Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2017 | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | FLAGSTAR BANCORP INC |
Entity Central Index Key | 1,033,012 |
Document Type | 8-K |
Document Period End Date | Dec. 31, 2017 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash | $ 122 | $ 84 |
Interest-earning deposits | 82 | 74 |
Total cash and cash equivalents | 204 | 158 |
Investment securities available-for-sale | 1,853 | 1,480 |
Investment securities held-to-maturity | 939 | 1,093 |
Loans held-for-sale ($4,300 and $3,145 measured at fair value, respectively) | 4,321 | 3,177 |
Loans held-for-investment ($12 and $72 measured at fair value, respectively) | 7,713 | 6,065 |
Loans with government guarantees | 271 | 365 |
Less: allowance for loan losses | (140) | (142) |
Total loans held-for-investment and loans with government guarantees, net | 7,844 | 6,288 |
Mortgage servicing rights | 291 | 335 |
Net deferred tax asset | 136 | 286 |
Federal Home Loan Bank stock | 303 | 180 |
Premises and equipment, net | 330 | 275 |
Other assets | 691 | 781 |
Total assets | 16,912 | 14,053 |
Liabilities and Stockholders’ Equity | ||
Noninterest bearing deposits | 2,049 | 2,077 |
Interest bearing deposits | 6,885 | 6,723 |
Total deposits | 8,934 | 8,800 |
Short-term Federal Home Loan Bank advances | 4,260 | 1,780 |
Long-term Federal Home Loan Bank advances | 1,405 | 1,200 |
Other long-term debt | 494 | 493 |
Representation and warranty reserve | 15 | 27 |
Other liabilities ($60 and $60 measured at fair value, respectively) | 405 | 417 |
Total liabilities | 15,513 | 12,717 |
Stockholders’ Equity | ||
Common stock $0.01 par value, 80,000,000 and 70,000,000 shares authorized; 57,321,228 and 56,824,802 shares issued and outstanding, respectively | 1 | 1 |
Additional paid in capital | 1,512 | 1,503 |
Accumulated other comprehensive (loss) income | (16) | (7) |
Accumulated deficit | (98) | (161) |
Total stockholders’ equity | 1,399 | 1,336 |
Total liabilities and stockholders’ equity | $ 16,912 | $ 14,053 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Loans held-for-sale, fair value | $ 4,300 | $ 3,145 |
Loans held-for-investment, fair value | 12 | 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) | 57,321,228 | 56,824,802 |
Common stock, shares outstanding (in shares) | 57,321,228 | 56,824,802 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Interest Income | |||
Loans | $ 446 | $ 348 | $ 295 |
Investment securities | 80 | 68 | 59 |
Interest-earning deposits and other | 1 | 1 | 1 |
Total interest income | 527 | 417 | 355 |
Interest Expense | |||
Deposits | 52 | 46 | 42 |
Short-term Federal Home Loan Bank advances and other | 36 | 5 | 1 |
Long-term Federal Home Loan Bank advances | 24 | 27 | 18 |
Other long-term debt | 25 | 16 | 7 |
Total interest expense | 137 | 94 | 68 |
Net interest income | 390 | 323 | 287 |
Provision (benefit) for loan losses | 6 | (8) | (19) |
Net interest income after provision (benefit) for loan losses | 384 | 331 | 306 |
Noninterest Income | |||
Net gain on loan sales | 268 | 316 | 288 |
Loan fees and charges | 82 | 76 | 67 |
Deposit fees and charges | 18 | 22 | 25 |
Loan administration income | 21 | 18 | 26 |
Net return (loss) on mortgage servicing rights | 22 | (26) | 28 |
Representation and warranty benefit | 13 | 19 | 19 |
Other noninterest income | 46 | 62 | 17 |
Total noninterest income | 470 | 487 | 470 |
Noninterest Expense | |||
Compensation and benefits | 299 | 269 | 237 |
Commissions | 72 | 55 | 39 |
Occupancy and equipment | 103 | 85 | 81 |
Loan processing expense | 57 | 55 | 52 |
Legal and professional expense | 30 | 29 | 36 |
Other noninterest expense | 82 | 67 | 91 |
Total noninterest expense | 643 | 560 | 536 |
Income (loss) before overhead allocations and income taxes | 211 | 258 | 240 |
Provision for income taxes | 148 | 87 | 82 |
Net income | $ 63 | $ 171 | $ 158 |
Net income per share | |||
Basic (in usd per share) | $ 1.11 | $ 2.71 | $ 2.27 |
Diluted (in usd per share) | $ 1.09 | $ 2.66 | $ 2.24 |
Weighted average shares outstanding | |||
Basic (in shares) | 57,093,868 | 56,569,307 | 56,426,977 |
Diluted (in shares) | 58,178,343 | 57,597,667 | 57,164,523 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 63 | $ 171 | $ 158 |
Other comprehensive income (loss), net of tax | |||
Investment securities | (10) | (13) | (3) |
Derivatives and hedging activities | 1 | 4 | (3) |
Other comprehensive income (loss), net of tax | (9) | (9) | (6) |
Comprehensive income | $ 54 | $ 162 | $ 152 |
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 (in shares) at Dec. 31, 2014 | 266,657 | 56,332,307 | ||||
Beginning Balance at Dec. 31, 2014 | $ 1,373 | $ 267 | $ 1 | $ 1,482 | $ 8 | $ (385) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 158 | 158 | ||||
Total other comprehensive income (loss) | (6) | (6) | ||||
Accretion of preferred stock (in shares) | 150,951 | |||||
Accretion of preferred stock | (3) | $ 0 | 3 | 0 | ||
Stock-based compensation (in shares) | 0 | |||||
Stock-based compensation | 1 | 1 | ||||
Ending Balance (in shares) at Dec. 31, 2015 | 266,657 | 56,483,258 | ||||
Ending balance at Dec. 31, 2015 | 1,529 | $ 267 | $ 1 | 1,486 | 2 | (227) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 171 | 171 | ||||
Total other comprehensive income (loss) | (9) | (9) | ||||
Preferred stock redemption (in shares) | (266,657) | |||||
Preferred stock redemption | (267) | $ (267) | ||||
Dividends on preferred stock | (105) | (105) | ||||
Warrant exercise (in shares) | 0 | |||||
Warrant exercise | 6 | 6 | ||||
Stock-based compensation (in shares) | 341,544 | |||||
Stock-based compensation | 11 | 11 | ||||
Ending Balance (in shares) at Dec. 31, 2016 | 0 | 56,824,802 | ||||
Ending balance at Dec. 31, 2016 | 1,336 | $ 0 | $ 1 | 1,503 | (7) | (161) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 63 | 63 | ||||
Total other comprehensive income (loss) | (9) | (9) | ||||
Warrant exercise (in shares) | 154,313 | |||||
Warrant exercise | 4 | 4 | 0 | |||
Shares issued from Employee Stock Purchase Plan | 48,032 | |||||
Stock-based compensation (in shares) | 294,081 | |||||
Stock-based compensation | 5 | 5 | ||||
Ending Balance (in shares) at Dec. 31, 2017 | 0 | 57,321,228 | ||||
Ending balance at Dec. 31, 2017 | $ 1,399 | $ 0 | $ 1 | $ 1,512 | $ (16) | $ (98) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Operating Activities | ||||
Net income | $ 63,000,000 | $ 171,000,000 | $ 158,000,000 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 40,000,000 | 32,000,000 | 24,000,000 | |
Representation and warranty (benefit) | (13,000,000) | (19,000,000) | (19,000,000) | |
Provision (benefit) for loan losses | 6,000,000 | (8,000,000) | (19,000,000) | |
Changes in valuation allowance on DTAs | 0 | 2,000,000 | 11,000,000 | |
Net gain on loan and asset sales | (268,000,000) | (314,000,000) | (288,000,000) | |
Proceeds from sales of HFS | 9,245,000,000 | 16,168,000,000 | 18,467,000,000 | |
Origination, premium paid and purchase of loans, net of principal repayments | (34,235,000,000) | (32,295,000,000) | (28,008,000,000) | |
Change in fair value and other non-cash changes | (280,000,000) | (168,000,000) | (132,000,000) | |
Net change in: | ||||
Accrued interest receivable | (11,000,000) | (1,000,000) | (8,000,000) | |
Deferred income taxes | 150,000,000 | 76,000,000 | 67,000,000 | |
Other assets, excludes purchase of other investments | 23,000,000 | (39,000,000) | 239,000,000 | |
Other liabilities | (42,000,000) | 55,000,000 | (11,000,000) | |
Net cash (used in) operating activities | (25,322,000,000) | (16,340,000,000) | (9,519,000,000) | |
Investing Activities | ||||
Proceeds from sale of AFS securities including loans that have been securitized | 24,646,000,000 | 17,422,000,000 | 9,098,000,000 | |
Collection of principal on investment securities AFS | 218,000,000 | 187,000,000 | 218,000,000 | |
Purchase of investment securities AFS and other | (904,000,000) | (680,000,000) | (1,148,000,000) | |
Collection of principal on investment securities HTM | 154,000,000 | 190,000,000 | 85,000,000 | |
Purchase of investment securities HTM and other | 0 | (15,000,000) | (217,000,000) | |
Proceeds received from the sale of LHFI | 104,000,000 | 229,000,000 | 946,000,000 | |
Net origination, purchase, and principal repayments of LHFI | (1,760,000,000) | (1,054,000,000) | (3,106,000,000) | |
Purchase of bank owned life insurance | (50,000,000) | (85,000,000) | (175,000,000) | |
Net purchase of FHLB stock | (123,000,000) | (10,000,000) | (15,000,000) | |
Acquisition of premises and equipment, net of proceeds | (97,000,000) | (52,000,000) | (46,000,000) | |
Proceeds from the sale of MSRs | 309,000,000 | 69,000,000 | 245,000,000 | |
Other, net | (3,000,000) | 0 | 0 | |
Net cash provided by investing activities | 22,494,000,000 | 16,201,000,000 | 5,885,000,000 | |
Financing Activities | ||||
Net change in deposit accounts | 134,000,000 | 866,000,000 | 866,000,000 | |
Net change in short term FHLB borrowings and other short-term debt | 2,480,000,000 | (336,000,000) | 1,902,000,000 | |
Proceeds from increases in FHLB long-term advances and other debt | 255,000,000 | 445,000,000 | 1,500,000,000 | |
Repayment of long-term FHLB advances | (50,000,000) | (425,000,000) | (375,000,000) | |
Repayment of trust preferred securities and long-term debt | 0 | 0 | (88,000,000) | |
Net receipt of payments of loans serviced for others | 22,000,000 | (64,000,000) | (76,000,000) | |
Preferred stock dividends | 0 | (105,000,000) | 0 | |
Redemption of preferred stock | 0 | (267,000,000) | 0 | |
Net receipt (disbursement) of escrow payments | 3,000,000 | (5,000,000) | 5,000,000 | |
Other | (1,000,000) | 0 | 0 | |
Net cash provided by financing activities | 2,843,000,000 | 109,000,000 | 3,734,000,000 | |
Net increase (decrease) in cash, cash equivalents and restricted cash (1) | [1] | 15,000,000 | (30,000,000) | 100,000,000 |
Beginning cash, cash equivalents and restricted cash | [1] | 208,000,000 | 238,000,000 | 138,000,000 |
Ending cash, cash equivalents and restricted cash | [1] | 223,000,000 | 208,000,000 | 238,000,000 |
Supplemental disclosure of cash flow information | ||||
Interest paid on deposits and other borrowings | 136,000,000 | 112,000,000 | 58,000,000 | |
Income tax payments | 5,000,000 | 7,000,000 | 6,000,000 | |
Non-cash reclassification of investment securities AFS to HTM | 0 | 0 | 1,112,000,000 | |
Non-cash reclassification of LHFI to LHFS | 131,000,000 | 1,331,000,000 | 1,140,000,000 | |
Non-cash reclassification of mortgage loans HFS to HFI | 1,000,000 | 2,000,000 | 30,000,000 | |
Non-cash reclassification of mortgage LHFS to AFS securities | 24,345,000,000 | 17,130,000,000 | 8,853,000,000 | |
Non-cash reclassification of loans with government guarantees to other assets | 0 | 0 | 373,000,000 | |
MSRs resulting from sale or securitization of loans | $ 288,000,000 | $ 228,000,000 | $ 260,000,000 | |
[1] | For further information on restricted cash, see Note 11 - Derivatives. |
Description of Business, Basis
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies | Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies Description of Business Flagstar Bancorp, Inc., is a savings and loan holding company founded in 1993. The Company's business is primarily conducted through its principal subsidiary, Flagstar Bank, FSB (the "Bank"), a federally chartered stock savings bank founded in 1987. We are one of the largest banks headquartered in Michigan. When we refer to "Flagstar", "the Company", "we", "our", or "us," we mean Flagstar Bancorp, Inc. and our consolidated subsidiaries. The Company is subject to regulation, examination and supervision by the Board of Governors of the Federal Reserve ("Federal Reserve"). The Bank is subject to regulation, examination and supervision by the OCC of the U.S. Department of the Treasury, the CFPB and the FDIC. The Bank is a member of the FHLB of Indianapolis and its deposits are insured by the FDIC through the Deposit Insurance Fund. Consolidation and Basis of Presentation The accounting and financial reporting policies of us and our subsidiaries conform to accounting principles generally accepted in the United States. Additionally, where applicable the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities. Certain prior period amounts have been reclassified to conform to the current period presentation. The preparation of the Consolidated Financial Statements, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, revenues and expenses and disclosures of contingent assets and liabilities. Actual results could be materially different from these estimates. Subsequent Events We have evaluated all subsequent events for potential recognition and disclosure through the filing date of this Form 10-K. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from correspondent banks and the FRB, and short-term investments that have a maturity at the date of acquisition of three months or less and are readily convertible to cash. Investment Securities We measure securities classified as AFS at fair value, with unrealized gains and losses, net of tax, included in other comprehensive income (loss) in stockholders’ equity. We recognize realized gains and losses on AFS securities when securities are sold. The cost of securities sold is based on the specific identification method. Any gains or losses realized upon the sale of a security are reported in other noninterest income in the Consolidated Statements of Operations. The fair value of investment securities is based on observable market prices, when available. If observable market prices are not available, our valuations are based on alternative methods, including: quotes for similar fixed-income securities, matrix pricing, or discounted cash flow methods. The fair values, obtained through an independent third party utilizing a pricing service, are compared to independent pricing sources on a quarterly basis. For further information, see Note 2 - Investment Securities and Note 22 - Fair Value Measurements. Investment securities HTM are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the interest method. Transfers of investment securities into the HTM category from the AFS category are accounted for at fair value at the date of transfer. Any related unrealized holding gain (loss), net of tax, that was included in the transfer is retained in other comprehensive income (loss) and is amortized as an adjustment to interest income over the remaining life of the securities. We evaluate AFS and HTM investment securities for OTTI 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) does 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). For the years ended December 31, 2015 through December 31, 2017, we did not recognize any OTTI losses. Investment securities transactions are recorded on the trade date for purchases and sales. Interest earned on investment securities, including the amortization of premiums and the accretion of discounts are determined using the effective interest method over the period of maturity, recorded in interest income in the Consolidated Statements of Operations. For further information, see Note 2 - Investment Securities. Loans Held-for-Sale We classify loans as LHFS when we originate or purchase loans that we intend to sell. We have elected the fair value option for the majority of our LHFS. We estimate the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral. LHFS that are recorded at lower of cost or fair value may be carried at fair value on a nonrecurring basis when the fair value is less than cost. For further information, see Note 22 - Fair Value Measurements. Loans that are transferred into the LHFS portfolio from the LHFI portfolio, due to a change in intent, are recorded at the lower of cost or fair value. Gains or losses recognized upon the sale of loans are determined using the specific identification method. Loans Held-for-Investment We classify loans that we have the intent and ability to hold for the foreseeable future or until maturity as LHFI. Loans held-for-investment are reported at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and costs. Premiums and discounts on purchased loans and non-refundable loan origination and commitment fees, net of direct costs of originating or acquiring loans, are deferred and recognized over the estimated lives of the related loans as an adjustment to the loans’ effective yield, which is included in interest income on loans in the Consolidated Statements of Operations. Loans originally classified as LHFS, for which we have elected the fair value option, and subsequently transferred to LHFI continue to be measured and reported at fair value on a recurring basis. Changes in fair value are recorded to other noninterest income on the Consolidated Statements of Operations. The fair value of these loans is determined using the same methods described above for LHFS. For further information, see Note 22 - Fair Value Measurements. When loans originally classified as LHFS or as LHFI are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the Consolidated Statements of Cash Flows as operating or investing, as appropriate, in accordance with the initial classification of the loans. Past Due and Impaired Loans 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. Loans are considered impaired if it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement or when any portion of principal or interest is 90 days past due. This classification includes both performing and nonperforming modified loans. For further information, see Note 4 - Loans Held-for-Investment. When a loan is considered impaired, the accrual of interest income is discontinued until the receipt of principal and interest is no longer in doubt. Interest income is recognized on impaired loans using a cost recovery method unless amounts contractually due are not in doubt. Cash received on impaired loans are applied entirely against principal until the loan has been collected in full, after which time any additional cash receipts are recognized as interest income. Loan Modifications (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. Allowance for Loan Losses The allowance for loan losses represents management's estimate of probable losses in our LHFI portfolio, excluding loans carried under the fair value option. We establish an allowance when (a) available information indicates that it is probable that a loss has occurred and (b) the amount of the loss can be reasonably estimated. The allowance provides for probable losses that have been identified with specific customer relationships (individually evaluated) and for probable losses believed to be inherent in the loan portfolio but that have not been specifically identified (collectively evaluated). Management assigns qualitative factors to each loan portfolio segment based on consideration of the following factors: changes in lending policies and procedures, changes in economic and business conditions, changes in the nature and volume of the portfolio, changes in lending management, changes in credit quality statistics, changes in the quality of the loan review system, changes in the value of underlying collateral for collateral-dependent loans, changes in concentrations of credit, and other internal or external factor changes. A specific allowance is established on impaired loans when it is probable all amounts due will not be collected pursuant to the original contractual terms of the loan and the recorded investment in the loan exceeds its fair value. The required allowance is measured using either the present value of the expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral less estimated disposal costs if the loan is collateral dependent. A general allowance is established for losses inherent on non-impaired loans by segmenting the portfolio based upon common risk characteristics. The general loss is then determined by using a historical loss model which utilizes our loss history by specific product, or if the product is not sufficiently seasoned, per readily available industry peer loss data. The loss model utilizes a loss emergence period that represents the average amount of time between when the loss event first occurs and when the specific loan is charged-off. In addition to the loss history or peer data, we also include a qualitative adjustment that considers economic risks, industry and geographic concentrations and other factors not adequately captured in our methodology. Consumer loans secured by real estate are charged-off to the estimated fair value of the collateral when a loss is confirmed or at 180 days past due, whichever is sooner. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure or receipt of an asset valuation indicating a collateral deficiency and the asset is the sole source of repayment. For consumer loans not secured by real estate, the charge-off is taken upon the earlier of the confirmation of a loss or 120 days past due. Commercial loans are evaluated on a loan level basis and either charged-off or written down to net realizable value if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment. Transfers of Financial Assets Our recognition of gain or loss on the sale of loans for which we surrender control is accounted for as a sale to the extent that 1) the transferred assets are legally isolated from us or our consolidated affiliates, even in bankruptcy or other receivership, 2) the transferee has the right to pledge or exchange the assets with no conditions that constrain the transferee and provide more than a trivial benefit to the Company, and 3) we do not maintain the obligation or unilateral ability to reclaim or repurchase the assets. If the sale criteria are met, the transferred financial assets are removed from the Consolidated Statements of Financial Condition and a gain or loss on sale is recognized. Variable Interest Entities An entity that has a controlling financial interest in a variable interest entity ("VIE") is referred to as the primary beneficiary and consolidates the VIE. An entity is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. For further information, see Note 7 - Variable Interest Entities. Repossessed Assets Repossessed assets include one-to-four family residential property, commercial property and one-to-four family homes under construction that were acquired through foreclosure or acceptance of a deed-in-lieu of foreclosure. Repossessed assets are initially recorded in other assets at the estimated fair value of the collateral less estimated costs to sell. Losses arising from the initial acquisition of such properties are charged against the ALLL at the time of transfer. Subsequent valuation adjustments to reflect fair value, as well as gains and losses on disposal of these properties, are charged to other noninterest expense within noninterest expense in the Consolidated Statements of Operations as incurred. For further information, see Note 6 - Repossessed Assets and Note 22 - Fair Value Measurements. Loans with Government Guarantees We originate government guaranteed loans which are pooled and sold as Ginnie Mae MBS. Pursuant to Ginnie Mae servicing guidelines, we have the unilateral right to repurchase loans 90 days or more past due securitized in Ginnie Mae pools. As a result, once the delinquency criteria have been met, and regardless of whether the repurchase option has been exercised, we account for the loans as if they had been repurchased. We recognize the loans and corresponding liability as loans with government guarantees and other liabilities, respectively, in the Consolidated Statements of Financial Condition. If the loan is repurchased, the liability is cash settled and the loan with government guarantee remains. Once repurchased, we may collect losses through a claims process with the government agency, as an approved lender. Federal Home Loan Bank Stock We own stock in the FHLB of Indianapolis as required to permit us to obtain membership in and to borrow from the FHLB. No market quotes exist for the stock. The stock is redeemable at par and is carried at cost. Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation. Land is carried at historical cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets which generally ranges from three to thirty years. Capitalized software is amortized on a straight-line basis over its useful life, which generally ranges from three to seven years. Software expenditures, repair and maintenance costs that are considered general, administrative, or of a maintenance nature are expensed as incurred. Mortgage Servicing Rights We purchase and originate mortgage loans for sale to the secondary market and sell the loans on either a servicing-retained or servicing-released basis. If we retain the right to service the loan, an MSR is created at the time of sale which is recorded at fair value. We use an internal valuation model that utilizes an option-adjusted spread and other assumptions to determine the fair value of MSRs which include anticipated prepayment speeds (also known as the constant prepayment rate), product type (i.e., conventional, government, balloon), fixed or adjustable rate of interest, interest rate, term (i.e., 15 or 30 years), servicing costs per loan, discount rate and estimate of ancillary income such as late fees and prepayment fees. Management obtains third-party valuations of the MSR portfolio on a quarterly basis from independent valuation services to assess the reasonableness of the fair value calculated by our internal valuation model. Changes in the fair value of our mortgage servicing rights are reported on the Consolidated Statements of Operations in net return on mortgage servicing. For further information, see Note 10 - Mortgage Servicing Rights and Note 22 - Fair Value Measurements. We periodically enter into agreements to sell certain of our MSRs, which qualify as sales transactions. A transfer of servicing rights related to loans previously sold qualifies as a sale at the date on which title passes, if substantially all risks and rewards of ownership have irrevocably passed to the transferee and any protection provisions retained by the transferor are minor and can be reasonably estimated. In addition, if a sale is recognized and only minor protection provisions exist, a liability is accrued for the estimated obligation associated with those provisions. Servicing Fee Income Servicing fee income, late fees and ancillary fees received on loans for which we own the MSR, are included in the net return on mortgage servicing asset line of the Consolidated Statements of Operations. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. Subservicing fees, which are included in loan administration income on the Consolidated Statements of Operations are based on a contractual monthly amount per loan including late fees and other ancillary income. Derivatives We utilize derivative instruments to manage the fair value changes in our MSRs, interest rate lock commitments and LHFS portfolio which are exposed to price and interest rate risk, facilitate asset/liability management, minimize the variability of future cash flows on long-term debt, and to meet the needs of our customers. All derivatives are recognized on the Consolidated Statements of Financial Condition as other assets and liabilities, as applicable, at their estimated fair value. For those derivatives designated as qualified cash flow hedges, changes in the fair value of the derivatives, to the extent effective as a hedge, are recorded in accumulated other comprehensive income, net of income taxes, and reclassified into earnings concurrently with the earnings of the hedged item. For derivative instruments designated as qualified fair value hedges, which are used to hedge the exposure of fair value changes of an asset or liability attributable to a particular risk, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings during the period of the change in fair values. For all other derivatives, changes in the fair value of the derivative are recognized immediately in earnings. A majority of these derivatives are subject to master netting agreements and cleared through a Central Counterparty Clearing House, which mitigates non-performance risk with counterparties and enables us to settle activity on a net basis. We use interest rate swaps, swaptions, futures, and forward loan sale commitments to mitigate the impact of fluctuations in interest rates and interest rate volatility on the fair value of the MSRs. These derivatives are not designated as qualifying hedges. Accordingly, changes in their fair value are reflected in current period earnings under the net return on mortgage servicing asset. These derivatives are valued based on quoted prices for similar assets in an active market with inputs that are observable. We also enter into various derivative agreements with customers and correspondents in the form of interest-rate lock commitments and forward purchase contracts which are commitments to originate or purchase mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The derivatives are valued using internal models that utilize market interest rates and other unobservable inputs. Changes in the fair value of these commitments due to fluctuations in interest rates that are to be originated to our LHFS portfolio are economically hedged through the use of forward loan sale commitments of MBS. The gains and losses arising from this derivative activity are reflected in current period earnings under the net gain on loan sales. Interest rate lock commitments are valued using internal models with significant unobservable market parameters. Forward loan sale commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable. At certain times we may also enter into various derivative agreements with correspondents in the form of forward purchase contracts at the time the correspondent customer enters into an interest-rate lock commitment. The derivatives are valued using internal models that utilize market interest rates and other unobservable inputs. We utilize interest rate swaps to hedge the forecasted cash flows from our underlying variable-rate FHLB advances and forecasted FHLB advances in qualifying cash flow hedge accounting relationships. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income on the Consolidated Statement of Financial Condition and reclassified into interest expense concurrently with the interest expense on the debt. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. These hedges are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. For forecasted FHLB advances being hedged, we evaluate the likelihood of the transaction occurring based on the current facts and circumstances each reporting period to ensure the hedge relationship still qualifies for hedge accounting. If we de-designate a hedge relationship or determine that an interest rate swap no longer qualifies for hedge accounting changes in fair value are no longer recorded in other comprehensive income. If the hedged item remains probable to occur, the effective amounts previously recorded in other comprehensive income are recognized in earnings over the remaining life of the hedged item as an adjustment to yield. We also utilize interest rate swaps to manage fair value changes of our fixed-rate FHLB advances in a qualifying fair value hedge accounting relationship. Changes in the fair value of derivatives designated as fair value hedges, as well as the change in fair value of the hedged item, are recognized in current period earnings. The corresponding adjustment is recorded as a basis adjustment to the hedged item and hedging instrument. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. These hedges are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. If the Company determines an interest rate swap no longer qualifies for fair value hedge accounting or is de-designated, the hedged item will no longer be adjusted for changes in fair value and the amounts previously recorded as a basis adjustment are recognized in earnings over the remaining life of the hedged item as an adjustment to yield. If a previously hedged item is extinguished or sold, the remaining unamortized balance in other comprehensive income balance for prior cash flow hedges and the remaining basis adjustment of the hedged item for prior fair value hedges will be reclassified to current period earnings. To assist our customers in meeting their needs to manage interest rate risk, we enter into interest rate swap derivative contracts. To economically hedge this risk, we enter into offsetting derivative contracts to effectively eliminate the interest rate risk associated with these contracts. For additional information regarding the accounting for derivatives, see Note 11 - Derivative Financial Instruments and for additional information on recurring fair value disclosures, see Note 22 - Fair Value Measurements. Income Taxes We evaluate two components of income tax expense: current and deferred. Current income tax expense represents our estimated taxes to be paid or refunded for the current period. Deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. DTAs and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on DTAs and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We evaluate our DTAs to determine if, based on all available evidence, it is more likely than not that they will be realized. If it is determined that it is more likely than not that the deferred taxes will not be realized, we establish a valuation allowance. For further information, see Note 19 - Income Taxes. Representation and Warranty Reserve When we sell mortgage loans into the secondary mortgage market, we make customary representations and warranties to the purchasers about various characteristics of each loan, such as the manner of origination, the nature and extent of underwriting standards applied and the types of documentation being provided. For eligible loans sold to the Agencies after December 31, 2014, these representations and warranties generally expire after 36 months. Typically, all other representations and warranties are in place for the life of the loan. If a defect in the origination process is identified, we may be required to either repurchase the loan, pay a fee or indemnify the purchaser for losses it sustains on the loan. If there are no such defects, the Company has no liability to the purchaser for losses it may incur on such loan. Upon the sale of a loan, the Company recognizes a liability for that guarantee at its fair value as a reduction of our net gain on loan sales. Subsequent to the sale, the liability is re-measured on an ongoing basis based upon an estimate of probable future losses. In each case, these estimates are based on our most recent data including loss severity on repurchased and indemnified loans, repurchase requests and other factors. Changes to our previous estimates are recorded in the representation and warranty (provision) benefit in the Consolidated Statements of Operations. Advertising Costs Advertising costs are expensed in the period they are incurred and are included as part of other noninterest expense in the Consolidated Statements of Operations. Advertising expenses totaled $16 million , $11 million , and $9 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. Stock-Based Compensation All share-based payments to employees, including grants of employee stock options and restricted stock units, are classified as equity with expenses being recognized in compensation and benefits in the Consolidated Statements of Operations based on their fair values. The amount of compensation is measured at the grant date and is expensed over the requisite service period, which is normally the vesting period, and for the year ended December 31, 2017 , any forfeitures were recognized as they occurred. In addition to share-based payments to employees, the discount provided to employees through the Employee Stock Purchase Plan is also recognized as stock-based compensation. For further information, see Note 18 - Stock-Based Compensation. Department of Justice Litigation Settlement The executed settlement agreement with the DOJ representing the obligation to make future additional payments establishes a legally enforceable contract with a stipulated payment plan that meets the definition of a financial liability. We have elected the fair value option to account for this financial liability included in other liabilities on the Consolidated Financial Statements. For additional information on the valuation of the DOJ litigation settlement, see Note 22 - Fair Value Measurements. 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 y |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The following table presents our investment securities: Amortized Cost Gross Unrealized Gross Unrealized Fair Value (Dollars in millions) December 31, 2017 Available-for-sale securities Agency - Commercial $ 1,004 $ — $ (17 ) $ 987 Agency - Residential 811 — (17 ) 794 Municipal obligations 35 — (1 ) 34 Corporate debt obligations 37 1 — 38 Total available-for-sale securities (1) $ 1,887 $ 1 $ (35 ) $ 1,853 Held-to-maturity securities Agency - Commercial $ 526 $ — $ (9 ) $ 517 Agency - Residential 413 — (6 ) 407 Total held-to-maturity securities (1) $ 939 $ — $ (15 ) $ 924 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 December 31, 2017 or December 31, 2016 . Management evaluates our securities portfolio each quarter to determine if any security is considered to be other than temporarily impaired. In making this evaluation, management considers our ability and intent to hold securities to recover current market losses. During the years ended December 31, 2017 , 2016 and 2015 , we had no OTTI. Available-for-sale securities We purchased $904 million of AFS securities, which included U.S. government sponsored agency MBS, corporate debt obligations, and municipal obligations, during the year ended December 31, 2017 . We purchased $680 million of AFS securities, which included U.S. government sponsored agency MBS and municipal obligations during the year ended December 31, 2016 . During the year ended December 31, 2017 , we sold $289 million of U.S. government sponsored agency securities, which resulted in a gain of $3 million . During the year ended December 31, 2016 , we sold $291 million of U.S. government sponsored agency securities, which resulted in a gain of $4 million , compared to $170 million of U.S. government sponsored agencies, which resulted in a gain of $3 million during the year ended December 31, 2015 . Held-to-maturity securities There were no purchases of HTM securities during the year ended December 31, 2017 . We purchased $15 million of HTM securities, which included U.S. government sponsored agency MBS during the year ended December 31, 2016 . We purchased $217 million of HTM securities, which included agency-collateralized mortgage obligations during the year ended December 31, 2015 . We had no sales of HTM securities during the years ending December 31, 2017 , 2016 and 2015 , respectively. 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) December 31, 2017 Available-for-sale securities Agency - Commercial $ 218 20 $ (7 ) $ 744 41 $ (11 ) Agency - Residential 452 36 (14 ) 263 33 (3 ) Municipal obligations 6 3 — 22 9 — Corporate debt obligations — — — 3 1 — Held-to-maturity securities Agency - Commercial $ 348 25 $ (8 ) $ 99 8 $ (1 ) Agency - Residential 111 16 (3 ) 293 43 (3 ) 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 shows the 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) December 31, 2017 Due after one year through five years 10 10 2.58 % 35 35 2.48 % Due after five years through 10 years 45 46 4.85 % 26 26 2.52 % Due after 10 years 1,832 1,797 2.40 % 878 863 2.44 % Total $ 1,887 $ 1,853 $ 939 $ 924 We pledge investment securities, primarily municipal taxable and agency collateralized mortgage obligations, to collateralize lines of credit and/or borrowings. We had pledged investment securities of $2.0 billion , $879 million , and $14 million at December 31, 2017 , 2016 and 2015 , respectively. |
Loans Held-for-Sale
Loans Held-for-Sale | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Loans Held-for-Sale | Loans Held-for-Sale The majority of our mortgage loans originated as LHFS are sold into the secondary market on a whole loan basis or by securitizing the loans into agency, government, or private label mortgage-backed securities. At December 31, 2017 and 2016 , LHFS totaled $4.3 billion and $3.2 billion , respectively. For the years ended December 31, 2017 , 2016 and 2015 , we had net gains on loan sales associated with LHFS of $267 million , $301 million , and $288 million , respectively. At December 31, 2017 and 2016 , $21 million and $32 million , respectively, 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. |
Loans Held-for-Investment
Loans Held-for-Investment | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment The following table presents our Loans-held-for-investment: December 31, 2017 December 31, 2016 (Dollars in millions) Consumer loans Residential first mortgage $ 2,754 $ 2,327 Home Equity 664 443 Other 25 28 Total consumer loans 3,443 2,798 Commercial loans Commercial real estate (1) 1,932 1,261 Commercial and industrial 1,196 769 Warehouse lending 1,142 1,237 Total commercial loans 4,270 3,267 Total loans held-for-investment $ 7,713 $ 6,065 (1) Includes NBV of $307 million and $244 million of owner occupied commercial real estate loans at December 31, 2017 and December 31, 2016 , respectively. During the year ended December 31, 2017 , we sold performing and nonperforming consumer loans, with UPB of $127 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 on sale of $2 million which is recorded in net gain on loan sales on the Consolidated Statements of Operations. During the year ended December 31, 2016 , we sold performing residential first mortgage loans with UPB of $1.2 billion . Upon a change of our intent, the loans were transferred to LHFS and subsequently sold resulting in a net gain of $14 million which is recorded in net gain on loan sales on the Consolidated Statements of Operations. In addition, during the year ended December 31, 2016 , we sold nonperforming, TDR and non-agency loans with a UPB of $110 million . Upon a change of our intent, the loans were transferred to LHFS and subsequently sold resulting in a loss of $2 million which is recorded in net gain on sale of assets on the Consolidated Statements of Operations. During the year ended December 31, 2015 , we sold performing and nonperforming residential first mortgage loans with UPB totaling $1.0 billion , of which $436 million were nonperforming. Upon a change in our intent, the loans were transferred to LHFS and subsequently sold resulting in a gain on sale of $1 million , which is recorded in net gain on sale of assets on the Consolidated Statements of Operations. During the year ended December 31, 2017 , we purchased residential first mortgage loans with UPB of $8 million and HELOC loans with a UPB of $250 million . A premium of $9 million was associated with these loan purchases. During the year ended December 31, 2016 , we purchased jumbo residential first mortgage loans with a UPB of $175 million and a premium of $1 million . During the year ended December 31, 2015 , we purchased $197 million of HELOC loans with a premium of $7 million . None of the loans were impaired. We have pledged certain LHFI, LHFS, and loans with government guarantees to collateralize lines of credit and/or borrowings with the FRB of Chicago and the FHLB of Indianapolis. At December 31, 2017 and 2016 , we pledged $7.1 billion and $5.3 billion , respectively. 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) Year Ended December 31, 2017 Beginning balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Charge-offs (2) (8 ) (3 ) (2 ) (1 ) — — (14 ) Recoveries 1 2 1 1 1 — 6 Provision (benefit) (11 ) (1 ) 1 17 1 (1 ) 6 Ending balance ALLL $ 47 $ 22 $ 1 $ 45 $ 19 $ 6 $ 140 Year Ended December 31, 2016 Beginning balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 Charge-offs (2) (29 ) (4 ) (3 ) — — — (36 ) Recoveries 2 — 3 1 — — 6 Provision (benefit) (3) (24 ) (4 ) (1 ) 9 4 1 (15 ) Ending balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Year Ended December 31, 2015 Beginning balance ALLL $ 234 $ 31 $ 1 $ 17 $ 11 $ 3 $ 297 Charge-offs (87 ) (7 ) (4 ) — (3 ) — (101 ) Recoveries 3 2 3 2 — — 10 Provision (benefit) (34 ) 6 2 (1 ) 5 3 (19 ) Ending balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of $1 million , $8 million and $69 million related to the transfer and subsequent sale of loans during the years ended December 31, 2017 , December 31, 2016 and December 31, 2015 , respectively. Also includes charge-offs related to loans with government guarantees of $4 million , $14 million , and $3 million during the years ended December 31, 2017 , December 31, 2016 and December 31, 2015 , respectively. (3) Does not include $7 million for provision expense for loan losses recorded in the Consolidated Statements of Operations to reserve for repossessed loans with government guarantees at December 31, 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) December 31, 2017 Loans held-for-investment (2) Individually evaluated $ 34 $ 27 $ — $ — $ — $ — $ 61 Collectively evaluated 2,712 633 25 1,932 1,196 1,142 $ 7,640 Total loans $ 2,746 $ 660 $ 25 $ 1,932 $ 1,196 $ 1,142 $ 7,701 Allowance for loan losses (2) Individually evaluated $ 6 $ 10 $ — $ — $ — $ — $ 16 Collectively evaluated 41 12 1 45 19 6 124 Total allowance for loan losses $ 47 $ 22 $ 1 $ 45 $ 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. The following table sets forth the LHFI aging analysis of past due and current loans (for further information on our policy past due and impaired loans, see Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies): 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) December 31, 2017 Consumer loans Residential first mortgage $ 2 $ 2 $ 23 $ 27 $ 2,727 $ 2,754 Home equity 1 — 6 7 657 664 Other — — — — 25 25 Total consumer loans 3 2 29 34 3,409 3,443 Commercial loans Commercial real estate — — — — 1,932 1,932 Commercial and industrial — — — — 1,196 1,196 Warehouse lending — — — — 1,142 1,142 Total commercial loans — — — — 4,270 4,270 Total loans (2) $ 3 $ 2 $ 29 $ 34 $ 7,679 $ 7,713 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 days 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 December 31, 2017 and 2016 , respectively. Interest that would have been accrued on impaired loans totaled approximately $1 million , $2 million and $6 million during the years ended December 31, 2017 , 2016 and 2015 , respectively. At December 31, 2017 and 2016 , we had no loans 90 days or greater past due and still accruing interest. Troubled Debt Restructurings The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) December 31, 2017 Consumer loans (1) Residential first mortgage $ 19 $ 12 $ 31 Home equity 24 4 28 Total TDRs (2) $ 43 $ 16 $ 59 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 $13 million and $9 million at December 31, 2017 and 2016 , respectively. (2) Includes $3 million and $25 million of TDR loans accounted for under the fair value option at December 31, 2017 and 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 (Decrease) in Allowance at Modification (Dollars in millions) Year Ended December 31, 2017 Residential first mortgages 16 $ 4 $ 4 $ — Home equity (2)(3) 82 6 5 (1 ) Total TDR loans 98 $ 10 $ 9 $ (1 ) Year Ended December 31, 2016 Residential first mortgages 23 $ 4 $ 5 $ — Home equity (2)(3) 143 9 8 — Commercial & Industrial 1 2 1 — Total TDR loans 167 $ 15 $ 14 $ — Year Ended December 31, 2015 Residential first mortgages 325 $ 81 $ 80 $ (2 ) Home equity (2)(3) 370 21 18 — Other consumer 3 — — — Total TDR loans 698 $ 102 $ 98 $ (2 ) (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification UPB reflects write downs. (3) Includes loans carried at fair value option. The following table provides a summary of newly modified TDRs in the past 12 months that have been subsequently defaulted during the years ended December 31, 2017 , 2016 and 2015 . The UPB associated with the TDRs in each portfolio and in the aggregate was less than $1 million for all years presented. There was no increase or decrease in the allowance associated with these TDRs at subsequent default. All TDRs within consumer and commercial loan 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: Years Ended December 31, 2017 2016 2015 Number of Accounts Residential first mortgages 1 1 3 Home equity (1) 0 7 5 Total TDR loans 1 8 8 (1) HELOC post-modification UPB reflects write downs. Impaired Loans The following table presents individually evaluated impaired loans and the associated allowance: December 31, 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 $ 11 $ 12 $ — $ 6 $ 6 $ — Total loans with no related allowance recorded $ 11 $ 12 $ — $ 6 $ 6 $ — With an allowance recorded Consumer loans Residential first mortgage $ 22 $ 22 $ 6 $ 40 $ 40 $ 5 Home equity 24 27 10 29 29 8 Total loans with an allowance recorded $ 46 $ 49 $ 16 $ 69 $ 69 $ 13 Total impaired loans Consumer loans Residential first mortgage $ 33 $ 34 $ 6 $ 46 $ 46 $ 5 Home equity 24 27 10 29 29 8 Total impaired loans $ 57 $ 61 $ 16 $ 75 $ 75 $ 13 The following table presents average impaired loans and the interest income recognized: For the Years Ended December 31, 2017 2016 2015 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 $ 38 $ 1 $ 52 $ 1 $ 150 $ 5 Home equity 28 1 30 2 39 — Commercial loans Commercial and industrial — — 2 — 2 — Total impaired loans $ 66 $ 2 $ 84 $ 3 $ 191 $ 5 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. Due to the high probability of loss, doubtful assets are placed on non-accrual. 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. 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. 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. December 31, 2017 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,706 $ 23 $ — $ 25 $ 2,754 Home equity 633 25 — 6 664 Other Consumer 25 — — — 25 Total Consumer Loans $ 3,364 $ 48 $ — $ 31 $ 3,443 Commercial Loans Commercial Real Estate $ 1,902 $ 23 $ 7 $ — $ 1,932 Commercial and Industrial 1,135 32 24 5 1,196 Warehouse 1,014 128 — — 1,142 Total Commercial Loans $ 4,051 $ 183 $ 31 $ 5 $ 4,270 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 | 12 Months Ended |
Dec. 31, 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 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 or the U.S. Department of Veterans Affairs until claimed. Certain loans within our portfolio may be subject to indemnifications and insurance limits which exposes 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 December 31, 2017 and December 31, 2016 , respectively, loans with government guarantees totaled $271 million and $365 million . At December 31, 2017 , repossessed assets and the associated claims recorded in other assets totaled $84 million and at December 31, 2016 repossessed assets and the associated claims were $135 million . |
Repossessed Assets
Repossessed Assets | 12 Months Ended |
Dec. 31, 2017 | |
Repossessed Assets [Abstract] | |
Repossessed Assets | Repossessed Assets Repossessed assets include the following: December 31, 2017 2016 (Dollars in millions) One-to-four family properties $ 5 $ 11 Commercial properties 3 3 Total repossessed assets $ 8 $ 14 The following schedule provides the activity for repossessed assets: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Beginning balance $ 14 $ 17 $ 19 Additions, net 18 19 29 Disposals (14 ) (19 ) (24 ) Net (write down) gain on disposal (9 ) (2 ) — Transfers out (1 ) (1 ) (7 ) Ending balance $ 8 $ 14 $ 17 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 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 December 31, 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 December 31, 2017 and 2016 , the FSTAR 2007-1 mortgage securitization trust included 1,911 loans and 2,453 loans, respectively, with an aggregate principal balance of $65 million and $89 million , respectively. We have no other significant VIE involvement. |
Federal Home Loan Bank Stock
Federal Home Loan Bank Stock | 12 Months Ended |
Dec. 31, 2017 | |
Federal Home Loan Bank Stock [Abstract] | |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock Our investment in FHLB stock was $303 million at December 31, 2017 compared to $180 million at December 31, 2016 . As a member of the FHLB, we are required to hold shares of FHLB stock in an amount equal to at least one percent of the aggregate UPB of our mortgage loans, home purchase contracts and similar obligations at the beginning of each year or 4.5 percent of our total FHLB advances, whichever is greater. Once purchased, FHLB shares must be held for five years before they can be redeemed. We had $123 million , $10 million and $57 million in required stock purchases during the year ending December 31, 2017 , 2016 and 2015 , respectively. We had no redemptions of FHLB stock during the years ended December 31, 2017 , and 2016 and $42 million during the year ended December 31, 2015 . Dividends received on the stock equaled $9 million , $7 million and $6 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. These dividends were recorded in the Consolidated Statements of Operations as other noninterest income. |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and Equipment The following presents our premises and equipment balances and estimated useful lives: Estimated December 31, 2017 2016 (Dollars in millions) Land — $ 61 $ 59 Office buildings and improvements 15 — 31.5 years 159 153 Computer hardware and software 3 — 7 years 300 256 Furniture, fixtures and equipment 5 — 7 years 63 61 Leased equipment 3 — 10 years 40 4 Total 623 533 Less accumulated depreciation (293 ) (258 ) Premises and equipment, net $ 330 $ 275 Depreciation expense amounted to approximately $39 million , $31 million and $26 million , for the years ended December 31, 2017 , 2016 and 2015 , respectively. Operating Leases We conduct a portion of our business from leased facilities. Such leases are considered to be operating leases based on their terms. Lease rental expense totaled approximately $9 million , $5 million and $7 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. The following outlines our minimum contractual lease obligations: December 31, 2017 (Dollars in millions) 2018 $ 8 2019 7 2020 5 2021 3 2022 1 Thereafter 2 Total $ 26 |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 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. We account for MSRs at their fair value. A 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 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 regarding the derivative instruments utilized to manage our MSR risks, see Note 11 - Derivative Financial Instruments. Changes in the fair value of residential first mortgage MSRs were as follows: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Balance at beginning of period $ 335 $ 296 $ 258 Additions from loans sold with servicing retained 288 228 260 Reductions from sales (310 ) (84 ) (176 ) Changes in fair value due to (1) : Decrease in MSR value due to pay-offs, pay-downs, and run-off (22 ) (62 ) (43 ) Changes in estimates of fair value (2) — (43 ) (3 ) Fair value of MSRs at end of period $ 291 $ 335 $ 296 (1) Changes in fair value are included within net (loss) return on mortgage servicing rights 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: December 31, 2017 December 31, 2016 Fair value impact due to Fair value impact due to Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 6.29 % $ 286 $ 282 7.78 % $ 326 $ 318 Constant prepayment rate 9.93 % 283 277 16.68 % 322 311 Weighted average cost to service per loan $ 73.00 288 286 $ 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 information, see Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Standards and Note 22 - 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 mortgage servicing rights 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 60 $ 81 $ 69 Changes in fair value (2) (22 ) (109 ) (44 ) Gain (loss) on MSR derivatives (3) (8 ) — 5 Net transaction costs (8 ) 2 (2 ) Total (loss) return included in net return on mortgage servicing rights $ 22 $ (26 ) $ 28 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Includes a $4 million loss recorded to a payoff reserve during the year ended December 31, 2016 and $2 million gain related to the sale of MSRs during the year ended December 31, 2015 . (3) 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: For the Year Ended December 31, 2017 2016 2015 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 35 $ 29 $ 33 Other servicing charges (14 ) (11 ) (7 ) Total income on mortgage loans subserviced, included in loan administration $ 21 $ 18 $ 26 (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 | 12 Months Ended |
Dec. 31, 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 December 31, 2017 , we had $2 million (net-of-tax) of unrealized gains on derivatives classified 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 $2 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 December 31, 2017 . Cash flows and the profit impact associated with designated hedges are reported in the same category as the underlying hedged item. The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: December 31, 2017 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Liabilities Interest rate swaps on FHLB advances $ 830 $ 1 2023-2026 Derivatives not designated as hedging instruments: Assets Futures $ 1,597 $ — 2018-2022 Mortgage-backed securities forwards 2,646 4 2018 Rate lock commitments 3,629 24 2018 Interest rate swaps and swaptions 1,441 11 2018-2048 Total derivative assets $ 9,313 $ 39 Liabilities Futures $ 209 $ — 2018-2021 Mortgage-backed securities forwards 3,197 6 2018 Rate lock commitments 214 — 2018 Interest rate swaps 617 4 2018-2027 Total derivative liabilities $ 4,237 $ 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 December 31, 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) December 31, 2017 Derivatives designated as hedging instruments: Liabilities Interest rate swaps on FHLB advances (1) $ 1 $ — $ 1 $ — $ 17 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 4 $ — $ 4 $ — $ 8 Interest rate swaps and swaptions (1) 11 — 11 — 10 Total derivative assets $ 15 $ — $ 15 $ — $ 18 Liabilities Futures $ — $ — $ — $ — $ 2 Mortgage-backed securities forwards 6 — 6 — 2 Interest rate swaps (1) 4 — 4 — 5 Total derivative liabilities $ 10 $ — $ 10 $ — $ 9 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 December 31, 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. At December 31, 2017 , we pledged a total of $26 million related to derivative financial instruments, consisting of $7 million of cash collateral on derivative liabilities and $19 million of maintenance margin on centrally cleared derivatives and had an obligation to return cash of $18 million on derivative assets. We pledged a total of $54 million related to derivative financial instruments, consisting of $4 million of cash collateral on derivative liabilities and $50 million of maintenance margin on centrally cleared derivatives and had an obligation to return cash of $74 million on derivative assets at December 31, 2016 . We pledged a total of $41 million related to derivative financial instruments, consisting of $11 million of cash collateral on derivative liabilities and $30 million of maintenance margin on centrally cleared derivatives and had an obligation to return cash of $14 million on derivative assets at December 31, 2015. Within the Consolidated Statements of Financial Condition, the collateral related to derivative activity is included in other assets and other liabilities and the cash pledged as maintenance margin is restricted and included in other assets. The following table presents the net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain/(Loss) Futures Net return (loss) on mortgage servicing rights $ (1 ) $ — $ 6 Interest rate swaps and swaptions Net return (loss) on mortgage servicing rights (11 ) (5 ) (2 ) Mortgage-backed securities forwards Net return (loss) on mortgage servicing rights 4 5 1 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (34 ) 26 9 Forward commitments Other noninterest income — (2 ) (2 ) Interest rate swaps (1) Other noninterest income 2 4 2 Total derivative (loss) gain $ (40 ) $ 28 $ 14 (1) Includes customer-initiated commercial interest rate swaps. |
Deposit Accounts
Deposit Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
Deposit Accounts | Deposit Accounts The deposit accounts are as follows: December 31, 2017 2016 (Dollars in millions) Retail deposits Branch retail deposits Demand deposit accounts $ 931 $ 852 Savings accounts 3,482 3,824 Money market demand accounts 124 138 Certificates of deposit/CDARS 1,491 1,055 Total branch retail deposits 6,028 5,869 Commercial deposits Demand deposit account 288 282 Savings account 71 63 Money market demand accounts 69 109 Certificates of deposit/CDARS 2 1 Total commercial deposits 430 455 Total retail deposits subtotal 6,458 6,324 Government deposits Demand deposit accounts 251 250 Savings accounts 446 451 Certificates of deposit/CDARS 376 329 Total government deposits 1,073 1,030 Wholesale deposits 45 — Company controlled deposits 1,358 1,446 Total deposits $ 8,934 $ 8,800 The following indicates the scheduled maturities for certificates of deposit with a minimum denomination of $250,000 : December 31, 2017 2016 (Dollars in millions) Three months or less $ 159 $ 126 Over three months to six months 128 116 Over six months to twelve months 173 146 One to two years 167 34 Thereafter 31 27 Total $ 658 $ 449 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Home Loan Bank Advances The following is a breakdown of our FHLB advances outstanding: December 31, 2017 December 31, 2016 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 4,260 1.40 % $ 1,780 0.62 % Total Short-term Federal Home Loan Bank advances 4,260 1,780 Long-term LIBOR adjustable advances 1,130 1.76 % 1,025 1.12 % Long-term fixed rate advances (1) 275 1.41 % 175 1.12 % Total Long-term Federal Home Loan Bank advances 1,405 1,200 Total Federal Home Loan Bank advances $ 5,665 $ 2,980 (1) Includes the current portion of fixed rate advances of $125 million and $50 million at December 31, 2017 and December 31, 2016 , respectively. We settled $250 million in long-term fixed rate FHLB advances during the fourth quarter of 2016 . 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 December 31, 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 December 31, 2017 , we had $5.7 billion of advances outstanding and an additional $763 million of collateralized borrowing capacity available at 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 December 31, 2017 , $1.1 billion of the outstanding advances had an adjustable rate based on the three month LIBOR index. Interest rates on these advances reset every three months and the advances may be prepaid without penalty, with notification at scheduled three month intervals after an initial 12 month lockout period. The outstanding advances included $830 million in a cash flow hedge relationship as discussed in Note 11 - Derivative Financial Instruments. The following table contains detailed information on our FHLB advances and other borrowings: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Maximum outstanding at any month end $ 5,665 $ 3,557 $ 3,541 Average outstanding balance 4,590 2,833 1,811 Average remaining borrowing capacity 1,195 1,137 1,611 Weighted average interest rate 1.30 % 1.16 % 1.00 % The following table outlines the maturity dates of our FHLB advances and other borrowings: December 31, 2017 (Dollars in millions) 2018 $ 4,385 2019 50 2020 — 2021 — Thereafter 1,230 Total $ 5,665 Parent Company Senior Notes and Trust Preferred Securities The following table presents long-term debt, net of debt issuance costs: December 31, 2017 December 31, 2016 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 247 6.125 % $ 246 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus 3.25%, matures 2032 $ 26 4.92 % $ 26 4.25 % Plus 3.25%, matures 2033 26 4.61 % 26 4.13 % Plus 3.25%, matures 2033 26 4.94 % 26 4.25 % Plus 2.00%, matures 2035 26 3.36 % 26 2.88 % Plus 2.00%, matures 2035 26 3.36 % 26 2.88 % Plus 1.75%, matures 2035 51 3.34 % 51 2.71 % Plus 1.50%, matures 2035 25 2.86 % 25 2.38 % Plus 1.45%, matures 2037 25 3.04 % 25 2.41 % Plus 2.50%, matures 2037 16 4.09 % 16 3.46 % Total Trust Preferred Securities 247 247 Total long-term debt $ 494 $ 493 Senior Notes On July 11, 2016, we issued $250 million of senior notes ("Senior Notes") which mature on July 15, 2021. 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 December 31, 2017 , we had no deferred interest. |
Representation and Warranty Res
Representation and Warranty Reserve | 12 Months Ended |
Dec. 31, 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. This 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Balance, beginning of period $ 27 $ 40 $ 53 Provision (benefit) Gain on sale reduction for representation and warranty liability 4 5 7 Representation and warranty provision (benefit) (13 ) (19 ) (19 ) Total (9 ) (14 ) (12 ) (Charge-offs) recoveries, net (3 ) 1 (1 ) Balance, end of period $ 15 $ 27 $ 40 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 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 year ended December 31, 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 December 31, 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 22 - 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 Our board of directors participates in various stock option plans and incentive compensation plans. Certain key employees, officers, directors and others are eligible to receive stock awards. Awards that may be granted under the plan include stock options, incentive stock options, cash-settled stock appreciation rights, restricted stock units, performance shares and performance units and other awards. Under the current plan, the exercise price of any award granted must be at least equal to the fair market value of common stock on the date of grant. Non-qualified stock options granted to directors expire 5 years from the date of grant. Grants other than non-qualified stock options have term limits set by the board of directors in the applicable agreement. Stock appreciation rights generally expire 7 years from the date of grant. Awards still outstanding under any of the prior plans will continue to be governed by their respective terms. During the years ended December 31, 2017 , 2016 and 2015 , compensation expense recognized related to stock-based compensation totaled $11 million , $11 million and $3 million , respectively. Stock Options The following tables summarize the activity that occurred in the years ended December 31: Number of Shares 2017 (1) 2016 2015 Options outstanding, beginning of year 45,791 53,284 63,598 Options canceled, forfeited and expired (5,073 ) (7,493 ) (10,314 ) Options outstanding, end of year 40,718 45,791 53,284 Options vested or expected to vest, end of year 40,718 45,791 53,284 Options exercisable, end of year 20,286 23,576 27,197 Weighted Average Exercise Price 2017 (1) 2016 2015 Options outstanding, beginning of year $ 80.00 $ 80.00 $ 94.33 Options canceled, forfeited and expired 80.00 80.00 168.34 Options outstanding, end of year $ 80.00 $ 80.00 $ 80.00 Options vested or expected to vest, end of year $ 80.00 $ 80.00 $ 80.00 Options exercisable, end of year $ 80.00 $ 80.00 $ 80.00 (1) All outstanding options at December 31, 2017 are vested or expected to vest and have a weighted average remaining contractual life of 2.1 years. The total intrinsic value of options exercised during the years ended December 31, 2017 , 2016 and 2015 , was zero . Additionally, there was no aggregate intrinsic value of options outstanding and exercised at December 31, 2017 , 2016 and 2015 . Restricted Stock and Restricted Stock Units We have issued restricted stock units to officers, directors and certain employees. Restricted stock units generally will vest in 3 increments on each annual anniversary of the date of grant beginning with the first anniversary subject to service and performance conditions. On October 20, 2015, our Board approved and adopted the Flagstar Bancorp, Inc. Executive Long-Term Incentive Program ("ExLTIP"). The ExLTIP provides for payouts to certain executives only if our stock achieves and sustains a specified market performance within ten years of the grant date. The ExLTIP awards were made in the form of restricted stock units under and subject to the terms of the 2016 Flagstar Bancorp, Inc. Stock and Incentive Plan, which was approved at the May 24, 2016 annual shareholder meeting. If vested, the restricted stock units would pay out in five installments, subject to a quality review. At December 31, 2017 , the maximum number of shares of common stock that may be issued were 2,132,452 shares. The total fair value of awards vested during the years ended December 31, 2017 , 2016 , 2015 was $7 million , $3 million , and $2 million , respectively. As of December 31, 2017 , the total unrecognized compensation cost related to non-vested awards was $12 million with a weighted average expense recognition period of 2.5 years . The following table summarizes restricted stock activity: For the Years Ended December 31, 2017 2016 2015 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,461,910 $ 17.68 1,299,985 $ 16.36 233,691 $ 17.21 Granted 357,058 28.06 310,209 22.97 1,325,134 16.11 Vested (385,454 ) 17.36 (134,767 ) 15.78 (152,220 ) 15.25 Canceled and forfeited (143,064 ) 18.89 (13,517 ) 17.24 (106,620 ) 18.46 Non-vested balance at end of period 1,290,450 $ 20.52 1,461,910 $ 17.68 1,299,985 $ 16.36 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 year ended December 31, 2017 , 48,032 shares were issued under the 2017 ESPP and our associated compensation expense was de minimis. Incentive Compensation Plans We had an expense of $33 million , $33 million and $30 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, for annual employee incentive payments and commission based payments. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 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): For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Investment Securities Beginning balance $ (8 ) $ 5 $ 8 Unrealized gain (loss) (19 ) (10 ) (7 ) Less: Tax (benefit) provision (7 ) (3 ) (2 ) Net unrealized gain (loss) (12 ) (7 ) (5 ) Reclassifications out of AOCI (1) 3 (9 ) 3 Less: Tax (benefit) provision 1 (3 ) 1 Net unrealized gain (loss) reclassified out of AOCI 2 (6 ) 2 Other comprehensive income/(loss), net of tax (10 ) (13 ) (3 ) Ending balance $ (18 ) $ (8 ) $ 5 Cash Flow Hedges Beginning balance $ 1 $ (3 ) $ — Unrealized gain (loss) 5 (13 ) (6 ) Less: Tax (benefit) provision 1 (5 ) (1 ) Net unrealized gain (loss) 4 (8 ) (5 ) Reclassifications out of AOCI (1) (5 ) 19 2 Less: Tax (benefit) provision (2 ) 7 — Net unrealized gain (loss) reclassified out of AOCI (3 ) 12 2 Other comprehensive income/(loss), net of tax 1 4 (3 ) Ending balance $ 2 $ 1 $ (3 ) (1) Reclassifications are reported in other noninterest income on the Consolidated Statement of Operations. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share, excluding dilution, is computed by dividing earnings available 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: For the Years Ended December 31, 2017 2016 2015 (In millions, except share data) Net income $ 63 $ 171 $ 158 Deferred cumulative preferred stock dividends — (18 ) (30 ) Net income applicable to common stockholders $ 63 $ 153 $ 128 Weighted Average Shares Weighted average common shares outstanding 57,093,868 56,569,307 56,426,977 Effect of dilutive securities May Investor Warrants 12,287 138,314 305,484 Stock-based awards 1,072,188 890,046 432,062 Weighted average diluted common shares 58,178,343 57,597,667 57,164,523 Earnings per common share Basic earnings per common share $ 1.11 $ 2.71 $ 2.27 Effect of dilutive securities May Investor Warrants — (0.01 ) (0.01 ) Stock-based awards (0.02 ) (0.04 ) (0.02 ) Diluted earnings per common share $ 1.09 $ 2.66 $ 2.24 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 TARP Preferred. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
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 year ended December 31, 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 December 31, 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 22 - 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 Our board of directors participates in various stock option plans and incentive compensation plans. Certain key employees, officers, directors and others are eligible to receive stock awards. Awards that may be granted under the plan include stock options, incentive stock options, cash-settled stock appreciation rights, restricted stock units, performance shares and performance units and other awards. Under the current plan, the exercise price of any award granted must be at least equal to the fair market value of common stock on the date of grant. Non-qualified stock options granted to directors expire 5 years from the date of grant. Grants other than non-qualified stock options have term limits set by the board of directors in the applicable agreement. Stock appreciation rights generally expire 7 years from the date of grant. Awards still outstanding under any of the prior plans will continue to be governed by their respective terms. During the years ended December 31, 2017 , 2016 and 2015 , compensation expense recognized related to stock-based compensation totaled $11 million , $11 million and $3 million , respectively. Stock Options The following tables summarize the activity that occurred in the years ended December 31: Number of Shares 2017 (1) 2016 2015 Options outstanding, beginning of year 45,791 53,284 63,598 Options canceled, forfeited and expired (5,073 ) (7,493 ) (10,314 ) Options outstanding, end of year 40,718 45,791 53,284 Options vested or expected to vest, end of year 40,718 45,791 53,284 Options exercisable, end of year 20,286 23,576 27,197 Weighted Average Exercise Price 2017 (1) 2016 2015 Options outstanding, beginning of year $ 80.00 $ 80.00 $ 94.33 Options canceled, forfeited and expired 80.00 80.00 168.34 Options outstanding, end of year $ 80.00 $ 80.00 $ 80.00 Options vested or expected to vest, end of year $ 80.00 $ 80.00 $ 80.00 Options exercisable, end of year $ 80.00 $ 80.00 $ 80.00 (1) All outstanding options at December 31, 2017 are vested or expected to vest and have a weighted average remaining contractual life of 2.1 years. The total intrinsic value of options exercised during the years ended December 31, 2017 , 2016 and 2015 , was zero . Additionally, there was no aggregate intrinsic value of options outstanding and exercised at December 31, 2017 , 2016 and 2015 . Restricted Stock and Restricted Stock Units We have issued restricted stock units to officers, directors and certain employees. Restricted stock units generally will vest in 3 increments on each annual anniversary of the date of grant beginning with the first anniversary subject to service and performance conditions. On October 20, 2015, our Board approved and adopted the Flagstar Bancorp, Inc. Executive Long-Term Incentive Program ("ExLTIP"). The ExLTIP provides for payouts to certain executives only if our stock achieves and sustains a specified market performance within ten years of the grant date. The ExLTIP awards were made in the form of restricted stock units under and subject to the terms of the 2016 Flagstar Bancorp, Inc. Stock and Incentive Plan, which was approved at the May 24, 2016 annual shareholder meeting. If vested, the restricted stock units would pay out in five installments, subject to a quality review. At December 31, 2017 , the maximum number of shares of common stock that may be issued were 2,132,452 shares. The total fair value of awards vested during the years ended December 31, 2017 , 2016 , 2015 was $7 million , $3 million , and $2 million , respectively. As of December 31, 2017 , the total unrecognized compensation cost related to non-vested awards was $12 million with a weighted average expense recognition period of 2.5 years . The following table summarizes restricted stock activity: For the Years Ended December 31, 2017 2016 2015 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,461,910 $ 17.68 1,299,985 $ 16.36 233,691 $ 17.21 Granted 357,058 28.06 310,209 22.97 1,325,134 16.11 Vested (385,454 ) 17.36 (134,767 ) 15.78 (152,220 ) 15.25 Canceled and forfeited (143,064 ) 18.89 (13,517 ) 17.24 (106,620 ) 18.46 Non-vested balance at end of period 1,290,450 $ 20.52 1,461,910 $ 17.68 1,299,985 $ 16.36 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 year ended December 31, 2017 , 48,032 shares were issued under the 2017 ESPP and our associated compensation expense was de minimis. Incentive Compensation Plans We had an expense of $33 million , $33 million and $30 million for the years ended December 31, 2017 , 2016 and 2015 , respectively, for annual employee incentive payments and commission based payments. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Components of the provision (benefit) for income taxes consist of the following: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Current Federal $ 2 $ 4 $ 2 Total current income tax expense 2 4 2 Deferred Federal 66 84 82 Federal impact of tax reform 80 — — State — (1 ) (2 ) Total deferred income tax expense 146 83 80 Total income tax expense $ 148 $ 87 $ 82 Our effective tax rate differs from the statutory federal tax rate. The following is a summary of such differences: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Provision at statutory federal income tax rate (35%) $ 74 $ 90 $ 84 Increases (decreases) resulting from: Tax Reform 80 — — Bank Owned Life Insurance (3 ) (3 ) (1 ) Restricted stock compensation (2 ) — — State income tax (benefit), net of federal income tax effect (includes valuation allowance) — (1 ) (2 ) Warrant expense (income) — 1 1 Non-deductible compensation — — 1 Other (1 ) — (1 ) Provision for income taxes $ 148 $ 87 $ 82 Effective tax provision rate 70.1 % 33.7 % 34.2 % The increase in our income tax provision and effective tax provision rate during the year ended December 31, 2017 as compared to the year ended December 31, 2016 , was primarily due to the new tax legislation which resulted in a charge to the provision for income taxes of approximately $80 million due to the revaluation of our DTAs at a lower corporate statutory rate. Temporary differences and carry forwards that give rise to DTAs and liabilities are comprised of the following: December 31, 2017 2016 (Dollars in millions) Deferred tax assets Net operating loss carryforwards (Federal and State) $ 110 $ 195 Allowance for loan losses 43 74 Litigation settlement 14 22 Alternative Minimum Tax credit carry forwards — 18 Representation and warranty reserves 3 10 Accrued compensation 10 15 Contingent Consideration 6 — Loan deferred fees and costs 2 3 Non-accrual interest revenue 1 2 Deferred interest 1 2 General business credits 3 1 Other 2 5 Total 195 347 Valuation allowance (20 ) (20 ) Total (net) 175 327 Deferred tax liabilities Premises and equipment (14 ) (12 ) Mortgage loan servicing rights (3 ) (11 ) Mark-to-market adjustments (10 ) (9 ) Commercial lease financing (9 ) (5 ) State and local taxes (3 ) (4 ) Total (39 ) (41 ) Net deferred tax asset $ 136 $ 286 At December 31, 2017, we reclassified $20 million of AMT credits from deferred taxes to other assets as a result of tax reform. We have not provided deferred income taxes for the Bank’s pre-1988 tax bad debt reserve at December 31, 2017 of approximately $4 million because it is not anticipated that this temporary difference will reverse in the foreseeable future. Such reserves would only be taken into taxable income if the Bank, or a successor institution, liquidates, redeems shares, pays dividends in excess of earnings, or ceases to qualify as a bank for tax purposes. During the years ended December 31, 2017 and 2016 , we had federal net operating loss carry forwards of $381 million and $480 million , respectively. These carry forwards, if unused, expire in calendar years 2028 through 2037 . As a result of a change in control occurring on January 30, 2009, Section 382 of the Internal Revenue Code places an annual limitation on the use of our new operating loss carry forwards that existed at that time. At December 31, 2017 we had $120 million of net operating loss carry forwards subject to certain annual use limitations which expire in calendar years 2028 through 2029 . We regularly evaluate the need for DTA valuation allowances based on a more likely than not standard as defined by generally accepted accounting principles. The ability to realize DTAs depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. We had a total state DTA before valuation allowance of $33 million which includes total state net operating loss carryforwards of $579 million at December 31, 2017 . In connection with our ongoing assessment of deferred taxes, we analyzed each state net operating loss separately and determined the amount of such net operating loss, which is expected to expire unused, and recorded a valuation allowance to reduce the DTA for state net operating losses to the amount which is more likely than not to be realized. At December 31, 2017 , the net state DTAs which will more likely than not be realized, was $14 million and we have maintained a valuation allowance of $20 million due to state loss carryover limitations. We will continue to regularly assess the realizability of our DTAs. Changes in earnings performance and future earnings projections, among other factors, may cause us to adjust our valuation allowance. Our income tax returns are subject to review and examination by federal, state and local government authorities. On an ongoing basis, numerous federal, state and local examinations are in progress and cover multiple tax years. At December 31, 2017 , the Internal Revenue Service had completed an examination of us through the taxable year ended December 31, 2013 . The years open to examination by state and local government authorities vary by jurisdiction. We recognize interest and penalties related to uncertain tax positions in income tax expense. For the years ended December 31, 2017 , 2016 and 2015 , we did not recognize any interest income, interest expense, or increase or decreases to uncertain income tax positions of greater than $1 million , individually or in aggregate. |
Regulatory Capital
Regulatory Capital | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
Regulatory Capital | 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. At the end of 2017 a final rule was issued that will maintain the transition provisions for certain items deducted from regulatory capital. For additional information, see Item 1. Business and Item 1A. Risk Factors. 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 December 31, 2017 and December 31, 2016 . The following tables present the regulatory capital ratios as of the dates indicated: Flagstar Bancorp Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) December 31, 2017 Tangible capital (to adjusted avg. total assets) $ 1,442 8.51 % N/A N/A N/A N/A Tier 1 capital (to adjusted avg. total assets) 1,442 8.51 % $ 678 4.0 % $ 848 5.0 % Common equity Tier 1 capital (to RWA) 1,216 11.50 % 476 4.5 % 688 6.5 % Tier 1 capital (to RWA) 1,442 13.63 % 635 6.0 % 846 8.0 % Total capital (to RWA) 1,576 14.90 % 846 8.0 % 1,058 10.0 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,256 8.88 % N/A N/A N/A N/A Tier 1 capital (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. Flagstar Bank Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) December 31, 2017 Tangible capital (to adjusted avg. total assets) $ 1,531 9.04 % N/A N/A N/A N/A Tier 1 capital (to adjusted avg. total assets) 1,531 9.04 % $ 677 4.0 % $ 847 5.0 % Common equity Tier 1 capital (to RWA) 1,531 14.46 % 476 4.5 % 688 6.5 % Tier 1 capital (to RWA) 1,531 14.46 % 635 6.0 % 847 8.0 % Total capital (to RWA) 1,664 15.72 % 847 8.0 % 1,059 10.0 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,491 10.52 % N/A N/A N/A N/A Tier 1 capital (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 | 12 Months Ended |
Dec. 31, 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 December 31, 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 with the 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 then 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 December 31, 2017 of 9.7 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 December 31, 2017 and December 31, 2016 , respectively. Other litigation accruals At December 31, 2017 and December 31, 2016 , excluding the fair value liability relating to the DOJ litigation settlement, our total accrual for contingent liabilities and settled litigation was $1 million and $3 million , respectively. Commitments The following table is a summary of the contractual amount of significant commitments: December 31, 2017 2016 (Dollars in millions) Commitments to extend credit Mortgage loan interest-rate lock commitments $ 3,667 $ 4,115 Warehouse loan commitments 1,618 1,670 Commercial and industrial commitments 695 424 Other commercial commitments 1,021 651 HELOC commitments 283 179 Other consumer commitments 15 57 Standby and commercial letters of credit 50 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 11 - 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 made 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. These financial standby letters of credit irrevocably obligate the bank to pay a third party beneficiary when a customer fails to repay an outstanding loan or debt instrument. 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 December 31, 2017 and 2016 , is reflected in other liabilities on the Consolidated Statements of Financial Condition. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 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. 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 Statements of Financial Condition and by level in the valuation hierarchy: December 31, 2017 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 987 $ — $ 987 Agency - Residential — 794 — 794 Municipal obligations — 34 — 34 Corporate debt obligations — 38 — 38 Loans held-for-sale Residential first mortgage loans — 4,300 — 4,300 Loans held-for-investment Residential first mortgage loans — 8 — 8 Home equity — — 4 4 Mortgage servicing rights — — 291 291 Derivative assets Rate lock commitments (fallout-adjusted) — — 24 24 Mortgage-backed securities forwards — 4 — 4 Interest rate swaps and swaptions — 11 — 11 Total assets at fair value $ — $ 6,176 $ 319 $ 6,495 Derivative liabilities Interest rate swap on FHLB advances — (1 ) — (1 ) Mortgage-backed securities forwards — (6 ) — (6 ) Interest rate swaps — (4 ) — (4 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (25 ) (25 ) Total liabilities at fair value $ — $ (11 ) $ (85 ) $ (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. December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value (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 years ended December 31, 2017 and 2016 , and 2015 . 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: Balance at Recorded Recorded Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Year Total Total Total (Dollars in millions) For the Years Ended December 31, 2017 Assets Loans held-for-sale Home equity $ — $ 1 $ — $ — $ — $ (52 ) $ (1 ) $ 52 $ — Loans held-for-investment Home equity 65 2 — — — — (8 ) (55 ) 4 Mortgage servicing rights 335 (22 ) — — 288 (310 ) — — 291 Rate lock commitments (net) (1) 18 54 — — 267 — — (315 ) 24 Totals $ 418 $ 35 $ — $ — $ 555 $ (362 ) $ (9 ) $ (318 ) $ 319 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration — (1 ) — — (25 ) — 1 — (25 ) Totals $ (60 ) $ (1 ) $ — $ — $ (25 ) $ — $ 1 $ — $ (85 ) For the Years Ended December 31, 2016 Assets Loans held-for-investment Home equity $ 106 $ 5 $ — $ — $ — $ — $ (46 ) $ — $ 65 Mortgage servicing rights 296 (105 ) — — 228 (84 ) — — 335 Rate lock commitments (net) (1) 26 25 — — 325 — — (358 ) 18 Totals $ 428 $ (75 ) $ — $ — $ 553 $ (84 ) $ (46 ) $ (358 ) $ 418 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) Year Ended December 31, 2015 Assets Investment securities available-for-sale Municipal obligation $ 2 $ — $ — $ — $ — $ — $ (2 ) $ — $ — Loans held-for-investment Home equity $ 185 $ (2 ) $ — $ — $ — $ — $ (77 ) $ — $ 106 Mortgage servicing rights 258 (46 ) — — 260 (176 ) — — 296 Other investments 100 (100 ) — Rate lock commitments (net) (1) 31 60 — — 277 — — (342 ) 26 Totals $ 576 $ 12 $ — $ — $ 537 $ (176 ) $ (179 ) $ (342 ) $ 428 Liabilities Long-term debt $ (84 ) $ — $ (3 ) $ — $ — $ 52 $ 35 $ — $ — DOJ litigation settlement (82 ) (2 ) — — — — — — (84 ) Totals $ (166 ) $ (2 ) $ (3 ) $ — $ — $ 52 $ 35 $ — $ (84 ) (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 mortgage servicing rights 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) December 31, 2017 Assets Loans held-for-investment Home equity $ 4 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 5.0% - 7.5% (6.3%) Rate lock commitments (net) $ 24 Consensus pricing Origination pull-through rate 64.7% - 97.1% (82.0%) Liabilities DOJ litigation settlement $ (60 ) Discounted cash flows Discount rate 7.8% - 11.7% (9.7%) Contingent consideration $ (25 ) 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 most 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 December 31, 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 inputs used in the fair value measurement of the DOJ litigation settlement are the discount rate and asset growth rate, in addition to those discussed in Note 21 - 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 settlement, see Note 21 - 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) December 31, 2017 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 21 — 21 (10 ) Repossessed assets (3) 8 — 8 — Totals $ 35 $ 6 $ 29 $ (11 ) 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 years ended December 31, 2017 and 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) December 31, 2017 Impaired loans held-for-investment Loans held-for-investment $ 21 Fair value of collateral Loss severity discount 25% - 30% (27.9%) Repossessed assets $ 8 Fair value of collateral Loss severity discount 0% - 100% (70.9%) 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: December 31, 2017 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 204 $ 204 $ 204 $ — $ — Investment securities available-for-sale 1,853 1,853 — 1,853 — Investment securities held-to-maturity 939 924 — 924 — Loans held-for-sale 4,321 4,322 — 4,322 — Loans held-for-investment 7,713 7,667 — 8 7,659 Loans with government guarantees 271 261 — 261 — Mortgage servicing rights 291 291 — — 291 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 330 330 — 330 — Repossessed assets 8 8 — — 8 Other assets, foreclosure claims 84 84 — 84 — Derivative financial instruments, assets 39 39 — 15 24 Liabilities Retail deposits Demand deposits and savings accounts $ (4,965 ) $ (4,557 ) $ — $ (4,557 ) $ — Certificates of deposit (1,493 ) (1,498 ) — (1,498 ) — Wholesale deposits (45 ) (43 ) — (43 ) — Government deposits (1,073 ) (1,048 ) — (1,048 ) — Company controlled deposits (1,358 ) (1,311 ) — (1,311 ) — Federal Home Loan Bank advances (5,665 ) (5,662 ) — (5,662 ) — Long-term debt (494 ) (417 ) — (417 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (25 ) (25 ) — — (25 ) Derivative financial instruments, liabilities (11 ) (11 ) — (11 ) — 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 283 $ 269 $ 321 Loans held-for-investment Other noninterest income 1 1 40 Liabilities Long-term debt Other noninterest income $ — $ — $ 29 Litigation settlement Other noninterest income — 24 — Other noninterest (expense) — — (2 ) 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: December 31, 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 $ 6 $ 5 $ (1 ) $ 2 $ 2 $ — Loans held-for-investment 5 4 (1 ) 19 13 (6 ) Total nonaccrual loans $ 11 $ 9 $ (2 ) $ 21 $ 15 $ (6 ) Other performing loans Loans held-for-sale $ 4,167 $ 4,295 $ 128 $ 3,103 $ 3,143 $ 40 Loans held-for-investment 10 8 (2 ) 72 59 (13 ) Total other performing loans $ 4,177 $ 4,303 $ 126 $ 3,175 $ 3,202 $ 27 Total loans Loans held-for-sale $ 4,173 $ 4,300 $ 127 $ 3,105 $ 3,145 $ 40 Loans held-for-investment 15 12 (3 ) 91 72 (19 ) Total loans $ 4,188 $ 4,312 $ 124 $ 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 21 - Legal Proceedings, Contingencies and Commitments. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 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. In addition, we began to allocate the tax provision at a segment level whereas previously, the tax provision was reflected in the Other segment. To allocate the tax provision, 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. Additionally, prior period segment financial information has been recast to conform to the presentation reported in our Form 10-Q for the quarter ended March 31, 2018 filed with the Securities and Exchange Commission on May 7, 2018. The following changes were made with offsetting adjustments included in the Other segment to reconcile to the Consolidated Statements of Operations: 1) operating leases in Community Banking are reflected as loans by reclassifying rental income and depreciation expense to net interest income, and 2) the interest expense on custodial deposits on third party sub-servicing contracts, recognized in the Mortgage Servicing segment as loan administration income, is now reflected as a component of net interest income. 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 intersegment 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 Community Banking, Mortgage Originations or Mortgage Servicing 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: Year Ended December 31, 2017 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 238 $ 129 $ 11 $ 12 $ 390 Net gain (loss) on loan sales (10 ) 278 — — 268 Other noninterest income 31 92 66 13 202 Total net interest income and noninterest income 259 499 77 25 860 Benefit (provision) for loan losses (4 ) (4 ) — 2 (6 ) Compensation and benefits (62 ) (100 ) (16 ) (121 ) (299 ) Other noninterest expense (92 ) (163 ) (61 ) (28 ) (344 ) Total noninterest expense (154 ) (263 ) (77 ) (149 ) (643 ) Income (loss) before overhead allocations and income taxes 101 232 — (122 ) 211 Overhead allocations (41 ) (63 ) (23 ) 127 — Benefit (provision) for income taxes (21 ) (59 ) 8 (76 ) (148 ) Net income (loss) $ 39 $ 110 $ (15 ) $ (71 ) $ 63 Intersegment revenue $ (6 ) $ 4 $ 19 $ (17 ) $ — Average balances Loans held-for-sale $ 16 $ 4,130 $ — $ — $ 4,146 Loans with government guarantees — 290 — — 290 Loans held-for-investment (2) 6,475 7 — 29 6,511 Total assets 6,544 5,414 36 3,852 15,846 Deposits 7,454 — 1,453 — 8,907 (1) Includes adjustments made to reclassify income and expenses relating to operating leases and CCD income for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2016 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 206 $ 90 $ 21 $ 6 $ 323 Net gain on loan sales 6 310 — — 316 Other noninterest income 28 43 60 40 171 Total net interest income and noninterest income 240 443 81 46 810 Benefit (provision) for loan losses 10 (2 ) — — 8 Compensation and benefits (56 ) (81 ) (15 ) (117 ) (269 ) Other noninterest expense (89 ) (123 ) (63 ) (16 ) (291 ) Total noninterest expense (145 ) (204 ) (78 ) (133 ) (560 ) Income (loss) before overhead allocations and income taxes 105 237 3 (87 ) 258 Overhead allocations (35 ) (54 ) (23 ) 112 — Benefit (provision) for income taxes (24 ) (64 ) 7 (6 ) (87 ) Net income (loss) $ 46 $ 119 $ (13 ) $ 19 $ 171 Intersegment revenue $ (3 ) $ (1 ) $ 23 $ (19 ) $ — Average balances Loans held-for-sale $ 66 $ 3,068 $ — $ — $ 3,134 Loans with government guarantees — 435 — — 435 Loans held-for-investment (2) 5,809 6 — — 5,815 Total assets 5,906 4,435 28 3,538 13,907 Deposits 7,151 — 1,611 — 8,762 (1) Includes adjustments made to reclassify income and expenses relating to operating leases and CCD income for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2015 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 171 $ 80 $ 4 $ 32 $ 287 Net gain (loss) on loan sales (15 ) 303 — — 288 Other noninterest income 25 93 61 3 182 Total net interest income and noninterest income 181 476 65 35 757 Benefit for loan losses 19 — — — 19 Compensation and benefits (47 ) (73 ) (15 ) (102 ) (237 ) Other noninterest expense (86 ) (108 ) (73 ) (32 ) (299 ) Total noninterest expense (133 ) (181 ) (88 ) (134 ) (536 ) Income (loss) before overhead allocations and income taxes 67 295 (23 ) (99 ) 240 Overhead allocations (27 ) (66 ) (20 ) 113 — Benefit (provision) for income taxes (14 ) (80 ) 15 (3 ) (82 ) Net income (loss) $ 26 $ 149 $ (28 ) $ 11 $ 158 Intersegment revenue $ (15 ) $ 7 $ 20 $ (12 ) $ — Average balances Loans held-for-sale $ 40 $ 2,148 $ — $ — $ 2,188 Loans with government guarantees — 633 — — 633 Loans held-for-investment 4,986 4 — 86 5,076 Total assets 4,972 3,553 52 3,379 11,956 Deposits 6,674 — 1,203 — 7,877 (1) Includes adjustments made to reclassify income and expenses relating to CCD income for subservicing clients. |
Holding Company Only Financial
Holding Company Only Financial Statements | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |
Holding Company Only Financial Statements | Holding Company Only Financial Statements The following are the unconsolidated financial statements for the Holding Company on a stand-alone basis. These condensed financial statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto. The Holding Company's principal sources of funds are cash dividends paid by the Bank to the Holding Company. Federal laws and regulations limit the amount of dividends or other capital distributions the Bank may pay the Holding Company. Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Financial Condition (Dollars in millions) December 31, 2017 2016 (Dollars in millions) Assets Cash and cash equivalents $ 196 $ 70 Investment in subsidiaries (1) 1,676 1,728 Other assets 44 57 Total assets $ 1,916 $ 1,855 Liabilities and Stockholders’ Equity Liabilities Long term debt $ 494 $ 493 Other liabilities 23 26 Total liabilities 517 519 Stockholders’ Equity Common stock 1 1 Additional paid in capital 1,512 1,503 Accumulated other comprehensive income (17 ) (7 ) Accumulated deficit (97 ) (161 ) Total stockholders’ equity 1,399 1,336 Total liabilities and stockholders’ equity $ 1,916 $ 1,855 (1) Includes unconsolidated trusts of $7 million for December 31, 2017 and 2016 . Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Operations (Dollars in millions) For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Expenses Interest $ 25 $ 16 $ 7 General and administrative 9 9 13 Total 34 25 20 Loss before undistributed income of subsidiaries (34 ) (25 ) (20 ) Equity in undistributed income of subsidiaries 110 188 172 Income before income taxes 76 163 152 Provision (benefit) for income taxes 13 (8 ) (6 ) Net income 63 171 158 Other comprehensive income (1) (9 ) (9 ) (6 ) Comprehensive income $ 54 $ 162 $ 152 (1) See Consolidated Statements of Comprehensive Income for other comprehensive income (loss) detail. Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Cash Flows (Dollars in millions) For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Net income (loss) $ 63 $ 171 $ 158 Adjustments to reconcile net loss to net cash provided by operating activities Equity in (income) loss of subsidiaries 47 12 (172 ) Stock-based compensation 5 10 3 Change in other assets 18 (8 ) (6 ) Provision for deferred tax benefit — — 1 Change in other liabilities (2 ) (22 ) 9 Change in fair value and other non-cash changes (5 ) (4 ) — Net cash used in operating activities 126 159 (7 ) Investing Activities Net change in investment in subsidiaries — — (2 ) Net cash provided by (used in) investment activities — — (2 ) Financing Activities Proceeds from the issuance of junior subordinated debentures — 245 — Redemption of preferred stock — (267 ) — Dividends paid on preferred stock — (104 ) — Net cash used in financing activities — (126 ) — Net increase (decrease) in cash and cash equivalents 126 33 (9 ) Cash and cash equivalents, beginning of year 70 37 46 Cash and cash equivalents, end of year $ 196 $ 70 $ 37 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The following table represents summarized data for each of the quarters in 2017 , 2016 and 2015 : 2017 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 110 $ 129 $ 140 $ 148 Interest expense 27 32 37 41 Net interest income 83 97 103 107 Provision (benefit) for loan losses 3 (1 ) 2 2 Net interest income after provision for loan losses 80 98 101 105 Net gain on loan sales 48 66 75 79 Loan fees and charges 15 20 23 24 Deposit fees and charges 4 5 5 4 Loan administration income 5 6 5 5 Net return (loss) on the mortgage servicing rights 14 6 6 (4 ) Representation and warranty benefit 4 3 4 2 Other noninterest income 10 10 12 14 Noninterest expense 140 154 171 178 Income before income tax 40 60 60 51 Provision for income taxes 13 19 20 96 Net income (loss) from continuing operations $ 27 $ 41 $ 40 $ (45 ) Basic income (loss) per share $ 0.47 $ 0.72 $ 0.71 $ (0.79 ) Diluted income (loss) per share $ 0.46 $ 0.71 $ 0.70 $ (0.79 ) 2016 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 101 $ 99 $ 106 $ 111 Interest expense 22 22 26 24 Net interest income 79 77 80 87 (Benefit) provision for loan losses (13 ) (3 ) 7 1 Net interest income after provision for loan losses 92 80 73 86 Net gain on loan sales 75 90 94 57 Loan fees and charges 15 19 22 20 Loan administration income 6 4 4 4 Net (loss) on the mortgage servicing rights (6 ) (4 ) (11 ) (5 ) Representation and warranty benefit 2 4 6 7 Other noninterest income 13 15 41 15 Noninterest expense 137 139 142 142 Income before income tax 60 69 87 42 Provision for income taxes 21 22 30 14 Net income from continuing operations $ 39 $ 47 $ 57 $ 28 Basic income per share $ 0.56 $ 0.67 $ 0.98 $ 0.50 Diluted income per share $ 0.54 $ 0.66 $ 0.96 $ 0.49 2015 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 79 $ 90 $ 91 $ 95 Interest expense 14 17 18 19 Net interest income 65 73 73 76 (Benefit) for loan losses (4 ) (13 ) (1 ) (1 ) Net interest income after provision for loan losses 69 86 74 77 Net gain on loan sales 91 83 68 46 Loan fees and charges 17 19 17 14 Loan administration income 4 7 8 7 Net (loss) return on mortgage servicing rights (2 ) 9 12 9 Representation and warranty benefit 2 5 6 6 Other noninterest income 7 3 17 15 Noninterest expense 138 138 131 129 Income before income tax 50 74 71 45 Provision for income taxes 18 28 24 12 Net income from continuing operations $ 32 $ 46 $ 47 $ 33 Basis income per share $ 0.43 $ 0.69 $ 0.70 $ 0.45 Diluted income per share $ 0.43 $ 0.68 $ 0.69 $ 0.44 |
Description of Business, Basi33
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation and Basis of Presentation | Consolidation and Basis of Presentation The accounting and financial reporting policies of us and our subsidiaries conform to accounting principles generally accepted in the United States. Additionally, where applicable the policies conform to the accounting and reporting guidelines prescribed by regulatory authorities. Certain prior period amounts have been reclassified to conform to the current period presentation. The preparation of the Consolidated Financial Statements, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, revenues and expenses and disclosures of contingent assets and liabilities. Actual results could be materially different from these estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from correspondent banks and the FRB, and short-term investments that have a maturity at the date of acquisition of three months or less and are readily convertible to cash. |
Investment Securities | Investment Securities We measure securities classified as AFS at fair value, with unrealized gains and losses, net of tax, included in other comprehensive income (loss) in stockholders’ equity. We recognize realized gains and losses on AFS securities when securities are sold. The cost of securities sold is based on the specific identification method. Any gains or losses realized upon the sale of a security are reported in other noninterest income in the Consolidated Statements of Operations. The fair value of investment securities is based on observable market prices, when available. If observable market prices are not available, our valuations are based on alternative methods, including: quotes for similar fixed-income securities, matrix pricing, or discounted cash flow methods. The fair values, obtained through an independent third party utilizing a pricing service, are compared to independent pricing sources on a quarterly basis. For further information, see Note 2 - Investment Securities and Note 22 - Fair Value Measurements. Investment securities HTM are carried at amortized cost and adjusted for amortization of premiums and accretion of discounts using the interest method. Transfers of investment securities into the HTM category from the AFS category are accounted for at fair value at the date of transfer. Any related unrealized holding gain (loss), net of tax, that was included in the transfer is retained in other comprehensive income (loss) and is amortized as an adjustment to interest income over the remaining life of the securities. We evaluate AFS and HTM investment securities for OTTI 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) does 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). For the years ended December 31, 2015 through December 31, 2017, we did not recognize any OTTI losses. Investment securities transactions are recorded on the trade date for purchases and sales. Interest earned on investment securities, including the amortization of premiums and the accretion of discounts are determined using the effective interest method over the period of maturity, recorded in interest income in the Consolidated Statements of Operations. For further information, see Note 2 - Investment Securities. |
Loans Held-for-Sale | Loans Held-for-Sale We classify loans as LHFS when we originate or purchase loans that we intend to sell. We have elected the fair value option for the majority of our LHFS. We estimate the fair value of mortgage loans based on quoted market prices for securities backed by similar types of loans, where available, or by discounting estimated cash flows using observable inputs inclusive of interest rates, prepayment speeds and loss assumptions for similar collateral. LHFS that are recorded at lower of cost or fair value may be carried at fair value on a nonrecurring basis when the fair value is less than cost. For further information, see Note 22 - Fair Value Measurements. Loans that are transferred into the LHFS portfolio from the LHFI portfolio, due to a change in intent, are recorded at the lower of cost or fair value. Gains or losses recognized upon the sale of loans are determined using the specific identification method. |
Loans Held-for-Investment | Loans Held-for-Investment We classify loans that we have the intent and ability to hold for the foreseeable future or until maturity as LHFI. Loans held-for-investment are reported at their amortized cost, which includes the outstanding principal balance adjusted for any unamortized premiums, discounts, deferred fees and costs. Premiums and discounts on purchased loans and non-refundable loan origination and commitment fees, net of direct costs of originating or acquiring loans, are deferred and recognized over the estimated lives of the related loans as an adjustment to the loans’ effective yield, which is included in interest income on loans in the Consolidated Statements of Operations. Loans originally classified as LHFS, for which we have elected the fair value option, and subsequently transferred to LHFI continue to be measured and reported at fair value on a recurring basis. Changes in fair value are recorded to other noninterest income on the Consolidated Statements of Operations. The fair value of these loans is determined using the same methods described above for LHFS. For further information, see Note 22 - Fair Value Measurements. When loans originally classified as LHFS or as LHFI are reclassified due to a change in intent or ability to hold, cash flows associated with the loans are classified in the Consolidated Statements of Cash Flows as operating or investing, as appropriate, in accordance with the initial classification of the loans. |
Past Due and Impaired Loans | Past Due and Impaired Loans 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. Loans are considered impaired if it is probable that payment of interest and principal will not be made in accordance with the original contractual terms of the loan agreement or when any portion of principal or interest is 90 days past due. This classification includes both performing and nonperforming modified loans. For further information, see Note 4 - Loans Held-for-Investment. When a loan is considered impaired, the accrual of interest income is discontinued until the receipt of principal and interest is no longer in doubt. Interest income is recognized on impaired loans using a cost recovery method unless amounts contractually due are not in doubt. Cash received on impaired loans are applied entirely against principal until the loan has been collected in full, after which time any additional cash receipts are recognized as interest income. |
Loan Modifications (Troubled Debt Restructurings) | Loan Modifications (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. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses represents management's estimate of probable losses in our LHFI portfolio, excluding loans carried under the fair value option. We establish an allowance when (a) available information indicates that it is probable that a loss has occurred and (b) the amount of the loss can be reasonably estimated. The allowance provides for probable losses that have been identified with specific customer relationships (individually evaluated) and for probable losses believed to be inherent in the loan portfolio but that have not been specifically identified (collectively evaluated). Management assigns qualitative factors to each loan portfolio segment based on consideration of the following factors: changes in lending policies and procedures, changes in economic and business conditions, changes in the nature and volume of the portfolio, changes in lending management, changes in credit quality statistics, changes in the quality of the loan review system, changes in the value of underlying collateral for collateral-dependent loans, changes in concentrations of credit, and other internal or external factor changes. A specific allowance is established on impaired loans when it is probable all amounts due will not be collected pursuant to the original contractual terms of the loan and the recorded investment in the loan exceeds its fair value. The required allowance is measured using either the present value of the expected future cash flows discounted at the loan's effective interest rate or the fair value of the collateral less estimated disposal costs if the loan is collateral dependent. A general allowance is established for losses inherent on non-impaired loans by segmenting the portfolio based upon common risk characteristics. The general loss is then determined by using a historical loss model which utilizes our loss history by specific product, or if the product is not sufficiently seasoned, per readily available industry peer loss data. The loss model utilizes a loss emergence period that represents the average amount of time between when the loss event first occurs and when the specific loan is charged-off. In addition to the loss history or peer data, we also include a qualitative adjustment that considers economic risks, industry and geographic concentrations and other factors not adequately captured in our methodology. Consumer loans secured by real estate are charged-off to the estimated fair value of the collateral when a loss is confirmed or at 180 days past due, whichever is sooner. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure or receipt of an asset valuation indicating a collateral deficiency and the asset is the sole source of repayment. For consumer loans not secured by real estate, the charge-off is taken upon the earlier of the confirmation of a loss or 120 days past due. Commercial loans are evaluated on a loan level basis and either charged-off or written down to net realizable value if a loss confirming event has occurred. Loss confirming events include, but are not limited to, bankruptcy (unsecured), continued delinquency, foreclosure, or receipt of an asset valuation indicating a collateral deficiency and that asset is the sole source of repayment. |
Transfers of Financial Assets | Transfers of Financial Assets Our recognition of gain or loss on the sale of loans for which we surrender control is accounted for as a sale to the extent that 1) the transferred assets are legally isolated from us or our consolidated affiliates, even in bankruptcy or other receivership, 2) the transferee has the right to pledge or exchange the assets with no conditions that constrain the transferee and provide more than a trivial benefit to the Company, and 3) we do not maintain the obligation or unilateral ability to reclaim or repurchase the assets. If the sale criteria are met, the transferred financial assets are removed from the Consolidated Statements of Financial Condition and a gain or loss on sale is recognized. |
Variable Interest Entities | Variable Interest Entities An entity that has a controlling financial interest in a variable interest entity ("VIE") is referred to as the primary beneficiary and consolidates the VIE. An entity is deemed to have a controlling financial interest and is the primary beneficiary of a VIE if it has both the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and an obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. |
Repossessed Assets | Repossessed Assets Repossessed assets include one-to-four family residential property, commercial property and one-to-four family homes under construction that were acquired through foreclosure or acceptance of a deed-in-lieu of foreclosure. Repossessed assets are initially recorded in other assets at the estimated fair value of the collateral less estimated costs to sell. Losses arising from the initial acquisition of such properties are charged against the ALLL at the time of transfer. Subsequent valuation adjustments to reflect fair value, as well as gains and losses on disposal of these properties, are charged to other noninterest expense within noninterest expense in the Consolidated Statements of Operations as incurred. |
Loans with Government Guarantees | Loans with Government Guarantees We originate government guaranteed loans which are pooled and sold as Ginnie Mae MBS. Pursuant to Ginnie Mae servicing guidelines, we have the unilateral right to repurchase loans 90 days or more past due securitized in Ginnie Mae pools. As a result, once the delinquency criteria have been met, and regardless of whether the repurchase option has been exercised, we account for the loans as if they had been repurchased. We recognize the loans and corresponding liability as loans with government guarantees and other liabilities, respectively, in the Consolidated Statements of Financial Condition. If the loan is repurchased, the liability is cash settled and the loan with government guarantee remains. Once repurchased, we may collect losses through a claims process with the government agency, as an approved lender. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock We own stock in the FHLB of Indianapolis as required to permit us to obtain membership in and to borrow from the FHLB. No market quotes exist for the stock. The stock is redeemable at par and is carried at cost. |
Premises and Equipment | Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation. Land is carried at historical cost. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets which generally ranges from three to thirty years. Capitalized software is amortized on a straight-line basis over its useful life, which generally ranges from three to seven years. Software expenditures, repair and maintenance costs that are considered general, administrative, or of a maintenance nature are expensed as incurred. |
Mortgage Servicing Rights | Mortgage Servicing Rights We purchase and originate mortgage loans for sale to the secondary market and sell the loans on either a servicing-retained or servicing-released basis. If we retain the right to service the loan, an MSR is created at the time of sale which is recorded at fair value. We use an internal valuation model that utilizes an option-adjusted spread and other assumptions to determine the fair value of MSRs which include anticipated prepayment speeds (also known as the constant prepayment rate), product type (i.e., conventional, government, balloon), fixed or adjustable rate of interest, interest rate, term (i.e., 15 or 30 years), servicing costs per loan, discount rate and estimate of ancillary income such as late fees and prepayment fees. Management obtains third-party valuations of the MSR portfolio on a quarterly basis from independent valuation services to assess the reasonableness of the fair value calculated by our internal valuation model. Changes in the fair value of our mortgage servicing rights are reported on the Consolidated Statements of Operations in net return on mortgage servicing. For further information, see Note 10 - Mortgage Servicing Rights and Note 22 - Fair Value Measurements. We periodically enter into agreements to sell certain of our MSRs, which qualify as sales transactions. A transfer of servicing rights related to loans previously sold qualifies as a sale at the date on which title passes, if substantially all risks and rewards of ownership have irrevocably passed to the transferee and any protection provisions retained by the transferor are minor and can be reasonably estimated. In addition, if a sale is recognized and only minor protection provisions exist, a liability is accrued for the estimated obligation associated with those provisions. |
Servicing Fee Income | Servicing Fee Income Servicing fee income, late fees and ancillary fees received on loans for which we own the MSR, are included in the net return on mortgage servicing asset line of the Consolidated Statements of Operations. The fees are based on a contractual percentage of the outstanding principal and are recorded as income when earned. Subservicing fees, which are included in loan administration income on the Consolidated Statements of Operations are based on a contractual monthly amount per loan including late fees and other ancillary income. |
Derivatives | Derivatives We utilize derivative instruments to manage the fair value changes in our MSRs, interest rate lock commitments and LHFS portfolio which are exposed to price and interest rate risk, facilitate asset/liability management, minimize the variability of future cash flows on long-term debt, and to meet the needs of our customers. All derivatives are recognized on the Consolidated Statements of Financial Condition as other assets and liabilities, as applicable, at their estimated fair value. For those derivatives designated as qualified cash flow hedges, changes in the fair value of the derivatives, to the extent effective as a hedge, are recorded in accumulated other comprehensive income, net of income taxes, and reclassified into earnings concurrently with the earnings of the hedged item. For derivative instruments designated as qualified fair value hedges, which are used to hedge the exposure of fair value changes of an asset or liability attributable to a particular risk, the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item attributable to the hedged risk, are recognized in current earnings during the period of the change in fair values. For all other derivatives, changes in the fair value of the derivative are recognized immediately in earnings. A majority of these derivatives are subject to master netting agreements and cleared through a Central Counterparty Clearing House, which mitigates non-performance risk with counterparties and enables us to settle activity on a net basis. We use interest rate swaps, swaptions, futures, and forward loan sale commitments to mitigate the impact of fluctuations in interest rates and interest rate volatility on the fair value of the MSRs. These derivatives are not designated as qualifying hedges. Accordingly, changes in their fair value are reflected in current period earnings under the net return on mortgage servicing asset. These derivatives are valued based on quoted prices for similar assets in an active market with inputs that are observable. We also enter into various derivative agreements with customers and correspondents in the form of interest-rate lock commitments and forward purchase contracts which are commitments to originate or purchase mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. The derivatives are valued using internal models that utilize market interest rates and other unobservable inputs. Changes in the fair value of these commitments due to fluctuations in interest rates that are to be originated to our LHFS portfolio are economically hedged through the use of forward loan sale commitments of MBS. The gains and losses arising from this derivative activity are reflected in current period earnings under the net gain on loan sales. Interest rate lock commitments are valued using internal models with significant unobservable market parameters. Forward loan sale commitments are valued based on quoted prices for similar assets in an active market with inputs that are observable. At certain times we may also enter into various derivative agreements with correspondents in the form of forward purchase contracts at the time the correspondent customer enters into an interest-rate lock commitment. The derivatives are valued using internal models that utilize market interest rates and other unobservable inputs. We utilize interest rate swaps to hedge the forecasted cash flows from our underlying variable-rate FHLB advances and forecasted FHLB advances in qualifying cash flow hedge accounting relationships. Changes in the fair value of derivatives designated as cash flow hedges are recorded in other comprehensive income on the Consolidated Statement of Financial Condition and reclassified into interest expense concurrently with the interest expense on the debt. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. These hedges are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. For forecasted FHLB advances being hedged, we evaluate the likelihood of the transaction occurring based on the current facts and circumstances each reporting period to ensure the hedge relationship still qualifies for hedge accounting. If we de-designate a hedge relationship or determine that an interest rate swap no longer qualifies for hedge accounting changes in fair value are no longer recorded in other comprehensive income. If the hedged item remains probable to occur, the effective amounts previously recorded in other comprehensive income are recognized in earnings over the remaining life of the hedged item as an adjustment to yield. We also utilize interest rate swaps to manage fair value changes of our fixed-rate FHLB advances in a qualifying fair value hedge accounting relationship. Changes in the fair value of derivatives designated as fair value hedges, as well as the change in fair value of the hedged item, are recognized in current period earnings. The corresponding adjustment is recorded as a basis adjustment to the hedged item and hedging instrument. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. These hedges are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. If the Company determines an interest rate swap no longer qualifies for fair value hedge accounting or is de-designated, the hedged item will no longer be adjusted for changes in fair value and the amounts previously recorded as a basis adjustment are recognized in earnings over the remaining life of the hedged item as an adjustment to yield. If a previously hedged item is extinguished or sold, the remaining unamortized balance in other comprehensive income balance for prior cash flow hedges and the remaining basis adjustment of the hedged item for prior fair value hedges will be reclassified to current period earnings. To assist our customers in meeting their needs to manage interest rate risk, we enter into interest rate swap derivative contracts. To economically hedge this risk, we enter into offsetting derivative contracts to effectively eliminate the interest rate risk associated with these contracts. |
Income Taxes | Income Taxes We evaluate two components of income tax expense: current and deferred. Current income tax expense represents our estimated taxes to be paid or refunded for the current period. Deferred taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. DTAs and liabilities are measured using enacted tax rates that will apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on DTAs and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We evaluate our DTAs to determine if, based on all available evidence, it is more likely than not that they will be realized. If it is determined that it is more likely than not that the deferred taxes will not be realized, we establish a valuation allowance. For further information, see Note 19 - Income Taxes. |
Representation and Warranty Reserve | Representation and Warranty Reserve When we sell mortgage loans into the secondary mortgage market, we make customary representations and warranties to the purchasers about various characteristics of each loan, such as the manner of origination, the nature and extent of underwriting standards applied and the types of documentation being provided. For eligible loans sold to the Agencies after December 31, 2014, these representations and warranties generally expire after 36 months. Typically, all other representations and warranties are in place for the life of the loan. If a defect in the origination process is identified, we may be required to either repurchase the loan, pay a fee or indemnify the purchaser for losses it sustains on the loan. If there are no such defects, the Company has no liability to the purchaser for losses it may incur on such loan. Upon the sale of a loan, the Company recognizes a liability for that guarantee at its fair value as a reduction of our net gain on loan sales. Subsequent to the sale, the liability is re-measured on an ongoing basis based upon an estimate of probable future losses. In each case, these estimates are based on our most recent data including loss severity on repurchased and indemnified loans, repurchase requests and other factors. Changes to our previous estimates are recorded in the representation and warranty (provision) benefit in the Consolidated Statements of Operations. |
Advertising Costs | Advertising Costs Advertising costs are expensed in the period they are incurred and are included as part of other noninterest expense in the Consolidated Statements of Operations. |
Stock-based Compensation | Stock-Based Compensation All share-based payments to employees, including grants of employee stock options and restricted stock units, are classified as equity with expenses being recognized in compensation and benefits in the Consolidated Statements of Operations based on their fair values. The amount of compensation is measured at the grant date and is expensed over the requisite service period, which is normally the vesting period, and for the year ended December 31, 2017 , any forfeitures were recognized as they occurred. In addition to share-based payments to employees, the discount provided to employees through the Employee Stock Purchase Plan is also recognized as stock-based compensation. |
Department of Justice (DOJ) Litigation Settlement | Department of Justice Litigation Settlement The executed settlement agreement with the DOJ representing the obligation to make future additional payments establishes a legally enforceable contract with a stipulated payment plan that meets the definition of a financial liability. We have elected the fair value option to account for this financial liability included in other liabilities on the Consolidated Financial Statements. For additional information on the valuation of the DOJ litigation settlement, see Note 22 - Fair Value Measurements. |
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. The Company has early adopted this ASU during the first quarter of 2018. The guidance provides a broader range of hedge accounting opportunities and simplifies documentation requirements for our existing cash flow hedge relationships. In conjunction with adoption of this ASU, the Company elected to transfer $ 144 million of investment securities from HTM to AFS during the first quarter of 2018, as permitted by the standard. 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. 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 continued to release new accounting guidance related to the adoption of this standard which was also evaluated during the implementation process. We will implement the revenue recognition guidance in the first quarter of 2018 utilizing the cumulative-effect approach at the date of adoption with no restatement of comparative periods presented. Lease contracts and financial instruments, which include loans and securities, are excluded from the scope of this standard. We have determined the amount of in scope revenue, which primarily relates to deposit account fees, asset management fees and certain commissions, to be less than 3 percent of total revenue. The recognition of revenue for in scope items is not anticipated to have a material impact on the financial statements or the 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 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income January 1, 2019 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 |
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. 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. |
Description of Business, Basi34
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | 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 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 2018-02 Income Statement-Reporting Comprehensive Income (Topic 220); Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income January 1, 2019 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) | 12 Months Ended |
Dec. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Held-to-maturity and Available-for-sale Securities | Amortized Cost Gross Unrealized Gross Unrealized Fair Value (Dollars in millions) December 31, 2017 Available-for-sale securities Agency - Commercial $ 1,004 $ — $ (17 ) $ 987 Agency - Residential 811 — (17 ) 794 Municipal obligations 35 — (1 ) 34 Corporate debt obligations 37 1 — 38 Total available-for-sale securities (1) $ 1,887 $ 1 $ (35 ) $ 1,853 Held-to-maturity securities Agency - Commercial $ 526 $ — $ (9 ) $ 517 Agency - Residential 413 — (6 ) 407 Total held-to-maturity securities (1) $ 939 $ — $ (15 ) $ 924 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 December 31, 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) December 31, 2017 Available-for-sale securities Agency - Commercial $ 218 20 $ (7 ) $ 744 41 $ (11 ) Agency - Residential 452 36 (14 ) 263 33 (3 ) Municipal obligations 6 3 — 22 9 — Corporate debt obligations — — — 3 1 — Held-to-maturity securities Agency - Commercial $ 348 25 $ (8 ) $ 99 8 $ (1 ) Agency - Residential 111 16 (3 ) 293 43 (3 ) 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 shows the 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) December 31, 2017 Due after one year through five years 10 10 2.58 % 35 35 2.48 % Due after five years through 10 years 45 46 4.85 % 26 26 2.52 % Due after 10 years 1,832 1,797 2.40 % 878 863 2.44 % Total $ 1,887 $ 1,853 $ 939 $ 924 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Schedule of Loans Held-for-investment | The following table presents our Loans-held-for-investment: December 31, 2017 December 31, 2016 (Dollars in millions) Consumer loans Residential first mortgage $ 2,754 $ 2,327 Home Equity 664 443 Other 25 28 Total consumer loans 3,443 2,798 Commercial loans Commercial real estate (1) 1,932 1,261 Commercial and industrial 1,196 769 Warehouse lending 1,142 1,237 Total commercial loans 4,270 3,267 Total loans held-for-investment $ 7,713 $ 6,065 (1) Includes NBV of $307 million and $244 million of owner occupied commercial real estate loans at December 31, 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) Year Ended December 31, 2017 Beginning balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Charge-offs (2) (8 ) (3 ) (2 ) (1 ) — — (14 ) Recoveries 1 2 1 1 1 — 6 Provision (benefit) (11 ) (1 ) 1 17 1 (1 ) 6 Ending balance ALLL $ 47 $ 22 $ 1 $ 45 $ 19 $ 6 $ 140 Year Ended December 31, 2016 Beginning balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 Charge-offs (2) (29 ) (4 ) (3 ) — — — (36 ) Recoveries 2 — 3 1 — — 6 Provision (benefit) (3) (24 ) (4 ) (1 ) 9 4 1 (15 ) Ending balance ALLL $ 65 $ 24 $ 1 $ 28 $ 17 $ 7 $ 142 Year Ended December 31, 2015 Beginning balance ALLL $ 234 $ 31 $ 1 $ 17 $ 11 $ 3 $ 297 Charge-offs (87 ) (7 ) (4 ) — (3 ) — (101 ) Recoveries 3 2 3 2 — — 10 Provision (benefit) (34 ) 6 2 (1 ) 5 3 (19 ) Ending balance ALLL $ 116 $ 32 $ 2 $ 18 $ 13 $ 6 $ 187 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of $1 million , $8 million and $69 million related to the transfer and subsequent sale of loans during the years ended December 31, 2017 , December 31, 2016 and December 31, 2015 , respectively. Also includes charge-offs related to loans with government guarantees of $4 million , $14 million , and $3 million during the years ended December 31, 2017 , December 31, 2016 and December 31, 2015 , respectively. (3) Does not include $7 million for provision expense for loan losses recorded in the Consolidated Statements of Operations to reserve for repossessed loans with government guarantees at December 31, 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) December 31, 2017 Loans held-for-investment (2) Individually evaluated $ 34 $ 27 $ — $ — $ — $ — $ 61 Collectively evaluated 2,712 633 25 1,932 1,196 1,142 $ 7,640 Total loans $ 2,746 $ 660 $ 25 $ 1,932 $ 1,196 $ 1,142 $ 7,701 Allowance for loan losses (2) Individually evaluated $ 6 $ 10 $ — $ — $ — $ — $ 16 Collectively evaluated 41 12 1 45 19 6 124 Total allowance for loan losses $ 47 $ 22 $ 1 $ 45 $ 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 (for further information on our policy past due and impaired loans, see Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies): 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) December 31, 2017 Consumer loans Residential first mortgage $ 2 $ 2 $ 23 $ 27 $ 2,727 $ 2,754 Home equity 1 — 6 7 657 664 Other — — — — 25 25 Total consumer loans 3 2 29 34 3,409 3,443 Commercial loans Commercial real estate — — — — 1,932 1,932 Commercial and industrial — — — — 1,196 1,196 Warehouse lending — — — — 1,142 1,142 Total commercial loans — — — — 4,270 4,270 Total loans (2) $ 3 $ 2 $ 29 $ 34 $ 7,679 $ 7,713 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 days 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 December 31, 2017 and 2016 , respectively. |
Troubled Debt Restructurings | 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 (Decrease) in Allowance at Modification (Dollars in millions) Year Ended December 31, 2017 Residential first mortgages 16 $ 4 $ 4 $ — Home equity (2)(3) 82 6 5 (1 ) Total TDR loans 98 $ 10 $ 9 $ (1 ) Year Ended December 31, 2016 Residential first mortgages 23 $ 4 $ 5 $ — Home equity (2)(3) 143 9 8 — Commercial & Industrial 1 2 1 — Total TDR loans 167 $ 15 $ 14 $ — Year Ended December 31, 2015 Residential first mortgages 325 $ 81 $ 80 $ (2 ) Home equity (2)(3) 370 21 18 — Other consumer 3 — — — Total TDR loans 698 $ 102 $ 98 $ (2 ) (1) Post-modification balances include past due amounts that are capitalized at modification date. (2) Home equity post-modification UPB reflects write downs. (3) Includes loans carried at fair value option. The following table provides a summary of newly modified TDRs in the past 12 months that have been subsequently defaulted during the years ended December 31, 2017 , 2016 and 2015 . The UPB associated with the TDRs in each portfolio and in the aggregate was less than $1 million for all years presented. There was no increase or decrease in the allowance associated with these TDRs at subsequent default. All TDRs within consumer and commercial loan 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: Years Ended December 31, 2017 2016 2015 Number of Accounts Residential first mortgages 1 1 3 Home equity (1) 0 7 5 Total TDR loans 1 8 8 (1) HELOC post-modification UPB reflects write downs. The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) December 31, 2017 Consumer loans (1) Residential first mortgage $ 19 $ 12 $ 31 Home equity 24 4 28 Total TDRs (2) $ 43 $ 16 $ 59 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 $13 million and $9 million at December 31, 2017 and 2016 , respectively. (2) Includes $3 million and $25 million of TDR loans accounted for under the fair value option at December 31, 2017 and 2016 , respectively. |
Impaired Loans | The following table presents individually evaluated impaired loans and the associated allowance: December 31, 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 $ 11 $ 12 $ — $ 6 $ 6 $ — Total loans with no related allowance recorded $ 11 $ 12 $ — $ 6 $ 6 $ — With an allowance recorded Consumer loans Residential first mortgage $ 22 $ 22 $ 6 $ 40 $ 40 $ 5 Home equity 24 27 10 29 29 8 Total loans with an allowance recorded $ 46 $ 49 $ 16 $ 69 $ 69 $ 13 Total impaired loans Consumer loans Residential first mortgage $ 33 $ 34 $ 6 $ 46 $ 46 $ 5 Home equity 24 27 10 29 29 8 Total impaired loans $ 57 $ 61 $ 16 $ 75 $ 75 $ 13 The following table presents average impaired loans and the interest income recognized: For the Years Ended December 31, 2017 2016 2015 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 $ 38 $ 1 $ 52 $ 1 $ 150 $ 5 Home equity 28 1 30 2 39 — Commercial loans Commercial and industrial — — 2 — 2 — Total impaired loans $ 66 $ 2 $ 84 $ 3 $ 191 $ 5 |
Loan Credit Quality Indicators | December 31, 2017 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,706 $ 23 $ — $ 25 $ 2,754 Home equity 633 25 — 6 664 Other Consumer 25 — — — 25 Total Consumer Loans $ 3,364 $ 48 $ — $ 31 $ 3,443 Commercial Loans Commercial Real Estate $ 1,902 $ 23 $ 7 $ — $ 1,932 Commercial and Industrial 1,135 32 24 5 1,196 Warehouse 1,014 128 — — 1,142 Total Commercial Loans $ 4,051 $ 183 $ 31 $ 5 $ 4,270 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 |
Repossessed Assets (Tables)
Repossessed Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Repossessed Assets [Abstract] | |
Schedule of Repossessed Assets | Repossessed assets include the following: December 31, 2017 2016 (Dollars in millions) One-to-four family properties $ 5 $ 11 Commercial properties 3 3 Total repossessed assets $ 8 $ 14 |
Schedule of Activity in Repossessed Assets | The following schedule provides the activity for repossessed assets: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Beginning balance $ 14 $ 17 $ 19 Additions, net 18 19 29 Disposals (14 ) (19 ) (24 ) Net (write down) gain on disposal (9 ) (2 ) — Transfers out (1 ) (1 ) (7 ) Ending balance $ 8 $ 14 $ 17 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | The following presents our premises and equipment balances and estimated useful lives: Estimated December 31, 2017 2016 (Dollars in millions) Land — $ 61 $ 59 Office buildings and improvements 15 — 31.5 years 159 153 Computer hardware and software 3 — 7 years 300 256 Furniture, fixtures and equipment 5 — 7 years 63 61 Leased equipment 3 — 10 years 40 4 Total 623 533 Less accumulated depreciation (293 ) (258 ) Premises and equipment, net $ 330 $ 275 |
Schedule of Future Minimum Lease Payments for Operating Leases | The following outlines our minimum contractual lease obligations: December 31, 2017 (Dollars in millions) 2018 $ 8 2019 7 2020 5 2021 3 2022 1 Thereafter 2 Total $ 26 |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Transfers and Servicing [Abstract] | |
Schedule of Servicing Assets at Fair Value | Changes in the fair value of residential first mortgage MSRs were as follows: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Balance at beginning of period $ 335 $ 296 $ 258 Additions from loans sold with servicing retained 288 228 260 Reductions from sales (310 ) (84 ) (176 ) Changes in fair value due to (1) : Decrease in MSR value due to pay-offs, pay-downs, and run-off (22 ) (62 ) (43 ) Changes in estimates of fair value (2) — (43 ) (3 ) Fair value of MSRs at end of period $ 291 $ 335 $ 296 (1) Changes in fair value are included within net (loss) return on mortgage servicing rights 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: December 31, 2017 December 31, 2016 Fair value impact due to Fair value impact due to Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 6.29 % $ 286 $ 282 7.78 % $ 326 $ 318 Constant prepayment rate 9.93 % 283 277 16.68 % 322 311 Weighted average cost to service per loan $ 73.00 288 286 $ 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 60 $ 81 $ 69 Changes in fair value (2) (22 ) (109 ) (44 ) Gain (loss) on MSR derivatives (3) (8 ) — 5 Net transaction costs (8 ) 2 (2 ) Total (loss) return included in net return on mortgage servicing rights $ 22 $ (26 ) $ 28 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Includes a $4 million loss recorded to a payoff reserve during the year ended December 31, 2016 and $2 million gain related to the sale of MSRs during the year ended December 31, 2015 . (3) 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: For the Year Ended December 31, 2017 2016 2015 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 35 $ 29 $ 33 Other servicing charges (14 ) (11 ) (7 ) Total income on mortgage loans subserviced, included in loan administration $ 21 $ 18 $ 26 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on cash basis. |
Derivative Financial Instrume40
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table presents the notional amount, estimated fair value and maturity of our derivative financial instruments: December 31, 2017 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives designated as hedging instruments: Liabilities Interest rate swaps on FHLB advances $ 830 $ 1 2023-2026 Derivatives not designated as hedging instruments: Assets Futures $ 1,597 $ — 2018-2022 Mortgage-backed securities forwards 2,646 4 2018 Rate lock commitments 3,629 24 2018 Interest rate swaps and swaptions 1,441 11 2018-2048 Total derivative assets $ 9,313 $ 39 Liabilities Futures $ 209 $ — 2018-2021 Mortgage-backed securities forwards 3,197 6 2018 Rate lock commitments 214 — 2018 Interest rate swaps 617 4 2018-2027 Total derivative liabilities $ 4,237 $ 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 December 31, 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. |
Schedule of Derivative Instruments Subject to Master Netting Arrangement | 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) December 31, 2017 Derivatives designated as hedging instruments: Liabilities Interest rate swaps on FHLB advances (1) $ 1 $ — $ 1 $ — $ 17 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 4 $ — $ 4 $ — $ 8 Interest rate swaps and swaptions (1) 11 — 11 — 10 Total derivative assets $ 15 $ — $ 15 $ — $ 18 Liabilities Futures $ — $ — $ — $ — $ 2 Mortgage-backed securities forwards 6 — 6 — 2 Interest rate swaps (1) 4 — 4 — 5 Total derivative liabilities $ 10 $ — $ 10 $ — $ 9 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 December 31, 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 the net gain (loss) recognized in income on derivative instruments, net of the impact of offsetting positions: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain/(Loss) Futures Net return (loss) on mortgage servicing rights $ (1 ) $ — $ 6 Interest rate swaps and swaptions Net return (loss) on mortgage servicing rights (11 ) (5 ) (2 ) Mortgage-backed securities forwards Net return (loss) on mortgage servicing rights 4 5 1 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales (34 ) 26 9 Forward commitments Other noninterest income — (2 ) (2 ) Interest rate swaps (1) Other noninterest income 2 4 2 Total derivative (loss) gain $ (40 ) $ 28 $ 14 (1) Includes customer-initiated commercial interest rate swaps. |
Deposit Accounts (Tables)
Deposit Accounts (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Deposits [Abstract] | |
Schedule of Deposits | The deposit accounts are as follows: December 31, 2017 2016 (Dollars in millions) Retail deposits Branch retail deposits Demand deposit accounts $ 931 $ 852 Savings accounts 3,482 3,824 Money market demand accounts 124 138 Certificates of deposit/CDARS 1,491 1,055 Total branch retail deposits 6,028 5,869 Commercial deposits Demand deposit account 288 282 Savings account 71 63 Money market demand accounts 69 109 Certificates of deposit/CDARS 2 1 Total commercial deposits 430 455 Total retail deposits subtotal 6,458 6,324 Government deposits Demand deposit accounts 251 250 Savings accounts 446 451 Certificates of deposit/CDARS 376 329 Total government deposits 1,073 1,030 Wholesale deposits 45 — Company controlled deposits 1,358 1,446 Total deposits $ 8,934 $ 8,800 |
Schedule of Contractual Maturities, Certificates of Deposit, $100,000 or More | The following indicates the scheduled maturities for certificates of deposit with a minimum denomination of $250,000 : December 31, 2017 2016 (Dollars in millions) Three months or less $ 159 $ 126 Over three months to six months 128 116 Over six months to twelve months 173 146 One to two years 167 34 Thereafter 31 27 Total $ 658 $ 449 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Federal Home Loan Bank, Advances, by Interest Rate Type | The following is a breakdown of our FHLB advances outstanding: December 31, 2017 December 31, 2016 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 4,260 1.40 % $ 1,780 0.62 % Total Short-term Federal Home Loan Bank advances 4,260 1,780 Long-term LIBOR adjustable advances 1,130 1.76 % 1,025 1.12 % Long-term fixed rate advances (1) 275 1.41 % 175 1.12 % Total Long-term Federal Home Loan Bank advances 1,405 1,200 Total Federal Home Loan Bank advances $ 5,665 $ 2,980 (1) Includes the current portion of fixed rate advances of $125 million and $50 million at December 31, 2017 and December 31, 2016 , respectively. We settled $250 million in long-term fixed rate FHLB advances during the fourth quarter of 2016 . |
Schedule of Federal Home Loan Bank, Advances, Disclosures | The following table contains detailed information on our FHLB advances and other borrowings: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Maximum outstanding at any month end $ 5,665 $ 3,557 $ 3,541 Average outstanding balance 4,590 2,833 1,811 Average remaining borrowing capacity 1,195 1,137 1,611 Weighted average interest rate 1.30 % 1.16 % 1.00 % |
Schedule of Federal Home Loan Bank, Advances, Maturity Summary | The following table outlines the maturity dates of our FHLB advances and other borrowings: December 31, 2017 (Dollars in millions) 2018 $ 4,385 2019 50 2020 — 2021 — Thereafter 1,230 Total $ 5,665 |
Schedule of Long-term Debt Instruments | The following table presents long-term debt, net of debt issuance costs: December 31, 2017 December 31, 2016 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 247 6.125 % $ 246 6.125 % Trust Preferred Securities Floating Three Month LIBOR Plus 3.25%, matures 2032 $ 26 4.92 % $ 26 4.25 % Plus 3.25%, matures 2033 26 4.61 % 26 4.13 % Plus 3.25%, matures 2033 26 4.94 % 26 4.25 % Plus 2.00%, matures 2035 26 3.36 % 26 2.88 % Plus 2.00%, matures 2035 26 3.36 % 26 2.88 % Plus 1.75%, matures 2035 51 3.34 % 51 2.71 % Plus 1.50%, matures 2035 25 2.86 % 25 2.38 % Plus 1.45%, matures 2037 25 3.04 % 25 2.41 % Plus 2.50%, matures 2037 16 4.09 % 16 3.46 % Total Trust Preferred Securities 247 247 Total long-term debt $ 494 $ 493 |
Representation and Warranty R43
Representation and Warranty Reserve (Tables) | 12 Months Ended |
Dec. 31, 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Balance, beginning of period $ 27 $ 40 $ 53 Provision (benefit) Gain on sale reduction for representation and warranty liability 4 5 7 Representation and warranty provision (benefit) (13 ) (19 ) (19 ) Total (9 ) (14 ) (12 ) (Charge-offs) recoveries, net (3 ) 1 (1 ) Balance, end of period $ 15 $ 27 $ 40 |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components in accumulated other comprehensive income (loss): For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Investment Securities Beginning balance $ (8 ) $ 5 $ 8 Unrealized gain (loss) (19 ) (10 ) (7 ) Less: Tax (benefit) provision (7 ) (3 ) (2 ) Net unrealized gain (loss) (12 ) (7 ) (5 ) Reclassifications out of AOCI (1) 3 (9 ) 3 Less: Tax (benefit) provision 1 (3 ) 1 Net unrealized gain (loss) reclassified out of AOCI 2 (6 ) 2 Other comprehensive income/(loss), net of tax (10 ) (13 ) (3 ) Ending balance $ (18 ) $ (8 ) $ 5 Cash Flow Hedges Beginning balance $ 1 $ (3 ) $ — Unrealized gain (loss) 5 (13 ) (6 ) Less: Tax (benefit) provision 1 (5 ) (1 ) Net unrealized gain (loss) 4 (8 ) (5 ) Reclassifications out of AOCI (1) (5 ) 19 2 Less: Tax (benefit) provision (2 ) 7 — Net unrealized gain (loss) reclassified out of AOCI (3 ) 12 2 Other comprehensive income/(loss), net of tax 1 4 (3 ) Ending balance $ 2 $ 1 $ (3 ) (1) Reclassifications are reported in other noninterest income on the Consolidated Statement of Operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted earnings per share of common stock: For the Years Ended December 31, 2017 2016 2015 (In millions, except share data) Net income $ 63 $ 171 $ 158 Deferred cumulative preferred stock dividends — (18 ) (30 ) Net income applicable to common stockholders $ 63 $ 153 $ 128 Weighted Average Shares Weighted average common shares outstanding 57,093,868 56,569,307 56,426,977 Effect of dilutive securities May Investor Warrants 12,287 138,314 305,484 Stock-based awards 1,072,188 890,046 432,062 Weighted average diluted common shares 58,178,343 57,597,667 57,164,523 Earnings per common share Basic earnings per common share $ 1.11 $ 2.71 $ 2.27 Effect of dilutive securities May Investor Warrants — (0.01 ) (0.01 ) Stock-based awards (0.02 ) (0.04 ) (0.02 ) Diluted earnings per common share $ 1.09 $ 2.66 $ 2.24 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity, Shares | The following tables summarize the activity that occurred in the years ended December 31: Number of Shares 2017 (1) 2016 2015 Options outstanding, beginning of year 45,791 53,284 63,598 Options canceled, forfeited and expired (5,073 ) (7,493 ) (10,314 ) Options outstanding, end of year 40,718 45,791 53,284 Options vested or expected to vest, end of year 40,718 45,791 53,284 Options exercisable, end of year 20,286 23,576 27,197 Weighted Average Exercise Price 2017 (1) 2016 2015 Options outstanding, beginning of year $ 80.00 $ 80.00 $ 94.33 Options canceled, forfeited and expired 80.00 80.00 168.34 Options outstanding, end of year $ 80.00 $ 80.00 $ 80.00 Options vested or expected to vest, end of year $ 80.00 $ 80.00 $ 80.00 Options exercisable, end of year $ 80.00 $ 80.00 $ 80.00 (1) All outstanding options at December 31, 2017 are vested or expected to vest and have a weighted average remaining contractual life of 2.1 years. |
Schedule of Restricted Stock Units Award Activity | The following table summarizes restricted stock activity: For the Years Ended December 31, 2017 2016 2015 Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Shares Weighted — Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,461,910 $ 17.68 1,299,985 $ 16.36 233,691 $ 17.21 Granted 357,058 28.06 310,209 22.97 1,325,134 16.11 Vested (385,454 ) 17.36 (134,767 ) 15.78 (152,220 ) 15.25 Canceled and forfeited (143,064 ) 18.89 (13,517 ) 17.24 (106,620 ) 18.46 Non-vested balance at end of period 1,290,450 $ 20.52 1,461,910 $ 17.68 1,299,985 $ 16.36 |
Income Taxes (Tables)
Income Taxes (Tables) - Federal | 12 Months Ended |
Dec. 31, 2017 | |
Schedule of Income Tax Disclosure | |
Schedule of Components of Income Tax Expense (Benefit) | Components of the provision (benefit) for income taxes consist of the following: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Current Federal $ 2 $ 4 $ 2 Total current income tax expense 2 4 2 Deferred Federal 66 84 82 Federal impact of tax reform 80 — — State — (1 ) (2 ) Total deferred income tax expense 146 83 80 Total income tax expense $ 148 $ 87 $ 82 |
Schedule of Effective Income Tax Rate Reconciliation | Our effective tax rate differs from the statutory federal tax rate. The following is a summary of such differences: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Provision at statutory federal income tax rate (35%) $ 74 $ 90 $ 84 Increases (decreases) resulting from: Tax Reform 80 — — Bank Owned Life Insurance (3 ) (3 ) (1 ) Restricted stock compensation (2 ) — — State income tax (benefit), net of federal income tax effect (includes valuation allowance) — (1 ) (2 ) Warrant expense (income) — 1 1 Non-deductible compensation — — 1 Other (1 ) — (1 ) Provision for income taxes $ 148 $ 87 $ 82 Effective tax provision rate 70.1 % 33.7 % 34.2 % |
Schedule of Net Deferred Tax Assets | Temporary differences and carry forwards that give rise to DTAs and liabilities are comprised of the following: December 31, 2017 2016 (Dollars in millions) Deferred tax assets Net operating loss carryforwards (Federal and State) $ 110 $ 195 Allowance for loan losses 43 74 Litigation settlement 14 22 Alternative Minimum Tax credit carry forwards — 18 Representation and warranty reserves 3 10 Accrued compensation 10 15 Contingent Consideration 6 — Loan deferred fees and costs 2 3 Non-accrual interest revenue 1 2 Deferred interest 1 2 General business credits 3 1 Other 2 5 Total 195 347 Valuation allowance (20 ) (20 ) Total (net) 175 327 Deferred tax liabilities Premises and equipment (14 ) (12 ) Mortgage loan servicing rights (3 ) (11 ) Mark-to-market adjustments (10 ) (9 ) Commercial lease financing (9 ) (5 ) State and local taxes (3 ) (4 ) Total (39 ) (41 ) Net deferred tax asset $ 136 $ 286 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Banking and Thrift [Abstract] | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | The following tables present the regulatory capital ratios as of the dates indicated: Flagstar Bancorp Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) December 31, 2017 Tangible capital (to adjusted avg. total assets) $ 1,442 8.51 % N/A N/A N/A N/A Tier 1 capital (to adjusted avg. total assets) 1,442 8.51 % $ 678 4.0 % $ 848 5.0 % Common equity Tier 1 capital (to RWA) 1,216 11.50 % 476 4.5 % 688 6.5 % Tier 1 capital (to RWA) 1,442 13.63 % 635 6.0 % 846 8.0 % Total capital (to RWA) 1,576 14.90 % 846 8.0 % 1,058 10.0 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,256 8.88 % N/A N/A N/A N/A Tier 1 capital (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. Flagstar Bank Actual For Capital Adequacy Purposes Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in millions) December 31, 2017 Tangible capital (to adjusted avg. total assets) $ 1,531 9.04 % N/A N/A N/A N/A Tier 1 capital (to adjusted avg. total assets) 1,531 9.04 % $ 677 4.0 % $ 847 5.0 % Common equity Tier 1 capital (to RWA) 1,531 14.46 % 476 4.5 % 688 6.5 % Tier 1 capital (to RWA) 1,531 14.46 % 635 6.0 % 847 8.0 % Total capital (to RWA) 1,664 15.72 % 847 8.0 % 1,059 10.0 % December 31, 2016 Tangible capital (to adjusted avg. total assets) $ 1,491 10.52 % N/A N/A N/A N/A Tier 1 capital (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, Contingenc49
Legal Proceedings, Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Significant Commitments | The following table is a summary of the contractual amount of significant commitments: December 31, 2017 2016 (Dollars in millions) Commitments to extend credit Mortgage loan interest-rate lock commitments $ 3,667 $ 4,115 Warehouse loan commitments 1,618 1,670 Commercial and industrial commitments 695 424 Other commercial commitments 1,021 651 HELOC commitments 283 179 Other consumer commitments 15 57 Standby and commercial letters of credit 50 30 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 Statements of Financial Condition and by level in the valuation hierarchy: December 31, 2017 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 987 $ — $ 987 Agency - Residential — 794 — 794 Municipal obligations — 34 — 34 Corporate debt obligations — 38 — 38 Loans held-for-sale Residential first mortgage loans — 4,300 — 4,300 Loans held-for-investment Residential first mortgage loans — 8 — 8 Home equity — — 4 4 Mortgage servicing rights — — 291 291 Derivative assets Rate lock commitments (fallout-adjusted) — — 24 24 Mortgage-backed securities forwards — 4 — 4 Interest rate swaps and swaptions — 11 — 11 Total assets at fair value $ — $ 6,176 $ 319 $ 6,495 Derivative liabilities Interest rate swap on FHLB advances — (1 ) — (1 ) Mortgage-backed securities forwards — (6 ) — (6 ) Interest rate swaps — (4 ) — (4 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (25 ) (25 ) Total liabilities at fair value $ — $ (11 ) $ (85 ) $ (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. December 31, 2016 Level 1 Level 2 Level 3 Total Fair Value (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 ) |
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: Balance at Recorded Recorded Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Year Total Total Total (Dollars in millions) For the Years Ended December 31, 2017 Assets Loans held-for-sale Home equity $ — $ 1 $ — $ — $ — $ (52 ) $ (1 ) $ 52 $ — Loans held-for-investment Home equity 65 2 — — — — (8 ) (55 ) 4 Mortgage servicing rights 335 (22 ) — — 288 (310 ) — — 291 Rate lock commitments (net) (1) 18 54 — — 267 — — (315 ) 24 Totals $ 418 $ 35 $ — $ — $ 555 $ (362 ) $ (9 ) $ (318 ) $ 319 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ — $ — $ (60 ) Contingent consideration — (1 ) — — (25 ) — 1 — (25 ) Totals $ (60 ) $ (1 ) $ — $ — $ (25 ) $ — $ 1 $ — $ (85 ) For the Years Ended December 31, 2016 Assets Loans held-for-investment Home equity $ 106 $ 5 $ — $ — $ — $ — $ (46 ) $ — $ 65 Mortgage servicing rights 296 (105 ) — — 228 (84 ) — — 335 Rate lock commitments (net) (1) 26 25 — — 325 — — (358 ) 18 Totals $ 428 $ (75 ) $ — $ — $ 553 $ (84 ) $ (46 ) $ (358 ) $ 418 Liabilities DOJ litigation settlement $ (84 ) $ 24 $ — $ — $ — $ — $ — $ — $ (60 ) Year Ended December 31, 2015 Assets Investment securities available-for-sale Municipal obligation $ 2 $ — $ — $ — $ — $ — $ (2 ) $ — $ — Loans held-for-investment Home equity $ 185 $ (2 ) $ — $ — $ — $ — $ (77 ) $ — $ 106 Mortgage servicing rights 258 (46 ) — — 260 (176 ) — — 296 Other investments 100 (100 ) — Rate lock commitments (net) (1) 31 60 — — 277 — — (342 ) 26 Totals $ 576 $ 12 $ — $ — $ 537 $ (176 ) $ (179 ) $ (342 ) $ 428 Liabilities Long-term debt $ (84 ) $ — $ (3 ) $ — $ — $ 52 $ 35 $ — $ — DOJ litigation settlement (82 ) (2 ) — — — — — — (84 ) Totals $ (166 ) $ (2 ) $ (3 ) $ — $ — $ 52 $ 35 $ — $ (84 ) (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) December 31, 2017 Assets Loans held-for-investment Home equity $ 4 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 5.0% - 7.5% (6.3%) Rate lock commitments (net) $ 24 Consensus pricing Origination pull-through rate 64.7% - 97.1% (82.0%) Liabilities DOJ litigation settlement $ (60 ) Discounted cash flows Discount rate 7.8% - 11.7% (9.7%) Contingent consideration $ (25 ) 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) December 31, 2017 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 21 — 21 (10 ) Repossessed assets (3) 8 — 8 — Totals $ 35 $ 6 $ 29 $ (11 ) 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 years ended December 31, 2017 and 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) December 31, 2017 Impaired loans held-for-investment Loans held-for-investment $ 21 Fair value of collateral Loss severity discount 25% - 30% (27.9%) Repossessed assets $ 8 Fair value of collateral Loss severity discount 0% - 100% (70.9%) 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: December 31, 2017 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 204 $ 204 $ 204 $ — $ — Investment securities available-for-sale 1,853 1,853 — 1,853 — Investment securities held-to-maturity 939 924 — 924 — Loans held-for-sale 4,321 4,322 — 4,322 — Loans held-for-investment 7,713 7,667 — 8 7,659 Loans with government guarantees 271 261 — 261 — Mortgage servicing rights 291 291 — — 291 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 330 330 — 330 — Repossessed assets 8 8 — — 8 Other assets, foreclosure claims 84 84 — 84 — Derivative financial instruments, assets 39 39 — 15 24 Liabilities Retail deposits Demand deposits and savings accounts $ (4,965 ) $ (4,557 ) $ — $ (4,557 ) $ — Certificates of deposit (1,493 ) (1,498 ) — (1,498 ) — Wholesale deposits (45 ) (43 ) — (43 ) — Government deposits (1,073 ) (1,048 ) — (1,048 ) — Company controlled deposits (1,358 ) (1,311 ) — (1,311 ) — Federal Home Loan Bank advances (5,665 ) (5,662 ) — (5,662 ) — Long-term debt (494 ) (417 ) — (417 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (25 ) (25 ) — — (25 ) Derivative financial instruments, liabilities (11 ) (11 ) — (11 ) — 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: For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 283 $ 269 $ 321 Loans held-for-investment Other noninterest income 1 1 40 Liabilities Long-term debt Other noninterest income $ — $ — $ 29 Litigation settlement Other noninterest income — 24 — Other noninterest (expense) — — (2 ) |
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: December 31, 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 $ 6 $ 5 $ (1 ) $ 2 $ 2 $ — Loans held-for-investment 5 4 (1 ) 19 13 (6 ) Total nonaccrual loans $ 11 $ 9 $ (2 ) $ 21 $ 15 $ (6 ) Other performing loans Loans held-for-sale $ 4,167 $ 4,295 $ 128 $ 3,103 $ 3,143 $ 40 Loans held-for-investment 10 8 (2 ) 72 59 (13 ) Total other performing loans $ 4,177 $ 4,303 $ 126 $ 3,175 $ 3,202 $ 27 Total loans Loans held-for-sale $ 4,173 $ 4,300 $ 127 $ 3,105 $ 3,145 $ 40 Loans held-for-investment 15 12 (3 ) 91 72 (19 ) Total loans $ 4,188 $ 4,312 $ 124 $ 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 21 - Legal Proceedings, Contingencies and Commitments. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following tables present financial information by business segment for the periods indicated: Year Ended December 31, 2017 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 238 $ 129 $ 11 $ 12 $ 390 Net gain (loss) on loan sales (10 ) 278 — — 268 Other noninterest income 31 92 66 13 202 Total net interest income and noninterest income 259 499 77 25 860 Benefit (provision) for loan losses (4 ) (4 ) — 2 (6 ) Compensation and benefits (62 ) (100 ) (16 ) (121 ) (299 ) Other noninterest expense (92 ) (163 ) (61 ) (28 ) (344 ) Total noninterest expense (154 ) (263 ) (77 ) (149 ) (643 ) Income (loss) before overhead allocations and income taxes 101 232 — (122 ) 211 Overhead allocations (41 ) (63 ) (23 ) 127 — Benefit (provision) for income taxes (21 ) (59 ) 8 (76 ) (148 ) Net income (loss) $ 39 $ 110 $ (15 ) $ (71 ) $ 63 Intersegment revenue $ (6 ) $ 4 $ 19 $ (17 ) $ — Average balances Loans held-for-sale $ 16 $ 4,130 $ — $ — $ 4,146 Loans with government guarantees — 290 — — 290 Loans held-for-investment (2) 6,475 7 — 29 6,511 Total assets 6,544 5,414 36 3,852 15,846 Deposits 7,454 — 1,453 — 8,907 (1) Includes adjustments made to reclassify income and expenses relating to operating leases and CCD income for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2016 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 206 $ 90 $ 21 $ 6 $ 323 Net gain on loan sales 6 310 — — 316 Other noninterest income 28 43 60 40 171 Total net interest income and noninterest income 240 443 81 46 810 Benefit (provision) for loan losses 10 (2 ) — — 8 Compensation and benefits (56 ) (81 ) (15 ) (117 ) (269 ) Other noninterest expense (89 ) (123 ) (63 ) (16 ) (291 ) Total noninterest expense (145 ) (204 ) (78 ) (133 ) (560 ) Income (loss) before overhead allocations and income taxes 105 237 3 (87 ) 258 Overhead allocations (35 ) (54 ) (23 ) 112 — Benefit (provision) for income taxes (24 ) (64 ) 7 (6 ) (87 ) Net income (loss) $ 46 $ 119 $ (13 ) $ 19 $ 171 Intersegment revenue $ (3 ) $ (1 ) $ 23 $ (19 ) $ — Average balances Loans held-for-sale $ 66 $ 3,068 $ — $ — $ 3,134 Loans with government guarantees — 435 — — 435 Loans held-for-investment (2) 5,809 6 — — 5,815 Total assets 5,906 4,435 28 3,538 13,907 Deposits 7,151 — 1,611 — 8,762 (1) Includes adjustments made to reclassify income and expenses relating to operating leases and CCD income for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2015 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 171 $ 80 $ 4 $ 32 $ 287 Net gain (loss) on loan sales (15 ) 303 — — 288 Other noninterest income 25 93 61 3 182 Total net interest income and noninterest income 181 476 65 35 757 Benefit for loan losses 19 — — — 19 Compensation and benefits (47 ) (73 ) (15 ) (102 ) (237 ) Other noninterest expense (86 ) (108 ) (73 ) (32 ) (299 ) Total noninterest expense (133 ) (181 ) (88 ) (134 ) (536 ) Income (loss) before overhead allocations and income taxes 67 295 (23 ) (99 ) 240 Overhead allocations (27 ) (66 ) (20 ) 113 — Benefit (provision) for income taxes (14 ) (80 ) 15 (3 ) (82 ) Net income (loss) $ 26 $ 149 $ (28 ) $ 11 $ 158 Intersegment revenue $ (15 ) $ 7 $ 20 $ (12 ) $ — Average balances Loans held-for-sale $ 40 $ 2,148 $ — $ — $ 2,188 Loans with government guarantees — 633 — — 633 Loans held-for-investment 4,986 4 — 86 5,076 Total assets 4,972 3,553 52 3,379 11,956 Deposits 6,674 — 1,203 — 7,877 (1) Includes adjustments made to reclassify income and expenses relating to CCD income for subservicing clients. |
Holding Company Only Financia52
Holding Company Only Financial Statements (Tables) - Parent Company | 12 Months Ended |
Dec. 31, 2017 | |
Condensed Financial Statements, Captions | |
Schedule of Condensed Unconsolidated Statements of Financial Condition | Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Financial Condition (Dollars in millions) December 31, 2017 2016 (Dollars in millions) Assets Cash and cash equivalents $ 196 $ 70 Investment in subsidiaries (1) 1,676 1,728 Other assets 44 57 Total assets $ 1,916 $ 1,855 Liabilities and Stockholders’ Equity Liabilities Long term debt $ 494 $ 493 Other liabilities 23 26 Total liabilities 517 519 Stockholders’ Equity Common stock 1 1 Additional paid in capital 1,512 1,503 Accumulated other comprehensive income (17 ) (7 ) Accumulated deficit (97 ) (161 ) Total stockholders’ equity 1,399 1,336 Total liabilities and stockholders’ equity $ 1,916 $ 1,855 (1) Includes unconsolidated trusts of $7 million for December 31, 2017 and 2016 . |
Schedule of Condensed Unconsolidated Statements of Operations | Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Operations (Dollars in millions) For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Expenses Interest $ 25 $ 16 $ 7 General and administrative 9 9 13 Total 34 25 20 Loss before undistributed income of subsidiaries (34 ) (25 ) (20 ) Equity in undistributed income of subsidiaries 110 188 172 Income before income taxes 76 163 152 Provision (benefit) for income taxes 13 (8 ) (6 ) Net income 63 171 158 Other comprehensive income (1) (9 ) (9 ) (6 ) Comprehensive income $ 54 $ 162 $ 152 (1) See Consolidated Statements of Comprehensive Income for other comprehensive income (loss) detail. |
Schedule of Condensed Unconsolidated Statements of Cash Flows | Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Cash Flows (Dollars in millions) For the Years Ended December 31, 2017 2016 2015 (Dollars in millions) Net income (loss) $ 63 $ 171 $ 158 Adjustments to reconcile net loss to net cash provided by operating activities Equity in (income) loss of subsidiaries 47 12 (172 ) Stock-based compensation 5 10 3 Change in other assets 18 (8 ) (6 ) Provision for deferred tax benefit — — 1 Change in other liabilities (2 ) (22 ) 9 Change in fair value and other non-cash changes (5 ) (4 ) — Net cash used in operating activities 126 159 (7 ) Investing Activities Net change in investment in subsidiaries — — (2 ) Net cash provided by (used in) investment activities — — (2 ) Financing Activities Proceeds from the issuance of junior subordinated debentures — 245 — Redemption of preferred stock — (267 ) — Dividends paid on preferred stock — (104 ) — Net cash used in financing activities — (126 ) — Net increase (decrease) in cash and cash equivalents 126 33 (9 ) Cash and cash equivalents, beginning of year 70 37 46 Cash and cash equivalents, end of year $ 196 $ 70 $ 37 |
Quarterly Financial Data (Una53
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table represents summarized data for each of the quarters in 2017 , 2016 and 2015 : 2017 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 110 $ 129 $ 140 $ 148 Interest expense 27 32 37 41 Net interest income 83 97 103 107 Provision (benefit) for loan losses 3 (1 ) 2 2 Net interest income after provision for loan losses 80 98 101 105 Net gain on loan sales 48 66 75 79 Loan fees and charges 15 20 23 24 Deposit fees and charges 4 5 5 4 Loan administration income 5 6 5 5 Net return (loss) on the mortgage servicing rights 14 6 6 (4 ) Representation and warranty benefit 4 3 4 2 Other noninterest income 10 10 12 14 Noninterest expense 140 154 171 178 Income before income tax 40 60 60 51 Provision for income taxes 13 19 20 96 Net income (loss) from continuing operations $ 27 $ 41 $ 40 $ (45 ) Basic income (loss) per share $ 0.47 $ 0.72 $ 0.71 $ (0.79 ) Diluted income (loss) per share $ 0.46 $ 0.71 $ 0.70 $ (0.79 ) 2016 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 101 $ 99 $ 106 $ 111 Interest expense 22 22 26 24 Net interest income 79 77 80 87 (Benefit) provision for loan losses (13 ) (3 ) 7 1 Net interest income after provision for loan losses 92 80 73 86 Net gain on loan sales 75 90 94 57 Loan fees and charges 15 19 22 20 Loan administration income 6 4 4 4 Net (loss) on the mortgage servicing rights (6 ) (4 ) (11 ) (5 ) Representation and warranty benefit 2 4 6 7 Other noninterest income 13 15 41 15 Noninterest expense 137 139 142 142 Income before income tax 60 69 87 42 Provision for income taxes 21 22 30 14 Net income from continuing operations $ 39 $ 47 $ 57 $ 28 Basic income per share $ 0.56 $ 0.67 $ 0.98 $ 0.50 Diluted income per share $ 0.54 $ 0.66 $ 0.96 $ 0.49 2015 First Second Third Fourth (Dollars in millions, except per share data) Interest income $ 79 $ 90 $ 91 $ 95 Interest expense 14 17 18 19 Net interest income 65 73 73 76 (Benefit) for loan losses (4 ) (13 ) (1 ) (1 ) Net interest income after provision for loan losses 69 86 74 77 Net gain on loan sales 91 83 68 46 Loan fees and charges 17 19 17 14 Loan administration income 4 7 8 7 Net (loss) return on mortgage servicing rights (2 ) 9 12 9 Representation and warranty benefit 2 5 6 6 Other noninterest income 7 3 17 15 Noninterest expense 138 138 131 129 Income before income tax 50 74 71 45 Provision for income taxes 18 28 24 12 Net income from continuing operations $ 32 $ 46 $ 47 $ 33 Basis income per share $ 0.43 $ 0.69 $ 0.70 $ 0.45 Diluted income per share $ 0.43 $ 0.68 $ 0.69 $ 0.44 |
Description of Business, Basi54
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Loans receivable, minimum number of days past due to be placed on non-accrual status | 90 days | ||
Advertising expense | $ 16 | $ 11 | $ 9 |
Investment securities held-to-maturity | 939 | 1,093 | |
Investment securities available-for-sale | 1,853 | $ 1,480 | |
Adjustment | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Investment securities held-to-maturity | (144) | ||
Investment securities available-for-sale | $ 144 | ||
Minimum | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Estimated useful lives | 3 years | ||
Minimum | Computer hardware and software | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Estimated useful lives | 30 years | ||
Maximum | Computer hardware and software | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Estimated useful lives | 7 years | ||
Consumer Loan Secured by Real Estate | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Loans receivable, excluding real estate loans, minimum number of days past due for charge-off | 180 days | ||
Consumer Loan Not Secured by Real Estate | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Loans receivable, excluding real estate loans, minimum number of days past due for charge-off | 120 days |
Investment Securities (Details)
Investment Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Available-for-sale securities | |||
Amortized Cost | $ 1,887,000,000 | $ 1,498,000,000 | |
Gross Unrealized Gains | 1,000,000 | 3,000,000 | |
Gross Unrealized Losses | (35,000,000) | (21,000,000) | |
Fair Value | 1,853,000,000 | 1,480,000,000 | |
Held-to-maturity securities | |||
Amortized Cost | 939,000,000 | 1,093,000,000 | |
Gross Unrealized Gains | 0 | 1,000,000 | |
Gross Unrealized Losses | (15,000,000) | (10,000,000) | |
Fair Value | 924,000,000 | 1,084,000,000 | |
Other than temporary impairment | 0 | 0 | $ 0 |
Agency - Commercial | |||
Held-to-maturity securities | |||
Amortized Cost | 526,000,000 | 595,000,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (9,000,000) | (6,000,000) | |
Fair Value | 517,000,000 | 589,000,000 | |
Agency - Residential | |||
Held-to-maturity securities | |||
Amortized Cost | 413,000,000 | 498,000,000 | |
Gross Unrealized Gains | 0 | 1,000,000 | |
Gross Unrealized Losses | (6,000,000) | (4,000,000) | |
Fair Value | 407,000,000 | 495,000,000 | |
Agency - Commercial | |||
Available-for-sale securities | |||
Amortized Cost | 1,004,000,000 | 551,000,000 | |
Gross Unrealized Gains | 0 | 2,000,000 | |
Gross Unrealized Losses | (17,000,000) | (5,000,000) | |
Fair Value | 987,000,000 | 548,000,000 | |
Agency - Residential | |||
Available-for-sale securities | |||
Amortized Cost | 811,000,000 | 913,000,000 | |
Gross Unrealized Gains | 0 | 1,000,000 | |
Gross Unrealized Losses | (17,000,000) | (16,000,000) | |
Fair Value | 794,000,000 | 898,000,000 | |
Municipal obligations | |||
Available-for-sale securities | |||
Amortized Cost | 35,000,000 | 34,000,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (1,000,000) | 0 | |
Fair Value | 34,000,000 | $ 34,000,000 | |
Corporate debt obligations | |||
Available-for-sale securities | |||
Amortized Cost | 37,000,000 | ||
Gross Unrealized Gains | 1,000,000 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | $ 38,000,000 |
Investment Securities (Availabl
Investment Securities (Available-for-sale and Held-to-maturity Securities, Unrealized Losses) (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)security | Dec. 31, 2016USD ($)security | Dec. 31, 2015USD ($) | |
Schedule of Available-for-sale Securities | |||
Purchase of available-for-sale securities | $ 904,000,000 | $ 680,000,000 | $ 1,148,000,000 |
Purchase of investment securities held-to-maturity | 0 | 15,000,000 | 217,000,000 |
Proceeds from the sale of HTM securities | 0 | 0 | 0 |
Investment securities pledged as collateral | 2,000,000,000 | 879,000,000 | 14,000,000 |
Agency - Commercial | |||
Schedule of Available-for-sale Securities | |||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 348,000,000 | $ 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 25 | 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (8,000,000) | $ 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 99,000,000 | $ 528,000,000 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 8 | 34 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (1,000,000) | $ (6,000,000) | |
Agency - Residential | |||
Schedule of Available-for-sale Securities | |||
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 111,000,000 | $ 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 16 | 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (3,000,000) | $ 0 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 293,000,000 | $ 385,000,000 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 43 | 43 | |
Held-to-maturity Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (3,000,000) | $ (4,000,000) | |
US Government-sponsored Enterprises Debt Securities | |||
Schedule of Available-for-sale Securities | |||
Purchase of available-for-sale securities | 904,000,000 | 680,000,000 | |
AFS securities sold | 289,000,000 | 291,000,000 | 170,000,000 |
Gain on sale of AFS securities | 3,000,000 | 4,000,000 | $ 3,000,000 |
Agency - Commercial | |||
Schedule of Available-for-sale Securities | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 218,000,000 | $ 6,000,000 | |
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 20 | 1 | |
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (7,000,000) | $ 0 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 744,000,000 | $ 345,000,000 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 41 | 29 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (11,000,000) | $ (5,000,000) | |
Agency - Residential | |||
Schedule of Available-for-sale Securities | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 452,000,000 | $ 0 | |
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 36 | 0 | |
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ (14,000,000) | $ 0 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 263,000,000 | $ 748,000,000 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 33 | 55 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ (3,000,000) | $ (16,000,000) | |
Municipal obligations | |||
Schedule of Available-for-sale Securities | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 6,000,000 | $ 0 | |
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 3 | 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 | $ 22,000,000 | $ 17,000,000 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 9 | 8 | |
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ 0 | $ 0 | |
Corporate debt obligations | |||
Schedule of Available-for-sale Securities | |||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Fair Value | $ 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Number of Securities | security | 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration 12 Months and Over, Unrealized Loss | $ 0 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Fair Value | $ 3,000,000 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Number of Securities | security | 1 | ||
Available-for-sale Securities, Unrealized Loss Position with Duration Under 12 Months, Unrealized Loss | $ 0 |
Investment Securities (Contract
Investment Securities (Contractual Maturity) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Available-for-sale Securities, Maturities, Amortized Cost | ||
Due after one year through five years | $ 10 | |
Due after five years through 10 years | 45 | |
Due after 10 years | 1,832 | |
Total, amortized cost | 1,887 | |
Available-for-sale Securities, Maturities, Fair Value | ||
Due after one year through five years | 10 | |
Due after five years through 10 years | 46 | |
Due after 10 years | 1,797 | |
Fair Value | $ 1,853 | $ 1,480 |
Available-for-sale Securities, Maturities, Weighted Average Yield | ||
Due after one year through five years, weighted average yield (as a percent) | 2.58% | |
Due after five years through ten years, weighted average yield (as a percent) | 4.85% | |
Due after ten years, weighted average yield (as a percent) | 2.40% | |
Held-to-maturity Securities, Maturities, Amortized Cost | ||
Due after one year through five years | $ 35 | |
Due after five years through 10 years | 26 | |
Due after 10 years | 878 | |
Amortized Cost | 939 | 1,093 |
Held-to-Maturity Securities, Maturities, Fair Value | ||
Due after one year through five years | 35 | |
Due after five years through 10 years | 26 | |
Due after 10 years | 863 | |
Fair Value | $ 924 | $ 1,084 |
Held-to-maturity Securities, Maturities, Weighted Average Yield | ||
Due after one year through five years, weighted-average yield (percent) | 2.48% | |
Due after five years through 10 years, weighted-average yield (percent) | 2.52% | |
Due after 10 years, weighted-average yield (percent) | 2.44% |
Loans Held-for-Sale (Details)
Loans Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accounts, Notes, Loans and Financing Receivable | |||||||||||||||
Loans held-for-sale | $ 4,321 | $ 3,177 | $ 4,321 | $ 3,177 | |||||||||||
Net gain on loan sales | 79 | $ 75 | $ 66 | $ 48 | 57 | $ 94 | $ 90 | $ 75 | $ 46 | $ 68 | $ 83 | $ 91 | 268 | 316 | $ 288 |
Loans held-for-sale recorded at lower of cost or fair value | $ 21 | $ 32 | 21 | 32 | |||||||||||
Loans held-for-sale | |||||||||||||||
Accounts, Notes, Loans and Financing Receivable | |||||||||||||||
Net gain on loan sales | $ 267 | $ 301 | $ 288 |
Loans Held-for-Investment (Deta
Loans Held-for-Investment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | $ 7,713 | $ 6,065 |
Current Fiscal Year End Date | --12-31 | |
Total consumer loans | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | $ 3,443 | 2,798 |
Residential first mortgage | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 2,754 | 2,327 |
Home Equity | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 664 | 443 |
Other | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 25 | 28 |
Total commercial loans | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 4,270 | 3,267 |
Commercial real estate | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 1,932 | 1,261 |
Commercial real estate | Commercial Borrower | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 307 | 244 |
Commercial and industrial | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | 1,196 | 769 |
Warehouse lending | ||
Loans and Leases Receivable, Net Amount [Abstract] | ||
Loans held-for-investment, net | $ 1,142 | $ 1,237 |
Loans Held-for-Investment (Loan
Loans Held-for-Investment (Loans Held-for-sale Narrative) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans held-for-investment | |||
Accounts, Notes, Loans and Financing Receivable | |||
Loans pledged as collateral | $ 7,100 | $ 5,300 | |
Residential first mortgage | |||
Accounts, Notes, Loans and Financing Receivable | |||
Unpaid principal balance | 127 | 1,200 | $ 1,000 |
Net (loss) gain on sale of assets | 14 | 1 | |
Purchases of receivables | 8 | 175 | |
Premium paid on significant purchases | 1 | ||
HELOC | |||
Accounts, Notes, Loans and Financing Receivable | |||
Purchases of receivables | 250 | 197 | |
Premium paid on significant purchases | 9 | 7 | |
Nonperforming | |||
Accounts, Notes, Loans and Financing Receivable | |||
Unpaid principal balance | 110 | ||
Net (loss) gain on sale of assets | $ (2) | ||
Nonperforming | Residential first mortgage | |||
Accounts, Notes, Loans and Financing Receivable | |||
Unpaid principal balance | 25 | $ 436 | |
Net (loss) gain on sale of assets | $ 2 |
Loans Held-for-Investment (Allo
Loans Held-for-Investment (Allowance for Loan Losses Rollforward) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Loan Losses | |||
Beginning balance ALLL | $ 142 | $ 187 | $ 297 |
Charge-offs | (14) | (36) | (101) |
Recoveries | 6 | 6 | 10 |
Provision (benefit) | 6 | (15) | (19) |
Ending balance ALLL | 140 | 142 | 187 |
Residential first mortgage | |||
Allowance for Loan Losses | |||
Charge-offs | (1) | (8) | (69) |
LGG | |||
Allowance for Loan Losses | |||
Charge-offs | (4) | (14) | (3) |
Residential first mortgage | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 65 | 116 | 234 |
Charge-offs | (8) | (29) | (87) |
Recoveries | 1 | 2 | 3 |
Provision (benefit) | (11) | (24) | (34) |
Ending balance ALLL | 47 | 65 | 116 |
Home Equity | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 24 | 32 | 31 |
Charge-offs | (3) | (4) | (7) |
Recoveries | 2 | 0 | 2 |
Provision (benefit) | (1) | (4) | 6 |
Ending balance ALLL | 22 | 24 | 32 |
Other | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 1 | 2 | 1 |
Charge-offs | (2) | (3) | (4) |
Recoveries | 1 | 3 | 3 |
Provision (benefit) | 1 | (1) | 2 |
Ending balance ALLL | 1 | 1 | 2 |
Commercial real estate | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 28 | 18 | 17 |
Charge-offs | (1) | 0 | 0 |
Recoveries | 1 | 1 | 2 |
Provision (benefit) | 17 | 9 | (1) |
Ending balance ALLL | 45 | 28 | 18 |
Commercial and industrial | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 17 | 13 | 11 |
Charge-offs | 0 | 0 | (3) |
Recoveries | 1 | 0 | 0 |
Provision (benefit) | 1 | 4 | 5 |
Ending balance ALLL | 19 | 17 | 13 |
Warehouse lending | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 7 | 6 | 3 |
Charge-offs | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Provision (benefit) | (1) | 1 | 3 |
Ending balance ALLL | $ 6 | 7 | $ 6 |
Government guarantees | |||
Allowance for Loan Losses | |||
Provision (benefit) | $ 7 |
Loans Held-for-Investment (Al62
Loans Held-for-Investment (Allowance for Loan Losses Additional Disclosures) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | $ 61 | $ 75 | ||
Loans held-for-investment, collectively evaluated | 7,640 | 5,918 | ||
Total loans | 7,701 | 5,993 | ||
Allowance for loan losses, individually evaluated | 16 | 13 | ||
Allowance for loan losses, collectively evaluated | 124 | 129 | ||
Total allowance for loan losses | 140 | 142 | $ 187 | $ 297 |
Residential first mortgage | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 34 | 46 | ||
Loans held-for-investment, collectively evaluated | 2,712 | 2,274 | ||
Total loans | 2,746 | 2,320 | ||
Allowance for loan losses, individually evaluated | 6 | 5 | ||
Allowance for loan losses, collectively evaluated | 41 | 60 | ||
Total allowance for loan losses | 47 | 65 | 116 | 234 |
Home Equity | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 27 | 29 | ||
Loans held-for-investment, collectively evaluated | 633 | 349 | ||
Total loans | 660 | 378 | ||
Allowance for loan losses, individually evaluated | 10 | 8 | ||
Allowance for loan losses, collectively evaluated | 12 | 16 | ||
Total allowance for loan losses | 22 | 24 | 32 | 31 |
Other | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 25 | 28 | ||
Total loans | 25 | 28 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 1 | 1 | ||
Total allowance for loan losses | 1 | 1 | 2 | 1 |
Commercial real estate | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 1,932 | 1,261 | ||
Total loans | 1,932 | 1,261 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 45 | 28 | ||
Total allowance for loan losses | 45 | 28 | 18 | 17 |
Commercial and industrial | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 1,196 | 769 | ||
Total loans | 1,196 | 769 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 19 | 17 | ||
Total allowance for loan losses | 19 | 17 | 13 | 11 |
Warehouse lending | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 1,142 | 1,237 | ||
Total loans | 1,142 | 1,237 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 6 | 7 | ||
Total allowance for loan losses | $ 6 | $ 7 | $ 6 | $ 3 |
Loans Held-for-Investment (Past
Loans Held-for-Investment (Past Due Loans) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans Held-for-Investment, Aging | |||
Total Past Due | $ 34,000,000 | $ 50,000,000 | |
Current | 7,679,000,000 | 6,015,000,000 | |
Net investment in commercial financing leases | 7,713,000,000 | 6,065,000,000 | |
90 days or greater past due, fair value option | 4,000,000 | 13,000,000 | |
Interest lost on nonaccrual loans | 1,000,000 | 2,000,000 | $ 6,000,000 |
90 days and still accruing | 0 | 0 | |
Consumer loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 34,000,000 | 50,000,000 | |
Current | 3,409,000,000 | 2,748,000,000 | |
Net investment in commercial financing leases | 3,443,000,000 | 2,798,000,000 | |
Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 27,000,000 | 35,000,000 | |
Current | 2,727,000,000 | 2,292,000,000 | |
Net investment in commercial financing leases | 2,754,000,000 | 2,327,000,000 | |
Home Equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 7,000,000 | 14,000,000 | |
Current | 657,000,000 | 429,000,000 | |
Net investment in commercial financing leases | 664,000,000 | 443,000,000 | |
Other | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 1,000,000 | |
Current | 25,000,000 | 27,000,000 | |
Net investment in commercial financing leases | 25,000,000 | 28,000,000 | |
Total commercial loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Current | 4,270,000,000 | 3,267,000,000 | |
Net investment in commercial financing leases | 4,270,000,000 | 3,267,000,000 | |
Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Current | 1,932,000,000 | 1,261,000,000 | |
Net investment in commercial financing leases | 1,932,000,000 | 1,261,000,000 | |
Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Current | 1,196,000,000 | 769,000,000 | |
Net investment in commercial financing leases | 1,196,000,000 | 769,000,000 | |
Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Current | 1,142,000,000 | 1,237,000,000 | |
Net investment in commercial financing leases | 1,142,000,000 | 1,237,000,000 | |
30-59 Days Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 3,000,000 | 8,000,000 | |
30-59 Days Past Due | Consumer loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 3,000,000 | 8,000,000 | |
30-59 Days Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 2,000,000 | 6,000,000 | |
30-59 Days Past Due | Home Equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 1,000,000 | 1,000,000 | |
30-59 Days Past Due | Other | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 1,000,000 | |
30-59 Days Past Due | Total commercial loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
30-59 Days Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
30-59 Days Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
30-59 Days Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 2,000,000 | 2,000,000 | |
60-89 Days Past Due | Consumer loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 2,000,000 | 2,000,000 | |
60-89 Days Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 2,000,000 | 0 | |
60-89 Days Past Due | Home Equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 2,000,000 | |
60-89 Days Past Due | Other | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | Total commercial loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 29,000,000 | 40,000,000 | |
90 Days or Greater Past Due | Consumer loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 29,000,000 | 40,000,000 | |
90 Days or Greater Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 23,000,000 | 29,000,000 | |
90 Days or Greater Past Due | Home Equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 6,000,000 | 11,000,000 | |
90 Days or Greater Past Due | Other | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | Total commercial loans | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | $ 0 | $ 0 |
Loans Held-for-Investment (Trou
Loans Held-for-Investment (Troubled Debt Restructurings) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Troubled Debt Restructurings | ||
TDR balance | $ 59 | $ 85 |
Allowance for loan losses on TDR loans | 13 | 9 |
TDR loans under fair value option | 3 | 25 |
Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 31 | 33 |
Consumer loans | Home Equity | ||
Troubled Debt Restructurings | ||
TDR balance | 28 | 52 |
Performing | ||
Troubled Debt Restructurings | ||
TDR balance | 43 | 67 |
Performing | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 19 | 22 |
Performing | Consumer loans | Home Equity | ||
Troubled Debt Restructurings | ||
TDR balance | 24 | 45 |
Nonperforming | ||
Troubled Debt Restructurings | ||
TDR balance | 16 | 18 |
Nonperforming | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 12 | 11 |
Nonperforming | Consumer loans | Home Equity | ||
Troubled Debt Restructurings | ||
TDR balance | $ 4 | $ 7 |
Loans Held-for-Investment (Tr65
Loans Held-for-Investment (Troubled Debt Restructuring Detail) (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017USD ($)loansloan | Dec. 31, 2016USD ($)loansloan | Dec. 31, 2015USD ($)loansloan | |
Troubled Debt Restructurings | |||
Number of Accounts | loan | 98 | 167 | 698 |
Pre-Modification Unpaid Principal Balance | $ 10 | $ 15 | $ 102 |
Post-Modification Unpaid Principal Balance | 9 | 14 | 98 |
Increase (Decrease) in Allowance at Modification | (1) | 0 | (2) |
Modifications subsequent to default (less than) | $ 1 | $ 1 | $ 1 |
Number of Accounts | loans | 1 | 8 | 8 |
Residential first mortgage | |||
Troubled Debt Restructurings | |||
Number of Accounts | loan | 16 | 23 | 325 |
Pre-Modification Unpaid Principal Balance | $ 4 | $ 4 | $ 81 |
Post-Modification Unpaid Principal Balance | 4 | 5 | 80 |
Increase (Decrease) in Allowance at Modification | $ 0 | $ 0 | $ (2) |
Number of Accounts | loans | 1 | 1 | 3 |
Home Equity | |||
Troubled Debt Restructurings | |||
Number of Accounts | loan | 82 | 143 | 370 |
Pre-Modification Unpaid Principal Balance | $ 6 | $ 9 | $ 21 |
Post-Modification Unpaid Principal Balance | 5 | 8 | 18 |
Increase (Decrease) in Allowance at Modification | $ (1) | $ 0 | $ 0 |
Number of Accounts | loans | 0 | 7 | 5 |
Commercial and industrial | |||
Troubled Debt Restructurings | |||
Number of Accounts | loan | 1 | ||
Pre-Modification Unpaid Principal Balance | $ 2 | ||
Post-Modification Unpaid Principal Balance | 1 | ||
Increase (Decrease) in Allowance at Modification | $ 0 | ||
Other consumer | |||
Troubled Debt Restructurings | |||
Number of Accounts | loan | 3 | ||
Pre-Modification Unpaid Principal Balance | $ 0 | ||
Post-Modification Unpaid Principal Balance | 0 | ||
Increase (Decrease) in Allowance at Modification | $ 0 |
Loans Held-for-Investment (Impa
Loans Held-for-Investment (Impaired Loans) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | $ 11 | $ 6 | |
With no related allowance recorded, unpaid principal balance | 12 | 6 | |
With an allowance recorded, recorded investment | 46 | 69 | |
With an allowance recorded, unpaid principal balance | 49 | 69 | |
With an allowance recorded, related allowance | 16 | 13 | |
Total recorded investment | 57 | 75 | |
Total unpaid principal balance | 61 | 75 | |
Average Recorded Investment | 66 | 84 | $ 191 |
Interest Income Recognized | 2 | 3 | 5 |
Residential first mortgage | |||
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | 11 | 6 | |
With no related allowance recorded, unpaid principal balance | 12 | 6 | |
With an allowance recorded, recorded investment | 22 | 40 | |
With an allowance recorded, unpaid principal balance | 22 | 40 | |
With an allowance recorded, related allowance | 6 | 5 | |
Total recorded investment | 33 | 46 | |
Total unpaid principal balance | 34 | 46 | |
Average Recorded Investment | 38 | 52 | 150 |
Interest Income Recognized | 1 | 1 | 5 |
Home Equity | |||
Financing Receivable, Impaired | |||
With an allowance recorded, recorded investment | 24 | 29 | |
With an allowance recorded, unpaid principal balance | 27 | 29 | |
With an allowance recorded, related allowance | 10 | 8 | |
Total recorded investment | 24 | 29 | |
Total unpaid principal balance | 27 | 29 | |
Average Recorded Investment | 28 | 30 | 39 |
Interest Income Recognized | 1 | 2 | 0 |
Commercial and industrial | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 0 | 2 | 2 |
Interest Income Recognized | $ 0 | $ 0 | $ 0 |
Loans Held-for-Investment (Cred
Loans Held-for-Investment (Credit Quality Indicators) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | $ 7,701 | $ 5,993 |
Loans held-for-investment, net | 7,713 | 6,065 |
Total consumer loans | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 3,443 | 2,798 |
Total consumer loans | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 3,364 | 2,687 |
Total consumer loans | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 48 | 69 |
Total consumer loans | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Total consumer loans | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 31 | 42 |
Residential first mortgage | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,746 | 2,320 |
Loans held-for-investment, net | 2,754 | 2,327 |
Residential first mortgage | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,706 | 2,273 |
Residential first mortgage | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 23 | 23 |
Residential first mortgage | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Residential first mortgage | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 25 | 31 |
Home Equity | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 660 | 378 |
Loans held-for-investment, net | 664 | 443 |
Home Equity | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 633 | 386 |
Home Equity | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 25 | 46 |
Home Equity | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Home Equity | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 6 | 11 |
Other | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 25 | 28 |
Loans held-for-investment, net | 25 | 28 |
Other | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 25 | 28 |
Other | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Total commercial loans | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 4,270 | 3,267 |
Total commercial loans | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 4,051 | 3,071 |
Total commercial loans | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 183 | 102 |
Total commercial loans | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 31 | 77 |
Total commercial loans | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 5 | 17 |
Commercial real estate | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,932 | 1,261 |
Loans held-for-investment, net | 1,932 | 1,261 |
Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,902 | 1,225 |
Commercial real estate | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 23 | 27 |
Commercial real estate | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 7 | 3 |
Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 6 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,196 | 769 |
Loans held-for-investment, net | 1,196 | 769 |
Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,135 | 678 |
Commercial and industrial | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 32 | 59 |
Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 24 | 21 |
Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 5 | 11 |
Warehouse lending | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,142 | 1,237 |
Loans held-for-investment, net | 1,142 | 1,237 |
Warehouse lending | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,014 | 1,168 |
Warehouse lending | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 128 | 16 |
Warehouse lending | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 53 |
Warehouse lending | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | $ 0 | $ 0 |
Loans with Government Guarant68
Loans with Government Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loans and Leases Receivable Disclosure [Abstract] | ||
Debt instrument, term | 10 years | |
Loans with government guarantees | $ 271 | $ 365 |
Repossessed assets and associated claims | $ 84 | $ 135 |
Repossessed Assets (Details)
Repossessed Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Repossessed Assets | |||
Repossessed assets | $ 14 | $ 17 | $ 19 |
Repossessed Assets | |||
Beginning balance | 14 | 17 | 19 |
Additions, net | 18 | 19 | 29 |
Disposals | (14) | (19) | (24) |
Net (write down) gain on disposal | (9) | (2) | 0 |
Transfers out | (1) | (1) | (7) |
Ending balance | 8 | 14 | $ 17 |
One-to-four family properties | |||
Repossessed Assets | |||
Repossessed assets | 11 | 11 | |
Repossessed Assets | |||
Beginning balance | 11 | ||
Ending balance | 5 | 11 | |
Commercial properties | |||
Repossessed Assets | |||
Repossessed assets | 3 | 3 | |
Repossessed Assets | |||
Beginning balance | 3 | ||
Ending balance | $ 3 | $ 3 |
Variable Interest Entities (Det
Variable Interest Entities (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)entityloan | Dec. 31, 2016USD ($)entityloan | |
Securitized Loans [Abstract] | ||
Number of variable interest entities | 0 | 0 |
FSTAR 2007-1 Mortgage Securitization | ||
Securitized Loans [Abstract] | ||
Number of variable interest entities | 1 | |
Number of loans | loan | 1,911 | 2,453 |
Aggregate principal balance | $ | $ 65 | $ 89 |
Federal Home Loan Bank Stock (D
Federal Home Loan Bank Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Federal Home Loan Bank Stock [Abstract] | |||
Federal home loan bank stock | $ 303,000,000 | $ 180,000,000 | |
Federal Home Loan Bank stock, minimum investment requirement, percentage of unpaid principal of mortgage loans, home purchase contracts and similar obligations | 1.00% | ||
Federal Home Loan Bank minimum percentage of advances required held | 4.50% | ||
Payments to acquire FHLB stock | $ 123,000,000 | 10,000,000 | $ 57,000,000 |
Proceeds from redemption of FHLB stock | 0 | 0 | 42,000,000 |
Dividend income | $ 9,000,000 | $ 7,000,000 | $ 6,000,000 |
Premises and Equipment (Details
Premises and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 623 | $ 533 |
Less accumulated depreciation | (293) | (258) |
Premises and equipment, net | $ 330 | 275 |
Minimum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 3 years | |
Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 30 years | |
Land | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 61 | 59 |
Office buildings and improvements | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 159 | 153 |
Office buildings and improvements | Minimum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 15 years | |
Office buildings and improvements | Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 31 years 6 months | |
Computer hardware and software | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 300 | 256 |
Computer hardware and software | Minimum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 3 years | |
Computer hardware and software | Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 7 years | |
Furniture, fixtures and equipment | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 63 | 61 |
Furniture, fixtures and equipment | Minimum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 5 years | |
Furniture, fixtures and equipment | Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 7 years | |
Leased equipment | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 40 | $ 4 |
Leased equipment | Minimum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 3 years | |
Leased equipment | Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 10 years |
Premises and Equipment - Narrat
Premises and Equipment - Narratives (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 39 | $ 31 | $ 26 |
Lease rental expense | $ 9 | $ 5 | $ 7 |
Premises and Equipment (Operati
Premises and Equipment (Operating Leases) (Details) $ in Millions | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments | |
2,018 | $ 8 |
2,019 | 7 |
2,020 | 5 |
2,021 | 3 |
2,022 | 1 |
Thereafter | 2 |
Total | $ 26 |
Mortgage Servicing Rights (Resi
Mortgage Servicing Rights (Residential MSRs, Fair value) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Asset at Fair Value | |||
Balance at beginning of period | $ 335 | ||
Changes in fair value due to: | |||
Fair value of MSRs at end of period | 291 | $ 335 | |
Residential first mortgage | |||
Servicing Asset at Fair Value | |||
Balance at beginning of period | 335 | 296 | $ 258 |
Additions from loans sold with servicing retained | 288 | 228 | 260 |
Reductions from sales | (310) | (84) | (176) |
Changes in fair value due to: | |||
Decrease in MSR value due to pay-offs, pay-downs, and run-off | (22) | (62) | (43) |
Changes in estimates of fair value | 0 | (43) | (3) |
Fair value of MSRs at end of period | $ 291 | $ 335 | $ 296 |
Mortgage Servicing Rights (Sche
Mortgage Servicing Rights (Schedule of Sensitivity Analysis of Fair Value) (Details) - Mortgage servicing rights $ in Millions | 12 Months Ended | |
Dec. 31, 2017USD ($)$ / loan | Dec. 31, 2016USD ($)$ / loan | |
Servicing Assets at Fair Value | ||
Option adjusted spread, Actual (percent) | 6.29% | 7.78% |
Option adjusted spread, Fair value due to 10% adverse change | $ 286 | $ 326 |
Option adjusted spread, Fair value due to 20% adverse change | $ 282 | $ 318 |
Constant prepayment rate, Actual (percent) | 9.93% | 16.68% |
Constant prepayment rate, Fair value due to 10% adverse change | $ 283 | $ 322 |
Constant prepayment rate, Fair value due to 20% adverse change | $ 277 | $ 311 |
Weighted average cost to service per loan, Actual (in usd per loan) | $ / loan | 73 | 68.18 |
Weighted average cost to service per loan, Fair value due to 10% adverse change | $ 288 | $ 330 |
Weighted average cost to service per loan, Fair value due to 20% adverse change | $ 286 | $ 326 |
Mortgage Servicing Rights (Inco
Mortgage Servicing Rights (Income and Fees from Associated with Mortgage Servicing Asset and Mortgage Loan Subserviced) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Servicing Assets at Fair Value | |||
Gain related to the sale of MSRs | $ 4 | $ 2 | |
Residential first mortgage loans subserviced for others | |||
Servicing Assets at Fair Value | |||
Total (loss) return included in net return on mortgage servicing rights | $ 22 | (26) | 28 |
Residential first mortgage loans subserviced for others | Net (loss) return on mortgage servicing rights | |||
Servicing Assets at Fair Value | |||
Servicing fees, ancillary income and late fees | 60 | 81 | 69 |
Fair value adjustments | (22) | (109) | (44) |
Gain (loss) on MSR derivatives | (8) | 0 | 5 |
Net transaction costs | (8) | 2 | (2) |
Residential first mortgage loans subserviced for others | Loan Administration Income | |||
Servicing Assets at Fair Value | |||
Servicing fees, ancillary income and late fees | 35 | 29 | 33 |
Other servicing charges | (14) | (11) | (7) |
Total income on mortgage loans subserviced, included in loan administration | $ 21 | $ 18 | $ 26 |
Derivative Financial Instrume78
Derivative Financial Instruments (Narrative) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Derivative Instruments, Gain (Loss) | ||||
Stockholders' equity | $ 1,399 | $ 1,336 | $ 1,529 | $ 1,373 |
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months | 2 | |||
Right to claim cash | 26 | 54 | 41 | |
Obligation to return cash | 18 | 74 | 14 | |
Not Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) | ||||
Right to claim cash | 9 | 21 | ||
Obligation to receive cash irrespective of position | 7 | 4 | 11 | |
Obligation to return cash | 18 | 74 | ||
Designated as Hedging Instrument | ||||
Derivative Instruments, Gain (Loss) | ||||
Right to claim cash | 19 | 50 | 30 | |
Cash Flow Hedges | ||||
Derivative Instruments, Gain (Loss) | ||||
Stockholders' equity | $ 2 | $ 1 | $ (3) | $ 0 |
Derivative Financial Instrume79
Derivative Financial Instruments (Schedule of Changes in Fair Value) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Other liabilities | ||
Liabilities | ||
Notional Amount | $ 4,237 | $ 3,754 |
Fair Value | 10 | 54 |
Designated as Hedging Instrument | Interest rate swaps on FHLB advances | ||
Assets | ||
Fair Value | 1 | 20 |
Liabilities | ||
Fair Value | 1 | |
Designated as Hedging Instrument | Interest rate swaps on FHLB advances | Other assets | ||
Assets | ||
Notional Amount | 600 | |
Fair Value | 20 | |
Designated as Hedging Instrument | Interest rate swaps on FHLB advances | Other liabilities | ||
Assets | ||
Notional Amount | 830 | |
Fair Value | 1 | |
Liabilities | ||
Notional Amount | 230 | |
Fair Value | 1 | |
Not Designated as Hedging Instrument | ||
Assets | ||
Fair Value | 15 | 80 |
Liabilities | ||
Fair Value | 10 | 48 |
Not Designated as Hedging Instrument | Other assets | ||
Assets | ||
Notional Amount | 9,313 | 14,145 |
Fair Value | 39 | 104 |
Not Designated as Hedging Instrument | Futures | ||
Assets | ||
Fair Value | 2 | |
Liabilities | ||
Fair Value | 0 | 0 |
Not Designated as Hedging Instrument | Futures | Other assets | ||
Assets | ||
Notional Amount | 1,597 | 4,621 |
Fair Value | 0 | 2 |
Not Designated as Hedging Instrument | Futures | Other liabilities | ||
Liabilities | ||
Notional Amount | 209 | 134 |
Fair Value | 0 | 0 |
Not Designated as Hedging Instrument | Mortgage-backed securities forwards | ||
Assets | ||
Fair Value | 4 | 43 |
Liabilities | ||
Fair Value | 6 | 11 |
Not Designated as Hedging Instrument | Mortgage-backed securities forwards | Other assets | ||
Assets | ||
Notional Amount | 2,646 | 3,776 |
Fair Value | 4 | 43 |
Not Designated as Hedging Instrument | Mortgage-backed securities forwards | Other liabilities | ||
Liabilities | ||
Notional Amount | 3,197 | 1,893 |
Fair Value | 6 | 11 |
Not Designated as Hedging Instrument | Rate lock commitments | Other assets | ||
Assets | ||
Notional Amount | 3,629 | 3,517 |
Fair Value | 24 | 24 |
Not Designated as Hedging Instrument | Rate lock commitments | Other liabilities | ||
Liabilities | ||
Notional Amount | 214 | 598 |
Fair Value | 0 | 6 |
Not Designated as Hedging Instrument | Interest rate swaps and swaptions | ||
Assets | ||
Fair Value | 11 | 35 |
Not Designated as Hedging Instrument | Interest rate swaps and swaptions | Other assets | ||
Assets | ||
Notional Amount | 1,441 | 2,231 |
Fair Value | 11 | 35 |
Not Designated as Hedging Instrument | Interest rate swaps | ||
Liabilities | ||
Fair Value | 4 | 37 |
Not Designated as Hedging Instrument | Interest rate swaps | Other liabilities | ||
Liabilities | ||
Notional Amount | 617 | 1,129 |
Fair Value | $ 4 | $ 37 |
Derivative Financial Instrume80
Derivative Financial Instruments (Master Netting Schedule) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | |||
Derivative, Collateral, Obligation to Return Cash | $ 18 | $ 74 | $ 14 |
Liabilities | |||
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 26 | 54 | 41 |
Central Counterparty Clearing House | |||
Liabilities | |||
Collateral Already Posted, Aggregate Fair Value | 15 | ||
Designated as Hedging Instrument | |||
Liabilities | |||
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 19 | 50 | $ 30 |
Designated as Hedging Instrument | Interest rate swaps on FHLB advances | |||
Assets | |||
Gross Amount | 1 | 20 | |
Gross Amounts Offset 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 Position, Financial Instruments | 0 | 0 | |
Derivative, Collateral, Obligation to Return Cash | 0 | ||
Liabilities | |||
Gross Amount | 1 | ||
Gross Amounts Offset 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 Position, Financial Instruments | 0 | ||
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 17 | 33 | |
Not Designated as Hedging Instrument | |||
Assets | |||
Gross Amount | 15 | 80 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 15 | 80 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Derivative, Collateral, Obligation to Return Cash | 18 | 74 | |
Liabilities | |||
Gross Amount | 10 | 48 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 10 | 48 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 9 | 21 | |
Not Designated as Hedging Instrument | Futures | |||
Assets | |||
Gross Amount | 2 | ||
Gross Amounts Offset 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 Position, Financial Instruments | 0 | ||
Derivative, Collateral, Obligation to Return Cash | 0 | ||
Liabilities | |||
Gross Amount | 0 | 0 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 0 | 0 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 2 | 1 | |
Not Designated as Hedging Instrument | Mortgage-backed securities forwards | |||
Assets | |||
Gross Amount | 4 | 43 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 4 | 43 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Derivative, Collateral, Obligation to Return Cash | 8 | 44 | |
Liabilities | |||
Gross Amount | 6 | 11 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 6 | 11 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 2 | 0 | |
Not Designated as Hedging Instrument | Interest rate swaps | |||
Liabilities | |||
Gross Amount | 4 | 37 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 4 | 37 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Gross Amounts Not Offset in the Statement of Financial Position, Cash Collateral | 5 | 20 | |
Not Designated as Hedging Instrument | Interest rate swaps and swaptions | |||
Assets | |||
Gross Amount | 11 | 35 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 | |
Net Amount Presented in the Statement of Financial Position | 11 | 35 | |
Gross Amounts Not Offset in the Statement of Financial Position, Financial Instruments | 0 | 0 | |
Derivative, Collateral, Obligation to Return Cash | $ 10 | $ 30 |
Derivative Financial Instrume81
Derivative Financial Instruments (Schedule of Unrealized Gains or Losses) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | $ (40) | $ 28 | $ 14 |
Futures | Net (loss) return on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | (1) | 0 | 6 |
Interest rate swaps | Net (loss) return on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | (11) | (5) | (2) |
Interest rate swaps | Other noninterest income | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | 2 | 4 | 2 |
Mortgage-backed securities forwards | Net (loss) return on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | 4 | 5 | 1 |
Rate lock commitments and forward agency and loan sales | Net gain on loan sales | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | (34) | 26 | 9 |
Forward commitments | Other noninterest income | |||
Derivative Instruments, Gain (Loss) | |||
Net gain (loss) recognized in income on derivative instruments | $ 0 | $ (2) | $ (2) |
Deposit Accounts (Details)
Deposit Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deposits | ||
Total deposits | $ 8,934 | $ 8,800 |
Branch retail deposits | ||
Deposits | ||
Demand deposit accounts | 931 | 852 |
Savings accounts | 3,482 | 3,824 |
Money market demand accounts | 124 | 138 |
Certificates of deposit/CDARS | 1,491 | 1,055 |
Total deposits | 6,028 | 5,869 |
Commercial deposits | ||
Deposits | ||
Demand deposit accounts | 288 | 282 |
Savings accounts | 71 | 63 |
Money market demand accounts | 69 | 109 |
Certificates of deposit/CDARS | 2 | 1 |
Total deposits | 430 | 455 |
Retail deposits | ||
Deposits | ||
Total deposits | 6,458 | 6,324 |
Government deposits | ||
Deposits | ||
Demand deposit accounts | 251 | 250 |
Savings accounts | 446 | 451 |
Certificates of deposit/CDARS | 376 | 329 |
Total deposits | 1,073 | 1,030 |
Wholesale deposits | ||
Deposits | ||
Total deposits | 45 | 0 |
Company controlled deposits | ||
Deposits | ||
Total deposits | $ 1,358 | $ 1,446 |
Deposit Accounts (Contractual M
Deposit Accounts (Contractual Maturities of Time Deposits over $250,000) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Contractual Maturities, Certificates of Deposit, $100,000 or More | ||
Three months or less | $ 159 | $ 126 |
Over three months to six months | 128 | 116 |
Over six months to twelve months | 173 | 146 |
One to two years | 167 | 34 |
Thereafter | 31 | 27 |
Total | $ 658 | $ 449 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2017 | |
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
FHLB, current | $ 1,780 | $ 4,260 |
FHLB, non-current | 1,200 | 1,405 |
Total | 2,980 | 5,665 |
Federal Home Loan Bank Advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
Payment for FHLB advances | 250 | |
Long-term fixed rate advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
FHLB, non-current | 50 | 125 |
Short-term fixed rate term advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
FHLB, current | $ 1,780 | $ 4,260 |
FHLB (interest rate) | 0.62% | 1.40% |
Long-term fixed rate advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
FHLB (interest rate) | 1.12% | 1.76% |
FHLB, non-current | $ 1,025 | $ 1,130 |
Long-term fixed rate advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
FHLB (interest rate) | 1.12% | 1.41% |
FHLB, non-current | $ 175 | $ 275 |
Borrowings (Other Disclosures)
Borrowings (Other Disclosures) (Details) - USD ($) | Jul. 11, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank, Advances | |||
FHLB advances, maximum amount available | $ 7,000,000,000 | ||
FHLB advances, available collateral amount | 5,700,000,000 | ||
FHLB advances, line of credit | 763,000,000 | ||
FHLB, non-current | 1,405,000,000 | $ 1,200,000,000 | |
Derivative cash received | 830,000,000 | ||
Payment of interest on trust preferred securities | 0 | ||
Senior Notes | Senior notes, matures 2021 | |||
Federal Home Loan Bank, Advances | |||
Debt instrument face amount | $ 250,000,000 | ||
Redemption price percentage | 100.00% | ||
Long-term fixed rate advances | |||
Federal Home Loan Bank, Advances | |||
FHLB, non-current | $ 1,130,000,000 | $ 1,025,000,000 | |
Three Month LIBOR | |||
Federal Home Loan Bank, Advances | |||
Debt instrument, variable interest rate term (in months) | 3 months | ||
FHLB Advances, Interest Rate Reset Period (in months) | 3 months | ||
FHLB Advances, Prepayment Notification Period (in months) | 3 months | ||
FHLB Advances, Initial Lockout Period (in months) | 12 months | ||
Treasury rate | Senior Notes | Senior notes, matures 2021 | |||
Federal Home Loan Bank, Advances | |||
Variable rate on spread | 0.50% |
Borrowings (Schedule of FHLB Ad
Borrowings (Schedule of FHLB Advances, Disclosures) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Federal Home Loan Bank, Advances, Activity for Year | |||
Maximum outstanding at any month end | $ 5,665 | $ 3,557 | $ 3,541 |
Average outstanding balance | 4,590 | 2,833 | 1,811 |
Average remaining borrowing capacity | $ 1,195 | $ 1,137 | $ 1,611 |
Weighted average interest rate (percent) | 1.30% | 1.16% | 1.00% |
Borrowings (Schedule of FHLB, A
Borrowings (Schedule of FHLB, Advances, Maturity Summary) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Federal Home Loan Bank, Advances by Interest Rate Type, by Maturity | ||
2,018 | $ 4,385 | |
2,019 | 50 | |
2,020 | 0 | |
2,021 | 0 | |
Thereafter | 1,230 | |
Total | $ 5,665 | $ 2,980 |
Borrowings (Senior Notes and Tr
Borrowings (Senior Notes and Trust Preferred Securities) (Details) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument | |||
Junior Subordinated Notes | $ 247 | $ 247 | |
Long-term Debt | 494 | 493 | |
Senior notes, matures 2021 | |||
Debt Instrument | |||
Senior Notes | $ 247 | $ 246 | |
Interest Rate (percent) | 6.125% | 6.125% | |
Plus 3.25%, matures 2032 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 26 | $ 26 | |
Interest Rate (percent) | 4.92% | 4.25% | |
Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 26 | $ 26 | |
Interest Rate (percent) | 4.61% | 4.13% | |
Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 26 | $ 26 | |
Interest Rate (percent) | 4.94% | 4.25% | |
Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 26 | $ 26 | |
Interest Rate (percent) | 3.36% | 2.88% | |
Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 26 | $ 26 | |
Interest Rate (percent) | 3.36% | 2.88% | |
Plus 1.75%, matures 2035 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 51 | $ 51 | |
Interest Rate (percent) | 3.34% | 2.71% | |
Plus 1.50%, matures 2035 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 25 | $ 25 | |
Interest Rate (percent) | 2.86% | 2.38% | |
Plus 1.45%, matures 2037 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 25 | $ 25 | |
Interest Rate (percent) | 3.04% | 2.41% | |
Plus 2.50%, matures 2037 | |||
Debt Instrument | |||
Junior Subordinated Notes | $ 16 | $ 16 | |
Interest Rate (percent) | 4.09% | 3.46% | |
LIBOR | Plus 3.25%, matures 2032 | |||
Debt Instrument | |||
Basis spread on variable rate | 3.25% | ||
LIBOR | Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Basis spread on variable rate | 3.25% | ||
LIBOR | Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Basis spread on variable rate | 3.25% | ||
LIBOR | Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Basis spread on variable rate | 2.00% | ||
LIBOR | Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Basis spread on variable rate | 2.00% | ||
LIBOR | Plus 1.75%, matures 2035 | |||
Debt Instrument | |||
Basis spread on variable rate | 1.75% | ||
LIBOR | Plus 1.50%, matures 2035 | |||
Debt Instrument | |||
Basis spread on variable rate | 1.50% | ||
LIBOR | Plus 1.45%, matures 2037 | |||
Debt Instrument | |||
Basis spread on variable rate | 1.45% | ||
LIBOR | Plus 2.50%, matures 2037 | |||
Debt Instrument | |||
Basis spread on variable rate | 2.50% |
Representation and Warranty R89
Representation and Warranty Reserve (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Representation and Warranty Reserve | |||
Balance, beginning of period | $ 27 | $ 40 | $ 53 |
Gain on sale reduction for representation and warranty liability | 4 | 5 | 7 |
Provision, charged to representation and warranty (benefit) provision | (13) | (19) | (19) |
Total | (9) | (14) | (12) |
(Charge-offs) recoveries, net | (3) | 1 | (1) |
Balance, end of period | $ 15 | $ 27 | $ 40 |
Warrants (May Investors) (Detai
Warrants (May Investors) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 30, 2009 | |
Preferred Stock | |||
Class of Warrant or Right [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 266,657 | ||
May Investors | |||
Class of Warrant or Right [Line Items] | |||
Warrants exercised to purchase Common Stock (shares) | 237,627 | ||
Warrants outstanding (shares) | 0 | ||
Warrant liabilities | $ 0 | $ 4,000,000 | |
May Investors | Common Stock | |||
Class of Warrant or Right [Line Items] | |||
Common Stock issued (shares) | 154,313 | ||
TARP | |||
Class of Warrant or Right [Line Items] | |||
Warrants to purchase Common Stock issued (shares) | 645,138 | ||
Exercise price of warrants (in usd per share) | $ 62 |
Accumulated Other Comprehensi91
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | $ 1,336 | $ 1,529 | $ 1,373 |
Other comprehensive income/(loss), net of tax | (9) | (9) | (6) |
Ending balance | 1,399 | 1,336 | 1,529 |
Investment Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | (8) | 5 | 8 |
Unrealized gain (loss) | (19) | (10) | (7) |
Less: Tax (benefit) provision | (7) | (3) | (2) |
Net unrealized gain (loss) | (12) | (7) | (5) |
Reclassifications out of AOCI | 3 | (9) | 3 |
Less: Tax (benefit) provision | 1 | (3) | 1 |
Net unrealized gain (loss) reclassified out of AOCI | 2 | (6) | 2 |
Other comprehensive income/(loss), net of tax | (10) | (13) | (3) |
Ending balance | (18) | (8) | 5 |
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning Balance | 1 | (3) | 0 |
Unrealized gain (loss) | 5 | (13) | (6) |
Less: Tax (benefit) provision | 1 | (5) | (1) |
Net unrealized gain (loss) | 4 | (8) | (5) |
Reclassifications out of AOCI | (5) | 19 | 2 |
Less: Tax (benefit) provision | (2) | 7 | 0 |
Net unrealized gain (loss) reclassified out of AOCI | (3) | 12 | 2 |
Other comprehensive income/(loss), net of tax | 1 | 4 | (3) |
Ending balance | $ 2 | $ 1 | $ (3) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||||||
Net income | $ (45) | $ 40 | $ 41 | $ 27 | $ 28 | $ 57 | $ 47 | $ 39 | $ 33 | $ 47 | $ 46 | $ 32 | $ 63 | $ 171 | $ 158 |
Deferred cumulative preferred stock dividends | 0 | (18) | (30) | ||||||||||||
Net income applicable to common stockholders | $ 63 | $ 153 | $ 128 | ||||||||||||
Weighted Average Shares | |||||||||||||||
Weighted average common shares outstanding (in shares) | 57,093,868 | 56,569,307 | 56,426,977 | ||||||||||||
Effect of dilutive securities | |||||||||||||||
May Investor Warrants (in shares) | 12,287 | 138,314 | 305,484 | ||||||||||||
Stock-based Awards (in shares) | 1,072,188 | 890,046 | 432,062 | ||||||||||||
Weighted average diluted common shares (in shares) | 58,178,343 | 57,597,667 | 57,164,523 | ||||||||||||
Earnings per common share | |||||||||||||||
Basic income (loss) per share (in usd per share) | $ (0.79) | $ 0.71 | $ 0.72 | $ 0.47 | $ 0.50 | $ 0.98 | $ 0.67 | $ 0.56 | $ 0.45 | $ 0.70 | $ 0.69 | $ 0.43 | $ 1.11 | $ 2.71 | $ 2.27 |
Effect of dilutive securities | |||||||||||||||
Effect of dilutive securities - May Investor Warrants (in usd per share) | 0 | (0.01) | (0.01) | ||||||||||||
Effect of dilutive securities - Stock-based awards (in usd per share) | (0.02) | (0.04) | (0.02) | ||||||||||||
Diluted earnings per common share (in usd per share) | $ (0.79) | $ 0.70 | $ 0.71 | $ 0.46 | $ 0.49 | $ 0.96 | $ 0.66 | $ 0.54 | $ 0.44 | $ 0.69 | $ 0.68 | $ 0.43 | $ 1.09 | $ 2.66 | $ 2.24 |
Earnings Per Share (Narratives)
Earnings Per Share (Narratives) (Details) $ in Millions | Jul. 29, 2016USD ($) |
Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | |
Preferred stock, redemption amount | $ 267 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narratives) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jul. 01, 2017 | |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 7 | $ 3 | $ 2 | |
Unrecognized stock based compensation expense | $ 12 | |||
Period to be recognized | 2 years 5 months 30 days | |||
2006 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 11 | 11 | 3 | |
2006 Plan | Non-qualified stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term (years) | 5 years | |||
2006 Plan | Stock appreciation rights (SAR) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term (years) | 7 years | |||
2006 Plan | Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options available for future grants (shares) | 2,132,452 | |||
2017 ESPP | Employee stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized | 800,000 | |||
Number of shares issued | 48,032 | |||
Other incentive plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 33 | $ 33 | $ 30 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock Options, Activity) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Options, Outstanding | |||
Options outstanding, beginning of year (shares) | 45,791 | 53,284 | 63,598 |
Options canceled, forfeited and expired (shares) | (5,073) | (7,493) | (10,314) |
Options outstanding, end of year (shares) | 40,718 | 45,791 | 53,284 |
Options vested and expected to vest, end of year (shares) | 40,718 | 45,791 | 53,284 |
Options exercisable, end of year (shares) | 20,286 | 23,576 | 27,197 |
Stock Options, Outstanding, Weighted Average Exercise Price | |||
Options outstanding, beginning of year (in usd per share) | $ 80 | $ 80 | $ 94.33 |
Options canceled, forfeited and expired (in usd per share) | 80 | 80 | 168.34 |
Options outstanding, end of year (in usd per share) | 80 | 80 | 80 |
Options vested and expected to vest, end of year (in usd per share) | 80 | 80 | 80 |
Options exercisable, end of year (in usd per share) | $ 80 | $ 80 | $ 80 |
Stock Options, Additional Disclosures | |||
Weighted average contractual term | 2 years 1 month 6 days | ||
Total intrinsic value of options exercised | $ 0 | $ 0 | $ 0 |
Intrinsic value of options outstanding | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock Units) (Details) - Restricted stock units - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares | |||
Non-vested balance at beginning of period (shares) | 1,461,910 | 1,299,985 | 233,691 |
Granted (shares) | 357,058 | 310,209 | 1,325,134 |
Vested (shares) | (385,454) | (134,767) | (152,220) |
Canceled and forfeited (shares) | (143,064) | (13,517) | (106,620) |
Non-vested balance at end of period (shares) | 1,290,450 | 1,461,910 | 1,299,985 |
Weighted — Average Grant-Date Fair Value per Share | |||
Non-vested balance at beginning of period (in usd per share) | $ 17.68 | $ 16.36 | $ 17.21 |
Granted (in usd per share) | 28.06 | 22.97 | 16.11 |
Vested (in usd per share) | 17.36 | 15.78 | 15.25 |
Canceled and forfeited (in usd per share) | 18.89 | 17.24 | 18.46 |
Non-vested balance at end of period (in usd per share) | $ 20.52 | $ 17.68 | $ 16.36 |
Income Taxes (Components of Inc
Income Taxes (Components of Income Tax Provision) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current | |||||||||||||||
Federal | $ 2 | $ 4 | $ 2 | ||||||||||||
Total current income tax expense | 2 | 4 | 2 | ||||||||||||
Deferred | |||||||||||||||
Federal | 66 | 84 | 82 | ||||||||||||
Federal impact of tax reform | 80 | 0 | 0 | ||||||||||||
State | 0 | (1) | (2) | ||||||||||||
Total deferred income tax expense (benefit) | 146 | 83 | 80 | ||||||||||||
Total income tax expense/provision (benefit) | $ 96 | $ 20 | $ 19 | $ 13 | $ 14 | $ 30 | $ 22 | $ 21 | $ 12 | $ 24 | $ 28 | $ 18 | 148 | 87 | 82 |
Federal | |||||||||||||||
Deferred | |||||||||||||||
Total income tax expense/provision (benefit) | $ 148 | $ 87 | $ 82 |
Income Taxes (Reconciliation to
Income Taxes (Reconciliation to Effective Income Tax) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount | |||||||||||||||
Statutory federal income tax rate | 35.00% | 35.00% | 35.00% | ||||||||||||
Total income tax expense/provision (benefit) | $ 96 | $ 20 | $ 19 | $ 13 | $ 14 | $ 30 | $ 22 | $ 21 | $ 12 | $ 24 | $ 28 | $ 18 | $ 148 | $ 87 | $ 82 |
Effective income tax rate (percent) | 70.10% | 33.70% | 34.20% | ||||||||||||
Federal | |||||||||||||||
Effective Income Tax Rate Reconciliation, Amount | |||||||||||||||
Provision at statutory federal income tax rate (35%) | $ 74 | $ 90 | $ 84 | ||||||||||||
Tax Reform | 80 | 0 | 0 | ||||||||||||
Bank Owned Life Insurance | (3) | (3) | (1) | ||||||||||||
Restricted stock compensation | (2) | 0 | 0 | ||||||||||||
State income tax (benefit), net of federal income tax effect (includes valuation allowance) | 0 | (1) | (2) | ||||||||||||
Warrant expense (income) | 0 | 1 | 1 | ||||||||||||
Non-deductible compensation | 0 | 0 | 1 | ||||||||||||
Other | (1) | 0 | (1) | ||||||||||||
Total income tax expense/provision (benefit) | $ 148 | $ 87 | $ 82 |
Income Taxes (Net Deferred Asse
Income Taxes (Net Deferred Assets) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax liabilities | ||
Net deferred tax asset | $ 136 | $ 286 |
Federal | ||
Deferred tax assets | ||
Net operating loss carryforwards (Federal and State) | 110 | 195 |
Allowance for loan losses | 43 | 74 |
Litigation settlement | 14 | 22 |
Alternative Minimum Tax credit carry forwards | 0 | 18 |
Representation and warranty reserves | 3 | 10 |
Accrued compensation | 10 | 15 |
Contingent Consideration | 6 | 0 |
Loan deferred fees and costs | 2 | 3 |
Non-accrual interest revenue | 1 | 2 |
Deferred interest | 1 | 2 |
General business credits | 3 | 1 |
Other | 2 | 5 |
Total | 195 | 347 |
Valuation allowance | (20) | (20) |
Total (net) | 175 | 327 |
Deferred tax liabilities | ||
Premises and equipment | (14) | (12) |
Mortgage loan servicing rights | (3) | (11) |
Mark-to-market adjustments | (10) | (9) |
Commercial lease financing | (9) | (5) |
State and local taxes | (3) | (4) |
Total | (39) | (41) |
Net deferred tax asset | $ 136 | $ 286 |
Income Taxes (Narratives) (Deta
Income Taxes (Narratives) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards | |||
Federal impact of tax reform | $ 80 | $ 0 | $ 0 |
Temporary differences related to provision for loan losses not expected to reverse therefore not included in deferred tax assets | 4 | ||
Operating loss carryforwards, amount subject to annual use limitation | 120 | ||
Total state net operating loss carryforwards | 579 | ||
Income tax penalties and interest expense (less than) | 1 | 1 | $ 1 |
Federal | |||
Operating Loss Carryforwards | |||
Alternative Minimum Tax credit carry forwards | 0 | 18 | |
Operating loss carryforwards | 381 | 480 | |
Valuation allowance | 20 | $ 20 | |
Federal | Adjustment | |||
Operating Loss Carryforwards | |||
Alternative Minimum Tax credit carry forwards | $ (20) | ||
Federal | Minimum | |||
Operating Loss Carryforwards | |||
Operating loss carryforward expiration | Dec. 31, 2028 | ||
Federal | Maximum | |||
Operating Loss Carryforwards | |||
Operating loss carryforward expiration | Dec. 31, 2037 | ||
State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards, amount subject to annual use limitation | $ 14 | ||
Total state deferred tax asset | 33 | ||
Valuation allowance | $ 20 |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Tangible Capital | ||
Tangible capital (to tangible assets), actual amount | $ 1,442 | $ 1,256 |
Tangible capital (to tangible assets), actual ratio (percent) | 8.51% | 8.88% |
Tier 1 Capital | ||
Tier 1 capital, actual amount | $ 1,442 | $ 1,256 |
Tier 1 capital (to adjusted tangible assets), actual ratio (percent) | 8.51% | 8.88% |
Tier 1 capital, for capital adequacy purposes amount | $ 678 | $ 566 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio (percent) | 4.00% | 4.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 848 | $ 707 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (percent) | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,216 | $ 1,084 |
Common equity Tier 1 capital (to RWA), actual ratio (percent) | 11.50% | 13.06% |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Amount | $ 476 | $ 374 |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Ratio (percent) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 688 | $ 540 |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (percent) | 6.50% | 6.50% |
Tier One Risk Based Capital | ||
Tier 1 capital, actual amount | $ 1,442 | $ 1,256 |
Tier 1 capital (to risk weighted assets), actual ratio (percent) | 13.63% | 15.12% |
Tier 1 capital, for capital adequacy purposes amount | $ 635 | $ 498 |
Tier 1 capital (to risk weighted assets), for capital adequacy purposes ratio (percent) | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 846 | $ 664 |
Tier 1 capital (to risk weighted assets), capitalized under prompt corrective action provision ratio (percent) | 8.00% | 8.00% |
Capital | ||
Total capital, actual amount | $ 1,576 | $ 1,363 |
Total capital (to risk weighted assets), actual ratio (percent) | 14.90% | 16.41% |
Total capital, for capital adequacy purposes amount | $ 846 | $ 664 |
Total capital (to risk weighted assets), for capital adequacy purposes ratio (percent) | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,058 | $ 830 |
Total capital (to risk weighted assets), capitalized under prompt corrective action provisions ratio (percent) | 10.00% | 10.00% |
Bank | ||
Tangible Capital | ||
Tangible capital (to tangible assets), actual amount | $ 1,531 | $ 1,491 |
Tangible capital (to tangible assets), actual ratio (percent) | 9.04% | 10.52% |
Tier 1 Capital | ||
Tier 1 capital, actual amount | $ 1,531 | $ 1,491 |
Tier 1 capital (to adjusted tangible assets), actual ratio (percent) | 9.04% | 10.52% |
Tier 1 capital, for capital adequacy purposes amount | $ 677 | $ 567 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio (percent) | 4.00% | 4.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 847 | $ 709 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (percent) | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,531 | $ 1,491 |
Common equity Tier 1 capital (to RWA), actual ratio (percent) | 14.46% | 17.90% |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Amount | $ 476 | $ 375 |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Ratio (percent) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 688 | $ 542 |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (percent) | 6.50% | 6.50% |
Tier One Risk Based Capital | ||
Tier 1 capital, actual amount | $ 1,531 | $ 1,491 |
Tier 1 capital (to risk weighted assets), actual ratio (percent) | 14.46% | 17.90% |
Tier 1 capital, for capital adequacy purposes amount | $ 635 | $ 500 |
Tier 1 capital (to risk weighted assets), for capital adequacy purposes ratio (percent) | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 847 | $ 667 |
Tier 1 capital (to risk weighted assets), capitalized under prompt corrective action provision ratio (percent) | 8.00% | 8.00% |
Capital | ||
Total capital, actual amount | $ 1,664 | $ 1,598 |
Total capital (to risk weighted assets), actual ratio (percent) | 15.72% | 19.18% |
Total capital, for capital adequacy purposes amount | $ 847 | $ 667 |
Total capital (to risk weighted assets), for capital adequacy purposes ratio (percent) | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,059 | $ 833 |
Total capital (to risk weighted assets), capitalized under prompt corrective action provisions ratio (percent) | 10.00% | 10.00% |
Legal Proceedings, Contingen102
Legal Proceedings, Contingencies and Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (percent) | 5.00% | 5.00% |
Business acquisition threshold (percentage) | 33.30% | |
Accrued reserve for contingent liabilities | $ 1 | $ 3 |
Letter of credit, reserve amount | $ 3 | $ 3 |
Bank | ||
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (percent) | 5.00% | 5.00% |
DOJ Agreement | ||
Loss Contingency, Settlement | ||
Litigation settlement, initial payment | $ 15 | |
Litigation settlement payment amount | $ 118 | |
Discount rate (percent) | 9.70% | |
Litigation liability | $ 60 | $ 60 |
DOJ Agreement | Bank | ||
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (percent) | 11.00% | |
DOJ Agreement | Subsequent Payments | ||
Loss Contingency, Settlement | ||
Litigation expense | $ 25 |
Legal Proceedings, Contingen103
Legal Proceedings, Contingencies and Commitments (Commitments) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Mortgage loan interest-rate lock commitments | ||
Commitments | ||
Commitments to extend credit | $ 3,667 | $ 4,115 |
Warehouse loan commitments | ||
Commitments | ||
Commitments to extend credit | 1,618 | 1,670 |
Commercial and industrial commitments | ||
Commitments | ||
Commitments to extend credit | 695 | 424 |
Other commercial commitments | ||
Commitments | ||
Commitments to extend credit | 1,021 | 651 |
HELOC commitments | ||
Commitments | ||
Commitments to extend credit | 283 | 179 |
Other consumer commitments | ||
Commitments | ||
Commitments to extend credit | 15 | 57 |
Standby and commercial letters of credit | ||
Commitments | ||
Commitments to extend credit | $ 50 | $ 30 |
Fair Value Measurements (Assets
Fair Value Measurements (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | $ 1,853 | $ 1,480 |
Loans held-for-sale | 4,300 | 3,145 |
Loans held-for-investment | 12 | 72 |
Mortgage servicing rights | 291 | 335 |
Total assets at fair value | 4,312 | 3,217 |
Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 987 | 548 |
Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 794 | 898 |
Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 34 | 34 |
Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 38 | |
Total fair value | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1,853 | 1,480 |
Loans held-for-sale | 4,322 | 3,178 |
Loans held-for-investment | 7,667 | 5,998 |
Mortgage servicing rights | 291 | 335 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | (4) | |
Contingent consideration | (25) | |
Total fair value | Level 1 | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | 0 | |
Contingent consideration | 0 | |
Total fair value | Level 2 | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1,853 | 1,480 |
Loans held-for-sale | 4,322 | 3,178 |
Loans held-for-investment | 8 | 7 |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | (4) | |
Contingent consideration | 0 | |
Total fair value | Level 3 | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 7,659 | 5,991 |
Mortgage servicing rights | 291 | 335 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | 0 | |
Contingent consideration | (25) | |
Recurring | Level 1 | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 0 | 2 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | 0 | |
DOJ litigation settlement | 0 | 0 |
Long-term debt | 0 | 0 |
Recurring | Level 1 | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Interest rate swap on FHLB advances | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Futures | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 2 | |
Recurring | Level 1 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Recurring | Level 1 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 0 | |
Recurring | Level 1 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Home Equity | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 1 | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | |
Recurring | Level 2 | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 6,176 | 4,729 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | (4) | |
DOJ litigation settlement | 0 | 0 |
Long-term debt | (11) | (52) |
Recurring | Level 2 | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Interest rate swap on FHLB advances | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 19 | |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Level 2 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 4 | 43 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (6) | (11) |
Recurring | Level 2 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (4) | (37) |
Recurring | Level 2 | Futures | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 11 | 35 |
Recurring | Level 2 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 0 | |
Recurring | Level 2 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 4,300 | 3,145 |
Loans held-for-investment | 8 | 7 |
Recurring | Level 2 | Home Equity | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 0 | 0 |
Recurring | Level 2 | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 987 | 548 |
Recurring | Level 2 | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 794 | 898 |
Recurring | Level 2 | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 34 | 34 |
Recurring | Level 2 | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 38 | |
Recurring | Level 3 | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 291 | 335 |
Total assets at fair value | 319 | 424 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | 0 | |
DOJ litigation settlement | (60) | (60) |
Long-term debt | (85) | (66) |
Recurring | Level 3 | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 24 | 24 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (6) | |
Recurring | Level 3 | Interest rate swap on FHLB advances | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 3 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Interest rate swaps | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Futures | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | |
Recurring | Level 3 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Recurring | Level 3 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (25) | |
Recurring | Level 3 | Residential first mortgage loans | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Recurring | Level 3 | Home Equity | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 4 | 65 |
Recurring | Level 3 | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | |
Recurring | Total fair value | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 291 | 335 |
Total assets at fair value | 6,495 | 5,155 |
Liabilities, Fair Value Disclosure | ||
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Long-term debt | (96) | (118) |
Recurring | Total fair value | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 24 | 24 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (6) | |
Recurring | Total fair value | Interest rate swap on FHLB advances | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 19 | |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Total fair value | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 4 | 43 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (6) | (11) |
Recurring | Total fair value | Interest rate swaps | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (4) | (37) |
Recurring | Total fair value | Futures | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 2 | |
Recurring | Total fair value | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 11 | 35 |
Recurring | Total fair value | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (25) | |
Recurring | Total fair value | Residential first mortgage loans | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 4,300 | 3,145 |
Loans held-for-investment | 8 | 7 |
Recurring | Total fair value | Home Equity | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 4 | 65 |
Recurring | Total fair value | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 987 | 548 |
Recurring | Total fair value | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 794 | 898 |
Recurring | Total fair value | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 34 | $ 34 |
Recurring | Total fair value | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | $ 38 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narratives) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Level 3 | Weighted Average | Residential mortgage servicing rights capitalized | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Weighted-average life (in years) | 6 years | 6 years 7 months 6 days | |
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Transfers from Level 1 to Level 2 | $ 0 | $ 0 | $ 0 |
Fair Value Measurements (Fair V
Fair Value Measurements (Fair Value Measurements Using Significant Unobservable Inputs) (Details) - Recurring - Level 3 - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | $ 418 | $ 428 | $ 576 |
Total unrealized gains/(losses) recorded in earnings | 35 | (75) | 12 |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 |
Purchases / Originations | 555 | 553 | 537 |
Sales | (362) | (84) | (176) |
Settlement | (9) | (46) | (179) |
Transfers In (Out) | (318) | (358) | (342) |
Balance at End of Year | 319 | 418 | 428 |
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (60) | (84) | (166) |
Total unrealized gains/(losses) recorded in earnings | (1) | (2) | |
Total realized gains/(losses) recorded in earnings | 0 | (3) | |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | |
Purchases / Originations | (25) | 0 | |
Sales | 0 | 52 | |
Settlement | 1 | 35 | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | (85) | (60) | (84) |
Long-term debt | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | (84) | |
Total unrealized gains/(losses) recorded in earnings | 0 | ||
Total realized gains/(losses) recorded in earnings | (3) | ||
Total unrealized gains/(losses) recorded in OCI | 0 | ||
Purchases / Originations | 0 | ||
Sales | 52 | ||
Settlement | 35 | ||
Transfers In (Out) | 0 | ||
Balance at End of Year | 0 | ||
DOJ litigation settlement | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (60) | (84) | (82) |
Total unrealized gains/(losses) recorded in earnings | 0 | 24 | (2) |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 |
Purchases / Originations | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 |
Transfers In (Out) | 0 | 0 | 0 |
Balance at End of Year | (60) | (60) | (84) |
Contingent consideration | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | ||
Total unrealized gains/(losses) recorded in earnings | (1) | ||
Total realized gains/(losses) recorded in earnings | 0 | ||
Total unrealized gains/(losses) recorded in OCI | 0 | ||
Purchases / Originations | (25) | ||
Sales | 0 | ||
Settlement | 1 | ||
Transfers In (Out) | 0 | ||
Balance at End of Year | (25) | 0 | |
Home Equity | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 65 | 106 | 185 |
Total unrealized gains/(losses) recorded in earnings | 2 | 5 | (2) |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 |
Purchases / Originations | 0 | 0 | 0 |
Sales | 0 | 0 | 0 |
Settlement | (8) | (46) | (77) |
Transfers In (Out) | (55) | 0 | 0 |
Balance at End of Year | 4 | 65 | 106 |
Mortgage servicing rights | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 335 | 296 | 258 |
Total unrealized gains/(losses) recorded in earnings | (22) | (105) | (46) |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 |
Purchases / Originations | 288 | 228 | 260 |
Sales | (310) | (84) | (176) |
Settlement | 0 | 0 | 0 |
Transfers In (Out) | 0 | 0 | 0 |
Balance at End of Year | 291 | 335 | 296 |
Rate lock commitments (net) | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 18 | 26 | 31 |
Total unrealized gains/(losses) recorded in earnings | 54 | 25 | 60 |
Total realized gains/(losses) recorded in earnings | 0 | 0 | 0 |
Total unrealized gains/(losses) recorded in OCI | 0 | 0 | 0 |
Purchases / Originations | 267 | 325 | 277 |
Sales | 0 | 0 | 0 |
Settlement | 0 | 0 | 0 |
Transfers In (Out) | (315) | (358) | (342) |
Balance at End of Year | 24 | 18 | 26 |
Municipal obligation | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | 2 | |
Total unrealized gains/(losses) recorded in earnings | 0 | ||
Total realized gains/(losses) recorded in earnings | 0 | ||
Total unrealized gains/(losses) recorded in OCI | 0 | ||
Purchases / Originations | 0 | ||
Sales | 0 | ||
Settlement | (2) | ||
Transfers In (Out) | 0 | ||
Balance at End of Year | 0 | ||
Other investments | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | 100 | |
Settlement | (100) | ||
Balance at End of Year | $ 0 | ||
Loans held-for-sale | Home Equity | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | ||
Total unrealized gains/(losses) recorded in earnings | 1 | ||
Total realized gains/(losses) recorded in earnings | 0 | ||
Total unrealized gains/(losses) recorded in OCI | 0 | ||
Purchases / Originations | 0 | ||
Sales | (52) | ||
Settlement | (1) | ||
Transfers In (Out) | 52 | ||
Balance at End of Year | $ 0 | $ 0 |
Fair Value Measurements (Level
Fair Value Measurements (Level 3 Quantitative Information) (Details) - Recurring - Level 3 - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | $ 319 | $ 418 | $ 428 | $ 576 |
Fair value liabilities with unobservable inputs | (85) | (60) | (84) | (166) |
DOJ litigation settlement | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value liabilities with unobservable inputs | (60) | (60) | (84) | (82) |
Contingent consideration | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value liabilities with unobservable inputs | (25) | 0 | ||
Home Equity | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | 4 | 65 | 106 | 185 |
Mortgage servicing rights | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | 291 | 335 | 296 | 258 |
Rate lock commitments | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | 24 | 18 | $ 26 | $ 31 |
Discounted cash flows | DOJ litigation settlement | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value liabilities with unobservable inputs | $ (60) | $ (60) | ||
Discounted cash flows | DOJ litigation settlement | Minimum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 7.80% | 6.60% | ||
Discounted cash flows | DOJ litigation settlement | Maximum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 11.70% | 9.80% | ||
Discounted cash flows | DOJ litigation settlement | Weighted Average | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 9.70% | 8.20% | ||
Discounted cash flows | Contingent consideration | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value liabilities with unobservable inputs | $ (25) | |||
Discounted cash flows | Contingent consideration | Minimum | ||||
Fair Value Inputs | ||||
Fair Value Input, Beta | 0.60% | |||
Fair Value Inputs, Equity volatility | 26.60% | |||
Discounted cash flows | Contingent consideration | Maximum | ||||
Fair Value Inputs | ||||
Fair Value Input, Beta | 1.60% | |||
Fair Value Inputs, Equity volatility | 58.90% | |||
Discounted cash flows | Contingent consideration | Weighted Average | ||||
Fair Value Inputs | ||||
Fair Value Input, Beta | 1.10% | |||
Fair Value Inputs, Equity volatility | 40.00% | |||
Discounted cash flows | Home Equity | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | $ 4 | $ 65 | ||
Discounted cash flows | Home Equity | Minimum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 7.20% | 6.00% | ||
Constant prepayment rate (percent) | 5.10% | 16.30% | ||
CDR rate (percent) | 3.00% | 2.70% | ||
Discounted cash flows | Home Equity | Maximum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 10.80% | 12.20% | ||
Constant prepayment rate (percent) | 7.70% | 24.40% | ||
CDR rate (percent) | 4.50% | 4.10% | ||
Discounted cash flows | Home Equity | Weighted Average | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 9.00% | 9.30% | ||
Constant prepayment rate (percent) | 6.40% | 20.30% | ||
CDR rate (percent) | 3.60% | 3.70% | ||
Discounted cash flows | Mortgage servicing rights | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | $ 291 | $ 335 | ||
Discounted cash flows | Mortgage servicing rights | Minimum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 5.00% | 6.20% | ||
Constant prepayment rate (percent) | 8.00% | 13.90% | ||
Weighted average cost to service per loan | $ 58 | $ 55 | ||
Discounted cash flows | Mortgage servicing rights | Maximum | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 7.50% | 9.30% | ||
Constant prepayment rate (percent) | 11.80% | 19.20% | ||
Weighted average cost to service per loan | $ 87 | $ 82 | ||
Discounted cash flows | Mortgage servicing rights | Weighted Average | ||||
Fair Value Inputs | ||||
Discount rate (percent) | 6.30% | 7.80% | ||
Constant prepayment rate (percent) | 9.90% | 16.70% | ||
Weighted average cost to service per loan | $ 73 | $ 68 | ||
Discounted cash flows | Rate lock commitments | Minimum | ||||
Fair Value Inputs | ||||
Fair Value Inputs Asset Growth Rate | 5.60% | 4.20% | ||
Discounted cash flows | Rate lock commitments | Maximum | ||||
Fair Value Inputs | ||||
Fair Value Inputs Asset Growth Rate | 17.40% | 11.60% | ||
Discounted cash flows | Rate lock commitments | Weighted Average | ||||
Fair Value Inputs | ||||
Fair Value Inputs Asset Growth Rate | 6.30% | 7.90% | ||
Consensus pricing | Rate lock commitments | ||||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||||
Fair value assets with unobservable inputs | $ 24 | $ 18 | ||
Consensus pricing | Rate lock commitments | Minimum | ||||
Fair Value Inputs | ||||
Original pull-through rate | 64.70% | 66.90% | ||
Consensus pricing | Rate lock commitments | Maximum | ||||
Fair Value Inputs | ||||
Original pull-through rate | 97.10% | 100.00% | ||
Consensus pricing | Rate lock commitments | Weighted Average | ||||
Fair Value Inputs | ||||
Original pull-through rate | 82.00% | 83.60% |
Fair Value Measurements (Ass108
Fair Value Measurements (Assets Measured at Fair Value on a Non-recurring Basis) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Loans held-for-sale | $ 4,300 | $ 3,145 | $ 4,300 | $ 3,145 | |||||||||||
Total assets at fair value | 4,312 | 3,217 | 4,312 | 3,217 | |||||||||||
Net gain (loss) on sales of repossessed assets | 79 | $ 75 | $ 66 | $ 48 | 57 | $ 94 | $ 90 | $ 75 | $ 46 | $ 68 | $ 83 | $ 91 | 268 | 316 | $ 288 |
Nonrecurring | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Repossessed assets | 8 | 14 | 8 | 14 | |||||||||||
Total assets at fair value | 35 | 48 | 35 | 48 | |||||||||||
Fair value gains (losses) on repossessed assets | 0 | (2) | |||||||||||||
Net gain (loss) on sales of repossessed assets | (11) | (32) | |||||||||||||
Nonrecurring | Level 2 | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Repossessed assets | 0 | 0 | 0 | 0 | |||||||||||
Total assets at fair value | 6 | 9 | 6 | 9 | |||||||||||
Nonrecurring | Level 3 | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Repossessed assets | 8 | 14 | 8 | 14 | |||||||||||
Total assets at fair value | 29 | 39 | 29 | 39 | |||||||||||
Nonrecurring | Residential first mortgage loans | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Loans held-for-sale | 6 | 9 | 6 | 9 | |||||||||||
Impaired loans held-for-investment | 21 | 25 | 21 | 25 | |||||||||||
Nonrecurring | Residential first mortgage loans | Interest Income | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Fair value gains (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 | |||||||||||||||
Fair value gains (losses) on loans | (10) | (28) | |||||||||||||
Nonrecurring | Residential first mortgage loans | Level 2 | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Loans held-for-sale | 6 | 9 | 6 | 9 | |||||||||||
Impaired loans held-for-investment | 0 | 0 | 0 | 0 | |||||||||||
Nonrecurring | Residential first mortgage loans | Level 3 | |||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | |||||||||||
Impaired loans held-for-investment | $ 21 | $ 25 | $ 21 | $ 25 |
Fair Value Measurements (Ass109
Fair Value Measurements (Assets Measured on a Nonrecurring Basis, Level 3 Quantitative Information) (Details) - Nonrecurring - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed assets | $ 8 | $ 14 |
Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Impaired loans held-for-investment | 21 | 25 |
Level 3 | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed assets | 8 | 14 |
Level 3 | Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Impaired loans held-for-investment | 21 | 25 |
Level 3 | Fair value of underlying collateral | Residential first mortgage loans | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Impaired loans held-for-investment | $ 21 | $ 25 |
Level 3 | Fair value of underlying collateral | Residential first mortgage loans | Low Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 25.00% | 22.00% |
Level 3 | Fair value of underlying collateral | Residential first mortgage loans | High Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 30.00% | 40.00% |
Level 3 | Fair value of underlying collateral | Residential first mortgage loans | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 27.90% | 29.50% |
Level 3 | Fair value of underlying collateral | Foreclosed Assets | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed assets | $ 8 | $ 14 |
Level 3 | Fair value of underlying collateral | Foreclosed Assets | Low Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 0.00% | 22.00% |
Level 3 | Fair value of underlying collateral | Foreclosed Assets | High Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 100.00% | 100.00% |
Level 3 | Fair value of underlying collateral | Foreclosed Assets | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loss severity discount (percent) | 70.90% | 69.50% |
Fair Value Measurements (Fai110
Fair Value Measurements (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Investment securities available-for-sale | $ 1,853 | $ 1,480 |
Investment securities held-to-maturity | 924 | 1,084 |
Loans held-for-sale | 4,300 | 3,145 |
Loans held-for-investment | 12 | 72 |
Mortgage servicing rights | 291 | 335 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 204 | 158 |
Investment securities available-for-sale | 1,853 | 1,480 |
Investment securities held-to-maturity | 939 | 1,093 |
Loans held-for-sale | 4,321 | 3,177 |
Loans held-for-investment | 7,713 | 6,065 |
Loans with government guarantees | 271 | 365 |
Mortgage servicing rights | 291 | 335 |
Federal Home Loan Bank stock | 303 | 180 |
Bank owned life insurance | 330 | 271 |
Repossessed assets | 8 | 14 |
Other assets, foreclosure claims | 84 | 135 |
Derivative financial instruments, assets | 39 | 123 |
Liabilities | ||
Federal Home Loan Bank advances | (5,665) | (2,980) |
Long-term debt | (494) | (493) |
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (25) | |
Derivative financial instruments, liabilities | (11) | (54) |
Carrying Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (4,965) | (5,268) |
Carrying Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,493) | (1,056) |
Carrying Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (45) | |
Carrying Value | Government deposits | ||
Liabilities | ||
Deposits | (1,073) | (1,030) |
Carrying Value | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,358) | (1,446) |
Total fair value | ||
Assets | ||
Cash and cash equivalents | 204 | 158 |
Investment securities available-for-sale | 1,853 | 1,480 |
Investment securities held-to-maturity | 924 | 1,084 |
Loans held-for-sale | 4,322 | 3,178 |
Loans held-for-investment | 7,667 | 5,998 |
Loans with government guarantees | 261 | 354 |
Mortgage servicing rights | 291 | 335 |
Federal Home Loan Bank stock | 303 | 180 |
Bank owned life insurance | 330 | 271 |
Repossessed assets | 8 | 14 |
Other assets, foreclosure claims | 84 | 135 |
Derivative financial instruments, assets | 39 | 123 |
Liabilities | ||
Federal Home Loan Bank advances | (5,662) | (2,964) |
Long-term debt | (417) | (277) |
Warrant liabilities | (4) | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (25) | |
Derivative financial instruments, liabilities | (11) | (54) |
Total fair value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (4,557) | (4,956) |
Total fair value | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,498) | (1,062) |
Total fair value | Wholesale deposits | ||
Liabilities | ||
Deposits | (43) | |
Total fair value | Government deposits | ||
Liabilities | ||
Deposits | (1,048) | (1,011) |
Total fair value | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,311) | (1,371) |
Total fair value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 204 | 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 | 0 | (11) |
Total fair value | Level 1 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 1 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 1 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | |
Total fair value | Level 1 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 1 | Company controlled deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 1,853 | 1,480 |
Investment securities held-to-maturity | 924 | 1,084 |
Loans held-for-sale | 4,322 | 3,178 |
Loans held-for-investment | 8 | 7 |
Loans with government guarantees | 261 | 354 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 303 | 180 |
Bank owned life insurance | 330 | 271 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 84 | 135 |
Derivative financial instruments, assets | 15 | 54 |
Liabilities | ||
Federal Home Loan Bank advances | (5,662) | (2,964) |
Long-term debt | (417) | (277) |
Warrant liabilities | (4) | |
DOJ litigation settlement | 0 | 0 |
Contingent consideration | 0 | |
Derivative financial instruments, liabilities | (11) | (37) |
Total fair value | Level 2 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (4,557) | (4,956) |
Total fair value | Level 2 | Certificates of deposit | ||
Liabilities | ||
Deposits | (1,498) | (1,062) |
Total fair value | Level 2 | Wholesale deposits | ||
Liabilities | ||
Deposits | (43) | |
Total fair value | Level 2 | Government deposits | ||
Liabilities | ||
Deposits | (1,048) | (1,011) |
Total fair value | Level 2 | Company controlled deposits | ||
Liabilities | ||
Deposits | (1,311) | (1,371) |
Total 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 | 7,659 | 5,991 |
Loans with government guarantees | 0 | 0 |
Mortgage servicing rights | 291 | 335 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 8 | 14 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments, assets | 24 | 24 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
Warrant liabilities | 0 | |
DOJ litigation settlement | (60) | (60) |
Contingent consideration | (25) | |
Derivative financial instruments, liabilities | 0 | (6) |
Total fair value | Level 3 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 3 | Certificates of deposit | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 3 | Wholesale deposits | ||
Liabilities | ||
Deposits | 0 | |
Total fair value | Level 3 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 3 | Company controlled deposits | ||
Liabilities | ||
Deposits | $ 0 | $ 0 |
Fair Value Measurements (Change
Fair Value Measurements (Changes in Fair Value Included in Earnings) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loans held-for-sale | Net gain on loan sales | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | $ 283 | $ 269 | $ 321 |
Loans held-for-investment | Other noninterest income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | 1 | 1 | 40 |
Long-term debt | Other noninterest income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | 0 | 0 | 29 |
DOJ litigation settlement | Other noninterest income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | 0 | 24 | 0 |
DOJ litigation settlement | Other noninterest (expense) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | $ 0 | $ 0 | $ (2) |
Fair Value Measurements (Fai112
Fair Value Measurements (Fair Value Option Disclosures) (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | $ 4,188 | $ 3,196 |
Total assets at fair value | 4,312 | 3,217 |
Assets, fair value over/(under) UPB | 124 | 21 |
DOJ Agreement | ||
Fair Value, Option, Quantitative Disclosures | ||
Litigation settlement payment amount | 118 | |
Loans held-for-sale | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 4,173 | 3,105 |
Total assets at fair value | 4,300 | 3,145 |
Assets, fair value over/(under) UPB | 127 | 40 |
Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 15 | 91 |
Total assets at fair value | 12 | 72 |
Assets, fair value over/(under) UPB | (3) | (19) |
DOJ litigation settlement | ||
Fair Value, Option, Quantitative Disclosures | ||
Liabilities, unpaid principal balance (UPB) | (118) | (118) |
Long-term debt, fair value | (60) | (60) |
Liabilities, fair value over/(under) UPB | 58 | 58 |
Nonperforming | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 11 | 21 |
Total assets at fair value | 9 | 15 |
Assets, fair value over/(under) UPB | (2) | (6) |
Nonperforming | Loans held-for-sale | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 6 | 2 |
Total assets at fair value | 5 | 2 |
Assets, fair value over/(under) UPB | (1) | 0 |
Nonperforming | Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 5 | 19 |
Total assets at fair value | 4 | 13 |
Assets, fair value over/(under) UPB | (1) | (6) |
Performing | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 4,177 | 3,175 |
Total assets at fair value | 4,303 | 3,202 |
Assets, fair value over/(under) UPB | 126 | 27 |
Performing | Loans held-for-sale | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 4,167 | 3,103 |
Total assets at fair value | 4,295 | 3,143 |
Assets, fair value over/(under) UPB | 128 | 40 |
Performing | Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 10 | 72 |
Total assets at fair value | 8 | 59 |
Assets, fair value over/(under) UPB | $ (2) | $ (13) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2017USD ($)segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information | |||||||||||||||
Number of business segments | segment | 3 | ||||||||||||||
Summary of Operations | |||||||||||||||
Net interest income | $ 107 | $ 103 | $ 97 | $ 83 | $ 87 | $ 80 | $ 77 | $ 79 | $ 76 | $ 73 | $ 73 | $ 65 | $ 390 | $ 323 | $ 287 |
Net gain on loan sales | 79 | 75 | 66 | 48 | 57 | 94 | 90 | 75 | 46 | 68 | 83 | 91 | 268 | 316 | 288 |
Other noninterest income | 202 | 171 | 182 | ||||||||||||
Total net interest income and noninterest income | 860 | 810 | 757 | ||||||||||||
Benefit (provision) for loan losses | (2) | (2) | 1 | (3) | (1) | (7) | 3 | 13 | 1 | 1 | 13 | 4 | (6) | 8 | 19 |
Compensation and benefits | (299) | (269) | (237) | ||||||||||||
Other noninterest expense | (344) | (291) | (299) | ||||||||||||
Total noninterest expense | (178) | (171) | (154) | (140) | (142) | (142) | (139) | (137) | (129) | (131) | (138) | (138) | (643) | (560) | (536) |
Income (loss) before overhead allocations and income taxes | 51 | 60 | 60 | 40 | 42 | 87 | 69 | 60 | 45 | 71 | 74 | 50 | 211 | 258 | 240 |
Overhead allocations | 0 | 0 | 0 | ||||||||||||
Benefit (provision) for income taxes | (96) | (20) | (19) | (13) | (14) | (30) | (22) | (21) | (12) | (24) | (28) | (18) | (148) | (87) | (82) |
Net income | $ (45) | $ 40 | $ 41 | $ 27 | $ 28 | $ 57 | $ 47 | $ 39 | $ 33 | $ 47 | $ 46 | $ 32 | 63 | 171 | 158 |
Average balances | |||||||||||||||
Loans held-for-sale | 4,146 | 3,134 | 2,188 | ||||||||||||
Loans with government guarantees | 290 | 435 | 633 | ||||||||||||
Loans held-for-investment | 6,511 | 5,815 | 5,076 | ||||||||||||
Total assets | 15,846 | 13,907 | 11,956 | ||||||||||||
Deposits | 8,907 | 8,762 | 7,877 | ||||||||||||
Community Banking | |||||||||||||||
Summary of Operations | |||||||||||||||
Net interest income | 238 | 206 | 171 | ||||||||||||
Net gain on loan sales | (10) | 6 | (15) | ||||||||||||
Other noninterest income | 31 | 28 | 25 | ||||||||||||
Total net interest income and noninterest income | 259 | 240 | 181 | ||||||||||||
Benefit (provision) for loan losses | (4) | 10 | 19 | ||||||||||||
Compensation and benefits | (62) | (56) | (47) | ||||||||||||
Other noninterest expense | (92) | (89) | (86) | ||||||||||||
Total noninterest expense | (154) | (145) | (133) | ||||||||||||
Income (loss) before overhead allocations and income taxes | 101 | 105 | 67 | ||||||||||||
Overhead allocations | (41) | (35) | (27) | ||||||||||||
Benefit (provision) for income taxes | (21) | (24) | (14) | ||||||||||||
Net income | 39 | 46 | 26 | ||||||||||||
Average balances | |||||||||||||||
Loans held-for-sale | 16 | 66 | 40 | ||||||||||||
Loans with government guarantees | 0 | 0 | 0 | ||||||||||||
Loans held-for-investment | 6,475 | 5,809 | 4,986 | ||||||||||||
Total assets | 6,544 | 5,906 | 4,972 | ||||||||||||
Deposits | 7,454 | 7,151 | 6,674 | ||||||||||||
Mortgage Originations | |||||||||||||||
Summary of Operations | |||||||||||||||
Net interest income | 129 | 90 | 80 | ||||||||||||
Net gain on loan sales | 278 | 310 | 303 | ||||||||||||
Other noninterest income | 92 | 43 | 93 | ||||||||||||
Total net interest income and noninterest income | 499 | 443 | 476 | ||||||||||||
Benefit (provision) for loan losses | (4) | (2) | 0 | ||||||||||||
Compensation and benefits | (100) | (81) | (73) | ||||||||||||
Other noninterest expense | (163) | (123) | (108) | ||||||||||||
Total noninterest expense | (263) | (204) | (181) | ||||||||||||
Income (loss) before overhead allocations and income taxes | 232 | 237 | 295 | ||||||||||||
Overhead allocations | (63) | (54) | (66) | ||||||||||||
Benefit (provision) for income taxes | (59) | (64) | (80) | ||||||||||||
Net income | 110 | 119 | 149 | ||||||||||||
Average balances | |||||||||||||||
Loans held-for-sale | 4,130 | 3,068 | 2,148 | ||||||||||||
Loans with government guarantees | 290 | 435 | 633 | ||||||||||||
Loans held-for-investment | 7 | 6 | 4 | ||||||||||||
Total assets | 5,414 | 4,435 | 3,553 | ||||||||||||
Deposits | 0 | 0 | 0 | ||||||||||||
Mortgage Servicing | |||||||||||||||
Summary of Operations | |||||||||||||||
Net interest income | 11 | 21 | 4 | ||||||||||||
Net gain on loan sales | 0 | 0 | 0 | ||||||||||||
Other noninterest income | 66 | 60 | 61 | ||||||||||||
Total net interest income and noninterest income | 77 | 81 | 65 | ||||||||||||
Benefit (provision) for loan losses | 0 | 0 | 0 | ||||||||||||
Compensation and benefits | (16) | (15) | (15) | ||||||||||||
Other noninterest expense | (61) | (63) | (73) | ||||||||||||
Total noninterest expense | (77) | (78) | (88) | ||||||||||||
Income (loss) before overhead allocations and income taxes | 0 | 3 | (23) | ||||||||||||
Overhead allocations | (23) | (23) | (20) | ||||||||||||
Benefit (provision) for income taxes | 8 | 7 | 15 | ||||||||||||
Net income | (15) | (13) | (28) | ||||||||||||
Average balances | |||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | ||||||||||||
Loans with government guarantees | 0 | 0 | 0 | ||||||||||||
Loans held-for-investment | 0 | 0 | 0 | ||||||||||||
Total assets | 36 | 28 | 52 | ||||||||||||
Deposits | 1,453 | 1,611 | 1,203 | ||||||||||||
Other | |||||||||||||||
Summary of Operations | |||||||||||||||
Net interest income | 12 | 6 | 32 | ||||||||||||
Net gain on loan sales | 0 | 0 | 0 | ||||||||||||
Other noninterest income | 13 | 40 | 3 | ||||||||||||
Total net interest income and noninterest income | 25 | 46 | 35 | ||||||||||||
Benefit (provision) for loan losses | 2 | 0 | 0 | ||||||||||||
Compensation and benefits | (121) | (117) | (102) | ||||||||||||
Other noninterest expense | (28) | (16) | (32) | ||||||||||||
Total noninterest expense | (149) | (133) | (134) | ||||||||||||
Income (loss) before overhead allocations and income taxes | (122) | (87) | (99) | ||||||||||||
Overhead allocations | 127 | 112 | 113 | ||||||||||||
Benefit (provision) for income taxes | (76) | (6) | (3) | ||||||||||||
Net income | (71) | 19 | 11 | ||||||||||||
Average balances | |||||||||||||||
Loans held-for-sale | 0 | 0 | 0 | ||||||||||||
Loans with government guarantees | 0 | 0 | 0 | ||||||||||||
Loans held-for-investment | 29 | 0 | 86 | ||||||||||||
Total assets | 3,852 | 3,538 | 3,379 | ||||||||||||
Deposits | 0 | 0 | 0 | ||||||||||||
Intersegment Eliminations | |||||||||||||||
Summary of Operations | |||||||||||||||
Total net interest income and noninterest income | 0 | 0 | 0 | ||||||||||||
Intersegment Eliminations | Community Banking | |||||||||||||||
Summary of Operations | |||||||||||||||
Total net interest income and noninterest income | (6) | (3) | (15) | ||||||||||||
Intersegment Eliminations | Mortgage Originations | |||||||||||||||
Summary of Operations | |||||||||||||||
Total net interest income and noninterest income | 4 | (1) | 7 | ||||||||||||
Intersegment Eliminations | Mortgage Servicing | |||||||||||||||
Summary of Operations | |||||||||||||||
Total net interest income and noninterest income | 19 | 23 | 20 | ||||||||||||
Intersegment Eliminations | Other | |||||||||||||||
Summary of Operations | |||||||||||||||
Total net interest income and noninterest income | $ (17) | $ (19) | $ (12) |
Holding Company Only Financi114
Holding Company Only Financial Statements (Condensed Unconsolidated Statements of Financial Condition) (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets | ||||
Cash and cash equivalents | $ 204 | $ 158 | ||
Other assets | 691 | 781 | ||
Total assets | 16,912 | 14,053 | ||
Liabilities | ||||
Long-term debt | 494 | 493 | ||
Other liabilities | 405 | 417 | ||
Total liabilities | 15,513 | 12,717 | ||
Stockholders’ Equity | ||||
Common stock | 1 | 1 | ||
Additional paid in capital | 1,512 | 1,503 | ||
Accumulated other comprehensive income | (16) | (7) | ||
Accumulated deficit | (98) | (161) | ||
Total stockholders’ equity | 1,399 | 1,336 | $ 1,529 | $ 1,373 |
Total liabilities and stockholders’ equity | 16,912 | 14,053 | ||
Unconsolidated trusts | 7 | 7 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 196 | 70 | $ 37 | $ 46 |
Investment in subsidiaries | 1,676 | 1,728 | ||
Other assets | 44 | 57 | ||
Total assets | 1,916 | 1,855 | ||
Liabilities | ||||
Long-term debt | 494 | 493 | ||
Other liabilities | 23 | 26 | ||
Total liabilities | 517 | 519 | ||
Stockholders’ Equity | ||||
Common stock | 1 | 1 | ||
Additional paid in capital | 1,512 | 1,503 | ||
Accumulated other comprehensive income | (17) | (7) | ||
Accumulated deficit | (97) | (161) | ||
Total stockholders’ equity | 1,399 | 1,336 | ||
Total liabilities and stockholders’ equity | $ 1,916 | $ 1,855 |
Holding Company Only Financi115
Holding Company Only Financial Statements (Condensed Unconsolidated Statements of Operations) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement | |||||||||||||||
Interest | $ 41 | $ 37 | $ 32 | $ 27 | $ 24 | $ 26 | $ 22 | $ 22 | $ 19 | $ 18 | $ 17 | $ 14 | $ 137 | $ 94 | $ 68 |
Income (loss) before overhead allocations and income taxes | 51 | 60 | 60 | 40 | 42 | 87 | 69 | 60 | 45 | 71 | 74 | 50 | 211 | 258 | 240 |
Provision (benefit) for income taxes | 96 | 20 | 19 | 13 | 14 | 30 | 22 | 21 | 12 | 24 | 28 | 18 | 148 | 87 | 82 |
Net income | $ (45) | $ 40 | $ 41 | $ 27 | $ 28 | $ 57 | $ 47 | $ 39 | $ 33 | $ 47 | $ 46 | $ 32 | 63 | 171 | 158 |
Other comprehensive (loss) income | (9) | (9) | (6) | ||||||||||||
Comprehensive income | 54 | 162 | 152 | ||||||||||||
Parent Company | |||||||||||||||
Income Statement | |||||||||||||||
Interest | 25 | 16 | 7 | ||||||||||||
General and administrative | 9 | 9 | 13 | ||||||||||||
Total | 34 | 25 | 20 | ||||||||||||
Loss before undistributed income of subsidiaries | (34) | (25) | (20) | ||||||||||||
Equity in undistributed income of subsidiaries | 110 | 188 | 172 | ||||||||||||
Income (loss) before overhead allocations and income taxes | 76 | 163 | 152 | ||||||||||||
Provision (benefit) for income taxes | 13 | (8) | (6) | ||||||||||||
Net income | 63 | 171 | 158 | ||||||||||||
Other comprehensive (loss) income | (9) | (9) | (6) | ||||||||||||
Comprehensive income | $ 54 | $ 162 | $ 152 |
Holding Company Only Financi116
Holding Company Only Financial Statements (Condensed Unconsolidated Statements of Cash Flow) (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities | |||||||||||||||
Net income | $ (45) | $ 40 | $ 41 | $ 27 | $ 28 | $ 57 | $ 47 | $ 39 | $ 33 | $ 47 | $ 46 | $ 32 | $ 63 | $ 171 | $ 158 |
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||||||
Change in other assets | 23 | (39) | 239 | ||||||||||||
Provision for deferred tax benefit | 146 | 83 | 80 | ||||||||||||
Change in other liabilities | (42) | 55 | (11) | ||||||||||||
Change in fair value and other non-cash changes | (280) | (168) | (132) | ||||||||||||
Net cash (used in) operating activities | (25,322) | (16,340) | (9,519) | ||||||||||||
Investing Activities | |||||||||||||||
Net cash provided by investing activities | 22,494 | 16,201 | 5,885 | ||||||||||||
Financing Activities | |||||||||||||||
Redemption of preferred stock | 0 | (267) | 0 | ||||||||||||
Dividends paid on preferred stock | 0 | (105) | 0 | ||||||||||||
Net cash provided by financing activities | 2,843 | 109 | 3,734 | ||||||||||||
Cash and cash equivalents, beginning of year | 158 | 158 | |||||||||||||
Cash and cash equivalents, end of year | 204 | 158 | 204 | 158 | |||||||||||
Parent Company | |||||||||||||||
Operating Activities | |||||||||||||||
Net income | 63 | 171 | 158 | ||||||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||||||
Equity in (income) loss of subsidiaries | 47 | 12 | (172) | ||||||||||||
Stock-based compensation | 5 | 10 | 3 | ||||||||||||
Change in other assets | 18 | (8) | (6) | ||||||||||||
Provision for deferred tax benefit | 0 | 0 | 1 | ||||||||||||
Change in other liabilities | (2) | (22) | 9 | ||||||||||||
Change in fair value and other non-cash changes | (5) | (4) | 0 | ||||||||||||
Net cash (used in) operating activities | 126 | 159 | (7) | ||||||||||||
Investing Activities | |||||||||||||||
Net change in investment in subsidiaries | 0 | 0 | (2) | ||||||||||||
Net cash provided by investing activities | 0 | 0 | (2) | ||||||||||||
Financing Activities | |||||||||||||||
Proceeds from the issuance of junior subordinated debentures | 0 | 245 | 0 | ||||||||||||
Redemption of preferred stock | 0 | (267) | 0 | ||||||||||||
Dividends paid on preferred stock | 0 | (104) | 0 | ||||||||||||
Net cash provided by financing activities | 0 | (126) | 0 | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 126 | 33 | (9) | ||||||||||||
Cash and cash equivalents, beginning of year | $ 70 | $ 37 | $ 46 | 70 | 37 | 46 | |||||||||
Cash and cash equivalents, end of year | $ 196 | $ 70 | $ 37 | $ 196 | $ 70 | $ 37 |
Quarterly Financial Data (Un117
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||
Interest income | $ 148 | $ 140 | $ 129 | $ 110 | $ 111 | $ 106 | $ 99 | $ 101 | $ 95 | $ 91 | $ 90 | $ 79 | $ 527 | $ 417 | $ 355 |
Interest expense | 41 | 37 | 32 | 27 | 24 | 26 | 22 | 22 | 19 | 18 | 17 | 14 | 137 | 94 | 68 |
Net interest income | 107 | 103 | 97 | 83 | 87 | 80 | 77 | 79 | 76 | 73 | 73 | 65 | 390 | 323 | 287 |
Provision (benefit) for loan losses | 2 | 2 | (1) | 3 | 1 | 7 | (3) | (13) | (1) | (1) | (13) | (4) | 6 | (8) | (19) |
Net interest income after provision (benefit) for loan losses | 105 | 101 | 98 | 80 | 86 | 73 | 80 | 92 | 77 | 74 | 86 | 69 | 384 | 331 | 306 |
Net gain on loan sales | 79 | 75 | 66 | 48 | 57 | 94 | 90 | 75 | 46 | 68 | 83 | 91 | 268 | 316 | 288 |
Loan fees and charges | 24 | 23 | 20 | 15 | 20 | 22 | 19 | 15 | 14 | 17 | 19 | 17 | 82 | 76 | 67 |
Deposit fees and charges | 4 | 5 | 5 | 4 | 18 | 22 | 25 | ||||||||
Loan administration income | 5 | 5 | 6 | 5 | 4 | 4 | 4 | 6 | 7 | 8 | 7 | 4 | 21 | 18 | 26 |
Net return (loss) on the mortgage servicing rights | (4) | 6 | 6 | 14 | (5) | (11) | (4) | (6) | 9 | 12 | 9 | (2) | 22 | (26) | 28 |
Representation and warranty benefit | 2 | 4 | 3 | 4 | 7 | 6 | 4 | 2 | 6 | 6 | 5 | 2 | 13 | 19 | 19 |
Other noninterest income | 14 | 12 | 10 | 10 | 15 | 41 | 15 | 13 | 15 | 17 | 3 | 7 | 46 | 62 | 17 |
Noninterest expense | 178 | 171 | 154 | 140 | 142 | 142 | 139 | 137 | 129 | 131 | 138 | 138 | 643 | 560 | 536 |
Income (loss) before overhead allocations and income taxes | 51 | 60 | 60 | 40 | 42 | 87 | 69 | 60 | 45 | 71 | 74 | 50 | 211 | 258 | 240 |
Provision for income taxes | 96 | 20 | 19 | 13 | 14 | 30 | 22 | 21 | 12 | 24 | 28 | 18 | 148 | 87 | 82 |
Net income | $ (45) | $ 40 | $ 41 | $ 27 | $ 28 | $ 57 | $ 47 | $ 39 | $ 33 | $ 47 | $ 46 | $ 32 | $ 63 | $ 171 | $ 158 |
Basic income (loss) per share (in usd per share) | $ (0.79) | $ 0.71 | $ 0.72 | $ 0.47 | $ 0.50 | $ 0.98 | $ 0.67 | $ 0.56 | $ 0.45 | $ 0.70 | $ 0.69 | $ 0.43 | $ 1.11 | $ 2.71 | $ 2.27 |
Diluted income (loss) per share (in usd per share) | $ (0.79) | $ 0.70 | $ 0.71 | $ 0.46 | $ 0.49 | $ 0.96 | $ 0.66 | $ 0.54 | $ 0.44 | $ 0.69 | $ 0.68 | $ 0.43 | $ 1.09 | $ 2.66 | $ 2.24 |