is also rated based on the specific type of collateral and corresponding LTV. The combination of the borrower and collateral risk ratings results in the final rating for the borrowing relationship. Consumer Loans The same rating principles are used for consumer and commercial loans, but the principles are applied differently for consumer loans. Consumer loans consist of open and closed end loans extended to individuals for household, family, and other personal expenditures, and includes consumer loans, and loans to individuals secured by their personal residence, including first mortgage, home equity, and home improvement loans. Because consumer loans are usually relatively small-balance, homogeneous exposures, consumer loans are rated primarily on payment performance. Payment performance is a proxy for the strength of repayment capacity and loans are generally classified based on their payment status rather than by an individual review of each loan. In accordance with regulatory guidance, we assign risk ratings to consumer loans in the following manner: • Consumer loans are classified as Watch once the loan becomes 60 days past due. • Open and closed-end consumer loans 90 days or more past due are classified Substandard. September 30, 2017 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,614 $ 24 $ — $ 27 $ 2,665 Home equity 465 26 — 5 496 Other Consumer 26 — — — 26 Total Consumer Loans $ 3,105 $ 50 $ — $ 32 $ 3,187 Commercial Loans Commercial Real Estate $ 1,727 $ 30 $ — $ 3 $ 1,760 Commercial and Industrial 1,003 82 — 12 1,097 Warehouse 1,119 40 — — 1,159 Total Commercial Loans $ 3,849 $ 152 $ — $ 15 $ 4,016 December 31, 2016 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,273 $ 23 $ — $ 31 $ 2,327 Home equity 386 46 — 11 443 Other Consumer 28 — — — 28 Total Consumer Loans $ 2,687 $ 69 $ — $ 42 $ 2,798 Commercial Loans Commercial Real Estate $ 1,225 $ 27 $ 3 $ 6 $ 1,261 Commercial and Industrial 678 59 21 11 769 Warehouse 1,168 16 53 — 1,237 Total Commercial Loans $ 3,071 $ 102 $ 77 $ 17 $ 3,267 |
Loans with Government Guarantee
Loans with Government Guarantees | 9 Months Ended |
Sep. 30, 2017 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans with Government Guarantees | Loans with Government Guarantees Substantially all loans with government guarantees are insured or guaranteed by the FHA or the U.S. Department of Veterans Affairs. FHA loans earn interest at a rate based upon the 10 -year U.S. Treasury note rate at the time the underlying loan becomes delinquent, which is not paid by the FHA until claimed. Certain loans within our portfolio may be subject to indemnifications and insurance limits which expose us to limited credit risk. We have reserved for these risks within other assets and as a component of our ALLL on residential first mortgages. At September 30, 2017 and December 31, 2016 , respectively, loans with government guarantees totaled $253 million and $365 million . At September 30, 2017 and December 31, 2016 , respectively, repossessed assets and the associated claims recorded in other assets totaled $92 million and $135 million . |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Transfer of Securitizations or Asset-backed Financing Financial Assets Accounted for as Sale [Abstract] | |
Variable Interest Entities | Variable Interest Entities We have no consolidated VIEs as of September 30, 2017 and December 31, 2016 . We have a continuing involvement, but are not the primary beneficiary for one unconsolidated VIE related to the FSTAR 2007-1 mortgage securitization trust. In accordance with the settlement agreement with MBIA, there is no further recourse to us related to FSTAR 2007-1, unless MBIA fails to meet their obligations. At September 30, 2017 and December 31, 2016 , the FSTAR 2007-1 mortgage securitization trust included 2,035 loans and 2,453 loans, respectively, with an aggregate principal balance of $70 million and $89 million , respectively. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 9 Months Ended |
Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights | Mortgage Servicing Rights We have investments in MSRs that result from the sale of loans to the secondary market for which we retain the servicing. The primary risk associated with MSRs is the potential reduction in fair value as a result of higher than anticipated prepayments due to loan refinancing prompted, in part, by declining interest rates or government intervention. Conversely, these assets generally increase in value in a rising interest rate environment to the extent that prepayments are slower than previously anticipated. We utilize derivatives as economic hedges to offset changes in the fair value of the MSRs resulting from the actual or anticipated changes in prepayments stemming from changing interest rate environments. There is also a risk of valuation decline due to higher than expected increases in default rates, which we do not believe can be effectively managed using derivatives. For further information, See Note 8 - Derivative Financial Instruments, regarding the derivative instruments utilized to manage our MSR risks. The following table presents changes in the carrying value of residential first mortgage MSRs, accounted for at fair value: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Balance at beginning of period $ 184 $ 301 $ 335 $ 296 Additions from loans sold with servicing retained 75 51 178 173 Reductions from sales (4 ) (17 ) (260 ) (41 ) Changes in fair value due to (1) Decrease in MSR due to payoffs, pay-downs and run-off (5 ) (19 ) (15 ) (45 ) Changes in estimates of fair value (2) (4 ) (14 ) 8 (81 ) Balance at end of period $ 246 $ 302 $ 246 $ 302 (1) Changes in fair value are included within net return (loss) on MSRs on the Consolidated Statements of Operations. (2) Represents estimated MSR value change resulting primarily from market-driven changes. The following table summarizes the hypothetical effect on the fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets. The significant assumptions used in the fair value measurement of the MSRs are option adjusted spread and prepayment rate. Significant increases (decreases) in both of these assumptions in isolation would result in a significantly lower (higher) fair value measurement. September 30, 2017 December 31, 2016 Fair value after Fair value after Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.81 % $ 242 $ 238 7.78 % $ 326 $ 318 Constant prepayment rate 9.64 % 238 231 16.68 % 322 311 Weighted average annual cost to service per loan $ 71.00 244 241 $ 68.18 330 326 The sensitivity calculations above are hypothetical and should not be considered to be predictive of future performance. Changes in fair value based on adverse changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. To isolate the effect of the specified change, the fair value shock analysis is consistent with the identified adverse change, while holding all other assumptions constant. In practice, a change in one assumption generally impacts other assumptions, which may either magnify or counteract the effect of the change. For further fair value disclosures relating to MSRs, see Note 18 - Fair Value Measurements. Contractual servicing and subservicing fees . Contractual servicing and subservicing fees, including late fees and other ancillary income are presented below. Contractual servicing fees are included within net (loss) return on MSRs on the Consolidated Statements of Operations. Contractual subservicing fees including late fees and other ancillary income are included within loan administration income on the Consolidated Statements of Operations. Subservicing fee income is recorded for fees earned, net of third party subservicing costs, for loans subserviced. The following table summarizes income and fees associated with contractual servicing rights: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 14 $ 22 $ 43 $ 60 Changes in fair value (9 ) (33 ) (7 ) (126 ) Net return (loss) on MSR derivatives (2) — (1 ) (3 ) 44 Net transaction costs 1 1 (7 ) 1 Total net return (loss) on mortgage servicing rights $ 6 $ (11 ) $ 26 $ (21 ) (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Changes in the derivatives utilized as economic hedges to offset changes in fair value of the MSRs. The following table summarizes income and fees associated with our mortgage loans subserviced: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 9 $ 7 $ 26 $ 21 Other servicing charges (4 ) (3 ) (10 ) (7 ) Total income on mortgage loans subserviced, included in loan administration $ 5 $ 4 $ 16 $ 14 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on cash basis. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Derivative financial instruments are recorded at fair value in other assets and other liabilities on the Consolidated Statements of Financial Condition. The Company's policy is to present its derivative assets and derivative liabilities on the Consolidated Statement of Financial Condition on a gross basis, even when provisions allowing for set-off are in place. However, for derivative contracts cleared through certain central clearing parties, variation margin payments are recognized as settlements. We are exposed to non-performance risk by the counterparties to our various derivative financial instruments. A majority of our derivatives are centrally cleared through a Central Counterparty Clearing House or consist of residential mortgage interest rate lock commitments further limiting our exposure to non-performance risk. We believe that the non-performance risk inherent in our remaining derivative contracts is minimal based on credit standards and the collateral provisions of the derivative agreements. Derivatives not designated as hedging instruments: We maintain a derivative portfolio of interest rate swaps, futures and forward commitments used to manage exposure to changes in interest rates, MSR asset values and to meet the needs of customers. We also enter into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Market risk on interest rate lock commitments and mortgage LHFS is managed using corresponding forward sale commitments. Changes in fair value of derivatives not designated as hedging instruments are recognized in the Consolidated Statements of Income. Derivatives designated as hedging instruments: We have designated certain interest rate swaps as cash flow hedges of certain interest rate payments of our variable-rate FHLB advances. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) on the Consolidated Statement of Financial Condition and reclassified into interest expense in the same period in which the hedge transaction is recognized in earnings. At September 30, 2017 , we had $3 million (net-of-tax) of unrealized losses on derivatives designated as cash flow hedges recorded in accumulated other comprehensive income (loss), compared to $1 million of unrealized gains at December 31, 2016 . The estimated amount to be reclassified from other comprehensive income into earnings during the next 12 months represents $3 million of losses (net-of-tax). Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and throughout the hedge period. All hedge relationships were and are expected to be highly effective as of September 30, 2017 . Cash flows and the profit impact associated with designated hedges are reported in the same line item as the underlying hedged item. The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: September 30, 2017 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances $ 830 $ 1 2023-2026 Derivatives not designated as hedging instruments: Assets Futures $ 1,091 $ — 2017-2022 Mortgage backed securities forwards 4,740 12 2017 Rate lock commitments 4,478 33 2017 Interest rate swaps and swaptions 1,331 14 2017-2047 Total derivative assets $ 11,640 $ 59 Liabilities Futures $ 671 $ 3 2017-2022 Mortgage backed securities forwards 2,089 4 2017 Rate lock commitments 326 1 2017 Interest rate swaps 920 2 2017-2032 Total derivative liabilities $ 4,006 $ 10 December 31, 2016 Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances $ 600 $ 20 2023-2026 Liabilities Interest rate swaps on FHLB advances $ 230 $ 1 2025-2026 Derivatives not designated as hedging instruments: Assets Futures $ 4,621 $ 2 2017-2020 Mortgage backed securities forwards 3,776 43 2017 Rate lock commitments 3,517 24 2017 Interest rate swaps and swaptions 2,231 35 2017-2033 Total derivative assets $ 14,145 $ 104 Liabilities Futures $ 134 $ — 2017 Mortgage backed securities forwards 1,893 11 2017 Rate lock commitments 598 6 2017 Interest rate swaps 1,129 37 2017-2047 Total derivative liabilities $ 3,754 $ 54 (1) At September 30, 2017 , variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day’s fair value of open positions is considered settlement of the derivative position for accounting purposes. At December 31, 2016 , variation margin was not recognized as settlement. (2) Derivative assets and liabilities are included in other assets and other liabilities on the Consolidated Statements of Financial Condition, respectively. The following tables present the derivatives subject to a master netting arrangement, including the cash pledged as collateral: Gross Amounts Netted in the Statement of Financial Position Net Amount Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amount Financial Instruments Cash Collateral (Dollars in millions) September 30, 2017 Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances (1) $ 1 $ — $ 1 $ — $ 23 Derivatives not designated as hedging instruments: Assets Mortgage backed securities forwards $ 12 $ — $ 12 $ — $ 2 Interest rate swaps and swaptions (1) 14 — 14 — 11 Total derivative assets $ 26 $ — $ 26 $ — $ 13 Liabilities Futures $ 3 $ — $ 3 $ — $ 4 Mortgage backed securities forwards 4 — 4 — 10 Interest rate swaps (1) 2 — 2 — 9 Total derivative liabilities $ 9 $ — $ 9 $ — $ 23 December 31, 2016 Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances (1) $ 20 $ 1 $ 19 $ — $ — Liabilities Interest rate swaps on FHLB advances (1) $ 1 $ 1 $ — $ — $ 33 Derivatives not designated as hedging instruments: Assets Futures $ 2 $ — $ 2 $ — $ — Mortgage-backed securities forwards 43 — 43 — 44 Interest rate swaps and swaptions (1) 35 — 35 — 30 Total derivative assets $ 80 $ — $ 80 $ — $ 74 Liabilities Futures $ — $ — $ — $ — $ 1 Mortgage-backed securities forwards 11 — 11 — — Interest rate swaps (1) 37 — 37 — 20 Total derivative liabilities $ 48 $ — $ 48 $ — $ 21 (1) At September 30, 2017 , variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day’s fair value of open positions is considered settlement of the derivative position for accounting purposes. At December 31, 2016 , variation margin was not recognized as settlement and we had an additional $15 million in variation margin in excess of the amounts disclosed above. We pledged a total of $23 million of cash collateral on derivative liabilities and $23 million of maintenance margin on derivative assets to counterparties and had an obligation to return cash of $13 million on derivative assets at September 30, 2017 . We pledged a total of $54 million of cash collateral to counterparties and had an obligation to return cash of $74 million at December 31, 2016 for derivative activities. The net cash pledged is included in other assets on the Consolidated Statements of Financial Condition. The following table presents net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain/(Loss) Futures Net return (loss) on mortgage servicing rights $ (1 ) $ 4 $ (1 ) $ 8 Interest rate swaps and swaptions Net return (loss) on mortgage servicing rights (2 ) (7 ) (7 ) 21 Mortgage-backed securities forwards Net return (loss) on mortgage servicing rights 2 2 5 15 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (8 ) 15 (16 ) 14 Rate lock commitments Other noninterest income — — — 1 Interest rate swaps (1) Other noninterest income — 2 1 3 Total derivative gain (loss) $ (9 ) $ 16 $ (18 ) $ 62 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings
Borrowings | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Home Loan Bank Advances The following table presents a breakdown of our FHLB advances outstanding: September 30, 2017 December 31, 2016 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 4,065 1.14 % $ 1,780 0.62 % Total Short-term Federal Home Loan Bank advances 4,065 1,780 Long-term LIBOR adjustable advances 1,025 1.49 % 1,025 1.12 % Long-term fixed rate advances (1) 275 1.41 % 175 1.12 % Total Long-term Federal Home Loan Bank advances 1,300 1,200 Total Federal Home Loan Bank advances $ 5,365 $ 2,980 (1) Includes the current portion of fixed rate advances of $125 million and $50 million at September 30, 2017 and December 31, 2016 , respectively. We are required to maintain a minimum amount of qualifying collateral. In the event of default, the FHLB advance is similar to a secured borrowing, whereby the FHLB has the right to sell the pledged collateral to settle the fair value of the outstanding advances. At September 30, 2017 , we had the authority and approval from the FHLB to utilize a line of credit of up to $7.0 billion and we may access that line to the extent that collateral is provided. At September 30, 2017 , we had $5.4 billion of advances outstanding and an additional $1.1 billion of collateralized borrowing capacity available at the FHLB. The advances can be collateralized by non-delinquent single-family residential first mortgage loans, loans with government guarantees, certain other loans and investment securities. At September 30, 2017 , $1.0 billion of the outstanding advances were long-term adjustable rate, with interest rates that reset every three months and are based on the three -month LIBOR index. The advances may be prepaid without penalty, with notification at scheduled three month intervals after an initial 12 month lockout period which is based on the settlement date of each advance. The outstanding advances included $830 million in a cash flow hedge relationship as discussed in Note 8 - Derivative Financial Instruments. The following table contains detailed information on our FHLB advances and other borrowings: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Maximum outstanding at any month end $ 5,365 $ 3,182 $ 5,365 $ 3,557 Average outstanding balance 5,043 2,649 4,239 2,777 Average remaining borrowing capacity 1,182 1,626 1,297 1,106 Weighted average interest rate 1.36 % 1.26 % 1.26 % 1.25 % The following table outlines the maturity dates of our FHLB advances and other borrowings: September 30, 2017 (Dollars in millions) 2017 $ 4,065 2018 125 2019 50 2020 — Thereafter 1,125 Total $ 5,365 Parent Company Senior Notes and Trust Preferred Securities The following table presents long-term debt, net of debt issuance costs: September 30, 2017 December 31, 2016 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 246 6.125 % $ 246 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus 3.25%, matures 2032 $ 26 4.58 % $ 26 4.25 % Plus 3.25%, matures 2033 26 4.55 % 26 4.13 % Plus 3.25%, matures 2033 26 4.55 % 26 4.25 % Plus 2.00%, matures 2035 26 3.30 % 26 2.88 % Plus 2.00%, matures 2035 26 3.30 % 26 2.88 % Plus 1.75%, matures 2035 51 3.07 % 51 2.71 % Plus 1.50%, matures 2035 25 2.80 % 25 2.38 % Plus 1.45%, matures 2037 25 2.77 % 25 2.41 % Plus 2.50%, matures 2037 16 3.82 % 16 3.46 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 493 $ 493 Senior Notes On July 11, 2016, we issued $250 million of senior notes (“Senior Notes”) which mature on July 15, 2021. The proceeds from these notes were used to bring dividends current and redeem our outstanding TARP Preferred. The notes are unsecured and rank equally and ratably with the unsecured senior indebtedness of Flagstar Bancorp, Inc. Prior to June 15, 2021, we may redeem some or all of the Senior Notes at a redemption price equal to the greater of 100 percent of the aggregate principal amount of the notes to be redeemed or the sum of the present values of the remaining scheduled payments discounted to the redemption date on a semi-annual basis using a discount rate equal to the Treasury Rate plus 0.50 percent , plus, in each case accrued and unpaid interest. Trust Preferred Securities We sponsor nine trust subsidiaries, which issued preferred stock to third party investors. We issued trust preferred securities to those trusts, which we have included in long-term debt. The trust preferred securities are the sole assets of those trusts. The trust preferred securities are callable by us at any time. Interest is payable quarterly; however, we may defer interest payments for up to 20 quarters without default or penalty. As of September 30, 2017 , we had no deferred interest. |
Representation and Warranty Res
Representation and Warranty Reserve | 9 Months Ended |
Sep. 30, 2017 | |
Representation and Warranty Reserve Disclosures [Abstract] | |
Representation and Warranty Reserve | Representation and Warranty Reserve At the time a loan is sold, an estimate of the fair value of the guarantee associated with the mortgage loans is recorded in the representation and warranty reserve in the Consolidated Statements of Financial Condition which reduces the net gain on loan sales in the Consolidated Statements of Operations. The following table shows the activity impacting the representation and warranty reserve: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Balance at beginning of period $ 20 $ 36 $ 27 $ 40 Provision (benefit) Gain on sale reduction for representation and warranty liability 1 1 3 4 Representation and warranty provision (benefit) (4 ) (6 ) (11 ) (12 ) Total (3 ) (5 ) (8 ) (8 ) (Charge-offs) recoveries, net (1 ) 1 (3 ) — Balance at end of period $ 16 $ 32 $ 16 $ 32 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table sets forth the components in accumulated other comprehensive income (loss): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Investment securities Beginning balance $ (6 ) $ 21 $ (8 ) $ 5 Unrealized gain — 1 2 27 Less: Tax provision — — 1 10 Net unrealized gain — 1 1 17 Reclassifications out of AOCI (1) 1 (8 ) 3 (8 ) Less: Tax (benefit) provision — (3 ) 1 (3 ) Net unrealized gain (loss) reclassified out of AOCI 1 (5 ) 2 (5 ) Other comprehensive income/(loss), net of tax 1 (4 ) 3 12 Ending balance $ (5 ) $ 17 $ (5 ) $ 17 Cash Flow Hedges Beginning balance $ (3 ) $ (40 ) $ 1 $ (3 ) Unrealized gain (loss) — 2 (2 ) (61 ) Less: Tax (benefit) provision — 2 (1 ) (17 ) Net unrealized (loss) — — (1 ) (44 ) Reclassifications out of AOCI (1) — 3 (5 ) 10 Less: Tax (benefit) — — (2 ) — Net unrealized gain (loss) reclassified out of AOCI — 3 (3 ) 10 Other comprehensive income/(loss), net of tax — 3 (4 ) (34 ) Ending balance $ (3 ) $ (37 ) $ (3 ) $ (37 ) (1) Reclassifications are reported in other noninterest income on the Consolidated Statement of Operations. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants and Stock-Based Compensation | Warrants May Investor Warrant We granted warrants (the "May Investor Warrants") on January 30, 2009 under anti-dilution provisions applicable to certain investors (the "May Investors") in our May 2008 private placement capital raise. During the nine months ended September 30, 2017 , a total of 237,627 May Investor Warrants were exercised, resulting in the net issuance of 154,313 shares of Common Stock. As of September 30, 2017 , there are no remaining May Investor Warrants outstanding and the related liability is reduced to zero . At December 31, 2016 , the liability was $4 million . For further information, see Note 18 - Fair Value Measurements. TARP Warrant On January 30, 2009, in conjunction with the sale of 266,657 shares of TARP Preferred, we issued a warrant to purchase up to approximately 645,138 shares of Common Stock at an exercise price of $62.00 per share (the "Warrant"). The Warrant is exercisable through January 30, 2019 and remains outstanding. Stock-Based Compensation We had stock-based compensation expense of $2 million and $8 million for the three and nine months ended September 30, 2017 . Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock units activity: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock Non-vested balance at beginning of period 1,455,327 $ 19.88 1,461,910 $ 17.68 Granted 28,750 23.57 355,088 28.02 Vested (298 ) 16.77 (214,239 ) 18.95 Canceled and forfeited (15,952 ) 23.31 (134,932 ) 18.57 Non-vested balance at end of period 1,467,827 $ 19.92 1,467,827 $ 19.92 2017 Employee Stock Purchase Plan The Employee Stock Purchase Plan ("2017 ESPP") was approved on March 20, 2017 by our Board of Directors ("the Board") and on May 23, 2017 by our shareholders. The 2017 ESPP became effective July 1, 2017 and will remain effective until terminated by the Board. A total of 800,000 shares of the Company’s common stock are reserved and authorized for issuance for purchase under the 2017 ESPP. During the three months ended September 30, 2017 , 19,897 shares were issued under the 2017 ESPP and our associated compensation expense was de minimis. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share, excluding dilution, is computed by dividing earnings applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock or resulted in the issuance of common stock that could then share in our earnings. The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions, except share data) Net income $ 40 $ 57 $ 108 $ 143 Deferred cumulative preferred stock dividends — (2 ) — (18 ) Net income applicable to common stockholders $ 40 $ 55 $ 108 $ 125 Weighted average shares Weighted average common shares outstanding 57,162,025 56,580,238 57,062,696 56,556,188 Effect of dilutive securities May Investor Warrants — 364,791 16,383 339,893 Stock-based awards 1,024,568 988,777 1,054,217 831,181 Weighted average diluted common shares 58,186,593 57,933,806 58,133,296 57,727,262 Earnings per common share Basic earnings per common share $ 0.71 $ 0.98 $ 1.90 $ 2.21 Effect of dilutive securities May Investor Warrants — — — (0.02 ) Stock-based awards (0.01 ) (0.02 ) (0.04 ) (0.03 ) Diluted earnings per common share $ 0.70 $ 0.96 $ 1.86 $ 2.16 Under the terms of the TARP Preferred, the Company elected to defer payments of preferred stock dividends beginning with the February 2012 dividend. Although, while being deferred, the impact was not included in quarterly net income from continuing operations, the deferral did impact net income applicable to common stock for the purpose of calculating earnings per share, as shown above. On July 29, 2016, we completed the $267 million redemption of our TARP Preferred. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Warrants and Stock-Based Compensation | Warrants May Investor Warrant We granted warrants (the "May Investor Warrants") on January 30, 2009 under anti-dilution provisions applicable to certain investors (the "May Investors") in our May 2008 private placement capital raise. During the nine months ended September 30, 2017 , a total of 237,627 May Investor Warrants were exercised, resulting in the net issuance of 154,313 shares of Common Stock. As of September 30, 2017 , there are no remaining May Investor Warrants outstanding and the related liability is reduced to zero . At December 31, 2016 , the liability was $4 million . For further information, see Note 18 - Fair Value Measurements. TARP Warrant On January 30, 2009, in conjunction with the sale of 266,657 shares of TARP Preferred, we issued a warrant to purchase up to approximately 645,138 shares of Common Stock at an exercise price of $62.00 per share (the "Warrant"). The Warrant is exercisable through January 30, 2019 and remains outstanding. Stock-Based Compensation We had stock-based compensation expense of $2 million and $8 million for the three and nine months ended September 30, 2017 . Restricted Stock and Restricted Stock Units The following table summarizes restricted stock and restricted stock units activity: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock Non-vested balance at beginning of period 1,455,327 $ 19.88 1,461,910 $ 17.68 Granted 28,750 23.57 355,088 28.02 Vested (298 ) 16.77 (214,239 ) 18.95 Canceled and forfeited (15,952 ) 23.31 (134,932 ) 18.57 Non-vested balance at end of period 1,467,827 $ 19.92 1,467,827 $ 19.92 2017 Employee Stock Purchase Plan The Employee Stock Purchase Plan ("2017 ESPP") was approved on March 20, 2017 by our Board of Directors ("the Board") and on May 23, 2017 by our shareholders. The 2017 ESPP became effective July 1, 2017 and will remain effective until terminated by the Board. A total of 800,000 shares of the Company’s common stock are reserved and authorized for issuance for purchase under the 2017 ESPP. During the three months ended September 30, 2017 , 19,897 shares were issued under the 2017 ESPP and our associated compensation expense was de minimis. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes in interim periods requires us to make a best estimate of the effective tax rate expected to be applicable for the full year, adjusted for any discreet items for the applicable period. This estimated effective tax rate is then applied to interim consolidated pre-tax operating income to determine the interim provision for income taxes. The following table presents our provision for income tax and effective tax provision rate: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Provision for income taxes $ 20 $ 30 $ 52 $ 73 Effective tax provision rate 32.4 % 34.3 % 32.3 % 33.8 % We believe that it is unlikely that our unrecognized tax benefits will change by a material amount during the next 12 months . We recognize interest and penalties related to unrecognized tax benefits in provision for income taxes. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Regulatory Matters | Regulatory Matters Regulatory Capital We, along with the Bank, must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that could have a material effect on the Consolidated Financial Statements. On January 1, 2015 , the Basel III rules became effective and include transition provisions through 2018. To be categorized as "well-capitalized," the Company and the Bank must maintain minimum tangible capital, Tier 1 capital, common equity Tier 1, and total capital ratios as set forth in the table below. We, along with the Bank, are considered "well-capitalized" at both September 30, 2017 and December 31, 2016 . The following tables present the regulatory capital ratios as of the dates indicated: Bancorp Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) September 30, 2017 Tangible capital (to adjusted avg. total assets) $ 1,423 8.80 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,423 8.80 % $ 647 4.00 % $ 808 5.00 % Common equity Tier 1 capital (to RWA) 1,208 11.65 % 467 4.50 % 674 6.50 % Tier 1 capital (to RWA) 1,423 13.72 % 622 6.00 % 830 8.00 % Total capital (to RWA) 1,554 14.99 % 830 8.00 % 1,037 10.00 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,256 8.88 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,256 8.88 % $ 566 4.0 % $ 707 5.0 % Common equity Tier 1 capital (to RWA) 1,084 13.06 % 374 4.5 % 540 6.5 % Tier 1 capital (to RWA) 1,256 15.12 % 498 6.0 % 664 8.0 % Total capital (to RWA) 1,363 16.41 % 664 8.0 % 830 10.0 % N/A - Not applicable Bank Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) September 30, 2017 Tangible capital (to adjusted avg. total assets) $ 1,519 9.38 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,519 9.38 % $ 648 4.00 % $ 810 5.00 % Common equity tier 1 capital (to RWA) 1,519 14.61 % 468 4.50 % 676 6.50 % Tier 1 capital (to RWA) 1,519 14.61 % 624 6.00 % 832 8.00 % Total capital (to RWA) 1,651 15.88 % 832 8.00 % 1,040 10.00 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,491 10.52 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,491 10.52 % $ 567 4.0 % $ 709 5.0 % Common equity tier 1 capital (to RWA) 1,491 17.90 % 375 4.5 % 542 6.5 % Tier 1 capital (to RWA) 1,491 17.90 % 500 6.0 % 667 8.0 % Total capital (to RWA) 1,598 19.18 % 667 8.0 % 833 10.0 % N/A - Not applicable |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Commitments | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings, Contingencies and Commitments | Legal Proceedings, Contingencies and Commitments Legal Proceedings We and our subsidiaries are subject to various pending or threatened legal proceedings arising out of the normal course of business operations. In addition, the Bank is routinely named in civil actions throughout the country by borrowers and former borrowers relating to the origination, purchase, sale, and servicing of mortgage loans. From time to time, governmental agencies also conduct investigations or examinations of various practices of the Bank. In the course of such investigations or examinations, the Bank cooperates with such agencies and provides information as requested. We assess the liabilities and loss contingencies in connection with pending or threatened legal and regulatory proceedings on at least a quarterly basis and establish accruals when we believe it is probable that a loss may be incurred and that the amount of such loss can be reasonably estimated. Once established, litigation accruals are adjusted, as appropriate, in light of additional information. At September 30, 2017 , we do not believe that the amount of any reasonably possible losses in excess of any amounts accrued with respect to ongoing proceedings or any other known claims will be material to our financial statements, or that the ultimate outcome of these actions will have a material adverse effect on our financial condition, results of operations or cash flows. DOJ litigation settlement In 2012, the Bank entered into a Settlement Agreement with the DOJ which meets the definition of a financial liability (the "DOJ Liability"). In accordance with the Settlement Agreement, we made an initial payment of $15 million and agreed to make future annual payments totaling $118 million in annual increments of up to $25 million upon meeting all conditions, which are evaluated quarterly and include: (a) the reversal of the DTA valuation allowance, which occurred at the end of 2013; (b) the repayment of the Fixed Rate Cumulative Perpetual Preferred Stock, Series C (the "TARP Preferred"), which occurred in the third quarter of 2016; and (c) the Bank’s Tier 1 Leverage Capital Ratio equals 11 percent or greater as filed in the Call Report with the OCC. No payment would be required until six months after the Bank files its Call Report OCC first reporting that its Tier 1 Leverage Capital Ratio was 11 percent or greater. If all other conditions were then satisfied, an initial annual payment would be due at that time. The next annual payment is only made if such other conditions continue to be satisfied otherwise payments are delayed until all such conditions are met. Further, making such a payment must not violate any material banking regulatory requirement, and the OCC must not object in writing. Consistent with our business and regulatory requirements, Flagstar shall seek in good faith to fulfill the conditions, and will not undertake any conduct or fail to take any action the purpose of which is to frustrate or delay our ability to fulfill any of the above conditions. Additionally, if the Bank and Bancorp become party to a business combination in which the Bank or Bancorp represent less than 33.3 percent of the resulting company’s assets. Annual payments must commence twelve months after the date of that business combination. We elected to account for the DOJ Liability under the fair value option. To determine the fair value, we utilize a discounted cash flow model. Key assumptions for the discounted cash flow model include using a discount rate as of September 30, 2017 of 9.4 percent ; probability weightings of multiple cash flow scenarios and possible outcomes which contemplate the above conditions and estimates of forecasted net income, size of the balance sheet, capital levels, dividends and their impact on the timing of cash payments and the assumptions we believe a market participant would make to transfer the liability. The fair value of the DOJ Liability was $60 million at both September 30, 2017 and December 31, 2016 . Other litigation accruals At September 30, 2017 and December 31, 2016 , excluding the fair value liability relating to the DOJ litigation settlement, our total accrual for contingent liabilities, settled litigation and regulatory matters was $2 million and $3 million , respectively. Commitments The following table is a summary of the contractual amount of significant commitments: September 30, 2017 December 31, 2016 (Dollars in millions) Commitments to extend credit Mortgage loans interest-rate lock commitments $ 4,804 $ 4,115 Warehouse loan commitments 1,560 1,670 Commercial and industrial commitments 692 424 Other commercial commitments 955 651 HELOC commitments 241 179 Other consumer commitments 51 57 Standby and commercial letters of credit 46 30 Commitments to extend credit are agreements to lend to a customer as long as there is not a violation of any condition established in the contract. Since many of these commitments expire without being drawn upon, the total commitment amounts do not necessarily represent future cash flow requirements. Commitments generally have fixed expiration dates or other termination clauses. We evaluate each customer's credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us, upon extension of credit is based on management's credit evaluation of the counterparties. These instruments involve, to varying degrees, elements of credit and interest rate risk beyond the amount recognized on the Consolidated Statements of Financial Condition. Our exposure to credit losses in the event of nonperformance by the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. We utilize the same credit policies in making commitments and conditional obligations as we do for balance sheet instruments. The types of credit we extend are as follows: Mortgage loan interest-rate lock commitments. We enter into mortgage interest-rate lock commitments with our customers. These commitments are considered to be derivative instruments and the fair value of these commitments is recorded in the Consolidated Statements of Financial Condition in other assets. For further information, see Note 8 - Derivative Financial Instruments. Warehouse loan commitments. Lines of credit provided to mortgage originators to fund loans they originate and then sell. The proceeds of the sale of the loans are used to repay the draw on the line used to fund the loans. Commercial and industrial and other commercial commitments. Conditional commitments issued under various terms to lend funds to business and other entities. These commitments include revolving credit agreements, term loan commitments and short-term borrowing agreements. Many of these loan commitments have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of these commitments are expected to expire without being funded, the total commitment amounts do not necessarily represent future liquidity requirements. HELOC commitments. Commitments to extend, originate or purchase credit are primarily lines of credit to consumers and have specified rates and maturity dates. Many of these commitments also have adverse change clauses, which allow us to cancel the commitment due to deterioration in the borrowers’ creditworthiness or a decline in the collateral value. Other consumer commitments. C onditional commitments issued to accommodate the financial needs of customers. The commitments are under various terms to lend funds to consumers, which include revolving credit agreements, term loan commitments and short-term borrowing agreements. Standby and commercial letters of credit. Conditional commitments issued to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, while commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. We maintain a reserve for the estimate of probable credit losses inherent in unfunded commitments to extend credit. Unfunded commitments to extend credit include unfunded loans with available balances, new commitments to lend that are not yet funded, and standby and commercial letters of credit. A reserve balance of $3 million at both September 30, 2017 and December 31, 2016 is reflected in other liabilities on the Consolidated Statements of Financial Condition. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements We utilize fair value measurements to record or disclose the fair value on certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability through an orderly transaction between market participants at the measurement date. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, we use present value techniques and other valuation methods to estimate the fair values of our financial instruments. These valuation models rely on market-based parameters when available, such as interest rate yield curves or credit spreads. Unobservable inputs may be based on management's judgment, assumptions and estimates related to credit quality, our future earnings, interest rates and other relevant inputs. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Refer to Note 22 - Fair Value Measurements to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2016 for a description of our valuation methodologies and information about the fair value hierarchy. Valuation Hierarchy U.S. GAAP establishes a three-level valuation hierarchy for disclosure of fair value measurements. The hierarchy is based on the transparency of the inputs used in the valuation process with the highest priority given to quoted prices available in active markets and the lowest priority to unobservable inputs where no active market exists, as discussed below. Level 1 - Quoted prices (unadjusted) for identical assets or liabilities in active markets in which we can participate as of the measurement date; Level 2 - Quoted prices for similar instruments in active markets, and other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and Level 3 - Unobservable inputs that reflect our own assumptions about the assumptions that market participants would use in pricing an asset or liability. A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the overall fair value measurement. Transfers between levels of the fair value hierarchy are recognized at the end of the reporting period. Assets and Liabilities Measured at Fair Value on a Recurring Basis. The following tables present the financial instruments carried at fair value by caption on the Consolidated Statement of Financial Condition and by level in the valuation hierarchy. September 30, 2017 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 750 $ — $ 750 Agency - Residential — 809 — 809 Municipal obligations — 44 — 44 Corporate debt obligations — 34 — 34 Loans held-for-sale Residential first mortgage loans — 4,907 — 4,907 Loans held-for-investment Residential first mortgage loans — 9 — 9 Home equity — — 4 4 Mortgage servicing rights — — 246 246 Derivative assets Rate lock commitments (fallout-adjusted) — — 33 33 Mortgage-backed securities forwards — 12 — 12 Interest rate swaps and swaptions — 14 — 14 Interest rate swap on FHLB advances (net) — 1 — 1 Total assets at fair value $ — $ 6,580 $ 283 $ 6,863 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (1 ) $ (1 ) Futures (3 ) — — (3 ) Mortgage backed securities forwards — (4 ) — (4 ) Interest rate swaps — (2 ) — (2 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (26 ) (26 ) Total liabilities at fair value $ (3 ) $ (6 ) $ (87 ) $ (96 ) On May 15, 2017, the Company closed on the acquisition of certain assets of Opes Advisors (“Opes”), a California based retail mortgage originator and wealth management service provider. Although the acquired assets of Opes were not significant, the addition of Opes positions us to increase our distributed retail lending channel. Consideration in the acquisition of Opes consisted of upfront cash and contingent cash in the form of an earn-out. The earn-out is based on future target production volumes and profitability of the division which were significant inputs to the preliminary fair value. We deem the initial valuation of the assets and liabilities to be provisional and have left the measurement period open. These fair values may be adjusted in a future period, not to exceed one year after the acquisition date, to reflect new facts and circumstances which existed as of the acquisition date. During the third quarter of 2017, an adjustment was made to the initial fair value of the acquisition earn-out that was the result of facts and circumstances in existence at the acquisition date. December 31, 2016 Level 1 Level 2 Level 3 Total Fair (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 548 $ — $ 548 Agency - Residential — 898 — 898 Municipal obligations — 34 — 34 Loans held-for-sale Residential first mortgage loans — 3,145 — 3,145 Loans held-for-investment Residential first mortgage loans — 7 — 7 Home equity — — 65 65 Mortgage servicing rights — — 335 335 Derivative assets Rate lock commitments (fallout-adjusted) — — 24 24 Futures 2 — — 2 Mortgage backed securities forwards — 43 — 43 Interest rate swaps and swaptions — 35 — 35 Interest rate swaps on FHLB advances (net) — 19 — 19 Total assets at fair value $ 2 $ 4,729 $ 424 $ 5,155 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (6 ) $ (6 ) Mortgage backed securities forwards — (11 ) — (11 ) Interest rate swaps — (37 ) — (37 ) Warrant liabilities — (4 ) — (4 ) DOJ litigation settlement — — (60 ) (60 ) Total liabilities at fair value $ — $ (52 ) $ (66 ) $ (118 ) There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2017 . Fair Value Measurements Using Significant Unobservable Inputs The following tables include a roll forward of the Consolidated Statements of Financial Condition amounts (including the change in fair value) for financial instruments classified by us within level 3 of the valuation hierarchy: Recorded in Earnings Recorded in OCI Balance at Beginning of Period Total Unrealized Gains / (Losses) Total Realized Gains / (Losses) Total Unrealized Gains / (Losses) Purchases / Originations Sales Settlements Transfers In (Out) Balance at End of Period (Dollars in millions) Three Months Ended September 30, 2017 Assets Loans held-for-investment Home equity $ 5 $ — $ — $ — $ — $ — $ (1 ) $ — $ 4 Mortgage servicing rights 184 (9 ) — — 75 (4 ) — — 246 Rate lock commitments (net) (1) 26 21 — — 82 — — (97 ) 32 Totals $ 215 $ 12 $ — $ — $ 157 $ (4 ) $ (1 ) $ (97 ) $ 282 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (23 ) (1 ) — — (2 ) — — — (26 ) Totals $ (83 ) $ (1 ) $ — $ — $ (2 ) $ — $ — $ — $ (86 ) Three Months Ended September 30, 2016 Assets Loans held-for-investment Home equity $ 82 $ 4 $ — $ — $ — $ — $ (14 ) $ — $ 72 Mortgage servicing rights 301 (33 ) — — 51 (17 ) — — 302 Rate lock commitments (net) (1) 82 33 — — 116 (150 ) (18 ) — 63 Totals $ 465 $ 4 $ — $ — $ 167 $ (167 ) $ (32 ) $ — $ 437 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) (1) Rate lock commitments are reported on a fallout adjusted basis. Transfers out of Level 3 represent the settlement value of the commitments that are transferred to LHFS, which are classified as Level 2 assets. Recorded in Earnings Recorded in OCI Balance at Total Unrealized Gains / (Losses) Total Realized Gains / (Losses) Total Unrealized Gains / (Losses) Purchases / Originations Sales Settlements Transfers In (Out) Balance at (Dollars in millions) Nine Months Ended September 30, 2017 Assets Loans held-for-sale Home equity $ — $ 1 $ — $ — $ — $ (52 ) $ (1 ) $ 52 $ — Loans held-for-investment Home equity 65 1 — — — — — (7 ) (55 ) 4 Mortgage servicing rights 335 (7 ) — — 178 (260 ) — — 246 Rate lock commitments (net) (1) 18 55 — — 199 — — (240 ) 32 Totals $ 418 $ 50 $ — $ — $ 377 $ (312 ) $ (8 ) $ (243 ) $ 282 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration — (1 ) — — (25 ) — — — (26 ) Totals $ (60 ) $ (1 ) $ — $ — $ (25 ) $ — $ — $ — $ (86 ) Nine Months Ended September 30, 2016 Assets Loans held-for-investment Home equity $ 106 $ 2 $ — $ — $ — $ — $ (36 ) $ — $ 72 Mortgage servicing rights 296 (126 ) — — 173 (41 ) — — 302 Rate lock commitments (net) (1) 26 153 — — 303 (371 ) (48 ) — 63 Totals $ 428 $ 29 $ — $ — $ 476 $ (412 ) $ (84 ) $ — $ 437 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) (1) Rate lock commitments are reported on a fallout adjusted basis. Transfers out of Level 3 represent the settlement value of the commitments that are transferred to LHFS, which are classified as Level 2 assets. We utilized swaptions futures, forward agency and loan sales and interest rate swaps to manage the risk associated with MSRs and rate lock commitments. Gains and losses for individual lines in the tables do not reflect the effect of our risk management activities related to such level 3 instruments. The following tables present the quantitative information about recurring level 3 fair value financial instruments and the fair value measurements as of: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) September 30, 2017 Assets Loans held-for-investment Home equity $ 4 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) Mortgage servicing rights $ 246 Discounted cash flows Option adjusted spread 4.7% - 7.0% (5.8%) Rate lock commitments (net) $ 32 Consensus pricing Origination pull-through rate 63.9% - 95.9% (79.9%) Liabilities DOJ litigation settlement $ 60 Discounted cash flows Discount rate 7.5% - 11.3% (9.4%) Contingent consideration $ 26 Discounted cash flows Beta 0.6 - 1.6 (1.1) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) December 31, 2016 Assets Loans held-for-investment Home equity $ 65 Discounted cash flows Discount rate 6.0% - 12.2% (9.3%) Mortgage servicing rights $ 335 Discounted cash flows Option adjusted spread 6.2% - 9.3% (7.8%) Rate lock commitments (net) $ 18 Consensus pricing Origination pull-through rate 66.9% - 100.0% (83.6%) Liabilities DOJ litigation settlement $ 60 Discounted cash flows Discount rate 6.6% - 9.8% (8.2%) Recurring Significant Unobservable Inputs Home equity. The significant unobservable inputs used in the fair value measurement of the home equity loans are discount rates, constant prepayment rates, and default rates. The constant prepayment and default rates are based on a 12 month historical average. Significant increases (decreases) in the discount rate in isolation would result in a significantly lower (higher) fair value measurement. Increases (decreases) in prepay rates in isolation result in a higher (lower) fair value and increases (decreases) in default rates in isolation result in a lower (higher) fair value. HELOC loans formerly included in the FSTAR 2005-1 and FSTAR 2006-1 securitization trusts, also classified as home equity loans, were valued utilizing a loan-level discounted cash flow model which projects expected cash flows given three potential outcomes: (1) paid-in-full at scheduled maturity, (2) default at scheduled maturity (foreclosure), and (3) modification at scheduled maturity into an amortizing HELOC. Loans are placed into the potential outcome buckets based on their underlying current delinquency, FICO scores and property CLTV all of which are unobservable inputs. These loans were sold in the second quarter of 2017. MSRs. The significant unobservable inputs used in the fair value measurement of the MSRs are option adjusted spreads, prepayment rates, and cost to service. Significant increases (decreases) in all three assumptions in isolation would result in a significantly lower (higher) fair value measurement. Weighted average life (in years) is used to determine the change in fair value of MSRs. For September 30, 2017 and December 31, 2016 the weighted average life (in years) for the entire MSRs portfolio was 6.0 and 6.6 , respectively. DOJ litigation settlement. The significant unobservable input used in the fair value measurement of the DOJ litigation settlement is the discount rate and asset growth rate, in addition to those discussed in Note 17 - Legal Proceedings, Contingencies and Commitments. Significant increases (decreases) in the discount rate or asset growth rate in isolation would result in a marginally lower (higher) fair value measurement. For further information on the fair value inputs related to the DOJ litigation, see Note 17 - Legal Proceedings, Contingencies, and Commitments. Rate lock commitments. The significant unobservable input used in the fair value measurement of the rate lock commitments is the pull through rate. The pull through rate is a statistical analysis of our actual rate lock fallout history to determine the sensitivity of the residential mortgage loan pipeline compared to interest rate changes and other deterministic values. New market prices are applied based on updated loan characteristics and new fallout ratios (i.e., the inverse of the pull through rate) are applied accordingly. Significant increases (decreases) in the pull through rate in isolation would result in a significantly higher (lower) fair value measurement. Contingent consideration. The significant unobservable input used in the fair value of the contingent consideration is future forecasted target production volumes and profitability of the division. An increase or decrease to these inputs results in an increase or decrease of the liability. Other unobservable inputs include Beta and volatility which drive the risk adjusted discount rate utilized in a Monte Carlo simulation. An increase or decrease in these inputs results in a decrease or increase to the liability. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We also have assets that under certain conditions are subject to measurement at fair value on a nonrecurring basis. The following table presents assets measured at fair value on a nonrecurring basis: Total (1) Level 2 Level 3 Gains/(Losses) (Dollars in millions) September 30, 2017 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Loans held-for-investment 23 — 23 (8 ) Repossessed assets (3) 9 — 9 — Totals $ 38 $ 6 $ 32 $ (9 ) December 31, 2016 Loans held-for-sale (2) $ 9 $ 9 $ — $ (2 ) Impaired loans held-for-investment (2) Residential first mortgage loans 25 — 25 (28 ) Repossessed assets (3) 14 — 14 (2 ) Totals $ 48 $ 9 $ 39 $ (32 ) (1) The fair values are determined at various dates during the nine months ended September 30, 2017 and the year ended December 31, 2016 , respectively. (2) Gains/(losses) reflect fair value adjustments on assets for which we did not elect the fair value option. (3) Gains/(losses) reflect write downs of repossessed assets based on the estimated fair value of the specific assets. The following tables present the quantitative information about nonrecurring level 3 fair value financial instruments and the fair value measurements: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) September 30, 2017 Impaired loans held-for-investment Loans held-for-investment $ 23 Fair value of collateral Loss severity discount 28% - 31% (29.6%) Repossessed assets $ 9 Fair value of collateral Loss severity discount 29% - 100% (75.3%) December 31, 2016 Impaired loans held-for-investment Residential first mortgage loans $ 25 Fair value of collateral Loss severity discount 22% - 40% (29.5%) Repossessed assets $ 14 Fair value of collateral Loss severity discount 22% - 100% (69.5%) Nonrecurring Significant Unobservable Inputs The significant unobservable inputs used in the fair value measurement of the impaired loans and repossessed assets are appraisals or other third-party price evaluations which incorporate measures such as recent sales prices for comparable properties. Fair Value of Financial Instruments The following table presents the carrying amount and estimated fair value of financial instruments that are carried either at fair value, cost, or amortized cost: September 30, 2017 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 233 $ 233 $ 233 $ — $ — Investment securities available-for-sale 1,637 1,637 — 1,637 — Investment securities held-to-maturity 977 971 — 971 — Loans held-for-sale 4,939 4,940 — 4,940 — Loans held-for-investment 7,203 7,181 — 9 7,172 Loans with government guarantees 253 245 — 245 — Mortgage servicing rights 246 246 — — 246 Federal Home Loan Bank stock 264 264 — 264 — Bank owned life insurance 328 328 — 328 — Repossessed assets 9 9 — — 9 Other assets, foreclosure claims 92 92 — 92 — Derivative financial instruments, assets 60 60 — 27 33 Liabilities Retail deposits Demand deposits and savings accounts $ (5,243 ) $ (4,845 ) $ — $ (4,845 ) $ — Certificates of deposit (1,297 ) (1,304 ) — (1,304 ) — Wholesale deposits (43 ) (43 ) — (43 ) — Government deposits (1,068 ) (1,045 ) — (1,045 ) — Company controlled deposits (1,510 ) (1,473 ) — (1,473 ) — Federal Home Loan Bank advances (5,365 ) (5,252 ) — (5,252 ) — Long-term debt (493 ) (382 ) — (382 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (26 ) (26 ) — — (26 ) Derivative financial instruments, liabilities (10 ) (10 ) (3 ) (6 ) (1 ) December 31, 2016 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 158 $ 158 $ 158 $ — $ — Investment securities available-for-sale 1,480 1,480 — 1,480 — Investment securities held-to-maturity 1,093 1,084 — 1,084 — Loans held-for-sale 3,177 3,178 — 3,178 — Loans held-for-investment 6,065 5,998 — 7 5,991 Loans with government guarantees 365 354 — 354 — Mortgage servicing rights 335 335 — — 335 Federal Home Loan Bank stock 180 180 — 180 — Bank owned life insurance 271 271 — 271 — Repossessed assets 14 14 — — 14 Other assets, foreclosure claims 135 135 — 135 — Derivative financial instruments, assets 123 123 45 54 24 Liabilities Retail deposits Demand deposits and savings accounts $ (5,268 ) $ (4,956 ) $ — $ (4,956 ) $ — Certificates of deposit (1,056 ) (1,062 ) — (1,062 ) — Government deposits (1,030 ) (1,011 ) — (1,011 ) — Company controlled deposits (1,446 ) (1,371 ) — (1,371 ) — Federal Home Loan Bank advances (2,980 ) (2,964 ) — (2,964 ) — Long-term debt (493 ) (277 ) — (277 ) — Warrant liabilities (4 ) (4 ) — (4 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Derivative financial instruments, liabilities (54 ) (54 ) (11 ) (37 ) (6 ) The methods and assumptions used by us in estimating fair value of financial instruments which are required for disclosure only, are as follows: Cash and cash equivalents. Due to their short-term nature, the carrying amount of cash and cash equivalents approximates fair value. Investment securities held-to-maturity. Fair values are generated using market inputs, where possible, including quoted prices (the closing price in an exchange market), bid prices (the price at which a buyer stands ready to purchase), and other market information. Loans held-for-investment. The fair value is estimated using internally developed discounted cash flow models using market interest rate inputs as well as management’s best estimate of spreads for similar collateral. Loans with government guarantees. The fair value is estimated by using internally developed discounted cash flow models using market interest rate inputs as well as management’s best estimate of spreads for similar collateral. Federal Home Loan Bank stock. No secondary market exists for FHLB stock. The stock is bought and sold at par by the FHLB. Management believes that the recorded value equals the fair value. Bank owned life insurance. The fair value of bank owned life insurance policies is based on the cash surrender values of the policies as reported by the insurance companies. Other assets, foreclosure claims. The fair value of foreclosure claims with government guarantees approximates the carrying amount. Deposit accounts. The fair value of deposits with no defined maturity is estimated based on a discounted cash flow model that incorporates current market rates for similar products and expected attrition. The fair value of fixed-maturity certificates of deposit is estimated using the rates currently offered for certificates of deposit with similar remaining maturities. Federal Home Loan Bank advances. Rates currently available for debt with similar terms and remaining maturities are used to estimate the fair value of the existing debt. Long-term debt. The fair value of the long-term debt is estimated based on a discounted cash flow model that incorporates current borrowing rates for similar types of borrowing arrangements. Fair Value Option We elected the fair value option for certain items as discussed throughout the Notes to the Consolidated Financial Statements to mitigate a divergence between accounting losses and economic exposure. Interest income on LHFS is accrued on the principal outstanding primarily using the "simple-interest" method. The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 92 $ 151 $ 260 $ 440 Loans held-for-investment Other noninterest income $ — $ — $ 1 $ (2 ) Liabilities Other noninterest income $ — $ 24 $ — $ 24 The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected: September 30, 2017 December 31, 2016 Unpaid Principal Balance Fair Value Fair Value Over / (Under) Unpaid Principal Balance Unpaid Principal Balance Fair Value Fair Value Over / (Under) Unpaid Principal Balance (Dollars in millions) Assets Nonaccrual loans Loans held-for-sale $ 4 $ 4 $ — $ 2 $ 2 $ — Loans held-for-investment 6 4 (2 ) 19 13 (6 ) Total nonaccrual loans $ 10 $ 8 $ (2 ) $ 21 $ 15 $ (6 ) Other performing loans Loans held-for-sale $ 4,742 $ 4,903 $ 161 $ 3,103 $ 3,143 $ 40 Loans held-for-investment 11 9 (2 ) 72 59 (13 ) Total other performing loans $ 4,753 $ 4,912 $ 159 $ 3,175 $ 3,202 $ 27 Total loans Loans held-for-sale $ 4,746 $ 4,907 $ 161 $ 3,105 $ 3,145 $ 40 Loans held-for-investment 17 13 (4 ) 91 72 (19 ) Total loans $ 4,763 $ 4,920 $ 157 $ 3,196 $ 3,217 $ 21 Liabilities Litigation settlement (1) $ (118 ) $ (60 ) $ 58 $ (118 ) $ (60 ) $ 58 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 17 - Legal Proceedings, Contingencies and Commitments. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Our operations are conducted through three operating segments: Community Banking, Mortgage Originations, and Mortgage Servicing. The Other segment includes the remaining reported activities. Operating segments are defined as components of an enterprise that engage in business activity from which revenues are earned and expenses incurred for which discrete financial information is available that is evaluated regularly by executive management in deciding how to allocate resources and in assessing performance. The operating segments have been determined based on the products and services offered and reflect the manner in which financial information is currently evaluated by management. Each segment operates under the same banking charter, but is reported on a segmented basis for this report. Each of the operating segments is complementary to each other and because of the interrelationships of the segments, the information presented is not indicative of how the segments would perform if they operated as independent entities. Effective January 1, 2017, activity related to Loans with Government Guarantees, was moved from the Mortgage Servicing segment to the Mortgage Originations segment and we began to allocate the tax provision at a segment level. Prior to this change, the tax provision was reflected in the Other segment. The statutory federal tax rate is used for Community Banking, Mortgage Originations, and Mortgage Servicing segments with the difference between the statutory rate and the effective tax rate held in the Other segment. Prior period segment financial information, related to both changes, has been recast to conform to the current presentation. The Community Banking segment originates loans, provides deposits and fee based services to consumer, business, and mortgage lending customers through its Branch Banking, Business Banking and Commercial Banking, Government Banking, Warehouse Lending and LHFI Portfolio groups. Products offered through these groups include checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans, commercial loans, commercial real estate loans, equipment finance and leasing, home builder finance loans and warehouse lines of credit. Other financial services available include consumer and corporate card services, customized treasury management solutions, merchant services and capital markets services such as loan syndications. In addition, wealth management products and services are provided through Opes as of the acquisition date of May 15, 2017. The Mortgage Originations segment originates, acquires and sells one-to-four family residential mortgage loans. The origination and acquisition of mortgage loans comprises the majority of the lending activity. Mortgage loans are originated through home loan centers, national call centers, the Internet and unaffiliated banks and mortgage banking and brokerage companies, where the net interest income and the gains from sales associated with these loans are recognized in the Mortgage Originations segment. The Mortgage Servicing segment services and subservices mortgage loans for others on a fee for service basis and may also collect ancillary fees and earn income through the use of noninterest-bearing escrows. Revenue for those serviced and subserviced loans is earned on a contractual fee basis, with the fees varying based on our responsibilities and the status of the underlying loans. The Mortgage Servicing segment provides servicing of residential mortgages for our own LHFI portfolio in the Community Banking segment for which it earns revenue via an intercompany service fee allocation. The Other segment includes the treasury functions, funding revenue associated with stockholders' equity, the impact of interest rate risk management, the impact of balance sheet funding activities, and miscellaneous other expenses of a corporate nature. Treasury functions include administering the investment securities portfolios, balance sheet funding, and interest rate risk management. In addition, the Other segment includes revenue and expenses related to treasury and corporate assets and liabilities and equity not directly assigned or allocated to the Mortgage Originations, Mortgage Servicing or Community Banking operating segments. Revenues are comprised of net interest income (before the provision (benefit) for loan losses) and noninterest income. Noninterest expenses and provision (benefit) for income taxes are fully allocated to each operating segment. Allocation methodologies may be subject to periodic adjustment as the internal management accounting system is revised and the business or product lines within the segments change. The following tables present financial information by business segment for the periods indicated: Three Months Ended September 30, 2017 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 63 $ 34 $ 7 $ (1 ) $ 103 Net gain (loss) on loan sales (4 ) 79 — — 75 Representation and warranty benefit — 4 — — 4 Other noninterest income 9 23 11 8 51 Total net interest income and noninterest income 68 140 18 7 233 (Provision) benefit for loan losses (1 ) (1 ) — — (2 ) Depreciation and amortization expense (2 ) (2 ) (1 ) (5 ) (10 ) Other noninterest expense (49 ) (90 ) (22 ) — (161 ) Total noninterest expense (51 ) (92 ) (23 ) (5 ) (171 ) Income (loss) before income taxes 16 47 (5 ) 2 60 Provision (benefit) for income taxes 6 16 (1 ) (1 ) 20 Net income (loss) $ 10 $ 31 $ (4 ) $ 3 $ 40 Intersegment revenue $ (4 ) $ 2 $ 5 $ (3 ) $ — Average balances Loans held-for-sale $ 14 $ 4,462 $ — $ — $ 4,476 Loans with government guarantees — 264 — — 264 Loans held-for-investment 6,764 10 — 29 6,803 Total assets 6,843 5,743 30 3,823 16,439 Deposits 7,498 — 1,507 — 9,005 Three Months Ended September 30, 2016 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 54 $ 24 $ 7 $ (5 ) $ 80 Net gain (loss) on loan sales (1 ) 95 — — 94 Representation and warranty benefit — 6 — — 6 Other noninterest income 8 4 13 31 56 Total net interest income and noninterest income 61 129 20 26 236 (Provision) for loan losses (7 ) — — — (7 ) Depreciation and amortization expense (1 ) (2 ) — (5 ) (8 ) Other noninterest expense (43 ) (66 ) (25 ) — (134 ) Total noninterest expense (44 ) (68 ) (25 ) (5 ) (142 ) Income (loss) before income taxes 10 61 (5 ) 21 87 Provision (benefit) for income taxes 3 22 (2 ) 7 30 Net income (loss) $ 7 $ 39 $ (3 ) $ 14 $ 57 Intersegment revenue $ (1 ) $ (1 ) $ 6 $ (4 ) $ — Average balances Loans held-for-sale $ 16 $ 3,400 $ — $ — $ 3,416 Loans with government guarantees — 432 — — 432 Loans held-for-investment 5,843 5 — — 5,848 Total assets 5,904 4,835 26 3,383 14,148 Deposits 7,273 — 1,853 — 9,126 Nine Months Ended September 30, 2017 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 171 $ 96 $ 16 $ — $ 283 Net gain (loss) on loan sales (7 ) 196 — — 189 Representation and warranty benefit — 11 — — 11 Other noninterest income 23 66 40 17 146 Total net interest income and noninterest income 187 369 56 17 629 (Provision) benefit for loan losses (3 ) (3 ) — 2 (4 ) Depreciation and amortization expense (6 ) (5 ) (3 ) (14 ) (28 ) Other noninterest expense (138 ) (227 ) (71 ) (1 ) (437 ) Total noninterest expense (144 ) (232 ) (74 ) (15 ) (465 ) Income (loss) before income taxes 40 134 (18 ) 4 160 Provision (benefit) for income taxes 14 47 (6 ) (3 ) 52 Net income (loss) $ 26 $ 87 $ (12 ) $ 7 $ 108 Intersegment revenue $ (5 ) $ 3 $ 14 $ (12 ) $ — Average balances Loans held-for-sale $ 16 $ 3,998 $ — $ — $ 4,014 Loans with government guarantees — 300 — — 300 Loans held-for-investment 6,191 7 — 29 6,227 Total assets 6,262 5,307 36 3,801 15,406 Deposits 7,438 — 1,409 — 8,847 Nine Months Ended September 30, 2016 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 150 $ 67 $ 17 $ 2 $ 236 Net gain (loss) on loan sales 8 251 — — 259 Representation and warranty benefit — 12 — — 12 Other noninterest income 21 15 41 41 118 Total net interest income and noninterest income 179 345 58 43 625 (Provision) benefit for loan losses 9 — — — 9 Depreciation and amortization expense (5 ) (4 ) (2 ) (12 ) (23 ) Other noninterest expense (131 ) (188 ) (70 ) (6 ) (395 ) Total noninterest expense (136 ) (192 ) (72 ) (18 ) (418 ) Income (loss) before income taxes 52 153 (14 ) 25 216 Provision (benefit) for income taxes 18 54 (5 ) 6 73 Net income (loss) $ 34 $ 99 $ (9 ) $ 19 $ 143 Intersegment revenue $ (2 ) $ (1 ) $ 18 $ (15 ) $ — Average balances Loans held-for-sale $ 83 $ 2,988 $ — $ — $ 3,071 Loans with government guarantees — 450 — — 450 Loans held-for-investment 5,689 6 — — 5,695 Total assets 5,798 4,328 36 3,549 13,711 Deposits 7,080 — 1,523 — 8,603 |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adoption of New Accounting Standards We adopted the following accounting standard updates (ASU) during 2017 , none of which had a material impact to our financial statements: Standard Description Effective Date ASU 2016-17 Consolidation (Topic 810): Interests Held Through Related Parties That are Under Common Control January 1, 2017 ASU 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting January 1, 2017 ASU 2016-07 Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting January 1, 2017 ASU 2016-06 Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments January 1, 2017 ASU 2016-05 Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Relationships January 1, 2017 Accounting Standards Issued But Not Yet Adopted The following ASUs have been issued and are expected to result in a significant change to our significant accounting policies and/or have a significant financial impact: Derivatives and Hedging - In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments were designed to more closely align hedge accounting requirements with users’ risk management strategies. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. We do not expect adoption of this guidance to have a material impact on our Consolidated Financial Statements. However, the guidance is expected to provide a broader range of hedge accounting opportunities and simplify the internal documentation requirements for our existing cash flow hedge relationships. Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The ASU alters the current method for recognizing credit losses within the reserve account. Currently, an institution uses the incurred loss method, whereas the new guidance requires financial assets to be presented at the net amount expected to be collected (i.e., net of expected credit losses). The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. We have established an internal steering committee to lead the implementation efforts. The steering committee is in the process of evaluating control and process framework, data, model, and resource requirements and areas where modifications will be required. We are currently evaluating the impact adoption of the guidance will have on our Consolidated Financial Statements, and highlight that any impact will be contingent upon the underlying characteristics of the affected portfolio and macroeconomic and internal forecasts at adoption date. Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Section A - Leases: Amendments to the FASB Accounting Standards Codification, Section B - Conforming Amendments Related to Leases: Amendment to the FASB Accounting Standards Codification, Section C - Background Information and Basis For Conclusions. Lessees will need to recognize substantially all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting. ASU 2016-02 is effective retrospectively for fiscal years beginning after December 15, 2018 and early adoption is permitted. The guidance in ASU 2016-02 supersedes Topic 840, Leases. Upon adoption and implementation, we expect to gross up assets and liabilities due to the recognition of lease liabilities and right of use assets associated with the underlying lease contracts. While we do not expect the adoption of the guidance to have a material impact on our Consolidated Statements of Operations given our current inventory of leases, review is ongoing and we will continue to evaluate the impact to the Consolidated Statements of Financial Condition and to capital. Revenue from Contracts with Customers - In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under the amended guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration in exchange for those goods or services. The FASB has voted to approve a year deferral of the effective date from January 1, 2017 to January 1, 2018. In April 2016, the FASB clarified the following two aspects: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to provide a limited number of changes to its revenue recognition standard. The amendments clarify the assessment of the likelihood that revenue will be collected from a contract, the guidance for presenting sales taxes and similar taxes, and the timing for measuring customer payments that are not in cash. The amendment also specifies that a contract should be considered complete if all, or substantially all, of its revenue has been collected prior to making the transition to the new standard. In addition, the update clarifies the disclosure requirements for transition to the new standard by adjusting amounts from prior reporting periods. In December 2016, the FASB issued ASU 2016-20 Technical Corrections and Improvement to Topic 606, Revenue from Contracts with Customers. We will implement the revenue recognition guidance in the first quarter of 2018 utilizing the cumulative-effect approach. Our implementation of the guidance includes creating an inventory of revenue contracts and assessing whether the recognition of revenue associated with each contract will be impacted by the new guidance, particularly related to certain fees. Lease contracts and financial instruments, which include loans and securities, are excluded from the scope of this standard. Therefore, we do not anticipate the implementation of the revenue recognition guidance to have a material impact on our Consolidated Financial Statements. The initial scoping has been completed and the amount of in scope revenue is less than 3% of total revenue. Additionally, the recognition of revenue for in scope items is not anticipated to materially change such that we do not expect implementation of the revenue recognition guidance to have a material impact on our Consolidated Financial Statements or associated disclosures. The following ASUs have been issued and are not expected to have a material impact on our Consolidated Financial Statements and/or significant accounting policies: Standard Description Effective Date ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope. January 1, 2019 ASU 2017-10 Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force) January 1, 2018 ASU 2017-09 Update 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting January 1, 2018 ASU 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities January 1, 2019 ASU 2017-07 Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost January 1, 2018 ASU 2017-06 Plan Accounting - Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting January 1, 2019 ASU 2017-05 Other Income - Gains and Losses from the De-recognition of Non-financial Assets (Subtopic 610-20): Clarifying the Scope of Asset De-recognition Guidance and Accounting for Partial Sales of Non-financial Assets January 1, 2018 ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business January 1, 2018 ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash January 1, 2018 ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory January 1, 2018 ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 ASU 2016-04 Liabilities - Extinguishment of Liabilities (Subtopic 504-20): Recognition of Breakage for Certain Prepaid Stored-Value Products January 1, 2018 ASU 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities January 1, 2018 |
Recently Issued Accounting Pr28
Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Credit Quality | Credit Quality We utilize an internal risk rating system which is applied to all consumer and commercial loans. Descriptions of our internal risk ratings as they relate to credit quality follow the ratings used by the U.S. bank regulatory agencies as listed below. Pass. Pass assets are not impaired nor do they have any known deficiencies that could impact the quality of the asset. Watch. Watch assets are defined as pass rated assets that exhibit elevated risk characteristics or other factors that deserve management’s close attention and increased monitoring. However, the asset does not exhibit a potential or well-defined weakness that would warrant a downgrade to criticized or adverse classification. Special mention. Assets identified as special mention possess credit deficiencies or potential weaknesses deserving management's close attention. Special mention assets have a potential weakness or pose an unwarranted financial risk that, if not corrected, could weaken the assets and increase risk in the future. Special mention assets are criticized, but do not expose an institution to sufficient risk to warrant adverse classification. Substandard . Assets identified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the full collection or liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. For home equity loans and other consumer loans, we evaluate credit quality based on the aging and status of payment activity and any other known credit characteristics that call into question full repayment of the asset. Nonperforming loans are classified as either substandard, doubtful or loss. Doubtful . An asset classified as doubtful has all the weaknesses inherent in one classified substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. A doubtful asset has a high probability of total or substantial loss, but because of specific pending events that may strengthen the asset, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral, and refinancing. Generally, pending events should be resolved within a relatively short period and the ratings will be adjusted based on the new information. Because of high probability of loss, non-accrual accounting treatment is required for doubtful assets. Loss. An asset classified as loss is considered uncollectible and of such little value that the continuance as a bankable asset is not warranted. This classification does not mean that an asset has absolutely no recovery or salvage value, but, rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. |
Derivative Financial Instruments | Derivative financial instruments are recorded at fair value in other assets and other liabilities on the Consolidated Statements of Financial Condition. The Company's policy is to present its derivative assets and derivative liabilities on the Consolidated Statement of Financial Condition on a gross basis, even when provisions allowing for set-off are in place. However, for derivative contracts cleared through certain central clearing parties, variation margin payments are recognized as settlements. We are exposed to non-performance risk by the counterparties to our various derivative financial instruments. A majority of our derivatives are centrally cleared through a Central Counterparty Clearing House or consist of residential mortgage interest rate lock commitments further limiting our exposure to non-performance risk. We believe that the non-performance risk inherent in our remaining derivative contracts is minimal based on credit standards and the collateral provisions of the derivative agreements. Derivatives not designated as hedging instruments: We maintain a derivative portfolio of interest rate swaps, futures and forward commitments used to manage exposure to changes in interest rates, MSR asset values and to meet the needs of customers. We also enter into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Market risk on interest rate lock commitments and mortgage LHFS is managed using corresponding forward sale commitments. Changes in fair value of derivatives not designated as hedging instruments are recognized in the Consolidated Statements of Income. Derivatives designated as hedging instruments: We have designated certain interest rate swaps as cash flow hedges of certain interest rate payments of our variable-rate FHLB advances. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income (loss) on the Consolidated Statement of Financial Condition and reclassified into interest expense in the same period in which the hedge transaction is recognized in earnings. At September 30, 2017 , we had $3 million (net-of-tax) of unrealized losses on derivatives designated as cash flow hedges recorded in accumulated other comprehensive income (loss), compared to $1 million of unrealized gains at December 31, 2016 . The estimated amount to be reclassified from other comprehensive income into earnings during the next 12 months represents $3 million of losses (net-of-tax). Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and throughout the hedge period. All hedge relationships were and are expected to be highly effective as of September 30, 2017 . Cash flows and the profit impact associated with designated hedges are reported in the same line item as the underlying hedged item. |
Fair Value Measurements | We utilize fair value measurements to record or disclose the fair value on certain assets and liabilities. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability through an orderly transaction between market participants at the measurement date. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, we use present value techniques and other valuation methods to estimate the fair values of our financial instruments. These valuation models rely on market-based parameters when available, such as interest rate yield curves or credit spreads. Unobservable inputs may be based on management's judgment, assumptions and estimates related to credit quality, our future earnings, interest rates and other relevant inputs. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Refer to Note 22 - Fair Value Measurements to the consolidated financial statements of the Annual Report on Form 10-K for the year ended December 31, 2016 for a description of our valuation methodologies and information about the fair value hierarchy. |
Recently Issued Accounting Pronouncements | Adoption of New Accounting Standards We adopted the following accounting standard updates (ASU) during 2017 , none of which had a material impact to our financial statements: Standard Description Effective Date ASU 2016-17 Consolidation (Topic 810): Interests Held Through Related Parties That are Under Common Control January 1, 2017 ASU 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting January 1, 2017 ASU 2016-07 Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting January 1, 2017 ASU 2016-06 Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments January 1, 2017 ASU 2016-05 Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Relationships January 1, 2017 Accounting Standards Issued But Not Yet Adopted The following ASUs have been issued and are expected to result in a significant change to our significant accounting policies and/or have a significant financial impact: Derivatives and Hedging - In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments were designed to more closely align hedge accounting requirements with users’ risk management strategies. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. We do not expect adoption of this guidance to have a material impact on our Consolidated Financial Statements. However, the guidance is expected to provide a broader range of hedge accounting opportunities and simplify the internal documentation requirements for our existing cash flow hedge relationships. Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). The ASU alters the current method for recognizing credit losses within the reserve account. Currently, an institution uses the incurred loss method, whereas the new guidance requires financial assets to be presented at the net amount expected to be collected (i.e., net of expected credit losses). The measurement of expected credit losses should be based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019. We have established an internal steering committee to lead the implementation efforts. The steering committee is in the process of evaluating control and process framework, data, model, and resource requirements and areas where modifications will be required. We are currently evaluating the impact adoption of the guidance will have on our Consolidated Financial Statements, and highlight that any impact will be contingent upon the underlying characteristics of the affected portfolio and macroeconomic and internal forecasts at adoption date. Leases - In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842): Section A - Leases: Amendments to the FASB Accounting Standards Codification, Section B - Conforming Amendments Related to Leases: Amendment to the FASB Accounting Standards Codification, Section C - Background Information and Basis For Conclusions. Lessees will need to recognize substantially all leases on their balance sheet as a right-of-use asset and a lease liability. For income statement purposes, the FASB retained a dual model, requiring leases to be classified as either operating or finance. Classification will be based on criteria that are largely similar to those applied in current lease accounting. ASU 2016-02 is effective retrospectively for fiscal years beginning after December 15, 2018 and early adoption is permitted. The guidance in ASU 2016-02 supersedes Topic 840, Leases. Upon adoption and implementation, we expect to gross up assets and liabilities due to the recognition of lease liabilities and right of use assets associated with the underlying lease contracts. While we do not expect the adoption of the guidance to have a material impact on our Consolidated Statements of Operations given our current inventory of leases, review is ongoing and we will continue to evaluate the impact to the Consolidated Statements of Financial Condition and to capital. Revenue from Contracts with Customers - In May 2014, FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)." Under the amended guidance, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration in exchange for those goods or services. The FASB has voted to approve a year deferral of the effective date from January 1, 2017 to January 1, 2018. In April 2016, the FASB clarified the following two aspects: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. In May 2016, the FASB issued ASU 2016-12 Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to provide a limited number of changes to its revenue recognition standard. The amendments clarify the assessment of the likelihood that revenue will be collected from a contract, the guidance for presenting sales taxes and similar taxes, and the timing for measuring customer payments that are not in cash. The amendment also specifies that a contract should be considered complete if all, or substantially all, of its revenue has been collected prior to making the transition to the new standard. In addition, the update clarifies the disclosure requirements for transition to the new standard by adjusting amounts from prior reporting periods. In December 2016, the FASB issued ASU 2016-20 Technical Corrections and Improvement to Topic 606, Revenue from Contracts with Customers. We will implement the revenue recognition guidance in the first quarter of 2018 utilizing the cumulative-effect approach. Our implementation of the guidance includes creating an inventory of revenue contracts and assessing whether the recognition of revenue associated with each contract will be impacted by the new guidance, particularly related to certain fees. Lease contracts and financial instruments, which include loans and securities, are excluded from the scope of this standard. Therefore, we do not anticipate the implementation of the revenue recognition guidance to have a material impact on our Consolidated Financial Statements. The initial scoping has been completed and the amount of in scope revenue is less than 3% of total revenue. Additionally, the recognition of revenue for in scope items is not anticipated to materially change such that we do not expect implementation of the revenue recognition guidance to have a material impact on our Consolidated Financial Statements or associated disclosures. The following ASUs have been issued and are not expected to have a material impact on our Consolidated Financial Statements and/or significant accounting policies: Standard Description Effective Date ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope. January 1, 2019 ASU 2017-10 Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force) January 1, 2018 ASU 2017-09 Update 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting January 1, 2018 ASU 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities January 1, 2019 ASU 2017-07 Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost January 1, 2018 ASU 2017-06 Plan Accounting - Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting January 1, 2019 ASU 2017-05 Other Income - Gains and Losses from the De-recognition of Non-financial Assets (Subtopic 610-20): Clarifying the Scope of Asset De-recognition Guidance and Accounting for Partial Sales of Non-financial Assets January 1, 2018 ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business January 1, 2018 ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash January 1, 2018 ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory January 1, 2018 ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 ASU 2016-04 Liabilities - Extinguishment of Liabilities (Subtopic 504-20): Recognition of Breakage for Certain Prepaid Stored-Value Products January 1, 2018 ASU 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities January 1, 2018 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Trading and Available-for-sale Securities | The following table presents our investment securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (Dollars in millions) September 30, 2017 Available-for-sale securities Agency - Commercial $ 755 $ 1 $ (6 ) $ 750 Agency - Residential 818 2 (11 ) 809 Municipal obligations 44 — — 44 Corporate debt obligations 33 1 — 34 Total available-for-sale securities (1) $ 1,650 $ 4 $ (17 ) $ 1,637 Held-to-maturity securities Agency - Commercial $ 542 $ 1 $ (5 ) $ 538 Agency - Residential 435 — (2 ) 433 Total held-to-maturity securities (1) $ 977 $ 1 $ (7 ) $ 971 December 31, 2016 Available-for-sale securities Agency - Commercial $ 551 $ 2 $ (5 ) $ 548 Agency - Residential 913 1 (16 ) 898 Municipal obligations 34 — — 34 Total available-for-sale securities (1) $ 1,498 $ 3 $ (21 ) $ 1,480 Held-to-maturity securities Agency - Commercial $ 595 $ — $ (6 ) $ 589 Agency - Residential 498 1 (4 ) 495 Total held-to-maturity securities (1) $ 1,093 $ 1 $ (10 ) $ 1,084 (1) There were no securities of a single issuer, which are not governmental or government-sponsored, that exceeded 10 percent of stockholders’ equity at September 30, 2017 or December 31, 2016 . |
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | The following table summarizes, by duration, the unrealized loss positions on investment securities: Unrealized Loss Position with Duration 12 Months and Over Unrealized Loss Position with Duration Under 12 Months Fair Value Number of Securities Unrealized Loss Fair Value Number of Securities Unrealized Loss (Dollars in millions) September 30, 2017 Available-for-sale securities Agency - Commercial $ 34 3 $ (1 ) $ 582 40 $ (5 ) Agency - Residential 98 10 (3 ) 501 40 (8 ) Municipal obligations 1 1 — 21 8 — Corporate debt obligations — — — 3 1 — Held-to-maturity securities Agency - Commercial $ 16 2 $ — $ 395 26 $ (5 ) Agency - Residential 16 2 — 319 40 (2 ) December 31, 2016 Available-for-sale securities Agency - Commercial $ 6 1 $ — $ 345 29 $ (5 ) Agency - Residential — — — 748 55 (16 ) Municipal obligations — — — 17 8 — Held-to-maturity securities Agency - Commercial $ — — $ — $ 528 34 $ (6 ) Agency - Residential — — — 385 43 (4 ) |
Schedule of Available-for-sale Securities, by Contractual Maturity Date | The following table presents amortized cost and estimated fair value of securities by contractual maturity: Investment Securities Available-for-Sale Investment Securities Held-to-maturity Amortized Cost Fair Value Weighted Average Yield Amortized Cost Fair Value Weighted Average Yield (Dollars in millions) September 30, 2017 Due after one year through five years $ 17 $ 17 3.37 % $ — $ — — % Due after five years through 10 years 44 45 4.83 % 61 61 2.50 % Due after 10 years 1,589 1,575 2.34 % 916 910 2.43 % Total $ 1,650 $ 1,637 $ 977 $ 971 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Loans Held-for-investment | The following table presents our loans held-for-investment: September 30, 2017 December 31, 2016 (Dollars in millions) Consumer loans Residential first mortgage $ 2,665 $ 2,327 Home equity 496 443 Other 26 28 Total consumer loans 3,187 2,798 Commercial loans Commercial real estate (1) 1,760 1,261 Commercial and industrial 1,097 769 Warehouse lending 1,159 1,237 Total commercial loans 4,016 3,267 Total loans held-for-investment $ 7,203 $ 6,065 (1) Includes $270 million and $245 million of owner occupied commercial real estate loans at September 30, 2017 and December 31, 2016 , respectively. |
Allowance for Loan Losses | The following table presents changes in ALLL, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) Three Months Ended September 30, 2017 Beginning balance ALLL $ 56 $ 19 $ 1 $ 37 $ 21 $ 6 $ 140 Charge-offs (2) (1 ) (2 ) — — — — (3 ) Recoveries — 1 — — — — 1 Provision (benefit) (3 ) 2 — 5 (2 ) — 2 Ending balance ALLL $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 Three Months Ended September 30, 2016 Beginning balance ALLL $ 81 $ 30 $ 1 $ 19 $ 11 $ 8 $ 150 Charge-offs (2) (7 ) (1 ) (1 ) — — — (9 ) Recoveries — 1 1 — — — 2 Provision (benefit)(3) (4 ) (5 ) — 6 3 — — Ending balance ALLL $ 70 $ 25 $ 1 $ 25 $ 14 $ 8 $ 143 Nine Months Ended September 30, 2017 Beginning balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Charge-offs (2) (6 ) (3 ) (1 ) — — — (10 ) Recoveries 1 2 1 — — — 4 Provision (benefit) (8 ) (3 ) — 14 2 (1 ) 4 Ending balance ALLL $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 Nine Months Ended September 30, 2016 Beginning balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 Charge-offs (2) (26 ) (4 ) (3 ) — — — (33 ) Recoveries 1 2 2 — — — 5 Provision (benefit)(3) (21 ) (5 ) — 7 1 2 (16 ) Ending balance ALLL $ 70 $ 25 $ 1 $ 25 $ 14 $ 8 $ 143 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of zero related to the transfer and subsequent sale of loans during the three months ended September 30, 2017 and September 30, 2016 , respectively, and $1 million and $8 million during the nine months ended September 30, 2017 and September 30, 2016 , respectively. Also includes charge-offs related to loans with government guarantees of $1 million and $6 million during the three months ended September 30, 2017 and September 30, 2016 , respectively, and $3 million and $13 million during the nine months ended September 30, 2017 and September 30, 2016 , respectively. (3) Does not include $7 million provision for loan losses recorded in the Consolidated Statements of Operations to reserve for repossessed loans with government guarantees during the three and nine months ended September 30, 2016 . The following table sets forth the method of evaluation, by class of loan: Residential First Mortgage (1) Home Equity Other Consumer Commercial Real Estate Commercial and Industrial Warehouse Lending Total (Dollars in millions) September 30, 2017 Loans held-for-investment (2) Individually evaluated $ 35 $ 29 $ — $ 1 $ — $ — $ 65 Collectively evaluated 2,621 463 26 1,759 1,097 1,159 7,125 Total loans $ 2,656 $ 492 $ 26 $ 1,760 $ 1,097 $ 1,159 $ 7,190 Allowance for loan losses (2) Individually evaluated $ 6 $ 9 $ — $ — $ — $ — $ 15 Collectively evaluated 46 11 1 42 19 6 125 Total allowance for loan losses $ 52 $ 20 $ 1 $ 42 $ 19 $ 6 $ 140 December 31, 2016 Loans held-for-investment (2) Individually evaluated $ 46 $ 29 $ — $ — $ — $ — $ 75 Collectively evaluated 2,274 349 28 1,261 769 1,237 5,918 Total loans $ 2,320 $ 378 $ 28 $ 1,261 $ 769 $ 1,237 $ 5,993 Allowance for loan losses (2) Individually evaluated $ 5 $ 8 $ — $ — $ — $ — $ 13 Collectively evaluated 60 16 1 28 17 7 129 Total allowance for loan losses $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 (1) Includes allowance related to loans with government guarantees. (2) Excludes loans carried under the fair value option |
Past Due Loans | The following table sets forth the LHFI aging analysis of past due and current loans: 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due (1) Total Past Due Current Total LHFI (Dollars in millions) September 30, 2017 Consumer loans Residential first mortgage $ 3 $ 1 $ 24 $ 28 $ 2,637 $ 2,665 Home equity 1 — 6 7 489 496 Other — — — — 26 26 Total consumer loans 4 1 30 35 3,152 3,187 Commercial loans Commercial real estate — — 1 1 1,759 1,760 Commercial and industrial — — — — 1,097 1,097 Warehouse lending — — — — 1,159 1,159 Total commercial loans — — 1 1 4,015 4,016 Total loans (2) $ 4 $ 1 $ 31 $ 36 $ 7,167 $ 7,203 December 31, 2016 Consumer loans Residential first mortgage $ 6 $ — $ 29 $ 35 $ 2,292 $ 2,327 Home equity 1 2 11 14 429 443 Other 1 — — 1 27 28 Total consumer loans 8 2 40 50 2,748 2,798 Commercial loans Commercial real estate — — — — 1,261 1,261 Commercial and industrial — — — — 769 769 Warehouse lending — — — — 1,237 1,237 Total commercial loans — — — — 3,267 3,267 Total loans (2) $ 8 $ 2 $ 40 $ 50 $ 6,015 $ 6,065 (1) Includes less than 90 day past due performing loans which are deemed nonaccrual. Interest is not being accrued on these loans. (2) Includes $4 million and $13 million of loans 90 days or greater past due, accounted for under the fair value option at September 30, 2017 and December 31, 2016 , respectively. |
Troubled Debt Restructurings | The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) September 30, 2017 Consumer loans (1) Residential first mortgage $ 20 $ 11 $ 31 Home equity 26 4 30 Total TDRs (2) $ 46 $ 15 $ 61 December 31, 2016 Consumer loans (1) Residential first mortgage $ 22 $ 11 $ 33 Home equity 45 7 52 Total TDRs (2) $ 67 $ 18 $ 85 (1) The ALLL on consumer TDR loans totaled $12 million and $9 million at September 30, 2017 and December 31, 2016 , respectively. (2) Includes $3 million and $25 million of TDR loans accounted for under the fair value option at September 30, 2017 and December 31, 2016 , respectively. The following table provides a summary of newly modified TDRs: New TDRs Number of Accounts Pre-Modification Unpaid Principal Balance Post-Modification Unpaid Principal Balance (1) Increase in Allowance at Modification (Dollars in millions) Three Months Ended September 30, 2017 Residential first mortgages 9 $ 3 $ 3 $ — Home equity (2) 37 2 2 1 Other consumer — — — — Total TDR loans 46 $ 5 $ 5 $ 1 Three Months Ended September 30, 2016 Residential first mortgages 1 $ — $ — $ — Home equity (2)(3) 17 1 1 — Total TDR loans 18 $ 1 $ 1 $ — Nine Months Ended September 30, 2017 Residential first mortgages 17 $ 4 $ 4 $ — Home equity (2) 71 5 5 2 Other consumer 1 — — — Total TDR loans 89 $ 9 $ 9 $ 2 Nine Months Ended September 30, 2016 Residential first mortgages 17 $ 3 $ 4 $ — Home equity (2)(3) 128 8 7 — Commercial and industrial 1 2 1 — Total TDR loans 146 $ 13 $ 12 $ — (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification unpaid principal balance reflects write downs. (3) Includes loans carried at the fair value option. |
Impaired Loans | The following table presents individually evaluated impaired loans and the associated allowance: September 30, 2017 December 31, 2016 Recorded Investment Net Unpaid Principal Balance Related Allowance Recorded Investment Net Unpaid Principal Balance Related Allowance (Dollars in millions) With no related allowance recorded Consumer loans Residential first mortgage $ 15 $ 15 $ — $ 6 $ 6 $ — Total consumer loans with no related allowance recorded $ 15 $ 15 $ — $ 6 $ 6 $ — With an allowance recorded Consumer loans Residential first mortgage $ 20 $ 20 $ 6 $ 40 $ 40 $ 5 Home equity 28 29 9 29 29 8 Commercial loans Commercial real estate 1 1 — — — — Total consumer loans with an allowance recorded $ 49 $ 50 $ 15 $ 69 $ 69 $ 13 Total Impaired loans Residential first mortgage $ 35 $ 35 $ 6 $ 46 $ 46 $ 5 Home equity 28 29 9 29 29 8 Commercial real estate 1 1 — — — — Total impaired loans $ 64 $ 65 $ 15 $ 75 $ 75 $ 13 The following table presents average impaired loans and the interest income recognized: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (Dollars in millions) Consumer loans Residential first mortgage $ 37 $ 1 $ 43 $ — $ 39 $ 1 $ 55 $ 1 Home equity 28 — 30 — 28 1 31 1 Commercial loans Commercial real estate 1 — — — — — — — Commercial and industrial — — 1 — — — 2 — Total impaired loans $ 66 $ 1 $ 74 $ — $ 67 $ 2 $ 88 $ 2 |
Loan Credit Quality Indicators | In accordance with regulatory guidance, we assign risk ratings to consumer loans in the following manner: • Consumer loans are classified as Watch once the loan becomes 60 days past due. • Open and closed-end consumer loans 90 days or more past due are classified Substandard. September 30, 2017 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,614 $ 24 $ — $ 27 $ 2,665 Home equity 465 26 — 5 496 Other Consumer 26 — — — 26 Total Consumer Loans $ 3,105 $ 50 $ — $ 32 $ 3,187 Commercial Loans Commercial Real Estate $ 1,727 $ 30 $ — $ 3 $ 1,760 Commercial and Industrial 1,003 82 — 12 1,097 Warehouse 1,119 40 — — 1,159 Total Commercial Loans $ 3,849 $ 152 $ — $ 15 $ 4,016 December 31, 2016 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,273 $ 23 $ — $ 31 $ 2,327 Home equity 386 46 — 11 443 Other Consumer 28 — — — 28 Total Consumer Loans $ 2,687 $ 69 $ — $ 42 $ 2,798 Commercial Loans Commercial Real Estate $ 1,225 $ 27 $ 3 $ 6 $ 1,261 Commercial and Industrial 678 59 21 11 769 Warehouse 1,168 16 53 — 1,237 Total Commercial Loans $ 3,071 $ 102 $ 77 $ 17 $ 3,267 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets at Fair Value | The following table presents changes in the carrying value of residential first mortgage MSRs, accounted for at fair value: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Balance at beginning of period $ 184 $ 301 $ 335 $ 296 Additions from loans sold with servicing retained 75 51 178 173 Reductions from sales (4 ) (17 ) (260 ) (41 ) Changes in fair value due to (1) Decrease in MSR due to payoffs, pay-downs and run-off (5 ) (19 ) (15 ) (45 ) Changes in estimates of fair value (2) (4 ) (14 ) 8 (81 ) Balance at end of period $ 246 $ 302 $ 246 $ 302 (1) Changes in fair value are included within net return (loss) on MSRs on the Consolidated Statements of Operations. (2) Represents estimated MSR value change resulting primarily from market-driven changes. |
Schedule of Sensitivity Analysis of Fair Value | The following table summarizes the hypothetical effect on the fair value of servicing rights using adverse changes of 10 percent and 20 percent to the weighted average of certain significant assumptions used in valuing these assets. The significant assumptions used in the fair value measurement of the MSRs are option adjusted spread and prepayment rate. Significant increases (decreases) in both of these assumptions in isolation would result in a significantly lower (higher) fair value measurement. September 30, 2017 December 31, 2016 Fair value after Fair value after Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.81 % $ 242 $ 238 7.78 % $ 326 $ 318 Constant prepayment rate 9.64 % 238 231 16.68 % 322 311 Weighted average annual cost to service per loan $ 71.00 244 241 $ 68.18 330 326 |
Schedule of Servicing Assets at Fair Value, Servicing Fees | The following table summarizes income and fees associated with contractual servicing rights: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 14 $ 22 $ 43 $ 60 Changes in fair value (9 ) (33 ) (7 ) (126 ) Net return (loss) on MSR derivatives (2) — (1 ) (3 ) 44 Net transaction costs 1 1 (7 ) 1 Total net return (loss) on mortgage servicing rights $ 6 $ (11 ) $ 26 $ (21 ) (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Changes in the derivatives utilized as economic hedges to offset changes in fair value of the MSRs. The following table summarizes income and fees associated with our mortgage loans subserviced: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 9 $ 7 $ 26 $ 21 Other servicing charges (4 ) (3 ) (10 ) (7 ) Total income on mortgage loans subserviced, included in loan administration $ 5 $ 4 $ 16 $ 14 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on cash basis. |
Derivative Financial Instrume32
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instruments | The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: September 30, 2017 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances $ 830 $ 1 2023-2026 Derivatives not designated as hedging instruments: Assets Futures $ 1,091 $ — 2017-2022 Mortgage backed securities forwards 4,740 12 2017 Rate lock commitments 4,478 33 2017 Interest rate swaps and swaptions 1,331 14 2017-2047 Total derivative assets $ 11,640 $ 59 Liabilities Futures $ 671 $ 3 2017-2022 Mortgage backed securities forwards 2,089 4 2017 Rate lock commitments 326 1 2017 Interest rate swaps 920 2 2017-2032 Total derivative liabilities $ 4,006 $ 10 December 31, 2016 Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances $ 600 $ 20 2023-2026 Liabilities Interest rate swaps on FHLB advances $ 230 $ 1 2025-2026 Derivatives not designated as hedging instruments: Assets Futures $ 4,621 $ 2 2017-2020 Mortgage backed securities forwards 3,776 43 2017 Rate lock commitments 3,517 24 2017 Interest rate swaps and swaptions 2,231 35 2017-2033 Total derivative assets $ 14,145 $ 104 Liabilities Futures $ 134 $ — 2017 Mortgage backed securities forwards 1,893 11 2017 Rate lock commitments 598 6 2017 Interest rate swaps 1,129 37 2017-2047 Total derivative liabilities $ 3,754 $ 54 (1) At September 30, 2017 , variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day’s fair value of open positions is considered settlement of the derivative position for accounting purposes. At December 31, 2016 , variation margin was not recognized as settlement. (2) Derivative assets and liabilities are included in other assets and other liabilities on the Consolidated Statements of Financial Condition, respectively. |
Offsetting of Derivatives | The following tables present the derivatives subject to a master netting arrangement, including the cash pledged as collateral: Gross Amounts Netted in the Statement of Financial Position Net Amount Presented in the Statement of Financial Position Gross Amounts Not Offset in the Statement of Financial Position Gross Amount Financial Instruments Cash Collateral (Dollars in millions) September 30, 2017 Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances (1) $ 1 $ — $ 1 $ — $ 23 Derivatives not designated as hedging instruments: Assets Mortgage backed securities forwards $ 12 $ — $ 12 $ — $ 2 Interest rate swaps and swaptions (1) 14 — 14 — 11 Total derivative assets $ 26 $ — $ 26 $ — $ 13 Liabilities Futures $ 3 $ — $ 3 $ — $ 4 Mortgage backed securities forwards 4 — 4 — 10 Interest rate swaps (1) 2 — 2 — 9 Total derivative liabilities $ 9 $ — $ 9 $ — $ 23 December 31, 2016 Derivatives designated as hedging instruments: Assets Interest rate swaps on FHLB advances (1) $ 20 $ 1 $ 19 $ — $ — Liabilities Interest rate swaps on FHLB advances (1) $ 1 $ 1 $ — $ — $ 33 Derivatives not designated as hedging instruments: Assets Futures $ 2 $ — $ 2 $ — $ — Mortgage-backed securities forwards 43 — 43 — 44 Interest rate swaps and swaptions (1) 35 — 35 — 30 Total derivative assets $ 80 $ — $ 80 $ — $ 74 Liabilities Futures $ — $ — $ — $ — $ 1 Mortgage-backed securities forwards 11 — 11 — — Interest rate swaps (1) 37 — 37 — 20 Total derivative liabilities $ 48 $ — $ 48 $ — $ 21 (1) At September 30, 2017 , variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior day’s fair value of open positions is considered settlement of the derivative position for accounting purposes. At December 31, 2016 , variation margin was not recognized as settlement and we had an additional $15 million in variation margin in excess of the amounts disclosed above. |
Schedule of Changes in Fair Value of Derivative Instruments | The following table presents net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain/(Loss) Futures Net return (loss) on mortgage servicing rights $ (1 ) $ 4 $ (1 ) $ 8 Interest rate swaps and swaptions Net return (loss) on mortgage servicing rights (2 ) (7 ) (7 ) 21 Mortgage-backed securities forwards Net return (loss) on mortgage servicing rights 2 2 5 15 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (8 ) 15 (16 ) 14 Rate lock commitments Other noninterest income — — — 1 Interest rate swaps (1) Other noninterest income — 2 1 3 Total derivative gain (loss) $ (9 ) $ 16 $ (18 ) $ 62 (1) Includes customer-initiated commercial interest rate swaps. |
Borrowings (Tables)
Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of FHLB Advances, by Interest Rate Type | The following table presents a breakdown of our FHLB advances outstanding: September 30, 2017 December 31, 2016 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 4,065 1.14 % $ 1,780 0.62 % Total Short-term Federal Home Loan Bank advances 4,065 1,780 Long-term LIBOR adjustable advances 1,025 1.49 % 1,025 1.12 % Long-term fixed rate advances (1) 275 1.41 % 175 1.12 % Total Long-term Federal Home Loan Bank advances 1,300 1,200 Total Federal Home Loan Bank advances $ 5,365 $ 2,980 (1) Includes the current portion of fixed rate advances of $125 million and $50 million at September 30, 2017 and December 31, 2016 , respectively. |
Schedule of FHLB Advances, Disclosures | The following table contains detailed information on our FHLB advances and other borrowings: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Maximum outstanding at any month end $ 5,365 $ 3,182 $ 5,365 $ 3,557 Average outstanding balance 5,043 2,649 4,239 2,777 Average remaining borrowing capacity 1,182 1,626 1,297 1,106 Weighted average interest rate 1.36 % 1.26 % 1.26 % 1.25 % |
Schedule of FHLB, Advances, Maturity Summary | The following table outlines the maturity dates of our FHLB advances and other borrowings: September 30, 2017 (Dollars in millions) 2017 $ 4,065 2018 125 2019 50 2020 — Thereafter 1,125 Total $ 5,365 |
Schedule of Long-Term Debt Instruments | The following table presents long-term debt, net of debt issuance costs: September 30, 2017 December 31, 2016 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 246 6.125 % $ 246 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus 3.25%, matures 2032 $ 26 4.58 % $ 26 4.25 % Plus 3.25%, matures 2033 26 4.55 % 26 4.13 % Plus 3.25%, matures 2033 26 4.55 % 26 4.25 % Plus 2.00%, matures 2035 26 3.30 % 26 2.88 % Plus 2.00%, matures 2035 26 3.30 % 26 2.88 % Plus 1.75%, matures 2035 51 3.07 % 51 2.71 % Plus 1.50%, matures 2035 25 2.80 % 25 2.38 % Plus 1.45%, matures 2037 25 2.77 % 25 2.41 % Plus 2.50%, matures 2037 16 3.82 % 16 3.46 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 493 $ 493 |
Representation and Warranty R34
Representation and Warranty Reserve (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Representation and Warranty Reserve Disclosures [Abstract] | |
Schedule of Representation and Warranty Reserve Activity | The following table shows the activity impacting the representation and warranty reserve: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Balance at beginning of period $ 20 $ 36 $ 27 $ 40 Provision (benefit) Gain on sale reduction for representation and warranty liability 1 1 3 4 Representation and warranty provision (benefit) (4 ) (6 ) (11 ) (12 ) Total (3 ) (5 ) (8 ) (8 ) (Charge-offs) recoveries, net (1 ) 1 (3 ) — Balance at end of period $ 16 $ 32 $ 16 $ 32 |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components in accumulated other comprehensive income (loss): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Investment securities Beginning balance $ (6 ) $ 21 $ (8 ) $ 5 Unrealized gain — 1 2 27 Less: Tax provision — — 1 10 Net unrealized gain — 1 1 17 Reclassifications out of AOCI (1) 1 (8 ) 3 (8 ) Less: Tax (benefit) provision — (3 ) 1 (3 ) Net unrealized gain (loss) reclassified out of AOCI 1 (5 ) 2 (5 ) Other comprehensive income/(loss), net of tax 1 (4 ) 3 12 Ending balance $ (5 ) $ 17 $ (5 ) $ 17 Cash Flow Hedges Beginning balance $ (3 ) $ (40 ) $ 1 $ (3 ) Unrealized gain (loss) — 2 (2 ) (61 ) Less: Tax (benefit) provision — 2 (1 ) (17 ) Net unrealized (loss) — — (1 ) (44 ) Reclassifications out of AOCI (1) — 3 (5 ) 10 Less: Tax (benefit) — — (2 ) — Net unrealized gain (loss) reclassified out of AOCI — 3 (3 ) 10 Other comprehensive income/(loss), net of tax — 3 (4 ) (34 ) Ending balance $ (3 ) $ (37 ) $ (3 ) $ (37 ) (1) Reclassifications are reported in other noninterest income on the Consolidated Statement of Operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share of common stock: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions, except share data) Net income $ 40 $ 57 $ 108 $ 143 Deferred cumulative preferred stock dividends — (2 ) — (18 ) Net income applicable to common stockholders $ 40 $ 55 $ 108 $ 125 Weighted average shares Weighted average common shares outstanding 57,162,025 56,580,238 57,062,696 56,556,188 Effect of dilutive securities May Investor Warrants — 364,791 16,383 339,893 Stock-based awards 1,024,568 988,777 1,054,217 831,181 Weighted average diluted common shares 58,186,593 57,933,806 58,133,296 57,727,262 Earnings per common share Basic earnings per common share $ 0.71 $ 0.98 $ 1.90 $ 2.21 Effect of dilutive securities May Investor Warrants — — — (0.02 ) Stock-based awards (0.01 ) (0.02 ) (0.04 ) (0.03 ) Diluted earnings per common share $ 0.70 $ 0.96 $ 1.86 $ 2.16 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock Units Award Activity | The following table summarizes restricted stock and restricted stock units activity: Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock Non-vested balance at beginning of period 1,455,327 $ 19.88 1,461,910 $ 17.68 Granted 28,750 23.57 355,088 28.02 Vested (298 ) 16.77 (214,239 ) 18.95 Canceled and forfeited (15,952 ) 23.31 (134,932 ) 18.57 Non-vested balance at end of period 1,467,827 $ 19.92 1,467,827 $ 19.92 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Provision (Benefit) | The following table presents our provision for income tax and effective tax provision rate: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Provision for income taxes $ 20 $ 30 $ 52 $ 73 Effective tax provision rate 32.4 % 34.3 % 32.3 % 33.8 % |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of Regulatory Capital Ratios | The following tables present the regulatory capital ratios as of the dates indicated: Bancorp Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) September 30, 2017 Tangible capital (to adjusted avg. total assets) $ 1,423 8.80 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,423 8.80 % $ 647 4.00 % $ 808 5.00 % Common equity Tier 1 capital (to RWA) 1,208 11.65 % 467 4.50 % 674 6.50 % Tier 1 capital (to RWA) 1,423 13.72 % 622 6.00 % 830 8.00 % Total capital (to RWA) 1,554 14.99 % 830 8.00 % 1,037 10.00 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,256 8.88 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,256 8.88 % $ 566 4.0 % $ 707 5.0 % Common equity Tier 1 capital (to RWA) 1,084 13.06 % 374 4.5 % 540 6.5 % Tier 1 capital (to RWA) 1,256 15.12 % 498 6.0 % 664 8.0 % Total capital (to RWA) 1,363 16.41 % 664 8.0 % 830 10.0 % N/A - Not applicable Bank Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) September 30, 2017 Tangible capital (to adjusted avg. total assets) $ 1,519 9.38 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,519 9.38 % $ 648 4.00 % $ 810 5.00 % Common equity tier 1 capital (to RWA) 1,519 14.61 % 468 4.50 % 676 6.50 % Tier 1 capital (to RWA) 1,519 14.61 % 624 6.00 % 832 8.00 % Total capital (to RWA) 1,651 15.88 % 832 8.00 % 1,040 10.00 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,491 10.52 % N/A N/A N/A N/A Tier 1 leverage (to adjusted avg. total assets) 1,491 10.52 % $ 567 4.0 % $ 709 5.0 % Common equity tier 1 capital (to RWA) 1,491 17.90 % 375 4.5 % 542 6.5 % Tier 1 capital (to RWA) 1,491 17.90 % 500 6.0 % 667 8.0 % Total capital (to RWA) 1,598 19.18 % 667 8.0 % 833 10.0 % N/A - Not applicable |
Legal Proceedings, Contingenc40
Legal Proceedings, Contingencies and Commitments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Amount of Significant Commitments | The following table is a summary of the contractual amount of significant commitments: September 30, 2017 December 31, 2016 (Dollars in millions) Commitments to extend credit Mortgage loans interest-rate lock commitments $ 4,804 $ 4,115 Warehouse loan commitments 1,560 1,670 Commercial and industrial commitments 692 424 Other commercial commitments 955 651 HELOC commitments 241 179 Other consumer commitments 51 57 Standby and commercial letters of credit 46 30 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present the financial instruments carried at fair value by caption on the Consolidated Statement of Financial Condition and by level in the valuation hierarchy. September 30, 2017 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 750 $ — $ 750 Agency - Residential — 809 — 809 Municipal obligations — 44 — 44 Corporate debt obligations — 34 — 34 Loans held-for-sale Residential first mortgage loans — 4,907 — 4,907 Loans held-for-investment Residential first mortgage loans — 9 — 9 Home equity — — 4 4 Mortgage servicing rights — — 246 246 Derivative assets Rate lock commitments (fallout-adjusted) — — 33 33 Mortgage-backed securities forwards — 12 — 12 Interest rate swaps and swaptions — 14 — 14 Interest rate swap on FHLB advances (net) — 1 — 1 Total assets at fair value $ — $ 6,580 $ 283 $ 6,863 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (1 ) $ (1 ) Futures (3 ) — — (3 ) Mortgage backed securities forwards — (4 ) — (4 ) Interest rate swaps — (2 ) — (2 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (26 ) (26 ) Total liabilities at fair value $ (3 ) $ (6 ) $ (87 ) $ (96 ) On May 15, 2017, the Company closed on the acquisition of certain assets of Opes Advisors (“Opes”), a California based retail mortgage originator and wealth management service provider. Although the acquired assets of Opes were not significant, the addition of Opes positions us to increase our distributed retail lending channel. Consideration in the acquisition of Opes consisted of upfront cash and contingent cash in the form of an earn-out. The earn-out is based on future target production volumes and profitability of the division which were significant inputs to the preliminary fair value. We deem the initial valuation of the assets and liabilities to be provisional and have left the measurement period open. These fair values may be adjusted in a future period, not to exceed one year after the acquisition date, to reflect new facts and circumstances which existed as of the acquisition date. During the third quarter of 2017, an adjustment was made to the initial fair value of the acquisition earn-out that was the result of facts and circumstances in existence at the acquisition date. December 31, 2016 Level 1 Level 2 Level 3 Total Fair (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 548 $ — $ 548 Agency - Residential — 898 — 898 Municipal obligations — 34 — 34 Loans held-for-sale Residential first mortgage loans — 3,145 — 3,145 Loans held-for-investment Residential first mortgage loans — 7 — 7 Home equity — — 65 65 Mortgage servicing rights — — 335 335 Derivative assets Rate lock commitments (fallout-adjusted) — — 24 24 Futures 2 — — 2 Mortgage backed securities forwards — 43 — 43 Interest rate swaps and swaptions — 35 — 35 Interest rate swaps on FHLB advances (net) — 19 — 19 Total assets at fair value $ 2 $ 4,729 $ 424 $ 5,155 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (6 ) $ (6 ) Mortgage backed securities forwards — (11 ) — (11 ) Interest rate swaps — (37 ) — (37 ) Warrant liabilities — (4 ) — (4 ) DOJ litigation settlement — — (60 ) (60 ) Total liabilities at fair value $ — $ (52 ) $ (66 ) $ (118 ) There were no transfers between Level 1 and Level 2 during the nine months ended September 30, 2017 . |
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | The following tables include a roll forward of the Consolidated Statements of Financial Condition amounts (including the change in fair value) for financial instruments classified by us within level 3 of the valuation hierarchy: Recorded in Earnings Recorded in OCI Balance at Beginning of Period Total Unrealized Gains / (Losses) Total Realized Gains / (Losses) Total Unrealized Gains / (Losses) Purchases / Originations Sales Settlements Transfers In (Out) Balance at End of Period (Dollars in millions) Three Months Ended September 30, 2017 Assets Loans held-for-investment Home equity $ 5 $ — $ — $ — $ — $ — $ (1 ) $ — $ 4 Mortgage servicing rights 184 (9 ) — — 75 (4 ) — — 246 Rate lock commitments (net) (1) 26 21 — — 82 — — (97 ) 32 Totals $ 215 $ 12 $ — $ — $ 157 $ (4 ) $ (1 ) $ (97 ) $ 282 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (23 ) (1 ) — — (2 ) — — — (26 ) Totals $ (83 ) $ (1 ) $ — $ — $ (2 ) $ — $ — $ — $ (86 ) Three Months Ended September 30, 2016 Assets Loans held-for-investment Home equity $ 82 $ 4 $ — $ — $ — $ — $ (14 ) $ — $ 72 Mortgage servicing rights 301 (33 ) — — 51 (17 ) — — 302 Rate lock commitments (net) (1) 82 33 — — 116 (150 ) (18 ) — 63 Totals $ 465 $ 4 $ — $ — $ 167 $ (167 ) $ (32 ) $ — $ 437 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) (1) Rate lock commitments are reported on a fallout adjusted basis. Transfers out of Level 3 represent the settlement value of the commitments that are transferred to LHFS, which are classified as Level 2 assets. Recorded in Earnings Recorded in OCI Balance at Total Unrealized Gains / (Losses) Total Realized Gains / (Losses) Total Unrealized Gains / (Losses) Purchases / Originations Sales Settlements Transfers In (Out) Balance at (Dollars in millions) Nine Months Ended September 30, 2017 Assets Loans held-for-sale Home equity $ — $ 1 $ — $ — $ — $ (52 ) $ (1 ) $ 52 $ — Loans held-for-investment Home equity 65 1 — — — — — (7 ) (55 ) 4 Mortgage servicing rights 335 (7 ) — — 178 (260 ) — — 246 Rate lock commitments (net) (1) 18 55 — — 199 — — (240 ) 32 Totals $ 418 $ 50 $ — $ — $ 377 $ (312 ) $ (8 ) $ (243 ) $ 282 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration — (1 ) — — (25 ) — — — (26 ) Totals $ (60 ) $ (1 ) $ — $ — $ (25 ) $ — $ — $ — $ (86 ) Nine Months Ended September 30, 2016 Assets Loans held-for-investment Home equity $ 106 $ 2 $ — $ — $ — $ — $ (36 ) $ — $ 72 Mortgage servicing rights 296 (126 ) — — 173 (41 ) — — 302 Rate lock commitments (net) (1) 26 153 — — 303 (371 ) (48 ) — 63 Totals $ 428 $ 29 $ — $ — $ 476 $ (412 ) $ (84 ) $ — $ 437 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) (1) Rate lock commitments are reported on a fallout adjusted basis. Transfers out of Level 3 represent the settlement value of the commitments that are transferred to LHFS, which are classified as Level 2 assets. |
Fair Value Inputs, Assets and Liabilities Measured on Recurring Basis, Quantitative Information | The following tables present the quantitative information about recurring level 3 fair value financial instruments and the fair value measurements as of: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) September 30, 2017 Assets Loans held-for-investment Home equity $ 4 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) Mortgage servicing rights $ 246 Discounted cash flows Option adjusted spread 4.7% - 7.0% (5.8%) Rate lock commitments (net) $ 32 Consensus pricing Origination pull-through rate 63.9% - 95.9% (79.9%) Liabilities DOJ litigation settlement $ 60 Discounted cash flows Discount rate 7.5% - 11.3% (9.4%) Contingent consideration $ 26 Discounted cash flows Beta 0.6 - 1.6 (1.1) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) December 31, 2016 Assets Loans held-for-investment Home equity $ 65 Discounted cash flows Discount rate 6.0% - 12.2% (9.3%) Mortgage servicing rights $ 335 Discounted cash flows Option adjusted spread 6.2% - 9.3% (7.8%) Rate lock commitments (net) $ 18 Consensus pricing Origination pull-through rate 66.9% - 100.0% (83.6%) Liabilities DOJ litigation settlement $ 60 Discounted cash flows Discount rate 6.6% - 9.8% (8.2%) |
Fair Value Measurements, Nonrecurring | We also have assets that under certain conditions are subject to measurement at fair value on a nonrecurring basis. The following table presents assets measured at fair value on a nonrecurring basis: Total (1) Level 2 Level 3 Gains/(Losses) (Dollars in millions) September 30, 2017 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Loans held-for-investment 23 — 23 (8 ) Repossessed assets (3) 9 — 9 — Totals $ 38 $ 6 $ 32 $ (9 ) December 31, 2016 Loans held-for-sale (2) $ 9 $ 9 $ — $ (2 ) Impaired loans held-for-investment (2) Residential first mortgage loans 25 — 25 (28 ) Repossessed assets (3) 14 — 14 (2 ) Totals $ 48 $ 9 $ 39 $ (32 ) (1) The fair values are determined at various dates during the nine months ended September 30, 2017 and the year ended December 31, 2016 , respectively. (2) Gains/(losses) reflect fair value adjustments on assets for which we did not elect the fair value option. (3) Gains/(losses) reflect write downs of repossessed assets based on the estimated fair value of the specific assets. |
Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques | The following tables present the quantitative information about nonrecurring level 3 fair value financial instruments and the fair value measurements: Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) September 30, 2017 Impaired loans held-for-investment Loans held-for-investment $ 23 Fair value of collateral Loss severity discount 28% - 31% (29.6%) Repossessed assets $ 9 Fair value of collateral Loss severity discount 29% - 100% (75.3%) December 31, 2016 Impaired loans held-for-investment Residential first mortgage loans $ 25 Fair value of collateral Loss severity discount 22% - 40% (29.5%) Repossessed assets $ 14 Fair value of collateral Loss severity discount 22% - 100% (69.5%) |
Fair Value, by Balance Sheet Grouping | The following table presents the carrying amount and estimated fair value of financial instruments that are carried either at fair value, cost, or amortized cost: September 30, 2017 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 233 $ 233 $ 233 $ — $ — Investment securities available-for-sale 1,637 1,637 — 1,637 — Investment securities held-to-maturity 977 971 — 971 — Loans held-for-sale 4,939 4,940 — 4,940 — Loans held-for-investment 7,203 7,181 — 9 7,172 Loans with government guarantees 253 245 — 245 — Mortgage servicing rights 246 246 — — 246 Federal Home Loan Bank stock 264 264 — 264 — Bank owned life insurance 328 328 — 328 — Repossessed assets 9 9 — — 9 Other assets, foreclosure claims 92 92 — 92 — Derivative financial instruments, assets 60 60 — 27 33 Liabilities Retail deposits Demand deposits and savings accounts $ (5,243 ) $ (4,845 ) $ — $ (4,845 ) $ — Certificates of deposit (1,297 ) (1,304 ) — (1,304 ) — Wholesale deposits (43 ) (43 ) — (43 ) — Government deposits (1,068 ) (1,045 ) — (1,045 ) — Company controlled deposits (1,510 ) (1,473 ) — (1,473 ) — Federal Home Loan Bank advances (5,365 ) (5,252 ) — (5,252 ) — Long-term debt (493 ) (382 ) — (382 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (26 ) (26 ) — — (26 ) Derivative financial instruments, liabilities (10 ) (10 ) (3 ) (6 ) (1 ) December 31, 2016 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 158 $ 158 $ 158 $ — $ — Investment securities available-for-sale 1,480 1,480 — 1,480 — Investment securities held-to-maturity 1,093 1,084 — 1,084 — Loans held-for-sale 3,177 3,178 — 3,178 — Loans held-for-investment 6,065 5,998 — 7 5,991 Loans with government guarantees 365 354 — 354 — Mortgage servicing rights 335 335 — — 335 Federal Home Loan Bank stock 180 180 — 180 — Bank owned life insurance 271 271 — 271 — Repossessed assets 14 14 — — 14 Other assets, foreclosure claims 135 135 — 135 — Derivative financial instruments, assets 123 123 45 54 24 Liabilities Retail deposits Demand deposits and savings accounts $ (5,268 ) $ (4,956 ) $ — $ (4,956 ) $ — Certificates of deposit (1,056 ) (1,062 ) — (1,062 ) — Government deposits (1,030 ) (1,011 ) — (1,011 ) — Company controlled deposits (1,446 ) (1,371 ) — (1,371 ) — Federal Home Loan Bank advances (2,980 ) (2,964 ) — (2,964 ) — Long-term debt (493 ) (277 ) — (277 ) — Warrant liabilities (4 ) (4 ) — (4 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Derivative financial instruments, liabilities (54 ) (54 ) (11 ) (37 ) (6 ) |
Schedule of Changes in Fair Value Included in Earnings | The following table reflects the change in fair value included in earnings of financial instruments for which the fair value option has been elected: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 92 $ 151 $ 260 $ 440 Loans held-for-investment Other noninterest income $ — $ — $ 1 $ (2 ) Liabilities Other noninterest income $ — $ 24 $ — $ 24 |
Fair Value, Option, Quantitative Disclosures | The following table reflects the difference between the aggregate fair value and aggregate remaining contractual principal balance outstanding for assets and liabilities for which the fair value option has been elected: September 30, 2017 December 31, 2016 Unpaid Principal Balance Fair Value Fair Value Over / (Under) Unpaid Principal Balance Unpaid Principal Balance Fair Value Fair Value Over / (Under) Unpaid Principal Balance (Dollars in millions) Assets Nonaccrual loans Loans held-for-sale $ 4 $ 4 $ — $ 2 $ 2 $ — Loans held-for-investment 6 4 (2 ) 19 13 (6 ) Total nonaccrual loans $ 10 $ 8 $ (2 ) $ 21 $ 15 $ (6 ) Other performing loans Loans held-for-sale $ 4,742 $ 4,903 $ 161 $ 3,103 $ 3,143 $ 40 Loans held-for-investment 11 9 (2 ) 72 59 (13 ) Total other performing loans $ 4,753 $ 4,912 $ 159 $ 3,175 $ 3,202 $ 27 Total loans Loans held-for-sale $ 4,746 $ 4,907 $ 161 $ 3,105 $ 3,145 $ 40 Loans held-for-investment 17 13 (4 ) 91 72 (19 ) Total loans $ 4,763 $ 4,920 $ 157 $ 3,196 $ 3,217 $ 21 Liabilities Litigation settlement (1) $ (118 ) $ (60 ) $ 58 $ (118 ) $ (60 ) $ 58 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 17 - Legal Proceedings, Contingencies and Commitments. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present financial information by business segment for the periods indicated: Three Months Ended September 30, 2017 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 63 $ 34 $ 7 $ (1 ) $ 103 Net gain (loss) on loan sales (4 ) 79 — — 75 Representation and warranty benefit — 4 — — 4 Other noninterest income 9 23 11 8 51 Total net interest income and noninterest income 68 140 18 7 233 (Provision) benefit for loan losses (1 ) (1 ) — — (2 ) Depreciation and amortization expense (2 ) (2 ) (1 ) (5 ) (10 ) Other noninterest expense (49 ) (90 ) (22 ) — (161 ) Total noninterest expense (51 ) (92 ) (23 ) (5 ) (171 ) Income (loss) before income taxes 16 47 (5 ) 2 60 Provision (benefit) for income taxes 6 16 (1 ) (1 ) 20 Net income (loss) $ 10 $ 31 $ (4 ) $ 3 $ 40 Intersegment revenue $ (4 ) $ 2 $ 5 $ (3 ) $ — Average balances Loans held-for-sale $ 14 $ 4,462 $ — $ — $ 4,476 Loans with government guarantees — 264 — — 264 Loans held-for-investment 6,764 10 — 29 6,803 Total assets 6,843 5,743 30 3,823 16,439 Deposits 7,498 — 1,507 — 9,005 Three Months Ended September 30, 2016 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 54 $ 24 $ 7 $ (5 ) $ 80 Net gain (loss) on loan sales (1 ) 95 — — 94 Representation and warranty benefit — 6 — — 6 Other noninterest income 8 4 13 31 56 Total net interest income and noninterest income 61 129 20 26 236 (Provision) for loan losses (7 ) — — — (7 ) Depreciation and amortization expense (1 ) (2 ) — (5 ) (8 ) Other noninterest expense (43 ) (66 ) (25 ) — (134 ) Total noninterest expense (44 ) (68 ) (25 ) (5 ) (142 ) Income (loss) before income taxes 10 61 (5 ) 21 87 Provision (benefit) for income taxes 3 22 (2 ) 7 30 Net income (loss) $ 7 $ 39 $ (3 ) $ 14 $ 57 Intersegment revenue $ (1 ) $ (1 ) $ 6 $ (4 ) $ — Average balances Loans held-for-sale $ 16 $ 3,400 $ — $ — $ 3,416 Loans with government guarantees — 432 — — 432 Loans held-for-investment 5,843 5 — — 5,848 Total assets 5,904 4,835 26 3,383 14,148 Deposits 7,273 — 1,853 — 9,126 Nine Months Ended September 30, 2017 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 171 $ 96 $ 16 $ — $ 283 Net gain (loss) on loan sales (7 ) 196 — — 189 Representation and warranty benefit — 11 — — 11 Other noninterest income 23 66 40 17 146 Total net interest income and noninterest income 187 369 56 17 629 (Provision) benefit for loan losses (3 ) (3 ) — 2 (4 ) Depreciation and amortization expense (6 ) (5 ) (3 ) (14 ) (28 ) Other noninterest expense (138 ) (227 ) (71 ) (1 ) (437 ) Total noninterest expense (144 ) (232 ) (74 ) (15 ) (465 ) Income (loss) before income taxes 40 134 (18 ) 4 160 Provision (benefit) for income taxes 14 47 (6 ) (3 ) 52 Net income (loss) $ 26 $ 87 $ (12 ) $ 7 $ 108 Intersegment revenue $ (5 ) $ 3 $ 14 $ (12 ) $ — Average balances Loans held-for-sale $ 16 $ 3,998 $ — $ — $ 4,014 Loans with government guarantees — 300 — — 300 Loans held-for-investment 6,191 7 — 29 6,227 Total assets 6,262 5,307 36 3,801 15,406 Deposits 7,438 — 1,409 — 8,847 Nine Months Ended September 30, 2016 Community Banking Mortgage Originations Mortgage Servicing Other Total (Dollars in millions) Summary of Operations Net interest income $ 150 $ 67 $ 17 $ 2 $ 236 Net gain (loss) on loan sales 8 251 — — 259 Representation and warranty benefit — 12 — — 12 Other noninterest income 21 15 41 41 118 Total net interest income and noninterest income 179 345 58 43 625 (Provision) benefit for loan losses 9 — — — 9 Depreciation and amortization expense (5 ) (4 ) (2 ) (12 ) (23 ) Other noninterest expense (131 ) (188 ) (70 ) (6 ) (395 ) Total noninterest expense (136 ) (192 ) (72 ) (18 ) (418 ) Income (loss) before income taxes 52 153 (14 ) 25 216 Provision (benefit) for income taxes 18 54 (5 ) 6 73 Net income (loss) $ 34 $ 99 $ (9 ) $ 19 $ 143 Intersegment revenue $ (2 ) $ (1 ) $ 18 $ (15 ) $ — Average balances Loans held-for-sale $ 83 $ 2,988 $ — $ — $ 3,071 Loans with government guarantees — 450 — — 450 Loans held-for-investment 5,689 6 — — 5,695 Total assets 5,798 4,328 36 3,549 13,711 Deposits 7,080 — 1,523 — 8,603 |
Recently Issued Accounting Pr43
Recently Issued Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following ASUs have been issued and are not expected to have a material impact on our Consolidated Financial Statements and/or significant accounting policies: Standard Description Effective Date ASU 2017-11 Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope. January 1, 2019 ASU 2017-10 Service Concession Arrangements (Topic 853): Determining the Customer of the Operation Services (a consensus of the FASB Emerging Issues Task Force) January 1, 2018 ASU 2017-09 Update 2017-09—Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting January 1, 2018 ASU 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities January 1, 2019 ASU 2017-07 Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost January 1, 2018 ASU 2017-06 Plan Accounting - Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting January 1, 2019 ASU 2017-05 Other Income - Gains and Losses from the De-recognition of Non-financial Assets (Subtopic 610-20): Clarifying the Scope of Asset De-recognition Guidance and Accounting for Partial Sales of Non-financial Assets January 1, 2018 ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 ASU 2017-01 Business Combinations (Topic 805): Clarifying the Definition of a Business January 1, 2018 ASU 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash January 1, 2018 ASU 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory January 1, 2018 ASU 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments January 1, 2018 ASU 2016-04 Liabilities - Extinguishment of Liabilities (Subtopic 504-20): Recognition of Breakage for Certain Prepaid Stored-Value Products January 1, 2018 ASU 2016-01 Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities January 1, 2018 We adopted the following accounting standard updates (ASU) during 2017 , none of which had a material impact to our financial statements: Standard Description Effective Date ASU 2016-17 Consolidation (Topic 810): Interests Held Through Related Parties That are Under Common Control January 1, 2017 ASU 2016-09 Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting January 1, 2017 ASU 2016-07 Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting January 1, 2017 ASU 2016-06 Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments January 1, 2017 ASU 2016-05 Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Relationships January 1, 2017 |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Investment securities | |||||
Amortized Cost | $ 1,650,000,000 | $ 1,650,000,000 | $ 1,498,000,000 | ||
Gross Unrealized Gains | 4,000,000 | 4,000,000 | 3,000,000 | ||
Gross Unrealized Losses | (17,000,000) | (17,000,000) | (21,000,000) | ||
Fair Value | 1,637,000,000 | 1,637,000,000 | 1,480,000,000 | ||
Held-to-maturity Securities [Abstract] | |||||
Amortized Cost | 977,000,000 | 977,000,000 | 1,093,000,000 | ||
Gross Unrealized Gains | 1,000,000 | 1,000,000 | 1,000,000 | ||
Gross Unrealized Losses | (7,000,000) | (7,000,000) | (10,000,000) | ||
Fair Value | 971,000,000 | 971,000,000 | 1,084,000,000 | ||
Other than temporary impairments | 0 | $ 0 | 0 | $ 0 | |
Agency - Commercial | |||||
Held-to-maturity Securities [Abstract] | |||||
Amortized Cost | 542,000,000 | 542,000,000 | 595,000,000 | ||
Gross Unrealized Gains | 1,000,000 | 1,000,000 | 0 | ||
Gross Unrealized Losses | (5,000,000) | (5,000,000) | (6,000,000) | ||
Fair Value | 538,000,000 | 538,000,000 | 589,000,000 | ||
Agency - Residential | |||||
Held-to-maturity Securities [Abstract] | |||||
Amortized Cost | 435,000,000 | 435,000,000 | 498,000,000 | ||
Gross Unrealized Gains | 0 | 0 | 1,000,000 | ||
Gross Unrealized Losses | (2,000,000) | (2,000,000) | (4,000,000) | ||
Fair Value | 433,000,000 | 433,000,000 | 495,000,000 | ||
Agency - Commercial | |||||
Investment securities | |||||
Amortized Cost | 755,000,000 | 755,000,000 | 551,000,000 | ||
Gross Unrealized Gains | 1,000,000 | 1,000,000 | 2,000,000 | ||
Gross Unrealized Losses | (6,000,000) | (6,000,000) | (5,000,000) | ||
Fair Value | 750,000,000 | 750,000,000 | 548,000,000 | ||
Agency - Residential | |||||
Investment securities | |||||
Amortized Cost | 818,000,000 | 818,000,000 | 913,000,000 | ||
Gross Unrealized Gains | 2,000,000 | 2,000,000 | 1,000,000 | ||
Gross Unrealized Losses | (11,000,000) | (11,000,000) | (16,000,000) | ||
Fair Value | 809,000,000 | 809,000,000 | 898,000,000 | ||
Corporate debt obligations | |||||
Investment securities | |||||
Amortized Cost | 33,000,000 | 33,000,000 | |||
Gross Unrealized Gains | 1,000,000 | 1,000,000 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | 34,000,000 | 34,000,000 | |||
Municipal obligations | |||||
Investment securities | |||||
Amortized Cost | 44,000,000 | 44,000,000 | 34,000,000 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | $ 44,000,000 | $ 44,000,000 | $ 34,000,000 |
Investment Securities (Availabl
Investment Securities (Available-for-sale and Held-to-maturity Securities, Unrealized Losses) (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)security | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Purchase of investment securities available-for-sale | $ 593,000,000 | $ 203,000,000 | |||
Purchase of investment securities HTM | $ 0 | $ 0 | 0 | 15,000,000 | |
Proceeds from sale of held-to-maturity securities | 0 | 0 | 0 | 0 | |
Available-for-sale Securities Pledged as Collateral | 1,300,000,000 | 1,300,000,000 | $ 879,000,000 | ||
Agency - Commercial | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 16,000,000 | $ 16,000,000 | $ 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Positions | security | 2 | 2 | 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months or Over, Unrealized Loss | $ 0 | $ 0 | $ 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 395,000,000 | $ 395,000,000 | $ 528,000,000 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Positions | security | 26 | 26 | 34 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (5,000,000) | $ (5,000,000) | $ (6,000,000) | ||
Agency - Residential | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 16,000,000 | $ 16,000,000 | $ 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Positions | security | 2 | 2 | 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months or Over, Unrealized Loss | $ 0 | $ 0 | $ 0 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 319,000,000 | $ 319,000,000 | $ 385,000,000 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Positions | security | 40 | 40 | 43 | ||
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (2,000,000) | $ (2,000,000) | $ (4,000,000) | ||
US Government-sponsored Enterprises Debt Securities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Purchase of investment securities available-for-sale | 300,000,000 | 136,000,000 | 600,000,000 | 203,000,000 | |
Sales of AFS securities | 227,000,000 | 115,000,000 | 289,000,000 | 290,000,000 | |
Gain on sales of AFS securities | 2,000,000 | $ 3,000,000 | 3,000,000 | $ 4,000,000 | |
Agency - Commercial | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 34,000,000 | $ 34,000,000 | $ 6,000,000 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 3 | 3 | 1 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (1,000,000) | $ (1,000,000) | $ 0 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 582,000,000 | $ 582,000,000 | $ 345,000,000 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 40 | 40 | 29 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | ||
Agency - Residential | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 98,000,000 | $ 98,000,000 | $ 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 10 | 10 | 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (3,000,000) | $ (3,000,000) | $ 0 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 501,000,000 | $ 501,000,000 | $ 748,000,000 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 40 | 40 | 55 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (8,000,000) | $ (8,000,000) | $ (16,000,000) | ||
Municipal obligations | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 1,000,000 | $ 1,000,000 | $ 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 1 | 1 | 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ 0 | $ 0 | $ 0 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 21,000,000 | $ 21,000,000 | $ 17,000,000 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 8 | 8 | 8 | ||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ 0 | $ 0 | $ 0 | ||
Corporate debt obligations | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 0 | $ 0 | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 0 | 0 | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ 0 | $ 0 | |||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 3,000,000 | $ 3,000,000 | |||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 1 | 1 | |||
Available-for-Sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ 0 | $ 0 |
Investment Securities (Contract
Investment Securities (Contractual Maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Investment Securities Available-for-Sale, Amortized Cost | ||
Due after one year through five years, amortized cost | $ 17 | |
Due after five years through 10 years, amortized cost | 44 | |
Due after 10 years, amortized cost | 1,589 | |
Total, amortized cost | 1,650 | |
Investment Securities Available-for-Sale, Estimated Fair Value | ||
Due after one year through five years, fair value | 17 | |
Due after five years through 10 years, fair value | 45 | |
Due after 10 years, fair value | 1,575 | |
Fair Value | $ 1,637 | $ 1,480 |
Investment Securities Available-for-Sale, Weighted-Average Yield | ||
Due after one year through five years, weighted average yield (as a percent) | 3.37% | |
Due after five years through 10 years, weighted average yield (as a percent) | 4.83% | |
Due after 10 years, weighted average yield (as a percent) | 2.34% | |
Investment Securities Held-to-maturity, Amortized cost | ||
Due after one year through five years, amortized cost | $ 0 | |
Due after five years through 10 years, amortized cost | 61 | |
Due after 10 years, amortized cost | 916 | |
Amortized Cost | 977 | 1,093 |
Investment Securities Held-to-maturity, Estimated Fair Value | ||
Due after one year through five years, fair value | 0 | |
Due after five years through 10 years, fair value | 61 | |
Due after 10 years, fair value | 910 | |
Fair Value | $ 971 | $ 1,084 |
Investment Securities Held-to-maturity, Weighted-Average Yield | ||
Due after one year through five years, weighted average yield (as a percent) | 0.00% | |
Due after five years through 10 years, weighted average yield (as a percent) | 2.50% | |
Due after 10 years, weighted average yield (as a percent) | 2.43% |
Loans Held-for-Sale (Details)
Loans Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans held-for-sale | $ 4,939 | $ 4,939 | $ 3,177 | ||
Net gain (loss) on loan sales | 75 | $ 94 | 189 | $ 259 | |
Loans held-for-sale, other | 32 | 32 | 32 | ||
Loans held-for-sale | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Net gain (loss) on loan sales | 75 | $ 94 | 189 | $ 244 | |
Consumer loans | Residential first mortgage loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans held-for-sale | $ 4,900 | $ 4,900 | $ 3,200 |
Loans Held-for-Investment (Deta
Loans Held-for-Investment (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | $ 7,203 | $ 6,065 |
Residential first mortgage loans | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 2,665 | 2,327 |
Home equity | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 496 | 443 |
Other | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 26 | 28 |
Consumer loans | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 3,187 | 2,798 |
Commercial real estate | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 1,760 | 1,261 |
Commercial real estate | Commercial Borrower | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 270 | 245 |
Commercial and industrial | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 1,097 | 769 |
Warehouse lending | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | 1,159 | 1,237 |
Commercial loans | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Total Investment Loans | $ 4,016 | $ 3,267 |
Loans Held-for-Investment (Narr
Loans Held-for-Investment (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Charge-offs | $ 3,000,000 | $ 9,000,000 | $ 10,000,000 | $ 33,000,000 | |
Provision for doubtful accounts | 2,000,000 | 0 | 4,000,000 | (16,000,000) | |
Accrued interest on nonaccrual loans | 0 | 1,000,000 | 1,000,000 | 2,000,000 | |
Loans held-for-investment | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Loans pledged as collateral | 7,700,000,000 | 7,700,000,000 | $ 5,300,000,000 | ||
Government Guarantees | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Provision for doubtful accounts | 7,000,000 | ||||
Residential first mortgage loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Charge-offs related to sale of loans | 103,000,000 | 1,300,000,000 | |||
Significant purchases | 6,000,000 | 150,000,000 | |||
Premium paid on significant purchases | 1,000,000 | ||||
Charge-offs | 0 | 0 | 1,000,000 | 8,000,000 | |
Residential first mortgage loans | Nonperforming | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Charge-offs related to sale of loans | 25,000,000 | 110,000,000 | |||
Net gain on sale of assets | 1,000,000 | 12,000,000 | |||
HELOC loans | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Significant purchases | 100,000,000 | ||||
Premium paid on significant purchases | 4,000,000 | ||||
Loans Insured or Guaranteed by US Government Authorities | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Charge-offs | $ 1,000,000 | $ 6,000,000 | $ 3,000,000 | $ 13,000,000 |
Loans Held-for-Investment (Allo
Loans Held-for-Investment (Allowance for Loan Losses Rollforward) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | $ 140,000,000 | $ 150,000,000 | $ 142,000,000 | $ 187,000,000 |
Charge-offs | (3,000,000) | (9,000,000) | (10,000,000) | (33,000,000) |
Recoveries | 1,000,000 | 2,000,000 | 4,000,000 | 5,000,000 |
Provision (benefit) | 2,000,000 | 0 | 4,000,000 | (16,000,000) |
Ending balance ALLL | 140,000,000 | 143,000,000 | 140,000,000 | 143,000,000 |
Residential first mortgage | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Charge-offs | 0 | 0 | (1,000,000) | (8,000,000) |
Loans Insured or Guaranteed by US Government Authorities | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Charge-offs | (1,000,000) | (6,000,000) | (3,000,000) | (13,000,000) |
Residential first mortgage | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 56,000,000 | 81,000,000 | 65,000,000 | 116,000,000 |
Charge-offs | (1,000,000) | (7,000,000) | (6,000,000) | (26,000,000) |
Recoveries | 0 | 0 | 1,000,000 | 1,000,000 |
Provision (benefit) | (3,000,000) | (4,000,000) | (8,000,000) | (21,000,000) |
Ending balance ALLL | 52,000,000 | 70,000,000 | 52,000,000 | 70,000,000 |
Home equity | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 19,000,000 | 30,000,000 | 24,000,000 | 32,000,000 |
Charge-offs | (2,000,000) | (1,000,000) | (3,000,000) | (4,000,000) |
Recoveries | 1,000,000 | 1,000,000 | 2,000,000 | 2,000,000 |
Provision (benefit) | 2,000,000 | (5,000,000) | (3,000,000) | (5,000,000) |
Ending balance ALLL | 20,000,000 | 25,000,000 | 20,000,000 | 25,000,000 |
Other Consumer | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 1,000,000 | 1,000,000 | 1,000,000 | 2,000,000 |
Charge-offs | 0 | (1,000,000) | (1,000,000) | (3,000,000) |
Recoveries | 0 | 1,000,000 | 1,000,000 | 2,000,000 |
Provision (benefit) | 0 | 0 | 0 | 0 |
Ending balance ALLL | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Commercial real estate | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 37,000,000 | 19,000,000 | 28,000,000 | 18,000,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision (benefit) | 5,000,000 | 6,000,000 | 14,000,000 | 7,000,000 |
Ending balance ALLL | 42,000,000 | 25,000,000 | 42,000,000 | 25,000,000 |
Commercial and industrial | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 21,000,000 | 11,000,000 | 17,000,000 | 13,000,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision (benefit) | (2,000,000) | 3,000,000 | 2,000,000 | 1,000,000 |
Ending balance ALLL | 19,000,000 | 14,000,000 | 19,000,000 | 14,000,000 |
Warehouse lending | ||||
Allowance for Loan Losses [Roll Forward] | ||||
Beginning balance ALLL | 6,000,000 | 8,000,000 | 7,000,000 | 6,000,000 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision (benefit) | 0 | 0 | (1,000,000) | 2,000,000 |
Ending balance ALLL | $ 6,000,000 | $ 8,000,000 | $ 6,000,000 | $ 8,000,000 |
Loans Held-for-Investment (Al51
Loans Held-for-Investment (Allowance Additional Disclosure) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | $ 65 | $ 75 | ||||
Collectively evaluated | 7,125 | 5,918 | ||||
Total loans | 7,190 | 5,993 | ||||
Individually evaluated | 15 | 13 | ||||
Collectively evaluated | 125 | 129 | ||||
Total allowance for loan losses | 140 | $ 140 | 142 | $ 143 | $ 150 | $ 187 |
Residential first mortgage | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 35 | 46 | ||||
Collectively evaluated | 2,621 | 2,274 | ||||
Total loans | 2,656 | 2,320 | ||||
Individually evaluated | 6 | 5 | ||||
Collectively evaluated | 46 | 60 | ||||
Total allowance for loan losses | 52 | 56 | 65 | 70 | 81 | 116 |
Home equity | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 29 | 29 | ||||
Collectively evaluated | 463 | 349 | ||||
Total loans | 492 | 378 | ||||
Individually evaluated | 9 | 8 | ||||
Collectively evaluated | 11 | 16 | ||||
Total allowance for loan losses | 20 | 19 | 24 | 25 | 30 | 32 |
Other Consumer | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 26 | 28 | ||||
Total loans | 26 | 28 | ||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 1 | 1 | ||||
Total allowance for loan losses | 1 | 1 | 1 | 1 | 1 | 2 |
Commercial real estate | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 1 | 0 | ||||
Collectively evaluated | 1,759 | 1,261 | ||||
Total loans | 1,760 | 1,261 | ||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 42 | 28 | ||||
Total allowance for loan losses | 42 | 37 | 28 | 25 | 19 | 18 |
Commercial and industrial | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 1,097 | 769 | ||||
Total loans | 1,097 | 769 | ||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 19 | 17 | ||||
Total allowance for loan losses | 19 | 21 | 17 | 14 | 11 | 13 |
Warehouse lending | ||||||
Allowance for Loan Losses [Line Items] | ||||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 1,159 | 1,237 | ||||
Total loans | 1,159 | 1,237 | ||||
Individually evaluated | 0 | 0 | ||||
Collectively evaluated | 6 | 7 | ||||
Total allowance for loan losses | $ 6 | $ 6 | $ 7 | $ 8 | $ 8 | $ 6 |
Loans Held-for-Investment (Past
Loans Held-for-Investment (Past Due Loans) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Loans, Aging [Abstract] | |||||
Total Past Due | $ 36,000,000 | $ 36,000,000 | $ 50,000,000 | ||
Current | 7,167,000,000 | 7,167,000,000 | 6,015,000,000 | ||
Total LHFI | 7,203,000,000 | 7,203,000,000 | 6,065,000,000 | ||
Loans greater than 90 days past due accounted for under the fair value option | 4,000,000 | 4,000,000 | 13,000,000 | ||
Accrued interest on nonaccrual loans | 0 | $ 1,000,000 | 1,000,000 | $ 2,000,000 | |
90 Days and Still Accruing | 0 | 0 | 0 | ||
Residential first mortgage | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 28,000,000 | 28,000,000 | 35,000,000 | ||
Current | 2,637,000,000 | 2,637,000,000 | 2,292,000,000 | ||
Total LHFI | 2,665,000,000 | 2,665,000,000 | 2,327,000,000 | ||
Home equity | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 7,000,000 | 7,000,000 | 14,000,000 | ||
Current | 489,000,000 | 489,000,000 | 429,000,000 | ||
Total LHFI | 496,000,000 | 496,000,000 | 443,000,000 | ||
Other | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 1,000,000 | ||
Current | 26,000,000 | 26,000,000 | 27,000,000 | ||
Total LHFI | 26,000,000 | 26,000,000 | 28,000,000 | ||
Consumer loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 35,000,000 | 35,000,000 | 50,000,000 | ||
Current | 3,152,000,000 | 3,152,000,000 | 2,748,000,000 | ||
Total LHFI | 3,187,000,000 | 3,187,000,000 | 2,798,000,000 | ||
Commercial real estate | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 0 | ||
Current | 1,759,000,000 | 1,759,000,000 | 1,261,000,000 | ||
Total LHFI | 1,760,000,000 | 1,760,000,000 | 1,261,000,000 | ||
Commercial and industrial | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
Current | 1,097,000,000 | 1,097,000,000 | 769,000,000 | ||
Total LHFI | 1,097,000,000 | 1,097,000,000 | 769,000,000 | ||
Warehouse lending | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
Current | 1,159,000,000 | 1,159,000,000 | 1,237,000,000 | ||
Total LHFI | 1,159,000,000 | 1,159,000,000 | 1,237,000,000 | ||
Commercial loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 0 | ||
Current | 4,015,000,000 | 4,015,000,000 | 3,267,000,000 | ||
Total LHFI | 4,016,000,000 | 4,016,000,000 | 3,267,000,000 | ||
30-59 Days Past Due | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 4,000,000 | 4,000,000 | 8,000,000 | ||
30-59 Days Past Due | Residential first mortgage | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 3,000,000 | 3,000,000 | 6,000,000 | ||
30-59 Days Past Due | Home equity | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 1,000,000 | ||
30-59 Days Past Due | Other | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 1,000,000 | ||
30-59 Days Past Due | Consumer loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 4,000,000 | 4,000,000 | 8,000,000 | ||
30-59 Days Past Due | Commercial real estate | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
30-59 Days Past Due | Commercial and industrial | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
30-59 Days Past Due | Warehouse lending | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
30-59 Days Past Due | Commercial loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
60-89 Days Past Due | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 2,000,000 | ||
60-89 Days Past Due | Residential first mortgage | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 0 | ||
60-89 Days Past Due | Home equity | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 2,000,000 | ||
60-89 Days Past Due | Other | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
60-89 Days Past Due | Consumer loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 2,000,000 | ||
60-89 Days Past Due | Commercial real estate | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
60-89 Days Past Due | Commercial and industrial | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
60-89 Days Past Due | Warehouse lending | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
60-89 Days Past Due | Commercial loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
90 Days or Greater Past Due | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 31,000,000 | 31,000,000 | 40,000,000 | ||
90 Days or Greater Past Due | Residential first mortgage | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 24,000,000 | 24,000,000 | 29,000,000 | ||
90 Days or Greater Past Due | Home equity | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 6,000,000 | 6,000,000 | 11,000,000 | ||
90 Days or Greater Past Due | Other | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
90 Days or Greater Past Due | Consumer loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 30,000,000 | 30,000,000 | 40,000,000 | ||
90 Days or Greater Past Due | Commercial real estate | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 1,000,000 | 1,000,000 | 0 | ||
90 Days or Greater Past Due | Commercial and industrial | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
90 Days or Greater Past Due | Warehouse lending | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | 0 | 0 | 0 | ||
90 Days or Greater Past Due | Commercial loans | |||||
Loans, Aging [Abstract] | |||||
Total Past Due | $ 1,000,000 | $ 1,000,000 | $ 0 |
Loans Held-for-Investment (Trou
Loans Held-for-Investment (Troubled Debt Restructurings) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | $ 61 | $ 85 |
Allowance for loan losses on TDR loans | 12 | 9 |
TDR loans under fair value option | 3 | 25 |
Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 31 | 33 |
Consumer loans | Home equity | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 30 | 52 |
Performing | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 46 | 67 |
Performing | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 20 | 22 |
Performing | Consumer loans | Home equity | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 26 | 45 |
Nonperforming | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 15 | 18 |
Nonperforming | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | 11 | 11 |
Nonperforming | Consumer loans | Home equity | ||
Troubled Debt Restructurings [Line Items] | ||
TDR Balance | $ 4 | $ 7 |
Loans Held-for-Investment (Tr54
Loans Held-for-Investment (Troubled Debt Restructuring, New ) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)loan | Sep. 30, 2016USD ($)loan | Sep. 30, 2017USD ($)loan | Sep. 30, 2016USD ($)loan | |
Troubled Debt Restructurings [Line Items] | ||||
Number of Accounts | loan | 46 | 18 | 89 | 146 |
Pre-Modification Unpaid Principal Balance | $ 5 | $ 1 | $ 9 | $ 13 |
Post-Modification Unpaid Principal Balance | 5 | 1 | 9 | 12 |
Increase in Allowance at Modification | $ 1 | $ 0 | $ 2 | $ 0 |
Residential first mortgage | ||||
Troubled Debt Restructurings [Line Items] | ||||
Number of Accounts | loan | 9 | 1 | 17 | 17 |
Pre-Modification Unpaid Principal Balance | $ 3 | $ 0 | $ 4 | $ 3 |
Post-Modification Unpaid Principal Balance | 3 | 0 | 4 | 4 |
Increase in Allowance at Modification | $ 0 | 0 | $ 0 | $ 0 |
Number of loans modified in previous 12 months that have defaulted | loan | 1 | 1 | 1 | |
Modifications subsequent to default | $ 1 | $ 1 | $ 1 | $ 1 |
Home equity | ||||
Troubled Debt Restructurings [Line Items] | ||||
Number of Accounts | loan | 37 | 17 | 71 | 128 |
Pre-Modification Unpaid Principal Balance | $ 2 | $ 1 | $ 5 | $ 8 |
Post-Modification Unpaid Principal Balance | 2 | 1 | 5 | 7 |
Increase in Allowance at Modification | $ 1 | $ 0 | $ 2 | $ 0 |
Number of loans modified in previous 12 months that have defaulted | loan | 3 | 7 | ||
Consumer loans | ||||
Troubled Debt Restructurings [Line Items] | ||||
Number of Accounts | loan | 0 | 1 | ||
Pre-Modification Unpaid Principal Balance | $ 0 | $ 0 | ||
Post-Modification Unpaid Principal Balance | 0 | 0 | ||
Increase in Allowance at Modification | $ 0 | $ 0 | ||
Commercial and industrial | ||||
Troubled Debt Restructurings [Line Items] | ||||
Number of Accounts | loan | 1 | |||
Pre-Modification Unpaid Principal Balance | $ 2 | |||
Post-Modification Unpaid Principal Balance | 1 | |||
Increase in Allowance at Modification | $ 0 |
Loans Held-for-Investment (Impa
Loans Held-for-Investment (Impaired Loans) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Impaired Loans [Line Items] | |||||
With no related allowance recorded, Recorded Investment | $ 15 | $ 15 | $ 6 | ||
With no related allowance recorded, unpaid principal balance | 15 | 15 | 6 | ||
With an allowance recorded, recorded investment | 49 | 49 | 69 | ||
With an allowance recorded, unpaid principal balance | 50 | 50 | 69 | ||
With an allowance recorded, related allowance | 15 | 15 | 13 | ||
Total recorded investment | 64 | 64 | 75 | ||
Total unpaid principal balance | 65 | 65 | 75 | ||
Average Recorded Investment | 66 | $ 74 | 67 | $ 88 | |
Interest Income Recognized | 1 | 0 | 2 | 2 | |
Residential first mortgage | |||||
Impaired Loans [Line Items] | |||||
With no related allowance recorded, Recorded Investment | 15 | 15 | 6 | ||
With no related allowance recorded, unpaid principal balance | 15 | 15 | 6 | ||
With an allowance recorded, recorded investment | 20 | 20 | 40 | ||
With an allowance recorded, unpaid principal balance | 20 | 20 | 40 | ||
With an allowance recorded, related allowance | 6 | 6 | 5 | ||
Total recorded investment | 35 | 35 | 46 | ||
Total unpaid principal balance | 35 | 35 | 46 | ||
Average Recorded Investment | 37 | 43 | 39 | 55 | |
Interest Income Recognized | 1 | 0 | 1 | 1 | |
Home equity | |||||
Impaired Loans [Line Items] | |||||
With an allowance recorded, recorded investment | 28 | 28 | 29 | ||
With an allowance recorded, unpaid principal balance | 29 | 29 | 29 | ||
With an allowance recorded, related allowance | 9 | 9 | 8 | ||
Total recorded investment | 28 | 28 | 29 | ||
Total unpaid principal balance | 29 | 29 | 29 | ||
Average Recorded Investment | 28 | 30 | 28 | 31 | |
Interest Income Recognized | 0 | 0 | 1 | 1 | |
Commercial real estate | |||||
Impaired Loans [Line Items] | |||||
With an allowance recorded, recorded investment | 1 | 1 | 0 | ||
With an allowance recorded, unpaid principal balance | 1 | 1 | 0 | ||
With an allowance recorded, related allowance | 0 | 0 | 0 | ||
Total recorded investment | 1 | 1 | 0 | ||
Total unpaid principal balance | 1 | 1 | $ 0 | ||
Average Recorded Investment | 1 | 0 | 0 | 0 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | |
Commercial and industrial | |||||
Impaired Loans [Line Items] | |||||
Average Recorded Investment | 0 | 1 | 0 | 2 | |
Interest Income Recognized | $ 0 | $ 0 | $ 0 | $ 0 |
Loans Held-for-Investment (Cred
Loans Held-for-Investment (Credit Quality Indicators) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | $ 7,190 | $ 5,993 |
Total loans | 7,203 | 6,065 |
Residential first mortgage | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 2,656 | 2,320 |
Total loans | 2,665 | 2,327 |
Home equity | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 492 | 378 |
Total loans | 496 | 443 |
Other Consumer | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 26 | 28 |
Total loans | 26 | 28 |
Consumer loans | ||
Loans held-for-investment [Line Items] | ||
Total loans | 3,187 | 2,798 |
Commercial real estate | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,760 | 1,261 |
Total loans | 1,760 | 1,261 |
Commercial and industrial | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,097 | 769 |
Total loans | 1,097 | 769 |
Warehouse lending | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,159 | 1,237 |
Total loans | 1,159 | 1,237 |
Commercial loans | ||
Loans held-for-investment [Line Items] | ||
Total loans | 4,016 | 3,267 |
Pass | Residential first mortgage | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 2,614 | 2,273 |
Pass | Home equity | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 465 | 386 |
Pass | Other Consumer | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 26 | 28 |
Pass | Consumer loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 3,105 | 2,687 |
Pass | Commercial real estate | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,727 | 1,225 |
Pass | Commercial and industrial | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,003 | 678 |
Pass | Warehouse lending | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 1,119 | 1,168 |
Pass | Commercial loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 3,849 | 3,071 |
Watch | Residential first mortgage | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 24 | 23 |
Watch | Home equity | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 26 | 46 |
Watch | Other Consumer | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Watch | Consumer loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 50 | 69 |
Watch | Commercial real estate | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 30 | 27 |
Watch | Commercial and industrial | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 82 | 59 |
Watch | Warehouse lending | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 40 | 16 |
Watch | Commercial loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 152 | 102 |
Special Mention | Residential first mortgage | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Special Mention | Home equity | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Special Mention | Other Consumer | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Special Mention | Consumer loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Special Mention | Commercial real estate | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 3 |
Special Mention | Commercial and industrial | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 21 |
Special Mention | Warehouse lending | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 53 |
Special Mention | Commercial loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 77 |
Substandard | Residential first mortgage | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 27 | 31 |
Substandard | Home equity | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 5 | 11 |
Substandard | Other Consumer | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Substandard | Consumer loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 32 | 42 |
Substandard | Commercial real estate | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 3 | 6 |
Substandard | Commercial and industrial | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 12 | 11 |
Substandard | Warehouse lending | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | 0 | 0 |
Substandard | Commercial loans | ||
Loans held-for-investment [Line Items] | ||
Loans held-for-investment | $ 15 | $ 17 |
Loans with Government Guarant57
Loans with Government Guarantees (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Loans and Leases Receivable Disclosure [Abstract] | ||
Debt instrument, term (in years) | 10 years | |
Loans with government guarantees | $ 253 | $ 365 |
Repossessed assets and associated claims | $ 92 | $ 135 |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)loanentity | Dec. 31, 2016USD ($)loanentity | |
Private-label Securitizations [Line Items] | ||
Number of VIEs | 0 | 0 |
FSTAR 2007-1 Mortgage Securitization | ||
Private-label Securitizations [Line Items] | ||
Number of VIEs | 1 | |
Number of mortgage securitization trust loans | loan | 2,035 | 2,453 |
Aggregate principal balance | $ | $ 70 | $ 89 |
Mortgage Servicing Rights (Deta
Mortgage Servicing Rights (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Servicing Asset at Fair Value [Roll Forward] | ||||
Balance at beginning of period | $ 335 | |||
Changes in fair value due to | ||||
Balance at end of period | $ 246 | 246 | ||
Residential first mortgage loans | ||||
Servicing Asset at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 184 | $ 301 | 335 | $ 296 |
Additions from loans sold with servicing retained | 75 | 51 | 178 | 173 |
Reductions from sales | (4) | (17) | (260) | (41) |
Changes in fair value due to | ||||
Decrease in MSR due to payoffs, pay-downs and run-off | (5) | (19) | (15) | (45) |
Changes in estimates of fair value | (4) | (14) | 8 | (81) |
Balance at end of period | $ 246 | $ 302 | $ 246 | $ 302 |
Mortgage Servicing Rights (Sche
Mortgage Servicing Rights (Schedule of Sensitivity Analysis of Fair Value) (Details) - Mortgage servicing rights $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017USD ($)$ / loan | Dec. 31, 2016USD ($)$ / loan | |
Servicing Assets at Fair Value [Line Items] | ||
Option adjusted spread, Actual (as a percent) | 5.81% | 7.78% |
Option adjusted spread, Decline in fair value due to 10% adverse change | $ 242 | $ 326 |
Option adjusted spread, Decline in fair value due to 20% adverse change | $ 238 | $ 318 |
Constant prepayment rate, Actual (as a percent) | 9.64% | 16.68% |
Constant prepayment rate, Decline in fair value due to 10% adverse change | $ 238 | $ 322 |
Constant prepayment rate, Decline in fair value due to 20% adverse change | $ 231 | $ 311 |
Weighted average annual cost to service per loan, Actual (in usd per loan) | $ / loan | 71 | 68.18 |
Weighted average annual cost to service per loan, Decline in fair value due to 10% adverse change | $ 244 | $ 330 |
Weighted average annual cost to service per loan, Decline in fair value due to 20% adverse change | $ 241 | $ 326 |
Mortgage Servicing Rights (Inco
Mortgage Servicing Rights (Income and Fees from Associated with Mortgage Servicing Asset and Mortgage Loan Subserviced) (Details) - Residential first mortgage - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Servicing Assets at Fair Value [Line Items] | ||||
Total net return (loss) on mortgage servicing rights | $ 6 | $ (11) | $ 26 | $ (21) |
Net return (loss) on mortgage servicing rights | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Servicing fees, ancillary income and late fees | 14 | 22 | 43 | 60 |
Changes in fair value | (9) | (33) | (7) | (126) |
Net return (loss) on MSR derivatives | 0 | (1) | (3) | 44 |
Net transaction costs | 1 | 1 | (7) | 1 |
Net Loan Administration Income | ||||
Servicing Assets at Fair Value [Line Items] | ||||
Servicing fees, ancillary income and late fees | 9 | 7 | 26 | 21 |
Other servicing charges | (4) | (3) | (10) | (7) |
Total income on mortgage loans subserviced, included in loan administration | $ 5 | $ 4 | $ 16 | $ 14 |
Derivative Financial Instrume62
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Unrealized (loss) gains on derivatives recorded in AOCI | $ (8) | $ (7) |
Estimated amount to be reclassified from OCI into earnings during next 12 months | (3) | |
Right to reclaim cash | 54 | |
Obligation to Return Cash | 13 | 74 |
Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Right to reclaim cash | 23 | 21 |
Obligation to Return Cash | 13 | 74 |
Derivatives designated as hedging instruments | Interest rate swaps on FHLB advances | ||
Derivative [Line Items] | ||
Right to reclaim cash | 23 | 33 |
Obligation to Return Cash | 0 | |
Cash Flow Hedges | ||
Derivative [Line Items] | ||
Unrealized (loss) gains on derivatives recorded in AOCI | $ (3) | $ 1 |
Derivative Financial Instrume63
Derivative Financial Instruments (Notional Amount, Estimated Fair Value and Maturity) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Other liabilities | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | $ 4,006 | $ 3,754 |
Derivative liability, Fair Value | 10 | 54 |
Derivatives designated as hedging instruments | Interest rate swaps on FHLB advances | ||
Derivative [Line Items] | ||
Derivative asset, Fair Value | 1 | 20 |
Derivative liability, Fair Value | 1 | |
Derivatives designated as hedging instruments | Other assets | Interest rate swaps on FHLB advances | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 830 | 600 |
Derivative asset, Fair Value | 1 | 20 |
Derivatives designated as hedging instruments | Other liabilities | Interest rate swaps on FHLB advances | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | 230 | |
Derivative liability, Fair Value | 1 | |
Derivatives not designated as hedging instruments | ||
Derivative [Line Items] | ||
Derivative asset, Fair Value | 26 | 80 |
Derivative liability, Fair Value | 9 | 48 |
Derivatives not designated as hedging instruments | Futures | ||
Derivative [Line Items] | ||
Derivative asset, Fair Value | 2 | |
Derivative liability, Fair Value | 3 | 0 |
Derivatives not designated as hedging instruments | Mortgage backed securities forwards | ||
Derivative [Line Items] | ||
Derivative asset, Fair Value | 12 | 43 |
Derivative liability, Fair Value | 4 | 11 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Derivative [Line Items] | ||
Derivative asset, Fair Value | 14 | 35 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative liability, Fair Value | 2 | 37 |
Derivatives not designated as hedging instruments | Other assets | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 11,640 | 14,145 |
Derivative asset, Fair Value | 59 | 104 |
Derivatives not designated as hedging instruments | Other assets | Futures | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 1,091 | 4,621 |
Derivative asset, Fair Value | 0 | 2 |
Derivatives not designated as hedging instruments | Other assets | Mortgage backed securities forwards | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 4,740 | 3,776 |
Derivative asset, Fair Value | 12 | 43 |
Derivatives not designated as hedging instruments | Other assets | Rate lock commitments | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 4,478 | 3,517 |
Derivative asset, Fair Value | 33 | 24 |
Derivatives not designated as hedging instruments | Other assets | Interest rate swaps and swaptions | ||
Derivative [Line Items] | ||
Derivative asset, Notional Amount | 1,331 | 2,231 |
Derivative asset, Fair Value | 14 | 35 |
Derivatives not designated as hedging instruments | Other liabilities | Futures | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | 671 | 134 |
Derivative liability, Fair Value | 3 | 0 |
Derivatives not designated as hedging instruments | Other liabilities | Mortgage backed securities forwards | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | 2,089 | 1,893 |
Derivative liability, Fair Value | 4 | 11 |
Derivatives not designated as hedging instruments | Other liabilities | Rate lock commitments | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | 326 | 598 |
Derivative liability, Fair Value | 1 | 6 |
Derivatives not designated as hedging instruments | Other liabilities | Interest rate swaps | ||
Derivative [Line Items] | ||
Derivative liability, Notional Amount | 920 | 1,129 |
Derivative liability, Fair Value | $ 2 | $ 37 |
Derivative Financial Instrume64
Derivative Financial Instruments (Master Netting Schedule) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative Asset [Abstract] | ||
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | $ 13 | $ 74 |
Derivative Liability [Abstract] | ||
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 54 | |
Central Counterparty Clearing House | ||
Derivative Liability [Abstract] | ||
Collateral Already Posted, Aggregate Fair Value | 15 | |
Derivatives designated as hedging instruments | Interest rate swaps on FHLB advances | ||
Derivative Asset [Abstract] | ||
Gross Amount | 1 | 20 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 1 |
Net Amount Presented in the Statement of Financial Position | 1 | 19 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 0 | |
Derivative Liability [Abstract] | ||
Gross Amount | 1 | |
Gross Amounts Netted in the Statement of Financial Position | 1 | |
Net Amount Presented in the Statement of Financial Position | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 23 | 33 |
Derivatives not designated as hedging instruments | ||
Derivative Asset [Abstract] | ||
Gross Amount | 26 | 80 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 26 | 80 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 13 | 74 |
Derivative Liability [Abstract] | ||
Gross Amount | 9 | 48 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 9 | 48 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 23 | 21 |
Derivatives not designated as hedging instruments | Mortgage backed securities forwards | ||
Derivative Asset [Abstract] | ||
Gross Amount | 12 | 43 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 12 | 43 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 2 | 44 |
Derivative Liability [Abstract] | ||
Gross Amount | 4 | 11 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 4 | 11 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 10 | 0 |
Derivatives not designated as hedging instruments | Interest rate swaps and swaptions | ||
Derivative Asset [Abstract] | ||
Gross Amount | 14 | 35 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 14 | 35 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 11 | 30 |
Derivatives not designated as hedging instruments | Interest rate swaps | ||
Derivative Liability [Abstract] | ||
Gross Amount | 2 | 37 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 2 | 37 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 9 | 20 |
Derivatives not designated as hedging instruments | Futures | ||
Derivative Asset [Abstract] | ||
Gross Amount | 2 | |
Gross Amounts Netted in the Statement of Financial Position | 0 | |
Net Amount Presented in the Statement of Financial Position | 2 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | 0 | |
Derivative Liability [Abstract] | ||
Gross Amount | 3 | 0 |
Gross Amounts Netted in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 3 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Financial Instruments | 0 | 0 |
Gross Amounts Not Offset in the Statement of Financial Condition, Cash Collateral | $ 4 | $ 1 |
Derivative Financial Instrume65
Derivative Financial Instruments (Schedule of Unrealized Gains or Losses) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | $ (9) | $ 16 | $ (18) | $ 62 |
Futures | Net return (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | (1) | 4 | (1) | 8 |
Interest rate swaps | Net return (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | (2) | (7) | (7) | 21 |
Interest rate swaps | Other noninterest income | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | 0 | 2 | 1 | 3 |
Mortgage backed securities forwards | Net return (loss) on mortgage servicing rights | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | 2 | 2 | 5 | 15 |
Rate lock commitments and forward agency and loan sales | Net (loss) gain on loan sales | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | (8) | 15 | (16) | 14 |
Rate lock commitments | Other noninterest income | ||||
Derivative [Line Items] | ||||
Net gain (loss) recognized in income on derivative instruments | $ 0 | $ 0 | $ 0 | $ 1 |
Borrowings (FHLB Advances) (Det
Borrowings (FHLB Advances) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Short term debt FHLB advances and other | $ 4,065 | $ 1,780 |
Current portion of fixed rate advances | 1,300 | 1,200 |
Federal Home Loan Bank Advances | 5,365 | 2,980 |
Long-term fixed rate advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Current portion of fixed rate advances | 125 | 50 |
Short-term adjustable rate | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Short term debt FHLB advances and other | $ 4,065 | $ 1,780 |
Federal Home Loan Bank Advances, Rate (as a percent) | 1.14% | 0.62% |
Long-term LIBOR adjustable advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank Advances, Rate (as a percent) | 1.49% | 1.12% |
Current portion of fixed rate advances | $ 1,025 | $ 1,025 |
Long-term fixed rate advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank Advances, Rate (as a percent) | 1.41% | 1.12% |
Current portion of fixed rate advances | $ 275 | $ 175 |
Borrowings (Narrative) (Details
Borrowings (Narrative) (Details) - USD ($) | Jul. 11, 2016 | Sep. 30, 2017 |
Debt Instrument [Line Items] | ||
FHLB line of credit, maximum amount available | $ 7,000,000,000 | |
FHLB advances, line of credit | 1,100,000,000 | |
Derivative instrument cash received | 830,000,000 | |
Payment of interest on trust preferred securities | 0 | |
Senior Note Maturing 2021 | 6.125% senior notes | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 250,000,000 | |
Debt instrument redemption rate | 100.00% | |
Three Month LIBOR | ||
Debt Instrument [Line Items] | ||
FHLB line of credit, available collateral amount | $ 1,000,000,000 | |
Debt instrument, variable interest rate, term | 3 months | |
FHLB Advances, Prepayment Notification Period (in months) | 3 months | |
FHLB Advances, Initial Lockout Period (in months) | 12 months | |
Treasury Rate | Senior Note Maturing 2021 | 6.125% senior notes | ||
Debt Instrument [Line Items] | ||
Variable rate on interest rate | 0.50% | |
Carrying Value | ||
Debt Instrument [Line Items] | ||
FHLB line of credit, available collateral amount | $ 5,400,000,000 |
Borrowings (Schedule of FHLB Ad
Borrowings (Schedule of FHLB Advances, Disclosures) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Disclosure [Abstract] | ||||
Maximum outstanding at any month end | $ 5,365 | $ 3,182 | $ 5,365 | $ 3,557 |
Average outstanding balance | 5,043 | 2,649 | 4,239 | 2,777 |
Average remaining borrowing capacity | $ 1,182 | $ 1,626 | $ 1,297 | $ 1,106 |
Weighted average interest rate (as a percent) | 1.36% | 1.26% | 1.26% | 1.25% |
Borrowings (Schedule of FHLB, A
Borrowings (Schedule of FHLB, Advances, Maturity Summary) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2,017 | $ 4,065 | |
2,018 | 125 | |
2,019 | 50 | |
2,020 | 0 | |
Thereafter | 1,125 | |
Federal Home Loan Bank Advances | $ 5,365 | $ 2,980 |
Borrowings (Trust Preferred Sec
Borrowings (Trust Preferred Securities) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 247 | $ 247 |
Long-term Debt | 493 | 493 |
6.125% senior notes, matures 2021 | ||
Trust Preferred Securities [Abstract] | ||
Senior note | $ 246 | $ 246 |
Interest rate | 6.125% | 6.125% |
3ML plus 3.25% maturing 2032 | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 26 | $ 26 |
Interest rate | 4.58% | 4.25% |
3ML plus 3.25% maturing 2033 A | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 26 | $ 26 |
Interest rate | 4.55% | 4.13% |
3ML plus 3.25% maturing 2033 B | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 26 | $ 26 |
Interest rate | 4.55% | 4.25% |
3ML plus 2.00% maturing 2035 A | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 26 | $ 26 |
Interest rate | 3.30% | 2.88% |
3ML plus 2.00% maturing 2035 B | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 26 | $ 26 |
Interest rate | 3.30% | 2.88% |
3ML plus 1.75% maturing 2035 | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 51 | $ 51 |
Interest rate | 3.07% | 2.71% |
3ML plus 1.50% maturing 2035 | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 25 | $ 25 |
Interest rate | 2.80% | 2.38% |
3ML plus 1.45% maturing 2037 | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 25 | $ 25 |
Interest rate | 2.77% | 2.41% |
3ML plus 2.50% maturing 2037 | ||
Trust Preferred Securities [Abstract] | ||
Junior subordinated notes | $ 16 | $ 16 |
Interest rate | 3.82% | 3.46% |
Representation and Warranty R71
Representation and Warranty Reserve (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Representation and Warranty Reserve [Roll Forward] | ||||
Balance at beginning of period | $ 20 | $ 36 | $ 27 | $ 40 |
Gain on sale reduction for representation and warranty liability | 1 | 1 | 3 | 4 |
Representation and warranty provision (benefit) | (4) | (6) | (11) | (12) |
Total | (3) | (5) | (8) | (8) |
(Charge-offs) recoveries, net | (1) | 1 | (3) | 0 |
Balance at end of period | $ 16 | $ 32 | $ 16 | $ 32 |
Warrants (Narratives) (Details)
Warrants (Narratives) (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Jan. 30, 2009 | |
Preferred Stock | |||
Class of Warrant or Right [Line Items] | |||
Preferred stock, shares outstanding (in shares0 | 266,657 | ||
May Investors | |||
Class of Warrant or Right [Line Items] | |||
Warrants exercised (in shares) | 237,627 | ||
Warrants outstanding (in shares) | 0 | ||
Liability from warrants | $ 0 | $ 4,000,000 | |
May Investors | Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Shares issued (shares) | 154,313 | ||
Troubled Asset Relief Program | |||
Class of Warrant or Right [Line Items] | |||
Number of shares auctioned by warrants | 645,138 | ||
Warrants exercised (used per share) | $ 62 |
Accumulated Other Comprehensi73
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accumulated other comprehensive income (loss) | ||||
Beginning balance | $ 1,336 | $ 1,529 | ||
Other comprehensive income/(loss), net of tax | $ 1 | $ (1) | (1) | (22) |
Ending balance | 1,451 | 1,286 | 1,451 | 1,286 |
Accumulated Other Comprehensive Income (Loss) | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (7) | 2 | ||
Other comprehensive income/(loss), net of tax | (1) | (22) | ||
Ending balance | (8) | (20) | (8) | (20) |
Investment securities | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (6) | 21 | (8) | 5 |
Unrealized gain (loss) | 0 | 1 | 2 | 27 |
Less: Tax provision | 0 | 0 | 1 | 10 |
Net unrealized loss, net of tax | 0 | 1 | 1 | 17 |
Reclassification out of AOCI | 1 | (8) | 3 | (8) |
Less: Tax (benefit) provision | 0 | (3) | 1 | (3) |
Reclassifications out of AOCI | 1 | (5) | 2 | (5) |
Other comprehensive income/(loss), net of tax | 1 | (4) | 3 | 12 |
Ending balance | (5) | 17 | (5) | 17 |
Cash Flow Hedges | ||||
Accumulated other comprehensive income (loss) | ||||
Beginning balance | (3) | (40) | 1 | (3) |
Unrealized gain (loss) | 0 | 2 | (2) | (61) |
Less: Tax provision | 0 | 2 | (1) | (17) |
Net unrealized loss, net of tax | 0 | 0 | (1) | (44) |
Reclassification out of AOCI | 0 | 3 | (5) | 10 |
Less: Tax (benefit) provision | 0 | 0 | (2) | 0 |
Reclassifications out of AOCI | 0 | 3 | (3) | 10 |
Other comprehensive income/(loss), net of tax | 0 | 3 | (4) | (34) |
Ending balance | $ (3) | $ (37) | $ (3) | $ (37) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income | $ 40 | $ 57 | $ 108 | $ 143 |
Deferred cumulative preferred stock dividends | 0 | (2) | 0 | (18) |
Net income applicable to common stockholders | $ 40 | $ 55 | $ 108 | $ 125 |
Weighted average shares | ||||
Weighted average common shares outstanding | 57,162,025 | 56,580,238 | 57,062,696 | 56,556,188 |
Effect of dilutive securities | ||||
May Investor Warrants (in shares) | 0 | 364,791 | 16,383 | 339,893 |
Stock-based awards (in shares) | 1,024,568 | 988,777 | 1,054,217 | 831,181 |
Weighted average diluted common shares | 58,186,593 | 57,933,806 | 58,133,296 | 57,727,262 |
Earnings per common share | ||||
Basic earnings per common share (in usd per share) | $ 0.71 | $ 0.98 | $ 1.90 | $ 2.21 |
Effect of dilutive securities | ||||
May investors Warrants (in usd per share) | 0 | 0 | 0 | (0.02) |
Stock-based awards (in usd per share) | (0.01) | (0.02) | (0.04) | (0.03) |
Diluted (loss) earnings per share (in usd per share) | $ 0.70 | $ 0.96 | $ 1.86 | $ 2.16 |
Earnings Per Share (Anti-diluti
Earnings Per Share (Anti-dilutive) (Details) $ in Millions | Jul. 29, 2016USD ($) |
Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Preferred stock, redemption amount | $ 267 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation expense | $ 2 | $ 8 | |
Employee Stock Purchase Plan | 2017 ESPP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation expense | $ 0 | ||
Stock compensation shares authorized (shares) | 800,000 | ||
Shares issued during period | 19,897 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Units) (Details) - Restricted Stock - $ / shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Shares | ||
Non-vested balance at beginning of period, shares | 1,455,327 | 1,461,910 |
Granted, shares | 28,750 | 355,088 |
Vested, shares | (298) | (214,239) |
Canceled and forfeited, shares | (15,952) | (134,932) |
Non-vested balance at end of period, shares | 1,467,827 | 1,467,827 |
Weighted — Average Grant-Date Fair Value per Share | ||
Non-vested balance at beginning of period (in usd per share) | $ 19.88 | $ 17.68 |
Granted (in usd per share) | 23.57 | 28.02 |
Vested (in usd per share) | 16.77 | 18.95 |
Canceled and forfeited (in usd per share) | 23.31 | 18.57 |
Non-vested balance at end of period (in usd per share) | $ 19.92 | $ 19.92 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes | $ 20 | $ 30 | $ 52 | $ 73 |
Effective tax provision rate (as a percent) | 32.40% | 34.30% | 32.30% | 33.80% |
Unrecognized tax benefits, recognition period (in months) | 12 months |
Regulatory Matters (Details)
Regulatory Matters (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tangible capital (to tangible assets), Actual, Amount | $ 1,423 | $ 1,256 |
Tangible capital (to tangible assets), Actual, Ratio | 8.80% | 8.88% |
Tier 1 capital (to adjusted tangible assets), Actual, Amount | $ 1,423 | $ 1,256 |
Tier 1 capital (to adjusted tangible assets), Actual, Ratio (as a percent) | 8.80% | 8.88% |
Tier 1 capital (to adjusted tangible assets), For Capital Adequacy Purposes, Amount | $ 647 | $ 566 |
Tier 1 capital (to adjusted tangible assets), For Required Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 808 | $ 707 |
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 5.00% | 5.00% |
Common equity Tier 1 capital (to RWA), Actual, Amount | $ 1,208 | $ 1,084 |
Common equity Tier 1 capital (to RWA), Actual, Ratio (as a percent) | 11.65% | 13.06% |
Common equity Tier 1 capital (to RWA), Required for Capital Adequacy, Amount | $ 467 | $ 374 |
Common equity Tier 1 capital (to RWA), Required for Capital Adequacy, Ratio (as a percent) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Required to Be Well Capitalized, Amount | $ 674 | $ 540 |
Common equity Tier 1 capital (to RWA), Required to Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 capital (to risk-weighted assets), Actual, Amount | $ 1,423 | $ 1,256 |
Tier 1 capital (to risk-weighted assets), Actual, Ratio (as a percent) | 13.72% | 15.12% |
Tier 1 capital (to risk-weighted assets), For Capital Adequacy Purposes, Amount | $ 622 | $ 498 |
Tier 1 capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio (as a percent) | 6.00% | 6.00% |
Tier 1 capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 830 | $ 664 |
Tier 1 capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 8.00% | 8.00% |
Total capital (to risk-weighted assets), Actual, Amount | $ 1,554 | $ 1,363 |
Total capital (to risk-weighted assets), Actual, Ratio (as a percent) | 14.99% | 16.41% |
Total capital (to risk-weighted assets), For Capital Adequacy Purposes, Amount | $ 830 | $ 664 |
Total capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio (as a percent) | 8.00% | 8.00% |
Total capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 1,037 | $ 830 |
Total capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 10.00% | 10.00% |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tangible capital (to tangible assets), Actual, Amount | $ 1,519 | $ 1,491 |
Tangible capital (to tangible assets), Actual, Ratio | 9.38% | 10.52% |
Tier 1 capital (to adjusted tangible assets), Actual, Amount | $ 1,519 | $ 1,491 |
Tier 1 capital (to adjusted tangible assets), Actual, Ratio (as a percent) | 9.38% | 10.52% |
Tier 1 capital (to adjusted tangible assets), For Capital Adequacy Purposes, Amount | $ 648 | $ 567 |
Tier 1 capital (to adjusted tangible assets), For Required Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 810 | $ 709 |
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 5.00% | 5.00% |
Common equity Tier 1 capital (to RWA), Actual, Amount | $ 1,519 | $ 1,491 |
Common equity Tier 1 capital (to RWA), Actual, Ratio (as a percent) | 14.61% | 17.90% |
Common equity Tier 1 capital (to RWA), Required for Capital Adequacy, Amount | $ 468 | $ 375 |
Common equity Tier 1 capital (to RWA), Required for Capital Adequacy, Ratio (as a percent) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Required to Be Well Capitalized, Amount | $ 676 | $ 542 |
Common equity Tier 1 capital (to RWA), Required to Be Well Capitalized, Ratio (as a percent) | 6.50% | 6.50% |
Tier 1 capital (to risk-weighted assets), Actual, Amount | $ 1,519 | $ 1,491 |
Tier 1 capital (to risk-weighted assets), Actual, Ratio (as a percent) | 14.61% | 17.90% |
Tier 1 capital (to risk-weighted assets), For Capital Adequacy Purposes, Amount | $ 624 | $ 500 |
Tier 1 capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio (as a percent) | 6.00% | 6.00% |
Tier 1 capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 832 | $ 667 |
Tier 1 capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 8.00% | 8.00% |
Total capital (to risk-weighted assets), Actual, Amount | $ 1,651 | $ 1,598 |
Total capital (to risk-weighted assets), Actual, Ratio (as a percent) | 15.88% | 19.18% |
Total capital (to risk-weighted assets), For Capital Adequacy Purposes, Amount | $ 832 | $ 667 |
Total capital (to risk-weighted assets), For Capital Adequacy Purposes, Ratio (as a percent) | 8.00% | 8.00% |
Total capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 1,040 | $ 833 |
Total capital (to risk-weighted assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 10.00% | 10.00% |
Legal Proceedings, Contingenc80
Legal Proceedings, Contingencies and Commitments (Narratives) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | ||
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 5.00% | 5.00% |
Business acquisition threshold | 33.30% | |
Accrued reserve for contingent liabilities | $ 2 | $ 3 |
Letter of credit, reserve amount | $ 3 | $ 3 |
Bank | ||
Loss Contingencies [Line Items] | ||
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 5.00% | 5.00% |
DOJ Agreement | Bank | ||
Loss Contingencies [Line Items] | ||
Tier 1 capital (to adjusted tangible assets), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent) | 11.00% | |
DOJ Agreement | ||
Loss Contingencies [Line Items] | ||
Litigation settlement, initial payment | $ 15 | |
Litigation settlement payment amount | $ 118 | |
Fair Value Inputs, Discount Rate | 9.40% | |
Litigation settlement liability | $ 60 | $ 60 |
DOJ Agreement | Additional payments | ||
Loss Contingencies [Line Items] | ||
Annual payments (up to) | $ 25 |
Legal Proceedings, Contingenc81
Legal Proceedings, Contingencies and Commitments (Credit Commitments) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Mortgage loans interest-rate lock commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | $ 4,804 | $ 4,115 |
Warehouse loan commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | 1,560 | 1,670 |
Commercial and industrial commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | 692 | 424 |
Other commercial commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | 955 | 651 |
HELOC commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | 241 | 179 |
Other consumer commitments | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | 51 | 57 |
Standby and commercial letters of credit | ||
Loss Contingencies [Line Items] | ||
Unused Commitments to Extend Credit | $ 46 | $ 30 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | $ 1,637 | $ 1,480 |
Loans held-for-sale, fair value | 3,145 | |
Loans held-for-investment | 13 | 72 |
Mortgage servicing rights | 246 | 335 |
Total assets at fair value | 4,920 | 3,217 |
Agency - Commercial | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 750 | 548 |
Agency - Residential | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 809 | 898 |
Municipal obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 44 | 34 |
Corporate debt obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 34 | |
Total Fair Value | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 1,637 | 1,480 |
Loans held-for-sale, fair value | 4,940 | 3,178 |
Loans held-for-investment | 7,181 | 5,998 |
Mortgage servicing rights | 246 | 335 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | (4) | |
Contingent consideration | (26) | |
Level 1 | Total Fair Value | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | 0 | |
Contingent consideration | 0 | |
Level 2 | Total Fair Value | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 1,637 | 1,480 |
Loans held-for-sale, fair value | 4,940 | 3,178 |
Loans held-for-investment | 9 | 7 |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | (4) | |
Contingent consideration | 0 | |
Level 3 | Total Fair Value | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 7,172 | 5,991 |
Mortgage servicing rights | 246 | 335 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | 0 | |
Contingent consideration | (26) | |
Recurring | Total Fair Value | ||
Assets, Fair Value Disclosure [Abstract] | ||
Mortgage servicing rights | 246 | 335 |
Total assets at fair value | 6,863 | 5,155 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Total liabilities at fair value | (96) | (118) |
Recurring | Total Fair Value | Rate lock commitments | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 33 | 24 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (1) | (6) |
Recurring | Total Fair Value | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 12 | 43 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (4) | (11) |
Recurring | Total Fair Value | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 14 | 35 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Contingent consideration | (26) | |
Recurring | Total Fair Value | Interest rate swap on FHLB advances (net) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 1 | 19 |
Recurring | Total Fair Value | Futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 2 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (3) | |
Recurring | Total Fair Value | Interest rate swaps | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (2) | (37) |
Recurring | Total Fair Value | Residential first mortgage loans | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-sale, fair value | 4,907 | 3,145 |
Loans held-for-investment | 9 | 7 |
Recurring | Total Fair Value | Home equity | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-investment | 4 | 65 |
Recurring | Total Fair Value | Agency - Commercial | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 750 | 548 |
Recurring | Total Fair Value | Agency - Residential | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 809 | 898 |
Recurring | Total Fair Value | Municipal obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 44 | 34 |
Recurring | Total Fair Value | Corporate debt obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 34 | |
Recurring | Level 1 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 0 | 2 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | 0 | |
DOJ litigation settlement | 0 | 0 |
Total liabilities at fair value | (3) | 0 |
Recurring | Level 1 | Rate lock commitments | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Contingent consideration | 0 | |
Recurring | Level 1 | Interest rate swap on FHLB advances (net) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Recurring | Level 1 | Futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 2 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (3) | |
Recurring | Level 1 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Home equity | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Agency - Commercial | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Agency - Residential | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Municipal obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Corporate debt obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | |
Recurring | Level 2 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 6,580 | 4,729 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | (4) | |
DOJ litigation settlement | 0 | 0 |
Total liabilities at fair value | (6) | (52) |
Recurring | Level 2 | Rate lock commitments | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 2 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 12 | 43 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (4) | (11) |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 14 | 35 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Contingent consideration | 0 | |
Recurring | Level 2 | Interest rate swap on FHLB advances (net) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 1 | 19 |
Recurring | Level 2 | Futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (2) | (37) |
Recurring | Level 2 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-sale, fair value | 4,907 | 3,145 |
Loans held-for-investment | 9 | 7 |
Recurring | Level 2 | Home equity | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 2 | Agency - Commercial | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 750 | 548 |
Recurring | Level 2 | Agency - Residential | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 809 | 898 |
Recurring | Level 2 | Municipal obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 44 | 34 |
Recurring | Level 2 | Corporate debt obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 34 | |
Recurring | Level 3 | ||
Assets, Fair Value Disclosure [Abstract] | ||
Mortgage servicing rights | 246 | 335 |
Total assets at fair value | 283 | 424 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Warrant liabilities | 0 | |
DOJ litigation settlement | (60) | (60) |
Total liabilities at fair value | (87) | (66) |
Recurring | Level 3 | Rate lock commitments | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 33 | 24 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | (1) | (6) |
Recurring | Level 3 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Contingent consideration | (26) | |
Recurring | Level 3 | Interest rate swap on FHLB advances (net) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | 0 |
Recurring | Level 3 | Futures | ||
Assets, Fair Value Disclosure [Abstract] | ||
Total assets at fair value | 0 | |
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | |
Recurring | Level 3 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-sale, fair value | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 3 | Home equity | ||
Assets, Fair Value Disclosure [Abstract] | ||
Loans held-for-investment | 4 | 65 |
Recurring | Level 3 | Agency - Commercial | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Agency - Residential | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Municipal obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | 0 | $ 0 |
Recurring | Level 3 | Corporate debt obligations | ||
Assets, Fair Value Disclosure [Abstract] | ||
Investment securities available-for-sale | $ 0 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Transfers of assets or liabilities at fair value between fair value levels | $ 0 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Measurements Using Significant Unobservable Inputs) (Details) - Recurring - Level 3 - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Assets, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | $ 215 | $ 465 | $ 418 | $ 428 |
Total Unrealized Gains / (Losses) | 12 | 4 | 50 | 29 |
Total Realized Gains / (Losses) | 0 | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 | 0 |
Purchases / Originations | 157 | 167 | 377 | 476 |
Sales | (4) | (167) | (312) | (412) |
Settlements | (1) | (32) | (8) | (84) |
Transfers In (Out) | (97) | 0 | (243) | 0 |
Balance at End of Period | 282 | 437 | 282 | 437 |
Liabilities, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | (83) | (60) | ||
Total unrealized gains/(losses) recorded in earnings | (1) | (1) | ||
Total realized gains/(losses) recorded in earnings | 0 | 0 | ||
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | ||
Purchases / Originations | (2) | (25) | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers In (Out) | 0 | 0 | ||
Balance at End of Period | (86) | (86) | ||
DOJ litigation settlement | ||||
Liabilities, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | (60) | (84) | (60) | (84) |
Total unrealized gains/(losses) recorded in earnings | 0 | 24 | 0 | 24 |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 | 0 |
Purchases / Originations | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | 0 | 0 | 0 | 0 |
Transfers In (Out) | 0 | 0 | 0 | 0 |
Balance at End of Period | (60) | (60) | (60) | (60) |
Contingent consideration | ||||
Liabilities, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | (23) | 0 | ||
Total unrealized gains/(losses) recorded in earnings | (1) | (1) | ||
Total realized gains/(losses) recorded in earnings | 0 | 0 | ||
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | ||
Purchases / Originations | (2) | (25) | ||
Sales | 0 | 0 | ||
Settlements | 0 | 0 | ||
Transfers In (Out) | 0 | 0 | ||
Balance at End of Period | (26) | (26) | ||
Home equity | ||||
Assets, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | 5 | 82 | 65 | 106 |
Total Unrealized Gains / (Losses) | 0 | 4 | 1 | 2 |
Total Realized Gains / (Losses) | 0 | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 | 0 |
Purchases / Originations | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | 0 | 0 |
Settlements | (1) | 14 | (7) | (36) |
Transfers In (Out) | 0 | 0 | (55) | 0 |
Balance at End of Period | 4 | 72 | 4 | 72 |
Home equity | Loans held-for-sale | ||||
Assets, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | 0 | |||
Total Unrealized Gains / (Losses) | 1 | |||
Total Realized Gains / (Losses) | 0 | |||
Total unrealized gains/(losses) recorded in OCI | 0 | |||
Purchases / Originations | 0 | |||
Sales | (52) | |||
Settlements | (1) | |||
Transfers In (Out) | 52 | |||
Balance at End of Period | 0 | 0 | ||
Mortgage servicing rights | ||||
Assets, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | 184 | 301 | 335 | 296 |
Total Unrealized Gains / (Losses) | (9) | (33) | (7) | (126) |
Total Realized Gains / (Losses) | 0 | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 | 0 |
Purchases / Originations | 75 | 51 | 178 | 173 |
Sales | (4) | (17) | (260) | (41) |
Settlements | 0 | 0 | 0 | 0 |
Transfers In (Out) | 0 | 0 | 0 | 0 |
Balance at End of Period | 246 | 302 | 246 | 302 |
Rate lock commitments | ||||
Assets, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance at Beginning of Period | 26 | 82 | 18 | 26 |
Total Unrealized Gains / (Losses) | 21 | 33 | 55 | 153 |
Total Realized Gains / (Losses) | 0 | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 | 0 |
Purchases / Originations | 82 | 116 | 199 | 303 |
Sales | 0 | (150) | 0 | (371) |
Settlements | 0 | (18) | 0 | (48) |
Transfers In (Out) | (97) | 0 | (240) | 0 |
Balance at End of Period | $ 32 | $ 63 | $ 32 | $ 63 |
Fair Value Measurements (Level
Fair Value Measurements (Level 3 Quantitative Information) (Details) - Recurring - Level 3 - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | $ 282 | $ 418 | $ 215 | $ 437 | $ 465 | $ 428 |
Fair value, Liabilities | 86 | 60 | 83 | |||
Litigation settlement | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Liabilities | 60 | 60 | 60 | 60 | 84 | 84 |
Contingent consideration | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Liabilities | 26 | 0 | 23 | |||
Home equity | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | 4 | 65 | 5 | 72 | 82 | 106 |
Mortgage servicing rights | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | 246 | 335 | 184 | 302 | 301 | 296 |
Rate lock commitments | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | 32 | 18 | $ 26 | $ 63 | $ 82 | $ 26 |
Discounted cash flows | Litigation settlement | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Liabilities | $ 60 | $ 60 | ||||
Discounted cash flows | Litigation settlement | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 7.50% | 6.60% | ||||
Discounted cash flows | Litigation settlement | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 11.30% | 9.80% | ||||
Discounted cash flows | Litigation settlement | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 9.40% | 8.20% | ||||
Discounted cash flows | Contingent consideration | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Liabilities | $ 26 | |||||
Discounted cash flows | Contingent consideration | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Fair value input, beta | 0.60% | |||||
Fair value inputs, equity volatility | 26.60% | |||||
Discounted cash flows | Contingent consideration | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Fair value input, beta | 1.60% | |||||
Fair value inputs, equity volatility | 58.90% | |||||
Discounted cash flows | Contingent consideration | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Fair value input, beta | 1.10% | |||||
Fair value inputs, equity volatility | 40.50% | |||||
Discounted cash flows | Home equity | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | $ 4 | $ 65 | ||||
Discounted cash flows | Home equity | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 7.20% | 6.00% | ||||
Constant prepayment rate (as a percent) | 5.20% | 16.30% | ||||
CDR rate (as a percent) | 3.00% | 2.70% | ||||
Discounted cash flows | Home equity | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 10.80% | 12.20% | ||||
Constant prepayment rate (as a percent) | 7.70% | 24.40% | ||||
CDR rate (as a percent) | 4.50% | 4.10% | ||||
Discounted cash flows | Home equity | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 9.00% | 9.30% | ||||
Constant prepayment rate (as a percent) | 6.50% | 20.30% | ||||
CDR rate (as a percent) | 3.40% | 3.70% | ||||
Discounted cash flows | Mortgage servicing rights | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | $ 246 | $ 335 | ||||
Discounted cash flows | Mortgage servicing rights | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 4.70% | 6.20% | ||||
Constant prepayment rate (as a percent) | 7.80% | 13.90% | ||||
Weighted average cost to service per loan | $ 57 | $ 55 | ||||
Discounted cash flows | Mortgage servicing rights | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 7.00% | 9.30% | ||||
Constant prepayment rate (as a percent) | 11.40% | 19.20% | ||||
Weighted average cost to service per loan | $ 85 | $ 82 | ||||
Discounted cash flows | Mortgage servicing rights | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Discount rate (as a percent) | 5.80% | 7.80% | ||||
Constant prepayment rate (as a percent) | 9.60% | 16.70% | ||||
Weighted average cost to service per loan | $ 71 | $ 68 | ||||
Discounted cash flows | Rate lock commitments | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Asset growth rate (as a percent) | 5.60% | 4.20% | ||||
Discounted cash flows | Rate lock commitments | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Asset growth rate (as a percent) | 16.80% | 11.60% | ||||
Discounted cash flows | Rate lock commitments | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Asset growth rate (as a percent) | 6.50% | 7.90% | ||||
Consensus pricing | Rate lock commitments | ||||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information [Line Items] | ||||||
Fair value, Assets | $ 32 | $ 18 | ||||
Consensus pricing | Rate lock commitments | Lower range | ||||||
Fair Value Inputs [Abstract] | ||||||
Origination pull-through rate (as a percent) | 63.90% | 66.90% | ||||
Consensus pricing | Rate lock commitments | Upper range | ||||||
Fair Value Inputs [Abstract] | ||||||
Origination pull-through rate (as a percent) | 95.90% | 100.00% | ||||
Consensus pricing | Rate lock commitments | Weighted Average | ||||||
Fair Value Inputs [Abstract] | ||||||
Origination pull-through rate (as a percent) | 79.90% | 83.60% |
Fair Value Measurements (Fair86
Fair Value Measurements (Fair Value Inputs, Assets, Quantitative Disclosures) (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Level 3 | Weighted Average | Residential mortgage servicing rights capitalized | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Weighted average life (in years) | 6 years 15 days | 6 years 6 months 30 days |
Fair Value Measurements (Asse87
Fair Value Measurements (Assets Measured at Fair Value on a Non-recurring Basis) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | $ 3,145 | ||||
Total assets at fair value | $ 4,920 | $ 4,920 | 3,217 | ||
Net gain (loss) on loan sales | 75 | $ 94 | 189 | $ 259 | |
Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | 9 | 9 | 14 | ||
Total assets at fair value | 38 | 38 | 48 | ||
Fair value losses on repossessed assets | 0 | (2) | |||
Net gain (loss) on loan sales | (9) | (32) | |||
Nonrecurring | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 6 | 6 | 9 | ||
Impaired loans held-for-investment | 23 | 23 | 25 | ||
Nonrecurring | Residential first mortgage loans | Other noninterest income | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value losses on loans | (1) | (2) | |||
Nonrecurring | Residential first mortgage loans | Provision for loan losses | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Fair value losses on loans | (8) | (28) | |||
Nonrecurring | Level 2 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | 0 | 0 | 0 | ||
Total assets at fair value | 6 | 6 | 9 | ||
Nonrecurring | Level 2 | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 6 | 6 | 9 | ||
Impaired loans held-for-investment | 0 | 0 | 0 | ||
Nonrecurring | Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Repossessed assets | 9 | 9 | 14 | ||
Total assets at fair value | 32 | 32 | 39 | ||
Nonrecurring | Level 3 | Residential first mortgage loans | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Loans held-for-sale | 0 | 0 | 0 | ||
Impaired loans held-for-investment | $ 23 | $ 23 | $ 25 |
Fair Value Measurements (Asse88
Fair Value Measurements (Assets Measured on a Nonrecurring Basis, Level 3 Quantitative Information) (Details) - Nonrecurring - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Repossessed assets | $ 9 | $ 14 |
Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Impaired loans held-for-investment | 23 | 25 |
Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Repossessed assets | 9 | 14 |
Level 3 | Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Impaired loans held-for-investment | 23 | 25 |
Level 3 | Residential first mortgage loans | Fair value of underlying collateral | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Impaired loans held-for-investment | $ 23 | $ 25 |
Level 3 | Residential first mortgage loans | Fair value of underlying collateral | Lower range | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 28.00% | 22.00% |
Level 3 | Residential first mortgage loans | Fair value of underlying collateral | Upper range | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 31.00% | 40.00% |
Level 3 | Residential first mortgage loans | Fair value of underlying collateral | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 29.60% | 29.50% |
Level 3 | Repossessed assets | Fair value of underlying collateral | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Repossessed assets | $ 9 | $ 14 |
Level 3 | Repossessed assets | Fair value of underlying collateral | Lower range | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 29.00% | 22.00% |
Level 3 | Repossessed assets | Fair value of underlying collateral | Upper range | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 100.00% | 100.00% |
Level 3 | Repossessed assets | Fair value of underlying collateral | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Loss severity (as a percent) | 75.30% | 69.50% |
Fair Value Measurements (Fair89
Fair Value Measurements (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Investment securities available-for-sale | $ 1,637 | $ 1,480 |
Investment securities held-to-maturity | 971 | 1,084 |
Loans held-for-sale | 3,145 | |
Loans held-for-investment | 13 | 72 |
Mortgage servicing rights | 246 | 335 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 233 | 158 |
Investment securities available-for-sale | 1,637 | 1,480 |
Investment securities held-to-maturity | 977 | 1,093 |
Loans held-for-sale | 4,939 | 3,177 |
Loans held-for-investment | 7,203 | 6,065 |
Loans with government guarantees | 253 | 365 |
Mortgage servicing rights | 246 | 335 |
Federal Home Loan Bank stock | 264 | 180 |
Bank owned life insurance | 328 | 271 |
Repossessed assets | 9 | 14 |
Other assets, foreclosure claims | 92 | 135 |
Derivative financial instruments, assets | 60 | 123 |
Liabilities | ||
Federal Home Loan Bank advances | (5,365) | (2,980) |
Long-term debt | (493) | (493) |
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (26) | |
Derivative financial instruments, liabilities | (10) | (54) |
Carrying Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (5,243) | (5,268) |
Carrying Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,297) | (1,056) |
Carrying Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (43) | |
Carrying Value | Government deposits | ||
Liabilities | ||
Deposits | (1,068) | (1,030) |
Carrying Value | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,510) | (1,446) |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 233 | 158 |
Investment securities available-for-sale | 1,637 | 1,480 |
Investment securities held-to-maturity | 971 | 1,084 |
Loans held-for-sale | 4,940 | 3,178 |
Loans held-for-investment | 7,181 | 5,998 |
Loans with government guarantees | 245 | 354 |
Mortgage servicing rights | 246 | 335 |
Federal Home Loan Bank stock | 264 | 180 |
Bank owned life insurance | 328 | 271 |
Repossessed assets | 9 | 14 |
Other assets, foreclosure claims | 92 | 135 |
Derivative financial instruments, assets | 60 | 123 |
Liabilities | ||
Federal Home Loan Bank advances | (5,252) | (2,964) |
Long-term debt | (382) | (277) |
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (26) | |
Derivative financial instruments, liabilities | (10) | (54) |
Estimated Fair Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (4,845) | (4,956) |
Estimated Fair Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,304) | (1,062) |
Estimated Fair Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (43) | |
Estimated Fair Value | Government deposits | ||
Liabilities | ||
Deposits | (1,045) | (1,011) |
Estimated Fair Value | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,473) | (1,371) |
Estimated Fair Value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 233 | 158 |
Investment securities available-for-sale | 0 | 0 |
Investment securities held-to-maturity | 0 | 0 |
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 0 | 45 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
Warrant liabilities | 0 | |
DOJ litigation settlement | 0 | 0 |
Contingent consideration | 0 | |
Derivative financial instruments, liabilities | (3) | (11) |
Estimated Fair Value | Level 1 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | |
Estimated Fair Value | Level 1 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 1 | Company controlled deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 1,637 | 1,480 |
Investment securities held-to-maturity | 971 | 1,084 |
Loans held-for-sale | 4,940 | 3,178 |
Loans held-for-investment | 9 | 7 |
Loans with government guarantees | 245 | 354 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 264 | 180 |
Bank owned life insurance | 328 | 271 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 92 | 135 |
Derivative financial instruments, assets | 27 | 54 |
Liabilities | ||
Federal Home Loan Bank advances | (5,252) | (2,964) |
Long-term debt | (382) | (277) |
Warrant liabilities | (4) | |
DOJ litigation settlement | 0 | 0 |
Contingent consideration | 0 | |
Derivative financial instruments, liabilities | (6) | (37) |
Estimated Fair Value | Level 2 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (4,845) | (4,956) |
Estimated Fair Value | Level 2 | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,304) | (1,062) |
Estimated Fair Value | Level 2 | Wholesale deposits | ||
Liabilities | ||
Deposits | (43) | |
Estimated Fair Value | Level 2 | Government deposits | ||
Liabilities | ||
Deposits | (1,045) | (1,011) |
Estimated Fair Value | Level 2 | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,473) | (1,371) |
Estimated Fair Value | Level 3 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Investment securities held-to-maturity | 0 | 0 |
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 7,172 | 5,991 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 246 | 335 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 9 | 14 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 33 | 24 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
Warrant liabilities | 0 | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (26) | |
Derivative financial instruments, liabilities | (1) | (6) |
Estimated Fair Value | Level 3 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | |
Estimated Fair Value | Level 3 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Estimated Fair Value | Level 3 | Company controlled deposits | ||
Liabilities | ||
Deposits | $ 0 | $ 0 |
Fair Value Measurements (Fair90
Fair Value Measurements (Fair Value Option Disclosures) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | $ 4,763 | $ 4,763 | $ 3,196 | ||
Fair Value | 4,920 | 4,920 | 3,217 | ||
Fair Value Over / (Under) Unpaid Principal Balance | 157 | 157 | 21 | ||
Litigation settlement | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Litigation settlement payment amount | 118 | ||||
Nonperforming | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 10 | 10 | 21 | ||
Fair Value | 8 | 8 | 15 | ||
Fair Value Over / (Under) Unpaid Principal Balance | (2) | (2) | (6) | ||
Performing | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 4,753 | 4,753 | 3,175 | ||
Fair Value | 4,912 | 4,912 | 3,202 | ||
Fair Value Over / (Under) Unpaid Principal Balance | 159 | 159 | 27 | ||
Loans held-for-sale | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 4,746 | 4,746 | 3,105 | ||
Fair Value | 4,907 | 4,907 | 3,145 | ||
Fair Value Over / (Under) Unpaid Principal Balance | 161 | 161 | 40 | ||
Loans held-for-sale | Nonperforming | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 4 | 4 | 2 | ||
Fair Value | 4 | 4 | 2 | ||
Fair Value Over / (Under) Unpaid Principal Balance | 0 | 0 | 0 | ||
Loans held-for-sale | Performing | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 4,742 | 4,742 | 3,103 | ||
Fair Value | 4,903 | 4,903 | 3,143 | ||
Fair Value Over / (Under) Unpaid Principal Balance | 161 | 161 | 40 | ||
Loans held-for-investment | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 17 | 17 | 91 | ||
Fair Value | 13 | 13 | 72 | ||
Fair Value Over / (Under) Unpaid Principal Balance | (4) | (4) | (19) | ||
Loans held-for-investment | Nonperforming | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 6 | 6 | 19 | ||
Fair Value | 4 | 4 | 13 | ||
Fair Value Over / (Under) Unpaid Principal Balance | (2) | (2) | (6) | ||
Loans held-for-investment | Performing | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Unpaid Principal Balance | 11 | 11 | 72 | ||
Fair Value | 9 | 9 | 59 | ||
Fair Value Over / (Under) Unpaid Principal Balance | (2) | (2) | (13) | ||
Litigation settlement | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Fair Value, Option, Contractual Principal Outstanding, Liabilities | (118) | (118) | (118) | ||
Long-term Debt, Fair Value | (60) | (60) | (60) | ||
Fair Value, Option, Aggregate Differences, Long-term Debt Instruments | 58 | 58 | $ 58 | ||
Net gain on loan sales | Loans held-for-sale | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Changes in fair value, gain (loss) | 92 | $ 151 | 260 | $ 440 | |
Other noninterest income | Loans held-for-investment | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Changes in fair value, gain (loss) | 0 | 0 | 1 | (2) | |
Other noninterest income | Litigation settlement | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Changes in fair value, gain (loss) | $ 0 | $ 24 | $ 0 | $ 24 |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)segment | Sep. 30, 2016USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of operating segments | segment | 3 | |||
Summary of Operations | ||||
Net interest income | $ 103 | $ 80 | $ 283 | $ 236 |
Net gain (loss) on loan sales | 75 | 94 | 189 | 259 |
Representation and warranty benefit | 4 | 6 | 11 | 12 |
Other noninterest income | 51 | 56 | 146 | 118 |
Total net interest income and noninterest income | 233 | 236 | 629 | 625 |
(Provision) benefit for loan losses | (2) | (7) | (4) | 9 |
Depreciation and amortization expense | (10) | (8) | (28) | (23) |
Other noninterest expense | (161) | (134) | (437) | (395) |
Total noninterest expense | (171) | (142) | (465) | (418) |
Income before income taxes | 60 | 87 | 160 | 216 |
Provision for income taxes | 20 | 30 | 52 | 73 |
Net income | 40 | 57 | 108 | 143 |
Average balances | ||||
Loans held-for-sale | 4,476 | 3,416 | 4,014 | 3,071 |
Loans with government guarantees | 264 | 432 | 300 | 450 |
Loans held-for-investment | 6,803 | 5,848 | 6,227 | 5,695 |
Total assets | 16,439 | 14,148 | 15,406 | 13,711 |
Deposits | 9,005 | 9,126 | 8,847 | 8,603 |
Intersegment Eliminations | ||||
Summary of Operations | ||||
Total net interest income and noninterest income | 0 | 0 | 0 | 0 |
Community Banking | ||||
Summary of Operations | ||||
Net interest income | 63 | 54 | 171 | 150 |
Net gain (loss) on loan sales | (4) | (1) | (7) | 8 |
Representation and warranty benefit | 0 | 0 | 0 | 0 |
Other noninterest income | 9 | 8 | 23 | 21 |
Total net interest income and noninterest income | 68 | 61 | 187 | 179 |
(Provision) benefit for loan losses | (1) | (7) | (3) | 9 |
Depreciation and amortization expense | (2) | (1) | (6) | (5) |
Other noninterest expense | (49) | (43) | (138) | (131) |
Total noninterest expense | (51) | (44) | (144) | (136) |
Income before income taxes | 16 | 10 | 40 | 52 |
Provision for income taxes | 6 | 3 | 14 | 18 |
Net income | 10 | 7 | 26 | 34 |
Average balances | ||||
Loans held-for-sale | 14 | 16 | 16 | 83 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 6,764 | 5,843 | 6,191 | 5,689 |
Total assets | 6,843 | 5,904 | 6,262 | 5,798 |
Deposits | 7,498 | 7,273 | 7,438 | 7,080 |
Community Banking | Intersegment Eliminations | ||||
Summary of Operations | ||||
Total net interest income and noninterest income | (4) | (1) | (5) | (2) |
Mortgage Originations | ||||
Summary of Operations | ||||
Net interest income | 34 | 24 | 96 | 67 |
Net gain (loss) on loan sales | 79 | 95 | 196 | 251 |
Representation and warranty benefit | 4 | 6 | 11 | 12 |
Other noninterest income | 23 | 4 | 66 | 15 |
Total net interest income and noninterest income | 140 | 129 | 369 | 345 |
(Provision) benefit for loan losses | (1) | 0 | (3) | 0 |
Depreciation and amortization expense | (2) | (2) | (5) | (4) |
Other noninterest expense | (90) | (66) | (227) | (188) |
Total noninterest expense | (92) | (68) | (232) | (192) |
Income before income taxes | 47 | 61 | 134 | 153 |
Provision for income taxes | 16 | 22 | 47 | 54 |
Net income | 31 | 39 | 87 | 99 |
Average balances | ||||
Loans held-for-sale | 4,462 | 3,400 | 3,998 | 2,988 |
Loans with government guarantees | 264 | 432 | 300 | 450 |
Loans held-for-investment | 10 | 5 | 7 | 6 |
Total assets | 5,743 | 4,835 | 5,307 | 4,328 |
Deposits | 0 | 0 | 0 | 0 |
Mortgage Originations | Intersegment Eliminations | ||||
Summary of Operations | ||||
Total net interest income and noninterest income | 2 | (1) | 3 | (1) |
Mortgage Servicing | ||||
Summary of Operations | ||||
Net interest income | 7 | 7 | 16 | 17 |
Net gain (loss) on loan sales | 0 | 0 | 0 | 0 |
Representation and warranty benefit | 0 | 0 | 0 | 0 |
Other noninterest income | 11 | 13 | 40 | 41 |
Total net interest income and noninterest income | 18 | 20 | 56 | 58 |
(Provision) benefit for loan losses | 0 | 0 | 0 | 0 |
Depreciation and amortization expense | (1) | 0 | (3) | (2) |
Other noninterest expense | (22) | (25) | (71) | (70) |
Total noninterest expense | (23) | (25) | (74) | (72) |
Income before income taxes | (5) | (5) | (18) | (14) |
Provision for income taxes | (1) | (2) | (6) | (5) |
Net income | (4) | (3) | (12) | (9) |
Average balances | ||||
Loans held-for-sale | 0 | 0 | 0 | 0 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 0 | 0 | 0 | 0 |
Total assets | 30 | 26 | 36 | 36 |
Deposits | 1,507 | 1,853 | 1,409 | 1,523 |
Mortgage Servicing | Intersegment Eliminations | ||||
Summary of Operations | ||||
Total net interest income and noninterest income | 5 | 6 | 14 | 18 |
Other | ||||
Summary of Operations | ||||
Net interest income | (1) | (5) | 0 | 2 |
Net gain (loss) on loan sales | 0 | 0 | 0 | 0 |
Representation and warranty benefit | 0 | 0 | 0 | 0 |
Other noninterest income | 8 | 31 | 17 | 41 |
Total net interest income and noninterest income | 7 | 26 | 17 | 43 |
(Provision) benefit for loan losses | 0 | 0 | 2 | 0 |
Depreciation and amortization expense | (5) | (5) | (14) | (12) |
Other noninterest expense | 0 | 0 | (1) | (6) |
Total noninterest expense | (5) | (5) | (15) | (18) |
Income before income taxes | 2 | 21 | 4 | 25 |
Provision for income taxes | (1) | 7 | (3) | 6 |
Net income | 3 | 14 | 7 | 19 |
Average balances | ||||
Loans held-for-sale | 0 | 0 | 0 | 0 |
Loans with government guarantees | 0 | 0 | 0 | 0 |
Loans held-for-investment | 29 | 0 | 29 | 0 |
Total assets | 3,823 | 3,383 | 3,801 | 3,549 |
Deposits | 0 | 0 | 0 | 0 |
Other | Intersegment Eliminations | ||||
Summary of Operations | ||||
Total net interest income and noninterest income | $ (3) | $ (4) | $ (12) | $ (15) |