Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-16577 | ||
Entity Registrant Name | Flagstar Bancorp, Inc | ||
Entity Incorporation, State or Country Code | MI | ||
Entity Tax Identification Number | 38-3150651 | ||
Entity Address, Address Line One | 5151 Corporate Drive, | ||
Entity Address, City or Town | Troy, | ||
Entity Address, State or Province | MI | ||
Entity Address, Postal Zip Code | 48098-2639 | ||
City Area Code | 248 | ||
Local Phone Number | 312-2000 | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Trading Symbol | FBC | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2 | ||
Entity Common Stock, Shares Outstanding | 56,657,508 | ||
Documents Incorporated by Reference | Portions of the registrant’s Proxy Statement relating to the 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Report on Form 10-K. | ||
Entity Central Index Key | 0001033012 | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash | $ 220 | $ 260 |
Interest-earning deposits | 206 | 148 |
Total cash and cash equivalents | 426 | 408 |
Investment securities available-for-sale | 2,116 | 2,142 |
Investment securities held-to-maturity | 598 | 703 |
Loans held-for-sale ($5,219 and $3,732 measured at fair value, respectively) | 5,258 | 3,869 |
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 12,129 | 9,088 |
Loans with government guarantees | 736 | 392 |
Less: allowance for loan losses | (107) | (128) |
Total loans held-for-investment and loans with government guarantees, net | 12,758 | 9,352 |
Mortgage servicing rights | 291 | 290 |
Federal Home Loan Bank stock | 303 | 303 |
Premises and equipment, net | 416 | |
Premises and equipment, net | 390 | |
Goodwill and intangible assets | 170 | 190 |
Other assets | 930 | 884 |
Total assets | 23,266 | 18,531 |
Liabilities and Stockholders’ Equity | ||
Noninterest bearing deposits | 5,467 | 2,989 |
Interest bearing deposits | 9,679 | 9,391 |
Total deposits | 15,146 | 12,380 |
Short-term Federal Home Loan Bank advances and other | 4,165 | 3,244 |
Long-term Federal Home Loan Bank advances | 650 | 150 |
Other long-term debt | 496 | 495 |
Other liabilities ($35 and $60 measured at fair value, respectively) | 1,021 | 692 |
Total liabilities | 21,478 | 16,961 |
Stockholders’ Equity | ||
Common stock $0.01 par value, 80,000,000 and 80,000,000 shares authorized; 56,631,236 and 57,749,464 shares issued and outstanding, respectively | 1 | 1 |
Additional paid in capital | 1,483 | 1,522 |
Accumulated other comprehensive (loss) income | 1 | (47) |
Retained earnings/(accumulated deficit) | 303 | 94 |
Total stockholders’ equity | 1,788 | 1,570 |
Total liabilities and stockholders’ equity | $ 23,266 | $ 18,531 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Loans held-for-sale, fair value | $ 5,219 | |
Loans held-for-investment, fair value | 12 | $ 10 |
Liabilities and Stockholders' Equity | ||
Other liabilities, fair value | $ 35 | $ 60 |
Stockholders' Equity | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 56,631,236 | 57,749,464 |
Common stock, shares outstanding (in shares) | 56,631,236 | 57,749,464 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Interest Income | |||
Loans | $ 713 | $ 595 | $ 446 |
Investment securities | 77 | 86 | 80 |
Interest-earning deposits and other | 4 | 2 | 1 |
Total interest income | 794 | 683 | 527 |
Interest Expense | |||
Deposits | 138 | 94 | 52 |
Short-term Federal Home Loan Bank advances and other | 59 | 68 | 36 |
Long-term Federal Home Loan Bank advances | 7 | (4) | 24 |
Other long-term debt | 28 | 28 | 25 |
Total interest expense | 232 | 186 | 137 |
Net interest income | 562 | 497 | 390 |
Provision (benefit) for loan losses | 18 | (8) | 6 |
Net interest income after provision (benefit) for loan losses | 544 | 505 | 384 |
Noninterest Income | |||
Net gain on loan sales | 335 | 200 | 268 |
Loan fees and charges | 100 | 87 | 82 |
Net return on mortgage servicing rights | 6 | 36 | 22 |
Loan administration income | 30 | 23 | 21 |
Deposit fees and charges | 38 | 21 | 18 |
Other noninterest income | 101 | 72 | 59 |
Total noninterest income | 610 | 439 | 470 |
Noninterest Expense | |||
Compensation and benefits | 377 | 318 | 299 |
Occupancy and equipment | 161 | 127 | 103 |
Commissions | 111 | 80 | 72 |
Loan processing expense | 80 | 59 | 57 |
Legal and professional expense | 27 | 28 | 30 |
Federal insurance premiums | 20 | 22 | 16 |
Intangible asset amortization | 15 | 5 | 0 |
Other noninterest expense | 97 | 73 | 66 |
Total noninterest expense | 888 | 712 | 643 |
Income before income taxes | 266 | 232 | 211 |
Provision for income taxes | 48 | 45 | 148 |
Net income | $ 218 | $ 187 | $ 63 |
Net income per share | |||
Basic (in usd per share) | $ 3.85 | $ 3.26 | $ 1.11 |
Diluted (in usd per share) | $ 3.80 | $ 3.21 | $ 1.09 |
Weighted average shares outstanding | |||
Basic (in shares) | 56,584,238 | 57,520,289 | 57,093,868 |
Diluted (in shares) | 57,238,978 | 58,322,950 | 58,178,343 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 218 | $ 187 | $ 63 |
Other comprehensive income (loss), net of tax | |||
Investment securities | 48 | (29) | (10) |
Derivatives and hedging activities | 0 | (2) | |
Derivatives and hedging activities | 1 | ||
Other comprehensive income (loss), net of tax | 48 | (31) | (9) |
Comprehensive income | $ 266 | $ 156 | $ 54 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) | |
Balance (in shares) at Dec. 31, 2016 | 56,824,802 | |||||
Balance at Dec. 31, 2016 | $ 1,336 | $ 1 | $ 1,503 | $ (7) | $ (161) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 63 | 63 | ||||
Total other comprehensive income (loss) | (9) | (9) | ||||
Shares issued for Employee Stock Purchase Plan (in shares) | 48,032 | |||||
Warrant exercise (in shares) | 154,313 | |||||
Warrant exercise | 4 | 4 | ||||
Stock-based compensation (in shares) | 294,081 | |||||
Stock-based compensation | 5 | 5 | ||||
Balance (in shares) at Dec. 31, 2017 | 57,321,228 | |||||
Balance at Dec. 31, 2017 | 1,399 | $ 1 | 1,512 | (16) | (98) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 187 | 187 | ||||
Total other comprehensive income (loss) | (26) | (26) | ||||
Shares issued for Employee Stock Purchase Plan (in shares) | 114,385 | |||||
Shares issued for Employee Stock Purchase Plan | 10 | 10 | ||||
Stock-based compensation (in shares) | 318,560 | |||||
Stock-based compensation | 0 | 0 | ||||
Reclassification of certain income tax effects | [1] | (5) | 5 | |||
Repurchase of shares included in treasury stock (in shares) | (4,709) | |||||
Balance (in shares) at Dec. 31, 2018 | 57,749,464 | |||||
Balance at Dec. 31, 2018 | 1,570 | $ 1 | 1,522 | (47) | 94 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 218 | 218 | ||||
Total other comprehensive income (loss) | 48 | 48 | ||||
Shares issued for Employee Stock Purchase Plan (in shares) | 106,881 | |||||
Shares issued for Employee Stock Purchase Plan | 0 | 0 | ||||
Dividends declared and paid (in shares) | 376 | |||||
Dividends declared and paid | (9) | (9) | ||||
Stock-based compensation (in shares) | 292,220 | |||||
Stock-based compensation | 11 | 11 | ||||
Repurchase of shares included in treasury stock (in shares) | (1,517,705) | |||||
Repurchase of common shares | (50) | (50) | ||||
Balance (in shares) at Dec. 31, 2019 | 56,631,236 | |||||
Balance at Dec. 31, 2019 | $ 1,788 | $ 1 | $ 1,483 | $ 1 | $ 303 | |
[1] | Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to the adoption of ASU 2018-02. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Operating Activities | ||||
Net income | $ 218 | $ 187 | $ 63 | |
Adjustments to reconcile net income to net cash used in operating activities: | ||||
Depreciation and amortization | 70 | 56 | 40 | |
Provision (benefit) for loan losses | 18 | (8) | 6 | |
Net gain on loan and asset sales | (335) | (200) | (268) | |
Proceeds from sales of HFS | 15,866 | 8,935 | 9,245 | |
Origination, premium paid and purchase of loans, net of principal repayments | (32,715) | (32,261) | (34,235) | |
Net change in: | ||||
Other | (205) | (87) | (173) | |
Net cash used in operating activities | (17,083) | (23,378) | (25,322) | |
Investing Activities | ||||
Proceeds from sale of AFS securities including loans that have been securitized | 15,873 | 23,721 | 24,646 | |
Collection of principal on investment securities AFS | 184 | 199 | 218 | |
Purchase of investment securities AFS and other | (500) | (340) | (904) | |
Collection of principal on investment securities HTM | 106 | 92 | 154 | |
Proceeds received from the sale of LHFI | 219 | 161 | 104 | |
Net origination, purchase, and principal repayments of LHFI | (3,179) | (978) | (1,760) | |
Acquisition of premises and equipment, net of proceeds | (61) | (71) | (97) | |
Purchase of bank owned life insurance | 0 | 0 | 50 | |
Net purchase of FHLB stock | 0 | 0 | 123 | |
Proceeds from the sale of MSRs | 62 | 334 | 309 | |
Assets acquired (liabilities assumed) in business combinations | 0 | 1,499 | (8) | |
Other, net | (16) | (10) | 5 | |
Net cash provided by investing activities | 12,688 | 24,607 | 22,494 | |
Financing Activities | ||||
Net change in deposit accounts | 2,766 | 1,072 | 134 | |
Net change in short term FHLB borrowings and other | 923 | (1,016) | 2,480 | |
Proceeds from increases in FHLB long-term advances and other debt | 550 | 200 | 255 | |
Repayment of long-term FHLB advances | (50) | (1,455) | (50) | |
Net receipt of payments of loans serviced for others | 284 | 181 | 22 | |
Preferred stock dividends | (9) | 0 | 0 | |
Stock repurchase | 50 | 0 | 0 | |
Other | 5 | (2) | 2 | |
Net cash provided (used) by financing activities | 4,419 | (1,020) | 2,843 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | [1] | 24 | 209 | 15 |
Beginning cash, cash equivalents and restricted cash | [1] | 432 | 223 | 208 |
Ending cash, cash equivalents and restricted cash | [1] | 456 | 432 | 223 |
Supplemental disclosure of cash flow information | ||||
Interest paid on deposits and other borrowings | 230 | 185 | 136 | |
Income tax payments | 4 | 0 | 5 | |
Non-cash reclassification of investment securities HTM to AFS | 0 | 144 | 0 | |
Non-cash reclassification of loans originated LHFI to LHFS | 120 | 279 | 131 | |
Non-cash reclassification of mortgage loans HFS to HFI | 0 | 0 | 0 | |
Non-cash reclassification of LHFS to AFS securities | 15,458 | 23,718 | 24,345 | |
MSRs resulting from sale or securitization of loans | $ 223 | $ 356 | $ 288 | |
[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, 2019 | |
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 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, Cash Equivalents and Restricted Cash 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. Restricted cash includes cash that the Bank pledges as maintenance margin on centrally cleared derivatives and is included in other assets on the Consolidated Statements of Financial Condition. Investment Securities 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 and recorded in interest income in the Consolidated Statements of Operations. 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 at least a quarterly basis. 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) do not expect to recover the entire amortized cost basis of the security. Investments that have an OTTI are written down through a charge to earnings for the amount representing the credit loss on the security. Gains and losses related to all other factors are recognized in other comprehensive income (loss). 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 and recorded in interest income in the Consolidated Statements of Operations. For further information, see Note 2 - Investment Securities and Note 20 - Fair Value Measurements. 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 20 - 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 loans, are deferred and recognized over the contractual 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 20 - 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, in accordance with the initial classification of the loans. Past Due, Impaired and Modified (Troubled Debt Restructuring) 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 against interest income and the loan may only return to accrual status when principal and interest become current and are anticipated to be fully collectible. 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 may include a reduction of interest rate, extension of amortization period, principal and/or interest forgiveness or other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Modified loans are classified as nonperforming TDRs if the loan was nonperforming prior to the restructuring, or if the results of a contemporaneous credit evaluation determines that payment is not reasonably assured. 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. Loans are considered impaired if it is probable that payment of all 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 TDRs as interest and principal will not be received in accordance with the original contractual terms of the loan agreement. 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 nonperforming impaired loans is applied entirely against principal until the loan has been collected in full, after which time any additional cash receipts are recognized as interest income. For further information, see Note 4 - Loans Held-for-Investment. 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 specifically identified (TDR and NPL loans) and for probable losses believed to be inherent in the loan portfolio which are collectively evaluated through a model-based component. Management applies judgment and 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 costs to sell 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 average historical loss rates experienced during an identified look back period applied to outstanding principal balances over an estimated loss emergence period that represents the time period between the date at which the loss is estimated to have been incurred and the ultimate realization of that loss (by a charge-off). We evaluate the appropriateness of the lookback period at least quarterly and consider the recent performance of the portfolio compared to both recent historical periods and prior ten year period. We estimate the loss emergence period using available credit information and trends. In addition to the loss history or peer data, we also perform a qualitative assessment considering factors noted above and use our judgments to make any necessary adjustments. 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 20 - 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. The stock is redeemable at par and is carried at cost as no market quotes exist for the stock. 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 years to seven years . Software expenditures, repair and maintenance costs that are considered general, administrative, or of a maintenance nature are expensed as incurred. Goodwill and Intangible Assets The excess of the cost of an acquisition over the fair value of the net assets acquired consists primarily of goodwill, core deposit intangibles and other identifiable intangible assets. Goodwill is not amortized, but rather tested annually for impairment, or more frequently as events occur or circumstances change that would indicate the fair value is below the carrying amount. The Company may assess qualitative factors to determine whether it is more-likely-than-not the fair value is less than its carrying amount. If the Company concludes based on the qualitative assessment that goodwill may be impaired, a quantitative one-step impairment test would then be applied. An impairment loss would be recognized for any excess of carrying value over fair value of the goodwill. Intangible assets subject to amortization are amortized over the estimated life, using a method that approximates the time the economic benefits are realized by the Company. Intangible assets are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Amortization expense on intangible assets was $15 million and $5 million for the years ended December 31, 2019 and December 31, 2018 , respectively. The estimated future aggregate amortization expense on intangible assets for the years ended 2020, 2021, 2022, and 2023 is $13 million , $11 million , $9 million , and $7 million , respectively. 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, prepayment speeds, costs to service and other assumptions to determine the fair value of MSRs. 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 20 - 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 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. Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606), under the 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. Effective January 1, 2018, we have adopted the requirements of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all related amendments. We have implemented the guidance utilizing the modified retrospective approach which did not have a material impact on the Company's financial position or results of operations. We undertook a process to evaluate all of our significant revenue sources under the new standard. As lease contracts and financial instruments, which include loans and securities, are excluded from the scope of this standard, the majority of our revenue falls outside of the scope of Topic 606. The adoption of this guidance does not result in changes to how revenue is recognized or the timing of recognition from our method prior to adoption. Revenue is recognized when obligations, under the terms of a contract with our customer, are satisfied, which generally occurs when services are performed. Revenue is measured as the amount of consideration we expect to receive in exchange for providing services. The disaggregation of our revenue from contracts with customers is provided below: For the Years Ended December 31, Location of Revenue (1) 2019 2018 (Dollars in millions) Deposit account and other banking income Deposit fees and charges $ 27 $ 16 Interchange fees Deposit fees and charges 11 5 Interchange fees Other noninterest income 2 1 Wealth management Other noninterest income 6 9 Total $ 46 $ 31 (1) Recognized within the Community Banking segment. Deposit account and other banking income - We charge depositors various deposit account service fees including those for outgoing wires, overdrafts, stop payments, and ATM fees. These fees are generated from a depositor’s option to purchase services offered under the contract and are only considered a contract when the depositor exercises their option to purchase these account services. Therefore we deem the term of our contracts with depositors to be day-to-day and do not extend beyond the services already provided. Deposit account and other banking fees are recorded at the point in time we perform the requested service. Interchange income - We collect interchange fee income when debit cards that we have issued to our customers, are used in merchant transactions. Our performance obligation is satisfied and revenue is recognized at the point we initiate the payment of funds from a customer’s account to a merchant account. Merchant fee income - We receive a percentage of merchant fees based upon card transactions processed through point of sale terminals at referred merchant locations. Our performance obligation is satisfied when our referral of a merchant to a payment processing vendor results in an executed agreement between the merchant and the vendor. Merchant fee revenue is recognized as received. Merchant fee income was less than $1 million for the years ended December 31, 2019 and December 31, 2018 . Wealth management revenue - We earn commission income through a revenue share program based on a tiered percentage of total gross commissions generated from the sales of investment and insurance services to Flagstar customers. Commissions are earned and our performance obligation has been satisfied at the point of sale or trade execution. Our portion of earned commissions is calculated, paid and recognized as revenue on a monthly basis. We also receive revenue from portfolio management services. We receive payment for portfolio management services in advance at the beginning of each quarter for services to be performed over the quarter which results an insignificant revenue liability. We recognize this revenue over the quarter on a straight-line basis, as we believe this is the most appropriate method to measure progress towards satisfaction of the performance obligation. 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 gain or loss 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. 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 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. We may 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 the qualitatively throughout the hedge period unless a change in facts and circumstances is identified. 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. 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, until the point it is determined the underlying transaction is probable to not occur, at which point it is reclassified immediately into earnings. We utilize interest rate swaps to manage fair value changes of our fixed-rate FHLB advances and certain AFS securities in a qualifying fair value hedge accounting relationships. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. Changes in the fair value of derivatives designated as fair value hed |
Investment Securities
Investment Securities | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Available-for-sale securities Agency - Commercial $ 948 $ 2 $ (3 ) $ 947 Agency - Residential 1,015 4 (4 ) 1,015 Corporate debt obligations 76 1 — 77 Municipal obligations 31 — — 31 Other MBS 44 1 — 45 Certificates of Deposit 1 1 Total available-for-sale securities (1) $ 2,115 $ 8 $ (7 ) $ 2,116 Held-to-maturity securities Agency - Commercial $ 306 $ — $ (1 ) $ 305 Agency - Residential 292 3 (1 ) 294 Total held-to-maturity securities (1) $ 598 $ 3 $ (2 ) $ 599 December 31, 2018 Available-for-sale securities Agency - Commercial $ 1,413 $ 4 $ (43 ) $ 1,374 Agency - Residential 686 — (24 ) 662 Corporate debt obligations 41 — — 41 Municipal obligations 33 — (1 ) 32 Other MBS 32 — — 32 Certificates of Deposit 1 — — 1 Total available-for-sale securities (1) $ 2,206 $ 4 $ (68 ) $ 2,142 Held-to-maturity securities Agency - Commercial $ 349 $ — $ (13 ) $ 336 Agency - Residential 354 — (9 ) 345 Total held-to-maturity securities (1) $ 703 $ — $ (22 ) $ 681 (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, 2019 or December 31, 2018 . Management evaluates our securities portfolio each quarter to determine if any security is considered to be other than temporarily impaired. Agency securities, which are either explicitly or implicitly backed by the federal government, comprised 94 percent of our total securities at December 31, 2019 . This factor is considered when evaluating our investment securities for OTTI. During the years ended December 31, 2019 , 2018 and 2017 , we had no OTTI. Available-for-sale securities We purchased $500 million of AFS securities, which were comprised of U.S. government sponsored agency MBS, certificates of deposit, and corporate debt obligations during the year ended December 31, 2019 . In addition, we retained $19 million of passive interests in our own private MBS during the year ended December 31, 2019 . We purchased $340 million of AFS securities, which included U.S. government sponsored agency MBS, certificates of deposit, and corporate debt obligations during the year ended December 31, 2018 . We had $432 million in sales of AFS securities during the year ended December 31, 2019 , which resulted in a gain of $7 million . We had no sales of AFS securities during the year ended December 31, 2018 . 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 . Held-to-maturity securities In conjunction with adoption of ASU 2017-12 (Targeted Improvements to Accounting for Hedging Activities) 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, which resulted in a de minimis impact to OCI. There were no purchases or sales of HTM securities during the years ended December 31, 2019 , December 31, 2018 and December 31, 2017 . 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, 2019 Available-for-sale securities Agency - Commercial $ 148 17 $ (3 ) $ 303 19 $ — Agency - Residential 266 26 (3 ) 148 14 (1 ) Municipal obligations 8 3 — — — — Held-to-maturity securities Agency - Commercial $ 148 13 $ (1 ) $ 85 6 $ — Agency - Residential 35 7 (1 ) 38 10 — December 31, 2018 Available-for-sale securities Agency - Commercial $ 1,025 74 $ (43 ) $ 1 1 $ — Agency - Residential 647 79 (24 ) 14 5 — Municipal obligations 28 16 (1 ) 1 2 — Corporate debt obligations — — — 7 2 — Held-to-maturity securities Agency - Commercial $ 336 26 $ (13 ) $ — — $ — Agency - Residential 345 60 (9 ) — — — 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, 2019 Due in one year or less $ 3 $ 3 2.12 % $ — $ — — % Due after one year through five years 20 20 4.07 % 10 10 2.48 % Due after five years through 10 years 93 95 4.23 % 9 9 2.29 % Due after 10 years 1,999 1,998 2.41 % 579 580 2.42 % Total $ 2,115 $ 2,116 $ 598 $ 599 We pledge investment securities, primarily agency collateralized and municipal taxable mortgage obligations, to collateralize lines of credit and/or borrowings. We had pledged investment securities of $874 million and, $1.9 billion , at December 31, 2019 and 2018 |
Loans Held-for-Sale
Loans Held-for-Sale | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans Held-for-Sale | Loans Held-for-Sale The majority of our mortgage loans originated as LHFS are ultimately 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, 2019 and 2018 , LHFS totaled $5.3 billion and $3.9 billion , respectively. For the years ended December 31, 2019 , 2018 and 2017 , we had net gains on loan sales associated with LHFS of $333 million , $197 million , and $267 million , respectively. At December 31, 2019 and 2018 , $39 million and $137 million , respectively, of LHFS were recorded at lower of cost or fair value. We elected the fair value option for the remainder of the loans in the portfolio. |
Loans Held-for-Investment
Loans Held-for-Investment | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Loans Held-for-Investment | Loans Held-for-Investment The following table presents our loans-held-for-investment: December 31, 2019 December 31, 2018 (Dollars in millions) Consumer loans Residential first mortgage $ 3,154 $ 2,999 Home Equity 1,024 731 Other 729 314 Total consumer loans 4,907 4,044 Commercial loans Commercial real estate 2,828 2,152 Commercial and industrial 1,634 1,433 Warehouse lending 2,760 1,459 Total commercial loans 7,222 5,044 Total loans held-for-investment $ 12,129 $ 9,088 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: For the Year Ended 2019 2018 2017 (Dollars in millions) Loans Sold (1) Performing loans $ 217 $ 158 $ 102 Nonperforming loans — — 25 Total performing and nonperforming loans sold $ 217 $ 158 $ 127 Net gain associated with loan sales (2) $ 2 $ 2 $ 2 Loans Purchased Residential first mortgage loans — 3 8 HELOC 249 — 250 Other consumer 51 34 — Total loans purchased $ 300 $ 37 $ 258 Premium associated with loans purchased $ 11 $ — $ 9 (1) Upon a change in our intent, the loans were transferred to LHFS and subsequently sold. (2) Recorded in net gain on loan sales on Consolidated Statement of Operations. 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, 2019 and 2018 , we pledged loans of $9.1 billion and $6.8 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, 2019 Beginning balance ALLL $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Charge-offs (2) (3 ) (2 ) (7 ) — (31 ) — (43 ) Recoveries 1 2 — — 1 — 4 Provision (benefit) (14 ) (1 ) 10 (10 ) 34 (1 ) 18 Ending balance ALLL $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 Year Ended December 31, 2018 Beginning balance ALLL $ 47 $ 22 $ 1 $ 45 $ 19 $ 6 $ 140 Charge-offs (2) (4 ) (2 ) (2 ) — — — (8 ) Recoveries 2 1 1 — — — 4 Provision (benefit) (7 ) (6 ) 3 3 (1 ) — (8 ) Ending balance ALLL $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 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 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of zero , zero and $1 million related to the transfer and subsequent sale of loans during the years ended December 31, 2019 , 2018 and 2017 , respectively. Also includes charge-offs related to loans with government guarantees of $2 million , $2 million , and $4 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. 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, 2019 Loans held-for-investment (2) Individually evaluated $ 32 $ 20 $ 1 $ — $ — $ — $ 53 Collectively evaluated 3,113 1,001 728 2,828 1,634 2,760 12,064 Total loans $ 3,145 $ 1,021 $ 729 $ 2,828 $ 1,634 $ 2,760 $ 12,117 Allowance for loan losses (2) Individually evaluated $ 5 $ 7 $ 1 $ — $ — $ — $ 13 Collectively evaluated 17 7 5 38 22 5 94 Total allowance for loan losses $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 December 31, 2018 Loans held-for-investment (2) Individually evaluated $ 32 $ 23 $ — $ — $ — $ — $ 55 Collectively evaluated 2,959 706 314 2,152 1,433 1,459 9,023 Total loans $ 2,991 $ 729 $ 314 $ 2,152 $ 1,433 $ 1,459 $ 9,078 Allowance for loan losses (2) Individually evaluated $ 4 $ 7 $ — $ — $ — $ — $ 11 Collectively evaluated 34 8 3 48 18 6 117 Total allowance for loan losses $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 (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 for 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, 2019 Consumer loans Residential first mortgage $ 5 $ 4 $ 21 $ 30 $ 3,124 $ 3,154 Home equity 1 — 4 5 1,019 1,024 Other 3 1 1 5 724 729 Total consumer loans 9 5 26 40 4,867 4,907 Commercial loans Commercial real estate — — — — 2,828 2,828 Commercial and industrial — — — — 1,634 1,634 Warehouse lending — — — — 2,760 2,760 Total commercial loans — — — — 7,222 7,222 Total loans (2) $ 9 $ 5 $ 26 $ 40 $ 12,089 $ 12,129 December 31, 2018 Consumer loans Residential first mortgage $ 4 $ 2 $ 19 $ 25 $ 2,974 $ 2,999 Home equity 1 — 3 4 727 731 Other — — — — 314 314 Total consumer loans 5 2 22 29 4,015 4,044 Commercial loans Commercial real estate — — — — 2,152 2,152 Commercial and industrial — — — — 1,433 1,433 Warehouse lending — — — — 1,459 1,459 Total commercial loans — — — — 5,044 5,044 Total loans (2) $ 5 $ 2 $ 22 $ 29 $ 9,059 $ 9,088 (1) Includes less than 90 days past due performing loans which are placed on non-accrual. Interest revenue is not being recognized on these loans. (2) Includes $4 million and $3 million of past due loans accounted for under the fair value option at December 31, 2019 and 2018 , respectively. Interest that would have been accrued on impaired loans if such loans were paying in accordance with their original terms, totaled approximately $1 million , $1 million and $1 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. At December 31, 2019 and 2018 , 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, 2019 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home equity 18 2 20 Total TDRs (1)(2) $ 38 $ 10 $ 48 December 31, 2018 Consumer loans Residential first mortgage $ 22 $ 8 $ 30 Home Equity 22 2 24 Total TDRs (1)(2) $ 44 $ 10 $ 54 (1) The ALLL on TDR loans totaled $8 million and $10 million at December 31, 2019 and 2018 , respectively. (2) Includes $2 million and $3 million of TDR loans accounted for under the fair value option at December 31, 2019 and 2018 , 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, 2019 Residential first mortgages 8 $ 1 $ 1 $ — Home equity (2)(3) 6 — — — Total TDR loans 14 $ 1 $ 1 $ — Year Ended December 31, 2018 Residential first mortgages 14 $ 3 $ 3 $ — Home equity (2)(3) 17 1 1 — Total TDR loans 31 $ 4 $ 4 $ — 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 ) (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. During the years ended December 31, 2019 , 2018 , and 2017 , there were zero , zero , and one , newly modified TDR loans which had been modified in the preceding 12 months that subsequently defaulted in those periods, respectively. The UPB associated with those TDR loans was zero in the year ended December 31, 2019 , zero and less than $1 million , in the aggregate, in each of the years ended December 31, 2018 and 2017 . 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. Impaired Loans The following table presents individually evaluated impaired loans and the associated allowance: December 31, 2019 December 31, 2018 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 $ 16 $ 20 $ — $ 13 $ 16 $ — Home equity 1 4 — 1 4 — Other consumer — 1 — — — — Total loans with no related allowance recorded $ 17 $ 25 $ — $ 14 $ 20 $ — With an allowance recorded Consumer loans Residential first mortgage $ 16 $ 16 $ 3 $ 19 $ 20 $ 4 Home equity 19 19 7 22 23 7 Other consumer 1 1 1 — — — Total loans with an allowance recorded $ 36 $ 36 $ 11 $ 41 $ 43 $ 11 Total impaired loans Consumer loans Residential first mortgage $ 32 $ 36 $ 3 $ 32 $ 36 $ 4 Home equity 20 23 7 23 27 7 Other consumer 1 2 1 — — — Total impaired loans $ 53 $ 61 $ 11 $ 55 $ 63 $ 11 The following table presents average impaired loans and the interest income recognized: For the Years Ended December 31, 2019 2018 2017 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 $ 36 $ — $ 33 $ 1 $ 38 $ 1 Home equity 17 — 25 2 28 1 Other consumer 2 — — — — — Commercial loans Commercial and industrial 15 — 2 — — — Total impaired loans $ 70 $ — $ 60 $ 3 $ 66 $ 2 Credit Quality We utilize an internal risk rating system which is applied to all consumer and commercial loans. Descriptions of our internal risk ratings as they relate to credit quality follow the ratings used by the U.S. bank regulatory agencies as listed below. Pass. Pass assets are not impaired nor do they have any known deficiencies that could impact the quality of the asset. Watch. Watch assets are defined as pass rated assets that exhibit elevated risk characteristics or other factors that deserve management’s close attention and increased monitoring. However, the asset does not exhibit a potential or well-defined weakness that would warrant a downgrade to criticized or adverse classification. Special mention. Assets identified as special mention possess credit deficiencies or potential weaknesses deserving management's close attention. Special mention assets have a potential weakness or pose an unwarranted financial risk that, if not corrected, could weaken the assets and increase risk in the future. Special mention assets are criticized, but do not expose an institution to sufficient risk to warrant adverse classification. Substandard . Assets identified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the full collection or liquidation of the debt. They are characterized by the distinct possibility that we will sustain some loss if the deficiencies are not corrected. For home equity loans and other consumer loans, we evaluate credit quality based on the aging and status of payment activity and any other known credit characteristics that call into question full repayment of the asset. Substandard loans may be placed on either accrual or non-accrual status. 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 the 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, 2019 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 3,107 $ 27 $ — $ 20 $ 3,154 Home equity 1,002 18 — 4 1,024 Other Consumer 727 1 — 1 729 Total Consumer Loans $ 4,836 $ 46 $ — $ 25 $ 4,907 Commercial Loans Commercial Real Estate $ 2,794 $ 24 $ 5 $ 5 $ 2,828 Commercial and Industrial 1,533 72 24 5 1,634 Warehouse 2,556 189 15 — 2,760 Total Commercial Loans $ 6,883 $ 285 $ 44 $ 10 $ 7,222 December 31, 2018 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,952 $ 28 $ — $ 19 $ 2,999 Home equity 705 23 — 3 731 Other Consumer 314 — — — 314 Total Consumer Loans $ 3,971 $ 51 $ — $ 22 $ 4,044 Commercial Loans Commercial Real Estate $ 2,132 $ 14 $ 5 $ 1 $ 2,152 Commercial and Industrial 1,351 53 29 — 1,433 Warehouse 1,324 120 15 — 1,459 Total Commercial Loans $ 4,807 $ 187 $ 49 $ 1 $ 5,044 |
Loans with Government Guarantee
Loans with Government Guarantees | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018 , respectively, loans with government guarantees totaled $736 million and $392 million . Repossessed assets and the associated claims related to government guaranteed loans are recorded in other assets and totaled $45 million and $50 million at December 31, 2019 and December 31, 2018 , respectively. |
Repossessed Assets
Repossessed Assets | 12 Months Ended |
Dec. 31, 2019 | |
Repossessed Assets [Abstract] | |
Repossessed Assets | Repossessed Assets Repossessed assets include the following: December 31, 2019 2018 (Dollars in millions) One-to-four family properties $ 6 $ 5 Commercial properties 4 2 Total repossessed assets $ 10 $ 7 The following schedule provides the activity for repossessed assets: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Beginning balance $ 7 $ 8 $ 14 Additions, net 12 10 18 Disposals (4 ) (8 ) (14 ) Net (write down) on disposal (5 ) (3 ) (9 ) Transfers out — — (1 ) Ending balance $ 10 $ 7 $ 8 |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and December 31, 2018 . In connection with our securitization activities, we have retained a five percent interest in the investment securities of certain trusts ("other MBS") and are contracted as the sub-servicer of the underlying loans, compensated based on market rates, which constitutes a continuing involvement in these trusts. Although we have a variable interest in these securitization trusts, we are not their primary beneficiary due to the relative size of our investment in comparison to the total amount of securities issued by the VIE and our inability to direct activities that most significantly impact the VIE’s economic performance. As a result, we have not consolidated the assets and liabilities of the VIE in our Statements of Financial Condition. The Bank’s maximum exposure to loss is limited to our investment in the VIE, as well as the standard representations and warranties made in conjunction with the loan transfer. See Note 2 - Investment Securities and Note 20 |
Federal Home Loan Bank Stock
Federal Home Loan Bank Stock | 12 Months Ended |
Dec. 31, 2019 | |
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 both December 31, 2019 and December 31, 2018 . 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. We had no required purchases or redemptions of FHLB stock during the years ended December 31, 2019 and 2018. Dividends received on the stock equaled $16 million , $15 million and $9 million for the years ended December 31, 2019 , 2018 and 2017 , 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, 2019 | |
Property, Plant and Equipment [Abstract] | |
Premises and Equipment | Premises and Equipment The following presents our premises and equipment balances and estimated useful lives: Estimated Useful Lives December 31, 2019 2018 (Dollars in millions) Land N/A $ 73 $ 74 Computer hardware and software 3 - 7 years 372 329 Office buildings and improvements 15 - 31.5 years 191 185 Furniture, fixtures and equipment 5 - 7 years 68 57 Leased equipment 3 - 10 years 36 40 Leasehold improvements 5-10 years 9 10 Fixed assets in progress (1) N/A 40 37 Right-of-use asset N/A 22 — Total 811 732 Less accumulated depreciation (395 ) (342 ) Premises and equipment, net $ 416 $ 390 (1) Consists primarily of internally developed software and software upgrades which have not yet been placed in service. Depreciation expense was $59 million , $50 million and $39 million , for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 (Dollars in millions) Balance at beginning of period $ 290 $ 291 $ 335 Additions from loans sold with servicing retained 223 356 288 Reductions from sales (57 ) (339 ) (310 ) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (89 ) (20 ) (31 ) Changes in estimates of fair value due to interest rate risk (1) (2) (76 ) 2 9 Fair value of MSRs at end of period $ 291 $ 290 $ 291 (1) Changes in fair value are included within net 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 significant assumptions used in valuing these assets: December 31, 2019 December 31, 2018 Fair value resulting from Fair value resulting from Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.34 % $ 284 $ 280 5.42 % $ 284 $ 280 Constant prepayment rate 10.59 % 271 257 9.57 % 278 268 Weighted average cost to service per loan $ 84.41 285 282 $ 85.57 286 283 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 on the fair value of MSRs, see Note 1 - Description of Business, Basis of Presentation, and Summary of Significant Accounting Standards and Note 20 - 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 on subserviced loans, net of third party subservicing costs. The following table summarizes income and fees associated with owned mortgage servicing rights: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 96 $ 65 $ 60 Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (89 ) (20 ) (31 ) Changes in fair value (76 ) 2 9 Gain (loss) on MSR derivatives (2) 76 (5 ) (8 ) Net transaction costs (1 ) (6 ) (8 ) Total return (loss) included in net return on mortgage servicing rights $ 6 $ 36 $ 22 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Changes in the derivatives utilized as economic hedges to offset changes in fair value of the MSRs. The following table summarizes income and fees associated with our mortgage loans subserviced for others: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 106 $ 54 $ 35 Charges on subserviced custodial balances (2) (67 ) (29 ) (11 ) Other servicing charges (9 ) (2 ) (3 ) Total income on mortgage loans subserviced, included in loan administration $ 30 $ 23 $ 21 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on cash basis. (2) Charges on subserviced custodial balances represent interest due to MSR owner |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
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. Our 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 fair value hedges of fixed-rate FHLB advances and investment securities available for sale using the last-of-layer method. Derivatives that are designated in hedging relationships are assessed for effectiveness using regression analysis at inception and qualitatively thereafter, unless regression analysis is deemed necessary. All designated hedge relationships were and are expected to be highly effective as of December 31, 2019 . Cash flows and the profit impact associated with designated hedges are reported in the same category as the underlying hedged item. During the fourth quarter of 2018 , we completed the Wells Fargo branch acquisition. This acquisition resulted in the addition of $1.8 billion of deposits and significantly changed the composition of our balance sheet. We settled all of our variable LIBOR based long-term FHLB borrowings and determined that our forecasted interest payments were probable not to occur. As a result, we reclassified $29 million of hedging gains that had been deferred in OCI from de-designated hedging relationships immediately into income in 2018. We have no gains or losses estimated to be reclassified from other comprehensive income into earnings during the next 12 months. The following tables present the notional amount, estimated fair value and maturity of our derivative financial instruments: December 31, 2019 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in fair value hedge relationships: Assets Interest rate swaps on FHLB advances $ 200 $ — 2020 Interest rate swaps on AFS securities 100 — 2022 Total derivative assets $ 300 $ — Derivatives not designated as hedging instruments: Assets Futures $ 550 $ — 2020-2023 Mortgage-backed securities forwards 1,918 2 2020 Rate lock commitments 3,870 34 2020 Interest rate swaps 799 26 2020-2029 Total derivative assets $ 7,137 $ 62 Liabilities Mortgage-backed securities forwards 5,749 9 2020 Rate lock commitments 229 1 2020 Interest rate swaps and swaptions 1,662 8 2020-2050 Total derivative liabilities $ 7,640 $ 18 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. (2) Derivative assets and liabilities are included in other assets and other liabilities on the Consolidated Statements of Financial Condition, respectively. December 31, 2018 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in fair value hedge relationships: Assets Interest rate swaps on CDs $ 20 $ — 2019 Liabilities Interest rate swaps on CDs $ 10 $ — 2019 Derivatives not designated as hedging instruments: Assets Futures $ 248 $ — 2019-2023 Mortgage-backed securities forwards 362 4 2019 Rate lock commitments 2,221 20 2019 Interest rate swaps and swaptions 1,662 23 2019-2049 Total derivative assets $ 4,493 $ 47 Liabilities Futures $ 1,513 $ 1 2019-2023 Mortgage-backed securities forwards 4,625 31 2019 Rate lock commitments 45 — 2019 Interest rate swaps 755 7 2019-2028 Total derivative liabilities $ 6,938 $ 39 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. (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, 2019 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 2 $ — $ 2 $ — $ — Interest rate swaps 26 — 26 — — Total derivative assets $ 28 $ — $ 28 $ — $ — Liabilities Mortgage-backed securities forwards 9 — 9 — 24 Interest rate swaps and swaptions (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 December 31, 2018 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 4 $ — $ 4 $ — $ — Interest rate swaps and swaptions (1) 23 — 23 — 14 Total derivative assets $ 27 $ — $ 27 $ — $ 14 Liabilities Futures $ 1 $ — $ 1 $ — $ 1 Mortgage-backed securities forwards 31 — 31 — 29 Interest rate swaps (1) 7 — 7 — 23 Total derivative liabilities $ 39 $ — $ 39 $ — $ 53 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. The fair value basis adjustment on our hedged AFS securities is included in investment securities available for sale on our Consolidated Statements of Financial Condition. The carrying amount of our hedged securities was $287 million at December 31, 2019 , of which $1 million was due to the fair value hedge relationship, and zero at December 31, 2018 . The closed portfolio of AFS securities designated in this last layer method hedge was $291 million (amortized cost of $289 million ) at December 31, 2019 , of which we have designated $100 million. There were no designated AFS hedges at December 31, 2018 . The carrying amount of hedged FHLB advances was $200 million at December 31, 2019 and zero at December 31, 2018 . The fair value hedge relationship had a de minimis impact at December 31, 2019 and zero at December 31, 2018 . At December 31, 2019 , we pledged a total of $63 million related to derivative financial instruments, consisting of $34 million of cash collateral on derivative liabilities and $29 million of maintenance margin on centrally cleared derivatives and had a de minimis obligation to return cash on derivative assets. We pledged a total of $53 million related to derivative financial instruments, consisting of $30 million of cash collateral on derivative liabilities and $23 million of maintenance margin on centrally cleared derivatives and had an obligation to return cash of $14 million on derivative assets at December 31, 2018 . Within the Consolidated Statements of Financial Condition, the collateral related to derivative activity is included in other assets and liabilities and the cash pledged as maintenance is restricted and included in other assets. The following table presents the net gain recognized on designated instruments, net of the impact of offsetting positions: Amount Recorded in Net Interest Income (1) For the Years Ended December 31, 2019 2018 (2) (Dollars in millions) Gain on cash flow hedging relationships in interest contracts Amount of gain reclassified from AOCI into income $ — $ 30 Total gain on hedges $ — $ 30 (1) The income impact from fair value hedging relationships for the years ending December 31, 2019 was de minimis and zero at December 31, 2018 . (2) Includes $29 million of hedging gains reclassified into net interest income in conjunction with the payoff of long-term FHLB advances. 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, 2019 2018 2017 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain (Loss) Futures Net loss on mortgage servicing rights $ (2 ) $ (4 ) $ (1 ) Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights 57 1 (11 ) Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 21 (2 ) 4 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales 35 (31 ) (34 ) Forward commitments Other noninterest income 2 — — Interest rate swaps (1) Other noninterest income 5 3 2 Total derivative (loss) gain $ 118 $ (33 ) $ (40 ) (1) Includes customer-initiated commercial interest rate swaps. |
Deposit Accounts
Deposit Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Deposit Accounts | Deposit Accounts The deposit accounts are as follows: December 31, 2019 2018 (Dollars in millions) Retail deposits Branch retail deposits Demand deposit accounts $ 1,318 $ 1,297 Savings accounts 3,030 2,812 Money market demand accounts 495 628 Certificates of deposit/CDARS 2,353 2,387 Total branch retail deposits 7,196 7,124 Commercial deposits (1) Demand deposit accounts 1,438 1,243 Savings accounts 342 314 Money market demand accounts 188 173 Total commercial retail deposits 1,968 1,730 Total retail deposits 9,164 8,854 Government deposits Demand deposit accounts 360 326 Savings accounts 495 567 Certificates of deposit/CDARS 358 309 Total government deposits (2) 1,213 1,202 Wholesale deposits 633 583 Custodial deposits (3) 4,136 1,741 Total deposits $ 15,146 $ 12,380 (1) Includes deposits from commercial and business banking customers. (2) Government deposits include funds from municipalities and schools. (3) These accounts represent a portion of the investor custodial accounts and escrows controlled by us in connection with loans serviced or subserviced for others and that have been placed on deposit with the Bank. The following indicates the scheduled maturities for certificates of deposit with a minimum denomination of $250,000 : December 31, 2019 2018 (Dollars in millions) Three months or less $ 223 $ 251 Over three months to six months 238 165 Over six months to twelve months 278 229 One to two years 101 139 Thereafter 35 33 Total $ 875 $ 817 |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Home Loan Bank Advances and Other Borrowings The following is a breakdown of our FHLB advances and other borrowings outstanding: December 31, 2019 December 31, 2018 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 3,695 1.61 % $ 2,993 2.52 % Other short-term borrowings 470 1.64 % 251 2.87 % Total short-term Federal Home Loan Bank advances and other borrowings 4,165 3,244 Long-term fixed rate advances (1) 650 1.45 % 150 1.53 % Total long-term Federal Home Loan Bank advances 650 150 Total Federal Home Loan Bank advances and other borrowings $ 4,815 $ 3,394 (1) Includes the current portion of fixed rate advances of $0 million and $50 million at December 31, 2019 and December 31, 2018 , respectively. The following table contains detailed information on our FHLB advances and other borrowings: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Maximum outstanding at any month end $ 5,005 $ 5,740 $ 5,665 Average outstanding balance 3,064 4,713 4,590 Average remaining borrowing capacity 4,194 2,089 1,195 Weighted average interest rate 1.90 % 1.96 % 1.30 % The following table outlines the maturity dates of our FHLB advances and other borrowings: December 31, 2019 (Dollars in millions) 2020 $ 4,165 2021 — 2022 — 2023 250 Thereafter 400 Total $ 4,815 Parent Company Senior Notes and Trust Preferred Securities The following table presents long-term debt, net of debt issuance costs: December 31, 2019 December 31, 2018 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 249 6.125 % $ 248 6.125% Trust Preferred Securities Floating Three Month LIBOR Plus: Plus 3.25%, matures 2032 $ 26 5.20 % $ 26 6.07 % Plus 3.25%, matures 2033 $ 26 5.24 % $ 26 5.69 % Plus 3.25%, matures 2033 $ 26 5.21 % $ 26 6.05 % Plus 2.00%, matures 2035 $ 26 3.99 % $ 26 4.44 % Plus 2.00%, matures 2035 $ 26 3.99 % $ 26 4.44 % Plus 1.75%, matures 2035 $ 51 3.64 % $ 51 4.54 % Plus 1.50%, matures 2035 $ 25 3.49 % $ 25 3.94 % Plus 1.45%, matures 2037 $ 25 3.34 % $ 25 4.24 % Plus 2.50%, matures 2037 $ 16 4.39 % $ 16 5.29 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 496 $ 495 Senior Notes On July 11, 2016, we issued $250 million of senior notes ("Senior Notes") which mature on July 15, 2021. 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 , in addition to accrued and unpaid interest. Trust Preferred Securities We sponsor nine trust subsidiaries, which issued preferred stock to third party investors. We issued junior subordinated debt securities to those trusts, which we have included in long-term debt. The junior subordinated debt 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, 2019 , we had no deferred interest. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 (Dollars in millions) Investment Securities Beginning balance $ (47 ) $ (18 ) $ (8 ) Unrealized gain (loss) 57 (30 ) (19 ) Less: Tax provision (benefit) 14 (7 ) (7 ) Net unrealized gain (loss) 43 (23 ) (12 ) Reclassifications out of AOCI (1) 6 (1 ) 3 Less: Tax provision 1 — 1 Net unrealized gain (loss) reclassified out of AOCI 5 (1 ) 2 Reclassification of certain income tax effects (2) — (5 ) — Other comprehensive income (loss), net of tax 48 (29 ) (10 ) Ending balance $ 1 $ (47 ) $ (18 ) Cash Flow Hedges Beginning balance $ — $ 2 $ 1 Unrealized gain — 27 5 Less: Tax provision — 7 1 Net unrealized gain — 20 4 Reclassifications out of AOCI (3) — (30 ) (5 ) Less: Tax benefit — (8 ) (2 ) Net unrealized loss reclassified out of AOCI — (22 ) (3 ) Other comprehensive income (loss), net of tax — (2 ) 1 Ending balance $ — $ — $ 2 (1) Reclassifications are reported in other noninterest income in the Consolidated Statement of Operations. (2) Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to early adoption of ASU 2018-02. (3) |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 (In millions, except share data) Net income applicable to common stockholders $ 218 $ 187 $ 63 Weighted Average Shares Weighted average common shares outstanding 56,584,238 57,520,289 57,093,868 Effect of dilutive securities May Investor Warrants — — 12,287 Stock-based awards 654,740 802,661 1,072,188 Weighted average diluted common shares 57,238,978 58,322,950 58,178,343 Earnings per common share Basic earnings per common share $ 3.85 $ 3.26 $ 1.11 Effect of dilutive securities May Investor Warrants — — — Stock-based awards (0.05 ) (0.05 ) (0.02 ) Diluted earnings per common share $ 3.80 $ 3.21 $ 1.09 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Certain key employees, officers, directors and others are eligible to receive stock awards. Awards that may be granted under the 2016 Stock Plan include stock options, restricted stock, restricted stock units, performance awards, dividend equivalents and other awards. The compensation expense recognized related to stock-based compensation was $13 million , $11 million , and $11 million during each of the years ended December 31, 2019 , 2018 and 2017 , respectively. Stock Options No stock options have been granted by the Company since 2002. There were no stock options exercised during the years ended December 31, 2019 , 2018 and 2017 as all options had negative intrinsic value. The remaining stock options expired January 22, 2020 , and were not exercised. The following table summarizes stock option activity: For the Years Ended December 31, 2019 2018 2017 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Options outstanding, beginning of year 36,093 $ 80.00 40,718 $ 80.00 45,791 $ 80.00 Options canceled, forfeited and expired (1,894 ) 80.00 (4,625 ) 80.00 (5,073 ) 80.00 Options outstanding, end of year 34,199 $ 80.00 36,093 $ 80.00 40,718 $ 80.00 Options vested or expected to vest, end of year 34,199 $ 80.00 36,093 $ 80.00 40,718 $ 80.00 Options exercisable, end of year 16,968 $ 80.00 17,991 $ 80.00 20,286 $ 80.00 (1) All outstanding options at December 31, 2019 are vested or expected to vest and have a weighted average remaining contractual life of 0.1 years. Restricted Stock and Restricted Stock Units We have issued restricted stock units to officers, directors and certain employees under our long term incentive program (LTIP). Restricted stock units generally will vest in 3 increments on each annual anniversary of the date of grant beginning with the first anniversary or vest after three years 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 provided for payouts to certain executives only if our stock achieved and sustained a specified market performance within ten years of the grant date, which occurred. 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. With the achievement of the performance hurdles and satisfactory quality reviews, installments were paid out in May 2017, 2018, and 2019. The remaining two installments will be made annually on the vesting date anniversary subject to quality review. With the achievement of the performance-based ExLTIP, on March 20, 2018, the Board approved the adoption of the 2018 Executive Long Term Incentive Program II ("2018 ExLTIP II"). The 2018 ExLTIP II was provided to certain executives and is comprised of RSUs which are dependent on stock performance, time-based RSUs for which vesting is based on service over a four years period and RSUs that are performance and time vested with the same terms as those granted to other employees under the existing LTIP. As of December 31, 2019 the stock performance hurdles have not been met. At December 31, 2019 , the maximum number of shares of common stock that may be issued were 1,416,986 shares. The total grant date fair value of awards vested during the years ended December 31, 2019 , 2018 , 2017 was $10 million , $9 million , and $7 million , respectively. As of December 31, 2019 , the total unrecognized compensation cost related to non-vested awards was $23 million with a weighted average expense recognition period of 1.8 years . The following table summarizes restricted stock activity: For the Years Ended December 31, 2019 2018 2017 Number of Shares Weighted Average Grant-Date Fair Value per Share Number of Shares Weighted Average Grant-Date Fair Value per Share Number of Shares Weighted Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,620,568 $ 27.27 1,290,450 $ 20.52 1,461,910 $ 17.68 Granted 338,737 32.11 875,352 34.32 357,058 28.06 Vested (379,936 ) 26.98 (401,379 ) 23.04 (385,454 ) 17.36 Canceled and forfeited (180,242 ) 25.66 (143,855 ) 21.46 (143,064 ) 18.89 Non-vested balance at end of period 1,399,127 $ 28.72 1,620,568 $ 27.27 1,290,450 $ 20.52 2017 Employee Stock Purchase Plan The Employee Stock Purchase Plan ("2017 ESPP") was approved on March 20, 2017 by our 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. There were 106,881 and 114,385 shares issued under the 2017 ESPP during the years ended December 31, 2019 and 2018 , respectively, and the associated compensation expense was de minimis for both periods. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Components of the provision for income taxes consist of the following: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Current Federal $ 17 $ — $ 2 State 6 1 — Total current income tax expense 23 1 2 Deferred Federal 39 47 66 Federal impact of tax reform — — 80 State (14 ) (3 ) — Total deferred income tax expense 25 44 146 Total income tax expense $ 48 $ 45 $ 148 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, 2019 2018 2017 (Dollars in millions) Provision at statutory federal income tax rate (1) $ 56 $ 49 $ 74 (Decreases) increases resulting from: Bank owned life insurance (2 ) (2 ) (3 ) State income tax (benefit), net of federal income tax effect (net of valuation allowance release) (6 ) (2 ) — Low income housing tax losses (1 ) (1 ) Tax reform — — 80 Other 1 1 (3 ) Provision for income taxes $ 48 $ 45 $ 148 Effective tax provision rate 18.1 % 19.4 % 70.1 % (1) The statutory federal income tax rate was 21 percent for the years ended December 31, 2019 and December 31, 2018 and 35 percent for the year ended December 31, 2017 . The decrease in our income tax provision and effective tax provision rate during the year ended December 31, 2019 as compared to the year ended December 31, 2018 , was primarily due to a change in our valuation allowance for net deferred tax assets at the state level. Temporary differences and carry forwards that give rise to DTAs and liabilities are comprised of the following: December 31, 2019 2018 (Dollars in millions) Deferred tax assets Net operating loss carryforwards (Federal and State) $ 43 $ 58 Allowance for loan losses 26 30 Accrued compensation 12 10 Litigation settlement 9 14 Lease liability 6 — Contingent consideration 4 3 General business credits — 7 General business reserves 2 10 Other 11 11 Total $ 113 $ 143 Valuation allowance (5 ) (14 ) Total net $ 108 $ 129 Deferred tax liabilities Mark-to-market adjustments $ (12 ) $ (11 ) Premises and equipment (7 ) (8 ) State and local taxes (7 ) (3 ) Commercial lease financing (5 ) (4 ) Mortgage loan servicing rights (5 ) — Right of use asset (6 ) — Total $ (42 ) $ (26 ) Net deferred tax asset $ 66 $ 103 We have not provided deferred income taxes for the Bank’s pre-1988 tax bad debt reserve at December 31, 2019 of approximately $4.0 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, 2019 and 2018 , we had federal net operating loss carry forwards of $68 million and $154 million , respectively. These carry forwards, if unused, expire in calendar years 2028 through 2029 . 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, 2019 we had $68 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 $35 million which includes total state net operating loss carryforwards of $454 million at December 31, 2019 . In connection with our ongoing assessment of deferred taxes, we analyzed each state net operating loss separately and determined the amount of net operating loss available, estimated the amount which we 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, 2019 , the net state DTAs which will more likely than not be realized, was $30 million . We have a valuation allowance of $5 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, 2019 , 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, 2019 , 2018 and 2017 , 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, 2019 | |
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 included transition provisions through 2018. In preparation for the capital simplification rules, effective January 1, 2020, the Basel III implementation phase-in has been halted. 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, 2019 and December 31, 2018 . 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, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,720 7.57 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) 1,480 9.32 % 715 4.5 % 1,033 6.5 % Tier 1 capital (to RWA) 1,720 10.83 % 953 6.0 % 1,271 8.0 % Total capital (to RWA) 1,830 11.52 % 1,271 8.0 % 1,589 10.0 % December 31, 2018 Tier 1 capital (to adjusted avg. total assets) $ 1,505 8.29 % $ 726 4.0 % $ 908 5.0 % Common equity Tier 1 capital (to RWA) 1,265 10.54 % 540 4.5 % 780 6.5 % Tier 1 capital (to RWA) 1,505 12.54 % 720 6.0 % 960 8.0 % Total capital (to RWA) 1,637 13.63 % 960 8.0 % 1,201 10.0 % 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, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,752 7.71 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) 1,752 11.04 % 714 4.5 % 1,032 6.5 % Tier 1 capital (to RWA) 1,752 11.04 % 952 6.0 % 1,270 8.0 % Total capital (to RWA) 1,862 11.73 % 1,270 8.0 % 1,587 10.0 % December 31, 2018 Tier 1 capital (to adjusted avg. total assets) $ 1,574 8.67 % $ 726 4.0 % $ 908 5.0 % Common equity Tier 1 capital (to RWA) 1,574 13.12 % 540 4.5 % 780 6.5 % Tier 1 capital (to RWA) 1,574 13.12 % 720 6.0 % 960 8.0 % Total capital (to RWA) 1,705 14.21 % 960 8.0 % 1,200 10.0 % |
Legal Proceedings, Contingencie
Legal Proceedings, Contingencies and Commitments | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 , 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. The Settlement Agreement meets the definition of a financial instrument for which we elected the fair value option. We consider the assumptions a market participant would make to transfer the liability and evaluate the potential ways we might satisfy the Settlement Agreement and our estimates of the likelihood of these outcomes, which may change over time. The fair value of the liability is subject to significant uncertainty and is impacted by forecasted estimates of the timing of potential payments, some of which are impacted by inputs including estimates of equity, earnings, timing and amount of dividends and growth of the balance sheet and their related impacts on forecasted Tier 1 Leverage Capital Ratio discount rate, and the likelihood and types of potential business combinations, or any other means by which a payment could be made. For further information on the fair value to the liability, see Note 20 - Fair Value Measurements. Other litigation accruals At December 31, 2019 and December 31, 2018 , excluding the fair value liability relating to the DOJ litigation settlement, our total accrual for contingent liabilities and settled litigation was $3 million and $2 million , respectively. Commitments The following table is a summary of the contractual amount of significant commitments: December 31, 2019 2018 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 4,099 $ 2,293 Warehouse loan commitments 1,944 2,334 Commercial and industrial commitments 1,107 918 Other commercial commitments 2,015 1,260 HELOC commitments 558 429 Other consumer commitments 175 108 Standby and commercial letters of credit 82 63 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 commitments including interest-rate locks. We enter into mortgage loan commitments, including interest-rate locks with our customers. These interest-rate lock 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. Conditional 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 December 31, 2019 and December 31, 2018 , respectively, is reflected in other liabilities on the Consolidated Statements of Financial Condition. Supplemental executive retirement plan with former CEO. The Company entered into a supplemental executive retirement plan (“SERP”) with a former CEO in 2009. Under the plan, the former CEO was to receive a $16 million payment in August 2018. The Company fully accrued for the SERP liability during that time period and no SERP payments have been made to the former CEO. Due to the condition of the Company at the time the former CEO’s employment ended, we believe that any payment under the SERP would be deemed to be a “Golden Parachute” payment and, therefore, is subject to certain banking regulations. As a result, we would need to make an application to the regulators to make a payment and certify to certain criteria. The Company does not believe that it can make such a certification. The former CEO has filed a lawsuit to compel us to make that certification and ultimately pay the liability. Final dispensation of the "SERP" is not within our control and the liability of $16 million |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 947 $ — $ 947 Agency - Residential — 1,015 — 1,015 Municipal obligations — 31 — 31 Corporate debt obligations — 77 — 77 Other MBS — 45 — 45 Certificate of Deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 5,219 — 5,219 Commercial Loan — — — — Loans held-for-investment Residential first mortgage loans — 10 — 10 Home equity — — 2 2 Mortgage servicing rights — — 291 291 Derivative assets Rate lock commitments (fallout-adjusted) — — 34 34 Mortgage-backed securities forwards — 2 — 2 Interest rate swaps and swaptions — 26 — 26 Total assets at fair value $ — $ 7,373 $ 327 $ 7,700 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (1 ) $ (1 ) Futures — — — — Mortgage-backed securities forwards — (9 ) — (9 ) Interest rate swaps and swaptions — (8 ) — (8 ) DOJ litigation settlement — — (35 ) (35 ) Contingent consideration — — (10 ) (10 ) Total liabilities at fair value $ — $ (17 ) $ (46 ) $ (63 ) December 31, 2018 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 1,374 $ — $ 1,374 Agency - Residential — 662 — 662 Municipal obligations — 32 — 32 Corporate debt obligations — 42 — 42 Other MBS — 32 — 32 Loans held-for-sale Residential first mortgage loans — 3,732 — 3,732 Loans held-for-investment Residential first mortgage loans — 8 — 8 Home equity — — 2 2 Mortgage servicing rights — — 290 290 Derivative assets Rate lock commitments (fallout-adjusted) — — 20 20 Mortgage-backed securities forwards — 4 — 4 Interest rate swaps and swaptions — 23 — 23 Total assets at fair value $ — $ 5,909 $ 312 $ 6,221 Derivative liabilities Futures $ — $ (1 ) $ — $ (1 ) Mortgage-backed securities forwards — (31 ) — (31 ) Interest rate swaps — (7 ) — (7 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (6 ) (6 ) Total liabilities at fair value $ — $ (39 ) $ (66 ) $ (105 ) 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 Total Gains / Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Year (Dollars in millions) Year Ended December 31, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (1) 290 (165 ) 223 (57 ) — — 291 Rate lock commitments (net) (1)(2) 20 86 326 — — (398 ) 34 Totals $ 312 $ (79 ) $ 549 $ (57 ) $ — $ (398 ) $ 327 Liabilities DOJ litigation settlement $ (60 ) $ 25 $ — $ — $ — $ — $ (35 ) Contingent consideration (6 ) (7 ) — — 3 — (10 ) Totals $ (66 ) $ 18 $ — $ — $ 3 $ — $ (45 ) Year Ended December 31, 2018 Assets Loans held-for-investment Home equity $ 4 $ — $ — $ — $ (2 ) $ — $ 2 Mortgage servicing rights (1) 291 (18 ) 356 (339 ) — — 290 Rate lock commitments (net) (1)(2) 24 (34 ) 235 — — (205 ) 20 Totals $ 319 $ (52 ) $ 591 $ (339 ) $ (2 ) $ (205 ) $ 312 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (25 ) 13 — — 6 — (6 ) Totals $ (85 ) $ 13 $ — $ — $ 6 $ — $ (66 ) Year 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 (1) 335 $ (22 ) 288 (310 ) 291 Rate lock commitments (net) (1)(2) 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 ) (1) 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 do not reflect the effect of our risk management activities related to such Level 3 instruments. (2) 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. 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, 2019 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) (1) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 2.4% - 20.4% (5.3%) (1) Rate lock commitments (net) $ 34 Consensus pricing Origination pull-through rate 80.0% - 87.2% (81.5%) (1) Liabilities DOJ litigation settlement $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (10 ) Discounted cash flows See description below See description below (2) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) December 31, 2018 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) (1) Mortgage servicing rights $ 290 Discounted cash flows Option adjusted spread 2.1% - 25.9% (5.4%) (1) Rate lock commitments (net) $ 20 Consensus pricing Origination pull-through rate 75.0% - 87.2% (76.8%) (1) Liabilities DOJ litigation settlement $ (60 ) Discounted cash flows See description below See description below Contingent consideration $ (6 ) Discounted cash flows See description below See description below (2) (1) Unobservable inputs were weighted by their relative fair value of the instruments. (2) Unobservable inputs were not weighted as only one instrument exists. 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 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. 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 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, 2019 and December 31, 2018 the weighted average life (in years) for the entire MSR portfolio was 4.1 and 5.2 , respectively. DOJ litigation settlement. The significant unobservable input used in the fair value measurement of the DOJ litigation settlement are the discount rate, asset growth rate, return on assets, dividend rate, and potential ways we might be required to begin making DOJ liability payments and our estimates of the likelihood of these outcomes, as further discussed in Note 19 - Legal Proceedings, Contingencies and Commitments. The DOJ liability had a fair value adjustment of $25 million for the year ended December 31, 2019 . This reduced the liability to $35 million based on changes in the probability of potential ways we might be required to begin making DOJ liability payments and our estimates of the likelihood of these outcomes. Our assessment of these outcomes reflect a reduced likelihood, and longer timing, for potential future payments. 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 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. 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, 2019 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 14 — 14 (5 ) Repossessed assets (3) 10 — 10 (3 ) Totals $ 30 $ 6 $ 24 $ (9 ) December 31, 2018 Loans held-for-sale (2) $ 5 $ 5 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 12 — 12 (4 ) Repossessed assets (3) 7 — 7 (3 ) Totals $ 24 $ 5 $ 19 $ (8 ) (1) The fair values are determined at various dates during the years ended December 31, 2019 and 2018 , 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, 2019 Impaired loans held-for-investment Residential first mortgage loans $ 14 Fair value of collateral Loss severity discount 25% - 30% (25.9%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (17.1%) (1) December 31, 2018 Impaired loans held-for-investment Residential first mortgage loans $ 12 Fair value of collateral Loss severity discount 25% - 30% (28.3%) (1) Repossessed assets $ 7 Fair value of collateral Loss severity discount 0% - 100% (25.8%) (1) (1) Unobservable inputs were weighted by their relative fair value of the instruments. 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, 2019 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 426 $ 426 $ 426 $ — $ — Investment securities available-for-sale 2,116 2,116 — 2,116 — Investment securities held-to-maturity 598 599 — 599 — Loans held-for-sale 5,258 5,258 — 5,258 — Loans held-for-investment 12,129 12,031 — 10 12,021 Loans with government guarantees 736 707 — 707 — Mortgage servicing rights 291 291 — — 291 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 349 349 — 349 — Repossessed assets 10 10 — — 10 Other assets, foreclosure claims 45 45 — 45 — Derivative financial instruments 62 88 — 54 34 Liabilities Retail deposits Demand deposits and savings accounts $ (6,811 ) $ (6,050 ) $ — $ (6,050 ) $ — Certificates of deposit (2,353 ) (2,368 ) — (2,368 ) — Wholesale deposits (633 ) (640 ) — (640 ) — Government deposits (1,213 ) (1,156 ) — (1,156 ) — Custodial deposits (4,136 ) (4,066 ) — (4,066 ) — Federal Home Loan Bank advances (4,815 ) (4,816 ) — (4,816 ) — Long-term debt (496 ) (462 ) — (462 ) — DOJ litigation settlement (35 ) (35 ) — — (35 ) Contingent consideration (10 ) (10 ) — — (10 ) Derivative financial instruments (18 ) (44 ) — (43 ) (1 ) December 31, 2018 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 408 $ 408 $ 408 $ — $ — Investment securities available-for-sale 2,142 2,142 — 2,142 — Investment securities held-to-maturity 703 681 — 681 — Loans held-for-sale 3,869 3,870 — 3,870 — Loans held-for-investment 9,088 8,966 8 8,958 Loans with government guarantees 392 374 374 Mortgage servicing rights 290 290 — — 290 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 340 340 — 340 — Repossessed assets 7 7 — — 7 Other assets, foreclosure claims 50 50 — 50 — Derivative financial instruments, assets 47 47 — 27 20 Liabilities Retail deposits Demand deposits and savings accounts $ (6,467 ) $ (5,475 ) $ — $ (5,475 ) $ — Certificates of deposit (2,387 ) (2,379 ) — (2,379 ) — Wholesale deposits (583 ) (585 ) — (585 ) — Government deposits (1,202 ) (1,145 ) — (1,145 ) — Custodial deposits (1,741 ) (1,664 ) — (1,664 ) — Federal Home Loan Bank advances (3,394 ) (3,383 ) — (3,383 ) — Long-term debt (495 ) (463 ) — (463 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (6 ) (6 ) — — (6 ) Derivative financial instruments, liabilities (39 ) (39 ) — (39 ) — Fair Value Option We elected the fair value option for certain items as discussed throughout the Notes to the Consolidated Financial Statements primarily to more closely align the accounting method with the underlying 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, 2019 2018 2017 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 348 $ (29 ) $ 283 Loans held-for-investment Other noninterest income 1 — 1 Liabilities DOJ litigation settlement Other noninterest income 25 — — 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, 2019 December 31, 2018 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 $ 3 $ 3 $ — $ 6 $ 6 $ — Loans held-for-investment 5 4 (1 ) 4 3 (1 ) Total nonaccrual loans 8 7 (1 ) 10 9 (1 ) Other performing loans Loans held-for-sale 5,057 5,216 159 3,601 3,726 125 Loans held-for-investment 8 8 — 8 7 (1 ) Total other performing loans 5,065 5,224 159 3,609 3,733 124 Total loans Loans held-for-sale 5,060 5,219 159 3,607 3,732 125 Loans held-for-investment 13 12 (1 ) 12 10 (2 ) Total loans $ 5,073 $ 5,231 $ 158 $ 3,619 $ 3,742 $ 123 Liabilities Litigation settlement (1) $ (118 ) $ (35 ) $ 83 $ (118 ) $ (60 ) $ 58 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 19 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
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. 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, and investment and insurance products and services. The Mortgage Originations segment originates and acquires one-to-four family residential mortgage loans to sell or hold on our balance sheet. Loans originated-to-sell, comprise the majority of the lending activity. These loans are originated through mortgage branches, call centers, the Internet and third party counterparties. The Mortgage Origination segment recognizes interest income on loans that are held for sale and the gains from sales associated with these loans, whereas the interest income on LHFI and a loss on sales for the purchase of these loans is recognized in the Community Banking 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 also provides servicing of residential mortgages for our own LHFI portfolio in the Community Banking segment and our own LHFS portfolio in the Mortgage Originations segment, for which it earns revenue via an intercompany service fee allocation. The Other segment includes the treasury functions, which include, the impact of interest rate risk management, balance sheet funding activities and the administration of the investment securities portfolios, as well as miscellaneous other expenses of a corporate nature. 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 operating segments. Revenues are comprised of net interest income (before the provision (benefit) for loan losses) and noninterest income. Noninterest expenses and provision (benefit) for income taxes, are fully allocated to each operating segment. Allocation methodologies may be subject to periodic adjustment as the internal management accounting system is revised and the business or product lines within the segments change. The following tables present financial information by business segment for the periods indicated: Year Ended December 31, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 449 $ 106 $ 16 $ (9 ) $ 562 Provision (benefit) for loan losses 20 2 — (4 ) 18 Net interest income after provision (benefit) for loan losses 429 104 16 (5 ) 544 Net gain on loan sales (29 ) 364 — — 335 Loan fees and charges (1 ) 69 32 — 100 Loan administration income (5 ) (22 ) 124 (67 ) 30 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 64 10 — 65 139 Total noninterest income 29 427 156 (2 ) 610 Compensation and benefits 100 114 28 135 377 Commissions 2 109 — — 111 Loan processing expense 7 35 36 2 80 Other noninterest expense 167 88 59 6 320 Total noninterest expense 276 346 123 143 888 Income before indirect overhead allocations and income taxes 182 185 49 (150 ) 266 Indirect overhead allocation Income (expense) (41 ) (42 ) (18 ) 101 — Provision (benefit) for income taxes 30 29 6 (17 ) 48 Net income (loss) $ 111 $ 114 $ 25 $ (32 ) $ 218 Intersegment (expense) revenue $ (19 ) $ 29 $ 26 $ (36 ) $ — Average balances Loans held-for-sale $ 32 $ 3,920 $ — $ — $ 3,952 Loans with government guarantees — 553 — — 553 Loans held-for-investment (2) 10,910 24 — (2 ) 10,932 Total assets 11,378 5,408 47 3,840 20,673 Deposits 10,301 — 3,850 556 14,707 (1) Includes offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2018 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 314 $ 128 $ 7 $ 48 $ 497 Provision (benefit) for loan losses 2 2 — (12 ) (8 ) Net interest income after provision (benefit) for loan losses 312 126 7 60 505 Net gain on loan sales (12 ) 212 — — 200 Loan fees and charges (1 ) 63 25 — 87 Loan administration income (3 ) (14 ) 69 (29 ) 23 Net return on mortgage servicing rights — 36 — — 36 Other noninterest income 44 16 — 33 93 Total noninterest income 28 313 94 4 439 Compensation and benefits 70 105 19 124 318 Commissions 2 78 — — 80 Loan processing expense 5 25 26 3 59 Other noninterest expense 103 58 44 50 255 Total noninterest expense 180 266 89 177 712 Income before indirect overhead allocations and income taxes 160 173 12 (113 ) 232 Indirect overhead allocation (39 ) (68 ) (20 ) 127 — Provision (benefit) for income taxes 25 22 (2 ) — 45 Net income (loss) $ 96 $ 83 $ (6 ) $ 14 $ 187 Intersegment (expense) revenue $ 1 $ 10 $ 19 $ (30 ) $ — Average balances Loans held-for-sale $ 24 $ 4,172 $ — $ — $ 4,196 Loans with government guarantees — 303 — — 303 Loans held-for-investment (2) 8,417 9 — 29 8,455 Total assets 8,615 5,406 34 3,925 17,980 Deposits 8,892 — 1,883 — 10,775 (1) Includes offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. 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 Provision (benefit) for loan losses 4 4 — (2 ) 6 Net interest income after provision (benefit) for loan losses 234 125 11 14 384 Net gain on loan sales (10 ) 278 — — 268 Loan fees and charges — 67 15 — 82 Loan administration income — (18 ) 39 — 21 Net return on mortgage servicing rights — 22 — — 22 Other noninterest income 31 21 12 13 77 Total noninterest income 21 370 66 13 470 Compensation and benefits 62 100 16 121 299 Commissions — 72 — — 72 Loan processing expense 5 26 22 4 57 Other noninterest expense 87 65 39 24 215 Total noninterest expense 154 263 77 149 643 Income before indirect overhead allocations and income taxes 101 232 — (122 ) 211 Indirect overhead allocation (41 ) (63 ) (23 ) 127 — Provision (benefit) for income taxes 21 59 (8 ) 76 148 Net income (loss) $ 39 $ 110 $ (15 ) $ (71 ) $ 63 Intersegment (expense) 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 offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. |
Holding Company Only Financial
Holding Company Only Financial Statements | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information 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. Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Financial Condition (Dollars in millions) December 31, 2019 2018 (Dollars in millions) Assets Cash and cash equivalents $ 233 $ 201 Investment in subsidiaries (1) 2,031 1,836 Other assets 47 52 Total assets $ 2,311 $ 2,089 Liabilities and Stockholders’ Equity Liabilities Long term debt $ 496 $ 495 Other liabilities 27 24 Total liabilities 523 519 Stockholders’ Equity Common stock 1 1 Additional paid in capital 1,533 1,522 Accumulated other comprehensive loss 1 (47 ) Retained earnings 303 94 Treasury Stock (50 ) — Total stockholders’ equity 1,788 1,570 Total liabilities and stockholders’ equity $ 2,311 $ 2,089 (1) Includes unconsolidated trusts of $7 million for December 31, 2019 and 2018 . Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Operations (Dollars in millions) For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Income Interest $ 4 $ 1 $ — Cash dividends received from subsidiaries 100 — — Total 104 1 — Expenses Interest $ 28 $ 27 $ 25 General and administrative 6 7 9 Total 34 34 34 Net income (loss) before undistributed income of subsidiaries 70 (33 ) (34 ) Equity in undistributed income of subsidiaries 142 212 110 Net income before income taxes 212 179 76 Provision (benefit) for income taxes (6 ) (8 ) 13 Net income 218 187 63 Other comprehensive income loss (1) 48 (31 ) (9 ) Comprehensive income $ 266 $ 156 $ 54 (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, 2019 2018 2017 (Dollars in millions) Net income $ 218 $ 187 $ 63 Adjustments to reconcile net loss to net cash provided by operating activities Equity in undistributed (income) loss of subsidiaries (241 ) (177 ) 47 Dividends received from subsidiaries 104 — — Other (1 ) (15 ) 11 Stock-based compensation 11 10 5 Net cash used in operating activities 91 5 126 Investing Activities Net cash provided by investing activities — — — Financing Activities Accelerated share repurchase (50 ) — — Dividends declared and paid (9 ) — — Net cash used in financing activities (59 ) — — Net increase in cash and cash equivalents 32 5 126 Cash and cash equivalents, beginning of year 201 196 70 Cash and cash equivalents, end of year $ 233 $ 201 $ 196 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
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 2019 and 2018 : 2019 Fourth Third Second First (Dollars in millions, except per share data) Interest income $ 213 $ 203 $ 198 $ 180 Interest expense 61 57 60 54 Net interest income 152 146 138 126 Provision for loan losses — 1 17 — Net interest income after provision for loan losses 152 145 121 126 Net gain on loan sales 101 110 75 49 Loan fees and charges 30 29 24 17 Deposit fees and charges 10 10 10 8 Loan administration income 8 5 6 11 Net return (loss) on the mortgage servicing rights (3 ) (2 ) 5 6 Other noninterest income 16 19 48 18 Noninterest expense 245 238 214 191 Income before income tax 69 78 75 44 Provision for income taxes 11 15 14 8 Net income from continuing operations $ 58 $ 63 $ 61 $ 36 Basic income per share $ 1.01 $ 1.12 $ 1.08 $ 0.64 Diluted income per share $ 1.00 $ 1.11 $ 1.06 $ 0.63 2018 Fourth Third Second First (Dollars in millions, except per share data) Interest income $ 181 $ 183 $ 167 $ 152 Interest expense 29 59 52 46 Net interest income 152 124 115 106 Benefit from loan losses (5 ) (2 ) (1 ) — Net interest income after provision for loan losses 157 126 116 106 Net gain on loan sales 34 43 63 60 Loan fees and charges 20 23 24 20 Deposit fees and charges 6 5 5 5 Loan administration income 8 5 5 5 Net return on the mortgage servicing rights 10 13 9 4 Other noninterest income 20 18 17 17 Noninterest expense 189 173 177 173 Income before income tax 66 60 62 44 Provision for income taxes 12 12 12 9 Net income from continuing operations $ 54 $ 48 $ 50 $ 35 Basic income per share $ 0.94 $ 0.84 $ 0.86 $ 0.61 Diluted income per share $ 0.93 $ 0.83 $ 0.85 $ 0.60 |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash 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. Restricted cash includes cash that the Bank pledges as maintenance margin on centrally cleared derivatives and is included in other assets on the Consolidated Statements of Financial Condition. |
Investment Securities | Investment Securities 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 and recorded in interest income in the Consolidated Statements of Operations. 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 at least a quarterly basis. 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) do not expect to recover the entire amortized cost basis of the security. Investments that have an OTTI are written down through a charge to earnings for the amount representing the credit loss on the security. Gains and losses related to all other factors are recognized in other comprehensive income (loss). |
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 20 - 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 loans, are deferred and recognized over the contractual 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 20 - 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, in accordance with the initial classification of the loans. |
Past Due, Impaired and Modified (Troubled Debt Restructuring) Loans | Past Due, Impaired and Modified (Troubled Debt Restructuring) 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 against interest income and the loan may only return to accrual status when principal and interest become current and are anticipated to be fully collectible. 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 may include a reduction of interest rate, extension of amortization period, principal and/or interest forgiveness or other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Modified loans are classified as nonperforming TDRs if the loan was nonperforming prior to the restructuring, or if the results of a contemporaneous credit evaluation determines that payment is not reasonably assured. 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. Loans are considered impaired if it is probable that payment of all 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 TDRs as interest and principal will not be received in accordance with the original contractual terms of the loan agreement. 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 nonperforming impaired loans is 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 specifically identified (TDR and NPL loans) and for probable losses believed to be inherent in the loan portfolio which are collectively evaluated through a model-based component. Management applies judgment and 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 costs to sell 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 average historical loss rates experienced during an identified look back period applied to outstanding principal balances over an estimated loss emergence period that represents the time period between the date at which the loss is estimated to have been incurred and the ultimate realization of that loss (by a charge-off). We evaluate the appropriateness of the lookback period at least quarterly and consider the recent performance of the portfolio compared to both recent historical periods and prior ten year period. We estimate the loss emergence period using available credit information and trends. In addition to the loss history or peer data, we also perform a qualitative assessment considering factors noted above and use our judgments to make any necessary adjustments. 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 |
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. For further information, see Note 6 - Repossessed Assets and Note 20 - Fair Value Measurements. |
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. The stock is redeemable at par and is carried at cost as no market quotes exist for the stock. |
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 years to seven years . Software expenditures, repair and maintenance costs that are considered general, administrative, or of a maintenance nature are expensed as incurred. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The excess of the cost of an acquisition over the fair value of the net assets acquired consists primarily of goodwill, core deposit intangibles and other identifiable intangible assets. Goodwill is not amortized, but rather tested annually for impairment, or more frequently as events occur or circumstances change that would indicate the fair value is below the carrying amount. The Company may assess qualitative factors to determine whether it is more-likely-than-not the fair value is less than its carrying amount. If the Company concludes based on the qualitative assessment that goodwill may be impaired, a quantitative one-step impairment test would then be applied. An impairment loss would be recognized for any excess of carrying value over fair value of the goodwill. Intangible assets subject to amortization are amortized over the estimated life, using a method that approximates the time the economic benefits are realized by the Company. Intangible assets are reviewed for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. |
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, prepayment speeds, costs to service and other assumptions to determine the fair value of MSRs. 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 20 - 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. |
Revenue from Contract with Customer | Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606), under the 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. Effective January 1, 2018, we have adopted the requirements of ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all related amendments. We have implemented the guidance utilizing the modified retrospective approach which did not have a material impact on the Company's financial position or results of operations. We undertook a process to evaluate all of our significant revenue sources under the new standard. As lease contracts and financial instruments, which include loans and securities, are excluded from the scope of this standard, the majority of our revenue falls outside of the scope of Topic 606. The adoption of this guidance does not result in changes to how revenue is recognized or the timing of recognition from our method prior to adoption. Revenue is recognized when obligations, under the terms of a contract with our customer, are satisfied, which generally occurs when services are performed. Revenue is measured as the amount of consideration we expect to receive in exchange for providing services. The disaggregation of our revenue from contracts with customers is provided below: For the Years Ended December 31, Location of Revenue (1) 2019 2018 (Dollars in millions) Deposit account and other banking income Deposit fees and charges $ 27 $ 16 Interchange fees Deposit fees and charges 11 5 Interchange fees Other noninterest income 2 1 Wealth management Other noninterest income 6 9 Total $ 46 $ 31 (1) Recognized within the Community Banking segment. Deposit account and other banking income - We charge depositors various deposit account service fees including those for outgoing wires, overdrafts, stop payments, and ATM fees. These fees are generated from a depositor’s option to purchase services offered under the contract and are only considered a contract when the depositor exercises their option to purchase these account services. Therefore we deem the term of our contracts with depositors to be day-to-day and do not extend beyond the services already provided. Deposit account and other banking fees are recorded at the point in time we perform the requested service. Interchange income - We collect interchange fee income when debit cards that we have issued to our customers, are used in merchant transactions. Our performance obligation is satisfied and revenue is recognized at the point we initiate the payment of funds from a customer’s account to a merchant account. Merchant fee income - We receive a percentage of merchant fees based upon card transactions processed through point of sale terminals at referred merchant locations. Our performance obligation is satisfied when our referral of a merchant to a payment processing vendor results in an executed agreement between the merchant and the vendor. Merchant fee revenue is recognized as received. Merchant fee income was less than $1 million for the years ended December 31, 2019 and December 31, 2018 . Wealth management revenue - We earn commission income through a revenue share program based on a tiered percentage of total gross commissions generated from the sales of investment and insurance services to Flagstar customers. Commissions are earned and our performance obligation has been satisfied at the point of sale or trade execution. Our portion of earned commissions is calculated, paid and recognized as revenue on a monthly basis. We also receive revenue from portfolio management services. We receive payment for portfolio management services in advance at the beginning of each quarter for services to be performed over the quarter which results an insignificant revenue liability. We recognize this revenue over the quarter on a straight-line basis, as we believe this is the most appropriate method to measure progress towards satisfaction of the performance obligation. |
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 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 gain or loss 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. 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 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. We may 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 the qualitatively throughout the hedge period unless a change in facts and circumstances is identified. 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. 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, until the point it is determined the underlying transaction is probable to not occur, at which point it is reclassified immediately into earnings. We utilize interest rate swaps to manage fair value changes of our fixed-rate FHLB advances and certain AFS securities in a qualifying fair value hedge accounting relationships. Interest rate swaps are valued based on quoted prices for similar assets in an active market with inputs that are observable. 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. These hedges are evaluated for effectiveness using regression analysis at the time they are designated and then qualitatively throughout the hedge period unless a change in facts and circumstances is identified. 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 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 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 17 - Income Taxes. |
Representation and Warranty Reserve | Representation and Warranty Reserve |
Advertising Costs | Advertising Costs |
Stock-based Compensation | Stock-Based Compensation |
Department of Justice Litigation Settlement | Department of Justice Litigation Settlement |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adoption of New Accounting Standards The following ASUs have been adopted which impact our accounting policies and/or have a financial impact: Leases - Effective January 1, 2019, we adopted the requirements of ASU 2016-02, Leases (Topic 842) and all related amendments. The Company elected to apply the practical expedient of forgoing the restatement of comparative periods. In addition, we elected the practical expedients permitted under transition guidance to not reassess leases entered into prior to adoption. As permitted under ASC 842, the Company made an accounting policy election to exempt leases with an initial term of twelve months or less from balance sheet recognition. Instead, short-term leases are expensed over the lease term with no impact to the balance sheet. At December 31, 2019, our inventory of leases included various bank branches, ATM locations and retail home lending offices. Many of our leases contain options to extend or terminate early and we consider these options when evaluating the lease term to determine if they are reasonably certain to be exercised based on all relevant economic and financial factors. Lease rental expense totaled approximately $12 million , $11 million and $9 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. All leases are classified as operating leases based on their terms. The following table reflects information relating to our operating leases: December 31, 2019 (Dollars in millions) Operating Leases (1) Weighted-average remaining lease term (years) 3.7 Weighted-average discount rate 2.82 % Right-of-use asset (2) $ 22 Lease liability (3) $ 23 (1) Lease expense on operating leases includes a de-minimis amount of short-term lease expense and variable lease expense. (2) Recorded in premises and equipment on the Consolidated Statements of Financial Condition. (3) Recorded in other liabilities on the Consolidated Statements of Financial Condition The following table presents our undiscounted cash flows on our operating lease liabilities as of December 31, 2019 and our minimum contractual obligations on our operating leases as of December 31, 2018: December 31, 2019 December 31, 2018 (Dollars in millions) Within one year $ 9 $ 9 After one year and within two years 7 6 After two years and within three years 5 4 After three years and within four years 3 2 After four years and within five years 1 1 After five years 2 3 Total (1) $ 27 $ 25 (1) The difference between the total undiscounted cash payments on operating leases and the lease liability is solely the effect of discounting. We adopted the following accounting standard updates (ASU) during 2019 , none of which had a material impact to our financial statements: Standard Description Effective Date ASU 2019-07 SEC Final Rule Releases: Codification Updates July 26, 2019 ASU 2019-01 Leases (Topic 842): Codification Improvements January 1, 2019 ASU 2018-20 Leases (Topic 842): Narrow-Scope Improvements for Lessors January 1, 2019 ASU 2018-16 Derivatives and hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes January 1, 2019 ASU 2018-11 Leases (Topic 842): Targeted Improvements January 1, 2019 ASU 2018-10 Codification Improvements to Topic 842, Leases January 1, 2019 ASU 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting 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 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities January 1, 2019 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 Accounting Standards Issued But Not Yet Adopted Credit Losses - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), which replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss methodology. 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 will 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 as of January 1, 2020 and will impact our allowance for credit loss held against collectively evaluated loans held for investment along with our unfunded commitment reserve. We do not have any investment securities that will be impacted by the new standard. We plan to record the cumulative effect of adoption as of January 1, 2020 through equity and will elect to phase-in the impact on capital, as allowed by the regulatory agencies . Any future changes to our allowance for credit losses and the reserve for unfunded commitments after January 1, 2020 will be recorded in our provision for credit losses. Our cross-functional implementation team has designed and implemented new credit loss models using an industry leading vendor which measures the probability of default and loss given default to determine expected losses over the life of our loans. We plan to use a reasonable and supportable forecast of two years within our models and revert to historical averages on a straight line basis over 1 year. These assumptions may change over time based on our expectation of future market conditions. We have identified, designed, documented, and have begun operating our internal controls over financial reporting which are primarily focused on our new models, the data utilized by those models including our reasonable and supportable forecast and the governance process to apply the necessary judgment to determine the allowance for credit losses. Based on our current results and economic forecasts as of December 31, 2019, the estimated impact including our reserve for unfunded loan commitments is expected to be a pre-tax increase of approximately 25 to 35 percent. We do not expect any material allowance on held to maturity securities since the majority of this portfolio consists of agency-backed securities that have an immaterial risk of credit loss. 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 upon implementation: Standard Description Effective Date ASU 2019-05 Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief January 1, 2020 ASU 2019-04 Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments January 1, 2020 ASU 2018-19 Codification Improvements to Topic 326, Financial Instruments—Credit Losses January 1, 2020 ASU 2018-18 Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 January 1, 2020 ASU 2018-17 Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities January 1, 2020 ASU 2018-15 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) January 1, 2020 ASU 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 1, 2020 |
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, Basi_3
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Disaggregation of Revenue [Table Text Block] | The disaggregation of our revenue from contracts with customers is provided below: For the Years Ended December 31, Location of Revenue (1) 2019 2018 (Dollars in millions) Deposit account and other banking income Deposit fees and charges $ 27 $ 16 Interchange fees Deposit fees and charges 11 5 Interchange fees Other noninterest income 2 1 Wealth management Other noninterest income 6 9 Total $ 46 $ 31 (1) Recognized within the Community Banking segment. |
Schedule of information related to operating lease | The following table reflects information relating to our operating leases: December 31, 2019 (Dollars in millions) Operating Leases (1) Weighted-average remaining lease term (years) 3.7 Weighted-average discount rate 2.82 % Right-of-use asset (2) $ 22 Lease liability (3) $ 23 (1) Lease expense on operating leases includes a de-minimis amount of short-term lease expense and variable lease expense. (2) Recorded in premises and equipment on the Consolidated Statements of Financial Condition. (3) Recorded in other liabilities on the Consolidated Statements of Financial Condition |
Schedule of Minimum Contractual Lease Obligations | December 31, 2019 December 31, 2018 (Dollars in millions) Within one year $ 9 $ 9 After one year and within two years 7 6 After two years and within three years 5 4 After three years and within four years 3 2 After four years and within five years 1 1 After five years 2 3 Total (1) $ 27 $ 25 |
Schedule of Adoption of New Accounting Standards and Accounting Standards Issued But Not Yet Adopted | We adopted the following accounting standard updates (ASU) during 2019 , none of which had a material impact to our financial statements: Standard Description Effective Date ASU 2019-07 SEC Final Rule Releases: Codification Updates July 26, 2019 ASU 2019-01 Leases (Topic 842): Codification Improvements January 1, 2019 ASU 2018-20 Leases (Topic 842): Narrow-Scope Improvements for Lessors January 1, 2019 ASU 2018-16 Derivatives and hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes January 1, 2019 ASU 2018-11 Leases (Topic 842): Targeted Improvements January 1, 2019 ASU 2018-10 Codification Improvements to Topic 842, Leases January 1, 2019 ASU 2018-07 Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting 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 2017-08 Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities January 1, 2019 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 |
Investment Securities (Tables)
Investment Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Held-to-maturity and Available-for-sale Securities | The following table presents our investment securities: Amortized Cost Gross Unrealized Gross Unrealized Fair Value (Dollars in millions) December 31, 2019 Available-for-sale securities Agency - Commercial $ 948 $ 2 $ (3 ) $ 947 Agency - Residential 1,015 4 (4 ) 1,015 Corporate debt obligations 76 1 — 77 Municipal obligations 31 — — 31 Other MBS 44 1 — 45 Certificates of Deposit 1 1 Total available-for-sale securities (1) $ 2,115 $ 8 $ (7 ) $ 2,116 Held-to-maturity securities Agency - Commercial $ 306 $ — $ (1 ) $ 305 Agency - Residential 292 3 (1 ) 294 Total held-to-maturity securities (1) $ 598 $ 3 $ (2 ) $ 599 December 31, 2018 Available-for-sale securities Agency - Commercial $ 1,413 $ 4 $ (43 ) $ 1,374 Agency - Residential 686 — (24 ) 662 Corporate debt obligations 41 — — 41 Municipal obligations 33 — (1 ) 32 Other MBS 32 — — 32 Certificates of Deposit 1 — — 1 Total available-for-sale securities (1) $ 2,206 $ 4 $ (68 ) $ 2,142 Held-to-maturity securities Agency - Commercial $ 349 $ — $ (13 ) $ 336 Agency - Residential 354 — (9 ) 345 Total held-to-maturity securities (1) $ 703 $ — $ (22 ) $ 681 (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, 2019 or December 31, 2018 . |
Summary of Unrealized Loss Positions on Investment Securities Available-for-Sale | 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, 2019 Available-for-sale securities Agency - Commercial $ 148 17 $ (3 ) $ 303 19 $ — Agency - Residential 266 26 (3 ) 148 14 (1 ) Municipal obligations 8 3 — — — — Held-to-maturity securities Agency - Commercial $ 148 13 $ (1 ) $ 85 6 $ — Agency - Residential 35 7 (1 ) 38 10 — December 31, 2018 Available-for-sale securities Agency - Commercial $ 1,025 74 $ (43 ) $ 1 1 $ — Agency - Residential 647 79 (24 ) 14 5 — Municipal obligations 28 16 (1 ) 1 2 — Corporate debt obligations — — — 7 2 — Held-to-maturity securities Agency - Commercial $ 336 26 $ (13 ) $ — — $ — Agency - Residential 345 60 (9 ) — — — |
Summary of Unrealized Loss Positions on Investment Securities Held-to-Maturity | 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, 2019 Available-for-sale securities Agency - Commercial $ 148 17 $ (3 ) $ 303 19 $ — Agency - Residential 266 26 (3 ) 148 14 (1 ) Municipal obligations 8 3 — — — — Held-to-maturity securities Agency - Commercial $ 148 13 $ (1 ) $ 85 6 $ — Agency - Residential 35 7 (1 ) 38 10 — December 31, 2018 Available-for-sale securities Agency - Commercial $ 1,025 74 $ (43 ) $ 1 1 $ — Agency - Residential 647 79 (24 ) 14 5 — Municipal obligations 28 16 (1 ) 1 2 — Corporate debt obligations — — — 7 2 — Held-to-maturity securities Agency - Commercial $ 336 26 $ (13 ) $ — — $ — Agency - Residential 345 60 (9 ) — — — |
Schedule of Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity | 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, 2019 Due in one year or less $ 3 $ 3 2.12 % $ — $ — — % Due after one year through five years 20 20 4.07 % 10 10 2.48 % Due after five years through 10 years 93 95 4.23 % 9 9 2.29 % Due after 10 years 1,999 1,998 2.41 % 579 580 2.42 % Total $ 2,115 $ 2,116 $ 598 $ 599 |
Loans Held-for-Investment (Tabl
Loans Held-for-Investment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Loans Held-for-Investment and UPB of Loan Sales and Purchases in the Loans Held-for-Investment Portfolio | The following table presents our loans-held-for-investment: December 31, 2019 December 31, 2018 (Dollars in millions) Consumer loans Residential first mortgage $ 3,154 $ 2,999 Home Equity 1,024 731 Other 729 314 Total consumer loans 4,907 4,044 Commercial loans Commercial real estate 2,828 2,152 Commercial and industrial 1,634 1,433 Warehouse lending 2,760 1,459 Total commercial loans 7,222 5,044 Total loans held-for-investment $ 12,129 $ 9,088 The following table presents the UPB of our loan sales and purchases in the loans held-for-investment portfolio: For the Year Ended 2019 2018 2017 (Dollars in millions) Loans Sold (1) Performing loans $ 217 $ 158 $ 102 Nonperforming loans — — 25 Total performing and nonperforming loans sold $ 217 $ 158 $ 127 Net gain associated with loan sales (2) $ 2 $ 2 $ 2 Loans Purchased Residential first mortgage loans — 3 8 HELOC 249 — 250 Other consumer 51 34 — Total loans purchased $ 300 $ 37 $ 258 Premium associated with loans purchased $ 11 $ — $ 9 (1) Upon a change in our intent, the loans were transferred to LHFS and subsequently sold. (2) Recorded in net gain on loan sales on Consolidated Statement of Operations. |
Schedule of Changes in ALLL and Method of Evaluation by Class of Loan | 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, 2019 Beginning balance ALLL $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 Charge-offs (2) (3 ) (2 ) (7 ) — (31 ) — (43 ) Recoveries 1 2 — — 1 — 4 Provision (benefit) (14 ) (1 ) 10 (10 ) 34 (1 ) 18 Ending balance ALLL $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 Year Ended December 31, 2018 Beginning balance ALLL $ 47 $ 22 $ 1 $ 45 $ 19 $ 6 $ 140 Charge-offs (2) (4 ) (2 ) (2 ) — — — (8 ) Recoveries 2 1 1 — — — 4 Provision (benefit) (7 ) (6 ) 3 3 (1 ) — (8 ) Ending balance ALLL $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 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 (1) Includes allowance and charge-offs related to loans with government guarantees. (2) Includes charge-offs of zero , zero and $1 million related to the transfer and subsequent sale of loans during the years ended December 31, 2019 , 2018 and 2017 , respectively. Also includes charge-offs related to loans with government guarantees of $2 million , $2 million , and $4 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. 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, 2019 Loans held-for-investment (2) Individually evaluated $ 32 $ 20 $ 1 $ — $ — $ — $ 53 Collectively evaluated 3,113 1,001 728 2,828 1,634 2,760 12,064 Total loans $ 3,145 $ 1,021 $ 729 $ 2,828 $ 1,634 $ 2,760 $ 12,117 Allowance for loan losses (2) Individually evaluated $ 5 $ 7 $ 1 $ — $ — $ — $ 13 Collectively evaluated 17 7 5 38 22 5 94 Total allowance for loan losses $ 22 $ 14 $ 6 $ 38 $ 22 $ 5 $ 107 December 31, 2018 Loans held-for-investment (2) Individually evaluated $ 32 $ 23 $ — $ — $ — $ — $ 55 Collectively evaluated 2,959 706 314 2,152 1,433 1,459 9,023 Total loans $ 2,991 $ 729 $ 314 $ 2,152 $ 1,433 $ 1,459 $ 9,078 Allowance for loan losses (2) Individually evaluated $ 4 $ 7 $ — $ — $ — $ — $ 11 Collectively evaluated 34 8 3 48 18 6 117 Total allowance for loan losses $ 38 $ 15 $ 3 $ 48 $ 18 $ 6 $ 128 (1) Includes allowance related to loans with government guarantees. (2) Excludes loans carried under the fair value option. |
Schedule of Aging Analysis of Past Due and Current Loans | The following table sets forth the LHFI aging analysis of past due and current loans (for further information on our policy for 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, 2019 Consumer loans Residential first mortgage $ 5 $ 4 $ 21 $ 30 $ 3,124 $ 3,154 Home equity 1 — 4 5 1,019 1,024 Other 3 1 1 5 724 729 Total consumer loans 9 5 26 40 4,867 4,907 Commercial loans Commercial real estate — — — — 2,828 2,828 Commercial and industrial — — — — 1,634 1,634 Warehouse lending — — — — 2,760 2,760 Total commercial loans — — — — 7,222 7,222 Total loans (2) $ 9 $ 5 $ 26 $ 40 $ 12,089 $ 12,129 December 31, 2018 Consumer loans Residential first mortgage $ 4 $ 2 $ 19 $ 25 $ 2,974 $ 2,999 Home equity 1 — 3 4 727 731 Other — — — — 314 314 Total consumer loans 5 2 22 29 4,015 4,044 Commercial loans Commercial real estate — — — — 2,152 2,152 Commercial and industrial — — — — 1,433 1,433 Warehouse lending — — — — 1,459 1,459 Total commercial loans — — — — 5,044 5,044 Total loans (2) $ 5 $ 2 $ 22 $ 29 $ 9,059 $ 9,088 (1) Includes less than 90 days past due performing loans which are placed on non-accrual. Interest revenue is not being recognized on these loans. (2) Includes $4 million and $3 million of past due loans accounted for under the fair value option at December 31, 2019 and 2018 , respectively. |
Summary of TDRs by Type and Performing Status and Newly Modified TDRs | The following table provides a summary of TDRs by type and performing status: TDRs Performing Nonperforming Total (Dollars in millions) December 31, 2019 Consumer loans Residential first mortgage $ 20 $ 8 $ 28 Home equity 18 2 20 Total TDRs (1)(2) $ 38 $ 10 $ 48 December 31, 2018 Consumer loans Residential first mortgage $ 22 $ 8 $ 30 Home Equity 22 2 24 Total TDRs (1)(2) $ 44 $ 10 $ 54 (1) The ALLL on TDR loans totaled $8 million and $10 million at December 31, 2019 and 2018 , respectively. (2) Includes $2 million and $3 million of TDR loans accounted for under the fair value option at December 31, 2019 and 2018 , 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, 2019 Residential first mortgages 8 $ 1 $ 1 $ — Home equity (2)(3) 6 — — — Total TDR loans 14 $ 1 $ 1 $ — Year Ended December 31, 2018 Residential first mortgages 14 $ 3 $ 3 $ — Home equity (2)(3) 17 1 1 — Total TDR loans 31 $ 4 $ 4 $ — 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 ) (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. |
Schedule of Impaired Loans | The following table presents individually evaluated impaired loans and the associated allowance: December 31, 2019 December 31, 2018 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 $ 16 $ 20 $ — $ 13 $ 16 $ — Home equity 1 4 — 1 4 — Other consumer — 1 — — — — Total loans with no related allowance recorded $ 17 $ 25 $ — $ 14 $ 20 $ — With an allowance recorded Consumer loans Residential first mortgage $ 16 $ 16 $ 3 $ 19 $ 20 $ 4 Home equity 19 19 7 22 23 7 Other consumer 1 1 1 — — — Total loans with an allowance recorded $ 36 $ 36 $ 11 $ 41 $ 43 $ 11 Total impaired loans Consumer loans Residential first mortgage $ 32 $ 36 $ 3 $ 32 $ 36 $ 4 Home equity 20 23 7 23 27 7 Other consumer 1 2 1 — — — Total impaired loans $ 53 $ 61 $ 11 $ 55 $ 63 $ 11 The following table presents average impaired loans and the interest income recognized: For the Years Ended December 31, 2019 2018 2017 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 $ 36 $ — $ 33 $ 1 $ 38 $ 1 Home equity 17 — 25 2 28 1 Other consumer 2 — — — — — Commercial loans Commercial and industrial 15 — 2 — — — Total impaired loans $ 70 $ — $ 60 $ 3 $ 66 $ 2 |
Schedule of Loan Credit Quality Indicators | The combination of the borrower and collateral risk ratings results in the final rating for the borrowing relationship. December 31, 2019 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 3,107 $ 27 $ — $ 20 $ 3,154 Home equity 1,002 18 — 4 1,024 Other Consumer 727 1 — 1 729 Total Consumer Loans $ 4,836 $ 46 $ — $ 25 $ 4,907 Commercial Loans Commercial Real Estate $ 2,794 $ 24 $ 5 $ 5 $ 2,828 Commercial and Industrial 1,533 72 24 5 1,634 Warehouse 2,556 189 15 — 2,760 Total Commercial Loans $ 6,883 $ 285 $ 44 $ 10 $ 7,222 December 31, 2018 Pass Watch Special Mention Substandard Total Loans (Dollars in millions) Consumer Loans Residential First Mortgage $ 2,952 $ 28 $ — $ 19 $ 2,999 Home equity 705 23 — 3 731 Other Consumer 314 — — — 314 Total Consumer Loans $ 3,971 $ 51 $ — $ 22 $ 4,044 Commercial Loans Commercial Real Estate $ 2,132 $ 14 $ 5 $ 1 $ 2,152 Commercial and Industrial 1,351 53 29 — 1,433 Warehouse 1,324 120 15 — 1,459 Total Commercial Loans $ 4,807 $ 187 $ 49 $ 1 $ 5,044 |
Repossessed Assets (Tables)
Repossessed Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Repossessed Assets [Abstract] | |
Summary of Repossessed Assets | Repossessed assets include the following: December 31, 2019 2018 (Dollars in millions) One-to-four family properties $ 6 $ 5 Commercial properties 4 2 Total repossessed assets $ 10 $ 7 |
Activity in Repossessed Assets | The following schedule provides the activity for repossessed assets: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Beginning balance $ 7 $ 8 $ 14 Additions, net 12 10 18 Disposals (4 ) (8 ) (14 ) Net (write down) on disposal (5 ) (3 ) (9 ) Transfers out — — (1 ) Ending balance $ 10 $ 7 $ 8 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Premises and Equipment and Estimated Useful Lives | The following presents our premises and equipment balances and estimated useful lives: Estimated Useful Lives December 31, 2019 2018 (Dollars in millions) Land N/A $ 73 $ 74 Computer hardware and software 3 - 7 years 372 329 Office buildings and improvements 15 - 31.5 years 191 185 Furniture, fixtures and equipment 5 - 7 years 68 57 Leased equipment 3 - 10 years 36 40 Leasehold improvements 5-10 years 9 10 Fixed assets in progress (1) N/A 40 37 Right-of-use asset N/A 22 — Total 811 732 Less accumulated depreciation (395 ) (342 ) Premises and equipment, net $ 416 $ 390 (1) Consists primarily of internally developed software and software upgrades which have not yet been placed in service. |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Transfers and Servicing [Abstract] | |
Schedule of Changes in the Fair Value of Residential First Mortgage MSRs | Changes in the fair value of residential first mortgage MSRs were as follows: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Balance at beginning of period $ 290 $ 291 $ 335 Additions from loans sold with servicing retained 223 356 288 Reductions from sales (57 ) (339 ) (310 ) Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (1) (89 ) (20 ) (31 ) Changes in estimates of fair value due to interest rate risk (1) (2) (76 ) 2 9 Fair value of MSRs at end of period $ 291 $ 290 $ 291 (1) Changes in fair value are included within net return on mortgage servicing rights on the Consolidated Statements of Operations. (2) Represents estimated MSR value change resulting primarily from market-driven changes. |
Summary of Adverse Changes to Weighted-Average Assumptions on the Fair Value of Servicing Rights | 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 significant assumptions used in valuing these assets: December 31, 2019 December 31, 2018 Fair value resulting from Fair value resulting from Actual 10% adverse change 20% adverse change Actual 10% adverse change 20% adverse change (Dollars in millions) Option adjusted spread 5.34 % $ 284 $ 280 5.42 % $ 284 $ 280 Constant prepayment rate 10.59 % 271 257 9.57 % 278 268 Weighted average cost to service per loan $ 84.41 285 282 $ 85.57 286 283 |
Summary of Income and Fees | The following table summarizes income and fees associated with owned mortgage servicing rights: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Net return (loss) on mortgage servicing rights Servicing fees, ancillary income and late fees (1) $ 96 $ 65 $ 60 Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other (89 ) (20 ) (31 ) Changes in fair value (76 ) 2 9 Gain (loss) on MSR derivatives (2) 76 (5 ) (8 ) Net transaction costs (1 ) (6 ) (8 ) Total return (loss) included in net return on mortgage servicing rights $ 6 $ 36 $ 22 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on a cash basis. (2) Changes in the derivatives utilized as economic hedges to offset changes in fair value of the MSRs. The following table summarizes income and fees associated with our mortgage loans subserviced for others: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Loan administration income on mortgage loans subserviced Servicing fees, ancillary income and late fees (1) $ 106 $ 54 $ 35 Charges on subserviced custodial balances (2) (67 ) (29 ) (11 ) Other servicing charges (9 ) (2 ) (3 ) Total income on mortgage loans subserviced, included in loan administration $ 30 $ 23 $ 21 (1) Servicing fees are recorded on the accrual basis. Ancillary income and late fees are recorded on cash basis. (2) Charges on subserviced custodial balances represent interest due to MSR owner |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Financial Instruments | The following tables present the notional amount, estimated fair value and maturity of our derivative financial instruments: December 31, 2019 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in fair value hedge relationships: Assets Interest rate swaps on FHLB advances $ 200 $ — 2020 Interest rate swaps on AFS securities 100 — 2022 Total derivative assets $ 300 $ — Derivatives not designated as hedging instruments: Assets Futures $ 550 $ — 2020-2023 Mortgage-backed securities forwards 1,918 2 2020 Rate lock commitments 3,870 34 2020 Interest rate swaps 799 26 2020-2029 Total derivative assets $ 7,137 $ 62 Liabilities Mortgage-backed securities forwards 5,749 9 2020 Rate lock commitments 229 1 2020 Interest rate swaps and swaptions 1,662 8 2020-2050 Total derivative liabilities $ 7,640 $ 18 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. (2) Derivative assets and liabilities are included in other assets and other liabilities on the Consolidated Statements of Financial Condition, respectively. December 31, 2018 (1) Notional Amount Fair Value (2) Expiration Dates (Dollars in millions) Derivatives in fair value hedge relationships: Assets Interest rate swaps on CDs $ 20 $ — 2019 Liabilities Interest rate swaps on CDs $ 10 $ — 2019 Derivatives not designated as hedging instruments: Assets Futures $ 248 $ — 2019-2023 Mortgage-backed securities forwards 362 4 2019 Rate lock commitments 2,221 20 2019 Interest rate swaps and swaptions 1,662 23 2019-2049 Total derivative assets $ 4,493 $ 47 Liabilities Futures $ 1,513 $ 1 2019-2023 Mortgage-backed securities forwards 4,625 31 2019 Rate lock commitments 45 — 2019 Interest rate swaps 755 7 2019-2028 Total derivative liabilities $ 6,938 $ 39 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. (2) Derivative assets and liabilities are included in other assets and other liabilities on the Consolidated Statements of Financial Condition, respectively. |
Schedule of Derivatives Subject to a 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, 2019 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 2 $ — $ 2 $ — $ — Interest rate swaps 26 — 26 — — Total derivative assets $ 28 $ — $ 28 $ — $ — Liabilities Mortgage-backed securities forwards 9 — 9 — 24 Interest rate swaps and swaptions (1) 8 — 8 — 39 Total derivative liabilities $ 17 $ — $ 17 $ — $ 63 December 31, 2018 Derivatives not designated as hedging instruments: Assets Mortgage-backed securities forwards $ 4 $ — $ 4 $ — $ — Interest rate swaps and swaptions (1) 23 — 23 — 14 Total derivative assets $ 27 $ — $ 27 $ — $ 14 Liabilities Futures $ 1 $ — $ 1 $ — $ 1 Mortgage-backed securities forwards 31 — 31 — 29 Interest rate swaps (1) 7 — 7 — 23 Total derivative liabilities $ 39 $ — $ 39 $ — $ 53 (1) Variation margin pledged to or received from a Central Counterparty Clearing House to cover the prior days fair value of open positions, is considered settlement of the derivative position for accounting purposes. |
Schedule of Net Gain (Loss) Recognized in Income on Derivative Instruments | The following table presents the net gain recognized on designated instruments, net of the impact of offsetting positions: Amount Recorded in Net Interest Income (1) For the Years Ended December 31, 2019 2018 (2) (Dollars in millions) Gain on cash flow hedging relationships in interest contracts Amount of gain reclassified from AOCI into income $ — $ 30 Total gain on hedges $ — $ 30 (1) The income impact from fair value hedging relationships for the years ending December 31, 2019 was de minimis and zero at December 31, 2018 . (2) Includes $29 million of hedging gains reclassified into net interest income in conjunction with the payoff of long-term FHLB advances. 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, 2019 2018 2017 (Dollars in millions) Derivatives not designated as hedging instruments: Location of Gain (Loss) Futures Net loss on mortgage servicing rights $ (2 ) $ (4 ) $ (1 ) Interest rate swaps and swaptions Net gain (loss) on mortgage servicing rights 57 1 (11 ) Mortgage-backed securities forwards Net gain (loss) on mortgage servicing rights 21 (2 ) 4 Rate lock commitments and forward agency and loan sales Net gain (loss) on loan sales 35 (31 ) (34 ) Forward commitments Other noninterest income 2 — — Interest rate swaps (1) Other noninterest income 5 3 2 Total derivative (loss) gain $ 118 $ (33 ) $ (40 ) (1) Includes customer-initiated commercial interest rate swaps. |
Deposit Accounts (Tables)
Deposit Accounts (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deposits [Abstract] | |
Summary of Deposit Accounts | The deposit accounts are as follows: December 31, 2019 2018 (Dollars in millions) Retail deposits Branch retail deposits Demand deposit accounts $ 1,318 $ 1,297 Savings accounts 3,030 2,812 Money market demand accounts 495 628 Certificates of deposit/CDARS 2,353 2,387 Total branch retail deposits 7,196 7,124 Commercial deposits (1) Demand deposit accounts 1,438 1,243 Savings accounts 342 314 Money market demand accounts 188 173 Total commercial retail deposits 1,968 1,730 Total retail deposits 9,164 8,854 Government deposits Demand deposit accounts 360 326 Savings accounts 495 567 Certificates of deposit/CDARS 358 309 Total government deposits (2) 1,213 1,202 Wholesale deposits 633 583 Custodial deposits (3) 4,136 1,741 Total deposits $ 15,146 $ 12,380 (1) Includes deposits from commercial and business banking customers. (2) Government deposits include funds from municipalities and schools. (3) These accounts represent a portion of the investor custodial accounts and escrows controlled by us in connection with loans serviced or subserviced for others and that have been placed on deposit with the Bank. |
Scheduled Maturities for Certificates of Deposit | The following indicates the scheduled maturities for certificates of deposit with a minimum denomination of $250,000 : December 31, 2019 2018 (Dollars in millions) Three months or less $ 223 $ 251 Over three months to six months 238 165 Over six months to twelve months 278 229 One to two years 101 139 Thereafter 35 33 Total $ 875 $ 817 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Breakdown of FHLB Advances and Other Borrowings Outstanding | The following is a breakdown of our FHLB advances and other borrowings outstanding: December 31, 2019 December 31, 2018 Amount Rate Amount Rate (Dollars in millions) Short-term fixed rate term advances $ 3,695 1.61 % $ 2,993 2.52 % Other short-term borrowings 470 1.64 % 251 2.87 % Total short-term Federal Home Loan Bank advances and other borrowings 4,165 3,244 Long-term fixed rate advances (1) 650 1.45 % 150 1.53 % Total long-term Federal Home Loan Bank advances 650 150 Total Federal Home Loan Bank advances and other borrowings $ 4,815 $ 3,394 (1) Includes the current portion of fixed rate advances of $0 million and $50 million at December 31, 2019 and December 31, 2018 , respectively. |
Detailed Information on FHLB Advances and Other Borrowings | The following table contains detailed information on our FHLB advances and other borrowings: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Maximum outstanding at any month end $ 5,005 $ 5,740 $ 5,665 Average outstanding balance 3,064 4,713 4,590 Average remaining borrowing capacity 4,194 2,089 1,195 Weighted average interest rate 1.90 % 1.96 % 1.30 % |
Maturity Dates of FHLB Advances and Other Borrowings | The following table outlines the maturity dates of our FHLB advances and other borrowings: December 31, 2019 (Dollars in millions) 2020 $ 4,165 2021 — 2022 — 2023 250 Thereafter 400 Total $ 4,815 |
Summary of Long-Term Debt, Net of Debt Issuance Costs | The following table presents long-term debt, net of debt issuance costs: December 31, 2019 December 31, 2018 Amount Interest Rate Amount Interest Rate (Dollars in millions) Senior Notes Senior notes, matures 2021 $ 249 6.125 % $ 248 6.125% Trust Preferred Securities Floating Three Month LIBOR Plus: Plus 3.25%, matures 2032 $ 26 5.20 % $ 26 6.07 % Plus 3.25%, matures 2033 $ 26 5.24 % $ 26 5.69 % Plus 3.25%, matures 2033 $ 26 5.21 % $ 26 6.05 % Plus 2.00%, matures 2035 $ 26 3.99 % $ 26 4.44 % Plus 2.00%, matures 2035 $ 26 3.99 % $ 26 4.44 % Plus 1.75%, matures 2035 $ 51 3.64 % $ 51 4.54 % Plus 1.50%, matures 2035 $ 25 3.49 % $ 25 3.94 % Plus 1.45%, matures 2037 $ 25 3.34 % $ 25 4.24 % Plus 2.50%, matures 2037 $ 16 4.39 % $ 16 5.29 % Total Trust Preferred Securities 247 247 Total other long-term debt $ 496 $ 495 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Components in Accumulated Other Comprehensive Income (Loss) | The following table sets forth the components in accumulated other comprehensive income (loss): For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Investment Securities Beginning balance $ (47 ) $ (18 ) $ (8 ) Unrealized gain (loss) 57 (30 ) (19 ) Less: Tax provision (benefit) 14 (7 ) (7 ) Net unrealized gain (loss) 43 (23 ) (12 ) Reclassifications out of AOCI (1) 6 (1 ) 3 Less: Tax provision 1 — 1 Net unrealized gain (loss) reclassified out of AOCI 5 (1 ) 2 Reclassification of certain income tax effects (2) — (5 ) — Other comprehensive income (loss), net of tax 48 (29 ) (10 ) Ending balance $ 1 $ (47 ) $ (18 ) Cash Flow Hedges Beginning balance $ — $ 2 $ 1 Unrealized gain — 27 5 Less: Tax provision — 7 1 Net unrealized gain — 20 4 Reclassifications out of AOCI (3) — (30 ) (5 ) Less: Tax benefit — (8 ) (2 ) Net unrealized loss reclassified out of AOCI — (22 ) (3 ) Other comprehensive income (loss), net of tax — (2 ) 1 Ending balance $ — $ — $ 2 (1) Reclassifications are reported in other noninterest income in the Consolidated Statement of Operations. (2) Income tax effects of the Tax Cuts and Jobs Act are reclassified from AOCI to retained earnings due to early adoption of ASU 2018-02. (3) |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share of Common Stock | The following table sets forth the computation of basic and diluted earnings per share of common stock: For the Years Ended December 31, 2019 2018 2017 (In millions, except share data) Net income applicable to common stockholders $ 218 $ 187 $ 63 Weighted Average Shares Weighted average common shares outstanding 56,584,238 57,520,289 57,093,868 Effect of dilutive securities May Investor Warrants — — 12,287 Stock-based awards 654,740 802,661 1,072,188 Weighted average diluted common shares 57,238,978 58,322,950 58,178,343 Earnings per common share Basic earnings per common share $ 3.85 $ 3.26 $ 1.11 Effect of dilutive securities May Investor Warrants — — — Stock-based awards (0.05 ) (0.05 ) (0.02 ) Diluted earnings per common share $ 3.80 $ 3.21 $ 1.09 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | The following table summarizes stock option activity: For the Years Ended December 31, 2019 2018 2017 Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Number of Shares Weighted Average Exercise Price Options outstanding, beginning of year 36,093 $ 80.00 40,718 $ 80.00 45,791 $ 80.00 Options canceled, forfeited and expired (1,894 ) 80.00 (4,625 ) 80.00 (5,073 ) 80.00 Options outstanding, end of year 34,199 $ 80.00 36,093 $ 80.00 40,718 $ 80.00 Options vested or expected to vest, end of year 34,199 $ 80.00 36,093 $ 80.00 40,718 $ 80.00 Options exercisable, end of year 16,968 $ 80.00 17,991 $ 80.00 20,286 $ 80.00 (1) All outstanding options at December 31, 2019 are vested or expected to vest and have a weighted average remaining contractual life of 0.1 |
Summary of Restricted Stock Activity | The following table summarizes restricted stock activity: For the Years Ended December 31, 2019 2018 2017 Number of Shares Weighted Average Grant-Date Fair Value per Share Number of Shares Weighted Average Grant-Date Fair Value per Share Number of Shares Weighted Average Grant-Date Fair Value per Share Restricted Stock and Restricted Stock Units Non-vested balance at beginning of period 1,620,568 $ 27.27 1,290,450 $ 20.52 1,461,910 $ 17.68 Granted 338,737 32.11 875,352 34.32 357,058 28.06 Vested (379,936 ) 26.98 (401,379 ) 23.04 (385,454 ) 17.36 Canceled and forfeited (180,242 ) 25.66 (143,855 ) 21.46 (143,064 ) 18.89 Non-vested balance at end of period 1,399,127 $ 28.72 1,620,568 $ 27.27 1,290,450 $ 20.52 |
Income Taxes (Tables)
Income Taxes (Tables) - Federal | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Income Tax Disclosure | |
Components of the Provision (Benefit) for Income Taxes | Components of the provision for income taxes consist of the following: For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Current Federal $ 17 $ — $ 2 State 6 1 — Total current income tax expense 23 1 2 Deferred Federal 39 47 66 Federal impact of tax reform — — 80 State (14 ) (3 ) — Total deferred income tax expense 25 44 146 Total income tax expense $ 48 $ 45 $ 148 |
Summary of Differences Between the Effective Tax Rate and the Statutory Federal Tax Rate | 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, 2019 2018 2017 (Dollars in millions) Provision at statutory federal income tax rate (1) $ 56 $ 49 $ 74 (Decreases) increases resulting from: Bank owned life insurance (2 ) (2 ) (3 ) State income tax (benefit), net of federal income tax effect (net of valuation allowance release) (6 ) (2 ) — Low income housing tax losses (1 ) (1 ) Tax reform — — 80 Other 1 1 (3 ) Provision for income taxes $ 48 $ 45 $ 148 Effective tax provision rate 18.1 % 19.4 % 70.1 % (1) The statutory federal income tax rate was 21 percent for the years ended December 31, 2019 and December 31, 2018 and 35 percent for the year ended December 31, 2017 |
Temporary Differences and Carryforwards Giving Rise to DTAs and Liabilities | Temporary differences and carry forwards that give rise to DTAs and liabilities are comprised of the following: December 31, 2019 2018 (Dollars in millions) Deferred tax assets Net operating loss carryforwards (Federal and State) $ 43 $ 58 Allowance for loan losses 26 30 Accrued compensation 12 10 Litigation settlement 9 14 Lease liability 6 — Contingent consideration 4 3 General business credits — 7 General business reserves 2 10 Other 11 11 Total $ 113 $ 143 Valuation allowance (5 ) (14 ) Total net $ 108 $ 129 Deferred tax liabilities Mark-to-market adjustments $ (12 ) $ (11 ) Premises and equipment (7 ) (8 ) State and local taxes (7 ) (3 ) Commercial lease financing (5 ) (4 ) Mortgage loan servicing rights (5 ) — Right of use asset (6 ) — Total $ (42 ) $ (26 ) Net deferred tax asset $ 66 $ 103 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Banking and Thrift [Abstract] | |
Regulatory Capital Ratios | 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, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,720 7.57 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) 1,480 9.32 % 715 4.5 % 1,033 6.5 % Tier 1 capital (to RWA) 1,720 10.83 % 953 6.0 % 1,271 8.0 % Total capital (to RWA) 1,830 11.52 % 1,271 8.0 % 1,589 10.0 % December 31, 2018 Tier 1 capital (to adjusted avg. total assets) $ 1,505 8.29 % $ 726 4.0 % $ 908 5.0 % Common equity Tier 1 capital (to RWA) 1,265 10.54 % 540 4.5 % 780 6.5 % Tier 1 capital (to RWA) 1,505 12.54 % 720 6.0 % 960 8.0 % Total capital (to RWA) 1,637 13.63 % 960 8.0 % 1,201 10.0 % 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, 2019 Tier 1 capital (to adjusted avg. total assets) $ 1,752 7.71 % $ 909 4.0 % $ 1,136 5.0 % Common equity Tier 1 capital (to RWA) 1,752 11.04 % 714 4.5 % 1,032 6.5 % Tier 1 capital (to RWA) 1,752 11.04 % 952 6.0 % 1,270 8.0 % Total capital (to RWA) 1,862 11.73 % 1,270 8.0 % 1,587 10.0 % December 31, 2018 Tier 1 capital (to adjusted avg. total assets) $ 1,574 8.67 % $ 726 4.0 % $ 908 5.0 % Common equity Tier 1 capital (to RWA) 1,574 13.12 % 540 4.5 % 780 6.5 % Tier 1 capital (to RWA) 1,574 13.12 % 720 6.0 % 960 8.0 % Total capital (to RWA) 1,705 14.21 % 960 8.0 % 1,200 10.0 % |
Legal Proceedings, Contingenc_2
Legal Proceedings, Contingencies and Commitments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of the Contractual Amount of Significant Commitments | The following table is a summary of the contractual amount of significant commitments: December 31, 2019 2018 (Dollars in millions) Commitments to extend credit Mortgage loan commitments including interest-rate locks $ 4,099 $ 2,293 Warehouse loan commitments 1,944 2,334 Commercial and industrial commitments 1,107 918 Other commercial commitments 2,015 1,260 HELOC commitments 558 429 Other consumer commitments 175 108 Standby and commercial letters of credit 82 63 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial Instruments Carried at Fair Value | 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, 2019 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 947 $ — $ 947 Agency - Residential — 1,015 — 1,015 Municipal obligations — 31 — 31 Corporate debt obligations — 77 — 77 Other MBS — 45 — 45 Certificate of Deposits — 1 — 1 Loans held-for-sale Residential first mortgage loans — 5,219 — 5,219 Commercial Loan — — — — Loans held-for-investment Residential first mortgage loans — 10 — 10 Home equity — — 2 2 Mortgage servicing rights — — 291 291 Derivative assets Rate lock commitments (fallout-adjusted) — — 34 34 Mortgage-backed securities forwards — 2 — 2 Interest rate swaps and swaptions — 26 — 26 Total assets at fair value $ — $ 7,373 $ 327 $ 7,700 Derivative liabilities Rate lock commitments (fallout-adjusted) $ — $ — $ (1 ) $ (1 ) Futures — — — — Mortgage-backed securities forwards — (9 ) — (9 ) Interest rate swaps and swaptions — (8 ) — (8 ) DOJ litigation settlement — — (35 ) (35 ) Contingent consideration — — (10 ) (10 ) Total liabilities at fair value $ — $ (17 ) $ (46 ) $ (63 ) December 31, 2018 Level 1 Level 2 Level 3 Total Fair Value (Dollars in millions) Investment securities available-for-sale Agency - Commercial $ — $ 1,374 $ — $ 1,374 Agency - Residential — 662 — 662 Municipal obligations — 32 — 32 Corporate debt obligations — 42 — 42 Other MBS — 32 — 32 Loans held-for-sale Residential first mortgage loans — 3,732 — 3,732 Loans held-for-investment Residential first mortgage loans — 8 — 8 Home equity — — 2 2 Mortgage servicing rights — — 290 290 Derivative assets Rate lock commitments (fallout-adjusted) — — 20 20 Mortgage-backed securities forwards — 4 — 4 Interest rate swaps and swaptions — 23 — 23 Total assets at fair value $ — $ 5,909 $ 312 $ 6,221 Derivative liabilities Futures $ — $ (1 ) $ — $ (1 ) Mortgage-backed securities forwards — (31 ) — (31 ) Interest rate swaps — (7 ) — (7 ) DOJ litigation settlement — — (60 ) (60 ) Contingent consideration — — (6 ) (6 ) Total liabilities at fair value $ — $ (39 ) $ (66 ) $ (105 ) |
Roll Forward of Financial Instruments | 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 Total Gains / Purchases / Originations Sales Settlement Transfers In (Out) Balance at End of Year (Dollars in millions) Year Ended December 31, 2019 Assets Loans held-for-investment Home equity $ 2 $ — $ — $ — $ — $ — $ 2 Mortgage servicing rights (1) 290 (165 ) 223 (57 ) — — 291 Rate lock commitments (net) (1)(2) 20 86 326 — — (398 ) 34 Totals $ 312 $ (79 ) $ 549 $ (57 ) $ — $ (398 ) $ 327 Liabilities DOJ litigation settlement $ (60 ) $ 25 $ — $ — $ — $ — $ (35 ) Contingent consideration (6 ) (7 ) — — 3 — (10 ) Totals $ (66 ) $ 18 $ — $ — $ 3 $ — $ (45 ) Year Ended December 31, 2018 Assets Loans held-for-investment Home equity $ 4 $ — $ — $ — $ (2 ) $ — $ 2 Mortgage servicing rights (1) 291 (18 ) 356 (339 ) — — 290 Rate lock commitments (net) (1)(2) 24 (34 ) 235 — — (205 ) 20 Totals $ 319 $ (52 ) $ 591 $ (339 ) $ (2 ) $ (205 ) $ 312 Liabilities DOJ litigation settlement $ (60 ) $ — $ — $ — $ — $ — $ (60 ) Contingent consideration (25 ) 13 — — 6 — (6 ) Totals $ (85 ) $ 13 $ — $ — $ 6 $ — $ (66 ) Year 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 (1) 335 $ (22 ) 288 (310 ) 291 Rate lock commitments (net) (1)(2) 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 ) (1) 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 do not reflect the effect of our risk management activities related to such Level 3 instruments. (2) 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. |
Quantitative Information about Recurring Level 3 Fair Value Financial 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, 2019 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% -10.8% (9.0%) (1) Mortgage servicing rights $ 291 Discounted cash flows Option adjusted spread 2.4% - 20.4% (5.3%) (1) Rate lock commitments (net) $ 34 Consensus pricing Origination pull-through rate 80.0% - 87.2% (81.5%) (1) Liabilities DOJ litigation settlement $ (35 ) Discounted cash flows See description below See description below Contingent consideration $ (10 ) Discounted cash flows See description below See description below (2) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) (Dollars in millions) December 31, 2018 Assets Loans held-for-investment Home equity $ 2 Discounted cash flows Discount rate 7.2% - 10.8% (9.0%) (1) Mortgage servicing rights $ 290 Discounted cash flows Option adjusted spread 2.1% - 25.9% (5.4%) (1) Rate lock commitments (net) $ 20 Consensus pricing Origination pull-through rate 75.0% - 87.2% (76.8%) (1) Liabilities DOJ litigation settlement $ (60 ) Discounted cash flows See description below See description below Contingent consideration $ (6 ) Discounted cash flows See description below See description below (2) (1) Unobservable inputs were weighted by their relative fair value of the instruments. (2) Unobservable inputs were not weighted as only one instrument exists. |
Assets Measured 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, 2019 Loans held-for-sale (2) $ 6 $ 6 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 14 — 14 (5 ) Repossessed assets (3) 10 — 10 (3 ) Totals $ 30 $ 6 $ 24 $ (9 ) December 31, 2018 Loans held-for-sale (2) $ 5 $ 5 $ — $ (1 ) Impaired loans held-for-investment (2) Residential first mortgage loans 12 — 12 (4 ) Repossessed assets (3) 7 — 7 (3 ) Totals $ 24 $ 5 $ 19 $ (8 ) (1) The fair values are determined at various dates during the years ended December 31, 2019 and 2018 , respectively. (2) Gains/(losses) reflect fair value adjustments on assets for which we did not elect the fair value option. (3) |
Quantitative Information about Nonrecurring Level 3 Fair Value Financial Instruments | 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, 2019 Impaired loans held-for-investment Residential first mortgage loans $ 14 Fair value of collateral Loss severity discount 25% - 30% (25.9%) (1) Repossessed assets $ 10 Fair value of collateral Loss severity discount 0% - 100% (17.1%) (1) December 31, 2018 Impaired loans held-for-investment Residential first mortgage loans $ 12 Fair value of collateral Loss severity discount 25% - 30% (28.3%) (1) Repossessed assets $ 7 Fair value of collateral Loss severity discount 0% - 100% (25.8%) (1) (1) Unobservable inputs were weighted by their relative fair value of the instruments. |
Carrying Amount and Estimated 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, 2019 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 426 $ 426 $ 426 $ — $ — Investment securities available-for-sale 2,116 2,116 — 2,116 — Investment securities held-to-maturity 598 599 — 599 — Loans held-for-sale 5,258 5,258 — 5,258 — Loans held-for-investment 12,129 12,031 — 10 12,021 Loans with government guarantees 736 707 — 707 — Mortgage servicing rights 291 291 — — 291 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 349 349 — 349 — Repossessed assets 10 10 — — 10 Other assets, foreclosure claims 45 45 — 45 — Derivative financial instruments 62 88 — 54 34 Liabilities Retail deposits Demand deposits and savings accounts $ (6,811 ) $ (6,050 ) $ — $ (6,050 ) $ — Certificates of deposit (2,353 ) (2,368 ) — (2,368 ) — Wholesale deposits (633 ) (640 ) — (640 ) — Government deposits (1,213 ) (1,156 ) — (1,156 ) — Custodial deposits (4,136 ) (4,066 ) — (4,066 ) — Federal Home Loan Bank advances (4,815 ) (4,816 ) — (4,816 ) — Long-term debt (496 ) (462 ) — (462 ) — DOJ litigation settlement (35 ) (35 ) — — (35 ) Contingent consideration (10 ) (10 ) — — (10 ) Derivative financial instruments (18 ) (44 ) — (43 ) (1 ) December 31, 2018 Estimated Fair Value Carrying Value Total Level 1 Level 2 Level 3 (Dollars in millions) Assets Cash and cash equivalents $ 408 $ 408 $ 408 $ — $ — Investment securities available-for-sale 2,142 2,142 — 2,142 — Investment securities held-to-maturity 703 681 — 681 — Loans held-for-sale 3,869 3,870 — 3,870 — Loans held-for-investment 9,088 8,966 8 8,958 Loans with government guarantees 392 374 374 Mortgage servicing rights 290 290 — — 290 Federal Home Loan Bank stock 303 303 — 303 — Bank owned life insurance 340 340 — 340 — Repossessed assets 7 7 — — 7 Other assets, foreclosure claims 50 50 — 50 — Derivative financial instruments, assets 47 47 — 27 20 Liabilities Retail deposits Demand deposits and savings accounts $ (6,467 ) $ (5,475 ) $ — $ (5,475 ) $ — Certificates of deposit (2,387 ) (2,379 ) — (2,379 ) — Wholesale deposits (583 ) (585 ) — (585 ) — Government deposits (1,202 ) (1,145 ) — (1,145 ) — Custodial deposits (1,741 ) (1,664 ) — (1,664 ) — Federal Home Loan Bank advances (3,394 ) (3,383 ) — (3,383 ) — Long-term debt (495 ) (463 ) — (463 ) — DOJ litigation settlement (60 ) (60 ) — — (60 ) Contingent consideration (6 ) (6 ) — — (6 ) Derivative financial instruments, liabilities (39 ) (39 ) — (39 ) — |
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, 2019 2018 2017 (Dollars in millions) Assets Loans held-for-sale Net gain on loan sales $ 348 $ (29 ) $ 283 Loans held-for-investment Other noninterest income 1 — 1 Liabilities DOJ litigation settlement Other noninterest income 25 — — |
Differences Between Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance Outstanding | 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, 2019 December 31, 2018 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 $ 3 $ 3 $ — $ 6 $ 6 $ — Loans held-for-investment 5 4 (1 ) 4 3 (1 ) Total nonaccrual loans 8 7 (1 ) 10 9 (1 ) Other performing loans Loans held-for-sale 5,057 5,216 159 3,601 3,726 125 Loans held-for-investment 8 8 — 8 7 (1 ) Total other performing loans 5,065 5,224 159 3,609 3,733 124 Total loans Loans held-for-sale 5,060 5,219 159 3,607 3,732 125 Loans held-for-investment 13 12 (1 ) 12 10 (2 ) Total loans $ 5,073 $ 5,231 $ 158 $ 3,619 $ 3,742 $ 123 Liabilities Litigation settlement (1) $ (118 ) $ (35 ) $ 83 $ (118 ) $ (60 ) $ 58 (1) We are obligated to pay $118 million in installment payments upon meeting certain performance conditions, as described in Note 19 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Financial Information by Business Segment | The following tables present financial information by business segment for the periods indicated: Year Ended December 31, 2019 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 449 $ 106 $ 16 $ (9 ) $ 562 Provision (benefit) for loan losses 20 2 — (4 ) 18 Net interest income after provision (benefit) for loan losses 429 104 16 (5 ) 544 Net gain on loan sales (29 ) 364 — — 335 Loan fees and charges (1 ) 69 32 — 100 Loan administration income (5 ) (22 ) 124 (67 ) 30 Net return on mortgage servicing rights — 6 — — 6 Other noninterest income 64 10 — 65 139 Total noninterest income 29 427 156 (2 ) 610 Compensation and benefits 100 114 28 135 377 Commissions 2 109 — — 111 Loan processing expense 7 35 36 2 80 Other noninterest expense 167 88 59 6 320 Total noninterest expense 276 346 123 143 888 Income before indirect overhead allocations and income taxes 182 185 49 (150 ) 266 Indirect overhead allocation Income (expense) (41 ) (42 ) (18 ) 101 — Provision (benefit) for income taxes 30 29 6 (17 ) 48 Net income (loss) $ 111 $ 114 $ 25 $ (32 ) $ 218 Intersegment (expense) revenue $ (19 ) $ 29 $ 26 $ (36 ) $ — Average balances Loans held-for-sale $ 32 $ 3,920 $ — $ — $ 3,952 Loans with government guarantees — 553 — — 553 Loans held-for-investment (2) 10,910 24 — (2 ) 10,932 Total assets 11,378 5,408 47 3,840 20,673 Deposits 10,301 — 3,850 556 14,707 (1) Includes offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. Year Ended December 31, 2018 Community Banking Mortgage Originations Mortgage Servicing Other (1) Total (Dollars in millions) Summary of Operations Net interest income $ 314 $ 128 $ 7 $ 48 $ 497 Provision (benefit) for loan losses 2 2 — (12 ) (8 ) Net interest income after provision (benefit) for loan losses 312 126 7 60 505 Net gain on loan sales (12 ) 212 — — 200 Loan fees and charges (1 ) 63 25 — 87 Loan administration income (3 ) (14 ) 69 (29 ) 23 Net return on mortgage servicing rights — 36 — — 36 Other noninterest income 44 16 — 33 93 Total noninterest income 28 313 94 4 439 Compensation and benefits 70 105 19 124 318 Commissions 2 78 — — 80 Loan processing expense 5 25 26 3 59 Other noninterest expense 103 58 44 50 255 Total noninterest expense 180 266 89 177 712 Income before indirect overhead allocations and income taxes 160 173 12 (113 ) 232 Indirect overhead allocation (39 ) (68 ) (20 ) 127 — Provision (benefit) for income taxes 25 22 (2 ) — 45 Net income (loss) $ 96 $ 83 $ (6 ) $ 14 $ 187 Intersegment (expense) revenue $ 1 $ 10 $ 19 $ (30 ) $ — Average balances Loans held-for-sale $ 24 $ 4,172 $ — $ — $ 4,196 Loans with government guarantees — 303 — — 303 Loans held-for-investment (2) 8,417 9 — 29 8,455 Total assets 8,615 5,406 34 3,925 17,980 Deposits 8,892 — 1,883 — 10,775 (1) Includes offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. 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 Provision (benefit) for loan losses 4 4 — (2 ) 6 Net interest income after provision (benefit) for loan losses 234 125 11 14 384 Net gain on loan sales (10 ) 278 — — 268 Loan fees and charges — 67 15 — 82 Loan administration income — (18 ) 39 — 21 Net return on mortgage servicing rights — 22 — — 22 Other noninterest income 31 21 12 13 77 Total noninterest income 21 370 66 13 470 Compensation and benefits 62 100 16 121 299 Commissions — 72 — — 72 Loan processing expense 5 26 22 4 57 Other noninterest expense 87 65 39 24 215 Total noninterest expense 154 263 77 149 643 Income before indirect overhead allocations and income taxes 101 232 — (122 ) 211 Indirect overhead allocation (41 ) (63 ) (23 ) 127 — Provision (benefit) for income taxes 21 59 (8 ) 76 148 Net income (loss) $ 39 $ 110 $ (15 ) $ (71 ) $ 63 Intersegment (expense) 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 offsetting adjustments made to reclassify income and expenses relating to operating leases and custodial deposits for subservicing clients. (2) Includes adjustment made to reclassify operating lease assets to loans held-for-investment. |
Holding Company Only Financia_2
Holding Company Only Financial Statements (Tables) - Parent Company | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 (Dollars in millions) Assets Cash and cash equivalents $ 233 $ 201 Investment in subsidiaries (1) 2,031 1,836 Other assets 47 52 Total assets $ 2,311 $ 2,089 Liabilities and Stockholders’ Equity Liabilities Long term debt $ 496 $ 495 Other liabilities 27 24 Total liabilities 523 519 Stockholders’ Equity Common stock 1 1 Additional paid in capital 1,533 1,522 Accumulated other comprehensive loss 1 (47 ) Retained earnings 303 94 Treasury Stock (50 ) — Total stockholders’ equity 1,788 1,570 Total liabilities and stockholders’ equity $ 2,311 $ 2,089 (1) Includes unconsolidated trusts of $7 million for December 31, 2019 and 2018 . |
Schedule of Condensed Unconsolidated Statements of Operations | Flagstar Bancorp, Inc. Condensed Unconsolidated Statements of Operations (Dollars in millions) For the Years Ended December 31, 2019 2018 2017 (Dollars in millions) Income Interest $ 4 $ 1 $ — Cash dividends received from subsidiaries 100 — — Total 104 1 — Expenses Interest $ 28 $ 27 $ 25 General and administrative 6 7 9 Total 34 34 34 Net income (loss) before undistributed income of subsidiaries 70 (33 ) (34 ) Equity in undistributed income of subsidiaries 142 212 110 Net income before income taxes 212 179 76 Provision (benefit) for income taxes (6 ) (8 ) 13 Net income 218 187 63 Other comprehensive income loss (1) 48 (31 ) (9 ) Comprehensive income $ 266 $ 156 $ 54 (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, 2019 2018 2017 (Dollars in millions) Net income $ 218 $ 187 $ 63 Adjustments to reconcile net loss to net cash provided by operating activities Equity in undistributed (income) loss of subsidiaries (241 ) (177 ) 47 Dividends received from subsidiaries 104 — — Other (1 ) (15 ) 11 Stock-based compensation 11 10 5 Net cash used in operating activities 91 5 126 Investing Activities Net cash provided by investing activities — — — Financing Activities Accelerated share repurchase (50 ) — — Dividends declared and paid (9 ) — — Net cash used in financing activities (59 ) — — Net increase in cash and cash equivalents 32 5 126 Cash and cash equivalents, beginning of year 201 196 70 Cash and cash equivalents, end of year $ 233 $ 201 $ 196 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following table represents summarized data for each of the quarters in 2019 and 2018 : 2019 Fourth Third Second First (Dollars in millions, except per share data) Interest income $ 213 $ 203 $ 198 $ 180 Interest expense 61 57 60 54 Net interest income 152 146 138 126 Provision for loan losses — 1 17 — Net interest income after provision for loan losses 152 145 121 126 Net gain on loan sales 101 110 75 49 Loan fees and charges 30 29 24 17 Deposit fees and charges 10 10 10 8 Loan administration income 8 5 6 11 Net return (loss) on the mortgage servicing rights (3 ) (2 ) 5 6 Other noninterest income 16 19 48 18 Noninterest expense 245 238 214 191 Income before income tax 69 78 75 44 Provision for income taxes 11 15 14 8 Net income from continuing operations $ 58 $ 63 $ 61 $ 36 Basic income per share $ 1.01 $ 1.12 $ 1.08 $ 0.64 Diluted income per share $ 1.00 $ 1.11 $ 1.06 $ 0.63 2018 Fourth Third Second First (Dollars in millions, except per share data) Interest income $ 181 $ 183 $ 167 $ 152 Interest expense 29 59 52 46 Net interest income 152 124 115 106 Benefit from loan losses (5 ) (2 ) (1 ) — Net interest income after provision for loan losses 157 126 116 106 Net gain on loan sales 34 43 63 60 Loan fees and charges 20 23 24 20 Deposit fees and charges 6 5 5 5 Loan administration income 8 5 5 5 Net return on the mortgage servicing rights 10 13 9 4 Other noninterest income 20 18 17 17 Noninterest expense 189 173 177 173 Income before income tax 66 60 62 44 Provision for income taxes 12 12 12 9 Net income from continuing operations $ 54 $ 48 $ 50 $ 35 Basic income per share $ 0.94 $ 0.84 $ 0.86 $ 0.61 Diluted income per share $ 0.93 $ 0.83 $ 0.85 $ 0.60 |
Description of Business, Basi_4
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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 | ||
Intangible asset amortization | $ 15 | $ 5 | $ 0 |
Estimated future aggregate amortization expense on intangible assets: | |||
2019 | 13 | ||
2020 | 11 | ||
2021 | 9 | ||
2022 | 7 | ||
Representation and warranty reserve | 5 | 7 | |
Advertising expense | 25 | 26 | 16 |
Operating lease expense | $ 12 | ||
Lease rental expense | $ 11 | $ 9 | |
Range (Weighted Average) | |||
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 | ||
Computer hardware and software | Range (Weighted Average) | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Estimated useful lives | 3 years | ||
Computer hardware and software | Maximum | |||
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 |
Description of Business, Basi_5
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 46 | $ 31 |
Deposit account and other banking income | Community Banking | Deposit fees and charges | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 27 | 16 |
Interchange fees | Community Banking | Deposit fees and charges | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 11 | 5 |
Interchange fees | Community Banking | Other noninterest income | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 2 | 1 |
Wealth management | Community Banking | Other noninterest income | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 6 | $ 9 |
Description of Business, Basi_6
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Information Relating to Operating Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Weighted-average remaining lease term (years) | 3 years 8 months 12 days |
Weighted-average discount rate | 2.82% |
Right-of-use asset | $ 22 |
Lease liability | $ 23 |
Description of Business, Basi_7
Description of Business, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Minimum Contractual Lease Obligations (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
2020 | $ 9 | $ 9 |
2021 | 7 | 6 |
2022 | 5 | 4 |
2023 | 3 | 2 |
2024 | 1 | 1 |
Thereafter | 2 | 3 |
Total | $ 27 | $ 25 |
Investment Securities - Summary
Investment Securities - Summary of Investment Securities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Available-for-sale securities | ||
Amortized Cost | $ 2,115 | $ 2,206 |
Gross Unrealized Gains | 8 | 4 |
Gross Unrealized Losses | (7) | (68) |
Fair Value | 2,116 | 2,142 |
Held-to-maturity securities | ||
Amortized Cost | 598 | 703 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (2) | (22) |
Fair Value | 599 | 681 |
Agency - Commercial | ||
Available-for-sale securities | ||
Amortized Cost | 948 | 1,413 |
Gross Unrealized Gains | 2 | 4 |
Gross Unrealized Losses | (3) | (43) |
Fair Value | 947 | 1,374 |
Held-to-maturity securities | ||
Amortized Cost | 306 | 349 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1) | (13) |
Fair Value | 305 | 336 |
Agency - Residential | ||
Available-for-sale securities | ||
Amortized Cost | 1,015 | 686 |
Gross Unrealized Gains | 4 | 0 |
Gross Unrealized Losses | (4) | (24) |
Fair Value | 1,015 | 662 |
Held-to-maturity securities | ||
Amortized Cost | 292 | 354 |
Gross Unrealized Gains | 3 | 0 |
Gross Unrealized Losses | (1) | (9) |
Fair Value | 294 | 345 |
Corporate debt obligations | ||
Available-for-sale securities | ||
Amortized Cost | 76 | 41 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 77 | 41 |
Municipal obligations | ||
Available-for-sale securities | ||
Amortized Cost | 31 | 33 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 31 | 32 |
Other MBS | ||
Available-for-sale securities | ||
Amortized Cost | 44 | 32 |
Gross Unrealized Gains | 1 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 45 | 32 |
Certificates of Deposit | ||
Available-for-sale securities | ||
Amortized Cost | 1 | 1 |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 1 | $ 1 |
Investment Securities - Investm
Investment Securities - Investment Securities, Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Proceeds from Sale of Held-to-maturity Securities | $ 0 | $ 0 | |
Other than temporary impairment | $ 0 | $ 0 | $ 0 |
Agency Securities | |||
Schedule of Trading and Available-for-sale Securities [Line Items] | |||
Percentage of total securities (in percentage) | 94.00% |
Investment Securities - Availab
Investment Securities - Available-for-Sale Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Securities, Available-for-sale [Line Items] | |||
Purchase of AFS securities | $ 500,000,000 | $ 340,000,000 | $ 904,000,000 |
Investment securities available-for-sale | 2,116,000,000 | 2,142,000,000 | |
AFS securities sold | 432,000,000 | $ 0 | |
Gain on AFS securities | 7,000,000 | ||
Other MBS | |||
Debt Securities, Available-for-sale [Line Items] | |||
Investment securities available-for-sale | $ 19,000,000 | ||
US Government-Sponsored Agency Securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
AFS securities sold | 289,000,000 | ||
Gain on AFS securities | $ 3,000,000 |
Investment Securities - Held-to
Investment Securities - Held-to-Maturity Securities (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Held-to-maturity Securities [Line Items] | ||||
Investment securities transferred from HTM to AFS | $ 144,000,000 | |||
Purchase of HTM securities | $ 0 | $ 0 | $ 0 | |
Collateral pledged | ||||
Schedule of Held-to-maturity Securities [Line Items] | ||||
Debt securities, available-for-sale, restricted | $ 1,900,000,000 | $ 874,000,000 | $ 1,900,000,000 |
Investment Securities - Summa_2
Investment Securities - Summary of Unrealized Loss Positions on Investment Securities (Details) $ in Millions | Dec. 31, 2019USD ($)security | Dec. 31, 2018USD ($)security |
Agency - Commercial | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 148 | $ 1,025 |
Unrealized Loss Position with Duration Under 12 Months | $ 303 | $ 1 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 17 | 74 |
Unrealized Loss Position with Duration Under 12 Months | security | 19 | 1 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (3) | $ (43) |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 148 | 336 |
Unrealized Loss Position with Duration Under 12 Months | $ 85 | $ 0 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 13 | 26 |
Unrealized Loss Position with Duration Under 12 Months | security | 6 | 0 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (1) | $ (13) |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Agency - Residential | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 266 | 647 |
Unrealized Loss Position with Duration Under 12 Months | $ 148 | $ 14 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 26 | 79 |
Unrealized Loss Position with Duration Under 12 Months | security | 14 | 5 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (3) | $ (24) |
Unrealized Loss Position with Duration Under 12 Months | (1) | 0 |
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 35 | 345 |
Unrealized Loss Position with Duration Under 12 Months | $ 38 | $ 0 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 7 | 60 |
Unrealized Loss Position with Duration Under 12 Months | security | 10 | 0 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ (1) | $ (9) |
Unrealized Loss Position with Duration Under 12 Months | 0 | 0 |
Municipal obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 8 | 28 |
Unrealized Loss Position with Duration Under 12 Months | $ 0 | $ 1 |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 3 | 16 |
Unrealized Loss Position with Duration Under 12 Months | security | 0 | 2 |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | $ (1) |
Unrealized Loss Position with Duration Under 12 Months | $ 0 | 0 |
Corporate debt obligations | ||
Fair Value | ||
Unrealized Loss Position with Duration 12 Months and Over | 0 | |
Unrealized Loss Position with Duration Under 12 Months | $ 7 | |
Number of Securities | ||
Unrealized Loss Position with Duration 12 Months and Over | security | 0 | |
Unrealized Loss Position with Duration Under 12 Months | security | 2 | |
Unrealized Loss | ||
Unrealized Loss Position with Duration 12 Months and Over | $ 0 | |
Unrealized Loss Position with Duration Under 12 Months | $ 0 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Estimated Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 3 | |
Due after one year through five years | 20 | |
Due after five years through 10 years | 93 | |
Due after 10 years | 1,999 | |
Amortized Cost | 2,115 | $ 2,206 |
Fair Value | ||
Due in one year or less | 3 | |
Due after one year through five years | 20 | |
Due after five years through 10 years | 95 | |
Due after 10 years | 1,998 | |
Fair Value | $ 2,116 | 2,142 |
Weighted-Average Yield | ||
Due in one year or less (in percentage) | 2.12% | |
Due after one year through five years (in percentage) | 4.07% | |
Due after five years through 10 years (in percentage) | 4.23% | |
Due after 10 years (in percentage) | 2.41% | |
Amortized Cost | ||
Due in one year or less | $ 0 | |
Due after one year through five years | 10 | |
Due after five years through 10 years | 9 | |
Due after 10 years | 579 | |
Amortized Cost | 598 | 703 |
Fair Value | ||
Due in one year or less | 0 | |
Due after one year through five years | 10 | |
Due after five years through 10 years | 9 | |
Due after 10 years | 580 | |
Fair value | $ 599 | $ 681 |
Weighted-Average Yield | ||
Due in one year or less (in percentage) | 0.00% | |
Due after one year through five years (in percentage) | 2.48% | |
Due after five years through 10 years (in percentage) | 2.29% | |
Due after 10 years (in percentage) | 2.42% |
Loans Held-for-Sale (Details)
Loans Held-for-Sale (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans held-for-sale | $ 5,258 | $ 3,869 | $ 5,258 | $ 3,869 | |||||||
Net gain on loan sales | 101 | $ 110 | $ 75 | $ 49 | 34 | $ 43 | $ 63 | $ 60 | 335 | 200 | $ 268 |
Loans receivable held-for-sale, recorded at lower of cost or fair value | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Loans held-for-sale | $ 39 | $ 137 | 39 | 137 | |||||||
Loans held-for-sale | |||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||||||||
Net gain on loan sales | $ 333 | $ 197 | $ 267 |
Loans Held-for-Investment - Sum
Loans Held-for-Investment - Summary of Loans Held-for-Investment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | $ 12,129 | $ 9,088 |
Residential first mortgage | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 3,154 | 2,999 |
Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 1,024 | 731 |
Other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 729 | 314 |
Other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 4,907 | 4,044 |
Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 2,828 | 2,152 |
Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 1,634 | 1,433 |
Warehouse lending | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 2,760 | 1,459 |
Commercial portfolio segment | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 7,222 | 5,044 |
Other consumer | Residential first mortgage | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 3,154 | 2,999 |
Other consumer | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 1,024 | 731 |
Other consumer | Other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 729 | 314 |
Commercial portfolio segment | Commercial real estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 2,828 | 2,152 |
Commercial portfolio segment | Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | 1,634 | 1,433 |
Commercial portfolio segment | Warehouse lending | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans held-for-investment ($12 and $10 measured at fair value, respectively) | $ 2,760 | $ 1,459 |
Loans Held-for-Investment - UPB
Loans Held-for-Investment - UPB of Loan Sales and Purchases in the Loans Held-for-Investment Portfolio (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Net gain associated with loan sales | $ 2 | $ 2 | |
Loans purchased | 300 | 37 | $ 258 |
Premium associated with loans purchased | 11 | 0 | 9 |
Residential first mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans sold | 217 | 158 | 127 |
Net gain associated with loan sales | 2 | ||
Loans purchased | 8 | ||
HELOC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans purchased | 250 | ||
Other consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans purchased | 0 | ||
Performing loans | Residential first mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans sold | 102 | ||
Nonperforming loans | Residential first mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans sold | $ 25 | ||
Performing loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans sold | 217 | 158 | |
Residential first mortgage loans | Nonperforming loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans sold | 0 | 0 | |
Other consumer | Residential first mortgage loans | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans purchased | 0 | 3 | |
Other consumer | HELOC | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans purchased | 249 | 0 | |
Other consumer | Other consumer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans purchased | $ 51 | $ 34 |
Loans Held-for-Investment - Na
Loans Held-for-Investment - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Modifications subsequent to default (less than) | $ 0 | $ 0 | $ 1,000,000 |
Interest lost on nonaccrual loans | 1,000,000 | 1,000,000 | $ 1,000,000 |
Loans 90 days or greater past due and still accruing | 0 | 0 | |
Loans held-for-investment | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans pledged as collateral | $ 9,100,000,000 | $ 6,800,000,000 |
Loans Held-for-Investment - Cha
Loans Held-for-Investment - Changes in ALLL by Class of Loan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Loan Losses | |||
Beginning balance ALLL | $ 128,000,000 | $ 140,000,000 | $ 142,000,000 |
Charge-offs | (43,000,000) | (8,000,000) | (14,000,000) |
Recoveries | 4,000,000 | 4,000,000 | 6,000,000 |
Provision (benefit) | 18,000,000 | (8,000,000) | 6,000,000 |
Ending balance ALLL | 107,000,000 | 128,000,000 | 140,000,000 |
Residential first mortgage | |||
Allowance for Loan Losses | |||
Charge-offs | 0 | 0 | (1,000,000) |
Loans with government guarantees | |||
Allowance for Loan Losses | |||
Charge-offs | (2,000,000) | (2,000,000) | (4,000,000) |
Residential first mortgage | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 38,000,000 | 47,000,000 | 65,000,000 |
Charge-offs | (4,000,000) | (8,000,000) | |
Recoveries | 2,000,000 | 1,000,000 | |
Provision (benefit) | (7,000,000) | (11,000,000) | |
Ending balance ALLL | 22,000,000 | 38,000,000 | 47,000,000 |
Home equity | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 15,000,000 | 22,000,000 | 24,000,000 |
Charge-offs | (2,000,000) | (3,000,000) | |
Recoveries | 1,000,000 | 2,000,000 | |
Provision (benefit) | (6,000,000) | (1,000,000) | |
Ending balance ALLL | 14,000,000 | 15,000,000 | 22,000,000 |
Other consumer | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 3,000,000 | 1,000,000 | 1,000,000 |
Charge-offs | (2,000,000) | (2,000,000) | |
Recoveries | 1,000,000 | 1,000,000 | |
Provision (benefit) | 3,000,000 | 1,000,000 | |
Ending balance ALLL | 6,000,000 | 3,000,000 | 1,000,000 |
Commercial real estate | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 48,000,000 | 45,000,000 | 28,000,000 |
Charge-offs | 0 | (1,000,000) | |
Recoveries | 0 | 1,000,000 | |
Provision (benefit) | 3,000,000 | 17,000,000 | |
Ending balance ALLL | 38,000,000 | 48,000,000 | 45,000,000 |
Commercial and industrial | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 18,000,000 | 19,000,000 | 17,000,000 |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 1,000,000 | |
Provision (benefit) | (1,000,000) | 1,000,000 | |
Ending balance ALLL | 22,000,000 | 18,000,000 | 19,000,000 |
Warehouse lending | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 6,000,000 | 6,000,000 | 7,000,000 |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Provision (benefit) | 0 | (1,000,000) | |
Ending balance ALLL | 5,000,000 | 6,000,000 | $ 6,000,000 |
Other consumer | Residential first mortgage | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 38,000,000 | ||
Charge-offs | (3,000,000) | ||
Recoveries | 1,000,000 | ||
Provision (benefit) | (14,000,000) | ||
Ending balance ALLL | 38,000,000 | ||
Other consumer | Home equity | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 15,000,000 | ||
Charge-offs | (2,000,000) | ||
Recoveries | 2,000,000 | ||
Provision (benefit) | (1,000,000) | ||
Ending balance ALLL | 15,000,000 | ||
Other consumer | Other consumer | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 3,000,000 | ||
Charge-offs | (7,000,000) | ||
Recoveries | 0 | ||
Provision (benefit) | 10,000,000 | ||
Ending balance ALLL | 3,000,000 | ||
Commercial portfolio segment | Commercial real estate | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 48,000,000 | ||
Charge-offs | 0 | ||
Recoveries | 0 | ||
Provision (benefit) | (10,000,000) | ||
Ending balance ALLL | 48,000,000 | ||
Commercial portfolio segment | Commercial and industrial | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 18,000,000 | ||
Charge-offs | (31,000,000) | ||
Recoveries | 1,000,000 | ||
Provision (benefit) | 34,000,000 | ||
Ending balance ALLL | 18,000,000 | ||
Commercial portfolio segment | Warehouse lending | |||
Allowance for Loan Losses | |||
Beginning balance ALLL | 6,000,000 | ||
Charge-offs | 0 | ||
Recoveries | 0 | ||
Provision (benefit) | $ (1,000,000) | ||
Ending balance ALLL | $ 6,000,000 |
Loans Held-for-Investment - Met
Loans Held-for-Investment - Method of Evaluation by Class of Loan (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | $ 53 | $ 55 | ||
Loans held-for-investment, collectively evaluated | 12,064 | 9,023 | ||
Total loans | 12,117 | 9,078 | ||
Allowance for loan losses, individually evaluated | 13 | 11 | ||
Allowance for loan losses, collectively evaluated | 94 | 117 | ||
Total allowance for loan losses | 107 | 128 | $ 140 | $ 142 |
Residential first mortgage | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 3,145 | 2,991 | ||
Total allowance for loan losses | 22 | 38 | 47 | 65 |
Home equity | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 1,021 | 729 | ||
Total allowance for loan losses | 14 | 15 | 22 | 24 |
Other consumer | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 729 | 314 | ||
Total allowance for loan losses | 6 | 3 | 1 | 1 |
Commercial real estate | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 2,828 | 2,152 | ||
Total allowance for loan losses | 38 | 48 | 45 | 28 |
Commercial and industrial | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 1,634 | 1,433 | ||
Total allowance for loan losses | 22 | 18 | 19 | 17 |
Warehouse lending | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Total loans | 2,760 | 1,459 | ||
Total allowance for loan losses | 5 | 6 | $ 6 | $ 7 |
Other consumer | Residential first mortgage | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 32 | 32 | ||
Loans held-for-investment, collectively evaluated | 3,113 | 2,959 | ||
Allowance for loan losses, individually evaluated | 5 | 4 | ||
Allowance for loan losses, collectively evaluated | 17 | 34 | ||
Total allowance for loan losses | 38 | |||
Other consumer | Home equity | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 20 | 23 | ||
Loans held-for-investment, collectively evaluated | 1,001 | 706 | ||
Allowance for loan losses, individually evaluated | 7 | 7 | ||
Allowance for loan losses, collectively evaluated | 7 | 8 | ||
Total allowance for loan losses | 15 | |||
Other consumer | Other consumer | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 1 | 0 | ||
Loans held-for-investment, collectively evaluated | 728 | 314 | ||
Allowance for loan losses, individually evaluated | 1 | 0 | ||
Allowance for loan losses, collectively evaluated | 5 | 3 | ||
Total allowance for loan losses | 3 | |||
Commercial portfolio segment | Commercial real estate | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 2,828 | 2,152 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 38 | 48 | ||
Total allowance for loan losses | 48 | |||
Commercial portfolio segment | Commercial and industrial | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 1,634 | 1,433 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | 22 | 18 | ||
Total allowance for loan losses | 18 | |||
Commercial portfolio segment | Warehouse lending | ||||
Allowance for Loan Losses, Additional Disclosure | ||||
Loans held-for-investment, individually evaluated | 0 | 0 | ||
Loans held-for-investment, collectively evaluated | 2,760 | 1,459 | ||
Allowance for loan losses, individually evaluated | 0 | 0 | ||
Allowance for loan losses, collectively evaluated | $ 5 | 6 | ||
Total allowance for loan losses | $ 6 |
Loans Held-for-Investment - Agi
Loans Held-for-Investment - Aging Analysis of Past Due and Current Loans (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Held-for-Investment, Aging | |||
Total Past Due | $ 40,000,000 | $ 29,000,000 | |
Current | 12,089,000,000 | 9,059,000,000 | |
Net investment in commercial financing leases | 12,129,000,000 | 9,088,000,000 | |
90 days or greater past due, fair value option | 4,000,000 | 3,000,000 | |
Interest lost on nonaccrual loans | 1,000,000 | 1,000,000 | $ 1,000,000 |
90 days and still accruing | 0 | 0 | |
Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 30,000,000 | 25,000,000 | |
Net investment in commercial financing leases | 3,154,000,000 | 2,999,000,000 | |
Home equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 5,000,000 | 4,000,000 | |
Net investment in commercial financing leases | 1,024,000,000 | 731,000,000 | |
Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 5,000,000 | 0 | |
Net investment in commercial financing leases | 729,000,000 | 314,000,000 | |
Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 40,000,000 | 29,000,000 | |
Current | 4,867,000,000 | 4,015,000,000 | |
Net investment in commercial financing leases | 4,907,000,000 | 4,044,000,000 | |
Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Net investment in commercial financing leases | 2,828,000,000 | 2,152,000,000 | |
Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Net investment in commercial financing leases | 1,634,000,000 | 1,433,000,000 | |
Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Net investment in commercial financing leases | 2,760,000,000 | 1,459,000,000 | |
Commercial portfolio segment | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Current | 7,222,000,000 | 5,044,000,000 | |
Net investment in commercial financing leases | 7,222,000,000 | 5,044,000,000 | |
30-59 Days Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 9,000,000 | 5,000,000 | |
30-59 Days Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 9,000,000 | 5,000,000 | |
30-59 Days Past Due | Commercial portfolio segment | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
60-89 Days Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 5,000,000 | 2,000,000 | |
60-89 Days Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 5,000,000 | 2,000,000 | |
60-89 Days Past Due | Commercial portfolio segment | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
90 Days or Greater Past Due | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 26,000,000 | 22,000,000 | |
90 Days or Greater Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 26,000,000 | 22,000,000 | |
90 Days or Greater Past Due | Commercial portfolio segment | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Other consumer | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Current | 3,124,000,000 | 2,974,000,000 | |
Net investment in commercial financing leases | 3,154,000,000 | 2,999,000,000 | |
Other consumer | Home equity | |||
Loans Held-for-Investment, Aging | |||
Current | 1,019,000,000 | 727,000,000 | |
Net investment in commercial financing leases | 1,024,000,000 | 731,000,000 | |
Other consumer | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Current | 724,000,000 | 314,000,000 | |
Net investment in commercial financing leases | 729,000,000 | 314,000,000 | |
Other consumer | 30-59 Days Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 5,000,000 | 4,000,000 | |
Other consumer | 30-59 Days Past Due | Home equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 1,000,000 | 1,000,000 | |
Other consumer | 30-59 Days Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 3,000,000 | 0 | |
Other consumer | 60-89 Days Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 4,000,000 | 2,000,000 | |
Other consumer | 60-89 Days Past Due | Home equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Other consumer | 60-89 Days Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 1,000,000 | 0 | |
Other consumer | 90 Days or Greater Past Due | Residential first mortgage | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 21,000,000 | 19,000,000 | |
Other consumer | 90 Days or Greater Past Due | Home equity | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 4,000,000 | 3,000,000 | |
Other consumer | 90 Days or Greater Past Due | Other consumer | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 1,000,000 | 0 | |
Commercial portfolio segment | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Current | 2,828,000,000 | 2,152,000,000 | |
Net investment in commercial financing leases | 2,828,000,000 | 2,152,000,000 | |
Commercial portfolio segment | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Current | 1,634,000,000 | 1,433,000,000 | |
Net investment in commercial financing leases | 1,634,000,000 | 1,433,000,000 | |
Commercial portfolio segment | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Current | 2,760,000,000 | 1,459,000,000 | |
Net investment in commercial financing leases | 2,760,000,000 | 1,459,000,000 | |
Commercial portfolio segment | 30-59 Days Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 30-59 Days Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 30-59 Days Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 60-89 Days Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 60-89 Days Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 60-89 Days Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 90 Days or Greater Past Due | Commercial real estate | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 90 Days or Greater Past Due | Commercial and industrial | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | 0 | 0 | |
Commercial portfolio segment | 90 Days or Greater Past Due | Warehouse lending | |||
Loans Held-for-Investment, Aging | |||
Total Past Due | $ 0 | $ 0 |
Loans Held-for-Investment - S_2
Loans Held-for-Investment - Summary of TDRs by Type and Performing Status (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Troubled Debt Restructurings | ||
TDR balance | $ 48 | $ 54 |
Financing receivable, modifications, loans and leases receivable, allowance | 8 | 10 |
TDR loans under fair value option | 2 | 3 |
Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 28 | 30 |
Consumer loans | Home equity | ||
Troubled Debt Restructurings | ||
TDR balance | 20 | 24 |
Performing | ||
Troubled Debt Restructurings | ||
TDR balance | 38 | 44 |
Performing | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 20 | 22 |
Performing | Consumer loans | Home equity | ||
Troubled Debt Restructurings | ||
TDR balance | 18 | 22 |
Nonperforming | ||
Troubled Debt Restructurings | ||
TDR balance | 10 | 10 |
Nonperforming | Consumer loans | Residential first mortgage | ||
Troubled Debt Restructurings | ||
TDR balance | 8 | 8 |
Nonperforming | Consumer loans | Home equity | ||
Troubled Debt Restructurings | ||
TDR balance | $ 2 | $ 2 |
Loans Held-for-Investment - S_3
Loans Held-for-Investment - Summary of Newly Modified TDRs (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Accounts | loan | 14 | 31 | 98 |
Pre-Modification Unpaid Principal Balance | $ 1 | $ 4 | $ 10 |
Post-Modification Unpaid Principal Balance | 1 | 4 | 9 |
Increase (Decrease) in Allowance at Modification | $ 0 | $ 0 | $ (1) |
Residential first mortgage | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Accounts | loan | 14 | 16 | |
Pre-Modification Unpaid Principal Balance | $ 3 | $ 4 | |
Post-Modification Unpaid Principal Balance | 3 | 4 | |
Increase (Decrease) in Allowance at Modification | $ 0 | $ 0 | |
Home equity | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Accounts | loan | 17 | 82 | |
Pre-Modification Unpaid Principal Balance | $ 1 | $ 6 | |
Post-Modification Unpaid Principal Balance | 1 | 5 | |
Increase (Decrease) in Allowance at Modification | $ 0 | $ (1) | |
Other consumer | Residential first mortgage | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Accounts | loan | 8 | ||
Pre-Modification Unpaid Principal Balance | $ 1 | ||
Post-Modification Unpaid Principal Balance | 1 | ||
Increase (Decrease) in Allowance at Modification | $ 0 | ||
Other consumer | Home equity | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Accounts | loan | 6 | ||
Pre-Modification Unpaid Principal Balance | $ 0 | ||
Post-Modification Unpaid Principal Balance | 0 | ||
Increase (Decrease) in Allowance at Modification | $ 0 |
Loans Held-for-Investment - Tro
Loans Held-for-Investment - Troubled Debt Restructurings, Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2019USD ($)loan | Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Receivables [Abstract] | |||
Loans modified in the preceding 12 months that subsequently defaulted | loan | 0 | 0 | 1 |
Modifications subsequent to default (less than) | $ 0 | $ 0 | $ 1,000,000 |
Increase (decrease) in allowance associated with TDRs at subsequent default | $ 0 |
Loans Held-for-Investment - Imp
Loans Held-for-Investment - Impaired Loans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | $ 17 | $ 14 | |
With no related allowance recorded, unpaid principal balance | 25 | 20 | |
With an allowance recorded, recorded investment | 36 | 41 | |
With an allowance recorded, unpaid principal balance | 36 | 43 | |
With an allowance recorded, related allowance | 11 | 11 | |
Total recorded investment | 53 | 55 | |
Total unpaid principal balance | 61 | 63 | |
Average Recorded Investment | 70 | 60 | $ 66 |
Interest Income Recognized | 0 | 3 | 2 |
Residential first mortgage | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 33 | 38 | |
Interest Income Recognized | 1 | 1 | |
Home equity | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 25 | 28 | |
Interest Income Recognized | 2 | 1 | |
Other consumer | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 0 | 0 | |
Interest Income Recognized | 0 | 0 | |
Commercial and industrial | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 2 | 0 | |
Interest Income Recognized | 0 | $ 0 | |
Other consumer | Residential first mortgage | |||
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | 16 | 13 | |
With no related allowance recorded, unpaid principal balance | 20 | 16 | |
With an allowance recorded, recorded investment | 16 | 19 | |
With an allowance recorded, unpaid principal balance | 16 | 20 | |
With an allowance recorded, related allowance | 3 | 4 | |
Total recorded investment | 32 | 32 | |
Total unpaid principal balance | 36 | 36 | |
Average Recorded Investment | 36 | ||
Interest Income Recognized | 0 | ||
Other consumer | Home equity | |||
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | 1 | 1 | |
With no related allowance recorded, unpaid principal balance | 4 | 4 | |
With an allowance recorded, recorded investment | 19 | 22 | |
With an allowance recorded, unpaid principal balance | 19 | 23 | |
With an allowance recorded, related allowance | 7 | 7 | |
Total recorded investment | 20 | 23 | |
Total unpaid principal balance | 23 | 27 | |
Average Recorded Investment | 17 | ||
Interest Income Recognized | 0 | ||
Other consumer | Other consumer | |||
Financing Receivable, Impaired | |||
With no related allowance recorded, recorded investment | 0 | 0 | |
With no related allowance recorded, unpaid principal balance | 1 | 0 | |
With an allowance recorded, recorded investment | 1 | 0 | |
With an allowance recorded, unpaid principal balance | 1 | 0 | |
With an allowance recorded, related allowance | 1 | 0 | |
Total recorded investment | 1 | 0 | |
Total unpaid principal balance | 2 | $ 0 | |
Average Recorded Investment | 2 | ||
Interest Income Recognized | 0 | ||
Commercial portfolio segment | Commercial and industrial | |||
Financing Receivable, Impaired | |||
Average Recorded Investment | 15 | ||
Interest Income Recognized | $ 0 |
Loans Held-for-Investment - Loa
Loans Held-for-Investment - Loan Credit Quality Indicators (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | $ 12,117 | $ 9,078 |
Loans held-for-investment, net | 12,129 | 9,088 |
Residential first mortgage | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 3,145 | 2,991 |
Loans held-for-investment, net | 3,154 | 2,999 |
Home equity | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,021 | 729 |
Loans held-for-investment, net | 1,024 | 731 |
Other consumer | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 729 | 314 |
Loans held-for-investment, net | 729 | 314 |
Commercial portfolio segment | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 7,222 | 5,044 |
Commercial portfolio segment | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 6,883 | 4,807 |
Commercial portfolio segment | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 285 | 187 |
Commercial portfolio segment | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 44 | 49 |
Commercial portfolio segment | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 10 | 1 |
Commercial real estate | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,828 | 2,152 |
Loans held-for-investment, net | 2,828 | 2,152 |
Commercial and industrial | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,634 | 1,433 |
Loans held-for-investment, net | 1,634 | 1,433 |
Warehouse | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,760 | 1,459 |
Loans held-for-investment, net | 2,760 | 1,459 |
Other consumer | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 4,907 | 4,044 |
Other consumer | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 4,836 | 3,971 |
Other consumer | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 46 | 51 |
Other consumer | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other consumer | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 25 | 22 |
Other consumer | Residential first mortgage | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 3,154 | 2,999 |
Other consumer | Residential first mortgage | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 3,107 | 2,952 |
Other consumer | Residential first mortgage | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 27 | 28 |
Other consumer | Residential first mortgage | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other consumer | Residential first mortgage | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 20 | 19 |
Other consumer | Home equity | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 1,024 | 731 |
Other consumer | Home equity | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,002 | 705 |
Other consumer | Home equity | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 18 | 23 |
Other consumer | Home equity | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other consumer | Home equity | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 4 | 3 |
Other consumer | Other consumer | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 729 | 314 |
Other consumer | Other consumer | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 727 | 314 |
Other consumer | Other consumer | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1 | 0 |
Other consumer | Other consumer | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 0 | 0 |
Other consumer | Other consumer | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1 | 0 |
Commercial portfolio segment | Commercial real estate | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 2,828 | 2,152 |
Commercial portfolio segment | Commercial real estate | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,794 | 2,132 |
Commercial portfolio segment | Commercial real estate | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 24 | 14 |
Commercial portfolio segment | Commercial real estate | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 5 | 5 |
Commercial portfolio segment | Commercial real estate | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 5 | 1 |
Commercial portfolio segment | Commercial and industrial | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 1,634 | 1,433 |
Commercial portfolio segment | Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 1,533 | 1,351 |
Commercial portfolio segment | Commercial and industrial | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 72 | 53 |
Commercial portfolio segment | Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 24 | 29 |
Commercial portfolio segment | Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 5 | 0 |
Commercial portfolio segment | Warehouse | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment, net | 2,760 | 1,459 |
Commercial portfolio segment | Warehouse | Pass | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 2,556 | 1,324 |
Commercial portfolio segment | Warehouse | Watch | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 189 | 120 |
Commercial portfolio segment | Warehouse | Special Mention | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | 15 | 15 |
Commercial portfolio segment | Warehouse | Substandard | ||
Financing Receivable, Recorded Investment | ||
Loans held-for-investment | $ 0 | $ 0 |
Loans with Government Guarant_2
Loans with Government Guarantees (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loans and Leases Receivable Disclosure [Abstract] | ||
Debt instrument, term | 10 years | |
Loans with government guarantees | $ 736 | $ 392 |
Repossessed assets and associated claims | $ 45 | $ 50 |
Repossessed Assets - Summary of
Repossessed Assets - Summary of Repossessed Assets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Repossessed Assets [Line Items] | ||||
Repossessed assets | $ 10 | $ 7 | $ 8 | $ 14 |
One-to-four family properties | ||||
Repossessed Assets [Line Items] | ||||
Repossessed assets | 6 | 5 | ||
Commercial properties | ||||
Repossessed Assets [Line Items] | ||||
Repossessed assets | $ 4 | $ 2 |
Repossessed Assets - Activity i
Repossessed Assets - Activity in Repossessed Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Repossessed Assets [Roll Forward] | |||
Beginning balance | $ 7 | $ 8 | $ 14 |
Additions, net | 12 | 10 | 18 |
Disposals | (4) | (8) | (14) |
Net (write down) on disposal | (5) | (3) | (9) |
Transfers out | 0 | 0 | (1) |
Ending balance | $ 10 | $ 7 | $ 8 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - entity | Dec. 31, 2019 | Dec. 31, 2018 |
Private-label Securitizations [Line Items] | ||
Number of variable interest entities | 0 | 0 |
Agency - Commercial | ||
Private-label Securitizations [Line Items] | ||
Ownership interest in investment | 5.00% |
Federal Home Loan Bank Stock (D
Federal Home Loan Bank Stock (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal Home Loan Bank Stock [Abstract] | |||
Federal Home Loan Bank stock | $ 303,000,000 | $ 303,000,000 | |
Federal Home Loan Bank stock, minimum investment requirement, percentage of unpaid principal of mortgage loans, home purchase contracts and similar obligations (in percentage) | 1.00% | ||
Federal Home Loan Bank minimum percentage of advances required held (in percentage) | 4.50% | ||
Payments to acquire FHLB stock | $ 0 | 0 | |
Proceeds from Sale of Federal Home Loan Bank Stock | 0 | ||
Dividend income | $ 16,000,000 | $ 15,000,000 | $ 9,000,000 |
Premises and Equipment - Premis
Premises and Equipment - Premises and Equipment and Estimated Useful Lives (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 732 | |
Total | $ 811 | |
Less accumulated depreciation | (395) | |
Less accumulated depreciation | (342) | |
Premises and equipment, net | $ 416 | |
Premises and equipment, net | 390 | |
Range (Weighted Average) | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 3 years | |
Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 30 years | |
Land Improvements [Member] | Range (Weighted Average) | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 5 years | |
Land Improvements [Member] | Maximum | ||
Premises and Equipment, Net, by Type | ||
Estimated useful lives | 10 years | |
Land | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 74 | |
Computer hardware and software | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 329 | |
Computer hardware and software | Range (Weighted Average) | ||
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 | |
Office buildings and improvements | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 185 | |
Office buildings and improvements | Range (Weighted Average) | ||
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 | |
Furniture, fixtures and equipment | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 57 | |
Furniture, fixtures and equipment | Range (Weighted Average) | ||
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 | |
Leased equipment | Range (Weighted Average) | ||
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 | |
Leasehold improvements | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 10 | |
Fixed assets in progress | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 37 | |
Right-of-use asset | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 0 | |
Land | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | $ 73 | |
Computer hardware and software | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 372 | |
Office buildings and improvements | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 191 | |
Furniture, fixtures and equipment | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 68 | |
Leased equipment | ||
Premises and Equipment, Net, by Type | ||
Finance lease, right-of-use asset, before accumulated amortization | 36 | |
Leasehold improvements | ||
Premises and Equipment, Net, by Type | ||
Finance lease, right-of-use asset, before accumulated amortization | 9 | |
Fixed assets in progress | ||
Premises and Equipment, Net, by Type | ||
Premises and equipment, gross | 40 | |
Right-of-use asset | ||
Premises and Equipment, Net, by Type | ||
Finance lease, right-of-use asset, before accumulated amortization | $ 22 |
Premises and Equipment - Narrat
Premises and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 59 | $ 50 | $ 39 |
Mortgage Servicing Rights - Sc
Mortgage Servicing Rights - Schedule of Changes in the Fair Value of Residential First Mortgage MSRs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Asset at Fair Value | |||
Balance at beginning of period | $ 290 | ||
Fair value of MSRs at end of period | 291 | $ 290 | |
Residential first mortgage | |||
Servicing Asset at Fair Value | |||
Balance at beginning of period | 290 | 291 | $ 335 |
Additions from loans sold with servicing retained | 223 | 356 | 288 |
Reductions from sales | (57) | (339) | (310) |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | (31) | ||
Changes in estimates of fair value due to interest rate risk | 9 | ||
Fair value of MSRs at end of period | 291 | 290 | 291 |
Net (loss) return on mortgage servicing rights | Residential first mortgage | |||
Servicing Asset at Fair Value | |||
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | (89) | (20) | (31) |
Changes in estimates of fair value due to interest rate risk | $ (76) | $ 2 | $ 9 |
Mortgage Servicing Rights - Sum
Mortgage Servicing Rights - Summary of Adverse Changes to Weighted-Average Assumptions on the Fair Value of Servicing Rights (Details) - Mortgage servicing rights - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Actual | ||
Option adjusted spread (in percentage) | 5.34% | 5.42% |
Constant prepayment rate (in percentage) | 10.59% | 9.57% |
Weighted average cost to service per loan (in USD per share) | $ 84.41 | $ 85.57 |
Fair value impact due to 10% adverse change | ||
Option adjusted spread | $ 284 | $ 284 |
Constant prepayment rate | 271 | 278 |
Weighted average cost to service per loan (in dollars per share) | 285 | 286 |
Fair value impact due to 20% adverse change | ||
Option adjusted spread | 280 | 280 |
Constant prepayment rate | 257 | 268 |
Weighted average cost to service per loan (in dollars per share) | $ 282 | $ 283 |
Mortgage Servicing Rights - S_2
Mortgage Servicing Rights - Summary of Income and Fees (Details) - Residential first mortgage - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Servicing Assets at Fair Value | |||
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | $ (31) | ||
Changes in fair value | 9 | ||
Net (loss) return on mortgage servicing rights | |||
Servicing Assets at Fair Value | |||
Servicing fees, ancillary income and late fees | $ 96 | $ 65 | 60 |
Decrease in MSR fair value due to pay-offs, pay-downs, run-off, model changes, and other | (89) | (20) | (31) |
Changes in fair value | (76) | 2 | 9 |
Gain (loss) on MSR derivatives | 76 | (5) | (8) |
Net transaction costs | (1) | (6) | (8) |
Total return (loss) included in net return on mortgage servicing rights | 6 | 36 | 22 |
Loan Administration Income | |||
Servicing Assets at Fair Value | |||
Servicing fees, ancillary income and late fees | 106 | 54 | 35 |
Charges on subserviced custodial balances | (67) | (29) | (11) |
Other servicing charges | (9) | (2) | (3) |
Total income on mortgage loans subserviced, included in loan administration | $ 30 | $ 23 | $ 21 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Net interest income | $ 152,000,000 | $ 146,000,000 | $ 138,000,000 | $ 126,000,000 | $ 152,000,000 | $ 124,000,000 | $ 115,000,000 | $ 106,000,000 | $ 562,000,000 | $ 497,000,000 | $ 390,000,000 |
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months | 0 | 0 | |||||||||
Right to claim cash | 63,000,000 | 53,000,000 | 63,000,000 | 53,000,000 | |||||||
Obligation to return cash | 14,000,000 | 14,000,000 | |||||||||
Not designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Right to claim cash | 63,000,000 | 53,000,000 | 63,000,000 | 53,000,000 | |||||||
Obligation to receive cash irrespective of position | 34,000,000 | 30,000,000 | 34,000,000 | 30,000,000 | |||||||
Obligation to return cash | 0 | 14,000,000 | 0 | 14,000,000 | |||||||
Designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Right to claim cash | 29,000,000 | 23,000,000 | 29,000,000 | 23,000,000 | |||||||
Interest rate swaps on FHLB advances | Carrying Value | Designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Hedged asset, fair value hedge | 200,000,000 | 0 | 200,000,000 | 0 | |||||||
Interest rate swaps on FHLB advances | Total fair value | Designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Derivative, fair value, hedging adjustment | 0 | 0 | |||||||||
Interest rate swaps on AFS securities | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Closed portfolio and beneficial interest, last-of-layer, amortized cost | 289,000,000 | 289,000,000 | |||||||||
Hedged asset, fair value hedge, last-of-layer, amount | 291,000,000 | 291,000,000 | |||||||||
Interest rate swaps on AFS securities | Designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Hedged asset, fair value hedge, cumulative increase (decrease) | 1,000,000 | 1,000,000 | |||||||||
Closed portfolio and beneficial interest, last-of-layer, amortized cost | 0 | 0 | |||||||||
Interest rate swaps on FHLB advances | Carrying Value | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Carrying amount of hedged CDs | $ 287,000,000 | $ 287,000,000 | |||||||||
Wells Fargo Branch Acquisition | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Additions of deposits | $ 1,800,000,000 | 1,800,000,000 | |||||||||
Cash Flow Hedges | Reclassification from AOCI | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Net interest income | $ 29,000,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Notional Amount, Estimated Fair Value and Maturity of Derivative Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Other liabilities | ||
Liabilities | ||
Notional Amount | $ 6,938 | |
Fair Value | 39 | |
Designated as hedging instrument | Other assets | ||
Assets | ||
Notional Amount | $ 300 | |
Fair Value | 0 | |
Designated as hedging instrument | Interest rate swaps on FHLB advances | Other assets | ||
Assets | ||
Notional Amount | 200 | |
Fair Value | 0 | |
Designated as hedging instrument | Interest rate swaps on AFS securities | Other assets | ||
Assets | ||
Notional Amount | 100 | |
Fair Value | 0 | |
Designated as hedging instrument | Interest rate swaps on CDs | Other assets | ||
Assets | ||
Notional Amount | 20 | |
Fair Value | 0 | |
Designated as hedging instrument | Interest rate swaps on CDs | Other liabilities | ||
Liabilities | ||
Notional Amount | 10 | |
Fair Value | 0 | |
Not designated as hedging instrument | ||
Assets | ||
Fair Value | 28 | 27 |
Liabilities | ||
Fair Value | 17 | 39 |
Not designated as hedging instrument | Other assets | ||
Assets | ||
Notional Amount | 7,137 | 4,493 |
Fair Value | 62 | 47 |
Not designated as hedging instrument | Other liabilities | ||
Liabilities | ||
Notional Amount | 7,640 | |
Fair Value | 18 | |
Not designated as hedging instrument | Futures | ||
Liabilities | ||
Fair Value | 1 | |
Not designated as hedging instrument | Futures | Other assets | ||
Assets | ||
Notional Amount | 550 | 248 |
Fair Value | 0 | 0 |
Not designated as hedging instrument | Futures | Other liabilities | ||
Liabilities | ||
Notional Amount | 1,513 | |
Fair Value | 1 | |
Not designated as hedging instrument | Mortgage-backed securities forwards | ||
Assets | ||
Fair Value | 2 | 4 |
Liabilities | ||
Fair Value | 9 | 31 |
Not designated as hedging instrument | Mortgage-backed securities forwards | Other assets | ||
Assets | ||
Notional Amount | 1,918 | 362 |
Fair Value | 2 | 4 |
Not designated as hedging instrument | Mortgage-backed securities forwards | Other liabilities | ||
Liabilities | ||
Notional Amount | 5,749 | 4,625 |
Fair Value | 9 | 31 |
Not designated as hedging instrument | Rate lock commitments | Other assets | ||
Assets | ||
Notional Amount | 3,870 | 2,221 |
Fair Value | 34 | 20 |
Not designated as hedging instrument | Rate lock commitments | Other liabilities | ||
Liabilities | ||
Notional Amount | 229 | 45 |
Fair Value | 1 | 0 |
Not designated as hedging instrument | Interest rate swaps and swaptions | ||
Assets | ||
Fair Value | 26 | 23 |
Not designated as hedging instrument | Interest rate swaps and swaptions | Other assets | ||
Assets | ||
Notional Amount | 799 | 1,662 |
Fair Value | 26 | 23 |
Not designated as hedging instrument | Interest rate swaps and swaptions | ||
Liabilities | ||
Fair Value | 8 | 7 |
Not designated as hedging instrument | Interest rate swaps and swaptions | Other liabilities | ||
Liabilities | ||
Notional Amount | 1,662 | 755 |
Fair Value | $ 8 | $ 7 |
Derivative Financial Instrume_5
Derivative Financial Instruments - Derivatives Subject to a Master Netting Arrangement (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Gross amounts not offset in the statement of financial position, cash collateral | $ 14 | |
Liabilities | ||
Gross amounts not offset in the statement of financial position, cash collateral | $ 63 | 53 |
Designated as hedging instrument | ||
Liabilities | ||
Gross amounts not offset in the statement of financial position, cash collateral | 29 | 23 |
Not designated as hedging instrument | ||
Assets | ||
Gross Amount | 28 | 27 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 28 | 27 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | 0 | 14 |
Liabilities | ||
Gross Amount | 17 | 39 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 17 | 39 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | 63 | 53 |
Not designated as hedging instrument | Mortgage-backed securities forwards | ||
Assets | ||
Gross Amount | 2 | 4 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 2 | 4 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | 0 | 0 |
Liabilities | ||
Gross Amount | 9 | 31 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 9 | 31 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | 24 | 29 |
Not designated as hedging instrument | Interest rate swaps and swaptions | ||
Assets | ||
Gross Amount | 26 | 23 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 26 | 23 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | 0 | 14 |
Not designated as hedging instrument | Futures | ||
Liabilities | ||
Gross Amount | 1 | |
Gross Amounts Offset in the Statement of Financial Position | 0 | |
Net Amount Presented in the Statement of Financial Position | 1 | |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | |
Gross amounts not offset in the statement of financial position, cash collateral | 1 | |
Not designated as hedging instrument | Interest rate swaps and swaptions | ||
Liabilities | ||
Gross Amount | 8 | 7 |
Gross Amounts Offset in the Statement of Financial Position | 0 | 0 |
Net Amount Presented in the Statement of Financial Position | 8 | 7 |
Gross amounts not offset in the statement of financial position, financial instrument | 0 | 0 |
Gross amounts not offset in the statement of financial position, cash collateral | $ 39 | $ 23 |
Derivative Financial Instrume_6
Derivative Financial Instruments - Net Gain (Loss) Recognized on Designated Instruments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Net interest income | $ 152,000,000 | $ 146,000,000 | $ 138,000,000 | $ 126,000,000 | $ 152,000,000 | $ 124,000,000 | $ 115,000,000 | $ 106,000,000 | $ 562,000,000 | $ 497,000,000 | $ 390,000,000 |
Fair Value Hedging | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Gain on hedges | 0 | ||||||||||
Cash Flow Hedges | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of gain reclassified from AOCI into income | 30,000,000 | $ 5,000,000 | |||||||||
Designated as hedging instrument | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Gain on hedges | 0 | 30,000,000 | |||||||||
Interest rate contract | Cash Flow Hedges | |||||||||||
Derivative Instruments, Gain (Loss) [Line Items] | |||||||||||
Amount of gain reclassified from AOCI into income | $ 0 | $ 30,000,000 |
Derivative Financial Instrume_7
Derivative Financial Instruments - Net Gain (Loss) Recognized in Income on Derivative Instruments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Futures | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ (2) | ||
Interest rate swaps and swaptions | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 57 | ||
Interest rate swaps and swaptions | Other noninterest income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 5 | ||
Mortgage-backed securities forwards | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 21 | ||
Rate lock commitments and forward agency and loan sales | Net gain (loss) on loan sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 35 | ||
Forward commitments | Other noninterest income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 2 | ||
Not designated as hedging instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ 118 | $ (33) | $ (40) |
Not designated as hedging instrument | Futures | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | (4) | (1) | |
Not designated as hedging instrument | Interest rate swaps and swaptions | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 1 | (11) | |
Not designated as hedging instrument | Interest rate swaps and swaptions | Other noninterest income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | 3 | 2 | |
Not designated as hedging instrument | Mortgage-backed securities forwards | Net loss on mortgage servicing rights | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | (2) | 4 | |
Not designated as hedging instrument | Rate lock commitments and forward agency and loan sales | Net gain (loss) on loan sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | (31) | (34) | |
Not designated as hedging instrument | Forward commitments | Other noninterest income | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Derivative instruments not designated as hedging instruments, gain (loss), net | $ 0 | $ 0 |
Deposit Accounts - Summary of D
Deposit Accounts - Summary of Deposit Accounts (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deposits | ||
Total deposits | $ 15,146 | $ 12,380 |
Branch retail deposits | ||
Deposits | ||
Demand deposit accounts | 1,318 | 1,297 |
Savings accounts | 3,030 | 2,812 |
Money market demand accounts | 495 | 628 |
Certificates of deposit/CDARS | 2,353 | 2,387 |
Total deposits | 7,196 | 7,124 |
Commercial deposits | ||
Deposits | ||
Demand deposit accounts | 1,438 | 1,243 |
Savings accounts | 342 | 314 |
Money market demand accounts | 188 | 173 |
Total deposits | 1,968 | 1,730 |
Retail deposits | ||
Deposits | ||
Total deposits | 9,164 | 8,854 |
Government deposits | ||
Deposits | ||
Demand deposit accounts | 360 | 326 |
Savings accounts | 495 | 567 |
Certificates of deposit/CDARS | 358 | 309 |
Total deposits | 1,213 | 1,202 |
Wholesale deposits | ||
Deposits | ||
Total deposits | 633 | 583 |
Custodial deposits | ||
Deposits | ||
Total deposits | $ 4,136 | $ 1,741 |
Deposit Accounts - Scheduled Ma
Deposit Accounts - Scheduled Maturities for Certificates of Deposit (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Contractual Maturities, Certificates of Deposit, $100,000 or More | ||
Three months or less | $ 223 | $ 251 |
Over three months to six months | 238 | 165 |
Over six months to twelve months | 278 | 229 |
One to two years | 101 | 139 |
Thereafter | 35 | 33 |
Total | $ 875 | $ 817 |
Borrowings - Breakdown of FHLB
Borrowings - Breakdown of FHLB Advances and Other Borrowings Outstanding (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
Federal home loan bank, advances, maturities summary, due in next twelve months | $ 4,165 | $ 3,244 |
FHLB, current | $ 0 | $ 50 |
FHLB, interest rate | 1.45% | 1.53% |
FHLB, non-current | $ 650 | $ 150 |
Total | 4,815 | 3,394 |
Short-term fixed rate term advances | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
Federal home loan bank, advances, maturities summary, due in next twelve months | $ 3,695 | $ 2,993 |
FHLB, interest rate | 1.61% | 2.52% |
Other short-term borrowings | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank | ||
Federal home loan bank, advances, maturities summary, due in next twelve months | $ 470 | $ 251 |
FHLB, interest rate | 1.64% | 2.87% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) - USD ($) | Jul. 11, 2016 | Dec. 31, 2019 |
Federal Home Loan Bank, Advances | ||
Payment of interest on trust preferred securities | $ 0 | |
Senior Notes | Senior Notes Maturing in 2021 | ||
Federal Home Loan Bank, Advances | ||
Debt instrument face amount | $ 250,000,000 | |
Redemption price percentage | 100.00% | |
Senior Notes | Senior Notes Maturing in 2021 | Treasury rate | ||
Federal Home Loan Bank, Advances | ||
Variable rate on spread | 0.50% |
Borrowings - Detailed Informati
Borrowings - Detailed Information on FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Federal Home Loan Bank, Advances, Activity for Year | |||
Maximum outstanding at any month end | $ 5,005 | $ 5,740 | $ 5,665 |
Average outstanding balance | 3,064 | 4,713 | 4,590 |
Average remaining borrowing capacity | $ 4,194 | $ 2,089 | $ 1,195 |
Weighted average interest rate | 1.90% | 1.96% | 1.30% |
Borrowings - Maturity Dates of
Borrowings - Maturity Dates of FHLB Advances and Other Borrowings (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Federal Home Loan Bank, Advances by Interest Rate Type, by Maturity | ||
2020 | $ 4,165 | $ 3,244 |
2021 | 0 | |
2022 | 0 | |
2023 | 250 | |
Thereafter | 400 | |
Total | $ 4,815 | $ 3,394 |
Borrowings - Summary of Long-Te
Borrowings - Summary of Long-Term Debt, Net of Debt Issuance Costs (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Debt Instrument | |||
Senior Notes | $ 249 | $ 248 | |
Trust Preferred Securities | $ 247 | $ 247 | |
Interest Rate | 6.125% | 6.125% | |
Total other long-term debt | $ 496 | $ 495 | $ 495 |
Plus 3.25%, matures 2032 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 26 | $ 26 | |
Interest Rate | 5.20% | 6.07% | |
Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 26 | $ 26 | |
Interest Rate | 5.24% | 5.69% | |
Plus 3.25%, matures 2033 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 26 | $ 26 | |
Interest Rate | 5.21% | 6.05% | |
Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 26 | $ 26 | |
Interest Rate | 3.99% | 4.44% | |
Plus 2.00%, matures 2035 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 26 | $ 26 | |
Interest Rate | 3.99% | 4.44% | |
Plus 1.75%, matures 2035 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 51 | $ 51 | |
Interest Rate | 3.64% | 4.54% | |
Plus 1.50%, matures 2035 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 25 | $ 25 | |
Interest Rate | 3.49% | 3.94% | |
Plus 1.45%, matures 2037 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 25 | $ 25 | |
Interest Rate | 3.34% | 4.24% | |
Plus 2.50%, matures 2037 | |||
Debt Instrument | |||
Trust Preferred Securities | $ 16 | $ 16 | |
Interest Rate | 4.39% | 5.29% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) | |||
Balance | $ 1,570 | $ 1,399 | $ 1,336 |
Other comprehensive income (loss), net of tax | 48 | (31) | (9) |
Balance | 1,788 | 1,570 | 1,399 |
Investment Securities | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance | (47) | (18) | (8) |
Unrealized gain (loss) | 57 | (30) | (19) |
Less: Tax provision (benefit) | 14 | (7) | (7) |
Net unrealized gain (loss) | 43 | (23) | (12) |
Reclassifications out of AOCI | 6 | (1) | 3 |
Less: Tax provision | 1 | 0 | 1 |
Net unrealized gain (loss) reclassified out of AOCI | 5 | (1) | 2 |
Reclassification of certain income tax effects | 0 | (5) | 0 |
Other comprehensive income (loss), net of tax | 48 | (29) | (10) |
Balance | 1 | (47) | (18) |
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) | |||
Balance | 0 | 2 | 1 |
Unrealized gain (loss) | 0 | 27 | 5 |
Less: Tax provision (benefit) | 0 | 7 | 1 |
Net unrealized gain (loss) | 0 | 20 | 4 |
Reclassifications out of AOCI | (30) | (5) | |
Less: Tax provision | 0 | (8) | (2) |
Net unrealized gain (loss) reclassified out of AOCI | 0 | (22) | (3) |
Other comprehensive income (loss), net of tax | 0 | (2) | 1 |
Balance | $ 0 | $ 0 | $ 2 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||||||||||
Net income | $ 58 | $ 63 | $ 61 | $ 36 | $ 54 | $ 48 | $ 50 | $ 35 | $ 218 | $ 187 | $ 63 |
Weighted Average Shares | |||||||||||
Weighted average common shares outstanding (in shares) | 56,584,238 | 57,520,289 | 57,093,868 | ||||||||
Effect of dilutive securities | |||||||||||
May investor warrants (in shares) | 0 | 0 | 12,287 | ||||||||
Stock-based Awards (in shares) | 654,740 | 802,661 | 1,072,188 | ||||||||
Weighted average diluted common shares (in shares) | 57,238,978 | 58,322,950 | 58,178,343 | ||||||||
Earnings per common share | |||||||||||
Basic income (loss) per share (in usd per share) | $ 1.01 | $ 1.12 | $ 1.08 | $ 0.64 | $ 0.94 | $ 0.84 | $ 0.86 | $ 0.61 | $ 3.85 | $ 3.26 | $ 1.11 |
Effect of dilutive securities | |||||||||||
May Investor Warrants (in usd per share) | 0 | 0 | 0 | ||||||||
Stock-based awards (in usd per share) | (0.05) | (0.05) | (0.02) | ||||||||
Diluted earnings per common share (in usd per share) | $ 1 | $ 1.11 | $ 1.06 | $ 0.63 | $ 0.93 | $ 0.83 | $ 0.85 | $ 0.60 | $ 3.80 | $ 3.21 | $ 1.09 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Options outstanding, beginning of year (in shares) | 36,093 | 40,718 | 45,791 |
Options canceled, forfeited and expired (in shares) | (1,894) | (4,625) | (5,073) |
Options outstanding, end of year (in shares) | 34,199 | 36,093 | 40,718 |
Options vested and expected to vest, end of year (in shares) | 34,199 | 36,093 | 40,718 |
Options exercisable, end of year (in shares) | 16,968 | 17,991 | 20,286 |
Weighted Average Exercise Price | |||
Options outstanding, beginning of year (in dollars per share) | $ 80 | $ 80 | $ 80 |
Options canceled, forfeited and expired (in dollars per share) | 80 | 80 | 80 |
Options outstanding, end of year (in dollars per share) | 80 | 80 | 80 |
Options vested and expected to vest, end of year (in dollars per share) | 80 | 80 | 80 |
Options exercisable, end of year (in dollars per share) | $ 80 | $ 80 | $ 80 |
Weighted average remaining contractual life | 1 month 6 days |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | Mar. 20, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 01, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Intrinsic value of options exercised | $ 0 | $ 0 | $ 0 | ||
Aggregate intrinsic value of options outstanding | 0 | 0 | |||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 10,000,000 | 9,000,000 | 7,000,000 | ||
Unrecognized stock based compensation expense | $ 23,000,000 | ||||
Period to be recognized | 1 year 9 months 18 days | ||||
2006 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 13,000,000 | $ 11,000,000 | $ 11,000,000 | ||
2006 Plan | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options available for future grants (in shares) | 1,416,986 | ||||
LTIP | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
2018 ExLTIP II | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
2017 ESPP | Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 800,000 | ||||
Number of shares issued (in shares) | 106,881 | 114,385 | |||
Share-based Payment Arrangement, Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% | ||||
Share-based Payment Arrangement, Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% | ||||
Share-based Payment Arrangement, Tranche Three [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 0.33% |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Restricted Stock Activity (Details) - Restricted Stock Units - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | |||
Non-vested balance at beginning of period (in shares) | 1,620,568 | 1,290,450 | 1,461,910 |
Granted (in shares) | 338,737 | 875,352 | 357,058 |
Vested (in shares) | (379,936) | (401,379) | (385,454) |
Canceled and forfeited (in shares) | (180,242) | (143,855) | (143,064) |
Non-vested balance at end of period (in shares) | 1,399,127 | 1,620,568 | 1,290,450 |
Weighted Average Grant-Date Fair Value per Share | |||
Non-vested balance at beginning of period (in USD per share) | $ 27.27 | $ 20.52 | $ 17.68 |
Granted (in USD per share) | 32.11 | 34.32 | 28.06 |
Vested (in USD per share) | 26.98 | 23.04 | 17.36 |
Canceled and forfeited (in USD per share) | 25.66 | 21.46 | 18.89 |
Non-vested balance at end of period (in USD per share) | $ 28.72 | $ 27.27 | $ 20.52 |
Income Taxes - Components of th
Income Taxes - Components of the Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current | |||||||||||
Federal | $ 17 | $ 0 | $ 2 | ||||||||
State | 6 | 1 | 0 | ||||||||
Total current income tax expense | 23 | 1 | 2 | ||||||||
Deferred | |||||||||||
Federal | 39 | 47 | 66 | ||||||||
Federal impact of tax reform | 0 | 0 | 80 | ||||||||
State | (14) | (3) | 0 | ||||||||
Total deferred income tax expense (benefit) | 25 | 44 | 146 | ||||||||
Total income tax expense | $ 11 | $ 15 | $ 14 | $ 8 | $ 12 | $ 12 | $ 12 | $ 9 | $ 48 | $ 45 | $ 148 |
Income Taxes - Summary of Diffe
Income Taxes - Summary of Differences Between the Effective Tax Rate and the Statutory Federal Tax Rate (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effective Income Tax Rate Reconciliation, Amount | |||||||||||
Provision at statutory federal income tax rate | $ 56 | $ 49 | $ 74 | ||||||||
Low income housing tax losses | (1) | (1) | |||||||||
Bank owned life insurance | (2) | (2) | (3) | ||||||||
Tax reform | 0 | 0 | 80 | ||||||||
State income tax (benefit), net of federal income tax effect (net of valuation allowance release) | (6) | (2) | 0 | ||||||||
Other | 1 | 1 | (3) | ||||||||
Total income tax expense | $ 11 | $ 15 | $ 14 | $ 8 | $ 12 | $ 12 | $ 12 | $ 9 | $ 48 | $ 45 | $ 148 |
Effective tax provision rate | 18.10% | 19.40% | 70.10% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards | |||
Temporary differences related to provision for loan losses not expected to reverse therefore not included in deferred tax assets | $ 4 | ||
Total state net operating loss carryforwards | 454 | ||
Valuation allowance | 5 | $ 14 | |
Income tax penalties and interest expense (less than) | 1 | 0 | $ 0 |
Federal | |||
Operating Loss Carryforwards | |||
Operating loss carryforwards | 68 | $ 154 | |
State and Local Jurisdiction | |||
Operating Loss Carryforwards | |||
Total state deferred tax asset | 35 | ||
Operating loss carryforwards, amount subject to annual use limitation | 30 | ||
Valuation allowance | $ 5 |
Income Taxes - Temporary Differ
Income Taxes - Temporary Differences and Carryforwards Giving Rise to DTAs and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Net operating loss carryforwards (Federal and State) | $ 43 | $ 58 |
Allowance for loan losses | 26 | 30 |
Accrued compensation | 12 | 10 |
Litigation settlement | 9 | 14 |
Lease liability | 6 | 0 |
Contingent consideration | 4 | 3 |
General business credits | 0 | 7 |
General business reserves | 2 | 10 |
Other | 11 | 11 |
Total | 113 | 143 |
Valuation allowance | (5) | (14) |
Total net | 108 | 129 |
Deferred tax liabilities | ||
Mark-to-market adjustments | (12) | (11) |
Premises and equipment | (7) | (8) |
State and local taxes | (7) | (3) |
Commercial lease financing | (5) | (4) |
Mortgage loan servicing rights | (5) | 0 |
Right of use asset | (6) | 0 |
Total | (42) | (26) |
Net deferred tax asset | $ 66 | $ 103 |
Regulatory Capital (Details)
Regulatory Capital (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Tier 1 Capital | ||
Tier 1 capital (to adjusted avg. total assets), actual amount | $ 1,720 | $ 1,505 |
Tier 1 capital (to adjusted tangible assets), actual ratio (in percentage) | 7.57% | 8.29% |
Tier 1 capital, for capital adequacy purposes amount | $ 909 | $ 726 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio (in percentage) | 4.00% | 4.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,136 | $ 908 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (in percentage) | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,480 | $ 1,265 |
Common equity Tier 1 capital (to RWA), actual ratio (in percentage) | 9.32% | 10.54% |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Amount | $ 715 | $ 540 |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Ratio (in percentage) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 1,033 | $ 780 |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (in percentage) | 6.50% | 6.50% |
Tier One Risk Based Capital | ||
Tier 1 capital, actual amount | $ 1,720 | $ 1,505 |
Tier 1 capital (to risk weighted assets), actual ratio (in percentage) | 10.83% | 12.54% |
Tier 1 capital, for capital adequacy purposes amount | $ 953 | $ 720 |
Tier 1 capital (to risk weighted assets), for capital adequacy purposes ratio (in percentage) | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,271 | $ 960 |
Tier 1 capital (to risk weighted assets), capitalized under prompt corrective action provision ratio (in percentage) | 8.00% | 8.00% |
Capital | ||
Total capital, actual amount | $ 1,830 | $ 1,637 |
Total capital (to risk weighted assets), actual ratio (in percentage) | 11.52% | 13.63% |
Total capital, for capital adequacy purposes amount | $ 1,271 | $ 960 |
Total capital (to risk weighted assets), for capital adequacy purposes ratio (in percentage) | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,589 | $ 1,201 |
Total capital (to risk weighted assets), capitalized under prompt corrective action provisions ratio (in percentage) | 10.00% | 10.00% |
Bank | ||
Tier 1 Capital | ||
Tier 1 capital (to adjusted avg. total assets), actual amount | $ 1,752 | $ 1,574 |
Tier 1 capital (to adjusted tangible assets), actual ratio (in percentage) | 7.71% | 8.67% |
Tier 1 capital, for capital adequacy purposes amount | $ 909 | $ 726 |
Tier 1 capital (to adjusted tangible assets), for capital adequacy purposes ratio (in percentage) | 4.00% | 4.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,136 | $ 908 |
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (in percentage) | 5.00% | 5.00% |
Common Equity Tier 1 Capital | ||
Common equity Tier 1 capital (to RWA), actual amount | $ 1,752 | $ 1,574 |
Common equity Tier 1 capital (to RWA), actual ratio (in percentage) | 11.04% | 13.12% |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Amount | $ 714 | $ 540 |
Common equity Tier 1 capital (to RWA), For Capital Adequacy Purposes, Ratio (in percentage) | 4.50% | 4.50% |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 1,032 | $ 780 |
Common equity Tier 1 capital (to RWA), Well Capitalized Under Prompt Corrective Action Provisions, Ratio (in percentage) | 6.50% | 6.50% |
Tier One Risk Based Capital | ||
Tier 1 capital, actual amount | $ 1,752 | $ 1,574 |
Tier 1 capital (to risk weighted assets), actual ratio (in percentage) | 11.04% | 13.12% |
Tier 1 capital, for capital adequacy purposes amount | $ 952 | $ 720 |
Tier 1 capital (to risk weighted assets), for capital adequacy purposes ratio (in percentage) | 6.00% | 6.00% |
Tier 1 capital, capitalized under prompt corrective action provision amount | $ 1,270 | $ 960 |
Tier 1 capital (to risk weighted assets), capitalized under prompt corrective action provision ratio (in percentage) | 8.00% | 8.00% |
Capital | ||
Total capital, actual amount | $ 1,862 | $ 1,705 |
Total capital (to risk weighted assets), actual ratio (in percentage) | 11.73% | 14.21% |
Total capital, for capital adequacy purposes amount | $ 1,270 | $ 960 |
Total capital (to risk weighted assets), for capital adequacy purposes ratio (in percentage) | 8.00% | 8.00% |
Total capital, capitalized under prompt corrective action provisions amount | $ 1,587 | $ 1,200 |
Total capital (to risk weighted assets), capitalized under prompt corrective action provisions ratio (in percentage) | 10.00% | 10.00% |
Legal Proceedings, Contingenc_3
Legal Proceedings, Contingencies and Commitments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (in percentage) | 5.00% | 5.00% |
Business acquisition threshold (in percentage) | 33.30% | |
Accrued reserve for contingent liabilities | $ 3 | $ 2 |
Letter of credit, reserve amount | 3 | $ 3 |
Supplemental executive retirement plan liability | $ 16 | |
Bank | ||
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (in percentage) | 5.00% | 5.00% |
DOJ agreement | ||
Loss Contingency, Settlement | ||
Litigation settlement, initial payment | $ 15 | |
Litigation settlement payment amount | 118 | |
Accrued reserve for contingent liabilities | $ 35 | |
DOJ agreement | Bank | ||
Loss Contingency, Settlement | ||
Tier 1 capital (to adjusted tangible assets), capitalized under prompt corrective action provision ratio (in percentage) | 11.00% | |
DOJ agreement | Subsequent Payments | ||
Loss Contingency, Settlement | ||
Litigation expense | $ 25 |
Legal Proceedings, Contingenc_4
Legal Proceedings, Contingencies and Commitments - Summary of the Contractual Amount of Significant Commitments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Mortgage loan interest-rate lock commitments | ||
Commitments | ||
Commitments to extend credit | $ 4,099 | $ 2,293 |
Warehouse loan commitments | ||
Commitments | ||
Commitments to extend credit | 1,944 | 2,334 |
Commercial and industrial commitments | ||
Commitments | ||
Commitments to extend credit | 1,107 | 918 |
Other commercial commitments | ||
Commitments | ||
Commitments to extend credit | 2,015 | 1,260 |
HELOC commitments | ||
Commitments | ||
Commitments to extend credit | 558 | 429 |
Other consumer commitments | ||
Commitments | ||
Commitments to extend credit | 175 | 108 |
Standby and commercial letters of credit | ||
Commitments | ||
Commitments to extend credit | $ 82 | $ 63 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Instruments Carried at Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | $ 2,116 | $ 2,142 |
Loans held-for-sale | 5,219 | |
Loans held-for-investment | 12 | 10 |
Mortgage servicing rights | 291 | 290 |
Total assets at fair value | 5,231 | 3,742 |
Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 947 | 1,374 |
Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1,015 | 662 |
Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 31 | 32 |
Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 77 | 41 |
Other MBS | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 19 | |
Certificates of deposit | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1 | 1 |
Total fair value | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 2,116 | 2,142 |
Loans held-for-sale | 5,258 | 3,870 |
Loans held-for-investment | 12,031 | 8,966 |
Mortgage servicing rights | 291 | 290 |
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (10) | (6) |
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 | |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 0 | 0 |
Total fair value | Level 2 | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 2,116 | 2,142 |
Loans held-for-sale | 5,258 | 3,870 |
Loans held-for-investment | 10 | 8 |
Mortgage servicing rights | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 0 | 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 | 12,021 | 8,958 |
Mortgage servicing rights | 291 | 290 |
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (10) | (6) |
Recurring | Level 1 | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 0 | 0 |
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
DOJ litigation settlement | 0 | 0 |
Total liabilities at fair value | 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 | Futures | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 1 | Interest rate swaps on FHLB advances | ||
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 and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Recurring | Level 1 | Interest rate swaps and swaptions | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 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 | 0 |
Recurring | Level 1 | Other MBS | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 1 | Certificates of deposit | ||
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 | 7,373 | 5,909 |
Liabilities, Fair Value Disclosure | ||
DOJ litigation settlement | 0 | 0 |
Total liabilities at fair value | (17) | (39) |
Recurring | Level 2 | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Futures | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 2 | Interest rate swaps on FHLB advances | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Level 2 | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 2 | 4 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (9) | (31) |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 26 | 23 |
Recurring | Level 2 | Interest rate swaps and swaptions | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (8) | (7) |
Recurring | Level 2 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | 0 | 0 |
Recurring | Level 2 | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 947 | 1,374 |
Recurring | Level 2 | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1,015 | 662 |
Recurring | Level 2 | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 31 | 32 |
Recurring | Level 2 | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 77 | 42 |
Recurring | Level 2 | Other MBS | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 45 | 32 |
Recurring | Level 2 | Certificates of deposit | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1 | |
Recurring | Level 3 | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 291 | 290 |
Total assets at fair value | 327 | 312 |
Liabilities, Fair Value Disclosure | ||
DOJ litigation settlement | (35) | (60) |
Total liabilities at fair value | (46) | (66) |
Recurring | Level 3 | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 34 | 20 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Level 3 | Futures | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Level 3 | Interest rate swaps on FHLB advances | ||
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 and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 0 | 0 |
Recurring | Level 3 | Interest rate swaps and swaptions | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (10) | (6) |
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 | 0 |
Recurring | Level 3 | Other MBS | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | 0 |
Recurring | Level 3 | Certificates of deposit | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 0 | |
Recurring | Total fair value | ||
Assets, Fair Value Disclosure | ||
Mortgage servicing rights | 291 | 290 |
Total assets at fair value | 7,700 | 6,221 |
Liabilities, Fair Value Disclosure | ||
DOJ litigation settlement | (35) | (60) |
Total liabilities at fair value | (63) | (105) |
Recurring | Total fair value | Rate lock commitments | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 34 | 20 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Total fair value | Futures | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | 0 | |
Recurring | Total fair value | Interest rate swaps on FHLB advances | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (1) | |
Recurring | Total fair value | Mortgage-backed securities forwards | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 2 | 4 |
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (9) | (31) |
Recurring | Total fair value | Interest rate swaps and swaptions | ||
Assets, Fair Value Disclosure | ||
Derivative assets | 26 | 23 |
Recurring | Total fair value | Interest rate swaps and swaptions | ||
Liabilities, Fair Value Disclosure | ||
Derivative liabilities | (8) | (7) |
Recurring | Total fair value | Contingent consideration | ||
Liabilities, Fair Value Disclosure | ||
Contingent consideration | (10) | (6) |
Recurring | Total fair value | Residential first mortgage loans | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 3,732 | |
Loans held-for-investment | 10 | 8 |
Recurring | Total fair value | Home equity | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | |
Loans held-for-investment | 2 | 2 |
Recurring | Total fair value | Agency - Commercial | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 947 | 1,374 |
Recurring | Total fair value | Agency - Residential | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1,015 | 662 |
Recurring | Total fair value | Municipal obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 31 | 32 |
Recurring | Total fair value | Corporate debt obligations | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 77 | 42 |
Recurring | Total fair value | Other MBS | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 45 | 32 |
Recurring | Total fair value | Certificates of deposit | ||
Assets, Fair Value Disclosure | ||
Investment securities available-for-sale | 1 | |
Home equity | Recurring | Level 1 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 0 | 0 |
Home equity | Recurring | Level 2 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 0 | 0 |
Home equity | Recurring | Level 3 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-investment | 2 | 2 |
Residential first mortgage loans | Recurring | Level 1 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | 0 |
Residential first mortgage loans | Recurring | Level 2 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 5,219 | 3,732 |
Loans held-for-investment | 10 | 8 |
Residential first mortgage loans | Recurring | Level 3 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | 0 |
Loans held-for-investment | 0 | $ 0 |
Commercial Loan | Recurring | Level 1 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | |
Commercial Loan | Recurring | Level 2 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | 0 | |
Commercial Loan | Recurring | Level 3 | ||
Assets, Fair Value Disclosure | ||
Loans held-for-sale | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Accrued reserve for contingent liabilities | $ 3 | $ 2 |
DOJ agreement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Loss contingency accrual, period increase (decrease) | 25 | |
Accrued reserve for contingent liabilities | $ 35 | |
Measurement input, expected term | Residential mortgage servicing rights capitalized | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | ||
Weighted-average life | 4 years 1 month 6 days | 5 years 2 months 12 days |
Fair Value Measurements - Roll
Fair Value Measurements - Roll Forward of Financial Instruments (Details) - Recurring - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | $ 312 | $ 319 | $ 418 |
Total gains/(losses) recorded in earnings | (79) | (52) | 35 |
Purchases / Originations | 549 | 591 | 555 |
Sales | (57) | (339) | (362) |
Settlement | 0 | (2) | (9) |
Transfers In (Out) | (398) | (205) | (318) |
Balance at End of Year | 327 | 312 | 319 |
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (66) | (85) | |
Total gains/(losses) recorded in earnings | 18 | 13 | |
Purchases / Originations | 0 | 0 | |
Sales | 0 | 0 | |
Settlement | 3 | 6 | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | (45) | (66) | (85) |
Home equity | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 2 | 4 | 65 |
Total gains/(losses) recorded in earnings | 2 | ||
Sales | 0 | ||
Settlement | (8) | ||
Transfers In (Out) | (55) | ||
Balance at End of Year | 2 | 2 | 4 |
Mortgage servicing rights | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 290 | 291 | 335 |
Total gains/(losses) recorded in earnings | (22) | ||
Purchases / Originations | 288 | ||
Sales | (310) | ||
Balance at End of Year | 291 | 290 | 291 |
Rate lock commitments | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 20 | 24 | 18 |
Total gains/(losses) recorded in earnings | 54 | ||
Purchases / Originations | 267 | ||
Sales | 0 | ||
Settlement | 0 | ||
Transfers In (Out) | (315) | ||
Balance at End of Year | 34 | 20 | 24 |
DOJ litigation settlement | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (60) | (60) | (60) |
Total gains/(losses) recorded in earnings | 0 | ||
Purchases / Originations | 0 | ||
Sales | 0 | ||
Settlement | 0 | ||
Transfers In (Out) | 0 | ||
Balance at End of Year | (35) | (60) | (60) |
Contingent consideration | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (6) | ||
Total gains/(losses) recorded in earnings | (1) | ||
Purchases / Originations | (25) | ||
Settlement | 1 | ||
Balance at End of Year | (6) | ||
Level 3 | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (85) | (60) | |
Total gains/(losses) recorded in earnings | (1) | ||
Purchases / Originations | (25) | ||
Sales | 0 | ||
Settlement | 1 | ||
Transfers In (Out) | 0 | ||
Balance at End of Year | (85) | ||
Level 3 | Home equity | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 2 | 4 | |
Total gains/(losses) recorded in earnings | 0 | 0 | |
Purchases / Originations | 0 | 0 | |
Sales | 0 | 0 | |
Settlement | 0 | (2) | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | 2 | 4 | |
Level 3 | Home equity | Loans held-for-sale | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 0 | 0 | |
Total gains/(losses) recorded in earnings | 1 | ||
Purchases / Originations | 0 | ||
Sales | (52) | ||
Settlement | (1) | ||
Transfers In (Out) | 52 | ||
Balance at End of Year | 0 | ||
Level 3 | Mortgage servicing rights | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 290 | 291 | |
Total gains/(losses) recorded in earnings | (165) | (18) | |
Purchases / Originations | 223 | 356 | |
Sales | (57) | (339) | |
Settlement | 0 | 0 | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | 290 | 291 | |
Level 3 | Rate lock commitments | |||
Assets, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | 20 | 24 | |
Total gains/(losses) recorded in earnings | 86 | (34) | |
Purchases / Originations | 326 | 235 | |
Sales | 0 | 0 | |
Settlement | 0 | 0 | |
Transfers In (Out) | (398) | (205) | |
Balance at End of Year | 20 | 24 | |
Level 3 | DOJ litigation settlement | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (60) | (60) | |
Total gains/(losses) recorded in earnings | 25 | 0 | |
Purchases / Originations | 0 | 0 | |
Sales | 0 | 0 | |
Settlement | 0 | 0 | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | (60) | (60) | |
Level 3 | Contingent consideration | |||
Liabilities, Unobservable Input Reconciliation | |||
Balance at Beginning of Year | (6) | (25) | |
Total gains/(losses) recorded in earnings | (7) | 13 | |
Purchases / Originations | 0 | 0 | |
Sales | 0 | 0 | |
Settlement | 3 | 6 | |
Transfers In (Out) | 0 | 0 | |
Balance at End of Year | $ (10) | $ (6) | $ (25) |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information about Recurring Level 3 Fair Value Financial Instruments (Details) - Recurring - Level 3 $ in Millions | Dec. 31, 2019USD ($)orgination_pull-through_rate_per_loan$ / loanoption_adjusted_spread_per_loandiscount_rate_per_loanconstant_default_rate_per_loanconstant_prepayment_rate_per_loan | Dec. 31, 2018USD ($)orgination_pull-through_rate_per_loan$ / loanoption_adjusted_spread_per_loandiscount_rate_per_loanconstant_default_rate_per_loanconstant_prepayment_rate_per_loan |
Home equity | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held-for-investment | $ | $ 2 | $ 2 |
Home equity | Discount rate | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.072 | 0.072 |
Home equity | Discount rate | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.108 | 0.108 |
Home equity | Discount rate | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | discount_rate_per_loan | 0.090 | 0.090 |
Home equity | Constant prepayment rate | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.130 | 0.136 |
Home equity | Constant prepayment rate | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.195 | 0.203 |
Home equity | Constant prepayment rate | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.162 | 0.169 |
Home equity | Constant default rate | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.027 | 0.030 |
Home equity | Constant default rate | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.040 | 0.046 |
Home equity | Constant default rate | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | constant_default_rate_per_loan | 0.033 | 0.038 |
Mortgage servicing rights | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Mortgage servicing rights | $ | $ 291 | $ 290 |
Mortgage servicing rights | Constant prepayment rate | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | 0 | 0 |
Mortgage servicing rights | Constant prepayment rate | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | 0.123 | 0.107 |
Mortgage servicing rights | Constant prepayment rate | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | 0.106 | 0.096 |
Mortgage servicing rights | Option adjusted spread | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | option_adjusted_spread_per_loan | 0.024 | 0.021 |
Mortgage servicing rights | Option adjusted spread | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | option_adjusted_spread_per_loan | 0.204 | 0.259 |
Mortgage servicing rights | Option adjusted spread | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | option_adjusted_spread_per_loan | 0.053 | 0.054 |
Mortgage servicing rights | Weighted average cost to service per loan | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | $ / loan | 67 | 67 |
Mortgage servicing rights | Weighted average cost to service per loan | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | $ / loan | 95 | 95 |
Mortgage servicing rights | Weighted average cost to service per loan | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Weighted average cost to service per loan (in dollars per loan) | $ / loan | 84 | 86 |
Rate lock commitments | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Derivative assets | $ | $ 34 | $ 20 |
Rate lock commitments | Origination pull-through rate | Range (Weighted Average) | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Rate lock commitment, fair value input (in percentage) | orgination_pull-through_rate_per_loan | 0.800 | 0.750 |
Rate lock commitments | Origination pull-through rate | Maximum | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Rate lock commitment, fair value input (in percentage) | orgination_pull-through_rate_per_loan | 0.872 | 0.872 |
Rate lock commitments | Origination pull-through rate | Weighted Average | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Rate lock commitment, fair value input (in percentage) | orgination_pull-through_rate_per_loan | 0.815 | 0.768 |
DOJ litigation settlement | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
DOJ litigation settlement | $ | $ (35) | $ (60) |
Contingent consideration | ||
Fair Value Inputs, Assets and Liabilities, Quantitative Information | ||
Contingent consideration | $ | $ (10) | $ (6) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets Measured at Fair Value on a Nonrecurring Basis (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Loans held-for-sale | $ 5,219 | $ 5,219 | |||||||||
Total assets at fair value | 5,231 | $ 3,742 | 5,231 | $ 3,742 | |||||||
Total Gains/(Losses) | 101 | $ 110 | $ 75 | $ 49 | 34 | $ 43 | $ 63 | $ 60 | 335 | 200 | $ 268 |
Nonrecurring | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Loans held-for-sale | 6 | 5 | 6 | 5 | |||||||
Repossessed assets | 10 | 7 | 10 | 7 | |||||||
Total assets at fair value | 30 | 24 | 30 | 24 | |||||||
Fair value gains (losses) on loans | (1) | (1) | |||||||||
Fair value gains (losses) on repossessed assets | (3) | (3) | |||||||||
Total Gains/(Losses) | (9) | (8) | |||||||||
Nonrecurring | Level 2 | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Loans held-for-sale | 6 | 5 | 6 | 5 | |||||||
Repossessed assets | 0 | 0 | 0 | 0 | |||||||
Total assets at fair value | 6 | 5 | 6 | 5 | |||||||
Nonrecurring | Level 3 | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Loans held-for-sale | 0 | 0 | 0 | 0 | |||||||
Repossessed assets | 10 | 7 | 10 | 7 | |||||||
Total assets at fair value | 24 | 19 | 24 | 19 | |||||||
Nonrecurring | Residential first mortgage | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Impaired loans held-for-investment | 14 | 12 | 14 | 12 | |||||||
Residential first mortgage | Nonrecurring | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Fair value gains (losses) on loans | (5) | (4) | |||||||||
Residential first mortgage | Nonrecurring | Level 2 | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Impaired loans held-for-investment | 0 | 0 | 0 | 0 | |||||||
Residential first mortgage | Nonrecurring | Level 3 | |||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||||||||||
Impaired loans held-for-investment | $ 14 | $ 12 | $ 14 | $ 12 |
Fair Value Measurements - Qua_2
Fair Value Measurements - Quantitative Information about Nonrecurring Level 3 Fair Value Financial Instruments (Details) - Nonrecurring - Level 3 $ in Millions | Dec. 31, 2019USD ($)loss_severity_discount_per_loan | Dec. 31, 2018USD ($)loss_severity_discount_per_loan |
Residential first mortgage | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ | $ 14 | $ 12 |
Repossessed assets | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held-for-investment | $ | $ 10 | $ 7 |
Loss severity discount | Residential first mortgage | Range (Weighted Average) | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.25 | 0.25 |
Loss severity discount | Residential first mortgage | High Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.30 | 0.30 |
Loss severity discount | Residential first mortgage | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Loans held for investment, fair value input (in percentage) | 0.259 | 0.283 |
Loss severity discount | Repossessed assets | Range (Weighted Average) | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed asset, fair value input (as a percent) | 0 | 0 |
Loss severity discount | Repossessed assets | High Range | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed asset, fair value input (as a percent) | 1 | 1 |
Loss severity discount | Repossessed assets | Weighted Average | ||
Fair Value Inputs, Assets, Quantitative Information | ||
Repossessed asset, fair value input (as a percent) | 0.171 | 0.258 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amount and Estimated Fair Value of Financial Instruments (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Investment securities available-for-sale | $ 2,116 | $ 2,142 |
Investment securities held-to-maturity | 599 | 681 |
Loans held-for-sale | 5,219 | |
Loans held-for-investment | 12 | 10 |
Mortgage servicing rights | 291 | 290 |
Carrying Value | ||
Assets | ||
Cash and cash equivalents | 426 | 408 |
Investment securities available-for-sale | 2,116 | 2,142 |
Investment securities held-to-maturity | 598 | 703 |
Loans held-for-sale | 5,258 | 3,869 |
Loans held-for-investment | 12,129 | 9,088 |
Loans with government guarantees | 736 | 392 |
Mortgage servicing rights | 291 | 290 |
Federal Home Loan Bank stock | 303 | 303 |
Bank owned life insurance | 349 | 340 |
Repossessed assets | 10 | 7 |
Other assets, foreclosure claims | 45 | 50 |
Derivative financial instruments | 62 | 47 |
Liabilities | ||
Federal Home Loan Bank advances | (4,815) | (3,394) |
Long-term debt | (496) | (495) |
DOJ litigation settlement | (35) | (60) |
Contingent consideration | (10) | (6) |
Derivative financial instruments | (18) | (39) |
Carrying Value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (6,811) | (6,467) |
Carrying Value | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,353) | (2,387) |
Carrying Value | Wholesale deposits | ||
Liabilities | ||
Deposits | (633) | (583) |
Carrying Value | Government deposits | ||
Liabilities | ||
Deposits | (1,213) | (1,202) |
Carrying Value | Custodial deposits | ||
Liabilities | ||
Deposits | (4,136) | (1,741) |
Total fair value | ||
Assets | ||
Cash and cash equivalents | 426 | 408 |
Investment securities available-for-sale | 2,116 | 2,142 |
Investment securities held-to-maturity | 599 | 681 |
Loans held-for-sale | 5,258 | 3,870 |
Loans held-for-investment | 12,031 | 8,966 |
Loans with government guarantees | 707 | 374 |
Mortgage servicing rights | 291 | 290 |
Federal Home Loan Bank stock | 303 | 303 |
Bank owned life insurance | 349 | 340 |
Repossessed assets | 10 | 7 |
Other assets, foreclosure claims | 45 | 50 |
Derivative financial instruments | 88 | 47 |
Liabilities | ||
Federal Home Loan Bank advances | (4,816) | (3,383) |
Long-term debt | (462) | (463) |
DOJ litigation settlement | (35) | (60) |
Contingent consideration | (10) | (6) |
Derivative financial instruments | (44) | (39) |
Total fair value | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (6,050) | (5,475) |
Total fair value | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,368) | (2,379) |
Total fair value | Wholesale deposits | ||
Liabilities | ||
Deposits | (640) | (585) |
Total fair value | Government deposits | ||
Liabilities | ||
Deposits | (1,156) | (1,145) |
Total fair value | Custodial deposits | ||
Liabilities | ||
Deposits | (4,066) | (1,664) |
Total fair value | Level 1 | ||
Assets | ||
Cash and cash equivalents | 426 | 408 |
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 | |
Loans with government guarantees | 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 | 0 | 0 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
DOJ litigation settlement | 0 | 0 |
Contingent consideration | 0 | 0 |
Derivative financial instruments | 0 | 0 |
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 | 0 |
Total fair value | Level 1 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 1 | Custodial deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available-for-sale | 2,116 | 2,142 |
Investment securities held-to-maturity | 599 | 681 |
Loans held-for-sale | 5,258 | 3,870 |
Loans held-for-investment | 10 | 8 |
Loans with government guarantees | 707 | 374 |
Mortgage servicing rights | 0 | 0 |
Federal Home Loan Bank stock | 303 | 303 |
Bank owned life insurance | 349 | 340 |
Repossessed assets | 0 | 0 |
Other assets, foreclosure claims | 45 | 50 |
Derivative financial instruments | 54 | 27 |
Liabilities | ||
Federal Home Loan Bank advances | (4,816) | (3,383) |
Long-term debt | (462) | (463) |
DOJ litigation settlement | 0 | 0 |
Contingent consideration | 0 | 0 |
Derivative financial instruments | (43) | (39) |
Total fair value | Level 2 | Demand deposits and savings accounts | ||
Liabilities | ||
Deposits | (6,050) | (5,475) |
Total fair value | Level 2 | Certificates of deposit | ||
Liabilities | ||
Deposits | (2,368) | (2,379) |
Total fair value | Level 2 | Wholesale deposits | ||
Liabilities | ||
Deposits | (640) | (585) |
Total fair value | Level 2 | Government deposits | ||
Liabilities | ||
Deposits | (1,156) | (1,145) |
Total fair value | Level 2 | Custodial deposits | ||
Liabilities | ||
Deposits | (4,066) | (1,664) |
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 | 12,021 | 8,958 |
Loans with government guarantees | 0 | |
Mortgage servicing rights | 291 | 290 |
Federal Home Loan Bank stock | 0 | 0 |
Bank owned life insurance | 0 | 0 |
Repossessed assets | 10 | 7 |
Other assets, foreclosure claims | 0 | 0 |
Derivative financial instruments | 34 | 20 |
Liabilities | ||
Federal Home Loan Bank advances | 0 | 0 |
Long-term debt | 0 | 0 |
DOJ litigation settlement | (35) | (60) |
Contingent consideration | (10) | (6) |
Derivative financial instruments | (1) | 0 |
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 | 0 |
Total fair value | Level 3 | Government deposits | ||
Liabilities | ||
Deposits | 0 | 0 |
Total fair value | Level 3 | Custodial deposits | ||
Liabilities | ||
Deposits | $ 0 | $ 0 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Fair Value Included in Earnings (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
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) | $ 348 | $ (29) | $ 283 |
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 | 0 | 1 |
DOJ litigation settlement | Other noninterest income | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Changes in fair value, gain (loss) | $ 25 | $ 0 | $ 0 |
Fair Value Measurements - Diffe
Fair Value Measurements - Differences Between Aggregate Fair Value and Aggregate Remaining Contractual Principal Balance Outstanding (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | $ 5,073 | $ 3,619 |
Total assets at fair value | 5,231 | 3,742 |
Assets, fair value over/(under) UPB | 158 | 123 |
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) | 5,060 | 3,607 |
Total assets at fair value | 5,219 | 3,732 |
Assets, fair value over/(under) UPB | 159 | 125 |
Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 13 | 12 |
Total assets at fair value | 12 | 10 |
Assets, fair value over/(under) UPB | (1) | (2) |
DOJ litigation settlement | ||
Fair Value, Option, Quantitative Disclosures | ||
Liabilities, unpaid principal balance (UPB) | (118) | (118) |
Long-term debt, fair value | (35) | (60) |
Liabilities, fair value over/(under) UPB | 83 | 58 |
Nonperforming | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 8 | 10 |
Total assets at fair value | 7 | 9 |
Assets, fair value over/(under) UPB | (1) | (1) |
Nonperforming | Loans held-for-sale | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 3 | 6 |
Total assets at fair value | 3 | 6 |
Assets, fair value over/(under) UPB | 0 | 0 |
Nonperforming | Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 5 | 4 |
Total assets at fair value | 4 | 3 |
Assets, fair value over/(under) UPB | (1) | (1) |
Performing | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 5,065 | 3,609 |
Total assets at fair value | 5,224 | 3,733 |
Assets, fair value over/(under) UPB | 159 | 124 |
Performing | Loans held-for-sale | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 5,057 | 3,601 |
Total assets at fair value | 5,216 | 3,726 |
Assets, fair value over/(under) UPB | 159 | 125 |
Performing | Loans held-for-investment | ||
Fair Value, Option, Quantitative Disclosures | ||
Assets, unpaid principal balance (UPB) | 8 | 8 |
Total assets at fair value | 8 | 7 |
Assets, fair value over/(under) UPB | $ 0 | $ (1) |
Segment Information (Details)
Segment Information (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting Information | |||||||||||
Number of business segments | segment | 3 | ||||||||||
Summary of Operations | |||||||||||
Net interest income | $ 152 | $ 146 | $ 138 | $ 126 | $ 152 | $ 124 | $ 115 | $ 106 | $ 562 | $ 497 | $ 390 |
Provision (benefit) for loan losses | 0 | 1 | 17 | 0 | (5) | (2) | (1) | 0 | 18 | (8) | 6 |
Net interest income after provision (benefit) for loan losses | 152 | 145 | 121 | 126 | 157 | 126 | 116 | 106 | 544 | 505 | 384 |
Net gain on loan sales | 101 | 110 | 75 | 49 | 34 | 43 | 63 | 60 | 335 | 200 | 268 |
Loan fees and charges | 100 | 87 | 82 | ||||||||
Loan administration income | 8 | 5 | 6 | 11 | 8 | 5 | 5 | 5 | 30 | 23 | 21 |
Net return on mortgage servicing rights | 6 | 36 | 22 | ||||||||
Other noninterest income | 139 | 93 | 77 | ||||||||
Total noninterest income | 610 | 439 | 470 | ||||||||
Compensation and benefits | 377 | 318 | 299 | ||||||||
Commissions | 111 | 80 | 72 | ||||||||
Loan processing expense | 80 | 59 | 57 | ||||||||
Other noninterest expense | 320 | 255 | 215 | ||||||||
Total noninterest expense | 888 | 712 | 643 | ||||||||
Income before indirect overhead allocations and income taxes | 266 | 232 | 211 | ||||||||
Indirect overhead allocation Income (expense) | 0 | 0 | 0 | ||||||||
Provision (benefit) for income taxes | 11 | 15 | 14 | 8 | 12 | 12 | 12 | 9 | 48 | 45 | 148 |
Net income (loss) | $ 58 | $ 63 | $ 61 | $ 36 | $ 54 | $ 48 | $ 50 | $ 35 | 218 | 187 | 63 |
Intersegment (expense) revenue | 21 | ||||||||||
Average balances | |||||||||||
Loans held-for-sale | 3,952 | 4,196 | 4,146 | ||||||||
Loans with government guarantees | 553 | 303 | 290 | ||||||||
Loans held-for-investment | 10,932 | 8,455 | 6,511 | ||||||||
Total assets | 20,673 | 17,980 | 15,846 | ||||||||
Deposits | 14,707 | 10,775 | 8,907 | ||||||||
Community Banking | |||||||||||
Summary of Operations | |||||||||||
Net interest income | 449 | 314 | 238 | ||||||||
Provision (benefit) for loan losses | 20 | 2 | 4 | ||||||||
Net interest income after provision (benefit) for loan losses | 429 | 312 | 234 | ||||||||
Net gain on loan sales | (29) | (12) | (10) | ||||||||
Loan fees and charges | (1) | (1) | 0 | ||||||||
Loan administration income | (5) | (3) | |||||||||
Net return on mortgage servicing rights | 0 | 0 | 0 | ||||||||
Other noninterest income | 64 | 44 | 31 | ||||||||
Total noninterest income | 29 | 28 | 21 | ||||||||
Compensation and benefits | 100 | 70 | 62 | ||||||||
Commissions | 2 | 2 | 0 | ||||||||
Loan processing expense | 7 | 5 | 5 | ||||||||
Other noninterest expense | 167 | 103 | 87 | ||||||||
Total noninterest expense | 276 | 180 | 154 | ||||||||
Income before indirect overhead allocations and income taxes | 182 | 160 | 101 | ||||||||
Indirect overhead allocation Income (expense) | (41) | (39) | (41) | ||||||||
Provision (benefit) for income taxes | 30 | 25 | 21 | ||||||||
Net income (loss) | 111 | 96 | 39 | ||||||||
Intersegment (expense) revenue | 0 | ||||||||||
Average balances | |||||||||||
Loans held-for-sale | 32 | 24 | 16 | ||||||||
Loans with government guarantees | 0 | 0 | 0 | ||||||||
Loans held-for-investment | 10,910 | 8,417 | 6,475 | ||||||||
Total assets | 11,378 | 8,615 | 6,544 | ||||||||
Deposits | 10,301 | 8,892 | 7,454 | ||||||||
Mortgage Originations | |||||||||||
Summary of Operations | |||||||||||
Net interest income | 106 | 128 | 129 | ||||||||
Provision (benefit) for loan losses | 2 | 2 | 4 | ||||||||
Net interest income after provision (benefit) for loan losses | 104 | 126 | 125 | ||||||||
Net gain on loan sales | 364 | 212 | 278 | ||||||||
Loan fees and charges | 69 | 63 | 67 | ||||||||
Loan administration income | (22) | (14) | |||||||||
Net return on mortgage servicing rights | 6 | 36 | 22 | ||||||||
Other noninterest income | 10 | 16 | 21 | ||||||||
Total noninterest income | 427 | 313 | 370 | ||||||||
Compensation and benefits | 114 | 105 | 100 | ||||||||
Commissions | 109 | 78 | 72 | ||||||||
Loan processing expense | 35 | 25 | 26 | ||||||||
Other noninterest expense | 88 | 58 | 65 | ||||||||
Total noninterest expense | 346 | 266 | 263 | ||||||||
Income before indirect overhead allocations and income taxes | 185 | 173 | 232 | ||||||||
Indirect overhead allocation Income (expense) | (42) | (68) | (63) | ||||||||
Provision (benefit) for income taxes | 29 | 22 | 59 | ||||||||
Net income (loss) | 114 | 83 | 110 | ||||||||
Intersegment (expense) revenue | (18) | ||||||||||
Average balances | |||||||||||
Loans held-for-sale | 3,920 | 4,172 | 4,130 | ||||||||
Loans with government guarantees | 553 | 303 | 290 | ||||||||
Loans held-for-investment | 24 | 9 | 7 | ||||||||
Total assets | 5,408 | 5,406 | 5,414 | ||||||||
Deposits | 0 | 0 | 0 | ||||||||
Mortgage Servicing | |||||||||||
Summary of Operations | |||||||||||
Net interest income | 16 | 7 | 11 | ||||||||
Provision (benefit) for loan losses | 0 | 0 | 0 | ||||||||
Net interest income after provision (benefit) for loan losses | 16 | 7 | 11 | ||||||||
Net gain on loan sales | 0 | 0 | 0 | ||||||||
Loan fees and charges | 32 | 25 | 15 | ||||||||
Loan administration income | 124 | 69 | |||||||||
Net return on mortgage servicing rights | 0 | 0 | 0 | ||||||||
Other noninterest income | 0 | 0 | 12 | ||||||||
Total noninterest income | 156 | 94 | 66 | ||||||||
Compensation and benefits | 28 | 19 | 16 | ||||||||
Commissions | 0 | 0 | 0 | ||||||||
Loan processing expense | 36 | 26 | 22 | ||||||||
Other noninterest expense | 59 | 44 | 39 | ||||||||
Total noninterest expense | 123 | 89 | 77 | ||||||||
Income before indirect overhead allocations and income taxes | 49 | 12 | 0 | ||||||||
Indirect overhead allocation Income (expense) | (18) | (20) | (23) | ||||||||
Provision (benefit) for income taxes | 6 | (2) | (8) | ||||||||
Net income (loss) | 25 | (6) | (15) | ||||||||
Intersegment (expense) revenue | 39 | ||||||||||
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 | 47 | 34 | 36 | ||||||||
Deposits | 3,850 | 1,883 | 1,453 | ||||||||
Other | |||||||||||
Summary of Operations | |||||||||||
Net interest income | (9) | 48 | 12 | ||||||||
Provision (benefit) for loan losses | (4) | (12) | (2) | ||||||||
Net interest income after provision (benefit) for loan losses | (5) | 60 | 14 | ||||||||
Net gain on loan sales | 0 | 0 | 0 | ||||||||
Loan fees and charges | 0 | 0 | 0 | ||||||||
Loan administration income | (67) | (29) | |||||||||
Net return on mortgage servicing rights | 0 | 0 | 0 | ||||||||
Other noninterest income | 65 | 33 | 13 | ||||||||
Total noninterest income | (2) | 4 | 13 | ||||||||
Compensation and benefits | 135 | 124 | 121 | ||||||||
Commissions | 0 | 0 | 0 | ||||||||
Loan processing expense | 2 | 3 | 4 | ||||||||
Other noninterest expense | 6 | 50 | 24 | ||||||||
Total noninterest expense | 143 | 177 | 149 | ||||||||
Income before indirect overhead allocations and income taxes | (150) | (113) | (122) | ||||||||
Indirect overhead allocation Income (expense) | 101 | 127 | 127 | ||||||||
Provision (benefit) for income taxes | (17) | 0 | 76 | ||||||||
Net income (loss) | (32) | 14 | (71) | ||||||||
Intersegment (expense) revenue | 0 | ||||||||||
Average balances | |||||||||||
Loans held-for-sale | 0 | 0 | |||||||||
Loans with government guarantees | 0 | 0 | |||||||||
Loans held-for-investment | (2) | 29 | 29 | ||||||||
Total assets | 3,840 | 3,925 | 3,852 | ||||||||
Deposits | 556 | 0 | $ 0 | ||||||||
Intersegment Eliminations | |||||||||||
Summary of Operations | |||||||||||
Intersegment (expense) revenue | 0 | ||||||||||
Intersegment Eliminations | Community Banking | |||||||||||
Summary of Operations | |||||||||||
Intersegment (expense) revenue | (19) | 1 | |||||||||
Intersegment Eliminations | Mortgage Originations | |||||||||||
Summary of Operations | |||||||||||
Intersegment (expense) revenue | 29 | 10 | |||||||||
Intersegment Eliminations | Mortgage Servicing | |||||||||||
Summary of Operations | |||||||||||
Intersegment (expense) revenue | 26 | 19 | |||||||||
Intersegment Eliminations | Other | |||||||||||
Summary of Operations | |||||||||||
Intersegment (expense) revenue | $ (36) | $ (30) |
Holding Company Only Financia_3
Holding Company Only Financial Statements - Condensed Unconsolidated Statements of Financial Condition (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||||
Cash and cash equivalents | $ 426 | $ 408 | |||
Other assets | 930 | 884 | |||
Total assets | 23,266 | 18,531 | |||
Liabilities | |||||
Long term debt | 496 | $ 495 | 495 | ||
Other liabilities | 1,021 | 692 | |||
Total liabilities | 21,478 | 16,961 | |||
Stockholders’ Equity | |||||
Common stock | 1 | 1 | |||
Additional paid in capital | 1,483 | 1,522 | |||
Accumulated other comprehensive loss | 1 | (47) | |||
Retained earnings | 303 | 94 | |||
Total stockholders’ equity | 1,788 | 1,570 | $ 1,399 | $ 1,336 | |
Total liabilities and stockholders’ equity | 23,266 | 18,531 | |||
Unconsolidated trusts | 7 | 7 | |||
Parent Company | |||||
Assets | |||||
Cash and cash equivalents | 233 | 201 | $ 196 | $ 70 | |
Investment in subsidiaries | 2,031 | 1,836 | |||
Other assets | 47 | 52 | |||
Total assets | 2,311 | 2,089 | |||
Liabilities | |||||
Long term debt | 496 | 495 | |||
Other liabilities | 27 | 24 | |||
Total liabilities | 523 | 519 | |||
Stockholders’ Equity | |||||
Common stock | 1 | 1 | |||
Additional paid in capital | 1,533 | 1,522 | |||
Accumulated other comprehensive loss | 1 | (47) | |||
Retained earnings | 303 | 94 | |||
Treasury Stock | (50) | 0 | |||
Total stockholders’ equity | 1,788 | 1,570 | |||
Total liabilities and stockholders’ equity | $ 2,311 | $ 2,089 |
Holding Company Only Financia_4
Holding Company Only Financial Statements - Condensed Unconsolidated Statements of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income | |||||||||||
Total interest income | $ 213 | $ 203 | $ 198 | $ 180 | $ 181 | $ 183 | $ 167 | $ 152 | $ 794 | $ 683 | $ 527 |
Expenses | |||||||||||
Interest | 61 | 57 | 60 | 54 | 29 | 59 | 52 | 46 | 232 | 186 | 137 |
Income before income taxes | 69 | 78 | 75 | 44 | 66 | 60 | 62 | 44 | 266 | 232 | 211 |
Provision (benefit) for income taxes | 11 | 15 | 14 | 8 | 12 | 12 | 12 | 9 | 48 | 45 | 148 |
Net income | $ 58 | $ 63 | $ 61 | $ 36 | $ 54 | $ 48 | $ 50 | $ 35 | 218 | 187 | 63 |
Other comprehensive loss | 48 | (31) | (9) | ||||||||
Comprehensive income | 266 | 156 | 54 | ||||||||
Parent Company | |||||||||||
Income | |||||||||||
Interest | 4 | 1 | 0 | ||||||||
Cash dividends received from subsidiaries | 100 | 0 | 0 | ||||||||
Total interest income | 104 | 1 | 0 | ||||||||
Expenses | |||||||||||
Interest | 28 | 27 | 25 | ||||||||
General and administrative | 6 | 7 | 9 | ||||||||
Total | 34 | 34 | 34 | ||||||||
Net income (loss) before undistributed income of subsidiaries | 70 | (33) | (34) | ||||||||
Equity in undistributed income of subsidiaries | 142 | 212 | 110 | ||||||||
Income before income taxes | 212 | 179 | 76 | ||||||||
Provision (benefit) for income taxes | (6) | (8) | 13 | ||||||||
Net income | 218 | 187 | 63 | ||||||||
Other comprehensive loss | 48 | (31) | (9) | ||||||||
Comprehensive income | $ 266 | $ 156 | $ 54 |
Holding Company Only Financia_5
Holding Company Only Financial Statements - Condensed Unconsolidated Statements of Cash Flow (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||||||||||
Net income | $ 58 | $ 63 | $ 61 | $ 36 | $ 54 | $ 48 | $ 50 | $ 35 | $ 218 | $ 187 | $ 63 |
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Other | (205) | (87) | (173) | ||||||||
Net cash used in operating activities | (17,083) | (23,378) | (25,322) | ||||||||
Investing Activities | |||||||||||
Net cash provided by investing activities | 12,688 | 24,607 | 22,494 | ||||||||
Financing Activities | |||||||||||
Net cash provided (used) by financing activities | 4,419 | (1,020) | 2,843 | ||||||||
Cash and cash equivalents, beginning of year | 408 | 408 | |||||||||
Cash and cash equivalents, end of year | 426 | 408 | 426 | 408 | |||||||
Parent Company | |||||||||||
Operating Activities | |||||||||||
Net income | 218 | 187 | 63 | ||||||||
Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
Equity in undistributed (income) loss of subsidiaries | (241) | (177) | 47 | ||||||||
Dividends received from subsidiaries | 104 | 0 | 0 | ||||||||
Other | 1 | 15 | (11) | ||||||||
Stock-based compensation | 11 | 10 | 5 | ||||||||
Net cash used in operating activities | 91 | 5 | 126 | ||||||||
Investing Activities | |||||||||||
Net cash provided by investing activities | 0 | 0 | 0 | ||||||||
Financing Activities | |||||||||||
Accelerated share repurchase | (50) | 0 | 0 | ||||||||
Dividends declared and paid | (9) | 0 | 0 | ||||||||
Net cash provided (used) by financing activities | (59) | 0 | 0 | ||||||||
Net increase in cash and cash equivalents | 32 | 5 | 126 | ||||||||
Cash and cash equivalents, beginning of year | $ 201 | $ 196 | 201 | 196 | 70 | ||||||
Cash and cash equivalents, end of year | $ 233 | $ 201 | $ 233 | $ 201 | $ 196 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Interest income | $ 213 | $ 203 | $ 198 | $ 180 | $ 181 | $ 183 | $ 167 | $ 152 | $ 794 | $ 683 | $ 527 |
Interest expense | 61 | 57 | 60 | 54 | 29 | 59 | 52 | 46 | 232 | 186 | 137 |
Net interest income | 152 | 146 | 138 | 126 | 152 | 124 | 115 | 106 | 562 | 497 | 390 |
Provision (benefit) for loan losses | 0 | 1 | 17 | 0 | (5) | (2) | (1) | 0 | 18 | (8) | 6 |
Net interest income after provision (benefit) for loan losses | 152 | 145 | 121 | 126 | 157 | 126 | 116 | 106 | 544 | 505 | 384 |
Net gain on loan sales | 101 | 110 | 75 | 49 | 34 | 43 | 63 | 60 | 335 | 200 | 268 |
Loan fees and charges | 30 | 29 | 24 | 17 | 20 | 23 | 24 | 20 | 100 | 87 | 82 |
Deposit fees and charges | 10 | 10 | 10 | 8 | 6 | 5 | 5 | 5 | 38 | 21 | 18 |
Loan administration income | 8 | 5 | 6 | 11 | 8 | 5 | 5 | 5 | 30 | 23 | 21 |
Net return (loss) on the mortgage servicing rights | (3) | (2) | 5 | 6 | 10 | 13 | 9 | 4 | 6 | 36 | 22 |
Other noninterest income | 16 | 19 | 48 | 18 | 20 | 18 | 17 | 17 | 101 | 72 | 59 |
Noninterest expense | 245 | 238 | 214 | 191 | 189 | 173 | 177 | 173 | 888 | 712 | 643 |
Income before income taxes | 69 | 78 | 75 | 44 | 66 | 60 | 62 | 44 | 266 | 232 | 211 |
Provision for income taxes | 11 | 15 | 14 | 8 | 12 | 12 | 12 | 9 | 48 | 45 | 148 |
Net income | $ 58 | $ 63 | $ 61 | $ 36 | $ 54 | $ 48 | $ 50 | $ 35 | $ 218 | $ 187 | $ 63 |
Basic income (loss) per share (in usd per share) | $ 1.01 | $ 1.12 | $ 1.08 | $ 0.64 | $ 0.94 | $ 0.84 | $ 0.86 | $ 0.61 | $ 3.85 | $ 3.26 | $ 1.11 |
Diluted income per share (in usd per share) | $ 1 | $ 1.11 | $ 1.06 | $ 0.63 | $ 0.93 | $ 0.83 | $ 0.85 | $ 0.60 | $ 3.80 | $ 3.21 | $ 1.09 |